Exhibit 10.1
TERMINATION AGREEMENT
This Termination Agreement (“Agreement”) is entered into as of November 11, 2011
(“Effective Date”) by and between Athersys, Inc. and ABT Holding Company (f/k/a
Athersys, Inc.), each a corporation organized under the laws of Delaware and
having a place of business at 3201 Carnegie Avenue, Cleveland, Ohio 44115
(collectively, “Athersys”), and Angiotech Pharmaceuticals, Inc., a corporation
organized under the laws of British Columbia and having a place of business at
1618 Station Street, Vancouver, British Columbia, Canada V6A 1B6 (“Angiotech”).
In this Agreement, Athersys and Angiotech may each be referred to as a “Party”
and collectively as the “Parties.”
RECITALS
A. Angiotech and Athersys are parties to that certain Strategic Alliance
Agreement dated May 5, 2006 (the “Alliance Agreement”) and certain other
agreements entered contemporaneously therewith or thereafter in furtherance of
the transactions contemplated by the Alliance Agreement (the “Transaction
Agreements”, as further defined below).
B. The parties desire to terminate the Transaction Agreements as of the
Effective Date upon the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the covenants and obligations expressed
herein, and intending to be legally bound, the Parties agree as follows:

1.   DEFINITIONS

Capitalized terms used in this Agreement shall have the meaning set forth in the
preamble or Recitals above or as defined in this Section 1 below or this
Agreement thereafter.
“Affiliate” means, with respect to a Party, any other person or entity that
controls, is controlled by, or is under common control with such Party.
“Convertible Promissory Note” means the Convertible Promissory Note by and
between the Parties dated as of May 5, 2006.
“License Agreement” means the License Agreement by and between the Parties dated
as of May 5, 2006.
“Note Purchase Agreement” means the Note Purchase Agreement by and between the
Parties dated as of May 5, 2006.

 

 

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“License Fee Payment” means any cash paid to Athersys that is (i) paid by a
third party who is not an Affiliate of Athersys, (ii) for a license or
sublicense under intellectual property controlled by Athersys and required to
conduct or participate in the clinical development of the “Clinical Development
Candidate” (as such term is defined in the Alliance Agreement) that is the
subject of IND # 13554 for acute myocardial infarction and (iii) paid to
Athersys within six months after the effective date of the agreement granting
such license or sublicense, excluding any such payments for research,
development, or manufacturing. Examples of License Fee Payments include upfront
license fees and the purchase price for the assets associated with such
candidate(s) and indication(s). Examples of payments that are not License Fee
Payments include payments for FTEs for research, development, conducting
clinical trials, or manufacturing, for the supply of cells or other materials,
for reimbursement of out of pocket expenses or other payments to third parties
for goods or services (with such designated payment amounts to be reasonable and
customary for a product development program of this type) and for payments for
the purchase of stock of Athersys. It is expected that such License Fee Payments
or other aspects of any agreement relating to the Clinical Development Candidate
will be constructed in accordance with commercially reasonable and prevailing
industry practices as pertains to such agreements.
“Orthopedic Side Letter” means the letter re: Notice Requirements and Option for
Orthopedic Indications from Gil Van Bokkelen, President and CEO of Athersys, to
Tom Bailey, Chief Financial Officer of Angiotech, dated as of May 5, 2006.
“Sublicense Agreement” means the Sublicense Agreement by and between the Parties
dated as of May 5, 2006.
“Subordination Agreement” means the Subordination Agreement by and between the
Parties dated as of May 5, 2006.
“Transaction Agreements” means the Alliance Agreement, License Agreement,
Sublicense Agreement, Orthopedic Side Letter, Note Purchase Agreement,
Subordination Agreement, Convertible Promissory Note and any other agreements,
written or oral, between the Parties related to the foregoing.

