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Exhibit 4.2
STOCK PURCHASE AND STOCK EXCHANGE AGREEMENT
This Stock Purchase and Stock Exchange Agreement ("Agreement") is made
as of the 19th day of March, 1996, by and between Athersys, Inc., a Delaware
corporation (the "Company"), and Michael Gallo ("Seller").
W I T N E S S E T H:
WHEREAS, Seller desires to sell 29.9 shares of common stock of the
Company ("Common Stock") owned by Seller and convert 29.9 shares of Common Stock
into 29.9 Warrants (as defined in Section 2 below), and the Company desires to
purchase 29.9 shares of Common Stock owned by Seller and convert 29.9 shares of
Common Stock owned by Seller into 29.9 Warrants.
NOW, THEREFORE, for the consideration and upon the terms and conditions
hereinafter set forth, the parties hereto agree as follows:
1. PURCHASE AND EXCHANGE OF SHARES. Subject to the terms and provisions
of this Agreement, the Company agrees to purchase on the Closing Date (as
hereinafter defined), from Seller, and Seller agrees to sell, transfer, deliver
and convey to the Company, on the Closing Date, shares of Common Stock owned by
Seller. Subject to the terms and provisions of this Agreement, the Company
agrees to convert on the Closing Date, and Seller agrees to convert on the
Closing Date, 29.9 shares of Common Stock owned by Seller into 29.9 Warrants as
described in Section 2 below.
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2. EXCHANGE OF SHARES FOR WARRANTS.
(a) Seller hereby exchanges, and the Company hereby converts, 29.9
shares of Common Stock owned by Seller for warrants to purchase up to 29.9
shares of Common Stock (the "Warrants").
(b) The exercise price for the Warrants shall be One Dollar ($1.00) per
share.
(c) The Warrants are exercisable, in whole or in part, at any time,
after the occurrence of: (i) the closing of an initial public offering by the
Company pursuant to an effective registration statement under the Securities Act
of 1933, as amended; or (ii) the acquisition of shares representing a majority
of the voting power of the Company by a person, entity or group other than the
holders of capital stock of the Company as of the date of this Agreement or BVF.
In addition, the Warrants are exercisable in connection with Seller's Co-Sale
Rights (as described below), but only for the number of shares to be sold
pursuant to such Co-Sale Rights.
(d) If Seller is entitled to and wishes to exercise the Warrants,
Seller shall send written notice to the Company identifying the date for the
closing of such purchase and the number of shares to be purchased.
(e) The Company shall have the right, at any time, in its sole
discretion, to require Seller to exercise the Warrants in whole, but not in
part. If the Company wishes to require Seller to exercise the Warrants, the
Company shall send written notice to Seller identifying the date for the closing
of such purchase.
(f) In the event that any of Gil Van Bokkelen, John Harrington,
Huntington Willard, James Nelson, Ira Mellman or Robert Mays (the "Selling
Founders") proposes to sell shares of common stock to a third party, the Selling
Founders shall deliver written notice (the "Co-Sale Notice") with respect to
such proposed sale to Seller not later than thirty (30) days prior to the
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closing of such sale, or such shorter period as may be agreed to by the Selling
Founders and Seller. Such Co-Sale Notice shall set forth the number of shares of
common stock which the Selling Founders proposes to sell, the identity of the
transferee or transferees and the proposed closing date for such proposed sale,
and shall include a copy of any writing setting forth the terms of the proposed
sale. Upon receipt of a Co-Sale Notice, Seller shall have an option exercisable
at any time prior to the closing of the proposed sale by the Selling Founders,
to elect to participate in such sale; provided, that as a condition to the
consummation of the purchase and sale of any shares issuable upon the exercise
of the Warrants, Seller shall be obligated to exercise the Warrants for that
number of shares that he proposes to sell. Seller shall have the option to sell
his shares to the ultimate purchaser as of the proposed closing date for such
sale, and upon the same terms and conditions specified in the Co-Sale Notice,
pro rata with the Selling Founders according to the aggregate holdings of shares
of common stock by the Selling Founders and Seller as of the date of the Co-Sale
Notice, by written notice to such effect to the Selling Founders. The number of
shares to be sold by the Selling Founders shall be reduced by the number of
shares which Seller elects to so sell (within the limitation of the preceding
sentence). Failure by Seller to give such notice prior to the closing of such
sale shall be deemed a forfeiture and waiver of any right of Seller to
participate in such sale, provided that such sale is fully closed and
consummated on or before the closing date and upon the terms and conditions
specified in the Co-Sale Notice.
