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ARTICLE I. DEFINITIONS | 2 | |||||||
ARTICLE II. CERTAIN TRANSACTION COMPONENTS | 11 | |||||||
2.1 Concurrent Execution. | 11 | |||||||
2.2 Right of First Negotiation for Non-Licensed Cardiovascular Indications. | 11 | |||||||
2.3 Additional Investment. | 13 | |||||||
2.4 Phase I Milestone Fee. | 13 | |||||||
2.5 Exclusivity. | 14 | |||||||
2.6 Retained Rights. | 14 | |||||||
2.7 Costs Borne by Each Party. | 15 | |||||||
2.8 Certain Restrictions on Athersys’ Activities Outside of Cardiovascular Indications. | 15 | |||||||
ARTICLE III. JOINT STEERING COMMITTEE | 15 | |||||||
3.1 Joint Steering Committee. | 15 | |||||||
3.2 Subcommittees. | 15 | |||||||
3.3 Chairperson. | 15 | |||||||
3.4 JSC Meetings. | 15 | |||||||
3.5 Responsibilities of the Joint Steering Committee. | 16 | |||||||
3.6 Voting; Decision-Making. | 19 | |||||||
3.7 JSC Disputes. | 19 | |||||||
ARTICLE IV. PRE-CLINICAL DEVELOPMENT | 20 | |||||||
4.1 Existing Pre–Clinical Development Programs. | 20 | |||||||
4.2 Costs for Existing Pre-Clinical Development Programs. | 21 | |||||||
4.3 New Pre-Clinical Development Programs. | 21 | |||||||
ARTICLE V. CLINICAL DEVELOPMENT | 21 | |||||||
5.1 Proposed Clinical Plans; Clinical Development Plans. | 21 | |||||||
5.2 Athersys Responsibilities. | 21 | |||||||
5.3 Angiotech Responsibilities. | 22 | |||||||
5.4 Subcontracting. | 22 |
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ARTICLE VI. OPT-OUT RIGHTS | 23 | |||
6.1 Opt-Out Rights. | 23 | |||
6.2 Development Updates. | 25 | |||
6.3 Failure to Exercise Sole Development Option. | 25 | |||
6.4 Diligence Requirement. | 25 | |||
ARTICLE VII. COSTS, PAYMENTS AND FINANCIAL RECORD KEEPING | 26 | |||
7.1 Clinical Development Costs. | 26 | |||
7.2 Development Costs Quarterly Reconciliation. | 26 | |||
7.3 Milestone Payments. | 27 | |||
7.4 Profit Sharing. | 27 | |||
7.5 Royalties on Sole Development Products. | 27 | |||
7.6 Calculation and Payment of Royalties. | 29 | |||
7.7 Sharing of Sole Development Income. | 30 | |||
7.8 Financial Record Keeping. | 31 | |||
7.9 Audits. | 31 | |||
7.10 Late Payments. | 31 | |||
ARTICLE VIII. COMMERCIALIZATION | 32 | |||
8.1 Commercialization of Cell Therapy Products. | 32 | |||
ARTICLE IX. MANUFACTURE AND SUPPLY OF CLINICAL DEVELOPMENT CANDIDATES AND CELL THERAPY PRODUCTS | 32 | |||
9.1 Athersys’ Manufacturing Obligation. | 32 | |||
9.2 Manufacturing Costs. | 33 | |||
9.3 Manufacturing Compliance. | 33 | |||
9.4 Product Conformity. | 33 | |||
9.5 Ordering; Forecasting; Acceptance and Rejection. | 33 | |||
9.6 Inspection. | 34 | |||
9.7 Supply Disruption. | 34 | |||
9.8 Back-Up Supplier. | 34 |
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ARTICLE X. REGULATORY MATTERS | 35 | |||
10.1 Ownership of Regulatory Documentation and Reference Rights; Regulatory Strategy. | 35 | |||
10.2 Regulatory Communications. | 35 | |||
10.3 Other Regulatory Responsibilities. | 36 | |||
10.4 Cell Therapy Product Complaints and Recalls. | 36 | |||
10.5 Compliance With All Applicable Laws and Regulations; Cooperation. | 36 | |||
ARTICLE XI. INTELLECTUAL PROPERTY | 37 | |||
11.1 Existing Intellectual Property Rights Retained. | 37 | |||
11.2 Ownership Of New Intellectual Property. | 37 | |||
ARTICLE XII. CLINICAL PROGRAM RECORD KEEPING | 37 | |||
12.1 Scientific, Patent and Regulatory Records. | 37 | |||
12.2 Review of Records. | 37 | |||
12.3 Policies For Records. | 38 | |||
ARTICLE XIII. CONFIDENTIAL INFORMATION | 38 | |||
13.1 Confidential Information. | 38 | |||
13.2 Confidentiality Obligations. | 38 | |||
13.3 Permitted Disclosures. | 39 | |||
13.4 Publication. | 41 | |||
ARTICLE XIV. REPRESENTATIONS AND WARRANTIES | 41 | |||
14.1 Authority. | 41 | |||
14.2 No Conflicts. | 41 | |||
14.3 Additional Representations and Warranties of Athersys. | 42 | |||
14.4 Additional Covenants of Athersys. | 44 | |||
14.5 Additional Covenants of Angiotech. | 46 | |||
14.6 Disclaimer Of Warranties. | 47 | |||
ARTICLE XV. INDEMNIFICATION AND INSURANCE | 47 | |||
15.1 Indemnification By Athersys. | 47 | |||
15.2 Indemnification By Angiotech. | 48 | |||
15.3 Insurance. | 49 |
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ARTICLE XVI. TERM AND TERMINATION | 49 | |||
16.1 Term. | 49 | |||
16.2 Termination. | 49 | |||
16.3 Effects of Termination. | 52 | |||
16.4 Survival Of Obligations. | 53 | |||
ARTICLE XVII. DISPUTE RESOLUTION | 53 | |||
17.1 Dispute Resolution Process. | 53 | |||
17.2 Injunctive Relief. | 54 | |||
ARTICLE XVIII. MISCELLANEOUS PROVISIONS | 55 | |||
18.1 Governing Law. | 55 | |||
18.2 Assignment. | 55 | |||
18.3 Compliance With Laws. | 55 | |||
18.4 Further Assurances. | 55 | |||
18.5 Severability. | 55 | |||
18.6 Waivers And Amendments; Preservation Of Remedies. | 56 | |||
18.7 Headings. | 56 | |||
18.8 Counterparts. | 56 | |||
18.9 Successors. | 56 | |||
18.10 Notices. | 56 | |||
18.11 No Consequential Damages. | 57 | |||
18.12 Independent Contractor. | 57 | |||
18.13 Complete Agreement. | 57 |
Schedule 1.13
Schedule 1.14
Schedule 1.33
Schedule 1.45
Schedule 2.2
Schedule 4.1
Schedule 7.3
Schedule 7.4
Schedule 14.3(b)
Schedule 14.3(g)
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Schedule 14.3(l) | ||||
EXHIBITS | ||||
Exhibit A – Note Purchase Agreement | ||||
Exhibit B – License Agreement | ||||
Exhibit C – Sublicense Agreement |
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DEFINITIONS
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Defined Term | Section in which Defined | |
CFOs | 7.2(c) | |
Change of Control | 16.2(e) | |
Change of Control Notice | 16.2(e) | |
CHF Offer | 2.2(b) | |
CHF Offer Notice | 2.2(b) | |
Co-Chair | 3.3 | |
Code | 16.2(c) | |
Developing Party | 6.1 | |
Diligence Requirement | 6.4 | |
Discontinuing Party | 6.1 | |
Existing Third Party Agreement | 4.1 | |
for cause | 16.2(d)(i) | |
GAAP | 1.35 | |
Heads of Research | 3.7(b) | |
Negotiation Notice | 2.2(a) | |
New Pre-Clinical Development Programs | 4.3 | |
Offer Notice | 2.2(a) |
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Defined Term | Section in which Defined | |
Offer Period | 2.2(a) | |
Opt-Out Notice | 6.1 | |
Paying Party | 7.6(a) | |
Phase I Milestone Fee | 2.4(a) | |
Product Specifications | 9.4 | |
Proposed Clinical Plan(s) | 3.5(c) | |
Replacement Fee | 2.4(b)(i) | |
Royalty Recipient | 7.6(a) | |
Sole Development Option | 6.1 | |
Supply Disruption | 9.7 | |
Terms and Conditions | 2.2(b) |
CERTAIN TRANSACTION COMPONENTS
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* | Confidential treatment has been requested for the redacted portions of this exhibit, and such confidential portions have been omitted and filed separately with the Securities and Exchange Commission. |
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JOINT STEERING COMMITTEE
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PRE-CLINICAL DEVELOPMENT
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CLINICAL DEVELOPMENT
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OPT-OUT RIGHTS
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COSTS, PAYMENTS AND FINANCIAL RECORD KEEPING
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* | Confidential treatment has been requested for the redacted portions of this exhibit, and such confidential portions have been omitted and filed separately with the Securities and Exchange Commission. |
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* | Confidential treatment has been requested for the redacted portions of this exhibit, and such confidential portions have been omitted and filed separately with the Securities and Exchange Commission. |
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* | Confidential treatment has been requested for the redacted portions of this exhibit, and such confidential portions have been omitted and filed separately with the Securities and Exchange Commission. |
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COMMERCIALIZATION
MANUFACTURE AND SUPPLY OF CLINICAL DEVELOPMENT CANDIDATES AND CELL THERAPY PRODUCTS
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1618 Station Street
Vancouver, BC Canada V6A 1B6
Fax: 604-221-2330
Attn: Vice President Business Development
1618 Station Street
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Fax: 604-221-2330
Attn: General Counsel
3201 Carnegie Avenue
Cleveland, OH 44115-2634
Fax: (216) 361-9495
Attn: Chief Executive Officer
North Point
901 Lakeside Avenue
Cleveland, OH 44114
Fax: (216) 579-0212
Attn: Thomas A. Briggs, Esq.
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ATHERSYS, INC. | ||||||
By: | ||||||
Name: | ||||||
Title: | ||||||
ANGIOTECH PHARMACEUTICALS, INC. | ||||||
By: | ||||||
Name: | ||||||
Title: | ||||||
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Cost Definitions
1. | “Clinical Development Costs” means, with respect to each Clinical Development Plan, all of the external and internal costs and expenses (including applicable overhead costs and expenses, including applicable general and administrative expenses, but excluding any Commercialization Costs and Commercial Manufacturing Costs) incurred or paid by a Party and its Affiliates in connection with the clinical development of Clinical Development Candidates or Cell Therapy Products, including, without limitation, the following costs to the extent such costs are actually incurred by a Party, accounted for in accordance with U.S. GAAP as consistently applied by such Party and attributable to the activities assigned to it under the Clinical Development Plan (except to the extent such costs constitute Commercialization Costs or Commercial Manufacturing Costs): |
(a) | All direct costs of preparing and conducting clinical trials that is/are subject of the Clinical Development Plan, including all direct costs related to site recruitment, enrollment, project management, site management and monitoring, biostatistics, clinical event classification, medical communication, data management, outcome studies, regulatory submissions and compliance, safety surveillance, clinical monitoring and all Clinical Manufacturing Costs; and | ||
(b) | A reasonable allocation of indirect costs associated with the foregoing. |
2. | “Commercialization Costs” means, with respect to each Cell Therapy Product, all of the external and internal costs and expenses (including applicable overhead costs and expenses, including applicable general and administrative expenses, but excluding any Clinical Development Costs and Commercial Manufacturing Costs) incurred or paid by Angiotech and its Affiliates in connection with the commercialization of Cell Therapy Products, including, without limitation, the following costs to the extent such costs are actually incurred by a Party, accounted for in accordance with U.S. GAAP as consistently applied by such Party and attributable to the promotion, marketing, advertising, sale, or distribution of the Cell Therapy Product and preparing and conducting Phase IV Studies: |
(a) | All direct costs of promoting, marketing, advertising and selling the Cell Therapy Product, including sales commissions, product labels, marketing brochures, graphic and media design, website modification and license fees (if any); | ||
(b) | All Third Party Payments; and | ||
(c) | A reasonable allocation of indirect costs associated with the foregoing; | ||
provided that any costs described above incurred or paid by Angiotech and its Affiliates in connection with the preparation for commercialization of a Clinical Development Candidate that Angiotech reasonably believes will obtain Regulatory Approval for at least one Cardiovascular Indication (and thereby become a “Cell Therapy Product” hereunder) shall also be deemed to be “Commercialization Costs”. |
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3. | “Manufacturing Costs” means, with respect to each Clinical Development Candidate (the “Clinical Manufacturing Costs”) and Cell Therapy Product (the “Commercial Manufacturing Costs”), all of the external and internal costs and expenses (including applicable overhead costs and expenses, including applicable general and administrative expenses, but excluding any Clinical Development Costs) incurred or paid by Athersys and its Affiliates (or Angiotech and its Affiliates if Angiotech has acquired manufacturing rights hereunder) in connection with the manufacturing of Clinical Development Candidates or Cell Therapy Products (as applicable), including, without limitation, the following costs to the extent such costs are actually incurred by the manufacturing Party, accounted for in accordance with U.S. GAAP as consistently applied by the manufacturing Party and attributable to the manufacture and supply of the Clinical Development Candidate or Cell Therapy Product (as applicable) to Angiotech or any Third Party: |
(a) | All direct costs of manufacturing and supply the Clinical Development Candidate or Cell Therapy Product (as applicable), including all direct costs of raw materials, labor, license fees (if any), maintenance and repair of equipment used to manufacture the Clinical Development Candidate or Cell Therapy Product (as applicable), storage and packaging and shipping costs; and | ||
(b) | A reasonable allocation of indirect costs associated with the foregoing, including depreciation associated with the cost of capital for equipment used to manufacture the Clinical Development Candidate or Cell Therapy Product (as applicable). |
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Clinical Development Plans
Strategic Alliance Agreement and attached hereto]
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Patent Rights Related To MAPCs
APPLICATION | U.S. FILING DATE / | |||||||||||
NO./ | NATIONAL PHASE | |||||||||||
PUBLICATION | PATENT | PRIORITY | DATE / | |||||||||
NO. | NO. | COUNTRY | INFORMATION | TITLE | PATENT ISSUE DATE | |||||||
60/147,324 | U.S. | N/A | Totipotent Adult Stem Cells and Methods for Isolation | 5 August 1999 | ||||||||
60/164,650 | U.S. | N/A | Multipotent Adult Stem Cells and Methods for Isolation | 10 November 1999 | ||||||||
PCT/US00/21387 Pub. No.: WO 01/11011 | PCT | 60/147,324 60/164,650 | Multipotent Adult Stem Cells and Methods for Isolation | 4 August 2000 15 Feb. 2001 | ||||||||
784163 | Australia | PCT/US00/21387 60/147,324 60/164,650 | Multipotent Adult Stem Cells and Methods for Isolation | 12/20/05 | ||||||||
2,381,292 | Canada | PCT/US00/21387 60/147,324 60/164,650 | Multipotent Adult Stem Cells and Methods for Isolation | 4 February 2002 | ||||||||
EP 00953840.6 | Europe | PCT/US00/21387 60/147,324 60/164,650 | Multipotent Adult Stem Cells and Methods for Isolation | 5 March 2002 | ||||||||
02109304.0 | Hong Kong | PCT/US00/21387 60/147,324 60/164,650 | Multipotent Adult Stem Cells and Methods for Isolation | 23 December 2002 | ||||||||
147990 | Israel | PCT/US00/21387 60/147,324 60/164,650 | Multipotent Adult Stem Cells and Methods for Isolation | 4 February 2002 | ||||||||
IN/PCT/2002/00311/CHE | India | PCT/US00/21387 60/147,324 60/164,650 | Multipotent Adult Stem Cells and Methods for Isolation | 28 February 2002 |
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APPLICATION | U.S. FILING DATE / | |||||||||||
NO./ | NATIONAL PHASE | |||||||||||
