EXECUTION COPY
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EXHIBIT 10.13
STOCK PURCHASE AGREEMENT
Dated as of September 30, 2003
among
VIACELL, INC.,
KOURION THERAPEUTICS AG
and
THE SELLERS PARTY HERETO
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Stock Purchase Agreement
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TABLE OF CONTENTS
1. DEFINITIONS; CERTAIN RULES OF CONSTRUCTION.........................................1
2. PURCHASE AND SALE OF SHARES.......................................................11
2.1. Purchase and Sale of Shares.........................................11
2.2. Escrowed Shares.....................................................12
2.3. Contingent Shares...................................................13
2.4. Milestone Payments..................................................14
2.5. The Closing.........................................................15
2.6. Closing Deliveries..................................................15
2.7. Purchase Price Adjustment...........................................16
3. REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANY............................16
3.1. Capitalization and Ownership........................................16
3.2. Corporate Organization..............................................17
3.3. Financial Statements................................................17
3.4. Absence of Certain Developments.....................................18
3.5. Powers and Authority................................................19
3.6. No Breaches, Violations or Consents.................................19
3.7. Title to and Condition of the Assets................................19
3.8. No Claims or Litigation.............................................19
3.9. Contracts...........................................................20
3.10. Intellectual Property..............................................20
3.11. Insurance..........................................................21
3.12. Bank Accounts and Powers of Attorney...............................22
3.13. Affiliated Transactions............................................22
3.14. Employees and Agents...............................................22
3.15. Employee Benefit Plans.............................................22
3.16. Tax Returns and Payments...........................................22
3.17. Disclosures........................................................23
3.18. Debt ..............................................................23
3.19. Real Property......................................................23
3.20. Environmental Matters..............................................23
3.21. Illegal Payments, etc..............................................24
3.22. Brokers' Fees......................................................24
3.23. Company Assets.....................................................24
3.24. Closing Date Net Working Capital Statement.........................24
4. REPRESENTATIONS AND WARRANTIES RELATING TO THE SELLERS............................24
4.1. Authorization.......................................................25
4.2. No Violation or Approval............................................25
4.3. Title to Shares.....................................................25
4.4. Qualification of the Sellers........................................26
4.5. Restrictive Legends.................................................26
4.6. Brokers' Fees.......................................................27
5. REPRESENTATIONS AND WARRANTIES OF VIACELL.........................................27
5.1. Organization and Standing...........................................27
5.2. ViaCell Subsidiaries................................................28
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5.3. Authority to Execute and Perform Agreements.........................28
5.4. Capitalization and Title to Shares..................................28
5.5. Financial Statements................................................29
5.6. No Material Adverse Change..........................................30
5.7. Tax Matters.........................................................31
5.8. Compliance with Laws................................................33
5.9. Consents; No Breach.................................................33
5.10. Actions and Proceedings............................................34
5.11. Contracts and Other Agreements.....................................34
5.12. Title to Properties; Absence of Liens and Encumbrances.............36
5.13. Condition and Sufficiency of Assets................................37
5.14. Intellectual Property..............................................37
5.15. Absence of Undisclosed Liabilities.................................38
5.16. Commercial Relationships...........................................38
5.17. Employee Benefit Plans.............................................38
5.18. Employee Relations.................................................39
5.19. Insurance..........................................................39
5.20. Environmental Compliance...........................................39
5.21. Bank Accounts and Powers of Attorney...............................40
5.22. Brokerage..........................................................40
5.23. Investment Company Act.............................................40
5.24. Full Disclosure....................................................40
5.25. Financial..........................................................41
6. COVENANTS OF THE COMPANY AND THE SELLERS..........................................41
6.1. Closing ............................................................41
6.2. Expenses ...........................................................41
6.3. Sellers' Release....................................................41
6.4. Confidentiality.....................................................41
6.5. Further Assurances; Obligation to Satisfy Closing Conditions........42
7. COVENANTS OF VIACELL..............................................................42
7.1. Financing...........................................................42
7.2. Company Employee Retention..........................................42
7.3. New Company Employment Contracts....................................42
7.4. Consultancy Arrangements............................................42
7.5. Advisory Board Position.............................................43
7.6. USSC Technology Committee...........................................43
7.7. European Operations.................................................43
7.8. Milestones..........................................................43
7.9. Institutional Obligations...........................................44
7.10. Change of Control..................................................44
8. CONDITIONS TO VIACELL'S OBLIGATIONS AT THE CLOSING................................44
8.1. Representations and Warranties......................................44
8.2. Performance.........................................................44
8.3. Stock and Option Certificates.......................................44
8.4. Qualifications......................................................45
8.5. Absence of Litigation...............................................45
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8.6. Legal Opinion.......................................................45
8.7. Consents, etc.......................................................45
8.8. Stockholder Approval................................................45
8.9. Proceedings and Documents...........................................45
8.10. Ancillary Agreements...............................................45
8.11. Financing..........................................................45
8.12. No Material Adverse Change.........................................45
8.13. Compliance Certificate.............................................45
8.14. Initial Budget.....................................................46
8.15. Company Employee Contracts.........................................46
8.16. Resignations.......................................................46
8.17. Supporting Documents...............................................46
8.18. Net Working Capital................................................46
9. CONDITIONS TO THE COMPANY AND THE SELLERS' OBLIGATIONS AT THE CLOSING.............46
9.1. Representations and Warranties......................................46
9.2. Performance.........................................................47
9.3. Qualifications......................................................47
9.4. Absence of Litigation...............................................47
9.5. Legal Opinion.......................................................47
9.6. Consents, etc.......................................................47
9.7. Proceedings and Documents...........................................47
9.8. Note Escrow Agreement...............................................47
9.9. Series I Agreements.................................................47
9.10. Ancillary Agreements...............................................47
9.11. No Material Adverse Change.........................................47
9.12. Stock Certificates.................................................47
9.13. Compliance Certificate.............................................48
9.14. Financing..........................................................48
9.15. Initial Budget.....................................................48
9.16. Supporting Documents...............................................48
10. TERMINATION......................................................................48
10.1. Termination of Agreement...........................................48
10.2. Effect of Termination..............................................49
11. INDEMNIFICATION..................................................................49
11.1. Indemnification by the Sellers.....................................49
11.2. Time for Claims....................................................50
11.3. Third Party Claims.................................................51
11.4. No Circular Recovery...............................................52
11.5. Indemnity Escrow; Calculation of Several Liability.................53
11.6. Offset ............................................................54
11.7. Consequential Damages..............................................54
11.8. Knowledge and Investigation........................................54
11.9. Remedies Cumulative................................................54
11.10. Exclusive Remedy..................................................54
12. MISCELLANEOUS....................................................................55
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12.1. Notices ...........................................................55
12.2. Succession and Assignment; No Third-Party Beneficiary..............56
12.3. Consent of Sellers.................................................56
12.4. Amendments and Waivers.............................................56
12.5. Provisions Concerning Sellers' Representative......................56
12.6. Entire Agreement...................................................57
12.7. Schedules; Listed Documents, etc...................................57
12.8. Counterparts.......................................................58
12.9. Severability.......................................................58
12.10. Headings..........................................................58
12.11. Governing Law.....................................................58
12.12. Dispute Resolution; Forum.........................................58
12.13. Specific Performance..............................................59
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EXHIBITS
Exhibit A Form of Notes
Exhibit B Form of Escrow Agreement
Exhibit C Form of Opinion by Company Counsel
Exhibit D Form of Compliance Certificate
Exhibit E Form of Opinion by ViaCell Counsel
Exhibit F Initial Budget
Exhibit G Closing Date Net Working Capital Statement/Net Working
Capital Accounting Principles
Exhibit H Form of Assignment
Exhibit I Form of Employment Agreement
Exhibit J Series I Agreements
Exhibit K Form of Note Escrow Agreement
Exhibit L Transaction Fee Statement
SCHEDULES
Schedule 1 Series A Sellers
Schedule 2 Common Sellers
Schedule 3 Escrowed Shares
Schedule 4 Company Options
Schedule 5 Contingent Shares
Schedule 6 Percentage Ownership
Schedule 3.1 Capitalization and Ownership
Schedule 3.3 Company Financial Statements
Schedule 3.4 Absence of Certain Developments
Schedule 3.5 Powers and Authority
Schedule 3.6 No Breaches, Violations or Consents
Schedule 3.7 Title to Assets
Schedule 3.9 Contracts
Schedule 3.10 Intellectual Property
Schedule 3.11 Insurance
Schedule 3.12 Bank Accounts and Powers of Attorney
Schedule 3.13 Transactions with Affiliates
Schedule 3.14 Employees and Agents
Schedule 3.15 Company Plans
Schedule 3.18 Debt
Schedule 3.19 Real Property
Schedule 3.22 Brokers
Schedule 4.2 Seller Consents
Schedule 4.6 Seller Brokers
Schedule 5.2 ViaCell Subsidiaries
Schedule 5.4 Capitalization of ViaCell
Schedule 5.5 ViaCell Financial Statements
Schedule 5.6 Material Adverse Changes
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Schedule 5.7 ViaCell Tax Matters
Schedule 5.8 ViaCell Environmental Matters
Schedule 5.9 ViaCell Consents
Schedule 5.10 ViaCell Actions and Proceedings
Schedule 5.11 ViaCell Contracts
Schedule 5.12 ViaCell Real Property
Schedule 5.14 ViaCell Intellectual Property
Schedule 5.17 ViaCell Benefit Plans
Schedule 5.19 ViaCell Insurance
Schedule 5.21 ViaCell Bank Accounts and Powers of Attorney
Schedule 6.3 Seller Release
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT dated as of September 30, 2003 (as
amended or otherwise modified, the "Agreement") by and among ViaCell, Inc., a
Delaware corporation ("ViaCell" or "Buyer"), Kourion Therapeutics AG, a German
corporation (the "Company"), and the shareholders of the Company signatory
hereto (each a "Seller" and, collectively, the "Sellers").
RECITALS
WHEREAS, the Sellers are the record and beneficial owners of all of the
outstanding shares of capital stock of the Company (collectively, the "Shares"),
consisting of Series A Preference shares, no par value, of the Company (the
"Series A Shares") and Common Shares, no par value, of the Company (the "Common
Shares");
WHEREAS, certain Sellers own and desire to sell all of the outstanding
Series A Shares to ViaCell, and the remaining Sellers, as well as the Series A
Sellers, own and desire to sell all of the outstanding Common Shares to ViaCell;
WHEREAS, upon the sale of such Series A Shares and Common Shares to
ViaCell, ViaCell will own all of the outstanding equity interests in the
Company;
WHEREAS, ViaCell desires to purchase the Series A Shares and the Common
Shares from the Sellers on the terms and subject to the conditions set forth in
this Agreement.
AGREEMENT
NOW THEREFORE, in consideration of the premises and mutual promises
herein made, and in consideration of the representations, warranties and
covenants herein contained, ViaCell, the Company and the Sellers hereby agree as
follows:
1. DEFINITIONS; CERTAIN RULES OF CONSTRUCTION.
As used herein, the following terms will have the following meanings:
"Action" means any claim, action, cause of action or suit (whether in
contract or tort or otherwise), litigation (whether at law or in equity, whether
civil or criminal), controversy, assessment, arbitration, investigation,
hearing, charge, complaint, demand, notice or proceeding to, from, by or before
any Governmental Authority.
"Affiliate" means, with respect to any specified Person at any time, (a)
each Person directly or indirectly controlling, controlled by or under direct or
indirect common control with such specified Person at such time, (b) each Person
who is at such time an officer or director of, or direct or indirect beneficial
holder of at least 20% of any class of the Equity Interests of, such specified
Person, (c) each Person that is managed by a common group of executive officers
and/or directors as such specified Person, (d) the Members of the Immediate
Family (i) of each officer, director or holder described in clause (b) and (ii)
if such specified Person is an
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September 30, 2003
individual, of such specified Person and (e) each Person of which such specified
Person or an Affiliate (as defined in clauses (a) through (d)) thereof will,
directly or indirectly, beneficially own at least 20% of any class of Equity
Interests at such time.
"Agreement" is defined in the Preamble.
"Ancillary Agreements" means (i) the Notes, (ii) the Escrow Agreement,
(iii) any employment or consulting agreements with the Company or ViaCell in
effect following the Closing, and (iv) any other agreements as disclosed herein
that are necessary for the consummation of the Contemplated Transactions.
"Assets" means assets held for or used in connection with and/or
necessary for the current and currently proposed operation of the Company.
"Assignment" is defined in Section 2.6.1.
"Audited Financial Statements" is defined in Section 3.3.1.
"Business" means the businesses conducted by the Company and proposed to
be conducted by the Company.
"Business Day" means any weekday other than a weekday on which banks in
Germany are authorized or required to be closed.
"Buyer" is defined in the Preamble.
"Cap" is defined in Section 11.1.2.
"Cash Payment" is defined in Section 2.6.6.
"Change of Control" shall mean an event in which (i) ViaCell consummates
a merger or consolidation with any other entity, other than a merger or
consolidation which would result in the voting securities of ViaCell outstanding
immediately prior thereto to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) more than 50% of
the combined voting power of the voting securities of ViaCell or such surviving
entity outstanding immediately after such merger or consolidation; (ii) ViaCell
consummates the sale or disposition of all or substantially all of its assets;
(iii) more than fifty percent (50%) of the outstanding capital stock of ViaCell
is transferred to a third party in a single transaction or series of related
transactions; (iv) ViaCell consummates a liquidation or other liquidating sale;
or (v) ViaCell consummates a merger or consolidation in which it is not the
surviving company and which is not otherwise described in clause (i).
"Closing" is defined in Section 2.5.
"Closing Date" is defined in Section 2.5.
"Closing Date Net Working Capital Statement" means the written
statement, prepared in accordance with GAAP and the methodology agreed upon by
the Buyer and the Company as set
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forth on Exhibit G hereto setting forth in reasonable detail the Company's
determination of Net Working Capital as of the Closing Date.
"Code" means the U.S. Internal Revenue Code of 1986.
"Common Shares" is defined in the Preamble.
"Common Sellers" are the holders of 100% of the Common Shares, as set
forth on Schedule 2 to this Agreement.
"Company" is defined in the Preamble.
"Company's Knowledge" means the actual knowledge of the Company,
including the officers of the Company and such other employees of the Company
who would be reasonably expected to have knowledge of the matter in question.
"Company Option Holder" means a Person entitled to receive a Company
Option as set forth on Schedule 4 hereto.
"Company Options" means the options to purchase any capital stock of the
Company pursuant to the Company's stock option plan.
"Company Plans" is defined in Section 3.15.
"Company Technology" is defined in Section 3.10.1.
"Compensation" means, with respect to any Person, all salaries,
compensation, remuneration, bonuses or benefits of any kind or character
whatever (including issuances or grants of Equity Interests), made directly or
indirectly by the Company to such Person or Affiliates of such Person.
"Contemplated Transactions" means, collectively, the transactions
contemplated by this Agreement, including (a) the sale and purchase of the
Shares, and (b) the execution, delivery and performance of the Ancillary
Agreements.
"Contingent Common Stock" is defined in Section 2.3.1.
"Contingent Shares" is defined in Section 2.3.
"Contracts" is defined in Section 3.9.
"Contractual Obligation" means, with respect to any Person, any
contract, agreement, deed, mortgage, lease, license, commitment, promise,
undertaking, arrangement or understanding, whether written or oral and whether
express or implied, or other document or instrument (including any document or
instrument evidencing or otherwise relating to any Debt) to which or by which
such Person is a party or otherwise subject or bound or to which or by which any
property, business, operation or right of such Person is subject or bound.
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"Debt" means, with respect to any Person, all obligations (including all
obligations in respect of principal, accrued interest, penalties, fees and
premiums) of such Person (a) for borrowed money (including overdraft
facilities), (b) evidenced by notes, bonds, debentures or similar Contractual
Obligations, (c) for the deferred purchase price of property, goods or services
(other than trade payables or accruals incurred in the Ordinary Course of
Business), (d) under capital leases (in accordance with GAAP), (e) in respect of
letters of credit and bankers' acceptances, (f) for Contractual Obligations
relating to interest rate protection, swap agreements and collar agreements and
(g) in the nature of Guarantees of the obligations described in clauses (a)
through (f) above of any other Person.
"Dispute" is defined in Section 12.12.1.
"Encumbrance" means any charge, claim, community or other marital
property interest, condition, equitable interest, lien, license, option, pledge,
security interest, mortgage, right of way, easement, encroachment, servitude,
right of first offer or first refusal, buy/sell agreement and any other
restriction or covenant with respect to, or condition governing the use,
construction, voting (in the case of any security or equity interest), transfer,
receipt of income or exercise of any other attribute of ownership.
"Enforceable" means, with respect to any Contractual Obligation stated
to be Enforceable by or against any Person, that such Contractual Obligation is
a legal, valid and binding obligation of such Person enforceable by or against
such Person in accordance with its terms, except to the extent that enforcement
of the rights and remedies created thereby is subject to bankruptcy, insolvency,
reorganization, moratorium and other similar laws of general application
affecting the rights and remedies of creditors and to general principles of
equity (regardless of whether enforceability is considered in a proceeding in
equity or at law).
"Environmental Laws" means any Legal Requirement relating to (a)
releases or threatened releases of Hazardous Substances, (b) pollution or
protection of public health or the environment or worker safety or health or (c)
the manufacture, handling, transport, use, treatment, storage, or disposal of
Hazardous Substances.
"Equity Interests" means (a) any capital stock, share, partnership or
membership interest, unit of participation or other similar interest (however
designated) in any Person and (b) any option, warrant, purchase right,
conversion right, exchange rights or other Contractual Obligation which would
entitle any Person to acquire any such interest in such Person or otherwise
entitle any Person to share in the equity, profit, earnings, losses or gains of
such Person (including stock appreciation, phantom stock, profit participation
or other similar rights).
"Escrow Agent" is defined in Section 2.2.
"Escrow Agreement" is defined in Section 2.2.
"Escrow Proportionate Share" is defined in Section 2.2.
"Escrowed Common Stock" is defined in Section 2.2.1.
"Escrowed Shares" is defined in Section 2.2.
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"Facilities" means any buildings, plants, improvements or structures
located on the Real Property.
"FDA" shall mean the United States Food and Drug Administration.
"Financial Statements" is defined in Section 3.3.1.
"Financing" means the Series J financing of ViaCell, as described in
Section 8.11 of this Agreement, which is a condition to the closing of the
Contemplated Transactions.
"GAAP" means, in the case of ViaCell, generally accepted accounting
principles in the United States, or, in the case of the Company, the German
equivalent ("Grundsatze ordnungsgema(beta)er Buchfuhrung"), in each case as in
effect from time to time.
"Government Order" means any order, writ, judgment, injunction, decree,
stipulation, ruling, determination or award entered by or with any Governmental
Authority.
"Governmental Authority" means any United States federal, state or local
or any foreign government, or political subdivision thereof, or any
multinational organization or authority or any authority, agency or commission
entitled to exercise any administrative, executive, judicial, legislative,
police, regulatory or taxing authority or power, any court or tribunal (or any
department, bureau or division thereof), or any arbitrator or arbitral body.
"Guarantee" means, with respect to any Person, (a) any guarantee of the
payment or performance of, or any contingent obligation in respect of, any Debt
or other Liability of any other Person, (b) any other arrangement whereby credit
is extended to any obligor (other than such Person) on the basis of any promise
or undertaking of such Person (i) to pay the Debt or other Liability of such
obligor, (ii) to purchase any obligation owed by such obligor, (iii) to purchase
or lease assets under circumstances that are designed to enable such obligor to
discharge one or more of its obligations or (iv) to maintain the capital,
working capital, solvency or general financial condition of such obligor and (c)
any liability as a general partner of a partnership or as a venturer in a joint
venture in respect of Debt or other obligations of such partnership or venture.
"Hazardous Substance" is defined in Section 3.20.
"Indemnity Claim" means a claim for indemnity under Section 11.
"Indemnified Party" means, with respect to any Indemnity Claim, the
party asserting such claim under Section 11.1.
"Indemnifying Party" means, with respect to any Indemnity Claims, the
party against whom such claim is asserted.
"Initial Budget" means the projected budget for the business of the
Company following the Closing (including provisions for the continuation of the
Company's research and development operations and the launching of European cord
blood banking), attached hereto as Exhibit F,
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which will take effect on the Closing Date, and will be revised from time to
time in ViaCell's reasonable business judgment.
"Insurance Policies" is defined in Section 3.11.
"Intellectual Property" means the entire right, title and interest in
and to all proprietary rights of every kind and nature, including all rights and
interests pertaining to or deriving from:
(a) patents, copyrights, mask work rights, technology,
know-how, processes, trade secrets, algorithms, inventions, works,
proprietary data, databases, formulae, research and development data
and computer software or firmware;
(b) trademarks, trade names, service marks, service names,
brands, trade dress and logos, and the goodwill and activities
associated therewith;
(c) domain names, rights of privacy and publicity, moral
rights, and proprietary rights of any kind or nature, however
denominated, throughout the world in all media now known or hereafter
created;
(d) any and all registrations, applications, recordings,
licenses, common-law rights and Contractual Obligations relating to any
of the foregoing; and
(e) all Actions and rights to ▇▇▇ at law or in equity for any
past or future infringement or other impairment of any of the
foregoing, including the right to receive all proceeds and damages
therefrom, and all rights to obtain renewals, continuations, divisions
or other extensions of legal protections pertaining thereto.
