AGREEMENT AND PLAN OF MERGER


                            Dated as of May 24, 2007,


                                  by and among


                                 BTHC VI, INC.,


                             B-VI ACQUISITION CORP.


                                       and


                                 ATHERSYS, INC.
















<PAGE>

                     Location of Defined Terms in Agreement

Term                                                       Location in Agreement

"affiliate"                                                          ss.8.03
"Agreement"                                                          Preamble
"Assumed Options"                                                    ss.5.03(a)
"Bankruptcy Court"                                                   ss.3.02(e)
"Blank Check Preferred Shares"                                       ss.3.01(c)
"BTHC Plan"                                                          ss.3.02(e)
"business day"                                                       ss.8.03
"Certificate of Merger"                                              ss.1.03
"Certificate of Compliance"                                          ss.3.02(e)
"Class A Convertible Preferred Shares"                               ss.3.01(c)
"Class B Convertible Preferred Shares"                               ss.3.01(c)
"Class C Convertible Preferred Shares"                               ss.3.01(c)
"Class D Convertible Preferred Shares"                               ss.3.01(c)
"Class E Convertible Preferred Shares"                               ss.3.01(c)
"Class F Convertible Preferred Shares"                               ss.3.01(c)
"Class G Convertible Preferred Shares"                               ss.3.01(c)
"Closing"                                                            ss.1.02
"Closing Date"                                                       ss.1.02
"Code"                                                               ss.1.08
"Company"                                                            Preamble
"Company Benefit Plans"                                              ss.8.03
"Company Certificate"                                                ss.2.05(b)
"Company Certificate Amendments"                                     ss.3.01(c)
"Company Common Share"                                               ss.2.02(a)
"Company Disclosure Letter"                                          ss.3.01(b)
"Company Financial Statements"                                       ss.3.01(d)
"Company Representatives"                                            ss.4.02(a)
"Company Share Plans"                                                ss.3.01(c)
"Company Solicitation Statement"                                     ss.5.09
"Company Stock Options"                                              ss.3.01(c)
"Company Stockholder Approval"                                       ss.3.01(g)
"Company Subsidiary"                                                 ss.3.01(a)
"Company Superior Proposal"                                          ss.4.02(b)
"Company Takeover Proposal"                                          ss.4.02(a)
"Contract"                                                           ss.3.01(d)
"DGCL"                                                               ss.1.01
"Dissenting Shares"                                                  ss.2.07
"Effective Time"                                                     ss.1.03
"Environmental Claim"                                                ss.3.02(aa)
"Environmental Laws"                                                 ss.3.02(aa)
"Environmental Permits"                                              ss.3.02(aa)
"Equity Financing"                                                   ss.6.01(c)
"ERISA"                                                              ss.3.02(p)
"Exchange Act"                                                       ss.3.02(f)




<PAGE>

"Exchange Agent"                                                     ss.2.05(a)
"Exchange Fund"                                                      ss.2.05(a)
"Exchange Ratio"                                                     ss.2.02(a)
"14f-1 Information Statement"                                        ss.5.08
"GAAP"                                                               ss.3.01(e)
"Governmental Entity"                                                ss.3.01(d)
"Hazardous Materials"                                                ss.3.02(aa)
"Indemnified Party"                                                  ss.5.04(c)
"Joinder Agreement"                                                  ss.5.10
"Judgment"                                                           ss.3.01(d)
"knowledge"                                                          ss.8.03
"Law"                                                                ss.3.01(d)
"Liens"                                                              ss.3.01(b)
"Losses"                                                             ss.5.04(c)
"Merger"                                                             Recitals
"Merger Consideration"                                               ss.2.02(a)
"New Parent Shares"                                                  ss.2.08
"New Parent Securities"                                              ss.2.08
"Options"                                                            ss.3.01(c)
"Outside Date"                                                       ss.7.01(b)
"Parent"                                                             Preamble
"Parent Certificate Amendments"                                      ss.2.01
"Parent Common Stock"                                                ss.8.03
"Parent Disclosure Letter"                                           ss.3.02
"Parent Representatives"                                             ss.4.03(a)
"Parent SEC Documents"                                               ss.3.02(f)
"Parent Stock Plans"                                                 ss.5.03(b)
"Parent Stockholder Approval"                                        ss.3.02(q)
"Parent Takeover Proposal"                                           ss.4.03(a)
"Private Placement Memorandum"                                       ss.3.01(d)
"Permits"                                                            ss.3.02(t)
"person"                                                             ss.8.03
"Placement Agents"                                                   ss.5.10
"Placement Agency Agreement"                                         ss.5.10
"Preferred Shares"                                                   ss.3.01(c)
"Release"                                                            ss.3.02(aa)
"SEC"                                                                ss.3.02(f)
"Securities Act"                                                     ss.2.08
"Sub"                                                                Preamble
"subsidiary"                                                         ss.8.03
"Surviving Corporation"                                              ss.1.01
"Taxes"                                                              ss.3.02(v)
"Tax Returns"                                                        ss.3.02(v)
"Transferee"                                                         ss.2.05(b)
"Treasury Shares"                                                    ss.2.02(a)
"Units"                                                              ss.6.01(c)
"Voting Preferred Shares"                                            ss.3.01(g)





                                       2
<PAGE>


ARTICLE I             THE MERGER...............................................1

         Section 1.01.         The Merger......................................1

         Section 1.02.         Closing.........................................1

         Section 1.03.         Effective Time..................................1

         Section 1.04.         Effects of the Merger...........................2

         Section 1.05.         Certificate of Incorporation and Bylaws.........2

         Section 1.06.         Directors and Officers of the Surviving
                               Corporation.....................................2

         Section 1.07.         Directors of Parent.............................2

         Section 1.08.         Tax Consequences................................2

ARTICLE II            EFFECT OF THE MERGER ON THE SHARES OF THE CONSTITUENT
                      CORPORATIONS; SURRENDER OF CERTIFICATES AND
                      PAYMENT..................................................3

         Section 2.01.         Certificate Amendments..........................3

         Section 2.02.         Merger Consideration............................3

         Section 2.03.         Rights as Shareholders; Share Transfers.........3

         Section 2.04.         Fractional Shares...............................4

         Section 2.05.         Exchange of Certificates........................4

         Section 2.06.         Anti-Dilution Adjustments.......................6

         Section 2.07.         Dissenter's Rights..............................6

         Section 2.08.         Restrictions on Transfer........................6

ARTICLE III           REPRESENTATIONS AND WARRANTIES...........................7

         Section 3.01.         Representations and Warranties of
                               the Company.....................................7

         Section 3.02.         Representations and Warranties of
                               Parent and Sub.................................10

ARTICLE IV            COVENANTS RELATING TO CONDUCT OF BUSINESS...............20

         Section 4.01.         Conduct of Business............................20

         Section 4.02.         No Solicitation by the Company.................23

         Section 4.03.         No Solicitation by Parent......................24

ARTICLE V             ADDITIONAL AGREEMENTS...................................25

         Section 5.01.         Access to Information; Confidentiality.........25

         Section 5.02.         Reasonable Best Efforts; Notification..........25

         Section 5.03.         Stock Options..................................27

         Section 5.04.         Indemnification................................28

         Section 5.05.         Fees and Expenses..............................29




<PAGE>


         Section 5.06.         Public Announcements; Transaction Form 8-K.....29

         Section 5.07.         Tax Treatment..................................30

         Section 5.08.         Schedule 14f-1 Information Statement...........30

         Section 5.09.         Company Stockholder Approval and Consent
                               Solicitation Statement.........................30

         Section 5.10.         Equity Financing...............................31

         Section 5.11.         Parent Board Composition.......................31

ARTICLE VI            CONDITIONS PRECEDENT....................................31

         Section 6.01.         Conditions to Each Party's Obligation to
                               Effect the Merger..............................31

         Section 6.02.         Conditions to Obligations of Parent and Sub....32

         Section 6.03.         Conditions to Obligation of the Company........32

         Section 6.04.         Frustration of Closing Conditions..............33

ARTICLE VII           TERMINATION, AMENDMENT AND WAIVER.......................33

         Section 7.01.         Termination....................................33

         Section 7.02.         Effect of Termination..........................34

         Section 7.03.         Amendment......................................34

         Section 7.04.         Extension; Waiver..............................34

         Section 7.05.         Procedure for Termination, Amendment,
                               Extension or Waiver............................35

ARTICLE VIII          GENERAL PROVISIONS......................................35

         Section 8.01.         Nonsurvival of Representations and
                               Warranties.....................................35

         Section 8.02.         Notices........................................35

         Section 8.03.         Definitions....................................36

         Section 8.04.         Interpretation.................................36

         Section 8.05.         Severability...................................37

         Section 8.06.         Counterparts...................................37

         Section 8.07.         Entire Agreement; No Third-Party
                               Beneficiaries..................................37

         Section 8.08.         Governing Law..................................37

         Section 8.09.         Assignment.....................................37

         Section 8.10.         Enforcement....................................37



<PAGE>


          AGREEMENT  AND  PLAN  OF  MERGER  dated  as  of  May  24,  2007  (this
"Agreement"),  by and among BTHC VI,  Inc., a Delaware  corporation  ("Parent"),
B-VI  ACQUISITION  CORP.,  a  Delaware  corporation  and a direct  wholly  owned
subsidiary of Parent ("Sub"),  and ATHERSYS,  INC., a Delaware  corporation (the
"Company").

          WHEREAS the respective Boards of Directors of Parent,  the Company and
Sub have  approved  and declared  advisable  the merger of Sub with and into the
Company (the  "Merger"),  upon the terms and subject to the conditions set forth
in this Agreement;

          WHEREAS for Federal income tax purposes it is intended that the Merger
qualify as a "reorganization" within the meaning of Section 368(a) of the Code;

          WHEREAS,   the  Company  intends  to  complete  the  Equity  Financing
contemporaneously with the Closing;

          WHEREAS,  Parent intends to effect the Parent  Certificate  Amendments
and obtain stockholder  approval of the BTHC VI, Inc.  Long-Term  Incentive Plan
prior to the Closing; and

          WHEREAS   Parent,   Sub  and  the  Company   desire  to  make  certain
representations,  warranties,  covenants and  agreements in connection  with the
Merger and also to prescribe various conditions to the Merger.

          NOW, THEREFORE,  in consideration of the representations,  warranties,
covenants and  agreements  contained in this  Agreement,  and for other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged, the parties hereto agree as follows:

                                   ARTICLE I

                                   THE MERGER

          SECTION 1.01 The Merger.  Upon the terms and subject to the conditions
set forth in this Agreement,  and in accordance with the General Corporation Law
of the State of  Delaware  (the  "DGCL"),  Sub shall be merged with and into the
Company at the  Effective  Time.  Following  the  Effective  Time,  the separate
corporate  existence  of Sub shall cease and the Company  shall  continue as the
surviving corporation (the "Surviving Corporation").

          SECTION 1.02 Closing. Upon the terms and subject to the conditions set
forth in this Agreement,  the closing of the Merger (the  "Closing")  shall take
place at 10:00  a.m.  (New  York  City  time) on a date to be  specified  by the
parties (the "Closing  Date"),  which shall be no later than the second business
day after  satisfaction  or waiver (subject to applicable Law) of the conditions
set forth in Article VI (other than those conditions that by their nature are to
be  fulfilled  at  Closing,  but  subject to the  fulfillment  or waiver of such
conditions),  at the offices of Jones Day, 901 Lakeside Avenue,  Cleveland, Ohio
44114, unless another location is agreed to in writing by the parties hereto.

          SECTION 1.03 Effective Time.  Prior to the Closing,  the Company shall
prepare,  and on the  Closing  Date or as soon as  practicable  thereafter,  the
Company  shall  file  with the  Secretary  of State of the State of  Delaware  a


<PAGE>

certificate of merger (the  "Certificate of Merger") executed in accordance with
the relevant  provisions of the DGCL,  and Parent and the Company shall make all
other  filings or  recordings  required  under the DGCL in  connection  with the
Merger.  The Merger shall become  effective on such date as the  Certificate  of
Merger is duly filed with the Secretary of State of the State of Delaware, or on
such later date as the parties  hereto may agree and specify in the  Certificate
of Merger (the date and time the Merger becomes  effective  being the "Effective
Time").

          SECTION 1.04 Effects of the Merger.  The Merger shall have the effects
set forth in the DGCL.  Without  limiting the generality of the  foregoing,  and
subject thereto,  at the Effective Time, all the property,  rights,  privileges,
immunities,  powers,  franchises  and  authority  of the Company and Sub will be
vested in the Surviving  Corporation,  and all debts,  liabilities and duties of
the  Company  and Sub will  become  the  debts,  liabilities  and  duties of the
Surviving Corporation.

          SECTION 1.05 Certificate of Incorporation and Bylaws.

          (a) The Certificate of Incorporation of Sub, as in effect  immediately
prior to the Effective Time,  shall be the Certificate of  Incorporation  of the
Surviving Corporation until thereafter changed or amended as provided therein or
by applicable Law, except that such Certificate of  Incorporation  shall provide
that the name of the Surviving Corporation shall be "Athersys, Inc.".

          (b) The Bylaws of Sub, as in effect immediately prior to the Effective
Time, shall be the Bylaws of the Surviving  Corporation until thereafter changed
or amended as provided therein or by applicable Law.

          SECTION 1.06. Directors and Officers of the Surviving Corporation. The
individuals who are the directors and officers of the Company  immediately prior
to the Effective Time shall be the directors and officers,  respectively, of the
Surviving  Corporation until thereafter they cease to be directors and officers,
respectively,  in accordance with the DGCL and the Certificate of  Incorporation
and Bylaws of the Surviving Corporation.

          SECTION  1.07.  Directors of Parent.  Upon the  Closing,  the Board of
Directors of Parent shall be replaced as set forth in Section 5.11.

          SECTION 1.08. Tax  Consequences.  It is intended by the parties hereto
that the Merger  shall  constitute  a  "reorganization"  within  the  meaning of
Section  368(a) of the Internal  Revenue Code of 1986,  as amended (the "Code").
The parties hereto adopt this Agreement as a "plan of reorganization" within the
meaning  of  Sections  354 and  361 of the  Code  and  Sections  1.368-2(g)  and
1.368-3(a) of the Treasury Regulations and for all relevant Tax purposes.


<PAGE>


                                   ARTICLE II

EFFECT OF THE MERGER ON THE SHARES OF THE CONSTITUENT CORPORATIONS; SURRENDER OF
                            CERTIFICATES AND PAYMENT

          SECTION 2.01. Certificate Amendments. Prior to the Closing, (i) Parent
shall amend its Certificate of Incorporation to (A) effect a 1-for-1.67  reverse
split of the shares of Parent  Common Stock  outstanding  as of May 24, 2007 and
(B)  increase  the  number of  authorized  shares of Parent  Common  Stock  from
40,000,000 to 100,000,000  (the "Parent  Certificate  Amendments")  and (ii) the
Company  shall,  by means of the Company  Certificate  Amendments  described  in
Section 3.01(c),  (A) convert its outstanding  convertible  preferred stock into
Company  Common Shares and (B) increase the number of authorized  Company Common
Shares.

          SECTION  2.02.  Merger   Consideration.   Subject  to  the  terms  and
conditions of this Agreement, at the Effective Time, by virtue of the Merger and
without  any  action on the part of  Parent,  Sub or any holder of shares of the
Company:

          (a) Each  common  share,  par value  $.01 per  share,  of the  Company
("Company  Common  Share")  issued  and  outstanding  immediately  prior  to the
Effective  Time (other than Company Common Shares held directly or indirectly by
the Company  ("Treasury  Shares"),  Dissenting  Shares and Company Common Shares
owned by Parent,  Sub or any other  wholly owned  subsidiary  of Parent) will be
extinguished,  cancelled and  automatically  converted into the right to receive
0.0358493 (the "Exchange Ratio") fully paid and  nonassessable  shares of Parent
Common Stock ("Merger Consideration").

