Exhibit 10.1
Execution Copy
COMMON STOCK PURCHASE AGREEMENT
COMMON STOCK PURCHASE AGREEMENT (the “Agreement”), dated as of November 11,
2011, by and between ATHERSYS, INC., a Delaware corporation (the “Company”), and
ASPIRE CAPITAL FUND, LLC, an Illinois limited liability company (the “Buyer”).
Capitalized terms used herein and not otherwise defined herein are defined in
Section 10 hereof.
WHEREAS:
Subject to the terms and conditions set forth in this Agreement, the Company
wishes to sell to the Buyer, and the Buyer wishes to buy from the Company, up to
Twenty Million Dollars ($20,000,000) of the Company’s common stock, par value
$0.001 (the “Common Stock”). The shares of Common Stock to be purchased
hereunder are referred to herein as the “Purchase Shares.”
NOW THEREFORE, the Company and the Buyer hereby agree as follows:

  1.  
PURCHASE OF COMMON STOCK.

Subject to the terms and conditions set forth in this Agreement, the Company has
the right to sell to the Buyer, and the Buyer has the obligation to purchase
from the Company, Purchase Shares as follows:
(a) Initial Purchase; Commencement of Purchases of Common Stock. Immediately
upon the execution of this Agreement, the Buyer shall purchase from the Company
666,667 Purchase Shares and upon receipt of such Purchase Shares pay to the
Company as the purchase price therefor, via wire transfer, One Million Dollars
($1,000,000) (such purchase the “Initial Purchase” and such Purchase Shares are
referred to herein as “Initial Purchase Shares”). Upon issuance and payment
therefor as provided herein, such Initial Purchase Shares shall be validly
issued and fully paid and non-assessable. The Initial Purchase Shares shall be
issued to the Buyer bearing the restrictive legend set forth in Section 4(e).
Thereafter, the purchase and sale of Purchase Shares hereunder shall occur from
time to time upon written notices by the Company to the Buyer on the terms and
conditions as set forth herein following the satisfaction of the conditions (the
“Commencement”) as set forth in Sections 6 and 7 below (the date of satisfaction
of such conditions, the “Commencement Date”).
(b) The Company’s Right to Require Regular Purchases. Subject to the terms and
conditions of this Agreement, on any given Business Day after the Commencement
Date, the Company shall have the right but not the obligation to direct the
Buyer by its delivery to the Buyer of a Purchase Notice from time to time, and
the Buyer thereupon shall have the obligation, to buy the number of Purchase
Shares specified in such notice, up to a maximum of 100,000 Purchase Shares, on
such Business Day (as long as such notice is delivered on or before 5:00 p.m.
eastern time on such Business Day) (each such purchase, a “Regular Purchase”) at
the Purchase Price on the Purchase Date; however, in no event shall the Purchase
Amount of a Regular Purchase exceed five hundred thousand dollars ($500,000) per
Business Day. The Company may deliver additional Purchase Notices to the Buyer
from time to time so long as the most recent purchase has been completed. The
share amounts in the first sentence of this Section 1(b) shall be appropriately
adjusted for any reorganization, recapitalization, non-cash dividend, stock
split, reverse stock split, or other similar transaction.

 

 

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(c) VWAP Purchases. Subject to the terms and conditions of this Agreement, in
addition to purchases of Purchase Shares as described in Section 1(b) above,
with one Business Day’s prior written notice, the Company shall also have the
right but not the obligation to direct the Buyer by the Company’s delivery to
the Buyer of a VWAP Purchase Notice from time to time, and the Buyer thereupon
shall have the obligation, to buy the VWAP Purchase Share Percentage of the
trading volume of the Common Stock on the VWAP Purchase Date up to the VWAP
Purchase Share Volume Maximum on the VWAP Purchase Date (as long as such notice
is delivered on or before 5:00 p.m. eastern time on the Business Day immediately
preceding the VWAP Purchase Date) (each such purchase, a “VWAP Purchase”) at the
VWAP Purchase Price. The Company may deliver a VWAP Purchase Notice to the Buyer
only on a date on which the Company also submitted a Purchase Notice for a
Regular Purchase of 100,000 Purchase Shares to the Buyer. A VWAP Purchase shall
automatically be deemed completed at such time on the VWAP Purchase Date that
the Sale Price falls below the VWAP Minimum Price Threshold; in such
circumstance, the VWAP Purchase Amount shall be calculated using: (i) the VWAP
Purchase Share Percentage of the aggregate shares traded on the Principal Market
for such portion of the VWAP Purchase Date prior to the time that the Sale Price
fell below the VWAP Minimum Price Threshold and (ii) a VWAP Purchase Price
calculated using the volume weighted average price of Common Stock sold during
such portion of the VWAP Purchase Date prior to the time that the Sale Price
fell below the VWAP Minimum Price Threshold. Each VWAP Purchase Notice must be
accompanied by instructions to the Company’s Transfer Agent to immediately issue
to the Buyer an amount of Common Stock equal to the VWAP Purchase Share
Estimate, a good faith estimate by the Company of the number of Purchase Shares
that the Buyer shall have the obligation to buy pursuant to the VWAP Purchase
Notice. In no event shall the Buyer pursuant to any VWAP Purchase, purchase a
number of Purchase Shares that exceeds the VWAP Purchase Share Estimate issued
on the VWAP Purchase Date in connection with such VWAP Purchase Notice; however,
the Buyer will immediately return to the Company any amount of Common Stock
issued pursuant to the VWAP Purchase Share Estimate that exceeds the number of
Purchase Shares the Buyer actually purchases in connection with such VWAP
Purchase. Upon completion of each VWAP Purchase Date, the Buyer shall submit to
the Company a confirmation of the VWAP Purchase in form and substance reasonably
acceptable to the Company. The Company may deliver additional VWAP Purchase
Notices to the Buyer from time to time so long as the most recent purchase has
been completed. The Company may, by written notice to the Buyer, in its sole
discretion at any time after the date of this Agreement, irrevocably terminate
this Section 1(c) and its right to direct the Buyer to make VWAP Purchases.
(d) Payment for Purchase Shares. For each Regular Purchase, the Buyer shall pay
to the Company an amount equal to the Purchase Amount as full payment for such
Purchase Shares via wire transfer of immediately available funds on the same
Business Day that the Buyer receives such Purchase Shares. For each VWAP
Purchase, the Buyer shall pay to the Company an amount equal to the VWAP
Purchase Amount as full payment for such Purchase Shares via wire transfer of
immediately available funds on the third Business Day following the VWAP
Purchase Date. All payments made under this Agreement shall be made in lawful
money of the United States of America via wire transfer of immediately available
funds to such account as the Company may from time to time designate by written
notice in accordance with the provisions of this Agreement. Whenever any amount
expressed to be due by the terms of this Agreement is due on any day that is not
a Business Day, the same shall instead be due on the next succeeding day that is
a Business Day.

 

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(e) [Intentionally omitted.]
(f) Records of Purchases. The Buyer and the Company shall each maintain records
showing the remaining Available Amount at any given time and the dates and
purchase amounts for each purchase, or shall use such other method reasonably
satisfactory to the Buyer and the Company to reconcile the remaining Available
Amount.
(g) Taxes. The Company shall pay any and all transfer, stamp or similar taxes
that may be payable with respect to the issuance and delivery of any shares of
Common Stock to the Buyer made under this Agreement.
(h) Compliance with Principal Market Rules. Notwithstanding anything in this
Agreement to the contrary, and in addition to the limitations set forth in
Section 1(i), unless and until such time as the stockholders of the Company
approve the transaction contemplated by this Agreement, no Purchases shall be
made under Sections 1(b) and 1(c) of this Agreement unless the purchase price
thereunder equals or exceeds the Floor Price. The “Floor Price” is a price per
share of $1.40, equal to (x) the Signing Market Price plus (y) $0.03, which
shall be appropriately adjusted for any reorganization, recapitalization,
non-cash dividend, stock split, reverse stock split or other similar
transaction. “Signing Market Price” shall mean $1.37, the last consolidated
closing bid price of the Common Stock on the Principal Market during normal
trading hours immediately preceding the date of this Agreement. The Company
hereby represents and warrants to the Buyer that the book value per share of
Common Stock as of the date hereof is less than the Signing Market Price. The
Company shall not be required or permitted to issue, and the Buyer shall not be
required to purchase, any shares of Common Stock under this Agreement if such
issuance would violate the rules or regulations of the Principal Market.
(i) Beneficial Ownership Limitation. The Company shall not issue and the Buyer
shall not purchase any shares of Common Stock under this Agreement if such
shares proposed to be issued and sold, when aggregated with all other shares of
Common Stock then owned beneficially (as calculated pursuant to Section 13(d) of
the Exchange Act and Rule 13d-3 promulgated thereunder) by the Buyer and its
affiliates, would result in the beneficial ownership by the Buyer and its
affiliates of more than 19.99% of the then issued and outstanding shares of
Common Stock.

  2.  
BUYER’S REPRESENTATIONS AND WARRANTIES.

The Buyer represents and warrants to the Company that as of the date hereof and
as of the Commencement Date:
(a) Investment Purpose. The Buyer is entering into this Agreement and acquiring
the Commitment Shares (as defined in Section 4(e) hereof), Initial Purchase
Shares and Purchase Shares (the Commitment Shares, Initial Purchase Shares and
Purchase Shares are collectively referred to herein as the “Securities”), for
its own account for investment only and not with a view towards, or for resale
in connection with, the public sale or distribution thereof; provided however,
by making the representations herein, the Buyer does not agree to hold any of
the Securities for any minimum or other specific term.
(b) Accredited Investor Status. The Buyer is an “accredited investor” as that
term is defined in Rule 501(a)(3) of Regulation D under the 1933 Act.

 

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(c) Reliance on Exemptions. The Buyer understands that the Securities are being
offered and sold to it in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws and that the
Company is relying in part upon the truth and accuracy of, and the Buyer’s
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of the Buyer set forth herein in order to determine the
availability of such exemptions and the eligibility of the Buyer to acquire the
Securities.
(d) Information. The Buyer has been furnished with all materials relating to the
business, finances and operations of the Company and materials relating to the
offer and sale of the Securities that have been reasonably requested by the
Buyer, including, without limitation, the SEC Documents (as defined in Section
3(f) hereof). The Buyer understands that its investment in the Securities
involves a high degree of risk. The Buyer (i) is able to bear the economic risk
of an investment in the Securities including a total loss, (ii) has such
knowledge and experience in financial and business matters that it is capable of
evaluating the merits and risks of the proposed investment in the Securities and
(iii) has had an opportunity to ask questions of and receive answers from the
officers of the Company concerning the financial condition and business of the
Company and others matters related to an investment in the Securities. Neither
such inquiries nor any other due diligence investigations conducted by the Buyer
or its representatives shall modify, amend or affect the Buyer’s right to rely
on the Company’s representations and warranties contained in Section 3 below.
The Buyer has sought such accounting, legal and tax advice as it has considered
necessary to make an informed investment decision with respect to its
acquisition of the Securities.
(e) No Governmental Review. The Buyer 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.
(f) Transfer or Sale. The Buyer understands that except as provided in the
Registration Rights Agreement (as defined in Section 4(a) hereof): (i) the
Securities have not been and are not being registered under the 1933 Act or any
state securities laws, and may not be offered for sale, sold, assigned or
transferred unless (A) subsequently registered thereunder or (B) an exemption
exists permitting such Securities to be sold, assigned or transferred without
such registration; (ii) any sale of the Securities made in reliance on Rule 144
may be made only in accordance with the terms of Rule 144 and further, if
Rule 144 is not applicable, any resale of the Securities under circumstances in
which the seller (or the person through whom the sale is made) may be deemed to
be an underwriter (as that term is defined in the 1933 Act) may require
compliance with some other exemption under the 1933 Act or the rules and
regulations of the SEC thereunder; and (iii) neither the Company nor any other
person is under any obligation to register the Securities under the 1933 Act or
any state securities laws or to comply with the terms and conditions of any
exemption thereunder.
(g) Validity; Enforcement. This Agreement has been duly and validly authorized,
executed and delivered on behalf of the Buyer and is a valid and binding
agreement of the Buyer enforceable against the Buyer in accordance with its
terms, subject as to enforceability to (i) general principles of equity and to
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and
other similar laws relating to, or affecting generally, the enforcement of
applicable creditors’ rights and remedies and (ii) public policy underlying any
law, rule or regulation (including any federal or state securities law, rule or
regulation) with regards to indemnification, contribution or exculpation. The
execution and delivery of the Transaction Documents by the Buyer and the
consummation by it of the transactions contemplated hereby and thereby do not
conflict with the Buyer’s certificate of organization or operating agreement or
similar documents, and do not require further consent or authorization is
required by the Buyer, its managers or its members.

