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Exhibit 4.3
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WARRANT AGREEMENT
AMONG
PRIMUS CAPITAL FUND IV LIMITED PARTNERSHIP,
PRIMUS EXECUTIVE FUND LIMITED PARTNERSHIP,
BLUE CHIP CAPITAL FUND II LIMITED PARTNERSHIP,
MIAMI VALLEY VENTURE FUND L.P.
WARBURG DILLON READ LLC, OHIO INNOVATION FUND I, L.P.,
SENTRON MEDICAL INCORPORATED, ATHERSYS INVESTOR LLC
HOEGH INVEST, AS, NEOMED INNOVATION, ASA,
AND
ATHERSYS, INC.
DATED AS OF OCTOBER 30, 1998
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WARRANT AGREEMENT
THIS WARRANT AGREEMENT (this "Agreement") dated as of October 30, 1998
among ATHERSYS, INC., a Delaware corporation (the "Company"), and PRIMUS CAPITAL
FUND IV LIMITED PARTNERSHIP, PRIMUS EXECUTIVE FUND LIMITED PARTNERSHIP, BLUE
CHIP CAPITAL FUND II LIMITED PARTNERSHIP, MIAMI VALLEY VENTURE FUND L.P.,
WARBURG DILLON READ LLC, OHIO INNOVATION FUND I, L.P., ATHERSYS INVESTOR LLC,
SENTRON MEDICAL INCORPORATED, HOEGH INVEST, AS, AND NEOMED INNOVATION, ASA and
any investor listed on Exhibit A of the Share Purchase Agreement of even date
herewith (the "Investors").
R E C I T A L S:
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This Agreement is entered into in connection with that certain Share
Purchase Agreement (the "Share Purchase Agreement"), dated concurrently herewith
among the Company and the Investors pursuant to which the Company will be
issuing and the Investors will be purchasing shares of Class C Convertible
Preferred Stock, $.01 par value per share (the "Class C Preferred"). Capitalized
terms not otherwise defined herein shall have the meanings given to them in the
Share Purchase Agreement.
NOW, THEREFORE, for good and valuable consideration the receipt of
which is hereby acknowledged and the promises and the mutual agreements set
forth herein, the parties hereto agree as follows:
1. ISSUANCE OF WARRANTS: FORM OF WARRANTS.
(a) The Company hereby agrees to issue to the Investors, on
the Closing Date, warrants (the "Warrants") to purchase shares of the
Company's Common Stock, $.01 par value per share (the "Common Stock")
as set forth on EXHIBIT "A" hereto.
(b) The text of the Warrants and of the form of election to
purchase Common Stock underlying the Warrants (the "Warrant Stock") to
be set forth on the reverse thereof shall be substantially as set forth
in the Warrant Certificate ("Warrant Certificate"), attached as EXHIBIT
"B" to this Agreement. Each Warrant Certificate shall be executed on
behalf of the Company by the President or Vice President of the Company
and attested by the Secretary or an Assistant Secretary of the Company.
(c) Warrant Certificates shall be dated as of the date of the
execution thereof by the Company either upon initial issuance or upon
division, exchange, substitution or transfer as may be permitted
hereunder.
2. REGISTRATION. The Warrant Certificates shall be numbered and shall
be registered on the books of the Company (the "Warrant Register") as they are
issued at the Closing. The Company shall be entitled to treat the registered
holder of any Warrant Certificate on the Warrant Register (the "Holder") as the
owner in fact thereof for all purposes and shall not be bound to recognize any
equitable or other claim to or interest in such Warrant Certificate, or the
Warrants represented thereby, on the part of any other person, and shall not be
liable for any registration or transfer of
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Warrant Certificates which are registered or to be registered in the name of a
fiduciary or the nominee of a fiduciary unless made with the actual knowledge
that a fiduciary or nominee is committing a breach of trust in requesting such
registration or transfer, or with knowledge of such facts that the Company's
participation therein amounts to bad faith.
3. TRANSFER OF WARRANT CERTIFICATE. The Warrant Certificate shall be
transferable only on the Warrant Register upon delivery of the Warrant
Certificate duly endorsed by the Holder or by its duly authorized attorney or
representative (with evidence reasonably satisfactory to the Company of such
authorization), or accompanied by evidence reasonably satisfactory to the
Company of succession, assignment or authority to transfer. Upon any
registration of transfer, the Company shall deliver a new Warrant Certificate(s)
to the person(s) entitled thereto. Notwithstanding the foregoing, the Company
shall have no obligation to cause Warrant Certificates to be transferred on the
Warrant Register to any person, unless the Holder of such Warrants shall furnish
to the Company evidence satisfactory to the Company of compliance with the
registration provisions of Section 5 of the Securities Act of 1933, as amended
(the "Act"), or the availability of an exemption from compliance with the
registration provisions of Section 5 of the Act.
