EXHIBIT 10.33
SECURITIES PURCHASE AGREEMENT
     This SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of June 8,
2007, is made by and among BTHC VI, Inc., a Delaware corporation with
headquarters located at 12890 Hilltop Road, Argyle, Texas 76226 (the “Company”),
Athersys, Inc., a Delaware corporation with headquarters located at 3201
Carnegie Avenue, Cleveland, Ohio 44115 (“Athersys”), and the investors listed on
the Schedule of Investors attached hereto as Exhibit A-1 (individually, an
“Investor” and collectively, the “Investors”).
BACKGROUND
     A. The Company and Athersys are parties to a Merger Agreement and Plan of
Reorganization (the “Merger Agreement”) pursuant to which, in exchange for
certain consideration payable to the security holders of Athersys prior to the
Merger (the “Athersys Stockholders”), a wholly-owned subsidiary of the Company
will be merged with and into Athersys, with Athersys as the surviving entity
(the “Merger”). As a result of the Merger, Athersys will be a wholly-owned
subsidiary of the Company. The closing date for the Merger is targeted for any
date up to and including June 29, 2007 (the “First Closing Date”).
     B. The Company and each Investor are executing and delivering this
Agreement in reliance upon the exemption from registration afforded by
Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”),
and Rule 506 of Regulation D (“Regulation D”) as promulgated by the United
States Securities and Exchange Commission (the “SEC”) under the Securities Act.
     C. Each Investor, severally and not jointly, wishes to purchase, and the
Company wishes to sell, upon the terms and conditions stated in this Agreement,
(i) that aggregate number of shares of the Common Stock, par value $0.001 per
share, of the Company (the “Common Stock”), set forth opposite such Investor’s
name in column two (2) on the Schedule of Investors in Exhibit A-1 (“Initial
Common Shares”), (ii) initial warrants, in substantially the form attached
hereto as Exhibit E (the “Initial Warrants”) to acquire up to that number of
additional shares of Common Stock set forth opposite such Investor’s name in
column three (3) on the Schedule of Investors (as exercised, collectively, the
“Initial Warrant Shares”).
     D. Each Investor listed on Exhibit A-2 hereto (the “Second Closing Schedule
of Investors”), severally and not jointly, wishes to purchase, and the Company
wishes to sell, upon the terms and conditions stated in this Agreement in a
Second Closing (as defined in Section 2.1(b) below) (i) that aggregate number of
shares of the Common Stock, par value $0.001 per share, of the Company, set
forth opposite such Investor’s name in column two (2) on the Second Closing
Schedule of Investors (“Additional Common Shares” and collectively with the
Initial Common Shares, the “Common Shares”), (ii) warrants, in substantially the
form attached hereto as Exhibit E (the “Additional Warrants” and collectively
with the Initial Warrants, the “Warrants”) to acquire up to that number of
additional shares of Common Stock set forth opposite such Investor’s name in
column three (3) on such Second Closing Schedule of Investors (as exercised,
collectively, the

 

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“Additional Warrant Shares” and collectively with the Initial Warrant Shares,
the “Warrant Shares”).
     E. The aggregate number of shares of Common Stock that is required to be
sold in the First Closing is at least 8,000,000 shares, although it is currently
contemplated that at least 12,600,000 shares (and up to a total of 13,000,000
shares) of Common Stock shall be sold in the First Closing, with the aggregate
number of shares of Common Stock to be sold to Investors in both the First
Closing and the Second Closing not to exceed 13,000,000 shares of Common Stock.
     F. The Common Shares, the Warrants and the Warrant Shares issued pursuant
to this Agreement are collectively referred to herein as the “Securities,” and
the Common Shares and the Warrants are collectively referred to in the Private
Placement Memorandum (as defined in Section 3.1(g) below) as “Units”.
     G. At the time of the First Closing, 3,210,523 shares of Common Stock will
be issued to the Athersys Stockholders in connection with the Merger in
accordance with the Merger Agreement.
     H. Athersys, the Agents (as defined in Section 3.1(o) below) and Signature
Bank, as escrow agent (the “Escrow Agent”), have entered into an Escrow
Agreement (the “Escrow Agreement”) to provide for the safekeeping of funds
received and documents executed in connection with the offering of the
Securities. Such funds shall be held in escrow until the Closing and delivered
by the Escrow Agent on behalf of the Investors to the Company upon the
satisfaction of the Company’s closing conditions.
     NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and the Investors agree
as follows:
ARTICLE I
DEFINITIONS
     1.1 Definitions. In addition to the terms defined elsewhere in this
Agreement, the following terms have the meanings indicated:
     “Additional Common Shares” has the meaning set forth in recitals to this
Agreement.
     “Additional Purchase Price” has the meaning set forth in Section 2.1.
     “Additional Warrant Shares” has the meaning set forth in recitals to this
Agreement.
     “Additional Warrants” has the meaning set forth in recitals to this
Agreement.
     “Affiliate” means any Person that, directly or indirectly through one or
more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 144 under the
Securities Act.

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     “Agents” has the meaning set forth in Section 3.1(o).
     “Agreement” has the meaning set forth in the preamble to this Agreement.
     “Athersys” has the meaning set forth in the preamble to this Agreement.
     “Athersys Counsel” means Jones Day, counsel to Athersys.
     “Beneficial Interest Holder” has the meaning set forth in Section 3.3(a).
     “Benefit Arrangements” means all material plans, contracts, bonuses,
commissions, profit-sharing, savings, stock options, insurance, deferred
compensation, or other similar fringe or employee benefits covering former or
current employees of the Company or any of its Subsidiaries or under which the
Company or any of its Subsidiaries has any obligation or liability.
     “Best Efforts” means the reasonable best efforts that a prudent person
desirous of achieving a result would use in similar circumstances to ensure that
such result is achieved as expeditiously as practical; provided, however, that
an obligation to use Best Efforts under this Agreement does not require the
Company to dispose of or make any change to its business, expend any material
funds or incur any other material burden.
     “Bridge Noteholders” means the holders of the Bridge Notes that execute a
joinder agreement agreeing to be bound by the terms of Article VI of this
Agreement.
     “Bridge Notes” means the $2,500,000 in aggregate principal amount of
convertible secured notes of Athersys issued in October 2006.
     “Bridge Shares” means the shares of Common Stock issuable pursuant to the
exercise of the Bridge Warrants and the 531,781 shares of Common Stock issuable
upon conversion of the Bridge Notes.
     “Bridge Warrants” means the warrants to acquire 132,945 shares of Common
Stock issuable to the Bridge Noteholders in connection with the consummation of
the offering the Securities.
     “Business Day” means any day other than Saturday, Sunday or other day on
which commercial banks in The City of New York are authorized or required by law
to remain closed.
     “Closing” has the meaning set forth in Section 2.1(c).
     “Closing Date” has the meaning set forth in Section 2.3.
     “Closing Price” means, for any date, the closing price per share of the
Common Stock for such date (or the nearest preceding date) on the primary
Eligible Market or Trading Market on which the Common Stock is then listed or
quoted.

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     “Company” has the meaning set forth in the preamble to this Agreement.
     “Company Counsel” means (a) with respect to certain pre-Merger matters,
Thelen Reid Brown Raysman & Steiner LLP, and (b) with respect to certain
post-Merger matters, Jones Day, in each case counsel to the Company.
     “Common Shares” has the meaning set forth in the recitals to this
Agreement.
     “Common Stock” has the meaning set forth in the recitals to this Agreement.
     “Common Stock Equivalents” means, collectively, Options and Convertible
Securities.
     “Contingent Obligation” has the meaning set forth in Section 3.1(cc).
     “Convertible Securities” means any capital stock or securities (other than
Options) convertible into or exercisable or exchangeable for Common Stock.
     “Covering Shares” has the meaning set forth in Section 4.1(b).
     “Cut Back Securities” has the meaning set forth in Section 6.8.
     “Disclosure Materials” has the meaning set forth in Section 3.1(g).
     “Effective Date” means the date that the Registration Statement is first
declared effective by the SEC.
     “Effectiveness Period” has the meaning set forth in Section 6.1(b).
     “8-K Filing” has the meaning set forth in Section 4.5.
     “Eligible Market” means any of the New York Stock Exchange, the American
Stock Exchange, The Nasdaq Global Select Market, The Nasdaq Global Market, The
Nasdaq Capital Market or the NASD OTC Bulletin Board.
     “Environmental Laws” has the meaning set forth in Section 3.1(ff).
     “Event” has the meaning set forth in Section 6.1(d).
     “Event Payments” has the meaning set forth in Section 6.1(d).
     “Exchange Act” means the Securities Exchange Act of 1934, as amended.
     “Excluded Events” has the meaning set forth in Section 6.1(d)(ii).
     “Excluded Investors” means Cowen and Company, LLC and its Affiliates,
National Securities Corporation and its Affiliates, and any other Investor that
executes a confidentiality

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agreement in connection with the receipt of material non-public information
regarding the Company or Athersys.
     “Filing Date” means 45 days after the First Closing Date.
     “First Closing” has the meaning set forth in Section 2.1(a).
     “First Closing Date” has the meaning set forth in recitals to this
Agreement.
     “GAAP” has the meaning set forth in Section 3.1(h).
     “Hazardous Materials” has the meaning set forth in Section 3.1(ff).
     “Indebtedness” has the meaning set forth in Section 3.1(cc).
     “Indemnified Party” has the meaning set forth in Section 6.4(c).
     “Indemnifying Party” has the meaning set forth in Section 6.4(c).
     “Insolvent” has the meaning set forth in Section 3.1(k).
     “Intellectual Property Rights” has the meaning set forth in Section 3.1(v).
     “Initial Common Shares” has the meaning set forth in recitals to this
Agreement.
     “Initial Purchase Price” has the meaning set forth in Section 2.1.
     “Initial Warrant Shares” has the meaning set forth in recitals to this
Agreement.
     “Investor” has the meaning set forth in the preamble to this Agreement. For
purposes of Article VI of this Agreement only, the term Investor shall also
include the Agents and the Bridge Noteholders.
     “knowledge of the Company” means the knowledge of the Company and the
Subsidiaries, including Athersys.
     “Lien” means any lien, charge, claim, security interest, encumbrance, right
of first refusal or other restriction.
     “Losses” means any and all losses, claims, damages, liabilities, settlement
costs and expenses, including, without limitation, reasonable attorneys’ fees,
but excluding any decrease in the market price of the Common Stock.
     “Material Adverse Effect” means (i) a material adverse effect on the
results of operations, assets, business, prospects or financial condition of the
Company and the Subsidiaries, taken as a whole on a consolidated basis, or
(ii) materially and adversely impair the Company’s ability to

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perform its obligations under any of the Transaction Documents, provided, that
none of the following alone shall be deemed, in and of itself, to constitute a
Material Adverse Effect: (i) a change in the market price or trading volume of
the Common Stock or (ii) changes in general economic conditions or changes
affecting the industry in which the Company operates generally (as opposed to
Company-specific changes) so long as such changes do not have a disproportionate
effect on the Company and its Subsidiaries taken as a whole.
     “Material Permits” has the meaning set forth in Section 3.1(x).
     “Options” means any outstanding rights, warrants or options to subscribe
for or purchase Common Stock or Convertible Securities.
     “Person” means any individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, or joint stock company.
     “Placement Agency Agreement” means that certain Placement Agency Agreement
dated as of April 19, 2007 among Athersys and the Agents.
     “Placement Agent Securities” mean the Placement Agent Warrants and the
Placement Agent Warrant Shares.
     “Placement Agent Warrants” mean the warrants to purchase Common Stock
issuable to the Agents as partial consideration for their services as placement
agents in connection with the sale of the Securities in accordance with the
terms of the Placement Agency Agreement.
     “Placement Agent Warrant Shares” mean the shares of Common Stock issuable
to the Agents or their designees upon exercise of the Placement Agent Warrants.
     “Private Placement Memorandum” has the meaning set forth in Section 3.1(g).
     “Proceeding” means an action, claim, suit, investigation or proceeding,
whether commenced or threatened in writing.
     “Prospectus” means the prospectus included in the Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A or Rule 430C promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by the Registration Statement, and all other amendments and
supplements to the Prospectus including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such Prospectus.
     “Purchase Price” has the meaning set forth in Section 2.1.
     “Qualification Date” has the meaning set forth in Section 6.1(c).

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     “Qualification Deadline” has the meaning set forth in Section 6.1(c).
     “Radius” means Radius Venture Partners II, LLC, Radius Venture Partners
III, LLC or any of their respective Affiliates.
     “Radius Director” has the meaning set forth in Section 4.7.
     “Registrable Securities” means the Common Shares and the Warrant Shares
issued or issuable pursuant to the Transaction Documents or the Placement Agent
Warrant Shares issued or issuable pursuant to the Placement Agent Warrants and
the Bridge Shares, together with any securities issued or issuable upon any
stock split, dividend or other distribution, recapitalization or similar event
with respect to the foregoing, provided, that a security shall cease to be a
Registrable Security upon (a) sale pursuant to the Registration Statement or
Rule 144 under the Securities Act or (b) such security becoming eligible for
sale immediately and without restriction pursuant to Rule 144(k) under the
Securities Act.
     “Registration Statement” means each registration statement required to be
filed under Article VI of the Agreement, including (in each case) the
Prospectus, amendments and supplements to such registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto,
and all material incorporated by reference or deemed to be incorporated by
reference in such registration statement.
     “Regulation D” has the meaning set forth in the recitals to this Agreement.
     “Related Person” has the meaning set forth in Section 3.3.
     “Repurchase Notice” has the meaning set forth in Section 6.1.
     “Repurchase Price” has the meaning set forth in Section 6.1.
     “Required Effectiveness Date” means the date which is the earliest of
(a) ninety (90) days after the Filing Date and (b) if the Registration Statement
does not become subject to review by the SEC, five (5) Trading Days after the
Company receives written notification from the SEC that the Registration
Statement will not be subject to review.
     “Rule 144,” “Rule 415,” and “Rule 424” means Rule 144, Rule 415 and
Rule 424, respectively, promulgated by the SEC pursuant to the Securities Act,
as such Rules may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC having substantially the same effect as
such Rule.
     “SEC” has the meaning set forth in the recitals to this Agreement.
     “SEC Reports” has the meaning set forth in Section 3.1(g).
     “Second Closing” has the meaning set forth in Section 2.1(b).

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     “Second Closing Date” has the meaning set forth in Section 2.3.
     “Second Closing Notice” has the meaning set forth in Section 2.3.
     “Second Closing Schedule of Investors” has the meaning set forth in the
recitals to this Agreement.
     “Securities” has the meaning set forth in the recitals to this Agreement.
     “Securities Act” has the meaning set forth in the recitals to this
Agreement.
     “Shares” means shares of the Company’s Common Stock.
     “Shelf Registration Statement” has the meaning set forth in Section 6.1(c).
     “Significant Investor” means any Investor that purchases at least
$3,000,000 of Securities pursuant to this Agreement.
     “Short Sales” has the meaning set forth in Section 3.2(h).
     “Subsidiary” means any direct or indirect subsidiary of the Company,
including Athersys after consummation of the Merger.
     “Substitute Director” has the meaning set forth in Section 4.7.
     “Trading Day” means (a) any day on which the Common Stock is listed or
quoted and traded on its primary Trading Market, (b) if the Common Stock is not
then listed or quoted and traded on any Trading Market, then a day on which
trading occurs on the Nasdaq Global Select Market (or any successor thereto), or
(c) if trading ceases to occur on the Nasdaq Global Select Market (or any
successor thereto), any Business Day.
     “Trading Market” means any Eligible Market, or any other national
securities exchange, market or trading or quotation facility on which the Common
Stock is then listed or quoted.
     “Transaction Documents” means this Agreement, including the schedules and
exhibits attached hereto, the Warrants, the Transfer Agent Instructions, the
Escrow Agreement, the Placement Agency Agreement and the Placement Agent
Warrants.
     “Transfer Agent” means National City Bank, or any successor transfer agent
for the Company.
     “Transfer Agent Instructions” means, with respect to the Company, the
Irrevocable Transfer Agent Instructions, substantially in the form of Exhibit C,
executed by the Company and delivered to and acknowledged in writing by the
Transfer Agent.
     “Warrants” has the meaning set forth in the recitals to this Agreement.

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     “Warrant Shares” has the meaning set forth in the recitals to this
Agreement.
     “Wiring Institution” has the meaning set forth in Section 3.3(b).
     “Withdrawing Director” has the meaning set forth in Section 4.7.
ARTICLE II
PURCHASE AND SALE
     2.1 Closings.
          (a) First Closing. Subject to the terms and conditions set forth in
this Agreement, the Company shall issue and sell to each Investor, and each
Investor shall, severally and not jointly, purchase from the Company on the
First Closing Date, such number of Initial Common Shares and Initial Warrants
set forth opposite such Investor’s name on Exhibit A-1 for the First Closing
hereto under the headings “Common Shares” and “Warrants” (the “First Closing”).
Notwithstanding anything to the contrary in this Agreement, up to 13,000,000
shares of Common Stock may be issued and sold at the First Closing.
          (b) Second Closing. The Company agrees to issue and sell to each
Investor listed on the Second Closing Schedule of Investors, and each Investor
agrees, severally and not jointly, to purchase from the Company on such Second
Closing Date (as defined below), up to such number of Additional Common Shares
and Additional Warrants set forth opposite such Investor’s name on the Second
Closing Schedule of Investors for the Second Closing under the headings “Common
Shares” and “Warrants” (the “Second Closing”). Notwithstanding the foregoing,
the aggregate number of shares of Common Stock to be sold to Investors in both
the First Closing and the Second Closing shall not exceed 13,000,000 shares of
Common Stock.
          (c) Closing. The First Closing and the Second Closing are each
referred to in this Agreement as a “Closing.” The date and time of each Closing
shall occur on the applicable Closing Date at the offices of Jones Day, North
Point, 901 Lakeside Avenue, Cleveland, Ohio 44114-1190 or remotely via the
exchange of documents and signatures.
          (d) Purchase Price. The purchase price for each Investor of the
Initial Common Shares and the related Initial Warrants to be purchased by each
such Investor at the First Closing shall be the amount set forth opposite such
Investor’s name on Exhibit A-1 for the First Closing (the “Initial Purchase
Price”). The purchase price for each Investor of the Additional Common Shares
and the related Additional Warrants to be purchased by each such Investor at the
Second Closing shall be the amount set forth opposite such Investor’s name on
the Second Closing Schedule of Investors at the Second Closing (the “Additional
Purchase Price”, and together with the Initial Purchase Price, the “Purchase
Price”).