"Legal Requirement" means any United States federal, state or local or
foreign law, statute, standard, ordinance, code, rule, regulation, resolution or
promulgation, or any Governmental Order, or any license, franchise, permit or
similar right granted under any of the foregoing, or any similar provision
having the force or effect of law.
"Liability" means, with respect to any Person, any liability or
obligation of such Person whether known or unknown, whether asserted or
unasserted, whether determined, determinable or otherwise, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
whether incurred or consequential, whether due or to become due and whether or
not required under GAAP to be accrued on the financial statements of such
Person.
"Licenses" is defined in Section 3.10.5.
"Losses" is defined in Section 11.1.1.
"MSAB" means Medical and Scientific Advisory Board of ViaCell, as
further described in Section 7.5.
"Material Adverse Effect" means any change in, or effect on, the
business, operations, assets, prospects or condition (financial or otherwise) of
a Person which, when considered either individually or in the aggregate together
with all other adverse changes or effects with respect to
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which such phrase is used in this Agreement, is, or is reasonably likely to be,
materially adverse to the business, operations, assets, prospects or condition
(financial or otherwise) of such Person and its Subsidiaries, taken as a whole,
other than changes, effects or circumstances (i) that are the result of factors
generally affecting the industry in which the Person operates or (ii) that are
attributable to the performance of this Agreement or the consummation of the
Contemplated Transactions.
"Members of the Immediate Family" means, with respect to any
individual, (a) such Person's spouse, (b) each parent, brother, sister or child
of such Person or such Person's spouse, (c) the spouse of any Person described
in clause (b) above, (d) each child of any Person described in clauses (a), (b)
or (c) above, (e) each trust created solely for the benefit of one or more of
the Persons described in clauses (a) through (d) above and (f) each custodian or
guardian of any property of one or more of the Persons described in clauses (a)
through (e) above in his capacity as such custodian or guardian.
"Milestones" is defined in Section 2.4.
"Milestone Payments" is defined in Section 2.4.
"Monthly Financials" means the monthly unaudited financial statements
of the Company in the form customarily prepared by management for internal use
for each complete month after the Most Recent Balance Sheet Date.
"Most Recent Balance Sheet Date" is defined in Section 3.3.1.
"MPM Sellers" means, collectively, MPM Founders LLC, MPM BioVentures II
QP L.P., MPM BioVentures GmbH & Co. Parallel-Beteiligungs KG, MPM BioVentures II
L.P., and MPM Asset Management Investors 2001 BVII LLC.
"Net Working Capital" means current assets minus current liabilities,
determined in accordance with GAAP and the methodology described on Exhibit G.
"Net Working Capital Shortfall" is defined in Section 2.7.
"Net Working Capital Target" means Net Working Capital of the Company
of at least $5.2 million.
"Note Escrow Agreement" means the escrow agreement executed by ViaCell
in conjunction with the Notes pursuant to which ViaCell will deposit $4.2
million with an escrow agent for the term of the Notes.
"Notes" is defined in Section 2.1.1.
"Ordinary Course of Business" means an action taken by any Person in
the ordinary course of such Person's business which is consistent with the past
customs and practices of such Person (including past practice with respect to
quantity, amount, magnitude and frequency, standard employment and payroll
policies and past practice with respect to management of working
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capital) which is taken in the ordinary course of the normal day-to-day
operations of such Person.
"Organizational Documents" means, with respect to any Person (other
than an individual), (a) the certificate or articles of incorporation or
organization and any joint venture, limited liability company, operating or
partnership agreement and other similar documents adopted or filed in connection
with the creation, formation or organization of such Person and (b) all by-laws,
voting agreements and similar documents, instruments or agreements relating to
the organization or governance of such Person, in each case, as amended or
supplemented.
"OSHA" is defined in Section 5.8.
"Percentage Ownership" means the percentage ownership of each Seller as
set forth on Schedule 6 hereto.
"Person" means any individual or corporation, association, partnership,
limited liability company, joint venture, joint stock or other company, business
trust, trust, organization, Governmental Authority or other entity of any kind.
"Phase I Study" shall have the meaning ascribed to it in Title 21 of
the United States Code of Federal Regulations, Section 312.21(a) and shall also
be conducted following Good Clinical Practice (GCP) Guidelines established by
the International Conference on Harmonisation of Technical Requirements for
Registration of Pharmaceuticals for Human Use (ICH, Guideline E6, GCP:
Consolidated Guideline, 1 May 1996).
"Phase II Study" shall mean a well-controlled clinical study that also
has the meaning ascribed to it in Title 21 of the United States Code of Federal
Regulations, Section 312.21(b) and shall also be conducted following GCP
Guidelines established by the ICH (Guideline E6, GCP: Consolidated Guideline, 1
May 1996).
"Phase III Study" shall mean a well-controlled clinical study that also
has the meaning ascribed to it in Title 21 of the United States Code of Federal
Regulations, Section 312.21(c) and shall also be conducted following GCP
Guidelines established by the ICH (Guideline E6, GCP: Consolidated Guideline, 1
May 1996).
"Plan Sponsor" is defined in Section 5.17.
"Plans" is defined in Section 5.17.
"Predecessor" means, with respect to the Company (a) any Person that
has ever merged with or into the Company, (b) any Person a majority of whose
capital stock (or similar outstanding ownership interests) or Equity Interests
has ever been acquired by the Company, (c) any Person all or substantially all
of whose assets has ever been acquired by the Company, and (d) any prior names
of the Company or any Person described in clauses (a) through (c).
"Product" or "Products" shall mean each product manufactured, sold,
leased, licensed, delivered or installed by the Company, including any USSC
Company Product.
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September 30, 2003
"Proprietary Rights" is defined in Section 5.14.
"Purchase Price Deduction" is defined in Section 2.7.
"Qualified Public Offering" shall mean a firm commitment underwritten
public offering of the common stock of ViaCell at a price per share of at least
$9.70 (as appropriately adjusted to reflect any conversion of preferred stock
into common stock, any stock splits or combinations, or any declaration of
dividends or distributions or other similar recapitalization) in which the net
proceeds received by ViaCell equal or exceed $50 million.
"Real Property" is defined in Section 3.19.1.
"Real Property Leases" is defined in Section 3.19.1.
"Representative" means, with respect to any Person, any director,
officer, employee, agent, consultant, advisor, or other representative of such
Person, including legal counsel, accountants, and financial advisors.
"Securities Act" means the Securities Act of 1933.
"Seller" and "Sellers" are defined in the Preamble.
"Sellers' Representative" means ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, as representative
for the Sellers.
"Series A Shares" is defined in the Preamble.
"Series A Sellers" means the holders of 100% of the Series A Shares as
set forth on Schedule 1 to this Agreement.
"Series I Agreements" means (i) the Fourth Amended and Restated
Stockholders Agreement of ViaCell, (ii) the Fourth Amended and Restated
Registration Rights Agreement of ViaCell, and (iii) the Third Amended and
Restated Investors' Rights Agreement of ViaCell, as amended from time to time
including in connection with the Financing attached hereto as Exhibit J.
"Series I Stock" is defined in Section 2.1.1.
"Shares" is defined in the recitals to this Agreement.
"Subsidiary" means, with respect to any specified person, any other
Person of which such specified Person will, at the time, directly or indirectly
through one or more Subsidiaries, (a) own at least 50% of the outstanding
capital stock (or other shares of beneficial interest) entitled to vote
generally, (b) hold at least 50% of the partnership, limited liability company,
joint venture or similar interests or (c) be a general partner, managing member
or joint venturer.
"Tax" or "Taxes" means (a) any and all federal, state, local, or foreign
income, gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental, customs duties, capital
stock, franchise, profits, withholding, social security (or similar, including
FICA), unemployment, disability, real property, personal property,
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Stock Purchase Agreement
September 30, 2003
sales, use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind or any charge of any kind in the nature of
(or similar to) taxes whatsoever, including any interest, penalty, or addition
thereto, whether disputed or not and (b) any liability for the payment of any
amounts of the type described in clause (a) of this definition as a result of
being a member of an affiliated, consolidated, combined or unitary group for any
period, as a result of any tax sharing or tax allocation agreement, arrangement
or understanding, or as a result of being liable for another person's taxes as a
transferee or successor, by contract or otherwise.
"Tax Return" means any return, declaration, report, claim for refund or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Technology" means all inventions, works, discoveries, innovations,
know-how, information (including ideas, research and development, know-how,
formulas, compositions, processes and techniques, data, designs, drawings,
specifications, customer and supplier lists, pricing and cost information,
business and marketing plans and proposals, documentation and manuals), computer
software, firmware, computer hardware, integrated circuits and integrated
circuit masks, electronic, electrical and mechanical equipment and all other
forms of technology, including improvements, modifications, works in process,
derivatives or changes, whether tangible or intangible, embodied in any form,
whether or not protectible or protected by patent, copyright, mask work right,
trade secret law or otherwise, and all documents and other materials recording
any of the foregoing.
"Termination Date" is defined in Section 10.1.
"Third Party Claim" is defined in Section 11.3.1.
"Total Purchase Price" is defined in Section 2.1.
"Transaction Expenses" is defined in Section 6.2.
"Transaction Fee Proportionate Share" is defined in Section 2.6.6.
"Transaction Fee Statement" means the written statement of Transaction
Expenses of the Company and the Sellers as set forth on Exhibit L, to be
delivered by the Company in connection with the Closing.
"Unaudited Financial Statements" is defined in Section 3.3.1.
"U.S. Sellers" means, collectively, the MPM Sellers (except for MPM
BioVentures GmbH & Co. Parallel-Beteiligungs KG) and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
"USSC" means Unrestricted Somatic Stem Cell.
"USSC Company Product" is defined in Section 2.4.
"ViaCell Balance Sheet" is defined in Section 5.5.
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"ViaCell Balance Sheet Date" is defined in Section 5.5.
"ViaCell Common Stock" means shares of the common stock, par value $0.01
per share, of ViaCell.
"ViaCell Financial Statements" is defined in Section 5.5.
"ViaCell Indemnified Person" is defined in Section 11.1.1.
"ViaCell Option Plan" is defined in Section 7.2.
"ViaCell Permits" is defined in Section 5.8.
"ViaCell Subsidiary" is defined in Section 5.2.
Except as otherwise explicitly specified to the contrary, (a) references to a
Section, Article, Exhibit or Schedule means a Section or Article of, or Schedule
or Exhibit to this Agreement, unless another agreement is specified, (b) the
word "including" will be construed as "including without limitation," (c)
references to a particular statute or regulation include all rules and
regulations thereunder and any predecessor or successor statute, rules or
regulation, in each case as amended or otherwise modified from time to time, (d)
words in the singular or plural form include the plural and singular form,
respectively and (e) references to a particular Person include such Person's
successors and assigns to the extent not prohibited by this Agreement.
2. PURCHASE AND SALE OF SHARES.
2.1. Purchase and Sale of Shares. Upon the terms and
conditions set forth herein, each Seller hereby sells, conveys,
transfers, assigns, grants and delivers to ViaCell, and ViaCell hereby
purchases, acquires and accepts from each Seller, subject to the terms
and conditions of the Company's Articles of Association, all right,
title, and interest in and to the Shares held by such Seller, free and
clear of all liabilities, obligations, pledges, security interests,
liens, contractual commitments, claims, defenses, setoffs, equities,
encumbrances or charges in consideration of the issuance of the Notes
and the number of shares of ViaCell capital stock as specified below
(including the shares described in Sections 2.2 and 2.3 below, but not
Section 2.4, the "Total Purchase Price").
2.1.1. Series A Shares. At the Closing, the Series A Sellers
will sell, assign and transfer to ViaCell, and ViaCell will purchase
and acquire from the Series A Sellers, 100% of the outstanding Series A
Shares. Each Series A Seller will sell to ViaCell all of the Series A
Shares owned by such Series A Seller, the specific number of which is
set forth opposite each Series A Seller's name on Schedule 1. The
initial consideration for the sale and transfer of the Series A Shares
will consist of (i) promissory notes issued by ViaCell in the original
aggregate principal amount of $14 million in the form attached hereto
as Exhibit A in favor of the Series A Sellers in the denominations set
forth opposite each Series A Seller's name on Schedule 1 (the "Notes"),
and (ii) such number of shares of Series I Convertible Preferred Stock
of ViaCell, par value $0.01 per share (the "Series I Stock"), as set
forth opposite each Series A Seller's name on Schedule 1.
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September 30, 2003
2.1.2. Common Shares. At the Closing, the Common Sellers will
sell, assign and transfer to ViaCell, and ViaCell will purchase and
acquire from the Common Sellers, 100% of the outstanding Common Shares.
Each Common Seller will sell to ViaCell all of the Common Shares owned
by such Common Seller, the specific number of which is set forth
opposite such Common Seller's name on Schedule 2. The initial
consideration for the sale and transfer of the Common Shares will
consist of the number of shares of Series I Stock set forth opposite
each Common Seller's name on Schedule 2.
2.2. Escrowed Shares. As additional initial consideration, on the
Closing Date, ViaCell will issue 241,481 shares of Series I Stock (as such
number of shares may be reduced pursuant to Section 2.7 and, after the Closing,
pursuant to Section 11.5, the "Escrowed Shares") and these shares will be
deposited in escrow with ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, as escrow agent (the "Escrow
Agent") for the benefit of the Sellers (other than the MPM Sellers) pursuant to
the Escrow Agreement in the form attached hereto as Exhibit B (the "Escrow
Agreement"). All Escrowed Shares held by the Escrow Agent will be released to
the Sellers (other than the MPM Sellers) pro rata based on the proportionate
share of each Seller (other than the MPM Sellers) set forth on Schedule 3 hereto
(the "Escrow Proportionate Share") (and also as set forth in Exhibit 1 to the
Escrow Agreement), in accordance with the following provisions.
2.2.1. Release upon a Qualified Public Offering. Unless sooner
released pursuant to Section 2.2.2 or returned to ViaCell pursuant to
Section 2.2.3, the Escrow Agent will release the Escrowed Shares
immediately following the closing of a Qualified Public Offering that
occurs prior to the third anniversary of the Closing Date. The released
Escrowed Shares will be exchanged by the Escrow Agent for the number of
shares of ViaCell Common Stock into which the Escrowed Shares are then
convertible (the "Escrowed Common Stock") within five (5) Business Days
of the closing of the Qualified Public Offering. The Escrow Agent will
then deliver the Escrowed Common Stock to each Seller (other than the
MPM Sellers) in accordance with the terms of the Escrow Agreement
(except for such Escrowed Shares that are subject to a disputed
indemnification claim pursuant to the terms of the Escrow Agreement)
and the Escrow Agreement shall thereupon terminate in accordance with
its terms.
2.2.2. Release upon a Change of Control. Unless sooner
released pursuant to Section 2.2.1 or returned to ViaCell pursuant to
Section 2.2.3, the Escrow Agent will release and deliver the Escrowed
Shares to each Seller (other than the MPM Sellers) in accordance with
the terms of the Escrow Agreement upon the closing of a Change of
Control as defined in clauses (i), (ii), (iii) and (iv) of the "Change
of Control" definition set forth herein (but excluding an event
described in clause (iv) which occurs solely in connection with a
corporate reorganization), but not upon the closing of an event
described in clause (v) of such definition) that occurs prior to the
third anniversary of the Closing Date. In the event that the holders of
Series I Stock are entitled to receive cash, securities or other
property in exchange for the shares of Series I Stock pursuant to such
Change of Control, the Escrow Agent will exchange the Escrowed Shares
for such equivalent cash, securities or property to which the holder of
the Escrowed Shares is entitled pursuant to such Change of Control and
shall deliver the same to each Seller (other than the MPM Sellers) in
accordance with the terms of the Escrow Agreement
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Stock Purchase Agreement
September 30, 2003
(except for such Escrowed Shares that are subject to a disputed
indemnification claim pursuant to the terms of the Escrow Agreement)
and the Escrow Agreement shall thereupon terminate in accordance with
its terms.
2.2.3. Termination. Unless earlier terminated pursuant to
Section 2.2.1 or 2.2.2, the escrow described in this Section will
terminate on the third anniversary of the Closing Date, and the Escrow
Agent will return the Escrowed Shares to ViaCell in accordance with the
terms of the Escrow Agreement, the Escrow Agreement shall thereupon
terminate in accordance with its terms, and the Sellers will have no
further rights in respect of the Escrowed Shares.
2.3. Contingent Shares. As additional initial consideration, ViaCell
will issue 289,256 shares of Series I Stock to the MPM Sellers (as such number
of shares may be reduced pursuant to Section 2.7 and, after the Closing,
pursuant to Section 11.5, and increased pursuant to the last sentence of Section
2.3.2, the "Contingent Shares") pro rata as set forth on Schedule 5 hereto in
accordance with the following provisions.
2.3.1. Issue of Contingent Shares upon a Qualified Public
Offering. Unless sooner issued pursuant to Section 2.3.2, ViaCell will
issue the Contingent Shares to the MPM Sellers immediately following
the closing of a Qualified Public Offering that occurs prior to the
third anniversary of the Closing Date. The issued Contingent Shares
will be exchanged by ViaCell for the number of shares of ViaCell Common
Stock into which the Contingent Shares are then convertible (the
"Contingent Common Stock") within five (5) Business Days of the closing
of the Qualified Public Offering (except for such Contingent Shares
that are subject to a disputed indemnification claim).
2.3.2. Issue of Contingent Shares upon a Change of Control.
Unless sooner issued pursuant to Section 2.3.1, ViaCell will issue the
Contingent Shares to the MPM Sellers promptly upon the closing of a
Change of Control as defined in clauses (i), (ii), (iii) and (iv) of
the "Change of Control" definition as set forth herein (but excluding
an event described in clause (iv) which occurs solely in connection
with a corporate reorganization) but not upon closing of an event as
described in clause (v) of such definition) that occurs prior to the
third anniversary of the Closing Date. In the event that the holders of
Series I Stock are entitled to receive cash, securities or other
property in exchange for the shares of Series I Stock pursuant to such
Change of Control, ViaCell will, in lieu of the Contingent Shares,
issue such equivalent cash, securities or property to which the holder
of the Contingent Shares is entitled (except for such Contingent Shares
that are subject to a disputed indemnification claim) pursuant to such
Change of Control, and shall deliver the same to each MPM Seller. In
addition, in the event that the Contingent Shares are issued pursuant
to this Section 2.3.2, ViaCell will issue to the MPM Sellers an
additional number of shares of Series I Stock equal to eight percent
(8%) of the initial number of such Contingent Shares compounded
annually from the Closing Date to the date of such issuance.
2.3.3. Termination of Obligation to Issue Contingent Shares.
Unless earlier delivered pursuant to Section 2.3.1 or 2.3.2, the
obligation of ViaCell to issue the
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September 30, 2003
Contingent Shares to the MPM Sellers will terminate on the third
anniversary of the Closing Date.
2.4. Milestone Payments. As additional consideration for the Shares,
ViaCell will make the following payments or issue the following additional
shares of Series I Stock (the "Milestone Payments") to the Sellers within thirty
(30) days following the achievement of the milestones described below (the
"Milestones") relating to USSC product candidates in development by the Company
prior to the Closing Date (each, a "USSC Company Product"). Such Milestone
Payments will be paid to each Seller pro rata based on each Seller's Percentage
Ownership as set forth on Schedule 6 hereto in cash, or, at the election of each
Seller, in shares of Series I Stock, which shares are deemed for purposes of
this Section to have a value of $8.00 per share; provided that, if ViaCell shall
have completed an initial public offering prior to the time a Milestone Payment
is due to the Sellers and a Seller elects to receive shares instead of cash, the
Milestone Payment will be paid in shares of ViaCell Common Stock in lieu of the
issuance of Series I Stock, based on the then current market price of such stock
(calculated as the average closing price of the ViaCell Common Stock on the
principal market on which it is then traded for the ten (10) days preceding and
the ten (10) days following the achievement of the Milestone). In any event, no
Milestone Payment will be paid more than once, regardless of the number of times
such Milestone is achieved.
2.4.1. Phase II Milestone Payments.
(a) $3.0 million, upon the receipt by ViaCell or any ViaCell
Subsidiary (including the Company) by December 31, 2006 of final,
audited clinical trial data that are determined to be positive outcome
data for a cardiac indication from a well-controlled Phase II Study
regarding a USSC Company Product (the date of such determination being
deemed to be the date of achievement of the Milestone, provided that
the Milestone shall be deemed to have been met if the data is received
before December 31, 2006, regardless of the date of such
determination).
(b) $3.0 million, upon the receipt by ViaCell or any ViaCell
Subsidiary (including the Company) by June 30, 2007 of final, audited
clinical trial data that are determined to be positive outcome data for
a non-cardiac indication from a well-controlled Phase II Study
regarding a USSC Company Product (the date of such determination being
deemed to be the date of achievement of the Milestone, provided that
the Milestone shall be deemed to have been met if the data is received
before June 30, 2007, regardless of the date of such determination).
