As filed with the U.S. Securities and Exchange Commission on August 30 , 2018

 

File No. 001-38519

 

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Amendment No. 2

to

FORM 10

 

GENERAL FORM FOR REGISTRATION OF SECURITIES
Pursuant to Section 12(b) or (g) of The Securities Exchange Act of 1934

 

AgeX Therapeutics, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware   82-1436829
(State or other jurisdiction of   (I.R.S. Employer
incorporation or organization)   Identification No.)

 

1010 Atlantic Avenue

Alameda, California

  94502
(Address of Principal Executive Offices)   (Zip Code)

 

Registrant’s telephone number, including area code: (510) 871-4190

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class to be so Registered  

Name of Each Exchange on Which

Each Class is to be Registered

Common stock, par value $0.0001 per share   New York Stock Exchange

 

Securities to be registered pursuant to Section 12(g) of the Act:
None

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer [  ] Accelerated filer [  ]
Non-accelerated filer [  ] (Do not check if a smaller reporting company) Smaller reporting company [  ]
Emerging growth company [X]  

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [X]

 

 

 

     
 

 

INFORMATION REQUIRED IN REGISTRATION STATEMENT

 

CROSS-REFERENCE SHEET BETWEEN INFORMATION STATEMENT AND ITEMS OF FORM 10

 

Certain information required to be included in this Form 10 is incorporated by reference to specifically-identified portions of the body of the information statement filed herewith as Exhibit 99.1 (the “Information Statement”). None of the information contained in the Information Statement shall be incorporated by reference herein or deemed to be a part hereof unless such information is specifically incorporated by reference.

 

Item 1. Business

 

The information required by this item is contained under the sections of the Information Statement entitled “Information Statement Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Business.” Those sections are incorporated herein by reference.

 

Item 1A. Risk Factors

 

The information required by this item is contained under the section of the Information Statement entitled “Risk Factors.” That section is incorporated herein by reference.

 

Item 2. Financial Information

 

The information required by this item is contained under the sections of the Information Statement entitled “Summary and Selected Financial Data,” “Capitalization,” “ Unaudited Pro Forma Condensed Combined Financial Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Those sections are incorporated herein by reference.

 

Item 3. Properties

 

The information required by this item is contained under the section of the information statement entitled “Business—Facilities.” That section is incorporated herein by reference.

 

Item 4. Security Ownership of Certain Beneficial Owners and Management

 

The information required by this item is contained under the section of the Information Statement entitled “Security Ownership of Certain Beneficial Owners and Management.” That section is incorporated herein by reference.

 

Item 5. Directors and Executive Officers

 

The information required by this item is contained under the section of the Information Statement entitled “Management” and “Security Ownership of Certain Beneficial Owners and Management.” Those sections are incorporated herein by reference.

 

Item 6. Executive Compensation

 

The information required by this item is contained under the sections of the Information Statement entitled “Management—Compensation of Directors” and “Executive Compensation.” Those sections are incorporated herein by reference.

 

Item 7. Certain Relationships and Related Party Transactions; and Director Independence

 

The information required by this item is contained under the sections of the Information Statement entitled “Risk Factors—Risks Related to our Relationship with BioTime,” “Management,” “Executive Compensation,” and “Certain Relationships and Related Party Transactions.” Those sections are incorporated herein by reference.

 

Item 8. Legal Proceedings

 

The information required by this item is contained under the section of the Information Statement entitled “Business—Legal Proceedings.” This section is incorporated herein by reference.

 

     
 

 

 

Item 9. Market Price of and Dividends on Registrant’s Common Equity and Related Stockholder Matters

 

The information required by this item is contained under the sections of the Information Statement entitled “Risk Factors,” “Dividend Policy,” “Capitalization,” “The Distribution,” “Shares Eligible for Future Sale,” and “Description of Securities.” Those sections are incorporated herein by reference.

 

Item 10. Recent Sales of Unregistered Securities

 

The information required by this item is contained under the section of the Information Statement entitled “Certain Relationships and Related Party Transactions.” That section is incorporated herein by reference.

 

Item 11. Description of Registrant’s Securities to be Registered

 

The information required by this item is contained under the sections of the Information Statement entitled “Risk Factors—Risks Pertaining to Our Common Stock,” “Dividend Policy” and “Description of Securities.” Those sections are incorporated herein by reference.

 

Item 12. Indemnification of Directors and Officers

 

The information required by this item is contained under the section of the Information Statement entitled “Management—Indemnification of Directors and Officers.” That section is incorporated herein by reference.

 

Item 13. Financial Statements and Supplementary Data

 

The information required by this item is contained under the sections of the Information Statement entitled “ Unaudited Pro Forma Condensed Combined Financial Statements ,” “Index to Audited Consolidated Financial Statements and Unaudited Condensed Consolidated Interim Financial Statements” (and the financial statements referenced therein). Those sections are incorporated herein by reference.

 

Item 14. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 

None.

 

Item 15. Financial Statement and Exhibits

 

(a) Financial Statements

 

The information required by this item is contained under the section of the Information Statement entitled “Index to Audited Consolidated Financial Statements and Unaudited Condensed Consolidated Interim Financial Statements” (and the financial statements referenced therein). Those sections are incorporated herein by reference.

 

(b) Exhibits.

 

Exhibit Number   Exhibit Description
     
2.1   Asset Purchase Agreement, dated as of August 13, 2018, by and between Escape Therapeutics, Inc. and AgeX Therapeutics, Inc.**##+
     
3.1   Certificate of Incorporation*
     
3.2   Bylaws*
     
4.1   Specimen of Common Stock Certificate**
     
10.1   Asset Contribution and Separation Agreement, dated August 17, 2017, between BioTime, Inc. and AgeX Therapeutics, Inc. (filed as Exhibit 10.1 to BioTime, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, and incorporated herein by reference)#
     
10.2   License Agreement, dated August 17, 2017, between BioTime, Inc. and AgeX Therapeutics, Inc. (filed as Exhibit 10.2 to BioTime, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, and incorporated herein by reference)#

 

     
 

 

 

10.3   Option to Purchase Shares of AgeX Therapeutics, Inc., dated August 4, 2017, granted by BioTime, Inc. to Alfred D. Kingsley (filed as Exhibit 10.3 to BioTime, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, and incorporated herein by reference)†
     
10.4   AgeX Therapeutics, Inc. 2017 Equity Incentive Plan (filed as Exhibit 10.1 to BioTime, Inc.’s Current Report on Form 8-K filed with the SEC on October 16, 2017, and incorporated herein by reference)†
     
10.5   Form of AgeX Therapeutics, Inc. Stock Option Agreement (filed as Exhibit 10.2 to BioTime, Inc.’s Current Report on Form 8-Q filed with the SEC on October 16, 2017, and incorporated herein by reference)†
     
10.6   Asset Purchase Agreement, dated March 21, 2018, between Ascendance Biotechnology, Inc. and AgeX Therapeutics, Inc.**##+
     
10.7   Sublicense Agreement, dated September 26, 2017, between BioTime, Inc. and AgeX Therapeutics, Inc.** ##
     
10.8   First Amendment, dated November 8, 2017, to License Agreement, dated August 17, 2017, between BioTime, Inc. and AgeX Therapeutics, Inc. *
     
10.9   Sublicense Agreement, dated August 17, 2017, by and among OrthoCyte Corporation, BioTime, Inc. and AgeX Therapeutics, Inc. *##
     
10.10   First Amendment, dated November 8, 2017, to Sublicense Agreement, dated August 17, 2017, between OrthoCyte Corporation, BioTime, Inc. and AgeX Therapeutics, Inc. *
     
10.11   License Agreement, dated August 17, 2017, by and between ES Cell International Ptd Ltd., BioTime, Inc. and AgeX Therapeutics, Inc. *##
     
10.12   Shared Facilities and Services Agreement, dated August 17, 2017, between BioTime, Inc. and AgeX Therapeutics, Inc.*
     
10.13   Employee Matters Agreement, dated August 17, 2017, between BioTime, Inc. and AgeX Therapeutics, Inc.*
     
10.14   Employment Agreement, by and between AgeX Therapeutics, Inc. and Hal Sternberg, dated August 21, 2017.†*
     
10.15   Tax Matters Agreement, dated August 17, 2017, between BioTime, Inc. and AgeX Therapeutics, Inc.* 1
     
10.16   Form of Registration Rights Agreement.*
     
10.17   License Agreement, dated August 17, 2017, between BioTime, Inc. and AgeX Therapeutics, Inc.* ##
     
21.1   Subsidiaries of the Registrant.*
     
99.1   Information Statement of AgeX Therapeutics, Inc., preliminary and subject to completion, dated August 30 , 2018**

 

* Previously filed.

 

** Filed herewith.

 

† Indicates management contract or compensatory plan.

 

# Confidential treatment has been granted with respect to portions of this exhibit (indicated by asterisks) and those portions have been separately filed by BioTime, Inc. with the Securities and Exchange Commission.

 

## Confidential treatment has been requested with respect to certain portions of this exhibit. Omitted portions have been filed separately with the Securities and Exchange Commission.

 

+ Certain schedules and exhibits to this agreement have been omitted in accordance with Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the Securities and Exchange Commission on request.

 

     
 

 

SIGNATURES

 

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this Amendment no. 2 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized on the 30 th day of August, 2018.

 

  AGEX THERAPEUTICS, INC.
   
  By: /s/ Michael D. West
    Michael D. West
    Chief Executive Officer

 

     
 

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY “[***],” HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

ASSET PURCHASE AGREEMENT

 

By and between

 

ESCAPE THERAPEUTICS, INC.

 

and

 

AGEX THERAPEUTICS, INC.

 

dated as of August 13,

 

2018

 

 
 

 

TABLE OF CONTENTS

 

ARTICLE I PURCHASE AND SALE 1
   
Section 1.01 Purchase and Sale of Assets 1
   
Section 1.02 Assumption of Liabilities 2
   
Section 1.03 Purchase Price 2
   
Section 1.04 Payment of Purchase Price 2
   
Section 1.05 Allocation of Purchase Price 2
   
Section 1.06 Withholding Tax 3
   
Section 1.07 Definitions 3
   
Section 1.08 Royalties 4
   
Section 1.09 Milestone Payments 5
   
ARTICLE II CLOSING 6
   
Section 2.01 Closing 6
   
Section 2.02 Closing Deliverables 6
   
Section 2.03 Shipment and Delivery of Purchased Assets 7
   
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER 7
   
Section 3.01 Organization and Authority of Seller; Enforceability 7
   
Section 3.02 No Conflicts; Consents 8
   
Section 3.03 Title to Purchased Assets 8
   
Section 3.04 Condition of Assets 8
   
Section 3.05 Acquired Patents and Know-How 8
   
Section 3.06 Ownership 9
   
Section 3.07 Patent Office and Legal Proceedings 9
   
Section 3.08 Enforcement 9
   
Section 3.10 Rights of Third Parties 10

 

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Section 3.11 Non-foreign Status 10
   
Section 3.12 Compliance With Laws 10
   
Section 3.13 Brokers 10
   
Section 3.14 Full Disclosure 10
   
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER 10
   
Section 4.01 Organization and Authority of Buyer; Enforceability 10
   
Section 4.02 No Conflicts; Consents 11
   
Section 4.03 Legal Proceedings 11
   
Section 4.04 Brokers. 11
   
ARTICLE V COVENANTS 11
   
Section 5.01 R&D Expenditures 11
   
Section 5.02 Public Announcements 12
   
Section 5.03 Transfer Taxes 12
   
Section 5.04 Further Assurances 12
   
ARTICLE VI CONDITIONS TO CLOSING 13
   
Section 6.01 Conditions to Obligations of Buyer 13
   
ARTICLE VII INDEMNIFICATION 14
   
Section 7.01 Survival 14
   
Section 7.02 Indemnification by Seller 14
   
Section 7.03 Indemnification by Buyer 14
   
Section 7.04 Indemnification Procedures 14
   
Section 7.05 Effect of Investigation 15
   
Section 7.06 Cumulative Remedies 15
   
ARTICLE VIII INVESTMENT REPRESENTATIONS AND COVENANTS 15
   
Section 8.01 Investment Representations and Warranties 15
   
Section 8.02 Restrictions on Transfer 17

 

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Section 8.03 Resale Volume Restriction 17
   
ARTICLE IX MISCELLANEOUS 18
   
Section 9.01 Expenses 18
   
Section 9.02 Notices 18
   
Section 9.03 Headings 19
   
Section 9.04 Severability 19
   
Section 9.05 Entire Agreement 19
   
Section 9.06 Successors and Assigns 19
   
Section 9.07 No Third-party Beneficiaries 19
   
Section 9.08 Gender; Including; Parties; Definitions 19
   
Section 9.09 Headings; Section and Other References 19
   
Section 9.10 Amendment and Modification 19
   
Section 9.11 Waiver 19
   
Section 9.12 Governing Law 20
   
Section 9.13 Submission to Jurisdiction 20
   
Section 9.14 Specific Performance 20
   
Section 9.15 Counterparts 20

 

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ASSET PURCHASE AGREEMENT

 

This Asset Purchase Agreement (this “ Agreement ”), dated as of August 13, 2018 is entered into between Escape Therapeutics, Inc., a California corporation (“ Seller ”) and AgeX Therapeutics, Inc., a Delaware corporation (“ Buyer ”).

 

RECITALS

 

WHEREAS, Seller is an early stage biotechnology company focused on accelerating commercial availability of allogeneic stem cell therapies; and,

 

WHEREAS, Seller wishes to sell and assign to Buyer, and Buyer wishes to purchase and assume from Seller, certain patents and other assets as further defined in this Agreement, subject to the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

ARTICLE I

PURCHASE AND SALE

 

Section 1.01 Purchase and Sale of Assets. Subject to the terms and conditions set forth in this Agreement, Seller shall sell, assign, transfer, convey, and deliver to Buyer, and Buyer shall purchase from Seller, all of Seller’s right, title, and interest in the assets described in this Section 1.01, including Schedules 1.01(a) through 1.01(g) (collectively, the “ Purchased Assets ”), free and clear of any mortgage, pledge, lien, charge, security interest, claim, or other encumbrance (“ Encumbrance ”):

 

(a) all patents and patent applications set forth in Schedule 1.01(a) , and all patents that issue from such patent applications, and all continuations, and continuations- in-part, divisionals, extensions, substitutions, reissues, re-examinations, and renewals, of any of the foregoing (“ Patents ”), and any other patents or patent applications from which any Patents claim priority or that claim priority from any Patents, and all inventions disclosed and claimed in any of the foregoing (collectively “ Acquired Patents ”);

 

(b) all royalties (other than the Royalty set forth in this Agreement), fees, income, payments, and other proceeds now or hereafter due or payable to Seller with respect to any of the Acquired Patents;

 

(c) all claims and causes of action against third-parties with respect to any of the Acquired Patents, whether accruing before, on, or after the date hereof, including all rights to and claims for damages, restitution, and injunctive and other legal and equitable relief for past, present, and future infringement, misappropriation, violation, breach, or default;

 

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(d) all know-how related to the Acquired Patents, including any and all technical information, trade secrets, formulas, prototypes, specifications, directions, instructions, test protocols, procedures, results, studies, analyses, data, manufacturing data, formulation or production technology, conceptions, ideas, innovations, discoveries, inventions, processes, methods, materials, formulae, enhancements, modifications, technological developments, techniques, systems, designs, drawings, plans, software, data, programs, and other knowledge, information, skills, and materials pertaining to the Acquired Patents, and any modifications, variations, derivative works, and improvements of or relating to any of the foregoing (collectively, “ Know-How ”);

 

(e) any and all laboratory notes, notebooks, and documentation in any and all media related to the Acquired Patents or Know-How (collectively, “ Lab Documents ”); and

 

(f) all equipment and supplies set forth in Schedule 1.01(f) (“ Equipment ”).

 

Section 1.02 Assumption of Liabilities. Subject to the terms and conditions set forth in this Agreement, Buyer shall assume and agree to pay, perform, and discharge the liabilities and obligations set forth on Schedule 1.02 , but only to the extent that such liabilities and obligations do not relate to any breach, default, or violation by Seller on or prior to the Closing (collectively, the “ Assumed Liabilities ”). Other than the Assumed Liabilities, Buyer shall not assume any liabilities or obligations of Seller of any kind, whether known or unknown, contingent, matured or otherwise, whether currently existing or hereinafter created (“ Retained Liabilities ”).

 

Section 1.03 Purchase Price. The aggregate purchase price for the Purchased Assets is $1,072,435.84 in cash plus 80,000 shares of Common Stock (collectively, the “ Purchase Price ”), which shall be paid to Seller as set forth in Section 1.04. Buyer and Seller agree that for the purpose of the payment of the Purchase Price, the Purchase Shares have a value of $2.50 per share, which is the price at which Buyer has most recently directly sold shares of its Common Stock.

 

Section 1.04 Payment of Purchase Price

 

(a) Closing Payment . Buyer shall pay $1,072,435.84 of the cash portion of the Purchase Price (“ Closing Payment ”) to Seller at the Closing (as defined below), by wire transfer of immediately available funds in accordance with the wire transfer instructions provided by Seller to Buyer no later than two Business Days prior to Closing. Buyer shall delver to Seller at Closing a stock certificate registered in the name of Seller evidencing 80,000 Purchase Shares (the “ Closing Shares” ).

 

Section 1.05 Allocation of Purchase Price. Seller and Buyer agree to allocate the Purchase Price among the Purchased Assets for all purposes (including tax and financial accounting) in accordance with Schedule 1.05 . Buyer and Seller shall file all tax returns (including amended returns and claims for refund) and information reports in a manner consistent with such allocation.

 

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Section 1.06 Withholding Tax. Buyer shall be entitled to deduct and withhold from the Purchase Price all taxes that Buyer may be required to deduct and withhold under any applicable tax law. All such withheld amounts shall be treated as delivered to Seller hereunder.

 

Section 1.07 Definitions. In addition to the definitions of terms found elsewhere in this Agreement, the following terms used in this Agreement shall have the following meanings:

 

(a) “ Business Day ” means a day other than a Saturday, Sunday, or other day on which commercial banks in California are authorized or required by law to be closed for business.

 

(b) “ Combination Product ” means (i) a product that contains a Patented Product component and one or more other essential functional components that could be sold separately and that perform(s) a useful function independent of the Patented Product component, such that the Patented Product component can also function independently of the other essential functional components; or (ii) a service that includes a Patented Service component, and one or more other service components that could be sold separately and that perform(s) a useful function independent of the Patented Service component, such that the Patented Service component can also function independently of the other service components. For the purposes of this Agreement, the parties agree that an “essential functional component” shall mean a substance, article, or device or set of substances, articles, or devices with a chemical, biochemical, and/or biological activity or a function that has utility in conjunction with a Patented Product or Patented Service.

 

(c) “Common Stock” means the common stock, par value $0.0001 per share, of Buyer.

 

(d) “FDA” means the United States Food and Drug Administration.

 

(e) “ Milestone Shares” means the shares of Common Stock issuable or issued pursuant to Section 1.09.

 

(f) “ Net Sales ” means the gross amount invoiced and actually collected by Buyer from the sale of Patented Products, Patented Processes, or Patented Services, less returns, allowances, or credits, rebates, excise, sales, use or value-added taxes, costs of packing, transportation, and insurance, delivery charges, cash and trade discounts allowed, import duty, and commissions to agents.

 

(g) “ Patented Process ” means any process that, in whole or in part absent Buyer’s acquisition of the Acquired Patents pursuant to this Agreement, would infringe one or more Valid Claims of the Acquired Patents or that uses a Patented Product.

 

(h) “ Patented Product ” means any product that, in whole or in part absent Buyer’s acquisition of the Acquired Patents pursuant to this Agreement, would infringe one or more Valid Claims of the Acquired Patents, or is manufactured by using a Patented Process or that, when used, practices a Patented Process.

 

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(i) “ Patented Service ” means any provision of service to a third party using Patented Products and/or Patented Processes or practice of the Acquired Patents on behalf of a third party using Patented Products and/or Patented Processes.

 

(j) “ Purchase Shares ” means the 80,000 shares of Common Stock to be issued to Seller as part of the Purchase Price, subject to Section 1.05.

 

(k) “ Quarterly Period ” means each three-month period commencing on the 1st of January, 1st of April, 1st of July, and 1st of October.

 

(l) “Securities Act” means the Securities Act of 1933, as amended from time to time.

 

(m) “ Term ” commences on the Closing Date (as defined in Section 2.01) and shall expire on a country by country basis upon the expiration or abandonment of the last Valid Claim.

 

(n) “Trading Day” means any day on which the Common Stock is traded on a national securities exchange or the OTC Bulletin Board, provided that “Trading Day” shall not include any day on which the Common Stock does not trade for at least 4.5 hours on at least one national securities exchange or the OTC Bulletin Board.

 

(o) “USPTO” means the United States Patent and Trademark Office.

 

(p) “ Valid Claim ” means (a) a claim of an issued and unexpired patent within the Acquired Patents, which claim has not been revoked or found to be unenforceable, unpatentable, or invalid by an unreversed and unappealable decision of a court or other governmental agency of competent jurisdiction, or (b) a claim set forth in an application within the Acquired Patents that has been filed in good faith and that has not been abandoned or finally rejected in a decision that is unappealable or unappealed within the time allowed for appeal.

 

(q) “VWAP” means the volume-weighted average price per share of the Common Stock for the last 30 consecutive Trading Days.

 

Section 1.08 Royalties

 

(a) Royalty . In addition to the Purchase Price and subject to the additional terms set forth in this Section 1.08 Buyer shall pay to Seller within forty-five (45) days of the last Business Day of each Quarterly Period during the Term a royalty of [ *** ]% of the Net Sales (“ Royalty ”).

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY “[***],” HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

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(b) Combination Products . In the case of Combination Products, Net Sales shall be multiplied by a proration factor determined by the formula [A / (A+B)], where A is the average gross sales price of all Patented Product or Patented Service components during such period when sold separately from the other components, and B is the average gross sales price of the other components during such period when sold separately from the Patented Product or Patented Service components.

 

(c) Royalty Stacking . If, Buyer in its sole discretion takes a royalty-bearing license under patent rights owned by a third party to make, use, offer to sell, sell, or import any Patented Product, Patented Process, or Patented Service, Buyer may deduct from any Royalty due under this Agreement, the royalties actually paid by Buyer to each such third party for such Patented Product, Patented Process, or Patented Service; provided, however, that such deduction shall not reduce the Royalty to equal less than [ *** ]% of the Net Sales of such Patented Product, Patented Process, or Patented Service.

 

(d) No Multiple Royalties . No multiple royalties shall be payable on the basis that any Patented Product, Patented Process, or Patented Service, its manufacture, use, lease, sale, or performance are or shall be covered by more than one patent or patent application within the Acquired Patents.

 

Section 1.09 Milestone Payments. After the Closing, Buyer shall issue to Seller additional shares of Common Stock if Buyer attains the clinical development milestones for one or more cell therapy Patented Products shown in clauses (a) through (d) of this Section 1.09. For the purpose of determining the number of shares of Common Stock to be issued to Seller upon the attainment of a milestone pursuant to this Section 1.09, the Common Stock shall be valued at the greater of (i) the VWAP per share determined on the date the applicable milestone is achieved if the Common Stock is then publicly traded, and (ii) $2.50 per share, subject to pro rata adjustment in the event of a split up, reverse split, or combination of the Common Stock, or pro rata distribution of shares of Common Stock by Buyer to holders of Common Stock without the payment of consideration by such holders. In each case, the milestone payment shall be made only if on the date the milestone is achieved the Patented Product is covered by a claim of an unexpired patent within the Acquired Patents issued by the USPTO, which claim has not been revoked or found to be unenforceable, unpatentable, or invalid by an unreversed and unappealable decision of a court of competent jurisdiction or by the USPTO. Milestone Shares shall be delivered to Seller not later than ten (10) Business Days after the applicable milestone is achieved.

 

(a) A number of shares of Common Stock valued at $[ *** ] shall be issued following commencement of a Phase I/II clinical trial by Buyer in the United States following the filing an investigation new drug filing with the FDA;

 

(b) A number of shares of Common Stock valued at $[ *** ] shall be issued following commencement of a Phase IIB clinical trial by Buyer in the United States;

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY “[***],” HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

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(c) A number of shares of Common Stock valued at $ [*** ] shall be issued following commencement of a Phase III clinical trial by Buyer in the United States;

 

(d) A number of shares of Common Stock valued at $[ *** ] shall be issued following Buyer’s receipt of FDA approval of a New Drug Application or a Biologics License Application for the first indicated use of the Patented Product.

 

ARTICLE II

CLOSING

 

Section 2.01 Closing. Subject to the terms and conditions of this Agreement, the consummation of the transactions contemplated by this Agreement (the “ Closing ”) shall take place at the principal office of the Buyer on the second Business Day after all of the conditions to Closing set forth in ARTICLE VI are either satisfied or waived (other than conditions which, by their nature, are to be satisfied on the Closing Date), or at such other time, date or place as Seller and Buyer may mutually agree upon in writing. The date on which the Closing is to occur is referred to as the “ Closing Date ”.

 

Section 2.02 Closing Deliverables

 

(a) At the Closing, Seller shall deliver to Buyer the following:

 

(i) a bill of sale in the form of EXHIBIT A (the “ Bill of Sale ”) duly executed by Seller, transferring the Equipment and Lab Documents to Buyer;

 

(ii) an assignment of intellectual property in the form of EXHIBIT B (the “ Patent Assignment ”) and duly executed by Seller, transferring all of Seller’s right, title, and interest in and to the Acquired Patents to Buyer;

 

(iii) the complete prosecution files, including original granted patents, for all Acquired Patents in such form and medium as requested by Buyer, andall such other documents, correspondence, and information as are reasonably requested by Buyer to register, prosecute to issuance, own, enforce, or otherwise use the Acquired Patents, including any maintenance fees due and deadlines for actions to be taken concerning prosecution and maintenance of all Acquired Patents in the 90 day period following the date hereof;

 

(iv) the Consulting Agreement, by and between Seller and Buyer, in the form of EXHIBIT C (“ Consulting Agreement ”), duly executed by Seller and Basil M Hantash;

 

(v) a certificate pursuant to Treasury Regulations Section 1.1445-2(b) that Seller is not a foreign person within the meaning of Section 1445 of the Internal Revenue Code duly executed by Seller;

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY “[***],” HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

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(vi) a certificate of the Secretary or Assistant Secretary (or equivalent officer) of Seller certifying as to (A) the resolutions of the board of directors of Seller, duly adopted and in effect, which authorize the execution, delivery, and performance of this Agreement and the transactions contemplated hereby, (B) the names and signatures of the officers of Seller authorized to sign this Agreement and the documents to be delivered hereunder, and (C) the resolutions of the shareholders of Seller, which approve this Agreement and the transaction set forth in this Agreement; and,

 

(vii) such other customary instruments of transfer, assumption, filings or documents, in form and substance reasonably satisfactory to Buyer, as may be required to give effect to this Agreement.

