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As filed with the Securities and Exchange Commission on April 3, 2013
Registration No. ____________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ASTERIAS BIOTHERAPEUTICS, INC.
(Exact name of Registrant as specified in charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
2836
(Primary Standard Industrial
Classification Code Number)
230 Constitution Drive
Menlo Park, California 94025
(650) 433-2900
(Address, including zip code,
and telephone number, including area code,
of Registrant’s principal executive offices)
46-1047971
(I.R.S. Employer
Identification Number)
PETER S. GARCIA, Chief Financial Officer
Asterias Biotherapeutics, Inc.
1301 Harbor Bay Parkway, Suite 100
Alameda, California 94504
(510) 521-3390
(Name, address, including zip code, and telephone
number,
including area code, of agent for service)
Copies of all communications, including all communications sent to the agent for service, should be sent to:
THOMAS OKARMA
Chief Executive Officer
Asterias Biotherapeutics, Inc.
230 Constitution Drive
Menlo Park, California 94025
RICHARD S. SOROKO, ESQ.
Thompson, Welch, Soroko & Gilbert LLP
235 Pine Street, 13th Floor
San Francisco, California 94104
Tel. (415) 448-5000
Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes
effective.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 of the
Securities Act of 1933 check the following box.
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the earlier effective registration statement for the same
offering.
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering.
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2
of the Securities Exchange Act of 1934. (Check one):
Large accelerated filer
Non-accelerated filer 
(Do not check if a smaller
reporting company)
CALCULATION OF REGISTRATION FEE
Accelerated filer
Smaller reporting company
Title of Each Class of Securities to be Registered
Series A Common Stock, par value $0.0001 per
share
Series B Common Stock, par value $0.0001 per
share
Warrants to Purchase Series B Common Stock
Series B Common Stock, par value $0.0001 per
share(2)
Series A Common Stock, par value $0.0001 per
share(3)
Total Registration Fee
Amount
to be
Registered
Proposed
Maximum
Offering
Price Per
Unit(1)
Proposed Maximum
Aggregate Offering
Price(1)
Amount of
Registration
Fee
6,537,779 $
2.34 $
15,298,402.86 $
2,086.70
23,909,340 $
3,500,000
2.34 $
--
55,947,855.60 $
--
7,631.29
--
3,500,000 $
5.00 $
17,500,000.00 $
2,387.00
27,409,340
--
-$
-12,104.99
(1) Estimated solely for the purpose of calculating the registration fee.
(2) Issuable upon the exercise of Warrants. An indeterminable number of additional shares of Series B common stock and Series A
common stock that may become issuable upon exercise of Warrants pursuant to the anti-dilution provisions of the Warrants are also
being registered.
(3) Issuable upon conversion of the Series B common stock into Series A common stock including also shares that may be issued upon
exercise of the Warrants.
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its Effective
Date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
The information in this prospectus is not complete and may be changed. We may not sell these securities until
the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is
not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the
offer or sale is not permitted.
Subject to Completion, Dated April 3, 2013
PROSPECTUS
ASTERIAS BIOTHERAPEUTICS, INC.
6,537,779 Shares of Series A Common Stock
23,909,340 Shares of Series B Common Stock
3,500,000 Warrants
3,500,000 Shares of Series B Common Shares Issuable Upon Exercise of Warrants
This prospectus relates to 6,537,779 shares of Series A common stock, par value $0.0001 per share (“Series A Shares”),
21,773,340 shares of Series B common stock, par value $0.0001 per share (“Series B Shares”), and warrants to purchase 3,150,000
Series B Shares that we plan to issue in exchange for certain assets under the terms of an Asset Contribution Agreement that we have
entered into with our parent BioTime, Inc. and Geron Corporation, and 2,136,000 Series B Shares and warrants to purchase 350,000
Series B Shares that we plan to issue to an unaffiliated investor for cash under a Stock and Warrant Purchase Agreement. This
prospectus also relates to the 3,500,000 Series B Shares that may be issued upon the exercise of the warrants. The warrants will expire
at 5:00 p.m. New York time on the three-year anniversary of the date on which the warrants are issued, and the warrants may not be
exercised after that date.
We plan to file an application to list the Series A Shares on a national securities exchange under the symbol ___. We do not
plan to list the Series B Shares or warrants on a national securities exchange in the immediate future, and we do not expect a public
market to develop for the Series B Shares or warrants in the immediate future. The Series B Shares are convertible into Series A
Shares at our election after the occurrence of certain events, and we expect that any Series A Shares issued upon conversion of the
Series B Shares would be listed on the same securities exchange if our listing application is approved. Upon the conversion of the
Series B Shares into Series A Shares, warrant holders would receive Series A Shares in lieu of Series B Shares upon the exercise of
the warrants.
These securities involve a high degree of risk and should be purchased only by persons who can afford the loss of
their entire investment. See ‘‘Risk Factors’’ on page 11.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved
of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
The date of this prospectus is ____________, 2013
[This Page Intentionally Left Blank]
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PROSPECTUS SUMMARY
Some of the statements in this prospectus contain forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended ( the
“Exchange Act”). These forward-looking statements reflect our current views with respect to future events or our financial
performance, and involve certain known and unknown risks, uncertainties and other factors, including those identified below, which
may cause our or our industry’s actual or future results, levels of activity, performance or achievements to differ materially from those
expressed or implied by any forward-looking statements or from historical results. We intend the forward-looking statements to be
covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E
of the Exchange Act. Forward-looking statements include information concerning our possible or assumed future results of operations
and statements preceded by, followed by, or that include the words “may,” “will,” “could,” “would,” “should,” “believe,” “expect,”
“plan,” “anticipate,” “intend,” “estimate,” “seeks,” “predict,” “potential” or similar expressions.
Forward-looking statements are inherently subject to risks and uncertainties, many of which we cannot predict with accuracy
and some of which we might not even anticipate. Although we believe that the expectations reflected in the forward-looking
statements are based upon reasonable assumptions at the time made, we can give no assurance that the expectations will be
achieved. Future events and actual results, financial and otherwise, may differ materially from the results discussed in the
forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements. We have no duty
to update or revise any forward-looking statements after the date of this prospectus or to conform them to actual results, new
information, future events or otherwise.
Asterias Biotherapeutics, Inc.
Overview
We are a biotechnology company focused on the emerging field of regenerative medicine. Our core technologies center on
stem cells capable of becoming all of the cell types in the human body, a property called pluripotency. We plan to develop therapeutic
products from “pluripotent” stem cells to treat diseases or injuries in a variety of medical fields, including neurology, oncology,
cardiology, metabolic diseases, ophthalmology, orthopedics, and blood and vascular diseases.
“Regenerative medicine” refers to an emerging field of therapeutic product development that may allow all human cell and
tissue types to be manufactured on an industrial scale. This new technology is made possible by the isolation of human embryonic
stem (“hES”) cells, and by the development of induced pluripotent stem (“iPS”) cells which are created from regular cells of the
human body using technology that allows adult cells to be “reprogrammed” into cells with pluripotency much like hES
cells. Pluripotent hES and iPS cells have the unique property of being able to branch out into each and every kind of cell in the human
body, including the cell types that make up the brain, the blood, the heart, the lungs, the liver, and other tissues. Unlike adult-derived
stem cells that have limited potential to become different cell types, pluripotent stem cells may have vast potential to supply an array
of new regenerative therapeutic products, especially those targeting the large and growing markets associated with age-related
degenerative disease. Unlike pharmaceuticals that require a molecular target, therapeutic strategies in regenerative medicine are
generally aimed at regenerating affected cells and tissues, and therefore may have broader applicability. Regenerative medicine
represents a revolution in the field of biotechnology with the promise of providing therapies for diseases previously considered
incurable.
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The Asset Contribution
We have entered into an Asset Contribution Agreement with BioTime and Geron pursuant to which we will receive certain
assets in exchange for Series A Shares that we will issue to Geron and Series B Shares and warrants that we will issue to BioTime (the
“Asset Contribution”). See “THE ASSET CONTRIBUTION AGREEMENT.” We have also entered into a Stock and Warrant
Purchase Agreement with an investor, Romulus Films, Ltd. (“Romulus”), through which we will receive cash in exchange for Series B
Shares and warrants. We will issue the Series A Shares, Series B Shares, and warrants included in this prospectus concurrently with
the consummation of the Asset Contribution. We will also assume certain liabilities of Geron related to the assets acquired from
Geron.
In the Asset Contribution, we will receive the following assets from Geron and BioTime:
From Geron:

certain patents and patent applications and all related active prosecution cases, trade secrets, know-how and certain
other intellectual property rights, and all of Geron’s goodwill with respect to the technology of Geron directly
related to the research, development and commercialization of certain products and know-how related to hES cells;

certain biological materials and reagents (including master and working cell banks, original and seed banks, and
research, pilot and GMP grade lots and finished product);

certain laboratory equipment;

certain contracts;

certain books, records, lab notebooks, clinical trial documentation, files and data;

certain regulatory filings for clinical trials for GRNOPC-I for spinal cord injury, including the investigational new
drug applications filed with the United States Food and Drug Administration for Geron’s Phase I safety study of
oligodendrocyte progenitor (GRNOPC-1) cells in patients with neurologically complete, subacute spinal cord injury
(Protocol No. CP35A007), and long term follow up of subjects who received GRNOPC1 (Protocol No. CP35A008),
and the clinical trial for VAC1 for acute myelogenous leukemia, including a Phase I/II study of active
immunotherapy with GRNVAC1, autologous mature dendritic cells transfected with mRNA encoding human
telomerase reverse transcriptase (hTERT), in patients with acute myelogenous leukemia (AML) in complete
remission (Protocol No. CP06-151) (the “Clinical Trials);” and

certain abandoned or inactive patents and abandoned or inactive patent applications.
We refer to the assets to be contributed to us by Geron as the “Contributed Geron Assets.” In addition, we will receive from
Geron an exclusive sublicense of certain patents owned by the University of Colorado; University License Equity Holdings, Inc.
relating to telomerase (the “Telomerase Sublicense”). The Telomerase Sublicense will entitle us to use the sublicensed patents in the
development of certain immunological treatments for cancer. Under the Telomerase Sublicense, we will pay Geron an up-front
license fee, a small annual license maintenance fee, and a small royalty on sales of any products that we may develop and
commercialize using the sublicensed patents.
4
From BioTime:

8,902,077 BioTime common shares, which for purposes of the Asset Contribution Agreement were valued at
$30,000,000, or $3.37 per share, based upon the aggregate volume weighted-average per share closing price of
BioTime common shares as listed on the NYSE MKT for the twenty (20) consecutive trading days immediately
preceding January 4, 2013 (the “Average Price”);

Warrants to subscribe for and purchase 8,000,000 additional BioTime common shares (the “BioTime Warrants”)
exercisable for a period of five years at a price of $5.00 per share, subject to pro rata adjustment for certain
transactions;

$5,000,000 in cash (the “BioTime Cash Contribution”);

10% of the shares of common stock of BioTime’s subsidiary OrthoCyte Corporation issued and outstanding as of
January 4, 2013;

6% of the ordinary shares of BioTime’s subsidiary Cell Cure Neurosciences, Ltd. issued and outstanding as of
January 4, 2013; and

a quantity of five human hES cell lines produced by BioTime’s subsidiary ES Cell International Pte Ltd (“ESI”)
under “good manufacturing practices” sufficient to generate master cell banks, and non-exclusive, world-wide,
royalty-free licenses to use those cell lines and certain patents pertaining to stem cell differentiation technology for
any and all uses (the “BioTime Stem Cell Assets”).
Cash Contribution by Private Investor
Romulus has entered into a Stock and Warrant Purchase Agreement with us pursuant to which Romulus has agreed to
contribute $5,000,000 in cash to us for 2,136,000 Series B Shares and warrants to purchase 350,000 additional Series B Shares. That
investment will be made in conjunction with the closing of the Asset Contribution under the Asset Contribution Agreement.
If for any reason Romulus fails to make the $5,000,000 contribution, BioTime will contribute cash, BioTime common
shares, or a combination of cash and BioTime common shares in an amount equal in value to the cash not contributed by
Romulus. Any BioTime common shares so contributed will be valued at the Average Price of $3.37 per share, and BioTime will
receive the Series B Shares and warrants that Romulus would otherwise have received had it made the cash contribution to us.
Assumed Liabilities
At the closing of the Asset Contribution, we will assume all obligations and liabilities of Geron and its affiliates relating to:

the Contributed Geron Assets and attributable to periods, events or circumstances after the Asset Contribution;
5

obligations of Geron and its affiliates to be performed following the Asset Contribution, under contracts included in
the Contributed Geron Assets;

an appeal filed in the United States District Court in Civil Action No. C12-04813 (the “ViaCyte Appeal”) seeking
the reversal of two adverse determinations by the United States Patent and Trademark Office’s Board of Patent
Appeals and Interferences with respect to two patent applications in U.S. Patent Interference 105,734, involving US
patent 7,510,876 (ViaCyte) and US patent application 11/960,477 (Geron), and U.S. Patent Interference 105,827
involving US patent 7,510,876 (ViaCyte) and US patent application 12/543,875 (Geron). Asterias will also assume
the patent interferences upon which the ViaCyte Appeal is based, as well as certain oppositions filed by Geron
against certain ViaCyte, Inc. patent filings in Australia and in the European Patent Office; provided, that Asterias
will not assume expenses incurred by Geron relating to the appeal or the other ViaCyte patent interference and
opposition proceedings prior to the closing of the Asset Contribution; and

the Clinical Trials.
We refer to the obligations of Geron and its affiliates assumed by us as the “Assumed Geron Liabilities.”
Royalty Agreement
At the closing of the Asset Contribution, we will enter into a Royalty Agreement with Geron pursuant to which we will
agree to pay Geron a 4% royalty on net sales (as defined in the Royalty Agreement), by us or any of our affiliates or sales agents, of
any products that are developed and commercialized in reliance upon the patents contributed by Geron to us. In the case of sales of
such products by a person other than us or one of our affiliates or sales agents, we will be required to pay Geron 50% of all royalties
and cash payments received by us or by our affiliate in respect of a product sale.
Ownership of Asterias following the Asset Contribution
At the closing of the Asset Contribution, we will issue to Geron, BioTime, and Romulus the following securities:

To Geron, 6,537,779 Series A Shares;

To BioTime, 21,773,340 Series B Shares, and warrants to purchase 3,150,000 Series B Shares, exercisable for a
period of three years from the date of issue at an exercise price of $5.00 per share; and

To Romulus, 2,136,000 Asterias Series B Shares, and warrants to purchase 350,000 additional Series B Shares
exercisable for a period of three years from the date of issue at an exercise price of $5.00 per share.
Immediately after the completion of the Asset Contribution, and before the Series A Distribution described below, BioTime
will hold approximately 71.6% of our common stock as a whole, Geron will hold 100% of the Series A Shares and approximately
21.4% of our common stock as a whole, and Romulus will hold approximately 7% of our common stock as a whole. The warrants
that BioTime and Romulus will receive will enable BioTime and Romulus to increase their collective ownership in us by
approximately 2.2%, which would reduce Geron’s ownership in us to approximately 19.2%.
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The Series A Distribution
In the Asset Contribution Agreement, Geron has agreed to distribute to its stockholders, on a pro rata basis, the Series A
Shares it receives in the Asset Contribution (the “Series A Distribution”). Geron is required to make the Series A Distribution as soon
as practicable following the closing of the Asset Contribution, subject to applicable legal requirements and certain other
limitations. Under the Asset Contribution Agreement, fractional shares will not be distributed in the Series A Distribution, and instead
will be aggregated and sold by Geron and the proceeds of the sale will be distributed by Geron ratably to its stockholders who would
otherwise be entitled to receive fractional shares. Also, in lieu of distributing the Series A Shares in jurisdictions where it would be
unlawful to do so, and in certain other to-be-determined excluded jurisdictions, Geron will sell the Series A Shares that its
stockholders who reside in those jurisdictions would otherwise be entitled to receive, and Geron will distribute the cash proceeds
ratably to those stockholders. See “PLAN OF DISTRIBUTION.”
The BioTime Warrants Distribution
Following the Series A Distribution, we will distribute to the holders of the Series A Shares, on a pro rata basis, the
8,000,000 BioTime Warrants that we receive in the Asset Contribution. We refer to this distribution of the BioTime Warrants as the
“BioTime Warrants Distribution.” As a result of the BioTime Warrants Distribution, we will not derive any future economic value
from the BioTime Warrants and instead the value of the BioTime Warrants will benefit the holders of Series A Shares who receive the
BioTime Warrants.
Our Strategic Advantages
By acquiring Geron’s stem cell assets, we will have the use of cell lines and other biological materials, patents, and
technology developed by Geron over 12 years of work focused in the following complementary lines of research:

The establishment of cell banks of undifferentiated hES cells produced under current good manufacturing
procedures “cGMP” and suitable for human therapeutic use;

The development of scalable differentiation methods which convert, at low cost, undifferentiated hES cells into
functional cells suitable for human therapeutic cells that can be stored and distributed in the frozen state for
“off-the-shelf” use;

The development of regulatory paradigms to satisfy both U.S. and European regulatory authority requirements to
begin human clinical testing of products made from hES cells; and

The continuous filing and prosecution of patents covering inventions to protect commercialization rights, as well as
consummating in-licenses to enable freedom to operate in a variety of fields.
Products Under Development
Through the Asset Contribution, we will acquire a significant portfolio of patents and patent applications, cell lines, and hES
cell technology and know-how related to potential therapeutic products in various stages of development. Two of the products under
development have already been used in early stage clinical trials. See “BUSINESS—Potential Products Overview” in this prospectus
for a description of the various products and the stages of development that they are in.
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The products that Geron had under development from various cell types that we will acquire from Geron are summarized in
the following table:
Product Description
Target Market
Estimated Number
of Potential Patients
Status
OPC1 – Glial Cells
Spinal Cord Injury
25,000 patients
SCI Phase 1 Trial initiated in U.S.
5 Patients treated – no adverse events to-date
CM-1 Cardiomyocytes
Multiple Sclerosis,
Canavan’s Disease, and
Stroke
Proof of principle achieved in animal models of
spinal cord injury, MS spine and Canavan’s
Disease
Heart Failure, Myocardial
Infarction
Cells derived and fully characterized.
Proof of concept in three animal models of
disease.
Scalable manufacturing established.
First in man clinical trial designed.
IC-1 – Islet Cells
Type 1 and some Type 2 12.5 million patients
Diabetes
Cells derived and partly characterized.
Proof of concept in rodent diabetes model.
Scalable manufacturing methods under
development.
CHND-1 – Chondrocytes Osteoarthritis
30 million patients
Cells derived and partly characterized.
Early proof of concept in two animal models of
disease.
VAC-2 – Dendritic Cells Cancer Infectious and
Autoimmune Diseases
Large patient population
Cells derived and fully characterized.
Scalable manufacturing methods under
development.
Proof of concept established in multiple human in
vitro systems.
VAC-1 Autologous
Monocyte – Derived
Dendritic Cells
Cancer
Prostate: 240,000
cases/year in U.S.
AML: > 12,000
cases/year in U.S.
Phase I study in metastatic prostate cancer
completed ( Journal of Immunology , 2005, 174:
3798-3807).
Phase I/II study in AML completed. Manuscript
in preparation.
We have not yet determined which products we will seek to develop or the order of priority in which we will commence our
product development efforts. The choice and prioritization of products for development from the acquired assets, and the cost and
developmental time required to develop any of them, is not presently determinable due to many factors including the following:

the functional state of the transferred cells, cell lines and other biological reagents cannot be determined until they
are transferred to us upon completion of the Asset Contribution and are then tested in an appropriate laboratory
setting by qualified scientific personnel using validated equipment, which may not be completed for three to six
months after the Asset Contribution;
8

we will need to complete an analysis of third party competitive and alternative technology that, for example, may
provide superior methods of manufacturing the cell types listed above. Alternative technology, if it exists, may or
may not be available for in-licensing, and could potentially affect our choice of products to develop;

we and BioTime will need to complete an analysis of products and technologies being developed by BioTime and its
subsidiaries to determine whether any of those products or technologies may enhance or be substituted for any of the
acquired Geron cell lines or technologies;

the inherent uncertainty of laboratory research and any clinical trials that we may conduct;

the amount of capital that we will have for our development programs, including potential sources of additional
capital through research grants or collaborations with third parties;

the availability and recruitment of qualified personnel to carry out the analyses and evaluations described above;

the views of the United States Food and Drug Administration (FDA) and comparable foreign regulatory agencies on
the pre-clinical product characterization studies required to file an Investigational New Drug Application (IND) in
order to initiate human clinical testing of potential therapeutic products.
We may also use the acquired assets, along with technology that we may develop ourselves or that we may acquire from
third parties to pursue the development of other products. Our product development efforts may be conducted by ourselves alone or in
collaboration with others if suitable co-development arrangements can be made.
Patents and Patent Applications
The patent portfolio that we will acquire includes over 400 patents and patent applications relating to hES cell-based product
opportunities. This portfolio consists primarily of patents and patent applications owned by Geron, and also includes patent families
licensed to Geron by third parties. The patents and patent applications cover a number of cell types that can be made from hES cells,
including hepatocytes (liver cells), cardiomyocytes (heart muscle cells), neural cells (nerve cells, including dopaminergic neurons and
oligodendrocytes), chondrocytes (cartilage cells), pancreatic islet ß cells, osteoblasts (bone cells), hematopoietic cells (blood-forming
cells) and dendritic cells. Also included in the patent portfolio are technologies for growing hES cells without the need for cell feeder
layers, and novel synthetic growth surfaces.
We believe that this is one of the largest and broadest portfolios of patents related to hES and iPS technology owned by any
company or other institution. In addition, as a subsidiary of BioTime, we will have opportunities to acquire licenses to use patents,
patent applications and know-how in the hES and iPS fields owned by or licensed to BioTime and its other subsidiaries. BioTime and
its subsidiaries own or have licensed rights to more than 350 patents in the hES and iPS fields. Except for licenses described in this
prospectus, the specific patents that we may license or sublicense from BioTime and its other subsidiaries, and the financial and other
terms and conditions of those licenses and sublicenses, have not yet been determined.
9
Additional Information
We were incorporated in September 2012 under the name BioTime Acquisition Corporation in the state of Delaware. We
changed our name to Asterias Biotherapeutics, Inc. during March 2013. Our principal executive offices are located at 230
Constitution Drive, Menlo Park, California 94025. Our telephone number is 650-433-2900. We will maintain an Internet website at
wwwasteriasbio.com . We have not incorporated by reference into this prospectus the information in, or that can be accessed through,
our website, and you should not consider it to be a part of this prospectus.
Offering Summary
Series A Shares Offered
6,537,779 Series A Shares are being offered by us to Geron in exchange for the Contributed
Geron Assets. The Series A Shares will be distributed by Geron to its stockholders in the Series
A Distribution.
Series B Shares Offered
21,773,340 Series B Shares are being offered to BioTime in exchange for certain assets under
the Asset Contribution Agreement, and 2,136,000 Series B Shares are being offered to Romulus
for cash under a Stock and Warrant Purchase Agreement.
Warrants Offered
3,150,000 warrants to purchase Series B Shares are being offered to BioTime in exchange for
assets under the Asset Contribution Agreement, and 350,000 warrants to purchase Series B
Shares are being offered to Romulus for cash under a Stock and Warrant Purchase Agreement.
The warrants will be issued upon the consummation of the Asset Contribution. Each
warrant entitles the holder to purchase one Series B Share at a price of $5.00 per share. The
warrants will expire three years from the date of issue and may not be exercised after that
date. The number of shares issuable upon the exercise of the warrants and the exercise price
per share will be proportionally adjusted in the event of a stock split, stock dividend,
combination, or recapitalization of the Series B Shares or other transaction. Also, if the
outstanding Series B Shares are converted into Series A Shares, the warrants will become
exercisable for the number of Series A Shares into which the Series B Shares issuable upon
the exercise of the warrants would have been converted had those Series B Shares been
issued and outstanding on the date of conversion, subject as well to adjustment in the event
of a stock split, stock dividend, combination, or recapitalization of the Series A common
stock or as a result of certain other transactions. See “DESCRIPTION OF
SECURITIES—Warrants.”
Common Stock Outstanding
51,700 Series B Shares as of March 12, 2013.
10
SUMMARY FINANCIAL DATA
The following table summarizes the relevant financial data for our business and should be read with our financial statements,
which are included in this prospectus. We have not had any significant operations to date. Operating expenses are primarily
comprised of legal fees primarily incurred in connection with the Asset Contribution Agreement. The “as adjusted” information gives
effect to the Asset Contribution and the BioTime Warrants Distribution:
December 31, 2012
Actual
As Adjusted
Balance Sheet Data:
Cash and cash equivalents
Investment
Intangible assets
Total assets
Total liabilities
Stockholders’ equity
$
$
1,410
4,011
761,164
(757,153)
$
$
10,000,000
34,007,344
31,265,958
75,275,903
826,164
74,499,739
RISK FACTORS
An investment in our shares and warrants involves a high degree of risk. You should consider the following risk factors,
together with the risks, uncertainties and assumptions discussed elsewhere in this prospectus. There may be other factors that are not
mentioned here or of which we are not presently aware that could also affect our business operations and prospects.
Risks Related to Our Business Operations
We are a newly organized, development stage company in the start-up phase, and we have not yet commenced our primary
product development programs
We were incorporated on September 24, 2012 for the purpose of acquiring hES and iPS technology and related assets. On
January 4, 2013, we entered into the Asset Contribution Agreement with BioTime and Geron pursuant to which we will acquire
certain assets, including the patent portfolio built by Geron in its stem cell programs prior to Geron’s discontinuation of those
programs during November 2011. Our initial product development programs will be based on the results of some of Geron’s
discontinued programs, though we may make changes to the scope and focus of the programs that we conduct. However, we will not
be able to commence work on those programs until the consummation of the Asset Contribution, which is expected to occur on or
shortly after the date of this prospectus.
Failure to attract and retain skilled personnel and key relationships could impair our research and drug development efforts
Our operations are still in the start-up stage and we have only 10 employees, some of whom are working for us on a
part-time basis and will become full-time employees upon the closing of the Asset Contribution. We will need to recruit and hire
additional qualified research scientists, laboratory technicians, clinical development, and management personnel promptly after the
Asset Contribution. Competition for these types of personnel is intense and we may experience delays in hiring the qualified people
that we need. The inability to attract and retain sufficient qualified management, scientific, or technical personnel may significantly
delay or prevent the achievement of our drug development and other business objectives and could have a material adverse effect on
our business, operating results and financial condition. We will initially rely on BioTime to provide financial accounting management
and personnel, and to assist us in formulating our research and development strategy and executing our product development
plans. We will also rely on consultants and advisors who are either self-employed or employed by other organizations, and they may
have conflicts of interest or other commitments, such as consulting or advisory contracts with other organizations, that may affect their
ability to perform services for us.
11
Because our choice and prioritization of products for development from the Contributed Geron Assets, and the cost and
developmental time required to develop any of them, is not presently determinable, investors will not be able to evaluate our
initial product development programs.
We have not yet determined which products we will seek to develop or the order of priority in which we will commence our
product development efforts, due to many factors including the following:

the functional state of the transferred cells, cell lines and other biological reagents cannot be determined until they
are transferred to us upon completion of the Asset Contribution and are then tested in an appropriate laboratory
setting by qualified scientific personnel using validated equipment, which may not be completed for three to six
months after the Asset Contribution;

we will need to complete an analysis of third party competitive and alternative technology that, for example, may
provide superior methods of manufacturing the cell types listed above. Alternative technology, if it exists, may or
may not be available for in-licensing, and could potentially affect our choice of products to develop;

we and BioTime will need to complete an analysis of products and technologies being developed by BioTime and its
other subsidiaries to determine whether any of those products or technologies may enhance or be substituted for any
of the acquired Geron cell lines or technologies;

the inherent uncertainty of laboratory research and any clinical trials that we may conduct;

the amount of capital that we will have for our development programs, including potential sources of additional
capital through research grants or collaborations with third parties;

the availability and recruitment of qualified personnel to carry out the analyses and evaluations described above;

the views of the United States Food and Drug Administration (FDA) and comparable foreign regulatory agencies on
the pre-clinical product characterization studies required to file an Investigational New Drug Application (IND) in
order to initiate human clinical testing of potential therapeutic products.
12
We will spend a substantial amount of our capital on research and development but we might not succeed in developing
products and technologies that are useful in medicine

The product development work we plan to do is costly, time consuming and uncertain as to its results.

We will attempt to develop new medical products and technologies that might not prove to be safe and efficacious in
human medical applications. Many of the products and technologies that we seek to develop have not been applied in
human medicine and have only been used in laboratory studies in vitro or in animals. Only two of the products that
we will acquire have been used in clinical trials, but those were early stage trials involving only a small number of
patients.

If we are successful in developing a new technology or product, refinement of the new technology or product and
definition of the practical applications and limitations of the technology or product may take years and require the
expenditure of large sums of money.
The amount and pace of research and development work that we can do or sponsor, and our ability to commence and
complete clinical trials required to obtain FDA and foreign regulatory approval of our pharmaceutical products, depends
upon the amount of money available to us.

We may have to limit our laboratory research and development work based on the amount of our cash resources.

Although we expect to receive $5 million in cash from Romulus and $5 million in cash from BioTime and 8,902,077
BioTime common shares that we may sell from time to time to raise funds for our operations, there can be no assurance
that we will be able to raise additional funds on favorable terms or at all, or that any funds raised will be sufficient to
permit us to develop and market our products and technology. Unless we are able to generate sufficient revenue or raise
additional funds when needed, it is likely that we will be unable to continue our planned activities, even if we make
progress in our research and development projects.
We might need to issue additional equity or debt securities in order to raise additional capital needed to pay our operating
expenses

We plan to incur substantial research and product development expenses, and we will need to raise additional capital to
pay operating expenses until we are able to generate sufficient revenues from product sales, royalties, and license fees.

It is likely that additional sales of equity or debt securities will be required in the future to meet our short-term capital
needs, unless we receive substantial research grants and revenues from the sale of products or we are successful in
licensing or sublicensing the technology that we develop or acquire from Geron or others and we receive substantial
licensing fees and royalties.
13

Sales of additional equity securities could result in the dilution of the interests of present shareholders.
The condition of the cells, cell lines and other biological materials that we will acquire from Geron could impact the time and
cost of commencing our research and product development programs, but the condition of those materials cannot be evaluated
prior to completion of the Asset Contribution
The cells, cell lines and other biological materials that we will acquire are being stored under cryopreservation protocols
intended to preserve their functionality. However, the functional condition of those materials cannot be certified until they are
transferred to us upon completion of the Asset Contribution and are then tested in an appropriate laboratory setting by qualified
scientific personnel using validated equipment, which may not be completed for at least three to six months after the Asset
Contribution.
To the extent that cells are not sufficiently functional for our purposes, we would need to incur the time and expense of
regenerating cell lines from cell banks, or regenerating cell banks from feeder cells, which could delay and increase the cost of our
research and development work.
Sales of the products we may develop may be adversely impacted by the availability of competing products

In order to compete with other products, particularly those that sell at lower prices, our products will have to provide
medically significant advantages.

Physicians and hospitals may be reluctant to try a new product due to the high degree of risk associated with the
application of new technologies and products in the field of human medicine.

There also is a risk that our competitors may succeed at developing safer or more effective products that could render our
products and technologies obsolete or noncompetitive.
If we fail to enter into and maintain successful strategic alliances for our therapeutic product candidates, we may have to
reduce or delay our product development or increase our expenditures
An important element of our strategy for developing, manufacturing and commercializing our therapeutic product candidates
will be entering into strategic alliances with pharmaceutical companies or other industry participants to advance our programs and
enable us to maintain our financial and operational capacity. We will face significant competition in seeking appropriate
alliances. We may not be able to negotiate alliances on acceptable terms, if at all. If we fail to create and maintain suitable alliances,
we may have to limit the size or scope of, or delay, one or more of our product development or research programs, or we will have to
increase our expenditures and will need to obtain additional funding, which may be unavailable or available only on unfavorable
terms.
If we are able to enter into product development and marketing arrangements with pharmaceutical companies, we may
license product development, manufacturing, and marketing rights to the pharmaceutical company or to a joint venture company
formed with the pharmaceutical company. Under such arrangements we might receive only a royalty on sales of the products
developed or an equity interest in a joint venture company that develops the product. As a result, our revenues from the sale of those
products may be substantially less than the amount of revenues and gross profits that we might receive if we were to develop,
manufacture, and market the products ourselves.
14
Our products may be difficult and expensive to manufacture on a commercial scale

hES cells have only been produced on a small scale and not in quantities and at levels of purity and viability that will be
needed for wide scale commercialization. If we are successful in developing products that consist of hES cells or other
cells or products derived from hES or other cells, we will need to develop, alone or in collaboration with one or more
pharmaceutical companies or contract manufacturers, technology for the commercial production of those products.

Our hES cell or other cell based products are likely to be more expensive to manufacture on a commercial scale than
most other drugs on the market today. The high cost of manufacturing a product will require that we charge our
customers a high price for the product in order to cover our costs and earn a profit. If the price of our products is too
high, hospitals and physicians may be reluctant to purchase our products, especially if lower priced alternative products
are available, and we may not be able to sell our products in sufficient volumes to recover our costs of development and
manufacture or to earn a profit.
We do not have our own marketing, distribution, and sales resources for the commercialization of any products that we might
successfully develop

If we are successful in developing marketable products, we will need to build our own marketing, distribution, and sales
capability for our products, which would require the investment of significant financial and management resources, or
we will need to find collaborative marketing partners, independent sales representatives, or wholesale distributors for the
commercial sale of our products.

If we market products through arrangements with third parties, we may pay sales commissions to sales representatives or
we may sell or consign products to distributors at wholesale prices. As a result, our gross profit from product sales may
be lower than it would be if we were to sell our products directly to end users at retail prices through our own sales force.

There can be no assurance that we will able to negotiate distribution or sales agreements with third parties on favorable
terms to justify our investment in our products or achieve sufficient revenues to support our operations.
We do not have the ability to independently conduct clinical trials required to obtain regulatory approvals for our drug
candidates
We will need to rely on third parties, such as contract research organizations, data management companies, contract clinical
research associates, medical institutions, clinical investigators and contract laboratories to conduct any clinical trials that we may
undertake for our products. We may also rely on third parties to assist with our preclinical development of drug candidates. If we
outsource clinical trials we may be unable to directly control the timing, conduct and expense of our clinical trials. If we enlist third
parties to conduct clinical trials and they fail to successfully carry out their contractual duties or regulatory obligations or fail to meet
expected deadlines, if the third parties need to be replaced or if the quality or accuracy of the data they obtain is compromised due to
the failure to adhere to clinical protocols or regulatory requirements or for other reasons, our preclinical development activities or
clinical trials may be extended, delayed, suspended or terminated, and we may not be able to obtain regulatory approval for or
successfully commercialize our drug candidates.
15
We will assume certain obligations and potential liabilities with regard to clinical trials conducted by Geron
Under the Asset Contribution Agreement, we will assume Geron’s obligations to obtain information and prepare reports
about the health of patients who participated in clinical trials of Geron’s GRNOPC1 cell replacement therapy for spinal cord damage
and its GRNVAC1 immunological therapy for certain cancers. Although the future cost of patient health information gathering and
reporting is not presently determinable, we do not expect that the cost will be material to our financial condition.
We will also assume any liabilities to those patients that might arise as result of any injuries they may have incurred as a
result of their participation in the clinical trials. We are not aware of any claims by patients alleging injuries suffered as a result of the
Geron clinical trials, but if any claims are made and if liability can be established, the amount of any liability that we may incur,
depending upon the nature and extent of any provable injuries incurred, could exceed any insurance coverage we may obtain and the
amount of the liability could be material to our financial condition.
Our business could be adversely affected if we lose the services of the key personnel upon whom we depend
Our stem cell research program will be directed primarily by our Chief Executive Officer Dr. Thomas Okarma and by our
President of Research and Development, Dr. Jane S. Lebkowski. The loss of the services of Dr. Okarma or Dr. Lebkowski could have
a material adverse effect on us.
Our business and operations could suffer in the event of system failures
Despite the implementation of security measures, our internal computer systems and those of our contractors and consultants
are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and
electrical failures. Such events could cause interruption of our operations. For example, the loss of data for our product candidates
could result in delays in our regulatory filings and development efforts and significantly increase our costs. To the extent that any
disruption or security breach was to result in a loss of or damage to our data, or inappropriate disclosure of confidential or proprietary
information, we could incur liability and the development of our product candidates could be delayed.
Failure of our internal control over financial reporting could harm our business and financial results
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal
control over financial reporting is a process to provide reasonable assurance regarding the reliability of financial reporting for external
purposes in accordance with accounting principles generally accepted in the U.S. Internal control over financial reporting includes
maintaining records that in reasonable detail accurately and fairly reflect our transactions; providing reasonable assurance that
transactions are recorded as necessary for preparation of our financial statements; providing reasonable assurance that receipts and
expenditures of our assets are made in accordance with management authorization; and providing reasonable assurance that
unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements would be
prevented or detected on a timely basis. Because of its inherent limitations, internal control over financial reporting is not intended to
provide absolute assurance that a misstatement of our financial statements would be prevented or detected. Our growth and entry into
new products, technologies and markets will place significant additional pressure on our system of internal control over financial
reporting. Any failure to maintain an effective system of internal control over financial reporting could limit our ability to report our
financial results accurately and timely or to detect and prevent fraud.
16
We will initially rely in part on financial systems maintained by BioTime and upon services provided by BioTime
personnel. BioTime will allocate certain expenses among itself, us, and BioTime’s other subsidiaries, which creates a risk that the
allocations may not accurately reflect the benefit of an expenditure or use of financial or other recourses by us, BioTime as our parent
company, and the BioTime subsidiaries among which the allocations are made.
Risks Related to Our Industry
We will face certain risks arising from regulatory, legal, and economic factors that affect our business and the business of
other pharmaceutical development companies. Because we are a small company with limited revenues and limited capital resources,
we may be less able to bear the financial impact of these risks than larger companies that have substantial income and available
capital.
If we do not receive FDA and other regulatory approvals we will not be permitted to sell our pharmaceutical products
The pharmaceutical products that we develop cannot be sold until the FDA and corresponding foreign regulatory authorities
approve the products for medical use. To date, long-term safety and efficacy has not been demonstrated in clinical trials for any of our
drug candidates. The need to obtain regulatory approval to market a new product means that:

we will have to conduct expensive and time consuming clinical trials of new products. The full cost of conducting
and completing clinical trials necessary to obtain FDA and foreign regulatory approval of a new product cannot be
presently determined, but could exceed our current financial resources.

clinical trials and the regulatory approval process for a pharmaceutical product can take several years to
complete. As a result, we will incur the expense and delay inherent in seeking FDA and foreign regulatory approval
of new products, even if the results of clinical trials are favorable.

data obtained from preclinical and clinical studies is susceptible to varying interpretations that could delay, limit, or
prevent regulatory agency approvals. Delays in the regulatory approval process or rejections of an application for
approval of a new drug may be encountered as a result of changes in regulatory agency policy.

because the therapeutic products we plan to develop with hES and iPS technology involve the application of new
technologies and approaches to medicine, the FDA or foreign regulatory agencies may subject those products to
additional or more stringent review than drugs or biologicals derived from other technologies.

a product that is approved may be subject to restrictions on use.

the FDA can recall or withdraw approval of a product if problems arise.

we will face similar regulatory issues in foreign countries.
17
Clinical trial failures can occur at any stage of the testing and we may experience numerous unforeseen events during, or as a
result of, the clinical trial process that could delay or prevent commercialization of our current or future drug candidates
Clinical trial failures or delays can occur at any stage of the trials, and may be directly or indirectly caused by a variety of
factors, including but not limited to:

delays in securing clinical investigators or trial sites for our clinical trials;

delays in obtaining Institutional Review Board (“IRB”) and other regulatory approvals to commence a clinical trial;

slower than anticipated rates of patient recruitment and enrollment, or failing to reach the targeted number of
patients due to competition for patients from other trials;

limited or no availability of coverage, reimbursement and adequate payment from health maintenance organizations
and other third party payors for the use of agents used in our clinical trials;

negative or inconclusive results from clinical trials;

unforeseen side effects interrupting, delaying, or halting clinical trials of our drug candidates, and possibly resulting
in the FDA or other regulatory authorities denying approval of our drug candidates;

unforeseen safety issues;

uncertain dosing issues;

approval and introduction of new therapies or changes in standards of practice or regulatory guidance that render our
clinical trial endpoints or the targeting of our proposed indications obsolete;

inability to monitor patients adequately during or after treatment or problems with investigator or patient compliance
with the trial protocols;

inability to replicate in large controlled studies safety and efficacy data obtained from a limited number of patients
in uncontrolled trials;

inability or unwillingness of medical investigators to follow our clinical protocols; and

unavailability of clinical trial supplies.
18
Government imposed bans or restrictions, and religious, moral and ethical concerns on the use of hES cells could prevent us
from developing and successfully marketing stem cell products

Government imposed bans or restrictions on the use of embryos or hES cells research and development in the
United States and abroad could generally constrain stem cell research thereby limiting the market and demand for
our products. During March 2009, President Obama lifted certain restrictions on federal funding of research
involving the use of hES cells, and in accordance with President Obama’s executive order, the National Institutes of
Health has adopted new guidelines for determining the eligibility of hES cell lines for use in federally funded
research. The central focus of the proposed guidelines is to assure that hES cells used in federally funded research
were derived from human embryos that were created for reproductive purposes, were no longer needed for this
purpose, and were voluntarily donated for research purposes with the informed written consent of the donors. hES
cells that were derived from embryos created for research purposes rather than reproductive purposes, and other hES
cells that were not derived in compliance with the guidelines, are not eligible for use in federally funded research.

California law requires that stem cell research be conducted under the oversight of a stem cell research oversight
(SCRO) committee. Many kinds of stem cell research, including the derivation of new hES cell lines, may only be
conducted in California with the prior written approval the SCRO. A SCRO could prohibit or impose restrictions on
the research we plan to do.

The use of hES cells gives rise to religious, moral and ethical issues regarding the appropriate means of obtaining
the cells and the appropriate use and disposal of the cells. These considerations could lead to more restrictive
government regulations or could generally constrain stem cell research thereby limiting the market and demand for
our products.
If we are unable to obtain and enforce patents and to protect our trade secrets, others could use our technology to compete
with us, which could limit opportunities for us to generate revenues by licensing our technology and selling products

Our success will depend in part on our ability to obtain and enforce patents and maintain trade secrets in the United
States and in other countries. If we are unsuccessful in obtaining and enforcing patents, our competitors could use
our technology and create products that compete with our products, without paying license fees or royalties to us.

The preparation, filing, and prosecution of patent applications can be costly and time consuming. Our limited
financial resources may not permit us to pursue patent protection of all of our technology and products throughout
the world.

Even if we are able to obtain issued patents covering our technology or products, we may have to incur substantial
legal fees and other expenses to enforce our patent rights in order to protect our technology and products from
infringing uses. We may not have the financial resources to finance the litigation required to preserve our patent and
trade secret rights.
19
There is no certainty that our pending or future patent applications will result in the issuance of patents

In the Asset Contribution we will acquire patent applications for technology that Geron developed, and we will
obtain licenses for a number of patent applications covering technology developed by others that we believe will be
useful in producing new products, and which we believe may be of commercial interest to other companies that may
be willing to sublicense the technology for fees or royalty payments. We may also file new patent applications in
the future seeking patent protection for new technology or products that we develop ourselves or jointly with
others. However, there is no assurance that any of the patent applications that we acquire or any licensed patent
applications or any future patent applications that we may file in the United States or abroad will result in the
issuance of patents.

In Europe, the European Patent Convention prohibits the granting of European patents for inventions that concern
"uses of human embryos for industrial or commercial purposes." The European Patent Office is presently
interpreting this prohibition broadly, and is applying it to reject patent claims that pertain to human embryonic stem
cells. However, this broad interpretation is being challenged through the European Patent Office appeals
system. As a result, we do not yet know whether or to what extent we will be able to obtain patent protection for our
human embryonic stem cell technologies in Europe.

The recent Supreme Court decision in Mayo Collaborative Services v. Prometheus Laboratories, Inc., will need to
be considered if we attempt to develop diagnostic methods, since the Court denied patent protection for the use of a
mathematical correlation of the presence of a well-known naturally occurring metabolite as a means of determining
proper drug dosage.
The process of applying for and obtaining patents can be expensive and slow

The preparation and filing of patent applications, and the maintenance of patents that are issued, may require
substantial time and money.

A patent interference proceeding may be instituted with the U.S. Patent and Trademark Office (the “PTO”) when
more than one person files a patent application covering the same technology, or if someone wishes to challenge the
validity of an issued patent. At the completion of the interference proceeding, the PTO will determine which
competing applicant is entitled to the patent, or whether an issued patent is valid. Patent interference proceedings
are complex, highly contested legal proceedings, and the PTO’s decision is subject to appeal. This means that if an
interference proceeding arises with respect to any of our patent applications, we may experience significant
expenses and delay in obtaining a patent, if the outcome of the proceeding is unfavorable to us, the patent could be
issued to a competitor rather than to us.

A derivation proceeding may be instituted by the PTO or an inventor alleging that a patent or application was
derived from the work of another inventor.

Post Grant Review under the new America Invents Act will make available opposition-like proceedings in the
United States. As with the PTO interference proceedings, Post Grant Review proceedings will be very expensive to
contest and can result in significant delays in obtaining patent protection or can result in a denial of a patent
application.
20

Oppositions to the issuance of patents may be filed under European patent law and the patent laws of certain other
countries. As with the PTO interference proceedings, these foreign proceedings can be very expensive to contest
and can result in significant delays in obtaining a patent or can result in a denial of a patent application.
We will assume Geron’s appeal of two adverse patent rulings, and if the appeal is not successful, we may not realize value
from the Geron patent applications at issue in the appeal and might be precluded from developing therapies to treat certain
diseases, such as diabetes.
At the closing of the Asset Contribution, we will be substituted for Geron as a party in interest in an appeal filed by Geron in
the United States District Court for the Northern District of California on September 13, 2012, appealing two adverse rulings in favor
of ViaCyte, Inc. by the United States Patent and Trademark Office’s Board of Patent Appeals and Interferences. These rulings related
to interference proceedings involving patent filings relating to definitive endoderm cells. Geron had requested that the Board of Patent
Appeals and Interferences declare this interference after ViaCyte was granted patent claims that conflicted with subject matter Geron
filed in a patent application having an earlier priority date. Those Geron patent applications are among the patent assets that Geron
will contribute to us. We will assume all liabilities relating to the ViaCyte Appeal and the related interference proceedings, including
the costs of litigation, other than expenses incurred by Geron prior to the closing of the Asset Contribution. Appeals of this nature
may involve costly and time-consuming legal proceedings and if we are not successful in the appeal, these rulings may prevent or
limit development of product candidates in certain fields such as diabetes treatment, and we may be unable to realize value from the
patent applications at issue in the appeal.
We may be subject to patent infringement claims that could be costly to defend, which may limit our ability to use disputed
technologies, and which could prevent us from pursuing research and development or commercialization of some of our
products, require us to pay licensing fees to have freedom to operate and/or result in monetary damages or other liability for
us
The success of our business will depend significantly on our ability to operate without infringing patents and other
proprietary rights of others. If the technology that we use infringes a patent held by others, we could be sued for monetary damages
by the patent holder or its licensee, or we could be prevented from continuing research, development, and commercialization of
products that rely on that technology, unless we are able to obtain a license to use the patent. The cost and availability of a license to a
patent cannot be predicted, and the likelihood of obtaining a license at an acceptable cost would be lower if the patent holder or any of
its licensees is using the patent to develop or market a product with which our product would compete. If we could not obtain a
necessary license, we would need to develop or obtain rights to alternative technologies, which could prove costly and could cause
delays in product development, or we could be forced to discontinue the development or marketing of any products that were
developed using the technology covered by the patent.
Our patents may not protect our products from competition
Through the Asset Contribution, we will acquire patents and patent applications filed in the United States, Canada, the
European Union countries, and in other foreign countries for a variety of hES and iPS technologies.

We might not be able to obtain any additional patents, and any patents that we do obtain might not be
comprehensive enough to provide us with meaningful patent protection.
21

There will always be a risk that our competitors might be able to successfully challenge the validity or
enforceability of any patent issued to us.

In addition to interference proceedings, the PTO can reexamine issued patents at the request of a third party seeking
to have the patent invalidated. This means that patents owned or licensed by us may be subject to reexamination and
may be lost if the outcome of the reexamination is unfavorable to us. Our patents may be subject to inter partes
review (replacing the reexamination proceeding), a proceeding in which a third party can challenge the validity of
one of our patents.
If we fail to meet our obligations under license agreements, we may lose our rights to key technologies on which our business
depends
Our business will depend in part on several technologies that are based in part on technology licensed from third
parties. Those third-party license agreements impose obligations on us, including payment obligations and obligations to pursue
development of commercial products under the licensed patents or technology. If a licensor believes that we have failed to meet our
obligations under a license agreement, the licensor could seek to limit or terminate our license rights, which could lead to costly and
time-consuming litigation and, potentially, a loss of the licensed rights. During the period of any such litigation our ability to carry
out the development and commercialization of potential products, and our ability to raise capital, could be significantly and negatively
affected. If our license rights were restricted or ultimately lost, we would not be able to continue to use the licensed technology in our
business.
The price and sale of our products may be limited by health insurance coverage and government regulation
Success in selling our pharmaceutical products may depend in part on the extent to which health insurance companies,
HMOs, and government health administration authorities such as Medicare and Medicaid will pay for the cost of the products and
related treatment. Until we actually introduce a new product into the medical market place we will not know with certainty whether
adequate health insurance, HMO, and government coverage will be available to permit the product to be sold at a price high enough
for us to generate a profit. In some foreign countries, pricing or profitability of health care products is subject to government control
which may result in low prices for our products. In the United States, there have been a number of federal and state proposals to
implement similar government controls, and new proposals are likely to be made in the future.
Risks Related to Our Relationship With BioTime
We are, and after the Asset Contribution we will continue to be, a subsidiary of BioTime.
Upon completion of the Asset Contribution, BioTime will own at least approximately 71.6% of our issued and outstanding
shares of common stock as a whole, and will also hold warrants that, if exercised, would increase its ownership by approximately
2%. This means that BioTime will have the voting power, through its ownership of Series B Shares, to elect our entire Board of
Directors and to control our management.
BioTime could cause corporate actions to be taken even if the interests of BioTime conflict with the interests of our other
shareholders. This concentration of voting power could have the effect of deterring or preventing a change in control that might be
beneficial to our other shareholders.
22
As the majority shareholder, BioTime will have the voting power to approve or disapprove any matter or corporate
transaction presented to our shareholders for approval, including but not limited to

any amendment of our certificate of incorporation or bylaws;

any merger or consolidation of us with another company;

any recapitalization or reorganization of our capital stock;

any sale of assets or purchase of assets; or

a corporate dissolution or a plan of liquidation of our business.
We will initially rely upon BioTime for certain services and resources
Although we will have our own research facilities, scientific personnel, and some management personnel, we will initially
rely on BioTime to provide certain management and administrative services, including accounting, financial management, and
controls over financial accounting and reporting. We will enter into a Shared Facilities and Services Agreement (“Shared Facilities
Agreement”) with BioTime under which we will agree to bear costs allocated to us by BioTime for the use of BioTime human
resources and for services and materials provided for our benefit by BioTime. We will pay BioTime 105% of its costs of providing
personnel and services to us, and for any use of its facilities by us, including an allocation of general overhead based on that use. We
may also share the services of some research personnel with BioTime.
If BioTime’s human resources and facilities are not sufficient to serve both BioTime’s needs and ours, we will have to hire
additional personnel of our own, either on a full-time or part-time basis, as employees or as consultants, and the cost of doing so could
be greater than the costs that would be allocated to us by BioTime. Also, any new personnel that we may need to hire may not be as
familiar with our business or operations as BioTime’s personnel, which means that we would incur the expense and inefficiencies
related training new employees or consultants.
A majority of our directors are also directors of BioTime
Three of the four members of our Board of Directors also serve on the BioTime Board of Directors, and also serve on the
Boards of Directors of one or more of BioTime’s other subsidiaries. This commonality of directors means that we will not have a
Board of Directors making business decisions on our behalf independent from BioTime. Even those of our directors who do not serve
on the BioTime Board of Directors will be elected to our Board of Directors by BioTime, and they may be removed from our Board
by BioTime, as the majority shareholder.
Conflicts of interest may arise from our relationship with BioTime
Our relationship with BioTime could give rise to certain conflicts of interest that could have an impact on our research and
development programs, business opportunities, and operations generally.

We and BioTime or any of its other subsidiaries may determine to engage in research and development of the same
or similar products or technologies, or products that would otherwise compete in the market place. Even if we
utilize different technologies than BioTime or its other subsidiaries, we could find ourselves in competition with
them for research scientists, financing and other resources, licensing, manufacturing, and distribution arrangements,
and for customers if we and BioTime or another BioTime subsidiary both bring products to market.
23

Because we will be a subsidiary of BioTime, BioTime could prevent us from engaging in research and development
programs, investments, business ventures, or agreements to develop, license, or acquire products or technologies that
would or might compete with those owned, licensed, or under development by BioTime or any of its other
subsidiaries.

BioTime may determine that some of our patents or technology would be useful in its business or that of another
BioTime subsidiary, and BioTime or another BioTime subsidiary may hold patents or technology that we may
determine would be useful in our business. In such cases we may enter into license or sublicense agreements with
BioTime or another BioTime subsidiary for the use of such patents or technology. Conflicts of interest will arise in
determining the scope and financial terms of any such licenses or sublicenses, including the fields of use permitted,
licensing fees, and royalties, if any, and other matters.

BioTime and its other subsidiaries will engage for their own accounts in research and product development
programs, investments, and business ventures, and we will not be entitled to participate or to receive an interest in
those programs, investments, or business ventures. BioTime and its other subsidiaries will not be obligated to
present any particular research and development, investment, or business opportunity to us, even if the opportunity
would be within the scope of our research and development plans or programs, business objectives, or investment
policies. These opportunities may include, for example, opportunities to acquire businesses or assets, including but
not limited to patents and other intellectual property that could be used by us or by BioTime or by any of BioTime’s
other subsidiaries. Our respective boards of directors will have to determine which company should pursue those
opportunities, taking into account relevant facts and circumstances at the time, such as the financial and other
resources of the companies available to acquire and utilize the opportunity, and the best “fit” between the
opportunity and the business and research and development programs of the companies. However, since BioTime
will have the ultimate power to elect the members of our Board of Directors, BioTime may have the ultimate say in
decision making with respect to the allocation of opportunities.

If we enter into any patent or technology license or sublicense, or any other agreement with BioTime or with another
BioTime subsidiary, the BioTime companies that are parties to the agreement may have a conflict of interest in
determining how and when they should enforce their rights under the agreement if the other BioTime company that
is a party were to default or otherwise fail to perform any of its obligations under the agreement.

One of our significant assets will be the 8,902,077 BioTime common shares that we will acquire in the Asset
Contribution. We expect to sell the BioTime common shares from time to time, or to pledge those shares as
collateral for loans, to raise capital to finance our operations. Because a sale of those shares could have a depressing
effect on the market value of BioTime common shares, BioTime will have a continuing interest in the number of
shares we sell, the prices at which we sell the shares, and time and manner in which the shares are sold. Further, we
may need or find it desirable to sell BioTime common shares at the same time as BioTime, or other BioTime
subsidiaries that hold BioTime common shares, also desire to sell some of their BioTime common
shares. Concurrent sales of BioTime common shares by us, BioTime, or other BioTime subsidiaries could have a
depressing effect on the market price of the BioTime common shares, lowering the price at which we and they are
able to sell BioTime common shares and resulting in lower net proceeds from the sales. We plan to coordinate any
future sales of our BioTime common shares with BioTime and its other subsidiaries in order to provide an orderly
and controlled process for raising capital through the sale of BioTime shares. This will include an agreement as to
the number of shares to be sold, the time period or “market window” for selling shares, the use of a common
securities broker-dealer, and a fair allocation of net sales based on average sales prices during any trading day on
which we and they sell BioTime shares.
24

Each conflict of interest will be resolved by our respective boards of directors in keeping with their fiduciary duties
and such policies as they may implement from time to time. However, the terms and conditions of patent and
technology licenses and other agreements between us and BioTime or other BioTime subsidiaries will not be
negotiated on an arm’s-length basis due to BioTime’s ownership of a controlling interest in us and due to the
commonality of directors serving on our respective boards of directors.
Risks Related to Our Dependence on Third Parties
We may become dependent on possible future collaborations to develop and commercialize many of our product candidates
and to provide the regulatory compliance, sales, marketing and distribution capabilities required for the success of our
business.
We may enter into various kinds of collaborative research and development and product marketing agreements to develop
and commercialize our products. The expected future milestone payments and cost reimbursements from collaboration agreements
could provide an important source of financing for our research and development programs, thereby facilitating the application of our
technology to the development and commercialization of our products, but there are risks associated with entering into collaboration
arrangements.
There is a risk that we could become dependent upon one or more collaborative arrangements for product development or as
a source of revenues from the sale of any products that may be developed by us alone or through one of the collaborative
arrangements. A collaborative arrangement upon which we might depend might be terminated by our collaboration partner or they
might determine not to actively pursue the development or commercialization of our products. A collaboration partner also may not
be precluded from independently pursuing competing products and drug delivery approaches or technologies.
There is a risk that a collaboration partner might fail to perform its obligations under the collaborative arrangements or may
be slow in performing its obligations. In addition, a collaboration partner may experience financial difficulties at any time that could
prevent it from having available funds to contribute to the collaboration. If a collaboration partner fails to conduct its product
development, commercialization, regulatory compliance, sales and marketing or distribution activities successfully and in a timely
manner, or if it terminates or materially modifies its agreements with us, the development and commercialization of one or more
product candidates could be delayed, curtailed or terminated because we may not have sufficient financial resources or capabilities to
continue such development and commercialization on our own.
We have no experience in marketing, selling or distributing products, and we may need to rely on marketing partners or
contract sales companies.
Even if we are able to develop our products and obtain necessary regulatory approvals, we have no experience or capabilities
of our own in marketing, selling or distributing any of the pharmaceutical products that we plan to develop. Accordingly, we will be
dependent on our ability to build our own marketing and distribution capability for our products, which would require the investment
of significant financial and management resources, or we will need to find collaborative marketing partners or contract sales
companies for commercial sale of those products. Even if we find a potential marketing partner, of which there can be no assurance,
we may not be able to negotiate a licensing or marketing contract on favorable terms to justify our investment or achieve adequate
revenues.
25
Risks Pertaining to Our Common Stock and Warrants
Ownership of our Series A Shares, Series B Shares, and warrants will entail certain risks associated with the volatility of
prices for our shares and the fact that we do not pay dividends on our common stock.
There is no existing public market for our Series A Shares or any of our other securities
We plan to apply to list our Series A Shares on a national securities exchange so that they can trade on an exchange upon
completion of the Series A Distribution. However, there is presently no existing public market for our Series A Shares or any other
class of our capital stock or other securities, and there is no assurance that a public market for our Series A Shares will arise or be
sustained after the Series A Distribution. We do not plan to apply to list our warrants on a national securities exchange and do not
expect a public market for the warrants to develop.
Because we are engaged in the development of pharmaceuticals and stem cell research products, the price of our stock and
value of our warrants may rise and fall rapidly

The market price of our common stock and the value of our warrants, like that of the shares or warrants of many
biotechnology companies, may be highly volatile.

The price of our common stock and value of our warrants may rise rapidly in response to certain events, such as the
commencement of clinical trials of an experimental new drug, even though the outcome of those trials and the likelihood
of ultimate FDA approval remain uncertain.

Similarly, prices of our common stock and the value of our warrants may fall rapidly in response to certain events such
as unfavorable results of clinical trials or a delay or failure to obtain FDA approval.

The failure of our earnings to meet analysts’ expectations could result in a significant rapid decline in the market price of
our common stock and value of our warrants.
Our stock price and the value of our warrants could decline due to the large number of outstanding shares of our common
stock eligible for future sale
Sales of substantial amounts of our common stock in the public market following the Series A Distribution, or the
perception that those sales could occur, could cause the market price of our Series A Shares and the value of our warrants to
decline. Sales of substantial amounts of common stock could also make it more difficult for us to sell equity or equity-related
securities in the future at a time and price that we deem appropriate.
The 6,537,779 Series A Shares that will be distributed to Geron’s stockholders in the Series A Distribution will be
immediately tradable without restriction, as will the 2,136,000 Series B Shares that will be sold to Romulus, and up to 350,000
additional Series B Shares that Romulus may acquire by exercising its warrants, and the Series A Shares into which Romulus’s Series
B Shares may be converted in the future. BioTime has advised us that it has no present plan or arrangement to sell or otherwise
distribute the 21,773,340 Series B Shares or 3,150,000 warrants it receives in exchange for assets under the Asset Contribution
Agreement, or the Series B Shares that it may receive if it exercises its warrants. However, BioTime reserves the right to sell its
Series B Shares, or Series A Shares into which its Series B Shares may be converted, and warrants in the future.
26
Current economic and stock market conditions may adversely affect the price of our common stock and the value of our
warrants
The stock market has been experiencing extreme price and volume fluctuations which have affected the market price of the
equity securities without regard to the operating performance of the issuing companies. Broad market fluctuations, as well as general
economic and political conditions, may adversely affect the market price of our common stock and the value of our warrants.
Because we do not pay dividends, our stock may not be a suitable investment for anyone who needs to earn dividend income
We do not pay cash dividends on our common stock. For the foreseeable future we anticipate that any earnings generated in
our business will be used to finance the growth of our business and will not be paid out as dividends to our shareholders. This means
that our stock may not be a suitable investment for anyone who needs to earn income from their investments.
The price of our stock, and the value of our assets, will be affected by changes in the value of the BioTime common shares that
we own

We will receive 8,902,077 BioTime common shares in the Asset Contribution. The value of our common stock will reflect,
in part, the value of the BioTime common shares that we hold. The value of the BioTime common shares we hold will vary
with the price at which BioTime common shares trade in the public market. The market price of BioTime common shares
will be impacted by a number of factors, including the results of BioTime’s operations.

We may sell our BioTime common shares from time to time to raise capital for our operations. We expect that such sales
will be done in “at-the-market” transactions in which we will sell shares on the NYSE MKT through one or more
broker-dealers acting as our sales agent or as principals, or through block position sales, sales to market makers, or similar
transactions in which the price per share that we receive will be based on the prevailing market price.
The warrants cannot be exercised unless a registration statement is in effect under federal securities laws
A registration statement under the Securities Act must be in effect in order for warrant holders to exercise their
warrants. This means that we will have to periodically update our registration statement and prospectus by filing post-effective
amendments to the registration statement of which this prospectus is a part. We intend to use our best efforts to keep our registration
statement effective. However, if we are unable to do so for any reason, warrant holders would not be able to exercise their warrants,
even if the market price of our common stock was then greater than the exercise price.
Most states will require us to obtain a permit, issued through an application for registration or qualification, and to maintain
that permit in effect in order for warrant holders in the state to exercise their warrants. Many states will only issue a permit if their
securities regulatory agency determines that the securities are a suitable investment for public investors in their state, considering a
variety of factors, including the financial performance and financial condition of the company issuing the securities. Because we are a
development stage start-up company without a history of earnings, some or all of those states may decline to issue the permit required
to permit warrant holders in those states to exercise their warrants. However, if the Series B Shares are converted into Series A
Shares, and the Series A Shares are listed on a national securities exchange, the exercise of the warrants will be exempt from
registration or qualification under state securities laws.
27
Securities analysts may not initiate coverage or continue to cover our common stock, and this may have a negative impact on
the market price of our stock and the value of our warrants
The trading market for our Series A Shares will depend, in part, on the research and reports that securities analysts publish
about our business and our Series A Shares. We do not have any control over these analysts. There is no guarantee that securities
analysts will cover our Series A Shares. If securities analysts do not cover our Series A Shares, the lack of research coverage may
adversely affect the market price of those shares and the value of our Series B Shares and warrants. If securities analysts do cover our
Series A Shares, they could issue reports or recommendations that are unfavorable to the price of our shares, and they could
downgrade a previously favorable report or recommendation, and in either case our share price and value of our warrants could
decline as a result of the report. If one or more of these analysts ceases to cover our Series A Shares or fails to publish regular reports
on our business, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.
You may experience dilution of your ownership interests because of the future issuance of additional shares of our common
stock and our preferred stock.
In the future, we may issue our authorized but previously unissued equity securities, resulting in the dilution of the
ownership interests of our present shareholders. We are currently authorized to issue an aggregate of 150,000,000 shares of common
stock, consisting of 75,000,000 Series A Shares and 75,000,000 Series B Shares. We are also authorized to issue 5,000,000 shares of
“blank check” preferred stock. As of March 28, 2013, there were 51,700 Series B Shares outstanding, and we expect to issue
6,537,779 Series A Shares and an additional 23,909,340 Series B Shares through the Asset Contribution and the sale of Series B
Shares to Romulus. We will also reserve 3,500,000 Series B Shares for issuance upon the exercise of the warrants, and 4,500,000
Series B Shares for issuance under a stock option and stock purchase plan. The Series B Shares will be convertible into Series A
Shares after the completion of the Series A Distribution and the BioTime Warrants Distribution.
We may issue additional Series A Shares or Series B Shares, or other securities that are convertible into or exercisable for
Series A Shares or Series B Shares, in order to raise additional capital, or in connection with hiring or retaining employees or
consultants, or in connection with future acquisitions of licenses to technology or rights to acquire products, in connection with future
business acquisitions, or for other business purposes. The future issuance of any such additional shares of common stock or other
securities may create downward pressure on the trading price of our Series A Shares.
We may also issue 5,000,000 shares of preferred stock having rights, preferences, and privileges senior to the rights of our
common stock with respect to dividends, rights to share in distributions of our asset s if we liquidate our company, or voting
rights. Any preferred stock may also be convertible into Series A Shares or Series B Shares on terms that would be dilutive to holders
of common stock.
28
Sales of certain Series A Shares by Geron may have a temporary impact on the market price of the Series A Shares.
In the Asset Contribution Agreement, Geron has agreed to distribute to its stockholders, on a pro rata basis, the Series A
Shares it receives in the Asset Contribution. Under the Asset Contribution Agreement, fractional shares will not be distributed and
instead will be aggregated and sold by Geron and the proceeds of the sale will be distributed ratably by Geron to its stockholders who
would otherwise be entitled to receive fractional shares. Also, in certain to-be-determined excluded jurisdictions, in lieu of
distributing the Series A Shares, Geron will sell the Series A Shares and distribute the proceeds ratably to its stockholders in those
jurisdictions. The sale of those Series A Shares by Geron could have a temporary depressing effect on the price at which Series A
Shares trade in the market.
If our Series A Shares are not approved for listing on a national securities exchange they will be subject to the so-called
“penny stock” rules that impose restrictive sales practice requirements
If we are unable to obtain approval from a national securities exchange to list our Series A Shares, those shares could
become subject to the so-called “penny stock” rules if the shares have a market value of less than $5.00 per share. The SEC has
adopted regulations that define a penny stock to include any stock that has a market price of less than $5.00 per share, subject to
certain exceptions, including an exception for stock traded on a national securities exchange. The SEC regulations impose restrictive
sales practice requirements on broker-dealers who sell penny stocks to persons other than established customers and accredited
investors. An accredited investor generally is a person whose individual annual income exceeded $200,000, or whose joint annual
income with a spouse exceeded $300,000 during the past two years and who expects their annual income to exceed the applicable
level during the current year, or a person with net worth in excess of $1,000,000, not including the value of the investor’s principal
residence and excluding mortgage debt secured by the investor’s principal residence up to the estimated fair market value of the home,
except that any mortgage debt incurred by the investor within 60 days prior to the date of the transaction shall not be excluded from
the determination of the investor’s net worth unless the mortgage debt was incurred to acquire the residence. For transactions covered
by this rule, the broker-dealer must make a special suitability determination for the purchaser and must have received the purchaser’s
written consent to the transaction prior to sale. This means that delisting could affect the ability of shareholders to sell their common
shares and warrants in the secondary market.
If a transaction involving a penny stock is not exempt from the SEC’s rule, a broker-dealer must deliver a disclosure
schedule relating to the penny stock market to each investor prior to a transaction. The broker-dealer also must disclose the
commissions payable to both the broker-dealer and its registered representative, current quotations for the penny stock, and, if the
broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the
market. Finally, monthly statements must be sent disclosing recent price information for the penny stock held in the customer’s
account and information on the limited market in penny stocks.
USE OF PROCEEDS
We expect to receive $5,000,000 in cash from BioTime through the Asset Contribution and $5,000,000 in cash from
Romulus through the Stock and Warrant Purchase Agreement. The maximum amount of cash proceeds receivable from the exercise
of the warrants is $17,500,000. Our receipt of the proceeds from the exercise of the warrants depends upon whether and when the
warrants are exercised, and our use of the proceeds will depend upon our needs at the time of receipt. We intend to use the cash
received from BioTime and Romulus and the proceeds from the exercise of the warrants as shown in the following table. However,
the table represents only a current estimate of the allocation of those funds. The table also does not reflect the proceeds we may
receive through the sale of any of the 8,902,077 BioTime common shares that we will receive in the Asset Contribution and that had a
gross market value in excess of $34,000,000 as of March 28, 2013 based on the closing price of BioTime common shares on the
NYSE MKT on that date.
29
The development of new medical products and technologies often involves complications, delays and costs that cannot be
predicted, and may cause us to make a reallocation of proceeds among the categories shown below or to other uses. See
“BUSINESS—Business Strategy” for a discussion of factors that will impact our determination of which products we will seek to
develop and the order of priority in which we will commence our product development efforts.
Application
Research and Development
G & A Working Capital
Total
$
$
Estimated
Amount
20,625,000
6,875,000
$
27,500,000
Percent of
Total
75%
25%
100%
Research and Development— Proceeds allocated to research and development may be used to develop new stem cell
products and technology and to acquire new stem cell products or and technology through licenses or similar agreements from other
companies. We may also use proceeds for any clinical trials of products that we may conduct. A portion of the proceeds allocated to
research and development will be used to pay the salaries, benefits and fees to our management, and to other employees and
consultants who assist in the development of new products or the preparation of applications to the FDA and foreign regulatory
agencies and patent applications.
Working Capital— We intend to apply the balance of the proceeds from the exercise of the warrants to working capital and
general corporate purposes. We will have broad discretion with respect to the use of proceeds retained as working capital. The
proceeds may be used to defray overhead expenses and for future opportunities and contingencies that may arise. We expect that our
general and administrative expenses will increase in the short-term as we hire the new employees that we need for our operations, and
in the longer term as we achieve progress in developing products and bringing them to market. A portion of the proceeds allocated to
working capital will be used to pay the salaries, benefits and fees to our management, and to other employees and
consultants. Proceeds allocated to working capital also may be reallocated to research and development and may be used to pay the
costs of developing new products, obtaining new technology, or conducting clinical trials of our products.
Until used, the net proceeds from the exercise of the warrants will be invested in certificates of deposit, United States
government securities or other high quality, short-term interest-bearing investments.
We expect that the $10,000,000 of cash from BioTime and Romulus will be sufficient to fund our operations for at least 12
months. BioTime has a right under the Asset Contribution Agreement to contribute additional BioTime common shares to us in lieu
of cash. If we receive BioTime common shares in lieu of cash it is likely that we will have to sell those shares within 12 months to
raise cash for our operations.
We will need to raise additional capital from time to time to pay operating expenses until such time as we are able to
generate sufficient revenues from product sales, royalties, and license fees to fund our operations. We may raise additional capital
through the issue and sale of shares of our common stock or preferred stock or other securities, and through the sale of the BioTime
common shares we receive in the Asset Contribution. The prices at which we may issue and sell our securities and the prices at which
we may sell our BioTime common shares in the future are not presently determinable and will depend upon many factors, including
prevailing prices for those securities in the public market.
30
We may sell our BioTime common shares, from time to time, by any method that is deemed to be an “at-the-market” equity
offering as defined in Rule 415 promulgated under the Securities Act, including sales made directly on or through the NYSE MKT or
any other existing trading market for the common shares in the U.S. or to or through a market maker, at prices related to the prevailing
market price, or in privately negotiated transactions or through block trades in which the broker-dealer will attempt to sell the shares
as agent but may position and resell a portion of the block as principal to facilitate the transaction, or through one more of the
foregoing transactions. We expect to sell our BioTime common shares through Cantor Fitzgerald & Co. or such other broker-dealer as
BioTime may designate.
We will bear all broker-dealer commissions payable in connection with the sale of our BioTime common
shares. Broker-dealers may receive commissions or discounts from us (or, if any broker-dealer acts as agent for the purchaser of
shares, from the purchaser) in amounts to be negotiated.
MARKET FOR OUR COMMON EQUITY AND WARRANTS
Series A Shares
We plan to apply to have our Series A Shares approved for listing on the a national securities exchange in connection with
the Series A Distribution. However, there is no assurance that a national securities exchange will accept or approve our listing
application. If we are unable to list our Series A Shares on a national securities exchange, we will seek to have those shares traded in
the OTC Bulletin Board market, which may provide less liquidity than the a national securities exchange.
Prior to the Series A Distribution, there has been no public market for our Series A Shares or any of our other securities.
There can be no assurance that an active market for our Series A Shares will develop or, if a market does develop, that it will be
sustained.
Warrants
There is presently no public market for the warrants included in this prospectus and we do not expect that a market for the
warrants will develop. We have no present intention to apply to list the warrants on any national securities exchange or to facilitate
trading of the warrants in any over-the-counter market.
Because there is presently no public market for our Series B Shares or Series A Shares, the $5 per share exercise price of the
warrants was not set with reference to a current or historic market price for the Series B Shares issuable upon the exercise of the
Warrants. Instead, the exercise price was established based upon negotiations between our management and BioTime and
Romulus. Romulus is not affiliated with us or with BioTime and has agreed to purchase Series B Shares and warrants pursuant to a
Stock and Warrant Purchase Agreement. The exercise price reflects our management’s and BioTime’s management’s projection of a
potential future valuation of our business and common stock during the term of the warrants. The actual value of our common stock
might prove to be less than or greater than the initial value and will be reflected by the price at which our Series A Shares trade in the
market immediately after the Series A Distribution. Because we are a subsidiary of BioTime and a majority of the members of our
Board of Directors were also members of BioTime’s Board of Directors, any discussions between us and BioTime with respect to the
exercise price and other terms of the warrants cannot be considered to have been at arm’s length.
31
Dividend Policy
We have never declared any cash dividends with respect to our common stock. For the foreseeable future we anticipate that
any earnings generated in our business will be used to finance the growth of our business and will not be paid out as dividends to our
shareholders.
CAPITALIZATION
The following table sets forth our capitalization at December 31, 2012 and as adjusted to give effect to the sale of our
common stock and warrants, and the application of the estimated net proceeds derived from the sale of such securities:
December 31, 2012
Actual
As Adjusted(1)
Stockholders’ equity:
Preferred stock, $0.0001 par value, 500,000 shares authorized; 5,000,000 shares
authorized, as adjusted; none issued or outstanding
Common stock, $0.0001 par value, 2,000,000 shares authorized, 51,700 shares issued
and outstanding, actual; 150,000,000 shares authorized, 30,498,819 shares issued and
outstanding, as adjusted
Additional paid-in capital
Deficit accumulated during the development stage
Subscription receivable
—
—
5
3,050
51,735
(758,893)
(50,000)
87,460,446
(758,893)
(50,000)
Total stockholders’ equity (deficit)
$
(757,153)
$
86,654,603
Total capitalization
$
(757,153)
$
86,654,603
(1) Excludes the impact of 3,500,000 Series B Shares that may be issued upon the exercise of the warrants.
32
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following Management's Discussion and Analysis of Financial Condition and Results of Operations is intended to provide
information necessary to understand our audited consolidated financial statements for the period from September24, 2012 (our date
of inception) to December 31, 2012, and highlight certain other information which, in the opinion of management, will enhance a
reader's understanding of our financial condition, changes in financial condition and results of operations. These historical financial
statements may not be indicative of our future performance. This Management's Discussion and Analysis of Financial Condition and
Results of Operations contains a number of forward-looking statements, all of which are based on our current expectations and could
be affected by the uncertainties and risks described throughout this filing, particularly in "Risk Factors."
Critical Accounting Policies
Development Stage Company – The Company complies with the reporting requirements of ASC 915, “Development Stage
Entities.”
Results of Operations
Formation and operating expenses recognized during the period from September 24, 2012 (date of inception) through
December 31, 2012 amounted to approximately $759,000, which is primarily comprised of approximately $721,000 in legal fees
incurred in connection with the Asset Contribution Agreement, approximately $6,000 in formation fees, and approximately $27,000 in
salaries and payroll related expenses.
Capital Transactions
On September 24, 2012, we sold 50,000 Series B Shares to BioTime for $50,000 in cash which the Company has not yet
collected. Therefore the $50,000 is recorded as subscription receivable on the Company’s balance sheet and statement of stockholders’
deficit as of December 31, 2012. We also sold 1,700 Series B Shares to an officer in exchange for 1,000 shares of a publicly traded
company with a market value of $1,740 at the time of investment. The value of these shares at December 31, 2012 declined to $1,410.
Liquidity and Capital Resources
Upon consummation of the Asset Contribution, we expect to receive $5,000,000 million in cash and 8,902,077 BioTime
common shares from BioTime under the Asset Contribution Agreement, and $5,000,000 in cash from Romulus under the Stock and
Warrant Purchase Agreement. We may sell our BioTime common shares, from time to time, in “at-the-market” or similar transactions
to raise additional cash.
Upon consummation of the Asset Contribution, we will issue 3,150,000 common share purchase warrants to BioTime under
the Asset Contribution Agreement, and 350,000 common share purchase warrants to Romulus under the Stock and Warrant Purchase
Agreement. Those warrants will have an exercise price of $5.00 per share and will expire three years from the date of issue. Our
receipt of the cash exercise price from the exercise of the warrants depends upon whether and when the warrants are exercised.
The unavailability or inadequacy of financing or revenues to meet future capital needs could force us to modify, curtail,
delay, or suspend some or all aspects of our planned operations. Sales of additional equity securities could result in the dilution of the
interests of our shareholders.
33
Off-Balance Sheet Arrangements
As of December 31, 2013, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC
Regulation S-K.
Quantitative and Qualitative Disclosures about Market Risk
Foreign Currency Exchange Risk
We are not presently exposed in a significant degree to foreign exchange currency risks because we are not conducting
international business at this time, and we do not engage in foreign currency hedging activities. If we engage in international
transactions, we will need to translate foreign currencies into U.S. dollars for reporting purposes, and currency fluctuations could have
an impact on our financial results.
Credit Risk
We place most of our cash in U.S. banks and we invest some of our cash in interest bearing instruments issued by U.S.
banks or the U.S. Treasury. Deposits with banks may temporarily exceed the amount of insurance provided on such deposits. We
monitor the cash balances in our accounts and adjust the cash balances as appropriate, but if the amount of a deposit at any time
exceeds the federally insured amount at a bank, the uninsured portion of the deposit could be lost, in whole or in part, if the bank were
to fail.
Interest Rate Risk
We will invest a portion of our cash in interest-bearing securities issued by the U.S. Treasury. The primary objective of our
investments will be to preserve principal and liquidity while earning a return on our invested capital, without incurring significant
risks. The market value of fixed-rate instruments will decline if interest rates rise. Due in part to this factor, our future investment
income may fall short of expectations due to changes in market conditions and in interest rates, or we may suffer losses in principal if
forced to sell securities which may have declined in fair value due to changes in interest rates.
BUSINESS
Overview
We are a biotechnology company focused on the emerging field of regenerative medicine. Our core technologies center on
stem cells capable of becoming all of the cell types in the human body, a property called pluripotency. We plan to develop therapeutic
products from “pluripotent” stem cells to treat diseases or injuries in a variety of medical fields, including neurology, oncology,
cardiology, metabolic diseases, ophthalmology, orthopedics, and blood and vascular diseases.
“Regenerative medicine” refers to an emerging field of therapeutic product development that may allow all human cell and
tissue types to be manufactured on an industrial scale. This new technology is made possible by the isolation of hES cells, and by the
development of iPS cells which are created from regular cells of the human body using technology that allows adult cells to be
“reprogrammed” into cells with pluripotency much like hES cells. These pluripotent hES and iPS cells have the unique property of
being able to branch out into each and every kind of cell in the human body, including the cell types that make up the brain, the blood,
the heart, the lungs, the liver, and other tissues. Unlike adult-derived stem cells that have limited potential to become different cell
types, pluripotent stem cells may have vast potential to supply an array of new regenerative therapeutic products, especially those
targeting the large and growing markets associated with age-related degenerative disease. Unlike pharmaceuticals that require a
molecular target, therapeutic strategies in regenerative medicine are generally aimed at regenerating affected cells and tissues, and
therefore may have broader applicability. Regenerative medicine represents a revolution in the field of biotechnology with the
promise of providing therapies for diseases previously considered incurable
34
Business Strategy
By acquiring Geron’s stem cell assets, we will have the use of cell lines and other biological materials, patents, and
technology developed by Geron over 12 years of work focused in the following complementary lines of research:

The establishment of cell banks of undifferentiated hES cells produced under current good manufacturing
procedures “cGMP” and suitable for human therapeutic use;

The development of scalable differentiation methods which convert, at low cost, undifferentiated hES cells into
functional cells suitable for human therapeutic cells that can be stored and distributed in the frozen state for
“off-the-shelf” use;

The development of regulatory paradigms to satisfy both U.S. and European regulatory authority requirements to
begin human clinical testing of products made from hES cells; and

The continuous filing and prosecution of patents covering inventions to protect commercialization rights, as well as
consummating in-licenses to enable freedom to operate in a variety of fields.
Through the Asset Contribution, we will acquire a significant portfolio of patents and patent applications, cell lines, and hES
technology and know-how related to potential therapeutic products in various stages of development. Two of the products under
development have already been used in early stage clinical trials. See “BUSINESS—Potential Products Overview” in this prospectus
for a description of the various products and the stages of development that they are in.
The products under development from various cell types that we will acquire from Geron are summarized in the following
table:
Product Description
Target Market
Estimated Number of
Potential Patients
Status
OPC1 – Glial Cells
Spinal Cord Injury
25,000 patients
SCI Phase 1 Trial initiated in U.S.
5 Patients treated – no adverse events to-date
Multiple Sclerosis,
Canavan’s Disease, and
Stroke
Proof of principle achieved in animal models of
spinal cord injury, MS spine and Canavan’s
Disease
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CM-1 Cardiomyocytes
Heart Failure, Myocardial
Infarction
Cells derived and fully characterized.
Proof of concept in three animal models of
disease.
Scalable manufacturing established.
First in man clinical trial designed.
IC-1 – Islet Cells
Type 1 and some Type 2 12.5 million patients
Diabetes
Cells derived and partly characterized.
Proof of concept in rodent diabetes model.
Scalable manufacturing methods under
development.
CHND-1 – Chondrocytes Osteoarthritis
30 million patients
Cells derived and partly characterized.
Early proof of concept in two animal models of
disease.
VAC-2 – Dendritic Cells Cancer Infectious and
Autoimmune Diseases
Large patient population
Cells derived and fully characterized.
Scalable manufacturing methods under
development.
Proof of concept established in multiple human in
vitro systems.
VAC-1 Autologous
Monocyte – Derived
Dendritic Cells
Cancer
Prostate: 240,000
cases/year U.S.,
AML: > 12,000 cases/year
U.S.
Phase I study in metastatic prostate cancer
completed ( Journal of Immunology , 2005, 174:
3798-3807).
Phase I/II study in AML completed. Manuscript
in preparation.
We have not yet determined which products we will seek to develop or the order of priority in which we will commence our
product development efforts. The choice and prioritization of products for development from the acquired assets, and the cost and
developmental time required to develop any of them, is not presently determinable due to many factors including the following:

the functional state of the transferred cells, cell lines and other biological reagents cannot be determined until they
are transferred to us upon completion of the Asset Contribution and are then tested in an appropriate laboratory
setting by qualified scientific personnel using validated equipment, which may not be completed for three to six
months after the Asset Contribution;

we will need to complete an analysis of third party competitive and alternative technology that, for example, may
provide superior methods of manufacturing the cell types listed above. Alternative technology, if it exists, may or
may not be available for in-licensing, and could potentially affect our choice of products to develop;
36

we and BioTime will need to complete an analysis of products and technologies being developed by BioTime and its
other subsidiaries to determine whether any of those products or technologies may enhance or be substituted for any
of the acquired Geron cell lines or technologies;

the inherent uncertainty of laboratory research and any clinical trials that we may conduct;

the amount of capital that we will have for our development programs, including potential sources of additional
capital through research grants or collaborations with third parties;

the availability and recruitment of qualified personnel to carry out the analyses and evaluations described above;

the views of the United States Food and Drug Administration (FDA) and comparable foreign regulatory agencies on
the pre-clinical product characterization studies required to file an Investigational New Drug Application (IND) in
order to initiate human clinical testing of potential therapeutic products.
We may also use the acquired assets, along with technology that we may develop ourselves or that we may acquire from
third parties to pursue the development of other products. Our product development efforts may be conducted by ourselves alone or in
collaboration with others if suitable co-development arrangements can be made.
Potential Products Overview
OPC-1 Glial Progenitor Cells
We will acquire from Geron a quantity of glial progenitor cells derived from a GMP master call bank of undifferentiated
hESCs that has been fully qualified for human use. These cells, stored frozen until ready for use, are produced under GMP conditions
and screened for adventitious agents. Geron’s first hESC-derived cellular therapy to enter human clinical testing were these glial
progenitor cells in a product denominated OPC-1.
Glial cells are nature’s neuronal insulating cells. Like the insulation covering an electrical wire, glial cells enable the
conduction of electrical impulses along nerve fibers throughout the central and peripheral nervous system of man. They are also
known to promote neural growth, as well as, induce blood vessel formation around nerve axions. OPC-1 cells reproduce all of the
natural functions of glial cells in animal models, including: producing myelin that wraps around nerve fibers; producing neurotrophic
factors which encourage neuro-regeneration and sprouting of new nerve endings, and inducing new blood vessels which provide
nutrients and remove waster matter from neural tissue as it functions in the body.
The pathology of spinal cord injury involves extensive loss of the myelin sheath (insulation) produced by glial cells at the
site of injury. Although neurons are lost, the prime pathology of spinal cord injury in man is loss of glial insulation which prevents
transmission of nerve impulses above or below the point of injury.
There are currently no approved therapies for spinal cord injury. It is believed that in order to effect substantial benefit in
treating this complex injury multiple mechanisms of action are required, such as re-myelination of the demyelinated axions,
generation of new blood vessels to repair the ischemic damage from injury, and the presence of biologics that cause neuro-sprouting
or new nerve growth to enable the severed axions to repair. OPC-1 cells have been shown to exhibit all three effects and are therefore
a potential ideal intervention to treat acute spinal cord injury.
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Geron has published multiple studies in a validated rat model of spinal cord injury showing that a single injection of OPC-1
cells at the site of injury produces durable re-myelination, new blood vessel formation, and new neuronal sprouting which results in
sustained and significant improvement in the animal’s locomotion within several months after injection. A large body of evidence
derived from Geron’s research showed the following observations:

OPC-1 survives long-term in the spinal cord after injection.