 

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(h) Residency. The Buyer is a resident of the State of Illinois.
(i) No Prior Short Selling. The Buyer represents and warrants to the Company
that at no time prior to the date of this Agreement has any of the Buyer, its
agents, representatives or affiliates engaged in or effected, in any manner
whatsoever, directly or indirectly, any (i) “short sale” (as such term is
defined in Section 242.200 of Regulation SHO of the Securities Exchange Act of
1934, as amended (the “1934 Act”)) of the Common Stock or (ii) hedging
transaction, which establishes a net short position with respect to the Common
Stock.

  3.  
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company represents and warrants to the Buyer that as of the date hereof and
as of the Commencement Date:
(a) Organization and Qualification. The Company and its “Subsidiaries” (which,
for purposes of this Agreement, means any entity in which the Company, directly
or indirectly, owns more than 50% of the voting stock or capital stock or other
similar equity interests) are corporations or limited liability companies duly
organized and validly existing in good standing under the laws of the
jurisdiction in which they are incorporated or organized, and have the requisite
corporate or organizational power and authority to own their properties and to
carry on their business as now being conducted. Each of the Company and its
Subsidiaries is duly qualified as a foreign corporation or limited liability
company to do business and is in good standing in every jurisdiction in which
its ownership of property or the nature of the business conducted by it makes
such qualification necessary, except to the extent that the failure to be so
qualified or be in good standing could not reasonably be expected to have a
Material Adverse Effect. As used in this Agreement, “Material Adverse Effect”
means any material adverse effect on any of: (i) the business, properties,
assets, operations, results of operations or financial condition of the Company
and its Subsidiaries, if any, taken as a whole, or (ii) the authority or ability
of the Company to perform its obligations under the Transaction Documents (as
defined in Section 3(b) hereof). The Company has no material Subsidiaries except
as set forth on Schedule 3(a).
(b) Authorization; Enforcement; Validity. (i) The Company has the requisite
corporate power and authority to enter into and perform its obligations under
this Agreement, the Registration Rights Agreement and each of the other
agreements entered into by the parties on the Commencement Date and attached
hereto as exhibits to this Agreement (collectively, the “Transaction
Documents”), and to issue the Securities in accordance with the terms hereof and
thereof, (ii) the execution and delivery of the Transaction Documents by the
Company and the consummation by it of the transactions contemplated hereby and
thereby, including without limitation, the issuance of the Commitment Shares and
the reservation for issuance and the issuance of the Purchase Shares issuable
under this Agreement, have been duly authorized by the Company’s Board of
Directors or duly authorized committee thereof, do not conflict with the
Company’s Certificate of Incorporation or Bylaws, and do not require further
consent or authorization by the Company, its Board of Directors or its
stockholders, (iii) this Agreement has been, and each other Transaction Document
shall be on the Commencement Date, duly executed and delivered by the Company
and (iv) this Agreement constitutes, and each other Transaction Document upon
its execution on behalf of the Company, shall constitute, the valid and binding
obligations of the Company enforceable against the Company in accordance with
their terms, except as such enforceability may be limited by (i) general
principles of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally, the
enforcement of creditors’ rights and remedies and (ii) public policy underlying
any law, rule or regulation (including any federal or state securities law, rule
or regulation) with regards to indemnification, contribution or exculpation. The
Board of Directors of the Company or duly authorized committee thereof has
approved the resolutions (the “Signing Resolutions”) substantially in the form
as set forth as Exhibit B attached hereto to authorize this Agreement and the
transactions contemplated hereby. The Signing Resolutions are valid, in full
force and effect and have not been modified or supplemented in any material
respect. The Company has delivered to the Buyer a true and correct copy of the
Signing Resolutions as adopted by the Board of Directors of the Company or an
appropriate Board Committee.

 

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(c) Capitalization. As of the date hereof, the authorized capital stock of the
Company consists of (i) 100,000,000 shares of Common Stock, par value $0.001, of
which as of the date hereof, 23,503,926 shares are issued and outstanding, zero
shares are held as treasury shares, 5,500,000 shares are reserved for future
issuance pursuant to the Company’s equity incentive plans, of which
approximately 971,174 shares remain available for future option grants or stock
awards, and 6,436,571 shares are issuable and reserved for issuance pursuant to
securities (other than stock options or equity based awards issued pursuant to
the Company’s stock incentive plans) exercisable or exchangeable for, or
convertible into, shares of Common Stock and (ii) 10,000,000 shares of preferred
stock, with per share liquidation preferences set forth on Schedule 3(c), of
which as of the date hereof zero shares are issued and outstanding. All of such
outstanding shares have been, or upon issuance will be, validly issued and are
fully paid and nonassessable. Except as disclosed in Schedule 3(c), (i) no
shares of the Company’s capital stock are subject to preemptive rights or any
other similar rights or any liens or encumbrances suffered or permitted by the
Company, (ii) there are no outstanding debt securities of the Company or any of
its Subsidiaries, (iii) there are no outstanding options, warrants, scrip,
rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, any shares of capital
stock of the Company or any of its Subsidiaries, or contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries
is or may become bound to issue additional shares of capital stock of the
Company or any of its Subsidiaries or options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the
Company or any of its Subsidiaries, (iv) there are no material agreements or
arrangements under which the Company or any of its Subsidiaries is obligated to
register the sale of any of their securities under the 1933 Act (except the
Registration Rights Agreement), (v) there are no outstanding securities or
instruments of the Company or any of its Subsidiaries which contain any
redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries
is or may become bound to redeem a security of the Company or any of its
Subsidiaries, (vi) there are no securities or instruments containing
anti-dilution or similar provisions that will be triggered by the issuance of
the Securities as described in this Agreement and (vii) the Company does not
have any stock appreciation rights or “phantom stock” plans or agreements or any
similar plan or agreement. The Company has furnished or made available to the
Buyer true and correct copies of the Company’s Certificate of Incorporation, as
amended and as in effect on the date hereof (the “Certificate of
Incorporation”), and the Company’s Bylaws, as amended and as in effect on the
date hereof (the “Bylaws”).

 

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(d) Issuance of Securities. The Commitment Shares have been duly authorized and,
upon issuance in accordance with the terms hereof, the Commitment Shares shall
be (i) validly issued, fully paid and non-assessable and (ii) free from all
taxes, liens and charges with respect to the issue thereof. At least 8,000,000
shares of Common Stock have been duly authorized and reserved for issuance upon
purchase under this Agreement. Upon issuance and payment therefore in accordance
with the terms and conditions of this Agreement, the Purchase Shares shall be
validly issued, fully paid and nonassessable and free from all taxes, liens and
charges with respect to the issue thereof, with the holders being entitled to
all rights accorded to a holder of Common Stock.
(e) No Conflicts. Except as disclosed in Schedule 3(e), the execution, delivery
and performance of the Transaction Documents by the Company and the consummation
by the Company of the transactions contemplated hereby and thereby (including,
without limitation, the reservation for issuance and issuance of the Purchase
Shares) will not (i) result in a violation of the Certificate of Incorporation
or the Bylaws or (ii) 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 the Company or any of its
Subsidiaries is a party, or result in a violation of any law, rule, regulation,
order, judgment or decree (including federal and state securities laws and
regulations and the rules and regulations of the Principal Market applicable to
the Company or any of its Subsidiaries) or by which any property or asset of the
Company or any of its Subsidiaries is bound or affected, except in the case of
defaults, terminations, amendments, accelerations, cancellations and violations
under clause (ii), that could not reasonably be expected to result in a Material
Adverse Effect. Except as disclosed in Schedule 3(e), neither the Company nor
its Subsidiaries is in violation of any term of or in default under its
Certificate of Incorporation or Bylaws or their organizational charter or
bylaws, respectively. Except as disclosed in Schedule 3(e), neither the Company
nor any of its Subsidiaries is in violation of any term of or is in default
under any material contract, agreement, mortgage, indebtedness, indenture,
instrument, judgment, decree or order or any statute, rule or regulation
applicable to the Company or its Subsidiaries, except for possible violations,
defaults, terminations or amendments that could not reasonably be expected to
have a Material Adverse Effect. The business of the Company and its Subsidiaries
is not being conducted, and shall not be conducted, in violation of any law,
ordinance, or regulation of any governmental entity, except for possible
violations, the sanctions for which either individually or in the aggregate
could not reasonably be expected to have a Material Adverse Effect. Except as
specifically contemplated by this Agreement, reporting obligations under the
1934 Act and as required under the 1933 Act or applicable state securities laws
or the filing of a Listing of Additional Shares Notification Form with the
Principal Market, the Company is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court or
governmental agency or any regulatory or self-regulatory agency in order for it
to execute, deliver or perform any of its obligations under or contemplated by
the Transaction Documents in accordance with the terms hereof or thereof. Except
as disclosed in Schedule 3(e) and for reporting obligations under the 1934 Act,
all consents, authorizations, orders, filings and registrations which the
Company is required to obtain pursuant to the preceding sentence shall be
obtained or effected on or prior to the Commencement Date. The Company is not
subject to any notices or actions from or to the Principal Market, other than
routine matters incident to listing on the Principal Market and not involving a
violation of the rules of the Principal Market. The Principal Market has not
commenced any delisting proceedings against the Company.

