Document:

EXHIBIT 10.21

 

COMMON
STOCK PURCHASE AGREEMENT

 

This Common Stock
Purchase Agreement (the “Agreement”) is made as of April 28, 2005,
by and between MacroPore Biosurgery, Inc., a Delaware corporation (the “Company”),
and Olympus Corporation, a Japanese corporation (“Purchaser”).

 

1.             Sale of Stock.  Subject to the terms and conditions of this
Agreement, the Company will issue and sell to Purchaser, and Purchaser agrees
to purchase from the Company, 1,100,000 shares of the Company’s Common Stock
(the “Shares”) from the Company’s treasury at a purchase price of U.S.$10.00
per Share for a total of U.S.$11,000,000 (“Purchase Price”) .  Immediately upon issuance the Shares will be
listed and freely tradeable on the Frankfurt Stock Exchange.  The Company has a sufficient number of shares
of Common Stock authorized for issuance to issue the Shares.

 

2.             Purchase.  The purpose of this Agreement is to make
joint venture arrangements related to “Memorandum of Agreement for Common Stock
Acquisition” and “Memorandum of Agreement for Exclusive Right for Negotiation”
which were agreed by and between Company and Purchaser (the “Purpose”), and
Company understands that Purchaser’s acquisition of the Shares at Purchase
Price is for fulfillment of the Purpose. 
Both parties shall continue to negotiate for the Purpose in good
faith.  The purchase and sale of the
Shares under this Agreement shall occur on May 31, 2005 at a closing at
the principal office of the Company by the parties.  At the closing, the Company shall deliver to
Purchase documentation from Company’s transfer agent certifying the completion
of the electronic transfer of the Shares into the account specified by
Purchaser, and Purchaser shall immediately deliver the Purchase Price therefor
by (a) check made payable to the Company, or (b) wire transfer. The
purchase of Option Shares (defined below) shall occur upon Company’s receipt
from Purchaser of a notice of exercise of all or part of the call option which
notice shall be accompanied by (a) check made payable to the Company, or (b) wire
transfer to the Company,  for the full
amount of the purchase price of such Option Shares. Upon receipt of the
exercise notice Company shall immediately transfer the corresponding number of
shares to the account specified by Purchaser.

 

3.             Option Shares.  Purchaser is granted a call option to
purchase an additional 2,200,000 shares of the Company’s Common Stock at a
purchase price of U.S.$10.00 per share, which option shall expire on December 31,
2006 (“Option Shares”) if the company has not received notice by Purchaser of
it’s 90 days prior notice of intent to exercise.   Immediately upon issuance the Option Shares
will be listed and freely tradeable on the Frankfurt Stock Exchange.  If at the time of issuance of the Option
Shares the Company has any securities registered under the U.S. federal
Securities Act of 1933, as amended (the “Securities Act”), other than related
to stock options, the stock purchase plan or equity incentive plan shares which
are registered on form S-8, then immediately upon issuance the Option Shares
also will be registered by the Company under the Securities Act and freely
tradeable, provided the Company was granted notice of Purchaser’s intent to
exercise 90 days prior to the exercise of Option Shares.

 

 

4.             Limitations on Transfer.  Purchaser shall not assign, encumber or
dispose of any interest in the Shares and Option Shares except in compliance
with applicable securities laws and regulations of applicable countries and
stock exchanges.

 

5.             Investment Representations.  In connection with the purchase of the
Shares, Purchaser represents to the Company the following:

 

(a)           Purchaser is aware of the Company’s business affairs
and financial condition and has acquired sufficient information about the
Company to reach an informed and knowledgeable decision to acquire the
Shares.  The Company is a reporting
company under the U.S. Securities and Exchange Act of 1934, as amended (the “Exchange
Act”), and its various periodic reports and other filings made with the U.S.
Securities and Exchange Commission (the “Commission”) are available for public
inspection on the EDGAR system at www.sec.gov. 
The Company afforded Purchaser and Purchaser’s advisors full and
complete access to all additional information with respect to the Company and
the Company’s operations that Purchaser and Purchaser’s advisors deemed
necessary to evaluate the merits and risks of an investment in the
Company.  Purchaser further acknowledges
that Purchaser and Purchaser’s advisors have had the opportunity to ask
questions of and receive answers from the Company’s management concerning this
investment.

 

(b)           Purchaser understands that the Shares have not been
registered under the Securities Act and are being offered pursuant to an
exemption from the registration requirements thereunder, which exemption
depends upon, among other things, the bona fide nature of Purchaser’s
investment intent as expressed herein.

 

(c)           Purchaser understands that the Shares are “restricted
securities” within the meaning of applicable U.S. federal and state securities
laws and that, pursuant to these laws, Purchaser must hold the Shares unless
the Shares are registered with the Commission and qualified by state
authorities, or an exemption from such registration and qualification requirements
is available (e.g., Rule 144 or Regulation S). Purchaser further
acknowledges that if an exemption from registration or qualification is
available, it

 

 

may be
conditioned on various requirements including, but not limited to, the time and
manner of sale, the holding period for the Shares. The Company shall reasonably
cooperate with Purchaser to effect any secondary transfer of the Shares and/or
Option Shares.

 

(d)           Purchaser is an “accredited investor,” as defined in Rule 501
promulgated pursuant to the Securities Act.

 

(e)           Purchaser has not entered into any agreement to pay
commissions to any persons with respect to the purchase or sale of the Shares,
except commissions for which Purchaser will be responsible.

 

(f)            Purchaser understands and acknowledges that no
Japanese, German or United States federal or state agency, governmental
authority, regulatory body, stock exchange or other entity has made any finding
or determination as to the merits of this investment, nor have any such
agencies, governmental authorities, regulatory bodies, stock exchanges or other
entities made any recommendation or endorsement with respect to the Shares.

 

(g)           Purchaser, in evaluating the merits of an investment
in the Shares, is not relying on the Company, its counsel, or any financial or
other advisor to the Company for an evaluation of the tax, legal or other
consequences of an investment in the Shares.

 

(h)           Purchaser is purchasing the Shares for investment for
its own account only and not with a view to, or for resale in connection with,
any “distribution” thereof within the meaning of the Securities Act.

 

6.             Restrictive Legends.  The global certificates overlying the Shares
shall bear the following legends:

 

“The shares of common
stock of MacroPore, Inc. represented hereby have not been and will not be
registered under the United States Securities Act of 1933, as amended (the “Securities
Act”).  These securities may not be
offered, sold, pledged or otherwise transferred (nor may exposure with respect
to the shares otherwise be hedged) except (A)(1) in an offshore
transaction complying with Rule 903 or Rule 904 of Regulation S under
the Securities Act, (2) pursuant to an exemption from registration under
the Securities Act provided by Rule 144 thereunder (if available), or (3) pursuant
to another valid exemption from registration under the Securities Act (if
available), and (B) in each case in accordance with all applicable
securities laws of the States of the United States.  No representation can be made as to the
availability of the exemption provided by Rule 144 under the Securities
Act for resales of the shares.

 

This certificate also
evidences and entitles the holder hereof to certain rights as set forth in a
Rights Agreement between MacroPore Biosurgery, Inc. and Computershare
Trust Company, Inc., a Colorado corporation, as Rights Agent, dated as of May 29,
2003 (the “Rights Agreement”), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the principal executive
offices of MacroPore Biosurgery, Inc. 
Under certain circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no longer be
evidenced by this certificate.  MacroPore
Biosurgery, Inc. will mail to the holder of this certificate a copy of the
Rights Agreement without charge after receipt of a written request
therefor.  Under certain circumstances
set forth in the Rights Agreement, Rights issued to, or held by, any Person who
is, was or becomes an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as defined in the Rights Agreement) and certain related
persons, whether currently held by or on behalf of such Person or by any
subsequent holder, may become null and void.”

 

7.             Registration.  The Company shall use reasonable efforts to,
within 30 business days after the Company’s common stock is first listed on
Nasdaq or on any U.S. national securities exchange, prepare and file with the
Commission a Registration Statement covering the resale of the Shares for an
offering to be made on a continuous basis pursuant to Rule 415. The
Registration Statement shall be on Form S-3 (except if the Company is not
then eligible to register for resale the Shares on Form S-3, in which case
such registration shall be on another appropriate form in accordance with the
U.S. Securities Act and the rules promulgated thereunder).  The Company shall use its reasonable efforts
to cause the Registration Statement to be declared effective under the U.S.
Securities Act within 60 business days after such filing. The Company shall
keep such Registration Statement continuously effective under the Securities
Act for a period of two years (the “Effectiveness Period”).

