Form 10-Q Asterias Biotherapeutics For: Sep 30

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See also Note 12.

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11.	Shared Facilities and Service Agreement

On April 1, 2013, Asterias and BioTime executed a Shared Facilities and Services Agreement (Shared Facilities Agreement). Under the terms of the Shared Facilities Agreement, BioTime will allow Asterias to use its premises and equipment located at Alameda, California for the sole purpose of conducting business. BioTime will provide basic accounting, billing, bookkeeping, payroll, treasury, collection of accounts receivable (excluding the institution of legal proceedings or taking of any other action to collect accounts receivable), payment of accounts payable, and other similar administrative services to Asterias. BioTime may also provide the services of attorneys, accountants, and other professionals who may also provide professional services to BioTime and its other subsidiaries. BioTime will also provide Asterias with the services of its laboratory and research personnel, including BioTime employees and contractors, for the performance of research and development work for Asterias at the premise.

BioTime will charge Asterias a fee for the services and usage of facilities, equipment, and supplies aforementioned. For each billing period, BioTime will equitably prorate and allocate its employee costs, equipment costs, insurance costs, lease costs, professional costs, software costs, supply costs, and utilities costs, between BioTime and Asterias based upon actual documented use and cost by or for Asterias or upon proportionate usage by BioTime and Asterias, as reasonably estimated by BioTime. Asterias shall pay 105% of the allocated costs (the Use Fee). The allocated cost of BioTime employees and contractors who provide services will be based upon records maintained of the number of hours of such personnel devoted to the performance of services.

The Use Fee will be determined and invoiced to Asterias on a quarterly basis for each calendar quarter of each calendar year. If the Shared Facilities Agreement terminates prior to the last day of a billing period, the Use Fee will be determined for the number of days in the billing period elapsed prior to the termination of the Shared Facilities Agreement. Each invoice will be payable in full by Asterias within 30 days after receipt. Any invoice or portion thereof not paid in full when due will bear interest at the rate of 15% per annum until paid, unless the failure to make a payment is due to any inaction or delay in making a payment by BioTime employees from Asterias funds available for such purpose, rather than from the unavailability of sufficient funds legally available for payment or from an act, omission, or delay by any employee or agent of Asterias.

In addition to the Use Fees, Asterias will reimburse BioTime for any out of pocket costs incurred by BioTime for the purchase of office supplies, laboratory supplies, and other goods and materials and services for the account or use of Asterias, provided that invoices documenting such costs are delivered to Asterias with each invoice for the Use Fee. Furthermore, BioTime will have no obligation to purchase or acquire any office supplies or other goods and materials or any services for Asterias, and if any such supplies, goods, materials or services are obtained for Asterias, BioTime may arrange for the suppliers thereof to invoice Asterias directly.

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Asterias in turn may charge BioTime or any Other Subsidiary for similar services provided by Asterias at the same rate and terms as aforementioned. Other Subsidiary means a subsidiary of BioTime other than Asterias and other than a subsidiary of Asterias.

The Shared Facilities Agreement terminates on December 31, 2016, provided that, unless otherwise terminated under another provision of the Shared Facilities Agreement, the term of the Shared Facilities Agreement will automatically be renewed and the termination date will be extended for an additional year each year after December 31, 2016, unless either party gives the other party written notice stating that the Shared Facilities Agreement will terminate on December 31 of that year.

BioTime allocated $108,926 and $38,894 of general overhead expenses as well as $23,731 and $0 of research and development overhead to Asterias during the nine months ended September 30, 2014 and 2013, respectively. In addition, BioTime allocated $248,036 and $166,106 of salaries and related charges to general and administrative expenses, and $13,260 and $13,381 of salaries and related charges to research and development expenses, during the nine months ended September 30, 2014 and 2013, respectively.

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12.	Clinical Trial and Option Agreement

During September 2014,�Asterias entered into a Clinical Trial and Option Agreement (the CRUK Agreement) with Cancer Research UK (the Charity) and Cancer Research Technology Limited, (CRT), a wholly-owned subsidiary of the Charity, pursuant to which the Charity has agreed to fund Phase I/IIa clinical development of our AST-VAC2 product candidate. Asterias will, at�its own cost, complete process development and manufacturing scale-up of the AST-VAC2 manufacturing process and will transfer the resulting cGMP-compatible process to the Charity. The Charity will, at its own cost, manufacture clinical grade ASTVAC2 and will carry out the Phase I/IIa clinical trial of AST-VAC2 in cancer patients both resected early-stage and advanced forms of lung cancer. Asterias will have an exclusive first option to obtain a license to use the data from the clinical trial. If Asterias exercises that option Asterias will be obligated to make payments upon the execution of the License Agreement, upon the achievement of various milestones, and then royalties on sales of products. In connection with the CRUK Agreement, Asterias sublicensed to CRUK for use in the clinical trials and product manufacturing process certain patents that have been licensed or sublicensed to us by third parties. Asterias would also be obligated to make payments to those licensors and sublicensors upon the achievement of various milestones, and then royalties on sales of products if AST-VAC2 is successfully developed and commercialized.

13.	Subsequent Events

On October 1, 2014, Asterias completed the BioTime Warrants Distribution by distributing 8,000,000 BioTime Warrants on a pro rata basis to the holders of Asterias Series A common stock.

On October 3, 2014, the outstanding Series B Shares were converted into Series A Shares at the rate of one Series A Share for each Series B Share.

On October 8, 2014, Asterias Series A Shares began trading on the NYSE MKT under the ticker symbol AST.

On October 16, 2014 Asterias signed a Notice of Grant Award (NGA)�with the California Institute of Regenerative Medicine (CIRM), effective October 1, 2014, with respect to a $14.3 million CIRM grant award for clinical development of Asterias product, AST-OPC1. The NGA includes the terms under which CIRM will release grant funds to Asterias.�Asterias received the first payment� from CIRM in the amount of $916,554 during October 2014.

We evaluated subsequent events through the issuance date of the financial statements. We are not aware of any significant events, that occurred subsequent to the balance sheet date but prior to the filing of this Quarterly Report on Form 10-Q that would have a material impact on our financial statements.

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Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following Management's Discussion and Analysis of Financial Condition and Results of Operations is intended to provide information necessary to understand our unaudited interim condensed financial statements for the three and nine months ended September 30, 2014 and 2013 and for the period from September 24, 2012 (our date of inception) to September 30, 2014, and highlight certain other information which, in the opinion of management, will enhance a reader's understanding of our financial condition, changes in financial condition and results of operations. In particular, the discussion is intended to provide an analysis of significant trends and material changes in our financial position and the operating results of our business during the three and nine months ended September 30, 2014 as compared to the three and nine months ended September 30, 2013. This discussion should be read in conjunction with our Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2014 and 2013 and related notes included elsewhere in this Quarterly Report on Form 10-Q. These historical financial statements may not be indicative of our future performance. This Management's Discussion and Analysis of Financial Condition and Results of Operations contains a number of forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and risks described throughout this filing, particularly in "Risk Factors" in this Report and in our Annual Report on Form 10-K.

Overview

We are a biotechnology company focused on the emerging field of regenerative medicine. Our core technologies center on stem cells capable of becoming all of the cell types in the human body, a property called pluripotency. We plan to develop pluripotent stem-cell based therapies in neurology and oncology, including AST-OPC1 neural cells to treat spinal cord injury, multiple sclerosis and stroke, and AST-VAC2, a pluripotent stem cell-derived cancer vaccine.

Regenerative medicine refers to an emerging field of therapeutic product development that may allow all human cell and tissue types to be manufactured on an industrial scale. This new technology is made possible by the isolation of human embryonic stem (hES) cells, and by the development of induced pluripotent stem (iPS) cells which are created from regular cells of the human body using technology that allows adult cells to be reprogrammed into cells with pluripotency much like hES cells. Pluripotent hES and iPS cells have the unique property of being able to branch out into each and every kind of cell in the human body, including the cell types that make up the brain, the blood, the heart, the lungs, the liver, and other tissues. Unlike adult-derived stem cells that have limited potential to become different cell types, pluripotent stem cells may have vast potential to supply an array of new regenerative therapeutic products, especially those targeting the large and growing markets associated with age-related degenerative disease. Unlike pharmaceuticals that require a molecular target, therapeutic strategies in regenerative medicine are generally aimed at regenerating affected cells and tissues, and therefore may have broader applicability. We believe that regenerative medicine represents a revolution in the field of biotechnology with the promise of providing therapies for diseases previously considered incurable.

Business Strategy

By acquiring Gerons stem cell assets, we now have the use of cell lines and other biological materials, patents, and technology developed by Geron over 12 years of work focused in the following complementary areas:

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The establishment of cell banks of undifferentiated hES cells produced under current good manufacturing practices (cGMP) and suitable for the manufacture of differentiated cells for human therapeutic use;

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The development of scalable differentiation methods which convert, at low cost, undifferentiated hES cells into functional cells suitable for human therapeutic use that can be stored and distributed in the frozen state for off-the-shelf use;

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The development of regulatory paradigms that we believe will be sufficient to satisfy both U.S. and European regulatory authority requirements to begin human clinical testing of products made from hES cells; and

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The continuous filing and prosecution of patents covering inventions to protect commercialization rights, as well as consummating in-licenses to enable freedom to operate in a variety of fields.

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Products under Development

The initial product candidates that we plan to develop from various cell types that we acquired from Geron are summarized in the following table:

� Product Candidate Description	�	Target Market	�	Estimated Number of Potential Patients⁽¹⁾	�	Status
AST-OPC1 Glial Cells		Current development focus:		�		�
�		Spinal Cord Injury (SCI)		12,000 new cases per year in U.S.		Phase I Trial in thoracic SCI completed in U.S. 5 Patients treated no serious adverse events related to the OPC1 drug product to date. FDA clearance obtained in August 2014 to initiate Phase I/IIa dose escalation trial in cervical SCI.
�		Additional potential markets:		�		�
�		Multiple Sclerosis (MS)		180,000 new cases per year in U.S.		Proof of principle achieved in animal models.
�		�		�		�
�		Stroke		800,000 new cases per year in U.S.		Pre-clinical research.
�		�		�		�
AST-VAC2 Dendritic Cells		Current development focus:		�		�
�		Non-small Cell Lung Cancer		166,000 new cases per year in U.S.		Cells derived and characterization studies performed (parameters analyzed showed normal cell functions in vitro⁽²⁾). Proof of concept established in multiple human in vitro⁽²⁾ systems. Scalable manufacturing methods under development.
�		Additional potential markets:		�		�
�	�	Multiple cancer types	�	�	�	�

(1)	The estimates of the numbers of potential patients shown in the table are based on data for the United States only and do not include potential patients in other countries.

(2)	In vitro means in tissue culture dishes.

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Additional product candidates that we may determine to develop from various cell types that we acquired from Geron are summarized in the following table:

Product Candidate Description	�	Target Market	�	Estimated Number of Potential Patients⁽¹⁾	�	Status
AST-VAC1 Autologous Monocyte Derived Dendritic Cells (infused cells derived from the treated patient)		Cancer		Prostate: 240,000 new cases per year in U.S.		Phase I study in metastatic prostate cancer completed (Journal of Immunology, 2005, 174: 3798-3807).
�		�		Acute myelogenous leukemia: more than 12,000 new cases per year in U.S.		Phase I/II study in acute myelogenous leukemia completed. Manuscript in preparation.
�		�		�		�
CHND1 Chondrocytes		Osteoarthritis		25 million total patients in U.S.		Cells derived and partly characterized.
�		�		�		�
�		�		�		Early non-clinical studies have been performed in animal models of osteoarthritis.
�		�		�		�
�		Degenerative Disk Disease		400,000 new spinal fusion cases per year in U.S.		Pre-clinical research.
�		�		�		�
CM1 Cardiomyocytes		Heart Failure		6 million total patients in U.S.		Cells derived and characterization studies performed (parameters analyzed showed normal cell functions in vitro).
�		�		�		�
�		Myocardial Infarction		900,000 new cases per year in U.S.		Proof of concept in three animal models of disease.
�		�		�		Scalable manufacturing established.
�	�	�	�	�	�	First in man clinical trial designed.

(1)	The estimates of the numbers of potential patients shown in the table are based on data for the United States only and do not include potential patients in other countries.

Additional Information

We were incorporated in September 2012 under the name BioTime Acquisition Corporation in the state of Delaware. We changed our name to Asterias Biotherapeutics, Inc. in March 2013. Our principal executive offices are located at 230 Constitution Drive, Menlo Park, California 94025. Our telephone number is (650) 433-2900. We currently maintain an Internet website at�www.asteriasbiotherapeutics.com.

We are an "emerging growth company," as defined in the Jumpstart Our Business Startups Act of 2012. We will remain an "emerging growth company" until the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of our first sale of common equity securities, such as our common stock, pursuant to an effective registration statement under the Securities Act; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the Securities and Exchange Commission (the SEC). We refer to the Jumpstart Our Business Startups Act of 2012 herein as the "JOBS Act," and references herein to "emerging growth company" shall have the meaning associated with it in the JOBS Act.

Critical Accounting Policies

Development Stage Company We comply with the reporting requirements of ASC 915, Development Stage Entities.

Revenue recognition We comply with ASC 605-10 and record revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable, and collectability is reasonably assured. Royalty revenues consist of royalty payments on sales of products under a license agreement. We recognize revenue in the quarter in which the royalty reports are received rather than the quarter in which the sales took place. When we are entitled to receive up-front nonrefundable licensing or similar fees pursuant to agreements under which we have no continuing performance obligations, the fees are recognized as revenues when collection is reasonably assured. When we receive up-front nonrefundable licensing or similar fees pursuant to agreements under which we do have continuing performance obligations, the fees are deferred and amortized ratably over the performance period. If the performance period cannot be reasonably estimated, we amortize nonrefundable fees over the life of the contract until such time that the performance period can be more reasonably estimated. Milestone payments, if any, related to scientific or technical achievements are recognized in income when the milestone is accomplished if (a) substantive effort was required to achieve the milestone, (b) the amount of the milestone payment appears reasonably commensurate with the effort expended, and (c) collection of the payment is reasonably assured.

Intangible assets Intangible assets with finite useful lives are amortized over estimated useful lives and intangible assets with indefinite lives are not amortized but rather are tested at least annually for impairment. Acquired in-process research and development intangible assets are accounted depending on whether they were acquired as part of an acquisition of a business, or assets that do not constitute a business. When acquired in conjunction with acquisition of a business, these assets are considered to be indefinite-lived until the completion or abandonment of the associated research and development efforts and are capitalized as an asset. If and when development is complete, the associated assets would be deemed finite-lived and would then be amortized based on their respective estimated useful lives at that point in time. However, when acquired in conjunction with an acquisition of assets that do not constitute a business (such as our acquisition of assets from Geron), in accordance with the accounting rules in ASC 805-50, such intangible assets related to in process research and development (IPR&D) are expensed upon acquisition.

Impairment of long-lived assets Our long-lived assets, including tangible assets, will be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. If an impairment indicator is present, we will evaluate recoverability by a comparison of the carrying amount of the assets to future undiscounted net cash flows expected to be generated by the assets. If the assets are impaired, the impairment will be recognized and measured by the amount by which the carrying amount exceeds the estimated fair value of the assets.

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Results of Operations

For the three and nine months ended September 30, 2014, we recorded a net loss of $1,682,283 and $6,770,790, respectively.

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The following tables show on a comparative basis the amounts of our research and development and general and administrative expenses for the three and nine month periods ended September 30, 2014 and 2013.

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Three Months Ended September 30,

�

$ Increase/

�

% Increase/

�

2014

�

2013

�

Decrease

�

Decrease

�

Research and development expenses

�

2,568,214

�

1,149,059

�

1,419,155

�

123.51

�

General and administrative expenses

�

1,468,754

�

1,523,732

�

(54,978

)

�

(3.61

)

�

Nine Months Ended September 30,

�

$ Increase/

�

% Increase/

�

2014

�

2013

�

Decrease

�

Decrease

�

Research and development expenses

�

7,910,097

�

1,931,048

�

5,979,049

�

309.63

�

General and administrative expenses

�

4,107,888

�

2,888,028

�

1,219,860

�

42.24

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Research and development expenses �Our total research and development expenses for the three and nine months ended September 30, 2014 amounted to $2,568,214 and $7,910,097, respectively, compared to $1,149,059 and $1,931,048 in the same periods in 2013, respectively.

The increase in research and development expenses by $1,419,155 to $2,568,214 for the three month period ended September 30, 2014 compared to $1,149,059 for the three months ended September 30, 2013. The increase for the three month period is the result of the ramp-up from our operations following our acquisition of stem cell assets from Geron and BioTime on October 1, 2013 and approval of a $14.3 million grant from the California Institute for Regenerative Medicine (CIRM) during May 2014 to fund a portion of our AST-OPC1 development work. The increase in research and development expenses primarily reflects an increase of $444,889 in employee compensation and related costs, including stock-based compensation, allocated to research and development expenses, and $725,425 of amortization of the value of stem cell assets acquired from Geron. The increase in employee compensation reflects the hiring of additional management and scientific personnel, and certain executives and other employees who had been employed on a part-time basis in Q3 2013 becoming employed by us on a full-time basis. Other components of the increase in research and development expenses were: an increase of $194,921 in license and patent fees that we assumed from Geron and settled during May 2014, an increase of $70,457 in depreciation expenses allocated to research and development expenses, and an increase of $57,428 in contract manufacturing expenses.

Research and development increased by $5,979,049 to $7,910,097 for the nine month period ended September 30, 2014 compared to $1,931,048 for the nine months ended September 30, 2013. The increase is the result of substantially the same factors that led to an increase in research and development expenses for the three months ended September 30, 2014. The increase in research and development expenses primarily reflects an increase of $2,014,261 in employee compensation and related costs, including stock-based compensation, allocated to research and development expenses, and an increase of $2,176,276 of amortization of the value of stem cell assets acquired from Geron. The increase in employee compensation reflects the hiring of additional management and scientific personnel, and certain executives and other employees who had been employed on a part-time basis during the first half of 2013 becoming employed by us on a full-time basis. Other components of the increase in research and development expenses were: an increase of $718,892 in license and patent fees and patent related litigation fees related primarily to the certain patent interference proceedings that we assumed from Geron but settled during May 2014, an increase of $307,183 in outside research and service fees, an increase of $276,798 in depreciation expenses allocated to research and development expenses, an increase of $185,243 in laboratory expenses and supplies, an increase of $72,890 in rent and facilities maintenance related expenses allocated to research and development expenses, an increase of $71,444 in contract manufacturing related expenses, an increase of $43,698 in travel, meals and lodging expenses allocated to research and development expenses.

General and administrative expenses General and administrative expenses decreased by $54,978 to $1,468,754 for the three month period ended September 30, 2014 compared to $1,523,732 for the three months ended September 30, 2013. The decrease reflects in part certain non-recurring costs incurred during the third quarter of 2013 relating to our acquisition of assets from Geron and BioTime. The decrease in general and administrative expenses is primarily attributable to a decrease of $110,556 in legal expenses, a decrease of $67,000 in accounting, audit, and tax services, a decrease of $44,260 in stock-based compensation to directors, and a decrease of $142,738 in employee stock-based compensation allocated to general and administrative expenses, which is offset by an increase of $103,465 in salaries and payroll related costs allocated to general and administrative expenses, an increase of $94,981 in investor and public relations related expenses, stock listing and filing fees, an increase of $56,869 in rent, utilities and facilities maintenance related expenses allocated to general and administrative expenses, and $40,594 in state corporation and franchise taxes.

General and administrative expenses increased by $1,219,860 to $4,107,888 for the nine month period ended September 30, 2014 compared to $2,888,028 for the nine months ended September 30, 2013. The increase of general and administrative expenses during the nine months ended September 30, 2014 is primarily comprised of an increase of $1,018,448 in employee compensation, including stock-based compensation, and related costs allocated to general and administrative expenses, an increase of $184,963 in state corporate and franchise taxes, an increase of $144,981 in accounting and tax services, an increase of $107,669 in investor and public relat5ions related expenses, stock listing and filing fees, an increase of $83,395 in rent and facilities maintenance expense, and an increase of $55,056 in general consulting expenses. These increases were offset in part by a decrease of $428,903 in legal expenses.

Income Taxes

In June 2014, Asterias sale of BioTime shares resulted in a taxable gain of approximately $10.3 million and a tax payable of $3.6 million. This payable, however, is expected to be fully offset by available net operating losses thus, resulting in no cash income taxes due from that sale. As of September 30, 2014, Asterias recorded a $4.1 million deferred tax liability for the temporary taxable difference in the basis of the investment still held by Asterias in BioTime stock. Both transactions were treated as a deemed distribution by Asterias and recorded against equity.

Liquidity and Capital Resources

At September 30, 2014, we had $5,025,499 of cash and cash equivalents on hand and we held 3,852,880�BioTime common shares, with a market value of approximately $12,100,043 on that date. We received $12,660,908 in proceeds from the sale of 5,049,197 of our BioTime common shares during June 2014. See Cash provided by financing activities below.

We may raise capital from time to time through the sale of the BioTime common shares. We may sell our BioTime common shares, from time to time, by any method that is deemed to be an at-the-market equity offering as defined in Rule 415 promulgated under the Securities Act, including sales made directly on or through the NYSE MKT or any other existing trading market for the common shares in the U.S. or to or through a market maker, at prices related to the prevailing market price, or through block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction, or through one more of the foregoing transactions. We expect to sell the BioTime common shares through Cantor Fitzgerald & Co. or such other broker-dealer as BioTime may designate. We may also sell BioTime common shares by any other method permitted by law, including in privately negotiated transactions. We will bear all broker-dealer commissions payable in connection with the sale of the BioTime common shares. Broker-dealers may receive commissions or discounts from us (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated.

We have been awarded a $14.3 million Strategic Partnership III grant by CIRM to help fund our clinical development of AST-OPC1. The grant will provide funding for us to conduct a Phase 1/2a clinical trial of AST-OPC1 in subjects with complete cervical spinal cord injury, to expand clinical testing of escalating doses in the target population intended for future pivotal trials, and for product development efforts to refine and scale manufacturing methods to support eventual commercialization. On August 21, 2014, we received notice from the FDA of clearance to initiate a Phase 1/2a clinical trial of our product, AST-OPC1, in patients with complete cervical spinal cord injury. The approved trial follows the successful completion of the Phase 1 clinical study of the product, and is designed to assess safety and activity of escalating doses of AST-OPC1 in patients with complete cervical spinal cord injuries, the first targeted indication for AST-OPC1. On October 16, 2014, we signed the Notice of Grant Award with CIRM, effective October 1, 2014. The NGA provides for the immediate release of Clinical Development payments and the release of additional grant funds pursuant to the previously announced $14.3 million CIRM grant award for clinical development of Asterias product, AST-OPC1.�CIRM will disburse the grant funds to us over four years in accordance with a quarterly disbursement schedule, subject to our attainment of certain progress and safety milestones. Asterias received the first payment� from CIRM during October 2014 in the amount of $916,554.

During September 2014, we entered into a Clinical Trial and Option Agreement (the CRUK Agreement) with Cancer Research UK (the Charity) and Cancer Research Technology Limited, (CRT), a wholly-owned subsidiary of the Charity, pursuant to which the Charity has agreed to fund Phase I/IIa clinical development of our AST-VAC2 product candidate. We will, at our own cost, complete process development and manufacturing scale-up of the AST-VAC2 manufacturing process and will transfer the resulting cGMP-compatible process to the Charity. The Charity will, at its own cost, manufacture clinical grade AST-VAC2 and will carry out the Phase I/IIa clinical trial of AST-VAC2 in cancer patients both resected early-stage and advanced forms of lung cancer. We will have an exclusive first option to obtain a license to use the data from the clinical trial. If we exercise that option we will be obligated to make payments upon the execution of the License Agreement, upon the achievement of various milestones, and then royalties on sales of products. In connection with the CRUK Agreement, we sublicensed to CRUK for use in the clinical trials and product manufacturing process certain patents that have been licensed or sublicensed to us by third parties. We would also be obligated to make payments to those licensors and sublicensors upon the achievement of various milestones, and then royalties on sales of products if AST-VAC2 is successfully developed and commercialized.

We have outstanding warrants to purchase 3,500,000 of our Series A Shares at an exercise price of $5 per share that will expire on September 30, 2016, and warrants to purchase 5,000,000 of our Series A Shares at an exercise price of $2.34 per share that will expire on June 15, 2015. We will receive $29,200,000 if all of the warrants are exercised. There can be no assurance that the warrants will be exercised.

We plan to use the cash we have available to develop certain of our product candidates and technology, including our planned clinical trial of AST-OPC1, to acquire new stem cell products and technology through licenses or similar agreements from other companies, and to pay general and administrative expenses. We expect to continue to incur operating losses and negative cash flows. BioTime contributed to the funding of our business activities from inception through September 30, 2014 but is not expected to do so in the future.

We will need to raise additional capital from time to time to pay operating expenses. We may raise additional capital through the issue and sale of shares of our common stock or preferred stock or other securities and through the sale of the BioTime common shares we hold. The prices at which we may issue and sell our securities and our BioTime common shares in the future are not presently determinable and will depend upon many factors, including prevailing prices for those securities in the public market.

As the distributions of the CIRM grant are subject to meeting certain progress and go/no-go milestones, there can be no assurance that we will receive the entire amount granted.

The unavailability or inadequacy of financing or revenues to meet future capital needs could force us to modify, curtail, delay, or suspend some or all aspects of our planned operations. Sales of additional equity securities could result in the dilution of the interests of our shareholders.

Cash provided by/(used in) operations

Since our inception, we have incurred losses from operations and negative cash flows from our operations. During the nine months ended September 30, 2014, our total research and development expenditures were $7,910,097 and our general and administrative expenditures were $4,107,888. Net loss for the nine months ended September 30, 2014 amounted to $6,770,790. We received $167,207 of cash during this period from royalty revenues on product sales by licensees. As of September 30, 2014 and December 31, 2013, we had a working capital surplus of $16,545,202 and $31,835,965, respectively, and an accumulated deficit of $29,909,427 and $23,138,637, respectively, based on our operating losses and the expensed IPR&D.

Net cash used in operating activities during this period amounted to $9,767,709. The difference between the net loss and net cash used in operating activities during the nine month ended September 30, 2014 was primarily attributable to amortization of intangible assets of $2,176,276, stock-based compensation paid to employees of $1,400,193, depreciation expense of $408,613, and accrued liabilities of $44,515. The overall difference was offset to some extent by $1,658,053 of our expenses paid by BioTime which is reflected in amount due to BioTime on our September 30, 2014 Condensed Statements of Cash Flows, accounts payable of $181,076, and by deferred income tax benefits of $5,174,977.

Investing and financing activities

During the nine months ended September 30, 2014, we used $200,253 in cash to purchase equipment and furniture, and paid $306,560 as security deposits for our leased facilities. During June 2014, we received $12,660,908 in proceeds from the sale of 5,049,197 our BioTime common shares, including 49,197 shares sold in open market transactions and 5,000,000 shares sold with warrants to purchase 5,000,000 Asterias Series A Shares to two investors for $12,500,000 in cash. The exercise price of the warrants is $2.34. The exercise price and the number of shares of Asterias common stock issuable upon the exercise of the warrants are subject to adjustment in the event of a stock split, stock dividend, combination of shares, recapitalization or certain other transactions. The warrants will expire on June 15, 2015 if not exercised by that date.

In June 2014, we also received $468,000 from the sale of 200,000 of our Series B shares to our newly appointed President and Chief Executive Officer for $2.34 per share.

Off-Balance Sheet Arrangements

As of September 30, 2014, and as of December 31, 2013, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Foreign Currency Exchange Risk

We are not presently exposed in a significant degree to foreign exchange currency risks because we are not conducting international business at this time, and we do not engage in foreign currency hedging activities. If we engage in international transactions, we will need to translate foreign currencies into U.S. dollars for reporting purposes, and currency fluctuations could have an impact on our financial results.

Credit Risk

We place some of our cash in U.S. banks and we invest the balance of our cash in money market funds. Deposits with banks may temporarily exceed the amount of insurance provided on such deposits. We will monitor the cash balances in the accounts and adjust the cash balances as appropriate, but if the amount of a deposit at any time exceeds the federally insured amount at a bank, the uninsured portion of the deposit could be lost, in whole or in part, if the bank were to fail. Our investments in money market funds are not insured or guaranteed by the United States government or any of its agencies.

Interest Rate Risk

We invest most of our cash in money market funds. The primary objective of our investments will be to preserve principal and liquidity while earning a return on our invested capital, without incurring significant risks. Our future investment income is not guaranteed and may fall short of expectations due to changes in prevailing interest rates, or we may suffer losses in principal if the net asset value of a money market fund falls below $1 per share.

Item 4.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, including our principal executive officer and principal financial officer, have reviewed and evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Following this review and evaluation, the principal executive officer and principal financial officer determined that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to management, including our principal executive officer, and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Controls

There were no changes in our internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1.

Legal Proceedings.

From time to time, we may be involved in routine litigation incidental to the conduct of our business. We are not presently involved in any other material litigation or proceedings, and to our knowledge no such litigation or proceedings are contemplated.

Item 1A.

Risk Factors

Our business is subject to various risks, including those described below. You should consider the following risk factors, together with all of the other information included in this report and the risks described in our Annual Report on Form 10-K for the year ended December 31, 2013, which could materially adversely affect our proposed operations, business prospects, and financial condition, and the value of an investment in our business. There may be other factors that are not mentioned here or of which we are not presently aware that could also affect our business operations and prospects.

We have a history of operating losses and negative cash flows

Since our inception in September 2012, we have incurred operating losses and negative cash flow, and we expect to continue to incur losses and negative cash flow in the future. Our net losses for the nine months ended September 30, 2014, for the fiscal year ended December 31, 2013, and for the period from September 2012 (inception) to September 30, 2014 were $6,770,790, $22,379,744, and $29,909,427, respectively, and we had an accumulated deficit of $29,909,427 at September 30, 2014 and $23,138,637 at December 31, 2013. Our net loss for the year ended December 31, 2013 and our accumulated deficit as of that date include $17,458,766 charged as in-process research and development expenses (IPR&D) in accordance with Accounting Standards Codification (ASC) 805-50 on account of our acquisition of certain assets from Geron. See Notes 2 and 3 to Interim Condensed Financial Statements. BioTime previously funded our formation and operating costs but we do not expect BioTime to continue to do so in the future. We have limited cash resources and will depend upon future equity financings, research grants, financings through collaborations with third parties, and sales of BioTime common shares that we own as a source of funding for our operations. There is no assurance that we will be able to obtain the financing we need from any of those sources, or that any such financing that may become available will be on terms that are favorable to us and our shareholders.

The condition of certain cells, cell lines and other biological materials that we acquired from Geron could impact the time and cost of commencing our research and product development programs

The cells, cell lines and other biological materials that we acquired are being stored under cryopreservation protocols intended to preserve their functionality. We have successfully completed the verification of the viability of three lots of OPC1 cells that we intend to use in clinical trials. However, the functional condition of the other materials cannot be certified until they are tested in an appropriate laboratory setting by qualified scientific personnel using validated equipment. We intend to perform that testing on the cells that we intend to use in our research and development programs as the need arises.

To the extent that the cells we plan to use are not sufficiently functional for our purposes, we would need to incur the time and expense of regenerating cell lines from cell banks, or regenerating cell banks from cell stocks, which could delay and increase the cost of our research and development work using those cells.

We have assumed certain obligations and potential liabilities with regard to clinical trials conducted by Geron, and we do not yet know the scope of any resulting expense

We have assumed Gerons obligations to obtain information and prepare reports about the health of patients who participated in clinical trials of Gerons GRNOPC1 cell replacement therapy for spinal cord damage and its GRNVAC1 immunological therapy for certain cancers. We have also assumed any liabilities to those patients that might arise as result of any injuries they may have incurred as a result of their participation in the clinical trials. We are not aware of any claims by patients alleging injuries suffered as a result of the Geron clinical trials, but if any claims are made and if liability can be established, the amount of any liability that we may incur, depending upon the nature and extent of any provable injuries incurred, could exceed any insurance coverage we may obtain and the amount of the liability could be material to our financial condition.-

Our business could be adversely affected if we lose the services of the key personnel upon whom we depend

Our stem cell research program will be directed primarily by our President and Chief Executive Officer Pedro Lichtinger and by our President of Research and Development, Dr. Jane S. Lebkowski. The loss of the services of Mr. Lichtinger or Dr. Lebkowski could have a material adverse effect on us.

BioTime owns a majority of our common stock and can elect all of our directors

Because BioTime owns a majority of the outstanding Series A Shares, it has the voting power to elect our entire Board of Directors. Presently, four of the eight members of our Board of Directors are also directors or officers of BioTime, and a fifth director is an employee of the investment manager of the largest shareholder of BioTime. Some of our directors also serve on the Boards of Directors of one or more of BioTimes other subsidiaries. The relationship of our directors with BioTime means that we will not have a Board of Directors making business decisions on our behalf independent from BioTime. Even those of our directors who do not serve on the BioTime Board of Directors will be elected to our Board of Directors by BioTime, and they may be removed from our Board by BioTime, as the majority shareholder.

You may experience dilution of your ownership interests because of the future issuance of additional shares of our common stock and our preferred stock

In the future, we may issue our authorized but previously unissued equity securities, resulting in the dilution of the ownership interests of our present shareholders. We are currently authorized to issue an aggregate of 150,000,000 shares of common stock, consisting of 75,000,000 Series A Shares and 75,000,000 Series B Shares. We are also authorized to issue 5,000,000 shares of blank check preferred stock. As of November 10, 2014, we had issued and outstanding 30,902,152 Series A Shares. We have also reserved 8,500,000 Series A Shares for issuance upon the exercise of outstanding warrants, and 4,500,000 Series A Shares for issuance under a stock option and stock purchase plan.

We may issue additional Series A Shares or other securities in order to raise additional capital, or in connection with hiring or retaining employees or consultants, or in connection with future acquisitions of licenses to technology or rights to acquire products, in connection with future business acquisitions, or for other business purposes. The future issuance of any such additional shares of common stock or other securities may create downward pressure on the trading price of our common stock.

We may also issue 5,000,000 shares of preferred stock having rights, preferences, and privileges senior to the rights of our common stock with respect to dividends, rights to share in distributions of our assets if we liquidate our company, or voting rights. Any preferred stock may also be convertible into Series A Shares on terms that would be dilutive to holders of common stock.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

Previously reported.

Item 3.

Default Upon Senior Securities.

None.

Item 4.

Mine Safety Disclosures

Not Applicable.

Item 5.

Other Information.

None.

Item 6.

