Document:

ex10_79.htm

EXHIBIT 10.79

 

FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

THIS FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Amendment”), dated as of June 23, 2011, by and among CYTORI THERAPEUTICS, INC., a Delaware corporation (“Borrower”), OXFORD FINANCE LLC (as successor in interest to Oxford Finance Corporation) (“Oxford”), as a Lender (as defined below), the other Lenders party hereto and GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation, in its capacities as agent (the “Agent”) and a Lender.

W I T N E S S E T H:

WHEREAS, Borrower, the lenders signatory thereto from time to time (each a “Lender” and, collectively, the “Lenders”) and Agent are parties to that certain Amended and Restated Loan and Security Agreement, dated as of June 11, 2010 (as amended, supplemented, replaced and otherwise modified from time to time, the “Loan Agreement”; capitalized terms used herein have the meanings given to them in the Loan Agreement except as otherwise expressly defined herein), pursuant to which Lenders and Agent have agreed to provide to Borrower certain loans in accordance with the terms and conditions thereof;

WHEREAS, Borrower, Lenders and Agent desire to amend certain provisions of the Loan Agreement as provided herein and subject to the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the premises, the covenants and agreements contained herein, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Borrower, Lenders and Agent hereby agree as follows:

1.             AMENDMENTS TO LOAN AGREEMENT. Subject to the terms and conditions of this Amendment, including, without limitation, Section 3 of this Amendment, the Loan Agreement is hereby amended as of the First Amendment Effective Date (as defined below) as follows:

 

(a)           Section 10.1, Assignment, of the Loan Agreement is hereby amended by deleting such section in its entirety and by inserting, in lieu thereof, the following:

 

“10.1           Assignment.

 

(a)           Subject to the terms of this Section 10.1, each Lender shall have the right to sell, transfer or assign, at any time or times, all or a portion of its rights and obligations hereunder and under the other Debt Documents, its Commitment, its Term Loan or any portion thereof or interest therein, including any Lender’s rights, title, interests, remedies, powers or duties thereunder, provided, however, that any such sale, transfer or assignment shall: (i) except in the case of a sale, transfer or assignment to a Qualified Assignee (as defined below), require the prior written consent of Agent and the Required Lenders (which consent shall not be unreasonably withheld, conditioned or delayed); (ii) require the execution of an assignment agreement in form and substance reasonably satisfactory to, and acknowledged by, Agent (an “Assignment Agreement”); (iii) be conditioned on such assignee Lender representing to the assigning Lender and Agent that it is purchasing the applicable Commitment and/or Term Loan to be assigned to it for its own account, for investment purposes and not with a view to the distribution thereof; (iv) be in an aggregate amount of not less than $1,000,000, unless such assignment is made to an existing Lender or an affiliate of an existing Lender or is of the assignor’s (together with its affiliates’) entire interest of the Term Loan or is made with the prior written consent of Agent; and (v) include a payment to Agent of an assignment fee of $3,500 (unless otherwise agreed by Agent).  In the case of an assignment by a Lender under this Section 10.1(a), the assignee shall have, to the extent of such assignment, the same rights, benefits and obligations as all other Lenders hereunder.  The assigning Lender shall be relieved of its obligations hereunder with respect to its Commitment and Term Loan, as applicable, or assigned portion thereof from and after the date of such assignment.  Borrower hereby acknowledges and agrees that any assignment shall give rise to a direct obligation of Borrower to the assignee and that the assignee shall be considered to be a “Lender”.  In the event any Lender assigns or otherwise transfers all or any part of the Commitments and Obligations, upon the assignee’s or the assignor’s request, Agent shall request that Borrower execute new Notes in exchange for the Notes, if any, being assigned.  Agent may amend Schedule A to this Agreement to reflect assignments made in accordance with this Section.

 

  

  

  

 

As used herein, “Qualified Assignee” means (a) any Lender and any affiliate of any Lender and (b) any commercial bank, savings and loan association or savings bank or any other entity which is an “accredited investor” (as defined in Regulation D under the Securities Act) which extends credit or buys loans as one of its businesses, including insurance companies, mutual funds, lease financing companies and commercial finance companies, in each case, which has a rating of BBB or higher from S&P and a rating of Baa2 or higher from Moody's at the date that it becomes a Lender, and in each case of clauses (a) and (b), which, through its applicable lending office, is capable of lending to Borrower without the imposition of any withholding or similar taxes; provided that (i) no person proposed to become a Lender after the Closing Date and  determined by Agent to be acting in the capacity of a vulture fund or distressed debt purchaser shall be a Qualified Assignee, (ii) no person or Affiliate of such person proposed to become a Lender after the Closing Date and that holds any subordinated debt or stock issued by any Loan Party or its Affiliates shall be a Qualified Assignee and (iii) no person proposed to become a Lender after the Closing Date and that is a direct business competitor of a Loan Party shall be a Qualified Assignee so long as no Default or Event of Default exists at the time of the proposed assignment.