4. TERM OF WARRANTS; EXERCISE OF WARRANTS.
(a) Each Warrant entitles the registered owner thereof to
purchase the number of shares of Warrant Stock as set forth on Exhibit
A hereto, subject to adjustment pursuant to the provisions of Section 8
of this Agreement, at any time from the issuance of the Warrant through
and including 5:00 p.m. Cleveland, Ohio local time of the earlier to
occur of (i) one year after the closing date of a Public Offering (an
"IPO") (as hereinafter defined), (ii) dissolution, liquidation or
winding up of the affairs of the Company ("Liquidation"), (iii) the
sale, conveyance, exchange or transfer (for cash, shares of stock,
securities, or other consideration) of all or substantially all of the
property, assets or stock (whether by merger, consolidation or sale) of
the Company (a "Sale"), or (iv) October 30, 2008 (the "Expiration
Date"), at an initial purchase price per share of Warrant Stock of
Thirteen Thousand Dollars ($13,000.00), subject to adjustment pursuant
to the provisions of Section 8 of this Agreement (the "Warrant Price").
For purposes of this Agreement, "Public Offering" shall mean the sale
by the Company of Common Stock pursuant to an effective registration
statement under the Securities Act of 1933, as amended. Notwithstanding
anything herein to the contrary, the Holder of the Warrant must sell,
transfer or exercise the Warrant on or before the Expiration Date or
else it will terminate in accordance with its terms as of the close of
business on the Expiration Date.
(b) The Warrant Price and the number of shares of Warrant
Stock are subject to adjustment upon the occurrence of certain events,
pursuant to the provisions of Section 8 of this Agreement. Subject to
the provisions of this Agreement, each Holder shall have the right to
purchase from the Company (and the Company shall issue and sell to such
Holder) the number of fully paid and nonassessable shares of Warrant
Stock specified in such Holder's Warrant Certificate(s) (as adjusted
from time to time in accordance with the provisions of Section 8 of
this Agreement), upon surrender of such Warrant Certificate(s) to the
Company or its duly authorized agent, and upon payment to the Company
of the Warrant Price, as adjusted in accordance with the provisions of
Section 8 of this Agreement, for the number of shares of Warrant Stock
in respect of which such Warrants are then exercised. The date of
exercise (the "Exercise Date") of any Warrant shall be deemed to be the
date of
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receipt by the Company of the Warrant Certificate duly filled in and
signed and accompanied by proper payment as hereinafter provided.
Payment of the Warrant Price shall be made as set forth in the Warrant
Certificate.
(c) Exercise Procedure: This Warrant shall be deemed to have
been exercised when the Company has received all of the following
items:
(i) a completed Exercise Notice, attached as EXHIBIT
"C" hereto, executed by the Holder;
(ii) this Warrant;
(iii) either (A) a check payable to the Company in an
amount equal to the product of the Warrant Price multiplied by
the number of shares of Common Stock being purchased upon such
exercise (the "Aggregate Warrant Price"), (B) the surrender to
the Company of debt or equity securities of the Company having
a Current Market Price equal to the Aggregate Warrant Price of
the Common Stock being purchased upon such exercise (provided
that for purposes of this subparagraph, the Current Market
Price of any note or other debt security shall be deemed to be
equal to the aggregate outstanding principal amount thereof
plus all accrued and unpaid interest thereon) or (C) a written
notice to the Company that the Holder is exercising the
Warrant (or a portion thereof) by authorizing the Company to
withhold from issuance a number of shares of Common Stock
issuable upon such exercise of the Warrant which when
multiplied by the Current Market Price of the Common Stock is
equal to the Aggregate Warrant Price (and such withheld shares
shall no longer be issuable under this Warrant).
(d) Subject to Section 5 of this Agreement, upon such exercise
of Warrants, and payment of the Warrant Price as aforesaid, the Company
shall issue and cause to be delivered with all reasonable dispatch (but
in any event within two (2) business days) to or (subject to the
provisions of Section 3 of this Agreement) upon the written order of
the Holder, a certificate for the number of full shares of Warrant
Stock so purchased upon the exercise of such Warrants, together with
cash, as provided in Section 11 of this Agreement, in respect of any
fraction of a share of such stock otherwise issuable upon such exercise
prior to a Public Offering. Except under circumstances described in the
following sentence, the shares of Warrant Stock purchased pursuant to
the immediately preceding sentence shall be deemed to be issued to the
Holder as the record owner of such shares as of 5:00 p.m. Cleveland,
Ohio local time on the Exercise Date. The right of purchase represented
by the Warrants shall be exercisable, at the election of the Holder
thereof, either in full or from time to time in part and, in the event
that any Warrant is exercised in respect of less than all of the shares
of Warrant Stock purchasable on such exercise at any time prior to the
Expiration Date, a new Warrant Certificate evidencing the remaining
Warrants shall be issued.