          (b) Each Company Common Share that, immediately prior to the Effective
Time,  is a Treasury  Share or is owned  directly  by  Parent,  Sub or any other
wholly owned subsidiary of Parent will be canceled and retired and will cease to
exist, and no exchange or payment will be made therefor.

          (c) At the  Effective  Time,  each  common  share,  par value $.01 per
share,  of Sub issued and  outstanding  immediately  prior to the Effective Time
shall be  converted  into and  become one fully  paid and  nonassessable  common
share, par value $.01 per share, of the Surviving Corporation.

          SECTION  2.03.  Rights  as  Shareholders;   Share  Transfers.  At  the
Effective Time, holders of Company Common Shares will cease to be, and will have
no rights as,  shareholders of the Company,  other than the right to receive (a)
any dividend or other  distribution  with respect to such Company  Common Shares
with a record  date  occurring  prior to the  Effective  Time and (b) the Merger
Consideration  provided under Section 2.02, provided that in the case of holders
of  Dissenting  Shares,  such  shareholders  shall have the rights  described in
Section  2.07 in lieu of any  rights  to the  Merger  Consideration.  After  the
Effective Time, there will be no transfers of Company Common Shares on the share
transfer books of the Surviving  Corporation.  If, after the Effective Time, any
certificates  formerly  representing  Company  Common  Shares are  presented  to
Parent,  the Surviving  Corporation or the Exchange  Agent for any reason,  they
shall be canceled and exchanged as provided in this Article II.


<PAGE>


          SECTION 2.04.  Fractional Shares.  Notwithstanding any other provision
in  this  Agreement,  no  fractional  shares  of  Parent  Common  Stock,  and no
certificates or scrip therefor,  or other evidence of ownership thereof, will be
issued  in the  Merger.  Any  fractional  share  interests  to which a holder of
Company  Common Shares would  otherwise be entitled  under Section 2.02 shall be
rounded  to the  nearest  whole  number.  No cash shall be issued in lieu of any
fractional shares.

SECTION   2.05. Exchange of Certificates.

          (a) Exchange Agent.  Prior to the Effective  Time,  Parent and Company
will designate a national bank,  trust company or transfer agent to act as agent
of Parent for purposes of, among other things, mailing and receiving transmittal
letters and  distributing the Merger  Consideration to the Company  stockholders
(the "Exchange Agent").  As of the Effective Time, Parent and the Exchange Agent
shall enter into an agreement  which will provide that Parent shall deposit with
the Exchange  Agent as of the Effective  Time, for the benefit of the holders of
Company Common Shares,  for exchange in accordance with this Article II, through
the Exchange Agent,  certificates representing the shares of Parent Common Stock
(such  shares  of  Parent   Common   Stock,   together  with  any  dividends  or
distributions  with respect thereto with a record date after the Effective Time,
being  hereinafter  referred to as the  "Exchange  Fund")  issuable  pursuant to
Section 2.02 in exchange for outstanding Company Common Shares.

          (b) Exchange Procedures.

                    (i) As promptly as practicable after the Effective Time, the
          Exchange  Agent  will mail to each  holder of record of a  certificate
          formerly representing Company Common Shares (a "Company  Certificate")
          whose Company  Common Shares were  converted into the right to receive
          the  Merger  Consideration  (A) a letter of  transmittal  (which  will
          specify that delivery will be effected,  and risk of loss and title to
          the Company  Certificates  will pass, only upon proper delivery of the
          Company  Certificates  to the Exchange  Agent and will be in such form
          and have such other  provisions  as Parent and the Company may specify
          consistent  with  this  Agreement)  and  (B)  instructions  for use in
          effecting  the surrender of the Company  Certificates  in exchange for
          the Merger Consideration.

                    (ii)  After  the  Effective  Time,  and  upon  surrender  in
          accordance  with  Section  2.05(b)(i)  of a  Company  Certificate  for
          cancellation  to the  Exchange  Agent,  together  with such  letter of
          transmittal, duly executed, and such other documents as may reasonably
          be  required  by the  Exchange  Agent,  the  holder  of  such  Company
          Certificate  will be  entitled  to receive in  exchange  therefor  the
          Merger  Consideration  that  such  holder  has the  right  to  receive
          pursuant to the  provisions of this Article II, and certain  dividends
          or other  distributions,  if any, in accordance  with this Article II,
          and the Company Certificate so surrendered will forthwith be canceled.
          In the event of a transfer of ownership of Company  Common Shares that
          are not registered in the transfer records of the Company, payment may
          be issued to a person  other than the person in whose name the Company
          Certificate so surrendered is registered  (the  "Transferee")  if such
          Company  Certificate is properly  endorsed or otherwise in proper form
          for  transfer  and the  Transferee  pays any  transfer  or other Taxes
          required  by  reason  of such  payment  to a  person  other  than  the


<PAGE>

          registered  holder of such Company  Certificate  or establishes to the
          satisfaction  of the Exchange  Agent that such Tax has been paid or is
          not  applicable.  Until  surrendered as  contemplated  by this Section
          2.05,  each Company  Certificate  will be deemed at any time after the
          Effective  Time to  represent  only the  right to  receive  upon  such
          surrender  the Merger  Consideration  that the holder  thereof has the
          right to receive in respect of such  Company  Certificate  pursuant to
          the  provisions  of this  Article II, and certain  dividends  or other
          distributions, if any, in accordance with Section 2.05(c).

          (c)   Dividends;   Other   Distributions.   No   dividends   or  other
distributions  with respect to Parent  Common Stock with a record date after the
Effective  Time  will  be  paid  to  the  holder  of any  unsurrendered  Company
Certificate  with  respect  to the  shares of Parent  Common  Stock  represented
thereby,  and all such dividends and other  distributions will be paid by Parent
to the Exchange  Agent and will be included in the Exchange  Fund,  in each case
until the surrender of such Company  Certificate in accordance with this Article
II.  Subject to the effect of  applicable  escheat  or similar  Laws,  following
surrender of any such Company Certificate in accordance herewith,  there will be
paid to the holder of the certificate representing whole shares of Parent Common
Stock issued in exchange  therefor,  without  interest,  (i) at the time of such
surrender,  the amount of  dividends or other  distributions  with a record date
after the Effective Time  theretofore  paid with respect to such whole shares of
Parent  Common Stock and (ii) at the  appropriate  payment  date,  the amount of
dividends or other distributions with a record date after the Effective Time but
prior to such  surrender and with a payment date  subsequent  to such  surrender
payable with respect to such whole shares of Parent Common Stock.

          (d) No Further  Ownership Rights in Company Common Shares.  All shares
of Parent  Common Stock issued in  accordance  with the terms of this Article II
(including  any cash paid  pursuant to Section  2.05(c))  will be deemed to have
been  issued or paid,  as the case may be, in full  satisfaction  of all  rights
pertaining to the Company Common Shares theretofore  represented by such Company
Certificates,  and there will be no further  registration  of  transfers  on the
stock transfer books of the Surviving  Corporation of Company Common Shares that
were  outstanding  immediately  prior  to the  Effective  Time.  If,  after  the
Effective  Time,  Company  Certificates  are presented to Parent,  the Surviving
Corporation  or the  Exchange  Agent for any reason,  they will be canceled  and
exchanged as provided in this Article II.

          (e)  Termination  of Exchange  Fund.  Any portion of the Exchange Fund
that remains  undistributed  to the holders of the Company  Certificates for six
months after the Effective  Time will be delivered to Parent,  upon demand,  and
any holders of Company  Certificates who have not theretofore complied with this
Article II may  thereafter  look only to Parent for  payment of their  claim for
Merger Consideration and any dividends or distributions, if any, with respect to
Parent Common Stock.

          (f) No Liability.  None of Parent,  the Surviving  Corporation  or the
Exchange  Agent  will be liable to any person in respect of any shares of Parent
Common Stock, any dividends or distributions with respect thereto, in each case,
delivered to a public official  pursuant to any applicable  abandoned  property,
escheat or similar Law.

          (g) Lost  Certificates.  If any  Company  Certificate  has been  lost,
stolen or destroyed,  upon the making of an affidavit of that fact by the person
claiming  such  Company  Certificate  to be lost,  stolen or  destroyed  and, if


<PAGE>

required by Parent or the Surviving Corporation, as the case may be, the posting
by such person of a bond in such  reasonable  amount as Parent or the  Surviving
Corporation,  as the case may be, may direct as indemnity against any claim that
may be made against it with respect to such  Company  Certificate,  the Exchange
Agent  shall  issue,  in exchange  for such lost,  stolen or  destroyed  Company
Certificate,  the Merger Consideration and, if applicable,  any unpaid dividends
and  distributions  on shares of Parent  Common  Stock  deliverable  in  respect
thereof, in each case, due to such person pursuant to this Agreement.

          SECTION 2.06.  Anti-Dilution  Adjustments.  Except with respect to the
transactions  contemplated by the Parent Certificate  Amendments,  should Parent
change (or  establish a record date for changing) the number of shares of Parent
Common  Stock issued and  outstanding  prior to the  Effective  Time by way of a
split, dividend,  combination,  recapitalization,  exchange of shares or similar
transaction with respect to the outstanding  Parent Common Stock having a record
date  preceding  the  Effective  Time,  the  Exchange  Ratio  will  be  adjusted
appropriately  to provide  to the  holders  of  Company  Common  Shares the same
economic effect as contemplated by this Agreement prior to such split, dividend,
combination, recapitalization, exchange of shares or similar transaction.

          SECTION 2.07.  Dissenter's Rights. Company Common Shares that have not
been voted for adoption of this  Agreement  and with respect to which  appraisal
has  been  properly  demanded  in  accordance  with  Section  262  of  the  DGCL
("Dissenting Shares") will not be converted into the right to receive the Merger
Consideration at or after the Effective Time unless and until the holder of such
shares  withdraws  such demand for such  appraisal (in  accordance  with Section
262(k) of the DGCL) or becomes  ineligible  for such  appraisal.  If a holder of
Dissenting  Shares  withdraws  such demand for  appraisal  (in  accordance  with
Section 262(k) of the DGCL) or becomes  ineligible for such appraisal,  then, as
of the Effective  Time or the  occurrence of such event,  whichever last occurs,
each of such holder's  Dissenting Shares will cease to be a Dissenting Share and
will  be  converted   into  and  represent  the  right  to  receive  the  Merger
Consideration,  without interest  thereon.  The Company shall give Parent prompt
notice of any demands for appraisal,  attempted  withdrawals of such demands and
any other instruments  received by the Company relating to stockholders'  rights
of appraisal. Parent shall conduct all negotiations and proceedings with respect
to demand for  appraisal  under the DGCL and the  Company  will be  entitled  to
participate in such  negotiations only as and to the extent requested by Parent.
The Company shall not, except with the prior written consent of Parent, make any
payment  with  respect  to any  demands  for  appraisal  of  Dissenting  Shares,
compromise  or offer to  settle  or  settle  any such  demands  or  approve  any
withdrawal of any such demands.

          SECTION 2.08.  Restrictions  on Transfer.  The shares of Parent Common
Stock  that are being  issued in  connection  with the Merger  (the "New  Parent
Shares"),  and any shares of Parent  Common  Stock  issuable  upon  exercise  of
options  issued  pursuant  to Section  5.03  (collectively,  with the New Parent
Shares,  the "New Parent  Securities") are being issued pursuant to an exemption
from registration provided for in Section 4(2) of the Securities Act of 1933, as
amended (the "Securities  Act").  Each  certificate  representing any New Parent
Securities  shall be subject to stop  transfer  instructions  and shall bear all
legends required under all applicable securities Laws.


<PAGE>


                                  ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

          SECTION 3.01. Representations and Warranties of the Company. Except as
set forth in the Company  Disclosure  Letter  (with  specific  reference  to the
relevant  sections of the  representations  and  warranties or covenants in this
Agreement or disclosure  in such a way to make its relevance to the  information
called  for  by the  representations  and  warranties  or  covenants  reasonably
apparent),  which Company Disclosure Letter shall be deemed a part hereof, or as
otherwise expressly  contemplated by this Agreement,  the Company represents and
warrants to Parent and Sub as follows:

          (a)  Organization,  Standing and Corporate Power.  Each of the Company
and each of its  subsidiaries  (each, a "Company  Subsidiary") is a corporation,
partnership or other legal entity duly organized,  validly  existing and in good
standing under the Laws of the jurisdiction in which it is organized and has the
requisite  power and authority to carry on its business as now being  conducted.
Each of the Company and each Company Subsidiary is duly qualified or licensed to
do business and is in good standing in each  jurisdiction in which the nature of
its  business  or  the  ownership  or  leasing  of  its  properties  makes  such
qualification or licensing  necessary.  The Company has made available to Parent
complete  and  correct  copies  of  its  Amended  and  Restated  Certificate  of
Incorporation  and Amended and Restated  Bylaws,  in each case as amended to the
date of this Agreement.

          (b)  Company  Subsidiaries.  Section  3.01(b) of the  letter  from the
Company,  dated the date of this  Agreement,  addressed to Parent (the  "Company
Disclosure  Letter") lists each Company Subsidiary and the ownership or interest
therein of the Company.  All the outstanding  shares of each Company  Subsidiary
have been validly issued and are fully paid and  nonassessable  and are owned by
the Company, by another Company Subsidiary or by the Company and another Company
Subsidiary, free and clear of all pledges, claims, liens, charges,  encumbrances
and security interests of any kind or nature whatsoever (collectively, "Liens").