 

8.             Registration Procedures; Company’s Obligations.  In connection with the registration of the
Shares, the Company shall:

 

(a)            Furnish to the Purchaser a copy of the Registration
Statement as proposed to be filed.

 

(b)            Prepare and file with the Commission such amendments,
including post-effective amendments, to the Registration Statement as may be
necessary to keep the Registration Statement continuously effective as to the
applicable Shares for the Effectiveness Period; (ii) cause the related
prospectus of the Company (the “Prospectus”) to be amended or supplemented by any
required Prospectus supplement, and as so supplemented or amended to be filed
pursuant to Rule 424 (or any similar provisions then in force) promulgated
under the Securities Act; and (iii) respond promptly to any comments
received from the Commission with

 

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respect
to the Registration Statement or any amendment thereto and promptly provide the
Purchaser true and complete copies of all correspondence from and to the
Commission relating to the Registration Statement.

 

(c)            Notify the Purchaser (i)(A) when a Prospectus or
any Prospectus supplement or post-effective amendment to the Registration
Statement is proposed to be filed, (B) when the Commission notifies the
Company whether there will be a “review” of such Registration Statement and
whenever the Commission comments in writing on such Registration Statement, and
(C) with respect to the Registration Statement or any post-effective
amendment, when the same has become effective; (ii) of any request by the
Commission or any other Federal or state governmental authority for amendments
or supplements to the Registration Statement or Prospectus or for additional
information; (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement covering any or all
of the Shares or the initiation of any proceedings for that purpose; (iv) of
the receipt by the Company of any notification with respect to the suspension
of the qualification or exemption from qualification of any of the Shares for
sale in any State of the U.S., or the initiation or threatening of any
proceeding for such purpose; and (v) of the occurrence of any event that
makes any statement made in the Registration Statement or Prospectus or any
document incorporated or deemed to be incorporated therein by reference untrue
in any material respect or that requires any revisions to the Registration
Statement, Prospectus or other documents so that, in the case of the
Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.

 

(d)            Use
its reasonable commercial efforts to avoid the issuance of, or, if issued,
obtain the withdrawal of, (i) any order suspending the effectiveness of
the Registration Statement, or (ii) any suspension of the qualification
(or exemption from qualification) of any of the Shares for sale in any State of
the U.S., at the earliest practicable moment.

 

(e)            If
requested by the Purchaser, (i) promptly incorporate in a Prospectus
supplement or post-effective amendment to the Registration Statement such
information as the Company reasonably agrees should be included therein, and (ii) make
all required filings of such Prospectus supplement or such post-effective
amendment as soon as practicable after the Company has received notification of
the matters to be incorporated in such Prospectus supplement or post-effective
amendment.

 

(f)             Furnish
to the Purchaser, without charge, at least one conformed copy of the
Registration Statement and each amendment thereto, including financial
statements and schedules, all documents incorporated or deemed to be
incorporated therein by reference, and all exhibits to the extent requested by
such Person (including those previously furnished or incorporated by reference)
promptly after the filing of such documents with the Commission.

 

(g)            Promptly
deliver to the Purchaser, without charge, as many copies of the Registration
Statement, Prospectus or Prospectuses (including each form of prospectus) and
each amendment or supplement thereto as Purchaser may reasonably request; and
the Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by the Purchaser in connection with the offering and sale of
the Shares covered by such Prospectus and any amendment or supplement thereto.
Should the Purchaser offer or sell the Shares, such Purchaser agrees to comply
with all applicable securities laws.

 

(h)            Use
its reasonable commercial efforts to register or qualify or cooperate with the
selling Purchaser in connection with the registration or qualification (or
exemption from such registration or qualification) of such Shares for offer and
sale under the securities (or “Blue Sky”) laws of each State of the U.S. as the
Purchaser reasonably requests in writing, to keep each such registration or
qualification (or exemption therefrom) effective during the Effectiveness
Period and to do any and all other acts or things necessary or advisable to
enable the disposition in such States of the Shares covered by a Registration
Statement; provided, however, that the Company shall not be required to qualify
generally to do business in any jurisdiction where it is not then so qualified
or to take any action that would subject it to general service of process in
any such jurisdiction where it is not then so subject or subject the Company to
any tax in any such jurisdiction where it is not then so subject.

 

(i)            Upon
the occurrence of any event contemplated by Section 8(c)(v), promptly
prepare a supplement or amendment, including a post-effective amendment, to the
Registration Statement or a supplement to the related Prospectus or any
document incorporated or deemed to be incorporated therein by reference, and
file any other required document so that, as thereafter delivered, neither the
Registration Statement nor such Prospectus will 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
under which they were made, not misleading.

 

(j)            Use
its reasonable efforts to cause all Shares to be listed on any U.S. national
securities exchange, U.S. quotation system, or U.S. over the counter bulletin
board, if any, on which the same securities issued by the Company are then
listed.

 

(k)           If
(i) there is material non-public information regarding the Company which
the Company’s Board of Directors reasonably determines not to be in the Company’s
best interest to disclose and which the Company is not otherwise required to
disclose, or (ii) there is a significant business opportunity (including,
but not limited to, the acquisition or disposition of assets (other than in the
ordinary course of business) or any merger, consolidation, tender offer or
other similar transaction) available to the Company which the Company’s Board
of Directors reasonably determines not to be in the Company’s best interest to
disclose and

 

3

 

which the Company would
be required to disclose under the Registration Statement, then the Company may
suspend effectiveness of the Registration Statement and suspend the sale of
Shares under the Registration Statement one time every three months or three
times in any twelve month period, provided that the Company may not suspend its
obligation for more than 60 days in the aggregate in any 12 month period.

 

9.             Registration Procedures; Purchaser’s Obligations.  In connection with the registration of the
Shares, the Purchaser shall:

 

(a)           (i) not
sell any Shares under the Registration Statement until it has received copies
of the Prospectus as then amended or supplemented as contemplated in Section 8(g) and
notice from the Company that such Registration Statement and any post-effective
amendments thereto have become effective as contemplated by Section 8(c), (ii) comply
with the prospectus delivery requirements of the Securities Act as applicable
to it in connection with sales of Shares pursuant to the Registration
Statement, and (iii) furnish to the Company information regarding such
Purchaser and the distribution of such Shares as is required by law to be
disclosed in the Registration Statement.

 

(b)           upon
receipt of a notice from the Company of the occurrence of any event of the kind
described in Section 8(c)(ii), 8(c)(iii), 8(c)(iv), 8(c)(v) or 8(k),
forthwith discontinue disposition of such Shares under the Registration
Statement until the Purchaser’s receipt of the copies of the supplemented
Prospectus and/or amended Registration Statement contemplated by Section 8(i),
or until it is advised in writing by the Company that the use of the applicable
Prospectus may be resumed, and, in either case, has received copies of any
additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus or Registration Statement.

 

10.          Registration
Expenses.

 

All reasonable fees and
expenses incident to the performance of or compliance with this Agreement by
the Company shall be borne by the Company whether or not any Shares are sold
pursuant to the Registration Statement. The fees and expenses referred to in
the foregoing sentence shall include, without limitation, the following: (i) all
registration and filing fees; (ii) printing expenses; (iii) messenger,
telephone and delivery expenses of the Company; (iv) fees and disbursements
of counsel for the Company; and (v) fees and expenses of all other persons
retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement, including, without limitation, the Company’s
independent public accountants.  In
addition, the Company shall be responsible for all of its internal expenses
incurred in connection with the consummation of the transactions contemplated
by this Agreement (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), and the expense
of any annual audit.

