Document:

exv10w31

Exhibit (10) - 31

EXCHANGE AGREEMENT

and

PLAN OF REORGANIZATION

by and among

SUPERIOR BANCORP,

SUPERIOR HOLDINGS, LLC

AND

KBW, INC.

Dated as of January 20, 2010

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I
	 	 	 	 
	 
	 	 	 	 
	THE SHARE EXCHANGE

	 
	 	 	 	 
	Section 1.1 Share Exchange
	 	 	1	 
	Section 1.2 The Closing
	 	 	1	 
	Section 1.3 Interpretation
	 	 	3	 
	 
	 	 	 	 
	ARTICLE II

	 
	 	 	 	 
	REPRESENTATIONS AND WARRANTIES OF THE INVESTOR

	 
	 	 	 	 
	Section 2.1 Status
	 	 	3	 
	Section 2.2 Authorization, Enforceability
	 	 	3	 
	Section 2.3 Ownership
	 	 	4	 
	Section 2.4 Non-Contravention
	 	 	4	 
	Section 2.5 Investor Securities Law Representation
	 	 	4	 
	 
	 	 	 	 
	ARTICLE III 

	 
	 	 	 	 
	REPRESENTATIONS AND WARRANTIES OF THE COMPANY

	 
	 	 	 	 
	Section 3.1 Existence and Power
	 	 	5	 
	Section 3.2 Authorization and Enforceability
	 	 	6	 
	Section 3.3 Valid Issuance of Common Shares
	 	 	6	 
	Section 3.4 Non-Contravention
	 	 	6	 
	Section 3.5 No Company Material Adverse Effect
	 	 	7	 
	Section 3.6 Offering of Securities
	 	 	7	 
	Section 3.7 Brokers and Finders
	 	 	7	 
	Section 3.8 Company Financial Statements
	 	 	7	 
	Section 3.9 Proceedings
	 	 	7	 
	Section 3.10 Compliance with Laws; Permits
	 	 	7	 
	Section 3.11 Reports
	 	 	8	 
	 
	 	 	 	 
	ARTICLE IV

	 
	 	 	 	 
	COVENANTS

	 
	 	 	 	 
	Section 4.1 Commercially Reasonable Efforts
	 	 	9	 
	Section 4.2 Expenses
	 	 	9	 
	Section 4.3 Exchange Listing
	 	 	9	 
	Section 4.4 Certain Notifications Until Closing
	 	 	9	 
	Section 4.5 Stockholder’s Meeting
	 	 	9	 

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	 	 	Page	 
	Section 4.6 Publicity 
	 	 	10	 
	Section 4.7 Withholding of Tax
	 	 	10	 
	ARTICLE V
	 	 	 	 
	 
	 	 	 	 
	SECURITIES LAW CONSIDERATIONS
	 	 	 	 
	 
	 	 	 	 
	ARTICLE VI
	 	 	 	 
	 
	 	 	 	 
	MISCELLANEOUS
	 	 	 	 
	 
	 	 	 	 
	Section 6.1 Termination
	 	 	10	 
	Section 6.2 Survival of Representations and Warranties
	 	 	11	 
	Section 6.3 Amendment
	 	 	11	 
	Section 6.4 Waiver of Conditions
	 	 	11	 
	Section 6.5 Governing Law; Submission to Jurisdiction, Etc.
	 	 	11	 
	Section 6.6 Notices
	 	 	12	 
	Section 6.7 Definitions
	 	 	12	 
	Section 6.8 Assignment
	 	 	13	 
	Section 6.9 Severability
	 	 	14	 
	Section 6.10 No Third-Party Beneficiaries
	 	 	14	 
	Section 6.11 Entire Agreement, Etc.
	 	 	14	 
	Section 6.12 Counterparts and Facsimile
	 	 	14	 

ii

 

	 	 	 
	Defined Terms
	 	 
	 
	 	 
	Affiliate

	 	Section 6.7(b)
	Agreement

	 	Preamble
	Bankruptcy Event

	 	Section 6.7(c)
	Business Combination

	 	Section 6.8
	Capital Securities

	 	Recitals
	Capitalization Date

	 	Section 3.1(b)
	Closing

	 	Section 1.2(a)
	Closing Date

	 	Section 1.2(a)
	Code

	 	Recitals
	Common Securities

	 	Recitals
	Common Shares

	 	Section 1.1
	Common Stock

	 	Recitals
	Company

	 	Preamble
	Company
Material Adverse Effect

	 	Section 6.7(d)
	Company 10-K

	 	Section 3.8
	Covered Securities

	 	Section 4.8
	Exchange

	 	Recitals
	Exchange Act

	 	Section 6.7(g)
	Governmental Entities

	 	Section 1.2(c)
	Indenture

	 	Section 1.2(d)(iii)
	Investor

	 	Preamble
	Investor Material Adverse Effect

	 	Section 2.4
	OTS

	 	Section 3.11
	Previously Disclosed

	 	Section 6.7(e)
	Proposals

	 	Section 4.5
	SEC

	 	Section 4.5
	Securities Act

	 	Section 6.7(f)
	Significant Subsidiaries

	 	Section 3.1
	Subsidiary

	 	Preamble
	Transfer

	 	Section 5.4
	Trust

	 	Recitals
	Trust Agreement

	 	Recitals
	Trust Shares

	 	Section 1.1

iii

 

     EXCHANGE AGREEMENT AND PLAN OF REORGANIZATION, dated as of January 20, 2010 (this
“Agreement”) by and among Superior Bancorp, a Delaware corporation (the
“Company”), Superior Holdings, LLC, an Alabama limited liability company and wholly-owned
subsidiary of the Company (“Subsidiary”) and KBW, Inc. (the “Investor”).

BACKGROUND

     WHEREAS, the Investor is, as of the date hereof, the beneficial owner of 4,000 shares of
the Trust’s capital securities designated as “Floating Rate Capital Securities”, having a
liquidation amount of $1,000 per share (the “Capital Securities”) that were issued
pursuant to the Amended and Restated Declaration of Trust of Superior Capital Trust I, a Delaware
Statutory Trust (the “Trust”), dated as of July 19, 2007 among the Company, Wilmington Trust
Company as the Delaware Trustee and the Institutional Trustee, and the administrators named
therein (the “Trust Agreement”);

     WHEREAS, the Company, the Subsidiary and the Investor desire to exchange newly issued shares
of common stock par value $.001 of the Company (the “Common Stock”) for the 4,000 shares
of the Capital Securities beneficially owned and held by the Investor, on the terms and subject to
the conditions set forth herein such Trust Shares to be transferred to the Subsidiary (the
“Exchange”); and

     WHEREAS, the Company, the Subsidiary and the Investor intend the Exchange be treated as a
reorganization pursuant to Section

368(a)(1)(E) of the Internal Revenue Code of 1981, as amended
(the “Code”), each of the parties be a party to a reorganization, as that term is defined in
Section 368(b) of the Code, as this Agreement constitutes and reflect a “plan of reorganization”,
as that term is defined in Treasury Regulation § 1.368-1(g).

     NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in
this Agreement, the receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound, the parties do hereby agree as follows:

ARTICLE I

THE SHARE EXCHANGE

     Section 1.1 Share Exchange.

     On the terms and subject to the conditions set forth in this Agreement, (a) the Company agrees
to issue and deliver the number of shares of Common Stock to the Investor with a “market value”
equal to fifty percent (50%) of the face value of all the Capital Securities held by the Investor
with the market value of the Common stock being the greater of (i) the average closing price of the
Common Stock for the ten consecutive trading days immediately prior to Closing or (ii) ninety
percent (90%) of the volume weighted average price (“VWAP”) as reported on the Bloomberg
Professional© VWAP Summary Page for the stock symbol “SUPR” for the ten trading days preceding
the Closing for the Capital Securities (the “Common Shares”) in exchange for 4,000 shares
of Capital Securities beneficially owned and held by the Investor (such shares, the “Trust
Shares”), and (b) the Investor agrees to cause the transfer to the Subsidiary as contemplated
by this Agreement the Trust Shares in exchange for the Common Shares being delivered to the
Investor. Anything to the contrary above in this Section 1.1 notwithstanding, the parties hereto
agree that appropriate anti-dilutive adjustments will be made in the number of shares of Common
Stock to be issued hereunder in the event of a dilutive issuance of Common Stock, the effect of
which is not captured by the use of the ten-consecutive-trading day-measuring period.

     Section 1.2 The Closing.

     (a) The closing of the Exchange (the “Closing”) will take place at the offices of
Haskell Slaughter Young & Rediker, LLC, 1400 Park Place Tower, 2001 Park Place North, Birmingham,
Alabama 35203, at 9:00

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a.m., CST on the business day after the day on which all of the conditions set forth in Sections
1.2(c), (d) and (e) are satisfied or waived (other than those conditions that by their terms must
be satisfied on the Closing Date, but subject to the satisfaction or waiver of those conditions),
or at such other place, time and date as shall be agreed between the Company, the Subsidiary, and
the Investor. The time and date on which the Closing occurs is referred to in this Agreement as
the “Closing Date”.

     (b) Subject to the fulfillment or waiver of the conditions to the Closing in this Section 1.2,
at the Closing (i) the Company will deliver to the Investor the Common Shares, as evidenced by one or
more certificates dated the Closing Date and registered in the name of the Investor or its designee(s), and (ii)
the Investor will transfer the Trust Shares to the Subsidiary as contemplated by this Agreement or via book entry, in
either case, absent restrictions on transfer in accordance with the last sentence of Article V hereof.

     (c) The respective obligations of the Investor, the Subsidiary and the Company to consummate
the Exchange are subject to the fulfillment (or waiver by the Company and the Investor, as
applicable) prior to the Closing of the following conditions:

     (i) any approvals or authorizations of all United States and other governmental,
regulatory or judicial authorities (collectively, “Governmental Entities”)
required for the consummation of the Exchange shall have been obtained or made in
form and substance reasonably satisfactory to each party and shall be in full force
and effect and all waiting periods required by United States or other applicable
law, if any, shall have expired;

     (ii) no provision of any applicable United States or other law and no judgment,
injunction, order or decree of any Governmental Entity shall prohibit consummation
of the Exchange as contemplated by this Agreement; and

     (iii) the Company shall have obtained the consent of its shareholders to issue
the Common Shares if such consent is required by NASDAQ (see Section 4.5 hereof).

     (d) The obligation of the Investor to consummate the Exchange is also subject to the
fulfillment (or waiver by the Investor) at or prior to the Closing of each of the following conditions:

     (i) (A) the representations and warranties of the Company set forth in Article III
of this Agreement shall be true and correct in all material respects as though made on
and as of the Closing Date (other than representations and warranties that by their
terms speak as of another date, which representations and warranties shall be true
and correct in all material respects as of such other date), except to the extent
that the failure of such representations and warranties to be so true and correct
(without giving effect to any qualifiers or exceptions relating to materiality or
Company Material Adverse Effect (as defined below)), individually or in the
aggregate, does not have and would not reasonably be likely to have a Company
Material Adverse Effect and (B) the Company shall have performed in all material
respects all obligations required to be performed by it under this Agreement at or
prior to the Closing;

     (ii) the Investor shall have received a certificate signed on behalf of the
Company by a senior executive officer certifying to the effect that the conditions
set forth in Section 1.2(d)(i) have been satisfied;

     (iii) the Investor shall have received an amount equal to all accrued and
unpaid distributions on the Trust Shares to, but excluding, the Closing Date in
cash to an account designated by the Investor;

     (iv) the Company shall have made delivery via book entry or delivered
certificates in proper form evidencing the Common Shares to the Investor or its
designee(s); and

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     (v) the Company shall have delivered to the Investor written opinions from
outside counsel to the Company, addressed to the Investor and dated as of the
Closing Date, in substantially the form attached hereto as Annex D.

     (e) The obligation of the Company and the Subsidiary to consummate the Exchange is also
subject to the fulfillment (or waiver by the Company and the Subsidiary) at or prior to the Closing
of each of the following conditions: (i) the representations and warranties of the Investor set
forth in this Agreement shall be true and correct in all respects as though made on and as of the
Closing Date (other than representations and warranties that by their terms speak as of another
date, which representations and warranties shall be true and correct in all respects as of such
other date), except to the extent that the failure of such representations and warranties to be so
true and correct (without giving effect to any qualifiers or exceptions relating to materiality or
Investor Material Adverse Effect (as defined below)), individually or in the aggregate, does not
have and would not reasonably be likely to have an Investor Material Adverse Effect and (ii) the
Investor shall have performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing.

     Section 1.3 Interpretation.

     When a reference is made in this Agreement to “Recitals,” “Articles,” “Sections,” “Annexes”
or “Schedules” such reference shall be to a Recital, Article or Section of, or Annex or Schedule
to, this Agreement, unless otherwise indicated. The terms defined in the singular have a
comparable meaning when used in the plural, and vice versa. References to “herein”, “hereof”,
“hereunder” and the like refer to this Agreement as a whole and not to any particular section or
provision, unless the context requires otherwise. The table of contents and headings contained in
this Agreement are for reference purposes only and are not part of this Agreement. Whenever the
words “include,” “includes” or “including” are used in this Agreement, they shall be deemed
followed by the words “without limitation.” No rule of construction against the draftsperson shall
be applied in connection with the interpretation or enforcement of this Agreement, as this
Agreement is the product of negotiation between sophisticated parties advised by counsel. All
references to “$” or “dollars” mean the lawful currency of the United States of America. Except as
expressly stated in this Agreement, all references to any statute, rule or regulation are to the
statute, rule or regulation as amended, modified, supplemented or replaced from time to time (and,
in the case of statutes, include any rules and regulations promulgated under the statute) and to
any section of any statute, rule or regulation include any successor to the section. References to
a “business day” shall mean any day except Saturday, Sunday and any day on which banking
institutions in New York, New York, Birmingham, Alabama or Wilmington, Delaware generally are
authorized or required by law, regulation or executive order to remain closed or are customarily
closed.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE INVESTOR

     The Investor represents and warrants to the Company as of the date hereof and as of the
Closing Date that:

     Section 2.1 Status.

     The Investor has been duly organized and is validly existing and in good standing under the
laws of its jurisdiction of organization, with the necessary power and authority to own its
properties and conduct its business in all material respects as currently conducted.

     Section 2.2 Authorization, Enforceability.

     The Investor has the power and authority to execute and deliver the Transaction Documents to
which it is a party and to carry out its obligations hereunder and thereunder. The execution,
delivery and performance by the Investor of the Transaction Documents to which it is a party and
the transactions contemplated hereby and thereby have been duly authorized by all necessary action
on the part of the Investor, and no further approval or authorization is required on the part of
the Investor. The Transaction Documents to which the Investor is a party are

3

 

or will be a valid and binding obligation of the Investor enforceable against the Investor in
accordance with their respective terms, except as the same may be limited by the Bankruptcy
Exceptions.

     Section 2.3 Ownership.

     (a) The Investor is the record and beneficial owner of the Trust Shares, free and clear of any
lien, security interest, charge or encumbrance and any other limitation or restriction (including
any restriction on the right to vote, sell or otherwise dispose of the Trust Shares) and will transfer and deliver to the
Company at the Closing valid title to the Trust Shares free and clear of any lien, security interest, charge or
encumbrance and any such limitation or restriction.

     (b) As of the date hereof, the Investor does not beneficially own more than 9.9% of the
outstanding shares of Common Stock. As of the consummation of the Exchange, the Investor will not
beneficially own more than 9.9% or more of the outstanding shares of Common Stock or voting power of the Company.
The Investor does not have an agreement, arrangement or understanding with any person (other than the Company)
to acquire, dispose of or vote any securities of the Company.

     Section 2.4 Non-Contravention.

     The execution, delivery and performance by the Investor of this Agreement and the
consummation of the transactions contemplated hereby and compliance by the Investor with the
provisions hereof, will not (a) violate, conflict with, or result in a breach of any provision of,
or constitute a default (or an event which, with notice or lapse of time or both, would constitute
a default) under, or result in the termination of, or accelerate the performance required by, or
result in a right of termination or acceleration of, or result in the creation of, any lien,
security interest, charge or encumbrance upon any of the properties or assets of the Investor
under any of the terms, conditions or provisions of (i) its organizational documents, or (ii) any
note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or
obligation to which the Investor is a party or by which it may be bound, or to which the Investor
or any of the properties or assets of the Investor may be subject, or (b) subject to compliance
with the statutes and regulations referred to in the next paragraph, violate any statute, rule or
regulation or any judgment, ruling, order, writ, injunction or decree applicable to the Investor
or its properties or assets except, in the case of clauses (a)(ii) and (b), for those occurrences
that, individually or in the aggregate, have not had and would not be reasonably likely to have an
Investor Material Adverse Effect. “Investor Material Adverse Effect
“means a
material adverse effect on the ability of the Investor to consummate the Exchange and the other
transactions contemplated by this Agreement.

     Other than in connection or in compliance with the provisions of the Securities Act and the
securities or blue sky laws of the various states, to the Investor’s knowledge, without inquiry,
no notice to, filing with, exemption or review by, or authorization, consent or approval of, any
Governmental Entity is required to be made or obtained by the Investor in connection with the
consummation by the Investor of the Exchange and the other transactions contemplated by this
Agreement, except as would not reasonably be expected to have a material adverse effect on the
ability of the Investor to consummate the Exchange and other transactions contemplated by this
Agreement.

     Section 2.5 Investor Securities Law Representation.

     (a) The Investor has knowledge, skill and experience in financial, business and
equity investments in entities such as the Company and is capable of evaluating the
merits and risks of such investment and protecting the Investor’s interest in
connection with the acquisition of the Common Shares. The Investor understands that the
acquisition of the Common Shares is a speculative investment and involves substantial
risks and that the Investor could lose the Investor’s entire investment in the Common
Shares. Further, the Investor has taken full cognizance of and understands all of the
risks related to the purchase of the Common Shares. To the extent deemed necessary by
the Investor, the Investor has retained, at its own expense, and relied upon,
appropriate professional advice regarding the investment, tax and legal merits and
consequences of purchasing and owning the Common Shares. The Investor has the ability
to bear the economic risks of the Investor’s investment in the Company, including a
complete loss of the investment, and the Investor has no need for liquidity in such
investment.

4

 

     (b) The Investor has been furnished by the Company all information (or provided access to all
information) regarding the business and financial condition of the Company, its expected plans
for future business activities, the attributes of the Common Shares and the merits and risks of an investment in
the Common Shares which the Investor has requested or otherwise believes that the Investor needs in order to
evaluate the investment in the Company.

     (c) In making the Investor’s investment decision, the Investor is relying solely on
investigations made by the Investor and the Investor’s representative(s), if any. The Company’s offer to exchange
the Common Shares was communicated to the Investor in such a manner that the Investor was able to ask questions
of and receive answers from the management of the Company concerning the terms and conditions of the
Exchange, and that at no time was the Investor presented with or solicited by or through any advertisement, article,
leaflet, public promotional meeting, notice or other communication published in any newspaper, magazine or similar media
or broadcast over television or radio or presented at any seminar or meeting or any other form of general or
public advertising or solicitation.

     (d) The Investor acknowledges that the Investor has been advised that:

	 	(i)	 	The Common Shares have not been approved or disapproved by the Securities
and Exchange Commission (the “SEC”) or any state securities
commission, nor has the SEC or any state securities commission
passed upon the accuracy or adequacy of any representations by the
Company; and
	 
	 	(ii)	 	In making an investment decision, the Investor must
rely on its own examination of the Company and the terms of the
proposed sale to the Investor of the Common Shares, including the
merits and risks involved. The Common Shares have not been recommended
by any federal or state securities commission or other regulatory
authority. Furthermore, the foregoing authorities have not confirmed
the accuracy or determined the adequacy of any representation by the
Company.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SUBSIDIARY

     Except as Previously Disclosed, the Company and, as applicable, the Subsidiary represents and
warrants to Investor as of the date hereof and as of the Closing Date that:

     Section 3.1 Existence and Power.

     (a) Organization, Authority and Significant Subsidiaries. The Company is duly
organized, validly existing and in good standing under the laws of the State of Delaware and has all necessary
power and authority to own, operate and lease its properties and to carry on its business as it is being currently
conducted, and except as has not, individually or in the aggregate, had and would not reasonably be expected to have a
Company Material Adverse Effect, has been duly qualified as a foreign
corporation for the transaction of
business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification; each subsidiary of the Company that is a “significant
subsidiary” within the meaning of Rule 1-02(w) of Regulation S-X under the Securities Act has been duly organized and is
validly existing in good standing under the laws of its jurisdiction of organization (“Significant Subsidiary”). The
Charter and bylaws of the Company, copies of which have been provided to the Investor prior to the date hereof, are
true, complete and correct copies of such documents as in full force and effect as of the date hereof.

     (b) Capitalization. The authorized capital stock of the Company, and the outstanding
capital stock of the Company (including securities convertible into, or exercisable or exchangeable for,
capital stock of the Company) as of the most recent fiscal month-end
preceding the date hereof (the “Capitalization
Date”) is set forth

5

 

on Schedule A. The outstanding shares of capital stock of the Company have been duly authorized
and are validly issued and outstanding, fully paid and nonassessable, and subject to no preemptive
rights (and were not issued in violation of any preemptive rights). Except as provided in the
Warrant (described on Schedule A), as of the date hereof, the Company does not have outstanding
any securities or other obligations providing the holder the right to acquire Common Stock that is
not reserved for issuance as specified on Schedule A, and the Company has not made any other
commitment to authorize, issue or sell any Common Stock. Since the Capitalization Date, the
Company has not issued any shares of Common Stock other than (i) shares issued upon the exercise
of stock options or delivered under other equity-based awards or other convertible securities or
warrants which were issued and outstanding on the Capitalization Date and disclosed on Schedule A
and (ii) shares disclosed on Schedule A.

     Section 3.2 Authorization and Enforceability.

     (a) Each of the Company and the Subsidiary has the corporate power and authority to execute
and deliver this Agreement and to carry out its obligations hereunder.

     (b) The execution, delivery and performance by the Company and the Subsidiary of this
Agreement and the Transaction Documents and the consummation of the transactions contemplated hereby and
thereby, have been duly authorized by all necessary corporate action on the part of the Company and the
Subsidiary and, if any, its stockholders, and no further approval or authorization is required on the part of the Company
or the Subsidiary, subject to the necessity of obtaining stockholder approval if required by NASDAQ. This
Agreement and any related transaction documents to which the Company is a party are valid and binding obligations of the
Company and the Subsidiary, enforceable against the Company and the Subsidiary in accordance with its and
their terms, subject to the Bankruptcy Exceptions.

     Section 3.3 Valid Issuance of Common Shares.

     The Common Shares have been duly and validly authorized and when issued and delivered
pursuant to this Agreement, such Common Shares will be duly and validly issued and fully paid and
non-assessable and will not be issued in violation of any pre-emptive rights, resale rights,
rights of first refusal or similar rights.

     Section 3.4 Non-Contravention.

     (a) The execution, delivery and performance by the Company of this Agreement,
and the consummation of the transactions contemplated hereby, and compliance by the Company with the
provisions hereof and thereof, will not (i) violate, conflict with, or result in a breach of any provision of,
or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or
result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration
of, or result in the creation of, any lien, security interest, charge or encumbrance upon any of the properties or assets of
the Company or any Company subsidiary under any of the terms, conditions or provisions of (A) its organizational
documents or (B) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument
or obligation to which the Company or any Company subsidiary is a party or by which it or any Company subsidiary may
be bound, or to which the Company or any Company subsidiary or any of the properties or assets of the Company
or any Company subsidiary may be subject, or (ii) subject to compliance with the statutes and regulations
referred to in the next paragraph, violate any statute, rule or regulation or any judgment, ruling, order, writ,
injunction or decree applicable to the Company or any Company subsidiary or any of their respective properties or assets
except, in the case of clauses (i)(B), for those occurrences that, individually or in the aggregate, have not had and
would not reasonably be expected to have a Company Material Adverse Effect.

     (b) Other than the filing of any current report on Form 8-K required to be filed with the SEC,
such filings and approvals as are required to be made or obtained under any state “blue sky” laws
and such consents and approvals that have been made or obtained, no notice to, filing with, exemption or review by,
or authorization, consent or approval of, any Governmental Entity is required to be made or obtained by the
Company in connection with the consummation by the Company of the Exchange except for any such notices, filings,
exemptions, reviews, authorizations, consents and approvals the failure of which to make or obtain would not,
individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.

6

 

     Section 3.5 No Company Material Adverse Effect.

     Since September 30, 2009, no fact, circumstance, event, change, occurrence, condition or
development has occurred that, individually or in the aggregate, has had or would reasonably be
likely to have a Company Material Adverse Effect, except as disclosed on Schedule B.

     Section 3.6 Offering of Securities.

     Neither the Company nor any person acting on its behalf has taken any action (including any
offering of any securities of the Company under circumstances which would require the integration
of such offering with the offering of the Common Shares under the Securities Act and the rules and
regulations of the SEC promulgated thereunder), which might subject the offering, issuance or sale
of the Common Shares to the Investor pursuant to this Agreement to the registration requirements of
the Securities Act.

     Section 3.7 Brokers and Finders.

     No broker, finder or investment banker is entitled to any financial advisory, brokerage,
finder’s or other fee or commission in connection with this Agreement or the transactions
contemplated hereby based upon arrangements made by or on behalf of the Company or any Company
Subsidiary for which the Investor could have any liability.

     Section 3.8 Company Financial Statements.

     (a) The consolidated financial statements of the Company and its consolidated subsidiaries
included
or incorporated by reference in the Company’s annual report on Form 10-K for the fiscal year
ended December 31,
2008 (the “Company 10-K”), present fairly in all material respects the consolidated
financial position of the
Company and its consolidated subsidiaries as of the dates indicated therein and the
consolidated results of their
operations for the periods specified therein; and except as stated therein, such financial
statements were prepared in
conformity with GAAP applied on a consistent basis.

     (b) The Company and its subsidiaries do not have any liabilities or obligations (accrued,
absolute,
contingent or otherwise) of a nature that would be required to be accrued or reflected in a
consolidated balance sheet
prepared in accordance with GAAP, other than liabilities or obligations (i) reflected on,
reserved against, or
disclosed in the notes to, the Company’s consolidated balance sheet included in the Company
10-K, (ii) that are
reflected or disclosed in any Current Reports on Form 8-K or Quarterly Reports on Form 10-Q or
(iii) that
otherwise, individually or in the aggregate, would not be reasonably likely to have a Company
Material Adverse
Effect.

     Section 3.9 Proceedings.

     (a) As of the date of this Agreement, there is no litigation or similar proceeding pending or,
to the
Company’s knowledge, threatened to which the Company or any of its subsidiaries is a party or
of which any
property of the Company or any of its subsidiaries is the subject which the Company’s
management believes,
individually or in the aggregate, has had or would be reasonably likely to have a Company
Material Adverse Effect.

     (b) Neither the Company nor any of its Significant Subsidiaries is a party to any written
agreement or
memorandum of understanding with, or a party to any commitment letter or similar undertaking
to, or is subject to
any order or directive by or is a recipient of any supervisory letter from, or has adopted any
board resolutions at the
request of, any bank regulatory authority that, in any such case, is currently in effect and
has had or would be
reasonably expected to have a Company Material Adverse Effect.

     Section 3.10
Compliance with Laws; Permits.

     (a) The Company is a registered thrift holding company; the Company and each of its
subsidiaries have conducted their businesses in compliance with all applicable federal, state and
foreign laws, regulations and applicable stock exchange requirements, including all laws and
regulations restricting activities of thrift holding

7

 

companies and thrift organizations, except for any noncompliance that, individually or in the
aggregate, has not had and would not be reasonably likely to have a Company Material Adverse
Effect.

     (b) The Company and each subsidiary have all permits, licenses, authorizations, orders and
approvals of, and have made all filings, applications and registrations with, any Governmental
Entities that are required in order to carry on their business as presently conducted, except
where the failure to have such permits, licenses, authorizations, orders and approvals or the
failure to make such filings, applications and registrations, individually or in the aggregate,
have not had and would not be reasonably likely to have a Company Material Adverse Effect; and all
such permits, licenses, certificates of authority, orders and approvals are in full force and
effect and, to the knowledge of the Company, no suspension or cancellation of any of them is
threatened, and all such filings, applications and registrations are current, except where such
absence, suspension or cancellation, individually or in the aggregate, have not had and would not
be reasonably likely to have a Company Material Adverse Effect.

     Section 3.11 Reports.

     (a) Since December 31, 2006, the Company has complied in all material respects with the filing
requirements of Sections 13(a), 14(a) and 15(d) of the Exchange Act.