PUBLICATION | PATENT | PRIORITY | DATE / | |||||||||
NO. | NO. | COUNTRY | INFORMATION | TITLE | PATENT ISSUE DATE | |||||||
2001-515800 2003-506075 | Japan | PCT/US00/21387 60/147,324 60/164,650 | Multipotent Adult Stem Cells and Methods for Isolation | 5 February 2002 18 February 2003 | ||||||||
517002 | New Zealand | PCT/US00/21387 60/147,324 60/164,650 | Multipotent Adult Stem Cells and Methods for Isolation | 10/07/04 | ||||||||
86695 | Singapore | PCT/US00/21387 60/147,324 60/164,650 | Multipotent Adult Stem Cells and Methods for Isolation | 09/30/04 | ||||||||
7015037 | U.S. | PCT/US00/21387 60/147,324 60/164,650 | Multipotent Adult Stem Cells and Methods for Isolation | 03/21/06 | ||||||||
11/084,256 Pub. No.: 2005- 0181502-A1** | U.S. | 10/048,757 | Multipotent Adult Stem Cells and Methods for Isolation | 21 March 2005 | ||||||||
11/238,234 Pub.No.: 2006- 0030041-A1** | U.S. | 10/048,757 | Multipotent Adult Stem Cells and Methods for Isolation | 29 September 2005 | ||||||||
2002/1125 | South Africa | PCT/US00/21387 60/147,324 60/164,650 | Multipotent Adult Stem Cells and Methods for Isolation | 8 February 2002 | ||||||||
60/268,786 | U.S. | N/A | Multipotent Adult Stem Cells | 14 February 2001 | ||||||||
60/269,062 | U.S. | N/A | Multipotent Adult Stem Cells, Sources Thereof, Methods of Obtaining and Maintaining Same, Methods of Differentiation Thereof, Methods of Use Thereof and Cells Derived Therefrom | 15 February 2001 |
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APPLICATION | U.S. FILING DATE / | |||||||||||
NO./ | NATIONAL PHASE | |||||||||||
PUBLICATION | PATENT | PRIORITY | DATE / | |||||||||
NO. | NO. | COUNTRY | INFORMATION | TITLE | PATENT ISSUE DATE | |||||||
60/310,625 | U.S. | N/A | Multipotent Adult Stem Cells, Sources Thereof, Methods of Obtaining and Maintaining Same, Methods of Differentiation Thereof, Methods of Use Thereof and Cells Derived Therefore | 7 August 2001 | ||||||||
60/343,836 | U.S. | N/A | Multipotent Adult Stem Cells, Sources Thereof, Methods of Obtaining and Maintaining Same, Methods of Differentiation Thereof, Methods of Use Thereof and Cells Derived Thereof | 25 October 2001 | ||||||||
PCT/US02/04652 WO 02/064748 | PCt | 60/343,836 60/310,625 60/269,062 60/268,786 | Multipotent Adult Stem Cells, Sources Thereof, Methods of Obtaining and Maintaining Same, Methods of Differentiation Thereof, Methods of Use Thereof and Cells Derived Thereof | 14 February 2002 | ||||||||
2002250106 | Australia | PCT/US02/04652 | Multipotent Adult Stem Cells, Sources Thereof, Methods of Obtaining and Maintaining Same, Methods of Differentiation Thereof, Methods of Use Thereof and Cells Derived Thereof | 14 February 2002 | ||||||||
2,438,501 | Canada | PCT/US02/04652 | Multipotent Adult Stem Cells, Sources Thereof, Methods of Obtaining and Maintaining Same, Methods of Differentiation Thereof, Methods of Use Thereof and Cells Derived Thereof | 14 February 2002 |
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APPLICATION | U.S. FILING DATE / | |||||||||||
NO./ | NATIONAL PHASE | |||||||||||
PUBLICATION | PATENT | PRIORITY | DATE / | |||||||||
NO. | NO. | COUNTRY | INFORMATION | TITLE | PATENT ISSUE DATE | |||||||
Appl. No.: 02718998.4 Pub. No.: 1367899 | Europe | PCT/US02/04652 | Multipotent Adult Stem Cells, Sources Thereof, Methods of Obtaining and Maintaining Same, Methods of Differentiation Thereof, Methods of Use Thereof and Cells Derived Thereof | 12 September 03 | ||||||||
04023157.3-2405 Pub No.: 1491093A2 | Europe | PCT/US02/04652 | Multipotent Adult Stem Cells, Sources Thereof, Methods of Obtaining and Maintaining Same, Methods of Differentiation Thereof, Methods of Use Thereof and Cells Derived Thereof | 29 September 2004 29 December 2004 | ||||||||
05100618.7 Pub No. 1068227A | Hong Kong | PCT/US02/04652 | Multipotent Adult Stem Cells, Sources Thereof, Methods of Obtaining and Maintaining Same, Methods of Differentiation Thereof, Methods of Use Thereof and Cells Derived Thereof | 24 January 2005 20 April 2005 | ||||||||
157332 | Israel | PCT/US02/04652 | Multipotent Adult Stem Cells, Sources Thereof, Methods of Obtaining and Maintaining Same, Methods of Differentiation Thereof, Methods of Use Thereof and Cells Derived Thereof | 14 February 2002 | ||||||||
2002-565063 | Japan | PCT/US02/04652 | Multipotent Adult Stem Cells, Sources Thereof, Methods of Obtaining and Maintaining Same, Methods of Differentiation Thereof, Methods of Use Thereof and Cells Derived Thereof | 14 August 2003 |
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APPLICATION | U.S. FILING DATE / | |||||||||||
NO./ | NATIONAL PHASE | |||||||||||
PUBLICATION | PATENT | PRIORITY | DATE / | |||||||||
NO. | NO. | COUNTRY | INFORMATION | TITLE | PATENT ISSUE DATE | |||||||
527527 | New Zealand | PCT/US02/04652 | Multipotent Adult Stem Cells, Sources Thereof, Methods of Obtaining and Maintaining Same, Methods of Differentiation Thereof, Methods of Use Thereof and Cells Derived Thereof | 12 August 2003 | ||||||||
20030512801 | Singapore | PCT/US02/04652 | Multipotent Adult Stem Cells, Sources Thereof, Methods of Obtaining and Maintaining Same, Methods of Differentiation Thereof, Methods of Use Thereof and Cells Derived Thereof | 14 February 2002 | ||||||||
10/467,963 Pub. No.: 20040107453** | U.S. | PCT/US02/04652 | Multipotent Adult Stem Cells, Sources Thereof, Methods of Obtaining and Maintaining Same, Methods of Differentiation Thereof, Methods of Use Thereof and Cells Derived Thereof | 05 January 2004 | ||||||||
11/084,809 Pub. No.: 20050283844** | U.S. | 10/467,963 | Multipotent Adult Stem Cells, Sources Thereof, Methods of Obtaining and Maintaining Same, Methods of Differentiation Thereof, Methods of Use Thereof and Cells Derived Thereof | 21 March 2005 22 December 2005 | ||||||||
2003/6289 | South Africa | PCT/US02/04652 | Multipotent Adult Stem Cells, Sources Thereof, Methods of Obtaining and Maintaining Same, Methods of Differentiation Thereof, Methods of Use Thereof and Cells Derived Thereof | 23 February 2005 | ||||||||
60/389,799 | U.S. | N/A | Pluripotency Of Mesenchymal Stem Cells Derived From Adult Marrow | 19 June 2002 |
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NO./ | NATIONAL PHASE | |||||||||||
PUBLICATION | PATENT | PRIORITY | DATE / | |||||||||
NO. | NO. | COUNTRY | INFORMATION | TITLE | PATENT ISSUE DATE | |||||||
60/429,631 | U.S. | N/A | Homologous Recombination in Multipotent Adult Progenitor Cells | 27 November 2002 | ||||||||
PCT/US03/38811 Pub. No.: WO/2004/050859 | PCT | 60/429,631 | Homologous Recombination in Multipotent Adult Progenitor Cells | 25 November 2003 | ||||||||
Docket No.: | ||||||||||||
890003-2003.1** | U.S. | PCT/US03/38811 | Homologous Recombination in Multipotent Adult Progenitor Cells | 25 May 2005 | ||||||||
92133407 | Taiwan | 60/429,631 | Homologous Recombination in Multipotent Adult Progenitor Cells | 27 November 2003 | ||||||||
60/484,318 | U.S. | N/A | Enhanced Neuronal Differentiation of Stem Cells | 2 July 2003 | ||||||||
PCT/US2004/021553 WO 2005-003320 | PCT | 60/484,318 | Enhanced Neuronal Differentiation of Stem Cells | 2 July 2004 | ||||||||
Docket No.: 890003- 2006.1** | U.S. | PCT/US2004/021553 | Enhanced Neuronal Differentiation of Stem Cells | 22 December 2005 | ||||||||
60/484,563 | U.S. | N/A | Tissue-Engineered Blood Vessels | 01 July 2003 | ||||||||
60/484,595 | U.S. | N/A | Tissue-Engineered Blood Vessels | 02 July 2003 | ||||||||
PCT/US2004/021414 WO 2005/003317 | PCT | 60/484,563 60/484,595 | Tissue-Engineered Blood Vessels | 01 July 2004 | ||||||||
Docket No.: 890003- 2008.1** | U.S. | PCT/US2004/021414 | Tissue-Engineered Blood Vessels | 30 December 2005 | ||||||||
60/504,125 | U.S. | N/A | MAPC Generation of Muscle Tissue | 19 September 2003 | ||||||||
10/945,528** | U.S. | 60/504,125 | MAPC Generation of Muscle Tissue | 20 September 2004 | ||||||||
60/504,100 | U.S. | N/A | MBMP-Engraftment into Muscle Tissues | 19 September 2003 | ||||||||
60/517,980 | U.S. | N/A | Multipotent Stem Cells in Liver and Methods for Isolation Thereof | 05 November 2003 |
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NO./ | NATIONAL PHASE | |||||||||||
PUBLICATION | PATENT | PRIORITY | DATE / | |||||||||
NO. | NO. | COUNTRY | INFORMATION | TITLE | PATENT ISSUE DATE | |||||||
60/564,628 | U.S. | N/A | MAPC Generation of Lung Tissue | 21 April 2004 | ||||||||
PCT/US2005/013651 Pub. No.: WO 2005/113748** | PCT | 60/564,628 | MAPC Generation of Lung Tissue | 21 April 2005 | ||||||||
60/527,249 | U.S. | N/A | Compositions and Methods for the Treatment of Lysosomal Storage Disorders | 4 December 2003 | ||||||||
PCT/US2004/040932 Pub. No.: WO 2005/056026** | PCT | 60/527,249 | Compositions and Methods for the Treatment of Lysosomal Storage Disorders | 6 December 2004 | ||||||||
60/625,426 | U.S. | N/A | Growth of Multipotent Adult Progenitor Cells under Low Oxygen Conditions | 04 November 2004 | ||||||||
60/622,183 | U.S. | N/A | Swine Multipotent Adult Progenitor Cells | 26 October 2004 | ||||||||
PCT/US2005/038979** | PCT | 60/622,183 | Swine Multipotent Adult Progenitor Cells | 26 October 2005 | ||||||||
10/963,444 | U.S. | 10/048,757 10/467,963 | Use of Multipotent Adult Stem Cells in Treatment of Myocardial Infarction and Congestive Heart Failure | 11 October 2004 | ||||||||
11/151,689 Pub. No.: US- 2006- 0008450-A1** | U.S. | 10/963,444 | Use of Multipotent Adult Stem Cells in Treatment of Myocardial Infarction and Congestive Heart Failure | 13 June 2005 | ||||||||
60/652,015 | U.S. | N/A | Endothelial Cells Derived from Multipotent Adult Progenitor Cells (MAPCs) | 10 February 2005 |
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PUBLICATION | PATENT | PRIORITY | DATE / | |||||||||
NO. | NO. | COUNTRY | INFORMATION | TITLE | PATENT ISSUE DATE | |||||||
PCT/US2006/004749 | PCT | 60/652,015 | Endothelial Cells Derived from Multipotent Adult Progenitor Cells (MAPCs) | 10 February 2006 | ||||||||
PCT/US2005/015740** | PCT | N/A | Use of NK Inhibition to Facilitate Persistence of MHC-I Negative Cells | 05 May 2005 | ||||||||
PCT/US2005/027147** | PCT | PCT/US2005/015740 | Use of MAPC or Progeny Therefrom to Populate Lympho-hematopoietic Tissues | 29 July 2005 | ||||||||
60/703,823** | U.S. | N/A | Culture of Non-Embryonic Stem Cells at High Cell Density | 29 July 2005 | ||||||||
60/704,169 | U.S. | N/A | Use of a GSK3 Beta Inhibitor to Maintain Pluripotency of Cultured Non-Embryonic Stem Cells | 29 July 2005 | ||||||||
60/726,750** | U.S. | N/A | Differentiation of MAPCs to Pancreatic cells | 14 October 2005 | ||||||||
2004269409 | Australia | 60/499127 and PCT/US2004/028231 | Kidney Derived Stem Cells and Methods for Their Isolation, Differentiation and Use | 30 August 2004 | ||||||||
11/364,511 | U.S. | 60/499127 and PCT/US2004/028231 | Kidney Derived Stem Cells and Methods for Their Isolation, Differentiation and Use | 28 February 2006 | ||||||||
11/269,736 | U.S. | 11/151,689 | Immunomodulatory Properties of MAPC and Uses Thereof | 9 November 2005 | ||||||||
60/760,951 | U.S. | N/A | Methods for Sustained Functional Effects of MAPCs on Cortical Infarcts and the Like | 23 January 2006 |
** | Some or all of the technology in the application was supported with U.S. government funds. |
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Pre-Clinical Development Plans
Strategic Alliance Agreement and attached hereto]
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Equity Valuation
1. | For the purpose of any Athersys capital stock issued to Angiotech pursuant to this Strategic Alliance Agreement, the price per share of such Athersys capital stock shall be calculated as follows: |
(a) | If at the time of issuance Athersys common stock is publicly traded, the capital stock shall be Athersys common stock and the price per share of Athersys common stock shall be equal to (i) the Average Closing Price (as defined below)plus (ii) 12.5% of the Average Closing Price. | ||
(b) | If at the time of issuance Athersys common stock is not publicly traded, the capital stock shall be Athersys common stock and the price per share of Athersys common stock shall be equal to the price per share for the purchase of common stock during the last round of funding by Athersys from any Third Party financial investorplus 12.5% of such amount and. |
2. | For purposes of this Schedule, the following terms shall have the meanings indicated below: |
(a) | “Average Closing Price” shall mean the arithmetic mean of the Closing Prices (as defined below) for the twenty (20) days immediately preceding the fifth trading day prior to the date of issuance. | ||
(b) | “Closing Price” shall mean the price per share of the last sale of Athersys common stock, as reported on the relevant national exchange on which the Athersys common stock is publicly traded, at the close of the trading day. |
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Existing Third Party Agreement
Preclinical Development Programs With Third Parties
1. | Material Transfer and Intellectual Property Disposition Agreement, dated as of April 5, 2004, by and between Athersys, Inc. and the Cleveland Clinic Foundation, as amended.Agreement governs operation of and intellectual property created (if any) related to research projects conducted by or under the direction of Dr. Marc Penn in the area of myocardial infarction. | |
2. | Cooperative Research and Development Agreement, dated as of April 22, 2004, by and between Athersys, Inc. and the Public Heath Service (NHLBI), as amended on September 7, 2005.Agreement governs operation of and intellectual property created (if any) related to cooperative research projects conducted by Athersys and NHLBI, by or under the direction of Dr. Toren Finkle, in the area of cardiovascular application of MAPCs. | |
3. | Research Agreement, dated as of April 29, 2003, by and between MCL LLC and the Regents of the University of Minnesota, assumed by ReGenesys, LLC through operation of merger on November 4, 2003, and Amendment No. 1 dated as of May 1, 2004, Amendment No. 2 dated as of July 1, 2004, Amendment No. 3 dated as of February 1, 2005, and Amendment No. 4 dated as of April 25, 2005 (effective as of January 1, 2005), (and subsequently assigned to Athersys, Inc. pursuant to the Technology and Contract Transfer Agreement listed as item 1).Agreement governs operation of and intellectual property created (if any) related to series of research projects conducted by University of Minnesota investigators including Dr. Catherine Verfaillie. Among the research projects is a project conducted by or under the direction of Dr. Jianyi Zhang in the area of myocardial repair. | |
4. | Master Agreement by and between MPI research, Inc. and Athersys, Inc., dated as of October 13, 2005, and various Service Agreement Addendums.Services agreement describes the disposition of intellectual property created (if any) related to research projects focused on ischemia reperfusion model in pig. | |
5. | License and Supply Agreement, dated as of August 8, 2005, by and between Athersys, Inc. and Mercator, Inc. (formerly EndoBionics, Inc.).Agreement providing Athersys rights to use a proprietary transvascular catheter. | |