Exhibits

Exhibit Numbers	Description
�	�
3.1	Amended and Restated Certificate of Incorporation (1)
�	�
3.2	Bylaws, as amended *
�	�
4.1	Warrant Agreement, dated June 16, 2014, by Asterias Biotherapeutics, Inc. for the benefit of certain warrant holders (2)
�	�
4.2	Form of Warrant (included in Exhibit 4.1) (2)
�	�
10.1	Clinical Trial and Option Agreement, dated September 8, 2014, between Asterias Biotherapeutics, Inc. and Cancer Research UK and Cancer Research Technology Limited (Portions of this exhibit have been omitted pursuant to a request for confidential treatment) +
�	�
31	Rule 13a-14(a)/15d-14(a) Certification.*
�	�
32	Section 1350 Certification.*
�	�
101	Interactive Data File
�	�
101.INS	XBRL Instance Document *
�	�
101.SCH	XBRL Taxonomy Extension Schema *

101.CAL	XBRL Taxonomy Extension Calculation Linkbase *
�	�
101.LAB	XBRL Taxonomy Extension Label Linkbase *
�	�
101.PRE	XBRL Taxonomy Extension Presentation Linkbase *
�	�
101.DEF	XBRL Taxonomy Extension Definition Document *

(1)

Incorporated by reference to Registration Statement on Form S-1 (333-187706) filed with the Securities and Exchange Commission on April 3, 2013.

(2)

Incorporated by reference to Post-Effective Amendment No. 4 to Registration Statement on Form S-1 (333-187706) filed with the Securities and Exchange Commission on June 19, 2014.

* Filed herewith.

+ Confidential treatment requested.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

�	ASTERIAS BIOTHERAPEUTICS, INC.	�
�	�	�
Date: November 10, 2014	/s/ Pedro Lichtinger	�
�	Pedro Lichtinger	�
�	Principal Executive Officer	�

Date: November 10, 2014	/s/ Robert W. Peabody	�
�	Robert W. Peabody	�
�	Principal Financial Officer	�

�

Exhibit Number	Description
�	�
3.1	Amended and Restated Certificate of Incorporation (1)
�	�
3.2	Bylaws, as amended *
�	�
4.1	Warrant Agreement, dated June 16, 2014, by Asterias Biotherapeutics, Inc. for the benefit of certain warrant holders (2)
�	�
4.2	Form of Warrant (included in Exhibit 4.1) (2)
�	�
10.1	Clinical Trial and Option Agreement, dated September 8, 2014, between Asterias Biotherapeutics, Inc. and Cancer Research UK and Cancer Research Technology Limited (Portions of this exhibit have been omitted pursuant to a request for confidential treatment) +
�	�
31	Rule 13a-14(a)/15d-14(a) Certification.*
�	�
32	Section 1350 Certification.*
�	�
101	Interactive Data File
�	�
101.INS	XBRL Instance Document *
�	�
101.SCH	XBRL Taxonomy Extension Schema *
�	�
101.CAL	XBRL Taxonomy Extension Calculation Linkbase *
�	�
101.LAB	XBRL Taxonomy Extension Label Linkbase *
�	�
101.PRE	XBRL Taxonomy Extension Presentation Linkbase *
�	�
101.DEF	XBRL Taxonomy Extension Definition Document *

(1)

Incorporated by reference to Registration Statement on Form S-1 (333-187706) filed with the Securities and Exchange Commission on April 3, 2013.

(2)

Incorporated by reference to Post-Effective Amendment No. 4 to Registration Statement on Form S-1 (333-187706) filed with the Securities and Exchange Commission on June 19, 2014.

* Filed herewith.

+ Confidential treatment requested.

�

Exhibit 3.2

�

BYLAWS OF

BIOTIME ACQUISITION CORPORATION

ARTICLE I

Offices

Section 1. Principal Office. Offices may be established and maintained at such place or places, either within or without the State of Delaware, as the Board of Directors may from time to time designate. The Board of Directors shall fix the location of the principal executive office of the corporation at any place within or without the State of Delaware. If the principal executive office is located outside the State of Delaware, and the corporation has one or more business offices in the State of Delaware, the Board of Directors shall fix and designate a principal business office in the State of Delaware.

ARTICLE II

Meetings of Stockholders

Section 1. Place of Meetings. All meetings of stockholders shall be held at such place, either within or without the State of Delaware, as the Board of Directors may designate. If no designation is made, the meeting shall be held at the principal executive office of the corporation.

Section 2. Annual Meetings. The annual meetings of stockholders shall be held once each year on a date and time designated by the Board of Directors, but in any event not less frequently than once every 13 months. At each annual meeting, directors shall be elected to serve during the ensuing year and until their successors are elected and qualified; reports of the affairs of the corporation shall be considered, and any other business may be transacted which is within the powers of the stockholders.

At any annual meeting of the stockholders, only such business shall be conducted as shall have been brought before the meeting (i) by or at the direction of the Board of Directors or (ii) by any stockholder of the corporation who is entitled to vote with respect thereto and who complies with the notice procedures set forth in this Section 2. For business to be properly brought before an annual meeting by a stockholder (a Proposing Stockholder), the Proposing Stockholder must have given timely notice thereof in writing to the Secretary of the corporation. To be timely, a Proposing Stockholder's notice must be delivered or mailed to and received at the principal executive offices of the corporation not less one(1)-year anniversary of the preceding years annual meeting; provided, however, that if the date of the annual meeting is more than thirty (30) days before or more than sixty (60) days after such anniversary date, notice by the stockholder to be timely must be so delivered, or mailed and received, not later than the ninetieth (90th) day prior to such annual meeting or, if later, the tenth (10th) day following the day on which public disclosure of the date of such annual meeting was first made. In no event shall any adjournment of an annual meeting or the announcement thereof commence a new time period for the giving of timely notice as described above. A Proposing Stockholder's notice to the Secretary shall set forth as to each matter such Proposing Stockholder proposes to bring before the annual meeting (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (ii)�the text of the proposal or business, including the text of any resolutions proposed for consideration, (iii) the name and address, as they appear on the corporation's books, of the Proposing Stockholder, (iv) the class, series, and number of shares of the corporation's capital stock that are beneficially owned within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the Exchange Act) by such Proposing Stockholder, (v) any material interest of the Proposing Stockholder in such business or proposal, (vi) a reasonably detailed description of all agreements, arrangements and understandings between the Proposing Stockholder and any other stockholder of the corporation or any other person or entity, including the name and address of each other stockholder or other person or entity, in connection with the proposal of such business by such stockholder, and (vii) any other information relating to such Proposing Stockholder that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies or consents by such Proposing Stockholder in support of the business proposed to be brought before the meeting pursuant to Section 14(a) of the Exchange Act. For purposes of this Section 2, the term Proposing Stockholder shall mean (a) the stockholder providing the notice of business proposed to be brought before an annual meeting, (b) the beneficial owner or beneficial owners, if different, on whose behalf the notice of the business proposed to be brought before the annual meeting is made, and (c) any affiliate or associate (as such terms are defined in Rule 12b-2 under the Exchange Act) of such stockholder or beneficial owner.

A Proposing Stockholder shall update and supplement their notice of intent to bring business before the meeting, if necessary, so that the information provided or required to be provided in such notice pursuant to this Section 2 shall be true and correct as of the record date for the meeting and as of the date that is ten (10) business days prior to the meeting or any adjournment or postponement of the meeting. Each such update and supplement shall be delivered to, or mailed and received by, the Secretary of the corporation at the principal executive offices of the corporation not later than (i) five (5) business days after the record date for the meeting in the case of the update and supplement required to be made as of the record date, and (ii) not later than eight (8) business days prior to the date for the meeting in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting or any adjournment or postponement of the meeting; provided that if it is not practicable for the Proposing Stockholder to provide the required update or supplement within by such eight (8) business day deadline prior to any adjournment or postponement of the meeting, then the update or supplement must be delivered to the Secretary of the corporation on the first practicable date prior to the date to which the meeting has been adjourned or postponed.

Notwithstanding anything in these by-laws to the contrary, no business shall be brought before or conducted at an annual meeting except in accordance with the provisions of this Section 2. The officer of the corporation or other person presiding at the annual meeting shall, if the facts so warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with such provisions and, if he should so determine, he shall so declare to the meeting and any such business so determined to be not properly brought before the meeting shall not be transacted.

Section 3. Special Meetings. Special meetings of the stockholders, for any purpose or purposes whatsoever, may be called at any time by the Chairman of the Board, a majority of the directors then in office even if less than a quorum of the authorized number of directors, or by one or more stockholders entitled to cast not less than 10% of the votes eligible to the cast at that meeting.

Upon request in writing to the Chairman of the Board, the President, or the Secretary, specifying the general nature of the business proposed to be transacted, sent by certified mail or telegraphic or other electronic facsimile transmission or delivered to such officer in person, by any person or persons entitled to call a special meeting of stockholders, it shall be the duty of such officer forthwith to cause notice to be given to the stockholders entitled to vote that a meeting will be held on a date requested by the person or persons calling the meeting; provided, that the date of the meeting requested by such person or persons calling the meeting shall be not less than 10 nor more than 60 days after the receipt of such request.

Section 4. Notice of Stockholders' Meetings. All notices of meetings of stockholders shall be sent or otherwise given in accordance with Section 5 of this Article II not less than 10 nor more than 60 days before the date of the meeting. The notice shall state the place, if any, date and hour of the meeting, the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, the record date for determining the stockholders entitled to vote at the meeting, if such date is different from the record date for determining stockholders entitled to notice of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called.

Section 5. Manner of Giving Notice; Affidavit of Notice. Notice of any meeting of stockholders shall be given either personally or by first-class mail or telegraphic, electronic or other written communication, charges prepaid, addressed to the stockholder at the address of that stockholder appearing on the books of the corporation or given by the stockholder to the corporation for the purpose of notice. If no such address appears on the corporation's books or is given, notice shall be deemed to have been given if sent to that stockholder by first-class mail or telegraphic, electronic or other written communication to the corporation's principal executive office, or if published at least once in a newspaper of general circulation in the county where that office is located. Notice shall be deemed to have been given at the time when delivered personally or deposited in the mail or electronic transmission.

If any notice addressed to a stockholder at the address of that stockholder appearing on the books of the corporation is returned to the corporation by the United States Postal Service marked to indicate that the United States Postal Service is unable to deliver the notice to the stockholder at that address, all future notices or reports shall be deemed to have been duly given without further mailing if these shall be available to the stockholder on written demand of the stockholder at the principal executive office of the corporation for a period of 1 year from the date of the giving of the notice.

An affidavit of the mailing or other means of giving any notice of any stockholders' meeting shall be executed by the Secretary, assistant secretary, or any transfer agent of the corporation giving the notice, and shall be filed and maintained in the minute book of the corporation.

Section 6. Quorum. The presence in person or by proxy of the holders of a majority of the shares entitled to vote at any meeting, annual or special, shall constitute a quorum for the transaction of business. The stockholders present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum, if any action taken (other than adjournment) is approved by at least a majority of the shares required to constitute a quorum.

Section 7. Adjourned Meeting and Notice Thereof. Any stockholders' meeting, annual or special, whether or not a quorum is present, may be adjourned from time to time by the vote of a majority of the shares, the holders of which are either present in person or represented by proxy, but in the absence of a quorum at the commencement of the meeting, or if no quorum can be subsequently raised, no other business may be transacted at such meeting.

When any meeting of stockholders, either annual or special, is adjourned to another time or place, notice of the adjourned meeting need not be given if the time and place are announced at the meeting at which the adjournment is taken, provided that if the adjournment is for more than thirty (30) days from the date set for the original meeting, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. At any adjourned meeting the corporation may transact any business which might have been transacted at the original meeting.

Section 8. Voting. The stockholders entitled to vote at any meeting of stockholders shall be determined in accordance with the provisions of Section 11 of this Article II, subject to the provisions of Section 217 of the Delaware General Corporation Law (relating to voting shares held by a fiduciary, in the name of a corporation, or in joint ownership). The stockholders' vote may be by voice vote or by ballot, provided, however, that any election for directors must be by ballot if demanded by any stockholder before the voting has begun if there are any nominees seeking election who have not been nominated by the Board of Directors or a committee of the Board of Directors. On any matter other than the election of directors, any stockholder may vote part of the shares in favor of the proposal and refrain from voting the remainder shares or vote them against the proposal, but, if the stockholder fails to specify the number of shares which the stockholder is voting affirmatively, it will be conclusively presumed that the stockholder's approving vote is with respect to all shares that the stockholder is entitled to vote. If a quorum is present, the affirmative vote of the majority of the shares represented at the meeting and entitled to vote on any matter (other than the election of directors) shall be the act of the stockholders, unless the vote of a greater number or voting by classes is required by Delaware General Corporation Law or by the certificate of incorporation.

Section 9. Consent of Absentees. The transactions of any meeting of stockholders, either annual or special, however called and noticed and wherever held, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum be present either in person or by proxy, and if, either before or after the meeting, each of the persons entitled to vote, not present in person or by proxy, signs a written waiver of notice, or a consent to the holding of such meeting, or an approval of the minutes thereof. The waiver of notice or consent need not specify either the business to be transacted or the purpose of any annual or special meeting of stockholders, except that, if action is taken or proposed to be taken for approval of any of those matters specified in the second paragraph of Section 4 of this Article II, the waiver of notice or consent shall state the general nature of the proposal. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting.

Attendance by a person at a meeting shall also constitute a waiver of notice of that meeting, except when the person objects, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened, and except that attendance at a meeting is not a waiver of any right to object to the consideration of matters not included in the notice of the meeting if that objection is expressly made at the meeting.

Section 10. Stockholder Action by Written Consent Without a Meeting. Any action that may be taken at any annual or special meeting of stockholders may be taken without a meeting and without prior notice, if a consent in writing, setting forth the action so taken, is signed by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take that action at a meeting at which all shares entitled to vote on that action were present and voted. All such consents shall be filed with the Secretary of the corporation and shall be maintained in the corporate records. Any stockholder giving a written consent, or the stockholder's proxy holders, or a transferee of the shares or a personal representative of the stockholder or their respective proxy holders, may revoke the consent by a writing received by the Secretary of the corporation before written consents of the number of shares to authorize the proposed action have been filed with the Secretary.

If corporate action is taken without a meeting by less than unanimous written consent of stockholders, the Secretary shall give prompt notice of the taking of the corporate action to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for notice of such meeting had been the date that written consents signed by a sufficient number of holders to take the action were delivered to the corporation as provided in Delaware General Corporation Law Section 228(c).

Section 11. Record Date for Stockholder Notice, Voting, and Giving Consents. For purposes of determining the stockholders entitled to notice of any meeting or to vote or entitled to give consent to corporate action without a meeting, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty (60) days nor less than ten (10) days before the date of any meeting or action, and in this event only stockholders of record on the date so fixed are entitled to notice and to vote or to give consents, as the case may be, notwithstanding any transfer of any shares on the books of the corporation after the record date, except as otherwise provided in the Delaware General Corporation Law.

If the Board of Directors does not so fix a record date:

(a) The record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the business day next preceding the day on which notice is given or, if notice is waived, at the close of business on the business day next preceding the day on which the meeting is held.

(b) The record date for determining stockholders entitled to give consent to corporate action in writing without a meeting, (i) when no prior action by the Board of Directors has been taken, shall be the first date on which the written consent is delivered to the corporation, or (ii) when prior action of the Board of Directors has been taken, shall be at the close of business on the day on which the Board of Directors adopts the resolution relating to that action.

Section 12. Proxies. Every person entitled to vote for directors or on any other matter shall have the right to do so either in person or by one or more agents authorized by a written proxy signed by the person and filed with the Secretary of the corporation. A proxy shall be deemed signed if the stockholder's name is placed on the proxy (whether by manual signature, typewriting, telegraphic transmission, or otherwise) by the stockholder or the stockholder's attorney-in-fact. A validly executed proxy which does not state that it is irrevocable shall continue in full force and effect unless (i) revoked by the person executing it, before the vote pursuant to that proxy, by a writing delivered to the corporation stating that the proxy is revoked, or by a subsequent proxy executed by, or attendance at the meeting and voting in person by, the person executing the proxy; or (ii) written notice of the death or incapacity of the maker of that proxy is received by the corporation before the vote pursuant to that proxy is counted, provided, however, that no proxy shall be valid after the expiration of three (3) years from the date of the proxy, unless otherwise provided for in the proxy. The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of Section 212(e) of the Delaware General Corporation Law.

Section 13. Inspectors of Election. Before any meeting of stockholders, the Board of Directors may appoint any persons other than nominees for office to act as inspectors of election at the meeting or its adjournment. If no inspectors of election are so appointed, the chairman of the meeting may, and on the request of any stockholder or a stockholder's proxy shall, appoint inspectors of election at the meeting. The number of inspectors shall be either one (1) or three (3). If inspectors are appointed at a meeting on the request of one or more stockholders or proxies, the holders of a majority of shares or their proxies present at the meeting shall determine whether one (1) or three (3) inspectors are to be appointed. If any person appointed as inspector fails to appear or fails or refuses to act, the chairman of the meeting may, and upon the request of any stockholder or a stockholder's proxy shall, appoint a person to fill that vacancy.

These inspectors shall:

(a) Ascertain the number of shares outstanding and the voting power of each, determine the shares represented at the meeting, and the validity of proxies and ballots;

(b) Count and tabulate all votes and ballots;

(d) Certify the inspectors determination of the number of shares represented at the meeting, and the inspectors count of all votes and ballots.

ARTICLE III

Directors

Section 1. Powers. Subject to the provisions of the Delaware General Corporation Law and any limitations in the certificate of incorporation and these bylaws relating to action required to be approved by the stockholders or by the outstanding shares, the business and affairs of the corporation shall be managed and all corporate powers shall be exercised by or under the direction of the Board of Directors.

Section 2. Number and Qualification of Directors. The authorized number of directors shall be not less than three (3) and the exact number of directors shall be fixed by approval of the board of directors.

Section 3. Election and Term of Office. The directors shall be elected at each annual meeting of stockholders but, if any such annual meeting is not held or the directors are not elected thereat, the directors may be elected at any special meeting of stockholders held for that purpose. All directors shall hold office until their respective successors are elected, or until death, resignation or removal.

Section 4. Vacancies. Vacancies in the Board of Directors may be filled by a majority of the remaining directors, though less than a quorum, or by a sole remaining director. Each director so elected shall hold office until the next annual meeting of the stockholders and until a successor has been elected and qualified.

A vacancy or vacancies in the Board of Directors shall be deemed to exist in the event of the death, resignation, or removal of any director, the increase in the number of directors authorized, or if the Court of Chancery has removed a director for conviction of a felony, or if the stockholders fail, at any meeting of stockholders at which any director or directors are elected, to elect the number of directors to be voted for at that meeting.

The stockholders may elect a director or directors at any time to fill any vacancy or vacancies not filled by the directors, but any such election by written consent shall require the consent of a majority of the outstanding shares entitled to vote.

Any director may resign effective on giving written notice to the Chairman of the Board, the President, the Secretary, or the Board of Directors, unless the notice specifies a later time for that resignation to become effective. Unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. If the resignation of a director is effective at some future time, the Board of Directors may elect a successor to take office when the resignation becomes effective.

No reduction of the authorized number of directors shall have the effect of removing any director before that director's term of office expires.

Section 5. Place of Meetings and Meetings by Telephone. Regular meetings of the Board of Directors may be held at any place within or outside the State of Delaware that has been designated from time to time by resolution of the Board of Directors. In the absence of such a designation, regular meetings shall be held at the principal executive office of the corporation. Special meetings of the Board of Directors shall be held at any place within or outside the State of Delaware that has been designated in the notice of the meeting or, if not stated in the notice or if there is no notice, at a principal executive office of the corporation. Any meeting, regular or special, may be held by conference telephone or similar communication equipment, so long as all directors participating in the meeting can hear one another, and all such directors shall be deemed to be present in person at the meeting.

Section 6. Regular Meetings. Regular meetings of the Board of Directors shall be held, without call or notice, immediately following each annual meeting of stockholders. Other regular meetings may be held without call or notice at such time and place as may be fixed by the Board of Directors from time to time.

Section 7. Special Meetings. Special meetings of the Board of Directors for any purpose or purposes may be called at any time by the Chairman of the Board or the President or the Secretary or any two directors.

Notice of the time and place of special meetings shall be delivered personally or by telephone to each director or sent by first-class mail or electronic transmission, charges prepaid, addressed to each director at that director's address as it is shown on the records of the corporation. In case the notice is mailed, it shall be deposited in the United States mail at least four (4) days before the time of the holding of the meeting. In case the notice is delivered personally, or by telephone or electronic transmission, it shall be delivered personally or by telephone or by electronic transmission at least forty-eight (48) hours before the time of the holding of the meeting. Any oral notice given personally or by telephone may be communicated either to the director or to a person at the office of the director who the person giving the notice has reason to believe will promptly communicate it to the director. The notice need not specify the purpose of the meeting nor the place if the meeting is to be held at the principal executive office of the corporation.

Section 8. Action Without Meeting. Any action by the Board of Directors or of any committee may be taken without a meeting if all members of the Board of Directors or such committee shall individually or collectively consent in writing to such action. Such written consent or consents shall be filed with the minutes of the proceedings of the Board of Directors.

Section 9. Quorum. A majority of the authorized number of directors shall be necessary to constitute a quorum for the transaction of business, except to adjourn as hereinafter provided. Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board of Directors, subject to the provisions of Section 144 of the Delaware General Corporation Law (as to approval of contracts or transactions in which a director has a financial interest), and Section 145 of the Delaware General Corporation Law (as to indemnification of directors). A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for that meeting.

Section 10. Waiver of Notice. The transactions of any meeting of the Board of Directors, however called or noticed or wherever held, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum be present and if, either before or after the meeting, each of the directors not present signs a written waiver of notice or a consent to holding such meeting or an approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting. Notice of a meeting shall also be deemed given to any director who attends the meeting without protesting, before or at its commencement, the lack of notice to that director.

Section 11. Adjournment. A majority of the directors present, whether or not constituting a quorum, may adjourn any meeting to another time and place.

Section 12. Notice of Adjournment. Notice of the time and place of holding an adjourned meeting need not be given, unless the meeting is adjourned for less than twenty-four (24) hours, in which case notice of the time and place shall be given before the time of the adjourned meeting to the directors who were not present at the time of the adjournment. Notice under this Section 12 shall be given in the manner specified in Section 7 of this Article III, except that the time for notice shall be no later than twenty-four (24) hours before the holding of the adjourned meeting.

Section 13. Fees and Compensation. Directors and members of committees may receive such compensation, if any, for their services, and such reimbursement for expenses, as may be fixed or determined by resolution of the Board of Directors. This Section 13 shall not be construed to preclude any director from serving the corporation in any other capacity as an officer, agent, employee, or otherwise, and receiving compensation for those services.

Section 14. Removal of Directors. The entire Board of Directors or any individual director may be removed as provided by the Delaware General Corporation Law.

Section 15. Conduct of Meetings. Directors' meetings shall be presided over by the Chairman of the Board, or, in the absence of the Chairman of the Board, by the President, or in the absence of both such officers, by a director chosen by a majority of the directors present. The Secretary of the corporation shall act as secretary of the meetings of the Board of Directors. In case the Secretary shall be absent from any meeting, the presiding officer may appoint any person to act as secretary of the meeting.

ARTICLE IV

Committees

Section 1. Committees of Directors. The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Subject to any committee charter or resolution of the Board of Directors establishing the qualification of members of any committee, in the absence or disqualification of a member of a committee, the member or members present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to the following matter: (i) approving or adopting, or recommending to the stockholders, any action or matter (other than the election or removal of directors) expressly required by this chapter to be submitted to stockholders for approval or (ii) adopting, amending or repealing any bylaw of the corporation.

Section 2. Meetings and Action of Committees. Meetings and action of committees shall be governed by, and held and taken in accordance with, the provisions of Article III of these bylaws, Section 5 (place of meetings), 6 (regular meetings), 7 (special meetings and notice), 8 (action without meeting), 9 (quorum), 10 (waiver of notice), 11 (adjournment), and 12 (notice of adjournment), with such changes in the context of those bylaws as are necessary to substitute the committee and its members for the Board of Directors and its members, except that the time of regular meetings of committees may be determined either by resolution of the Board of Directors or by resolution of the committee; special meetings of committees may also be called by resolution of the Board of Directors; and notice of special meetings of committees shall also be given to all alternate members, who shall have the right to attend all meetings of the committee. The Board of Directors may adopt rules for the government of any committee not inconsistent with the provisions of these bylaws.

ARTICLE V

Officers

Section 1. Designation. The officers of the corporation shall be a President, a Secretary and a Chief Financial Officer. The corporation may also have, at the discretion of the Board of Directors, a Chairman of the Board, one or more Vice Presidents, one or more Assistant Secretaries, one or more Assistant Treasurers, and such other officers as may be appointed in accordance with the provisions of Section 3 of this Article. Any number of offices may be held by the same person.

Section 2. Election. The officers of the corporation, except such officers as may be appointed in accordance with the provisions of Section 3 or Section 5 of this Article, shall be chosen by the Board of Directors, and each shall serve at the pleasure of the Board of Directors, subject to the rights, if any, of an officer under any contract of employment approved by the Board of Directors.

Section 3. Subordinate Officers, etc. The Board of Directors may appoint, and may empower the President to appoint, such other officers as the business of the corporation may require, each of whom shall hold office for such period, have such authority and perform such duties as are provided in the bylaws or as the Board of Directors may from time to time determine.

Section 4. Removal and Resignation. Subject to his or her rights, if any, under any contract of employment, any officer may be removed, either with or without cause by the Board of Directors, at any regular or special meeting thereof, or, except in case of an officer chosen by the Board of Directors, by any officer upon whom such power of removal may be conferred by the Board of Directors.

Any officer may resign at any time by giving written notice to the Board of Directors or to the President, or to the Secretary of the corporation. Any such resignation shall take effect at the date of the receipt of such notice or at any later time specified therein; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the corporation under any contract to which the officer is a party.

Section 5. Vacancies. A vacancy in any office because of death, resignation, removal, disqualification or any other cause shall be filled in the manner prescribed in the bylaws for regular appointments to such office.

Section 6. Chairman of the Board. The Chairman of the Board, if there shall be such an officer, shall, if present, preside at all meetings of the Board of Directors and exercise and perform such other powers and duties as may be from time to time assigned to him by the Board of Directors or prescribed by the bylaws. If there is no President, the Chairman of the Board shall, if so authorized by a resolution of the Board of Directors, in addition be the chief executive officer of the corporation and shall have the powers and duties prescribed in Section 7 of this Article V.

Section 7. President. Subject to such supervisory powers, if any, as may be given by the Board of Directors to the Chairman of the Board, if there be such an officer, the President, who may be designated as the Chief Executive Officer, shall be the chief executive officer of the corporation and, subject to the control of the Board of Directors, shall have general supervision, direction and control of the business and officers of the corporation. The President shall preside at all meetings of the stockholders and, in the absence of the Chairman of the Board, or, if there be none, at all meetings of the Board of Directors. The President shall be ex officio a member of all the standing committees, including the executive committee, if any. The President may sign and execute, in the name of the corporation, deeds, mortgages, bonds, notes, contracts and other instruments authorized by the Board of Directors, and, in general, shall have the general powers and duties of management usually vested in the office of president of a corporation, and shall have such other powers and duties as may be prescribed by the Board of Directors or the bylaws.

Section 8. Vice Presidents. In the absence or disability of the President, the Vice Presidents, if any, in order of their rank as fixed by the Board of Directors or, if not ranked, the Vice President designated by the Board of Directors, shall perform all the duties of the President, and when so acting shall have all the powers of, and be subject to all the restrictions upon, the President. The Vice Presidents shall have such other powers and perform such other duties as from time to time may be prescribed for them respectively by the Board of Directors or the bylaws, and the President, or the Chairman of the Board if authorized to act as chief executive officer.

Section 9. Secretary. The Secretary shall keep or cause to be kept, at the principal office or such other place as the Board of Directors may order, a book of minutes of all meetings of directors, committees of directors and stockholders, with the time and place of holding, whether regular or special, and, if special, how authorized, the notice thereof given, the names of those present at directors' meetings, the number of shares present or represented at stockholders' meetings, and the proceedings thereof.

The Secretary shall keep, or cause to be kept, at the principal office or at the office of the corporation's transfer agent, a stock register, or a duplicate stock register, showing the names of the stockholders and their addresses, the number and classes of shares of stock held by each, the number and date of certificates issued for the same, and the number and date of cancellation of every certificate surrendered for cancellation.

The Secretary shall give notice, or cause notice to be given, of all the meetings of the stockholders and of the Board of Directors as law or the bylaws require notice to be given, and he shall keep the seal of the corporation in safe custody, and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors or by the bylaws.

Section 10. Chief Financial Officer. The Chief Financial Officer, who may be designated as the Treasurer, shall keep and maintain, or cause to be kept and maintained, adequate and correct books and accounts of the properties and business transactions of the corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, retained earnings and capital stock.

The Chief Financial Officer shall deposit all monies and other valuables in the name and to the credit of the corporation with such depositaries as may be designated by the Board of Directors. The Chief Financial Officer shall disburse the funds of the corporation as may be ordered by the Board of Directors, shall render to the President and directors, whenever they request it, an account of all transactions as Chief Financial Officer and of the financial condition of the corporation, and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors or the bylaws.

Section 11. Salaries. The salaries of the officers shall be fixed from time to time by the Board of Directors or a committee of the Board of Directors to which such authority has been delegated by the Board of Directors, and no officer shall be prevented from receiving such salary by reason of the fact that such officer is also a director of the corporation.

ARTICLE VI

Indemnification of Directors, Officers, Employees, and Other Agents

Section 1. Agents, Proceedings, and Expenses. For the purposes of this Article, "agent" means any person who is or was a director, officer, employee, or other agent of this corporation, or is or was serving at the request of this corporation as a director, officer, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, or other enterprise, or was a director, officer, employee or agent of a foreign or domestic corporation which was a predecessor corporation of the corporation or of another enterprise at the request of the predecessor corporation; "proceeding" means any threatened, pending or completed action or proceeding, whether civil, criminal, administrative, or investigative; and "expenses" includes, without limitation, attorneys' fees, judgments, fines, amounts reasonably paid, and any expenses of establishing a right to indemnification under Section 4 or Section 5(c) of this Article.

Section 2. Actions Other Than by the Corporation. This corporation shall, to the maximum extent permitted by the Delaware General Corporation Law, indemnify any person who was or is a party, or is threatened to be made a party, to any proceeding (other than an action by or in the right of this corporation) by reason of the fact that such person is or was an agent of this corporation, against expenses, judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with such proceeding if that person acted in good faith and in a manner that person reasonably believed to be in the best interests of this corporation and, in the case of a criminal proceeding, had no reasonable cause to believe his conduct of was unlawful. The termination of any proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in the best interests of this corporation or that the person had reasonable cause to believe that his conduct was unlawful.

Section 3. Actions by the Corporation. This corporation shall indemnify any person who was or is a party or is threatened to be made a party, to any threatened, pending or completed action by or in the right of this corporation to procure a judgment in its favor by reason of the fact that person is or was an agent of this corporation, against expenses actually and reasonably incurred by that person in connection with the defense or settlement of that action if that person acted in good faith, in a manner that person believed to be in the best or not opposed to the interests of this corporation. No indemnification shall be made under this Section 3 in respect of any claim, issue or matter as to which that person shall have been adjudged to be liable to this corporation in the performance of that person's duty to this corporation, unless and only to the extent that the court in which that action was brought shall determine upon application that, in view of all the circumstances of the case, that person is fairly and reasonably entitled to indemnity for the expenses which the court shall determine.

Section 4. Successful Defense by Agent. To the extent that an agent of this corporation has been successful on the merits in defense of any proceeding referred to in Sections 2 or 3 of this Article, or in defense of any claim, issue or matter therein, the agent shall be indemnified against expenses actually and reasonably incurred by the agent in connection therewith.

Section 5. Required Approval. Except as provided in Section 4 of this Article, any indemnification under this Article shall be made by this corporation only if authorized in the specific case on a determination that indemnification of the agent is proper in the circumstances because the agent has met the applicable standard of conduct set forth in Sections 2 or 3 of this Article, by:

(a) A majority vote of directors who are not parties to the proceeding, even though less than a quorum; or

(b) By a committee of such directors designated by majority vote of such directors, even though less than a quorum; or

(c) If there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion; or

(d) Approval by the affirmative vote of a majority of the shares of this corporation entitled to vote represented at a duly held meeting at which a quorum is present or by the written consent of holders of a majority of the outstanding shares entitled to vote.

Section 6. Advance of Expenses. Expenses incurred in defending any proceeding may be advanced by this corporation before the final disposition of the proceeding on receipt of an undertaking by or on behalf of the agent to repay the amount of the advance unless it shall be determined ultimately that the agent is entitled to be indemnified as authorized in this Article.

Section 7. Other Contractual Rights. Nothing contained in this Article shall affect any right to indemnification to which persons other than directors and officers of this corporation or any subsidiary hereof may be entitled by contract or otherwise.

Section 8. Limitations. No indemnification or advance shall be made under this Article, except as provided in Section 4 or Section 5(c), in any circumstance where it appears:

(a) That it would be inconsistent with a provision of the articles, a resolution of the stockholders, or an agreement in effect at the time of the accrual of the alleged cause of action asserted in the proceeding in which the expenses were incurred or other amounts were paid, which prohibits or otherwise limits indemnification; or

(b) That it would be inconsistent with any condition expressly imposed by a court in approving a settlement.

Section 9. Insurance. Upon a determination by the Board of Directors of this corporation to purchase such insurance, this corporation shall purchase and maintain insurance on behalf of any agent of the corporation against any liability asserted against or incurred by the agent in such capacity or arising out of the agent's status as such whether or not this corporation would have the power to indemnify the agent against that liability under the provisions of this Article.

Section 10. Fiduciaries of Corporate Employee Benefit Plan. This Article does not apply to any proceeding against any trustee, investment manager, or other fiduciary of an employee benefit plan in that person's capacity as such, even though that person may also be an agent of the corporation as defined in Section 1 of this Article. Nothing contained in this Article shall limit any right to indemnification to which such a trustee, investment manager, or other fiduciary may be entitled by contract or otherwise, which shall be enforceable to the extent permitted by applicable law other than this Article.

ARTICLE VII

Records and Reports

Section 1. Maintenance and Inspection of Share Register. The corporation shall keep at its principal executive office, or at the office of its transfer agent or registrar, if either be appointed and as determined by resolution of the Board of Directors, a record of its stockholders, giving the names and addresses of all stockholders and the number, class, and series of shares of stock held by each stockholder.