     (b) The Company’s 10-K and any reports or forms (after amendment where applicable) filed with
the
SEC pursuant to the requirements of the Securities Act or the Exchange Act on or after January
1, 2009, when they
were filed or became effective (taking into account, amendments where applicable) with the
SEC, as the case may
be, conformed in all material respects to the requirements of the Securities Act or the
Exchange Act, as applicable,
and the rules and regulations of the SEC thereunder, and did not when filed (taking into
account, amendments where
applicable) with the SEC, contain an untrue statement of a material fact or omit to state a
material fact required to be
stated therein or necessary to make the statements therein, in the light of the circumstances
in which they were
made, not misleading.

     (c) Since December 31, 2006, the Company and each subsidiary have filed all material reports,
registrations and statements, together with any required amendments thereto, that it was
required to file with the
Office of Thrift Supervision (the “OTS”), the FDIC and any other applicable federal or
state securities or banking
authorities, except where the failure to file any such report, registration or statement,
individually or in the
aggregate, has not had and would not be reasonably likely to have a Company Material Adverse
Effect. As of their
respective dates, each of the foregoing reports complied with all applicable rules and
regulations promulgated by the
OTS, the FDIC and any other applicable foreign, federal or state securities or banking
authorities, as the case may
be, except for any failure that, individually or in the aggregate, have not had and would not
be reasonably likely to
have a Company Material Adverse Effect.

     (d) The records, systems, controls, data and information of the Company and the subsidiaries
are
recorded, stored, maintained and operated under means (including any electronic, mechanical or
photographic
process, whether computerized or not) that are under the exclusive ownership and direct
control of the Company or
the subsidiaries or their accountants (including all means of access thereto and therefrom).
The Company (1) has
implemented and maintains disclosure controls and procedures (as defined in Rule 13a-15(e)
under the Exchange
Act) to ensure that material information relating to the Company and its subsidiaries is made
known to the chief
executive officer and the chief financial officer of the Company by others within those
entities, and (ii) has
disclosed, based on its most recent evaluation prior to the date hereof, to the Company’s
outside auditors and the
audit committee of the Company’s board of directors (A) any significant deficiencies and
material weaknesses in the
design or operation of internal controls over financial reporting (as defined in Rule
13a-15(f) under the Exchange
Act) that are reasonably likely to adversely affect the Company’s ability to record, process,
summarize and report
financial information and (B) any fraud, whether or not material, that involves management or
other employees who
have a significant role in the Company’s internal controls over financial reporting. To the
knowledge of the
Company, there is no reason that its outside auditors and its chief executive officer and
chief financial officer will
not be able to give the certifications and attestations required pursuant to the rules and
regulations adopted pursuant
to Section 404 of the Sarbanes-Oxley Act of 2002, without qualification, when next due.

8

 

ARTICLE IV

COVENANTS

     Section 4.1 Commercially Reasonable
Efforts.

     Subject to the terms and conditions of this Agreement, each of the parties will use its
commercially reasonable efforts in good faith to take, or cause to be taken, all actions, and to
do, or cause to be done, all things necessary, proper or desirable, or advisable under applicable
laws, so as to permit consummation of the Exchange as promptly as practicable and otherwise to
enable consummation of the transactions contemplated hereby and shall use commercially reasonable
efforts to cooperate with the other party to that end.

     Section 4.2 Expenses.

     Unless otherwise provided in this Agreement, each of the parties hereto will bear and pay all
costs and expenses incurred by it in connection with the transactions contemplated under this
Agreement.

     Section 4.3 Exchange Listing.

     If requested by the Investor, the Company shall, at the Company’s expense, cause subject to
applicable listing rules the Common Shares, to be listed on the NASDAQ Global Market, subject to
official notice of issuance, and shall maintain such listing for so long as any Common Stock is
listed on such exchange.

     Section 4.4 Certain Notifications Until Closing.

     From the date hereof until the Closing, the Company shall promptly notify the Investor of (a)
any fact, event or circumstance of which it is aware and which would reasonably be likely to cause
any representation or warranty of the Company contained in this Agreement to be untrue or
inaccurate in any material respect or to cause any covenant or agreement of the Company contained
in this Agreement not to be complied with or satisfied in any material respect and (b) except as
Previously Disclosed, any fact, circumstance, event, change, occurrence, condition or development
of which the Company is aware and which, individually or in the aggregate, has had or would
reasonably be likely to have a Company Material Adverse Effect; provided, however, that delivery of
any notice pursuant to this Section 4.4 shall not limit or affect any rights of or remedies
available to the Investor; provided, further, that a failure to comply with this Section 4.4 shall
not constitute a breach of this Agreement or the failure of any condition set forth in Section 1.2
to be satisfied unless the underlying Company Material Adverse Effect or material breach would
independently result in the failure of a condition set forth in Section 1.2 to be satisfied.

     Section 4.5 Stockholder’s Meeting.

     (a) It is currently contemplated by the Company that it may issue a significant number of
shares of its Common Stock in other transactions or offerings between the date of this agreement
and March 31, 2010. The number of shares of Common Stock issued in such transactions or offerings
may be sufficiently great to abrogate any requirement under NASDAQ rules for stockholder approval
of the Exchange. If by March 31, 2010, stockholder approval of the Exchange would still be
required by applicable NASDAQ rules, the Company shall hold a meeting of its stockholders (which
may be its annual meeting or a special meeting) as promptly as practicable to seek approval of the
Exchange and the issuance of the Common Shares pursuant to this Agreement (the “Proposals”). The
Board of Directors shall recommend to the Company’s stockholders that such stockholders vote in
favor of the Proposals. In connection with such meeting, the Company shall prepare (and the
Investor will provide information reasonably required by the Company to be included therein) and
file with the Securities and Exchange Commission (the “SEC”) as promptly as practicable a
preliminary proxy statement. The Company shall use its reasonable best efforts to respond to any
comments of the SEC or its staff thereon and to cause a definitive proxy statement related to such
stockholders’ meeting or consent to be mailed to the Company’s stockholders, and the Company shall
use its reasonable best efforts to solicit proxies for such stockholder approval of the Proposals.
Each of the Investor and the Company agrees promptly to correct any information provided by it or
on its behalf for use in the proxy statement if and to the extent that such information shall have
become false or misleading in any material respect.

9

 

     (b) None of the information supplied by the Company for inclusion in any proxy statement in
connection with any such stockholders meeting of the Company or consent will, at the date it is
filed with the SEC, when first mailed to the Company’s stockholders and at the time of any
stockholders meeting, and at the time of any amendment or supplement thereof, contain any untrue
statement of a material fact or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they are made, not misleading.

     Section 4.6 Publicity. No public release or announcement concerning the transactions
contemplated
hereby shall be issued by either party without the prior consent of the other party (which consent
shall not be unreasonably withheld or delayed), except as such release or announcement may be
required by law or the rules or regulations of any United States or foreign securities exchange,
in which case the party required to make the release or announcement shall, to the extent
reasonably practicable, allow the other party reasonable time to comment on such release or
announcement in advance of such issuance. The provisions of this Section 4.6 shall not restrict
the ability of a party hereto to summarize or describe the transactions contemplated by this
Agreement in any prospectus or similar offering document or other report required by law,
regulation stock exchange or rule so long as the other party is provided a reasonable opportunity
to comment on such disclosure in advance.

     Section 4.7 Withholding of Tax. All payments with respect to the Common Stock
issued in
exchange for, or pursuant to the terms of, any of the foregoing instruments (the “Covered
Securities”) shall be subject to withholding and backup withholding to the extent required by law.
If, prior to making any payment with respect to Covered Securities held by the Investor, the
Company receives from the Investor a duly executed, valid, accurate and properly completed IRS
Form W-9 evidencing the entitlement of such entity to an exemption from backup withholding with
respect to such payment, and the Company does not know, or have reason to know that such exemption
is not available, the Company shall, and shall cause its paying agent to, make such payment with
respect to such Covered Securities (including the transfers by the Company pursuant to the
Exchange), free and clear of backup withholding of United States federal income tax, as supported
by such form.

ARTICLE V

SECURITIES LAW CONSIDERATIONS

     The issuance of the Common Shares upon exchange of the Trust Shares is intended to be exempt
from registration pursuant to Section

3(a)(9) of the Securities Act. Section 3(a)(9) provides an
exemption from registration for any security exchanged by an issuer with its existing security
holders exclusively where no commission or other remuneration is paid or given directly or
indirectly for soliciting such exchange. When securities are exchanged for other securities of an
issuer under Section 3(a)(9), the securities received, in essence, assume the character of the
exchanged securities for purposes of the Securities Act. Since it is the Company’s understanding
that the Investor has held the Trust Securities for a sufficient period of time under Rule 144
promulgated pursuant to the Exchange Act such that the Trust Securities would be freely tradable by
the Investor, we expect that all the Common Shares issued to the Investor pursuant to this
Agreement will be freely tradable under U.S. securities laws by such non-affiliates. The Company
will execute such documents as are necessary to remove any restrictive legends on the Common Shares
in connection with any sale or other transfer of such shares by KBW, subject to the completion by
KBW of customary brokerage forms in connection with any such sale or transfer.

ARTICLE VI

MISCELLANEOUS

     Section 6.1 Termination.

     This Agreement may be terminated at any time prior to the Closing:

10

 

     (a) by either the Investor or the Company if the Closing shall not have occurred by June 30,
2010;
provided, however, that the right to terminate this Agreement under this Section 6.1(a) shall
not be available to any
party whose breach of any representation or warranty or failure to perform any obligation
under this Agreement
shall have caused or resulted in the failure of the Closing to occur on or prior to such date;

     (b) by either the Investor or the Company in the event that any Governmental Entity shall have
issued
an order, decree or ruling or taken any other action restraining, enjoining or otherwise
prohibiting the transactions
contemplated by this Agreement and such order, decree, ruling or other action shall have
become final and
nonappealable; or

     (c) by the mutual written consent of the Investor and the Company.

     In the event of termination of this Agreement as provided in this Section 6.1, this Agreement
shall forthwith become void and there shall be no liability on the part of either party hereto
except that nothing herein shall relieve either party from liability for any breach of this
Agreement.

     Section 6.2 Survival of Representations and Warranties.

     The representations and warranties of the Company made herein or in any certificates
delivered in connection with the Closing shall survive the Closing for a period of one year after
Closing; provided that the representations and warranties made in Sections 3.1, 3.2, or 3.3 shall
survive Closing under the expiration of the applicable statute of limitations. The representations
of the Investor made herein or in any certificates delivered in connection with the Closing shall
survive the Closing for a period of one year after Closing; provided that the representations and
warranties made in Section 2.1, 2.2, 2.3 or 2.5 shall survive Closing until the expiration of the
applicable statute of limitations.

     Section 6.3 Amendment.

     No amendment of any provision of this Agreement will be effective unless made in writing and
signed by an officer or a duly authorized representative of each of the Company, the Subsidiary and
the Investor; provided that the Investor may unilaterally amend any provision of this Agreement to
the extent required to comply with any changes after the date hereof in applicable federal
statutes. No failure or delay by any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative of any rights or remedies provided by law.

     Section 6.4 Waiver of Conditions.

     The conditions to each party’s obligation to consummate the Exchange are for the sole benefit
of such party and may be waived by such party in whole or in part to the extent permitted by
applicable law. No waiver will be effective unless it is in a writing signed by a duly authorized
officer of the waiving party that makes express reference to the provision or provisions subject
to such waiver.

     Section 6.5
Governing Law; Submission to Jurisdiction, Etc.

     This Agreement will be governed by and construed in accordance with the federal law of the
United States if and to the extent such law is applicable, and otherwise in accordance with the
laws of the State of Delaware applicable to contracts made and to be performed entirely within
such State. Each of the parties hereto agrees (a) to submit to the exclusive jurisdiction and
venue of the United States District Court for the Northern District of Alabama for any and all
civil actions, suits or proceedings arising out of or relating to this Agreement or the Exchange
contemplated hereby and (b) that, to the fullest extent permitted by law, notice may be served
upon (i) the Company at the address and in the manner set forth for notices to the Company in
Section 6.6 and (ii) the Investor in accordance with applicable law. To the extent permitted by
applicable law, each of the parties hereto hereby unconditionally waives trial by jury in any
civil legal action or proceeding relating to this Agreement or the Exchange contemplated hereby.

11

 

     Section 6.6 Notices.

     Any notice, request, instruction or other document to be given hereunder by any party to the
other will be in writing and will be deemed to have been duly given (a) on the date of delivery if
delivered personally, or by facsimile, upon confirmation of receipt, or (b) on the second business
day following the date of dispatch if delivered by a recognized next day courier service. All
notices hereunder shall be delivered as set forth below or pursuant to such other instructions as
may be designated in writing by the party to receive such notice.

If to the Company or the Subsidiary:

Superior Bancorp

17 North Twentieth Street

Birmingham, Alabama 35203

Attention: James A. White

Facsimile: 205-488-3335

email: jim.white@superiorbank.com

Telephone: (205) 327-3656

Attention: William H. Caughran

Facsimile: 205-488-3335

email: bill.caughran@superiorbank.com

Telephone: (205) 327-3615

With a copy to:

Haskell Slaughter Young & Rediker, LLC

1400 Park Place Tower

2001 Park Place North

Birmingham, Alabama 35203

Attention: Robert E. Lee Garner

Facsimile: (205) 324-1133

email: relg@hsy.com

Telephone: (205) 254-1417

Attention: Kimberly L. Hager

Facsimile: (205) 324-1133

email: klh@hsy.com

Telephone: (205) 254-1473

If to the Investor:

KBW, Inc.

787 Seventh Avenue

11th Floor

New York, NY 10019

Attention: Robert Giambrone

Facsimile: 212-541-6668

email: bgiamberone@kbw.com

Telephone: 212-887-6776

     Section 6.7 Definitions.

     (a) When a reference is made in this Agreement to a subsidiary of a person, the term
“subsidiary” means any corporation, partnership, joint venture, limited liability company or other
entity (i) of which such person or a subsidiary of such person is a general partner or (ii) of
which a majority of the voting securities or other voting interests, or a majority of the
securities or other interests of which having by their terms ordinary voting power to elect a
majority of the board of directors or persons performing similar functions with respect to such
entity, is directly or indirectly owned by such person and/or one or more subsidiaries thereof.

12

 

     (b) The term “Affiliate” means, with respect to any person, any person directly or
indirectly
controlling, controlled by or under common control with, such other person. For purposes of
this definition,
“control” (including, with correlative meanings, the terms “controlled by” and “under common
control with”) when
used with respect to any person, means the possession, directly or indirectly, of the power to
cause the direction of
management and/or policies of such person, whether through the ownership of voting securities
by contract or
otherwise.

     (c) The term “Bankruptcy Exceptions” means as may be limited by applicable
bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’
rights generally and
general equitable principles, regardless of whether such enforceability is considered in a
proceeding at law or in
equity.

     (d) The term “Company Material Adverse Effect” means a material adverse effect on (i)
the business,
results of operation or financial condition of the Company and its consolidated subsidiaries
taken as a whole;
provided, however, that Company Material Adverse Effect shall not be deemed to include the
effects of (A) changes
after the date hereof in general business, economic or market conditions (including changes
generally in prevailing
interest rates, credit availability and liquidity, currency exchange rates and price levels or
trading volumes in the
United States or foreign securities or credit markets), or any outbreak or escalation of
hostilities, declared or
undeclared acts of war or terrorism, in each case generally affecting the industries in which
the Company and its
subsidiaries operate, (B) changes or proposed changes after the date hereof in GAAP or
regulatory accounting
requirements, or authoritative interpretations thereof, (C) changes or proposed changes after
date hereof in
securities, banking and other laws of general applicability or related policies or
interpretations of Governmental
Entities (in the case of each of these clauses (A), (B) and (C), other than changes or
occurrences to the extent that
such changes or occurrences have or would reasonably be expected to have a materially
disproportionate adverse
effect on the Company and its consolidated subsidiaries taken as a whole relative to
comparable U.S. banking or
financial services organizations), or (D) changes in the market price or trading volume of the
Common Stock or any
other equity, equity-related or debt securities of the Company or its consolidated
subsidiaries (it being understood
and agreed that the exception set forth in this clause (D) does not apply to the underlying
reason giving rise to or
contributing to any such change); or (ii) the ability of the Company to consummate the
Exchange and the other
transactions contemplated by this Agreement and perform its obligations hereunder on a timely
basis.

     (e) The term “Previously Disclosed” means information set forth or incorporated in the
Company’s
Annual Report on Form 10-K for the most recently completed fiscal year of the Company filed
with SEC prior to
the date hereof or in its other reports and forms filed with or furnished to the SEC under
Sections 13(a), 14(a) or
15(d) of the Exchange Act on or after the last day of the most recently completed fiscal year
of the Company and
prior to the date hereof.

     (f) The term “Securities Act” means the Securities Act of 1933 as amended.

     (g) The term “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     (h) To the extent any securities issued pursuant to this Agreement or the transactions
contemplated hereby are registered in the name of a designee of the Investor pursuant to Section
6.8(c) or transferred to an Affiliate of the Investor, all references herein to the Investor
holding or owning any debt or equity securities of the Company, Common Shares or Registrable
Securities (and any like variations thereof) shall be deemed to refer to the Investor, together
with such designees and/or Affiliates, holding or owning any debt or equity securities, Common
Shares or Registrable Securities (and any like variations thereof), as applicable.

     Section 6.8 Assignment.

     Neither this Agreement nor any right, remedy, obligation nor liability arising hereunder or by
reason hereof shall, to the fullest extent permitted by law, be assignable by any party hereto
without the prior written consent of each other party, and any attempt to assign any right, remedy,
obligation or liability hereunder without such consent shall be void, except (a) an assignment, in
the case of a Business Combination where such party is not the surviving entity, or a sale of
substantially all of its assets, to the entity which is the survivor of such Business Combination
or

13

 

the purchaser in such sale, and (c) an assignment by the Investor of this Agreement to an
Affiliate of the Investor; provided that if the Investor assigns this Agreement to an Affiliate,
the Investor shall be relieved of its obligations under this Agreement and all rights and
obligations of the Investor hereunder shall be exercised by, and shall be the responsibility of,
such Affiliate. “Business Combination” means a merger, consolidation, statutory share exchange or
similar transaction that requires the approval of the Company’s stockholders.

     Section 6.9 Severability.

     If any provision of this Agreement, or the application thereof to any person or circumstance,
is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions hereof, or the application of such provision to persons or circumstances
other than those as to which it has been held invalid or unenforceable, will remain in full force
and effect and shall in no way be affected, impaired or invalidated thereby, so long as the
economic or legal substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination, the parties shall negotiate in good
faith in an effort to agree upon a suitable and equitable substitute provision to effect the
original intent of the parties.

     Section 6.10 No Third-Party Beneficiaries.

     Nothing contained in this Agreement, expressed or implied, is intended to confer upon any
person or entity other than the Company, the Trust and the Investor any benefit, right or remedies,
except that the provisions of Sections 4.4 and 5.4 shall inure to the benefit of the persons
holding Capital Shares during any tacked holding period, as contemplated by that Section.

     Section 6.11
Entire Agreement, Etc.

     This Agreement (including the Annexes and Schedules hereto) constitute the entire agreement,
and supersede all other prior agreements, understandings, representations and warranties, both
written and oral, between the parties, with respect to the subject matter hereof.

     Section 6.12 Counterparts and Facsimile.

     For the convenience of the parties hereto, this Agreement may be executed in any number of
separate counterparts, each such counterpart being deemed to be an original instrument, and all
such counterparts will together constitute the same agreement. Executed signature pages to this
Agreement may be delivered by facsimile and such facsimiles will be deemed as sufficient as if
actual signature pages had been delivered.

     Section 6.13 Federal Income Tax Treatment.

     The Company, the Subsidiary and the Investor intend the Exchange be treated as a
reorganization pursuant to Section 368(a)(1)(E) of the Code (i.e., a recapitalization of the
Company), each of the parties be a party to a reorganization, as that term is defined in Section
368(b) of the Code, and this Agreement constitute and reflect a “plan or reorganization”, as that
term is defined in Treasury Regulations § 1.368-2(g).

14

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed
by their respective authorized officers as of the day and year first above written.

	 	 	 	 	 	 
	 	 	SUPERIOR BANCORP	 
	 
	 	 	 	 	 
	 

	 	By:
	 	/s/ James A. White
	 
	 

	 	Name:
	 	James A. White	 
	 

	 	Title:
	 	Chief Financial Officer	 
	 
	 	 	 	 	 
	 	 	SUPERIOR HOLDINGS, LLC	 
	 
	 	 	 	 	 
	 

	 	By:
	 	Superior Bancorp	 
	 

	 	Its:
	 	Member	 
	 
	 	 	 	 	 
	 

	 	By:
	 	/s/ James A. White	 
	 

	 	Name:
	 	
James A. White	 
	 

	 	Title:
	 	Chief Financial Officer	 
	 
	 	 	 	 	 
	 	 	KBW, INC.	 
	 
	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert Giambrone	 
	 

	 	Name:
	 	
Robert Giambrone	 
	 

	 	Title:
	 	Executive Vice President and Chief Financial Officer	 

[Signature Page of Exchange Agreement]

15

 

SCHEDULE A

CAPITALIZATION

Common Stock

Par value: $0.001

Total Authorized: 200,000,000 Outstanding: 11,667,794

Subject to warrants, options, convertible securities, etc.: 3,849,439

Reserved for benefit plans and other issuances: 0

Remaining authorized but unissued: 184,482,767

Shares issued after Capitalization Date (other than pursuant to warrants, options, convertible
securities, etc. as set forth above): None.

Preferred Stock

Par value: None.

Total Authorized: 5,000,000

Outstanding (by series): None.

Reserved for issuance: None.

Remaining authorized but unissued: 4,931,000

 

 

SCHEDULE B

Response to Section 3.6: [to be completed if applicable]

 

 

ANNEX D

FORM OF OPINION

     (a) The Company is duly organized, validly existing and in good standing under the laws of the
State
of Delaware. The Subsidiary is organized and validly existing under the laws of the State of
Alabama.

     (b) Each of the Company and the Subsidiary has the corporate power and authority to execute
and
deliver the Exchange Agreement and to carry out its obligations thereunder.

     (c) The execution, delivery and performance by each of the Company and the Subsidiary of the
Exchange Agreement, and the consummation of the transactions contemplated thereby, have been
duly authorized
by all necessary corporate action on the part of the Company and the Subsidiary, and no
further approval or
authorization is required on the part of the Company and the Subsidiary.

     (d) The Exchange Agreement has been duly executed and delivered by the Company and the
Subsidiary and, assuming the due execution and delivery by the other parties thereto, is a
valid and binding
obligation of each of the Company and the Subsidiary, enforceable against the Company and the
Subsidiary in
accordance with its terms. The foregoing opinion as to the enforceability of the Exchange
Agreement against the
Company and the Subsidiary is subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium
and similar laws of general applicability relating to or affecting creditors’ rights and to
general equity principles,
regardless of whether such enforceability is considered in a proceeding at law or in equity.

     (e) The Company is not or, after giving effect to the issuance of the Common Shares pursuant
to the
Exchange Agreement, would be on the date hereof an “investment company” or an entity
“controlled” by an
“investment company,” as such terms are defined in the Investment Company Act of 1940, as
amended.

     (f) The Common Shares to be issued pursuant to the Agreement have been validly authorized and,
upon issuance and delivery against consideration therefor as contemplated by the Agreement,
will be validly issued,
fully paid and non-assessable.Exhibit 10.42

EXHIBIT 10.42

CONFIDENTIAL

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THE REDACTED PORTIONS OF THIS EXHIBIT, AND SUCH
CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

COLLABORATION AND LICENSE AGREEMENT

BETWEEN

ATHERSYS INC.,

ABT HOLDING COMPANY

AND

PFIZER INC.

DATED AS OF

December 18 2009

 

 

 

CONFIDENTIAL

Table of Contents

	 	 	 	 	 
	Section 1 DEFINITIONS
	 	 	2	 
	 
	 	 	 	 
	Section 2 RESEARCH PROGRAM
	 	 	12	 
	 
	 	 	 	 
	Section 3 CLINICAL DEVELOPMENT PROGRAM
	 	 	15	 
	 
	 	 	 	 
	Section 4 MANUFACTURING OF LICENSED PRODUCT
	 	 	18	 
	 
	 	 	 	 
	Section 5 JOINT STEERING COMMITTEE
	 	 	20	 
	 
	 	 	 	 
	Section 6 RIGHTS TO RESEARCH PROGRAM AND COMBINATION PRODUCT IPRs
	 	 	23	 
	 
	 	 	 	 
	Section 7 LICENSES
	 	 	23	 
	 
	 	 	 	 
	Section 8 RESEARCH FUNDING
	 	 	26	 
	 
	 	 	 	 
	Section 9 FEES AND ROYALTIES
	 	 	27	 
	 
	 	 	 	 
	Section 10 ACCOUNTING AND PROCEDURES FOR PAYMENT
	 	 	29	 
	 
	 	 	 	 
	Section 11 PATENTS AND INFRINGEMENT
	 	 	32	 
	 
	 	 	 	 
	Section 12 CONFIDENTIALITY; PUBLICATION
	 	 	35	 
	 
	 	 	 	 
	Section 13 REPRESENTATIONS AND WARRANTIES
	 	 	39	 
	 
	 	 	 	 
	Section 14 ADDITIONAL COVENANTS
	 	 	42	 
	 
	 	 	 	 
	Section 15 TERM
	 	 	44	 
	 
	 	 	 	 
	Section 16 TERMINATION
	 	 	44	 
	 
	 	 	 	 
	Section 17 INDEMNIFICATION
	 	 	47	 
	 
	 	 	 	 
	Section 18 GOVERNING LAW AND JURISDICTION
	 	 	50	 
	 
	 	 	 	 
	Section 19 MISCELLANEOUS
	 	 	51	 
	 
	 	 	 	 
	ATHERSYS PATENT RIGHTS FOR THE PURPOSES OF THE ROYALTY TERM
	 	 	64	 

 

 

 

CONFIDENTIAL

COLLABORATION AND LICENSE AGREEMENT

Collaboration and License Agreement (this “Agreement”) dated as of December 18, 2009
between ATHERSYS, INC., an Ohio corporation with offices located at 3201 Carnegie Avenue,
Cleveland, Ohio 44115 (“AI”), ABT HOLDING COMPANY, a Delaware corporation and having a
offices located at 3201 Carnegie Avenue, Cleveland, Ohio 44115 (“ABT”), together referred
to in this Agreement as (“ATHERSYS”) and PFIZER INC., a Delaware corporation with offices
located at 235 East 42nd Street, New York, New York, 10017, U.S.A. (“PFIZER”).

WHEREAS, ATHERSYS owns or otherwise controls certain patents, patent applications, technology,
know-how and scientific and technical information relating to MultiStem® stem cell technology;

WHEREAS, PFIZER has extensive experience and expertise in the development and
commercialization of therapeutic agents and biological products and documented success in
regulatory proceedings, and desires to collaborate with ATHERSYS in respect of the development of
MultiStem Products (as defined below) for the Field (as defined below) and to acquire a license in
the Territory (as defined below) to such patents, patent applications, technology, know-how and
scientific and technical information on the terms of this Agreement; and

WHEREAS, ATHERSYS is a biopharmaceutical group that specialises in the development of stem
cell technology for therapeutic products, including MultiStem® stem cell technology, to treat
diseases and disorders and desires to collaborate with PFIZER in relation to the development of
MultiStem Products and to grant licenses to PFIZER on the terms of this Agreement;

NOW, THEREFORE, in consideration of the mutual covenants and agreements provided herein,
ATHERSYS and PFIZER hereby agree as follows:

Section 1 DEFINITIONS

For purposes of this Agreement, the following definitions shall be applicable:

1.1 “Affiliate” means any entity directly or indirectly controlled by, controlling, or
under common control with, a party to this Agreement, but only for so long as such control shall
continue. For purposes of this definition, “control” (including, with correlative meanings,
“controlled by”, “controlling” and “under common control with”) means (a) possession, direct or
indirect, of the power to direct or cause direction of the management or policies of an entity
(whether through ownership of securities or other ownership interests, by contract or otherwise),
or (b) beneficial ownership of at least 50% of the voting securities or other ownership interest
(whether directly or pursuant to any option, warrant or other similar arrangement) or other
comparable equity interests of an entity.

1.2 “Athersys Combination Product” means a MultiStem Product containing or co-administered
(where the individual products/forms are intended for simultaneous or sequential administration)
with an Athersys Compound(s).