          (c) Capital  Structure.  As of the date of this Agreement,  authorized
shares of the Company  consist of (i) 40,000,000  Company  Common  Shares,  (ii)
3,939,000  shares of Class A  Convertible  Preferred  Stock,  par value $.01 per
share (the "Class A Convertible  Preferred  Shares"),  (iii)  319,800  shares of
Class B  Convertible  Preferred  Stock,  par value $.01 per share (the  "Class B
Convertible  Preferred  Shares"),  (iv) 4,116,000  shares of Class C Convertible
Preferred  Stock,  par value $.01 per share (the "Class C Convertible  Preferred
Shares"),  (v) 150,000 shares of Class D Convertible  Preferred Stock, par value
$.01 per share (the "Class D Convertible Preferred Shares"),  (vi) 18,100 shares
of Class E Convertible  Preferred  Stock, par value $.01 per share (the "Class E
Convertible  Preferred  Shares"),  (vii) 4,000,000 shares of Class F Convertible
Preferred  Stock,  par value $.01 per share (the "Class F Convertible  Preferred
Shares"),  (viii) 639,450 shares of Class G Preferred  Stock, par value $.01 per
share (the "Class G Convertible  Preferred Shares"),  and (ix) 250,000 shares of
Preferred Stock, par value $.01 per share (the "Blank Check Preferred  Shares").
At the close of business on May 23, 2007:  (i) 8,286,550  Company  Common Shares
were   outstanding,   all  of  which  were  validly   issued,   fully  paid  and
nonassessable;   (ii)  2,739,000  Class  A  Convertible  Preferred  Shares  were
outstanding,  all of which were validly  issued,  fully paid and  nonassessable;
(iii) 319,800  Class B Convertible  Preferred  Shares were  outstanding,  all of
which were validly issued, fully paid and nonassessable;  (iv) 2,766,300 Class C
Convertible Preferred Shares were outstanding, all of which were validly issued,


<PAGE>

fully paid and nonassessable;  (v) 150,000 Class D Convertible  Preferred Shares
were   outstanding,   all  of  which  were  validly   issued,   fully  paid  and
nonassessable;   (vi)  12,015  Class  E   Convertible   Preferred   Shares  were
outstanding,  all of which were validly  issued,  fully paid and  nonassessable;
(vii) 3,541,666.337 Class F Convertible  Preferred Shares were outstanding,  all
of which were validly issued, fully paid and nonassessable; (viii) 639,450 Class
G  Convertible  Preferred  Shares were  outstanding,  all of which were  validly
issued, fully paid and nonassessable;  (ix) no Blank Check Preferred Shares were
outstanding;  (x) there were 1,655,129  Treasury Shares;  (xi) 2,842,918 Company
Common Shares were subject to issued and outstanding options to purchase Company
Common Shares  granted  under the  Company's  1995  Incentive  Plan,  2000 Stock
Incentive  Plan  and a plan  approved  in  connection  with the  Company's  2003
restructuring  (the "Company Share Plans," and such stock options  collectively,
the  "Company  Stock  Options");  (xii)  3,897,135  Company  Common  Shares were
reserved  for  issuance  pursuant to the Company  Share  Plans;  (xiii)  606,000
Company Common Shares were subject to warrants  issued to the holders of Class C
Convertible Preferred Shares; (xiv) shares of Company Common Shares were subject
to  warrants  issuable  to lenders  related to  long-term  debt;  (xv) shares of
Company  Common Shares were subject to warrants  issued to investors in a bridge
financing;  (xvi) shares of Company  Common Shares were subject to issuance upon
conversion of convertible  promissory  notes plus accrued  interest;  and (xvii)
shares of Company  Common  Shares were subject to issuance upon  achievement  of
certain  milestones  related to  collaborative  agreements.  Except as set forth
above,  at the close of  business  on May 23,  2007,  no shares or other  voting
securities  of the Company  were issued,  reserved for issuance or  outstanding.
Prior to the Closing,  the Company shall amend its Certificate of  Incorporation
(the  "Company  Certificate  Amendments")  such  that  immediately  prior to the
Closing,  (i)(A) each Class A Convertible  Preferred Share,  Class B Convertible
Preferred  Share,  Class D Convertible  Preferred  Share and Class G Convertible
Preferred Share will convert into 2.163324 Company Common Shares, (B) each Class
C Convertible  Preferred Share will convert into 4.322537 Company Common Shares,
(C) each Class E Convertible  Preferred Share will into 12.484395 Company Common
Shares and (D) each  Class F  Convertible  Preferred  Share  will  convert  into
9.292039  Company  Common Shares;  (ii) the number of authorized  Company Common
Shares will be increased to 100,000,000; and (iii) all accrued dividends will be
eliminated.  Prior to the Closing,  the Company will retire its Treasury  Shares
and cancel the warrants to purchase  606,000 Company Common Shares issued to the
holders  of Class C  Convertible  Preferred  Shares.  There  are not any  bonds,
debentures,  notes or other indebtedness of the Company having the right to vote
(or convertible into, or exchangeable for,  securities having the right to vote)
on any matters on which  shareholders  of the  Company  may vote.  Except as set
forth  above,  as of the  date  of this  Agreement  there  are not any  options,
warrants, calls, rights, commitments,  agreements,  arrangements or undertakings
of any kind  (collectively,  "Options")  to which  the  Company  or any  Company
Subsidiary is a party or by which any of them is bound relating to the issued or
unissued  shares of the Company or any Company  Subsidiary,  or  obligating  the
Company or any Company Subsidiary to issue,  transfer,  grant or sell any shares
or other equity interests in, or securities  convertible or exchangeable for any
shares or other equity  interests  in, the Company or any Company  Subsidiary or
obligating  the Company or any Company  Subsidiary  to issue,  grant,  extend or
enter into any such  Options.  All  Company  Common  Shares  that are subject to
issuance as aforesaid,  upon issuance on the terms and  conditions  specified in


<PAGE>

the  instrument  pursuant to which they are issuable,  will be duly  authorized,
validly issued,  fully paid and  nonassessable and not subject to any preemptive
rights.  As of the  date  of this  Agreement,  there  are  not  any  outstanding
contractual  obligations of the Company or any Company Subsidiary to repurchase,
redeem or otherwise acquire any shares of the Company or any Company Subsidiary,
or make any material investment (in the form of a loan, capital  contribution or
otherwise) in, any person other than a Company Subsidiary.

          (d)  Authority;   Noncontravention.  The  Company  has  all  requisite
corporate  power and authority to enter into this Agreement and,  subject to the
Company  Stockholder  Approval,  to consummate the transactions  contemplated by
this Agreement.  The Board of Directors of the Company has unanimously  approved
this Agreement and the  transactions  contemplated  by this  Agreement,  and has
resolved to recommend to the Company's  shareholders  that they give the Company
Stockholder  Approval.  The  execution  and  delivery of this  Agreement  by the
Company and the consummation by the Company of the transactions  contemplated by
this Agreement have been duly  authorized by all necessary  corporate  action on
the part of the  Company,  subject to the  Company  Stockholder  Approval.  This
Agreement has been duly executed and delivered by the Company and,  assuming the
due  authorization,  execution and delivery by each of the other parties hereto,
constitutes a valid and binding obligation of the Company,  enforceable  against
the Company in accordance  with its terms  (subject to  bankruptcy,  insolvency,
moratorium,  reorganization  or similar Laws  affecting  the rights of creditors
generally  and the  availability  of  equitable  remedies).  The  execution  and
delivery of this Agreement and the consummation of the transactions contemplated
by this Agreement and compliance  with the provisions of this Agreement will not
conflict with, or result in any violation of, or default (with or without notice
or lapse of time,  or both)  under,  or give rise to a right of  termination  or
acceleration  of any  obligation  or to loss of any material  rights  under,  or
result in the creation of any Lien upon any of the  properties  or assets of the
Company  or  any  Company   Subsidiary  under,  (i)  the  Amended  and  Restated
Certificate of  Incorporation  or Amended and Restated  Bylaws of the Company or
the  comparable  organizational  documents of any Company  Subsidiary,  (ii) any
written contract,  loan or credit agreement,  note, bond,  mortgage,  indenture,
lease or other property  agreement,  partnership  or joint venture  agreement or
other legally  binding  agreement (a  "Contract")  or Permit,  applicable to the
Company or any Company  Subsidiary or their  respective  properties or assets or
(iii)  subject to the  governmental  filings  and the  obtaining  of the Company
Stockholder  Approval and other matters  referred to in the following  sentence,
any  judgment,  order or  decree  of any  Governmental  Entity  ("Judgment")  or
statute,  law, ordinance,  rule or regulation of any Governmental Entity ("Law")
applicable  to the  Company  or  any  Company  Subsidiary  or  their  respective
properties  or assets,  other than,  in the case of clauses (ii) and (iii),  any
such conflicts,  violations,  defaults, rights or Liens that, individually or in
the aggregate,  would not reasonably be expected to be materially adverse to the
Company and the Company  Subsidiaries,  taken as a whole. No consent,  approval,
order or authorization of, or registration or filing with, any Federal, state or
local  government  or any court,  administrative  agency or  commission or other
governmental authority or agency, domestic or foreign (a "Governmental Entity"),
is required  by or with  respect to the  Company or any  Company  Subsidiary  in
connection  with the execution and delivery of this  Agreement by the Company or
the  consummation  by the  Company  of the  transactions  contemplated  by  this
Agreement,  except  for (i) the  filing of the  Certificate  of Merger  with the
Delaware Secretary of State, (ii) those that may be required solely by reason of
Parent's or Sub's (as opposed to any other third party's)  participation  in the
Merger and the other transactions  contemplated by this Agreement and (iii) such


<PAGE>

other consents,  approvals,  orders,  authorizations,  registrations and filings
that,  if not obtained or made,  would not,  individually  or in the  aggregate,
reasonably be expected to be  materially  adverse to the Company and the Company
Subsidiaries, taken as a whole.

          (e)  Financial  Statements;   Undisclosed  Liabilities.   The  audited
consolidated   financial  statements   (collectively,   the  "Company  Financial
Statements")  included in the Private Placement  Memorandum dated April 19, 2007
(the "Private  Placement  Memorandum")  have been  prepared in  accordance  with
generally accepted  accounting  principles in the United States ("GAAP") applied
on a basis consistent throughout the periods indicated and fairly present in all
material  respects the  consolidated  financial  position of the Company and the
Company  Subsidiaries  at the dates and during the  periods  indicated  therein.
Except for liabilities incurred in connection with the transactions contemplated
by this Agreement or in the ordinary course of business since December 31, 2006,
neither  the  Company  nor  any  Company   Subsidiary  has  any  liabilities  or
obligations of any nature (whether accrued,  absolute,  contingent or otherwise)
required by GAAP to be set forth on a consolidated  balance sheet of the Company
or  the  notes  thereto  which,  individually  or in  the  aggregate,  would  be
reasonably  expected  to be  materially  adverse to the  Company and the Company
Subsidiaries, taken as a whole.

          (f) Absence of Certain  Changes or Events.  From  December 31, 2006 to
the date of this Agreement, the Company and the Company Subsidiaries, taken as a
whole,  have conducted their respective  businesses only in the ordinary course,
and during such  period  there has not been any event,  circumstance,  change or
occurrence which,  individually or in the aggregate, has had or would reasonably
be  expected  to  be   materially   adverse  to  the  Company  and  the  Company
Subsidiaries, taken as a whole.

          (g) Voting  Requirements.  The affirmative vote of (i) the majority of
the  outstanding  Company  Common  Shares  entitled  to  vote  thereon  and  the
outstanding Class A Convertible  Preferred Shares, Class B Convertible Preferred
Shares,  Class C Convertible  Preferred  Shares,  Class D Convertible  Preferred
Shares, Class F Convertible  Preferred Shares and Class G Preferred Shares (such
preferred shares, collectively,  the "Voting Preferred Shares") entitled to vote
thereon voting on an as-converted basis, voting together as a class, and (ii) at
least 75% of the outstanding  Voting  Preferred  Shares entitled to vote thereon
voting on an as-converted basis, voting as a class  (collectively,  the "Company
Stockholder Approval"), are the only votes of the holders of any class or series
of shares of the Company  necessary to adopt and approve this  Agreement and the
Merger.

          (h) Brokers.  Other than in connection with the Equity  Financing,  no
broker,  investment banker, financial advisor or other person is entitled to any
broker's,  finder's,  financial  advisor's or other similar fee or commission in
connection  with the  transactions  contemplated  by this  Agreement  based upon
arrangements made by or on behalf of the Company.

          (i) State Takeover Statutes. No "fair price",  "moratorium",  "control
share acquisition" or other similar  anti-takeover statute or regulation enacted
under state or federal Laws in the United  States (with the exception of Section
203 of the DGCL)  applicable to the Company is  applicable  to the  transactions
contemplated  by this  Agreement.  The action of the Board of  Directors  of the
Company in approving this Agreement (and the  transactions  provided for herein)
is sufficient to render  inapplicable  to this Agreement  (and the  transactions


<PAGE>

provided for herein) the restrictions on "business  combinations" (as defined in
Section 203 of the DGCL) as set forth in Section 203 of the DGCL.

          SECTION 3.02. Representations and Warranties of Parent and Sub. Except
as set  forth in the  letter  from  Parent,  dated  the date of this  Agreement,
addressed  to the  Company  (the  "Parent  Disclosure  Letter")  (with  specific
reference to the relevant  sections of the  representations  and  warranties  or
covenants in this Agreement or disclosure in such a way to make its relevance to
the information  called for by the  representations  and warranties or covenants
reasonably  apparent),  which  Parent  Disclosure  Letter shall be deemed a part
hereof, or as otherwise expressly contemplated by this Agreement, Parent and Sub
represent and warrant to the Company as follows:

          (a) Organization, Standing and Corporate Power. Each of Parent and Sub
is a corporation duly organized, validly existing and in good standing under the
Laws of the State of Delaware and has the requisite power and authority to carry
on its business as now being conducted. Each of Parent and Sub is duly qualified
or licensed to do business and is in good standing in each jurisdiction in which
the nature of its business or the ownership or leasing of its  properties  makes
such  qualification  or licensing  necessary.  Parent has made  available to the
Company  complete and correct  copies of its  Certificate of  Incorporation  and
Bylaws,  and the Certificate of Incorporation and Bylaws of Sub, in each case as
amended to the date of this Agreement.

          (b) Parent Subsidiaries.  Except for all of the issued and outstanding
shares of capital  stock of Sub,  Parent does not own any capital  stock or have
any  interest  in any  corporation,  partnership,  or  other  form  of  business
organization.  Parent owns all of the capital stock or other equity interests of
Sub free and clear of any Liens,  rights of first refusal,  preemptive rights or
other restrictions.

          (c) Capital  Structure.  At the close of business on May 23, 2007, the
authorized  capital stock of Parent consists of (i) 40,000,000  shares of Parent
Common Stock, $0.001 par value, 500,000 shares of which are outstanding, validly
issued,  fully paid and  nonassessable,  and (ii) 10,000,000  preferred  shares,
$0.001 par value,  none of which are outstanding.  Except as set forth above, at
the close of  business  on May 23,  2007,  no shares of  capital  stock or other
voting  securities of Parent were issued,  reserved for issuance or outstanding.
There  are not any  bonds,  debentures,  notes or other  indebtedness  of Parent
having the right to vote (or convertible into, or exchangeable  for,  securities
having  the right to vote) on any  matters on which  stockholders  of Parent may
vote.  Except as set forth above, as of the date of this Agreement there are not
any Options to which  Parent is a party or by which it is bound  relating to the
issued or  unissued  capital  stock of Parent,  or  obligating  Parent to issue,
transfer,  grant or sell any shares of capital  stock or other equity  interests
in, or securities  convertible  or  exchangeable  for any capital stock or other
equity  interests  in, Parent or obligating  Parent to issue,  grant,  extend or
enter into any such Options.  All shares of Parent Common Stock that are subject
to  issuance  pursuant  to the Merger and the Equity  Financing,  upon  issuance
pursuant to this Agreement, will be duly authorized,  validly issued, fully paid
and nonassessable  and not subject to preemptive  rights. As of the date of this
Agreement,  there are not any outstanding  contractual  obligations of Parent to


<PAGE>

repurchase,  redeem or otherwise  acquire any shares of capital stock of Parent,
or make any material investment (in the form of a loan, capital  contribution or
otherwise) in any person.

          (d) As of the date of this  Agreement,  the  authorized  shares of Sub
consist of 1,000 common shares, par value $.01 per share, all of which have been
validly issued,  are fully paid and  nonassessable  and are owned by Parent free
and clear of any Lien.

