Exhibit 10.1

 

PCT, LLC, A CALADRIUS COMPANY

WARRANT FOR THE PURCHASE OF UNITS OF

PCT, LLC, A CALADRIUS COMPANY

Effective as of March 16, 2017 (the “Effective Date”)

 

Warrant No. W-1

 

Warrant to Purchase Units

 

THIS WARRANT AND THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN
REGISTERED PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, TRANSFERRED, SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS (X) SUCH DISPOSITION IS PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR AN EXEMPTION THEREFROM AND (Y) SUCH DISPOSITION IS PURSUANT TO
REGISTRATION UNDER ANY APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION
THEREFROM.

 

THIS WARRANT AND THE SECURITIES REPRESENTED BY THIS WARRANT ARE ALSO SUBJECT TO
CERTAIN ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN THIS WARRANT AND the
Amended and Restated Operating Agreement of the Company, dated as of MARCH 11,
2016, as the same may be FURTHER modified, amended and/or amended and restated,
as the case may be, from time to time IN ACCORDANCE WITH ITS TERMS (THE “LLC
AGREEMENT”) AND MAY NOT BE TRANSFERRED EXCEPT IN ACCORDANCE HEREWITH AND
THEREWITH.

 

RECITALS

 

WHEREAS, pursuant to that certain Interest Purchase Agreement (the “Purchase
Agreement”), dated as of the Effective Date, by and among Caladrius Biosciences,
Inc., a corporation incorporated under the laws of Delaware (“Caladrius”), PCT,
LLC, a Caladrius Company, a limited liability company organized and existing
under the laws of the State of Delaware (the “Company”), and Hitachi Chemical
Co. America, Ltd., (the “Holder”), Caladrius has agreed to sell, and the Holder
has agreed to purchase, the CLBS Units (as defined in the Purchase Agreement),
resulting in the Holder owning all of the Equity Interests (as defined in the
Purchase Agreement) in the Company, such that Company will be wholly-owned by
the Holder following the closing of the transactions contemplated by the
Purchase Agreement;

 

WHEREAS, pursuant to Article XI of the Purchase Agreement, in connection with
the termination of the Purchase Agreement under certain circumstances specified
therein, the Company shall be obligated to issue to the Holder and the Holder
shall be entitled to acquire additional Units (the “Termination Issuance”); and

 

 

 

 

WHEREAS, Caladrius, the Company, and the Holder desire to effect the Termination
Issuance if, pursuant to Article XI of the Purchase Agreement, the Termination
Issuance is triggered, through the exercise of this warrant (this “Warrant”).

 

NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, the Company and the Holder agree as follows:

 

FOR VALUE RECEIVED, the Company hereby certifies that the Holder and its
successors or permitted assigns, is entitled, subject to the terms and
conditions herein, to receive from the Company, at no additional cost, a number
of duly authorized, validly issued and fully paid and nonassessable Units (the
“Warrant Units”) equal to the applicable Exercisable Unit Number upon the
occurrence of a Unit Exercise Event.

 

1.            Definitions.

 

(a)          Certain Definitions. Capitalized terms used herein that are not
otherwise defined in this Warrant shall have the meanings assigned to such terms
in the LLC Agreement. The following terms, as used herein, have the following
meanings:

 

“1933 Act” means the Securities Act of 1933, as amended.

 

“Company” has the meaning in the recitals hereto.

 

“Effective Date” has the meaning set forth above.

 

“Exercisable Unit Number” has the meaning in Section 2(a).

 

“Holder” has the meaning in the recitals hereto.

 

“LLC Agreement” has the meaning set forth above.

 

“Outstanding Units” has the meaning in Section 2(a)(ii).

 

“Purchase Agreement” has the meaning in the in the recitals hereto.

 

“Transaction Agreements” shall have the meaning given to such term in the
Purchase Agreement.

