Document:

Exhibit 10.21

PURCHASE AGREEMENT

ASTERIAS BIOTHERAPEUTICS, INC.

4,000,000 BioTime Inc. Common Shares

and

4,000,000 Asterias Series B Common Stock Purchase Warrants

Total Purchase Price $10,000,000

READ THIS AGREEMENT CAREFULLY BEFORE YOU INVEST

The Asterias Common Stock Purchase Warrants (“Warrants”), and the shares of Asterias Series B Common Stock issuable upon the exercise of the Warrants (“Warrant Shares”) have not been registered under the Securities Act of 1933, as amended, or applicable state securities laws and may not be offered for sale, sold, transferred, pledged or hypothecated to any person, and the Warrants may not be exercised, in the absence of an effective registration statement covering such securities (or an exemption from such registration) and an opinion of counsel satisfactory to Asterias Biotherapeutics, Inc. to the effect that such transfer complies with applicable securities laws.

PURCHASE AGREEMENT

This Agreement is entered into by Jay J. Miller, Trustee of the George Karfunkel 2007 Grantor Trust #1 (“Purchaser”) and Asterias Biotherapeutics, Inc., a Delaware corporation (the “Company).

1.                   Purchase and Sale of Shares with Warrants.

(a)                 Purchaser hereby irrevocably agrees to purchase, and the Company hereby irrevocably agrees to sell to Purchaser 4,000,000 common shares, no par value, of BioTime, Inc., (“Shares”) for a total purchase price of Ten Million Dollars ($10,000,000).  In addition to the Shares, Purchaser will receive warrants to purchase 4,000,000 shares of Series B Common Stock of the Company (“Warrants”).  The Warrants will entitle the holder to purchase, on the terms and conditions set forth in the Warrant Agreement governing the Warrant, shares of Series B Common Stock, par value $0.0001 of the Company (“Warrant Shares”) for $2.34 per Warrant Share (the “Warrant Price”), subject to adjustment as provided in the Warrant Agreement a copy of which is attached as Exhibit A (the “Warrant Agreement”).

2.                   Closing.  The consummation of the sale of the Shares with Warrants (“Closing”) will take place no later than the second business day after the Company delivers to Purchaser a countersigned signature page copy of this Agreement (the “Closing Date”).

(a)                 On the Closing Date, Purchaser shall purchase all 4,000,000 Shares with 4,000,000 Warrants and shall pay to the Company, by wire transfer to an account designated by the Company, the full purchase price of $10,000,000.  On the Closing Date, the Company will issue to the Purchaser the 4,000,000 Shares purchased and 4,000,000 Warrants.

(b)                 The issue of the Shares purchased may be, at the election of the Company, by book entry of such Shares purchased, in the name of the Purchaser, on the records of the transfer agent of the Shares or by a stock certificate in the name of the Purchaser for the number of Shares purchased.  The Warrants shall be sent to the Purchaser by next business day delivery service or certified mail within two business days after the Closing Date, along with a copy of the Warrant Agreement governing the Warrants executed by the Company.

  

(c)                 The Closing shall be subject to the following conditions:

(i)               The representations and warranties of the Company contained in this Agreement shall be true and correct in all material respects on the date of the Closing, and the Company shall have complied in all material respects with its covenants required to have been performed as of the date of Closing; and

(ii)              No litigation or other proceeding of any kind to enjoin, delay, prohibit or restrict the consummation of the sale of the Shares with Warrants under this Agreement shall be pending, and there shall be no judgment, order or writ of any court or government authority in effect prohibiting or restricting the consummation of the of the sale of the Shares with Warrants under this Agreement.

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3.                   Registration Rights.  Concurrently with the execution and delivery of this Agreement, Purchaser and the Company shall enter into a Registration Rights Agreement in the form of Exhibit B, pursuant to which the Company is agreeing to register the Warrants and the Warrant Shares under the Securities Act of 1933, as amended (the “Act”).

4.                    Lock-Up Agreement.  In order to induce the Company to enter into this Agreement and to sell to Purchaser the Shares with Warrants pursuant to this Agreement, Purchaser agrees that for a period of 275 days commencing on the Closing Date, Purchaser shall not, without the prior written consent of the Company or BioTime, (i) offer, sell, contract to sell, pledge or otherwise dispose of any of the Shares, or (ii) enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition of any of the Shares, whether by actual disposition or effective economic disposition due to cash settlement or otherwise, by Purchaser or any affiliate of Purchaser or any person in privity with Purchaser or any affiliate of Purchaser.  The foregoing prohibition on the disposition of the Shares shall also prohibit the filing (or participation in the filing) of a registration statement with the Securities and Exchange Commission in respect of, or establishing or increasing a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder, with respect to, any of the Shares.  The foregoing restriction shall not apply to bona fide gifts of Shares approved by the Company or BioTime where each recipient of a gift of shares agrees in writing to be bound by the same restrictions in place for Purchaser pursuant to this Section 4 for the duration that such restrictions remain in effect at the time of transfer.  This Section 4 applies only to the Shares purchased by Purchaser pursuant to this Agreement and any other common shares of BioTime issued to Purchaser as a stock dividend or upon the split-up or reclassification of such Shares.

5.                   Representations and Warranties of the Company.  The Company makes the following representations and warranties for the benefit and reliance of Purchaser.  The following representations and warranties are true and correct on the date of this Agreement and as of the Closing Date, and are qualified accordingly.

(a)                Organization.  The Company is a corporation duly organized, validly existing and in good standing under the laws of the state of Delaware, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted.  The Company is duly qualified to conduct business and is in good standing as a foreign corporation in California and in each other jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to so qualify would not have a material adverse effect on its business.

(b)                Authority; Enforceability.  The Company has the corporate power and authority to execute and deliver, and to perform all of its obligations under, this Agreement, the Registration Rights Agreement, and the Warrant Agreement.  The execution and delivery of this Agreement, the Warrant Agreement, and the Registration Rights Agreement and the performance by the Company of its obligations under this Agreement, the Warrant Agreement, and the Registration Rights Agreement have been duly authorized by all necessary action on the part of the Board of Directors of the Company.  This Agreement, the Warrant Agreement and the Registration Rights Agreement are the valid and binding agreements of the Company, enforceable in accordance with their respective terms, except to the extent limited by any bankruptcy, insolvency, or similar law affecting the rights of creditors generally.

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(c)                 No Conflict.  The execution and delivery of this Agreement, the Warrant Agreement, and the Registration Rights Agreement, the consummation of the transactions contemplated hereunder and thereunder by the Company do not and will not violate any provisions of (i) any federal or state rule, regulation, statute, or law applicable to the Company or (ii) the terms of any order, writ, or decree of any federal or state court or judicial or regulatory authority or body by which the Company is bound, (iii) the certificate of incorporation or bylaws of the Company or (iv) any agreement, instrument or contract to which the Company is a party and which is material to the business of the Company.