 

(b) At the Closing, Buyer shall deliver to Seller the following:

 

(i) the Closing Payment;

 

(ii) a certificate in the name of Seller evidencing 80,000 Purchase Shares; and,

 

(iii) the Consulting Agreement duly executed by Buyer.

 

SECTION 2.03 Pick up of Purchased Assets . On the Closing Date or shortly thereafter, the Equipment and Lab Documents shall be picked up by Buyer for delivery to the principal office of the Buyer at the sole expense of the Buyer.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER

 

Seller represents and warrants to Buyer that the statements contained in this ARTICLE III are true and correct as of the date hereof. For purposes of this ARTICLE III, “Seller’s knowledge,” “knowledge of Seller” and any similar phrases shall mean the actual or constructive knowledge of any director or officer of Seller.

 

Section 3.01 Organization and Authority of Seller; Enforceability. Seller is a corporation duly organized, validly existing and in good standing under the laws of the state of California. Seller has full corporate power and authority to enter into this Agreement and the documents to be delivered hereunder (the “ Transaction Documents ”), to carry out its obligations hereunder and to consummate the transactions contemplated hereby and by the Transaction Documents. The execution, delivery and performance by Seller of this Agreement and the Transaction Documents and the consummation of the transactions contemplated hereby and by the Transaction Documents have been duly authorized by all requisite corporate action on the part of Seller. This Agreement and the Transaction Documents have been duly executed and delivered by Seller, and (assuming due authorization, execution and delivery by Buyer) this Agreement and the Transaction Documents constitute legal, valid and binding agreements and obligations of Seller, enforceable against Seller in accordance with their respective terms.

 

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Section 3.02 No Conflicts; Consents. The execution, delivery and performance by Seller of this Agreement and the Transaction Documents, and the consummation of the transactions contemplated hereby and by the Transaction Documents, do not and will not: (a) violate or conflict with the articles of incorporation, by-laws or other organizational documents of Seller; (b) violate or conflict with any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Seller or the Purchased Assets; (c) conflict with, or result in (with or without notice or lapse of time or both) any violation of, or default under, or give rise to a right of termination, acceleration or modification of any obligation or loss of any benefit under any contract or other instrument to which Seller is a party or to which any of the Purchased Assets are subject; or (d) result in the creation or imposition of any Encumbrance on the Purchased Assets. No consent, approval, waiver or authorization is required to be obtained by Seller from any person or entity (including any governmental authority) in connection with the execution, delivery and performance by Seller of this Agreement and the Transaction Documents, and the consummation of the transactions contemplated hereby or by the Transaction Documents.

 

Section 3.03 Title to Purchased Assets. Seller owns and has good title to the Purchased Assets, free and clear of all Encumbrances.

 

Section 3.04 Condition of Assets. The tangible personal property included in the Purchased Assets is in good condition and is adequate for the uses to which it is being put, and none of such tangible personal property is in need of maintenance or repairs except for ordinary, routine maintenance and repairs that are not material in nature or cost.

 

Section 3.05 Acquired Patents and Know-How

 

(a) Seller owns or has transferable, valid and enforceable rights to use all of the Acquired Patents set forth in Schedule 1.01(a) and Know-How, free and clear of all Encumbrances. Seller is not bound by any outstanding judgment, injunction, order, or decree restricting the use of the Acquired Patents or Know-How or restricting the licensing thereof to any person or entity. All Acquired Patents are valid, subsisting and in full force and effect and Seller has paid all maintenance fees and made all filings required to maintain Seller’s ownership thereof. For all Acquired Patents, Schedule 1.01(a) lists (A) the jurisdiction where the application or patent is located, (B) the application or patent number, and (C) the application or patent date.

 

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(b) To Seller’s knowledge, Seller’s prior and current use of the Acquired Patents and Know-How has not and does not infringe, violate, dilute or misappropriate the patents, trade secrets or proprietary information of any person or entity and there are no claims pending or threatened by any person or entity with respect to the ownership, validity, enforceability, effectiveness or use of the Acquired Patents or Know-How. To Seller’s knowledge, no person or entity is infringing, misappropriating, diluting or otherwise violating any of the such Acquired Patents or Know-How, and neither Seller nor any affiliate of Seller has made or asserted any claim, demand, or notice against any person or entity alleging any such infringement, misappropriation, dilution, or other violation.

 

(c) All persons having rights of inventorship with respect to the Acquired Patents have assigned such rights in full to Seller.

 

(d) Seller has disclosed to the United States Patent Office or each foreign patent office where a patent application for the Acquired Patents has been filed all prior art known to Seller, after due inquiry, related to the Acquired Patents.

 

Section 3.06 Ownership . Seller owns all right, title, and interest in and to the Purchased Assets, free and clear of liens, security interests, and other Encumbrances. Seller is in full compliance with all legal requirements applicable to the Purchased Assets and Seller’s ownership and use thereof.

 

Section 3.07 Patent Office and Legal Proceedings . None of the Patents have been or are currently involved in any reexamination, reissue, interference proceeding, ex parte, inter partes proceeding, or similar proceeding in the United States Patent Office or any foreign patent office, and Seller has no knowledge that such proceedings are pending or threatened. There are no claims, actions, suits, proceedings or governmental investigations (each, an “ Action ”) of any nature settled, pending, or threatened (including in the form of offers to obtain a license): (i) alleging any infringement, misappropriation, or other violation of the intellectual property rights of any third party based on the use or exploitation of any Purchased Assets; (ii) challenging the validity, patentability, enforceability, issuance, or ownership of any Purchased Assets or Seller’s rights with respect thereto; or (iii) by Seller alleging any infringement, misappropriation, or other violation by any third party of any Purchased Assets.

 

Section 3.08 Enforcement . Seller has not put a third party on notice of infringement of any of the Acquired Patents.

 

Section 3.09 Rights of Third-Parties . To Seller’s knowledge, no Acquired Patent or Know-How is co-owned by, licensed to, or otherwise controlled by any other person or entity, including any current or former employee, officer, director, consultant, or contractor of Seller. Seller does not have any commitment, obligation, or duty, nor is it bound by any agreement to disclose, assign, or offer or grant any right or license to or pay any royalty related to any Acquired Patent or Know-How to any third person or entity. To Seller’s knowledge, no Acquired Patent is, or will become as a result of any action or failure to act on the part of Seller, subject to any (i) covenant not to sue, release, consent, or similar limitation on enforcement of such Acquired Patent; (ii) option to acquire or reversionary right; or (ii) grant of any right to any recoveries or proceeds from the enforcement or exploitation of such Acquired Patent.

 

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Section 3.10 Non-foreign Status. Seller is not a “foreign person” as that term is used in Treasury Regulations Section 1.1445-2.

 

Section 3.11 Compliance with Laws Seller has complied, and is now complying, with all applicable federal, state, and local laws and regulations applicable to ownership and use of the Purchased Assets.

 

Section 3.12 Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Seller.

 

Section 3.13 Full Disclosure. No representation or warranty by Seller in this Agreement and no statement contained in the Schedules to this Agreement or any certificate or other document furnished or to be furnished to Buyer pursuant to this Agreement contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not misleading.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF BUYER

 

Buyer represents and warrants to Seller that the statements contained in this ARTICLE IV are true and correct as of the date hereof. For purposes of this ARTICLE IV, “Buyer’s knowledge,” “knowledge of Buyer” and any similar phrases shall mean the actual knowledge of the Chief Executive Officer or Chief Financial Officer of Buyer.

 

Section 4.01 Organization and Authority of Buyer; Enforceability. Buyer is a corporation duly organized, validly existing and in good standing under the laws of the state of Delaware. Buyer has full corporate power and authority to enter into this Agreement and Transaction Documents, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution, delivery and performance by Buyer of this Agreement and the Transaction Documents and the consummation of the transactions contemplated hereby and by the Transaction Documents have been duly authorized by all requisite corporate action on the part of Buyer. This Agreement and the Transaction Documents have been duly executed and delivered by Buyer, and (assuming due authorization, execution and delivery by Seller) this Agreement and the Transaction Documents constitute legal, valid and binding agreements and obligations of Buyer enforceable against Buyer in accordance with their respective terms.

 

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Section 4.02 No Conflicts; Consents. The execution, delivery and performance by Buyer of this Agreement and the Transaction Documents, and the consummation of the transactions contemplated hereby and by the Transaction Documents, do not and will not: (a) violate or conflict with the certificate of incorporation, by-laws, or other organizational documents of Buyer; or (b) violate or conflict with any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Buyer, assuming for purposes of federal and state securities laws that the representations and warranties of Seller set forth in Section 8.01 are true and correct. No consent, approval, waiver or authorization is required to be obtained by Buyer from any person or entity (including any governmental authority) in connection with the execution, delivery and performance by Buyer of this Agreement and the Transaction Documents, and the consummation of the transactions contemplated hereby or by the Transaction Documents, assuming for purposes of federal and state securities laws that the representations and warranties of Seller set forth in Section 8.01 are true and correct.

 

Section 4.03 Legal Proceedings. There is no Action of any nature pending or, to Buyer’s knowledge, threatened against or by Buyer that challenges or seeks to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement. No event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such Action.

 

Section 4.04 Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Buyer.

 

ARTICLE V
COVENANTS

 

Section 5.01 R&D Expenditures. Buyer intends to undertake research and development efforts to develop Patented Products and Patented Processes utilizing human embryonic stem cells produced under current good manufacturing practices or utilizing human embryonic progenitor cells, and/or to further develop or improve Acquired Patents (“ Research Programs”) . If during the period from the Closing Date through December 31, 2019 Buyer has not incurred at least $1,000,000 of expenses reasonably allocable to Research Programs, Buyer shall pay Seller $500,000 by March 31, 2020. If Buyer’s total expenses reasonably allocable to Research Programs from the Closing date through December 31, 2020 still have not totaled $1,000,000, Buyer shall pay Seller an additional $500,000 by March 31, 2021 and the royalty payable by Buyer pursuant to Section 1.08(a) shall increase from [ ***] % to [ ***] % (subject to the other provisions of Section 1.08 until Buyer’s total expenses reasonably allocable to Research Programs from the Closing Date forward equal $1,000,000. For avoidance of doubt the $1,000,000 of expenses referenced in this Section shall include both direct expenses such as compensation of employees and consultants engaged in Research Programs exclusive of expenses incurred from Consulting Agreement of Section 2.02(b)(iii), third party fees for services and costs of supplies used or consumed for Research Programs, and indirect expenses such as facility costs and general and administrative expenses reasonably allocable to Research Projects, and shall be determined on a cumulative basis, among all Research Programs in the aggregate, and shall not be required for each Research Program. Seller shall have the right, at Seller’s expense, to designate a firm of certified public accountants to audit Buyer’s books and records, not more frequently than once every calendar year, to verify the expenses incurred by Buyer reasonably allocable to Research Programs. Any such audit(s) shall be conducted at Buyer’s principal place of business (or such other place where Buyer may maintain its accounting books and records), after not less than one week of prior written notice to Buyer, and shall be conducted in a manner that will not interfere with Buyer’s normal business operations or with the audit or review of Buyer’s financial statements or books and records by Buyer’s certified public accountants. The allocation of expenses to Research Programs shall be determined in accordance with United States generally accepted accounting principles ( GAAP ”). All information derived by Seller’s certified public accountants in the audit of Buyer’s books and records shall be Buyer’s confidential information and shall not be disclosed by such accountants or Buyer to any third party; provided that in the event that disclosure of such information becomes necessary in order for Seller to enforce Seller’s right under this Section 5.01, Seller and its accountants and attorneys shall cooperate with Buyer in obtaining a protective order or similar relief to maintain the confidentiality of such information in any lawsuit or similar proceeding. Seller’s right to have its certified public accountants audit Buyer’s books and records shall be conditioned upon such accountants entering into a written confidentiality agreement on customary terms and conditions for the benefit of Buyer. For the purpose of this Section 5.01, expenses allocable to Research Projects shall include expenses incurred by (a) Buyer and its majority-owned subsidiaries, and (b) any joint-venture or co-development arrangement in which Buyer, alone or with one or more of its subsidiaries, undertakes a Research Program with a third party.

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY “[***],” HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

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Section 5.02 Public Announcements. Unless otherwise required by applicable law or stock exchange requirements, Seller shall not make any public announcements regarding this Agreement or the transactions contemplated hereby without the prior written consent of Buyer. Buyer and its parent company, BioTime, Inc., may disclose this Agreement and the Transaction Documents in one or more reports or registration statements filed with the Securities Exchange Commission, and such disclosure shall not require any notification to or consent from Seller.

 

Section 5.03 Transfer Taxes. All transfer, documentary, sales, use, stamp, registration, value added and other such taxes and fees (including any penalties and interest) incurred in connection with this Agreement and the Transaction Documents shall be borne and paid by Seller when due. Seller shall, at its own expense, timely file any tax return or other document with respect to such taxes or fees (and Buyer shall cooperate with respect thereto as necessary).

 

Section 5.04 Further Assurances. Following the Closing, each of the parties shall execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement and the Transaction Documents. Without limiting the foregoing, and without limiting Section 2.02(a), Seller shall execute and deliver to Buyer such assignments and other documents, certificates, and instruments of conveyance in a form satisfactory to Buyer and suitable for filing with the USPTO and any foreign patent office registries, and other recording governmental authorities in all applicable jurisdictions (including with respect to legalization, notarization, apostille, certification, and other authentication) as necessary to record and perfect the Patent Assignment, and to vest in Buyer all right, title, and interest in and to the Acquired Patents in accordance with applicable law. As between Seller and Buyer, Buyer shall be responsible, at Buyer’s expense, for filing the Patent Assignment, and other documents, certificates, and instruments of conveyance with the applicable governmental authorities; provided that, upon Buyer’s reasonable request, Seller shall take such steps and actions, and provide such cooperation and assistance, to Buyer and its successors, assigns, and legal representatives, including the execution and delivery of any affidavits, declarations, oaths, exhibits, assignments, powers of attorney, or other documents, as may be necessary to effect, evidence, or perfect the assignment of the Purchased Assets to Buyer, or any of Buyer’s successors or assigns.

 

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ARTICLE VI

CONDITIONS TO CLOSING

 

Section 6.01 Conditions to Obligations of Buyer. The obligations of Buyer to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or Buyer’s waiver, at or prior to the Closing, of each of the following conditions:

 

(a) The representations and warranties of Seller contained in this Agreement, the Transaction Documents and any certificate or other writing delivered pursuant hereto shall be true and correct in all respects or in all material respects on and as of the date of this Agreement and on and as of the Closing Date with the same effect as though made at and as of such date (except those representations and warranties that address matters only as of a specified date, the accuracy of which shall be determined as of that specified date in all respects).

 

(b) Seller shall have duly performed and complied in all material respects with all agreements, covenants, and conditions required by this Agreement and each of the Transaction Documents to be performed or complied with by it prior to or on the Closing Date.

 

(c) No Action shall have been commenced against Buyer or Seller, which would challenge the Closing or the enforceability or validity of this Agreement or any Transaction Document or the consummation of any transaction contemplated by this Agreement or any Transaction Document.

 

(d) No injunction or restraining order shall have been issued by any governmental authority, and be in effect, which restrains or prohibits any transaction contemplated hereby or any Transaction Document.

 

(e) Duly executed originals of all documents and certificates required to be delivered by Seller pursuant to Section 2.02(a).

 

(f) Seller shall have delivered to Buyer such other documents or instruments as Buyer reasonably requests and are reasonably necessary to consummate the transactions contemplated by this Agreement and the Transaction Documents.

 

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ARTICLE VII
INDEMNIFICATION

 

Section 7.01 Survival. All representations, warranties, covenants and agreements contained herein and all related rights to indemnification shall survive the Closing.

 

Section 7.02 Indemnification by Seller. Seller shall defend, indemnify, and hold harmless Buyer, its affiliates and their respective stockholders, directors, officers, and employees from and against all claims, judgments, damages, liabilities, settlements, losses, costs and expenses, including attorneys’ fees and disbursements (collectively, “ Claims ”), arising from or relating to (i) any breach of any of the representations or warranties of Seller contained in this Agreement; (ii) any breach or non-fulfillment of any covenant, agreement, or obligation to be performed by Seller pursuant to this Agreement or any Transaction Document; (iii) any and all Retained Liabilities, and (iv) any and all Encumbrances on the Purchased Assets as of Closing.

 

Section 7.03 Indemnification by Buyer. Buyer shall defend, indemnify, and hold harmless Seller, its affiliates and their respective stockholders, directors, officers and employees from and against all Claims arising from or relating to any and all Assumed Liabilities.

 

Section 7.04 Indemnification Procedures . Each party entitled to indemnification under this ARTICLE VII (the “ Indemnified Party ”) shall give written notice (“ Indemnification Notice ”) to the party required to provide indemnification (the “ Indemnifying Party ”) promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom; provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or any litigation resulting therefrom, shall be approved by the Indemnified Party (whose approval shall not unreasonably be withheld). The Indemnified Party may participate in such defense at the Indemnified Party’s own expense; provided, that the Indemnified Party shall be entitled to engage, at the Indemnifying Party’s expense, separate counsel to represent Indemnified Party in the defense of any claim if (i) Indemnifying Party fails to engage counsel and to defend against the claim within 20 days of the Indemnified Party’s delivery of the Indemnification Notice to the Indemnifying Party, (ii) if any conflict of interest arises between the Indemnifying Party and the Indemnified Party with respect to the defense of the claim, or (iii) if the Indemnified Party has one or more defenses that are not available to or are different from those available to the Indemnifying Party. The failure of an Indemnified Party to give Indemnification Notice as provided in this Section 7.04 shall not relieve the Indemnifying Party of its obligations under this ARTICLE VII except to the extent such failure results in the loss of substantive or procedural rights in the defense such action, but such failure shall not relieve the Indemnifying Party of any liability that the Indemnifying Party may have to any Indemnified Party otherwise than under this ARTICLE VII. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party (which consent shall not be unreasonably withheld or delayed), consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation; provided, that the Indemnified Party may withhold its consent to any settlement or the entry of any judgment that would impose any injunctive or similar relief upon Indemnified Party.

 

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Section 7.05 Effect of Investigation. Buyer’s right to indemnification or other remedy based on the representations, warranties, covenants and agreements of Seller contained herein will not be affected by any investigation conducted by Buyer with respect to, or any knowledge acquired by Buyer at any time, with respect to the accuracy or inaccuracy of or compliance with, any such representation, warranty, covenant, or agreement.

 

Section 7.06 Cumulative Remedies. The rights and remedies provided in this ARTICLE VII are cumulative and are in addition to and not in substitution for any other rights and remedies available at law or in equity or otherwise.

 

ARTICLE VIII

INVESTMENT REPRESENTATIONS AND COVENANTS

 

Section 8.01 Investment Representations and Warranties. Seller makes the following additional representations and warranties to Buyer in connection with the issuance of the Purchase Shares and Seller’s agreement to accept Milestone Shares:

 

(a) Authorized to Hold Shares. Seller (a) is authorized and otherwise duly qualified to purchase and hold the Purchase Shares and Milestone Shares; (b) has its principal place of business as set forth in Section 9.02; and (c) has not been formed or reorganized for the purpose of acquiring Purchase Shares or Milestone Shares.

 

(b) Accredited Investor. Seller qualifies as an “accredited investor” under Regulation D promulgated under the Securities Act in that Seller is an entity in which all of the equity owners meet the requirements of at least one of items (1) through (7) of paragraph (a) of Rule 501 of Regulation D.

 

(c) Due Diligence. Seller has made such investigation of Buyer as Seller deemed appropriate for determining to acquire (and thereby make an investment in) the Purchase Shares and Milestone Shares. In making such investigation, Seller has had access to such financial and other information concerning Buyer as Seller requested. Seller has received and has had the opportunity to read copies of the Certificate of Incorporation of Buyer, the Bylaws of Buyer, Buyer’s Registration Statement on Form 10 as filed with the United States Securities and Exchange Commission (the “ SEC ”) on June 8, 2018, as amended by Amendment No. 1 filed with the SEC on July 19, 2018 (the “ Form 10 ”), including all exhibits filed therewith which constitute the “ Disclosure Documents .” Seller is relying on the information provided in the Disclosure Documents or otherwise communicated to Seller in writing by Buyer. Seller has not relied on any statement or representations inconsistent with those contained in the Disclosure Documents or otherwise communicated to Seller in writing by Buyer. Seller has had a reasonable opportunity to ask questions of and receive answers from the executive officers of Buyer concerning Buyer, and to obtain additional information (including all exhibits listed in the Disclosure Documents), to the extent possessed or obtainable by Buyer without unreasonable effort or expense, necessary to verify the information in the Disclosure Documents. All such questions have been answered to Seller’s satisfaction.

 

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(d) Risk Factors. Seller understands that Buyer will be subject to the risks described in the Form 10. Buyer is majority-owned subsidiary of BioTime, Inc. (“ BioTime ”) and Seller has read or has had access to and the opportunity to read the risk factor disclosures contained in BioTime’s public filings, including its most recent Form 10-K, as amended, and Form 10-Q filed with the SEC, as many of the risk factors contained in such filings relate to Buyer as well.

 

(e) Forward Looking Statements. Matters discussed in the Form 10 and in BioTime’s Form 10-K, as amended, an d Form 10-Q include matters that may be considered “forward looking” statements within the meaning of Section 27(a) of the Securities Act and Section 21(e) of the Securities Exchange Act of 1934, as amended, which statements Seller acknowledges and agrees are not guarantees of future performance and involve a number of risks and uncertainties.

 

(f) Unregistered Offer and Sale. Seller understands that the Purchase Shares and Milestone Shares are being offered, and the Purchase Shares and the Milestone Shares (if issued) are being sold, without registration under the Securities 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 any other country or jurisdiction, in reliance upon exemptions from such registration and qualification requirements. Seller 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 Seller, and the information provided by Seller, in this Section 8.01. Seller is making such representations, declarations and warranties, and is providing such information, with the intent that the same may be relied upon by Buyer and its officers and directors, and by BioTime and BioTime’s officers and directors, in determining Seller’s suitability to acquire the Purchase Shares and Milestone Shares. Seller understands and acknowledges that neither the SEC nor any other federal or state agency or commission has reviewed or endorsed the offering of the Purchase Shares and Milestone Shares or made any finding or determination as to the fairness of the offering or sale of the Purchase Shares and Milestone Shares or the completeness or correctness of the information in the Disclosure Documents.

 

(g) Restrictions on Transfer. Seller understands that the Purchase Shares and Milestone Shares received by Seller may not be offered, sold, or transferred by Seller in any manner unless subsequently registered under the Securities Act and registered or qualified under applicable state securities laws, unless there is an exemption from such registration and qualification available for such offer, sale or transfer.

 

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(h) Knowledge and Experience. The officers and directors of Seller making the decision on behalf of Seller to acquire the Purchase Shares and Milestone Shares have such knowledge and experience in financial and business matters to enable Seller to utilize the information contained in the Disclosure Documents or otherwise made available to Seller to evaluate the merits and risks of an investment in the Purchase Shares and Milestone Shares and to make an informed investment decision.

 

(i) Investment Intent. Seller is acquiring the Purchase Shares and Milestone Shares solely for Seller’s own account and for investment purposes, and not with a view to, or for sale in connection with, any distribution of the Purchase Shares and Milestone Shares, other than pursuant to an effective registration statement under the Securities Act or unless there is an exemption from such registration available for such offer, sale or transfer.

 

(j) No Public Market. There is currently no public market for the Purchase Shares and Milestone Shares and there can be no assurance that there will ever be a public market for the Purchase Shares and Milestone Shares and, as such, the Purchase Shares and Milestone Shares should be viewed as an illiquid investment.

 

(k) No Assurance of Return on Investment. It has never been represented, guaranteed or warranted to Seller by Buyer or BioTime, or by any officer, director, employee, or agent of Buyer or of BioTime, that Seller will realize any specific value, sale price, or profit as a result of acquiring the Purchase Shares and Milestone Shares.

 

Section 8.02 Restrictions on Transfer .

 

(a) Seller agrees that it will not sell, offer for sale, or transfer any of the Purchase Shares and Milestone Shares unless those Purchase Shares and Milestone Shares have been registered under the Securities Act, or unless there is an exemption from such registration and an opinion of counsel reasonably acceptable to Buyer has been rendered stating that such offer, sale, or transfer will not violate the Securities Act or any other United States federal or state securities laws.

 

(b) The certificates or book entries evidencing Purchase Shares and Milestone Shares will contain a legend to the effect that transfer is prohibited except pursuant to registration under the Securities Act, or pursuant to an available exemption from registration under the Securities Act.

 

(c) Buyer will refuse to register the transfer, and will issue instructions to any transfer agent and registrar of the Purchase Shares and Milestone Shares to refuse to register the transfer, of any Purchase Shares and Milestone Shares not made pursuant to registration under the Securities Act or pursuant to an available exemption from registration under the Securities Act.

 

Section 8.03 Resale Volume Restriction . Seller agrees that if the Common Stock becomes traded on a national securities exchange or on the OTC Bulletin Board, Seller shall not sell more than a total of 5,000 Purchase Shares and Milestone Shares during any calendar week.

 

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ARTICLE IX
MISCELLANEOUS

 

Section 9.01 Expenses. All costs and expenses incurred in connection with the execution and delivery of this Agreement and the Transaction Documents and the consummation of the transactions contemplated hereby and by the Transaction Documents shall be paid by the party incurring such costs and expenses.

 

Section 9.02 Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized next Business Day courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent before 5:00 pm on a Business Day, and on the next Business Day if sent after 5:00 pm or on a day other than a Business Day; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 9.02):

 

If to Seller:

Escape Therapeutics, Inc.

3800 Geer Road, Suite 200

  Turlock CA 95382
  Tel: 408-204-8946 
  E-mail: basil@escapetherapeutics.com 
  Attention: Basil M. Hantash 
   
If to Buyer: AgeX Therapeutics, Inc.
  1010 Atlantic Avenue, Suite 102
  Alameda, CA 94501
  E-mail: mwest@biotimeinc.com
  Attention: Michael D. West
   
with a copy to:

Thompson, Welch, Soroko, & Gilbert LLP

450 Pacific Avenue, Suite 200

  San Francisco, CA 94133
  Tel: 415-448-5000
  E-mail: rsoroko@twsglaw.com
  Attention: Richard Soroko

 

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Section 9.03 Headings. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

 

Section 9.04 Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.

 

Section 9.05 Entire Agreement. This Agreement and the documents to be delivered hereunder constitute the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein, and supersede all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter.