 

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1.3 “Athersys Combination Product IPRs” means rights in (i) issued patents and pending
provisional and non-provisional applications for patents, including, without limitation, any
continuations, continuations-in-part or divisions directed to inventions disclosed therein; (ii)
any re-examinations, reissues, renewals, substitutions or extensions of any patents; (iii) foreign
counterparts or equivalents of any of the foregoing rights, (iv) inventions, discoveries, data,
information, trade secrets, processes, methods, techniques, materials, technology, results or other
know-how, whether or not patentable, (v) methods, devices or improvements for delivery or
maintenance of a cell-based product and (vi) copyrights, software, source code and copyrightable
works, in each case (i) through (vi) that are created, devised or arise out of the parties (or
their Affiliates) undertaking and performing activities under the Research Program and where such
rights are directed to an Athersys Combination Product.

1.4 “Athersys Compound” means small molecules, biological molecules and drug candidates
and/or other pharmaceutical agent in respect of which ATHERSYS has exclusive rights (e.g. by
ownership or license from a Third Party ) under relevant patents or patent applications at the time
such Athersys Compound is introduced into the Research Program.

1.5 “Athersys Confidential Information” means all information about any element of Athersys
Technology, Athersys Compounds or Athersys Combination Products, as well as any other information
regarding the business and operations of ATHERSYS or any of its Affiliates, that is or has been
disclosed (whether orally or in writing) by ATHERSYS to PFIZER or its Affiliates to the extent that
such information is not (i) as of the date of disclosure to PFIZER, known to PFIZER or its
Affiliates; or (ii) disclosed in published literature, or otherwise generally known to the public
through no breach by PFIZER of this Agreement; or (iii) obtained by Pfizer or its Affiliates from a
Third Party free from any obligation of confidentiality to ATHERSYS; or (iv) independently
developed by PFIZER or its Affiliates without use of the Athersys Confidential Information.

1.6 “Athersys Device” means a device intended to assist the delivery, administration or
release of a bio-pharmaceutical product in respect of which ATHERSYS has exclusive rights (e.g. by
ownership or license from a Third Party ) under relevant patents or patent applications at the time
such Athersys Device is introduced into the Research Program.

1.7 “Athersys Exclusive Patent Rights” shall have the meaning assigned to it in Section
11.1.

1.8 “Athersys Patent Rights” means all patents and patent applications, whether domestic or
foreign, including all continuations, continuations-in-part, divisions, provisionals and renewals,
and letters of patent granted with respect to any of the foregoing, patents of addition,
supplementary protection certificates, registration or confirmation patents and all reissues,
re-examination and extensions thereof, that are owned, co-owned by or licensed- to ATHERSYS or its
Affiliates, with the right to licence or sub-licence, as of the Effective Date or at any time
during the Term and that relate to MultiStem Products, including the Athersys Patent Rights listed
in Schedule 1.8, and any patents that may issue from, or claim priority to or through, the
applications listed in Schedule 1.8.

1.9 “Athersys Technology” means all materials, technology, data, technical and scientific
information, standard operating procedures, specifications, know-how (including all know-how
related to manufacturing of MultiStem Products), expertise and trade secrets that relate to or are
used in connection with any MultiStem Products, Athersys Combination Products ,
including any intellectual property rights embodying any of the foregoing (other than Athersys
Combination Product IPR) which are owned, co-owned by or licensed to ATHERSYS or its Affiliates,
with the right to licence or sub-licence, as of the Effective Date or at any time during the Term,
but excluding Athersys Patent Rights.

 

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1.10 “BLA” means Biologics License Application filed with the FDA in accordance with the
FDCA with respect to a bio-pharmaceutical product or an analogous application or filing with any
Regulatory Authority outside of the United States (including any supra-national agency such as the
European Union) for the purpose of obtaining approval to market and sell a bio-pharmaceutical
product in such jurisdiction.

1.11 “Business Day” means a day other than a Saturday, Sunday, or bank or other public
holiday in New York, New York.

1.12 “Change of Control” means that any of the following occurs in respect of AI or ABT:
(i) any entity becoming the beneficial owner, directly or indirectly, of more than fifty percent
(50%) of the voting securities of AI or ABT; (ii) the sale or other disposition of all or
substantially all of the assets of AI or ABT; or (iii) a consolidation or merger of AI or ABT with
any entity, other than a merger or consolidation which would result in the voting securities of AI
or ABT outstanding immediately prior thereto continuing to represent at least fifty percent (50%)
of the total voting power represented by the voting securities of AI or ABT outstanding immediately
after such merger or consolidation.

1.13 “Clinical Development Candidate” means (a) a MultiStem Product or Combination Product
that meets the criteria and has the characteristics that are necessary and desirable for the
submission of an IND for use of such MultiStem Product(s) or Combination Product(s) for treatment,
prevention or control of a Pilot or Major Indication, as advanced and recommended by the JSC or the
Development & Regulatory Committee; or (b) a MultiStem Product or Combination Product that is or
has been the subject of an IND for use of such MultiStem Product or Combination Product(s) in the
treatment, prevention or control of a Pilot or Major Indication.

1.14 “Clinical Development Plan” means, for each Clinical Development Candidate, a detailed
plan that sets forth the responsibilities of, and the activities to be conducted by, each of the
parties in advancing each such Clinical Development Candidate to Regulatory Approval for a Pilot or
Major Indication (including a detailed budget corresponding to each such plan). Each Clinical
Development Plan shall be approved by the parties and upon such approval shall be subject to this
Agreement.

1.15 “Clinical Development Program” means the clinical development activities conducted by
(or to be conducted by) each party pursuant to a Clinical Development Plan.

1.16 “Combination Product” means a Pfizer Combination Product and/or an Athersys
Combination Product.

1.17 “Commence” or “Commencement” when used with respect to a clinical study, means
the first dosing of the first patient for such study.

 

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1.18 “Commercially Reasonable Efforts” means those efforts and resources consistent with
the usual practice of PFIZER in pursuing the development or commercialization of its own
pharmaceutical products that are of similar market potential as the Licensed Products, taking into
account all relevant factors including product labelling or anticipated labelling, present and
future market potential, past performance of Licensed Products and PFIZER’s own pharmaceutical
products that are of similar market potential, financial return, medical and clinical
considerations, present and future regulatory environment and competitive market conditions, all as
measured by the facts and circumstances at the time such efforts are due. Without limitation to
the generality and principles stated above, the following shall be treated as evidence that PFIZER
has satisfied its obligations to use Commercially Reasonable Efforts: (i) receipt by ATHERSYS of
applicable Event Milestone Payments, (ii) progressing development and commercialisation of Licensed
Products in accordance with Research Plans, Clinical Development Plans (including regulatory plans)
and plans for Launch; (iii) cooperation in relation to, funding or maintenance of Athersys Patent
Rights pursuant to Section 11, and (iv) maintaining meaningful dialogue with Regulatory
Authorities to progress any clinical or regulatory issues which have delayed or may delay Clinical
Development Plans and/or Launch.

1.19 “Committee” means each of the JSC, Research Committee, Development & Regulatory
Committee and/or Manufacturing Committee.

1.20 “Compound” means a Pfizer Compound and/or an Athersys Compound.

1.21 “Development & Regulatory Committee” shall have the meaning assigned to it in
Section 5.2(b).

1.22 “Device” means an Athersys Device and/or a Pfizer Device.

1.23 “Effective Date” means December 18, 2009.

1.24 “Event Milestone Payments” means the amounts set forth in Section 9.1(a)
opposite the respective Event Milestones.

1.25 “Extension” shall have the meaning assigned to it in Section 2.2.

1.26 “FDA” means the United States Food and Drug Administration or any successor agency
thereto.

1.27 “FDCA” means the U.S. Federal Food, Drug and Cosmetic Act, as amended, and the
regulations promulgated thereunder.

1.28 “Field” means the Pilot Indication and the Major Indication.

1.29 “FTE Rate” means the amount per annum set out in Section 8.1 (or such other
amount agreed by the parties), for the time of an employee to whom all required facilities,
materials and equipment have been made available for performance of specific, technical or
managerial work being a full time equivalent person (consisting of a total of not less than
[*] per annum of work supporting the collaborative efforts and goals of the Research
Plan); to be prorated on a daily basis if necessary (such per annum amount to be divided by [*] to
produce the rate per whole day consisting of [*]).

 

	 	 	 
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CONFIDENTIAL

1.30 “Governmental Authority” means any court, agency, department, authority or other
instrumentality of any international, national, state, county, city or other political subdivision.

1.31 “IND” means an Investigational New Drug Application submitted under the FDCA; or an
analogous application or filing with any analogous agency or Regulatory Authority outside of the
United States under any analogous foreign Law for the purposes of obtaining permission to conduct
human clinical studies.

1.32 “Indemnified Party” shall have the meaning assigned to it in Section 17.3.

1.33 “Indemnifying Party” shall have the meaning assigned to it in Section 17.3.

1.34 “Initial Research Term” shall have the meaning assigned to in Section 2.2.

1.35 “JSC” shall mean Joint Steering Committee and shall have the meaning given to it in
Section 5.1.

1.36 “Key Role” shall mean each of the following roles in connection with the Research
Program: [*].

1.37 “Launch” means the first shipment of a Licensed Product in commercial quantities for
commercial sale by PFIZER, its Affiliates or its sublicensees to a Third Party in a country in the
Territory after receipt by PFIZER of the first Regulatory Approval (and, in any country in which
Price Approval is necessary or relevant for a majority of the population to obtain access to
pharmaceutical products, Price Approval) for such Licensed Product in such country.

1.38 “Laws” means all laws, statutes, rules, regulations, orders, judgments and/or
ordinances of any Governmental Authority.

1.39 “Licensed Product” means any bio-pharmaceutical product in all dosage forms and
formulations, for administration through any delivery platform or mechanism, in each case that
contains a MultiStem Product (including any Athersys Combination Product and any Pfizer Combination
Product), the manufacture, sale, offer for sale, importation, or use of which [*].

1.40 “Losses” shall have the meaning assigned to it in Section 17.2.

1.41 “Major EU Countries” means the United Kingdom, Spain, Italy, France and Germany.

1.42 “Major Indication” means inflammatory bowel disease in humans, [*].

1.43 “Manufacturing Committee” shall have the meaning assigned to it in Section
5.2(c).

 

	 	 	 
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1.44 “Manufacturing Costs” means with respect to each Licensed Product, (a) if the
Licensed Product is manufactured by a Third Party for ATHERSYS or PFIZER or their respective
Affiliates, then the actual amount paid by ATHERSYS or PFIZER or their Affiliates) to such Third
Party for the manufacture and supply of the Licensed Product and
(b) if the Licensed Product is manufactured by ATHERSYS or PFIZER or their respective Affiliates,
then all of the costs and expenses inclusive of any taxes (including applicable overhead costs and
expenses, but excluding any clinical development costs) incurred or paid by ATHERSYS and its
Affiliates (or PFIZER and its Affiliates if PFIZER has acquired manufacturing rights under this
Agreement) with respect to the manufacturing of Licensed Products including, without limitation,
the following costs to the extent such costs are actually incurred by the manufacturing party,
accounted for in accordance with U.S. GAAP as consistently applied by the manufacturing party and
attributable to the manufacture and supply of the Licensed Product : (i) all direct costs with
respect to manufacturing and supply the Licensed Product, including all direct costs of raw
materials, labor, license fees (if any), maintenance and repair of equipment used to manufacture
the Licensed Product, storage and packaging and shipping costs and (ii) a reasonable allocation of
indirect costs associated with such direct costs, not to exceed [*] percent ([*%])
thereof.

1.45 “Materials Transfer Agreement” means an agreement in the form set out in Schedule
1.45 pursuant to which the parties, or their Affiliates, shall or shall be deemed to have
transferred biological materials or compounds (including MultiStem cells or Compounds) to each
other pursuant to Section 2.9.

1.46 “MultiStem” means multipotent adult progenitor cells derived from bone marrow and
expanded more than twenty doublings, as covered by the Athersys Patent Rights.

1.47 “MultiStem Products” means the following cells identified, developed, and/or intended
for use in treatment of a disease or conditions in humans, however delivered: (a) MultiStem; (b)
progeny or components of MultiStem; (c) derivatives of any of the foregoing (a) or (b); and (d)
genetically-modified MultiStem; and including, without limitation, cells or tissues that are
derived from any of the foregoing, as any of the foregoing cells might be at the time of treatment
(i) in their native, undifferentiated state, (ii) in a partially or fully pre-differentiated state,
(iii) primed for differentiation or specific biological activity (for example, through the
introduction of a protein, peptide, gene, polynucleotide, small molecule or other active
pharmaceutical ingredient), or (iv) in a modified form.

1.48 “NDA” means a New Drug Application filed with the FDA in accordance with the FDCA with
respect to a pharmaceutical products or an analogous application or filing with any Regulatory
Authority outside of the United States (including any supra-national agency such as the European
Union) for the purpose of obtaining approval to market and sell a pharmaceutical product in such
jurisdiction.

1.49 “Net Sales” means (a) with respect to a Licensed Product in the Field that is not a
PFIZER Combination Product, the gross amount invoiced by PFIZER, its Affiliates and its
sublicensees of such Licensed Product to Third Parties, less (i) bad debts related to such Licensed
Product, (ii) sales returns and allowances actually paid, granted or accrued, including, trade,
quantity and cash discounts and any other adjustments, including, those granted on account of price
adjustments, billing errors, rejected goods, damaged or defective goods, recalls, returns, rebates,
chargeback rebates, reimbursements or similar payments granted or given to wholesalers or other
distributors, buying groups, health care insurance carriers or other institutions, adjustments
arising

 

	 	 	 
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omitted and filed separately with the Securities and Exchange Commission.

 

7

 

CONFIDENTIAL

from
consumer discount programs or other similar programs, (iii) customs or excise duties, sales tax, consumption tax, value added tax, and
other taxes (except income taxes) or duties relating to sales, any payment in respect of sales to
the United States government, any state government or any foreign government, or to any other
Governmental Authority, or with respect to any government-subsidized program or managed care
organization actually collected, and (iv) freight and insurance (to the extent that PFIZER or the
Affiliates bears the cost of freight and insurance for a Licensed Product); and (b) with respect to
a Combination Product, such percentage of the Net Sales of such Combination Product, as determined
in accordance with clause (a) hereof - as the parties agree in good faith taking into account the
relative value of any Pfizer Compound, Pfizer Device, Athersys Compound, and Athersys Device
included in the Combination Product. Net Sales shall be determined from books and records
maintained in accordance with generally acceptable accounting principles in the United States, as
consistently applied by PFIZER with respect to sales of all its pharmaceutical products.

1.50 “Pfizer Combination Product” means a MultiStem Product containing or co-administered
(where the individual products/forms are intended for simultaneous or sequential administration)
with a Pfizer Compound(s).

1.51 “Pfizer Combination Product IPRs” means rights in (i) issued patents and pending
provisional and non-provisional applications for patents, including, without limitation, any
continuations, continuations-in-part or divisions directed to inventions disclosed therein; (ii)
any re-examinations, reissues, renewals, substitutions or extensions of any patents; (iii) foreign
counterparts or equivalents of any of the foregoing rights, (iv) inventions, discoveries, data,
information, trade secrets, processes, methods, techniques, materials, technology, results or other
know-how, whether or not patentable, (v) methods, devices or improvements for delivery or
maintenance of a cell-based product, and (vi) copyrights, software, source code and copyrightable
works ; in each case of (i) through (vi) that are created, devised or arise out of the parties (or
their Affiliates) undertaking and performing activities under the Research Program and where such
rights are directed to a Pfizer Combination Product.

1.52 “Pfizer Compound” means a small molecule, biological molecule and/or drug candidate
and/or other pharmaceutical agent in respect of which PFIZER has exclusive rights (e.g. by
ownership or licence from a Third Party under relevant patents and patent applications at the time
such Pfizer Compound is introduced into the Research Program.

1.53 “Pfizer Confidential Information” means all information relating to Compounds or
Licensed Products (including Pfizer Combination Products), as well as any other information
regarding the business and operations of PFIZER, that is or has been disclosed (whether orally or
in writing) by PFIZER to ATHERSYS or its Affiliates to the extent that such information is not (i)
as of the date of disclosure known to ATHERSYS or its Affiliates; or (ii) disclosed in published
literature, or otherwise generally known to the public through no breach by or ATHERSYS; of this
Agreement or (iii) obtained by ATHERSYS or its Affiliates from a Third Party free from any
obligation of confidentiality to PFIZER; or (iv) independently developed by ATHERSYS or its
Affiliates without use of the Pfizer Confidential Information; or (v) in the reasonable opinion of
legal counsel, required to be disclosed under Law; provided that, in the case of (v), ATHERSYS
provides PFIZER prior notice (to the extent practicable) of such disclosure and agrees to
cooperate, at the request and sole expense of PFIZER, with PFIZER’s efforts to preserve the
confidentiality of such information.

 

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1.54 “Pfizer Device” means a device intended to assist the delivery, administration or
release of a bio-pharmaceutical product in respect of which PFIZER has exclusive rights (e.g. by
ownership or by licence from a Third Party with the right to sublicense) under relevant patents and
patent applications at the time such Pfizer Device is introduced into the Research Program.

1.55 “Pfizer Quarter” means each of the four (4) calendar quarters of any calendar year.

1.56 “Pfizer Technology” means all materials, technology, data, technical and scientific
information, know-how, expertise and trade secrets that relate to or are used in connection with
any MultiStem Products, Pfizer Combination Products, including any intellectual property rights
embodying any of the foregoing (other than Pfizer Combination Product IPRs) which are owned,
co-owned by or licensed to PFIZER or its Affiliates, with the right to licence or sub-license as of
the Effective Date or at any time during the Term.

1.57 “Pfizer Year” means the twelve (12) month period commencing on January 1 of any
calendar year.

1.58 “Phase I Clinical Study” means a clinical study that is the first introduction into
humans of a Licensed Product that is intended initially to evaluate the tolerance, safety and/or
pharmacological effects at a potentially therapeutic dose level of a Clinical Development Candidate
and advance the Clinical Development Candidate to Phase II or subsequent clinical study.

1.59 “Phase II Clinical Study” means a clinical study, other than a Phase III Clinical
Study, that is intended to test the effectiveness of a Clinical Development Candidate for a
specific indication in patients with the disease or condition under study.

1.60 “Phase II(b) Clinical Study” means a Phase II Clinical Study that is intended to
establish the dosing regimen for use in a Phase III Clinical Study of a Clinical Development
Candidate for a specific indication.

1.61 “Phase III Clinical Study” means a clinical study intended to meet the requirements
for approval of an NDA, BLA or equivalent, for a Licensed Product.

1.62 “Pilot Indication” means ulcerative colitis [*].

1.63 “Price Approval” means, in any country where a Governmental Authority authorizes
reimbursement for, or approves or determines pricing for, pharmaceutical products, receipt (or, if
required to make such authorization, approval or determination effective, publication) of such
reimbursement authorization or pricing approval or determination (as the case may be).

1.64 “Redacted Agreement” shall have the meaning assigned to it in Section 12.4.

1.65 “Regulatory Approval” means with respect to any jurisdiction, any and all approvals,
or authorizations (other than Price Approvals) (e.g. BLA, INDs, NDAs) that are necessary for
the commercial manufacture, distribution, use, marketing or sale of a bio-pharmaceutical product in
such jurisdiction.

 

	 	 	 
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1.66 “Regulatory Authority” means, with respect to any jurisdiction, the Governmental
Authority having responsibility for granting Regulatory Approvals in such country or jurisdiction.

1.67 “Research Committee” shall have the meaning assigned to it in Section 5.2(a).

1.68 “Release Condition” shall have the meaning assigned to it in Schedule 2.7.

1.69 “Representatives” means with respect to a party, such party’s Affiliates, licensees,
officers, directors, managers employees, consultants, contractors, sub-licensees and agents.

1.70 “Research Plan” means a detailed plan that sets forth the responsibilities of, and
activities to be conducted by, ATHERSYS and PFIZER with respect to non-clinical research activities
related to MultiStem and its potential usage in the clinic, and in advancing one or more MultiStem
Products into one or more potential Clinical Development Candidates and Licensed Products
(including a detailed budget corresponding to each such plan). [*].

1.71 “Research Program” means the research and non-clinical development activities
conducted by (or to be conducted by) each party pursuant to the Research Plan.

1.72 “Research Program IPRs” means rights in (i) issued patents and pending provisional and
non-provisional applications for patents, including, without limitation, any continuations,
continuations-in-part or divisions directed to inventions disclosed therein; (ii) any
re-examinations, reissues, renewals, substitutions or extensions of any patents; (iii) foreign
counterparts or equivalents of any of the foregoing rights, (iv) inventions, discoveries, data,
information, trade secrets, processes, methods, techniques, materials, technology, results or other
know-how, whether or not patentable; (v) methods, devices or improvements for delivery or
maintenance of a cell-based product and (vi) copyrights, software, source code and copyrightable
works, in each case (i) through (vi) that which are created, devised or arise out of the parties
(or their Affiliates) undertaking and performing the Research Program, other than Athersys
Combination Product IPRs and Pfizer Combination IPRs.

1.73 “Research Term” means the Initial Research Term and, at PFIZER’s sole discretion, the
Extension.

1.74 “Royalty Term” means, on a country-by-country and Licensed Product-by-Licensed Product
basis, the period commencing upon Launch of the Licensed Product in the Field in the country and
ending upon [*]: (i) the date on which such Licensed Product is no longer covered by a Valid Claim
in such country; or (ii) [*] ([*]) years from the date of Launch of the first Licensed Product in
such country provided that the Regulatory Approval for such Licensed Product in such country
continues to provide data or market exclusivity in respect of such Licensed Product.

1.75 “Sales Milestone Payments” means the amounts set forth in Section 9.2.

 

	 	 	 
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1.76 “Stand-By License” means each license entered into pursuant to Section 7.5 between
PFIZER, ATHERSYS and the corresponding Third Party to a Third Party License.

1.77 “Suitably Qualified Person” means a person with the qualifications and/or experience
ordinarily required in connection with the relevant Key Role, which in relation to: (i) ATHERSYS’
Co-Chair to the JSC shall mean a person with at least [*] ([*]) years experience working
in human cell based therapy research in an industrial environment; (ii) ATHERSYS’ Co-Chair to the
Manufacturing Committee shall mean a person with at least [*] ([*]) years experience in the
manufacture of human cell based products and (iii) ATHERSYS’ Research Program planning lead shall
mean a person with at least [*] ([*]) years experience managing human cell based research projects.

1.78 “Term” shall have the meaning assigned to it in Section 15.

1.79 “Territory” means the entire world.

1.80 “Third Party” means any person or entity other than PFIZER, ATHERSYS, or any of their
respective Affiliates.

1.81 “Third Party Claim” shall have the meaning assigned to it in Section 17.3.

1.82 “Third Party Licenses” means the Third Party licence agreements listed in Schedule
1.82 as such Schedule may be amended during the Term by agreement of the parties to include any
relevant future Third Party licenses.

1.83 “Valid Claim” means [*]

 

	 	 	 
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Section 2 RESEARCH PROGRAM

2.1 Purpose.

During the Research Term, ATHERSYS and PFIZER will conduct the Research Program and Clinical
Development Program and any other agreed upon activities by the parties. The goal of the
collaboration is to discover and develop Licensed Products and in particular to: (i) advance one or
more Licensed Products in the Field to “proof of concept” in human; (ii) further advance Licensed
Products in the Field to preclinical testing as defined in the Research Plan; (iii) evaluate the
potential to advance one or more Licensed Products in the Field and give ATHERSYS an opportunity to
participate in co-development with PFIZER; (iv) advance research in the potential for formulation,
pre-treatment, concurrent treatment, or follow-on treatment with one or more pharmaceutical agents
for improvement of cell-based therapy in the Field; and (v) to assure continuity of MultiStem
clinical supply and manufacturing capability to support development and commercialisation of
Licensed Products in the Field.

2.2 Research Term.

The initial Term of the Research Program will be for [*] from the Effective Date
(the “Initial Research Term”). Pfizer may elect, in its sole discretion, to extend the
Research Term for an additional [*] (“Extension”), subject to the parties agreeing to any
applicable changes to the Research Plan and/or Clinical Development Plan(s) and to PFIZER providing
the additional research funding pursuant to Section 8.1.

2.3 Exclusivity.

During the Research Term and thereafter for as long as PFIZER is using Commercially Reasonable
Efforts to develop or commercialise a Licensed Product in the Field in the Territory, ATHERSYS and
its Affiliates shall work exclusively with Pfizer in the development and commercialisation of
Licensed Products for the Field in the Territory.

2.4 Research Reports

(a) Quarterly Reports. After each Pfizer Quarter each party will submit to the Research
Committee a written report summarizing its activities under the Research Program. Each research
report shall include summary results and material data and findings for all Research Program
studies ongoing or completed during the Pfizer Quarter. The report must be submitted within 30 days
of the end of the Pfizer Quarter.

(b) Annual Reports. After each Pfizer Year each party will submit to the JSC a written report
detailing the work it completed during the Pfizer Year and evaluating the results of its work. The
report must be submitted within 30 days of the end of the Pfizer Year.

 

	 	 	 
	*	 	Confidential treatment has been requested for the
redacted portions of this exhibit, and such confidential portions have been
omitted and filed separately with the Securities and Exchange Commission.

 

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2.5 Sharing of Research and Certain Information.

ATHERSYS shall share with PFIZER in good faith, as completely as possible, promptly, but in
any event in accordance with any requirements as to time for submission/notification of any
Regulatory Authorities [*], prior to the Effective Date and which are set out in
writing, certain research findings from studies conducted using MultiStem Products or research
materials outside this Agreement (by example and without limitation[*]) which ATHERSYS reasonably
deems to be relevant to patient safety, the safe research use of MultiStem and the research,
development, regulatory requirements, and/or commercialization of a Clinical Development Candidate.
All information provided pursuant to this Section 2.5 shall be considered Athersys
Confidential Information.

2.6 Introduction of Technology.

If a party identifies technology or compounds independent of the Research Program that it
believes might have utility in the Research Program, it may notify the Research Committee and the
Research Committee shall discuss and agree upon the nature and scope of incorporation of such
technology or compound into the Research Program, including such party’s patent rights with respect
to such technology, and designate such technology as Athersys Compounds or Devices or Pfizer
Compounds or Devices, as the case may be. If the Research Committee cannot agree on introduction of
such technology, the party proposing to introduce the technology can withdraw its proposal and such
technology will be excluded from the Research Program.

2.7 Cell Repository.

By the date set out in the Research Plan, ATHERSYS hereby agrees to: (i) transfer to PFIZER,
on the terms of the Materials Transfer Agreement, sufficient numbers of vials containing stored
cells from each of: (a) the then current MultiStem master cell banks, (b) each of the MultiStem
working cell banks which have been derived from a MultiStem master cell bank, and (c) the then
current media used by ATHERSYS to initiate cell expansion and a complete list of the growth factors
and media components required, in each case (a), (b) and (c) as are capable of producing the
MultiStem cells needed to (x) enable PFIZER to serve as a repository for MultiStem cells and (y)
manufacture Clinical Development Candidates and Licensed Products for use in the Field in
accordance with Schedule 2.7; and (ii) a certified (to the extent required) copy of all
licenses, permits and authorisations granted by Regulatory Authorities and such supporting
documentation and donor consents required to demonstrate compliance with all Laws relating to the
isolation, purification, derivation, production and traceability of the MultiStem cells, such other
information as is required to support the CMC sections of a regulatory dossier for a Licensed
Product in the Field and access to all electronic regulatory submissions made by or on behalf of
ATHERSYS (together referred to as the “MultiStem Regulatory File”).

2.8 Laboratory Facility and Personnel.

Each party will provide suitable laboratory facilities, materials, equipment and personnel for
the work to be done by it in the Research Program. ATHERSYS may subcontract any of its obligations
in respect of a Research Plan to its Affiliates or to other
Third Party providers as agreed under the applicable Research Plan and subject to the terms of
Section 19.8.

 

	 	 	 
	*	 	Confidential treatment has been requested for the
redacted portions of this exhibit, and such confidential portions have been
omitted and filed separately with the Securities and Exchange Commission.

 

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2.9 Materials Transfer.

All biological materials and compounds for research and laboratory use(i.e., excluding
clinical or commercial supply of Clinical Development Candidates and other Licensed Products),
transferred by ATHERSYS and PFIZER to the other party shall be transferred pursuant to the
Materials Transfer Agreement.

2.10 Commercially Reasonable Efforts.

PFIZER will use Commercially Reasonable Efforts and ATHERSYS will in good faith apply those
efforts and resources consistent with and in kind to PFIZER’S Commercially Reasonable Efforts in
pursing the development or commercialization of the Licensed Products to achieve the goals of the
Research Program.