For purposes of this Section, the term "positive outcome data" shall mean data
obtained from a well-controlled Phase II Study, which demonstrate a reasonably
acceptable safety profile and which provide reasonable evidence of clinical
efficacy, and which support either (i) the immediate submission of a marketing
authorization application, or (ii) the initiation of a Phase III Study following
consultation and agreement with applicable regulatory authorities.
2.4.2. Product Approval Milestone Payments.
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September 30, 2003
(a) $3.0 million, upon the receipt by ViaCell or any ViaCell
Subsidiary (including the Company) of all required regulatory approvals
(including pricing and reimbursement approval, if required) by December
31, 2011 to market a USSC Company Product for a cardiac indication in
both the United States and the European Union.
(b) $3.0 million, upon the receipt by ViaCell or any ViaCell
Subsidiary (including the Company) of all required regulatory approvals
(including pricing and reimbursement approval, if required) by December
31, 2012 to market a USSC Company Product for a non-cardiac indication
in both the United States and the European Union.
2.5. The Closing. The closing (the "Closing") with respect to the
Contemplated Transactions will take place at the offices of Ropes & ▇▇▇▇ LLP,
One International Place, Boston, Massachusetts, on _____________, 2003 (the
"Closing Date") or at such other place and on such other date as the parties may
agree in writing.
2.6. Closing Deliveries.
2.6.1. Series A Shares. At the Closing (i) ViaCell shall
deliver to the Series A Sellers (a) the Notes, and (b) a certificate or
certificates representing the number of shares of Series I Stock set
forth opposite each Series A Seller's name on Schedule 1, and (ii) the
Series A Sellers will assign to ViaCell the number of Series A Shares
set forth opposite each Series A Seller's name on Schedule 1, in a form
of Assignment attached hereto as Exhibit H (the "Assignment") and shall
deliver to ViaCell the Assignment.
2.6.2. Common Shares. At the Closing (i) ViaCell shall deliver
to each Common Seller a certificate for the number of shares of Series
I Stock set forth opposite each Common Seller's name on Schedule 2, and
(ii) each Common Seller will assign to ViaCell the number of Common
Shares set forth opposite each Common Seller's name on Schedule 2 in a
form of Assignment attached hereto as Exhibit H and shall deliver to
ViaCell the Assignment.
2.6.3. Series I Agreements and Legends. The Sellers will, at
or prior to the Closing, execute and become party to all Series I
Agreements or amendments thereto, and each share of Series I Stock
received by the Sellers will bear restrictive legends as described in
Section 4.5 hereof.
2.6.4. Escrowed Shares. At the Closing, ViaCell shall deliver
the Escrowed Shares to the Escrow Agent as specified in Section 2.2.
2.6.5. Share Register. At the Closing and subject to the
delivery of the forms of Assignment in accordance with Sections 2.6.1
and 2.6.2 hereunder, the Company shall deliver to ViaCell an updated
excerpt of the share register of the Company stating that ViaCell is
the holder of all Shares of the Company.
2.6.6. Cash Transfer. At the Closing, ViaCell will deliver
cash in the amount set forth in the Transaction Fee Statement (the
"Cash Payment") to the Company for the
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Stock Purchase Agreement
September 30, 2003
benefit of the Sellers pro rata based on each Seller's
Percentage Ownership as set forth on Schedule 6 hereto (the
"Transaction Fee Proportionate Share"). The total amount of
the Cash Payment will be subtracted from the Total Purchase
Price as set forth in Section 2.7. Following the Closing, the
Company will use the Cash Payment to pay the Transaction
Expenses set forth on the Transaction Fee Statement, including
brokers' fees.
2.7. Purchase Price Adjustment. If the Net Working Capital of
the Company (as set forth on the Closing Date Net Working Capital
Statement) is less than the Net Working Capital Target, then the Buyer
will subtract an amount equal to such shortfall (the "Net Working
Capital Shortfall") and the total amount of Transaction Expenses set
forth on the Transaction Fee Statement (collectively, the "Purchase
Price Deduction") from the Total Purchase Price payable to the Sellers.
The Purchase Price Deduction will be subtracted from the Total Purchase
Price in the following manner, based on the value of the Series I
Shares at $8.00 per share:
(i) 18.75% of the total Purchase Price Deduction will
be subtracted pro rata from (a) the total amount of Escrowed
Shares held by the Escrow Agent pursuant to Section 2.2 and
(b) the total amount of Contingent Shares; and
(ii) 81.25% of the total Purchase Price Deduction
will be subtracted from total amount of shares of Series I
Stock paid to the Series A Sellers and the Common Sellers
pursuant to Section 2.1, of which 48.55% of such shares will
be subtracted from the number of shares issuable to the Series
A Sellers and the remainder of such shares subtracted from the
number of shares otherwise issuable to the Common Sellers pro
rata in accordance with Schedule 3 hereto.
Schedules 1, 2, 3, 4 and 5 will reflect the number of shares
of Series I Stock to be issued pursuant to this Agreement both before
and after the adjustments required by this Section 2.7.
2.8. Remainder. Any amounts remaining from the cash
transferred to the Company pursuant to Section 2.6.6 after payment in
full or settlement of the Transaction Expenses as set forth in the
Transaction Fee Statement, shall be distributed to the Sellers pro rata
based on each Seller's Transaction Fee Proportionate Share.
3. REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANY.
The Company hereby makes the following representations and warranties
to ViaCell, each of which is complete and correct as of the execution of this
Agreement and on and as of the Closing Date:
3.1. Capitalization and Ownership. The Shares constitute all
of the issued and outstanding shares of capital stock of the Company
and, except as set forth in Schedule 3.1, no person or entity has any
other right, title or interest in the Company or any profits, earnings,
gains or losses with respect thereto. All of such Shares are duly
authorized, validly issued, fully paid and non-assessable and are owned
of record by the Sellers in the respective amounts indicated next to
each Sellers name on Schedule 1 and Schedule 2 hereto. No share
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September 30, 2003
certificates ("Aktienurkunde") and no interim shares certificates
("Zwischenscheine") have been issued for any of the Shares. Except as
set forth in Schedule 3.1, there are no agreements, arrangements or
commitments (other than this Agreement) to which the Company is a party
or is otherwise bound (i) relating to the acquisition, exchange,
conversion or disposition of any of the Shares or any other equity
interest in the Company; (ii) under which the Company is or may be
obligated to issue any equity interests in the Company or options to
purchase equity interests in the Company; or (iii) relating to the
repurchase or redemption of any of the Shares of the Company. There are
no outstanding options, warrants or other rights to subscribe for or
purchase any equity interest in the Company. All previously granted
outstanding options of the Company have been exercised or cancelled.
3.2. Corporate Organization. The Company is a corporation duly
and validly existing under the laws of Germany, with full power and
authority under such laws, as amended from time to time, and its
Articles of Association to own or lease its properties and to conduct
its business in the manner and in the places where such properties are
owned or leased or such business is currently conducted. The copy of
the Company's Articles of Association, as amended to date and
heretofore delivered to ViaCell's counsel, is complete and correct, and
no amendment thereto is pending. The Company is duly qualified to do
business under the laws of each jurisdiction in which its current
business, or the ownership or leasing of its properties, requires such
qualification. The Company has no Subsidiaries, and does not own any
equity or other proprietary interest in any other corporation,
partnership, joint venture or other entity of any nature whatsoever.
None of the outstanding Shares was issued in violation of applicable
securities laws.
3.3. Financial Statements.
3.3.1. Attached hereto as Schedule 3.3 are the
following financial statements: (i) the unaudited balance
sheet, income statement and statement of cash flows of the
Company at and for the period ended June 30, 2003 (the
"Unaudited Financial Statements"); and (ii) the audited
balance sheet, income statement and statement of cash flows of
the Company as of December 31, 2002 (the "Most Recent Balance
Sheet Date") (the "Audited Financial Statements" and, together
with the Unaudited Financial Statements, the "Financial
Statements"). The Financial Statements (i) are accurate and
complete in all material respects; (ii) were prepared in
accordance with GAAP consistently applied throughout the
periods indicated; (iii) are consistent with the books and
records of the Company; and (iv) fairly set forth the results
of operations and financial condition of the Company for the
periods, and as of the dates, indicated.
3.3.2. Except as set forth in Schedule 3.3, the
Company does not as of the date hereof have any liabilities or
obligations of any nature, whether absolute, accrued, known,
unknown, contingent or otherwise, except to the extent
disclosed in the Financial Statements or incurred in the
Ordinary Course of Business since June 30, 2003 or incurred
with ViaCell's consent. The Company pays its bills and
liabilities in the Ordinary Course of Business.
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September 30, 2003
3.4. Absence of Certain Developments. Since June 30, 2003, the
Business has been conducted in the Ordinary Course of Business and,
except for the matters disclosed in Schedule 3.4:
(a) the Company has not (i) amended its
Organizational Documents, (ii) amended any term of its
outstanding Equity Interests or other securities or (iii)
issued, sold, granted, or otherwise disposed of, its Equity
Interests or other securities;
(b) the Company has not become liable in respect of
any Guarantee or has incurred, assumed or otherwise become
liable in respect of any Debt, except for borrowings in the
Ordinary Course of Business;
(c) the Company has not permitted any of its Assets
to become subject to an Encumbrance;
(d) the Company has not (i) made any declaration,
setting aside or payment of any dividend or other distribution
with respect to, or any repurchase, redemption or other
acquisition of, any of its capital stock or other Equity
Interests or (ii) entered into, or performed, any transaction
with, or for the benefit of, any Seller or any Affiliate of
any Seller (other than payments made to officers, directors
and employees in the Ordinary Course of Business);
(e) there has been no material loss, destruction,
damage or eminent domain taking (in each case, whether or not
insured) affecting the Business or any material Asset;
(f) the Company has not increased the Compensation
payable or paid, whether conditionally or otherwise, to (i)
any employee, consultant or agent other than in the Ordinary
Course of Business, (ii) any director or officer or (iii) any
Seller or any Affiliate of any Seller;
(g) the Company has not entered into any Contractual
Obligation other than in the Ordinary Course of Business,
providing for the employment or consultancy of any Person on a
full-time, part-time, consulting or other basis or otherwise
providing Compensation or other benefits to any officer,
director, employee or consultant;
(h) the Company has not made any change in its
methods of accounting or accounting practices (including with
respect to reserves);
(i) the Company has not made, changed or revoked any
material Tax election, elected or changed any method of
accounting for Tax purposes, settled any Action in respect of
Taxes or entered into any Contractual Obligation in respect of
Taxes with any Governmental Authority;
(j) the Company has not terminated or closed any
Facility, business or operation;
(k) the Company has not adopted any Company Plan or,
except in accordance with terms thereof as in effect on the
Most Recent Balance Sheet Date, increased any benefits under
any Company Plan;
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September 30, 2003
(l) the Company has not written up or written down
any of its material Assets or revalued its inventory except as
within the Ordinary Course of Business and as required by law;
(m) the Company has not entered into any Contractual
Obligation to do any of the things referred to elsewhere in
this Section 3.4; and
(n) no event or circumstance has occurred which has
had, or is reasonably likely to have, a Material Adverse
Effect.
3.5. Powers and Authority. The Company has all requisite legal
capacity, power and authority (including full corporate power and
authority) to own and operate the assets of the Company and to carry on
the Business. The execution, delivery and performance of this Agreement
and each agreement, document and instrument to be executed and
delivered pursuant to, or as contemplated by, this Agreement have been
duly authorized by all necessary action of the Company and no other
action on the part of the Company is required in connection therewith.
The Company is not in violation of, and has not violated, any
instrument, permit, decree, order, statute, ordinance or governmental
regulation except for those violations which do not have a Material
Adverse Effect. Except as set forth on Schedule 3.5, the Company has in
force all governmental permits, licenses and authorizations necessary
to conduct the Business.
3.6. No Breaches, Violations or Consents. Neither the
execution and delivery of this Agreement nor the compliance with the
terms and provisions of this Agreement (a) conflicts with or results in
a breach of any of the terms, conditions or provisions of any contract
or other instrument to which the Company is a party or by which the
Company may be bound or constitutes a default thereunder; (b) results
in the creation or imposition of any Encumbrance upon or gives to
others any interest or rights in or with respect to any of the Shares
or Assets; (c) violates any law, statute, or regulation of any
Governmental Authority; or (d) otherwise impacts in any manner upon the
rights of the Company under any of the Contracts, except as set forth
on Schedule 3.6. No approval, consent, waiver, authorization or other
order of, and no declaration, filing, registration, qualification or
recording with, any Governmental Authority is required to be made by or
on behalf of the Company in connection with the execution, delivery or
performance of this Agreement and the transactions contemplated hereby.
3.7. Title to and Condition of the Assets. The Company has
good and marketable title to the Assets and the Business owned by the
Company free and clear of all Encumbrances except as set forth on
Schedule 3.7. All of the tangible personal property used by the Company
in connection with the operation of the Business is included among the
Assets owned or leased by the Company unless specified in Schedule 3.7,
and the tangible personal property used by the Company is in working
condition sufficient to continue to operate the Business in the
ordinary course.
3.8. No Claims or Litigation. There is no litigation,
judicial, administrative or arbitral action, proceeding, governmental
investigation or claim pending or, to the Company's Knowledge,
threatened that questions the validity of this Agreement or any action
taken or to
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be taken by the Sellers in connection with this Agreement or that
relates to the Company, the Assets or the Business. There is no
judgment, order, injunction, decree or award outstanding (whether
rendered by a court, administrative agency or arbitrator), against the
Company.
3.9. Contracts. The contracts listed on Schedule 3.9 (the
"Contracts") consist of all contracts, agreements, or other
arrangements of any nature, whether written or oral, to which the
Company is a party and which are necessary for the conduct of the
Business and which require, in the aggregate, annual payments in excess
of $20,000, including without limitation all contracts with customers
of the Company, all Contracts relating to the license of Intellectual
Property, the grant of any funds to the Company or the terms of any
employment or consulting arrangement with any individual. All such
Contracts are, and immediately after giving effect to the Closing
hereunder and the consummation of the Contemplated Transactions will
be, in full force and effect, and neither the Company nor, to the
Company's Knowledge, any other party thereto is in default nor has any
event occurred which with notice or lapse of time would constitute a
default in respect of any of the terms or provisions thereof. The
Company has not breached any conditions of its grants of funding. There
are no disputes or disagreements pending or, to the Company's
Knowledge, threatened between the Company and any other party under any
of the Contracts, and, to the Company's Knowledge, there is no basis
for any such dispute or disagreement. True and correct copies of all of
the Contracts have been delivered to counsel for ViaCell.
3.10. Intellectual Property.
3.10.1. The Company is the sole owner of and has the
right to use all technology as set forth in Schedule 3.10. The
"Company Technology" is all Technology used in connection with
the Business and any and all Intellectual Property in such
Technology.
3.10.2. Neither the Company nor any Predecessor (a)
has to the Company's Knowledge interfered with, infringed
upon, misappropriated, or otherwise come into conflict with
any Intellectual Property rights of third parties or (b) has
received any charge, complaint, claim, demand, or notice
alleging any such interference, infringement,
misappropriation, or violation (including any claim that a
Person must license or refrain from using any Intellectual
Property rights of any third party in connection with the
conduct of the Business or the use of the Company Technology).
To the Company's Knowledge, no third party has interfered
with, infringed upon, misappropriated, or otherwise come into
conflict with any Company Technology.
3.10.3. Schedule 3.10 identifies (a) all registered
Intellectual Property which has been issued to the Company or
is used by the Company in the Business, (b) each pending
application for registration which the Company has made with
respect to any Company Technology, (c) each Contractual
Obligation which the Company or any Seller has granted to any
third party with respect to any of (a) or (b) above and (d)
each Contractual Obligation which the Company or any Seller
has granted to any third party with respect to Company
Technology that is not included in (a) or (b) above. True,
accurate and complete copies of all such registrations,
applications and Contractual Obligations, in each case, as
amended, or otherwise modified and in effect, have been made
available to ViaCell, as well as true, accurate and complete
copies of all other written documentation
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evidencing ownership and prosecution (if applicable) of each
such item. Schedule 3.10 also identifies each trade name,
trade dress and unregistered trademark or service ▇▇▇▇ used by
the Company or in connection with the Business or the Company
Technology.
3.10.4. With respect to each item of Company Technology:
(a) the Company possesses all right, title, and
interest in and to such item, free and clear of any
Encumbrance except as disclosed on Schedule 3.10;
(b) such item is not subject to any outstanding
Government Order, and no Action is pending or threatened,
which challenges the legality, validity, enforceability, use
or ownership of such item; and
(c) except as disclosed on Schedule 3.10, the Company
has not agreed and does not have a Contractual Obligation to
indemnify any Person for or against any interference,
infringement, misappropriation or other conflict with respect
to such item.
3.10.5. Schedule 3.10 identifies each item of Company
Technology that any Person besides the Company owns and that is used by
the Company in the Business pursuant to any license, sublicense or
other Contractual Obligation (the "Licenses"). Except as disclosed on
Schedule 3.10, there are no royalties for the use of any such Company
Technology. The Company has made available to ViaCell true, accurate
and complete copies of all of the Licenses, in each case, as amended or
otherwise modified and in effect. With respect to each such item
identified on Schedule 3.10: (a) such item is not subject to any
outstanding Government Order, and no Action is pending or threatened
which challenges the legality, validity or enforceability of such item
and (b) none of the Sellers or the Company has granted any sublicense
or similar right with respect to any License covering such item.
3.10.6. Except as set forth in Schedule 3.10, all current and
former employees and contractors of the Company who contributed to the
Company Technology in any way have executed enforceable Contractual
Obligations that assign to the Company all the respective rights,
including Intellectual Property, to any inventions, improvements,
discoveries or information relating to the Business.
3.10.7. None of the Company Technology constitutes or is
dependent on any open source computer code, and none of the Company
Technology is subject to any License or other Contractual Obligation
that would require the Company to divulge to any Person any source code
or trade secret that is part of the Company Technology.
3.11. Insurance. Schedule 3.11 is an accurate and complete list of all
insurance policies of the Company which relate to the Business (the "Insurance
Policies"). The Company has delivered to ViaCell true copies of all of the
Insurance Policies. The Company has taken all required action to maintain all of
the Insurance Policies in effect following the Closing, and has paid all
premiums due thereon in a timely manner. There are no claims currently
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pending under any of the Insurance Policies, and, to the Company's Knowledge, no
basis for any such claims.
3.12. Bank Accounts and Powers of Attorney. Schedule 3.12 sets forth an
accurate and complete list of (a) all bank accounts of the Company, together
with the names of all authorized signatories thereon; and (b) all powers of
attorney currently in effect for the Company.
3.13. Affiliated Transactions. Except as set forth in Schedule 3.13,
the Company is not bound or party to any contract, commitment or understanding
with any of the Sellers, any manager or officer of the Company or any of its
affiliates or any member of such Seller's, manager's or officer's family or any
of their respective affiliates and none of the Sellers, any managers or officers
of the Company or any of its affiliates or any members of such Seller's,
manager's or officer's family or any of their respective affiliates owns or
otherwise has any rights to or interest in any asset, tangible or intangible,
which is used in the Business.
3.14. Employees and Agents. Schedule 3.14 is an accurate and complete
list of all employees and contractors of the Company. The Company currently has
20 full time employees. To the Company's Knowledge, no executive, key employee
or group of employees has made any plans to terminate employment with the
Company. The Company is in compliance with all applicable labor and employment
laws and regulations, including, without limitation, laws prohibiting
discrimination and sexual harassment. The Company has no works council in place.
The Company has delivered to ViaCell a schedule which indicates, as to each
employee, (a) current salary, bonus, commissions and any other compensation; (b)
length of employment with the Company; and (c) most recent date and amount of
compensation increase, and such information is true and complete in all material
respects. The Company has delivered to ViaCell true and correct copies of all
agreements with employees of the Company.
3.15. Employee Benefit Plans. Schedule 3.15 contains a description of
all employee benefit plans, superannuation plans, policies, practices and
arrangements of the Company (collectively, the "Company Plans"), including,
without limitation, pension, retirement, disability, sick leave, medical, dental
and other health insurance, life insurance, severance, stock options, deferred
compensation and vacation, and the Company has delivered to ViaCell true and
complete copies of all such Company Plans. All of the Company Plans are in
compliance with and have been administered in accordance with applicable law.
3.16. Tax Returns and Payments. All tax returns and reports (including
but not limited to all laws imposing or relating to income tax, fringe benefits
tax, sales tax, goods and services tax, payroll tax, land tax, water and
municipal rates and stamp and customs duties) of the Company required to be
filed on or before the date hereof have been duly and timely filed on or before
such date or any properly extended date, and all taxes, assessments, fees,
interest, penalties and other governmental charges (collectively, "Taxes") upon
the Company, the Assets or the Business which are due and payable, other than
those which are presently payable without penalty or interest and which are
included in the Financial Statements, have been paid. As of the date hereof,
there are no tax liens on any of the Assets, and there is no basis for the
assertion of any such tax liens. There are no actions or
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proceedings currently pending or, to the Company's Knowledge, threatened by any
taxing authority against the Company.