A stockholder of the corporation in person or by attorney or agent may (i) inspect and copy the records of stockholders' names and addresses and shareholdings during usual business hours on 5 days prior written demand on the corporation, and (ii) examine a complete list of the stockholders entitled to vote at the meeting for any purpose germane to the meeting for a period of at least 10 days prior to the meeting: (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (b) during ordinary business hours, at the principal place of business of the corporation.

Section 2. Maintenance and Inspection of Bylaws. The corporation shall keep at its principal executive office, or, if its principal executive office is not in the State of Delaware, at its principal office in this state, the original or a copy of the bylaws as amended to date, which shall be open to inspection by the stockholders at all reasonable times during office hours. If the principal executive office of the corporation is outside the State of Delaware and the corporation has no principal business office in this state, the Secretary shall, upon the written request of any stockholder, furnish to that stockholder a copy of the bylaws as amended to date.

Section 3. Maintenance and Inspection of Other Corporate Records. The accounting books and records and minutes of proceedings of the stockholders and the Board of Directors and any committee or committees of the Board of Directors shall be kept at such place or places designated by the Board of Directors, or, in the absence of such designation, at the principal executive office of the corporation. The minutes shall be kept either in written form or in any other form capable of being converted into written form. The minutes and accounting books and records shall be open to inspection upon the written demand of any stockholder, at any reasonable time during usual business hours, for a purpose reasonably related to the holder's interests as a stockholder. The inspection may be made in person or by an agent or attorney, and shall include the right to copy and make extracts. These rights of inspection shall extend to the records of each subsidiary corporation of the corporation, to the extent such records are within the corporations control or the corporation can obtain such records through exercise of its control.

Section 4. Inspection by Directors. Any director shall have the right to examine the corporation's stock ledger, a list of its stockholders and its other books and records for a purpose reasonably related to the director's position as a director.

Section 5. Annual Statement of General Information. In compliance with Section 1502 of the Delaware General Corporation Law, the corporation shall annually file with the Secretary of State of the State of Delaware, on the prescribed form, setting forth: (1) the location of its registered office in this State, stated with the degree of particularity required by � 102(a)(2) of this Title 8 of the Delaware Code; (2) the name of the agent upon whom service of process against the corporation may be served; (3) the location (city, town, street and number of same, if number there be) of the principal place of business of the corporation; (4) the names and addresses of all the directors as of the filing date of the report and the name and address of the officer who signs the report; (5) the number of shares and the par value per share of each class of capital stock having a par value and the number of shares of each class of stock without par value which the corporation is authorized to issue; and (6) such additional information, schedules and attachments as the Secretary shall require to ascertain the franchise tax due to the State.

ARTICLE VIII

General Corporate Matters

Section 1. Record Date for Purposes Other Than Notice and Voting. For purposes of determining the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or entitled to exercise any rights in respect of any other lawful action (other than action by stockholders by written consent without a meeting), the Board of Directors may fix, in advance, a record date, which shall not be more than 60 days before any such action, and in that case only stockholders of record on the date so fixed are entitled to receive the dividend, distribution, or allotment of rights or to exercise the rights, as the case may be, notwithstanding any transfer of any shares on the books of the corporation after the record date so fixed, except as otherwise provided in the Delaware General Corporation Law.

If the Board of Directors does not so fix a record date, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the applicable resolution.

Section 2. Checks, Drafts, Evidences of Indebtedness. All checks, drafts or other orders for payment of money, notes or other evidences of indebtedness, issued in the name of or payable to the corporation, shall be signed or endorsed by such person or persons and in such manner as, from time to time, shall be determined by resolution of the Board of Directors.

Section 3. Corporation Contracts and Instruments; How Executed. The Board of Directors, except as otherwise provided in these bylaws, may authorize any officer or officers, agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the corporation, and this authority may be general or confined to specific instances; and, unless so authorized or ratified by the Board of Directors or within the agency power of an officer, no officer, agent or employee shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount.

Section 4. Stock Certificates. A certificate or certificates for shares of the capital stock of the corporation shall be issued to each stockholder when any of the shares are fully paid, or the Board of Directors may authorize the issuance of stock certificates as partly paid provided that such certificates shall state the amount of the consideration to be paid for them and the amount paid. All stock certificates shall be signed in the name of the corporation by the Chairman of the Board, or Vice Chairman of the Board, or the President, or a Vice President, and by the Chief Financial Officer or an Assistant Treasurer or the Secretary or any Assistant Secretary, certifying the number of shares and the class or series of stock owned by the stockholder. Any or all of the signatures on the certificate may be facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed on a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if such person were an officer, transfer agent or registrar at the date of issue.

Section 5. Lost Certificates. Except as provided in this Section 5, no new stock certificates shall be issued to replace an old certificate unless the latter is surrendered to the corporation and canceled at the same time. The Board of Directors may, in case any stock certificate or certificate for any other security is lost, stolen or destroyed, authorize the issuance of a replacement certificate on such terms and conditions as the Board of Directors may require, including provision for indemnification of the corporation, including provision for security of such indemnification obligation by a bond or other adequate security sufficient to protect the corporation against any claim that may be made against it, including any expense or liability, on account of the alleged loss, theft or destruction of the certificate or the issuance of the replacement certificate.

Section 6. Representation of Shares of Other Corporations. The Chairman of the Board, the President, or any Vice President, or any other person authorized by resolution of the Board of Directors or by any of the foregoing designated officers, is authorized to vote on behalf of the corporation any and all stock or other voting securities of any other corporation or business entity, foreign or domestic, standing in the name of the corporation. The authority granted to these officers to vote on behalf of or represent the corporation in any other corporation or other business entity may be exercised by any of these officers in person or by any person authorized to do so by a proxy duly executed by these officers.

Section 7. Construction and Definitions. Unless the context requires otherwise, the general provisions, rules of construction and definitions in the Delaware General Corporation Law shall govern the construction of these bylaws. Without limiting the generality of this provision, the singular number includes the plural, the plural number includes the singular, the use of the masculine includes the feminine and neuter, and the term "person" includes both a corporation and a natural person.

ARTICLE IX

Amendments

Section 1. Amendment by Stockholders. Subject to the provisions of the certificate of incorporation, these by-laws may be altered, amended or repealed by a majority of the voting power of the shares represented and entitled to vote.

Section 2. Amendment by Directors. Subject to the Delaware General Corporation Law, the certificate of incorporation and these by-laws, the Board of Directors may by majority vote of those present at any meeting at which a quorum is present amend these by-laws, or enact such other by-laws as in their judgment may be advisable for the regulation of the conduct of the affairs of the corporation.

CERTIFICATE OF SECRETARY

BIOTIME ACQUISITION CORPORATION

I, the undersigned, do hereby certify:

1. That I am the Secretary of the above-named Delaware corporation.

2. That the foregoing bylaws, consisting of 22 pages, constitute the bylaws of said corporation as duly adopted by the written consent of the Incorporator thereof dated September 24, 2012.

IN WITNESS WHEREOF, I have hereunto subscribed my name this 28th day of

September, 2012.

�	s/Judith Segall	�
�	Judith Segall, Secretary	�

�

AMENDMENT OF BYLAWS

ASTERIAS BIOTHERAPEUTICS, INC.

(Formerly, BioTime Acquisition Corporation)

Adopted April 9, 2014

Section 2 and Section 4 of Article III of the Bylaws are amended in their entirety to read as follows:

�

ARTICLE III

Directors

Section 2. Number and Qualification of Directors. The authorized number of directors constituting the full Board of Directors shall be eight (8), unless and until such number is increased or decreased by the stockholders, provided that the authorized number of directors shall not be less than three (3).

Section 4. Vacancies. Vacancies in the Board of Directors may be filled only by the stockholders.� Any such election by written consent of the stockholders shall require the vote or consent of the holders of a majority of the outstanding shares entitled to vote.� Each director so elected shall hold office until the next annual meeting of the stockholders and until a successor has been elected and qualified.

�

Any director may resign effective on giving written notice to the Chairman of the Board, the President, the Secretary, or the Board of Directors, unless the notice specifies a later time for that resignation to become effective. Unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. If the resignation of a director is effective at some future time, the stockholders may elect a successor to take office when the resignation becomes effective.

�

No reduction of the authorized number of directors shall have the effect of removing any director before that director's term of office expires.

CERTIFICATE OF SECRETARY

ASTERIAS BIOTHERAPEUTICS, INC.

�

I, the undersigned, do hereby certify:

1.� That I am the Secretary of the above-named Delaware corporation.

2.� That the foregoing is a true and correct copy of the Amendment of the Bylaws of the Asterias Biotherapeutics, Inc. duly adopted by the written consent of the stockholders of the corporation on April 9, 2014.

�

�	Dated:� April 9, 2014	�	�	�
�	�	�	�	�
�	�	�	s/Judith Segall	�
�	�	�	Judith Segall, Secretary	�

�

AMENDMENT OF BYLAWS

ASTERIAS BIOTHERAPEUTICS, INC.

Adopted�August 19, 2014

Section 2 and Section 4 of Article III of the Bylaws are amended in their entirety to read as follows:

�

ARTICLE III

Directors

No reduction of the authorized number of directors shall have the effect of removing any director before that director's term of office expires.

�

CERTIFICATE OF SECRETARY

ASTERIAS BIOTHERAPEUTICS, INC.

I, the undersigned, do hereby certify:

1. That I am the Secretary of the above-named Delaware corporation.

2. That the foregoing is a true and correct copy of the Amendment of the Bylaws of the Asterias Biotherapeutics, Inc. duly adopted by the Board of Directors of the corporation on August 19, 2014.

Dated: August 19, 2014

�		/s/Judith Segall	�
�		Judith Segall, Secretary	�

�

EXHIBIT 10.1

�

Confidential Materials Omitted and Filed Separately with the Securities and Exchange Commission Pursuant to a Request for Confidential Treatment under Rule 24b-2 of the Exchange Act of 1934, as amended.� Confidential Portions are marked: [***].

�

CANCER RESEARCH UK

and

CANCER RESEARCH TECHNOLOGY LIMITED

and

ASTERIAS BIOTHERAPEUTICS, INC.

CLINICAL TRIAL AND OPTION AGREEMENT

�

TABLE OF CONTENTS

1.	DEFINITIONS AND INTERPRETATION	2
2.	PROGRESS DEVELOPMENT WORK	12
3.	CONDUCT OF THE CLINICAL TRIAL AND SPONSORSHIP	15
4.	COMPANYS OBLIGATIONS	17
5.	CONFIDENTIALITY/PUBLICATION	19
6.	INTELLECTUAL PROPERTY RIGHTS	21
7.	OPTION	25
8.	WARRANTIES AND LIMITS OF LIABILITY	26
9.	INDEMNITIES	27
10.	ASSIGNMENT	29
11.	TERM AND TERMINATION	29
12.	CONSEQUENCES OF TERMINATION	31
13.	DISPUTE RESOLUTION	32
14.	NOTICES	33
15.	WAIVER	34
16.	FORCE MAJEURE	34
17.	SEVERABILITY	35
18.	ENTIRE AGREEMENT	35
19.	AMENDMENT	35
20.	PUBLIC ANNOUNCEMENTS	35
21.	PAYMENTS	35
22.	DATA PROTECTION	36
23.	THIRD PARTY RIGHTS	36
24.	EXECUTION	36

�

Schedule 1	Company Patent Rights
Schedule 2	Report Synopsis Headings
Schedule 3	Safety Information
Schedule 4	Licence
Schedule 5	No Fault Compensation Scheme
Schedule 6	CRT Licence
Schedule 7	Third Party Licences and Payments
Schedule 8	Development Work Plan
Schedule 9	Additional Studies
Schedule 10	Form of Progress Report
Schedule 11	Clinical Protocol Summary

�

THIS AGREEMENT is made the 8th day of September, 2014

BETWEEN:

CANCER RESEARCH UK a�company limited by guarantee registered under number 4325234 and a�charity registered under number 1089464 of Angel Building, 407 St. John Street, London, EC1V 4AD, England (the Charity);

CANCER RESEARCH TECHNOLOGY LIMITED a company registered in England and Wales with number 1626049 and registered office at Angel Building, 407 St. John Street, London, EC1V 4AD, England (CRT); and

ASTERIAS BIOTHERAPEUTICS, INC., a Delaware company with principal place of business at 230 Constitution Drive, Menlo Park, CA94025, USA (the Company).

WHEREAS:

(A)	The Company has the right to conduct research and clinical testing on the IMP (as defined below). At this time, the Company does not intend to undertake any further development of the Product except as provided in this Agreement.

(B)	The Charity's charitable objects are to protect and promote the health of the public in particular by research into the nature, causes, diagnosis, prevention, treatment and cure of cancer, including development of findings of research into practical applications.

(C)

The Charity has expertise in the clinical evaluation of novel anti-cancer agents and considers that the Product has the potential to be a valuable drug that could be applied for the treatment of cancer. Accordingly, the Charity is interested in undertaking the development of the Product at its own cost. As the development is to be undertaken in pursuance of the Charity's charitable objects, the Charity will have the right to publish the results of such development work.

(D)

On completion of the Charitys development work, the Company will have the option to take a licence to the results thereof with a view to the Company developing the Product further. If the Company does not wish to take a licence to such results, then CRT shall have the right to take a licence to the Company's rights in and to the Product and Related Products to enable it to find an alternative partner to develop them further.

(E)

CRT is a wholly owned subsidiary of the Charity and is, by arrangement with the Charity, responsible for the management, exploitation and commercialisation of intellectual property generated by the Charity or using funding from the Charity and the Charity has assigned and will assign such intellectual property to CRT for such purpose. CRT remits all its taxable profits to the Charity.

(F)	The Company, CRT and the Charity have therefore agreed to enter into this Agreement to enable the Charity to undertake the development of the IMP subject to the following terms and conditions:

�

NOW IT IS HEREBY AGREED as follows:

�

1.	DEFINITIONS AND INTERPRETATION

�

1.1

In this Agreement the words and phrases set out below shall, unless the context requires otherwise, have the corresponding meaning attributed to them below. In addition, any words and phrases in this Agreement which are not defined below, but which are defined in the CTD, shall have the meaning attributed to them in the CTD.

�

Additional Studies

means any biomarker, manufacturing, purity, toxicology, imaging or combination studies, or any other exploratory or pre-clinical in vitro or in vivo studies commenced after the Effective Date and associated with any part of the Product, or carried out in support of the clinical trial conducted pursuant to this Agreement, where such studies are performed by or on behalf of the Charity, including those described in Schedule 9 (as the same may be amended from time to time by the Charity).

�

Affiliate

means an entity that, whether now or in the future, Controls, is Controlled by or is under common Control with a Party. For the purpose of this definition only, Control means the possession (directly or indirectly) of fifty per cent or more of the voting stock or other equity interest of a subject entity with the power to vote, or the power in fact to control the management decisions of such entity through the ownership of securities or by contract or otherwise and Controls and Controlled by shall be construed accordingly.

�

this Agreement

means this agreement and each of the Schedules to it as amended from time to time in accordance with Clause 19.

�

Case Report Forms

means a record of the data and other information gathered on each Clinical Trial Subject pursuant to the Protocol.

�

Cell Line

means ***.

�

Charitys Standard

Operating Procedures

means the documents in use by the Drug Development Office of the Charity from time to time that are designated as standard operating procedures and which describe the procedures that must be followed to complete various tasks.

�

Chief Investigator

means the person who will lead and co-ordinate the work of the Clinical Trial overall where the Clinical Trial is to be carried out at more than one site.

�

Clinical Trial

means the Phase I/II clinical trial described in the Protocol to be conducted under the Sponsorship of the Charity, the manufacture of IMP to be conducted by the Charity, and any Additional Studies.

�

Clinical Trial Database

Lock Date

means the date when the clinical research database relating to the Clinical Trial is locked (after the Clinical Trial Results have been cleaned but excluding any Long Term Survival Data) in accordance with the Charitys Standard Operating Procedures.

�

Clinical Trial Legislation

means all laws and regulations from time to time in force applicable to the performance of the Clinical Trial, including the CTD, the Human Rights Act 1998, the Data Protection Act 1998, the Medicines Act 1968, the Medicines for Human Use (Clinical Trials) Regulations 2004, and the Human Tissue Act 2004.

�

Clinical Trial LPFV

Date

means the date when the final Clinical Trial Subject in the Clinical Trial attends their first study visit. The Clinical Trial LPFV Date may be further defined in the Protocol.

�

Clinical Trial Results

means all Know-How, data, information and results Controlled by the Charity or CRT and arising from the Clinical Trial, including the contents of each Progress Report, the Final Report, Case Report Forms and associated Data Listings and any other updates that may be agreed by the Parties from time to time.

�

Clinical Trial Subject

means any person who is enrolled in the Clinical Trial either as a recipient or planned recipient of the Investigational Medicinal Product or as a control.

�

Commencement Date

means the date first written above.

�

Company Combination

Patent Rights

means those Patent Rights owned by or licensed to the Company which claim the use of the Product in combination with one or more other anti-cancer agents or therapies and all Patent Rights deriving priority from them.

�

Company Intellectual

Property

means the Company Patent Rights, and all rights in the Company Know-How, the Investigational Medicinal Product and the Company Materials.

�

Company Know-How

means such Know-How in the Companys possession relating to the Product and/or Investigational Medicinal Product (and any constituents thereof), including: (i) any safety and toxicological data; (ii) information relating to the manufacturing/production; (iii) information relating to quality; (iv) information relating to safe and proper handling, storage and use; (v) information that the Company is required to disclose to the Charity pursuant to the Technology Transfer Plan; and (vi) any other data which is relevant to the efficient performance of the Clinical Trial and/or would make the Investigational Medicinal Product in any way easier to make; and (vii) any other data that would make the Product more useful, more valuable or in any way improve its prospects for development or commercialisation.

�

Company Materials

means the Cell Line and other Materials to be provided by the Company to the Charity pursuant to this Agreement including those set out the Technology Transfer Plan.

�

Company Owned

Intellectual Property

means the Company Owned Patent Rights, and the Companys rights in the Company Materials, Investigational Medical Product and the Company Know-How

�

Company Owned Patent Rights

means (i) those Patent Rights listed in Schedule 1A; (ii) those Patent Rights owned by the Company (including those arising after the Commencement Date) which would be infringed by the unauthorised manufacture, use or sale in, or importation into, the relevant country of the Product, Related Products and/or Investigational Medicinal Product; and (iii) all Patent Rights deriving priority from (i) and (ii).

�

Company Patent Rights

means (i) those Patent Rights listed in Schedule 1; (ii) those Patent Rights owned by or licensed to the Company (including those arising after the Commencement Date) which would be infringed by the unauthorised manufacture, use or sale in, or importation into, the relevant country of the Product, Related Products and/or Investigational Medicinal Product; and (iii) all Patent Rights deriving priority from (i) and (ii).

�

Confidential Information

means all information designated as confidential by any Party in writing, together with all other information which relates to the business, affairs, technology, products, developments, trade secrets, Know-How, manufacturing methods, product specifications personnel, customers, agents, distributors and suppliers of any Disclosing Party, or information which may reasonably be regarded as the confidential information of the Disclosing Party. Subject to the terms of any licence agreement entered into in relation to them, the Clinical Trial Results shall be the Confidential Information of the Charity and CRT.

�

Control

means, with respect to Intellectual Property Rights, possession of the ability (whether through ownership or licence, other than a licence granted under this Agreement) to grant the licences or sublicences or make the assignments as provided herein without violating the terms of any agreement or other arrangement with any third party.

�

Contributors

means the Chief Investigator, the Principal Investigator(s), the Sub-Investigators, the Experts, the NHS Trust(s) involved in the Clinical Trial, any sub-contractor of the Charity and/or any academic or not-for-profit entity involved in the Clinical Trial.

�

Costs

means all actual prepaid and committed costs and expenses incurred from time to time in connection with the Clinical Trial, including, for the avoidance of doubt, the internal personnel costs of the Charity and the Charitys Biotherapeutics Development Unit (BDU).

�

CTD

means the European Clinical Trials Directive (Directive 2001/20/EC) and national legislation implementing such Directive, as the same may be amended from time to time.

�

Data Listings

means the computer generated data listings produced by the Charity detailing all anonymised patient data collected under the Clinical Trial other than the Long Term Survival Data.

�

Declaration of Helsinki

means the 2008 version of the Helsinki Declaration of the World Medical Association.

�

Development Work

means the process development and manufacturing scale-up work to be carried out by the Company to determine a Product Manufacturing Process.

�

Development Work Plan

means the work plan in Schedule 8 setting out the Development Work along with the projected timelines for that work and any amendments to the same made in accordance with Clause 2.3.

�

Disclosing Party

has the meaning specified in Clause 5.1.

�

Duke Licence

means�the License Agreement between Duke University and Merix Bioscience, effective January 10, 2000, as amended effective July 28, 2003,

�

Ethics Committee

has the meaning given to it in the CTD.

�

Exclusive Results

means those Clinical Trial Results and the Intellectual Property Rights therein that directly relate to and only to the Product and Related Products. Exclusive Results shall not include any assay methodology, formulation-related results or biomarker results which do not directly relate to and only to the Product and/or Related Products.

�

Exercise Notice

has the meaning specified in Clause 7.1.

�

Expert

means any member of the Charitys expert committees or any other person not being an employee of the Charity whom the Charity may engage from time to time to advise the Charity on the Clinical Trial or to assist with the Product Manufacturing Process at the Charitys Biotherapeutics Development Unit.

�

Field

means use of the Product in immunotherapy applications using ***

�

Final Report

means a Report Synopsis, unless, pursuant to Clause 3.11, a Full Clinical Study Report is prepared by the Charity instead of a Report Synopsis.

�

Financial Year

means the period commencing on January 1 and ending on December 31.

�

Full Clinical

Study Report

means a full clinical study report in relation to the Clinical Trial written by or on behalf of the Charity in accordance with the Charitys Standard Operating Procedures and which meets the standards of the ICH Guidelines for Structure and Content of Clinical Study reports as per ICH Topic E3 dated July 1996 except that Long Term Survival Data will not be included in the report.

�

Full CS Report Fee

has the�meaning given to it in Clause 3.11.

�

Good Manufacturing

Practice

means the principles and guidelines of good manufacturing practice in respect of medicinal products for human use and investigational medicinal products for human use as defined in: (i) the CTD; (ii) European Community Directive 2003/94/EC; (iii) European Community Directive 2005/28/EC; (iv) Eudralex Volume 4: EU Guidelines to Good Manufacturing Practice, Medicinal Products for Human and Veterinary Use, Part II Basic Requirements for Active Substances used as Starting Materials, ICHQ7a Good Manufacturing Practice Guidance for Active Pharmaceutical Ingredients and EU Guidelines to Good Manufacturing Practice Medicinal Products for Human and Veterinary Use, Annex 13: Investigational Medicinal Products; and (v) any national legislation implementing the aforementioned Directives and any relevant guidance relating thereto.

�

hTERT Antigen

means a human telomerase antigen.

�

hTERT Licensed

Patents

�

means the patent rights listed in Schedule 1B, which were licensed to Company under the hTERT Licence.

�

hTERT Licence

means the Exclusive Sublicense Agreement between Geron Corporation and Company, effective October 1, 2013, a copy of which has been provided to the Charity.

�

ICH GCP��

means the latest version from time to time of the International Conference on Harmonisation (ICH) Tripartite Guidelines, Good Clinical Practice (CPMP/ICH/135/95) together with such other good clinical practice requirements as are specified in the CTD and in Commission Directive 2005/28/EC and in any other regulations relating to medicinal products for human use and in any guidance published by the European Commission pursuant to such Directives or regulations.

�

Immunomic/JHU

Licensed Patents

means the patent rights listed in Schedule 1G, which were licensed to Immunomic Therapeutics under the JHU License, and subsequently sublicensed to Company as result of the Immunomic License.

�

Immunomic Licence

means the Exclusive License Agreement between Geron Corporation and Immunomic Therapeutics Inc effective October 31, 2006, which was subsequently assigned by Geron Corporation to Company effective October 1, 2013, a copy of which has been provided to the Charity.

�

Independent Opinion

means the opinion of an independent expert in the field of valuation of intellectual property in a similar field to the Company Intellectual Property, appointed by agreement between the Parties or in default of such agreement within twenty one (21) days of a Party seeking in writing to the others to appoint such expert, by the President for the time being of the Association of the British Pharmaceutical Industry (ABPI) in England and Wales, referred to at Clause 13.1.

�

Intellectual Property

Rights

means all Patent Rights, Know-How, copyright, database rights, design rights, moral rights, rights in trade names, logos and trade and service marks, domain names, rights in Materials and all rights or forms of protection of a similar nature or having equivalent or similar effect to any of them which may subsist anywhere in the world, whether or not any of them are registered, including any application for registration of any of them.

�

Investigational MedicinalProduct or IMP

means the pharmaceutical formulation of the Product suitable for use in the Clinical Trial.

�

Investigational Medicinal

Product Dossier

means a dossier relating to the Investigational Medicinal Product which accompanies a request for clinical trial authorisation to conduct the Clinical Trial from a Regulatory Authority. The Investigational Medicinal Product Dossier shall include a specification of the IMP.

�

Isis Licensed Patents

means the patent rights listed in Schedule 1D, which were licensed to Company under the Isis Licence.

�

Isis Licence

means the Exclusive License Agreement between Geron Corporation and Isis Innovation Limited effective March 23, 2006, which was subsequently assigned by Geron Corporation to Company effective October 1, 2013, a copy of which has been provided to the Charity.

�

JHU Licence

means the Exclusive License Agreement between Johns Hopkins University and Immunomic Therapeutics effective September 26, 2006.

�

Know-How

means all technical and other information which is not in the public domain, including information comprising or relating to concepts, discoveries, data, designs, formulae, ideas, inventions, methods, models, designs for experiments and tests and results of experimentation and testing, processes, specifications and techniques, laboratory records, clinical data, reports, manufacturing data and information contained in submissions to Regulatory Authorities.

�

Licence

means a licence to the Clinical Trial Results and any Intellectual Property Rights therein in the form attached at Schedule 4. Such licence shall be exclusive in respect of the Exclusive Results, and non-exclusive in relation to the Non-Exclusive Results. For the avoidance of doubt, neither CRT nor the Charity shall have any obligation to supply any Materials to the Company pursuant to any Licence.

�

Long Term Survival Data

means any ongoing survival data for Clinical Trial Subjects that the Charity collects after the completion of the interventional component of the Clinical Trial.

�

Losses

means�losses, damages, costs and expenses (including reasonable legal costs and expenses).

�

Materials

means any chemical or biological substances including any: organic or inorganic element or compound; nucleotide or nucleotide sequence including DNA and RNA sequences gene; vector or construct including plasmids, phages, bacterial vectors, bacteriophages and viruses; host organism including bacteria, fungi, algae, protozoa and hybridomas; eukaryotic or prokaryotic cell line or expression system or any development strain or product of that cell line or expression systems; protein including any peptide or amino acid sequence, enzyme, antibody or protein conferring targeting properties and any fragment of a protein or a peptide enzyme or antibody; drug or pro-drug; assay or reagent; any plasma or tissue; or any other genetic or biological material or micro-organism or any transgenic animal.

�

Merix/Duke Licensed

Patents

means the patent rights listed in Schedule 1E, which were licensed to Merix Bioscience under the Duke License, and were subsequently sublicensed to Company under the Merix License.

�

Merix/Rockefeller

Licensed Patents

�

means the patent rights listed in Schedule 1F, which were licensed to Merix Bioscience under the Rockefeller License, and were subsequently sublicensed to Company under the Merix License.

�

Merix Licence

means the Exclusive License Agreement between Geron Corporation and Merix Bioscience (now Argos Therapeutics) effective March 6, 2004, and subsequently assigned by Geron Corporation to Company effective October 1, 2013, a copy of which has been provided to the charity.

�

Non-Exclusive Results

means those Clinical Trial Results that are not Exclusive Results (and all Intellectual Property Rights therein), including all assay methodology, formulation-related results or biomarker results.

�

Option

has the meaning specified in Clause 7.1.

�

Option Fee

means the sum of *** less the amount of any Full CS Report Fee actually paid by the Company to CRT under Clause 3.11 and excluding VAT or other applicable sales tax.

�

Option Period

has the meaning specified in Clause 7.1.

�

Party

means any party to this Agreement and Parties means all of them.

�

Patent Rights

means any patent applications, patents, author certificates, inventor certificates, utility models, and all foreign counterparts of them and includes all divisionals, renewals, continuations, continuations-in-part, extensions, reissues, substitutions, confirmations, registrations, revalidations and additions of or to them, as well as any Supplementary Protection Certificate, or any like form of protection (including any pediatric, orphan drug or other exclusivity granted by a Regulatory Authority beyond the expiry of the original patent expiration date).

�

Principal Investigator

means the person who will lead and co-ordinate the work of the Clinical Trial at a particular Clinical Trial site.

�

Post Development

Meeting

has the meaning given in Clause 2.7.

�

Product

means the Companys cell based therapeutic agent known as AST-VAC2 which comprises ***.

�

Product Manufacturing

Process

means a reproducible process for the manufacture and quality testing of the IMP in accordance with Good Manufacturing Practice and which meets the requirements in the Transfer Criteria and the process specifications in the Technology Transfer Plan on a scale and standard suitable to enable the Charity to produce sufficient quantities of IMP to conduct the Clinical Trial.

�

Progress Report

means a report on the status of the Clinical Trial in the format set out in Schedule 10, or in such other format as is the Charitys standard practice at the relevant time in respect of a clinical trial at the same stage, and of the same scope, as the Clinical Trial.

�

Protocol

means the clinical trial protocol to be prepared by the Charity and the Chief Investigator in accordance with the criteria described in Schedule 11, as may be amended from time to time by the Charity in accordance with Clause 3.6.

�

Recipient Party

has the meaning specified in Clause 5.2.

�

Regulatory Authority

means any local, national or supra-national agency, authority, department, inspectorate, minister, ministry official or public or statutory person (whether autonomous or not) or any government of any country as shall have jurisdiction over the Clinical Trial or any part of it or over any activity of the Parties in connection with the Clinical Trial. Regulatory Authority includes, but is not limited to, the United Kingdom Medicines and Healthcare products Regulatory Agency (MHRA), the United States Food and Drug Administration (FDA) and the European Medicines Agency (EMEA).

�

Related Product

means a cell based therapeutic agent which is not a Product but which ***.

�

Report Synopsis

a summary of the results of the Clinical Trial written by or on behalf of the Charity in accordance with the Charitys Standard Operating Procedures in a form substantially similar to the format set out in Schedule 2 and the format of the clinical study synopsis set out in Annex I of ICH Topic E3 of the ICH Guidelines for Structure and Content of Clinical Study reports dated July 1996. The Report Synopsis shall not include or contain any additional documents or any appendices, exhibits or annexes nor shall it include or contain any Data Listings, Case Report Forms or any raw data comprised within the Clinical Trial Results or cover any Long Term Survival Data.

�

Rockefeller Licence

means the License Agreement between Rockefeller University and Merix Bioscience, effective June 27, 2001, as amended June 29, 2001.

�

Specification

means the specification�of the IMP�detailed in the Investigational Medicinal Product Dossier.

�

Signature Period

means the period of *** commencing on:

�

(i)

in the event that the Charity does not prepare a Full Clinical Study Report pursuant to Clause 3.11, the Companys receipt of the Data Listings pursuant to Clause 7.3; or

�

(ii)

in the event that the Charity prepares a Full Clinical Study Report pursuant to Clause 3.11, the date of the Exercise Notice.

�

Sub-Investigator

means a clinician appointed and supervised by the Chief Investigator or Principal Investigator to assist in the carrying out of the Clinical Trial at the same trial site as the Principal Investigator.

�

Supplementary

Protection Certificate

means a right based on a patent pursuant to which the holder of the right is entitled to exclude third parties from using, making, having made, selling or otherwise disposing or offering to dispose of, importing or keeping the product to which the right relates, such as supplementary protection certificates in Europe, and any similar right anywhere in the world.

�

Technology Transfer

Plan

has the meaning given in Clause 2.6.

�

Third Party Licences

means those licences listed in Schedule 7

�

Third Party Licence Payments

means those milestone, royalty and other payments listed in Schedule 7B in respect of the Third Party Licences.

�

Tobacco Party

means: (i) any entity who develops, sells or manufactures tobacco products; and/ or (ii) any entity which makes the majority of its profits from the importation, marketing, sale or disposal of tobacco products. Furthermore, Tobacco Party shall include any entity that is an Affiliate of any entity referred to in (i) or (ii);

�

Transfer Approval Notice

has the meaning given in Clause 2.7.

�

Transfer Criteria

means criteria to be agreed between the Parties as described in Clause 2.1 that if met thereby demonstrate to the Charity that the Product Manufacturing Process for the IMP that is to be developed by the Company under the Development Work has been scaled-up to the required level and meets the required quality, validation, price and other technical, scientific and quality requirements as further described in Clause 2.1.

�

University of Western

Ontario Licensed

Patents

means the patent rights listed in Schedule 1C, which were licensed to Company under the University of Western Ontario Licence.

�

University of Western

Ontario Licence

means the Exclusive License Agreement between Geron Corporation and The University of Western Ontario effective January 30, 2009, and subsequently assigned by Geron Corporation to Company effective October 1, 2013, a copy of which has been provided to the Charity.

�

WARF Intellectual

Property

means the rights in the WARF Patents and Wisconsin Materials listed in Schedule 1H, which were licensed to the Company in the WARF Licence.

�

WARF Licence

means the Non-Exclusive License Agreement between Company and the Wisconsin Alumni Research Foundation, effective October 7, 2013, a redacted copy of which has been provided to the Charity.

�

1.2

In this Agreement:

�

1.2.1

unless the context requires otherwise, all references to a particular Clause, paragraph or Schedule shall be references to that clause, paragraph or schedule, of or to this Agreement;

�

1.2.2

the table of contents and headings are inserted for convenience only and shall be ignored in construing this Agreement;

�

1.2.3

unless the contrary intention appears, words importing the masculine gender shall include the feminine and vice versa and words in the singular include the plural and vice versa;

�

1.2.4

unless the contrary intention appears, words denoting persons shall include any individual, partnership, company, corporation, joint venture, trust, association, organisation or other entity, in each case whether or not having separate legal personality;

�

1.2.5

reference to any statute or regulation includes any modification or re-enactment of that statute or regulation, provided that the modification or re-enactment does not diminish the rights or extend the obligations of any Party; and

�

1.2.6

references to the words include or including shall be construed without limitation to the generality of the preceding words.