 

Section 9.06 Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties and their respective successors and permitted assigns. Neither party may assign its rights or obligations hereunder without the prior written consent of the other party. No assignment shall relieve the assigning party of any of its obligations hereunder.

 

Section 9.07 No Third-party Beneficiaries. Except as provided in ARTICLE VII, this Agreement is for the sole benefit of the parties and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

 

Section 9.08 Gender; Including; Parties; Definitions . Whenever appropriate in this Agreement, terms in the singular form shall include the plural (and vice versa) and any gender form shall include all others. “Including” means “including, without limitation” unless otherwise specifically required by context. Reference to a “party” or “parties” is reference to a party to, or the parties of, this Agreement, unless specified otherwise or otherwise required by context. Defined terms as used in this Agreement include all appropriate word variations of such terms, including tense and number variations.

 

Section 9.09 Headings; Section and Other References . Article, section, paragraph, and similar headings are for the convenience of the parties and do not form a part of this Agreement. References in this Agreement to articles, sections, paragraphs, and exhibits are references to articles, sections, and paragraphs in this Agreement and exhibits attached to this Agreement unless specified otherwise.

 

Section 9.10 Amendment and Modification. This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each party.

 

Section 9.11 Waiver. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

 

19
 

 

Section 9.12 Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of California without giving effect to any choice or conflict of law provision or rule (whether of the State of California or any other jurisdiction).

 

Section 9.13 Submission to Jurisdiction. Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby may be instituted in the federal courts of the United States of America or the courts of the State of California in each case located in the city of Oakland and county of Alameda, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding.

 

Section 9.14 Specific Performance. The parties agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy to which they are entitled at law or in equity.

 

Section 9.15 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

 

[Signature page follows.]

 

20
 

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

 

Buyer :   Seller :
         
AgeX Therapeutics, Inc., a Delaware corporation   Escape Therapeutics, Inc., a California corporation
         
By: /s/ Michael West   By: /s/ Basil M. Hantash
Name: Michael West   Name: Basil M. Hantash
Title: CEO   Title: CEO & Chairman
Date: August 13, 2018      
         
      By:  
      Name:  
By:     Title:  
Name:        
Title:        

 

21
 

 

EXHIBITS AND DISCLOSURE SCHEDULES

 

Exhibits

 

EXHIBIT A: Bill of Sale
   
EXHIBIT B: Patent Assignment
   
EXHIBIT C: Consulting Agreement

 

Schedules

 

Schedule 1.01(a) Acquired Patents
   
Schedule 1.01(f) Equipment
   
Schedule 1.02 Assumed Liabilities
   
Schedule 1.05 Allocation of Purchase Price

 

 
 

 

EXHIBIT A

 

BILL OF SALE

 

This Bill of Sale dated as of August 13, 2018 (“ Effective Date ”) is by Escape Therapeutics, Inc., a California corporation (“ Seller ”), in favor of AgeX Therapeutics, Inc., a Delaware corporation (“ Buyer ”). This Bill of Sale is made pursuant to the Asset Purchase Agreement, dated as of July 31, 2018 (the “ Purchase Agreement ”) by and between Seller and Buyer, to transfer the Purchased Assets (as defined below). Any capitalized term used but not defined in this Bill of Sale shall have the meaning set forth in the Purchase Agreement.

 

1. Conveyance . For good and valuable consideration in the amount paid under the Agreement, the receipt and adequacy of which Seller hereby acknowledges, Seller hereby irrevocably sells, assigns, transfers, conveys, grants, bargains, and delivers to Buyer, all of its right, title, and interest in the following Purchased Assets:

 

(a) all equipment and supplies set forth in Schedule 1 attached hereto; and,

 

(b) any and all laboratory notes, notebooks, and documentation in any and all media related to the Acquired Patents or Know-How.

 

2. Further Assurances . Seller, for itself and its successors and assigns, hereby covenants and agrees that, at any time and from time to time on Buyer’s written request, Seller will do, execute, acknowledge, and deliver or cause to be done, executed, acknowledged, and delivered, all such further acts, deeds, assignments, transfers, conveyances, powers of attorney, and assurances as may be reasonably required by Buyer in order to assign, transfer, set over, convey, assure, and confirm unto and vest in Buyer and its successors and assigns title to the assets sold, conveyed, and transferred by this Bill of Sale.

 

3. Counterparts . This Bill of Sale may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Bill of Sale delivered by facsimile, e-mail of a counterpart in pdf format, or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Bill of Sale.

 

IN WITNESS WHEREOF, Seller has duly executed and delivered this Bill of Sale as of the date first written above.

 

Escape Therapeutics, Inc., a California corporation  
     
By: /s/ Basil M. Hantash  
Name: Basil M. Hantash, MD, PhD  
Title: CEO & Chairman  

 

 
 

 

SCHEDULE 1

 

EQUIPMENT

 

[***]

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY “[***],” HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

 
 

 

EXHIBIT B

 

PATENT ASSIGNMENT AGREEMENT

 

This Patent Assignment Agreement (“ Patent Assignment ”) effective as of August 13, 2018 (the “ Effective Date ”), is by and between by Escape Therapeutics, Inc., a California corporation (“ Seller ”), and AgeX Therapeutics, Inc., a Delaware corporation (“ Buyer ”).

 

WHEREAS, Buyer is the purchaser of certain assets of Seller pursuant to the Asset Purchase Agreement, dated as of the Effective Date, by and between Buyer and Seller (the “ Purchase Agreement ”).

 

WHEREAS, under the terms of the Purchase Agreement, Seller has agreed to convey, transferred, and assigned to Buyer, among other assets, certain intellectual property of Seller, and has agreed to execute and deliver this Patent Assignment to evidence such conveyance, transfer, and assignment.

 

NOW THEREFORE, the parties agree as follows:

 

4. Assignment . For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller hereby irrevocably conveys, transfers, and assigns to Buyer, and Buyer hereby accepts, all of Seller’s right, title, and interest in and to the following (collectively, “ Acquired IP ”):

 

(a) all patents and patent applications set forth in Schedule 1 attached hereto, and all patents that issue from such patent applications, and all continuations, and continuations-in-part, divisionals, extensions, substitutions, reissues, re-examinations, and renewals, of any of the foregoing (“ Patents ”), and any other patents or patent applications from which any Patents claim priority or that claim priority from any Patents, and all inventions disclosed and claimed in any of the foregoing (collectively “ Acquired Patents ”);

 

(b) all royalties (other than the Royalty set forth in the Purchase Agreement), fees, income, payments, and other proceeds now or hereafter due or payable to Seller with respect to any of the Acquired Patents;

 

(c) all claims and causes of action against third-parties with respect to any of the Acquired Patents, whether accruing before, on, or after the date hereof, including all rights to and claims for damages, restitution, and injunctive and other legal and equitable relief for past, present, and future infringement, misappropriation, violation, breach, or default; and,

 

(d) all know-how related to the Acquired Patents, including any and all technical information, trade secrets, formulas, prototypes, specifications, directions, instructions, test protocols, procedures, results, studies, analyses, data, manufacturing data, formulation or production technology, conceptions, ideas, innovations, discoveries, inventions, processes, methods, materials, formulae, enhancements, modifications, technological developments, techniques, systems, designs, drawings, plans, software, data, programs, and other knowledge, information, skills, and materials pertaining to the Acquired Patents, and any modifications, variations, derivative works, and improvements of or relating to any of the foregoing (collectively, “ Know- How”).

 

5. Further Actions . Following the date hereof, upon Buyer’s reasonable request, and at Buyer’s sole cost and expense, Seller shall take such steps and actions, and provide such cooperation and assistance to Buyer and its successors, assigns, and legal representatives, including the execution and delivery of any affidavits, declarations, oaths, exhibits, assignments, powers of attorney, or other documents, as may be reasonably necessary to effect, evidence, or perfect the assignment of the Acquired IP to Buyer, or any assignee or successor thereto.

 

 
 

 

6. Terms of the Purchase Agreement . The parties hereto acknowledge and agree that this Patent Assignment is entered into pursuant to the Purchase Agreement, to which reference is made for a further statement of the rights and obligations of Seller and Buyer with respect to the Acquired IP. In the event of any conflict or inconsistency between the terms of the Purchase Agreement and the terms hereof, the terms of the Purchase Agreement shall govern.

 

7. Successors and Assigns . This Patent Assignment shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns.

 

8. Governing Law . This Patent Assignment shall be governed by and construed in accordance with the internal laws of the State of California without giving effect to any choice or conflict of law provision or rule (whether of the State of California or any other jurisdiction).

 

9. Counterparts . This Patent Assignment may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed one and the same agreement. A signed copy of this Patent Assignment delivered by facsimile, e-mail of a counterpart in pdf format, or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Patent Assignment.

 

[ Signature page follows .]

 

 
 

 

IN WITNESS WHEREOF, the parties have executed this Agreement to be effective as of the date first written above.

 

Seller :   Buyer :
     
Escape Therapeutics, Inc., a California corporation   AgeX Therapeutics, Inc., a Delaware corporation
         
By: /s/ Basil M. Hantash   By: /s/ Michael West
Name: Basil M. Hantash, MD, PhD   Name: Michael West
Title: CEO & Chairman   Title: CEO

 

 
 

 

SCHEDULE 1

 

ACQUIRED PATENTS

 

Matter No.   Title   Status   Application No.   Patent No.   Country
[***]   [***]   [***]   [***]   [***]   [***]

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY “[***],” HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

 
 

 

EXHIBIT C

 

Consulting Agreement

 

 
 

 

CONSULTING AGREEMENT

 

THIS AGREEMENT is made as of August 13, 2018 between AgeX Therapeutics, Inc., a Delaware corporation (the “Company”), Escape Therapeutics, I n c., a California corporation (“Escape”), and Basil M. Hantash (“Hantash”).

 

RECITALS

 

A. The Company has acquired certain patents, patent applications, rights related to patents and patent applications, know-how, an d related intellectual property (collectively the “Acquired IP”) from Escape pursuant to an Asset Purchase Agreement, dated as of August 13, 2018 (the “Asset Purchase Agreement”);

 

B. Pursuant to the Asset Purchase Agreement, Escape has agreed to provide to the Company consulting services to assist the Company in the prosecution of patent applications included in the Acquired IP and the use of the Acquired IP, including but not limited to research and development of products and performance of services and process utilizing or in reliance upon the Acquired IP;

 

C. The consulting services provided by Escape to the Company shall be performed by Hantash, as provided in this Agreement.

 

D. The term of this Agreement is from August 13, 2018 to August 12, 2021.

 

In consideration of the mutual covenants, promises, and agreements herein contained and for other good and valuable considerations, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows:

 

1. Engagement. The Company hereby agrees to engage Escape to provide to the Company the services of Escape’s Chief Executive Officer, Hantash, to perform the services described on Schedule A. Escape accepts such engagement. Hantash shall report to the [Chief Executive Officer] with regard to the consulting services performed on behalf of Escape for the Company under the terms of this Agreement. In addition to the performance of services for the Company, Escape shall, to the extent so required by the Company, also provide the services of Hantash for the performance of services for one or more Company subsidiaries that are members of a consolidated group of which the Company is a part (each a “Related Company”), provided that such services are consistent with the kind of services Escape performs or may be required to perform for the Company under this Agreement. If Escape performs any services for any Related Company, Escape shall not be entitled to receive any compensation or remuneration in addition to or in lieu of the compensation and remuneration provided under this Agreement on account of such services for the Related Company.

 

2. Payment for Services. The Company shall pay Escape the fees determined in accordance with Schedule A. Escape shall submit an invoice monthly specifying the services provided. The Company shall pay Escape’s fees by check or wire transfer to an account designated by Escape, due within 5 days after the receipt of the invoice. Escape shall be paid in arrears for each month of the term of this Agreement.

 

 
 

 

3. Independent Contractor.

 

(a) Escape is an independent contractor of the Company and nothing in this Agreement shall be deemed to constitute Escape or Hantash as an employee, officer, director, partner, or agent of the Company or any Related Company.

 

(b) Neither Escape nor Hantash shall have no authority to bind the Company or any Related Company to any contract, agreement, or obligation. Neither Escape nor Hantash shall not hold themselves out as the agent of the Company or any Related Company.

 

(c) Escape represents that Hantash has experience and expertise in the applicable field of this Agreement, and that Escape has sufficient resources and facilities to perform the services contemplated by this Agreement.

 

(d) Escape is responsible for all of Escape’s own business expenses and shall not be reimbursed by the Company for any costs or expenses incurred by Escape or Hantash in performing services under this Agreement; except that if the Company requests that Hantash travel to places that are located more than 50 miles from the Company’s headquarters, the Company shall either provide Hantash with transportation and lodging or shall reimburse Escape or Hantash for reasonable travel and lodging expenses incurred by either of them, provided that the Company is provided with invoices for such expenses and Escape and Hantash otherwise comply with the Company’s travel policies.

 

(e) Escape acknowledges and agrees that the fees for consulting services to be paid under Section 2 of this Agreement shall be the sole and exclusive compensation payable to Escape. Hantash acknowledges and agrees that he is providing services to the Company under this Agreement solely as an employee of Escape and not as an employee or consultant of the Company or any Related Company, and Hantash shall look solely to Escape for compensation for his services as an employee of Escape, including for services provided to the Company or any Related Company under this Agreement. Hantash shall not be entitled to participate in any retirement, pension, life, health, accident and disability insurance, or other similar employee benefit plans which may be adopted by the Company or any Related Company for its officers or employees, and shall not be entitled to any paid vacation or sick leave time from the Company or any Related Company.

 

(f) Escape represents and warrants to the Company that it is under no obligations or commitments, whether contractual or otherwise, that are inconsistent with Escape’s obligations under the Agreement or that would prohibit Escape or Hantash, contractually or otherwise, from performing services to the Company or any Related Company as provided herein. Hantash represents and warrants to the Company that he is under no obligations or commitments, whether contractual or otherwise, that are inconsistent with Escape’s obligations under the Agreement or that would prohibit him, contractually or otherwise, from performing services to the Company or any Related Company on behalf of Escape as provided herein.

 

 
 

 

(g) Escape represents and warrants that it will not use or disclose, in connection with the performance of consulting services to the Company or any Related Company, any patents, trade secrets, confidential information, or other proprietary information or intellectual property (other than the Acquired IP) as to which any other person or entity has any right, title or interest, except to the extent that the Company or a Related Company holds a valid license or other written permission for such use from the owner(s) thereof. Hantash represents and warrants that he will not use or disclose, in connection with the performance of consulting services to the Company or any Related Company on behalf of Escape, any patents, trade secrets, confidential information, or other proprietary information or intellectual property (other than the Acquired IP) as to which any other person or entity has any right, title or interest, except to the extent that the Company or a Related Company holds a valid license or other written permission for such use from the owner(s) thereof. Hantash represents and warrants to the Company that he has returned all property and confidential information (other than the Acquired IP) belonging to any prior employer.

 

4. Confidential Information. In providing services under this Agreement, Escape and Hantash will have access to, or the Company or a Related Company may disclose to Escape or Hantash, trade secrets and confidential information of the Company or a Related Company. Confidential Information includes the Acquired IP (except for such information as has been publicly disclosed in any patent application) and all other information and ideas, in any form, relating in any manner to the Acquired IP or matters such as: products; formulas; technology and know-how; inventions; research and development plans and data; clinical trial plans and data; business plans; marketing plans; the identity, expertise, and compensation of employees and contractors; systems, procedures, and manuals; customers; suppliers; joint venture partners; research collaborators; licensees; discussions with third parties concerning potential contracts or arrangements for the development, manufacture, marketing, distribution, and sale of Company or Related Company products, services, or processes, or for the licensing of Patent rights or other Company or Related Company patents or other intellectual property, and financial information. Confidential Information also shall include any information of any kind, whether belonging to the Company, a Related Company, or any third party, that the Company or a Related Company has agreed to keep secret or confidential under the terms of any agreement with any third party. Confidential Information does not include: (i) information that is or becomes publicly known through lawful means other than unauthorized disclosure by Escape or Hantash; (ii) information that was rightfully in the possession of Escape or Hantash prior to the date of this Agreement and was not assigned to the Company or a Related Company or was not disclosed to Escape or Hantash in connection with the performance of services for the Company or a Related Company; or (iii) information disclosed to Escape or Hantash, after the termination of this Agreement, by a third party who rightfully possesses the information and did not obtain it, either directly or indirectly, from the Company or a Related Company, and who is not subject to an obligation to keep such information confidential for the benefit of the Company, a Related Company, or any third party with whom the Company or a Related Company has a contractual relationship. Escape and Hantash understand and agree that all Confidential Information shall be kept confidential by Escape and Hantash both during and after the termination of this Agreement. Escape and Hantash each further agrees that it or he will not, without the prior written approval of the Company, disclose any Confidential Information, or use any Confidential Information in any way, either during the term of this Agreement or at any time thereafter, except as required by the Company or a Related Company in the course of performing consulting services for the Company or a Related Company under this Agreement. The provisions of this Section 4 shall survive termination of this Agreement for a period of 10 years.

 

 
 

 

5. Inventions/Intellectual Property/Proprietary Information

 

(a) Any and all inventions, discoveries, improvements or intellectual property which Escape or Hantash may conceive or make during the period and course of this Agreement or thereafter which are based on or utilize in any way any Confidential Information, Acquired IP or other patent, invention, trade secret, equipment, supplies, or facilities of the Company or a Related Company, or which resulted from any work performed by Escape or Hantash for the Company or a Related Company, shall be the sole and exclusive property of the Company or the applicable Related Company. The parties understand and agree that this limitation is intended to be consistent with California Labor Code, Section 2870, if applicable. If Escape or Hantash wish to clarify that something created by either of them prior to the date of this Agreement that relates to the Company’s or a Related Company’s actual or proposed business or research and development is not within the scope of this Agreement, they have listed it on an Appendix to this Agreement in a manner that does not violate any third party rights.

 

(b) Escape and Hantash each agrees to disclose promptly to the Company all improvements, discoveries, or inventions which Escape or Hantash, as the case may be, may make solely, jointly, or commonly with others, and to assign as appropriate such improvements, discoveries, inventions or intellectual property to the Company or a Related Company designated by the Company, where the rights are the property of the Company or Related Company. Escape and Hantash each agrees to execute and sign any and all applications, assignments, or other instruments which the Company or a Related Company may deem necessary in order to enable the Company or a Related Company, at its expense, to apply for, prosecute, and obtain patents of the United States or foreign countries for the improvements, discoveries, inventions or intellectual property, or in order to assign or convey to or vest in the Company or a Related Company the sole and exclusive right, title, and interest in and to said improvements, discoveries, inventions, or patents. Escape and Hantash each hereby irrevocably designates and appoints the Company as Escape’s or Hantash’s agent and attorney-in-fact, coupled with an interest and with full power of substitution, to act for and in Escape’s and Hantash’s behalf to execute and file any document and to do all other lawfully permitted acts to further the purposes of this paragraph with the same legal force and effect as if executed by Escape or Hantash. This paragraph is applicable whether or not the invention, discovery, improvement or intellectual property was made under the circumstances described in paragraph (a) of this Section. Escape and Hantash each agrees to make such disclosures understanding that the disclosures will be received in confidence and that, among other things, the disclosures are for the purpose of determining whether or not rights to the related invention, discovery, improvement, or intellectual property is the property of the Company or a Related Company.

 

 
 

 

6. Termination. Upon termination of the term of this Agreement, the Company shall have no further liability or obligation to Escape or Hantash under this Agreement except for payment of any consulting services and reimbursable travel expenses incurred by Escape between the Escape’s last invoice and the date of termination. This Agreement will terminate upon the first to occur of the following events:

 

(a) August 1, 2021;

 

(b) The death or disability of Hantash; provided that, disability shall mean Hantash’s inability to provide substantially all of the services required by the Company during any thirty (30) day period due to illness, injury, or bodily or mental infirmity;

 

(c) Hantash ceasing, for any reason, to be an employee of Escape or a successor company bound by this Agreement;

 

(d) The dissolution, liquidation, or winding-up of the business of Escape, except in connection with the sale or assignment of all or substantially all of the assets of Escape to a third party that has employed Hantash and agrees in writing to assume Escape’s obligations under this Agreement and to be bound by the terms of this Agreement, provided, that the Company has approved in writing the assumption of this Agreement by such third party;

 

(e) Upon written notice of termination from the Company to Escape, given at any time after the recession, or the institution of any proceeding or claim for recession, of the sale and assignment of the Acquired IP, in whole or in part, to the Company;

 

(f) Upon written notice of termination from the Company to Escape, given at any time after a third party asserts any right, title or interest in the Acquired IP, in whole or in part, or institutes any lawsuit or proceeding claiming that the Acquired IP, in whole or in part, infringe upon any patent or trade secret owned by or licensed to such third party;

 

(g) Upon thirty (30) days written notice from Escape to the Company in the event of a material breach or default by the Company in payment of the fees and expenses due and payable under this Agreement, provided that such breach or default is not cured by the Company within such thirty (30) day period; and

 

(h) Upon thirty (30) days written notice from the Company to Escape in the event of a material breach or default by Escape or Hantash in performance of any covenant, agreement, or obligation under this Agreement, provided that such breach or default is not cured within such thirty (30) day period.

 

7. Post-Termination Obligations of Escape. Upon termination of this Agreement, Escape and Hantash shall (i) cease providing services pursuant to this Agreement after the effective date of such termination, (ii) deliver to the Company or to the Company’s designee all materials, information, software, documents, and other work product, in printed, written, electronic or magnetic media, containing Confidential Information; (iii) return to the Company any and all equipment, documents, software, and information (whether or not the same constitute or include Confidential Information) in printed, written, electronic or magnetic media provided to Escape by the Company, by any Related Company, or by any third party in connection with Escape’s performance of consulting services for the Company or a Related Company; and (iv) continue to abide by those provisions of this Agreement that survive the termination of this Agreement

 

 
 

 

8. Indemnity. Escape shall indemnify, defend, and hold harmless the Company and each of the directors, officers, employees, and shareholders of the Company (the indemnified parties) from and against any and all lawsuits, proceedings, claims, demands, judgments, losses, damages, costs, or expenses (including attorneys’ fees and expenses) arising from or in connection with any and all of the following: (a) the failure on the part of Escape to pay any and all federal and state income tax and payroll taxes (including liability of Escape for withholding such taxes and F.I.C.A. and similar state or local payments in respect of Escape’s employees) incurred with respect to services performed under this Agreement by Hantash or any other employee or Escape, (b) fraud, willful violation of law, or any negligent acts or omissions of Escape or Hantash in connection with the performance of services for the Company or a Related Company pursuant to this Agreement, and (c) the breach of any of Escape’s representations, warranties, or covenants contained in this Agreement. The provisions of this Section 8 shall survive termination of this Agreement.

 

9. Workers Compensation . Insofar as required by applicable law, Escape shall provide workers compensation insurance to each of Escape’s employees (if any) in accordance with the relevant state and federal law.

 

10. Assignment. This Agreement is for personal services to be rendered by Escape. Escape’s rights and obligations under this Agreement may not be assigned or subcontracted by Escape without the prior written consent of the Company, which consent the Company may grant or deny at its sole and absolute discretion.

 

11. Arbitration. If the parties are unable to resolve any dispute between them arising out of, or related to, this Agreement, that dispute shall be resolved by arbitration according to the Optional Expedited Arbitration Procedures of JAMS. Arbitration proceedings shall be conducted in San Francisco, California. This section shall survive the termination of this Agreement.

 

12. Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a pdf document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the addresses shown on the signature page of this Agreement (or at such other address for a party as shall be specified in a notice given in accordance with this Section).

 

 
 

 

13. Entire Agreement. This Agreement supersedes any and all agreements, either oral or written, between the parties with respect to the rendering of services by Escape for the Company. This Agreement contains all of the representations, covenants, and agreements between the parties with respect to the rendering of services by and compensation of Escape.

 

14 Amendments; Modifications. Any amendment or modification of this Agreement will be effective only if it is in writing signed by the party to be charged.

 

15. 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 it 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. All remedies either under this Agreement or by law and otherwise afforded to any party shall be cumulative and not alternative.

 

16. 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.

 

17. 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, and the balance of this Agreement as so interpreted shall be enforceable in accordance with its terms.

 

18. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

 

19. Attorneys’ Fees. If any legal action, including any arbitration proceeding or lawsuit, is brought to enforce or interpret the provisions of this Agreement, the prevailing party will be entitled to reasonable attorneys’ fees.

 

20. Governing Law. This Agreement will be governed by and construed in accordance with the laws of the state of California .

 

 
 

 

IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the date first above written.

 

THE COMPANY:  
                              
AgeX Therapeutics, Inc.  
     
By: /s/ Michael D. West  
  Michael D. West,  
  Chief Executive Officer  

 

Address for notice: 1020 Atlantic Ave, Suite 102  
  Alameda, CA 94501  
  Email: mwest@AgeXTherapeuticsmail.com

 

ESCAPE:  
     
By: /s/ Basil M. Hantash  
Title: CEO & Chairman  

 

Address for notice: 3800 Geer Road, Suite 200  
  Turlock, CA 95382  
  Email: basil@escapetherapeutics.com  

 

HANTASH  
   
/s/ Basil M. Hantash  
Basil M. Hantash  

 

Address for notice: 3800 Geer Road, Suite 200  
  Turlock, CA 95382  
  Email: basil@escapetherapeutics.com  

 

 
 

 

SCHEDULE A

 

SERVICES AND FEES

1. Services

 

Hantash shall advise Company on matters relating to the genetic modification of cells in order to reduce immunogenicity of said cells, marketing of products and services relating to said modified cells, and general consulting on topics mutually agreed upon. Hantash shall report to the Company’s CEO.

 

2. Hours of Services

 

Escape shall perform services under this Agreement 4 days per month for a total of 48 work days per year during the term of this Agreement, on the basis of a 7.5 hour work day (a “Work Day”).

 

3. Fees and Expenses

 

In consideration of the services performed by Escape under this Agreement, the Company shall pay to Escape consulting fees of $200,000.00 per year which is equivalent of $4,166.67 per Work Day during the term of this Agreement. In the case of any partial Work Day during which services were provided, the foregoing consulting fee shall be prorated based on a fraction, the numerator of which shall be the number of hours for which services were actually rendered by Escape and the denominator of which shall be 7.5.

 

Escape shall be reimbursed only for reasonable, necessary, and prior approved out of pocket travel, food, and lodging expenses to the extent reimbursement is permitted under Section 3(d) and the Company’s travel policies.