3.17. Disclosures. No representation or warranty or other statement of
the Company contained in this Agreement and no statement of the Company
contained in (i) any Schedule to this Agreement, (ii) any instrument of transfer
or certificate required to be delivered pursuant to this Agreement, or (iii) the
documents required to be delivered pursuant to Section 8.3.3, Section 8.16 and
Section 8.18 of this Agreement, contains any untrue statement of a material
fact, and this Agreement does not omit to state a material fact necessary to
make the statements herein not misleading.
3.18. Debt. The Company has no Liabilities in respect of Debt except as
set forth on Schedule 3.18. For each item of Debt, Schedule 3.18 correctly sets
forth the debtor, the principal amount of the Debt as of the date of this
Agreement, the creditor, the maturity date, and the collateral, if any, securing
the Debt. The Company has no Liability in respect of a Guarantee of any
Liability of any other Person.
3.19. Real Property.
3.19.1. The Company maintains a base of operations in
Langenfeld, Germany. The Company does not own any real property.
Schedule 3.19 describes each leasehold interest in real property
leased, subleased by, licensed or with respect to which a right to use
or occupy has been granted to or by the Company (the "Real Property"),
and specifies the lessor(s) of such leased property, and identifies
each lease or any other Contractual Obligation under which such
property is leased (the "Real Property Leases"). Except as described on
Schedule 3.19 there are no written or oral subleases, licenses,
concessions, occupancy agreements or other Contractual Obligations
granting to any other Person the right of use or occupancy of the Real
Property and there is no Person (other than the Company and any
lessor(s) of leased Real Property) in possession of the leased Real
Property. With respect to each Real Property Lease that is a sublease,
to the Company's Knowledge, the representations and warranties set
forth in Sections 3.19.2 and are true and correct with respect to the
underlying lease.
3.19.2. The Real Property Leases do not impose material
restrictions on any portion of the Business other than radius or use
restrictions described on Schedule 3.19 that do not materially
interfere with the Business. The Company is not obligated to pay any
leasing or brokerage commission as a result of the Contemplated
Transactions. There is no pending or, to the Company's Knowledge,
threatened eminent domain taking or similar governmental taking
affecting any of the Real Property. The Company has delivered to
ViaCell true, correct and complete copies of the Real Property Leases
including all amendments, modifications, notices or memoranda of lease
thereto and all estoppel certificates or subordinations,
non-disturbance and attornment agreements related thereto.
3.20. Environmental Matters. The Company and its Predecessors are, and
have been, in compliance with all Environmental Laws. There has been no release
or threatened release of any pollutant, petroleum or any fraction thereof,
contaminant or toxic or hazardous material
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September 30, 2003
(including toxic mold), substance or waste (each a "Hazardous
Substance") on, upon, into or from any site currently or heretofore
owned, leased or otherwise used by the Company or a Predecessor in
connection with or resulting from the conduct of the Company's
Business. The Company does not use any underground storage tanks, PCBs
(polychlorinated biphenyls) or PCB-containing equipment and does not
store any hazardous waste, except in compliance with Environmental
Laws.
3.21. Illegal Payments, etc. In the conduct of the Business,
neither the Company nor, to the Company's Knowledge, any of its
directors, officers, employees or agents, has (a) directly or
indirectly, given, or agreed to give, any illegal gift, contribution,
payment or similar benefit to any supplier, customer, governmental
official or employee or other Person who was, is or may be in a
position to help or hinder the Company (or assist in connection with
any actual or proposed transaction) or made, or agreed to make, any
illegal contribution, or reimbursed any illegal political gift or
contribution made by any other Person, to any candidate for federal,
state, local or foreign public office or (b) established or maintained
any unrecorded fund or asset or made any false entries on any books or
records for any purpose.
3.22. Brokers' Fees. Except as set forth in Schedule 3.22, the
Company does not have any liability or obligation to pay any fees or
commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement.
3.23. Company Assets. The Company's Assets include the
following:
(i) an undrawn entitlement to receive research grants
in the amount of up to E3.0 million which remains to be
disbursed to the Company subject only to the conditions set
forth in the grant notice of the Forschungsinstitut Julich
GmbH dated May 21, 2002 and the letter of the
Forschungsinstitut Julich GmbH dated August 15, 2003 of which
the Company has delivered a true copy to ViaCell's counsel;
(ii) USSC Company Product candidates for orthopedic
indications in the pre-clinical research stage;
(iii) USSC Company Product candidates for
non-orthopedic (including cardiac) indications in the
pre-clinical research stage; and
(iv) all Intellectual Property rights related to the
USSC Company Products necessary for the full research and
development of the products described in (ii) and (iii) above
as currently conducted.
3.24. Closing Date Net Working Capital Statement. As of the
Closing Date, the Closing Date Net Working Capital Statement delivered
to ViaCell is true and correct in all respects.
4. REPRESENTATIONS AND WARRANTIES RELATING TO THE SELLERS.
Each Seller hereby severally, and not jointly, makes the following
representations and warranties to ViaCell (but only with respect to such Seller
and the Shares owned by such Seller),
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September 30, 2003
each of which is complete and correct as of the execution of this Agreement and
on and as of the Closing Date:
4.1. Authorization. Each Seller has the requisite power and
authority to enter into, execute, deliver and perform this Agreement
and to consummate the transactions contemplated hereby. This Agreement
has been duly executed and delivered by such Seller and constitutes the
legal, valid and binding obligation of such Seller, enforceable against
such Seller in accordance with its terms, except as the enforcement
hereof may be limited by (i) applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other similar laws
of general applicability relating to or affecting creditors' rights
generally or (ii) general principles of equity, including those
limiting the availability of specific performance, injunctive relief
and other equitable remedies and those providing for equitable
defenses.
4.2. No Violation or Approval. The execution, delivery and
performance by such Seller of this Agreement and the consummation by
such Seller of the transactions contemplated hereby will not result in
a breach or violation of, or a default under, (a) any statute
applicable to such Seller; (b) any agreement to which such Seller is a
party or by which such Seller or any of such Seller's Shares is bound;
or (c) any order, judgment, decree, rule or regulation of any court or
any Governmental Authority having jurisdiction over such Seller or any
of such Seller's Shares. Except as set forth on Schedule 4.2, no
consent, approval, order or authorization of, or negotiation,
declaration or filing with, any Governmental Authority or entity or any
other party is required in connection with the execution, delivery or
performance by such Seller of this Agreement or the consummation by
such Seller of any of the transactions contemplated hereby.
4.3. Title to Shares. Each Seller is the sole legal and
beneficial owner of, and has good and marketable title to, the number
of Shares set forth opposite such Seller's name on Schedule 1 and
Schedule 2, free and clear of any Encumbrance, except (i) restrictions
on transfer under applicable securities laws and (ii) restrictions on
transfer contained in any agreements containing transfer restrictions
to which such Seller is a party as of the Closing Date, which are all
duly waived by such Seller in accordance with Section 12.3. Such Seller
does not own any Share, capital stock or right to acquire capital stock
in the Company, other than those set forth opposite such Seller's name
on Schedule 1 and Schedule 2. No share certificates ("Aktienurkunde")
and no interim share certificates ("Zwischenscheine") have been issued
for any of such Seller's Shares. Such Seller is not party to any
option, warrant, purchase right or other contract or commitment that
requires such Seller to sell, transfer or otherwise dispose of any
capital stock of the Company, except for this Agreement. Such Seller
has sole voting power and sole power to issue instructions with respect
to voting, sole power of disposition, sole power of exercise or
conversion and the sole power to demand appraisal rights, in each case
with respect to all of the Shares set forth opposite such Seller's name
on Schedule 1 and Schedule 2. Such Seller has full right, power and
authority to enter into this Agreement and to sell, transfer and
deliver the Shares set forth opposite such Seller's name on Schedule 1
and Schedule 2, and upon assignment of such Shares to ViaCell at
Closing, ViaCell will acquire good and marketable title to such Shares
free of any Encumbrances, except (i) restrictions on transfer under
applicable securities laws and (ii) restrictions on transfer contained
in any agreements containing transfer restrictions to which
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such Seller is a party as of the Closing Date, which are all duly
waived by such Seller in accordance with Section 12.3.
4.4. Qualification of the Sellers. Each Seller represents and
warrants, with respect to itself and not with respect to any other
Seller, that: (a) such Seller is acquiring the Series I Stock for such
Seller's own account and not with a view to or for resale in connection
with any distribution thereof within the meaning of Section 2(11) of
the United States Securities Act of 1933, as amended (the "Securities
Act"); (b) such Seller understands that such shares have not been
registered under the Securities Act or any state securities laws by
reason of specified exemptions from the registration provisions of the
Securities Act which depend upon, among other things, the bona fide
nature of his or its investment intent as expressed herein; (c) such
Seller is an "accredited investor" within the meaning of Rule 501 of
the Securities Act; (d) such Seller is able to bear the economic risk
of investment in such shares and is experienced and has such knowledge
and experience in financial and business matters that he or it is
capable of evaluating the risks and merits of the transactions
contemplated by this Agreement; and (e) such Seller acknowledges that
such shares will bear a legend, such as the one specified in Section
4.5 below, restricting transfer unless (i) the transfer is exempt from
the registration requirements of the Securities Act and an opinion of
counsel reasonably satisfactory to ViaCell that such transfer is exempt
therefrom is delivered to ViaCell, or (ii) the transfer is made
pursuant to an effective registration statement under the Securities
Act. In addition, each Seller, other than the U.S. Sellers, represents
and warrants, with respect to itself and not with respect to any other
Seller, that: (a) such Seller is not a "U.S. Person" (as such term is
defined in Rule 902(k) of Regulation S under the Securities Act) and is
not acquiring the shares issuable pursuant to this Agreement for the
account or benefit of a U.S. Person; (b) each Seller acknowledges that
the shares issuable pursuant to this Agreement may not be sold,
transferred, or otherwise disposed of except in accordance with the
provisions of Regulation S of the Securities Act (Rules 901 through
905), or pursuant to registration under the Securities Act or pursuant
to an available exemption from registration under the Securities Act;
and (c) each Seller agrees not to engage in hedging transactions with
regard to the shares issuable pursuant to this Agreement unless in
compliance with the Securities Act.
4.5. Restrictive Legends.
4.5.1. Each Seller, other than each U.S. Seller,
acknowledges that the certificates evidencing the Series I
Stock may bear substantially the following legends:
(a) "THESE SECURITIES HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). THEY MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED EXCEPT (i) PURSUANT
TO THE PROVISIONS OF REGULATION S UNDER THE ACT, (ii)
PURSUANT TO A REGISTRATION STATEMENT IN EFFECT WITH
RESPECT TO THE SECURITIES UNDER THE ACT OR (iii) IN A
TRANSACTION WHICH IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE ACT AS CONFIRMED IN AN OPINION OF
COUNSEL SATISFACTORY TO VIACELL (SUCH OPINION WILL
NOT BE REQUIRED IF THE SECURITIES ARE SOLD PURSUANT
TO RULE 144(k) OR RULE 144A OF THE ACT). HEDGING
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September 30, 2003
TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT"; and
(b) Any legends required by the Series I
Agreements.
4.5.2. Each U.S. Seller acknowledges that the
certificates evidencing the Series I Stock may bear
substantially the following legends:
(a) "THESE SECURITIES HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). THEY MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED EXCEPT (i) PURSUANT
TO A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO
THE SECURITIES UNDER THE ACT OR (ii) IN A TRANSACTION
WHICH IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF
THE ACT AS CONFIRMED IN AN OPINION OF COUNSEL
SATISFACTORY TO VIACELL (SUCH OPINION WILL NOT BE
REQUIRED IF THE SECURITIES ARE SOLD PURSUANT TO RULE
144(k) OR RULE 144A OF THE ACT); and
(b) Any legends required by the Series I
Agreements.
4.6. Brokers' Fees. Except as set forth in Schedule 4.6, each
Seller represents and warrants that it has no liability or obligation
to pay any fees or commissions to any broker, finder or agent with
respect to the transactions contemplated by this Agreement.
5. REPRESENTATIONS AND WARRANTIES OF VIACELL.
ViaCell hereby makes the following representations and warranties to
the Sellers, each of which is complete and correct as of the execution of this
Agreement and on and as of the Closing Date:
5.1. Organization and Standing.
(a) ViaCell and each of its Subsidiaries is
a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of
organization and has full corporate power and
authority to own, lease and operate its assets,
properties and business and to carry on its business
as it is now being conducted. ViaCell and each of its
Subsidiaries is duly qualified to transact business
as a foreign corporation and is in good standing in
all jurisdictions in which such qualification is
required by law except for jurisdictions in which the
failure to so qualify could not reasonably be
expected to have a Material Adverse Effect.
(b) ViaCell has previously provided to the
Sellers true and complete copies of its Certificate
of Incorporation and By Laws as presently in effect,
and ViaCell is not in default in the performance,
observation or fulfillment of any of such documents.
The minute books of ViaCell made available to the
Sellers contain true and complete records of all
meetings and consents in lieu of meetings of the
Board of Directors (and any committees thereof) and
of the stockholders of ViaCell since the time of
ViaCell's incorporation and accurately reflect all
transactions referred to in such
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minutes and consents in lieu of meetings. The stock
books of ViaCell are true and complete.
5.2. ViaCell Subsidiaries. Schedule 5.2 sets forth all of
ViaCell's Subsidiaries (the "ViaCell Subsidiaries"), the jurisdiction
in which each is organized or incorporated, and each jurisdiction in
which it is qualified or otherwise authorized to do business. Other
than the ViaCell Subsidiaries, ViaCell has no other Subsidiaries and
does not own or control, directly or indirectly, any shares of capital
stock of any other corporation or any interest in any partnership,
joint venture or other non corporate business enterprise. ViaCell owns
all of the outstanding capital stock of each ViaCell Subsidiary.
5.3. Authority to Execute and Perform Agreements. ViaCell has
the full corporate power and authority to enter into, execute and
deliver this Agreement and all Ancillary Agreements and to perform
fully its obligations hereunder and thereunder. The execution and
delivery of this Agreement and the Ancillary Agreements, and the
consummation of the transactions contemplated hereby and thereby have
been duly authorized by the Board of Directors and the stockholders of
ViaCell. No other action on the part of ViaCell is necessary to
consummate the transactions contemplated hereby. This Agreement and the
Ancillary Agreements have been duly executed and delivered by ViaCell
and, assuming the due authorization, execution and delivery of this
Agreement and the Ancillary Agreements by the other parties thereto,
this Agreement and the Ancillary Agreements constitute valid and
binding obligations of ViaCell, enforceable against it in accordance
with their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
principles of equity.
5.4. Capitalization and Title to Shares.
(a) Before giving effect to the Contemplated
Transactions and the Financing, the authorized
capital stock of ViaCell consists of (i) 80,000,000
shares of ViaCell Common Stock, of which 2,634,299
shares are issued and outstanding, and 6,410,000
shares are reserved for issuance pursuant to
outstanding options and warrants, and (ii) 28,325,000
shares of Preferred Stock, $.01 par value per share,
100,000 shares of which have been designated as
Series A Preferred Stock, $.01 par value per share
(the "Series A Stock"), all of which are issued and
outstanding; 82,857 shares of which have been
designated as Series B Preferred Stock, $.01 par
value per share (the "Series B Stock"), all of which
are issued or outstanding; 919,220 shares of which
have been designated as Series C Preferred Stock,
$.01 par value per share (the "Series C Stock"), all
of which are issued and outstanding; 1,500,000 shares
of which have been designated as Series D Preferred
Stock, $.01 par value per share (the "Series D
Stock"), all of which are issued and outstanding;
1,983,334 shares of which have been designated as
Series E Preferred Stock, $.01 par value per share
(the "Series E Stock"), all of which are issued and
outstanding; 2,666,666 shares of which have been
designated as Series F Stock, $.01 par value per
share (the "Series F Stock"), all of which are issued
and outstanding; 3,666,667 of which have been
designated as Series G Stock, $.01 par value per
share (the "Series G Stock"), all of which are issued
and outstanding; 7,577,334 shares of which have been
designated
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September 30, 2003
as Series H Preferred Stock, $.01 par value per share
(the "Series H Stock"), all of which are issued and
outstanding; 5,575,000 shares of Series I Stock,
2,075,000 of which are issued and outstanding; and
3,750,000 shares of which have been designated as
Series J Preferred Stock, $.01 par value per share
(the "Series J Stock"), of which 1,440,000 shares are
issued and outstanding. All of the issued and
outstanding shares of ViaCell's Common Stock, Series
A Stock, Series B Stock, Series C Stock, Series D
Stock, Series E Stock, Series F Stock, Series G
Stock, Series H Stock and Series I Stock are duly
authorized and are validly issued, fully paid, and
nonassessable. Since January 1, 2001, ViaCell has not
made repurchases or redemptions of shares of its
capital stock. All the issued and outstanding shares
of capital stock of ViaCell have been offered, issued
and sold by ViaCell in compliance with applicable
federal and state securities laws. Schedule 5.4 sets
forth a true and complete list of (A) each
stockholder of ViaCell showing the number of shares
of ViaCell Common Stock, Preferred Stock, or other
securities of ViaCell held by each such stockholder
as of the date hereof and (B) each holder of options
and warrants to acquire ViaCell Common Stock with
vesting schedules and exercise prices.
(b) Except for the outstanding Preferred
Stock, and options and warrants described in 5.4(a)
above, and except as set forth on Schedule 5.4, there
are not, as of the date hereof, any other shares of
capital stock of ViaCell authorized or outstanding or
any subscriptions, options, conversion or exchange
rights, warrants, repurchase or redemption
agreements, or other agreements, claims or
commitments of any nature whatsoever obligating
ViaCell or any ViaCell Subsidiary to issue, transfer,
deliver or sell, or cause to be issued, transferred,
delivered, sold, repurchased or redeemed, additional
shares of the capital stock or other securities of
ViaCell or any ViaCell Subsidiary or obligating
ViaCell or any ViaCell Subsidiary to grant, extend or
enter into any such agreement. Except as provided in
this Agreement, the Ancillary Agreements and the
Series I Agreements, neither ViaCell nor any ViaCell
Subsidiary has any stockholder agreements, voting
trusts, proxies or other agreements, instruments,
including bonds, debentures, notes or other
obligations, or understandings with respect to the
voting of the capital stock of ViaCell or the ViaCell
Subsidiaries.
(c) The issuance and delivery of the Series
I Stock hereunder, and the issuance and delivery of
the shares of Common Stock issuable upon conversion
of such Series I Stock, have been duly authorized by
all necessary corporate action on the part of
ViaCell, and all such shares have been duly reserved
for issuance. The Series I Stock when so issued and
delivered against payment therefor in accordance with
the provisions of this Agreement and the shares of
Common Stock issuable upon conversion of the Series I
Stock when issued upon such conversion issued in
connection with such Series I Stock will be duly and
validly issued, fully paid and non-assessable.
5.5. Financial Statements. The audited balance sheet of
ViaCell as at December 31, 2002, and the related combined statement of
operations for the fiscal year then ended, and the unaudited combined
balance sheet of ViaCell as of June 30, 2003 and related statements of
operations for the period then ended, all of which are included on
Schedule 5.5, fairly present
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the financial condition and results of operations of ViaCell as of the
dates thereof and for the period then ended in accordance with GAAP,
consistently applied throughout the periods covered thereby, except to
the extent otherwise disclosed in such financial statements or on
Schedule 5.5. The foregoing financial statements of ViaCell are
sometimes herein called the "ViaCell Financial Statements," the balance
sheet of ViaCell as at June 30, 2003, is sometimes herein called the
"ViaCell Balance Sheet" and June 30, 2003 is sometimes herein called
the "ViaCell Balance Sheet Date."
5.6. No Material Adverse Change. Since the ViaCell Balance
Sheet Date, there have been no changes in the assets, properties,
business, operations or condition (financial or otherwise) of ViaCell
or any ViaCell Subsidiary which either individually or in the aggregate
is reasonably likely to have a Material Adverse Effect, nor does
ViaCell or any ViaCell Subsidiary know of any such change that is
threatened, nor has there been any damage, destruction or loss
materially and adversely affecting the assets, properties, business,
operations or condition (financial or otherwise) of ViaCell or any
ViaCell Subsidiary, whether or not covered by insurance; and
(a) except as set forth on Schedule 5.6 or in
connection with the Contemplated Transactions or the
Financing, since the ViaCell Balance Sheet Date neither
ViaCell nor any ViaCell Subsidiary has:
(i) incurred any indebtedness for borrowed
money;
(ii) declared or paid any dividend or
declared or made any other distribution of any kind
to its stockholders, or made any direct or indirect
redemption, retirement, purchase or other acquisition
of any shares of its capital stock;
(iii) made any loan or advance to any of its
stockholders, officers, directors, employees,
consultants, agents or other representatives (other
than travel advances made in the Ordinary Course of
Business), or made any other loan or advance
otherwise than in the Ordinary Course of Business;
(iv) made any payment or commitment to pay
any severance or termination pay to any of its
officers, directors, employees, consultants, agents
or other representatives, other than payments to, or
commitments to pay, persons made in the Ordinary
Course of Business;
(v) except in the Ordinary Course of
Business: entered into any lease (as lessor or
lessee); sold, abandoned or made any other
disposition of any of its assets or properties;
granted or suffered any lien or other encumbrance on
any of its assets or properties; entered into or
amended any contract or other agreement to which it
is a party, or by or to which it or its assets or
properties are bound or subject, or pursuant to which
it agrees to indemnify any party or to refrain from
competing with any party;
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(vi) except for inventory or equipment
acquired in the Ordinary Course of Business, made any
acquisition of all or any part of the assets,
properties, capital stock or business of any other
person;
(vii) incurred any contingent liability as a
guarantor or otherwise with respect to the
obligations of others or cancelled any material debt
or claim owing to, or waived any material right of,
ViaCell or any ViaCell Subsidiary;
(viii) incurred any damage, destruction or
loss, whether or not covered by insurance, materially
and adversely affecting the properties, assets or
business of ViaCell;
(ix) made any change in accounting methods
or practices, credit practices or collection policies
used by ViaCell or any ViaCell Subsidiary; or
(x) made any commitment, understanding or
agreement (through any officer or employee thereof)
to do any of the things described in the preceding
clauses (i) through (ix) (other than this Agreement).