2.   TERMINATION

2.1   Termination; No Survival. The Transaction Agreements are hereby terminated
as of the Effective Date. Notwithstanding Section 16.4 of the Alliance
Agreement, Section 6.2 of the License Agreement, Section 6.3 of the Sublicense
Agreement, Section 5.1 of the Note Purchase Agreement, and any other provision
in any of the Transaction Agreements specified or contemplated to survive
termination of such agreement, no such provision shall survive. The only
obligations a Party shall have to the other Party with respect to the subject
matter of the Transaction Agreements after the Effective Date are those
specified in this Agreement.

2.2   Mutual Release. Each Party does hereby release and forever discharge the
other Party, its Affiliates and each of their respective directors, officers,
employees, agents, servants, representatives, partners, predecessors and
successors in interest, assignees and trustees (“Released Person”) from any and
all claims, manner of action, causes of action, suits, proceedings, debts,
accounts, judgments, damages, costs, expenses, liens, attachments, liabilities,
rights, obligations or any other thing whatsoever, whether arising by contract,
at law or equity, civil or criminal, known or unknown, contingent or
non-contingent, that a party has now or may hereafter acquire or claim to
acquire at any time in the future against any Released Person by reason of, or
on account of, or in any way arising under, resulting or to result from, or
relating in any manner whatsoever to the Transaction Agreements.

 

 

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2.3   Indemnification. Athersys irrevocably and unconditionally indemnifies
Angiotech and each Angiotech Released Person against all losses and liabilities
incurred by them, all harm and damage sustained by them, and all costs or
expenses (including legal fees on an indemnity basis) payable by them, arising
after the Effective Date in respect of third party claims against Angiotech or
an Angiotech Released Person based on the development, design and conduct of the
Phase II clinical trial that will evaluate the efficacy of the Clinical
Development Candidate, its successor trials and future development candidates,
or out of the implementation or use of any project or trial related to any other
technology described in the Transaction Agreements.

3.   PAYMENTS AND SHARES

3.1   Final Development Co-funding Payment. In full satisfaction of any and all
amounts due from Angiotech for its obligation to fund the costs of clinical
development activities (pursuant to Section 7.1 of the Alliance Agreement or
otherwise), within five days after the Effective Date, Angiotech shall pay to
Athersys One Hundred Sixty Thousand United States Dollars (USD $160,000.00) by
wire transfer in immediately available funds to an account designated by
Athersys in writing.

3.2   Athersys Contingent Payments. Athersys shall pay to Angiotech a share of
any License Fee Payments as follows.

  (A)   25% of any License Fee Payments paid to Athersys pursuant to any
agreement having an effective date (i) before enrollment of the first patient in
the first Phase II Study (as defined in the Alliance Agreement) and (ii) within
12 months after the Effective Date; and

  (B)   15% of any License Fee Payments paid to Athersys pursuant to any
agreement having an effective date (i) during a Phase II Study, (ii) after
enrollment of the first patient in the first Phase II Study, (iii) before there
has been Five Million US Dollars (USD $5,000,000.00) in costs and expenses
incurred in such Phase II Study, and (iv) within 24 months after the Effective
Date; and

 

 

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  (C)   10% of any License Fee Payments paid to Athersys pursuant to an
agreement having an effective date (i) after enrollment of the first patient in
the first Phase II Study, (ii) after there has been Five Million US Dollars (USD
$5,000,000.00) in costs and expenses incurred in such Phase II Study, and
(iii) within 36 months after the Effective Date; provided, however, that the
amount due to Angiotech hereunder shall not exceed Five Million US Dollars (USD
$5,000,000.00) in aggregate.

  (D)   Athersys shall pay the amount due within 60 days after the License Fee
Payment subject to sharing with Angiotech is received by Athersys. Such
payment(s) shall be made by wire transfer to an account designated by Angiotech
in writing.

3.3   Angiotech Shares of Athersys. Angiotech shall provide to Athersys notice
of Angiotech’s intention to provide to any third party any bona fide offer to
sell (which shall in no event be less than 10 business days) or Angiotech’s
receipt of any bona fide offer to purchase any of the shares of Athersys common
stock owned by Angiotech. The Parties shall reasonably cooperate in connection
with any such sale; provided, however, that such cooperation shall not require
Athersys to disclose to Angiotech or the potential purchaser of stock any
information about Athersys or its operations not publicly made available by
Athersys or otherwise take an action or fail to take any action that could be
deemed a violation of any law, regulation, or rule, as determined by legal
counsel to Athersys.