5. PAYMENT OF TAXES. The Company shall pay all documentary stamp taxes,
if any, attributable to the initial issuance of Warrant Stock upon the exercise
of Warrants; provided, however, that the Company shall not be required to pay
any tax or taxes which may be payable in respect of any permitted transfer
involved in the issue or delivery of any Warrant Certificates or Warrant Stock
in a name other than that of the registered Holder of such Warrants.
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6. MUTILATED OR MISSING WARRANTS. Upon (i) receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of a Warrant Certificate, (ii) if requested by the Company, the
posting of a bond in an amount equal to the value of the lost, stolen or
destroyed Warrant Certificate, (iii) reimbursement to the Company of all
reasonable expenses incident thereto, and (iv) surrender and cancellation of
such Warrant Certificate, if mutilated, the Company will make and deliver in
lieu of such Warrant Certificate a new Warrant Certificate of like tenor and
representing an equivalent right or interest. The term "outstanding" when used
herein with reference to the Warrant Certificate as of any particular time shall
not include any Warrant Certificate in lieu of which a new Warrant Certificate
has been made and delivered by the Company in accordance with the provisions
hereof.
7. RESERVATION OF WARRANT STOCK.
(a) The Company represents that there has been reserved out of
the authorized and unissued shares of Common Stock, a number of shares
sufficient to provide for the exercise of the right of purchase
represented by the Warrant Certificates as initially issued, and the
Company, which currently acts as the transfer agent for its Common
Stock ("Transfer Agent") and every subsequent Transfer Agent for any
shares of the Company's capital stock issuable upon the exercise of any
of the Warrants are hereby irrevocably authorized and directed at all
times until the Expiration Date or earlier termination of this
Agreement to reserve such number of authorized and unissued shares of
Common Stock as shall be required for such purpose. The Company will
keep a copy of this Agreement on file with every subsequent Transfer
Agent for any shares of the Company's capital stock issuable upon the
exercise of the Warrants. The Company will supply any such subsequent
Transfer Agent with duly executed stock certificates for issuance on
exercise of Warrants and will itself provide or otherwise make
available any cash which may be required by Section 11 of this
Agreement. The Company will furnish to any such subsequent Transfer
Agent a copy of all notices of adjustments, and certificates related
thereto, transmitted to each Holder pursuant to Section 10 of this
Agreement. All Warrant Certificates surrendered in the exercise of the
rights thereby evidenced shall be canceled.
(b) The Company covenants that it shall comply with all
securities laws regulating the offer and delivery of shares of Common
Stock upon exercise of the Warrants; and that, if any shares of Common
Stock required to be reserved for purposes of exercising the Warrants
hereunder require registration with or approval of any governmental
authority under any Federal or state law before such shares may be
validly issued or delivered upon exercise of the Warrants, the Company
shall, in good faith and as expeditiously as possible, secure such
registration or approval, as the case may be. The Company covenants
that all shares of Common Stock which shall be issued upon exercise of
the Warrants shall upon issue and payment therefor be validly issued,
fully paid and nonassessable.
8. ADJUSTMENTS OF WARRANT PRICE AND NUMBER OF SHARES OF WARRANT STOCK.
The number and kind of securities purchasable upon the exercise of each Warrant
and the Warrant Price shall be subject to adjustment from time to time upon the
happening of certain events, as hereinafter defined, but only as to Warrants
outstanding at the time of such adjustment. Upon each adjustment of the Warrant
Price pursuant to the provisions of Section 8(c), the Holder of such Warrant
shall thereafter, prior to the Expiration Date thereof, be entitled to purchase
at the Warrant Price resulting from such adjustment, the number of shares of
Warrant Stock obtained by multiplying the Warrant Price in
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effect immediately prior to such adjustment by the number of shares of Warrant
Stock issuable upon exercise of such Warrant immediately prior to such
adjustment and dividing the product thereof by the Warrant Price resulting from
such adjustment. The number of shares of Warrant Stock or the Warrant Price, as
the case may be, shall be subject to adjustment as follows:
(a) ADJUSTMENT FOR STOCK SPLITS AND COMBINATIONS. If the
Company shall at any time after the date of the issuance of the
Warrants effect a subdivision or combination of any outstanding Common
Stock, the Warrant Price then in effect immediately before that
subdivision or combination shall be proportionately adjusted by
multiplying the then effective Warrant Price by a fraction, (i) the
numerator of which shall be the number of Common Shares issued and
outstanding immediately prior to such subdivision or combination, and
(ii) the denominator of which shall be the number of Common Stock
issued and outstanding immediately after such subdivision or
combination. The number of Common Stock outstanding at any time shall,
for the purposes of this Section 8(a), include the number of Common
Shares into which any convertible securities of the Company may be
converted, or for which any warrant, option or rights of the Company
may be exchanged. Any adjustment under this Section 8(a) shall become
effective at the close of business on the date the subdivision or
combination becomes effective.