(b) Since the ViaCell Balance Sheet Date, ViaCell and
each of the ViaCell Subsidiaries have conducted its business
only in the ordinary course and consistently with its prior
practices.
5.7. Tax Matters.
(a) All Tax Returns required to be filed on or before
the date hereof by or with respect to ViaCell and the ViaCell
Subsidiaries have been filed within the time and in the manner
prescribed by law. All such Tax Returns are true, correct, and
complete, and all Taxes owed by ViaCell or the ViaCell
Subsidiaries, whether or not shown on any Tax Return, have
been paid. ViaCell and each of the ViaCell Subsidiaries file
Tax Returns in all jurisdictions where they are required to so
file, and no claim has ever been made in writing to ViaCell or
any ViaCell Subsidiary by any taxing authority in any other
jurisdiction that ViaCell or any ViaCell Subsidiary is or may
be subject to taxation by that jurisdiction.
(b) There are no liens or other encumbrances with
respect to Taxes upon any of the assets or properties of
ViaCell or any ViaCell Subsidiary, other than with respect to
Taxes not yet due and payable.
(c) To the knowledge of ViaCell, no audit is
currently pending with respect to any Tax Return of ViaCell or
any ViaCell Subsidiary, nor is ViaCell or its officers or
directors aware of any information which has caused or should
reasonably cause them to believe that an audit by any tax
authority may be forthcoming. No deficiency for any Taxes has
been proposed in writing against ViaCell or any ViaCell
Subsidiary, which deficiency has not been paid in full or
otherwise resolved. No issue relating to ViaCell or the
ViaCell Subsidiaries or involving any Tax for which ViaCell or
any ViaCell Subsidiary was liable has been resolved in favor
of any taxing authority in any audit or examination which, by
application of the same principles, could
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September 30, 2003
reasonably be expected to result in a deficiency for Taxes of
ViaCell or any ViaCell Subsidiary for any subsequent period.
(d) None of ViaCell's Tax Returns for taxable periods
ended on or after December 31, 1998 have been audited or are
currently the subject of audit. Except as set forth on
Schedule 5.7, there are no outstanding agreements, waivers or
arrangements extending the statutory period of limitation
applicable to any claim for, or the period for the collection
or assessment of, Taxes due from or with respect to ViaCell or
any ViaCell Subsidiary for any taxable period, no power of
attorney granted by or with respect to ViaCell or any ViaCell
Subsidiary relating to Taxes is currently in force, and no
extension of time for filing any Tax Return required to be
filed by or on behalf of ViaCell or any ViaCell Subsidiary is
in force.
(e) The unpaid Taxes of ViaCell and each ViaCell
Subsidiary for all taxable periods (or portions thereof)
ending on or prior to the Closing Date did not, as of the
ViaCell Balance Sheet Date, exceed the reserve for Tax
liability (rather than any reserve for deferred Taxes
established to reflect timing differences between book and Tax
income) set forth on the face of the ViaCell Balance Sheet
(rather than in any notes thereof).
(f) Neither ViaCell nor any ViaCell Subsidiary is a
"consenting corporation" within the meaning of Section 341(f)
of the Code, and no consent to the application of Section
341(f)(2) of the Code (or any predecessor provision) has been
made or filed by or with respect to ViaCell or any ViaCell
Subsidiary or any of their assets or properties. None of the
assets or properties of ViaCell or any ViaCell Subsidiary are
or will be required to be treated as being (i) owned by any
other person pursuant to the provisions of section 168(f)(8)
of the Internal Revenue Code of 1954, as amended and in effect
immediately before the enactment of the Tax Reform Act of
1986, or (ii) tax-exempt use property within the meaning of
section 168(h)(1) of the Code. Neither ViaCell nor any ViaCell
Subsidiary has agreed, or is required, to make any adjustment
under Section 481(a) of the Code by reason of a change in
accounting method or otherwise.
(g) Neither ViaCell nor any ViaCell Subsidiary has
been and is currently in violation (or, with or without notice
or lapse of time or both, would be in violation) of any
applicable law or regulation relating to the payment,
collection, or withholding of Taxes, and the remittance
thereof, and all withholding and payroll Tax requirements
required to be complied with by ViaCell or the ViaCell
Subsidiary up to and including the date hereof have been
satisfied.
(h) Neither ViaCell nor any ViaCell Subsidiary is or
has ever been (i) included in any consolidated, combined, or
unitary Tax Return or (ii) a party to or bound by, nor does it
have or has it ever had any obligation under, any Tax sharing
agreement or similar contract or arrangement. Neither ViaCell
nor any ViaCell Subsidiary has any liability for the Taxes of
any other person under Treasury Regulation Section 1.1502-6
(or any similar provision of state, local, or foreign law), as
a transferee or successor, by contract, or otherwise.
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(i) Neither ViaCell nor any ViaCell Subsidiary is a party to any
contract or agreement, plan, or arrangement concerning any person that,
individually or collectively with other similar arrangements, could
reasonably be expected to give rise to the payment of any amount that
would not be deductible by ViaCell by reason of Section 280G of the
Code.
(j) ViaCell and the ViaCell Subsidiaries are domestic corporations
within the meaning of Section 7701(a)(4) of the Code.
5.8. Compliance with Laws.
(a) Neither ViaCell nor any ViaCell Subsidiary is in violation of
any order, judgment, injunction, award or decree binding upon it.
Neither ViaCell nor any ViaCell Subsidiary is in violation of any (i)
federal, state or local law, ordinance or regulation of any
governmental or regulatory body applicable to its business or assets,
including without limitation, regulations and requirements of any state
or other department of public health, the FDA and the Occupational
Safety and Health Administration ("OSHA"), and (ii) laws, ordinances,
regulations and other requirements respecting public health, labor,
employment and employment practices, terms and conditions of employment
and wages and hours, or relating to the uses of its assets, including,
without limitation, laws relating to emissions, discharges, releases of
Hazardous Substances, as defined in Section 3.20 (including, without
limitation, ambient air, surface water, ground water or land), or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous
Substances. Neither ViaCell nor any ViaCell Subsidiary has ever
received notice of any citation, fine or penalty imposed or asserted
against ViaCell or any ViaCell Subsidiary for any such violation or
alleged violation.
(b) Except as disclosed on Schedule 5.8, ViaCell and the ViaCell
Subsidiaries have all the licenses, permits, franchises, orders or
approvals of any federal, state, local or foreign governmental or
regulatory body, including, but not limited to, licenses issued by
state or other departments of public health, the FDA, the OSHA, or
otherwise relating to employment, health or environmental matters
(collectively, the "ViaCell Permits") material to the conduct of their
businesses as currently conducted or as reasonably expected to be
conducted. The ViaCell Permits are in full force and effect; any
applications for renewal necessary to maintain any ViaCell Permit in
effect have been filed; and no proceeding is pending, or to the best
knowledge of ViaCell, threatened to revoke or limit any ViaCell Permit.
5.9. Consents; No Breach. All consents, permits, authorizations and
approvals from any person pursuant to applicable law or contracts or other
agreements with ViaCell or any ViaCell Subsidiary, that are required in
connection with the performance of ViaCell's obligations under this
Agreement, are set forth on Schedule 5.9. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby and thereby will not (a) violate any provision of the
Certificate of Incorporation or By-laws of ViaCell; (b) except as set forth
on Schedule 5.9, violate, conflict with or result in the breach of any of the
terms or conditions of, result in modification of the effect of, or give
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any other contracting party the right to terminate, or constitute (or with
notice or lapse of time or both constitute) a default under, any instrument,
contract or other agreement to which ViaCell or any ViaCell Subsidiary is a
party or to which it or any of its assets or properties may be bound or
subject; (c) violate any order, judgment, injunction, award or decree of any
court, arbitrator or governmental or regulatory body against, or binding
upon, ViaCell or upon the securities, properties, assets or business of
ViaCell; (d) violate any statute, law or regulation of any jurisdiction as
such statute, law or regulation relates to ViaCell or to the securities,
properties, assets or business of ViaCell; (e) violate any ViaCell Permit;
(f) except as set forth on Schedule 5.9, require the approval or consent of
any foreign, federal, state, local or other governmental or regulatory body
or the approval or consent of any other person; or (g) result in the creation
of any lien or other encumbrance on the assets or properties of ViaCell.
5.10. Actions and Proceedings. Except as disclosed in Schedule 5.10, there
are no outstanding orders, judgments, injunctions, awards or decrees of any
court, governmental or regulatory body or arbitration tribunal against or
involving ViaCell or any ViaCell Subsidiary or any of their securities,
assets, or properties. Except as disclosed in Schedule 5.10, there are no
actions, suits or claims or legal, administrative or arbitration proceedings,
as to which ViaCell or any ViaCell Subsidiary has been served, or
investigations (whether or not the defense thereof or liabilities in respect
thereof are covered by insurance) pending or, to the best knowledge of
ViaCell, threatened against ViaCell or any ViaCell Subsidiary or involving
any of their securities, assets or properties. To the knowledge of ViaCell,
there is no fact, event or circumstance that could reasonably be expected to
give rise to any suit, action, claim, investigation or proceeding that
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect or materially interfere with ViaCell's ability to
consummate the transactions contemplated hereby.
5.11. Contracts and Other Agreements. Schedule 5.11 sets forth all of the
following contracts and other agreements to which ViaCell or any ViaCell
Subsidiary is currently a party or by or to which it or its assets or
properties are bound or subject (and under which it has current or future
rights or obligations) and which are material to the operation or value of
ViaCell and the ViaCell Subsidiaries taken as a whole, including without
limitation:
(a) contracts and other agreements with any current or former
officer, director, stockholder, employee, consultant, agent or other
representative of ViaCell or any ViaCell Subsidiary and contracts and
other agreements for the payment of fees or other consideration to any
entity in which any officer or director of ViaCell or any ViaCell
Subsidiary has an interest;
(b) contracts and other agreements with any labor union or
association representing any employee of ViaCell or any ViaCell
Subsidiary or otherwise providing for any form of collective
bargaining;
(c) contracts and other agreements for the purchase or sale of
materials, supplies, equipment, merchandise or services that contain an
escalation, renegotiation or redetermination clause or that obligate
ViaCell or any ViaCell Subsidiary to
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purchase all or substantially all of its requirements of a particular
product from a supplier, or for periodic minimum purchases of a
particular product from a supplier;
(d) contracts and other agreements for the sale of any of the assets
or properties of ViaCell or any ViaCell Subsidiary other than in the
Ordinary Course of Business or for the grant to any person of any
options, rights of first refusal, or preferential or similar rights to
purchase any of such assets or properties;
(e) partnership or joint venture agreements;
(f) contracts or other agreements under which ViaCell or any ViaCell
Subsidiary agrees to indemnify any party or to share the tax liability
of any party;
(g) contracts, options and other agreements for the purchase of any
asset, tangible or intangible calling for an aggregate purchase price
or payments in any one year of more than $100,000 in any one case (or
in the aggregate, in the case of any related series of contracts and
other agreements);
(h) contracts and other agreements that cannot by their terms be
canceled by ViaCell or any ViaCell Subsidiary and any successor or
assignee of ViaCell or any ViaCell Subsidiary without liability,
premium or penalty on no less than thirty days notice;
(i) contracts and other agreements with customers or
suppliers for the sharing of fees, the rebating of charges or
other similar arrangements;
(j) contracts and other agreements containing obligations or
liabilities of any kind to holders of the securities of ViaCell as such
(including, without limitation, an obligation to register any of such
securities under any federal or state securities laws);
(k) contracts and other agreements containing covenants of ViaCell
or any ViaCell Subsidiary not to compete in any line of business or
with any person or covenants of any other person not to compete with
ViaCell or any ViaCell Subsidiary in any line of business;
(l) contracts and other agreements relating to the acquisition by
ViaCell or any ViaCell Subsidiary of any operating business or the
capital stock of any other person;
(m) contracts and other agreements requiring the payment to any
person of a commission or fee, including contracts or other agreements
with consultants which provide for aggregate payments in excess of
$100,000;
(n) contracts, indentures, mortgages, promissory notes, loan
agreements, guaranties, security agreements, pledge agreements, and
other agreements relating to the borrowing of money or securing any
such liability;
(o) distributorship or licensing agreements;
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(p) contracts under which ViaCell or the ViaCell Subsidiary will
acquire or has acquired ownership of, or license to, intangible
property, including software (other than software licensed by ViaCell
as an end user for less than $100,000 and not distributed by it);
(q) leases, subleases or other agreements under which ViaCell or the
ViaCell Subsidiary is lessor or lessee of any real property; or
(r) any other material contract or other agreement whether or not
made in the Ordinary Course of Business the breach of which would have
or may have a Material Adverse Effect.
To the extent requested by the Sellers, ViaCell has made available to the
Sellers true and complete copies of all of the contracts and other agreements
(and all amendments, waivers or other modifications thereto) set forth on
Schedule 5.11. All of the contracts and other agreements listed on Schedule 5.11
are valid, in full force and effect, binding upon ViaCell or the applicable
ViaCell Subsidiary, and to the knowledge of ViaCell, binding upon the other
parties thereto in accordance with their terms, except where the failure to be
valid, binding, in full force and effect would not have a Material Adverse
Effect. ViaCell or the ViaCell Subsidiary has satisfied in all material respects
or provided for in all material respects all of its liabilities and obligations
thereunder which are presently required to be satisfied or provided for, and is
not in default under any of them, except where the failure to so satisfy or
provide or not be in default would not have a Material Adverse Effect. To the
knowledge of ViaCell, no other party to any such contract or other agreement is
in material default thereunder, nor, to the best knowledge of ViaCell, does any
condition exist that with notice or lapse of time or both would constitute a
default thereunder, except for defaults that would not, singly or in the
aggregate, have a Material Adverse Effect.
5.12. Title to Properties; Absence of Liens and Encumbrances.
(a) Neither ViaCell nor any ViaCell Subsidiary owns any real
property or any buildings or other structures nor does it have options
or any contractual obligations to purchase or acquire any interest in
real property. Schedule 5.12 sets forth all real property leases to
which each of ViaCell and the ViaCell Subsidiaries is a party and each
amendment thereto. All such current leases are in full force and
effect, are valid and effective in accordance with their respective
terms, and there is not, under any of such leases, any existing default
or event of default (or event which with notice or lapse of time, or
both, would constitute a default) that would give rise to a claim in an
amount greater than $20,000.
(b) ViaCell and each ViaCell Subsidiary owns outright and has good
and valid title to, or, in the case of leased properties and assets,
valid leasehold interests in all of its tangible properties and assets,
real, personal and mixed, used or held for use in its business,
including, without limitation, all of the assets and properties
reflected on the ViaCell Balance Sheet, and such properties and assets,
as well as all other properties and assets of ViaCell or the ViaCell
Subsidiaries, whether tangible or intangible, are free and clear of any
mortgage, pledge, security interest, claim, lien, or other
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encumbrance, except for (a) assets and properties disposed of, or
subject to purchase or sales orders, in the ordinary course of business
since the applicable ViaCell Balance Sheet Date; (b) liens or other
encumbrances securing the claims of materialmen, carriers, landlords
and like persons, all of which are not yet due and payable, or (c)
purchase money liens, all such claims, liens, or other encumbrances of
which are set forth on Schedule 5.12.
5.13. Condition and Sufficiency of Assets. The buildings, plants,
structures, equipment, furniture, leasehold improvements, fixtures, vehicles,
any related capitalized items and other tangible property material to the
business of ViaCell and each ViaCell Subsidiary are structurally sound, are
in good operating condition and repair, ordinary wear and tear excepted, and
are adequate for the uses to which they are being put, and none of such
buildings, plants, structures, equipment, furniture, leasehold improvements,
fixtures, vehicles are in need of maintenance or repairs except for ordinary
routine maintenance and repairs. The buildings, plants, structures,
equipment, furniture, leasehold improvements, fixtures, vehicles of ViaCell
and each ViaCell Subsidiary are sufficient for the continued operation of the
business of ViaCell and each ViaCell Subsidiary after the Closing in
substantially the same manner as conducted on the date of the Closing.
Neither ViaCell nor any ViaCell Subsidiary has received notice that any of
such property is in violation of any existing law or any building, zoning,
health, safety or other ordinance, code or regulation.
5.14. Intellectual Property. Schedule 5.14 sets forth all of the patents,
trademarks, service marks trade names, trade secrets, franchises, inventions
and copyrights, all information regarding the registration of any of the
foregoing, and all licenses relating to any of the foregoing (collectively,
the "Proprietary Rights") of ViaCell and each ViaCell Subsidiary that are
material to their businesses as presently conducted or as contemplated to be
conducted. Schedule 5.14 sets forth a list of all intellectual property,
including but not limited to patents and licenses that may, to the knowledge
of ViaCell, be required to commercialize ViaCell's and each ViaCell
Subsidiary's current projects under research and development. Except as set
forth on Schedule 5.14, ViaCell and each ViaCell Subsidiary owns, is licensed
to use or otherwise has the full legal right to use all of their Proprietary
Rights. Neither ViaCell nor any ViaCell Subsidiary has received any written
notices of infringement by ViaCell or any ViaCell Subsidiary of any
Proprietary Rights of others. To the knowledge of ViaCell, none of the
present activities of ViaCell or any ViaCell Subsidiary, or their respective
products or assets infringe on any Proprietary Rights of others; and ViaCell
is not aware of any infringement or violation by others of its or any of its
Subsidiaries' Proprietary Rights. ViaCell and each ViaCell Subsidiary has the
unencumbered right to use all trade secrets, customer lists, procedures,
processes, and other information required for its services or its business as
presently conducted. ViaCell and each ViaCell Subsidiary has taken
commercially reasonable steps to establish and preserve the ownership of its
Proprietary Rights. All key employees of ViaCell and each ViaCell Subsidiary
have entered into an agreement with respect to confidentiality,
non-competition and inventions. ViaCell is not aware of any violation of the
confidentiality of its or any of its Subsidiaries' Proprietary Rights. To the
best knowledge of ViaCell, neither ViaCell nor any ViaCell Subsidiary is
making unauthorized use of any confidential information or trade secrets of
any person, including without limitation any former employer of any past or
present employees of ViaCell or any ViaCell Subsidiary. To the best knowledge
of ViaCell,
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its employees do not have any agreements or arrangements with former
employers currently in effect relating to confidential information or trade
secrets of such employers. To the best knowledge of ViaCell, none of the
activities of the employees of ViaCell on behalf of ViaCell or any ViaCell
Subsidiary violate any valid and enforceable agreements or arrangements that
any such employees have with former employers.
5.15. Absence of Undisclosed Liabilities. As of the ViaCell Balance Sheet
Date, neither ViaCell nor any ViaCell Subsidiary had any liabilities of any
nature, whether accrued, absolute, contingent or otherwise (including,
without limitation, liabilities as guarantor or otherwise with respect to
obligations of others or material liabilities for taxes due or then accrued
or to become due), that would be required under GAAP to be shown or disclosed
on the ViaCell Balance Sheet that were not fully and adequately reflected or
reserved against on the ViaCell Balance Sheet. Neither ViaCell nor any
ViaCell Subsidiary has any such liabilities other than liabilities (a) fully
and adequately reflected or reserved against on the ViaCell Balance Sheet,
and (b) incurred since the ViaCell Balance Sheet Date in the Ordinary Course
of Business.
5.16. Commercial Relationships. The relationships of ViaCell and its
Subsidiaries with their suppliers, distributors, collaborators and licensors
are generally good commercial working relationships. No such entity has
canceled or otherwise terminated its relationship with ViaCell or any ViaCell
Subsidiary (except in the course of the natural expiration of any contracts
governing such relationship) or has, during the last twelve months,
materially altered its relationship with ViaCell or any ViaCell Subsidiary.
Neither ViaCell nor any ViaCell Subsidiary knows of any plan or intention of
any such entity, and has not received any written threat or notice from any
such entity, to terminate, cancel or otherwise materially and adversely
modify its relationship with ViaCell or any ViaCell Subsidiary nor to
decrease materially or limit its services, supplies or materials to ViaCell
or any ViaCell Subsidiary or its usage, or purchase of the services or
products of ViaCell or any ViaCell Subsidiary except in the course of the
natural expiration of any contracts governing such relationship.