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     2.2 First Closing Date. Subject to the terms and conditions set forth in
this Agreement, the date and time of the First Closing shall be the First
Closing Date (or such later date as is mutually agreed to by the Company and
each Investor).
     2.3 Second Closing Date. Subject to the terms and conditions set forth in
this Agreement, the date and time of the Second Closing (the “Second Closing
Date,” and together with the First Closing Date, each a “Closing Date” and
collectively, the “Closing Dates”) shall be 11:00 a.m., New York City Time, on
the date mutually agreed to by the Company and the Investor listed in the Second
Closing Schedule of Investors; provided, however, that such date is not expected
to be later than five (5) Business Days following the First Closing Date.
     2.4 Closing Deliveries.
          (a) At the First Closing, the Company shall deliver or cause to be
delivered to each Investor the following:
               (i) a legal opinion of (A) Company Counsel and (B) Athersys
Counsel, in each case dated as of the date of such Closing, substantially in the
form reasonably acceptable to counsel for the Agents and counsel for Radius; and
               (ii) duly executed Transfer Agent Instructions substantially in
the form of Exhibit D hereto acknowledged by the Company’s transfer agent.
          (b) On the First Closing Date, each Investor shall deliver or cause to
be delivered to the Company the Initial Purchase Price set forth opposite such
Investor’s name on Exhibit A-1 hereto under the heading “Purchase Price” by
paying United States dollars via bank, certified or personal check which has
cleared prior to the First Closing Date or in immediately available funds, by
wire transfer to the following escrow account:
Acct. Name: Signature Bank as Escrow Agent for Athersys, Inc.
ABA Number: 026013576
Acct Number: 1500892524
On the Second Closing Date, each Investor listed on the Second Closing Schedule
of Investors shall pay the Additional Purchase Price set forth opposite such
Investor’s name on the Second Closing Schedule of Investors to the Company for
the Additional Common Shares to be issued and sold to such Investor at the
Additional Closing by paying United States dollars via bank, certified or
personal check which has cleared prior to the Second Closing Date or in
immediately available funds, by wire transfer to the above-referenced escrow
account.
          (c) The Company shall cause its Transfer Agent to issue one or more
stock certificates to each Investor, free and clear of all restrictive and other
legends (except as expressly provided in Section 4.1(b) hereof), evidencing such
number of Common Shares equal

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to the number of Shares set forth opposite such Investor’s name on Exhibit A-1
hereto or the Second Closing Schedule of Investors, as applicable, under the
heading “Common Shares” registered in the name of such Investor within five
(5) Business Days of the applicable Closing.
          (d) The Company shall cause its Transfer Agent to issue a Warrant to
each Investor, issued in the name of such Investor, pursuant to which such
Investor shall have the right to acquire such number of Warrant Shares set forth
opposite such Investor’s name on Exhibit A-1 hereto or the Second Closing
Schedule of Investors, as applicable, under the heading “Warrant Shares” issued
in the name of such Investor within five (5) Business Days of the applicable
Closing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
     3.1 Representations and Warranties of the Company. The Company hereby
represents and warrants to the Investors as follows (which representations and
warranties shall be deemed to apply, where appropriate, to each Subsidiary of
the Company, including Athersys, after giving effect to the Merger):
          (a) Subsidiaries. The Company has no Subsidiaries other than Athersys
and those listed in Schedule 3.1(a) hereto. Except as disclosed in
Schedule 3.1(n) hereto, the Company owns, directly or indirectly, all of the
capital stock or comparable equity interests of each Subsidiary free and clear
of any Lien and all the issued and outstanding shares of capital stock or
comparable equity interest of each Subsidiary are validly issued and are fully
paid, non-assessable and free of preemptive and similar rights.
          (b) Organization and Qualification. Each of the Company and the
Subsidiaries is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization (as
applicable), with the requisite legal authority to own and use its properties
and assets and to carry on its business as currently conducted. Neither the
Company nor any Subsidiary is in violation of any of the provisions of its
respective certificate or articles of incorporation, bylaws or other
organizational or charter documents. Each of the Company and the Subsidiaries is
duly qualified to do business and is in good standing as a foreign corporation
or other entity in each jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification necessary, except
where the failure to be so qualified or in good standing, as the case may be,
would not, individually or in the aggregate, have or reasonably be expected to
result in a Material Adverse Effect.
          (c) Authorization; Enforcement. The Company has the requisite
corporate authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents to which it is a party and
otherwise to carry out its obligations hereunder and thereunder. The execution
and delivery of each of the Transaction Documents to which it is a party by the
Company and the consummation by it of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action on the part
of the Company and no further consent or action is required by the Company, its
Board of Directors or its

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stockholders. Each of the Transaction Documents to which it is a party has been
(or upon delivery will be) duly executed by the Company and is, or when
delivered in accordance with the terms hereof, will constitute, the valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, except as may be limited by (i) applicable bankruptcy,
insolvency, reorganization or other laws of general application relating to or
affecting the enforcement of creditors’ rights generally, and (ii) the effect of
rules of law governing the availability of specific performance and other
equitable remedies.
          (d) No Conflicts. The execution, delivery and performance of the
Transaction Documents to which it is a party by the Company and the consummation
by the Company of the transactions contemplated hereby and thereby do not, and
will not, (i) conflict with or violate any provision of the Company’s or any
Subsidiary’s certificate or articles of incorporation, bylaws or other
organizational or charter documents, (ii) conflict with, or constitute a default
(or an event that with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any agreement,
credit facility, debt or other instrument (evidencing a Company or Subsidiary
debt or otherwise) or other understanding to which the Company or any Subsidiary
is a party or by which any property or asset of the Company or any Subsidiary is
bound, or affected, except to the extent that such conflict, default,
termination, amendment, acceleration or cancellation right would not reasonably
be expected to have a Material Adverse Effect, (iii) other than as contemplated
in this Agreement, the other Transaction Documents or in the Placement Agency
Agreement or except as disclosed in Schedule 3.1(d) hereto, result in any
obligation of the Company or any of its Subsidiaries to make any payment as a
result of the consummation of the Merger or the transactions contemplated by
this Agreement or (iv) result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or
governmental authority to which the Company or a Subsidiary is subject
(including, assuming the accuracy of the representations and warranties of the
Investors set forth in Section 3.2 hereof, federal and state securities laws and
regulations and the rules and regulations of any self-regulatory organization to
which the Company or its securities are subject, including all applicable
Trading Markets), or by which any property or asset of the Company or a
Subsidiary is bound or affected, except to the extent that such violation would
not reasonably be expected to have a Material Adverse Effect.
          (e) The Securities. The Securities (including the Warrant Shares) and
the Placement Agent Securities (including the Placement Agent Warrant Shares)
have been duly authorized, and the Common Shares, the Warrant Shares and the
Placement Agent Warrant Shares, when issued and paid for in accordance with the
Transaction Documents, will be validly issued, fully paid and non-assessable,
free and clear of all Liens and shall not be subject to preemptive or similar
rights of stockholders. Assuming the accuracy of the representations and
warranties of (i) each Investor set forth in Section 3.2 hereof and (ii) the
Agents set forth in the Placement Agency Agreement, it is not necessary in
connection with the offer and sale of the Common Shares and the Warrants to the
Investors to register such Common Shares and the Warrants under the Securities
Act and the Securities will be issued in compliance with applicable federal and
state securities laws.

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          (f) Capitalization.
                    (i) Immediately prior to the Merger, the aggregate number of
shares and type of all authorized, issued and outstanding classes of capital
stock, options and other securities of the Company (whether or not presently
convertible into or exercisable or exchangeable for shares of capital stock of
the Company) is set forth in Schedule 3.1(f) hereto.
                    (ii) Immediately prior to the Merger, the aggregate number
of shares and type of all authorized, issued and outstanding classes of capital
stock, options and other securities of Athersys (whether or not presently
convertible into or exercisable or exchangeable for shares of capital stock of
Athersys) is set forth in Schedule 3.1(f) hereto.
                    (iii) As of the date hereof, immediately prior to the First
Closing and immediately after the Merger, the aggregate number of shares and
type of all authorized, issued and outstanding classes of capital stock, options
and other securities of the Company (whether or not presently convertible into
or exercisable or exchangeable for shares of capital stock of the Company) is
set forth in Schedule 3.1(f) hereto.
                    (iv) All outstanding shares of capital stock of the Company
and Athersys are duly authorized, validly issued, fully paid and nonassessable
and have been issued in compliance in all material respects with all applicable
securities laws.
                    (v) Except as disclosed in Schedule 3.1(f) hereto and except
in connection with the sale of the Securities, as of the date hereof,
immediately prior to the First Closing and immediately after the Merger, the
Company does not have outstanding any other options, warrants, script rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities, rights or obligations convertible into or exercisable or
exchangeable for, or entered into any agreement giving any Person any right to
subscribe for or acquire, any shares of Common Stock or Common Stock
Equivalents. Except as set forth on Schedule 3.1(f) hereto, and except for
customary adjustments as a result of stock dividends, stock splits, combinations
of shares, reorganizations, recapitalizations, reclassifications or other
similar events, as of the date hereof, there are no anti-dilution or price
adjustment provisions contained in any security issued by the Company (or in any
agreement providing rights to security holders), and the issuance and sale of
the Securities will not obligate the Company to issue shares of Common Stock or
other securities to any Person (other than the Investors) and will not result in
a right of any holder of securities to adjust the exercise, conversion, exchange
or reset price under such securities. To the knowledge of the Company, except as
disclosed in the SEC Reports and any Schedules filed with the SEC pursuant to
Rule 13d-1 of the Exchange Act by reporting persons or in Schedule 3.1(f) hereto
and except in connection with the sale of the Securities, as of the date hereof,
no Person or group of related Persons beneficially owns (as determined pursuant
to Rule 13d-3 under the Exchange Act), or has the right to acquire, by agreement
with or by obligation binding upon the Company, beneficial ownership of in
excess of 5% of the outstanding Common Stock.
          (g) SEC Reports. The Company has filed all reports required to be
filed by it under the Exchange Act, including pursuant to Section 13(a) or
Section 15(d) thereof, for the 12

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months preceding the date hereof (or for such shorter period the Company was
required to file such reports) on a timely basis or has received a valid
extension of such time of filing and has filed any such SEC Reports prior to the
expiration of any such extension and has filed all reports required to be filed
by it under the Exchange Act, including pursuant to Section 13(a) or Section
15(d) thereof, for the two years preceding the date hereof. Such reports
required to be filed by the Company under the Exchange Act, including pursuant
to Section 13(a) or Section 15(d) thereof, together with any materials filed or
furnished by the Company under the Exchange Act, whether or not any such reports
were required being collectively referred to herein as the “SEC Reports” and,
together with this Agreement, including the Schedules and Exhibits hereto, and
Athersys’ Confidential Private Placement Memorandum, dated April 19, 2007, and
any amendment or supplement thereto (the “Private Placement Memorandum”), are
collectively referred to as the “Disclosure Materials”. As of their respective
dates, the SEC Reports filed by the Company complied in all material respects
with the requirements of the Exchange Act and the rules and regulations of the
SEC promulgated thereunder, and none of the SEC Reports, when filed by the
Company, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
          (h) Financial Statements. The financial statements of the Company
included in the SEC Reports comply in all material respects with applicable the
rules and regulations of the SEC with respect thereto as in effect at the time
of filing. Such financial statements and the financial statements of Athersys
included in the Private Placement Memorandum, have been prepared in accordance
with United States generally accepted accounting principles applied on a
consistent basis during the periods involved (“GAAP”), except as may be
otherwise specified in such financial statements, the notes thereto and except
that unaudited financial statements may not contain all footnotes required by
GAAP or may be condensed or summary statements, and fairly present in all
material respects the consolidated financial position of the Company and
Athersys, as applicable, as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, year-end audit adjustments.
          (i) Absence of Undisclosed Liabilities Except (a) as disclosed in the
SEC Reports or the Private Placement Memorandum, (b) current liabilities
incurred and obligations under agreements entered into in the usual and ordinary
course of business and (c) as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, neither the Company
nor any of its Subsidiaries has any debt, obligation or liability (whether
accrued, absolute, contingent, liquidated or otherwise, whether due or to become
due, whether or not known to the Company) arising out of any transaction entered
into at or prior to the Closing, or any act or omission at or prior to the
Closing, or any state of facts existing at or prior to the Closing, including
taxes with respect to or based upon the transactions or events occurring at or
prior to the Closing, and including, without limitation, unfunded past service
liabilities under any pension, profit sharing or similar plan.

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          (j) Material Agreements. As of the date hereof and prior to the
Merger, all material agreements to which the Company or any Subsidiary is a
party or to which the property or assets of the Company or any Subsidiary are
subject are included as part of or identified in the SEC Reports or the Private
Placement Memorandum, except as disclosed on Schedule 3.1(j). Except as
described in Schedule 3.1(j), neither the Company nor any Subsidiary, except in
each case as would not, individually or in the aggregate, reasonably be expected
to have or result in a Material Adverse Effect, is in default under or in
violation of (and no event has occurred that has not been waived that, with
notice or lapse of time or both, would result in a default by the Company or any
Subsidiary under), nor has the Company or any Subsidiary received written notice
of a claim that it is in default under or that it is in violation of, any
indenture, loan or credit agreement or any other agreement or instrument to
which it is a party or by which it or any of its properties is bound (whether or
not such default or violation has been waived).
          (k) Absence of Certain Developments. Since December 31, 2006, except
as disclosed in the SEC Reports or the Private Placement Memorandum and except
in connection with the Merger, (i) there has been no event, occurrence or
development that, individually or in the aggregate, has had or that would result
in a Material Adverse Effect, (ii) the Company has not incurred any material
liabilities other than (A) trade payables and accrued expenses incurred in the
ordinary course of business consistent with past practice and (B) liabilities
not required to be reflected in the Company’s financial statements pursuant to
GAAP or required to be disclosed in filings made with the SEC, (iii) the Company
has not altered its method of accounting or the changed its auditors, (iv) the
Company has not declared or made any dividend or distribution of cash or other
property to its stockholders, in their capacities as such, or purchased,
redeemed or made any agreements to purchase or redeem any shares of its capital
stock (except for repurchases by the Company of shares of capital stock or
options therefor held by current or former employees, officers, directors, or
consultants pursuant to Athersys’ incentive plans being terminated in connection
with the Merger or an option of the Company to repurchase such shares upon the
termination of employment or services), and (v) the Company has not issued any
equity securities to any officer, director or Affiliate, except pursuant to
existing Company stock-based plans. Except as disclosed in the SEC Reports, the
Company has not taken any steps to seek protection pursuant to any bankruptcy
law nor does the Company have any knowledge or reason to believe that its
creditors intend to initiate involuntary bankruptcy proceedings or any actual
knowledge of any fact which would reasonably lead a creditor to do so. After
giving effect to the transactions contemplated hereby to occur at the applicable
Closing, the Company will not be Insolvent (as defined below). For purposes of
this Section 3.1(k), “Insolvent” means (i) the present fair saleable value of
the Company’s assets is less than the amount required to pay the Company’s total
Indebtedness (as defined in Section 3.1(y)), (ii) the Company is unable to pay
its debts and liabilities, subordinated, contingent or otherwise, as such debts
and liabilities become absolute and matured, (iii) the Company intends to incur
or believes that it will incur debts that would be beyond its ability to pay as
such debts mature or (iv) the Company has unreasonably small capital with which
to conduct the business in which it is engaged as such business is now conducted
and is proposed to be conducted.

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          (l) Absence of Litigation. Except as disclosed in the SEC Reports or
the Private Placement Memorandum, there is no Proceeding before or by any court,
public board, government agency, self-regulatory organization or body pending
or, to the knowledge of the Company, threatened in writing against or affecting
the Company or any of its Subsidiaries that would reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.
          (m) Compliance with Law.
                    (i) Neither the Company nor any Subsidiary, except in each
case as would not, individually or in the aggregate, reasonably be expected to
have or result in a Material Adverse Effect, (A) is in violation of any order of
any applicable court, arbitrator or governmental body, or (B) is or has been in
violation of any applicable statute, rule or regulation of any governmental
authority.
                    (ii) The Company and the Subsidiaries are in compliance, and
for the past three years have been in compliance, with all applicable rules and
regulations of the United States Food and Drug Administration (“FDA”) (including
the “Good Manufacturing Practices” regulations, if and when applicable), and all
applicable rules and regulations of any analogous foreign regulatory authority.
The Company and its subsidiaries have developed and maintain quality control
procedures in accordance with applicable rules and regulations of the FDA and
any analogous foreign regulatory authority. None of the products manufactured,
marketed, or currently in development by the Company or the Subsidiaries has
been the subject of any voluntary or involuntary recall or any governmental
investigation other than routine inspections of the Subsidiaries’ facilities and
any United States and international regulatory approvals or premarket
notifications therefor are owned by and registered in the name one of the
Subsidiaries and are in full force and effect. Neither the Company nor any of
the Subsidiaries has received any notice from the FDA or any other federal,
state or foreign regulatory agency questioning its practices or threatening to
impose any penalties or sanctions, and neither the Company nor any of the
Subsidiaries is aware of any intent to deliver any such notice.
          (n) Title to Assets; Condition of Properties. The Company and the
Subsidiaries have good and marketable title to all real property owned by them
that is material to the business of the Company and the Subsidiaries and good
and marketable title in all tangible personal property owned by them that is
material to the business of the Company and the Subsidiaries, in each case free
and clear of all Liens, except as described in Schedule 3.1(n) and except for
Liens that do not, individually or in the aggregate, have or result in a
Material Adverse Effect. Any real property and facilities held under lease by
the Company and the Subsidiaries are held by them under leases that are valid,
binding and enforceable against the Company or such Subsidiary and, to the
Company’s knowledge, the other parties thereto. All facilities, machinery,
equipment, fixtures, vehicles and other properties owned, leased or used by the
Company and the Subsidiaries and necessary for their respective businesses are
in good operating condition and repair, are reasonably fit and usable for the
purposes for which they are being used, are adequate and sufficient for the
Company’s or such Subsidiary’s business.

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          (o) No General Solicitation; Placement Agent’s Fees. Neither the
Company, nor any of its Affiliates, nor any Person acting on its or their behalf
(other than the Agents and their respective Affiliates, with respect to whom the
Company makes no representation or warranty), has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with the offer or sale of the Securities. The Company shall be
responsible for the payment of any placement agent’s fees, financial advisory
fees, or brokers’ commission (other than for persons engaged by any Investor or
its investment advisor) relating to or arising out of the issuance of the
Securities pursuant to this Agreement. The Company shall pay, and hold each
Investor harmless against, any Loss arising in connection with any such claim
for fees arising out of the issuance of the Securities pursuant to this
Agreement. Athersys acknowledges that it has engaged Cowen and Company, LLC and
National Securities Corporation as its exclusive placement agents (the “Agents”)
in connection with the sale of the Securities. Other than the Agents, the
Company has not engaged any placement agent or other agent in connection with
the sale of the Securities.
          (p) Private Placement. Neither the Company nor any of its Affiliates,
nor any Person acting on its or their behalf (other than the Agents and their
respective Affiliates, with respect to whom the Company makes no representation
or warranty) has, directly or indirectly, at any time within the past six
months, made any offer or sale of any security or solicitation of any offer to
buy any security under circumstances that would (i) eliminate the availability
of the exemption from registration under the Securities Act under Section 4(2)
thereof in connection with the offer and sale by the Company of the Securities
as contemplated hereby or (ii) cause the offering of the Securities pursuant to
the Transaction Documents to be integrated with prior offerings by the Company
for purposes of any applicable law, regulation or stockholder approval
provisions, including, without limitation, under the rules and regulations of
any Trading Market. The Company is not required to be registered as an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended. The Company is not required to be registered as a United States real
property holding corporation within the meaning of the Foreign Investment in
Real Property Tax Act of 1980.
          (q) Listing and Maintenance Requirements. The Company has not, in the
twelve months preceding the date hereof, received notice (written or oral) from
any Trading Market on which the Common Stock is or has been listed or quoted to
the effect that the Company is not in compliance with the listing or maintenance
requirements of such Trading Market. The Company is in compliance with all
applicable listing and maintenance requirements of any such Trading Market.
          (r) Registration Rights. Except as contemplated pursuant to this
Agreement, the Company has not granted or agreed to grant to any Person any
rights (including “piggy-back” registration rights) to have any securities of
the Company registered pursuant to the Registration Statement contemplated by
Section 6.1(a) that have not been satisfied or waived.
          (s) Application of Takeover Protections. There is no control share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other

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similar anti-takeover provision under the Company’s charter documents or the
laws of its state of incorporation that is or could become applicable to any of
the Investors as a result of the Investors and the Company fulfilling their
obligations or exercising their rights under the Transaction Documents,
including, without limitation, as a result of the Company’s issuance of the
Securities and the Investors’ ownership of the Securities.
          (t) Disclosure. The Company confirms that neither it nor any of its
officers, directors or, to its knowledge, Affiliates has knowingly provided any
of the Investors (other than Excluded Investors) or their agents or counsel with
any information that constitutes or might constitute material, nonpublic
information (other than the existence and terms of the issuance of Securities,
as contemplated by this Agreement). The Company understands and confirms that
each of the Investors will rely on the foregoing representations in effecting
transactions in securities of the Company (other than Excluded Investors). All
disclosure provided by the Company (including by Athersys) to the Investors
regarding the Company, its business and the transactions contemplated hereby,
including the Schedules to this Agreement, furnished by or on the behalf of the
Company are true and correct in all material respects and do not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. To the Company’s knowledge, except
for the Merger and the transactions contemplated by this Agreement, no event or
circumstance has occurred or information exists with respect to the Company or
any of its Subsidiaries or its or their respective businesses, properties,
operations or financial condition, which, under applicable law, rule or
regulation, requires public disclosure or announcement by the Company but which
has not been so publicly announced or disclosed. The Company acknowledges and
agrees that no Investor (other than Excluded Investors) makes or has made any
representations or warranties with respect to the transactions contemplated
hereby other than those set forth in the Transaction Documents.
          (u) Acknowledgment Regarding Investors’ Purchase of Securities. Based
upon the assumption that the transactions contemplated by this Agreement are
consummated in all material respects in conformity with the Transaction
Documents, the Company acknowledges and agrees that each of the Investors (other
than the Agents) is acting solely in the capacity of an arm’s length purchaser
with respect to the Transaction Documents and the transactions contemplated
hereby and thereby. The Company further acknowledges that no Investor (other
than the Agents) is acting as a financial advisor or fiduciary of the Company
(or in any similar capacity) with respect to this Agreement and the transactions
contemplated hereby and any advice given by any Investor (other than the Agents)
or any of their respective representatives or agents in connection with the
Transaction Documents and the transactions contemplated hereby and thereby is
merely incidental to the Investors’ purchase of the Securities. The Company
further represents to each Investor that the Company’s decision to enter into
this Agreement has been based solely on the independent evaluation of the
transactions contemplated hereby by the Company and its representatives.
          (v) Patents and Trademarks. To the Company’s knowledge, the Company
and the Subsidiaries own, or possess adequate rights or licenses to use, all
registered trademarks, trade