�

2.	PROCESS DEVELOPMENT WORK

�

2.1

As soon as is reasonably practicable (and within thirty (30) days of the Commencement Date), the Parties shall meet (either in person or by teleconference) to introduce the key members of their respective teams and to discuss the initial Development Work Plan and agree the actions and timeline for formulating the Transfer Criteria.� The Parties shall endeavour to have the Transfer Criteria in an agreed form as soon as practicable, but in any event by no later than three months before the date when the Development Work is anticipated to be completed as shown in the Development Work Plan (as that may be amended from time to time).� Without intending this to be an exhaustive list, the scope of the Transfer Criteria shall include� specific and measurable criteria for: adequate documentation of processes and conditions for product manufacture, QA and quality control; process reproducibility and success rates; cost of manufacture; process yields; process timelines and staffing requirements; GMP compliance at each stage of the Product Manufacturing Process through to preparing the IMP for patient use; IMP purity levels and ranges; and cost and availability of any special equipment or facilities required for performance of the Product Manufacturing Process, preparation of the prepared dose, and/or product release testing. The Company will carry out the Development Work at its own cost and in accordance with the Development Work Plan and the terms of this Agreement. It is understood that the Development Work Plan is likely to evolve as the Company moves through the Development Work and that the Company may need to update the Development Work Plan including the projected timings that form part of the same.� The Development Work Plan, including all drafts, iterations, and revisions of the Development Work Plan, shall be the Companys Confidential Information.

�

�� 2.2

The Company shall provide to the Charity written monthly updates on progress against the Development Work Plan (for clarity, such updates may be in the form of presentation slides from joint project team meetings)� and any necessary updates to the Development Work Plan along with any information or data which is reasonably necessary for the Charity to fully understand the then current status of the Development Work and the steps being taken to achieve the desired outcomes. The Company shall give due consideration to any comments or suggestions provided by the Charity on updates to the Development Work Plan (including making any amendments to the updated Development Work Plan which are reasonably requested by the Charity and which would impact on the Charitys ability to carry out the Product Manufacturing Process at its Biotherapeutics Development Unit).

�

�� 2.3

As the Company carries out the Development Work the Parties may also wish to amend or refine the Transfer Criteria to reflect the results of the Development Work. Either the Charity or the Company may propose changes to the Transfer Criteria with the objective of ensuring that the Transfer Criteria represent a fair and measurable set of standards that it would be reasonable for the Charity to expect to be met to show that the Product Manufacturing Process is fit for purpose prior to transfer to the Charity. Each of the Charity and the Company will consider changes to the Transfer Criteria requested by the other in good faith and shall not unreasonably withhold its agreement to a change. Any agreed changes to the Transfer Criteria will be recorded in writing and signed by the Charity and the Company.

�

�� 2.4

The Company may sub-contract activities to be performed under the Development Work Plan provided that:

�

2.4.1

the Company informs the Charity of the identity of any proposed sub-contractor and, in the event that the Charity (acting reasonably) expresses any concerns with the proposed sub-contractor, takes such concerns into consideration prior to entering into a formal agreement with the sub-contractor to carry out any Development Work;

�

2.4.2

the Company will remain fully responsible for the performance of all of the Companys obligations under this Agreement;

�

2.4.3

the terms of any sub-contract will allow the Company to fulfill its obligations under this Agreement, including with respect to acquiring necessary Intellectual Property Rights and confidentiality obligations;

�

2.4.4

no Tobacco Party shall be permitted to conduct any activities under the Development Work or otherwise in connection with the Clinical Trial; and

�

2.4.5

within twenty (20) days of entering into any subcontract, the Company shall provide the Charity with a true copy of the statement of work of that subcontract (which may be redacted as to terms not applicable to the Companys compliance hereunder).

�

2.5

As the Development Work progresses and prior to the Post Development Meeting the Company will work with the Charity to develop a Technology Transfer Plan setting out how the Parties will transfer the Product Manufacturing Process from the Company to the Charitys Biotherapeutics Development Unit and the responsibilities of each Party during and after that transfer and will include (to the extent not already covered by the Transfer Criteria):

�

2.5.1

A description of the scope of the Technology Transfer Plan that includes a table setting out the roles, responsibilities and deliverables to be supplied by each of the Company and the Charity;

�

2.5.2

Documentation requirements (define which stages require a technical or analytical summary report, documents required for importation into the UK/EU of the� Cell Line, certificates of analysis and compliance, etc);

�

2.5.3

A process description with operating parameters for the Product Manufacturing Process (this needs to be detailed with each manipulation described);

�

2.5.4

A sampling plan for use during the Product Manufacturing Process and for the final IMP with quality control test acceptance criteria (define success of tech transfer);

�

2.5.5

Transfer of Company Know-How and training requirements for Charity staff including:

�

(a)

the Charity making suitably qualified employees available to spend such time at the Company prior to transfer of the Product Manufacturing Process as reasonably required to learn the how the Product Manufacturing Process is carried out at the Company (anticipated at the Commencement Date to be in the region of two (2) Charity staff working on site with the Company for up to eight (8) weeks);

�

(b)

The Company making suitably qualified employees available to provide such on-site scientific and technical guidance at the Charitys Biotherapeutics Development Unit during and/or after transfer of the Product Manufacturing Process as reasonably required to ensure that the Product Manufacturing Process can be carried out at Biotherapeutics Development Unit on a scale and standard suitable to enable the Charity to produce sufficient quantities of IMP to conduct the Clinical Trial (anticipated at the Commencement Date to be in the region of one (1) Company staff member working on site with the Charity for four up to (4) weeks);

�

2.5.6

The Company Materials to be provided by the Company as part of the transfer of the Product Manufacturing Process, along with the quantities and specifications of such Company Materials and timing for provision;

�

2.5.7

A list of equipment requirements to enable the Charity to carry out the Product Manufacture Process;

�

The first draft of the Technology Transfer Plan was provided to the Charity by the Company on 5^th August 2014.

�

2.6

The Company will notify the Charity in writing on completion of the Development Work. Within thirty (30) days after the Company provides such notice the Parties shall meet either in person or by teleconference (the Post Development Meeting) to review whether the Transfer Criteria have been achieved and the Company has demonstrated to the Charitys reasonable satisfaction that the Product Manufacturing Process can be carried out on a scale and standard suitable to enable the Charity to produce sufficient quantities of IMP to conduct the Clinical Trial. Where this is the case the Charity will promptly provide the Company with written notice of approval of the Product Manufacturing Process (Transfer Approval Notice) and the Charity and the Company will finalise the Technology Transfer Plan. Without intending to affect the generality of foregoing it is agreed that as part of the joint review by the Parties, the Company shall make available to the Charity a report including data and conclusions generated by the Company in undertaking the Development Work. Once agreed by both the Company and the Charity the Technology Transfer Plan shall be circulated for approval and signature by the Company and the Charity.

�

2.7

If the Parties decide at the Post Development Meeting that the Transfer Criteria have not been met (or waived by the Charity) or the Company has otherwise not demonstrated to the Charitys reasonable satisfaction that the Product Manufacturing Process can be carried out on a scale and standard suitable to enable the Charity to produce sufficient quantities of IMP to conduct the Clinical Trial, then the Parties shall record that decision in writing and agree what further Development Work is required. On notice by the Company that it has completed any such further Development Work the Charity and Company will hold a further Post Development Meeting in accordance with Clause 2.6.

�

2.8

Once signed by each Party pursuant to Clause 2.6 the Charity and the Company will use commercially reasonable efforts to carry out the Technology Transfer Plan.

�

2.9

The Product Manufacturing Process, including all drafts, iterations, and revisions, shall be the Companys Confidential Information.

�

3.	CONDUCT OF THE CLINICAL TRIAL AND SPONSORSHIP

�

3.1

Subject to: (i) the Companys compliance with its obligations hereunder including the successful completion of the Development Work; and (ii) the Ethics Committee and the Regulatory Authority granting consent for the Clinical Trial, the Charity will use its reasonable endeavours to carry out or procure the carrying out of the Clinical Trial in accordance with the Protocol.

�

3.2

Once the Clinical Trial has been opened to Clinical Trial Subjects, the Charity shall use reasonable endeavours to provide to the Company at least one Progress Report per month (or with the frequency that is the Charitys standard practice at the relevant time in respect of a clinical trial at the same stage, and of the same scope, as the Clinical Trial, but no less frequently than quarterly). The Company may use the Progress Reports for the purpose of determining whether or not to exercise the Option. All Progress Reports and any supplementary information provided under them shall be the Confidential Information of the Charity and the provisions of Clause 5 shall apply. The Company acknowledges that information or data provided under this Clause 3.2 may not be verified, clean or accurate, and is provided as is. Without prejudice to the generality of Clause 8.7, neither CRT nor the Charity make any representation or warranty (express or implied) of any nature in respect of such data or information, including as to its accuracy, quality, usefulness or comprehensiveness.

�

3.3

The Charity may, at its sole discretion: (i) sub-contract to third parties including Contributors any part of the Clinical Trial; and (ii) engage such Experts and such persons to fulfil the roles of Chief Investigator and/or Principal Investigator or to assist with the Product Manufacturing Process at the Charitys Biotherapeutics Development Unit as the Charity deems appropriate.

�

3.4

The Charity shall, at its own expense, be responsible for seeking approval of the Clinical Trial and the Protocol from the Regulatory Authority and Ethics Committee prior to commencing the Clinical Trial. For the avoidance of doubt, the Charity shall not be held liable or responsible for any failure and/or refusal by the Ethics Committee or the Regulatory Authority to grant consent for the Clinical Trial or any change required therein.

�

3.5

The Charity shall use reasonable endeavours to carry out, or procure the carrying out of, the Clinical Trial in accordance with relevant aspects of:

�

3.5.1

Clinical Trial Legislation; and

�

3.5.2

ICH GCP and the Declaration of Helsinki.

�

3.6

The Charity shall have control of the preparation and approval of the Protocol, which shall conform in scope with the provisions of Schedule 11 unless otherwise mutually agreed between the Parties.� The Charity may acting reasonably amend the Protocol and/or change the third party undertaking any part of the Clinical Trial in accordance with the provisions of Clauses 3.6.1 and 3.6.2, provided that such Protocol or change to the Protocol has first been approved by the Ethics Committee and, if required by law or regulation, the Regulatory Authority and further provided that;

�

3.6.1

prior to submission for Ethics Committee approval, the Charity shall provide to the Company a copy of the first final version of the Protocol at least fourteen (14) days before seeking Ethics Committee approval and give due consideration to any comments received from the Company by the Charity within such time.

�

3.6.2

the Charity shall notify the Company in writing of any proposed changes to the Protocol that has been approved by the Ethics Commitee at least fourteen (14) days before seeking Ethics Committee approval for such changes, and shall give due consideration to any comments that the Company might make within such time. In an emergency (such as patient safety needs) the said fourteen (14) day time period may be reduced to such time period as the Charity is actually able to give to the Company in the circumstances and the Charity may, if in its reasonable opinion it is required, submit such changes to the Ethics Committee prior to notifying the Company of such;

�

The Charity will try to reach a consensus with the Company on all issues arising out of the Companys review of any Protocol pursuant to this Clause 3.6.2, but the Charity shall have the final decision save in the case where the Charity proposes to change the cancerindication, primary endpoints, to remove the monitoring of immune responses to hTERT antigen or HLA alloantigens, or to reduce the patient numbers, number of administrations per patient or dose per administration in any such case by more than *** as compared to the Protocol that has been approved by the Ethics Committee or if at the relevant time none has been approved by the Ethics Committee then the Protocol Summary in Schedule 11 in which circumstances (acting reasonably) the approval of Company shall be required.

�

3.6.3

in the event that the Ethics Committee and/or the Regulatory Authority does not approve the original Protocol, or if the Company, the Ethics Committee and/or the Regulatory Authority disapprove of any amendment to the Protocol, the Charity shall have the right to terminate this Agreement forthwith upon written notice to the Company.

�

3.7

The Charity shall have sole responsibility for the conduct and control of the Clinical Trial and shall accept the obligations of the sponsor of the Clinical Trial in accordance with the requirements of the Medicines for Human Use (Clinical Trials) Regulations 2004.

�

3.8

The Charity shall use reasonable endeavours to procure that Clinical Trial Subjects are recruited in accordance with the selection procedures and criteria set out in the Protocol.

�

3.9

The Charity shall provide the Company with safety information in accordance with the procedures and timeframes set out in Schedule 3. For the avoidance of doubt the Charity shall also be permitted to provide all safety information to CRT.

�

3.10

The Charity shall promptly advise the Company, in writing, of the occurrence of the Clinical Trial LPFV Date.

�

3.11

The Company may elect to receive a Full Clinical Study Report instead of a Report Synopsis by:

�

3.11.1

providing the Charity with written notice of its election to receive a Full Clinical Study Report, which written notice� must be received by the Charity before the expiration of fourteen (14) days from the date the Charity advised the Company of the occurrence of the Clinical Trial LPFV Date; and

�

3.11.2

paying the Charity the sum of *** excluding VAT or other applicable sales tax (the Full CS Report Fee) within twenty one (21) days after service of such notice.

�

If the Company does not serve a written notice and pay the Full CS Report Fee as specified in this Clause 3.11, the Charity shall prepare a Report Synopsis and shall have no obligation to prepare or provide the Company with a Full Clinical Study Report.

�

3.12

The Charity shall provide the Final Report to the Company and CRT within *** after the Clinical Trial Database Lock Date.

�

3.13

The Charity shall only use the Investigational Medicinal Product for the purposes of carrying out the Clinical Trial and shall not permit any third party to use the Investigational Medicinal Product except as required for the purpose of carrying out the Clinical Trial or as set out in this Agreement.

�

4.	COMPANYS OBLIGATIONS

�

4.1

The Company shall, at the Companys sole cost, provide the Charity with:

�

4.1.1

such quantities of the Company Materials as are specified in Technology Transfer Plan or, where no quantities are specified, such quantities as the Charity may reasonably request to enable the Charity to carry out the Clinical Trial;

�

4.1.2

all Company Know-How that it deems reasonably relevant to the Charitys efforts hereunder as soon as practicable following the Commencement Date;

�

4.1.3

any other information in the Companys Control pertaining to the safety of the IMP or which in the reasonable opinion of the Company may have a bearing on the conduct of the Clinical Trial as soon as the same comes to the attention of the Company;

�

4.1.4

such scientific and technical guidance as the Charity may reasonably request to enable the Charity and the Contributors to conduct and manage the Clinical Trial in a safe and proper manner, provided however, that Company shall not without its prior consent be obligated to provide scientific and technical guidance other than that described in the Tech Transfer Plan in excess of *** in total cost;

�

4.1.5

all information (including information for inclusion in the Investigational Medicinal Product Dossier) and co-operation reasonably requested by the Charity at any time from the Commencement Date to enable the Charity to compile an Investigational Medicinal Product Dossier; provided that such requested information is in the Companys Control. In the case of co-operation requested under this Clause 4.1.5, the Company shall procure (at its own cost) that any subcontractor which has performed activities or produced documents on its behalf under this Agreement is made available to the Charity on such notice, for such time and with such frequency as may be reasonably requested by the Charity. The Company shall provide information requested by the Charity within fourteen (14) days of request (or such other period as may be reasonable given the nature of the request);

�

4.1.6

all data and documentation to be provided by the Company to the Charity pursuant to the Technology Transfer Plan in the manner, and at the times, set out in the Technology Transfer Plan. If the Technology Transfer Plan does not set out specific times for certain categories of data and documentation to be provided, the Company shall provide all such data and documentation in its possession or Control at the Commencement Date (to the extent not already provided), within thirty (30) days of the Commencement Date and thereafter shall provide all such data and documentation on an ongoing basis in accordance with Clause 4.2.

�

4.2

The Company shall provide to the Charity any and all data, documentation, information and Know-How described in Clauses 4.1.1 to 4.1.6 on an ongoing basis within a reasonable time after the same comes to the Companys attention (if already in the Companys Control), or into the Companys Control, after the Commencement Date.

�

4.3

The Company shall provide the Charity with safety information in accordance with the procedures and timeframes set out in Schedule 3. For avoidance of doubt, the Charity shall be entitled to pass such safety information to CRT.

�

4.4

The Company will keep the Charity informed of the scope and results of any pre-clinical or other non-clinical studies being undertaken by or with third parties in relation to the Product. If the Company is intending to transfer the Product or undertake any new research in relation to the Product with a third party it will consult with the Charity on the scope of the intended research and the identity of the third party and take into good faith consideration any comments the Charity may have in respect to the same. This Clause should not be interpreted to limit any restrictions on the Companys use of the Product or any Related Product under Clause 6.1 or elsewhere in this Agreement.

�

4.5

The Company shall submit to CRT:

�

4.5.1

a copy of its detailed operating budget (including a quarterly cash flow and expenditure forecast) for development of the Product in respect of each Financial Year as adopted by the Companys board (the Annual Budget), at least thirty (30) days prior to the commencement of the Financial Year to which the Annual Budget relates;

�

4.5.2

quarterly management accounts of the Company (to include, inter alia, a (consolidated) profit and loss account, balance sheet and cash flow statement and shall indicate where such management accounts differ to any material extent from the Annual Budget for such period), within five (5) business days� after the date by which such financial statements are filed with the United States Securities and Exchange Commission for such period, but in no event later than fifty (50) days after quarter close for the first three financial quarters and ninety five (95) days after close of the financial year. Such quarterly management accounts shall be prepared in accordance with United States generally accepted accounting principles consistently applied.

�

4.6

The Company will maintain and will not terminate the Third Party Licences and will be solely responsible for any and all payments due under the Third Party Licences that may become due as a result of the grant of rights to the Charity under this Agreement or the carrying out the Clinical Trial in accordance with this Agreement.

�

5.	CONFIDENTIALITY/PUBLICATION

�

5.1

Subject to Clause 5.5, each Party shall keep confidential and not disclose to any third party (other than the Experts, Contributors, Ethics Committee, Regulatory Authority, and staff involved in carrying out the Clinical Trial on a need to know basis) any Confidential Information disclosed to it by another Party (the Disclosing Party) without the prior written consent of the Disclosing Party. For the avoidance of doubt, the Charity shall be permitted to disclose Confidential Information disclosed to it to CRT and CRT shall be permitted to disclose Confidential Information disclosed to it to the Charity. Any party to whom Confidential Information is disclosed in accordance with this Clause 5.1 shall be:

�

5.1.1

subject to no less onerous obligations than those contained in this Clause 5 to keep such information confidential; and

�

5.1.2

advised of its confidential nature.

�

5.2

The obligations of confidence referred to in Clause 5.1 shall not apply to any part of the Confidential Information which can be proved by evidence in writing:

�

5.2.1

was known to the recipient Party (the Recipient Party) before its disclosure by the Disclosing Party;

�

5.2.2

was available to the public before that date or was otherwise in the public domain;

�

5.2.3

becomes available to the public or enters the public domain after that date otherwise than as a result of an act or default of the Recipient Party;

�

5.2.4

is received by the Recipient Party from a third party not bound to the Disclosing Party by any obligation of secrecy;

�

5.2.5

is independently developed or generated by the Recipient Party in circumstances where it has not been derived directly or indirectly from the Disclosing Partys Confidential Information; or

�

5.2.6

is required to be disclosed by: (i) any law or statute or� any rule or regulation of any Regulatory Authority or other government or administrative agency or authority, (ii) a Regulatory Authority; or (iii) an order of any court, provided however, that in each such event the Recipient Party required to disclose the Confidential Information shall give prompt notice to the Disclosing Party of such requirement so that such Disclosing Party may seek a protective order or other appropriate remedy to the extent of such disclosure.

�

5.3

The obligations of the Parties under Clause 5.1 shall survive the expiry or termination of this Agreement for whatever reason for a period of ten (10) years from the date of such expiry or termination.

�

5.4

Each of the Parties agrees that the provisions of this Clause 5 are fair and reasonable and that money damages are not a sufficient remedy for any breach of this Clause 5 and therefore, in addition to all other remedies, all Parties shall be entitled to seek injunctive or other equitable relief as a remedy for such breach.

�

5.5

Notwithstanding any confidentiality obligations assumed by the Parties hereunder, the Parties acknowledge the importance of publications to the academic standing of the Charity and the Contributors and the capital raising, transactional, and licensing prospects and reporting and disclosure obligations of the Company under United States and other securities laws, and progress reporting obligations to licensors and sublicensors under Third Party Licences. Accordingly, the Parties have agreed as follows as regards publication of Clinical Trial Results and Progress Reports:

�

5.5.1

The Charity shall use reasonable endeavours to publish, or procure the publication by the Contributors of, the Clinical Trial Results in a timely manner in accordance with generally accepted� academic practice, whether during the course of or after completion of the Clinical Trial;

�

5.5.2

The Company may disclose the content of Progress Reports only to the extent required for (a) satisfying mandatory reporting and disclosure obligations under United States and other securities laws; or (b) to existing licensors or sublicensors of the Company in order to comply with reporting obligations in existence as at the date of this agreement under Third Party Licences, provided that in the case of (b) the disclosure will exclude all information regarding clinical responses and shall be limited to only information regarding the clinical indication, anticipated timelines of the trial, the number of patients dose, and such other information of a similar nature as may be reasonably required by the Third Party Licence;

�

5.5.3

In the event that the Company wishes to disclose the content of Progress Reports to a third party in connection with capital raising, financing, transactional, and/or licensing activities or prospects for the benefit of the Company, it shall give notice to the Charity, including details of the content of the proposed disclosure and the reason for wishing to make such disclosure, and obtain the Charitys approval before proceeding with the disclosure. The Company shall inform Charity of the identity of the third party in its notice unless it is prevented from doing so due to express confidentiality restrictions owed to the third party, in which case the Company shall state the main business area within which the� third party operates; and

�

5.5.4

It is further provided that any disclosure of the content of Progress Reports by the Company shall be subject to the following conditions: (a) all recipients shall be informed in writing beforehand of the� confidential nature of the information being disclosed and shall have agreed in writing to obligations of confidentiality in favour of the Company no less onerous than those contained in this Clause 5 (but without any right of further disclosure) to keep such information confidential; and (b) only the content of the documents containing the relevant information which has been processed into a suitable format may be disclosed but not copies of the actual documents themselves. Condition (a) above shall not apply to a disclosure by the Company for the purpose mentioned in Clause 5.5.2(a).

�

5.6

The Charity will include provisions in its contracts with the Contributor(s) that require such Contributor(s) to notify the Charity in advance of submission of any abstract, presentation or manuscript incorporating Clinical Trial Results that the Contributor(s) wish to publish or have published or to present or have presented.

�

5.7

Upon receipt of such notification from a Contributor or if the Charity wishes itself to publish or have published or to present or have presented an abstract, presentation or manuscript incorporating Clinical Trial Results the Charity shall so notify the Company and CRT and provide (in so far as it is able to do so in the case of a Contributors notification) in response to the Companys and/or CRTs reasonable request a copy or summary thereof at least seven (7) days prior to submission for publication of an abstract or presentation or at least thirty (30) days prior to submission for publication of a manuscript (or twenty one (21) days prior to submission for publication of a manuscript in the case of a Contributors notification). Any such copy or summary shall provide�sufficient details to enable the Company and CRT to ascertain whether it contains Confidential Information of the Company or CRT respectively or whether Patent Rights or other proprietary protection should be sought.

�

5.8

The Company and CRT shall review and make any comments on such intended publication or presentation of an abstract to the Charity within seven (7) days and/or shall review and make any comments on such intended publication or presentation of a manuscript within thirty (30) days. The Company and/or CRT may request that:

�

5.8.1

Confidential Information of the Company (not including Clinical Trial Results nor information directly relating to the Investigational Medicinal Product) or Confidential Information of CRT (not including Clinical Trial Results) be removed from the proposed publication or presentation; and/or

�

5.8.2

any such publication or presentation be delayed if in the Companys or CRTs reasonable opinion it is necessary to delay publication or presentation in order to file a patent application or application for other proprietary protection in respect of any invention made in the course of the Clinical Trial. Any such delay will be kept to the minimum period practicable and will in no event extend beyond thirty (30) days from the date the proposed publication or presentation was provided to the Company.

�

In the event of a request pursuant to Clauses 5.8.1 or 5.8.2, the Company or CRT (as the case may be) shall provide the Charity with a written explanation of the reasons why it believes information should be removed or a delay is necessary. For the avoidance of doubt, any Patent Rights filed pursuant to Clause 5.8.2 shall be filed in CRTs name.

�

5.9

The Charity and CRT shall be entitled to publish information in relation to the proposed Clinical Trial, including that it is or will be a trial conducted by the Clinical Development Partnerships initiative set up by the Charity and CRT, the pre-requisites for patient recruitment, a brief description of the Clinical Trial, including the name of the Company, the reference number and class of the Investigational Medicinal Product and the location(s) at which the trial is taking place.

�

6.	INTELLECTUAL PROPERTY RIGHTS

�

6.1

The Company hereby grants to the Charity:

�

6.1.1

a *** in the Field under the Company Owned Intellectual Property; and

�

6.1.2

a *** in the Field under the hTERT Licensed Patents; and

�

6.1.3

a *** in the Field under the University of Western Ontario Licensed Patents; and

�

6.1.4

a *** in the Field under the Isis Licensed Patents; and

�

6.1.5

a *** in the Field under the Merix/Duke Licensed Patents; and

�

6.1.6

a *** in the Field� on consent of Johns Hopkins University (as described in Section 2.2 of the JHU License) under the Immunomic/JHU Licensed Patents; and

�

6.1.7

a *** in the Field under the WARF Intellectual Property

in each case subject to the terms and conditions for such sub-licence described in Schedule 7A, on a royalty-free basis, and for the purpose of preparing for and carrying out (and having prepared or carried out for the Charity) the Clinical Trial. In addition the Company hereby grants to the Charity a non-exclusive, royalty free licence under the Company Intellectual Property (including the right to use Company Materials), subject to the terms and conditions for each sub-licence described in Schedule 7A, for the Charity and scientists funded by the Charity to adapt and use the Product Manufacturing Process and make and have made Products and Related Products for non-commercial research purposes, provided that such research will not include clinical research without the prior written consent of the Company on a case-by-case basis.� Such license under the Immunomic/JHU Licensed Patents shall include only rights relating to use of ***.

�

In the event the Charity reasonably determines that its Contributors require any additional sub-licence under any Third Party Licence in order to perform their activities in support of the Clinical Trial, at the Charitys request the Company agrees to use its reasonable endeavours to obtain the necessary consents under the relevant Third Party Licences to enable the Charity to grant the additional sub-licences to the Contributors or if such consent is refused in any case or in the Companys reasonable opinion is unlikely to be granted then, if it is so permitted under the relevant Third Party Licence, the Company agrees to directly sublicense the Contributors as appropriate.

�

During the term of this Agreement, the Company shall not be entitled to (and shall not authorise any of its Affiliates or any other third party to) conduct any clinical trials in respect of the Product or, save as the Parties may agree otherwise pursuant to Clause 6.2 below, any Related Product.

�

If, within *** of the Effective Date, the licensor or sublicensor of a Third Party Licence requires that a provision of a Third Party Licence be added to this Agreement on the basis that the Third Party Licence requires that the provision be included in a sublicence, the Charity, CRT and the Company shall so amend this Agreement; provided, however that if the Charity reasonably determines that the provision, if added to this Agreement, would impose upon the Charity an obligation that is not acceptable to the Charity or an obligation that would be illegal for the Charity to perform under the laws of England, then the Charity may terminate this Agreement upon *** written notice to the Company.

Notwithstanding anything to the contrary above in this Clause 6.1, or elsewhere in this Agreement, the Company acknowledges, agrees and warrants that the Charity is entitled to lawfully sub-contract in accordance with Clause 3.3 above any of the work that is contemplated by this Agreement (including work that is preparatory to any such work) without requiring any further or other consents from the Company or any third party.

�

As regards the Intellectual Property Rights that have been licensed to the Charity under clauses 6.1.4, 6.1.6 and 6.1.7 above, the Parties acknowledge the consent letters set out in the table at the top of Schedule 7 that have been obtained from the relevant head licensors.� Without affecting the Charitys rights above in this Clause 6.1:

�

(a)

if at any time the Charity wishes to additionally obtain a consent letter from the University of Western Ontario that provides freedom or greater freedom in favour of the Charity to sub-license the Intellectual Property Rights that have been licensed to the Charity under Clause 6.1.3, then upon being requested to do so, Asterias shall cooperate with the Charity and use its commercial reasonable endeavours to obtain such consent letter in the form reasonably requested by the Charity at the time; and

�

(b)

for clarity Asterias hereby represents and warrants to and for the benefit of the Charity that Asterias is entitled to grant direct sub-licences to Contributors (and any other third parties) under the� Intellectual Property Rights that have been licensed to the Charity under Clause 6.1.3 and that upon being requested to do so by the Charity at any time, Asterias shall promptly enter into such direct sub-licences with such Contributors or other third parties so as to enable the Charity to properly perform its obligations and enjoy its rights under the main body of this Agreement by means of selective sub-contracting and sub-licensing as the Charity may desire. The terms of such direct sub-licence shall be non-exclusive and free of charge and otherwise similar to the licence terms set out above in this Clause 6.1 avoiding (so far as is lawful) any restrictions or other terms that are of no relevance to the main purposes of the� sub-contract or sub-licence and excluding any right to further sub-license.

�

6.2

If at any time during the Clinical Trial the Company desires to commence a clinical study in respect of a Related Product, it shall give as much notice of this as practicable to CRT and the Charity and the Parties shall� endeavour to agree and enter into a separate agreement within ninety (90) days detailing the terms on which the desired clinical study may be commenced and carried out by the Company in respect of the Related Product. The Parties shall act in good faith to negotiate an agreement that facilitates clinical development of the Related Product while minimizing any potential negative impact on the ongoing Clinical Trial and commercial prospects for the Product.

�

6.3

The Company shall use commercially reasonable endeavours to continue to prosecute and maintain, at its own cost, all of the Company Patent Rights and to procure that where this is the responsibility of the licensor under a Third Party Licence, that the licensor similarly does so; subject to this Clause 6.3. If the Company intends to substantially narrow the scope of the claims of any patent or patent application within the Company Patent Rights it will first consult with CRT and take into good faith consideration any concerns or views expressed by CRT. If the Company elects not to prosecute or maintain any part of the Company Patent Rights, the Company shall notify CRT in writing within a reasonable period and no less than ninety (90) days prior to the expiration of any applicable time bars. After receipt of such notice, and if and to the extent permitted by the terms of the applicable Third Party Licence in the case of Company Patent Rights under a Third Party Licence, CRT may elect, before the expiry of any such time bars, by written notice to the Company, to take an assignment of any Company Patent Rights identified in such notice at CRTs sole discretion and for consideration not exceeding one pound (�1). In the event that CRT elects to take such an assignment, the Company shall promptly transfer to CRT (or any person nominated by CRT) copies of any and all documents in the Companys control relating to the filing, prosecution, maintenance, enforcement and defence of such Company Patent Rights. The Company shall not assign, charge, encumber or dispose of any interest in any of the Company Patent Rights in a manner that limits or impairs CRTs rights under the licence of Company Patent Rights pursuant to this Agreement without CRTs prior written consent or to or in favour of a Tobacco Party.

�

6.4

As between the Company and the Charity, ***. The Charity hereby ***. CRT hereby ***.

�

6.5

Subject to ***, and to the exceptions allowed for under ***, the Company shall ***.

�

6.6

Solely in connection with the Charitys and the Contributors activities performed pursuant to the Clinical Trial, where carried out in accordance with the terms of this Agreement, the Company shall not, and shall procure that its Affiliates shall not, anywhere in the world, institute or prosecute (or, other than as required by law, in any way aid any third party in instituting or prosecuting) any claim, demand, action or cause of action for damages, costs, expenses or compensation, or for an enjoinment, injunction, or any other equitable remedy, alleging the infringement by the Charity and/or any Contributors of any Patent Rights of the Company and/or any Patent Rights of the Companys Affiliates. For the avoidance of doubt, the foregoing shall not apply in respect of: (i) development, at any time, of products other than the IMP, Products or Related Products in accordance with the provisions of Clause 6.1; or (ii) any activity in relation to Products, Related Products or the IMP which constitutes a breach of the terms of this Agreement.

�

6.7

Any breach of Clause 6.6 shall be a material breach and shall accordingly entitle the Charity to terminate this Agreement under Clause 11.2.

�

6.8

CRT hereby reserves and excludes from the Option, the worldwide, perpetual and irrevocable right in and to the Exclusive Results for the Contributors and the Charity (including scientists funded and/or employed by the Charity) to:

�

6.8.1

use the Exclusive Results for the purpose of non-commercial scientific research carried out by or for or under their respective direction in accordance with their respective charitable and/or academic status, whether alone or in collaboration with a third party or third parties; and

�

6.8.2

grant licences under, and make available, the Exclusive Results solely to the extent necessary to exercise the rights under Clause 6.8.1, but not otherwise.

�

6.9

For the avoidance of doubt, CRT shall be entitled, at its discretion, at any time (including during the Option Period) to grant non-exclusive licences to the Non-Exclusive Results to any person and for any purpose.

�

6.10

In the event that the Charity is prevented or materially restricted from carrying out the Clinical Trial in accordance with this Agreement due to an actual or potential infringement of third party Intellectual Property Rights, the Charity shall have right to terminate this Agreement under Section 11.3.4 if the Company does not, within *** after the Companys receipt of notice of a claimed infringement from the third party, obtain a licence from the third party permitting the use of the third partys infringed Intellectual Property Rights by the Charity in the Clinical Trial.

�

OPTION

�

7.1

CRT grants to the Company the option, exercisable by notice to CRT in writing (the Exercise Notice) at any time during the *** (the Option Period), to enter into the Licence (the Option). Subject to Clause 6.8, the Option shall be ***.

�

7.2

Upon exercise of the Option, the Company shall pay the Option Fee to CRT within the Option Period.

�

7.3

Save where the Charity has provided a Full Clinical Study Report, CRT shall procure the provision of the Data Listings to the Company following the exercise of the Option and the receipt by CRT of the Option Fee.

�

7.4

If the Company exercises the Option, CRT and the Company shall execute the Licence within the Signature Period.

