Document:

isco-ex101_6.htm

Exhibit 10.1

INTERNATIONAL STEM CELL CORPORATION

PROMISSORY NOTE

 

FOR VALUE RECEIVED, and subject to the terms and conditions set forth herein, on this 2nd day of June, 2017 (the “Issuance Date”), International Stem Cell Corporation, a Delaware corporation, with offices located at 5950 Priestly Drive, Carlsbad, CA 92008 (the “Borrower”), hereby unconditionally promises to pay to the order of Andrey Semechkin or his assigns (the “Noteholder”), the principal amount of two million dollars ($2,000,000) (the “Loan”), together with all accrued interest thereon, as provided in this Promissory Note (the “Note”).

 

1.Previous Loan. On March 20, 2017 Noteholder was issued a Promissory Note in the principal amount of $1,300,000 by the Borrower (the “Original Note”). On June 2, 2017, the Noteholder provided an additional $700,000 of funds to the Borrower and surrendered the Original Note, in return for which the Noteholder was issued this Note, reflecting the revised terms of the Loan.

 

2.Final Payment Date; Optional Prepayments.

 

2.1Final Payment Date. The aggregate unpaid principal amount of the Loan and all accrued and unpaid interest shall be due and payable September 1, 2017 (the “Maturity Date”).

 

2.2Optional Prepayment. The Borrower may prepay the Loan in whole or in part at any time or from time to time without penalty or premium by paying the principal amount to be prepaid together with accrued interest thereon to the date of prepayment. 

 

3.Interest.

 

3.1Interest Rate. The outstanding principal amount of the Loan made hereunder shall bear interest at the annual rate of three and a half percent (3.5%) from the date the Loan was made until the Loan is paid in full, whether at maturity, by prepayment or otherwise.

 

3.2Interest Payment Dates. Interest shall be payable on maturity, or earlier with respect to any prepayment.

 

3.3Computation of Interest. All computations of interest shall be made on the basis of a year of 360 days and the actual number of days elapsed. Interest shall accrue on the Loan on the day on which such Loan is made, and shall not accrue on the Loan (or any portion thereof) for the day on which it is paid.

 

3.4Interest Rate Limitation. If at any time and for any reason whatsoever, the interest rate payable on the Loan shall exceed the maximum rate of interest permitted to be charged by the Noteholder to the Borrower under applicable law, such interest rate shall be reduced automatically to the maximum rate of interest permitted to be charged under applicable law, and that portion of 

1

 

Exhibit 10.1

any sum paid attributable to that portion of such interest rate that exceeds the maximum rate of interest permitted by applicable law shall be deemed a voluntary prepayment of principal.

 

4.Payment Mechanics. All payments of principal and interest shall be made in lawful money of the United States of America by check or by wire transfer of immediately available funds to the Noteholder’s account at a bank specified by the Noteholder in writing to the Borrower from time to time.

 

5.Governing Law. This Note and any claim, controversy, dispute or cause of action based upon, arising out of or relating to this Note, and the transactions contemplated hereby, shall be governed by the laws of the State of California.

 

 

IN WITNESS WHEREOF, the Borrower has executed this Note as of the Issuance Date written above.

 

 

			
	
BORROWER
	
 
	
NOTEHOLDER

	
International Stem Cell Corporation
	
 
	
Andrey Semechkin

	
 
	
 
	
 

	
/s/  Sophia D Garnette
	
 
	
/s/  Andrey Semechkin

	
Signature
	
 
	
Signature

	
 
	
 
	
 

	
Sophia D. Garnette
	
 
	
 

	
VP Legal Affairs & Operations
	
 
	
 

 

 

2Exhibit 10.1

 

RESCISSION AND RELEASE AGREEMENT

Port of Benton-IsoRay Medical, Inc.

 

 

THIS AGREEMENT is entered into this
2nd of May, 2017, by and between the Port of Benton, a municipal corporation of the State of Washington, as "Seller"
and the IsoRay Medical, Inc., a Delaware corporation, as "Purchaser",

 

WHEREAS, Seller sold to the Purchaser the
real property situated in Benton County, Washington, more particularly described on the attached Exhibit 1 and as part of the consideration
for the purchase of the real property, the Purchaser delivered to the Seller the Development Plan dated September 10, 2015, which
is attached hereto as Exhibit 2.