(d)                Validity of the Warrants and Warrant Shares.  The Warrants, when delivered at Closing, will be the duly authorized and valid obligations of the Company, enforceable in accordance with the terms of the Warrant Agreement.  The Warrant Shares, when issued upon exercise of the Warrants, will be duly authorized and validly issued, fully paid, and nonassessable.

(e)                 Litigation.  There is no action, proceeding, or investigation pending which challenges the Company’s right to enter into this Agreement, or challenges any action taken or to be taken, by the Company in connection with this Agreement.

(f)                 Capitalization.  The authorized capital of the Company includes 75,000,000 shares of Series A Common Stock, 75,000,000 shares of Series B Common Stock, and 5,000,000 shares of Preferred Stock.  As of June 9, 2014, there were issued and outstanding: (i) 6,537,779 shares of Company Series A Common Stock, (ii) 24,161,040 shares of Series B Common Stock (including 200,000 shares of ‘restricted stock” under the Company’s Equity Incentive Plan); (iii) no shares of preferred stock issued or outstanding, (iv) 3,500,000 Warrants to purchase Series B Common Stock, and (v) options to purchase 3,873,749 shares of Series B Common Stock under the Company’s Equity Incentive Plan.

6.                    Investment Representations.  Purchaser represents and warrants to the Company that:

(a)                Authority; Enforceability.  The Purchaser has the power and authority to execute and deliver, and to perform all of Purchaser’s obligations under, this Agreement and the Registration Rights Agreement.  This Agreement has been duly executed and delivered by Purchaser.  This Agreement is, and when executed by Purchaser and the Company the Registration Rights Agreement will be, the valid and binding agreements of the Purchaser, enforceable in accordance with their respective terms, except to the extent limited by any bankruptcy, insolvency, or similar law affecting the rights of creditors generally.

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(b)                 No Conflict.  The execution and delivery of this Agreement and the Registration Rights Agreement, and consummation of the transactions contemplated under this Agreement and under the Registration Rights Agreement, including the purchase of the Shares with Warrants, by the Purchaser do not and will not violate any provisions of (i) any rule, regulation, statute, or law applicable to the Purchaser, (ii) the terms of any order, writ, or decree of any court or judicial or regulatory authority or body by which the Purchaser is bound, or (iii) the certificate of incorporation, bylaws, or similar charter or governing documents of the Purchaser.

(c)                 Due Diligence.  Purchaser has made such investigation of the Company and BioTime, Inc. as Purchaser deemed appropriate for determining to acquire (and thereby make an investment in) the Shares and Warrants.  In making such investigation, Purchaser has had access to such financial and other information concerning the Company and BioTime as Purchaser requested.  Purchaser has received and read copies of the form of Warrant Agreement, including the form of the Warrant, and the form of Registration Rights Agreement.  Purchaser acknowledges and understands that the Company is an early stage venture with only a limited history of operations, and has received only limited capital.  Purchaser acknowledges receipt of, or has access to:  (i) the Company’s and BioTime’s respective Annual Report on Form 10-K for the year ended December 31, 2013, Quarterly Report on Form 10-Q for the three months ended March 31, 2014, and each Current Report on Form 8-K filed by the Company and BioTime under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), since January 1, 2014; (ii) a copy of the Amended and Restated Certificate of Incorporation and Bylaws of the Company, and (iii) BioTime’s most recent prospectus filed under the Act with respect to Registration Statement No. 333-187710 (collectively, the “Disclosure Documents”).  Purchaser is relying on the information provided in the Disclosure Documents or otherwise communicated to Purchaser in writing by the Company.  Purchaser has not relied on any statement or representations inconsistent with those contained in the Disclosure Documents or otherwise communicated to Purchaser in writing by the Company.  Purchaser has had a reasonable opportunity to ask questions of and receive answers from the executive officers of the Company and BioTime, concerning the Company and BioTime, respectively, and to obtain additional information (including all exhibits listed in the Disclosure Documents), to the extent possessed or obtainable by the Company or BioTime without unreasonable effort or expense, necessary to verify the information in the Disclosure Documents.  All such questions have been answered to Purchaser’s satisfaction.

(d)                Unregistered Offer and Sale.  Purchaser understands that the Warrants and Warrant Shares are being offered and sold without registration under the Act, or qualification under the California Corporate Securities Law of 1968, or under the laws of any other states of the United States in reliance upon the exemptions from such registration and qualification requirements.  Purchaser acknowledges and understands that the availability of the aforesaid exemptions depends in part upon the accuracy of certain of the representations, declarations and warranties made by Purchaser, and the information provided by Purchaser, in this Agreement,  Purchaser is making such representations, declarations and warranties, and is providing such information, with the intent that the same may be relied upon by the Company and its officers and directors in determining Purchaser’s suitability to acquire the Warrants.  Purchaser understands and acknowledges that no federal, state or other agency has reviewed or endorsed the offering of the Shares, Warrants, and Warrant Shares or made any finding or determination as to the fairness of the offering or sale of the Shares, Warrants and Warrant Shares, or the completeness of the information in the Disclosure Documents.

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(e)                 Restrictions on Exercise and Transfer.  Purchaser understands that the Warrants and Warrant Shares may not be offered, sold, or transferred in any manner, and the Warrants may not be exercised, unless subsequently registered under the Act, or unless there is an exemption from such registration available for such offer, sale or transfer.

(f)                  Knowledge and Experience.  Purchaser (or if Purchaser is not a natural person, the officers and directors making the decision on behalf of Purchaser to purchase the Shares with Warrants) has such knowledge and experience in financial and business matters to enable Purchaser to utilize the information contained in the Disclosure Documents or otherwise made available to Purchaser to evaluate the merits and risks of an investment in the Shares, Warrants, and Warrant Shares, and to make an informed investment decision.

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

(h)                Forward Looking Statements.  Matters discussed in the Disclosure Documents include matters that may be considered “forward looking” statements within the meaning of Section 27(a) of the Act and Section 21(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which statements Purchaser acknowledges and agrees are not guarantees of future performance and involve a number of risks and uncertainties.  Nothing contained in this Section 6(h) shall modify, amend or affect Purchaser’s right to rely on the truth, accuracy and completeness of the statements and representations made in the Disclosure Documents or otherwise communicated to Purchaser in writing by the Company or on the Company’s representations and warranties contained in this Agreement.

(i)                   No Assurance of Return on Investment.  It has never been represented, guaranteed or warranted to Purchaser by the Company or BioTime or any officer, director, employee, or agent of the Company or BioTime, that Purchaser will realize any specific value, sale price, or profit as a result of acquiring the Shares, Warrants, or Warrant Shares.

7.                   Resale Restrictions on Warrants and Warrant Shares.

(a)                 Purchaser agrees that Purchaser will not sell, offer for sale, or transfer any of the Warrants or Warrant Shares unless those Warrants or Warrant Shares, as applicable, have been registered under the Act, or unless there is an exemption from such registration and an opinion of counsel reasonably acceptable to the Company has been rendered stating that such offer, sale, or transfer will not violate any United States federal or state securities laws.