 

Escape shall invoice the Company for fees and reimbursable expenses, if any. To ensure timely payment, all Escape invoices must reference a Company Purchase Order Number, and should be sent to:

 

AgeX Therapeutics Inc. 1010 Atlantic

Avenue

Suite 102

Alameda, CA 94501

ATTN: Accounts Payable

 

 
 

 

SCHEDULE 1.01(a)

 

Acquired Patents

 

Matter No.   Title   Status   Application No.   Patent No.   Country
[***]   [***]   [***]   [***]   [***]   [***]

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY “[***],” HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

 
 

 

SCHEDULE 1.01(f)

 

Equipment

 

[***]

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY “[***],” HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

 
 

 

 

 

 
 

 

 

 
 

 

 

EXECUTION VERSION

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY “[***],” HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

ASSET PURCHASE AGREEMENT

 

This Asset Purchase Agreement (this “ Agreement ”), dated as of March 21, 2018, is entered into between Ascendance Biotechnology, Inc., a Delaware corporation (the “ Company ”), and AgeX Therapeutics, Inc., a Delaware corporation (“ Buyer ”).

 

RECITALS

 

WHEREAS, the Company is primarily engaged in the business of developing, manufacturing and selling products and services using liver-related cells or cell types, including stem cell derived hepatocytes, for research in support of clinical diagnostics, research, drug development, biological modeling of disease or any other use related to the modeling, assessment or development of drugs, chemicals or cosmetics, including the trade-named HepatoPac®, HepatoMune® or HepatoStem™ products;

 

WHEREAS, the Company is also engaged in the business of developing, manufacturing and selling stem cells, products derived from stem cells and products related to stem cell research and toxicological screenings under the ESI BIO tradename, including ESI embryonic stem cells, PureStem® cells and Cytiva® cardiomyocytes (the “ Non-Liver Business ”); and

 

WHEREAS, the Company wishes to sell and assign to Buyer, and Buyer wishes to purchase and assume from the Company, the rights and obligations of the Company to the Purchased Assets and the Assumed Liabilities (as defined herein) related to the Non-Liver Business, subject to the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

Article I

 

PURCHASE AND SALE

 

Section 1.01 Purchase and Sale of Assets. Subject to the terms and conditions set forth herein, the Company shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase from the Company, the Company’s right, title and interest in the following assets (collectively, the “ Purchased Assets ”), free and clear of any mortgage, pledge, lien, charge, security interest, claim or other encumbrance (“ Encumbrance ”) except to the extent disclosed in this Agreement or the below referenced schedule attached hereto:

 

     
 

 

(a) the inventory, finished goods, raw materials, work in progress, packaging, supplies and parts set forth on Schedule 1.01(a) (collectively, “ Inventory ”);

 

(b) the contracts set forth on Schedule 1.01(b) (collectively, “ Assigned Contracts ”);

 

(c) the intellectual property set forth on Schedule 1.01(c) (“ Purchased IP ”);

 

(d) the equipment, supplies and other tangible personal property of the Company set forth on Schedule 1.01(d) ;

 

(e) all of the Company’s rights under warranties, indemnities, non-competition agreements, non-disclosure agreements, non-solicitation agreements, exclusive relationships, and all similar rights against third parties to the extent exclusively related to the Purchased Assets; and

 

(f) the books and records, including books of account, ledgers and general, financial and accounting records, machinery and equipment maintenance files, customer lists, customer purchasing histories, price lists, distribution lists, supplier lists, production data, quality control records and procedures, customer complaints and inquiry files, research and development files, records and data, sales material and records, strategic plans, internal financial statements and marketing and promotions surveys, material and research, that exclusively relate to the Non-Liver Business or the Purchased Assets set forth on Schedule 1.01(f) (all of which exclusively relate to the Non-Liver Business).

 

Section 1.02 Excluded Assets. Buyer expressly understands and agrees that, other than the Purchased Assets set forth in Section 1.01 , Buyer is not purchasing or acquiring, and the Company is not selling or assigning, any other assets or properties of the Company, and all such other assets and properties shall be excluded from the Purchased Assets (collectively, the “ Excluded Assets ”).

 

Section 1.03 Assumption of Liabilities. Buyer assumes and agrees to pay, perform and discharge any liabilities and obligations arising after the Closing (as defined herein) under the Purchased Assets (including the Assigned Contracts and/or Purchased IP, but only (a) to the extent provided in (i) that [***], and (ii) the Assignment and Assumption Agreement referenced in Section 2.02(a)(ii) with respect to all Assigned Contracts, and (b) to the extent that such liabilities and obligations do not relate to any breach, default or violation by the Company on or prior to the Closing) (collectively, the “ Assumed Liabilities ”). Other than the Assumed Liabilities, Buyer shall not assume any liabilities or obligations of the Company of any kind, whether known or unknown, contingent, matured or otherwise, whether currently existing or hereinafter created (such liabilities, the “ Retained Liabilities ”). Notwithstanding anything to the contrary herein, for the avoidance of doubt, any liabilities or obligations of the Company to [***]resulting from any pre-Closing breach or non-fulfillment of any covenant, agreement or obligation by the Company, and any obligation or liability of the Company to indemnify [***]with respect to any liability that arose or matter that occurred prior to Closing, under the [***], shall constitute (a) “Assumed Liabilities” to the extent related to the Non-Liver Business and (b) “Retained Liabilities,” to the extent not related to the Non-Liver Business.

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY “[***],” HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

     
 

 

Section 1.04 Purchase Price. The aggregate purchase price for the Purchased Assets and the agreement of the Company to execute and deliver the License Agreement (as defined below), the BioTime and ReCyte Sublicense (as defined below) and the ESI Sublicense (as defined below) shall be $800,000 (the “ Purchase Price ”), plus the assumption of the Assumed Liabilities. The Buyer shall pay the Purchase Price to the Company at the Closing in cash, by wire transfer of immediately available funds in accordance with the wire transfer instructions set forth on Schedule 1.04.

 

Section 1.05 Allocation of Purchase Price. The Company and Buyer agree to allocate the Purchase Price among the Purchased Assets for all purposes (including tax and financial accounting) in accordance with Schedule 1.05 . Buyer and the Company shall file all tax returns (including amended returns and claims for refund) and information reports in a manner consistent with such allocation.

 

Section 1.06 Withholding Tax. Buyer shall be entitled to deduct and withhold from the Purchase Price all taxes that Buyer is required to deduct and withhold under any applicable tax law. All such withheld amounts shall be treated as delivered to the Company hereunder.

 

Section 1.07 Third Party Consents. To the extent that the Company’s rights under any Assigned Contract, or any other Purchased Asset, may not be assigned to Buyer without the consent of another person which has not been obtained, this Agreement shall not constitute an agreement to assign the same if an attempted assignment would constitute a breach thereof or be unlawful, and the Company shall use its commercially reasonable efforts to obtain any such required consent(s) as promptly as possible. If any such consent shall not be obtained or if any attempted assignment would be ineffective or would impair Buyer’s rights under the Purchased Asset in question so that Buyer would not in effect acquire the benefit and burdens of all such rights, the Company shall use its reasonable best efforts to act after the Closing as Buyer’s agent (at Buyer’s expense) in order to obtain for it the benefits and burdens thereunder and shall reasonably cooperate with Buyer in any other reasonable arrangement designed to provide such benefits and burdens to Buyer. Buyer agrees that the Company shall have not any liability whatsoever to Buyer arising out of or relating to the failure to obtain any such consent or give any such notice, and no representation, warranty or covenant of the Company herein shall be breached or deemed breached, and no condition shall be deemed not satisfied, as a result of such failure or any suit, litigation, claim, action, arbitration, cease and desist letter or proceeding or investigation commenced or threatened by or on behalf of any person arising out of or relating to the failure to obtain any such consent.

 

Article II

 

CLOSING

 

Section 2.01 Closing. The closing of the transactions contemplated by this Agreement (the “ Closing ”) shall take place simultaneously with the execution of this Agreement on the date of this Agreement (the “ Closing Date ”) at the offices of Duane Morris LLP, 30 South 17th Street, Philadelphia, Pennsylvania 19103, or at such other location, or electronically, as the parties hereto may agree. The consummation of the transactions contemplated by this Agreement shall be deemed to occur at 12:01 a.m. on the Closing Date.

 

     
 

 

Section 2.02 Closing Deliverables.

 

(a) At the Closing, the Company shall deliver to Buyer the following:

 

(i) a bill of sale in form and substance reasonably acceptable to Buyer (the “ Bill of Sale ”) and duly executed by the Company, transferring the tangible personal property included in the Purchased Assets to Buyer;

 

(ii) an assignment and assumption agreement in form and substance reasonably acceptable to Buyer (the “ Assignment and Assumption Agreement ”) and duly executed by the Company, effecting the assignment to, and assumption by, Buyer of the Assigned Contracts and other intangible assets included in the Purchased Assets (other than the Purchased IP) and the Assumed Liabilities;

 

(iii) [***];

 

(iv) an assignment and assumption agreement in form and substance reasonably acceptable to Buyer (the “ Intellectual Property Assignment ”) and duly executed by the Company, transferring the Company’s right, title and interest in and to the Purchased IP to Buyer;

 

(v) the Patent License Agreement, dated March [__], 2018, by and between Buyer and the Company ( the “ License Agreement ”) and duly executed by the Company;

 

(vi) sublicense agreements in form and substance reasonably acceptable to Buyer and duly executed by the Company, sublicensing patent rights and other rights pursuant to: (i) that certain License Agreement, dated November 24, 2015 as amended from time to time, by and among BioTime, Inc., a California corporation, ReCyte Therapeutics, Inc., a California corporation, and the Company to Buyer (such sublicense, the “ BioTime and ReCyte Sublicense ”); (ii) that certain License Agreement effective as of November 24, 2015, as amended from time to time, by and between ESI and the Company to Buyer (such sublicense, the “ ESI Sublicense ”); and (iii) that certain Amended and Restated Exclusive Patent License Agreement, dated as of March [●], 2018, between the Company and the Massachusetts Institute of Technology (such sublicense, the “MIT Sublicense” and, together with the BioTime and ReCyte Sublicense and the ESI Sublicense, collectively, the “ Sublicenses ”);

 

(vii) copies of all consents, approvals, waivers and authorizations referred to in Section 3.02 of the disclosure schedules attached hereto (“ Disclosure Schedules ”);

 

(viii) a certificate pursuant to Treasury Regulations Section 1.1445-2(b) that the Company is not a foreign person within the meaning of Section 1445 of the Internal Revenue Code duly executed by the Company;

 

(ix) a certificate of the Secretary (or equivalent officer) of the Company certifying as to (A) the resolutions of the board of directors of the Company, duly adopted and in effect, which authorize the execution, delivery and performance of this Agreement and the transactions contemplated hereby, and (B) the names and signatures of the officers of the Company authorized to sign this Agreement and the documents to be delivered hereunder; and

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY “[***],” HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

     
 

 

(x) such other customary instruments of transfer, assumption, filings or documents, in form and substance reasonably satisfactory to Buyer, as may be required to give effect to this Agreement.

 

(b) At the Closing, Buyer shall deliver to the Company the following:

 

(i) the Purchase Price;

 

(ii) the Assignment and Assumption Agreement duly executed by Buyer;

 

(iii) [***];

 

(iv) the Bill of Sale duly executed by Buyer;

 

(v) the Intellectual Property Assignment duly executed by Buyer;

 

(vi) License Agreement duly executed by Buyer;

 

(vii) the Sublicenses duly executed by Buyer;

 

(viii) copies of all consents and authorizations referred to in Section 4.02 of the Disclosure Schedules;

 

(ix) a certificate of the Secretary or Assistant Secretary (or equivalent officer) of Buyer certifying as to (A) the resolutions of the board of directors of Buyer, duly adopted and in effect, which authorize the execution, delivery and performance of this Agreement and the transactions contemplated hereby, and (B) the names and signatures of the officers of Buyer authorized to sign this Agreement and the documents to be delivered hereunder; and

 

(x) such other customary instruments of transfer, assumption, filings or documents, in form and substance reasonably satisfactory to the Company, as may be required to give effect to this Agreement.

 

Article III

 

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company represents and warrants to Buyer that the statements contained in this Article III are true and correct as of the date hereof. For purposes of this Article III , “Company’s knowledge,” “knowledge of Company” and any similar phrases shall mean the actual or constructive knowledge of any officer of the Company, after reasonable inquiry.

 

Section 3.01 Organization and Authority of the Company; Enforceability. The Company is a corporation duly organized, validly existing and in good standing under the laws of the state of Delaware. The Company has full corporate power and authority to enter into this Agreement and the documents to be delivered hereunder, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution, delivery and performance by the Company of this Agreement and the documents to be delivered hereunder and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate action on the part of the Company. This Agreement and the documents to be delivered by the Company hereunder have been duly executed and delivered by the Company, and (assuming due authorization, execution and delivery by Buyer) this Agreement and the documents to be delivered hereunder constitute legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms.

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY “[***],” HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

     
 

 

Section 3.02 No Conflicts; Consents. Except as set forth in Section 3.02 of the Disclosure Schedules, execution, delivery and performance by the Company of this Agreement and the documents to be delivered by the Company hereunder, and the consummation of the transactions contemplated hereby, do not and will not: (a) violate or conflict with the certificate of incorporation, by-laws or other organizational documents of the Company; (b) violate or conflict with any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to the Company or the Purchased Assets; (c) conflict with, or result in (with or without notice or lapse of time or both) any violation of, or default under, or give rise to a right of termination, acceleration or modification of any obligation or loss of any benefit under any Assigned Contracts or (d) result in the creation or imposition of any Encumbrance on the Purchased Assets. Except as set forth in Section 3.02 of the Disclosure Schedules, no consent, approval, waiver or authorization is required to be obtained by the Company from any person or entity (including any governmental authority) in connection with the execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby.

 

Section 3.03 Title to Purchased Assets. Except as set forth in Section 3.03 of the Disclosure Schedules, the Company owns and has good title to the Purchased Assets, free and clear of Encumbrances.

 

Section 3.04 Inventory. Section 3.04 of the Disclosure Schedules sets forth a true and complete list of the quantity of Inventory, and such Inventory consists of a quality that is usable and salable in the ordinary course of business.

 

Section 3.05 Intellectual Property.

 

(a) Except as set forth in Schedule 3.05(a) , the Company owns or has adequate, valid and enforceable rights to use all of the Purchased IP, free and clear of all Encumbrances. The Company is not bound by any outstanding judgment, injunction, order or decree restricting the use of the Purchased IP, or restricting the licensing thereof to any person or entity.

 

(b) To the Company’s knowledge, (i) its use of the Purchased IP does not infringe, violate, dilute or misappropriate the intellectual property of any other person or entity and (ii) there are no claims pending or threatened by any person or entity with respect to the ownership, validity, enforceability, effectiveness or use of the Purchased IP. To the Company’s knowledge, no person or entity is infringing, misappropriating, diluting or otherwise violating any of the Purchased IP, and the Company has not made or asserted any claim, demand or notice against any person or entity alleging any such infringement, misappropriation, dilution or other violation.

 

     
 

 

Section 3.06 Assigned Contracts; MIT License. Each Assigned Contract and the MIT License is valid and binding on the Company in accordance with its terms and is in full force and effect. None of the Company or, to the Company’s knowledge, any other party thereto is in breach of or default under (or is alleged to be in breach of or default under), or has provided or received any notice of any intention to terminate, any Assigned Contract or the MIT License. No event or circumstance has occurred that, with or without notice or lapse of time or both, would constitute an event of default under any Assigned Contract or the MIT License, or result in a termination thereof, or would cause or permit the acceleration or other changes of any right or obligation or the loss of benefit thereunder. Complete and correct copies of each Assigned Contract and the MIT License have been made available to Buyer. There are no disputes pending or, to the Company’s knowledge, threatened under any Assigned Contract or the MIT License.

 

Section 3.07 Compliance With Laws. The Company is in compliance, in all material respects, with all applicable federal, state and local laws and regulations applicable to ownership and use of the Purchased Assets.

 

Section 3.08 Legal Proceedings. There is no claim, action, suit, proceeding or governmental investigation (“ Action ”) of any nature pending or, to the Company’s knowledge, threatened against or by the Company (a) relating to or affecting the Purchased Assets or the Assumed Liabilities; or (b) that challenges or seeks to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement. To the Company’s knowledge, no event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such Action.

 

Section 3.09 Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company.

 

Section 3.10 Taxes. Except as set forth in Section 3.10 of the Disclosure Schedules:

 

(a) Except as would not have a material adverse effect on the Purchased Assets, the Company has filed (taking into account any valid extensions) all material tax returns required to be filed by the Company and has paid all taxes shown thereon as owing. The Company is not currently the beneficiary of any extension of time within to file any material tax return other than extensions of time to file tax returns obtained in the ordinary course of business.

 

(b) The Company is not a “foreign person” as that term is used in Treasury Regulations Section 1.1445-2. The Company is not, nor or has been, a United States real property holding corporation (as defined in Section 897(c)(2) of the Code) during the applicable period specified in Section 897(c)(1)(a) of the Code.

 

(c) The representations and warranties set forth in this Section 3.10 are the Company’s sole and exclusive representations and warranties regarding tax matters.

 

Section 3.11 Full Disclosure. No representation or warranty by the Company in this Agreement and no statement contained in the Disclosure Schedules to this Agreement or any certificate or other document furnished or to be furnished to Buyer pursuant to this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not misleading.

 

     
 

 

Article IV

 

REPRESENTATIONS AND WARRANTIES OF BUYER

 

Buyer represents and warrants to the Company that the statements contained in this Article IV are true and correct as of the date hereof. For purposes of this Article IV , “Buyer’s knowledge,” “knowledge of Buyer” and any similar phrases shall mean the actual or constructive knowledge of any officer of Buyer, after reasonable inquiry.

 

Section 4.01 Organization and Authority of Buyer; Enforceability. Buyer is a corporation duly organized, validly existing and in good standing under the laws of the state of Delaware. Buyer has full corporate power and authority to enter into this Agreement and the documents to be delivered by Buyer hereunder, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution, delivery and performance by Buyer of this Agreement and the documents to be delivered by Buyer hereunder and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate action on the part of Buyer. This Agreement and the documents to be delivered by Buyer hereunder have been duly executed and delivered by Buyer, and (assuming due authorization, execution and delivery by the Company) this Agreement and the documents to be delivered hereunder constitute legal, valid and binding obligations of Buyer enforceable against Buyer in accordance with their respective terms.

 

Section 4.02 No Conflicts; Consents. The execution, delivery and performance by Buyer of this Agreement and the documents to be delivered by Buyer hereunder, and the consummation of the transactions contemplated hereby, do not and will not: (a) violate or conflict with the certificate of incorporation, by-laws or other organizational documents of Buyer; or (b) violate or conflict with any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Buyer. No consent, approval, waiver or authorization is required to be obtained by Buyer from any person or entity (including any governmental authority) in connection with the execution, delivery and performance by Buyer of this Agreement and the consummation of the transactions contemplated hereby.

 

Section 4.03 Legal Proceedings. There is no Action of any nature pending or, to Buyer’s knowledge, threatened against or by Buyer that challenges or seeks to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement. To Buyer’s knowledge, no event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such Action.

 

Section 4.04 Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Buyer.

 

     
 

 

Article V

 

COVENANTS

 

Section 5.01 Option to Unwind. This Agreement, and the transactions contemplated hereby, have been entered into in anticipation of a merger by [***] and wholly owned subsidiary of [***] (“ Bio IVT ”), with and into the Company, pursuant to which the Company will survive as a wholly owned subsidiary of Bio IVT (the “ Merger ”). If the Merger is not consummated within 90 days after the Closing Date (the “ Merger Deadline ”), then the Company may elect to unwind the transactions contemplated by this Agreement. In the event the Company elects to unwind the transactions contemplated by this Agreement, the Company shall provide written notice of such election to Buyer within 15 days after the Merger Deadline. Following delivery of such notice, the parties hereto shall cooperate in good faith to promptly (but in any event within 10 days after delivery of such notice) unwind the transactions contemplated hereby, including by returning the Purchased Assets and Assumed Liabilities, or Purchase Price, as applicable, to the other party.

 

Section 5.02 Public Announcements. Except for disclosures in compliance with federal and state securities laws and the rules and regulations thereunder, and the rules of the national securities exchange on which securities of Buyer’s parent corporation are traded, and unless otherwise required by applicable law, neither party hereto shall make any public announcements regarding this Agreement or the transactions contemplated hereby without the prior written consent of the other party (which consent shall not be unreasonably withheld or delayed).

 

Section 5.03 Bulk Sales Laws. The parties hereby waive compliance with the provisions of any bulk sales, bulk transfer or similar laws of any jurisdiction that may otherwise be applicable with respect to the sale of any or all of the Purchased Assets to Buyer.

 

Section 5.04 Transfer Taxes. All transfer, documentary, sales, use, stamp, registration, value added and other such taxes and fees (including any penalties and interest) incurred in connection with this Agreement and the documents to be delivered hereunder shall be borne and paid 50% by Buyer and 50% by the Company. The parties hereto shall cooperate, and use commercially reasonable efforts, to timely file any tax return or other document with respect to such taxes or fees.

 

Section 5.05 Further Assurances. Following the Closing, each of the parties hereto shall execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement and the documents to be delivered hereunder.

 

Article VI

 

INDEMNIFICATION

 

Section 6.01 Survival. All representations and warranties contained herein and all related rights to indemnification shall survive for six (6) months after Closing.

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY “[***],” HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

     
 

 

Section 6.02 Indemnification by the Company. Subject to the other terms and conditions of this Article VI , the Company shall defend, indemnify and hold harmless Buyer, its affiliates and their respective stockholders, directors, officers and employees from and against all claims, judgments, damages, liabilities, settlements, losses, costs and expenses, including reasonable attorneys’ fees and disbursements, arising from or relating to:

 

(a) any inaccuracy in or breach of any of the representations or warranties of the Company contained in this Agreement or any document to be delivered hereunder;

 

(b) any breach or non-fulfillment of any covenant, agreement or obligation to be performed by the Company pursuant to this Agreement or any document to be delivered hereunder;

 

(c) any Excluded Asset; or

 

(d) Retained Liabilities.

 

Section 6.03 Indemnification by Buyer. Subject to the other terms and conditions of this Article VI , Buyer shall defend, indemnify and hold harmless the Company, its affiliates and their respective stockholders, directors, officers and employees from and against all claims, judgments, damages, liabilities, settlements, losses, costs and expenses, including reasonable attorneys’ fees and disbursements, arising from or relating to:

 

(a) any inaccuracy in or breach of any of the representations or warranties of Buyer contained in this Agreement or any document to be delivered hereunder;

 

(b) any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Buyer pursuant to this Agreement or any document to be delivered hereunder; or

 

(c) any Assumed Liability.

 

Section 6.04 Certain Limitations. The party making a claim under this Article VI is referred to as the “ Indemnified Party ”, and the party against whom such claim is asserted under this Article VI is referred to as the “ Indemnifying Party ”. The indemnification provided for in this Article VI shall be subject to the following limitations:

 

(a) The aggregate amount of all losses for which an Indemnifying Party shall be liable pursuant to this Article VI shall not exceed $[***].

 

(b) In no event shall any Indemnifying Party be liable to any Indemnified Party for any punitive, incidental, consequential, special or indirect damages, including loss of future revenue or income, loss of business reputation or opportunity relating to the breach or alleged breach of this Agreement, or diminution of value or any damages based on any type of multiple.

 

(c) Payments by an Indemnifying Party pursuant to this Article VI in respect of any loss shall be limited to the amount of any liability or damage that remains after deducting therefrom any insurance proceeds and any indemnity, contribution or other similar payment received or reasonably expected to be received by the Indemnified Party in respect of any such claim. The Indemnified Party shall use its commercially reasonable efforts to recover under insurance policies or indemnity, contribution or other similar agreements for any losses prior to seeking indemnification under this Agreement.

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY “[***],” HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

     
 

 

(d) Each Indemnified Party shall take, and cause its affiliates to take, all reasonable steps to mitigate any loss upon becoming aware of any event or circumstance that would be reasonably expected to, or does, give rise thereto, including incurring costs only to the minimum extent necessary to remedy the breach that gives rise to such loss.

 

Section 6.05 Indemnification Procedures. Whenever any claim shall arise for indemnification hereunder, the Indemnified Party shall promptly provide written notice of such claim to the Indemnifying Party (the “ Claim Notice ”); provided, that no delay in so notifying the Indemnifying Party shall relieve the Indemnifying Party of any of its obligations under this Article VI except to the extent that such delay results in a loss or impairment of procedural or substantive rights with respect to the defense of the claim. In connection with any claim giving rise to indemnity hereunder resulting from or arising out of any Action by a person or entity who is not a party to this Agreement, the Indemnifying Party, at its sole cost and expense and upon written notice to the Indemnified Party, shall assume the defense of any such Action with counsel reasonably satisfactory to the Indemnified Party. The Indemnified Party shall be entitled to participate in the defense of any such Action, with its counsel and at its own cost and expense; provided, however, that if both the Indemnifying Party and Indemnified Party are parties to the Action, and if any conflict of interest (including, but not limited to, crossclaims between them) arises between them or different defenses become available to them, the cost of such separate counsel (but not more than one separate law firm) for the Indemnified Party shall be borne by the Indemnifying Party. If the Indemnifying Party does not assume the defense of any such Action within twenty (20) days after the Claim Notice or such earlier time as may be required to file an answer or other response in the Action so as to avoid a default or loss of any material procedural or substantive rights, the Indemnified Party may, but shall not be obligated to, defend against such Action, at the Indemnifying Party’s expense, in such manner as it may deem appropriate, including, but not limited to, settling such Action, after giving notice of it to the Indemnifying Party, on such terms as the Indemnified Party may deem appropriate and no action taken by the Indemnified Party in accordance with such defense and settlement shall relieve the Indemnifying Party of its indemnification obligations herein provided with respect to any damages resulting therefrom. The Indemnifying Party shall not settle any Action without the Indemnified Party’s prior written consent (which consent shall not be unreasonably withheld or delayed).

 

Section 6.06 Tax Treatment of Indemnification Payments. All indemnification payments made under this Agreement shall be treated by the parties hereto as an adjustment to the Purchase Price for tax purposes, unless otherwise required by law.

 

Section 6.07 Exclusive Remedies. The parties acknowledge and agree that their sole and exclusive remedy with respect to any and all claims (other than claims arising from intentional fraud on the part of a party hereto in connection with the transactions contemplated by this Agreement) for any breach of any representation, warranty, covenant, agreement or obligation set forth herein or otherwise relating to the subject matter of this Agreement, shall be pursuant to the indemnification provisions set forth in this Article VI .

 

     
 

 

Article VII

 

MISCELLANEOUS

 

Section 7.01 Expenses. All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses.

