Document:

exv10w26

Exhibit 10.26

EXECUTION VERSION

Dated 23 December 2008

Between

STEMCELLS, INC.

as Lender

and

STEM CELL SCIENCES PLC

as Borrower

 

FACILITY AGREEMENT

 

MORRISON | FOERSTER

 

EXECUTION VERSION

THIS FACILITY AGREEMENT is dated December 2008 and is made

BETWEEN:

	(1)	 	STEMCELLS, INC. whose address is 3155 Porter Drive, Palo Alto, California 94304-1213, USA
(the “Lender”); and
	 
	(2)	 	STEM CELL SCIENCES PLC whose address is Meditrina Building 260, Babraham Research, Campus,
Cambridge CB22 3AT United Kingdom (the “Borrower”).

WHEREAS:

	(A)	 	The share capital of the Borrower is listed on the AIM market of the London Stock Exchange
plc.
	 
	(B)	 	The Lender is interested in entering into further discussions which may or may not lead to
the Lender making an offer to acquire all (or substantially the whole) of the undertaking and
assets of the Borrower or of any group company of the Borrower (the “Proposal”).
	 
	(C)	 	The Borrower requires working capital to maintain its current operations during the period of
those discussions concerning the Proposal.
	 
	(D)	 	The Borrower and SCS Holdings shall grant security to the Lender pursuant to the Share
Mortgage Deeds and the Assignment of Contract to be executed by the Lender in connection with
this Facility Agreement.

1 INTERPRETATION

1.1 Definitions

In this Facility Agreement the following terms have the meanings given to them in this clause 1.1,
except where the context otherwise requires.

“Advance” means the loan made or to be made under the Facility or, where the context requires, the
principal amount of that loan outstanding.

“Assignment of Contract” means the assignment of contract, in a form approved by the Lender and the
Borrower, pursuant to which the Borrower shall assign the benefit of an intra-group loan agreement
to the Lender by way of security.

“Borrower’s Account” means the bank account of the Borrower, details of which are as follows:

	 	 	 	 	 
	 

	 	Account name:
	 	Stem Cell Sciences plc
	 

	 	Bank:
	 	HSBC plc
	 

	 	 	 	70 Hanover Street
	 

	 	 	 	Edinburgh, EH2 1HQ
	 

	 	Bank account no.:
	 	91643177
	 

	 	Sort code:
	 	40-20-44
	 

	 	IBAN:
	 	GB 97MIDL 402044 91643177
	 

	 	BIC:
	 	MIDLGB2111M

 

EXECUTION VERSION

“Borrowings” means amounts borrowed or raised under any transaction having the commercial effect of
a borrowing or raising of finance.

“Business Day” means a day (other than Saturday or Sunday) on which banks are open for general
business in London and San Francisco.

“Competing Proposal” has the meaning given to such term in the Exclusivity Agreement.

“Default” means (a) any Event of Default or (b) any event or circumstance which is reasonably
likely to constitute an event of Default subject only to the giving of any notice, the expiry of
any applicable period, the making of any specified determination or the fulfillment of any
specified condition.

“Duty” means any duty, obligation or liability of any kind.

“Event of Default” means any event or circumstance specified as such in clause 11.2 (Events of
Default).

“Exclusivity Letter” means the exclusivity letter, in a form approved by the Lender and the
Borrower, pursuant to which the Borrower shall give certain undertakings and assurances to the
Lender in connection with their entering into discussions concerning the Proposal.

“Facility” means the loan facility provided under this Facility Agreement as described in clause 2
(The Facility).

“Finance Documents” means this Facility Agreement, the Guarantee, the Share Mortgage Deeds, the
Assignment of Contract, the Negative Pledge Letter and the Exclusivity Letter.

“Group” means the Borrower and its Subsidiaries from time to time; and “Group Company” means any of
them.

“Guarantee” means the all-monies guarantee, in a form approved by the Lender and the Borrower,
pursuant to which SCS Holdings shall guarantee any obligations of the Borrower to the Lender.

“Loan” means, at any time, the aggregate principal amount outstanding under this Facility
Agreement.

“Negative Pledge Letter” means a letter from SCS UK to the Lender in a form approved by the Lender
and the Borrower, confirming, inter alia, that SCS UK will not grant security over its assets to
any party without the Lender’s prior written consent.