 

11.          Indemnification.

 

(a)           Indemnification
by the Company. The Company shall indemnify and hold harmless Purchaser,
its permitted assignees, officers, directors, agents, brokers, investment
advisors and employees, each person who controls Purchaser or a permitted
assignee (within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act) and the officers, directors, agents and employees of each
such controlling person, and the respective successors, assigns, estate and
personal representatives of each of the foregoing, to the fullest extent
permitted by applicable law, from and against any and all claims, losses,
damages, liabilities, penalties, judgments, costs (including, without
limitation, costs of investigation) and expenses (including, without
limitation, reasonable attorneys’ fees and expenses) (collectively, “Losses”),
as incurred, arising out of or relating to any untrue or alleged untrue
statement of a material fact contained in the Registration Statement, any
Prospectus, as supplemented or amended, if applicable, or arising out of or
relating to any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein (in the case of any
Prospectus or supplement thereto, in the light of the circumstances under which
they were made) not misleading, except (i) to the extent, but only to the
extent, that such untrue statements or omissions are based solely upon
information regarding the Purchaser furnished in writing to the Company by the
Purchaser expressly for use therein, or (ii) as a result of the failure of
the Purchaser to deliver a Prospectus, as amended or supplemented, to a
purchaser in connection with an offer or sale. 
The Company shall notify the Purchaser promptly of the institution,
threat or assertion of any Proceeding of which the Company is aware in
connection with the transactions contemplated by this Agreement.  Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of an Indemnified
Party (as defined in Section 11(c) hereof) and shall survive the
transfer of the Shares by the Purchaser.

 

 (b)           Conduct
of Indemnification Proceedings. If any Proceeding shall be brought or
asserted against any Person entitled to indemnity pursuant to Section 11(a) or
11(b) hereunder (an “Indemnified Party”), such Indemnified Party
promptly shall notify the Person from whom indemnity is sought (the “Indemnifying
Party) in writing, and the Indemnifying Party shall assume the defense
thereof, including the employment of counsel reasonably satisfactory to the
Indemnified Party and the payment of all fees and expenses incurred in connection
with defense thereof; provided, that the failure of any Indemnified Party to
give such notice shall not relieve the Indemnifying Party of its obligations or
liabilities pursuant to this Agreement, except (and only) to the extent that it
shall be finally determined by a court of competent jurisdiction (which
determination is not subject to appeal or further review) that such

 

4

 

failure shall have
materially and adversely prejudiced the Indemnifying Party.

 

An Indemnified Party
shall have the right to employ separate counsel in any such Proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party or Parties unless: (i) the
Indemnifying Party has agreed in writing to pay such fees and expenses; or (ii) the
Indemnifying Party shall have failed promptly to assume the defense of such
Proceeding and to employ counsel reasonably satisfactory to such Indemnified
Party in any such Proceeding; or (iii) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified
Party and the Indemnifying Party, and such Indemnified Party shall have been
advised by counsel that a conflict of interest is likely to exist if the same
counsel were to represent such Indemnified Party and the Indemnifying Party (in
which case, if such Indemnified Party notifies the Indemnifying Party in
writing that it elects to employ separate counsel at the expense of the Indemnifying
Party, the Indemnifying Party shall not have the right to assume the defense
thereof and such counsel shall be at the expense of the Indemnifying
Party).  The Indemnifying Party shall not
be liable for any settlement of any such Proceeding effected without its
written consent, which consent shall not be unreasonably withheld, conditioned
or delayed.  No Indemnifying Party shall,
without the prior written consent of the Indemnified Party, which consent shall
not unreasonably be withheld, conditioned or delayed, effect any settlement of
any pending Proceeding in respect of which any Indemnified Party is a party,
unless such settlement includes an unconditional release of such Indemnified
Party from all liability on claims that are the subject matter of such
Proceeding.

 

All reasonable fees and
expenses of the Indemnified Party (including reasonable fees and expenses to
the extent incurred in connection with investigating or preparing to defend
such Proceeding in a manner not inconsistent with this Section) shall be paid
to the Indemnified Party, as incurred, within 10 business days of written
notice thereof to the Indemnifying Party (regardless of whether it is
ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder; provided, that the Indemnifying Party may require
such Indemnified Party to undertake to reimburse all such fees and expenses to
the extent it is finally judicially determined that such Indemnified Party is
not entitled to indemnification hereunder or pursuant to applicable law).

 

(c)           The
indemnity agreement contained in this Section is in addition to any
liability that the Indemnifying Parties may have to the Indemnified Parties.

 

12.           Board Seat.  Promptly after the closing of Purchaser’s
purchase of the Shares, the Company’s Board of Directors shall elect a
candidate, designated by Purchaser, to serve as a member of the Company’s Board
of Directors.  So long as Purchaser
continues to own all of the Shares specified in Section 1 of this
Agreement, the Company shall, at each election of directors by its
stockholders, include on the Board-of-Directors-recommend slate of director
nominees in the proxy statement, one director nominee designated by Purchaser
(unless a Purchaser designee would continue to serve on the Board of Directors
after such election even if not elected at such election).

 

13.           Miscellaneous.

 

(a)           Governing Law.  This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
California, without giving effect to principles of conflicts of law.

 

(b)           Entire Agreement; Enforcement of Rights.  This Agreement sets forth the entire
agreement and understanding of the parties relating to the subject matter
herein and merges all prior discussions between them with regard to such
subject matter.  No modification of or
amendment to this Agreement, nor any waiver of any rights under this Agreement,
shall be effective unless in writing signed by the parties to this
Agreement.  The failure by either party
to enforce any rights under this Agreement shall not be construed as a waiver
of any rights of such party.

 

(c)           Severability.  If one or more provisions of this Agreement
are held to be unenforceable under applicable law, the parties agree to
renegotiate such provision in good faith. 
In the event that the parties cannot reach a mutually agreeable and
enforceable replacement for such provision, then (i) such provision shall
be excluded from this Agreement, (ii) the balance of the Agreement shall
be interpreted as if such provision were so excluded and (iii) the balance
of the Agreement shall be enforceable in accordance with its terms.

 

(d)           Construction.  This Agreement is the result of negotiations
between and has been reviewed by both of the parties hereto and their
respective counsel, if any; accordingly, this Agreement shall be deemed to be
the product of both of the parties hereto, and no ambiguity shall be construed
in favor of or against either one of the parties hereto.

 

(e)           Notices.  Any notice required or permitted by this
Agreement shall be in writing and shall be deemed sufficient when delivered
personally or sent by fax or 48 hours after being deposited in the U.S. mail,
as certified or registered mail, with postage prepaid, and addressed to the
party to be notified at such party’s address or fax number as set forth below
or as subsequently modified by written notice.

 

5

 

(f)            Counterparts.  This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.

 

[Signature Page Follows]

 

6

 

	
  The parties have
  executed this Common Stock Purchase Agreement as of the date first set forth
  above.

  
	
  MACROPORE BIOSURGERY,
  INC.

  
	
  By:   

  	
  /s/ Christopher J.
  Calhoun

  	
   

  
	
  Title:  Chief
  Executive Officer   

  
	
  Address:

  
	
  6740 Top Gun Street

  
	
  San Diego, CA 92121

  
	
   

  
	
  Fax: U.S. 858-458-0994

  
	
   

  
	
  PURCHASER:

  
	
  OLYMPUS CORPORATION

  
	
   

  
	
  By:  

  	
  /s/ Tsuyoshi Kikukawa

  	
   

  
	
   

  	
  Title:    President

  	
   

  
	
   

  
	
  Address:

  
	
  43-2 Hatagaya 2-chome,

  
	
  Shibuya-ku, Tokyo,

  
	
  JAPAN

  
	
   

  
	
  Fax: Japan 03-3340-2062

  
				

 

7EXHIBIT 10.22

 

SUBLEASE AGREEMENT

 

This SUBLEASE
AGREEMENT (“Sublease”) is made and entered into as of May 24, 2005
by and between BIOGEN IDEC INC., a Delaware corporation (“Sublandlord”),
and MACROPORE BIOSURGERY, INC., a Delaware corporation (“Subtenant”).

 

WHEREAS, BIODEC,
LLC, a California limited liability company (as successor to Professors Fund I,
L.P., as Managing Agent for All Spectrum Services, Inc.), as Landlord (“Landlord”),
and Sublandlord, as Tenant, are parties to a certain Lease Agreement dated as
of August 13, 1996 (“Original Lease”), as amended by that certain
First Amendment to Lease (“First Amendment”) dated as of October 1,
1999, that certain Second Amendment to Lease (“Second Amendment”) dated
as of June 16, 2000, that certain Third Amendment to Lease (“Third
Amendment”) dated as of October 13, 2000, and that certain Fourth
Amendment to Lease (“Fourth Amendment”) dated as of March 5, 2004
(collectively, as amended, the “Master Lease”), whereby Landlord leased
to Sublandlord the buildings located at 3020 Callan Road (the “3020 Building”)
and 3030 Callan Road (the “3030 Building,” and together with the 3020
Building, collectively, the “Buildings”), San Diego, CA (“Master
Premises”), as more particularly described in the Master Lease, upon the
terms and conditions contained therein. 
All initially capitalized terms used herein shall have the same meanings
ascribed to them in the Master Lease unless otherwise defined herein.  A copy of the Master Lease is attached hereto
as Exhibit ”A” and made a part hereof.  Sublandlord is vested with the leasehold
estate described in the Master Lease.