 

Section 7.02 Interpretation. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” Words denoting any gender shall include all genders. Where a word is defined herein, references to the singular shall include references to the plural and vice versa. A reference to any party to this Agreement or any other agreement or document shall include such party’s successors and permitted assigns. All references to “$” and dollars shall be deemed to refer to United States currency unless otherwise specifically provided. All references to a day or days shall be deemed to refer to a calendar day or calendar days, as applicable, unless otherwise specifically provided. Any reference to any agreement or contract referenced herein or in the Disclosure Schedules shall be a reference to such agreement or contract, as amended, modified, supplemented or waived. The captions used in this Agreement and descriptions of the Disclosure Schedules are for convenience of reference only and do not constitute a part of this Agreement and shall not be deemed to limit, characterize or in any way affect any provision of this Agreement, and all provisions of this Agreement shall be enforced and construed as if no caption or description of the Disclosure Schedules had been used in this Agreement. The phrase “made available to Buyer” or similar phrases as used in this Agreement shall mean that the subject documents were posted to the virtual data room hosted by Merrill Corporation and maintained by the Company or its representatives prior to the date hereof. Unless otherwise specified herein, references to any statute, listing rule, rule, standard, regulation or other law include a reference to the corresponding rules and regulations and each of them as amended, modified, supplemented, consolidated, replaced or rewritten from time to time. References to any section of any statute, listing rule, rule, standard, regulation or other law include any successor to such section.

 

Section 7.03 Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 7.03 ):

 

     
 

 

If to the Company:

Ascendance Biotechnology, Inc.

200 Boston Avenue, Suite 1500

Medford, MA 02155

Attention: Vincent R. Zurawski, Jr., Ph.D.

Email: vzurawski@ascendancebio.com

   
with a copy to:

Duane Morris LLP

30 South 17 th Street

Philadelphia, PA 19103

Facsimile: (215) 689-4452

E-mail: toner@duanemorris.com

Attention: David Toner, Esq.

   
If to Buyer:

AgeX Therapeutics, Inc.

1010 Atlantic Avenue

Alameda, California 94501

Facsimile: (510) 521-3389

E-mail: mwest@biotimeinc.com

Attention: Michael D. West, CEO

   
with a copy to:

Thompson, Welch, Soroko &Gilbert LLP

450 Pacific Avenue, Suite 200

San Francisco, CA 91433

Attention: Richard S. Soroko

 

Section 7.04 Headings. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

 

Section 7.05 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Agreement.

 

Section 7.06 Entire Agreement. This Agreement and the documents to be delivered hereunder constitute the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein, and supersede all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Agreement and the other documents to be delivered hereunder (other than an exception set forth in the Disclosure Schedules), the statements in the body of this Agreement will control.

 

Section 7.07 Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Neither party may assign its rights or obligations hereunder without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed. No assignment shall relieve the assigning party of any of its obligations hereunder.

 

Section 7.08 No Third-party Beneficiaries. Except as provided in Article VI , this Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

 

     
 

 

Section 7.09 Amendment and Modification. This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each party hereto.

 

Section 7.10 Waiver. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

 

Section 7.11 Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction).

 

Section 7.12 Submission to Jurisdiction. This Agreement has been executed and delivered in and shall be deemed to have been made in the State of Delaware. The parties each agree to the exclusive jurisdiction of the Chancery Court of the State of Delaware (or, if the Chancery Court of the State of Delaware declines to accept jurisdiction over a particular matter, any state or federal court sitting in the State of Delaware), with respect to any Claim arising under or relating to this Agreement and/or the transactions contemplated hereunder, and waives personal service of any and all process upon it, and consents that all services of process be made by registered or certified mail, return receipt requested, directed to it at its address as set forth in Section 7.03 , and service so made shall be deemed to be completed when received. The parties each waive any objection based on forum non conveniens and waive any objection to venue of any action instituted hereunder. Nothing in this paragraph shall affect the right of the parties to serve legal process in any other manner permitted by law.

 

Section 7.13 Waiver of Jury Trial. Each party acknowledges and agrees that any controversy which may arise under this Agreement is likely to involve complicated and difficult issues and, therefore, each such party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Agreement or the transactions contemplated hereby.

 

Section 7.14 Specific Performance. The parties hereto agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy to which they are entitled at law or in equity.

 

Section 7.15 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

 

Section 7.16 Wrong Pockets. From time to time following the Closing, and for no further consideration, Buyer and the Company shall (or shall cause their respective affiliates to) execute, acknowledge and deliver such assignments, transfers, consents, assumptions, conveyances and other documents and instruments and take such other actions as may reasonably be necessary to appropriately consummate the transactions contemplated hereby, including (a) transferring back to the Company (or its designee), at no additional cost to the Company (or its designee), any right, property, asset or liability that was not contemplated by this Agreement to be transferred to or assumed by Buyer but is found to have been transferred to or assumed by Buyer in error, either directly or indirectly and (b) transferring to Buyer (or its designee), at no additional cost to Buyer (or its designee), any right, property, asset or liability that was contemplated by this Agreement to be transferred to or assumed by Buyer at or after the Closing but is found to not have been so transferred to or assumed by Buyer.

 

[Signature Page Follows]

 

     
 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

 

  ASCENDANCE BIOTECHNOLOGY, INC.
     
  By: /s/ Vincent R. Zurawski, Jr.
  Name: Vincent R. Zurawski, Jr., Ph.D.
  Title: Chief Executive Officer
     
  AGEX THERAPEUTICS, INC.
     
  By: /s/ Michael D. West
  Name: Michael D. West
  Title: Chief Executive Officer

 

[Signature Page to Asset Purchase Agreement]

 

     
 

 

Execution Version

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY “[***],” HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

 

SUBLICENSE AGREEMENT

 

THIS SUBLICENSE Agreement (“ Agreement ”) is entered into on September 26, 2017 (the “Effective Date”) by and between BIOTIME, INC., a California corporation, having its principal place of business at 1010 Atlantic Avenue, Suite 102, Alameda, CA 94501 (“ BioTime ”), and AGEX THERAPEUTICS, INC., a Delaware corporation, having its principal place of business at 1010 Atlantic Avenue, Suite 102, Alameda, CA 94501 (“ AgeX ”).

 

WITNESSETH

 

WHEREAS, pursuant to an exclusive license agreement between ReCyte, Inc., formerly Embryome Sciences, Inc., with the Advanced Cell Technology, Inc (“ACT”), dated July 10, 2008, as amended and August 15, 2008 (the “ ACT Licenses ”), BioTime has obtained rights for Patent Rights and Know-How;

 

WHEREAS, AgeX is an Affiliate of BioTime; and

 

WHEREAS, AgeX wishes to obtain from BioTime a license under certain rights for the Patent Rights and Know-How, and BioTime is willing to grant such a license upon the terms and conditions hereinafter set forth.

 

NOW THEREFORE, for and in consideration of the covenants, conditions and undertakings hereinafter set forth, the parties hereby agree as follows:

 

NOW THEREFORE, for and in consideration of the covenants, conditions and undertakings hereinafter set forth, the parties hereby agree as follows:

 

ARTICLE 1. DEFINITIONS

 

1.1 “ Affiliate ” means with respect to any Person (including but not limited to BioTime, AgeX or a Third Party) any corporation, limited liability company, limited partnership or other entity in control of, controlled by, or under common control with such Person.

 

1.2 “ AgeX Field ” means all uses for the treatment, palliation, diagnosis, or prevention of any disease, disorder or health condition excluding the BioTime Exclusive Field.

 

1.3 “ AgeX Non-Exclusive Field ” means products, medical devices, and services for the prevention, treatment, amelioration, diagnosis or monitoring of disorders, degeneration, congenital conditions, or injuries of tendon.

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY “[***],” HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

     
 

 

Execution Version

 

1.4 “ BioTime Exclusive Field ” means products, medical devices, and services for the prevention, treatment, amelioration, diagnosis or monitoring of (a) orthopedic indications, meaning [***]; (b) ophthalmological indications, meaning [***]; and (c) medical aesthetics meaning [***].

 

1.5 “ BioTime Non-Exclusive Field ” means products, medical devices, and services for the prevention, treatment, amelioration, diagnosis or monitoring of disorders, degeneration, congenital conditions, or injuries of tendon. For the avoidance of doubt, the BioTime Non-Exclusive Field does not include the prevention, treatment, amelioration, diagnosis or monitoring of disorders, degeneration, congenital conditions, or injuries of an orthopedic indication.

 

1.6 “ Cells or Cell Lines ” means the cells and cell lines identified in Exhibit A or Exhibit B attached hereto that are covered by (i.e., made or developed using) the Patent Rights or Know-How and/or are provided to AgeX by BioTime.

 

1.7 “ Change of Control ” means the occurrence of any of the following: (a) any consolidation or merger of AgeX with or into any Third Party, or any other corporate reorganization involving a Third Party, in which those persons or entities that are stockholders of AgeX immediately prior to such consolidation, merger or reorganization own less than fifty percent (50%) of the surviving entity’s voting power immediately after such consolidation, merger or reorganization; (b) a change in the legal or beneficial ownership of fifty percent (50%) or more of the voting securities of AgeX (whether in a single transaction or series of related transactions) where, immediately after giving effect to such change, the legal or beneficial owner of more than fifty percent (50%) of the voting securities of AgeX is a Third Party; or (c) the sale, transfer, lease, license or other disposition of all or substantially all of AgeX’s assets or business in one or a series of related transactions to a Third Party.

 

1.8 “ Combination Product ” means a product that contains a Licensed Product component and at least one other component that has independent research, diagnostic or therapeutic utility, could reasonably be sold separately and has economic value of its own.

 

1.9 “ Commercialization ” in respect of a particular product, any and all activities (whether before or after receipt of marketing approval in respect of the product, medical device or service) directed to the marketing, detailing and promotion of the product or medical device after marketing approval for such product has been obtained, and includes marketing, promoting, detailing, distributing, offering to commercially sell and commercially selling the product, medical device or service, importing, exporting or transporting the product or medical device for commercial sale, and regulatory affairs with respect to the foregoing. When used as a verb, “ Commercializing ” means engaging in Commercialization and “ Commercialize ” and “ Commercialized ” shall have corresponding meanings.

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY “[***],” HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

     
 

 

Execution Version

 

1.10 “ Commercially Reasonable Efforts ” means, with respect to the efforts to be expended by any party and with respect to any objective, the reasonable, diligent, good faith efforts to accomplish such objective as such party would use in its ordinary course of business to accomplish a similar objective under similar circumstances. With respect to any objective relating to the research, development, or exploitation as used herein, “Commercially Reasonable Efforts” means that level, caliber and quality of efforts and resources reasonably and normally used in the Research, Development and Exploitation by biopharmaceutical companies for a product that is of similar market potential and at a similar stage in its Development or product life, taking into account, without limitation, issues of safety, efficacy, product profile, competitiveness in the marketplace, including efforts used by similarly positioned competitors for competing products, regulatory structure involved, optimal timing for market entry, proprietary position, and other relevant scientific, technical, business, marketing, return on investment, financial resources, and other commercial factors. Without limiting the generality of the foregoing, “Commercially Reasonable Efforts, as it applies to the financial matters herein, means adherence to the budgeting and staffing targets and timelines (to the extent adherence to such activities and timelines are controllable by the party responsible for performing such activities).

 

1.11 “ Confidential Information ” means all information and know-how and any tangible embodiments thereof provided by or on behalf of one party to the other party either in connection with the discussions and negotiations pertaining to this Agreement or in the course of performing under this Agreement, which may include data, knowledge, practices, processes, ideas, research plans, formulation or manufacturing processes and techniques, scientific, manufacturing, marketing and business plans, and financial and personnel matters relating to the disclosing party or to its present or future products, sales, suppliers, customers, employees, investors or business; provided, that, information or know-how of a party will not be deemed Confidential Information of such party for purposes of this Agreement if such information or know-how: (a) was already known to the receiving party, other than under an obligation of confidentiality or non-use, at the time of disclosure to such receiving party, as can be shown by written records; (b) was generally available or known to parties reasonably skilled in the field to which such information or know-how pertains, or was otherwise part of the public domain, at the time of its disclosure to such receiving party; (c) became generally available or known to parties reasonably skilled in the field to which such information or know-how pertains, or otherwise became part of the public domain, after its disclosure to such receiving party through no fault of the receiving party; (d) was disclosed to such receiving party, other than under an obligation of confidentiality or non-use, by a Third Party who had no obligation to the disclosing party not to disclose such information or know-how to others, as can be shown by written records; or (e) was independently discovered or developed by such receiving party, as can be shown by its written records, without the use or benefit of, or reliance on, Confidential Information belonging to the disclosing party.

 

1.12 “ Control ” means, with respect to any Patent(s), possession of the right, whether directly or indirectly, and whether by ownership, license or otherwise, to grant a license, sublicense or other right to or under such Patent(s) as provided for herein.

 

1.13 “ Cover ” means that a product or service, when made, used, or sold, or that a method, procedure, process, when practiced, would constitute, but for the license granted to Licensee pursuant to this Agreement, an infringement of any claim or claims included within the Patent Rights.

 

1.14 “ Development ” means all activities related to stability testing, process development, formulation, manufacturing scale-up, qualification and validation, quality assurance/quality control, clinical studies, including manufacturing in support thereof, statistical analysis and report writing, the preparation pre-submission and submission of INDs, premarket approvals, 510(k)s, NDAs, BLAs, and other regulatory applications, filings or submissions, regulatory affairs with respect to the foregoing, and all other activities necessary or reasonably useful or otherwise requested or required by the United States Food and Drug Administration, or any successor agency (“ FDA ”) or a comparable foreign regulatory authority as a condition or in support of obtaining or maintaining a regulatory marketing approval, or an approval for a clinical trial, anywhere in the world. When used as a verb, “ Develop ” means to engage in Development.

 

     
 

 

Execution Version

 

1.15 “ Development Costs ” means, subject to the other terms of this Agreement and without duplication, (a) the [***] by or on behalf of AgeX or any of its Affiliates, during the term of and pursuant to this Agreement, that (i) are [***], and (ii) [***] of the sublicense in which the designation was made.

 

1.16 “ Effective Date ” has the meaning set forth in the opening paragraph of this Agreement.

 

1.17 “ Exploit ” means, to Develop, Manufacture, Commercialize, make, have made, use, offer to sell, sell or import; and “ Exploitation ” means Developing, Manufacturing, Commercializing, making, having made, using, offering to sell, selling or importing.

 

1.18 “ Know-How ” means all compositions of matter, techniques and data and other knowhow and technical information including inventions (whether or not patentable), improvements and developments, practices, methods, concepts, trade secrets, documents, computer data, computer slide illustrations, computer code, apparatus, test data, analytical and quality control data, formulation, manufacturing, patent data or descriptions, development information, drawings, specifications, designs, plans, proposals and technical data .and manuals and all other Confidential Information that is owned or controlled by BioTime as of the Effective Date, and that specifically relates to the subject matter (a) described in or claimed by the Patent Rights, (b) described in or claimed by the abandoned provisional applications including but not limited to: [***] .

 

1.19 “ Licensed Process ” means any process or method, the development, use, practice, or sale of which (a) is covered in whole or in part by, or cannot be performed without infringing, a Valid Claim of the Patent Rights in the country in which such Licensed Process is practiced or sold, (b) uses Cells or Cell Line listed in Exhibit A, or (c) otherwise utilizes the Know-How.

 

1.20 “ Licensed Product ” means any product, or part thereof or derived therefrom, the development, manufacture, sale, lease, or use of which (a) is covered in whole or in part by, or cannot be performed without infringing, a Valid Claim of the Patent Rights in the country in which any such product or part thereof is developed, made, used, sold or imported by AgeX, (b) uses Cells or Cell Line listed in Exhibit A, or (c) otherwise utilizes the Know-How.

 

1.21 “ Licensed Services ” means any service, the development, use, performance, or sale of which is covered in whole or in part by, or cannot be performed without infringing, a Valid Claim of the Patent Rights in the country in which any such service is so developed, used, performed, sold, offered for sale, imported or exported by AgeX or otherwise utilizes the Know-How.

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY “[***],” HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

     
 

 

Execution Version

 

1.22 “ Manufacture ” and “ Manufacturing ” means, in respect of a particular pharmaceutical, bio-pharmaceutical, diagnostic, or prognostic product, and without limitation, all activities related to the production, manufacture, processing, formulation, filling, finishing, packaging, labeling, shipping, handling, holding, storage and warehousing of such product or any intermediate thereof, including process development, process qualification and validation, scale-up, pre-clinical, clinical and commercial manufacture and analytic development, product characterization, stability testing, quality assurance and quality control.

 

1.23 “ Net Sales ” means the invoiced amount on sales by AgeX or its Affiliates or Sublicensees of Licensed Products, Licensed Services or Licensed Processes less (to the extent applicable and appropriately documented) (i) sales, tariff and import duties, use and other taxes directly imposed with reference to particular sales, (ii) discounts, rebates, and similar credits and charge backs actually allowed and taken (regardless of whether taken or paid at the time of sale or paid or credited to the buyer at a subsequent date), and (iii) amounts allowed or credited on returns; provided, any such allowed deductions shall be listed on the invoice for the applicable Licensed Product, Licensed Process or Licensed Service or otherwise documented in the ordinary course of business. In the case of Combination Products, Net Sales means the total invoice amount earned on sales of Combination Products by AgeX or its Affiliates to any third person or entity, less, to the extent applicable, the deductions set forth above, multiplied by a proration factor that is determined as follows:

 

a) If all components of the Combination Product were sold separately during the same or immediately preceding calendar quarter, the proration factor shall be determined by the formula [***]; or

 

b) if all components of the Combination Product were not sold separately during the same or immediately preceding calendar quarter, the proration factor shall be determined by the formula [***].

 

1.24 “ Patent Rights ” means the patents and patent applications identified on Exhibit C attached hereto, and any divisional, continuation or continuation-in-part of those applications, but only to the extent the claims in said applications are directed to subject matter specifically described in the patents and patent applications identified on Exhibit C, as well as any patents issued on these patent applications, and any reissues, reexaminations, extensions and substitutions (or the equivalent) thereof and any foreign counterparts to those patents and patent applications. The parties agree that Exhibit C may be revised from time to time after the Effective Date to reflect changes thereto.

 

1.25 “ Person ” means any individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or other similar entity or organization, including a government or political subdivision, department or agency of a government.

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY “[***],” HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

     
 

 

Execution Version

 

1.26 “ Research ” means performance of scientific experiments to answer questions not answerable or easily answerable through the published scientific literature, pre-clinical and other non-clinical testing, test method development, and toxicology, formulation, and process development work.

 

1.27 “ Sublicensee ” means a Person, other than an Affiliate, that is granted a sublicense by a Party under the license grants hereunder.

 

1.28 “ Sublicensing Consideration ” has the means the royalties payable pursuant to Section 2.3(d).

 

1.29 “ Territory ” means worldwide, where patent coverage applies.

 

1.30 “ Third Party ” means any Person other than AgeX, BioTime, or their respective Affiliates.

 

1.31 “ Valid Claim ” means (a) a claim of any issued and unexpired United States or foreign patent included in the Patent Rights which has not lapsed or become abandoned or been declared invalid or unenforceable by a court of competent jurisdiction or an administrative agency from which no appeal can be or has been taken within the time allowed from such appeal and which has not been disclaimed or determined to be invalid or unenforceable through reissue, disclaimer· or otherwise, or (b) to the extent rights are granted by a governmental patent authority thereunder (i.e., to the extent that the owner would be able to enforce a right to a patent royalty thereunder under applicable patent law), a claim of a pending patent application included in the Patent Rights..

 

ARTICLE 2. LICENSE GRANT AND RELATED OBLIGATIONS

 

2.1 License Grant . Subject to the terms and conditions set forth herein, and subject the rights granted by and to ACT, Third Parties or any Affiliates prior to the Effective Date, BioTime hereby grants to AgeX a royalty-bearing exclusive license, in the AgeX Field and a nonexclusive license in the AgeX Non-Exclusive Field in the Territory to use the Patent Rights and Know-How to (a) Research, Develop, Exploit, make, have made, use, sell, have sold, offer for sale, have offered for sale, import, have imported, export and have exported Licensed Products, (b) Research, Develop, Exploit, use, practice, sell, have sold, offer for sale, have offered for sale, import, have imported, export and have exported Licensed Processes, (c) develop, use, perform, sell, have sold, offer for sale, have offered for sale, import, have imported, export and have exported Licensed Services, and (d) Research using Cells or Cell Lines listed in Exhibit B.

 

2.2 BioTime shall, and hereby does, grant AgeX, subject to the terms and conditions of Section 2.1, and subject the rights granted to ACT, Third Parties or any Affiliates, a license to any new Licensed Patents created after the Effective Date that cover Licensed Products, Licensed Processes, and Licensed Services, in the AgeX Field and the AgeX Non-Exclusive Field in the Territory, to (a) Research, Develop, Exploit, make, have made, use, sell, have sold, offer for sale, have offered for sale, import, have imported, export and have exported Licensed Products, (b) Research, Develop, Exploit, use, practice, sell, have sold, offer for sale, have offered for sale, import, have imported, export and have exported Licensed Processes, (c) develop, use, perform, sell, have sold, offer for sale, have offered for sale, import, have imported, export and have exported Licensed Services, and (d) Research using Cells or Cell Lines listed in Exhibit B, from the Effective Date for a period of ten (10) years.

 

     
 

 

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2.3 Sublicensing . The rights and licenses granted by BioTime to AgeX under Sections 2.1 and 2.2 shall include the right to grant Sublicenses (or further rights of reference) through multiple tiers of Sublicensees, subject to the following:

 

a) The terms of any such sublicense or further rights of reference shall be in accordance with the terms and conditions of this Agreement and the ACT Licenses. With regard to all Sublicenses granted by AgeX pursuant to the rights granted to it by BioTime under this Agreement, (i) AgeX may not grant to any Sublicensee any right to maintain BioTime Licensed Patents, defend claims brought by Third Parties, or commence any legal action against any Third Party for infringement of BioTime Licensed Patents and (ii) AgeX shall notify BioTime of AgeX’s intent to enter into a sublicense and shall (1) provide BioTime with a draft of the proposed sublicense not later than [***] days before such sublicense is executed and BioTime shall have the right to provide a copy of such draft to ACT, (2) to allow BioTime and ACT to comment on the terms of the sublicense if BioTime or ACT chooses to comment, and (3) provide BioTime with a fully executed copy of all sublicense agreements within [***] days after execution and BioTime shall have the right to provide a copy thereof to ACT;;

 

b) Notwithstanding the grant of any such sublicense or further rights of reference hereunder, AgeX shall remain solely responsible to BioTime for the performance of its obligations under the terms hereof and for any breach of such obligations, whether such breach shall be caused by AgeX or any Sublicensee; and

 

c) For the avoidance of doubt it is hereby acknowledged that the appointment by AgeX of any distributor for a Licensed Product, Licensed Process or Licensed Service the extent permitted herein, or of any Third Party to assist in the Development of a Licensed Product, Licensed Process or Licensed Service shall not be deemed to constitute the appointment of a Sublicensee or the sublicense by AgeX of any rights hereunder.

 

d) Consideration

 

i. AgeX will pay to BioTime [***] of all Net Sales of a Licensed Product, Licensed Process or Licensed Service by Sublicensees until the royalty payments to ACT by BioTime total One Million Two Hundred Thousand Dollars (U.S.) ($1,200,000.00).:After the consideration in Section 2.2(d)(i) is fully paid, AgeX will pay to BioTime a [***] Royalty on Net Sales of a Licensed Product, Licensed Process or Licensed Service by Sublicensees. If AgeX is obligated to pay royalties to one or more BioTime Affiliates for the use of other patent rights with respect to the use, manufacture or sale of a Licensed Product, Licensed Process or Licensed Service and as a result the royalties payable under this Article plus the royalties payable to BioTime and its Affiliates in the aggregate would exceed [***]of Net Sales, the royalty due under this Article shall be reduced such that the total amount of royalties payable to BioTime and its Affiliates is [***], with the allocation of such royalties among BioTime and its Affiliates to be made in accordance with their instructions.

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY “[***],” HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

     
 

 

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ii. Sublicensing Consideration. AgeX shall pay to BioTime [***] of any Sublicensing Consideration, including, but not limited to, upfront payments and milestones, and will include non-cash exchanges or considerations. Sublicensing Consideration does not include [***]. If AgeX is obligated to pay Sublicensing Consideration to one or more BioTime Affiliates for the use of patent rights with respect to the use, manufacture or sale of a Licensed Product, Licensed Process or Licensed Service and as a result the Sublicensing Consideration payable under this Section plus the Sublicensing Consideration payable to BioTime and its Affiliates would exceed [***] of the Sublicensing Consideration, the Sublicensing Consideration due under this Section may be reduced such that the total amount of Sublicensing Consideration payable to BioTime and its Affiliates is [***], with the allocation of such Sublicensing Consideration among BioTime and its Affiliates to be made in accordance with their instructions

 

iii. Development Funding. Consideration received from a Sublicensee of AgeX that is explicitly designated in the sublicense agreement to cover Development Costs will not be considered Sublicensing Considering subject to Section 2.2(d) (iii). Any Sublicensing Considering actually received by AgeX that was designated as Development Costs that were not actually incurred by AgeX as Development Costs in respect to Development of a Licensed Product, Licensed Service or Licensed Process, will become Sublicensing Consideration if not returned upon completion or termination of the project for which the consideration was so designated.

 

ARTICLE 3. TERM OF AGREEMENT

 

This Agreement shall be in full force and effect from the Effective Date until the later of (i) July 10, 2028 or (ii) the end of the term of the last-to-expire of the Patent Rights licensed under this Agreement unless otherwise terminated by operation of law or pursuant to the terms of this Agreement.

 

ARTICLE 4. OBLIGATIONS, FEES & ROYALTIES

 

As additional consideration of the license granted to AgeX from BioTime in Article 2 of this Agreement, AgeX shall pay to BioTime a royalty equal to [***] of the Net Sales received by AgeX and its Affiliates for all Licensed Products, Licensed Process or Licensed Service sold, performed, or leased by AgeX or any Affiliate. The obligation of AgeX to pay royalties on Net Sales by AgeX and its Affiliates (but not on Net Sales received by Sublicensees) shall terminate (a) with respect to Net Sales arising in any country concurrently with the expiration or termination of the last applicable Valid Claim within the Patent Rights in such country in which the Licensed Product, Licensed Process or Licensed Service is, (as applicable), performed, sold, leased, or manufactured, or in which the Patent Rights are licensed, and (b) in any and all cases when royalty payments to ACT by BioTime total One Million Two Hundred Thousand Dollars (U.S.) ($1,200,000.00). If AgeX is obligated to pay royalties to one or more BioTime Affiliates for the use of other patent rights with respect to the use, manufacture or sale of a Licensed Product, Licensed Process or Licensed Service and as a result the royalties payable under this Article plus the royalties payable to BioTime and its Affiliates in the aggregate would exceed [***] of Net Sales, the royalty due under this Article shall be reduced such that the total amount of royalties payable to BioTime and its Affiliates is [***] with the allocation of such royalties among BioTime and its Affiliates to be made in accordance with their instructions.