�

7.5

If either: (i) the Company does not exercise the Option within the Option Period; or (ii) following the exercise of the Option, the Company does not enter into the Licence within the Signature Period, then at any time within the period of *** following the expiry of the Option Period or Signature Period (as applicable), at CRTs request the Company shall:

�

7.5.1

provide CRT with such assistance as CRT may reasonably request to enable CRT to carry out in-depth due diligence on the Company Patent Rights and the Third Party Licences, including by providing access to true copies of the Third Party Licences and any freedom to operate searches conducted by or in the possession or control of the Company in respect of the Company Patent Rights;

�

7.5.2

provide CRT with such assistance as CRT may reasonably request in liaising with the licensors under the Third Party Licences for the purpose of obtaining direct contractual rights with such licensors;

�

7.5.3

in respect of Third Party Licences under which the Company would retain a right to use some or all of the relevant Intellectual Property Rights after entering into the CRT Licence, ***; and

�

7.5.4

promptly license the Company Intellectual Property (including by granting sub-licences under the Third Party Licences to the extent laid out in Schedule 6, and subject to the terms and conditions of, the Third Party Licences) to CRT by executing an agreement in the form attached at Schedule 6 (the CRT Licence), and CRT shall be free to license or otherwise grant rights in respect of the Clinical Trial

Results and the Intellectual Property Rights in the Clinical Trial Results on such terms and to such third parties as it shall see fit. Further Company agrees, at CRT's sole discretion (but subject to any sublicensing limitations in the underlying Third Party Licence), to issue a direct sublicence to third parties of CRTs choosing under those Third Party Licences for which Company is unable to award CRT a further sublicensable sublicence.� Any disagreement between CRT and the Company as to: (i) categorisation of Company Intellectual Property as Company Background Intellectual Property or Company Foreground Intellectual Property under the CRT Licence; or (ii) a fair and reasonable apportionment of Third Party Licence Payments under Clause 7.5.3, will be resolved by Independent Opinion in accordance with Clause 13.

�

8.	WARRANTIES AND LIMITS OF LIABILITY

�

8.1

The Charity warrants that:

�

8.1.1

it will procure the discharge of its obligations hereunder with reasonable care and skill; and

�

8.1.2

it will use its reasonable endeavours to procure that each Contributor that carries out part of the Clinical Trial ensures that where applicable the relevant Chief Investigator and/or the Principal Investigator discharge their obligations in respect of that part of the Clinical Trial in accordance with applicable ICH GCP provisions.

�

8.2

The Company warrants and represents that:

�

8.2.1

it is entitled to make the Company Materials available to the Charity for the purposes of this Agreement;

�

8.2.2

to the best of its knowledge the use and possession of the Company Materials and/or the use, possession and manufacture (in accordance with the Product Manufacturing Process) of IMP by the Charity and/or the Contributors shall not infringe the rights (including without limitation any Intellectual Property Rights) of any third party;

�

8.2.3

the Company Materials have been manufactured, handled and stored at all times in accordance with the regulatory standards agreed between the parties in the Technology Transfer Plan;

�

8.2.4

it has the full right, power and authority, and has obtained all approvals or consents necessary to grant the rights under the Third Party Licences as provided under this Agreement;

�

8.2.5

the Third Party Licences:

�

(a)

are the only third party licences held by the Company or to which the Company is entitled to acquire under options or otherwise in respect of the manufacture, possession and use of the IMP and the rights granted to the Charity under this Agreement;

�

(b)

that have been copied to CRT prior to the date of this Agreement (save for redactions that are apparent on the face of the documents) are complete and accurate and are not in the course of being varied; and

�

(c)

shall not be materially varied during this Agreement without the prior written approval of CRT, such approval not to be unreasonably withheld or delayed.

�

8.2.6

the Third Party Licence Payments are the only payments that could become payable under the Third Party Licences, excepting only patent maintenance and prosecution costs, costs arising from the defence or prosecution of any infringement or alleged infringement of any patents or other intellectual property, and indemnification costs;

�

8.2.7

to the best of its knowledge and belief there are no outstanding breaches of the Third Party Licences by the Company; and

�

8.2.8

to the best of its knowledge and belief no acts or omissions have occurred which would give one or more of its licensors the right to terminate a Third Party Licence, either now or at a later date

�

8.3

The Company warrants and represents that all information and Know-How supplied to the Charity and/or CRT pursuant to this Agreement (including any safety information) shall be accurate and complete and shall be supplied as soon as practicable following the Commencement Date (or as otherwise specified herein) to enable the Charity to conduct and manage the Clinical Trial in a safe and proper manner.

�

8.4

Nothing in this Agreement shall exclude or limit the liability of any Party for death or personal injury resulting from its negligence or the negligence of its employees while acting in the course of their employment or shall exclude or limit the liability of any Party for fraud.

�

8.5

Subject to Clause 8.4, the entire aggregate liability for any loss or damage arising from any act or omission relating to this Agreement or its subject matter regardless of the form of action, whether in contract or tort (including in each case negligence), strict or statutory liability or otherwise,:

�

8.5.1

of the Charity and CRT to the Company excluding the liability of the Charity or CRT under Clause 9.1.1, shall be limited to *** in aggregate and the liability of the Charity or CRT under Clause 9.1.1 shall be limited to *** in aggregate;

�

8.5.2

of the Company to CRT and the Charity excluding the liability of the Company under Clause 9.2.1, shall be limited to *** in aggregate and the liability of the Company under Clause 9.2.1 shall be limited to *** in aggregate.

�

8.6

To the fullest extent permissible by law, no Party shall under any circumstances be liable to any other for any loss of revenue, business, contracts, anticipated savings, profits, data or information, or any indirect or consequential loss howsoever arising whether from negligence, breach of contract or otherwise.

�

8.7

Save to the extent otherwise provided in this Agreement, each Party specifically excludes to the extent permitted by law all warranties, representations, and conditions regarding the performance of its obligations under this Agreement including those implied by law, whether as to suitability, quality or fitness for any purpose or otherwise.

�

9.	INDEMNITIES

�

9.1

Subject to Clause 8.5, the Charity shall indemnify and hold the Company its officers, and employees and its licensors and sub-licensors under Third Party Licences (the Company Indemnitees) harmless from and against:

�

9.1.1

***; and

�

9.1.2

***

�

9.1.3

in either case under Clauses 9.1.1 and 9.1.2 above� arising out of the conduct of the Clinical Trial by the Charity;

�

9.1.4

save in either case where such claims and proceedings, losses, damages, costs or expenses arise as a consequence of (i) any wrongful act or omission and/or negligence of any of the Company Indemnitees; (ii) a breach of this Agreement by the Company; or (iii) a misrepresentation by the Company. It is a condition of this indemnity that the Company hands over or procures the hand over (as the case may be) of control of the matter to the Charity, gives or procures (as the case may be) such information and assistance as the Charity may reasonably request in connection with the matter, and allows or procures, (as the case may be) that the Charity has exclusive conduct of the matter and any ensuing legal proceedings;

�

9.1.5

and provided always that the foregoing indemnity given in respect of liability owed by the Company to its licensors and sub-licensors under Third Party Licences shall apply only to the extent that the relevant Third Party Licence contractually requires the Company to indemnify the licensor or sublicensor against such liability.

�

9.2

Notwithstanding the provisions of Clause 9.1 above and any other restrictions on liability contained in this Agreement, but subject to Clause 8.5 above, the Company shall indemnify and hold the Charity, CRT, the Contributors, the Experts and their respective officers, employees and agents harmless from and against all:

�

9.2.1

***; and

�

9.2.2

***;

�

9.2.3

in either case under Clauses 9.2.1 and 9.2.2 above arising out of: (i) any failure or delay on the part of the Company to provide relevant or accurate Company Know-How and other information relating to the storage, manufacture, quality assurance, use and safety of any of the Company Materials; and/or (ii) any wrongful act or omission and/or negligence of the Company (or any third party engaged by the Company) ***; and

�

9.2.4

alleging infringement of a third partys Patent Rights or other Intellectual Property Rights resulting from use of Company Intellectual Property or Company Materials in the course of or in consequence of the performance of the Clinical Trial or by importation, storage, manufacture, supply or use of any of the Company Materials and/or Product as permitted by this Agreement; provided always that

�

9.2.5

it is a condition of the indemnity that the Charity and CRT hand over or procure the hand over (as the case may be) of control of the matter to the Company, and give or procure (as the case may be) such information and assistance as the Company may reasonably request in connection with the matter, and allow or procure, (as the case may be) that the Company has exclusive conduct of the matter and any ensuing legal proceedings.

�

9.3

The indemnities set out in Clauses 9.1 and 9.2 shall survive the expiration or termination of this Agreement for whatever reason.

�

9.4

The Charity shall ensure that all Clinical Trial Subjects receive the benefit of a no-fault compensation scheme substantially in the form attached at Schedule 5 hereto. Subject to the indemnity in Clause 9.2, the Charity shall bear all costs associated with the provision of such compensation scheme including in relation to all claims received pursuant to such scheme.

�

9.5

The Company shall to the extent reasonably possible carry liability insurance coverage for potential liabilities which the Company may directly or indirectly have to Clinical Trial Subjects or under Clause 9.2.1 of this Agreement in amounts equal to at least *** per occurrence combined single limit and *** annual aggregate coverage. The Company shall maintain such insurance in full force throughout the term of the Agreement and shall upon request of the Charity provide such evidence of compliance as the Charity deems sufficient.

�

10.	ASSIGNMENT

�

10.1

No Party shall assign its rights under this Agreement or any part thereof; provided that the Company may assign its rights and obligations to a third party in connection with any merger or consolidation of the Company with another business entity, or in connection with the sale of all or a substantial part of its business and related assets that includes its business in relation to the Product, other than a merger or consolidation with or a sale of assets to a Tobacco Party and provided that the Company obtains a direct covenant from the acquiring party to CRT and the Charity� undertaking to be bound by the terms of this Agreement. Save as set out in this Agreement, no Party shall sub-contract the performance of all or any of its obligations under this Agreement without the prior written consent of the other Parties.

�

11.	TERM AND TERMINATION

�

11.1

Unless terminated earlier pursuant to the provisions hereunder, and except as otherwise provided hereunder, this Agreement shall remain in full force and effect from the Commencement Date until the earlier of the date that:

�

11.1.1

The Company enters into the Licence pursuant to Clause 7.4; or

�

11.1.2

The Company licenses the Company Intellectual Property to CRT pursuant to Clause 7.5; or

�

11.1.3

The *** period following the expiry of the Option Period or Signature Period described in Clause 7.5 has expired without request from CRT to execute the CRT Licence.

�

11.2

Any of the Parties hereto may at any time terminate this Agreement, but shall not be obliged to do so, upon written notice to the other Party (being the Charity and CRT where the terminating Party is the Company, or the Company where the terminating Party is the Charity or CRT) under the following circumstances:

�

11.2.1

in the event that the other Party commits a material breach of this Agreement and does not fully remedy, if capable of remedy, the same within sixty (60) days of its receipt of written notice of the breach from any other Party;

�

11.2.2

in the event, in respect of a Party, a voluntary arrangement is proposed or approved or an administration order is made, or a receiver or administrative receiver is appointed of any of such Partys assets or undertakings or a winding-up resolution or petition is passed (otherwise than for the purpose of solvent reconstruction or amalgamation) or if any circumstances arise which entitle a court or a creditor to appoint a receiver, administrative receiver or administrator or make a winding-up order or similar or equivalent action is taken against or by such Party by reason of its insolvency; or

�

11.2.3

If the required approval of the Ethics Committee or applicable Regulatory Authority for the commencement of the Clinical Trial is not obtained within *** of both the Technology Transfer Plan being completed and the Parties agreeing that the Transfer Criteria have been met, or if any approval granted is revoked, withdrawn, or otherwise terminated, or if an applicable Regulatory Authority orders a halt or hold on the Clinical Trial of greater than *** in duration. No right of termination arising under this Clause 11.2.3 may be exercised by a Party unless it has first notified the other Parties of its wish to terminate and entered into good faith discussions over a period of not less than thirty (30) days with the other Parties to review and discuss the circumstances with a view to avoiding a termination without affecting the purposes contemplated by this Agreement.

�

11.3

The Charity shall have the right to terminate this Agreement forthwith, upon written notice to the Company:

�

11.3.1

in accordance with Clause 3.6;

�

11.3.2

if the Charity is not satisfied that the Product Manufacturing Process can be carried out on a scale and standard suitable to enable the Charity to produce sufficient quantities of IMP to conduct the Clinical Trial including an inability for technical or other reasons to produce the desired quantity of IMP;

�

11.3.3

if the Charity faces budget constraints that require a reduction in its development portfolio; or

�

11.3.4

if the Charity reasonably believes that proceeding with the Clinical Trial would: (i) be unsafe or otherwise counter to the best interests of Clinical Trial Subjects; ii) be counter to changes in the business plan or research strategy of the Charity iii) be counter to� recommendations made by the committee established by the Charity to regularly review the Charitys clinical portfolio; (iv) involve increases of more than *** to anticipated timelines, including due to difficulties with patient recruitment or unforeseen regulatory hurdles; (v) be unlikely to achieve the primary and/or secondary endpoints of the Protocol; (vi) fail to reach such defined go/no-go criteria as have been previously agreed upon by the Company and the Charity; or (vii)� � infringe any third party Intellectual Property Rights and the Company does not obtain a licence entitling the Charity to use such Intellectual Property Rights in the Clinical Trial as provided in Clause 6.10; or

�

11.3.5

in accordance with the last sentence of Clause 6.1.

�

11.4

The Charity shall have the right to terminate this Agreement forthwith, upon written notice to the Company If, by way of merger, acquisition or otherwise, the Company becomes a Tobacco Party.

�

11.5

The Parties may by mutual written agreement terminate this Agreement for any reason, including, if in their opinion the objectives of the Clinical Trial cannot be achieved.

�

12.	CONSEQUENCES OF TERMINATION

�

12.1

In the event of termination of this Agreement by the Company:

�

12.1.1

subject to Clause 12.1.3 and 12.8, the Charity shall, within thirty (30) days, return to the Company or destroy (by a method specified by the Company) and at the Companys cost and expense any remaining quantities of the Company Materials and/or Confidential Information of the Company in the Charitys possession or control;

�

12.1.2

where the Charity has commenced the Clinical Trial, the Charity shall within thirty (30) days of finalisation of the last Case Report Form submit to the Company copies of all completed Case Report Forms and Data Listings for the Clinical Trial. The Charity shall be entitled to retain the original Case Report Forms for its own records; and

�

12.1.3

where the Charity has commenced the Clinical Trial, the Charity shall nonetheless be entitled to continue to manufacture the Investigational Medicinal Product� and continue to provide such Investigational Medicinal Product to: (i) any particular Clinical Trial Subject who has commenced treatment; and/or (ii) any Clinical Trial Subject where the Regulatory Authority and/or Ethics Committee request or require that such provision occurs, unless, in either case, termination occurs under Clause 11.2.3 or 11.5.

�

12.2

In the event of any termination of this Agreement pursuant to Clause 11.2.1 or Clause 11.2.2 by CRT or the Charity:

�

12.2.1

the Option shall lapse forthwith;

�

12.2.2

the Company shall within thirty (30) days of the date of such termination reimburse the Charity all Costs; and

�

12.2.3

the Charity shall be entitled to (as applicable) commence and complete the Clinical Trial and the Company shall provide the Charity with the necessary assistance to allow the Charity to do so. For the avoidance of doubt, the licence granted by the Company under Clause 6.1 shall continue to the extent necessary to allow the Charity to commence and complete the Clinical Trial; provided, that upon completion or termination of the Clinical Trial the Charity shall, within thirty (30) days return to the Company or destroy (by a method specified by the Company) and at the Companys cost and expense any remaining quantities of the Company Materials and/or Confidential Information of the Company in the Charitys possession or control.

�

12.3

In the event of termination of this Agreement pursuant to Clause 11.3 by the Charity or pursuant to Clause 11.5:

�

12.3.1

subject to Clause 12.3.2 and 12.8, the Charity shall, within thirty (30) days, return to the Company or destroy (by a method specified by the Company) and at the Companys cost and expense any remaining quantities of the Company Materials and/or Confidential Information of the Company in the Charitys possession or control;

�

12.3.2

except for termination under Clause 11.3.4, where the Charity has commenced the Clinical Trial, the Company shall nonetheless continue to permit the Charity to continue to provide Investigational Medicinal Product to: (i) any particular Clinical Trial Subject who has commenced treatment; and/or (ii) any Clinical Trial Subject where the Regulatory Authority and/or Ethics Committee request or require that such provision occurs;

�

12.3.3

where the Charity and CRT consider it appropriate to do so in light of the reason for termination, for a period of thirty (30) days from the date of termination (or such longer period as CRT may notify) CRT will offer the Company the option, exercisable by written notice to CRT, to enter into the Licence in respect of those Clinical Trial Results in existence at the date of termination and subject to agreement between CRT and the Company on amended financial and other terms for the Licence to reflect that the Clinical Trial was not completed. If the Parties have not been able to agree amended financial terms within thirty (30) days of the date CRT receives the Companys exercise notice the Parties at their joint cost and expense shall obtain an Independent Opinion on a fair and reasonable reduction to the financial terms.

�

12.4

In the event of termination of this Agreement pursuant to Clause 11.2.3, the Charity shall, within thirty (30) days, return to the Company or destroy (by a method specified by the Company) and at the Companys cost and expense any remaining quantities of the Company Materials and/or Confidential Information of the Company in the Charitys possession or control.

�

12.5

Termination of this Agreement for whatever reason shall not affect the accrued rights of the Parties arising out of this Agreement as at the date of its termination.

�

12.6

The provisions of the following Clauses shall survive the expiration or termination of this Agreement 5 (Confidentiality/Publication), 6.3 (Assignment of Clinical Trial Results to CRT), 6.5 (Covenant not to sue), 8.4 to 8.6 inclusive (Limits or exclusion of liability), 8.7 (Exclusion of other warranties), 9 (Indemnities), 10 (Assignment), 12 (Consequences of termination), 13 to 23 inclusive (Dispute Resolution to Third Party Rights inclusive).

�

12.7

The Charity shall retain copies of the Companys Confidential Information and the Clinical Trial Results in accordance with ICH GCP and as otherwise required under the Charitys obligations as Sponsor of the Clinical Trial.

�

13.	DISPUTE RESOLUTION

�

13.1

Insofar as this Agreement provides that a matter shall be resolved by Independent Opinion, the opinion of the appointed independent expert (who shall act as an expert and not as an arbitrator) shall be final and binding on the Parties. In the event of a Party seeking an Independent Opinion under this Agreement, each Party shall make written submissions to the expert and to the other Parties within fourteen (14) days of the appointment. Each Party shall have seven (7) days to respond to the others submissions. The expert shall be requested to deliver his Independent Opinion within a further thirty (30) days. The costs of any Independent Opinion shall be borne in such proportions as the expert may determine in his Independent Opinion to be fair and reasonable in all the circumstances or, if no such determination is made in the Independent Opinion, by the Parties in equal proportions.

�

13.2

It shall be a condition precedent to the commencement of any action in court or other tribunal (save an action for an interim injunction or an Independent Opinion sought under Clause 13.1) in respect of any dispute relating to this Agreement that the Parties have sought to resolve the dispute by one Party notifying the others in writing for resolution to the Chief Executive Officer of CRT, the Director of Drug Development of the Charity and the CEO of the Company (or their express delegates) (the Representatives) who shall meet (whether in person or via teleconference) within twenty one (21) days of such notice to seek resolution in good faith. If the Representatives are unable to resolve the dispute at such meeting, any Party may pursue any remedy available to such Party at law or in equity, subject to the terms and conditions of this Agreement and the other agreements expressly contemplated hereunder.

�

13.3

This Agreement shall be governed by and construed in accordance with English Law and, subject to the provisions of Clause 13.1 and 13.2, each Party agrees to submit to the exclusive jurisdiction of the English Courts (except in respect of disputes under Clause 5 where jurisdiction is non-exclusive).

�

14.

NOTICES

�

14.1

Any notice or other document to be given under this Agreement shall be in writing and shall be deemed to have been given:

�

14.1.1

upon delivery if given in person; or

�

14.1.2

upon confirmation of receipt if sent by facsimile (or other similar means of electronic communication such as email); or

�

14.1.3

(if posted to an inland destination) three (3) business days after deposit into First Class post;

�

14.1.4

(If posted to an overseas destination) five (5) days after deposit into airmail post; or

�

14.1.5

upon delivery by air delivery service;

�

to a Party at the address or fax number set out below for such Party or such other address as the Party may from time to time designate by written notice to the other Parties.

Address of the Company

Asterias Biotherapeutics

230 Constitution Dr

Menlo Park, CA 94025

Contact:�� Legal/contracts

Fax:�� 001 650 433 2900

Address of the Charity

Cancer Research UK

Angel Building

407 St. John Street

London EC1V 4AD

England

Contact:��Director of Drug Development

Fax:�� +44 (0) 20 7121 6700

With a copy to:

Cancer Research UK

Angel Building

407 St. John Street

London EC1V 4AD

England

Contact:��Hayley Farmer

Fax:��+44 (0) 20 7121 6700

Address of CRT

Cancer Research Technology Limited

Angel Building

407 St. John Street

London

EC1V 4AD

United Kingdom

Contact:�� Chief Executive Officer

Fax:�� +44 (0) 20 3014 8633

�

15.

WAIVER

�

15.1

No failure or delay on the part of any Party hereto to exercise any right or remedy under this Agreement shall be construed as or operate as a waiver thereof nor shall any single or partial exercise of any right or remedy under this Agreement preclude the exercise of any other right or remedy or preclude the further exercise of such right or remedy as the case may be.

�

16.	FORCE MAJEURE

�

16.1

No Party shall be liable to any other Party or shall be in default of its obligations hereunder if such default is the result of any cause beyond the reasonable control of the Party affected including war, hostilities, revolution, civil commotion, strike, epidemic, accident, fire, wind, flood or because of any act of God . The Party affected by such circumstances shall promptly notify the other Parties in writing when such circumstances cause a delay or failure in performance (a Delay) and where they cease to do so. In the event of a Delay lasting for twenty six (26) weeks or more either of the non-affected Parties shall have the right to terminate this Agreement immediately by notice in writing to the affected Party.

�

17.	SEVERABILITY

�

17.1

If and to the extent that any court or tribunal of competent jurisdiction holds any of the terms, provisions or conditions or parts thereof of this Agreement, or the application hereof to any circumstances, to be invalid or to be unenforceable in a final non-appealable order, the remainder of this Agreement and the application of such term, provision or condition or part thereof to circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby, and each of the other terms, provisions and conditions of this Agreement shall be valid and enforceable to the fullest extent permissible by law.

�

18.	ENTIRE AGREEMENT

�

18.1

This Agreement embodies and sets forth the entire agreement and understanding of the Parties and supersedes all prior oral or written agreements, understandings or arrangements relating to the subject matter of this Agreement. No Party shall be entitled to rely on any agreement, understanding or arrangement which is not expressly set forth in this Agreement unless otherwise agreed between the Parties and recorded in writing. In the event of any inconsistency between this Agreement and the Protocol, the terms of this Agreement shall govern.

�

19.

AMENDMENT

�

19.1

This Agreement shall not be amended, modified, varied or supplemented except in writing signed by duly authorised representatives of the Parties.

�

19.2

The Charity shall at all times be free to amend, modify, vary or supplement any of the Charitys Standard Operating Procedures.

�

20.	PUBLIC ANNOUNCEMENTS

�

20.1

The text of any press release, shareholders report or other communication to be published�or disclosed in any way by or on behalf of the Company by or in the media concerning the Charity, the Contributors or the Experts, the subject matter of this Agreement or concerning this Agreement itself, other than as required by law or by any regulatory or government authority or the rules of any securities exchange, shall be submitted to the Charity and CRT at least seven (7) days in advance of publication or disclosure for approval, such approval not to be unreasonably withheld; provided, that disclosure that repeats or restates prior public disclosure permitted by this Agreement need not be submitted to the Charity or CRT for approval.

�

21.

PAYMENTS

�

21.1

All payments due to CRT and the Charity under this Agreement shall be made in cleared funds in pounds sterling to the bank accounts nominated by CRT and the Charity respectively from time to time. All costs of transmission shall be borne by the Company.

�

21.2

All payments under this Agreement are expressed to be exclusive of value added tax howsoever arising, which the Company shall pay in addition to those payments.

�

21.3

Save as expressly set out in Clause 7.2, all amounts due under this Agreement shall be paid in full without any deduction or withholding other than as required by law and the Company shall not be entitled to assert any credit, set-off or counterclaim against CRT or the Charity in order to justify withholding payment of any such amount in whole or in part.

�

21.4

Where a Party does not receive payment of any sums due to it by the due date, interest shall accrue both before and after any judgement on the sum due and owing to such Party at the rate equivalent to an annual rate of four percent (4%) over the then current base rate of Natwest Bank, calculated on a daily basis, until the full amount is paid, without prejudice to such Partys right to receive payment on the due date.

�

22.	DATA PROTECTION

�

22.1

The Parties attention is drawn to the Data Protection Act 1998, Directive 95/46/EC of the European Parliament and any national or European legislation and/or regulations implementing them or made in pursuance of them (all referred to together as the Data Protection Requirements).

�

22.2

Each Party warrants that it will observe all its obligations under the Data Protection Requirements which arise in connection with the performance of this Agreement and in particular that it will process and use any personal data fairly and lawfully.

�

23.	THIRD PARTY RIGHTS

�

23.1

Save for the third parties identified in Clauses 5.5 (Contributors right to publish), 6.5 (Covenant not to sue), 9.1 and 9.2 (Indemnities) and 9.3 (No fault compensation scheme), who shall have the benefit of those respective Clauses, this Agreement shall not create any rights that shall be enforceable by anyone other than the Parties to this Agreement. The rights created in Clauses 5.5, 6.5, 9.1, 9.2 and 9.3 may be altered or extinguished by the Parties without consent of any third party beneficiary of such rights.

�

24.

EXECUTION

�

24.1

This Agreement may be executed in any one or more number of counterpart agreements, and as scanned email attachments, and all signatures and counterparts so exchanged shall be considered as original and shall be deemed to form part of and together constitute this Agreement.

�

IN WITNESS whereof this Agreement has been executed by duly authorised officers of the Parties on the day first above written.

Signed by:	***	�
�	�	�
Name:	�***
Title:	�***
�
�	For and on behalf of
�	CANCER RESEARCH TECHNOLOGY LIMITED

�

Signed by:	***	�
�	�	�
Name:	�***
�
Title:	�***
�
�	For and on behalf of
�	CANCER RESEARCH UK

�

Signed by:	�/s/ Pedro Lichtinger	�
�	�	�
Name:	�/s/ Pedro Lichtinger
�
Title:	CEO
�
�	For and on behalf of
�	ASTERIAS BIOTHERAPEUTICS, INC.

�

Schedule 1

Company Patent Rights

�

Schedule 1A:�

Company Owned Patent Rights

File #	Title	Country	App # / Patent #	Status	Filing date	Expiration date
***	***	***	***	***	***	***

�

Schedule 1B: hTERT Licensed Patents

File #	Title	Country	App #/ Patent #�	Status	Filing date	Expiration date
***	***	***	***	***	***	***

Schedule 1C:� University of Western Ontario Licensed Patents

File #	Title	Country	App #/ Patent #�	Status	Filing date	Expiration date
***	***	***	***	***	***	***

�

Schedule 1D:

Isis Licensed Patents

File #	Title	Country	App #/ Patent #��	Status	Filing date	Expiration date
***	***	***	***	***	***	***

�

Schedule 1E:

Merix/Duke Licensed Patents

File #	Title	Country	App #/ Patent #��	Status	Filing date	Expiration date
***	***	***	***	***	***	***

�

Schedule 1F:

(intentionally blank)

�

Schedule 1G:� Immunomic/JHU Licensed Patents

***

�

Schedule 1H:

WARF Intellectual Property

WARF Patents

WARF

REFERENCE

NUMBER

COUNTRY

APPLICATION

SERIAL

NUMBER

FILING DATE

PATENT

NUMBER

***

Wisconsin Materials

***

�

Schedule 2

Report Synopsis Headings

�

� Name of Sponsor/Company: � �	� Individual Study Table Referring to Part of the Dossier � Volume: � Page:
� Name of Finished Product: �
� Name of Active Ingredient: �
� Title of Study: �
� Investigators: �
� Study Centre(s): �
� Publication (reference): �
� Studied period (years): (date of first enrolment) � (date of last completed) �	� Phase of development:
� Objectives: �
� Methodology: �
� Number of Patients (planned and analysed): �
� Diagnosis and main criteria for inclusion: �
� Test product, dose and mode of administration, batch number: �
� Duration of treatment: �
� Reference therapy, dose and mode of administration, batch number: �

�

� Name of Sponsor/Company: � �	� Individual Study Table Referring to Part of the Dossier � Volume: � Page:
� Name of Finished Product: �
� Name of Active Ingredient: �
� Criteria for evaluation: � Efficacy: � Safety: �
Statistical methods: �
� SUMMARY CONCLUSIONS � EFFICACY RESULTS: � SAFETY RESULTS: � CONCLUSION: � Date of the report:

�

Schedule 3

Safety Information

Cancer Research UK and Asterias Biotherapeutics Inc. have entered into a clinical trial agreement (the Clinical Trial Agreement) (of which this document is Schedule [3]) under which they agreed to collaborate in connection with a Phase [I/II] clinical trial of the Investigational Medicinal Product in� accordance with the Protocol.

B.	The procedure in this Schedule describes how safety information regarding the Investigational Medicinal Product (IMP) will be communicated as it becomes known.

1	DEFINITIONS

Adverse Event (or AE) means any untoward medical occurrence in a patient or clinical trial subject administered a medicinal product, which does not necessarily have a causal relationship with this treatment.

An AE can therefore be any unfavourable and unintended sign (including an abnormal laboratory finding, for example), symptom or disease temporally associated with the use of a medicinal product, whether or not considered related to the medicinal product.

An AE includes but is not limited to:

�

a clinically significant worsening of a pre-existing condition. This includes conditions which may resolve completely and then become abnormal again;

�

an AE occurring from an overdose of an IMP, whether accidental or intentional; and

�

an AE occurring as a result of a quality issue with a batch of IMP.

Other reportable events which must be treated as AEs include:

�

pregnancy exposure to an IMP.� Any pregnancy occurring in a patient or a patients partner during treatment with an IMP or occurring within six months of the last dose of study drug administration, must be reported within the same timelines as a Serious Adverse Event (as defined below), even if the patient has been withdrawn from the clinical trial;

�

overdose with or without an AE;

�

inadvertent or accidental exposure to an IMP with or without an AE; and

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any adverse event which is serious and which could be related to the protocol procedures, and which could modify the conduct of the clinical trial.

Development International Birth Date (or DIBD) means the first date that clinical trial authorisation is given by a Regulatory Authority for an interventional clinical trial using the IMP anywhere in the world.

Development Safety Update Report (or�DSUR)�means a periodic safety report in relation to use of the IMP in the Clinical Trial which: (i) is written by or on behalf of the Charity in accordance with the Charitys Standard Operating Procedures; (ii) meets the standards of the ICH Guidelines for Development Safety Update Reports as per ICH Topic E2F; and (iii) is required to be submitted annually to the Regulatory Authority in each ICH member state in which the clinical trial is conducted (and to the applicable Ethics Committee) within 60 days of the anniversary of the date of the DIBD.

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Global Development Safety Update Report (or�GDSUR)�means a periodic safety report in relation to use of the IMP in two or more clinical trials which: (i) meets the standards of the ICH Guidelines for Development Safety Update Reports as per ICH Topic E2F; and (ii) is required to be submitted annually to the Regulatory Authority in each ICH member state in which the clinical trial is conducted (and to the applicable Ethics Committee) within 60 days of the anniversary of the date of the DIBD.

Investigators Brochure (or IB) means a compilation of the clinical and non-clinical data on the Investigational Medicinal Product or products which are relevant to the clinical trial of the product or products in human subjects.

Medically Important Event (or MIE) means any event that may jeopardise the patient or may require intervention to prevent one of the outcomes listed above.� The Charity may identify certain events which must be treated as medically important by both Parties, and subject to expedited reporting.

Serious Adverse Event (or SAE) means any untoward medical occurrence or effect (an adverse event) that at any dose, regardless of causality or expectedness, results in:

�

death;

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is life-threatening;

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requires in-patient hospitalisation or prolongs existing in-patient hospitalisation;

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results in persistent or significant incapacity or disability;

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is a congenital anomaly or birth defect; or

�

is any other Medically Important Event (as defined below).

These characteristics/consequences have to be considered at the time of the event.� For example, regarding a life- threatening event, this refers to an event in which the subject was at risk of death at the time of the event; it does not refer to an event which hypothetically might have caused death if it were more severe.

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Suspected Unexpected Serious Adverse Reaction (or SUSAR) means all serious adverse events that are suspected to be related to an investigational medicinal product and that are unexpected.

Sponsor means an individual, company, institution or organisation which takes responsibility for the initiation, management and/or financing of a clinical trial.

All capitalised words shall have the same meaning as in the Clinical Trial Agreement unless expressed otherwise.

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PROCEDURE

2.1	Reporting of SAEs

2.1.1

Reporting of SAEs by the investigational sites to the Company or the Charity, as the case may be

The Company shall, if it (or any of its licensees or sub-licensees) is carrying out clinical trials on Related Products, use all reasonable endeavours to

�

monitor, and ensure that it receives from the investigational site within twenty four (24) hours of the investigator or any member of the study team becoming aware of the event) initial reports on SAEs from clinical trials of the Related Products; and

�

actively seek follow-up information from the investigational site on SAEs from clinical trials of the Related Products until full details (including diagnosis if available, causality,� outcome and cause of death if fatal) are reported.

The Charity shall use all reasonable endeavours to:

�

monitor, and ensure that it receives from the investigational site within twenty four (24) hours of the Principal� Investigator or any member of the study team becoming aware of the event) reports on SAEs from the Clinical Trial; and

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actively seek follow-up up information from the investigational site on SAEs from the Clinical Trial until full details (including diagnosis if available, causality, outcome, and cause of death if fatal) are reported.

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2.1.2

Reporting of SAEs to the other Party

Within seven (7) calendar days of receipt by the Company for fatal and life-threatening SUSARs (where day 0 is the day the Company became aware of the event) and within fifteen (15) calendar days of receipt by the Company for all other SUSARs, the Company shall report to the Charity all initial and follow-up information on all SUSARs from clinical trials with the Related Products for which the Company is the Sponsor.

The reports shall be in the form of a CIOMS or MedWatch form.

The Company shall send reports preferably as e-mail attachments, or alternatively by fax, to:

Pharmacovigilance Group

Drug Development Office

Cancer Research UK

E-mail: [email protected]

Fax +44 20 7983 9547

Within seven (7) calendar days of receipt by the Charity for fatal and life-threatening SUSARs (where day 0 is the day the Charity became aware of the event) and within fifteen (15) calendar days of receipt by the Charity for all other SUSARs, the Charity shall report to the Company all initial and follow-up information on all SUSARs from clinical trials with the IMP for which the Charity is the Sponsor.