 

WHEREAS,
Sublandlord and Subtenant are desirous of entering into a sublease of the
entirety of the Master Premises so indicated on the demising plan annexed hereto
as Exhibit ”B” and made a part hereof (“Sublease Premises”)
on the terms and conditions hereafter set forth.

 

NOW, THEREFORE, in
consideration of the mutual covenants herein contained, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto mutually covenant and agree as follows:

 

1.     Demise. 
Sublandlord hereby subleases and demises to Subtenant and Subtenant
hereby hires and subleases from Sublandlord the Sublease Premises consisting of
approximately 45,117 rentable square feet (“RSF”) of the entirety of the
3020 Building, and approximately 45,883 RSF of the entirety of the
3030 Building, or approximately 91,000 RSF of space in the aggregate,
subject to the terms, covenants and conditions hereinafter set forth.  The parties stipulate that the square footage
of the Sublease Premises shall be as specified above.

 

2.     Sublease Term.

 

a.     Sublease Term. 
The term of this Sublease (“Term”) shall commence on October 1,
2005 (“Sublease Commencement Date”), and end, unless sooner terminated
as provided herein, on June 30, 2010 (“Sublease Expiration Date”)

 

b.     License for Early Entry Period. 
Prior to the Sublease Commencement Date and not later than ten (10) days
following the full execution of this Sublease and Sublandlord’s receipt
Landlord’s consent to this Sublease, Subtenant shall have a license (the “License”)
to enter onto and occupy the Sublease Premises (the “License Area”).   The License shall be limited to the use and
occupancy of the Licensed Area solely for purposes of construction of the
Tenant Improvements (defined below) and installing data and telecommunications
cabling and equipment.  Subtenant’s use
and occupancy of the License Area shall be substantially on all the terms and
provisions of this Sublease, as the same apply to the Sublease Premises,
including, without limitation, provisions requiring maintenance of insurance by
Subtenant and indemnity obligations in favor of Sublandlord and payment of
utilities used by Subtenant during such occupancy; provided, however,
Subtenant shall not be required to pay Rent (defined below) during the term of
the License.  The Deposit shall secure
performance of Subtenant with respect to its obligations in connection with the
License and, effective on the Sublease Commencement Date, the License shall
automatically terminate.  Sublandlord has
no obligation to prepare the License Area for Subtenant’s use or occupancy
other than the removal of the furniture, fixtures and equipment identified on the
attached Schedule 2(b) within thirty (30) days of the
commencement of the License.  Except for
the removal of such items, the License Area shall be tendered to Subtenant in
its “as-is” condition with Building systems in working order and
condition.  Subtenant shall not undertake
any action with respect to the License Area which is incompatible with the
duration and scope of the License. 
Subtenant agrees that the License does not constitute a leasehold
interest in the License Area and Subtenant agrees not to assert any leasehold
interest rights in or to the License Area. 
Notwithstanding anything to the contrary in this Section 2(b),
in the event Subtenant commences normal operation of its business

 

 

(i.e., activities other than readying the Sublease Premises for Subtenant’s
occupancy as described hereinabove) in any portion of the Sublease Premises
prior to the Sublease Commencement Date, Subtenant shall pay to Sublandlord all
additional rent payable pursuant to the Master Lease, including Operating Expenses
(as defined in Section 4(c) below), applicable to such portion
of the Sublease Premises, such payment to be made in advance, for each month
(or portion thereof) of such occupancy; provided, however, Subtenant shall not
be required to pay Base Rental (as defined in Section 4(a) below)
prior to the Sublease Commencement Date.

 

3.     Use.        The Sublease Premises shall be
used and occupied by Subtenant solely for office, laboratory and research and
development uses, and any other uses permitted under the Master Lease.

 

4.     Subrental.

 

a.     Base Rental. 
Subject to the provisions of Section 4(f) below, beginning
with the Sublease Commencement Date and thereafter during the Term of this
Sublease and ending on the Sublease Expiration Date, Subtenant shall pay to Sublandlord
monthly installments of base rent of initially calculated at the rate of One
and 15/100 Dollars ($1.15) per RSF of Sublease Premises (“Base
Rental”).  Base Rental shall
initially be One Hundred Four Thousand Six Hundred Fifty and 00/100 Dollars
($104,650.00). Commencing as of the first (1st) anniversary
of the Sublease Commencement Date, Base Rental shall increase by three percent
(3%), and shall increase by three percent (3%) each anniversary of the Sublease
Commencement Date thereafter.  Base Rental
and additional rent (including Operating Expenses) shall hereinafter be
collectively referred to as “Rent.” 
Sublandlord and Subtenant intend that Subtenant’s obligations under this
Sublease shall be on a “triple net” basis.

 

b.     Prorations. 
If the Sublease Commencement Date is not the first (1st)
day of a month, or if the Sublease Expiration Date is not the last day of a
month, a prorated installment of monthly Base Rental based on a thirty (30)
day month shall be paid for the fractional month during which the Term
commenced or terminated.

 

c.     Additional Rent. 
Beginning with the Sublease Commencement Date and continuing to the
Sublease Expiration Date, Subtenant shall also pay as additional rent all
Operating Expenses and the full amount of additional rent payable by
Sublandlord as Tenant pursuant to the Master Lease.  The term “Operating Expenses” shall
mean the full cost of all operating expenses applicable to the Sublease
Premises, including Building maintenance, common area expenses, insurance premiums
for casualty insurance maintained with respect to the Buildings (but excluding
any insurance coverages for Subtenant’s personal property), security services
provided by Sublandlord, real estate taxes, and utilities.  Subtenant shall also pay to Sublandlord as
additional rent for this subletting the cost of all additional expenses, costs
and charges other than Operating Expenses which are incurred: (i) in
connection with any additional services requested by Subtenant, (ii) in
connection with any act performed by Sublandlord at Subtenant’s request or on
Subtenant’s behalf if Subtenant fails to perform an act which Subtenant is
required to perform under this Sublease, (iii) as a result of Subtenant’s
usage of services or utilities outside the Buildings’ standard hours of
operation, or (iv) as a result of Subtenant’s misuse of or damage to the
Sublease Premises.

 

d.     Payment of Rent. 
Except as otherwise specifically provided in this Sublease, Rent shall
be payable in lawful money without demand, and without offset, counterclaim, or
setoff in monthly installments, in advance, on the first day of each and every
month during the Term of this Sublease. 
All of said Rent is to be paid to Sublandlord at its office at the address
set forth in Section 13 herein, or at such other place or to such
agent and at such place as Sublandlord may designate by notice to
Subtenant.  Any additional rent payable
on account of items which are not payable monthly by Subtenant to Sublandlord
under this Sublease is to be paid to Sublandlord as and when such items are
payable by Sublandlord to third parties or to Landlord under the Master Lease
unless a different time for payment is elsewhere stated herein.  Upon written request therefor, Sublandlord
agrees to provide Subtenant with copies of any statements or invoices received
by Sublandlord from Landlord pursuant to the terms of the Master Lease.  Sublandlord reserves the right to collect
from Subtenant, and Subtenant shall pay to Sublandlord within thirty (30) days
of receipt of an invoice therefor, the amount of any underpayment revealed
after the Sublease Expiration Date or earlier termination of this Sublease
pursuant to Section 17 by a statement of actual costs incurred by
Sublandlord.

 

e.     Late Charge. 
Subtenant shall pay to Sublandlord an administrative charge at an annual
interest rate equal to the Prime Rate (as stated under the column “Money Rates”
in the Wall Street Journal) plus three percent (3%) on all amounts of Rent
payable hereunder which are not paid within three (3) days of the
date on which such payment is due, such charge to accrue from the date upon
which such amount was due until paid.