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names, service marks, service mark registrations, service names, patents, patent
rights, copyrights, inventions, licenses, approvals, governmental
authorizations, trade secrets and other intellectual property rights
(“Intellectual Property Rights”) necessary to conduct their respective
businesses now conducted. None of the Company’s or the Subsidiaries’
Intellectual Property Rights have expired, or are expected to expire, within six
months from the date of this Agreement. The Company does not have any knowledge
of any infringement by the Company or the Subsidiaries of Intellectual Property
Rights of others. Except as set forth on Schedule 3.1(v) hereto, there is no
Proceeding being made or brought, or to the knowledge of the Company, being
threatened in writing, against the Company or the Subsidiaries regarding its
Intellectual Property Rights.
          (w) Insurance. The Company and the Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses and location
in which the Company and the Subsidiaries are engaged.
          (x) Regulatory Permits. The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses as described in the SEC Reports and the Private Placement
Memorandum (“Material Permits”), except where the failure to possess such
permits would not, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect, and neither the Company nor any Subsidiary
has received any written notice of Proceedings relating to the revocation or
modification of any Material Permit.
          (y) Transactions With Affiliates and Employees. Except as set forth in
the Company’s SEC Reports or in the Private Placement Memorandum, none of the
officers, directors or employees of the Company is presently a party to any
transaction that would be required to be reported pursuant to Item 404 of
Regulation S-K promulgated under the Securities Act with the Company or any of
its Subsidiaries (other than for ordinary course services as employees, officers
or directors), including any contract, agreement or other arrangement providing
for the furnishing of services to or by, providing for rental of real or
personal property to or from, or otherwise requiring payments to or from any
such officer, director or employee or, to the Company’s knowledge, any
corporation, partnership, trust or other entity in which any such officer,
director, or employee has a substantial interest or is an officer, director,
trustee or partner.
          (z) Internal Accounting Controls. The Company and the Subsidiaries,
taken as a whole, maintain a system of internal accounting controls sufficient
to provide reasonable assurance that (i) transactions are executed in accordance
with management’s general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with
management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the

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existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
          (aa) Sarbanes-Oxley Act. The Company is in compliance in all material
respects with applicable requirements of the Sarbanes-Oxley Act of 2002 and
applicable rules and regulations promulgated by the SEC thereunder, except where
such noncompliance would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.
          (bb) Foreign Corrupt Practices. Neither the Company nor any of its
Subsidiaries nor, to the knowledge of the Company, any director, officer, agent,
employee or other Person acting on behalf of the Company or any of its
Subsidiaries has, in the course of its actions for, or on behalf of, the Company
(i) used any corporate funds for any unlawful contribution, gift, entertainment
or other unlawful expenses relating to political activity; (ii) made any direct
or indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; (iii) violated or is in violation of any
provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or
(iv) made any unlawful bribe, rebate, payoff, influence payment, kickback or
other unlawful payment to any foreign or domestic government official or
employee.
          (cc) Indebtedness. Except as disclosed in the SEC Reports, the Private
Placement Memorandum or Schedule 3.1(cc), neither the Company nor any of its
Subsidiaries (i) has any outstanding Indebtedness (as defined below), (ii) is in
violation of any term of or in default under any contract, agreement or
instrument relating to any Indebtedness, except where such violations and
defaults would not result, individually or in the aggregate, in a Material
Adverse Effect, or (iii) is a party to any contract, agreement or instrument
relating to any Indebtedness, the performance of which, in the judgment of the
Company’s officers, has or is expected to have a Material Adverse Effect. For
purposes of this Agreement: (x) “Indebtedness” of any Person means, without
duplication (A) all indebtedness for borrowed money, (B) all obligations issued,
undertaken or assumed as the deferred purchase price of property or services
(other than trade payables entered into in the ordinary course of business),
(C) all reimbursement or payment obligations with respect to letters of credit,
surety bonds and other similar instruments, (D) all obligations evidenced by
notes, bonds, debentures or similar instruments, including obligations so
evidenced incurred in connection with the acquisition of property, assets or
businesses, (E) all indebtedness created or arising under any conditional sale
or other title retention agreement, or incurred as financing, in either case
with respect to any property or assets acquired with the proceeds of such
indebtedness (even though the rights and remedies of the seller or bank under
such agreement in the event of default are limited to repossession or sale of
such property), (F) all monetary obligations under any leasing or similar
arrangement which, in connection with generally accepted accounting principles,
consistently applied for the periods covered thereby, is classified as a capital
lease, (G) all indebtedness referred to in clauses (A) through (F) above secured
by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any mortgage, lien, pledge, charge,
security interest or other encumbrance upon or in any property or assets
(including accounts and contract rights) owned by any Person, even though the
Person which

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owns such assets or property has not assumed or become liable for the payment of
such indebtedness, and (H) all Contingent Obligations in respect of indebtedness
or obligations of others of the kinds referred to in clauses (A) through
(G) above; and (y) “Contingent Obligation” means, as to any Person, any direct
or indirect liability, contingent or otherwise, of that Person with respect to
any indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the primary
effect thereof, is to provide assurance to the obligee of such liability that
such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect thereto.
          (dd) Employee Matters.
                    (i) The Company and its Subsidiaries are in compliance with
all applicable laws regarding employment, wages, hours, equal opportunity,
collective bargaining and payment of social security and other taxes except to
the extent that noncompliance would not, in the aggregate, reasonably be
expected to have a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries is a party to any collective bargaining agreement or employs any
member of a union. Neither the Company nor any of its Subsidiaries is engaged in
any unfair labor practice or discriminatory employment practice, and no
complaint has been filed or, to the Company’s knowledge, threatened to be filed
against the Company or any of its Subsidiaries with or by the National Labor
Relations Board, the Equal Employment Opportunity Commission or any other
administrative agency, federal or state, that regulates labor or employment
practices, nor is any grievance filed or, to the Company’s knowledge, threatened
to be filed, against the Company or any Subsidiary by any employee pursuant to
any collective bargaining or other employment agreement to which the Company or
any Subsidiary is a party or is bound. The Company and its Subsidiaries are in
compliance with all applicable foreign, federal, state and local laws and
regulations regarding occupational safety and health standards except to the
extent that noncompliance would not reasonably be expected to have a Material
Adverse Effect, and has received no complaints from any foreign, federal, state
or local agency or regulatory body alleging violations of any such laws and
regulations.
                    (ii) Except as disclosed in the SEC Reports or in the
Private Placement Memorandum, no executive officer of the Company or any of its
Subsidiaries has notified the Company or any such Subsidiary that such officer
intends to terminate such officer’s employment with the Company or any such
Subsidiary. To the knowledge of the Company or any such Subsidiary, no executive
officer of the Company or any of its Subsidiaries is in violation of any
material term of any employment contract, confidentiality, disclosure or
proprietary information agreement, non-competition agreement, or any other
contract or agreement or any restrictive covenant between the Company or any
Subsidiary and such executive officer. All sums required to be paid prior to the
Closing Date for employee compensation and benefits, and all vacation time owing
to any employees of the Company or any of its Subsidiaries as of the Closing
Date, has either been paid or accrued on the accounting records of the Company
and its Subsidiaries.

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                    (iii) To the knowledge of the Company, the Benefit
Arrangements have been administered in substantial compliance with their terms
and with the requirements of applicable law. All payments made by the Company
and its Subsidiaries to current or former employees of the Company or any of its
Subsidiaries prior to the Closing Date pursuant to the Benefit Arrangements have
been or, to the knowledge of the Company, will be deductible under the Internal
Revenue Code of 1986, as amended.
     (ee) Labor Matters. The Company and its Subsidiaries are in compliance in
all material respects with all applicable federal, state, local and foreign laws
and regulations respecting labor, employment practices, benefits, terms and
conditions of employment and wages and hours, except where failure to be in
compliance would not, either individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.
     (ff) Environmental Laws. The Company and its Subsidiaries (i) are in
compliance with any and all Environmental Laws (as hereinafter defined),
(ii) have received all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective businesses and
(iii) are in compliance with all terms and conditions of any such permit,
license or approval where, in each of the foregoing clauses (i), (ii) and (iii),
the failure to so comply would be reasonably expected to have, individually or
in the aggregate, a Material Adverse Effect. The term “Environmental Laws” means
all federal, state, local or foreign laws relating to pollution or protection of
human health (with respect to exposure to releases of Hazardous Materials into
the environment) or the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata), including,
without limitation, laws relating to emissions, discharges, releases or
threatened releases of Hazardous Materials into the environment, or otherwise
relating to the manufacture, processing, distribution, treatment, storage,
disposal, transport or handling of Hazardous Materials, as well as all legally
binding codes, decrees, injunctions, judgments, orders or regulations issued,
entered or promulgated thereunder. The term “Hazardous Materials” means
chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes
as defined in or regulated under any Environmental Law.
     (gg) Subsidiary Rights. The Company or one of its Subsidiaries has the
unrestricted right to vote, and (subject to limitations imposed by applicable
law) to receive dividends and distributions on, all capital stock or other
equity securities of its Subsidiaries as owned by the Company or such
Subsidiary.
     (hh) Tax Status. The Company and each of its Subsidiaries (i) has made or
filed all foreign, federal and state income and all other material tax returns,
reports and declarations required by any jurisdiction to which it is subject to
be filed prior to the date hereof, (ii) has paid all taxes and other
governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and (iii) has set aside on its books provision
reasonably adequate for the payment of all taxes for periods ending on or prior
to the date hereof for which a tax return, report or declaration has not yet
been filed or for periods that include but do not end on

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the date hereof. There are no unpaid taxes in any material amount claimed to be
due by the taxing authority of any jurisdiction.
     3.2 Representations, Warranties and Covenants of the Investors. Each
Investor hereby, as to itself only and for no other Investor, represents,
warrants and covenants to the Company as follows:
          (a) Organization; Authority. Such Investor is either (i) an entity
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with the requisite corporate, partnership or
other power and authority to enter into and to consummate the transactions
contemplated by the Transaction Documents and otherwise to carry out its
obligations hereunder and thereunder or (ii) a natural person who has reached
the age of 21 with the requisite power and authority to enter into and to
consummate the transactions contemplated by the Transaction Documents. The
purchase by such Investor of the Securities hereunder has been duly authorized
by all necessary corporate, partnership or other action on the part of such
Investor. This Agreement has been duly executed and delivered by such Investor
and constitutes the valid and binding obligation of such Investor, enforceable
against it in accordance with its terms, except as may be limited by
(i) applicable bankruptcy, insolvency, reorganization or other laws of general
application relating to or affecting the enforcement of creditors’ rights
generally, and (ii) the effect of rules of law governing the availability of
specific performance and other equitable remedies.
          (b) No Public Sale or Distribution. Such Investor is (i) acquiring the
Common Shares and the Warrants and (ii) upon exercise of the Warrants will
acquire the Warrant Shares issuable upon exercise thereof, in the ordinary
course of business for its own account and not with a view towards, or for
resale in connection with, the public sale or distribution thereof, except
pursuant to sales registered under the Securities Act or under an exemption from
such registration and in compliance with applicable federal and state securities
laws, and such Investor does not have a present arrangement to effect any
distribution of the Securities to or through any person or entity; provided,
however, that by making the representations herein, such Investor does not agree
to hold any of the Securities for any minimum or other specific term and
reserves the right to dispose of the Securities at any time in accordance with
or pursuant to a registration statement or an exemption under the Securities
Act.
          (c) Investor Status. At the time such Investor was offered the
Securities, it was, and at the date hereof it is, an “accredited investor” as
defined in Rule 501(a) under the Securities Act or a “qualified institutional
buyer” as defined in Rule 144A(a) under the Securities Act. Such Investor is not
a registered broker dealer registered under Section 15(a) of the Exchange Act,
or a member of the NASD, Inc. or an entity engaged in the business of being a
broker dealer. Except as otherwise disclosed in writing to the Company on
Exhibit B-2 (attached hereto) on or prior to the date of this Agreement, such
Investor is not affiliated with any broker dealer registered under Section 15(a)
of the Exchange Act, or a member of the NASD, Inc. or an entity engaged in the
business of being a broker dealer.
          (d) Experience of Such Investor. Such Investor, either alone or
together with its representatives has such knowledge, sophistication and
experience in business and financial

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matters so as to be capable of evaluating the merits and risks of the
prospective investment in the Securities, and has so evaluated the merits and
risks of such investment. Such Investor understands that it must bear the
economic risk of this investment in the Securities indefinitely, and is able to
bear such risk and is able to afford a complete loss of such investment.
          (e) Access to Information. Such Investor acknowledges that it has
reviewed the Disclosure Materials and has been afforded: (i) the opportunity to
ask such questions as it has deemed necessary of, and to receive answers from,
representatives of the Company concerning the terms and conditions of the
offering of the Securities and the merits and risks of investing in the
Securities; (ii) access to information (other than material non-public
information) about the Company and the Subsidiaries and their respective
financial condition, results of operations, business, properties, management and
prospects sufficient to enable it to evaluate its investment; and (iii) the
opportunity to obtain such additional information that the Company possesses or
can acquire without unreasonable effort or expense that is necessary to make an
informed investment decision with respect to the investment. Neither such
inquiries nor any other investigation conducted by or on behalf of such Investor
or its representatives or counsel shall modify, amend or affect such Investor’s
right to rely on the truth, accuracy and completeness of the Disclosure
Materials and the Company’s representations and warranties contained in the
Transaction Documents. Such Investor acknowledges receipt of copies of the SEC
Reports which the Company has made available to such Investor through the EDGAR
system.
          (f) No Governmental Review. Such Investor understands that no United
States federal or state agency or any other government or governmental agency
has passed on or made any recommendation or endorsement of the Securities or the
fairness or suitability of the investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering of the
Securities.
          (g) No Conflicts. The execution, delivery and performance by such
Investor of this Agreement and the consummation by such Investor of the
transactions contemplated hereby will not (i) result in a violation of the
organizational documents, if any, of such Investor or (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which such Investor is a party, or (iii) result in a violation of
any law, rule, regulation, order, judgment or decree (including federal and
state securities laws) applicable to such Investor, except in the case of
clauses (ii) and (iii) above, for such that are not material and do not
otherwise affect the ability of such Investor to consummate the transactions
contemplated hereby.
          (h) Prohibited Transactions. No Investor, directly or indirectly, and
no Person acting on behalf of or pursuant to any understanding with any
Investor, has engaged in any purchases or sales of any securities, including any
derivatives, of the Company (including, without limitation, any Short Sales
involving any of the Company’s securities) (a “Transaction”) since the time that
such Investor was first contacted by the Company, Athersys, the Agents or any
other Person regarding an investment in the Company. Such

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Investor covenants that neither it nor any Person acting on its behalf or
pursuant to any understanding with such Investor will engage, directly or
indirectly, in any Transactions prior to the time the transactions contemplated
by this Agreement are publicly disclosed. “Short Sales” include, without
limitation, all “short sales” as defined in Rule 200 promulgated under
Regulation SHO under the Exchange Act and all types of direct and indirect stock
pledges, forward sale contracts, options, puts, calls, short sales, swaps,
derivatives and similar arrangements (including on a total return basis), and
sales and other transactions through non-U.S. broker-dealers or foreign
regulated brokers.
          (i) Restricted Securities. The Investors understand that the
Securities are characterized as “restricted securities” under the U.S. federal
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Securities Act only in certain limited circumstances.
          (j) Legends. It is understood that, except as provided in
Section 4.1(b) of this Agreement, certificates evidencing such Securities may
bear the legend set forth in Section 4.1(b)
          (k) No Legal, Tax or Investment Advice. Such Investor understands that
nothing in this Agreement or any other materials presented by or on behalf of
the Company to the Investor in connection with the purchase of the Securities
constitutes legal, tax or investment advice. Such Investor has consulted such
legal, tax and investment advisors as it, in its sole discretion, has deemed
necessary or appropriate in connection with its purchase of the Securities. Such
Investor understands that the Agents have acted solely as the agent of the
Company in this placement of the Securities, and that the Agents make no
representation or warranty with regard to the merits of this transaction or as
to the accuracy of any information such Investor may have received in connection
therewith. Such Investor acknowledges that he has not relied on any information
or advice furnished by or on behalf of the Agents.
          3.3 Patriot Act Compliance. To induce the Company to accept the
Investor’s investment, each Investor severally and not jointly hereby makes the
following representations, warranties and covenants to the Company:
          (a) The undersigned represents and warrants that no holder of any
beneficial interest in the Investor (each a “Beneficial Interest Holder”) and,
no Related Person (in the case the undersigned is an entity) is or will be:
                    (i) A person or entity whose name appears on the list of
specially designated nationals and blocked persons maintained by the Office of
Foreign Asset Control from time to time;
                    (ii) A Foreign Shell Bank; or

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          (iii) A person or entity resident in or whose subscription funds are
transferred from or through an account in a Non-Cooperative Jurisdiction.
     (b) The Investor represents that the bank or other financial institution
(the “Wiring Institution”) from which the Investor’s funds will be wired is
located in a FATF Country.
     (c) The Investor represents that:
          (i) Neither it, any Beneficial Interest Holder nor any Related Person
(in the case of the undersigned is an entity) is a Senior Foreign Political
Figure, any member of a Senior Foreign Political Figure’s Immediate Family or
any Close Associate of a Senior Foreign Political Figure; or
          (ii) Neither it, any Beneficial Interest Holder nor any Related Person
(in the case the undersigned is an entity) is resident in, or organized or
chartered under the laws of, a jurisdiction that has been designated by the
Secretary of the Treasury under Section 311 or 312 of the USA PATRIOT Act as
warranting special measures due to money laundering concerns.
          (iii) Its investment funds do not originate from, nor will they be
routed through, an account maintained at a Foreign Shell Bank, an “offshore
bank,” or a bank organized or chartered under the laws of a Non-Cooperative
Jurisdiction.
        (d) For purposes of this Section 3.3, the following definitions shall
apply:
     Close Associate: With respect to a Senior Foreign Political Figure, a
person who is widely and publicly known internationally to maintain an unusually
close relationship with the Senior Foreign Political Figure, and includes a
person who is in a position to conduct substantial domestic and international
financial transactions on behalf of the Senior Foreign Political Figure.
     FATF: The Financial Action Task Force on Money Laundering.
     FATF Country: A country that is a member of FATF. As of September 1, 2003,
the countries which are members of FATF are: Argentina; Australia; Austria;
Belgium; Brazil; Canada; Denmark; Finland; France; Germany; Greece; Hong Kong;
Iceland; Ireland; Italy; Japan; Luxembourg; Mexico; Kingdom of the Netherlands;
New Zealand; Norway; Portugal; Singapore; South Africa; Spain; Sweden;
Switzerland; Turkey; United Kingdom and United States. For a current list of
FATF members see http://www1.oecd.org/fatf/Members_en.htm.
     Foreign Bank: An organization that (i) is organized under the laws of a
country outside the United States; (ii) engages in the business of banking;
(iii) is recognized as a bank by the bank supervisory or monetary authority of
the country of its organization or principal banking operations; (iv) receives
deposits to a substantial extent in the regular course of its business; and
(v) has the power to accept demand deposits, but does not include the U.S.
branches or agencies of a foreign bank.