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The reports shall be in the form of a CIOMS form.

The Charity shall send reports preferably as e-mail attachments, or alternatively by fax, to:

Asterias Biotherapeutics

Attn: Medical Monitor

230 Constitution Dr.

Menlo Park, CA 94025

Fax:� (650)433-2998

[email protected]

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2.1.3

Late Reports

If either Party fails to provide reports to the other Party within the timelines described above, they must provide to the other Party a legitimate reason for lateness and immediately provide evidence of corrective action taken.

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2.2	Expedited Reporting to Regulatory Authorities and Ethics Committee(s)

Each Party shall fulfil its local regulatory obligations in relation to the clinical trials it Sponsors.

The Company will report to the appropriately all SUSARs originating from clinical trials with the Related Products for which it is the Sponsor.

The Charity will report to appropriately all SUSARs originating from clinical trials with the Investigational Medicinal Product for which it is the Sponsor.

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2.3	Quarterly Exchange of Line Listings

During the currency of the clinical trials, with a view to reconciling SAEs between the Parties, a line listing of all SAEs received during the previous quarter originating from clinical trials with the IMP for which the Party is the Sponsor shall be exchanged between the Parties on a quarterly basis

Each line listing shall include sufficient information to identify the patient and the event, i.e., case reference, study ID, patient ID, (Number, age and gender) SAE (verbatim term), date event(s) became serious, investigator causality to IMP, maximum grade using NCI CTCAE criteria, and outcome of event.

Each Party shall send line listings preferably as e-mail attachments, or alternatively by fax, to the contact details specified in 2.1.2.

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2.4	Trials of Related Product(s)

The Company shall keep the Charity informed about clinical trials in which the Related Products arebeing used. The Company shall do this by providing to the Charity for each clinical trial a summary protocol and a summary of all protocol amendments relating to safety on an ongoing basis.� The Company will be open to questions on safety issues arising from these documents.

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2.5	Development Safety Update Report

2.5.1

In the event that the Clinical Trial is the only clinical trial being conducted on the IMP anywhere in the world, the Charity will be responsible for the preparation and submission of the DSUR.

The Development International Birth Date (DIBD) to be used will be [DDMMMYYYY].

The Party responsible for the Development Safety Update Report or Global Development Safety Update Report shall provide the other Party with a draft for review. The reviewing Party shall have fourteen (14) calendar days to comment on the draft. The responsible Party shall give due consideration to any comments that the reviewing Party might make, and provide the reviewing Party with a copy of the final report.

2.6	Investigators Brochure (IB)

The Charity will produce the Investigator Brochure.� The Charity will provide an annual update to the IB or provide confirmation that an annual review of safety data has been carried out and no update is required.

The Charity must promptly provide the Company with a copy of each version of the IB within fourteen (14) calendar days of the IB version being issued.� Should the Charity disallow photocopying, it shall provide the other Party with sufficient copies of each version of the IB to allow at least one copy to be distributed to each of the Companys investigational sites, plus two copies for the Companys own use.� If requested, the Company will distribute and document numbered copies of the IB.

2.7	Safety Information from Other Sources

Each Party shall promptly review all information concerning safety of the IMP or Related Products that is obtained or otherwise received from any source, foreign or domestic, including data derived from clinical trials, epidemiological studies, animal experiments, commercial marketing experience, reports as part of scientific literature and unpublished scientific papers.

Any such information that is deemed important, i.e. could result in changes to protocols, patient information sheets or IB, shall be communicated within seven (7) calendar days to the other Party using the same means as for expedited SAE reports.

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2.8	Developments�and Enquiries

Each Party shall advise the other of any regulatory or other developments affecting the safety of the IMP or Related Products, e.g., proposed recalls, labelling and other registration dossier change, any proposed changes to manufacturing, IMP quality complaints or quality issues.

Each Party shall advise the other Party of any enquires from Regulatory Authorities and Ethics Committees concerning the safety of the IMP or Related Products.� The Parties shall collaborate fully, and in a timely manner, in providing a response to such enquiry.

2.9

Language

The Parties agree to communicate with each other and prepare documents on the Investigational Medicinal Product or Related Products in English.

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Schedule 4

Licence

THIS AGREEMENT is made the________ day of ____________________20[��]

BETWEEN:

(1)	CANCER RESEARCH TECHNOLOGY LIMITED, a company registered in England and Wales under number 1626049 with registered office at Angel Building, 407 St. John Street, London, EC1V 4AD, England] (CRT); and

(2)	ASTERIAS BIOTHERAPEUTICS, INC., a Delaware company with principal place of business at 230 Constitution Drive, Menlo Park, CA94025, USA (the Company).

RECITALS

(A)	CRT is a wholly owned subsidiary of Cancer Research UK (the Charity) and is, by arrangement with the Charity, responsible for the management, exploitation and commercialisation of intellectual property generated by the Charity or using funding from the Charity.

(B)	Pursuant to a Clinical Trial and Option Agreement between CRT, the Charity and the Company dated [��] attached at Appendix 2 (the CTOA) the Charity has conducted the Clinical Trial (as defined below) and assigned the results of such Clinical Trial and all intellectual property therein to CRT.

(C)	CRT has agreed to grant the Company a licence under the Licensed Intellectual Property (as defined below) upon the terms and conditions set out in this Agreement.

OPERATIVE PROVISIONS

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1.	INTERPRETATION

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1.1

In this Agreement except where the context requires otherwise, the following words and expressions shall have the following meanings:

�

	Accountancy Opinion	means the opinion of an independent United Kingdom chartered accountant appointed by agreement between the Parties or in default of such agreement within twenty one (21) days of either Party seeking in writing to the other to appoint such accountant, at the request of either Party, by the President for the time being of the Institute of Chartered Accountants in England and Wales, referred to in Clauses 1, 6.3 and 24.1. �
	Affiliate	has the same meaning as that ascribed to that phrase in the CTOA. �
	Affordable Price	means in relation to a Licensed Product: (i) a determination by the UK Pricing Authority that such Licensed Product should be used within the NHS; and/or (ii) approval by the UK Pricing Authority of the price proposed by the Company or its Sub-Licensee in relation to sales of that Licensed Product in the United Kingdom (or one or more constituent countries thereof).

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	Agreement � BLA	means this agreement and each of the Appendices as amended from time to time in accordance with Clause 21. � means, in relation to any Licensed Product, a biologics licence application, supplementary biologics licence application or any of their equivalents filed with the United States Food and Drugs Administration (FDA) or any successor to it, a marketing authorisation application or its equivalent filed with the European Medicines Agency (EMEA) or any successor to it, or a marketing authorisation application or a product licence application or equivalent filed with the relevant Regulatory Authority in any one or more countries or regions within the Territory. �
	Clinical Trial	has the same meaning as that ascribed to that phrase in the CTOA. �
	Clinical Trial Results	has the same meaning as that ascribed to that phrase in the CTOA. �
	Commencement	means the first dosing of a human subject in a Phase I Clinical Trial, Phase II Clinical Trial or Phase III Clinical Trial (as context requires). �
	Company Combination Patent Rights � Company Foreground Patent Rights �	has the same meaning as that ascribed to that phrase in the CTOA. � � Means those of the Company Patent Rights with applications solely or primarily related to the Product and Related Products. �
	Company Intellectual Property��	has the same meaning as that ascribed to that phrase in the CTOA. �
	Company Patent Rights	has the same meaning as that ascribed to that phrase in the CTOA. �
	Competing Programme	means a research and development programme, other than one conducted by the Charity or CRT or any of their Affiliates under the CTOA, under which human subjects in a clinical trial have or are to be administered a cell based therapy that incorporates the hTERT Antigen .

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	Confidential Information	means all information relating to the manufacturing methods, product specifications, customers, suppliers, business partners, clients, finances, operating budgets and forecasts, business plans and products, and the Development Plan, as revised or amended from time to time (in each case actual or prospective) of a Party which is not in the public domain and which is acquired by the other Party pursuant to this Agreement. �
	Contributors	has the same meaning as that ascribed to that phrase in the CTOA. �
	Control	means the possession (directly or indirectly) of fifty per cent or more of the voting stock or other equity interest of a subject entity with the power to vote, or the power in fact to control the management decisions of such entity through the ownership of securities or by contract or otherwise and Controls and Controlled by shall be construed accordingly. �
	Currency	means pounds sterling or such other currency as CRT may reasonably specify from time to time. �
	Data Exclusivity Period	means any period of clinical trial data or other regulatory exclusivity, together with any such periods under national implementations in the European Union of Article 10.1 of Directive 2001/EC/83 and all equivalents elsewhere in the Territory. �
	Data Listings	has the same meaning as that ascribed to that phrase in the CTOA. �
	Development Plan	means the development plan at Appendix 1 (as the same shall be updated in accordance with Clause 3.1) which describes: (i) the steps to be taken to develop Licensed Products (including at least one Primary Licensed Product) within the Field and the Territory; (ii) the relevant timescales within which such steps will be taken; and (iii) the estimated costs associated with each step. �
	Effective�Date	means the date this Agreement is made. �
	Exclusive Results	has the same meaning as that ascribed to that phrase in the CTOA. �
	Expert Opinion	means the opinion of an independent expert appointed by agreement between the Parties or in default of such agreement within twenty one (21) days of either Party seeking in writing to the other to appoint such expert, by the President for the time being of the Association of the British Pharmaceutical Industry referred to in Clauses 12.3 and 24.1.

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	Field	means the use of the Product and/or any Related Product(s) in�immunotherapy applications using ***, for the treatment, prophylaxis, prevention and/or cure of human disease and conditions. �
	Final Report � First Commercial Sale	has the same meaning as that ascribed to that phrase in the CTOA. � means, with respect to a Licensed Product, the first transfer or disposition for value of such Licensed Product by or on behalf of the Company or a Sub-Licensee or an Affiliate of either of them, after all relevant Regulatory Authorisations for the transfer or disposition of such Licensed Product have been obtained in respect of the relevant region or country. �
	FTO Royalties	means, on a Licensed Product by Licensed Product basis, any royalties on the sale of a Licensed Product payable by the Company under a license from a third party (after the application of any royalty stacking provisions contained therein) to the extent that: (i) but for such license the manufacture, sale, use or distribution of such Licensed Product would infringe the Intellectual Property Rights of such third party licensor, and (ii) such royalty payable is reasonably attributable to the grant of rights used in respect of a Licensed Product and not to unrelated rights also granted pursuant to the same agreement and/or by the same third party licensor. �
	hTERT Antigen	has the same meaning as that ascribed to that phrase in the CTOA �
	Indication	means a disease classification block as defined within the International Statistical Classification of Diseases and Related Health Problems as published from time to time by the World Health Organization (e.g. C50 Malignant neoplasm of Breast, C92 Myeloid leukaemia, B20 Human immunodeficiency virus [HIV] disease resulting in infectious and parasitic diseases, M34 Systemic sclerosis). �
	Investigational Medicinal Product� �or IMP	has the same meaning as that ascribed to that phrase in the CTOA. � �
	Intellectual Property Rights	has the same meaning as that ascribed to that phrase in the CTOA.

�

	Know-How	has the same meaning as that ascribed to that phrase in the CTOA. �
	Licensed Intellectual Property	means the Clinical Trial Results and all Intellectual Property Rights therein. � �
�	Licensed Product	means any Primary Licensed Product and any Related Licensed Product �
	Major Markets	means ***. �
	Milestone Event	has the meaning specified in Clause 4.2. �
	Milestone Payments	has the meaning specified in Clause 4.2.
	�	�
	Net Sales Value	means, in relation to Licensed Product: � the gross amount invoiced by the Company or Sub-Licensee or Affiliate of the Company or a Sub-licensee less any value added tax or other sales tax, transport charges (including transport insurance) and costs of packaging to the extent that any of those items are included as separate items in the amount so invoiced, and after deducting any allowances for lost or damaged items or permitted returns, and discounts allowed and rebates given in the normal course of trade, and in the event of more than one such sale, the first such sale; �
	New Company IP	means any Intellectual Property Rights developed by or on behalf of the Company on or after the Effective Date that directly relate to a Licensed Product and its use. �
	Non-Exclusive Results	has the same meaning as that ascribed to that phrase in the CTOA. �
	Oncology Indication	means an Indication in the range C00 D48 (e.g. C50 Malignant neoplasm of Breast, C92 Myeloid leukaemia). �
	Party	means either party to this Agreement and Parties means both of them. �
	Patent Rights	has the same meaning as ascribed to that phrase in the CTOA. �
	Phase II Clinical Trial	means a clinical trial of a Licensed Product (or in the adaptation of an existing clinical trial) in any country that would satisfy the requirements of 21 CFR �312.21(b) and is intended to establish dose response and/or preliminary data on the efficacy of Licensed Product and/or route of administration of the Licensed Product.

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	Phase III Clinical Trial	means a clinical trial of a Licensed Product (or the adaptation of an existing clinical trial) to be a larger scale (than Phase I or Phase II), usually multi-centered trial in any country that would satisfy the requirements of 21 CFR �312.21(c) and is intended to establish the efficacy and safety of the Licensed Product or any other human clinical trial of the Licensed Product intended as a pivotal trial for regulatory approval purposes whether or not such trial is a traditional Phase III trial. �
	Phase III Clinical Trial Completion	means the date of the last treatment visit of the last human subject under the� relevant Phase III Clinical Trial. �
	pound and �	means British pound sterling or if England changes its currency during the Term, then a sum equivalent in the new currency based on the spot exchange rate at the date of adoption of the new currency. �
	Price Approval	means, in those countries in the Territory where Regulatory Authorities may approve or determine pricing and/or pricing reimbursement for pharmaceutical products, such approval or determination. �
	Primary Licensed Product	means any product that contains the Product whether or not as the sole active ingredient. �
	Product	has the same meaning as ascribed to that phrase in the CTOA. �
	Product Manufacturing Process��	has the same meaning as ascribed to that phrase in the CTOA. �
	Quarter	means any of the three-monthly periods commencing on the first day of any of the months of January, April, July, and October in any year and Quarterly has a corresponding meaning. �
	Regulatory Authorisations	means all marketing authorisations, approvals, clearances and authorisations that may be required by a Regulatory Authority in any country or region within the Territory prior to Phase II Clinical Trial Commencement and/or Phase III Clinical Trial Commencement and/or commercial sale of the Licensed Product, including any necessary variations thereto, but excluding always any Price Approvals. �
	Regulatory Authority	means any local or national agency, court, authority, department, inspectorate, minister, ministry official or public or statutory person (whether autonomous or not) of, or of any government of, any country having jurisdiction over this Agreement or either of the Parties or over the development or marketing of medicinal products including, the European Medicines Agency and the European Court of Justice.

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	Related Licensed Product	means any product that is not a Primary Licensed Product and: � (a)��which contains a Related Product, whether or not as the sole active ingredient; and/or � (b)��whose application for a Regulatory Authorisation from a Regulatory Authority in any jurisdiction included the Clinical Trial Results and/or the Final Report and/or the Data Listings or any part of any of them �
	Related Product	has the same meaning as that ascribed to that phrase in the CTOA. �
	Signature Fee	means the sum of ***. �
	Sub-Licence Revenue	means any monies or non-monetary consideration (including securities) receivable from time to time by the Company or an Affiliate in respect of: (i) any sub-licence granted by the Company or an Affiliate under this Agreement; (ii) any licence granted by the Company or an Affiliate (whether under the Company Intellectual Property or otherwise) to sell Licensed Products anywhere in the Territory; and/or (iii) the grant of the right to acquire such a sub-licence or licence, including, in each case, option fees, licence issue fees or other up-front payments, annual licence fees, or other lump sum payments which are attributable to the grant of the rights in question, but excluding: (i) any milestone payments due on the achievement of specific development or sales milestones that are additional to those listed in Clause 4.2;� (ii) royalties as referred to in Clause 4.5; (iii) sales to distributors or wholesalers for resale, and sales made by sales agents, where in any such case the sales have already been or will be accounted for to CRT in determining Net Sales Value; and (iv) any money or non-monetary consideration (including securities or licences of patents, know-how, or other intellectual property) received by the Company from an Affiliate,� provided that such money or non-monetary consideration shall not reduce the Net Sales Value of any Licensed Product sold by the Company or any Affiliate. In the case of non-monetary Sub-Licence Revenue, the value shall be assessed at the date of receipt of the same by the Company or, at the option of CRT, at the date the non-monetary consideration is realised as monetary and in the absence of agreement by the Parties, the value shall be determined by Accountancy Opinion.

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	Sub-Licensee	means any person who is granted: (i) a sub-licence in accordance with Clause 2.3 in respect of the rights granted under this Agreement (and any further tiers of sub-licence there under); and/or (ii) a licence by the Company (whether under the Company Intellectual Property or otherwise) to sell Licensed Products anywhere in the Territory, but shall not mean distributors, wholesalers, and sales agents. �
	Term	means the term of this Agreement as determined under Clause 12.1. �
	Territory	means worldwide. �
	Tobacco Party	means: (i) any entity who develops, sells or manufactures tobacco products; and/ or (ii) any entity which makes the majority of its profits from the importation, marketing, sale or disposal of tobacco products. Furthermore, Tobacco Party shall include any entity that is an Affiliate of any entity referred to in (i) or (ii). �
	UK Pricing Authority	means any supra-national, national or regional government department, authority, agency or entity (including a non-departmental public body or similar entity) with responsibility for evaluating the cost effectiveness of medicinal products in the United Kingdom (or one or more constituent countries thereof) or otherwise determining whether the NHS (or constituent parts thereof) should purchase medicinal products. �
	Year	means a calendar year.

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1.2

In this Agreement:

1.1.1

unless the context requires otherwise, all references to a particular Clause, paragraph or Appendix shall be references to that clause, paragraph or appendix, in or to this Agreement;

1.1.2

the headings are inserted for convenience only and shall be ignored in construing this Agreement;

1.1.3

unless the contrary intention appears, words importing the masculine gender shall include the feminine and vice versa and words in the singular include the plural and vice versa;

1.1.4

1.1.5

references to the words include or including shall be construed without limitation to the generality of the preceding words.

2.	GRANT OF LICENCE

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2.1

Subject to the provisions of this Agreement and the surviving provisions of the CTOA, CRT hereby grants to the Company:

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2.1.1

***; and

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2.1.2

***,

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in each case to research, develop, make, have made, import, use and sell Licensed Products in the Field in the Territory and to apply for Regulatory Authorisation for such Licensed Products in any jurisdiction.

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2.2

CRT hereby reserves and excepts from the *** under Clause 2.1.1 the worldwide, perpetual and irrevocable right for the Contributors and the Charity (including use by scientists funded and/or employed by the Charity) to:

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2.2.1

use the Licensed Intellectual Property for the purpose of non-commercial scientific research carried out by or for or under their respective direction in accordance with their respective charitable and/or academic status, whether alone or in collaboration with a third party or third parties and whether sponsored or funded, in whole or in part, by any third party including any commercial entity; and

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2.2.2

make publications in relation to the Licensed Intellectual Property and any results of research using the same in accordance with generally accepted academic practice.

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2.3

The Company shall be entitled to grant sub-licences in respect of the rights granted under this Agreement, provided that:-

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2.3.1

any sub-licence granted by the Company shall be expressed to terminate automatically on the termination of this Agreement for any reason;

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2.3.2

the Company shall ensure that there are included in the terms of any sub-licence like obligations and undertakings on the part of the Sub-Licensee for the benefit of the Charity as are contained in this Agreement (including Clause 9 (indemnity) and Clause 14 (confidentiality) and, if further tiers of sub-licensing is allowed, this Clause 2.3) and shall further ensure that all Sub-Licensees duly comply with the same;

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2.3.3

no sub-licence shall be granted to a Tobacco Party;

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2.3.4

the sub-licence (other than a sublicence with an Affiliate) shall be entered into on an arms-length basis reflecting the market value of the rights granted; and

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2.3.5

the Company shall provide CRT with a copy of such sub-licence within thirty (30) days of entering into it.

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2.4

Any breach of Clause 2.3 shall be deemed to be a material breach.

2.5

The grant of any sub-licence shall be without prejudice to the Companys obligations under this Agreement. Any act or omission of any such Sub-Licensee which, if it were the act or omission of the Company would be a breach of any of the provisions of this Agreement, will be deemed to be a breach of this Agreement by the Company who will be liable to CRT accordingly.

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2.6

CRT will provide the Company with any Long Term Survival Data as and when the Charity has completed collection of the same.

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2.7

Subject to the restrictions, pre-approvals and limitations as outlined in Section 6.1 and Schedule 7A of the CTOA, the Company hereby grants to the Charity a non-exclusive, royalty free licence under the Company Intellectual Property (including the right to use Company Materials) for the Charity and scientists funded by the Charity to adapt and use the Product Manufacturing Process and make and have made Products and Related Products for non-commercial research purposes, provided that such research will not include clinical research without the prior written consent of the Company which shall be in Companys sole control, on a case-by-case basis, and subject to establishment of a clinical trial agreement providing Company with appropriate safeguards and indemnities for such trial.

�2.8

If, within one year of the Effective Date of this Agreement, Company wishes to publish or publicly disclose the Clinical Trial Results, it will first provide a copy of such intended disclosure to the Charity for its review at least thirty (30) days prior to the intended date of submission for publication or public disclosure.� Charity will complete its review of such intended disclosure within thirty (30) days of receipt.� If, during its thirty (30) day review period, Charity reasonably determines that information contained within such intended disclosure will materially impact the ability of Charity, CRT, or a Contributor to publish results of, or to protect any Intellectual Property Rights arising from, the Clinical Trial, Company will, at its discretion, either remove such information prior to disclosure or delay disclosure for up to ninety (90) days to allow for protection or publication.� If Charity does not respond within thirty (30) days of receipt, it shall be deemed to have consented to the intended disclosure.� The foregoing provisions of this Clause 2.8 shall not apply to disclosure of Clinical Trial Results, or any portion thereof, by the Company to� the extent required for (a) satisfying mandatory reporting and disclosure obligations under United States and other securities laws; or (b) to existing licensors or sublicensors of the Company in order to comply with reporting obligations in existence as at the date of this agreement under Third Party Licences, provided that in the case of (b) the disclosure shall be limited to only information as may be reasonably required by the Third Party Licence� and subject to the third party that is receiving the information being bound by confidentiality obligations that are no less restrictive than those that the Company is bound by under this Agreement in respect of confidential information disclosed to it by the Charity .

�

3.	PERFORMANCE

�

3.1

The Company shall provide an updated Development Plan to CRT on at least a six-monthly basis throughout the Term.

�

3.2

The Company shall use its commercially reasonable endeavours to procure the achievement of Phase II Clinical Trial Commencement within *** of the Effective Date.

�

3.3

The Company shall use its commercially reasonable endeavours at all times during the Term to:

�

3.3.1

comply with the most up-to-date version of the Development Plan;

�

3.3.2

develop and pursue Regulatory Authorisation for a Licensed Product for use in *** in each of ***;

�

3.3.3

introduce a Licensed Product for use in *** into each of *** as soon as reasonably and commercially practical following receipt of the corresponding Regulatory Authorisations and subsequently use commercially reasonable efforts to market the Licensed Product and pursue maximum market penetration in the Major Markets;

�

3.3.4

launch each Licensed Product in the United Kingdom as soon as practicable and in any event no later than *** after the date the first Regulatory Authorisation is granted by the European Medicines Agency;� and

�

3.3.5

make Licensed Products that are launched in the United Kingdom available at an Affordable Price if required by a Regulatory Authority having jurisdiction over pricing in the United Kingdom.

�

3.4

Subject to Clause 3.5.2, at least once every six (6) months the Company shall provide CRT with a report as to the progress of the development of each Licensed Product, the progress of any applications for Regulatory Authorisation and Price Approval, and the progress of and plans for the marketing and sale of the Licensed Product and its compliance with the Development Plan, in such form and detail as CRT may reasonably require.

�

3.5

If, prior to the First Commercial Sale in the United Kingdom and two (2) other Major Markets, the Company undergoes a change of Control, or acquires or begins (whether independently or with a third party) a Competing Programme:

�

3.5.1

it shall notify CRT in writing within thirty (30) days after the change of Control occurring, or its commencement or acquisition of the Competing Programme; and

�

3.5.2

for the *** period following the change of Control, or commencement or acquisition of the Competing Programme, it shall provide CRT with a report described in Clause 3.4 at least once every three (3) months.

�

3.6

The Company shall give CRT prompt notice upon the occurrence of any Milestone Event.

�

3.7

The Company shall submit to CRT:

�

3.7.1

a copy of its detailed operating budget (including a quarterly cash flow and expenditure forecast) for the Product in respect of each Financial Year as adopted by the Companys board (the Annual Budget), at least thirty (30) days prior to the commencement of the Financial Year to which the Annual Budget relates;

�

3.7.2

quarterly management accounts of the Company (to include, inter alia, a (consolidated) profit and loss account, balance sheet and cash flow statement and shall indicate where such management accounts differ to any material extent from the Annual Budget for such period), within five (5) business days after the date by which such financial statements are filed with the United States Securities and Exchange Commission for such period, but in no event later than fifty (50) days after quarter close for the first three financial quarters and ninety five (95) days after close of the financial year. Such quarterly management accounts shall be prepared in accordance with United States generally accepted accounting principles consistently applied.

3.8

Any breach of Clause 3 shall be deemed to be a material breach of this Agreement.

�

3.9

The Company may perform its obligations under Clause 3 in whole or in part through the efforts of its Affiliates, contractors, subcontractors, licensees and sublicensees.

�

4.	CONSIDERATION

�

4.1

The Company shall pay the Signature Fee to CRT within thirty (30) days after the Effective Date.

�

4.2

The Company shall pay the following payments (Milestone Payments) to CRT after the first occurrence of each of the following events (Milestone Events) in accordance with this Clause 4.2 and Clause 5.2:

�

4.2.1

Development Milestone Events in relation to ***:

�

(a)

***;

�

(b)

***;

4.2.2

Development Milestone Events in relation to ***:

�

(a)

***;

�

(b)

***;

�

4.2.3

Development Milestone Events in relation to ***:

�

(a)

***;

�

(b)

***;

�

4.2.4

Development Milestone Events in relation to ***:

�

(a)

***;

�

(b)

***;

�

4.2.5

Sales Milestone Events in relation to ***

�

(a)

***;

�

(b)

***; and

�

(c)

***.

�

4.2.6

Sales Milestone Events in relation to ***

�

(a)

***;

�

(b)

***; and

�

(c)

***.

�

Upon the occurrence of each *** in respect of a Licensed Product ***, if not already triggered, the corresponding *** *** for that same Licensed Product shall be deemed to have occurred. For the avoidance of doubt a Milestone Event may be triggered by the actions of the Company, a Sub-Licensee or any third party acting on behalf of the Company or any Sub-Licensee.

�

4.3

Subject to Clause 4.4, the Company shall pay to CRT:

�

4.3.1

***;

�

4.3.2

***;

�

4.3.3

***; and

�

4.3.4

***.

�

4.4

In the event that any Milestone Event is triggered by any Sub-Licensee, the Company shall pay to CRT the greater of: (i) ***; and (ii) ***.

�

4.5

Subject to Clauses 4.6 and 4.7, the Company will pay to CRT royalties on Licensed Products at the following royalty rates based on the Net Sales Value of Licensed Products in the applicable Year:

�

(a)

***; and

�

(b)

***; and

�

(c)

***; and

�

(d)

***.

�

4.6

The Company shall pay royalties to CRT in accordance with Clause 4.5 on a Licensed Product by Licensed Product, and country by country basis until the later of:

�

4.6.1

***; and

�

4.6.2

***.

�

4.6.3

***.

�

4.7

In the event that the Company incurs FTO Royalties with respect to a Licensed Product in a country in a Quarter the following provisions shall take effect with respect to that Licensed Product in that country in that Quarter:

4.7.1

***;

�

4.7.2

***;

�

4.7.3

***.

5.	PAYMENT AND STATEMENT

�

5.1

All payments due to CRT under this Agreement shall be made in the Currency in cleared funds to the following bank account:

�

***

�

or such other account as CRT may notify to the Company from time to time.

�

5.2

The Company shall pay to CRT:

�

5.2.1

the Signature Fee on the date specified in Clause 4.1;

�

5.2.2

each of the Milestone Payments within thirty (30) days after the relevant Milestone Event occurring;

�

5.2.3

CRTs share of Sub-Licence Revenue due under Clause 4.3 Quarterly within thirty (30) days after the end of the Quarter in which the consideration upon which Sub-Licence Revenue is based is received by the Company from Sub-Licensee ; and

�

5.2.4

the royalties due pursuant to Clause 4.5 Quarterly within thirty (30) days after the end of each Quarter in which the relevant Net Sales Value is invoiced by the Company or a Sub-Licensee.

�

5.3

Where Licensed Products are sold or Sub-Licence Revenue is received by the Company (or a Sub-Licensee) in a currency other than the Currency, the rate of exchange to be used for converting such other currency into the Currency shall be the relevant mid-spot rate for the currency quoted by the Financial Times on the last day of the Quarter to which they relate.

�

5.4

All costs of transmission and currency conversion shall be borne by the Company.

�

5.5

All payments to CRT under this Agreement are expressed to be exclusive of value added tax howsoever arising, and the Company shall pay to CRT in addition to those payments or, if earlier, on receipt of a tax invoice or invoices from CRT, all value added tax for which CRT is liable to account in relation to any supply made or deemed to be made for value added tax purposes pursuant to this Agreement.

�

5.6

All sums payable under this Agreement shall be paid without deduction or deferment in respect of any claims whatsoever and of any taxes except any tax which the Company is required by law to deduct or withhold. If the Company is required by law to make any such tax deduction or withholding, the Company shall pay to CRT such amount as shall, after deduction, amount to the sum referred to in this Agreement give reasonable assistance to CRT to claim exemption from or (if that is not possible) a credit for the deduction or withholding under any applicable double taxation or similar agreement from time to time in force, and shall promptly give CRT proper evidence as to the deduction or withholding and payment over of the tax deducted or withheld.

�

5.7

Where CRT does not receive payment of any sums due to it by the due date, interest shall accrue both before and after any judgment on the sum due and owing to CRT at the rate equivalent to an annual rate of four percent (4%) over the then current base rate of the Bank of England, calculated on a daily basis, until the full amount is paid to CRT, without prejudice to CRTs right to receive payment on the due date.

�

5.8

Within thirty (30) days after the end of each Quarter, the Company shall send to CRT a written statement detailing in respect of that Quarter (including a nil report if appropriate):

�

5.8.1

any Milestone Payments which became due to CRT;

�

5.8.2

for each sub-licence, details of each item of Sub-Licence Revenue received by the Company during that Quarter and the Sub-Licence Revenue payable to CRT thereon;

�

5.8.3

the quantity of each type of Licensed Product sold or otherwise disposed of by the Company or any Sub-Licensees in each country in the Territory;

�

5.8.4

the Net Sales Value in respect of each such type of Licensed Product in each country of the Territory;

�

5.8.5

the aggregate Net Sales Value in respect of that Quarter for Licensed Product;

�

5.8.6

the type and value of deductions made in the calculation of Net Sales Value by type of Licensed Product and country;

�

5.8.7

any currency conversions, showing the rates used;

�

5.8.8

any further information necessary for the calculation of Sub-Licence Revenue and Net Sales Value of Licensed Products and/or the royalties due to CRT; and

�

5.8.9

the amount of the royalties due to CRT in respect of that Quarter.

�

ACCOUNTS

�

6.1

The Company shall:

�

6.1.1

keep and notwithstanding termination of this Agreement, maintain and shall procure that each Sub-Licensee keeps and maintains, for at least six (6) years, true and accurate accounts and records (including any underlying documents supporting such accounts and records) in sufficient detail to enable the amount of all sums payable under this Agreement to be determined; and

�

6.1.2

during the Term and thereafter until the said period of three (3) years relevant to the accounts and records has expired, at the reasonable request of CRT and (subject to Clause 6.2) at the expense of CRT from time to time, permit [or procure permission for] a qualified accountant nominated by CRT to inspect and audit those accounts and records and, to the extent that they relate to the calculation of those sums, to take copies of them. Subject to receiving not less than thirty (30) days written notice, the Company shall at the request of CRT assemble in one location each that is respectively convenient to the Company and Sub-Licensee(s) all such relevant accounts and records of the Company and Sub-Licensee(s).

�

6.2

If, following any inspection pursuant to Clause 6.1.2, CRTs nominated accountant certifies to CRT that the payments in respect of any Quarter or Year fall short of the sums which were properly payable in respect of that Quarter or Year under this Agreement, CRT shall send a copy of the certificate to the Company and the Company shall (subject to Clause 6.3) within seven (7) days of the date of receipt of the certificate pay the shortfall to CRT and, if the shortfall exceeds two per cent (2%) of the sum properly payable, the Company shall also reimburse to CRT the reasonable costs and expenses of CRT in making the inspection.

�

6.3

If within seven (7) days of the date of receipt by the Company any certificate produced pursuant to Clause 6.2 the Company notifies CRT in writing that it disputes the certificate, the dispute shall be referred for resolution by Accountancy Opinion in accordance with Clause 24.1.

�

7.	INTELLECTUAL PROPERTY PROTECTION, PROCEEDINGS AND COSTS

�

7.1

The Company shall throughout the Term continue to prosecute and maintain the Company Patent Rights at its own cost and shall use commercially reasonable endeavours to maximise the scope of such Company Patent Rights, or where prosecution and maintenance of such Patent Rights is controlled by a licensor of the Company, the Company will use commercially reasonable efforts to procure that the licensor continues to prosecute and maintain such Patent Rights where the licensor has such obligation under its Third Party Licence agreement; provided that the Company shall not be obligated to commence litigation for such purpose. Notwithstanding the foregoing, if the Company elects not to prosecute or maintain any part of the Company Patent Rights it controls in any part of the Territory, the Company shall notify CRT in writing at least ninety (90) days prior to the expiration of any applicable time bars. After receipt of such notice, CRT may elect, before the expiry of any such time bars, by written notice to the Company, to take an assignment of the relevant Company Patent Rights such that CRT may continue to prosecute and/or maintain the Company Patent Rights at CRTs sole discretion and expense.

�

7.2

If the Company becomes aware that a Company Patent Right being prosecuted or maintained by one of its licensors is due to expire or the licensor has elected not to prosecute or maintain any such Company Patent Rights the Company will promptly notify CRT in writing. In the case of a licensor electing not to prosecute or maintain any Company Patent Rights (as opposed to expiration), where reasonably possible, the Company will take assignment of such Patent Rights or request the right for CRT to take assignment of such Patent Rights.