 

“Unit” means a Unit of the Company or any security into which such Unit is
converted or exchanged or any successor security issued upon a merger,
consolidation, restructuring, reorganization, reclassification or similar
transaction of or affecting the Company or its equity capital.

 

“Unit Exercise Event” means: (i) the termination of the Purchase Agreement and
the transactions contemplated thereunder pursuant to Section 11.1(d) or Section
11.1(e) of the Purchase Agreement and the failure of the Company to pay the
original Holder USD $5,000,000 together with repayment of the Initial Payment
within ninety (90) days after such termination; or (ii) the termination of the
Purchase Agreement pursuant to Section

 

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11.1(a) or Section 11.1(b) of the Purchase Agreement and the failure of the
Company to repay the Initial Payment (as defined in the Purchase Agreement) to
the original Holder within ninety (90) days after such termination.

 

“Warrant Units” has the meaning in the in the recitals hereto.

 

(b)           Each reference herein to the LLC Agreement shall mean the LLC
Agreement in effect on the Effective Date and any amendments thereto after the
Effective Date.

 

2.            Exercise of Warrant.

 

(a)           Exercise. This Warrant will be automatically exercised for that
number of Warrant Units determined pursuant to this Section 2(a) immediately
upon the occurrence of a Unit Exercise Event. The number of Warrant Units to be
issued upon exercise of this Warrant shall be determined as follows (such number
of Warrant Units, the “Exercisable Unit Number”):

 

(i)       in the event of a Unit Exercise Event described in romanette (i) of
the definition of Unit Exercise Event, this Warrant shall be exercisable for
that number of Warrant Units equal to (i) a number of Units equal to 32.22% of
the total outstanding Units of the Company on a fully-diluted as converted and
exercised basis, including, without limitation, all issued and outstanding
Units, interests, options, warrants (including this Warrant), phantom units and
instruments convertible or exchangeable into Units and any Units reserved for
issuance under any equity, profits or interest incentive plan or like plan as of
immediately following the automatic exercise of this Warrant (the “Outstanding
Units”), less (ii) the total Units held by Holder as of immediately following
the automatic exercise of this Warrant (not including Units issuable upon
exercise of this Warrant) (the “Existing Holder Units”); and

 

(ii)       in the event of a Unit Exercise Event described in sub-part (ii) of
the definition of Unit Exercise Event, this Warrant shall be exercisable for
that number of Warrant Units equal to (i) 26.06% of the total Outstanding Units
of the Company, less (ii) the Existing Holder Units.

 

(b)           LLC Agreement. Concurrent with the execution of this Warrant, the
parties shall execute the amendment to the LLC Agreement set forth in Exhibit A
hereto and Caladrius and the Company hereby agree to take all actions as may be
necessary to effect such amendment following exercise of this Warrant.

 

(c)           Documentation. This Warrant shall be deemed to be automatically
and immediately exercised pursuant to Section 2(a) upon the occurrence of a Unit
Exercise Event without regard to whether the Holder has then delivered to the
Company this Warrant or executed any other documents and following exercise
hereof in conformity with the provisions hereunder, the Company shall transfer
to the Holder appropriate evidence of ownership of the Warrant Units for which
this Warrant has been exercised and any other securities or property (including,
without limitation, any money) to which the Holder is entitled, registered or
otherwise placed in, or payable to the order of, the name of the Holder and
shall no later than ten (10) Business Days following the applicable Unit
Exercise Event, deliver such evidence of ownership and any other securities or
property to the Holder.

 

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(d)           Compliance with Laws. Any issuance of Warrant Units shall be
effected pursuant to applicable United States federal and state securities laws
and Delaware law and the Company may effect such an issuance of Warrant Units in
any manner permitted under applicable United States federal and state securities
laws and Delaware law.

