Document:

EXHIBIT 10.31

 

Agreement for Exclusive Right of Negotiation

 

This
Agreement for Exclusive Right of Negotiation (“Agreement”) is between the OLYMPUS CORPORATION, a Japan Corporation, located at 2-43-2
Hatagaya Shibuya-ku, Tokyo, Japan (including, its subsidiary, Olympus
Medical Systems Corp. collectively referred to as “Olympus”) and CYTORI THERAPEUTICS, INC.  a Delaware
Corporation, located at 3020 Callan Road, San Diego, CA 92121 (“Cytori”).

 

WHEREAS, Olympus and Cytori desire to enter into a marketing
and sales cooperation whereby the parties would
cooperate in developing and evaluating stem and regenerative cell therapies for
the *** Market (as defined below), and;

 

WHEREAS, as part of Olympus’ (i) due diligence requirements and (ii) business evaluation to engage
in such an endeavor Olympus
desires to prepare sufficient market research and clinical evaluations for
these therapeutic areas in conjunction with Cytori, which is anticipated to
require a significant effort, and;

 

WHEREAS,
Olympus desires that Cytori
shall negotiate exclusively with Olympus relative to the *** Market (as
defined below) during the course of its due diligence and market research, and
supportive assistance to Olympus in the design and preparation of such clinical
evaluations.

 

NOW, THEREFORE, in consideration of the mutual agreements and covenants
contained herein, the parties hereby agree as follows:

 

1.  Cytori grants Olympus the exclusive
world-wide right to discuss and negotiate with Cytori for exclusive marketing
and sales rights for stem and regenerative cell therapies for treatment of
conditions of the                        ***                                              
                                                  ***                                                (“*** Market”.)  During the Term (as defined below)
Cytori shall not enter into discussions or agreement with any third party
regarding such marketing and sales rights for stem and regenerative cell therapies for the
*** Market.

 

The *** Market
rights contemplated specifically do not include rights for the treatment of         ***                                      
                                  ***.

 

2.  The Olympus rights shall
continue for a period of eighteen (18) months (the “Term”) from the date of delivery
and installation of the fewer of 6 or the final Celution I system which both parties accept as final,
provided that reasonable and appropriate extensions of the Term shall be
granted if Olympus has exercised reasonably diligent efforts to complete its
clinical evaluations of the *** Market during the initial Term.

 

3.  Cytori
and Olympus acknowledge and agree that the Memorandum entitled “Spirit
of Understanding” dated 2/2/2006 is
non-binding.  

 

4.  Olympus shall
be responsible for all costs and expenses related to its due diligence
market research and clinical evaluations, provided that Cytori shall provide
advice and consultation with respect to the design and implementation of the
clinical study without charge to Olympus. In addition, Cytori shall provide designated Olympus personnel with appropriate training on the
maintenance and use of the  Cytori
products for clinical evaluation without charge to Olympus.
Upon reasonable notice, Cytori shall also provide skilled personnel to assist
Olympus personnel and their designees in the first three procedures at the
locations selected by Olympus.
All travel and lodging expenses
for  Cytori
personnel in connection with such training shall be borne by Cytori.  Cytori shall provide the
Celution device and disposables to Olympus at Cytori’s cost for manufacture and
delivery, and Cytori agrees to repair the devices provided to Olympus as
necessary, and without charge, provided the device has been handled in
accordance with the training and instructions provided. Cytori shall have access to and the right to use all
results of all market research and
clinical studies, on which Olympus has right to grant such access or use,
sponsored by Olympus as described above for all reasonable uses that are not
contrary to the exclusive rights as granted to Olympus herein. 

 

5.  As consideration for exclusive rights of
negotiation granted to Olympus herein, Olympus shall pay Cytori (via wire
transfer) a non-refundable fee of US$1,500,000. (One Million
Five Hundred Thousand US Dollars) within 60 days of the Effective Date of this
Agreement.  In the event the
parties are successful in negotiating a comprehensive agreement for the
marketing and sales rights to the *** Market (within the Term and any
extensions thereto), the full amount of the fee paid by Olympus hereunder shall
be

 

*** Material has been omitted pursuant to a request for confidential
treatment filed separately with the Securities and Exchange Commission.

 

 

credited to Olympus against any amounts due and
payable by Olympus pursuant to such comprehensive agreement (including any
milestone or up-front payment at Olympus’ sole discretion).

 

6. Olympus and Cytori shall each pay their own
respective legal and accounting fees and expenses incurred in connection with
this and any further resulting transaction. 