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     Foreign Shell Bank: A Foreign Bank without a Physical Presence in any
country, but does not include a Regulated Affiliate.
     Government Entity: Any government or any state, department or other
political subdivision thereof, or any governmental body, agency, authority or
instrumentality in any jurisdiction exercising executive, legislative,
regulatory or administrative functions of or pertaining to government.
     Immediate Family: With respect to a Senior Foreign Political Figure,
typically includes the political figure’s parents, siblings, spouse, children
and in-laws.
     Non-Cooperative Jurisdiction: Any foreign country or territory that has
been designated as non-cooperative with international anti-money laundering
principles or procedures by an intergovernmental group or organization, such as
FATF, of which the United States is a member and with which designation the
United States representative to the group or organization continues to concur.
See http://www1.oecd.org/fatf/NCCT_en.htm for FATF’s list of non-cooperative
countries and territories.
     Physical Presence: A place of business that is maintained by a Foreign Bank
and is located at a fixed address, other than solely a post office box or an
electronic address, in a country in which the Foreign Bank is authorized to
conduct banking activities, at which location the Foreign Bank: (a) employs one
or more individuals on a full-time basis; (b) maintains operating records
related to its banking activities; and (c) is subject to inspection by the
banking authority that licensed the Foreign Bank to conduct banking activities.
     Publicly Traded Company: An entity whose securities are listed on a
recognized securities exchange or quoted on an automated quotation system in the
U.S. or country other than a Non-Cooperative Jurisdiction or a wholly-owned
subsidiary of such an entity.
     Qualified Plan: A tax qualified pension or retirement plan in which at
least 100 employees participate that is maintained by an employer that is
organized in the U.S. or is a U.S. Government Entity.
     Regulated Affiliate: A Foreign Shell Bank that: (a) is an affiliate of a
depository institution, credit union, or Foreign Bank that maintains a Physical
Presence in the U.S. or a foreign country, as applicable; and (b) is subject to
supervision by a banking authority in the country regulating such affiliated
depository institution, credit union, or Foreign Bank.
     Related Person: With respect to any entity, any interest holder, director,
senior officer, trustee, beneficiary or grantor of such entity; provided that in
the case of an entity that is a Publicly Traded Company or a Qualified Plan, the
term “Related Person” shall exclude any interest holder holding less than 5% of
any class of securities of such Publicly Traded Company and beneficiaries of
such Qualified Plan.

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     Senior Foreign Political Figure: A senior official in the executive,
legislative, administrative, military or judicial branches of a non-U.S.
government (whether elected or not), a senior official of a major non-U.S.
political party, or a senior executive of a non-U.S. government-owned
corporation. In addition, a Senior Foreign Political Figure includes any
corporation, business or other entity that has been formed by, or for the
benefit of, a Senior Foreign Political Figure.
     USA PATRIOT Act: The Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT Act)
Act of 2001 (Pub. L. No. 107-56).
ARTICLE IV
OTHER AGREEMENTS OF THE PARTIES
     4.1 Transfer Restrictions.
          (a) The Investors covenant that the Securities will only be disposed
of pursuant to an effective registration statement under, and in compliance with
the requirements of, the Securities Act or pursuant to an available exemption
from the registration requirements of the Securities Act, and in compliance with
any applicable state securities laws. In connection with any transfer of
Securities other than pursuant to an effective registration statement or to the
Company, or pursuant to Rule 144(k), the Company may require the transferor to
provide to the Company an opinion of counsel selected by the transferor, the
form and substance of which opinion shall be reasonably satisfactory to the
Company, to the effect that such transfer does not require registration under
the Securities Act. Notwithstanding the foregoing, the Company hereby consents
to and agrees to register on the books of the Company and with its Transfer
Agent, without any such legal opinion, except to the extent that the Transfer
Agent requests such legal opinion, any transfer of Securities by an Investor to
an Affiliate of such Investor, provided that the transferee certifies to the
Company that it is an “accredited investor” as defined in Rule 501(a) under the
Securities Act and provided that such Affiliate does not request any removal of
any existing legends on any certificate evidencing the Securities.
          (b) The Investors agree to the imprinting, so long as is required by
this Section 4.1(b), of the following legend on any certificate evidencing any
of the Securities:
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,

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OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE
SKY LAWS.
Certificates evidencing Securities shall not be required to contain such legend
or any other legend (i) while a registration statement (including the
Registration Statement) covering the resale of the Securities is effective under
the Securities Act, (ii) following any sale of such Securities pursuant to
Rule 144 if the holder provides the Company with a legal opinion (and the
documents upon which the legal opinion is based) reasonably acceptable to the
Company to the effect that the Securities can be sold under Rule 144, (iii) if
the holder provides the Company with a legal opinion (and the documents upon
which the legal opinion is based) reasonably acceptable to the Company to the
effect that the Securities are eligible for sale under Rule 144(k), or (iv) if
the holder provides the Company with a legal opinion (and the documents upon
which the legal opinion is based) reasonably acceptable to the Company to the
effect that the legend is not required under applicable requirements of the
Securities Act (including controlling judicial interpretations and
pronouncements issued by the Staff of the SEC). The Company shall issue a
certificate in the form included in the Transfer Agent Instructions to the
Transfer Agent on the Effective Date. Following the Effective Date or at such
earlier time as a legend is no longer required for certain Securities, the
Company will no later than three Trading Days following the delivery by an
Investor to the Company or the Transfer Agent of (i) a legended certificate
representing such Securities, and (ii) an opinion of counsel to the extent
required by Section 4.1(a), deliver or cause to be delivered to such Investor a
certificate representing such Securities that is free from all restrictive and
other legends. The Company may not make any notation on its records or give
instructions to the Transfer Agent that enlarge the restrictions on transfer set
forth in this Section.
     If within three Trading Days after the Company’s receipt of a legended
certificate and the other documents as specified in Clauses (i) and (ii) of the
paragraph immediately above, the Company shall fail to issue and deliver to such
Investor a certificate representing such Securities that is free from all
restrictive and other legends, and if on or after such Trading Day the Investor
purchases (in an open market transaction or otherwise) shares of Common Stock to
deliver in satisfaction of a sale by the Investor of shares of Common Stock that
the Investor anticipated receiving from the Company without any restrictive
legend (the “Covering Shares”), then the Company shall, within three Trading
Days after the Investor’s request, pay cash to the Investor in an amount equal
to the excess (if any) of the Investor’s total purchase price (including
brokerage commissions, if any) for the Covering Shares, over the product of
(A) the number of Covering Shares, times (B) the closing sale price on the
primary Trading Market on which the Common Stock is listed or quoted on the date
of delivery of such certificate and the other documents as specified in Clauses
(i) and (ii) of the paragraph immediately above.
     (c) The Company will not object to and shall permit (except as prohibited
by law) an Investor to pledge or grant a security interest in some or all of the
Securities in connection with a bona fide margin agreement or other loan or
financing arrangement secured by the Securities, and if required under the terms
of such agreement, loan or arrangement, the

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Company will not object to and shall permit (except as prohibited by law) such
Investor to transfer pledged or secured Securities to the pledges or secured
parties, provided, that such pledgee or holder of security interest is an
“accredited investor” as defined in Rule 501(a) under the Securities Act. Except
as required by law, such a pledge or transfer would not be subject to approval
of the Company, no legal opinion of the pledgee, secured party or pledgor shall
be required in connection therewith, and no notice shall be required of such
pledge. Each Investor acknowledges that the Company shall not be responsible for
any pledges relating to, or the grant of any security interest in, any of the
Securities or for any agreement, understanding or arrangement between any
Investor and its pledgee or secured party. At the appropriate Investor’s
expense, the Company will execute and deliver such reasonable documentation as a
pledgee or secured party of Securities may reasonably request in connection with
a pledge or transfer of the Securities, including the preparation and filing of
any required prospectus supplement under Rule 424(b)(3) of the Securities Act or
other applicable provision of the Securities Act to appropriately amend the list
of Selling Stockholders thereunder. Provided that the Company is in compliance
with the terms of this Section 4.1(c), the Company’s indemnification obligations
pursuant to Section 6.4 shall not extend to any Proceeding or Losses arising out
of or related to this Section 4.1(c).
     4.2 Furnishing of Information. Until the date that any Investor owning
Common Shares or Warrant Shares may sell all of them under Rule 144(k) of the
Securities Act (or any successor provision), the Company covenants to use its
commercially reasonable efforts to (a) timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to the
Exchange Act and (b) make and keep adequate “current public information” (as
such term is described in Rule 144) available.
     4.3 Integration. The Company shall not sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the offer or sale
of the Securities in a manner that would require the registration under the
Securities Act of the sale of the Securities to the Investors or that would be
integrated with the offer or sale of the Securities for purposes of the rules
and regulations of any Trading Market.
     4.4 Reservation of Securities. The Company shall maintain a reserve from
its duly authorized shares of Common Stock for issuance pursuant to the Warrants
in such amount as may be required to fulfill its obligations to issue such
Warrant Shares. In the event that at any time the then authorized shares of
Common Stock are insufficient for the Company to satisfy its obligations to
issue such Warrant Shares under the Warrants, the Company shall promptly take
such actions as may be required to increase the number of authorized shares.
     4.5 Securities Laws Disclosure; Publicity. The Company shall, on or before
8:30 a.m., New York time, on the first Trading Day following execution of this
Agreement, issue a press release disclosing all material terms of the
transactions contemplated hereby. On or prior to the fourth Business Date
following the First Closing Date, the Company shall file a Current Report on
Form 8-K with the SEC (the “8-K Filing”) providing a summary of the material
terms of the transactions

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contemplated by the Transaction Documents and including as exhibits to such
Current Report on Form 8-K copies of this Agreement and a form of Warrant
(including the schedules and the names, and addresses of the Investors and the
amount(s) of Securities respectively purchased). Thereafter, the Company shall
timely file any filings and notices required by the SEC or applicable law with
respect to the transactions contemplated hereby. Except as herein provided, the
Company shall not publicly disclose the name of any Investor, or include the
name of any Investor in any press release without the prior written consent of
such Investor, unless otherwise required by law, including, without limitation,
in the Registration Statement. The Company shall not, and shall cause each of
its Subsidiaries and its and each of their respective officers, directors,
employees and agents not to, provide any Investor with any material nonpublic
information regarding the Company or any of its Subsidiaries from and after the
issuance of the above referenced press release without the express written
consent of such Investor, other than to any representative of any Investor that
is serving on the Company’s board of directors.
     4.6 Use of Proceeds. The Company intends to use the net proceeds from the
sale of the Securities substantially as set forth in the Private Placement
Memorandum. Pending these uses, the Company intends to invest the net proceeds
from this offering in short-term, interest-bearing, investment-grade securities,
or as otherwise pursuant to the Company’s customary investment policies.
     4.7 Radius Director. If Radius purchases Securities pursuant to this
Agreement for an aggregate purchase price of at least $6,000,000, and for so
long as Radius owns beneficially (within the meaning of Rule 13d-3 under the
Exchange Act) at least 25% of the shares of Common Stock purchased by Radius
pursuant to this Agreement, the Company agrees that it shall take, and shall
cause its Board of Directors to take, all action within its powers to nominate
one (1) representative designated by Radius (the “Radius Director”) as a member
of the Board of Directors, who shall be initially Jordan Davis. In the event
that any Radius Director designated in the manner set forth in this Section 4.7
is unable to serve, or once having commenced to serve, is removed or withdraws
from the Board of Directors (a “Withdrawing Director”), the Company agrees that
it shall take, and shall cause its Board of Directors to take, all action within
its powers to nominate or elect an individual designated by Radius (the
“Substitute Director”) as such Withdrawing Director’s replacement.
ARTICLE V
CONDITIONS
     5.1 Conditions Precedent to the Obligations of the Investors. The
obligation of each Investor to acquire Securities at the First Closing is
subject to the satisfaction or waiver by such Investor, at or before the First
Closing, of each of the following conditions:
          (a) Representations and Warranties. The representations and warranties
of the Company contained herein shall be true and correct in all material
respects as of the date when made and as of the First Closing as though made on
and as of such date.

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               (b) Performance. The Company and each other Investor shall have
performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by the Transaction Documents to be performed,
satisfied or complied with by it at or prior to the First Closing.
               (c) Merger. Contemporaneously with the First Closing, the Merger
shall have been consummated.
               (d) Injunction. There shall be no effective injunction, writ,
preliminary restraining order or any order of any nature issued by a court of
competent jurisdiction directing that the transactions provided for herein or
any of them not be consummated as herein provided..
               (e) Officer’s Certificate. Each of the Significant Investors
shall have received a certificate, dated the First Closing Date, signed by the
Chief Executive Officer of the Company, certifying that the conditions specified
in the foregoing Sections 5.1(a) through 5.1(e) hereof have been fulfilled.
               (f) Closing Deliveries. All closing deliveries required to be
made by the Company pursuant to Section 2.4(a) hereof shall have been made.
               (g) Consents and Waivers. Athersys shall have obtained the
consents and waivers set forth on Schedule 5.1(g) hereto, and such consents and
waivers shall be in full force and effect.
          5.2 Conditions Precedent to the Obligations of the Company. The
obligation of the Company to sell the Securities at the First Closing is subject
to the satisfaction or waiver by the Company, at or before the First Closing, of
each of the following conditions:
               (a) Representations and Warranties. The representations and
warranties of the Investors contained herein shall be true and correct in all
material respects as of the date when made and as of the First Closing Date as
though made on and as of such date.
               (b) Performance. The Investors shall have performed, satisfied
and complied in all material respects with all covenants, agreements and
conditions required by the Transaction Documents to be performed, satisfied or
complied with by the Investors at or prior to the First Closing.
               (c) Merger. Contemporaneously with the First Closing, the Merger
shall have been consummated.
               (d) Closing Deliveries. All closing deliveries required to be
made by the Investors pursuant to Section 2.4(b) hereof shall have been made.
               (e) Injunction. There shall be no effective injunction, writ,
preliminary restraining order or any order of any nature issued by a court of
competent jurisdiction directing

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that the transactions provided for herein or any of them not be consummated as
herein provided.
ARTICLE VI
REGISTRATION RIGHTS
          6.1 Registration Statement.
               (a) As promptly as practical, and in any event on or prior to the
Filing Date, the Company shall prepare and file with the SEC a Registration
Statement covering the resale of all Registrable Securities for an offering to
be made on a continuous basis pursuant to Rule 415. The Registration Statement
shall be on Form S-1 (except if the Company is not then eligible to register for
resale the Registrable Securities on Form S-1, in which case such registration
shall be on another appropriate form in accordance with the Securities Act, and
except that, if eligible, the Company may use Form S-3) and shall contain
(except if otherwise directed by the Investors or requested by the SEC) the
“Plan of Distribution” in substantially the form attached hereto as Exhibit C.
               (b) The Company shall use its Best Efforts to cause the
Registration Statement to be declared effective by the SEC as promptly as
possible after the filing thereof, but in any event prior to the Required
Effectiveness Date, and shall use its Best Efforts to keep the Registration
Statement continuously effective under the Securities Act until the earlier of
the date that all Common Shares and Warrant Shares covered by such Registration
Statement have been sold or can be sold publicly under Rule 144(k) (the
“Effectiveness Period”).
               (c) The Company shall timely file all reports and other material
required to be filed pursuant to the Exchange Act and otherwise use commercially
reasonable efforts to qualify and remain qualified to register securities
pursuant to a registration statement on Form S-3 (or any successor form) under
the Securities Act. Subject to Section 6.1(e), promptly following the date (the
“Qualification Date”) upon which the Company becomes eligible to use a
registration statement on Form S-3 to register the Registrable Securities for
resale, but in no event more than thirty (30) days after the Qualification Date
(the “Qualification Deadline”), the Company shall file a registration statement
on Form S-3 covering the Registrable Securities (or a post-effective amendment
on Form S-3 to a registration statement on Form S-1) (a “Shelf Registration
Statement”) and shall use commercially reasonable efforts to cause such Shelf
Registration Statement to be declared effective as promptly as practicable
thereafter.
               (d) Should an Event (as defined below) occur, then upon the
occurrence of such Event, and on every monthly anniversary thereof until the
applicable Event is cured (or, in the case of Events relating to nonconsecutive
Trading Days, upon the re-occurrence of such Event), the Company shall pay to
each Investor (other than an Agent with respect to Placement Agent Warrant
Shares or a Bridge Noteholder with respect to Bridge Shares) an amount in cash,
as liquidated damages and not as a penalty, equal to one percent (1.0%) of
(i) the number of Common Shares held by such Investor as of the date of such
Event that are not registered pursuant to an effective Registration Statement,
or not listed or quoted, or are suspended from trading on an Eligible Market (as
the case may be), multiplied by (ii) the Purchase Price paid by

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such Investor for such Common Shares; provided, however, that the total amount
of payments pursuant to this Section 6.1(d) shall not exceed, when aggregated
with all such payments paid to all Investors, ten percent (10%) of the aggregate
Purchase Price paid by all Investors. The payments to which an Investor shall be
entitled pursuant to this Section 6.1(d) are referred to herein as “Event
Payments.” Any Event Payments payable pursuant to the terms hereof shall apply
on a pro rated basis for any portion of a month prior to the cure of an Event.
In the event the Company fails to make Event Payments in a timely manner, such
Event Payments shall bear interest at the rate of one percent (1.0%) per month
(pro rated for partial months) until paid in full. All pro rated calculations
made pursuant to this paragraph shall be based upon the actual number of days in
such pro rated month.
For such purposes, each of the following shall constitute an “Event”:
                    (i) the Registration Statement is not filed on or prior to
the Filing Date or is not declared effective on or prior to the Required
Effectiveness Date;
                    (ii) except as provided for in Section 6.1(e) (the “Excluded
Events”), after the Effective Date, the Registration Statement or a subsequent
Registration Statement filed in replacement thereof) ceases to be effective for
purposes of resale by the Investors (other than an Agent with respect to
Placement Agent Warrant Shares or a Bridge Noteholder with respect to Bridge
Shares) for any reason (including without limitation by reason of a stop order
or the Company’s failure to update the Registration Statement, other than the
fault of such Investor) for five or more consecutive Trading Days or for an
aggregate of 15 Trading Days (whether or not consecutive) in any 12-month
period; and
                    (iii) except as a result of the Excluded Events, the Common
Stock is not listed or quoted, or is suspended from trading, on an Eligible
Market for a period of three Trading Days (which need not be consecutive Trading
Days) during the Effectiveness Period.
               (e) Notwithstanding anything in this Agreement to the contrary,
after 60 consecutive Trading Days of continuous effectiveness of the initial
Registration Statement filed and declared effective pursuant to this Agreement,
the Company may, by written notice to the Investors, suspend sales under a
Registration Statement after the Effective Date thereof and/or require that the
Investors immediately cease the sale of shares of Common Stock pursuant thereto
and/or defer the filing of any subsequent Registration Statement if the Company,
in the reasonable judgment of its Board of Directors after consultation with
counsel, believes that (i) there is or may be in existence material nonpublic
information or events involving the Company, the failure of which to be
disclosed in the prospectus included in the Registration Statement could result
in a violation of the Securities Act, the Exchange Act or any provision of any
applicable state securities law or (ii) it is in the best interests of the
Company to suspend sales under such registration at such time. Upon receipt of
such notice, each Investor shall immediately discontinue any sales of
Registrable Securities pursuant to such registration until such Investor is
advised in writing by the Company that the current Prospectus or amended
Prospectus, as applicable, may be used. In no event, however, shall this right
be exercised to suspend sales beyond the period during which (in the reasonable
judgment of its Board of

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Directors after consultation with counsel) the failure to require such
suspension would be materially detrimental to the Company. The Company’s rights
under this Section 6(e) may be exercised for a period of no more than 20 Trading
Days at a time and not more than twice in any twelve-month period, without such
suspension being considered as part of an Event Payment determination.
Immediately after the end of any suspension period under this Section 6(e), the
Company shall take all necessary actions (including filing any required
supplemental prospectus) to restore the effectiveness of the applicable
Registration Statement and the ability of the Investors to publicly resell their
Registrable Securities pursuant to such effective Registration Statement.
          6.2 Registration Procedures. In connection with the Company’s
registration obligations hereunder, the Company shall:
               (a) Not less than three Trading Days prior to the filing of a
Registration Statement or any related Prospectus or any amendment or supplement
thereto, furnish via email to those Significant Investors who have supplied the
Company with email addresses copies of all such documents proposed to be filed,
which documents (other than any document that is incorporated or deemed to be
incorporated by reference therein) will be subject to the review of such
Significant Investors. The Company shall reflect in each such document when so
filed with the SEC such comments regarding the Significant Investors and the
plan of distribution as the Significant Investors may reasonably and promptly
propose no later than two Trading Days after the Significant Investors have been
so furnished with copies of such documents as aforesaid.
               (b) (i) Subject to Section 6.1(e), prepare and file with the SEC
such amendments, including post-effective amendments, to each Registration
Statement and the Prospectus used in connection therewith as may be necessary to
keep the Registration Statement continuously effective, as to the applicable
Registrable Securities for the Effectiveness Period and prepare and file with
the SEC such additional Registration Statements in order to register for resale
under the Securities Act all of the Registrable Securities; (ii) cause the
related Prospectus to be amended or supplemented by any required Prospectus
supplement, and as so supplemented or amended to be filed pursuant to Rule 424;
(iii) respond as promptly as reasonably possible to any comments received from
the SEC with respect to the Registration Statement or any amendment thereto; and
(iv) comply in all material respects with the provisions of the Securities Act
with respect to the disposition of all Registrable Securities covered by the
Registration Statement during the applicable period in accordance with the
intended methods of disposition by the Investors thereof set forth in the
Registration Statement as so amended or in such Prospectus as so supplemented.
               (c) Notify the Significant Investors as promptly as reasonably
possible, and (if requested by the Significant Investors) confirm such notice in
writing no later than two Trading Days thereafter, of any of the following
events: (i) the SEC notifies the Company whether there will be a “review” of any
Registration Statement; (ii) the SEC comments in writing on any Registration
Statement; (iii) any Registration Statement or any post-effective amendment is
declared effective; (iv) the SEC or any other Federal or state governmental
authority requests any amendment or supplement to any Registration Statement or
Prospectus or requests additional