          (e)  Authority;  Noncontravention.  Parent and Sub have all  requisite
corporate power and authority to enter into this Agreement and to consummate the
transactions  contemplated by this  Agreement.  The Board of Directors of Parent
has  unanimously   approved  and  declared  advisable  this  Agreement  and  the
transactions  contemplated by this Agreement. The execution and delivery of this
Agreement  and  the  consummation  of  the  transactions  contemplated  by  this
Agreement, in each case by Parent or by Parent and Sub, as the case may be, have
been duly authorized by all necessary corporate action on the part of Parent and
Sub.  This  Agreement  has been duly  executed and  delivered by Parent and Sub,
respectively, and, assuming the due authorization, execution and delivery by the
Company,  constitutes  a  valid  and  binding  obligation  of  Parent  and  Sub,
respectively,  enforceable  against each such party in accordance with its terms
(subject to bankruptcy, insolvency,  moratorium,  reorganization or similar Laws
affecting the rights of creditors  generally and the  availability  of equitable
remedies).  The execution and delivery of this Agreement and the consummation of
the  transactions  contemplated  by  this  Agreement  and  compliance  with  the
provisions of this  Agreement will not conflict with, or result in any violation
of, or default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination or  acceleration  of any obligation or to loss of
any material rights under, or result in the creation of any Lien upon any of the
properties  or  assets  of  Parent  or  Sub  under,   (i)  the   Certificate  of
Incorporation  and By-laws of Parent or the  Certificate  of  Incorporation  and
By-laws of Sub, (ii) the First Amended Joint Plan of Reorganization Filed by the
Debtors and Official Committee of Unsecured  Creditors (the "BTHC Plan") and the
order confirming the BTHC Plan entered by the United States Bankruptcy Court for
the  Northern   District  of  Texas  (the   "Bankruptcy   Court")  in  Case  No.
03-33152-HDH-11,  (iii) any  Contract or Permit  applicable  to Parent or Sub or
their  respective  properties  or assets  or (iv)  subject  to the  governmental
filings and other matters referred to in the following sentence, any Judgment or
Law  applicable to Parent or Sub or their  respective  properties or assets.  No
consent,  approval,  order or authorization  of, or registration or filing with,
any Governmental Entity,  including the Bankruptcy Court, is required by or with
respect to Parent or Sub in  connection  with the execution and delivery of this
Agreement by Parent or Sub, as the case may be, or the consummation by Parent or
Sub, as the case may be, of the  transactions  contemplated  by this  Agreement,
except  for (i) the  filing  of the  Certificate  of  Merger  with the  Delaware
Secretary of State and such filings  with  Governmental  Entities to satisfy the
applicable  requirements  of state  securities  or  "blue  sky"  laws,  (ii) the
certificate of compliance with reverse acquisition requirements to be filed with
the Bankruptcy  Court (the  "Certificate of Compliance")  and any related notice
required by the BTHC Plan and (iii) those that may be required  solely by reason
of the Company's (as opposed to any other third  party's)  participation  in the
Merger and the other transactions contemplated by this Agreement.

          (f) Satisfaction of Bankruptcy  Obligations.  The BTHC Plan has become
effective in  accordance  with its terms.  Other than the notice  following  the
filing of the Certificate of Compliance,  all other notices required by the BTHC


<PAGE>

Plan have been served and all other  post-effective  date  obligations of Parent
have been satisfied. The discharge and injunctions contemplated by the BTHC Plan
are effective and have not been  challenged.  Parent has all requisite power and
authority  to enter  into this  Agreement  and to  consummate  the  transactions
contemplated by the Agreement,  without further action by the Bankruptcy  Court.
Upon the completion of the  transactions  contemplated  by this  Agreement,  the
filing  of  the   Certificate   of  Compliance  and  the  provision  of  written
confirmation of the completion of reverse merger within 15 days of the Effective
Time to the holders of the Parent Common  Stock,  the  Consummation  of the Plan
Date (as  defined in the BTHC Plan) will  occur,  and Parent and its assets will
not be subject to the supervision of the Bankruptcy  Court.  Upon the completion
of the  transactions  contemplated by this Agreement and the Consummation of the
Plan (as defined in the BTHC Plan),  Parent will not have any  liability for any
pre-petition or pre-confirmation debts or liabilities of the Debtors (as defined
in the BTHC Plan) or obligations of the Trust (as defined in the BTHC Plan).

          (g) SEC Documents;  Undisclosed  Liabilities.  Parent has timely filed
all required reports,  schedules, forms, statements and other documents with the
United States Securities and Exchange Commission ("SEC") since July 6, 2006 (the
"Parent SEC  Documents").  As of its date, each Parent SEC Document  complied in
all  material  respects  with  the  requirements  of the  Securities  Act or the
Securities  Exchange Act of 1934, as amended (the "Exchange  Act"),  as the case
may  be,  and the  rules  and  regulations  of the  SEC  promulgated  thereunder
applicable  to  such  Parent  SEC  Documents,  and did not  contain  any  untrue
statement  of a material  fact or omit to state a material  fact  required to be
stated  therein  or  necessary  in  order  to make the  statements  therein  not
misleading, except to the extent that such Parent SEC Document has been modified
or superseded by a later filed Parent SEC Document. As of the date hereof, there
are no outstanding or unresolved  comments in comment letters  received from the
SEC staff  with  respect  to any of the  Parent  SEC  Documents.  The  financial
statements  of Parent  included in Parent's (i) annual report on Form 10-KSB for
the fiscal year ended December 31, 2006 and (ii) quarterly report on Form 10-QSB
for the  quarterly  period ended March 31, 2007,  complied at the time they were
filed  as  to  form  in  all  material   respects  with  applicable   accounting
requirements  and the published  rules and  regulations  of the SEC with respect
thereto,  have been  prepared in accordance  with GAAP  (except,  in the case of
unaudited  statements,  as  permitted  by Form  10-QSB of the SEC)  applied on a
consistent  basis during the periods involved (except as may be indicated in the
notes thereto) and each fairly presented in all material  respects the financial
position of Parent 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  for  liabilities
incurred in connection with the  transactions  contemplated by this Agreement or
in the  ordinary  course of business  since the date of the most recent  balance
sheet  included  in the Parent  SEC  Documents,  neither  Parent nor Sub has any
liabilities or obligations of any nature (whether accrued, absolute,  contingent
or otherwise)  required by GAAP to be set forth on a consolidated  balance sheet
of  Parent  or  the  notes  thereto.  Sub is not  subject  to the  informational
reporting requirements of Section 13 of the Exchange Act.

          (h) Events  Subsequent  to Financial  Statements.  Since  December 31,
2006, except as contemplated by this Agreement, there has not been:

                    (i) any sale, lease, transfer,  license or assignment of any
          assets, tangible or intangible, of Parent or Sub;


<PAGE>


                    (ii) any  declaration  or  setting  aside or  payment of any
          dividend or  distribution  with respect to the shares of capital stock
          of Parent or any redemption, purchase or other acquisition of any such
          shares;

                    (iii)  any  subjection  to any  Lien  on any of the  assets,
          tangible or intangible, of Parent or Sub;

                    (iv)  any  incurrence  of  indebtedness  or  liabilities  or
          assumption of obligations by Parent or Sub;

                    (v) any  waiver or  release by Parent or Sub of any right of
          any material value;

                    (vi) any change made or  authorized  in the  Certificate  of
          Incorporation  or Bylaws of  Parent,  except as  contemplated  by this
          Agreement; or

                    (vii)  any loan to or other  transaction  with any  officer,
          director or  stockholder  of Parent or Sub giving rise to any claim or
          right of  Parent or Sub  against  any such  Person  or of such  Person
          against Parent or Sub.

          (i) Information Supplied.  The records of meetings of the stockholders
and Boards of  Directors of Parent and Sub  previously  furnished to the Company
are complete and correct in all material  respects.  The stock records of Parent
and Sub and the stockholder lists of Parent and Sub previously  furnished to the
Company are complete and correct in all material respects and accurately reflect
the record ownership and the beneficial  ownership of all the outstanding shares
of Parent's and Sub's capital  stock.  The  corporate  and  financial  books and
records of Parent and Sub delivered to the Company fully and fairly  reflect the
transactions  to which  Parent  and/or  Sub is a party or by which they or their
properties  are bound.  None of the  information  supplied  or to be supplied by
Parent  or Sub  for  inclusion  or  incorporation  by  reference  in  the  14f-1
Information Statement will, at the time the 14f-1 Information Statement is filed
with the SEC or at the date the 14f-1  Information  Statement is first mailed to
Parent's  shareholders,  contain any untrue statement of a material fact or omit
to state any material fact  required to be stated  therein or necessary in order
to make the statements  therein,  in light of the circumstances under which they
are made, not misleading. The 14f-1 Information Statement will comply as to form
in all material respects with the requirements of the Exchange Act and the rules
and  regulations  promulgated  thereunder,  except  that  no  representation  or
warranty  is  made  by  Parent  or  Sub  with  respect  to  statements  made  or
incorporated by reference  therein based on information  supplied by the Company
specifically   for  inclusion  or   incorporation  by  reference  in  the  14f-1
Information Statement.

          (j) Personal Property.  Parent has good, clear and marketable title to
all the tangible  assets  reflected in Parent's  latest  balance  sheet as being
owned by Parent or acquired after the date thereof which are, individually or in
the aggregate,  material to Parent's  business  (except  tangible assets sold or
otherwise  disposed  of  since  the  date  thereof  in the  ordinary  course  of
business),  free and  clear of all  Liens.  All  equipment  and  other  items of
tangible assets of Parent (a) are in good operating  condition and in a state of
good maintenance and repair, ordinary wear and tear excepted, and (b) are usable
in the regular and ordinary course of Parent's business.


<PAGE>


          (k) Real  Property.  Parent  does not own any  real  property  and the
Parent is not party to any lease for real property either as a lessee or lessor.

          (l)  Intellectual  Property.  Neither  Parent nor Sub owns or uses any
trademarks,  trade names, service marks, patents, copyrights or any applications
with  respect  thereto.  Neither  Parent nor Sub has any  knowledge of any claim
that, or inquiry as to whether, any product,  activity or operation of Parent or
Sub  infringes  upon or involves,  or has resulted in the  infringement  of, any
trademarks, trade-names, service marks, patents, copyrights or other proprietary
rights of any other Person; and no proceedings have been instituted, are pending
or are threatened.

          (m) Insurance.  Neither  Parent nor Sub has any insurance  policies in
effect.

          (n)  Contracts.  Neither  Parent nor Sub has any  material  Contracts,
arrangements or commitments (whether oral or written). Neither Parent nor Sub is
a party to or bound by or affected by any  Contract,  arrangement  or commitment
(whether oral or written)  relating to: (i) the  employment of any person;  (ii)
collective bargaining with, or any representation of any employees by, any labor
union or association;  (iii) the acquisition of services, supplies, equipment or
other  personal  property;  (iv)  the  purchase  or sale of real  property;  (v)
distribution, agency or construction; (vi) lease of real or personal property as
lessor or lessee or sublessor or sublessee; (vii) lending or advancing of funds;
(viii) borrowing of funds or receipt of credit; (ix) incurring any obligation or
liability; or (x) the sale of personal property.

          (o) Litigation. Neither Parent nor Sub is subject to any Judgment, nor
is there any charge,  complaint,  lawsuit or investigation,  whether or not by a
Governmental Entity, pending or threatened against Parent or Sub. Neither Parent
nor  Sub  is a  plaintiff  in any  action,  domestic  or  foreign,  judicial  or
administrative.  There are no existing actions,  suits,  proceedings  against or
investigations  of Parent or Sub, and neither  Parent nor Sub knows of any basis
for such actions, suits, proceedings or investigations. There are no unsatisfied
judgments,  orders,  decrees or stipulations affecting Parent or Sub or to which
Parent or Sub is a party.

          (p) Absence of Certain  Changes or Events.  Since  December  31, 2006,
Parent has conducted its business only in the ordinary  course,  and during such
period there has not been any event,  circumstance,  change, occurrence or state
of facts which,  individually or in the aggregate,  would reasonably be expected
to be materially adverse to Parent.

          (q) No Benefit Plans. Other than the BTHC VI, Inc. Long-Term Incentive
Plan in the form attached to Parent's  Schedule 14C Information  Statement filed
with the SEC on May 9, 2007, to be adopted by Parent's stockholders prior to the
Effective Time, there are no employee benefit,  bonus, profit sharing,  deferred
compensation,  incentive  compensation,  stock  option  and  vacation  plans  or
programs  maintained  for the  benefit  of the  current or former  employees  or
directors of Parent that are sponsored,  maintained or contributed to by Parent,
or with respect to which Parent has any liability,  including any such plan that
is an  "employee  benefit  plan" as  defined  in  Section  3(3) of the  Employee
Retirement Income Security Act of 1974 ("ERISA").  None of Parent or Sub has any
(i)  non-qualified  deferred or incentive  compensation  or retirement  plans or


<PAGE>

arrangements,  (ii)  qualified  retirement  plans or  arrangements,  (iii) other
employee  compensation,  severance or termination  pay or welfare benefit plans,
programs or  arrangements  or (iv) any related  trusts,  insurance  contracts or
other funding arrangements  maintained,  established or contributed to by Parent
or Sub.

          (r) Voting  Requirements.  The affirmative vote of the majority of the
outstanding  shares of Parent Common Stock entitled to vote thereon (the "Parent
Stockholder  Approval") of the Parent Certificate Amendments is the only vote of
the holders of any class or series of shares of Parent  necessary  to  authorize
the transactions contemplated by this Agreement.

          (s) Brokers. No broker,  investment banker, financial advisor or other
person is entitled  to any  broker's,  finder's,  financial  advisor's  or other
similar fee or commission in connection  with the  transactions  contemplated by
this Agreement based upon arrangements made by or on behalf of Parent.

          (t) Taxes.

                    (i)  Parent  and Sub have  timely  filed (or has had  timely
          filed on its behalf) or will timely file or cause to be timely  filed,
          all Tax Returns  required by applicable Law to be filed by it prior to
          or as of the Effective  Time.  All such Tax Returns are, or will be at
          the time of filing, true, complete and correct in all respects.

                    (ii) Parent has timely paid (or has had paid on its behalf),
          or,  where  payment  is not  yet  due,  has  established  (or  has had
          established  on its behalf and for its sole  benefit and  recourse) or
          will  establish or cause to be  established on or before the Effective
          Time an adequate accrual for the payment of, all Taxes due (whether or
          not shown on any Tax Return) with  respect to any period  ending prior
          to or as of the Effective Time.

                    (iii) No  deficiencies  for any Taxes  have  been  proposed,
          asserted  or  assessed  against  Parent or Sub,  and no  requests  for
          waivers of the time to assess any such Taxes are pending.  The Federal
          income Tax  Returns of Parent have been  examined by and settled  with
          the United States Internal Revenue Service for all years through 2000.

                    (iv)  Parent  has not  constituted  either  a  "distributing
          corporation" or a "controlled  corporation" in a distribution of stock
          qualifying for tax-free treatment under Section 355 of the Code in the
          two years prior to the date of this Agreement.

                    (v) For  purposes of this  Agreement,  the  following  terms
          shall have the following meanings:

                              (A) "Taxes" shall mean all Federal,  state,  local
                    and  foreign  taxes,   payments  due  under  any  applicable
                    abandoned  property,  escheat,  or  similar  Laws and  other
                    assessments of a similar nature (whether imposed directly or
                    through withholding),  including any interest,  additions to
                    tax, or penalties applicable thereto.


<PAGE>


                              (B) "Tax Returns"  shall mean all Federal,  state,
                    local and foreign  tax  returns,  declarations,  statements,
                    reports,  schedules,  forms and information  returns and any
                    amended tax return relating to Taxes.

          (u) Compliance with Laws.  Parent has not violated or failed to comply
with any Law or  Judgment  applicable  to its  business  or  operations.  Parent
possesses all certificates,  franchises,  licenses, permits,  authorizations and
approvals issued or granted by Governmental Entities  (collectively,  "Permits")
necessary to conduct its business as such business is currently  conducted.  All
such Permits are validly held by Parent, and Parent has complied in all respects
with all terms and conditions thereof;  and none of such Permits will be subject
to  suspension,  modification,  revocation  or  nonrenewal  as a  result  of the
execution and delivery of this Agreement or the consummation of the Merger.