3.4   Taxes on Payments. Any withholding of taxes levied by tax authorities on
the payments hereunder shall be deducted by the Party required to make the
payment (“Paying Party”) from the sums otherwise payable by the Paying Party
hereunder for payment to the proper tax authorities on behalf of the other Party
(“Payment Recipient”) and shall be paid by the Paying Party to such proper tax
authorities. The Parties agree to cooperate with each other in the event the
Payment Recipient claims exemption from such withholding or seeks deductions
under any double taxation or other similar treaty or agreement from time to time
in force, such cooperation to consist of providing receipts of payment of such
withheld tax or other documents reasonably available to the Parties.

4.   CONFIDENTIALITY

4.1   Confidential Information. “Athersys Confidential Information” means all
“Confidential Information” (as defined in the Alliance Agreement) that Angiotech
was obligated to keep confidential pursuant to the terms of the Transaction
Agreements, including pursuant to Article 13 of the Alliance Agreement, the
terms and conditions of this Agreement, and information related to the exercise
of the Parties’ rights or the performance of the Parties’ obligations hereunder.
“Angiotech Confidential Information” means all “Confidential Information” (as
defined in the Alliance Agreement) that Athersys was obligated to keep
confidential pursuant to the terms of the Transaction Agreements, including
pursuant to Article 13 of the Alliance Agreement, the terms and conditions of
this Agreement, and information related to the exercise of the Parties’ rights
or the performance of the Parties’ obligations hereunder. “Confidential
Information” shall mean Athersys Confidential Information or Angiotech
Confidential Information, as applicable. “Disclosing Party” means Athersys with
respect to Athersys Confidential Information and means

 

 

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Angiotech with respect to Angiotech Confidential Information. “Receiving Party”
means Athersys with respect to Angiotech Confidential Information and Athersys
with respect to Angiotech Confidential Information. Notwithstanding the
foregoing, the terms “Angiotech Confidential Information,” “Athersys
Confidential Information” and “Confidential Information” shall not include any
information of the Disclosing Party that: (A) was already known by the Receiving
Party, other than under an obligation of confidentiality, at the time of
disclosure by the Disclosing Party; (B) was generally available to the public or
otherwise part of the public domain at the time of its disclosure to the
Receiving Party; (C) became generally available to the public or otherwise part
of the public domain after its disclosure to the Receiving Party and other than
through any act or omission of the Receiving Party in breach of this Agreement;
(D) was subsequently lawfully disclosed to the Receiving Party by a Third Party
on a non-confidential basis; (E) can be shown by written records of the
Receiving Party to have been independently developed by the Receiving Party
without reference to the Confidential Information of the Disclosing Party, and
without breach of any of the provisions of this Agreement; or (F) is information
that the Disclosing Party has specifically agreed in writing that the Receiving
Party may disclose.

4.2   Return or Destruction. Within 60 days after the Effective Date, Angiotech
shall return to Athersys or destroy all Athersys Confidential Information in the
possession or control of Angiotech or any of its Affiliates, in whatever form
stored; provided, however, that Angiotech may retain a copy of all such
information in its legal department files for the purposes of use in connection
with any dispute under this Agreement or the Transaction Agreements or the
transactions contemplated hereby and thereby or compliance with law, regulation,
rule or order of any governmental authority.

4.3   Confidentiality Obligations. Except as permitted pursuant to Section 4.4,
for 20 years after the Effective Date:

  (A)   The Receiving Party shall keep completely confidential, and shall not
publish or otherwise disclose, and shall not use for any purpose, any
Confidential Information of the Disclosing Party.