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information related thereto; (v) the SEC issues any stop order suspending the
effectiveness of any Registration Statement or initiates any Proceedings for
that purpose; (vi) the Company receives notice of any suspension of the
qualification or exemption from qualification of any Registrable Securities for
sale in any jurisdiction, or the initiation or threat in writing of any
Proceeding for such purpose; or (vii) any Registration Statement or Prospectus
contains any untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
               (d) Use its reasonable Best Efforts to avoid the issuance of or,
if issued, obtain the withdrawal of (i) any order suspending the effectiveness
of any Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, as soon as possible.
               (e) If requested by an Investor, provide such Investor, without
charge, at least one conformed copy of each Registration Statement and each
amendment thereto, including financial statements and schedules, and all
exhibits to the extent requested by such Person (including those previously
furnished or incorporated by reference) promptly after the filing of such
documents with the SEC.
               (f) Promptly deliver to each Investor, without charge, as many
copies of the Prospectus or Prospectuses (including each form of prospectus) and
each amendment or supplement thereto as such Persons may reasonably request. The
Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Investors in connection with the
offering and sale of the Registrable Securities covered by such Prospectus and
any amendment or supplement thereto to the extent permitted by federal and state
securities laws and regulations.
               (g) (i) In the time and manner required by each Trading Market,
prepare and file with such Trading Market any applicable additional shares
listing application covering all of the Registrable Securities, (ii) take all
steps necessary to cause such Registrable Securities to be approved for listing
on each Trading Market as soon as possible thereafter, and (iii) except as a
result of the Excluded Events, during the Effectiveness Period, maintain the
listing of such Common Shares on each such Trading Market.
               (h) Prior to any public offering of Registrable Securities, use
its reasonable Best Efforts to register or qualify or cooperate with the selling
Investors in connection with the registration or qualification (or exemption
from such registration or qualification) of such Registrable Securities for
offer and sale under the securities or blue sky laws of such jurisdictions
within the United States as any Investor requests in writing, to keep each such
registration or qualification (or exemption therefrom) effective for so long as
required, but not to exceed the duration of the Effectiveness Period, and to do
any and all other acts or things reasonably necessary or advisable to enable the
disposition in such jurisdictions of the Registrable Securities covered by a
Registration Statement; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a

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foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject.
               (i) Cooperate with the Investors to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be delivered to a transferee pursuant to a Registration Statement, which
certificates shall be free, to the extent permitted by this Agreement and under
law, of all restrictive legends, and to enable such Registrable Securities to be
in such denominations and registered in such names as any such Investors may
reasonably request.
               (j) Upon the occurrence of any event described in
Section 6.2(c)(vii), subject to Section 6.1(e), as promptly as reasonably
possible, prepare a supplement or amendment, including a post-effective
amendment, to the Registration Statement or a supplement to the related
Prospectus or any document incorporated or deemed to be incorporated therein by
reference, and file any other required document so that, as thereafter
delivered, neither the Registration Statement nor such Prospectus will contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
               (k) Cooperate with any reasonable due diligence investigation
undertaken by the Investors in connection with the sale of Registrable
Securities, including, without limitation, by making available documents and
information; provided that the Company will not knowingly deliver or make
available to any Investor material, nonpublic information unless such Investor
requests in advance in writing to receive material, nonpublic information and
agrees to keep such information confidential.
               (l) Comply in all material respects with all rules and
regulations of the SEC applicable to the registration of the Registrable
Securities.
               (m) It shall be a condition precedent to the obligations of the
Company to complete the registration pursuant to this Agreement with respect to
the Registrable Securities of any particular Investor or to make any Event
Payments set forth in Section 6.1(d) to such Investor that such Investor furnish
to the Company the information specified in Exhibits B-1, B-2 and B-3 hereto and
such other information regarding itself, the Registrable Securities and other
shares of Common Stock held by it and the intended method of disposition of the
Registrable Securities held by it (if different from the Plan of Distribution
set forth on Exhibit C hereto) as shall be reasonably required to effect the
registration of such Registrable Securities, including, without limitation,
requested by the SEC in connection with any review of the Registration Statement
or otherwise, and shall complete and execute such documents in connection with
such registration as the Company may reasonably request.
          6.3 Registration Expenses. The Company shall pay all fees and expenses
of the Company incident to the performance of or compliance with Article VI of
this Agreement by the Company, including without limitation (a) all registration
and filing fees and expenses, including without

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limitation those related to filings with the SEC, any Trading Market and in
connection with applicable state securities or blue sky laws, (b) printing
expenses (including without limitation expenses of printing certificates for
Registrable Securities), (c) messenger, telephone and delivery expenses,
(d) fees and disbursements of counsel for the Company, (e) fees and expenses of
all other Persons retained by the Company in connection with the consummation of
the transactions contemplated by this Agreement, and (f) all listing fees to be
paid by the Company to the Trading Market. The Company shall also reimburse the
Agents for the fees and disbursements of their counsel in connection with
registration, filing or qualification of the Registration Statement and to make
the necessary filings with NASD Rule 2710 on behalf of the Placement Agents,
which amount shall be limited to $10,000; provided, however, that such amount
shall be limited to $5,000 if the SEC does not review the Registration
Statement. The Company will also pay all filing fees and reasonable legal fees
in connection with the Agents’ NASD Rule 2710 filing to be prepared by Agents’
counsel. The Company shall not be obligated to pay any fees of the Investors in
connection with the performance of or compliance with Article VI of this
Agreement, including any underwriting discounts or commissions or transfer
taxes.
          6.4 Indemnification
               (a) Indemnification by the Company. The Company shall,
notwithstanding any termination of this Agreement, indemnify and hold harmless
each Investor, the officers, directors, partners, members, agents and employees
of each of them, each Person who controls any such Investor (within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the
officers, directors, partners, members, agents and employees of each such
controlling Person, to the fullest extent permitted by applicable law, from and
against any and all Losses, as incurred, arising out of or relating to (i) any
misrepresentation by the Company of any representation or warranty made by the
Company in the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby, (ii) any breach by the Company of any
covenant, agreement or obligation of the Company contained in the Transaction
Documents or any other certificate, instrument or document contemplated hereby
or thereby, or (iii) any untrue or alleged untrue statement of a material fact
contained in the Registration Statement, any Prospectus or any form of Company
prospectus or in any amendment or supplement thereto or in any Company
preliminary prospectus, or arising out of or relating to any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in the light of the circumstances under which they were
made) not misleading, except to the extent, but only to the extent, that
(A) such untrue statements, alleged untrue statements, omissions or alleged
omissions are based solely upon information regarding such Investor furnished in
writing to the Company by such Investor for use therein, or to the extent that
such information relates to such Investor or such Investor’s proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
by such Investor expressly for use in the Registration Statement, or (B) with
respect to any prospectus, if the untrue statement or omission of material fact
contained in such prospectus was corrected on a timely basis in the prospectus,
as then amended or supplemented, or in any free writing prospectus if such
corrected prospectus or free writing prospectus was timely made available by the
Company to the Investor,

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and the Investor seeking indemnity hereunder was advised in writing not to use
the incorrect prospectus prior to the use giving rise to Losses.
               (b) Indemnification by Investors. Each Investor shall, severally
and not jointly, indemnify and hold harmless the Company, its directors,
officers, agents and employees, each Person who controls the Company (within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act),
and the directors, officers, agents or employees of such controlling Persons, to
the fullest extent permitted by applicable law, from and against all Losses
arising solely out of any untrue statement of a material fact contained in the
Registration Statement, any Prospectus, or any form of prospectus, or in any
amendment or supplement thereto, or arising out of or relating to any omission
of a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in the light of the circumstances under which they were
made) not misleading, but only to the extent that such untrue statement or
omission is contained in any information so furnished by such Investor in
writing to the Company specifically for inclusion in such Registration Statement
or such Prospectus or to the extent that such untrue statements or omissions are
based solely upon information regarding such Investor furnished to the Company
by such Investor in writing expressly for use therein, or to the extent that
such information relates to such Investor or such Investor’s proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
by such Investor expressly for use in the Registration Statement (it being
understood that the information provided by the Investor to the Company in
Exhibits B-1, B-2 and B-3 and the Plan of Distribution set forth on Exhibit C,
as the same may be modified by such Investor and other information provided by
the Investor to the Company in or pursuant to the Transaction Documents
constitutes information reviewed and expressly approved by such Investor in
writing expressly for use in the Registration Statement), such Prospectus or
such form of Prospectus or in any amendment or supplement thereto. In no event
shall the liability of any selling Investor hereunder be greater in amount than
the dollar amount of the net proceeds received by such Investor upon the sale of
the Registrable Securities giving rise to such indemnification obligation.
               (c) Conduct of Indemnification Proceedings. If any Proceeding
shall be brought or asserted against any Person entitled to indemnity hereunder
(an “Indemnified Party”), such Indemnified Party shall promptly notify the
Person from whom indemnity is sought (the “Indemnifying Party”) in writing, and
the Indemnifying Party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Indemnified Party and the
payment of all fees and expenses incurred in connection with defense thereof;
provided, that the failure of any Indemnified Party to give such notice shall
not relieve the Indemnifying Party of its obligations or liabilities pursuant to
this Agreement, except (and only) to the extent that it shall be finally
determined by a court of competent jurisdiction (which determination is not
subject to appeal or further review) that such failure shall have proximately
and materially adversely prejudiced the Indemnifying Party.
          An Indemnified Party shall have the right to employ separate counsel
in any such Proceeding and to participate in the defense thereof, but the fees
and expenses of such counsel shall be at the

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expense of such Indemnified Party or Parties unless: (i) the Indemnifying Party
has agreed in writing to pay such fees and expenses; or (ii) the Indemnifying
Party shall have failed promptly to assume the defense of such Proceeding and to
employ counsel reasonably satisfactory to such Indemnified Party in any such
Proceeding; or (iii) the named parties to any such Proceeding (including any
impleaded parties) include both such Indemnified Party and the Indemnifying
Party, and such Indemnified Party shall have been advised by counsel that a
conflict of interest is likely to exist if the same counsel were to represent
such Indemnified Party and the Indemnifying Party (in which case, if such
Indemnified Party notifies the Indemnifying Party in writing that it elects to
employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense thereof and
the reasonable fees and expenses of separate counsel shall be at the expense of
the Indemnifying Party). It being understood, however, that the Indemnifying
Party shall not, in connection with any one such Proceeding (including separate
Proceedings that have been or will be consolidated before a single judge) be
liable for the fees and expenses of more than one separate firm of attorneys at
any time for all Indemnified Parties, which firm shall be appointed by a
majority of the Indemnified Parties. The Indemnifying Party shall not be liable
for any settlement of any such Proceeding effected without its written consent,
which consent shall not be unreasonably withheld. No Indemnifying Party shall,
without the prior written consent of the Indemnified Party, effect any
settlement of any pending Proceeding in respect of which any Indemnified Party
is a party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability on claims that are the subject matter of
such Proceeding.
          All reasonable fees and expenses of the Indemnified Party (including
reasonable fees and expenses to the extent incurred in connection with
investigating or preparing to defend such Proceeding in a manner not
inconsistent with this Section) shall be paid to the Indemnified Party, as
incurred, within 20 Trading Days of written notice thereof to the Indemnifying
Party (regardless of whether it is ultimately determined that an Indemnified
Party is not entitled to indemnification hereunder; provided, that the
Indemnifying Party may require such Indemnified Party to undertake to reimburse
all such fees and expenses to the extent it is finally judicially determined
that such Indemnified Party is not entitled to indemnification hereunder).
               (d) Contribution. If a claim for indemnification under
Section 6.4(a) or (b) is unavailable to an Indemnified Party (by reason of
public policy or otherwise), then each Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such Losses, in such proportion
as is appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 6.4(c), any reasonable attorneys’ or
other reasonable

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fees or expenses incurred by such party in connection with any Proceeding to the
extent such party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was available to such party in
accordance with its terms.
          The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6.4(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 6.4(d), no Investor shall be
required to contribute, in the aggregate, any amount in excess of the amount by
which the net proceeds actually received by such Investor from the sale of the
Registrable Securities subject to the Proceeding exceeds the amount of any
damages that such Investor has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
          The indemnity and contribution agreements contained in this Section
are in addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.
          6.5 Dispositions. Each Investor agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it in
connection with sales of Registrable Securities pursuant to the Registration
Statement and shall sell its Registrable Securities in accordance with the Plan
of Distribution set forth in the Prospectus. Each Investor further agrees that,
upon receipt of a notice from the Company of the occurrence of any event of the
kind described in Sections 6.2(c)(v), (vi) or (vii), such Investor will
discontinue disposition of such Registrable Securities under the Registration
Statement until such Investor is advised in writing by the Company that the use
of the Prospectus, or amended Prospectus, as applicable, may be used. The
Company may provide appropriate stop orders to enforce the provisions of this
paragraph.
          6.6 No Piggyback on Registrations. The Company may not include any of
its securities (whether for its own account or the account of any of its
security holders (other than the Investors in such capacity pursuant hereto)) in
the Registration Statement other than the Registrable Securities.
          6.7 Piggy-Back Registrations. If at any time during the Effectiveness
Period there is not an effective Registration Statement covering all of the
Registrable Securities and the Company shall determine to prepare and file with
the SEC a registration statement relating to an offering for its own account or
the account of others under the Securities Act of any of its equity securities,
other than on Form S-4 or Form S-8 (each as promulgated under the Securities
Act) or their then equivalents relating to equity securities to be issued solely
in connection with any acquisition of any entity or business or equity
securities issuable in connection with stock option or other employee benefit
plans, then the Company shall send to each Investor not then eligible to sell
all of their Registrable Securities under Rule 144 in a three-month period,
written notice of such determination and if, within ten days after receipt of
such notice, any such Investor shall so request in writing, the Company shall
include in such registration statement all or any part of such Registrable
Securities such Investor requests to be registered. Notwithstanding the
foregoing, in the event that, in connection with any underwritten public
offering, the managing

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underwriter(s) thereof shall impose a limitation on the number of shares of
Common Stock which may be included in the Registration Statement because, in
such underwriter(s)’ judgment, marketing or other factors dictate such
limitation is necessary to facilitate public distribution, then the Company
shall be obligated to include in such Registration Statement only such limited
portion of the Registrable Securities with respect to which such Investor has
requested inclusion hereunder as the underwriter shall permit; provided,
however, that (i) the Company shall not exclude any Registrable Securities
unless the Company has first excluded all outstanding securities, the holders of
which are not contractually entitled to inclusion of such securities in such
Registration Statement or are not contractually entitled to pro rata inclusion
with the Registrable Securities and (ii) after giving effect to the immediately
preceding proviso, any such exclusion of Registrable Securities shall be made
pro rata among the Investors seeking to include Registrable Securities and
officers, directors and the holders of other securities having the contractual
right to inclusion of their securities in such Registration Statement by reason
of demand or piggy-back registration rights, in proportion to the number of
Registrable Securities or other securities, as applicable, sought to be included
by each such Investor or other holder; and provided further that, to the extent
Cut Back Securities (as defined in Section 6.8 hereof) exist, (i) the Company
shall not exclude any Registrable Securities unless the Company has first
excluded all outstanding securities held by officers, directors and all other
holders of securities of the Company (other than Registrable Securities and
other than securities held by holders who by contractual right demanded such
registration (“Demanding Holders”)) and (ii) after giving effect to the
immediately preceding proviso, any such exclusion of Registrable Securities
shall be made pro rata among the Investors seeking to include Registrable
Securities and the Demanding Holders, in proportion to the number of Registrable
Securities or other securities, as applicable, sought to be included by each
such Investor or other holder. If an offering in connection with which an
Investor is entitled to registration under this Section 6.7 is an underwritten
offering, then each Investor whose Registrable Securities are included in such
Registration Statement shall, unless otherwise agreed by the Company, offer and
sell such Registrable Securities in an underwritten offering using the same
underwriter or underwriters and, subject to the provisions of this Agreement, on
the same terms and conditions as other shares of Common Stock included in such
underwritten offering and shall enter into an underwriting agreement in a form
and substance reasonably satisfactory to the Company and the underwriter or
underwriters. Upon the effectiveness of the registration statement for which
piggy-back registration has been provided in this Section 6.7, any Event
Payments payable to an Investor whose Securities are included in such
registration statement shall terminate with respect to the Registrable
Securities included in such registration statement.
          6.8 Reduction of Registrable Securities Included in a Registration
Statement. Notwithstanding anything contained herein, in the event that the SEC
requires the Company to reduce the number of Registrable Securities to be
included in a Registration Statement in order to allow the Company to rely on
Rule 415 with respect to a Registration Statement, then the Company shall be
obligated to include in such Registration Statement (which may be a subsequent
Registration Statement if the Company needs to withdraw the initial Registration
Statement and refile a new Registration Statement in order to rely on Rule 415)
only such limited portion of the Registrable Securities as the SEC shall permit.
Any exclusion of Registrable

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Securities shall be made pro rata among the Investors in proportion to the
number of Registrable Securities held such persons; provided, however, that 100%
of the Registrable Securities held by the Bridge Noteholders shall be excluded
prior to the exclusion of any Registrable Securities held by the remaining
Investors, and 100% of the Registrable Securities held by the Agents shall be
excluded prior to the exclusion of any Registrable Securities held by the
remaining Investors. Thereafter, the order of Registrable Securities to be
excluded shall be the Warrant Shares (which may be some or all of such
securities) and lastly, the Common Shares (in such limited number until Rule 415
can be utilized). Any Registrable Securities that are excluded in accordance
with the foregoing terms are hereinafter referred to as “Cut Back Securities.”
To the extent Cut Back Securities exist, as soon as may be permitted by the SEC,
the Company shall be required to file a registration statement on Form S-3 (or,
if Form S-3 is not then available to the Company, on Form S-1 or such other form
of registration statement as is then available to effect a registration for
resale of the Cut Back Securities) covering the resale of the Cut Back
Securities and shall use Best Efforts to cause such Registration Statement to be
declared effective as promptly as practicable thereafter; provided, however,
that the foregoing obligation shall cease with respect to any Cut Back
Securities at such time such Cut Back Securities are eligible for sale
immediately and without restriction pursuant to Rule 144(k) under the Securities
Act.
          6.9 Other Registrations. Prior to and for a period of six months
following the Effective Date of the Registration Statement (or, in the event
that the Company is required to file any additional Registration Statements
pursuant to Section 6.8, prior to and for a period ending on the later of
(a) the one-year anniversary of the First Closing and (b) the six-month
anniversary of the effective date of the first Registration Statement covering
Registrable Securities that is declared effective by the SEC), the Company shall
not prepare and file with the SEC a registration statement relating to an
offering for its own account or the account of others (other than Investors)
under the Securities Act of any of its equity securities, other than any
registration statement or post-effective amendment to a registration statement
(or supplement thereto) on Form S-4 or relating to shares of Common Stock
issuable in connection with the Company’s employee benefit plans on Form S-8.
The Company will not, on or after the date of this Agreement, enter into any
agreement with respect to its securities that conflicts with the rights granted
to the holders of the Registrable Securities in this Agreement. The rights
granted to the holders of the Registrable Securities hereunder do not in any way
conflict with and are not inconsistent with the rights granted to the holders of
the Company’s securities under any agreement in effect on the date hereof,
except to the extent that such rights have been otherwise waived.
ARTICLE VII
MISCELLANEOUS
          7.1 Termination. This Agreement may be terminated by the Company,
Athersys or any Investor, by written notice to the other parties, if the Closing
has not been consummated by the third Business Day following the date of this
Agreement; provided that no such termination will affect the right of any party
to sue for any breach by the other party (or parties).