 

f.      Rental Abatement. 
Provided Subtenant shall not be in default of any provision of this
Sublease, Subtenant shall receive a credit (“T/I Credit”) against the
payment of Base Rental for certain tenant improvements described in the
attached Exhibit “C” (the “Tenant Improvements”) in an
amount equal to Eight Hundred Thirty-Seven Thousand

 

2

 

Two Hundred and 00/100 Dollars ($837,200.00).  The T/I Credit shall be given in the form of
an abatement of Base Rental in months one (1) through eight (8) of
the Term (“T/I Credit Period”). 
Subtenant shall be obligated to pay all additional rent during the T/I
Credit Period. The grant of the T/I Credit does not constitute Sublandlord’s
consent to the Tenant Improvements proposed to be installed in the Sublease
Premises by Subtenant, such approval to be governed by Section 20
of this Sublease.  If Subtenant fails to
construct the Tenant Improvements, Sublandlord may recover from Subtenant the
T/I Credit.  Additionally, upon any
default by Subtenant of its obligations under this Sublease during the Term, in
addition to all other remedies available to Sublandlord at law or in equity,
Sublandlord may recover from Subtenant the remaining unamortized portion of the
T/I Credit, amortized over the Term.

 

5.     Security Deposit. 
Concurrently with the execution of this Sublease, Subtenant shall
deposit with Sublandlord the sum of One Hundred Forty-Eight Thousand One
Hundred Forty-Eight and 00/100 Dollars ($148,148.00) (“Deposit”),
which shall be held by Sublandlord as security for the full and faithful
performance by Subtenant of its covenants and obligations under this
Sublease.  The Deposit is not an advance
Rent deposit, an advance payment of any other kind, or a measure of Sublandlord’s
damages in case of Subtenant’s default. 
If Subtenant defaults in the full and timely performance of any or all
of Subtenant’s covenants and obligations set forth in this Sublease, then
Sublandlord may, from time to time, without waiving any other remedy available
to Sublandlord, use the Deposit, or any portion of it, to the extent necessary
to cure or remedy the default or to compensate Sublandlord for all or a part of
the damages sustained by Sublandlord resulting from Subtenant’s default.  Subtenant shall immediately pay to
Sublandlord within five (5) days following demand, the amount so
applied in order to restore the Deposit to its original amount, and Subtenant’s
failure to immediately do so shall constitute a default under this
Sublease.  If Subtenant is not in default
with respect to the covenants and obligations set forth in this Sublease at the
expiration or earlier termination of the Sublease, Sublandlord shall return the
Deposit to Subtenant after the expiration or earlier termination of this
Sublease in accordance with the provisions of California Civil Code Section 1950.7.  Sublandlord’s obligations with respect to the
Deposit are those of a debtor and not a trustee.  Sublandlord shall not be required to maintain
the Deposit separate and apart from Sublandlord’s general or other funds and
Sublandlord may commingle the Deposit with any of Sublandlord’s general or
other funds.  Subtenant shall not at any
time be entitled to interest on the Deposit.

 

6.     Signage. 
Subtenant shall have such rights to maintain Subtenant identification
signs in any location in, on, or about the Sublease Premises as are granted to
Sublandlord under the Master Lease, subject to all of the terms and provisions
thereof.  The size, appearance and
location of all such signs shall be subject to Sublandlord’s prior approval,
and shall be subject to Subtenant’s receipt of all require governmental permits
and approvals.  The cost of such signs,
including the installation, maintenance and removal thereof, shall be at
Subtenant’s sole cost and expense.  If
Subtenant fails to maintain its Sublease Premises sign, or if Subtenant fails
to remove same upon the expiration or earlier termination of this Sublease and
repair any damage caused by such removal, Sublandlord may do so at Subtenant’s
expense and Subtenant shall reimburse Sublandlord for all actual costs incurred
by Sublandlord to effect such removal within five (5) days after Subtenant’s
receipt of an invoice therefor.

 

7.     Parking. 
At no additional rent or charge other than payment of Operating Expenses
therefor, Subtenant shall have the right, during the Term of this Sublease, to
use on a non-reserved basis parking spaces in the parking facilities servicing
the Buildings in the number permitted under the Master Lease applicable to the
Sublease Premises. All such parking privileges shall be subject to the terms
and conditions set forth in the Master Lease.

 

8.     Incorporation of Terms of Master
Lease.

 

a.     This Sublease is subject and
subordinate to the Master Lease.  Subject
to the modifications set forth in this Sublease, the terms of the Master Lease
are incorporated herein by reference, and shall, as between Sublandlord and
Subtenant (as if they were “Landlord” and “Tenant,” respectively, under the
Master Lease) constitute the terms of this Sublease except to the extent that
they are inapplicable to, inconsistent with, or modified by, the terms of this
Sublease.  Notwithstanding the foregoing,
to the extent provisions of the Master Lease are unique and personal to
Sublandlord’s interest in the Buildings pursuant to the Master Lease, Subtenant
shall not be required to comply with such provisions.  In the event of any inconsistencies between
the terms and provisions of the Master Lease and the terms and provisions of
this Sublease, the terms and provisions of this Sublease shall govern.  Subtenant acknowledges that it has reviewed
the Master Lease and is familiar with the terms and conditions thereof.

 

b.     For the purposes of incorporation
herein, the terms of the Master Lease are subject to the following additional
modifications:

 

i.      In all provisions of the Master
Lease (under the terms thereof and without regard to modifications thereof for
purposes of incorporation into this Sublease) requiring the approval or consent
of Landlord, Subtenant shall be required to obtain the approval or consent of
both Sublandlord and Landlord.

 

3

 

ii.     In all provisions of the Master
Lease requiring Tenant to submit, exhibit to, supply or provide Landlord with
evidence, certificates, or any other matter or thing, including, without
limitation, the provisions of Paragraph 12.1 thereof, Subtenant shall be
required to submit, exhibit to, supply or provide, as the case may be, the same
to both Landlord and Sublandlord.  In any
such instance, Sublandlord shall determine if such evidence, certificate or
other matter or thing shall be satisfactory.

 

iii.    In the event of any taking by
eminent domain or casualty to the Sublease Premises such that Subtenant is
deprived of the use and occupancy of greater than fifty percent (50%)
of the Sublease Premises for a period in excess of sixty (60)
days, Subtenant and Sublandlord shall each have the right to terminate this
Sublease upon not less than thirty (30) days written notice to
the other.  In the event of any such
taking by eminent domain or casualty such that Subtenant is deprived of fifty
percent (50%) or less of the use and occupancy of the Sublease
Premises, or in the event Subtenant elects to continue occupancy of the
remaining portion of the Sublease Premises after the occurrence of a taking or
casualty giving Subtenant a right to terminate this Sublease, the Rent shall be
proportionally reduced for the portion of the Term during which Subtenant is
prevented from using and occupying the damaged or taken portion of the Sublease
Premises.  Sublandlord shall have no
obligation to restore or rebuild any portion of the Sublease Premises after any
destruction or taking by eminent domain, and Subtenant shall have no rights to
any portion of the award in any eminent domain proceeding affecting the
Sublease Premises.

 

iv.    The following provisions of the Master
Lease shall not be incorporated into this Sublease:

 

1.     Paragraphs 1.1, 1.3-1.8, inclusive, 1.10, 1.12, 4.1, 4.2,
4.5, 4.7, 6.1, 6.2, and 17.7 of the Original Lease;

 

2.     Articles 2, 3, 19, 30, 32, 37.3, 41 and 42 of the Original
Lease;

 

3.     Paragraph 4.3(b)(15) of the Original Lease relating to
operating expense exclusions, except to the extent such coolant replacement
costs are not passed through to Sublandlord as Tenant;

 

4.     Paragraph 5.2 of the Original Lease, solely with respect to
any obligation of Sublandlord to bring the Buildings into compliance with the
ADA;

 

5.     Paragraphs 1-5, inclusive, 8, 10, 12 and 14-18, inclusive,
of the First Amendment, and Exhibit “B” of the First Amendment;

 

6.     Paragraph 6 of the First Amendment, except that Subtenant
shall be obligated to comply with all applicable laws, including the ADA, and
shall be responsible for compliance with the ADA for any alterations to the
Sublease Premises made by Subtenant, including the Tenant Improvements;

 

7.     The entirety of each of the Second Amendment, Third
Amendment and Fourth Amendment; and

 

8.     All references to “Tenant’s Pro-Rata Share,” “Tenant
Improvements,” and “Tenant Work Letter.”

 

c.     During the Term, Subtenant shall
not be required to maintain casualty insurance policies and coverages with
respect to the Sublease Premises and Subtenant shall be named as an additional
insured under such policies maintained by Sublandlord (to the extent of
Subtenant’s interest in the Sublease Premises), evidence of such coverage to be
in the form of a certificate of insurance provided by Sublandlord to Subtenant;
provided, however, such policies and coverages maintained by
Sublandlord with respect to the Buildings and the Sublease Premises shall not
include coverage for Subtenant’s personal property and Subtenant, at its sole
cost and expense, shall maintain such policies and coverages with respect to
its personal property as it may elect. 
During the Term, Subtenant shall maintain policies of insurance as
required pursuant to Paragraph 12.1 of the Master Lease (including fire
insurance covering the Tenant Improvements and the FF&E (as defined
below)), which coverage shall be subject to any required waivers of subrogation
as are described under Paragraph 12.5 of the Master Lease.  All such policies shall name Sublandlord,
Landlord and any other party required to be so named under the Master Lease as
additional insureds thereunder and shall be with carriers reasonably acceptable
to Sublandlord and, in all events, in accordance with the requirements of the
Master Lease.  Subtenant hereby waives
all rights of subrogation against Sublandlord with respect to claims covered by
the property insurance carried by Subtenant pursuant to the terms of this
Sublease.