 

3.           Reservation of Units. The Company agrees that it will at all times
reserve for issuance and delivery upon exercise of this Warrant such number of
its authorized Units sufficient to permit the exercise in full of this Warrant
in accordance with its terms and as required by applicable law. All Warrant
Units shall be duly authorized and, when issued upon such exercise, shall be
validly issued and fully paid and non-assessable, free and clear of all liens,
security interests, charges and other encumbrances or restrictions on sale,
except to the extent set forth in the LLC Agreement.

 

4.           Transfers. This Warrant may not be Transferred by the Holder;
provided, however, that the Holder may transfer this Warrant to any direct or
indirect wholly owned subsidiary of Holder or Hitachi Chemical Co., Ltd. without
the prior consent of Caladrius, subject to the condition that this Warrant may
not be transferred by any such transferee subsidiary (or subsequent transferee
subsidiary), other than to another direct or indirect wholly owned subsidiary of
Holder or Hitachi Chemical Co., Ltd., without the prior consent of Caladrius.

 

5.           Valid Issuance. The Company and Caladrius will take such action as
may be necessary so that the Company shall validly and legally issue fully paid
and nonassessable Units immediately upon the exercise of this Warrant. The
Company and Caladrius will not, by amendment of the LLC Agreement or through
reorganization, consolidation, merger, dissolution, issue or sale of Units,
securities, sale of assets or any other voluntary action, willfully avoid or
seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such action as may be necessary or appropriate in order
to protect the rights of the holder against wrongful impairment. Without
limiting the generality of the foregoing, the Company and Caladrius will take
all such action as may be necessary or appropriate in order that the Company may
duly and validly issue fully paid and nonassessable Warrant Units upon the
exercise of this Warrant.

 

6.           Loss or Destruction of Warrant. Upon receipt by the Company of
evidence reasonably satisfactory to it (in the exercise of its reasonable
discretion) of the loss, theft, destruction or mutilation of this Warrant, and
(in the case of loss, theft or destruction) of reasonably satisfactory
indemnification, and upon surrender and cancellation of this Warrant, if
mutilated, the Company shall promptly execute and deliver a new Warrant of like
tenor and date.

 

7.           Notices. Any notice, demand or delivery authorized by this Warrant
shall be in writing and shall be given to the Holder or the Company, as the case
may be, at its address (or facsimile number) set forth below, or such other
address (or facsimile number) as shall be furnished to the party giving or
making such notice, demand or delivery:

 

(a)          if to the Company:

 

Address: PCT, LLC, a Caladrius Company    

 

 

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  c/o Caladrius Biosciences, Inc.   420 Lexington Avenue, Suite 350   New York,
New York 10170 Attention: President and General Counsel

 

with copies to (which shall not constitute notice hereunder):

 

Address:

Paul Hastings LLP

200 Park Avenue

New York, New York 10166

Attention: Neil A. Torpey, Esq.

 

(b)          If to the Holder, to:

 

Address:

Hitachi Chemical Co. America, Ltd.

2150 North First Street Suite #350

San Jose, CA 95131

Attention: Chief Financial Officer

 

with a copy to (which shall not constitute notice hereunder):

 

Address:

Fenwick & West LLP

555 California Street, 12th Floor

San Francisco, CA 94104

Attention: Samuel B. Angus Facsimile: (650) 938-5200

 

Each such notice, demand or delivery shall be effective (i) if given by
facsimile transmission, when receipt is acknowledged or (ii) if given by any
other means, when received at the address specified herein or such other address
as shall be subsequently furnished.

 

8.           Undertaking by the Company. The Company undertakes that it shall,
as soon as practicable, seek all necessary regulatory approvals prior to the
issue of Warrant Units.

 

9.           Governing Law. The parties hereby agree that all questions
concerning the construction, validity and interpretation of this WARRANT and the
performance of the obligations imposed by this WARRANT shall be governed by the
internal laws of the State of Delaware without giving effect to any choice of
law or conflict of law provision or rule, notwithstanding that public policy in
any other forum jurisdiction might indicate that the laws of that or any other
jurisdiction should otherwise apply based on contacts with such state or
otherwise.