          (v) Certain Transactions. None of the affiliates, officers, directors,
or  employees  of Parent or Sub is  presently  a party to any  transaction  with
Parent or Sub (other than for services as  employees,  officers and  directors),
including any Contract,  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 affiliate,  officer,  director or
employee or any  corporation,  partnership,  trust or other  entity in which any
affiliate, officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner.

          (w)  Internal  Accounting  Controls.  Parent  maintains  a  system  of
internal  accounting controls  sufficient,  in the judgment of Parent's Board of
Directors, to provide reasonable assurance that (i) transactions are executed in
accordance  with   management's   general  or  specific   authorizations,   (ii)
transactions  are  recorded as  necessary  to permit  preparation  of  financial
statements in conformity with GAAP and to maintain asset  accountability,  (iii)
access to assets is permitted only in accordance  with  management's  general or
specific  authorization  and (iv) the  recorded  accountability  for  assets  is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.

          (x) Registration Rights.  Parent has not granted or agreed to grant to
any Person any rights (including "piggy back"  registration  rights) to have any
securities of Parent registered with the SEC or any other Governmental Entity.

          (y)  Listing  and  Maintenance  Requirements.  Parent has not,  in the
twelve months preceding the date hereof, received notice from the trading market
or stock  quotation  system on which Parent  Common Stock is listed or quoted to
the effect that  Parent is not in  compliance  with the  listing or  maintenance
requirements  of such trading market or stock quotation  system.  Parent is, and
has no reason to believe that it will not in the foreseeable  future continue to
be, in compliance with all such listing and maintenance requirements.

          (z) Integration. Neither Parent, its affiliates, nor any person acting
on its or their behalf,  has,  either  directly or indirectly made any offers or
sales  of any  security  or  solicited  any  offers  to buy any  security  under
circumstances  that would cause the issuance of the Parent  common shares in the
Equity Financing to be integrated with prior offerings by Parent for purposes of
the Securities Act, or any applicable  stockholder  approval  provisions,  which


<PAGE>

would  impair the  exemptions  relied upon in the Equity  Financing  or Parent's
ability to timely comply with its obligations hereunder.  Prior to the Effective
Time, neither Parent nor its affiliates will take any action or steps that would
cause the offer or issuance of the Parent common shares in the Equity  Financing
to be integrated with other  offerings which would impair the exemptions  relied
upon in the Equity  Financing  or  Parent's  ability to timely  comply  with its
obligations hereunder.  Prior to the Effective Time, Parent will not conduct any
offering other than the transactions contemplated hereby that will be integrated
with the offer or issuance of the Parent common shares issued in connection with
the Equity  Financing,  which  would  impair the  exemptions  relied upon in the
Equity  Financing  or Parent's  ability to timely  comply  with its  obligations
hereunder. In addition,  neither Parent nor its affiliates nor to its knowledge,
any person  acting on its or their  behalf,  has  engaged in any form of general
solicitation  or general  advertising  (within the meaning of Regulation D under
the Securities Act) in connection with the offer or sale of Parent common shares
in the Equity Financing.

          (aa) No  Disagreements  with  Accountants  and  Lawyers.  There are no
disagreements  of any kind  presently  existing,  or reasonably  anticipated  by
Parent to arise,  between  Parent and the  accountants  and lawyers  formerly or
presently  employed by Parent.  Parent and Sub are current  with  respect to any
fees owed to their accountants and lawyers.

          (bb) Environmental Matters.

                    (i)  Parent  is,  and  has  been,  in  compliance  with  all
          Environmental  Laws,  and  Parent  has not  received  any (A)  written
          communication  that  alleges  that Parent is in  violation  of, or has
          liability  under,  any  Environmental  Law,  (B)  written  request for
          information  pursuant to any Environmental Law or (C) notice regarding
          any requirement that is proposed for adoption or implementation  under
          any  Environmental  Law and that would be applicable to the operations
          of the Parent;

                    (ii) (A) Parent has obtained and is in  compliance  with all
          Permits pursuant to Environmental  Law  (collectively,  "Environmental
          Permits") necessary for its operations as currently conducted, (B) all
          such  Environmental  Permits are valid and in good  standing,  and (C)
          Parent has not been advised by any  Governmental  Entity of any actual
          or  potential  change in the  status or terms  and  conditions  of any
          Environmental Permit;

                    (iii) there are no  Environmental  Claims pending or, to the
          knowledge of Parent, threatened, against Parent; and

                    (iv) there have been no Releases of any  Hazardous  Material
          that  would   reasonably   be  expected  to  form  the  basis  of  any
          Environmental Claim against Parent.

                    (v) As used in this  Agreement:  (A)  "Environmental  Claim"
          means any and all  administrative,  regulatory  or  judicial  actions,
          suits,   orders,   demands,   directives,    claims,   investigations,
          proceedings  or notices of  violation  by or from any person  alleging
          liability  of  whatever  kind or nature  arising  out of,  based on or
          resulting  from (y) the  presence or Release  of, or exposure  to, any
          Hazardous  Materials at any location or (z) the failure to comply with
          any Environmental Law; (B)  "Environmental  Laws" means all applicable
          Laws,  Judgments,  legally binding agreements or Environmental Permits


<PAGE>

          issued,  promulgated  or  entered  into  by or with  any  Governmental
          Entity,  relating to  pollution,  natural  resources or  protection of
          endangered  or  threatened  species,  human health or the  environment
          (including  ambient air, surface water,  groundwater,  land surface or
          subsurface strata); (C) "Hazardous  Materials" means (y) any petroleum
          or petroleum products,  radioactive  materials or wastes,  asbestos in
          any  form,  urea  formaldehyde  foam  insulation  and  polychlorinated
          biphenyls  and (z) any other  chemical,  material,  substance or waste
          that in  relevant  form or  concentration  is  prohibited,  limited or
          regulated  under any  Environmental  Law; and (D) "Release"  means any
          actual or  threatened  release,  spill,  emission,  leaking,  dumping,
          injection, pouring, deposit, disposal, discharge,  dispersal, leaching
          or migration into or through the environment  (including  ambient air,
          surface  water,  groundwater,  land surface or  subsurface  strata) or
          within any building, structure, facility or fixture.

          (cc) Interim  Operations of Sub. Sub was formed solely for the purpose
of engaging  in the  transactions  contemplated  by this  Agreement  and has not
engaged in any business  activities  or conducted any  operations  other than in
connection with the transactions contemplated by this Agreement.

          (dd)  Ownership  of  Company   Securities.   Neither  Parent  nor  Sub
beneficially  owns or exercises  control or direction over, nor do they have any
rights to acquire,  any Company  Common  Shares or any other  securities  of the
Company.

          (ee)  Employees.  None of  Parent  or Sub has any  employees.  None of
Parent or Sub owes any compensation of any kind,  deferred or otherwise,  to any
current or  previous  employees.  None of Parent or Sub has any  written or oral
employment  agreements  with any officer or  director of Parent or Sub.  None of
Parent  or Sub is a party to or bound by any  collective  bargaining  agreement.
There are no loans or other obligations payable or owing by Parent or Sub to any
stockholder,  officer,  director or employee of Parent or Sub, nor are there any
loans or debts  payable or owing by any of such  Persons to Parent or Sub or any
guarantees by Parent or Sub of any loan or obligation of any nature to which any
such Person is a party.

          (ff) Control; Plans and Intentions; Etc.

                    (i) Parent  has been the sole  stockholder  and  controlling
          party of Sub since the  formation  of Sub and Parent  will be the sole
          stockholder and controlling  party of Sub immediately  prior to and as
          of the time of the Merger.

                    (ii) Following the Merger, the Surviving  Corporation has no
          present plan or intention to issue  additional  shares of its stock or
          to take any action that would result in Parent  losing  control of the
          Surviving Corporation.

                    (iii)  Parent has no present  plan or intention to reacquire
          any of its stock to be issued in the Merger.

                    (iv) Parent has no present  plan or  intention  to liquidate
          the Surviving Corporation,  to merge the Surviving Corporation with or
          into  another  corporation  (other  than the  Company  pursuant to the
          Merger  or  Parent  pursuant  to a  subsequent  merger);  to  sell  or
          otherwise  dispose of the stock of the  Surviving  Corporation;  or to
          cause the Surviving Corporation to sell or otherwise dispose of any of


<PAGE>

          its assets or of any of the assets  acquired from the Company,  except
          for dispositions  made in the ordinary course of business or transfers
          of assets to a corporation controlled by the Surviving Corporation.

          (gg) Disclosure.  The representations and warranties and statements of
fact made by Parent and Sub in this  Agreement  are,  as  applicable,  accurate,
correct and complete and do not contain any untrue  statement of a material fact
or omit to state any material fact necessary in order to make the statements and
information contained herein not false or misleading.

                                   ARTICLE IV

                    COVENANTS RELATING TO CONDUCT OF BUSINESS

SECTION   4.01. Conduct of Business.


          (a) Conduct of Business by the Company. Except as set forth in Section
4.01(a) of the Company  Disclosure Letter,  except as otherwise  contemplated by
this Agreement or except as consented to in writing by Parent, during the period
from the date of this Agreement to the Effective  Time,  the Company shall,  and
shall cause the Company Subsidiaries to, carry on their respective businesses in
the usual,  regular  and  ordinary  course in  substantially  the same manner as
heretofore  conducted  and as it is currently  proposed to be  conducted  and in
compliance in all material  respects with all applicable Laws and, to the extent
consistent  therewith,  use  reasonable  best  efforts to preserve  intact their
current  business  organizations,  keep  available the services of their current
officers and employees and preserve their material relationships with customers,
suppliers,  licensors,  licensees,   distributors  and  others  having  business
dealings with them. Without limiting the generality of the foregoing, during the
period  from  the  date of this  Agreement  to the  Effective  Time,  except  as
contemplated by this Agreement or as set forth in Section 4.01(a) of the Company
Disclosure Letter, or otherwise approved in writing by Parent (such approval not
to be unreasonably  withheld or delayed in the case of subsections  (iv) through
(vii) and, to the extent applicable,  subsection (viii)), the Company shall not,
and shall not permit any Company Subsidiary to:

                    (i) (x) declare,  set aside or pay any dividends on, or make
          any other  distributions in respect of, any of its shares,  other than
          dividends  and  distributions  by a direct or  indirect  wholly  owned
          Company Subsidiary to its parent, (y) split, combine or reclassify any
          of its  shares  or  issue  or  authorize  the  issuance  of any  other
          securities in respect of, in lieu of or in substitution for its shares
          or (z) purchase, redeem or otherwise acquire any shares of the Company
          or shares of any Company Subsidiary or any other securities thereof or
          any  rights,  warrants  or options to acquire any such shares or other
          securities  (other than  purchases in the ordinary  course  consistent
          with past practice and purchases  pursuant to agreements  entered into
          with  respect to the Company  Share Plans that are in effect as of the
          date of this Agreement);

                    (ii)  issue,  deliver,  sell,  grant,  pledge  or  otherwise
          encumber  any  of its  shares,  any  other  voting  securities  or any
          securities  convertible  into,  or any rights,  warrants or options to
          acquire, any such shares, voting securities or convertible  securities
          (other than (A) as  required  pursuant  to  existing  agreements  with
          current or former  employees,  consultants and directors,  and Company
          Benefit  Plans  (including  the Company  Share Plans) in effect on the


<PAGE>

          date of this Agreement,  (B) contributions and distributions of shares
          of the  Company  and rights  related  to shares of the  Company by the
          Company and the Company Subsidiaries pursuant to Company Benefit Plans
          (including the Company Share Plans) in the ordinary course of business
          consistent  with past  practice,  (C) the  issuance of Company  Common
          Shares and related  rights upon the exercise of Company  Stock Options
          outstanding on the date of this Agreement and in accordance with their
          present  terms,  and (D) the  issuance  of  shares of the  Company  to
          directors  as  payment  for their  usual  and  customary  meeting  and
          retainer fees;

                    (iii) except for the Company Certificate  Amendments,  amend
          its certificate of incorporation,  bylaws or other comparable  charter
          or  organizational  documents,  except  for  such  amendments  to  its
          certificate of incorporation,  bylaws and other comparable  charter or
          organizational  documents  (x) required by Law or (y) that do not have
          an adverse effect on the transactions contemplated by this Agreement;

                    (iv)   acquire  or  agree  to  acquire  (x)  by  merging  or
          consolidating  with,  or by  purchasing a  substantial  portion of the
          assets of, or by any other  manner,  any business or any  corporation,
          partnership,  limited liability company, joint venture, association or
          other  business  organization  or  division  thereof or (y) any assets
          (other than purchases of inventory in the ordinary  course of business
          consistent  with  past  practice),  in each case  other  than any such
          acquisitions  or  agreements  that are not material to the Company and
          the Company Subsidiaries, taken as a whole;

                    (v) sell, lease, license,  mortgage or otherwise encumber or
          subject  to any Lien or  otherwise  dispose of any  personal  property
          (other than sales of inventory or disposals of obsolete  assets in the
          ordinary  course of business  consistent  with past  practice) or real
          property of the Company or any  Company  Subsidiary  other than sales,
          leases,  licenses,  mortgages or encumbrances that are not material to
          the Company and the Company Subsidiaries, taken as a whole;

                    (vi)  (A)  incur  any  indebtedness  for  borrowed  money or
          guarantee any such  indebtedness of another person,  issue or sell any
          debt  securities  or  warrants  or other  rights to  acquire  any debt
          securities  of the Company or any Company  Subsidiary,  guarantee  any
          debt securities of another person, enter into any "keep well" or other
          agreement to maintain  any  financial  statement  condition of another
          person or enter into any arrangement having the economic effect of any
          of the foregoing,  in excess of $50,000 in the  aggregate,  except for
          (1) short-term  borrowings incurred in the ordinary course of business
          consistent  with past practice and (2)  refinancings  of  indebtedness
          existing  as of the date of this  Agreement,  or (B)  make any  loans,
          advances  (other than any advances to employees in the ordinary course
          of business  consistent  with past practice) or capital  contributions
          to, or investments  in, any other person,  other than to any direct or
          indirect wholly owned Company Subsidiary; or

                    (vii)  authorize  any of, or commit or agree to take any of,
          the foregoing actions.