2.11 Changes to Ongoing Research.

With respect to studies and activities of the Research Program, the party responsible for a
particular study or activity under the Research Program may modify the study or its activities, but
only after consultation with and approval of the JSC (or applicable subcommittee) for material
modifications and changes, such approval to by given by email exchange of the applicable Committee
Co-Chairs.

2.12 New Research. During the Term, the parties anticipate undertaking additional non-clinical
research, and the parties acknowledge that either party may assume certain responsibilities, and
may conduct certain activities, in connection with such research. The JSC (or a subcommittee
designated with responsibility therefore) shall have oversight for the parties’ responsibilities
and activities (if any) related to new research, and shall incorporate such research, activities
and studies into the Research Plan as appropriate.

2.13 Disclosure of Technology.

Within thirty (30) days after the Effective Date, and from time-to-time throughout the Term,
and at any time during the Term at PFIZER’s request, ATHERSYS will disclose to PFIZER or its
designated Affiliate all Athersys Technology that may be necessary or useful to PFIZER to develop,
manufacture, register, or market Clinical Development Candidates or Licensed Products in the Field
and efficiently practice the licenses granted to PFIZER under this Agreement (including all
regulatory materials, permissions and consents relating to MultiStem as may be required by any
Regulatory Authority).

 

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Section 3 CLINICAL DEVELOPMENT PROGRAM

3.1
Clinical Development Program. The parties shall conduct the Clinical Development Program in
accordance with the Clinical Development Plan(s). The Development & Regulatory Committee shall
oversee the Clinical Development Program. PFIZER shall have the exclusive right and
responsibility for
preparing any Clinical Development Plans, conducting clinical development and executing
clinical trials thereunder, and obtaining all Regulatory Approvals for Licensed Products in the
Field. ATHERSYS, at its cost and without delay to the progression of or interference with
Regulatory Approvals, shall have the right to participate as a direct observer in all aspects of
development of a Clinical Development Candidate through Phase II(b) Clinical Studies and, for so
long as ATHERSYS continues to fund Phase III Clinical Studies pursuant to Section 3.2(c),
Phase III Clinical Studies. PFIZER shall be solely responsible for the costs of executing any
clinical study of any Clinical Development Candidate, except the costs of ATHERSYS’ own
participation in the clinical study in accordance with the Clinical Development Plan(s), certain
Manufacturing Costs pursuant to Section 4.1, and as provided in Section 3.2.

3.2
Opt-In Rights. Prior to the initiation of the first Phase III Clinical Study in any Pilot
Indication or Major Indication, ATHERSYS may elect to participate in the development, and related
funding, of the Phase III Clinical Study for such Indication as follows:

(a) At least six (6) months prior to the initiation of the first Phase III Clinical Study for
a in any Pilot Indication or Major Indication, PFIZER shall provide to ATHERSYS a written Clinical
Development Plan, including a description of the studies to be completed (including trial
design(s)), the plan for seeking any Regulatory Approval(s), any other requirements for obtaining
Regulatory Approval, the then current commercialization plan, and a budget describing PFIZER’S
good faith estimates of the costs of all of these activities.

(b) IF ATHERSYS wishes to participate in the co-development of the Licensed Product pursuant
to the Clinical Development Plan provided under Section 3.2(a) it shall notify PFIZER in
writing (“Opt-In Notice”) by no later than thirty (30) days prior to Commencement of the
corresponding Phase III Clinical Study. If ATHERSYS does not provide an Opt-In Notice, then it
forgoes its right to participate in co-development of such Licensed Product. If ATHERSYS does
provide PFIZER with an Opt-In Notice, then it shall provide PFIZER within thirty (30) days of the
date of the Opt-In Notice a written commitment to fund its share of costs. If ATHERSYS fails to
provide such written commitment, then it shall forgo its right to participate in the co-development
of such Licensed Product.

(c) If ATHERSYS provides to PFIZER the Opt-In Notice and a corresponding written commitment,
then (i) ATHERSYS shall make payment to PFIZER of its share of costs on a quarterly basis as
described in Schedule 3.2(c) and (ii) if ATHERSYS funds all its share of the Clinical
Development Costs for that Clinical Development Candidate, ATHERSYS shall be entitled to (A)
participate in any Development and Regulatory Committee(s) and as a direct observer in all aspects
of the Phase III Clinical Study and the Clinical Development Plan for such Clinical Development
Candidate (subject to Pfizer’s rights in Section 3.1) and (B) share Profits from the
commercialization of such Licensed Product in accordance with Schedule 3.2(c).

(d) If ATHERSYS is unable or elects not to pay any or all of its portion of costs pursuant to
Section 3.2(c) then, as the sole remedy for such failure, it shall lose the benefits of
Section 3.2 (c )(ii)(B) above with respect to the Licensed Product and shall, subject
to its obligations pursuant to Section 3.1, have no further obligations to fund its share of costs.

 

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3.3 Clinical Development Program Reports.

(a) Quarterly Reports. After each Pfizer Quarter following the Commencement of a
Clinical Development Plan and during the Research Term each party will submit to the Development &
Regulatory Committee a written report summarizing its activities under that Clinical Development
Program. Each report shall include summary results and material data and findings, if available,
for all Research Program studies ongoing or completed during the Pfizer Quarter. The report must be
submitted within thirty (30) days of the end of the Pfizer Quarter.

(b) Annual Reports or Clinical Summary Report. Following the Commencement of a
Clinical Development Plan and ending with the first Launch of the applicable Licensed Product,
PFIZER shall provide annually following the end of the Pfizer Year, or at the end of a clinical
study when the clinical report is issued, written reports to the JSC or Development & Regulatory
Committee regarding the development of the Licensed Product. PFIZER shall use Commercially
Reasonable Efforts to provide the annual report within thirty (30) days of the end of each Pfizer
Year and the clinical summary report when completed and approved. If PFIZER is preparing a
clinical summary report for any clinical study that is completed or terminated prior to completion,
PFIZER will not have to prepare a separate annual report if the clinical summary report is
anticipated within the following Pfizer Quarter.

(c) All information provided by PFIZER to ATHERSYS pursuant to this Section 3.3 shall
be considered Pfizer Confidential Information.

3.4 Commercially Reasonable Efforts.

PFIZER will use Commercially Reasonable Efforts and ATHERSYS shall in good faith apply those
efforts and resources consistent with and in kind to PFIZER’s Commercially Reasonably Efforts to
achieve the goals of the Clinical Development Program. PFIZER will use Commercially Reasonable
Efforts to develop, seek Regulatory Approval for and commercialize a Licensed Product for the Pilot
Indication and for the Major Indication following approval pursuant to this Agreement of an
applicable Clinical Development Plan for a Licensed Product for the Pilot Indication or Major
Indication.

3.5 Records.

During the Term, PFIZER will prepare and maintain accurate records and books relating to the
progress and status of its activities under a Clinical Development Plan and otherwise in relation
to the development of Licensed Products. As reasonably requested by ATHERSYS from time-to-time
throughout the Term, PFIZER will disclose to or permit direct access, during PFIZER regular
business hours with appropriate notice from and good faith justification from ATHERSYS, to ATHERSYS
to material records, books and data related to the development of any Licensed Product, including
any regulatory filings and communications; investigator’s brochures; study records, reports and
related data; and related information.

 

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3.6 Regulatory Affairs.

(a) PFIZER shall determine all regulatory plans and strategies for the Licensed Products
(including Clinical Development Candidates) in the Field, and will own and be responsible for
preparing, seeking, submitting and maintaining the investigator’s brochure and all regulatory
filings and Regulatory Approvals for all Licensed Products in the Field, including preparing all
reports necessary as part of a regulatory filing or Regulatory Approval and for all communications
with Regulatory Authorities for such Licensed Products in the Field. ATHERSYS shall have the
right, at its cost and without delay to the progression of Regulatory Approvals, to participate as
a direct observer in significant regulatory activities, including interactions with Regulatory
Authorities. Without limiting ATHERSYS’ obligations pursuant to Section 2.7 and
Schedule 2.7, ATHERSYS agrees to cooperate and assist Pfizer in the provision of any
documentation required for any regulatory filings for Regulatory Approvals for Licensed Products in
the Field.

(b) ATHERSYS shall keep PFIZER regularly and promptly informed of all material regulatory
filings, Regulatory Approvals and all material communications, interfaces and other actions to,
with or from Regulatory Authorities relating to MultiStem Products outside the Field and shall
ensure that all such filings, Regulatory Approvals, communications, interfaces and actions are
materially made by ATHERSYS in accordance with the global clinical and regulatory strategy approved
by the Development & Regulatory Committee from time to time for the Licensed Products in the Field.
Additionally, ATHERSYS shall take in to account in good faith any concerns or input raised by
PFIZER in relation to such regulatory filings, Regulatory Approvals, communications, interfaces and
actions.

(c) Without limiting the provisions of Section 3.6(a) and Section 2.5, the
safety reporting units from each of the parties shall meet and agree upon a written agreement for
exchanging adverse event and other safety and other pharmacovigilance information relating to
MultiStem Products prior to initiation of any clinical activity in the Field implicating
pharmacovigilance obligations for the MultiStem Products in the Territory (the
“Pharmacovigilance Agreement”). Such Pharmacovigilance Agreement shall ensure that adverse
events and other safety information is exchanged upon terms that will permit each party to comply
with Laws and requirements of Regulatory Authorities.

(d) Any regulatory affairs matter relating to any Athersys Device to be used for MultiStem
Products in the Field shall be discussed initially by the JSC, Development & Regulatory Committee,
with appropriate regulatory experts from the parties present at that meeting, for the purposes of
determining the appropriate regulatory strategy for use of such Device in the Field.

 

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3.7 Regulatory Exclusivity

PFIZER shall have the sole right to apply for and secure exclusivity rights for the Licensed
Products in the Territory in the Field that may be available under the Law of countries in the
Territory, including any data or market exclusivity periods such as those periods listed in the
FDA’s Orange Book or periods under national implementations of Article 10.1(a)(iii) of Directive
2001/EC/83 (including any paediatric exclusivity extensions
or other forms of regulatory exclusivity that may be available), and all international
equivalents. ATHERSYS shall in good faith apply those efforts and resources consistent with and in
kind to PFIZER’s Commercially Reasonable Efforts to cooperate with PFIZER and to take such
reasonable actions to assist PFIZER, in obtaining such exclusivity rights in each country, as
PFIZER may reasonably request from time to time.

3.8 Commercialization/Pricing.

PFIZER shall be solely responsible for marketing, promoting, selling, distributing and
determining pricing and other terms of sale for all Licensed Products in the Territory in the
Field. After each Pfizer Quarter, and once annually, Pfizer will submit to ATHERSYS a written
report summarizing its commercialization activities during the applicable period. All information
provided by PFIZER to ATHERSYS pursuant to this Section 3.8 shall be considered
Confidential Information (as defined in Section 12.1) of PFIZER.

Section 4 MANUFACTURING OF LICENSED PRODUCT

4.1 Clinical Manufacture and Supply of Licensed Product during Research Term.

(a) Pre-Clinical Supply. ATHERSYS shall be responsible for the supply and
manufacture, itself or through ATHERSYS’ Third Party manufacturer as of the Effective Date and any
other Third Party manufacturer approved by PFIZER (such approval not to be unreasonably withheld),
of such quantities of the Clinical Development Candidate material required for non-clinical
research and studies pursuant to a Research Plan at no cost to Pfizer during the Research Term.

(b) Certain Clinical Supply. ATHERSYS shall be responsible for the supply and

manufacture, itself or through an agreed Third Party manufacturer, of such quantities of Clinical
Development Candidate material required for clinical studies pursuant to a Clinical Development
Plan approved and underway during the Research Term at a cost to PFIZER of [*] percent
([*%]) of the reasonable Manufacturing Costs for that Clinical Development Candidate material
based on the following assumptions: (i) the estimated Manufacturing Costs per dose being [$*]; and
(ii) the anticipated amount of Clinical Development Candidate material required being the amount
required for [*] patients. If these assumptions are materially incorrect, the Manufacturing
Committee shall review the costs sharing basis and agree to any revised cost sharing arrangement.
The cost estimates are for initial planning purposes and are not intended to describe a total cost
obligation from PFIZER. ATHERSYS shall use its commercially reasonable endeavours to reduce
Manufacturing Costs.

(c) Other Clinical Study Supply. Except as provided in Sections 4.1(a) and (b)
and subject to any Release Condition occurring, ATHERSYS shall be responsible for the supply and
manufacture, itself or through an agreed Third Party manufacturer, of such quantities of the
Clinical Development Candidate required for clinical studies pursuant to an approved Clinical
Development Plan at a cost to Pfizer of [*] percent ([*%]) of the reasonable Manufacturing Costs in
respect of the manufacture and supply of Clinical Development Candidate material.

 

	 	 	 
	*	 	Confidential treatment has been requested for the
redacted portions of this exhibit, and such confidential portions have been
omitted and filed separately with the Securities and Exchange Commission.

 

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4.2 Commercial Supply.

Subject to any Release Condition occurring, ATHERSYS shall be responsible for the supply and
manufacture, itself or through an agreed Third Party manufacturer, of such quantities of the
Licensed Product to the extent reasonably required by PFIZER to commercialize the Licensed Products
in the Territory and in the Field. ATHERSYS shall supply such quantities of Licensed Product at a
price to PFIZER of [*] percent ([*%]) of the reasonable Manufacturing Costs of such
Licensed Products, unless ATHERSYS is sharing Profits with respect to a Licensed Product pursuant
to Section 3.2(c), in which case the price to PFIZER shall be [*] percent ([*%]) of the
reasonable Manufacturing Costs. The terms and procedures by and upon which ATHERSYS shall supply
Licensed Products to PFIZER hereunder shall be reasonably mutually determined by the parties in
good faith based upon commercially reasonable and customary terms, and shall be set forth in a
separate manufacturing and supply agreement not less than [*] months prior to the anticipated first
Launch of a Licensed Product.

4.3 Manufacturing Cost Records.

ATHERSYS shall keep, and shall require all Third Party manufacturers of Licensed Products to
keep, accurate records in sufficient detail concerning the Manufacturing Costs. PFIZER shall be
entitled, upon reasonable notice, to audit the Manufacturing Costs. For this purpose, ATHERSYS
itself shall keep, and to the extent that ATHERSYS has obtained records or documents from its Third
Party manufacturers shall keep, such account books and related records or documents for a period of
at least seven (7) years after the end of the fiscal year to which the Manufacturing Costs relate.

4.4 Manufacturing Compliance.

All Licensed Products supplied hereunder shall be manufactured by or on behalf of ATHERSYS in
compliance with current good manufacturing practices, other applicable requirements of relevant
regulatory authorities including but not limited to the transportation, storage, use, handling and
disposal of waste materials and hazardous materials used to manufacture Licensed Products, all
product specifications and testing methods. ATHERSYS, at its expense, shall obtain and maintain,
and/or shall require that its Third Party manufacturers obtain and maintain, for so long as
ATHERSYS is supplying Licensed Products hereunder, all facility licenses and government permits
necessary to manufacture and supply the Licensed Products.

4.5 Inspection.

With respect to the manufacture of the Licensed Products, PFIZER may, at its expense, upon
reasonable notice and during normal business hours, conduct appropriate review and inspection of
the Licensed Products manufacturing facilities, procedures and related documentation to verify
ATHERSYS and/or its Third Party manufacturer’s (as applicable) compliance with current good
manufacturing practices, other applicable requirements of
relevant Regulatory Authorities, and other applicable Laws , and conformity of Licensed Products
with the applicable specifications and testing methods.

 

	 	 	 
	*	 	Confidential treatment has been requested for the
redacted portions of this exhibit, and such confidential portions have been
omitted and filed separately with the Securities and Exchange Commission.

 

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Section 5 JOINT STEERING COMMITTEE

5.1
Joint Steering Committee. Promptly following the Effective Date, the parties shall establish
a Joint Steering Committee (“JSC”) to oversee and coordinate the parties’ responsibilities
and activities in accordance with and in furtherance of the Research Plan(s), Clinical Development
Plan(s) and this Agreement. The JSC shall be composed of three (3) senior, qualified
representatives from each of AI and PFIZER (or from their Affiliates). The total number of JSC
members will initially be six (6), but the number may be increased or decreased from time-to-time
by written agreement of the parties; provided that the number of representatives from PFIZER shall
always be equal to the number of representatives from ATHERSYS. Each of PFIZER and AI may replace
any of its representatives on the JSC at will by giving written notice thereof to the other party.

5.2
Subcommittees. The JSC shall be empowered to create one or more subcommittees, project teams
or working groups, as it may deem appropriate or necessary. Each such subcommittee, project team
and working group shall report to the JSC, which shall have authority to approve or reject
recommendations or actions proposed thereby, subject to the terms of this Agreement. In general,
the parties contemplate that all JSC subcommittees shall have an equal number of members appointed
by each party.

(a) Within sixty (60) days of the Effective Date, the JSC shall establish a research committee
to oversee the non-clinical research activities of the collaboration (“Research
Committee”). The Research Committee shall be responsible for the development, management, and
performance of the Research Plan and Research Program, and any other non-clinical activities as
determined by the JSC. The Research Committee shall be composed of three (3) senior, qualified
representatives from each of AI and PFIZER (or their Affiliates), and a representative from each of
AI and PFIZER shall jointly chair the Research Committee. Decisions shall be made by consensus,
and in the event a consensus is not reached within ten (10) Business Days after it is first
presented to the joint chairs of the Research Committee, then such decisions shall be submitted as
soon as possible to the JSC for decision.

(b) Within ninety (90) days of the Effective Date, the JSC shall establish a Development &
Regulatory Committee responsible for overall strategic and business guidance with respect to the
development, management and performance of the Clinical Development Program and Clinical
Development Plan(s), the coordination and alignment of the global clinical development and
regulatory strategies for MultiStem Products and Licensed Products and Combination Products both
inside and outside the Field (“Development & Regulatory Committee”). The Development &
Regulatory Committee shall be composed of an equal number of senior, qualified representatives from
each of AI and PFIZER (or their Affiliates), and a representative from each of AI and PFIZER shall
jointly chair the Development & Regulatory Committee. Decisions shall be made by consensus, and in
the event a consensus is not reached within ten (10) Business Days after it is first presented to
the joint chairs of the Development & Regulatory Committee, then such
decisions shall be submitted as soon as possible to the JSC for decision. In the event
ATHERSYS fails to perform any material obligation or activity assigned to it under a Clinical
Development Plan for a Clinical Development Candidate and does not cure such failure promptly
after notice thereof, PFIZER may elect to suspend or terminate all responsibilities of the JSC and
the Development & Regulatory Committee in respect of that Licensed Product.

 

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(c) As soon as the JSC determines, but not later than the end of the Research Term, the JSC
shall establish a manufacturing committee to oversee the supply of Licensed Product for the Field,
and ensure cooperation regarding the then cGMP manufacturing standards and regulatory requirements,
product specifications and testing methods (“Manufacturing Committee”). The Manufacturing
Committee shall be responsible for ensuring the supply of Licensed Product for the Field in
accordance with regulatory requirements and industry standards, including forecasting supply
requirements and contingency planning and actions for back-up supply and supply disruptions, and
any other activities as determined by the JSC. The Manufacturing Committee shall be composed of
three (3) senior, qualified representatives from each of AI and PFIZER (or their Affiliates), and a
representative from each of AI and PFIZER shall jointly chair the Manufacturing Committee.
Decisions shall be made by consensus, and in the event a consensus is not reached within ten (10)
Business Days after it is first presented to the joint chairs of the Manufacturing Committee, then
such decisions shall be submitted as soon as possible to the JSC for decision.

5.3 Chairperson. AI and PFIZER shall each appoint one of its representatives on each of the
Committees as a co-chair of that Committee (each, a “Co-Chair”), and may change its
Co-Chair from time to time by written notice to the other. Each party’s Co-Chair shall serve as a
co-chair of the applicable Committee meetings, unless the Co-Chairs jointly determine that they
shall alternate responsibility for chairing Committee meetings (whether on a meeting-by-meeting,
calendar quarter-by-calendar quarter or calendar year-by-calendar year basis).

5.4 Committee Meetings.

(a) The JSC and Research Committee shall each meet at least once every Pfizer Quarter during
the Research Term, either in person, by video conference or by telephone conference, as
appropriate, as reasonably arranged by the Co-Chairs; provided that at least one (1) JSC
and Research Committee meeting per calendar year shall be held in person.

(b) The Development & Regulatory Committee shall meet at least once every six months up to
first Launch of a Licensed Product in the Field where ATHERSYS elects to co-develop a Licensed
Product pursuant to Section 3.2 or (ii) once every Pfizer Year where ATHERSYS does not so
elect, either in person, by video conference or by telephone conference, as appropriate, as
reasonably arranged by the Co-Chairs; provided that at least one (1) Development &
Regulatory Committee meeting per calendar year shall be held in person.

(c) The Manufacturing Committee shall meet at least once every six months for so long as
ATHERSYS manufactures or controls manufacture and supply by an agreed Third Party of Clinical
Development Candidates or Licensed Products for the Field, either in
person, by video conference or by telephone conference, as appropriate, as reasonably arranged
by the Co-Chairs; provided that at least one (1) Manufacturing Committee meeting per
calendar year shall be held in person.

 

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(d) Meetings of Committees shall be effective only if at least one (1) Committee
representative of each of ATHERSYS and PFIZER participates in the meeting (in person or by
telephone or videoconference). The Co-Chairs (or the responsible Committee chairperson, if
applicable) shall be responsible for scheduling Committee meetings, preparing meeting agendas.
Notices of all regular Committee meetings shall be sent at least thirty (30) days before such
meetings. Agendas for such meetings shall be sent at least ten (10) days before such meetings.

(e) In addition, either Co-Chair of a Committee may from time to time request a special
Committee meeting by contacting the other Co-Chair and providing a proposed agenda for such
meeting. The Co-Chairs shall arrange a mutually acceptable time for such special Committee meeting
as promptly thereafter as reasonably possible, and shall prepare and circulate an agenda for such
special Committee meeting as far in advance of such meeting as reasonably possible.

(f) Each Committee will keep accurate minutes of its deliberations. The minutes will record
all decisions and proposed actions. A draft of the minutes must be delivered to all Committee
members within ten (10) Business Days after each meeting. The party hosting the meeting will
prepare and circulate the draft minutes. The Co-chairs will edit, approve and distribute the
minutes to all Committee members at least ten (10) Business Days before the next Committee meeting.

(g) Each party shall be responsible for its own expenses incurred by its Committee
representatives in attending or otherwise participating in Committee meetings.

5.5 Responsibilities of the Joint Steering Committee.

In addition to its general responsibility to oversee and coordinate the activities of the
parties in connection with the Research Plans, Clinical Development Plans and this Agreement, the
JSC shall (itself or by delegation to a subcommittee) in particular be responsible for the matters
described in Schedule 5.5, but the JSC shall have no authority to amend the terms of this
Agreement.

5.6
Voting; Decision-Making. Regardless of the number of Committee representatives from any
party, PFIZER shall present one consolidated view and have one vote on any issue before a
Committee, to be cast by PFIZER’S Co-Chair or his/her designee, and ATHERSYS shall present one
consolidated view and have one vote on any issue before a Committee, to be cast by AI Co-Chair or
his/her designee. Committees may only act by unanimous written agreement. In making decisions on
the JSC, each party shall duly consider in good faith any suggestions, opinions and proposals made
by the other party, and shall use good faith efforts to reach consensus with the other party. If
the JSC fails to reach unanimous agreement on any matter within the scope of its responsibilities,
the dispute shall be resolved as set forth in Section 5.7.

 

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5.7 JSC Disputes.

If the JSC fails to reach unanimous agreement on any matter or issue within its power to
decide within ten (10) Business Days after the date of referral to the JSC, the matter or issue
shall be referred for resolution by [*]. If they are unable to reach consensus and
resolve the JSC Dispute within twenty (20) Business Days after the date of referral to them, then
the JSC Dispute shall be referred for resolution [*], provided that [*] on any referred
matter if no consensus decision is reached within ten (10) Business Days of its referral to the CEO
of AI [*], and further provided that no such decision by [*] may require ATHERSYS to spend
money or devote resources beyond those it is required pursuant to this Agreement or amend the terms
of this Agreement.

Section 6 RIGHTS TO RESEARCH PROGRAM AND COMBINATION PRODUCT IPRs

6.1 Background Intellectual Property Rights Retained.

Nothing in this Agreement shall be construed to transfer ownership of any intellectual
property rights existing as of the Effective Date, or in the case of Compounds or Devices as of the
date any such Compound or Device is introduced in to the Research Program, from one party to
another party.

6.2
Ownership Of New Intellectual Property.

(a) Subject to Section 11.3, ATHERSYS shall be the owner of the Research Program
IPRs, which shall be deemed to form part of the Athersys Patent Rights, the Athersys Technology
and/or the Athersys Confidential Information, as applicable, and of the Athersys Combination
Product IPRs.

(b) PFIZER shall be the owner of the Pfizer Combination Product IPRs.

Section 7 LICENSES

7.1 Exclusive Licenses to PFIZER

In consideration of the License and Technology Access Fee Event Milestone Payment and subject
to the terms and conditions of this Agreement ATHERSYS hereby grants to PFIZER, and PFIZER hereby
accepts:

(a) an exclusive license (even as to ATHERSYS and its Affiliates, but subject to any rights
granted or reserved for non-commercial research purposes only to Third Parties pursuant to a Third
Party License existing as at the Effective Date), including the right to sublicense, under the
Athersys Patent Rights to research, develop, make or have made, use, sell, offer for sale, supply,
cause to be supplied, and import Licensed Products, in each case in the Field and in the Territory,
and

(b) an exclusive license (even as to ATHERSYS and its Affiliates, but subject to any rights
granted or reserved for non-commercial research purposes only to Third Parties
pursuant to a Third Party License existing as at the Effective Date), including the right to
sublicense, to use Athersys Technology and Athersys Confidential Information in connection with the
research, development, manufacture, use, sale, offer for sale, supply and importation of the
Licensed Products, in each case in the Field and in the Territory.

 

	 	 	 
	*	 	Confidential treatment has been requested for the
redacted portions of this exhibit, and such confidential portions have been
omitted and filed separately with the Securities and Exchange Commission.

 

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7.2 Non-Exclusive Licenses to PFIZER

Without limiting any of the licenses granted in Section 7.1, subject to the terms and
conditions of this Agreement, ATHERSYS hereby grants to PFIZER, and PFIZER hereby accepts:

(a) a non-exclusive, irrevocable, royalty-free, perpetual license, with the right to sub
licence to Affiliates, under the Athersys Combination Product IPRs to develop, make, have made,
use, sell, offer for sale, supply, cause to be supplied and import any pharmaceutical or
bio-pharmaceutical products (other than Licensed Products) at PFIZER’S own risk;

(b) a non-exclusive, royalty-free license in the Territory, with the right to sublicense to
Affiliates and to service providers under contract to PFIZER or its Affiliates, to use for research
conducted pursuant to the Research Plan or a Clinical Development Plan, the Athersys Patent Rights,
the Athersys Technology, the Athersys Confidential Information and the Athersys Combination Product
IPRs disclosed during the Term to PFIZER by ATHERSYS or its Affiliates; and

(c) a non-exclusive, irrevocable, royalty-free, perpetual license in the Territory, with the
right to sublicense to Affiliates and to service providers under contract to PFIZER or its
Affiliates, to use for all research purposes, the Athersys Technology, Athersys Patent Rights,
Athersys Combination Product IPRs, Athersys Confidential Information and Research Program IPRs
provided that this Section 7.2(c) does not grant to PFIZER or its Affiliates any
right to use MultiStem cells outside of conducting activities under a Research Plan or Clinical
Development Plan.

7.3 Restriction on Exercise of Manufacturing Rights

Except through ATHERSYS, PFIZER agrees not to exercise its rights to make, have made or
manufacture under Sections 7.1 in respect of any Clinical Development Candidates or other
Licensed Products in the Field or disclose or transfer any Athersys Technology or Athersys
Confidential Information in respect of such activities to any Affiliate or Third Party (other than
Regulatory Authorities) until the occurrence of a Release Condition.

7.4 Non-Exclusive Licenses to ABT

Subject to the terms and conditions of this Agreement, PFIZER hereby grants to ATHERSYS, and
ATHERSYS hereby accepts:

(a) a non-exclusive, irrevocable, royalty-free, license in the Territory and in the Field,
with the right to sublicense to Affiliates and such Third Parties (for which the JSC has obtained
management approval pursuant to Section 5 and Schedule 5.5), under the Athersys
Patent Rights, Athersys Technology, Athersys Confidential Information and Pfizer Combination
Products IPRs: (i) for ATHERSYS’ research purposes in perpetuity and
provided that, if ATHERSYS will not be the owner of any intellectual property rights
created by such agreed Third Party sublicense, ATHERSYS shall procure that each such agreed Third
Party sublicensee shall grant directly to PFIZER a non-exclusive, irrevocable, royalty free,
perpetual license in the Territory, with right to sublicense to its Affiliates, in respect of any
intellectual property rights created by such agreed Third Party sublicensee, (ii) to develop during
the Research Term and for so long as ATHERSYS continues to exercise its rights to co-develop
pursuant to Section 3.2, Clinical Development Candidates and (iii) make or have made,
Clinical Development Candidates and Licensed Products in the Field pursuant to Section 4
and any manufacturing agreement entered pursuant thereto.