 

(b)           In addition to the other rights provided in this Section 10.1, each Lender may, without notice to or consent from Agent or any Loan Party, sell participations to one or more persons or entities in or to all or a portion of its rights under the Debt Documents (including all of its rights with respect to the Term Loans); provided, however, that, whether as a result of any term of any Debt Document or of such participation, (i) no such participant shall have a commitment, or be deemed to have made an offer to commit, to make any Term Loan hereunder, and, no such participant shall be liable for any obligation of such Lender hereunder and which Lender shall remain expressly liable for all obligations of such Lender hereunder (in being expressly acknowledged and agreed that such Lender shall remain primarily liable for the obligations of such Lender hereunder regardless of any such participation), (ii) such Lender’s rights and obligations, and the rights and obligations of the Loan Parties and the Agent and other Lenders towards such Lender, under any Debt Document shall remain unchanged and each other party hereto shall continue to deal solely with such Lender, which shall remain the holder of the Obligations and which Lender shall remain expressly liable for all obligations of such Lender hereunder (in being expressly acknowledged and agreed that such Lender shall remain primarily liable for the obligations of such Lender hereunder regardless of any such participation), and in no case shall a participant have the right to enforce any of the terms of any Debt Document, and (iii) the consent of such participant shall not be required (either directly, as a restraint on such Lender’s ability to consent hereunder or otherwise) for any amendments, waivers or consents with respect to any Debt Document or to exercise or refrain from exercising any powers or rights such Lender may have under or in respect of the Debt Documents (including the right to enforce or direct enforcement of the Obligations), except for those described in clauses (ii), (iii) and (viii) of subsection 10.8(c) hereof.

 

  

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(c)           In addition to the other rights provided in this Section 10.1, each Lender may, with prior written notice to the Agent, sell, transfer or assign to a Securitization Entity (and such Securitization Entity may, with prior written notice to the Agent, sell, transfer or assign to another Securitization Entity), at any time or times, all or a portion of its rights hereunder and under the other Debt Documents, its Term Loans or any portion thereof or interest therein; provided, however, that, (i) no such Securitization Entity shall have a commitment, or be deemed to have made an offer to commit, to make any Term Loan hereunder, and none shall be liable for any obligation of such Lender hereunder, (ii) such Lender’s obligations (including, without limitation, indemnity and funding obligations) under the Debt Documents shall remain unchanged, and (iii) the other parties hereto shall continue to deal solely with such Lender as servicer of the Securitization Entity until such time as such other parties receive a written notice from the Securitization Entity indicating that another person or entity will act as servicer for the Securitization Entity (at which time such other parties hereto shall be entitled to deal solely with such subsequent servicer) and such other parties hereto shall be fully entitled to rely on such written notice and shall have no liability for relying on such notice or for taking any action or omitting to take any action in reliance upon such notice.

 

As used herein, “Securitization Entity” means a special purpose funding vehicle that is a direct or indirect subsidiary of a Lender that is created solely for the purpose of such Lender obtaining funding secured by assets including all or any part of such Lender’s interests in this Agreement or any other Debt Document, or selling ownership interests therein, and that engages in no material activities other than in connection with the financing or securitization of loans or financial assets.

 

  

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(d)           In addition to the other rights provided in this Section 10.1, each Lender and each Securitization Entity may grant a security interest in, or otherwise assign as collateral, all or a portion of its rights hereunder and under the other Debt Documents, its Term Loans or any portion thereof or interest therein, whether now owned or hereafter acquired (including rights to payments of principal or interest on the Term Loans), to (i) any federal reserve bank (pursuant to Regulation A of the Federal Reserve Board), without notice to the Agent or (ii) any holder of, or agent or trustee for the benefit of the holders of, such Lender’s or Securitization Entity’s debt obligations or equity securities by written notice to the Agent; provided, however, that (x) no such holder, agent or trustee, whether because of such grant or assignment or any foreclosure thereon (unless such foreclosure is made through an assignment in accordance with clause (a) above), shall be entitled to any rights of such Lender or Securitization Entity hereunder and no such Lender or Securitization Entity shall be relieved of any of its obligations hereunder, and (y) such grant or assignment shall not affect, and the Lender shall remain expressly liable for, all obligations of such Lender hereunder (it being expressly acknowledged and agreed that such Lender shall remain primarily liable for the obligations of such Lender hereunder regardless of any such grant or assignment).”

 

(b)           Section 10.8, Entire Agreement; Amendments, Waivers, of the Loan Agreement is hereby amended by deleting subsections (b) and (c) in their entirety and by inserting, in lieu thereof, the following subsections (b) and (c), respectively:

 

“(b)           No amendment, modification, termination or waiver of any provision of this Agreement or any other Debt Document, or any consent to any departure by Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed by Agent, Borrower and Lenders having more than (x) 60% of the aggregate Commitments of all Lenders or (y) if such Commitments have expired or been terminated, 60% of the aggregate outstanding principal amount of the Term Loan (the “Requisite Lenders”); provided, however, that so long as a party that is a Lender hereunder on the Closing Date does not assign any portion of its Commitment or Term Loan (other than an assignment to any affiliate of such Lender), the “Requisite Lenders” shall include such Lender.  Except as set forth in clause (c) below, all such amendments, modifications, terminations or waivers requiring the consent of any Lenders shall require the written consent of Requisite Lenders.”