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(b)                The certificates evidencing the Warrants or Warrant Shares will contain a legend to the effect that transfer is prohibited except pursuant to registration under the Act, or pursuant to an available exemption from registration under the Act.

(c)                 The Company will refuse to register the transfer, and will issue instructions to the transfer agent and registrar of the Warrants and Warrant Shares to refuse to register the transfer, of any Warrants or Warrant Shares not made pursuant to registration under the Act or pursuant to an available exemption from registration under the Act.

8.                   Accredited Investor Qualification.  Purchaser qualifies as an “accredited investor” under Regulation D in the following manner.  (Please check or initial all that apply to verify that you qualify as an “accredited investor.”)

____(a)              Purchaser is a natural person whose net worth, or joint net worth with spouse, at the date of purchase exceeds $1,000,000 (not including the value of Purchaser’s principal residence and excluding mortgage debt secured by Purchaser’s principal residence up to the estimated fair market value of the home, except that any mortgage debt incurred by Purchaser within 60 days prior to the date of this Agreement shall not be excluded from the determination of Purchaser’s net worth unless such mortgage debt was incurred to acquire the residence).

____(b)              Purchaser is a natural person whose individual gross income (excluding that of spouse) exceeded $200,000 in each of the past two calendar years, and who reasonably expects individual gross income exceeding $200,000 in the current calendar year.

____(c)               Purchaser is a natural person whose joint gross income with spouse exceeded $300,000 in each of the past two calendar years, and who reasonably expects joint gross income with spouse exceeding $300,000 in the current calendar year.

____(d)              Purchaser is a bank, savings and loan association, broker/dealer, insurance company, investment company, pension plan or other entity defined in Rule 501(a)(1) of Regulation D as promulgated under the Act by the Securities and Exchange Commission.

____(e)               Purchaser is a trust, and the trustee is a bank, savings and loan association, or other institutional investor as defined in Rule 501(a)(1) of Regulation D as promulgated under the Act by the Securities and Exchange Commission.

____(f)                Purchaser is a private business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940.

   x    (g)                Purchaser is a trust, and the grantor (i) has the power to revoke the trust at any time and regain title to the trust assets; and (ii) meets the requirements of items (a) (b), or (c) above.

____(h)              Purchaser is a tax-exempt organization described in Section 501(c) (3) of the Internal Revenue Code, or a corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring Shares and Warrants with total assets in excess of $5,000,000.

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____(i)                The Purchaser is a trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring Shares and Warrants, whose purchase is directed by a person who has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of an investment in the Shares and Warrants.

____(j)                The Purchaser is an entity in which all of the equity owners meet the requirements of at least one of items (a) through (i) above.

9.                   Entities.  If Purchaser is a corporation, partnership, limited liability company, trust, private limited company, or other entity, Purchaser represents and warrants that: (a) it is authorized and otherwise duly qualified to purchase and hold the Shares and Warrants; (b) it has its principal place of business as set forth in Section 11; and (c) it has not been formed or reorganized for the specific purpose of acquiring Shares and Warrants.

10.                Miscellaneous.

(a)                 Governing Law.  This Agreement shall be governed by, interpreted, construed and enforced in accordance with the laws of the State of Delaware, as such laws are applied to contracts by and among residents of Delaware, and which are to be performed wholly within Delaware.

(b)                 Amendment.  Neither this Agreement nor any provisions hereof shall be modified, discharged or terminated except by an instrument in writing signed by the party against whom any waiver, change, discharge or termination is sought.

(c)                 Notices.  Any notice, demand or other communication that any party hereto may be required, or may elect, to give shall be sufficiently given when (i) delivered personally at such address, (ii) delivered to such address by air courier delivery service, or (iii) delivered by electronic mail (email) to such electronic mail address as may be specified under this Agreement.  The address for notice to the Company is: Asterias Biotherapeutics, Inc., 230 Constitution Drive, Menlo Park, California 94025; Attention:  Robert W. Peabody, Chief Financial Officer; email: rpeabody@biotimemail.com.  The address for notice of Purchaser is shown in Section 11.  A party may change its address for notice by giving the other parties notice of a new address in the manner provided in this Agreement.

(d)                Counterparts.  This Agreement may be executed through the use of separate signature pages or in any number of counterparts, and each of such counterparts shall, for all purposes, constitute one agreement binding on all the parties, notwithstanding that all parties are not signatories to the same counterpart.  Counterparts sent by electronic mail, facsimile, or other electronic means, including signatures thereon, shall be deemed originals.

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(e)                 Parties.  Except as otherwise provided herein, the Agreement shall be binding upon and inure to the benefit of the parties and their heirs, executors, administrators, successors, legal representatives and assigns.

(f)                  Entire Agreement.  This Agreement contains the entire agreement of the parties with respect to its subject matter, and there are no representations, covenants or other agreements with respect to the subject matter of this Agreement except for those stated or referred to herein.

(g)                No Assignment.  This Agreement is not transferable or assignable by Purchaser except as may be provided herein.

(h)                Delays and Omissions.  No delay or omission to exercise any right, power, or remedy accruing to any party to this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power, or remedy of such party, nor shall such delay or omission be construed to be a waiver of, or an acquiescence in, any such breach or default or any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring.  Any waiver, permit, consent, or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be made in writing, and shall be effective only to the extent specifically set forth in such writing.

(i)                  Expenses.  Each party shall bear their own expenses incurred on their behalf with respect to this Agreement and to the transactions contemplated by this Agreement.

(j)                   No Brokers or Finders Fees.  The Company and Purchaser warrant to each other that no person is entitled to receive any fee, commission, or other compensation as a broker, finder, or otherwise, in connection with the execution and delivery of this Agreement or the issue and sale of the Shares or Warrants.

(k)                 Titles and Subtitles.  The titles or headings of the Sections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.

(l)                  Severability.  If one or more provisions of this Agreement are held to be unenforceable under applicable law, each such unenforceable provision shall be excluded from this Agreement and the balance of this Agreement shall be interpreted as if each such unenforceable provision were so excluded; the balance of this Agreement as so interpreted shall be enforceable in accordance with its terms.

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11.                Investor Information.

 

	
 

	
Name:

	
The George Karfunkel 2007 Grantor Trust #1

	
 

	
 

	
 

	
 

	
 

	
 

	
Address:

	
1671    52 Street

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Brooklyn, NY 11204

	
 

	
 

	
 

	
 

	
 

	
 

	
email:

	
      

	
 

	
 

	
Social Security or U.S. Taxpayer Identification Number:

	
     

	
 

	
 

	
State of Residence or Principal Place of Business:

	
NY

	
 

	
 

	
Country of Residence if other than United States:

	

	
 

	
 

	
 

	
 

	
 

	
 

	
Information from Corporations, Partnerships, Limited Liability Companies, Trusts, or Other Entity Investors:

	
 

	
 

	
Date of Formation:

	
8-14-2007

	
 

	
 

	
Name and title of person authorized to bind the entity:

	
Jay J. Miller, Esq.

