EXHIBIT 10.7
 
INTELLECTUAL PROPERTY SECURITY AGREEMENT
 
This INTELLECTUAL PROPERTY SECURITY AGREEMENT (this “Agreement”), dated as of
May 14, 2008, is made by INTERNATIONAL STEM CELL CORPORATION (the “Grantor”), in
favor of GEMINI STRATEGIES, LLC, as collateral agent (“Agent”) for the holder of
the OID Senior Secured Convertible Note issued or to be issued in the original
aggregate principal amount of up to $1,000,000 (the “Note”) by International
Stem Cell Corporation, a Delaware corporation (“Company”), pursuant to the
Purchase Agreement (as defined below) (collectively, together with their
endorsees, transferees and assigns, the “Lenders”).
 
W I T N E S S E T H:
 
WHEREAS, the Company and the Lenders are party to that certain Securities
Purchase Agreement, dated on or about on or about the date hereof (“Purchase
Agreement”), pursuant to which the Company issued or is issuing the Note, among
other things;
 
WHEREAS, contemporaneously herewith the Grantor and the Company are entering
into a Security Agreement (“Security Agreement”), pursuant to which the Grantor
has granted a security interest in its assets and properties to secure the
satisfaction of the Company’s obligations under the Note, among other things;
and
 
WHEREAS, the Grantor is obligated under the Security Agreement to take such
further actions as the collateral Agent requests to further perfect the Lenders’
security interest granted under the Security Agreement, including without
limitation with respect to intellectual property;
 
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantor hereby agrees as follows:
 
DEFINED TERMS.
 
(a)           Certain Defined Terms.  As used in this Agreement, the following
terms shall have the meanings set forth below:
 
           “Patents” means patents and patent applications, including without
limitation the patents and patent applications listed on Schedule I hereto and
all continuations, divisionals, provisionals, continuations in part, or reissues
of applications related to patents thereon, and (i) all renewals thereof, (ii)
all income, royalties, damages and payments now and hereafter due and/or payable
under and with respect thereto, subject to payment to any co-owner or inventor
of its, his or her share thereof, including without limitation payments under
all licenses entered into in connection therewith and damages and payments for
past or future infringements or dilutions thereof, (iii) the right to sue for
past, present and future infringements thereof, and (iv) all of the Grantor’s
rights corresponding thereto throughout the world.
 

 
 

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(b)           Terms Defined in the Purchase Agreement.  Capitalized terms used
in this Agreement and not otherwise defined herein have the meanings ascribed to
them in the Purchase Agreement.
 
2.           GRANT OF SECURITY INTEREST IN INTELLECTUAL PROPERTY
COLLATERAL.  Grantor hereby grants to the Agent, as collateral agent for the
Lenders, a continuing and perfected first priority security interest (as set
forth in the Security Agreement) in all of Grantor’s right, title and interest
in, to and under all of Grantor’s Patents, whether presently existing or
hereafter created or acquired (collectively, the “Intellectual Property
Collateral”), including without limitation those patents referred to on Schedule
I hereto and including:
 
(a)           all registrations and applications in respect of the foregoing,
including continuations, divisionals, provisionals, continuations in part, or
reissues of applications and patents issuing thereon; and
 
(b)           all products and proceeds of the foregoing, including without
limitation any claim by Grantor against third parties for past, present or
future infringement of any Patent.
 
3.           SECURITY AGREEMENT.  The security interests granted pursuant to
this Agreement are granted in conjunction with the security interests granted to
Lenders pursuant to the Security Agreement.  Grantor hereby acknowledges and
affirms that the rights and remedies of Lenders with respect to the security
interest in the Intellectual Property Collateral made and granted hereby are
more fully set forth in the Security Agreement, the terms and provisions of
which are incorporated by reference herein as if fully set forth herein.
 