 

“(c)           No amendment, modification, termination or waiver of any provision of this Agreement or any other Debt Document shall, unless in writing and signed by Borrower, Agent and each Lender directly affected thereby: (i) increase or decrease any Commitment of any Lender or increase or decrease the Total Commitment (which shall be deemed to affect all Lenders), (ii) reduce the principal of or rate of interest on any Obligation or the amount of any fees payable hereunder (other than waiving the imposition of the Default Rate), (iii) postpone the date fixed for or waive any payment of principal of or interest on the Term Loan, or any fees hereunder, (iv) release all or substantially all of the Collateral, or consent to a transfer of all or substantially all of the Intellectual Property, in each case, except as otherwise expressly permitted in the Debt Documents (which shall be deemed to affect all Lenders), (v) subordinate the Lien on all or substantially all of the Collateral granted in favor of the Agent securing the Obligations (which shall be deemed to affect all Lenders), (vi) release a Loan Party from, or consent to a Loan Party’s assignment or delegation of, such Loan Party’s obligations hereunder and under the other Debt Documents or any Guarantor from its guaranty of the Obligations (which shall be deemed to affect all Lenders), (vii) amend, modify, terminate or waive Section 8.4, 9.7 or 10.8(b) or (c) or (viii) amend or modify the definition of “Requisite Lenders”.”

 

  

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(c)           Section 10.8, Entire Agreement; Amendments, Waivers, of the Loan Agreement is hereby further amended by deleting subsection (e) in its entirety and by inserting, in lieu thereof, the following subsection (e):

 

“(e)           Each Lender hereby consents to the release by Agent of any Lien held by the Agent for the benefit of itself and the Lenders in any or all of the Collateral to secure the Obligations upon (i) the occurrence of any Permitted Disposition pursuant to Section 7.3 and (ii) the termination of the Commitments and the payment and satisfaction in full of the Obligations.”

 

2.            COSTS AND EXPENSES.  Notwithstanding Section 10.5 of the Loan Agreement, Oxford Finance, LLC absolutely and unconditionally agrees to reimburse Agent and Borrower for all reasonable fees, costs and expenses incurred by Agent and Borrower in connection with this Amendment or otherwise related to the Debt Documents or the transactions contemplated hereby and thereby, including, without limitation, reasonable legal fees and costs (and without duplication, the allocated cost of in-house legal counsel), professional and consultant fees, recording fees, search fees and filing fees.

 

3.            CONDITIONS TO EFFECTIVENESS.  This Amendment shall become effective as of the date (the  “First Amendment Effective Date”) upon which Agent shall notify Borrower in writing that each of the conditions specified below have been satisfied as determined in Agent’s sole discretion:

 

(a)           Agent shall have received one or more counterparts of this Amendment, duly executed, completed and delivered by Agent, each Lender and each Loan Party;

 

(b)           After giving effect to this Amendment, no Default or Event of Default shall have occurred and be continuing;

 

(c)           Agent and Borrower shall have received payment of all unpaid fees and expenses described in Section 2 hereof; and

 

  

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(d)           Agent shall have received all other documents and instruments as Agent or any Lender may reasonably deem necessary or appropriate to effectuate the intent and purpose of this Amendment.

 

4.            NO OTHER AMENDMENTS.

 

(a)           Except for the amendments set forth in Section 1 of this Amendment, the Loan Agreement and the other Debt Documents shall remain unchanged and in full force and effect.  Nothing in this Amendment is intended, or shall be construed, to constitute a novation or an accord and satisfaction of any Loan Party’s Obligations under or in connection with the Loan Agreement and any other Debt Document or to modify, affect or impair the perfection or continuity of Agent’s security interest in, (on behalf of itself and Lenders) security titles to or other liens on any Collateral for the Obligations.

 

5.            REPRESENTATIONS AND WARRANTIES.  Each Loan Party hereby represents and warrants to Lenders as follows:

 

(a)           Representations and Warranties.  Each Loan Party hereby represents and warrants that, after giving effect to this Amendment, each of such Loan Party’s representations and warranties contained in the Debt Documents is true and correct in all material respects on and as of the date hereof, except for any representation and warranty that relates by its terms only to a specified date (in which case, it shall be true in all material respects on and as of such date).

 

(b)           Binding Effect of Documents.  This Amendment and the other Debt Documents have been duly executed and delivered to Agent and Lenders by such Loan Party and are in full force and effect, as modified hereby.

 

(c)           No Conflict, Etc.  Except as described in the note to Item 8 in Section D on Schedule B to the Loan Agreement, the execution, delivery and performance of this Amendment by such Loan Party will not violate any law, rule, regulation or order or contractual obligation or organizational document of such Loan Party and will not result in, or require, the creation or imposition of any lien, claim or encumbrance of any kind on any of its properties or revenues.

 

6.            ADVICE OF COUNSEL.  Each of the parties represents to each other party hereto that it has discussed this Amendment with its counsel.

 

7.            SEVERABILITY OF PROVISIONS.  In case any provision of or obligation under this Amendment shall be invalid, illegal or unenforceable in any applicable jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

 

8.            COUNTERPARTS.  This Amendment may be executed in multiple counterparts, each of which shall be deemed to be an original and all of which when taken together shall constitute one and the same instrument.  Delivery of an executed signature page of this Amendment by facsimile transmission or electronic transmission shall be as effective as delivery of a manually executed counterpart hereof.