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY “[***],” HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

     
 

 

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ARTICLE 5. COMMERCIAL DILIGENCE & MILESTONES

 

5.1 Commercial Diligence . AgeX shall use commercially reasonable and diligent efforts to bring one or more Licensed Products, Licensed Processes and Licensed Services to market through an active and diligent program for exploitation of the Patent Rights and Know-How and to continue active, diligent marketing efforts for one or more Licensed Products, Licensed Processes and Licensed Services throughout the life of this Agreement.

 

ARTICLE 6. CONFIDENTIALITY

 

6.1 During the course of this Agreement, BioTime and AgeX may provide each other with Confidential Information. Confidential Information may be disclosed in oral, visual or written form, and includes such information that is designated in writing as such by the discloser at the time of disclosure, orally disclosed information that is designated in writing as confidential within 30 days after such oral disclosure, or information which, under all of the given circumstances ought reasonably be treated as Confidential Information of the disclosing party. BioTime and AgeX each intend to maintain the confidential or trade secret status of their Confidential Information. Each shall exercise reasonable care to protect the Confidential Information of the other from disclosure to third parties; no such disclosure shall be made without the other’s written permission. Upon termination or expiration of this Agreement, BioTime and/or AgeX shall comply with the other’s written request to return all Confidential Information that is in written or tangible form. Except as expressly provided herein, neither BioTime nor AgeX is granted any license to use the other’s Confidential Information. The obligations of BioTime and AgeX under this Article 6, shall survive any expiration or termination of this Agreement. Notwithstanding the preceding provisions of this Section 6.1, until such time as this Agreement is terminated: (a) Know How and the content of any patent application relating to or included in Patent Rights shall be deemed to be the AgeX’s Confidential Information rather than BioTime’s Confidential Information; (b) AgeX shall have the right to disclose Know How and the content of patent applications related to or included in Patent Rights to third parties without restriction under this Agreement; and (c) AgeX shall not have any obligation to BioTime to treat Know How or the content of any patent application related to or included in Patent Rights as BioTime’s Confidential Information.

 

6.2 The parties agree that the specific terms (but not the overall existence) of this Agreement shall be considered Confidential Information; provided, however, that the parties may disclose the terms of this Agreement to investors or potential investors, potential business partners, potential co-developers, manufactures, marketers, or distributors of any Licensed Product, Licensed Process, or Licensed Service, and in any prospectus, offering, memorandum, or other document or filing required by applicable securities laws or other applicable law or regulation. The parties may also disclose Confidential Information that is required to be disclosed to comply with applicable law or court order, provided that the recipient gives reasonable prior written notice of the required disclosure to the discloser and reasonably cooperates with the discloser’s efforts to prevent such disclosure.

 

     
 

 

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ARTICLE 7. QUARTERLY & ANNUAL REPORTS

 

7.1 AgeX shall maintain complete and accurate records of Licensed Products, Licensed Services and Licensed Processes that are sold, performed, or, leased by AgeX or its Affiliate under this Agreement, and all Sublicense Revenue received by AgeX and its Affiliates. AgeX shall keep, and shall cause its Affiliates to keep, full, true and accurate books of account containing all particulars that may be necessary for the purpose of showing the amounts payable to BioTime hereunder and AgeX’s compliance with the terms and conditions of this Agreement. Said books of account shall be kept at AgeX’s principal place of business or at such other location as may be agreed upon by the parties. Said books and the supporting data shall be open upon reasonable advance notice (and no more frequently than once per calendar year) for three (3) years following the end of the calendar year to which they pertain, to the inspection of BioTime or its agents for the purpose of verifying AgeX’s royalty statement or compliance in other respects with this Agreement. If any such audit determines that the reported payments to BioTime were less than [***] of the actual amount due to BioTime for the period in question, AgeX shall bear the cost of such audit (without limiting BioTime’s other remedies with respect thereto).

 

7.2 After the first commercial sale of a Licensed Product, Licensed Service or Licensed Process by AgeX or any Affiliate, within thirty (30) days after March 31, June 30, September 30 and December 31, of each year, shall deliver to BioTime a true and accurate report of all Net Sales and License Revenue during the preceding three-month period under this Agreement as shall be pertinent to a royalty accounting hereunder. Each such report shall include at least the following:

 

a) number(s) and type(s) of Licensed Products, Licensed Processes and Licensed Services sold, leased, or performed by AgeX and/or its Affiliates;

 

b) total billings and payments received for Licensed Products, Licensed Processes and Licensed Services performed, sold, or leased by AgeX and its Affiliates; and

 

c) deductions applicable as provided in Section 1.25;

 

7.3 each such report submitted, AgeX shall pay to BioTime the royalties and other payments due and payable under this Agreement. If no royalties or other payments shall be due, AgeX shall so report.

 

7.4 AgeX’s reporting obligations hereunder shall terminate when AgeX’s obligation to pay royalties and sublicensi

 

ARTICLE 8. PAYMENTS, RECORDS AND AUDITS

 

8.1 Payments . AgeX shall pay all royalties accruing to BioTime in U.S. Dollars, without deduction of exchange, collection, wiring fees, bank fees, or any other charges, within [***] following the calendar quarter in which Net Sales occur. All payments to BioTime will be made in United States dollars by wire transfer or check payable to “BioTime, Inc.” and sent to:

BioTime, Inc.

 

1010 Atlantic Avenue, Suite 102

 

Alameda, CA 94501

 

Attention: Accounts Payable

 

Email: ap@biotimeinc.com

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY “[***],” HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

     
 

 

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8.2 Late Payments . In the event any payments or other fees are not received by BioTime when due hereunder, AgeX shall pay to BioTime interest charges at the rate of [***] on the amount of such payments or fees that were not paid by the date due for the reporting period.

 

8.3 Foreign Exchange . With respect to Net Sales invoiced in a currency other than U.S. dollars, such Net Sales will be converted into the U.S. dollar equivalent using the average conversion rate existing in the United States (as reported in The Wall Street Journal, New York edition) during the applicable calendar quarter. If The Wall Street Journal ceases to be published, then the rate of exchange to be used shall be that reported in such other business publication of national circulation in the United States on which the parties reasonably agree.

 

8.4 Blocked Currency . In each country where the local currency is blocked and cannot be removed from the country, payments under this Agreement arising from activities in that country for which AgeX, or an Affiliate thereof, does not receive payment in U.S. currency, freely useable outside of such country, shall, notwithstanding anything to the contrary, be paid to BioTime in U.S. Dollars

 

8.5 Records . AgeX shall keep, and cause its Affiliates, to keep, complete, true and accurate records and books containing all particulars that may be necessary for the purpose of showing the amounts payable to BioTime hereunder. Records and books shall be kept at AgeX’s principle place of business or the principal place of business of the appropriate division of AgeX to which this Agreement relates.

 

8.6 Audit . Said books and the supporting data shall be open at all reasonable times for five (5) years following the end of the calendar year to which they pertain, to inspection by BioTime, or its agents, upon reasonable prior notice to AgeX, for the purpose of verifying AgeX’s royalty statement or compliance in other respects with this Agreement. Such access will be available to BioTime upon not less than ten (10) days written notice to AgeX, not more than once each calendar year of the Term for BioTime, during normal business hours, and once a year for BioTime for three years after the expiration or termination of this Agreement. Should such inspection lead to the discovery of a greater than [***], discrepancy in reporting to BioTime’s detriment, AgeX agrees to pay the full cost of such inspection. Whenever AgeX has its books and records audited by an independent certified public accountant, AgeX will, within fifteen (15) days of the conclusion of such audit, provide BioTime with a written statement, certified by said auditor, setting forth the calculation of royalties due to BioTime over the time period audited as determined from the books and records of AgeX.

 

ARTICLE 9. PATENT PROSECUTION, MAINTENANCE, AND DEFENSE

 

9.1 Prosecution, Maintenance, and Defense . BioTime will, as allowed under the ACT Licenses, (i) use Commercially Reasonable Efforts to prosecute and maintain the Patent Rights, and (ii) control all prosecution, filing, and defense of the Patent Rights, provided that BioTime will use Commercially Reasonable Efforts to provide AgeX copies of documents prepared by or received from patent counsel related to the prosecution and/or maintenance of the Patent Rights to AgeX for review and comment prior to filing to the extent practicable under the circumstances.

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY “[***],” HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

     
 

 

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9.2 Patent Expenses . AgeX will be billed and will pay [***] of all reasonable, documented costs and fees and other charges incurred by BioTime with respect to the preparation, prosecution, maintenance, and defense of the Patent Rights that are primarily related to the AgeX Field, within thirty (30) days of receipt of invoice from the selected patent attorney or from BioTime.

 

9.3 Enforcement of the Patent Rights . The Parties agree to notify each other in writing of any actual or threatened infringement by a third party of the Patent Rights or of any third-party claim of invalidity or unenforceability of the Patent Rights, or of any interference or other proceeding affecting the Patent Rights. BioTime shall have the first right to prosecute and defend such claims.

 

9.4 Cooperation . BioTime and AgeX agree to reasonably cooperate in connection with the preparation, filing, prosecution, and maintenance of the Patent Rights. Cooperation includes, without limitation, (a) promptly executing all papers and instruments or requiring employees of BioTime or AgeX to execute papers and instruments as reasonably appropriate to enable BioTime to file, prosecute, and maintain Patent Rights in any country; and (b) promptly informing BioTime of matters that may affect preparation, filing, prosecution, or maintenance of Patent Rights (such as becoming aware of an additional inventor who is not listed as an inventor in a patent application).

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY “[***],” HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

     
 

 

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9.5 New Patents, Inventions, and Discoveries .

 

a) AgeX shall have the right to file and prosecute new patent applications (and to obtain new patents) covering Licensed Products, Licensed Processes, and Licensed Services, and any other subject matter, with respect to any Know How and any other technology, invention, or discovery made by AgeX or any of its Affiliates using Patent Rights and Know How. AgeX shall, and hereby does, grant BioTime an exclusive license to the new patents in the BioTime Exclusive Field and a nonexclusive license in the BioTime Non-Exclusive Field developed from the Effective Date for a period of [***].

 

b) AgeX and BioTime shall jointly file and prosecute new applications covering Licensed Products, Licensed Processes, and Licensed Services, and any other subject matter, with respect to any Know-How and any other technology, invention, or discovery made jointly by AgeX and BioTime using Patent Rights and/or Know-How. The Parties will share in the costs for filing, and prosecuting any jointly owned inventions relating to Licensed Products, Licensed Processes, and Licensed Services and any other subject matter, with respect to any Know-How and any other technology, invention, or discovery using Patent Rights and/or Know-How.

 

9.6 Patent Challenge . In the event AgeX, or its Affiliate(s) challenges the validity, enforceability or scope of any of any Patent Right or claims thereof by legal or administrative action or proceeding or otherwise, or causes or enables any Third Party to undertake such a challenge (a “ Patent Challenge ”):

 

(a) BioTime shall be entitled to terminate this Agreement on written notice to AgeX;

 

(b) AgeX shall provide [***] prior written notice of such Patent Challenge and provide BioTime all materials, information, opinions, and analyses to be used to support such challenge;

 

(c) AgeX shall promptly reimburse all costs and expenses (including attorneys’ fees) incurred by or on behalf of BioTime with respect to any defense against such Patent Challenge; and

 

(d) all amounts due or payable under ARTICLE 4 will be doubled with respect to any payments due or triggered during the pendency of any Patent Challenge. If the outcome of such Patent Challenge is a determination against the party or parties making, causing, or enabling such Patent Challenge (the “ Challenging Party ”), such payments shall remain at such doubled amount for the remainder of the Term. If the outcome of such Patent Challenge is a determination in favor of the Challenging Party, AgeX will have no right to recoup any amounts paid under this Agreement before or during the pendency of such Patent Challenge.

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY “[***],” HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

     
 

 

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ARTICLE 10. PATENT MARKING

 

AgeX shall permanently and legibly mark all AgeX Products made, used, sold, or otherwise disposed of by AgeX, any Affiliate thereof, , or their containers, (i) in accordance with patent notice appropriate under Title 35, United States Code or any similar law in any foreign jurisdiction and (ii) with any other notice of patent rights reasonably necessary, in any country where AgeX Products are sold, to (a) enable Patent Rights (to the extent, in each case, relating to AgeX Products) to be enforced to their full extent or (ii) ensure the availability of all potential legal or equitable remedies with respect to any infringement of any Patent Rights (to the extent, in each case, relating to AgeX Products) by any Third Party.

 

ARTICLE 11. TERMINATION BY BIOTIME

 

11.1 BioTime may terminate this Agreement and the rights, privileges and license granted hereunder by written notice upon a breach or default of this Agreement by AgeX, as follows:

 

a) non-payment of any amounts due which is not cured within [***] of receipt of written notice of such non-payment wherein said notice is delivered by registered mail; or

 

b) breach of any obligation which is not cured within [***] of a written request to remedy such breach wherein said request is delivered by registered mail, or if the breach cannot be cured within said [***] period, failure of AgeX within said [***] period to proceed with reasonable promptness thereafter to cure the breach.

 

11.2 Such termination under 11.1(a) or 11.1(b) shall become automatically effective unless AgeX shall have cured any such material breach or default prior to the expiration of the applicable cure period.

 

11.3 AgeX shall have the right to terminate this Agreement at any time on [***] prior notice to BioTime, and upon payment of all amounts due BioTime through the effective date of the termination.

 

11.4 Upon termination of this Agreement for any reason, nothing herein shall be construed to release either party from any obligation that matured prior to the effective date of such termination; and Article 6, Article 9, Article 12, and any other Sections or provisions which by their nature are intended to survive termination, shall survive any such termination.

 

11.5 Obligations After Termination. No termination of this Agreement by BioTime shall relieve AgeX of its obligation to pay any monetary obligation due or owing at the time of such termination and shall not impair any accrued right of BioTime. AgeX shall pay all attorneys’ fees and costs incurred by BioTime in enforcing any obligation of AgeX or accrued right of BioTime.

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY “[***],” HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

     
 

 

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ARTICLE 12. DISPOSITION OF LICENSED PRODUCTS ON HAND

 

Upon expiration or termination of this Agreement by either party, AgeX shall provide BioTime with a written inventory of all AgeX Products in process of manufacture, in use or in stock. AgeX may dispose of any such AgeX Products within the [***] period following such expiration or termination, provided, however, that AgeX shall pay royalties and render reports to BioTime thereon in the manner specified herein.

 

ARTICLE 13. WARRANTY BY BIOTIME

 

13.1 Right to License . BioTime warrants that it has the lawful right to grant the license set forth in this Agreement.

 

13.2 EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, BIOTIME, ITS DIRECTORS, OFFICERS, AGENTS, SHAREHOLDERS, EMPLOYEES, AND AFFILIATES MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANT ABILITY, FITNESS FOR A PARTICULAR PURPOSE, VALIDITY OF PATENT RIGHTS CLAIMS, ISSUED OR PENDING, AND THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE. NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED AS A REPRESENTATION MADE OR WARRANTY GIVEN BY BIOTIME THAT THE PRACTICE BY AGEX OF THE LICENSE GRANTED HEREUNDER SHALL NOT INFRINGE THE PATENT RIGHTS OF ANY THIRD PARTY. IN NO EVENT SHALL BIOTIME, ITS DIRECTORS, OFFICERS, AGENTS, SHAREHOLDERS, EMPLOYEES AND AFFILIATES BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING ECONOMIC DAMAGE OR INJURY TO PROPERTY AND LOST PROFITS, REGARDLESS OF WHETHER BIOTIME SHALL BE ADVISED, SHALL HAVE OTHER REASON TO KNOW, OR IN FACT SHALL KNOW OF THE POSSIBILITY OF SUCH DAMAGES.

 

13.3 AgeX agrees to maintain insurance or self-insurance that is reasonably adequate to fulfill any potential obligation to the indemnified parties. AgeX shall continue to maintain such insurance or self-insurance during the term of this Agreement and after the expiration or termination of this Agreement for a period of five (5) years.

 

13.4 Limitations . Nothing in this Agreement shall be construed as:

 

a) a warranty or representation by BioTime as to the validity or scope of any Patent Rights.

 

b) a warranty or representation by BioTime that anything made, used, sold or otherwise disposed of pursuant to any license granted under this Agreement is or will be free from infringement of intellectual property rights of third parties.

 

c) an obligation by BioTime to bring or prosecute actions or suits against third parties for patent infringement, except as may expressly be provided in ARTICLE 14 hereof.

 

d) conferring by implication, estoppel or otherwise any license or rights under any patents of BioTime other than Patent Rights.

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY “[***],” HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

     
 

 

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ARTICLE 14. INFRINGEMENT

 

14.1 Knowledge of Infringement . If either party learns of a claim of infringement of or by any Patent Rights with respect to the rights licensed to AgeX under this Agreement, that party shall give written notice of such claim to the other party. BioTime shall, as between the parties, have the sole and exclusive right to prosecute or terminate such infringement or otherwise enforce the Patent Rights against any such infringer. AgeX may not bring suit for any infringement of the Patent Rights without BioTime’s prior written consent. No settlement, consent judgment or other voluntary final disposition of any suit with respect to any infringement of any Patent Right may be entered into without the consent of BioTime.

 

14.2 Expense and Proceeds from Legal Action . Any legal action concerning any infringement of the rights to Patent Rights granted hereunder shall be at the expense of the party by whom suit is filed, hereinafter referred to as the “ Litigating Party ”. Any damages or costs recovered by the Litigating Party in connection with any such legal action filed by it hereunder, and remaining under the Litigating Party is reimbursed for its costs and expenses reasonably incurred in the lawsuit, and after any royalties or other payments due to BioTime under ARTICLE 4 are paid, shall be divided as follows: [***] of such damages or recoveries concerning the infringement of rights granted to AgeX hereunder to AgeX, with BioTime retaining the remainder.

 

14.3 Cooperation in Litigation Proceedings . AgeX and BioTime shall reasonably cooperate with each other in litigation proceedings instituted hereunder, provided that such cooperation shall be at the expense of the Litigating Party, and such litigation shall be controlled by the Litigating Party.

 

ARTICLE 15. INSURANCE

 

15.1 Insurance Requirements . Beginning at the time any AgeX Product is being distributed, sold, or administered to humans (including, in each case, for the purpose of obtaining any required regulatory approvals) by AgeX, or an Affiliate thereof, AgeX will, at its sole cost and expense, procure and maintain commercial general liability insurance issued by an insurance carrier with an A.M. Best rating of A or better in amounts not less than [***]. AgeX will have the Indemnitees named as additional insureds under such insurance. All rights of subrogation will be waived against BioTime and its insurers. Such commercial general liability insurance will provide (i) product liability coverage; (ii) broad form contractual liability coverage for AgeX’s indemnification under this Agreement; and (iii) coverage for litigation costs. The specified minimum insurance amounts will not constitute a limitation on AgeX’s obligation to indemnify the Indemnitees under this Agreement.

 

15.2 Evidence of Insurance and Notice of Changes . AgeX will provide BioTime with written evidence of such insurance upon request of BioTime. AgeX will provide BioTime with written notice of at least [***] prior to the cancellation, non-renewal, or material change in such insurance.

 

15.3 Continuing Insurance Obligations . AgeX will maintain such commercial general liability insurance beyond the expiration or termination of this Agreement during (i) the period that any AgeX Product(s) developed pursuant to this Agreement is being commercially distributed or sold by AgeX, any Affiliate thereof, or any agent of any of the foregoing; and (ii) for [***] after such period.

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY “[***],” HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

     
 

 

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ARTICLE 16. WAIVER

 

No waiver by either party hereto of any breach or default of any of the covenants or agreements herein set forth shall be deemed a waiver as to any subsequent and/or similar breach or default.

 

ARTICLE 17. ASSIGNABILITY

 

Neither this Agreement, nor any rights or obligations hereunder, are assignable or otherwise transferable, in whole or in part (including by operation of law, merger, or other business combination), by AgeX without the prior written consent of BioTime. The failure of AgeX to comply with the terms of this paragraph shall be grounds for termination of the Agreement by BioTime under Section _. Any permitted assignee of either Party shall, as a condition to such assignment, assume all obligations of its assignor arising under this Agreement following such assignment. Any purported assignment by a party of this Agreement, or any of such party’s rights or obligations hereunder, in violation of this Article 17 shall be void. In the event of any assignment of this Agreement by a party requiring the other party’s consent under this ARTICLE 17, the assigning Party shall pay the other Party [***] upon the consummation of such assignment. In the event that written consent is provided by BioTime for the assignment of this Agreement in connection with, (a) assignment of this Agreement by AgeX pursuant to this ARTICLE 17, or (b) any sale by AgeX of all or substantially all of a portion of its assets or business constituting a particular AgeX Product line or business unit engaged in the Research, Development or Commercialization of any AgeX Product, AgeX will pay BioTime a non-refundable fee of [***]. A Change of Control will not be deemed an assignment.

 

ARTICLE 18. INDEMNIFICATION; LIMITATION OF LIABILITY

 

18.1 Indemnity by AgeX . AgeX shall indemnify, defend and hold harmless BioTime, its Affiliates (other than AgeX and AgeX’s subsidiaries), and their respective officers, directors, employees and agents (each a “BioTime Indemnified Party”), from and against any and all Claims arising from or occurring as a result of the death or injury of any person caused or resulting (or allegedly caused or resulting) from the use of any AgeX Product:

 

(a) any default by AgeX of its obligations under this Agreement;

 

(b) any breach by AgeX of any of its representations and warranties set forth in this Agreement; and

 

(c) any negligent act or omission of AgeX in connection with the performance of its obligations under this Agreement;

 

Notwithstanding the foregoing, AgeX shall not be required to indemnify BioTime, its Affiliates, and their respective officers, directors, employees and agents for any Claim to the extent such Claim are attributable to any of the matters as to which BioTime has an obligation to indemnify AgeX or for which the negligence, willful misconduct, or violation of any law by any Person other than AgeX an AgeX Indemnified Party contributed to the death or injury that is the subject of the Claim.

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY “[***],” HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

     
 

 

Execution Version

 

18.2 Indemnity by BioTime . BioTime shall indemnify, defend and hold harmless AgeX, its subsidiaries and their respective officers, directors, employees and agents, from and against any and all costs, claims, damages and expenses (including reasonable attorneys’ fees and other expenses of legal proceedings) (collectively, “ Claims ”), in connection with any and all suits, actions, investigations, claims or demands of Third Parties arising from or occurring as a result of death or injury of any person caused or resulting from the use of any BioTime Product. Notwithstanding the foregoing, BioTime shall not be required to indemnify AgeX, its Affiliates, and their respective officers, directors, employees and agents for any Claims to the extent such Claims are attributable to any of the matters as to which AgeX has an obligation to indemnify BioTime or for which AgeX’s negligence or willful misconduct contributed to the Claim.

 

18.3 Indemnification Procedures .

 

a) Notice of Claim . In the event of any claim, action or proceeding for which a Person is entitled to indemnity hereunder, the Person seeking indemnity (“ Claimant ”) shall promptly notify the relevant Party (“ Indemnitor ”) of such matter in writing, but in no event shall the Indemnitor be liable for any Claim that result from any delay in providing such notice.

 

b) Control of Defense . As its option, Indemnitor may then assume responsibility for and shall have full control of such matter by giving notice to Claimant within thirty (30) days after the Indemnitor’s receipt of notice from Claimant. The assumption of the defense of a Claim by the Indemnitor shall not be construed as an acknowledgment that Indemnitor is liable to indemnify Claimant in respect of the Third Party claim, nor shall it constitute a waiver by Indemnitor of any defenses it may assert against Claimant’s claim for indemnification. Upon assuming the defense of a Third Party claim, Indemnitor may appoint as lead counsel in the defense of the Claim any legal counsel selected by Indemnitor. In the event Indemnitor assumes the defense of a Third Party claim, Claimant shall immediately deliver to Indemnitor all original notices and documents (including court papers) received by Claimant in connection with the Third Party claim. Should Indemnitor assume the defense of a Third Party claim, except as provided below, Indemnitor shall not be liable to Claimant for any legal expenses subsequently incurred by such Claimant in connection with the analysis, defense or settlement of the Third Party claim. In the event that it is ultimately determined that Indemnitor is not obligated to indemnify, defend or hold harmless Claimant from and against the Third Party claim, Claimant shall reimburse Indemnitor for any and all costs and expenses (including attorneys’ fees and costs of suit) and any Third Party claims incurred by Indemnitor in its defense of the Third Party claim. Without limiting the foregoing, any Claimant shall be entitled to participate in, but not control, the defense of such Claim and to employ counsel of its choice for such purpose; provided , however , that such employment shall be at Claimant’s own expense unless (a) the employment thereof has been specifically authorized by Indemnitor in writing, (b) Indemnitor has failed to assume the defense and employ counsel in accordance with this Section 14.4.2 (in which case Claimant shall control the defense) or (c) the interests of Claimant and Indemnitor with respect to such Claim are sufficiently adverse to prohibit the representation by the same counsel of both Parties under applicable law, ethical rules or equitable principles.

 

     
 

 

Execution Version

 

c) Settlement . With respect to any Claim relating solely to the payment of money damages in connection with a Claim and that shall not result in Claimant’s becoming subject to injunctive or other relief or otherwise adversely affecting the business of Claimant in any manner, and as to which Indemnitor shall have acknowledged in writing the obligation to indemnify Claimant hereunder, Indemnitor shall have the sole right to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Claim, on such terms as Indemnitor, in its sole discretion, shall deem appropriate. With respect to all other Claim, where Indemnitor has assumed the defense of the Claim in accordance with Section 9.4(b), Indemnitor shall have authority to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Claim, provided it obtains the prior written consent of Claimant (which consent shall not be unreasonably withheld or delayed). Indemnitor shall not be liable for any settlement or other disposition of a Claim by Claimant that is reached without the written consent of Indemnitor. Regardless of whether Indemnitor chooses to defend or prosecute any Third Party claim, no Claimant shall admit any liability with respect to or settle, compromise or discharge, any Claim without the prior written consent of Indemnitor, such consent not to be unreasonably withheld or delayed.

 

d) Cooperation . Regardless of whether Indemnitor chooses to defend or prosecute any Third Party claim, Claimant shall cooperate in the defense or prosecution thereof and shall furnish such records, information and testimony, provide such witnesses and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested in connection therewith. Such cooperation shall include access during normal business hours afforded to Indemnitor to, and reasonable retention by Claimant of, records and information that are reasonably relevant to such Third Party claim, and making employees and agents available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder, and Indemnitor shall reimburse Claimant for all its reasonable out-of-pocket expenses in connection therewith.