(b) ADJUSTMENT FOR RECLASSIFICATION, EXCHANGE OR SUBSTITUTION.
If the Common Stock issuable upon the exercise of the Warrants shall be
changed into the same or a different number of shares of any class or
classes of stock, whether by capital reorganization, reclassification
or otherwise (other than a subdivision or combination of shares
provided for above, or a reorganization, merger, consolidation or sale
of assets provided for elsewhere in this Section 8), then and in each
such event the holder of each Warrant shall have the right thereafter
to exercise and convert each such Warrant, after payment of the Warrant
Price, into the kind and amounts of shares of stock and other
securities and property receivable upon such reorganization,
reclassification or other change, by holders of the maximum number of
Common Stock into which such Warrants could have been converted
immediately prior to such reorganization, reclassification or change,
all subject to further adjustment as provided herein.
(c) In the event that the Company shall issue or be deemed to
have issued any Common Stock other than Excluded Shares (as hereinafter
defined) ("Additional Common Stock") without consideration or for a
consideration per share less than Eleven Thousand Dollars ($11,000),
and a Holder of Warrants shall have participated pro-rata with respect
to its Shares of Class C Preferred in such financing (the
"Participating Holder"), the Warrant Price in effect immediately prior
to each such issuance for the Participating Holder's Warrant shall be
reduced to the lowest price per share at which such Additional Common
Shares shall have been issued.
(d) For the purposes of any adjustment of the Warrant Price
pursuant to paragraph (c) above, the following provisions shall be
applicable:
(x) CASH. In the case of the issuance of shares of
Common Stock for cash, the amount of the consideration
received by the Company shall be deemed to be the amount of
the cash proceeds received by the Company for such shares of
Common Stock before deducting therefrom any discounts,
commission, taxes or other expenses
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allowed, paid or incurred by the Company for any underwriting
or otherwise in connection with the issuance and sale thereof;
and
(y) CONSIDERATION OTHER THAN CASH. In the case of the
issuance of shares of Common Stock (other than upon the
conversion of shares of capital stock or other securities of
the Company) for consideration in whole or in part other than
cash, including securities acquired in exchange therefor
(other than securities by their terms so exchangeable), the
consideration other than cash shall be deemed to be the fair
value thereof (as determined in good faith by the Board of
Directors of the Company, whose determination shall be
conclusive to the extent reasonable), irrespective of any
accounting treatment provided, that such fair value as
determined by the Board of Directors shall not exceed the
aggregate Current Market Price (as defined below) of the
Common Stock being issued as of the date the Board of
Directors authorizes the issuance of such Common Stock; and
(z) OPTIONS AND CONVERTIBLE SECURITIES. In the case
of the issuance of (i) options, warrants or other rights to
purchase or acquire shares of Common Stock (whether or not at
the time exercisable) other than Excluded Shares, (ii)
securities by their terms convertible into or exchangeable for
shares of Common Stock (whether or not at the time so
convertible or exchangeable), or (iii) options, warrants or
rights to purchase such convertible or exchangeable securities
(whether or not at the time exercisable):
(1) the aggregate maximum number of shares
of Common Stock deliverable upon exercise of such
options, warrants or other rights to purchase or
acquire shares of Common Stock shall be deemed to
have been issued at the time such options, warrants
or other rights become exercisable for a
consideration equal to the consideration (determined
in the manner provided in clauses (x) and (y) above),
if any, received by the Company upon the issuance of
such options, warrants or other rights plus the
minimum purchase price provided in such options,
warrants or other rights for the shares of Common
Stock covered thereby;
(2) the aggregate maximum number of shares
of Common Stock deliverable upon conversion of or in
exchange for any such convertible or exchangeable
securities, or upon the exercise of options, warrants
or other rights to purchase or acquire such
convertible or exchangeable securities and the
subsequent conversion or exchange thereof, shall be
deemed to have been issued at the time such
convertible or exchangeable securities or such
options, warrants or other rights are first issued
and for a consideration equal to the consideration,
if any, received by the Company for any such
convertible or exchangeable securities or options,
warrants or other rights (excluding any cash received
on account of accrued interest or accumulated
dividends), plus the additional consideration, if
any, to be received by the Company upon the
conversion or exchange of such securities and the
exercise of any options, warrants or other rights
(the consideration in each case to be determined in
the manner provided in clauses (x) and (y) above);
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(3) on any change in the number of shares of
Common Stock deliverable upon exercise of any such
options, warrants or other rights which have become
exercisable or conversion of or exchange of such
convertible or exchangeable securities which have
become convertible or exchangeable, or any change in
the consideration to be received by the Company upon
such exercise, conversion or exchange, including but
not limited to, a change resulting from any
subdivision, split-up combination or reclassification
thereof, the Warrant Price as then in effect shall
forthwith be readjusted to such Warrant Price as
would have been obtained had such adjustment been
made upon such options, warrants or other rights;
provided, however, no adjustment shall be made with
respect to such options, warrants or other rights
exercised prior to such change, or securities
converted or exchanged prior to such change;
(4) on the expiration or cancellation of any
such options, warrants or other rights, or the
termination of the right to convert or exchange such
convertible or exchangeable securities, if the
Warrant Price shall have been adjusted upon such
securities being issued or becoming exercisable,
convertible or exchangeable, such Warrant Price shall
forthwith be readjusted to such Warrant Price as
would have been obtained had an adjustment been made
on the basis of the issuance of only the number of
shares of Common Stock actually issued upon the
exercise of such options, warrants or other rights,
or upon the conversion or exchange of such
securities; and
(5) if the Warrant Price shall have been
adjusted when such options, warrants or other rights
were first issued or such convertible or exchangeable
securities were first issued, no further adjustment
of the Warrant Price shall be made for the actual
issuance of shares of Common Stock upon the exercise,
conversion or exchange thereof.