 

10.           Entire Agreement. This Warrant and the other Transaction
Agreements set forth the entire understanding of the Company and the Holder with
respect to the subject matter hereof and thereof, and supersede all other
agreements, whether oral or written, with respect to such subject matter.

 

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11.           No Third Party Rights. Nothing expressed or referred to in this
Warrant will be construed to give any person or entity other than the Company or
the Holder any legal or equitable right, remedy or claim under or with respect
to this Warrant or any provision of this Warrant.

 

12.           Certain Interpretive Matters. No provision of this Warrant will be
interpreted in favor of, or against, the Company or the Holder by reason of the
extent to which the Company or the Holder or their respective counsel
participated in the drafting thereof or by reason of the extent to which any
such provision is inconsistent with any prior draft hereof and no rule of strict
construction will be applied against the Company or the Holder.

 

13.           Further Assurances. The Company and the Holder shall execute and
deliver such documents, instruments and agreements and take such further actions
as may be reasonably required or desirable to carry out the provisions of this
Warrant and the Company and the Holder shall cooperate with each other in
connection with the foregoing.

 

14.           Counterparts. This Warrant may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

15.           Venue. Each party hereto irrevocably submits to the exclusive
jurisdiction of the courts of the State of New York and the United States
District Court for the Southern District of New York for the purpose of any
suit, action, proceeding or judgment relating to or arising out of this Warrant
and the transactions contemplated hereby. Each of the parties hereto waives any
defense of inconvenient forum to the maintenance of any action or proceeding so
brought and waives any bond, surety, or other security that might be required of
any other party hereto with respect thereto. The parties hereto each agree that
final judgment in any such suit, action or proceeding brought in such a court
shall be conclusive and binding on it and may be enforced in any court of the
jurisdiction to which it is subject by a suit upon such judgment.

 

16.           Amendments; Waivers. Any provision of this Warrant may be amended
or waived if, and only if, such amendment or waiver is in writing and signed, in
the case of an amendment, by the Holder and the Company, or in the case of a
waiver, by the party against whom the waiver is to be effective. No failure or
delay by any party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies provided herein shall be
cumulative and not exclusive of any rights or remedies provided by law.

 

17.           Tax Treatment. The federal income tax treatment of this Warrant
shall be as provided in the LLC Agreement.

 

18.           Remedies. Each party, in addition to being entitled to exercise
its rights granted by law, including recovery of damages, shall be entitled to
specific performance of its rights provided under this Warrant. Each party
agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Warrant

 

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and hereby agrees, in an action for specific performance, to waive the defense
that a remedy at law would be adequate.

 

19.           Successors and Assigns. Subject to the provisions of Section 4,
this Warrant and the rights evidenced hereby shall inure to the benefit of and
be binding upon the successors of the Company and the permitted successors and
assigns of the Holder hereof. The provisions of this Warrant are intended to be
for the benefit of all holders from time to time of this Warrant and to the
extent applicable, all holders of Warrant Units issued upon the exercise hereof
(including permitted Transferees), and shall be enforceable by any such holder.

 

20.           Severability. If any provision of this Warrant is prohibited by
law or otherwise determined to be invalid or unenforceable by a court of
competent jurisdiction, the provision that would otherwise be prohibited,
invalid or unenforceable shall be deemed amended to apply to the broadest extent
that it would be valid and enforceable, and the invalidity or unenforceability
of such provision shall not affect the validity of the remaining provisions of
this Warrant so long as this Warrant as so modified continues to express,
without material change, the original intentions of the parties as to the
subject matter hereof and the prohibited nature, invalidity or unenforceability
of the provision(s) in question does not substantially impair the respective
expectations or reciprocal obligations of the parties or the practical
realization of the benefits that would otherwise be conferred upon the parties.
The parties will endeavor in good faith negotiations to replace the prohibited,
invalid or unenforceable provision(s) with a valid provision(s), the effect of
which comes as close as possible to that of the prohibited, invalid or
unenforceable provision(s).