 

e) Expenses . Except as provided above, the costs and expenses, including fees and disbursements of counsel, incurred by Claimant in connection with any claim shall be reimbursed on a calendar quarter basis by Indemnitor, without prejudice to Indemnitor’s right to contest Claimant’s right to indemnification and subject to refund in the event Indemnitor is ultimately held not to be obligated to indemnify Claimant.

 

18.4 Limitation of Liability. UNDER NO CIRCUMSTANCES SHALL A PARTY HERETO BE LIABLE TO THE OTHER PARTY FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE OR SPECIAL DAMAGES IN RESPECT OF PERFORMANCE OF THIS AGREEMENT; PROVIDED, HOWEVER, THAT ALL AMOUNTS THAT AN INDEMNIFIED PERSON IS REQUIRED TO PAY TO ANY THIRD PARTY AS THE RESULT OF A MATTER FOR WHICH SUCH INDEMNIFIED PERSON IS ENTITLED TO BE INDEMNIFIED UNDER THIS ARTICLE SHALL BE CONSIDERED TO BE DIRECT DAMAGES WHICH ARE INDEMNIFIABLE HEREUNDER.

 

     
 

 

Execution Version

 

ARTICLE 19. NOTICES

 

Any payment, notice or other communication required or permitted to be given to either party hereto shall be in writing and shall be deemed to have been properly given and effective: (a) on the date of delivery if delivered in person during recipient’s normal business hours; or (b) on the date of attempted delivery if delivered by courier, express mail service or first-class mail, registered or certified. Such notice shall be sent or delivered to the respective addresses given below, or to such other address as either party shall designate by written notice given to the other party as follows:

 

In the case of AgeX:

 

AgeX Therapeutics, Inc.

1010 Atlantic Avenue, Suite 102

Alameda, CA 94501
Attention: Michael D. West, Ph.D., CEO
Email: mwest@biotimeinc.com

 

In the case of BioTime:

 

BioTime, Inc.

1010 Atlantic Avenue, Suite 102

Alameda, CA 94501

Attention: Aditya Mohanty, CO-CEO

Email: amohanty@biotimeinc.com

 

and

 

BioTime, Inc.

1010 Atlantic Avenue, Suite 102

Alameda, CA 94501

Attention: General Counsel

Email: legal@biotimeinc.com

 

ARTICLE 20. REGULATORY COMPLIANCE

 

20.1 Registration of Agreement . When required by local/national law, AgeX shall register this Agreement, pay all costs and legal fees connected therewith, and otherwise insure that the local/national laws affecting this Agreement are fully satisfied.

 

20.2 Compliance With Law . AgeX shall comply, and shall ensure that its Affiliates comply, with all applicable laws, rules and regulations in the exercise of its rights and performance of its obligations hereunder, including but not limited to all laws, rules, and regulations concerning the export and/or management of technology or information. AgeX understands that the Arms Export Control Act (“ AECA ”), including its implementing International Traffic In Arms Regulations (“ ITAR ”) and the Export Administration Act (“ EAA ”), including its Export Administration Regulations (“ EAR ”), are some (but not all) of the laws and regulations that comprise the U.S. export laws and regulations. AgeX further understands that the U.S. export laws and regulations include (but are not limited to): (1) ITAR and EAR product/service/data-specific requirements; (2) ITAR and EAR ultimate destination-specific requirements; (3) ITAR and EAR end user-specific requirements; (4) ITAR and EAR end use-specific requirements; (5) Foreign Corrupt Practices Act; and (6) anti-boycott laws and regulations. AgeX will comply with all then-current applicable export laws and regulations of the U.S. Government (and other applicable U.S. laws and regulations) pertaining to the AgeX Product(s) (including any associated products, items, articles, computer software, media, services, technical data, and other information). AgeX certifies that it will not, directly or indirectly, export (including any deemed export), nor re-export (including any deemed re-export) the AgeX Product(s) (including any associated products, items, articles, computer software, media, services, technical data, and other information) in violation of U.S. export laws and regulations or other applicable U.S. laws and regulations.

 

     
 

 

Execution Version

 

ARTICLE 21. GOVERNING LAW

 

This Agreement shall be governed by and construed in accordance with the laws of the State of California, without giving effect to any conflict of laws principles or rules.

 

ARTICLE 22. RELATIONSHIP OF PARTIES

 

In assuming and performing the obligations of this Agreement, AgeX and BioTime are each acting as independent parties and neither shall be considered or represent itself as a joint venture, partner, agent or employee of the other.

 

ARTICLE 23. USE OF NAMES

 

23.1 By AgeX . AgeX may not use the name of BioTime in connection with any name, brand or trademark related to Licensed Products, Licensed Process or Licensed Services without prior written consent.

 

23.2 By BioTime . BioTime may not use AgeX’s name in connection with BioTime’s publicity related to their respective intellectual property and commercialization achievements without prior written consent.

 

ARTICLE 24. DISPUTE RESOLUTION

 

24.1 Good Faith Discussions . In the event that any controversy or claim shall arise between the Parties under, out of, in connection with, or relating to this Agreement or the breach thereof, the Party initiating such controversy or making such claim shall provide to the other Party written notice containing a brief and concise statement of the initiating Party’s claims, together with relevant facts supporting them. During a period of sixty (60) days, or such longer period as may be mutually agreed upon in writing by the Parties, following the date of said notice, the Parties shall make good faith efforts to settle the dispute. Such efforts may include, but shall not be limited to, full presentation of both Parties’ claims and responses, with or without the assistance of counsel, before the chief executive officers (or their designees) of the Parties.

 

     
 

 

Execution Version

 

24.2 Arbitration . In the event that the Parties have been unable to reach accord using the procedures set forth in Section 13.1 and only if such is the case, either Party may seek final resolution of the matter through binding arbitration, and only through binding arbitration. The failure of a Party to comply with the provisions of Section 13.2 with respect to any controversy or claim shall constitute an absolute bar to the institution of any proceedings, by arbitration or otherwise, with respect to such controversy or claim. Any such arbitration shall be held in San Francisco, California in the English language before a panel of three (3) arbitrators in accordance with the then existing Rules of Arbitration of the American Arbitration Association (the “AAA”) and judgment upon the award rendered by the arbitrators may be entered or enforced in any court having jurisdiction thereof. In any arbitration proceeding hereunder, each Party shall select one arbitrator and the arbitrators selected by the Parties shall then select a third arbitrator, who shall have at least fifteen (15) years’ experience in pharmaceutical patent licensing. The arbitrators shall permit the Parties to have discovery to the extent permitted by the rules of the AAA. The decision of the arbitrators shall be final and binding on the Parties and shall be accompanied by a written opinion of the arbitrators explaining the arbitrators’ rationale for their decision. The intent of the Parties is that except for the entering of an arbitration order in a court of competent jurisdiction, disputes shall be resolved finally in arbitration as provided above, without appeal, and without recourse to litigation in the courts.

 

24.3 Exceptions . Notwithstanding the foregoing provisions of Sections 13.1 and 13.2, either Party may initiate an action before any court having competent jurisdiction in order to obtain interim or conservatory relief, such as an order to preserve the status quo and to avoid incurring irreparable harm pending the resolution of any dispute that is submitted to arbitration, to prevent or enjoin a breach or threatened breach of confidentiality or to enforce provisions of this Agreement relating to ownership rights in intellectual property without complying with the procedures set forth in Sections 25.1 and 25.2.

 

ARTICLE 25. GENERAL PROVISIONS

 

25.1 The headings of the several sections are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

 

25.2 This Agreement shall not be binding upon the parties until it has been signed herein below by or on behalf of each party, and as of the Effective Date.

 

25.3 No amendment or modification of this Agreement shall be valid or binding upon the parties unless made in writing and signed by both parties.

 

25.4 This Agreement embodies the entire understanding of the parties, and supersede all previous communications, representations or understandings, either oral or written, between the parties relating to the subject matter thereof.

 

25.5 The provisions of this Agreement are severable, and in the event that any provision of this Agreement shall be determined to be invalid or unenforceable under any controlling body of the law, such invalidity or unenforceability shall not in any way affect the validity or enforceability of the remaining provisions hereof.

 

25.6 This Agreement may be signed in counterparts, each of which when taken together shall constitute one fully executed document. Each individual executing this Agreement on behalf of a legal Person does hereby represent and warrant to each other person so signing that he or she has been duly authorized to execute this Agreement on behalf of such Person.

 

25.7 In the event of any litigation, arbitration, judicial reference or other legal proceeding involving the parties to this Agreement to enforce any provision of this Agreement, to enforce any remedy available upon default under this Agreement, or seeking a declaration of the rights of either party under this Agreement, the prevailing party shall be entitled to recover from the other such attorneys’ fees and costs as may be reasonably incurred, including the costs of reasonable investigation, preparation and professional or expert consultation incurred by reason of such litigation, arbitration, judicial reference, or other legal proceeding.

 

[Signature page follows]

 

     
 

 

Execution Version

 

IN WITNESS WHEREOF, BioTime and AgeX have executed this Agreement by their respective officers hereunto duly authorized, on the day and year hereinafter written.

 

AGEX THERAPEUTICS, INC.   BIOTIME, INC.
         
By /s/ Michael D. West   By /s/ Aditya P. Mohanty
               (Signature)                  (Signature)
         
Name: Michael D. West   Name: Aditya P. Mohanty
         
Title: Chief Executive Officer   Title: Co-Chief Executive Officer

 

[Signature page of the ACT Sublicense Agreement]

 

     
 

 

Execution Version

 

EXHIBIT A

 

Cells or Cell Lines

 

ACT No. Cell Line
[***] [***]

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY “[***],” HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

     
 

 

Execution Version

 

EXHIBIT B

 

ACT No. Cell Line
[***] [***]

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY “[***],” HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

     
 

 

Execution Version

 

EXHIBIT C

 

Patent Rights

 

[***]

 

[***]

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY “[***],” HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

     
 

 

 

The information contained herein is subject to completion or amendment. A Registration Statement on Form 10 relating to these securities has been filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended.

 

SUBJECT TO COMPLETION, DATED AUGUST 30 , 2018

 

INFORMATION STATEMENT

 

 

AGEX THERAPEUTICS, INC.

Common stock, par value $0.0001 per share

 

This information statement is being furnished to you in connection with the distribution of some or all of the outstanding shares of common stock, par value $0.0001 per share, of AgeX Therapeutics, Inc. (“AgeX”) on a pro rata basis to holders of outstanding common shares, no par value, of BioTime, Inc. (the “Distribution”) as of the record date described below in a taxable transaction. See “Material U.S. Federal Income Tax Consequences of the Distribution.”

 

AgeX is engaged in the business of research and development of novel therapeutics targeting human aging. BioTime, Inc. (“BioTime”) currently owns 40.2 % of our outstanding common stock. Following the Distribution, AgeX’s common stock will be publicly traded.

 

You will receive one share of AgeX common stock for every 10 BioTime common shares you h e ld as of 5:00 p.m., New York City time, on July 31, 2018, the “Record Date” of the Distribution. If you sell your BioTime common shares after the record date and on or before the date of the Distribution, you will also be selling your right to receive shares of AgeX common stock in the Distribution. The Distribution will be made only in book-entry form. We expect the Distribution to occur at                 , New York City time, on or about                   , 2018, which we refer to as the “Distribution Date.” In this information statement we sometimes refer to the shares of AgeX common stock to be distributed to BioTime shareholders in the Distribution as the “Distribution Shares.” BioTime will not distribute any fractional shares of AgeX common stock. See “The Distribution—Manner of Effecting the Distribution—Cash in lieu of fractional shares.”

 

 

 

 

No shareholder approval of the Distribution by BioTime shareholders is required or sought, and you are not being asked for a proxy to vote on the Distribution. We are not asking you for a proxy and you should not send us a proxy. BioTime shareholders will not be required to pay for the Distribution Shares they receive in the Distribution or to surrender or exchange BioTime common shares in order to receive their Distribution Shares and will not be required to take any other action in connection with the Distribution.

 

We intend to list AgeX common stock on the NYSE American securities exchange under the symbol “AGE.” If our listing application is not approved, we plan to arrange for the trading of AgeX common stock on the OTC Bulletin Board no later than the completion of the Distribution. There is no current trading market for AgeX common stock. We expect, however, that a limited trading market for AgeX common stock, commonly known as a “when-issued” trading market, will develop at least one trading day prior to the record date for the Distribution, and we expect “regular-way” trading of AgeX common stock will begin the first trading day after the distribution date.

 

We are an “emerging growth company” as defined under the federal securities laws and, as such, may elect to comply with certain reduced public company reporting requirements for future filings. See “Summary—Implications of Being an Emerging Growth Company.”

 

In reviewing this information statement, you should carefully consider the matters described under “Risk Factors” for a discussion of certain factors that should be considered by recipients of our common stock.

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this information statement is truthful or complete. Any representation to the contrary is a criminal offense.

 

This information statement does not constitute an offer to sell or the solicitation of an offer to buy any securities.

 

The date of this information statement is                 , 2018.

 

 

 

 

TABLE OF CONTENTS

 

    Page
Information Statement Summary   6
     
Questions and Answers About AgeX and the Distribution   14
     
Risk Factors   20
     
The Distribution   77
     
Market for Our Common Equity   84
     
Dividend Policy   86
     
Selected Financial Data   87
     
Management’s Discussion and Analysis of Financial Condition and Results of Operations   94
     
Business   121
     
Management   149
     
Executive Compensation   156
     
Security Ownership by Certain Beneficial Owners and Management   166
     
Certain Federal Income Tax Considerations   173
     
Description of Securities   177
     
Index to Audited Consolidated Financial Statements and Unaudited Condensed Consolidated Interim Financial Statements   F-1
     
Report of Independent Registered Public Accounting Firm   F-2

 

  2  

 

 

Unless otherwise indicated or the context otherwise requires, references herein to:

 

  “AgeX,” the “Company,” “we,” “our,” or “us” refer to AgeX Therapeutics, Inc. and its consolidated subsidiaries, and
     
  “BioTime” refer to BioTime, Inc. and its consolidated subsidiaries,

 

in each case giving effect to the Distribution.

 

This information statement is being furnished solely to provide information to BioTime shareholders who will receive shares of our common stock in the Distribution. It is not and is not to be construed as an inducement or encouragement to buy or sell any of our securities or any securities of BioTime. This information statement describes our business, our relationship with BioTime and how the Distribution affects BioTime and its shareholders, and provides other information to assist you in evaluating the benefits and risks of holding or disposing of our common stock that you will receive in the Distribution. You should be aware of certain risks relating to the Distribution, our business, and ownership of our common stock, including those described under the heading “Risk Factors.”

 

You should not assume that the information contained in this information statement is accurate as of any date other than the date set forth on the cover. Changes to the information contained in this information statement may occur after that date, and we undertake no obligation to update the information, except in the normal course of our public disclosure obligations and practices or as may be required by applicable law.

 

You should rely only on the information contained in this information statement. We have not, and BioTime has not, authorized any other person to provide you with information different from, or in addition to, that contained in this information statement. We do not take any responsibility for, and can provide no assurance as to the reliability of, any information other than the information contained in this information statement.

 

  3  

 

 

FOR RESIDENTS OF THE PHILIPPINES

 

THESE SECURITIES ARE BEING OFFERED OR SOLD PURSUANT TO AN EXEMPT TRANSACTION UNDER SECTION 10.1(c) OF THE PHILIPPINES SECURITIES REGULATION CODE.

 

THE SECURITIES BEING OFFERED OR SOLD HAVE NOT BEEN REGISTERED WITH THE PHILIPPINES SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES REGULATION CODE. ANY FURTHER OFFER OR SALE THEREOF IS SUBJECT TO REGISTRATION  REQUIREMENTS UNDER THE CODE UNLESS SUCH OFFER OR SALE QUALIFIES AS AN EXEMPT TRANSACTION

 

Notice to Recipients in Australia

 

THIS INFORMATION STATEMENT DOES NOT CONSTITUTE A DISCLOSURE DOCUMENT UNDER PART 6D.2 OF THE CORPORATIONS ACT 2001 OF THE COMMONWEALTH OF AUSTRALIA (CORPORATIONS ACT). IT DOES NOT AND IS NOT REQUIRED TO CONTAIN ALL THE INFORMATION WHICH WOULD BE REQUIRED UNDER THE CORPORATIONS ACT TO BE INCLUDED IN SUCH A DISCLOSURE DOCUMENT AND HAS NOT BEEN LODGED WITH THE AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION (ASIC).

 

THE OFFER TO WHICH THIS INFORMATION STATEMENT RELATES IS BEING MADE IN AUSTRALIA TO HOLDERS OF SHARES OF BIOTIME COMMON STOCK LOCATED IN AUSTRALIA WITHOUT DISCLOSURE UNDER PART 6D.2 OF THE CORPORATIONS ACT IN RELIANCE ON SECTION 708(15) OF THE CORPORATIONS ACT. AS ANY OFFER OF AGEX COMMON STOCK UNDER OR IN CONNECTION WITH THIS INFORMATION STATEMENT WILL BE MADE WITHOUT DISCLOSURE IN AUSTRALIA UNDER PART 6D.2 OF THE CORPORATIONS ACT, THE OFFER OF THOSE SECURITIES FOR RESALE IN AUSTRALIA WITHIN 12 MONTHS MAY, UNDER SECTION 707 OF THE CORPORATIONS ACT, REQUIRE DISCLOSURE TO INVESTORS UNDER PART 6D.2 IF NONE OF THE APPLICABLE EXEMPTIONS IN SECTION 708 APPLIES TO THAT RESALE.

 

BY ACCEPTING AGEX COMMON STOCK, PERSONS RESIDENT OR DOMICILED IN AUSTRALIA REPRESENT AND WARRANT THAT THEY ARE NOT ACQUIRING SUCH STOCK FOR THE PURPOSE OF SELLING OR TRANSFERRING OFFERED STOCK TO INVESTORS IN AUSTRALIA AND FURTHER UNDERTAKE TO US THAT THEY WILL NOT, FOR A PERIOD OF 12 MONTHS FROM THE DATE OF ISSUE OF THE STOCK, SELL OR TRANSFER, OR GRANT, ISSUE OR TRANSFER AN INTEREST IN OR AN OPTION OVER THE COMMON STOCK, OR OFFER TO DO ANY OF THOSE THINGS, TO INVESTORS IN AUSTRALIA EXCEPT IN CIRCUMSTANCES WHERE DISCLOSURE TO INVESTORS IS NOT REQUIRED UNDER PART 6D.2 OF THE CORPORATIONS ACT OR WHERE A COMPLIANT DISCLOSURE DOCUMENT IS PREPARED AND LODGED WITH ASIC.

 

  4  

 

 

Industry and Market Data

 

This information statement contains market data and industry forecasts that were obtained from industry publications, third party market research and publicly available information. These publications generally state that the information contained therein has been obtained from sources believed to be reliable. While we believe that the information from these publications is reliable, the industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of important factors, including those described in the section titled “Risk Factors.” These and other factors could cause results to differ materially from those expressed in the estimates made by third parties and by us.

 

This information statement also contains estimates and other statistical data made by independent parties and by us relating to market size and growth and other data about our industry. We obtained the industry and market data in this information statement from our own research as well as from industry and general publications, surveys and studies conducted by third parties, some of which may not be publicly available. Such data involves a number of assumptions and limitations and contains projections and estimates of the future performance of the industries in which we operate that are subject to a high degree of uncertainty. We caution you not to give undue weight to such projections, assumptions and estimates.

 

ABOUT OUR FINANCIAL STATEMENTS

 

Although we were not incorporated until January 2017, and did not acquire our initial assets until August 2017, we have prepared and included in this information statement audited consolidated historical financial statements as of and for the year ended December 31, 2017 and 2016. We have also prepared and included in this information statement unaudited condensed consolidated interim historical financial statements as of and for the six months ended June 30 , 2018 and the comparative period for the six months ended June 30 , 2017. The consolidated financial statements are presented on a carve-out basis for purposes of presenting what AgeX’s consolidated financial position, consolidated results of operations and consolidated cash flows would have been had AgeX operated the business as a standalone entity for such periods. Our results of operations reflected in such consolidated financial statements may not be indicative of our results of operations as a separate, publicly-traded company or indicative of our results expected for any future period, and should not be relied upon as an indicator of AgeX’s future results. See Note 1. “Organization, Basis of Presentation and Liquidity” to our consolidated financial statements included elsewhere in this information statement.

 

This information statement also includes an unaudited condensed combined statement of operations to give pro forma effect to the transaction described under “Unaudited Pro Forma Condensed Combined Financial Statements.” The unaudited pro forma condensed combined statement of operations is presented for illustrative purposes and is not necessarily indicative of the consolidated results of operations that would have occurred if the relevant transaction had been consummated on the date indicated, nor is it necessarily indicative of our future consolidated results of operations.

 

  5  

 

 

 

INFORMATION STATEMENT SUMMARY

 

This summary provides an overview of selected information contained elsewhere in this information statement or in our registration statement on Form 10. For a more complete understanding of our business and the Distribution, you should read this entire information statement carefully, particularly the discussion set forth under “Risk Factors” and our historical financial statements, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” our unaudited pro forma condensed combined financial statements and the respective notes to those statements included elsewhere in this information statement.

 

Overview

 

We are a biotechnology company focused on the development and commercialization of novel therapeutics targeting human aging. Our mission is to apply our comprehensive experience in fundamental biological processes of human aging to a broad range of associated medical conditions. We believe that demand for therapeutics addressing such conditions is on the rise, commensurate with the demographic shift of aging in the United States and many other industrialized countries. Our proprietary technology, based on telomerase-mediated cellular immortality and regenerative biology, allows us to utilize telomerase-expressing regenerative Pluripotent Stem Cells (“PSCs”) for the manufacture of cell-based therapies to regenerate tissues afflicted with age-related chronic degenerative disease. Our products under development include two cell-based therapies derived from telomerase-positive PSCs and two product candidates derived from our proprietary induced Tissue Regeneration (iTR TM ) technology. We own or have licenses to a number of patents and patent applications used in the generation of these development-stage products, including intellectual property related to PSC-derived clonal embryonic progenitor cell lines (PureStem ® technology) and HyStem ® delivery matrices. We have patent applications filed to protect our two cell based therapies derived from telomerase-positive PSCs and our two iTR product candidates. The applications, if issued, will provide protection for our methods of use and the compositions of our products. We fully describe our patents and applications below in the “Intellectual Property” section. The patents related to the PureStem ® technology cover compositions of cells, methods of culturing and methods of differentiating. The HyStem ® delivery matrix patents cover compositions, pharmaceutical compositions with living cells, and certain methods of administering the compositions. We plan to initiate our first 510(k) application for Renelon TM , a first-generation iTR product, in 2018 and subsequently initiate three clinical trials of cell- and drug-based therapies, each targeting large unmet needs in age-related medicine.

 

Prior to initiation of clinical trials, we will need to complete preclinical and even discovery-level research, complete the standard operating procedures to be used, complete the methods and documentation for characterization of the product, and produce and test the genetic modifications in the master cell banks of the pluripotent stem cells under current Good Manufacturing Practices (“cGMP”). In addition, we will be required to expand the numbers of the pluripotent stem cell master cell banks for future use, perform biosafety testing and release the first clinical batch based on preliminary characterization results, complete full product characterization, and define the clinical trial and regulatory strategy. See “Risk Factors— Risks Related to Our Business Operations” for discussion of risks relating to our preclinical development and clinical trials.

 

Aging is one of the most significant demographic trends of our time. Approximately 76 million baby boomers in the United States are now approaching old age. This demographic shift therefore poses a significant challenge to our economy. The unsolved problem relates to the fact that chronic conditions account for some 80% of total health care expenditures in the United States and the elderly have a higher prevalence of chronic degenerative disease than the young. Approximately 80% of older adults have one chronic disease, and 68% have two or more. We are focused on translating state-of-the-art laboratory science relating to aging into therapeutic biologics, drugs, and devices targeting age-related conditions underlying a majority of these concerns.

 

Technology Platform

 

The technology underlying our therapeutic product development programs is based on telomerase-mediated cellular immortality and regenerative biology. By “telomerase-mediated cellular immortality,” we refer to the fact that cells that express sufficient levels of a protein called telomerase are capable of escaping cell aging. By “regenerative biology,” we refer to novel methods to regenerate tissues afflicted with age-related chronic degenerative disease, such as coronary disease, heart failure, and the complications associated with Type II diabetes. We intend to utilize telomerase-expressing regenerative PSCs for the manufacture of cell-based therapies and induced Tissue Regeneration compositions for its drug-based modalities. We own or have licenses to numerous patents and patent applications covering methods and compositions relating to this technology platform.

 

 

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Our Pipeline

 

Our product pipeline includes two cell-based and two drug-based therapeutic product candidates in development as well as currently-marketed online database products and research products outlined in Figure 1.

 

 

 

Figure 1. The AgeX product pipeline. T2D (Type II Diabetes), MI (Myocardial Infarction), CHF (Congestive Heart Failure), EFT (Embryonic-Fetal Transition), Dx (Diagnosis), Tx (Therapy).

 

AGEX-BAT1 and AGEX-VASC1 are cell-based therapies in the discovery stage of development comprised of young regenerative cells formulated in our proprietary HyStem ® matrix designed to correct metabolic imbalances in aging and to restore vascular support in ischemic tissues respectively. AGEX-iTR1547 is a drug-based formulation in discovery stage of development intended to restore regenerative potential in a wide array of aged tissues afflicted with degenerative disease using the company’s proprietary iTR technology. Renelon TM is a first-generation iTR product designed to promote scarless tissue repair and is planned to be developed as a topically-administered device for commercial development.

 

We, through our subsidiaries LifeMap Sciences, Inc. and LifeMap Sciences LTD (Israel), or collectively referred to as LifeMap Sciences, also plan to continue to generate near-term product revenues through the marketing of genomic interpretation algorithms, advertising, and subscriptions from an online relational database, GeneCards ® . In addition, the Company, through its ESI BIO division, markets Cytiva® comprised of PSC-derived heart muscle cells useful in screening drugs for efficacy and safety in collaboration with GE Healthcare. Cancer diagnostic and therapeutic applications of iTR technology are planned for development through third party partnerships.