 

d.     Sublandlord and Subtenant
acknowledge that this Sublease is of short duration in relation to the term of
the Master Lease and, as a result, the parties do not intend that, as between
Sublandlord and Subtenant, Subtenant shall be required to comply with any
obligations or requirements under the Master Lease (except those which are

 

4

 

specifically referenced as an obligation of Subtenant under this
Sublease) which are of a character or nature as is reasonably determined to be
inconsistent with the scope and Term of occupancy of the Sublease Premises by
Subtenant under this Sublease.  In the
event of a dispute regarding Subtenant’s obligation to comply with any such
obligations or requirements of the Master Lease, as between Sublandlord and
Subtenant, the determination of the applicability of such obligations or
requirements shall be made by Sublandlord and Subtenant in good faith with
reference to current statutory and case law in California interpreting the
relative obligations of a landlord and tenant in circumstances similar to the
Sublease with respect to the nature of the obligation for which compliance is
sought.

 

9.     Subtenant’s Obligations. 
Subtenant covenants and agrees that all obligations of Sublandlord under
the Master Lease shall be done or performed by Subtenant with respect to the
Sublease Premises, except as otherwise provided by this Sublease, and Subtenant’s
obligations shall run to Sublandlord and Landlord as Sublandlord may determine
to be appropriate or be required by the respective interests of Sublandlord and
Landlord.  Subtenant agrees to indemnify
Sublandlord, and hold it harmless, from and against any and all claims,
damages, losses, expenses and liabilities (including reasonable attorneys’
fees) incurred as a result of the non-performance, non-observance or
non-payment of any of Sublandlord’s obligations under the Master Lease which,
as a result of this Sublease, became an obligation of Subtenant.  If Subtenant makes any payment to Sublandlord
pursuant to this indemnity, Subtenant shall be subrogated to the rights of
Sublandlord concerning said payment. 
Subtenant shall not do, nor permit to be done, any act or thing which
is, or with notice or the passage of time would be, a default under this
Sublease or the Master Lease.

 

10.   Sublandlord’s Obligations. 
Sublandlord covenants and agrees that all obligations of Sublandlord
under the Master Lease, other than those which are to be done or performed by
Subtenant, with respect to the Sublease Premises shall be done or performed by
Sublandlord.  Sublandlord agrees that
Subtenant shall be entitled to receive all services and repairs to be provided
by Landlord to Sublandlord under the Master Lease.  Subtenant shall look solely to Landlord for
all such services and shall not, under any circumstances, seek nor require
Sublandlord to perform any of such services, nor shall Subtenant make any claim
upon Sublandlord for any damages which may arise by reason of Landlord’s
default under the Master Lease; provided, however, Sublandlord
shall provide all necessary assistance and cooperation to Subtenant (at no
material cost or liability to Sublandlord) to enforce Sublandlord’s rights
under the Master Lease to compel performance by Landlord with respect to such
services or repairs to which Subtenant is entitled.  Any condition resulting from a default by
Landlord shall not constitute, as between Sublandlord and Subtenant, an
eviction, actual or constructive, of Subtenant and no such default shall excuse
Subtenant from the performance or observance of any of its obligations to be
performed or observed under this Sublease, or entitle Subtenant to receive any
reduction in or abatement of the Rent provided for in this Sublease unless and
to the extent Sublandlord is excused from performance, or entitled to a
reduction or abatement of its rental obligations to Landlord under the Master
Lease also.  In furtherance of the
foregoing, Subtenant does hereby waive any cause of action and any right to
bring any action against Sublandlord by reason of any act or omission of
Landlord under the Master Lease, subject to the right of assistance and
cooperation from Sublandlord described above. 
Sublandlord covenants and agrees with Subtenant that Sublandlord will
pay all fixed rent and additional rent payable by Sublandlord pursuant to the
Master Lease to the extent that failure to perform the same would adversely
affect Subtenant’s use or occupancy of the Sublease Premises.  Sublandlord shall extend all reasonable
cooperation to Subtenant (at no material cost or liability to Sublandlord) to
enable Subtenant to receive the benefits under this Sublease, as the same are
dependent upon performance under the Master Lease.

 

11.   Default by Subtenant. 
In the event Subtenant shall be in default of any covenant of, or shall
fail to honor any obligation under, this Sublease, Sublandlord shall have
available to it against Subtenant all of the remedies available to Landlord
under the Master Lease in the event of a similar default on the part of
Sublandlord thereunder or at law.

 

12.   Quiet Enjoyment. 
So long as Subtenant pays all of the Rent due hereunder and performs all
of Subtenant’s other obligations hereunder, Sublandlord shall do nothing to
affect Subtenant’s right to peaceably and quietly have, hold and enjoy the
Sublease Premises.

 

13.   Notices. 
Anything contained in any provision of this Sublease to the contrary
notwithstanding, Subtenant agrees, with respect to the Sublease Premises, to
comply with and remedy any default in this Sublease or the Master Lease which
is Subtenant’s obligation to cure, within the period allowed to Sublandlord
under the Master Lease, even if such time period is shorter than the period
otherwise allowed therein due to the fact that notice of default from
Sublandlord to Subtenant is given after the corresponding notice of default
from Landlord to Sublandlord. 
Sublandlord agrees to forward to Subtenant, promptly upon receipt
thereof by Sublandlord, a copy of each notice of default received by
Sublandlord in its capacity as Tenant under the Master Lease.  Subtenant agrees to forward to Sublandlord,
promptly upon receipt thereof, copies of any notices received by Subtenant from
Landlord or from any governmental authorities. 
All notices, demands and requests shall be in writing and shall be sent
either by hand delivery or by a nationally recognized overnight courier service
(e.g., Federal Express), in either case return receipt requested, to the
address of the appropriate party. 
Notices, demands and requests so sent shall be deemed given when the
same are received.

 

5

 

Notices to Sublandlord shall be sent to the attention of:

Biogen Idec Inc.

P.O. Box
229008

5200 Research
Place

San Diego, CA  92129-9008

Attn: Paul Draper

 

Notices to
Subtenant shall be sent to the attention of:

 

MacroPore
Biosurgery, Inc.

6740 Top Gun
Street

San Diego, CA  92121

Attn:  J. Peter Amis

 

14.   Broker. 
Sublandlord and Subtenant represent and warrant to each other that no
brokers other than John Burnham Real Estate Services, Inc., acting on
behalf of Sublandlord, and Irving Hughes, acting on behalf of Subtenant, were
involved in connection with the negotiation or consummation of this
Sublease.  Each party agrees to indemnify
the other, and hold it harmless, from and against any and all claims, damages,
losses, expenses and liabilities (including reasonable attorneys’ fees)
incurred by said party as a result of a breach of this representation and
warranty by the other party.