(e) "Excluded Shares" shall mean Common Stock issued or
reserved for issuance by the Company: (i) as a stock dividend payable
in Common Stock; (ii) upon any subdivision or split-up of the
outstanding Common Stock; (iii) to employees, consultants, officers and
directors of the Company designated from time to time by the Board of
Directors pursuant to a stock option plan, but not exceeding Nine
Hundred Thirty (930) Common Stock in the aggregate (adjusted for any
stock dividend payable in Common Stock, upon any subdivision, split-up,
combination or reclassification of Common Stock, occurring after the
date hereof) or such higher number of Common Stock as may be designated
by the vote or written consent of at least seventy-five percent (75%)
of the Class C Preferred; (iv) pursuant to the terms of any acquisition
by the Company of all or substantially all of the operating assets, or
more than fifty percent (50%) of the voting capital stock or other
management interest of any Person in a transaction expressly approved
in advance by at least seventy-five percent (75%) of the Class C
Preferred; (v) upon conversion of Class A Preferred, Class B Preferred,
Class C Preferred, Class D Preferred or any other class of convertible
preferred stock; (vi) Class C Preferred issued to investors for an
aggregate purchase price not to exceed Five Million Dollars
($5,000,000) within 60 days of the date hereof; and (vii) 29.9 Shares
of Common Stock issuable to Michael Gallo upon exercise of a warrant.
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(f) "Current Market Price" shall mean the price per share of
Common Stock determined by the Board of Directors as provided below.
The Current Market Price shall be the average of the daily closing
prices per share of Common Stock for thirty (30) consecutive business
days immediately ending no more than fifteen (15 ) business days before
the day in question (as adjusted for any stock dividend, split,
combination, reclassification, reorganization or similar transaction
that took effect during such thirty (30) business day period). The
closing price for each day shall be the last reported sales price
regular way, or, in case no such reported sales take place on any such
day, the average of the last reported bid and asked prices regular way,
in either case on the principal national securities exchange on which
the Common Stock is listed or admitted to trading, or if not listed or
admitted to trading on any national securities exchange, the average of
the highest bid and the lowest asked prices quoted on the National
Association of Securities Dealers Automated Quotation ("NASDAQ") System
or through a similar organization if NASDAQ is no longer reporting such
information; provided, that if the Common Stock is not traded in such a
manner that the quotations referred to above are available for the
period required hereunder, the Current Market Price per share of Common
Stock shall be deemed to be the fair value as determined by the Board
of Directors (whose determination shall be conclusive), irrespective of
any accounting treatment; provided, that, if within fifteen (15) days
of receiving notice of an event under paragraph 8(c) requiring the
calculation of the Current Market Price, a Holder of at least ten
percent (10%) of the currently outstanding Warrants requests the
appointment of an independent appraiser, the Board of Directors shall,
within ten (10) days of such request, appoint as an independent
appraiser a nationally-known independent public accounting firm or
investment bank and the Board of Directors shall direct such
independent appraiser to conduct an appraisal and make a report on the
Current Market Price of a Common Share within thirty (30) days of its
appointment. The determination of Current Market Price by such
independent appraiser shall be final and binding upon the Corporation
and the holders of Warrants. The costs of such independent appraiser
shall be paid by the Corporation. Any independent appraiser so utilized
shall agree to treat all information supplied by the Corporation in a
confidential manner.
(g) No adjustment in the Warrant Price shall be required
unless such adjustment would require an increase or decrease of at
least one percent (1%) in such price; provided, however, that any
adjustments which by reason of this subsection (f) are not required to
be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under Section 8 shall be made
to the nearest tenth of a cent or to the nearest one-hundredth of a
share, as the case may be.
(h) The number of shares of Common Stock outstanding at any
given time shall not include shares owned or held by or for the account
of the Company, and the disposition of any such shares shall be
considered an issuance of Common Stock for the purposes of this Section
8.