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          7.2 Fees and Expenses. Except as expressly set forth in the
Transaction Documents or the Private Placement Memorandum to the contrary, each
party shall pay the fees and expenses of its advisers, counsel, accountants and
other experts, if any, and all other expenses incurred by such party incident to
the negotiation, preparation, execution, delivery and performance of this
Agreement. The Company shall pay all transfer agent fees, stamp taxes and other
taxes and duties levied in connection with the sale and issuance of the
Securities by the Company.
          7.3 Entire Agreement. The Transaction Documents, together with the
Exhibits and Schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules. At or
after the Closing, and without further consideration, the Company will execute
and deliver to the Investors such further documents as may be reasonably
requested in order to give practical effect to the intention of the parties
under the Transaction Documents.
          7.4 Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile or email at the
facsimile number or email address specified in this Section prior to 6:30 p.m.
(New York City time) on a Trading Day, (b) the next Trading Day after the date
of transmission, if such notice or communication is delivered via facsimile or
email at the facsimile number or email address specified in this Section on a
day that is not a Trading Day or later than 6:30 p.m. (New York City time) on
any Trading Day, (c) the Trading Day following the date of deposit with a
nationally recognized overnight courier service, or (d) upon actual receipt by
the party to whom such notice is required to be given. The addresses, facsimile
numbers and email addresses for such notices and communications are those set
forth on the signature pages hereof, or such other address or facsimile number
as may be designated in writing hereafter, in the same manner, by any such
Person.
          7.5 Amendments; Waivers. No provision of this Agreement may be waived
or amended except in a written instrument signed, in the case of an amendment,
by the Company, Athersys and each of the Investors or, in the case of a waiver,
by the party against whom enforcement of any such waiver is sought. No waiver of
any default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any subsequent default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of either party to exercise
any right hereunder in any manner impair the exercise of any such right.
Notwithstanding the foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates exclusively to the rights of
Investors under Article VI may be given by Investors holding at least a majority
of the Registrable Securities to which such waiver or consent relates.
          7.6 Construction. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.

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          7.7 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Investors. Any Investor may assign its
rights under this Agreement to any Person to whom such Investor assigns or
transfers any Securities, provided (i) such transferor agrees in writing with
the transferee or assignee to assign such rights, and a copy of such agreement
is furnished to the Company after such assignment, (ii) the Company is furnished
with written notice of (x) the name and address of such transferee or assignee
and (y) the Registrable Securities with respect to which such registration
rights are being transferred or assigned, (iii) following such transfer or
assignment, the further disposition of such securities by the transferee or
assignee is restricted under the Securities Act and applicable state securities
laws, (iv) such transferee agrees in writing to be bound, with respect to the
transferred Securities, by the provisions hereof that apply to the “Investors”
and (v) such transfer shall have been made in accordance with the applicable
requirements of this Agreement and with all laws applicable thereto.
          7.8 No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except that each Indemnified Party is an intended third
party beneficiary of Section 6.4 and (in each case) may enforce the provisions
of such Sections directly against the parties with obligations thereunder and
the Placement Agents are intended third party beneficiaries of the
representations and warranties made by (x) the Company in Section 3.1 and
(y) the Investors in Section 3.2 and 3.3 and the covenants of the Company set
forth in Article IV and Article VI.
          7.9 Governing Law; Venue; Waiver of Jury Trial. THE CORPORATE LAWS OF
THE STATE OF DELAWARE SHALL GOVERN ALL ISSUES CONCERNING THE RELATIVE RIGHTS OF
THE COMPANY AND ITS STOCKHOLDERS. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THE COMPANY
AND INVESTORS HEREBY IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE
STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN
FOR THE ADJUDICATION OF ANY DISPUTE BROUGHT BY THE COMPANY OR ANY INVESTOR
HEREUNDER, IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR
DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE
TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY WAIVE, AND AGREE NOT TO ASSERT IN
ANY SUIT, ACTION OR PROCEEDING BROUGHT BY THE COMPANY OR ANY INVESTOR, ANY CLAIM
THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, OR THAT
SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY HEREBY IRREVOCABLY
WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY
SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR
CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY
AT THE ADDRESS IN EFFECT FOR

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NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE
GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED
HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY
MANNER PERMITTED BY LAW. THE COMPANY AND INVESTORS HEREBY WAIVE ALL RIGHTS TO A
TRIAL BY JURY.
          7.10 Survival. The representations, warranties, agreements and
covenants contained herein shall survive the Closing.
          7.11 Execution. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission or email attachment, such signature shall
create a valid and binding obligation of the party executing (or on whose behalf
such signature is executed) with the same force and effect as if such facsimile
or email-attached signature page were an original thereof.
          7.12 Severability. If any provision of this Agreement is held to be
invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.
          7.13 Rescission and Withdrawal Right. Notwithstanding anything to the
contrary contained in (and without limiting any similar provisions of) the
Transaction Documents, whenever any Investor exercises a right, election, demand
or option owed to such Investor by the Company under a Transaction Document and
the Company does not timely perform its related obligations within the periods
therein provided, then, prior to the performance by the Company of the Company’s
related obligation, such Investor may rescind or withdraw, in its sole
discretion from time to time upon written notice to the Company, any relevant
notice, demand or election in whole or in part without prejudice to its future
actions and rights.
          7.14 Replacement of Securities. If any certificate or instrument
evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon
cancellation thereof, or in lieu of and substitution therefor, a new certificate
or instrument, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and the execution by the holder
thereof of a customary lost certificate affidavit of that fact and an agreement
to indemnify and hold harmless the Company for any losses in connection
therewith. The applicants for a new certificate or instrument under such
circumstances shall also pay any reasonable third-party costs associated with
the issuance of such replacement Securities.
          7.15 Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Investors and the Company will be entitled to seek specific performance under
the Transaction Documents. The parties agree that

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monetary damages may not be adequate compensation for any loss incurred by
reason of any breach of obligations described in the foregoing sentence.
          7.16 Payment Set Aside. To the extent that the Company makes a payment
or payments to any Investor hereunder or any Investor enforces or exercises its
rights hereunder or thereunder, and such payment or payments or the proceeds of
such enforcement or exercise or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, recovered from, disgorged
by or are required to be refunded, repaid or otherwise restored to the Company
by a trustee, receiver or any other person under any law (including, without
limitation, any bankruptcy law, state or federal law, common law or equitable
cause of action), then to the extent of any such restoration the obligation or
part thereof originally intended to be satisfied shall be revived and continued
in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.
          7.17 Adjustments in Share Numbers and Prices. In the event of any
stock split, subdivision, dividend or distribution payable in shares of Common
Stock (or other securities or rights convertible into, or entitling the holder
thereof to receive directly or indirectly shares of Common Stock), combination
or other similar recapitalization or event occurring after the date hereof and
prior to the Closing, each reference in any Transaction Document to a number of
shares or a price per share shall be amended to appropriately account for such
event.
          7.18 Independent Nature of Investors’ Obligations and Rights. The
obligations of each Investor under any Transaction Document are several and not
joint with the obligations of any other Investor, and no Investor shall be
responsible in any way for the performance of the obligations of any other
Investor under any Transaction Document. The decision of each Investor to
purchase Securities pursuant to this Agreement has been made by such Investor
independently of any other Investor and independently of any information,
materials, statements or opinions as to the business, affairs, operations,
assets, properties, liabilities, results of operations, condition (financial or
otherwise) or prospects of the Company which may have been made or given by any
other Investor or by any agent or employee of any other Investor, and no
Investor or any of its agents or employees shall have any liability to any other
Investor (or any other person) relating to or arising from any such information,
materials, statements or opinions. Nothing contained herein or in any
Transaction Document, and no action taken by any Investor pursuant thereto,
shall be deemed to constitute the Investors as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Investors are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Document. Each
Investor acknowledges that no other Investor has acted as agent for such
Investor in connection with making its investment hereunder and that no other
Investor will be acting as agent of such Investor in connection with monitoring
its investment hereunder. Each Investor shall be entitled to independently
protect and enforce its rights, including without limitation the rights arising
out of this Agreement or out of the other Transaction Documents, and it shall
not be necessary for any other Investor to be joined as an additional party in
any proceeding for such purpose.
[SIGNATURE PAGES TO FOLLOW]

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COMPANY SIGNATURE PAGE
          IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.

            BTHC VI, INC.
      By:   /s/ Gil Van Bokkelen         Name:   Gil Van Bokkelen       
Title:   Chief Executive Officer        ATHERSYS, INC.
      By:   /s/ Gil Van Bokkelen         Name:   Gil Van Bokkelen       
Title:   Chief Executive Officer        Address for Notice:
3201 Carnegie Avenue
Cleveland, Ohio 44115-2634
Facsimile No.: (216) 432-2461
Telephone No.: (216) 431-9900
Attn: Laura K. Campbell

With a copy to:
Jones Day
901 Lakeside Avenue
Cleveland, Ohio 44114
Facsimile: (216) 579-0212
Telephone: (216) 586-3939
Attn: Christopher M. Kelly, Esq.
                       

 

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INVESTOR SIGNATURE PAGE
     By its execution and delivery of this signature page, the undersigned
Investor hereby joins in and agrees to be bound by the terms and conditions of
the Securities Purchase Agreement dated as of June 8, 2007 (the “Purchase
Agreement”) by and among BTHC VI, Inc., Athersys and the Investors (as defined
therein), as to the number of shares of Common Stock and Warrants set forth
below, and authorizes this signature page to be attached to the Purchase
Agreement or counterparts thereof.

                  Name of Investor:    
 
               
 
   
 
           
 
  By:        
 
     
 
Name:    
 
      Title:    

Address:                                                        
                
                                                                        
                
                                                                        
                

Telephone No.:                                                              
Facsimile No.:                                                                 
Email Address:                                                               
Number of Shares:                                                         
Number of Warrants:                                                    
Aggregate Purchase Price: $                                       

-2-

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Exhibits:

     
A-1
  Schedule of Investors for First Closing
A-2
  Schedule of Investors for Second Closing
B
  Instruction Sheet for Investors
B-1
  Stock Certificate Questionnaire
B-2
  Registration Statement Questionnaire
B-3
  Certificate for Individual Investors
B-4
  Certificate for Corporate, Partnership, Limited Liability Company, Trust,
Foundation and Joint Investors
C
  Plan of Distribution
D
  Company Transfer Agent Instructions
E
  Form of Warrant

-3-

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Exhibit A-1
Schedule of Investors

                          Investor   Common Shares   Warrant Shares   Purchase
Price
Roger J. & M. Jenai Sullivan Wall
    10,000       2,500     $ 50,000  
Adam Tymrakiewicz
    10,000       2,500     $ 50,000  
Robert A. Koch
    20,000       5,000     $ 100,000  
Antonius Dekonink
    5,000       1,250     $ 25,000  
Richard & Jeffrey K. Ward
    5,000       1,250     $ 25,000  
Goldberg & Associates
    20,000       5,000     $ 100,000  
LBJ 8001 LP
    40,000       10,000     $ 200,000  
Jennifer R. Hohneke & West Thomas Houle
    15,000       3,750     $ 75,000  
R & F Industries Inc.
    10,000       2,500     $ 50,000  
Cyber Calling Inc.
    5,000       1,250     $ 25,000  
Paradise Wire & Cable
Defined Benefit Pension
Plan
    5,000       1,250     $ 25,000  
J. Russell LaBarge Jr. Revocable Trust
    5,000       1,250     $ 25,000  
William Ristvedt
    5,000       1,250     $ 25,000  
V. Gopikrishna Reddy
    5,000       1,250     $ 25,000  
Dilmus R. Richey
    5,000       1,250     $ 25,000  
Gary W. Sargent
    20,000       5,000     $ 100,000  
Joseph G. Ruppert
    10,000       2,500     $ 50,000  

 

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                          Investor   Common Shares   Warrant Shares   Purchase
Price
John P. & Kathleen J. Gangl
    10,000       2,500     $ 50,000  
Richard & Kathleen Basch
    10,000       2,500     $ 50,000  
Neil H. & Karen J. Rolstad
    5,000       1,250     $ 25,000  
Paul Yurfest
    20,000       5,000     $ 100,000  
Peter Ohler
    5,000       1,250     $ 25,000  
Jim Swift
    5,000       1,250     $ 25,000  
Thomas Richard Bollinger
    5,000       1,250     $ 25,000  
Craig R. Whited
    70,000       17,500     $ 350,000  
Garry Ard
    20,000       5,000     $ 100,000  
John Gregory VanSchaack
    10,000       2,500     $ 50,000  
William F. Herbes
    10,000       2,500     $ 50,000  
Louis Joseph & Carolyn
Hope Knauff
    15,000       3,750     $ 75,000  
Jeff Pengra & Allen
Ofstehage
    10,000       2,500     $ 50,000  
Lloyd & Deborah Schill
    10,000       2,500     $ 50,000  
John Anthony DeRungs
    20,000       5,000     $ 100,000  
Eldon Marier
    10,000       2,500     $ 50,000  
Khuan K. Phu
    5,000       1,250     $ 25,000  
Bill Feniger
    10,000       2,500     $ 50,000  
Steve Huffman
    20,000       5,000     $ 100,000  
Manzoor Hasan
    30,000       7,500     $ 150,000  

-2-

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                          Investor   Common Shares   Warrant Shares   Purchase
Price
Bobby Sweeney
    10,000       2,500     $ 50,000  
West & Laurie Houle
    200,000       50,000     $ 1,000,000  
Yadon Arad Sep IRA
    10,000       2,500     $ 50,000  
Mike Kooyman
    30,000       7,500     $ 150,000  
Stevan Birnbaum Trust
    9,600       2,400     $ 48,000  
Charles Lowden
    10,000       2,500     $ 50,000  
Arthur G. Caputo
    40,000       10,000     $ 200,000  
Wayne & Chen Lin
    5,000       1,250     $ 25,000  
John Cotter
    10,000       2,500     $ 50,000  
W.P. Malone Inc.
    5,000       1,250     $ 25,000  
Alan M. Johnson III & Marta I. Johnson
    5,000       1,250     $ 25,000  
Henry Schwarzbach
    5,000       1,250     $ 25,000  
Brian E. Rabune
    10,000       2,500     $ 50,000  
Adel Sheshtawy
    10,000       2,500     $ 50,000  
Mayank C. Patel
    6,000       1,500     $ 30,000  
Steven & Rita Yaroch
    5,000       1,250     $ 25,000  
Joseph C. & Loretta A. Pillari
    10,000       2,500     $ 50,000  
Stephen Weiss
    5,000       1,250     $ 25,000  
Leonard DeOliveira
    20,000       5,000     $ 100,000  
Ira & Paula Spodek
    10,000       2,500     $ 50,000  
Joel Hirsh
    5,000       1,250     $ 25,000  

-3-

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                          Investor   Common Shares   Warrant Shares   Purchase
Price
Mark Wiley
    5,000       1,250     $ 25,000  
Rocco Fuschetto
    10,000       2,500     $ 50,000  
Paul Duncan
    20,000       5,000     $ 100,000  
Charles P. Nicholson
    5,000       1,250     $ 25,000  
Clay Gibson
    5,000       1,250     $ 25,000  
Tom & Molly Hicks
    10,000       2,500     $ 50,000  
Ahmed Mohamed
    5,000       1,250     $ 25,000  
James H. & Carole A. Deney
    5,000       1,250     $ 25,000  
Robert Deane
    5,000       1,250     $ 25,000  
Graham A. Wilshier
    5,000       1,250     $ 25,000  
Mark A. Koerner
    10,000       2,500     $ 50,000  
Dennis Weichert
    5,000       1,250     $ 25,000  
William N. Strawbridge
    8,000       2,000     $ 40,000  
Steven J. & Sherri L. Glock
    10,000       2,500     $ 50,000  
Anthony W. McCarthy
    20,000       5,000     $ 100,000  
Kathleen Egan-Jerone
    5,000       1,250     $ 25,000  
Robert Jerone
    5,000       1,250     $ 25,000  
Joseph A. ManFredo
    10,000       2,500     $ 50,000  
Maurice & Karen
DeVerteuil
    10,000       2,500     $ 50,000  
Mark Peeples
    20,000       5,000     $ 100,000  

-4-

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                          Investor   Common Shares   Warrant Shares   Purchase
Price
David Coates
    15,000       3,750     $ 75,000  
Kathleen Ammann
    20,000       5,000     $ 100,000  
Matthew Caldwell Nicholls
    8,000       2,000     $ 40,000  
Joseph Q. Gibson
    5,000       1,250     $ 25,000  
Al Steffes
    200,000       50,000     $ 1,000,000  
Gary Gengenbach
    8,000       2,000     $ 40,000  
Sowmini Sriram
    5,000       1,250     $ 25,000  
James Hess Inc. ESOP
    5,000       1,250     $ 25,000  
Tees & Novelties Inc.
    5,000       1,250     $ 25,000  
Fergus Burke
    10,000       2,500     $ 50,000  
Gerald Singer
    10,000       2,500     $ 50,000  
NG Company
    9,000       2,250     $ 45,000  
Abraham Garfinkel
    5,000       1,250     $ 25,000  
Alan Kushner
    5,000       1,250     $ 25,000  
Elco Securities Ltd.
    5,000       1,250     $ 25,000  
Frederick Stanley
Shenstone
    5,000       1,250     $ 25,000  
Sio Partners, LP
    40,000       10,000     $ 200,000  
John W. & Linda C. Irvine
    5,000       1,250     $ 25,000  
Richard C. Ernest
    6,000       1,500     $ 30,000  
Thomas P. Darmstadter
    10,000       2,500     $ 50,000  

-5-

--------------------------------------------------------------------------------

 

                          Investor   Common Shares   Warrant Shares   Purchase
Price
ATA Rahman
    5,000       1,250     $ 25,000  
William Baisley
    5,000       1,250     $ 25,000  
Joseph Sensi Jr.
    10,000       2,500     $ 50,000  
Nayer Imam
    8,000       2,000     $ 40,000  
David T. Gallagher
    10,000       2,500     $ 50,000  
Gary B. Kabat
    5,000       1,250     $ 25,000  
David E. Anglemeyer
    5,000       1,250     $ 25,000  
Richard Carver
    8,000       2,000     $ 40,000  
Bartholomew Murphy
    10,000       2,500     $ 50,000  
Richard H. Kantor
    10,000       2,500     $ 50,000  
James T. & Linda J. Bego
    10,000       2,500     $ 50,000  
Theodore R. Reviglio
    10,000       2,500     $ 50,000  
John Boulton
    5,000       1,250     $ 25,000  
Marc Kadish
    5,000       1,250     $ 25,000  
Chester P. Sadowski IRA
    8,000       2,000     $ 40,000  
Tom Coehlo
    10,000       2,500     $ 50,000  
William Carroll Campbell
    5,000       1,250     $ 25,000  
Casey C. Christofferson
    5,000       1,250     $ 25,000  
Timothy J. Smidt
    10,000       2,500     $ 50,000  
Mark & Judith Bowers
    5,000       1,250     $ 25,000  
Daniel I. & Sally E. Waki
    10,000       2,500     $ 50,000  
Noah Drezner
    5,000       1,250     $ 25,000  

-6-

--------------------------------------------------------------------------------

 

                          Investor   Common Shares   Warrant Shares   Purchase
Price
Mark J. Ehlert
    10,000       2,500     $ 50,000  
Magnus Coxner
    10,000       2,500     $ 50,000  
David W. Drezner
    5,000       1,250     $ 25,000  
Bernie & Rita’s Limited Partnership
    5,000       1,250     $ 25,000  
Nelson Penarreta &
Patricia Davila
    5,000       1,250     $ 25,000  
David Shively
    7,400       1,850     $ 37,000  
Higginbotham Family Trust
    5,000       1,250     $ 25,000  
Michael Moeller
    5,000       1,250     $ 25,000  
Caduceus Private Investment III, L.P.
    2,971,698       742,925     $ 14,858,490  
OrbiMed Associates III, L.P.
    28,302       7,075     $ 141,510  
RA Capital Biotech Fund, L.P.
    1,178,880       294,720     $ 5,894,400  
RA Capital Biotech Fund II, L.P.
    21,120       5,280     $ 105,600  
Accipiter Life Sciences Fund, L.P.
    318,500       79,625     $ 1,592,500  
Accipiter Life Sciences Fund (Offshore), L.P.
    319,950       79,988     $ 1,599,750  
Accipiter Life Sciences Fund II (Offshore), L.P.
    271,450       67,863     $ 1,357,250  
Accipiter Life Sciences Fund II, L.P.
    132,350       33,087     $ 661,750  