(g) In addition, Seller shall have all economic rights that the Selling
Founders have under that certain Stockholders' Agreement to be entered into
among the Company and its stockholders (the "Stockholders' Agreement") in
connection with the consummation of the BVF Investment, as such Stockholders'
Agreement may be amended from time to time, and the Company's Certificate of
Incorporation and By-Laws. The Company will not take any action, the purpose of
which is to
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selectively and specifically impact the economic interest of Seller in the
Company. Upon exercise of any of the Warrants, Seller will execute and become a
party to the Stockholders' Agreement.
3. CLOSING. The closing of the transactions contemplated by this
Agreement and all deliveries to be made at the time fixed for the closing shall
take place at the offices of Benesch, Friedlander, Coplan & Aronoff on the date
of this Agreement at 10:00 a.m. (the "Closing Date"). On the Closing Date,
Seller will deliver to the Company the certificate(s) representing all shares of
Common Stock owned by Seller, duly endorsed or with appropriate blank stock
power(s). The Company will deliver to Seller Eleven Thousand Two Hundred Dollars
($11,200) by bank or certified check as payment in full for 29.9 shares of
Common Stock owned by Seller. In addition, 29.9 shares of Common Stock owned by
Seller will be exchanged by Seller for, and converted by the Company into, the
29.9 Warrants as described in Section 6 below.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to Seller that this Agreement is the legal, valid and
binding obligation of the Company enforceable against it in accordance with its
terms, except that such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect relating
to creditors' rights generally and that the remedy of specific performance and
injunctive or other equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefore may be
brought. The Company will give Seller prompt notice of any amendment to the
Stockholders' Agreement, its Certificate of Incorporation or its By-Laws. (See
attached documents).
5. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby represents
and warrants to the Company that: (a) he has had supplied to him all information
concerning the Company that he has requested from the Company, he has had the
opportunity for himself and through his counsel to
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ask any questions concerning the Company, and he is not aware of any basis on
which he would have a claim against the Company; (b) he is aware that
Biotechnology Value Fund, L.P. ("BVF") intends to invest approximately $2.5
million in the Company (the "BVF Investment"); (c) he has not assigned,
transferred, encumbered or pledged to any party, or otherwise alienated, any
portion of the shares of Common Stock owned by Seller and such shares represent
all of the shares of Common Stock owned by Seller and that Seller has no other
equity interests in the Company; (d) the execution, delivery and consummation of
this Agreement by Seller does not now and will not, with the passage of time,
the giving of notice or otherwise, result in a violation or breach of, or
constitute a default under, any term or provision of any indenture, mortgage,
deed of trust, lease, instrument, order, judgment, decree, rule, regulation,
law, contract, agreement or any other restriction to which Seller is a party or
to which Seller or any of his assets is subject or bound; (e) upon delivery of
the certificate(s) representing the shares of Common Stock owned by Seller in
accordance with Paragraph 2 above, good and marketable title to all shares of
Common Stock owned by Seller will pass to the Company, free and clear of all
liens, charges, security interests, adverse claims, pledges, encumbrances and
demands whatsoever; and (f) this Agreement is the legal, valid and binding
obligation of Seller enforceable against him in accordance with its terms,
except that such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect relating
to creditors' rights generally and that the remedy of specific performance and
injunctive or other equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefore may be
brought.
6. MUTUAL AND GENERAL RELEASES. Seller, on behalf of himself, his
successors, assigns, executors, administrators, agents and professional
advisors, in exchange for good and valuable consideration, the adequacy and
receipt of which are hereby acknowledged, hereby releases and
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forever discharges the Company and its successors, assigns, officers, directors,
stockholders, employees, agents and professional advisors, of and from any and
all claims, causes of action, suits, covenants, damages and demands whatsoever,
in law or in equity, known and unknown, from the beginning of time to the
Closing Date.