 

24

 

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(b) a non-exclusive, irrevocable, royalty-free, perpetual license in the Territory and outside
the Field, with the right to sub license to Affiliates, under the Pfizer Combination Product IPRs
to develop, make or have made, use, sell, offer for sale, supply, cause to be supplied and import
biopharmaceutical products which are combined with MultiStem Products at ABT’s own risk.

(c) a non-exclusive, irrevocable, royalty-free, perpetual license in the Territory, with the
right to sublicense to Affiliates and to service providers under contract to ATHERSYS or its
Affiliates, to use for all research purposes Pfizer Technology disclosed to ATHERSYS by PFIZER or
its Affiliates during the Research Term: (i) for all research purposes during the Research Term and
(ii) following expiry of the Research Term, for all research purposes outside the Field.

7.5 Stand-By Licences.

With effect from the Effective Date, PFIZER and ATHERSYS (or its applicable Affiliate) shall
enter in to the stand-by licences with the Third Party Licensors listed in Schedule 7.5 on
the agreed terms. ATHERSYS undertakes to procure in a timely manner and on substantially similar
terms, any additional stand-by licences from other Third Party licensors of any ATHERSYS Patent
Rights or ATHERSYS Technology which PFIZER, acting reasonably, may request.

7.6 Restriction on Sublicensing by PFIZER.

PFIZER shall notify ATHERSYS, not less than thirty (30) days, prior to granting a sublicense
pursuant to Section 7.1 to a Third Party (other than any service provider or contract
manufacturing organization) in respect of any right to develop or commercialize a Licensed Product
in the Field. Such notice shall set out: (a) the identity of the proposed sublicensee, and (b) the
terms and conditions in the proposed sublicense governing the access to, use and protection of
Athersys Technology and Athersys Confidential Information (the “Sublicense Restrictions”).
If ATHERSYS reasonably and in good faith considers that (i) the proposed sublicensee is a direct
competitor of the MultiStem cell therapy business of ATHERSYS existing at the Effective Date and as
developed therefrom internally (or together with licensees) by ATHERSYS (the “MultiStem
Business”) and (ii) the Sublicense Restrictions will not provide adequate and reasonable
protection against significant harm to the MultiStem Business, ATHERSYS shall notify PFIZER in
writing, within five (5) Business Days of receipt of PFIZER’s notification, including the facts
upon which such belief is based and the reasons why the Sublicense Restrictions are inadequate.
Promptly, following receipt of such notice from ATHERSYS, the parties shall discuss ATHERSYS’
concerns,
including any additional, reasonable Sublicense Restrictions which would satisfy those
concerns. If the parties cannot resolve those concerns, acting reasonably and in good faith,
within thirty (30) days, PFIZER shall not grant the sublicense to the proposed sublicensee and
ATHERSYS accepts that PFIZER shall not be held in breach of its obligations under Section 2.10
or Section 3.4 in respect of any consequential delays or impact on the development or
commercialization of the Licensed Product in the Field resulting from such inability to sublicense.

 

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7.7 Reservation of Rights.

Except as expressly stated in this Section 7, no rights or licenses are granted under
this Agreement by either party or its Affiliates under any intellectual property of such party or
its Affiliates to the other party or its Affiliates, whether by implication, estoppel or otherwise,
and all such rights not expressly stated are hereby reserved by each party and its Affiliates.

Section 8 RESEARCH FUNDING.

8.1 During the Research Term, PFIZER will fund ATHERSYS (or its Affiliates) on an FTE basis at the
FTE Rate to perform the work required for the Research Program and for progressing any Clinical
Development Candidates in Phase I Clinical Studies through to Phase II(b) Clinical Studies. Such
work may include work performed by ATHERSYS or on ATHERSYS’ behalf by Third Parties (for which the
JSC has obtained management approval pursuant to Section 5 and Schedule 5.5) and
may not represent [*] ([*]) specific ATHERSYS employees. The number of FTEs to be funded
by PFIZER and the FTE Rate per annum during the Research Term are set out below in United States
Dollars.

	 	 	 	 	 	 	 	 	 
	Period	 	FTEs	 	FTE Rate/annum	 	Total Funding	 	Quarterly Payment
	Initial Research
Term

	 	[*]
	 	[*]
	 	[*]
	 	[*]
	 
	 	 	 	 	 	 	 	 
	Extension

	 	[*] or such greater
number of FTEs
agreed by PFIZER
based on the
Research Plan
	 	[*]
	 	[*] or such higher
amount linked to
any agreed
additional number
of FTEs
	 	[*%] of the amount
of the Total
Funding for the
Extension

Except as set out in this Section 8.1 or in Section 4.1, all costs and
expenses related to the performance of the Research Plan or a Clinical Development Plan during the
Research Term incurred by a party shall be borne by the respective party undertaking the activity
and incurring the related costs and expenses.

 

	 	 	 
	*	 	Confidential treatment has been requested for the
redacted portions of this exhibit, and such confidential portions have been
omitted and filed separately with the Securities and Exchange Commission.

 

26

 

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8.2 Research Funding Payment.

All payments will be made in U.S. currency by electronic funds transfer within forty five (45)
days after receipt and acceptance by PFIZER of an invoice from ATHERSYS. ATHERSYS may invoice
PFIZER in quarterly advance instalments provided however that ATHERSYS may not invoice
PFIZER more than thirty (30) days in advance of a Pfizer Quarter. FTE funding for the first PFIZER
Quarter of the term of this Research Agreement will be paid to ATHERSYS within [*]
Business Days after the Effective Date.

Section 9 FEES AND ROYALTIES.

9.1 Event Milestone Payments.

(a) In consideration of the rights granted hereunder, and subject to the terms and conditions
of this Agreement, PFIZER shall pay to ATHERSYS the amount set forth in the table below opposite
the corresponding event Milestone (each an “Event Milestone”) within thirty (30) days after
the occurrence of such Event Milestone, after providing prompt notice of such achievement to
ATHERSYS (no more than ten (10) days after achievement) provided however that the License
and Technology Access Fee Event Milestone shall be payable by PFIZER within ten (10) Business Days
after the Effective Date:

	 	 	 	 	 
	No.	 	Event Milestone	 	Event Milestone Payment
	 
	 	 	 	 
	1

	 	[*]
	 	USD six million
 ($6,000,000)
	 
	 	 	 	 
	2

	 	[*]
	 	[$*]
	 
	 	 	 	 
	3

	 	[*]
	 	[$*]
	 
	 	 	 	 
	4

	 	[*]
	 	[$*]
	 
	 	 	 	 
	5

	 	[*]
	 	[$*]
	 
	 	 	 	 
	6

	 	[*]
	 	[$*]
	 
	 	 	 	 
	7

	 	[*]
	 	[$*]

(b) With respect to each milestone (i) each Event Milestone Payment shall be payable only on
the first occurrence of the corresponding Event Milestone; (ii) none of the Event Milestone
Payments shall be payable more than once; (iii) should the first Licensed Product be replaced or
succeeded by another Licensed Product or advancement of the Licensed Product in another indication
or with additional regulatory guidance no additional Event Milestone Payments shall be due for
Event Milestones already met with respect to any other Licensed Product; and (iv) the maximum
amount payable by PFIZER in respect of Event Milestone Payments if all Event Milestones occur shall
be USD [*][$*]).

 

	 	 	 
	*	 	Confidential treatment has been requested for the
redacted portions of this exhibit, and such confidential portions have been
omitted and filed separately with the Securities and Exchange Commission.

 

27

 

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9.2 Sales Milestone Payments.

In addition to the Event Milestone Payments, in consideration of the rights granted hereunder,
and subject to the terms and conditions of this Agreement, PFIZER shall pay to ATHERSYS the
following one-time payments (each, a “Sales Milestone Payment”) when aggregate Net Sales of
all Licensed Products in the Field, but excluding any Net Sales relating to Licensed Products in
the Field in respect of which ATHERSYS has elected to share Profits pursuant to Section
3.2(c) and Schedule 3.2 (c), over a period of four (4) consecutive Pfizer Quarters in
the Territory first reach the respective thresholds indicated below in United States Dollars:

	 	 	 
	Net Sales in the Territory	 	Sales Milestone Payment
	 
	Net Sales in [*] consecutive PFIZER Quarters 

exceed [$*]

	 	[$*]
	Net Sales in [*] consecutive PFIZER Quarters 

exceed [$*]

	 	[$*]
	Net Sales in [$*] consecutive PFIZER Quarters 

exceed [$*]

	 	[$*]
	Net Sales in [*] consecutive PFIZER Quarters 

exceed [$*]

	 	[$*]

PFIZER shall make any Sales Milestone Payment within sixty (60) days of that Sales Milestone
Payment falling due and such payment shall be accompanied by a report identifying the Licensed
Products, the relevant countries, Net Sales of each Licensed Product for each such country, and the
amount payable to ATHERSYS. All such reports shall be kept confidential by ATHERSYS and not
disclosed to any other party, other than ATHERSYS’ accountants which shall be obligated to keep
such information confidential, and such information and reports shall only be used for purposes of
this Agreement.

9.3 Royalty Payments.

In consideration of the rights granted hereunder, and subject to the terms and conditions of
this Agreement, unless and to the extent ATHERSYS is participating in a Profit share in respect of
any Licensed Product in the Field pursuant to Section 3.2 and Schedule 3.2(c),
PFIZER shall pay to ATHERSYS, with respect to the Licensed Products in the Field, an amount equal
to:

(a) [*] percent ([*%]) of Net Sales for the portion of Net Sales of such Licensed Products in
a Pfizer Year in the Territory below or equal to [*] ([$*]); plus

(b) [*] percent ([*%]) of Net Sales for the portion of Net Sales of such Licensed Products in
a Pfizer Year in the Territory greater than [*] ([$*]) and less than or equal to [*] ([$*]); plus

(c) [*] percent ([*%]) Net Sales for the portion of Net Sales of such Licensed
Products in a Pfizer Year in the Territory in excess of [*] ([$*]).

 

	 	 	 
	*	 	Confidential treatment has been requested for the
redacted portions of this exhibit, and such confidential portions have been
omitted and filed separately with the Securities and Exchange Commission.

 

28

 

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Notwithstanding the foregoing and subject to Section 9.5, any payments owed with
respect to sales of Licensed Products in a country in the Territory pursuant to this Section
9.3 shall be reduced by [*] percent ([*%]), such reduction to be prorated appropriately for the
then-current Pfizer Quarter, for Net Sales occurring during any time there is either no Valid Claim
or no right of data or market exclusivity covering such Licensed Product in the Field in such
country in the Territory. The parties agree and acknowledge that the payment of royalties by
PFIZER to ATHERSYS for sales in a country in which there is no Valid Claim or no right of data or
market exclusivity covering the applicable Licensed Product in the Field shall represent
consideration for the license to Athersys Technology, Athersys Combination Product IPRs, and
Athersys Confidential Information granted by ATHERSYS to PFIZER in Sections 7.1.

9.4 Sales Milestone Payments Credit against Royalty Payments.

[*] percent ([*%]) of each Sales Milestone Payment (each a “Sales Milestone Credit”)
shall be credited against future payments under Section 9.3. PFIZER shall reduce the
royalty payments due in respect of the next Pfizer Quarter by the amount of the applicable Sales
Milestone Credit. To the extent any Sales Milestone Credit cannot be fully credited by reducing
the amount of the royalty payments due in respect of that next Pfizer Quarter, the royalty payments
due in respect of subsequent Pfizer Quarters shall be reduced by any remaining amount until the
applicable Sales Milestone Credit has been fully credited.

9.5 Duration of Royalty Payments.

Payments under Section 9.3 in respect of Net Sales for a Licensed Product in the Field
in a country in the Territory shall continue until the expiration of the Royalty Term in that
country for such Licensed Product in the Field; thereafter, the licenses granted under Section 7.1
with respect to such Licensed Product in such country shall be royalty-free and fully paid up,
perpetual and irrevocable.

Section 10 ACCOUNTING AND PROCEDURES FOR PAYMENT.

10.1 Inter-Company Sales.

Sales between or among PFIZER, its Affiliates or sub-licensees shall not be subject to
royalties under Section 9. Instead, only the first sale by PFIZER or its Affiliates or
sublicensees to a Third Party shall be used to calculate the Net Sales upon which the royalty
calculation is based. PFIZER shall be responsible for the payment of royalties on Net Sales by its
Affiliates or sublicensees to Third Parties.

10.2 Currency.

All royalty payments shall be computed and paid in United States dollars. For the purposes of
determining the amount of any Sales Milestone Payments or royalties due for the
relevant Pfizer Quarter, the amount of Net Sales in any foreign currency shall be converted into
United States dollars in a manner consistent with PFIZER’S normal practices used to prepare its
audited financial reports; provided that such practices use a widely accepted source of published
exchange rates.

 

	 	 	 
	*	 	Confidential treatment has been requested for the
redacted portions of this exhibit, and such confidential portions have been
omitted and filed separately with the Securities and Exchange Commission.

 

29

 

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10.3 Royalty Payments.

(a) PFIZER shall make royalty payments to ATHERSYS with respect to each Pfizer Quarter, within
sixty (60) days after the end of each calendar quarter, and each payment shall be accompanied by a
report identifying the applicable Pfizer Quarter for each Licensed Product in the Field: (i) each
applicable country or, for those countries where PFIZER does not typically produce a
country-specific report, the applicable region in which Net Sales occurred; (ii) the gross sales
for the Licensed Product in each such country or such region; (iii) the Net Sales for the Licensed
Product for each such country or such region; (iv) the applicable royalty rate for the Net Sales
for the Licensed Product in each such country or such region; and (v) the amount of royalties
payable to ATHERSYS for the Licensed Product in each such country or such region, as well as the
computation thereof. Said reports shall be kept confidential by ATHERSYS and not disclosed to any
other party, other than ATHERSYS’s accountants which shall be obligated to keep such information
confidential, and such information and reports shall only be used for purposes of this Agreement.

(b) If Net Sales in any Pfizer Quarter during a given Pfizer Year are less than zero (as a
result of returns or recalls of Licensed Product in the Field or any other circumstance), then
PFIZER will not be obligated to pay ATHERSYS any royalties for such Pfizer Quarter, and for
purposes of calculating royalty payments with respect to the fourth Pfizer Quarter of such Pfizer
Year, Net Sales for such fourth Pfizer Quarter shall be reduced by the aggregate amount of negative
Net Sales in each Pfizer Quarter of such Pfizer Year in which Net Sales are less than zero. If, as
a result of such reduction, the aggregate Net Sales with respect to such fourth Pfizer Quarter are
less than zero, then, for purposes of calculating royalty payments with respect to the first or
subsequent Pfizer Quarters of the next succeeding Pfizer Year, Net Sales for such first Pfizer
Quarter and until any negative Net Sales have been fully exhausted any subsequent Pfizer Quarters
shall be reduced by the amount of negative Net Sales in the fourth Pfizer Quarter of the
immediately preceding Pfizer Year.

10.4 Method of Payments.

Each payment hereunder shall be made by electronic transfer in immediately available funds via
either a bank wire transfer, an ACH (automated clearing house) mechanism, or any other means of
electronic funds transfer, at PFIZER’s election, to such bank account as ATHERSYS shall designate
in writing to PFIZER at least five (5) Business Days before the payment is due.

10.5 Inspection of Records.

PFIZER shall, and shall cause its Affiliates and sublicensees to, keep accurate books and
records setting forth the, gross sales of each Licensed Product in the Field, Net Sales of each
such Licensed Product, amounts payable hereunder to ATHERSYS for each such Licensed Product and
other information reasonably required to verify the calculation of payments made under Section
10.3 and Schedule 3.2(c), provided that nothing in this Section 10.5 shall
require PFIZER to keep or create books, records or reports solely for
the purpose for this Section 10.5 or which PFIZER would not typically keep for the purpose

 

30

 

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of
determining and reporting royalties or profit sharing arrangements. PFIZER shall permit ATHERSYS,
by independent certified public accountants employed by ATHERSYS and reasonably acceptable to
PFIZER, to examine such books and records at any reasonable time, upon reasonable notice, but not
later than two (2) years following the rendering of the corresponding reports pursuant to
Section 10.3 and Schedule 3.2(c). The foregoing right of examination may be
exercised only once during each twelve (12)-month period of the Term and once during the two (2)
year period after the Term. PFIZER may require such accountants to enter into a reasonably
acceptable confidentiality agreement, and in no event shall such accountants disclose to ATHERSYS
any information, other than such as relates to the accuracy of the corresponding reports pursuant
to Section 10.3 and Schedule 3.2(c). The opinion of said independent accountants
regarding such reports and related payments shall be binding on the parties, other than in the case
of manifest error. ATHERSYS shall bear the cost of any such examination and review; provided that
if the examination shows an underpayment of royalties of more than five percent (5%) of the amount
due for the applicable period, then PFIZER shall promptly reimburse ATHERSYS for all costs incurred
in connection with such examination. PFIZER shall promptly pay to ATHERSYS the amount of any
underpayment of royalties revealed by an examination. Any overpayment of royalties by PFIZER
revealed by an examination shall be fully-creditable against future royalty payments under
Section 9.3.

Upon the expiration of the two (2) year period following the rendering of a royalty report
pursuant to Section 10.3, such report shall be binding on the parties, and PFIZER and its
Affiliates shall be released from any liability or accountability with respect to royalties for the
period covered by such report.

10.6 Tax Matters.

It is understood and agreed between the parties that any payments made by PFIZER under this
Agreement are inclusive of any value added or similar tax imposed upon such payments. In addition,
in the event any payments made by PFIZER pursuant to this Agreement become subject to withholding
taxes under the laws or regulation of any jurisdiction, PFIZER shall deduct and withhold the amount
of such taxes for the account of ATHERSYS to the extent required by applicable Law or regulations;
such amounts payable to ATHERSYS shall be reduced by the amount of taxes deducted and withheld; and
PFIZER shall pay the amounts of such taxes to the proper Governmental Authority in a timely manner
and promptly transmit to ATHERSYS an official tax certificate or other evidence of such tax
obligations together with proof of payment from the relevant Governmental Authority of all amounts
deducted and withheld sufficient to enable ATHERSYS to claim such payment of taxes. Any such
withholding taxes required under applicable Law or regulations to be paid or withheld shall be an
expense of, and borne solely by ATHERSYS . PFIZER will provide ATHERSYS with reasonable assistance
to enable ATHERSYS to recover such taxes as permitted by applicable Law or regulations.

 

31

 

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Section 11 PATENTS AND INFRINGEMENT.

11.1 Prosecution.

ATHERSYS will be responsible for filing, prosecuting and maintaining the Athersys Patent
Rights, at its own cost and expense. ATHERSYS shall consult and reasonably
cooperate with PFIZER with respect to any potentially patentable inventions within the Research
Program IPRs and Athersys Combination Product IPRs, including with respect to the content and
timing of filing any draft patent applications thereon. ATHERSYS shall consult with PFIZER
regarding countries in which to file any Athersys Patent Rights that (i) are based upon Research
Program IPRs or Athersys Combination Product IPRs, or (ii) are other Athersys Patent Rights that
are, at the relevant time, licensable or sublicensable for commercial purposes exclusively by
ATHERSYS or its Affiliates, and that claim, or are reasonably likely to claim, inventions
applicable to Licensed Products for use in the Field (such Athersys Patent Rights under (i) and
(ii) collectively, “Athersys Exclusive Patent Rights”), and that are to be filed subsequent
to the Effective Date. ATHERSYS shall promptly notify PFIZER of any new Athersys Patent Rights
that are, or any Athersys Patent Rights existing as of the Effective Date that become, Athersys
Exclusive Patent Rights under subsection (ii) of the preceding sentence.

11.2 Updates and Cooperation.

ATHERSYS will keep PFIZER informed of the status of the Athersys Patent Rights from time to
time and in any event promptly on PFIZER’s reasonable request, and will provide PFIZER with copies
of all substantive documentation submitted to, or received from, the patent offices in connection
with the Athersys Exclusive Patent Rights. With respect to any substantive submissions that
ATHERSYS is required to, or otherwise intends to, submit to a patent office, or any material
decision relating to prosecution of the Athersys Exclusive Patent Rights, ATHERSYS shall provide a
draft of such submission to PFIZER or inform PFIZER of such intended decision, reasonably in
advance of the deadline or of the intended filing date of such submission or such decision
effective date, for submission of such documentation. PFIZER shall have the right to review and
comment upon any such submission by ATHERSYS, or any intended decision, to a patent office and will
provide such comments, if any, reasonably in advance of the applicable deadline, intended filing
date or decision effective date. ATHERSYS shall reasonably consider all comments provided by
PFIZER and shall incorporate such comments unless ATHERSYS provides to PFIZER reasonable
justification for not doing so.

11.3 Maintenance.

ATHERSYS shall maintain, for the full life thereof, all patents under the Athersys Patent
Rights unless ATHERSYS, in its reasonable discretion decides otherwise for commercial reasons.
ATHERSYS will notify PFIZER of any decision not to file applications or any decision (i) not to
file applications for, or not to enter the national phase for a PCT patent application, or validate
a patent in a particular country, or (ii) to cease prosecution and/or maintenance of, or cease to
pay the expenses of prosecution or maintenance of, any Athersys Exclusive Patent Rights in any
country. ATHERSYS will provide such notice as soon as reasonably possible after its decision with
respect to any of the foregoing, and sufficiently before (a) any date on which it must offer the
right to prosecute to Angiotech, any licensor or any other party, and (b) any filing or payment due
date or any other due date that requires action to avoid abandonment of or loss of right to file
the patent or application, to enable PFIZER to consult with ATHERSYS regarding such decision and to
undertake any action it may be entitled to take hereunder, in connection with such Athersys
Exclusive Patent Rights. In such event, PFIZER shall, subject only to any rights granted to
Angiotech prior to the Effective Date, and any limitations in any relevant in-licenses, have the
right to
make the filing, or to continue the prosecution and maintenance of such Athersys Exclusive Patent
Rights at its expense, provided that (x) with respect to Athersys Exclusive Patent Rights
which are Research Program IPRs, ATHERSYS shall assign, free of charge, such Athersys Exclusive
Patent Rights to PFIZER and (y) with respect to any Athersys Exclusive Patent Rights included in
Schedule 1.83 such Athersys Exclusive Patent Rights shall no longer be part of that
Schedule.

 

32

 

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11.4 Notices.

ATHERSYS agrees that it will, and will cause its Affiliates to, (i) execute and file those
notices and other filings as PFIZER shall request be made to record the existence of the rights
granted hereunder, from time to time with the United States Patent and Trademark Office (or any
successor agency) or any analogous patent office in the Territory, to the extent such filings are
permitted in accordance with applicable Laws.

11.5 Patent Term Extensions.

PFIZER, subject to any rights granted to Angiotech prior to the Effective Date, shall have the
exclusive right, but not the obligation, to seek, in ABT’s name if so required, patent term
extensions, and supplemental protection certificates and the like available under Law, including 35
U.S.C. § 156 and applicable foreign counterparts, in any country in the Territory in relation to
the Athersys Exclusive Patent Rights. ATHERSYS and PFIZER shall cooperate in connection with all
such activities, and PFIZER, its agents and attorneys will give due consideration to all
suggestions and comments of ATHERSYS regarding any such activities, but in the event of a
disagreement between the parties, PFIZER will have final the final decision-making authority.

11.6 Third Party Royalty Obligations.

If PFIZER (a) reasonably determines in good faith that, in order to avoid infringement of any
patent not licensed hereunder, it is reasonably necessary to obtain a license from a Third Party in
order to make, use, sell, offer for sale, supply, cause to be supplied, or import a Licensed
Product in the Field in a country in the Territory and to pay a royalty or other consideration
under such license (including in connection with the settlement of a patent infringement claim), or
(b) shall be subject to a final court or other binding order or ruling requiring any payments,
including the payment of a royalty to a Third Party patent holder in respect of sales of any
Licensed Product in the Field in a country in the Territory, then, without limiting ATHERSYS’
obligations under Section 17.1(a) (if any), the amount of PFIZER’s royalty payments under
Section 9.3 with respect to Net Sales for such Licensed Product in such country shall be
reduced by the amount payable by PFIZER to such Third Party, provided, however, that in no event
will a deduction, or deductions, under this Section 11.6, in the aggregate, reduce any
royalty payment made by PFIZER in respect of Net Sales of such Licensed Product pursuant to
Section 9.3 in any Pfizer Year to less than [*] percent ([*%]) of Net Sales of
such Licensed Product for that Pfizer Year.

 

	 	 	 
	*	 	Confidential treatment has been requested for the
redacted portions of this exhibit, and such confidential portions have been
omitted and filed separately with the Securities and Exchange Commission.

 

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11.7 Third Party Infringement.

(a) Each party will promptly notify the other in the event of any actual, potential or
suspected infringement of a patent under the Athersys Patent Rights by any Third Party. Except as
provided in Section 11.7(b) and 11.9, PFIZER shall have the sole right, but not the
obligation, to institute litigation in connection with any infringement of the Athersys Exclusive
Patent Rights in the Field, and any such litigation shall be at PFIZER’s expense, subject to
ATHERSYS’ obligation to indemnify PFIZER for such expenses pursuant to Section 17 (if any);
provided that any recoveries resulting from such action relating to a claim of a Third Party
infringement, after deducting PFIZER’s out of pocket expenses (including counsel fees and expenses)
in pursuing such claim, will be deemed Net Sales. If required in order to establish standing,
ATHERSYS, upon request of PFIZER, agrees to timely commence or join in any such litigation, at
PFIZER’s expense, and in any event to cooperate with PFIZER at PFIZER’s expense. The parties shall
consult with respect to potential strategies for terminating such alleged or threatened
infringement without litigation and PFIZER may not enter into settlements, stipulated judgments or
other arrangements respecting such infringement without the prior written consent of ATHERSYS. No
settlement, stipulated judgment or other voluntary final disposition of a suit under this
Section 11.7 may be undertaken by PFIZER without the consent of ATHERSYS if such
settlement, stipulated judgment or other voluntary final disposition would require ATHERSYS to be
subject to an injunction, admit wrong-doing, make a monetary payment or would otherwise materially
adversely affect ATHERSYS’ rights under this Agreement or any of the Athersys Exclusive Patent
Rights.

(b) If PFIZER fails, pursuant to Section 11.7(a) to bring an action with respect to,
or to terminate, the Third Party infringement prior to the earlier of (i) one hundred and eighty
(180) days following the notice of alleged infringement; and (ii) ten (10) days before the time
limit, if any, set forth in the applicable Laws for the filing of such actions, then ATHERSYS shall
have the right, but not the obligation, to defend or institute litigation in connection therewith,
and any such litigation shall be at ATHERSYS’ expense; provided that any recoveries resulting from
such action relating to a claim of a Third Party infringement will be retained by ATHERSYS.
PFIZER, upon request of ATHERSYS, shall cooperate with ATHERSYS at ATHERSYS’ expense, but shall be
under no obligation to join in any such litigation. If PFIZER joins in such litigation, the
parties shall consult with respect to potential strategies for terminating such alleged or
threatened infringement without litigation. ATHERSYS may not enter into settlements, stipulated
judgments or other arrangements respecting such infringement without the prior written consent of
PFIZER if such settlement, stipulated judgment or other arrangement would require PFIZER to be
subject to an injunction, admit wrong-doing, make a monetary payment or would otherwise conflict
with the exclusive rights granted to PFIZER under this Agreement.

11.8 ANDA Filings.

If either party receives a notice under 21 U.S.C. §355(b)(2)(A)(iv) or 355(j)(2)(A)(vii)(IV)
(“Paragraph IV Notice”) or any supplements or comparable provisions relating to biologic
products (“ANDA Filing”) that are alleged to be equivalent to a Licensed Product in the
Field and for which an Athersys Exclusive Patent Right is listed in the FDA’s Orange Book, then it
shall provide a copy of such notice to the other party within two (2) Business Days after its
receipt thereof. PFIZER shall have the only right, but no obligation, to initiate patent
infringement litigation based on any ANDA Filing concerning any Athersys Exclusive Patent Rights in
connection with the Field, at its own expense. In order to establish
standing, ATHERSYS shall reasonably cooperate with PFIZER in any such litigation and shall timely
commence or join in any such litigations, at PFIZER’s request and expense.