The injected cells result in sustained and significant improvement in locomotor activity in the injured animals.

The growth of the OPC-1 calls after injection reduces cavities that normally form after injury in both animal models
and human spinal cord injury.

OPC-1 cells migrate up to 5 centimeters in both directions from the site of injection in rodent models of spinal cord
injury. No toxicity was seen in the animals after injection – no systemic toxicity, allodynia, no teratomas or toxicity
of any kind other than rare observations of benign cyst-list structures at the point of injection. Extensive in vitro
immune assays demonstrated the absence of direct immune recognition of OPC-1 by human immune cells.
These data provided the rational to initiate the world’s first clinical trial using hESC-derived glial cells (OPC-1) to treat acute spinal
cord injury in humans.
Phase 1 Trial Design
After FDA authorization, Geron began the world’s first human embryonic stem cell trial in patients with acute spinal cord
injury in October 2010. The trial was an open label design conducted at seven U.S. neuro-trauma sites. Up to 10 subjects could be
treated in the trial, each of whom had a sub-acute functional complete thoracic spinal cord lesion. Patients enrolled in the study
received single dose of 2 x 10 6 cells at the injury site between 7 and 14 days after injury. All subjects received temporary low dose
immune suppression for 45-60 days. The primary endpoint of the study was safety, with secondary endpoints of neurologic function
assessed by five different validated measures of sensory and motor function. Each subject received a screening MRI, and if treated
and entered into the treatment protocol, received 8 follow-up MRIs in the first year and multiple physical exams and laboratory
testing. The patients then entered a separate protocol after the first year which will follow them intermittently over a period of 15
years.
Results to Date
Five patients have received OPC-1. All five patients have completed their 365 day follow-up data set. No surgical
complication during or post-surgery have been observed, and there have been no significant adverse events to date in any patient
attributable to the OPC-1 product. There have been no unexpected neurological changes to date, nor has there been evidence of
adverse changes on multiple MRIs. Immune monitoring, conducted in some of the patients, has not detected any evidence of immune
responses to OPC-1, an important clinical fining that was predicted by extensive in vitro immune testing of OPC-1 prior to
initiating the trial.
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Product Development Strategy
Once safety is demonstrated in the first Phase 1 trial, the strategy for clinical development of OPC-1 in spinal cord injury, if
we proceed with this indication, would involve a series of successive trials in which the injected dose increases approximately
ten-fold, and clinical protocols progress to include other forms of spinal cord injury, patients with complete cervical injuries, and then
patients with incomplete thoracic and cervical injuries thereby testing the product in each of the major forms of spinal cord injury.
In addition or as an alternative to spinal cord injury, we may test the OPC-1 cells in potential alternative indications,
including Multiple Sclerosis, Canavan’s Disease, radiation induced spinal lesions, and stroke.
OPC-1 may find utility in the treatment of Multiple Sclerosis focal lesions, especially those in the spinal cord. Accordingly,
work was begun in a monkey model of spinal Multiple Sclerosis which has demonstrated persistent re-myelination by OPC-1 in the
primate model MS spinal cord lesion which is durable for at least one year. The human cells survive and extensively re-myelinate the
animals’ MS lesion, making the cellular repair of MS spinal lesion a possible alternative indication for OPC-1.
In Canavan’s Disease, a genetic mutation leads to the accumulation of toxic materials that result in the death of glial cells
leading to consequent demyelination. OPC-1 cells have been injected into a mouse model of Canavan’s Disease in which the cells
were shown to survive and significantly improve rotation behavior after injection, thereby establishing the rationale to possibly extend
OPC-1 use into that genetic disease.
Lastly, a growing body of evidence supports the potential of using OPC-1 as a treatment for acute thrombotic stroke. Based
upon the three documented mechanisms of action of OPC-1 -- re-myelination, vascularization, and neurotrophin release -- we may
collaborate with academic centers to study OPC-1 in animal models of thrombotic stroke in an attempt to generate a potential rational
for the application of OPC-1 in this very large, unmet medical need.
CM-1: Cell Therapy for Myocardial Disease
In heart failure, ischemic injury to the myocardium in the form of myocardial infarction leads to cell death and loss of
contractility. In a process called remodeling, progressive deterioration of tissue structure leads to further cell death and loss of
contractility. Although heart failure is treatable by a wide variety of pharmacologic agents with some success, no conventional drug
or biologic can restore damaged heart wall muscle structure. Therefore, there is an urgent, unmet medical need to restore contractile
function and prevent pathological remodeling.
CM-1, hESC-derived cardiomyocytes, have been extensively characterized in vitro and in vivo. The product is
predominantly composed of ventricular cardiomyocytes which have been shown to electrically and mechanically couple to the animal
myocardium in which they are injected and contract in synchrony with the animal host ventricular cells. CM-1 has been shown in
animal studies to repopulate the scar with healthy cardiac tissue. The cells are completely responsive to all major classes of current
cardiac pharmacologic agents. This is important because patients who may receive CM-1for heart failure will also concurrently be
treated with existing drugs. It is therefore important that the injected tissue responds to cardiac drugs appropriately. Geron had
optimized and validated a scalable production methodology to meet the volumes of product required for such a large medical market.
39
CM-1 cells have been subjected to an extensive battery of pharmacologic, electro-physiologic and molecular biological
testing both in-house and in the laboratories of numerous academic collaborators. Extensive immuno-cytochemical analysis has shown
that CM-1 cells express cardiac sarcomeric and gap junction proteins and appropriate transcription factors to unequivocally identify
them as human ventricular cardiac cells. Over 80% of cells in the CM-1 preparation are ventricular cardiomyocytes with the
appropriate electrophysiological de-polarization pattern and appropriate drug responses to HERG-channel blockers, calcium channel
blockers and other cardio-active agents. The cells display mature excitation contraction coupling properties, including the influx of
external calcium ions through L-type calcium channels which are required for electro-chemical coupling. As is the case for OPC-1,
CM-1 cells have been shown to not be susceptible to human allogenic immune responses in vitro . The cells express HL-A B and C
alleles, but not Class 2 alleles. Even after in vitro treatment with interferon gamma, CM-1 cells do not stimulate allogeneic T-cells
in vitro . Furthermore, CM-1 is resistant to human serum antibody mediated cyto-toxicity. These results suggest, as in the case of
OPC-1, the need for only transient, low-dose immune suppression in the immediate post-injection period.
CM-1 cells have been extensively tested in three animal models of myocardial infarction: the rat, the guinea pig and large
pig. In all three animal models, CM-1, after a single injection, forms long lasting cardiomyocyte grafts which form in the scar tissue
into which they are injected. The cells induce host vascular proliferation which enables the long-term survival of the injected human
cells. CM-1 has been shown to couple electrically and mechanically with the host myocardium. The cells significantly improve
ejection fraction in both acute rat and acute guinea pig studies, as well as chronic large studies in a large pig infarct model.
Toxicity studies have demonstrated a favorable safety profile for these cells. Most importantly, the cells do not increase
arrhythmias in multiple animal models even during the induction of an arrhythmia after injection. In one of the models the frequency
of induced arrhythmias was decreased in animals that have received the CM-1 product, presumably because the CM-1 product
increases normal electrical conductivity across the infarct zone. Improved ejection fraction has been documented in all three animals
using magnetic resonance imaging. The magnitude of the improvement in ejection fraction is highly clinically and statistically
significant. CM-1 is the only human cardiomyocyte cell therapy for myocardial disease that has shown stable and durable engraftment
with living functional cardiomyocytes after injection into animal models of myocardial disease. The beneficial effects in the animal
models are likely due to the persistence of the injected cells rather than a transient effect produced by secretion factors of cells that do
not persist after injection, such as injected bone marrow cells, or mesenchymal stem cells.
IC-1: hESC-Derived Islets for the Treatment of Diabetes
Approximately 26% of adult diabetic patients receive insulin therapy. Exogenous insulin, while effective at reducing
hyperglycemic episodes, requires constant monitoring. Despite sophisticated pump systems and rapid glucose monitoring tests,
glucose excursions still occur and exogenous insulin fails to prevent systemic complications of the disease. Proof of concept for cell
therapy interventions in diabetes were provided by the cadaveric islet transplants performed according to the co-called Edmonton
protocol. Although these cells reversed hypoglycemia, the cadaveric islets have poor viability, differ widely in function and are often
associated with a severe complication called portal hypertension. The annual availability of cadaveric islets is less than 0.1% of the
number of cases of Type 1 diabetes prevalent in North America.
Therefore, a substantial unmet medical need exists for a consistent and scalable source of high quality human islet cells for
transplantation. IC-1 is a highly viable hESC-derived islet progenitor population which potentially could satisfy that unmet medical
need. Multiple animal studies have shown that IC-1 cells, after injection, mature in the animal to express all islet hormones, process
and release insulin in response to high glucose challenge, and reverse hyperglycemia in vivo in rodent models of diabetes.
40
IC-1 Product Profile
The IC-1 product profile is envisioned to require 10 8 hESC-derived islet cells for injection into an immuno-isolation device
that would be implanted subcutaneously. The immuno-isolation device would prevent the patient’s autoimmune reaction, the
hallmark of Type 1 Diabetes, from destroying or damaging the IC-1 cell product. Additionally, the immuno-isolation device, with a
rechargeable core, would enable the periodic re-injection of fresh IC-1 cells to recharge the device, if necessary, on a yearly
basis. This device is intended to avoid the requirement for any immune suppression. The prevalence of Type 1 Diabetes is nearly 2
million persons in the United States, most of whom require exogenous insulin and could therefore be potential candidates for the IC-1
product. There are over 53 million Type 2 diabetics in the United States and about 20% of them also become insulin dependent,
thereby creating a large potential market opportunity for the IC-1 product.
The patented differentiation protocol generates islet progenitor cells in a manner that recapitulates the embryonic pancreatic
development lineage. The cells that are injected in the animal models of diabetes mature in vivo over the course of several weeks
into mature human islets that produce the three main islet hormones: C-peptide, glucagon and somatostatin, as well as characteristic
transcription factors that identify them as human islet cells. After maturation in vivo the injected IC-1 cells are shown to express
one hormone per cell type; alpha cells producing glucagon, beta cells producing insulin and C-peptide, and delta cells producing
somatostatin. After injection into diabetic mice, the presence of human C-peptide is detectible in blood at physiologically relevant
concentrations. When IC-1 treated mice are challenged with a glucose load, they appropriately increase their insulin level in response
to the glucose challenge. Studied long-term, IC-1 injected diabetic animals maintain glucose homeostasis for over 140 days, the
length of the animal study. Their average blood glucose concentration is normal for humans, and slightly hypoglycemic for mice,
indicating the complete take-over of glucose homeostasis by the human cells injected into the animal. Importantly, IC-1 treated
animals maintain mormoglycemic levels following an intra-peritoneal glucose challenge, indicating the capacity of IC-1 treated mice
to maintain normoglycemia in the face of a glucose challenge.
CHND-1: Chondrocytes for Cartilage Disorders
Articular cartilage is the shock absorber for joints. Cartilage is a complex tissue with multiple cell levels and is avascular,
and without neurons or lymphatics, and has very low cell turnover. Injury or chronic wear and tear can cause defects in articular
cartilage which increase over time and leads to permanent disability because damaged cartilage cannot regenerate. Current procedures
for cartilage repair usually generate fibro-cartilage which only provides short-lived relief. The unmet medical need is for a tissue
source that can regenerate true articular cartilage and that does not require biopsy or multiple surgical procedures for
installation. CHND-1 chondrocytes have been shown in animal models of osteoarthritis to mature in situ and form stable articular
cartilage for at least nine months. CHND-1 cells can be injected across xenograft barriers without immune suppression and the cells
can be cryo-preserved for on demand use.
The global market for surgical and pharmacological interventions for patients with osteo-arthritis is estimated to exceed
$200 billion per year. It is estimated that by the year 2020 there will be 30 million osteoarthritis sufferers globally, so a suitable
supply of therapeutic cells for use in cartilage regeneration could potentially address a very large market.
CHND-1 cells are hESC-derived human cartilage cells. Sourced from large GMP cell banks, they can be potentially
produced in large multi-dose production lots, quality controlled and cryo-preserved for shipping and storage to achieve the “offthe-shelf” product description. The animal studies demonstrate that CHND-1 forms stratified hyaline cartilage in vivo , a result
unprecedented in the history of attempts to achieve cartilage repair. Alternative sources of repair cartilage such as the Cartacell
product of Sanofi-Aventis, or mesenchymal stem cells produced by multiple companies, form a wide variety of cartilage types ranging
from hyaline-like cartilage to fibro cartilage, depending upon the donor, and are insufficient for long-term stable cartilage repair. The
differentiation process developed for CHND-1 produces human cartilage forming cells that express the appropriate chondrocyte genes,
including SOX9, COL2A1, COL9A1, and ACAN with embryonic stem cell markers undetectable in the final preparation. The
chondrocytes produced by this methodology have been highly characterized and produce in vitro the appropriate markers of
articular cartilage.
41
The cells have been tested in two animal models of osteoarthritis, in which a trochlear groove defect is made in the knee of
immune-competent rats into which a single injection of CHND-1 is implanted as a micro-mass into the articular defect without
immune suppression. The injected CHND-1 cells produced essentially normal human cartilage out to 9 months after a single
injection. The layering and morphometry of the regenerated cartilage was nearly indistinguishable from normal human cartilage and
completely repaired the articular defect in the animal without immune-suppression. CHND-1 cells have also been tested in a large
sheep animal model of osteoarthritis in which an 8 millimeter defect was surgically created in the animal’s knee and CHND-1 cells
were implanted in the injured site under a nylon membrane. As in the rodent studies, no immune suppression was required. Defect
repair was evident even after only 21 days in vivo in the sheep model as articular cartilage and repaired sub-chondral bone was
clearly evident. At 90 days, there was also evidence of cartilage repair, although in many animal portions of the graft were lost due to
the malfunction of the nylon mesh supports. Further optimization will be required to enable full thickness, long term chondrocyte
regeneration in this large animal, weight bearing joint model. The next steps for CHND-1 product development would be to improve
the surgical delivery and retention in the large weight bearing sheep model, and to continue scale-up and process optimization to
enable the generation of animal data sufficient for IND submission, and possibly leading to a Phase 1 clinical trial in patients with
osteoarthritis.
VAC-1 and VAC-2, Technology For Potential New Cancer Vaccines
We will acquire from Geron two experimental therapeutic cancer vaccines designed to target cancer cells by targeting the
cancer cell’s expression of telomerase. Telomerase is a ubiquitous cancer target, expressed at high levels in all human cancers but at
very low levels or not at all, in normal human cells. The premise underlying these vaccines is to “teach” the patient’s own immune
system to attack cancer cells while sparing other cells. This may done by repeatedly exposing the immune system to a substance (an
antigen) that is either specifically expressed or over-expressed by cancer cells in a way that subsequently induces an immune response
to any cells that express that antigen on their surface. We believe that the characteristics of telomerase make it an ideal antigen for
cancer vaccines.
Telomerase Therapeutic Vaccine (VAC1)
We will acquire from Geron rights to its immunological cancer therapy product VAC1, including the IND for clinical trials
conducted by Geron and the related drug master files. VAC1 is an autologous product consisting of mature antigen-presenting
dendritic cells pulsed with RNA for the protein component of human telomerase (“hTERT”) and a portion of a lysosomal targeting
signal (“LAMP)”. VAC1 is injected into the patient’s skin; and from there the dendritic cells travel to the lymph nodes and instruct
cytotoxic T-cells to kill tumor cells that express telomerase on their surface.
A Geron-sponsored Phase I/II clinical trial of VAC1 was conducted at six U.S. medical centers in patients with acute
myelogenous leukemia (“AML”) in complete clinical remission. The trial examined the safety and feasibility of a prime-boost
vaccination regimen to generate and extend the duration of telomerase immunity. Geron evaluated the immune response to VAC1 and
explored the effects of vaccination on minimal residual disease and relapse rates. This trial completed patient enrollment in December
2009.
42
In the Phase I/II clinical trial, patients with AML entered the study in their first or second complete remission. Prior to or
shortly after completing consolidation chemotherapy, patients underwent leukapheresis to harvest normal peripheral blood
mononuclear (white blood) cells for vaccine manufacture. VAC1 was produced at a centralized manufacturing facility from the
patient-specific leukapheresis harvests. Patient mononuclear cells were differentiated in culture to immature dendritic cells, which
were transfected with messenger RNA encoding hTERT and LAMP. Transfected dendritic cells were matured, aliquoted and
cryopreserved. VAC1 was released for patient dosing contingent on several product specifications that included identity of mature
dendritic cells, confirmation of positive transfection with hTERT, number of viable cells per dose after thawing, and product sterility.
VAC1 was successfully manufactured and released in 21 out of the 31 patients enrolled in the study. These results reflect
the variability of patient derived starting material that is often associated with an autologous, patient-specific product.
Patients were vaccinated weekly for six weeks with VAC1 administered intra-dermally, followed by a non-treatment period
of four weeks, and then subsequent boost injections every other week for 12 weeks. Monthly extended boost injections were then
administered until the vaccine product supply was depleted or the patient relapsed.
Twenty-one patients received VAC1 in the study, including 19 in clinical remission and two in early relapse. Of the 19
patients in clinical remission, eight were considered at intermediate risk for relapse and eleven were at high risk for relapse as
predicted by their cytogenetics, FAB type, or because they were in second clinical remission. Thirteen out of 21 patients in the trial
remained in clinical remission at a median duration of follow-up from first vaccination of 13.2 months. At 12 months after
vaccination with VAC1, estimated disease-free survival was 81% for patients at high-risk of relapse (95% CI: 42-95%). Previously
published data on this patient population suggests that approximately 45% of patients would normally remain free from relapse at this
stage. VAC1 was found to be safe and well tolerated in this study over multiple vaccinations, with up to 32 serial vaccinations
administered (median = 17). Idiopathic thrombocytopenic purpura (grade 3-4) was reported in one patient. Other toxicities (grade
1-2) included rash or headache. These data from the Phase I/II trial were presented at the December 2010 American Society of
Hematology annual meeting.
Expression of WT-1, a marker of minimal residual disease, was sequentially analyzed by qPCR in 21 patients. The 13
patients who remain in clinical remission remain negative for WT-1, while six of seven with clinical relapse were WT-1 positive. One
patient was positive for WT-1 prior to vaccination with VAC1 and became WT-1 negative during the course of vaccination. This
patient relapsed after 30 months.
Patient immune response to telomerase after vaccination with VAC1 was evaluated using the ELISPOT assay to measure the
presence of activated T-cells specific to hTERT. Positive immune responses were detected in 55% of patients.
43
Early Study of VAC-1 in Prostate Cancer
A prior clinical study using VAC-1 in metastatic hormone refectory prostate cancer was published in the Journal of Immunology in
2005. Telomerase – loaded autologous monocyte-derived dendritic cells were administered to 20 patients with metastatic prostate
cancer. Treatment was well tolerated with no significant adverse reactions. In 19 of 20 subjects, telomerase specific T lymphocytes
were generated in the peripheral blood after vaccination. Vaccination was associated with a reduction of prostate-specific antigen
velocity (a measure of disease progression), although no clinical responses were observed in this preliminary study. This study
provided the rationale for the Phase I/II trial in AML described above.
VAC2: hESC-Derived Dendritic Cells
Dendritic cells can be likened to the quarterback of the immune system. They are antigen processing and presenting cells
which are potent initiators of a cellular hormonal immune response. Immature dendritic cells initiate an antigen specific suppressive
response, such as would be required to terminate an abnormal autoimmune reaction as occurs in diseases like rheumatoid arthritis, and
systemic lupus erythematosis. Mature dendritic cells, on the other hand, initiate active cellular and humeral immunity such as is
required for immune targeting cancer and infectious disease. VAC-2 is a dendritic cell population that is produced from human
embryonic stem cells that can be modified with any antigen. VAC-2 can be produced in the form of immature dendritic cells for
antigen specific immune suppressive therapies, or in mature form to generate antigen restricted cytotoxic responses. There is a
significant amount of global clinical literature that describes the use of dendritic cells isolated from peripheral blood samples and used
in various vaccination schemes, especially in various cancers (see VAC-1, above). Although effective in generating an antigen
specific immune response, and in several cases showing a significant clinical impact, the drawbacks of autologous peripheral
blood-derived dendritic cell vaccination schemes are the limited supply of cells, the high cost of production, the long production time,
and high patient to patient variability. VAC-2 is designed to specifically obviate theses drawbacks. VAC-2 can be produced in
limitless quantities, just like the other hESC-based therapeutic cells. Additionally, because VAC-2 is an allogeneic cell, it is believed
to be potentially more potent than an autologous dendritic cell, by means of partial antigen mismatch in the HLA system.
Quality control can be standardized and the product can be shown to have uniform potency. Cost of goods is dramatically
lower than autologous approaches, and the multi-dose batch production and cryo-preservation enables “on-demand” availability. It is
generally agreed that partial HLA matching between dendritic cell and patient will be required to optimize efficacy and reduce side
effects. The H-1 hESC line, qualified for human use by Geron, alone can provide a single HLA match on HLA-A2 for approximately
47% of North American Caucasians. Dendritic cells manufactured from one additional hESC line will capture approximately 70% of
North American Caucasians. The feasibility of VAC-2 differentiation from multiple hESC lines has been demonstrated.
The differentiation process for VAC-2 has been optimized; the protocol is patent protected and clinically compliant; and no
serum or animal feeder cells are used. The production protocol is robust, achieving fully matured dendritic cells within 30 days with
reliable process controls. The differentiation protocol is scalable to flasks in the near-term and suspended micro-beads in bioreactors
in the medium-term. Four growth factors are used to drive hESC differentiation to dendritic cells, and they are serially removed
during the process: VEGF, SCF, BMP-4 and GMCSF. The hESC-derived dendritic cells can be irradiated, which may shorten the
animal studies required for IND submission, because irradiation prevents cell division of the injected VAC-2 dendritic cells,
potentially eliminating concerns of growth of non-dendritic cells in the product. Lastly, cryo-preservation in low concentration of
DMSO is feasible, thereby potentially enabling direct thaw and injection in the clinic.
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VAC-2 cells have been extensive characterized in vitro; they have high migratory and antigen presenting functionality with
limited phagocytic activity, as would be expected for mature dendritic cells. They express high levels of all the appropriate surface
markers defining them as mature human dendritic cells. VAC-2 cells are phenotypically similar to dendritic cells derived from
peripheral blood mononuclear cells, further enabling them to be potentially used in lieu of peripheral blood derived dendritic cell
vaccination protocols. VAC-2 and peripheral blood monocyte derived dendritic cells produce similar cytokine profiles before and
after antigen stimulation. VAC-2 has been shown to demonstrate functionality in chemotactic responses and T-cell
stimulation. VAC-2 in-vitro stimulates a TH-1 type cytokine production from lymphocytes in a mixed lymphocyte reaction in
vitro resulting in highly activated antigen restricted T-cell populations. In vitro studies have demonstrated that a single HLA
match between VAC-2 cells and responding lymphocytes is required to stimulate antigen specific T-cell responses. VAC-2 has been
shown to retain antigen presentation functionally after cryo-preservation. Irradiation of VAC-2 after introduction of antigen
eliminates the proliferative capacity of the dendritic cells and removes any safety concerns due to the presence of any residual
undifferentiated embryonic stem cells in the preparation. Irradiated and cryo-preserved VAC-2 cells are fully capable of presenting
antigen to T-cells, resulting in antigen specific T-cell activation.
A clinical protocol for the potentially first-in-man safety study of VAC-2 has been outlined for prostate cancer, although
other tumor targets, such as malignant melanoma, are possible. Telomerase, a ubiquitous tumor antigen, would be the first antigen to
be used with VAC-2. Approximately 15-20 prostate cancer patients who have developed a biochemical (PSA) relapse after either
local radical treatment or adjuvant hormonal therapy would be eligible to participate in the trial. Patients would initially be restricted
to HLA-A 2.1 and would receive 6 vaccinations at two different doses (1 x 10 6 and 1 x 10 7 ) at weeks 0, 1, 2, 3, 4, 8 and 16.
The route of the administration would be intradermal. The primary endpoint would be to investigate the safety and toxicity
of VAC-2, with secondary endpoints of immune response to the telomerase antigen introduced into VAC-2. The clinical and
immunological monitoring would be achieved with standard immune test such as ELISPOT and tetramer analysis. Clinical responses
in prostate cancer patients would be monitored by PSA levels, progression-free survival, and overall survival.
In summary, VAC-2 has been demonstrated to exhibit a mature dendritic cell phenotype of reproducibly characterized
cellular composition. The cells activate allogenic T-cells and migrate in response to chemokine stimulation. VAC-2 stimulates a
TH-1 type cytokine production and can present antigen delivered to the cells in either mRNA, or protein form. VAC-2 can stimulate
Class 1 and Class 2 antigen specific T-cells and has been shown to prime and stimulate naïve antigen restricted T-cells even with only
a single MHC-antigen match. Lastly, the feasibility of cryo-presentation and irradiation without alteration of VAC-2 function has
been demonstrated. These attributes will potentially allow for a greater margin of safety in clinical studies utilizing VAC-2 and
reduce the number of additional preclinical studies required for an IND submission. Specifically, long-term cell survival and
engraftment studies will potentially not be required for a VAC-2 IND submission.
Manufacturing and Process Development Technologies
The GMP banks of undifferentiated hES cells that we will acquire from Geron have been well characterized and
validated. Both the H1 and H7 hES cell lines were routinely expanded under either cGMP (H1) or pilot (H7) conditions at Geron’s
manufacturing facility. No limit to the expandability of hES cell lines has been observed. Geron’s GMP cell banks of
undifferentiated human embryonic stem cells have been qualified for human biologics production per FDA guidelines. They are free
of a long list of potential contaminants or adventious agents of human or animal origin. They exhibit normal G-banding karyotype
and are considered suitable for the production of biologics for human clinical use. All of the therapeutic cells are manufactured
according to a shared and standardized three stage procedure. Stage 1 is the expansion of the undifferentiated human embryonic stem
cells, currently performed in standard cell culture vessels coated with extracellular matrix. Stage 2 is the product specific
differentiation step in which various factors are added sequentially to drive the differentiation of the human embryonic stem cell down
a desired and specific differentiation lineage. Stage 3 is the harvest, formulation, fill and finish stage in which the differentiated cells
are aliquoted and stored frozen in the vapor phase of liquid nitrogen tanks indefinitely. Sensitive assays have been developed to detect
the presence of contaminating undifferentiated human embryonic stem cells in the various product formulations. An assay for
contaminating undifferentiated hESCs has been developed with a lower limit of quantitation of less than 0.002%, a sensitivity suitable
to detect less that 2,000 undifferentiated human embryonic stem cell in a dose of 10 8 CM-1 cells.
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A bead based immune depletion system has been developed and validated, potentially suitable for scaled cGMP depletion of
unwanted cells from any of the hESC-based product candidates. Using this system, appropriate degrees of depletion have been
generated at cGMP scale for both OPC-1 and CM-1 products at up to 2 x 10 9 and 1 x 10 10 cell scale, respectively. The immune
bead depletion technology has been applied to the purification of OPC-1 calls and has been shown to significantly deplete unwanted
cells associated with in vivo cyst formation. Depleted OPC-1 cells that had failed release specification due to cyst forming cellular
contaminants showed a marked reduction in animals with cyst formation after injection.
Under its collaboration and license agreement with Corning Life Sciences, which will be assigned to us in the Asset
Contribution, Geron had developed a synthetic surface which enables the growth and expansion of undifferentiated human embryonic
stem cells. This surface has been formatted into sterile flasks and has been marked under the trade name Synthemax™. These
synthetic surfaces support the expansion of undifferentiated hES cells, their differentiation into cardiomyocytes, dendritic cells and
oligodendrocytes, and support both H1 and H7 hES cell line growth with doubling times and marker expression equivalent to those
exhibited when grown on standard extracellular matrix.
Production scale-up of hES cell-derived cell therapy products will require a transition from two dimensional surfaces to
three dimensional bioreactors. This has been reduced to practice by the use of micro-carriers that have been used with the GE Wave
Bag culture system to produce undifferentiated hES cell expansion as well as differentiation into CM-1 cells. The micro-carrier
suspension technology is also compatible with the Corning Synthemax™ platform. Quantitative manufacturing modeling has been
applied to predict that over 6 x 10 14 cells, a quantity of CM-1 sufficient to treat over 850,000 patients per year could be produced in
10 manufacturing runs each requiring a bioreactor with a capacity of 2,400 liters. These requirements are well within the constraints
of existing classical biologics manufacturing capabilities present world-wide.
Technology for the Growth and Differentiation of Cells
Geron will assign to us an agreement with Corning Life Sciences, a division of Corning Incorporated, through which Geron
and Corning Life Sciences worked together to develop synthetic growth surfaces to replace the biological surface coatings that are
widely used today to grow hES cells. A synthetic peptide surface known as Synthemax™ has been developed that can be
manufactured into multiple culture vessel formats and directly supports the growth and differentiation of hES cells. Data on hES cell
culture and differentiation were presented by Corning at the 2009 World Stem Cell Summit and published in the June 2010 issue of
Nature Biotechnology showing robust hES cell growth and differentiation on the Synthemax™ surface.
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Cells Derived from hES Cells for Drug Discovery, Development and Toxicology
Geron will assign to us its royalty bearing world-wide, exclusive license and alliance agreement with GE Healthcare UK
Limited (GE Healthcare) to develop and commercialize cellular assay products derived from hES cells for use in drug discovery,
development, and toxicity screening.
That agreement includes an exclusive license grant to GE Healthcare to use hES cell patents and know-how to
commercialize hES-derived cell types for drug discovery applications. GE Healthcare is focusing its initial product development
efforts on hepatocytes and cardiomyocytes. GE Healthcare will pay royalties on sales of products developed using the licensed
patents or know-how, or using new technology developed under the agreement, and additional milestone payments upon the
attainment of certain product sales levels.
When the agreement is assigned to us, we will receive a non-exclusive, royalty-free license to use certain technology
developed by GE Healthcare under the agreement for the purpose of developing therapeutic products. We will agree to indemnify GE
Healthcare for personal injury and product liabilities arising from our use of patents or other technology licensed to use by GE
Healthcare under the agreement.
The agreement will terminate upon the expiration of all valid claims under licensed patents. GE Healthcare may terminate
the agreement on 90 days’ notice. Either party can terminate the agreement on 90 days’ notice for breach of the agreement by other
party if the breach is not cured during that period, subject to tolling for resolution of any dispute through arbitration. The agreement
may also be terminated by either party upon the commencement of bankruptcy reorganization, liquidation or receivership proceedings
by the other party, or an assignment of a substantial portion of assets of the other party for benefit of creditors.
Using cell types derived from hES cells in drug discovery testing may have important advantages over the use of animal
models and other testing methods. It is not uncommon for the development of a drug to be halted during clinical trials because animal
systems did not predict the drug’s metabolism or toxicity in humans. In contrast, fully functional cells manufactured in bulk from hES
cells could be a reliable, uniform and predictive new tool for pharmaceutical companies to perform in vitro metabolism,
biodistribution, drug-drug interaction and toxicity testing of drug development candidates. The earlier in development that a drug
candidate compound is found to have undesirable characteristics, the faster these characteristics can be potentially corrected which
translates into reduced costs and time in drug development, and less harmful patient exposure in clinical trials.
The first product developed under the agreement, human cardiomyocytes derived from hES cells, Cyteva ® was launched in
October 2010. Cardiomyocytes derived from hES cells exhibit normal electrophysiological function of human ventricular myocytes
and respond appropriately when exposed to cardiac drugs, including drugs that block hERG channels. Robust sodium and calcium
currents with the expected pharmacological responses are present and well-suited for screening assays. These cells could be used for
direct testing of drug effects on cells that exhibit the electrophysiology of human cardiomyocytes, in lieu of using animal models or
artificial cell systems.
Data published by scientists from ChanTest Corporation in the May-June, 2010 issue of the Journal of Pharmacological and
Toxicological Methods showed that Geron’s cardiomyocytes derived from hES cells display electrophysiological properties of
normal human cardiomyocytes and contain the key voltage-gated ion channels operating in a normal cellular
background. Perforated-patch, current clamp recording studies using known reference compounds showed that the hES cell derived
cardiomyocytes demonstrate an overall pharmacological sensitivity that is superior to conventional rabbit or canine purkinje fiber
assays. ChanTest Corporation is a leading provider of ion channel screening services.
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Another cellular assay product to be developed under the Geron-GE Healthcare alliance is human hepatocytes derived from
hES cells. hES cell derived hepatocytes show a number of metabolic functions of human hepatocytes, including expression of
members of the cytochrome P450 family of enzymes, which are responsible for drug metabolism.
hES Cell Differentiation Patents Sublicensed by BioTime
We will acquire from BioTime a non-exclusive, world-wide, royalty-free sublicense to use certain hES differentiation
patents owned by BioTime’s subsidiary ESI. The ESI patents cover methods of modulating the differentiation of hES cells by
inhibiting the spontaneous differentiation of hES cells in culture. The technology will be useful in maintaining and expanding
populations of undifferentiated hES cells in culture which can then be used in directed differentiation protocols to obtain cells for
potential therapeutic use.
cGMP hES Cell Lines Provided by BioTime
BioTime has developed research and clinical grade hES cell lines that it markets for both basic research and therapeutic
product development. BioTime will provide us with ampules of five hES cell lines produced by ESI under cGMP. These hES cell
lines are among the best characterized and documented cell lines available today, including documented genomic sequences. These
hES cell lines are included in the Stem Cell Registry of the National Institutes of Health, making them eligible for use in federally
funded research. These lines may be used as alternative starting material for producing some of the hES derived cell types acquired
from Geron.
Patents and Trade Secrets
The patent portfolio that we will acquire from Geron through the Asset Contribution Agreement includes over 400 patents
and patent applications owned or licensed to Geron relating to human hES cell-based product opportunities. This portfolio consists
primarily of patents and patent applications owned by Geron, and also include patent families exclusively licensed to Geron by the
third parties.
The patent portfolio includes patents and patent applications covering a number of cell types that can be made from hES
cells, including hepatocytes (liver cells), cardiomyocytes (heart muscle cells), neural cells (nerve cells, including dopaminergic
neurons and oligodendrocytes), chondrocytes (cartilage cells), pancreatic islet ß cells, osteoblasts (bone cells), hematopoietic cells
(blood-forming cells) and dendritic cells. Also included in the patent portfolio are technologies for growing hES cells without the
need for cell feeder layers, and novel synthetic growth surfaces.
Patent Expiration Dates
The patents we will acquire from Geron and that will be licensed to us by assignment of third party licenses expire at various
times.
Oligodendrocyte progenitor cells: The patent rights relevant to oligodendrocyte progenitor cells include rights licensed from
the University of California and various Geron-owned patent families covering the growth of hES cells and their differentiation into
neural cells. The expiration dates on these patents range from 2023 to 2030.
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Cardiomyocytes: The patent rights relevant to cardiomyocytes include various Geron-owned patent families covering the
growth of hES cells and their differentiation into cardiomyocytes. The expiration dates on these patents range from 2022 to 2031.
Pancreatic islet cells: The patent rights relevant to pancreatic islet cells include various Geron-owned patent families
covering the growth of hES cells and their differentiation into pancreatic islet cells. The expiration dates on these patents are in 2022.
Dendritic cell: The patent rights relevant to dendritic cells include rights licensed from the University of Oxford and the
Robarts Research Institute of the University of Western Ontario, and various Geron-owned patent families covering the growth of hES
cells and their differentiation into dendritic cells. The expiration dates on these patents range from 2021 to 2029.
GE Healthcare Product Candidates: Geron will assign to us an agreement with GE Healthcare UK Limited (GE Healthcare)
to develop and commercialize cellular assay products derived from hES cells for use in drug discovery, development and toxicity
screening. That agreement includes a license grant to GE Healthcare to use our hES cell patents to commercialize hES-derived cell
types for drug discovery applications. GE Healthcare is focusing its initial product development efforts on hepatocytes and
cardiomyocytes. The patents on these particular cell types expire in the ranges of 2020 to 2023 and 2025 to 2026, respectively.
ViaCyte Patent Interference Proceedings
At the closing of the Asset Contribution, we will be substituted for Geron as a party in interest in an appeal filed by Geron in
the United States District Court for the Northern District of California, appealing two adverse rulings in favor of ViaCyte, Inc. by the
United States Patent and Trademark Office’s Board of Patent Appeals and Interferences. These rulings related to interference
proceedings involving patent filings relating to definitive endoderm cells. Geron had requested that the Board of Patent Appeals and
Interferences declare this interference after ViaCyte was granted patent claims that conflicted with subject matter Geron filed in a
patent application having an earlier priority date. Those Geron patent applications are among the patent assets that Geron will
contribute to us. We will also assume the PTO interferences upon which the appeal is based, as well as certain oppositions filed by
Geron against certain ViaCyte patent filings in Australia and in the European Patent Office. We will assume all liabilities relating to
the ViaCyte Appeal and the related interference proceedings, including the costs of litigation, other than expenses incurred by Geron
prior to the closing of the Asset Contribution.
The appeals proceeding is still in the discovery phase. Appeals of this nature may involve costly and time-consuming legal
proceedings and if we are not successful in the appeal, these rulings may prevent or limit development of product candidates in certain
fields such as diabetes treatment, and we may be unable to realize value from the patent applications at issue in the appeal.
General Risks Related to Obtaining and Enforcing Patent Protection
Our patents and patent applications are directed to compositions of matter, formulations, methods of use and/or methods of
manufacturing, as appropriate. The patent positions of pharmaceutical and biotechnology companies, including ours, are generally
uncertain and involve complex legal and factual questions. Our business could be negatively impacted by any of the following:

the claims of any patents that are issued may not provide meaningful protection, may not provide a basis for
commercially viable products or may not provide us with any competitive advantages;
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
our patents may be challenged by third parties;

others may have patents that relate to our technology or business that may prevent us from marketing our product
candidates unless we are able to obtain a license to those patents;

the pending patent applications to which we have rights may not result in issued patents;

we may not be successful in developing additional proprietary technologies that are patentable
In addition, others may independently develop similar or alternative technologies, duplicate any of our technologies and, if
patents are licensed or issued to us, design around the patented technologies licensed to or developed by us. Moreover, we could incur
substantial costs in litigation if we have to defend ourselves in patent lawsuits brought by third parties or if we initiate such lawsuits
In Europe, the European Patent Convention prohibits the granting of European patents for inventions that concern "uses of
human embryos for industrial or commercial purposes." The European Patent Office is presently interpreting this prohibition broadly,
and is applying it to reject patent claims that pertain to hES cells. However, this broad interpretation is being challenged through the
European Patent Office appeals system. As a result, we do not yet know whether or to what extent we will be able to obtain patent
protection for our hES cell technologies in Europe.
There is a risk that any patent applications that we file and any patents that we hold or later obtain could be challenged by
third parties and be declared invalid or infringing on third party claims. A patent interference proceeding may be instituted with the
PTO when more than one person files a patent application covering the same technology, or if someone wishes to challenge the
validity of an issued patent on patents and applications filed before March 16, 2013. At the completion of the interference proceeding,
the PTO will determine which competing applicant is entitled to the patent, or whether an issued patent is valid. Patent interference
proceedings are complex, highly contested legal proceedings, and the PTO’s decision is subject to appeal. This means that if an
interference proceeding arises with respect to any of our patent applications, we may experience significant expenses and delay in
obtaining a patent, and if the outcome of the proceeding is unfavorable to us, the patent could be issued to a competitor rather than to
us. For patents and applications filed after March 16, 2013 a derivation proceeding may be initiated where the PTO may determine if
one patent was derived from the work of an inventor on another patent. In addition to interference proceedings, the PTO can
re-examine issued patents at the request of a third party seeking to have the patent invalidated. After March 16, 2013 an inter partes
review proceeding will allow third parties to challenge the validity of an issued patent where there is a reasonable likelihood of
invalidity. This means that patents owned or licensed by us may be subject to re-examination and may be lost if the outcome of the
re-examination is unfavorable to us. This means that patents owned or licensed by us may be subject to re-examination and may be
lost if the outcome of the re-examination is unfavorable to us.
Post Grant Review under the new America Invents Act now makes available opposition-like proceedings in the United
States. As with the PTO interference proceedings, Post Grant Review proceedings will be very expensive to contest and can result in
significant delays in obtaining patent protection or can result in a denial of a patent application. Also, a derivation proceeding may be
instituted by the PTO or an inventor alleging that a patent or application was derived from the work of another inventor.
Oppositions to the issuance of patents may be filed under European patent law and the patent laws of certain other
countries. As with the PTO interference proceedings, these foreign proceedings can be very expensive to contest and can result in
significant delays in obtaining a patent or can result in a denial of a patent application.
The enforcement of patent rights often requires litigation against third-party infringers, and such litigation can be costly to
pursue. Even if we succeed in having new patents issued or in defending any challenge to issued patents, there is no assurance that
our patents will be comprehensive enough to provide us with meaningful patent protection against our competitors.
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In addition to relying on patents, we rely on trade secrets, know-how, and continuing technological advancement to maintain
our competitive position. We will enter into intellectual property, invention, and non-disclosure agreements with our employees, and
it will be our practice to enter into confidentiality agreements with our consultants. There can be no assurance, however, that these
measures will prevent the unauthorized disclosure or use of our trade secrets and know-how, or that others may not independently
develop similar trade secrets and know-how or obtain access to our trade secrets, know-how, or proprietary technology.
Licensed Stem Cell Technology and Stem Cell Product Development Agreements
Telomerase Sublicense
We will receive the Telomerase Sublicense from Geron upon the closing of the Asset Contribution. The Telomerase
Sublicense will grant us an exclusive sublicense of certain patents owned by the University of Colorado; University License Equity
Holdings, Inc. relating to telomerase and will entitle us to use the patents in the development of VAC1 and VAC2 as immunological
treatments for cancer. Under the Telomerase Sublicense, we will pay Geron an up-front license fee, small annual license maintenance
fee, and a small percentage royalty on sales of any products that we may develop and commercialize using the sublicensed
patents. The Telomerase Sublicense will expire concurrently with the expiration of Geron’s license. That license will terminate
during April 2017 when the licensed patents expire. The Telomerase Sublicense may also be terminated by us by giving Geron 90
days written notice, by us or by Geron if the other party breaches its obligations under the sublicense agreement and fails to cure their
breach within the prescribed time period, or by us or by Geron upon the filing or institution of bankruptcy, reorganization, liquidation
or receivership proceedings, or upon an assignment of a substantial portion of the assets for the benefit of creditors by the other party.
We will agree to indemnify Geron, Geron’s licensor, and certain other parties for certain liabilities, including those for
personal injury, product liability, or property damage relating to or arising from the manufacture, use, promotion or sale of a product,
or the use by any person of a product made, created, sold or otherwise transferred by us or our sublicensees.
Corning Agreement
Geron will assign to us its Collaboration and License Agreement with Corning Life Sciences, a division of Corning
Incorporated, to produce vessels or other growth surfaces incorporating a chemically synthesized matrix for the growth of mammalian
cells. Corning received a license from Geron to use certain patents for pluripotent stem cell growth for research purposes under the
agreement, and a right of first refusal to negotiate a license for products developed under the agreement. When the agreement is
assigned to us, we will be entitled to receive royalties on the sale of products developed under the agreement, and we will have a right
to purchase products developed under the agreement at preferred pricing levels.
The parties will indemnify each other from certain liabilities, including those arising from the use of any inventions or
materials derived from any inventions under the agreement by the indemnifying party or its sublicensees.
The agreement will expire upon the expiration of the royalty payment term or 10 years after the first commercial sale,
whichever is longer. The royalty payment term will expire upon the expiration of the last patent covering a product developed under
the agreement. We may terminate the agreement upon 60 days notice upon a breach by Corning if the breach is not cured within that
sixty day period. Either party can terminate the agreement in the event of the bankruptcy, arrangement with creditors, or liquation of
all or substantially all business relating the agreement by the other party.
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Royalty Agreement with Geron
At the closing of the Asset Contribution, we will enter into a Royalty Agreement with Geron pursuant to which we will
agree to pay Geron a 4% royalty on net sales (as defined in the Royalty Agreement), by us or any of our affiliates or sales agents, of
any products that are developed and commercialized in reliance upon the patents contributed by Geron to us. In the case of sales of
such products by a person other than us or one of our affiliates or sales agents, we will be required to pay Geron 50% of all royalties
and cash payments received by us or by our affiliate in respect of a product sale. Royalty payments will be subject to proration in the
event that a product covered by a patent acquired by Geron is sold in combination with another product that is not covered by a Geron
patent.
Share Ownership in OrthoCyte Corporation and Cell Cure Neurosciences Ltd.
Through the Asset Contribution, BioTime will transfer to us a portion of their share ownership in two subsidiaries,
OrthoCyte Corporation and Cell Cure Neurosciences, Ltd. We will receive 10% of the shares of OrthoCyte and 6% of the ordinary
shares of Cell Cure Neurosciences outstanding as of January 4, 2013.
OrthoCyte Corporation
OrthoCyte was organized in October 2010 and is developing cellular therapies to treat orthopedic disorders, diseases and
injuries. Its lead products are human embryonic progenitor cell (“hEPC”) lines for cartilage repair. OrthoCyte has identified several
progenitor cell lines that display chondrogenic (cartilage-producing) potential. These lines are currently in the pre-clinical testing
phase to optimize effective cartilage repair.
As the population ages, osteoarthritis and spinal disc degeneration have a significant impact on mobility and health and
current non-surgical treatments tend to target the reduction of pain and inflammation as opposed to repairing tissue deficits. To date,
the development of cell-based therapeutics to treat damaged cartilage has met with mixed success. Autologous chondrocytes have
been tested as a means to provide cartilage-producing cells but this approach is hampered by a multi-step process that first requires
harvesting of chondrocytes from donor tissues, followed by in vitro culture expansion of the harvested cells. Primary chondrocytes
have very limited capacity for in vitro expansion and will typically lose their biological characteristics within a short period of in
vitro culture. Mesenchymal stem cells have been tested extensively as a source of cellular therapeutics for cartilage treatment but
have met with very limited success, possibly as a result of their propensity to differentiate further into bone.
In a recently published study, OrthoCyte scientists, working in collaboration with scientists from BioTime’s subsidiary
LifeMap Sciences, Inc., demonstrated that certain hEPC lines, derived using BioTime’s PureStem™ technology, are progenitors to
diverse skeletal tissues of the human body. These cell lines bear diverse molecular markers that distinguish them from each other and
from mesenchymal stem cells. The molecular markers of these cell lines suggest the lines may therefore be applicable to the repair of
different types of bone, cartilage, and tendon for the treatment of degenerative diseases afflicting these tissue types such as
non-healing bone fractures, osteoarthritis and degeneration of intervertebral discs, and tendon tears (tendinosis).
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Cell Cure Neurosciences, Inc.
Cell Cure Neurosciences is an Israel-based biotechnology company focused on developing stem cell-based therapies for
retinal and neurological disorders, including the development of retinal pigment epithelial cells for the treatment of macular
degeneration, and treatments for multiple sclerosis. Cell Cure Neurosciences’ lead product is OpRegen,™ a proprietary formulation
of embryonic stem cell-derived retinal pigmented epithelial (RPE) cells developed to address the high, unmet medical needs of people
suffering from age-related macular degeneration (dry AMD).
AMD is the leading cause of blindness and visual impairment in the aging population, and 30% of Americans aged 75 and
older have some form of AMD. The U.S. Centers for Disease Control and Prevention estimate that about 1.8 million people in the
United States have advanced stage AMD and another 7.3 million have an earlier stage and are at risk of vision impairment from the
disease. Most people are afflicted with the dry form of AMD, for which there is currently no effective treatment.
Manufacturing
We are subleasing from BioTime a 24,000 square-foot building in Menlo Park, California that was previously used by
Geron for research and development and manufacturing for its hES programs. The building is cGMP-capable laboratory space. We
will acquire cell culture and other manufacturing equipment that will need to be revalidated in order to produce products for clinical
trials or for sale after obtaining FDA or foreign regulatory approval to market a therapeutic product. We will not need to manufacture
products under cGMP for use in laboratory research.
Marketing
Because our planned products are still in the research and development stage, we will not initially need to have our own
marketing personnel. If we are successful in developing marketable products we will need to build our own marketing and
distribution capability for our products, which would require the investment of significant financial and management resources, or we
will need to find collaborative marketing partners, independent sales representatives, or wholesale distributors for the commercial sale
of those products.
If we market products through arrangements with third parties, we may pay sales commissions to sales representatives or we
may sell or consign products to distributors at wholesale prices. This means that our gross profit from product sales may be less than
would be the case if we were to sell our products directly to end users at retail prices through our own sales force. On the other hand,
selling to distributors or through independent sales representatives would allow us to avoid the cost of hiring and training our own
sales employees. There can be no assurance we will be able to negotiate distribution or sales agreements with third parties on
favorable terms to justify our investment in our products or achieve sufficient revenues to support our operations.
Competition
We face substantial competition in our business, and that competition is likely to intensify further as new products and
technologies reach the market. Superior new products are likely to sell for higher prices and generate higher profit margins once
acceptance by the medical community is achieved. Those companies that are successful in introducing new products and technologies
to the market first may gain significant economic advantages over their competitors in the establishment of a customer base and track
record for the performance of their products and technologies. Such companies will also benefit from revenues from sales that could
be used to strengthen their research and development, production, and marketing resources. All companies engaged in the medical
products industry face the risk of obsolescence of their products and technologies as more advanced or cost effective products and
technologies are developed by their competitors. As the industry matures, companies will compete based upon the performance and
cost effectiveness of their products.
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The stem cell industry is characterized by rapidly evolving technology and intense competition. Our competitors include
major multinational pharmaceutical companies, specialty biotechnology companies, and chemical and medical products companies
operating in the fields of regenerative medicine, cell therapy, tissue engineering, and tissue regeneration. Many of these companies
are well-established and possess technical, research and development, financial, and sales and marketing resources significantly
greater than ours. In addition, certain smaller biotech companies have formed strategic collaborations, partnerships, and other types of
joint ventures with larger, well established industry competitors that afford these companies’ potential research and development and
commercialization advantages. Academic institutions, governmental agencies, and other public and private research organizations are
also conducting and financing research activities which may produce products directly competitive to those we are developing.
We believe that some of our competitors are trying to develop hES cell, iPS cell, and hEPC based technologies and products
that may compete with our potential stem cell products based on efficacy, safety, cost, and intellectual property positions.
We may also face competition from companies that have filed patent applications relating to the cloning or differentiation of
stem cells. We may be required to seek licenses from these competitors in order to commercialize certain of our proposed products,
and such licenses may not be granted. See “Technology—Viacyte Patent Interference Proceedings.”
Government Regulation
FDA and Foreign Regulation
The FDA and foreign regulatory authorities will regulate our proposed products as drugs, biologicals, or medical devices,
depending upon such factors as the use to which the product will be put, the chemical composition, and the interaction of the product
on the human body. In the United States, products that are intended to be introduced into the body, such as plasma volume expanders,
will be regulated as drugs, while tissues and cells intended for transplant into the human body will be regulated as biologicals, and
both plasma volume expanders and tissue and cell therapeutic products will be reviewed by the FDA staff responsible for evaluating
biologicals.
Our domestic human drug and biological products will be subject to rigorous FDA review and approval procedures. After
testing in animals, an Investigational New Drug Application (“IND”) must be filed with the FDA to obtain authorization for human
testing. Extensive clinical testing, which is generally done in three phases, must then be undertaken at a hospital or medical center to
demonstrate optimal use, safety, and efficacy of each product in humans. Each clinical study is conducted under the auspices of an
independent Institutional Review Board (“IRB”). The IRB will consider, among other things, ethical factors, the safety of human
subjects, and the possible liability of the institution. The time and expense required to perform this clinical testing can far exceed the
time and expense of the research and development initially required to create the product. No action can be taken to market any
therapeutic product in the United States until an appropriate New Drug Application (“NDA”) has been approved by the FDA. FDA
regulations also restrict the export of therapeutic products for clinical use prior to NDA approval.
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Even after initial FDA approval has been obtained, further studies may be required to provide additional data on safety or to
gain approval for the use of a product as a treatment for clinical indications other than those initially targeted. In addition, use of these
products during testing and after marketing could reveal side effects that could delay, impede, or prevent FDA marketing approval,
resulting in FDA-ordered product recall, or in FDA-imposed limitations on permissible uses.
The FDA regulates the manufacturing process of pharmaceutical products, and human tissue and cell products, requiring
that they be produced in compliance with cGMP. See “Manufacturing.” The FDA also regulates the content of advertisements used
to market pharmaceutical products. Generally, claims made in advertisements concerning the safety and efficacy of a product, or any
advantages of a product over another product, must be supported by clinical data filed as part of an NDA or an amendment to an
NDA, and statements regarding the use of a product must be consistent with the FDA approved labeling and dosage information for
that product.
Sales of pharmaceutical products outside the United States are subject to foreign regulatory requirements that vary widely
from country to country. Even if FDA approval has been obtained, approval of a product by comparable regulatory authorities of
foreign countries must be obtained prior to the commencement of marketing the product in those countries. The time required to
obtain such approval may be longer or shorter than that required for FDA approval.
Federal Funding of Research
The United States government and its agencies have until recently been prevented from funding research which involves the
use of human embryonic tissue. President Bush issued Executive Orders on August 9, 2001 and June 20, 2007 that permitted federal
funding of research on hES cells using only the limited number of hES cell lines that had already been created as of August 9,
2001. On March 9, 2009, President Obama issued an Executive Order rescinding President Bush’s August 9, 2001 and June 20, 2007
Executive Orders. President Obama’s Executive Order also instructed the National Institutes of Health to review existing guidance on
human stem cell research and to issue new guidance on the use of hES cells in federally funded research, consistent with President’s
new Executive Order and existing law. The NIH has adopted new guidelines that went into effect July 7, 2009. The central focus of
the new guidelines is to assure that hES cells used in federally funded research were derived from human embryos that were created
for reproductive purposes, were no longer needed for this purpose, and were voluntarily donated for research purposes with the
informed written consent of the donors. Those hES cells that were derived from embryos created for research purposes rather than
reproductive purposes, and other hES cells that were not derived in compliance with the guidelines, are not eligible for use in federally
funded research.
In addition to President Obama’s Executive Order, a bipartisan bill has been introduced in the United States Senate that
would allow Federal funding of hES cell research. The Senate bill is identical to one that was previously approved by both Houses of
Congress but vetoed by President Bush. The Senate Bill provides that hES cells will be eligible for use in research conducted or
supported by federal funding if the cells meet each of the following guidelines: (1) the stem cells were derived from human embryos
that have been donated from in vitro fertilization clinics, were created for the purposes of fertility treatment, and were in excess of the
clinical need of the individuals seeking such treatment; (2) prior to the consideration of embryo donation and through consultation
with the individuals seeking fertility treatment, it was determined that the embryos would never be implanted in a woman and would
otherwise be discarded, and (3) the individuals seeking fertility treatment donated the embryos with written informed consent and
without receiving any financial or other inducements to make the donation. The Senate Bill authorizes the NIH to adopt further
guidelines consistent with the legislation.
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California State Regulations
The state of California has adopted legislation and regulations that require institutions that conduct stem cell research to
notify, and in certain cases obtain approval from, a Stem Cell Research Oversight Committee (“SCRO Committee”) before conducting
the research. Advance notice, but not approval by the SCRO Committee, is required in the case of in vitro research that does not
derive new stem cell lines. Research that derives new stem cell lines, or that involves fertilized human oocytes or blastocysts, or that
involves clinical trials or the introduction of stem cells into humans, or that involves introducing stem cells into animals, requires
advanced approval by the SCRO Committee. Clinical trials may also entail approvals from an institutional review board (“IRB”) at
the medical center at which the study is conducted, and animal studies may require approval by an Institutional Animal Care and Use
Committee.
All human pluripotent stem cell lines that will be used in our research must be acceptably derived. To be acceptably
derived, the pluripotent stem cell line must have either:

Been listed on the National Institutes of Health Human Embryonic Stem Cell Registry, or

Been deposited in the United Kingdom Stem Cell Bank, or

Been derived by, or approved for use by, a licensee of the United Kingdom Human Fertilisation and Embryology
Authority, or

Been derived in accordance with the Canadian Institutes of Health Research Guidelines for Human Stem Cell
Research under an application approved by the National Stem Cell Oversight Committee, or

Been derived under the following conditions:
(a)
Donors of gametes, embryos, somatic cells, or human tissue gave voluntary and informed consent.
(b)
Donors of gametes, embryos, somatic cells, or human tissue did not receive valuable consideration. This
provision does not prohibit reimbursement for permissible expenses as determined by an IRB.
(c)
A person may not knowingly, for valuable consideration, purchase or sell gametes, embryos, somatic cells,
or human tissue for research purposes. This provision does not prohibit reimbursement for permissible
expenditures as determined by an IRB or Committee. “Permissible expenditures” means necessary and
reasonable costs directly incurred as a result of persons, not including human subjects or donors, providing
gametes, embryos, somatic cells, or human tissue for research purposes. Permissible expenditures may
include but are not limited to costs associated with processing, quality control, storage, or transportation of
materials.
(d)
Donation of gametes, embryos, somatic cells, or human tissue was overseen by an IRB (or, in the case of
foreign sources, an IRB-equivalent).
(e)
Individuals who consented to donate stored gametes, embryos, somatic cells, or human tissue were not
reimbursed for the cost of storage prior to the decision to donate.
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California regulations also require that certain records be maintained with respect to stem cell research and the materials
used, including:

A registry of all human stem cell research conducted, and the source(s) of funding for this research.

A registry of human pluripotent stem cell lines derived or imported, to include, but not necessarily limited to:
(a)
The methods utilized to characterize and screen the materials for safety;
(b)
The conditions under which the materials have been maintained and stored;
(c)
A record of every gamete donation, somatic cell donation, embryo donation, or product of somatic cell
nuclear transfer that has been donated, created, or used;
(d)
A record of each review and approval conducted by the SCRO Committee.
California Proposition 71
During November 2004, California State Proposition 71 (“Prop. 71”), the California Stem Cell Research and Cures
Initiative, was adopted by state-wide referendum. Prop. 71 provides for a state-sponsored program designed to encourage stem cell
research in the State of California, and to finance such research with State funds totaling approximately $295,000,000 annually for 10
years beginning in 2005. This initiative created the California Institute of Regenerative Medicine (CIRM), which will provide grants,
primarily but not exclusively, to academic institutions to advance both hES cell research and adult stem cell research.
Medicare, Medicaid, and Similar Reimbursement Programs
Success in selling any pharmaceutical products that we develop may depend in part on the extent to which government
health administration authorities such as Medicare and Medicaid will pay for the cost of the products and related treatment. Until we
actually introduce a new product into the medical market place we will not know with certainty whether adequate government
coverage will be available to permit the product to be sold at a price high enough for us to generate a profit. In some foreign
countries, pricing or profitability of health care products is subject to government control which may result in low prices for our
products. In the United States, there have been a number of federal and state proposals to implement similar government controls, and
new proposals are likely to be made in the future.
Employees
As of March 28, 2013, we employed 5 persons on a full-time basis and 5 persons on a part-time basis. Five or our
employees hold Ph.D. Degrees in one or more fields of science.
Office and Research Facilities
We occupy an office and research facility located at 230 Constitution Drive, Menlo Park, California under a sublease from
BioTime. The building on the leased premises contains approximately 24,080 square feet of space. The lease is for a term of three
years commencing January 7, 2013. We will pay base rent of $31,785.60 per month, plus real estate taxes and certain costs of
maintaining the leased premises. As additional consideration for the lease, BioTime has issued 73,553 BioTime common shares to the
landlord. BioTime has agreed to register those shares under the Securities Act but if BioTime fails to file a registration statement for
that purpose within 120 days from the lease commencement, the landlord will have a right to return the shares to BioTime, in which
case the base rent that we will be required to pay will increase to $38,528 per month, retroactive to the commencement date of the
lease.
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BioTime may assign the lease to us outright at any time after we have obtained at least $10,000,000 in equity capital through
the sale of capital stock for cash, or we have a class of capital stock registered under Section 12 of the Exchange Act; provided that we
must agree in writing to assume, to be bound by, and to perform the terms, covenants and conditions of the lease. We expect that the
conditions to the assignment will be met after the Asset Contribution and sale of Series B Shares and Warrants under a Stock and
Warrant Purchase Agreement with a cash investor are consummated.
Legal Proceedings
From time to time, we may be involved in routine litigation incidental to the conduct of our business. In connection with the
Asset Contribution, we will assume Geron’s position as appellant in an appeal filed in the United States District Court in Civil Action
No. C12-04813 (the “ViaCyte Appeal”) seeking the reversal of two adverse determinations by the PTO with respect to two patent
applications in U.S. Patent Interference 105,734, involving U.S. patent 7,510,876 (ViaCyte) and U.S. patent application 11/960,477
(Geron), and U.S. Patent Interference 105,827 involving U.S. patent 7,510,876 (ViaCyte) and U.S. patent application 12/543,875
(Geron). We will also assume the PTO interferences upon which the appeal is based, as well as certain oppositions filed by Geron
against certain ViaCyte patent filings in Australia and in the European Patent Office. See “Patents and Trade Secrets – ViaCyte Patent
Interference Proceedings.”
MANAGEMENT
Directors
The names and ages of our directors are:
Thomas B. Okarma, Ph.D., M.D., 67, has served as our Chief Executive Officer and as a director since September
2012. Dr. Okarma served as President and Chief Executive Officer of Geron Corporation, and as a member of Geron’s Board of
Directors, from July 1999 until February, 2011. Dr. Okarma also served as Vice President of Research and Development and as Vice
President of Cell Therapies of Geron before becoming its Chief Executive Officer. Dr. Okarma currently serves on the industrial
advisory board of directors of CIRM and was a member of the Board of Directors of the Biotechnology Industry Organization (BIO)
for 10 years. He was Chairman of the Board of Overseers of Dartmouth Medical School from 2001 to 2006. In 1985, Dr. Okarma
founded Applied Immune Sciences, Inc., a biotechnology company using living cell infusions to achieve therapeutic effect in disease
treatment, and served initially as Vice President of Research and Development and then as Chairman, Chief Executive Officer and a
director of that company until 1995 when it was acquired by Rhone-Poulenc Rorer, a global pharmaceutical company with core
competencies in life sciences, applied chemistry, specialty chemicals and chemical intermediaries. Dr. Okarma was a Senior Vice
President at Rhone-Poulenc Rorer from the time of the acquisition of Applied Immune Sciences until December 1996. From 1980 to
1992, Dr. Okarma was a member of the faculty of the Department of Medicine at Stanford University School of Medicine. Dr.
Okarma holds a A.B. from Dartmouth College, a M.D. and Ph.D. from Stanford University and is a graduate of the Executive
Education program of the Stanford Graduate School of Business.
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Dr. Okarma is an internationally renowned pioneer and expert in stem cell research. Dr. Okarma’s years of experience in
senior management of biotechnology companies, including as CEO of Geron, and his understanding of the technologies that we will
be acquiring from Geron through the Asset Contribution, make Dr. Okarma uniquely qualified to serve as our Chief Executive Officer
and as a member of our Board of Directors.
Alfred D. Kingsley, 70, joined our Board of Directors and became Chairman of the Board during September 2012. Mr.
Kingsley is Chairman of the Board of BioTime. Mr. Kingsley has been general partner of Greenway Partners, L.P., a private
investment firm, and President of Greenbelt Corp., a business consulting firm, since 1993. Greenbelt Corp. served as BioTime’s
financial advisor from 1998 until June 30, 2009. Mr. Kingsley was Senior Vice-President of Icahn and Company and its affiliated
entities for more than 25 years. Mr. Kingsley holds a BS degree in economics from the Wharton School of the University of
Pennsylvania, and a J.D. degree and LLM in taxation from New York University Law School.
Mr. Kingsley’s long career in corporate finance and mergers and acquisitions includes substantial experience in helping
companies to improve their management and corporate governance, and to restructure their operations in order to add value for
shareholders. Mr. Kingsley has been instrumental in structuring our initial equity financings, and in negotiating the Asset
Contribution Agreement with Geron. Mr. Kingsley, along with entities that he controls, is currently BioTime’s largest shareholder.
Andrew C. von Eschenbach, M.D., 70, joined our Board of Directors during March 2013. Dr. von Eschenbach is the
President of Samaritan Health Initiatives, Inc., a health care policy consultancy, and is an Adjunct Professor at University of Texas
MD Anderson Cancer Center. From September of 2005 to January 2009, Dr. von Eschenbach served as Commissioner of the Food
and Drug Administration. He was appointed Commissioner of the FDA after serving for four years as Director of the National Cancer
Institute at the National Institutes of Health. Dr. von Eschenbach earned a B.S. from St. Joseph’s University and a medical degree
from Georgetown University School of Medicine in Washington, D.C. Dr. von Eschenbach serves on the Board of Directors of Elan
Corporation, plc.
Dr. von Eschenbach is an internationally renowned cancer specialist and author of more than 300 scientific articles and
studies, and also was a founding member of the National Dialogue on Cancer. Under his leadership, the FDA experienced dramatic
increases in resources enabling implementation of many new programs designed to strengthen the FDA in its mission to protect and
promote public health. Dr. von Eschenbach previously served for over three decades as a physician, surgeon, oncologist, and
executive in the healthcare industry. His roles have included serving as Chairman of the Department of Urologic Oncology and
Executive Vice President and Chief Academic at the University of Texas MD Anderson Cancer Center in Houston. He also serves on
the Chugai Pharmaceutical International Advisory Council; the GE Healthymagination Advisory Board; and the Scientific Advisory
Board of Arrowhead Research Corporation. He is also Senior Fellow at the Milken Institute, Director of the FDA Project at the
Manhattan Institute; and serves on the Expert Oncology Panel at GSK Oncology
Michael D. West, Ph.D., 59, Vice President of Technology Integration, has served as a Vice President and as a director
since September 2012. Dr. West has been Chief Executive Officer of BioTime since October 2007, and has served on BioTime’s
Board of Directors since 2002. Prior to becoming BioTime’s Chief Executive Officer, Dr. West served as Chief Executive Officer,
President, and Chief Scientific Officer of Advanced Cell Technology, Inc., a company engaged in developing human stem cell
technology for use in regenerative medicine. Dr. West also founded Geron Corporation, and from 1990 to 1998 he was a director and
Vice-President of Geron, where he initiated and managed programs in telomerase diagnostics, oligonucleotide-based telomerase
inhibition as anti-tumor therapy, and the cloning and use of telomerase in telomerase-mediated therapy wherein telomerase is utilized
to immortalize human cells. From 1995 to 1998 he organized and managed the research between Geron and its academic
collaborators, James Thomson and John Gearhart, that led to the first isolation of human embryonic stem and human embryonic germ
cells. Dr. West received a B.S. Degree from Rensselaer Polytechnic Institute in 1976, an M.S. Degree in Biology from Andrews
University in 1982, and a Ph.D. from Baylor College of Medicine in 1989 concentrating on the biology of cellular aging.
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Dr. West is an internationally renowned pioneer and expert in stem cell research, and has extensive academic and business
experience in age-related degenerative diseases, telomerase molecular biology, and human embryonic stem cell research and
development. Dr. West brings to our Board the proven ability to conceive of and manage innovative research and development
programs that have made scientifically significant discoveries in the field of human embryonic stem cells, and the ability to build
companies focused on the great potential of regenerative medicine.
Director Independence
Our Board of Directors has determined that Andrew von Eschenbach qualifies as “independent” in accordance with Section
803(A) of the NYSE MKT Company Guide. The only compensation or remuneration that we have provided to Dr. von Eschenbach
during his tenure as a director has been compensation as a non-employee director. Neither Dr. von Eschenbach nor any members of
his family have participated in any transaction with us that would disqualify him as an “independent” director under the standard
described above.
Thomas Okarma and Michael D. West do not qualify as “independent” because they are our executive officers or
employees. Alfred D. Kingsley does not qualify as “independent” because he is an executive officer of certain BioTime subsidiaries.
Compensation of Directors
Directors and members of committees of the Board of Directors who are our salaried employees or officers are entitled to
receive compensation as employees or officers but are not compensated for serving as directors or attending meetings of the Board or
committees of the Board. All directors are entitled to reimbursements for their out-of-pocket expenses incurred in attending meetings
of the Board or committees of the Board.
For 2013, each director who is not an Asterias officer or employee, other than the Chairman of the Board of Directors,
will receive an annual fee of $15,000 in cash, plus $1,000 for each regular or special meeting of the Board attended, and options to
purchase 20,000 Series B Shares under our 2013 Equity Incentive Plan. For 2013, the Chairman of the Board of Directors will receive
an annual fee of $50,000 in cash, plus $1,000 for each regular or special meeting of the Board attended, and options to purchase
75,000 Series B Shares under our 2013 Equity Incentive Plan.
The annual fee of cash will be paid, and the stock options granted will vest and become exercisable, in four equal
quarterly installments, provided that the director remains a director on the last day of the applicable quarter. The options will expire if
not exercised five years from the date of grant.
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Because we are a subsidiary of BioTime, directors are also eligible to receive stock options or to purchase restricted stock
under the BioTime’s 2012 Equity Incentive Plan. An award to any of our directors under BioTime’s 2012 Equity Incentive Plan may
be made only if approved by the BioTime Board of Directors or by its compensation committee.
We did not pay any compensation during the last fiscal year to any of our directors for serving on our Board of Directors.
Executive Officers
Thomas B. Okarma, Ph.D., M.D., serves as our Chief Executive Officer and as a director, and Michael D. West serves as our
Vice President of Technology Integration. Our other executive officers are Peter S. Garcia, Chief Financial Officer, Jane S.
Lebkowski, Ph.D., President of Research and Development, Katharine Spink, Ph.D., Vice President and Chief Operating Officer, and
Kirk Trisler, Ph.D., Vice President of Product Development.
Peter S. Garcia, 51, is our Chief Financial Officer. Mr. Garcia has also been the Chief Financial Officer of BioTime since
October 2011. Before joining BioTime, Mr. Garcia was the Chief Financial Officer of six biotech and high-tech companies since
1996, and was instrumental in raising over $500,000,000 and leading multiple merger and acquisition transactions for these
companies. He was most recently with Marina Biotech, Inc. managing finance and investor relations efforts as well as corporate
communications, and IT and facilities functions. From 2004 to 2008, Mr. Garcia was CFO of Nanosys, Inc., a leading
nanotechnology company, where he led efforts in raising the largest private nanotechnology company financing in 2005. From 1996
to 2004, Mr. Garcia was CFO of four Bay Area biotech companies: Nuvelo, Inc.; Novacept; IntraBiotics Pharmaceuticals; and
Dendreon Corp. From 1990 to 1996, he was a financial executive with Amgen, Inc. during its early days of commercializing
therapeutics. Mr. Garcia graduated with honors from Stanford University in 1983 with a Bachelor of Arts degree in economics and
sociology. In 1985 he earned his MBA from the University of California Los Angeles with a concentration in Finance and
Accounting.
Jane S. Lebkowski, Ph.D.,57, became our President of Research and Development during March 2013 after a thirteen year
career at Geron where she served as Senior Vice President, Cell Therapies from 2004 to 2011, and also as Chief Scientific Officer
from 2009 to 2011. From August 1999 until January 2004, Dr. Lebkowski served as Vice President of Cell Therapies, and from April
1998 until August 1999, she served as Senior Director, Cell and Gene Therapies at Geron. Dr. Lebkowski managed research and
development of Geron’s immunotherapy products for cancer treatment and its hES based products for regenerative medicine. Prior to
joining Geron, she spent more than ten years at Applied Immune Sciences and then at Rhone Poulenc Rorer, which acquired Applied
Immune Sciences in 1995, advancing from research scientist to Vice President of Research and Development. Dr. Lebkowski has
co-authored numerous scientific publications. Dr. Lebkowski holds a B.S. in Chemistry and Biology from Syracuse University, and a
Ph.D. from Princeton University.
Katharine Spink, Ph.D., 38, became our Vice President and Chief Operating Officer during March 2013, after an eight
year career at Geron where she served as Senior Vice President of Alliance Management and Cell Therapy Product Development, and
of Operations, Cell Therapies during 2011, having serving as Vice President of Operations, Regenerative Medicine Programs from
2009 to 2011 and Senior Director of Program Operations, Regenerative Medicine from 2008 to 2009. From January 2007 until
January 2008, Dr. Spink served as Program Director for Cardiovascular Disease, and was Assistant Director, and then Associate
Director of Corporate Development during 2003 to 2006. Dr. Spink holds a B.A. in Biochemistry from Rice University, and a Ph.D.
in Cancer Biology from Stanford University School of Medicine.
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Kirk Trisler, Ph.D., 54, became our Vice President of Product Development during March 2013 after serving as Senior
Director of Manufacturing Sciences at Geron from 2009 to 2012. Before joining Geron, Dr. Trisler was Director of Contract
Manufacturing at Genitope Corporation, a developer and manufacturer of cancer vaccines and antibodies, from 2005 to 2008. Dr.
Trisler was a co-founder of Integri-Gen, Inc., a developer of technology and purification methods for drug candidates, and served as
its Director of Drug Development from 2004 to 2005. Dr. Trisler has also served as Senior Development Scientist at Coulter
Pharmaceutical, Inc. and Corixa Corporation, and participated in clinical trials of antibody drugs as Director of Radioimmunotherapy
at Stanford University Hospital. Dr. Trisler holds a B.S. in Chemistry and a Ph.D. from the University of South Florida.
Other Key Employees
Edward D. Wirth, III, M.D., Ph.D., 48, became our Chief Translational Officer during March 2013 after serving as Chief
Science Officer at InVivo Therapeutics Corporation from 2011to 2012. From 2004-2011, Dr. Wirth served as Medical Director for
Regenerative Medicine at Geron Corporation, where he led the world’s first clinical trial of a human embryonic stem cell derived
product, GRNOPC-1 in patients with subacute spinal cord injuries. Dr. Wirth held academic appointments at Rush-Presbyterian St.
Luke’s Medical Center and at the University of Chicago from 2002 to 2004, and was a member of the faculty of the University of
Florida from 1996 to 2002. Dr. Wirth received his Ph.D. and M.D. and from the University of Florida in 1992 and 1994, respectively.
EXECUTIVE COMPENSATION
Compensation Committee Interlocks and Insider Participation in Compensation Decisions
We do not have a Compensation Committee. The compensation of our Chief Executive Officer for the fiscal year ended
December 31, 2012 was determined by our Board of Directors after approval by the BioTime Board of Directors and its
Compensation Committee. At that time, our Board of Directors had only three members, Dr. Okarma, Alfred D. Kingsley, and
Michael D. West but Dr. Okarma did not vote on matters pertaining to his own personal compensation. Mr. Kingsley is the Chairman
of our Board of Directors and is the Chairman of the Board of BioTime and is an executive officer and director of certain other
BioTime subsidiaries, and Dr. West is the Chief Executive Officer and a director of BioTime. Neither Mr. Kingsley nor Dr. West
received any direct compensation from us during the last fiscal year.
Compensation Discussion and Analysis
Because we are a recently formed company in the start-up stage we are only beginning to formulate our executive
compensation policies. During 2012, we had only one executive officer who received a salary or other compensation from us. Dr.
Okarma received a salary of $50,000 per year that was prorated for the portion of the year that he was employed by us. Dr. Okarma’s
salary was considered to be an interim part-time arrangement while we were making arrangements to acquire our first assets and to
establish our initial research and development programs.
Dr. Okarma also received a grant of stock options to purchase 50,000 BioTime common shares at an exercise price of $3.45
per share under BioTime’s 2012 Equity Incentive Plan. The options granted to Dr. Okarma will vest and thereby become exercisable
in four equal quarterly installments, based upon his continued employment by us or by BioTime or another BioTime subsidiary, and
shall expire in seven years from the date of grant. The grant of the BioTime stock options to Dr. Okarma was approved by BioTime’s
Compensation Committee and Board of Directors and is conditioned upon approval of the BioTime Plan by its shareholders.
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During March 2013, we entered into an Employment Agreement with Dr. Okarma that provides a base salary of $400,000
and a grant of options to purchase 1,000,000 Series A Shares at a price of $2.34 per share. Dr. Okarma’s options will vest, and
thereby become exercisable, in 48 equal monthly installments based upon his continued employment or service on our Board of
Directors, and will expire if not exercised in seven years from the date of grant.
Dr. Okarma’s Employment Agreement has been approved by our Board of Directors. Mr. Okarma did not participate in the
approval of his Employment Agreement by the Board. Dr. Okarma’s compensation under his Employment Agreement has also been
approved by the BioTime Board of Directors and the grant of BioTime options to him was approved by BioTime’s Board of Directors
and its Compensation Committee.
Our Chief Financial Officer, Pete Garcia, is an employee of BioTime and during 2012 was compensated by BioTime in
accordance with the terms of his employment agreement and the compensation policies established by the Compensation Committee
of BioTime’s Board of Directors.
Elements of Executive Compensation
Our compensation policies will be influenced by the need to attract and retain executives with the scientific and
management expertise to conduct our research and product development program in a highly competitive industry dominated by
larger, more highly capitalized companies. The compensation we provide our executive officers generally will have the following
primary components, some of which may be provided under BioTime employee benefit plans that permit the participation of
employees of BioTime subsidiaries:

base salary;

annual cash bonuses based on corporate and individual performance;

long-term incentives in the form of stock options;

health insurance; and

401(k) plan participation with employer contributions
In determining compensation for our executive officers, the Compensation Committee will consider a variety of factors,
including:

our growth and progress in scientific research;

extraordinary performance by an individual during the year;

retention concerns;

the executive’s tenure and experience;

the executive’s historical compensation;