 

WHEREAS, the Purchaser has advised the Seller
that Purchaser is unable to meet the obligations set forth in the Development Plan and therefore will pay the additional consideration
provided for in Section 6 of the Development Plan.

 

WHEREAS, the Purchaser and the Seller desire
to forever reciprocally release each other as to any and all obligations under the Development Plan.

 

WHEREAS, the parties now wish to provide
for payment of the additional consideration and rescission of the Development Plan.

 

NOW THEREFORE, it is hereby agreed between
the Seller and the Purchaser as follows:

 

		1.	The Purchaser shall pay to the Seller One Hundred Ninety Seven Thousand Nine Hundred Dollars ($197,900.00) as additional consideration
required by Section 6 of the Development Plan

 

		2.	The Development Plan entered into between the parties shall be terminated when this Rescission and Release Agreement has been
executed by both parties and the Purchaser has paid the additional consideration as stated in Section 1. After the termination,
the Development Plan shall be of no further force and effect and the parties shall forever release and hold each other harmless
from any and all claims that are related to or arise out of the Development Plan.

 

		3.	After the rescission of the Development Plan, the Seller will execute and record a Deed in the form attached hereto as Exhibit
3 to remove the Development Plan as an encumbrance on the Purchaser's Title.

 

		4.	The real property will continue to be subject to the Technology & Business Campus Covenants and the casements, reservations
and restrictions of record.

 

		5.	If either party defaults (that is, fails to perform the acts required of it) in his contractual performance herein, the non-defaulting
party may seek specific performance pursuant to the terms of this Agreement, damages, or rescission.

 

     

     

    

 

		6.	If either party hereto is required to retain an attorney to enforce any provision of this Agreement, the non-defaulting party
shall be entitled to reasonable attorneys' fees regardless of whether the matter proceeds to judgment or is resolved by defaulting
party curing default.

 

		7.	There are no other verbal or other agreements which modify or affect this Agreement. Time is of the essence of this Agreement.
All subsequent modifications or waivers of any condition of this Agreement shall be in writing and signed by the appropriate parties.

 

		8.	This Agreement shall he interpreted and enforced according to the laws of the State of Washington. The venue for any action
related to this Agreement shall be in Benton County, Washington.

 

	PORT OF BENTON	 	ISORAY MEDICAL, INC.
	 	 	 	 	 
	 	 	 	 	 
	By:	/s/ Scott D. Keller	 	By:	/s/ Thomas C. LaVoy
	 	SCOTT D. KELLER	 	       	THOMAS C. LAVOY
	 	Executive Director	 	       	Chief Executive Officer/Chairman
	 	 	 	 	 
	 	 	 	 	 
	Date: 5-5-2017	 	Date: 5-2-2017

  

     

     

    

 

	STATE OF WASHINGTON	)	 
	 	) 	ss.
	County of Benton	)	 

 

On this
day before me personally appeared Scott D. Keller, to me known to be the Executive Director of Port, of Benton, and acknowledged
the said instrument to be the free and voluntary act and deed of said corporation for the uses and purposes therein mentioned,
and on oath stated that he was authorized to execute said instrument and that the seal affixed thereto is the corporate seal of
said corporation.

 

GIVEN UNDER my hand and official seal this
5th day of May, 2017

  

	 	/s/ Teresa A. Hancock
	 	NOTARY PUBLIC in and for the State of
	 	Washington, residing at Kennewick
	 	My commission expires: 03/01/2020

 

 

	STATE OF WASHINGTON	)	 
	 	) 	ss.
	County of Benton	)	 

 

On this
day, before me personally appeared Thomas C. LaVoy, to me known to be the Chief Executive Officer and Chairman of the corporation
which executed this instrument, and acknowledged the said instrument to be the free and voluntary act and deed of said corporation
for the uses and purposes therein mentioned, and on oath stated that he was authorized to execute said instrument.

 

GIVEN UNDER my hand and official seal this
2nd day of May, 2017.