	
 

 

IN WITNESS WHEREOF, the undersigned has entered into this Agreement and hereby agrees to purchase Shares with Warrants for the price stated above and upon the terms and conditions set forth herein.  The undersigned hereby agrees to all of the terms of the Warrant Agreement and Registration Rights Agreement and agrees to be bound by the terms and conditions thereof.

 

	
Dated:  June 12, 2014

	
 

	
 

	
 

	
 

	
 

	
 

	
s/Jay J. Miller

	
 

	
 

	
Jay J. Miller, Trustee of the

	
 

	
 

	
George Karfunkel 2007 Grantor Trust #1

	
 

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ACCEPTANCE BY COMPANY

The Company hereby agrees to sell to the Purchaser the Shares with Warrants referenced in this Agreement in reliance upon all the representations, warranties, terms and conditions contained in this Agreement.

IN WITNESS WHEREOF, the undersigned, on behalf of the Company, has executed this acceptance as of the date set forth below.

	
Dated:  June 13, 2014

	
ASTERIAS BIOTHERAPEUTICS, INC.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
s/Pedro Lichtinger

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Title:

	
President and CEO

	
 

 

 

11Exhibit 10.22

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT, dated as of June 16, 2014, is made by and among Asterias Biotherapeutics, Inc., a Delaware corporation (the “Company”), and each Shareholder (as defined below) who is the registered holder of Registrable Securities (as defined below).

WHEREAS, the parties hereto desire to provide for, among other things, the grant of registration rights with respect to the Registrable Securities.

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

	
1.

	
Definitions and Interpretations.

(a)                 Definitions.  As used in this Agreement, and unless the context requires a different meaning, the following terms have the meanings indicated:

(i)                “Acquired Shares” means the Shares issued or issuable upon the exercise of the Warrants, including any Shares into which such Shares may be converted, and any.

(ii)              “Affiliate” means, with respect to a Person, any other Person directly or indirectly controlling, controlled by or under direct or indirect common control with such specified Person.  For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to a Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.

(iii)            “Agreement” means this Registration Rights Agreement as the same may be amended, supplemented or modified in accordance with the terms.

(iv)              “Automatic Shelf Registration Statement” means an “automatic shelf registration statement” as defined in Rule 405 promulgated under the Securities Act.

(v)                “Board of Directors” means the Board of Directors of the Company (or any duly authorized committee thereof).

(vi)              “Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks in New York, New York and San Francisco, California are authorized or required by law or executive order to close.

 

(vii)            “Commission” means the Securities and Exchange Commission or any similar agency then having jurisdiction to enforce the Securities Act.

(viii)          “Company” has the meaning set forth in the preamble to this Agreement.

(ix)             “Company Free Writing Prospectus” means each Free Writing Prospectus prepared by or on behalf of the Company or used or referred to by the Company in connection with an offering of Registrable Securities.

(x)               “Disclosure Package” means, with respect to any offering of Registrable Securities, (i) the preliminary Prospectus, (ii) each Free Writing Prospectus and (iii) all other information, in each case, that is deemed, under Rule 159 promulgated under the Securities Act, to have been conveyed to purchasers of securities at the time of sale of such securities (including, without limitation, a contract of sale).

(xi)             “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder.

(xii)           “Free Writing Prospectus” means any “free writing prospectus” as defined in Rule 405 promulgated under the Securities Act.

(xiii)         “Indemnified Party” has the meaning set forth in Section 4(c).

(xiv)           “Indemnifying Party” has the meaning set forth in Section 4(c).

(xv)             “Inspector” has the meaning set forth in Section 3(b).

(xvi)           “Liability” has the meaning set forth in Section 4(a).

(xvii)         “Permitted Assignee” means  with respect to any Shareholder, to the extent applicable, (i) such Shareholder’s parents, spouse, siblings, siblings’ spouses, children (including stepchildren and adopted children), children’s spouses, grandchildren or grandchildren’s spouses (“Family Members”), (ii) a corporation, partnership or limited liability company, a majority of the beneficial interests of which shall be held by such Shareholder, such Shareholder’s Affiliates and/or such Shareholder’s Family Members, (iii) a trust, the beneficiaries of which are such Shareholder and/or such Shareholder’s Family Members, (iv) such Shareholder’s heirs, executors, administrators, estate or a trust under such Shareholder’s will, (v) an entity described in Section 501(c)(3) of the United States Internal Revenue Code of 1986, as amended, that is established by such Shareholder, and (vi) any Affiliate of such Shareholder.

(xviii)       “Person” means any individual, corporation, partnership, limited liability company, trust, incorporated or unincorporated association, joint venture, joint stock company, government (or an agency or political subdivision) or other entity of any kind, and shall include any successor (by merger or otherwise) of such entity.

(xix)           “Pledgee” has the meaning set forth in Section 2(d)(i).

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(xx)            “Prospectus” means the prospectus related to any Registration Statement (including, without limitation, a prospectus or prospectus supplement that discloses information previously omitted from a prospectus filed as part of an effective registration statement in reliance on Rule 415, 430A, 430B or 430C under the Securities Act, as amended or supplemented by any amendment or prospectus supplement), including post-effective amendments, and all materials incorporated by reference in such prospectus.

(xxi)          “Records” has the meaning set forth in Section 3(b)(viii).

(xxii)        “Registrable Securities” means, subject to Section 2(b) and Section 2(d)(i), (i) the Acquired Shares, (ii) the Warrants, and (iii) any other securities that are (A) distributed as a dividend or otherwise with respect to Acquired Shares, or (B) issued or issuable in exchange for or through conversion of the Acquired Shares or Warrants pursuant to a recapitalization, reorganization, merger, consolidation, sale of assets or other transaction.

(xxiii)      “Registration Expenses” has the meaning set forth in Section 3(f).

(xxiv)        “Registration Statement” means a registration statement filed pursuant to the Securities Act.

(xxv)          “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.

(xxvi)        “Shareholder” means (a) the Persons named on Schedule I,  and (b) such Permitted Assignees or Pledgees of the Persons named on Schedule I to whom registration rights under this Agreement are validly transferred in accordance with Section 2(d)(i).

(xxvii)      “Shareholders’ Counsel” has the meaning set forth in Section 3(b).

(xxviii)    “Shares” means (i) the Series B common stock, of the Company, (ii) any securities of the Company or any successor or assign of the Company into which such shares described in clause (i) are reclassified or reconstituted or into which such shares are converted or otherwise exchanged in connection with a combination of shares, recapitalization, merger, sale of assets, consolidation or other reorganization or otherwise, including any conversion pursuant to the Certificate of Incorporation of the Company or (iii) any securities received as a dividend or distribution in respect of the securities described in clauses (i) and (ii) above.

(xxix)       “Warrants” means warrants to purchase Shares of the Company issued to the Shareholders named on Schedule I pursuant to the Stock and Warrant Purchase Agreement between the Company and such Shareholders.