 

15.   Condition of Premises.

 

a.     Commencement. 
Subtenant acknowledges that (i) it is subleasing the Sublease
Premises in an “as-is” condition, unfurnished except for certain furniture,
fixtures and equipment of Sublandlord (the “FF&E”) which exists in
the Sublease Premises as of the date hereof, expressly excluding those items to
be removed by Sublandlord as identified on the attached Schedule 2(b),
(ii) Sublandlord is not making any representation or warranty concerning
the condition of the Sublease Premises, and (iii) Sublandlord is not
obligated to perform any work to prepare the Sublease Premises for Subtenant’s
occupancy other than to effect removal of the items identified on the attached Schedule 2(b) as
contemplated under Section 2(b) above and to deliver the
Sublease Premises in broom-clean condition; provided, however,
all Building systems servicing the Sublease Premises shall be in working order
and condition on the Sublease Commencement Date.  Subtenant acknowledges that the FF&E
shall be delivered to Subtenant on the Sublease Commencement Date (or such
earlier date of Subtenant’s occupancy of the Sublease Premises as is provided
under Section 2(b) above with respect to the License) in their
“as is,” “where is,” “with all faults” condition, without any warranty or
representation as to condition by Sublandlord. 
Subtenant further acknowledges that it is not authorized to make or do
any alterations or improvements in or to the Sublease Premises without
Sublandlord’s prior written consent, which consent may not be unreasonably
withheld and which may impose additional requirements applicable to the
construction and completion of such alterations or improvements in addition to
requiring Subtenant’s compliance with the requirements of the Master
Lease.  Sublandlord shall not be deemed
to be unreasonable in withholding its consent to any alteration or improvement
which does not conform with the use requirements under this Sublease or which
is materially different from alterations or improvements customarily seen in
first-class office space or first-class laboratory space, as applicable.

 

b.     Vacation. 
Subtenant further acknowledges that it must deliver the Sublease
Premises to Sublandlord on the Sublease Expiration Date in the condition
substantially the same as that on the Sublease Commencement Date (or such earlier
date of Subtenant’s occupancy of the Sublease Premises as is provided under Section 2(b) above
with respect to the License), reasonable wear and tear excepted, and excepting
permitted alterations to the Sublease Premises made by Subtenant during the
Sublease Term, including the Tenant Improvements, which Landlord has not
required be removed in connection with providing its consent under the terms of
the Master Lease.  Subtenant shall also
remedy any Hazardous Substance contamination which is the result of the act or
omission of Subtenant, its agents, employees, contractors, invitees or
licensees, by promptly remediating or removing such contamination in its
entirety.  Effective upon the Sublease
Expiration Date, Sublandlord’s title to the FF&E, in its then as-is condition,
shall automatically pass to Subtenant without any representation or warranty
from Sublandlord except that the FF&E shall be free of adverse interest to
title created by or through Sublandlord.

 

c.     Inspection Rights. 
In addition to all other rights under the provisions of the Master Lease
incorporated into this Sublease, Sublandlord expressly reserves the right to
conduct the inspections in the Sublease Premises during the Term as described
in Article 22 of the Master Lease.

 

16.   Consent of Landlord. 
Paragraph 17.1 of the Master Lease requires Sublandlord to obtain the
written consent of Landlord to this Sublease. 
The effectiveness of this Sublease shall be conditioned upon Sublandlord’s
receipt of such consent.  To the

 

6

 

extent agreed to by Landlord, such consent will include a right on behalf
of Subtenant to cure defaults of Sublandlord under the Master Lease on such
terms and conditions as are reasonably satisfactory to Sublandlord and
Subtenant in order to preserve Subtenant’s occupancy of the Premises.

 

17.   Termination of the Lease. 
If for any reason the term of the Master Lease shall terminate prior to
the Sublease Expiration Date, this Sublease shall automatically be terminated
and Sublandlord shall not be liable to Subtenant by reason thereof unless said
termination is the result of a Sublandlord Termination Event (as defined
below).  “Sublandlord Termination
Event” shall mean a termination of the Master Lease where Subtenant is not
permitted or offered the opportunity to remain in the Sublease Premises on
substantially the same terms as this Sublease which termination is the result
of:  (i) a default of Sublandlord
under the Master Lease, and said Sublandlord default was not as a result of a
Subtenant default under this Sublease; (ii) the result of any election or
exercise of a right or option held by Sublandlord under the Master Lease to
effect such termination other than as a result of the occurrence of damage or
destruction or eminent domain; or (iii) Sublandlord’s mutual agreement
with Landlord to terminate the Master Lease outside the parameters of the
Master Lease.  In the event of any
Sublandlord Termination Event, Sublandlord shall be liable for, and Subtenant
shall be entitled to recover, Subtenant’s actual out-of-pocket costs incurred
to secure substantially comparable alternative space resulting from the
termination of this Sublease due to such Sublandlord Termination Event.  In no event shall Subtenant’s damages include
any consequential, indirect or punitive damages.

 

18.   Assignment and Subletting.

 

a.     Independent of and in addition to
any provisions of the Master Lease, including without limitation the obligation
to obtain Landlord’s consent to any sublease or assignment, it is understood
and agreed that, except as expressly provided herein, Subtenant shall have no
right to assign or sublet the Sublease Premises or any portion thereof or any
right or privilege appurtenant thereto and any such assignment or subletting
shall be void.  Subtenant shall have the
right to assign this Sublease or any interest therein, and to suffer or permit
any other person (other than agents, servants or associates of the Subtenant)
to occupy or use the Sublease Premises, only upon the prior written consent of
Sublandlord, which consent shall not be unreasonably withheld, and to the
extent required under the Master Lease, the prior written consent of
Landlord.  Any assignment or subletting
by Subtenant without Sublandlord’s prior written consent shall be void and
shall, at the option of Sublandlord, terminate this Sublease.

 

b.     Subtenant shall advise
Sublandlord by notice of (i) Subtenant’s intent to assign or sublease this
Sublease, (ii) the name of the proposed assignee or subtenant and evidence
reasonably satisfactory to Sublandlord that such proposed assignee or subtenant
is comparable in reputation, stature and financial condition to tenants then
leasing comparable space in comparable buildings, and (iii) the terms of
the proposed assignment or sublease. 
Sublandlord shall, within twenty (20) days of receipt of
such notice, and any additional information requested by Landlord concerning
the proposed assignee’s or sublessee’s financial responsibility, elect one of
the following:

 

1.     Consent to such proposed
assignment or sublease;

 

2.     Refuse such consent, which
refusal shall be on reasonable grounds; or

 

3.     Elect to terminate this Sublease
in the event the proposed transfer is for all or substantially all of Subtenant’s
rights and/or obligations under this Sublease.

 

c.     In the event that Sublandlord
shall consent to an assignment or sublease under the provisions of this Section 18,
Subtenant shall pay Sublandlord’s reasonable and actual processing costs and
reasonable attorneys’ fees incurred in giving such consent.  Notwithstanding any permitted assignment or
sublease, Subtenant shall at all times remain directly, primarily and fully
responsible and liable for all payments owed by Subtenant under the Sublease
and for compliance with all obligations under the terms, provisions and
covenants of the Sublease.  If for any
proposed assignment or sublease, Subtenant receives Rent or other
consideration, either initially or over the term of the assignment or sublease,
in excess of the Rent required by this Sublease, after a deduction for the
following: (a) any brokerage commission paid by Subtenant in connection
therewith, (b) any free rent concessions or tenant improvement allowances,
and (c) any reasonable attorneys’ fees in connection with preparing and
negotiating an assignment or sublease document (“Profit”), Subtenant
shall pay to Sublandlord as additional Rent, fifty percent (50%)
of such Profit or other consideration received by Subtenant within five (5) days
of its receipt by Subtenant or, in the event the assignee or sublessee makes
payment directly to Sublandlord, Sublandlord shall refund fifty percent
(50%) of the Profit to Subtenant after deducting (a), (b) and (c) above.

 

19.   Environmental Condition.

 

a.     Base
Line Study.  Sublandlord shall
provide Subtenant with a Phase I environmental assessment (the “Base Line

 

7

 

Study”)
with respect to the Sublease Premises in accordance with ASTM Standard E 1527-00
which, pursuant to such standard, shall not include any surface or subsurface
testing on the Sublease Premises.  The
Base Line Study shall assess the condition of the Sublease Premises as it
exists prior to any occupancy thereof by Subtenant and shall be approved by
Subtenant within ten (10) days of receipt thereof by Subtenant as a
condition to the Sublease Commencement Date. 
Subtenant’s failure to approve the results of such Base Line Study
within such ten (10)-day period shall permit either Sublandlord or Subtenant to
terminate this Sublease by written notice to the other within three (3) business
days of the expiration of such ten (10)-day period, subject, however, to
Sublandlord’s right (without any obligation of exercise) to cure such
disapproved matter to Subtenant’s reasonable satisfaction within a reasonable
period of time after Sublandlord’s receipt of notice of such disapproval.  During the Term of the Sublease, Subtenant
shall deliver to Sublandlord, upon Sublandlord’s request therefor, copies of
all notices, filings and permits delivered to, or received from, regulatory and
governmental entities having jurisdiction over Subtenant’s operations on the
Sublease Premises with respect to the use, storage or disposal of Hazardous
Substances and a current inventory of all Hazardous Substances used and/or stored
on the Sublease Premises.