  

	 	/s/ Teresa A. Hancock
	 	NOTARY PUBLIC in and for the State of
	 	Washington, residing at Kennewick
	 	My commission expires: 03/01/2020

  

     

     

    

 

Attachment 1

Real Property Description

To Rescission & Release Agreement

 

 

Section 23, Township 10 North, Range 28 East, Quarter NE:

 

Short Plat #3453, Lot 1 Recorded in Volume 1 of Short Plats,
at Page

3453, Records of Benton County, Washington under Auditor's File

Number 2014-033549, dated December 30, 2014.

 

Consisting of 4.20 acres (182,903 SQUARE FEET)

 

TOGETHER WITH AND SUBJECT TO EASEMENTS, RIGHTS-OF-WAY,
COVENANTS, RESERVATIONS AND RESTRICTIONS OF RECORD AND IN VIEW.

  

     

     

    

 

Attachment 2

Development Plan

To Rescission & Release Agreement

 

 

     

     

    

 

ISORAY MEDICAL, INC.

Development Plan

 

Isoray Medical, Inc., a Delaware corporation, (hereinafter "Isoray")
proposes to purchase approximately 4.20 acres of real property described on Exhibit 1 to the Real Estate Purchase and Sale Agreement
(hereafter "Property") currently owned by the Port of Benton, a Washington municipal corporation (hereafter 'Tort").
This document sets forth the manner in which the property will be utilized and developed by Isoray.

 

Isoray agrees this Development Plan will be binding upon Isoray
and its successors in title for a period of ten (10) years following the conveyance of the Property to Isoray by the Port and will
be a covenant running with the land.

 

		1.	Isoray will construct improvements on the Property in approximately the site configuration and design specifications as depicted
on Exhibit 2 to this Plan. The building constructed by Isoray will contain not less than 12,000 square feet of warehouse and production
space and up to 4,000 square feet of office space.

 

		2.	Isoray will commence construction of the improvements within one hundred eighty (180) days after the conveyance of the Property
and will complete the construction of the improvements within eighteen (18) months after the commencement of construction.

 

		3.	Isoray will use the Property for its primary production facility location for ten (10) years following the conveyance of the
Property to Isoray by the Port.

 

		4.	During the ten (10) years following the conveyance of the Property from the Port, Isoray will provide jobs at this location
for at least 25 full time equivalent employees.

 

		5.	The Port has agreed to sell the Property to Isoray partially in consideration of this Development Plan and the sales price
for the Property has been adjusted to reflect the covenants to which Isoray is bound under the provisions of this Development Plan.

 

		6.	In the event Isoray fails to comply with the provisions of the Development Plan related to the construction of improvements,
the use of the facility or the employment levels, the Port will provide written notice of the breach to Isoray and Isoray shall
have ninety (90) days from its receipt of the notice to cure the breach. If Isoray does not cure the breach within the cure period,
then Isoray will pay to the Port the difference between the sales price and the appraised value of the Property of this Property
without the covenants contained in this Development Plan. The Port will have the Property appraised at the time of the default
without taking into account the improvements constructed by Isoray, to value the unimproved Property at the time of the default.
Payment shall be made within thirty (30) days after the date the Port delivers the appraisal to Isoray.

 

		7.	The Port may approve amendments to this Development Plan. Any amendments must be in writing and must be approved by the Port
Commission before the amendment will be effective.

 

     

     

    

 

		8.	It is Isoray's intent to be a business partner with the Port of Benton and the City of Richland. As such, Isoray will work
to make sure the Property is used in compliance with applicable laws, regulations, and the general intent and purpose of this Development
Plan.

 

	 	PURCHASER:
	 	ISORAY MEDICAL, INC.
	 	 	 
	 	 	 
	Dated: 9/10/2015	By: 	/s/ Dwight Babcock
	 	 	DWIGHT BABCOCK
	 	 	CHIEF EXECUTIVE OFFICER
	 	 	 
	 	 	350 Hills Street #106
	 	 	Richaland, WA  99354

 

 

	STATE OF WASHINGTON	)	 
	 	)  	ss
	County of Benton	)	 

 

On this_____ day of _____________________,
2015, before me personally appeared DWIGHT BABCOCK the CHIEF EXECUTIVE OFFICER of ISORAY MEDICAL, INC. that executed the within
and foregoing instrument and acknowledged the said instrument to be the free and voluntary act and deed of said corporation for
the uses and purposes therein mentioned and on oath stated that he was authorized to execute said instrument and that the seal
affixed thereto is the corporate seal of said corporation.