�

WARRANTY

�

8.1

Each Party warrants that it has the legal capacity to enter into this Agreement.

�

8.2

Each Party acknowledges that, in entering into this Agreement, it does not do so in reliance on any warranty or other provision except as expressly provided in this Agreement, and any conditions, warranties or other terms implied by statute or common law are excluded to the fullest extent permitted by law.

�

8.3

Without limiting the scope of Clause 8.2, CRT does not give any warranty, representation or undertaking:

�

8.3.1

as to the efficacy or usefulness or accuracy of the Clinical Trial Results; or

�

8.3.2

that the exercise of rights granted under this Agreement will not infringe the intellectual property or other rights of any other person.

�

INDEMNITY

�

9.1

The Company shall indemnify and hold harmless CRT, the Contributors and the Charity and their respective officers, employees and agents (the Indemnified Parties) from and against *** arising from or in connection with the exercise of the rights granted in Clause 2 by the Company or any Affiliate of the Company or a Sub-Licensee or any affiliate of a Sub-Licensee in relation to the Licensed Product.� This Clause 9 shall not limit the rights of the Company and the liabilities of CRT under Clause 9.1 of the CTOA.

�

9.2

Promptly after receipt by CRT of any claim or alleged claim or notice of the commencement of any action, administrative or legal proceeding, or investigation to which the indemnity provided for in this Clause 9 may apply, CRT shall give written notice to the Company of such fact and specifying that the Company shall have the option to assume the defence thereof by election in writing within seven (7) days of receipt of such notice. If the Company fails to make such election, the Indemnified Party may assume such defence and the Company will be liable for the legal and other expenses consequently incurred in connection with such defence. The Parties will co-operate in good faith in the conduct of any defence, provide such reasonable assistance as may be required to enable any claim properly to be defended and the Party with conduct of the action shall provide promptly to the other Party copies of all correspondence and documents and notice in writing of the substance of all oral communications relating to such action.

�

9.3

Should the Company assume conduct of the defence:

�

9.3.1

the Indemnified Party may retain separate legal advisers, at its sole cost and expense, save that if the Company denies the applicability of the indemnity or reserves its position in relation to the same, the indemnity in this Clause 9 shall extend to the Indemnified Partys costs and expenses so incurred if it is subsequently resolved between the Parties or determined by a court of competent jurisdiction (after exhaustion or expiration of all rights of appeal) that the indemnity under this Clause 9 was available to the Indemnified Party in the terms claimed by the Indemnified Party; and

�

9.3.2

the Company will not, except with the written consent of the Indemnified Party consent to the entry of any judgment or enter into any settlement provided always, that if the Indemnified Party unreasonably refuses to consent to such entry of judgment or settlement and the matter proceeds to trial at which a greater amount is ordered by the Court then the amount which the Indemnified Party shall be entitled to recover from the Company pursuant to this Clause 9 shall be limited to the amount for which the action would otherwise have been settled or compromised and the Indemnified Party shall assume all costs of defending the claim or proceeding from the date of the Indemnified Partys refusal; and

�

9.3.3

CRT shall not admit liability in respect of, or compromise or settle any such action without the prior written consent of the Company, such consent not to be unreasonably withheld, conditioned or delayed; and

�

9.3.4

the Company shall not be responsible for or bound by any settlement made by CRT in breach of Clause 9.3.3.

�

10.

INSURANCE

�

10.1

The Company shall maintain, at its own cost, comprehensive product liability insurance and general commercial liability insurance. Within thirty (30) days of the Effective Date and of the beginning of each policy period, the Company shall provide CRT with a certificate evidencing the coverage required hereby, and the amount thereof. Such insurance shall be with a reputable insurance company and shall be maintained for not less than six (6) years following the expiration/termination of this Agreement for any reason or if such coverage is of the claims made type, for ten (10) years following the expiration or termination of this Agreement for any reason.

�

11.	LIMITATION OF LIABILITY

�

11.1

Neither Party nor the Charity, nor their respective officers, employees and agents shall have liability whether under statute or in tort (including negligence), contract or otherwise to the other Party in respect of any consequential, indirect or pure economic loss nor in any event for loss of goodwill, opportunity, profit or contract.

�

11.2

Nothing in this Agreement shall be construed as excluding or limiting the liability of either Party or the Charity or any of their respective officers, employees and agents to the other Party for death or personal injury of any person resulting from the negligence of such persons.

�

12.	TERM AND TERMINATION

�

12.1

This Agreement will become effective on the Effective Date and, subject to the provisions of this Clause 12, will remain effective in each country of the Territory until expiry of the obligation of the Company under Clauses 4.5 and 4.6 to pay royalties in relation to that country pursuant to this Agreement.

�

12.2

Without prejudice to any other rights of the Parties this Agreement may be terminated by notice in writing:

�

12.2.1

by either Party forthwith if the other Party shall be in material breach of any of its obligations under this Agreement and in the case of a remediable breach fails to remedy the breach within sixty (60) days of written notice containing full particulars of the breach and requiring it to be remedied;

�

12.2.2

by CRT if a voluntary arrangement is proposed or approved or an administration order is made, or a receiver or administrative receiver is appointed of any of the Companys assets or undertakings or a winding-up resolution or petition is passed (otherwise than for the purpose of solvent reconstruction or amalgamation) or if any circumstances arise which entitle the Court or a creditor to appoint a receiver, administrative receiver or administrator or make a winding-up order or similar or equivalent action is taken against or by the Company by reason of its insolvency;

�

12.2.3

by CRT forthwith in the event that, by way of merger, acquisition or otherwise, the Company becomes a Tobacco Party; or

�

12.2.4

by CRT upon forty five (45) days written notice to the Company if the Company:

�

(a)

discontinues the development (including prosecuting application for Regulatory Authorisation) of all Licensed Products; or

�

(b)

after the filing of the IND, discontinues the development (including prosecuting application for Regulatory Authorisation) of one or more� Licensed Product(s) in all disease indications (in which case termination shall not apply to the whole Agreement but shall be limited to such Licensed Product(s)); or

�

(c)

after the filing of the IND, discontinues the development (including prosecuting application for Regulatory Authorisation) of one or more� Licensed Product(s) in oncology (in which case termination shall not apply to the whole Agreement but shall be limited to such Licensed Product(s) in oncology); or

�

(d)

fails to use its commercially reasonable efforts to obtain Regulatory Authorisation in a timely manner in all of the Major Markets, taking into account the unique aspects of the development and regulatory path for the Licensed Product, indication and market (in which case termination shall be effective only in respect of that Major Market); or

�

(e)

having obtained Regulatory Authorisation for a Licensed Product in a Major Market, ceases to actively market and sell such Licensed Product in such Major Market (in which case termination shall be effective only in respect of that Licensed Product in that Major Market); or

�

(f)

ceases to carry on business in the Field; or

�

(g)

without reasonable cause fails to commence sale of a Licensed Product in a Major Market within two (2) years of obtaining Regulatory Authorization to market the Licensed Product in such market; or

�

(h)

without CRTs prior written consent, abandons or fails to prosecute any of the Company Patent Rights in any Major Market.

�

12.3

In the event of disagreement between the Parties as to whether entitlement to terminate has arisen under Clause 12.2.1 or 12.2.4, the Parties at their joint cost and expense shall obtain an Expert Opinion which shall be final as to whether it has arisen.

�

12.4

For the purpose of Clause 12.2.4, the efforts and actions of the Company shall be deemed to include the efforts and actions of its Affiliates, contractors, subcontractors, licensees and sublicensees.

�

13.	EFFECTS OF TERMINATION

�

13.1

Subject to Clause 13.2, upon the termination of this Agreement for any reason:

�

13.1.1

other than termination by CRT pursuant to Clause 12.2.1 ,12.2.2� or 12.2.3 subject to all the terms of this Agreement (including without limitation payment of royalties), the Company shall be entitled for a period not exceeding *** following such termination to:

�

(a)

manufacture any of the Licensed Products to the extent necessary to satisfy orders accepted before termination; and

�

(b)

sell, use or otherwise dispose of any unsold stocks of the Licensed Products.

�

13.1.2

subject to Clause 13.1.1, the Company shall, and shall procure that all Sub-Licensees shall, cease to exploit the Licensed Intellectual Property in any way, either directly or indirectly;

�

13.1.3

subject to Clause 13.1.1, the Company shall, at the request and option of CRT, return or destroy CRTs Confidential Information;

�

13.1.4

notwithstanding any provision of this Agreement allowing the Company credit, payment of royalties and all other sums to CRT shall become due and payable to CRT immediately upon notice of termination of this Agreement;

�

13.1.5

the Company shall, within fourteen (14) days of notice of termination of this Agreement provide CRT with a final written statement detailing, in respect of the time elapsed since the last statement under Clause 5.8, the matters set out in Clause 5.8;

�

13.1.6

other than termination by the Company pursuant to Clause 12.2.1, the Company:

�

(a)

subject to 13.1.6(b), shall execute with CRT an exclusive, perpetual, worldwide, sub-licensable licence under the Company Intellectual Property, Company Combination Patent Rights and New Company IP to research, develop, make, have made, market, use and sell Licensed Products, on revenue share terms to be agreed;

�

and in the case of Company Intellectual Property licensed to the Company under a Third Party Licence, such licence shall include a grant to CRT of a sub-licence reasonably similar to those provided for by Schedule 6 (CRT Licence) of the CTOA, and provide CRT with such assistance as CRT may reasonably request in liaising with the licensors under the Third Party Licences for the purpose of obtaining direct contractual rights with such licensors should they be so required;

�

(b)

at CRTs request, upon completion of such licence, shall promptly transfer to CRT (or any person nominated by CRT) any and all documents and information in the Companys control or possession relating to the Company Foreground Patent Rights and CRT may assume responsibility for the prosecution, maintenance and enforcement of the same; and

�

(c)

at CRTs request, upon completion of such licence, shall transfer to CRT (or its nominee) any Regulatory Authorisations, Price Approvals and other permits and applications relating to Licensed Products.

�

13.2

This Clause 13.2 shall not apply in the case of termination of this Agreement under Clause 12.1.� In the event that this Agreement is terminated solely in respect of particular Licensed Product and/or Indication and/or Major Market, the provisions of Clause 13.1 shall apply, but solely in respect of the relevant Licensed Product, Indication and/or Major Market.

�

13.3

The termination of this Agreement howsoever arising will be without prejudice to the rights and duties of either Party accrued prior to termination. The following Clauses will continue to be enforceable notwithstanding termination: Clauses 1 (Definitions), 6 (Accounts), 9 (Indemnity), 10 (Insurance), 11 (Limitation of Liability), 12 (Termination), 13 (Effects of Termination), 14 (Confidentiality), 19 (Severability), 24 (Dispute Resolution) and 25 (Law and Jurisdiction).

�

14.	CONFIDENTIALITY

�

14.1

Each Party undertakes with the other that it shall keep and it shall procure that its respective directors and employees keep secret and confidential all Confidential Information belonging to or controlled by the other Party and shall not disclose the same or any part of the same to any person whatsoever other than:

�

14.1.1

in the case of the Company: (i) to Sub-Licensees subject to compliance with Clause 2.3.4, (ii) to potential development partners, sublicensees, and investors bound by terms of confidentiality at least as strict as those herein, and (iii) as necessary in communications with Regulatory Authorities in the Territory relating to the Licensed Products.

�

14.1.2

in the case of CRT to the Charity; and

�

14.1.3

in the case of each Party, to its directors or employees directly or indirectly concerned in the exercise of the rights granted under this Agreement.

�

14.2

The provisions of Clause 14.1 shall not apply to Confidential Information which CRT or the Company (as the case may be):

�

14.2.1

can prove to have been in its possession (other than under an obligation of confidence to the other or to a third party) at the date of receipt or which enters the public domain otherwise than through a breach of any obligation of confidentiality owed to the Party communicating such information to the other;

�

14.2.2

can prove it has independently developed; or

�

14.2.3

is required to disclose by law or by the order of a competent court, solely to the extent of such disclosure.

�

14.3

The provisions of this Clause 14 shall remain in force for a period of five (5) years from the expiry or termination of this Agreement

�

15.	ASSIGNMENT

�

15.1

The Company shall not without CRTs consent assign its rights under this Agreement except in conjunction with a merger or consolidation of the Company with another business entity or the sale of all or substantially all or a substantial part of its business and related assets that includes its business in relation to the Licensed Products other than a merger or consolidation with, or a sale of assets to, a Tobacco Party� and provided that Company obtains a direct covenant from the acquiring party to CRT undertaking to be bound by the terms of this Agreement.

�

16.

NOTICES

�

16.1

Any notice or other document to be given under this Agreement shall be in writing and shall be deemed to have been given:

�

16.1.1

upon delivery if given in person; or

�

16.1.2

upon confirmation of receipt if sent by facsimile (or other similar means of electronic communication such as email); or

�

16.1.3

(if posted to an inland destination) three (3) business days after deposit into First Class post; or

�

16.1.4

(If posted to an overseas destination)five (5) days after deposit into airmail post,

�

16.1.5

upon delivery by air delivery service;

�

to a Party at the address set out below for such Party or such other address as the Party may from time to time designate by written notice to the other Party.

Address of the Company

Asterias Biotherapeutics

230 Constitution Dr

Menlo Park, CA 94025

Contact:��Legal/contracts

Fax:��001 650 433 2900

Address of CRT

Angel Building

407 St. John Street

London EC1V 4AD

United Kingdom

Contact:��Chief Executive Officer

Fax:��+44 (0) 20 3014 8633

17.

WAIVER

�

17.1

No failure or delay on the part of either Party hereto to exercise any right or remedy under this Agreement shall be construed as or operate as a waiver thereof nor shall any single or partial exercise of any right or remedy under this Agreement preclude the exercise of any other right or remedy or preclude the further exercise of such right or remedy as the case may be.

�

18.	FORCE MAJEURE

�

18.1

Except in relation to obligations pursuant to Clauses 4 and/or 5, neither Party shall be liable to the other Party or shall be in default of its obligations hereunder if such default is the result of war, hostilities, revolution, civil commotion, strike, epidemic, accident, fire, wind, flood or because of any act of God or other cause beyond the reasonable control of the Party affected. The Party affected by such circumstances shall promptly notify the other Party in writing when such circumstances cause a delay or failure in performance (a Delay) and where they cease to do so. In the event of a Delay lasting for twenty six (26) weeks or more the non-affected Party shall have the right to terminate this Agreement immediately by notice in writing to the affected Party.

�

19.	SEVERABILITY

�

19.1

�

20.	ENTIRE AGREEMENT

�

20.1

This Agreement and the surviving clauses of the CTOA, embodies and sets forth the entire agreement and understanding of the Parties and supersedes all prior oral or written agreements, understandings or arrangements relating to the subject matter of this Agreement. Without prejudice to any liability for fraudulent misrepresentation or fraudulent misstatement neither Party shall be entitled to rely on any agreement, understanding or arrangement which is not expressly set forth in this Agreement unless otherwise agreed between the Parties and recorded in writing.

�

21.

AMENDMENT

�

21.1

This Agreement shall not be amended, modified, varied or supplemented except in writing signed by duly authorised representatives of the Parties.

�

22.	PUBLIC ANNOUNCEMENTS

�

22.1

The text of any press release, shareholders report or other communication to be published or disclosed to the public in any way by or in the media concerning CRT or the Charity, the subject matter of this Agreement or concerning this Agreement itself, other than as required by law or by any Regulatory Authority or the rules of any securities exchange, shall be submitted to CRT at least seven (7) days in advance of publication for approval, such approval not to be unreasonably withheld; provided, that disclosure that repeats or restates prior public disclosure permitted by this Agreement need not be submitted to the Charity or CRT for approval.

�

23.	FURTHER ASSURANCE

�

23.1

The Parties hereby undertake to do all such other acts and things, and execute and provide all such documents at the requesting Partys cost as may be necessary or desirable to give effect to the purposes of this Agreement.

�

24.	DISPUTE RESOLUTION

�

24.1

Insofar as this Agreement provides that a matter shall be resolved by Accountancy Opinion or Expert Opinion the opinion of such expert (who shall act as an expert and not as an arbitrator) shall be final and binding on the Parties. In the event of a Party seeking an Accountancy Opinion or Expert Opinion under this Agreement, each Party shall make written submissions to the expert so appointed and to the other Party within fourteen (14) days of the appointment. Each Party shall have seven (7) days to respond to the others submissions. The expert shall be requested to deliver his Accountancy Opinion or Expert Opinion within a further thirty (30) days. The costs of any Accountancy Opinion or Expert Opinion shall be borne in such proportions as the expert may determine in his opinion to be fair and reasonable in all the circumstances or, if no such determination is made in the opinion, by the Parties in equal proportions.

�

24.2

It shall be a condition precedent to the commencement of any action in court or other tribunal (save an action for an interim injunction or an Expert Opinion sought under Clause 12.1) in respect of any dispute relating to this Agreement that the Parties have sought to resolve the dispute by either Party notifying the other Party in writing for resolution to the Chief Executive Officer (in the case of CRT) and the Chief Executive Officer (in the case of the Company) (or their express delegates) (the Senior Executives) who shall meet (whether in person or via teleconference) within twenty one (21) days of such notice to seek resolution in good faith. If the Senior Executives are unable to resolve the dispute at such meeting, either Party may pursue any remedy available to such Party at law or in equity, subject to the terms and conditions of this Agreement and the other agreements expressly contemplated hereunder.

�

25.	LAW AND JURISDICTION

�

25.1

This Agreement shall be governed by and construed in accordance with English Law and, subject to the provisions of Clauses 24.1 and 24.2, each Party agrees to submit to the exclusive jurisdiction of the English Courts (except in respect of disputes under Clause 14 where jurisdiction is non-exclusive).

�

26.

EXECUTION

�

26.1

This Agreement may be executed in any one or more number of counterpart agreements , and as scanned email attachments, and all signatures and counterparts so exchanged shall be considered as original and shall be deemed to form part of and together constitute this Agreement.

�

27.	CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

�

27.1

Save that the Charity, the Contributors and their and CRTs respective officers, employees and agents in respect of Clauses 9 and 11 may enforce those respective terms, no term of this Agreement is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a Party to this Agreement. Notwithstanding the provisions of this Clause, the Parties shall be entitled to amend, suspend, cancel or terminate this Agreement or any part of it in accordance with Clause 21, without the consent of any third party including those referred to in this Clause.

�

The Parties hereby execute this Agreement by their duly authorised representatives:

�

Signed by:	��	�
�	�	�
Name:	��	�
�	�	�
Title:	��	�
�
�	For and on behalf of CANCER RESEARCH TECHNOLOGY LIMITED

�

Signed by:	��	�
�	�	�
Name:	��	�
�	�	�
Title:	��	�
�
�	For and on behalf of ASTERIAS BIOTHERAPEUTICS, INC

�

Appendix 1

Development Plan

�

Appendix 2

Executed CTOA

�

Schedule 5

No Fault Compensation Scheme

Preamble

The Association of the British Pharmaceutical Industry favours a simple and expeditious procedure in relation to the provision of compensation for injury caused by participation in clinical trials. The Association therefore recommends that a member company sponsoring a clinical trial should provide without legal commitment a written assurance to the investigator and through him to the relevant research ethics committee that the following Guidelines will be adhered to in the event of injury caused to a patient attributable to participation in the trial in question.

�

1	Basic Principles

1.1	Notwithstanding the absence of legal commitment, the company should pay compensation to patient-volunteers suffering bodily injury (including death) in accordance with these Guidelines.

1.2

Compensation should be paid when, on the balance of probabilities, the injury was attributable to the administration of a medicinal product under trial or any clinical intervention or procedure provided for by the protocol that would not have occurred but for the inclusion of the patient in the trial.

1.3	Compensation should be paid to a child injured in utero through the participation of the subjects mother in a clinical trial as if the child were a patient-volunteer with the full benefit of these Guidelines.

1.4	Compensation should only be paid for the more serious injury of an enduring and disabling character (including exacerbation of an existing condition) and not for temporary pain or discomfort or less serious or curable complaints.

1.5	Where there is an adverse reaction to a medicinal product under trial and injury is caused by a procedure adopted to deal with that adverse reaction, compensation should be paid for such injury as if it were caused directly by the medicinal product under trial.

1.6

Neither the fact that the adverse reaction causing the injury was foreseeable or predictable, nor the fact that the patient has freely consented (whether in writing or otherwise) to participate in the trial should exclude a patient from consideration for compensation under these Guidelines, although compensation may be abated or excluded in the light of the factors described in paragraph 4.2 below.

1.7

For the avoidance of doubt, compensation should be paid regardless of whether the patient is able to prove that the company has been negligent in relation to research or development of the medicinal product under trial or that the product is defective and therefore, as the producer, the company is subject to strict liability in respect of injuries caused by it.

�

2	Type of Clinical Research Covered

2.1

These Guidelines apply to injury caused to patients involved in Phase II and Phase III trials, that is to say, patients under treatment and surveillance (usually in hospital) and suffering from the ailment which the medicinal product under trial is intended to treat but for which a product licence does not exist or does not authorise supply for administration under the conditions of the trial.

2.2	These Guidelines do not apply to injuries arising from studies in non-patient volunteers (Phase I), whether or not they are in hospital, for which separate Guidelines for compensation already exist.

�

2.3

These Guidelines do not apply to injury arising from clinical trials on marketed products (Phase IV) where a product licence exists authorising supply for administration under the conditions of the trial, except to the extent that the injury is caused to a patient as a direct result of procedures undertaken in accordance with the protocol (but not any product administered) to which the patient would not have been exposed had treatment been other than in the course of the trial.

2.4

These Guidelines do not apply to clinical trials which have not been initiated or directly sponsored by the company providing the product for research. Where trials of products are initiated independently by doctors under the appropriate Medicines Act 1968 exemptions, responsibility for the health and welfare of patients rests with the doctor alone (see also paragraph 5.2 below).

3	Limitations

3.1	No compensation should be paid for the failure of a medicinal product to have its intended effect or to provide any other benefit to the patient.

3.2	No compensation should be paid for injury caused by other licensed medicinal products administered to the patient for the purpose of comparison with the product under trial.

3.3	No compensation should be paid to patients receiving placebo in consideration of its failure to provide therapeutic benefit.

3.4	No compensation should be paid (or it should be abated as the case may be) to the extent that the injury has arisen:

�

3.4.1

through a significant departure from the agreed protocol;

3.4.2

through the wrongful act or default of a third party, including a doctors failure to deal adequately with an adverse reaction;

�

3.4.3

through contributory negligence by the patient.

4	Assessment of Compensation

4.1	The amount of compensation paid should be appropriate to the nature, severity and persistence of the injury and should in general terms be consistent with the quantum of damages commonly awarded for similar injuries by an English Court in cases where legal liability is admitted.

4.2	Compensation may be abated, or in certain circumstances excluded, in the light of the following factors (on which will depend the level of risk the patient can reasonably be expected to accept):

4.2.1

the seriousness of the disease being treated, the degree of probability that adverse reactions will occur and any warnings given;

4.2.2

the risks and benefits of established treatments relative to those known or suspected of the trial medicine.

This reflects the fact that flexibility is required given the particular patients circumstances. As an extreme example, there may be a patient suffering from a serious or life-threatening disease who is warned of a certain defined risk of adverse reaction. Participation in the trial is then based on an expectation that the benefit/risk ratio associated with participation may be better than that associated with alternative treatment. It is, therefore, reasonable that the patient accepts the high risk and should not expect compensation for the occurrence of the adverse reaction of which he or she was told.

4.3

In any case where the company concedes that a payment should be made to a patient but there exists a difference of opinion between company and patient as to the appropriate level of compensation, it is recommended that the company agrees to seek at its own cost (and make available to the patient) the opinion of a mutually acceptable independent expert, and that his opinion should be given substantial weight by the company in reaching its decision on the appropriate payment to be made.

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5	Miscellaneous

5.1

Claims pursuant to the Guidelines should be made by the patient to the company, preferably via the investigator, setting Out details of the nature and background of the claim and, subject to the patient providing on request an authority for the company to review any medical records relevant to the claim, the company should consider the claim expeditiously.

5.2

The undertaking given by a company extends to injury arising (at whatever time) from all administrations, clinical interventions or procedures occurring during the course of the trial but not to treatment extended beyond the end of the trial at the instigation of the investigator. The use of unlicensed products beyond the trial period is wholly the responsibility of the treating doctor and in this regard attention is drawn to the advice provided to doctors in MAL 3Q2 concerning the desirability of doctors notifying their protection society of their use of unlicensed products.

5.3

The fact that a company has agreed to abide by these Guidelines in respect of a trial does not affect the right of a patient to pursue a legal remedy in respect of injury alleged to have been suffered as a result of participation. Nevertheless, patients will normally be asked to accept that any payment made under the Guidelines will be in full settlement of their claims.

5.4

A company sponsoring a trial should encourage the investigator to make clear to participating patients that the trial is being conducted subject to the ABPI Guidelines relating to compensation for injury arising in the course of clinical trials and have available copies of the Guidelines should they be requested.

References

1��Guidelines for Medical Experiments in Non-patient Human Volunteers, ABPI March 1988, as amended May 1990.

2��MAL 30 A Guide to the Provisions affecting Doctors and Dentists, DHSS, (Revised June 1985)

�

The Association of the British Pharmaceutical Industry

12 Whitehall London SW1

�

Schedule 6

CRT Licence

THIS AGREEMENT is made the________ day of _______________________20[��]

BETWEEN:

(1)	CANCER RESEARCH TECHNOLOGY LIMITED, a company registered in England and Wales with number 1626049 with registered office at [Angel Building, 407 St. John Street, London, EC1V 4AD, England] (CRT); and

(2)	ASTERIAS BIOTHERAPEUTICS, INC, a Delaware company with principal place of business at 230 Constitution Drive, Menlo Park, CA 94025, USA (the Company).

WHEREAS

(A)	CRT, the Company and the Charity (as defined below) are parties to a Clinical Trial and Option Agreement dated [��] (the CTOA) relating to the Investigational Medicinal Product (as defined in the CTOA).

(B)

Pursuant to clause 7.5 of the CTOA, the Company has agreed to licence the Company Intellectual Property (as defined below) and grant sub-licences under the Third Party Licences (as defined below) in return for a share of any revenue generated by CRT from the commercial exploitation of such intellectual property rights upon the terms and conditions set out below.

NOW IT IS HEREBY AGREED as follows:

1.	INTERPRETATION

�

1.1

In this Agreement except where the context requires otherwise, the following words and expressions shall have the following meanings:

�

	Charity	means Cancer Research UK, a charity registered under number 1089464 of Angel Building, 407 St. John Street, London EC1V 4AD, England. �
	Clinical Trial	has the meaning given in the CTOA. �
	Company Background Intellectual Property	means those elements of the Company Intellectual Property with broad potential application within and outside the Field including the Company Combination Patent Rights and the Company Intellectual Property specified in Annexes 1A, 2A and 3A. �
	Company Combination Patent Rights	means those Patent Rights of the Company which claim the use of the Product or Investigational Medicinal Product in combination with one or more other anti-cancer agents and� all Patent Rights deriving priority there from.

�

	Company Foreground Intellectual Property	means those elements of the Company Intellectual Property with applications solely or primarily within the Field including the Company Intellectual Property specified in Annexes 1B, 2B and 3B. �
	Company Intellectual Property	means the Company Owned Patent Rights and all rights in the Company Materials, the Investigational Medicinal Product and the Company Know-How. �
	Company Know-How	means: (a) any Know How of the Company that was disclosed by the Company to the Charity pursuant to the Technology Transfer Plan and/or the CTOA; (b) any Know How described in Annex 2; and (c) such other Know How of the Company relating to the Investigational Medicinal Product (and any constituents thereof) or any Related Product including but not limited to: (i) any safety and toxicological data; (ii) information relating to manufacturing/production; (iii) information relating to quality; (iv) information relating to safe and proper handling, storage and use; and (v) any information which would in any way improve the prospects for its commercialisation. �
	Company Materials	means Materials owned by the Company which are necessary or useful to generate the Product,� a Related or the Investigational Medicinal Product, more particularly described in Annex 3. �
	Company Owned Patent Rights	means (i) those Patent Rights listed in Annex 1; (ii) those Patent Rights of the Company which would be infringed by the unauthorised manufacture, use or sale in, or importation into, the relevant country of the Investigational Medicinal Product, Product or Related Products; (iii) the Company Combination Patent Rights and (iv) all Patent Rights deriving priority from (i), (ii) and (iii). �
	Control	has the meaning given in the CTOA.
�
	Direct Costs	means any external costs and expenses incurred from time to time by or on behalf of CRT in filing, prosecuting, maintaining, enforcing, defending and exploiting the Company Intellectual Property, including without limitation: i.��all charges paid by CRT pursuant to Clause 6.2; ii.�� official patent filing, prosecution, maintenance and renewal fees; iii.��all patent agents, legal, accounting and other professional fees and expenses; iv.��travel and other out-of-pocket expenditure; v.��courier charges and third party printing costs; vi.��any non-recoverable taxes or charges including Value Added Tax which may be imposed; and vii.�� all charges paid by CRT pursuant to Clause 2.3.

�

	Effective Date	means the date of this Agreement. �
	Exclusive Third Party Licences	means those licences listed in Annex 4A. � �
	Field	means the use of the Product and any Related Product(s) in�immunotherapy applications using ***, for the treatment, prophylaxis, prevention and/or cure of human disease and conditions. �
	Gross Revenue	means any and all sums (or other consideration of monetary value) received by CRT from time to time in respect of the commercial exploitation of the Investigational Medicinal Product, Product or Related Products. For the avoidance of doubt, Gross Revenue shall exclude any sums received by CRT for the purpose of further research and/or development of the Investigational Medicinal Product. �
	Investigational Medicinal Product or IMP	has the meaning given in the CTOA. � �
	Intellectual Property Rights	means all Patent Rights, Know-How, copyright, database rights, design rights, moral rights, rights in trade names, logos and trade and service marks, domain names, rights in Materials and all rights or forms of protection of a similar nature or having equivalent or similar effect to any of them which may subsist anywhere in the world, whether or not any of them are registered including any application for registration of any of them. �
	Know-How	has the meaning given in the CTOA. �
	Licence	has the meaning given in the CTOA. �
	Materials	has the meaning given in the CTOA. �
	Net Revenue	means Gross Revenue less Direct Costs. �
	Non-Exclusive Third Party Licences	means those licences and sublicences listed in Annex 4B.

�

	Party �	means either party to this Agreement and Parties means both of them.
	Patent Rights	has the meaning given in the CTOA. �
	Product	has the meaning given in the CTOA. �
	Related Product	has the meaning given in the CTOA. �
	Technology Transfer Plan	has the meaning given in the CTOA. �
	Third Party Background Intellectual Property	means those elements of the Intellectual Property Rights licensed under the Third Party Licences with broad potential application within and outside the Field. �
	Third Party Foreground Intellectual Property � Third Party Foreground Patent Rights	means those elements of the Intellectual Property Rights licensed under the Third Party Licences with applications solely or primarily within the Field. � means those elements of the Patent Rights licensed under the Third Party Licences with applications solely or primarily within the Field. �
	Third Party Licences	means the Exclusive Third Party Licences and the Non-Exclusive Third Party Licences. �
�
�	Third Party Licence Costs	means those milestone, royalty and other payments listed in Annex 5 (including any apportionment formulas or details) in respect of the Third Party Licences, in each case to the extent that the same becomes payable by the Company to the relevant third party licensor as a direct result of an act of CRT or its sub-licensee in the exercise of its rights pursuant to this Agreement.

�

1.2

The headings in this Agreement are for convenience only and shall not affect its interpretation. Unless the contrary intention appears, words denoting persons shall include any individual, partnership, company, corporation, joint venture, trust, association, organisation or other entity, in each case whether or not having separate legal personality. References to the words include or including shall be construed without limitation to the generality of the preceding words.

�

LICENCE

�

2.1

Pursuant to clause 7.5 of the CTOA, and in consideration of the provisions of Clauses 4 and 6, the Company hereby grants to CRT:

�

2.1.1

a*** under the Company Intellectual Property; and

�

2.1.2

an exclusive worldwide sub-licensable (through multiple tiers of sub-licences) sublicence under the hTERT Licensed Patents; and

�

2.1.3

a*** under the University of Western Ontario Licensed Patents; and

�

2.1.4

a*** under the Isis Licensed Patents; and

�

2.1.5

a *** under the Merix/Duke Licensed Patents; and

�

2.1.6

a *** under the Merix/Rockefeller Licensed Patents; and

�

2.1.7

a*** under the Immunomic/JHU Licensed Patents,

in each case subject to the terms and conditions described in Clause 6 below and further detailed in Annex 6, to research, develop, make, have made, import, use and sell Products and Related Products in the Field in the Territory.

�

2.2

The *** Licences prohibit further sublicensing without the consent of the licensor.� The Company agrees to work with CRT and third party licensors under these Third Party Licences to attempt to obtain expanded sublicense rights as requested by CRT to facilitate the development and commercialization of Products and Related Products.� If such expanded sublicensing rights cannot be negotiated with licensors, the Company will, to the maximum extent allowed under the applicable Third Party Licences, directly sublicense any third party CRT reasonably requests in order to facilitate the timely development and commercialization of Products and Related Products.

�

2.3

Subject to the restrictions and preapproval procedures described in Sections 2C and 4C of the WARF License and Annex 6, the Company agrees to directly sublicense any third party CRT reasonably believes to require a sublicence under the WARF License in order to facilitate the timely development and commercialization of Products and Related Products, provided however that CRT or such third party shall be responsible for payment of any sublicensing fees incurred as a result of such sublicence.

2.4

Those terms and provisions of any Third Party Licence that are required by the Third Party Licence to be referenced or included in a sublicence or sub-sublicence, as listed in Annex 6, are hereby incorporated into this Agreement by reference.� CRT and the Company agree to amend this Agreement to add to this Agreement any provision of a Third Party Licence that the licensor or sublicensor may reasonably require to be so added under the terms of a Third Party Licence.

�

2.5

The Company agrees to disclose to CRT any Company Know-How and Know-How related to the IMP, the Product, or any Related Product licensed under a Third Party Licence that was not already disclosed to CRT pursuant to the CTOA within three (3) months of the Effective Date and agrees that the Company Know-How may be used by CRT and anyone to whom CRT discloses the Company Know-How and that, for so long as it is exclusively licensed to CRT under this Agreement, the Company shall not disclose the Company Know-How or Know-How licensed under a Third Party Licence to any third party for use within the Field, or use the same in any internal research programme within the Field.