“Permitted Borrowings” means:

	(a)	 	Borrowings outstanding in the normal and prudent course of the trading activities of the
Group and which have not been overdue for more than 60 days;

 

EXECUTION VERSION

	(b)	 	Borrowings by Group Companies from other Group Companies, provided that (i) such Borrowings
already exist as at the date of this Facility Agreement, or (ii) are necessary in order to
remit sums borrowed under this Facility Agreement, or subsequent Permitted Borrowings from
non-Group entities, to other Group Companies; and

	(c)	 	Borrowings by the Borrower from non-Group entities by way of additional finance, provided
that such Borrowings are subordinated to any monies owed by the Borrower to the Lender (being
either unsecured or, if secured, then subordinated in a manner satisfactory to the Lender (in
which respect the Lender’s discretion shall be absolute)); and

	(d)	 	any Borrowings arising under the Finance Documents or otherwise in favour of the Lender or
any transferee or assignee of, or any refinancing of such Borrowings.

“Permitted Disposal” means any sale, lease, licence, transfer or other disposal on arm’s length
terms:

	(a)	 	of trading stock or cash made in the ordinary course of trading of the disposing entity;
	 
	(b)	 	of obsolete or redundant vehicles, plant and equipment for cash; or
	 
	(c)	 	arising as a result of any Permitted Security Interest.

“Permitted Loan” means:

	(a)	 	any trade credit extended by any Group Company to its customers on normal commercial terms
and in the ordinary course of trading and which are not outstanding for more than 60 days; and
	 
	(b)	 	loans outstanding between Group Companies (to the extent that these are consistent with the
definition of Permitted Borrowings).

“Permitted Security Interests” means:

	(a)	 	liens arising by operation of law in the ordinary course of Group Companies’ trading;

	(b)	 	retention of title claims arising over goods or equipment purchased by Group Companies in the
ordinary course of their trading; and
	 
	(c)	 	Security Interests granted to the Lender pursuant to the Finance Documents.

“Regulation” means any present or future law, regulation, rule, request, requirement or guideline
of any authority, whether or not it has the force of law (but, if it does not, with which the
person concerned habitually complies or should habitually comply).

“Repayment Date” means the date falling 6 months subsequent to the date of this Facility Agreement.

“Right” means any right, privilege, power, immunity or other interest or remedy of any kind.

 

EXECUTION VERSION

“SCS Australia” means Stem Cell Sciences Australia (pty) Limited.

“SCS Holdings” means Stem Cell Sciences Holdings Limited.

“SCS UK” means Stem Cell Sciences UK Limited.

“Security Interest” means any mortgage, standard security, charge (whether fixed or floating),
assignment by way of security, hypothecation, pledge, lien or other security arrangement of any
kind.

“Share Mortgage Deeds” means:

	(a)	 	the share mortgage deed, in a form approved by the Lender and the Borrower, pursuant to which
the Borrower shall grant a charge over shares held by it in SCS Holdings;

	(b)	 	the share mortgage deed, in a form approved by the Lender and the Borrower, pursuant to which
SCS Holdings shall grant a charge over shares held by it in SCS UK; and

	(c)	 	the share mortgage deed, in a form approved by the Lender and the Borrower, pursuant to which
SCS Holdings shall grant a charge over shares held by it in SCS Australia.

“Subsidiary” means a subsidiary undertaking within the meaning of section 1162 of, and Schedule 7
to, the Companies Act 2006.

“Tax” means any tax, levy, impost, duty or other charge or withholding of a similar nature
(including any penalty or interest payable in connection with any failure to pay or any delay in
paying any of the same).

“£” or “Sterling” means the lawful currency of the United Kingdom.

1.2 In this Facility Agreement:

	(a)	 	the summary and the headings are inserted for convenience only and do not affect the
interpretation of this Facility Agreement;
	 
	(b)	 	references to clauses and schedules are to clauses of, and schedules to, this Facility
Agreement;
	 
	(c)	 	references to this Facility Agreement, a Finance Document or any other document are to this
Facility Agreement, that Finance Document or that other document as from time to time amended,
restated, novated, or replaced, however fundamentally;
	 
	(d)	 	references to a person include an individual, firm, company, corporation, unincorporated body
of persons and any government entity;
	 
	(e)	 	references to a person include its successors in title, permitted assignees and permitted
transferees;

 

EXECUTION VERSION

	(f)	 	words importing the plural include the singular and vice versa;
	 
	(g)	 	references to a time of day are to London time, using the 24 hour clock;
	 
	(h)	 	references to any enactment include that enactment as re enacted; and, if an enactment is
amended, any provision of this Facility Agreement which refers to that enactment will be
amended in such manner as the Lender, after consultation with the Borrower, determines to be
necessary in order to preserve the intended effect of this Facility Agreement;
	 
	(i)	 	a Default (other than an Event of Default) is “continuing” if it has not been remedied or
waived and an Event of Default is “continuing” if it has not been waived; and
	 
	(j)	 	if the due date for any payment under this Facility Agreement falls on a day which is not a
Business Day, the due date shall be extended to the next Business Day.