5.17. Employee Benefit Plans. Schedule 5.17 sets forth a correct and
complete list of all pension, profit sharing, retirement, deferred
compensation, welfare, insurance, disability, bonus, vacation pay, severance
pay and similar plans, programs or arrangements, including without limitation
all employee benefit plans as defined in Section 3(3) of ERISA with respect
to which ViaCell is the "Plan Sponsor" within the meaning of Section 3(16)(B)
of ERISA, or in which ViaCell participates (the "Plans"). ViaCell has never
maintained or contributed to a defined benefit pension plan that is subject
to Title IV of ERISA. ViaCell has never maintained or contributed to any
"multiemployer plan" as defined in Section 4001(a)(3) of ERISA, and ViaCell
has not incurred any material liability under Sections 4062, 4063 or 4201 of
ERISA. Each Plan which is intended to be qualified under Section 401(a) or
501(c)(9) of the Code has received a favorable determination letter from the
Internal Revenue Service. Each Plan has been administered in all material
respects in accordance with the terms of such Plan and the provisions of any
and all applicable statutes, orders or governmental rules or regulations,
including without limitation ERISA and the Code. To the knowledge of ViaCell,
nothing has been done or omitted to be done with respect to any Plan which is
intended to comply with Section 401(a) of the Code that would adversely
affect the qualified status of such Plan or result in any material liability
on the part
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September 30, 2003
of ViaCell including, without limitation, under Title I of ERISA or Section
4975 of the Code. All material reports, returns, notices and documents
required to be filed with respect to all the Plans, including without
limitation annual reports on Form 5500, have been timely filed. All
contributions required by law or the terms of any Plan have been made. All
claims for welfare benefits incurred by employees of ViaCell on or before the
Closing are or will be fully covered by third-party insurance policies or
programs. Except for continuation of health coverage to the extent required
under Section 4980B of the Code, applicable state law or as otherwise set
forth in this Agreement, there are no obligations under any Plan providing
health or other welfare benefits after termination of employment. For
purposes of this Section 5.17, references to ViaCell include ViaCell and each
ViaCell Subsidiary and its ERISA Affiliates. An "ERISA Affiliate" of ViaCell
means any trade or business (whether or not incorporated) that together with
ViaCell would have been deemed a "single employer" within the meaning of
Section 4001(b) of ERISA or Section 414(m) of the Code at any time within the
five-year period ending on the date of the Closing.
5.18. Employee Relations. As of June 30, 2003, ViaCell and the ViaCell
Subsidiaries collectively employed an aggregate of approximately 229
full-time equivalent employees and generally enjoy a good employer-employee
relationship with its employees. True and complete information relating to
the key employees of ViaCell (including name and title) for the last two
years has been made available to the Sellers. None of such key employees has
given, as of the date hereof, formal notice of an intention to leave
ViaCell's employ before or after the Closing. ViaCell is not delinquent in
payments to any of its respective employees or consultants for any wages,
salaries, commissions, bonuses or other direct compensation for any services
performed by such party to the date hereof or amounts required to be
reimbursed to such employees. Upon termination of the employment of any said
employees, ViaCell will not by reason of anything done prior to the Closing
be liable to any of said employees or consultants for severance pay or any
other payments (other than accrued salary, vacation or sick pay in accordance
with ViaCell's normal policies and reasonable compensation if termination
occurs other than following notice).
5.19. Insurance. Schedule 5.19 sets forth a list of all policies or
binders of fire, liability, product liability, workmen's compensation,
vehicular, directors and officers and other insurance held by or on behalf of
ViaCell and each ViaCell Subsidiary. Such policies and binders are in full
force and effect, are reasonably believed to be adequate for the business
engaged in by ViaCell and each ViaCell Subsidiary and are in conformity with
the requirements of all leases to which ViaCell or any ViaCell Subsidiary is
a party and to the best knowledge of ViaCell, are valid and enforceable in
accordance with their terms. Neither ViaCell nor any ViaCell Subsidiary is in
default with respect to any provision contained in any such policy or binder
nor has ViaCell or any ViaCell Subsidiary failed to give any notice or
present any claim under any such policy or binder in due and timely fashion.
There are no outstanding unpaid claims under any such policy or binder.
Neither ViaCell nor any ViaCell Subsidiary has received notice of
cancellation or non renewal of any such policy or binder.
5.20. Environmental Compliance. ViaCell and each ViaCell Subsidiary (a) is
presently in material compliance with all federal, state, and local
environmental and health and safety laws, rules, regulations, ordinances,
guidelines, codes, orders, approvals, and bylaws and similar items applicable
to its business and properties; (b) has not generated, manufactured,
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September 30, 2003
used, refined, transported, treated, stored, handled, disposed of,
transferred, produced, or processed any pollutant, biomedical waste, toxic
substance, hazardous waste, hazardous substance, hazardous material, oil, or
petroleum product as defined under any Environmental Law, other than ordinary
household cleaning and other similar products, and has no knowledge of the
release or threat of release of any Hazardous Substances from its products,
properties or facilities except in compliance with law; (c) has not (i)
entered into or been subject to any consent decree, compliance order, or
administrative order with respect to any environmental or health or safety
matter relating to its business or any of its properties or facilities, (ii)
received written notice under the citizen suit provision of any Environmental
Law in connection with its business or any of its properties or facilities,
(iii) received any request for information, written notice, demand letter,
administrative inquiry, or formal or informal complaint or claim with respect
to any environmental or health or safety matter relating to its business or
any of its properties or facilities; or (iv) been subject to or threatened
with any governmental or citizen enforcement action with respect to any
environmental or health and safety matter relating to its business or any of
its properties or facilities, and to the best knowledge of ViaCell, has no
reason to believe that any matters described in (i) (iv) above will be
forthcoming. No lien has been imposed on any of the properties or facilities
of ViaCell or any ViaCell Subsidiary by any governmental agency in connection
with the presence of any Hazardous Substances.
5.21. Bank Accounts and Powers of Attorney. Schedule 5.21 identifies all
bank accounts used in connection with the operations of ViaCell and each
ViaCell Subsidiary whether or not such accounts are held in the name of
ViaCell or a ViaCell Subsidiary, lists the respective signatories therefor
and lists the names of all persons holding a power of attorney from ViaCell
and a summary statement of the terms thereof. Except as set forth on Schedule
5.21, neither ViaCell nor any ViaCell Subsidiary has granted powers of
attorney to any person or entity.
5.22. Brokerage. No broker, finder, agent or similar intermediary has
acted on behalf of ViaCell in connection with this Agreement or the
Contemplated Transactions, and there are no brokerage commissions, finders'
fees or similar fees or commissions payable in connection therewith based on
any agreement, arrangement or understanding with ViaCell, or any action taken
by it.
5.23. Investment Company Act. ViaCell is not an "investment
company," or a company "controlled" by an "investment," within the
meaning of the Investment Company Act of 1940, as amended.
5.24. Full Disclosure. The representations and warranties of ViaCell
contained in this Agreement (including, without limitation, the Schedules
hereto), the Ancillary Agreements and any other agreement, certificate or
document furnished by or on behalf of ViaCell pursuant to this Agreement do
not contain any untrue statement of a material fact, or when taken as a
whole, omit to state a material fact necessary in order to make such
representations, warranties and statements not misleading. There is no fact
known to ViaCell that has not been disclosed to the Sellers in this Agreement
and the Schedules hereto or other documents, certificates or statements
furnished to the Company hereto that materially
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September 30, 2003
adversely affects, or (in the reasonable business judgment of ViaCell based
on facts of which it has knowledge) is reasonably likely to have a Material
Adverse Effect.
5.25. Financial. As of March 31, 2003, ViaCell had cash of $29.5 million.
6. COVENANTS OF THE COMPANY AND THE SELLERS.
6.1. Closing. The Company and the Sellers, as the case may be, will take
all of the actions and deliver all the various certificates, documents and
instruments described in Section 8 as being performed or delivered by the
Company or the Sellers, respectively.
6.2. Expenses. With respect to the costs and expenses (including legal,
accounting, consulting, advisory and brokerage) incurred in connection with
the Contemplated Transactions (the "Transaction Expenses"), ViaCell, the
Company and the Sellers shall each bear their own expenses incurred in
connection with the negotiation, execution and performance of this Agreement
and the Ancillary Agreements, provided, however, that the Transaction
Expenses listed in the Transaction Fee Statement as expenses of the Sellers
shall be borne by the Sellers and paid by the Company as such Seller's agent
pursuant to Section 2.6.6.
6.3. Sellers' Release. Except as set forth in Schedule 6.3, effective as
of the Closing, each Seller hereby releases, remises and forever discharges
any and all rights and claims that it has had, now has or might now have
against the Company.
6.4. Confidentiality.
6.4.1. Confidentiality of the Sellers. Each Seller acknowledges that
the success of the Company after the Closing depends upon the continued
preservation of the confidentiality of certain information possessed by
such Seller, that the preservation of the confidentiality of such
information by such Seller is an essential premise of the bargain between
the Sellers and ViaCell, and that ViaCell would be unwilling to enter into
this Agreement in the absence of this Section 6.4.1 Accordingly, each
Seller hereby agrees with ViaCell that such Seller and its Representatives
will not, and that such Seller will cause its Affiliates not to, at any
time on or after the Closing Date, directly or indirectly, without the
prior written consent of ViaCell, disclose or use, any confidential or
proprietary information involving or relating to the Business or the
Company or the business of ViaCell; provided, however, that the
information subject to the foregoing provisions of this sentence will not
include any information generally available to, or known by, the public
(other than as a result of disclosure in violation hereof); and provided,
further, that the provisions of this Section 6.4.1 will not prohibit any
retention of copies of records or disclosure (a) required by any
applicable Legal Requirement so long as reasonable prior notice is given
of such disclosure and a reasonable opportunity is afforded to contest the
same or (b) made in connection with the enforcement of any right or remedy
relating to this Agreement or the Contemplated Transactions. The Sellers
agree that they will be responsible for any breach or violation of the
provisions of this Section 6.4.1 by any of their Representatives.
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September 30, 2003
6.5. Further Assurances; Obligation to Satisfy Closing Conditions. From
and after the Closing Date, upon the request of ViaCell, the Company and the
Sellers will do, execute, acknowledge and deliver all such further acts,
assurances, deeds, assignments, transfers, conveyances and other instruments
and papers as may be reasonably required or appropriate or as may be
reasonably requested by ViaCell to carry out the Contemplated Transactions.
No Seller will take any action that is designed or intended to have the
effect of discouraging any lessor, licensor, supplier, distributor, customer
or employee of the Company or other Person with whom the Company has a
relationship from maintaining the same relationship with the Company after
the Closing as it maintained prior to the Closing. Each Seller will refer all
customer inquiries relating to the Business to ViaCell, or the Company, as
appropriate, from and after the Closing. Each party, after the date of
execution of this Agreement until the Closing Date, will use best efforts to
cause all closing conditions as specified in Sections 8 and 9 of this
Agreement to be satisfied as soon as practicable.
7. COVENANTS OF VIACELL.
7.1. Financing. ViaCell will use its best efforts to complete the
Financing prior to the Closing Date on the basis of the Series J Agreements
delivered in draft form to the Company prior to the date of this Agreement.
7.2. Company Employee Retention. All employment agreements to which the
Company is a party will remain in effect in accordance with their terms
following the Closing. All employees of the Company will be eligible,
following the Closing, to participate in the ViaCell 1998 Amended and
Restated Equity Incentive Plan (the "ViaCell Option Plan") at the discretion
of the Board of Directors of ViaCell. Following the Closing, for purposes of
participation in the ViaCell Option Plan and other benefit plans, ViaCell
will treat service by all current Company employees as service with ViaCell
for the same length of time.
7.3. New Company Employment Contracts. The Company and/or ViaCell will
offer Christian van den ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, and ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ new
employment agreements in the form attached hereto as Exhibit I with the
Company or ViaCell providing salary, bonus, employee benefits and equity
participation commensurate with their existing positions and functions and
consistent with ViaCell's employment policies generally, all in accordance
with applicable German law.
7.3.1. ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇. In addition to Dr. Wnendt's new employment
contract with the Company or ViaCell, after the Closing, ViaCell will
appoint ▇▇. ▇▇▇▇▇▇ to its executive management team to serve at the
discretion of ViaCell's Board of Directors for such period of time that
▇▇. ▇▇▇▇▇▇ remains an employee of the Company or ViaCell.
7.4. Consultancy Arrangements. The consultancy arrangements between the
Company and each of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, Dr. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ will remain in effect following the Closing
in accordance with their terms.
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September 30, 2003
7.4.1. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇. In the event that, within three years of the
Closing, (a) ViaCell does not complete a Qualified Public Offering or (b)
a Change of Control does not occur, ViaCell will at that time offer
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ a full-time employment position in a capacity
commensurate with his experience and scientific expertise, upon terms and
conditions to be agreed upon by the parties; provided that, ViaCell shall
not have an obligation to offer ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ full time employment if
he has at any time been in breach of his consultancy agreement with the
Company or ViaCell. In addition, following the Closing, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
will become an advisor to ViaCell's executive management team.
7.5. Advisory Board Position. Following the Closing, ViaCell will appoint
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ as co-chairman of its general Medical and Scientific
Advisory Board ("MSAB") for a term in accordance with ViaCell's standard
agreement. ▇▇. ▇▇▇▇▇▇ will be compensated on the same terms and conditions as
the current chairman of the ViaCell's MSAB.
7.6. USSC Technology Committee. Following the Closing, ViaCell will
establish a "USSC Technology Committee" consisting of certain designated
employees of ViaCell, including ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇. Such
committee will monitor ViaCell's future activities related to the research
and development of USSC-based products, and will make, at least
semi-annually, recommendations to ViaCell's executive management team
concerning the commercial and scientific viability of such USSC Company
Products. ViaCell may terminate the activities of the USSC Technology
Committee at any time following the Closing Date as it may determine in its
reasonable business judgment, provided that the Committee shall not be
terminated while the USSC Company Products are being actively developed and
the Milestones can be achieved.
7.7. European Operations. Subject to the provisions of this Section, after
the Closing and through the second anniversary thereof, ViaCell will continue
the Company's operations at its current facility in Langenfeld, Germany. To
the extent practicable, ViaCell will utilize such facilities as the
headquarters for ViaCell's business activities in Europe for both private
umbilical cord blood banking and research and development in therapeutic
applications of stem cell technologies. Notwithstanding the foregoing,
ViaCell may, in its prudent business judgment, decide whether and at what
level to continue the Company's current operations in Langenfeld, Germany.
Should such European operations be discontinued by ViaCell, ViaCell will
continue the current research and development of any USCC Company Products
for purposes of achieving the Milestones to the extent required by Section
7.8 at any location deemed suitable by ViaCell.
7.8. Milestones. ViaCell will use its best efforts commensurate with the
value of the USSC Company Programs in light of the other activities being
conducted by ViaCell, including the provision of funds, to achieve the
Milestones, subject to any reasonable determination by ViaCell, after due
consideration of the recommendation of the USSC Technology Committee, that
the development programs of the USSC Company Products should be suspended or
discontinued for a business or scientific reason, including without
limitation ViaCell's prioritization of its research and development programs
and its research and development budget.
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September 30, 2003
7.9. Institutional Obligations. Following the Closing, ViaCell will assume
the Company's financial obligations to the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ University of
Dusseldorf.
7.10. Change of Control. No Change of Control transaction of ViaCell shall
be effective unless the successor to ViaCell assumes the obligations of
ViaCell in connection with the Contemplated Transactions and under this
Agreement; provided, however, that Section 7.2, Section 7.3, Section 7.4 and
Section 7.5 shall all terminate upon a Change of Control.
8. CONDITIONS TO VIACELL'S OBLIGATIONS AT THE CLOSING.
The obligations of ViaCell to consummate the Closing are subject to the
fulfillment of each of the following conditions unless waived by ViaCell in
accordance with Section 12.3:
8.1. Representations and Warranties. The representations and warranties of
the Company and the Sellers contained in this Agreement and in any document,
instrument or certificate delivered hereunder (a) that are not qualified by
materiality or Material Adverse Effect will be true and correct in all
material respects at and as of the Closing with the same force and effect as
if made as of the Closing, and (b) that are qualified by materiality or
Material Adverse Effect will be true and correct in all respects at and as of
the Closing with the same force and effect as if made as of the Closing, in
each case, other than representations and warranties that expressly speak
only as of a specific date or time, which will be true and correct as of such
specified date or time.
8.2. Performance. The Company and each Seller will have performed and
complied in all material respects, with all agreements, obligations and
covenants contained in this Agreement that are required to be performed or
complied with by them at or prior to the Closing.
8.3. Stock and Option Certificates.
8.3.1. Series A Shares. The Series A Sellers will have delivered to
ViaCell certificates evidencing the assignment of all of the Series A
Shares substantially in the form of Assignment attached hereto as Exhibit
H.
8.3.2. Common Shares. The Common Sellers will have delivered to ViaCell
certificates evidencing the assignment of all of the Common Shares
substantially in the form of Assignment attached hereto as Exhibit H.
8.3.3. Company Options. The Company Option Holders will have delivered
to ViaCell waivers of any entitlement to receive Company Options.
8.3.4. Series I Agreements. The Sellers will, prior to or at the
Closing, have executed and become parties to all of the Series I
Agreements or amendments thereto.
8.3.5. Share Register. The Company will have delivered to ViaCell an
updated excerpt of the share register of the Company stating that ViaCell
is the holder of all Shares of the Company.
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Stock Purchase Agreement
September 30, 2003
8.4. Qualifications. No provision of any applicable Legal Requirement and
no Government Order will prohibit the consummation of any of the Contemplated
Transactions.
8.5. Absence of Litigation. No Action will be pending or threatened in
writing which may result in a Governmental Order (nor will there be any
Governmental Order in effect) (a) which would prevent consummation of any of
the Contemplated Transactions, (b) which would result in any of the
Contemplated Transactions being rescinded following consummation, (c) which
would limit or otherwise adversely affect the right of ViaCell to own the
Shares (including the right to vote the Shares), to control the Company, or
to operate all or any material portion of either the Business or Assets of
the Company or of the business or assets of ViaCell or any of its Affiliates
or (d) would compel ViaCell or any of its Affiliates to dispose of all or any
material portion of either the Business or Assets of the Company or the
business or assets of ViaCell or any of its Affiliates.
8.6. Legal Opinion. ViaCell will have received from ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇,
counsel to the Company (or other counsel reasonably acceptable to ViaCell),
its opinion with respect to the Contemplated Transactions, which opinion will
be in the form attached hereto as Exhibit C.
8.7. Consents, etc. All actions by (including any authorization, consent
or approval) or in respect of (including notice to), or filings with, any
Governmental Authority or other Person that are required to consummate the
Contemplated Transactions, as disclosed in Schedule 3.6, Schedule 4.2 and
Schedule 5.9 or as otherwise required by law, will have been obtained or
made, in a manner reasonably satisfactory in form and substance to ViaCell,
and no such authorization, consent or approval will have been revoked.
8.8. Stockholder Approval. ViaCell will have received the consents of its
stockholders required to consummate the Contemplated Transactions.
8.9. Proceedings and Documents. All corporate and other proceedings in
connection with the Contemplated Transactions and all documents incident
thereto will be reasonably satisfactory in form and substance to ViaCell and
its counsel, and they will have received all such counterpart original and
certified or other copies of such documents as they may reasonably request.
8.10. Ancillary Agreements. Each of the Ancillary Agreements will
have been executed and delivered to ViaCell by each of the other
parties thereto.
8.11. Financing. ViaCell will have closed on an offering of not
less than $10 million in new equity capital to be received in cash
pursuant to the private placement of its Series J Convertible Preferred
Stock at a price of at least $8 per share.
8.12. No Material Adverse Change. Since June 30, 2003, there will
have occurred no events nor will there exist circumstances that have
resulted in a Material Adverse Effect on the Company.
8.13. Compliance Certificate. The Company will have delivered to
ViaCell a certificate substantially in the form of Exhibit D.
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8.14. Initial Budget. The Initial Budget attached hereto as Exhibit F will
have been completed, approved and adopted by ViaCell.
8.15. Company Employee Contracts. ▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇.
▇▇▇▇▇▇▇▇▇ van den Bos will have executed employment agreements with the
Company or ViaCell in the form attached hereto as Exhibit I.
8.16. Resignations. ViaCell shall have received letters of resignation
from each current member of the Company's Supervisory Board, effective upon
the Closing.
8.17. Supporting Documents. ViaCell shall have received the following:
(a) Certified excerpt of the Commercial Register of the Company
issued at most five (5) days prior to Closing;
(b) Copies of the resolution of the Supervisory Board of the Company
("Aufsichtsrat") notified by the Managing Director of the Company,
authorizing and approving the assignment of the Shares pursuant to
Article 6 subsection 3 of the Company's Articles of Association; and
(c) A certificate executed by the Managing Director of the Company
certifying (1) the due authorization of the resolution referred to in
subparagraph (b) above, (2) the names, titles and signatures of the
officers authorized to execute the documents referred to in
subparagraph (b) above, and (3) that the Company's Organizational
Documents have not been amended, modified or supplemented in any way.
8.18. Net Working Capital and Transaction Fees. The Company shall have
delivered, at least three (3) Business Days prior to the Closing Date, the
Closing Date Net Working Capital Statement to ViaCell which statement shall
be attached hereto as Exhibit G, and the Transaction Fee Statement, which
statement shall be attached hereto as Exhibit L.