 

  

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9.            GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING CONFLICTS OF LAWS.

 

10.          ENTIRE AGREEMENT.  The Loan Agreement and the other Debt Documents as and when amended through this Amendment embodies the entire agreement between the parties hereto relating to the subject matter thereof and supersedes all prior agreements, representations and understandings, if any, relating to the subject matter thereof.

 

11.          NO STRICT CONSTRUCTION, ETC.  The parties hereto have participated jointly in the negotiation and drafting of this Amendment.  In the event an ambiguity or question of intent or interpretation arises, this Amendment shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Amendment.  Time is of the essence for this Amendment.

 

[Signature Page to Follow]

 

  

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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to Amended and Restated Loan and Security Agreement to be duly executed and delivered as of the day and year specified at the beginning hereof.

 

 

	 	
BORROWER:

	 
	 	 	 	 
	 	CYTORI THERAPEUTICS, INC.	 
	 	 	 	 
	 	 	 	 
	
 

	
By:  

	/s/ Marc H. Hedrick	 
	 	Name: 	  Marc H. Hedrick	 
	 	Title: 	  President	 
	 	 	 	 
	 	 	 	 
	 	AGENT AND LENDERS:	 
	 	 	 
	 	GENERAL ELECTRIC CAPITAL CORPORATION, as Agent and Lender
	 	 	 
	 	 	 
	 	By:  	/s/ R. Hanes Whiteley	 
	 	Name: 	  R. Hanes Whiteley	 
	 	Title: 	  Duly Authorized Signatory	 
	 	 	 
	 	 	 
	 	OXFORD FINANCE LLC (as successor in interest to Oxford Finance Corporation), as Lender
	 	 	 
	 	 	 
	 	By: 	/s/ John G. Henderson	 
	 	Name: 	 John G. Henderson	 
	 	Title: 	 Vice President & General Counsel	 
	 	 	 
	 	 	 
	 	SILICON VALLEY BANK, as Lender	 
	 	 	 
	 	 	 
	 	By:	/s/ R. Michael White	 
	 	Name:  	 R. Michael White 	 
	 	

Title: 

	 SRMex10_1.htm

Exhibit 10.1

 

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“Agreement”) is made June 28, 2011, by and between BioTime, Inc. (“BioTime”), a California corporation, OrthoCyte Corporation, a California corporation ("OrthoCyte"), and William P. Tew ("Executive").

W I T N E S S E T H:

WHEREAS, OrthoCyte and Executive have entered into an Employment Agreement, dated March 21, 2011 (the “Original Employment Agreement”), with respect to the employment of Executive by OrthoCyte;

WHEREAS, the Original Employment Agreement provides that Executive shall perform duties for Related Companies as well as for OrthoCyte and BioTime was a Related Company under the Original Employment Agreement;

WHEREAS, BioTime has previously appointed Executive as Vice President of Business Development and has subsequently appointed him as Chief Commercial Officer;

WHEREAS, BioTime, OrthoCyte and Executive desire to replace the Original Employment Agreement with this Agreement;

NOW, THEREFORE, in consideration of the terms and conditions hereinafter set forth, the parties hereto agree as follows:

1.             Engagement; Position and Duties.

(a)           BioTime agrees to employ Executive in the position of Vice President-Business Development and Chief Commercial Officer effective July 1, 2011.  Executive shall perform the duties and functions as are normally carried out by a Vice President-Business Development and Chief Commercial Officer of a developer of pharmaceutical or medical products of a size comparable to BioTime, and as the Board of Directors of BioTime (the "Board of Directors") shall from time to time reasonably determine.  Without limiting the generality of the immediately preceding sentence, Executive's duties shall include, but shall not be limited to: (i) directing the marketing and production staff of BioTime and Related Companies to achieve production and sales plans, including hiring and training of personnel as necessary; (ii) setting up policies, procedures, and controls to comply with good laboratory practices; (iii) management of planning and design of the development of new products, (iv) interfacing with collaborators in research and product development programs, (v) management of writing and securing research grants; (vi) management of budgets and expenditures; and (vii) such other duties as the Board of Directors may from time to time determine.  Executive shall devote his best efforts, skills, and abilities, on a full-time basis, exclusively to the business of BioTime and its Related Companies pursuant to, and in accordance with, reasonable business policies and procedures, as fixed from time to time by the Board of Directors.  Executive covenants and agrees that he will faithfully adhere to and fulfill such policies as are established from time to time by the Board of Directors.

(b)           Performance of Services for Related Companies.  In addition to the performance of services for BioTime, Executive shall, to the extent so required by BioTime, also perform services for one or more members of a consolidated group of which BioTime is a part ("Related Company"), provided that such services are consistent with the kind of services Executive performs or may be required to perform for BioTime under this Agreement.  Without restricting the generality of the preceding sentence, Executive shall retain the position of Vice President-Business Development of OrthoCyte, which is a Related Company under this Agreement.  If Executive performs any services for any Related Company (including but not limited to OrthoCyte), Executive 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.  Executive covenants and agrees that he will faithfully adhere to and fulfill such policies as are established from time to time by the board of directors of any Related Company for which he performs services, to the extent that such policies and procedures differ from or are in addition to the policies and procedures adopted by the Board of Directors.