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(b)                Interpretation.  Unless otherwise noted:

(i)                All references to laws, rules, regulations and forms in this Agreement shall be deemed to be references to such laws, rules, regulations and forms, as amended from time to time or, to the extent replaced, the comparable successor laws, rules, regulations and forms thereto in effect at the time.

(ii)              All references to agencies, self-regulatory organizations or governmental entities in this Agreement shall be deemed to be references to the comparable successor thereto.

(iii)            All references to agreements and other contractual instruments shall be deemed to be references to such agreements or other instruments as they may be amended, waived, supplemented or modified from time to time.

(iv)              All references to any amount of securities (including Registrable Securities) shall be deemed to be a reference to such amount measured on an as-converted or as-exercised basis.

	
2.

	
General; Securities Subject to this Agreement

(a)                Grant of Rights.  The Company hereby grants registration rights to the Shareholders upon the terms and conditions set forth in this Agreement.

(b)                Registrable Securities.  For the purposes of this Agreement, Registrable Securities held by any Person will cease to be Registrable Securities when (i) a Registration Statement covering such Registrable Securities has been declared effective under the Securities Act by the Commission and such Registrable Securities have been disposed of pursuant to such effective Registration Statement, (ii) the entire amount of the Registrable Securities held by a Person may be sold in a single sale, in the opinion of counsel reasonably satisfactory to the Company, without any limitation as to volume or manner of sale pursuant to Rule 144  promulgated under the Securities Act, (iii) the Registrable Securities have ceased to be outstanding, or (iv) the Registrable Securities have been transferred pursuant to a transfer or pledge otherwise than pursuant to Section 2(d).

(c)                 Holders of Registrable Securities.  A Person is deemed to be a holder of Registrable Securities whenever such Person owns of record Registrable Securities.  If the Company receives conflicting instructions, notices or elections from two or more Persons with respect to the same Registrable Securities, the Company may act upon the basis of the instructions, notice or election received from the registered owner of such Registrable Securities.

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(d)                Transfer of Registration Rights.

(i)                A Shareholder may transfer or pledge Registrable Securities with the associated registration rights under this Agreement (including transfers occurring by operation of law or by reason of intestacy) to a Permitted Assignee or a pledgee (“Pledgee”) only if (1) such Permitted Assignee or Pledgee agrees in writing to be bound as a Shareholder by the provisions of this Agreement, such agreement being substantially in the form of Annex A hereto, and (2) immediately following such transfer or pledge, the further disposition of such Registrable Securities by such Permitted Assignee or Pledgee would be restricted under the Securities Act and the entire amount of all such Registrable Securities could not be sold in a single sale, in the opinion of counsel reasonably satisfactory to the Company, without any limitation as to volume or manner of sale pursuant to Rule 144 promulgated under the Securities Act.  Upon any transfer or pledge of Registrable Securities other than as set forth in this Section 2(d), such securities shall no longer constitute Registrable Securities.

(ii)              Subject to Section 2(b), if a Shareholder assigns its rights under this Agreement in connection with the transfer of less than all of its Registrable Securities, the Shareholder shall retain its rights under this Agreement with respect to its remaining Registrable Securities.  If a Shareholder assigns its rights under this Agreement in connection with the transfer of all of its Registrable Securities, such Shareholder shall have no further rights or obligations under this Agreement, except under Section 4 in respect of offerings in which it participated.

	
3.

	
Registration Procedures

(a)                 S-3 Registration.  Promptly after the date on which the Company becomes eligible to register the Registrable Securities on Form S-3, the Company shall prepare and file with the Commission a Registration Statement covering the resale of all of the Registrable Securities for an offering to be made on a continuous basis pursuant to Rule 415.  Subject to the terms of this Agreement, the Company shall use its commercially reasonable efforts to cause such Registration Statement to be declared effective under the Securities Act as promptly as possible after the filing thereof.

(b)                Obligations of the Company.  In connection with the registration of Registrable Securities, the Company shall:

(i)                prepare and file with the Commission a Registration Statement on Form S-3 and cause such Registration Statement to become effective; provided, however, that before filing a Registration Statement or Prospectus or any amendments or supplements thereto (including, without limitation, any documents incorporated by reference therein), or before using any Free Writing Prospectus, provide one firm of legal counsel selected by Shareholders holding a majority of the Registrable Securities being registered in such registration (“Shareholder’ Counsel”), any managing underwriter or broker/dealer participating in any disposition of such Registrable Securities pursuant to a Registration Statement and any attorney retained by any such managing underwriter or broker/dealer (each, an “Inspector” and collectively, the “Inspectors”) with an opportunity to review and comment on such Registration Statement and each Prospectus included therein (and each amendment or supplement thereto) and each Free Writing Prospectus to be filed with the Commission, subject to such documents being under the Company’s control.  The Company shall notify the Shareholders’ Counsel and each seller of Registrable Securities pursuant to such Registration Statement of any stop order issued or threatened by the Commission and take all reasonable actions required to prevent the entry of such stop order or to remove it if entered;

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(ii)              prepare and file with the Commission such amendments and supplements to such Registration Statement and the Prospectus used in connection therewith as shall be necessary to keep such Registration Statement effective for the lesser of (x) such period which will terminate when all Registrable Securities covered by such Registration Statement have been sold (or, if such Registration Statement is an Automatic Shelf Registration Statement, on the first anniversary of the date of filing of such Automatic Shelf Registration Statement) or (y) the securities covered by such Registration Statement are no longer Registrable Securities;

(iii)            furnish to each seller of Registrable Securities such number of copies of such Registration Statement, each amendment and supplement thereto, the Prospectus included in such Registration Statement (including each preliminary Prospectus), any Prospectus filed under Rule 424 under the Securities Act and any Free Writing Prospectus as each such seller may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such seller; provided that the Company need not provide copies of exhibits to the Registration Statement.

(iv)              use its commercially reasonable efforts to expeditiously register or qualify such Registrable Securities under such other securities or “blue sky” laws of California and New York if required by the laws of such states, and continue such registration or qualification in effect in such jurisdiction for as long as permissible pursuant to the laws of such jurisdiction, or for as long as any such seller requests or until all of such Registrable Securities are sold or are “covered securities” under the Securities Act, whichever is shortest, and do any and all other acts and things which may be reasonably necessary or advisable to enable any such seller to consummate the disposition of the Registrable Securities owned by such seller in such jurisdictions; provided, however, that the Company shall not be required to (x) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(b)(iv), (y) subject itself to taxation in any such jurisdiction or (z) consent to general service of process in any such jurisdiction;

(v)                following its actual knowledge thereof, notify each seller of Registrable Securities: (A) when a Prospectus, any Prospectus supplement, any Free Writing Prospectus, a Registration Statement or a post-effective amendment to a Registration Statement has been filed with the Commission, and, with respect to a Registration Statement or any post-effective amendment, when the same has become effective; (B) of any request by the Commission for amendments or supplements to a Registration Statement, related Prospectus or Free Writing Prospectus or for additional information; (C) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceedings for such purpose; and (D) of the existence of any fact or happening of any event of which the Company has knowledge which makes any statement of a material fact in such Registration Statement, related Prospectus or Free Writing Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue or which would require the making of any changes in the Registration Statement, Prospectus or Free Writing Prospectus in order that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of such Prospectus or Free Writing Prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, provided that the Company need not disclose any facts or events that have not been publicly disclosed by the Company;