 

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(f) SEC Documents; Financial Statements. Except as disclosed in Schedule 3(f),
since September 30, 2010, the Company has filed all reports, schedules, forms,
statements and other documents required to be filed by it with the SEC pursuant
to the reporting requirements of the 1934 Act (all of the foregoing filed prior
to the date hereof and all exhibits included therein and financial statements
and schedules thereto and documents incorporated by reference therein being
hereinafter referred to as the “SEC Documents”). As of their respective dates
(except as they have been correctly amended), the SEC Documents complied in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC (except
as they may have been properly amended), 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 light of the
circumstances under which they were made, not misleading. As of their respective
dates (except as they have been properly amended), the financial statements of
the Company included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. Such financial statements have been
prepared in accordance with generally accepted accounting principles,
consistently applied, during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto or (ii) in
the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments). Except as disclosed in Schedule 3(f) or routine correspondence,
such as comment letters and notices of effectiveness in connection with
previously filed registration statements or periodic reports, to the Company’s
knowledge, the Company or any of its Subsidiaries are not presently the subject
of any inquiry, investigation or action by the SEC.
(g) Absence of Certain Changes. Except as disclosed in Schedule 3(g), since
June 30, 2011, there has been no material adverse change in the business,
properties, operations, financial condition or results of operations of the
Company or its Subsidiaries. For purposes of this Agreement, neither a decrease
in cash or cash equivalents nor losses incurred in the ordinary course of the
Company’s business shall be deemed or considered a material adverse change. The
Company has not taken any steps, and does not currently expect to take any
steps, to seek protection pursuant to any Bankruptcy Law nor does the Company or
any of its Subsidiaries have any knowledge or reason to believe that its
creditors intend to initiate involuntary bankruptcy or insolvency proceedings.
The Company is financially solvent and is generally able to pay its debts as
they become due.
(h) Absence of Litigation. To the Company’s knowledge, there is no action, suit,
proceeding, inquiry or investigation before or by any court, public board,
government agency, self-regulatory organization or body pending or, to the
knowledge of the Company or any of its Subsidiaries, threatened against the
Company or any of the Company’s Subsidiaries or any of the Company’s or the
Company’s Subsidiaries’ officers or directors in their capacities as such, which
could reasonably be expected to have a Material Adverse Effect. A description of
each action, suit, proceeding, inquiry or investigation before or by any court,
public board, government agency, self-regulatory organization or body which, as
of the date of this Agreement, is pending or threatened in writing against the
Company, or any of the Company’s Subsidiaries or any of the Company’s or the
Company’s Subsidiaries’ officers or directors in their capacities as such, is
set forth in Schedule 3(h).
(i) Acknowledgment Regarding Buyer’s Status. The Company acknowledges and agrees
that the Buyer is acting solely in the capacity of arm’s length purchaser with
respect to the Transaction Documents and the transactions contemplated hereby
and thereby. The Company further acknowledges that the Buyer is not acting as a
financial advisor or fiduciary of the Company (or in any similar capacity) with
respect to the Transaction Documents and the transactions contemplated hereby
and thereby and any advice given by the Buyer or any of its representatives or
agents in connection with the Transaction Documents and the transactions
contemplated hereby and thereby is merely incidental to the Buyer’s purchase of
the Securities. The Company further represents to the Buyer that the Company’s
decision to enter into the Transaction Documents has been based solely on the
independent evaluation by the Company and its representatives and advisors.

 

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(j) Intellectual Property Rights. To the Company’s knowledge, the Company and
its Subsidiaries own or possess adequate rights or licenses to use all material
trademarks, trade names, service marks, service mark registrations, service
names, patents, patent rights, copyrights, inventions, licenses, approvals,
governmental authorizations, trade secrets and other intellectual property
rights (collectively, “Intellectual Property”) necessary to conduct their
respective businesses as now conducted, except as set forth in Schedule 3(j) or
to the extent that the failure to own, possess, license or otherwise hold
adequate rights to use Intellectual Property would not, individually or in the
aggregate, have a Material Adverse Effect. Except as disclosed in Schedule 3(j),
none of the Company’s active and registered Intellectual Property expires within
two years from the date of this Agreement. The Company and its Subsidiaries do
not have any knowledge of any infringement by the Company or its Subsidiaries of
any Intellectual Property of others, or of any such development of similar or
identical trade secrets or technical information by others with respect to the
Company’s or its Subsidiaries’ Intellectual Property and, except as set forth on
Schedule 3(j), there is no claim, action or proceeding being made or brought
against, or to the Company’s knowledge, being threatened against, the Company or
its Subsidiaries regarding Intellectual Property, which could reasonably be
expected to have a Material Adverse Effect.
(k) Environmental Laws. The Company and its Subsidiaries (i) are in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of the environment or human health and
safety with respect to hazardous or toxic substances or wastes, pollutants or
contaminants (“Environmental Laws”), (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, except where, in each of the
three foregoing clauses, the failure to so comply or receive such approvals
could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
(l) Title. The Company and its Subsidiaries have good and marketable title in
fee simple to all real property and good and marketable title to all personal
property owned by them which is material to the business of the Company and its
Subsidiaries, in each case free and clear of all liens, encumbrances and defects
except such as are described in Schedule 3(l) or such as do not materially
affect the value of such property and do not interfere with the use made and
proposed to be made of such property by the Company and any of its Subsidiaries
or could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect. Any real property and facilities held under lease by
the Company and any of its Subsidiaries, to the Company’s knowledge, are held by
them under valid, subsisting and enforceable leases with such exceptions as are
not material and do not interfere with the use made and proposed to be made of
such property and buildings by the Company and its Subsidiaries.
(m) Insurance. The Company and each of its Subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in such
amounts as management of the Company believes to be reasonable in light of the
businesses in which the Company and its Subsidiaries are engaged. Neither the
Company nor any such Subsidiary has been refused any insurance coverage sought
or applied for and neither the Company nor any such Subsidiary has any reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would reasonably be
expected to have a Material Adverse Effect.

 

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(n) Regulatory Permits. The Company and its Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct their respective
businesses as currently conducted, except where the failure to so possess such
certificates, authorizations or permits could not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect. Neither the
Company nor any such Subsidiary has received any notice of proceedings relating
to the revocation or modification of any such material certificate,
authorization or permit.
(o) Tax Status. The Company and each of its Subsidiaries has made or filed all
federal and state income and all other material tax returns, reports and
declarations required by any jurisdiction to which it is subject (unless and
only to the extent that the Company and each of its Subsidiaries has set aside
on its books reserves reasonably adequate for the payment of all unpaid and
unreported taxes) and 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 has set aside on its books reserves reasonably adequate for the payment of
all taxes for periods subsequent to the periods to which such returns, reports
or declarations apply. There are no unpaid taxes in any material amount claimed
to be due by the taxing authority of any jurisdiction.
(p) Transactions With Affiliates. Except as set forth on Schedule 3(p), and
other than the grant or exercise of stock options or any other equity securities
offered pursuant to a stockholder approved stock or incentive compensation plans
as disclosed on Schedule 3(c), none of the officers, directors, or employees of
the Company is presently a party to any transaction with the Company or any of
its Subsidiaries (other than for services as employees, officers and directors
and reimbursement for expenses incurred on behalf of the Company), 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 officer, director or such
employee or, to the knowledge of the Company, any corporation, partnership,
trust or other entity in which any officer, director, or any such employee has a
material interest or is an officer, director, trustee or general partner.
(q) Application of Takeover Protections. The Company and its board of directors
have taken or will take prior to the Commencement Date all necessary action, if
any, in order to render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Certificate of Incorporation
or the laws of the state of its incorporation which is or could become
applicable to the Buyer as a result of the transactions contemplated by this
Agreement, including, without limitation, the Company’s issuance of the
Securities and the Buyer’s ownership of the Securities.

  4.  
COVENANTS.

(a) Filing of Form 8-K and Registration Statement. The Company agrees that it
shall, within the time required under the 1934 Act, file a Current Report on
Form 8-K (or disclose under Item 5 of Form 10-Q) disclosing this Agreement and
the transaction contemplated hereby. The Company shall also file within twenty
(20) Business Days from the date hereof a registration statement covering the
sale of the Securities by the Buyer in accordance with the terms of the
Registration Rights Agreement between the Company and the Buyer, dated as of the
date hereof (the “Registration Rights Agreement”).

 

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(b) Blue Sky. The Company shall take such action, if any, as is reasonably
necessary in order to obtain an exemption for or to qualify (i) the initial sale
of the Securities to the Buyer under this Agreement and (ii) any subsequent sale
of the Securities by the Buyer, in each case, under applicable securities or
“Blue Sky” laws of the states of the United States in such states as is
reasonably requested by the Buyer from time to time, and shall provide evidence
of any such action so taken to the Buyer.
(c) Listing. The Company shall promptly secure the listing of all of the
Securities upon each national securities exchange and automated quotation system
that requires Company application for listing, if any, upon which shares of
Common Stock are then listed (subject to official notice of issuance) and shall
maintain such listing so long as any other shares of Common Stock shall be so
listed. The Company shall maintain the Common Stock’s listing on the Principal
Market in accordance with the requirements of the Registration Rights Agreement.
Neither the Company nor any of its Subsidiaries shall take any action that would
be reasonably expected to result in the delisting or suspension of the Common
Stock on the Principal Market, unless the Common Stock is immediately thereafter
traded on the New York Stock Exchange, the Nasdaq Global Select Market, the
Nasdaq Global Market, the NYSE Amex Equities, or the OTC Bulletin Board. The
Company shall pay all fees and expenses in connection with satisfying its
obligations under this Section.
(d) Limitation on Short Sales and Hedging Transactions. The Buyer agrees that
beginning on the date of this Agreement and ending on the date of termination of
this Agreement as provided in Section 11(k), the Buyer and its agents,
representatives and affiliates shall not in any manner whatsoever enter into or
effect, directly or indirectly, any (i) “short sale” (as such term is defined in
Section 242.200 of Regulation SHO of the 1934 Act) of the Common Stock or (ii)
hedging transaction, which establishes a net short position with respect to the
Common Stock.
(e) Issuance of Commitment Shares and Initial Purchase Shares. Immediately upon
the execution of this Agreement, the Company shall issue to the Buyer, as
consideration for the Buyer entering into this Agreement, 266,667 shares of
Common Stock (the “Commitment Shares”), and, pursuant to Section 1(a) the Buyer
shall purchase the Initial Purchase Shares. The Commitment Shares and Initial
Purchase Shares shall be issued in certificated form and (subject to Section 5
hereof) shall bear the following restrictive legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, UNLESS SOLD PURSUANT TO: (1) RULE 144 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR (2) AN OPINION OF HOLDER’S COUNSEL,
IN A CUSTOMARY FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE STATE SECURITIES LAWS.

 

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(f) Due Diligence. The Buyer shall have the right, from time to time as the
Buyer may reasonably deem appropriate, to perform reasonable due diligence on
the Company during normal business hours. The Company and its officers and
employees shall provide information and reasonably cooperate with the Buyer in
connection with any reasonable request by the Buyer related to the Buyer’s due
diligence of the Company, including, but not limited to, any such request made
by the Buyer in connection with (i) the filing of the registration statement
described in Section 4(a) hereof and (ii) the Commencement; provided, however,
that at no time is the Company required or permitted to disclose material
nonpublic information to the Buyer or the breach of any obligation of
confidentiality or non-disclosure to a third party. Each party hereto agrees not
to disclose any Confidential Information of the other party to any third party
and shall not use the Confidential Information of such other party for any
purpose other than in connection with, or in furtherance of, the transactions
contemplated hereby. Each party hereto acknowledges that the Confidential
Information shall remain the property of the disclosing party and agrees that it
shall take all reasonable measures to protect the secrecy of any Confidential
Information disclosed by the other party.
(g) Disposition of Securities. The Buyer shall not sell any Securities except as
provided in this Agreement, the Registration Rights Agreement and the “Plan of
Distribution” section of the prospectus included in the Registration Statement.
The Buyer shall not transfer any Securities except pursuant to sales described
in the “Plan of Distribution” section of the prospectus included in the
Registration Statement or pursuant to Rule 144 under the 1933 Act. In the event
of any sales of Securities pursuant to the Registration Statement, the Buyer
will (i) effect such sales pursuant to the “Plan of Distribution” section of the
prospectus included in the Registration Statement, and (ii) will comply with all
applicable prospectus delivery requirements.

  5.  
TRANSFER AGENT INSTRUCTIONS.

Immediately upon the execution of this Agreement, the Company shall deliver to
the Transfer Agent a letter in the form as set forth as Exhibit D attached
hereto with respect to the issuance of the Commitment Shares and Initial
Purchase Shares. On the Commencement Date, the Company shall cause any
restrictive legend on the Commitment Shares and Initial Purchase Shares to be
removed upon surrender of the originally issued certificate(s) for such shares.
So long as the Buyer complies with its obligations in Section 4(g), all of the
Purchase Shares, other than the Initial Purchase Shares, to be issued under this
Agreement shall be issued without any restrictive legend unless the Buyer
expressly consents otherwise. The Company shall issue irrevocable instructions
to the Transfer Agent, and any subsequent transfer agent, to issue Common Stock
in the name of the Buyer for the Purchase Shares (the “Irrevocable Transfer
Agent Instructions”). The Company warrants to the Buyer that so long as the
Buyer complies with its obligations in Section 4(g), no instruction other than
the Irrevocable Transfer Agent Instructions referred to in this Section 5 will
be given by the Company to the Transfer Agent with respect to the Purchase
Shares and that the Commitment Shares and the Purchase Shares shall otherwise be
freely transferable on the books and records of the Company as and to the extent
provided in this Agreement and the Registration Rights Agreement, subject to the
provisions of Section 4(e) in the case of the Commitment Shares and Initial
Purchase Shares and Section 4(g).