market data; and

fairness
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In reviewing each executive’s overall compensation, our Board of Directors will consider an aggregate view of base
salary and bonus opportunities, previous stock option grants, and the dollar value of benefits and perquisites. Executive compensation
will also be influenced by the cost of living in the San Francisco Bay Area. These factors will be balanced against our financial
position and capital resources. Our Board of Directors may consider the implementation of performance based bonus programs under
which awards would be based upon the attainment of pre-set quantified bench marks or goals. In evaluating the compensation of
executive officers, the Board of Directors will consider input from the Chief Executive Officer and such other executive officers who
they believe would be most familiar with the performance of particular executives.
Because we are a new company, our compensation policies are still evolving and in the course of our growth we may
implement new compensation plans and policies and modify existing ones. Our Board of Directors may engage the services of an
independent executive compensation consulting firm to review our current compensation plans and procedures and to provide
additional information about comparative compensation offered by peer companies, market survey information, and information about
trends in executive compensation.
Stock Option Awards
Stock options will be an important part of the compensation packages for our employees, directors, and consultants. We
strongly believe that attracting and retaining the services of employees, directors, and consultants depends in great measure upon our
ability to provide the kind of incentives that are derived from the ownership of stock and stock options, which are offered by
competing pharmaceutical development and bio-technology companies. This is especially true for us since the base compensation that
we may offer may be lower than the compensation packages offered by larger competing companies. For these reasons, we have
adopted a stock option plan with the approval of our Board of Directors.
Our stock options program is intended to align the long-term interests of executives with the interests of shareholders by
offering potential gains if our stock price increases, and to provide incentives for employees to work towards our long-term success by
using vesting schedules over several years. Because of the direct relationship between the value of a stock option and the increased
market price of our common stock after the grant date, we feel that stock options will be important to motivate our executive officers
and employees to manage our affairs in a manner that is consistent with both the long-term interests of our shareholders and our
business objectives.
Our stock option plan also permits the sale of restricted stock or the grant of restricted stock units in lieu of granting stock
options, and the grant of stock appreciation rights that may be granted alone or in tandem with options. Although we have not sold
restricted stock or granted restricted stock units or stock appreciation rights to executives, we may do so in the future. The purchase of
restricted stock may require the executive to make a current financial commitment to the company, which we believe may strengthen
the executive’s ties to the company. The purchase of restricted stock may also offer long-term tax advantages to the executives. See
“Equity Incentive Plan.”
So long as we are a subsidiary of BioTime, our directors, officers, employees, and consultants will also be eligible to
receive stock options from BioTime under the terms of BioTime’s 2012 Equity Incentive Plan. The BioTime stock options held by
our Chief Executive Officer were granted under the terms of the BioTime 2012 Equity Incentive Plan. BioTime’s Board of Directors,
including those directors who are “independent” under the rules of the NYSE MKT, approved the grant of options to Dr. Okarma
during 2012 in the amount disclosed under the “Grants of Plan-Based Awards” table shown below.
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The following tables show certain information relating to the compensation of our Chief Executive Officer during the last
fiscal year. Our Chief Financial Officer did not receive any compensation from us during the year ended December 31, 2012.
SUMMARY COMPENSATION TABLE
Name and principal
position
Thomas Okarma(1)
Chief Executive Officer
Year
2012
Salary
$
13,462
Option
Awards
Bonus
—
$
$
35,078(1)
All other
Compensation
$
Total
—
$
48,540
(1) The options were granted by BioTime under its 2012 Equity Incentive Plan and are reported here at the aggregate grant date fair
value, as if all options were fully vested and exercisable at the date of grant. We used the Black-Scholes-Merton Pricing Model to
compute option fair values based on the following variables: stock price of $3.45, exercise price of $3.45, expected term of seven
years, volatility of 98.04%, and a bond equivalent yield discount rate of 1.20%;
Grants of Plan-Based Awards
The following table sets forth information regarding stock options granted by BioTime under its 2012 Equity Incentive
Plan to our Chief Executive Officer during the year ended December 31, 2012. Our Chief Financial Officer did not receive any option
grants during 2012.
GRANTS OF PLAN-BASED AWARDS
Name
Thomas Okarma
Grant
Date
October 26,
2012
All Other
Option
Awards:
Number
of Securities
Underlying
Options (#)(1)
50,000(1)
Exercise or
Base
Price of
Option
Awards
($/share)
$
3.45
Grant Date
Fair Value of
Stock and
Option
Awards
($)(2)
$
140,311
(1) All of the stock options have a term of seven years.
(2) The options must be reported here at the aggregate grant date fair value, as if all options were fully vested and exercisable at the
date of grant. We use the Black-Scholes-Merton Pricing Model to compute option fair values
Stock Options Outstanding at Year End
The following table summarizes certain information concerning BioTime stock options and held as of December 31, 2012
by our Chief Executive Officer. Our Chief Financial Officer also held stock options granted by BioTime as of the December 31, 2012
but those were granted in 2011, prior to the date on which we were incorporated.
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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
BioTime Option Awards
Name
Thomas Okarma
Number of
Securities
Underlying
Unexercised
Options
Exercisable
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
25,000(1)
Option
Exercise Price
25,000
$
3.45
Option
Expiration
Date
December 20,
2019
(1) These options were granted under the BioTime 2012 Equity Incentive Plan and become exercisable in four equal quarterly
installments during the term of Dr. Okarma’s employment by BioTime or by any BioTime subsidiary.
Current Compensation
The following table reflects the base annual salary set by our Board of Directors and the number of stock options granted to
our executive officers during 2013. Our President of Research and Development, our Vice President and Chief Operating Officer, and
our Vice President of Product Development are presently employed by us on a part-time basis and their salaries shown in the
following table will be prorated based upon the percentage of full-time services they provide. We expect that they will become
full-time employees upon the completion of the Asset Contribution. Our Chief Financial Officer, Peter S. Garcia, and our Vice
President of Technology Integration, Dr. Michael D. West, are full-time executive officers and employees of BioTime and also receive
compensation from BioTime and other BioTime subsidiaries for services to those companies in addition to the compensation show in
the table below, which reflects the expectation that they will be providing services to us on a part-time basis.
Name
Thomas Okarma M.D., Ph.D.
Jane Lebkowski Ph.D.
Peter S. Garcia
Michael D. West
Katharine Spink Ph.D.
Kirk Trisler Ph.D.
Title
Chief Executive Officer
President, Research and Development
Chief Financial Officer
Vice President of Technology Integration
Vice President, Chief Operating Officer
Vice President, Product Development
$
$
$
$
$
$
Salary
400,000
275,000
100,000
50,000
225,000
225,000
Options(1)
1,000,000
400,000
125,000
100,000
200,000
200,000
(1) All options have an exercise price of $2.34 per share which price was determined by our Board of Directors to be the fair
market value of our Series B Shares on the date of grant under the terms and conditions of the 2012 Equity Incentive
Plan. The options will vest in 48 equal monthly installments based upon the continued employment of the executive, by us or
any subsidiary that we may organize or acquire. Options granted to part-time employees, other than Mr. Garcia and Dr.
West, will not begin to vest until they become full-time employees. Options that are not exercised will expire seven years
from the date of grant.
Equity Incentive Plan
We have adopted an Equity Incentive Plan (the “Plan”) under which we have reserved 4,500,000 shares of common stock
for the grant of stock options or the sale of restricted stock (“Restricted Stock’). We may also grant stock appreciation rights
(“SARs”) and hypothetical units issued with reference to common stock (“Restricted Stock Units”) under the Plan. Initially, we will
issue Series B Shares under the Plan but upon the conversion of all of our outstanding Series B Shares into Series A Shares we will
issue Series B Shares under the Plan. The Plan also permits us to issue such other securities as our Board of Directors or the
Compensation Committee administering the Plan may determine.
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No options, Restricted Stock, Restricted Stock Units, or SARs (“Awards”) may be granted under the Plan more than ten
years after the date upon which the Plan was adopted by the Board of Directors, and no options or SARS granted under the Plan may
be exercised after the expiration of ten years from the date of grant.
Awards may be granted under the Plan to our employees, directors, and consultants, and those of any subsidiaries that we
may form or acquire. The Plan will be administered by our Board of Directors or by a Compensation Committee appointed by the
Board of Directors, who will make all determinations with regard to the grant and terms of Awards, subject to the terms of the
Plan. Awards may vest and thereby become exercisable or have restrictions on forfeiture lapse in periodic installments or upon the
attainment of performance goals, or upon the occurrence of specified events as determined by the Board or the Committee. The Board
or Committee, in its discretion, may accelerate the vesting of an Award after the date of grant.
No person shall be granted, during any one year period, options to purchase, or SARs with respect to, more than 1,000,000
shares in the aggregate, or any Awards of Restricted Stock or Restricted Stock Units with respect to more than 500,000 shares in the
aggregate. If an Award is to be settled in cash, the number of shares on which the Award is based shall not count toward the
individual share limit.
Stock Options
Options granted under the Plan may be either "incentive stock options" within the meaning of Section 422(b) of the Internal
Revenue Code of 1986, as amended (the “Code”), or non-qualified stock options. Incentive stock options may be granted only to our
employees and employees of our subsidiaries. The exercise price of stock options granted under the Plan must be equal to the fair
market of our common stock on the date the option is granted. In the case of an optionee who, at the time of grant, owns more than
10% of the combined voting power of all classes of our stock, the exercise price of any incentive stock option must be at least 110% of
the fair market value of our common stock on the grant date, and the term of the option may be no longer than five years. The
aggregate fair market value of our common stock (determined as of the grant date of the option) with respect to which incentive stock
options become exercisable for the first time by an optionee in any calendar year may not exceed $100,000.
The options’ exercise price may be payable in cash or in common stock having a fair market value equal to the exercise
price, or in a combination of cash and common stock, or other legal consideration for the issuance of stock as the Board of Directors
or Compensation Committee may approve.
Incentive stock options granted under the Plan are nontransferable except by will or the laws of descent and distribution and
may be exercised only during employment or within three months after termination of such employment, subject to certain exceptions
in the event of the death or disability of the optionee.
Options other than incentive stock options under the Code are also nontransferable except by will or the laws of descent and
distribution, except to the extent that the Board or Committee permits the optionee to transfer an option to a family member, a trust for
family members, or other persons approved by the Board or Committee in its discretion.
Generally options will be exercisable only while the optionee remains an employee, director or consultant, or during a
specific period thereafter as approved by the Board or Committee, but in the case of the termination of an employee, director, or
consultant’s services due to death or disability, the period for exercising a vested option shall be extended to the earlier of 12 months
after termination or the expiration date of the option.
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The number of shares of common stock covered by the Plan, and the number of shares of common stock and the exercise
price per share of each outstanding option, shall be proportionately adjusted for any increase or decrease in the number of issued and
outstanding shares of common stock resulting from a subdivision or consolidation of shares or the payment of a stock dividend, or any
other increase or decrease in the number of issued and outstanding shares of common stock effected without receipt of consideration
by us.
Restricted Stock and Restricted Stock Units
In lieu of granting options, we may enter into purchase agreements with employees under which they may purchase or
otherwise acquire Restricted Stock or Restricted Stock Units subject to such vesting, transfer, and repurchase terms and restrictions as
the Board or Committee may determine. The price at which Restricted Stock may be issued or sold will be not less than 100% of fair
market value. We may permit employees or consultants, but not executive officers or directors, who purchase Restricted Stock to pay
for their shares by delivering a promissory note or an installment payment agreement that may be secured by a pledge of their
shares. We may also issue Restricted Stock for services actually performed by the recipient prior to the issuance of the Restricted
Stock.
The Board or Committee may require that Restricted Stock shall be held by us or in escrow pending the expiration or release
of the applicable restrictions. Unvested Restricted Stock for which we have not received payment may be forfeited to us, or we may
have the right to repurchase unvested shares upon the occurrence of specified events, such as termination of employment.
Subject to the restrictions set by the Board or Committee, a recipient of Restricted Stock generally shall have the rights and
privileges of a shareholder, including the right to vote the Restricted Stock and the right to receive dividends; provided that, any cash
dividends and stock dividends with respect to the Restricted Stock shall be withheld by us for the recipient's account, and interest may
be credited on the amount of the cash dividends withheld at a rate and subject to such terms as determined by the Board or
Committee. The cash dividends or stock dividends so withheld and attributable to any particular share of Restricted Stock (and
earnings thereon, if applicable) shall be distributed to the recipient in cash or, at the discretion of the Board or Committee, in common
stock having a fair market value equal to the amount of such dividends, if applicable, upon the release of restrictions on the Restricted
Stock and, if the Restricted Stock is forfeited, the recipient shall have no right to the dividends.
The terms and conditions of a grant of Restricted Stock Units shall be determined by the Board or Committee. No shares of
stock shall be issued at the time a Restricted Stock Unit is granted, and we will not be required to set aside a fund for the payment of
any such award. A recipient of Restricted Stock Units shall have no voting rights with respect to the Restricted Stock Units. Upon the
expiration of the restrictions applicable to a Restricted Stock Unit, we will either issue to the recipient, without charge, one share of
common stock per Restricted Stock Unit or cash in an amount equal to the fair market value of one share of common stock.
At the discretion of the Board or Committee, each Restricted Stock Unit (representing one share) may be credited with cash
and stock dividends paid by in respect of one share of common stock ("Dividend Equivalents"). Dividend Equivalents shall be
withheld by us for the recipient's account, and interest may be credited on the amount of cash Dividend Equivalents withheld at a rate
and subject to such terms as determined by the Board or Committee. Dividend Equivalents credited to a recipient's account and
attributable to any particular Restricted Stock Unit (and earnings thereon, if applicable) shall be distributed in cash or, at the discretion
of the Board or Committee, in shares of stock having a fair market value equal to the amount of the Dividend Equivalents and
earnings, if applicable, upon settlement of the Restricted Stock Unit. If a Restricted Stock Unit is forfeited, the recipient shall have no
right to the related Dividend Equivalents.
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SARS
An SAR is the right to receive, upon exercise, an amount payable in cash or shares or a combination of shares and cash, as
determined by the Board or Committee, equal to the number of shares subject to the SAR that is being exercised multiplied by the
excess of (a) the fair market value of a share of common stock on the date the SAR is exercised, over (b) the exercise price specified
in the SAR Award agreement. SARs may be granted either as free standing SARs or in tandem with options, and with such terms and
conditions as the Board or Committee may determine. SARs may vest and thereby become exercisable in periodic installments as
determined by the Board or the Committee. No SAR may be exercised later than 10 years after the date of grant.
The exercise price of an SAR will be determined by the Board or Committee, but shall not be less than 100% of the fair
market value of one share of common stock on date of grant. An SAR granted in conjunction with an option shall have the same
exercise price as the related option, shall be transferable only upon the same terms and conditions as the related option, and shall be
exercisable only to the same extent as the related option; provided, however, that the SAR by its terms shall be exercisable only when
the fair market value per share exceeds the exercise price per share of the SAR or related option. Upon any exercise of an SAR
granted in tandem with an option, the number of shares for which the related option shall be exercisable shall be reduced by the
number of shares for which the SAR has been exercised. The number of shares for which an SAR issued in tandem with an option
shall be exercisable shall be reduced by the number of shares for which the related option has been exercised.
Withholding
To the extent provided by the terms of an Award Agreement or as may be approved by the Board or Committee, an optionee
or recipient of a Restricted Stock or Restricted Stock Unit Award or SAR may satisfy any federal, state or local tax withholding
obligation relating to the Award by any of the following means (in addition to our right to withhold from any compensation paid to by
the Company) or by a combination of such means: (a) tendering a cash payment; (b) authorizing us to withhold shares of common
stock from the shares otherwise issuable to the recipient as a result of the exercise or acquisition of shares under the Award, provided,
however, that no shares are withheld with a value exceeding the minimum amount of tax required to be withheld by law; or (c)
delivering to us previously owned and unencumbered shares of our common stock.
Changes in Shares Under the Plan
In the event of changes in the outstanding common stock or in our capital structure by reason of any stock or extraordinary
cash dividend, stock split, reverse stock split, an extraordinary corporate transaction such as any recapitalization, reorganization,
merger, consolidation, combination, exchange, or other relevant change in capitalization, the terms of Awards granted under the Plan,
and the maximum number of shares subject to all Awards under the Plan or with respect to which any one person may be granted
Awards during any one year period, will be equitably adjusted or substituted, as to the number, price or kind of a shares or other
consideration subject to the Awards to the extent necessary to preserve the economic intent of the Awards. In making such
adjustments, the Board or Committee shall generally ensure that the adjustments will not constitute a modification, extension or
renewal of an incentive stock options within the meaning of Section 424(h)(3) of the Code, and in the case of non-qualified options,
ensure that any adjustments will not constitute a modification of such Non-qualified Stock Options within the meaning of Section
409A of the Code, and that adjustments or substitutions of Awards intended to qualify as "performance-based compensation" under
Section 162(m) of the Code will not cause us to be denied a tax deduction on account of Section 162(m) of the Code.
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Options Granted
As of March 12, 2013, we had granted to certain officers, employees, and directors, options to purchase a total of 2,380,000
Series B Shares at exercise price of $2.34 per share under the Plan.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
PRINCIPAL SHAREHOLDERS
The following table sets forth information concerning the expected beneficial ownership of our common stock upon
completion of the Asset Contribution by each person known by us to be entitled to receive 5% or more of our shares of common stock.
Security Ownership of Certain Beneficial Owners
Number of
Shares
Percent of
Total (1)
BioTime, Inc.(2)
1301 Harbor Bay Parkway
Alameda, CA 94502
24,973,340
73.4%
Geron Corporation(3)
149 Commonwealth Drive
Menlo Park, CA 94025
6,537,779
19.2%
Romulus Films, Ltd(4)
2,486,000
7.3%
(1) Includes both Series A Shares and Series B Shares.
(2) Includes 21,823,340 Series B Shares that BioTime will own upon the completion of the Asset Contribution and 3,150,000
Series B Shares that BioTime may acquire upon the exercise of warrants to be issued in the Asset Contribution.
(3) Geron will own only Series A Shares. These Series A Shares will be distributed by Geron to its stockholders or sold, with
the sale proceeds to be distributed to certain Geron stockholders who would otherwise receive Series A Shares, in the Series
A Distribution.
(4) Includes 2,136,000 Series B Shares, and 350,000 Series B Shares that Romulus may acquire upon the exercise of warrants,
that that will be sold to Romulus. Romulus or certain of its affiliates that own Geron common stock may acquire Series A
Shares in the Series A Distribution.
70
Security Ownership of Management
The following table sets forth information concerning the expected beneficial ownership of our common stock upon
completion of the Asset Contribution by each member of the Board of Directors, certain executive officers, and all officers and
directors as a group, presented on a pro forma basis as if the Asset Contribution was completed on March 31, 2013.
Number of
Shares (1)
Percent of
Total (1)
Thomas Okarma(2)
43,366
*
Jane S. Lebkowski(3)
16,666
*
Katharine Spink(4)
8,333
*
Kirk Trisler(5)
8,333
*
Peter S. Garcia(6)
5,208
*
Michael D. West(7)
4,166
*
18,750
*
5,000
*
109,822
*
Alfred D. Kingsley(8)
Andrew von Eschenbach(9)
All officers and directors as a group (8 persons) (10)
* Less than 1%
(1) Does not include any Series A Shares that any directors or executive officers may receive in the Series A Distribution with
respect to any shares of Geron common stock they may own.
(2) Includes 1,700 Series B Shares owned and 41,666 Series B Shares that may be purchased upon the exercise of stock options
that will become exercisable within 60 days after March 15, 2013. Excludes 958,334 Series B Shares that may be acquired
upon the exercise of certain stock options that are not presently exercisable and that will not become exercisable within 60
days.
(3) Includes 16,666 Series B Shares that may be purchased upon the exercise of stock options that will become exercisable
within 60 days. Excludes 383,334 Series B Shares that may be acquired upon the exercise of certain stock options that are
not presently exercisable and that will not become exercisable within 60 days.
(4) Includes 8,333 Series B Shares that may be purchased upon the exercise of stock options that will become exercisable within
60 days. Excludes 191,667 Series B Shares that may be acquired upon the exercise of certain stock options that are not
presently exercisable and that will not become exercisable within 60 days.
(5) Includes 8,333 Series B Shares that may be purchased upon the exercise of stock options that will become exercisable within
60 days. Excludes 191,667 Series B Shares that may be acquired upon the exercise of certain stock options that are not
presently exercisable and that will not become exercisable within 60 days.
(6) Includes 5,208 Series B Shares that may be purchased upon the exercise of stock options that will become exercisable within
60 days. Excludes 119,792 Series B Shares that may be acquired upon the exercise of certain stock options that are not
presently exercisable and that will not become exercisable within 60 days.
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(7) Includes 4,166 Series B Shares that may be purchased upon the exercise of stock options that will become exercisable within
60 days. Excludes 95,834 Series B Shares that may be acquired upon the exercise of certain stock options that are not
presently exercisable and that will not become exercisable within 60 days.
(8) Includes 18,750 Series B Shares that may be purchased upon the exercise of stock options that will become exercisable
within 60 days. Excludes 56,250 Series B Shares that may be acquired upon the exercise of certain stock options that are not
presently exercisable and that will not become exercisable within 60 days.
(9) Includes 5,000 Series B Shares that may be purchased upon the exercise of stock options that will become exercisable within
60 days. Excludes 15,000 Series B Shares that may be acquired upon the exercise of certain stock options that are not
presently exercisable and that will not become exercisable within 60 days.
(10) Includes 108,122 Series B Shares that may be purchased upon the exercise of stock options that will become exercisable
within 60 days. Excludes 2,011,878 Series B Shares that may be acquired upon the exercise of certain stock options that are
not presently exercisable and that will not become exercisable within 60 days.
Certain Relationships and Related Transactions
Certain Transactions
During 2012, we sold 50,000 Series B Shares to BioTime for $50,000 in cash.
During January 2013, BioTime entered into the lease of our primary office and research facility in Menlo Park, California
which we are subleasing from BioTime at BioTime’s cost, including an obligation to reimburse BioTime for $242,726.40 that
BioTime paid to the landlord in BioTime common shares as partial consideration for the lease. We expect that BioTime will assign
the lease to us when permitted to do so under the terms of the lease.
Shared Facilities Agreement and Relationship with BioTime
We have entered into a Shared Facilities Agreement with BioTime through which BioTime will continue to provide us with
the use of its facilities, equipment and supplies, utilities, and personnel at its cost plus 5%. The Shared Facilities Agreement is
reciprocal in that BioTime or another BioTime subsidiary will pay us on the same cost plus 5% basis to the extent that it uses our
facilities, equipment, supplies, utilities, and personnel.
BioTime is not required to hire any additional personnel or to acquire any additional equipment or supplies for our use. We
expect to hire our own personnel and to acquire our own equipment and supplies for our own exclusive use as the need arises.
The initial term of the Shared Facilities Agreement will expire on December 31, 2016, but will be automatically be renewed
and the termination date will be extended for an additional year annually after December 31, 2016, unless either party gives the other
party written notice stating that the Agreement shall terminate on December 31 of that year.
Either party may terminate the Shared Facilities Agreement immediately upon the occurrence of a default by the other
party. A default will be deemed to have occurred if a party (i) fails to pay any sum due under the Shared Facilities Agreement, or fails
to perform any other obligation under the agreement, and the failure continues for a period of 5 days after written notice from the party
seeking to terminate the agreement; (ii) becomes the subject of any order for relief in a proceeding under any Debtor Relief Law; (iii)
becomes unable to pay, or admits in writing the party’s inability to pay, its debts as they mature; (iv) makes an assignment for the
benefit of creditors; (v) applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator,
rehabilitation, or similar officer for the party or for all or any part of the party’s property or assets, or any such officer is appointed for
such party or any part of its assets without the party’s consent and such appointment is not dismissed or discharged within 60 calendar
days; (vi) institutes or consents to any proceeding under any Debtor Relief Law with respect to the party or all or any part of the
party’s property or assets, (vii) becomes subject to any proceeding under any Debtor Relief Law without the consent of the party if
such case or proceeding continues undismissed or unstayed for 60 calendar days; or (viii) dissolves or liquidates or takes any action to
dissolve or liquidate. As used in the Shared Facilities Agreement, the term Debtor Relief Law means the Bankruptcy Code of the
United States of America, as amended, or any other similar debtor relief law affecting the rights of creditors generally.
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Under the Shared Facilities Agreement, we have agreed to defend, indemnify, and hold harmless BioTime and BioTime’s
shareholders, directors, officers, employees, and agents against and from any and all claims arising from our use of BioTime’s office
and laboratory facilities, and from any of our work or other activities there, including all activities, work, and services performed by
BioTime employees, contractors, and agents for us. The scope of our indemnification obligations also includes any and all claims
arising from any breach or default on our part in the performance of any of our obligations under the terms of the Shared Facilities
Agreement, or arising from any act or omission (including, but not limited to negligent acts or omissions) of us or any of our officers,
agents, employees, contractors, guests, or invitees acting in that capacity. We are also assuming all risk of damage to property or
injury to persons in, upon, or about the BioTime’s office and laboratory facilities, from any cause other than BioTime’s willful
malfeasance or sole gross negligence. BioTime will not be liable to us for any loss or damages of any kind caused by, arising from, or
in connection with (i) the performance of services by BioTime personnel for us, or the failure of any BioTime employee, contractor, or
agent to perform any services for us, or (ii) any delay, error, or omission by any BioTime employee, contractor, or agent in the
performance of services for us, except to the extent the loss or damage is the result of fraud, gross negligence or willful misconduct by
a BioTime employee, contractor, or agent
Approval by the Board of Directors
All transactions between us and BioTime, including the transactions described above, were reviewed directly by the Board,
and the Board determined whether to approve or withhold approval of each transaction. The Board applied such criteria as it
determined to be appropriate in connection with its evaluation of each proposed transaction on a transaction by transaction basis, and
did not have any written guidelines, other than BioTime’s Code of Ethics, governing the Board’s exercise of its discretion. The
directors considered such factors as they deemed relevant to the particular transaction.
During March 2013, we adopted a Related Person Transaction Policy that will apply to transactions exceeding $120,000 in
which any of our officers, directors, beneficial owners of more than 5% of our common shares, or any member of their immediate
family, has a direct or indirect material interest, determined in accordance with the policy (a “Related Party Transaction”). However,
the Related Party Transaction will not include transactions between us and BioTime or any subsidiary of BioTime.
A Related Party Transaction must be reported to our outside legal counsel, and will be subject to review and approval by a
majority of our Disinterested Directors, prior to effectiveness or consummation, to the extent practical. In addition, any Related Party
Transaction that is ongoing in nature will be reviewed by the Disinterested Directors annually to ensure that the transaction has been
conducted in accordance with any previous approval and that all required disclosures regarding the transaction are made. A
“Disinterested Director” is defined in our Related Person Transaction Policy as is a member of our Board of Directors who (a) does
not have a financial interest (directly or through any trust or beneficial ownership of more than 5% of any class of voting securities of
any business entity) in the Related Person Transaction, and (b) does not have an Immediate Family Member with a financial interest
(directly or through any trust or beneficial ownership of more than 5% of any class of voting securities of any business entity) in the
Related Person Transaction.
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As appropriate for the circumstances, the Disinterested Directors will review and consider:

the interest of the officer, director, beneficial owner of more than 5% of our common shares, or any member of their
immediate family (“Related Person”) in the Related Person Transaction;

the approximate dollar value of the amount involved in the Related Person Transaction;

the approximate dollar value of the amount of the Related Person’s interest in the transaction without regard to the
amount of any profit or loss;

whether the transaction was undertaken in the ordinary course of our business;

whether the transaction with the Related Person is proposed to be, or was, entered into on terms no less favorable to
us than terms that could have been reached with an unrelated third party;

the purpose of, and the potential benefits to the transaction to us; and

any other information regarding the Related Person Transaction or the Related Person in the context of the proposed
transaction that would be material to investors in light of the circumstances of the particular transaction.
The Disinterested Directors will review all relevant information available to it about a Related Person Transaction. The
Disinterested Directors may approve or ratify the Related Person Transaction only if the Disinterested Directors determine that, under
all of the circumstances, the transaction is in, or is not in conflict with, our best interests. The Disinterested Directors may, in their
sole discretion, impose such conditions as they deem appropriate on us or the Related Person in connection with approval of the
Related Person Transaction.
If our Board of Directors appoints an Audit Committee of independent directors, the Audit Committee will make all
determinations under the Related Person Transaction Policy instead of the Disinterested Directors.
THE ASSET CONTRIBUTION AGREEMENT
The following summary of the Asset Contribution Agreement may not contain all of the information that is important to you and is
qualified in its entirety by reference to the full text of the Asset Contribution Agreement which has been previously filed by BioTime
with the SEC as Exhibit 2.1 to BioTime’s Form 8-K dated January 8, 2013 and is incorporated herein by reference. Please read the
full text of the Asset Contribution Agreement. The representations, warranties and covenants contained in the Asset Contribution
Agreement were made only for purposes of that agreement and as of specific dates, were made solely for the benefit of the parties to
the Asset Contribution Agreement and may be intended not as statements of fact, but rather as a way of allocating the risk among the
parties if those statements prove to be inaccurate. In addition, such representations, warranties and covenants may have been
qualified by certain confidential disclosure schedules prepared by the parties to the Asset Contribution Agreement, and not reflected
in the text of the Asset Contribution Agreement, and may apply standards of materiality in a way that is different from what may be
viewed as material by shareholders of, or other investors in, Asterias. Schedules to the Asset Contribution Agreement have been
omitted in BioTime’s Form 8-K filing. We agree to furnish supplementally a copy of any omitted schedule to the SEC upon
request. Investors are not third-party beneficiaries under the Asset Contribution Agreement and should not rely on the
representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of
BioTime, Asterias, or Geron, or any of their respective subsidiaries or affiliates.
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On January, 4 2013, we entered into the Asset Contribution Agreement with BioTime and Geron pursuant to which we will
acquire the stem cell assets of Geron in exchange for 6,537,779 of our Series A Sharesand the assumption of certain liabilities related
to those assets, and we will acquire cash and BioTime common shares and warrants to purchase BioTime common shares from
BioTime in exchange for 21,773,340 of our Series B Shares and 3,150,000 Warrants.
In the Asset Contribution, we will receive the following assets from Geron and BioTime:
From Geron:

certain patents and patent applications and all related active prosecution cases, trade secrets, know-how and certain
other intellectual property rights, and all of Geron’s goodwill with respect to the technology of Geron directly
related to the research, development and commercialization of certain products and know-how related to hES cells;

certain biological materials and reagents (including master and working cell banks, original and seed banks, and
research, pilot and GMP grade lots and finished product);

certain laboratory equipment;

certain contracts;

certain books, records, lab notebooks, clinical trial documentation, files and data;

certain regulatory filings, including investigational new drug applications filed with the FDA for the Clinical Trials;
and

certain abandoned or inactive patents and abandoned or inactive patent applications.
We refer to these assets as the “Contributed Geron Assets.” In addition, we will receive from Geron the Telomerase
Sublicense entitling us to use the sublicensed patents in the development of certain immunological treatments for cancer.
From BioTime:

8,902,077 BioTime common shares, which for purposes of the Asset Contribution Agreement were valued at
$30,000,000 or $3.37 per share based upon the Average Price;

the BioTime Warrants to subscribe for and purchase 8,000,000 additional BioTime common shares;

$5,000,000 in cash as the BioTime Cash Contribution;
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
10% of the shares of common stock of BioTime’s subsidiary OrthoCyte Corporation issued and outstanding as of
January 4, 2013;

6% of the ordinary shares of BioTime’s subsidiary Cell Cure Neurosciences, Ltd. issued and outstanding as of
January 4, 2013; and

the BioTime Stem Cell Assets.
Cash Contribution by Romulus:
Romulus has entered into a Stock and Warrant Purchase Agreement with us pursuant to which Romulus has agreed to
contribute $5,000,000 in cash to us for 2,136,000 Series B Shares and warrants to purchase 350,000 additional Series B Shares. That
investment will be made in conjunction with the closing of the Asset Contribution.
If for any reason Romulus fails to make the $5,000,000 contribution, BioTime will contribute cash, BioTime common
shares, or a combination of cash and BioTime common shares in an amount equal in value to the cash not contributed by
Romulus. Any BioTime common shares so contributed will be valued at the Average Price of $3.37 per share, and BioTime will
receive the Series B Shares and warrants that Romulus would otherwise have received had it made the cash contribution to us.
Ownership of Asterias following the Asset Contribution
At the closing of the Asset Contribution, we will issue to Geron, BioTime and Romulus the following securities:

To Geron, 6,537,779 Series A Shares;

To BioTime, 21,773,340 Series B Shares, and warrants to purchase 3,150,000 Series B Shares, exercisable for a
period of three years from the date of issue at an exercise price of $5.00 per share; and

To Romulus, 2,136,000 Asterias Series B Shares, and warrants to purchase 350,000 additional Asterias Series B
Shares exercisable for a period of three years from the date of issue at an exercise price of $5.00 per share.
Assumed Liabilities
We will assume all obligations and liabilities of Geron and its affiliates relating to:

the Contributed Geron Assets and attributable to periods, events or circumstances after the closing under the Asset
Contribution Agreement;

obligations of Geron and its affiliates to be performed following the closing under the Asset Contribution
Agreement under contracts included in the Contributed Geron Assets;

the ViaCyte Appeal and certain other patent interference proceedings described in “BUSINESS—Legal
Proceedings,” other than expenses relating to those matters incurred by Geron prior to the Asset Contribution; and
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
the Clinical Trials.
We refer to the obligations of Geron and its affiliates assumed by us as the “Assumed Geron Liabilities.”
Contribution Expenses; Taxes
We will bear and pay, and reimburse Geron and its affiliates for, any reasonable fees and expenses relating to and that may
be payable in connection with the assignment of the Geron patents and taxes that may become payable in connection with the
contribution of assets by Geron to us.
Representations and Warranties
Representations and Warranties of BioTime and Us
The Asset Contribution Agreement contains a number of representations and warranties made by us and BioTime, on the
one hand, and Geron, on the other hand, that are subject, in some cases, to specified exceptions and qualifications. The
representations and warranties relate to, among other things:

corporate existence and good standing;

governmental authorizations necessary to complete the Asset Contribution Transaction;

title to contributed assets;

due authorization, execution, delivery and validity of the Asset Contribution Agreement; and

absence of any conflict with organizational documents, laws or agreements.
The Asset Contribution Agreement contains a number of representations and warranties made by us and BioTime that are
subject, in some cases, to specified exceptions and qualifications. These representations and warranties relate to, among other things:

the due organization, existence and good standing of us, BioTime, OrthoCyte Corporation, and Cell Cure
Neurosciences, Ltd.;

our corporate power and authority to execute and deliver, to perform our obligations under and to consummate the
Asset Contribution Transaction, and the enforceability of the Asset Contribution Agreement against us, and
BioTime’s corporate power and authority to execute and deliver, to perform its obligations under and to
consummate the transactions contemplated by the Asset Contribution Agreement, and the enforceability of the Asset
Contribution Agreement against BioTime;

absence of any violation of our or BioTime’s organizational documents, laws, regulations, or agreements as a result
of the consummation or performance by us or BioTime of the transactions contemplated by the Asset Contribution
Agreement;

our and BioTime’s organizational documents;

litigation and proceedings;
77

orders of any governmental entity;

our capital structure and the capital structure of BioTime, OrthoCyte and Cell Cure Neurosciences;

BioTime’s filings with the SEC and the accuracy of information in those filings, including our financial statements;

BioTime’s internal controls and procedures;

the accuracy of the information and statements in the BioTime registration statement relating to the BioTime
Warrants (the “BioTime Registration Statement”), and any related prospectus (the “BioTime Prospectus”), and in
this prospectus and the registration statement of which it is a part (“Our Registration Statement”), and BioTime’s
proxy statement for a special meeting of its shareholders;

the compliance of Our Registration Statement and BioTime’s Registration Statement, the related prospectuses, and
BioTime’s proxy statement with applicable federal securities laws and regulations;

title to the assets to be contributed to us by BioTime;

our prior activities; and

the absence of a certain changes that would, or would be reasonably expected to, have a “BioTime Material Adverse
Effect.”
Certain of BioTime’s and our representations and warranties are qualified as to “materiality,” “BioTime Material Adverse
Effect,” or the actual knowledge of certain of our or BioTime’s executives.
For purposes of the Asset Contribution Agreement, a “BioTime Material Adverse Effect” means any change that does, or
would be reasonably expected to, have a material adverse effect on: (a) the assets to be contributed to us by BioTime, taken as a
whole; or (b) the ability of us and BioTime to timely consummate the transactions contemplated by the Asset Contribution Agreement
or to perform any of our or BioTime’s respective obligations under the Asset Contribution Agreement. However, none of the
following will be taken into account in determining whether there has been or would be, a BioTime Material Adverse Effect with
respect to the assets contributed to us by BioTime: (a) any adverse effect resulting from or arising out of the announcement or
pendency of the Asset Contribution Agreement or the transactions contemplated thereby; (b) any adverse effect resulting from or
arising out of general economic conditions that does not disproportionately affect BioTime, taken as a whole relative to the other
entities in the industries in which BioTime competes; (c) any adverse effect resulting from or arising out of general conditions in the
industries in which BioTime operates that do not disproportionately affect BioTime, taken as a whole relative to the other entities in
the industries in which BioTime competes; (d) any adverse effect resulting from or arising out of any natural disaster or any acts of
terrorism, sabotage, military action or war or any escalation or worsening thereof; or (e) any adverse effect resulting from or arising
out of any changes in any legal requirement or U.S. generally accepted accounting principles.
78
Representations and Warranties of Geron
The Asset Contribution Agreement contains a number of representations and warranties made by Geron that are subject, in
some cases, to specified exceptions and qualifications. These representations and warranties relate to, among other things:

Geron’s due organization, existence and good standing;

Geron’s corporate power and authority to execute and deliver, to perform its obligations under and to consummate
the transactions contemplated by the Asset Contribution Agreement, and the enforceability of the Asset Contribution
Agreement against Geron;

absence of any violation of Geron’s organizational documents, laws, regulations, or agreements as a result of the
consummation or performance by Geron of the transactions contemplated by the Asset Contribution Agreement;

Geron’s organizational documents;

litigation and proceedings;

orders of any governmental entity;

title to the assets to be contributed by Geron to us;

the intellectual property to be contributed by Geron to us;

compliance with the Food and Drug Cosmetic Act and U.S. Food and Drug Administration policies;

validity and enforceability of, breach or default under, or termination rights under, contracts to be contributed by
Geron to us;

environmental matters;

taxes; and

the accuracy of the information and statements supplied by Geron for inclusion in Our Registration Statement or the
BioTime Registration Statement or in the prospectuses included in those registration statements, or in BioTime’s
proxy statement for a special meeting of BioTime shareholders.
Certain of Geron’s representations and warranties are qualified as to “materiality,” “Geron Material Adverse Effect,” or the
actual knowledge of specified executives employed by Geron. For purposes of the Asset Contribution Agreement, a “Geron Material
Adverse Effect” means any change that does, or would be reasonably expected to, have a material adverse effect on: (a) the
Contributed Geron Assets, taken as a whole; or (b) the ability of Geron to perform any of its obligations under the Asset Contribution
Agreement. However, none of the following will be taken into account in determining whether there has been or would be, a Geron
Material Adverse Effect with respect to the Contributed Geron Assets: (i) any adverse effect resulting from or arising out of the
announcement or pendency of the Asset Contribution Agreement or the transactions contemplated thereby; (ii) any adverse effect
resulting from or arising out of general economic conditions that does not disproportionately affect Geron, taken as a whole relative to
the other entities in the industries in which Geron competes; (iii) any adverse effect resulting from or arising out of general conditions
in the industries in which Geron operates that do not disproportionately affect Geron, taken as a whole relative to the other entities in
the industries in which Geron competes; (iv) any adverse effect resulting from or arising out of any natural disaster or any acts of
terrorism, sabotage, military action or war or any escalation or worsening thereof; (v) any adverse effect resulting from or arising out
of any changes in any legal requirement or U.S. generally accepted accounting principles; or (vi) any adverse effect resulting from or
arising out of actions taken by (or any inactions of) the Wisconsin Alumni Research Foundation (including with respect to the delivery
to Geron of any termination notice under any existing license with Geron or otherwise).
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Survival of Representations and Warranties
The representations and warranties of the parties to the Asset Contribution Agreement will expire upon the earlier of the first
anniversary of the closing under the Asset Contribution Agreement, subject to exceptions for certain specified representations which
will expire on the third anniversary of the closing.
Pre-Closing Covenants
Access and Investigation
Prior to closing under the Asset Contribution Agreement, Geron is required, subject to certain limitations, to provide
BioTime with reasonable access to certain of Geron’s books and records pertaining to the assets contributed by Geron to us.
Maintenance of Contributed Assets
BioTime has agreed to preserve intact the BioTime Stem Cell Assets during the period prior to the closing under the Asset
Contribution Agreement and, with certain exceptions, not to, without Geron’s prior written consent:

sell, pledge, mortgage, encumber, sell and leaseback, transfer, assign, convey, lease or license, or authorize any of
the foregoing, with respect to any of the BioTime Stem Cell Assets; or

amend BioTime’s Articles of Incorporation or bylaws.
Subject to certain reasonableness limitations, Geron has agreed to preserve intact and maintain the Contributed Geron Assets
in the state in which they were maintained as of January 4, 2013. Geron has agreed (a) to maintain the ViaCyte Appeal, and not to
discharge, settle, compromise use, release or waive any material claims relating to or impair Geron’s rights to continue, appeal, settle
or compromise the ViaCyte Appeal, without BioTime’s consent, (b) to reasonably consult with BioTime to the extent permitted by
ViaCyte with respect to any licenses being negotiated with respect to patents which are subject to the ViaCyte Appeal and related
patent interference proceedings, and (c) not to license any such patents without BioTime’s consent. BioTime’s consent to the
foregoing may not be unreasonably withheld, conditioned, or delayed.
Restrictions on Solicitation
Geron is not permitted to initiate, solicit or knowingly encourage inquiries, or engage in discussions or negotiations with
third parties regarding any proposal to acquire more than an immaterial portion of the Contributed Geron Assets, or approve, adopt or
enter into any agreement providing for, or negotiations in respect of, the acquisition of more than an immaterial portion of the
Contributed Geron Assets, subject to Geron’s ability to solicit and engage in certain change of control transactions other than a change
of control transaction that would reasonably be expected to adversely affect, materially delay or prevent the consummation of the
Asset Contribution.
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We and BioTime are not permitted to initiate, solicit, or knowingly encourage inquiries, or engage in discussions or
negotiations with third parties regarding any proposal for a transaction that could reasonably be expected to materially delay or
prevent the Asset Contribution, or approve or adopt any such proposal, or enter into any agreement providing for, or negotiations in
respect of, any such proposal, subject to the fiduciary duties of BioTime’s Board of Directors.
BioTime may furnish information with respect to BioTime and its subsidiaries (including us) to a person making a bona
fide, written unsolicited proposal for a transaction that could reasonably be expected to materially delay or prevent the Asset
Contribution Transaction and engage in or participate in discussions or negotiations regarding such a proposal, if, but only if: (a)
neither BioTime nor Asterias has breached the non-solicitation provisions of the Asset Contribution Agreement and no representative
of BioTime or Asterias has taken any action that would constitute a breach of the non-solicitation provisions of the Asset Contribution
if such action had been taken by BioTime or Asterias, (b) BioTime’s Board of Directors has determined in good faith after taking into
account the advice of its outside legal counsel that the failure to act on such a proposal would be materially inconsistent with the
directors’ fiduciary duties under applicable law, and (c) concurrently with or prior to furnishing any such information to, or entering
into discussions or negotiations with, such person, BioTime (i) gives Geron written notice of its intention to furnish information to, or
enter into discussions or negotiations with, such person, and (ii) BioTime receives from such person an acceptable confidentiality
agreement;
Filings; Other Actions; Notifications
We, BioTime and Geron have agreed to use our respective reasonable best efforts to timely take all actions necessary or
appropriate for purposes of consummating and effecting the transactions contemplated by the Asset Contribution Agreement. In
addition, we, BioTime and Geron have agreed to use reasonable best efforts to promptly make and effect all registrations, filings and
submissions required to be made or effected pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
“HSR Act”), the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and other applicable legal requirements, with
respect to the transactions contemplated under the Asset Contribution Agreement.
We, BioTime and Geron have agreed, subject to certain exceptions, to:

use reasonable best efforts to promptly take all actions, and do all things necessary to cause the conditions to the
consummation of the transactions under the Asset Contribution Agreement to be satisfied as promptly as practicable
and to consummate and make effective, in the most expeditious manner reasonably practicable, the transactions
contemplated by the Asset Contribution Agreement;

use reasonable best efforts to provide any information requested by any governmental authority in connection with
the transactions under the Asset Contribution Agreement;

use reasonable best efforts to contest and resist any actual or threatened administrative or judicial action, or any legal
proceedings, instituted by a governmental authority or private party challenging any of the transactions under the
Asset Contribution Agreement; and

keep each other apprised of any request, inquiry, investigation, action or legal proceeding with respect to any
transaction under the Asset Contribution Agreement, and keep each other informed as to the status of any of the
foregoing and any communications with any government authority regarding the foregoing.
HSR Act
Currently, a filing under the HSR Act will not be required because we, BioTime, and Geron do not meet certain size
thresholds under the HSR Act. However, in the event that prior to the closing under the Asset Contribution Agreement the requisite
size thresholds are exceeded, a filing would be required under the HSR Act.
81
Subject to certain limitations, in order to obtain any needed antitrust consent, approval or clearance from, and avoid any
challenge or action by, the U.S. Federal Trade Commission or the U.S. Department of Justice that would prevent the consummation of
the Asset Contribution, we and BioTime may be required to (a) divest of, or enter into a voting trust, proxy arrangement, “hold
separate” or similar arrangement or agreement with respect to, an immaterial asset or business or any immaterial portion of any asset
or business of BioTime or its affiliates (including us and the Contributed Geron Assets), (b) cause an immaterial portion of our or
BioTime’s intellectual property rights to be made available to other persons, or (c) cause an immaterial contract or business
relationship between us or BioTime or any of our affiliates and any other person to be terminated or modified. We and BioTime are
not required to take the foregoing actions to the extent that they would, taken together, have an adverse impact in any material respect
on the assets or business of BioTime, us or our respective affiliates or on the Contributed Geron Assets.
Registration of BioTime and Asterias Securities
With limited exceptions, to the extent required by applicable legal requirements, we and BioTime are required to use
reasonable best efforts to register or qualify (or obtain an exemption from such registration or qualification) the securities included in
the BioTime Registration Statement and the Asterias Registration Statement, respectively, for offer and sale under the securities laws
and blue sky laws of each of the jurisdictions in which such securities will be sold and/or distributed. We and BioTime are not
required to (a) qualify generally to do business in any jurisdiction where we are not, or in the case of BioTime it is not, then so
qualified, (b) take any action that would subject us or BioTime to general service of process in any such jurisdiction where we are not,
or in the case of BioTime it is not, then so subject, or (c) register or qualify securities in any state or foreign jurisdiction in which the
stockholders of Geron hold less than 20,000 shares of Geron common stock in the aggregate based upon information provided by
Geron in a list.
WARF License
From and after January 4, 2013 and including the periods following the closing of the Asset Contribution, Geron is
prohibited from transferring, assigning or sublicensing two license agreements between Geron and Wisconsin Alumni Research
Foundation, or any rights thereunder, to any third party, by operation of law or otherwise, or exercising or asserting any rights under
those license agreements against us or BioTime other than with respect to the periods prior to the closing of the Asset
Contribution. Geron is required to terminate those license agreements at our request concurrently with the execution by us of a license
with Wisconsin Alumni Research Foundation, or, if earlier, upon (a) a change of control of Geron or (b) the closing of the Asset
Contribution.
Conditions to Closing
Mutual Conditions
The respective obligations of each of us, BioTime, and Geron to consummate the Asset Contribution are subject to the
following conditions:

BioTime’s shareholders having duly approved two proposals related to the Asset Contribution Agreement, at a
special meeting of shareholders that BioTime will call to obtain that approval. One proposal is for approval of
BioTime’s issuance of the BioTime common shares and common share purchase warrants to be issued to us, and the
common shares that may be issued to Geron to cover BioTime’s expense reimbursement obligation (the “Share
Issuance Proposal”). The other proposal is for approval of an amendment of BioTime’s Articles of Incorporation to
increase its authorized capital stock in order to provide BioTime with a sufficient amount of common shares to
cover the shares, including shares issuable upon the exercise of warrants, to be issued under the Asset Contribution
Agreement (the “Articles Amendment Proposal”).
82

the expiration or termination of any applicable waiting period under the HSR Act;

absence of any litigation or proceeding of any governmental authority pending or threatened in writing to enjoin,
delay, prohibit or restrict the consummation of the transactions under the Asset Contribution Agreement;

absence of orders issued by any governmental authority of competent jurisdiction prohibiting the consummation of
the transactions under the Asset Contribution Agreement; and

the effectiveness of both Our Registration Statement and the BioTime Registration Statement, and absence of any
stop order suspending the effectiveness of either of those registration statements, or any proceeding for that purpose
having been initiated or threatened in writing by the SEC.
Conditions to BioTime’s and Our Obligations
The obligations of BioTime and us to complete the Asset Contribution are subject to the following additional conditions:

the representations and warranties of Geron set forth in the Asset Contribution Agreement must be accurate in all
respects as of the date of the closing under the Asset Contribution Agreement as if made on such date (except for
representations and warranties which address matters as of a particular time, which must be accurate in all respects
as of such particular time), except that any inaccuracies in such representations and warranties will be disregarded if
the circumstances giving rise to such inaccuracies (considered collectively) do not constitute a Geron Material
Adverse Effect;

Geron must have complied with and performed in all material respects all covenants and obligations required to be
performed by it prior to the closing under the Asset Contribution Agreement;

Geron must have delivered a certificate, executed by an executive officer of Geron certifying the above conditions
have been satisfied;

Geron must have delivered to us and BioTime certain other documents, executed by Geron, including (a) the
Royalty Agreement, and the Telomerase Sublicense, (b) a notice of assignment of U.S. patents included in the
patents contributed by Geron, (c) bills of sale and other similar documents in connection with the transfer and
delivery to us of good and valid title to the Contributed Geron Assets, and (d) third party consents listed on a
schedule to the Asset Contribution Agreement; and

the absence of a Geron Material Adverse Effect.
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Conditions to Geron’s Obligations
Geron’s obligation to complete the Asset Contribution Transaction is subject to the following additional conditions:

each of the representations and warranties made by us and BioTime with respect to our and BioTime’s capitalization
and the validity of our and BioTime’s respective securities, the capitalization of OrthoCyte Corporation, and the
capitalization of Cell Cure Neurosciences, Ltd. must be accurate in all respects as of the closing under the Asset
Contribution Agreement as if made on and as of that date, except that any inaccuracies in such representations and
warranties that are de minimis in nature will be disregarded;

each of the representations and warranties made by us and BioTime with respect to our Certificate of Incorporation
and BioTime’s Articles of Incorporation in effect as of the closing under the Asset Contribution Agreement, and the
absence of any BioTime Material Adverse Effect, and any event or circumstance that would reasonably be expected
to have or result in a BioTime Material Adverse Effect, since September 30, 2012, must be accurate in all respects as
of the closing under the Asset Contribution Agreement as if made on and as of that date;

each of the remaining representations and warranties made by us and BioTime must be accurate in all respects as of
the date of the closing under the Asset Contribution Agreement as if made on and as of that date (except for
representations and warranties which address matters as of a particular time, which must be accurate in all respects
as of such particular time), except that any inaccuracies in the representations and warranties will be disregarded if
the circumstances giving rise to the inaccuracies, considered collectively, do not constitute a BioTime Material
Adverse Effect;

we and BioTime must have complied with and performed in all material respects all covenants and obligations
required to be performed by BioTime and us prior to the closing under the Asset Contribution Agreement;

we and BioTime must have delivered to Geron a certificate, executed by an executive officer of each of us certifying
that the above conditions have been satisfied;

Geron must have received (a) an Assumption Agreement pertaining to Assumed Geron Liabilities, and the Royalty
Agreement executed by us, (b) share certificates evidencing the Series A Shares that we will issue to Geron, and (c)
assignment, assumption and other documents necessary or appropriate to effect the assumption by us of the
Assumed Geron Liabilities;

the Insurance Policy (discussed below) must be in full force and effect; and

BioTime must have contributed to us the assets required to be contributed by BioTime under the Asset Contribution
Agreement.
Patent Expense Reimbursement
If the closing of the Asset Contribution occurs later than July 4, 2013, we are obligated under the Asset Contribution
Agreement to reimburse Geron for the fees and costs, including reasonable attorneys fees, incurred from July 4, 2013 through the
closing of the Asset Contribution for prosecuting and maintaining patent applications and patents included in the Contributed Geron
Assets.
The Series A Distribution
In the Asset Contribution Agreement, Geron has agreed to distribute to its stockholders, on a pro rata basis, the Series A
Shares it receives in the Asset Contribution subject to applicable legal requirements and certain other limitations. Under the Asset
Contribution Agreement, fractional shares will not be distributed in the Series A Distribution, and instead will be aggregated and sold
by Geron and the proceeds of the sale will be distributed ratably by Geron to its stockholders who would otherwise be entitled to
receive fractional shares.. Also, in lieu of distributing the Series A Shares in certain to-be-determined excluded jurisdictions, Geron
will sell the Series A Shares that its stockholders who reside in those jurisdictions would otherwise receive and Geron will distribute
the cash proceeds ratably to those stockholders. See “PLAN OF DISTRIBUTION.”
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The BioTime Warrants Distribution
As soon as practicable after Geron notifies us of the completion of the Series A Distribution, and to the extent permitted by
applicable legal requirements, we will distribute to the holders of the Series A Shares, on a pro rata basis, the 8,000,000 BioTime
Warrants that we receive in the Asset Contribution. As a result, we will not derive any future economic value from the BioTime
Warrants and instead the value of the BioTime Warrants will benefit the holders of Series A Shares who receive the BioTime
Warrants.
Post-Closing Obligations Relating to Registration Statements
The Asset Contribution Agreement imposes a number of post-closing obligations on us with respect to the Series A Shares,
including requirements relating to:

keeping or making effective this prospectus and the Asterias Registration Statement, and qualification or exemption
of securities under securities laws and blue sky laws;

supplementing or amending this prospectus and the Asterias Registration Statement;

compliance with applicable legal requirements; and

notice to Geron of certain matters.
Indemnification and Insurance
Distributions Indemnity; Insurance
We and BioTime have agreed to jointly and severally indemnify Geron and certain of its affiliates from certain losses and
liabilities, including any losses relating to certain claims that could arise as a result of any untrue statement or alleged untrue statement
of material fact in, or omission or alleged omission to state any material fact required in order to make the statements not misleading
from this prospectus and the registration statement of which it is a part, from the BioTime Registration Statement and the prospectus
contained therein, and/or from other distributions of securities by us to the holders of our Series A Shares. These indemnification
obligations would apply to any claims relating to the Series A Distribution, the BioTime Warrants Distribution, and/or other
distributions of securities by us to the holders of our Series A Shares within one year following the closing under the Asset
Contribution Agreement, provided that the claims arise on or before the fifth anniversary of the date on which all of the BioTime
Warrants have either expired or been exercised, cancelled or sold. We refer to such indemnification obligations as the “Distributions
Indemnity.”
BioTime is required under the Asset Contribution Agreement to use reasonable best efforts to procure at its cost and expense
a prospective liability insurance policy (the “Insurance Policy”), on terms reasonably acceptable to Geron, to provide $10,000,000 in
coverage for BioTime’s indemnification obligations under the Distributions Indemnity for the period beginning on the earliest
effective date of the BioTime Registration Statement and/or Our Registration Statement, and ending on the fifth anniversary of the
effective date. Obtaining the Insurance Policy is a condition to Geron’s obligation to consummate the closing under the Asset
Contribution Agreement.
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Other Indemnification Obligations
Separate from the Distributions Indemnity, we and BioTime have agreed to indemnify Geron, and its current and future
affiliates and Control Persons (as defined below) of Geron, and each of their respective successors and assigns, and Geron has agreed
to indemnify us and BioTime and our and BioTime’s respective current and future affiliates, Control Persons of each of us and
BioTme, and each of their respective successors and assigns, from and against “damages” arising from any inaccuracy or breach of the
indemnifying party’s representations and warranties, or any breach of any covenant by an indemnifying party, under the Asset
Contribution Agreement. For the purpose of these indemnification obligations, damages are limited to any documented, out-of-pocket
loss, damage, judgment award, fee (including any legal fee, expert fee, accounting fee or advisory fee) or expenses (regardless of
whether or not the damages relate to a third party claim), but excluding any special, indirect or consequential damages. “Control
Persons” refers to any person who controls a party within the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act.
In addition, subject to certain limitations, from and after the closing of the Asset Contribution, Geron has agreed to
indemnify us and BioTime from liabilities relating to the Contributed Geron Assets, and from encumbrances upon the Contributed
Geon Assets, other than the Assumed Geron Liabilities. We have has agreed to indemnify Geron for the Assumed Geron Liabilities.
The maximum damages recoverable from us and BioTime by Geron (or by us and BioTime from Geron) for indemnifiable
losses is limited to $2,000,000 in the aggregate, and recovery of damages is subject to a $50,000 deductible, except that the
$2,000,000 limit and the $50,000 deductible do not apply (a) in the case of fraud; (b) in the case of covenants of a party that must be
performed following the closing under the Asset Contribution Agreement; and (c) with respect to liabilities to the extent related to,
and encumbrances upon, the Contributed Geron Assets or the Assumed Geron Liabilities.
Exclusive Remedy
Except with respect to the Distributions Indemnity or claims against an indemnitor for fraud, and subject to any injunction or
equitable remedies, from and after the closing under the Asset Contribution Agreement the indemnification provisions are a party’s
exclusive remedy and cause of action against an indemnifying party with respect to any matter arising out of or in connection with the
Asset Contribution Agreement
Termination
The Asset Contribution Agreement may be terminated by BioTime or Geron if:

the closing under the Asset Contribution Agreement has not taken place on or before September 30, 2013; however,
the right to terminate will not be available to a party if the failure to close by such date is the result of a party’s
failure to comply with or perform its covenants and obligations under the Asset Contribution Agreement; or

a court of competent jurisdiction or other governmental body has issued a final and non-appealable order, or has
taken any action permanently restraining, enjoining or otherwise prohibiting any of the transactions contemplated by
the Asset Contribution Agreement. However, the right to terminate will not be available to a party if such order or
the taking of such other action is the result of a party’s failure to comply with or perform its covenants and
obligations under the Asset Contribution Agreement;
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The Asset Contribution Agreement may also be terminated by BioTime or Geron if BioTime’s shareholders fail to approve
the Share Issuance Proposal and Articles Amendment Proposal after a final vote has been taken at a special meeting of
shareholders. However, the right to terminate will not be available to a party if the failure to obtain the vote is the result of a party’s
failure to comply with or perform its covenants and obligations under the Asset Contribution Agreement or, in BioTime’s case, if such
failure is attributable to a breach of any of certain Support Agreements for the benefit of Geron signed by three BioTime directors and
their respective affiliates under which they have agreed to vote their BioTime shares for approval of the Share Issuance Proposal and
the Articles Amendment Proposal.
BioTime may also terminate the Asset Contribution Agreement if:

Geron’s representations and warranties are inaccurate or become inaccurate, or if Geron breaches in any material
respect any of its covenants under the Asset Contribution Agreement, but only if, the inaccuracy or breach would
cause the closing conditions under the Asset Contribution Agreement concerning Geron’s representations and
warranties or performance of its obligations not to be satisfied and the inaccuracy or breach is not cured by Geron
within 30 calendar days after receiving written notice from us of the inaccuracy or breach; or

a Geron Material Adverse Effect has occurred and, if curable, is not cured within 30 calendar days after receipt of
written notice from BioTime of its intent to terminate the Asset Contribution Agreement based upon the occurrence
of the Geron Material Adverse Effect.
Geron may also terminate the Asset Contribution Agreement if:

our or BioTime’s representations and warranties are inaccurate or become inaccurate, or if we or BioTime breach in
any material respect any of our or BioTime’s respective covenants under the Asset Contribution Agreement, but
only if the inaccuracy or breach would cause the closing conditions under the Asset Contribution Agreement
concerning our or BioTime’s representations and warranties or performance of our or BioTime’s obligations not to
be satisfied and the inaccuracy or breach is not cured by us or BioTime within 30 calendar days after receiving
written notice from Geron of the inaccuracy or breach;

BioTime’s Board of Directors or any of its committees withdraws its recommendation in favor of the Share Issuance
Proposal and the Articles Amendment Proposal, or if any of the BioTime directors who signed a Support Agreement
has materially breached his Support Agreement, unless in either case the required shareholder vote to approve both
the Share Issuance Proposal and the Articles Amendment Proposal has been obtained prior to termination of the
Asset Contribution Agreement; or

a BioTime Material Adverse Effect has occurred and, if curable, is not cured within 30 calendar days after receipt of
written notice from Geron of its intent to terminate the Asset Contribution Agreement based upon the occurrence of
the BioTime Material Adverse Effect.
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INVESTOR FUNDING
We have entered into a Stock and Warrant Purchase Agreement with an unaffiliated investor, Romulus Films, Ltd., under
which Romulus has agreed to purchase from us 2,136,000 Series B Shares and 350,000 Warrants for a total purchase price of
$5,000,000 in cash. We have agreed to register the Series B Shares and Warrants to be sold to Romulus, and the Series B Shares
issuable upon exercise of the Warrants, for sale under the Securities Act.
Closing Conditions
The sale of the Series B Shares and Warrants to Romulus under the Stock and Warrant Purchase Agreement will occur
concurrently with the consummation of the Asset Contribution transaction, and the consummation of the Asset Contribution is a
condition of Romulus’s obligation to purchase the Series B Shares and Warrants.
Other conditions to Romulus’ obligation to purchase the Series B Shares and Warrants include:

our representations and warranties in the Stock and Warrant Purchase Agreement being true and correct in all
material respects;

our having complied with all of our covenants under the Stock and Warrant Purchase Agreement;

no Material Adverse Effect having occurred;

no litigation or other proceedings enjoining, delaying, prohibiting or restricting, and no judgment, order or writ of
any governmental authority prohibiting or restricting, the consummation of either or both of the sale of the Series B
Shares and Warrants under the Stock and Warrant Purchase Agreement and the Asset Contribution Transaction; and

the Asset Contribution Agreement not having been amended, and either us nor BioTime having waived material
conditions, without Romulus’ approval.
For purposes of the Stock and Warrant Purchase Agreement, “Material Adverse Effect” means any change that does, or
would be reasonably expected to, have a material adverse effect on our business, operations, financial condition, or assets, provided,
however, that none of the following shall be deemed either alone or in combination to constitute, and none of the following shall be
taken into account in determining whether there has been or would be, a Material Adverse Effect: (a) any adverse effect resulting
from or arising out of the announcement, pendency, or consummation of the transactions contemplated by the Stock and Warrant
Purchase Agreement or the Asset Contribution Agreement transaction; (b) any adverse effect resulting from or arising out of general
economic conditions; (c) any adverse effect resulting from or arising out of general conditions in the industries in which we or Geron
operate; (d) any adverse effect resulting from or arising out of any natural disaster or any acts of terrorism, sabotage, military action or
war or any escalation or worsening thereof; and (e) any adverse effect resulting from or arising out of any changes in any law, statute,
rule or regulation, or the judicial or administrative interpretation thereof, or any change in generally accepted accounting principles.
Representations and Warranties
The Stock and Warrant Purchase Agreement contains a number of representations and warranties made by us that are
subject, in some cases, to specified exceptions and qualifications. These representations and warranties relate to, among other things:
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
due organization, existence and good standing;

corporate power and authority to execute and deliver, and perform the our obligations under the agreements with
Romulus, the Asset Contribution Agreement and the agreements entered into in connection with the Asset
Contribution Agreement, and to consummate the transactions contemplated thereby;

enforceability of the agreements

absence of any violation of our organizational documents and applicable laws and orders;

validity of the Series B Shares and Warrants to be issued to Romulus;

absence of litigation and proceedings related to the agreements with Romulus;

payment of taxes; and

our capitalization.
Certain of representations and warranties are qualified as to “materiality” or “material adverse effect.”
PLAN OF DISTRIBUTION
Pursuant to the Asset Contribution Agreement, we will issue to Geron 6,537,779 Series A Shares in exchange for assets
contributed to us by Geron. Geron has agreed to distribute to its stockholders, on a pro rata basis, the Series A Shares that Geron will
acquire in the Asset Contribution transaction. Under the Asset Contribution Agreement, fractional shares will not be distributed in the
Series A Distribution, and instead will be aggregated and sold by Geron and the proceeds of the sale will be distributed ratably by
Geron to its stockholders.
Geron will not be required to make the Series A Distribution in any jurisdiction where it would be unlawful to do so
(“Excluded Jurisdictions”) or in any Exempt Jurisdiction, as defined below. With limited exceptions, to the extent required by
applicable legal requirements, we are required to use reasonable best efforts to register or qualify (or obtain an exemption from such
registration or qualification) the Series A Shares to be issued to Geron for offer and sale under the securities laws and blue sky laws of
each of the jurisdictions in which such securities will be sold and/or distributed. We are not required to (a) qualify generally to do
business in any jurisdiction where we are not then so qualified, (b) take any action that would subject us to general service of process
in any jurisdiction where we are not then so subject, or (c) register or qualify Series A Shares in any state or foreign jurisdiction in
which the stockholders of Geron hold less than 20,000 shares of Geron common stock in the aggregate (“Exempt Jurisdictions”) based
upon information provided by Geron.
Under certain circumstances, if we register or qualify the Series A Shares in an Exempt Jurisdiction (a “Voluntary
Jurisdiction”), Geron would be required to make the Series A Distribution in the Voluntary Jurisdiction. In lieu of issuing Series A
Shares in Exempt Jurisdictions (other than Voluntary Jurisdictions) or in Excluded Jurisdictions, Geron will aggregate and sell those
Series A Shares and distribute the net cash proceeds from the sale ratably to Geron’s stockholders who reside in the Exempt
Jurisdictions (other than Voluntary Jurisdictions) and Excluded Jurisdictions.
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We expect to issue to BioTime 21,773,340 Series B Shares and warrants to purchase an additional 3,150,000 Series B
Shares, in exchange for assets contributed to us under the Asset Contribution Agreement. BioTime has advised us that it has no
present plan or arrangement to sell or otherwise distribute the Series B Shares it receives in exchange for assets or the Series B Shares
that it may receive if it exercises its warrants. However, BioTime reserves the right to sell some or all of those Series B Shares, or
Series A Shares into which its Series B Shares may be converted, and some or all its warrants in the future.
Pursuant to the Stock and Warrant Purchase Agreement, we will issue to Romulus 2,136,000 Series B Shares and warrants
to purchase an additional 350,000 Series B Shares, for a total purchase price of $5,000,000 in cash. The Series B Shares and warrants
that Romulus purchases under the Stock and Warrant Purchase Agreement and any Series B Shares that Romulus may purchase
through the exercise of its warrants, and any Series A Shares into which those Series B Shares may be converted, may be sold by
Romulus without restriction under the Securities Act.
Immediately after the completion of the Series A Distribution, BioTime will hold approximately 21,823,340 Series B
Shares, constituting approximately 71.6% of our common stock as a whole, Geron stockholders will own approximately
6,537,779 Series A Shares, constituting 100% of the Series A Shares and approximately 21.4% of our common stock as a whole, and
Romulus will hold approximately 2,136,000 Series B Shares constituting approximately 7% of our common stock as a whole, that will
be issued and outstanding immediately after the Series A Distribution. The warrants that BioTime and Romulus will receive will
enable BioTime and Romulus to increase their collective ownership in us by approximately 2.2%, which would reduce the Geron
stockholders’ ownership in us to approximately 19.2%. See “SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT--Principal Shareholders.” BioTime’s percentage ownership interest in us will be higher, and Romulus’
percentage interest will be lower, if for any reason Romulus fails to make its $5,000,000 contribution, and BioTime contributes cash
and/or BioTime common shares in an amount equal in value to the cash not contributed by Romulus, since BioTime would then
receive the Series B Shares and warrants that Romulus would otherwise have received had Romulus made the cash contribution to us.
DESCRIPTION OF SECURITIES
Common Stock
Our Certificate of Incorporation currently authorizes the issuance of up to 150,000,000 shares of Common Stock comprised
of 75,000,000 shares of Series A Common Stock, par value $0.0001 per share, and 75,000,000 shares of Series B Common Stock, par
value $0.0001 per share.
There were no Series A Shares and 51,700 Series B Shares and issued and outstanding as of March 28, 2013, 50,000 of
which are held by BioTime. We will issue 6,537,779 Series A Shares and 21,773,340 Series B Shares in the Asset Contribution
transaction, and 2,136,000 Series B Shares through the Stock and Warrant Purchase Agreement with Romulus, plus warrants to
purchase an additional 3,500,000 Series B Shares. See “PLAN OF DISTRIBUTION.”
Voting Rights
Each holder of record of Series A Shares or Series B Shares is entitled to one vote for each outstanding Series A Share or
Series B Share owned on every matter properly submitted to the shareholders for their vote. The Series A Shares and Series B Shares
will vote together as a single class, without distinction as to series on all matters except as may otherwise be required by Delaware
law.
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Dividend Rights
Subject to the dividend rights of holders of any shares of the Preferred Stock that may be issued from time to time, holders
of Series A Shares and Series B Shares are entitled to any dividend declared by the Board of Directors out of funds legally available
for that purpose. We have not paid any cash dividends on our Common Stock, and it is unlikely that any cash dividends will be
declared or paid on any series of Common Stock in the foreseeable future. Instead, we plan to retain our cash for use in financing our
future operations and growth.
We may declare and pay dividends or other distributions on Series A Shares without paying a corresponding dividend or
distribution on the Series B Shares. This difference in dividend and distribution rights will allow us to distribute to the holders of our
Series A Shares the BioTime Warrants we will receive in the Asset Contribution. We plan to effect the distribution of the BioTime
Warrants to holders of our Series A Shares as promptly as practicable after Geron notifies us of the completion of the Series A
Distribution.
Our Certificate of Incorporation provides that we may not pay a dividend or distribution to the holders of any class or series
of capital stock until after Geron completes the Series A Distribution, and we complete the BioTime Warrants Distribution.
Conversion of Series B Shares into Series A Shares
The Series B Shares may be converted into Series A Shares, at our election, at any time after we distribute the BioTime
Warrants to the holders of our Series A Shares. Each Series B Share will be convertible into one Series A Share. Our Certificate of
Incorporation provides that in the event of any stock split, reverse stock split, stock dividend, reverse stock dividend, or similar
transaction with respect to either the Series A Shares or Series B Shares, we will undertake a corresponding stock split, reverse stock
split, stock dividend, reverse stock dividend, or similar transaction with respect the other series of Common Stock as well so that the
ratio of outstanding shares of the two series will remain the same.
If the date set for conversion of Series B Shares into Series A Shares will be subsequent to the record date for the payment
of a dividend or other distribution on Series B Shares, but prior to the payment of the dividend or distribution, the holders of record of
Series B Shares at the close of business on that record date will be entitled to receive the dividend or other distribution payable on or
with respect to their Series B shares on the date set for payment of that dividend or other distribution, notwithstanding the prior
conversion of their Series B Shares into Series A Shares.
We will not be required to issue or deliver fractional shares upon the conversion of Series B Shares into Series A Shares. In
determining the number of Series A Shares that we will issue upon conversion of Series B Shares we may aggregate the Series B
Shares held by each holder and if the aggregate number of Series A Shares to be issued to any Series B Share holder includes a
fraction, we will pay a cash adjustment in lieu of that fraction in an amount equal to the value of the fraction of a Series A Share.
Liquidation Rights
Subject to the prior payment of the liquidation preference to holders of any shares of Preferred Stock that may be issued,
holders of Common Stock are entitled to receive on a pro rata basis, without a distinction between Series A Shares and Series B
Shares, all of our remaining assets available for distribution to the holders of Common Stock in the event of the liquidation,
dissolution, or winding up of our operations.
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Preemptive Rights
Holders of Common Stock, regardless of series, do not have any preemptive rights to become subscribers or purchasers of
additional shares of any series of our Common Stock or of any other class or series of our capital stock.
Preferred Stock
Our Certificate of Incorporation currently authorizes the issuance of up to 5,000,000 shares of Preferred Stock, par value
$0.0001 per share. We may issue Preferred Stock in one or more series, at any time, with such powers, preferences, and rights, and
qualifications, limitations and restrictions as our Board of Directors may determine, all without further action of our shareholders. Our
Board of Directors may, by resolution, increase or decrease (but not below the number of shares of such series then outstanding) the
number of shares of any series of Preferred Stock subsequent to the issue of shares of that series. Any series of Preferred Stock which
may be authorized by the Board of Directors in the future may be senior to and have greater rights and preferences than the Common
Stock. There are no shares of Preferred Stock presently outstanding and we have no present plan, arrangement or commitment to
issue any Preferred Stock.
Warrants
We will issue warrants to purchase 3,500,000 Series B Shares, including the warrants that we will issue to BioTime under
the Asset Contribution Agreement and the warrants that we will issue to Romulus under the Stock and Warrant Purchase
Agreement. Each warrant will entitle the holder to purchase one Series B Share at a price of $5.00 per share.
How to Exercise Warrants
Warrants may be exercised in whole or in part by presentation of a warrant certificate to us and payment of the exercise
price. The purchase form on the reverse side of the warrant must be signed by the warrant holder, and if the shares purchased are to be
issued to a person other than the warrant holder, the warrant holder’s signature must be guaranteed by a financial institution that is a
participant in a recognized signature guarantee program. Payment of the exercise price of the warrants must be made by bank
cashier’s check or wire transfer.
A warrant holder may not rescind the exercise of their warrants.
Expiration Date of Warrants
The warrants will expire at 5:00 p.m. New York time on the three-year anniversary of the date on which the warrants are
issued, and the warrants may not be exercised after that date.
Adjustment of the Number of Shares and Exercise Price
The number of Series B shares issuable upon the exercise of the warrants, and exercise price per share, will be
proportionally adjusted in the event of a stock split, stock dividend, combination, reclassification of Common Stock or similar
recapitalization of the Series B Shares.
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The number of shares issuable upon the exercise of the warrants, and exercise price per share will also be adjusted if we
issue rights, options or warrants to all holders of our outstanding Common Stock, without any charge to those holders, entitling them
to subscribe for or purchase shares of Common Stock at a price per share which is lower at the record date than the then current
market price per share of Common Stock. In that case, the number of Series B Shares thereafter purchasable upon the exercise of each
warrant will be determined by multiplying the number of shares otherwise issuable upon exercise of each warrant by a fraction, of
which the numerator will be the number of shares of Common Stock outstanding on the date of issuance of such rights, options or
warrants plus the number of additional shares of Common Stock offered for subscription or purchase in connection with the rights,
options or warrants issued without charge, and of which the denominator will be the number of shares of Common Stock outstanding
on the date of issuance of those rights, options or warrants plus the number of shares which the aggregate exercise price for the total
number of shares of Common Stock issuable upon exercise of those rights, options or warrants would purchase at the current market
price per share of Common Stock at the record date.
If we distribute to all holders of our shares of Common Stock (including any distribution made in connection with a merger
in which we are the surviving corporation) evidences of our indebtedness or assets (excluding cash, dividends or distributions payable
out of consolidated earnings or earned surplus and dividends or stock dividends) or rights, options or warrants, or convertible or
exchangeable securities containing the right to subscribe for or purchase shares of Common Stock (excluding those referred to in
above), then in each case the number of shares of Common Stock purchasable upon the exercise of each warrant shall be determined
by multiplying the number of shares theretofore purchasable upon the exercise of each warrant by a fraction, of which the numerator
will be the then current market price per share of Common Stock on the date of such distribution, and of which the denominator will
be the then current market price per share of Common Stock, less the then fair value (as reasonably determined by our Board of
Directors) of the portion of the assets or evidences of indebtedness so distributed or of such subscription rights, options or warrants, or
of such convertible or exchangeable securities applicable to one share of Common Stock.
Whenever the number of shares purchasable upon the exercise of each warrant is adjusted, the price payable upon exercise
of each warrant shall be adjusted by multiplying the exercise price immediately prior to the adjustment by a fraction, of which the
numerator will be the number of shares purchasable upon the exercise of each warrant immediately prior to the adjustment, and of
which the denominator will be the number of shares purchasable immediately thereafter.
Upon the expiration of any rights, options, warrants or conversion or exchange privileges that result in an adjustment of the
number of shares issuable upon the exercise of the warrants and the exercise price, the number of shares purchasable upon the exercise
of each warrant and the exercise price of the warrants shall be readjusted and shall thereafter be such as it would have been had it been
originally adjusted (or had the original adjustment not been required, as the case may be) as if (A) the only shares of Common Stock,
if any, so issued were the shares of Common Stock actually issued or sold upon the exercise of the rights, options, warrants or
conversion or exchange rights, and (B) those shares of Common Stock were issued or sold for the consideration actually received by
us upon such exercise plus the aggregate consideration, if any, actually received by us for the issuance, sale or grant of all of those
rights, options, warrants or conversion or exchange rights whether or not exercised.
Effect of Conversion of Series B Shares into Series A Shares
If the outstanding Series B Shares are converted into Series A Shares before a warrant is exercised, the warrant holder will
be entitled to receive upon exercise of their warrants a number of Series A Shares into which the Series B Shares that otherwise would
have been issued would have been converted had they been issued immediately before the conversion of the Series B Shares into
Series A Shares.
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Preservation of Purchase Rights Upon Merger, Consolidation, and Certain Other Transactions
The Warrant Agreement governing the warrants provides that if we consolidate with or merge into another corporation, or if
we sell, transfer or lease to another corporation all or substantially all our assets, we or our successor or the corporation that purchases
us or our assets shall execute an agreement providing that each warrant holder shall have the right thereafter, either (i) upon payment
of the exercise price of the warrants in effect immediately prior to the transaction, to purchase upon exercise of their warrant the “Sale
Consideration,” or (ii) to receive, in cancellation of their warrants (and in lieu of paying the exercise price and exercising their
warrants), the Sale Consideration less a portion having a fair market value (as reasonably determined by us) equal to the exercise
price; provided, however, that no adjustment in respect of dividends, interest or other income on or from such shares or other
securities and property shall be made during the term of a warrant or upon the exercise of a warrant. The “Sale Consideration” means
the kind and amount of shares and other securities and property (including cash) which the warrant holder would have owned or have
been entitled to receive after the consolidation, merger, sale, transfer or lease had they exercised their warrants immediately prior to
the transaction.
No Rights as Shareholders.
The warrants do not confer upon the warrant holders the right to vote or to receive dividends or to consent or to receive
notice as shareholders in respect of any meeting of shareholders for the election of directors or any other matter, or any rights
whatsoever as our shareholders.
Notices to Warrant Holders
Under the Warrant Agreement governing the warrants, we will give warrant holders notice of any of the following actions
that we plan to take: (a) a declaration of any dividend payable in any securities upon Common Stock, or any distribution to holders of
Common Stock, other than a regular cash dividend, as such dividend may be increased from time to time, or a dividend payable in
shares of Common Stock); or (b) an offer to the holders of Common Stock on a pro rata basis any cash, additional shares of Common
Stock or other securities to be issued by us, or any right to subscribe for or purchase any of our securities; or (c) a dissolution,
liquidation or winding up of our business other than in connection with a consolidation, merger, sale, transfer or lease of all or
substantially all of our property, assets, and business as an entirety. We will give warrant holders the notice at least 10 days prior to
the date fixed as a record date or the date of closing the transfer books for the determination of the stockholders entitled to such
dividend, distribution, or subscription rights or for the determination of stockholders entitled to vote on such proposed dissolution,
liquidation or winding up or the date of expiration of the offer. The notice shall specify such record date or the date of closing the
transfer books or the date of expiration, as the case may be. Any failure on our part to publish or mail the a, or any failure of a warrant
holder to receive a notice, or any defect in a notice or in the publication or mailing of a notice shall not affect the validity of any action
in connection with such dividend, distribution or subscription rights, or such proposed dissolution, liquidation or winding up, or offer.
The forgoing description of the warrants is only a summary and does purport to be a complete description of all of the terms
of the warrants, which are contained in a warrant Agreement. The Warrant Agreement has been filed as an exhibit to the Registration
Statement of which this prospectus is a part. The foregoing summary is qualified in all respects by the terms of the Warrant
Agreement which is incorporated herein by reference.
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Delaware Law and Certain Bylaw Provisions
Delaware Statutory Business Combinations Provision
Upon completion of the Series A Distribution, we will be subject to the anti-takeover provisions of Section 203 of the
Delaware General Corporation Law. In general, Section 203 prohibits a publicly-held Delaware corporation from engaging in a
“business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the
person became an interested stockholder, unless the business combination is, or the transaction in which the person became an
interested stockholder was, approved in a prescribed manner or another prescribed exception applies. For purposes of Section 203, a
“business combination” is defined broadly to include a merger, asset sale or other transaction resulting in a financial benefit to the
interested stockholder, and, subject to certain exceptions, an “interested stockholder” is a person who, together with his or her
affiliates and associates, owns (or within three years prior, did own) 15% or more of the corporation’s voting stock. Section 203 could
discourage or make it more difficult to effect a change in our management or the acquisition of control by a holder of a substantial
amount of our voting stock, even if our stockholders might consider such a change to be in their best interest. These provisions are
intended to enhance the likelihood of continuity and stability in the composition of our board of directors and in the policies
formulated by the board of directors and to discourage certain types of transactions that may involve an actual or threatened change of
control of us. These provisions are designed to reduce our vulnerability to an unsolicited acquisition proposal. The provisions also
are intended to discourage certain tactics that may be used in proxy fights. Such provisions also may have the effect of preventing
changes in our management.
Advance Notice Provisions for Stockholder Proposals and Stockholder Nominations of Directors
Our bylaws provide that if a shareholder or a group of shareholders desires to nominate any person for election to our Board
of Directors, or if they desire to bring any other business before a meeting of our shareholders, the shareholder or group must first
have given timely notice of the proposal in writing to our Secretary. To be timely, a shareholder's notice must be delivered or mailed
to and received at our principal executive offices not less than 120 days prior to the one (1) year anniversary of the preceding year’s
annual meeting; provided, however, that if the date of the annual meeting is more than thirty (30) days before or more than sixty (60)
days after such anniversary date, notice by the shareholder to be timely must be delivered, or mailed and received, not later than the
ninetieth (90th) day prior to our annual meeting or, if later, the tenth (10th) day following the day on which public disclosure of the
date of our annual meeting was first made.
Transfer Agent and Registrar
The transfer agent and registrar for the Series A Shares is American Stock Transfer and Trust Company LLC, 6201 15 th
Avenue, Brooklyn, New York 11219.
INCOME TAX MATTERS
The following discussion of applicable United States federal income tax law is a general discussion only that focuses
exclusively on United States federal income tax consequences of the Series A Distribution and the BioTime Warrants
Distribution. The following discussion does not purport to address the federal income tax position of any individual tax payer, and
does not include any matters of state or local tax laws or regulations, or any matters of any tax laws or regulations of any country other
than the United States of America. The following discussion is not and should not be construed to be tax advice to any holder of
Geron stock or to any holder of Series A Shares or any recipient of any Series A Shares or BioTime Warrants. Geron stockholders
who may acquire Series A Shares in the Series A Distribution, and holders of Series A Shares (including Geron stockholders who
acquire Series A Shares in the Series A Distribution) who may acquire BioTime Warrants in the BioTime Warrants Distribution
should consult their tax advisers concerning the tax consequences of the Series A Distribution and the BioTime Warrants Distribution
to them under any and all tax laws and regulations to which they may be subject.
95
Upon completion of the Asset Contribution and Romulus’ $5,000,000 cash contribution to us, BioTime, Geron and Romulus
will, in the aggregate, own not less than 80% of our outstanding capital stock. Under §351 of the United States Internal Revenue Code
of 1986, as amended (the “Code”), BioTime, Geron, and Romulus should not recognize gain or loss from the transfer of property to us
solely in exchange for shares of our common stock. However, under §351(b) of the Code, if any of the transferors receives money or
other property in addition to shares of our common stock, any money or property that they receive will be considered “boot” and the
recipient of the “boot” should recognize gain to the extent of the fair market value of that boot.
The only boot which could be received by BioTime and Romulus would be the warrants that we will issue to them. Because
Romulus is contributing only cash it should not realize gain or income on account of its receipt of the warrants. BioTime may realize
gain to the extent of the fair market value of the warrants it receives. Geron’s rights under the Royalty Agreement may be considered
boot under §351, but any royalties that Geron may receive from the Royalty Agreement will be only speculative and will have no
determinable value at the time the Asset Contribution closes.
Geron’s Transfer of Contingent Liabilities
Geron should not recognize gain on the transfer of contingent liabilities to us as the Assumed Geron Liabilities. The Internal
Revenue Service (“IRS”) could take the position that the Assumed Geron Liabilities will reduce Geron’s basis in the Series A Shares
that Geron receives. However, the Assumed Geron Liabilities are not presently quantifiable and the amount of any reduction in basis
cannot be calculated at this time.
Geron’s Transfer of Service Contracts
In addition to other assets that qualify as property under §351, Geron will contribute contracts to us, under which we will be
entitled to receive services provided by third parties. We will be obligated to pay for those services. Generally, services are not
considered “property” for the purposes of a §351 transaction. Since we will receive contractual rights to receive services with respect
to those contracts, the IRS may take the position that the service contracts are excluded from the §351 transaction, which could affect
Geron’s participation in the “control” element of a §351 transaction under IRS Reg. §1.351-1(a)(i). However, it is not anticipated that
the transfer of service contracts will disqualify the Asset Contribution from qualifying as a §351 transaction. The service contracts are
nominal in value compared to the other assets that Geron will contribute to us in the Asset Contribution. Furthermore, with respect to
those contracts that are terminable by the service provider upon notice, the service providers are not necessarily obligated to provide
us with services.
The Series A Distribution
After the Asset Contribution, Geron will distribute its Series A Shares to its stockholders pro rata, other than stockholders
residing in certain jurisdictions. No fractional shares will be distributed. Geron stockholders who would have received fractional
shares and Geron stockholders residing in jurisdictions where the Series A Distribution will not take place, will receive cash in lieu of
the fractional shares or Series A Shares that they otherwise would have received, and they may recognize gain on the receipt that cash.
96
We have agreed that as soon as practicable after we have received notice of the completion of the Series A Distribution, we
will distribute the 8,000,000 BioTime Warrants to the holders of its Series A Shares, pro rata. No fractional warrants will be
distributed. Accordingly, the Series A Shares that we will issue to Geron in the Asset Contribution will include the right to receive the
BioTime Warrants through the BioTime Warrants Distribution. For United States federal income tax purposes, the right to receive
BioTime Warrants should be treated as the equivalent of the receipt of the BioTime Warrants.
The Series A Distribution will be taxed to the Geron stockholders as a dividend if Geron has either overall accumulated
earnings and profits, or overall current earnings and profits, including any earnings and profits for federal income tax purposes
resulting from the Series A Distribution. Geron’s most recent income statement filed with the SEC indicates that Geron had no
current earnings and profits and had no accumulated earnings and profits as of the end of the accounting period for which the
statement of income was presented. However, for federal income tax purposes, the distribution of the Series A Shares, including the
right to receive BioTime Warrants, could be a gain recognition event to Geron for federal income tax purposes to the extent of the
difference between the fair market value of the Series A Shares (including the fair market value attributable to the BioTime Warrants)
and Geron’s tax basis in the Series A Shares. Any such gain recognized by Geron would have to be taken into account in determining
whether Geron has current earnings and profits or accumulated earnings and profits.
Whether or not the Series A Distribution generates earnings and profits to Geron, the distribution of the Series A Shares with
rights to BioTime Warrants should have current or future federal income tax consequences to the Geron stockholders.
If Geron does not have overall accumulated earnings and profits or overall current earnings and profits, then:

