addition, Asterias has patent protection in the Unites States and various other jurisdictions for producing cardiomyocytes, pancreatic
islet cells, hepatocytes, chondrocytes, and osteoblasts. The expiration dates of these patents range from 2020 to 2032. Should
a competitor not be able to market a product covered by these patents or if Asterias cannot license these patents before their
expiration, the benefits for procurement and maintenance of these rights would not be fully realized and the associated costs
would not be fully reimbursed.
Stem Cell Technology and Stem Cell Product Development Agreements
received the Telomerase Sublicense from Geron in connection with Asterias’ acquisition of Geron’s stem cell assets.
The Telomerase Sublicense grants Asterias an exclusive sublicense under certain patents owned by the University of Colorado’s
University License Equity Holdings, Inc. relating to telomerase and entitles Asterias to use the technology covered by the patents
in the development of AST-VAC1 and AST-VAC2 as immunological treatments for cancer. Under the Telomerase Sublicense, Asterias
paid Geron a one-time upfront license fee of $65,000, and Asterias will pay Geron an annual license maintenance fee of $10,000
due on each anniversary of the effective date of the agreement, and a 1% royalty on sales of any products that Asterias may develop
and commercialize that are covered by the sublicensed patents. The Telomerase Sublicense will expire concurrently with the expiration
of Geron’s license. That license will terminate in November 2018 when the last of the licensed patents expires. The Telomerase
Sublicense may also be terminated by Asterias by giving Geron 90 days written notice, by Asterias or by Geron if the other party
breaches its obligations under the sublicense agreement and fails to cure their breach within the prescribed time period, or by
Asterias or by Geron upon the filing or institution of bankruptcy, reorganization, liquidation or receivership proceedings, or
upon an assignment of a substantial portion of the assets for the benefit of creditors by the other party.
is obligated to indemnify Geron, Geron’s licensor, and certain other parties for certain liabilities, including those for
personal injury, product liability, or property damage relating to or arising from the manufacture, use, promotion or sale of
a product, or the use by any person of a product made, created, sold or otherwise transferred by Asterias or Asterias’ sublicensees
that is covered by the patents sublicensed under this agreement.
Agreement with University of California
assigned to Asterias its Exclusive License Agreement with The Regents of the University of California for patents covering a method
for directing the differentiation of pPS cells to glial-restricted progenitor cells that generate pure populations of oligodendrocytes
for remyelination and treatment of spinal cord injury. Pursuant to this agreement, Asterias has an exclusive worldwide license
under such patents, including the right to grant sublicenses, to create products for biological research, drug screening, and
human therapy using the licensed patents.
the license agreement, Asterias will be obligated to pay the university a royalty of 1% from sales of products that are covered
by the licensed patent rights, and a minimum annual royalty of $5,000 starting in the year in which the first sale of a product
covered by any licensed patent rights occurs, and continuing for the life of the applicable patent right under the agreement.
The royalty payments due are subject to reduction, but not by more than 50%, to the extent of any payments that Asterias may be
obligated to pay to a third party for the use of patents or other intellectual property licensed from the third party in order
to make, have made, use, sell, or import products or otherwise exercise Asterias’ rights under the Exclusive License Agreement.
Asterias will be obligated to pay the university 7.5% of any proceeds, excluding debt financing and equity investments, and certain
reimbursements, that Asterias receives from sublicensees, other than Asterias’ affiliates and joint ventures relating to
the development, manufacture, purchase, and sale of products, processes, and services covered by the licensed patent.