          (b)  Conduct of  Business  by  Parent.  Except as set forth in Section
4.01(b) of the Parent  Disclosure  Letter,  except as otherwise  contemplated by


<PAGE>

this  Agreement or except as consented to in writing by the Company,  during the
period from the date of this Agreement to the Effective Time, Parent shall carry
on its business in the usual,  regular and ordinary course in substantially  the
same  manner as  heretofore  conducted  and as it is  currently  proposed  to be
conducted and in compliance in all material  respects with all  applicable  Laws
and, to the extent consistent therewith, use reasonable best efforts to preserve
intact its current  business  organizations,  keep available the services of its
current  officers and  employees  and preserve its material  relationships  with
customers,  suppliers,  licensors,  licensees,  distributors  and others  having
business  dealings with it.  Without  limiting the  generality of the foregoing,
during the period from the date of this Agreement to the Effective Time,  except
as  contemplated  by this  Agreement  or as set forth in Section  4.01(b) of the
Parent  Disclosure  Letter,  or  otherwise  approved in writing by the  Company,
Parent shall not:

                    (i) (A)  adjust,  split,  combine or  reclassify  the Parent
          Common Stock,  (B) make,  declare or pay any dividend or  distribution
          on, or, directly or indirectly, redeem, purchase or otherwise acquire,
          any shares of Parent  Common Stock or any  securities  or  obligations
          convertible  into or  exchangeable  for any  shares of  Parent  Common
          Stock,  (C) grant any person any right or option to acquire any shares
          of Parent Common Stock, (D) issue,  deliver or sell or agree to issue,
          deliver or sell any  additional  shares of Parent  Common Stock or any
          securities  or  obligations   convertible   into  or  exchangeable  or
          exercisable for any shares of Parent Common Stock or such  securities,
          or (E) enter into any agreement,  understanding  or  arrangement  with
          respect to the sale,  voting,  registration  or  repurchase  of Parent
          Common Stock;

                    (ii) directly or indirectly,  sell, transfer, lease, pledge,
          mortgage,  encumber  or  otherwise  dispose of any of its  property or
          assets;

                    (iii) make or propose  any  changes  in its  Certificate  of
          Incorporation or Bylaws;

                    (iv) merge or consolidate with any other person;

                    (v) acquire assets or capital stock of any other person;

                    (vi) incur,  create,  assume or otherwise  become liable for
          any indebtedness for borrowed money or assume,  guarantee,  endorse or
          otherwise as an  accommodation  become  responsible  or liable for the
          obligations of any other person;

                    (vii) create any subsidiaries;

                    (viii)   enter  into,   amend  or  modify  any   employment,
          severance,  termination or similar agreements or arrangements with, or
          grant any bonuses, salary increases,  severance or termination pay to,
          any officer, director,  consultant or employee, or pay any amounts not
          otherwise  due to, any  officer,  director,  consultant  or  employee,
          except as may be required by applicable Laws;

                    (ix) enter into, adopt or amend any "employee  benefit plan"
          as defined in Section 3(3) of ERISA;


<PAGE>


                    (x)  take any  action  that  could  give  rise to  severance
          benefits  payable to any  officer or director of Parent as a result of
          the  consummation  of any of the  transactions  contemplated  by  this
          Agreement   (including  in  connection   with  any   post-consummation
          termination of employment);

                    (xi)  change any  method or  principle  of Tax or  financial
          accounting, except to the extent required by GAAP or applicable Law;

                    (xii)  modify,  amend or  terminate,  or waive,  release  or
          assign any  material  rights or claims with respect to any Contract to
          which Parent is a party;

                    (xiii) enter into,  amend or terminate  any  confidentiality
          agreements, standstill agreements or similar arrangements or waive any
          provisions under any existing  confidentiality  agreement,  standstill
          agreement or similar arrangements;

                    (xiv)  write up,  write  down or write off the book value of
          any  assets,  except as required  by GAAP  consistently  applied or as
          required by applicable Law;

                    (xv) incur or commit to any capital expenditures;

                    (xvi) take any action  that  would  reasonably  be likely to
          result in (A) any  representation  or  warranty of Parent set forth in
          Article III becoming not true or not accurate in any material  respect
          or (B) any condition set forth in Article VI not being satisfied;

                    (xvii) enter into or carry out any other  transaction  other
          than in the ordinary course of business;

                    (xviii) make,  revoke or amend any Tax  election,  settle or
          compromise any claim or assessment  with respect to Taxes,  execute or
          consent to any waivers  extending the statutory  period of limitations
          with respect to the collection or assessment of any Taxes or amend any
          Tax Returns; or

                    (xix)  agree  (whether or not in writing) to take any of the
          foregoing actions.

          (c)  Conduct of  Business  of Sub.  During the period from the date of
this Agreement to the Effective  Time, Sub shall not engage in any activities of
any nature except as provided in or contemplated by this Agreement.

          (d) Advice of Changes.  The Company and Parent shall  promptly  advise
the other party orally and in writing of any change or event  which,  insofar as
can  reasonably be foreseen,  would result in any condition set forth in Article
VI not being satisfied.

SECTION   4.02. No Solicitation by the Company.


          (a) Other than as set forth in Section 4.02 of the Company  Disclosure
Letter,  from and after the date of this  Agreement,  the Company shall not, nor
shall it permit any Company  Subsidiary  to, nor shall it authorize or knowingly
permit any officer,  director or employee of or any investment banker, attorney,


<PAGE>

accountant  or other  advisor  or  representative  (collectively,  the  "Company
Representatives")  of, the Company or any Company  Subsidiary  to, (i)  solicit,
initiate or knowingly encourage the submission of any Company Takeover Proposal,
(ii) enter into any agreement with respect to any Company  Takeover  Proposal or
(iii)  other than  informing  persons of the  existence  of this  Section  4.02,
provide any non-public  information  regarding the Company to any third party or
engage in any  negotiations  or substantive  discussions in connection  with any
Company  Takeover  Proposal;  provided,  however,  that  prior to receipt of the
Company Shareholder Approval,  the Company and the Company  Representatives may,
in  response  to a  Company  Takeover  Proposal  that was not  solicited  by the
Company,  provide any non-public  information regarding the Company to any third
party or engage in any negotiations or substantive  discussions with such person
regarding  any Company  Takeover  Proposal,  in each case only if the  Company's
Board of Directors determines in good faith, after consultation with counsel and
its  financial  advisor,  that such actions  could result in a Company  Superior
Proposal. For purposes of this Agreement,  "Company Takeover Proposal" means (i)
any inquiry, proposal or offer for a merger, consolidation, business combination
or other similar transaction involving the Company,  (ii) any inquiry,  proposal
or offer to acquire in any manner, directly or indirectly,  more than 25% of the
outstanding  Company  Common  Shares or (iii) any inquiry,  proposal or offer to
acquire in any  manner,  directly  or  indirectly,  assets of the Company or the
Company  Subsidiaries  representing more than 25% of the consolidated  assets of
the  Company,  in each case other  than the  transactions  contemplated  by this
Agreement.  The Company  shall,  and shall  cause each  Company  Subsidiary  to,
immediately   cease  and  cause  to  be  terminated  any  existing   activities,
discussions  or  negotiations  by the  Company,  any Company  Subsidiary  or any
Company  Representative,  with any parties conducted  heretofore with respect to
any of the foregoing.

          (b) At any time  after the date  hereof  and prior to  receipt  of the
Company  Shareholder  Approval,  (x) in response to a Company Takeover  Proposal
which was not  solicited by the  Company,  the Board of Directors of the Company
may terminate this Agreement  pursuant to Section  7.01(d) and cause the Company
to enter into an agreement with respect to any Company  Superior  Proposal,  and
(y) the Board of  Directors  of the Company  may  withdraw or modify in a manner
adverse to Parent its  recommendation  to the Company's  shareholders  that they
give the Company  Shareholder  Approval,  but only if and to the extent that the
Company's Board of Directors  determines in good faith,  after consultation with
counsel and its  financial  advisor,  that failing to take any such action could
result in a breach of the fiduciary  duties of the Company's Board of Directors.
The term "Company Superior  Proposal" means a Company Takeover Proposal that the
Company's Board of Directors  determines in good faith,  after consultation with
counsel and its financial  advisor and taking into account all legal,  financial
and regulatory and other aspects of the Company  Takeover  Proposal,  the person
making the Company  Takeover  Proposal and all relevant  material  terms of such
Company  Takeover  Proposal and this  Agreement  (including  any changes to this
Agreement  proposed by Parent in response to a Company  Takeover  Proposal),  is
more favorable to the  shareholders of the Company than the Merger and the other
transactions  contemplated  by this  Agreement and for which  financing,  to the
extent  required,  is  then  committed  or  may  reasonably  be  expected  to be
committed.

SECTION   4.03. No Solicitation by Parent.


          (a) From and after the date of this  Agreement,  Parent shall not, nor
shall it authorize or knowingly  permit any officer,  director or employee of or
any investment banker,  attorney,  accountant or other advisor or representative
(collectively,  the  "Parent  Representatives")  of,  Parent  to,  (i)  solicit,
initiate or knowingly  encourage the submission of any Parent Takeover Proposal,
(ii) enter into any agreement  with respect to any Parent  Takeover  Proposal or
(iii)  other than  informing  persons of the  existence  of this  Section  4.02,
provide any non-public information regarding Parent to any third party or engage
in any  negotiations  or substantive  discussions in connection  with any Parent
Takeover  Proposal.  For purposes of this Agreement,  "Parent Takeover Proposal"
means (i) any inquiry, proposal or offer for a merger,  consolidation,  business
combination or other similar  transaction  involving  Parent,  (ii) any inquiry,
proposal or offer to acquire in any manner,  directly or  indirectly,  more than
25% of the  outstanding  shares of  Parent  Common  Stock or (iii) any  inquiry,
proposal or offer to acquire in any manner,  directly or  indirectly,  assets of
Parent  representing  more than 25% of the  assets of the  Parent,  in each case
other  than  the  transactions  contemplated  by this  Agreement.  Parent  shall
immediately   cease  and  cause  to  be  terminated  any  existing   activities,
discussions or  negotiations  by Parent or any Parent  Representative,  with any
parties conducted heretofore with respect to any of the foregoing.

          (b) Parent  promptly shall advise the Company orally and in writing of
the receipt of any Parent  Takeover  Proposal and of the  material  terms of any
such Parent Takeover Proposal and of any changes thereto.  Parent promptly shall
advise the Company orally and in writing of the  commencement of any discussions
with any third party or its representatives regarding a Parent Takeover Proposal
by such third party.

                                   ARTICLE V

                              ADDITIONAL AGREEMENTS

          SECTION  5.01.  Access to  Information;  Confidentiality.  Each  party
shall,  upon reasonable  notice,  afford to the other party and to the officers,
directors,  employees,   accountants,  counsel,  financial  advisors  and  other
representatives  of such other party,  reasonable  access during normal business
hours  during the period  prior to the  Effective  Time to all their  respective
books,  records,  properties  and other assets.  Each party shall be entitled to
make extracts and copies of such books and records.  Each party shall,  with the
prior consent of the other (which consent shall not be unreasonably  withheld or
delayed),  be  permitted  to  contact  and  communicate  with the other  party's
customers, employees, distributors and suppliers. All reviews conducted pursuant
to this Section  5.01 shall be  conducted in such manner as shall not  interfere
unduly  with  the  operations  of  the  parties'  respective   businesses,   and
information disclosed in connection therewith shall be held in confidence.

SECTION   5.02. Reasonable Best Efforts; Notification.


          (a) Upon the terms and  subject  to the  conditions  set forth in this
Agreement,  each of the parties  shall use  reasonable  best efforts to take, or
cause to be taken,  all actions,  and to do, or cause to be done,  and to assist
and cooperate with the other parties in doing, all things  necessary,  proper or
advisable to  consummate  and make  effective,  in the most  expeditious  manner
practicable,  the  Merger  and  the  other  transactions  contemplated  by  this
Agreement,  including (i) the obtaining of all necessary  actions or nonactions,
waivers, consents and approvals from Governmental Entities and the making of all


<PAGE>

necessary   registrations  and  filings  (including  filings  with  Governmental
Entities,  if any) and the taking of all reasonable steps as may be necessary to
obtain an approval or waiver from, or to avoid an action or  proceeding  by, any
Governmental Entity, (ii) the obtaining of all necessary consents,  approvals or
waivers from third  parties,  (iii) the defending of any lawsuits or other legal
proceedings,  whether judicial or administrative,  challenging this Agreement or
the  consummation of the transactions  contemplated by this Agreement  including
seeking to have any stay or temporary  restraining order entered by any court or
other  Governmental  Entity  vacated or  reversed,  and (iv) the  execution  and
delivery of any additional  instruments necessary to consummate the transactions
contemplated  by, and to fully carry out the purposes of, this  Agreement.  Each
party will  consult  with  counsel for the other  parties as to, and will permit
such  counsel to  participate  in, any  litigation  referred to in clause  (iii)
above.  In  connection  with and without  limiting the  foregoing,  Parent,  the
Company  and their  respective  Boards of  Directors  shall (x) take all  action
necessary so that no takeover  statute or similar  statute or  regulation  is or
becomes  applicable  to the  Merger,  this  Agreement  or any other  transaction
contemplated  by this  Agreement  and (y) if any  takeover  statute  or  similar
statute or regulation  becomes  applicable to the Merger,  this Agreement or any
other transaction  contemplated by this Agreement,  take all action necessary so
that the Merger and the other transactions contemplated by this Agreement may be
consummated  as  promptly  as  practicable  on the  terms  contemplated  by this
Agreement  and otherwise to minimize the effect of such statute or regulation on
the  Merger  and  the  other   transactions   contemplated  by  this  Agreement.
Notwithstanding  any provision to the contrary in this Section 5.02, the Company
and the Company  Representatives shall not be prohibited under this Section 5.02
from taking any action permitted by Section 4.02.

          (b) Each of Parent and the Company will (x) promptly  notify the other
party of any written  communication to that party from any  Governmental  Entity
located in the United  States  and,  to the extent  practicable,  outside of the
United States, in each case, with respect to this Agreement and the Merger, and,
subject  to  applicable  Law,  permit the other  party to review in advance  any
proposed written  communication to any such Governmental  Entity and incorporate
the other  party's  reasonable  comments,  (y) not agree to  participate  in any
substantive  meeting or discussion with any such Governmental  Entity in respect
of any filing,  investigation or inquiry concerning this Agreement or the Merger
unless it consults with the other party in advance and, to the extent  permitted
by such Governmental  Entity, gives the other party the opportunity to attend or
participate  and (z) furnish the other party with copies of all  correspondence,
filings and written  communications  between them and their affiliates and their
respective  representatives on one hand, and any such Governmental Entity or its
respective  staff on the other  hand,  with  respect to this  Agreement  and the
Merger. If any administrative or judicial action or proceeding is instituted (or
threatened to be instituted)  challenging any  transaction  contemplated by this
Agreement as violative of any applicable competition,  merger control, antitrust
or similar Law, or if any statute,  rule,  regulation,  executive order, decree,
injunction or administrative order is enacted, entered,  promulgated or enforced
by a  Governmental  Entity that would make the Merger or the other  transactions
contemplated by this Agreement illegal or would otherwise prohibit or materially
impair  or delay  the  consummation  of the  Merger  or the  other  transactions
contemplated by this  Agreement,  each of Parent and the Company shall cooperate
in all respects  with the other and use its  reasonable  best efforts to contest
and resist any such action or proceeding and to have vacated,  lifted,  reversed
or  overturned  any  decree,  judgment,   injunction  or  other  order,  whether
temporary,  preliminary  or  permanent,  that is in effect  and that  prohibits,


<PAGE>

prevents  or  restricts  consummation  of the  Merger or the other  transactions
contemplated  by this  Agreement  and to have such  statute,  rule,  regulation,
executive order, decree, injunction or administrative order repealed,  rescinded
or  made  inapplicable  so  as  to  permit   consummation  of  the  transactions
contemplated by this Agreement.

          (c) The Company shall give prompt notice to Parent, and Parent and Sub
shall give prompt notice to the Company,  of (i) any  representation or warranty
made by it or  contained  in this  Agreement  becoming  untrue  in any  material
respect,  or (ii) the  failure by it to comply  with or satisfy in any  material
respect any covenant, condition or agreement to be complied with or satisfied by
it under this Agreement;  provided,  however,  that no such  notification  shall
affect the representations,  warranties,  covenants or agreements of the parties
or the conditions to the obligations of the parties under this Agreement.

SECTION   5.03. Stock Options.