  

  

  

(c)           No Conflicting Obligations.  Executive represents and warrants to BioTime that he is under no obligations or commitments, whether contractual or otherwise, that are inconsistent with his obligations under the Agreement and this Supplement or that would prohibit him, contractually or otherwise, from performing his duties as the Vice President-Business Development and Chief Commercial Officer of BioTime as provided herein.

(d)           No Unauthorized Use of Third Party Intellectual Property.  Executive represents and warrants that he will not use or disclose, in connection with his employment by BioTime or any Related Company, any patents, trade secrets, confidential information, or other proprietary information or intellectual property as to which any other person has any right, title or interest, except to the extent that BioTime or a Related Company holds a valid license or other written permission for such use from the owner(s) thereof.  Executive represents and warrants to BioTime that he has returned all property and confidential information belonging to any prior employer.

2.             Compensation

(a)           Salary.  Commencing July 1, 2011 and during the term of this Agreement, BioTime shall pay to the Executive an annual salary of two hundred ten thousand dollars ($210,000) the ("Annual Salary").  The Annual Salary shall be in lieu of the Annual Salary from OrthoCyte under the Original Employment Agreement and Executive agrees to look solely to BioTime for such compensation commencing on and after July 1, 2011.  Executive's salary shall be paid in equal semi-monthly installments, consistent with BioTime's regular salary payment practices.  Executive's salary may be increased from time-to-time by BioTime without affecting this Agreement.

(b)           Bonus.  Executive shall be eligible for an annual bonus, as may be approved by the Board of Directors in its discretion, based on Executive's performance and achievement of goals or milestones set by the Board of Directors.  Executive agrees that the Board of Directors of BioTime may follow the recommendations of the Compensation Committee of the board of directors of BioTime’s parent company in determining whether to a award bonus or to establish performance goals or milestones

(c)           Expense Reimbursements. BioTime or a Related Company shall reimburse Executive for reasonable commute, travel, and other business expenses incurred by Executive in the performance of his duties hereunder, subject to BioTime's (or a Related Company's) policies and procedures in effect from time to time, and provided that Executive submits supporting vouchers.  BioTime shall also provide the Executive with a monthly housing allowance of two thousand dollars ($2,000) through March 20, 2012.  BioTime will review Executive’s housing allowance after March 20, 2012 but will not be obligated to extend the allowance.

  

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(d)           Benefit Plans.  Executive shall be eligible (to the extent he qualifies) to participate in any retirement, pension, life, health, accident and disability insurance, stock option plan or other similar employee benefit plans which may be adopted by BioTime (or Related Company) for its executive officers or other employees.  BioTime shall pay for all premiums for any such insurance policies covering Executive and Executive's spouse and children, if any, to the extent such insurance coverage is available under Company employee benefit plans.

(e)           Vacation; Sick Leave.  Executive shall be entitled to three weeks of vacation without reduction in compensation, during each calendar year.  Such vacation shall be taken at such time as is consistent with the needs and policies of BioTime and its Related Companies.  All vacation days and sick leave days shall accrue annually based upon days of service.  Executive shall also be entitled to leave from work, without reduction in compensation for ten days during each calendar year, due to illness subject to the policies and procedures of BioTime, and subject to the provisions of this Agreement governing termination due to disability, sickness or illness.  BioTime may, from time to time, adopt policies governing the disposition of unused vacation days and sick leave days remaining at the end of BioTime's fiscal year; which policies may govern whether unused vacation days or sick leave days will be paid, lost, or carried over into subsequent fiscal years.

3.             Competitive Activities. During the term of Executive's employment with BioTime and for one year thereafter, Executive shall not, for himself or any third party, directly or indirectly employ, solicit for employment or recommend for employment any person employed by BioTime or any Related Company.  During the term of Executive's employment, he shall not, directly or indirectly as an employee, contractor, officer, director, member, partner, agent, or equity owner, engage in any activity or business that competes or could reasonably be expected to compete with the business of BioTime or any Related Company.  Executive acknowledges that there is a substantial likelihood that the activities described in this Section would (a) involve the unauthorized use or disclosure of BioTime's or a Related Company's Confidential Information and that use or disclosure would be extremely difficult to detect, and (b) result in substantial competitive harm to the business of BioTime or a Related Company.  Executive has accepted the limitations of this Section as a reasonably practicable and unrestrictive means of preventing such use or disclosure of Confidential Information and preventing such competitive harm.