 

b.     Vacation.  Subtenant, at Subtenant’s sole cost and
expense, shall conduct an exit environmental assessment (the “Subtenant Exit
Study”) substantially the same in scope as the Base Line Study
(collectively, the “Studies”) prior to the Sublease Expiration Date as a
condition of vacation of the Sublease Premises. 
The Subtenant Exit Study shall be conducted not earlier than fifteen
(15) days prior to Subtenant’s vacation of the Sublease Premises.  In the event the Subtenant Exit Study reveals
contamination not described in the Base Line Study, then Subtenant shall
promptly remediate or remove such contamination in its entirety.  Subtenant shall maintain the results of the
Base Line Study and the Subtenant Exit Study in strict confidence and shall
not, without Sublandlord’s prior written consent, which may be withheld in its
sole discretion, disclose the results thereof, or any portion thereof to any
third party, excepting Subtenant’s directors, officers, employees, representatives
and consultants on a need-to-know basis, unless Subtenant is compelled under
applicable law to disclose all or any portion of the Studies.  All such Studies shall be delivered to
Sublandlord.

 

20.   Tenant Improvements. 
Subtenant shall have the right to select a general contractor, and
architectural and engineering firms for the construction of the Tenant
Improvements, subject to Landlord’s and Sublandlord’s approval of any such
selection.  The Tenant Improvements shall
be constructed by Subtenant at its sole cost and expense, subject to the
provisions of Section 4(f), and further subject to Article 7
of the Master Lease and Landlord’s approval, in accordance with the following:

 

a.     Plans. 
Subtenant shall prepare and submit to Sublandlord plans and working
drawings for the construction of the Tenant Improvements, such plans to contain
all such information as may be required for the construction of the Tenant
Improvements.  Sublandlord shall approve
the plans within five (5) business days after receipt of same or designate
specific changes required to be made to the plans.  Subtenant shall make the required changes,
and resubmit the revised plans to Sublandlord. 
The revised plans shall be approved or disapproved by Sublandlord within
five (5) business days of receipt of the same.  This procedure shall be repeated until the
plans are finally approved by Sublandlord (“Final Plans”).

 

b.     Procedure for Construction of
Tenant Improvements.  Subtenant shall begin the
construction of the Tenant Improvements within thirty (30) days of Sublandlord’s
approval of the Final Plans and shall complete the construction of the Tenant
Improvements in a good, workmanlike and lien-free manner in compliance with all
applicable laws, codes and private restrictions.  Subtenant shall only use contractors
acceptable to Sublandlord, in its sole discretion, who shall maintain customary
policies of “All Risk” insurance with respect to such construction with such
carriers and in such amounts as are acceptable to Sublandlord in its sole but
reasonable discretion consistent with customary market terms and conditions
commonly required by landlords for installation of work of the size and scope
of the Tenant Improvements, and otherwise meeting the requirements of the
Master Lease.  All such policies shall
name each of Sublandlord and Landlord as “additional insureds,” evidence of
which shall be provided to Sublandlord prior to commencement of
construction.  Subtenant hereby
indemnifies, defends and holds Sublandlord and Landlord harmless from and
against all claims or liabilities arising from such construction.

 

c.     Changes. 
If Subtenant requires any change, addition or alteration to the Final
Plans (“Changes”), and the cost to complete such Changes, individually
or in the aggregate, is equal to or greater than Fifty Thousand Dollars
($50,000), Subtenant shall submit a written request to Sublandlord setting
forth in reasonable detail the description of the proposed change.  If Sublandlord approves such Changes, which
approval shall not be unreasonably withheld on the basis described in Section 15(a),
Subtenant shall, at Subtenant’s sole cost and expense, promptly make such
Changes.

 

d.     Removal. Subtenant shall be required to
remove the Tenant Improvements upon the Sublease Expiration Date (or earlier
termination of this Sublease) to the extent such removal is required by
Landlord of Sublandlord under the Master Lease.

 

8

 

21.   Limitation of Estate. 
Subtenant’s estate shall in all respects be limited to, and be construed
in a fashion consistent with, the estate granted to Sublandlord by
Landlord.  Subtenant shall stand in the
place of Sublandlord and shall defend, indemnify and hold Sublandlord harmless
with respect to all covenants, warranties, obligations, and payments made by
Sublandlord under or required of Sublandlord by the Master Lease with respect
to the Sublease Premises.  In the event
Sublandlord is prevented from performing any of its obligations under this
Sublease by a breach by Landlord of a term of the Master Lease, then
Sublandlord’s sole obligation in regard to its obligation under this Sublease
shall be to use reasonable efforts in diligently pursuing the correction or
cure by Landlord of Landlord’s breach.

 

22.   Entire Agreement. 
It is understood and acknowledged that there are no oral agreements
between the parties hereto affecting this Sublease and this Sublease supersedes
and cancels any and all previous negotiations, arrangements, brochures,
agreements and understandings, if any, between the parties hereto or displayed
by Sublandlord to Subtenant with respect to the subject matter thereof, and
none thereof shall be used to interpret or construe this Sublease.  This Sublease, and the exhibits and schedules
attached hereto, contain all of the terms, covenants, conditions, warranties
and agreements of the parties relating in any manner to the rental, use and
occupancy of the Sublease Premises and shall be considered to be the only
agreements between the parties hereto and their representatives and
agents.  None of the terms, covenants,
conditions or provisions of this Sublease can be modified, deleted or added to
except in writing signed by the parties hereto. 
All negotiations and oral agreements acceptable to both parties have
been merged into and are included herein. 
There are no other representations or warranties between the parties,
and all reliance with respect to representations is based totally upon the
representations and agreements contained in this Sublease.

 

23.   Acceptance. 
The submission of this Sublease to Subtenant does not constitute an
offer to lease.  This Sublease shall
become effective only upon the execution and delivery thereof by both
Sublandlord and Subtenant.  Sublandlord
shall have no liability or obligation to Subtenant by reason of Sublandlord’s
rejection of this Sublease or a failure to execute, acknowledge and deliver
same to Subtenant.

 

24.   Miscellaneous.  This Sublease shall be governed by and
interpreted in accordance with the laws of the State of California, except as
they may be preempted by federal law.  In
any action brought or arising out of this Sublease, the parties hereto hereby
consent to the jurisdiction of any federal or state court having proper venue
within the State of California and also consent to the service of process by
any means authorized by California or federal law.  The parties hereby agree that any proceeding
relating to any dispute under this Sublease or with respect to the
interpretation of any provision of this Sublease shall be conducted in San
Diego, California.  The headings used in
this Sublease are for convenience only and shall be disregarded in interpreting
the substantive provisions of this Sublease. 
Time is of the essence of each term of this Sublease.  If any provision of this Sublease shall be
determined by a court of competent jurisdiction to be invalid, illegal or
unenforceable, that portion shall be deemed severed therefrom and the remaining
parts shall remain in full force as though the invalid, illegal, or unenforceable
portion had never been a part thereof. 
This Sublease may be executed in one or more counterparts, all of which,
taken together, shall constitute one and the same Sublease.  In the event of any litigation or similar
proceeding, action or arbitration between the parties with respect to this
Sublease, the prevailing party shall be entitled to recover reasonable attorney’s
fees and cost incurred in connection therewith. 
Each of Sublandlord and Subtenant, respectively, warrant that it has the
authority to enter into and perform its respective obligations under this
Sublease, subject to the terms of the Master Lease, and that the individual
executing this Sublease on behalf of Sublandlord and Subtenant, respectively,
has the authority to enter into this Sublease and to execute all other
documents and perform all other acts as contemplated herein.

 

[Remainder of page intentionally
left blank.]

 

9

 

IN WITNESS WHEREOF, the
parties have entered into this Sublease as of the date first written above.

 

	
   

  	
  SUBLANDLORD:

  
	
   

  	
   

  	
   

  
	
   

  	
  BIOGEN IDEC
  INC.,

  
	
   

  	
  a Delaware
  corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Edward M.
  Rodriguez

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Edward M.
  Rodriguez

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President,
  Finance

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SUBTENANT:

  
	
   

  	
   

  	
   

  
	
   

  	
  MACROPORE
  BIOSURGERY, INC.,

  
	
   

  	
  a Delaware
  corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marc Hedrick

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Marc Hedrick

  	
   

  	
   

  
	
   

  	
  Title: 

  	
  President

  	
   

  	
   

  
													

 

10

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