4.           AUTHORIZATION TO SUPPLEMENT.  If Grantor shall obtain rights to any
new Intellectual Property (as defined in the Security Agreement), the provisions
of this Agreement shall automatically apply thereto.  Grantor shall give Lenders
prompt written notice with respect to any such new Intellectual
Property.  Grantor represents that Schedule I is substantially accurate and
complete but reserves the right from time to time to correct inaccuracies and/or
omissions by giving Lenders written notice thereof.  Without limiting Grantor’s
obligations under this Section 4, Grantor hereby authorizes the Agent and
Lenders unilaterally to modify this Agreement by amending Schedule I to include
any such corrections and other modifications and any such new Intellectual
Property of Grantor.  Notwithstanding the foregoing, no failure to so modify
this Agreement or amend Schedule I shall in any way affect, invalidate or
detract from Lenders’ continuing security interest in all Intellectual Property
Collateral, whether or not listed on Schedule I.
 
5.           COUNTERPARTS.  This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same
instrument.  In proving this Agreement in any judicial proceedings, it shall not
be necessary to produce or account for more than one such counterpart signed by
the party against whom enforcement is sought.  Any signatures delivered by a
party by facsimile transmission or by e-mail transmission shall be deemed an
original signature hereto.
 

 
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6.           GOVERNING LAW; JURISDICTION.  This Agreement shall be governed by
and construed under the laws of the State of California applicable to contracts
made and to be performed entirely within the State of California.  Each party
hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in San Diego County, California for the adjudication of
any dispute hereunder or in connection herewith or with any transaction
contemplated hereby and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper.  Each party hereby irrevocably waives personal service
of process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address in effect for
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof.  Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law.
 
7.           SUCCESSORS AND ASSIGNS.  The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective successors and
permitted assigns of the parties.  Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and permitted assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.  A Lender may assign its rights hereunder
in connection with any private sale or transfer of its Note, in which case the
term “Lender” shall be deemed to refer to such transferee as though such
transferee were an original signatory hereto.  Grantor may not assign its rights
or obligations under this Agreement.
 
[Signature Pages Follow]
 
 
 
 
 
 

 
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IN WITNESS WHEREOF, the Grantor has caused this Intellectual Property Security
Agreement to be executed and delivered by its duly authorized officer as of the
date first set forth above.
 

 
INTERNATIONAL STEM CELL CORPORATION
 
By:  Kenneth C. Aldrich___________
Name:  Kenneth C. Aldrich
Title:   Chief Executive Officer
 
 

 
 
 
 
 
 
 

 

 
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SCHEDULE I
to
INTELLECTUAL PROPERTY SECURITY AGREEMENT

 
Alternative ID
Short Title
Country
Status
Application No
Application Date
Inventors
ISCC1130/US/1
Synthetic cornea from Retinal Stem Cells
United States of America
Pending
11/584,412
Oct-19-2006
Kelleher-Andersson Judy, Hammond Jeremy
ISCC1140/US/1
Use of recipient endothelial cells for faster vascularization of tissue and
tissue-engineered constructions transplants
United States of America
Pending
10/233,005
Aug-30-2002
Revazova Elena, Bryzgalov I., IVANOV ATANOV, Sebastian J., Keller G., Sorokina
Lu., WATSON JEFF
ISCC1150/US/1
Patient- specific stem cell lines derived from human parthenogenetic blastocysts
United States of America
Pending
12/082,028
Apr-07-2008
Revazova Elena, Pryzhkova Marina V., Kuzmichev Leonid N., Janus Jeffrey
ISCC1150/WO/1
Patient- specific stem cell lines derived from human parthenogenetic blastocysts
PCT
Pending
PCT/US2008/004529
Apr-07-2008
Revazova Elena, Pryzhkova Marina V., Kuzmichev Leonid N., Janus Jeffrey
ISCC1160/US
Specific Antibody Repression of the Cellular Signaling Pathways for Stem Cells
Differentiation
United States of America
Pending
60/983,049
Oct-26-2007
Turovets Nickolai, Revazova Elena, Agapova Larisa

 

 
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