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(vi)              upon the occurrence of any event contemplated by Section 3(b)(v)(D), as promptly as practicable, prepare a supplement or amendment to such Registration Statement, related Prospectus or Free Writing Prospectus and furnish to each seller of Registrable Securities a reasonable number of copies of such supplement to, or amendment of, such Registration Statement, Prospectus or Free Writing Prospectus as may be necessary so that, after delivery to the purchasers of such Registrable Securities, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of such Prospectus or Free Writing Prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;

(vii)            enter into and perform customary agreements and take such other actions as are reasonably required in order to facilitate the disposition of such Registrable Securities and shall provide all reasonable cooperation, including causing counsel to the Company to deliver customary legal opinions in connection with any such underwriting agreements;

(viii)          make available at reasonable times for inspection by any Inspector all financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries (collectively, the “Records”) as shall be reasonably necessary to enable them to exercise their due diligence responsibility, and cause the Company’s and its subsidiaries’ officers, directors, managers and employees, and the Company’s independent registered public accounting firm, to supply all information reasonably requested by any such Inspector in connection with such Registration Statement.  Records that the Company determines, in good faith, to be confidential and which it notifies the Inspectors are confidential shall not be disclosed by the Inspectors (and the Inspectors shall confirm their agreement in writing in advance to the Company if the Company shall so request) unless (x) the disclosure of such Records is necessary, in the Company’s reasonable judgment, to avoid or correct a misstatement or omission in the Registration Statement, (y) the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction after exhaustion of all appeals therefrom or (z) the information in such Records was known to the Inspectors on a non-confidential basis prior to its disclosure by the Company or has been made generally available to the public.  Each seller of Registrable Securities agrees that it shall, upon learning that disclosure of such Records is sought in a court of competent jurisdiction, promptly give notice to the Company and allow the Company, at the Company’s expense, to undertake appropriate action to prevent disclosure of the Records deemed confidential;

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(ix)             if such sale is pursuant to an underwritten offering, obtain a “cold comfort” letter dated the effective date of the Registration Statement and the date of the closing under the underwriting agreement from the Company’s independent registered public accounting firm in customary form and covering such matters of the type customarily covered by “cold comfort” letters as the managing underwriter reasonably requests;

(x)               furnish, at the request of any seller of Registrable Securities on the date such securities are delivered to the underwriters for sale pursuant to such registration, an opinion, dated such date, of counsel representing the Company for the purposes of such registration, addressed to the underwriters, covering such legal matters with respect to the registration in respect of which such opinion is being given as the underwriters, may reasonably request and are customarily included in such opinions;

(xi)             cause any Shares included in the Registration Statement to be listed on each securities exchange on which the Shares are then listed. The Company shall pay all fees and expenses in connection with satisfying its obligation to list such Shares.

(xii)            make all required filings of all Prospectuses and Free Writing Prospectuses with the Commission;

(xiii)         make all required filing fee payments in respect of any Registration Statement or Prospectus used under this Agreement (and any offering covered thereby); and

(xiv)           take all other steps reasonably necessary to effect the registration of the Registrable Securities contemplated hereby.

(c)                 Seller Requirements.  In connection with any offering under any Registration Statement under this Agreement, each Shareholder (i) shall promptly furnish to the Company in writing such information with respect to the Shareholder and the intended method of disposition of its Registrable Securities as the Company may reasonably request or as may be required by law or regulations for use in connection with any related Registration Statement or Prospectus (or amendment or supplement thereto) and all information required to be disclosed in order to make the information previously furnished to the Company by the Shareholder not contain a material misstatement of fact or necessary to cause such Registration Statement or Prospectus (or amendment or supplement thereto) not to omit a material fact with respect to the Shareholder necessary in order to make the statements therein not misleading; (ii) shall comply with the Securities Act and the Exchange Act and all applicable state securities laws and comply with all applicable regulations in connection with the registration and the disposition of the Registrable Securities; and (iii) shall not use any Free Writing Prospectus without the prior written consent of the Company.  If any seller of Registrable Securities fails to provide such information required to be included in such Registration Statement by applicable securities laws or otherwise necessary or desirable in connection with the disposition of such Registrable Securities, within ten (10) calendar days after written request therefor, the Company may exclude such seller’s Registrable Securities from the registration statement.

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(d)                 Exception for Valid Business Reason.  Notwithstanding any other provision of this Section 3, if the Board of Directors of the Company, in its good faith judgment, determines that any registration of Registrable Securities should not be made or continued because it would materially interfere with any material financing, acquisition, reorganization or merger or other transaction involving the Company or require the Company to disclose any material nonpublic information which would reasonably be likely to be detrimental to the Company (a “Valid Business Reason”), (x) the Company may postpone filing a Registration Statement (but not the preparation of the Registration Statement) until the occurrence of the Valid Business Reason or until the Valid Business Reason no longer exists, and (y) in case a Registration Statement has been filed, the Company may postpone amending or supplementing such Registration Statement or requesting that the Registration Statement become effective under the Securities Act.  The Company shall give written notice to all Shareholders of its determination to postpone filing, amending, supplementing, requesting effectiveness of a Registration Statement, and of the fact that the Valid Business Reason for such postponement no longer exists, in each case, promptly after the occurrence thereof.

(e)                 Notice to Discontinue.  Each Shareholder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(b)(v)(D), the Shareholder shall forthwith discontinue disposition of Registrable Securities pursuant to the Registration Statement covering such Registrable Securities until the Shareholder’s receipt of the copies of the supplemented or amended Prospectus or Free Writing Prospectus contemplated by Section 3(b)(vi) (or if no supplemental or amended prospectus or Free Writing Prospectus is required, upon confirmation from the Company that use of the Prospectus or Free Writing Prospectus is once again permitted) and, if so directed by the Company, the Shareholder shall deliver to the Company (at the Company’s expense) all copies, other than permanent file copies then in the Shareholder’s possession, of the Prospectus or Free Writing Prospectus covering such Registrable Securities which is current at the time of receipt of such notice.

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(f)                  Registration Expenses.  The Company shall pay all expenses arising from or incident to its performance of, or compliance with, this Agreement, including, without limitation, (i) Commission filing fees, (ii) all fees and expenses incurred in complying with state securities or “blue sky” laws (including reasonable fees, charges and disbursements of counsel to any underwriter incurred in connection with “blue sky” qualifications of the Registrable Securities as may be set forth in any underwriting agreement), (iii) all printing, messenger and delivery expenses, and (iv) the fees, charges and expenses of counsel to the Company and of its independent registered public accounting firm and any other accounting fees, charges and expenses incurred by the Company (including, without limitation, any expenses arising from any “cold comfort” letters and the reasonable and documented legal fees, charges and expenses of Shareholder’s Counsel and regardless of whether such Registration Statement is declared effective.  All of the expenses described in the preceding sentence of this Section 3(f) are referred to herein as “Registration Expenses”.