if the fair market value of the Series A Shares, including the value attributable to the BioTime Warrants, does not
exceed the Geron stockholder’s basis in the stockholder’s Geron stock, the stockholder should recognize no taxable
gain as a result of the Series A Distribution, and will be deemed to have received a return of capital that will reduce
the stockholder’s basis in the stockholder’s Geron stock by the fair market value of the Series A Shares, including
the value attributable to the BioTime Warrants, received;

if the fair market value of the Series A Shares distributed to a Geron stockholder, including the value attributable to
the BioTime Warrants, exceeds the Geron stockholder’s basis in the stockholder’s Geron stock, then the excess
would be taxable as gain from the sale or exchange of property that may be taxed as a long-term or short-term
capital gain depending upon the stockholder’s holding period of the Geron stock.
If Geron does have earnings and profits at the time of or as a result of the Series A Distribution, then

the Asterias Series A Distribution will be taxed as a dividend to a Geron stockholder to the extent of the lesser of the
stockholder’s allocable share of Geron’s earnings and profits, and the fair market value of the Series A Shares,
including the value attributable to the BioTime Warrants, received; and

if the fair market value of the Series A Shares, including the value attributable to the BioTime Warrants, received by
a Geron stockholder exceeds the stockholder’s allocable share of Geron’s earnings and profits, the excess will be a
return of capital that (a) will reduce the stockholder’s basis in the stockholder’s Geron stock by the fair market value
of the Series A Shares, including the value attributable to the BioTime Warrants, received, and (b) if the fair market
value of the Series A Shares distributed to a Geron stockholder, including the value attributable to the BioTime
Warrants, exceeds the Geron stockholder’s basis in the stockholder’s Geron stock, then the excess would be taxable
as gain from the sale or exchange of property that may be taxed as a long-term or short-term capital gain depending
upon the stockholder’s holding period of the Geron stock.
97
A Geron stockholder’s basis in the Series A Shares will be equal to the fair market value of the Series A Shares on date of
the Series A Distribution. A Geron stockholder’s capital gains holding period for the Series A Shares should begin on the date of the
Series A Distribution.
BioTime Warrants Distribution
Any Geron stockholder who receives Series A Shares, and does not dispose of the Series A Shares before the BioTime
Warrants Distribution, will also receive BioTime Warrants. Since the taxable gain, if any, that the Geron stockholders would be
required to recognize as a result of the fair market value of the BioTime Warrants should have already been realized when they
received their Series A Shares, the distribution of the BioTime Warrants at a later date should not be a taxable event to them. A Geron
stockholder’s capital gains holding period for the BioTime Warrants should begin on the date of the BioTime Warrants Distribution.
If a Geron stockholder sells Series A Shares received in the Series A Distribution prior to the BioTime Warrants Distribution
and the purchaser of the Series A Shares receives the BioTime Warrants through the BioTime Warrants Distribution, that purchaser of
Series A Shares should not incur taxable gain on account of their receipt of the BioTime Warrants.
A Geron stockholder or other holder of Series A Shares who receives BioTime Warrants in the BioTime Warrants
Distribution will need to allocate a portion of their basis in their Series A Shares to the BioTime Warrants they receive. The amount
of basis allocable to the BioTime Warrants will be the fair market value of the BioTime Warrants on the date of the Series A
Distribution.
LEGAL MATTERS
The validity of the Series A Shares, Series B Shares, and the warrants will be passed upon for Asterias by Thompson,
Welch, Soroko & Gilbert LLP, San Francisco and San Rafael, California. A member of Thompson, Welch, Soroko, & Gilbert LLP
owns 10,000 BioTime common shares.
EXPERTS
The financial statements for the year ended December 31, 2012 included in this prospectus have been audited by Rothstein
Kass, an independent registered public accounting firm, to the extent and for the periods set forth in their report included herein, and
are so included herein in reliance upon such report given upon the authority of said firm as experts in accounting and auditing.
98
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Securities and Exchange Commission, 100 F Street N.E., Washington, D.C., a registration statement
on Form S-1 for the registration of the shares and warrants offered by this prospectus. This prospectus, which is part of the
registration statement, does not contain all of the information contained in the registration statement. For further information with
respect to us and the securities offered by this prospectus, you should refer to the registration statement, including the exhibits thereto,
which may be inspected, without charge, at the Commission’s Public Reference Room at 100 F Street N.E., Washington, D.C. 20549,
and copies of all or any part of the registration statement may be obtained from the Commission upon payment of the requisite
fees. You may obtain information on the operation of the Public Reference Room by calling the Commission at
1-800-SEC-0330. The Commission maintains an Internet site that contains reports, proxy and information statements, and other
information regarding issuers that file electronically with the Commission. The address of the site is http://www.sec.gov .
Statements contained in this prospectus as to the content of any contract or other document referred to are not necessarily
complete. In each instance reference is made to the copy of the contract or other document filed as an exhibit to the registration
statement, and each such statement is qualified in all respects by reference to the exhibit.
Upon completion of this offering, we will become subject to the information and periodic reporting requirements of the
Securities Exchange Act of 1934, as amended, and, in accordance with such requirements, will file periodic reports, proxy statements,
and other information with the SEC. These periodic reports, proxy statements, and other information will be available for inspection
and copying at the regional offices, public reference facilities, and web site of the Commission referred to above. We intend to furnish
our stockholders with annual reports containing consolidated financial statements audited by our independent registered accounting
firm.
99
ASTERIAS BIOTHERAPEUTICS, INC.
(a development stage company)
INDEX TO FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm
Balance Sheet as of December 31, 2012
Statement of Operations for the period from September 24, 2012 (date of inception) to December 31, 2012
F-2
F-3
F-4
Statement of Stockholders’ Deficit for the period from September 24, 2012 (date of inception) to December 31, 2012
Statement of Cash Flows for the period from September 24, 2012 (date of inception) to December 31, 2012
Notes to the Financial Statements
F-5
F-6
F-7
F-1
Index
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Asterias Biotherapeutics, Inc. (formerly known as BioTime Acquisition Corporation)
(a company in the development stage)
We have audited the accompanying balance sheet of Asterias Biotherapeutics, Inc. (formerly known as Biotime Acquisition
Corporation) (a company in the development stage) (the “Company”) as of December 31, 2012, and the related statement of
operations, changes in stockholders’ equity, and cash flows for the period September 24, 2012 (inception) through December 31,
2012. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company
as of December 31, 2012, and the results of its operations and its cash flows for the period September 24, 2012 (inception) through
December 31, 2012, in conformity with U.S. generally accepted accounting principles.
/s/ Rothstein Kass
New York, New York
April 2, 2013
F-2
Index
ASTERIAS BIOTHERAPEUTICS, INC.
(a company in the development stage)
BALANCE SHEET
December 31, 2012
ASSETS
CURRENT ASSETS
Prepaid expenses and other current assets
TOTAL ASSETS
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Amount due to BioTime
$
4,011
$
4,011
$
761,164
TOTAL LIABILITIES
761,164
Commitments and contingencies (see Note 5)
EQUITY
Preferred Shares, $0.0001 par value, authorized 5,000,000 shares; none issued and outstanding
Common shares, $0.0001 par value, authorized 75,000,000 Series A shares and 75,000,000 Series B shares; no
Series A shares and 51,700 Series B shares issued and outstanding at December 31, 2012
Additional paid-in capital
Deficit accumulated during the development stage
Subscription receivable
Total equity
TOTAL LIABILITIES AND EQUITY
See accompanying notes to financial statements.
F-3
5
51,735
(758,893)
(50,000)
(757,153)
$
4,011
Index
ASTERIAS BIOTHERAPEUTICS, INC.
(a company in the development stage)
STATEMENT OF OPERATIONS
For the period from September 24, 2012 (inception) to December 31, 2012
Formation and organization costs
Salaries and payroll related expenses
Other expenses
$
727,123
27,142
4,958
NET LOSS
$
758,893
Weighted average common shares outstanding — basic and diluted
Basic and diluted net loss per common share
50,117
$
See accompanying notes to the financial statements.
F-4
15.14
Index
ASTERIAS BIOTHERAPEUTICS, INC.
(a company in the development stage)
STATEMENT OF STOCKHOLDERS’ DEFICIT
For the period from September 24, 2012 (inception) to December 31, 2012
Common Shares
Series A
Series B
Shares
Amount
Shares
Amount
Common shares
issued to
BioTime on
September 24,
2012
Common shares
issued to
officer on
September 27,
2012
Net loss
Balance at
December 31,
2012
-
$
-
-
50,000
-
1,700
$
Additional
Paid-In
Capital
5 $
Accumulated Deficit
During the
Development Stage
49,995 $
-
Subscription
Receivable
$
$
-
51,700
$
(50,000) $
1,740
(758,893)
-
Stockholders'
Deficit
5 $
51,735 $
(758,893) $
See accompanying notes to financial statements
F-5
-
(50,000) $
-
1,740
(758,893)
(757,153)
Index
ASTERIAS BIOTHERAPEUTICS, INC.
(a company in the development stage)
STATEMENT OF CASH FLOWS
For the period from September 24, 2012 (inception) to December 31, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss
$
Changes in operating assets and liabilities:
Prepaid expenses
Amount due to BioTime
Net cash used in operating activities
(758,893)
(2,271)
761,164
-
NET CHANGE IN CASH AND CASH EQUIVALENTS:
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
$
-
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest
$
-
SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING AND INVESTING ACTIVITIES:
Common shares issued upon investment by BioTime
$
50,000
$
1,740
Common shares issued in exchange for Geron common shares in connection with investment by officer
See accompanying notes to financial statements.
F-6
Index
ASTERIAS BIOTHERAPEUTICS, INC.
(a company in the development stage)
NOTES TO FINANCIAL STATEMENTS
1. Organization and Basis of Presentation
Asterias Biotherapeutics, Inc. (a company in the development stage) ( “Asterias”) was incorporated in Delaware on
September 24, 2012. Asterias’ primary focus is the emerging field of regenerative medicine. Asterias’ core technologies center on
stem cells capable of becoming all of the cell types in the human body, a property called pluripotency. Asterias plans to develop
therapeutic products from “pluripotent” stem cells to treat diseases or injuries in a variety of medical fields, including neurology,
oncology, cardiology, metabolic diseases, ophthalmology, orthopedics, and blood and vascular diseases.
Asterias is considered to be in the development stage as defined in Statement of Financial Accounting Standards Board
Accounting Standards Codification (“ASC”) Topic 915, “ Development Stage Entities,” and is subject to the risks associated with
activities of development stage companies.
At December 31, 2012, Asterias had not commenced operations nor generated revenue to date. All activity through
December 31, 2012 primarily relates to Asterias’s formation and the execution of the Asset Contribution Agreement described
below. Asterias has selected December 31 as its fiscal year end.
On January 4, 2013, Asterias entered into an Asset Contribution Agreement with BioTime, Inc., its parent company
(“BioTime”), and Geron Corporation (‘Geron’) pursuant to which Asterias will receive certain assets in exchange for shares of Series
A common stock, par value $0.0001 per share (“Series A Shares”) that it will issue to Geron, and shares of Series B common stock,
par value $0.0001 per share (“Series B Shares”) and warrants to purchase Series B shares that Asterias will issue to BioTime (the
“Asset Contribution”). Asterias has also entered into a Stock and Warrant Purchase Agreement with an investor through which it will
receive cash in exchange for Series B Shares and warrants.
In the Asset Contribution, Asterias will receive the following assets from Geron and BioTime:
From Geron:

certain patents and patent applications and all related active prosecution cases, trade secrets, know-how and certain
other intellectual property rights, and all of Geron’s goodwill with respect to the technology of Geron directly
related to the research, development and commercialization of certain products and know-how related to hES cells;

certain biological materials and reagents (including master and working cell banks, original and seed banks, and
research, pilot and GMP grade lots and finished product);

certain laboratory equipment;

certain contracts;

certain books, records, lab notebooks, clinical trial documentation, files and data;
F-7
Index

certain regulatory filings, including the investigational new drug applications filed with the United States Food and
Drug Administration for clinical trials for GRNOPC-1 for spinal cord injury, including a Phase I safety study of
oligodendrocyte progenitor (GRNOPC-1) cells in patients with neurologically complete, subacute spinal cord injury
(Protocol No. CP35A007), and long term follow up of subjects who received GRNOPC1 (Protocol No. CP35A008),
and the clinical trials for VAC1 for acute myelogenous leukemia, including a Phase I/II study of active
immunotherapy with GRNVAC1, autologous mature dendritic cells transfected with mRNA encoding human
telomerase reverse transcriptase (hTERT), in patients with acute myelogenous leukemia (AML) in complete
remission (Protocol No. CP06-151) (the “Clinical Trials”); and

certain abandoned or inactive patents and abandoned or inactive patent applications.
From BioTime:

8,902,077 BioTime common shares, which for purposes of the Asset Contribution Agreement were valued at
$30,000,000 based upon the aggregate volume weighted-average per share closing price of BioTime common shares
as listed on the NYSE MKT for the twenty (20) consecutive trading days immediately preceding January 4, 2013
(the “Average Price”);

Warrants to subscribe for and purchase 8,000,000 additional BioTime common shares (the “BioTime Warrants”)
exercisable for a period of five years at a price of $5.00 per share, subject to pro rata adjustment for certain stock
splits, reverse stock splits, stock dividends, recapitalizations and other transactions;

$5,000,000 in cash (the “BioTime Cash Contribution”);

10% of the shares of common stock of BioTime’s subsidiary OrthoCyte Corporation issued and outstanding as of
January 4, 2013;

6% of the ordinary shares of BioTime’s subsidiary Cell Cure Neurosciences, Ltd. issued and outstanding as of
January 4, 2013; and

a quantity of certain human hES cell lines produced under “good manufacturing practices” sufficient to generate
master cell banks, and non-exclusive, world-wide, royalty-free licenses to use those cell lines and certain patents
pertaining to stem cell differentiation technology for any and all purposes.
Cash Contribution by Private Investor
A private investor has agreed to contribute $5,000,000 in cash to Asterias for 2,136,000 Series B Shares and warrants to
purchase 350,000 additional Series B Shares. That investment will be made in conjunction with the closing of the Asset Contribution
under the Asset Contribution Agreement.
If for any reason the private investor fails to make the $5,000,000 contribution, BioTime will contribute cash, BioTime
common shares, or a combination of cash and BioTime common shares in an amount equal in value to the cash not contributed by the
private investor. Any BioTime common shares so contributed will be valued at the Average Price and BioTime will receive Series B
shares and warrants that the investor would have received had it made the cash contribution to Asterias. Average Price is defined as
$3.37 per share, based upon the aggregate volume weighted-average per share closing price of BioTime common shares as listed on
the NYSE MKT for the twenty (20) consecutive trading days immediately preceding January 4, 2013
F-8
Index
Assumed Liabilities
At the closing of the Asset Contribution, Asterias will assume all obligations and liabilities of Geron and its affiliates
relating to:

the Contributed Geron Assets and attributable to periods, events or circumstances after the Asset Contribution;

obligations of Geron and its affiliates to be performed following the Asset Contribution, under contracts included in
the Contributed Geron Assets;

an appeal filed in the United States District Court in Civil Action No. C12-04813 (the “ViaCyte Appeal”) seeking
the reversal of two adverse determinations by the United States Patent and Trademark Office’s Board of Patent
Appeals and Interferences with respect to two patent applications in U.S. Patent Interference 105,734, involving US
patent 7,510,876 (ViaCyte) and US patent application 11/960,477 (Geron), and U.S. Patent Interference 105,827
involving US patent 7,510,876 (ViaCyte) and US patent application 12/543,875 (Geron). Asterias will also assume
the patent interferences upon which the ViaCyte Appeal is based, as well as certain oppositions filed by Geron
against certain ViaCyte, Inc. patent filings in Australia and in the European Patent Office; provided, that Asterias
will not assume expenses incurred by Geron relating to the appeal or the other ViaCyte patent interference and
opposition proceedings prior to the closing of the Asset Contribution; and