 

IN WITNESS WHEREOF, I have hereunto set
my hand and affixed my official seal the day and year first above written.

 

 

	 	/s/ Sara Hansen
	 	NOTARY PUBLIC in and for the State of
	 	Arizona, residing at 6464 E. Grant Rd.
	 	My commission expires: 12/1/17

  

     

     

    

 

EXHIBIT I

"Property — Legal Description"

TECHNOLOGY & BUSINESS CAMPUS

4.20 Acres

 

 

SECTION 23, TOWNSHIP 10 NORTH, RANGE 28 EAST, QUARTER NE:

 

SHORT PLAT #3453, LOT 1 RECORDED IN VOLUME 1 OF SHORT PLATS,
AT PAGE 3453, RECORDS OF BENTON COUNTY, WASHINGTON UNDER AUDITOR'S FILE NUMBER 2014-033549, DATED DECEMBER 30, 2014.

 

CONSISTING OF 4.20 ACRES (182,903 SQUARE FEET)

 

TOGETHER WITH AND SUBJECT TO EASEMENTS, RIGHTS-OF-WAY, COVENANTS,
RESERVATIONS AND RESTRICTIONS OF RECORD AND IN VIEW.

 

 

     

     

    

 

Attachment 3

Deed

 

 

 

     

     

    

  

WHEN RECORDED RETURN TO:

 

 

 

Thomas C. LaVoy, CEO/Chairman

Isoray Medical Inc.

350 Hills Street, Suite 106

Richland, WA 99354-5411

  

 

 

QUIT CLAIM DEED

 

THE GRANTOR,
the Fort of Benton, a municipal corporation of the State of Washington, hereby conveys and quit claims to the GRANTEE,
Isoray Medical Inc., a Delaware corporation, the Grantors' right, title and interest in that certain Development Plan recorded
on February 10, 2017 under Auditor's File No. 2017-003826 for the following described real property situated in Benton County,
Washington, more particularly described on Exhibit 1 attached hereto.

 

This Deed
is given for the purpose of removing the Development Plan as an encumbrance on the title of this real property.

 

The real
property continues to be subject to easements, covenants, reservations and restrictions of record.

 

DATED on this17th day of May, 2017

 

	 	GRANTOR:
	 	 	 
	 	PORT OF BENTON
	 	 	 
	 	 	 
	 	By: 	/s/ Scott D. Keller
	 	 	SCOTT D. KELLER, PPM®
	 	 	Executive Director

 

 

     

     

    

 

	STATE OF WASHINGTON	)	 
	 	) 	ss.
	COUNTY OF BENTON	)	 

 

On this day, before
me, the undersigned, a Notary Public in and for the State of Washington, duly commissioned and sworn, personally appeared SCOTT
D. KELLER, to me known to be the Executive Director of the PORT OF BENTON which executed the foregoing instrument, and acknowledged
the said instrument to be the free and voluntary act and deed of said company, for the uses and purposes therein mentioned, and
on oath stated that he/she was authorized to execute the said instrument.

 

WITNESS my hand and official hereto affixed this
17th day of May, 2017.

 

	 	/s/ Teresa A. Hancock
	 	NOTARY PUBLIC in and for the State of
	 	Washington, residing at Kennewick
	 	My commission expires: 03/01/2020

  

     

     

    

 

EXHIBIT 1

Legal Description to

The Quit Claim Deed

 

Section 23, Township 10 North, Range 28 East, Quarter NE:

 

Short Plat #3453, Lot 1 Recorded in Volume 1 of Short Plats,
at Page

3453, Records of Benton County, Washington under Auditor's File

Number 2014-033549, dated December 30, 2014.

 

Consisting of 4.20 acres (182,903 SQUARE FEET)

 

TOGETHER WITH AND SUBJECT TO EASEMENTS, RIGHTS-OF-WAY, COVENANTS,
RESERVATIONS AND RESTRICTIONS OF RECORD AND IN VIEW.

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