 

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11.9 Validity and Enforceability Challenges Concerning Athersys Exclusive Patent Rights.

Each party shall promptly notify the other in the event of any legal or administrative action
by any Third Party involving an Athersys Exclusive Patent Right of which a party becomes aware,
including any nullity, revocation, re-examination or compulsory license proceeding. In the event
of an assertion of invalidity or unenforceability of Athersys Exclusive Patent Rights licensed
hereunder, ATHERSYS shall promptly advise PFIZER in writing of such assertion and of all relevant
facts and circumstances known to ATHERSYS pertaining to such assertion. Where such validity or
enforceability assertion is made in connection with a litigation under Section 11.7 or
11.8, or in a declaratory judgment action where a counterclaim for infringement is
subsequently made by PFIZER or ATHERSYS pursuant to Section 11.7, the party controlling
such litigation under Sections 11.7 or 11.8 shall have the right to control the defense of
such assertion. In all other instances, both parties shall thereafter consult and cooperate fully
to determine an appropriate course of action.

11.10 Compensation to Inventors/Third Party Licensing Athersys Patent Rights or Technology.

As between ATHERSYS and PFIZER, only ATHERSYS shall be responsible for any compensation and
any other payments due to the inventors or Third Party Licensors of Athersys Patent Rights,
Athersys Technology or to the ATHERSYS inventors of any Research Program IPRs or Athersys
Combination Product IPRs. As between ATHERSYS and PFIZER only PFIZER shall be responsible for any
compensation,and any other payments due to the inventors or PFIZER’s licensors, of any Pfizer
Technology or to the PFIZER inventors of any Research Program IPRs or Pfizer Combination Product
IPRs.

11.11 Trademarks.

The Licensed Product shall be sold in the Territory under trademark(s) selected solely by
PFIZER and marketed using logos, slogans, trade dress, domain names and other intellectual property
selected and owned by PFIZER (hereinafter collectively “Trademarks”). All Trademarks filed
in the Territory shall be owned by PFIZER and applications for registration of such Trademarks
shall be filed and prosecuted by PFIZER with reasonable assistance from ATHERSYS if necessary. All
costs of the filing of applications for registration of Trademarks in the Territory shall be borne
solely by PFIZER.

Section 12 CONFIDENTIALITY; PUBLICATION

12.1 Confidential Information.

(a) PFIZER and ATHERSYS each agree that during the Term and for seven (7) years thereafter, it
will keep confidential, and will cause its Affiliates to keep confidential, all of the other
party’s Confidential Information that is disclosed to it (including, in the case of ATHERSYS,
disclosed pursuant to ATHERSYS exercising its observation rights under this Agreement), or to any
of its Affiliates. PFIZER and ATHERSYS each agree to take such action, and to cause its Affiliates
to take such action, to preserve the confidentiality of Athersys Confidential Information and
Pfizer Confidential Information, respectively, as it
would customarily take to preserve the confidentiality of its own similar types of
confidential information.

 

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(b) Each of PFIZER, ATHERSYS and their respective Affiliates agree (i) to use ATHERSYS
Confidential Information and Pfizer Confidential Information, respectively, only as expressly
permitted in this Agreement and (ii) not to disclose ATHERSYS Confidential Information and Pfizer
Confidential Information, respectively, to any Third Parties under any circumstance without the
prior consent of the other party, except as expressly permitted in this Agreement.

(c) Notwithstanding anything to the contrary in this Section 12, PFIZER may disclose
ATHERSYS Confidential Information (i) to Governmental Authorities (A) to the extent desirable to
obtain or maintain INDs or Regulatory Approvals for any Licensed Product in the Field or
Combination Product in the Field within the Territory, and (B) in order to respond to inquiries,
requests or investigations relating to this Agreement; (ii) to outside consultants, contractors,
advisory boards, managed care organizations, and non-clinical and clinical investigators, in each
case to the extent desirable to develop, register, market or otherwise commercialise any Licensed
Product in the Field or exercise its rights under Sections 7.1 and/or 7.2; provided that
PFIZER shall obtain the same confidentiality obligations from such Third Parties as it obtains with
respect to its own similar types of confidential information; (iii) in connection with filing or
prosecuting Patent Rights as permitted by this Agreement; (iv) in connection with prosecuting or
defending litigation as permitted by this Agreement, provided that PFIZER shall use
reasonable efforts to limit the dissemination of such Confidential Information, including by use of
protective orders and the like, as PFIZER would use for its own similar types of confidential
information; (v) in connection with or included in scientific presentations and publications
relating to Licensed Products in the Field, including abstracts, posters, journal articles and the
like, and posting of results of, and other information about, clinical trials to clincialtrials.gov
or PhRMA websites, and (vi) to the extent necessary or desirable in order to enforce its rights
under this Agreement, provided that PFIZER shall use reasonable efforts to limit the dissemination
of such Confidential Information, including by use of protective orders and the like, as PFIZER
would use for its own similar types of confidential information.

(d) Notwithstanding anything to the contrary in this Section 12, ATHERSYS may disclose
Pfizer Confidential Information to: (i) Governmental Authorities in order to respond to inquiries,
requests or investigations relating to this Agreement; (ii) to outside consultants, contractors,
advisory boards, managed care organizations, and non-clinical and clinical investigators, in each
case to the extent required for ATHERSYS to fulfil any of its obligations under the Research Plan
or a Clinical Development Plan or desirable to exercise its rights under Section 7.4
provided that ATHERSYS shall obtain the same confidentiality obligations from such Third
Parties as it obtains with respect to its own similar types of confidential information; (iii) in
connection with prosecuting or defending litigation as permitted by this Agreement; provided that
ATHERSYS shall use reasonable efforts to limit the dissemination of such Confidential Information,
including by use of protective orders and the like, as ATHERSYS would use for its own similar types
of confidential information; (iv) to the extent necessary or desirable in order to enforce its
rights under this Agreement, provided that ATHERSYS shall use reasonable efforts to limit
the dissemination of such Confidential Information, including by use of protective orders and the
like, as ATHERSYS would use for its own similar types of confidential information; and (v) in
connection with
filings required by security regulations and the rules and regulations of any securities
exchanges upon which ATHERSYS’ securities are traded (e.g., Nasdaq); provided that ATHERSYS
shall use reasonable efforts to limit the dissemination of such Confidential Information, including
by use of protective orders and the like, as ATHERSYS would use for its own similar types of
confidential information.

 

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(e) If ATHERSYS is subject to a Change of Control, ATHERSYS will, and it will cause its
Representatives to, ensure that no Pfizer Confidential Information is released to (i) any Affiliate
of ATHERSYS that becomes an Affiliate as a result of the Change of Control or (ii) any
Representatives of ATHERSYS (or of the relevant surviving entity of such Change of Control) who
become Representatives as a result of the Change of Control, unless such Representatives have
signed individual confidentiality agreements which include equivalent obligations to those set out
in this Section 12. If any Change of Control of ATHERSYS occurs, ATHERSYS shall promptly
notify PFIZER, share with PFIZER the policies and procedures it plans to implement in order to
protect the confidentiality of Pfizer Confidential Information prior to such implementation and
make any adjustments to such policies and procedures that are reasonably requested by PFIZER.

12.2 Publication.

ATHERSYS shall not, and shall cause, its Affiliate and its Affiliates’ employees, consultants,
contractors, licensees and agents not to publish or present any information with respect to any
Licensed Product in the Field or Combination Product in the Field without PFIZER’s prior written
consent (which may be withheld in its sole and final discretion), except as may be required by Law
or legal proceedings.

Notwithstanding the foregoing, ATHERSYS shall have the right to publish information generated
by ATHERSYS prior to the Effective Date with respect to any Licensed Product in the Field or
Combination Product in the Field subject to the following procedure. ATHERSYS shall provide to
PFIZER drafts of any proposed abstracts, manuscripts or presentations that cover such Licensed
Product or Combination Product at least thirty (30) days prior to ATHERSYS’s submission of such
proposed abstract, manuscript or summary for publication or presentation. PFIZER shall be
permitted to review and comment on such drafts, and shall designate a person who shall be
responsible for approving such publications. Such designated person shall respond promptly, and in
no event later than twenty (20) days after receipt of the proposed material, with either approval
of the proposed material or a specific statement of concern. If a statement of concern is
submitted, ATHERSYS agrees not to submit such publication or to make such presentation that
contains such information until PFIZER is able to resolve any issues (not to exceed forty-five (45)
days following such statement of concern). With respect to any proposed abstracts, manuscripts or
summaries for publication or presentation by independent investigators or other Third Parties, such
materials shall be subject to review under the principles of this Section 12.2 to the
extent reasonable practicable.

 

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12.3 Publicity.

The form of public announcement of the execution of this Agreement is set forth on in
Schedule 12.3 attached hereto and shall be promptly disseminated following the execution of
this Agreement by both parties. Except as set forth in Section 12.2, neither Party may
make any public statement (written or oral), including in analyst meetings, concerning the terms
of,
or events related to, this Agreement or concerning any Licensed Product in the Field
including any Combination Product in the Field, except where such statement: (a) is required by
Law, the rules and regulations of any securities exchange upon which a party’s securities are
traded, or legal proceedings, (b) is required to be contained in a party’s financial statements
prepared in accordance with generally acceptable accounting principles in the United States, (c)
has been announced previously in accordance with this Section 12.3, or (d) has been
announced previously by a party, so long as, in the case of (c) or (d), such public statement is
consistent with such previously announced statement. In the case of any public statement (written
or oral) that is required by Law or legal proceedings, the disclosing party shall (i) use
commercially reasonable efforts to obtain confidential treatment of financial and trade secret
information, and (ii) if reasonably practicable under the circumstances, give the other party
sufficient advance notice of the text so that such other party will have the opportunity to comment
upon the statement, and give due consideration to any such comments in the final statement. The
parties will work together to establish a mutually agreed plan for publicizing activities and
developments under this Agreement.

12.4 Filing, Registration or Notification of the Agreement.

The parties shall promptly following the Effective Date and in any event within forty five
(45) days of the Effective Date agree a redacted form of this Agreement (the “Redacted
Agreement”) which will then be deemed included in this Agreement at Schedule 12.4. If a
party determines that it is required by Law to publicly file, register or notify this Agreement
with a Governmental Authority, such party shall (i) initially file the Redacted Agreement, (ii)
request, and use commercially reasonable efforts to obtain, confidential treatment of all terms
redacted from this Agreement, as reflected in the Redacted Agreement, for the maximum period
permitted by such Governmental Authority, (iii) permit the other party to review and approve such
request for confidential treatment and any subsequent correspondence with respect thereto at least
five (5) Business Days prior to its submission to such Governmental Authority, (iv) promptly
deliver to the other party any written correspondence received by it or its representatives from
such Governmental Authority with respect to such confidential treatment request and promptly advise
the other party of any other communications between it or its representatives with such
Governmental Authority with respect to such confidential treatment request, (v) upon the written
request of the other party, request an appropriate extension of the term of the confidential
treatment period, and (vi) if such Governmental Authority requests any changes to the redactions
set forth in the Redacted Agreement, use commercially reasonable efforts to support the redactions
in the Redacted Agreement as originally filed and shall not agree to any changes to the Redacted
Agreement without first discussing such changes with the other party and taking the other party’s
comments into consideration when deciding whether to agree to such changes. Each party shall be
responsible for its own legal and other external costs in connection with any such filing,
registration or notification.

 

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Section 13 REPRESENTATIONS AND WARRANTIES

13.1 ATHERSYS Representations and Warranties.

As of the date hereof and as of the Effective Date of this Agreement, AI and ABT each jointly
and severally hereby represents and warrants to PFIZER as follows:

(a) ATHERSYS has the corporate power and authority to execute and deliver this Agreement and
to perform its obligations hereunder, and the execution, delivery and performance of this Agreement
by ATHERSYS have been duly and validly authorized and approved by proper corporate action on the
part of ATHERSYS, and ATHERSYS has taken all other action required by Law, its certificate of
incorporation, by-laws or other organizational documents or any agreement to which it is a party,
or to which it may be subject, required to authorize such execution, delivery and performance.
Assuming due authorization, execution and delivery on the part of PFIZER, this Agreement
constitutes a legal, valid and binding obligation of ATHERSYS, enforceable against ATHERSYS in
accordance with its terms.

(b) The execution and delivery of this Agreement by ATHERSYS and the performance by ATHERSYS
contemplated hereunder does not and will not violate any Laws or any order of any court or
Governmental Authority applicable to or binding upon ATHERSYS.

(c) To the knowledge of ATHERSYS, the patents and patent applications encompassed within the
Athersys Exclusive Patent Rights, are, or, upon issuance, will be, valid and enforceable patents
and no Third Party (i) is infringing any such patents relating to any MultiStem Product as of the
Effective Date or (ii) other than a Government Authority in the course of patent prosecution, is
challenging the patentability, validity or enforceability of any claims of any such patents or
patent applications (including by way of example through the institution or written threat of
institution of interference, nullity or similar invalidity proceedings before the United States
Patent and Trademark Office or any analogous foreign entity).

(d) To the knowledge of ATHERSYS, the manufacture, use, sale, offer for sale, supply or
importation by ATHERSYS or PFIZER (or their respective Affiliates) of any MultiStem Product or
Licensed Products existing, or any Clinical Development Candidate and Licensed Products in the
Field contemplated, at the Effective Date does not and will not infringe any issued valid claims of
any patent of any Third Party.

(e) Schedule 1.8 contains a complete and correct list of all patents and patent
applications owned or co-owned by or licensed to ATHERSYS (and indicating which entity owns or
co-owns each patent and patent application and under which Third Party License any such patents or
patent applications are licensed to ATHERSYS) relating to the Licensed Products.

(f) Except as otherwise set out in Schedule 1.8, ATHERSYS is the sole legal and
beneficial owner of all the ATHERSYS Patent Rights and ATHERSYS Technology, free of any lien,
encumbrance, charge, security interest, mortgage or other similar restriction and no person, firm,
corporation or other entity (including any Affiliate of ATHERSYS) has any right, interest or claim
in or to, and neither ATHERSYS nor any of its Affiliates has entered into any agreement granting
any right, interest or claim in or to, any ATHERSYS Patent Rights or ATHERSYS Technology to any
Third Party (including any academic organization or agency) that conflicts with or limits the
rights licensed to PFIZER under Sections 7.1 and 7.2.

(g) ATHERSYS has complied in all material respects with all applicable Laws, including any
disclosure requirements, in connection with the filing, prosecution and maintenance of the Athersys
Exclusive Patent Rights in the Territory.

 

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(h) Except as set out in Schedule 1.8 and to the best of ATHERSYS’ knowledge and
belief, none of the Athersys Patent Rights or Athersys Technology were developed with federal
funding from the United States government or any other Governmental Authority.

(i) ATHERSYS or, as applicable ATHERSYS’ licensor, has obtained or procured assignments, or an
obligation to assign, by contract, university policies or otherwise, from the inventors of all
inventorship rights relating to the Athersys Patent Rights, and all such assignments of
inventorship rights relating to the Athersys Patent Rights are valid and enforceable.

(j) The agreements listed in Schedule 1.8 as heretofore delivered by ATHERSYS to
PFIZER represent the complete agreement and understanding between the respective Third Parties and
ATHERSYS relating to the Athersys Patent Rights and Athersys Technology which are the subject of
those agreements. The agreements listed in Schedule 1.8 have not been modified,
supplemented or amended, other than by amendments thereto provided to PFIZER prior to the execution
date of this Agreement or as required in writing by ATHERSYS, PFIZER and the relevant Third Party
in connection with the transactions contemplated by this Agreement. Except for the agreements
listed in Schedule 1.8, there are no agreements to which ATHERSYS or any of its Affiliates
is a party pursuant to which ATHERSYS or any of its Affiliates has a license, or an option to
obtain a license, or holds an immunity from suit, with respect to patents which (x) are pending,
applied for, granted or registered, and (y) but for ATHERSYS’s rights under such agreements, could
be asserted by third parties to be infringed by the development manufacture, distribution, use, or
sale of Licensed Products in the Field. ATHERSYS has previously delivered to PFIZER all of its
agreements with any Third Parties regarding supply and manufacture of all goods and services
relating to MultiStem Products none of which have been modified, supplemented or amended; (ii) the
Third Party Licenses are in full force and effect, all payments to date required to be made
thereunder by ATHERSYS have been made, and ATHERSYS is in compliance in all respects with its
respective obligations thereunder and (iii) ATHERSYS is not aware of any breach by other parties to
any Third Party License.

(k) Except pursuant to the Third Party Licenses and as otherwise set out in Schedule
1.8 none of the ATHERSYS Patent Rights or ATHERSYS Technology have been licensed or otherwise
made available (including pursuant to any immunity from suit arrangement) to ATHERSYS or any of its
Affiliates from a Third Party.

(l) ATHERSYS has heretofore disclosed to PFIZER all material scientific and technical
information and all information relating to safety and efficacy known to it, or its Affiliates,
with respect to the MultiStem Products and Licensed Products.

(m) ATHERSYS has heretofore disclosed to PFIZER all material correspondence and contact
information between ATHERSYS and the FDA and any other Governmental Authorities regarding the
MultiStem Products and Licensed Products.

(n) Neither the execution and delivery of this Agreement nor the performance hereof by
ATHERSYS or any of the Affiliates requires ATHERSYS to obtain any permits,
authorizations or consents from any Governmental Authority or from any other person, firm or
corporation, and such execution, delivery and performance will not result in the breach of or give
rise to any right of termination, rescission, renegotiation or acceleration under, or trigger any
other rights under, any agreement or contract to which ATHERSYS is a party or to which it may be
subject that relates to the ATHERSYS Patent Rights, the ATHERSYS Technology, the MultiStem
Products, Licensed Products or ATHERSYS’ obligations under this Agreement.

 

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(o) There is no action, claim, demand, suit, proceeding, arbitration, grievance, citation,
summons, subpoena, inquiry or investigation of any nature, civil, criminal, regulatory or
otherwise, in law or in equity, pending or, to the knowledge of ATHERSYS, threatened against
ATHERSYS, any of its Affiliates or any Third Party, in each case in connection with the ATHERSYS
Patent Rights, the ATHERSYS Technology or the MultiStem Products and Licensed Products which would
have a negative impact on the Research Program, any Clinical Development Plan or any other
obligation of ATHERSYS under this Agreement.

(p) ATHERSYS, its Affiliates or, to the best of ATHERSYS’ knowledge and belief, its Third
Party Licensors, have complied materially with all Laws, codes of practice, directions, guidance,
required licenses, permits and authorisations concerning health and safety, human tissue, clinical
trials and environmental procedures, protocols and systems applicable to the isolation,
purification, derivation, production, traceability, research, development and manufacture of the
MultiStem Products and Licensed Products and all such licenses, permits or authorisations in
relation to such Law are valid and subsisting and there are no circumstances or grounds that would
lead a Governmental or Regulatory Authority to revoke, suspend or cancel such licenses, permits or
authorisations, or impose a penalty or that would result in any permit, license authorisation being
revoked, suspended, cancelled or not renewed.

(q) The MultiStem Products are not derived from embryonic sources.

(r) ATHERSYS is financially solvent, that is has sufficient funds on hand as of the Effective
Date, and sufficient capacity to obtain additional funds for the Initial Research Term, (including
pursuant to Section 8.1) to satisfy all of its obligations under this Agreement and to meet
any other payment obligations as they become due in the ordinary course of business.

13.2 PFIZER Representations and Warranties.

As of the date hereof and as of the Effective Date of this Agreement, PFIZER hereby represents
and warrants to ATHERSYS as follows:

(a) PFIZER has the corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder, and the execution, delivery and performance of this Agreement by
PFIZER have been duly and validly authorized and approved by proper corporate action on the part of
PFIZER, and PFIZER has taken all other action required by Law, its certificate of incorporation or
by-laws, or any agreement to which it is a party or to which it may be subject, required to
authorize such execution, delivery and performance. Assuming due authorization, execution and
delivery on the part of
ATHERSYS, this Agreement constitutes a legal, valid and binding obligation of PFIZER,
enforceable against PFIZER in accordance with its terms.

 

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(b) The execution and delivery of this Agreement by PFIZER and the performance by PFIZER
contemplated hereunder does not and will not violate any Laws or any order of any court or
Governmental Authority, except for such violations that would not have an adverse effect on the
ability of PFIZER to perform its obligation under this Agreement.

(c) Neither the execution and delivery of this Agreement nor the performance hereof by PFIZER
requires PFIZER to obtain any permits, authorizations or consents from any Governmental Authority
(other than any regulatory approvals relating to the manufacture, use, importation or sale of any
Licensed Product) or from any other person, firm or corporation, and such execution, delivery and
performance will not result in the breach of or give rise to any right of termination under any
agreement or contract to which PFIZER is a party or to which it may be subject, except for those
breaches or rights that would not adversely affect the ability of PFIZER to perform its obligations
under this Agreement.

(d) There is no action, claim, demand, suit, proceeding, arbitration, grievance, citation,
summons, subpoena, inquiry or investigation of any nature, civil, criminal, regulatory or
otherwise, in law or in equity, pending or, to the knowledge of PFIZER, threatened against PFIZER
or any of its Affiliates relating to the transactions contemplated by this Agreement.

13.3 Disclaimer of Warranty.

EXCEPT AS OTHERWISE EXPRESSLY STATED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATION
OR WARRANTY OF ANY KIND WITH RESPECT TO COMPOUNDS, DEVICES, LICENSED PRODUCTS, ATHERSYS PATENT
RIGHTS, OR ATHERSYS TECHNOLOGY, PFIZER TECHNOLOGY OR COMBINATION PRODUCT IPRS OR ANY OTHER SUBJECT
MATTER UNDER THIS AGREEMENT. EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION 13, EACH PARTY
EXPRESSLY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT.

Section 14 ADDITIONAL COVENANTS.

14.1 ATHERSYS shall not (and shall cause its Affiliates not to) license, sell, assign or otherwise
transfer to any person any ATHERSYS Patent Rights or any ATHERSYS Technology (or agree to do any of
the foregoing) in a manner that would conflict with the rights granted to PFIZER under Sections
7.1 and 7.2. In addition, ATHERSYS hereby covenants and agrees that ATHERSYS shall not incur
or permit to exist (and shall cause each of its Affiliates not to incur or permit to exist), with
respect to any ATHERSYS Patent Rights and/or Athersys Technology, any lien, encumbrance (other than
grants of licenses to Third Parties), charge, security interest, mortgage, liability, or other
restriction (including in connection with any indebtedness) without the prior written agreement of
PFIZER, such agreement not to be unreasonably withheld or delayed. ATHERSYS shall notify PFIZER
not less than thirty (30) days prior to granting any license to a Third Party of its intention to
grant
that license, giving PFIZER sufficient information as to the nature and scope of any proposed
license to be granted reasonably related to diseases or conditions in the area of immune system
dysfunction and modulation. ATHERSYS shall reasonably consider any comments provided by PFIZER
regarding such proposed license to a Third Party.

 

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14.2 ATHERSYS shall take all necessary steps to record the transfer in all relevant patent offices
of patent rights for [*] within thirty (30) days of the Effective Date.

14.3 ATHERSYS shall promptly following the Effective Date obtain or procure assignments from the
inventors of all inventorship rights relating to the Athersys Exclusive Patent Rights and shall
promptly obtain or procure any outstanding assignments from all inventors of all inventorship
rights relating to any other Athersys Patent Rights on PFIZER’s request.

14.4 ATHERSYS, without the prior written consent of PFIZER such agreement not to be unreasonably
withheld or delayed,(a) shall not execute or otherwise permit, and shall cause its Affiliates to
refrain from executing or otherwise permitting, any amendment, modification or waiver to any of the
Third Party Licenses, (b) shall not make any election or exercise any right or option (or omit to
take any action) which would, and shall cause its Affiliates to refrain from making any election or
exercising any right or option (or omitting to take any action) which would, terminate or
relinquish in whole or in part any right under a Third Party License, or (c) shall comply, and
shall cause its Affiliates to comply in all respects, with all of its, and its Affiliates’,
obligations under the Third Party Licenses. ATHERSYS shall take, and shall cause its Affiliates to
take, such actions as shall be necessary to keep in full force and effect the Third Party Licenses
and shall give prompt notice to PFIZER, together with a detailed summary of outstanding issues if
PFIZER so requests, of any notice received from the Third Party to the Third Party License, of any
actual or alleged defaults, breaches, or violations, proposed exercise of any Third Party rights or
of any proposed amendments or proposed modifications of, or any proposed waivers under, any of the
Third Party Licenses by any of the parties thereto that ATHERSYS is willing to accept.

14.5 Each of ATHERSYS and PFIZER shall conduct, and shall use reasonable efforts to cause its
Affiliates to conduct, all its activities contemplated under this Agreement in accordance with all
applicable Laws of the country in which such activities are conducted.

14.6 Without limiting the generality of Section 14.5, each party and its Representatives
shall comply materially with all Laws, codes of practice, directions, guidance, permits, licenses
and authorisations concerning health and safety, human tissue, clinical trials and environmental
procedures, protocols and systems applicable to the isolation, purification, derivation,
production, traceability, research, development and manufacture of the Licensed Products and shall
not take any action or omit to take any action which would lead a Governmental or Regulatory
Authority to revoke, suspend or cancel any licences, permits or authorisations in relation to such
Law or to impose a penalty or that would result in any permit, license or authorisation, being
revoked, suspended, cancelled or not renewed.

14.7 From and after the date hereof, ATHERSYS shall, upon reasonable notice from PFIZER, provide
PFIZER and its Representatives with reasonable access, during regular
business hours, to (a) all information concerning Licensed Products in the Field, ATHERSYS Patent
Rights and/or Athersys Technology and (b) all employees of ATHERSYS or its Affiliates who possess
any information described in clause (a) of this Section 14.7; in each case (a) and (b), to
the extent reasonably necessary for PFIZER to exercise the rights granted to it under this
Agreement.

 

	 	 	 
	*	 	Confidential treatment has been requested for the
redacted portions of this exhibit, and such confidential portions have been
omitted and filed separately with the Securities and Exchange Commission.

 

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14.8 ATHERSYS shall promptly provide to PFIZER, and keep PFIZER up-to-date in respect of, all
information relating to MultiStem Products outside the Field, planned interactions with Regulatory
Authorities (or correspondence received) that will or may affect the material quality or safety
profile for Licensed Products. PFIZER shall have the right to review and comment upon such
information and ATHERSYS shall reasonably consider all comments provided by PFIZER and any
differences of opinion shall be submitted to the Co-Chairs of the Development & Regulatory
Committee for further discussion provided that this covenant shall not apply as regards any
such information in respect of which ATHERSYS requires consent to disclose from Angiotech, until
such consent has been obtained. ATHERSYS shall promptly following the Effective Date, and using
commercially reasonable efforts, procure the consent of Angiotech to disclosure by ATHERSYS to
PFIZER of information pursuant to this Section 14.8.

14.9 Without prejudice to the obligations in Section 3.6 (c) PFIZER shall promptly provide
to ATHERSYS, and keep ATHERSYS up-to-date in respect of, all information relating to Licensed
Products inside the Field, planned interactions with Regulatory Authorities (or correspondence
received) that will or may affect the material quality or safety profile for Licensed Products.
ATHERSYS shall have the right to review and comment upon such information and PFIZER shall
reasonably consider all comments provided by ATHERSYS and any differences of opinion shall be
submitted to the Co-Chairs of the Development & Regulatory Committee for further discussion.

Section 15 TERM

This Agreement shall be effective as of the Effective Date and shall, unless earlier
terminated in accordance with Section 16, remain in effect until the expiration of the
last-to-expire Royalty Term.

Section 16 TERMINATION

16.1 Termination Rights.

This Agreement may be terminated as follows:

(a) If either PFIZER or ATHERSYS materially breaches or materially defaults in the performance
or observance of any of its respective obligations under this Agreement, and such breach or default
is not cured within ninety (90) days after the giving of written notice by the other party
specifying such breach or default, then such other party shall have the right to terminate this
Agreement by providing the breaching party written notice within ten (10) days following the
expiration of such ninety (90)-day period (such termination to be effective upon receipt of such
termination notice). For the purpose of this Section 16.1(a), a material breach or
material default shall include a material inaccuracy in any warranty or representation contained
herein.