 

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  6.  
CONDITIONS TO THE COMPANY’S RIGHT TO COMMENCE SALES OF SHARES OF COMMON STOCK
UNDER THIS AGREEMENT.

The right of the Company hereunder to commence sales of the Purchase Shares
(other than the Initial Purchase Shares) is subject to the satisfaction of each
of the following conditions on or before the Commencement Date (the date that
the Company may begin sales):

  (a)  
The Buyer shall have executed each of the Transaction Documents and delivered
the same to the Company;

  (b)  
The representations and warranties of the Buyer shall be true and correct and
the Buyer shall have performed, satisfied and complied in all material respects
with the covenants and agreements required by the Transaction Documents to be
performed, satisfied or complied with by the Buyer at or prior to the
Commencement Date; and

  (c)  
A registration statement covering the sale of the Securities by the Buyer shall
have been declared effective under the 1933 Act by the SEC and no stop order
with respect to the registration statement shall be pending or threatened by the
SEC.

  7.  
CONDITIONS TO THE BUYER’S OBLIGATION TO MAKE PURCHASES OF SHARES OF COMMON
STOCK.

The obligation of the Buyer to buy Purchase Shares (other than the Initial
Purchase Shares) under this Agreement is subject to the satisfaction of each of
the following conditions on or before the Commencement Date (the date that the
Company may begin sales of Purchase Shares other than Initial Purchase Shares)
and once such conditions have been initially satisfied, there shall not be any
ongoing obligation to satisfy such conditions after the Commencement has
occurred:
(a) The Company shall have executed each of the Transaction Documents and
delivered the same to the Buyer;
(b) The Company shall have issued to the Buyer the Commitment Shares and Initial
Purchase Shares and, in the event that the Buyer shall have surrendered the
originally issued certificate(s), shall have removed the restrictive transfer
legend from the certificate representing the Commitment Shares and Initial
Purchase Shares;
(c) The Common Stock shall be authorized for listing on the Principal Market,
trading in the Common Stock shall not have been within the last 365 days
suspended by the SEC or the Principal Market, other than a general halt in
trading in the Common Stock by the Principal Market under halt codes indicating
pending or released material news, and the Securities shall be approved for
listing upon the Principal Market;
(d) The Buyer shall have received the opinion of the Company’s legal counsel
dated as of the Commencement Date in customary form and substance;
(e) The representations and warranties of the Company shall be true and correct
in all material respects (except to the extent that any of such representations
and warranties is already qualified as to materiality in Section 3 above, in
which case, such representations and warranties shall be true and correct
without further qualification) as of the date of this Agreement and as of the
Commencement Date as though made at that time (except for representations and
warranties that speak as of a specific date, which shall be true and correct in
all material respects as of such specific date) and the Company shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by the Transaction Documents to be performed,
satisfied or complied with by the Company at or prior to the Commencement Date.
The Buyer shall have received a certificate, executed by the CEO, President or
CFO of the Company, dated as of the Commencement Date, to the foregoing effect
in the form attached hereto as Exhibit A;

 

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(f) The Board of Directors of the Company or a duly authorized committee thereof
shall have adopted resolutions substantially in the form attached hereto as
Exhibit B, which shall be in full force and effect without any amendment or
supplement thereto as of the Commencement Date;
(g) As of the Commencement Date, the Company shall have reserved out of its
authorized and unissued Common Stock, solely for the purpose of effecting
purchases of Purchase Shares hereunder, at least 8,000,000 shares of Common
Stock;
(h) The Irrevocable Transfer Agent Instructions, in form acceptable to the Buyer
shall have been delivered to and acknowledged in writing by the Company and the
Company’s Transfer Agent;
(i) The Company shall have delivered to the Buyer a certificate evidencing the
incorporation and good standing of the Company in the State of Delaware issued
by the Secretary of State of the State of Delaware as of a date within ten
(10) Business Days of the Commencement Date;
(j) The Company shall have delivered to the Buyer a certified copy of the
Certificate of Incorporation, as certified by the Secretary of State of the
State of Delaware within ten (10) Business Days of the Commencement Date;
(k) The Company shall have delivered to the Buyer a secretary’s certificate
executed by the Secretary of the Company, dated as of the Commencement Date, in
the form attached hereto as Exhibit C;
(l) A registration statement covering the sale of (i) all of the Commitment
Shares, (ii) all of the Initial Purchase Shares, and (iii) such number of
additional Purchase Shares as reasonably determined by the Company shall have
been declared effective under the 1933 Act by the SEC and no stop order with
respect thereto shall be pending or threatened by the SEC. The Company shall
have prepared and delivered to the Buyer a final and complete form of
prospectus, dated and current as of the Commencement Date, to be used by the
Buyer in connection with any sales of any Securities, and to be filed by the
Company one (1) Business Day after the Commencement Date pursuant to Rule
424(b). The Company shall have made all filings under all applicable federal and
state securities laws necessary to consummate the issuance of the Commitment
Shares and the Purchase Shares pursuant to this Agreement in compliance with
such laws;
(m) No Event of Default has occurred and is continuing, or any event which,
after notice and/or lapse of time, would become an Event of Default has
occurred;

 

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(n) On or prior to the Commencement Date, the Company shall take all necessary
action, if any, and such actions as reasonably requested by the Buyer, in order
to render inapplicable any control share acquisition, business combination,
stockholder rights plan or poison pill (including any distribution under a
rights agreement) or other similar anti-takeover provision under the Certificate
of Incorporation or the laws of the state of its incorporation that is or could
become applicable to the Buyer as a result of the transactions contemplated by
this Agreement, including, without limitation, the Company’s issuance of the
Securities and the Buyer’s ownership of the Securities; and
(o) The Company shall have provided the Buyer with the information reasonably
requested by the Buyer in connection with its due diligence requests made prior
to, or in connection with, the Commencement, in accordance with the terms of
Section 4(f) hereof.

  8.  
INDEMNIFICATION.

In consideration of the Buyer’s execution and delivery of the Transaction
Documents and acquiring the Securities hereunder and in addition to all of the
Company’s other obligations under the Transaction Documents, the Company shall
defend, protect, indemnify and hold harmless the Buyer and all of its
affiliates, members, officers, directors, and employees, and any of the
foregoing person’s agents or other representatives (including, without
limitation, those retained in connection with the transactions contemplated by
this Agreement) (collectively, the “Indemnitees”) from and against any and all
actions, causes of action, suits, claims, losses, costs, penalties, fees,
liabilities and damages, and expenses in connection therewith (irrespective of
whether any such Indemnitee is a party to the action for which indemnification
hereunder is sought), and including reasonable attorneys’ fees and disbursements
(the “Indemnified Liabilities”), incurred by any Indemnitee as a result of, or
arising out of, or relating to (a) any misrepresentation or breach of any
representation or warranty made by the Company in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby,
(b) any breach 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 (c) any cause of action, suit or claim
brought or made against such Indemnitee and arising out of or resulting from the
execution, delivery, performance or enforcement of the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby,
other than with respect to Indemnified Liabilities which directly and primarily
result from (A) a breach of any of the Buyer’s representations and warranties,
covenants or agreements contained in this Agreement, or (B) the gross
negligence, bad faith or willful misconduct of the Buyer or any other
Indemnitee. To the extent that the foregoing undertaking by the Company may be
unenforceable for any reason, the Company shall make the maximum contribution to
the payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law.

 

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  9.  
EVENTS OF DEFAULT.

An “Event of Default” shall be deemed to have occurred at any time as any of the
following events occurs:
(a) while any registration statement is required to be maintained effective
pursuant to the terms of the Registration Rights Agreement, the effectiveness of
such registration statement lapses for any reason (including, without
limitation, the issuance of a stop order) or is unavailable to the Buyer for
sale of all of the Registrable Securities (as defined in the Registration Rights
Agreement), and such lapse or unavailability continues for a period of ten
(10) consecutive Business Days or for more than an aggregate of thirty
(30) Business Days in any 365-day period, which is not in connection with a
post-effective amendment to any such registration statement; provided, however,
that in connection with any post-effective amendment to such registration
statement that is required to be declared effective by the SEC, such lapse or
unavailability may continue for a period of no more than thirty (30) consecutive
Business Days, which such period shall be extended for an additional thirty
(30) Business Days if the Company receives a comment letter from the SEC in
connection therewith;
(b) the suspension from trading or failure of the Common Stock to be listed on a
Principal Market for a period of three (3) consecutive Business Days;
(c) the delisting of the Common Stock from the Principal Market, provided,
however, that the Common Stock is not immediately thereafter trading on the New
York Stock Exchange, the Nasdaq Global Select Market, the Nasdaq Global Market,
the NYSE Amex Equities, or the OTC Bulletin Board;
(d) the failure for any reason by the Transfer Agent to issue Purchase Shares to
the Buyer which the Buyer is entitled to receive within five (5) Business Days
after the applicable Purchase Date;
(e) the Company’s breach of any representation, warranty, covenant or other term
or condition under any Transaction Document if such breach would reasonably be
expected to have a Material Adverse Effect and except, in the case of a breach
of a covenant which is reasonably curable, only if such breach continues for a
period of at least five (5) Business Days;
(f) if any Person commences a proceeding against the Company pursuant to or
within the meaning of any Bankruptcy Law;
(g) if the Company pursuant to or within the meaning of any Bankruptcy Law;
(A) commences a voluntary case, (B) consents to the entry of an order for relief
against it in an involuntary case, (C) consents to the appointment of a
Custodian of it or for all or substantially all of its property, (D) makes a
general assignment for the benefit of its creditors, or (E) becomes insolvent;
or
(h) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that (A) is for relief against the Company in an involuntary
case, (B) appoints a Custodian of the Company or for all or substantially all of
its property, or (C) orders the liquidation of the Company or any Subsidiary.

 

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In addition to any other rights and remedies under applicable law and this
Agreement, including the Buyer termination rights under Section 11(k) hereof, so
long as an Event of Default has occurred and is continuing, or if any event
which, after notice and/or lapse of time, would become an Event of Default, has
occurred and is continuing, or so long as the Closing Sale Price is below the
Floor Price, the Company may not require and the Buyer shall not be obligated or
permitted to purchase any shares of Common Stock under this Agreement. If
pursuant to or within the meaning of any Bankruptcy Law, the Company commences a
voluntary case or any Person commences a proceeding against the Company, a
Custodian is appointed for the Company or for all or substantially all of its
property, or the Company makes a general assignment for the benefit of its
creditors, (any of which would be an Event of Default as described in
Sections 9(f), 9(g) and 9(h) hereof) this Agreement shall automatically
terminate without any liability or payment to the Company without further action
or notice by any Person. No such termination of this Agreement under
Section 11(k)(i) shall affect the Company’s or the Buyer’s obligations under
this Agreement with respect to pending purchases and the Company and the Buyer
shall complete their respective obligations with respect to any pending
purchases under this Agreement.