6. | Service Agreement, dated as of December 9, 2005, by and between Athersys, Inc. and Perry Scientific Inc.Services agreement describes the disposition of intellectual property created (if any) related to research projects focused on stem cell engraftment. | |
7. | Authorization to Proceed agreement, dated as of February 17, 2006, by and between Athersys, Inc. and Cambrex Bio Science Walkersville, Inc.Services agreement describes the disposition of intellectual property created (if any) related to process development services. |
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Milestone Payments
1. | Upon first Successful Completion of a Phase II Study for a Clinical Development Candidate in the U.S. (or foreign equivalent trial) in any of the Cardiovascular Indications, one of the following shall occur: |
(a) | If both Athersys and Angiotech agree that such Clinical Development Candidate should proceed to a Phase III Study, then the following shall apply: |
(i) | Angiotech shall pay to Athersys a one-time milestone payment in cash equal to $[*]; and | ||
(ii) | Angiotech shall enter into a securities purchase agreement, in substantially the form of the Purchase Agreement (except for necessary adaptations for a securities purchase instead of a note purchase), pursuant to which Angiotech shall make a one-time purchase of $[*]of capital stock of Athersys, of the class and at the per share price determined in accordance withSchedule 2.2, on the terms and conditions set forth therein. |
(b) | If both Athersys and Angiotech agree that an additional Phase II Study needs to be conducted for such Clinical Development Candidate, then the following shall apply: |
(i) | Angiotech shall pay to Athersys a one-time milestone payment in cash equal to $[*]; and | ||
(ii) | Upon next Successful Completion of a Phase II Study for any Clinical Development Candidate in any Cardiovascular Indication, and a mutual determination that such Clinical Development Candidate should proceed to a Phase III Study, Angiotech shall enter into a securities purchase agreement, in substantially the form of the Purchase Agreement (except for necessary adaptations for a securities purchase instead of a note purchase), pursuant to which Angiotech shall make a one-time purchase of $[*]of capital stock of Athersys, of the class and at the per share price determined in accordance withSchedule 2.2, on the terms and conditions set forth therein. |
(c) | If Angiotech believes that the Clinical Development Candidate should proceed to a Phase III Study and Athersys does not agree with Angiotech then, if such disagreement persists after attempts at resolution by the Heads of Research and the Party’s President, CFO (or other designated executive level officer) pursuant toSection 3.7(b), the following shall apply: |
* | Confidential treatment has been requested for the redacted portions of this exhibit, and such confidential portions have been omitted and filed separately with the Securities and Exchange Commission. |
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(i) | Angiotech shall pay to Athersys a one-time milestone payment in cash equal to $[*]; | ||
(ii) | Athersys shall be deemed to have delivered an Opt-Out Notice with respect to such Clinical Development Candidate pursuant toARTICLE VI and all such provisions inARTICLE VI shall apply; and | ||
(iii) | Upon the next Successful Completion of a Phase II Study for any Clinical Development Candidate in any Cardiovascular Indication, and a mutual determination that such Clinical Development Candidate should proceed to a Phase III Study, Angiotech shall enter into a securities purchase agreement, in substantially the form of the Purchase Agreement (except for necessary adaptations for a securities purchase instead of a note purchase), pursuant to which Angiotech shall make a one-time purchase of $[*]of capital stock of Athersys, of the class and at the per share price determined in accordance withSchedule 2.2, on the terms and conditions set forth therein. |
(d) | If Athersys believes that the Clinical Development Candidate should proceed to a Phase III Study and Angiotech does not agree with Athersys then, if such disagreement persists after attempts at resolution by the Heads of Research and the Party’s President, CFO (or other designated executive level officer) pursuant toSection 3.7(b), the following shall apply: |
(i) | No milestone payment shall be paid by Angiotech to Athersys with respect to such Phase II Study; | ||
(ii) | Angiotech shall be deemed to have delivered an Opt-Out Notice with respect to such Clinical Development Candidate pursuant toARTICLE VI and all such provisions inARTICLE VI shall apply; and | ||
(iii) | Upon the next Successful Completion of a Phase II Study for any Clinical Development Candidate in any Cardiovascular Indication, and a mutual determination that such Clinical Development Candidate should proceed to a Phase III Study, the following shall apply: |
(A) | Angiotech shall pay to Athersys a one-time milestone payment in cash equal to $[*]; and | ||
(B) | Angiotech shall enter into a securities purchase agreement, in substantially the form of the Purchase Agreement (except for necessary adaptations for a securities purchase instead of a note purchase), pursuant to which Angiotech shall make a one-time purchase of $[*]of capital stock of Athersys, of the class and at the per share price determined in accordance withSchedule 2.2, on the terms and conditions set forth therein. |
* | Confidential treatment has been requested for the redacted portions of this exhibit, and such confidential portions have been omitted and filed separately with the Securities and Exchange Commission. |
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(e) | If both Athersys and Angiotech agree that such Clinical Development Candidate should NOT proceed to a Phase III Study and that an additional Phase II should NOT be conducted for such Clinical Development Candidate, then the following shall apply: |
(i) | No milestone payment shall be paid by Angiotech to Athersys with respect to such Phase II Study; and | ||
(ii) | The provisions of this Schedule 7.3, Item 1 shall apply to future Phase II Studies with respect to other Clinical Development Candidates in any Cardiovascular Indications as if such prior Phase II Studies had not been conducted. |
2. | Upon the approval of the first NDA/BLA for the first Clinical Development Candidate in the U.S. in any of the Cardiovascular Indications, Angiotech shall pay to Athersys a one-time milestone payment in cash equal to $[*]. |
3. | Upon the approval of the first NDA/BLA equivalent application for the first Clinical Development Candidate in Europe for any of the Cardiovascular Indications, Angiotech shall pay to Athersys a one-time milestone payment in cash equal to $[*]. |
4. | For Net Sales (of all Cell Therapy Products in the aggregate on a worldwide basis) reaching $500,000,000.00, Angiotech shall pay to Athersys a one-time milestone payment in cash equal to $[*]. |
5. | For Net Sales (of all Cell Therapy Products in the aggregate on a worldwide basis) reaching $1,000,000,000.00, Angiotech shall pay to Athersys a one-time milestone payment in cash equal to $[*]. |
* | Confidential treatment has been requested for the redacted portions of this exhibit, and such confidential portions have been omitted and filed separately with the Securities and Exchange Commission |
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Profit Sharing
1. | “Profits” means, with respect to any calendar quarter, the aggregate of all Net Sales of all Cell Therapy Products in such quarter minus the aggregate of all Commercial Manufacturing Costs and Commercialization Costs incurred in such quarter. |
2. | Profits from the commercialization of a Cell Therapy Product, whether such calculation leads to a positive or negative number, will be split [*]% by Athersys and [*]% by Angiotech (subject to modification pursuant toSection 2.4(b)) according to the following procedure: |
(a) | Within forty-five (45) following the end of each calendar quarter, Angiotech shall submit to Athersys a written report setting forth in reasonable detail: |
(i) | separately with respect to each Cell Therapy Product on a country by country basis, all Net Sales of Cell Therapy Products in the immediately preceding calendar quarter and the basis for such calculation; and | ||
(ii) | all Commercialization Costs in the immediately preceding calendar quarter and the basis for such calculation. |
(b) | Within forty-five (45) days following the end of each calendar quarter, Athersys shall submit to Angiotech a written report setting forth in reasonable detail all Commercial Manufacturing Costs for the immediately preceding calendar quarter. | ||
(c) | Within sixty (60) days following the end of each calendar quarter, Angiotech shall submit to Athersys a written report setting forth the calculation of Profits and the amount to be paid by one Party to the other Party to split Profits in accordance with this Schedule. The net amount payable by a Party shall be paid by Angiotech or Athersys, as the case may be, to the other Party within ten (10) business days after receipt of such written report, without regard to any dispute as to the amount to be paid thereunder. In the event of a dispute, the disputing Party shall provide written notice within such ten (10) business day period after receipt of the written report in question, specifying in detail such dispute. The Parties shall promptly thereafter meet and negotiate in good faith a resolution to such dispute. In the event that the Parties are unable to resolve such dispute within thirty (30) days after notice by the disputing Party, the CFOs of the Parties shall resolve such dispute. |
* | Confidential treatment has been requested for the redacted portions of this exhibit, and such confidential portions have been omitted and filed separately with the Securities and Exchange Commission. |
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Ownership or Liens, Charges or Encumbrances
Exclusive Ownership
1. | Exclusive License Agreement, dated as of May 17, 2002, by and between Regents of the University of Minnesota and MCL LLC, assumed by ReGenesys, LLC through operation of merger on November 4, 2003. | |
2. | Ownership Agreement, dated as of May 17, 2002, by and between Regents of the University of Minnesota and MCL LLC, assumed by ReGenesys, LLC through operation of merger on November 4, 2003. | |
3. | Agreement, dated as of November 2, 1999, by and among MCL LLC, Catherine Verfaillie, Morayma Reyes, and Leo T. Furcht, assumed by ReGenesys, LLC through operation of merger on November 4, 2003. | |
4. | Loan and Security Agreement, and Supplement, dated as of November 2, 2004, by and among the Company, Advanced Biotherapeutics, Inc., Venture Lending & Leasing IV, Inc., and Costella Kirsch IV, L.P. | |
5. | Promissory Notes made by the Company and Advanced Biotherapeutics, Inc., on behalf of Venture Lending & Leasing IV, Inc., and Costella Kirsch IV, L.P., dated November 12, 2004 (numbers CK-001 and 4035-001), and dated December 29, 2004 (numbers CK-002 and 4035-002). | |
6. | UCC Financing Statements of the Company and Advanced Biotherapeutics, Inc. naming Venture Lending & Leasing IV, Inc., as agent, as secured party. | |
7. | Intellectual Property Security Agreement, dated as of February 14, 2006, by and between Athersys, Inc. and Venture Lending & Leasing IV, Inc. |
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Government Funding
1. | See Schedule 1.33 of Strategic Alliance Agreement | |
2. | See Schedule 2.1 of License Agreement |
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Unauthorized Use, Infringement or Misappropriation of Intellectual Property
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ARTICLE I. SALE OF THE NOTE | 1 | |||||||
1.1 | The Note | 1 | ||||||
1.2 | The Issuance and Sale of the Note | 1 | ||||||
1.3 | Exemption from Registration; Stockholders’ Agreement | 1 | ||||||
ARTICLE II. THE CLOSING | 2 | |||||||
2.1 | Deliveries at the Closing | 2 | ||||||
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY | 3 | |||||||
3.1 | Organization; Good Standing; Qualification and Power | 3 | ||||||
3.2 | Authorization; Enforceability | 3 | ||||||
3.3 | Noncontravention | 4 | ||||||
3.4 | Compliance with Laws; Organizational Documents | 4 | ||||||
3.5 | Capitalization of the Company | 5 | ||||||
3.6 | Intellectual Property | 5 | ||||||
3.7 | Material Agreements | 6 | ||||||
3.8 | Brokers | 7 | ||||||
3.9 | Financial Statements | 7 | ||||||
3.10 | No Consent or Approval Required | 7 | ||||||
3.11 | Changes | 8 | ||||||
3.12 | Absence of Undisclosed Liabilities | 9 | ||||||
3.13 | Insurance | 9 | ||||||
3.14 | Title to Assets, Properties and Rights | 9 | ||||||
3.15 | Taxes | 10 | ||||||
3.16 | Litigation and Other Proceedings | 10 | ||||||
3.17 | Employee Matters | 10 | ||||||
3.18 | Environmental Matters | 11 | ||||||
3.19 | Disclosure | 11 | ||||||
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF BUYER | 11 | |||||||
4.1 | Experience; Accredited Investor Status | 11 | ||||||
4.2 | Company Information | 12 | ||||||
4.3 | Investment | 12 |
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Page | ||||||||
4.4 | Transfer Restrictions | 12 | ||||||
4.5 | No Public Market | 12 | ||||||
4.6 | Brokers or Finders | 12 | ||||||
4.7 | Organization; Good Standing; Qualification and Power | 13 | ||||||
4.8 | Authorization | 13 | ||||||
4.9 | No Consent or Approval Required | 13 | ||||||
ARTICLE V. MISCELLANEOUS | 13 | |||||||
5.1 | Survival of Agreements | 13 | ||||||
5.2 | Expenses | 13 | ||||||
5.3 | No Third Party Beneficiaries | 13 | ||||||
5.4 | Complete Agreement | 14 | ||||||
5.5 | Successors and Assigns | 14 | ||||||
5.6 | Counterparts | 14 | ||||||
5.7 | Press Releases and Public Announcements | 14 | ||||||
5.8 | Notices | 15 | ||||||
5.9 | Governing Law | 16 | ||||||
5.10 | Amendments and Waivers | 16 | ||||||
5.11 | Headings | 16 | ||||||
5.12 | Certain Definitions | 16 | ||||||
5.13 | Incorporation of Schedules and Exhibits | 19 | ||||||
5.14 | Rules of Construction | 19 | ||||||
5.15 | Severability | 19 | ||||||
5.16 | Loss of Note | 20 | ||||||
5.17 | Delivery of Financial Statements and Other Information | 20 |
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Exhibit A | Form of Convertible Promissory Note | |
Exhibit B | Form of Opinion of Jones Day |
3.1 | Subsidiaries; Joint Ventures | |
3.5(a)(i) | Capitalization of the Company — Authorized Capital Stock (pre-Closing) | |
3.5(a)(ii) | Capitalization of the Company — Issued Capital Stock (pre-Closing) | |
3.5(b) | Outstanding Warrants, Options, Rights, Agreements, etc. | |
3.7 | Material Agreements | |
3.8 | Brokers | |
3.9 | Financial Statements | |
3.11 | Changes | |
3.14 | Title to Assets, Properties and Rights | |
3.17 | Employee Matters |
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3201 Carnegie Avenue
Cleveland, Ohio 44115-2634
Telephone: (216) 431-9900
Facsimile: (216) 361-9495
Attention: Gil Van Bokkelen, President and Chief Executive Officer
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
Telephone: (216) 586-3939
Facsimile: (216) 579-0212
Attention: Christopher M. Kelly, Esq.