9. RIGHTS TO PURCHASE OTHER SECURITIES. If any of the following shall
occur:
(a) any consolidation or merger to which the Company is a
party, other than a consolidation or a merger in which the Company is
the continuing or surviving Company and which does not result in any
reclassification of, or change (other than as a result of a subdivision
or combination) in, outstanding shares of the Common Stock, or
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(b) any sale or transfer to another corporation or entity of
all or substantially all of the assets of the Company;
then, and in either such case, the Holder of each Warrant then outstanding shall
have the right to purchase the kind and amount of shares of stock and/or other
securities and property receivable upon such consolidation, merger, sale or
transfer by a holder of the number of shares of Common Stock issuable upon
exercise of such Warrant immediately prior to such consolidation, merger, sale,
or transfer. The provisions of this Section 9 shall similarly apply to
successive consolidations, mergers, sales or transfers.
10. NOTICE OF ADJUSTMENT. Whenever the number of shares of Warrant
Stock purchasable upon the exercise of each Warrant or the Warrant Price of such
Warrant Stock is adjusted or reduced, as herein provided, the Company shall mail
by first class, postage prepaid, to each Holder (a) a notice of any reduction on
or before the day the reduction takes effect, which shall state the reduced
Warrant Price and the period during which it will be in effect and/or; (b) a
certificate setting forth the number of shares of Warrant Stock purchasable upon
the exercise of each Warrant and the Warrant Price on such Warrant Stock after
an adjustment, setting forth a brief statement of the facts requiring such
adjustment and setting forth the computation by which such adjustment was made.
11. ELIMINATION OF FRACTIONS. After a Public Offering, the Company
shall not be required to issue certificates representing fractional shares of
Common Stock upon any exercise of Warrants, but will make a payment in cash, in
lieu of issuing such fractional shares, based on the Current Market Price per
share at the time.
12. TRANSFER OF WARRANT; STOCKHOLDERS' AGREEMENT. No holder of the
Warrants shall transfer, issue, or reissue any portion of the Warrant to any
person who does not execute a supplemental agreement, agreeing to comply with
all of the terms and conditions stated in the Stockholders' Agreement between
the Company and its stockholders dated March 19, 1996, as amended (the
"Stockholders' Agreement"), but whether or not such agreement is executed, such
person in any event shall be bound by and shall perform the obligations imposed
on all stockholders thereunder.
13. CERTIFICATES TO BEAR LEGENDS.
(a) The Warrant Certificates and certificates representing
shares of Warrant Stock shall be subject to a stop-transfer order and
each such certificate shall bear the following legends by which each
Holder shall be bound until such securities have been sold pursuant to
Rule 144 or in a transaction registered under the Securities Act:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 (THE "ACT"). THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES UNDER THE ACT OR
AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED. THESE SECURITIES HAVE
BEEN ISSUED UNDER AND ARE
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GOVERNED BY AND ARE SUBJECT TO THAT CERTAIN WARRANT AGREEMENT
DATED OCTOBER 30, 1998 (THE "WARRANT AGREEMENT"). A COPY OF
THE WARRANT AGREEMENT CAN BE OBTAINED FROM THE SECRETARY OF
THE COMPANY.
(b) The Warrant Stock shall be subject to certain restrictions
on transfer as provided in the Stockholders' Agreement. Each
certificate representing shares of Warrant Stock of the Company shall,
so long as such shares are subject to such agreement, be stamped with a
legend in substantially the following form:
THE TRANSFER OF THE SHARES OF STOCK REPRESENTED BY THE WITHIN
CERTIFICATE IS RESTRICTED UNDER THE TERMS OF AN AGREEMENT
DATED MARCH 19, 1996, AS AMENDED, AMONG THE CORPORATION AND
ITS STOCKHOLDERS, A COPY OF WHICH AGREEMENT WILL BE MAILED TO
THE HOLDER HEREOF WITHOUT CHARGE WITHIN FIVE (5) DAYS AFTER
RECEIPT BY THE CORPORATION OF WRITTEN REQUEST THEREFOR.