-7-

--------------------------------------------------------------------------------

 

                          Investor   Common Shares   Warrant Shares   Purchase
Price
Accipiter Life Sciences Fund II (QP), L.P.
    157,750       39,437     $ 788,750  
H&Q Healthcare Investors
    472,000       118,000     $ 2,360,000  
H&Q Life Science Investors
    328,000       82,000     $ 1,640,000  
Highbridge International
LLC
    400,000       100,000     $ 2,000,000  
MPM Bioequities
Investors Fund, LLC
    5,100       1,275     $ 25,500  
MPM Bioequities Master Fund, L.P.
    394,900       98,725     $ 1,974,500  
SF Capital Partners, Ltd.
    400,000       100,000     $ 2,000,000  
Capital Ventures
International
    400,000       100,000     $ 2,000,000  
A.M. Pappas Life Science Ventures III, L.P.
    338,928       84,732     $ 1,694,640  
PV III CEO Fund, L.P.
    21,072       5,268     $ 105,360  
Passport Global Master Fund SPC, Ltd.
    160,000       40,000     $ 800,000  
Wexford Spectrum
Investors, LLC
    165,000       41,250     $ 825,000  
Cornell Capital Partners, L.P.
    160,000       40,000     $ 800,000  
Crystal Cascades, L.P.
    80,000       20,000     $ 400,000  
Cranshire Capital, L.P.
    79,000       19,750     $ 395,000  

-8-

--------------------------------------------------------------------------------

 

                          Investor   Common Shares   Warrant Shares   Purchase
Price
HSMR Capital Partners (QP), L.P.
    71,000       17,750     $ 355,000  
Camber Capital Fund, L.P.
    37,000       9,250     $ 185,000  
Bristol Investment Fund, Ltd.
    40,000       10,000     $ 200,000  
Chestnut Ridge Partners, L.P.
    38,000       9,500     $ 190,000  
RHP Master Fund, Ltd.
    35,000       8,750     $ 175,000  
Radius Venture Partners II, L.P.
    800,000       400,000*     $ 4,000,000  
Radius Venture Partners III, L.P.
    103,766       51,883*     $ 518,830  
Radius Venture Partners III QP, L.P.
    696,234       348,117*     $ 3,481,170  
Dilip J. Mehta
    10,000       5,000*     $ 50,000  
George M. Milne, Jr.
    10,000       5,000*     $ 50,000  
Sigma Capital Corp.
    400,000       167,500**     $ 2,000,000  
Biakum Trading, Inc
    10,000       5,000*     $ 50,000  
Silver Investments Holdings Corp.
    151,000       62,750***     $ 755,000  
Kevin O’Connell
    20,000       5,000     $ 100,000  
Meythaler Investment
Partners LC
    20,000       5,000     $ 100,000  

-9-

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                          Investor   Common Shares   Warrant Shares   Purchase
Price
Frantz Medical Ventures Fund I, L.P.
    20,000       5,000     $ 100,000  
Barry and Lisa Bergman, JTWROS
    20,000       5,000     $ 100,000  
Philip Halpern
    8,000       2,000     $ 40,000  
William O. Lehmann, Jr.
    5,000       1,250     $ 25,000  
FIRST CLOSING TOTAL
    12,990,000       3,747,500     $ 64,950,000  

 

*   50% of these warrants are in the modified form for lead investors (“Lead
Investor Warrants”), which includes a cashless exercise provision, as described
in the Private Placement Memorandum   **   67,500 of these warrants are Lead
Investor Warrants   ***   25,000 of these warrants are Lead Investor Warrants

-10-

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Exhibit A-2
Schedule of Investors
Second Closing

                          Investor   Common Shares   Warrant Shares   Purchase
Price Christian Tonsberg     10,000       2,500     $ 50,000  

 

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Exhibit B
INSTRUCTION SHEET FOR INVESTORS
(to be read in conjunction with the entire Securities Purchase Agreement)

A.   Complete the following items in the Securities Purchase Agreement:

  1.   Complete and execute the Investor Signature Page. The Agreement must be
executed by an individual authorized to bind the Investor.     2.   Exhibit B-1
— Stock Certificate Questionnaire:

    Provide the information requested by the Stock Certificate Questionnaire;

  3.   Exhibit B-2 — Registration Statement Questionnaire:

    Provide the information requested by the Registration Statement
Questionnaire.

  4.   Exhibit B-3/B-4 — Investor Certificate:

    Provide the information requested by the Certificate for Individual
Investors (B-3) or the Certificate for Corporate, Partnership, Trust, Foundation
and Joint Investors (B-4), as applicable.

  5.   Return, via facsimile, the signed Securities Purchase Agreement including
the properly completed Exhibits B-1 through B-4, to either:

Cowen and Company, LLC
Attn: Gregg Smith
Facsimile: (646) 562-1269
-or-
National Securities Corporation
Attn: Matt Portes
Facsimile: (312) 751-0769

  6.   After completing instruction number five (5) above, deliver the original
signed Securities Purchase Agreement including the properly completed Exhibits
B-1 through B-4 to either:

 

--------------------------------------------------------------------------------

 

COWEN AND COMPANY, LLC
1221 Avenue of the Americas
New York, NY 10020
Phone: (646) 562-1000
Fax: (646) 562-1269
Attn: Gregg Smith
Or
NATIONAL SECURITIES CORPORATION
875 N. Michigan Ave., Suite 1560
Chicago, IL 60611
Phone: (312) 867-3447
Fax: (312) 751-0769
Attn: Matt Portes

B.   Instructions regarding the wire transfer of funds for the purchase of Units
are as follows:

Signature Bank as Escrow Agent for Athersys Inc.
ABA Number: 026013576
Acct Number: 1500892524

-2-

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Exhibit B-1
STOCK CERTIFICATE QUESTIONNAIRE

         
 
  Please provide us with the following information:    
 
       
1.
  The exact name that the Securities are to be registered in (this is the name
that will appear on the stock certificate(s)). You may use a nominee name if
appropriate:  
                                                            
 
       
2.
  The relationship between the Investor of the Securities and the Registered
Holder listed in response to item 1 above:  
                                                            
 
       
3.
  The mailing address, telephone and telecopy number and email address of the
Registered Holder listed in response to item 1 above:  
                                                            
 
       
 
                                                                  
 
       
 
                                                                  
 
       
 
                                                                  
 
       
 
                                                                  
 
       
4.
  The Tax Identification Number of the Registered Holder listed in response to
item 1 above:                                                               

 

--------------------------------------------------------------------------------

 

Exhibit B-2
REGISTRATION STATEMENT QUESTIONNAIRE
     In connection with the Registration Statement, please provide us with the
following information regarding the Investor.
1. Please state your or your organization’s name exactly as it should appear in
the Registration Statement:

   
                                                                                
                                                                                

    Except as set forth below, you or your organization does not hold any equity
securities of the Company on behalf of another person or entity.       State any
exceptions here:

   
                                                                                
                                                                                

2. Your address or the address of your organization:
                                                                                                                                            
                                                                                                                                            
Telephone:                                                             
Fax:
                                                                                
Contact Person:                                                             
3. If your organization is not, and is not a wholly-owned subsidiary of an
entity that is, required to file periodic and other reports with the SEC
pursuant to Section 13(a) or Section 15(d) of the Exchange Act, identify any
natural person(s) who exercise voting and investment power over any equity
securities of the Company:
                                                                                                                                            
                                                                                                                                            
4. Have you or your organization had any position, office or other material
relationship within the past three years with the Company or its affiliates?
(Include any relationships involving you or your affiliates, officers,
directors, or principal equity holders (5% or more) that has held any position
or office or has had any other material relationship with the Company (or its
predecessors or affiliates) during the past three years.)

 

--------------------------------------------------------------------------------

 

     o      Yes                     o      No
     If yes, please indicate the nature of any such relationship below:
5. Are you the beneficial owner of any other securities of the Company? (Include
any equity securities that you beneficially own or have a right to acquire
within 60 days after the date hereof, and as to which you have sole voting
power, shared voting power, sole investment power or shared investment power.)
     o      Yes                     o      No
     If yes, please describe the nature and amount of such ownership as of a
recent date.
6. Please provide details regarding the beneficial ownership of any equity
securities of the Company:
                                                                                                                                            
                                                                                                                                            
7. Have you made or are you aware of any arrangements relating to the
distribution of the shares of the Company pursuant to the Registration
Statement?
     o      Yes                     o      No
     If yes, please describe the nature and amount of such arrangements.

-2-

--------------------------------------------------------------------------------

 

8. NASD Matters
     (a) State below whether (i) you or any associate or affiliate of yours are
a member of the NASD, a controlling shareholder of an NASD member, a person
associated with a member, a direct or indirect affiliate of a member, or an
underwriter or related person with respect to the proposed offering; (ii) you or
any associate or affiliate of yours owns any stock or other securities of any
NASD member not purchased in the open market; or (iii) you or any associate or
affiliate of yours has made any outstanding subordinated loans to any NASD
member. If you are a general or limited partnership, a no answer asserts that no
such relationship exists for you as well as for each of your general or limited
partners.
Yes:                                No:
o                                   o

    If “yes,” please identify the NASD member and describe your relationship,
including, in the case of a general or limited partner, the name of the partner:

    If you answer “no” to Question 7(a), you need not respond to Question 7(b).

          (b) State below whether you or any associate or affiliate of yours has
been an underwriter, or a controlling person or member of any investment banking
or brokerage firm which has been or might be an underwriter for securities of
the Corporation or any affiliate thereof including, but not limited to, the
common stock now being registered.
Yes:                                No:
o                                   o

    If “yes,” please identify the NASD member and describe your relationship,
including, in the case of a general or limited partner, the name of the partner.

-3-

--------------------------------------------------------------------------------

 

ACKNOWLEDGEMENT
     The undersigned hereby agrees to notify the Company promptly of any changes
in the foregoing information which should be made as a result of any
developments, including the passage of time. The undersigned also agrees to
provide the Company and the Company’s counsel any and all such further
information regarding the undersigned promptly upon request in connection with
the preparation, filing, amending, and supplementing of the Registration
Statement (or any prospectus contained therein). The undersigned hereby consents
to the use of all such information in the Registration Statement.
     The undersigned understands and acknowledges that the Company will rely on
the information set forth herein for purposes of the preparation and filing of
the Registration Statement.
     The undersigned understands that the undersigned may be subject to serious
civil and criminal liabilities if the Registration Statement, when it becomes
effective, either contains an untrue statement of a material fact or omits to
state a material fact required to be stated in the Registration Statement or
necessary to make the statements in the Registration Statement not misleading.
The undersigned represents and warrants that all information it provides to the
Company and its counsel is currently accurate and complete and will be accurate
and complete at the time the Registration Statement becomes effective and at all
times subsequent thereto, and agrees during the Effectiveness Period and any
additional period in which the undersigned is making sales of Shares under and
pursuant to the Registration Statement, and agrees during such periods to notify
the Company immediately of any misstatement of a material fact in the
Registration Statement, and of the omission of any material fact necessary to
make the statements contained therein not misleading.
Dated:                     

                  Name            Signature              Name and Title of
Signatory     

-4-

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Exhibit B-3
CERTIFICATE FOR INDIVIDUAL INVESTORS
     If the investor is an individual, including married couples and IRA
accounts of individual investors, pleased complete, date and sign this
Certificate.
CERTIFICATE
     The undersigned certifies that the representations and responses below are
true and accurate:
     (a) The investor has full power and authority to invest in the Company. If
the investment is to be held jointly, each investor must execute and deliver the
Securities Purchase Agreement and initial their investor status as requested in
section (c) below.
     (b) Indicate the form of ownership:
          o Individual
          o IRA
          o Joint Tenants
          o Tenants in Common
          o Tenants in the Entirety
          o Community Property
          o Grantor of a Revocable Trust (identify each grantor and indicate
under what circumstances the trust is revocable by the grantor):

          
 
          
 
(Continue on a separate piece of paper, if necessary.)
     (c) In order for the Company to offer and sell the Units in conformance
with state and federal securities laws, the following information must be
obtained regarding your investor status. Please initial each category applicable
to you as an investor in the Company.

  o   1. I certify that I have a net worth (including home, furnishings and
automobiles) in excess of $1 million either individually or through aggregating
my individual holdings and those in which I have a joint, community property or
other similar shared ownership interest with my spouse.     o   2. I certify
that I have had an annual gross income for the past two years of at least
$200,000 (or $300,000 jointly with my spouse) and expect my income (or joint
income, as appropriate) to reach the same level in the current year.

 

--------------------------------------------------------------------------------

 

  o   3. I certify that I am a director or executive officer of Athersys, Inc.
or Pubco.

Please provide the following personal investor information:
Investor Name(s):
                                                                    
                                                                                
                                          
Individual executing Profile or Trustee:                              
                                                                                
                                            
Social Security Numbers / Federal I.D. Number:                            
                                                                       
                                         
Date of Birth:                                                     
                           Marital Status:                                 
                                                            
Joint Party Date of Birth:                                          
                     Investment Experience (Years):                             
                                
Annual Income:                                                                 
          Liquid Net Worth:                                             
                                           
Net Worth:                                                              
                       
Home Street Address:                                                  
                         
                                                                                  
                        
Home City, State & Zip Code:                                            
                                                                          
                                                   
Home Phone:                                                       
                                   Home Fax:
                                                                     
               
Home Email:                                                                    
                 
Employer:                                                        
                                                                    
                                                                                
Employer Street Address:                                                      
                                                                    
                                                        
Employer City, State & Zip Code:                                
                                                                               
                                                
Bus. Phone:                                                       
                                   Bus. Fax:
                                                                     
               
Bus. Email:                                                 
Type of Business:
                                                                        
                                                                                
                            
NSC Account Executive / Outside Broker/Dealer:
                                                            
                    
Form of Payment — Check or Wire Transfer
     o  Check payable to “Signature Bank, As Agent for ATHERSYS, INC.”
     o  Wire funds from my outside account according to the wiring instructions
on the last page of this certificate
     o  Wire funds from my Brokerage Account
     o  The funds for this investment are rolled over, tax deferred from
                     within the allowed 60-day window

-2-

--------------------------------------------------------------------------------

 

     
Dated:                     , 2007
   
 
   
 
   
 
   
Print Name of Investor
  Print Name of Investor
 
   
 
   
Signature
  Signature

-3-

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Exhibit B-4
CERTIFICATE FOR CORPORATE, PARTNERSHIP, LIMITED LIABILITY COMPANY,
TRUST, FOUNDATION AND JOINT INVESTORS
     If the investor is a corporation, partnership, limited liability company,
trust, pension plan, foundation, joint Investor (other than a married couple) or
other entity, an authorized officer, partner, or trustee must complete, date and
sign this Certificate.
CERTIFICATE
     The undersigned certifies that the representations and responses below are
true and accurate:
     (a) The investor has been duly formed and is validly existing and has full
power and authority to invest in the Company. The person signing on behalf of
the undersigned has the authority to execute and deliver the Securities Purchase
Agreement on behalf of the Investor and to take other actions with respect
thereto.
     (b) Indicate the form of entity of the undersigned:
          o Limited Partnership
          o General Partnership
          o Limited Liability Company
          o Corporation
          o Revocable Trust (identify each grantor, indicate under what
circumstances the trust is revocable by the grantor and have each grantor
complete and deliver Exhibit B-3):                                          
                                         
          
 
(Continue on a separate piece of paper, if necessary.)
          o Other type of Trust (indicate type of trust and, for trusts other
than pension trusts, name the grantors and beneficiaries):
                                                                           
                                                                 
          
 
(Continue on a separate piece of paper, if necessary.)
          o Other form of organization (indicate form of organization
(                                                             
                    ).
          (c) Indicate the approximate date the undersigned entity was formed:
                                                                        .

 

--------------------------------------------------------------------------------

 

     (d) In order for the Company to offer and sell the Units in conformance
with state and federal securities laws, the following information must be
obtained regarding your investor status. Please initial each category applicable
to you as an investor in the Company.

  o   1. A bank as defined in Section 3(a)(2) of the Securities Act, or any
savings and loan association or other institution as defined in
Section 3(a)(5)(A) of the Securities Act whether acting in its individual or
fiduciary capacity;     o   2. A broker or dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934;     o   3. An insurance
company as defined in Section 2(13) of the Securities Act;     o   4. An
investment company registered under the Investment Company Act of 1940 or a
business development company as defined in Section 2(a)(48) of that Act;     o  
5. A Small Business Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment Act
of 1958;     o   6. A plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, if such plan has total assets in
excess of $5,000,000;     o   7. An employee benefit plan within the meaning of
the Employee Retirement Income Security Act of 1974, if the investment decision
is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is
either a bank, savings and loan association, insurance company, or registered
investment advisor, or if the employee benefit plan has total assets in excess
of $5,000,000 or, if a self-directed plan, with investment decisions made solely
by persons that are accredited investors;     o   8. A private business
development company as defined in Section 202(a)(22) of the Investment Advisers
Act of 1940;     o   9. Any partnership or corporation or any organization
described in Section 501(c)(3) of the Internal Revenue Code or similar business
trust, not formed for the specific purpose of acquiring the Shares and Warrants,
with total assets in excess of $5,000,000;     o   10. A trust, with total
assets in excess of $5,000,000, not formed for the specific purpose of acquiring
the Shares and Warrants, whose purchase is directed by a sophisticated person as
described in Rule 506(b)(2)(ii) of the Securities Act;     o   11. An entity in
which all of the equity owners qualify under any of the above subparagraphs. If
the undersigned belongs to this investor category only, list the

-2-

--------------------------------------------------------------------------------

 

      equity owners of the undersigned, and have each equity owner complete and
deliver Exhibit B-3:
                                                            

     
 
(Continue on a separate piece of paper, if necessary.)
     Please set forth in the space provided below the (i) states, if any, in the
U.S. in which you maintained your principal office during the past two years and
the dates during which you maintained your office in each state, (ii) state(s),
if any, in which you are incorporated or otherwise organized and (iii) state(s),
if any, in which you pay income taxes.
     
 
     
 
     
 
Dated:                     , 2007

     
 
   
 
Print Name of Investor
   
 
   
 
   
Name:
   
Title:
   
(Signature and title of authorized officer, partner or trustee)
   

-3-

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SECURITIES DELIVERY INSTRUCTIONS
Please instruct us as to where you would like the Securities delivered to at
Closing:
Name:                                                                        
                                                                              
            
Company:                                                                       
                                                                             
       
Address:                                                                  
                                                                          
                 
                                                                             
                                                                          
                     
Telephone:                                                                   
                                                                       
               
Other Special Instructions:
                                                                       
                                                       

-4-

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Exhibit C
PLAN OF DISTRIBUTION
The selling stockholders may, from time to time, sell any or all of their shares
of common stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The selling stockholders may use any one or more of the
following methods when selling shares:

•   ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;   •   block trades in which the broker-dealer will attempt
to sell the shares as agent but may position and resell a portion of the block
as principal to facilitate the transaction;   •   purchases by a broker-dealer
as principal and resale by the broker-dealer for its account;   •   an exchange
distribution in accordance with the rules of the applicable exchange;   •  
privately negotiated transactions;   •   short sales;   •   broker-dealers may
agree with the selling stockholders to sell a specified number of such shares at
a stipulated price per share;   •   a combination of any such methods of sale;
and   •   any other method permitted pursuant to applicable law.