1618 Station St.
Vancouver, British Columbia
Canada V6A 1B6
Telephone: (604) 221-7676
Facsimile: (604) 221-2330
Attention: General Counsel
275 Middlefield Road
Menlo Park, California 94025
Telephone: (650) 324-7000
Facsimile: (650) 324-0638
Attention: Kyle Guse, Esq.
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ATHERSYS, INC. | ||||
By: | ||||
Gil Van Bokkelen | ||||
President and Chief Executive Officer | ||||
ANGIOTECH PHARMACEUTICALS, INC. | ||||
By: | ||||
Name: | ||||
Title: | ||||
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• | All references to Section numbers are to Sections of the Agreement, unless otherwise stated. | ||
• | All references to dollar amounts are references to U.S. dollars. | ||
• | The fact that any item of information is disclosed in any Section of these Company Disclosure Schedules may not be construed (i) to mean that such disclosure is required by the Agreement, including without limitation in order to render any representation or warranty true or correct, or (ii) to constitute a representation or warranty as to the materiality of any item so disclosed. | ||
• | The following information (i) is set forth for informational purposes only, (ii) does not necessarily include all matters of a similar nature, and (iii) may not be construed as expanding or modifying the Company’s representations and warranties in the Agreement or modifying the levels of materiality contained in the Sections of the Agreement corresponding to such Sections of these Disclosure Schedules. | ||
• | The inclusion of any item herein when listing a “material” item or an item having a “Material Adverse Effect” is not deemed to be an admission or representation that the included item is “material” or results in a “Material Adverse Effect” for purposes of the Agreement or otherwise. |
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• | Information disclosed by the Company pursuant to any Section of the Agreement or these Company Disclosure Schedules will be deemed to be incorporated in and disclosed with respect to all Sections of the Agreement and these Company Disclosure Schedules to the extent the Agreement requires such disclosure, provided that the relevance of such matters to other Sections in these Company Disclosure Schedules is reasonably apparent on the face hereof. | ||
• | The annexes, attachments and exhibits to these Company Disclosure Schedules, if any, form an integral part of these Company Disclosure Schedules and are incorporated by reference for all purposes as if set forth fully herein. | ||
• | The headings and descriptions of representations, warranties and covenants herein are for descriptive purposes and convenience of reference only and should not be deemed to affect such representations, warranties or covenants or to limit the exceptions made hereby or the provisions hereof. |
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1. | Athersys, Inc.Parent company, incorporated November 1995. | |
2. | Advanced Biotherapeutics, Inc.Operating subsidiary, owned 100% by Athersys. Formed March 2000. | |
3. | Athersys-Singapore PTE, LTD.Inactive subsidiary, owned 100% by Athersys. Formed January 2002. | |
4. | ReGenesys LLC.Merger subsidiary formed for acquisition of MCL LLC, owned 100% by Athersys. Formed September 2003. | |
5. | ReGenesys BVBA.Inactive subsidiary, owned 99.5% by ReGenesys LLC and 0.5% by Advanced Biotherapeutics, Inc. Formed October 2005. | |
6. | Oculus Pharmaceuticals, Inc.Inactive joint venture, owned 50.2% by Athersys. Formed September 2001. | |
7. | Athersys Newco, Ltd.Inactive joint venture, owned 80.1% by Athersys. Formed October 1999. |
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Authorized Capital | ||||||||||||
Notes | Stock | Issued Capital Stock | ||||||||||
Common Stock | 40,000,000 | 8,196,850 | ||||||||||
Class A Preferred Stock | 3,939,000 | 2,739,000 | ||||||||||
Class B Preferred Stock | 319,800 | 319,800 | ||||||||||
Class C Preferred Stock | 4,116,000 | 2,766,300 | ||||||||||
Class D Preferred Stock | 150,000 | 150,000 | ||||||||||
Class E Preferred Stock | 1. | 18,100 | 12,015 | |||||||||
Class F Preferred Stock | 4,000,000 | 3,541,666 | ||||||||||
Class G Preferred Stock | 639,450 | 639,450 | ||||||||||
Blank Check Preferred Stock | 250,000 | 0 | ||||||||||
Total | 53,432,350 | 18,365,081 | ||||||||||
�� | ||||||||||||
Stock Options —Employees | 2. | 2,809,752 | ||||||||||
Stock Options –Board, consultants | 2. | 735,002 | ||||||||||
Warrants –Class C financing | 2. | 606,000 | ||||||||||
Warrant –Gallo | 2. | 89,700 | ||||||||||
Warrant –BioEnterprise | 2. | 19,500 | ||||||||||
Warrant– Lenders | 3. | TBD | ||||||||||
Milestone– Lenders — IPO | 4. | TBD | ||||||||||
Milestone– UM, Dr. Furcht, Ms. Levy | 5. | 38,462 – 115,386 |
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1. | The Company’s Amended and Restated Certificate of Incorporation, as amended on December 2, 2001 and on February 12, 2003. | ||
2. | Amended and Restated Stockholders’ Agreement, dated as of April 28, 2000, as amended as of October 6, 2000, by and among the Company and certain of its stockholders, and certain joinder agreements thereto. | ||
3. | Amended and Restated Registration Rights Agreement, dated as of April 28, 2000, as amended as of January 29, 2002 and as of November 19, 2002, by and among the Company and certain of its stockholders. | ||
4. | Athersys, Inc. Registration Rights Agreement, dated as of October 21, 1999, by and between the Company and Elan International Services, Ltd. | ||
5. | Warrant Agreement, dated as of October 30, 1998, by and among the Company and certain of its stockholders. | ||
6. | Warrant Certificate, dated as of March 18, 2004, by and among the Company and BioEnterprise. | ||
7. | Stock Purchase and Stock Exchange Agreement, dated as of March 19, 1996, by and between the Company and Michael Gallo. | ||
8. | 1995 Incentive Plan of Athersys, Inc., as amended. | ||
9. | 2000 Stock Incentive Plan of Athersys, Inc. | ||
10. | Stock option agreements by and between the Company and certain of its employees and consultants. |
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11. | Employment agreement dated October 3, 2003 by and between Athersys, Inc., Advanced Biotherapeutics, Inc. and Robert Deans, Ph.D. | ||
12. | Employment agreement dated January 1, 2004 by and between Athersys, Inc., Advanced Biotherapeutics, Inc. and William Lehmann | ||
13. | Employee Stockholder Agreements by and between the Company and certain of its employees. | ||
14. | Optionee Stockholder Agreements by and between the Company and certain of its Board Members and consultants. | ||
15. | Agreement and Plan of Merger, dated as of November 3, 2003, by and among the Company, ReGenesys LLC, MCL LLC, and Leo T. Furcht, M.D. | ||
16. | Loan and Security Agreement, and Supplement, dated as of November 2, 2004, by and among the Company, Advanced Biotherapeutics, Inc., Venture Lending & Leasing IV, Inc., and Costella Kirsch IV, L.P. |
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1. | The Company’s Amended and Restated Certificate of Incorporation, as amended on December 2, 2001 and on February 12, 2003. | ||
2. | The Company’s Bylaws. | ||
3. | Amended and Restated Stockholders’ Agreement, dated as of April 28, 2000, as amended as of October 6, 2000, by and among the Company and certain of its stockholders, and certain joinder agreements thereto. | ||
4. | Amended and Restated Registration Rights Agreement, dated as of April 28, 2000, as amended as of January 29, 2002 and as of November 19, 2002, by and among the Company and certain of its stockholders. | ||
5. | Athersys, Inc. Registration Rights Agreement, dated as of October 21, 1999, by and between the Company and Elan International Services, Ltd. | ||
6. | Warrant Agreement, dated as of October 30, 1998, by and among the Company and certain of its stockholders. | ||
7. | Warrant Certificate, dated as of March 18, 2004, by and among the Company and BioEnterprise. | ||
8. | Stock Purchase and Stock Exchange Agreement, dated as of March 19, 1996, by and between the Company and Michael Gallo. | ||
9. | 1995 Incentive Plan of Athersys, Inc., as amended. | ||
10. | 2000 Stock Incentive Plan of Athersys, Inc. | ||
11. | Stock option agreements by and between the Company and certain of its employees and consultants. | ||
12. | Employee Stockholder Agreements by and between the Company and certain of its employees. | ||
13. | Optionee Stockholder Agreements by and between the Company and certain of its Board Members and consultants. | ||
14. | Asset Contribution and Assumption of Liabilities Agreement, dated as of March 30, 2000, by and between the Company and Advanced Biotherapeutics, Inc. |
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15. | Intercompany Loan Agreement, dated as of September 18, 2002, by and between the Company and Advanced Biotherapeutics, Inc., as amended July 18, 2005. | ||
16. | Technology and Contract Assignment and Assumption Agreement, dated as of May ___, 2006, by and between Athersys, Inc. and ReGenesys, LLC. | ||
17. | Services Agreement, dated as of November 4, 2003, by and between Athersys, Inc. and ReGenesys, LLC. | ||
18. | Intellectual Property Rights and Confidentiality Agreement, dated as of November 4, 2003, by and between Athersys, Inc. and Advanced Biotherapeutics, Inc. | ||
19. | Certificate of Incorporation of Advanced Biotherapeutics, Inc., as amended. | ||
20. | By-Laws of Advanced Biotherapeutics, Inc. | ||
21. | Certificate of Formation of ReGenesys, LLC, dated as of September 19, 2003. | ||
22. | Operating Agreement of ReGenesys, LLC, dated as of October 21, 2003. | ||
23. | Certificate of Formation of ReGenesys BVBA, dated as of November 3, 2005. | ||
Regenerative Medicine Agreements: | |||
1. | Material Transfer and Intellectual Property Disposition Agreement, dated as of April 5, 2004, by and between the Company and the Cleveland Clinic Foundation, as amended. | ||
2. | Research and Material Transfer Agreement, dated as of June 30, 2005, by and between the Company, Advanced Biotherapeutics, Inc., and Case Western Reserve University, through its faculty member Dr. Jerry Silver. | ||
3. | Master Agreement by and between MPI research, Inc. and Athersys, Inc., dated as of October 13, 2005, and various Service Agreement Addendums. | ||
4. | Authorization to Proceed agreement, dated as of February 17, 2006, by and between Athersys, Inc. and Cambrex Bio Science Walkersville, Inc. | ||
5. | Confidentiality and Material Transfer Agreement, dated as of August 4, 2004, by and between the Company and the Regents of the University of Minnesota, as represented by Principal Investigator Catherine Verfaillie, MD and the University’s Stem Cell Institute. | ||
6. | Material Transfer Agreement, dated as of April 11, 2006, by and between the Company and the Regents of the University of Minnesota, through its faculty members Drs. Rosenberg and Gupta. |
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7. | Research Agreement, dated as of April 29, 2003, by and between MCL LLC and the Regents of the University of Minnesota, assumed by ReGenesys, LLC through operation of merger on November 4, 2003, and Amendment No. 1 dated as of May 1, 2004, Amendment No. 2 dated as of July 1, 2004, Amendment No. 3 dated as of February 1, 2005, and Amendment No. 4 dated as of April 25, 2005 (effective as of January 1, 2005). | ||
8. | Exclusive License Agreement, dated as of May 17, 2002, by and between Regents of the University of Minnesota and MCL LLC, assumed by ReGenesys, LLC through operation of merger on November 4, 2003. | ||
9. | Ownership Agreement, dated as of May 17, 2002, by and between Regents of the University of Minnesota and MCL LLC, assumed by ReGenesys, LLC through operation of merger on November 4, 2003. | ||
10. | Confidential Research Agreement, dated as of November 15, 2004, by and between the Company, Advanced Biotherapeutics, Inc. and the Medical College of Georgia Research Institute, Inc., as amended on January 9, 2005. | ||
11. | Confidential Research Agreement, dated as of November 1, 2005, by and between the Company and the Medical College of Georgia Research Institute, Inc. | ||
12. | Research Agreement, dated as of October 22, 2004, by and between the Company and Oregon Health and Sciences University, as amended on April 13, 2005. | ||
13. | Collaboration Agreement, dated as of May 25, 2004, by and between the Company and the Juvenile Diabetes Research Foundation International | ||
14. | Collaboration Agreement, dated as of July 10, 2003, by and between the Company and Case Western Reserve University, related to the Biomedical Research and Technology Transfer (BRTT) Trust Funds grant. | ||
15. | Cooperative Research and Development Agreement, dated as of April 22, 2004, by and between the Company and the Public Heath Service (NHLBI), as amended on September 7, 2005. | ||
16. | Various Notices of Grant Awards to Company from National Institutes of Health under its Small Business Innovation Research Program. | ||
17. | Research Agreement, dated as of March 30, 2005, by and between the Company and the Regents of the University of Minnesota, with Principal Investigator Dr. Wagner. | ||
18. | Multi-Lineage Progenitor Cell Research License, dated as of August 23, 2005, by and between Athersys, Inc. and BIOE, Inc. | ||