 

Recent Developments

 

Juvenescence Transaction  

 

On August 30 2018, BioTime consummated the secondary sale of 14.4 million shares of our common stock to Juvenescence Limited (“Juvenescence”) pursuant to a stock purchase agreement in exchange for a total purchase price of $43.2 million. Half of the total purchase price will be payable in cash in two equal installments , with one paid at closing of the transaction and the second payable on November 5, 2018 , and the balance was paid with an unsecured convertible note (the “Convertible Note”) issued by Juvenescence to BioTime, which will mature two years after the date of the transaction and bear interest at 7% per year. The Convertible Note will convert into Juvenescence common stock upon the consummation of an underwritten initial public offering of Juvenescence with gross proceeds of at least $50 million at the price per share of common stock sold in such offering (which may be increased if our common stock is then listed on a U.S. national securities exchange) . If a qualifying underwritten initial public offering has not occurred prior to the maturity date, the Convertible Note, plus accrued interest, may be redeemed in cash or converted into shares of Juvenescence’s Series A preferred shares at a conversion price of $15.60 per share at the election of BioTime. The transactions above are referred to herein as the “Juvenescence Transaction.”

 

In connection with the Juvenescence Transaction, BioTime and Juvenescence  also entered into a shareholders agreement (the “Shareholders Agreement”) setting forth the governance, approval and voting rights of the parties with respect to their holdings of our common stock, including Board designation and representation rights, approval rights, preemptive rights, rights of first refusal and co-sale and drag-along and tag-along rights for so long as a party maintains certain specified ownership levels. See “Management.”

 

Upon completion of the Juvenescence Transaction, BioTime’s ownership in us was reduced from 80.4% to 40.2% of our issued and outstanding shares of common stock, and Juvenescence’s ownership in AgeX was increased from 5.6% to 45.8% of our issued and outstanding shares of common stock. As a result, beginning on August 30, 2018, we are no longer considered a subsidiary of BioTime and, as of that date, BioTime has experienced a “loss of control” of a subsidiary, as defined by generally accepted accounting principles in the United States. Loss of control is deemed to have occurred when, among other things, a parent company owns less than a majority of the outstanding common stock in a subsidiary, lacks a controlling financial interest in the subsidiary, and is unable to unilaterally control the subsidiary through other means such as having, or being able to obtain, the power to elect a majority of the subsidiary’s Board of Directors based solely on contractual rights or ownership of shares holding a majority of the voting power of the subsidiary’s voting securities. All of these loss-of-control factors were present with respect to BioTime’s ownership interest in us as of August 30, 2018. Accordingly, BioTime has deconsolidated our consolidated financial statements and results from its consolidated financial statements and results beginning on August 30, 2018. We are currently an affiliate of BioTime.

 

Escape Acquisition

 

On August 13, 2018, we entered into an asset purchase agreement (the “Purchase Agreement”) with Escape Therapeutics, Inc. (“Escape”) pursuant to which we agreed to acquire from Escape certain patents related primarily to HLA-G to suppress rejection of transplanted cells and tissues, certain pluripotent stem cell lines, and certain related research equipment. We paid Escape $1,072,436 in cash and issued 80,000 shares of our common stock in payment for the assets.

 

In addition to the purchase price, we will pay Escape a royalty of less than 1% on net sales of products, process and services covered under the acquired patents, if the assets are commercialized. Additional shares of our common stock totaling up to $4.3 million will also be issued to Escape upon the attainment of development and regulatory approval milestones for a product covered by the acquired patents.

 

We have also agreed that if we have not expended a certain level of funds by the end of 2019 toward the research and development of pluripotent stem cell or progenitor cell products and process utilizing the acquired patents and the development or improvement of the acquired patents, we will make an additional annual cash payment to Escape. If total development expenditures have still not reached a predetermined level by the end of 2020, we will pay Escape additional amounts and the royalty rate for net sales of products, processes and services will be tripled until total expenditures reach the required threshold. The aggregate cash payments we may make to Escape for not reaching the predetermined level of expenses can be up to $1 million.

 

 

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Business Strategy

 

From our inception in August 2017, we have focused our efforts on the pre-clinical development of human therapeutics targeting aging. Our general business strategy is to initially focus our technology platform of cellular immortality and regenerative medicine on individual tissues in the body (age-related degenerative diseases such as age-related cardiovascular disease), and then expand the potential indications throughout the body affected by aging.

 

Our tactics in executing on this strategy include:

 

    Preclinical and clinical validation of the safety and efficacy of our twin cell therapy and iTR products in one organ system;  
         
   

Expand indications of the validated products contingent on favorable trial results;

 
         
    Partner our cGMP clinical-grade PSCs with third parties under royalty-bearing agreements for non-core applications;  
         
    Build near-term revenues in our related research product and bioinformatics businesses to support the therapeutic programs; and  
         
    Serially partner cell therapy programs, maintaining the iTR platform as the Company’s core technology long-term.  

 

Summary Risk Factors

 

Our ability to execute our business strategy and the Distribution is subject to numerous risks and uncertainties, which are outlined in the section titled “Risk Factors” found elsewhere in this information statement. These risks include:

 

    We are a discovery-stage development company and have incurred operating losses since our inception. We anticipate that we will incur continued losses for the foreseeable future, and we do not know if we will ever attain profitability.  
         
    We will spend a substantial amount of our capital on discovery and preclinical research and development, but we might not succeed in developing products and technologies that are useful in medicine. If we fail to obtain necessary financing, we may not be able to complete the development and commercialization of our product candidates.  
         
    We have not tested any of our product candidates in clinical trials. Success in early discovery and preclinical studies or clinical trials may not be indicative of results obtained in later preclinical studies and clinical trials.  
         
    We do not currently have any products on the market and have not yet generated any substantial revenues from operations.  
         
    We will need to expand our organization, and we may experience difficulties in managing this growth, which could disrupt our operations  

 

 

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    We will face risks related to the manufacture of medical products for any product candidates that we develop.  
         
    We face significant competition in an environment of rapid technological change and the possibility that our competitors may achieve regulatory approval before us or develop therapies that are more advanced or effective than ours, which may harm our business and financial condition, and our ability to successfully market or commercialize our product candidates.  
         
    The commercial success of any of our current or future product candidates will depend upon the degree of market acceptance by physicians, patients, third-party payors, and others in the medical community.  
         
    If the market opportunities for our product candidates are smaller than we believe they are, we may not meet our revenue expectations and, even assuming approval of a product candidate, our business may suffer.  
         
    Any cell-based products that receive regulatory approval may be difficult and expensive to manufacture on a commercial scale.  
         
    Because we are engaged in the development of pharmaceutical and cell therapy products, the price of shares of our common stock may rise and fall rapidly.  
         
    There is no certainly that our pending or future patent applications will result in the issuance of patents and the process for applying for such patents can require substantial time and money.  
         
    Our intellectual property may be insufficient to protect our products.  
         
    Our relationship with BioTime may result in conflicts of interest as three of the six current members of our Board of Directors are also officers or directors of BioTime and two of those three members are also our executive officers.  
         
    We may be responsible for U.S. federal income tax liabilities that relate to the Distribution.  

 

Corporate Information

 

We were incorporated in January 2017 in the state of Delaware as a subsidiary of BioTime. BioTime currently owns 40. 2 % of the outstanding shares of AgeX and, as of August 30, 2018, we are no longer a subsidiary but remain an affiliate of BioTime. Juvenescence currently owns 45.8% of the outstanding shares of AgeX and is the largest shareholder of AgeX. Our principal executive offices are located at 1010 Atlantic Avenue, Suite 102, Alameda, California 94501. Our telephone number is (510) 871-4190. Our website address is www.agexinc.com . The information contained in, or accessible through, our website is not incorporated by reference into this information statement. We acquired our principal assets and licenses and sublicenses to certain patented technology, as well as certain of our subsidiaries, research and development departments and employees, and an equity method investment Ascendance Biotechnology, Inc., from BioTime during August 2017, including an 82% ownership stake in the outstanding shares of common stock of a California corporation, LifeMap Sciences, Inc., which in turn owns 100% of the Israel-based company LifeMap Sciences, Ltd. LifeMap Sciences, Ltd. operates in Israel and employs locally, including working and collaborating with professors and other scientists at the Weizmann Institute of Science located in Rehovot, Israel AgeX also owns 95% of ReCyte Therapeutics, Inc., a California corporation, focused on vascular regeneration. Figure 2 illustrates the ownership structure of BioTime, AgeX and certain of their respective subsidiaries prior to the Distribution.

 

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Figure 2. Relationship of AgeX Therapeutics, Inc with its largest shareholders and its subsidiaries prior to the Distribution.

 

This information statement also includes trademarks, tradenames, and service marks that are the property of other organizations. Solely for convenience, our trademarks and tradenames referred to in this information statement may appear without the ® and ™ symbols, but those references are not intended to indicate in any way that we will not assert to the fullest extent under applicable law our rights or the right of the applicable licensor to these trademarks and tradenames.

 

Implications of Being an Emerging Growth Company

 

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). We will remain an “emerging growth company” until the earliest of: (i) the last day of the fiscal year in which we have total annual gross revenues of $1.07 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the Distribution; (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt securities during the previous three years; or (iv) the date on which we are deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended.

 

As an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable, in general, to public companies that are not emerging growth companies. These provisions include:

 

  reduced disclosure about our executive compensation arrangements;  
         
  no non-binding shareholder advisory votes on executive compensation or golden parachute arrangements; and  
         
  exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting.  

 

In addition, the JOBS Act permits an emerging growth company such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. We are choosing to “opt out” of this provision and, as a result, we will comply with new or revised accounting standards as required when they are effective for public companies. This decision to opt out of the extended transition period under the JOBS Act is irrevocable.

 

 

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Summary of the Distribution

 

The following is a summary of the terms of the Distribution. See “The Distribution” for a more detailed description of the matters described below.

 

  Distributing company   BioTime, Inc.  
         
  Company whose shares are to be distributed   AgeX Therapeutics, Inc.  
         
  Distribution ratio  

Each holder of BioTime common shares will receive one share of AgeX common stock for every 10 BioTime common shares held on the Record Date.

 
         
  Securities to be distributed   Approximately 12,687,732 shares of AgeX common stock, which will constitute approximately 35.4% of the AgeX common stock outstanding immediately after the Distribution. Certain current minority shareholders of AgeX, as well as Juvenescence and BioTime , will own the balance of the outstanding shares of AgeX common stock immediately after the Distribution, and will acquire additional AgeX shares through the Distribution to the extent that they owned BioTime common shares on the Record Date. The number of shares that BioTime will distribute to its shareholders will be reduced to the extent that cash payments are made in lieu of the issuance of fractional shares of AgeX common stock, as described below.  
         
  Proposed NYSE American Trading Symbol  

“AGE.”

 
         
  Fractional shares  

BioTime will not distribute any fractional shares of AgeX common stock to its shareholders. Instead, the distribution agent will aggregate fractional shares into whole shares, sell the whole shares in the open market at prevailing market prices, and distribute the aggregate net cash proceeds of the sales to each BioTime shareholder who otherwise would have been entitled to receive a fractional share in the Distribution, net of any applicable withholding taxes. Recipients of cash in lieu of fractional shares will not be entitled to any interest on the amounts of payment made in lieu of fractional shares.

 

The distribution agent will have the sole discretion to select the broker-dealers through which to sell the aggregated fractional shares and to determine when, how and at what price to sell such shares. Neither the distribution agent nor the selected broker-dealers will be affiliates of BioTime or AgeX.

 

 

 

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  Record date   The record date was July 31, 2018 (the “Record Date”), and BioTime share ownership for the purposes of the Distribution will be determined as of 5:00 p.m., New York City time, on that date. Only holders of BioTime common shares as of such time on the Record Date will be entitled to receive AgeX common stock in the Distribution.  
         
  Distribution Date   The distribution date will be on or about              , 2018 (the “Distribution Date”).  
         
  Relationship between AgeX and BioTime after the Distribution  

BioTime is expected to continue to own shares of our common stock following the Distribution . BioTime will continue to provide AgeX, on a reimbursable basis, use of office and laboratory facilities and equipment; laboratory and office supplies; utility services to the extent the same are provided to the shared office and laboratory facilities; information technology support; human resources; and other services consistent with past practices under an existing Shared Facilities Agreement. We and BioTime have also entered into other agreements providing for the allocation of tax benefits, employee matters and liabilities arising from periods prior to the Distribution, certain patent and technology licenses and sublicenses, including the existing License Agreement, dated August 17, 2017, between BioTime and AgeX, and shared facilities and services.

 
         
  Management of AgeX  

Following the earlier of the Distribution or the payment by Juvenescence to BioTime of the second cash installment in connection with the Juvenescence Transaction (the “Second Cash Payment”) , AgeX will have a board of directors (the “Board of Directors”) consisting of seven directors,               of whom will qualify as “independent” directors under the rules of the NYSE American, and                 of whom will not qualify as “independent” because they are officers of AgeX or BioTime, have received compensation from AgeX or BioTime that disqualifies them as “independent” under the NYSE American Company Guide or will be affiliated with Juvenescence. AgeX will have its own executive officers, although its Chief Executive Officer, Michael D. West, Ph.D., and Chief Financial Officer, Russell Skibsted, will continue to serve as Co-Chief Executive Officer and Chief Financial Officer, respectively, of BioTime. Each of BioTime and Juvenescence have certain Board designation and representation rights and approval rights. See “Management.”

 

 

 

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  Dividend policy   We do not plan on paying any cash dividends on our common stock in the immediate future. Instead, we will retain any income we may earn to finance our business operations. All decisions regarding the declaration and payment of dividends will be evaluated from time to time in light of our financial condition, earnings, growth prospects, other uses of cash, funding requirements, applicable law, and other factors that our Board of Directors deems relevant. See the section entitled “Dividend Policy.”  
         
  Risk factors   You should carefully consider the matters discussed under the section entitled “Risk Factors.”  
         
  Amendment or Cancellation of the Distribution   BioTime may, in its sole discretion: (a) terminate the Distribution prior to delivery of the Distribution Shares to BioTime shareholders; (b) change the Distribution Date for the Distribution to a later date; (c) change the Record Date prior to the Distribution of the Distribution Shares to BioTime shareholders; or (d) amend or modify the terms of the Distribution. If BioTime determines to terminate the Distribution, changes the Distribution Date or the Record Date , or amends or modifies the terms of the Distribution, BioTime and AgeX will issue a press release, BioTime will file a Current Report on Form 8-K and AgeX will provide a supplement to this Information Statement disclosing the applicable changes.  

 

 

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QUESTIONS AND ANSWERS ABOUT AGEX AND THE DISTRIBUTION

 

Q: Why am I receiving this information statement?

 

A: BioTime is delivering this information statement to you because you were a holder of BioTime common shares on the Record Date for the Distribution.

 

Q: What is the Distribution?

 

A: The Distribution is the distribution of one share of AgeX common stock for every 10 common shares of BioTime that were outstanding on the Record Date. No action is required for you to participate in the Distribution. After the Distribution, BioTime shareholders will receive in the Distribution approximately 35. 4 % of the shares of AgeX common stock that will be outstanding immediately upon the completion of the Distribution. Certain current minority shareholders of AgeX, together with Juvenescence and BioTime , may own the balance of the shares of AgeX common stock that will be outstanding upon completion of the Distribution immediately after the Distribution, and will acquire additional shares of AgeX common stock through the Distribution to the extent that they owned BioTime common shares on the Record Date.

 

Q: What will I receive in the Distribution?

 

A: In the Distribution, BioTime shareholders will receive one share of AgeX common stock for every 10 BioTime common shares they own ed as of the Record Date for the Distribution. No fractional shares will be issued. Those BioTime shareholders who would otherwise be entitled to receive fractional shares will receive cash in lieu of fractional shares. For example, a BioTime shareholder who h e ld 100 BioTime common shares as of the Record Date will, after the Distribution, (i) continue to hold 100 BioTime common shares and (ii) receive 10 shares of AgeX common stock and cash in lieu of fractional shares. Immediately after the Distribution, BioTime shareholders will still own their BioTime common shares, their proportionate interest in BioTime will not change, and they will still own an interest in BioTime’s current businesses, but they will own that interest as two separate stock investments rather than as a single investment.

 

Q: What is AgeX?

 

A: We are engaged in the business of research and development of novel therapeutics targeting human aging.

 

 

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Q: Why is BioTime distributing AgeX stock to BioTime shareholders?

 

A: BioTime believes that creating a separate scientific and management team for AgeX and fostering public ownership of AgeX common stock will better enable AgeX to focus on maximizing opportunities for its business, to hire and retain scientists and managers in the future, and to access the capital markets to obtain the financing that AgeX will need in the long run to fund its research and product development programs, and to commercialize any products or technologies that it may develop. Both BioTime and AgeX believe that the Distribution will present the opportunity for enhanced performance of both BioTime and AgeX.

 

BioTime’s Board of Directors has determined that the Distribution is in the best interests of BioTime and its shareholders. The following potential benefits were considered by BioTime’s Board of Directors in making the determination to effect the Distribution:

 

    allowing each company to separately pursue the business strategies that best suit its long-term interests;
       
    creating separate companies that have different financial characteristics, which may appeal to different investor bases and allow for clarity on valuation of the respective businesses;
       
    creating opportunities to more efficiently finance ongoing operations, including product development and clinical trials of new therapeutics products, and commercializing products and technologies;
       
    creating opportunities to more efficiently finance acquisitions;
       
    allowing each company to establish an expense structure appropriate for its business and size; and
       
    creating effective management and employee incentives tied to each company’s performance.

 

For a further explanation of the reasons for the Distribution and more information about our business, see “The Distribution—Reasons for the Distribution” and “Business.”

 

Q: What is the record date for the Distribution?

 

A: The Record Date was July 31, 2018, and BioTime share ownership for the purposes of the Distribution was determined as of 5:00 p.m., New York City time, on that date.

 

Q: When will the Distribution occur?

 

A: Shares of AgeX common stock will be distributed on or about             , 2018.

 

 

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Q: Can BioTime decide to cancel or delay the Distribution?

 

A: Yes. The Distribution is conditioned upon satisfaction or waiver of certain conditions under the Asset Contribution Agreement. See “The Distribution—Distribution Conditions and Termination.” BioTime also has the right to postpone or terminate the Distribution even if all of these conditions are met, if at any time BioTime’s Board of Directors determines, in its sole discretion that completing the Distribution would not be in the best interest of BioTime and its shareholders.

 

Q: What will happen to the listing of BioTime common shares?

 

A: Nothing. BioTime common shares will continue to be traded on the NYSE American and TASE under the symbol “BTX.”

 

Q: Will the Distribution affect the market price of my BioTime common shares?

 

A: The immediate impact of the Distribution on the market price of BioTime common shares cannot be determined. On the one hand, the establishment of AgeX as an independent company, and with the deconsolidation of AgeX’s results of operations from those of BioTime beginning on August 30, 2018 , will reduce BioTime’s operating expenses related to the operation of AgeX after the Distribution. On the other hand, the price of BioTime common shares could decline in view of the fact that BioTime may no longer own any AgeX shares. Accordingly, the combined trading prices of BioTime common shares and AgeX common stock after Distribution Date may be less than or greater than the trading price of BioTime common shares prior to the Distribution. Until the market has fully analyzed the relative values of BioTime and AgeX after the Distribution, and the effect of the Distribution on BioTime’s balance sheet and operating results, and a trading market for AgeX common stock is established, the price of both BioTime common shares and AgeX common stock may fluctuate significantly.

 

Q: What does a BioTime shareholder need to do now?

 

A: BioTime shareholders do not need to take any action to participate in the Distribution. The approval of the BioTime shareholders is not required or sought to effect the Distribution and BioTime shareholders have no appraisal rights in connection with the Distribution. BioTime is not seeking a proxy from any shareholders and you are requested not to send BioTime or us a proxy. BioTime shareholders will not be required to pay anything for the shares of AgeX common stock distributed in the Distribution or to surrender any BioTime common shares. BioTime shareholders should not send their BioTime share certificates to BioTime, AgeX or the distribution agent and transfer agent. BioTime shareholders eligible to receive AgeX common stock in the Distribution will automatically receive their shares of AgeX common stock when the Distribution is effected and will receive cash for any fractional shares. After the Distribution, the certificates and book-entry interests representing your BioTime common shares will continue to represent interests in the BioTime businesses following the Distribution, excluding only the portion of AgeX distributed to BioTime shareholders. The book-entry interests representing AgeX common stock that BioTime shareholders receive in the Distribution will represent equity interests in AgeX.

 

 

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Q: Are there risks to the Distribution and owning AgeX common stock?

 

A: Yes. Our business is subject to both general industry risk and specific risks relating to our business, operations and regulatory environment. In addition, there will be market risks associated with the ownership of AgeX common stock and risks associated with the Distribution. See “Risk Factors.”

 

Q: What are the material U.S. federal income tax consequences of the Distribution to BioTime shareholders?

 

A: The Distribution will be made in the form of a taxable distribution to BioTime shareholders. An amount equal to the fair market value of the AgeX stock received by a BioTime shareholder will be treated as a taxable dividend to the extent of such shareholder’s ratable share of BioTime’s current and accumulated earnings and profits allocable to the Distribution, with the excess treated as a tax-free return of capital to the extent of such shareholder’s tax basis in their shares, and any remaining excess treated as capital gain.

 

Additional matters concerning the U.S. federal income tax consequences of the Distribution are summarized in the section of this information statement entitled “Certain Federal Income Tax Considerations.” You should consult your own tax advisor as to the particular consequences of the Distribution to you.

 

 

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Q: How will I determine my tax basis in the shares of AgeX common stock I receive in the Distribution?

 

A: Your tax basis in shares of AgeX common stock received in the Distribution generally will equal the fair market value of such shares on the Distribution Date. Your holding period for such shares will begin the day after the distribution date.  

 

You should consult your tax advisor about the particular consequences of the Distribution to you . For a more detailed discussion, see “Material U.S. Federal Income Tax Consequences of the Distribution.”

 

Q: What if I want to sell my BioTime common shares or my AgeX common stock?

 

A: You should consult with your own financial advisors, such as your stockbroker, bank or tax advisor. BioTime and AgeX do not make any recommendations on the purchase, retention, or sale of BioTime common shares or AgeX common stock. If you do decide to sell any shares, you should make sure your stockbroker, bank or other nominee understands whether you want to sell your BioTime stock or your AgeX stock after it is distributed, or both.

 

Q: Where will I be able to trade shares of my AgeX common stock?

 

A: Currently there is no public market for AgeX common stock. We intend to apply to list AgeX common stock on the NYSE American under the symbol “AGE.” If our listing application is not approved, we plan to arrange to have AgeX common stock traded on the OTC Bulletin Board. Trading in shares of AgeX common stock may begin on a “when-issued” basis on or shortly before the Distribution Date, and “regular way” trading will begin on the first trading day following the Distribution Date. If trading does begin on a “when-issued” basis, you may purchase or sell AgeX common stock after that time, but your transaction will not settle until after the Distribution Date. On the first trading day following the Distribution Date, “when-issued” trading in respect of AgeX common stock will end and “regular way” trading will begin. We cannot predict the trading prices for AgeX common stock before, on, or after the Distribution Date.

 

 

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Q: If I sell, on or before the distribution date, BioTime common shares that I held on the Record Date, am I still entitled to receive shares of AgeX common stock distributable with respect to the common shares of BioTime that I sold?

 

A: If you h e ld common shares of BioTime as of the Record Date and sold those shares after the Record Date and on or before the Distribution Date, you also will have sold the right to receive the shares of AgeX common stock in connection with the Distribution.

 

Q: Where can BioTime shareholders get more information?

 

A: Before the Distribution, if you have any questions relating to the Distribution, you should contact:

 

BioTime, Inc.

1010 Atlantic Avenue, Suite 102

Alameda, CA 94501

Attention: Russell Skibsted

Telephone: (510) 521-3390

 

After the Distribution, if you have any questions relating to AgeX common stock, you should contact:

 

AgeX Therapeutics, Inc.

1010 Atlantic Avenue, Suite 102

Alameda, CA 94501

Attention: Russell Skibsted

Telephone: (510) 871-4190

 

Q: Who will be the distribution agent, transfer agent and registrar for AgeX common stock?

 

A: The distribution agent, transfer agent and registrar for AgeX common stock will be American Stock Transfer & Trust Company, LLC.

 

 

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RISK FACTORS

 

Our business is subject to various risks, including those described below. You should consider the following risk factors, together with all of the other information included in this information statement. If any of the following risks, as well as additional risks and uncertainties not currently known to us or that we currently deem immaterial, occur, our business, liquidity, financial condition and results of operations could be materially and adversely affected. If this were to happen, the market price of our common stock could decline significantly, and you could lose all or a part of the value of your ownership in our common stock. 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 discovery-stage development company and have incurred operating losses since our inception. We anticipate that we will incur continued losses for the foreseeable future, and we do not know if we will ever attain profitability.

 

We are a discovery-stage therapeutics company with a limited operating history. Since our inception in August 2017, we have incurred operating losses and negative cash flows and we expect to continue to incur losses and negative cash flow in the future. Our operating losses were $ (5.7) million, $ (6.7) million and $(12.7) million for the six months ended June 30, 2018, and years ended December 31, 2017 and 2016, respectively, and we had an accumulated deficit of approximately $( 68.7 ) million as of June 30 , 2018. We have devoted most of our financial resources to research and development, including our preclinical development activities.

 

Since inception, we have financed our operations through contributions and advances from our former parent company, BioTime, and the sale of our common stock and warrants to our current shareholders. Although BioTime may continue to provide administrative support to us on a reimbursable basis, we do not expect BioTime to provide future financing. There is no assurance that we will be able to obtain any additional financing that we may need after the completion of the Distribution, or that any such financing that may become available will be on terms that are favorable to us and our shareholders. Ultimately, our ability to generate sufficient operating revenue to earn a profit depends upon our success in developing and marketing or licensing our products and technology.

 

We expect to continue to incur significant additional operating losses for the foreseeable future as we seek to advance product candidates through preclinical and clinical development, expand our research and development activities, develop new product candidates, complete clinical trials, seek regulatory approval and, if we receive FDA approval, commercialize our products. Furthermore, the costs of advancing product candidates into each succeeding clinical phase tend to increase substantially over time. The total costs to advance any of our product candidates to marketing approval in even a single jurisdiction would be substantial. Because of the numerous risks and uncertainties associated with development of cell-based and drug-based therapeutics, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to begin generating revenue from the commercialization of products (other than through our LifeMap Sciences subsidiary) or achieve or maintain profitability. Our expenses will also increase substantially if and as we:

 

  continue our current research programs and our preclinical development of product candidates from our current research programs;

 

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  seek to identify, assess, acquire and/or develop additional research programs and additional product candidates;
     
  initiate preclinical testing and clinical trials for any product candidates we identify and develop;
     
  establish a sales, marketing and distribution infrastructure to commercialize any product candidates for which we may obtain marketing approval;
     
  maintain, expand and protect our intellectual property portfolio;
     
  further develop our product development platform based on telomerase-mediated cellular immortality and regenerative biology;