the Clinical Trials.
2. Summary of Significant Accounting Policies
Basis of Presentation – Asterias has historically operated as part of BioTime, and not as a stand-alone company. The
financial statements presented herein, and discussed below, have been prepared on a stand-alone basis and are derived from the
financial statements and accounting records of BioTime using the historical basis of assets and liabilities of Asterias. The financial
statements are presented in accordance with accounting principles generally accepted in the U.S. and with the accounting and
reporting requirements of Regulation S-X of the Securities and Exchange Commission ("SEC"). As of December 31, 2012, BioTime
has consolidated the results of Asterias into BioTime’s consolidated results, as BioTime has the ability to control Asterias’ operating
and financial decisions and policies through the ownership of Series B shares of Asterias. BioTime has a 96.7% ownership of the
outstanding common stock of Asterias, at December 31, 2012.
Development Stage Company – Asterias complies with the reporting requirements of ASC 915, “Development Stage
Entities.”
Use of estimates – The preparation of financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
F-9
Index
Income taxes – Asterias’ operations were historically included in BioTime’s consolidated U.S. federal and certain state
income tax returns. The provision for income taxes has been determined as if Asterias had filed separate tax returns for the periods
presented. Accordingly, the effective tax rate of Asterias in future years could vary from its historical effective tax rates depending on
the future legal structure of Asterias and related tax elections. The historical deferred tax assets, including the operating losses and
credit carryforwards generated by Asterias, will remain with BioTime. Asterias accounts for income taxes in accordance with the
accounting principles generally accepted in the United States of America (“GAAP”) requirements, which prescribe the use of the asset
and liability method, whereby deferred tax asset or liability account balances are calculated at the balance sheet date using current tax
laws and rates in effect. Valuation allowances are established when necessary to reduce deferred tax assets when it is more likely than
not that a portion or all of the deferred tax assets will not be realized. The guidance also prescribes a recognition threshold and a
measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax
return. For those benefits to be recognized, a tax position must be more-likely-than-not sustainable upon examination by taxing
authorities. Asterias will recognize accrued interest and penalties related to unrecognized tax benefits as income tax expense. No
amounts were accrued for the payment of interest and penalties as of December 31, 2012. Management is currently unaware of any
tax issues under review.
Loss per share – Basic net loss per share is computed by dividing net loss attributable to Asterias, Inc. by the
weighted-average number of shares of common stock outstanding for the period. Diluted net loss per share reflects the
weighted-average number of shares of common stock outstanding plus the potential effect of dilutive securities or contracts which are
convertible to common stock, such as options and warrants (using the treasury stock method) and shares issuable in future periods,
except in cases where the effect would be anti-dilutive. There were no options or warrants issued and outstanding as of December 31,
2012.
Effect of recently issued and recently adopted accounting pronouncements – There are no recently issued accounting
standards which are not yet effective which Asterias believes would materially impact the financial statements.
3. Liquidity
Asterias has incurred operating losses and negative cash flow since inception, and had an accumulated deficit of $758,893 as
of December 31, 2012. Since inception, Asterias has received funding for formation and operating costs from BioTime. Asterias
plans to invest significant resources in research and development in the field of regenerative medicine. Asterias expects to continue to
incur operating losses and negative cash flows. BioTime will continue to fund Asterias’s business activities into 2013 prior to the
consummation of the Asset Contribution.
4. Related Party Transactions
Between September 24, 2012 and December 31, 2012, Asterias issued 51,700 Series B shares (“Initial Shares”) to its parent
company and an officer (“Initial Stockholders”). On September 24, 2012 Asterias issued 50,000 Series B shares to BioTime for $1.00
per share and on September 27, 2012 issued 1,700 Series B shares to an officer in exchange for 1,000 shares of common stock of a
publicly traded company other than BioTime with a market value of $1,740 at the time of investment.
Asterias has not yet received the proceeds from the issuance of the Series B shares to BioTime, therefore $50,000 is
recorded as a subscription receivable on Asterias’ balance sheet and statement of stockholders’ deficit as of and for the year ended
December 31, 2012.
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Index
5. Commitments and Contingencies
Asterias had no commitments other than those under the Asset Contribution Agreement as of December 31, 2012. BioTime
entered into a property lease agreement on behalf of Asterias subsequent to year end. See Note 7.
6. Income Taxes
Asterias’ operations were historically included in BioTimes’s consolidated U.S. federal and certain state income tax
returns. The provision for income taxes has been determined as if Asterias had filed separate tax returns for the periods
presented. Accordingly, the effective tax rate of Asterias in future years could vary from its historical effective tax rates depending on
the future legal structure of Asterias and related tax elections. The historical deferred tax assets, including the operating loss and
credit carryforwards, generated by Asterias, will remain with BioTime.
The primary components of the net deferred tax assets at December 31, 2012 were as follows:
Deferred tax assets:
Net operating loss carryforwards
Valuation allowance
Net deferred tax assets
$
$
301,904
(301,904)
-
Income taxes differed from the amounts computed by applying the U.S. federal income tax of 34% to pretax losses from
operations as a result of the following:
(34%)
40%
(6%)
0%
Computed tax benefit at federal statutory rate
Permanent differences
Losses for which no benefit has been recognized
State tax benefit, net of effect on federal income taxes
Formation, operating costs, and other credits
As of December 31, 2012, Asterias has net operating loss carryforwards of approximately $758,000 for federal and state tax
purposes, which expire through 2032.
No tax benefit has been recorded through December 31, 2012 because of the net operating losses incurred and a full
valuation allowance has been provided. A valuation allowance is provided when it is more likely than not that some portion of the
deferred tax assets will not be realized. Asterias established a 100% valuation allowance for all periods presented due to the
uncertainty of realizing future tax benefits from its net operating loss carryforwards and other deferred tax assets.
Internal Revenue Code Section 382 places a limitation (“Section 382 Limitation”) on the amount of taxable income that can
be offset by net operating loss (“NOL”) carryforwards after a change in control (generally greater than 50% change in ownership
within a three-year period) of a loss corporation. California has similar rules. Generally, after a control change, a loss corporation
cannot deduct NOL carryforwards in excess of the Section 382 Limitation. Due to these “change in ownership” provisions, utilization
of the NOL and tax credit carryforwards may be subject to an annual limitation regarding their utilization against taxable income in
future periods.
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Asterias will file an income tax return in the U.S. federal jurisdiction, and may file income tax returns in various U.S. states
and foreign jurisdictions.
Asterias may be subject to potential examination by U.S. federal, U.S. states or foreign jurisdiction authorities in the areas of
income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income
among various tax jurisdictions and compliance with U.S. federal, U.S. state and foreign tax laws. Asterias's management does not
expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
7. Subsequent Events
These financial statements were approved by management and the Board of Directors, and were issued on April 2,
2013. Subsequent events have been evaluated through that date.
On January 7, 2013, BioTime purchased certain laboratory equipment from Geron on behalf of Asterias for approximately
$104,000, in accordance with the Asset Contribution Agreement, under which the equipment does not constitute Asset Contribution
from Geron.
On January 8, 2013, BioTime entered into a lease agreement (“Master Lease”) for an office and research facility located
at 230 Constitution Drive, Menlo Park, California that BioTime has subleased to Asterias. The lease is for a term of three years
commencing January 7, 2013. BioTime will pay base rent of $31,786 per month, plus real estate taxes and certain costs of
maintaining the leased premises. As additional consideration for the lease, BioTime issued to the landlord 73,553 BioTime common
shares having a market value of $242,726, determined based upon the average closing price of BioTime’s common shares on the
NYSE MKT for a designated period of time prior to the signing of the lease. BioTime agreed to register those shares under the
Securities Act and if it fails to file a registration statement for such purpose within 120 days the landlord will have a right to return the
shares to BioTime, in which case the base rent will increase to $38,528 per month, retroactive to the commencement date of the lease.
On April 1, 2013, BioTime and Asterias executed a sublease agreement under which Asterias will assume all liabilities of
BioTime under the Master Lease agreement effective January 7, 2013 through January 6, 2016.
On April 1, 2013, Asterias executed a Promissory Note (“Promissory Note”) for a principal amount of up to $5,000,000,
payable to BioTime for funds that may be advanced to Asterias by BioTime. Under the terms of the Promissory Note, Asterias shall
not request advances in excess of $5,000,000 in the aggregate, regardless of whether the outstanding principal balance of advances has
been reduced to an amount less than the maximum loan amount of $5,000,000 through payments made by Asterias to BioTime on the
Promissory Note.
Interest shall accrue and be payable at the rate of 0.24% per annum, compounded monthly. Interest will be computed on the
basis of a 365-day year and the actual number of days elapsed. The outstanding principal balance of the Promissory Note, plus all
unpaid accrued interest thereon, will be due and payable on the earlier of (a) December 31, 2013, and (b) the “Closing Date” as
defined in the Asset Contribution Agreement. Principal, interest, and all other sums payable under the Promissory Note will be
payable in lawful money of the United States of America. All payments received on the Note will be applied first to any costs of
collection (including all attorneys' fees and expenses), second to the payment of accrued interest, and third to the payment of principal.
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The unpaid principal balance of the Promissory Note, together with all accrued interest, will, at BioTime’s option, become
immediately due and payable in full, without demand or notice, upon the occurrence of any "Event of Default." For purposes of this
Promissory Note, the following are Events of Default:
(1)
the failure of Asterias to pay when due any interest, principal, or other amount payable under this Promissory
Note, if such failure to pay continues for a period of seven days;
(2)
Asterias (a) becoming the subject of any order for relief in a proceeding under any Debtor Relief Law; (b)
becoming unable to pay, or admitting in writing Asterias’ inability to pay, Asterias’ debts as they mature; (c) making an
assignment for the benefit of creditors; (d) for the benefit of creditors, applying for or consenting to the appointment of any
receiver, trustee, custodian, conservator, liquidator, rehabilitator, or similar officer for Asterias or for all or any part of
Asterias’ property or assets; (e) instituting or consenting to any proceeding under any Debtor Relief Law with respect to
Asterias or all or any part of Asterias’ property or assets, or the institution of any similar case or proceeding without the
consent of Asterias who is, or whose property or assets are, subject to such case or proceeding if such case or proceeding
continues undismissed or unstayed for 60 calendar days; or (f) the dissolution or liquidation of Asterias that is a corporation
or other entity; or
(3)
(a) the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitation, or similar officer for
Asterias or for all or any part of Asterias’ property or assets without the application or consent of Asterias who is, or whose
property or assets are, subject to such appointment, if such appointment continues undischarged or unstayed for 60 calendar
days; or (b) the issuance or levy of any judgment, writ, warrant of attachment or execution or similar process against all or
any material part of the property or assets of Asterias if such process is not released, vacated or fully bonded within 60
calendar days after its issue or levy; or
(4)
the taking of any action by Asterias to initiate any of the actions described in paragraphs (2) and (3) above.
If BioTime does not receive any installment payment within seven days of the date on which such installment was due, a
late charge in the amount of 5% of the past due installment will be immediately due and payable. Upon the occurrence of an Event of
Default, the unpaid principal balance of the Note, together with all accrued but unpaid interest on the date of the Event of Default, will
bear interest at the rate of 12% per annum until paid in full.
Asterias may, at its option, prepay the unpaid principal balance of the Promissory Note, in whole or in part, together with all
accrued interest, through the business day of prepayment, on the portion so prepaid, without premium or penalty.
On March 10, 2013, Asterias and BioTime executed a Shared Facilities and Services Agreement (“Shared Facilities
Agreement”). Under the terms of the Shared Facilities Agreement, BioTime will allow Asterias to use its premises and equipment
located at Alameda, California for the sole purpose of conducting business. BioTime will provide basic accounting, billing,
bookkeeping, payroll, treasury, collection of accounts receivable (excluding the institution of legal proceedings or taking of any other
action to collect accounts receivable), payment of accounts payable, and other similar administrative services to Asterias. BioTime
may also provide the services of attorneys, accountants, and other professionals who may also provide professional services to
BioTime and its other subsidiaries. BioTime will also provide Asterias with the services of its laboratory and research personnel,
including BioTime employees and contractors, for the performance of research and development work for Asterias at the premise.
BioTime will charge Asterias a fee for the services and usage of facilities, equipment, and supplies aforementioned. For
each billing period, BioTime will equitably prorate and allocate its employee costs, equipment costs, insurance costs, lease costs,
professional costs, software costs, supply costs, and utilities costs, between BioTime and Asterias based upon actual documented use
and cost by or for Asterias or upon proportionate usage by BioTime and Asterias, as reasonably estimated by BioTime. Asterias shall
pay 105% of the allocated costs (the “Use Fee”). The allocated cost of BioTime employees and contractors who provide services
will be based upon records maintained of the number of hours of such personnel devoted to the performance of services.
The Use Fee will be determined and invoiced to Asterias on a quarterly basis for each calendar quarter of each calendar
year. If the Shared Facilities Agreement terminates prior to the last day of a billing period, the Use Fee will be determined for the
number of days in the billing period elapsed prior to the termination of the Shared Facilities Agreement. Each invoice will be payable
in full by Asterias within 30 days after receipt. Any invoice or portion thereof not paid in full when due will bear interest at the rate of
15% per annum until paid, unless the failure to make a payment is due to any inaction or delay in making a payment by BioTime
employees from Asterias funds available for such purpose, rather than from the unavailability of sufficient funds legally available for
payment or from an act, omission, or delay by any employee or agent of Asterias.
In addition to the Use Fees, Asterias will reimburse BioTime for any out of pocket costs incurred by BioTime for the
purchase of office supplies, laboratory supplies, and other goods and materials and services for the account or use of Asterias,
provided that invoices documenting such costs are delivered to Asterias with each invoice for the Use Fee. Furthermore, BioTime will
have no obligation to purchase or acquire any office supplies or other goods and materials or any services for Asterias, and if any such
supplies, goods, materials or services are obtained for Asterias, BioTime may arrange for the suppliers thereof to invoice Asterias
directly.
The Shared Facilities Agreement terminates on December 31, 2016, provided that, unless otherwise terminated under
another provision of the Shared Facilities Agreement, the term of the Shared Facilities Agreement will automatically be renewed and
the termination date will be extended for an additional year each year after December 31, 2016, unless either party gives the other
party written notice stating that the Shared Facilities Agreement will terminate on December 31 of that year.
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No dealer, salesperson or other person has been authorized in connection with this offering to give any information or to make
any representations other than those contained in this Prospectus. This Prospectus does not constitute an offer or a
solicitation in any jurisdiction to any person to whom it is unlawful to make such an offer or solicitation. Neither the delivery
of this Prospectus nor any sale made hereunder shall, under any circumstances, create an implication that there has been no
change in the circumstances of Asterias or the facts herein set forth since the date hereof.
TABLE OF CONTENTS
Prospectus Summary
Risk Factors
Use of Proceeds
Market For Our Common Equity And Warrants
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Business
Management
The Asset Contribution Agreement
Investor Funding
Plan of Distribution
Description of Securities
Income Tax Matters
Legal Matters
Experts
Where You Can Find More Information
Index to Financial Statements
[LOGO]
ASTERIAS BIOTHERAPEUTICS, INC.
6,537,779 Shares of Series A Common Stock
23,909,340 Shares of Series B Common Stock
3,500,000 Warrants
3,500,000 Shares of Series B Common Stock Issuable Upon the Exercise of Warrants
PROSPECTUS
______, 2013
3
11
29
31
33
34
58
74
88
89
90
95
98
98
99
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Index
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13.
Other Expenses of Issuance and Distribution
The estimated expenses of the Registrant in connection with the issuance and distribution of the securities being registered
hereby are as follows:
Registration Fee-Securities and Exchange Commission
$
12,104.99
Stock Exchange Listing Fees
$
*
Printing and Engraving Expenses
$
*
Accounting Fees
$
*
Legal Fees and Expenses
Miscellaneous Expenses
$
*
$
*
$
*
Total
*To be filed by amendment.
Item 14.
Indemnification of Directors and Officers.
Our Amended and Restated Certificate of Incorporation provides that the liability of the directors to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director is eliminated to the fullest extent permissible under
Delaware law, except for the liability of a director: (i) for any breach of the director's duty of loyalty to the corporation or its
stockholders; (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii)
under §174 of the Delaware General Corporation Law; or (iv) for any transaction from which the director derived an improper
personal benefit. The corporation is authorized to indemnify directors, officers, and agents to the fullest extent permissible under
Delaware law.
Section 145 of the Delaware General Corporation Law permits a corporation to indemnify any director or officer of the
corporation against expenses (including attorney’s fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred in connection with any action, suit or proceeding brought by reason of the fact that such person is or was a director or officer
of the corporation, if such person acted in good faith and in a manner that he reasonably believed to be in, or not opposed to, the best
interests of the corporation, and, with respect to any criminal action or proceeding, if he or she had no reason to believe his or her
conduct was unlawful. In a derivative action, (i.e., one brought by or on behalf of the corporation), indemnification may be provided
only for expenses actually and reasonably incurred by any director or officer in connection with the defense or settlement of such an
action or suit if such person acted in good faith and in a manner that he or she reasonably believed to be in, or not opposed to, the best
interests of the corporation, except that no indemnification shall be provided if such person shall have been adjudged to be liable to the
corporation, unless and only to the extent that the court in which the action or suit was brought shall determine that the defendant is
fairly and reasonably entitled to indemnity for such expenses despite such adjudication of liability.
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We plan to carry insurance policies insuring our directors and officers against certain liabilities that they may incur in
their capacity as directors and officers. In addition, we may enter into indemnification agreements with our directors and executive
officers.
Item 15.
Recent Sales of Unregistered Securities
During September 2012, we sold 50,000 shares of Series B Common Stock to BioTime, Inc. for $50,000 in cash, and
during October 2012, we sold 1,700 shares of Series B Common Stock to our Chief Executive Officer. The issuance and sale of the
Series B Common Stock was effected without registration under the Securities Act of 1933, as amended, in reliance upon the
exemption from registration under Section 4(2) thereof.
Item 16.
Exhibits and Financial Statement Schedules.
Exhibit
Numbers
3.1
Description
Amended and Restated Certificate of Incorporation*
3.2
4.1
Bylaws*
Specimen of Common Share Certificate†
4.2
4.3
Form of Warrant Agreement*
Form of Warrant (Included in Exhibit 4.2)*
10.1
Asset Contribution Agreement, dated January 4, 2013, by and among BioTime, Inc., BioTime Acquisition Corporation,
and Geron Corporation.(1)
10.2
Stock and Warrant Purchase Agreement, dated January 4, 2013, between BioTime Acquisition Corporation and Romulus
Films Ltd.*
10.3
Sublease dated April 1, 2013 between BioTime, Inc. and BioTime Acquisition Corporation.
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10.4.
Shared Facilities and Services Agreement, dated April 1, 2013, between Asterias Biotherapeutics, Inc. and BioTime, Inc.*
10.5
2013 Equity Incentive Plan*
10.6
Promissory Note, dated April 1, 2013, payable to BioTime, Inc.*
5.1
Opinion of Counsel†
23.1
Consent of Rothstein Kass*
23.2
Consent of Counsel†
(1) Incorporated by reference to Current Report on Form 8-K filed by BioTime, Inc. on January 8, 2013.
* Filed herewith.
† To be filed by amendment
Item 17.
Undertakings.
The undersigned undertakes:
(1) To file during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;
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(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the aggregate represent a fundamental change in the information
set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set
forth in the “Calculation of Registration Fee” table in the effective registration statement.;
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration statement; provided, however, that paragraphs (a)(1)(i),
(a)(1)(ii) and (a)(1)(iii) of this section do not apply if the information required to be included in a post-effective amendment by those
paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of
prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold
at the termination of the offering.
(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
(i) Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement
as of the date the filed prospectus was deemed part of and included in this Registration Statement; and
(ii) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in
reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the
information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration
statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of
securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person
that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the
securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is
part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration
statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such
effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately prior to such effective date; or
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(5) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
(i) If the registrant is relying on Rule 430B (§ 230.430B of this chapter):
(A) Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration
statement as of the date the filed prospectus was deemed part of and included in the registration statement; and
(B) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration
statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing
the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration
statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of
securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person
that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the
securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is
part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration
statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such
effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately prior to such effective date; or
(ii) If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement
relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule
430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after
effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is
part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any
statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such
document immediately prior to such date of first use.
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(6) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial
distribution of the securities:
The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this
registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or
sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser
and will be considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed
pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or
referred to by the undersigned registrant;
(iii) The portion of any other free writing prospectus relating to the offering containing material information about the
undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers, and
controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than payment by the Registrant of
expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by
final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City of Alameda, State of California on April 3,
2013.
ASTERIAS BIOTHERAPEUTICS, INC.
s/Thomas Okarma
Thomas Okarma
Chief Executive Officer
By
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
Signature
s/Thomas Okarma
THOMAS OKARMA
s/Peter S. Garcia
Title
Date
April 3, 2013
Chief Executive Officer and Director (Principal
Executive Officer)
Chief Financial Officer (Principal Financial and
Accounting Officer)
April 3, 2013
s/Alfred D. Kingsley
ALFRED D. KINGSLEY
Director
April 3, 2013
s/Andrew C. von Eschenbach
ANDREW C. von ESCHENBACH,
M.D.
Director
April 3, 2013
PETER S. GARCIA
II-7
EXHIBIT 3.1
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
BIOTIME ACQUISITION CORPORATION
Thomas Okarma and Judith Segall, due hereby certify that:
1.
They are, respectively, the President and Chief Executive Officer and the Secretary of BioTime Acquisition
Corporation, which was duly incorporated in the State of Delaware on September 24, 2012 (the “corporation”).
2.
The Certificate of Incorporation of the corporation is amended and restated in full to read as follows:
For the purpose of organizing a corporation under the Delaware General Corporation Law, the undersigned hereby certifies
that:
Article 1
Name
The name of this corporation is Asterias Biotherapeutics, Inc.
Article 2
Address
The address of the corporation’s registered office in the State of Delaware is 1675 South State Street, Suite B, Dover, DE
19901 in Kent County. The name of its registered agent at such address is Capitol Services, Inc.
Article 3
Purpose
The purpose of the corporation is to engage in any lawful act or activity for which a corporation may be organized under the
General Corporation Law of Delaware.
Article 4
Capital Stock
The corporation is authorized to issue two classes of stock, which shall be designated “Common Stock” and “Preferred
Stock.” The number of shares of Common Stock which the corporation is authorized to issue is One Hundred Fifty Million
(150,000,000). The Common Stock shall be divided into series as provided in Section 4.1. The number of shares of Preferred Stock
which the corporation is authorized to issue is Five Million (5,000,000), with a par value of $0.0001 per share. The Preferred Stock
shall be issuable in series as provided in Section 4.2.
4.1
Common Stock
4.1.1
Shares and Series. Seventy Five Million (75,000,000) shares of Common Stock with a par value of
$0.0001 per share will be of a series designated Series A Common Stock, and Seventy Five Million (75,000,000) shares of Common
Stock with a par value of $0.0001 per share will be of a series designated Series B Common Stock .
(a)
Each share of Series A Common Stock will be identical in all respects and will have equal
rights, powers and privileges. All shares of Series A Common Stock acquired by the corporation, whether upon purchase, exchange,
or otherwise, will be authorized but unissued shares of Series A Common Stock and may be reissued by resolution of the board of
directors of the corporation.
(b)
Each share of Series B Common Stock will be identical in all respects and will have equal
rights, powers and privileges. All shares of Series B Common Stock acquired by the corporation, whether upon purchase, exchange,
or otherwise, will be authorized but unissued shares of Series B Common Stock and may be reissued by resolution of the board of
directors of the corporation.
4.1.2
Voting Powers.
(a)
Holders of Series A Common Stock will be entitled to one vote for each share of such stock
held of record, and holders of Series B Common Stock will be entitled to one vote for each share of such stock held of record, in each
case, upon all matters that may be submitted to them for a vote, regardless of whether such holders are voting together as a single class
without distinction as to series, or as a separate series of Common Stock.
(b)
Except (i) as may otherwise be provided in this Certificate or (ii) as may otherwise be required
by the laws of the State of Delaware, the holders of shares of Series A Common Stock and the holders of shares of Series B Common
Stock will vote as one class with respect to the election of directors and with respect to all other matters to be voted on by stockholders
of the corporation , and no separate class or series vote of the holders of either series of Common Stock will be required for the
approval of any such matter.
4.1.3
Dividends and Distributions Generally.
(a)
Subject to the applicable terms of any Preferred Stock and the provisions of paragraph 4.1.3(b),
paragraph 4.1.3(c), and paragraph 4.1.3(d), dividends on the Series A Common Stock and Series B Common Stock may be declared
and paid out of assets of the corporation legally available for such purpose.
(b)
Except as provided in paragraph 4.1.3(e), the corporation shall not pay a dividend or
distribution to the holders of Series B Common Stock (other than a distribution in Series B Common Stock or securities that are
convertible into or exercisable or exchangeable for Series B Common Stock), unless the corporation concurrently pays a dividend or
distribution in an equal amount per share to the holders of Series A Common Stock.
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(c)
Except as provided in paragraph 4.1.3(d) or Section 4.1.6, the corporation may pay a dividend
or distribution to the holders of Series A Common Stock at any time and from time to time as determined by the board of directors of
the corporation, without concurrently paying a dividend or distribution to holders of Series B Common Stock, notwithstanding the
amounts of dividends previously declared or paid on, or the liquidation rights of, the Series B Common Stock, or any other factor.
(d)
Except as provided in paragraph 4.1.3(e), the corporation shall not (i) (A) pay a dividend in
shares of any Series of Common Stock or make a distribution in shares of any Series of Common Stock to holders of any Series of
Common Stock, (B) subdivide its outstanding shares of any Series of Common Stock, (C) combine its outstanding shares of any Series
of Common Stock into a smaller number of shares of such Series or (D) reclassify or change (including a change to the right to
receive, or a change into, as the case may be (other than with respect to a merger or consolidation pursuant to the exercise of appraisal
rights), shares of stock, other securities, property, cash or any combination thereof) any Series of Common Stock (including any such
reclassification or change in connection with a consolidation or merger in which the corporation is the surviving corporation), unless
the corporation shall concurrently (ii) (A) pay a dividend in shares of the other Series of Common Stock or make a distribution in
shares of the other Series of Common Stock to holders of such other Series of Common Stock, (B) subdivide its outstanding shares of
the other Series of Common Stock, (C) combine its outstanding shares of the other Series of Common Stock into a smaller number of
shares of such other Series, or (D) reclassify or change (including a change to the right to receive, or a change into, as the case may be
(other than with respect to a merger or consolidation pursuant to the exercise of appraisal rights), shares of stock, other securities,
property, cash or any combination thereof) its other Series of Common Stock (including any such reclassification or change in
connection with a consolidation or merger in which the corporation is the surviving corporation), in each case in a proportionate
manner such that immediately after the payment of such dividends in shares, or distributions of shares, or subdivisions of shares, or
combinations of shares, or reclassification or change of shares the number of outstanding shares of Series A Common Stock and
Series B Common Stock shall be in the same ratio as the ratio immediately before such event.
(e)
Notwithstanding paragraphs 4.1.3(b) and 4.1.3(d), the corporation may pay or make a disparate
dividend or distribution per share of Series A Common Stock or Series B Common Stock (whether in the amount of such dividend or
distribution payable per share, the form in which such dividend or distribution is payable, the timing of the payment, or otherwise) if
such disparate dividend or distribution is approved in advance by the affirmative vote (or written consent if action by written consent
is permitted) of the holders of a majority of the outstanding shares of Series A Common Stock and Series B Common Stock, each
voting separately as a class.
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(f)
Notwithstanding anything contained herein to the contrary, the corporation shall not otherwise
pay a dividend or distribution to the holders of any class or series of capital stock until after the completion of the Series A
Distribution and the BioTime Warrant Distribution (as each such term is defined in the Asset Contribution Agreement).
4.1.4
Conversion Rights
(a)
Conversion of Series B Common Stock into Series A Common Stock at the Option of the
corporation.
(1)
To the extent permitted by Section 151(e) of the Delaware General Corporation Law,
the corporation shall have the right, exercisable at any time by resolution of its board of directors of the corporation, to convert each
outstanding share of Series B Common Stock into one fully paid and nonassessable share of Series A Common Stock.
(2)
If the corporation determines to convert the shares of Series B Common Stock into
Series A Common Stock pursuant to this Section 4.1.4, such conversion will occur on a date specified by the board of directors of the
corporation (“Conversion Date”) on or prior to the 45th day following the date on which the board of directors of the corporation
determines the Conversion Date, and will otherwise be effected in accordance with the provisions of this Section 4.1.4. Any
Conversion Date may be extended, and any determination to convert Series B Common Stock into Series A Common Stock may be
rescinded prior to the Conversion Date, if deemed necessary or appropriate, in the discretion of the board of directors of the
corporation. If the corporation determines not to undertake such conversion following the determination of the Conversion Date, the
corporation may at any time thereafter establish a new Conversion Date in accordance with this paragraph 4.1.4(a).
(3)
Notwithstanding anything contained herein to the contrary, no conversion of Series B
Common Stock shall be permitted pursuant to this Section 4.1.4 prior to the completion of the Series A Distribution and the BioTime
Warrant Distribution.
(b)
No Adjustments for Dividends. No adjustments in respect of dividends or other distributions
will be made upon the conversion of any shares of Series B Common Stock into Series A Common Stock; provided , however , that
if the Conversion Date will be subsequent to the record date for the payment of a dividend or other distribution on Series B Common
Stock, but prior to the payment of such dividend or distribution, the holders of record of shares of Series B Common Stock at the close
of business on such record date will be entitled to receive the dividend or other distribution payable on or with respect to such shares
on the date set for payment of such dividend or other distribution, notwithstanding the prior conversion of such shares.
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(c)
Surrender of Stock Certificates. Before any holder of shares of Series B Common Stock will
be entitled to receive a certificate or certificates representing shares of any kind of capital stock or cash in lieu of a fractional share
with respect to such shares pursuant to this Section 4.1.4, such holder must surrender, at such place as the corporation will specify,
certificates representing such shares of Series B Common Stock, properly endorsed or assigned for transfer, unless the corporation
waives such requirement. The corporation will, as soon as practicable after such surrender of certificates representing shares of Series
B Common Stock, deliver, or cause to be delivered, at the office of the transfer agent for the shares or other securities to be delivered,
to the holder for whose account shares of Series B Common Stock were so surrendered, or to the nominee or nominees of such holder,
a certificate or certificates representing the number of whole shares of the kind of capital stock, or cash, securities (other than capital
stock), or other assets to which such holder or nominee will be entitled as aforesaid, together with any payment for fractional
securities contemplated by paragraph 4.1.4(i).
(d)
Effect of Conversion. Except as provided in paragraph 4.1.4(b), from and after any Conversion
Date, all rights of a holder of shares of Series B Common Stock that were converted into shares of Series A Common Stock on such
Conversion Date will cease except for the right, upon surrender of a certificate or certificates representing such shares of Series B
Common Stock to receive a certificate or certificates representing the shares of Series A Common Stock into which such shares were
converted, together with any payment for fractional securities contemplated by paragraph 4.1.4(i), and such holder will have no other
or further rights in respect of the shares of Series B Common Stock so converted, including, but not limited to, any rights with respect
to any cash, securities, or other assets which are reserved or otherwise designated by the corporation as being held for the satisfaction
of the corporation's obligations to pay or deliver any cash, securities or other assets upon the conversion, exercise or exchange of any
securities convertible into or exchangeable for Series B Common Stock outstanding as of the date of such conversion. No holder of a
certificate which immediately prior to the Conversion Date represented shares of Series B Common Stock will be entitled to receive
any dividend or other distribution with respect to shares of any kind of capital stock into which the Series B Common Stock was
converted until surrender of such holder's certificate for a certificate or certificates representing shares of Series B Common Stock;
provided, that upon such surrender, there will be paid to the holder, with respect to the number of whole shares of the kind of capital
stock issued upon conversion of such Series B Common Stock, the amount of any dividends or other distributions (without interest)
which theretofore became payable with respect to a record date after the Determination Date, but that were not paid by reason of the
foregoing; provided, however, that only the holders of the Series A Common Stock following the completion of the Series A
Distribution shall be entitled to receive the BioTime Warrants (as defined in the Asset Contribution Agreement) pursuant to the
BioTime Warrant Distribution. From and after the Conversion Date, the corporation will, however, be entitled to treat certificates
representing shares of Series B Common Stock that have not yet been surrendered for conversion in accordance with paragraph
4.1.4(c) as evidencing the ownership of the number of whole shares of Series A Common Stock for which the shares of Series B
Common Stock represented by such certificates will have been converted in accordance with this Section 4.1.4, notwithstanding the
failure of the holder thereof to surrender such certificates.
(e)
Notice of Conversion. In the event of any conversion of shares of Series B Common Stock into
shares of Series A Common Stock, not less than 15 days prior to the Conversion Date, the corporation will (i) if any Series A
Common Stock or Series B Common Stock is then Publicly Traded, announce publicly by press release that all outstanding shares of
Series B Common Stock will be converted into Series A Common Stock on the Conversion Date set forth in such press release, and
(ii) give notice of such conversion to each holder of outstanding shares of Series B Common Stock, setting forth:
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(1)
subject to Section 4.1.4(a)(3), the Conversion Date, which will be 45 days (or such
earlier date as the board of directors of the corporation may set) following the Determination Date;
(2)
a statement that all outstanding shares of Series B Common Stock will be converted;
(3)
the number of shares of Series A Common Stock to be received in accordance with
Section 4.1.4(a)(1) with respect to each share of Series B Common Stock; and
(4)
the place or places where certificates representing shares of Series B Common Stock,
properly endorsed or assigned for transfer (unless the corporation waives such requirement), are to be surrendered.
(f)
Other Announcements. All public announcements made pursuant to this Section 4.1.4 may
include such further statements, and the corporation reserves the right to make such further public announcements, as may be required
by law or the rules of the any national securities exchange on which the Series A Common Stock or Series B Common Stock is listed
or as the board of directors of the corporation may, in its discretion, deem appropriate.
(g)
Mailing of Certain Notices. Any notice sent to a holder of Series A Common Stock or Series B
Common Stock pursuant to this Section 4.1.4 will be sent by first-class mail, postage prepaid to such holder's address as the same
appears on the transfer books of the corporation.
(h)
Failure to Give Notice. Neither the failure to mail any notice required by this Section 4.1.4 to
any particular holder of Series A Common Stock or Series B Common Stock nor any defect in such notice will affect (i) the
sufficiency of the notice with respect to any other holder of outstanding shares of Series A Common Stock or Series B Common
Stock, or (ii) the validity of any action taken pursuant to this Certificate.
(i)
Fractional Shares. The corporation will not be required to issue or deliver fractional shares of
any class or series of capital stock or any other securities in a smaller than authorized denomination to any holder of Series A
Common Stock or Series B Common Stock upon any conversion, dividend, or other distribution. In connection with the
determination of the number of shares of any class or series of capital stock that will be issuable or the amount of other securities that
will be deliverable to any holder of record of Series A Common Stock or Series B Common Stock upon any such conversion,
dividend, or other distribution (including any fractions of shares or securities), the corporation may aggregate the shares of Series A
Common Stock or Series B Common Stock, as applicable, held at the relevant time by such holder of record. If the aggregate number
of shares of capital stock or other securities to be issued or delivered to any holder of Series A Common Stock or Series B Common
Stock includes a fraction, the corporation will pay a cash adjustment in lieu of such fraction in an amount equal to the value of such
fraction (without interest)as of the Trading Day specified for such purposes by the board of directors of the corporation, or as of a date
determined by the board of directors of the corporation for such purpose if such securities are not Publicly Traded. For purposes of
the preceding sentence, “value” of any fraction will equal the product (rounded, if necessary, to the nearest whole cent) obtained by
multiplying such fraction by the Fair Value of one such share or the minimum authorized denomination of such other security as of the
Trading Day or other date so specified.
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(j)
Certain Definitions.
(1)
“Asset Contribution Agreement” means that certain Asset Contribution Agreement
dated January 4, 2013, by and among the corporation, BioTime, Inc., and Geron Corp., including any amendments thereof.
(2)
“BioTime Warrant Distribution” has the meaning ascribed in the Asset Contribution
Agreement.
(3)
“Determination Date” means the date on which the board of directors of the
corporation sets a Conversion Date for the conversion of outstanding shares of Series B Common Stock in to shares of Series A
Common Stock.
(4)
“Outstanding,” when used with respect to the shares of any series of Common Stock,
will include, without limitation, the shares of such series, if any, held by any subsidiary of the corporation, except as otherwise
provided by applicable law with respect to the exercise of voting rights. No shares of any series of Common Stock (or securities that
are convertible into or exercisable or exchangeable for Common Stock) reacquired by the corporation will be deemed outstanding.
(5)
“Series A Distribution” has the meaning ascribed in the Asset Contribution
Agreement.
(6)
“Publicly Traded” means, with respect to shares of capital stock or other securities,
that such shares or other securities are traded on the New York Stock Exchange, NYSE MKT, Nasdaq Stock Market, or other a
national securities exchange or are quoted on the or OTC Bulletin Board or other over-the-counter market.
(7)
“Trading Day” means each day on which the relevant share or security is traded on a
national securities exchange (including the New York Stock Exchange, the NYSE MKT, and the Nasdaq Stock Market), or quoted on
the Nasdaq Stock Market, OTC Bulletin Board, or the over-the-counter market.
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4.1.5
Transfer Taxes. The corporation will pay any and all documentary, stamp or similar issue or transfer
taxes that may be payable in respect of the issue or delivery of a certificate or certificates representing any shares of capital stock
and/or other securities on conversion of shares of Common Stock pursuant to this Certificate of Incorporation. The corporation will
not, however, be required to pay any tax that may be payable in respect of any issue or delivery of a certificate or certificates
representing any shares of capital stock in a name other than that in which the shares of Common Stock so converted were registered
and no such issue or delivery will be made unless and until the Person requesting the same has paid to the corporation or its transfer
agent the amount of any such tax, or has established to the satisfaction of the corporation or its transfer agent that such tax has been
paid.
4.1.6
Liquidation and Dissolution; Merger or Consolidation.
(a)
Liquidation and Dissolution. In the event of a liquidation, dissolution or winding up of the
corporation, whether voluntary or involuntary, after payment or provision for payment of the debts and liabilities of the corporation
and subject to the prior payment in full of the preferential amounts to which any series of Preferred Stock is entitled, the holders of
shares of Series A Common Stock and the holders of shares of Series B Common Stock will be entitled to receive ratably all assets of
the corporation available for distribution to holders of Common Stock, without distinction as to series.
(b)
Merger or Consolidation. In the event of the consolidation or merger of the corporation with or
into any other corporation or other entity, the holders of shares of Series A Common Stock and the holders of shares of Series B
Common Stock will be treated as Common Stock without distinction as to series.
4.2
Preferred Stock.
The Preferred Stock may be issued in one or more series as the board of directors of the corporation may by resolution or
resolutions designate. The board of directors of the corporation is authorized to fix by resolution or resolutions the designations and
the powers, preferences and rights, and the qualifications, limitations or restrictions and the number of shares of any series of
Preferred Stock and to determine or alter the rights, preferences, privileges, and restrictions granted to or imposed upon the Preferred
Stock as a class, or upon any wholly unissued series of Preferred Stock. The board of directors may, by resolution, increase or
decrease (but not below the number of shares of such series then outstanding) the number of shares of any series of Preferred Stock
subsequent to the issue of shares of that series.
Article 5
Limitation on Liability and Indemnification
The liability of the directors of the corporation to the corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director is eliminated to the fullest extent per missible under the laws of the State of Delaware; provided that this
provision shall not eliminate or limit the liability of a director: (i) for any breach of the director's duty of loyalty to the corporation or
its stockholders; (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii)
under § 174 of the Delaware General Corporation Law; or (iv) for any transaction from which the director derived an improper
personal benefit. The corporation is authorized to indemnify directors, officers, and agents to the fullest extent permissible under
Delaware law.
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Article 6
Corporate Governance Matters
6.1
Bylaws.
The board of directors of the corporation shall have the power to make, amend and repeal the bylaws of the corporation
(except insofar as the bylaws of the corporation adopted by the stockholders shall otherwise provide). Any bylaws made by the board
of directors under the powers conferred hereby may be amended or repealed by the board of directors or by the stockholders.
6.2
Number of Directors
The number of directors of the corporation shall be fixed from time to time by, or in the manner provided in, the bylaws of
the corporation, unless otherwise restricted by this Certificate of Incorporation.
6.3
Ballots
Elections of directors need not be by written ballot unless the bylaws of the corporation shall so provide.
3.
The foregoing Amended and Restated Certificate of Incorporation has been duly approved by the board of directors
of the corporation.
4.
The foregoing Amended and Restated Certificate of Incorporation has been duly approved by the required vote of
stockholders in accordance with Section 242 and 245 of the General Corporation Law of the State of Delaware.
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IN WITNESS WHEREOF, the undersigned has caused this Amended and Restated Certificate of Incorporation to be duly
executed on behalf of the corporation at Alameda, California this 11th day of March, 2013.
s/Thomas Okarma
Thomas Okarma
President and Chief Executive Officer
s/Judith Segall
Judith Segall
Secretary
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EXHIBIT 3.2
BYLAWS OF
BIOTIME ACQUISITION CORPORATION
ARTICLE I
Offices
Section 1. Principal Office. Offices may be established and maintained at such place or places, either within or without the
State of Delaware, as the Board of Directors may from time to time designate. The Board of Directors shall fix the location of the
principal executive office of the corporation at any place within or without the State of Delaware. If the principal executive office is
located outside the State of Delaware, and the corporation has one or more business offices in the State of Delaware, the Board of
Directors shall fix and designate a principal business office in the State of Delaware.
ARTICLE II
Meetings of Stockholders
Section 1. Place of Meetings. All meetings of stockholders shall be held at such place, either within or without the State of
Delaware, as the Board of Directors may designate. If no designation is made, the meeting shall be held at the principal executive
office of the corporation.
Section 2. Annual Meetings. The annual meetings of stockholders shall be held once each year on a date and time
designated by the Board of Directors, but in any event not less frequently than once every 13 months. At each annual meeting,
directors shall be elected to serve during the ensuing year and until their successors are elected and qualified; reports of the affairs of
the corporation shall be considered, and any other business may be transacted which is within the powers of the stockholders.
At any annual meeting of the stockholders, only such business shall be conducted as shall have been brought before the
meeting (i) by or at the direction of the Board of Directors or (ii) by any stockholder of the corporation who is entitled to vote with
respect thereto and who complies with the notice procedures set forth in this Section 2. For business to be properly brought before an
annual meeting by a stockholder (a “Proposing Stockholder”), the Proposing Stockholder must have given timely notice thereof in
writing to the Secretary of the corporation. To be timely, a Proposing Stockholder's notice must be delivered or mailed to and
received at the principal executive offices of the corporation not less one hundred twenty (120) days prior to the one-year anniversary
of the preceding year’s annual meeting; provided, however, that if the date of the annual meeting is more than thirty (30) days before
or more than sixty (60) days after such anniversary date, notice by the stockholder to be timely must be so delivered, or mailed and
received, not later than the ninetieth (90th) day prior to such annual meeting or, if later, the tenth (10th) day following the day on
which public disclosure of the date of such annual meeting was first made. In no event shall any adjournment of an annual meeting or
the announcement thereof commence a new time period for the giving of timely notice as described above. A Proposing
Stockholder's notice to the Secretary shall set forth as to each matter such Proposing Stockholder proposes to bring before the annual
meeting (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such
business at the annual meeting, (ii) the text of the proposal or business, including the text of any resolutions proposed for
consideration, (iii) the name and address, as they appear on the corporation's books, of the Proposing Stockholder, (iv) the class,
series, and number of shares of the corporation's capital stock that are “beneficially owned” within the meaning of Rule 13d-3 under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”) by such Proposing Stockholder, (v) any material interest of
the Proposing Stockholder in such business or proposal, (vi) a reasonably detailed description of all agreements, arrangements and
understandings between the Proposing Stockholder and any other stockholder of the corporation or any other person or entity,
including the name and address of each other stockholder or other person or entity, in connection with the proposal of such business
by such stockholder, and (vii) any other information relating to such Proposing Stockholder that would be required to be disclosed in a
proxy statement or other filing required to be made in connection with solicitations of proxies or consents by such Proposing
Stockholder in support of the business proposed to be brought before the meeting pursuant to Section 14(a) of the Exchange Act. For
purposes of this Section 2, the term “Proposing Stockholder” shall mean (a) the stockholder providing the notice of business proposed
to be brought before an annual meeting, (b) the beneficial owner or beneficial owners, if different, on whose behalf the notice of the
business proposed to be brought before the annual meeting is made, and (c) any “affiliate” or “associate” (as such terms are defined in
Rule 12b-2 under the Exchange Act) of such stockholder or beneficial owner.
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A Proposing Stockholder shall update and supplement their notice of intent to bring business before the meeting, if
necessary, so that the information provided or required to be provided in such notice pursuant to this Section 2 shall be true and
correct as of the record date for the meeting and as of the date that is ten (10) business days prior to the meeting or any adjournment or
postponement of the meeting. Each such update and supplement shall be delivered to, or mailed and received by, the Secretary of the
corporation at the principal executive offices of the corporation not later than (i) five (5) business days after the record date for the
meeting in the case of the update and supplement required to be made as of the record date, and (ii) not later than eight (8) business
days prior to the date for the meeting in the case of the update and supplement required to be made as of ten (10) business days prior
to the meeting or any adjournment or postponement of the meeting; provided that if it is not practicable for the Proposing Stockholder
to provide the required update or supplement within by such eight (8) business day deadline prior to any adjournment or postponement
of the meeting, then the update or supplement must be delivered to the Secretary of the corporation on the first practicable date prior to
the date to which the meeting has been adjourned or postponed.
Notwithstanding anything in these by-laws to the contrary, no business shall be brought before or conducted at an annual
meeting except in accordance with the provisions of this Section 2. The officer of the corporation or other person presiding at the
annual meeting shall, if the facts so warrant, determine and declare to the meeting that business was not properly brought before the
meeting in accordance with such provisions and, if he should so determine, he shall so declare to the meeting and any such business so
determined to be not properly brought before the meeting shall not be transacted.
Section 3. Special Meetings. Special meetings of the stockholders, for any purpose or purposes whatsoever, may be called
at any time by the Chairman of the Board, a majority of the directors then in office even if less than a quorum of the authorized
number of directors, or by one or more stockholders entitled to cast not less than 10% of the votes eligible to the cast at that meeting.
Upon request in writing to the Chairman of the Board, the President, or the Secretary, specifying the general nature of the
business proposed to be transacted, sent by certified mail or telegraphic or other electronic facsimile transmission or delivered to such
officer in person, by any person or persons entitled to call a special meeting of stockholders, it shall be the duty of such officer
forthwith to cause notice to be given to the stockholders entitled to vote that a meeting will be held on a date requested by the person
or persons calling the meeting; provided, that the date of the meeting requested by such person or persons calling the meeting shall be
not less than 10 nor more than 60 days after the receipt of such request.
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Section 4. Notice of Stockholders' Meetings. All notices of meetings of stockholders shall be sent or otherwise given in
accordance with Section 5 of this Article II not less than 10 nor more than 60 days before the date of the meeting. The notice shall
state the place, if any, date and hour of the meeting, the means of remote communications, if any, by which stockholders and proxy
holders may be deemed to be present in person and vote at such meeting, the record date for determining the stockholders entitled to
vote at the meeting, if such date is different from the record date for determining stockholders entitled to notice of the meeting, and, in
the case of a special meeting, the purpose or purposes for which the meeting is called.
Section 5. Manner of Giving Notice; Affidavit of Notice. Notice of any meeting of stockholders shall be given either
personally or by first-class mail or telegraphic, electronic or other written communication, charges prepaid, addressed to the
stockholder at the address of that stockholder appearing on the books of the corporation or given by the stockholder to the corporation
for the purpose of notice. If no such address appears on the corporation's books or is given, notice shall be deemed to have been given
if sent to that stockholder by first-class mail or telegraphic, electronic or other written communication to the corporation's principal
executive office, or if published at least once in a newspaper of general circulation in the county where that office is located. Notice
shall be deemed to have been given at the time when delivered personally or deposited in the mail or electronic transmission.
If any notice addressed to a stockholder at the address of that stockholder appearing on the books of the corporation is
returned to the corporation by the United States Postal Service marked to indicate that the United States Postal Service is unable to
deliver the notice to the stockholder at that address, all future notices or reports shall be deemed to have been duly given without
further mailing if these shall be available to the stockholder on written demand of the stockholder at the principal executive office of
the corporation for a period of 1 year from the date of the giving of the notice.
An affidavit of the mailing or other means of giving any notice of any stockholders' meeting shall be executed by the
Secretary, assistant secretary, or any transfer agent of the corporation giving the notice, and shall be filed and maintained in the minute
book of the corporation.
Section 6. Quorum. The presence in person or by proxy of the holders of a majority of the shares entitled to vote at any
meeting, annual or special, shall constitute a quorum for the transaction of business. The stockholders present at a duly called or held
meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum, if any action taken (other than adjournment) is approved by at least a majority of the shares
required to constitute a quorum.
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Section 7. Adjourned Meeting and Notice Thereof. Any stockholders' meeting, annual or special, whether or not a quorum
is present, may be adjourned from time to time by the vote of a majority of the shares, the holders of which are either present in person
or represented by proxy, but in the absence of a quorum at the commencement of the meeting, or if no quorum can be subsequently
raised, no other business may be transacted at such meeting.
When any meeting of stockholders, either annual or special, is adjourned to another time or place, notice of the adjourned
meeting need not be given if the time and place are announced at the meeting at which the adjournment is taken, provided that if the
adjournment is for more than thirty (30) days from the date set for the original meeting, or if after the adjournment a new record date
is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the
meeting. At any adjourned meeting the corporation may transact any business which might have been transacted at the original
meeting.
Section 8. Voting. The stockholders entitled to vote at any meeting of stockholders shall be determined in accordance with
the provisions of Section 11 of this Article II, subject to the provisions of Section 217 of the Delaware General Corporation Law
(relating to voting shares held by a fiduciary, in the name of a corporation, or in joint ownership). The stockholders' vote may be by
voice vote or by ballot, provided, however, that any election for directors must be by ballot if demanded by any stockholder before the
voting has begun if there are any nominees seeking election who have not been nominated by the Board of Directors or a committee of
the Board of Directors. On any matter other than the election of directors, any stockholder may vote part of the shares in favor of the
proposal and refrain from voting the remainder shares or vote them against the proposal, but, if the stockholder fails to specify the
number of shares which the stockholder is voting affirmatively, it will be conclusively presumed that the stockholder's approving vote
is with respect to all shares that the stockholder is entitled to vote. If a quorum is present, the affirmative vote of the majority of the
shares represented at the meeting and entitled to vote on any matter (other than the election of directors) shall be the act of the
stockholders, unless the vote of a greater number or voting by classes is required by Delaware General Corporation Law or by the
certificate of incorporation.
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Section 9. Consent of Absentees. The transactions of any meeting of stockholders, either annual or special, however called
and noticed and wherever held, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum be
present either in person or by proxy, and if, either before or after the meeting, each of the persons entitled to vote, not present in
person or by proxy, signs a written waiver of notice, or a consent to the holding of such meeting, or an approval of the minutes
thereof. The waiver of notice or consent need not specify either the business to be transacted or the purpose of any annual or special
meeting of stockholders, except that, if action is taken or proposed to be taken for approval of any of those matters specified in the
second paragraph of Section 4 of this Article II, the waiver of notice or consent shall state the general nature of the proposal. All such
waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting.
Attendance by a person at a meeting shall also constitute a waiver of notice of that meeting, except when the person objects,
at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened, and except
that attendance at a meeting is not a waiver of any right to object to the consideration of matters not included in the notice of the
meeting if that objection is expressly made at the meeting.
Section 10. Stockholder Action by Written Consent Without a Meeting. Any action that may be taken at any annual or
special meeting of stockholders may be taken without a meeting and without prior notice, if a consent in writing, setting forth the
action so taken, is signed by the holders of outstanding shares having not less than the minimum number of votes that would be
necessary to authorize or take that action at a meeting at which all shares entitled to vote on that action were present and voted. All
such consents shall be filed with the Secretary of the corporation and shall be maintained in the corporate records. Any stockholder
giving a written consent, or the stockholder's proxy holders, or a transferee of the shares or a personal representative of the stockholder
or their respective proxy holders, may revoke the consent by a writing received by the Secretary of the corporation before written
consents of the number of shares to authorize the proposed action have been filed with the Secretary.
If corporate action is taken without a meeting by less than unanimous written consent of stockholders, the Secretary shall
give prompt notice of the taking of the corporate action to those stockholders who have not consented in writing and who, if the
action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for notice of such meeting had
been the date that written consents signed by a sufficient number of holders to take the action were delivered to the corporation as
provided in Delaware General Corporation Law Section 228(c).
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Section 11. Record Date for Stockholder Notice, Voting, and Giving Consents. For purposes of determining the
stockholders entitled to notice of any meeting or to vote or entitled to give consent to corporate action without a meeting, the Board of
Directors may fix, in advance, a record date, which shall not be more than sixty (60) days nor less than ten (10) days before the date of
any meeting or action, and in this event only stockholders of record on the date so fixed are entitled to notice and to vote or to give
consents, as the case may be, notwithstanding any transfer of any shares on the books of the corporation after the record date, except
as otherwise provided in the Delaware General Corporation Law.
If the Board of Directors does not so fix a record date:
(a) The record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall
be at the close of business on the business day next preceding the day on which notice is given or, if notice is waived, at the close of
business on the business day next preceding the day on which the meeting is held.
(b) The record date for determining stockholders entitled to give consent to corporate action in writing without a
meeting, (i) when no prior action by the Board of Directors has been taken, shall be the first date on which the written consent is
delivered to the corporation, or (ii) when prior action of the Board of Directors has been taken, shall be at the close of business on the
day on which the Board of Directors adopts the resolution relating to that action.
Section 12. Proxies. Every person entitled to vote for directors or on any other matter shall have the right to do so either in
person or by one or more agents authorized by a written proxy signed by the person and filed with the Secretary of the corporation. A
proxy shall be deemed signed if the stockholder's name is placed on the proxy (whether by manual signature, typewriting, telegraphic
transmission, or otherwise) by the stockholder or the stockholder's attorney-in-fact. A validly executed proxy which does not state
that it is irrevocable shall continue in full force and effect unless (i) revoked by the person executing it, before the vote pursuant to that
proxy, by a writing delivered to the corporation stating that the proxy is revoked, or by a subsequent proxy executed by, or attendance
at the meeting and voting in person by, the person executing the proxy; or (ii) written notice of the death or incapacity of the maker of
that proxy is received by the corporation before the vote pursuant to that proxy is counted, provided, however, that no proxy shall be
valid after the expiration of three (3) years from the date of the proxy, unless otherwise provided for in the proxy. The revocability of
a proxy that states on its face that it is irrevocable shall be governed by the provisions of Section 212(e) of the Delaware General
Corporation Law.
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Section 13. Inspectors of Election. Before any meeting of stockholders, the Board of Directors may appoint any persons
other than nominees for office to act as inspectors of election at the meeting or its adjournment. If no inspectors of election are so
appointed, the chairman of the meeting may, and on the request of any stockholder or a stockholder's proxy shall, appoint inspectors of
election at the meeting. The number of inspectors shall be either one (1) or three (3). If inspectors are appointed at a meeting on the
request of one or more stockholders or proxies, the holders of a majority of shares or their proxies present at the meeting shall
determine whether one (1) or three (3) inspectors are to be appointed. If any person appointed as inspector fails to appear or fails or
refuses to act, the chairman of the meeting may, and upon the request of any stockholder or a stockholder's proxy shall, appoint a
person to fill that vacancy.
These inspectors shall:
(a) Ascertain the number of shares outstanding and the voting power of each, determine the shares represented at
the meeting, and the validity of proxies and ballots;
(b) Count and tabulate all votes and ballots;
(c) Determine and retain for a reasonable period a record of the disposition of any all challenges; and
(d) Certify the inspectors’ determination of the number of shares represented at the meeting, and the inspectors’
count of all votes and ballots.
ARTICLE III
Directors
Section 1. Powers. Subject to the provisions of the Delaware General Corporation Law and any limitations in the certificate
of incorporation and these bylaws relating to action required to be approved by the stockholders or by the outstanding shares, the
business and affairs of the corporation shall be managed and all corporate powers shall be exercised by or under the direction of the
Board of Directors.
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Section 2. Number and Qualification of Directors. The authorized number of directors shall be not less than three (3) and
the exact number of directors shall be fixed by approval of the board of directors.
Section 3. Election and Term of Office. The directors shall be elected at each annual meeting of stockholders but, if any
such annual meeting is not held or the directors are not elected thereat, the directors may be elected at any special meeting of
stockholders held for that purpose. All directors shall hold office until their respective successors are elected, or until death,
resignation or removal.
Section 4. Vacancies. Vacancies in the Board of Directors may be filled by a majority of the remaining directors, though
less than a quorum, or by a sole remaining director. Each director so elected shall hold office until the next annual meeting of the
stockholders and until a successor has been elected and qualified.
A vacancy or vacancies in the Board of Directors shall be deemed to exist in the event of the death, resignation, or removal
of any director, the increase in the number of directors authorized, or if the Court of Chancery has removed a director for conviction of
a felony, or if the stockholders fail, at any meeting of stockholders at which any director or directors are elected, to elect the number of
directors to be voted for at that meeting.
The stockholders may elect a director or directors at any time to fill any vacancy or vacancies not filled by the directors, but
any such election by written consent shall require the consent of a majority of the outstanding shares entitled to vote.
Any director may resign effective on giving written notice to the Chairman of the Board, the President, the Secretary, or the
Board of Directors, unless the notice specifies a later time for that resignation to become effective. Unless otherwise specified therein,
the acceptance of such resignation shall not be necessary to make it effective. If the resignation of a director is effective at some
future time, the Board of Directors may elect a successor to take office when the resignation becomes effective.
No reduction of the authorized number of directors shall have the effect of removing any director before that director's term
of office expires.
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Section 5. Place of Meetings and Meetings by Telephone. Regular meetings of the Board of Directors may be held at any
place within or outside the State of Delaware that has been designated from time to time by resolution of the Board of Directors. In
the absence of such a designation, regular meetings shall be held at the principal executive office of the corporation. Special meetings
of the Board of Directors shall be held at any place within or outside the State of Delaware that has been designated in the notice of
the meeting or, if not stated in the notice or if there is no notice, at a principal executive office of the corporation. Any meeting,
regular or special, may be held by conference telephone or similar communication equipment, so long as all directors participating in
the meeting can hear one another, and all such directors shall be deemed to be present in person at the meeting.
Section 6. Regular Meetings. Regular meetings of the Board of Directors shall be held, without call or notice, immediately
following each annual meeting of stockholders. Other regular meetings may be held without call or notice at such time and place as
may be fixed by the Board of Directors from time to time.
Section 7. Special Meetings. Special meetings of the Board of Directors for any purpose or purposes may be called at any
time by the Chairman of the Board or the President or the Secretary or any two directors.
Notice of the time and place of special meetings shall be delivered personally or by telephone to each director or sent by
first-class mail or electronic transmission, charges prepaid, addressed to each director at that director's address as it is shown on the
records of the corporation. In case the notice is mailed, it shall be deposited in the United States mail at least four (4) days before the
time of the holding of the meeting. In case the notice is delivered personally, or by telephone or electronic transmission, it shall be
delivered personally or by telephone or by electronic transmission at least forty-eight (48) hours before the time of the holding of the
meeting. Any oral notice given personally or by telephone may be communicated either to the director or to a person at the office of
the director who the person giving the notice has reason to believe will promptly communicate it to the director. The notice need not
specify the purpose of the meeting nor the place if the meeting is to be held at the principal executive office of the corporation.
Section 8. Action Without Meeting. Any action by the Board of Directors or of any committee may be taken without a
meeting if all members of the Board of Directors or such committee shall individually or collectively consent in writing to such
action. Such written consent or consents shall be filed with the minutes of the proceedings of the Board of Directors.
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Section 9. Quorum. A majority of the authorized number of directors shall be necessary to constitute a quorum for the
transaction of business, except to adjourn as hereinafter provided. Every act or decision done or made by a majority of the directors
present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board of Directors, subject to the
provisions of Section 144 of the Delaware General Corporation Law (as to approval of contracts or transactions in which a director
has a financial interest), and Section 145 of the Delaware General Corporation Law (as to indemnification of directors). A meeting at
which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action taken
is approved by at least a majority of the required quorum for that meeting.
Section 10. Waiver of Notice. The transactions of any meeting of the Board of Directors, however called or noticed or
wherever held, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum be present and if, either
before or after the meeting, each of the directors not present signs a written waiver of notice or a consent to holding such meeting or
an approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the corporate records or made a part of
the minutes of the meeting. Notice of a meeting shall also be deemed given to any director who attends the meeting without
protesting, before or at its commencement, the lack of notice to that director.
Section 11. Adjournment. A majority of the directors present, whether or not constituting a quorum, may adjourn any
meeting to another time and place.
Section 12. Notice of Adjournment. Notice of the time and place of holding an adjourned meeting need not be given, unless
the meeting is adjourned for less than twenty-four (24) hours, in which case notice of the time and place shall be given before the time
of the adjourned meeting to the directors who were not present at the time of the adjournment. Notice under this Section 12 shall be
given in the manner specified in Section 7 of this Article III, except that the time for notice shall be no later than twenty-four (24)
hours before the holding of the adjourned meeting.
Section 13. Fees and Compensation. Directors and members of committees may receive such compensation, if any, for
their services, and such reimbursement for expenses, as may be fixed or determined by resolution of the Board of Directors. This
Section 13 shall not be construed to preclude any director from serving the corporation in any other capacity as an officer, agent,
employee, or otherwise, and receiving compensation for those services.
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Section 14. Removal of Directors. The entire Board of Directors or any individual director may be removed as provided by
the Delaware General Corporation Law.
Section 15. Conduct of Meetings. Directors' meetings shall be presided over by the Chairman of the Board, or, in the
absence of the Chairman of the Board, by the President, or in the absence of both such officers, by a director chosen by a majority of
the directors present. The Secretary of the corporation shall act as secretary of the meetings of the Board of Directors. In case the
Secretary shall be absent from any meeting, the presiding officer may appoint any person to act as secretary of the meeting.
ARTICLE IV
Committees
Section 1. Committees of Directors. The Board of Directors may designate one or more committees, each committee to
consist of one or more of the directors of the corporation. The Board may designate one or more directors as alternate members of
any committee, who may replace any absent or disqualified member at any meeting of the committee. Subject to any committee
charter or resolution of the Board of Directors establishing the qualification of members of any committee, in the absence or
disqualification of a member of a committee, the member or members present at any meeting and not disqualified from voting,
whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to
act at the meeting in the place of any such absent or disqualified member. Any such committee shall have and may exercise all the
powers and authority of the Board of Directors in the management of the business and affairs of the corporation, and may authorize
the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in
reference to the following matter: (i) approving or adopting, or recommending to the stockholders, any action or matter (other than the
election or removal of directors) expressly required by this chapter to be submitted to stockholders for approval or (ii) adopting,
amending or repealing any bylaw of the corporation.
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Section 2. Meetings and Action of Committees. Meetings and action of committees shall be governed by, and held and
taken in accordance with, the provisions of Article III of these bylaws, Section 5 (place of meetings), 6 (regular meetings), 7 (special
meetings and notice), 8 (action without meeting), 9 (quorum), 10 (waiver of notice), 11 (adjournment), and 12 (notice of
adjournment), with such changes in the context of those bylaws as are necessary to substitute the committee and its members for the
Board of Directors and its members, except that the time of regular meetings of committees may be determined either by resolution of
the Board of Directors or by resolution of the committee; special meetings of committees may also be called by resolution of the
Board of Directors; and notice of special meetings of committees shall also be given to all alternate members, who shall have the right
to attend all meetings of the committee. The Board of Directors may adopt rules for the government of any committee not
inconsistent with the provisions of these bylaws.
ARTICLE V
Officers
Section 1. Designation. The officers of the corporation shall be a President, a Secretary and a Chief Financial Officer. The
corporation may also have, at the discretion of the Board of Directors, a Chairman of the Board, one or more Vice Presidents, one or
more Assistant Secretaries, one or more Assistant Treasurers, and such other officers as may be appointed in accordance with the
provisions of Section 3 of this Article. Any number of offices may be held by the same person.
Section 2. Election. The officers of the corporation, except such officers as may be appointed in accordance with the
provisions of Section 3 or Section 5 of this Article, shall be chosen by the Board of Directors, and each shall serve at the pleasure of
the Board of Directors, subject to the rights, if any, of an officer under any contract of employment approved by the Board of
Directors.
Section 3. Subordinate Officers, etc. The Board of Directors may appoint, and may empower the President to appoint, such
other officers as the business of the corporation may require, each of whom shall hold office for such period, have such authority and
perform such duties as are provided in the bylaws or as the Board of Directors may from time to time determine.
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Section 4. Removal and Resignation. Subject to his or her rights, if any, under any contract of employment, any officer
may be removed, either with or without cause by the Board of Directors, at any regular or special meeting thereof, or, except in case of
an officer chosen by the Board of Directors, by any officer upon whom such power of removal may be conferred by the Board of
Directors.
Any officer may resign at any time by giving written notice to the Board of Directors or to the President, or to the Secretary
of the corporation. Any such resignation shall take effect at the date of the receipt of such notice or at any later time specified therein;
and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Any resignation
is without prejudice to the rights, if any, of the corporation under any contract to which the officer is a party.
Section 5. Vacancies. A vacancy in any office because of death, resignation, removal, disqualification or any other cause
shall be filled in the manner prescribed in the bylaws for regular appointments to such office.
Section 6. Chairman of the Board. The Chairman of the Board, if there shall be such an officer, shall, if present, preside at
all meetings of the Board of Directors and exercise and perform such other powers and duties as may be from time to time assigned to
him by the Board of Directors or prescribed by the bylaws. If there is no President, the Chairman of the Board shall, if so authorized
by a resolution of the Board of Directors, in addition be the chief executive officer of the corporation and shall have the powers and
duties prescribed in Section 7 of this Article V.
Section 7. President. Subject to such supervisory powers, if any, as may be given by the Board of Directors to the
Chairman of the Board, if there be such an officer, the President, who may be designated as the Chief Executive Officer, shall be the
chief executive officer of the corporation and, subject to the control of the Board of Directors, shall have general supervision, direction
and control of the business and officers of the corporation. The President shall preside at all meetings of the stockholders and, in the
absence of the Chairman of the Board, or, if there be none, at all meetings of the Board of Directors. The President shall be ex officio
a member of all the standing committees, including the executive committee, if any. The President may sign and execute, in the name
of the corporation, deeds, mortgages, bonds, notes, contracts and other instruments authorized by the Board of Directors, and, in
general, shall have the general powers and duties of management usually vested in the office of president of a corporation, and shall
have such other powers and duties as may be prescribed by the Board of Directors or the bylaws.
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Section 8. Vice Presidents. In the absence or disability of the President, the Vice Presidents, if any, in order of their rank as
fixed by the Board of Directors or, if not ranked, the Vice President designated by the Board of Directors, shall perform all the duties
of the President, and when so acting shall have all the powers of, and be subject to all the restrictions upon, the President. The Vice
Presidents shall have such other powers and perform such other duties as from time to time may be prescribed for them respectively
by the Board of Directors or the bylaws, and the President, or the Chairman of the Board if authorized to act as chief executive officer.
Section 9. Secretary. The Secretary shall keep or cause to be kept, at the principal office or such other place as the Board of
Directors may order, a book of minutes of all meetings of directors, committees of directors and stockholders, with the time and place
of holding, whether regular or special, and, if special, how authorized, the notice thereof given, the names of those present at directors'
meetings, the number of shares present or represented at stockholders' meetings, and the proceedings thereof.
The Secretary shall keep, or cause to be kept, at the principal office or at the office of the corporation's transfer agent, a
stock register, or a duplicate stock register, showing the names of the stockholders and their addresses, the number and classes of
shares of stock held by each, the number and date of certificates issued for the same, and the number and date of cancellation of every
certificate surrendered for cancellation.
The Secretary shall give notice, or cause notice to be given, of all the meetings of the stockholders and of the Board of
Directors of Directors as law or the bylaws require notice to be given, and he shall keep the seal of the corporation in safe custody, and
shall have such other powers and perform such other duties as may be prescribed by the Board of Directors or by the bylaws.
Section 10. Chief Financial Officer. The Chief Financial Officer, who may be designated as the Treasurer, shall keep and
maintain, or cause to be kept and maintained, adequate and correct books and accounts of the properties and business transactions of
the corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, retained earnings and capital
stock.
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The Chief Financial Officer shall deposit all monies and other valuables in the name and to the credit of the corporation with
such depositaries as may be designated by the Board of Directors. The Chief Financial Officer shall disburse the funds of the
corporation as may be ordered by the Board of Directors, shall render to the President and directors, whenever they request it, an
account of all transactions as Chief Financial Officer and of the financial condition of the corporation, and shall have such other
powers and perform such other duties as may be prescribed by the Board of Directors or the bylaws.
Section 11. Salaries. The salaries of the officers shall be fixed from time to time by the Board of Directors or a committee
of the Board of Directors to which such authority has been delegated by the Board of Directors, and no officer shall be prevented from
receiving such salary by reason of the fact that such officer is also a director of the corporation.
ARTICLE VI
Indemnification of Directors, Officers, Employees, and Other Agents
Section 1. Agents, Proceedings, and Expenses. For the purposes of this Article, "agent" means any person who is or was a
director, officer, employee, or other agent of this corporation, or is or was serving at the request of this corporation as a director,
officer, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, or other enterprise, or was a
director, officer, employee or agent of a foreign or domestic corporation which was a predecessor corporation of the corporation or of
another enterprise at the request of the predecessor corporation; "proceeding" means any threatened, pending or completed action or
proceeding, whether civil, criminal, administrative, or investigative; and "expenses" includes, without limitation, attorneys' fees,
judgments, fines, amounts reasonably paid, and any expenses of establishing a right to indemnification under Section 4 or Section 5(c)
of this Article.
Section 2. Actions Other Than by the Corporation. This corporation shall, to the maximum extent permitted by the
Delaware General Corporation Law, indemnify any person who was or is a party, or is threatened to be made a party, to any
proceeding (other than an action by or in the right of this corporation) by reason of the fact that such person is or was an agent of this
corporation, against expenses, judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with
such proceeding if that person acted in good faith and in a manner that person reasonably believed to be in the best interests of this
corporation and, in the case of a criminal proceeding, had no reasonable cause to believe his conduct of was unlawful. The
termination of any proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent shall not,
of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in
the best interests of this corporation or that the person had reasonable cause to believe that his conduct was unlawful.
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Section 3. Actions by the Corporation. This corporation shall indemnify any person who was or is a party or is threatened
to be made a party, to any threatened, pending or completed action by or in the right of this corporation to procure a judgment in its
favor by reason of the fact that person is or was an agent of this corporation, against expenses actually and reasonably incurred by that
person in connection with the defense or settlement of that action if that person acted in good faith, in a manner that person believed to
be in the best or not opposed to the interests of this corporation. No indemnification shall be made under this Section 3 in respect of
any claim, issue or matter as to which that person shall have been adjudged to be liable to this corporation in the performance of that
person's duty to this corporation, unless and only to the extent that the court in which that action was brought shall determine upon
application that, in view of all the circumstances of the case, that person is fairly and reasonably entitled to indemnity for the expenses
which the court shall determine.
Section 4. Successful Defense by Agent. To the extent that an agent of this corporation has been successful on the merits in
defense of any proceeding referred to in Sections 2 or 3 of this Article, or in defense of any claim, issue or matter therein, the agent
shall be indemnified against expenses actually and reasonably incurred by the agent in connection therewith.
Section 5. Required Approval. Except as provided in Section 4 of this Article, any indemnification under this Article shall
be made by this corporation only if authorized in the specific case on a determination that indemnification of the agent is proper in the
circumstances because the agent has met the applicable standard of conduct set forth in Sections 2 or 3 of this Article, by:
(a) A majority vote of directors who are not parties to the proceeding, even though less than a quorum; or
(b) By a committee of such directors designated by majority vote of such directors, even though less than a
quorum; or
(c) If there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion;
or
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(d) Approval by the affirmative vote of a majority of the shares of this corporation entitled to vote represented at a
duly held meeting at which a quorum is present or by the written consent of holders of a majority of the outstanding shares entitled to
vote.
Section 6. Advance of Expenses. Expenses incurred in defending any proceeding may be advanced by this corporation
before the final disposition of the proceeding on receipt of an undertaking by or on behalf of the agent to repay the amount of the
advance unless it shall be determined ultimately that the agent is entitled to be indemnified as authorized in this Article.
Section 7. Other Contractual Rights. Nothing contained in this Article shall affect any right to indemnification to which
persons other than directors and officers of this corporation or any subsidiary hereof may be entitled by contract or otherwise.
Section 8. Limitations. No indemnification or advance shall be made under this Article, except as provided in Section 4 or
Section 5(c), in any circumstance where it appears:
(a) That it would be inconsistent with a provision of the articles, a resolution of the stockholders, or an agreement
in effect at the time of the accrual of the alleged cause of action asserted in the proceeding in which the expenses were incurred or
other amounts were paid, which prohibits or otherwise limits indemnification; or
(b) That it would be inconsistent with any condition expressly imposed by a court in approving a settlement.
Section 9. Insurance. Upon a determination by the Board of Directors of this corporation to purchase such insurance, this
corporation shall purchase and maintain insurance on behalf of any agent of the corporation against any liability asserted against or
incurred by the agent in such capacity or arising out of the agent's status as such whether or not this corporation would have the power
to indemnify the agent against that liability under the provisions of this Article.
Section 10. Fiduciaries of Corporate Employee Benefit Plan. This Article does not apply to any proceeding against any
trustee, investment manager, or other fiduciary of an employee benefit plan in that person's capacity as such, even though that person
may also be an agent of the corporation as defined in Section 1 of this Article. Nothing contained in this Article shall limit any right
to indemnification to which such a trustee, investment manager, or other fiduciary may be entitled by contract or otherwise, which
shall be enforceable to the extent permitted by applicable law other than this Article.
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ARTICLE VII
Records and Reports
Section 1. Maintenance and Inspection of Share Register. The corporation shall keep at its principal executive office, or at
the office of its transfer agent or registrar, if either be appointed and as determined by resolution of the Board of Directors, a record of
its stockholders, giving the names and addresses of all stockholders and the number, class, and series of shares of stock held by each
stockholder.
A stockholder of the corporation in person or by attorney or agent may (i) inspect and copy the records of stockholders'
names and addresses and shareholdings during usual business hours on 5 days prior written demand on the corporation, and (ii)
examine a complete list of the stockholders entitled to vote at the meeting for any purpose germane to the meeting for a period of at
least 10 days prior to the meeting: (a) on a reasonably accessible electronic network, provided that the information required to gain
access to such list is provided with the notice of the meeting, or (b) during ordinary business hours, at the principal place of business
of the corporation.
Section 2. Maintenance and Inspection of Bylaws. The corporation shall keep at its principal executive office, or, if its
principal executive office is not in the State of Delaware, at its principal office in this state, the original or a copy of the bylaws as
amended to date, which shall be open to inspection by the stockholders at all reasonable times during office hours. If the principal
executive office of the corporation is outside the State of Delaware and the corporation has no principal business office in this state,
the Secretary shall, upon the written request of any stockholder, furnish to that stockholder a copy of the bylaws as amended to date.
Section 3. Maintenance and Inspection of Other Corporate Records. The accounting books and records and minutes of
proceedings of the stockholders and the Board of Directors and any committee or committees of the Board of Directors shall be kept at
such place or places designated by the Board of Directors, or, in the absence of such designation, at the principal executive office of
the corporation. The minutes shall be kept either in written form or in any other form capable of being converted into written
form. The minutes and accounting books and records shall be open to inspection upon the written demand of any stockholder, at any
reasonable time during usual business hours, for a purpose reasonably related to the holder's interests as a stockholder. The inspection
may be made in person or by an agent or attorney, and shall include the right to copy and make extracts. These rights of inspection
shall extend to the records of each subsidiary corporation of the corporation, to the extent such records are within the corporation’s
control or the corporation can obtain such records through exercise of its control.
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Section 4. Inspection by Directors. Any director shall have the right to examine the corporation's stock ledger, a list of its
stockholders and its other books and records for a purpose reasonably related to the director's position as a director.
Section 5. Annual Statement of General Information. In compliance with Section 1502 of the Delaware General
Corporation Law, the corporation shall annually file with the Secretary of State of the State of Delaware, on the prescribed form,
setting forth: (1) the location of its registered office in this State, stated with the degree of particularity required by § 102(a)(2) of this
Title 8 of the Delaware Code; (2) the name of the agent upon whom service of process against the corporation may be served; (3) the
location (city, town, street and number of same, if number there be) of the principal place of business of the corporation; (4) the names
and addresses of all the directors as of the filing date of the report and the name and address of the officer who signs the report; (5) the
number of shares and the par value per share of each class of capital stock having a par value and the number of shares of each class of
stock without par value which the corporation is authorized to issue; and (6) such additional information, schedules and attachments as
the Secretary shall require to ascertain the franchise tax due to the State.
ARTICLE VIII
General Corporate Matters
Section 1. Record Date for Purposes Other Than Notice and Voting. For purposes of determining the stockholders
entitled to receive payment of any dividend or other distribution or allotment of any rights or entitled to exercise any rights in respect
of any other lawful action (other than action by stockholders by written consent without a meeting), the Board of Directors may fix, in
advance, a record date, which shall not be more than 60 days before any such action, and in that case only stockholders of record on
the date so fixed are entitled to receive the dividend, distribution, or allotment of rights or to exercise the rights, as the case may be,
notwithstanding any transfer of any shares on the books of the corporation after the record date so fixed, except as otherwise provided
in the Delaware General Corporation Law.
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If the Board of Directors does not so fix a record date, the record date for determining stockholders for any such purpose
shall be at the close of business on the day on which the Board of Directors adopts the applicable resolution.
Section 2. Checks, Drafts, Evidences of Indebtedness. All checks, drafts or other orders for payment of money, notes or
other evidences of indebtedness, issued in the name of or payable to the corporation, shall be signed or endorsed by such person or
persons and in such manner as, from time to time, shall be determined by resolution of the Board of Directors.
Section 3. Corporation Contracts and Instruments; How Executed. The Board of Directors, except as otherwise provided in
these bylaws, may authorize any officer or officers, agent or agents, to enter into any contract or execute any instrument in the name of
and on behalf of the corporation, and this authority may be general or confined to specific instances; and, unless so authorized or
ratified by the Board of Directors or within the agency power of an officer, no officer, agent or employee shall have any power or
authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any
amount.
Section 4. Stock Certificates. A certificate or certificates for shares of the capital stock of the corporation shall be issued to
each stockholder when any of the shares are fully paid, or the Board of Directors may authorize the issuance of stock certificates as
partly paid provided that such certificates shall state the amount of the consideration to be paid for them and the amount paid. All
stock certificates shall be signed in the name of the corporation by the Chairman of the Board, or Vice Chairman of the Board, or the
President, or a Vice President, and by the Chief Financial Officer or an Assistant Treasurer or the Secretary or any Assistant Secretary,
certifying the number of shares and the class or series of stock owned by the stockholder. Any or all of the signatures on the
certificate may be facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been
placed on a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued
by the corporation with the same effect as if such person were an officer, transfer agent or registrar at the date of issue.
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Section 5. Lost Certificates. Except as provided in this Section 5, no new stock certificates shall be issued to replace an old
certificate unless the latter is surrendered to the corporation and canceled at the same time. The Board of Directors may, in case any
stock certificate or certificate for any other security is lost, stolen or destroyed, authorize the issuance of a replacement certificate on
such terms and conditions as the Board of Directors may require, including provision for indemnification of the corporation, including
provision for security of such indemnification obligation by a bond or other adequate security sufficient to protect the corporation
against any claim that may be made against it, including any expense or liability, on account of the alleged loss, theft or destruction of
the certificate or the issuance of the replacement certificate.
Section 6. Representation of Shares of Other Corporations. The Chairman of the Board, the President, or any Vice
President, or any other person authorized by resolution of the Board of Directors or by any of the foregoing designated officers, is
authorized to vote on behalf of the corporation any and all stock or other voting securities of any other corporation or business entity,
foreign or domestic, standing in the name of the corporation. The authority granted to these officers to vote on behalf of or represent
the corporation in any other corporation or other business entity may be exercised by any of these officers in person or by any person
authorized to do so by a proxy duly executed by these officers.
Section 7. Construction and Definitions. Unless the context requires otherwise, the general provisions, rules of construction
and definitions in the Delaware General Corporation Law shall govern the construction of these bylaws. Without limiting the
generality of this provision, the singular number includes the plural, the plural number includes the singular, the use of the masculine
includes the feminine and neuter, and the term "person" includes both a corporation and a natural person.
ARTICLE IX
Amendments
Section 1. Amendment by Stockholders. Subject to the provisions of the certificate of incorporation, these by-laws may be
altered, amended or repealed by a majority of the voting power of the shares represented and entitled to vote.
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Section 2. Amendment by Directors. Subject to the Delaware General Corporation Law, the certificate of incorporation and
these by-laws, the Board of Directors may by majority vote of those present at any meeting at which a quorum is present amend these
by-laws, or enact such other by-laws as in their judgment may be advisable for the regulation of the conduct of the affairs of the
corporation.
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EXHIBIT 4.2
Warrant Agreement
Dated as of _________, 2013
WARRANT AGREEMENT, (this “Agreement”) dated as of __________, 2013, by Asterias Biotherapeutics, Inc., a
Delaware corporation (the "Company"), for the benefit of each registered holder of a Warrant described herein (a “Holder”).
Section 1.
Issuance of Warrants.
1.1 Number of Warrants; Expiration Date. The Company is issuing common share purchase warrants, as hereinafter
described (the “Warrants”), to purchase up to an aggregate of 350,000 shares of its Series B Common Stock, par value $0.0001 per
share (the “Common Stock”), to the undersigned original Holder pursuant to that certain Asset Contribution Agreement dated as of
January 4, 2013; provided, however, that if prior to the date on which a Warrant is exercised all of the outstanding shares of Series B
Common Stock of the Company shall have been converted into shares of Series A Common Stock of the Company, upon the exercise
of the Warrant the Company shall issue shares of Series A Common Stock in lieu of shares of Series B Common Stock . The
Warrants shall be represented by a certificate in substantially the form of Exhibit A hereto. Subject to the terms of this Agreement, a
Holder of any of such Warrant (including any Warrants into which a Warrant may be divided) shall have the right, which may be
exercised, in whole or in part, at any time on or after the date hereof and prior to 5:00 p.m., New York Time on ______, 2016 [ Note
to draft : three year anniversary of the date issuance] (the “Expiration Date”), to purchase from the Company, at the Warrant Price
(as defined herein) then in effect, the number of fully paid and nonassessable common shares, no par value, of the Company (“Warrant
Shares”) determined as provided in this Agreement and specified in such Warrant. The Warrants may not be exercised or transferred
after the Expiration Date.
1.2
Form of Warrant. The text of the Warrants and of the Purchase Form shall be substantially as set forth in Exhibit A
attached hereto. The price per Warrant Share and the number of Warrant Shares issuable upon exercise of each Warrant are subject to
adjustment upon the occurrence of certain events, all as hereinafter provided. The Warrants shall be executed on behalf of the
Company by its Chief Executive Officer, President, or an Executive or Senior Vice President, under its corporate seal reproduced
thereon attested by its Chief Financial Officer, or Secretary or any Assistant Secretary. The signature of any such officers on the
Warrants may be manual or facsimile, provided, however, that the signature of any such officers must be manual until such time as a
warrant agent is appointed.
1.3 Signatures; Date of Warrants. Warrants bearing the manual or facsimile signatures of individuals who were at any time
the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any one of them shall have
ceased to hold such offices prior to the delivery of such Warrants or did not hold such offices on the date of this Agreement. In the
event that the Company shall appoint a warrant agent to act on its behalf in connection with the division, transfer, exchange or
exercise of Warrants, the Warrants issued after the date of such appointment shall be dated as of the date of countersignature thereof
by the warrant agent upon division, exchange, substitution or transfer. Until such time as the Company shall appoint a warrant agent,
Warrants shall be dated as of the date of execution thereof by the Company either upon initial issuance or upon division, exchange,
substitution or transfer.
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1.4 Countersignature of Warrants. In the event that the Company shall appoint a warrant agent to act on its behalf in
connection with the division, transfer, exchange or exercise of Warrants, the Warrants issued after the date of such appointment shall
be countersigned by the warrant agent (or any successor to the warrant agent then acting as warrant agent) and shall not be valid for
any purpose unless so countersigned. Warrants may be countersigned, however, by the warrant agent (or by its successor as warrant
agent hereunder) and may be delivered by the warrant agent, notwithstanding that the persons whose manual or facsimile signatures
appear thereon as proper officers of the Company shall have ceased to be such officers at the time of such countersignature, issuance
or delivery. The warrant agent (if so appointed) shall, upon written instructions of the President, Chief Executive Officer, an
Executive or Senior Vice President, or the Chief Financial Officer of the Company, countersign, issue and deliver the Warrants and
shall countersign and deliver Warrants as otherwise provided in this Agreement.
Section 2.
Exercise of Warrants; Restrictions.
2.1 Exercise of Warrants. (a) A Warrant may be exercised upon surrender of the certificate or certificates evidencing the
Warrant to be exercised, together with the form of election to purchase on the reverse thereof duly completed and signed, to the
Company at its principal office (or if appointed, the principal office of the warrant agent) and upon payment of the Warrant Price (as
defined and determined in accordance with the provisions of Section 3 and Section 6 to the Company (or if appointed, to the warrant
agent for the account of the Company), for the number of Warrant Shares in respect of which such Warrants are then
exercised. Payment of the aggregate Warrant Price shall be made by bank wire transfer to the account of the Company or bank
cashier's check.
(b)
Subject to Section 2.2 and Section 5, upon the surrender of the Warrant and payment of the Warrant Price as
aforesaid, the Company (or if appointed, the warrant agent) shall promptly, and in any event within three (3) business days, cause to
be issued and delivered to or upon the written order of the Holder and in such name or names as the Holder may designate, a
certificate or certificates for the number of full Warrant Shares so purchased upon the exercise of such Warrant, together with cash, as
provided in Section 8, in respect of any fractional Warrant Shares otherwise issuable upon such exercise. Such Warrant Share
certificate or certificates shall be deemed to have been issued and any person so designated to be named therein shall be deemed to
have become a holder of record of such Warrant Shares as of the date of the surrender of such Warrants and payment of the Warrant
Price, as aforesaid. The rights of purchase represented by the Warrant shall be exercisable, at the election of the Holder thereof, either
in full or from time to time in part. In the event that a certificate evidencing the Warrant is exercised in respect of less than all of the
Warrant Shares purchasable on such exercise at any time prior to the date of expiration of the Warrant, a new certificate evidencing
the unexercised portion of the Warrant will be issued, and the warrant agent (if so appointed) is hereby irrevocably authorized to
countersign and to deliver the required new Warrant certificate or certificates pursuant to the provisions of this Section 2.1. The
Company, whenever required by the warrant agent (if appointed), will supply the warrant agent with Warrant certificates duly
executed on behalf of the Company for such purpose.
2.2 Restrictions on Exercise of Warrants. (a) The Warrants may not be exercised unless registered under the Securities Act
of 1933, as amended (the “Act”) or an exemption from such registration is available.
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(b)
Unless the Warrant and Warrant Shares have been registered under the Act and under any applicable state
securities laws, each person who is exercising a Warrant will be required to give written certification that he, she or it is an “accredited
investor” or a written opinion of counsel, acceptable to the Company and to the transfer agent of the Common Stock, to the effect that
exercise of the Warrant and the issuance of the Warrant Shares are exempt from registration under the Act and under any applicable
state securities laws.
(c)
The Company shall be entitled to obtain, as a condition precedent to its issuance of any certificates
representing Warrant Shares or any other securities issuable upon any exercise of a Warrant, a letter or other instrument from the
Holder containing such covenants, representations or warranties by such Holder as reasonably deemed necessary by the Company to
effect compliance by the Company with the requirements of the Act and any other applicable United States federal and/or state
securities laws.
(d)
Any exercise, attempt to exercise, or purported exercise of a Warrant in violation of the restrictions set
forth in this Section 2.2 shall be deemed null and void and of no binding effect.
(e)
The Company will refuse to issue, and will issue instructions to the transfer agent and registrar of its
Common Stock to refuse to issue, any Warrant Shares upon any exercise not made pursuant to registration under the Act and
applicable state securities laws, or pursuant to an available exemption from registration under the Act and applicable state securities
laws.
Section 3.
Warrant Price. Subject to any adjustments required by Section 6, the price per share at which Warrant Shares shall be
purchasable upon exercise of a Warrant (as to any particular Warrant, the “Warrant Price”) shall be Five Dollars ($5.00) per share.
Section 4.
Transferability of Warrants and Warrant Shares; Restrictions on Transfer.
4.1
Registration. Each Warrant shall be numbered and shall be registered on the books of the Company (the “Warrant
Register”) as issued. The Company and the warrant agent (if appointed) shall be entitled to treat the Holder of any Warrant as the
owner in fact thereof for all purposes and shall not be bound to recognize any equitable or other claim or interest in such Warrant on
the part of any other person, and shall not be liable for any registration of transfer of any Warrant which is registered or to be
registered in the name of a fiduciary or the nominee of a fiduciary upon the instruction of such fiduciary, unless made with the actual
knowledge that a fiduciary or nominee is committing a breach of trust in requesting such registration of transfer, or with such
knowledge of such facts that its participation therein amounts to bad faith. Each Warrant shall initially be registered in the name of
the person to whom it is originally issued.
4.2 Transfer. Subject to Section 4.3, the Warrants shall be transferable only on the Warrant Register upon delivery of the
Warrant certificate duly endorsed by the Holder or by his duly authorized attorney or representative, or accompanied by proper
evidence of succession, assignment or authority to transfer. In all cases of transfer by an attorney, the original power of attorney, duly
approved, or a copy thereof, duly certified, shall be deposited and remain with the Company (or the warrant agent, if appointed). In
case of transfer by executors, administrators, guardians or other legal representatives, duly authenticated evidence of their authority
shall be produced, and may be required to be deposited and remain with the Company (or the warrant agent, if appointed) in its
discretion. Upon any registration of transfer, the Company shall execute and deliver (or if appointed, the warrant agent shall
countersign and deliver) a new Warrant or Warrants to the persons entitled thereto.
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4.3 Restrictions on Transfer of Warrants and Warrant Shares. (a) The Warrants, and any Warrant Shares issued upon the
exercise of the Warrants, may not be sold, pledged, hypothecated, transferred or assigned, in whole or in part, unless a registration
statement under the Act, and under any applicable state securities laws, is effective therefor, or an exemption from such registration is
then available and an opinion of counsel, acceptable to the Company and to the transfer agent or warrant agent, if any, has been
rendered stating that such sale, pledge, hypothecation, transfer or assignment will not violate the Act or any other United States federal
or state securities laws.
(b)
As a condition precedent to the registration of transfer and issuance of any certificates representing
Warrants or Warrant Shares upon transfer, the Company shall be entitled to obtain a letter or other instrument from the Holder
containing such covenants, representations or warranties by such Holder as reasonably deemed necessary by the Company to effect
compliance by the Company with the requirements of the Act and any other applicable federal and/or state securities laws.
(c)
Any sale, pledge, hypothecation, transfer, or assignment of a Warrant or Warrant Shares in violation of the
foregoing restrictions shall be deemed null and void and of no binding effect.
(d)
The Company will issue instructions to any warrant agent that may be appointed, and to the transfer agent
and registrar of its Common Stock, to refuse to register the transfer of any Warrant and Warrant Shares not made pursuant to
registration under the Act and applicable state securities laws, or pursuant to an available exemption from registration under the Act
and applicable state securities laws.
Section 5.
Payment of Taxes. The Company will pay all documentary stamp taxes, if any, attributable to the initial issuance of
Warrant Shares upon the exercise of Warrants; provided, however, that the Company shall not be required to pay any tax or taxes
which may be payable in respect of any transfer involved in the issue or delivery of any Warrant or certificates for Warrant Shares in a
name other than that of the registered Holder of such Warrants or Warrant Shares.
Section 6.
Adjustment of Warrant Price and Number of Warrant Shares. The number and kind of securities purchasable upon the
exercise of each Warrant and the Warrant Price shall be subject to adjustment from time to time upon the happening of certain events,
as hereinafter defined.
6.1
Adjustments. The number of Warrant Shares purchasable upon the exercise of each Warrant and the Warrant Price
shall be subject to adjustment as follows:
(a) If the Company shall (i) pay a dividend in shares of Common Stock or make a distribution in shares of Common
Stock, (ii) subdivide its outstanding shares of Common Stock, (iii) combine its outstanding shares of Common Stock into a smaller
number of shares of Common Stock or (iv) reclassify or change (including a change to the right to receive, or a change into, as the
case may be (other than with respect to a merger or consolidation pursuant to the exercise of appraisal rights), shares of stock, other
securities, property, cash or any combination thereof) its Common Stock (including any such reclassification or change in connection
with a consolidation or merger in which the Company is the surviving corporation), the number of Warrant Shares purchasable upon
exercise of each Warrant immediately prior thereto shall be adjusted so that the Holder of each Warrant shall be entitled to receive the
kind and number of Warrant Shares or other securities of the Company or other property which the Holder would have owned or have
been entitled to receive after the happening of any of the events described above, had such Warrant been exercised immediately prior
to the happening of such event or any record date with respect thereto. An adjustment made pursuant to this paragraph (a) shall
become effective immediately after the effective date of such event retroactive to the record date, if any, for such event.
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(b)
If the Company shall issue rights, options or warrants to all holders of its outstanding Common Stock,
without any charge to such holders, entitling them to subscribe for or purchase shares of Common Stock at a price per share which is
lower at the record date mentioned below than the then current market price per share of Common Stock, the number of Warrant
Shares thereafter purchasable upon the exercise of each Warrant shall be determined by multiplying the number of Warrant Shares
theretofore purchasable upon exercise of each Warrant by a fraction, of which the numerator shall be the number of shares of
Common Stock outstanding on the date of issuance of such rights, options or warrants plus the number of additional shares of
Common Stock offered for subscription or purchase in connection with such rights, options or warrants, and of which the denominator
shall be the number of shares of Common Stock outstanding on the date of issuance of such rights, options or warrants plus the
number of shares which the aggregate exercise price for the total number of shares of Common Stock issuable upon exercise of such