 

7.             Miscellaneous
Provisions.

 

7.1           This
Agreement shall in all respects be governed by and construed in accordance with
the laws of New York without reference to principles of conflicts of laws that
would require the application of the laws of another jurisdiction.  All disputes arising out of or in connection
with this Agreement, or any relationship created by or in accordance with this
Agreement, shall be finally settled under the Rules of Arbitration of the
International Chamber of Commerce (the “Rules”) by
three arbitrators. The place of the arbitration and all hearings and meetings
shall be Singapore unless the Parties to the arbitration otherwise agree. The
language of the arbitral proceedings shall be English.  

 

7.2           Except
as otherwise expressly provided herein, the provisions hereof shall inure to
the benefit of, and be binding upon, the successors, assigns, heirs, executors
and administrators of the Parties.  Neither this Agreement nor any right, license, privilege or
obligation provided herein may be assigned or transferred by either
Party without the other Party’s prior written consent.  

 

7.3           This
Agreement constitutes the entire understanding and agreement between the
Parties with regard to the subject matter hereof .

 

7.4           Any
notice required or permitted by this Agreement shall be in writing and shall be
deemed sufficient when delivered personally or when received if sent by fax or
48 hours after being deposited with a national overnight delivery service, 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.

 

	
  To Cytori: 

   

  3020 Callan Road, San Diego, CA 92121, U.S.A

   

  Attn: Christopher J. Calhoun

  Fax: 858-450-4331

  	
   

  	
  To Olympus: 

   

  2-3 Kuboyama-cho,

  Hachioji-shi, Tokyo, 192-8512, Japan

   

  Attn: Yasunobu Toyoshima

  Fax: +81-426-91-7350

  

 

7.5           This
Agreement may be modified or amended only by an instrument in writing duly executed by authorized
representatives both of the Parties.

 

7.6           No waiver
of any provision hereof shall be effective unless made in writing and duly
executed by an authorized representative of the waiving Party.  

 

7.7           This
Agreement may be executed by facsimile signature in any number of counterparts,
each of which shall be an original, but all of which together shall constitute
one instrument.

 

7.8           Should any
provision of this Agreement be determined to be illegal or unenforceable, such
determination shall not affect the remaining provisions of this Agreement.  To the extent permitted by applicable law,
the Parties waive any current or future provision of law which renders any
provision of this Agreement unenforceable in any respect.  The Parties agree that any illegal or
unenforceable provision shall be construed or reformed so as to enforceably
effectuate, to the maximum possible extent, the Parties’ expressed intent.

 

IN WITNESS WHEREOF, the Parties
hereto have executed this Agreement for Exclusive Right of Negotiation.

 

OLYMPUS CORPORATION

 

 

	
  By

  	
  /s/
  Masaaki Terada

  	
   

  	
  Date:

  	
    
  February 22, 2006

  	
   

  

 

 

	
   

  	
  Masaaki Terada

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Director / Corporate R&D Center

  	
   

  	
   

  	
   

  	
   

  

 

	
  CYTORI THERAPEUTICS, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By

  	
  /s/
  Christopher J. Calhoun

  	
   

  	
  Date:

  	
    
  February 22, 2006

  	
   

  
	
   

  	
  Christopher J. Calhoun

  	
   

  
	
   

  	
  CEOCOMMON STOCK

  	
   

  	
  COMMON STOCK

  
	
  PAR VALUE $.001

  	
   

  	
  THIS CERTIFICATE IS TRANSFERABLE IN

  
	
   

  	
   

  	
  NEW YORK, NY OR CHICAGO, IL

  

	
  Certificate

  	
   

  	
  Shares

  
	
  Number

  	
   

  	
  **600620******

  
	
  WWWW 00000600

  	
   

  	
  ***600620*****

  
	
   

  	
   

  	
  ****600620****

  
	
   

  	
  INCORPORATED UNDER THE LAWS OF DELAWARE

  	
  *****600620***

  
	
   

  	
   

  	
  ******600620**

  

 

	
  THIS
  CERTIFIES THAT

  	
  MR. SAMPLE & MRS. SAMPLE &

  MR. SAMPLE & MRS. SAMPLE

  	
   CUSIP 23283K 10 5 SEE REVERSE FOR CERTAIN DEFINITIONS

  
	
  is the owner of

  	
  * * * SIX HUNDRED THOUSAND

  SIX HUNDRED AND TWENTY* * *

  	
   

  

 

FULLY-PAID AND NON-ASSESSABLE SHARES OF THE COMMON
STOCK OF

Cytori
Therapeutics, Inc. (hereinafter called the “Company”),
transferable on the books of the Company in person or by duly authorized
attorney, upon surrender of this Certificate, properly endorsed. This
Certificate and the shares represented hereby, are issued and shall be held
subject to all of the provisions of the Articles of Incorporation, as amended,
and the By-Laws, as amended, of the Company (copies of which are on file with
the Company and with the Transfer Agent), to all of which each holder, by
acceptance hereof assents. This Certificate is not valid unless countersigned
and registered by the Transfer Agent and Registrar.