19. | License and Supply Agreement, dated as of August 8, 2005, by and between Mercator, Inc. (formerly EndoBionics, Inc.) and the Company. |
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20. | Service Agreement, dated as of December 9, 2005, by and between Athersys, Inc. and Perry Scientific Inc. | ||
21. | Agreement and Plan of Merger, dated as of November 3, 2003, by and among the Company, ReGenesys LLC, MCL LLC, and Leo T. Furcht, M.D. | ||
22. | State of Delaware Certificate of Merger, dated as of November 4, 2003, regarding MCL LLC merger. | ||
23. | Agreement, dated as of November 2, 1999, by and among MCL LLC, Catherine Verfaillie, Morayma Reyes, and Leo T. Furcht, assumed by ReGenesys, LLC through operation of merger on November 4, 2003. | ||
24. | Waiver Regarding the Inventor’s Agreement, dated as of January 2, 2003, by and among MCL LLC, Morayma Reyes, and the Company. | ||
25. | Waiver Regarding the Inventor’s Agreement, dated as of October 27, 2002, by and among MCL LLC, Catherine Verfaillie, Leo T. Furcht, and the Company. | ||
26. | Loan Agreement, dated as of November 3, 2003, by and between the Company and Leo T. Furcht, M.D. | ||
27. | Tax Matters Agreement, dated as of October 27, 2002, by and between the Company and Leo T. Furcht, M.D. | ||
28. | Assignment Agreement in the application for United States Letters Patent, identified by United States Serial No. 60/147,324 and 60/164,650, dated as of January 31, 2001 by and between Dr. Catherine Verfaillie, Dr. Leo T. Furcht, Dr. Morayma Reyes, and MCL LLC. | ||
29. | Assignment Agreement in the application for United States Letters Patent, identified by United States Serial No. 60/504,100, dated as of October 23, 2003 by and between Dr. Catherine Verfaillie, MCL LLC, and the Regents of the University of Minnesota. | ||
30. | Assignment Agreement in the application for United States Letters Patent, identified by United States Serial No. 10/048,757 dated as of October 17, 2003 by and between Dr. Catherine Verfaillie, Dr. Leo T. Furcht, Dr. Morayma Reyes, MCL LLC. and the Regents of the University of Minnesota. | ||
31. | Assignment Agreement in the application for United States Letters Patent, identified by United States Serial No. 10/467,963 dated as of October 17, 2003 by and between Dr. Catherine Verfaillie, Dr. Leo T. Furcht, Dr. Morayma Reyes, MCL LLC and the Regents of the University of Minnesota. | ||
32. | Assignment Agreement in the application for United States Letters Patent, identified by United States Serial No. 60/268,786 dated as of April 13, 2001 by and between Catherine Verfaillie, Leo T. Furcht, and MCL LLC. |
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33. | Assignment Agreement in the application for United States Letters Patent, identified by United States Serial No. 60/269,062 dated as of April 13, 2001 by and between Catherine Verfaillie, Leo T. Furcht, and MCL LLC. | ||
34. | Assignment Agreement for provisional application identified by United States Serial No. 60/429,631 dated as of October 23, 2003 by and between Dr. Catherine Verfaillie, and MCL LLC. | ||
35. | Assignment Agreement for provisional application identified by United States Serial No. 60/504,125 dated as of October 23, 2003 by and between Dr. Catherine Verfaillie, and MCL LLC. | ||
Biopharmaceutical and Other: | |||
1. | Research Collaboration and License Agreement, dated as of December 8, 2000, by and between the Company and Bristol-Myers Squibb Company. | ||
2. | Cell Line Collaboration and License Agreement, dated as of July 1, 2002, by and between the Company and Bristol-Myers Squibb Company, as amended as of January 1, 2006. | ||
3. | Extended Collaboration and License Agreement, dated as of January 1, 2006, by and between the Company and Bristol-Myers Squibb Company. | ||
4. | Research Collaboration and License Agreement, dated as of November 7, 2001, by and between the Company and Pfizer Inc. | ||
5. | Research Agreement, dated as of October 2, 2001, by and between the Company and the University of Rochester, as amended on November 10, 2003 and September 1, 2005. | ||
6. | Cooperative Research and Development Agreement, dated as of September 21, 2000, by and among the Company, the Board of Trustees of the University of Alabama at Birmingham for the University of Alabama at Birmingham, and The UAB Research Foundation, as amended. | ||
7. | Mutual Termination and Release Agreement, and License Agreement, dated as of December 19, 2003, by and between the Company and 3-Dimensional Pharmaceuticals Inc. | ||
8. | Cross-License Agreement, dated as of September 5, 2003, by and between the Company and Lexicon Genetics Incorporated. | ||
9. | License Agreement, dated as of November 1, 1995, by and between Case Western Reserve University and the Company. |
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10. | Memorandum Agreement, dated as of October 22, 1997, by and between Case Western Reserve University and the Company. | ||
11. | License Agreement, dated as of September 2, 2000, by and between the Company and the University of Iowa. | ||
12. | License Agreement, dated as of April 10, 2002, by and between the Company and PE Corporation, through its Applied Biosystems Group. | ||
13. | Assignment of License Right, dated as of April 10, 2002, by and between the Company and Dr. John Harrington, Dr. Chih-Lin Hsieh and Dr. Michael Lieber, as amended. | ||
14. | Joint Venture Agreement, dated as of November 30, 2000, by and between the Company and President Life Sciences Co., Ltd. | ||
15. | Subscription, Joint Development and Operating Agreement, dated as of October 21, 1999, by and among Elan Corporation, plc, Elan International Services, Ltd., Elan Pharma International Limited, the Company and Athersys Newco Ltd. | ||
16. | License Agreement, dated as of October 21, 1999, by and between the Company and Athersys Newco Ltd. | ||
17. | Funding Agreement, dated as of October 21, 1999, by and among Elan Pharma International Limited, Elan Corporation, plc, Elan International Services, Ltd. and the Company. | ||
18. | Settlement Agreement, dated as of July 2, 2003, by and between Oculus Pharmaceuticals, Inc. and the Company. | ||
19. | Master Services Agreement, dated as of May 2, 2005, by and between Athersys, Inc., Advanced Biotherapeutics Inc., and SCYNEXIS, Inc. | ||
20. | Master Agreement, dated as of August 11, 2005, between Athersys, Inc. and Inveresk Research International Limited/Charles River Laboratories, and various Contract and Protocol Addendums. | ||
21. | Laboratory Services and Confidentiality Agreement, dated as of April 4, 2004, between Athersys, Inc. and Charles River Laboratories. | ||
22. | Consultancy Services Agreement, dated as of November 30, 2005, between Athersys, Inc. and Charles River Laboratories Clinical Services International Limited. | ||
23. | Material Transfer Agreement, MGH Ref. 1790, dated as of May 2, 2005, by and between Athersys, Inc., Advanced Biotherapeutics Inc., and The General Hospital Corporation d.b.a. Massachusetts General Hospital. |
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24. | Non-Exclusive Option Agreement, MGH Case No. 1790, dated as of May 2, 2005, by and between Athersys, Inc., Advanced Biotherapeutics Inc., and The General Hospital Corporation d.b.a. Massachusetts General Hospital. | ||
25. | Agreement of Quotation and Protocols, dated as of December 22, 2005, by and between Athersys, Inc. and Toxicon Corporation. | ||
26. | Biological Materials License Agreement, dated as of December 21, 2000, by and between Athersys, Inc. and Molecular Devices Corporation. | ||
27. | License Agreement, dated as of June 11, 2001, by and between Athersys, Inc. and Brookhaven Science Associates, LLC. | ||
28. | Collaborative Research and Development Agreement, dated as of February 9, 2005, by and between Athersys, Inc. and The Ohio State University. | ||
29. | Various Notices of Grant Awards to Company from National Institutes of Health under its Small Business Innovation Research Program. |
1. | Loan and Security Agreement, and Supplement, dated as of November 2, 2004, by and among the Company, Advanced Biotherapeutics, Inc., Venture Lending & Leasing IV, Inc., and Costella Kirsch IV, L.P. | ||
2. | Promissory Notes made by the Company and Advanced Biotherapeutics, Inc., on behalf of Venture Lending & Leasing IV, Inc., and Costella Kirsch IV, L.P., dated November 12, 2004 (numbers CK-001 and 4035-001), and dated December 29, 2004 (numbers CK-002 and 4035-002). | ||
3. | UCC Financing Statements of the Company and Advanced Biotherapeutics, Inc. naming Venture Lending & Leasing IV, Inc., as agent, as secured party. | ||
4. | Intellectual Property Security Agreement, dated as of February 14, 2006, by and between Athersys, Inc. and Venture Lending & Leasing IV, Inc. | ||
5. | Control Agreement Concerning Deposit Accounts, dated as of November 2, 2004, by and among the Company, Advanced Biotherapeutics, Inc., Venture Lending & Leasing IV, Inc., Costella Kirsch IV, L.P., and National City Bank. | ||
6. | Account Control Agreement, dated as of November 2, 2004, by and among the Company, Advanced Biotherapeutics, Inc., Venture Lending & Leasing IV, Inc., Costella Kirsch IV, L.P., and NatCity Investments. |
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1. | Engagement Letter, dated as of October 3, 2005, by and between the Company and Kaufman & Company, LLC. | ||
2. | Engagement Letter, dated as of October 31, 2005, by and between the Company and Merrill Lynch & Co. | ||
3. | Consulting Agreement, dated as of May 27, 2004, by and between the Company, Advanced Biotherapeutics, Inc., and Jim Shook Research, Inc., as extended. | ||
4. | Consulting Agreement, dated as of October 27, 2002, by and between the Company and Dr. Catherine Verfaillie, as amended on March 4, 2003. | ||
5. | Consulting Agreement, dated as of February 22, 2005, by and between the Company, Advanced Biotherapeutics, Inc., and Dr. Pascal Goldschmidt. | ||
6. | Consulting Agreement, dated as of March 6, 2005, by and between the Company, Advanced Biotherapeutics, Inc., and Dr. Jianyi Zhang. | ||
7. | Consulting Agreement, dated as of March 6, 2005, by and between the Company, Advanced Biotherapeutics, Inc., and Dr. Ken Walsh. | ||
8. | Consulting Agreement, dated as of March 25, 2005, by and between the Company, Advanced Biotherapeutics, Inc., and Dr. Michael Simons. | ||
9. | Consulting Agreement, dated as of February 1, 2005, by and between the Company, Advanced Biotherapeutics, Inc., and Dr. Brian Annex. | ||
10. | Consulting Agreement, dated as of May 10, 2004, by and between the Company, Advanced Biotherapeutics, Inc., and Dr. Gilbert Clincke, as extended on September 28, 2005. | ||
11. | Consulting Agreement, dated as of January 6, 2005, by and between the Company, Advanced Biotherapeutics, Inc., and Dr. Xavier Pi-Sunyer. | ||
12. | Consulting Agreement, dated as of May 1, 2005, by and between the Company, Advanced Biotherapeutics, Inc. and Dr. Thomas Caskey. | ||
13. | Consulting Agreement, dated as of November 4, 2005, by and between the Company, Advanced Biotherapeutics, Inc. and Charles E. Piper (CEP Consulting). | ||
14. | Consulting Agreement, dated as of February 7, 2006, by and between Athersys, Inc. and Biologics Consulting Group, Inc. | ||
15. | Master Service Agreement, dated as of March 9, 2004, by and between the Company, and CATO Research, as extended. |
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16. | Letter Agreement, dated as of January 22, 2003, by and between the Company and Dr. George Milne, Jr. |
1. | Confidentiality agreements with numerous third parties and employees. | ||
2. | Employment agreements, non-competition agreements, and D&O indemnification agreements with key members of management. | ||
3. | Incentive agreements with all employees. | ||
4. | Separation and General Release Agreements with terminated employees, 2005, 2003, 2002. | ||
5. | Promissory Note made by Gil Van Bokkelen on behalf of Advanced Biotherapeutics, Inc., dated May 20, 2002. | ||
6. | Lease Agreement, dated as of March 23, 2000, by and between the Company and Sherry E. Greer and James C. Comella, Trustees, under T/A/D December 21, 1991, as amended, and notices of lease extensions. | ||
7. | Facilities Use Agreement, dated as of February 18, 2002, by and between the Company and The MetroHealth System, as amended. | ||
8. | Various corporate insurance policies, including directors and officers coverage. | ||
9. | Various employee benefit plan documents. |
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1. | Engagement Letter, dated as of October 31, 2005, by and between the Company and Merrill Lynch & Co. Although the completion of the transactions contemplated by the Agreement will not require the payment of compensation to Merrill Lynch & Co., it will contribute to minimum thresholds that could lead to compensation payable to Merrill Lynch & Co. in the future. |
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Years Ended December 31, 2003, 2004, and 2005
1 | ||||
2 | ||||
3 | ||||
4 | ||||
5 | ||||
6 |
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§ | Ernst & Young LLP Suite 1300 925 Euclid Avenue Cleveland, Ohio 44115 | § | Phone: (216) 861-5000 www.ey.com | |
Athersys, Inc.