4.             Inventions/Intellectual Property/Proprietary Information

(a)           Inventions and Discoveries Belong to BioTime.  Any and all inventions, discoveries, improvements or intellectual property which Executive may conceive or make during the period of employment relating to or in any way pertaining to or connected with the systems, products, apparatus, or methods employed, manufactured, constructed or researched by BioTime (or any Related Company) shall be the sole and exclusive property of BioTime (or a Related Company).  The obligations provided for by this Agreement, except for the requirements as to disclosure in Section, do not apply to any rights Executive may have acquired in connection with an invention, discovery, improvement, or intellectual property for which no equipment, supplies, facility, or trade secret information of BioTime or a Related Company was used and which was developed entirely on the Executive's own time and (a) which at the time of conception or reduction to practice does not relate directly or indirectly to the business of BioTime or a Related Company, or to the actual or demonstrable anticipated research or development activities or plans of BioTime or any Related Company, or (b) which does not result from any work performed by Executive for BioTime or any Related Company. The parties understand and agree that this limitation is intended to be consistent with California Labor Code, Section 2870, a copy of which is attached as Exhibit A.  If Executive wishes to clarify that something created by him prior to his employment by BioTime that relates to the actual or proposed business of BioTime or any Related Company is not within the scope of this Agreement, he has listed it on Exhibit B in a manner that does not violate any third party rights.  To the extent allowed by law, the rights assigned by Executive to BioTime and the Related Companies includes all rights of paternity, integrity, disclosure and withdrawal and any other rights that may be known as or referred to as "moral rights," "artist's rights," "droit moral," or the like (collectively "Moral Rights").  To the extent Executive retains any such Moral Rights under applicable law, he hereby ratifies and consents to any action that may be taken with respect to such Moral Rights by or authorized by BioTime or a Related Company and agrees not to assert any Moral Rights with respect thereto. Executive shall confirm in writing any such ratifications, consents and agreements from time to time as requested by BioTime or a Related Company.

  

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(b)           Disclosure of Inventions and Discoveries.  Executive agrees to disclose promptly to BioTime or a Related Company all improvements, discoveries, or inventions which Executive may make solely, jointly, or commonly with others, and to assign as appropriate such improvements, discoveries, inventions or intellectual property to BioTime or a Related Company, where the rights are the property of BioTime or a Related Company.  Executive agrees to execute and sign any and all applications, assignments, or other instruments which BioTime or a Related Company may deem necessary in order to enable BioTime 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 BioTime or a Related Company the sole and exclusive right, title, and interest in and to said improvements, discoveries, inventions, or patents.  Executive hereby irrevocably designates and appoints BioTime or a Related Company designated by BioTime as Executive's agent and attorney-in-fact, coupled with an interest and with full power of substitution, to act for and in Executive'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 Executive.  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.  Executive agrees to make such disclosures understanding that they will be received in confidence and that, among other things, they are for the purpose of determining whether or not rights to the related invention, discovery, improvement, or intellectual property is the property of BioTime or a Related Company.

(c)           Confidential and Proprietary Information.  During his employment, Executive will have access to trade secrets and confidential information of BioTime and any Related Company.  Confidential Information means all information and ideas, in any form, relating in any manner to matters such as: products; formulas; technology and know-how; inventions; 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; and financial information.  Confidential Information also shall include any information of any kind, whether belonging to BioTime, a Related Company, or any third party, that BioTime 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 Executive; (ii) information that was rightfully in Executive's possession prior to his employment with BioTime and was not assigned to BioTime or a Related Company or was not disclosed to Executive in his capacity as a director or other fiduciary of BioTime or a Related Company; or (iii) information disclosed to Executive, after the termination of his employment by BioTime, without a confidential restriction by a third party who rightfully possesses the information and did not obtain it, either directly or indirectly, from BioTime or a Related Company, and who is not subject to an obligation to keep such information confidential for the benefit of BioTime, a Related Company, or any third party with whom BioTime or a Related Company has a contractual relationship.  Executive understands and agrees that all Confidential Information shall be kept confidential by Executive both during and after his employment by BioTime.  Executive further agrees that he will not, without the prior written approval by BioTime, disclose any Confidential Information, or use any Confidential Information in any way, either during the term of his employment or at any time thereafter, except as required by BioTime or a Related Company in the course of his employment.

  

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5.             Termination of Employment.  Executive understands and agrees that his employment has no specific term.  This Agreement, and the employment relationship, are "at will" and may be terminated by either party with or without cause upon thirty (30) days advance written notice to the other.  Except as otherwise agreed in writing or as otherwise provided in this Agreement, upon termination of Executive's employment, BioTime shall have no further obligation to Executive by way of compensation or otherwise as expressly provided in this Agreement.

(a)           Separation Benefits.  Upon termination of Executive's employment with BioTime for any reason, Executive will receive the severance benefits set forth below, but Executive will not be entitled to any other compensation, award, or damages with respect to his employment or termination of employment.

(i)            Termination for Cause, Death, Disability, or Resignation.  In the event of Executive's termination for Cause, or termination as a result of his death or Disability, or his resignation, Executive will be entitled to receive payment for all unpaid salary, accrued but unpaid bonus, if any, and vacation accrued as of the date of his termination of employment.  Executive will not be entitled to any cash severance benefits or additional vesting of any Company stock options or other equity or cash awards.

(ii)           Termination Without Cause.  In the event of Executive's termination without Cause, he will be entitled to (A) the benefits set forth in paragraph (a)(i) of this Section, and (B) payment in an amount equal to: (1) three months' base salary plus the cost to terminate any housing lease if terminated within the first 12 months of employment, or (2) six months' base salary if terminated after 12 months of employment, either of which may be paid in a lump sum or, at the election of BioTime, in installments consistent with the payment of Executive's salary while employed by BioTime, subject to such payroll deductions and withholdings as are required by law.