          (a)  Assumption of Company Stock Options.  At the Effective  Time, (i)
each  outstanding  Company Stock Option set forth in Section 5.03 of the Company
Disclosure   Letter  (the  "Assumed   Options"),   whether  vested  or  unvested
immediately prior to the Effective Time, to purchase Company Common Shares,  and
(ii) the Company Share Plans and all agreements  relating to the Assumed Options
shall be assumed by Parent.  Each Assumed  Option shall continue to have, and be
subject to, substantially the same terms and conditions as were applicable under
the Company  Share Plans and the  documents  governing the Company Stock Options
immediately  before the Effective Time, except that (x) each Assumed Option will
be  exercisable  for that number of whole shares of Parent Common Stock equal to
the product of the number of shares of Company  Common Shares that were issuable
upon exercise of such option  immediately prior to the Effective Time multiplied
by the Exchange  Ratio  (rounded to the nearest whole number of shares of Parent
Common  Stock)  and (y) the per share  exercise  price for the  shares of Parent
Common Stock  issuable upon exercise of such Assumed Option will be equal to the
quotient  determined  by dividing  the per share  exercise  price of the Company
Stock Option by the Exchange Ratio  (rounded up to the nearest whole cent).  The
date of grant of each Assumed Option will be the date on which the corresponding
Company Stock Option was granted. Notwithstanding the foregoing, with respect to
each Company Stock Option that is an incentive  stock option (within the meaning
of  Section  422(b) of the  Code),  no  adjustment  will be made that would be a
modification (within the meaning of Section 424(h) of the Code) to such option.

          (b) Stock Plans.  The Company and Parent agree that the Company  Share
Plans and all  relevant  stock plans of Parent  ("Parent  Stock  Plans") will be
amended,  to the extent necessary,  to reflect the transactions  contemplated by
this  Agreement,  including  conversion  of Company  Common Shares held or to be
awarded or paid pursuant to such benefit plans,  programs or  arrangements  into
shares  of  Parent  Common  Stock on a basis  consistent  with the  transactions
contemplated  by this  Agreement.  The  Company  and Parent  agree to submit the
amendments  to the  Parent  Stock  Plans  or the  Company  Share  Plans to their
respective  stockholders  if such  submission  is  determined to be necessary by
counsel to the Company or Parent after consultation with one another;  provided,
however,  that such approval will not be a condition to the  consummation of the
Merger.


<PAGE>


          (c)  Reservation  of Shares.  Parent will (i) reserve for issuance the
number of shares of Parent Common Stock that will become  subject to the benefit
plans, programs and arrangements referred to in this Section 5.03 and (ii) issue
or cause to be issued the  appropriate  number of shares of Parent Common Stock,
pursuant to applicable plans,  programs and  arrangements,  upon the exercise or
maturation of rights  existing  thereunder  at the Effective  Time or thereafter
granted or awarded.

          (d) Notices.  As soon as practicable  after the Effective Time, Parent
will deliver to the holders of the Assumed Options  appropriate  notices setting
forth  such  holders'  rights  pursuant  to the  Company  Share  Plans  and  the
agreements  evidencing  the grants of such Company  Stock  Options and that such
Company Stock Options and the related  agreements  will be assumed by Parent and
will  continue  in  effect  on the same  terms and  conditions  (subject  to the
adjustment  required by this Section 5.03 after giving effect to the Merger). As
soon  as  practicable  after  the  Effective  Time  and no  later  than  15 days
thereafter,  Parent will file the  Certificate of Compliance with the Bankruptcy
Court and provide  written  confirmation  of the completion of reverse merger to
the holders of the Parent Common Stock.

SECTION   5.04. Indemnification.


          (a)  Parent  shall,  and shall  cause the  Surviving  Corporation  to,
jointly  and  severally,  honor  all  the  Company's  obligations  to  indemnify
(including any  obligations to advance funds for expenses) the current or former
directors  and officers of the Company for acts or  omissions by such  directors
and  officers  occurring  prior to the  Effective  Time to the extent  that such
obligations of the Company exist on the date of this Agreement, whether pursuant
to the Company's Amended and Restated Certificate of Incorporation,  Amended and
Restated  Bylaws,   individual  indemnity  agreements  or  otherwise,  and  such
obligations shall survive the Merger and shall continue in full force and effect
in  accordance  with the  terms of such  Amended  and  Restated  Certificate  of
Incorporation,  Amended and Restated Bylaws and individual  indemnity agreements
from the  Effective  Time  until the  expiration  of the  applicable  statute of
limitations  with  respect to any claims  against  such  directors  or  officers
arising out of such acts or omissions.

          (b)  For a  period  of six  years  commencing  immediately  after  the
Effective  Time,  Parent  shall  cause to be  maintained  in effect the  current
policies of  directors'  and  officers'  liability  insurance  maintained by the
Company with respect to claims  arising from or related to facts or events which
occurred at or before the Effective Time.

          (c) From and after the Effective Time, to the fullest extent permitted
by Law, Parent shall,  and shall cause the Surviving  Corporation to,  indemnify
and hold  harmless the present and former  officers and directors of the Company
and the Company  Subsidiaries (each an "Indemnified  Party") against all losses,
claims, damages,  liabilities,  fees and expenses (including attorneys' fees and
disbursements),  judgments, fines and amounts paid in settlement (in the case of
settlements,  with the approval of the indemnifying  party (which approval shall
not be unreasonably  withheld))  (collectively,  "Losses"), as incurred (payable
monthly  within 5 business  days after the  written  request by the  Indemnified
Party, which request shall include  reasonable  evidence of the Losses set forth
therein) to the extent  arising  from,  relating to, or otherwise in respect of,
any actual or threatened action, suit,  proceeding or investigation,  in respect
of  actions  or  omissions  occurring  at or  prior  to the  Effective  Time  in


<PAGE>

connection with such Indemnified Party's duties as an officer or director of the
Company or any Company Subsidiary,  including in respect of this Agreement,  the
Merger and the other  transactions  contemplated  by this  Agreement;  provided,
however,  that an  Indemnified  Party shall not be  entitled to  indemnification
under this Section 5.04(c) for Losses arising out of actions or omissions by the
Indemnified Party constituting criminal conduct.

          (d) The provisions of this Section 5.04 are (i) intended to be for the
benefit of, and will be enforceable by, each Indemnified Party, his or her heirs
and his or her  representatives and (ii) in addition to, and not in substitution
for, any other rights to  indemnification  or contribution  that any such person
may have by contract or otherwise.

          (e) If the Surviving  Corporation  or any of its successors or assigns
(i) consolidates  with or merges into any other person and is not the continuing
or  surviving  corporation  or  entity of such  consolidation  or merger or (ii)
transfers or conveys all or  substantially  all of its  properties and assets to
any  person,  then,  and in each  such  case,  to the  extent  necessary  proper
provisions  will be made so that the  successors  or  assigns  of the  Surviving
Corporation,  as the case may be, shall assume the obligations set forth in this
Section 5.04.

          (f) In the event any action,  suit,  proceeding  or  investigation  is
asserted or made, any determination  required to be made with respect to whether
an Indemnified  Party's conduct  complies with the standards set forth under the
DGCL,  the  applicable  organizational  documents  of the Company or the Company
Subsidiaries or any indemnification agreements or arrangements of the Company or
the Company Subsidiaries, as the case may be, shall be made by independent legal
counsel selected by Parent and reasonably  acceptable to such Indemnified Party;
provided,  however, that nothing in this Section 5.04 shall impair any rights of
any  current  or former  director  or  officer  of the  Company  or any  Company
Subsidiary,  including pursuant to the respective  certificates of incorporation
of the Surviving  Corporation or the Company, or their respective  subsidiaries,
under the DGCL or otherwise.

          (g) Each of Parent,  the  Surviving  Corporation  and the  Indemnified
Parties shall cooperate,  and cause their respective affiliates to cooperate, in
the defense of any action,  suit,  proceeding or investigation and shall provide
access to properties  and  individuals  as  reasonably  requested and furnish or
cause to be  furnished  records,  information  and  testimony,  and attend  such
conferences,  discovery  proceedings,  hearings,  trials or  appeals,  as may be
reasonably requested in connection therewith.

          (h) The obligations of Parent and the Surviving Corporation under this
Section  5.04  shall  not be  terminated  or  modified  in such a  manner  as to
adversely affect any Indemnified Party to whom this Section 5.04 applies without
the consent of the affected  Indemnified  Party (it being expressly  agreed that
the  Indemnified  Parties to whom this Section 5.04 applies shall be third party
beneficiaries of this Section 5.04).

          SECTION 5.05. Fees and Expenses. All fees and expenses,  including any
fees payable to any broker,  investment  banker,  counsel or financial  advisor,
incurred in connection  with the Merger,  this  Agreement  and the  transactions
contemplated by this Agreement shall be paid by the party incurring such fees or
expenses, whether or not the Merger is consummated.


<PAGE>


          SECTION 5.06. Public  Announcements;  Transaction Form 8-K. Other than
with respect to any action taken pursuant to Section 4.02(b), Parent and Sub, on
the one hand,  and the Company on the other hand,  shall consult with each other
before  issuing,  and provide each other the  opportunity  to review and comment
upon, any press release or other public  statements (other than routine employee
communications) with respect to the transactions contemplated by this Agreement,
including  the  Merger,  and shall not issue any such press  release or make any
such public statement prior to such  consultation,  except as may be required by
applicable  Law. At least two business  days prior to the  Closing,  the parties
hereto shall prepare a Form 8-K announcing the Closing,  which shall include all
information required by such form, including all pro forma financial information
and information required in connection with Parent ceasing to be a shell company
as a result of the  transactions  contemplated  by this  Agreement.  The parties
agree  that  the  initial  press  release  to be  issued  with  respect  to  the
transactions  contemplated by this Agreement shall be mutually agreed upon prior
to the issuance thereof.

          SECTION 5.07. Tax Treatment. Each of Parent, Sub and the Company shall
use  its  reasonable   best  efforts  to  cause  the  Merger  to  qualify  as  a
reorganization  under the  provisions of Section  368(a) of the Code,  including
forbearing  from taking any action that would cause the Merger not to qualify as
a reorganization under the provisions of Section 368(a) of the Code.

          SECTION  5.08.  Schedule  14f-1  Information  Statement.  Parent shall
prepare the information  statement required by Rule 14f-1 under the Exchange Act
(the "14f-1 Information  Statement") in connection with the change of control to
be effected by the  appointment  of new  directors and officers of Parent at the
Closing  and,  at least ten days prior to Closing,  Parent  shall file the 14f-1
Information  Statement  with  the  SEC and  mail  the  same to each of  Parent's
stockholders.  Parent  shall  provide the  Company and its counsel a  reasonable
opportunity to review and comment on the 14f-1  Information  Statement  prior to
any such filing and mailing.  As promptly as  practicable  following the date of
this Agreement,  the Company shall use its reasonable best efforts to cause each
of the  individuals  identified  in  Section  5.11 to  provide  all  information
reasonably  requested  by  Parent  in order to  prepare  the  14f-1  Information
Statement.

          SECTION 5.09. Company  Stockholder  Approval and Consent  Solicitation
Statement.  The Company  shall,  as promptly  as  practicable,  duly submit this
Agreement and the  transactions  contemplated  by this  Agreement to the Company
stockholders  for approval and  adoption.  In connection  with the Merger,  this
Agreement and the transactions  contemplated  hereby,  the Board of Directors of
the Company  shall (i) recommend to the Company  stockholders  that they consent
to,  and  use  all  commercially   reasonable  efforts  to  obtain  the  Company
Stockholder  Approval,  and  (ii)  otherwise  comply  with all  requirements  of
applicable  law and the Company's  Certificate  of  Incorporation  and Bylaws in
connection  with  obtaining  the Company  Stockholder  Approval.  As promptly as
practicable  following the date of this Agreement,  the Company shall prepare an
information  statement relating to the Merger and the transactions  contemplated
by this  Agreement  (the  "Company  Solicitation  Statement").  As  promptly  as
practicable  following  the  date of  this  Agreement,  the  Company  shall,  in
accordance  with its  certificate of  incorporation,  bylaws and applicable Law,
solicit the written  consents of stockholders of the Company for the adoption of
this  Agreement  and cause a copy of the Company  Solicitation  Statement  to be
delivered  to the address on record for each  stockholder  of the Company who is
entitled to vote upon  adoption  of this  Agreement.  The  Company  Solicitation


<PAGE>

Statement shall include a statement to the effect that the board of directors of
the Company unanimously recommends that the Company stockholders execute written
consents approving the Merger and adopting and approving this Agreement.

          SECTION 5.10. Equity Financing.  Parent agrees to reasonably cooperate
with the Company in connection  with the Equity  Financing,  including,  without
limitation,  (a)  executing  and  delivering a joinder  agreement  (the "Joinder
Agreement") to the Placement  Agency  Agreement,  dated as of April 19, 2007, by
and among the  placement  agents for the  Equity  Financing  (collectively,  the
"Placement Agents") and the Company (the "Placement Agency Agreement"), pursuant
to which,  inter  alia,  Parent  shall  become a party to the  Placement  Agency
Agreement, (b) executing the Securities Purchase Agreement to be entered into by
and among the Company,  Parent and the investors purchasing equity securities of
Parent in the Equity  Financing,  and (c) causing  its outside  counsel to issue
customary legal opinions in connection with the Equity Financing.

          SECTION 5.11.  Parent Board  Composition.  Subject to compliance  with
Section 14(f) of the Exchange Act and Rule 14f-1 thereunder,  Parent shall cause
to be  delivered  at the  Closing,  written  resignations,  effective  as of the
Closing,  of all officers and directors of Parent in office immediately prior to
the Closing, and board resolutions electing the following  individuals effective
as of the Closing to the  positions  with  Parent  listed  opposite  their names
below:

Gil Van Bokkelen                   Chief Executive Officer and Chairman
                                     of the Board
William (BJ) Lehmann Jr.           President and Chief Operating Officer
John J. Harrington                 Chief Scientific Officer and Executive VP
                                     and Director
Kurt R. Brunden                    Senior VP - Biopharmaceuticals
Robert J. Deans                    Senior VP - Regenerative Medicine
Laura K. Campbell                  VP - Finance
George M. Milne                    Director
William C. Mulligan                Director
Jordan S. Davis                    Director
Floyd D. Loop                      Director

                                   ARTICLE VI

                              CONDITIONS PRECEDENT

          SECTION  6.01.  Conditions  to Each Party's  Obligation  to Effect the
Merger. The respective  obligation of each party to effect the Merger is subject
to the  satisfaction  or waiver on or prior to the Closing Date of the following
conditions:

          (a) Shareholder  Approval.  The Company  Stockholder  Approval and the
Parent Stockholder Approval shall have been obtained.

          (b) No  Injunctions  or Restraints.  No temporary  restraining  order,
preliminary  or  permanent  injunction  or other  order  issued  by any court of
competent  jurisdiction or other legal  restraint or prohibition  preventing the
consummation of the Merger shall be in effect;  provided,  however, that each of


<PAGE>

the parties shall have used  reasonable best efforts to prevent the entry of any
such  injunction  or other order and to appeal as promptly as possible  any such
injunction or other order that may be entered.

          (c) Equity Financing. Signed subscriptions shall have been received to
purchase no fewer than  8,000,000  units (the "Units") with a purchase  price of
$5.00 per Unit,  each Unit  consisting of one share of Parent Common Stock and a
five-year warrant to buy 0.25 shares of Parent Common Stock at an exercise price
of $6.00 per share, in a private  placement  offering  exempt from  registration
under the  Securities  Act pursuant to Regulation D promulgated  thereunder  and
otherwise  pursuant to the terms  outlined in the Private  Placement  Memorandum
dated April 19, 2007 ("Equity  Financing"),  which subscriptions shall represent
gross proceeds of not less than  $40,000,000,  with such gross  proceeds  having
been fully funded into an escrow account established for the Equity Financing.

          SECTION  6.02.  Conditions  to  Obligations  of  Parent  and Sub.  The
obligations  of Parent and Sub to effect the Merger are  further  subject to the
satisfaction  or  waiver  by  Parent  on or  prior  to the  Closing  Date of the
following conditions:

          (a) Representations and Warranties. The representations and warranties
of the  Company  set forth in this  Agreement  shall be true and  correct in all
material  respects,  as of the date of this Agreement and as of the Closing Date
as though  made on and as of the  Closing  Date,  except to the  extent any such
representation  or warranty  expressly relates to an earlier date (in which case
as of such date).  Parent shall have received a certificate  signed on behalf of
the Company by an executive officer of the Company to such effect.