 

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the Company has duly caused this Warrant to be signed by its
duly authorized officer and is dated as of the Effective Date.

 

PCT, LLC, A CALADRIUS COMPANY

 

By: /s/ Joseph Talamo   Name: Joseph Talamo   Title: Manager  

 

ACCEPTED AND AGREED:

 

HOLDER:

 

Hitachi Chemical Co. America, Ltd.

 

By: /s/ Toshinari Itakura         Name: Toshinari Itakura         Title: Chief
Executive Officer  

 

[Signature page to Warrant W-1]

 

   

 

 

EXHIBIT A

FIRST AMENDMENT TO

AMENDED AND RESTATED OPERATING AGREEMENT
OF
PCT, LLC, A CALADRIUS COMPANY

(A DELAWARE LIMITED LIABILITY COMPANY)

 

THIS FIRST AMENDMENT (“Amendment”) to the Amended and Restated Operating
Agreement of PCT, LLC, a Caladrius Company, a Delaware limited liability company
(the “Company”), is dated as of March 16, 2017 (the “Amendment Date”), and is by
and between Caladrius Biosciences, Inc., a Delaware corporation (“Caladrius”),
and Hitachi Chemical Co. America, Ltd., a New York corporation (“HCA”).

A.       Caladrius and HCA are parties to that certain Amended and Restated
Operating Agreement of the Company dated as of March 11, 2016 (the “Operating
Agreement”). Capitalized terms used in this Amendment which are not defined
herein but are defined in the Operating Agreement shall have the meanings
ascribed to them in the Operating Agreement.

B.       Pursuant to Section 12.2(b) of the Operating Agreement, the Operating
Agreement may be amended from time to time by the written approval of each
Member.

C.        The Members and the Company have entered into that certain Interest
Purchase Agreement dated as of March 16, 2017 (the “IPA”) pursuant to which the
Company has granted HCA that certain Warrant for the Purchase of Units of PCT,
LLC, a Caladrius Company (the “Warrant”).

 

D.       The Members desire to amend the Operating Agreement as provided herein
effective upon the Effective Date (as defined below).

NOW, THEREFORE, it is hereby agreed:

1.        Amendments to Specific Provisions of Operating Agreement. The
Operating Agreement is hereby amended as follows:

(a)    Section 3.2 of the Operating Agreement is hereby amended and restated in
its entirety to read as follows:

“[Intentionally omitted]”

 

(b)   The first sentence of Section 6.3(a) of the Operating Agreement is hereby
amended and restated in its entirety to read as follows:

“The Board shall consist of six (6) members (each a “Board Member”), each of
whom will be regarded as a “manager” under the Act. The initial composition of
the Board shall be determined as follows: (i) four (4) individuals designated by
Caladrius (the “Caladrius Managers”); and (ii) two (2) individuals designated by
HCA or its Affiliates (the “HCA Managers”); provided, however, that HCA shall
have a right to appoint at least two (2) individual manager for so long as HCA
and its Affiliates hold at least five percent (5%) of the outstanding Units of
the Company, excluding any Equity Securities issued or awarded to employees or
service providers in connection with services provided to the Company
(“Ownership Threshold”).”

  

 

(c)       The first sentence of Section 6.3(c) of the Operating Agreement is
hereby amended and restated in its entirety to read as follows:

“The following persons shall initially be designated to the Board: (i) the
Caladrius Managers shall be (a) Robert Preti, (b) David J. Mazzo, (c) Joseph
Talamo and (d) Steven Klosk (ii) the HCA Managers shall be (a) Tomoe Kalnay and
(b) an individual to be designated subsequent to the Effective Date by HCA
providing the Company with written notice of its designee. Each such individual
is hereby decreed duly appointed to the Board as of the date of this Agreement.”