	
4.

	
Indemnification; Contribution

(a)                 Indemnification by the Company.  The Company agrees to indemnify and hold harmless the Shareholders, and each of their respective partners, directors, officers, Affiliates, stockholders, members, employees, trustees, legal counsel and accountants and each Person who controls (within the meaning of Section 15 of the Securities Act) any Shareholder, from and against any and all losses, claims, damages, liabilities and expenses, or any action or proceeding in respect thereof (including reasonable costs of investigation and reasonable attorneys’ fees and expenses) (each, a “Liability” and collectively, “Liabilities”), arising out of or based upon (a) in the case of the Registration Statement or any amendment thereto, the Disclosure Package, the Prospectus, any Free Writing Prospectus, or in any supplement thereto, any untrue, or allegedly untrue, statement of a material fact or omission, or alleged omission, to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and (b) any violation or alleged violation by the Company of the Securities Act, the Exchange Act or any state securities law, or any rule or regulation thereunder, in connection with the performance of its obligations under this Agreement; provided, however, that the Company shall not be held liable in any such case to the extent that any such Liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission contained in such Disclosure Package, Registration Statement, Prospectus, Free Writing Prospectus or such amendment or supplement thereto solely in reliance upon and in conformity with information concerning any Shareholder furnished in writing to the Company by or on behalf of a Shareholder expressly for use therein, including, without limitation, the information furnished to the Company pursuant to Section 3(c).  The Company shall also provide customary indemnities to any underwriters of the Registrable Securities, their officers, directors and employees and each Person who controls such underwriters (within the meaning of Section 15 of the Securities Act) to the same extent as provided above with respect to the indemnification of the Shareholders.

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(b)                 Indemnification by Shareholders.  In connection with any offering in which any Shareholder is participating pursuant to this Agreement, each participating Shareholder agrees severally to indemnify and hold harmless the Company, any underwriter retained by the Company, each of their respective partners, directors, officers, Affiliates, stockholders, managers, members, employees, trustees, legal counsel and accountants, and each Person who controls the Company or such underwriter (within the meaning of Section 15 of the Securities Act) to the same extent as the foregoing indemnity from the Company to the Shareholders, but only to the extent that Liabilities arise out of or are based upon a statement or alleged statement or an omission or alleged omission that was made solely in reliance upon and in conformity with information with respect to such Shareholder furnished in writing to the Company by or on behalf of the Shareholder expressly for use in such Disclosure Package, Registration Statement, Prospectus, Free Writing Prospectus or such amendment or supplement thereto, including, without limitation, the information furnished to the Company pursuant to Section 3(c).  In no event shall the liability of a Shareholder hereunder be greater in amount than the net proceeds received by the Shareholder upon the sale of the Registrable Securities giving rise to such indemnification obligation except in the case of fraud by the Shareholder.

 

(c)                 Conduct of Indemnification Proceedings.  Any Person entitled to indemnification or contribution hereunder (the “Indemnified Party”) agrees to give prompt written notice to the indemnifying party (the “Indemnifying Party”) after the receipt by the Indemnified Party of any written notice of the commencement of any action, suit, proceeding or investigation or threat made in writing for which the Indemnified Party intends to claim indemnification or contribution pursuant to this Agreement; provided, however, that the failure to so notify the Indemnifying Party shall not relieve the Indemnifying Party of any Liability that it may have to the Indemnified Party hereunder (except to the extent that the Indemnifying Party is materially prejudiced or otherwise forfeits substantive rights or defenses by reason of such failure).  If notice of commencement of any such action is given to the Indemnifying Party as provided in this Section 4(c), the Indemnifying Party shall be entitled to participate in and, to the extent it may wish, jointly with any other Indemnifying Party similarly notified, to assume the defense of such action at its own expense, with counsel chosen by it and reasonably satisfactory to such Indemnified Party.  Each Indemnified Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the reasonable and documented out‐of‐pocket fees and expenses of such counsel shall be paid by the Indemnified Party unless (i) the Indemnifying Party agrees to pay the same, (ii) the Indemnifying Party fails to assume the defense of such action with counsel reasonably satisfactory to the Indemnified Party or (iii) the named parties to any such action (including any impleaded parties) include both the Indemnifying Party and the Indemnified Party and such parties have been advised by such counsel that either (x) representation of such Indemnified Party and the Indemnifying Party by the same counsel would be inappropriate under applicable standards of professional conduct or (y) there may be one or more legal defenses available to the Indemnified Party which are different from or additional to those available to the Indemnifying Party.  In any of such cases, the Indemnifying Party shall not have the right to assume the defense of such action on behalf of such Indemnified Party, it being understood, however, that the Indemnifying Party shall not be liable for the reasonable and documented out‐of‐pocket fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) for all Indemnified Parties and all such reasonable and documented out‐of‐pocket fees and expenses shall be reimbursed as incurred.  No Indemnifying Party shall be liable for any settlement entered into without its written consent, which consent shall not be unreasonably withheld.  No Indemnifying Party shall, without the consent of such Indemnified Party, effect any settlement of any pending or threatened proceeding in respect of which such Indemnified Party is a party and indemnity has been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Party from all liability for claims that are the subject matter of such proceeding.

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(d)                Contribution.  (i)  If the indemnification provided for in this Section 4 from the Indemnifying Party is unavailable to an Indemnified Party hereunder or insufficient to hold harmless an Indemnified Party in respect of any Liabilities referred to herein, then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Liabilities in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions which resulted in such Liabilities, as well as any other relevant equitable considerations.  The relative faults of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action.  The amount paid or payable by a party as a result of the Liabilities referred to above shall be deemed to include, subject to the limitations set forth in Sections 4(a), 4(b), and 4(c) , any reasonable and documented out‐of‐pocket legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding.

(ii)                The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 4(d)) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph.  No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.  In no event shall a Shareholder be required to contribute an amount under this Section 4(d) in excess of the net proceeds received by the Shareholder upon the sale of the Shareholder’s Registrable Securities pursuant to the Registration Statement giving rise to such contribution obligation, except in the case of fraud by the Shareholder.

	
5.

	
Reports Under Exchange Act

(a)                 With a view to making available to the Shareholders the benefits of Rule 144 promulgated under the Securities Act and any other rule or regulation of the Commission that may at any time permit the Shareholders to sell Registrable Shares of the Company to the public without registration, the Company agrees for the period of at least one year from the date hereof, to:

(i)                Make and keep public information available, as those terms are used in Rule 144, at all times;

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(ii)              File with the Commission in a timely manner all reports and other documents required of the Company under the Exchange Act and the rules and regulations of any applicable securities exchanges;

(iii)            Furnish to the Shareholders, so long as the Shareholders own any Registrable Shares, forthwith on request, (i) a written statement by the Company that it has complied with the reporting requirements of Rule 144 and the Exchange Act, and (ii) a copy of the most recent annual or quarterly report of the Company filed under the Exchange Act; and

(iv)              Undertake any additional actions reasonably necessary to maintain the availability of the use of Rule 144 for the resale of the Registrable Securities.