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December 31 | ||||||||
2004 | 2005 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 3,303 | $ | 1,080 | ||||
Available for sale securities | 13,976 | 3,481 | ||||||
Accounts receivable | 650 | 628 | ||||||
Prepaid expenses and other | 381 | 375 | ||||||
Total current assets | 18,310 | 5,564 | ||||||
Notes receivable from related parties | 653 | 682 | ||||||
Equipment, net | 1,789 | 954 | ||||||
Other assets | 142 | 109 | ||||||
Total assets | $ | 20,894 | $ | 7,309 | ||||
Liabilities and stockholders’ equity (deficit) | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 433 | $ | 365 | ||||
Accrued compensation and related benefits | 117 | 119 | ||||||
Accrued expenses and other | 543 | 721 | ||||||
Current portion of long-term debt | 199 | 2,531 | ||||||
Total current liabilities | 1,292 | 3,736 | ||||||
Long-term debt | 7,215 | 4,684 | ||||||
Accrued dividends | 11,236 | 13,489 | ||||||
Stockholders’ equity: | ||||||||
Convertible preferred stock, at stated value; 13,432,350 shares authorized; 11,784,898 and 10,168,231 shares issued and outstanding at December 31, 2004 and 2005, respectively; aggregate liquidation preference of $73,942 and $68,187 at December 31, 2004 and 2005, respectively | 68,301 | 68,301 | ||||||
Common stock, $.01 par value; 40,000,000 shares authorized; 8,154,633 and 8,117,926 shares issued and outstanding at December 31, 2004 and 2005, respectively | 82 | 82 | ||||||
Additional paid-in capital | 51,749 | 49,081 | ||||||
Treasury stock, at cost | — | (250 | ) | |||||
Accumulated other comprehensive loss | (35 | ) | (17 | ) | ||||
Unearned compensation – common stock options | (2,557 | ) | (809 | ) | ||||
Accumulated deficit | (116,389 | ) | (130,988 | ) | ||||
Total stockholders’ equity (deficit) | 1,151 | (14,600 | ) | |||||
Total liabilities and stockholders’ equity (deficit) | $ | 20,894 | $ | 7,309 | ||||
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Years Ended December 31 | ||||||||||||
2003 | 2004 | 2005 | ||||||||||
Revenues | ||||||||||||
License fees | $ | 1,393 | $ | 820 | $ | 763 | ||||||
Grant revenue | 759 | 2,318 | 2,833 | |||||||||
Total revenues | 2,152 | 3,138 | 3,596 | |||||||||
Costs and expenses | ||||||||||||
Research and development (including stock compensation expense of $697, $2,008, and $801 in 2003, 2004, and 2005, respectively) | 13,675 | 12,415 | 12,578 | |||||||||
Purchased in-process research and development | 9,500 | — | — | |||||||||
General and administrative (including stock compensation expense of $3,847, $1,481, and $657 in 2003, 2004, and 2005, respectively) | 10,882 | 4,717 | 3,755 | |||||||||
Depreciation | 1,803 | 1,297 | 982 | |||||||||
Restructuring costs (including stock compensation expense of $472, $56 and $(128) in 2003, 2004, and 2005, respectively) | 1,076 | 107 | 251 | |||||||||
Total costs and expenses | 36,936 | 18,536 | 17,566 | |||||||||
Loss from operations | (34,784 | ) | (15,398 | ) | (13,970 | ) | ||||||
Other income | 1,000 | — | 18 | |||||||||
Recovery from joint ventures | 114 | — | — | |||||||||
Interest income | 644 | 317 | 317 | |||||||||
Interest expense | (135 | ) | (73 | ) | (964 | ) | ||||||
Net loss | $ | (33,161 | ) | $ | (15,154 | ) | $ | (14,599 | ) | |||
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Convertible | Accumulated | Unearned | ||||||||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Additional | Other | Compensation– | Total | |||||||||||||||||||||||||||||||||||
Number | Stated | Number | Par | Paid-in | Treasury | Comprehensive | Common Stock | Accumulated | Stockholders’ | |||||||||||||||||||||||||||||||
of Shares | Value | of Shares | Value | Capital | Stock | Income (Loss) | Options | Deficit | Equity (Deficit) | |||||||||||||||||||||||||||||||
Balance at January 1, 2003 | 11,785 | $ | 68,301 | 7,411 | $ | 74 | $ | 36,010 | $ | — | $ | 227 | $ | (625 | ) | $ | (68,074 | ) | $ | 35,913 | ||||||||||||||||||||
Issuance of common stock, net | — | — | 738 | 7 | 9,532 | — | — | — | — | 9,539 | ||||||||||||||||||||||||||||||
Unearned compensation – common stock options | — | — | — | — | 7,630 | — | — | (7,630 | ) | — | — | |||||||||||||||||||||||||||||
Amortization of unearned compensation | — | — | — | — | — | — | — | 1,365 | — | 1,365 | ||||||||||||||||||||||||||||||
Compensation expense related to options issued to employees and consultants | — | — | — | — | 3,696 | — | — | — | — | 3,696 | ||||||||||||||||||||||||||||||
Forfeitures of common stock options | — | — | — | — | (65 | ) | — | — | 20 | — | (45 | ) | ||||||||||||||||||||||||||||
Accrued dividends – Class C preferred | — | — | — | — | (1,119 | ) | — | — | — | — | (1,119 | ) | ||||||||||||||||||||||||||||
Accrued dividends – Class E preferred | — | — | — | — | (1,045 | ) | — | — | — | — | (1,045 | ) | ||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | (33,161 | ) | (33,161 | ) | ||||||||||||||||||||||||||||
Unrealized loss on available for sale securities | — | — | — | — | — | — | (192 | ) | — | — | (192 | ) | ||||||||||||||||||||||||||||
Total comprehensive loss | (33,353 | ) | ||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2003 | 11,785 | 68,301 | 8,149 | 81 | 54,639 | — | 35 | (6,870 | ) | (101,235 | ) | 14,951 | ||||||||||||||||||||||||||||
Issuance of common stock, net | — | — | 6 | 1 | 14 | — | — | — | — | 15 | ||||||||||||||||||||||||||||||
Issuance of common stock warrant | — | — | — | — | 189 | — | — | — | — | 189 | ||||||||||||||||||||||||||||||
Unearned compensation – common stock options | — | — | — | — | 9 | — | — | (9 | ) | — | — | |||||||||||||||||||||||||||||
Amortization of unearned compensation | — | — | — | — | — | — | — | 3,489 | — | 3,489 | ||||||||||||||||||||||||||||||
Compensation expense related to options issued to employees and consultants | — | — | — | — | 56 | — | — | — | — | 56 | ||||||||||||||||||||||||||||||
Forfeitures of common stock options | — | — | — | — | (833 | ) | — | — | 833 | — | — | |||||||||||||||||||||||||||||
Accrued dividends – Class C preferred | — | — | — | — | (1,208 | ) | — | — | — | — | (1,208 | ) | ||||||||||||||||||||||||||||
Accrued dividends – Class E preferred | — | — | — | — | (1,117 | ) | — | — | — | — | (1,117 | ) | ||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | (15,154 | ) | (15,154 | ) | ||||||||||||||||||||||||||||
Unrealized loss on available for sale securities | — | — | — | — | — | — | (70 | ) | — | — | (70 | ) | ||||||||||||||||||||||||||||
Total comprehensive loss | (15,224 | ) | ||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2004 | 11,785 | 68,301 | 8,155 | 82 | 51,749 | — | (35 | ) | (2,557 | ) | (116,389 | ) | 1,151 | |||||||||||||||||||||||||||
Issuance of common stock, net | — | — | 2 | — | 3 | — | — | — | 3 | |||||||||||||||||||||||||||||||
Repurchase of common and preferred stock | (1,617 | ) | — | (39 | ) | — | — | (250 | ) | — | — | — | (250 | ) | ||||||||||||||||||||||||||
Amortization of unearned compensation | — | — | — | — | — | — | — | 1,330 | — | 1,330 | ||||||||||||||||||||||||||||||
Forfeitures of common stock options | — | — | — | — | (418 | ) | — | — | 418 | — | — | |||||||||||||||||||||||||||||
Accrued dividends – Class C preferred | — | — | — | — | (1,306 | ) | — | — | — | — | (1,306 | ) | ||||||||||||||||||||||||||||
Accrued dividends – Class E preferred | — | — | — | — | (947 | ) | — | — | — | — | (947 | ) | ||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | (14,599 | ) | (14,599 | ) | ||||||||||||||||||||||||||||
Unrealized loss on available for sale securities | — | — | — | — | — | — | 18 | — | — | 18 | ||||||||||||||||||||||||||||||
Total comprehensive loss | (14,581 | ) | ||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2005 | 10,168 | $ | 68,301 | 8,118 | $ | 82 | $ | 49,081 | $ | (250 | ) | $ | (17 | ) | $ | (809 | ) | $ | (130,988 | ) | $ | (14,600 | ) | |||||||||||||||||
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Years Ended December 31 | ||||||||||||
2003 | 2004 | 2005 | ||||||||||
Operating activities | ||||||||||||
Net loss | $ | (33,161 | ) | $ | (15,154 | ) | $ | (14,599 | ) | |||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||
Depreciation | 1,803 | 1,297 | 982 | |||||||||
Fixed asset impairment | 87 | |||||||||||
Gain on sale of equipment | — | — | (18 | ) | ||||||||
Recovery from joint ventures | (114 | ) | — | — | ||||||||
Purchased in-process research and development | 9,500 | — | — | |||||||||
Compensation – common stock options | 5,016 | 3,545 | 1,330 | |||||||||
Amortization of premium (discount) on available for sale securities and other | 210 | 125 | (44 | ) | ||||||||
Changes in operating assets and liabilities: | ||||||||||||
Accounts receivable | 39 | (119 | ) | 22 | ||||||||
Prepaid expenses and other assets | 358 | (65 | ) | 10 | ||||||||
Accounts payable and accrued expenses | 322 | (1,297 | ) | 112 | ||||||||
Net cash used in operating activities | (16,027 | ) | (11,668 | ) | (12,118 | ) | ||||||
Investing activities | ||||||||||||
Proceeds of recovery from joint ventures | 14 | — | — | |||||||||
Purchase of available for sale securities | (11,639 | ) | (12,238 | ) | (5,006 | ) | ||||||
Maturities of available for sale securities | 20,660 | 18,809 | 15,563 | |||||||||
Proceeds from sale of equipment | — | — | 23 | |||||||||
Purchases of equipment | (702 | ) | (173 | ) | (239 | ) | ||||||
Net cash provided by investing activities | 8,333 | 6,398 | 10,341 | |||||||||
Financing activities | ||||||||||||
Principal payments on debt | (801 | ) | (4,148 | ) | (199 | ) | ||||||
Proceeds from long-term debt | — | 7,500 | — | |||||||||
Deferred financing costs | — | (44 | ) | — | ||||||||
Cash released from collateral for debt | 300 | 670 | — | |||||||||
Repurchase of common and preferred stock held in treasury | — | — | (250 | ) | ||||||||
Proceeds from issuance of common stock, net | 39 | 15 | 3 | |||||||||
Net cash (used in) provided by financing activities | (462 | ) | 3,993 | (446 | ) | |||||||
Decrease in cash and cash equivalents | (8,156 | ) | (1,277 | ) | (2,223 | ) | ||||||
Cash and cash equivalents at beginning of year | 12,736 | 4,580 | 3,303 | |||||||||
Cash and cash equivalents at end of year | $ | 4,580 | $ | 3,303 | $ | 1,080 | ||||||
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December 31 | ||||||||||||
2003 | 2004 | 2005 | ||||||||||
Volatility | 104.0 | % | 51.9 | % | 49.8 | % | ||||||
Risk-free interest rate | 2.6 | % | 3.4 | % | 3.7 | % | ||||||
Expected life of option | 3-4 years | 4 years | 4 years | |||||||||
Expected dividend yield | 0.0 | % | 0.0 | % | 0.0 | % |
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Years Ended December 31 | ||||||||||||
2003 | 2004 | 2005 | ||||||||||
Net loss: | ||||||||||||
As reported | $ | (33,161 | ) | $ | (15,154 | ) | $ | (14,599 | ) | |||
Total stock compensation expense included in net income, as reported | 4,061 | 3,384 | 1,260 | |||||||||
Total stock compensation expense under the fair value method for all awards | (4,309 | ) | (3,030 | ) | (2,312 | ) | ||||||
Pro forma | $ | (33,409 | ) | $ | (14,800 | ) | $ | (15,651 | ) | |||
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December 31 | ||||||||
2004 | 2005 | |||||||
Laboratory equipment | $ | 5,805 | $ | 5,755 | ||||
Office equipment and leasehold improvements | 3,292 | 3,321 | ||||||
9,097 | 9,076 | |||||||
Accumulated depreciation | (7,308 | ) | (8,122 | ) | ||||
$ | 1,789 | $ | 954 | |||||
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Gross | Gross | Estimated | ||||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||||
Cost | Losses | Gains | Value | |||||||||||||
December 31, 2004: | ||||||||||||||||
U.S. government obligations | $ | 14,011 | $ | (35 | ) | $ | — | $ | 13,976 | |||||||
December 31, 2005: | ||||||||||||||||
U.S. government obligations | $ | 3,498 | $ | (17 | ) | $ | — | $ | 3,481 | |||||||
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December 31 | ||||||||
2004 | 2005 | |||||||
Notes payable to lenders | $ | 7,414 | $ | 7,215 | ||||
Less – current portion | 199 | 2,531 | ||||||
$ | 7,215 | $ | 4,684 | |||||
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2006 | $ | 2,531 | ||
2007 | 2,884 | |||
2008 | 1,800 | |||
$ | 7,215 | |||
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December 31 | ||||||||
2004 | 2005 | |||||||
Net operating loss carryforwards | $ | 26,813 | $ | 31,160 | ||||
Research and development credit carryforwards | 4,351 | 5,132 | ||||||
Compensation expense | 4,261 | 4,224 | ||||||
Equity in loss of joint ventures | 3,241 | 3,077 | ||||||
Other | 195 | 381 | ||||||
Total deferred tax assets | 38,861 | 43,974 | ||||||
Valuation allowance for deferred tax assets | (38,861 | ) | (43,974 | ) | ||||
Net deferred tax assets | $ | — | $ | — | ||||
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December 31 | ||||||||
2004 | 2005 | |||||||
Stock option plans | 7,641 | 7,453 | ||||||
Conversion of Class A, B, C, D, E, F, and G preferred stock | 12,380 | 10,763 | ||||||
Conversion of Blank Check preferred stock | 250 | 250 | ||||||
Warrants to purchase common stock | 1,111 | 715 | ||||||
21,382 | 19,181 | |||||||
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Shares | Issuance | Aggregate | ||||||||||||||
Shares | Issued and | Price | Liquidation | |||||||||||||
Authorized | Outstanding | Per Share | Preference | |||||||||||||
Class A | 3,939 | 3,939 | $ | 0.64 | $ | 2,500 | ||||||||||
Class B | 320 | 320 | $ | 1.25 | 399 | |||||||||||
Class C | 4,116 | 2,766 | $ | 3.67 | 10,143 | |||||||||||
Class D | 150 | 150 | $ | 1.35 | 202 | |||||||||||
Class E | 18 | 12 | $ | 1,000 | 12,015 | |||||||||||
Class F | 4,000 | 3,958 | $ | 12.00 | 47,500 | |||||||||||
Class G | 640 | 640 | $ | 1.85 | 1,183 | |||||||||||
December 31, 2002 – 2004 | 13,183 | 11,785 | $ | 73,942 | ||||||||||||
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Shares | Issuance | Aggregate | ||||||||||||||
Shares | Issued and | Price | Liquidation | |||||||||||||
Authorized | Outstanding | Per Share | Preference | |||||||||||||
Class A | 3,939 | 2,739 | $ | 0.64 | $ | 1,753 | ||||||||||
Class B | 320 | 320 | $ | 1.25 | 399 | |||||||||||
Class C | 4,116 | 2,766 | $ | 3.67 | 10,143 | |||||||||||
Class D | 150 | 150 | $ | 1.35 | 202 | |||||||||||
Class E | 18 | 12 | $ | 1,000 | 12,015 | |||||||||||
Class F | 4,000 | 3,541 | $ | 12.00 | 42,492 | |||||||||||
Class G | 640 | 640 | $ | 1.85 | 1,183 | |||||||||||
December 31, 2005 | 13,183 | 10,168 | $ | 68,187 | ||||||||||||
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Weighted | Weighted | |||||||||||
Average | Average | |||||||||||
Number | Exercise | Fair | ||||||||||
of Options | Price | Value | ||||||||||
Outstanding January1, 2003 | 4,010 | 3.50 | 3.26 | |||||||||
Granted below deemed market value | 997 | 4.08 | 10.97 | |||||||||
Granted equal to deemed market value | 100 | 13.00 | 9.33 | |||||||||
Exercised | (8 | ) | 5.19 | 3.47 | ||||||||
Forfeited | (565 | ) | 5.61 | 5.91 | ||||||||
Outstanding December 31, 2003 | 4,534 | 3.58 | 4.75 | |||||||||
Granted below deemed market value | 6 | 4.67 | 9.44 | |||||||||
Granted equal to deemed market value | 25 | 13.00 | 5.85 | |||||||||
Exercised | (5 | ) | 2.85 | 1.69 | ||||||||
Forfeited | (403 | ) | 6.87 | 6.70 | ||||||||
Outstanding December 31, 2004 | 4,157 | 3.32 | 4.58 | |||||||||
Granted equal to deemed market value | 41 | 13.00 | 5.55 | |||||||||
Exercised | (2 | ) | 1.50 | 0.85 | ||||||||
Forfeited | (324 | ) | 4.80 | 4.36 | ||||||||
Outstanding December 31, 2005 | 3,872 | $ | 3.30 | $ | 4.61 | |||||||
December 31, 2005 | ||||||||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||||||||
Weighted | ||||||||||||||||||||
Average | Weighted | Weighted | ||||||||||||||||||
Number | Remaining | Average | Number | Average | ||||||||||||||||