14. NO RIGHTS AS STOCKHOLDERS; NOTICES TO HOLDERS. Nothing contained in
this Agreement or in any of the Warrant Certificates shall be construed as
conferring upon the Holders or their transferees the right to vote or to receive
dividends or to consent to or receive notice as stockholders in respect of any
meeting of stockholders for the election of directors of the Company or on any
other matter, or any rights whatsoever as stockholders of the Company. If,
however, at any time prior to the exercise of the Warrants any of the following
events shall occur:
(a) the Company shall declare any dividend or other
distribution payable in any securities or other property upon its
shares of Common Stock to the holders of its shares of Common Stock; or
(b) the Company shall offer to all of the holders of its
shares of Common Stock any additional shares of Common Stock or
securities convertible into or exchangeable for shares of Common Stock
or any right to subscribe to or purchase any thereof; or
(c) there shall be any capital reorganization, or
reclassification of the capital stock of the Company, or consolidation
or merger of the Company with another corporation, or sale of all or
substantially all of its assets to, another corporation; or
(d) there shall be a voluntary dissolution, liquidation,
bankruptcy, reorganization, arrangement, assignment for the benefit of
creditors, or winding up of the Company; or
(e) there shall be filed against the Company a petition for an
involuntary dissolution, liquidation, bankruptcy or reorganization of
the Company;
then in any one or more of said events the Company shall give notice in writing
of such event to the Holders as provided in Section 17 of this Agreement at
least twenty (20) days prior to the occurrence of such event or, if the event
requires the setting of a record date, then twenty (20) days prior to such
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record date (except for Section 14(e) of which the Company shall give notice
within five days after the occurrence of any such event).
15. INVESTMENT INTENT. The Warrants to be purchased pursuant to this
Agreement are being purchased for each Investors' own accounts (or on behalf of
managed accounts who are purchasing for their own accounts) and with no
intention of distributing the Warrants in violation of securities laws. Each
Holder understands that neither the Warrants nor the Common Stock have been
registered under the Act or any applicable state securities laws and that
neither the Warrants nor the Common Stock can be sold, transferred or otherwise
disposed of without registration under the Act and applicable state securities
laws, unless it has been established to the satisfaction of the Company that
they may be sold, transferred or otherwise disposed of without such
registration.
16. VALUE OF WARRANT. The value of the Warrants in the event of a
Liquidation or Sale shall be the difference between the value of the underlying
Common Stock upon the closing of such Liquidation or Sale and the Warrant Price
of the Warrant.
17. NOTICES. Any notice pursuant to this Agreement to be given or made
by the Holder of any Warrant Certificate to or on the Company shall be
sufficiently given or made if delivered personally or sent by telecopier or by
certified mail, addressed to the President of the Company at the Company's
principal executive offices at 11000 Cedar Avenue, Suite 210, Cleveland, OH
44106, Attn: Gil Van Bokkelen (unless notice has been given of a change of such
address), and shall be effective three (3) days after having been mailed or upon
receipt if delivered personally or sent by telecopier, with receipt confirmed by
the office of the President. Notices or demands authorized by this Agreement to
be given or made to the Holder of any Warrant Certificate shall be sufficiently
given or made if delivered personally or sent by certified mail or by
telecopier, addressed to such Holder at the address of such Holder as shown on
the Warrant Register, and shall be effective three (3) days after having been
mailed or upon receipt if delivered personally or sent by telecopier, with
receipt confirmed.
18. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to
principles of conflict of laws.
19. SUPPLEMENTS AMENDMENTS AND WAIVERS. Any supplement or amendment to,
or any waiver of any provision of, this Agreement shall be effective when
consented to in writing by the
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Holders of seventy-five percent (75%) of the Warrants then outstanding
(determined as though there were one Warrant for each share of Common Stock
issuable on the exercise of the then outstanding Warrants) and by the Company.
The Company and seventy-five percent (75%) of the Holders may from time to time
supplement or amend this Agreement in order to cure any ambiguity or to correct
or supplement any provision contained herein which may be defective or
inconsistent with any other provision herein, or to make any other provisions in
regard to matters or questions arising hereunder which the Company and the
Holders may deem necessary or desirable and which shall not be inconsistent with
the provisions of the Warrant Certificates and which shall not adversely affect
the interest of the Holders.
20. SUCCESSORS. All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Holders shall bind and inure to the
benefit of their respective successors and assigns hereunder.
21. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original; but
such counterparts together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the day, month and year first above written.
ATHERSYS, INC.
By: /s/ Gil Van Bokkelen
----------------------------
Title: President and CEO
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WARRANT PURCHASE AGREEMENT SIGNATURE PAGE
Accepted and agreed as of
the date first above written:
OHIO INNOVATION FUND I, L.P.
By: /s/ Timothy G. Biro
------------------------------
Title: Managing Partner
------------------------------
Name:
------------------------------
Title:
------------------------------
Address: ------------------------------
------------------------------
------------------------------
Telephone No.: ---------------------
Telecopier No.: ---------------------
13
15
WARRANT PURCHASE AGREEMENT SIGNATURE PAGE
Accepted and agreed as of
the date first above written:
BLUE CHIP CAPITAL FUND II LIMITED PARTNERSHIP
By: Blue Chip Venture Company, Ltd.
By: /s/ John C. McIlwraith
------------------------------------
Name: John C. McIlwraith
-----------------------------
Title: Manager
Name: John C. McIlwraith
------------------------------------
Title: Manager
------------------------------------
Address: 2000 PNC Center
------------------------------------
201 E. 5th Street
------------------------------------
Cincinnati, OH 45202
------------------------------------
Telephone No.: (513) 723-2300
--------------------
Telecopier No.: (513) 723-2306
--------------------
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WARRANT PURCHASE AGREEMENT SIGNATURE PAGE
Accepted and agreed as of
the date first above written:
MIAMI VALLEY VENTURE FUND L.P.