The Company on behalf of itself, its successors, assigns, officers,
directors, stockholders, employees, agents and professional advisors, in
exchange for good and valuable consideration the adequacy and receipt of which
are hereby acknowledged, hereby releases and forever discharges Seller and his
successors, assigns, executors, administrators, agents and professional
advisors, of and from any and all claims, causes of action, suits, covenants,
damages and demands whatsoever, in law or in equity, known or unknown, from the
beginning of time to the Closing Date.
7. SEVERABILITY. In the event that any provision or term of this
Agreement is found to be void or unenforceable to any extent for any reason, it
is the agreed-upon intent of the parties hereto that all remaining provisions or
terms of this Agreement shall remain in full force and effect to the maximum
extent permitted and that this Agreement shall be enforceable as if such void or
unenforceable provision or term had never been a part hereof. To the extent that
any obligations of Seller in this Agreement shall be illegal and/or
unenforceable with respect to any jurisdiction, said covenants shall not be
affected thereby with respect to each other jurisdiction, such covenants with
respect to each such jurisdiction being construed as severable and independent.
In the event Seller shall violate any legally enforceable provision of this
Agreement as to which there is a specific time period during which the Company
is prohibited from taking certain actions or from engaging in certain
activities, as set forth in this Agreement, then, in such event, such violation
shall toll the running of such time period from the date such violation
commences until, and including, the date such violation shall cease.
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8. BINDING EFFECT. The parties hereto agree that this Agreement shall
bind the parties hereto, their respective assigns, successors in interest, those
in contractual privity with them, and their professional representatives of any
type whatsoever, as the case may be.
9. COMPLETE AGREEMENT. The parties hereto agree that this Agreement
represents the complete agreement of the parties hereto with respect to the
matters discussed herein and supersedes any and all prior verbal or written
agreements, including, without limitation, that certain "Memorandum of
Understanding Between the Partners of Athersys." This Agreement shall not be
modified unless so done in writing and signed by the party or parties to be
bound by any such modification.
10. MISCELLANEOUS. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Ohio. This Agreement may be
executed in multiple counterparts, each of which when taken together shall
constitute an original.
IN WITNESS WHEREOF, the parties hereto have executed this Stock
Purchase Agreement as of the day and year first written above.
ATHERSYS, INC. "Seller"
By: /s/ Gil Van Bokkelen /s/ Michael Gallo
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Gil Van Bokkelen Michael Gallo
President
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The undersigned hereby agree to be bound by the terms of Sections 2(f),
2(g) and 6 of this Agreement.
/s/ Gil Van Bokkelen /s/ John Harrington
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Gil Van Bokkelen John Harrington
/s/ Huntington Willard /s/ James Nelson
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Huntington Willard James Nelson
/s/ Ira Mellman /s/ Robert Mays
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Ira Mellman Robert Mays
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SPOUSAL ACKNOWLEDGEMENT, CONSENT AND WAIVER
The undersigned, Frances C. Gallo, hereby acknowledges that she:
(i) is the spouse of Michael Gallo;
(ii) has read the foregoing Stock Purchase Agreement (the
"Agreement") and understands that, among other things, it
relates to the sale and exchange by Michael Gallo of all
shares of the Common Stock of Athersys, Inc. owned by Michael
Gallo (the "Shares").
(iii) is aware that, as the spouse of Michael Gallo, she may have
some legal interest in the Shares;
(iv) ratifies, approves and consents to the terms of the Agreement
and to be bound thereby, insofar as it may affect any interest
she may have in the Shares;
(v) irrevocably consents to the consummation, in accordance with
the terms of the Agreement, of every transaction contemplated
therein; and
(vi) irrevocably waives, surrenders, or releases each and every
marital and other right, claim, or demand that she now or
hereafter may have which, if asserted, in any way might impair
the enforceability and/or execution of any provision of the
Agreement or cause the Agreement (or any provision thereof) to
be void or voidable.
Dated: March 10, 1996 /s/ Frances C. Gallo
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(sign here)
/p/ Frances C. Gallo
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(print name)
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