of | Contractual | Exercise | of | Exercise | ||||||||||||||||
Exercise Price | Options | Life | Price | Options | Price | |||||||||||||||
$1.00-1.20 | 280 | 4.0 | $ | 1.07 | 280 | $ | 1.07 | |||||||||||||
$1.50-1.65 | 1,737 | 2.1 | $ | 1.52 | 1,737 | $ | 1.52 | |||||||||||||
$2.50-3.00 | 592 | 3.2 | $ | 2.52 | 592 | $ | 2.52 | |||||||||||||
$3.25-7.00 | 857 | 6.4 | $ | 3.95 | 611 | $ | 3.98 | |||||||||||||
$8.00-15.60 | 406 | 5.3 | $ | 12.24 | 337 | $ | 12.03 | |||||||||||||
3,872 | 3,557 | |||||||||||||||||||
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Consolidated Statement of Operations
Period Ended March 31, 2006
(in thousands)
Year-to-Date | ||||
(unaudited) | ||||
Revenue | $ | 629 | ||
Costs and Expenses | ||||
Research & Development | 2,432 | |||
General & Administrative | 653 | |||
Common stock options expense | (40 | ) | ||
Depreciation & Other | 155 | |||
Total Costs & Expenses | 3,200 | |||
Operating Loss | (2,571 | ) | ||
Other Income, net | (212 | ) | ||
Net Loss | $ | (2,783 | ) | |
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Consolidated Balance Sheet
March 31, 2006
(in thousands)
March 31, 2006 | ||||
(unaudited) | ||||
Current Assets | ||||
Cash and investments | $ | 2,027 | ||
Accounts receivable, net | 236 | |||
Prepaid expenses and other | 206 | |||
Total Current Assets | 2,469 | |||
Property and Equipment, net | 803 | |||
Notes Receivable | 683 | |||
Other | 105 | |||
Total Assets | $ | 4,060 | ||
Current Liabilities | ||||
Accounts Payable & Accrued Expense | $ | 1,364 | ||
Loans — Short Term | 2,615 | |||
Total Current Liabilities | 3,979 | |||
Long-Term Liabilities | ||||
Loans — Long Term | 3,998 | |||
Accrued Dividends | 13,836 | |||
Total Long-Term Liabilities | 17,834 | |||
Capital | ||||
Common Stock, net | 82 | |||
Preferred Stock, net | 68,301 | |||
Treasurey Stock | (250 | ) | ||
Additional Paid in Capital | 48,440 | |||
Deferred Compensation | (547 | ) | ||
Comprehensive Income | (6 | ) | ||
Retained Earnings | (133,773 | ) | ||
Total Capital | (17,753 | ) | ||
Total Liabilities & Capital | $ | 4,060 | ||
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Consolidated Statement of Cash Flows
Period Ended March 31, 2006
(in thousands)
Year-to-Date | ||||
(unaudited) | ||||
Cash Flows from Operating Activities | ||||
Net Income/(Loss) | $ | (2,783 | ) | |
Adjustments to reconcile net loss to cash used in operating activities: | ||||
Depreciation | 155 | |||
Expense — common stock options | (40 | ) | ||
Amortization of discount of available for sale securities | (6 | ) | ||
Changes in working capital | ||||
Accounts receivable | 392 | |||
Other current assets | 164 | |||
Accounts payable and accrued expenses | 158 | |||
Net cash provided by (used in) operations | (1,960 | ) | ||
Investing Activities | ||||
Sale of available for sale securities | 2,000 | |||
Capital expenditures | (4 | ) | ||
Net cash provided by (used in) investing | 1,996 | |||
Financing Activities | ||||
Repayments of debt | (601 | ) | ||
Proceeds from issuance of common stock | 6 | |||
Net cash provided by (used in) financing | (595 | ) | ||
Net increase (decrease) in cash | (559 | ) | ||
Cash — Beginning of period | 1,080 | |||
Cash — End of period | $ | 521 | ||
* | Excludes investments of $1.5 million at March 31, 2006. |
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1. | In February 2006, the Company’s lenders perfected a security interest on the Company’s intellectual property in accordance with the Company’s obligations under the Loan and Security Agreement, and Supplement, dated as of November 2, 2004, by and among the Company, Advanced Biotherapeutics, Inc., Venture Lending & Leasing IV, Inc., and Costella Kirsch IV, L.P. |
2. | In April 2006, the Board of Directors authorized the Company to forgive a promissory note issued to Dr. Van Bokkelen in the amount of $100,000 plus accrued interest. |
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1. | Loan and Security Agreement, and Supplement, dated as of November 2, 2004, by and among the Company, Advanced Biotherapeutics, Inc., Venture Lending & Leasing IV, Inc., and Costella Kirsch IV, L.P. |
2. | Promissory Notes made by the Company and Advanced Biotherapeutics, Inc., on behalf of Venture Lending & Leasing IV, Inc., and Costella Kirsch IV, L.P., dated November 12, 2004 (numbers CK-001 and 4035-001), and dated December 29, 2004 (numbers CK-002 and 4035-002). |
3. | UCC Financing Statements of the Company and Advanced Biotherapeutics, Inc. naming Venture Lending & Leasing IV, Inc., as agent, as secured party. |
4. | Intellectual Property Security Agreement, dated as of February 14, 2006, by and between Athersys, Inc. and Venture Lending & Leasing IV, Inc. |
5. | Control Agreement Concerning Deposit Accounts, dated as of November 2, 2004, by and among the Company, Advanced Biotherapeutics, Inc., Venture Lending & Leasing IV, Inc., Costella Kirsch IV, L.P., and National City Bank. |
6. | Account Control Agreement, dated as of November 2, 2004, by and among the Company, Advanced Biotherapeutics, Inc., Venture Lending & Leasing IV, Inc., Costella Kirsch IV, L.P., and NatCity Investments. |
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1. | Athersys, Inc.’s Plus Group Health Insurance Plan | ||
2. | Athersys, Inc. Accidental Death & Dismemberment, Dental, Short-Term & Long-Term Disability & Life Insurance Plan. | ||
3. | Athersys, Inc. Profit Sharing & 401(k) Plan | ||
4. | The Company’s Flexible Benefits Plan, effective January 1, 2001. |
1. | Amended and Restated Employment agreement dated April 1, 1998 by and between Athersys, Inc. and Gil Van Bokkelen. | ||
2. | Amended and Restated Employment agreement dated April 1, 1998 by and between Athersys, Inc. and John Harrington. | ||
3. | Employment agreement dated May 22, 1998 by and between Athersys, Inc. and Laura Campbell. | ||
4. | Employment agreement dated May 22, 1998 by and between Athersys, Inc. and Robert Perry. | ||
5. | Employment agreement dated May 22, 1998 by and between Athersys, Inc. and Rakesh Ramachandran. | ||
6. | Employment agreement dated May 22, 1998 by and between Athersys, Inc. and Bruce Sherf. | ||
7. | Employment agreement dated September 25, 2000 by and between Athersys, Inc., Advanced Biotherapeutics, Inc. and Kurt Brunden. | ||
8. | Employment agreement dated October 3, 2003 by and between Athersys, Inc., Advanced Biotherapeutics, Inc. and Robert Deans, Ph.D. | ||
9. | Employment agreement dated January 1, 2004 by and between Athersys, Inc., Advanced Biotherapeutics, Inc. and Anne Brown. | ||
10. | Employment agreement dated January 1, 2004 by and between Athersys, Inc., Advanced Biotherapeutics, Inc. and William Lehmann. |
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11. | Employment agreement dated January 1, 2005 by and between Athersys, Inc., Advanced Biotherapeutics, Inc. and Judith Hubbard. | ||
12. | Form Incentive agreement – entered into with six members of senior-level employees. | ||
13. | Form Incentive agreement – entered into with five members of director-level employees. | ||
14. | Form Incentive agreement – entered into with twenty-three staff-level employees. |
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U.S. $5,000,000.00 | May 5, 2006 | |
Cleveland, Ohio |
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ATHERSYS, INC. | ||||
By: | ||||
Name: | Gil Van Bokkelen | |||
Title: | President and Chief Executive Officer | |||
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1618 Station St.
Vancouver, British Columbia
Canada V6A 1B6
1. | The Company is a corporation existing and in good standing under the laws of the State of Delaware, with the corporate power and authority to own its properties and conduct its business as now conducted. The Company is qualified to do business and is in good standing as a foreign corporation in each jurisdiction and as of the dates listed onExhibit A attached hereto. | |
2. | The authorized capital stock of the Company as of the date hereof consisted of 53,432,350 shares, consisting of (i) 40,000,000 shares of common stock, par value $.01 per share (“Common Stock”), (ii) 3,939,000 shares of Class A Convertible Preferred Stock, par value $.01 per share (“Class A Preferred”), (iii) 319,800 shares of Class B Convertible Preferred Stock, par value $.01 per share (“Class B Preferred”), (iv) 4,116,000 shares of Class C Convertible Preferred Stock, par value $.01 per share (“Class C Preferred”), (v) 150,000 shares of Class D Convertible Preferred Stock, par value $.01 per share (“Class D Preferred”), (vi) 18,100 shares of Class E Convertible Preferred Stock, par value $.01 per share |
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Page 2
3. | The Purchase Agreement has been authorized by all necessary corporate action of, and executed and delivered by, the Company and constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. | ||
4. | The Note has been authorized by all necessary corporate action of, and executed by, the Company, and, when the Note is delivered against payment therefor in accordance with the terms of the Purchase Agreement, will have been validly issued and delivered by the Company and will constitute a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. | ||
5. | No consent, approval, authorization or order of, or filing with, any governmental agency or body or any court is required in connection with the execution, delivery or performance of the Purchase Agreement or in connection with the issuance or sale of the Note by the Company to Angiotech, except as may be required under (i) state securities or blue sky laws or (ii) the Securities Act of 1933 (the “Securities Act”). | ||
6. | The execution, delivery and performance of the Purchase Agreement by the Company and the issuance and sale of the Note by the Company will not violate any law or regulation known to us to be generally applicable to transactions of this type, or any order or decree of any court, arbitrator or governmental agency that is binding upon the Company or its property or violate or result in a default under |
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7. | It is not necessary in connection with the offer and sale of the Note to Angiotech under the Purchase Agreement to register the Note under the Securities Act. |
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Foreign Qualifications To Do Business
State | Date of Good Standing | |
California | May 4, 2006 | |
Minnesota | May 5, 2006 | |
Ohio | May 5, 2006 |
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1. | The rights of first refusal and preemptive rights set forth in the Amended and Restated Stockholders’ Agreement, dated as of April 28, 2000, by and among Athersys, Inc. and certain of its stockholders, as amended. | |
2. | The conversion privileges of the Class A Preferred, Class B Preferred, Class C Preferred, Class D Preferred, Class E Preferred, Class F Preferred and Class G Preferred. | |
3. | Outstanding warrants to purchase Common Stock. | |
4. | Outstanding options to purchase Common Stock. | |
5. | The right to receive options to purchase Common Stock upon the achievement of specified performance objectives pursuant to the terms set forth in (a) the Employment Agreement, dated as of October 3, 2003, by and between Advanced Biotherapeutics, Inc. and Robert Deans, Ph.D. and (b) the Employment Agreement, dated as of January 1, 2004, by and between Advanced Biotherapeutics, Inc. and William Lehmann. | |
6. | The right to receive Common Stock upon the achievement of specified milestones pursuant to the terms set forth in the Agreement and Plan of Merger, dated as of November 3, 2003, by and among Athersys, Inc., ReGenesys, LLC, MCL LLC and Leo T. Furcht, M.D. | |
7. | The right to receive Common Stock in lieu of cash upon the occurrence of certain events pursuant to the terms set forth in the Loan and Security Agreement, and Supplement thereto, dated as of November 2, 2004, by and among Athersys, Inc., Advanced Biotherapeutics, Inc., Venture Lending & Leasing IV, Inc., and Costella Kirsch IV, L.P. | |
8. | The right to receive securities of Athersys, Inc. upon the occurrence of certain events pursuant to the terms set forth in the Loan and Security Agreement, and Supplement thereto, dated as of November 2, 2004, by and among Athersys, Inc., Advanced Biotherapeutics, Inc., Venture Lending & Leasing IV, Inc., and Costella Kirsch IV, L.P. |
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1. | Amended and Restated Stockholders’ Agreement, dated as of April 28, 2000, by and among Athersys, Inc. and certain of its stockholders, as amended. | |
2. | Amended and Restated Registration Rights Agreement, dated as of April 28, 2000, as amended as of January 29, 2002 and as of November 19, 2002, by and among Athersys, Inc. and certain of its stockholders. | |
3. | Athersys, Inc. Registration Rights Agreement, dated as of October 21, 1999, by and between Athersys, Inc. and Elan International Services, Ltd. | |
4. | Warrant Agreement, dated as of October 30, 1998, by and among Athersys, Inc. and certain of its stockholders. | |
5. | Warrant Certificate, dated as of March 18, 2004, by and among Athersys, Inc. and BioEnterprise. | |
6. | Stock Purchase and Stock Exchange Agreement, dated as of March 19, 1996, by and between Athersys, Inc. and Michael Gallo. | |
7. | 1995 Incentive Plan of Athersys, Inc., as amended. | |
8. | 2000 Stock Incentive Plan of Athersys, Inc. | |
9. | Form of Stock Option Agreement for employees and consultants. | |
10. | Form of Employee Stockholder Agreement for employees. | |
11. | Form of Optionee Stockholder Agreements for board members and consultants. | |
12. | Asset Contribution and Assumption of Liabilities Agreement, dated as of March 30, 2000, by and between Athersys, Inc. and Advanced Biotherapeutics, Inc. | |
13. | Intercompany Loan Agreement, dated as of September 18, 2002, by and between Athersys, Inc. and Advanced Biotherapeutics, Inc., as amended July 18, 2005. | |
14. | Technology and Contract Assignment and Assumption Agreement, effective as of May 5, 2006, by and between Athersys, Inc. and ReGenesys, LLC. | |
15. | Services Agreement, dated as of November 4, 2003, by and between Athersys, Inc. and ReGenesys, LLC. |
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16. | Intellectual Property Rights and Confidentiality Agreement, dated as of November 4, 2003, by and between Athersys, Inc. and Advanced Biotherapeutics, Inc. | |
17. | Material Transfer and Intellectual Property Disposition Agreement, dated as of April 5, 2004, by and between Athersys, Inc. and the Cleveland Clinic Foundation, as amended. | |
18. | Research and Material Transfer Agreement, dated as of June 30, 2005, by and between Athersys, Inc., Advanced Biotherapeutics, Inc., and Case Western Reserve University, through its faculty member Dr. Jerry Silver. | |
19. | Master Agreement by and between MPI research, Inc. and Athersys, Inc., dated as of October 13, 2005, and various Service Agreement Addendums. | |
20. | Authorization to Proceed agreement, dated as of February 17, 2006, by and between Athersys, Inc. and Cambrex Bio Science Walkersville, Inc. | |
21. | Confidentiality and Material Transfer Agreement, dated as of August 4, 2004, by and between Athersys, Inc. and the Regents of the University of Minnesota, as represented by Principal Investigator Catherine Verfaillie, MD and the University’s Stem Cell Institute. | |
22. | Material Transfer Agreement, dated as of April 11, 2006, by and between Athersys, Inc. and the Regents of the University of Minnesota, through its faculty members Drs. Rosenberg and Gupta. | |