9. CONDITIONS TO THE COMPANY AND THE SELLERS' OBLIGATIONS AT THE
CLOSING.
The obligations of the Company and the Sellers to consummate the Closing is
subject to the fulfillment of each of the following conditions (unless waived by
the Company or Sellers in accordance with Section 12.4):
9.1. Representations and Warranties. The representations and warranties of
ViaCell contained in this Agreement and in any document, instrument or
certificate delivered hereunder (a) that are not qualified by materiality or
Material Adverse Effect will be true and correct in all material respects at
and as of the Closing with the same force and effect as if made as of the
Closing and (b) that are qualified by materiality or Material Adverse Effect
will be true and correct in all respects at and as of the Closing with the
same force and effect as if made as of the Closing, in each case, other than
representations and warranties that expressly speak only as of a specific
date or time, which will be true and correct as of such specified date or
time.
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September 30, 2003
9.2. Performance. ViaCell will have performed and complied with, in all
material respects, all agreements, obligations and covenants contained in
this Agreement and the Ancillary Agreements that are required to be performed
or complied with by ViaCell at or prior to the Closing.
9.3. Qualifications. No provision of any applicable Legal Requirement and
no Government Order will prohibit the consummation of any of the Contemplated
Transactions.
9.4. Absence of Litigation. No Action will be pending or threatened in
writing which may result in Governmental Order, nor will there be any
Governmental Order in effect, (a) which would prevent consummation of any of
the Contemplated Transactions or (b) which would result in any of the
Contemplated Transactions being rescinded following consummation (and no such
Governmental Order will be in effect).
9.5. Legal Opinion. The Company and the Sellers will have received from
Ropes & ▇▇▇▇ LLP, counsel to ViaCell, its opinion with respect to the
Contemplated Transactions, which opinion will be in the form attached hereto
as Exhibit E.
9.6. Consents, etc. All actions by (including any authorization, consent
or approval) or in respect of (including notice to), or filings with, any
Governmental Authority or other Person that are required to consummate the
Contemplated Transactions, will have been obtained or made, in a manner
reasonably satisfactory in form and substance to the Sellers, and no such
authorization, consent or approval will have been revoked.
9.7. Proceedings and Documents. All corporate and other proceedings in
connection with the Contemplated Transactions and all documents incident
thereto will be reasonably satisfactory in form and substance to the Sellers
and to their counsel, and the Sellers will have received all such counterpart
original and certified or other copies of such documents as they may
reasonably request.
9.8. Note Escrow Agreement. The Note Escrow Agreement will have been
executed by the parties thereto and $4.2 million deposited with the Note
Escrow Agent in accordance with the terms of that agreement which is attached
hereto as Exhibit K.
9.9. Series I Agreements. ViaCell will have delivered to the Sellers its
executed counterpart signature page to the Series I Agreements.
9.10. Ancillary Agreements. Each of the Ancillary Agreements to which
ViaCell is a party will have been executed and delivered to the Company and
the Sellers by each of the other parties thereto.
9.11. No Material Adverse Change. Since the ViaCell Balance Sheet Date,
there will have occurred no events nor will there exist circumstances which
singly or in the aggregate have resulted in a Material Adverse Effect.
9.12. Stock Certificates.
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Stock Purchase Agreement
September 30, 2003
9.12.1. Series I Shares. ViaCell will have delivered to the Series A
Sellers and the Common Sellers Series I Stock certificates evidencing the
number of shares of Series I Stock set forth opposite each Seller's name
on Schedule 1 and Schedule 2, respectively.
9.12.2. Escrowed Shares. ViaCell will have delivered the Escrowed
Shares to the Escrow Agent.
9.13. Compliance Certificate. ViaCell will have delivered to the
Company and the Sellers a certificate substantially in the form of
Exhibit D.
9.14. Financing. ViaCell will have closed on an offering of not less than
$10 million in new equity capital to be received in cash pursuant to the
private placement of its Series J Convertible Preferred Stock at a price of
at least $8.00 per share on the basis of the Series J Agreements in the
version delivered to the Company prior to the date of this Agreement.
9.15. Initial Budget. The Initial Budget attached hereto as Exhibit
F will have been completed, approved and adopted by ViaCell.
9.16. Supporting Documents. The Sellers shall have received the
following:
(a) Certificate of good standing of ViaCell, certified by the
Delaware Secretary of State;
(b) Copies of resolutions of the Board of Directors of ViaCell and
of the stockholders of ViaCell, certified by the Secretary of ViaCell,
authorizing and approving the execution, delivery and performance of
this Agreement, all Ancillary Agreements, and all other documents and
instruments to be delivered pursuant hereto and thereto; and
(c) Certificates executed by the Secretary of ViaCell certifying (1)
the due authorization of the resolutions referred to in subparagraph
(b) above, (2) the names, titles and signatures of the officers
authorized to execute the documents referred to in subparagraph (b)
above, and (3) that the Articles and the Bylaws of the Company have not
been amended, modified or supplemented in any way.
10. TERMINATION.
10.1. Termination of Agreement. This Agreement may be terminated
(the date on which the Agreement is terminated, the "Termination Date")
at any time prior to the Closing:
(a) by mutual written consent of ViaCell, the Company, the Seller's
Representative and the MPM Sellers;
(b) by either ViaCell or the Company if a final nonappealable
Governmental Order permanently enjoining, restraining or otherwise
prohibiting the Closing will have been issued by a Governmental Authority
of competent jurisdiction;
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(c) by ViaCell if either (i) there will be a material breach of, or
material inaccuracy in, any representation or warranty of the Company or
any of the Sellers contained in this Agreement as of the date of this
Agreement (other than representations or warranties that expressly speak
only as of a specific date or time, with respect to which ViaCell's right
to terminate will arise only in the event of a breach of, or inaccuracy
in, such representation or warranty as of such specified date or time), or
(ii) the Company or a Seller will have breached or violated in any
material respect any of their respective covenants and agreements
contained in this Agreement; in either case which breach remains uncured
for ten (10) business days following notice by ViaCell to the Company; or
(d) by the Company if either (i) there will be a material breach of, or
material inaccuracy in, any representation or warranty of ViaCell
contained in this Agreement as of the date of this Agreement (other than
representations or warranties that expressly speak only as of a specific
date or time, with respect to which the Company's right to terminate will
arise only in the event of a breach of, or inaccuracy in, such
representation or warranty as of such specified date or time), or (ii)
ViaCell will have breached or violated in any material respect any of its
covenants and agreements contained in this Agreement; in either case which
breach remains uncured for ten (10) Business Days following notice by the
Company to ViaCell.
10.2. Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 10.1, this Agreement - other than the
provisions of Sections 6.2 (Expenses), 6.4 (Confidentiality), 12.11
(Governing Law), and 12.12 (Dispute Resolution) - will then be null and void
and have no further force and effect and all other rights and Liabilities of
the parties hereunder will terminate without any Liability of any party to
any other party, except for Liabilities arising in respect of breaches under
this Agreement by any party on or prior to the Termination Date.
11. INDEMNIFICATION.
11.1. Indemnification by the Sellers.
11.1.1. Indemnification. Subject to the limitations set forth in this
Section 11, each Seller will severally (but not jointly) indemnify and
hold harmless ViaCell and each of its Affiliates (including, following the
Closing, the Company), and the Representatives and Affiliates of each of
the foregoing Persons (each, a "ViaCell Indemnified Person"), from,
against and in respect of any and all Actions, Liabilities, Governmental
Orders, Encumbrances, losses, damages, bonds, dues, assessments, fines,
penalties, Taxes, fees, costs (including costs of investigation, defense
and enforcement of this Agreement), expenses or amounts paid in settlement
(in each case, including reasonable attorneys' and experts fees and
expenses), whether or not involving a Third Party Claim (collectively,
"Losses"), incurred or suffered by ViaCell Indemnified Persons or any of
them as a result of, arising out of or directly or indirectly relating to:
(a) any fraud of such Seller or the Company or any breach of, or
inaccuracy in, any representation or warranty made by the Company or
such Seller in (i) this Agreement (other than in Section 3), (ii) any
Schedule to this Agreement, (iii) any
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instrument of transfer or certificate required to be delivered pursuant
to this Agreement, or (iv) the documents required to be delivered
pursuant to Section 8.3.3, Section 8.16 and Section 8.18 of this
Agreement; or
(b) any breach or violation of any covenant or agreement of the
Company contained in this Agreement to the extent required to be
performed or complied with by the Company prior to the Closing pursuant
to this Agreement; or
(c) any fraud by the Company, or any breach of, or inaccuracy in,
any representation or warranty made by the Company in Section 3; or
(d) any breach or violation of any covenant or agreement of such
Seller (including under this Section 11) set forth in this Agreement.
11.1.2. Monetary Limitations. The Sellers will have no obligation to
indemnify ViaCell Indemnified Persons pursuant to Sections 11.1.1(a) and
11.1.1(c) in respect of Losses arising from the breach of, or inaccuracy
in, any representation or warranty described therein, and (ii) Sections
11.1.1(b) and 11.1.1(d) in respect of Losses arising from a breach or
violation of any covenant or agreement described therein unless the
aggregate amount of all such Losses incurred or suffered by ViaCell
Indemnified Persons exceeds $150,000 (at which point the Sellers will
indemnify ViaCell Indemnified Persons for all such Losses), and the
Sellers' aggregate liability in respect of claims for indemnification
pursuant to Section 11.1.1(a) through 11.1.1(d), other than in respect of
claims based on conduct constituting fraud, fraud in the inducement,
intentional misrepresentation or claims based on breaches of Sections 6.4
or 6.5 of this Agreement, will not exceed fifty percent (50%) of the value
of all shares of Series I Stock issued at Closing pursuant to Sections 2.1
and 2.2 hereof, plus 50% of the value of the initial number of Contingent
Shares (with each such share under Sections 2.1, 2.2 and 2.3 valued at
$8.00) (the "Cap"); provided that, the Cap shall be reduced by 50% of the
value of the Escrowed Shares and the Contingent Shares (valued at $8.00
per share) upon termination of the escrow and the obligation to issue the
Contingent Shares as described in Sections 2.2.3 and 2.3.3. Each Seller's
several liability shall not, with respect to any and all claims brought
under this Section 11 for Losses, exceed such Seller's proportionate share
of the Cap, based on the total amount of consideration potentially payable
to such Seller pursuant to Section 2.1 through Section 2.4 of this
Agreement and with respect to each such claim for Losses, each Seller's
several liability shall not exceed the percentage of such claim for Losses
that is equal to such Seller's percentage share of the Cap, based on the
total amount of consideration potentially payable to such Seller pursuant
to Sections 2.1 through 2.4 of this Agreement; provided further, that in
no event shall any Seller be required to indemnify any ViaCell Indemnified
Person against any Losses arising out of fraud or intentional
misrepresentation by, or breach of any representation, warranty, covenant
or agreement of, any other Seller.
11.2. Time for Claims. No claim may be made or suit instituted seeking
indemnification pursuant to Section 11.1.1(a) through 11.1.1(d) unless a
written notice describing such breach or inaccuracy or violation in
reasonable detail in light of the
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circumstances then known to the ViaCell Indemnified Party is provided to the
Indemnifying Party within eighteen (18) months after the Closing Date.
11.3. Third Party Claims.
11.3.1. Notice of Claim. If any third party will notify an Indemnified
Party with respect to any matter (a "Third Party Claim") which may give
rise to an Indemnified Claim against an Indemnifying Party under Section
11.1 and Section 11.2, then the Indemnified Party will promptly give
written notice to the Indemnifying Party; provided, however, that no delay
on the part of the Indemnified Party in notifying the Indemnifying Party
will relieve the Indemnifying Party from any obligation under this Section
11, except to the extent such delay actually and materially prejudices the
Indemnifying Party. For the avoidance of doubt, each Third Party Claim
shall be subject to the limitations set forth in this Section 11.
11.3.2. Assumption of Defense, etc. The Indemnifying Party will be
entitled to participate in the defense of any Third Party Claim that is
the subject of a notice given by the Indemnified Party pursuant to Section
11.3.1. In addition, the Indemnifying Party will have the right to defend
the Indemnified Party against the Third Party Claim with counsel of its
choice reasonably satisfactory to the Indemnified Party so long as (a) the
Indemnifying Party gives written notice to the Indemnified Party within
fifteen days after the Indemnified Party has given notice of the Third
Party Claim that the Indemnifying Party will indemnify the Indemnified
Party from and against the entirety of any and all Losses the Indemnified
Party may suffer resulting from, arising out of, relating to, in the
nature of, or caused by the Third Party Claim, (b) the Indemnifying Party
provides the Indemnified Party with evidence reasonably acceptable to the
Indemnified Party that the Indemnifying Party will have adequate financial
resources to defend against the Third Party Claim and fulfill its
indemnification obligations hereunder, (c) the Third Party Claim involves
only money damages and does not seek an injunction or other equitable
relief against the Indemnified Party, (d) the Indemnified Party has not
been advised by counsel that an actual or potential conflict exists
between the Indemnified Party and the Indemnifying Party in connection
with the defense of the Third Party Claim, (e) the Third Party Claim does
not relate to or otherwise arise in connection with Taxes or any criminal
or regulatory enforcement Action, (f) settlement of, an adverse judgment
with respect to or the Indemnifying Party's conduct of the defense of the
Third Party Claim is not, in the good faith judgment of the Indemnified
Party, likely to be adverse to the Indemnified Party's reputation or
continuing business interests (including its relationships with current or
potential customers, suppliers or other parties material to the conduct of
its business) and (g) the Indemnifying Party conducts the defense of the
Third Party Claim actively and diligently. The Indemnified Party may
retain separate co-counsel at its sole cost and expense and participate in
the defense of the Third Party Claim; provided, however, that the
Indemnifying Party will pay the fees and expenses of separate co-counsel
retained by the Indemnified Party that are incurred prior to Indemnifying
Party's assumption of control of the defense of the Third Party Claim.
11.3.3. Limitations on Indemnifying Party. The Indemnifying Party will
not consent to the entry of any judgment or enter into any compromise or
settlement with
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respect to the Third Party Claim without the prior written consent of the
Indemnified Party unless such judgment, compromise or settlement (a)
provides for the payment by the Indemnifying Party of money as sole relief
for the claimant, (b) results in the full and general release of the
ViaCell Indemnified Persons from all liabilities arising or relating to,
or in connection with, the Third Party Claim and (c) involves no finding
or admission of any violation of Legal Requirements or the rights of any
Person and no effect on any other claims that may be made against the
Indemnified Party.
11.3.4. Indemnified Party's Control. If the Indemnifying Party does not
deliver the notice contemplated by clause (a), or the evidence
contemplated by clause (b), of Section 11.3.2 within 15 days after the
Indemnified Party has given notice of the Third Party Claim, or otherwise
at any time fails to conduct the defense of the Third Party Claim actively
and diligently, the Indemnified Party may defend, and may consent to the
entry of any judgment or enter into any compromise or settlement with
respect to, the Third Party Claim in any manner it may reasonably deem
appropriate (and the Indemnified Party need not consult with, or obtain
any consent from, the Indemnifying Party in connection therewith). If such
notice and evidence is given on a timely basis and the Indemnifying Party
conducts the defense of the Third Party Claim actively and diligently but
any of the other conditions in Section 11.3.2 is or becomes unsatisfied,
the Indemnified Party may defend, and may consent to the entry of any
judgment or enter into any compromise or settlement with respect to, the
Third Party Claim; provided, however, that the Indemnifying Party will not
be bound by the entry of any such judgment consented to, or any such
compromise or settlement effected, without its prior written consent
(which consent will not be unreasonably withheld or delayed). In the event
that the Indemnified Party conducts the defense of the Third Party Claim
pursuant to this Section 11.3.4, the Indemnifying Party will (a) advance
the Indemnified Party promptly and periodically for the costs of defending
against the Third Party Claim (including reasonable attorneys' fees and
expenses) and (b) remain responsible for any and all other Losses that the
Indemnified Party may incur or suffer resulting from, arising out of,
relating to, in the nature of or caused by the Third Party Claim to the
fullest extent provided in this Section 11.
11.3.5. Consent to Jurisdiction Regarding Third Party Claim. The
Sellers, each in its capacity as an Indemnifying Party, hereby consents to
the non-exclusive jurisdiction of any court in which any Third Party Claim
may be brought against any Indemnified Party for purposes of any claim
which such Indemnified Party may have against such Indemnifying Party
pursuant to this Agreement in connection with such Third Party Claim, and
in furtherance thereof, the provisions of Section 12.12 are incorporated
herein by reference, mutatis mutandis.
11.4. No Circular Recovery. With respect to any claim brought by a ViaCell
Indemnified Person against any Seller relating to this Agreement and any of
the Contemplated Transactions, each Seller expressly waives any right of
subrogation, contribution, advancement, indemnification or other claim
against the Company with respect to any amounts owed by such Seller pursuant
to this Section 11.
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September 30, 2003
11.5. Indemnity Escrow; Calculation of Several Liability. Any
Indemnity Claim for Losses pursuant to this Section 11 shall be
satisfied in the following manner subject to the Cap set forth in
Section 11.1.2:
(a) 81.25% of such Indemnity Claim shall be paid through the return to
ViaCell of the Series I Shares paid to the Series A Sellers and the Common
Sellers at Closing pursuant to Section 2.1 of this Agreement with each
share valued, for purposes of this Section 11, at $8.00 per share,
provided that, if ViaCell shall have completed an initial public offering
prior to the time such shares are returned to satisfy an Indemnity Claim,
the shares will be valued at the greater of (x) $8.00 per share and (y)
the then current market price of such stock (calculated as the average
closing price for the 20 consecutive trading days ending on the second day
prior to the date such shares are returned) and further provided, that
each Indemnity Claim satisfied pursuant to this clause shall be allocated
(i) 51.45% to the Common Sellers on a pro rata basis based on Schedule 2
hereto and (ii) 48.55% to the Series A Sellers on a pro rata basis based
on Schedule 1 hereto;
(b) 8.53% of such Indemnity Claim shall be paid through a reduction of
the shares of Series I Stock held in escrow pursuant to Section 2.2 of
this Agreement or a return of such shares following a release from escrow
with each share valued, for purposes of this Section 11, at $8.00 per
share, provided that, if ViaCell shall have completed an initial public
offering prior to the time such Escrowed Shares are reduced to satisfy an
Indemnity Claim, such shares will be valued at the greater of (x) $8.00
per share and (y) the then current market price of such stock (calculated
as the average closing price for the 20 consecutive trading days ending on
the second day prior to the date such shares are returned) and further
provided, that each Indemnity Claim satisfied pursuant to this clauses
shall be allocated to the Common Sellers on a pro rata basis based on
Schedule 3 hereto;
(c) 10.22% of such Indemnity Claim shall be paid for as long as there
are Contingent Shares that have not been issued to the MPM Sellers through
a pro rata reduction based on Schedule 5 hereto of the total amount of
Contingent Shares, or a pro rata return of such shares following the
issuance thereof, with each share valued, for purposes of this Section 11,
at $8.00 per share, provided that, if ViaCell shall have completed an
initial public offering prior to the time such shares are returned to
satisfy an Indemnity Claim, the shares will be valued at the greater of
(x) $8.00 per share and (y) the then current market price of such stock
(calculated as the average closing price for the 20 consecutive trading
days ending on the second day prior to the date such shares are returned);
and
(d) in the event that all shares allocable to the Series A Sellers have
been used to satisfy indemnification claims pursuant to this Section 11 in
the manner set forth in clauses (a), (b) and (c) above or have been sold
or otherwise transferred, and there are additional claims against the
Series A Sellers in accordance with this Section 11, any remaining amounts
owing on such Indemnity Claim that are allocable to the Series A Sellers
shall be paid through a pro rata reduction based on Schedule 1 hereto of
the principal amounts owing under each of the Notes.
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Stock Purchase Agreement
September 30, 2003
(e) In the event that a Seller has, at the time that an indemnification
payment is owed hereunder, sold or otherwise transferred all of the shares
of stock that would otherwise be returned to ViaCell under this Section
11, such Seller shall be obligated to make such indemnification payment
that is otherwise not satisfied by a return of shares to ViaCell in cash
based on a value of $8.00 per share, provided that, if ViaCell shall have
completed an initial public offering prior to the time such shares would
have been returned to satisfy an Indemnity Claim, the cash payment will be
valued at the greater of (x) $8.00 per share and (y) the then current
market price of such stock (calculated as the average closing price for
the 20 consecutive trading days ending on the second day prior to the date
such shares would have been returned). For the avoidance of doubt, no
Seller shall be required to make any cash payment to satisfy
indemnification claims hereunder if such claim can be satisfied by the
return of shares in accordance with the terms of this Section 11.5, and no
Seller shall be required to satisfy any Indemnification Claim under this
Agreement other than through the return of shares (or the reduction of
shares in escrow) if and to the extent that such Seller has not sold or
transferred its shares, except in the case of the Series A Sellers
pursuant to clause (d) of this section.