(iii)          Change of Control.  In the event BioTime (or any successor in interest to BioTime that has assumed BioTime's obligation under this Agreement) terminates Executive's employment without Cause within twelve (12) months following a Change in Control, Executive will be entitled to (A) the benefits set forth in paragraph (a)(i) of this Section, and (B) the benefits set forth in paragraph (a)(ii) of this Section.

(b)           Release.  Any other provision of this Agreement notwithstanding, paragraphs (a)(ii) and (a)(iii) of this Section shall not apply unless the Executive (i) has executed a general release of all claims (in a form prescribed by BioTime) and (ii) has returned all property of BioTime and any Related Companies in the Executive's possession.

  

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(c)           Definitions.  For purposes of this Section, the following definitions shall apply:

(i)           "Affiliated Group" means (A) a Person and one or more other Persons in control of, controlled by, or under common control with such Person; and (B) two or more Persons who, by written agreement among them, act in concert to acquire Voting Securities entitling them to elect a majority of the directors of BioTime.

(ii)           "Cause" means: (A) the failure to properly perform Executive's job responsibilities, as determined reasonably and in good faith by the Board of Directors; (B) commission of any act of fraud, gross misconduct or dishonesty with respect to BioTime or any Related Company; (C) conviction of, or plea of guilty or "no contest" to, any felony, or a crime involving moral turpitude; (D) breach of any provision of this Agreement or any provision of any proprietary information and inventions agreement with BioTime or any Related Company; (E) failure to follow the lawful directions of the Board of Directors of BioTime or any Related Company; (F) chronic alcohol or drug abuse; (G) obtaining, in connection with any transaction in which BioTime, Related Companies or BioTime’s affiliates is a party, a material undisclosed financial benefit for himself or for any member of his immediate family or for any corporation, partnership, limited liability company, or trust in which he or any member of his immediate family owns a material financial interest; or (H) harassing or discriminating against, or participating or assisting in the harassment of or discrimination against, any employee of BioTime (or a Related Company or an affiliate of BioTime) based upon gender, race, religion, ethnicity, or nationality.

(iii)           "Change of Control" means (A) the acquisition of Voting Securities of BioTime by a Person or an Affiliated Group entitling the holder thereof to elect a majority of the directors of BioTime; provided, that an increase in the amount of Voting Securities held by a Person or Affiliated Group who on the date of this Agreement owned beneficially owned (as defined in Section 13(d) of the Securities Exchange Act of 1934, as amended, and the regulations thereunder) more than 10% of the Voting Securities shall not constitute a Change of Control; and provided, further, that an acquisition of Voting Securities by one or more Persons acting as an underwriter in connection with a sale or distribution of such Voting Securities shall not constitute a Change of Control under this clause (A); (B) the sale of all or substantially all of the assets of BioTime; or (C) a merger or consolidation of BioTime with or into another corporation or entity in which the stockholders of BioTime immediately before such merger or consolidation do not own, in the aggregate, Voting Securities of the surviving corporation or entity (or the ultimate parent of the surviving corporation or entity) entitling them, in the aggregate (and without regard to whether they constitute an Affiliated Group) to elect a majority of the directors or persons holding similar powers of the surviving corporation or entity (or the ultimate parent of the surviving corporation or entity); provided, however, that in no event shall any transaction described in clauses (A), (B) or (C) be a Change of Control if all of the Persons acquiring Voting Securities or assets of BioTime or merging or consolidating with BioTime are one or more Related Companies.

(iv)           "Disability" shall mean Executive's inability to perform the essential functions of his job responsibilities for a period of one hundred eighty (180) days in the aggregate in any twelve (12) month period.

  

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(v)           "Person" means any natural person or any corporation, partnership, limited liability company, trust, unincorporated business association, or other entity.

(vi)           "Voting Securities" means shares of capital stock or other equity securities entitling the holder thereof to regularly vote for the election of directors (or for person performing a similar function if the issuer is not a corporation), but does not include the power to vote upon the happening of some condition or event which has not yet occurred.

6.             Successor Employment Agreement.  Effective July 1, 2011, Section 2 and Section 5 of this Agreement shall supersede and replace in all respects Section 2 and Section 5 of the Original Employment Agreement, except that the Original Employment Agreement and the employment relationship between Executive and OrthoCyte shall remain "at will" and may be terminated by either party with or without cause upon thirty (30) days advance written notice to the other.  The effectiveness of this Agreement shall not constitute a termination of Executive’s employment by OrthoCyte without Cause as defined in the Original Employment Agreement, and Executive shall remain an employee and officer of OrthoCyte, except that his compensation shall be paid by BioTime rather than OrthoCyte and after July 1, 2011 Executive shall not be entitled to receive a salary, or any vacation or sick leave from OrthoCyte under the Original Employment Agreement or otherwise in addition to the Annual Salary, vacation and sick leave benefits from BioTime under this Agreement, nor shall Executive be entitled to receive any termination, severance, or separation benefits or other payments from OrthoCyte upon termination of his employment for any reason under the Original Employment Agreement.