  10.  
CERTAIN DEFINED TERMS.

For purposes of this Agreement, the following terms shall have the following
meanings:
(a) “1933 Act” means the Securities Act of 1933, as amended.
(b) “Available Amount” means initially Twenty Million Dollars ($20,000,000) in
the aggregate, which amount shall be reduced by the Purchase Amount each time
the Buyer purchases shares of Common Stock pursuant to Section 1 hereof.
(c) “Bankruptcy Law” means Title 11, U.S. Code, or any similar federal or state
law for the relief of debtors.
(d) “Business Day” means any day on which the Principal Market is open for
trading during normal trading hours (i.e., 9:30 a.m. to 4:00 p.m. Eastern Time),
including any day on which the Principal Market is open for trading for a period
of time less than the customary time.
(e) “Closing Sale Price” means the last closing trade price for the Common Stock
on the Principal Market during normal trading hours, as reported by the
Principal Market.
(f) “Confidential Information” means any information disclosed by either party
to the other party, either directly or indirectly, in writing, orally or by
inspection of tangible objects (including, without limitation, documents,
prototypes, samples, plant and equipment), which is designated as
“Confidential,” “Proprietary” or some similar designation. Information
communicated orally shall be considered Confidential Information if such
information is confirmed in writing as being Confidential Information within ten
(10) Business Days after the initial disclosure. Confidential Information may
also include information disclosed to a disclosing party by third parties.
Confidential Information shall not, however, include any information which
(i) was publicly known and made generally available in the public domain prior
to the time of disclosure by the disclosing party; (ii) becomes publicly known
and made generally available after disclosure by the disclosing party to the
receiving party through no action or inaction of the receiving party; (iii) is
already in the possession of the receiving party at the time of disclosure by
the disclosing party as shown by the receiving party’s files and records
immediately prior to the time of disclosure; (iv) is obtained by the receiving
party from a third party without a breach of such third party’s obligations of
confidentiality; (v) is independently developed by the receiving party without
use of or reference to the disclosing party’s Confidential Information, as shown
by documents and other competent evidence in the receiving party’s possession;
or (vi) is required by law to be disclosed by the receiving party, provided that
the receiving party gives the disclosing party prompt written notice of such
requirement prior to such disclosure and assistance in obtaining an order
protecting the information from public disclosure.

 

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(g) “Custodian” means any receiver, trustee, assignee, liquidator or similar
official under any Bankruptcy Law.
(h) “Maturity Date” means the date that is twenty-four (24) months from the
Commencement Date.
(i) “Person” means an individual or entity including any limited liability
company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization and a government or any department or agency
thereof.
(j) “Principal Market” means the Nasdaq Capital Market; provided however, that
in the event the Company’s Common Stock is ever listed or traded on the Nasdaq
Global Select Market, the Nasdaq Global Market, the New York Stock Exchange, the
NYSE Amex Equities or the OTC Bulletin Board, then the “Principal Market” shall
mean such other market or exchange on which the Company’s Common Stock is then
listed or traded.
(k) “Purchase Amount” means, with respect to any particular purchase made
hereunder, the portion of the Available Amount to be purchased by the Buyer
pursuant to Section 1 hereof as set forth in a valid Purchase Notice or VWAP
Purchase Notice which the Company delivers to the Buyer.
(l) “Purchase Date” means with respect to any Regular Purchase made hereunder,
the Business Day of receipt by the Buyer of a valid Purchase Notice that the
Buyer is to buy Purchase Shares pursuant to Section 1(b) hereof.
(m) “Purchase Notice” shall mean an irrevocable written notice from the Company
to the Buyer directing the Buyer to buy Purchase Shares pursuant to Section 1(b)
hereof as specified by the Company therein at the applicable Purchase Price on
the Purchase Date.
(n) “Purchase Price” means the lower of (i) the lowest Sale Price of the Common
Stock on the Purchase Date on the Principal Market during normal trading hours
or (ii) the arithmetic average of the three (3) lowest Closing Sale Prices for
the Common Stock on the Principal Market during the twelve (12) consecutive
Business Days ending on the Business Day immediately preceding such Purchase
Date (to be appropriately adjusted for any reorganization, recapitalization,
non-cash dividend, stock split, reverse stock split or other similar
transaction).
(o) “Sale Price” means any trade price for the shares of Common Stock on the
Principal Market during normal trading hours, as reported by the Principal
Market.
(p) “SEC” means the United States Securities and Exchange Commission.
(q) “Transfer Agent” means the transfer agent of the Company as set forth in
Section 11(f) hereof or such other person who is then serving as the transfer
agent for the Company in respect of the Common Stock.

 

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(r) “VWAP Minimum Price Threshold” means, with respect to any particular VWAP
Purchase Notice, the Sale Price on the VWAP Purchase Date equal to the greater
of (i) 90% of the Closing Sale Price on the Business Day immediately preceding
the VWAP Purchase Date or (ii) such higher price as set forth by the Company in
the VWAP Purchase Notice.
(s) “VWAP Purchase Amount” means, with respect to any particular VWAP Purchase
Notice, the portion of the Available Amount to be purchased by the Buyer
pursuant to Section 1(c) hereof as set forth in a valid VWAP Purchase Notice
which requires the Buyer to buy the VWAP Purchase Share Percentage of the
aggregate shares traded on the Principal Market during normal trading hours on
the VWAP Purchase Date up to the VWAP Purchase Share Volume Maximum, subject to
the VWAP Minimum Price Threshold.
(t) “VWAP Purchase Date” means, with respect to any VWAP Purchase made
hereunder, the Business Day following the receipt by the Buyer of a valid VWAP
Purchase Notice that the Buyer is to buy Purchase Shares pursuant to Section
1(c) hereof.
(u) “VWAP Purchase Notice” shall mean an irrevocable written notice from the
Company to the Buyer directing the Buyer to buy Purchase Shares on the VWAP
Purchase Date pursuant to Section 1(c) hereof as specified by the Company
therein at the applicable VWAP Purchase Price with the applicable VWAP Purchase
Share Percentage specified therein.
(v) “VWAP Purchase Share Percentage” means, with respect to any particular VWAP
Purchase Notice pursuant to Section 1(c) hereof, the percentage set forth in the
VWAP Purchase Notice which the Buyer will be required to buy as a specified
percentage of the aggregate shares traded on the Principal Market during normal
trading hours up to the VWAP Purchase Share Volume Maximum on the VWAP Purchase
Date subject to Section 1(c) hereof but in no event shall this percentage exceed
a maximum of thirty percent (30%) of such VWAP Purchase Date’s share trading
volume of the Common Stock on the Principal Market during normal trading hours.
(w) “VWAP Purchase Price” means the lower of (i) ninety-five percent (95%) of
volume weighted average price for the Common Stock traded on the Principal
Market during normal trading hours on (A) the VWAP Purchase Date if the
aggregate shares traded on the Principal Market on the VWAP Purchase Date have
not exceeded the VWAP Purchase Share Volume Maximum, or (B) the portion of the
VWAP Purchase Date until such time as the sooner to occur of (1) the time at
which the aggregate shares traded on the Principal Market has exceeded the VWAP
Purchase Share Volume Maximum, or (2) the time at which the sale price of Common
Stock falls below the VWAP Minimum Price Threshold; or (ii) the Closing Sale
Price on the VWAP Purchase Date (to be appropriately adjusted for any
reorganization, recapitalization, non-cash dividend, stock split, reverse stock
split or other similar transaction).
(x) “VWAP Purchase Share Estimate” means the number of shares of Common Stock
that the Company has in its sole discretion irrevocably instructed its Transfer
Agent to issue to the Buyer via the Depository Trust Company (“DTC”) Fast
Automated Securities Transfer Program in connection with a VWAP Purchase Notice
pursuant to Section 1(c) hereof and issued to the Buyer’s or its designee’s
balance account with DTC through its Deposit Withdrawal At Custodian
(DWAC) system on the VWAP Purchase Date (to be appropriately adjusted for any
reorganization, recapitalization, non-cash dividend, stock split, reverse stock
split or other similar transaction).

 

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(y) “VWAP Purchase Share Volume Maximum” means a number of shares of Common
Stock traded on the Principal Market during normal trading hours on the VWAP
Purchase Date equal to: (i) the VWAP Purchase Share Estimate, divided by
(ii) the VWAP Purchase Share Percentage (to be appropriately adjusted for any
reorganization, recapitalization, non-cash dividend, stock split, reverse stock
split or other similar transaction).

  11.  
MISCELLANEOUS.

(a) Governing Law; Jurisdiction; 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 other questions concerning the construction, validity,
enforcement and interpretation of this Agreement and the other Transaction
Documents shall be governed by the internal laws of the State of Illinois,
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of Illinois or any other jurisdictions) that would cause
the application of the laws of any jurisdictions other than the State of
Illinois. Each party hereby irrevocably submits to the exclusive jurisdiction of
the state and federal courts sitting in the City of Chicago, for the
adjudication of any dispute hereunder or under the other Transaction Documents
or in connection herewith or therewith, or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or
proceeding is brought in an inconvenient forum or that the venue of 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 to such party at the address for such
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. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY
HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR
ANY TRANSACTION CONTEMPLATED HEREBY.
(b) Counterparts. This Agreement may be executed in two or more identical
counterparts, all of which 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; provided that a facsimile or pdf (or other
electronic reproduction) signature shall be considered due execution and shall
be binding upon the signatory thereto with the same force and effect as if the
signature were an original, not a facsimile or pdf (or other electronic
reproduction) signature.
(c) Headings. The headings of this Agreement are for convenience of reference
and shall not form part of, or affect the interpretation of, this Agreement.
(d) Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.
(e) Entire Agreement. This Agreement and the Registration Rights Agreement
supersede all other prior oral or written agreements between the Buyer, the
Company, their affiliates and persons acting on their behalf with respect to the
matters discussed herein, and this Agreement, the other Transaction Documents
and the instruments referenced herein contain the entire understanding of the
parties with respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company nor the Buyer
makes any representation, warranty, covenant or undertaking with respect to such
matters. The Company acknowledges and agrees that is has not relied on, in any
manner whatsoever, any representations or statements, written or oral, other
than as expressly set forth in this Agreement.

 

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(f) Notices. Any notices, consents or other communications required or permitted
to be given under the terms of this Agreement must be in writing and will be
deemed to have been delivered: (i) upon receipt when delivered personally;
(ii) upon receipt when sent by facsimile (provided confirmation of transmission
is mechanically or electronically generated and kept on file by the sending
party); or (iii) one Business Day after deposit with a nationally recognized
overnight delivery service, in each case properly addressed to the party to
receive the same. The addresses and facsimile numbers for such communications
shall be:
If to the Company:
Athersys, Inc.
3201 Carnegie Avenue
Cleveland, Ohio 44115-2634
Telephone: 216-431-9900
Facsimile: 216-432-2461
Attention: Laura K. Campbell, Vice President of Finance
With a copy to:
Jones Day
901 Lakeside Avenue
Cleveland, Ohio 44114
Telephone: 216-586-7103
Facsimile: 216-579-0212
Attention: Michael J. Solecki
If to the Buyer:
Aspire Capital Fund, LLC
155 North Wacker Drive, Suite 1600
Chicago, IL 60606
Telephone: 312-658-0400
Facsimile: 312-658-4005
Attention: Steven G. Martin
With a copy to:
O’Melveny & Myers LLP
1625 Eye Street, NW
Washington, DC 20006
Telephone: 202-383-5418
Facsimile: 202-383-5414
Attention: Martin P. Dunn, Esq.