  (B)   Except to the extent required by law, regulation, rule or order of any
governmental authority, Angiotech shall not make any public announcement or
press release concerning any of the Transaction Agreements or this Agreement,
the transactions contemplated by any of the foregoing, the rights or obligations
of the Parties under any of the foregoing, or any of the activities that have
occurred or may occur hereunder and thereunder.

 

 

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4.4   Permitted Disclosures. Notwithstanding Section 4.3:

  (A)   The Receiving Party may disclose Confidential Information of the
Disclosing Party to the extent the Receiving Party is compelled to disclose such
information by a court or other tribunal of competent jurisdiction; provided,
however, that in such case the Receiving Party shall immediately give notice to
the Disclosing Party, so that the Disclosing Party may seek a protective order
or other remedy from said court or tribunal. In any event, the Receiving Party
shall disclose only that portion of the Confidential Information of the
Disclosing Party that, in the opinion of its legal counsel, is legally required
to be disclosed, and will exercise reasonable efforts to ensure that any such
Confidential Information of the Disclosing Party so disclosed will be accorded
confidential treatment by said court or tribunal.

  (B)   The Receiving Party may disclose the terms and conditions of this
Agreement (including providing a copy hereof or thereof, redacted as
appropriate) to any bona fide potential permitted assignee or successor to a
Party’s interest under this Agreement, to any bona fide potential lender from
which a Party is considering borrowing money, or to any bona fide investor from
which it may receive money (for stock or other consideration), or in the case of
Athersys, to any bona fide potential collaborator; provided, however, in any
such case such that the Receiving Party shall first obtain a written obligation
of confidentiality no less stringent than that imposed on the Receiving Party
under this Agreement from the bona fide potential permitted assignee or
successor, bona fide potential lender, bona fide financial investor or bona fide
potential collaborator.

  (C)   Athersys may disclose the terms and conditions of this Agreement and the
Transaction Agreements (including providing a copy hereof, redacted (as
appropriate)) in connection with filings with the U.S. Securities and Exchange
Commission or otherwise pursuant to applicable securities laws and regulations,
filings with the Internal Revenue Service and otherwise pursuant to applicable
tax laws and regulations, or as otherwise required by law or regulation, to the
extent that, in the opinion of its legal counsel, is required or likely required
to be disclosed by law or regulation.

5.   GENERAL

5.1   Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to the
principles of conflict of laws.

5.2   Assignment. No Party shall be permitted to assign or otherwise transfer
any of its rights or obligations under this Agreement without the prior written
consent of the other Party; provided, however, that a Party may assign or
otherwise transfer all of its rights and obligations under this Agreement
without the prior written consent of the other Party (a) in connection with a
sale of all or substantially all of its business or assets to which this
Agreement relates, whether by merger, sale of stock, sale of assets or otherwise
or (b) to an Affiliate of such Party. Notwithstanding the foregoing, in the
event of any such permitted assignment or other transfer, all rights and
obligations under this Agreement must be assigned or otherwise transferred
together in their entirety to such assignee or successor.

 

 

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5.3   Compliance With Laws. Each Party shall comply with all applicable laws,
rules and regulations in connection with its performance of its obligations and
exercise of its rights under this Agreement. Each Party shall furnish to the
other Party any information reasonably requested or required by the requesting
Party to enable the requesting Party to comply with the requirements of any
United States or foreign federal, state, and/or government agency.

5.4   Further Assurances. At any time, or from time to time, following Effective
Date, each Party shall, at the request of the other Party (A) deliver or cause
to be delivered to the requesting Party any records, data or other documents
consistent with the provisions of this Agreement, (B) duly execute and deliver,
or cause to be duly executed or delivered, all such consents, assignments,
documents or further instruments of transfer or license as required by this
Agreement, and (C) take or cause to be taken all such actions, in each case as
the requesting Party may reasonably deem necessary in order for the requesting
Party to obtain the full benefits of this Agreement and the transactions
contemplated hereby.