rights, options or warrants would purchase at the current market price per share of Common Stock (as determined pursuant to
paragraph (d) below) at such record date. Such adjustment shall be made whenever such rights, options or warrants are issued, and
shall become effective immediately after the record date for the determination of stockholders entitled to receive such rights, options
or warrants.
(c)
If the Company shall distribute to all holders of its shares of Common Stock (including any distribution
made in connection with a merger in which the Company is the surviving corporation) evidences of its indebtedness or assets
(excluding cash, dividends or distributions payable out of consolidated earnings or earned surplus and dividends or distributions
referred to in paragraph (a) above) or rights, options or warrants, or convertible or exchangeable securities containing the right to
subscribe for or purchase shares of Common Stock (excluding those referred to in paragraph (b) above), then in each case the number
of Warrant Shares thereafter purchasable upon the exercise of each Warrant shall be determined by multiplying the number of Warrant
Shares theretofore purchasable upon the exercise of each Warrant by a fraction, of which the numerator shall be the then current
market price per share of Common Stock (as determined pursuant to paragraph (d) below) on the date of such distribution, and of
which the denominator shall be the then current market price per share of Common Stock, less the then fair value (as reasonably
determined by the Board of Directors of the Company, whose determination shall be conclusive) of the portion of the assets or
evidences of indebtedness so distributed or of such subscription rights, options or warrants, or of such convertible or exchangeable
securities applicable to one share of Common Stock. Such adjustment shall be made whenever any such distribution is made, and
shall become effective on the date of distribution retroactive to the record date for the determination of shareholders entitled to receive
such distribution.
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(d) For the purpose of any computation under paragraphs (b) and (c) of this Section 6.1, the current market price
per share of Common Stock at any date shall be the volume weighted average of the daily closing prices for the 20 consecutive trading
days ending one trading day prior to the date of such computation. The closing price for each day shall be the last reported sales price
regular way or, in case no such reported sale takes place on such day, the average of the closing bid and asked prices regular way for
such day, in each case on the principal national securities exchange on which the shares of Common Stock are listed or admitted to
trading or, if not so listed or admitted to trading, the last sale price of the Common Stock on the OTC Bulletin Board, or any
comparable system. If the current market price of the Common Stock cannot be so determined, the Board of Directors of the
Company shall reasonably determine the current market price on the basis of such quotations as are available.
(e) No adjustment in the number of Warrant Shares purchasable hereunder shall be required unless such adjustment
would require an increase or decrease of at least one percent (1%) in the number of Warrant Shares purchasable upon the exercise of
each Warrant; provided, however, that any adjustments which by reason of this paragraph (e) are not required to be made shall be
carried forward and taken into account in the determination of any subsequent adjustment. All calculations shall be made with respect
to the number of Warrant Shares purchasable hereunder, to the nearest tenth of a share and with respect to the Warrant Price payable
hereunder, to the nearest whole cent.
(f) Whenever the number of Warrant Shares purchasable upon the exercise of each Warrant is adjusted, as herein
provided, the Warrant Price payable upon exercise of each Warrant shall be adjusted by multiplying such Warrant Price immediately
prior to such adjustment by a fraction, of which the numerator shall be the number of Warrant Shares purchasable upon the exercise of
each Warrant immediately prior to such adjustment, and of which the denominator shall be the number of Warrant Shares purchasable
immediately thereafter.
(g) No adjustment in the number of Warrant Shares purchasable upon the exercise of each Warrant need be made
under paragraphs (b) and (c) if the Company issues or distributes to each Holder of Warrants the rights options, warrants, or
convertible or exchangeable securities, or evidences of indebtedness or assets referred to in those paragraphs which each Holder of
Warrants would have been entitled to receive had the Warrants been exercised prior to the happening of such event or the record date
with respect thereto. No adjustment need be made for a change in the par value of the Warrant Shares.
(h) For the purpose of this Section 6, the term “Common Stock” shall mean (i) the Series B common stock of the
Company at the date of this Agreement, (ii) any other series or class of stock resulting from successive changes or reclassifications of
such shares consisting solely of changes in par value, or from par value to no par value, or from no par value to par value, or (iii) the
Series A common stock, par value $0.0001 per share, of the Company at any time after all outstanding shares of Series B Common
Stock have been converted into shares of Series A Common Stock, or (iv) any other series or class of stock resulting from successive
changes or reclassifications of Series A common stock consisting solely of changes in par value, or from par value to no par value, or
from no par value to par value after all outstanding shares of Series B Common Stock have been converted into shares of Series A
Common Stock. In the event that at any time, as a result of an adjustment made pursuant to paragraph (a) above, the Holders shall
become entitled to purchase any securities of the Company other than shares of Common Stock, thereafter the number of such other
shares so purchasable upon exercise of each Warrant, and the Warrant Price of such shares, shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Warrant Shares contained in
paragraphs (a) through (i), inclusive, and the provisions of Section 6.3 and Section 8, with respect to the Warrant Shares, shall apply
on like terms to any such other securities.
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(i) Upon the expiration of any rights, options, warrants or conversion or exchange privileges that result in an
adjustment pursuant to this Section 6.1, if any thereof shall not have been exercised, the Warrant Price and the number of Warrant
Shares purchasable upon the exercise of each Warrant shall, upon such expiration, be readjusted and shall thereafter be such as it
would have been had it been originally adjusted (or had the original adjustment not been required, as the case may be) as if (A) the
only shares of Common Stock so issued were the shares of Common Stock, if any, actually issued or sold upon the exercise of such
rights, options, warrants or conversion or exchange rights and (B) such shares of Common Stock, if any, were issued or sold for the
consideration actually received by the Company upon such exercise plus the aggregate consideration, if any, actually received by the
Company for the issuance, sale or grant of all such rights, options, warrants or conversion or exchange rights whether or not exercised.
6.2 Notice of Adjustment. Whenever the number of Warrant Shares purchasable upon the exercise of each Warrant or the
Warrant Price of such Warrant Shares is adjusted, as herein provided, the Company shall, or in the event that a warrant agent is
appointed, the Company shall cause the warrant agent, promptly, in any event within ten (10) days send to each Holder notice of such
adjustment or adjustments. Such notice shall set forth the number of Warrant Shares purchasable upon the exercise of each Warrant
and the Warrant Price of such Warrant Shares after such adjustment, setting forth a brief statement of the facts requiring such
adjustment and setting forth the computation by which such adjustment was made.
6.3 No Adjustment for Dividends. Except as provided in Section 6.1, no adjustment in respect of any dividends shall be
made during the term of a Warrant or upon the exercise of a Warrant.
6.4 Preservation of Purchase Rights Upon Merger, Consolidation, etc. In case of any consolidation of the Company with or
merger of the Company into another corporation or in case of any sale, transfer or lease to another corporation of all or substantially
all the assets of the Company, the Company or such successor or purchasing corporation, as the case may be, shall execute an
agreement that each Holder shall have the right thereafter, upon such Holder's election, either (i) upon payment of the Warrant Price in
effect immediately prior to such action, to purchase upon exercise of each Warrant the kind and amount of shares and other securities
and property (including cash) which the Holder would have owned or have been entitled to receive after the happening of such
consolidation, merger, sale, transfer or lease had such Warrant been exercised immediately prior to such action (such shares and other
securities and property (including cash) being referred to as the “Sale Consideration”) or (ii) to receive, in cancellation of such
Warrant (and in lieu of paying the Warrant price and exercising such Warrant), the Sale Consideration less a portion thereof having a
fair market value (as reasonably determined by the Company) equal to the Warrant Price (it being understood that, if the Sale
Consideration consists of more than one type of shares, other securities or property, the amount of each type of shares, other securities
or property to be received shall be reduced proportionately); provided, however, that no adjustment in respect of dividends, interest or
other income on or from such shares or other securities and property shall be made during the term of a Warrant or upon the exercise
of a Warrant. The Company shall mail by first class mail, postage prepaid, to each Holder, notice of the execution of any such
agreement. Such agreement shall provide for adjustments, which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 6. The provisions of this paragraph shall similarly apply to successive consolidations,
mergers, sales, transfers or leases. The warrant agent (if appointed) shall be under no duty or responsibility to determine the
correctness of any provisions contained in any such agreement relating to the kind or amount of shares of stock or other securities or
property receivable upon exercise of Warrants or with respect to the method employed and provided therein for any adjustments and
shall be entitled to rely upon the provisions contained in any such agreement.
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6.5 Statement on Warrants. Irrespective of any adjustments in the Warrant Price or the number or kind of shares
purchasable upon the exercise of the Warrants, Warrants issued before or after such adjustment may continue to express the same
price and number and kind of shares as are stated in the Warrants initially issuable pursuant to this Agreement.
Section 7.
Reservation of Warrant Shares; Purchase and Cancellation of Warrants.
7.1 Reservation of Warrant Shares. There have been reserved, and the Company shall at all times keep reserved, out of its
authorized Common Stock, a number of shares of Common Stock sufficient to provide for the exercise of the rights of purchase
represented by the outstanding Warrants and any additional Warrants issuable hereunder. The Company will keep a copy of this
Agreement on file with the Transfer Agent for the Common Stock and with every subsequent transfer agent for any shares of the
Company's capital stock issuable upon the exercise of the rights of purchase represented by the Warrants. The warrant agent, if
appointed, will be irrevocably authorized to requisition from time to time from such Transfer Agent the stock certificates required to
honor outstanding Warrants upon exercise thereof in accordance with the terms of this Agreement. The Company will supply such
Transfer Agent with duly executed stock certificates for such purposes and will provide or otherwise make available any cash which
may be payable as provided in Section 8. The Company will furnish such Transfer Agent a copy of all notices of adjustments and
certificates related thereto, transmitted to each Holder pursuant to Section 6.2.
7.2 Purchase of Warrants by the Company. The Company shall have the right, except as limited by law, other agreements
or herein, with the consent of the Holder, to purchase or otherwise acquire Warrants at such times, in such manner and for such
consideration as it may deem appropriate.
7.3 Cancellation of Warrants. In the event the Company shall purchase or otherwise acquire Warrants, the same shall
thereupon be cancelled and retired. The warrant agent (if so appointed) shall cancel any Warrant surrendered for exchange,
substitution, transfer or exercise in whole or in part.
Section 8.
Fractional Interests. The Company shall not be required to issue fractional Warrants upon the transfer of any Warrant,
or fractional Warrant Shares upon the exercise of Warrants. If more than one Warrant shall be presented for exercise in full at the
same time by the same Holder, the number of full Warrant Shares which shall be issuable upon the exercise thereof shall be computed
on the basis of the aggregate number of Warrant Shares purchasable on exercise of the Warrants so presented. If any fraction of a
Warrant Share would, except for the provisions of this Section 8, be issuable on the exercise of any Warrant (or specified portion
thereof), the Company shall pay an amount in cash equal to the volume weighted average of the daily closing sale prices (determined
in accordance with paragraph 6.1(d)) per share of Common Stock for the 20 consecutive trading days ending one trading day prior to
the date the Warrant is presented for exercise, multiplied by such fraction.
8
Section 9.
Exchange of Warrant Certificates. Each Warrant certificate may be exchanged, at the option of the Holder thereof, for
another Warrant certificate or Warrant certificates in different denominations (but not for any fractional Warrant or any denomination
that would, but for Section 8, result in the issuance of a fractional share upon exercise) entitling the Holder or Holders thereof to
purchase a like aggregate number of Warrant Shares as the certificate or certificates surrendered then entitle the Holder to
purchase. Any Holder desiring to exchange a Warrant certificate or certificates shall make such request in writing delivered to the
Company at its principal office (or, if a warrant agent is appointed, the warrant agent at its principal office) and shall surrender,
properly endorsed, the certificate or certificates to be so exchanged. Thereupon, the Company (or, if appointed, the warrant agent)
shall execute and deliver to the person entitled thereto a new Warrant certificate or certificates, as the case may be, as so requested, in
such name or names as such Holder shall designate.
Section 10.
Listing of Warrant Shares on Securities Exchange. The Company will promptly use commercially reasonable efforts
to cause the Warrant Shares to be listed, subject to official notice of issuance, on the principal national securities exchanges on which
the Common Stock is listed and whose rules and regulations require such listing, as soon as practicable following the date of this
Warrant Agreement.
Section 11.
Mutilated or Missing Warrants. In case any of the certificates evidencing the Warrants shall be mutilated, lost, stolen
or destroyed, the Company may in its discretion issue and deliver (and, if appointed, the warrant agent shall countersign and deliver)
in exchange and substitution for and upon cancellation of the mutilated Warrant certificate, or in lieu of and substitution for the
Warrant certificate lost, stolen or destroyed, a new Warrant certificate of like tenor, but only upon receipt of evidence reasonably
satisfactory to the Company and the warrant agent (if so appointed) of such loss, theft or destruction of such Warrant, and an
indemnity or bond, if requested, also reasonably satisfactory to them. An applicant for such a substitute Warrant certificate shall also
comply with such other reasonable regulations and pay such other reasonable charges as the Company (or the warrant agent, if so
appointed) may prescribe.
Section 12.
No Rights as Shareholders; Notices to Holders. Nothing contained in this Agreement or in any of the Warrants shall
be construed as conferring upon the Holders or their transferees the right to vote or to receive dividends or to consent or to receive
notice as shareholders in respect of any meeting of shareholders for the election of directors of the Company or any other matter, or
any rights whatsoever as shareholders of the Company. If, however, at any time prior to the expiration of the Warrants and prior to
their exercise, any of the following events shall occur: (a) the Company shall declare any dividend payable in any securities upon its
shares of Common Stock or make any distribution (other than a regular cash dividend, as such dividend may be increased from time to
time, or a dividend payable in shares of Common Stock) to the holders of its shares of Common Stock; or (b) the Company shall offer
to the holders of its shares of Common Stock on a pro rata basis any cash, additional shares of Common Stock or other securities of
the Company or any right to subscribe for or purchase any thereof; or (c) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation, merger, sale, transfer or lease of all or substantially all of its property, assets, and
business as an entirety) shall be proposed, then in any one or more of said events the Company shall (i) give notice in writing of such
event as provided in Section 14 and (ii) if the Warrants have been registered pursuant to the Act, cause notice of such event to be
published once in The Wall Street Journal (national edition), such giving of notice and publication to be completed at least 10 days
prior to the date fixed as a record date or the date of closing the transfer books for the determination of the stockholders entitled to
such dividend, distribution, or subscription rights or for the determination of stockholders entitled to vote on such proposed
dissolution, liquidation or winding up or the date of expiration of such offer. Such notice shall specify such record date or the date of
closing the transfer books or the date of expiration, as the case may be. Failure to publish, mail or receive such notice or any defect
therein or in the publication or mailing thereof shall not affect the validity of any action in connection with such dividend, distribution
or subscription rights, or such proposed dissolution, liquidation or winding up, or such offer.
9
Section 13.
Appointment of Warrant Agent. At such time as the Company shall register Warrants under the Act, the Company
shall appoint a warrant agent to act on behalf of the Company in connection with the issuance, division, transfer and exercise of
Warrants. At such time as the Company appoints a warrant agent, the Company shall enter into a new Warrant Agreement with the
warrant agent pursuant to which all new Warrants will be issued upon registration of transfer or division, which will reflect the
appointment of the warrant agent, as well as additional customary provisions as shall be reasonably requested by the warrant agent in
connection with the performance of its duties. In the event that a warrant agent is appointed, the Company shall (i) promptly notify
the Holders of such appointment and the place designated for transfer, exchange and exercise of the Warrants, and (ii) take such steps
as are necessary to insure that Warrants issued prior to such appointment may be exchanged for Warrants countersigned by the
warrant agent.
Section 14.
Notices; Principal Office. Any notice pursuant to this Agreement by the Company or by any Holder to the warrant
agent (if so appointed), or by the warrant agent (if so appointed) or by any Holder to the Company, shall be in writing and shall be
delivered in person, or mailed first class, postage prepaid, or sent by air delivery service (a) to the Company, at its office, Attention:
Chief Financial Officer, or (b) to the warrant agent, at its offices as designated at the time the warrant agent is appointed. The address
of the principal office of the Company is 1301 Harbor Bay Parkway, Suite 100, Alameda, California 94502. Any notice given
pursuant to this Agreement by the Company or the warrant agent to a Holder shall be in writing and shall be mailed first class, postage
prepaid, or sent by air delivery service, or otherwise delivered to such Holder at the Holder’s address on the books of the Company or
the warrant agent, as the case may be. Each party hereto and any Holder may from time to time change the address to which notices to
it are to be delivered or mailed hereunder by notice to the other party.
Section 15.
Successors. Except as expressly provided herein to the contrary, all the covenants and provisions of this Agreement
by or for the benefit of the Company and the Holder shall bind and inure to the benefit of their respective successors and permitted
assigns hereunder.
10
Section 16. Legends. The Warrants shall bear an appropriate legend, conspicuously disclosing the restrictions on exercise under
Section 2.2, and the Warrants and Warrant Shares shall bear an appropriate legend, conspicuously disclosing the restrictions on
transfer under Section 4.3 until the same are registered for sale under the Act or are transferred in a transaction exempt from
registration under the Act entitling the transferee to receive securities that are not deemed to be “restricted securities” as such term is
defined in Rule 144 under the Act. The Company agrees that upon the sale of the Warrants and Warrant Shares pursuant to a
registration statement or an exemption entitling the transferee to receive securities that are not deemed to be “restricted securities,” or
at such time as registration under the Act shall no longer be required, upon the presentation of the certificates containing such a legend
to the transfer agent or warrant agent, if any, it will remove such legend; provided, that unless the request for removal of the legend is
in connection with a sale registered under the Act, the Holder shall have provided an opinion of counsel, acceptable to the Company
and the transfer agent or warrant agent, as applicable, to the effect that such legend may be removed in compliance with the Act.
Section 17.
Applicable Law. This Agreement and each Warrant issued hereunder shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to principles of conflict of laws.
Section 18.
Benefits of this Agreement. This Agreement shall be for the sole and exclusive benefit of the Company, the warrant
agent and the Holders of the Warrants. Nothing in this Agreement shall be construed to give to any person or corporation other than
the Company, the warrant agent (if appointed) and the Holders any legal or equitable right, remedy or claim under this Agreement.
Section 19.
Counterparts. This Agreement may be executed in any number of counterparts (including by separate counterpart
signature pages) and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
Section 20.
Captions. The captions of the Sections and subsections of this Agreement have been inserted for convenience only
and shall have no substantive effect.
11
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, all as of the day and year first
above written.
ASTERIAS BIOTHERAPEUTICS, INC.
By:
Thomas Okarma,
Chief Executive Officer
Attest:
By:
Judith Segall, Secretary
12
EXHIBIT A
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR UNDER APPLICABLE STATE SECURITIES LAWS. THIS WARRANT MAY NOT BE EXERCISED,
SOLD, PLEDGED, HYPOTHECATED, TRANSFERRED OR ASSIGNED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, OR PURSUANT
TO AN AVAILABLE EXEMPTION FROM REGISTRATION. HEDGING TRANSACTIONS INVOLVING THIS
WARRANT OR ANY COMMON STOCK OR OTHER SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT
MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT
VOID AFTER 5:00 P.M. NEW YORK TIME, _________, 2016
Certificate No. ___
Warrant to Purchase
[Insert number of Shares]
Shares of Series B Common Stock
ASTERIAS BIOTHERAPEUTICS, INC.
SERIES B COMMON STOCK PURCHASE WARRANTS
This certifies that, for value received, _____________ or registered assigns (the “Holder”), is entitled to purchase from
Asterias Biotherapeutics, Inc., a Delaware corporation (the “Company”), at a purchase price per share of Five Dollars ($5.00) (the
“Warrant Price”), the number of shares of its Series B Common Stock, par value $0.0001 per share (the “Common Stock”), shown
above. The series and number of shares purchasable upon exercise of the Common Stock Purchase Warrants (the “Warrants”) and the
Warrant Price are subject to adjustment from time to time as set forth in the Warrant Agreement referred to below. Outstanding
Warrants not exercised prior to 5:00 p.m., New York time, on ___________, 2016 shall thereafter be void.
Subject to restriction specified in the Warrant Agreement, Warrants may be exercised in whole or in part by presentation of
this Warrant Certificate with the Purchase Form on the reverse side hereof duly executed, and simultaneous payment of the Warrant
Price (or as otherwise set forth in Section 6.4 of the Warrant Agreement) at the principal office of the Company (or if a warrant agent
is appointed, at the principal office of the warrant agent). Payment of the Warrant Price shall be made by bank wire transfer to the
account of the Company or by bank cashier's check as provided in Section 2.1 of the Warrant Agreement. As provided in the Warrant
Agreement, the Warrant Price and the number or kind of shares which may be purchased upon the exercise of the Warrant evidenced
by this Warrant Certificate are, upon the happening of certain events, subject to modification and adjustment.
1
This Warrant Certificate is issued under and in accordance with a Warrant Agreement dated as of ____________, 2013, and
is subject to the terms and provisions contained in the Warrant Agreement, to all of which the Holder of this Warrant Certificate by
acceptance of this Warrant Certificate consents. A copy of the Warrant Agreement may be obtained by the Holder hereof upon
written request to the Company. In the event that pursuant to Section 13 of the Warrant Agreement a warrant agent is appointed and a
new warrant agreement entered into between the Company and such warrant agent, then such new warrant agreement shall constitute
the Warrant Agreement for purposes hereof and this Warrant Certificate shall be deemed to have been issued pursuant to such new
warrant agreement.
Upon any partial exercise of the Warrant evidenced by this Warrant Certificate, there shall be issued to the Holder hereof a
new Warrant Certificate in respect of the shares of Common Stock as to which the Warrant evidenced by this Warrant Certificate shall
not have been exercised. This Warrant Certificate may be exchanged at the office of the Company (or the warrant agent, if appointed)
by surrender of this Warrant Certificate properly endorsed either separately or in combination with one or more other Warrant
Certificates for one or more new Warrant Certificates evidencing the right of the Holder thereof to purchase the aggregate number of
shares as were purchasable on exercise of the Warrants evidenced by the Warrant Certificate or Certificates exchanged. No fractional
shares will be issued upon the exercise of any Warrant, but the Company will pay the cash value thereof determined as provided in the
Warrant Agreement. This Warrant Certificate is transferable at the office of the Company (or the warrant agent, if appointed) in the
manner and subject to the limitations set forth in the Warrant Agreement.
The Holder hereof may be treated by the Company, the warrant agent (if appointed), and all other persons dealing with this
Warrant Certificate as the absolute owner hereof for any purpose and as the person entitled to exercise the rights represented hereby,
or to the transfer hereof on the books of the Company, any notice to the contrary notwithstanding, and until such transfer on such
books, the Company (and the warrant agent, if appointed) may treat the Holder hereof as the owner for all purposes.
Neither the Warrant nor this Warrant Certificate entitles any Holder to any of the rights of a stockholder of the Company.
2
[This Warrant Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by the
warrant agent.] *
DATED:
ASTERIAS BIOTHERAPEUTICS, INC.
(Seal)
By:
Title:
Attest:
[COUNTERSIGNED:
WARRANT AGENT
By:
Authorized Signature
*
]*
To be part of the Warrant only after the appointment of a warrant agent pursuant to Section 13 of the Warrant Agreement.
3
PURCHASE FORM
(To be executed upon exercise of Warrant)
To Asterias Biotherapeutics, Inc.:
The undersigned hereby irrevocably elects to exercise the right of purchase represented by the within Warrant Certificate
for, and to purchase thereunder, _______ shares of Series B Common Stock, as provided for therein, and tenders herewith payment of
the Warrant Price in full in the form of a bank wire transfer to the account of the Company or by bank cashier's check in the amount of
$______________.
Please issue a certificate or certificates for such shares of Series B Common Stock in the name of, and pay any cash for any
fractional share to:
(Please Print Name)
(Please Print Address)
(Social Security Number or
Other Taxpayer Identification Number)
(Signature)
NOTE: The above signature should correspond exactly with the name on the face of this Warrant Certificate or with the name of the
assignee appearing in the assignment form below.
And, if said number of shares shall not be all the shares purchasable under the within Warrant Certificate, a new Warrant
Certificate is to be issued in the name of said undersigned for the balance remaining of the shares purchasable thereunder less any
fraction of a share paid in cash.
4
ASSIGNMENT
(To be executed only upon assignment of Warrant Certificate)
For value received, _____________ hereby sells, assigns and transfers unto _______________ the within Warrant
Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint _________________
attorney, to transfer said Warrant Certificate on the books of the within-named Company, with full power of substitution in the
premises.
Dated:
(Signature)
NOTE: The above signature should correspond exactly with the
name on the face of this Warrant Certificate.
5
EXHIBIT 10.2
STOCK AND WARRANT PURCHASE AGREEMENT
BIOTIME ACQUISITION CORPORATION
2,136,000 Shares of Series B Common Stock
and
350,000 Common Stock Purchase Warrants
Total Purchase Price $5,000,000
READ THIS AGREEMENT CAREFULLY BEFORE YOU INVEST
The shares of Series B Common Stock (“Shares”), and Common Stock Purchase Warrants (“Warrants”), and the common
stock issuable upon the exercise of the Warrants (“Warrant Shares”) have not been registered under the Securities Act of
1933, as amended, or applicable state securities laws and may not be offered for sale, sold, transferred, pledged or
hypothecated to any person, and the Warrants may not be exercised, in the absence of an effective registration statement
covering such securities (or an exemption from such registration) and an opinion of counsel satisfactory to BioTime
Acquisition Corporation to the effect that such transfer complies with applicable securities laws.
PURCHASE AGREEMENT
This Agreement is entered into by Romulus Films Ltd. (“Purchaser”) and BioTime Acquisition Corporation, a Delaware
corporation (the “Company).
1.
Purchase and Sale of Shares and Warrants.
(a)
Purchaser hereby irrevocably agrees to purchase, and the Company hereby irrevocably agrees to sell to
Purchaser 2,136,000 shares of Series B Common Stock, par value $0.0001 per share (“Shares”), of the Company and warrants to
purchase 350,000 shares of Series B Common Stock of the Company (“Warrants”). The Warrants will entitle the holder to purchase,
on the terms and conditions set forth in the Warrant Agreement governing the Warrant, shares of Series B Common Stock, par value
$0.0001 of the Company (“Warrant Shares”) for $5.00 per Warrant Share (the “Warrant Price”), subject to adjustment as provided in
the Warrant Agreement a copy of which is attached as Exhibit A (the “Warrant Agreement”).
(b)
No fractional Shares or fractional Warrants shall be issued. If the sale of the Shares and Warrants would
result in the issuance of a fractional Share or fractional Warrant, the fractional portion of the Share or Warrant shall be disregarded
and there shall be no reduction in the purchase price of the Shares and Warrants or cash payment in lieu of the disregarded fractional
Share or fractional Warrant.
2.
Closing. The consummation of the sale of the Shares and Warrants (“Closing”) will take place concurrently with
the closing of the “Stem Cell Transaction.” The Stem Cell Transaction means a transaction among the Company, BioTime, Inc.
(“BioTime”), and Geron Corp. (“Geron”) pursuant to which Geron and BioTime will contribute certain assets to the Company in
exchange for shares of Company common stock, and in the case of the BioTime, warrants of the same tenor as the Warrants being
purchased by Purchaser under this Agreement, as set forth in an Asset Contribution Agreement among the Company, BioTime and
Geron.
(a)
The Company shall give Purchaser not less than five (5) business days prior notice of the date on which
the Closing will take place (“Closing Date”). On the Closing Date, Purchaser shall purchase all 2,136,000 Shares and 350,000
Warrants and shall pay to the Company, by wire transfer to an account designated by the Company, the full purchase price of such
Shares and Warrants. On the Closing Date, the Company will issue to the Purchaser the Shares and Warrants purchased.
(b)
The issue of the Shares purchased may be, at the election of the Company, by book entry of such Shares
purchased, in the name of the Purchaser, on the records of the transfer agent of the Shares or by a stock certificate in the name of the
Purchaser for the number of Shares purchased. Warrants purchased shall be delivered to the Purchaser upon the Closing Date, along
with a copy of the Warrant Agreement governing the Warrants executed by the Company.
(c)
The Closing of the sale of the Shares and Warrants shall be subject to the following conditions:
1
(i)
The representations and warranties of the Company contained in this Agreement shall be true
and correct in all material respects on the date of the Closing, and the Company shall have complied in all material respects with its
covenants required to have been performed as of the date of Closing;
(ii)
No event shall have occurred that has had, or is reasonably expected to have, a Material
Adverse Effect;
(iii)
No litigation or other proceeding of any kind to enjoin, delay, prohibit or restrict the
consummation of the sale of the Shares and Warrants under this Agreement, or the Stem Cell Transaction shall be pending, and there
shall be no judgment, order or writ of any court or government authority in effect prohibiting or restricting the consummation of the of
the sale of the Shares and Warrants under this Agreement, or consummation of the Stem Cell Transaction by any party;
(iv)
The Asset Contribution Agreement shall not have been amended in any material respect from
the date of its execution by the parties thereto, and neither BAC nor BioTime shall have waived any material condition to their
respective obligations to consummate the Stem Cell Transaction under the Asset Contribution Agreement, except for such
amendments or waivers as Purchaser shall have approved in writing; provided, that such approval by Purchaser shall not to be
unreasonably withheld or delayed; and
(v)
The Stem Cell Transaction shall have closed or shall close concurrently with the Closing.
(d)
As used in this Agreement, “Material Adverse Effect” shall mean any change that does, or would be
reasonably expected to, have a material adverse effect on the business, operations, financial condition, or assets of the Company on a
consolidated basis, provided , however , that none of the following shall be deemed either alone or in combination to constitute, and
none of the following shall be taken into account in determining whether there has been or would be, a Material Adverse Effect: (a)
any adverse effect resulting from or arising out of the announcement, pendency, or consummation of the transactions contemplated by
this Agreement or the Stem Cell Transaction; (b) any adverse effect resulting from or arising out of general economic conditions; (c)
any adverse effect resulting from or arising out of general conditions in the industries in which the Company or Geron operates; (d)
any adverse effect resulting from or arising out of any natural disaster or any acts of terrorism, sabotage, military action or war or any
escalation or worsening thereof; and (e) any adverse effect resulting from or arising out of any changes in any law, statute, rule or
regulation, or the judicial or administrative interpretation thereof, or any change in generally accepted accounting principles.
3.
Registration Rights. Concurrently with the execution and delivery of this Agreement, Purchaser and the Company
shall enter into a Registration Rights Agreement in the form of Exhibit B, pursuant to which the Company is agreeing to register the
Shares, the Warrants and the Warrant Shares under the Securities Act of 1933, as amended (the “Act”).
4.
Representations and Warranties of the Company. The Company makes the following representations and
warranties for the benefit and reliance of Purchaser. The following representations and warranties are true and correct on the date of
this Agreement and as of the Closing Date, and are qualified accordingly.
2
(a)
Organization. The Company is a corporation duly organized, validly existing and in good standing under
the laws of the state of Delaware, with the requisite power and authority to own and use its properties and assets and to carry on its
business as currently conducted. The Company is duly qualified to conduct business and is in good standing as a foreign corporation
in California and in each other jurisdiction in which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to so qualify would not have a material adverse effect on its business.
(b)
Authority; Enforceability. The Company has the corporate power and authority (i) to execute and deliver,
and to perform all of its obligations under, this Agreement, the Warrant Agreement, and the Registration Rights Agreement, and (ii) to
execute and deliver, and to perform all of its obligations under, the agreements to which it currently is contemplated the Company will
be a party in consummation of the Stem Cell Transaction. The execution and delivery of this Agreement, the Warrant Agreement, and
the Registration Rights Agreement and the performance by the Company of its obligations under this Agreement, the Warrant
Agreement, and the Registration Rights Agreement have been duly authorized by all necessary action on the part of the Board of
Directors of the Company. This Agreement, the Warrant Agreement and the Registration Rights Agreement are the valid and binding
agreements of the Company, enforceable in accordance with their respective terms, except to the extent limited by any bankruptcy,
insolvency, or similar law affecting the rights of creditors generally.
(c)
No Conflict. The execution and delivery of this Agreement, the Warrant Agreement, and the Registration
Rights Agreement, the consummation of the transactions contemplated hereunder and thereunder, and the consummation of the
transactions currently contemplated pursuant to the Stem Cell Transaction, in each case by the Company do not and will not violate
any provisions of (i) any federal or state rule, regulation, statute, or law applicable to the Company or (ii) the terms of any order, writ,
or decree of any federal or state court or judicial or regulatory authority or body by which the Company is bound, (iii) the certificate of
incorporation or bylaws of the Company or (iv) any agreement, instrument or contract to which the Company is a party and which is
material to the business of the Company.
(d)
Validity of the Shares and Warrants. The Shares, when delivered at Closing, will be duly authorized and
validly issued, fully paid, and nonassessable. The Warrants, when delivered at Closing, will be the duly authorized and valid
obligations of the Company, enforceable in accordance with the terms of the Warrant Agreement. The Warrant Shares, when issued
upon exercise of the Warrants, will be duly authorized and validly issued, fully paid, and nonassessable.
(e)
Litigation. There is no action, proceeding, or investigation pending which challenges the Company’s right
to enter into this Agreement, or challenges any action taken or to be taken, by the Company in connection with this Agreement.
(f)
Taxes. Since the date of its incorporation, the Company has filed when due all federal, state, and local
income tax returns, and all other returns with respect to taxes which are required to be filed with the appropriate authorities of the
jurisdictions where business is transacted by the Company, or where the Company owns any property, and any taxes due, as reflected
on such tax returns, have been paid.
3
(g)
Capitalization. As of the date of this Agreement, the authorized shares of capital stock of BAC consist of
2,000,000 shares of common stock of which 1,000,000 shares have been designated Series A Common Stock and 1,000,000 have been
designated Series B Common Stock. As of the date of this Agreement, and immediately prior to the Closing there will be: (i) 51,700
shares of Series B Common Stock issued and outstanding, (ii) no shares of common stock in the treasury and (iii) no shares of
preferred stock issued or outstanding. Upon the Closing, there shall be: (i) 30,498,819 shares of Company common stock issued and
outstanding (including the Shares issued pursuant to this Agreement), 6,537,779 of which shall be designated Series A Common Stock
and 23,961,040 of which (including the Shares issued pursuant to this Agreement) shall be designated Series B Common Stock; (ii) no
shares of Company common stock in the treasury; (iii) no shares of preferred stock issued or outstanding, and 3,500,000 Warrants to
purchase Series B Common Stock. At or prior to Closing the authorized capital of BAC shall be 75,000,000 shares of Series A
Common Stock, 75,000,000 shares of Series B Common Stock, and 5,000,000 shares of Preferred Stock. The Company has no
subsidiaries. Except for the issuances of the Series A Common Stock to Geron, and the issuance of Series B Common Stock and
warrants to purchase Series B Common Stock to BioTime, in each case, pursuant to the Asset Contribution Agreement for the Stem
Cell Transaction, and the Shares and Warrants to be issued pursuant to this Agreement, there are no, and at the Closing there shall be
no, issued or outstanding shares or other equity securities of the Company (or shares or other equity securities of the Company
reserved for issuance), and there are no and at the Closing there shall be no, securities of the Company convertible into or
exchangeable for stock or other equity securities of the Company, or other subscriptions, options, warrants, conversion rights, stock
appreciation rights, “phantom” stock, stock units, calls, claims, rights of first refusal, rights (including preemptive rights),
commitments, arrangements or agreements to which the Company is a party or by which it is bound in any case obligating the
Company to issue, deliver, sell, purchase, redeem, acquire or vote, or cause to be issued, delivered, sold, purchased, redeemed,
acquired or voted, stock or other equity securities of the Company, or obligating the Company to grant, extend or enter into any
subscription, option, warrant, conversion right, stock appreciation right, call, right, commitment, arrangement or agreement to issue,
deliver, sell, purchase, redeem, acquire or vote stock or equity securities of the Company.
5.
Investment Representations. Purchaser represents and warrants to the Company that:
(a)
Authority; Enforceability. The Purchaser has the corporate power and authority to execute and deliver,
and to perform all of its obligations under, this Agreement and the Registration Rights Agreement. The execution and delivery of this
Agreement and the Registration Rights Agreement, and the performance by the Purchaser of its obligations under this Agreement and
the Registration Rights Agreement, have been duly authorized by all necessary action on the part of the Board of Directors or similar
governing body of the Purchaser. This Agreement and the Registration Rights Agreement are the valid and binding agreements of the
Purchaser, enforceable in accordance with their respective terms, except to the extent limited by any bankruptcy, insolvency, or
similar law affecting the rights of creditors generally.
4
(b)
No Conflict. The execution and delivery of this Agreement and the Registration Rights Agreement, and
consummation of the transactions contemplated under this Agreement and under the Registration Rights Agreement, including the
purchase of the Shares and Warrants, by the Purchaser do not and will not violate any provisions of (i) any rule, regulation, statute, or
law applicable to the Purchaser or (ii) the terms of any order, writ, or decree of any court or judicial or regulatory authority or body by
which the Purchaser is bound, or (iii) the articles of incorporation, bylaws, or similar charter or governing documents of the Purchaser.
(c)
Due Diligence. Purchaser has made such investigation of the Company as Purchaser deemed appropriate
for determining to acquire (and thereby make an investment in) the Shares and Warrants. In making such investigation, Purchaser has
had access to such financial and other information concerning the Company as Purchaser requested. Purchaser has received and read
copies of the form of Warrant Agreement, including the form of the Warrant, the form of Registration Rights Agreement, the draft
documents listed on Schedule I related to the Stem Cell Transaction, the Certificate of Incorporation of the Company and an Amended
and Restated Certificate of Incorporation of the Company that will become effective in connection with the Stem Cell Transaction,
and the Bylaws of the Company, which together with this Agreement constitute the “Disclosure Documents.” Purchaser is relying on
the information provided in the Disclosure Documents or otherwise communicated to Purchaser in writing by the
Company. Purchaser has not relied on any statement or representations inconsistent with those contained in the Disclosure
Documents or otherwise communicated to Purchaser in writing by the Company. Purchaser has had a reasonable opportunity to ask
questions of and receive answers from the executive officers of the Company concerning the Company, and to obtain additional
information (including all exhibits listed in the Disclosure Documents), to the extent possessed or obtainable by the Company without
unreasonable effort or expense, necessary to verify the information in the Disclosure Documents. All such questions have been
answered to Purchaser’s satisfaction.
(d)
Unregistered Offer and Sale. Purchaser understands that the Shares and Warrants are being offered and
sold without registration under the Act, or qualification under the California Corporate Securities Law of 1968, or under the laws of
any other states of the United States, or the laws of England or the United Kingdom, or any other country, in reliance upon the
exemptions from such registration and qualification requirements. Purchaser acknowledges and understands that the availability of
the aforesaid exemptions depends in part upon the accuracy of certain of the representations, declarations and warranties made by
Purchaser, and the information provided by Purchaser, in this Agreement, Purchaser is making such representations, declarations and
warranties, and is providing such information, with the intent that the same may be relied upon by the Company and its officers and
directors in determining Purchaser’s suitability to acquire the Shares and Warrants. Purchaser understands and acknowledges that no
English or United Kingdom or United States federal, state or other agency has reviewed or endorsed the offering of the Shares and
Warrants or made any finding or determination as to the fairness of the offering or sale of the Shares and Warrants or the
completeness of the information in the Disclosure Documents.
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(e)
Restrictions on Exercise and Transfer. Purchaser understands that the Shares and Warrants may not be
offered, sold, or transferred in any manner, and the Warrants may not be exercised, unless subsequently registered under the Act, or
unless there is an exemption from such registration available for such offer, sale or transfer.
(f)
Knowledge and Experience. Purchaser (or if Purchaser is not a natural person, the officers and directors
making the decision on behalf of Purchaser to purchase the Shares and Warrants) has such knowledge and experience in financial and
business matters to enable Purchaser to utilize the information contained in the Disclosure Documents or otherwise made available to
Purchaser to evaluate the merits and risks of an investment in the Shares and Warrants and to make an informed investment decision.
(g)
Investment Intent. Purchaser is acquiring the Shares and Warrants solely for Purchaser’s own account and
for investment purposes, and not with a view to, or for sale in connection with, any distribution of the Shares and Warrants other than
pursuant to an effective registration statement under the Act or unless there is an exemption from such registration available for such
offer, sale or transfer.
(h)
Forward Looking Statements. Matters discussed in the Disclosure Documents include matters that may
be considered “forward looking” statements within the meaning of Section 27(a) of the Act and Section 21(e) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), which statements Purchaser acknowledges and agrees are not guarantees of
future performance and involve a number of risks and uncertainties. Nothing contained in this Section 5(h) shall modify, amend or
affect Purchaser’s right to rely on the truth, accuracy and completeness of the statements and representations made in the Disclosure
Documents or otherwise communicated to Purchaser in writing by the Company or on the Company’s representations and warranties
contained in this Agreement.
(i)
No Assurance of Return on Investment. It has never been represented, guaranteed or warranted to
Purchaser by the Company or any officer, director, employee, or agent of the Company, that Purchaser will realize any specific value,
sale price, or profit as a result of acquiring the Shares and Warrants.
6.
Stem Cell Transaction.
(a)
Purchaser acknowledges receipt of copies of the draft agreements listed on Schedule I, which the
Company represents are the most recent drafts as of the date hereof of the proposed agreements between or among the Company,
BioTime or Geron relating to the Stem Cell Transaction.
(b)
Upon completion of the Stem Cell Transaction, the Company alone or though one or more joint
development, joint venture, or similar arrangements, will use the assets acquired from Geron pursuant thereto for research and
development of products for commercialization, or will license assets to third parties for such purpose.
6
7.
Resale Restrictions.
(a)
Purchaser agrees that it will not sell, offer for sale, or transfer any of their Shares or Warrants unless those
Shares or Warrants, as applicable, have been registered under the Act, or unless there is an exemption from such registration and an
opinion of counsel reasonably acceptable to the Company has been rendered stating that such offer, sale, or transfer will not violate
any United States federal or state securities laws.
(b)
The certificates evidencing Shares or Warrants will contain a legend to the effect that transfer is
prohibited except pursuant to registration under the Act, or pursuant to an available exemption from registration under the Act.
(c)
The Company will refuse to register the transfer, and will issue instructions to the transfer agent and
registrar of the Shares and Warrants to refuse to register the transfer, of any Shares or Warrants not made pursuant to registration
under the Act or pursuant to an available exemption from registration under the Act.
8.
Accredited Investor Qualification. Purchaser qualifies as an “accredited investor” under Regulation D in the
following manner. (Please check or initial all that apply to verify that you qualify as an “accredited investor.”)
_____(a) Purchaser is a natural person whose net worth, or joint net worth with spouse, at the date of purchase exceeds
$1,000,000 (not including the value of your principal residence and excluding mortgage debt secured by your principal
residence up to the estimated fair market value of the home, except that any mortgage debt incurred by you within 60 days
prior to the date of this Questionnaire shall not be excluded from the determination of your net worth unless such mortgage
debt was incurred to acquire the residence).
_____(b) Purchaser is a natural person whose individual gross income (excluding that of spouse) exceeded $200,000 in each
of the past two calendar years, and who reasonably expects individual gross income exceeding $200,000 in the current
calendar year.
_____(c) Purchaser is a natural person whose joint gross income with spouse exceeded $300,000 in each of the past two
calendar years, and who reasonably expects joint gross income with spouse exceeding $300,000 in the current calendar year.
_____(d) Purchaser is a bank, savings and loan association, broker/dealer, insurance company, investment company, pension
plan or other entity defined in Rule 501(a)(1) of Regulation D as promulgated under the Act by the Securities and Exchange
Commission.
_____(e) Purchaser is a trust, and the trustee is a bank, savings and loan association, or other institutional investor as defined in
Rule 501(a)(1) of Regulation D as promulgated under the Act by the Securities and Exchange Commission.
_____(f) Purchaser is a private business development company as defined in section 202(a)(22) of the Investment Advisers Act
of 1940.
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_____(g) Purchaser is a trust, and the grantor (i) has the power to revoke the trust at any time and regain title to the trust assets;
and (ii) meets the requirements of items (a) (b), or (c) above.
_____(h) Purchaser is a tax-exempt organization described in Section 501(c) (3) of the Internal Revenue Code, or a corporation,
Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring Shares and Warrants
with total assets in excess of $5,000,000.
_____(i) The Purchaser is a trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring
Shares and Warrants, whose purchase is directed by a person who has such knowledge and experience in financial and
business matters that he is capable of evaluating the merits and risks of an investment in the Shares and Warrants.
___(j) The Purchaser is an entity in which all of the equity owners meet the requirements of at least one of items (a) through
(i) above.
9.
Entities. If Purchaser is a corporation, partnership, limited liability company, trust, private limited company, or
other entity, Purchaser represents and warrants that: (a) it is authorized and otherwise duly qualified to purchase and hold the Shares
and Warrants; (b) it has its principal place of business as set forth in Section 11; and (c) it has not been formed or reorganized for the
specific purpose of acquiring Shares and Warrants.
10.
Miscellaneous.
(a)
Governing Law. This Agreement shall be governed by, interpreted, construed and enforced in accordance
with the laws of the State of Delaware, as such laws are applied to contracts by and among residents of Delaware, and which are to be
performed wholly within Delaware.
(b)
Amendment. Neither this Agreement nor any provisions hereof shall be modified, discharged or
terminated except by an instrument in writing signed by the party against whom any waiver, change, discharge or termination is
sought.
(c)
Notices. Any notice, demand or other communication that any party hereto may be required, or may elect,
to give shall be sufficiently given when (i) delivered personally at such address, (ii) delivered to such address by air courier delivery
service, or (iii) delivered by electronic mail (email) to such electronic mail address as may be specified under this Agreement. The
address for notice to the Company is: BioTime Acquisition Corporation, 1301 Harbor Bay Parkway, Suite 100, Alameda, California
94502; Attention: Peter S. Garcia, Chief Financial Officer; email: [email protected]. The address for notice of Purchaser is
shown in Section 11. A party may change its address for notice by giving the other parties notice of a new address in the manner
provided in this Agreement.
(d)
Counterparts. This Agreement may be executed through the use of separate signature pages or in any
number of counterparts, and each of such counterparts shall, for all purposes, constitute one agreement binding on all the parties,
notwithstanding that all parties are not signatories to the same counterpart. Counterparts sent by electronic mail, facsimile, or other
electronic means, including signatures thereon, shall be deemed originals.
8
(e)
Parties. Except as otherwise provided herein, the Agreement shall be binding upon and inure to the
benefit of the parties and their heirs, executors, administrators, successors, legal representatives and assigns.
(f)
Entire Agreement. This Agreement contains the entire agreement of the parties with respect to its subject
matter, and there are no representations, covenants or other agreements with respect to the subject matter of this Agreement except for
those stated or referred to herein.
(g)
No Assignment. This Agreement is not transferable or assignable by the undersigned except as may be
provided herein.
(h)
Delays and Omissions. No delay or omission to exercise any right, power, or remedy accruing to any
party to this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power, or
remedy of such party, nor shall such delay or omission be construed to be a waiver of, or an acquiescence in, any such breach or
default or any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver
of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent, or approval of any kind or character on
the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, must be made in writing, and shall be effective only to the extent specifically set forth in such writing.
(i)
Expenses. Each party shall bear their own expenses incurred on their behalf with respect to this
Agreement and to the transactions contemplated by this Agreement.
(j)
No Brokers or Finders Fees. The Company and Purchaser warrant to each other that no person is entitled
to receive any fee, commission, or other compensation as a broker, finder, or otherwise, in connection with the execution and delivery
of this Agreement or the issue and sale of the Shares and Warrants.
(k)
Titles and Subtitles. The titles or headings of the Sections of this Agreement are for convenience of
reference only and are not to be considered in construing this Agreement.
(l)
Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable
law, each such unenforceable provision shall be excluded from this Agreement and the balance of this Agreement shall be interpreted
as if each such unenforceable provision were so excluded; the balance of this Agreement as so interpreted shall be enforceable in
accordance with its terms.
9
11.
Name:
Address:
Investor Information.
Romulus Films Ltd.
Wessex House, 1 Chesham Street
London SW1X 8ND
email:
Social Security or U.S. Taxpayer
Identification Number:
State of Residence or Principal Place of
Business:
United Kingdom
Country of Residence if other than United
States
United Kingdom
Information from Corporations, Partnerships, Limited Liability Companies, Trusts, or Other Entity Investors:
Date of
Formation:
October 12, 1949
Name and title of person authorized to bind
the entity:
Jonathan C. Woolf, Director
IN WITNESS WHEREOF, the undersigned has entered into this Agreement and hereby agrees to purchase Shares and
Warrants for the price stated above and upon the terms and conditions set forth herein. The undersigned hereby agrees to all of the
terms of the Warrant Agreement and Registration Rights Agreement and agrees to be bound by the terms and conditions thereof.
Dated: January 4, 2013.
Romulus Films Ltd.
By:
s/J. C. Woolf
Title:
Director
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ACCEPTANCE BY COMPANY
The Company hereby agrees to sell to the Purchaser the Shares and Warrants referenced in this Agreement in reliance upon
all the representations, warranties, terms and conditions contained in this Agreement.
IN WITNESS WHEREOF, the undersigned, on behalf of the Company, has executed this acceptance as of the date set forth
below.
Dated: January 4, 2013
BIOTIME ACQUISITION
CORPORATION
By:
s/Thomas Okarma
Title:
President and CEO
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SCHEDULE I
List of Stem Cell Transaction Documents
Asset Contribution Agreement
Form of BioTime Warrant Agreement
BioTime Stem Cell Lines License Agreement
Form of Royalty Agreement
Form of Assumption Agreement
Post-Closing CDA
Form of Amended and Restated BAC Certificate of Incorporation
Form of Amended BioTime Articles of Incorporation
Form of Telomerase Exclusive Sublicense Agreement
12
EXHIBIT A
Warrant Agreement
Dated as of _________, 2013
WARRANT AGREEMENT, (this “Agreement”) dated as of __________, 2013, by BioTime Acquisition Corporation, a
Delaware corporation (the "Company"), for the benefit of each registered holder of a Warrant described herein (a “Holder”).
Section 1.
Issuance of Warrants.
1.1
Number of Warrants; Expiration Date. The Company is issuing common share purchase warrants, as hereinafter
described (the “Warrants”), to purchase up to an aggregate of 350,000 shares of its Series B Common Stock, par value $0.0001 per
share (the “Common Stock”), to the undersigned original Holder pursuant to that certain Asset Contribution Agreement dated as of
January 4, 2013; provided, however, that if prior to the date on which a Warrant is exercised all of the outstanding shares of Series B
Common Stock of the Company shall have been converted into shares of Series A Common Stock of the Company, upon the exercise
of the Warrant the Company shall issue shares of Series A Common Stock in lieu of shares of Series B Common Stock . The
Warrants shall be represented by a certificate in substantially the form of Exhibit A hereto. Subject to the terms of this Agreement, a
Holder of any of such Warrant (including any Warrants into which a Warrant may be divided) shall have the right, which may be
exercised, in whole or in part, at any time on or after the date hereof and prior to 5:00 p.m., New York Time on ______, 2016 [ Note
to draft : three year anniversary of the date issuance] (the “Expiration Date”), to purchase from the Company, at the Warrant Price
(as defined herein) then in effect, the number of fully paid and nonassessable common shares, no par value, of the Company (“Warrant
Shares”) determined as provided in this Agreement and specified in such Warrant. The Warrants may not be exercised or transferred
after the Expiration Date.
1.2
Form of Warrant. The text of the Warrants and of the Purchase Form shall be substantially as set forth in Exhibit
A attached hereto. The price per Warrant Share and the number of Warrant Shares issuable upon exercise of each Warrant are subject
to adjustment upon the occurrence of certain events, all as hereinafter provided. The Warrants shall be executed on behalf of the
Company by its Chief Executive Officer, President, or an Executive or Senior Vice President, under its corporate seal reproduced
thereon attested by its Chief Financial Officer, or Secretary or any Assistant Secretary. The signature of any such officers on the
Warrants may be manual or facsimile, provided, however, that the signature of any such officers must be manual until such time as a
warrant agent is appointed.
1.3
Signatures; Date of Warrants. Warrants bearing the manual or facsimile signatures of individuals who were at any
time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any one of them shall have
ceased to hold such offices prior to the delivery of such Warrants or did not hold such offices on the date of this Agreement. In the
event that the Company shall appoint a warrant agent to act on its behalf in connection with the division, transfer, exchange or
exercise of Warrants, the Warrants issued after the date of such appointment shall be dated as of the date of countersignature thereof
by the warrant agent upon division, exchange, substitution or transfer. Until such time as the Company shall appoint a warrant agent,
Warrants shall be dated as of the date of execution thereof by the Company either upon initial issuance or upon division, exchange,
substitution or transfer.
1
1.4
Countersignature of Warrants. In the event that the Company shall appoint a warrant agent to act on its behalf in
connection with the division, transfer, exchange or exercise of Warrants, the Warrants issued after the date of such appointment shall
be countersigned by the warrant agent (or any successor to the warrant agent then acting as warrant agent) and shall not be valid for
any purpose unless so countersigned. Warrants may be countersigned, however, by the warrant agent (or by its successor as warrant
agent hereunder) and may be delivered by the warrant agent, notwithstanding that the persons whose manual or facsimile signatures
appear thereon as proper officers of the Company shall have ceased to be such officers at the time of such countersignature, issuance
or delivery. The warrant agent (if so appointed) shall, upon written instructions of the President, Chief Executive Officer, an
Executive or Senior Vice President, or the Chief Financial Officer of the Company, countersign, issue and deliver the Warrants and
shall countersign and deliver Warrants as otherwise provided in this Agreement.
Section 2.
Exercise of Warrants; Restrictions.
2.1
Exercise of Warrants. (a) A Warrant may be exercised upon surrender of the certificate or certificates evidencing
the Warrant to be exercised, together with the form of election to purchase on the reverse thereof duly completed and signed, to the
Company at its principal office (or if appointed, the principal office of the warrant agent) and upon payment of the Warrant Price (as
defined and determined in accordance with the provisions of Section 3 and Section 6 to the Company (or if appointed, to the warrant
agent for the account of the Company), for the number of Warrant Shares in respect of which such Warrants are then
exercised. Payment of the aggregate Warrant Price shall be made by bank wire transfer to the account of the Company or bank
cashier's check.
(b)
Subject to Section 2.2 and Section 5, upon the surrender of the Warrant and payment of the Warrant Price as
aforesaid, the Company (or if appointed, the warrant agent) shall promptly, and in any event within three (3) business days, cause to
be issued and delivered to or upon the written order of the Holder and in such name or names as the Holder may designate, a
certificate or certificates for the number of full Warrant Shares so purchased upon the exercise of such Warrant, together with cash, as
provided in Section 8, in respect of any fractional Warrant Shares otherwise issuable upon such exercise. Such Warrant Share
certificate or certificates shall be deemed to have been issued and any person so designated to be named therein shall be deemed to
have become a holder of record of such Warrant Shares as of the date of the surrender of such Warrants and payment of the Warrant
Price, as aforesaid. The rights of purchase represented by the Warrant shall be exercisable, at the election of the Holder thereof, either
in full or from time to time in part. In the event that a certificate evidencing the Warrant is exercised in respect of less than all of the
Warrant Shares purchasable on such exercise at any time prior to the date of expiration of the Warrant, a new certificate evidencing
the unexercised portion of the Warrant will be issued, and the warrant agent (if so appointed) is hereby irrevocably authorized to
countersign and to deliver the required new Warrant certificate or certificates pursuant to the provisions of this Section 2.1. The
Company, whenever required by the warrant agent (if appointed), will supply the warrant agent with Warrant certificates duly
executed on behalf of the Company for such purpose.
2.2
Restrictions on Exercise of Warrants. (a) The Warrants may not be exercised unless registered under the
Securities Act of 1933, as amended (the “Act”) or an exemption from such registration is available.
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(b)
Unless the Warrant and Warrant Shares have been registered under the Act and under any applicable
state securities laws, each person who is exercising a Warrant will be required to give written certification that he, she or it is an
“accredited investor” or a written opinion of counsel, acceptable to the Company and to the transfer agent of the Common Stock, to
the effect that exercise of the Warrant and the issuance of the Warrant Shares are exempt from registration under the Act and under
any applicable state securities laws.
(c)
The Company shall be entitled to obtain, as a condition precedent to its issuance of any certificates
representing Warrant Shares or any other securities issuable upon any exercise of a Warrant, a letter or other instrument from the
Holder containing such covenants, representations or warranties by such Holder as reasonably deemed necessary by the Company to
effect compliance by the Company with the requirements of the Act and any other applicable United States federal and/or state
securities laws.
(d)
Any exercise, attempt to exercise, or purported exercise of a Warrant in violation of the restrictions set
forth in this Section 2.2 shall be deemed null and void and of no binding effect.
(e)
The Company will refuse to issue, and will issue instructions to the transfer agent and registrar of its
Common Stock to refuse to issue, any Warrant Shares upon any exercise not made pursuant to registration under the Act and
applicable state securities laws, or pursuant to an available exemption from registration under the Act and applicable state securities
laws.
Section 3.
Warrant Price. Subject to any adjustments required by Section 6, the price per share at which Warrant Shares shall
be purchasable upon exercise of a Warrant (as to any particular Warrant, the “Warrant Price”) shall be Five Dollars ($5.00) per share.
Section 4.
Transferability of Warrants and Warrant Shares; Restrictions on Transfer.
4.1
Registration. Each Warrant shall be numbered and shall be registered on the books of the Company (the “Warrant
Register”) as issued. The Company and the warrant agent (if appointed) shall be entitled to treat the Holder of any Warrant as the
owner in fact thereof for all purposes and shall not be bound to recognize any equitable or other claim or interest in such Warrant on
the part of any other person, and shall not be liable for any registration of transfer of any Warrant which is registered or to be
registered in the name of a fiduciary or the nominee of a fiduciary upon the instruction of such fiduciary, unless made with the actual
knowledge that a fiduciary or nominee is committing a breach of trust in requesting such registration of transfer, or with such
knowledge of such facts that its participation therein amounts to bad faith. Each Warrant shall initially be registered in the name of
the person to whom it is originally issued.
4.2
Transfer. Subject to Section 4.3, the Warrants shall be transferable only on the Warrant Register upon delivery of
the Warrant certificate duly endorsed by the Holder or by his duly authorized attorney or representative, or accompanied by proper
evidence of succession, assignment or authority to transfer. In all cases of transfer by an attorney, the original power of attorney, duly
approved, or a copy thereof, duly certified, shall be deposited and remain with the Company (or the warrant agent, if appointed). In
case of transfer by executors, administrators, guardians or other legal representatives, duly authenticated evidence of their authority
shall be produced, and may be required to be deposited and remain with the Company (or the warrant agent, if appointed) in its
discretion. Upon any registration of transfer, the Company shall execute and deliver (or if appointed, the warrant agent shall
countersign and deliver) a new Warrant or Warrants to the persons entitled thereto.
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4.3
Restrictions on Transfer of Warrants and Warrant Shares. (a) The Warrants, and any Warrant Shares issued upon
the exercise of the Warrants, may not be sold, pledged, hypothecated, transferred or assigned, in whole or in part, unless a registration
statement under the Act, and under any applicable state securities laws, is effective therefor, or an exemption from such registration is
then available and an opinion of counsel, acceptable to the Company and to the transfer agent or warrant agent, if any, has been
rendered stating that such sale, pledge, hypothecation, transfer or assignment will not violate the Act or any other United States federal
or state securities laws.
(b)
As a condition precedent to the registration of transfer and issuance of any certificates representing
Warrants or Warrant Shares upon transfer, the Company shall be entitled to obtain a letter or other instrument from the Holder
containing such covenants, representations or warranties by such Holder as reasonably deemed necessary by the Company to effect
compliance by the Company with the requirements of the Act and any other applicable federal and/or state securities laws.
(c)
Any sale, pledge, hypothecation, transfer, or assignment of a Warrant or Warrant Shares in violation of
the foregoing restrictions shall be deemed null and void and of no binding effect.
(d)
The Company will issue instructions to any warrant agent that may be appointed, and to the transfer
agent and registrar of its Common Stock, to refuse to register the transfer of any Warrant and Warrant Shares not made pursuant to
registration under the Act and applicable state securities laws, or pursuant to an available exemption from registration under the Act
and applicable state securities laws.
Section 5.
Payment of Taxes. The Company will pay all documentary stamp taxes, if any, attributable to the initial issuance
of Warrant Shares upon the exercise of Warrants; provided, however, that the Company shall not be required to pay any tax or taxes
which may be payable in respect of any transfer involved in the issue or delivery of any Warrant or certificates for Warrant Shares in a
name other than that of the registered Holder of such Warrants or Warrant Shares.
Section 6.
Adjustment of Warrant Price and Number of Warrant Shares. The number and kind of securities purchasable upon
the exercise of each Warrant and the Warrant Price shall be subject to adjustment from time to time upon the happening of certain
events, as hereinafter defined.
6.1
Adjustments. The number of Warrant Shares purchasable upon the exercise of each Warrant and the Warrant
Price shall be subject to adjustment as follows:
(a)
If the Company shall (i) pay a dividend in shares of Common Stock or make a distribution in shares of
Common Stock, (ii) subdivide its outstanding shares of Common Stock, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock or (iv) reclassify or change (including a change to the right to receive, or a change into, as
the case may be (other than with respect to a merger or consolidation pursuant to the exercise of appraisal rights), shares of stock,
other securities, property, cash or any combination thereof) its Common Stock (including any such reclassification or change in
connection with a consolidation or merger in which the Company is the surviving corporation), the number of Warrant Shares
purchasable upon exercise of each Warrant immediately prior thereto shall be adjusted so that the Holder of each Warrant shall be
entitled to receive the kind and number of Warrant Shares or other securities of the Company or other property which the Holder
would have owned or have been entitled to receive after the happening of any of the events described above, had such Warrant been
exercised immediately prior to the happening of such event or any record date with respect thereto. An adjustment made pursuant to
this paragraph (a) shall become effective immediately after the effective date of such event retroactive to the record date, if any, for
such event.
4
(b)
If the Company shall issue rights, options or warrants to all holders of its outstanding Common Stock,
without any charge to such holders, entitling them to subscribe for or purchase shares of Common Stock at a price per share which is
lower at the record date mentioned below than the then current market price per share of Common Stock, the number of Warrant
Shares thereafter purchasable upon the exercise of each Warrant shall be determined by multiplying the number of Warrant Shares
theretofore purchasable upon exercise of each Warrant by a fraction, of which the numerator shall be the number of shares of
Common Stock outstanding on the date of issuance of such rights, options or warrants plus the number of additional shares of
Common Stock offered for subscription or purchase in connection with such rights, options or warrants, and of which the denominator
shall be the number of shares of Common Stock outstanding on the date of issuance of such rights, options or warrants plus the
number of shares which the aggregate exercise price for the total number of shares of Common Stock issuable upon exercise of such
rights, options or warrants would purchase at the current market price per share of Common Stock (as determined pursuant to
paragraph (d) below) at such record date. Such adjustment shall be made whenever such rights, options or warrants are issued, and
shall become effective immediately after the record date for the determination of stockholders entitled to receive such rights, options
or warrants.
(c)
If the Company shall distribute to all holders of its shares of Common Stock (including any distribution
made in connection with a merger in which the Company is the surviving corporation) evidences of its indebtedness or assets
(excluding cash, dividends or distributions payable out of consolidated earnings or earned surplus and dividends or distributions
referred to in paragraph (a) above) or rights, options or warrants, or convertible or exchangeable securities containing the right to
subscribe for or purchase shares of Common Stock (excluding those referred to in paragraph (b) above), then in each case the number
of Warrant Shares thereafter purchasable upon the exercise of each Warrant shall be determined by multiplying the number of Warrant
Shares theretofore purchasable upon the exercise of each Warrant by a fraction, of which the numerator shall be the then current
market price per share of Common Stock (as determined pursuant to paragraph (d) below) on the date of such distribution, and of
which the denominator shall be the then current market price per share of Common Stock, less the then fair value (as reasonably
determined by the Board of Directors of the Company, whose determination shall be conclusive) of the portion of the assets or
evidences of indebtedness so distributed or of such subscription rights, options or warrants, or of such convertible or exchangeable
securities applicable to one share of Common Stock. Such adjustment shall be made whenever any such distribution is made, and
shall become effective on the date of distribution retroactive to the record date for the determination of shareholders entitled to receive
such distribution.
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(d)
For the purpose of any computation under paragraphs (b) and (c) of this Section 6.1, the current market
price per share of Common Stock at any date shall be the volume weighted average of the daily closing prices for the 20 consecutive
trading days ending one trading day prior to the date of such computation. The closing price for each day shall be the last reported
sales price regular way or, in case no such reported sale takes place on such day, the average of the closing bid and asked prices
regular way for such day, in each case on the principal national securities exchange on which the shares of Common Stock are listed
or admitted to trading or, if not so listed or admitted to trading, the last sale price of the Common Stock on the OTC Bulletin Board, or
any comparable system. If the current market price of the Common Stock cannot be so determined, the Board of Directors of the
Company shall reasonably determine the current market price on the basis of such quotations as are available.
(e)
No adjustment in the number of Warrant Shares purchasable hereunder shall be required unless such
adjustment would require an increase or decrease of at least one percent (1%) in the number of Warrant Shares purchasable upon the
exercise of each Warrant; provided, however, that any adjustments which by reason of this paragraph (e) are not required to be made
shall be carried forward and taken into account in the determination of any subsequent adjustment. All calculations shall be made
with respect to the number of Warrant Shares purchasable hereunder, to the nearest tenth of a share and with respect to the Warrant
Price payable hereunder, to the nearest whole cent.
(f)
Whenever the number of Warrant Shares purchasable upon the exercise of each Warrant is adjusted, as
herein provided, the Warrant Price payable upon exercise of each Warrant shall be adjusted by multiplying such Warrant Price
immediately prior to such adjustment by a fraction, of which the numerator shall be the number of Warrant Shares purchasable upon
the exercise of each Warrant immediately prior to such adjustment, and of which the denominator shall be the number of Warrant
Shares purchasable immediately thereafter.
(g)
No adjustment in the number of Warrant Shares purchasable upon the exercise of each Warrant need be
made under paragraphs (b) and (c) if the Company issues or distributes to each Holder of Warrants the rights options, warrants, or
convertible or exchangeable securities, or evidences of indebtedness or assets referred to in those paragraphs which each Holder of
Warrants would have been entitled to receive had the Warrants been exercised prior to the happening of such event or the record date
with respect thereto. No adjustment need be made for a change in the par value of the Warrant Shares.
(h)
For the purpose of this Section 6, the term “Common Stock” shall mean (i) the Series B common stock
of the Company at the date of this Agreement, (ii) any other series or class of stock resulting from successive changes or
reclassifications of such shares consisting solely of changes in par value, or from par value to no par value, or from no par value to par
value, or (iii) the Series A common stock, par value $0.0001 per share, of the Company at any time after all outstanding shares of
Series B Common Stock have been converted into shares of Series A Common Stock, or (iv) any other series or class of stock
resulting from successive changes or reclassifications of Series A common stock consisting solely of changes in par value, or from par
value to no par value, or from no par value to par value after all outstanding shares of Series B Common Stock have been converted
into shares of Series A Common Stock. In the event that at any time, as a result of an adjustment made pursuant to paragraph (a)
above, the Holders shall become entitled to purchase any securities of the Company other than shares of Common Stock, thereafter the
number of such other shares so purchasable upon exercise of each Warrant, and the Warrant Price of such shares, shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the
Warrant Shares contained in paragraphs (a) through (i), inclusive, and the provisions of Section 6.3 and Section 8, with respect to the
Warrant Shares, shall apply on like terms to any such other securities.
6
(i)
Upon the expiration of any rights, options, warrants or conversion or exchange privileges that result in an
adjustment pursuant to this Section 6.1, if any thereof shall not have been exercised, the Warrant Price and the number of Warrant
Shares purchasable upon the exercise of each Warrant shall, upon such expiration, be readjusted and shall thereafter be such as it
would have been had it been originally adjusted (or had the original adjustment not been required, as the case may be) as if (A) the
only shares of Common Stock so issued were the shares of Common Stock, if any, actually issued or sold upon the exercise of such
rights, options, warrants or conversion or exchange rights and (B) such shares of Common Stock, if any, were issued or sold for the
consideration actually received by the Company upon such exercise plus the aggregate consideration, if any, actually received by the
Company for the issuance, sale or grant of all such rights, options, warrants or conversion or exchange rights whether or not exercised.
6.2
Notice of Adjustment. Whenever the number of Warrant Shares purchasable upon the exercise of each Warrant or
the Warrant Price of such Warrant Shares is adjusted, as herein provided, the Company shall, or in the event that a warrant agent is
appointed, the Company shall cause the warrant agent, promptly, in any event within ten (10) days send to each Holder notice of such
adjustment or adjustments. Such notice shall set forth the number of Warrant Shares purchasable upon the exercise of each Warrant
and the Warrant Price of such Warrant Shares after such adjustment, setting forth a brief statement of the facts requiring such
adjustment and setting forth the computation by which such adjustment was made.
6.3
No Adjustment for Dividends. Except as provided in Section 6.1, no adjustment in respect of any dividends shall
be made during the term of a Warrant or upon the exercise of a Warrant.
6.4
Preservation of Purchase Rights Upon Merger, Consolidation, etc. In case of any consolidation of the Company
with or merger of the Company into another corporation or in case of any sale, transfer or lease to another corporation of all or
substantially all the assets of the Company, the Company or such successor or purchasing corporation, as the case may be, shall
execute an agreement that each Holder shall have the right thereafter, upon such Holder's election, either (i) upon payment of the
Warrant Price in effect immediately prior to such action, to purchase upon exercise of each Warrant the kind and amount of shares and
other securities and property (including cash) which the Holder would have owned or have been entitled to receive after the happening
of such consolidation, merger, sale, transfer or lease had such Warrant been exercised immediately prior to such action (such shares
and other securities and property (including cash) being referred to as the “Sale Consideration”) or (ii) to receive, in cancellation of
such Warrant (and in lieu of paying the Warrant price and exercising such Warrant), the Sale Consideration less a portion thereof
having a fair market value (as reasonably determined by the Company) equal to the Warrant Price (it being understood that, if the Sale
Consideration consists of more than one type of shares, other securities or property, the amount of each type of shares, other securities
or property to be received shall be reduced proportionately); provided, however, that no adjustment in respect of dividends, interest or
other income on or from such shares or other securities and property shall be made during the term of a Warrant or upon the exercise
of a Warrant. The Company shall mail by first class mail, postage prepaid, to each Holder, notice of the execution of any such
agreement. Such agreement shall provide for adjustments, which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 6. The provisions of this paragraph shall similarly apply to successive consolidations,
mergers, sales, transfers or leases. The warrant agent (if appointed) shall be under no duty or responsibility to determine the
correctness of any provisions contained in any such agreement relating to the kind or amount of shares of stock or other securities or
property receivable upon exercise of Warrants or with respect to the method employed and provided therein for any adjustments and
shall be entitled to rely upon the provisions contained in any such agreement.
7
6.5
Statement on Warrants. Irrespective of any adjustments in the Warrant Price or the number or kind of shares
purchasable upon the exercise of the Warrants, Warrants issued before or after such adjustment may continue to express the same
price and number and kind of shares as are stated in the Warrants initially issuable pursuant to this Agreement.
Section 7.
Reservation of Warrant Shares; Purchase and Cancellation of Warrants.
7.1
Reservation of Warrant Shares. There have been reserved, and the Company shall at all times keep reserved, out
of its authorized Common Stock, a number of shares of Common Stock sufficient to provide for the exercise of the rights of purchase
represented by the outstanding Warrants and any additional Warrants issuable hereunder. The Company will keep a copy of this
Agreement on file with the Transfer Agent for the Common Stock and with every subsequent transfer agent for any shares of the
Company's capital stock issuable upon the exercise of the rights of purchase represented by the Warrants. The warrant agent, if
appointed, will be irrevocably authorized to requisition from time to time from such Transfer Agent the stock certificates required to
honor outstanding Warrants upon exercise thereof in accordance with the terms of this Agreement. The Company will supply such
Transfer Agent with duly executed stock certificates for such purposes and will provide or otherwise make available any cash which
may be payable as provided in Section 8. The Company will furnish such Transfer Agent a copy of all notices of adjustments and
certificates related thereto, transmitted to each Holder pursuant to Section 6.2.
7.2
Purchase of Warrants by the Company. The Company shall have the right, except as limited by law, other
agreements or herein, with the consent of the Holder, to purchase or otherwise acquire Warrants at such times, in such manner and for
such consideration as it may deem appropriate.
7.3
Cancellation of Warrants. In the event the Company shall purchase or otherwise acquire Warrants, the same shall
thereupon be cancelled and retired. The warrant agent (if so appointed) shall cancel any Warrant surrendered for exchange,
substitution, transfer or exercise in whole or in part.
Section 8.
Fractional Interests. The Company shall not be required to issue fractional Warrants upon the transfer of any
Warrant, or fractional Warrant Shares upon the exercise of Warrants. If more than one Warrant shall be presented for exercise in full
at the same time by the same Holder, the number of full Warrant Shares which shall be issuable upon the exercise thereof shall be
computed on the basis of the aggregate number of Warrant Shares purchasable on exercise of the Warrants so presented. If any
fraction of a Warrant Share would, except for the provisions of this Section 8, be issuable on the exercise of any Warrant (or specified
portion thereof), the Company shall pay an amount in cash equal to the volume weighted average of the daily closing sale prices
(determined in accordance with paragraph 6.1(d)) per share of Common Stock for the 20 consecutive trading days ending one trading
day prior to the date the Warrant is presented for exercise, multiplied by such fraction.
8
Section 9.
Exchange of Warrant Certificates. Each Warrant certificate may be exchanged, at the option of the Holder thereof,
for another Warrant certificate or Warrant certificates in different denominations (but not for any fractional Warrant or any
denomination that would, but for Section 8, result in the issuance of a fractional share upon exercise) entitling the Holder or Holders
thereof to purchase a like aggregate number of Warrant Shares as the certificate or certificates surrendered then entitle the Holder to
purchase. Any Holder desiring to exchange a Warrant certificate or certificates shall make such request in writing delivered to the
Company at its principal office (or, if a warrant agent is appointed, the warrant agent at its principal office) and shall surrender,
properly endorsed, the certificate or certificates to be so exchanged. Thereupon, the Company (or, if appointed, the warrant agent)
shall execute and deliver to the person entitled thereto a new Warrant certificate or certificates, as the case may be, as so requested, in
such name or names as such Holder shall designate.
Section 10.
Listing of Warrant Shares on Securities Exchange. The Company will promptly use commercially reasonable
efforts to cause the Warrant Shares to be listed, subject to official notice of issuance, on the principal national securities exchanges on
which the Common Stock is listed and whose rules and regulations require such listing, as soon as practicable following the date of
this Warrant Agreement.
Section 11.
Mutilated or Missing Warrants. In case any of the certificates evidencing the Warrants shall be mutilated, lost,
stolen or destroyed, the Company may in its discretion issue and deliver (and, if appointed, the warrant agent shall countersign and
deliver) in exchange and substitution for and upon cancellation of the mutilated Warrant certificate, or in lieu of and substitution for
the Warrant certificate lost, stolen or destroyed, a new Warrant certificate of like tenor, but only upon receipt of evidence reasonably
satisfactory to the Company and the warrant agent (if so appointed) of such loss, theft or destruction of such Warrant, and an
indemnity or bond, if requested, also reasonably satisfactory to them. An applicant for such a substitute Warrant certificate shall also
comply with such other reasonable regulations and pay such other reasonable charges as the Company (or the warrant agent, if so
appointed) may prescribe.
Section 12.
No Rights as Shareholders; Notices to Holders. Nothing contained in this Agreement or in any of the Warrants
shall be construed as conferring upon the Holders or their transferees the right to vote or to receive dividends or to consent or to
receive notice as shareholders in respect of any meeting of shareholders for the election of directors of the Company or any other
matter, or any rights whatsoever as shareholders of the Company. If, however, at any time prior to the expiration of the Warrants and
prior to their exercise, any of the following events shall occur: (a) the Company shall declare any dividend payable in any securities
upon its shares of Common Stock or make any distribution (other than a regular cash dividend, as such dividend may be increased
from time to time, or a dividend payable in shares of Common Stock) to the holders of its shares of Common Stock; or (b) the
Company shall offer to the holders of its shares of Common Stock on a pro rata basis any cash, additional shares of Common Stock or
other securities of the Company or any right to subscribe for or purchase any thereof; or (c) a dissolution, liquidation or winding up of
the Company (other than in connection with a consolidation, merger, sale, transfer or lease of all or substantially all of its property,
assets, and business as an entirety) shall be proposed, then in any one or more of said events the Company shall (i) give notice in
writing of such event as provided in Section 14 and (ii) if the Warrants have been registered pursuant to the Act, cause notice of such
event to be published once in The Wall Street Journal (national edition), such giving of notice and publication to be completed at least
10 days prior to the date fixed as a record date or the date of closing the transfer books for the determination of the stockholders
entitled to such dividend, distribution, or subscription rights or for the determination of stockholders entitled to vote on such proposed
dissolution, liquidation or winding up or the date of expiration of such offer. Such notice shall specify such record date or the date of
closing the transfer books or the date of expiration, as the case may be. Failure to publish, mail or receive such notice or any defect
therein or in the publication or mailing thereof shall not affect the validity of any action in connection with such dividend, distribution
or subscription rights, or such proposed dissolution, liquidation or winding up, or such offer.
9
Section 13.
Appointment of Warrant Agent. At such time as the Company shall register Warrants under the Act, the Company
shall appoint a warrant agent to act on behalf of the Company in connection with the issuance, division, transfer and exercise of
Warrants. At such time as the Company appoints a warrant agent, the Company shall enter into a new Warrant Agreement with the
warrant agent pursuant to which all new Warrants will be issued upon registration of transfer or division, which will reflect the
appointment of the warrant agent, as well as additional customary provisions as shall be reasonably requested by the warrant agent in
connection with the performance of its duties. In the event that a warrant agent is appointed, the Company shall (i) promptly notify
the Holders of such appointment and the place designated for transfer, exchange and exercise of the Warrants, and (ii) take such steps
as are necessary to insure that Warrants issued prior to such appointment may be exchanged for Warrants countersigned by the
warrant agent.
Section 14.
Notices; Principal Office. Any notice pursuant to this Agreement by the Company or by any Holder to the warrant
agent (if so appointed), or by the warrant agent (if so appointed) or by any Holder to the Company, shall be in writing and shall be
delivered in person, or mailed first class, postage prepaid, or sent by air delivery service (a) to the Company, at its office, Attention:
Chief Financial Officer, or (b) to the warrant agent, at its offices as designated at the time the warrant agent is appointed. The address
of the principal office of the Company is 1301 Harbor Bay Parkway, Suite 100, Alameda, California 94502. Any notice given
pursuant to this Agreement by the Company or the warrant agent to a Holder shall be in writing and shall be mailed first class, postage
prepaid, or sent by air delivery service, or otherwise delivered to such Holder at the Holder’s address on the books of the Company or
the warrant agent, as the case may be. Each party hereto and any Holder may from time to time change the address to which notices to
it are to be delivered or mailed hereunder by notice to the other party.
Section 15.
Successors. Except as expressly provided herein to the contrary, all the covenants and provisions of this
Agreement by or for the benefit of the Company and the Holder shall bind and inure to the benefit of their respective successors and
permitted assigns hereunder.
10
Section 16.
Legends. The Warrants shall bear an appropriate legend, conspicuously disclosing the restrictions on exercise
under Section 2.2, and the Warrants and Warrant Shares shall bear an appropriate legend, conspicuously disclosing the restrictions on
transfer under Section 4.3 until the same are registered for sale under the Act or are transferred in a transaction exempt from
registration under the Act entitling the transferee to receive securities that are not deemed to be “restricted securities” as such term is
defined in Rule 144 under the Act. The Company agrees that upon the sale of the Warrants and Warrant Shares pursuant to a
registration statement or an exemption entitling the transferee to receive securities that are not deemed to be “restricted securities,” or
at such time as registration under the Act shall no longer be required, upon the presentation of the certificates containing such a legend
to the transfer agent or warrant agent, if any, it will remove such legend; provided, that unless the request for removal of the legend is
in connection with a sale registered under the Act, the Holder shall have provided an opinion of counsel, acceptable to the Company
and the transfer agent or warrant agent, as applicable, to the effect that such legend may be removed in compliance with the Act.
Section 17.
Applicable Law. This Agreement and each Warrant issued hereunder shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to principles of conflict of laws.
Section 18.
Benefits of this Agreement. This Agreement shall be for the sole and exclusive benefit of the Company, the
warrant agent and the Holders of the Warrants. Nothing in this Agreement shall be construed to give to any person or corporation
other than the Company, the warrant agent (if appointed) and the Holders any legal or equitable right, remedy or claim under this
Agreement.
Section 19.
Counterparts. This Agreement may be executed in any number of counterparts (including by separate counterpart
signature pages) and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
Section 20.
Captions. The captions of the Sections and subsections of this Agreement have been inserted for convenience only
and shall have no substantive effect.
11
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, all as of the day and year first
above written.
BIOTIME ACQUISITION CORPORATION
By:
Thomas Okarma,
Chief Executive Officer
Attest:
By:
Judith Segall, Secretary
12
EXHIBIT A
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), OR UNDER APPLICABLE STATE SECURITIES LAWS. THIS WARRANT MAY NOT BE EXERCISED,
SOLD, PLEDGED, HYPOTHECATED, TRANSFERRED OR ASSIGNED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, OR PURSUANT
TO AN AVAILABLE EXEMPTION FROM REGISTRATION. HEDGING TRANSACTIONS INVOLVING THIS
WARRANT OR ANY COMMON STOCK OR OTHER SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT
MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT
VOID AFTER 5:00 P.M. NEW YORK TIME, _________, 2016
Certificate No. ___
Warrant to Purchase
[Insert number of Shares]
Shares of Series B Common Stock
BIOTIME ACQUISITION CORPORATION
SERIES B COMMON STOCK PURCHASE WARRANTS
This certifies that, for value received, _____________ or registered assigns (the “Holder”), is entitled to purchase from
BioTime Acquisition Corporation, a Delaware corporation (the “Company”), at a purchase price per share of Five Dollars ($5.00) (the
“Warrant Price”), the number of shares of its Series B Common Stock, par value $0.0001 per share (the “Common Stock”), shown
above. The series and number of shares purchasable upon exercise of the Common Stock Purchase Warrants (the “Warrants”) and the
Warrant Price are subject to adjustment from time to time as set forth in the Warrant Agreement referred to below. Outstanding
Warrants not exercised prior to 5:00 p.m., New York time, on ___________, 2016 shall thereafter be void.
Subject to restriction specified in the Warrant Agreement, Warrants may be exercised in whole or in part by presentation of
this Warrant Certificate with the Purchase Form on the reverse side hereof duly executed, and simultaneous payment of the Warrant
Price (or as otherwise set forth in Section 6.4 of the Warrant Agreement) at the principal office of the Company (or if a warrant agent
is appointed, at the principal office of the warrant agent). Payment of the Warrant Price shall be made by bank wire transfer to the
account of the Company or by bank cashier's check as provided in Section 2.1 of the Warrant Agreement. As provided in the Warrant
Agreement, the Warrant Price and the number or kind of shares which may be purchased upon the exercise of the Warrant evidenced
by this Warrant Certificate are, upon the happening of certain events, subject to modification and adjustment.
1
This Warrant Certificate is issued under and in accordance with a Warrant Agreement dated as of ____________, 2013, and
is subject to the terms and provisions contained in the Warrant Agreement, to all of which the Holder of this Warrant Certificate by
acceptance of this Warrant Certificate consents. A copy of the Warrant Agreement may be obtained by the Holder hereof upon
written request to the Company. In the event that pursuant to Section 13 of the Warrant Agreement a warrant agent is appointed and a
new warrant agreement entered into between the Company and such warrant agent, then such new warrant agreement shall constitute
the Warrant Agreement for purposes hereof and this Warrant Certificate shall be deemed to have been issued pursuant to such new
warrant agreement.
Upon any partial exercise of the Warrant evidenced by this Warrant Certificate, there shall be issued to the Holder hereof a
new Warrant Certificate in respect of the shares of Common Stock as to which the Warrant evidenced by this Warrant Certificate shall
not have been exercised. This Warrant Certificate may be exchanged at the office of the Company (or the warrant agent, if appointed)
by surrender of this Warrant Certificate properly endorsed either separately or in combination with one or more other Warrant
Certificates for one or more new Warrant Certificates evidencing the right of the Holder thereof to purchase the aggregate number of
shares as were purchasable on exercise of the Warrants evidenced by the Warrant Certificate or Certificates exchanged. No fractional
shares will be issued upon the exercise of any Warrant, but the Company will pay the cash value thereof determined as provided in the
Warrant Agreement. This Warrant Certificate is transferable at the office of the Company (or the warrant agent, if appointed) in the
manner and subject to the limitations set forth in the Warrant Agreement.
The Holder hereof may be treated by the Company, the warrant agent (if appointed), and all other persons dealing with this
Warrant Certificate as the absolute owner hereof for any purpose and as the person entitled to exercise the rights represented hereby,
or to the transfer hereof on the books of the Company, any notice to the contrary notwithstanding, and until such transfer on such
books, the Company (and the warrant agent, if appointed) may treat the Holder hereof as the owner for all purposes.
Neither the Warrant nor this Warrant Certificate entitles any Holder to any of the rights of a stockholder of the Company.
2
[This Warrant Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by the
warrant agent.] *
DATED:
BIOTIME ACQUISITION CORPORATION
(Seal)
By:
Title:
Attest:
[COUNTERSIGNED:
WARRANT AGENT
By:
Authorized Signature
*
]*
To be part of the Warrant only after the appointment of a warrant agent pursuant to Section 13 of the Warrant Agreement.
3
PURCHASE FORM
(To be executed upon exercise of Warrant)
To BioTime Acquisition Corporation:
The undersigned hereby irrevocably elects to exercise the right of purchase represented by the within Warrant Certificate
for, and to purchase thereunder, _______ shares of Series B Common Stock, as provided for therein, and tenders herewith payment of
the Warrant Price in full in the form of a bank wire transfer to the account of the Company or by bank cashier's check in the amount of
$______________.
Please issue a certificate or certificates for such shares of Series B Common Stock in the name of, and pay any cash for any
fractional share to:
(Please Print Name)
(Please Print Address)
(Social Security Number or
Other Taxpayer Identification Number)
(Signature)
NOTE: The above signature should correspond exactly with the name on the face of this Warrant Certificate or with the name of the
assignee appearing in the assignment form below.
And, if said number of shares shall not be all the shares purchasable under the within Warrant Certificate, a new Warrant
Certificate is to be issued in the name of said undersigned for the balance remaining of the share purchasable thereunder less any
fraction of a share paid in cash.
4
ASSIGNMENT
(To be executed only upon assignment of Warrant Certificate)
For value received, _____________ hereby sells, assigns and transfers unto _______________ the within Warrant
Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint _________________
attorney, to transfer said Warrant Certificate on the books of the within-named Company, with full power of substitution in the
premises.
Dated:
(Signature)
NOTE: The above signature should correspond exactly with the
name on the face of this Warrant Certificate.
5
EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of January 4, 2013, is made by and among BioTime Acquisition
Corporation, a Delaware corporation (the “ Company ”), and each Shareholder (as defined below) who is the registered holder of
Registrable Securities (as defined below).
WHEREAS, the parties hereto desire to provide for, among other things, the grant of registration rights with respect to the
Registrable Securities.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
1.
Definitions and Interpretations.
(a)
Definitions. As used in this Agreement, and unless the context requires a different meaning, the following terms
have the meanings indicated:
(i)
“Acquired Shares” means the Shares issued pursuant to that certain Stock and Warrant Purchase
Agreement, of even date, between the Company and the Shareholders named on Schedule I, including any Shares into which such
Shares may be converted, and any Shares issued or issuable upon the exercise of the Warrants.
(ii)
“Affiliate” means, with respect to a Person, any other Person directly or indirectly controlling, controlled
by or under direct or indirect common control with such specified Person. For purposes of this definition, “control” (including, with
correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to a Person,
shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities, by agreement or otherwise.
(iii)
“Agreement” means this Registration Rights Agreement as the same may be amended, supplemented or
modified in accordance with the terms.
(iv)
“Automatic Shelf Registration Statement” means an “automatic shelf registration statement” as defined
in Rule 405 promulgated under the Securities Act.
(v)
“Board of Directors” means the Board of Directors of the Company (or any duly authorized committee
thereof).
(vi)
“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks
in New York, New York and San Francisco, California are authorized or required by law or executive order to close.
1
(vii)
“Commission” means the Securities and Exchange Commission or any similar agency then having
jurisdiction to enforce the Securities Act.
(viii)
“Company” has the meaning set forth in the preamble to this Agreement.
(ix)
“Company Free Writing Prospectus” means each Free Writing Prospectus prepared by or on behalf of
the Company or used or referred to by the Company in connection with an offering of Registrable Securities.
(x)
“Disclosure Package” means, with respect to any offering of Registrable Securities, (i) the preliminary
Prospectus, (ii) each Free Writing Prospectus and (iii) all other information, in each case, that is deemed, under Rule 159 promulgated
under the Securities Act, to have been conveyed to purchasers of securities at the time of sale of such securities (including, without
limitation, a contract of sale).
(xi)
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations
of the Commission thereunder.
(xii)
under the Securities Act.
(xiii)
“Free Writing Prospectus” means any “free writing prospectus” as defined in Rule 405 promulgated
“Indemnified Party” has the meaning set forth in Section 4(c).
(xiv)
“Indemnifying Party” has the meaning set forth in Section 4(c).
(xv)
“Inspector” has the meaning set forth in Section 3(b).
(xvi)
“Liability” has the meaning set forth in Section 4(a).
(xvii)
“Permitted Assignee” means with respect to any Shareholder, to the extent applicable, (i) such
Shareholder’s parents, spouse, siblings, siblings’ spouses, children (including stepchildren and adopted children), children’s spouses,
grandchildren or grandchildren’s spouses (“Family Members”), (ii) a corporation, partnership or limited liability company, a majority
of the beneficial interests of which shall be held by such Shareholder, such Shareholder’s Affiliates and/or such Shareholder’s Family
Members, (iii) a trust, the beneficiaries of which are such Shareholder and/or such Shareholder’s Family Members, (iv) such
Shareholder’s heirs, executors, administrators, estate or a trust under such Shareholder’s will, (v) an entity described in Section
501(c)(3) of the United States Internal Revenue Code of 1986, as amended, that is established by such Shareholder, and (vi) any
Affiliate of such Shareholder.
(xviii)
“Person” means any individual, corporation, partnership, limited liability company, trust, incorporated or
unincorporated association, joint venture, joint stock company, government (or an agency or political subdivision) or other entity of
any kind, and shall include any successor (by merger or otherwise) of such entity.
2
(xix)
“Pledgee” has the meaning set forth in Section 2(d)(i).
(xx)
“Prospectus” means the prospectus related to any Registration Statement (including, without limitation,
a prospectus or prospectus supplement that discloses information previously omitted from a prospectus filed as part of an effective
registration statement in reliance on Rule 415, 430A, 430B or 430C under the Securities Act, as amended or supplemented by any
amendment or prospectus supplement), including post-effective amendments, and all materials incorporated by reference in such
prospectus.
(xxi)
“Records” has the meaning set forth in Section 3(b)(viii).
(xxii)
“Registrable Securities” means, subject to Section 2(b) and Section 2(d)(i), (i) the Acquired Shares, (ii)
the Warrants, and (iii) any other securities that are (A) distributed as a dividend or otherwise with respect to Acquired Shares, or (B)
issued or issuable in exchange for or through conversion of the Acquired Shares or Warrants pursuant to a recapitalization,
reorganization, merger, consolidation, sale of assets or other transaction.
(xxiii)
“Registration Expenses” has the meaning set forth in Section 3(f).
(xxiv)
“Registration Statement” means a registration statement filed pursuant to the Securities Act.
(xxv)
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the
Commission promulgated thereunder.
(xxvi)
“Shareholder” means (a) the Persons named on Schedule I, and (b) such Permitted Assignees or
Pledgees of the Persons named on Schedule I to whom registration rights under this Agreement are validly transferred in accordance
with Section 2(d)(i).
(xxvii)
“Shareholders’ Counsel” has the meaning set forth in Section 3(b).
(xxviii) “Shares” means (i) the Series B common stock, of the Company, (ii) any securities of the Company or
any successor or assign of the Company into which such shares described in clause (i) are reclassified or reconstituted or into which
such shares are converted or otherwise exchanged in connection with a combination of shares, recapitalization, merger, sale of assets,
consolidation or other reorganization or otherwise, including any conversion pursuant to the Certificate of Incorporation of the
Company or (iii) any securities received as a dividend or distribution in respect of the securities described in clauses (i) and (ii) above.
(xxix)
“Warrants” means warrants to purchase Shares of the Company issued to the Shareholders named on
Schedule I pursuant to the Stock and Warrant Purchase Agreement between the Company and such Shareholders.
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(b)
Interpretation. Unless otherwise noted:
(i)
All references to laws, rules, regulations and forms in this Agreement shall be deemed to be references to
such laws, rules, regulations and forms, as amended from time to time or, to the extent replaced, the comparable successor laws, rules,
regulations and forms thereto in effect at the time.
(ii)
All references to agencies, self-regulatory organizations or governmental entities in this Agreement shall
be deemed to be references to the comparable successor thereto.
(iii)
All references to agreements and other contractual instruments shall be deemed to be references to such
agreements or other instruments as they may be amended, waived, supplemented or modified from time to time.
(iv)
All references to any amount of securities (including Registrable Securities) shall be deemed to be a
reference to such amount measured on an as-converted or as-exercised basis.
2.
General; Securities Subject to this Agreement
(a)
Grant of Rights. The Company hereby grants registration rights to the Shareholders upon the terms and conditions
set forth in this Agreement.
(b)
Registrable Securities. For the purposes of this Agreement, Registrable Securities held by any Person will cease to
be Registrable Securities when (i) a Registration Statement covering such Registrable Securities has been declared effective under the
Securities Act by the Commission and such Registrable Securities have been disposed of pursuant to such effective Registration
Statement, (ii) the entire amount of the Registrable Securities held by a Person may be sold in a single sale, in the opinion of counsel
reasonably satisfactory to the Company, without any limitation as to volume or manner of sale pursuant to Rule 144 promulgated
under the Securities Act, (iii) the Registrable Securities have ceased to be outstanding, or (iv) the Registrable Securities have been
transferred pursuant to a transfer or pledge otherwise than pursuant to Section 2(d).
(c)
Holders of Registrable Securities. A Person is deemed to be a holder of Registrable Securities whenever such
Person owns of record Registrable Securities. If the Company receives conflicting instructions, notices or elections from two or more
Persons with respect to the same Registrable Securities, the Company may act upon the basis of the instructions, notice or election
received from the registered owner of such Registrable Securities.
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(d)
Transfer of Registration Rights.
(i)
A Shareholder may transfer or pledge Registrable Securities with the associated registration rights under
this Agreement (including transfers occurring by operation of law or by reason of intestacy) to a Permitted Assignee or a pledgee (“
Pledgee ”) only if (1) such Permitted Assignee or Pledgee agrees in writing to be bound as a Shareholder by the provisions of this
Agreement, such agreement being substantially in the form of Annex A hereto, and (2) immediately following such transfer or
pledge, the further disposition of such Registrable Securities by such Permitted Assignee or Pledgee would be restricted under the
Securities Act and the entire amount of all such Registrable Securities could not be sold in a single sale, in the opinion of counsel
reasonably satisfactory to the Company, without any limitation as to volume or manner of sale pursuant to Rule 144 promulgated
under the Securities Act. Upon any transfer or pledge of Registrable Securities other than as set forth in this Section 2(d), such
securities shall no longer constitute Registrable Securities.
(ii)
Subject to Section 2(b), if a Shareholder assigns its rights under this Agreement in connection with the
transfer of less than all of its Registrable Securities, the Shareholder shall retain its rights under this Agreement with respect to its
remaining Registrable Securities. If a Shareholder assigns its rights under this Agreement in connection with the transfer of all of its
Registrable Securities, such Shareholder shall have no further rights or obligations under this Agreement, except under Section 4 in
respect of offerings in which it participated.
3.
Registration Procedures
(a)
S-3 Registration. Promptly after the date on which the Company becomes eligible to register the Registrable
Securities on Form S-3, the Company shall prepare and file with the Commission a Registration Statement covering the resale of all of
the Registrable Securities for an offering to be made on a continuous basis pursuant to Rule 415. Subject to the terms of this
Agreement, the Company shall use its commercially reasonable efforts to cause such Registration Statement to be declared effective
under the Securities Act as promptly as possible after the filing thereof.
(b)
Obligations of the Company. In connection with the registration of Registrable Securities, the Company shall:
(i)
prepare and file with the Commission a Registration Statement on Form S-3 and cause such Registration
Statement to become effective; provided , however , that before filing a Registration Statement or Prospectus or any amendments
or supplements thereto (including, without limitation, any documents incorporated by reference therein), or before using any Free
Writing Prospectus, provide one firm of legal counsel selected by Shareholders holding a majority of the Registrable Securities being
registered in such registration (“ Shareholder’ Counsel ”), any managing underwriter or broker/dealer participating in any disposition
of such Registrable Securities pursuant to a Registration Statement and any attorney retained by any such managing underwriter or
broker/dealer (each, an “ Inspector ” and collectively, the “ Inspectors ”) with an opportunity to review and comment on such
Registration Statement and each Prospectus included therein (and each amendment or supplement thereto) and each Free Writing
Prospectus to be filed with the Commission, subject to such documents being under the Company’s control. The Company shall
notify the Shareholders’ Counsel and each seller of Registrable Securities pursuant to such Registration Statement of any stop order
issued or threatened by the Commission and take all reasonable actions required to prevent the entry of such stop order or to remove it
if entered;
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(ii)
prepare and file with the Commission such amendments and supplements to such Registration
Statement and the Prospectus used in connection therewith as shall be necessary to keep such Registration Statement effective for the
lesser of (x) such period which will terminate when all Registrable Securities covered by such Registration Statement have been sold
(or, if such Registration Statement is an Automatic Shelf Registration Statement, on the first anniversary of the date of filing of such
Automatic Shelf Registration Statement) or (y) the securities covered by such Registration Statement are no longer Registrable
Securities;
(iii)
furnish to each seller of Registrable Securities such number of copies of such Registration Statement,
each amendment and supplement thereto, the Prospectus included in such Registration Statement (including each preliminary
Prospectus), any Prospectus filed under Rule 424 under the Securities Act and any Free Writing Prospectus as each such seller may
reasonably request in order to facilitate the disposition of the Registrable Securities owned by such seller; provided that the Company
need not provide copies of exhibits to the Registration Statement.
(iv)
use its commercially reasonable efforts to expeditiously register or qualify such Registrable Securities
under such other securities or “blue sky” laws of California and New York if required by the laws of such states, and continue such
registration or qualification in effect in such jurisdiction for as long as permissible pursuant to the laws of such jurisdiction, or for as
long as any such seller requests or until all of such Registrable Securities are sold or are “covered securities” under the Securities Act,
whichever is shortest, and do any and all other acts and things which may be reasonably necessary or advisable to enable any such
seller to consummate the disposition of the Registrable Securities owned by such seller in such jurisdictions; provided , however ,
that the Company shall not be required to (x) qualify generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this Section 3(b)(iv), (y) subject itself to taxation in any such jurisdiction or (z) consent to general service of
process in any such jurisdiction;
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(v)
following its actual knowledge thereof, notify each seller of Registrable Securities: (A) when a
Prospectus, any Prospectus supplement, any Free Writing Prospectus, a Registration Statement or a post-effective amendment to a
Registration Statement has been filed with the Commission, and, with respect to a Registration Statement or any post-effective
amendment, when the same has become effective; (B) of any request by the Commission for amendments or supplements to a
Registration Statement, related Prospectus or Free Writing Prospectus or for additional information; (C) of the receipt by the Company
of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any proceedings for such purpose; and (D) of the existence of
any fact or happening of any event of which the Company has knowledge which makes any statement of a material fact in such
Registration Statement, related Prospectus or Free Writing Prospectus or any document incorporated or deemed to be incorporated
therein by reference untrue or which would require the making of any changes in the Registration Statement, Prospectus or Free
Writing Prospectus in order that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the
case of such Prospectus or Free Writing Prospectus, it will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading, provided that the Company need not disclose any facts or events that have not bee publicly disclosed
by the Company;
(vi)
upon the occurrence of any event contemplated by Section 3(b)(v)(D), as promptly as practicable,
prepare a supplement or amendment to such Registration Statement, related Prospectus or Free Writing Prospectus and furnish to each
seller of Registrable Securities a reasonable number of copies of such supplement to, or amendment of, such Registration Statement,
Prospectus or Free Writing Prospectus as may be necessary so that, after delivery to the purchasers of such Registrable Securities, in
the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not misleading, and that in the case of such Prospectus or Free
Writing Prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;
(vii)
enter into and perform customary agreements and take such other actions as are reasonably required in
order to facilitate the disposition of such Registrable Securities and shall provide all reasonable cooperation, including causing counsel
to the Company to deliver customary legal opinions in connection with any such underwriting agreements;
(viii)
make available at reasonable times for inspection by any Inspector all financial and other records,
pertinent corporate documents and properties of the Company and its subsidiaries (collectively, the “ Records ”) as shall be reasonably
necessary to enable them to exercise their due diligence responsibility, and cause the Company’s and its subsidiaries’ officers,
directors, managers and employees, and the Company’s independent registered public accounting firm, to supply all information
reasonably requested by any such Inspector in connection with such Registration Statement. Records that the Company determines, in