 

(d)       The first sentence of Section 6.6(e) of the Operating Agreement is
hereby amended and restated in its entirety to read as follows:

“A simple majority of the voting interests of the Board Members shall constitute
a quorum for the transaction of any business at a Board meeting; provided that
at least one (1) Caladrius Manager, and at least one (1) HCA Manager must be
present for any Board meeting to constitute a quorum; provided further however,
in the event at least one (1) HCA Manager fails to attend two (2) consecutive
Board meetings for which proper notice was provided pursuant to the terms of
this Agreement and which failure to attend resulted in the failure of a quorum,
a quorum may be deemed to be constituted at the following Board meeting for
which proper notice was provided pursuant to the terms of this Agreement without
the attendance of an HCA Manager.”

 

(e)       Subsection (i) of the second sentence of Section 6.7 of the Operating
Agreement is hereby amended and restated in its entirety to read as follows:

“(i) designate the Persons authorized to participate on the Board Committee, one
of whom must be an HCA Manager (unless HCA waives such requirement in writing);”

(f)      The first sentence of in Section 6.13 of the Operating Agreement is
hereby amended and restated in its entirety to read as follows:

“The Board hereby delegates to management of the Company (which shall take into
consideration the input of the HCC Secondees) the creation of an annual business
and budget plan, which shall include projected investments required for
expansion of the Company’s manufacturing capacity and business operations, and
an operating and capital expenditures budget for each Fiscal Year of the Company
(each such business plan and budget once approved by the Board in accordance
with this Agreement and as subsequently modified, amended, revised, supplemented
or otherwise altered in accordance with this Agreement, a “Annual Budget”).”

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2.        Further Assurances. In connection with this Amendment and the
transactions contemplated hereby, each Member shall execute and deliver such
further documents, and perform such further acts, as may be necessary or
appropriate to effectuate and perform the provisions of this Amendment and those
transactions contemplated hereunder, as requested by the Board.

3.        Effectiveness. This Amendment shall be effective upon the execution
hereof by all Members and the exercise of the Warrant in accordance with its
terms (the “Effective Date”). Except as expressly provided to the contrary in
this Amendment, all provisions of the Operating Agreement remain in full force
and effect. In the event of any inconsistency or conflict between the provisions
of the Operating Agreement and this Amendment, the provisions of this Amendment
will prevail and govern. All references to the Operating Agreement or in any
exhibit or schedule thereto shall hereinafter refer to the Operating Agreement
as amended by this Amendment.

 

4.        Counterparts. This Amendment may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original and all of which,
when taken together, constitute one and the same document. The signature of any
party to any counterpart shall be deemed a signature to, and may be appended to,
any other counterpart.

5.        Governing Law. This Amendment shall be governed and controlled as to
validity, enforcement, interpretation, construction, effect and in all other
respects by the internal Laws of the State of Delaware applicable to contracts
made in that state, without giving effect to any choice of law or conflict of
law provision or rule that would cause the application of the Laws of any
jurisdiction other than the State of Delaware.

6.        Complete Agreement. The Operating Agreement, as amended by this
Amendment, and the Warrant embody the entire understanding and agreement between
the parties hereto with respect to the subject matter hereof and supersede all
prior agreements, understandings, and inducements, whether express or implied,
oral or written regarding the subject matter hereof.

 

[Signature page follows]

 

 

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The parties have executed and delivered this First Amendment to the Amended and
Restated Operating Agreement of PCT, LLC, a Caladrius Company, a Delaware
limited liability company as of the date first written above.

 

 

 

  Hitachi Chemical Co. America, Ltd., a New York corporation          
/s/ Toshinari Itakura   Toshinari Itakura, Chief Executive Officer          
CALADRIUS BIOSCIENCES, iNC., a Delaware corporation           /s/ David J. Mazzo
  David J. Mazzo, Chief Executive Officer