 

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(b) PFIZER may terminate this Agreement within thirty (30) days of giving written notice to
ATHERSYS if: (i) ATHERSYS is unable at any time during the Research Term to appoint a Suitably
Qualified Person to a Key Role following the resignation or other departure of the person to whom
that Key Role was previously assigned and that Key Role remains unassigned to a Suitably Qualified
Person for [*] or longer; or (ii) [*] or more of the employees of ATHERSYS or its
Affiliates performing work under a Research Plan during the Initial Research Term cease within any
[*] period to work on the Research Program performing the activities assigned to them under a
Research Plan or a Clinical Development Plan or (iii) a Stand-By Licence between PFIZER, the
University of Minnesota and ATHERSYS comes in to force due to a termination by the University of
Minnesota of its license with ATHERSYS (or its Affiliates).

(c) PFIZER may terminate this Agreement immediately on written notice to ATHERSYS in the event
of a Change of Control of AI or ABT that results in AI or ABT being controlled by any entity which
has a market capitalization of between [*] to [*] US dollars or the equivalent value of cash in
hand; provided, that any such notice must be given by PFIZER within forty five (45) days of
PFIZER being notified by ATHERSYS in writing after the Change of Control of AI or ABT.

(d) At any time and for any reason, PFIZER, upon sixty (60) days’ written notice to ATHERSYS,
shall have the right, at PFIZER’s sole discretion, to terminate this Agreement, such termination to
be effective upon the expiration of such sixty (60)-day period.

(e) ATHERSYS shall have the right to terminate this Agreement if Milestone Event 3 has not
occurred within the later of (i) [*] following the end of the Research Term and (ii) [*] following
completion of a successful ‘proof of concept’ clinical study, being a clinical study initiated
during the Research Term which sufficiently establishes the effectiveness of a Licensed Product for
the Pilot or Major Indication in patients to set a dosing regimen for use in a Phase III Clinical
Study.

(f) If ATHERSYS reasonably believes that PFIZER has failed to satisfy its obligations to use
Commercially Reasonable Efforts to progress, pursuant to the Research Plan and applicable Clinical
Development Plan, a Licensed Product to Launch in the Territory (“Diligence Requirement”),
ATHERSYS shall so notify PFIZER in writing and PFIZER shall then have one hundred and twenty (120)
days to reasonably demonstrate it has satisfied its Diligence Requirement, failing which ATHERSYS
may terminate this Agreement on giving PFIZER not less than one hundred and eighty (180) days
notice.

16.2 Accrued Obligations.

Expiration or termination of this Agreement for any reason (x) shall be without prejudice to
ATHERSYS’s right to receive all payments accrued prior to the effective date of such termination in
accordance with the provisions of Sections 8, 9 and 10, as applicable, and to any other remedies
that either party may otherwise have and (y) shall not release a party hereto from any
indebtedness, liability or other obligation incurred hereunder by such party prior to the date of
termination or expiration.

 

	 	 	 
	*	 	Confidential treatment has been requested for the
redacted portions of this exhibit, and such confidential portions have been
omitted and filed separately with the Securities and Exchange Commission.

 

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16.3 Effects of Termination.

(a) Upon any termination of this Agreement by ATHERSYS pursuant to Section 16.1 all
licenses and rights granted herein to PFIZER shall terminate, other than the license granted to
PFIZER in Section 7.2 (a) and (c), licenses for a Licensed Product in a country that become
perpetual pursuant to Section 9.5, and otherwise as specifically provided below.

(b) In addition, if ATHERSYS terminates this Agreement under Section 16.1 or if PFIZER
terminates this Agreement under Section 16.1(d), PFIZER shall, promptly after such
termination, (i) transfer to ATHERSYS ownership of all investigator’s brochures, regulatory filings
and Regulatory Approvals that relate solely to Licensed Products, (ii) deliver to ATHERSYS all
pre-clinical and clinical data and information in PFIZER’s possession or control relating solely to
Licensed Products, including for clarity manufacturing data, if any (subject to the last sentence
of this Section 16.3), in the same form in which PFIZER maintains such data; and (iii)
deliver to ATHERSYS, in the same form in which PFIZER maintains such items, copies of all reports,
records, regulatory correspondence and other materials in PFIZER’s possession or control relating
solely to the pre-clinical and clinical development of Licensed Products, including, if applicable,
any information contained in the global safety database established and maintained by PFIZER;
provided that the parties agree that any good faith failure by PFIZER to provide immaterial data,
information, reports, records, correspondence or other materials to ATHERSYS shall not be a breach
of PFIZER’s obligations under this Section 16.3.

(c) Following termination of this Agreement pursuant to Section 16.1: (i) each of
PFIZER and ATHERSYS shall, upon request of the other party, return or destroy all ATHERSYS
Confidential Information and Pfizer Confidential Information, respectively, disclosed to it
pursuant to this Agreement, including all copies and extracts of documents, as promptly as
practicable following receipt of such request, except that one (1) copy may be kept for the purpose
of complying with continuing obligations under this Agreement and ATHERSYS shall not be required to
destroy any information transferred or delivered to ATHERSYS by PFIZER pursuant to Section
16.3(b).

(d) Upon termination of this Agreement by PFIZER pursuant to Sections 16.1(a), (b) or (c)
the licenses granted by ATHERSYS to PFIZER pursuant to Sections 7.1 and 7.2 will remain in full
force and effect in accordance with their respective terms, and any amounts payable by PFIZER to
ATHERSYS pursuant to Section 3.2(c) and Schedule 3.2(c) or Sections 9.1, 9.2 or 9.3 shall
remain in effect in accordance with and subject to the provisions of Sections 9 and 10 (along with
such other Sections as applicable) provided, however, that where PFIZER terminates this
Agreement pursuant to Sections 16.1(a) or (b), any amounts payable by PFIZER to ATHERSYS
pursuant to Section 3.2(c) and Schedule 3.2(c) or Sections 9.1, 9.2 or 9.3 shall each be
reduced to [*] percent ([*%]) of the amount that would otherwise have been payable under
the terms of the Agreement during the Term.

(e) If this Agreement is terminated by PFIZER pursuant to Section 16.1(d) during the
Research Term, PFIZER shall remain under an obligation to provide the research funding set out in
Section 8 until the expiry of the Research Term.

16.4 Survival

The provisions of Sections 3.2(c), 6, 7.4, 9.5, 10, 11 (so long as any of PFIZER’s licenses
survive termination in accordance with Section 16.3), 12, 16.2, 16.3, 16.4, 17, 18, and 19
and Schedules 1.45, 2.7 and 3.2(c), as applicable, (as well as any other Sections and Schedules
or defined terms referred to in such Sections and Schedules are necessary to give them effect)
shall survive termination or expiration of this Agreement and remain in force until discharged in
full. Furthermore, any other provisions required to interpret and enforce the parties’ rights and
obligations or to wind up their outstanding obligations under this Agreement shall survive to the
extent required.

 

	 	 	 
	*	 	Confidential treatment has been requested for the
redacted portions of this exhibit, and such confidential portions have been
omitted and filed separately with the Securities and Exchange Commission.

 

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16.5 Bankruptcy.

All rights and licenses granted under or pursuant to this Agreement by ATHERSYS are, and shall
otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of
rights to “intellectual property” as defined under Section 101 of the U.S. Bankruptcy Code. The
parties agree that PFIZER, as licensee of intellectual property under this Agreement, shall retain
and may fully exercise all of its rights and elections under the U.S. Bankruptcy Code. The parties
further agree that in the event of a rejection of this Agreement by either AI or ABT in any
bankruptcy proceeding by or against AI or ABT under the U.S. Bankruptcy Code, (i) PFIZER shall be
entitled to a complete duplicate of (or complete access to, as appropriate) any such intellectual
property and all embodiments of such intellectual property, which, if not already in Pfizer’s
possession, shall be promptly delivered to it upon Pfizer’s written request therefore, and (ii)
neither AI or ABT shall interfere with PFIZER’s rights to intellectual property and all embodiments
of intellectual property, and shall assist and not interfere with PFIZER in obtaining intellectual
property and all embodiments of intellectual property from another entity. The term “embodiments”
of intellectual property includes all tangible, intangible, electronic or other embodiments of
rights and licenses hereunder, including all compounds and products embodying intellectual
property, Licensed Products, filings with Regulatory Authorities and related rights, and
technology.

Section 17 INDEMNIFICATION

17.1 Indemnification.

(a) ATHERSYS will indemnify, defend and hold PFIZER and PFIZER’s Representative, harmless from
any and all Losses (as defined below) incurred by any of them as a result of:

i. the breach of any covenant, warranty or representation made by ATHERSYS under this
Agreement;

ii. the negligence, recklessness, or wilful misconduct of ATHERSYS or any of its
Representatives; or

iii. any acts or omissions of ATHERSYS or any of its Representatives in connection with the
research, development or commercialization of Licensed Products prior to or after the Effective
Date or following termination in whole or in part of this Agreement and the reversion of the
applicable rights hereunder to ATHERSYS in accordance with Section 16.3.

ATHERSYS shall only be obligated to so indemnify, defend and hold PFIZER and PFIZER’s
Representatives harmless to the extent that such Losses do not arise from (i) the breach of any
covenant, warranty, or representation made by PFIZER under this Agreement, or (ii) the negligence,
recklessness or wilful misconduct of PFIZER or any of its Representatives.

 

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(b) PFIZER will indemnify, defend and hold ATHERSYS and ATHERSYS’ Representatives, harmless
from any and all Losses incurred by any of them as a result of:

i. the breach of any covenant, warranty or representation made by PFIZER under this Agreement;

ii. the negligence, recklessness, or wilful misconduct of PFIZER or any of its
Representatives; or

iii. any acts or omissions of PFIZER or any of its Representatives in connection with the
research, development or commercialization of Licensed Products during the Term.

PFIZER shall only be obligated to so indemnify, defend and hold ATHERSYS and ATHERSYS’
Representatives harmless to the extent that such Losses do not arise from (i) the breach of any
covenant, warranty or representation made by ATHERSYS under this Agreement or (ii) the negligence,
recklessness or wilful misconduct of ATHERSYS or any of its Representatives.

17.2 Losses.

For purposes of this Agreement, “Losses” shall mean any and all costs, expenses,
claims, losses, liabilities, damages, fines, royalties, governmental penalties or punitive damages,
deficiencies, interest, settlement amounts, awards, and judgments, including any and all
reasonable, out-of-pocket costs and expenses properly incurred as a result of a claim (including
reasonable, out-of-pocket attorneys’ fees and all other expenses reasonably incurred in
investigating, preparing or defending any litigation or proceeding, commenced or threatened), in
each case, net of any tax benefit or insurance recovery received in connection with any of the
foregoing.

17.3 Defense Procedures; Procedures for Third Party Claims.

In the event that any Third Party (in no event to include any Affiliate of any of the parties)
asserts a claim with respect to any matter for which a party (the “Indemnified Party”) is
entitled to indemnification hereunder (a “Third Party Claim”), then the Indemnified Party
shall promptly notify the party obligated to indemnify the Indemnified Party (the “Indemnifying
Party”) thereof; provided, however, that no delay on the part of the Indemnified Party in
notifying the Indemnifying Party shall relieve the Indemnifying Party from any obligation hereunder
unless (and then only to the extent that) the Indemnifying Party is prejudiced thereby.

(a) Subject to PFIZER’s right to control the defense of actions described in Sections
11.7, 11.8 and 11.9 (even where ATHERSYS is the Indemnifying Party), the Indemnifying Party
shall have the right, exercisable by notice to the Indemnified Party within ten (10) Business Days
after receipt of notice from the Indemnified Party of the commencement of or assertion of any Third
Party Claim, to assume direction and control of the defense, litigation, settlement, appeal or
other disposition of the Third Party Claim (including the right to settle the claim solely for
monetary consideration) with counsel selected by the Indemnifying Party and reasonably acceptable
to the Indemnified Party; provided that (i) the Indemnifying Party has sufficient financial
resources, in the reasonable judgment of the Indemnified Party, to satisfy the amount of any
adverse monetary judgment
that is sought, (ii) the Third Party Claim seeks solely monetary damages and (iii) the
Indemnifying Party expressly agrees in writing that as between the Indemnifying Party and the
Indemnified Party, the Indemnifying Party shall be solely obligated to satisfy and discharge the
Third Party Claim in full (the conditions set forth in clauses (i), (ii) and (iii) above are
collectively referred to as the “Litigation Conditions”).

 

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(d) Within ten (10) Business Days after the Indemnifying Party has given notice to the
Indemnified Party of its exercise of its right to defend a Third Party Claim, the Indemnified Party
shall give notice to the Indemnifying Party of any objection thereto based upon the Litigation
Conditions. If the Indemnified Party reasonably so objects, the Indemnified Party shall continue
to defend the Third Party Claim, at the expense of the Indemnifying Party, until such time as such
objection is withdrawn. If no such notice is given, or if any such objection is withdrawn, the
Indemnifying Party shall be entitled, at its sole cost and expense, to assume direction and control
of such defense, with counsel selected by the Indemnifying Party and reasonably acceptable to the
Indemnified Party. During such time as the Indemnifying Party is controlling the defense of such
Third Party Claim, the Indemnified Party shall cooperate, and shall cause its Representatives to
cooperate upon request of the Indemnifying Party, in the defense or prosecution of the Third Party
Claim, including by furnishing such records, information and testimony and attending such
conferences, discovery proceedings, hearings, trials or appeals as may reasonably be requested by
the Indemnifying Party. In the event that the Indemnifying Party does not satisfy the Litigation
Conditions or does not notify the Indemnified Party of the Indemnifying Party’s intent to defend
any Third Party Claim within ten (10) Business Days after notice thereof, the Indemnified Party may
(without further notice to the Indemnifying Party) undertake the defense thereof with counsel of
its choice and at the Indemnifying Party’s expense (including reasonable, out-of-pocket attorneys’
fees and costs and expenses of enforcement or defense). The Indemnifying Party or the Indemnified
Party, as the case may be, shall have the right to join in (including the right to conduct
discovery, interview and examine witnesses and participate in all settlement conferences), but not
control, at its own expense, the defense of any Third Party Claim that the other Party is defending
as provided in this Agreement.

(e) The Indemnifying Party shall not, without the prior consent of the Indemnified Party,
enter into any compromise or settlement that commits the Indemnified Party to take, or to forbear
to take, any action. The Indemnified Party shall have the sole and exclusive right to settle any
Third Party Claim, on such terms and conditions as it deems reasonably appropriate, to the extent
such Third Party Claim involves equitable or other non-monetary relief, but shall not have the
right to settle such Third Party Claim to the extent such Third Party Claim involves monetary
damages without the prior written consent of the Indemnifying Party. Each of the Indemnifying
Party and the Indemnified Party shall not make any admission of liability in respect of any Third
Party Claim without the prior consent of the other party, and the Indemnified Party shall use
reasonable efforts to mitigate losses arising from the Third Party Claim.

 

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17.4 Disclaimer of Liability for Consequential Damages.

IN NO EVENT SHALL ANY PARTY OR ANY OF ITS RESPECTIVE AFFILIATES BE LIABLE UNDER THIS AGREEMENT
FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER IN CONTRACT,
WARRANTY, TORT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE, INCLUDING LOSS OF PROFITS OR REVENUE,
SUFFERED BY PFIZER, ATHERSYS OR ANY OF THEIR RESPECTIVE REPRESENTATIVES, EXCEPT (A) TO THE EXTENT
OF ANY SUCH DAMAGES PAID TO A THIRD PARTY IN CONNECTION WITH A THIRD PARTY CLAIM, AND (B) FOR
PURPOSES OF INDEMNIFICATION PURSUANT TO THIS SECTION 17, IN THE EVENT OF AN INTENTIONAL AND
WILFUL BREACH IN BAD FAITH OF ANY REPRESENTATION, WARRANTY, COVENANT OR AGREEMENT BY ATHERSYS OR
PFIZER (AS THE CASE MAY BE) CONTAINED IN THIS AGREEMENT; PROVIDED THAT THIS SECTION SHALL NOT
RELIEVE EITHER PARTY FROM ITS PAYMENT OBLIGATIONS UNDER THIS AGREEMENT. ADDITIONALLY, THE PARTIES
ACKNOWLEDGE AND AGREE THAT, NOTWITHSTANDING THE DILIGENT EFFORTS OF THE PARTIES, THE ACTIVITIES TO
BE CONDUCTED UNDER THE RESEARCH PROGRAM AND THE CLINICAL DEVELOPMENT PROGRAM ARE INHERENTLY
UNCERTAIN, AND THAT THERE ARE NO ASSURANCES THAT A LICENSED PRODUCT WILL BE SUCCESSFULLY DEVELOPED
AND COMMERCIALIZED.

17.5 SOLE REMEDY.

EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT AND EXCEPT FOR ANY EQUITABLE REMEDIES THAT MAY
BE AVAILABLE TO A PARTY, INDEMNIFICATION PURSUANT TO THIS SECTION 17 SHALL BE THE SOLE
AND EXCLUSIVE REMEDY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER LEGAL THEORY) AVAILABLE TO
ATHERSYS OR PFIZER FOR THE MATTERS COVERED THEREIN.

Section 18 GOVERNING LAW AND JURISDICTION

18.1 Governing Law.

This Agreement shall be governed by and construed in accordance with the substantive laws of
the State of New York, without regard to conflicts of law rules.

18.2 Jurisdiction.

With the exception of those matters referred for resolution by independent accountants under
Section 10.5, in the event of any controversy, claim or counterclaim arising out of or
relating to this Agreement, the parties shall first attempt to resolve such controversy or claim
through good faith negotiations for a period of not less than thirty (30) days following
notification of such controversy or claim to the other party. If such controversy or claim cannot
be resolved by means of such negotiations during such period, then such controversy or claim shall
be resolved by the United States District Court for the Southern District of New York or a local
court sitting in New York, New York (collectively, the “Courts”). Each party (a)
irrevocably submits to the exclusive jurisdiction in the Courts for purposes of any action, suit or
other proceeding relating to or arising out of this Agreement and (b) agrees not to raise any
objection at any time to the laying or maintaining of the venue of any such action, suit or
proceeding in any of the Courts, irrevocably waives any claim that such action, suit or other
proceeding has been brought in an inconvenient forum and further irrevocably waives the right to
object, with respect to such action, suit or other proceeding, that such Court does not have any
jurisdiction over such party.

 

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ATHERSYS hereby irrevocably designates, appoints and empowers its designated agent for service of
process as registered with the State of Delaware, as its true and lawful agent and attorney-in-fact
in its name, place and stead to receive and accept on its behalf service of process in any action,
suit or proceeding in the Courts with respect to any matters as to which it has submitted to
jurisdiction as set forth in the immediately preceding sentence.

Section 19 MISCELLANEOUS.

19.1 Force Majeure.

Neither party hereto shall be liable to the other party for any losses or damages attributable
to a default in or breach of this Agreement that is the result of war (whether declared or
undeclared), acts of God, revolution, acts of terror, fire, earthquake, flood, pestilence, riot,
enactment or change of Law (following the Effective Date), accident(s), labor trouble, or shortage
of or inability to obtain material equipment or transport or any other cause beyond the reasonable
control of such party; provided that if such a cause occurs, then the party affected will promptly
notify the other party of the nature and likely result and duration (if known) of such cause and
use commercially reasonable efforts to reduce the effect. If the event lasts for a period of
longer than three (3) months, the parties shall meet and discuss appropriate remedial measures.

19.2 Severability.

If and solely to the extent that any provision of this Agreement shall be invalid or
unenforceable, or shall render this entire Agreement to be unenforceable or invalid, such offending
provision shall be of no effect and shall not affect the validity of the remainder of this
Agreement or any of its provisions; provided, however, the parties shall use their respective
reasonable efforts to replace the invalid provisions in a manner that best accomplishes the
original intentions of the parties.

19.3 Waivers.

Any term or condition of this Agreement may be waived at any time by the party that is
entitled to the benefit thereof, but no such waiver shall be effective unless set forth in a
written instrument duly executed by or on behalf of the party or parties waiving such term or
condition. Neither the waiver by any party of any term or condition of this Agreement nor the
failure on the part of any party, in one or more instances, to enforce any of the provisions of
this Agreement or to exercise any right or privilege, shall be deemed or construed to be a waiver
of such term or condition for any similar instance in the future or of any subsequent breach
hereof. All rights, remedies, undertakings, obligations and agreements contained in this Agreement
shall be cumulative and none of them shall be a limitation of any other remedy, right, undertaking,
obligation or agreement.

 

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19.4 Entire Agreements; Amendments.

This Agreement sets forth the entire agreement and understanding between the parties as to the
subject matter hereof and supersedes all agreements or understandings, verbal or written, made
between ATHERSYS and PFIZER before the date hereof with respect to the
subject matter hereof, including the confidentiality agreement between the parties, dated
[*]. All ATHERSYS Confidential Information disclosed to PFIZER prior to the Effective
Date will be deemed to have been disclosed pursuant to this Agreement. None of the terms of this
Agreement shall be amended, supplemented or modified except in writing signed by the parties.

19.5 Construction

Except where expressly stated otherwise in this Agreement, the following rules of
interpretation apply to this Agreement: (i) “include”, “includes” and “including” are not limiting
and mean include, includes and including, without limitation; (ii) definitions contained in this
Agreement are applicable to the singular as well as the plural forms of such terms; (iii)
references to an agreement, statute or instrument mean such agreement, statute or instrument as
from time to time amended, modified or supplemented; (iv) references to a person are also to its
permitted successors and assigns; (v) references to an “Article”, “Section”, “Exhibit” or
“Schedule” refer to an Article or Section of, or any Exhibit or Schedule to, this Agreement unless
otherwise indicated; (vi) the word “will” shall be construed to have the same meaning and effect as
the word “shall”; and (vii) the word “any” shall mean “any and all” unless otherwise indicated by
context.

19.6 Assignment.

Neither this Agreement nor any rights or obligations of either party to this Agreement may be
assigned or otherwise transferred by either party without the consent of the other party; provided,
however, either party may, without such consent, assign or otherwise transfer this Agreement, in
whole or in part: (i) to any of its respective Affiliates, subject to Section 19.6(a) in
the case of ATHERSYS; provided that such assigning or transferring party shall remain
jointly and severally liable with such Affiliate in respect of all obligations so assigned; or (ii)
to a Third Party where a party or its Affiliate is required, or makes a good faith determination
based on advice of counsel, to divest any of the Licensed Products in order to comply with Law or
the order of any Governmental Authority as a result of a merger or acquisition; or (iii) in
connection with a Change of Control of ABT and/or AI (subject to Sections 12.1(e) and
16.1(c) thereafter).

(a) ATHERSYS and any Affiliate of ATHERSYS may sell, assign or otherwise transfer Athersys
Patent Rights and/or Athersys Technology applicable to Licensed Products in the Field solely to any
wholly-owned direct or indirect subsidiary of AI that (x) is and continues to be at all times
incorporated and domiciled (including with respect to principal headquarters) in any state of the
United States of America and (y) prior to any such sale, assignment or transfer to such person
described in clause (x), has acknowledged and confirmed in writing to PFIZER, all in a manner
reasonably acceptable to PFIZER, that, effective as of such sale, assignment or other transfer,
such transferee shall be bound by this Agreement as if it were a party to it as and to the
identical extent applicable to the transferor with respect to Athersys Patent Rights and Athersys
Technology.

(b) Any purported assignment in violation of this Section 19.6 shall be void. Any
permitted assignee shall assume all obligations of its assignor under this Agreement.

 

	 	 	 
	*	 	Confidential treatment has been requested for the
redacted portions of this exhibit, and such confidential portions have been
omitted and filed separately with the Securities and Exchange Commission.

 

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19.7 Independent Contractor.

The relationship between ATHERSYS and PFIZER is that of independent contractors. ATHERSYS and
PFIZER are not joint venturers, partners, principal and agent, employer and employee, and have no
other relationship other than independent contracting parties. The parties’ obligations and rights
in connection with the subject matter of this Agreement are solely and specifically as set forth in
this Agreement, and the parties acknowledge and agree that neither party owes the other any
fiduciary or similar duties or obligations by virtue of the relationship created by Agreement.
Without limiting the foregoing, the parties also acknowledge and agree that if a court of competent
jurisdiction or an arbitrator should determine that, notwithstanding the terms of this Section
19.7, that such fiduciary or similar duties or obligations exist, the parties hereby waive such
duties and obligations and agree not to assert or rely upon such duties or obligations in
connection with any dispute arising out of or relating to this Agreement.

19.8 Subcontracting.

ATHERSYS may subcontract any of its obligations under this Agreement, provided that it
furnishes the JSC with advance written notice thereof specifying the work to be subcontracted, and
with an opportunity to object to such subcontract for sound business reasons. Any dispute
regarding ATHERSYS’s use of a subcontractor shall be referred to the JSC, and any corresponding JSC
Dispute shall be resolved in accordance with Section 4.7. In any subcontract agreement
with a Third Party, ATHERSYS shall ensure that (i) that Third Party subcontractor is bound by
obligations of confidentiality no less stringent than those imposed on the parties under this
Agreement, (ii) all inventions, copyrightable subject matter, discoveries or materials created,
identified, conceived, reduced to practice or developed by the Third Party subcontractor in the
scope of its, his or her engagement with a party in connection with the subcontract agreement, and
in furtherance of the Research Program or the Clinical Development Program, are appropriately
documented and disclosed promptly to ATHERSYS, (iii) all such inventions, copyrightable subject
matter, discoveries or materials directly related to the Licensed Products shall be owned by
ATHERSYS unless otherwise approved by the JSC, (iv) shall (w) grant to ATHERSYS or its
representative a right to inspect the subcontractor’s relevant records and facilities; (x) require
the subcontractor to be in good standing with all applicable Regulatory Authorities; (y) require
the subcontractor to comply (as appropriate) with current good laboratory practices, current good
manufacturing laboratory practices and applicable Laws; and (z) require that the subcontractor has
no outstanding violations or citations that would or may impair the services or deliverables to be
provided to ATHERSYS by such subcontractor.

19.9 Notices.

Each communication and document made or delivered by one party to another under this Agreement
shall be made in the English language. All notices, consents, approvals, requests or other
communications required hereunder given by one party to the other hereunder shall be in writing and
made by registered or certified air mail, facsimile, express overnight courier or delivered
personally to the following addresses of the respective parties:

	 	 	 
	If to ATHERSYS:

	 	Athersys Inc.

3201 Carnegie Avenue

Cleveland, Ohio 44115 

Attention: President

Facsimile: +1-216-361-9495

 

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	with a copy to:
	

	 	Thomas A Briggs

Jones Day 

12265 El Camino Real, Suite 200

San Diego, CA 92130

Facsimile: +1 858-314-1200

	If to Pfizer: 

	 	Pfizer Global R&D Headquarters 

50 Pequot Avenue

New London, CT 06320

Attn: Head of Research, PGRD

Copy to: General Counsel, Pharma Therapeutics (PhTx) 

Pfizer Inc. 

235 East 42nd Street

New York NY USA 10017 

Facsimile [*]

Invoices should be sent to the attention of [*] (or the
Finance Lead, Pfizer Regenerative Medicine) at the following
address: 

[*] (or her designate)

Pfizer Ltd Finance

Ramsgate Road

Sandwich

Kent

CT13 9NJ 

Great Britain

And electronically to:

[*]

Notices hereunder shall be deemed to be effective (a) upon receipt if personally delivered,
(b) on the tenth (10th) Business Day following the date of mailing if sent by registered or
certified air mail; (c) on the second (2nd) Business Day following the date of transmission or
delivery to the overnight courier if sent by facsimile or overnight courier. A party may change
its address listed above by sending notice to the other party in accordance with this Section
19.9.

 

	 	 	 
	*	 	Confidential treatment has been requested for the
redacted portions of this exhibit, and such confidential portions have been
omitted and filed separately with the Securities and Exchange Commission.

 

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19.10 Third Party Beneficiaries

None of the provisions of this Agreement shall be for the benefit of or enforceable by any
Third Party, including any creditor of either party. No Third Party shall obtain any right
under any provision of this Agreement or shall by reason of any such provision make any claim
in respect of any debt, liability or obligation (or otherwise) against either party.

19.11 Binding Effect.

This Agreement shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, successors and permitted assigns.

19.12 Counterparts.

This Agreement may be executed in any two or more counterparts, each of which, when executed,
shall be deemed to be an original and all of which together shall constitute one and the same
document.

19.13 Headings.

Headings in this Agreement are included herein for ease of reference only and shall have no
legal effect. References to the parties, Sections, Schedules, and Exhibits are to the parties,
Sections, Schedules and Exhibits to and of this Agreement unless otherwise specified.