 

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If to the Transfer Agent:
Computershare Investor Services
250 Royall Street
Canton, MA 02021
Telephone: 781-575-4182
Facsimile: 781-575-2152
Attention: Kim Crimi
or at such other address and/or facsimile number and/or to the attention of such
other person as the recipient party has specified by written notice given to
each other party one (1) Business Day prior to the effectiveness of such change.
Written confirmation of receipt (A) given by the recipient of such notice,
consent or other communication, (B) mechanically or electronically generated by
the sender’s facsimile machine containing the time, date, and recipient
facsimile number or (C) provided by a nationally recognized overnight delivery
service, shall be rebuttable evidence of receipt in accordance with clause (i),
(ii) or (iii) above, respectively.
(g) Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns. The
Company shall not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Buyer, including by merger or
consolidation. The Buyer may not assign its rights or obligations under this
Agreement.
(h) No Third Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
person.
(i) Publicity. The Buyer shall have the right to approve before issuance any
press release, SEC filing or any other public disclosure made by or on behalf of
the Company whatsoever with respect to, in any manner, the Buyer, its purchases
hereunder or any aspect of this Agreement or the transactions contemplated
hereby; provided, however, that the Company shall be entitled, without the prior
approval of the Buyer, to make any press release or other public disclosure
(including any filings with the SEC) with respect to such transactions as is
required by applicable law and regulations so long as the Company and its
counsel consult with the Buyer in connection with any such press release or
other public disclosure at least one (1) Business Day prior to its release. The
Buyer must be provided with a copy thereof at least one (1) Business Day prior
to any release or use by the Company thereof.
(j) Further Assurances. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.
(k) Termination. This Agreement may be terminated only as follows:
(i) By the Buyer any time an Event of Default exists without any liability or
payment to the Company. However, if pursuant to or within the meaning of any
Bankruptcy Law, the Company commences a voluntary case or any Person commences a
proceeding against the Company, a Custodian is appointed for the Company or for
all or substantially all of its property, or the Company makes a general
assignment for the benefit of its creditors, (any of which would be an Event of
Default as described in Sections 9(f), 9(g) and 9(h) hereof) this Agreement
shall automatically terminate without any liability or payment to the Company
without further action or notice by any Person. No such termination of this
Agreement under this Section 11(k)(i) shall affect the Company’s or the Buyer’s
obligations under this Agreement with respect to pending purchases and the
Company and the Buyer shall complete their respective obligations with respect
to any pending purchases under this Agreement.

 

-22-

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(ii) In the event that the Commencement shall not have occurred, the Company
shall have the option to terminate this Agreement for any reason or for no
reason without any liability whatsoever of either party to the other party under
this Agreement except as set forth in Section 11(k)(viii) hereof.
(iii) In the event that the Commencement shall not have occurred on or before
March 1, 2012, due to the failure to satisfy any of the conditions set forth in
Sections 6 and 7 above with respect to the Commencement, either party shall have
the option to terminate this Agreement at the close of business on such date or
thereafter without liability of either party to any other party; provided,
however, that the right to terminate this Agreement under this
Section 11(k)(iii) shall not be available to either party if such failure to
satisfy any of the conditions set forth in Sections 6 and 7 is the result of a
breach of this Agreement by such party or the failure of any representation or
warranty of such party included in this Agreement to be true and correct in all
material respects.
(iv) At any time after the Commencement Date, the Company shall have the option
to terminate this Agreement for any reason or for no reason by delivering notice
(a “Company Termination Notice”) to the Buyer electing to terminate this
Agreement without any liability whatsoever of either party to the other party
under this Agreement except as set forth in Section 11(k)(viii) hereof. The
Company Termination Notice shall not be effective until one (1) Business Day
after it has been received by the Buyer.
(v) This Agreement shall automatically terminate on the date that the Company
sells and the Buyer purchases the full Available Amount as provided herein,
without any action or notice on the part of any party and without any liability
whatsoever of any party to any other party under this Agreement except as set
forth in Section 11(k)(viii) hereof.
(vi) If by the Maturity Date for any reason or for no reason the full Available
Amount under this Agreement has not been purchased as provided for in Section 1
of this Agreement, this Agreement shall automatically terminate on the Maturity
Date, without any action or notice on the part of any party and without any
liability whatsoever of any party to any other party under this Agreement except
as set forth in Section 11(k)(viii) hereof.
(vii) Except as set forth in Sections 11(k)(i) (in respect of an Event of
Default under Sections 9(f), 9(g) and 9(h)), 11(k)(v) and 11(k)(vi), any
termination of this Agreement pursuant to this Section 11(k) shall be effected
by written notice from the Company to the Buyer, or the Buyer to the Company, as
the case may be, setting forth the basis for the termination hereof.
(viii) The representations and warranties of the Company and the Buyer contained
in Sections 2, 3 and 5 hereof, the indemnification provisions set forth in
Section 8 hereof and the agreements and covenants set forth in Sections 4(e) and
11, shall survive the Commencement and any termination of this Agreement. No
termination of this Agreement shall affect the Company’s or the Buyer’s rights
or obligations (i) under the Registration Rights Agreement which shall survive
any such termination or (ii) under this Agreement with respect to pending
purchases and the Company and the Buyer shall complete their respective
obligations with respect to any pending purchases under this Agreement.

 

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(l) No Financial Advisor, Placement Agent, Broker or Finder. The Company
represents and warrants to the Buyer that it has not engaged any financial
advisor, placement agent, broker or finder in connection with the transactions
contemplated hereby. The Buyer represents and warrants to the Company that it
has not engaged any financial advisor, placement agent, broker or finder in
connection with the transactions contemplated hereby. Each party shall be
responsible for the payment of any fees or commissions, if any, of any financial
advisor, placement agent, broker or finder engaged by such party relating to or
arising out of the transactions contemplated hereby. Each party shall pay, and
hold the other party harmless against, any liability, loss or expense
(including, without limitation, attorneys’ fees and out of pocket expenses)
arising in connection with any such claim.
(m) No Strict Construction. 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.
(n) Failure or Indulgence Not Waiver. No failure or delay in the exercise of any
power, right or privilege hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other right, power or privilege.
* * * * *

 

-24-

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IN WITNESS WHEREOF, the Buyer and the Company have caused this Common Stock
Purchase Agreement to be duly executed as of the date first written above.

                  THE COMPANY:    
 
                ATHERSYS, INC.    
 
           
 
  By:   /s/ Gil Van Bokkelen
 
Name: Dr. Gil Van Bokkelen    
 
      Title: Chairman and Chief Executive Officer    
 
                BUYER:    
 
                ASPIRE CAPITAL FUND, LLC         BY: ASPIRE CAPITAL PARTNERS,
LLC         BY: SGM HOLDINGS CORP.    
 
           
 
  By:   /s/ Steven G. Martin
 
Name: Steven G. Martin    
 
      Title: President    

 

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      SCHEDULES
 
   
Schedule 3(a)
  Subsidiaries
Schedule 3(c)
  Capitalization
Schedule 3(e)
  Conflicts
Schedule 3(f)
  1934 Act Filings
Schedule 3(g)
  Material Changes
Schedule 3(h)
  Litigation
Schedule 3(j)
  Intellectual Property
Schedule 3(l)
  Liens
Schedule 3(p)
  Certain Transactions
 
    EXHIBITS

 
   
Exhibit A
  Form of Officer’s Certificate
Exhibit B
  Form of Resolutions of Board of Directors of the Company
Exhibit C
  Form of Secretary’s Certificate
Exhibit D
  Form of Letter to Transfer Agent

 

 

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DISCLOSURE SCHEDULES
Schedule 3(a) — Subsidiaries

     
Name of Subsidiary
  Jurisdiction
 
   
ABT Holding Company (formerly Athersys, Inc.)
  Delaware
 
   
Advanced Biotherapeutics, Inc.
  Delaware
 
   
Athersys Limited
  United Kingdom
 
   
ReGenesys LLC
  Delaware
 
   
ReGenesys BVBA
  Belgium

 

 

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

 

Schedule 3(c) — Capitalization

              1.  
Long-Term Incentive Plan and Equity Incentive Plan (shares of Common Stock
reserved for future issuance under outstanding awards)
    4,528,826      
 
        2.  
Long-Term Incentive Plan and Equity Incentive Plan (shares of Common Stock
reserved for future issuance)
    971,174      
 
        3.  
Shares of Common Stock issuable pursuant to other outstanding options
    1,075      
 
        4.  
Shares of Common Stock issuable upon exercise of outstanding warrants:
       

             
4,976,470
  $ 6.00     June 8, 2012  
149,026
  $ 5.00     June 8, 2014  
1,310,000
  $ 3.55     February 2, 2016
 
       
6,435,496
           
 
           

     
5.    Loan and Security Agreement, and Supplement, dated as of November 2, 2004,
by and among ABT Holding Company (formerly known as Athersys, Inc.), Advanced
Biotherapeutics, Inc., Venture Lending & Leasing IV, Inc., and Costella Kirsch
IV, L.P., as amended (the “Loan and Security Agreement”)
  Pursuant to the Loan and Security Agreement, former lenders retain a right to
receive a milestone payment equal to a portion of the amount from proceeds of
equity financings not tied to specific research and development activities that
are part of a research or development collaboration. In such case, the former
lenders will receive an amount equal to 10% of proceeds above $5.0 million in
cumulative gross proceeds up to $2.25 million. The Company may elect to pay 75%
of such a milestone in shares of Common Stock at the per-share offering price.

 

 

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

 

     
6.  Strategic Alliance Agreement, dated as of May 5, 2006, by and between ABT
Holding Company (formerly known as Athersys, Inc.) and Angiotech
Pharmaceuticals, Inc. (the “Strategic Alliance Agreement”)
  Pursuant to the Strategic Alliance Agreement, upon the achievement of certain
milestones, Angiotech Pharmaceuticals, Inc. will receive $5.0 million of shares
of Common Stock at a price per share equal to (i) the average closing price (the
arithmetic mean of the closing prices (for the twenty (20) days immediately
preceding the fifth trading day prior to the date of issuance) plus (ii) 12.5%
of the average closing price.
 
   
7.  Securities Purchase Agreement, dated as of June 8, 2007, by and among ABT
Holding Company (formerly known as Athersys, Inc.), Athersys, Inc. (formerly
known as BTHC VI, Inc.) and the Investors (as defined therein) (the “Securities
Purchase Agreement”)
  Pursuant to the Securities Purchase Agreement, the Investors purchased
13,000,000 shares of Common Stock and received five-year warrants to purchase an
aggregate of 3,250,000 shares of Common Stock. In addition, the lead investor
received additional five-year warrants to purchase an aggregate of 500,000
shares of Common Stock, the placement agents received five-year warrants to
purchase an aggregate of 1,093,525 shares of Common Stock and investors that
participated in a bridge financing in 2006 received five-year warrants to
purchase an aggregate of 132,945 shares of Common Stock (together, the
“Warrants”). Pursuant to the Securities Purchase Agreement, the Company agreed
to register the resale of the 13,000,000 shares of Common Stock and the shares
of Common Stock available for purchase upon exercise of the Warrants.

 

 

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

 

Schedule 3(e) — Conflicts
None.

 

 

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

 

Schedule 3(f) — 1934 Act Filings
None.

 

 

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

 

Schedule 3(g) — Material Changes
None, except as disclosed orally by the Company to the Buyer on November 4,
2011.

 

 

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

 

Schedule 3(h) — Litigation
None.

 

 

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

 

Schedule 3(j) — Intellectual Property
None regarding owning or possessing adequate rights.
One patent expires within two years: 1304-1-001DIV (US) 5,827,735 Pluripotent
Mesenchymal Stem Cells and Methods of Use Thereof; Expiration date 06-22-12

 

 

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

 

Schedule 3(l) — Liens
None.

 

 

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

 

Schedule 3(p) — Certain Transactions
Lee E. Babiss, a director of the Company, is the Executive Vice President of
Global Laboratory Services of PPD, Inc. (“PPD”), a contract research
organization, that provides contract research services to the Company. The
Company paid PPD $340,000 and $115,000 in 2010 and in the first nine months of
2011, respectively, for such services. Mr. Babiss receives no material direct or
indirect benefit from such transactions, which were undertaken in the ordinary
course of the Company’s business.