5.5   Severability. In the event that any provision of this Agreement is
determined to be invalid or unenforceable by a court of competent jurisdiction,
the remainder of this Agreement shall remain in full force and effect without
said provision. In such event, the Parties shall in good faith attempt to
negotiate a substitute clause for any provision declared invalid or
unenforceable, which substitute clause shall most nearly approximate the intent
of the Parties in agreeing to such invalid provision, without itself being
invalid.

5.6   Waivers And Amendments; Preservation Of Remedies. This Agreement may be
amended, modified, superseded, canceled, renewed or extended, and the terms and
conditions hereof may be waived, only by a written instrument signed by the
Parties or, in the case of a waiver, the Party waiving compliance. No delay on
the part of any Party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any waiver on the part of any Party
of any right, power or privilege hereunder, nor any single or partial exercise
of any right, power or privilege hereunder, preclude any other or other exercise
thereof hereunder. The rights and remedies herein provided are cumulative and
are not exclusive of any rights or remedies which any Party may otherwise have
at law or in equity.

5.7   Headings. The captions to the several Articles and Sections hereof are not
a part of this Agreement, but are included merely for convenience of reference
only and shall not affect its meaning or interpretation.

5.8   Counterparts. This Agreement may be executed by original or facsimile
signature in any number of counterparts, and each such counterpart shall be
deemed to be an original instrument, and all of which counterparts together
shall constitute one instrument.

 

 

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5.9   Successors. This Agreement shall be binding upon and inure to the benefit
of the Parties and their respective successors and permitted assigns.

5.10   Notices. All notices, requests, demands, claims and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered personally, by fax, sent by nationally recognized overnight courier or
mailed by registered or certified mail (return receipt requested), postage
prepaid, to the Parties at the addresses set forth below (or at such other
address for such party as shall be specified by like notice). All such notices
and other communications shall be deemed to have been given and received (a) in
the case of personal delivery, on the date of such delivery, (b) in the case of
delivery by facsimile transmission, on the date of such delivery, (c) in the
case of delivery by nationally recognized express courier, on the date of such
delivery, and (d) in the case of mailing within the United States or Canada, on
the fifth (5th) business day following such mailing.

If to Angiotech:
Angiotech Pharmaceuticals, Inc.
1618 Station Street
Vancouver, BC Canada V6A 1B6
Fax: 604-221-2330
Attn: Chief Executive Officer
If to Athersys:
Athersys, Inc.
3201 Carnegie Avenue
Cleveland, OH 44115-2634
Fax: (216) 361-9495
Attn: Chief Executive Officer
with a copy (which shall not constitute notice) to:
Jones Day
12265 El Camino Real, Suite 200
San Diego, CA 92130
Fax: 858.314.1250
Attn: Thomas A. Briggs, Esq.

 

 

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5.11   Independent Contractor. No Party shall be construed to be a partner,
joint venturer, franchisee, employee, principal, agent, representative or
participant of or with the other Party for any purpose whatsoever by virtue of
this Agreement. No Party has any right or authority to assume or to create any
obligation or responsibility, express or implied, on behalf of or in the name of
the other Party in any manner by virtue of this Agreement.

5.12   Complete Agreement. This Agreement, including any definitions
specifically referenced in the Alliance Agreement, constitutes the entire
agreement, both written and oral, between the Parties with respect to the
subject matter hereof, and all prior agreements respecting the subject matter
hereof, either written or oral, expressed or implied, are merged and canceled,
and are null and void and of no effect.

[Signatures are on the following page.]

 

 

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IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement to be effective as of the Effective
Date.

                              ATHERSYS, INC.       ANGIOTECH PHARMACEUTICALS,
INC.    
 
                            By:   /s/ William O. Lehmann       By:   /s/ Thomas
Bailey                          
 
  Name:   William O. Lehmann           Name:   Thomas Bailey    
 
  Title:   President & COO           Title:   President / CEO    
 
                            ABT HOLDING COMPANY                    
 
                            By:   /s/ William O. Lehmann                        
                     
 
  Name:   William O. Lehmann                    
 
  Title:   President & COO