          (b) Performance of Obligations of the Company.  The Company shall have
performed in all material  respects all obligations  required to be performed by
it under this  Agreement at or prior to the Closing Date,  and Parent shall have
received a certificate  signed on behalf of the Company by an executive  officer
of the Company to such effect.

          SECTION 6.03.  Conditions to Obligation of the Company. The obligation
of the Company to effect the Merger is further  subject to the  satisfaction  or
waiver  by  the  Company  on or  prior  to the  Closing  Date  of the  following
conditions:

          (a) Representations and Warranties. The representations and warranties
of Parent and Sub set forth in this Agreement  shall be true and correct,  as of
the date of this  Agreement  and as of the Closing Date as though made on and as
of the Closing Date,  except to the extent any such  representation  or warranty
expressly  relates  to an  earlier  date (in which  case as of such  date).  The
Company  shall  have  received  a  certificate  signed on behalf of Parent by an
executive officer of Parent to such effect.

          (b) Performance of Obligations of Parent and Sub. Parent and Sub shall
have performed in all material respects all obligations required to be performed
by them under this  Agreement or the BTHC Plan at or prior to the Closing  Date,
and the Company shall have received a certificate  signed on behalf of Parent by
an executive officer of Parent to such effect.

          (c) Amendments to Parent's  Certificate of  Incorporation.  The Parent
Certificate Amendments shall have been effected.


<PAGE>


          (d) Completion of Due Diligence.  The Company shall have completed its
due diligence review of Parent to the Company's sole satisfaction.

          (e) Legal Opinion.  Parent shall have delivered to the Company and the
Placement Agents, as addressees,  and certain of its significant  shareholders a
legal  opinion  in  the  form   requested  by  the  Company  and  customary  for
transactions similar to those contemplated by this Agreement.

          (f)   Resolutions.   Parent  shall  have   delivered  to  the  Company
resolutions  duly  adopted by the Board of  Directors  of each of Parent and Sub
authorizing and approving the Merger and the execution, delivery and performance
of this Agreement.

          (g) Good  Standing  Certificates.  Parent shall have  delivered to the
Company  a good  standing  certificate  for  each of  Parent  and Sub  from  the
Secretary of State of the State of  Delaware,  dated not earlier than three days
prior to the Closing.

          SECTION 6.04.  Frustration of Closing Conditions.  None of Parent, Sub
or the Company may rely on the  failure of any  condition  set forth in Sections
6.01,  6.02 or 6.03,  as the case may be, to be  satisfied  if such  failure was
caused by such party's  failure to comply with its obligations to consummate the
Merger and the other transactions contemplated by this Agreement, as required by
and subject to Section 5.02.

                                  ARTICLE VII

                        TERMINATION, AMENDMENT AND WAIVER

          SECTION  7.01.  Termination.  This  Agreement may be terminated at any
time  prior  to  the  Effective  Time,  whether  before  or  after  the  Company
Stockholder Approval:

          (a) by mutual written consent of Parent, Sub and the Company;

          (b) by either Parent or the Company:

                    (i) if the  Merger  shall  not have been  consummated  on or
          before  June 30,  2007 (the  "Outside  Date"),  unless the  failure to
          consummate the Merger is the result of a willful,  material  breach of
          this Agreement by the party seeking to terminate this Agreement;

                    (ii)  if  any  court  of  competent  jurisdiction  or  other
          Governmental  Entity  shall have issued an order,  decree or ruling or
          taken any other action permanently enjoining, restraining or otherwise
          prohibiting the Merger and such order, decree,  ruling or other action
          shall have become final and non-appealable; or

                    (iii) in the  event of a breach  by the  other  party of any
          representation,  warranty,  covenant or other  agreement  contained in
          this Agreement which (A) would give rise to the failure of a condition
          set forth in Section  6.02(a)  or  6.02(b)  (in the case of Parent) or
          Section  6.03(a)  or  6.03(b)  (in  the  case  of  the  Company),   as
          applicable,  and (B)  cannot be or has not been  cured  within 10 days
          after the  giving of  written  notice to the  breaching  party of such
          breach  (provided that the terminating  party is not then in breach of


<PAGE>

          any representation,  warranty,  covenant or other agreement that would
          give rise to a failure  of a  condition  as  described  in clause  (A)
          above);

          (c) by  either  (i)  Parent  in the event  that any  condition  to its
obligation to effect the Merger set forth in Section 6.01 or 6.02 is not capable
of being  satisfied  prior to the Outside Date, or (ii) the Company in the event
that any  condition to its  obligation to effect the Merger set forth in Section
6.01 or 6.03 is not capable of being satisfied prior to the Outside Date;

          (d) by the Company,  if the Board of  Directors  of the Company  shall
have approved,  and the Company shall  concurrently  with such termination enter
into,  a  definitive   agreement   providing  for  the   implementation  of  the
transactions contemplated by a Company Superior Proposal; or

          (e) by the Company,  if the  Company's due  diligence  examination  of
Parent  reveals  information  that  varies  materially  or  adversely  from  the
understandings  upon which the Company  agreed to proceed with the  transactions
contemplated by this  Agreement,  as determined by the Company in its reasonable
discretion.

          SECTION 7.02.  Effect of  Termination.  In the event of termination of
this Agreement by either the Company or Parent as provided in Section 7.01, this
Agreement  shall forthwith  become void and have no further effect,  without any
liability or  obligation on the part of Parent,  Sub or the Company,  other than
the  provisions  of the fourth  sentence of Section  5.01,  Section  5.05,  this
Section 7.02 and Article VIII, which provisions shall survive such  termination;
provided, however, that nothing herein will relieve any party from any liability
for any willful and material breach by such party of any of its representations,
warranties, covenants or agreements set forth in this Agreement.

          SECTION 7.03. Amendment.  This Agreement may be amended by the parties
at any time  before or after the  Company  Stockholder  Approval  and the Parent
Stockholder Approval;  provided,  however, that after such approval, there shall
be made no amendment that by Law requires  further  approval by the shareholders
of the Company or Parent,  as applicable,  without the further  approval of such
shareholders.  This  Agreement  may not be amended  except by an  instrument  in
writing signed on behalf of each of the parties.

          SECTION 7.04.  Extension;  Waiver.  At any time prior to the Effective
Time,  the  parties  may (a) extend the time for the  performance  of any of the
obligations or other acts of the other parties,  (b) waive any  inaccuracies  in
the  representations  and  warranties  contained  in  this  Agreement  or in any
document  delivered  pursuant to this Agreement or (c) subject to the proviso of
Section 7.03, waive compliance with any of the covenants or conditions contained
in this Agreement. Any agreement on the part of a party to any such extension or
waiver shall be valid only if set forth in an  instrument  in writing  signed on
behalf of such party.  The failure of any party to this  Agreement to assert any
of its rights under this Agreement or otherwise shall not constitute a waiver of
such rights.

          SECTION  7.05.  Procedure  for  Termination,  Amendment,  Extension or
Waiver.  A termination of this Agreement  pursuant to Section 7.01, an amendment
of this Agreement pursuant to Section 7.03 or an extension or waiver pursuant to


<PAGE>

Section 7.04 shall,  in order to be effective,  require,  in the case of Parent,
Sub or the Company, action by its Board of Directors.

                                  ARTICLE VIII

                               GENERAL PROVISIONS

          SECTION 8.01.  Nonsurvival of Representations and Warranties.  None of
the  representations  and  warranties  in this  Agreement  or in any  instrument
delivered  pursuant to this  Agreement  shall survive the Effective  Time.  This
Section 8.01 shall not limit any  covenant or agreement of the parties  which by
its terms contemplates performance after the Effective Time.

          SECTION 8.02.  Notices.  All notices,  requests,  claims,  demands and
other  communications  under this  Agreement  shall be in writing  (including by
facsimile)  and  shall be  deemed  given  upon  receipt  by the  parties  at the
following  addresses (or at such other address for a party as shall be specified
by like notice):

(a) if to Parent or Sub, to

                           BTHC VI, INC.
                           Telecopy No:  (972) 985-4014
                           Attention:    Timothy P. Halter

(b) if to the Company, to

                           ATHERSYS, INC.
                           Telecopy No:     (216) 432-2461
                           Attention:       President

SECTION   8.03. Definitions. For purposes of this Agreement:


          An  "affiliate"  of any person means  another  person that directly or
indirectly,  through one or more intermediaries,  controls, is controlled by, or
is  under  common  control  with,  such  first  person.  For  purposes  of  this
definition,  "control" when used with respect to any specified  person means the
power to  direct  the  management  and  policies  of such  person,  directly  or
indirectly,  whether through the ownership of voting securities,  by Contract or
otherwise,   and  the  terms   "controlling"   and  "controlled"  have  meanings
correlative to the foregoing.

          A "business  day" means any day,  other than a Saturday or Sunday,  on
which  commercial  banks are not required or  authorized to close in the City of
New York.

          "Company Benefit Plans" means employee benefit, bonus, profit sharing,
deferred compensation,  incentive compensation, share ownership, share purchase,
share option and vacation  plans or programs  maintained  for the benefit of the
current  or  former  employees  or  directors  of the  Company  or  any  Company
Subsidiary  that are  sponsored,  maintained or contributed to by the Company or
any  Company  Subsidiary,  or with  respect to which the  Company or any Company
Subsidiary  has any  liability,  including  any such plan  that is an  "employee
benefit plan" as defined in Section 3(3) of ERISA.


<PAGE>


          "knowledge"  of a  party  shall  mean  the  actual  knowledge  of  its
executive officers, after reasonable inquiry.

          "Parent  Common Stock" means shares of common stock,  par value $0.001
per share, of Parent.

          A "person" means an  individual,  corporation,  partnership,  company,
limited liability company,  joint venture,  association,  trust,  unincorporated
organization or other entity.

          A "subsidiary"  of any person means another  person,  an amount of the
voting  securities,  other voting ownership or voting  partnership  interests of
which is  sufficient  to elect at least a majority of its Board of  Directors or
other governing body (or, if there are no such voting interests,  50% or more of
the equity  interests of which) is owned  directly or  indirectly  by such first
person.

          SECTION  8.04.  Interpretation.  When a  reference  is  made  in  this
Agreement to an Article,  Section or Exhibit, such reference is to an Article or
Section of, or an Exhibit to, this Agreement  unless  otherwise  indicated.  The
table of  contents,  table of  defined  terms  and  headings  contained  in this
Agreement  are for  reference  purposes  only and do not  affect  in any way the
meaning or  interpretation  of this  Agreement.  Whenever  the words  "include,"
"includes" or "including" are used in this Agreement,  they will be deemed to be
followed by the words "without  limitation."  The words  "hereof,"  "herein" and
"hereunder"  and words of similar  import when used in this Agreement will refer
to  this  Agreement  as a  whole  and not to any  particular  provision  of this
Agreement.  The word  "will"  shall be  construed  to have the same  meaning and
effect as the word  "shall." All terms defined in this  Agreement  will have the
defined  meanings  when  used  in any  certificate  or  other  document  made or
delivered  pursuant hereto unless  otherwise  defined  therein.  The definitions
contained in this Agreement are applicable to the singular as well as the plural
forms of such terms and to the  masculine  as well as to the feminine and neuter
genders of such term. Any agreement,  instrument or statute  defined or referred
to herein or in any  agreement  or  instrument  that is referred to herein means
such agreement,  instrument or statute as from time to time amended, modified or
supplemented,  including (in the case of agreements or instruments) by waiver or
consent and (in the case of  statutes) by  succession  of  comparable  successor
statutes.  The parties hereto have  participated  jointly in the negotiating and
drafting of this  Agreement and, in the event an ambiguity or question of intent
arises,  this  Agreement  shall be construed  as jointly  drafted by the parties
hereto and no presumption or burden of proof shall arise favoring or disfavoring
any party by virtue of the authorship of any provision of this Agreement.

          SECTION  8.05.  Severability.  If any term or other  provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule or law,
or public policy,  all other  conditions and provisions of this Agreement  shall
nevertheless  remain in full force and effect so long as the  economic  or legal
substance of the transactions  contemplated hereby is not affected in any manner
materially  adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall  negotiate  in good  faith to modify  this  Agreement  so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that the  transactions  contemplated  hereby are fulfilled to the extent
possible.


<PAGE>


          SECTION 8.06.  Counterparts.  This Agreement may be executed in one or
more  counterparts,  all of which shall be considered one and the same agreement
and shall become  effective  when one or more  counterparts  have been signed by
each of the parties and delivered to the other parties.

          SECTION 8.07. Entire  Agreement;  No Third-Party  Beneficiaries.  This
Agreement  (a)  constitutes  the  entire  agreement,  and  supersedes  all prior
agreements  and  understandings,  both written and oral,  among the parties with
respect  to the  subject  matter  of  this  Agreement  and  (b)  except  for the
provisions of Article II and Sections 5.03 and 5.04,  are not intended to confer
upon any person other than the parties hereto any rights or remedies.

          SECTION 8.08.  Governing Law. This Agreement shall be governed by, and
construed in accordance  with, the laws of the State of Delaware,  regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.

          SECTION  8.09.  Assignment.  Neither  this  Agreement  nor  any of the
rights,  interests or  obligations  under this Agreement  shall be assigned,  in
whole or in part, by operation of law or otherwise by any of the parties without
the prior written consent of the other parties. Any purported assignment without
such consent shall be void.  Subject to the preceding  sentence,  this Agreement
will be  binding  upon,  inure to the  benefit  of, and be  enforceable  by, the
parties and their respective  successors and assigns.  Parent shall cause Sub to
perform its obligations hereunder.

          SECTION 8.10.  Enforcement.  The parties agree that irreparable damage
would occur in the event that any of the  provisions of this  Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is  accordingly  agreed that the parties  shall be entitled to an  injunction or
injunctions to prevent  breaches of this  Agreement and to enforce  specifically
the terms and  provisions of this  Agreement in any Federal court located in the
State of  Delaware  or in Delaware  state  court,  this being in addition to any
other remedy to which they are entitled at law or in equity.  In addition,  each
of the parties hereto (a) consents to submit itself to the personal jurisdiction
of any Federal  court  located in the State of Delaware  or any  Delaware  state
court in the  event  any  dispute  arises  out of this  Agreement  or any of the
transactions contemplated by this Agreement, (b) agrees that it will not attempt
to deny or defeat  such  personal  jurisdiction  by motion or other  request for
leave from any such court and (c) agrees  that it will not  initiate  any action
relating  to this  Agreement  or any of the  transactions  contemplated  by this
Agreement  in any court  other  than a  Federal  court  sitting  in the State of
Delaware or a Delaware state court.



<PAGE>


          IN WITNESS  WHEREOF,  Parent,  Sub and the  Company  have  caused this
Agreement to be signed by their respective  officers  thereunto duly authorized,
all as of the date first written above.

                                                BTHC VI, INC.

                                                by  /s/ Timothy P. Halter
                                                    ----------------------------
                                                    Name:  Timothy P. Halter
                                                    Title:  President


                                                B-VI ACQUISITION CORP.

                                                by /s/ Timothy P. Halter
                                                    ----------------------------
                                                    Name:  Timothy P. Halter
                                                    Title:  President


                                                ATHERSYS, INC.

                                                by /s/ Gil Van Bokkelen
                                                    ----------------------------
                                                    Name: Gil Van Bokkelen
                                                    Title: CEO