 

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IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed by their duly
authorized officers upon the date set out below.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	ATHERSYS	 	 	 	PFIZER	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	ATHERSYS INC	 	 	 	PFIZER INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ Gil Van Bokkelen	 	 	 	By:	 	/s/ Polly A. Murphy	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	Gil Van Bokkelen
	 	 	 	 	 	Name:
	 	Polly A. Murphy	 	 
	 

	 	Title:
	 	Chairman & CEO
	 	 	 	 	 	Title:
	 	Vice President	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	Worldwide Business Development	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	ABT HOLDING COMPANY	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ William O. Lehmann	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	William O. Lehmann	 	 	 	 	 	 	 	 	 	 
	 

	 	Title:
	 	President	 	 	 	 	 	 	 	 	 	 

 

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Schedule 1.8

ATHERSYS PATENT RIGHTS

[*]

 

	 	 	 
	*	 	Confidential treatment has been requested for the
redacted portions of this exhibit, and such confidential portions have been
omitted and filed separately with the Securities and Exchange Commission.

 

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Schedule 1.14

CLINICAL DEVELOPMENT PLAN(S)

[*]

 

	 	 	 
	*	 	Confidential treatment has been requested for the
redacted portions of this exhibit, and such confidential portions have been
omitted and filed separately with the Securities and Exchange Commission.

 

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Schedule 1.45

MATERIAL TRANSFER AGREEMENT FOR CONDUCT
 OF THE RESEARCH PLAN

Whereas, PFIZER INC, a Delaware corporation, having an office at 235 East 42nd Street,
New York, New York 10017 (“Pfizer”), and ATHERSYS INC, a Ohio corporation with offices located at
3201 Carnegie Avenue, Cleveland, Ohio 44115 (“AI”), ABT HOLDING COMPANY, a Delaware corporation and
having a offices located at 3201 Carnegie Avenue, Cleveland, Ohio 44115 (“ABT”), together referred
to in this Agreement as (“Athersys”) have entered into a COLLABORATION AND LICENSE AGREEMENT as of
December 18, 2009 (the “Agreement”); and

Whereas, Pfizer and Athersys have agreed, in accordance with the provisions of the Agreement,
including Section 2.9 thereto, to exchange and provide to one another samples of
biochemical, biological or synthetic chemical materials, other than clinical materials, and any
documents and information relating to the same for the purposes of progressing the Research Plan
(“Materials”).

Now, in consideration of the foregoing and the covenants and promises contained in the Agreement,
and in this Material Transfer Agreement (the “MTA”), the parties agree to the following terms and
conditions for the disclosure, control, use and protection of the Materials:

	1.	 	This MTA is effective of even date with the Agreement between the parties.

	2.	 	If there is any conflict between the terms of this MTA and the Agreement, the terms of the
Agreement will dominate. Unless specifically defined otherwise herein, any defined term used
in this MTA will have the meaning defined within the Agreement.

	3.	 	Either Athersys or Pfizer (a “Provider”) may deliver or have delivered to the other party (a
“Recipient”) Materials.

	4.	 	The Provider warrants to Recipient that Provider has the right to deliver to Recipient the
Materials. Provider hereby grants to Recipient and its Affiliates a license in accordance
with Section 7 of the Agreement to use the Materials, in each case solely for the
purpose of performing the Recipient’s obligations under the Research Plan.

	5.	 	Recipient accepts that Provider will have no responsibility for any injury (including injury
resulting in death, damage or loss related to the handling, use, making, manufacturing,
storage or disposal of the Materials. Recipient will hold harmless, indemnify and defend the
Provider, its Affiliates, licensees, officers, directors, employees, consultants, contractors,
sub-licensees and agents from and against any and all liabilities, claims, demands, damages,
losses and expenses, including reasonable attorneys’ fees and witness fees and costs, arising
from or relating to the use, storage or disposal of the Materials by, through or on behalf of
Recipient except to the extent caused by the negligence, recklessness or wilful misconduct of
the Recipient.

 

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	6.	 	Recipient will only allow those trained in handling similar materials in their assigned job
functions to handle Materials. Recipient assumes all responsibilities and risks in connection
with the handling, use, making, manufacturing, storage or disposal of Materials, and Recipient
shall comply with all applicable Laws, codes of practice, directions, guidance, permits,
licenses and authorisations concerning health and safety, human tissue, clinical trials and
environmental procedures, protocols and systems in connection with such activities.

	7.	 	Recipient understands and accepts that Materials have not been approved for human use and
agrees that Materials will not be administered to humans in any manner or form.

	8.	 	MATERIALS ARE EXPERIMENTAL IN NATURE AND ARE PROVIDED “AS IS” WITHOUT WARRANTY, EXPRESS OR
IMPLIED, INCLUDING WITHOUT LIMITATION, WARRANTY OF MERCHANTABILITY, FITNESS FOR PURPOSE AND
WARRANTY OF NON-INFRINGEMENT OF ANY PROPRIETARY RIGHT OF A THIRD PARTY. PROVIDED THAT NOTHING
IN THIS SECTION 8 REMOVES, QUALIFIES OR ALTERS ANY WARRANTIES GIVEN IN THE AGREEMENT.

	9.	 	Recipient will fully and promptly disclose any improvements and inventions arising from the
use of the Materials in accordance with the Agreement. Inventions made from the Materials
will be handled in accordance with the Agreement.

	10.	 	The results, and the rights and use of any intellectual property rights and any ownership
rights from use of results obtained with Materials will be governed by the Agreement.

	11.	 	The provision of any Materials will not alter any ownership or licensed rights Provider may
have obtained in or for the Materials or rights Provider has obtained to control the
Materials. Recipient undertakes that Materials will not be sold, transferred or otherwise
distributed to any third party or any employee or agent of Recipient who is not under
Recipient’s or its Affiliate’s direct supervision or subject to a written contract with
Recipient or its Affiliate.

	12.	 	Recipient undertakes that it will not attempt to reverse engineer, characterize, or ascertain
the chemical structure, genomic structure or other make-up of Materials, and agrees not to
make derivatives of, or perform experiments to determine the identity of, any of Materials
except as agreed to by the parties under the Research Plan.

	13.	 	Within thirty (30) days of written notice by Provider, Recipient will as directed by Provider
(a) return to Provider any remaining portion of Material or (b) destroy and properly dispose
of any remaining portion of Material in accordance with all applicable laws, regulations,
codes of practice and guidelines and certify in writing that it has done so.

	14.	 	If any part of this MTA is found by a court to be invalid or unenforceable, it will be deemed
modified to the extent necessary to allow enforcement, and all other portions of this MTA not
so modified will remain in full force and effect.

 

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	15.	 	This MTA shall b governed by and construed in accordance with the substantive laws of the
State of New York, without regard to conflicts of law rules.

	16.	 	This MTA may be executed in any two or more counterparts, each of which, when executed, shall
be deemed to be an original and all of which together shall constitute one and the same
document.

	17.	 	In the event of any controversy, claim or counterclaim arising out of or relating to this
MTA, the parties shall first attempt to resolve such controversy or claim through good faith
negotiations for a period of not less than thirty (30) days following notification of such
controversy or claim to the other party. If such controversy or claim cannot be resolved by
means of such negotiations during such period, then such controversy or claim shall be
resolved by the United States District Court for the Southern District of New York or a local
court sitting in New York, New York (collectively, the “Courts”). Each party (a)
irrevocably submits to the exclusive jurisdiction in the Courts for purposes of any action,
suit or other proceeding relating to or arising out of this Agreement and (b) agrees not to
raise any objection at any time to the laying or maintaining of the venue of any such action,
suit or proceeding in any of the Courts, irrevocably waives any claim that such action, suit
or other proceeding has been brought in an inconvenient forum and further irrevocably waives
the right to object, with respect to such action, suit or other proceeding, that such Court
does not have any jurisdiction over such party. Athersys hereby irrevocably designates,
appoints and empowers its designated agent for service of process as registered with the State
of Delaware, as its true and lawful agent and attorney-in-fact in its name, place and stead to
receive and accept on its behalf service of process in any action, suit or proceeding in the
Courts with respect to any matters as to which it has submitted to jurisdiction as set forth
in the immediately preceding sentence.

IN WITNESS WHEREOF, and intending to be bound, the parties have caused this Agreement to be
executed personally or by their duly authorized representatives, to be effective as of the
Effective Date:

	 	 	 	 	 	 	 	 	 	 	 
	Pfizer Inc.:	 	 	 	ABT Holding Company	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	 

	 	Name:
	 	 	 	 	 	Name:	 	 
	 

	 	Title:
	 	 	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	ATHERSYS INC.
	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 

	 	 	 	 	 	 	 	Name:	 	 
	 

	 	 	 	 	 	 	 	Title:	 	 

 

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Schedule 1.70

RESEARCH PLAN(S)

[*]

 

	 	 	 
	*	 	Confidential treatment has been requested for the
redacted portions of this exhibit, and such confidential portions have been
omitted and filed separately with the Securities and Exchange Commission.

 

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Schedule 1.82

THIRD PARTY LICENSES APPLICABLE TO ENTIRE AGREEMENT

[*]

 

	 	 	 
	*	 	Confidential treatment has been requested for the
redacted portions of this exhibit, and such confidential portions have been
omitted and filed separately with the Securities and Exchange Commission.

 

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Schedule 1.83

ATHERSYS PATENT RIGHTS FOR THE PURPOSES OF THE ROAYLTY TERM

[*]

 

	 	 	 
	*	 	Confidential treatment has been requested for the
redacted portions of this exhibit, and such confidential portions have been
omitted and filed separately with the Securities and Exchange Commission.

 

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Schedule 2.7

MULTISTEM CELLS REPOSITORY AND RELEASE CONDITIONS

1. CELL REPOSITORY OBLIGATIONS

1.1 ATHERSYS shall provide or procure that its Third Party manufacturer shall provide, to
PFIZER or its designated Third Party manufacturer and keep up to date a complete
manufacturing dossier, including all specifications, SOPs, testing reports, and other
information and materials which PFIZER would require to manufacture Clinical Development
Candidates and Licensed Products in the Field to the required manufacturing standards.

1.2 PFIZER shall or procure that its Affiliates or Third Party contractor shall maintain the
MultiStem cells transferred to it pursuant to Section 2.7 and all related
information and documentation, including the manufacturing dossier referred to in paragraph
1.1 above, in accordance with all specifications notified to it by ATHERSYS and in a secure
and suitably controlled environment, using security measures at least comparable to those
PFIZER uses for its own similar highly confidential biological and pharmaceutical materials
and otherwise reasonably under the circumstances.

1.3 In the event that the MultiStem cell repository held by or on behalf of PFIZER is lost,
damaged or destroyed, ATHERSYS shall provide promptly to PFIZER, at PFIZER’s cost,
replacement MultiStem cells of the type described in Section 2.7 of this Agreement.

1.4 ATHERSYS shall keep up to date the MultiStem Regulatory File provided to PFIZER pursuant
to Section 2.7 of this Agreement.

2. RELEASE CONDITIONS

2.1 [*]

2.2 Following the occurrence of a Release Condition:

[*]; and

[*]; and

 

	 	 	 
	*	 	Confidential treatment has been requested for the
redacted portions of this exhibit, and such confidential portions have been
omitted and filed separately with the Securities and Exchange Commission.

 

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2.2.3 ATHERSYS shall, and shall procure that its Third Party manufacturer shall, co-operate
with and assist, at PFIZER’s expense, PFIZER (pursuant to which PFIZER shall be entitled to
contact such Third Party manufacturer directly and share Athersys Confidential Information
with such Third Party) in exercising its rights to manufacture or have made the applicable
Clinical Development Candidate or
Licensed Product to ensure a smooth transition of the manufacture of such Clinical
Development Candidate or Licensed Product.

2.3 If at any time after PFIZER has exercised its right to manufacture or have made in
accordance with this Schedule, [*].

 

	 	 	 
	*	 	Confidential treatment has been requested for the
redacted portions of this exhibit, and such confidential portions have been
omitted and filed separately with the Securities and Exchange Commission.

 

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Schedule 3.2
(c)

CO-DEVELOPMENT COSTS AND PROFITS SHARING

1. “Clinical Development Costs” means, with respect to any Pfizer Quarter, the aggregate of
all costs incurred in performing the activities under a Clinical Development Plan (including
clinical Manufacturing Costs) for a Licensed Product, excluding corporate overhead.

(a) out-of-pocket costs and expenses incurred internally or to a Third Party in connection with all
development activities performed in accordance with a Clinical Development Plan, including
personnel costs, study costs, clinical supply costs, costs in connection with regulatory
submissions, and costs for process development of the manufacturing process for the Licensed
Product;

(b) Manufacturing Costs of products for clinical trials;

(c) such other out-of-pocket costs and expenses as the parties may agree upon in writing from time
to time; and

(d) a reasonable allocation of indirect costs associated with such direct costs not to exceed
[*] per cent ([*%]) thereof.

2. In the event that ATHERSYS elects to co-develop a Licensed Product pursuant to Section
3.2, Clinical Development Costs will be split [*%] for ATHERSYS and [*%] for PFIZER according
to the following procedure:

(a) Within fifteen (15) days following the end of each PFIZER Quarter, ATHERSYS shall submit to
PFIZER a written report setting forth in reasonable detail all Clinical Development Costs incurred
by ATHERSYS, if any, for the immediately preceding Pfizer Quarter.

(b) Within thirty (30) days following the end of each PFIZER Quarter, PFIZER shall submit to
ATHERSYS a written report setting forth in reasonable detail its estimate of all Clinical
Development Costs incurred by PFIZER, if any, for the immediately preceding Pfizer Quarter.

(c) Within forty five (45) days following the end of each PFIZER Quarter, PFIZER shall submit to
ATHERSYS a written report setting forth the final calculation of the total Clinical Development
Costs for that Pfizer Quarter and the net amount to be paid by ATHERSYS and PFIZER.

The net amount payable by a party shall be paid by PFIZER or ATHERSYS, as the case may be, to the
other party within fifteen (15) Business Days after receipt of such written report, without regard
to any dispute as to the amount to be paid thereunder.

 

	 	 	 
	*	 	Confidential treatment has been requested for the
redacted portions of this exhibit, and such confidential portions have been
omitted and filed separately with the Securities and Exchange Commission.

 

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3. If clinical development of the Licensed Product for the Field is successful, then ATHERSYS and
PFIZER shall split the Manufacturing and Commercialization Costs and Profits from commercialization
of the Licensed Product, [*%] for Athersys and [*%] for PFIZER as follows:

(a) “Profits” shall mean an amount calculated as follows:

Profits = Net Sales minus (Clinical Development Costs plus Manufacturing Costs plus
Commercialization Costs).

(b) “Commercialization Costs” means, with respect to the Licensed Product for the Field,
the following costs to the extent such costs are actually incurred, accounted for in accordance
with U.S. GAAP as consistently applied by the entity incurring such costs, attributable to the
marketing or sales of Licensed Product:

(i) direct costs that are exclusively incurred for (as opposed to allocated to) obtaining and
maintaining Regulatory Approvals, marketing, promotion, sales and distribution of Licensed Product,
including advertising and promotion expenses, such as for example, promotional material and goods,
print production/reprints, advertising agency fees, costs of key opinion leaders, advertising
space, direct mail, trade show expenses and free samples, conduct of Phase IV clinical studies,
conduct of primary and secondary market research, sales commissions and salaries, and distribution
costs;

(ii) costs relating to the packaging, labelling and release of the Licensed Product (to the
extent not included in Manufacturing Costs), warehouse, distribution and delivery of the Licensed
Product and conduct of recalls of the Licensed Product;

(iii) the amounts payable (if any) pursuant to Section 11.6;

(iv) any litigation costs incurred in respect of Third Party infringement of the Licensed
Product in the Field or any other legal or administrative action in connection with the Field
involving an Athersys Patent Right, Athersys Technology or Pfizer Combination Product IPR or
Trademark;

(v) such other out-of-pocket costs and expenses as the parties may agree upon in writing from
time to time; and

(vi) a reasonable allocation of indirect costs associated with the foregoing direct costs, not
to exceed [*] per cent ([*%]) of such direct costs.

(c) The parties’ respective Clinical Development Costs, Manufacturing and Commercialization Costs
will be covered with proceeds from Net Sales. Profits from Net Sales shall be shared by the
parties, based on the [*:*] Athersys: Pfizer split, adjusted for disproportionate cost sharing, as
illustrated with the following conceptual example, which assumes that all Clinical Development
Costs have been fully recovered by that Pfizer Quarter:

 

	 	 	 
	*	 	Confidential treatment has been requested for the
redacted portions of this exhibit, and such confidential portions have been
omitted and filed separately with the Securities and Exchange Commission.

 

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Actual Net Sales in a Pfizer Quarter 100

	 	 	 	 	 	 	 
	 	 	Athersys	 	Pfizer	 	Total
	Actual Costs
	 	 	 	 	 	 
	Manufacturing
	 	[*]	 	[*]	 	[*]
	Commercialization
	 	[*]	 	[*]	 	[*]
	Total Costs
	 	[*]	 	[*]	 	[*]
	 
	 	 	 	 	 	 
	Allocation %
	 	[*%]	 	[*%]	 	[*%]
	Allocated Costs
	 	[*]	 	[*]	 	[*]
	 
	 	 	 	 	 	 
	Allocated Profit Share
	 	[*]	 	[*]	 	[*]
	Adjustment to Profit
Share
	 	[*]	 	[*]	 	[*]
	Actual Profit Share
	 	[*]	 	[*]	 	[*]

(d) Within fifteen (15) days following the end of each Pfizer Quarter, ATHERSYS shall submit to
PFIZER a written report setting forth in reasonable detail all Clinical Development Costs,
Manufacturing Costs and Commercialization Costs incurred by ATHERSYS, if any, for the immediately
preceding Pfizer Quarter.

(e) Within thirty (30) days following the end of each Pfizer Quarter, PFIZER shall submit to
ATHERSYS a written report setting forth in reasonable detail its estimate of ATHERSYS’ share of
Profits (if any), separately for each Licensed Product that is the subject of Profit sharing
hereunder, the following information on a country by country basis for the immediately preceding
Pfizer Quarter:

(i) Gross Sales;

(ii) Net Sales;

(iii) Clinical Development Costs;

(iv) Manufacturing Costs;

(v) Commercialization Costs;

(vi) Profits;

(vii) The share of Profits earned by ATHERSYS for such quarter (including applicable
adjustments for cost sharing) provided that if Profits are negative for such quarter, then
ATHERSYS’ share of such negative amount shall be accrued and applied by PFIZER as an offset
against future ATHERSYS Profits for a Pfizer Quarter in which Profits are positive until
such negative amount has been fully recovered;

(viii) Any offset being applied due to one or more previous Pfizer Quarters with negative
Profits; and

 

	 	 	 
	*	 	Confidential treatment has been requested for the
redacted portions of this exhibit, and such confidential portions have been
omitted and filed separately with the Securities and Exchange Commission.

 

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(ix) The amount being paid to ATHERSYS or, if ATHERSYS’ running balance of Profits remains
negative after the foregoing calculations, the current value of such negative amount.

(f) Within forty five (45) days following the end of each Pfizer Quarter, PFIZER shall submit to
ATHERSYS a written report setting forth the final calculation of the amounts in paragraph 3(e) of
this Schedule 3.2(c) and the Profits or negative amounts to be paid or allocated (as
applicable) to ATHERSYS. The net amount payable to ATHERSYS shall be paid by PFIZER within fifteen
(15) Business Days after delivery of such written report, without regard to any dispute as to the
amount to be paid thereunder.

 

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Schedule 5.5

JSC RESPONSIBILITIES

In addition to its general responsibility to oversee and coordinate the activities of the
parties in connection with the Research Plans, Clinical Development Plans and this
Agreement, the JSC shall in particular:

	(a)	 	monitor the progress made by the parties in connection with the Research
Program(s) in a manner consistent with the corresponding Research Plans and this
Agreement, including reports prepared for the committee, the activities and resource
and personnel commitments of the parties;

	(b)	 	seeking management approval of each party for any subcontracts or sublicenses
to Third Parties for the conduct of any material activities under a Research Plan or
Clinical Development Plan and monitoring the performance of such Third Parties,
including monitoring compliance, reviewing reports prepared by or for a party,
evaluating and reporting to management any intellectual property resulting from such
Third Party agreements and ensuring that the appropriate party obtains rights to any
such intellectual property pursuant to Section 11;

	(c)	 	monitoring and seeking management approval for the grant of material transfer
agreements between ATHERSYS and Third Parties in respect of the conduct of any research
in the Field;

	(d)	 	designate Clinical Development Candidate(s) in accordance with criteria
determined by the JSC;

	(e)	 	monitor the progress made, and direct the activities to be undertaken, by the
parties in connection with the Clinical Development Programs in a manner consistent
with the corresponding Clinical Development Plans and this Agreement;

	(f)	 	review, modify as it deems appropriate, and recommend, as necessary from
time-to-time, the Clinical Development Plan(s);

	(g)	 	review, and recommended for both parties’ management approval, publications
emanating from the Research Plan activities;

	(h)	 	oversee and, whenever practicable, expedite the implementation of each Research
Plan and each Clinical Development Plan,;

	(i)	 	create and update a risk analysis plan (where appropriate);

	(j)	 	designate a head of the Manufacturing Committee;

	 	(1)	 	assure the manufacturing dossier referred to in Schedule
2.7 is kept up to date and in particular the availability of appropriate
SOPs and knowhow to
allow transfer of manufacturing, if required, to maintain Pfizer’s Commercially
Reasonable diligence in maintaining clinical or product supply;

 

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	 	(2)	 	assure review and update requisite master cell bank(s) and
feeder cell lines needed to allow maintenance of manufacturing and transfer of
manufacturing, if needed;

	 	(3)	 	monitor third party supply arrangements and as appropriate,
observe third party manufacturing and monitoring;

	(k)	 	clarify or adjust the tasks of the respective parties under the Research Plans
and Clinical Development Plans, in a manner consistent with this Agreement;

	(l)	 	ensure adequate resources are assigned by each party for research planning,
project management and personnel and other resource management related to the Research
and Clinical Development Plans in a manner consistent with this Agreement;

	(m)	 	create, review, modify as it deems appropriate, and recommend an annual budget
corresponding to each Clinical Development Plan, in a manner consistent with this
Agreement;

	(n)	 	reasonably determine or adjust milestones and progress related to the Clinical
Development Plans;

	(o)	 	recommend whether or not, and to what extent, research or development studies,
beyond those identified in an existing Research Plan or Clinical Development Plan,
should be conducted;

	(p)	 	recommend whether a Clinical Development Candidate should either be advanced to
the next phase of development or commercialization, as applicable, or be terminated by
the parties;

	(q)	 	seek management approval in respect of all public announcements;

	(r)	 	evaluation, review and comment on draft publications, abstracts, manuscripts
and presentations relevant to the Field; and

	(s)	 	such other responsibilities as are expressly set forth elsewhere in the
Agreement or as are assigned to it as mutually agreed upon by the parties.

 

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Schedule 7.5

LIST OF STAND-BY LICENCES

1. Stand-By License Agreement, by and among Regents of the University of Minnesota, ABT Holding
Company, and Pfizer Inc., dated as of December 18, 2009.

 

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Schedule 12.3

FORM OF PRESS RELEASE

Athersys Enters into Global Agreement with Pfizer to
Develop and Market
MultiStem® for
the Treatment of Inflammatory Bowel Disease

—Athersys to Host Conference Call Today at 11:00 AM EST to Discuss Stem Cell Partnership—

CLEVELAND OH December 21, 2009 (BUSINESS WIRE) —Athersys, Inc. (NASDAQ: ATHX) announced today that
it has entered into an agreement with Pfizer Inc. (PFE) to develop and commercialize
MultiStem® for the treatment of Inflammatory Bowel Disease (“IBD”). MultiStem is an
investigational stem cell therapy currently in development by Athersys for several other
conditions, including acute myocardial infarction, bone marrow transplant support, and ischemic
stroke.

Under the terms of the agreement, Athersys will receive an up-front cash payment of $6 million from
Pfizer, as well as research funding and support during the initial phase of the collaboration. In
addition, Athersys is also eligible to receive milestone payments of up to $105 million upon the
successful achievement of certain development, regulatory and commercial milestones. Pfizer will
have responsibility for development, regulatory and commercialization and will pay Athersys tiered
royalties on worldwide commercial sales of MultiStem IBD products. Alternatively, in lieu of
royalties and certain commercialization milestones, Athersys may elect to co-develop with Pfizer
and the parties will share development and commercialization expenses and profits/losses on an
agreed basis beginning at phase III clinical development.

Inflammatory Bowel Disease is a group of inflammatory and autoimmune conditions that affect the
colon and small intestine, typically resulting in severe abdominal pain, weight loss, vomiting and
diarrhea. The most common forms of the disease include Ulcerative Colitis and Crohn’s disease,
which are estimated to affect more than two million people in the U.S., major European countries
and Japan. Chronic IBD can be a severely debilitating condition, and advanced cases may require
surgery to remove the affected region of the bowel, and may also require temporary or permanent
colostomy or iliostomy. In many cases, surgery does not achieve a permanent cure, and patients
suffer a return of the disease.

“Pfizer is committed to the development of new medicines that have the potential to fundamentally
improve the quality of clinical care in areas of need. We are delighted to work with Athersys to
develop MultiStem for inflammatory bowel disease,” said Dr. Ruth McKernan, Head of Pfizer
Regenerative Medicine. “This is an innovative new area and our collaboration with Athersys
represents a cornerstone of Pfizer’s stem cell and regenerative medicine strategy.”

 

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“We have been systematically evaluating potential partnering opportunities in multiple areas, and
we believe that Pfizer represents the ideal partner for this program,” said Dr. Gil Van Bokkelen,
Chairman and Chief Executive Officer at Athersys. “Their longstanding global leadership in
development and commercialization of new medicines, focus on best-in-class therapies, and their
growing commitment to regenerative medicine provide a great foundation for working together.”

About MultiStem

MultiStem is a patented and proprietary cell therapy product consisting of a special class of stem
cells that are obtained from the bone marrow of healthy, consenting adult donors, and which have
the demonstrated ability to produce a range of factors, as well as form multiple cell types.
MultiStem appears to promote tissue repair and healing in multiple ways, such as through the
production of multiple therapeutic factors produced in response to signals of inflammation and
tissue damage. Athersys believes that MultiStem represents a unique “off-the-shelf” stem cell
product based on the apparent ability to deliver multiple mechanisms of therapeutic benefit,
administration of the product without tissue matching or immunosuppression, and its capacity for
large scale production. Athersys maintain rights to develop and commercialize MultiStem for areas
outside of the Pfizer collaboration. In 2008 Athersys was awarded the Frost & Sullivan North
American Product Innovation of the Year Award for MultiStem, which cited the product as having
best-in-class potential among stem cell and regenerative medicine technologies.

Conference Call Information

Athersys will hold a conference call today at 11:00 a.m. Eastern Time (8:00 a.m. Pacific Time) to
discuss this announcement. To participate in the conference call, please call [Insert Dial-up
information]. In addition, this call is being Webcast and can be accessed at Athersys’s website at
www.Athersys.com.

About Athersys, Inc.

Athersys is a clinical stage biopharmaceutical company engaged in the discovery and development of
therapeutic product candidates designed to extend and enhance the quality of human life. The
company is developing MultiStem, a patented, adult-derived “off-the-shelf” stem cell product
platform for multiple disease indications, including damage caused by myocardial infarction, bone
marrow transplantation and oncology treatment support, ischemic stroke and other indications. The
company is also developing a portfolio of other therapeutic programs, including orally active
pharmaceutical product candidates for the treatment of metabolic and central nervous system
disorders, utilizing proprietary technologies, including Random Activation of Gene Expression
(RAGE®).

 

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Forward Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 that involve risks and uncertainties. We have attempted to identify
forward-looking statements by using such words as “anticipates,” “believes,” “can,” “continue,”
“could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “should,” “will,” or other
similar expressions. These forward-looking statements
are only predictions and are largely based on our current expectations. A number of known and
unknown risks, uncertainties, and other factors could affect the accuracy of these statements. Some
of the more significant known risks that we face are the risks and uncertainties inherent in the
process of discovering, developing, and commercializing products that are safe and effective for
use as human therapeutics, including the uncertainty regarding market acceptance of our product
candidates and our ability to generate revenues, including MultiStem for the treatment of
Inflammatory Bowel Disease or other indications. These risks may cause our actual results, levels
of activity, performance, or achievements to differ materially from any future results, levels of
activity, performance, or achievements expressed or implied by these forward-looking statements.
You should not place undue reliance on forward-looking statements contained in this press release,
and we undertake no obligation to publicly update forward-looking statements, whether as a result
of new information, future events or otherwise.

 

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Schedule 12.4

REDACTED AGREEMENT

The Redacted Agreement approved by the parties in accordance with

this Agreement shall be attached hereto

 

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Schedule 14.2

[*]

 

	 	 	 
	*	 	Confidential treatment has been requested for the
redacted portions of this exhibit, and such confidential portions have been
omitted and filed separately with the Securities and Exchange Commission.

 

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