     The selling stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
     Broker-dealers engaged by the selling stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling stockholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The selling stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved. No
such broker-dealer will receive compensation in excess of that permitted by NASD
Rule 2440 and IM-2440. In no event will any broker-dealer receive total
compensation in excess of 8%. Any profits on the resale of shares of common
stock by a broker-dealer acting as principal might be deemed to be underwriting
discounts or commissions under the Securities Act. Discounts, concessions,
commissions and similar selling expenses, if any, attributable to the sale of
shares will be borne by a selling stockholder. The selling stockholders may
agree to indemnify any agent, dealer or broker-dealer that

 

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participates in transactions involving sales of the shares if liabilities are
imposed on that person under the Securities Act.
     The selling stockholders may from time to time pledge or grant a security
interest in some or all of the shares of common stock owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell the shares of common stock from time to time under
this prospectus after we have filed a supplement to this prospectus under
Rule 424(b)(3) or other applicable provision of the Securities Act of 1933
supplementing or amending the list of selling stockholders to include the
pledgee, transferee or other successors in interest as selling stockholders
under this prospectus.
     The selling stockholders also may transfer the shares of common stock in
other circumstances, in which case the transferees, pledgees or other successors
in interest will be the selling beneficial owners for purposes of this
prospectus and may sell the shares of common stock from time to time under this
prospectus after we have filed a supplement to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act of 1933
supplementing or amending the list of selling stockholders to include the
pledgee, transferee or other successors in interest as selling stockholders
under this prospectus.
     The selling stockholders and any broker-dealers or agents that are involved
in selling the shares of common stock may be deemed to be “underwriters” within
the meaning of the Securities Act in connection with such sales. In such event,
any commissions received by such broker-dealers or agents and any profit on the
resale of the shares of common stock purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.
     We are required to pay all fees and expenses incident to the registration
of the shares of common stock (other than underwriting discounts and
commissions). We have agreed to indemnify the selling stockholders against
certain losses, claims, damages and liabilities, including liabilities under the
Securities Act.
     The selling stockholders have advised us that they have not entered into
any agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their shares of common stock, nor is there
an underwriter or coordinating broker acting in connection with a proposed sale
of shares of common stock by any selling stockholder. If we are notified by any
selling stockholder that any material arrangement has been entered into with a
broker-dealer for the sale of shares of common stock, if required, we will file
a supplement to this prospectus. If the selling stockholders use this prospectus
for any sale of the shares of common stock, they will be subject to the
prospectus delivery requirements of the Securities Act.
     The anti-manipulation rules of Regulation M under the Securities Exchange
Act of 1934 may apply to sales of our common stock and activities of the selling
stockholders.

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Exhibit D
COMPANY TRANSFER AGENT INSTRUCTIONS
[TRANSFER AGENT NAME AND ADDRESS]
Attention:
Ladies and Gentlemen:
Reference is made to that certain Securities Purchase Agreement, dated as of
[                                         XX], 2007 (the “Agreement”), by and
among BTHC VI, Inc., a Delaware corporation (the “Company”), Athersys, Inc., a
Delaware corporation (“Athersys”), and the investors named on the Schedule of
Investors attached thereto (collectively, the “Holders”), pursuant to which the
Company is issuing to the Holders shares (the “Common Shares”) of Common Stock
of the Company, par value $0.001 per share (the “Common Stock”), and Warrants
(the “Warrants”), which are exercisable for shares of Common Stock.
     This letter shall serve as our irrevocable authorization and direction to
you (provided that you are the transfer agent of the Company at such time):
     (i) to issue shares of Common Stock upon transfer or resale of the Common
Shares; and
     (ii) to issue shares of Common Stock upon the exercise of the Warrants (the
“Warrant Shares”) to or upon the order of a Holder from time to time upon
delivery to you of a properly completed and duly executed Exercise Notice, in
the form attached hereto as Exhibit I, which has been acknowledged by the
Company as indicated by the signature of a duly authorized officer of the
Company thereon.
     You acknowledge and agree that so long as you have previously received
(a) written confirmation from the Company that either (i) a registration
statement covering resales of the Common Shares and the Warrant Shares has been
declared effective by the Securities and Exchange Commission (the “SEC”) under
the Securities Act of 1933, as amended (the “1933 Act”) and that resales of the
Common Shares and the Warrant Shares may be made thereunder, or (ii) sales of
the Common Shares and the Warrant Shares may be made in conformity with Rule 144
under the 1933 Act (“Rule 144”), (b) if applicable, a copy of such registration
statement, and (c) notice from the Company or any Holder that a transfer of
Common Shares and/or Warrant Shares has been effected either pursuant to the
registration statement (and a prospectus delivered to the transferee) or
pursuant to Rule 144, then, unless otherwise required by law, within three
(3) business days of your receipt of the notice referred to in (c), you shall
issue the certificates representing the Common Shares and the Warrant Shares so
sold to the transferees registered in the names of such transferees, and such

 

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certificates shall not bear any legend restricting transfer of the Common Shares
and the Warrant Shares thereby and should not be subject to any stop-transfer
restriction.
     Please be advised that the Holders are relying upon this letter as an
inducement to enter into the Agreement and, accordingly, each Holder is a third
party beneficiary to these instructions.
     Please execute this letter in the space indicated to acknowledge your
agreement to act in accordance with these instructions. Should you have any
questions concerning this matter, please contact me at 216-431-9900.

            Very truly yours,

BTHC VI, INC.
      By:           Name:           Title:        

          THE FOREGOING INSTRUCTIONS ARE
ACKNOWLEDGED AND AGREED TO
this      day of ___, 2007

NATIONAL CITY BANK
      By:           Name:           Title:          

Enclosures

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Exhibit E
FORM OF WARRANT
[Provided See Exhibit 4.2 to Current Report on Form 8-K filed on June 14, 2007]

 

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Schedules
Schedule 3.1(a)
SUBSIDIARIES
BTHC VI has the following direct or indirect Subsidiaries:

  1.   B-VI Acquisition Corp. Subsidiary formed to merge with and into Athersys,
with Athersys being the surviving corporation and a wholly-owned subsidiary of
BTHC VI.

Athersys has the following direct or indirect Subsidiaries:

  1.   Advanced Biotherapeutics, Inc. Operating subsidiary of Athersys, owned
100% by Athersys. Formed in March 2000.     2.   Athersys Limited. Subsidiary
formed in UK related to clinical trial of ATHX 105. Owned 100% by Athersys.
Formed in June 2006.     3.   ReGenesys LLC. Merger subsidiary formed for
acquisition of MAPC technology. Owned 100% by Athersys. Formed in
September 2003.     4.   ReGenesys BVBA. Subsidiary formed in Belgium related to
potential collaboration. Owned 100% by Athersys indirectly. Formed in
October 2005.     5.   Athersys-Singapore PTE, LTD. Inactive subsidiary
currently in dissolution. Owned 100% by Athersys. Formed in January 2003.     6.
  Oculus Pharmaceuticals, Inc. Inactive joint venture, owned 50% by Athersys.
Formed in September 2001.

 

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Schedule 3.1(d)
No Conflicts
The following obligations of Athersys will be incurred as a result of the Merger
or the transactions contemplated by this Agreement:

  1.   Employee bonuses in the amount of approximately $455,000 (including
routine payroll taxes), pursuant to Incentive Agreements between Athersys and
its employees.     2.   Officer retroactive salary adjustments in the amount of
approximately $255,000 (including routine payroll taxes), pursuant to
resolutions of the Athersys Board of Directors. The new salaries will take
effect upon the First Closing.     3.   Employee bonus in the amount of $50,000
for William Lehmann, pursuant to the Employment Agreement, dated January 1,
2004, by and between Athersys and William Lehmann.     4.   One employee with an
incentive agreement has not waived any potential right to M&A Bonus under
Incentive Agreement because he is out of the country, but he is expected to
execute a waiver after consummation of the Offering; any bonus that employee
would otherwise be eligible for would be equal to one month of salary;
employee’s current monthly salary is $8,242.

Milestone payment related to the MultiStem technology payable to the former
holders of the MAPC technology in the amount of $500,000 in cash and 38,462
shares of common stock (1,378 shares as adjusted for merger exchange).

-2-

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Schedule 3.1(f)
CAPITALIZATION

                  Prior to Merger   Authorized   Issued and Outstanding
 
               
PubCo:
               
 
               
Common Stock
    100,000,000       300,000  
 
               
Preferred Stock
    10,000,000       0  
 
               
Long-Term Incentive Plan (shares of Common Stock reserved for future issuance)
    3,035,000       0  

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                  Prior to Merger   Authorized   Issued and Outstanding
 
               
Athersys:
               
 
               
Common Stock(1)
    90,000,000       89,522,842  
 
               
Stock Option Plans(2)
    6,740,053       2,842,918  
 
               
Convertible Notes, convertible upon First Closing(3)
    —       —  
 
               
Common Stock Warrants, issuable to lenders upon First Closing(4)
    —       —  

 

(1)   Assumes the conversion of all series of Athersys preferred stock into
common stock. Also assumes the exercise of all existing warrants by Athersys’
bridge investors, which are issuable upon the conversion of the preferred stock.
Excludes 38,462 shares of common stock issuable upon the First Closing related
to a milestone regarding the MultiStem technology. Also excludes shares of
common stock that may be issuable to Athersys’ senior secured lenders upon the
achievement of a milestone. Also excludes shares of common stock that may be
issuable to Angiotech Pharmaceuticals, Inc. upon the achievement of certain
milestones related to a strategic alliance.   (2)   Stock options granted to
current employees, directors and consultants of Athersys will be terminated in
connection with the merger. BTHC will assume certain stock option agreements
with former employees and consultants of Athersys, which will amount to 5,052
option shares after taking the Merger Exchange Rate into consideration.   (3)  
Athersys has secured notes issued to bridge investors ($2.5 million principal)
and unsecured notes issued to Angiotech Pharmaceuticals, Inc. ($10 million
principal) that will convert along with accrued interest upon the First Closing.
  (4)   Athersys’ senior secured lenders are entitled to warrants with a nominal
value of approximately $745,000, which are issuable upon the First Closing.

 

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                  Prior to the First Closing (5)   Authorized   Issued and
Outstanding
 
               
Common Stock (6)
    100,000,000       3,510,523  
 
               
Preferred Stock
    10,000,000       0  
 
               
Long-Term Incentive Plan (shares of Common Stock reserved for future issuance)
    3,035,000       0  
 
               
Common Stock Warrants, issuable to lenders upon First Closing (shares of Common
Stock reserved for future issuance) (7)
    —       —  

 

(5)   After the First Closing, Radius and other new investors may be beneficial
owners of in excess of 5% of Common Stock, and upon the conversion of its note,
Angiotech Pharmaceuticals, Inc. would be a beneficial owner of in excess of 5%
of Common Stock.   (6)   Includes 1,378 shares of Common Stock issuable upon the
First Closing related to a milestone regarding the MultiStem technology.
Excludes the conversion of Athersys convertible notes. Excludes shares that may
be issuable to Athersys’ senior lenders upon achievement of a milestone. Also
excludes shares of Common Stock that may be issuable to Angiotech
Pharmaceuticals, Inc. upon the achievement of certain milestones related to a
strategic alliance.   (7)   Athersys’ senior secured lenders are entitled to
warrants with a nominal value of approximately $745,000, which are issuable upon
the First Closing. Based on the $5.00 offering price, warrants will be issued to
the lenders for 149,026 shares of Common Stock.

 

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Schedule 3.1(j)
MATERIAL AGREEMENTS

1.   Research Collaboration and License Agreement, dated as of December 8, 2000,
by and between the Company and Bristol-Myers Squibb Company.   2.   Cell Line
Collaboration and License Agreement, dated as of July 1, 2002, by and between
the Company and Bristol-Myers Squibb Company, as amended as of January 1, 2006.
  3.   Extended Collaboration and License Agreement, dated as of January 1,
2006, by and between the Company and Bristol-Myers Squibb Company.   4.  
Exclusive License Agreement, dated as of May 17, 2002, by and between Regents of
the University of Minnesota and MCL LLC, assumed by ReGenesys, LLC through
operation of merger on November 4, 2003.   5.   Ownership Agreement, dated as of
May 17, 2002, by and between Regents of the University of Minnesota and MCL LLC,
assumed by ReGenesys, LLC through operation of merger on November 4, 2003.   6.
  Strategic Alliance Agreement, by and between Athersys, Inc. and Angiotech
Pharmaceuticals, Inc., dated as of May 5, 2006.   7.   License Agreement, by and
between Athersys, Inc. and Angiotech Pharmaceuticals, Inc., dated as of May 5,
2006.   8.   Sublicense Agreement, by and between Athersys, Inc. and Angiotech
Pharmaceuticals, Inc., dated as of May 5, 2006.   9.   Convertible Promissory
Note in the amount of $5,000,000 from Athersys, Inc. to Angiotech
Pharmaceuticals, Inc., dated as of May 5, 2006.   10.   Convertible Promissory
Note in the amount of $5,000,000 from Athersys, Inc. to Angiotech
Pharmaceuticals, Inc., dated as of January 16, 2007.   11.   Amended and
Restated Registration Rights Agreement, dated as of April 28, 2000, as amended
as of January 29, 2002, as of November 19, 2002, and as of May 31, 2007, by and

-2-

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    among the Company and certain of its stockholders.   12.   Secured
Convertible Promissory Notes in the aggregate amount of $2,500,000 from
Athersys, Inc. to Investors, dated as of October 19, 2006.   13.   Warrants to
Investors, dated as of October 19, 2006.   14.   1995 Incentive Plan of
Athersys, Inc., as amended.   15.   2000 Stock Incentive Plan of Athersys, Inc.
  16.   BTHC VI, Inc. Long-Term Incentive Plan .   17.   Loan and Security
Agreement, and Supplement, dated as of November 2, 2004, by and among the
Company, Advanced Biotherapeutics, Inc., Venture Lending & Leasing IV, Inc., and
Costella Kirsch IV, L.P.   18.   Promissory Notes made by the Company and
Advanced Biotherapeutics, Inc., on behalf of Venture Lending & Leasing IV, Inc.,
and Costella Kirsch IV, L.P., dated November 12, 2004 (numbers CK-001 and
4035-001), and dated December 29, 2004 (numbers CK-002 and 4035-002).   19.  
Amendment to Loan and Security Agreement, dated as of September 29, 2006, by and
among the Company, Advanced Biotherapeutics, Inc., Venture Lending & Leasing IV,
Inc., and Costella Kirsch IV, L.P.   20.   Intellectual Property Security
Agreement, dated as of February 14, 2006, by and between Athersys, Inc. and
Venture Lending & Leasing IV, Inc.   21.   Security Agreement, by and between
Athersys, Inc. and Investors, dated as of October 19, 2006.   22.   Amended and
Restated Employment agreement dated April 1, 1998 by and between Athersys, Inc.
and Gil Van Bokkelen.   23.   Amended and Restated Employment agreement dated
April 1, 1998 by and between Athersys, Inc. and John Harrington.

-3-

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24.   Employment agreement dated May 22, 1998 by and between Athersys, Inc. and
Laura Campbell.   25.   Employment agreement dated September 25, 2000 by and
between Athersys, Inc., Advanced Biotherapeutics, Inc. and Kurt Brunden.   26.  
Employment agreement dated October 3, 2003 by and between Athersys, Inc.,
Advanced Biotherapeutics, Inc. and Robert Deans, Ph.D.   27.   Employment
agreement dated January 1, 2004 by and between Athersys, Inc., Advanced
Biotherapeutics, Inc. and William Lehmann.   28.   Form Incentive agreement —
entered into with named executives.   29.   Non-competition agreements and D&O
indemnification agreements with key members of management.   30.   D&O
indemnification agreements with board members   31.   Separation and General
Release Agreements with terminated employees, 2005, 2003, 2002.   32.  
Engagement Letter, dated as of October 31, 2005, by and between the Company and
Merrill Lynch & Co.   33.   Summary of Principle Terms, dated as of February 21,
2007, by and between the Company and Radius Ventures, as amended on March 19,
2007.   34.   Engagement Agreement, dated as of February 28, 2007, by and
between the Company and National Securities Corporation.   35.   Amendment to
Engagement Agreement, dated as of April 16, 2007, by and among the Company,
National Securities Corporation, and Cowen and Company, LLC.   36.   Asset
Purchase and License Agreement, dated as of May 22, 2007, by and between
Athersys and Wyeth Pharmaceuticals, Inc.   37.   Merger Agreement, dated as of
May 24, 2007, by and among Athersys, BTHC VI, Inc. and B-VI-Acquisition Corp.

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Schedule 3.1(n)
Liens
     Athersys has granted a security interest in substantially all of its
assets, including without limitation, the capital stock or other equity
interests of its subsidiaries, pursuant to the agreements and instruments set
forth below.

  1.   Loan and Security Agreement, and Supplement, dated as of November 2,
2004, by and among the Company, Advanced Biotherapeutics, Inc., Venture Lending
& Leasing IV, Inc., and Costella Kirsch IV, L.P.     2.   Promissory Notes made
by the Company and Advanced Biotherapeutics, Inc., on behalf of Venture Lending
& Leasing IV, Inc., and Costella Kirsch IV, L.P., dated November 12, 2004
(numbers CK-001 and 4035-001), and dated December 29, 2004 (numbers CK-002 and
4035-002).     3.   Amendment to Loan and Security Agreement, dated as of
September 29, 2006, by and among the Company, Advanced Biotherapeutics, Inc.,
Venture Lending & Leasing IV, Inc., and Costella Kirsch IV, L.P.     4.   UCC
Financing Statements of the Company and Advanced Biotherapeutics, Inc. naming
Venture Lending & Leasing IV, Inc., as agent, as secured party.     5.  
Intellectual Property Security Agreement, dated as of February 14, 2006, by and
between Athersys, Inc. and Venture Lending & Leasing IV, Inc.     6.   Control
Agreement Concerning Deposit Accounts, dated as of November 2, 2004, by and
among the Company, Advanced Biotherapeutics, Inc., Venture Lending & Leasing IV,
Inc., Costella Kirsch IV, L.P., and National City Bank.     7.   Account Control
Agreement, dated as of November 2, 2004, by and among the Company, Advanced
Biotherapeutics, Inc., Venture Lending & Leasing IV, Inc., Costella Kirsch IV,
L.P., and NatCity Investments.     8.   Secured Convertible Promissory Notes in
the aggregate amount of $2,500,000 from Athersys, Inc. to Investors, dated as of
October 19, 2006.

-5-

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  9.   Security Agreement, by and between Athersys, Inc. and Investors, dated as
of October 19, 2006.

-6-

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Schedule 3.1(v)
PATENTS AND TRADEMARKS
     In April 2007, Athersys received a letter from REGENESIS BIOMEDICAL
regarding Athersys’ application to register the mark REGENESYS. The letter was a
request for Athersys to abandon its application and to cease from using the
REGENESYS mark. The REGENESYS mark is not necessary to conduct Athersys’
business. Athersys believes that REGENESIS does not operate in the same field as
REGENESYS. However, Athersys is considering its options in this matter.

-7-

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Schedule 3.1(cc)
INDEBTEDNESS
Athersys has the following debt outstanding under the agreements listed below,
with balances as of May 31, 2007, including accrued interest, of:

    Senior secured loan with Venture Lending/Costella Kirsch ($3,527,715)      
Secured promissory notes with Bridge Investors ($2,658,219), which will convert
into common stock of BTHC upon Closing of the Offering.
Unsecured promissory notes with Angiotech ($10,370,993), which will convert into
common stock of BTHC upon Closing of the Offering.   1.   Loan and Security
Agreement, and Supplement, dated as of November 2, 2004, by and among the
Company, Advanced Biotherapeutics, Inc., Venture Lending & Leasing IV, Inc., and
Costella Kirsch IV, L.P.   2.   Promissory Notes made by the Company and
Advanced Biotherapeutics, Inc., on behalf of Venture Lending & Leasing IV, Inc.,
and Costella Kirsch IV, L.P., dated November 12, 2004 (numbers CK-001 and
4035-001), and dated December 29, 2004 (numbers CK-002 and 4035-002).   3.  
Amendment to Loan and Security Agreement, dated as of September 29, 2006, by and
among the Company, Advanced Biotherapeutics, Inc., Venture Lending & Leasing IV,
Inc., and Costella Kirsch IV, L.P.   4.   Secured Convertible Promissory Notes
in the aggregate amount of $2,500,000 from Athersys, Inc. to Investors, dated as
of October 19, 2006.   5.   Convertible Promissory Note in the amount of
$5,000,000 from Athersys, Inc. to Angiotech Pharmaceuticals, Inc., dated as of
May 5, 2006.   6.   Convertible Promissory Note in the amount of $5,000,000 from
Athersys, Inc. to Angiotech Pharmaceuticals, Inc., dated as of January 16, 2007.

-8-

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Schedule 5.1(h)
CONSENTS AND WAIVERS

1.   Stockholder consent to amend the Athersys Stockholders’ Agreement to
provide for its termination upon the closing of the Offering and the Merger, and
waiver of preemptive rights relating to the Offering.

2.   Stockholder consent to amend the Athersys Registration Rights Agreement to
approve the registration rights being provided in this Offering and to waive
certain registration rights.

-9-