 

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EXHIBIT A
FORM OF OFFICER’S CERTIFICATE
This Officer’s Certificate (“Certificate”) is being delivered pursuant to
Section 7(e) of that certain Common Stock Purchase Agreement dated as of
November 11, 2011 (the “Common Stock Purchase Agreement”), by and between
ATHERSYS, INC., a Delaware corporation (the “Company”), and ASPIRE CAPITAL FUND,
LLC, an Illinois limited liability company (the “Buyer”). Terms used herein and
not otherwise defined shall have the meanings ascribed to them in the Common
Stock Purchase Agreement.
The undersigned, Dr. Gil Van Bokkelen, Chairman and Chief Executive Officer of
the Company, hereby certifies as follows:
1. I am the Chairman and Chief Executive Officer of the Company and make the
statements contained in this Certificate in such capacity and not personally;
2. The representations and warranties of the Company are true and correct in all
material respects (except to the extent that any of such representations and
warranties is already qualified as to materiality in Section 3 of the Common
Stock Purchase Agreement, in which case, such representations and warranties are
true and correct without further qualification) as of the date when made and as
of the Commencement Date as though made at that time (except for representations
and warranties that speak as of a specific date);
3. The Company has performed, satisfied and complied in all material respects
with covenants, agreements and conditions required by the Transaction Documents
to be performed, satisfied or complied with by the Company at or prior to the
Commencement Date.
4. The Company has not taken any steps, and does not currently expect to take
any steps, to seek protection pursuant to any Bankruptcy Law nor does the
Company or any of its Subsidiaries have any knowledge or reason to believe that
its creditors intend to initiate involuntary bankruptcy or insolvency
proceedings. The Company is financially solvent and is generally able to pay its
debts as they become due.
IN WITNESS WHEREOF, I have hereunder signed my name on this  _____  day of
November, 2011.

         
 
   

 
Dr. Gil Van Bokkelen, Chairman and Chief Executive Officer    

The undersigned as Secretary of ATHERSYS, INC., a Delaware corporation, hereby
certifies that Dr. Gil Van Bokkelen is the duly elected, appointed, qualified
and acting Chairman and Chief Executive Officer of ATHERSYS, INC. and that the
signature appearing above is his genuine signature.

         
 
   

 
William (B.J.) Lehmann, Jr., Secretary    

 

 

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EXHIBIT B
FORM OF COMPANY RESOLUTIONS
FOR SIGNING PURCHASE AGREEMENT
AND REGISTRATION STATEMENT
WHEREAS, the Board of Directors (the “Board”) of Athersys, Inc., a Delaware
corporation (the “Company”), believes it is in the best interests of the Company
to enter into a Common Stock Purchase Agreement (the “Purchase Agreement”) by
and between the Company and Aspire Capital Fund, LLC (“Aspire”), providing for
the purchase by Aspire of up to Twenty Million Dollars ($20,000,000) (the
“Available Amount”) of the Company’s common stock, par value $0.001 per share
(“Common Stock”);
Offering of Securities
NOW THEREFORE, BE IT, RESOLVED, that the issuance of shares of Common Stock in
an amount up to 2% of the Available Amount to Aspire as a commitment fee (the
“Commitment Shares”) pursuant to the Purchase Agreement be, and hereby is,
authorized and approved;
RESOLVED FURTHER, that the issuance and sale of up to Twenty Million Dollars
($20,000,000) of Common Stock, to be made to Aspire pursuant to the terms and
conditions of the Purchase Agreement (the “Offering”) during the Commitment
Period (as hereinafter defined) be, and hereby is, authorized and approved;
RESOLVED FURTHER, that the issuance at any time and from time to time by the
Company of up to $20,000,000 of Common Stock (the “Purchase Shares,” and
together with the Commitment Shares, the “Securities”) in the Offering in
accordance with the terms of the Purchase Agreement for the period commencing on
the effective date of the Purchase Agreement and expiring on the earliest to
occur of (i) the date on which Aspire has purchased the Purchase Securities,
(ii) the date the Purchase Agreement is terminated in accordance with its terms
and (iii) the date twenty-four (24) months after the effective date of the
Purchase Agreement (the “Commitment Period”) be, and hereby is, authorized and
approved;
RESOLVED FURTHER, that the Company does hereby initially reserve an aggregate of
shares of Common Stock for issuance as Purchase Shares under the Purchase
Agreement in an amount equal to $20,000,000, with such number of shares to be
determined by the Pricing Committee (as defined below);
RESOLVED FURTHER, that upon the issuance of the Commitment Shares pursuant to
the terms and conditions of the Purchase Agreement, the Commitment Shares will
be validly issued, fully paid and nonassessable;
RESOLVED FURTHER, that, upon the issuance and sale of the Purchase Shares in the
Offering in accordance with the terms of the Purchase Agreement, the Purchase
Shares will be validly issued, fully paid and nonassessable;
RESOLVED FURTHER, that the issuance and sale by the Company of a number of
Purchase Shares to be approved by the Pricing Committee (the “Initial Purchase
Shares”) for consideration of One Million Dollars ($1,000,000), on the date of
the Purchase Agreement, be, and hereby is, authorized and approved; and that,
upon the issuance and sale of the Initial Purchase Shares in accordance with the
terms of the Purchase Agreement, the Initial Purchase Shares will be validly
issued, fully paid and nonassessable;

 

 

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

 

RESOLVED FURTHER, that the Pricing Committee of the Board consisting of Lorin J.
Randall, Jack L. Wyszomierski and Gil Van Bokkelen or any duly appointed
successor thereto (the “Pricing Committee”) be, and hereby is, authorized, from
time to time during the Commitment Period, to exercise all of the powers of the
Board in connection with the Offering and any and all matters incident thereto,
including without limitation, the power and/or authority to determine the timing
of the Offering and amount of Purchase Shares to be issued and sold from time to
time, and to prepare or cause to be prepared and to execute and deliver or cause
to be executed and delivered Purchase Notices and VWAP Purchase Notices (each as
defined in the Purchase Agreement), in accordance with the terms of the Purchase
Agreement, and all other notices, demands, requests, consents, approvals or
other communications in connection with the Offering as the Pricing Committee
deems necessary, advisable or appropriate to effectuate the issuance and sale of
the Purchase Shares as contemplated in the foregoing resolutions;
RESOLVED FURTHER, that any action as may have been taken or caused to be taken
by any of the Chief Executive Officer, President, Chief Operating Officer, Vice
President, Finance, Secretary or any Assistant Secretary of the Company (each,
an “Authorized Officer” and collectively, the “Authorized Officers”) prior to
the date of these resolutions of the Board, which action was in connection with
or related to the Offering, be, and hereby is, ratified, approved and confirmed
in all respects as the act and deed of the Company; and
RESOLVED FURTHER, that the Authorized Officers be, and each of them hereby is,
authorized to take such actions (including filings with all necessary
governmental or regulatory agencies) as the Authorized Officers or any of them
may deem necessary, advisable or appropriate to effectuate the issuance and sale
of the Securities as contemplated in the foregoing resolutions.
Authorization of Common Stock Purchase Agreement
RESOLVED, that the Company, be and hereby is, authorized to enter into, and
perform its obligations under, the Purchase Agreement, the form of which has
previously been provided to the Board; and
RESOLVED FURTHER, that the Authorized Officers, be, and each of them hereby is,
authorized, empowered and directed to further negotiate, fix and approve the
terms of the Purchase Agreement and to execute and deliver the Purchase
Agreement in the name and on behalf of the Company, in such form or with such
changes therein, additions thereto or omissions therefrom as such Authorized
Officers or any of them may approve, the execution and delivery of the Purchase
Agreement by any such officer to be conclusive evidence of such approval.
Authorization of Registration Rights Agreement
RESOLVED, that the Company be, and hereby is, authorized to enter into, and
perform its obligations under, a registration rights agreement (the
“Registration Rights Agreement”), between the Company and Aspire, the form of
which has previously been provided to the Board, pursuant to which the Company
shall grant the Aspire certain registration rights with respect to the
Securities issuable to Aspire pursuant to the Purchase Agreement; and

 

 

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RESOLVED FURTHER, that the Authorized Officers, be, and each of them hereby is,
authorized, empowered and directed to further negotiate, fix and approve the
terms of the Registration Rights Agreement and to execute and deliver the
Registration Rights Agreement in the name and on behalf of the Company, in such
form or with such changes therein, additions thereto or omissions therefrom as
such Authorized Officers or any of them may approve, the execution and delivery
of the Registration Rights Agreement by any such officer to be conclusive
evidence of such approval.
Authorization of Transfer Agent Instructions
RESOLVED, that the Company be, and hereby is, authorized to enter into, and
perform its obligations under the Transfer Agent Instructions (the
“Instructions”) the form of which has previously been provided to the Board,
pursuant to which the Company shall instruct the transfer agent with respect to
the Securities issuable to Aspire pursuant to the Purchase Agreement; and
RESOLVED FURTHER, that the Authorized Officers, be, and each of them hereby is,
authorized, empowered and directed to further negotiate, fix and approve the
terms of the Instructions and to execute and deliver the Instructions in the
name and on behalf of the Company, in such form or with such changes therein,
additions thereto or omissions therefrom as such Authorized Officers or any of
them may approve, the execution and delivery of the Instructions by any such
officer to be conclusive evidence of such approval.
Issuance of Common Stock to Venture Debt Lenders
RESOLVED, that, in accordance with the terms of the Loan and Security Agreement,
and Supplement, dated as of November 2, 2004, by and among ABT Holding Company
(formerly known as Athersys, Inc.), Advanced Biotherapeutics, Inc., Venture
Lending & Leasing IV, Inc., and Costella Kirsch IV, L.P., as amended (the “Loan
and Security Agreement”), the issuance of shares of Common Stock to pay the
Cumulative Equity Financing Payment (as defined in the Loan and Security
Agreement) in connection with the sale of the Purchase Shares to Aspire be, and
hereby is, authorized and approved in all respects; and
RESOLVED FURTHER, that, upon the issuance of the shares of Common Stock in
accordance with the terms of the Loan and Security Agreement, such shares of
Common Stock will be validly issued, fully paid and nonassessable.
Registration Statement on Form S-1
RESOLVED, that the Company and the Authorized Officers, and each of them, be,
and hereby are, for and on behalf of the Company, authorized, directed and
empowered to prepare or cause to be prepared a Registration Statement on Form
S-1 or such other form as the Company may be permitted to use (including the
prospectus, all financial statements, all exhibits and other documents relating
thereto) (the “Registration Statement”) in connection with the sale, from time
to time, by Aspire of the Securities (the “Resale Offering”);

 

 