good faith, to be confidential and which it notifies the Inspectors are confidential shall not be disclosed by the Inspectors (and the
Inspectors shall confirm their agreement in writing in advance to the Company if the Company shall so request) unless (x) the
disclosure of such Records is necessary, in the Company’s reasonable judgment, to avoid or correct a misstatement or omission in the
Registration Statement, (y) the release of such Records is ordered pursuant to a subpoena or other order from a court of competent
jurisdiction after exhaustion of all appeals therefrom or (z) the information in such Records was known to the Inspectors on a
non-confidential basis prior to its disclosure by the Company or has been made generally available to the public. Each seller of
Registrable Securities agrees that it shall, upon learning that disclosure of such Records is sought in a court of competent jurisdiction,
promptly give notice to the Company and allow the Company, at the Company’s expense, to undertake appropriate action to prevent
disclosure of the Records deemed confidential;
7
(ix)
if such sale is pursuant to an underwritten offering, obtain a “cold comfort” letter dated the effective
date of the Registration Statement and the date of the closing under the underwriting agreement from the Company’s independent
registered public accounting firm in customary form and covering such matters of the type customarily covered by “cold comfort”
letters as the managing underwriter reasonably requests;
(x)
furnish, at the request of any seller of Registrable Securities on the date such securities are delivered to
the underwriters for sale pursuant to such registration, an opinion, dated such date, of counsel representing the Company for the
purposes of such registration, addressed to the underwriters, covering such legal matters with respect to the registration in respect of
which such opinion is being given as the underwriters, may reasonably request and are customarily included in such opinions;
(xi)
cause any Shares included in the Registration Statement to be listed on each securities exchange on
which the Shares are then listed. The Company shall pay all fees and expenses in connection with satisfying its obligation to list such
Shares.
(xii)
make all required filings of all Prospectuses and Free Writing Prospectuses with the Commission;
(xiii)
make all required filing fee payments in respect of any Registration Statement or Prospectus used under
this Agreement (and any offering covered thereby); and
(xiv)
contemplated hereby.
take al l other steps reasonably necessary to effect the registration of the Registrable Securities
8
(c)
Seller Requirements. In connection with any offering under any Registration Statement under this Agreement,
each Shareholder (i) shall promptly furnish to the Company in writing such information with respect to the Shareholder and the
intended method of disposition of its Registrable Securities as the Company may reasonably request or as may be required by law or
regulations for use in connection with any related Registration Statement or Prospectus (or amendment or supplement thereto) and all
information required to be disclosed in order to make the information previously furnished to the Company by the Shareholder not
contain a material misstatement of fact or necessary to cause such Registration Statement or Prospectus (or amendment or supplement
thereto) not to omit a material fact with respect to the Shareholder necessary in order to make the statements therein not misleading;
(ii) shall comply with the Securities Act and the Exchange Act and all applicable state securities laws and comply with all applicable
regulations in connection with the registration and the disposition of the Registrable Securities; and (iii) shall not use any Free Writing
Prospectus without the prior written consent of the Company. If any seller of Registrable Securities fails to provide such information
required to be included in such Registration Statement by applicable securities laws or otherwise necessary or desirable in connection
with the disposition of such Registrable Securities, within ten (10) calendar days after written request therefor, the Company may
exclude such seller’s Registrable Securities from the registration statement.
(d)
Exception for Valid Business Reason. Notwithstanding any other provision of this Section 3, if the Board of
Directors of the Company, in its good faith judgment, determines that any registration of Registrable Securities should not be made or
continued because it would materially interfere with any material financing, acquisition, reorganization or merger or other transaction
involving the Company or require the Company to disclose any material nonpublic information which would reasonably be likely to
be detrimental to the Company (a “Valid Business Reason”), (x) the Company may postpone filing a Registration Statement (but not
the preparation of the Registration Statement) until the occurrence of the Valid Business Reason or until the Valid Business Reason no
longer exists, and (y) in case a Registration Statement has been filed, the Company may postpone amending or supplementing such
Registration Statement or requesting that the Registration Statement become effective under the Securities Act. The Company shall
give written notice to all Shareholders of its determination to postpone filing, amending, supplementing, requesting effectiveness of a
Registration Statement, and of the fact that the Valid Business Reason for such postponement no longer exists, in each case, promptly
after the occurrence thereof.
(e)
Notice to Discontinue. Each Shareholder agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3(b)(v)(D), the Shareholder shall forthwith discontinue disposition of
Registrable Securities pursuant to the Registration Statement covering such Registrable Securities until the Shareholder’s receipt of
the copies of the supplemented or amended Prospectus or Free Writing Prospectus contemplated by Section 3(b)(vi) (or if no
supplemental or amended prospectus or Free Writing Prospectus is required, upon confirmation from the Company that use of the
Prospectus or Free Writing Prospectus is once again permitted) and, if so directed by the Company, the Shareholder shall deliver to
the Company (at the Company’s expense) all copies, other than permanent file copies then in the Shareholder’s possession, of the
Prospectus or Free Writing Prospectus covering such Registrable Securities which is current at the time of receipt of such notice.
9
(f)
Registration Expenses. The Company shall pay all expenses arising from or incident to its performance of, or
compliance with, this Agreement, including, without limitation, (i) Commission filing fees, (ii) all fees and expenses incurred in
complying with state securities or “blue sky” laws (including reasonable fees, charges and disbursements of counsel to any
underwriter incurred in connection with “blue sky” qualifications of the Registrable Securities as may be set forth in any underwriting
agreement), (iii) all printing, messenger and delivery expenses, and (iv) the fees, charges and expenses of counsel to the Company and
of its independent registered public accounting firm and any other accounting fees, charges and expenses incurred by the Company
(including, without limitation, any expenses arising from any “cold comfort” letters and the reasonable and documented legal fees,
charges and expenses of Shareholder’s Counsel and regardless of whether such Registration Statement is declared effective. All of the
expenses described in the preceding sentence of this Section 3(f) are referred to herein as “Registration Expenses”.
4.
Indemnification; Contribution
(a)
Indemnification by the Company. The Company agre es to indemnify and hold harmless the Shareholders, and
each of their respective partners, directors, officers, Affiliates, stockholders, members, employees, trustees, legal counsel and
accountants and each Person who controls (within the meaning of Section 15 of the Securities Act) any Shareholder, from and against
any and all losses, claims, damages, liabilities and expenses, or any action or proceeding in respect thereof (including reasonable costs
of investigation and reasonable attorneys’ fees and expenses) (each, a “Liability” and collectively, “Liabilities”), arising out of or
based upon (a) in the case of the Registration Statement or any amendment thereto, the Disclosure Package, the Prospectus, any Free
Writing Prospectus, or in any supplement thereto, any untrue, or allegedly untrue, statement of a material fact or omission, or alleged
omission, to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and (b) any violation or alleged violation by the Company of the
Securities Act, the Exchange Act or any state securities law, or any rule or regulation thereunder, in connection with the performance
of its obligations under this Agreement; provided, however, that the Company shall not be held liable in any such case to the extent
that any such Liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission
contained in such Disclosure Package, Registration Statement, Prospectus, Free Writing Prospectus or such amendment or supplement
thereto solely in reliance upon and in conformity with information concerning any Shareholder furnished in writing to the Company
by or on behalf of a Shareholder expressly for use therein, including, without limitation, the information furnished to the Company
pursuant to Section 3(c). The Company shall also provide customary indemnities to any underwriters of the Registrable Securities,
their officers, directors and employees and each Person who controls such underwriters (within the meaning of Section 15 of the
Securities Act) to the same extent as provided above with respect to the indemnification of the Shareholders.
10
(b)
Indemnification by Shareholders. In connection with any offering in which any Shareholder is participating
pursuant to this Agreement, each participating Shareholder agrees severally to indemnify and hold harmless the Company, any
underwriter retained by the Company, each of their respective partners, directors, officers, Affiliates, stockholders, managers,
members, employees, trustees, legal counsel and accountants, and each Person who controls the Company or such underwriter (within
the meaning of Section 15 of the Securities Act) to the same extent as the foregoing indemnity from the Company to the Shareholders,
but only to the extent that Liabilities arise out of or are based upon a statement or alleged statement or an omission or alleged omission
that was made solely in reliance upon and in conformity with information with respect to such Shareholder furnished in writing to the
Company by or on behalf of the Shareholder expressly for use in such Disclosure Package, Registration Statement, Prospectus, Free
Writing Prospectus or such amendment or supplement thereto, including, without limitation, the information furnished to the
Company pursuant to Section 3(c). In no event shall the liability of a Shareholder hereunder be greater in amount than the net
proceeds received by the Shareholder upon the sale of the Registrable Securities giving rise to such indemnification obligation except
in the case of fraud by the Shareholder.
(c)
Conduct of Indemnification Proceedings. Any Person entitled to indemnification or contribution hereunder (the
“Indemnified Party”) agrees to give prompt written notice to the indemnifying party (the “Indemnifying Party”) after the receipt by the
Indemnified Party of any written notice of the commencement of any action, suit, proceeding or investigation or threat made in writing
for which the Indemnified Party intends to claim indemnification or contribution pursuant to this Agreement; provided, however, that
the failure to so notify the Indemnifying Party shall not relieve the Indemnifying Party of any Liability that it may have to the
Indemnified Party hereunder (except to the extent that the Indemnifying Party is materially prejudiced or otherwise forfeits substantive
rights or defenses by reason of such failure). If notice of commencement of any such action is given to the Indemnifying Party as
provided in this Section 4(c), the Indemnifying Party shall be entitled to participate in and, to the extent it may wish, jointly with any
other Indemnifying Party similarly notified, to assume the defense of such action at its own expense, with counsel chosen by it and
reasonably satisfactory to such Indemnified Party. Each Indemnified Party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the reasonable and documented out-of-pocket fees and expenses of such counsel shall
be paid by the Indemnified Party unless (i) the Indemnifying Party agrees to pay the same, (ii) the Indemnifying Party fails to assume
the defense of such action with counsel reasonably satisfactory to the Indemnified Party or (iii) the named parties to any such action
(including any impleaded parties) include both the Indemnifying Party and the Indemnified Party and such parties have been advised
by such counsel that either (x) representation of such Indemnified Party and the Indemnifying Party by the same counsel would be
inappropriate under applicable standards of professional conduct or (y) there may be one or more legal defenses available to the
Indemnified Party which are different from or additional to those available to the Indemnifying Party. In any of such cases, the
Indemnifying Party shall not have the right to assume the defense of such action on behalf of such Indemnified Party, it being
understood, however, that the Indemnifying Party shall not be liable for the reasonable and documented out-of-pocket fees and
expenses of more than one separate firm of attorneys (in addition to any local counsel) for all Indemnified Parties and all such
reasonable and documented out-of-pocket fees and expenses shall be reimbursed as incurred. No Indemnifying Party shall be liable
for any settlement entered into without its written consent, which consent shall not be unreasonably withheld. No Indemnifying Party
shall, without the consent of such Indemnified Party, effect any settlement of any pending or threatened proceeding in respect of
which such Indemnified Party is a party and indemnity has been sought hereunder by such Indemnified Party, unless such settlement
includes an unconditional release of such Indemnified Party from all liability for claims that are the subject matter of such proceeding.
11
(d)
Contribution. (i) If the indemnification provided for in this Section 4 from the Indemnifying Party is unavailable
to an Indemnified Party hereunder or insufficient to hold harmless an Indemnified Party in respect of any Liabilities referred to herein,
then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Liabilities in such proportion as is appropriate to reflect the relative fault of the Indemnifying
Party and Indemnified Party in connection with the actions which resulted in such Liabilities, as well as any other relevant equitable
considerations. The relative faults of such Indemnifying Party and Indemnified Party shall be determined by reference to, among
other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact, has been made by, or relates to information supplied by, such Indemnifying Party or Indemnified
Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount
paid or payable by a party as a result of the Liabilities referred to above shall be deemed to include, subject to the limitations set forth
in Sections 4(a), 4(b), and 4(c) , any reasonable and documented out-of-pocket legal or other fees, charges or expenses reasonably
incurred by such party in connection with any investigation or proceeding.
(ii)
The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section
4(d)) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph. No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation. In no event shall a Shareholder be required to contribute an amount under this Section 4(d) in excess of the net
proceeds received by the Shareholder upon the sale of the Shareholder’s Registrable Securities pursuant to the Registration Statement
giving rise to such contribution obligation, except in the case of fraud by the Shareholder.
5.
Reports Under Exchange Act
(a)
With a view to making available to the Shareholders the benefits of Rule 144 promulgated under the Securities Act
and any other rule or regulation of the Commission that may at any time permit the Shareholders to sell Registrable Shares of the
Company to the public without registration, the Company agrees for the period of at least one year from the date hereof, to:
(i)
Make and keep public information available, as those terms are used in Rule 144, at all times;
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(ii)
File with the Commission in a timely manner all reports and other documents required of the Company
under the Exchange Act and the rules and regulations of any applicable securities exchanges;
(iii)
Furnish to the Shareholders, so long as the Shareholders own any Registrable Shares, forthwith on
request, (i) a written statement by the Company that it has complied with the reporting requirements of Rule 144 and the Exchange
Act, and (ii) a copy of the most recent annual or quarterly report of the Company filed under the Exchange Act; and
(iv)
Undertake any additional actions reasonably necessary to maintain the availability of the use of Rule
144 for the resale of the Registrable Securities.
6.
Miscellaneous
(a)
Share Splits, etc. The provisions of this Agreement shall be appropriately adjusted for any share dividends, splits,
reverse splits, combinations recapitalizations and the like occurring after the date.
(b)
Amendments and Waivers. Except as otherwise provided herein, the provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to departures from the provisions may not be given unless consented to
in writing by the Company and the Shareholders.
(c)
Notices. All notices, demands and other communications provided for or permitted hereunder shall be made in
writing and shall be made by telecopy, electronic mail, air courier service or personal delivery:
If to the Company:
BioTime Acquisition Corporation
1301 Harbor Bay Parkway, Suite 100
Alameda, California 94502
Attention: Peter S. Garcia, Chief Financial Officer
[email protected]
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with a copy to:
Thompson, Welch, Soroko & Gilbert LLP
235 Pine Street, 13th Floor
San Francisco, California 94104
Attention: Richard S. Soroko
[email protected]
If to a Shareholder, at the most recent address for such Shareholder as shown in the Company’s register of its stockholders.
All such notices, demands and other communications shall be deemed to have been duly given when delivered in the manner provided
in this Section 6(c). Any party may by notice given in accordance with this Section 6(c) designate another address or Person for
receipt of notices hereunder.
(d)
Permitted Assignees; Third Party Beneficiaries. This Agreement shall inure to the benefit of and be binding upon
the Company and the Shareholders (including the Permitted Assignees and Pledgees of Shareholders as provided in Section 2(d)(i)),
and, except as provided in Section 4, no other Person is intended to be a beneficiary of this Agreement.
(e)
Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
(f)
Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise
affect the meaning.
(g)
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the state of
California, without regard to the principles of conflicts of law.
(h)
Jurisdiction. (i) Any action or proceeding against any party hereto relating in any way to this Agreement or the
transactions contemplated hereby may be brought and enforced in the federal or state courts in the State of California, and each party,
on behalf of itself and its respective successors and assigns, irrevocably consents to the jurisdiction of each such court in respect of
any such action or proceeding. Each party, on behalf of itself and its respective successors and assigns, irrevocably consents to the
service of process in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid,
return receipt requested, to such person or entity at the address for such person or entity set forth in Section 6(c) or such other address
such person or entity shall notify the other in writing. The foregoing shall not limit the right of any person or entity to serve process in
any other manner permitted by law or to bring any action or proceeding, or to obtain execution of any judgment, in any other
jurisdiction.
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(ii)
Each party, on behalf of itself and its respective successors and assigns, hereby irrevocably waives any
objection that it may now or hereafter have to the laying of venue of any action or proceeding arising under or relating to this
Agreement or the transactions contemplated hereby in any court located in the State of California or located in any other jurisdiction
chosen by the Company in accordance with Section 6(h)(i). Each party, on behalf of itself and its respective successors and assigns,
hereby irrevocably waives any claim that a court located in the State of California is not a convenient forum for any such action or
proceeding.
(iii)
Each party, on behalf of itself and its respective successors and assigns, hereby irrevocably waives, to
the fullest extent permitted by applicable United States federal and state law, all immunity from jurisdiction, service of process,
attachment (both before and after judgment) and execution to which it might otherwise be entitled in any action or proceeding relating
in any way to this Agreement or the transactions contemplated hereby in the courts of the State of California, of the United States or of
any other country or jurisdiction, and hereby waives any right he might otherwise have to raise or claim or cause to be pleaded any
such immunity at or in respect of any such action or proceeding.
(i)
Severability. If any one or more of the provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any
such provision in every other respect and of the remaining provisions shall not be in any way impaired.
(j)
Rules of Construction. Unless the context otherwise requires, references to sections or subsections refer to
sections or subsections of this Agreement. Terms defined in the singular have a comparable meaning when used in the plural, and
vice versa.
(k)
Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended
to be a complete and exclusive statement of the agreement and understanding of the parties hereto with respect to the subject
matter. There are no restrictions, promises, representations, warranties or undertakings with respect to the subject matter, other than
those set forth or referred to herein. This Agreement supersedes all prior agreements and understandings among the parties with
respect to such subject matter.
(l)
Further Assurances. Each of the parties shall execute such documents and perform such further acts as may be
reasonably required or desirable to carry out or to perform the provisions of this Agreement.
(m)
Other Agreements. Nothing contained in this Agreement shall be deemed to be a waiver of, or release from, any
obligations any party hereto may have under, or any restrictions on the transfer of Registrable Securities or other securities of the
Company imposed by, any other agreement.
15
IN WITNESS WHEREOF, the undersigned have executed, or have caused to be executed, this Registration Rights
Agreement on the date first written above.
BIOTIME ACQUISITION CORPORATION
By:
Title:
Thomas Okarma
Chief Executive Officer
SHAREHOLDER
Romulus Films Ltd.
By:
Title:
J. C. Woolf
Director
16
ANNEX A
[Name and Address of Transferee]
[Address]
[Name and Address of Transferor]
________, 20__
Ladies and Gentlemen:
Reference is made to the Registration Rights Agreement, dated as of January __, 2013 (the “Registration Rights
Agreement ”), by and among BioTime Acquisition Corporation, a Delaware corporation, and the persons named therein as
Shareholders. All capitalized terms used herein but not otherwise defined shall have the meanings given to them in the Registration
Rights Agreement.
In connection with the transfer by [Name of Transferor] of Registrable Securities with associated registration
rights under the Registration Rights Agreement to [Name of Transferee] as transferee (the “ Transferee ”), the Transferee hereby
agrees to be bound as a Shareholder by the provisions of the Registration Rights Agreement as provided under Section 2(d)(i)) thereto.
This consent shall be governed by California law.
Yours sincerely,
[Name of Transferee]
By:
Name
Title
17
SCHEDULE I
Shareholders
Romulus Films Ltd.
18
EXHIBIT 10.3
SUBLEASE AGREEMENT
THIS SUBLEASE AGREEMENT (this “Sublease”), dated as of January 7, 2013, is entered into by and between BioTime, Inc.,
a California corporation (“ Sublandlord ”), and BioTime Acquisition Corporation , a Delaware corporation (“ Subtenant ”).
R E C I T AL S
A.
Sublandlord leases certain premises consisting of approximately 24,080 square feet in a building, plus adjoining
parking areas, driveways and walkways, located at 230 Constitution Drive, Menlo Park, California, pursuant to that certain Lease
dated as of January 7, 2013, between David D. Bohannon Organization, as landlord (the “ Master Landlord ”) and Sublandlord, as
tenant (the “ Master Lease ”), a copy of which is attached as Exhibit A , as more particularly described therein (the “ Premises
”). Capitalized terms used but not defined herein have the same meanings given in the Master Lease.
B.
Sublandlord desires to sublease to Subtenant, and Subtenant desires to sublease from Sublandlord, the Premises
upon the terms and conditions provided for herein.
NOW, THEREFORE, in consideration of the mutual covenants and conditions contained herein, Sublandlord and Subtenant
covenant and agree as follows:
AGREEMENT
1.
PREMISES. On and subject to the terms and conditions below, Sublandlord hereby subleases to Subtenant, and
Subtenant hereby subleases from Sublandlord, the Premises.
2.
TERM. The term of this Sublease (the “Term”) commenced effective as of January 7, 2013 (the “
Commencement Date ”) and shall expire on January 6, 2016 (the “ Expiration Date ”), unless sooner terminated pursuant to any
provision hereof.
3.
RENT.
(a)
Rent. Commencing on the Commencement Date and continuing throughout the term of this Sublease,
Subtenant shall pay monthly rent consisting of Base Rent and Additional Rent (as defined below) (collectively, “ Rent ”) to
Sublandlord in the following amounts:
(i)
Base Rent. Subtenant shall pay to Sublandlord monthly base rent (“Base Rent”) in the amount
of $381,427.20 per annum payable in twelve (12) equal monthly installments of $31,785.60 on the first (1st) day of each calendar
month.
(ii)
Prepaid Rent; Adjustment. In addition to Base Rent, Subtenant shall pay Sublandlord
$242,726.40 concurrently with the execution and delivery of this Sublease (the “ Prepaid Rent ”). In the event that the base rent
payable by Sublandlord under Section 2.1 of the Master Lease increases by $242,726.40, payable in monthly installments, the Base
Rent payable by Subtenant under this Sublease shall likewise increase by such amount, payable in twelve (12) equal monthly
installments of $38,528.00, plus an amount of cash equal to the excess of the new monthly base rent of $38,528.00 over the monthly
base rent of $31,785.60 paid or due to be paid for each calendar month from the Term Commencement Date through the first day of
the calendar month in which such payment is made (the “ Adjustment Amount ”) and Subtenant shall thereafter pay the new monthly
Base Rent of $38,528.00. If Subtenant shall have paid to the Prepaid Rent to Sublandlord, Sublandlord shall promptly refund to
Subtenant the amount by which the Prepaid Rent exceeds the sum of the Adjustment Amount plus the additional amount of the
Security Deposit payable to Sublandlord under Section 5 below.
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(iii)
Additional Rent. In addition to Base Rent, Subtenant shall also pay to Sublandlord as “
Additional Rent” on the first (1st) day of each calendar month an amount equal to the amounts payable by Sublandlord to Master
Landlord under Articles 17 and Article 18 of the Master Lease. Subtenant shall also pay all other amounts due and payable to Master
Landlord under Article 11 of the Master Lease, which shall be payable to Sublandlord at least five (5) business days prior to the date
such amounts are due from Sublandlord pursuant to the Master Lease (“ Additional Charges ”). Notwithstanding the foregoing,
except for recurring monthly installments of Additional Charges which shall be due as provided above, in no event shall payment be
due less than five (5) days after receipt of written invoice by Subtenant.
(iv)
Subtenant’s Right to Review Additional Rent and Additional Charges. No less often than
annually, Sublandlord shall provide Subtenant with copies of any and all statements from Master Landlord setting forth amounts
required to be paid by Sublandlord under Articles 11, 17, and 18 of the Master Lease.
(b)
Payment of Rent. Rent shall be payable to Sublandlord in lawful money of the United States, in
advance, without prior notice, demand, or offset, on or before the first day of each calendar month during the term hereof. All Rent
shall be paid to Sublandlord at the address specified for notices to Sublandlord in Section 12 below.
(c)
Abatement. In the event of any casualty or condemnation affecting the Premises which results in an
abatement of rent payable by Sublandlord under the Master Lease, Rent payable by Subtenant shall be likewise be abated hereunder,
but only to the extent that Rent under the Master Lease for such portion of the Premises is abated, and Subtenant waives any right to
terminate this Sublease in connection with such casualty or condemnation except to the extent the Master Lease is also terminated as
to the Premises or as expressly provided in Section 21(a) below.
4.
LEASE ASSIGNMENT OPTION. Sublandlord shall have the right, but not the obligation, to assign to Subtenant
all of Sublandlord’s rights and obligations under the Master Lease pursuant to Section 6.1.E of the Master Lease by giving written
notice to Subtenant. Subtenant shall cooperate with Sublandlord in effecting such assignment under the Master Lease, including
executing and delivering a lease assumption or other agreement or instrument as Master Landlord and Sublandlord may reasonably
request. Upon such assignment of the Master Lease, Subtenant shall become the tenant, and shall perform any and all obligations of
the tenant, under the Master Lease.
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5.
SECURITY DEPOSIT. Sublandlord has provided Master Landlord with a security deposit in the amount of
$31,785.60 under the Master Lease. Subtenant shall, upon demand by Sublandlord, pay and deliver to Sublandlord $31,785.60 (“
Security Deposit ”) on account of the Security Deposit. If Sublandlord is required to increase its security deposit to Master Landlord
to $38,528 under the Master Lease, the Security Deposit shall likewise increase to $38,528 and Subtenant shall promptly pay to
Sublandlord the excess of $38,528 over the amount of the Security Deposit then held by Sublandlord. If Subtenant fails to pay Rent or
other charges when due under this Sublease, or fails to perform any of its other obligations hereunder, Sublandlord may use or apply
all or any portion of the Security Deposit for the payment of any Rent or other amount then due hereunder and unpaid, for the payment
of any other sum for which Sublandlord may become obligated by reason of Subtenant’s default or breach, or for any loss or damage
sustained by Sublandlord as a result of Subtenant’s default or breach. If Sublandlord so uses any portion of the Security Deposit,
Subtenant shall restore the Security Deposit to the full amount required to be deposited under this Section 5, within ten (10) business
days after Sublandlord’s written demand. Subtenant hereby waives any restrictions on the uses to which the Security Deposit may be
put that is contained in California Civil Code Section 1950.7 or any successor statute. Sublandlord shall not be required to keep the
Security Deposit separate from its general accounts, and shall have no obligation or liability for payment of interest on the Security
Deposit. The Security Deposit, or so much thereof as had not theretofore been applied by Sublandlord, shall be returned to Subtenant
within thirty (30) days after the expiration or earlier termination of this Sublease, provided Subtenant has vacated the Premises in the
condition required under the terms of this Sublease. Notwithstanding the immediately preceding sentence, upon the assignment of the
Master Lease to Subtenant, the entire Security Deposit shall automatically become the non-refundable property of Sublandlord, and
Subtenant shall thereafter succeed to all of Sublandlord’s rights with respect to the security deposit paid to Master Landlord under the
Master Lease.
6.
ASSIGNMENT AND SUBLETTING. Subtenant may not assign, sublet, transfer, pledge, hypothecate or otherwise
encumber the Premises, in whole or in part, or permit the use or occupancy of the Premises by anyone other than Subtenant and
Sublandlord (or any other subsidiary of Sublandlord), unless Subtenant has obtained (a) Sublandlord’s consent, which consent shall
not be unreasonably withheld or delayed, and (b) Master Landlord’s consent in accordance with Article 6 of the Master
Lease. Regardless of Sublandlord’s or Master Landlord’s consent, no subletting or assignment shall release Subtenant of its
obligations hereunder. Any rent or other consideration payable to Subtenant pursuant to any sublease or assignment permitted by this
paragraph which is in excess of the Rent payable to Sublandlord pursuant hereto (“ Sublease Bonus Rent ”) shall be divided equally
between Sublandlord and Subtenant , after payment to Master Landlord of any amount required to be paid under the Master Lease
and deduction of any brokerage and marketing fees paid to any licensed real estate broker in connection with the sublease or
assignment. All such Sublease Bonus Rent shall be determined on a dollars per square foot basis, by aggregating all subrents received
by Subtenant and dividing such amount by the total number of square feet of subleased space and subtracting from such amount the
Rent per square foot payable by Subtenant for such space. Notwithstanding the foregoing, Subtenant may sublet the Premises, or any
portion thereof, without Sublandlord’s consent, if such sublease or assignment would be permitted without the consent of Master
Landlord under Section 6.1.E of the Master Lease.
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7.
CONDITION OF PREMISES.
(a)
Subtenant agrees that (i) Sublandlord has made no representations or warranties of any kind or nature
whatsoever respecting the Premises, their condition or suitability for Subtenant’s use; and (ii) Subtenant agrees to accept the Premises
“ AS IS, WHERE IS , ” with all faults, without any obligation on the part of Sublandlord to modify, improve or otherwise prepare
the Premises for Subtenant’s occupancy.
(b)
Sublandlord has not made an independent investigation of the Premises or determination with respect to
the physical and environmental condition of the Premises including, without limitation, the existence of any underground tanks,
pumps, piping, toxic or hazardous substances on the Premises. No investigation has been made by Sublandlord to ensure compliance
with the “Americans With Disabilities Act” (“ ADA ”). ADA may require a variety of changes to the Premises, including potential
removal of barriers to access by disabled persons and provision of auxiliary aids and services for hearing, vision or speech impaired
persons. Subtenant shall rely solely on its own investigations with respect to the matters described in this Section 7.
8.
USE. Subtenant may use the Premises for those uses permitted under the Master Lease, and for no other
purpose. Subtenant shall promptly comply with all applicable statutes, ordinances, rules, regulations, orders, restrictions of record,
and requirements in effect during the term of this Sublease governing, affecting and regulating the Premises, including, but not limited
to, the use thereof. Subtenant shall not use or permit the use of the Premises in a manner that will create waste or a nuisance or violate
any provision of the Master Lease. Subtenant acknowledges and agrees that the operation and use of the Premises may require that
Subtenant apply for and receive licenses and/or permits from various federal, state and local governments or agencies, and Subtenant
covenants and agrees to apply for and receive such licenses and/or permits as are required. Subtenant shall provide to Sublandlord and
Master Landlord copies of any such licenses and/or permits to the extent applicable to the Premises. Subtenant acknowledges, agrees
and covenants that its occupancy, operation and use of such Premises and/or its use and handling of animals on the Premises shall be
in accordance with: (a) all applicable state and federal regulations; (b) all licenses and permits that either Subtenant or Sublandlord
has received or receives in the future respecting such Premises; and (c) all policies and procedures Sublandlord or Master Landlord
has reasonably promulgated respecting such Premises.
9.
PERFORMANCE OF MASTER LEASE BY SUBTENANT
(a)
Subtenant hereby assumes and agrees to perform for Sublandlord’s benefit, during the term of this
Sublease, all of Sublandlord’s obligations with respect to the Premises under the Master Lease other than payment of rent and a
security deposit under Article 2 of the Master Lease, and payment of other amounts due under Articles 11, 17 and 19 of the Master
Lease. Notwithstanding anything to the contrary contained herein, this Sublease shall be subject and subordinate to all of the terms of
the Master Lease and Master Landlord shall have all rights in respect of the Master Lease and the Premises as set forth therein.
4
(b)
Sublandlord shall not be liable to Subtenant for any failure by Master Landlord to perform its obligations
under the Master Lease, nor shall such failure by Master Landlord excuse performance by Subtenant of its obligations
hereunder. Anything in the Master Lease to the contrary notwithstanding, no personal liability shall at any time be asserted or
enforceable against Sublandlord’s stockholders, directors, officers or employees on account of any of Sublandlord’s obligations or
actions under this Sublease.
10.
INSURANCE. Subtenant shall be responsible for compliance with the insurance provisions of the Master Lease,
provided, however, any required property insurance as set forth in the Master Lease shall be required only in connection with the
Premises and Subtenants’ property located therein. Such insurance shall insure the performance by Subtenant of its indemnification
obligations hereunder and shall name Master Landlord and Sublandlord as additional insureds. All insurance required under this
Sublease shall contain an endorsement requiring thirty (30) days’ written notice from the insurance company to Subtenant and
Sublandlord before cancellation or change in the coverage, insureds or amount of the insurance policy. Subtenant shall provide
Sublandlord with certificates of insurance evidencing such coverage prior to the commencement of this Sublease.
11.
DEFAULT; REMEDIES.
(a)
Failure of Subtenant to make any payment of Rent or Additional Charges when due hereunder, or to
perform any obligation or agreement of Subtenant hereunder, including but not limited to performance of obligations of Subtenant
under the Master Lease, shall constitute an event of default under this Sublease. If Subtenant’s default causes Sublandlord to default
under the Master Lease, Subtenant shall defend, indemnify and hold Sublandlord harmless from all damages, costs (including
reasonable attorneys’ fees), liability, expenses or claims to the extent caused by such default.
(b)
If Subtenant defaults in the performance of any of its obligations under this Sublease with reference to
the payment of Rent or Additional Charges and such default continues for five (5) days after the date such payment is due, or if
Subtenant defaults in the performance of any other obligations under this Sublease and such default continues for a period beyond any
grace period under the Master Lease applicable to such default, then, in addition to all other rights and remedies Sublandlord may
have under this Sublease or under applicable law, Sublandlord shall have the following rights and remedies:
(1)
Sublandlord shall have the remedy described in California Civil Code Section 1951.4
(Sublandlord may continue this Sublease in effect after Subtenant's breach and abandonment and recover Rent as it becomes due, if
Subtenant has the right to sublet or assign, subject only to reasonable limitations). If Subtenant breaches any covenants of this
Sublease or if any event of default occurs, whether or not Subtenant abandons the Premises, this Sublease shall continue in effect until
Sublandlord terminates Subtenant's right to possession, and Subtenant shall remain liable to perform all of its obligations under this
Sublease and Sublandlord may enforce all of Sublandlord's rights and remedies, including the right to recover rent as it falls due. If
Subtenant abandons the Premises or fails to maintain and protect the same as herein provided, Sublandlord shall have the right to do
all things necessary or appropriate to maintain, preserve and protect the Premises, including the installation of guards, and may do all
things appropriate to a re-letting of the Premises, and none of said acts shall be deemed to terminate Subtenant's right of possession,
unless Sublandlord elects to terminate the same by written notice to Subtenant. Subtenant agrees to reimburse Sublandlord on demand
for all amounts reasonably expended by Sublandlord in maintaining, preserving and protecting the Premises, together with interest on
the amounts expended from time to time at the maximum legal rate. Sublandlord shall also have the right to repair, remodel and
renovate the Premises at the expense of Subtenant and as deemed necessary by Sublandlord.
5
(2)
Sublandlord shall have the right to terminate Subtenant's possession of the Premises, and if
Subtenant's right to possession of the Premises is terminated by Sublandlord by reason of a breach of this Sublease by Subtenant, or by
reason of the happening of an event of default, or by reason of abandonment of the Premises by Subtenant, Sublandlord shall be
entitled, at Sublandlord’s election, to recover damages in an amount as set forth in Section 1951.2 of the Civil Code of California as
then in effect, which damages shall include (1) the worth at the time of award of any unpaid rent and additional rent which had been
earned at the time of such termination; plus (2) the worth at the time of award of the amount by which the unpaid rent and additional
rent which would have been earned after termination until the time of award exceeds the amount of such rental loss Subtenant proves
could have been reasonably avoided; plus (3) the worth at the time of award of the amount by which the unpaid rent and additional
rent for the balance of the term after the time of award exceeds the amount of such rental loss that Subtenant proves could be
reasonably avoided; plus (4) all other amounts due Sublandlord from Subtenant under the terms of this Sublease, or necessary to
compensate Sublandlord for all detriment caused by Subtenant's failure to perform its obligations under this Sublease. The right to
possession of the Premises by Subtenant should not be deemed terminated until Sublandlord gives Subtenant written notice of such
termination or until Sublandlord re-lets all or a portion of the Premises. Sublandlord shall be required to mitigate damages by making
a good faith effort to re-let the Premises. As used in clauses (1) and (2) of this paragraph, the "worth at the time of award" is computed
by allowing interest at the legal rate of ten percent (10%) per annum. As used in clause (3) of this paragraph, the "worth at the time of
award" is computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of
award plus one percent (1%).
(3)
No right or remedy herein conferred upon or reserved to Sublandlord is intended to be exclusive
of any other right or remedy herein or by law, provided that each shall be cumulative and in addition to every other right or remedy
given herein or now hereafter existing at law or in equity or by statute.
12.
NOTICES. All notices, statements, demands, requests, consents, approvals, authorizations, offers, agreements,
appointments or designations hereunder by either party to the other shall be in writing and shall be sufficiently given and served upon
the other party if sent by United States certified mail, return receipt requested, postage prepaid, or next business day courier (provided
a receipt is given), and addressed as follows:
6
To Sublandlord at:
BioTime, Inc.
1301 Harbor Bay Parkway
Alameda, California 94502
Attention: Chief Financial Officer
To Subtenant at:
BioTime Acquisition Corporation
230 Constitution Drive
Menlo Park, California 94025
Attention: Chief Executive Officer
Any such notice when sent by certified mail as above provided shall be deemed duly served on the third business day following the
date of such mailing. Any such notice when sent by next business day courier as above provided shall be deemed duly served on the
first business day after deposit with the courier service.
13.
SUBLANDLORD’S OBLIGATIONS.
(a)
To the extent that the provision of any services or the performance of any maintenance or repairs or any
other act respecting the Premises is the responsibility of Master Landlord (collectively, “ Master Landlord Obligations ”), upon
Subtenant’s request, Sublandlord shall make commercially reasonable efforts, at Subtenant’s expense, to cause Master Landlord to
perform such Master Landlord Obligations; provided, however, that in no event shall Sublandlord be liable to Subtenant for any
liability, loss or damage whatsoever in the event that Master Landlord should fail to perform the same, nor shall Subtenant be entitled
to withhold the payment of Rent or terminate this Sublease. It is expressly understood that the obligations of Master Landlord to
perform or provide services or repairs under the Master Lease, which are incorporated herein by reference, will in fact be furnished by
Master Landlord and not by Sublandlord. In addition, Sublandlord shall not be liable for any maintenance, restoration (following
casualty or destruction) or repairs in or to the Premises, other than its obligation hereunder to use commercially reasonable efforts, at
Subtenant’s expense, to cause Master Landlord to perform Master Landlord’s obligations under the Master Lease; provided, however,
that if Sublandlord fails to use reasonable effort to cause Master Landlord to perform within ten (10) business days after receipt of
written notice of such failure from Subtenant, Sublandlord agrees that Subtenant may, at Subtenant’s election, exercise such rights as
Sublandlord may have to enforce or seek the enforcement of Master Landlord’s obligations under the Master Lease to the extent such
obligations of Master Landlord affect the Premises, all at Subtenant’s expense. Subtenant shall pay directly or reimburse Sublandlord
upon demand for any and all costs and expenses incurred by Sublandlord in seeking or obtaining Master Landlord’s performance of
Master Landlord’s obligations to provide any services or to perform any maintenance or repairs or any other act respecting the
Premises.
(b)
Except as otherwise provided herein, Sublandlord shall have no other obligations to Subtenant with
respect to the Premises or the performance of the Master Landlord Obligations. Sublandlord shall in no event be in default in the
performance of any of its obligations hereunder unless and until Sublandlord shall have failed to perform such obligations within
thirty (30) days or such additional times as is reasonably required to correct any such default after notice by Subtenant to the
Sublandlord properly specifying wherein the Sublandlord has failed to perform any such obligation.
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14.
EARLY TERMINATION OF SUBLEASE. Except as expressly set forth in this Section 15, if the Master Lease
should terminate prior to the expiration of this Sublease, Sublandlord shall have no liability to Subtenant on account of such
termination unless said termination was a result of default by Sublandlord. To the extent that the Master Lease grants Sublandlord any
discretionary right to terminate the Master Lease, whether due to casualty, condemnation, or otherwise, Sublandlord shall be entitled
to exercise or not exercise such right in its complete and absolute discretion.
15.
CONSENT OF MASTER LANDLORD AND SUBLANDLORD. If Subtenant desires to take any action which
requires the consent or approval of Sublandlord pursuant to the terms of this Sublease, prior to taking such action, including, without
limitation, making any alterations, then, notwithstanding anything to the contrary herein, (a) Sublandlord shall have the same rights of
approval or disapproval as Master Landlord has under the Master Lease, and (b) Subtenant shall not take any such action until it
obtains the consent of Sublandlord and Master Landlord, as may be required under this Sublease or the Master Lease. This Sublease
shall not be effective unless and until any required written consent of the Master Landlord shall have been obtained.
16.
INDEMNITY. Subtenant shall indemnify, defend, protect, and hold Sublandlord and Master Landlord harmless
from and against all actions, claims, demands, costs liabilities, losses, reasonable attorneys’ fees, damages, penalties, and expenses
(collectively, “ Claims ”) which may be brought or made against Sublandlord or which Sublandlord may pay or incur to the extent
caused by (i) a breach of this Sublease by Subtenant, (ii) any violation of law by Subtenant or its employees, agents, contractors or
invitees (collectively, “ Agents ”) relating to the use or occupancy of the Premises, (iii) any act or omission by Subtenant or its Agents
resulting in contamination of any part or all of the Premises by Hazardous Materials, or (iv) the negligence or willful misconduct of
Subtenant or its Agents.
17.
BROKERS. Each party hereto represents and warrants that it has dealt with no broker in connection with this
Sublease and the transactions contemplated herein. Each party shall indemnify, protect, defend and hold the other party harmless from
all costs and expenses (including reasonable attorneys’ fees) arising from or relating to a breach of the foregoing representation and
warranty.
18.
SURRENDER OF PREMISES. Upon the termination or expiration of this Sublease (otherwise than through an
assignment of the Master Lease), Subtenant shall surrender the Premises to Sublandlord free of hazardous materials introduced,
discharged, released or placed on the Premises by Subtenant, broom-clean and in as good a condition as on the Commencement Date,
ordinary wear and tear excepted, and except for any repairs or maintenance required to be performed by Sublandlord. In addition,
Subtenant shall remove any alterations, additions and improvements constructed or installed by Subtenant (whether or not made with
Sublandlord’s consent), prior to the termination of the Sublease and restore the Premises to its prior condition, ordinary wear and tear
excepted, repairing all damage caused by or related to any such removal, all at Subtenant’s expense. Any property of Subtenant not
removed hereunder shall be deemed, at Sublandlord’s option, to be abandoned by Subtenant and Sublandlord may store such property
in Subtenant’s name at Subtenant’s expense, and/or dispose of the same in any manner permitted by law.
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19.
NO THIRD PARTY RIGHTS. The benefit of the provisions of this Sublease is expressly limited to Sublandlord
and Subtenant and their respective permitted successors and assigns. Under no circumstances will any third party be construed to
have any rights as a third party beneficiary with respect to any of said provisions.
20.
QUIET ENJOYMENT. Subtenant shall peacefully have, hold and enjoy the Premises, subject to the terms and
conditions of this Sublease and subject to the Master Lease, provided that Subtenant pays all rent and performs all of Subtenant’s
covenants and agreements contained herein.
21.
DAMAGE AND DESTRUCTION.
(a)
Termination of Master Lease. If the Premises is damaged or destroyed and Master Landlord or
Sublandlord exercises any option either may have to terminate the Master Lease, if any, this Sublease shall terminate as of the date of
the casualty. In the event of any such termination, Sublandlord shall use good faith efforts, at no cost to Sublandlord, to
assist Subtenant to enter into a direct lease with Master Landlord if Subtenant so desires. If the Master Lease imposes any repair or
restoration obligation on Sublandlord, Subtenant shall be responsible for all such obligations as they relate to the Premises.
(b)
Continuation of Sublease. If the Master Lease or this Sublease is not terminated following any damage
or destruction, this Sublease shall remain in full force and effect, and Rent shall be abated in accordance with Section 3(c) of this
Sublease.
22.
EMINENT DOMAIN. If all or any part of the Premises is condemned by eminent domain, inversely condemned or
sold in lieu of condemnation, for any public or a quasi-public use or purpose, this Sublease may be terminated as of the date of title
vesting in such proceeding by Sublandlord, without first obtaining the consent of Subtenant.
23.
ESTOPPEL CERTIFICATES.
(a)
Subtenant shall at any time during the Term, within ten (10) days after written notice from Sublandlord
or Master Landlord, execute, acknowledge and deliver to Sublandlord or Master Landlord or, at Sublandlord's or Master Landlord’s
request, Master Landlord's mortgagee, an estoppel certificate in writing (i) certifying that this Sublease is unmodified and in full force
and effect (or, if modified, stating the nature of such modification and certifying that this Sublease, as so modified, is in full force and
effect) and the date to which the Rent and other charges are paid in advance, if any, (ii) acknowledging that there are not, to
Subtenant's knowledge, any uncured defaults on the part of Sublandlord or Master Landlord hereunder or under the Master Lease, or
specifying such defaults, if any, are claimed, and (iii) ratifying and certifying any such other matters as may reasonably be requested
by Sublandlord, Master Landlord or a prospective or actual lender making a loan to Sublandlord or Master Landlord. Any such
certificate may be conclusively relied upon by any prospective purchaser or encumbrancer of the Premises. Subtenant's failure to
deliver such certificate within such time shall be conclusive upon Subtenant that this Sublease is in full force and effect, without
modification except as may be represented by Sublandlord or Master Landlord; that there are no uncured defaults in Sublandlord’s or
Master Landlord's performance; and that not more than one month's Rent has been paid in advance.
9
(b)
Sublandlord shall at any time during the Term, within ten (10) business days of each request from
Subtenant, execute, acknowledge and deliver to Subtenant an estoppel certificate in writing (i) certifying that this Sublease is
unmodified and in full force and effect (or, if modified, stating the nature of such modification and certifying that this Sublease, as so
modified, is in full force and effect) and the date to which the Rent and other charges are paid in advance, if any, (ii) acknowledging
that there are not, to Sulandlord's knowledge, any uncured defaults on the part of Subtenant hereunder or under the Master Lease, or
specifying such defaults, if any, are claimed, and (iii) ratifying and certifying any such other matters as may reasonably be requested
by Sutenant or a prospective or actual lender making a loan to Subtenant. Any such certificate may be conclusively relied upon by
any prospective lender to Subtenant.
24. SIGNAGE. Subtenant shall be entitled, at its sole cost and expense, to such signage as may be permitted under the
Master Lease, subject to such consent of Master Landlord as may be required under the Master Lease.
25.
MISCELLANEOUS.
(a)
This Sublease may be signed in two or more counterparts, each of which shall be deemed an original and
all of which shall constitute one agreement. This Sublease represents the entire agreement of Sublandlord and Subtenant with respect
to the subject matter hereof. This Sublease may not be amended except by a written instrument executed by both parties hereto.
(b)
Sublandlord and its designee shall have the right during reasonable business hours to enter the Premises
except restricted areas as established by or on behalf of the Federal Government for security purposes (and in emergencies at all
times), (i) to inspect the same, (ii) for any purpose connected with Landlord's rights or obligations under this Sublease and, (iii) for all
other lawful purposes.
(c)
Subtenant shall not be entitled to make repairs at Sublandlord's or Master Landlord’s expense, and
Subtenant waives the provisions of Civil Code Sections 1941 and 1942 with respect to Sublandlord’s and Master Landlord's
obligations for tenantability of the Premises and Subtenant's right to make repairs and deduct the expenses of such repairs from rent.
(d)
This Sublease shall be governed exclusively by the provisions hereof and by the laws of the State of
California as the same from time to time exist.
(e)
This Sublease expresses the entire understanding and all agreements of the parties hereto with each other
and neither party hereto has made or shall be bound by any agreement or any representation to the other party which is not expressly
set forth in this Sublease or the Master Lease. If any provision of this Sublease or the Master Lease shall be invalid, unenforceable or
ineffective for any reason whatsoever, all other provisions hereof shall be and remain in full force and effect.
10
(f)
If Subtenant holds over after the Expiration Date, then such holding over shall be construed as a tenancy
from month to month at a Rent double that provided for under Section 3 for the principal Term of this Sublease.
(g)
As used in this Sublease and when required by the context, each number (singular or plural) shall include
all numbers, and each gender shall include all genders; and unless the context otherwise requires, the word "person" shall include
corporation, firm or association.
(h)
If any lawsuit or proceeding shall be commenced with respect to the rights, obligations, or duties of any
of the parties under this Sublease, the prevailing party shall be entitled to reimbursement from the other party of all costs and
reasonable attorneys' fees actually incurred.
(i)
Time is and shall be of the essence of this Sublease and all of the terms, provisions, covenants and
conditions hereof.
(j)
Subtenant agrees that its interest in this Sublease shall be subordinate to any mortgage, deed of trust
and/or other security indenture hereafter placed upon the Premises and to any and all advances made or to be made thereunder and to
the interest thereon made and all renewals, replacements, and extensions thereof. Subtenant shall, at the request of Sublandlord or
Master Landlord or any mortgagee, trustee or holder of any such security instrument, execute in writing an agreement subordinating
Subtenant’s rights under this Sublease to the lien of such mortgage, deed of trust and/or other security indenture. If any mortgagee,
trustee or holder of such security instrument elects to have the Subtenant's interest in this Sublease superior to any such instrument by
notice to Subtenant, then this Sublease should be deemed superior to the lien of any such mortgage, deed of trust or security indenture
whether this Sublease was executed before or after said mortgage, deed of trust and/or security indenture.
IN WITNESS WHEREOF, the parties have executed this Sublease as of the date first written above.
BioTime, Inc.
By:
s/Robert W. Peabody
Title:
Sr. VP and Chief Operating Officer
BioTime Acquisition Corporation
By:
s/Thomas Okarma
Title:
Chief Executive Officer
11
EXHIBIT A
MASTER LEASE
A-1
TENANT: BIOTIME
LEASE
TABLE OF CONTENTS
ARTICLE
TITLE
PAGE
1 - Premises and Term
1
2 - Rent
1
3 - Landlord's Work - Tenant's Work
2
4 - Streets
2
5 - Utility Services
2
6 - Assignment - Change of Ownership
3
7 - Tenant's Additional Agreements
4
8 - Use of Premises
6
9 - Indemnity and Public Liability Insurance
6
10 -
Fire Insurance and Casualty
7
11 -
Repair
9
12 -
Fixtures & Alterations
10
13 -
Remedies
11
14 -
Bankruptcy
12
15 -
Surrender of Premises
13
16 -
Eminent Domain
13
17 -
Real Property Taxes
14
18 -
Common Area, Parking Facilities
15
19 -
Miscellaneous
17
A-1
BUSINESS PARK LEASE
THIS LEASE is made this 7th day of January, 2013 (the “Effective Date”), between DAVID D. BOHANNON
ORGANIZATION, a California corporation, herein referred to as "Landlord," and BIOTIME, a California corporation, herein referred
to as "Tenant".
WITNESSETH:
ARTICLE 1 - Premises and Term
Section 1.1.
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the demised premises (as
described in Exhibit "A" and located substantially as shown on Exhibit "B" attached hereto) upon and subject to the terms and
provisions of this Lease for a demised term of three (3) years (plus any partial period prior to the commencement of the first full
calendar month), commencing one (1) day after Landlord delivers possession of the demised premises to Tenant (in no event later than
January 7, 2013) (the “Term Commencement Date”), and ending on the last day of the third (3rd) year (exclusive of such partial
period, if any) after such Term Commencement Date.
ARTICLE 2 - Rent
Section 2.1.
Tenant covenants and agrees to pay to Landlord without set-off, recoupment, deduction or demand of any
nature whatsoever, base rent for each year during the demised term in the amount of Three Hundred Eighty One Thousand Four
Hundred Twenty Seven and 20/100 Dollars ($381,427.20) per annum, payable in twelve (12) equal monthly installments of Thirty
One Thousand Seven Hundred Eighty Five and 60/100 Dollars ($31,785.60) (subject to increase pursuant to the following
paragraph). Base rent shall be paid monthly in advance on the first (1st) day of each calendar month commencing on the Term
Commencement Date.
In addition to the above base rent, within fifteen (15) business days after the Effective Date, Tenant shall issue shares of
Tenant’s common stock to Landlord with an aggregate value at least equal to the amount of Two Hundred Forty Two Thousand Seven
Hundred Twenty Six and 40/100 Dollars ($242,726.40) based on the average closing price of Tenant’s common shares as reported on
the NYSE MKT for the ten (10) trading days immediately prior to the Effective Date pursuant to a stock purchase agreement in form
attached hereto as Exhibit “E”, and such agreement shall be entered into by the parties on or before the Effective Date herein. In the
event Tenant does not file with the Securities and Exchange Commission either (i) a prospectus supplement covering the issuance of
the shares to Landlord under Tenant’s shelf registration statement, or (ii) a new registration statement, so as to permit a
non-underwritten public offering and resale of the shares by Landlord pursuant to the stock purchase agreement, within one hundred
twenty (120) days after the Closing Date of the stock purchase agreement (i.e., 120 days plus 15 business days after the Effective Date
herein), then Landlord may elect to return the BioTime shares to BioTime, whereupon the base rent payable by Tenant pursuant to this
Section 2.1 shall instead be the amount of Four Hundred Sixty Two Thousand Three Hundred Thirty Six Dollars ($462,336.00) per
annum, payable in twelve (12) equal monthly installments of Thirty Eight Thousand Five Hundred Twenty Eight Dollars
($38,528.00), and Tenant shall pay Landlord such increased base rent for the three year demised term of this Lease. Landlord shall
make such election by delivering to Tenant written notice accompanied by the certificate(s) evidencing the BioTime common shares
which were previously issued to Landlord, duly endorsed by Landlord for transfer to Tenant. Within ten (10) days after receipt of
such written notice and stock certificate(s) so endorsed for transfer, Tenant shall pay to Landlord an amount of cash equal to the
excess of the new monthly base rent of $38,528.00 over the monthly base rent of $31,785.60 paid or due to be paid for each calendar
month from the Term Commencement Date through the first day of the calendar month in which such payment is made and Tenant
shall thereafter pay the new monthly base rent.
-1-
Section 2.2.
For the purpose of this Lease, a year shall be twelve (12) calendar months, commencing with the first day of
the first full calendar month of the demised term and the succeeding anniversaries thereof. For any period prior to the commencement
of the first year or subsequent to the end of the last year of the demised term, rent shall be prorated on the basis of the rental rate then
payable.
Section 2.3.
All sums payable and all statements deliverable to Landlord by Tenant under this Lease shall be paid and
delivered at Sixty 31 st Avenue, San Mateo, California 94403-3497, or at such other place as Landlord may from time to time direct
by notice to Tenant and all such sums shall be paid in lawful money of the United States.
Section 2.4.
Upon execution of this Lease, Tenant shall pay to the Landlord the following:
(A)
Thirty One Thousand Seven Hundred Eighty Five and 60/100 Dollars ($31,785.60) which shall be applied by
Landlord to the first base rent to become due and payable under this Lease, and
(B)
Thirty One Thousand Seven Hundred Eighty Five and 60/100 Dollars ($31,785.60) (which shall be increased to
$38,528.00 if the base rent increases pursuant to Section 2.1 above, payable by Tenant along with any unpaid base rent pursuant to the
provisions of Section 2.1 above) which shall be held as a Security Deposit pursuant to the terms of Section 19.9.
Section 2.5.
In addition to base rent under Section 2.1., all other payments to be made under this Lease by Tenant to
Landlord shall be deemed to be and shall become additional rent hereunder, whether or not the same to be designated as such, and
shall be included in the term "rent" wherever used in this Lease; and, unless another time shall be expressly provided for the payment
thereof, all rent and additional rent shall be due and payable together with the next succeeding installment of base rent; and Landlord
shall have the same remedies for failure to pay the same as for a nonpayment of base rent.
-2-
Section 2.6.
Any amount due from Tenant to Landlord that is not paid when due shall bear interest at the highest rate then
permitted to be charged on late payments under leases under California law; provided, however, the payment of any such interest shall
not excuse or cure the default upon which such interest accrued. Tenant acknowledges and agrees that payment of such interest on
late payments is reasonable compensation to Landlord for the additional costs incurred by Landlord caused by such late payment,
including, but not limited to, collection and administration expenses and the loss of the use of the money that was late in payment.
ARTICLE 3 - Landlord's Work - Tenant's Work
Section 3.1.
Landlord shall not be required to perform any work in the demised premises; and Tenant accepts the
demised premises in an "as is" condition.
Section 3.2.
Any work to be performed in the demised premises shall be performed at the sole cost of Tenant in
accordance with detailed plans and specifications therefor which must be approved, in writing, by Landlord or Landlord's architect
before work is commenced. Within ten (10) days following Tenant’s completion thereof, Tenant shall furnish Landlord with a
complete set of the final “For Construction” plans therefor in AutoCAD format, including all x-refs, fonts and plot files.
ARTICLE 4 - Streets
Section 4.1.
Tenant agrees to require employees, and to direct customers and other persons visiting Tenant, to park in the
parking area provided in the Parking and Accommodation Areas and to allow Landlord to post the streets for no parking.
ARTICLE 5 - Utility Services
Section 5.1.
Landlord has at its own cost and expense secured the installation of water, gas, sanitary sewers and electrical
services to the demised premises and made all necessary connections thereof to the building. Tenant shall pay all meter or service
charges made by public utilities companies and shall pay for the water, gas and/or electricity used on the demised premises and sewer
use fees and charges whether ad valorum or not and any so called "sewer connection charges" based on increased wastewater
discharge from the demised premises exclusively. Tenant shall maintain such connections of utilities to the demised premises and the
building.
Section 5.2.
Landlord shall not be liable to Tenant for the failure of any utility services.
-3-
ARTICLE 6 - Assignment - Change of Ownership
Section 6.1.
A.
Except as otherwise provided herein (including Section 6.1.E below), Tenant shall not, by operation of law or
otherwise, transfer, assign, sublet, enter into license or concession agreements, change ownership, mortgage or hypothecate this Lease
or the Tenant's interest in and to the demised premises without first procuring the written consent of Landlord. Any attempted
transfer, assignment, subletting, license or concession agreement, change of ownership, mortgage or hypothecation without Landlord's
written consent shall be void and confer no rights upon any third person. Landlord's consent to a proposed assignment or sublease
shall not be unreasonably withheld provided that the proposed assignee or sublessee shall have: (i) a net worth, at the time of the
assignment or sublease, determined in accordance with good accounting principles, equal to or in excess of the net worth of Tenant at
the date of the Lease; (ii) been active in its current business for a minimum of three (3) years immediately prior to the assignment or
sublease; and (iii) a good reputation in the business community; provided further that Tenant shall give Landlord not less than sixty
(60) days notice prior to the effective date of any such assignment or sublease, and Landlord shall have the option to terminate this
Lease with respect to the space to be assigned or subleased by notice to Tenant given within thirty (30) days of Landlord's receipt of
Tenant's notice. Nothing herein contained shall relieve Tenant and any Guarantor from its covenants and obligations for the demised
term. Tenant agrees to reimburse Landlord for Landlord's reasonable outside attorneys' fees incurred in conjunction with the
processing and documentation of any such requested transfer, assignment, subletting, licensing or concession agreement, change of
ownership, mortgage or hypothecation of this Lease or Tenant's interest in and to the demised premises. If Landlord consents to any
assignment or sublease pursuant to this Article, Tenant shall pay Landlord, as additional rent:
(a)
in the case of each and every assignment, an amount equal to ALL monies, property, and other
consideration of every kind whatsoever paid or payable to Tenant by the assignee for such assignment and for all property of
Tenant transferred to the assignee as part of the transaction (including, but not limited to, fixtures, other leasehold
improvements, furniture, equipment, and furnishings); and
(b)
in the case of each and every sublease, ALL rent, and/or other monies, property, and consideration of
every kind whatsoever paid or payable to Tenant by the subtenant under the sublease, LESS all base rent and additional rent
under this Lease accruing during the term of the sublease in respect of the subleased space (as reasonably determined by
Landlord, taking into account the useable area of the premises demised under the sublease).
B.
Each transfer, assignment, subletting, license, concession agreement, mortgage and hypothecation to which there
has been consent shall be by an instrument in writing in form satisfactory to Landlord, and shall be executed by the transferor,
assignor, sublessor, licensor, concessionaire, hypothecator or mortgagor and the transferee, assignee, sublessee, licensee,
concessionaire or mortgagee in each instance, as the case may be; and each transferee, assignee, sublessee, licensee, concessionaire or
mortgagee shall agree in writing for the benefit of Landlord herein to assume, to be bound by, and to perform the terms, covenants and
conditions of this Lease to be done, kept and performed by Tenant, including the payment of all amounts due or to become due under
this Lease directly to Landlord. One (1) executed copy of such written instrument shall be delivered to Landlord. Failure to first
obtain in writing Landlord's consent or failure to comply with the provisions of this Article shall operate to prevent any such transfer,
assignment, subletting, license, concession agreement, mortgage, or hypothecation from becoming effective.
-4-
C.
If Tenant hereunder is a corporation which does not have a class of equity securities registered under Section 12
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or does not otherwise file periodic reports under Section
13 of the Exchange Act, or is an unincorporated association or partnership, the transfer, assignment or hypothecation of any stock or
interest in such corporation, association or partnership in the aggregate in excess of twenty-five percent (25%) shall be deemed an
assignment within the meaning and provisions of this Section 6.1.
D.
The consent of Landlord to any transfer, assignment, sublease, license or concession agreement, change in
ownership, mortgage or hypothecation of this Lease is not and shall not operate as a consent to any future or further transfer,
assignment, sublease, license or concession agreement, change in ownership, mortgage or hypothecation, and Landlord specifically
reserves the right to refuse to grant any such consents except as otherwise provided in this Section 6.1 .
E.
Notwithstanding any other provision of this Lease to the contrary, Tenant may, without the consent of or notice to
Landlord, sublease the demised premises or any part thereof, or may share the use of the demised premises in whole or in part, with
one or more of Tenant’s Affiliates, provided such Affiliates comply with all of the provisions of this Lease (other than the covenant to
pay rent). As used herein, “Affiliate” means any corporation, limited liability company, partnership, or other business entity which is
controlled by, in control of, or under common control with Tenant. In addition, Tenant may, without the consent of Landlord, assign
this Lease to BioTime Acquisition Corporation (“BAC”) at any time after one of the following events has occurred: (a) BAC has
obtained at least Ten Million Dollars ($10,000,000) in equity capital through the sale of capital stock for cash, or (b) BAC has a class
of capital stock registered under Section 12 of the Exchange Act; provided that BAC shall agree in writing, in form reasonably
satisfactory to Landlord, to assume, to be bound by, and to perform the terms, covenants and conditions of this Lease to be done, kept
and performed by Tenant, including the payment of all amounts due or to become due under this Lease directly to Landlord, without
any modification of this Lease. Tenant shall provide Landlord with the following no later than ten (10) days prior to the effective date
of the proposed assignment: (i) evidence of the satisfaction of the conditions to the assignment stated hereinabove as reasonably
determined by Landlord, and (ii) a copy of the proposed assignment agreement. The provisions of Section 6.1.B shall apply to such
assignment. Nothing herein contained shall be construed as releasing Tenant from any of its liabilities or other obligations hereunder,
including the payment of rent, (1) at any time during the demised term of this Lease with respect to an assignment of the Lease or
sublease of the demised premises to an Affiliate (except BAC), and (2) for the period from the Effective Date through the effective
date of the assignment to BAC, with respect to an assignment of the Lease to BAC.
-5-
Section 6.2. Landlord's rights to assign this Lease are and shall remain unqualified. Upon any sale of the demised
premises and provided the purchaser assumes all obligations under this Lease, Landlord shall thereupon be entirely released of all
obligations of Landlord hereunder and shall not be subject to any liability resulting from any act or omission or event occurring after
such sale.
ARTICLE 7 - Tenant's Additional Agreements
Section 7.1.
Tenant agrees at all times during the demised term to: (A) Keep the demised premises in a neat and clean
condition. (B) Promptly remove all waste, garbage or refuse from the demised premises. (C) Promptly comply with all laws and
ordinances and all rules and regulations of duly constituted governmental authorities affecting the demised premises, and the
cleanliness, safety, use and occupation thereof, but this clause (C) shall not be construed to require Tenant to comply with any such
laws, ordinances, rules or regulations which require structural changes in the demised premises unless the same are made necessary by
act or work performed by Tenant or the nature of Tenant's business. (D) Prevent the escape from the demised premises of all fumes,
odors and other substances which are offensive or may constitute a nuisance or interfere with other tenants.
Section 7.2. Tenant agrees that it will not at any time during the demised term without first obtaining the Landlord's
written consent: (A) Conduct or permit any fire, bankruptcy or auction sale in the demised premises. (B) Place on the exterior walls
(including both interior and exterior surfaces of windows and doors), the roof of any buildings or any other part of the demised
premises, any sign, symbol, advertisement, neon light, other light or other object or thing visible to public view outside of the demised
premises. (C) Change the exterior color of the building on the demised premises, or any part thereof, or the color, size, location or
composition of any sign, symbol or advertisement that may have been approved by Landlord. (D) Park, operate, load or unload, any
truck or other delivery vehicle on any place other than the loading area designated for Tenant's use. (E) Use the plumbing facilities for
any purpose other than that for which they were constructed or dispose of any foreign substance therein. (F) Install any exterior
lighting or plumbing facilities, shades or awnings, amplifiers or similar devices, or use any advertising medium which may be heard or
experienced outside the demised premises, such as loudspeakers, phonographs, or radio broadcasts. (G) Deface any portion of the
building or improvements on the demised premises, normal usage excepted. In the event any portion of the building is defaced or
damaged, Tenant agrees to repair such damage. (H) Permit any rubbish or garbage to accumulate on the demised premises, or any
part thereof, unless confined in metal containers so located as not to be visible to members of the public. (I) Install, maintain or
operate any sign except as approved in writing by Landlord. (J) Store materials, supplies, equipment, finished products, raw materials
or articles of any nature outside of the demised premises. (K) Use the demised premises for retail, commercial or residential
purposes. (L) Use, store, generate or dispose of any "hazardous material", "hazardous substance" or "hazardous waste" as those terms
are defined from time to time under applicable laws and regulations, except in compliance with applicable federal and state laws, but
subject to Section 7.4 below.
-6-
Section 7.3.
Tenant agrees that it will not at any time during the demised term: (A) Perform any act or carry on any
practice which may injure the demised premises. (B) Burn anything in or about the demised premises. (C) Keep or display any
merchandise or other object on or otherwise obstruct any sidewalks, walkways or areaways. (D) Use or permit the use of any portion
of the demised premises as living quarters, sleeping apartments, lodging rooms, or for any unlawful purpose. (E) Use or permit the
demised premises to be used for any purpose which is or shall not then be allowed under the Zoning Ordinance of the City of Menlo
Park, California, in that area.
Section 7.4. Tenant shall, at its expense, comply with all applicable laws, regulations, rules and orders, regardless of
when they become or became effective, including, without limitation, those relating to health, safety, noise, environmental protection,
waste disposal, and water and air quality, and furnish satisfactory evidence of such compliance upon request of Landlord.
Should any discharge, leakage, spillage, emission or pollution of any type occur upon or from the demised premises due to
Tenant's use and occupancy thereof, Tenant, at its expense, shall be obligated to remedy the same to the satisfaction of Landlord and
any governmental body having jurisdiction thereover. Tenant agrees to indemnify, hold harmless, and defend Landlord against all
liability, cost, and expense (including without limitation any fines, penalties, judgments, litigation costs, and attorneys' fees) incurred
by Landlord as a result of Tenant's breach of this section, or as a result of any such discharge, leakage, spillage, emission, or pollution,
regardless of whether such liability, cost, or expense arises during or after the demised term, unless such liability, cost or expense is
proximately caused solely by the active negligence of Landlord.
Tenant shall pay all amounts due Landlord under this section, as additional rent, within ten (10) days after any such amounts
become due.
Tenant shall, at least thirty (30) days prior to the termination of the demised term, or any earlier termination of this Lease,
submit a plan to the Menlo Park Fire Protection District in accordance with applicable provisions of the Uniform Fire Code, with a
copy to Landlord, demonstrating how any hazardous materials which were stored, dispensed, handled or used in, at or upon the
demised premises will be transported, disposed of or reused at the expiration or sooner termination of the demised term of this Lease;
and Tenant shall, at the expiration or sooner termination of the demised term, comply with all applicable laws, regulations, rules and
orders of any governmental body having jurisdiction thereover (including without limitation the Menlo Park Fire Protection District)
regarding the disposal of any such hazardous materials.
Tenant’s obligations under this Section 7.4. shall survive the expiration or earlier termination of this Lease, including
without limitation any termination resulting from any default by Tenant under the Lease.
-7-
ARTICLE 8 - Use of Premises
Section 8.1. Tenant shall use the demised premises solely for general office, biomedical research and development and
related product production, and for no other purposes without Landlord's written consent.
Section 8.2. Tenant covenants and agrees that it will not knowingly use or permit to be used the demised premises or any
part thereof for any unlawful purpose whatsoever. Tenant shall obtain and maintain all governmental licenses and permits required for
the lawful and proper conducting of Tenant’s business in the demised premises.
ARTICLE 9 - Indemnity and Public Liability Insurance
Section 9.1.
Tenant agrees to indemnify and save harmless Landlord from and against all claims arising from any act,
omission or negligence of Tenant, or its contractors, licensees, agents, servants, invitees or employees, or arising from any accident,
injury or damage whatsoever caused to any person, or to the property of any person occurring during the demised term in or about the
demised premises, the sidewalks (if any) adjoining the same and from and against all costs, expenses and liabilities incurred in or in
connection with any such claim or proceeding brought thereon, including, but not limited to, reasonable attorneys' fees and court costs.
Section 9.2.
Tenant agrees to maintain in full force during the demised term a policy of public liability and property
damage insurance under which Landlord (and such other persons, firms or corporations as are designated by Landlord and are
properly includible as additional insureds under the terms of any such policies of insurance) and Tenant are named as insureds, and the
insurer agrees to indemnify and hold Landlord and Landlord's said designees harmless from and against all cost, expense and/or
liability arising out of or based upon any and all claims, accidents, injuries and damage mentioned in Section 9.1. All public
liability and property damage policies shall contain a provision that Landlord, although named as an insured, shall nevertheless be
entitled to recovery under said policies for any loss occasioned to it, its servants, agents and employees, by reason of the negligence of
Tenant. Each such policy shall be approved as to form and insurance company by Landlord, such approval not to be unreasonably
withheld, be noncancelable with respect to the Landlord and Landlord's said designees without twenty (20) days' written notice to the
Landlord and Landlord's said designees, and a duplicate original or certificate thereof shall be delivered to Landlord prior to
commencement of the demised term and thereafter thirty (30) days prior to expiration of the term of each policy. The limits of
liability of such comprehensive general liability insurance shall be Two Million Dollars ($2,000,000.00) for injury or death to one or
more persons and damage to property, combined single limit. All public liability, property damage and other casualty policies shall be
written as primary policies, not contributing with and not in excess of coverage which Landlord may carry. Notwithstanding anything
contained herein to the contrary, all insurance carried by Tenant shall be issued by responsible insurance companies licensed to do
business in the State of California with an A.M. Best Company rating of A- VIII or better.
-8-
If Tenant shall not comply with its covenants to maintain insurance made above, or if Tenant fails to provide duplicate
originals or certificates thereof to Landlord as is provided above, Landlord may, but shall not be required to, obtain any such
insurance; and if Landlord does obtain any such insurance, Tenant shall, on demand, reimburse Landlord for the premium for any such
insurance.
Section 9.3.
Tenant agrees to use and occupy the demised premises, the Parking and Accommodation Areas and to use
all other portions of the Business Park (which it is herein given the right to use) at its own risk and hereby releases to the full extent
permitted by law the Landlord, and its agents, servants, contractors, and employees, from all claims and demands of every kind
resulting from any accident, damage or injury occurring therein. Landlord shall have no responsibility or liability for any loss of or
damage to fixtures or other personal property of Tenant. The provisions of this Section shall apply during the whole of the demised
term.
ARTICLE 10 - Fire Insurance and Casualty
Section 10.1. If the building on the demised premises should be damaged or destroyed during the demised term by any
casualty insurable under Landlord's standard fire and extended coverage insurance policies, Landlord shall (except as hereinafter
provided) repair and/or rebuild the same to substantially the condition in which the same existed immediately prior to such damage or
destruction. Landlord's obligation under this Section shall in no event exceed either (A) the scope of the work done by Landlord in the
original construction of such building, or (B) the proceeds of any such insurance policy if Landlord keeps the building and the
demised premises insured against loss or damage by such fire and extended coverage insurance to the extent of at least eighty percent
(80%) of the insurable value of the building if reasonably obtainable from responsible insurance companies licensed to do business in
California, unless Landlord nevertheless elects to repair and/or rebuild the building and the demised premises. Tenant shall in the
event of any such damage or destruction, unless this Lease shall be terminated as hereinafter provided, be responsible for replacing or
repairing all exterior signs, trade fixtures, equipment, display cases, and other installations originally installed by the Tenant. Tenant
shall have no interest in the proceeds of any insurance carried by Landlord.
Section 10.2. Tenant's base rent shall be abated proportionately during any period in which, by reason of any such damage
or destruction, the building is rendered partially or totally untenantable. Such abatement shall continue for the period commencing
with such destruction or damage and ending with the substantial completion by the Landlord of such work or repair and/or
reconstruction as Landlord is obligated to do.
Section 10.3. If the building on the demised premises should be damaged or destroyed to the extent of 33-1/3% or more of
the then monetary value thereof by an event described in Section 10.1. , then Landlord may terminate this Lease by written notice to
Tenant.
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If Landlord does not elect to terminate this Lease then Landlord shall repair and/or rebuild the same as provided in Section
10.1. If such damage or destruction occurs and this Lease is not so terminated, this Lease shall remain in full force and effect and the
parties waive the provisions of any law to the contrary. The Landlord's obligation under this Section shall in no event exceed the
scope of the work to be done by the Landlord in the original construction of said building and the demised premises.
Section 10.4. Tenant agrees to comply with all of the regulations and rules of the Insurance Service Office or any similar
body and will not do, suffer, or permit an act to be done in or about the demised premises which will increase any insurance rate with
respect thereto.
Section 10.5. Tenant agrees, in addition to any rent provided for herein, to pay to the Landlord the cost of the fire and
extended coverage insurance policy carried by Landlord on the demised premises during the entire demised term or any renewal or
extension thereof. This Section expressly permits the Landlord to carry standard fire and extended coverage policies to the extent of
one hundred percent (100%) of the insurable value.
Section 10.6. During the demised term, Tenant shall carry, at its expense, insurance against loss and damage by fire
including “Special Perils” provisions for the full insurable value of Tenant's merchandise and personal property, including wall
coverings, carpeting and drapes, and the trade fixtures, furnishings and operating equipment in the demised premises, whether
supplied by Tenant or existing in the demised premises upon commencement of the Lease. Landlord and Landlord's mortgagee shall
be named as additional insureds under said policy, which shall be noncancellable with respect to Landlord and Landlord's mortgagee
without twenty (20) days' prior written notice. A certificate evidencing such coverage shall be delivered to Landlord prior to
commencement of the demised term and thereafter thirty (30) days prior to the expiration of the term of such policy. Such insurance
shall be written as a primary policy, not contributing with and not in excess of coverage Landlord may carry. If Tenant shall not
comply with its covenants to maintain said insurance, or if Tenant fails to provide a certificate thereof to Landlord, Landlord may, but
shall not be required to, obtain any such insurance, and if Landlord does obtain any such insurance, Tenant shall, on demand,
reimburse Landlord for the premium for any such insurance.
Section 10.7. In the event the building on the demised premises shall be damaged as a result of any flood, earthquake, act
of war, nuclear reaction, nuclear radiation or radioactive contamination, or from any other casualty not covered by Landlord's fire and
extended coverage insurance, to any extent whatsoever, Landlord may within ninety (90) days following the date of such damage,
commence repair, reconstruction or restoration of the building and prosecute the same diligently to completion, in which event this
Lease shall continue in full force and effect, or within said ninety (90) day period elect not to so repair, reconstruct or restore the
building, in which event this Lease shall cease and terminate. In either such event Landlord shall give Tenant written notice of its
intention within said ninety-day period.
Section 10.8. Upon any termination of this Lease under the provisions of this Article 10, the rent shall be adjusted as of
the date of such termination and the parties shall be released without further obligation to the other party upon the surrender of
possession of the demised premises to Landlord, except for items that have been theretofore accrued and are then unpaid, and except
for obligations that are designated as surviving such termination.
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Section 10.9. Notwithstanding anything in this Article 10 or elsewhere in this Lease to the contrary, Landlord may
maintain any insurance on the demised premises that Landlord deems necessary or advisable, including, but not limited to, any rental
insurance, owner's protective liability insurance or any insurance required by any mortgagee of Landlord; and Landlord may include
the amount of the premiums for such insurance in the total of the insurance premiums which Tenant is required to pay under the terms
hereof.
ARTICLE 11 - Repair
Section 11.1. Landlord agrees, at Landlord's sole expense, to maintain and repair the roof structure (not including the roof
membrane), exterior walls and foundation and repair structural defects of the building on the demised premises throughout the life of
the Lease. Structural defects and maintenance shall not be deemed to include cracks or fissures in walls or floors, nor the requirement
of painting or caulking.
Section 11.2. Tenant agrees during the demised term or any extension thereof to maintain the interior of the building on
the demised premises, and every part thereof, except as to work to be performed by Landlord under Sections 11.1. and 11.3. Tenant
further agrees to clean, inside and out, all of the glass on the exterior of the building. If Tenant should fail to faithfully perform its
maintenance obligations hereunder then Landlord shall, upon having given notice to Tenant of the need for said maintenance, have the
right to perform, or cause to be performed, said maintenance and Tenant shall on demand reimburse Landlord for Landlord's costs of
providing such maintenance. Landlord’s reservation of the right to enter upon the demised premises to perform any repairs or
maintenance or other work in, to, or about the demised premises which in the first instance is the Tenant’s obligation pursuant to this
Lease shall not be deemed to impose any obligation on Landlord to do so, nor shall Landlord be rendered liable to Tenant or any third
party for the failure to do so, and Tenant shall not be relieved from any obligation to indemnify Landlord as otherwise provided
elsewhere in this Lease.
Section 11.3 Landlord shall provide the following services and Tenant shall, in addition to all other payments required to
be made under other provisions of this Lease, on demand reimburse Landlord for Landlord's gross costs of: (i) maintaining, repairing
and replacing the roof; (ii) painting, maintaining and repairing the exterior of the building; (iii) maintaining, repairing and replacing
the elevator and elevator equipment room (if any); (iv) maintenance and repair associated with the mechanical and electrical rooms;
(v) maintenance and repair of the trash enclosure utilized in connection with the building; (vi) maintenance, repair and replacement of
the glass on the exterior of the building and (vii) any other maintenance and repair other than that which Landlord is required to
perform at Landlord's expense per Section 11.1. Tenant shall also, on demand, reimburse Landlord for Landlord's gross costs of
maintaining, repairing and replacing the heating and air conditioning equipment serving the demised premises, whether furnished by
Landlord or Tenant. Landlord's said gross costs as used in this Section 11.3. shall include all costs and expenses of every kind or
nature incurred by Landlord in the performance of such maintenance, repair or replacements and Landlord's determination of the
amount of said costs and expenses will be final.
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Section 11.4. If during the term of this Lease Landlord or Landlord's insurance carrier requires the installation of a
specialized fire control system, or any fire detection device, because of the nature of the particular activities being carried on by
Tenant in the demised premises, then said system or device shall be installed at the sole cost of the Tenant within the time specified.
Section 11.5. Notwithstanding the provisions of Sections 11.3 and 18.3 hereof to the contrary, Tenant’s obligation to
reimburse Landlord for (i) costs associated with the replacement (as opposed to repairs and maintenance) of the roof membrane and
underlayment, and the heating, ventilating and air-conditioning units furnished by Landlord (but specifically excluding heating,
ventilating and air-conditioning units which serve the clean room and labs), and (ii) the cost of any other capital improvement made by
Landlord pursuant to Article 11 and/or Article 18 of this Lease during the demised term and required under good accounting practice
to be amortized, shall be limited to a proportionate share of such replacement costs (the "Reimbursement Amounts") calculated as
follows:
(a)
if such costs are incurred during the initial demised term of this Lease, by multiplying such replacement costs by
a fraction, the numerator of which is the number of days in the original demised term and the denominator of which is the number of
days in the estimated useful life of the replacement; and
(b)
if such costs are incurred during any extended term or holding over period of this Lease, by multiplying such
replacement costs by a fraction, the numerator of which is the number of days in the demised term of this Lease (including any
extended term or holding over period) and the denominator of which is the number of days in the estimated useful life of the
replacement.
If a Reimbursement Amount has been determined under subsection (a) above with respect to any replacement
costs, and Landlord and Tenant subsequently agree to extend the term of this Lease, Tenant shall also be responsible for another
Reimbursement Amount with respect to such replacement costs determined by multiplying such replacement costs by a fraction, the
numerator of which is the number of days in the extended term or holding over period of this Lease and the denominator of which is
the number of days in the estimated useful life of the replacement.
The foregoing limitation shall not apply to equipment furnished by Tenant and maintained by Landlord. Tenant shall pay
any Reimbursement Amounts, as additional rent, monthly on a straight-line basis amortized over the remaining demised term of the
Lease using an interest rate equal to ten percent (10%) per annum.
The limitations on Tenant's liability for expenses hereunder shall in no event apply to any costs for replacements occasioned
by (x) Tenant's negligent acts or omissions or those of its employees, contractors, agents, invitees or servants, or (y) the particular
nature of Tenant's business, all of which costs shall be borne solely by Tenant.
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Landlord may bill Tenant monthly for one-twelfth of the estimated costs to be reimbursed by Tenant under this Section 11.5
, subject to an annual reconciliation after the end of each lease year. At Tenant’s written request, in connection with the annual
reconciliation, Landlord shall furnish to Tenant a statement showing the costs incurred, in reasonable detail, the estimated payments
made by Tenant, and the amount of any overpayment or underpayment. Tenant shall pay to Landlord the amount of any
underpayment within thirty (30) days after receipt of the statement, and Tenant shall be entitled to credit the amount of any
overpayment against the next payments of rent due hereunder, except that following the expiration of the term hereof, Landlord shall,
provided Tenant is not in default under this Lease, pay to Tenant the amount of any overpayment at the time it furnishes the statement
to Tenant.
ARTICLE 12 - Fixtures & Alterations
Section 12.1. All trade fixtures owned by Tenant and installed in the demised premises shall remain the property of Tenant
and may be removed from time to time and shall be removed at the expiration of the demised term. Tenant shall repair any damage to
the demised premises caused by the removal of said fixtures. If Tenant fails to remove such fixtures on or before the last day of the
demised term, all such fixtures shall become the property of Landlord, unless Landlord elects to require their removal, in which case
Tenant shall promptly remove them and restore the demised premises to its condition prior to such removal. Landlord may also, at
Landlord's sole discretion, store such fixtures at Tenant's expense.
Section 12.2. Tenant shall not make any alterations, additions or improvements in or to the demised premises or the
building without submitting plans and specifications therefor for the prior written consent of Landlord, which consent shall not be
unreasonably withheld provided same do not involve the exterior of the building, the building structure, or materially affect the
mechanical, electrical or life safety systems. Any such alterations, additions or improvements shall comply with all applicable codes
and standards, shall be consented to by Landlord, and shall be made at Tenant's sole cost and expense in accordance with the plans and
specifications therefor. Within ten (10) days following Tenant’s completion thereof, Tenant shall furnish Landlord with a complete
set of the final “For Construction” plans therefor in AutoCAD format, including all x-refs, fonts and plot files. Tenant shall secure
any and all governmental permits, approvals or authorizations required in connection with any such work, and shall hold Landlord
harmless from any and all liability, costs, damages, expenses (including attorneys' fees) and any and all liens resulting therefrom. All
alterations, decorations, additions and improvements (and expressly including all light fixtures and floor coverings installed by
Tenant), except furniture, removable paneling, wall fixtures, trade fixtures, appliances and equipment which do not become a part of
the demised premises, shall be deemed to belong to Tenant, but shall be deemed to have been attached to the demised premises or the
building and to have become the property of Landlord upon the termination of the demised term. Upon the expiration or sooner
termination of the demised term hereof, Tenant shall, at Tenant's sole cost and expense, forthwith remove (i) all alterations,
decorations, additions or improvements installed by or for Tenant, and (ii) all wiring installed by or for Tenant in the demised
premises and/or the building, unless excused from doing so in writing by Landlord, and Tenant shall forthwith at its sole cost and
expense repair any damage to the demised premises or the building caused by such removal. In the event Tenant does not so remove
all such alterations, decorations, additions, improvements and wiring from the demised premises and/or the building, or repair any
damage caused by such removal, then Tenant agrees that Landlord may apply such sums from the Security Deposit, or recover such
sums from Tenant by judgment if Tenant did not provide a Security Deposit, or if insufficient funds exist in the Security Deposit, to
compensate Landlord for the removal and disposal of any of the same and/or repair of any damage therefrom to the demised premises
or the building.
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ARTICLE 13 - Remedies
Section 13.1. Should Tenant default in the performance of any of its obligations under this Lease with reference to the
payment of rent and such default continue for five (5) days after the date such payment is due, or should Tenant default in the
performance of any other obligations under this Lease and such default continue for thirty (30) days after receipt of written notice
from Landlord specifying such default or beyond the time reasonably necessary to cure if such default is of a nature to require more
than thirty (30) days to remedy, then, in addition to all other rights and remedies Landlord may have under this Lease or under
applicable law, Landlord shall have the following rights and remedies:
(1)
The Landlord has the remedy described in California Civil Code Section 1951.4 (Landlord may continue the lease
in effect after Tenant's breach and abandonment and recover Rent as it becomes due, if Tenant has the right to sublet or assign, subject
only to reasonable limitations). If Tenant breaches any covenants of this Lease or if any event of default occurs, whether or not
Tenant abandons the demised premises, this Lease shall continue in effect until Landlord terminates Tenant's right to possession, and
Tenant shall remain liable to perform all of its obligations under this Lease and Landlord may enforce all of Landlord's rights and
remedies, including the right to recover rent as it falls due. If Tenant abandons the demised premises or fails to maintain and protect
the same as herein provided, Landlord shall have the right to do all things necessary or appropriate to maintain, preserve and protect
the demised premises, including the installation of guards, and may do all things appropriate to a re-letting of the demised premises,
and none of said acts shall be deemed to terminate Tenant's right of possession, unless Landlord elects to terminate the same by
written notice to Tenant. Tenant agrees to reimburse Landlord on demand for all amounts reasonably expended by Landlord in
maintaining, preserving and protecting the demised premises, together with interest on the amounts expended from time to time at the
maximum legal rate. Landlord shall also have the right to repair, remodel and renovate the demised premises at the expense of Tenant
and as deemed necessary by Landlord.
(2)
Landlord shall have the right to terminate Tenant's possession of the Premises, and if Tenant's right to possession
of the Premises is terminated by Landlord by reason of a breach of this Lease by Tenant, or by reason of the happening of an event of
default, or by reason of abandonment of the Premises by Tenant, Landlord shall be entitled, at Landlord’s election, to recover damages
in an amount as set forth in Section 1951.2 of the Civil Code of California as then in effect, which damages shall include (1) the worth
at the time of award of any unpaid rent and additional rent which had been earned at the time of such termination; plus (2) the worth at
the time of award of the amount by which the unpaid rent and additional rent which would have been earned after termination until the
time of award exceeds the amount of such rental loss Tenant proves could have been reasonably avoided; plus (3) the worth at the
time of award of the amount by which the unpaid rent and additional rent for the balance of the term after the time of award exceeds
the amount of such rental loss that Tenant proves could be reasonably avoided; plus (4) all other amounts due Landlord from Tenant
under the terms of this Lease, or necessary to compensate Landlord for all detriment caused by Tenant's failure to perform its
obligations under this Lease. The right to possession of the Premises by Tenant should not be deemed terminated until Landlord gives
Tenant written notice of such termination or until Landlord re-lets all or a portion of the Premises. Landlord shall be required to
mitigate damages by making a good faith effort to re-let the Premises.
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As used in subparagraphs (1) and (2) above, the "worth at the time of award" is computed by allowing interest at the legal
rate of ten percent (10%) per annum. As used in subparagraph (3) above, the "worth at the time of award" is computed by discounting
such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%).
(3)
No right or remedy herein conferred upon or reserved to Landlord is intended to be exclusive of any other right or
remedy herein or by law, provided that each shall be cumulative and in addition to every other right or remedy given herein or now
hereafter existing at law or in equity or by statute.
Section 13.2. Landlord shall in no event be in default in the performance of any of its obligations hereunder unless and
until Landlord shall have failed to perform such obligations within thirty (30) days or such additional times as is reasonably required
to correct any such default after notice by Tenant to the Landlord properly specifying wherein the Landlord has failed to perform any
such obligation.
ARTICLE 14 - Bankruptcy
Section 14.1. Tenant shall give written notice to Landlord of its intention to commence proceedings under any state or
federal insolvency or bankruptcy law, or any comparable law that is now or hereafter may be in effect, whereby Tenant seeks to be, or
would be, discharged of its debts or the payment of its debts is sought to be delayed, at least thirty (30) days prior to the
commencement of such proceedings.
Section 14.2.
If any of the following events occur:
(1)
The entry of an order for relief under Title 11 of the United States Code as to Tenant or its executors,
administrators or assigns, if any, or the adjudication of Tenant or its executors, administrators or assigns, if any, as insolvent or
bankrupt pursuant to the provisions of any state insolvency or bankruptcy act;
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(2)
The appointment of a receiver, trustee or other custodian of the property of Tenant by reason of the insolvency or
inability of Tenant to pay its debts;
(3)
The assignment of the property of Tenant for the benefit of creditors;
(4)
The commencement of any proceedings under any state or federal insolvency or bankruptcy law, or any
comparable law that is now or hereafter may be in effect, whereby Tenant seeks to be, or would be, discharged of its debts or the
payment of its debts is sought to be delayed;
(5)
The failure of Tenant to give written notice to Landlord provided for in Section 14.1. above;
then Landlord may, at any time thereafter, in addition to any and all other rights or remedies of Landlord under this Lease or
under applicable law, upon written notice to Tenant, terminate this Lease, and upon such notice this Lease shall cease and terminate
with the same force and effect as though the date set forth in said notice were the date originally set forth herein and fixed for the
expiration of the demised term. Tenant shall thereupon vacate and surrender the demised premises, but shall remain liable as herein
provided.
ARTICLE 15 - Surrender of Premises
Section 15.1. Tenant shall, upon termination of the demised term, or any earlier termination of this Lease, surrender to
Landlord the demised premises, including, without limitation, all building equipment and apparatus, and fixtures (except as provided
in Sections 12.1. and 12.2. ) then upon the demised premises without any damage, injury, or disturbance thereto, or payment therefor,
except damages due to ordinary wear and tear, acts of God, fire and other perils to the extent the demised premises are not required to
be repaired or restored as hereinbefore provided, and Tenant shall dispose of any hazardous materials stored, dispensed, handled or
used in, at or upon the demised premises in accordance with the provisions of Section 7.4 .
ARTICLE 16 - Eminent Domain
Section 16.1. If more than thirty-three percent (33%) of the floor area of the building on the demised premises shall be
taken under the power of eminent domain and the portion not so taken will not be reasonably adequate for the operation of Tenant's
business after the Landlord completes such repairs or alterations as the Landlord is obligated or elects to make, Tenant shall have the
right to elect either to terminate this Lease, or, subject to Landlord's right to terminate the Lease pursuant to Section 16.4 , to continue
in possession of the remainder of the demised premises and shall notify Landlord in writing within ten (10) days after such taking of
Tenant's election. In the event less than thirty-three percent (33%) of the floor area of the building on the demised premises shall be
taken or Tenant elects to remain in possession, as provided in the first sentence hereof, all of the terms herein provided shall continue
in effect, except that the base rent shall be reduced in the same proportion that the floor area of the building on the demised premises
taken bears to the original floor area of the building on the demised premises, and Landlord shall at its own cost and expense make all
necessary repairs or alterations to the building so as to constitute the portion of the building not taken a complete architectural unit and
the demised premises a complete unit for the purposes allowed by this Lease, but such work shall not exceed the scope of the work to
be done by Landlord in originally constructing said building. From and after the taking date, and during Landlord’s alteration and
repair work, rent shall proportionately abate to the extent any portion of the demised premises is rendered inaccessible or not usable by
Tenant as a result of such taking or Landlord’s alteration and repair work.
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Section 16.2. Each party waives the provisions of Code of Civil Procedure Section 1265.130 allowing either party to
petition the Superior Court to terminate this Lease in the event of a partial taking.
Section 16.3. All damages or awards for any taking under the power of eminent domain whether for the whole or a part of
the demised premises shall belong to and be the property of Landlord whether such damages or awards shall be awarded as
compensation for diminution in value to the leasehold or to the fee of the demised premises; provided however, that Landlord shall not
be entitled to the award made to Tenant or Landlord for loss of business, depreciation to, and cost or removal of stock and fixtures and
for leasehold improvements which have been installed by Tenant at its sole cost and expense less depreciation which is to be
computed on the basis of completely depreciating such leasehold improvements during the initial term of this Lease, and any award
made to Tenant in excess of the then depreciated value of leasehold improvements shall be payable to the Landlord.
Section 16.4. If more than thirty-three percent (33%) of the floor areas of the building on the demised premises shall be
taken under power of eminent domain, or if any part of the Parking and Accommodation Areas shall be so taken, Landlord may, by
written notice to Tenant delivered on or before the date of surrendering possession to the public authority pursuant to such taking,
terminate this Lease as of such date.
Section 16.5. If this Lease is terminated as provided in this Article, the rent shall be paid up to the day that possession is so
taken by public authority and Landlord shall make a prorata refund of any rent and all deposits paid by Tenant in advance and not yet
earned.
ARTICLE 17 - Real Property Taxes
Section 17.1. Tenant shall reimburse Landlord for all real property taxes, assessments and ongoing sewer fees applicable
to the demised premises. Taxes shall be prorated to lease years for purpose of making this computation. Such payment shall be made
by Tenant within thirty (30) days after receipt of Landlord's written statement setting forth the amount of such computation thereof. If
the demised term of this Lease shall not expire concurrently with the expiration date of the fiscal tax year, Tenant's liability for taxes
for the last partial lease year shall be prorated on an annual basis.
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Section 17.2. If the demised premises are not separately assessed, Tenant's liability shall be an equitable proportion of the
real property taxes for all of the land and improvements included within the tax parcel assessed, such proportion to be determined by
Landlord from the respective valuations assigned in the assessor's work sheets or such other information as may be reasonably
available. Landlord's reasonable determination thereof, in good faith, shall be conclusive.
Section 17.3. Tenant shall pay prior to delinquency all taxes assessed against and levied upon trade fixtures, furnishings,
equipment and all other personal property contained in the demised premises or elsewhere. Tenant shall cause said trade fixtures,
furnishings, equipment and all other personal property to be assessed and billed separately from the real property of Landlord.
If any of Tenant's said personal property shall be assessed with Landlord's real property, Tenant shall pay Landlord the taxes
attributable to Tenant within ten (10) days after receipt of a written statement setting forth the taxes applicable to Tenant's property.
Section 17.4. In addition to all other payments provided for herein, the Tenant shall on demand reimburse Landlord for any
surcharges, fees, and any similar charges required to be paid by any instrumentality of local, state or federal government in connection
with parking in the parking area, including policing; supervising with attendants; other costs in connection with providing charged
parking; repairs, replacements and maintenance not properly chargeable to capital account under good accounting principles; interest
and depreciation of the actual cost of modification or improvements to the areas, facilities and improvements maintained in this
Article either (i) required by any instrumentality of local, state or federal government, or (ii) installed by Landlord on account of
governmental requirements to facilitate payment of a parking charge by the general public for parking in the parking area, or both, and
other similar costs; and there shall be excluded (a) cost of construction of such improvements which is properly chargeable to capital
account and (b) depreciation of the original cost of construction of all items not previously mentioned in this sentence. If Landlord
shall on account of governmental requirements require the payment of a parking charge by the general public for parking in the
parking area, then during any period in which such a charge is made the total revenue (after deducting excise and similar taxes thereon
and taxes, fees or surcharges imposed by any agency or instrumentality of local, state or federal government) actually received in cash
or its equivalent by Landlord for such parking charge shall be credited against said gross costs.
Section 17.5. Notwithstanding the provisions of Article 17 hereinabove, Tenant shall pay any increase in "real property
taxes" resulting from any and all improvements of any kind whatsoever placed on or in the demised premises for the benefit of or at
the request of Tenant regardless of whether said improvements were installed or constructed either by Landlord or Tenant.
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Section 17.6. In addition to all other payments provided for herein, the Tenant shall on demand reimburse Landlord for
any tax (excluding income tax and state franchise fees) and/or business license fee or other levy that may be levied, assessed or
imposed upon the rent or other payments provided for herein or on the square footage of the demised premises, on the act of entering
into this Lease, or on the occupancy of the Tenant however described, as a direct substitution in whole or in part for, or in addition to,
any real property taxes, whether pursuant to laws presently existing or enacted in the future.
ARTICLE 18 - Parking and Accommodation Areas
Section 18.1. Subject to the provisions of Section 18.2, Landlord grants to Tenant during the demised term the exclusive
right to use the parking facilities and other areas provided and designated as "Parking and Accommodation Areas" on Exhibit "B"
hereto for the accommodation and parking of such automobiles of the Tenant, its officers, agents, employees and its invitees while
working or visiting Tenant. Landlord shall not be responsible to enforce such exclusive right to use all of the parking spaces in the
Parking and Accommodation Areas, and the use of any such parking spaces by persons other than Tenant or its employees,
contractors, agents and invitees shall not be deemed a breach by Landlord of any provision of this Lease. Tenant agrees that its
officers, agents and employees will park their automobiles only in the parking areas provided in the Parking and Accommodation
Areas, and Tenant specifically agrees that such officers, agents and employees will not park on any public streets in the vicinity of the
demised premises. Except as provided in Section 17.4. , Landlord shall not charge parking fees for such right to use parking
facilities.
Section 18.2. All parking areas and facilities furnished by Landlord including, but not limited to, pedestrian sidewalks,
landscaped areas and parking areas shall at all times be subject to the control and management of Landlord so that Landlord will be in
a position to make available efficient and convenient use thereof, and Landlord shall have the right from time to time to establish,
modify and enforce reasonable rules and regulations with respect to all facilities and areas mentioned in this Article, and Tenant
agrees to abide by and conform therewith. Landlord shall have the right to construct, maintain and operate lighting facilities on all of
said areas and improvements, to police the same, from time to time to change the area, location and arrangement of parking areas and
facilities, to restrict employee parking to employee parking areas, to construct surface, subterranean and/or elevated parking areas and
facilities, to establish and from time to time change the level of parking surfaces, to close (if necessary) all or any portion of said areas
or facilities to such extent as may in the opinion of Landlord's counsel be legally sufficient to prevent a dedication thereof or the
accrual of any rights of any person or of the public therein, and to do and perform such other acts in and to said areas and
improvements respectively as in the use of good business judgment the Landlord shall determine to be advisable with a view to the
improvement of the convenience and use thereof by Tenant, other lessees, and their respective employees and visitors.
Section 18.3. Tenant agrees during the demised term to pay to Landlord an annual charge which shall be Landlord's actual
gross costs of operating, maintaining and/or replacing all of the areas and facilities mentioned in this Article. The annual charge shall
be an estimate computed on the basis of periods of twelve (12) consecutive calendar months, commencing and ending on such dates as
may be designated by Landlord, and shall be paid in monthly installments on the first day of each calendar month in the amount
estimated by Landlord. Within ninety (90) days after the end of each such annual period, Landlord will determine (and furnish to
Tenant a statement showing in reasonable detail) the actual annual charge for such period and the amounts so estimated and paid
during such period shall be adjusted within such ninety (90) days (including adjustments on a prorata basis of any partial such period
at either end of the demised term) and one party shall pay to the other on demand whatever amount is necessary to effectuate such
adjustment.
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Landlord's said gross costs shall consist of and include all costs and expenses of every kind or nature incurred by Landlord
in the operation, maintenance and/or replacement of all of the areas, facilities and improvements mentioned in this Article determined
in accordance with good accounting practice by an accountant employed by Landlord. The determination of such accountant shall be
conclusive. Without otherwise limiting the generality of the foregoing, there shall be included in such gross costs public liability and
property damage insurance, landscape maintenance, maintenance of utilities, water, cleaning of areas, facilities and improvements,
operation of lighting, common area taxes and assessments determined in the same manner as taxes and assessments on the demised
premises, policing and sweeping of parking areas, supervising with attendants, repairs, replacements and maintenance, and an amount
equal to ten percent (10%) of the total of all of the above for administration of the Parking and Accommodation Areas.
Section 18.4. The Parking and Accommodation Areas included for the purpose of this Article are those shown on Exhibit
"B" outside of the building area.
ARTICLE 19 - Miscellaneous
Section 19.1. Landlord and its designee shall have the right during reasonable business hours to enter the demised
premises except restricted areas as established by or on behalf of the Federal Government for security purposes (and in emergencies at
all times), (i) to inspect the same, (ii) for any purpose connected with Landlord's rights or obligations under this Lease and, (iii) for all
other lawful purposes.
Section 19.2. Tenant shall not be entitled to make repairs at Landlord's expense, and Tenant waives the provisions of Civil
Code Sections 1941 and 1942 with respect to Landlord's obligations for tenantability of the demised premises and Tenant's right to
make repairs and deduct the expenses of such repairs from rent.
Section 19.3. This Lease shall be governed exclusively by the provisions hereof and by the laws of the State of California
as the same from time to time exist. This Lease expresses the entire understanding and all agreements of the parties hereto with each
other and neither party hereto has made or shall be bound by any agreement or any representation to the other party which is not
expressly set forth in this Lease. If any provision of this Lease shall be invalid, unenforceable or ineffective for any reason
whatsoever, all other provisions hereof shall be and remain in full force and effect.
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Section 19.4. If Tenant should hold over after the demised term and any extension thereof as herein provided for, then
such holding over shall be construed as a tenancy from month to month at a rent double that provided for under the monthly rental of
the principal term of this Lease.
Section 19.5.
sanitary condition.
Tenant agrees to maintain all toilet and washroom facilities within the demised premises in a neat, clean and
Section 19.6. Landlord covenants and agrees that Tenant, subject to the terms and provisions of this Lease, on paying the
rent and observing, keeping and performing all of the terms and provisions of this Lease on its part to be observed, kept and
performed, shall lawfully, peaceably and quietly have, hold, occupy and enjoy the demised premises during the demised term without
hindrance or ejection by any person lawfully claiming under or against the Landlord.