�

2.6

The Company either has or agrees to transfer the Company Materials and those Materials licensed under a Third Party Licence (the Third Party Materials) listed in Annex 3C to CRT (or any third party nominated by CRT) within three (3) months of the Effective Date and agrees that the Company Materials and Third Party Materials may be used by CRT and any third party authorised by CRT and that, for so long as it is exclusively licensed to CRT under this Agreement, the Company shall not transfer any Company Materials or Third Party Materials to any third party or use the same in any internal research programme within the Field.

�

2.7

At CRTs request, the Company shall negotiate with CRT in good faith on reasonable commercial terms a sub-licensable licence in respect of any Intellectual Property Rights which come under the Control of the Company after the Effective Date and which may be necessary and/or useful for the development and/or commercial exploitation of the Company Intellectual Property, and the Intellectual Property licensed under the Third Party Licences, in the Field.

�

2.8

CRT and its sublicensees shall not use any Company Materials, Third Party Materials or Products for any purpose outside that permitted by this Agreement, and will not use Company Materials or Third Party Materials to perform any of the following experiments: (a) intermixing of Company Materials or Third Party Materials with an intact embryo, either human or nonhuman; (b) implanting Company Materials or Third Party Materials in a uterus, or (c) attempting to make whole embryos by any method.

�

2.9

The Company hereby represents and warrants that as at the date of this Agreement:

�

2.9.1

other than the Third Party Licences, it does not have an extant licence or right to acquire a licence for Intellectual Property Rights within the Field that has been or may be granted to it or an Affiliate of the Company by a third party; and

�

2.9.2

CRT has been provided with complete (other than as visibly redacted) and accurate copies of the Third Party Licences, including all variations that have been made to them.

�

2.10

The Company undertakes not to make any variations to the Third Party Licences without the prior written consent of CRT.

�

2.11

If any Third Party Licence is liable to be, or is summarily terminated, the Company shall give as much notice as practicable to CRT and at CRTs request use its commercially reasonable endeavours to facilitate a continuance and an assignment of the Third Party Licence to CRT.

3.	ASSISTANCE AND FURTHER ASSURANCE

�

3.1

The Company hereby agrees to promptly provide to CRT or its nominated patent agent all documents relating to the filing, prosecution and maintenance of the Company Foreground Patent Rights and, to the extent that it has the right to such documents under the relevant Third Party Licence, the Third Party Foreground Patent Rights licensed under the Exclusive Third Party Licences.

�

3.2

The Company agrees to assist CRT and any third party that CRT may nominate in understanding and using the Company Know-How, the Company Materials and the Know-How and Materials licensed under Third Party Licences and to assist CRT and any such third party in relation to any further development of the Product, Investigational Medicinal Product or any Related Product and any regulatory application in relation thereto (including without limitation and to the extent that the Company may lawfully do so by the provision of information that may be requested from time to time in relation to the origin, development, and distribution by the Company to any third parties of the Product).

�

3.3

The Company will maintain and will not terminate any Third Party Licence without the prior written agreement of CRT.

4.	REVENUE SHARE

�

4.1

CRT and the Company shall share Net Revenue in the following proportions:

�

CRT��***;

Company��***.

�

4.2

In the event that any Gross Revenue is received by CRT as part of the consideration for the grant of rights which include rights other than those in respect of Company Intellectual Property or licensed under the Third Party Licences, CRT shall apportion the consideration as between on the one hand, the rights granted in respect of the Company Intellectual Property and, on the other, any other rights granted, in such manner as is fair and reasonable.

�

4.3

If CRT receives any non-monetary consideration in respect of the commercial exploitation of the Company Intellectual Property (such as company stocks and shares), (i) prior to entering into any agreement providing for the payment of non-monetary consideration, CRT shall obtain the express written consents of Third Party Licensors for such non-cash payments as required under the relevant Third Party Licences and (ii)�such non-monetary consideration shall not form Gross Revenue until CRT has received cash proceeds from the disposal or other realisation of such consideration. CRT shall at its sole discretion determine the timing of and price for any such realisation. For the avoidance of doubt, any dividend or similar monetary consideration received in respect of such non-monetary consideration shall form Gross Revenue.

5.	MANAGEMENT AND EXPLOITATION

�

5.1

The filing, prosecution, maintenance, enforcement and defence of any Company Foreground Intellectual Property and further development and commercial exploitation thereof shall be at the sole cost and discretion of CRT.

6.	THIRD PARTY LICENCES

�

6.1

To the extent that the Company has such rights under the relevant Third Party Licence, the Company agrees that the right to control the filing, prosecution, maintenance, enforcement and defence of any Third Party Foreground Intellectual Property, or to procure that the relevant licensor(s) under the Third Party Licence(s) does so, shall be transferred to CRT. To the extent that the control of any such Third Party Foreground Intellectual Property is transferred to CRT it will comply with the patent management provisions of the relevant Third Party Licence as identified in Annex 6.

6.2

CRT will be responsible for paying to the Company any signing fee, royalty fee, milestone payment, sub-licence fee, annual payment or other similar fee payable directly as a result of developing, out-licensing, marketing or selling Products and/or Related Products in the Field by CRT or its sub-licensees pursuant to this Agreement that the Company is obliged to pay under the Third Party Licences solely as a result of the said activities by CRT or its sub-licensees.� Any such fees that relate to both activities under this Licence by CRT or its sub-licensees and to activities of or on behalf of the Company (whenever commenced) outside of the Field shall be subject to appropriate apportionment between CRT and the Company on a fair and equitable basis which the Parties shall agree at the time. The Company shall keep CRT informed in a timely manner of the Companys activities that have a bearing on the rights and obligations of CRT under this clause. For the avoidance of doubt� (subject to CRTs right to require apportionment of fees between CRT and the Company as mentioned above in this clause 6.2) CRT shall have responsibility under and in accordance with this Clause 6.2 for the Third Party Licence Costs but shall not have liability for any penalties, costs or charges that are payable under the relevant Third Party Licence as a result of any negligence or breach of contract by the Company.� CRT shall not be obliged to deal with the sub-licensors under the Third Party Licences directly, and provided that CRT has made the payments to the Company of the payments mentioned above in this Clause 6.2, CRT shall have no further liability and shall be indemnified by the Company in respect of any claim made by a sub-licensor regarding the same. CRT acknowledges that it has been provided with a redacted copy of the WARF License and unredacted copies of the other Third Party Licences, and is aware of the payment obligations thereunder.

�

CRT will notify the Company:

�

6.2.1

on becoming aware of the achievement of any milestone event that triggers Third Party Licence Costs; and

�

6.2.2

on receipt of sales data and royalty payments from a sub-licensee in respect of which royalty based Third Party Licence Costs are payable, and will provide the Company with a copy of the relevant sales data received from CRTs sub-licensee to enable the Company to comply with its financial reporting obligations under the Third Party Licences.

�

6.3

CRT will pay to the Company the sums that CRT is obliged to pay to the Company pursuant to Clause 6.2 above in a timely manner so as to avoid the Company making late payment under the relevant Third Party Licence. Company will provide CRT with a copy of any invoice it receives for costs payable by CRT under any Third Party Licence, and CRT will make payment under any such properly due and payable invoices within thirty (30) days of receipt.

�

6.4

CRT will be responsible for fulfilling or obligating its sub-licensee(s) to fulfil any diligence and development reporting obligations under the Third Party Licences [as identified in Appendix 6].� CRT acknowledges that it has been provided with a redacted copy of the WARF License and unredacted copies of all other Third Party Licences, and is aware of the diligence and development reporting obligations thereunder.

�

6.5

Any payments or other contractual obligations of the Company owed to a third party that are not covered by Clauses 2.3, 6.1, 6.2, and 6.3 and 6.4 will remain the exclusive responsibility of the Company, whether or not connected to the rights granted to CRT under this Agreement.

�

6.6

The Company will as soon as reasonably possible (and in any event within seven (7) days) notify CRT if it becomes aware that it has breached the terms of any Third Party Licences or otherwise becomes aware of any acts or omissions which would give one or more of its licensors the right to terminate a Third Party Licence.

�

6.7

CRT will require as a term of any sub-licence of rights to commercialise Products or Related Products that the sub-licensee maintains levels of insurance coverage or a scheme of self insurance that is appropriate to cover the sub-licensees intended activities in respect of Products and/or Related Products.

�

6.8

CRT will endeavour to procure from any sub-licensee(s) to which it intends to grant rights to commercialise Products or Related Products indemnities in favour of the licensors under the Third Party Licences that are consistent with those provided by the Company. In the event that CRT is unable to procure such indemnities from a prospective sub-licensee and is not willing or able to provide them its self it will not enter into such sub-licence without the prior written agreement of the Company.

�

7.	CONFIDENTIALITY

�

7.1

Subject to the other provisions of this Clause 7, each Party undertakes that both during and after termination of this Agreement, it will keep confidential and not disclose to any person other than to its officers, employees or professional advisors whose province it is to know, any confidential proprietary information of the other Party disclosed to or obtained by it in connection with this Agreement. For these purposes, Company Know-How shall be deemed to be the confidential information of CRT but only to the extent such Company Know-How pertains solely or directly to the Product or a Related Product and the Field.� Additionally, subject to the provisions of Clause 7.2, any information of the Charity (and any charitable body succeeding to it) disclosed to or obtained by the Company in connection with this Agreement shall be deemed to be the confidential information of the Charity.

�

7.2

With the exception of Company Know-How which the Company shall keep confidential in accordance with Clause 7.1 and information that is required to be treated as confidential under the CTOA, Clause 7.1 shall not apply to:

�

7.2.1

information which is or was already known to the receiving Party at the time of disclosure under this Agreement, as shown by the receiving Partys written records, without any obligation to keep it confidential;

�

7.2.2

information which at the time of being disclosed or obtained by the receiving Party under this Agreement or at any time thereafter, is published or otherwise generally available to the public other than due to default by the receiving Party of its obligations hereunder; or

�

7.2.3

information which is required to be disclosed by a competent Court or regulatory authority or otherwise by applicable law or statute or any rule or regulation of any Regulatory Authority or other government or administrative agency or authority, to the extent of such disclosure, provided that the receiving Party shall give notice of such disclosure as soon as reasonably practicable.

�

7.3

Clause 7.1 above shall not apply to the use or disclosure of any information by any Party for the purpose of exercising or enforcing its rights under this Agreement.

�

7.4

Each Party will ensure that all personnel and third parties to whom confidential information of another Party is disclosed are informed of the provisions of this Clause 7.

�

7.5

So long as this Agreement remains in effect, as between CRT and the Company only, clause 5 of the CTOA shall cease to operate and this Clause 7 shall replace and supersede the obligations and rights of CRT and the Company only under such clause 5 of the CTOA.� In the event that the Company exercises the Second Option under Clause 9 and this Agreement terminates, the terms of the Licence shall apply.

8.	WARRANTIES

�

8.1

The Company represents and warrants to CRT that to the best of its knowledge and belief:

�

8.1.1

it is not aware of any inventors of the Company Owned Patent Rights other than the inventors named therein;

�

8.1.2

it is the legal and beneficial owner of the Company Intellectual Property free of any third party rights or encumbrances other than those of the Geron Royalty Agreement effective October 1, 2013, a copy of which has been provided to CRT;

�

8.1.3

no claims of infringement of intellectual property rights owned or controlled by any third party have been made or threatened against the Company with respect to the Intellectual Property Rights licensed hereunder;

�

8.1.4

it has not and will not enter into any Agreement which prevents it fulfilling its obligations under this Agreement;

�

8.1.5

it has not done anything whereby the whole or any part of the rights licensed under the Agreement might be invalidated or registration of them refused;

�

8.1.6

the manufacture, use and possession of the Investigational Medicinal Product by CRT or any person authorised by CRT, in each case in accordance with the terms of this Agreement, shall not infringe the rights (including without limitation any Intellectual Property Rights) of any third party;

�

8.1.7

it is not aware of the existence of any fact or circumstance that may materially affect the successful development and commercialisation of the Product;

�

8.1.8

it has the full right, power and authority, and has obtained all approvals or consents necessary to grant the rights under the Third Party Licences as provided under this Agreement;

�

8.1.9

the Third Party Licences are the only third party licences held by the Company in respect of the manufacture, possession and use the IMP and the rights granted to CRT under this Agreement;

�

8.1.10

there are no outstanding breaches of the Third Party Licences by the Company;

�

8.1.11

there are no acts or omissions on the part of the Company which would give one or more of its licensors the right to terminate a Third Party Licence, either now or at a later date; and

�

8.1.12

it is entitled to make the Company Materials and the Materials licensed under the Third Party Licences available to CRT for the purposes of this Agreement.

8.2

Nothing in this Agreement shall be treated as imposing on CRT any liability to the Company in relation to the further development and commercial exploitation of the Investigational Medicinal Product or the Company Intellectual Property.

9.	DURATION AND REVERSION OF RIGHTS

�

9.1

Subject to the remainder of this Clause 9, this Agreement shall come into force on the Effective Date and shall extend for so long as CRT has the potential to receive Gross Revenue.

�

9.2

In the event that CRT has not, within *** of the Effective Date either (i) found a commercial partner that has commenced and is continuing diligent effort to develop and/or commercialize the Product or any Related Product; or (ii) initiated or is not continuing diligent further development of the Product or any Related Product using its own (or the Charitys) resources then:

�

9.2.1

the rights granted to CRT to the Company Background Intellectual Property and the Third Party Background Intellectual Property will terminate and revert to the Company;

�

9.2.2

CRTs obligations in respect of the Company Background Intellectual Property and the Third Party Background Intellectual Property, including those under Clauses 6.2 and 6.3, will terminate and revert to the Company;

�

9.2.3

the Company will have a renewed option (the Second Option) exercisable within *** from the date of termination of CRTs licence rights to the Company Background Intellectual Property and Third Party Background Intellectual Property (the Second Option Period) to enter into the Licence with a *** reduction to the financial consideration payable to CRT under clause 4 of the Licence. If the Company exercises its Second Option by written notice to CRT and enters into the Licence within the Second Option Period this Agreement will terminate;

�

9.2.4

if CRT has a bona fide offer from a third party to enter into a licence agreement in respect of the Clinical Trial Results, Company Foreground Intellectual Property and/or Third Party Foreground Intellectual Property during the Second Option Period CRT will provide the Company with written notice of its intention enter into such licence and the Company will have *** from the date of such notice to exercise its Second Option by written notice to CRT and, if it does so, a further *** to enter into the Licence. If the Company does not exercise its Second Option and enter into the Licence within such time periods the Second Option will lapse and Clause 9.2.5 will apply;

�

9.2.5

if the Company does not exercise the Second Option and enter into the Licence within the Second Option Period CRT will be free to continue to sub-licence or otherwise utilise the Clinical Trial Results, Company Foreground Intellectual Property and/or Third Party Foreground in accordance with the terms of this Agreement. In the event that CRT finds a commercial partner or development route for the Company Foreground Intellectual Property for which a licence under the Company Background Intellectual Property and/or Third Party Background Intellectual Property would be necessary or useful, in so far as the Company is still reasonably able to grant such rights, the Company will do and CRTs rights and obligations in respect of such Company Background Intellectual Property and/or Third Party Background Intellectual Property under this Agreement will be re-instated; and

�

9.2.6

if this Agreement terminates CRT shall, and shall require all of its sublicensees to, within thirty (30) days return to the Company or destroy (by a method specified by the Company) and at the Companys cost and expense any remaining quantities of the Company Materials and/or Confidential Information of the Company in the possession or control of CRT and its sublicensees.

10.

GENERAL

�

10.1

The surviving terms and conditions of the CTOA shall, in accordance with its terms, continue in full force and effect.

�

10.2

This Agreement shall be governed by and construed in accordance with English law and each Party agrees to submit to the exclusive jurisdiction of the English courts (except in respect of disputes under Clause 7 where jurisdiction is non-exclusive).

�

IN WITNESS whereof this document is executed by the parties on the date stated at the beginning of this Agreement through their authorised signatories

Signed by:	� �	�
�	�	�
Name:	��	�
�
Title:	��	�
�
�	For and on behalf of CANCER RESEARCH TECHNOLOGY LIMITED

�

Signed by:	��	�
�	�	�
Name:	��	�
�
Title:	��	�
�
�	For and on behalf of ASTERIAS BIOTHERAPEUTICS, INC

�

ANNEX 1A

COMPANY BACKGROUND PATENT RIGHTS

PATENT/ APPLICATION NUMBER	TITLE	TERRITORY	FILING DATE
��	��	��	��
��	�	��	��
��	��	��	�

ANNEX 1B

COMPANY FOREGROUND PATENT RIGHTS

PATENT/ APPLICATION NUMBER	TITLE	TERRITORY	FILING DATE
��	�	�	�
�	�	�	�
�	�	�	�

ANNEX 2A

COMPANY BACKGROUND KNOW-HOW

ANNEX 2B

COMPANY FOREGROUND KNOW-HOW

ANNEX 3A

COMPANY BACKGROUND MATERIALS

ANNEX 3B

COMPANY FOREGROUND MATERIALS

ANNEX 3C

THIRD PARTY MATERIALS

ANNEX 4A

EXCLUSIVE THIRD PARTY LICENCES

�

Exclusive License Agreement between Geron Corporation and Isis Innovation Limited effective March 23, 2006, which was subsequently assigned by Geron Corporation to Company effective October 1, 2013¹

Exclusive License Agreement between Geron Corporation and The University of Western Ontario effective January 30, 2009, as amended January 30, 2011 and January 11, 2012, and subsequently assigned by Geron Corporation to Company effective October 1, 2013.²

Exclusive License Agreement between Geron Corporation and Immunomic Therapeutics Inc effective October 31, 2006, which was subsequently assigned by Geron Corporation to Company effective October 1, 2013.³

¹Isis Innovation Limited retains rights to use the Licensed Technology and any Improvements (including those by the licensee), as defined in the Exclusive License Agreement, for academic and research purposes

²The University of Western Ontario retains rights to use the licensed patents for teaching and other non-commercial uses.

³Exclusive rights are for use with ***

ANNEX 4B

NON-EXCLUSIVE THIRD PARTY LICENCES

�

Non-Exclusive License Agreement between Company and the Wisconsin Alumni Research Foundation, effective October 7, 2013

Exclusive License Agreement between Geron Corporation and Argos Therapeutics (formerly Merix Biosciences, Inc.) effective March 6, 2004, and subsequently assigned (along with sublicenses described below) by Geron Corporation to the Company effective October 1, 2013.⁴

Patent Assignment Agreement Dated as of August 1, 2002 Between Merix and Gerold Schuler (regarding cryoconservation and generation of dendritic cells in closed systems).⁴

Patent Assignment Agreement Dated as of August 1, 2002 Between Merix and Gerold Schuler (regarding Cd4+ Cd25+ Reg T Cells).⁴

Patent Assignment Agreement dated as of June 26, 2001 Between Merix and Gerold Schuler.⁴

Exclusive License Agreement Between Merix. and Duke University Effective as of January 10, 2000, as Amended as of July 28, 2003.⁵

Exclusive License Agreement Between Merix and the Rockefeller University Effective as of June 27, 2001, as Amended as of June 29, 2001.⁶

⁴The rights under this license are co-exclusive with Argos Therapeutics (formerly Merix Biosciences, Inc.)

�

⁵Sublicensed by Argos Therapeutics (formerly Merix Biosciences, Inc.) to Geron Corporation.� The sublicense are co-exclusive with Argos Therapeutics

⁶Sublicensed by Argos Therapeutics (formerly Merix Biosciences, Inc.) to Geron Corporation.� The rights to certain patents are non-exclusive in that they are shared with third parties named in the license agreement, and the rights to all patents are co-exclusive with Argos Therapeutics.

ANNEX 5

THIRD PARTY LICENCE COSTS

�

Annex 6

Sublicensing Terms of Third Party Licences under CRT Licence

�

Schedule 7

Third Party Licences and Payments

The entire content of this Schedule 7 is subject to and to be interpreted in accordance with the consent letters tabulated immediately below which consent letters vary certain of the respective in- licences that are referred to in this Schedule 7:

Item No.	Name of Head� Licensor	Date of Original Licence	Licensed Technology	Date of Consent Letter �
1	Isis Innovation Ltd	March 23, 2006	Isis Licensed Patents	1st July 2014
2	Wisconsin Alumni Research Foundation	October 7, 2013	WARF Intellectual Property	28th August 2014
3	John Hopkins University	September 26, 2006 (Head License from JHU to Immunomic) � October 31, 2006 (sublicense from Immunomic to Asterias)	Immunomic Licensed Patents	5th September 2014

Schedule 7A:� Sublicensing Terms of Third Party Licences under CTOA

Licensed Technology (CTOA Section Reference)	Underlying Third Party Agreement(s)	Language incorporated by reference � �	Other sublicensing terms & conditions (Section reference from underlying agreement)
hTERT Licensed Patents (6.1.2)	Exclusive Sublicense Agreement between Geron Corporation and Asterias Biotherapeutics, effective October 1, 2013 � Intellectual Property License Agreement between Geron Corporation and University Technology Corporation, effective December 9, 1996	n/a	*** �

�

University of Western Ontario Licensed Patents (6.1.3)	License Agreement between Geron Corporation and University of Western Ontario, effective January 30, 2009 (assigned to Asterias by Geron effective October 1, 2013)	n/a	� ***
� Isis Licensed Patents (6.1.4)	� Exclusive License Agreement between Geron Corporation and Isis Innovation Ltd, effective March 23, 2006 (assigned to Asterias by Geron effective October 1, 2013)	***	*** �
� Merix/Duke Licensed Patents (6.1.5)	� Exclusive License Agreement between Geron Corporation and Merix Bioscience, effective March 6, 2004 (assigned to Asterias by Geron effective October 1, 2013) � License Agreement between Duke University and Merix Bioscience, effective January 10, 2000 � �	� n/a	***
Immunomic Licensed Patents (6.1.6)	Exclusive License Agreement between Geron Corporation and Immunomic Therapeutics Inc effective October 31, 2006 (assigned to Asterias by Geron effective October 1, 2013) � License Agreement between Johns Hopkins University and Immunomic Therapeutics, effective September 26, 2006	***	*** �

�

WARF Intellectual Property (6.1.7)

Non-exclusive License Agreement between Asterias Biotherapeutics and the Wisconsin Alumni Research Foundation, effective October 7, 2013

��

***

�

Schedule 7B� Summary of Third Party Licence Payments payable by CRT¹

Agreement	Licensed IP	Milestone payments	Royalties/Revenue Share�	Other financial obligations
WARF License	WARF Patents, Wisconsin Materials	*** �	***	***
hTERT License	hTERT Licensed Patents	***	*** �	*** �
Royalty Agreement between Asterias Biotherapeutics and Geron Corporation, effective October 1, 2013	Company Owned Patent Rights listed in Schedule 1A � University of Western Ontario Licensed Patents � Isis Licensed Patents � Merix/Duke Licensed Patents � Merix/Rockefeller Licensed Patents � Immunomic/JHU Licensed Patents � �	*** �	*** �	***
Merix License	Sublicense under Merix/Duke Licensed Patents � Sublicense under Merix/Rockefeller Licensed Patents	***	***	***

�

Duke License	Merix/Duke Licensed Patents	***	*** �	***
Rockefeller License	Merix/Rockefeller Licensed Patents	***	*** �	***
Immunomic License	Sublicense under Immunomic/JHU Licensed Patents	***	***	***
University of Western Ontario	University of Western Ontario Licensed Patents	***	***	***
Isis Innovation Ltd	Isis Licensed Patents	***	***	***

¹The parties agree that the foregoing is a summary for convenience only.� Although every attempt has been made to make the following summary as accurate and complete as possible, summarizing contractual terms can result in inaccuracies or incomplete information.

***

�

Schedule 8

Development Work Plan

***

Asterias will perform method development with minimal qualification with the expectation that that CR-UK or a designated analytical facility would perform the qualifications. Analytical in-process and non-qualified release assay protocols will be transferred to CR-UK or a designated analytics facility.

Technology Transfer

As is referenced in the agreement Asterias will collaborate with CR-UK to develop an appropriate Technology Transfer Plan to assure a successful transfer of the AST-VAC2 process.

�

Based upon the achievement of the Phase I development criteria, Asterias will provide documentation and select materials for the AST-VAC2 project. Documentation includes any specified development reports, a process description and flow diagrams; ***; equipment, materials and reagent lists, and supplier information.

�

Training on the AST-VAC2 process and analytical protocols at Asterias will be initiated at a time and schedule that is documented in the Technology Transfer Plan and compatible to CR-UKs schedule for a successful transferal of information and selected materials.

Proposed Time Lines

The following represents a projected schedule and sequence of events for the development and tech transfer of the AST-VAC2 process to CR-UK (Figure 1).

�

Figure 1: Proposed Time Line

***

�

Milestones & Deliverables:

Table 1: Milestones

***

Asterias will supply monthly updates discussing data and progress toward agreed upon development objectives as well as any foreseen critical issues.

Based on the Technology Transfer Plan referenced in the agreement, Asterias deliverables will include the following as part of the transfer of the AST-VAC2 process:

�

Working Cell Bank vials (***)

�

Regulatory history files on lines and bank

�

Available RNA plasmid vials

�

Process Description

�

Process Flow Diagram(s)

�

Equipment lists

�

Bill of Materials

�

Reagent Preparation-Protocols and Forms

�

Analytical Method Protocols

�

Stage I, II & III protocols

A final technology transfer summary may also be considered to realize the completion of the technology transfer milestone(s).� The Technology Transfer Plan will contain the summation of the on-site training plan as well as the results of the receiving sites independent process run.

Additional requirements can be detailed in the Technology Transfer Plan.

�

Schedule 9

Additional Studies

�

In tumour biopsies collected during surgical resection:

***

�

In blood samples collected after the commencement of therapy and up until surgical resection:

***

�

Scale-up runs performed by the Charity for technology transfer of AST-VAC2 process

�

Engineering run for AST-VAC2 manufacture performed by the Charity prior to manufacture of cGMP batch of AST-VAC2 IMP

�

cGMP manufacturing of AST-VAC2 IMP by the Charity

�

Studies performed by the Charity to assess and qualify the *** used for the final production of AST-VAC2

�

Studies performed by the charity to qualify the use of AST-VAC2 release assays at the Charity

�

In process, release, and stability testing of AST-VAC2 IMP performed by the Charity

�

For the avoidance of doubt, all references in this Schedule 9 to anything done by the Charity shall be construed as including anything done on behalf of or at the instruction of the Charity.

�

Schedule 10

Form of Progress Report

�

Schedule 11

Clinical Protocol Summary

Indication	***
Number of patients	***
Number of administrations per patient	***
Dose per administration	***
Primary endpoints	***
[Secondary endpoints]	* *
Major inclusion criteria	***

�

Exhibit 31

�

CERTIFICATIONS

I, Pedro Lichtinger, certify that:

I have reviewed this quarterly report on Form 10-Q of Asterias Biotherapeutics, Inc.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which the periodic reports are being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

November 10, 2014	�
�	�
s/ Pedro Lichtinger	�
Pedro Lichtinger
Principal Executive Officer

CERTIFICATIONS

I, Robert W. Peabody, certify that:

I have reviewed this quarterly report on Form 10-Q of Asterias Biotherapeutics, Inc.

(a)

(b)

(c)

(d)

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

�

Date:� November 10, 2014	�
�	�
s/ Robert W. Peabody	�
Robert W. Peabody
Principal Financial Officer

�

Exhibit 32

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Asterias Biotherapeutics, Inc. (the "Company") for the quarter ended September 30, 2014 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), each of the undersigned, Pedro Lichtinger and Robert W. Peabody, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 10, 2014
�	�
s/ Pedro Lichtinger	�
Pedro Lichtinger
Principal Executive Officer

s/ Robert W. Peabody	�
Robert W. Peabody
Principal Financial Officer

�

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Delaware	�	46-1047971
(State or other jurisdiction of incorporation or organization)	�	(IRS Employer Identification No.)

�	�	September 30, 2014 (Unaudited)		�	�	December 31, 2013		�
ASSETS	�			�	�			�
CURRENT ASSETS	�			�	�			�
Cash and cash equivalents	�	$	5,025,499	�	�	$	2,171,113	�
Available-for-sale securities, at fair value	�	�	12,100,043	�	�	�	32,052,217	�
BioTime warrants to be distributed to holders of Series A common stock (See Note 2)	�	�	7,572,089	�	�	�	15,568,307	�
Prepaid expenses and other current assets	�	�	352,502	�	�	�	340,092	�
Total current assets	�	�	25,050,133	�	�	�	50,131,729	�
�	�	�	�	�	�	�	�	�
NONCURRENT ASSETS	�	�	�	�	�	�	�	�
Intangible assets, net	�	�	26,115,308	�	�	�	28,291,584	�
Equipment and furniture, net	�	�	1,252,158	�	�	�	1,460,518	�
Investment in affiliates	�	�	415,543	�	�	�	415,543	�
Other assets	�	�	360,983	�	�	�	54,423	�
Total noncurrent assets	�	�	28,143,992	�	�	�	30,222,068	�
TOTAL ASSETS	�	$	53,194,125	�	�	$	80,353,797	�
�	�	�	�	�	�	�	�	�
LIABILITIES AND STOCKHOLDERS' EQUITY	�	�	�	�	�	�	�	�
CURRENT LIABILITIES	�	�	�	�	�	�	�	�
Obligation to distribute BioTime warrants to holders of Series A common stock (See Note 2)	�	$	7,572,089	�	�	$	15,568,307	�
Amount due to BioTime	�	�	406,379	�	�	�	2,064,432	�
Accounts payable	�	�	386,064	�	�	�	567,140	�
Accrued liabilities	�	�	140,400	�	�	�	95,885	�
Total current liabilities	�	�	8,504,932	�	�	�	18,295,764	�
�	�	�	�	�	�	�	�	�
Long-term liabilities, net deferred tax liability	�	�	10,787,141	�	�	�	8,277,548	�
TOTAL LIABILITIES	�	�	19,292,073	�	�	�	26,573,312	�
�	�	�	�	�	�	�	�	�
Commitments and contingencies (See Note 10)	�	�	�	�	�	�	�	�
�	�	�	�	�	�	�	�	�
STOCKHOLDERS EQUITY	�	�	�	�	�	�	�	�
Preferred Stock, $0.0001 par value, authorized 5,000,000 shares; none issued and outstanding	�	�	-	�	�	�	-	�
Common Stock, $0.0001 par value, authorized 75,000,000 shares Series A, $0.0001 par value, and 75,000,000 shares Series B, $0.0001 par value; 6,537,779 shares Series A common stock and 24,361,040 shares Series B common stock issued and outstanding at September 30, 2014, and 6,537,779 shares Series A common stock and 23,961,040 shares Series B common stock issued and outstanding at December 31, 2013	�	�	3,075	�	�	�	3,050	�
Additional paid-in capital (See Notes 2 and 5)	�	�	66,851,919	�	�	�	79,850,758	�
Accumulated other comprehensive loss on available-for-sale investments	�	�	(3,043,515	)	�	�	(2,934,686	)
Deficit accumulated during the development stage	�	�	(29,909,427	)	�	�	(23,138,637	)
Total stockholders equity	�	�	33,902,052	�	�	�	53,780,485	�
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY	�	$	53,194,125	�	�	$	80,353,797	�

Consideration transferred to BioTime:	�			�
Asterias Series B shares	�	$	52,164,568	�
Warrants to purchase Asterias Series B shares	�	�	2,012,481	�
Excess of contributed assets value over consideration	�	�	4,800,063	�
Total consideration issued	�	$	58,977,112	�
�	�	�	�	�
Assets transferred by BioTime:	�	�	�	�
BioTime common shares, at fair value	�	$	34,985,163	�
BioTime Warrants, at fair value	�	�	18,276,406	�
Cancellation of outstanding obligation to BioTime	�	�	5,000,000	�
Investment in affiliates, at cost	�	�	415,543	�
Geron asset acquisition related transaction costs paid by BioTime	�	�	300,000	�
Total assets transferred	�	$	58,977,112	�

Consideration paid to Geron:	�			�
Asterias Series A shares, net of share issuance costs of $541,800	�	$	15,121,222	�
Obligation to distribute BioTime Warrants	�	�	18,276,406	�
Transaction and other costs	�	�	1,519,904	�
Total consideration paid	�	$	34,917,532	�
Assets acquired from Geron (preliminary allocation):	�	�	�	�
Patents and other intellectual property rights related to hES cells	�	$	29,017,009	�
Deferred tax liability arising from difference in book versus tax basis on Geron intangible assets acquired	�	�	(11,558,243	)
In-process research and development expensed upon acquisition	�	�	17,458,766	�
Total assets and in-process research and development acquired	�	$	34,917,532	�

�	�	September 30, 2014 (Unaudited)		�	�	December 31, 2013		�
Equipment and furniture	�	$	1,881,366	�	�	$	1,681,113	�
Accumulated depreciation	�	�	(629,208	)	�	�	(220,595	)
Equipment and furniture, net	�	$	1,252,158	�	�	$	1,460,518	�

�		September 30, 2014 (Unaudited)				December 31, 2013
�	�			�	�			�
Intangible assets	�	$	29,017,009	�	�	$	29,017,009	�
Accumulated amortization	�	�	(2,901,701	)	�	�	(725,425	)
Intangible assets, net	�	$	26,115,308	�	�	$	28,291,584	�

Year	�	Amortization Expense		�
2014	�	$	725,425	�
2015	�	�	2,901,701	�
2016	�	�	2,901,701	�
2017	�	�	2,901,701	�
2018	�	�	2,901,701	�
Thereafter	�	�	13,783,079	�
Total	�	$	26,115,308	�

�	�	Shares		�
Outstanding at January 1, 2014	�	�	2,840,000	�
Granted	�	�	1,515,000	�
Exercised	�	�	-	�
Forfeited	�	�	(1,235,001	)
Outstanding at September 30, 2014	�	�	3,119,999	�
Exercisable at September 30, 2014	�	�	1,410,518	�

�	�	September 30 2014 (Unaudited)		�
Risk-free interest rate	�	0.42 -	�1.340%	�
Dividend yield	�	-	�	�
Volatility	�	69.37 -	�84.05%	�
Expected term (years)	�	2.72 -	�4.18	�

�			Nine Months Ended September 30,
�			2014				2013
Research and development	�	$	351,254	�	�	$	39,961	�
General and administrative	�	�	1,048,939	�	�	�	401,473	�
Total stock-based compensation expense	�	$	1,400,193	�	�	$	441,434	�

Year	�	Minimum Lease Payments		�
2014	�	$	295,882	�
2015	�	�	1,022,989	�
2016	�	�	1,234,200	�
2017	�	�	1,271,160	�
2018	�	�	1,308,120	�
Thereafter	�	�	5,262,840	�
Total	�	$	10,395,191	