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RESOLVED FURTHER, that all actions of the Authorized Officers, and each of them,
for and on behalf of the Company, in preparing and in directing Jones Day,
counsel to the Company, to prepare the Registration Statement (including the
prospectus, all exhibits and other documents relating thereto) (other than the
financial statements therein), and in preparing and in directing Ernst & Young
LLP, independent public accountants for the Company, to consent to the inclusion
of the financial statements in the Registration Statement, be, and hereby are,
ratified, confirmed and approved;
RESOLVED FURTHER, that the officers of the Company be, and each of them hereby
is, authorized, directed and empowered (a) to file the Registration Statement,
together with the financial statements and exhibits thereto, and to pay any fees
required in connection therewith, with the U.S. Securities and Exchange
Commission (the “Commission”) pursuant to the rules and regulations promulgated
under the Securities Act of 1933 (the “Securities Act”); (b) to file any and all
amendments and supplements thereto, including pre-effective and post-effective
amendments or supplements or any additional registration statement filed
pursuant to Rule 462 promulgated under the Securities Act, together with the
financial statements and exhibits required in connection therewith, with the
Commission in such form as such officers deem necessary, advisable or
appropriate; (c) to comply with the provisions of the Securities Act and of the
rules and regulations of the Commission thereunder; (d) to execute, deliver,
obtain and/or file any and all such other agreements, certificates, consents,
letters, instruments and other documents and to take any and all other actions,
necessary, advisable or appropriate to effect such filing and to procure the
effectiveness of the Registration Statement and any amendments with respect
thereto; and (e) to take all such other action as may be necessary, advisable or
appropriate to effect the registration of the Securities;
RESOLVED FURTHER, that the Authorized Officers be, and each of them hereby is,
authorized and directed to prepare or cause to be prepared, execute, in the name
and on behalf of the Company, procure all necessary signatures to, and file with
the Commission any requests for acceleration of the effective date of the
Registration Statement deemed by them to be necessary, advisable or appropriate,
with their approval of any such requests to be conclusively evidenced by their
execution thereof; and to appear on behalf of the Company before the Commission
in connection with any matter relating to the Registration Statement and any
supplements, amendments or post-effective amendments thereto; and
RESOLVED FURTHER, that Dr. Gil Van Bokkelen, Chief Executive Officer of the
Company, be, and hereby is, designated as agent for service of the Company, duly
authorized to receive communications and notices from the Commission with
respect to the Registration Statement.
Authorization of Power of Attorney
RESOLVED, that Gil Van Bokkelen, William Lehmann, Jr. and Laura K. Campbell be,
and each of them hereby is, appointed as the attorney-in-fact or
attorneys-in-fact of the Company, and any officer or director of the Company is
hereby authorized to execute a power of attorney appointing such persons, and
each of them, his true and lawful attorney, with full power of substitution or
resubstitution, to execute and file with the Commission under the Securities Act
the Registration Statement, with any and all amendments, supplements and
exhibits thereto, including pre-effective and post-effective amendments or
supplements or any additional registration statement filed pursuant to Rule 462
promulgated under the Securities Act, with full power and authority to do and
perform any and all acts and things whatsoever that any of said attorneys or
their substitutes may deem necessary, advisable or appropriate, in his or their
sole discretion, with any such act or thing being hereby ratified and approved
in all respects without any further act or deed whatsoever; and

 

 

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RESOLVED FURTHER, that the form of Power of Attorney, copies of which have
previously been distributed to the Board, is approved and ratified, and the
directors and officers of the Company are, and each of them hereby is,
authorized to execute and deliver the same in accordance with the preceding
resolutions.
Nasdaq Stock Market Listing
RESOLVED, that the Authorized Officers be, and each of them hereby is,
authorized and directed to prepare and execute or cause to be prepared and
executed, in the name and on behalf of the Company, a Notification of Listing of
Additional Shares (the “Notification”) for listing the Securities on the Nasdaq
Stock Market (the “Nasdaq”), including as the Authorized Officers or any of them
may deem necessary, advisable or appropriate, all amendments and supplements to
the Notification, and that the Authorized Officers or any of them and each of
his or her attorneys-in-fact, with full power to act without the others, is
hereby authorized, at such times as the Board, the Pricing Committee or another
committee of the Board may direct, to make application for such listing and, in
connection therewith, to execute, in the name and on behalf of the Company, and
to file or deliver, all such applications, statements, certificates, agreements
and other instruments and documents as shall be necessary, advisable or
appropriate to accomplish such listings, with authority to make such changes in
any such application or other document and in any agreement that may be made in
connection therewith as, in such Authorized Officer’s discretion, may be
necessary, advisable or appropriate to comply with the requirements for or
otherwise to obtain such listing; and that such Authorized Officers and
attorneys be, and each of them hereby is, authorized to appear on behalf of the
Company before the appropriate committee or body of the Nasdaq, as such
appearance may be required.
Blue Sky Procedures
RESOLVED, that the Authorized Officers be, and each of them hereby is,
authorized, in the name and on behalf of the Company, to take any and all
actions that such Authorized Officers or any of them may deem necessary,
advisable or appropriate in order to obtain a permit, register or qualify the
Securities for issuance and sale or to request an exemption from registration of
the Securities or to register or obtain a license for the Company as a dealer or
broker under the securities laws of such states of the United States of America
and of such foreign jurisdictions as such Authorized Officers or any of them may
deem necessary, advisable or appropriate, and in connection with such
registrations, permits, licenses, qualifications and exemptions, to execute,
acknowledge, verify, deliver, file and publish or cause to be published all such
applications, reports, resolutions, surety bonds, consents to service of
process, appointments of attorneys to receive service of process, powers of
attorney and other papers and instruments and to take any and all further action
that the Authorized Officers or any of them may deem necessary, advisable or
appropriate in order to maintain such registrations, permits, licenses,
qualifications and exemptions in effect for as long as they or any of them may
deem to be in the best interests of the Company or as required by law; and that
the execution by any such Authorized Officer of any such document or the taking
of any such action in connection with the foregoing matters shall be deemed to
be conclusive evidence that such Authorized Officer deems the taking of such
action to be necessary, advisable or appropriate and in the best interests of
the Company and approves such action; and

 

 

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FURTHER RESOLVED, that the Authorized Officers be, and each of them hereby is,
authorized, in the name and on behalf of the Company, to execute and file
irrevocable written consents on behalf of the Company to be sued in such states
of the United States of America wherein such consents to service of process may
be requisite under the securities laws thereof in connection with said
registration or qualification of the Securities or in connection with said
registration of the Company as a dealer or broker, and to appoint the
appropriate state official as agent of the Company for the purpose of receiving
and accepting process.
FINRA Filings
RESOLVED, that the Authorized Officers be, and each of them hereby is,
authorized and directed to prepare, execute and file, in the name and on behalf
of the Company, as the Authorized Officers or any of them may deem necessary,
advisable or appropriate, all such documents required to be filed, or to supply
the Agent with all necessary information to make such filings, and to pay all
filing fees in connection with any matter relating to any requirement of the
Financial Industry Regulatory Authority (“FINRA”), in connection with the
Offering and Resale Offering and shall have authority to make such changes in,
or take any further action with respect to, any document or matter relative
thereto as may be necessary to conform with the requirements for review by
FINRA.
General
RESOLVED, that the Authorized Officers be, and each of them hereby is,
authorized to certify as having been adopted by the Board, any and all other
resolutions necessary, advisable or appropriate to consummate the transactions
contemplated by the foregoing resolutions, provided that the Secretary of the
Company shall include a copy of any such resolutions certified pursuant to the
authority given in this resolution with the records of the Company;
RESOLVED FURTHER, that any and all actions previously taken or caused to be
taken by the directors or officers of the Company, or any of them, in connection
with any of the matters contemplated by any of the foregoing resolutions, are
hereby acknowledged to be duly authorized acts and deeds performed on behalf of
the Company and are hereby approved, adopted, accepted and ratified in all
respects; and
RESOLVED FURTHER, that the Authorized Officers be, and each of them hereby is,
authorized, empowered and directed, in the name and on behalf of the Company and
under its corporate seal where required, to execute and deliver such additional
agreements, instruments and documents, and to take or cause to be taken such
other actions, as the Authorized Officers or any of them may deem necessary,
advisable or appropriate to implement the purposes and intent of the foregoing
resolutions, each such agreement, instrument and document to be in such form and
to contain such terms and conditions, consistent with the foregoing resolutions,
as the Authorizing Officers executing the same may approve, the execution and
delivery of any such agreement, instrument or document by any such officer or
the taking of such action to be conclusive evidence of such authorization and
approval.

 

 

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EXHIBIT C
FORM OF SECRETARY’S CERTIFICATE
This Secretary’s Certificate (the “Certificate”) is being delivered pursuant to
Section 7(k) of that certain Common Stock Purchase Agreement dated as of
November 11, 2011 (the “Common Stock Purchase Agreement”), by and between
ATHERSYS, INC., a Delaware corporation (the “Company”) and ASPIRE CAPITAL FUND,
LLC, an Illinois limited liability company (the “Buyer”), pursuant to which the
Company may sell to the Buyer up to Twenty Million Dollars ($20,000,000) of the
Company’s Common Stock, par value $0.001 (the “Common Stock”). Terms used herein
and not otherwise defined shall have the meanings ascribed to them in the Common
Stock Purchase Agreement.
The undersigned, William (B.J.) Lehmann, Jr., Secretary of the Company, hereby
certifies as follows:
1. I am the Secretary of the Company and make the statements contained in this
Secretary’s Certificate.
2. Attached hereto as Exhibit A and Exhibit B are true, correct and complete
copies of the Company’s bylaws (“Bylaws”) and Certificate of Incorporation
(“Articles”), in each case, as amended through the date hereof, and no action
has been taken by the Company, its directors, officers or stockholders, in
contemplation of the filing of any further amendment relating to or affecting
the Bylaws or Articles.
3. Attached hereto as Exhibit C are true, correct and complete copies of the
Signing Resolutions duly adopted by the Board of Directors of the Company on
November 8, 2011 at which a quorum was present and acting throughout. Such
resolutions have not been amended, modified or rescinded and remain in full
force and effect and such resolutions are the only resolutions adopted by the
Company’s Board of Directors, or any committee thereof, or the stockholders of
the Company relating to or affecting (i) the entering into and performance of
the Common Stock Purchase Agreement, or the issuance, offering and sale of the
Purchase Shares and the Commitment Shares and (ii) and the performance of the
Company of its obligation under the Transaction Documents as contemplated
therein.
4. As of the date hereof, the authorized, issued and reserved capital stock of
the Company is as set forth on Exhibit D hereto.
IN WITNESS WHEREOF, I have hereunder signed my name on this  _____  day of
November, 2011.

         
 
   

 
William (B.J.) Lehmann, Jr., Secretary    

The undersigned as Chairman and Chief Executive Officer of ATHERSYS, INC., a
Delaware corporation, hereby certifies that William (B.J.) Lehmann, Jr. is the
duly elected, appointed, qualified and acting Secretary of ATHERSYS, INC., and
that the signature appearing above is his genuine signature.

         
 
   

 
Dr. Gil Van Bokkelen, Chairman and Chief Executive Officer    

 

 

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EXHIBIT D
FORM OF LETTER TO THE TRANSFER AGENT FOR THE ISSUANCE OF THE COMMITMENT SHARES
AND
INITIAL PURCHASE SHARES AT SIGNING OF THE PURCHASE AGREEMENT
[COMPANY LETTERHEAD]
November 11, 2011
Computershare Investor Services
250 Royall Street
Canton, MA 02021
Attention: Kim Crimi
Re: Issuance of Common Stock to Aspire Capital Fund, LLC
Ladies and Gentlemen:
On behalf of ATHERSYS, INC., (the “Company”), you are hereby instructed to issue
as soon as possible 933,334 shares of our common stock in the name of Aspire
Capital Fund, LLC. The share certificate should be dated November 11, 2011. I
have included a true and correct copy of adopted resolutions of the Board of
Directors of the Company approving the issuance of these shares. The shares
should be issued subject to the following restrictive legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, UNLESS SOLD PURSUANT TO: (1) RULE 144 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR (2) AN OPINION OF HOLDER’S COUNSEL,
IN A CUSTOMARY FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE STATE SECURITIES LAWS.

 

 

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The share certificate should be sent as soon as possible via overnight mail to
the following address:
Aspire Capital Fund, LLC
155 North Wacker Drive, Suite 1600
Chicago, IL 60606
Attention: Steven G. Martin
Thank you very much for your help. Please call Laura K. Campbell, Vice President
of Finance, at 216-431-9900 if you have any questions or need anything further.
ATHERSYS, INC.

         
BY:
       
 
 
 
Dr. Gil Van Bokkelen, Chairman and Chief Executive Officer