Section 19.7. Subject to Article 6, the terms and provisions hereof shall be construed as running with the land and shall be
binding upon and inure to the benefit of heirs, executors, administrators, successors and assigns of Landlord and Tenant.
Section 19.8.
A.
Tenant shall promptly pay all sums of money with respect to any labor, services, materials, supplies or equipment
furnished or alleged to have been furnished to Tenant in, at or about the demised premises, or furnished to Tenant's agents, employees,
contractors or subcontractors, that may be secured by any mechanic's, materialmen's, supplier's or other liens against the demised
premises or Landlord's interest therein. In the event any such or similar liens shall be filed, Tenant shall, within three (3) days of
receipt thereof, give notice to Landlord of such lien, and Tenant shall, within ten (10) days after receiving notice of the filing of the
lien, discharge such lien by payment of the amount due to the lien claimant. However, Tenant may in good faith contest such lien
provided that within such ten (10) day period Tenant provides Landlord with a surety bond from a company acceptable to Landlord,
protecting against said lien in an amount at least one and one-half (1-1/2) times the amount claimed or secured as a lien or such greater
amount as may be required by applicable law; and provided further that Tenant, if it should decide to contest such lien, shall agree to
indemnify, defend and save harmless Landlord from and against all costs arising from or in connection with any proceeding with
respect to such lien. Failure of Tenant to discharge the lien, or, if contested, to provide such bond and indemnification, shall constitute
a default under this Lease and in, addition to any other right or remedy of Landlord, Landlord may, but shall not be obligated, to
discharge or secure the release of any lien by paying the amount claimed to be due, and the amount so paid by Landlord, and all costs
and expenses incurred by Landlord therewith, including, but not limited to, court costs and reasonable attorneys' fees, shall be due and
payable by Tenant to Landlord forthwith on demand.
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B.
At least fifteen (15) days before the commencement by Tenant of any material construction or remodeling work
on the demised premises, Tenant shall give written notice thereof to Landlord. Landlord shall have the right to post and maintain on
the demised premises such Notices of Non-Responsibility, or similar notices, provided for under applicable laws.
Section 19.9.
A.
Tenant shall deposit with Landlord the sum specified in Section 2.4.(B) hereof as a "Security Deposit". The
Security Deposit shall be held by Landlord as security for the faithful performance of all the terms of this Lease to be observed and
performed by Tenant. The Security Deposit shall not be mortgaged, assigned, transferred or encumbered by Tenant without the
written consent of Landlord and any such act on the part of Tenant shall be without force and effect and shall not be binding upon
Landlord.
B.
If any of the rents herein reserved or any other sum payable by Tenant to Landlord shall be overdue and unpaid,
or should Landlord make payments on behalf of Tenant, or should Tenant fail to perform any of the terms of this Lease, then Landlord
may, at its option and without prejudice to any other remedy which Landlord may have on account thereof, apply the entire Security
Deposit, or so much thereof as may be necessary, to compensate Landlord toward the payment of rent or additional rent, loss, or
damage sustained by Landlord due to such breach on the part of Tenant, and Tenant shall forthwith upon demand restore said Security
Deposit to the original sum deposited. Should Tenant comply with all of said terms and promptly pay all of the rent and all other sums
payable by Tenant to Landlord, said Security Deposit shall be returned in full to Tenant at the end of the demised term.
C.
In the event of bankruptcy or other similar proceedings listed in Article 14 hereof, the Security Deposit shall be
deemed to be applied first to the payment of rent and other charges due Landlord for all periods prior to the filing of such proceedings.
D.
In the event Landlord delivers the Security Deposit to the purchaser of Landlord's interest in the demised
premises, Landlord, after written notice to Tenant of said delivery, shall be discharged from any further liability with respect to the
Security Deposit. This provision shall also apply to any subsequent transferees.
Section 19.10. All notices, statements, demands, requests, consents, approvals, authorizations, offers, agreements,
appointments or designations hereunder by either party to the other shall be in writing and shall be sufficiently given and served upon
the other party if sent by United States certified mail, return receipt requested, postage prepaid, or overnight courier (provided a
receipt is given), and addressed as follows:
If sent by mail to Tenant, the same shall be addressed to the Tenant at 230 Constitution Drive, Menlo Park,
California 94025 , or at such other place as Tenant may from time to time designate by notice to Landlord.
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If sent by mail to Landlord, the same shall be addressed to Landlord at Sixty 31 st Avenue, San Mateo,
California 94403-3497 , or at such other place as Landlord may from time to time designate by notice to Tenant.
Any such notice when sent by certified mail as above provided shall be deemed duly served on the third business day
following the date of such mailing. Any such notice when sent by overnight courier as above provided shall be deemed duly served
on the first business day following the date of such mailing.
Section 19.11. As used in this Lease and when required by the context, each number (singular or plural) shall include all
numbers, and each gender shall include all genders; and unless the context otherwise requires, the word "person" shall include
corporation, firm or association.
Section 19.12. In case of litigation with respect to the mutual rights, obligations, or duties of the parties hereunder, the
prevailing party shall be entitled to reimbursement from the other party of all costs and reasonable attorneys' fees actually incurred.
Section 19.13. Each term and each provision of this instrument performable by Tenant shall be construed to be both a
covenant and a condition.
Section 19.14. Except as otherwise expressly stated, each payment provided herein to be made by Tenant to Landlord shall
be in addition to and not in substitution for the other payments to be made by Tenant to Landlord.
Section 19.15.Time is and shall be of the essence of this Lease and all of the terms, provisions, covenants and conditions
hereof.
Section 19.16. The Tenant warrants that it has not had any dealings with any realtor, broker, or agent in connection with the
negotiation of this Lease. Each party agrees to hold the other harmless from any cost, expense or liability for any compensation,
commissions or charges claimed by any realtor, broker, or agent with respect to this Lease and/or the negotiation thereof with whom
the other party has or purportedly has dealt.
Section 19.17.Tenant agrees that its interest in this Lease shall be subordinate to any mortgage, deed of trust and/or other
security indenture hereafter placed upon the demised premises and to any and all advances made or to be made thereunder and to the
interest thereon made and all renewals, replacements, and extensions thereof, but nothing herein contained shall be deemed to alter or
limit Tenant's rights as set forth in Section 19.6. Tenant shall, at the request of Landlord or any mortgagee, trustee or holder of any
such security instrument, execute in writing an agreement subordinating its rights under this Lease to the lien of such mortgage, deed
of trust and/or other security indenture. If any mortgagee, trustee or holder of such security instrument elects to have the Tenant's
interest in this Lease superior to any such instrument by notice to Tenant, then this Lease should be deemed superior to the lien of any
such mortgage, deed of trust or security indenture whether this Lease was executed before or after said mortgage, deed of trust and/or
security indenture.
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Section 19.18. Landlord reserves the right during the last six months of the demised term of this Lease or the last six months
of any extension hereof to enter the property during normal working hours for the purpose of showing the demised premises (except
restricted areas established by, or on behalf of, the Federal Government for security purposes) to prospective tenants or purchasers and
to place signs (for the last year) on the demised premises advertising the property for lease or sale.
Section 19.19. The following terms as used in this Lease shall have the following meaning:
(a)
"Unavoidable Delay" means any prevention, delay or stoppage due to strike(s), lockout(s), labor dispute(s), act(s)
of God, inability to obtain labor or materials or reasonable substitutes therefor, governmental restrictions, governmental regulations,
governmental controls, enemy or hostile governmental action, civil commotion, fire or other casualty, and other conditions or causes
beyond the reasonable control of the party obligated to perform.
Section 19.20. Tenant shall at any time during the demised term, within ten (10) days after written notice from Landlord,
execute, acknowledge and deliver to Landlord or, at Landlord's request, Landlord's mortgagee, an estoppel certificate in writing (i)
certifying that this Lease is unmodified and in full force and effect (or, if modified, stating the nature of such modification and
certifying that this Lease, as so modified, is in full force and effect) and the date to which the rent and other charges are paid in
advance, if any, (ii) acknowledging that there are not, to Tenant's knowledge, any uncured defaults on the part of Landlord hereunder,
or specifying such defaults, if any, are claimed, and (iii) ratifying and certifying any such other matters as may reasonably be
requested. Any such certificate may be conclusively relied upon by any prospective purchaser or encumbrancer of the demised
premises. Tenant's failure to deliver such certificate within such time shall be conclusive upon Tenant that this Lease is in full force
and effect, without modification except as may be represented by Landlord; that there are no uncured defaults in Landlord's
performance, and that not more than one month's rent has been paid in advance.
IN WITNESS WHEREOF, the parties have executed this instrument.
TENANT:
BIOTIME,
a California corporation
LANDLORD:
DAVID D. BOHANNON ORGANIZATION,
a California corporation
By:
s/Michael D. West
President
By:
s/Scott Bohannon
Senior Vice President
By:
s/Judith Segall
Secretary
By:
s/Ernest Lotti, Jr.
Secretary
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EXHIBIT “A”
BOHANNON PARK
230 CONSTITUTION DRIVE
MENLO PARK, CALIFORNIA
DESCRIPTION OF DEMISED PREMISES
FOR
“BIOTIME”
Commencing at the most easterly corner of Parcel 2, as said parcel is shown on a map entitled “Parcel Map, being a resubdivision of
Lots 36, 37, 38, 39 and 40 of Bohannon Industrial Park Unit No.7 (Vol.60 of Maps, Page 10), Menlo Park, San Mateo County,
California,” which map was filed in the office of the County Recorder of San Mateo County, State of California, on October 2, 1973,
in Volume 22 of Parcel Maps at Page 26, more particularly described as follows:
Thence from said corner of commencement South 6717’ East 47.00 feet and South 2243’ West 20.00 feet;
THENCE
“
“
AND
SOUTH
SOUTH
NORTH
NORTH
67º17’ EAST 172.00 FEET;
22 º 43’ WEST 140.00 FEET;
67 º 17’ WEST 172.00 FEET;
22 º 43’ EAST 140.00 FEET
to the point of beginning.
Containing approximately 24,080 square feet.
EXHIBIT 10.4
SHARED FACILITIES AND SERVICES AGREEMENT
This Agreement is made as of April 1, 2013 (the Effective Date) by and between BioTime, Inc. (BioTime) and Asterias
Biotherapeutics, Inc. ( Asterias ).
Recitals
A.
Asterias is a newly organized corporation that needs office and laboratory space and equipment, and the services of research,
financial, management, and administrative personnel support;
B.
BioTime subleases certain laboratory, office, and related work space at 1301 Harbor Bay Parkway, Suite 100, Alameda,
California (the Premises ) and has surplus capacity at the Premises;
C.
BioTime has employees and contractors who provide research, financial, management, and administrative services and is
willing to make a portion of their services available to Asterias;
D.
Asterias subleases certain laboratory, office, and related work space at 230 Constitution Drive, Menlo Park, California (the
Asterias Premises ) and may have surplus capacity at the Asterias Premises.
1.
Office, Laboratory and Work Space.
(a)
BioTime agrees to permit Asterias to use the Premises concurrently with BioTime for the conduct of
Asterias’s business operations, but only to the extent that (a) the use is a business operation permitted to be conducted by BioTime
under the sublease of the Premises, (b) Asterias uses the Premises in compliance with all applicable laws, ordinances, and regulations,
(c) Asterias uses the Premises in compliance with any and all rules and regulations of the sublandlord and master lease landlord under
BioTime’s sublease of the Premises, (d) Asterias’s use of the Premises does not interfere with BioTime’s use of the Premises.
(b)
BioTime and Asterias agree that the permission to use the Premises granted under this Agreement is in
the nature of a license only and is not a sublease or assignment of the sublease under which BioTime occupies the Premises, and that
Asterias shall not obtain any rights, and is not assuming any obligations, under that sublease.
(c)
The use of the Premises by Asterias shall be in a lawful, careful, safe, and proper manner, and Asterias
shall not do or permit anything to be done in or about the Premises that would increase the rate or affect any fire or other insurance
covering the Premises. Asterias shall not commit nor suffer any waste on the Premises.
(d)
BioTime does not represent or warrant that the Premises may be used for any particular use or purpose,
and Asterias has made Asterias’s own determination that the Premises may be lawfully used for Asterias’s purposes.
(e)
Asterias shall, at its sole cost and expense, comply with all laws, statutes, ordinances, and governmental
rules, regulations, or requirements now in force or that may hereafter be in force, and with the requirements of any board of fire
insurance underwriters or other similar bodies now or hereafter constituted, relating to, or affecting Asterias’s use of the Premises.
(f)
Asterias shall, at its sole cost and expense, promptly repair any damage to the Premises caused by any
act or omission of Asterias or its employees, agents, invitees, licenses, or contractors, including any acts or omissions of BioTime
employees, contractors, and agents arising in the course of performing services for or conducting the business of Asterias. Any and all
repairs effected by Asterias shall be performed in a professional workmanlike manner, by licensed contractors, in compliance with all
applicable statutes, codes, rules and regulations, and Asterias or Asterias’s contractors shall obtain all permits and approvals of
government agencies required by applicable laws in connection therewith.
(g)
BioTime deems any repairs required to be made by Asterias necessary, it may demand that Asterias
make them, and if Asterias refuses or neglects to commence such repairs and to complete them with reasonable dispatch, BioTime
may make or cause such repairs to be made. If BioTime makes or causes repairs to be made, BioTime shall not be responsible to
Asterias for any loss or damage that may accrue to Asterias’s business by reason of the repair work, and Asterias shall, on demand,
immediately pay to BioTime the cost of the repairs. Asterias waives the provisions of Sections 1941 and 1942 of the Civil Code of the
State of California and all other statutes or laws permitting repairs by a lessee at the expense of a lessor or to terminate a lease by
reason of the condition of the Premises. Asterias shall keep the Premises free from any liens arising out of any work performed,
materials furnished, or obligations incurred by Asterias.
(h)
Asterias shall not make or install any alterations, improvements, additions, or fixtures that affect the
exterior or interior of the Premises or any structural, mechanical, or electrical component of the Premises, or mark, paint, drill, or in
any way deface any floors, walls, ceilings, partitions, or any wood, stone, or iron work.
(i)
Under no circumstances shall Asterias bring onto the Premises any substances or materials that are
characterized or defined as “hazardous substances” or “hazardous materials” under any federal or state law or regulation pertaining to
the release of substances into the environment, except for cleaning materials, paints, and solvents that are used, stored, and disposed of
by Asterias in full compliance with applicable laws.
2.
Equipment and Supplies. BioTime agrees to permit Asterias to use BioTime’s office equipment, laboratory
equipment, furniture, laboratory supplies, and general office supplies to the extent that such use does not interfere with the use by the
employees, contractors, and agents of BioTime and other BioTime subsidiaries in the course of their business. BioTime shall have no
obligation to obtain or to provide Asterias with any additional equipment, furniture, or supplies. If Asterias requires and obtains
equipment, furniture, and supplies for its own use it may locate the same at the Premises subject to the conditions and limitations
stated in Section 1 of this Agreement, and subject to the additional condition that BioTime shall have the right and sole discretion to
(a) determine where in the Premises Asterias may locate Asterias’s furniture, equipment, and supplies, and (b) preclude Asterias from
bringing onto or locating any furniture, supplies, or equipment in the Premises if BioTime determines that it would in any way
interfere with BioTime’s use of the Premises, violate any applicable laws, ordinances, and regulations, violate or conflict with any
provisions of BioTime’s sublease of the Premises or any rules and regulations of the sublandlord or master landlord under BioTime’s
sublease of the Premises, conflict with any term or condition of any policy of casualty or liability insurance held by BioTime, or pose
a hazard or other risk to persons or property.
3.
Utilities. Asterias shall be responsible to determine that there is sufficient Utilities capacity in the Premises for
purposes of conducting Asterias’s use. Utilities includes electricity, gas, heat, air conditioning, hot and cold domestic water,
telephone, scavenger service, garbage removal, sewerage, and other similar services used on, in, or in connection with the
Premises. BioTime does not represent the availability or quantity of any Utilities in the Premises, and is not responsible for any
interruption of any Utility service.
4.
Services.
(a)
BioTime shall provide basic accounting, billing, bookkeeping, payroll, treasury, collection of accounts
receivable (excluding the institution of legal proceedings or taking of any other action to collect accounts receivable), payment of
accounts payable, and other similar administrative services (the Administrative Services ) to Asterias. BioTime may also provide
the services of attorneys, accountants, and other professionals who may also provide professional services to BioTime and its other
subsidiaries.
(b)
BioTime shall also provide Asterias with the services of its laboratory and research personnel (the
Laboratory Services ), including BioTime employees and contractors, for the performance of research and development work for
Asterias at the Premises. BioTime employees and contractors who perform Laboratory Services for Asterias shall enter into
agreements containing customary provisions requiring the employees and contractors to (a) maintain the confidentiality and not to
disclose Asterias trade secrets and other confidential information, and (b) assign to Asterias all rights to any inventions and discoveries
made by such employees and contractors in the course of performing Laboratory Services for Asterias.
(c)
BioTime may, at the request of Asterias, provide Asterias the services of BioTime employees and
contractors, including but not limited to executive officers, for matters other than Administrative Services and Laboratory Services (
Other Services ), but BioTime shall not be obligated to do so.
(d)
Administrative Services, Laboratory Services, and Other Services (collectively, Services) shall be
provided by BioTime employees or contractors engaged by BioTime to provide such Services for the operation of BioTime’s own
business. BioTime shall not be obligated to hire any additional employees or engage the services of any additional contractors to
provide Services to Asterias. Nothing in this Agreement shall preclude Asterias from hiring employees and engaging contractors
directly for its own account and at its own cost and expense.
(e)
Asterias shall be responsible for cooperating with BioTime’s employees and contractors in such a
manner as may be reasonably required in order for the Services to be performed.
(f)
The Services shall be provided at the direction of Asterias; provided, that Asterias shall not request or
direct any BioTime employee or contractor to provide any Services or to take any other act that would violate any federal, state, or
municipal law, statute, ordinance, rule or regulation.
(g)
BioTime shall not be liable to Asterias for any loss or damages of any kind caused by, arising from, or
in connection with (i) the performance of Services performed by BioTime personnel, or the failure of any BioTime employee,
contractor, or agent to perform any Services, or (ii) any delay, error, or omission by any BioTime employee, contractor, or agent in the
performance of Services performed by BioTime personnel, except to the extent such loss or damage is the result of fraud, gross
negligence or willful misconduct by an BioTime employee, contractor, or agent.
5.
Use Fees.
(a)
Asterias shall pay BioTime the fees provided in this Section for the use of the Premises, equipment,
supplies, professional services (such as the services of attorneys, accountants, and consultants), and for the Services provided or
agreed to be provided by BioTime under this Agreement. For each billing period, BioTime shall equitably prorate and allocate its
Employee Costs, Equipment Costs, Insurance Costs, Lease Costs, Professional Costs, Software Costs, Supply Costs, and Utilities
Costs, between BioTime and Asterias based upon actual documented use and cost by or for Asterias or upon proportionate usage by
BioTime and Asterias, as reasonably estimated by BioTime. Asterias shall pay 105% of the allocated costs (the Use Fee ). The
allocated cost of BioTime employees and contractors who provide Services shall be based upon records maintained of the number of
hours of such personnel devoted to the performance of Services.
(b)
The Use Fee shall be determined and invoiced to Asterias on a quarterly basis for each calendar quarter
of each calendar year (such quarterly periods are sometimes referred to in this Agreement as “billing periods”). If this Agreement
terminates prior to the last day of a billing period, the Use Fee shall be determined for the number of days in the billing period elapsed
prior to the termination of this Agreement. Each invoice shall be payable in full by Asterias within 30 days after receipt. Any invoice
or portion thereof not paid in full when due shall bear interest at the rate of 15% per annum until paid, unless the failure to make a
payment is due to any inaction or delay in making a payment by BioTime employees from Asterias funds available for such purpose,
rather than from the unavailability of sufficient funds legally available for payment or from an act, omission, or delay by any Asterias
employee or agent.
(c)
In addition to the Use Fees, Asterias shall reimburse BioTime for any out of pocket costs incurred by
BioTime for the purchase of office supplies, laboratory supplies, and other goods and materials and services for the account or use of
Asterias, provided that invoices documenting such costs are delivered to Asterias with each invoice for the Use Fee. Notwithstanding
this paragraph, BioTime shall have no obligation to purchase or acquire any office supplies or other goods and materials or any
services for Asterias, and if any such supplies, goods, materials or services are obtained for Asterias, BioTime may arrange for the
suppliers thereof to invoice Asterias directly.
(d)
Employee Costs means the salaries, wages, health insurance benefits, FICA, payroll taxes, workers
compensation insurance premiums, and similar costs payable by BioTime to or on account of its employees and contractors who
perform Services for Asterias under this Agreement during an applicable billing period, but excluding stock option, stock purchase,
and similar equity participation plans. Equipment Costs means all costs and expenses incurred by BioTime in acquiring, leasing,
installing, maintaining, insuring, repairing, and disposing of any laboratory, production, and office equipment, fixtures, and
furnishings used by Asterias or used by BioTime in the performance of Services. Insurance Costs means all insurance premiums
of any kind incurred or paid by BioTime for casualty insurance policies that insure BioTime and its subsidiaries, including Asterias,
from the loss of or damage to the Premises, equipment, fixtures goods, supplies, and other personal property of BioTime (except to the
extent such premiums are included in Lease Costs) that may be used by Asterias or by BioTime in the performance of Services, and
liability coverage policies that insure BioTime and its subsidiaries, including Asterias, from liability of any kind to third parties
(except to the extent such premiums are included in Lease Costs). Lease Costs means all of BioTime’s costs and expenses of
leasing or subleasing the Premises, including all base rent, taxes, common area or other expenses, insurance and other costs payable by
BioTime to the lessor of the Premises under the sublease of the Premises, but excluding (a) any repairs not required to be effected or
paid for by Asterias under any other provision of this Agreement, and (b) any alterations or improvements effected by BioTime for the
exclusive use of BioTime and its subsidiaries other than Asterias. Professional Costs means all costs and expenses incurred by
BioTime for the services of independent accountants, attorneys, and other consultants who provide professional or consulting services
for the benefit of Asterias. Software Costs means all costs and expenses, including but not limited to license fees, incurred by
BioTime to acquire and use any computer software or program of any kind that is used by Asterias or by BioTime in the performance
of Services. Supply Costs means all costs and expenses incurred by BioTime for the purchase and disposal of goods and materials
of any kind, to the extent used in the performance of Services or used by Asterias employees or contractors. Utilities Costs means all
costs and expenses incurred by BioTime for the use or availability of Utilities during an applicable billing period.
6.
Reciprocal Rights and Obligations.
(a)
Asterias may provide BioTime or any Other Subsidiary with the use of the Asterias Premises form time
to time as the parties may mutually agree. “ Other Subsidiary ” means a subsidiary of BioTime other than Asterias and other than a
subsidiary of Asterias. The provisions of Section 1 of this Agreement shall apply to the use of the Asterias Premises by BioTime or an
Other Subsidiary as if (i) all references in Section 1 to the Premises were references to the Asterias Premises, (ii) all references in
Section 1 to Asterias were references to BioTime or an Other Subsidiary that uses the Asterias Premises, and (iii) all references to
BioTime in Section 1 were references to Asterias.
(b)
Asterias agrees to permit BioTime and Other Subsidiaries to use Asterias’s office equipment, laboratory
equipment, furniture, laboratory supplies, and general office supplies to the extent that such use does not interfere with the use by the
employees, contractors, and agents of Asterias or Asterias subsidiaries in the course of their business. In the case of such use, (i) the
provisions of Section 2 of this Agreement shall apply as if all references in Section 2 to Asterias were references to BioTime or an
Other Subsidiary, and (ii) all references to BioTime in Section 2 were references to Asterias.
(c)
Asterias agrees to provide BioTime and Other Subsidiaries with Laboratory Services at the Asterias
Premises subject to the same terms and conditions as BioTime agrees to provide Laboratory Services to Asterias at the
Premises. With respect to any Laboratory Services provided by Asterias to BioTime or an Other Subsidiary, the provisions of Section
4 of this Agreement shall apply as if all references to Asterias were references to BioTime and all references to BioTime were
references to Asterias.
(d)
If Asterias provides BioTime or an Other Subsidiary with the use of the Asterias Premises, the use of
Asterias’s office equipment, laboratory equipment, furniture, laboratory supplies, and general office supplies, or Laboratory Services
under this Agreement, the Use Fees provisions of Section 5 of this Agreement shall apply to such use and Asterias shall be paid Use
Fees as if all references to Asterias were references to BioTime or an Other Subsidiary and all references to BioTime were references
to Asterias.
7.
Indemnification.
(a)
Asterias shall defend, indemnify, and hold harmless BioTime, BioTime’s shareholders, directors,
officers, employees, and agents (collectively, the Indemnified Parties ) against and from any and all claims arising from Asterias’s
use of the Premises, or from any activity, work, or other thing done or permitted by Asterias on the Premises, including all activities,
work, and services performed by BioTime employees, contractors, and agents for Asterias. Asterias shall further defend, indemnify,
and hold harmless the Indemnified Parties against and from any and all claims arising from any breach or default in the performance
of any obligation on Asterias’s part to be performed under the terms of this Agreement, or arising from any act or omission (including,
but not limited to negligent acts or omissions) of Asterias, or of any officer, agent, employee, contractor, guest, or invitee of Asterias
acting in such capacity.
The indemnity provided by this section shall include indemnification from and against all costs, attorneys’
fees, expenses, and liabilities incurred in connection with or arising from any such claim or any action or proceeding brought thereon;
and in any suit, action, or proceeding brought against any of the Indemnified Parties by reason of any such claim, Asterias, upon
notice from any of the Indemnified Parties, shall defend the same at Asterias’s expense by counsel satisfactory to the Indemnified
Parties. Asterias, as a material part of the consideration to BioTime, hereby assumes all risk of damage to property or injury to
persons in, upon, or about the Premises, from any cause other than BioTime’s willful malfeasance or sole gross negligence.
(b)
BioTime shall not be liable for any injury to or damage to persons or property resulting from fire,
explosion, falling plaster, steam, gas, electricity, water, or rain that may leak from any part of the Premises or from the pipes,
appliances, or plumbing works therein or from the roof, street, or subsurface, or from any other place unless solely caused by or solely
due to the gross negligence of BioTime. BioTime and its agents and the other Indemnified Parties shall not be liable for interference
with the light or other incorporeal hereditament, loss of business by Asterias, or any latent defect in the Premises, any equipment,
furnishings, materials, or supplies. Asterias shall give prompt notice to BioTime in case of fire or accidents in the Premises or of
defects therein or in the fixtures, equipment, furniture, materials or supplies belonging to BioTime and used by Asterias.
(c)
Asterias shall be solely responsible for and shall indemnify, defend, and hold the Indemnified Parties
and the owner of the Premises and each partner, shareholder, member, trustee, employee and agent of the owner or the Premises
(collectively, the Owner Indemnified Parties ) harmless from any against any claim, loss, damage, cost, expense, liability, or cause
of action directly or indirectly arising out of the use, generation, manufacture, storage, treatment, release, threatened release,
discharge, disposal, transportation, or presence of any oil, gasoline, petroleum products, flammable explosives, asbestos, urea
formaldehyde insulation, radioactive materials, hazardous wastes, toxic or contaminated substances, or similar materials, including,
without limitation, any substances which are hazardous substances, hazardous wastes, hazardous materials, or toxic substances under
applicable environmental laws, ordinances, or regulations (collectively, Hazardous Materials ) caused directly or indirectly by
Asterias, its employees, agents, contractors, invitees, or assigns (other than any BioTime employees or agents performing BioTime
rather than Asterias business) in, on, or under any of the Premises, including, without limitation: (i) all consequential damages; (ii) the
costs of any required or necessary repair, cleanup, or detoxification of the Premises and the building and surrounding land in which
the Premises are located, and the preparation and implementation of any closure, remedial, or other required plans whether required
under any Hazardous Materials Laws or otherwise; and (iii) all court costs, including reasonable attorneys’ fees, paid or incurred by
BioTime, any other Indemnified Party, or any Owner Indemnified Party in connection with such claim.
(d)
BioTime shall defend, indemnify, and hold harmless Asterias, Asterias’s shareholders (other than
BioTime), directors, officers, employees, and agents (collectively, the Asterias Indemnified Parties) against and from any and all
claims arising from the use of the Asterias Premises by BioTime or an Other Subsidiary, or from any activity, work, or other thing
done or permitted by BioTime or an Other Subsidiary on the Asterias Premises, including all activities, work, and services performed
by Asterias employees, contractors, and agents for BioTime or an Other Subsidiary. BioTime shall further defend, indemnify, and
hold harmless the Asterias Indemnified Parties against and from any and all claims arising from any breach or default in the
performance of any obligation on BioTime’s part to be performed under the terms of this Agreement, or arising from any act or
omission (including, but not limited to negligent acts or omissions) of BioTime or an Other Subsidiary, or of any officer, agent,
employee, contractor, guest, or invitee of BioTime or an Other Subsidiary acting in such capacity. The indemnity provided by this
section shall include indemnification from and against all costs, attorneys’ fees, expenses, and liabilities incurred in connection with or
arising from any such claim or any action or proceeding brought thereon; and in any suit, action, or proceeding brought against any of
the Asterias Indemnified Parties by reason of any such claim, BioTime, upon notice from any of the Asterias Indemnified Parties,
shall defend the same at BioTime’s expense by counsel satisfactory to the Asterias Indemnified Parties. BioTime, as a material part of
the consideration to Asterias, hereby assumes all risk of damage to property or injury to persons in, upon, or about the Asterias
Premises, from any cause other than Asterias’s willful malfeasance or sole gross negligence.
(e)
Asterias shall not be liable for any injury to or damage to persons or property resulting from fire,
explosion, falling plaster, steam, gas, electricity, water, or rain that may leak from any part of the Asterias Premises or from the pipes,
appliances, or plumbing works therein or from the roof, street, or subsurface, or from any other place unless solely caused by or solely
due to the gross negligence of Asterias. Asterias and its agents and the other Asterias Indemnified Parties shall not be liable for
interference with the light or other incorporeal hereditament, loss of business by BioTime, or any latent defect in the Asterias
Premises, any equipment, furnishings, materials, or supplies. BioTime shall give prompt notice to Asterias in case of fire or accidents
in the Asterias Premises or of defects therein or in the fixtures, equipment, furniture, materials or supplies belonging to Asterias and
used by BioTime.
(f)
BioTime shall be solely responsible for and shall indemnify, defend, and hold the Asterias Indemnified
Parties and the owner of the Asterias Premises and each partner, shareholder, member, trustee, employee and agent of the owner or the
Asterias Premises (collectively, the Owner Asterias Indemnified Parties) harmless from any against any claim, loss, damage, cost,
expense, liability, or cause of action directly or indirectly arising out of the use, generation, manufacture, storage, treatment, release,
threatened release, discharge, disposal, transportation, or presence of any oil, gasoline, petroleum products, flammable explosives,
asbestos, urea formaldehyde insulation, radioactive materials, hazardous wastes, toxic or contaminated substances, or similar
materials, including, without limitation, any substances which are hazardous substances, hazardous wastes, hazardous materials, or
toxic substances under applicable environmental laws, ordinances, or regulations (collectively, Hazardous Materials) caused directly
or indirectly by BioTime or an Other Subsidiary, or the employees, agents, contractors, invitees, or assigns of BioTime or an Other
Subsidiary (other than any Asterias employees or agents performing Asterias rather than BioTime business) in, on, or under any of the
Asterias Premises, including, without limitation: (i) all consequential damages; (ii) the costs of any required or necessary repair,
cleanup, or detoxification of the Asterias Premises and the building and surrounding land in which the Asterias Premises are
located, and the preparation and implementation of any closure, remedial, or other required plans whether required under any
Hazardous Materials Laws or otherwise; and (iii) all court costs, including reasonable attorneys’ fees, paid or incurred by Asterias, any
other Indemnified Party, or any Owner Indemnified Party in connection with such claim.
8.
Term; Termination.
(a)
This Agreement shall commence on the Effective Date and shall terminate on December 31, 2016,
provided that, unless otherwise terminated under another provision of this Agreement, the term of this Agreement shall automatically
be renewed and the termination date shall be extended for an additional year each year after December 31, 2016, unless either party
gives the other party written notice stating that this Agreement shall terminate on December 31 of that year.
(b)
Notwithstanding paragraph (a) of this Section 8, either party may terminate this Agreement
immediately upon the occurrence of a Default by the other party. A party shall be in Default if that party (i) fails to pay when due
the Use Fee or any other sum due under this Agreement, or fails to perform any other obligation under this Agreement, and such
failure continues for a period of 5 days after written notice from the party seeking to terminate this Agreement; (ii) becomes the
subject of any order for relief in a proceeding under any Debtor Relief Law (as defined below); (iii) becomes unable to pay, or admits
in writing the party’s inability to pay, its debts as they mature; (iv) makes an assignment for the benefit of creditors; (v) applies for or
consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitation, or similar officer for the party or
for all or any part of the party’s property or assets, or any such officer is appointed for such party or any part of its assets without the
party’s consent and such appointment is not dismissed or discharged within 60 calendar days; (vi) institutes or consents to any
proceeding under any Debtor Relief Law with respect to the party or all or any part of the party’s property or assets, (vii) becomes
subject to any proceeding under any Debtor Relief Law without the consent of the party if such case or proceeding continues
undismissed or unstayed for 60 calendar days; or (viii) dissolves or liquidates or takes any action to dissolve or liquidate. As used in
this Agreement, the term Debtor Relief Law shall mean the Bankruptcy Code of the United States of America, as amended, or any
other similar debtor relief law affecting the rights of creditors generally.
(c)
The obligations of Asterias under Sections 5 and 6 and to pay for any repairs of the Premises required to
be paid by Asterias under this Agreement shall survive termination of this Agreement.
9.
No Third Party Beneficiaries. The parties to this Agreement are BioTime and Asterias, and no other person or
entity, whether a partner, member, shareholder, officer, director, employee, contractor, agent, or business invitee of Asterias or
otherwise, shall have any rights or be entitled to any benefits under this Agreement, except for the rights of Indemnified Parties and
Owner Indemnified Parties under Section 7.
10.
Characterization of Relationship. It is the intent of the parties that the business relationship created by this
Agreement, and any related documents is solely that of a commercial agreement between BioTime and Asterias and has been entered
into by both parties in reliance upon the economic and legal bargains contained in this Agreement. None of the covenants contained
in this Agreement is intended to create a partnership between BioTime and Asterias, to make them joint venturers, to make either
party an agent, legal representative, partner, subsidiary, or employee of the other party or to make either party in any way responsible
for the debts, obligations, or losses of the other party.
11.
and assigns.
Binding on Successors and Assigns. This Agreement shall be binding on each party and the party’s successors
12.
Integration. This Agreement constitutes all of the understandings and agreements existing between the parties
concerning the subject of this Agreement and the rights and obligations created under it. Neither party has made or relied upon any
agreement, warranty, representation, promise, or statement, whether oral or written, not expressly included in this Agreement.
13.
Waivers, Delays, and Omissions. One or more waivers, consents, or approvals by any party of any covenant,
condition, act, or breach under this Agreement shall not be construed as a waiver, consent, or approval of any subsequent condition,
covenant, act, or breach or as a consent or approval to the same or any other covenant or condition. This Agreement and any term of
this Agreement may be amended, discharged, or terminated only by a written instrument signed by the parties against whom
enforcement of such amendment, discharge, or termination is sought. No delay or omission to exercise any right, power, or remedy
accruing to any party upon any breach or default of the other party under this Agreement shall impair any such right, power, or
remedy of the party not in breach or default.
14.
References. References in this Agreement to sections, paragraphs, subparagraphs, and exhibits are references to
sections, paragraphs, and subparagraphs in this Agreement and exhibits attached to this Agreement unless specified otherwise.
15.
Agreement.
Section Headings. Section headings are for the convenience of the parties and do not form a part of this
16.
Construction. The parties agree that this Agreement is a negotiated agreement, with each party free to review and
negotiate each section of the Agreement and otherwise clarify all sections of the Agreement that appear to the party (at the time of
signing) to be ambiguous or unclear. Both parties shall be deemed to be the drafting parties, and the rules of construction to the effect
that any ambiguities are to be resolved against the drafting party or parties shall not be employed in the interpretation of this
Agreement.
17.
Unenforceable Provisions. If all or part of any one or more of the provisions contained in this Agreement is for
any reason held to be invalid, illegal, or unenforceable in any respect, the invalidity, illegality, or unenforceability shall not affect any
other provisions, and this Agreement shall be equitably construed as if it did not contain the invalid, illegal, or unenforceable
provision.
18.
Attorneys’ Fees. It is expressly agreed that if this Agreement is referred to an attorney to collect any amount due
under this Agreement, or to enforce or protect any rights conferred upon BioTime by this Agreement Asterias promises and agrees to
pay on demand all costs, including without limitation, reasonable attorneys’ fees, incurred by BioTime in the enforcement of
BioTime’s rights and remedies under this Agreement. In the event an action is brought to enforce or interpret the provisions of this
Agreement, the prevailing party in such action shall be entitled to an award of its attorneys’ fees and costs incurred in such action,
including any fees and costs incurred in any appeal and in any collection effort.
IN WITNESS WHEREOF the parties have executed this Agreement as of the Effective Date.
BioTime, Inc.
By:
s/Robert W. Peabody
Robert W. Peabody
Sr.VP. and Chief Operating Officer
Asterias Biotherapeutics, Inc.
By:
s/Thomas Okarma
Thomas Okarma,
Chief Executive Officer
EXHIBIT 10.5
2012 EQUITY INCENTIVE PLAN
1.
Purpose; Eligibility.
1.1
General Purpose. The name of this plan is the BioTime Acquisition Corporation 2012 Equity Incentive Plan (the
"Plan"). The purposes of the Plan are to (a) enable the Company, to attract and retain the types of Employees, Consultants and
Directors who will contribute to the Company's long range success; (b) provide incentives that align the interests of Employees,
Consultants and Directors with those of the shareholders of the Company; and (c) promote the success of the Company's business.
1.2
Company.
Eligible Award Recipients. The persons eligible to receive Awards are the Employees, Consultants and Directors of the
1.3
Available Awards. Awards that may be granted under the Plan include: (a) Incentive Stock Options, (b) Non-qualified
Stock Options, (c) Stock Appreciation Rights, and (d) Stock Awards.
2.
Definitions.
"Applicable Laws" means the requirements related to or implicated by the administration of the Plan under applicable state
corporate law, United States federal and state securities laws, the Code, any stock exchange or quotation system on which the shares
of Common Stock are listed or quoted, and the applicable laws of any foreign country or jurisdiction where Awards are granted under
the Plan.
"Award" means any right granted under the Plan, including an Incentive Stock Option, a Non-qualified Stock Option, a Stock
Appreciation Right, or a Stock Award.
"Award Agreement" means a written agreement, contract, certificate or other instrument or document evidencing the terms and
conditions of an individual Award granted under the Plan which may, in the discretion of the Company, be transmitted electronically
to any Participant. Each Award Agreement shall be subject to the terms and conditions of the Plan.
“BAC” means BioTime Acquisition Corporation, a Delaware corporation, and any successor company or any parent company.
"Board" means the Board of Directors of BAC, as constituted at any time.
"Cause" means:
With respect to any Employee or Consultant:(a) If the Employee or Consultant is a party to an employment or service
agreement with the Company or its Affiliates and such agreement provides for a definition of Cause, the definition contained therein;
or(b) If no such agreement exists, or if such agreement does not define Cause: (i) the commission of, or plea of guilty or no contest to,
a felony or a crime involving moral turpitude or the commission of any other act involving wilful malfeasance or material fiduciary
breach with respect to the Company or an Subsidiary; (ii) conduct that results in or is reasonably likely to result in harm to the
reputation or business of the Company or any of its Affiliates; (iii) wilful conversion or misappropriation of corporate funds; (iv) gross
negligence or wilful misconduct with respect to the Company or an Subsidiary; or (v) material violation of any state or federal
securities law.
With respect to any Director, a determination by a majority of the disinterested Board members that the Director has
engaged in any of the following:(a) malfeasance in office;(b) gross misconduct or neglect;(c) false or fraudulent misrepresentation
inducing the director's appointment;(d) wilful conversion or misappropriation of corporate funds; or(e) repeated failure to participate
in Board meetings on a regular basis despite having received proper notice of the meetings in advance.
The Committee, in its absolute discretion, shall determine the effect of all matters and questions relating to whether a
Participant has been discharged for Cause.
"Change in Control" (a) The direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or
consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Company and its
subsidiaries, taken as a whole, to any Person that is not a subsidiary of the Company; (b) The Incumbent Directors cease for any
reason to constitute at least a majority of the Board; (c) The date which is 10 business days prior to the consummation of a complete
liquidation or dissolution of the Company; (d) The acquisition by any Person of Beneficial Ownership of 50% or more (on a fully
diluted basis) of either (i) the then outstanding shares of Common Stock of the Company, taking into account as outstanding for this
purpose such Common Stock issuable upon the exercise of options or warrants, the conversion of convertible stock or debt, and the
exercise of any similar right to acquire such Common Stock (the "Outstanding Company Common Stock") or (ii) the combined voting
power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding
Company Voting Securities"); provided, however, that for purposes of this Plan, the following acquisitions shall not constitute a
Change in Control: (A) any acquisition by the Company or any Subsidiary, (B) any acquisition by any employee benefit plan
sponsored or maintained by the Company or any subsidiary, (C) any acquisition which complies with clauses, (i), (ii) and (iii) of
subsection (e) of this definition or (D) in respect of an Award held by a particular Participant, any acquisition by the Participant or any
group of persons including the Participant (or any entity controlled by the Participant or any group of persons including the
Participant); or (e) The consummation of a reorganization, merger, consolidation, statutory share exchange or similar form of
corporate transaction involving the Company that requires the approval of the Company's shareholders, whether for such transaction
or the issuance of securities in the transaction (a "Business Combination"), unless immediately following such Business Combination:
(i) more than 50% of the total voting power of (A) the entity resulting from such Business Combination (the "Surviving Company"),
or (B) if applicable, the ultimate parent entity that directly or indirectly has beneficial ownership of sufficient voting securities eligible
to elect a majority of the members of the board of directors (or the analogous governing body) of the Surviving Company (the "Parent
Company"), is represented by the Outstanding Company Voting Securities that were outstanding immediately prior to such Business
Combination (or, if applicable, is represented by shares into which the Outstanding Company Voting Securities were converted
pursuant to such Business Combination), and such voting power among the holders thereof is in substantially the same proportion as
the voting power of the Outstanding Company Voting Securities among the holders thereof immediately prior to the Business
Combination; (ii) no Person (other than any employee benefit plan sponsored or maintained by the Surviving Company or the Parent
Company) is or becomes the Beneficial Owner, directly or indirectly, of 50% or more of the total voting power of the outstanding
voting securities eligible to elect members of the board of directors of the Parent Company (or the analogous governing body) (or, if
there is no Parent Company, the Surviving Company); and (iii) at least a majority of the members of the board of directors (or the
analogous governing body) of the Parent Company (or, if there is no Parent Company, the Surviving Company) following the
consummation of the Business Combination were Board members at the time of the Board's approval of the execution of the initial
agreement providing for such Business Combination.
2
"Code" means the Internal Revenue Code of 1986, as it may be amended from time to time. Any reference to a section of the
Code shall be deemed to include a reference to any regulations promulgated thereunder.
"Committee" means a committee of the Board appointed by the Board to administer the Plan in accordance with Section 3.3 and
Section 3.4.
"Common Stock" means (a) the Series B common stock, par value $0.0001 per share, of BAC, or (b) the Series A common
stock, par value $0.0001 per share, of BAC after all outstanding Shares of Series B common Stock of BAC have been converted into
Series A common stock, or (c) such other securities of BAC as may be designated by the Board or Committee from time to time in
substitution thereof.
"Company" means BAC and any or all of its Subsidiaries.
"Consultant" means any individual who is engaged by the Company to render consulting or advisory services.
"Continuous Service" means that the Participant's service with the Company, whether as an Employee, Consultant or Director,
is not interrupted or terminated. The Participant's Continuous Service shall not be deemed to have terminated merely because of a
change in the capacity in which the Participant renders service to the Company as an Employee, Consultant or Director or a change in
the entity for which the Participant renders such service (such as a change of employment from one Subsidiary to another Subsidiary),
provided that there is no interruption or termination of the Participant's Continuous Service; provided further that if any Award is
subject to Section 409A of the Code, this sentence shall only be given effect to the extent consistent with Section 409A of the
Code. For example, a change in status from an Employee to a Director will not constitute an interruption of Continuous Service. The
Board or Committee, in its sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of
any leave of absence approved by the Board or Committee, such as sick leave, military leave, or any other personal or family leave of
absence.
3
"Director" means a member of the Board.
"Disability" means that the Participant is unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment; provided, however, for purposes of determining the term of an Incentive Stock Option
pursuant to Section 6.10 hereof, the term Disability shall have the meaning ascribed to it under Section 22(e)(3) of the Code. The
determination of whether an individual has a Disability shall be determined by the Board or Committee or under procedures adopted
by the Board or Committee. Except for a determination of Disability within the meaning of Section 22(e)(3) of the Code for purposes
of an Incentive Stock Option, the Board or Committee may rely on any determination that a Participant is disabled for purposes of
benefits under any long-term disability plan maintained by the Company in which a Participant participates.
"Effective Date" shall mean the date as of which this Plan is adopted by the Board.
"Employee" means any person employed by the Company; provided, that, for purposes of determining eligibility to receive
Incentive Stock Options, an Employee shall mean an employee of the Company or a parent corporation within the meaning of Code
Section 424. Mere service as a Director or payment of a director's fee by the Company shall not be sufficient to constitute
"employment" by the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means, as of any date, the value of the Common Stock as determined below. If the Common Stock is
listed on any national stock exchange, inter-dealer quotation system, or over-the-counter market that reports closing prices, including
without limitation, the New York Stock Exchange, NYSE MKT, Nasdaq, or the OTC Bulletin Board, the Fair Market Value shall be
the closing price of a share of Common Stock (or if no sales were reported the closing price on the date immediately preceding such
date) as quoted on such exchange or system on the day of determination, as reported in the Wall Street Journal or such other source
as the Board or Committee deems reliable. In the absence of an established market for the Common Stock, the Fair Market Value shall
be determined in good faith by the Board or Committee, using such methods as the Board or Committee determines to be reasonable
under the circumstances, and such determination shall be conclusive and binding on all persons.
4
"Free Standing Rights" has the meaning set forth in Section 7.1(a).
"Good Reason" means: (a) if an Employee or Consultant is a party to an employment or service agreement with the Company
and such agreement provides for a definition of Good Reason, the definition contained therein; or (b) if no such agreement exists or if
such agreement does not define Good Reason, the occurrence of one or more of the following without the Participant's express written
consent, which circumstances are not remedied by the Company within thirty (30) days of its receipt of a written notice from the
Participant describing the applicable circumstances (which notice must be provided by the Participant within ninety (90) days of the
Participant's knowledge of the applicable circumstances): (i) any material increase in the Participant's duties (other than by way of
promotion attendant with additional responsibilities, authority or title and an increase in salary commensurate therewith), (ii) any
material diminution of responsibilities, authority, title, status or reporting structure; (iii) a material reduction in the Participant's base
salary or bonus opportunity; or (iv) a geographical relocation of the Participant's principal office location by more than fifty (50)
miles.
"Grant Date" means the date on which the Board or Committee adopts a resolution, or takes other appropriate action, expressly
granting an Award to a Participant that specifies the key terms and conditions of the Award or, if a later date is set forth in such
resolution, then such date as is set forth in such resolution.
"Incentive Stock Option" means an Option intended to qualify as an incentive stock option within the meaning of Section 422
of the Code.
"Non-Employee Director" means a Director who is a "non-employee director" within the meaning of Rule 16b-3.
"Non-qualified Stock Option" means an Option that by its terms does not qualify or is not intended to qualify as an Incentive
Stock Option.
"Officer" means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules
and regulations promulgated thereunder.
"Option" means an Incentive Stock Option or a Non-qualified Stock Option granted pursuant to the Plan.
"Optionholder" means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who
holds an outstanding Option.
5
"Option Exercise Price" means the price at which a share of Common Stock may be purchased upon the exercise of an Option.
"Outside Director" means a Director who is an "outside director" within the meaning of Section 162(m) of the Code and
Treasury Regulations Section 1.162-27(e)(3).
"Participant" means an eligible person to whom an Award is granted pursuant to the Plan or, if applicable, such other person
who holds an outstanding Award.
"Performance Goals" means one or more goals established by the Board or Committee that must be attained by BAC or a
Subsidiary, or a division, business unit or operational unit of BAC or a Subsidiary in order for an Award to vest or for the
determination of the amount of an Award. A Performance Goal may be based on financial results or performance or upon the
attainment of any other goal or milestone designated by the Board or Committee such as, by way of example only and not by way of
limitation, the attainment of a specified amount of sales, revenues, or net income, an increase in the Fair Market Value of the Common
Stock, or the commencement or successful completion of a clinical trial of a new drug, biological product, or medical device.
"Permitted Transferee" means: (a) a member of the Optionholder's immediate family (child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, including adoptive relationships), any person sharing the Optionholder's household (other than a
tenant or employee), a trust in which these persons have more than 50% of the beneficial interest, a foundation in which these persons
(or the Optionholder) control the management of assets, and any other entity in which these persons (or the Optionholder) own more
than 50% of the voting interests; (b) third parties designated by the Committee in connection with a program established and approved
by the Committee pursuant to which Participants may receive a cash payment or other consideration in consideration for the transfer
of a Non-qualified Stock Option; and (c) such other transferees as may be permitted by the Committee in its sole discretion.
"Plan" means this BioTime Acquisition Corporation 2012 Equity Incentive Plan, as amended and/or amended and restated from
time to time.
"Related Rights" has the meaning set forth in Section 7.1(a).
"Restricted Period" has the meaning set forth in Section 7.2(a).
"Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in effect from time to
time.
"Securities Act" means the Securities Act of 1933, as amended.
6
"Stock Appreciation Right" means the right pursuant to an Award granted under Section 7.1 to receive, upon exercise, an
amount payable in cash or shares equal to the number of shares subject to the Stock Appreciation Right that is being exercised
multiplied by the excess of (a) the Fair Market Value of a share of Common Stock on the date the Award is exercised, over (b) the
exercise price specified in the Stock Appreciation Right Award Agreement.
"Stock Award" means any Award granted pursuant to Section 7.2(a).
"Stock for Stock Exchange" has the meaning set forth in Section 6.4.
"Subsidiary" means (i) any corporation or other entity in which the Company possesses directly or indirectly equity interests
representing at least 50% of the total ordinary voting power or at least 50% of the total value of all classes of equity interests of such
corporation or other entity and (ii) any other entity in which the Company has a direct or indirect economic interest that is designated
as a Subsidiary by the Committee.
"Ten Percent Shareholder" means a person who owns (or is deemed to own pursuant to Section 424(d) of the Code) stock
possessing more than 10% of the total combined voting power of all classes of stock of the Company or of any of its Subsidiaries.
“Voting Securities” means any class or series of stock or other securities entitling the holder vote for the election of Directors
generally, but shall exclude any such security that entitles the holder to designate, appoint, or vote for the election of a minority of the
Directors.
3.
Administration.
3.1
Authority of Committee. The Plan shall be administered by the Board or, in the Board's sole discretion, by a
Committee. Subject to the terms of the Plan, the Board or Committee shall have the authority:
(a)
to construe and interpret the Plan and apply its provisions;
(b)
to promulgate, amend, and rescind rules and regulations relating to the administration of the Plan;
(c)
to authorize any person to execute, on behalf of the Company, any instrument required to carry out the purposes
(d)
to determine when Awards are to be granted under the Plan and the applicable Grant Date;
(e)
from time to time to select those Participants to whom Awards shall be granted;
of the Plan;
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(f)
to determine the number of shares of Common Stock to be made subject to each Award;
(g)
to determine whether each Option is to be an Incentive Stock Option or a Non-qualified Stock Option;
(h)
to prescribe the terms and conditions of each Award, including, without limitation, the exercise price and
medium of payment and vesting provisions, and to specify the provisions of the Award Agreement relating to such grant;
(i)
to amend any outstanding Awards, including for the purpose of modifying the time or manner of vesting, or the
term of any outstanding Award; provided, however , that if any such amendment impairs a Participant's rights or increases a
Participant's obligations under his or her Award or creates or increases a Participant's federal income tax liability with respect to an
Award, such amendment shall also be subject to the Participant's consent;
(j)
to determine the duration and purpose of leaves of absences which may be granted to a Participant without
constituting termination of their employment for purposes of the Plan, which periods shall be no shorter than the periods generally
applicable to Employees under the Company's employment policies;
(k)
to make decisions with respect to outstanding Awards that may become necessary upon a change in corporate
control or an event that triggers anti-dilution adjustments;
(l)
to interpret, administer, reconcile any inconsistency in, correct any defect in and/or supply any omission in the
Plan and any instrument or agreement relating to, or Award granted under, the Plan; and
(m) to exercise discretion to make any and all other determinations which it determines to be necessary or advisable
for the administration of the Plan.
The Board or Committee also may modify the purchase price or the exercise price of any outstanding Award, provided
that if the modification effects a repricing, shareholder approval shall be required before the repricing is effective.
3.2
Decisions Final. All decisions made by the Board or Committee pursuant to the provisions of the Plan shall be final
and binding on the Company and the Participants.
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3.3
Delegation. The Board may delegate administration of the Plan to a committee or committees of the Board, and the
term "Committee" shall apply to any such committee. The Board may abolish the Committee at any time and revest in the Board
the administration of the Plan. The members of the Committee shall be appointed by and serve at the pleasure of the Board. From time
to time, the Board may increase or decrease the size of the Committee, add additional members to, remove members (with or without
cause) from, appoint new members in substitution therefor, and fill vacancies, however caused, in the Committee. The Committee
shall act pursuant to a vote of the majority of its members or, in the case of a Committee comprised of only two members, the
unanimous consent of its members, whether present or not, or by the written consent of the majority of its members and minutes shall
be kept of all of its meetings and copies thereof shall be provided to the Board. Subject to the limitations prescribed by the Plan and
the Board, the Committee may establish and follow such rules and regulations for the conduct of its business as it may determine to be
advisable.
3.4
Committee Composition. Except as otherwise determined by the Board, the Committee shall consist solely of two or
more Non-Employee Directors who are also Outside Directors. The Board shall have discretion to determine whether or not it intends
to comply with the exemption requirements of Rule 16b-3 and/or Section 162(m) of the Code. However, if the Board intends to satisfy
such exemption requirements, with respect to Awards to any “covered employee” (as defined in Section 162(m)(3) of the Code, as
interpreted by Internal Revenue Service Notice 2007-49) and with respect to any insider subject to Section 16 of the Exchange Act,
the Committee shall be a compensation committee of the Board that at all times consists solely of two or more Non-Employee
Directors who are also Outside Directors. Nothing herein shall create an inference that an Award is not validly granted under the Plan
in the event Awards are granted under the Plan by a compensation committee of the Board that does not at all times consist solely of
two or more Non-Employee Directors who are also Outside Directors.
4.
Shares Subject to the Plan.
4.1
Subject to adjustment in accordance with Section 11, a total of 4,500,000 shares of Common Stock shall be available
for the grant of Awards under the Plan. Any shares of Common Stock granted in connection with Options and Stock Appreciation
Rights shall be counted against this limit as one share for every one Option or Stock Appreciation Right awarded. Any shares of
Common Stock granted in connection with Awards other than Options and Stock Appreciation Rights shall be counted against this
limit as two (2) shares of Common Stock for every one (1) share of Common Stock granted in connection with such Award. During
the terms of the Awards, the Company shall keep available at all times the number of shares of Common Stock required to satisfy such
Awards.
4.2
Subject to adjustment in accordance with Section 11, no Participant shall be granted, during any one (1) year period,
Options to purchase Common Stock and Stock Appreciation Rights with respect to more than 1,000,000 shares of Common Stock in
the aggregate or any other Awards with respect to more than 500,000 shares of Common Stock in the aggregate. If an Award is to be
settled in cash, the number of shares of Common Stock on which the Award is based shall not count toward the individual share limit
set forth in this Section 4.
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4.3
Any shares of Common Stock subject to an Award that is cancelled, forfeited or expires prior to exercise or
realization, either in full or in part, shall again become available for issuance under the Plan. Any shares of Common Stock that again
become available for future grants pursuant to this Section shall be added back as one share if such shares were subject to Options or
Stock Appreciation Rights and as two (2) shares if such shares were subject to other Awards. Notwithstanding anything to the contrary
contained herein: shares subject to an Award under the Plan shall not again be made available for issuance or delivery under the Plan
if such shares are (a) shares tendered in payment of an Option, (b) shares delivered or withheld by the Company to satisfy any tax
withholding obligation, or (c) shares covered by a stock-settled Stock Appreciation Right or other Awards that were not issued upon
the settlement of the Award.
5.
Eligibility.
5.1
Eligibility for Specific Awards. Incentive Stock Options may be granted only to Employees. Awards other than
Incentive Stock Options may be granted to Employees, Consultants and Directors. Awards may be granted to individuals whom the
Committee determines are reasonably expected to become Employees, Consultants and Directors; provided that such grant and the
Grant Date shall become effective only the individual becoming an Employee, Consultant or Director.
5.2
Ten Percent Shareholders. A Ten Percent Shareholder shall not be granted an Incentive Stock Option unless the Option
Exercise Price is at least 110% of the Fair Market Value of the Common Stock at the Grant Date and the Option is not exercisable
after the expiration of five years from the Grant Date.
6. Option Provisions. Each Option granted under the Plan shall be evidenced by an Award Agreement. Each Option so granted shall
be subject to the conditions set forth in this Section 6, and to such other conditions not inconsistent with the Plan as may be
reflected in the applicable Award Agreement. All Options shall be separately designated Incentive Stock Options or Non-qualified
Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates will be issued for shares of
Common Stock purchased on exercise of each type of Option. Notwithstanding the foregoing, the Company shall have no liability to
any Participant or any other person if an Option designated as an Incentive Stock Option fails to qualify as such at any time or if an
Option is determined to constitute "nonqualified deferred compensation" within the meaning of Section 409A of the Code and the
terms of such Option do not satisfy the requirements of Section 409A of the Code. The provisions of separate Options need not be
identical, but each Option shall include (through incorporation of provisions hereof by reference in the Option or otherwise) the
substance of each of the following provisions:
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6.1
Term. An Option shall expire, and thereafter no longer be exercisable, on such date as the Board or Committee may
designate; provided, however , no Option shall be exercisable after the expiration of 10 years from the Grant Date, and no Incentive
Stock Option granted to a Ten Percent Shareholder shall be exercisable after the expiration of 5 years from the Grant Date. The
expiration date of each Option shall be stated in the Award Agreement pertaining to the Option.
6.2
Exercise Price of An Incentive Stock Option. Subject to the provisions of Section 5.2 pertaining to Incentive Stock
Options granted to Ten Percent Shareholders, the Option Exercise Price of each Incentive Stock Option shall be not less than 100% of
the Fair Market Value of the Common Stock subject to the Option on the Grant Date. Notwithstanding the foregoing, an Incentive
Stock Option may be granted with an Option Exercise Price lower than that set forth in the preceding sentence if such Option is
granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Section 424(a) of the
Code.
6.3
Exercise Price of a Non-qualified Stock Option. The Option Exercise Price of each Non-qualified Stock Option shall
be not less than 100% of the Fair Market Value of the Common Stock subject to the Option on the Grant Date. Notwithstanding the
foregoing, a Non-qualified Stock Option may be granted with an Option Exercise Price lower than that set forth in the preceding
sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of
Section 409A of the Code.
6.4
Consideration. The Option Exercise Price of Common Stock acquired pursuant to an Option shall be paid, to the extent
permitted by applicable statutes and regulations, either (a) in cash or by certified or bank check at the time the Option is exercised or
(b) to the extent approved by the Board or Committee, the Option Exercise Price may be paid: (i) by delivery to the Company of other
Common Stock, duly endorsed for transfer to the Company, with a Fair Market Value on the date of delivery equal to the Option
Exercise Price (or portion thereof) due for the number of shares being acquired (a "Stock for Stock Exchange" ); (ii) a "cashless"
exercise program established with a broker pursuant to which the broker exercises or arranges for the coordination of the exercise of
the Option with the sale of some or all of the underlying Common Stock; (iii) any combination of the foregoing methods; or (iv) in
any other form of consideration that is legal consideration for the issuance of Common Stock and that may be acceptable to the Board
or Committee. Unless otherwise specifically provided in the Option, the exercise price of Common Stock acquired pursuant to an
Option that is paid by delivery to the Company of other Common Stock acquired, directly or indirectly from the Company, shall be
paid only by shares of the Common Stock of the Company that have been held for more than six months (or such longer or shorter
period of time required to avoid a charge to earnings for financial accounting purposes). Notwithstanding the foregoing, during any
period for which the Common Stock is publicly traded (i.e., the Common Stock is listed on any national securities exchange or an
interdealer quotation system, or is traded in an over-the-counter market that reports closing prices) an exercise by a Director or Officer
that involves or may involve a direct or indirect extension of credit or arrangement of an extension of credit by the Company, directly
or indirectly, in violation of Section 402(a) of the Sarbanes-Oxley Act of 2002 shall be prohibited with respect to any Award under
this Plan.
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6.5
Transferability of An Incentive Stock Option. An Incentive Stock Option shall not be transferable except by will or by
the laws of descent and distribution and shall be exercisable during the lifetime of the Optionholder only by the Optionholder.
6.6
Transferability of a Non-qualified Stock Option. A Non-qualified Stock Option may, in the sole discretion of the Board
or Committee, be transferable to a Permitted Transferee, upon approval by the Board or Committee, to the extent provided in the
Award Agreement or by subsequent consent granted by the Board or Committee. If the Non-qualified Stock Option does not provide
for transferability or consent to transfer to a Permitted Transferee is not granted by the Board or Committee, then the Non-qualified
Stock Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the
lifetime of the Optionholder only by the Optionholder.
6.7
Vesting of Options. Each Option may, but need not, vest and therefore become exercisable in periodic instalments as
determined by the Board or Committee or based upon the attainment of a Performance Goal or the occurrence of a specified event.
The vesting provisions of individual Options may vary. No Option may be exercised for a fraction of a share of Common Stock.
6.8
Termination of Continuous Service. Unless otherwise provided in an Award Agreement or in an employment
agreement the terms of which have been approved by the Board or Committee, in the event an Optionholder's Continuous Service
terminates (other than upon the Optionholder's death or Disability), the Optionholder may exercise his or her Option (to the extent that
the Optionholder was entitled to exercise such Option as of the date of termination) but only within such period of time ending on the
earlier of (a) the date three months following the termination of the Optionholder's Continuous Service or (b) the expiration of the
term of the Option as set forth in the Award Agreement. If, after termination, the Optionholder does not exercise his or her Option
within the time specified in the Award Agreement, the Option shall terminate.
6.9
Extension of Termination Date. An Optionholder's Award Agreement may also provide that if the exercise of the
Option following the termination of the Optionholder's Continuous Service for any reason would be prohibited at any time because the
issuance of shares of Common Stock would violate the registration requirements under the Securities Act or any other state or federal
securities law or the rules of any securities exchange or interdealer quotation system, then the Option shall terminate on the earlier of
(a) the expiration of the term of the Option in accordance with Section 6.1 or (b) the expiration of a period after termination of the
Participant's Continuous Service that is three months after the end of the period during which the exercise of the Option would be in
violation of such registration or other securities law requirements.
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6.10
Disability of Optionholder. Unless otherwise provided in an Award Agreement, in the event that an Optionholder's
Continuous Service terminates as a result of the Optionholder's Disability, the Optionholder may exercise his or her Option (to the
extent that the Optionholder was entitled to exercise such Option as of the date of termination), but only within such period of time
ending on the earlier of (a) the date 12 months following such termination or (b) the expiration of the term of the Option as set forth in
the Award Agreement. If, after termination, the Optionholder does not exercise his or her Option within the time specified herein or in
the Award Agreement, the Option shall terminate.
6.11
Death of Optionholder. Unless otherwise provided in an Award Agreement, in the event an Optionholder's Continuous
Service terminates as a result of the Optionholder's death, then the Option may be exercised (to the extent the Optionholder was
entitled to exercise such Option as of the date of death) by the Optionholder's estate, executor, or personal representative, by a person
who acquired the right to exercise the Option by bequest, but only within the period ending on the earlier of (a) the date 12 months
following the date of death or (b) the expiration of the term of such Option as set forth in the Award Agreement. If, after the
Optionholder's death, the Option is not exercised within the time specified herein or in the Award Agreement, the Option shall
terminate.
6.12
Incentive Stock Option $100,000 Limitation. To the extent that the aggregate Fair Market Value (determined at the
time of grant) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder
during any calendar year (under all plans of the Company) exceeds $100,000, the Options or portions thereof which exceed such limit
(according to the order in which they were granted) shall be treated as Non-qualified Stock Options.
7.
Provisions of Awards Other Than Options.
7.1
Stock Appreciation Rights.
(a)
General
Each Stock Appreciation Right granted under the Plan shall be evidenced by an Award Agreement. Each Stock
Appreciation Right so granted shall be subject to the conditions set forth in this Section 7.1 , and to such other conditions not
inconsistent with the Plan as may be reflected in the applicable Award Agreement. Stock Appreciation Rights may be granted alone (
"Free Standing Rights" ) or in tandem with an Option granted under the Plan ( "Related Rights" ).
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(b)
Grant Requirements
Any Related Right that relates to a Non-qualified Stock Option may be granted at the same time the Option is
granted or at any time thereafter but before the exercise or expiration of the Option. Any Related Right that relates to an Incentive
Stock Option must be granted at the same time the Incentive Stock Option is granted.
(c)
Term of Stock Appreciation Rights
The term of a Stock Appreciation Right granted under the Plan shall be determined by the Board or Committee;
provided, however , no Stock Appreciation Right shall be exercisable later than the tenth anniversary of the Grant Date.
(d)
Vesting of Stock Appreciation Rights
Each Stock Appreciation Right may, but need not, vest and therefore become exercisable in periodic instalments
as determined by the Board or Committee or based upon the attainment of a Performance Goal or the occurrence of a specified event.
The vesting provisions of individual Stock Appreciation Rights may vary. No Stock Appreciation Right may be exercised for a
fraction of a share of Common Stock.
(e)
Exercise and Payment
Upon exercise of a Stock Appreciation Right, the holder shall be entitled to receive from the Company an
amount equal to the number of shares of Common Stock subject to the Stock Appreciation Right that is being exercised multiplied by
the excess of (i) the Fair Market Value of a share of Common Stock on the date the Award is exercised, over (ii) the exercise price
specified in the Stock Appreciation Right or related Option. Payment with respect to the exercise of a Stock Appreciation Right shall
be made on the date of exercise. Payment shall be made in the form of shares of Common Stock (with or without restrictions as to
substantial risk of forfeiture and transferability, as determined by the Board Committee in its sole discretion), cash or a combination
thereof, as determined by the Board or Committee.
(f)
Exercise Price
The exercise price of a Free Standing Stock Appreciation Right shall be determined by the Board or Committee,
but shall not be less than 100% of the Fair Market Value of one share of Common Stock on the Grant Date of the Stock Appreciation
Right. A Related Right granted simultaneously with or subsequent to the grant of an Option and in conjunction therewith or in the
alternative thereto shall have the same exercise price as the related Option, shall be transferable only upon the same terms and
conditions as the related Option, and shall be exercisable only to the same extent as the related Option; provided, however , that a
Stock Appreciation Right, by its terms, shall be exercisable only when the Fair Market Value per share of Common Stock subject to
the Stock Appreciation Right and related Option exceeds the exercise price per share thereof. No Stock Appreciation Rights may be
granted in tandem with an Option unless the Board or Committee determines that the requirements of Section 7.1(b) are satisfied.
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(g)
Reduction in the Underlying Option Shares
Upon any exercise of a Related Right, the number of shares of Common Stock for which any related Option
shall be exercisable shall be reduced by the number of shares for which the Stock Appreciation Right has been exercised. The number
of shares of Common Stock for which a Related Right shall be exercisable shall be reduced upon any exercise of any related Option
by the number of shares of Common Stock for which such Option has been exercised.
7.2
Stock Awards.
(a)
General
A Stock Award is an Award of actual shares of Common Stock ("Restricted Stock") or hypothetical Common
Stock units ( "Restricted Stock Units") having a value equal to the Fair Market Value of an identical number of shares of Common
Stock. A Stock Award may, but need not, provide that such Stock Award may not be sold, assigned, transferred or otherwise disposed
of, or pledged or hypothecated as collateral for a loan or as security for the performance of any obligation or for any other purpose for
such period as the Board or Committee shall determine (the "Restricted Period" ). Each Stock Award granted under the Plan shall
be evidenced by an Award Agreement. Each Stock Award so granted shall be subject to the conditions set forth in this Section 7.2 ,
and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award Agreement.
(b)
Restricted Stock and Restricted Stock Units
(i) Each Participant granted Restricted Stock shall execute and deliver to the Company an Award Agreement
with respect to the Restricted Stock setting forth the applicable payment terms, if any, for the Restricted
Stock, and restrictions and other terms and conditions applicable to such Restricted Stock.
(ii) Restricted Stock may be issued to a Participant without payment or without the delivery of a promissory note
or instalment payment agreement only for services actually performed by the Participant prior to the issuance
of the Restricted Stock.
(iii) In the case of Restricted Stock sold to a Participant on an instalment payment basis, the Company may
require, as a condition of the grant, that the Participant execute and deliver to the Company a promissory note
or instalment payment agreement and a stock pledge or security agreement, and a blank stock power with
respect to the Restricted Stock, in such form and containing such terms as the Board or Committee may
require. No Restricted Stock shall be sold to an Officer or Director on instalment payment terms that would
constitute an extension of credit in violation of in violation of Section 402(a) of the Sarbanes-Oxley Act of
2002.
15
(iv) If the Committee determines that the Restricted Stock shall be held by the Company or in escrow rather than
delivered to the Participant pending the release of the applicable restrictions, the Committee may require the
Participant to additionally execute and deliver to the Company (A) an escrow agreement satisfactory to the
Committee, if applicable and (B) the appropriate blank stock power with respect to the Restricted Stock
covered by such agreement.
(v) If a Participant fails to execute an agreement evidencing an Award of Restricted Stock and, if applicable, a
promissory note or instalment payment agreement, stock pledge or security agreement, escrow agreement,
and stock power, the Award shall be null and void. Subject to the restrictions set forth in the Award, the
Participant generally shall have the rights and privileges of a shareholder as to such Restricted Stock,
including the right to vote such Restricted Stock and the right to receive dividends; provided that , any cash
dividends and stock dividends with respect to the Restricted Stock shall be withheld by the Company for the
Participant's account, and interest may be credited on the amount of the cash dividends withheld at a rate and
subject to such terms as determined by the Board or Committee. The cash dividends or stock dividends so
withheld and attributable to any particular share of Restricted Stock (and earnings thereon, if applicable) shall
be distributed to the Participant in cash or, at the discretion of the Board or Committee, in shares of Common
Stock having a Fair Market Value equal to the amount of such dividends, if applicable, upon the release of
restrictions on such share and, if such share is forfeited, the Participant shall have no right to such dividends.
(vi) The terms and conditions of a grant of Restricted Stock Units shall be reflected in an Award Agreement. No
shares of Common Stock shall be issued at the time a Restricted Stock Unit is granted, and the Company will
not be required to set aside a fund for the payment of any such Award. A Participant shall have no voting
rights with respect to any Restricted Stock Units granted hereunder. At the discretion of the Committee, each
Restricted Stock Unit (representing one share of Common Stock) may be credited with cash and stock
dividends paid by the Company in respect of one share of Common Stock ( "Dividend Equivalents"
). Dividend Equivalents shall be withheld by the Company for the Participant's account, and interest may be
credited on the amount of cash Dividend Equivalents withheld at a rate and subject to such terms as
determined by the Board or Committee. Dividend Equivalents credited to a Participant's account and
attributable to any particular Restricted Stock Unit (and earnings thereon, if applicable) shall be distributed in
cash or, at the discretion of the Board or Committee, in shares of Common Stock having a Fair Market Value
equal to the amount of such Dividend Equivalents and earnings, if applicable, to the Participant upon
settlement of such Restricted Stock Unit and, if such Restricted Stock Unit is forfeited, the Participant shall
have no right to such Dividend Equivalents.
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(c)
Restrictions
(i) Restricted Stock awarded to a Participant shall be subject to the following restrictions until the expiration of
the Restricted Period, and to such other terms and conditions as may be set forth in the applicable Award
Agreement: (A) if an escrow arrangement is used, the Participant shall not be entitled to delivery of the stock
certificate; (B) the shares shall be subject to the restrictions on transferability set forth in the Award
Agreement; (C) the shares shall be subject to forfeiture to the extent provided in the applicable Award
Agreement; and (D) to the extent such shares are forfeited, the stock certificates shall be returned to the
Company, and all rights of the Participant to such shares and as a shareholder with respect to such shares shall
terminate without further obligation on the part of the Company.
(ii) Restricted Stock Units awarded to any Participant shall be subject to (A) forfeiture until the expiration of the
Restricted Period, and satisfaction of any applicable Performance Goals during such period, to the extent
provided in the applicable Award Agreement, and to the extent such Restricted Stock Units are forfeited, all
rights of the Participant to such Restricted Stock Units shall terminate without further obligation on the part
of the Company and (B) such other terms and conditions as may be set forth in the applicable Award
Agreement.
(iii) The Board or Committee shall have the authority to remove any or all of the restrictions on the Restricted
Stock and Restricted Stock Units whenever it may determine that, by reason of changes in Applicable Laws
or other changes in circumstances arising after the date the Restricted Stock or Restricted Stock Units are
granted, such action is appropriate.
17
(d)
Restricted Period
With respect to Stock Awards, the Restricted Period shall commence on the Grant Date and end at the time or
times set forth on a schedule established by the Board or Committee in the applicable Award Agreement. The Board or Committee
may, but shall not be required to, provide for an acceleration of the expiration of a Restricted Period upon the occurrence of a
specified event.
(e)
Delivery of Restricted Stock and Settlement of Restricted Stock Units
Upon the expiration of the Restricted Period with respect to any shares of Restricted Stock, the restrictions set
forth in Section 7.2(c) and the applicable Award Agreement shall be of no further force or effect with respect to such shares,
except as set forth in the applicable Award Agreement. If an escrow arrangement is used, upon such expiration, the Company shall
deliver to the Participant, or his or her beneficiary, without charge, the stock certificate evidencing the shares of Restricted Stock
which have not then been forfeited and with respect to which the Restricted Period has expired (provided, that no fractional shares
shall be issued) and any cash dividends or stock dividends credited to the Participant's account with respect to such Restricted Stock
and the interest thereon, if any. Upon the expiration of the Restricted Period with respect to any outstanding Restricted Stock Units,
the Company shall deliver to the Participant, or his or her beneficiary, without charge, one share of Common Stock for each such
outstanding Restricted Stock Unit ( "Vested Unit" ); provided, however , that, if explicitly provided in the applicable Award
Agreement, the Company may, in its sole discretion, elect to pay cash or part cash and part Common Stock in lieu of delivering only
shares of Common Stock for Vested Units. If a cash payment is made in lieu of delivering shares of Common Stock, the amount of
such payment shall be equal to the Fair Market Value of the Common Stock as of the date on which the Restricted Period lapsed with
respect to each Vested Unit.
(f)
Stock Restrictions
Each certificate representing Restricted Stock awarded under the Plan shall, in addition to any other legends as
may be required by law or by the Board or Committee, bear a legend to the following effect:
THESE SHARES MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN
AGREEMENT BETWEEN THE COMPANY AND THE SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE
SECRETARY OF THE COMPANY
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8.
Securities Law Compliance. All Awards, including all Options, Stock Appreciation Rights, and Stock Awards granted under the
Plan shall be subject to the requirement that, if at any time the Board or the Committee shall determine, in its discretion, that the
listing upon any securities exchange, or the registration under the Securities Act, or registration or qualification under any state law is
required for the grant, exercise, issue , or sale of any Options, Stock Appreciation Rights, Common Stock, or Restricted Stock Units
under the Plan, or the consent or approval of any government regulatory body, is necessary or desirable as a condition of, or in
connection therewith, such Option, Stock Appreciation Rights, or Stock Award may not be exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the
Board or the Committee. Furthermore, if the Board or the Committee determines that any amendment to any Award (including, but
not limited to, an increase in the exercise price of any Option or Stock Award) is necessary or desirable in connection with the
registration or qualification of any of its shares under any state securities or “blue sky” law, then the Board or the Committee shall
have the unilateral right to make such changes without the consent of the Participant to whom the Award was granted.
(a)
Each Award Agreement shall provide that no shares of Common Stock shall be purchased or sold thereunder
unless and until (i) any then applicable requirements of state or federal laws and regulatory agencies have been fully complied with to
the satisfaction of the Company and its counsel and (i) if required to do so by the Company, the Participant has executed and delivered
to the Company a letter of investment intent in such form and containing such provisions as the Committee may require.
(b)
Except as may otherwise be required by the Securities Act, the Company shall not be required to register under
the Securities Act the Plan, any Award or any Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, or any
Common Stock issued or issuable pursuant to any such Award, and the Company shall have no liability for any delay in issuing or
failure to issue or sell any Option, Stock Appreciation Right, Common Stock, or Restricted Stock Unit prior to the date on which a
registration statement under the Securities Act becomes effective with respect to the offer, sale, and issuance of such Award, Option,
Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, or Common Stock.
9. Use of Proceeds from Stock. Proceeds from the sale of Common Stock pursuant to Awards, or upon exercise thereof, shall
constitute general funds of the Company.
10. Miscellaneous.
10.1
Acceleration of Exercisability and Vesting. The Board or Committee shall have the power to accelerate the time at
which an Award may first be exercised or the time during which an Award or any part thereof will vest in accordance with the Plan,
notwithstanding the provisions in the Award stating the time at which it may first be exercised or the time during which it will vest.
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10.2
Shareholder Rights. Except as provided in the Plan or an Award Agreement, no Participant shall be deemed to be the
holder of, or to have any of the rights of a holder with respect to, any shares of Common Stock subject to such Award unless and until
such Participant has satisfied all requirements for exercise of the Award pursuant to its terms and no adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions of other rights for which the record
date is prior to the date such Common Stock certificate is issued, except as provided in Section 11 hereof.
10.3
No Employment or Other Service Rights. Nothing in the Plan or any instrument executed or Award granted pursuant
thereto shall confer upon any Participant any right to continue to serve the Company in the capacity in effect at the time the Award
was granted or shall affect the right of the Company to terminate (a) the employment of an Employee with or without notice and with
or without Cause, except as may otherwise be provided in a written employment agreement between the Company and the Participant,
or (b) the service of a Director pursuant to the By-laws of BAC or an Subsidiary, and any applicable provisions of the corporate law of
the state in which BAC or the Subsidiary is incorporated, as the case may be.
10.4
Withholding Obligations. To the extent provided by the terms of an Award Agreement or as may be approved by the
Board or Committee, a Participant may satisfy any federal, state or local tax withholding obligation relating to the exercise or
acquisition of Common Stock under an Award by any of the following means (in addition to the Company's right to withhold from
any compensation paid to the Participant by the Company) or by a combination of such means: (a) tendering a cash payment; (b)
authorizing the Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable to the
Participant as a result of the exercise or acquisition of Common Stock under the Award, provided, however , that no shares of
Common Stock are withheld with a value exceeding the minimum amount of tax required to be withheld by law; or (c) delivering to
the Company previously owned and unencumbered shares of Common Stock.
11. Adjustments Upon Changes in Stock. In the event of changes in the outstanding Common Stock or in the capital structure of the
Company by reason of any stock or extraordinary cash dividend, stock split, reverse stock split, an extraordinary corporate transaction
such as any recapitalization, reorganization, merger, consolidation, combination, exchange, or other relevant change in capitalization
occurring after the Grant Date of any Award, Awards granted under the Plan and any Award Agreements, including the exercise price
of Options and Stock Appreciation Rights and the number of shares of Common Stock subject to such Options, Stock Appreciation
Rights, or Stock Awards, the maximum number of shares of Common Stock subject to all Awards stated in Section 4 , and the
maximum number of shares of Common Stock with respect to which any one person may be granted Awards during any period stated
in Section 4 will be equitably adjusted or substituted, as to the number, price or kind of a share of Common Stock or other
consideration subject to such Awards to the extent necessary to preserve the economic intent of such Award. In the case of
adjustments made pursuant to this Section 11 , unless the Board or Committee specifically determines that such adjustment is in the
best interests of the Company, Board or the Committee shall, in the case of Incentive Stock Options, ensure that any adjustments
under this Section 11 will not constitute a modification, extension or renewal of the Incentive Stock Options within the meaning
of Section 424(h)(3) of the Code and in the case of Non-qualified Stock Options, ensure that any adjustments under this Section 11
will not constitute a modification of such Non-qualified Stock Options within the meaning of Section 409A of the Code. Any
adjustments made under this Section 11 shall be made in a manner which does not adversely affect the exemption provided
pursuant to Rule 16b-3 under the Exchange Act. Further, with respect to Awards intended to qualify as "performance-based
compensation" under Section 162(m) of the Code, any adjustments or substitutions will not cause the Company to be denied a tax
deduction on account of Section 162(m) of the Code. The Company shall give each Participant notice of an adjustment hereunder and,
upon notice, such adjustment shall be conclusive and binding for all purposes.
20
12. Effect of Change in Control.
12.1
In the discretion of the Board and the Committee, any Award Agreement may provide, or the Board or the Committee
may provide by amendment of any Award Agreement or otherwise, notwithstanding any provision of the Plan to the contrary, that in
the event of a Change in Control, Options and/or Stock Appreciation Rights shall become immediately exercisable with respect to all
or a specified portion of the shares subject to such Options or Stock Appreciation Rights, and/or the Restricted Period shall expire
immediately with respect to all or a specified portion of the shares of Restricted Stock or Restricted Stock Units.
12.2
In addition, in the event of a Change in Control, the Committee may in its discretion and upon at least 10 days' advance
notice to the affected persons, cancel any outstanding Awards and pay to the holders thereof, in cash or stock, or any combination
thereof, the value of such Awards based upon the price per share of Common Stock received or to be received by other shareholders of
the Company in the event. In the case of any Option or Stock Appreciation Right with an exercise price (or SAR Exercise Price in the
case of a Stock Appreciation Right) that equals or exceeds the price paid for a share of Common Stock in connection with the Change
in Control, the Committee may cancel the Option or Stock Appreciation Right without the payment of consideration therefor.
12.3
The obligations of the Company under the Plan shall be binding upon any successor corporation or organization
resulting from the merger, consolidation or other reorganization of the Company, or upon any successor corporation or organization
succeeding to all or substantially all of the assets and business of the Company and its Subsidiaries, taken as a whole.
21
13. Amendment of the Plan and Awards.
13.1
Amendment of Plan. The Board at any time, and from time to time, may amend or terminate the Plan. However, except
as provided in Section 11 relating to adjustments upon changes in Common Stock, and Section 13.3 and Section 14.14, no
amendment shall be effective unless approved by the shareholders of the Company to the extent shareholder approval is necessary to
satisfy any Applicable Laws. At the time of such amendment, the Board shall determine, upon advice from counsel, whether such
amendment will be contingent on shareholder approval.
13.2
Shareholder Approval. The Board may, in its sole discretion, submit any amendment to the Plan or any Award for
shareholder approval, including, but not limited submissions for shareholder approval intended to satisfy the requirements of Section
162(m) of the Code and the regulations thereunder regarding the exclusion of performance-based compensation from the limit on
corporate deductibility of compensation paid to certain executive officers. If any Award is granted under the Plan prior to the date that
the Plan has been approved by the shareholders of BAC, such Award shall be contingent upon the approval of the Plan by the
shareholders of BAC. Further, the Board or Committee may make the payment of any Award contingent upon shareholder approval,
for the purposes of compliance with Section 162(m) of the Code or otherwise.
13.3
No Impairment of Rights. Rights under any Award granted before amendment of the Plan shall not be impaired by any
amendment of the Plan unless (a) the Company requests the consent of the Participant and the Participant consents in writing, or (b)
the Award was granted subject to the terms of the amendment.
14. General Provisions.
14.1
Forfeiture Events. The Committee may specify in an Award Agreement that the Participant's rights, payments and
benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain
events, in addition to applicable vesting conditions of an Award. Such events may include, without limitation, breach of
non-competition, non-solicitation, confidentiality, or other restrictive covenants that are contained in the Award Agreement or
otherwise applicable to the Participant, a termination of the Participant's Continuous Service for Cause, or other conduct by the
Participant that is detrimental to the business or reputation of the Company and/or its Subsidiaries.
14.2
Clawback. Notwithstanding any other provisions in this Plan, any Award which is subject to recovery under any law,
government regulation or stock exchange listing requirement, will be subject to such deductions and clawback as may be required to
be made pursuant to such law, government regulation or stock exchange listing requirement (or any policy adopted by the Company
pursuant to any such law, government regulation or stock exchange listing requirement).
22
14.3
Other Compensation Arrangements. Nothing contained in this Plan shall prevent the Board or Committee from
adopting other or additional compensation arrangements, subject to shareholder approval if such approval is required; and such
arrangements may be either generally applicable or applicable only in specific cases.
14.4
Sub-plans. The Committee may from time to time establish sub-plans under the Plan for purposes of satisfying blue
sky, securities, tax or other laws of various jurisdictions in which the Company intends to grant Awards. Any sub-plans shall contain
such limitations and other terms and conditions as the Committee determines are necessary or desirable. All sub-plans shall be deemed
a part of the Plan, but each sub-plan shall apply only to the Participants in the jurisdiction for which the sub-plan was designed.
14.5
Deferral of Awards. The Committee may establish one or more programs under the Plan to permit selected Participants
the opportunity to elect to defer receipt of consideration upon exercise of an Award, satisfaction of performance criteria, or other event
that absent the election would entitle the Participant to payment or receipt of shares of Common Stock or other consideration under an
Award. The Committee may establish the election procedures, the timing of such elections, the mechanisms for payments of, and
accrual of interest or other earnings, if any, on amounts, shares or other consideration so deferred, and such other terms, conditions,
rules and procedures that the Committee deems advisable for the administration of any such deferral program.
14.6
Unfunded Plan. The Plan shall be unfunded. Neither the Company, the Board nor the Committee shall be required to
establish any special or separate fund or to segregate any assets to assure the performance of its obligations under the Plan.
14.7
Recapitalizations. Each Award Agreement shall contain provisions required to reflect the provisions of Section 11.
14.8
Delivery. Subject to Section 8 and Section 7.2(c), upon exercise of an Option or Stock Appreciation Right or
Restricted Stock Unit granted under this Plan, the Company shall issue Common Stock or pay any amounts due within a reasonable
period of time thereafter. A period of 30 days shall be considered a reasonable period of time.
14.9
No Fractional Shares. No fractional shares of Common Stock shall be issued or delivered pursuant to the Plan. The
Board or Committee shall determine whether cash, additional Awards or other securities or property shall be issued or paid in lieu of
fractional shares of Common Stock or whether any fractional shares should be rounded down, forfeited, or otherwise eliminated.
23
14.10
Other Provisions. The Award Agreements authorized under the Plan may contain such other provisions not inconsistent
with this Plan, including, without limitation, restrictions upon the exercise of the Awards, as the Committee may deem advisable.
14.11
Section 409A. The Plan is intended to comply with Section 409A of the Code to the extent subject thereto, and,
accordingly, to the maximum extent permitted, the Plan shall be interpreted and administered to be in compliance therewith. Any
payments described in the Plan that are due within the "short-term deferral period" as defined in Section 409A of the Code shall not be
treated as deferred compensation unless Applicable Laws require otherwise. Notwithstanding anything to the contrary in the Plan, to
the extent required to avoid accelerated taxation and tax penalties under Section 409A of the Code, amounts that would otherwise be
payable and benefits that would otherwise be provided pursuant to the Plan during the six (6) month period immediately following the
Participant's termination of Continuous Service shall instead be paid on the first payroll date after the six-month anniversary of the
Participant's separation from service (or the Participant's death, if earlier). Notwithstanding the foregoing, neither the Company nor the
Committee shall have any obligation to take any action to prevent the assessment of any excise tax or penalty on any Participant under
Section 409A of the Code and neither the Company nor the Committee will have any liability to any Participant for such tax or
penalty.
14.12
Disqualifying Dispositions. Any Participant who shall make a "disposition" (as defined in Section 424 of the Code) of
all or any portion of shares of Common Stock acquired upon exercise of an Incentive Stock Option within two years from the Grant
Date of such Incentive Stock Option or within one year after the issuance of the shares of Common Stock acquired upon exercise of
such Incentive Stock Option shall be required to immediately advise the Company in writing as to the occurrence of the sale and the
price realized upon the sale of such shares of Common Stock.
14.13
Section 16. It is the intent of the Company that the Plan satisfy, and be interpreted in a manner that satisfies, the
applicable requirements of Rule 16b-3 as promulgated under Section 16 of the Exchange Act so that Participants will be entitled to the
benefit of Rule 16b-3, or any other rule promulgated under Section 16 of the Exchange Act, and will not be subject to short-swing
liability under Section 16 of the Exchange Act. Accordingly, if the operation of any provision of the Plan would conflict with the
intent expressed in this Section 14.13 , such provision to the extent possible shall be interpreted and/or deemed amended so as to
avoid such conflict.
14.14
Section 162(m). To the extent the Committee issues any Award that is intended to be exempt from the deduction
limitation of Section 162(m) of the Code, the Committee may, without shareholder or grantee approval, amend the Plan or the relevant
Award Agreement retroactively or prospectively to the extent it determines necessary in order to comply with any subsequent
clarification of Section 162(m) of the Code required to preserve the Company's federal income tax deduction for compensation paid
pursuant to any such Award.
24
14.15
Expenses. The costs of administering the Plan shall be paid by the Company.
14.16
Severability. If any of the provisions of the Plan or any Award Agreement is held to be invalid, illegal or
unenforceable, whether in whole or in part, such provision shall be deemed modified to the extent, but only to the extent, of such
invalidity, illegality or unenforceability and the remaining provisions shall not be affected thereby.
14.17
Plan Headings. The headings in the Plan are for purposes of convenience only and are not intended to define or limit
the construction of the provisions hereof.
14.18
Non-Uniform Treatment. The determinations of the Board or Committee under the Plan need not be uniform and may
be made selectively among persons who are eligible to receive, or actually receive, Awards. Without limiting the generality of the
foregoing, the Board and Committee shall be entitled to make non-uniform and selective determinations, amendments and
adjustments, and to enter into non-uniform and selective Award Agreements.
15. Effective Date of Plan. The Plan shall become effective as of the Effective Date, but no Award shall be exercised (or, in the case
of a stock Award, shall be granted) unless and until the Plan has been approved by the shareholders of the Company, which approval
shall be within twelve (12) months before or after the date the Plan is adopted by the Board.
16. Termination or Suspension of the Plan. The Plan shall terminate automatically on March 9, 2023 which is ten years from the date
the Plan was approved by the Company’s Board of Directors. No Award shall be granted pursuant to the Plan after such date, but
Awards theretofore granted may extend beyond that date.
17. Effect of Dissolution, Merger or Other Reorganization. Upon the dissolution or liquidation of BAC, or upon a reorganization,
merger or consolidation of BAC as a result of which the outstanding Common Stock or other securities of the class then subject to
Awards are changed into or exchanged for cash or property or securities not of BAC’s issue, or upon a sale of substantially all the
property of BAC to, or the acquisition of more than eighty percent (80%) of the Voting Securities of BAC then outstanding by,
another corporation or person, this Plan shall terminate, and all unexercised Awards theretofore granted hereunder shall terminate,
unless provision can be made in writing in connection with such transaction for the continuance of the Plan and/or for the assumption
of Awards theretofore granted, or the substitution for Awards options or other rights covering the shares of a successor corporation, or
a parent or a subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices, in which event the Plan
and Awards theretofore granted shall continue in the manner and under the terms so provided, subject to such adjustments. The grant
of an Award pursuant to the Plan shall not affect in any way the right or power of BAC or any Subsidiary or parent corporation to
make adjustments, reclassifications, reorganizations or changes or its capital or business structure or to merge or to consolidate or to
dissolve, liquidate or sell, or transfer all or any part of its business or assets.
25
18. Choice of Law. The law of the State of Delaware shall govern all questions concerning the construction, validity and
interpretation of this Plan, without regard to such state's conflict of law rules.
As adopted by the Board of Directors of BioTime Acquisition Corporation on March 10, 2013.
26
EXHIBIT 10.6
PROMISSORY NOTE
Up to $5,000,000
April 1, 2013
FOR VALUE RECEIVED, Asterias Biotherapuetics, Inc., a Delaware corporation (Borrower), promises to pay to the order
of BioTime, Inc., a California corporation ( Lender ), the principal amount of all Advances (defined below) up to an aggregate
amount of Five Million Dollars ($5,000,000), and to pay interest on the principal amount of all Advances from the date of each
Advance until the date of payment in full, payable as set forth below.
1.
Advances
1.1
On the terms and conditions set forth in this Note, Lender may, in Lender’s sole discretion, lend money
to Borrower at Borrower = s request, and each such loan or payment of money by Lender to Borrower is referred to in this Note as an
Advance . Borrower shall not request Advances in excess of $5,000,000 in the aggregate (the Maximum Loan Amount ),
regardless of whether the outstanding principal balance of Advances has been reduced to an amount less than the Maximum Loan
Amount through payments made by Borrower to Lender on this Note.
1.2
Lender shall have no obligation to make any Advance requested by Borrower. In no event shall
Borrower request any Advance if an Event of Default or any event which, with or without the giving of notice or passage of time or
both would constitute an Event of Default, shall have occurred and be continuing.
1.3
Lender is authorized to record on Schedule A hereto, and on any continuation(s) of Schedule A that may
be attached to this Note: (a) the date and principal amount of each Advance by Lender; and (b) the date and amount of each payment
or prepayment of principal of any Advance; which recordation will constitute prima facie evidence of the accuracy of the information
so endorsed on Schedule A; provided however, that any failure to record such information on Schedule A or a continuation thereof
will not in any manner affect the obligations of Borrower to make payments of principal in accordance with the terms of this
Note. Lender will provide Borrower, upon request, with a copy of each recordation made by Lender on Schedule A.
2.
Terms and Conditions of Payment
2.1
Interest. Interest shall accrue and be payable at the rate of 0.24% per annum, compounded monthly, for
the month of April 2013, for loans with terms of three years or less. Interest shall be computed on the basis of a 365-day year and the
actual number of days elapsed.
2.2
Payment. The outstanding principal balance of this Note, plus all unpaid accrued interest thereon, shall
be due and payable on the earlier of (a) December 31, 2013, and (b) the “Closing Date” as defined in that certain Asset Contribution
Agreement by and among Borrower, Lender, and Geron Corporation. Principal, interest, and all other sums payable under this Note
shall be payable in lawful money of the United States of America.
2.3
Application of Payments. All payments received on this Note shall be applied first to any costs of
collection (including all attorneys' fees and expenses), second to the payment of accrued interest, and third to the payment of principal.
3.
Default
3.1
The unpaid principal balance of this Note, together with all accrued interest, shall, at the option of the
Lender, become immediately due and payable in full, without demand or notice, upon the occurrence of any "Event of Default."
3.2
For purposes of this Note, the following are Events of Default:
(a)
the failure of Borrower to pay when due any interest, principal, or other amount payable under
this Note, if such failure to pay continues for a period of seven days;
(b)
Borrower (1) becoming the subject of any order for relief in a proceeding under any Debtor
Relief Law (as defined below); (2) becoming unable to pay, or admitting in writing the Borrower's inability to pay, the Borrower's
debts as they mature; (3) making an assignment for the benefit of creditors; (4) for the benefit of creditors, applying for or consenting
to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator, or similar officer for the Borrower or for
all or any part of the Borrower's property or assets; (5) instituting or consenting to any proceeding under any Debtor Relief Law with
respect to Borrower or all or any part of the Borrower's property or assets, or the institution of any similar case or proceeding without
the consent of the Borrower who is, or whose property or assets are, subject to such case or proceeding if such case or proceeding
continues undismissed or unstayed for 60 calendar days; or (6) the dissolution or liquidation of the Borrower that is a corporation or
other entity; or
(c)
(1) the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitation,
or similar officer for Borrower or for all or any part of the Borrower's property or assets without the application or consent of the
Borrower who is, or whose property or assets are, subject to such appointment, if such appointment continues undischarged or
unstayed for 60 calendar days; or (2) the issuance or levy of any judgment, writ, warrant of attachment or execution or similar process
against all or any material part of the property or assets of Borrower if such process is not released, vacated or fully bonded within 60
calendar days after its issue or levy; or
(d)
the taking of any action by Borrower to initiate any of the actions described in Sections 3.2(c)
or 3.2(d).
As used in this Note, the term Debtor Relief Law shall mean the Bankruptcy Code of the United States of America, as
amended, or any other similar debtor relief law affecting the rights of creditors generally.
3.3
Borrower shall defend, indemnify, and hold harmless Lender from and against all costs, liabilities,
losses, and expenses (including, without limitation, attorneys' fees and all costs) with respect to any action or proceeding that Lender
incurs resulting from and arising out of Borrower's default under this Note.
2
4.
Late Payment Charge. Borrowers acknowledge that late payment will cause Lender to incur costs and other
damages not otherwise provided for in this Note. Therefore, if any installment is not received by Lender within seven days of the date
on which such installment was due, a late charge in the amount of 5% of the past due installment shall be immediately due and
payable. Acceptance of any late payment or late charge will not constitute a waiver of the default with respect to the overdue amount
and shall not prevent Lender from exercising any of Lender's other rights and remedies under this Note.
5.
Default Interest Rate. Upon the occurrence of an Event of Default, the unpaid principal balance of this Note,
together with all accrued but unpaid interest on the date of the Event of Default, shall bear interest at the rate of 12% per annum until
paid in full.
6.
Prepayment Option. Borrower may, at Borrower's option, prepay the unpaid principal balance of this Note, in
whole or in part, together with all accrued interest, through the business day of prepayment, on the portion so prepaid, without
premium or penalty.
7.
Miscellaneous
7.1
Borrower and all guarantors and endorsers of this Note severally waive (a) presentment, demand,
protest, notice of dishonor, and all other notices, except as expressly provided in this Note; (b) any release or discharge arising from
any extension of time, discharge of a prior party, release of any or all of the security for this Note; and (c) any other cause of release or
discharge other than actual payment in full of all indebtedness evidenced by or arising under this Note.
7.2
The Lender shall not be deemed, by any act or omission, to have waived any of its rights or remedies
under this Note unless such waiver is in writing and signed by Lender and then only to the extent specifically set forth in such
writing. A waiver with reference to one event shall not be construed as continuing or as a bar to or waiver of any right or remedy as to
a subsequent event. No delay or omission of Lender to exercise any right, whether before or after an Event of Default, shall impair
any such right or shall be construed to be a waiver of any right or default, and the acceptance of any past-due amount at any time by
the Lender shall not be deemed to be a waiver of the right to require prompt payment when due of any other amounts then or
thereafter due and payable.
7.3
Lender may accept, indorse, present for payment, and negotiate checks marked "payment in full" or with
words of similar effect without waiving Lender's right to collect from Borrower the full amount owed by Borrower.
7.4
TIME IS OF THE ESSENCE UNDER THIS NOTE. Upon any Event of Default, the Lender may
exercise all rights and remedies provided for in this Note and by law, including, but not limited to, the right to immediate payment in
full of this Note.
3
7.5
The rights and remedies of the Lender as provided in this Note and in law or equity shall be cumulative
and concurrent, and may be pursued singularly, successively, or together at the sole discretion of the Lender, and may be exercised as
often as occasion therefor shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver
or a release of any such right or remedy.
7.6
It is expressly agreed that if this Note is referred to an attorney or if suit is brought to collect this Note or
any amount due under this Note, or to enforce or protect any rights conferred upon Lender by this Note then Borrower promises and
agrees to pay on demand all costs, including without limitation, reasonable attorneys' fees, incurred by Lender in the enforcement of
Lender's rights and remedies under this Note.
7.7
The terms, covenants, and conditions contained in this Note shall be binding upon the heirs, executors,
administrators, successors, and assigns of Borrower and shall inure to the benefit of the heirs, executors, administrators, successors
and assigns of Lender.
7.8
If any provisions of this Note would require the Borrower to pay interest on the indebtedness evidenced
by or arising under this Note at a rate exceeding the highest rate allowable by applicable law, Borrower shall instead pay interest under
this Note at the highest rate permitted by applicable law.
7.9
This Note shall be construed under and governed by the laws of the State of California without regard to
conflicts of law.
Borrower:
Asterias Biotherapeutics, Inc.
By:
s/Thomas Okarma
Thomas Okarma,
Chief Executive Officer
4
SCHEDULE A
TO
PROMISSORY NOTE
OF
ASTERIAS BIOTHERAPEUTICS, INC.
RECORD OF LOANS AND REPAYMENT OF LOANS
DATE
PRINCIPAL AMOUNT OF
LOAN
AMOUNT OF
PRINCIPAL
REPAID
5
UNPAID
PRINCIPAL
BALANCE
NOTATION OF
LOAN MADE BY
EXHIBIT 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the use in this Registration Statement on Form S-1 of our report dated April 2, 2013, relating to the financial statements
of Asterias Biotherapeutics, Inc. and to the reference to our Firm under the caption “Experts” in the Prospectus.
/s/ Rothstein Kass
New York, New York
April 2, 2013