11.6. Offset. The calculation of any such Loss will reflect the amount of
any insurance proceeds or recoveries from third parties received in cash by
the ViaCell Indemnified Persons in respect of such Loss, net of the present
value of any increase in insurance premiums or other charges paid or to be
paid by the ViaCell Indemnified Persons resulting from such Loss and all
costs and expenses incurred by any ViaCell Indemnified Person in recovering
such proceeds from its insurers or third parties, as applicable.
11.7. Consequential Damages. In no event shall any of the Indemnifying
Parties be responsible or liable for any Losses or other amounts under this
Section 11 that are consequential in the nature of lost profits or punitive
damages, but the ViaCell Indemnified Persons shall otherwise be entitled to
indemnification for all other Losses.
11.8. Knowledge and Investigation. ViaCell shall not be entitled to
recover under this Section 11 for matters of which it had actual
knowledge at Closing.
11.9. Remedies Cumulative. The rights of each ViaCell Indemnified Person
under this Section 11 are cumulative, and each ViaCell Indemnified Person
will have the right in any particular circumstance, in its sole discretion,
to enforce any provision of this Section 11 without regard to the
availability of a remedy under any other provision of this Section 11.
11.10. Exclusive Remedy. Except for remedies that cannot be waived as a
matter of law or as provided in Section 12.13, if the Closing occurs,
indemnification pursuant to this Section 11 will be the exclusive remedy of
ViaCell Indemnified Person for any breach of this Agreement (including any
representation, warranty, covenant and agreement contained in this
Agreement), other than in respect of claims based on conduct constituting
fraud, fraud in the inducement, intentional misrepresentation or claims based
on breaches of Sections 6.4 or 6.5 of this Agreement; provided however that
in no circumstances shall any Seller liable to any ViaCell Indemnified Party
for any amounts in excess of the total consideration actually paid to such
Seller pursuant to Sections 2.1, 2.2, 2.3 and 2.4 hereof.
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12. MISCELLANEOUS
12.1. Notices. All notices, requests, demands, claims and other
communications required or permitted to be delivered, given or otherwise
provided under this Agreement must be in writing and must be delivered, given
or otherwise provided:
(a) by hand (in which case, it will be effective upon delivery); or
(b) by overnight delivery by a nationally recognized courier service
(in which case, it will be effective on two Business Days after being
deposited with such courier service);
in each case, to the address (or facsimile number) listed below:
If to the Company, to it at:
Kourion Therapeutics AG
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Telephone number: ▇▇▇-▇▇-▇▇▇▇-▇▇▇-▇▇▇▇
Facsimile number: 011-49-2173-392-2150
Attention: PD ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
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Rechtsanwalte
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Telephone number: ▇▇▇-▇▇-▇▇▇-▇▇▇-▇▇-▇
Facsimile number: 011-49-211-836-61-50
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
If to ViaCell, to it at:
ViaCell, Inc.
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Telephone number: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile number: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. Beer
with a copy to:
Ropes & ▇▇▇▇ LLP
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Telephone number: (▇▇▇) ▇▇▇-▇▇▇▇
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Facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
If to the Sellers, to the address listed in Schedule 1 or Schedule 2 to
this Agreement.
Each of the parties to this Agreement may specify different address or facsimile
number by giving notice in accordance with this Section 12.1 to each of the
other parties hereto.
12.2. Succession and Assignment; No Third-Party Beneficiary. Subject to
the immediately following sentence, this Agreement will be binding upon and
inure to the benefit of the parties hereto and their respective successors
and permitted assigns, each of which such successors and permitted assigns
will be deemed to be a party hereto for all purposes hereof. No party may
assign, delegate or otherwise transfer either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written
approval of the other parties which approval shall not be unreasonably
withheld; provided, however, that ViaCell may (a) assign any or all of its
rights and interests hereunder to one or more of its Affiliates and (b)
designate one or more of its Affiliates to perform its obligations hereunder,
in each case, so long as ViaCell is not relieved of any Liability hereunder.
Except as expressly provided herein, this Agreement is for the sole benefit
of the parties and their permitted successors and assignees and nothing
herein expressed or implied will give or be construed to give any Person,
other than the parties and such successors and assignees, any legal or
equitable rights hereunder.
12.3. Consent of Sellers. Each Seller and the Company hereby consents to
and approves in all respects the assignment of the Shares to ViaCell as
contemplated hereby. Each Seller in particular waives (i) any rights of first
refusal and rights of co-sale it may have, in particular under the
shareholders agreement dated June 25, 2001, in relation to the sale and
assignment of the Shares by each Seller to ViaCell under this Agreement, and
(ii) any rights regarding a restriction on transfer contained in any
agreements to which the Sellers are a party.
12.4. Amendments and Waivers. No amendment or waiver of any provision of
this Agreement will be valid and binding unless it is in writing and signed,
in the case of an amendment, by ViaCell, the Company and the Sellers, or in
the case of a waiver, by the party against whom the waiver is to be
effective. No waiver by any party of any breach or violation or, default
under or inaccuracy in any representation, warranty or covenant hereunder,
whether intentional or not, will be deemed to extend to any prior or
subsequent breach, violation, default of, or inaccuracy in, any such
representation, warranty or covenant hereunder or affect in any way any
rights arising by virtue of any prior or subsequent such occurrence. No delay
or omission on the part of any party in exercising any right, power or remedy
under this Agreement will operate as a waiver thereof.
12.5. Provisions Concerning Sellers' Representative.
12.5.1. Appointment. Each Seller hereby appoints ▇▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ as the agent, proxy and attorney-in-fact for such Seller for
all purposes under this Agreement
-▇▇-
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Agreement
September 30, 2003
(including full power and authority to act on the Sellers' behalf).
Without limiting the generality of the foregoing, the Sellers'
Representative will be authorized to:
(a) in connection with the Closing, execute and receive all
documents, instruments, certificates, statements and agreements on
behalf of and in the name of the Sellers necessary to effectuate the
Closing and consummate the Contemplated Transactions;
(b) take all actions on behalf of the Sellers in connection with any
claims made under Section 11 to defend or settle such claims, and to
make payments in respect of such claims;
(c) execute and deliver, should it elect to do so in its sole
discretion, on behalf of the Sellers, any amendment to this Agreement
so long as such amendment will apply equally to all Sellers; and
(d) take all other actions to be taken by or on behalf of the
Sellers and exercise any and all rights which the Sellers are permitted
or required to do or exercise under this Agreement.
12.5.2. Liability. The Sellers' Representative will not be liable to
any Seller for any action taken by it in good faith pursuant to this
Agreement, and the Sellers will jointly and severally indemnify the
Sellers' Representative from any Losses arising out of its serving as the
Sellers' Representative hereunder. The Sellers' Representative is serving
in that capacity solely for purposes of administrative convenience, and is
not personally liable in such capacity for any of the obligations of the
Sellers hereunder, and ViaCell agrees that it will not look to the
personal assets of the Sellers' Representative, acting in such capacity,
for the satisfaction of any obligations to be performed by the Sellers
hereunder.
12.6. Entire Agreement. This Agreement, together with the other Ancillary
Agreements and any documents, instruments and certificates explicitly
referred to herein, constitutes the entire agreement among the parties hereto
with respect to the subject matter hereof and supersedes any and all prior
discussions, negotiations, proposals, undertakings, understandings and
agreements, whether written or oral, with respect thereto.
12.7. Schedules; Listed Documents, etc. Neither the listing nor
description of any item, matter or document in any Schedule hereto nor the
furnishing or availability for review of any document will be construed to
modify, qualify or disclose an exception to any representation or warranty of
any party made herein or in connection herewith, except to the extent that
such representation or warranty specifically refers to such Schedule and such
modification, qualification or exception is clearly described in such
Schedule. The disclosure in one Section of the Schedules shall be deemed to
be the disclosure with respect to all Sections of the representations and
warranties to which it is reasonably apparent that such disclosure is
applicable.
-▇▇-
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Agreement
September 30, 2003
12.8. Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of
which together will constitute but one and the same instrument. This
Agreement will become effective when duly executed by each party hereto.
12.9. Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction will not affect
the validity or enforceability of the remaining terms and provisions hereof
or the validity or enforceability of the offending term or provision in any
other situation or in any other jurisdiction. In the event that any provision
hereof would, under applicable law, be invalid or unenforceable in any
respect, each party hereto intends that such provision will be construed by
modifying or limiting it so as to be valid and enforceable to the maximum
extent compatible with, and possible under, applicable law.
12.10. Headings. The headings contained in this Agreement are for
convenience purposes only and will not in any way affect the meaning or
interpretation hereof.
12.11. Governing Law. This Agreement, the rights of the parties and all
Actions arising in whole or in part under or in connection herewith, will be
governed by and construed in accordance with the domestic substantive laws of
The Commonwealth of Massachusetts, (with the exception of the transfer of
title to the Common Shares and the Series A Shares to ViaCell which shall be
governed by German law), without giving effect to any choice or conflict of
law provision or rule that would cause the application of the laws of any
other jurisdiction.
12.12. Dispute Resolution; Forum.
12.12.1. Dispute Resolution. Any dispute arising out of or in
connection with this Agreement, including any question regarding its
existence, validity or termination (a "Dispute"), shall be referred to and
finally resolved by binding arbitration under the Rules of the
International Chamber of Commerce, which Rules are deemed to be
incorporated by reference into this clause. The parties also agree that
the arbitration shall be conducted in according to the 1999 International
Bar Association Rules on the Taking of Evidence in International
Commercial Arbitration. The arbitration panel shall consist of three
members. Each party shall nominate one member of the panel. The two
members shall agree on the third arbitrator within thirty (30) days. If
the two arbitrators are unable to agree on the third, the International
Chamber of Commerce shall appoint the third arbitrator. The language to be
used in the arbitral proceeding shall be English. Each party shall bear
its own costs associated with the resolution or arbitration of any
Dispute, and all fees and other costs of the arbitration proceeding shall
be shared equally between the parties.
12.12.2. Forum. Each party hereby agrees that any arbitral proceeding
commenced pursuant to Section 12.12.1 shall be conducted in Boston,
Massachusetts, if such proceeding is commenced by the Sellers and/or the
Company and Dusseldorf, Germany if such proceeding is commenced by
ViaCell.
-58-
Stock Purchase Agreement
September 30, 2003
12.13. Specific Performance. Each of the parties acknowledges and agrees
that the other parties would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are breached or violated. Accordingly, each of
the parties agrees that, without posting bond or other undertaking, the other
parties will be entitled to an injunction or injunctions to prevent breaches
or violations of the provisions of this Agreement and to enforce specifically
this Agreement and the terms and provisions hereof in any Action instituted
in any court of the United States or any state thereof having jurisdiction
over the parties and the matter in addition to any other remedy to which it
may be entitled, at law or in equity. Each party further agrees that, in the
event of any action for specific performance in respect of such breach or
violation, it will not assert that the defense that a remedy at law would be
adequate.
-▇▇-
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Agreement
September 30, 2003
IN WITNESS WHEREOF, each of the undersigned has executed this Agreement as
an agreement under seal as of the date first above written.
THE BUYER: VIACELL, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇
Title: CEO
THE COMPANY: KOURION THERAPEUTICS AG
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Seller's Representative:
[SELLER SIGNATURES TO FOLLOW ON NEXT PAGE]
Stock Purchase Agreement
September 30, 2003
THE SELLERS: MPM BIOVENTURES II, L.P.
By: MPM Asset Management II, L.P.,
its General Partner
By: MPM Asset Management II LLC,
its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Manager
MPM BIOVENTURES II-QP, L.P.
By: MPM Asset Management II, L.P.,
its General Partner
By: MPM Asset Management II LLC,
its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Manager
MPM BIOVENTURES GMBH & CO.
PARALLEL-BETEILIGUNGS KG
By: MPM Asset Management II, L.P., in
its capacity as the Special
Limited Partner
By: MPM Asset Management II LLC, its
General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Manager
MPM ASSET MANAGEMENT INVESTORS
2001 BVII LLC
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Manager
-2-
Stock Purchase Agreement
September 30, 2003
MPM FOUNDERS LLC
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Member
Stock Purchase Agreement
September 30, 2003
KOURION RM (REGENERATIVE MEDIZIN)
GMBH
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Seller's Representative
▇▇▇▇▇▇ ▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Seller's Representative
DR. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Seller's Representative
IRK-VERMOGENSVERWALTUNGS GMBH
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Seller's Representative
TTHU TECHNOLOGIETRANSFER
▇▇▇▇▇▇▇▇-▇▇▇▇▇-UNIVERSITAT GMBH
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Seller's Representative
Stock Purchase Agreement
September 30, 2003
GESELLSCHAFT VON FREUNDEN UND FORDERERN AN
DER ▇▇▇▇▇▇▇▇-▇▇▇▇▇-UNIVERSITAT DUSSELDORF
E.V.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Seller's Representative
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Seller's Representative
▇▇. ▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Seller's Representative
Stock Purchase Agreement
September 30, 2003
SCHEDULE 1
SERIES A SELLERS
Series A Seller Shares of Shares of Series I Stock to be Received Amount of
Series A Stock Note
to be Sold
Upfront Purchase Price Total Shares
Consideration Adjustment of Series I Stock
MPM BioVentures II-QP, L.P. 15,437 175,934 45,054 130,880 $ 9,438,694
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇. - ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇
MPM BioVentures GmbH & Co. 5,436 61,955 15,866 46,089 3,323,820
Parallel Bet. KG
▇▇▇▇▇▇▇▇▇▇. ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
MPM BioVentures II, L.P. 1,703 19,416 4,972 14,444 1,041,675
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇. - ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇
MPM Asset Management Investors 321 3,650 935 2,715 195,811
2001 BVII LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇. - ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇
TOTALS 22,897 260,955 66,827 194,128 $14,000,000
Aggregate Purchase Price Adjustment: $1,355,278
Portion of Adjustment Reflected on this Schedule: $534,616
SCHEDULE 2
COMMON SELLERS
Common Seller Shares of Shares of Series I Stock to be Received
Company
Common
Stock to be
Sold
For Upfront Purchase Total
Government Consideration Price Shares of
Grants Adjustment Series I
Stock
Kourion RM (Regenerative 20,400 102,502 188,977 48,394 243,085
Medizin) GmbH
vertreten durch den Geschaftsfuhrer ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, geb. 11.04.1942
▇▇▇▇▇▇▇▇▇▇. ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
MPM Founders LLC 3,453 17,350 31,987 8,191 41,146
vertreten durch den
Gesellschafter
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, geb.
09.02.1958
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇. - 31st floor
Boston, MA 02199; USA
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, geb 2,450 12,310 22,696 5,812 29,194
17.11.1943
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Dr. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, geb. 1,650 8,291 15,285 3,914 19,662
03.07.1964
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇. ▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
IRK - Vermogensverwaltungs GmbH 800 4,020 7,411 1,898 9,533
vertreten durch die
Geschaftsfuhrerin
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇, geb.
SCHEDULE 2 CONT.
COMMON SELLERS
Common Seller Shares of Shares of Series I Stock to be Received
Company
Common
Stock to be
Sold
For Upfront Purchase Total
Government Consideration Price Shares of
Grants Adjustment Series I
Stock
27.10.1955
▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
TTHU Technologietransfer 300 1,507 2,779 712 3,574
▇▇▇▇▇▇▇▇-▇▇▇▇▇-Universitat GmbH
vertreten durch die
Geschaftsfuhrer
▇▇▇▇▇▇ Oettker, geb.
07.04.1949
▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Gesellschaft von Freunden und 300 1,507 2,779 712 3,574
Forderern an der
▇▇▇▇▇▇▇▇-▇▇▇▇▇-Universitat
Dusseldorf e.V.
vertreten durch die
Vorstandsmitglieder
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, geb.
02.01.1939
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇, geb.
31.05.1942
Wolf-▇▇▇▇▇ ▇▇▇▇▇▇▇, geb.
03.07.1945
▇▇▇▇▇-▇▇▇▇▇▇▇▇▇-▇▇▇▇▇ ▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, geb. 250 1,256 2,316 593 2,979
28.02.1962
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇. ▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇, geb. 250 1,256 2,316 593 2,979
19.03.1948
Am Botanischen Garten 31,
-2-
SCHEDULE 2 CONT.
COMMON SELLERS
Common Seller Shares of Shares of Series I Stock to be Received
Company
Common
Stock to be
Sold
For Upfront Purchase Total
Government Consideration Price Shares of
Grants Adjustment Series I
▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
TOTALS 29,853 149,999 276,546 70,819 355,726
Aggregate Purchase Price Adjustment: $1,355,278
Portion of Adjustment Reflected on this Schedule: $566,552
-3-
SCHEDULE 3
ESCROWED SHARES
Seller Initial Number of Purchase Price Total Number of
Escrowed Shares Adjustment Escrowed Shares to be
Received
Kourion RM (Regenerative Medizin) 197,766 11,168 186,598
GmbH
vertreten durch den Geschaftsfuhrer
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, geb. 11.04.1942
▇▇▇▇▇▇▇▇▇▇. ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, geb 17.11.1943 23,751 1,341 22,410
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Dr. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, geb. 15,996 903 15,093
03.07.1964
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇. ▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
IRK - Vermogensverwaltungs GmbH 7,756 438 7,318
vertreten durch die
Geschaftsfuhrerin
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇, geb.
27.10.1955
▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
TTHU Technologietransfer 2,908 164 2,744
▇▇▇▇▇▇▇▇-▇▇▇▇▇-Universitat GmbH
vertreten durch die Geschaftsfuhrer
▇▇▇▇▇▇ Oettker, geb. 07.04.1949
▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
SCHEDULE 3 (CONT.)
Seller Initial Number of Purchase Price Total Number of
Escrowed Shares Adjustment Escrowed Shares to be
Received
Gesellschaft von Freunden und 2,908 164 2,744
Forderern an der
▇▇▇▇▇▇▇▇-▇▇▇▇▇-Universitat
Dusseldorf e.V.
vertreten durch die
Vorstandsmitglieder
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, geb. 02.01.1939
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇, geb. 31.05.1942
Wolf-▇▇▇▇▇ ▇▇▇▇▇▇▇, geb. 03.07.1945
▇▇▇▇▇-▇▇▇▇▇▇▇▇▇-▇▇▇▇▇ ▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, geb. 28.02.1962 2,424 137 2,287
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇. ▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇, geb. 2,424 137 2,287
19.03.1948
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
TOTALS 255,933 14,452 241,481
Aggregate Purchase Price Adjustment: $1,355,278
Portion of Adjustment Reflected on this Schedule: $115,616
SCHEDULE 4
COMPANY OPTIONS
Person Designated by
Option Holder Management to Receive Options Number of Option Shares
Prof. ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇ 350
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 350
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 350
Prof. ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 350
PD ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 3,444
Jurgen ▇▇▇▇▇ 1,035
▇▇. ▇▇▇▇▇▇▇▇▇ van den Bos 527
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 100
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 100
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇ 100
▇▇. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 13
▇▇▇▇▇▇▇ Altgen 13
▇▇▇▇▇▇ ▇▇▇▇▇▇ 13
Oezer Degisterici 13
▇▇▇▇▇▇▇ ▇▇▇▇ 13
▇▇▇▇▇ ▇▇▇▇ 13
▇▇▇▇▇ ▇▇▇▇▇ 13
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇ 13
▇▇▇▇▇▇ ▇▇▇▇▇▇ 13
▇▇▇▇▇▇ ▇▇▇▇▇ 13
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 13
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 13
TOTAL 6,975
SCHEDULE 5
CONTINGENT SHARES
Seller Initial Number of Purchase Price Total Number of
Contingent Shares Adjustment Contingent Shares
MPM BioVentures II-QP, L.P. 184,117 10,397 173,720
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇. - 31st floor
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇
MPM BioVentures GmbH & Co. Parallel 64,836 3,661 61,175
Bet. KG
▇▇▇▇▇▇▇▇▇▇. ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
MPM BioVentures II, L.P. 20,320 1,147 19,173
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇. - 31st floor
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇
MPM Asset Management Investors 2001 3,819 216 3,603
BVII LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇. - ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇
MPM Founders LLC 33,475 1,890 31,585
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇. - ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇
TOTALS 306,567 17,311 289,256
Aggregate Purchase Price Adjustment: $1,355,278
Portion of Adjustment Reflected on this Schedule: $138,488
SCHEDULE 6
PERCENTAGE OWNERSHIP
MILESTONE PAYMENT PERCENTAGE OWNERSHIP
SHAREHOLDER: PERCENTAGE OWNERSHIP:
Kourion RM (Regenerative Medizin) GmbH 35.158472%
MPM BioVentures II-QP L.P. 32.731848%
MPM BioVentures GmbH & Co. Parallel ▇▇▇.▇▇ 11.526464%
MPM Founders LLC 5.951088%
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 4.222464%
MPM BioVentures II L.P. 3.612361%
Dr. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 2.843700%
IRK-Vermogensverwaltungs GmbH 1.378764%
MPM Asset Management Investors 2001 BVII LLC 0.679041%
THHU Technologietransfer ▇▇▇▇▇▇▇▇-▇▇▇▇▇-Universitat 0.517036%
GmbH
Gesellschaft von Freunden und Forderern an der 0.517036%
▇▇▇▇▇▇▇▇-▇▇▇▇▇-Universitat Dusseldorf e.V.
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 0.430864%
▇▇. ▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇ 0.430864%
100.000000%