	
6.

	
Miscellaneous

(a)                 Share Splits, etc.  The provisions of this Agreement shall be appropriately adjusted for any share dividends, splits, reverse splits, combinations recapitalizations and the like occurring after the date.

(b)                Amendments and Waivers.  Except as otherwise provided herein, the provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions may not be given unless consented to in writing by the Company and the Shareholders.

(c)                 Notices.  All notices, demands and other communications provided for or permitted hereunder shall be made in writing and shall be made by telecopy, electronic mail, air courier service or personal delivery:

 

	
If to the Company:

	
Asterias Biotherapeutics, Inc.

	
 

	
230 Constitution Drive

	
 

	
Menlo Park, California 95402

	
 

	
Attention:  Robert Peabody, Chief Financial Officer

	
 

	
rpeabody@biotimemail.com

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with a copy to:

	
 

	
Thompson, Welch, Soroko & Gilbert LLP

	
 

	
235 Pine Street, 13th Floor

	
 

	
San Francisco, California 94104

	
 

	
Attention:  Richard S. Soroko

	
 

	
rsoroko@twsglaw.com

 

If to a Shareholder, at the most recent address for such Shareholder as shown in the Company’s register of its stockholders.

All such notices, demands and other communications shall be deemed to have been duly given when delivered in the manner provided in this Section 6(c).  Any party may by notice given in accordance with this Section 6(c) designate another address or Person for receipt of notices hereunder.

(d)                Permitted Assignees; Third Party Beneficiaries.  This Agreement shall inure to the benefit of and be binding upon the Company and the Shareholders (including the Permitted Assignees and Pledgees of Shareholders as provided in Section 2(d)(i)), and, except as provided in Section 4, no other Person is intended to be a beneficiary of this Agreement.

(e)                 Counterparts.  This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

(f)                  Headings.  The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning.

(g)                Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the state of California, without regard to the principles of conflicts of law.

(h)                Jurisdiction.  (i)  Any action or proceeding against any party hereto relating in any way to this Agreement or the transactions contemplated hereby may be brought and enforced in the federal or state courts in the State of California, and each party, on behalf of itself and its respective successors and assigns, irrevocably consents to the jurisdiction of each such court in respect of any such action or proceeding.  Each party, on behalf of itself and its respective successors and assigns, irrevocably consents to the service of process in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, return receipt requested, to such person or entity at the address for such person or entity set forth in Section 6(c) or such other address such person or entity shall notify the other in writing.  The foregoing shall not limit the right of any person or entity to serve process in any other manner permitted by law or to bring any action or proceeding, or to obtain execution of any judgment, in any other jurisdiction.

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(ii)                Each party, on behalf of itself and its respective successors and assigns, hereby irrevocably waives any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising under or relating to this Agreement or the transactions contemplated hereby in any court located in the State of California or located in any other jurisdiction chosen by the Company in accordance with Section 6(h)(i).  Each party, on behalf of itself and its respective successors and assigns, hereby irrevocably waives any claim that a court located in the State of California is not a convenient forum for any such action or proceeding.

(iii)              Each party, on behalf of itself and its respective successors and assigns, hereby irrevocably waives, to the fullest extent permitted by applicable United States federal and state law, all immunity from jurisdiction, service of process, attachment (both before and after judgment) and execution to which it might otherwise be entitled in any action or proceeding relating in any way to this Agreement or the transactions contemplated hereby in the courts of the State of California, of the United States or of any other country or jurisdiction, and hereby waives any right he might otherwise have to raise or claim or cause to be pleaded any such immunity at or in respect of any such action or proceeding.

(i)                  Severability.  If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions  shall not be in any way impaired.

(j)                  Rules of Construction.  Unless the context otherwise requires, references to sections or subsections refer to sections or subsections of this Agreement.  Terms defined in the singular have a comparable meaning when used in the plural, and vice versa.

(k)                 Entire Agreement.  This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto with respect to the subject matter.  There are no restrictions, promises, representations, warranties or undertakings with respect to the subject matter, other than those set forth or referred to herein.  This Agreement supersedes all prior agreements and understandings among the parties with respect to such subject matter.

(l)                   Further Assurances.  Each of the parties shall execute such documents and perform such further acts as may be reasonably required or desirable to carry out or to perform the provisions of this Agreement.

(m)               Other Agreements.  Nothing contained in this Agreement shall be deemed to be a waiver of, or release from, any obligations any party hereto may have under, or any restrictions on the transfer of Registrable Securities or other securities of the Company imposed by, any other agreement.

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IN WITNESS WHEREOF, the undersigned have executed, or have caused to be executed, this Registration Rights Agreement on the date first written above.

ASTERIAS BIOTHERAPEUTICS, INC.

 

	
By:

	
s/Pedro Lichtinger

	
 

	
 

	
Pedro Lichtinger

	
 

	
Title: President and Chief Executive Officer

	
 

	
SHAREHOLDERS:

	
 

	
 

	
 

	
s/Jay J. Miller

	
 

	
Jay J. Miller, Trustee of the

	
 

	
George Karfunkel 2007 Grantor Trust #1

	
 

	
Broadwood Partners, L.P.

	
 

	
 

	
 

	
 

	
 

	
By:

	
Broadwood Capital, Inc.

	
 

	
 

	
General Partner

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
s/Neal C. Bradsher

	
 

	
 

	
 

	
Neal C. Bradsher

	
 

	
 

	
Title:   President

	
 

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ANNEX A

[Name and Address of Transferee]

________

[Address]

[Name and Address of Transferor]

________, 20__

Ladies and Gentlemen:

Reference is made to the Registration Rights Agreement, dated as of June __, 2014 (the “Registration Rights Agreement”), by and among Asterias Biotherapeutics, Inc., a Delaware corporation, and the persons named therein as Shareholders.  All capitalized terms used herein but not otherwise defined shall have the meanings given to them in the Registration Rights Agreement.

In connection with the transfer by [Name of Transferor] of Registrable Securities with associated registration rights under the Registration Rights Agreement to [Name of Transferee] as transferee (the “Transferee”), the Transferee hereby agrees to be bound as a Shareholder by the provisions of the Registration Rights Agreement as provided under Section 2(d)(i)) thereto. 

This consent shall be governed by California law.

 

	
 

	
Yours sincerely,

	
 

	
 

	
 

	
 

	
 

	
[Name of Transferee]

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
    

	
 

	
 

	
 

	
Name:

	
 

	
 

	
 

	
Title:

	
 

17

SCHEDULE I

Shareholders

Jay J. Miller, Trustee of the George Karfunkel 2007 Grantor Trust #1

Broadwood Partners, L.P.

 

 

18

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