EXHIBIT
10.1
EXTENSION
AGREEMENT
This Extension Agreement (this
“ Agreement ”), dated as of January 30,
2009, is entered into by and among International Stem Cell
Corporation, a Delaware corporation (the “ Company
”), International Stem Cell Corporation, a California
corporation and wholly owned Subsidiary of the Company (“
ISC California ”), Lifeline Cell Technology, LLC, a
California limited liability company and wholly owned Subsidiary of
the ISC California (“ Lifeline ”, and together
with the Company and ISC California, the “
Debtors ”), and Gemini Master Fund, Ltd. (“
Holder ”).
R E C I T A L S
:
WHEREAS, on May 14, 2008 the Company issued to
the Holder that certain OID Senior Secured Convertible Note in the
original principal amount of $1,000,000 with a maturity date of
January 31, 2009 (the “ Note ”) pursuant to that
certain Securities Purchase Agreement (“ Purchase
Agreement ”) dated as of May 14, 2008; initially
capitalized terms used herein but not otherwise defined shall have
the meanings set forth in the Note or Purchase Agreement, as the
case may be;
WHEREAS, the
Company’s obligations under the Note are secured by the
Security Agreement and IP Security Agreement;
WHEREAS, the Note and Purchase Agreement were
amended pursuant to that certain Modification of Note and Security
Agreement entered into as of July 22, 2008 (“
Modification ”) to modify the repayment obligations of
the Note under Section 4.12 of the Purchase Agreement;
WHEREAS, pursuant the Purchase Agreement (as
amended) the Company repaid $500,000 of the principal amount of the
Note in January 2009, and on January 29, 2009 the Holder converted
$100,000 in principal amount of the Note, such that as of the date
hereof the remaining outstanding principal amount of the Note is
$400,000; and
WHEREAS, the parties hereto wish to extend the
maturity date of the Note and amend the Transaction Documents in
accordance with the terms hereof;
A G R E E M E N T
:
NOW THEREFORE, in consideration of the foregoing
premises and the mutual covenants set forth in this Agreement, and
for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
(a) Extension of
Maturity Date . The Maturity Date under the Note is
hereby extended from January 31, 2009 until the date (the “
Extended Maturity Date ”) which is two (2) months
following the date on which the Company deposits the Escrow Amount
into the Escrow Account (as such terms are defined below) (“
Deposit Date ”).
(b)
Repayment/Prepayment . The Company is no longer
required to pay any principal amount of the Note pursuant to
Section 4.12 of the Purchase Agreement (as modified by the
Modification), and in addition the Company retains its right to
prepay the Note at any time pursuant to Section 6 of the
Note.
2.
Termination of
Security . Effective on the Deposit Date, the
Security Agreement and IP Security Agreement, and all the security
interests granted thereby, shall automatically terminate and the
Holder’s security interest in and lien on all the Collateral
and Intellectual Property Collateral shall be released.
3.
Escrow
. Promptly following the execution
hereof, the Company and the Holder hereby agree to enter into an
escrow agreement (“ Escrow Agreement ”) with
Torrey Pines Bank, a California banking association, as escrow
agent (“ Escrow Agent ”), in the form of Exhibit
I attached hereto. Promptly following execution of
this Agreement and such Escrow Agreeme