Witness the
facsimile seal of the Company and the facsimile signatures of its duly
authorized officers.

	
  /s/ MARK H. HEDRICK

  	
   

  	
  DATED <<Month
  Day, Year>>

  
	
  President

  	
  

  	
  

  COUNTERSIGNED AND
  REGISTERED:

  COMPUTERSHARE INVESTOR SERVICES, LLC.

  (CHICAGO)

  TRANSFER AGENT AND REGISTRAR,

  
	
  /s/ [ILLEGIBLE]

  	
   

  	
  By

  	
   

  
	
  Secretary

  	
   

  	
   

  	
  AUTHORIZED
  SIGNATURE

  

 

SECURITY INSTRUCTIONS ON REVERSE

CYTORI THERAPEUTICS

THIS CERTIFICATE EVIDENCES AND ENTITLES THE HOLDER
HEREOF TO CERTAIN RIGHTS AS SET FORTH IN A RIGHTS AGREEMENT BETWEEN CYTORI
THERAPEUTICS, 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 CYTORI
THERAPEUTICS, 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. CYTORI THERAPEUTICS, 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 THEREOF (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.

	
  The following abbreviations, when used in the
  inscription on the face of this certificate, shall be construed as though
  they were written out in full according to applicable laws or regulations:

  
	
  TEN COM

  	
  - as tenants in common

  	
  UNIF GIFT MIN ACT-

  	
  . . . . . . . . . .Custodian . . . . . .
  . . . . . . . . .

  
	
   

  	
   

  	
   

  	
       (Cust)                                     (Minor)

  
	
  TEN ENT

  	
  - as tenants by the entireties

  	
   

  	
  under Uniform Gifts to Minors Act . . .
  . . . . . . . . . .

  
	
   

  	
   

  	
   

  	
                                                                                (State)

  
	
  JTTEN

  	
  - as joint tenants with right of
  survivorship

  	
  UNIF TRF MIN ACT

  	
  . . . . . . . . . . . . . . .Custodian
  (until age. . .). . . . . . . . . . .

  
	
   

  	
    and not as tenants in common

  	
   

  	
             (Cust)                                                                (Minor)

  
	
   

  	
   

  	
   

  	
  under Uniform Transfers to Minors Act. .
  . . . . . . . .

  
	
   

  	
   

  	
   

  	
                                                                                      (State)

  
	
   

  	
  Additional abbreviations may also be
  used though not in the above list.

  

 

	
  

  	
  PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

  
	
  For value received,                                                         hereby
  sell, assign and transfer unto

  	
   

  
	
   

  
	
  (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE,
  OF ASSIGNEE)

  
	
   

  
	
   

  
	
   

  
	
   

  	
  Shares

  
	
  of the capital stock represented by the within Certificate, and do hereby
  irrevocably constitute and appoint

  	
   

  
	
   

  	
  Attorney

  
	
  to transfer the said stock on the books
  of the within-named Corporation with full power of substitution in the
  premises.

  
	
   

  
	
  Dated:

  	
   

  	
  20

  	
   

  	
   

  	
  Signature(s) Guaranteed: Medallion
  Guarantee Stamp

  
	
  

  

  Signature:

  	
   

  	
   

  	
  THE SIGNATURE(S) SHOULD BE GUARANTEED BY
  AN ELIGIBLE GUARANTOR INSTITUTION (Banks, Stockbrokers, Savings and Loan
  Associations and Credit Unions) WITH MEMBERSHIP IN AN APPROVED SIGNATURE
  GUARANTEE MEDALLION PROGRAM, PURSUANTTO S.E.C. RULE 17Ad-15.

  
	
  Signature: 

  	
   

  	
   

  	
   

  
	
   

  	
  Notice: The signature to this assignment
  must correspond with the name

  as written upon the face of the certificate, in every particular,

  without alteration or enlargement, or any change whatever.

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