7.             Turnover of Property and Documents on Termination.  Executive agrees that on or before termination of his employment, he will return to BioTime and all Related Companies all equipment and other property belonging to BioTime and Related Companies, and all originals and copies of Confidential Information (in any and all media and formats, and including any document or other item containing Confidential Information) in Executive's possession or control, and all of the following (in any and all media and formats, and whether or not constituting or containing Confidential Information) in Executive's possession or control:  (a) lists and sources of customers; (b) proposals or drafts of proposals for any research grant, research or development project or program, marketing plan, licensing arrangement, or other arrangement with any third party; (c) reports, job or laboratory notes, specifications, and drawings pertaining to the research, development, products, patents, and technology of BioTime and any Related Companies; and (d) any and all inventions or intellectual property developed by Executive during the course of employment.

8.             Arbitration.  Except for injunctive proceedings against unauthorized disclosure of confidential information, any and all claims or controversies between BioTime or any Related Company and Executive, including but not limited to (a) those involving the construction or application of any of the terms, provisions, or conditions of this Agreement; (b) all contract or tort claims of any kind; and (c) any claim based on any federal, state, or local law, statute, regulation, or ordinance, including claims for unlawful discrimination or harassment, shall be settled by arbitration in accordance with the then current Employment Dispute Resolution Rules of the American Arbitration Association.  Judgment on the award rendered by the arbitrator(s) may be entered by any court having jurisdiction thereof.  The location of the arbitration shall be San Francisco, California.  Unless the parties mutually agree otherwise, the arbitrator shall be a retired judge selected from a panel provided by the American Arbitration Association, or the Judicial Arbitration and Mediation Service (JAMS).  BioTime shall pay the arbitrator’s fees and costs.  Each party shall pay for its own costs and attorneys' fees, if any.  However, if any party prevails on a statutory claim which affords the prevailing party attorneys' fees, the arbitrator may award reasonable attorneys' fees and costs to the prevailing party.

  

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EXECUTIVE UNDERSTANDS AND AGREES THAT THIS AGREEMENT TO ARBITRATE CONSTITUTES A WAIVER OF HIS RIGHT TO A TRIAL BY JURY OF ANY MATTERS COVERED BY THIS AGREEMENT TO ARBITRATE.

9.             Severability. In the event that any of the provisions of this Agreement shall be held to be invalid or unenforceable in whole or in part, those provisions to the extent enforceable and all other provisions shall nevertheless continue to be valid and enforceable as though the invalid or unenforceable parts had not been included in this Agreement.  In the event that any provision relating to the time period of restriction shall be declared by a court of competent jurisdiction to exceed the maximum time period such court deems reasonable and enforceable, then the time period of restriction deemed reasonable and enforceable by the court shall become and shall thereafter be the maximum time period.

10.           Agreement Read and Understood. Executive acknowledges that he has carefully read the terms of this Agreement, that he has had an opportunity to consult with an attorney or other representative of his own choosing regarding this Agreement, that he understands the terms of this Agreement, and that he is entering this agreement of his own free will.

11.           Complete Agreement, Modification.  This Agreement is the complete agreement between the parties on the subjects contained herein and supersedes all previous correspondence, promises, representations, and agreements, if any, either written or oral.  No provision of this Agreement may be modified, amended, or waived except by a written document signed both by BioTime and Executive.

12.           Governing Law.  This Agreement shall be construed and enforced according to the laws of the State of California.

13.           Assignability.  This Agreement, and the rights and obligations of the parties under this Agreement, may not be assigned by Executive.  BioTime may assign any of its rights and obligations under this Agreement to any successor or surviving corporation, limited liability company, or other entity resulting from a merger, consolidation, sale of assets, sale of stock, sale of membership interests, or other reorganization, upon condition that the assignee shall assume, either expressly or by operation of law, all of BioTime's obligations under this Agreement.

14.           Survival.  This Section 14 and the covenants and agreements contained in Sections 4 and 7 of this Agreement shall survive termination of this Agreement and Executive's employment.

15.           Notices.  Any notices or other communication required or permitted to be given under this Agreement shall be in writing and shall be mailed by certified mail, return receipt requested, or sent by next business day air courier service, or personally delivered to the party to whom it is to be given at the address of such party set forth on the signature page of this Agreement (or to such other address as the party shall have furnished in writing in accordance with the provisions of this Section 15).

  

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.

EXECUTIVE:

	
/s/ William P. Tew

	  
	
William P. Tew

	  
	
Address:

	  

BioTime, Inc.

	  	
By:

	
/s/ Robert W. Peabody

	  
	  	  	
Robert W. Peabody

	  
	  	
Title:

	
Sr. VP and Chief Operating Officer

	  

	  	
Address:

	
1301 Harbor Bay Parkway, Suite100

	  	  	
Alameda, California 94502

OrthoCyte Corporation

	  	
By:

	
/s/ Robert W. Peabody

	  
	  	  	
Robert W. Peabody

	  
	  	
Title:

	
Sr. VP and Chief Operating Officer

	  

  

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EXHIBIT A

California Labor Code Section 2870.

Application of provision providing that employee shall assign or offer to assign rights in invention to employer.

(a)           Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer's equipment, supplies, facilities, or trade secret information except for those inventions that either:

(i)           Relate at the time of conception or reduction to practice of the invention to the employer's business, or actual or demonstrably anticipated research or development of the employer; or

(ii)           Result from any work performed by the employee for his employer.

(b)           To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.

  

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EXHIBIT B

PRIOR MATTERS

None

 

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