By: Blue Chip Venture Company of Dayton, Ltd.
By: /s/ John C. McIlwraith
------------------------------------
Name: John C. McIlwraith
------------------------------------
Title: Manager
------------------------------------
Name: John C. McIlwraith
------------------------------------
Title: Manager
------------------------------------
Address: 2000 PNC Center
------------------------------------
201 E. 5th Street
------------------------------------
Cincinnati, OH 45202
------------------------------------
Telephone No.: (513) 723-2300
--------------------
Telecopier No.: (513) 723-2306
--------------------
15
17
WARRANT PURCHASE AGREEMENT SIGNATURE PAGE
Accepted and agreed as of
the date first above written:
PRIMUS CAPITAL FUND IV LIMITED PARTNERSHIP
By: Primus Venture Partners IV Limited Partnership, its general partner
By: Primus Venture Partners IV, Inc., its general partner
By: /s/ William Mulligan
------------------------------
Title: EVP
------------------------------
Name: ------------------------------
Title: ------------------------------
Address: ------------------------------
------------------------------
------------------------------
Telephone No.: ------------------
Telecopier No.: ------------------
18
WARRANT PURCHASE AGREEMENT SIGNATURE PAGE
Accepted and agreed as of
the date first above written:
PRIMUS EXECUTIVE FUND LIMITED PARTNERSHIP
By: Primus Venture Partners IV Limited Partnership, its general partner
By: Primus Venture Partners IV, Inc., its general partner
By: /s/ William Mulligan
------------------------------
Title: EVP
------------------------------
Name: ------------------------------
Title: ------------------------------
Address: ------------------------------
------------------------------
------------------------------
Telephone No.: ---------------------
Telecopier No.: ---------------------
19
WARRANT PURCHASE AGREEMENT SIGNATURE PAGE
Accepted and agreed as of
the date first above written:
SENTRON MEDICAL INCORPORATED
By: /s/ Vincent M. Paglino
---------------------------------
Title: Vice President
---------------------------------
Name: Vincent M. Paglino
---------------------------------
Title: Vice President
---------------------------------
Address: 4445 Lake Forest Drive
---------------------------------
Suite 600
---------------------------------
Cincinnati, OH 45242
---------------------------------
Telephone No.: (513) 563-3240
--------------------
Telecopier No.: (513) 563-3261 (fax)
--------------------
20
WARRANT PURCHASE AGREEMENT SIGNATURE PAGE
Accepted and agreed as of
the date first above written:
WARBURG DILLON READ LLC
By: /s/ Kipp K. Schrage
------------------------------
Title: Managing Director Equities
------------------------------
Name: ------------------------------
Title: ------------------------------
Address: ------------------------------
------------------------------
------------------------------
By: /s/ Raymond Yee
------------------------------
Title: Executive Director Equities
------------------------------
Name: ------------------------------
Title: ------------------------------
Address: ------------------------------
------------------------------
------------------------------
Telephone No.: ---------------------
Telecopier No.: ---------------------
21
WARRANT PURCHASE AGREEMENT SIGNATURE PAGE
Accepted and agreed as of
the date first above written:
NEOMED INNOVATION, ASA
By: /s/ Fredrik C. Schreuder /s/ Carl Chr. Gilhuus-Moe, Ph.D
----------------------------- General Partner
Title: General Partner
-----------------------------
Name: Fredrik C. Schreuder
-----------------------------
Title: General Partner
-----------------------------
Address: Parkveien 55
-----------------------------
N-0256 Oslo
-----------------------------
Norway
-----------------------------
Telephone No.: 47-22545940
----------------
Telecopier No.: 47-22545941
----------------
22
WARRANT PURCHASE AGREEMENT SIGNATURE PAGE
Accepted and agreed as of
the date first above written:
HOEGH INVEST, AS
By: /s/ Carl Preben Hoegh
------------------------
Title: Chairman
------------------------
Name: Carl Preben Hoegh
------------------------
Title: ------------------------
Address: Parkveien 55
------------------------
0256 Oslo
------------------------
Norway
------------------------
Telephone No.: 47-22122800
-----------
Telecopier No.: 47-22552276
-----------
23
WARRANT PURCHASE AGREEMENT SIGNATURE PAGE
Accepted and agreed as of
the date first above written:
ATHERSYS INVESTOR LLC
By: /s/ Jud Martin
-------------------------
Title: Manager
-------------------------
Name: Jud Martin
-------------------------
Title: Manager
-------------------------
Address: 329 W 40
-------------------------
Scottsfield, NE 64361
-------------------------
Telephone No.: 308-635-3911
------------
Telecopier No.: 308-635-3130
------------