23. | Research Agreement, dated as of April 29, 2003, by and between MCL LLC and the Regents of the University of Minnesota, assumed by ReGenesys, LLC through operation of merger on November 4, 2003, and Amendment No. 1 dated as of May 1, 2004, Amendment No. 2 dated as of July 1, 2004, Amendment No. 3 dated as of February 1, 2005, and Amendment No. 4 dated as of April 25, 2005 (effective as of January 1, 2005). | |
24. | Exclusive License Agreement, dated as of May 17, 2002, by and between Regents of the University of Minnesota and MCL LLC, assumed by ReGenesys, LLC through operation of merger on November 4, 2003. | |
25. | Ownership Agreement, dated as of May 17, 2002, by and between Regents of the University of Minnesota and MCL LLC, assumed by ReGenesys, LLC through operation of merger on November 4, 2003. | |
26. | Confidential Research Agreement, dated as of November 15, 2004, by and between Athersys, Inc., Advanced Biotherapeutics, Inc. and the Medical College of Georgia. |
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Research Institute, Inc., as amended on January 9, 2005. | ||
27. | Confidential Research Agreement, dated as of November 1, 2005, by and between Athersys, Inc. and the Medical College of Georgia Research Institute, Inc. | |
28. | Research Agreement, dated as of October 22, 2004, by and between Athersys, Inc. and Oregon Health and Sciences University, as amended on April 13, 2005. | |
29. | Collaboration Agreement, dated as of May 25, 2004, by and between Athersys, Inc. and the Juvenile Diabetes Research Foundation International. | |
30. | Collaboration Agreement, dated as of July 10, 2003, by and between Athersys, Inc. and Case Western Reserve University, related to the Biomedical Research and Technology Transfer (BRTT) Trust Funds grant. | |
31. | Cooperative Research and Development Agreement, dated as of April 22, 2004, by and between Athersys, Inc. and the Public Heath Service (NHLBI), as amended on September 7, 2005. | |
32. | Notices of Grant Awards to Company from National Institutes of Health under its Small Business Innovation Research Program. | |
33. | Research Agreement, dated as of March 30, 2005, by and between Athersys, Inc. and the Regents of the University of Minnesota, with Principal Investigator Dr. Wagner. | |
34. | Multi-Lineage Progenitor Cell Research License, dated as of August 23, 2005, by and between Athersys, Inc. and BIOE, Inc. | |
35. | License and Supply Agreement, dated as of August 8, 2005, by and between Mercator, Inc. (formerly EndoBionics, Inc.) and Athersys, Inc. | |
36. | Service Agreement, dated as of December 9, 2005, by and between Athersys, Inc. and Perry Scientific Inc. | |
37. | Agreement and Plan of Merger, dated as of November 3, 2003, by and among Athersys, Inc., ReGenesys, LLC, MCL LLC, and Leo T. Furcht, M.D. | |
38. | Agreement, dated as of November 2, 1999, by and among MCL LLC, Catherine Verfaillie, Morayma Reyes, and Leo T. Furcht, assumed by ReGenesys, LLC through operation of merger on November 4, 2003. | |
39. | Waiver Regarding the Inventor’s Agreement, dated as of January 2, 2003, by and among MCL LLC, Morayma Reyes, and Athersys, Inc. |
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40. | Waiver Regarding the Inventor’s Agreement, dated as of October 27, 2002, by and among MCL LLC, Catherine Verfaillie, Leo T. Furcht, and Athersys, Inc. | |
41. | Loan Agreement, dated as of November 3, 2003, by and between Athersys, Inc. and Leo T. Furcht, M.D. | |
42. | Tax Matters Agreement, dated as of October 27, 2002, by and between Athersys, Inc. and Leo T. Furcht, M.D. | |
43. | Assignment Agreement in the application for United States Letters Patent, identified by United States Serial No. 60/147,324 and 60/164,650, dated as of January 31, 2001 by and between Dr. Catherine Verfaillie, Dr. Leo T. Furcht, Dr. Morayma Reyes, and MCL LLC. | |
44. | Assignment Agreement in the application for United States Letters Patent, identified by United States Serial No. 60/504,100, dated as of October 23, 2003 by and between Dr. Catherine Verfaillie, MCL LLC, and the Regents of the University of Minnesota. | |
45. | Assignment Agreement in the application for United States Letters Patent, identified by United States Serial No. 10/048,757 dated as of October 17, 2003 by and between Dr. Catherine Verfaillie, Dr. Leo T. Furcht, Dr. Morayma Reyes, MCL LLC. and the Regents of the University of Minnesota. | |
46. | Assignment Agreement in the application for United States Letters Patent, identified by United States Serial No. 10/467,963 dated as of October 17, 2003 by and between Dr. Catherine Verfaillie, Dr. Leo T. Furcht, Dr. Morayma Reyes, MCL LLC and the Regents of the University of Minnesota. | |
47. | Assignment Agreement in the application for United States Letters Patent, identified by United States Serial No. 60/268,786 dated as of April 13, 2001 by and between Catherine Verfaillie, Leo T. Furcht, and MCL LLC. | |
48. | Assignment Agreement in the application for United States Letters Patent, identified by United States Serial No. 60/269,062 dated as of April 13, 2001 by and between Catherine Verfaillie, Leo T. Furcht, and MCL LLC. | |
49. | Assignment Agreement for provisional application identified by United States Serial No. 60/429,631 dated as of October 23, 2003 by and between Dr. Catherine Verfaillie, and MCL LLC. | |
50. | Assignment Agreement for provisional application identified by United States Serial No. 60/504,125 dated as of October 23, 2003 by and between Dr. Catherine Verfaillie, and MCL LLC. |
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51. | Research Collaboration and License Agreement, dated as of December 8, 2000, by and between Athersys, Inc. and Bristol-Myers Squibb Company. | |
52. | Cell Line Collaboration and License Agreement, dated as of July 1, 2002, by and between Athersys, Inc. and Bristol-Myers Squibb Company, as amended as of January 1, 2006. | |
53. | Extended Collaboration and License Agreement, dated as of January 1, 2006, by and between Athersys, Inc. and Bristol-Myers Squibb Company. | |
54. | Research Collaboration and License Agreement, dated as of November 7, 2001, by and between Athersys, Inc. and Pfizer Inc. | |
55. | Research Agreement, dated as of October 2, 2001, by and between Athersys, Inc. and the University of Rochester, as amended on November 10, 2003 and September 1, 2005. | |
56. | Cooperative Research and Development Agreement, dated as of September 21, 2000, by and among Athersys, Inc., the Board of Trustees of the University of Alabama at Birmingham for the University of Alabama at Birmingham, and The UAB Research Foundation, as amended. | |
57. | Mutual Termination and Release Agreement, and License Agreement, dated as of December 19, 2003, by and between Athersys, Inc. and 3-Dimensional Pharmaceuticals Inc. | |
58. | Cross-License Agreement, dated as of September 5, 2003, by and between Athersys, Inc. and Lexicon Genetics Incorporated. | |
59. | License Agreement, dated as of November 1, 1995, by and between Case Western Reserve University and Athersys, Inc. | |
60. | Memorandum Agreement, dated as of October 22, 1997, by and between Case Western Reserve University and Athersys, Inc. | |
61. | License Agreement, dated as of September 2, 2000, by and between Athersys, Inc. and the University of Iowa. | |
62. | License Agreement, dated as of April 10, 2002, by and between Athersys, Inc. and PE Corporation, through its Applied Biosystems Group. | |
63. | Assignment of License Right, dated as of April 10, 2002, by and between Athersys, Inc. and Dr. John Harrington, Dr. Chih-Lin Hsieh and Dr. Michael Lieber, as amended. |
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64. | Joint Venture Agreement, dated as of November 30, 2000, by and between Athersys, Inc. and President Life Sciences Co., Ltd. | |
65. | Subscription, Joint Development and Operating Agreement, dated as of October 21, 1999, by and among Elan Corporation, plc, Elan International Services, Ltd., Elan Pharma International Limited, Athersys, Inc. and Athersys Newco Ltd. | |
66. | License Agreement, dated as of October 21, 1999, by and between Athersys, Inc. and Athersys Newco Ltd. | |
67. | Funding Agreement, dated as of October 21, 1999, by and among Elan Pharma International Limited, Elan Corporation, plc, Elan International Services, Ltd. and Athersys, Inc. | |
68. | Settlement Agreement, dated as of July 2, 2003, by and between Oculus Pharmaceuticals, Inc. and Athersys, Inc. | |
69. | Master Services Agreement, dated as of May 2, 2005, by and between Athersys, Inc., Advanced Biotherapeutics Inc., and SCYNEXIS, Inc. | |
70. | Master Agreement, dated as of August 11, 2005, between Athersys, Inc. and Inveresk Research International Limited/Charles River Laboratories, and various Contract and Protocol Addendums. | |
71. | Laboratory Services and Confidentiality Agreement, dated as of April 4, 2004, between Athersys, Inc. and Charles River Laboratories. | |
72. | Consultancy Services Agreement, dated as of November 30, 2005, between Athersys, Inc. and Charles River Laboratories Clinical Services International Limited. | |
73. | Material Transfer Agreement, MGH Ref. 1790, dated as of May 2, 2005, by and between Athersys, Inc., Advanced Biotherapeutics Inc., and The General Hospital Corporation d.b.a. Massachusetts General Hospital. | |
74. | Non-Exclusive Option Agreement, MGH Case No. 1790, dated as of May 2, 2005, by and between Athersys, Inc., Advanced Biotherapeutics Inc., and The General Hospital Corporation d.b.a. Massachusetts General Hospital. | |
75. | Agreement of Quotation and Protocols, dated as of December 22, 2005, by and between Athersys, Inc. and Toxicon Corporation. | |
76. | Biological Materials License Agreement, dated as of December 21, 2000, by and between Athersys, Inc. and Molecular Devices Corporation. |
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77. | License Agreement, dated as of June 11, 2001, by and between Athersys, Inc. and Brookhaven Science Associates, LLC. | |
78. | Collaborative Research and Development Agreement, dated as of February 9, 2005, by and between Athersys, Inc. and The Ohio State University. | |
79. | Various Notices of Grant Awards to Company from National Institutes of Health under its Small Business Innovation Research Program. | |
80. | Loan and Security Agreement, and Supplement, dated as of November 2, 2004, by and among Athersys, Inc., Advanced Biotherapeutics, Inc., Venture Lending & Leasing IV, Inc., and Costella Kirsch IV, L.P. | |
81. | Promissory Notes made by Athersys, Inc. and Advanced Biotherapeutics, Inc., on behalf of Venture Lending & Leasing IV, Inc., and Costella Kirsch IV, L.P., dated November 12, 2004 (numbers CK-001 and 4035-001), and dated December 29, 2004 (numbers CK-002 and 4035-002). | |
82. | Intellectual Property Security Agreement, dated as of February 14, 2006, by and between Athersys, Inc. and Venture Lending & Leasing IV, Inc. | |
83. | Control Agreement Concerning Deposit Accounts, dated as of November 2, 2004, by and among Athersys, Inc., Advanced Biotherapeutics, Inc., Venture Lending & Leasing IV, Inc., Costella Kirsch IV, L.P., and National City Bank. | |
84. | Account Control Agreement, dated as of November 2, 2004, by and among Athersys, Inc., Advanced Biotherapeutics, Inc., Venture Lending & Leasing IV, Inc., Costella Kirsch IV, L.P., and NatCity Investments. | |
85. | Engagement Letter, dated as of October 3, 2005, by and between Athersys, Inc. and Kaufman & Company, LLC. | |
86. | Engagement Letter, dated as of October 31, 2005, by and between Athersys, Inc. and Merrill Lynch & Co. | |
87. | Consulting Agreement, dated as of May 27, 2004, by and between Athersys, Inc., Advanced Biotherapeutics, Inc., and Jim Shook Research, Inc., as extended. | |
88. | Consulting Agreement, dated as of October 27, 2002, by and between Athersys, Inc. and Dr. Catherine Verfaillie, as amended on March 4, 2003. | |
89. | Consulting Agreement, dated as of February 22, 2005, by and between Athersys, Inc., Advanced Biotherapeutics, Inc., and Dr. Pascal Goldschmidt. |
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90. | Consulting Agreement, dated as of March 6, 2005, by and between Athersys, Inc., Advanced Biotherapeutics, Inc., and Dr. Jianyi Zhang. | |
91. | Consulting Agreement, dated as of March 6, 2005, by and between Athersys, Inc., Advanced Biotherapeutics, Inc., and Dr. Ken Walsh. | |
92. | Consulting Agreement, dated as of March 25, 2005, by and between Athersys, Inc., Advanced Biotherapeutics, Inc., and Dr. Michael Simons. | |
93. | Consulting Agreement, dated as of February 1, 2005, by and between Athersys, Inc., Advanced Biotherapeutics, Inc., and Dr. Brian Annex. | |
94. | Consulting Agreement, dated as of May 10, 2004, by and between Athersys, Inc., Advanced Biotherapeutics, Inc., and Dr. Gilbert Clincke, as extended on September 28, 2005. | |
95. | Consulting Agreement, dated as of January 6, 2005, by and between Athersys, Inc., Advanced Biotherapeutics, Inc., and Dr. Xavier Pi-Sunyer. | |
96. | Consulting Agreement, dated as of May 1, 2005, by and between Athersys, Inc., Advanced Biotherapeutics, Inc. and Dr. Thomas Caskey. | |
97. | Consulting Agreement, dated as of November 4, 2005, by and between Athersys, Inc., Advanced Biotherapeutics, Inc. and Charles E. Piper (CEP Consulting). | |
98. | Consulting Agreement, dated as of February 7, 2006, by and between Athersys, Inc. and Biologics Consulting Group, Inc. | |
99. | Master Service Agreement, dated as of March 9, 2004, by and between Athersys, Inc., and CATO Research, as extended. | |
100. | Letter Agreement, dated as of January 22, 2003, by and between Athersys, Inc. and Dr. George Milne, Jr. | |
101. | Form of D&O Indemnification Agreement. | |
102. | Form of Incentive Agreement for employees. | |
103. | Form of Separation and General Release Agreements for terminated employees. | |
104. | Promissory Note made by Gil Van Bokkelen on behalf of Advanced Biotherapeutics, Inc., dated May 20, 2002. |
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105. | Lease Agreement, dated as of March 23, 2000, by and between Athersys, Inc. and Sherry E. Greer and James C. Comella, Trustees, under T/A/D December 21, 1991, as amended, and notices of lease extensions. | |
106. | Facilities Use Agreement, dated as of February 18, 2002, by and between Athersys, Inc. and The MetroHealth System, as amended. | |
107. | Employment Agreement, dated as of December 1, 1998, by and between Athersys, Inc. and Gil Van Bokkelen, Ph.D. | |
108. | Employment Agreement, dated as of December 1, 1998, by and between Athersys, Inc. and John J. Harrington, Ph.D. | |
109. | Employment Agreement, dated as of May 22, 1998, by and between Athersys, Inc. and Laura K. Campbell. | |
110. | Employment Agreement, dated as of May 22, 1998, by and between Athersys, Inc. and Robert Perry. | |
111. | Employment Agreement, dated as of May 22, 1998, by and between Athersys, Inc. and Rakesh Ramachandran. | |
112. | Employment Agreement, dated as of May 22, 1998, by and between Athersys, Inc. and Bruce Sherf. | |
113. | Employment Agreement, dated as of October 3, 2003, by and between Advanced Biotherapeutics, Inc. and Robert Deans, Ph.D. | |
114. | Employment Agreement, dated as of January 1, 2004, by and between Advanced Biotherapeutics, Inc. and Anne Brown. | |
115. | Employment Agreement, dated as of January 1, 2004, by and between Advanced Biotherapeutics, Inc. and William Lehmann. | |
116. | Employment Agreement, dated as of January 1, 2005, by and between Advanced Biotherapeutics, Inc. and Judith Hubbard. |
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License Agreement
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Sublicense Agreement