1.3 This Facility Agreement may be executed in any number of counterparts and by the different
parties on separate counterparts, each of which may be delivered by facsimile or by pdf and each of
which when so executed and delivered shall be an original, but all counterparts shall together
constitute one and the same instrument.

1.4 A person who is not a party to this Facility Agreement has no right under the Contracts (Rights
of Third Parties) Act 1999 to enforce or enjoy the benefit of any term of this Facility Agreement.

2 THE FACILITY

2.1 Subject to the terms of this Facility Agreement, the Lender makes available to the Borrower a
loan facility in an aggregate amount of £200,000.

2.2 The Borrower shall immediately use and apply the whole of the Advance made by the Lender
exclusively for the working capital purposes of the Borrower and its subsidiaries.

2.3 The Lender is not bound to monitor or verify the application of any amount borrowed under or
pursuant to this Facility Agreement.

3 ADVANCES

3.1 Conditions Precedent to the Facility

The obligation of the Lender to make the Facility available is conditional on the satisfaction of
the conditions precedent described in Schedule 2 (Conditions Precedent to the Facility). If such
conditions precedent are not satisfied within 2 Business Days of the date hereof this Facility
Agreement shall terminate without liability to either party.

3.2 Advance

Subject to clause 3.1, the Lender agrees to advance to the Borrower the sum of £200,000 which shall
be remitted to the Borrower’s Account within 2 Business Days of the date hereof or the date on
which the final condition precedent is satisfied, whichever is the later.

3.3 Condition Subsequent to the Facility

 

EXECUTION VERSION

The Borrower shall deliver to the Lender as soon as reasonably practicable and in any event within
21 days of the date hereof share certificates in respect of the Borrower’s shareholding in
Holdings, Holdings’ shareholding in UK and Holdings’ shareholding in Australia and all other
documents reasonably required by the Lender in respect of those shares.

4 REPAYMENT, PREPAYMENT AND CANCELLATION

4.1 Repayment

	(a)	 	Subject always to clause 11.1 (Consequences of an Event of Default), the Borrower will repay
the outstanding Loan together with all other amounts payable under or pursuant to this
Facility Agreement on the Repayment Date.
	 
	(b)	 	Any amount repaid under this clause 4.1 may not be re-borrowed.

4.2 Prepayment

	(a)	 	Without prejudice to the obligation to make payment pursuant to clause 4.1, the Borrower may
in its sole discretion prepay the whole or any part of the outstanding Loan together with all
other amounts payable under or pursuant to this Facility Agreement at any time prior to the
Repayment Date.
	 
	(b)	 	Any amount prepaid pursuant to clause 4.2 may not be re-borrowed.

5 INTEREST

5.1 Interest shall accrue on a daily basis on the balance of the Loan from time to time outstanding
at a rate of 8 per cent. per annum on the basis of the number of days accrued on the assumption of
a 365 day year.

5.2 In the event that any outstanding Loan amount is not repaid on the date required pursuant to
this Facility Agreement nor, if applicable, within the cure period set out in clause 11.2(a) for
such payment, then the rate of interest accruing thereon pursuant to in clause 5.1 shall be
increased to 12 per cent. per annum in respect of the period thereafter until the date such
outstanding Loan amount is so repaid in full.

5.3 Interest shall not be compounded.

6 TAXES AND OTHER DEDUCTIONS

6.1 All payments by the Borrower to the Lender under this Facility Agreement shall be without
deduction or withholding (including, without limitation, any deduction or withholding of Tax)
unless the Borrower is required by law to make a payment subject to such deduction or withholding,
in which case the amount payable by the Borrower will be sufficiently increased to ensure that the
Lender receives and (after such deduction or withholding) is left with a net sum equal to that
which it would have received if no such deduction or withholding had been required.

 

EXECUTION VERSION

7 FEES AND EXPENSES

7.1 Each of the parties shall be responsible for its respective legal and other costs incurred in
relation to the negotiation, preparation and completion of this Facility Agreement and the other
Finance Documents.

7.2 The Borrower shall bear the reasonable cost of any transfer of funds required to be made under
the terms of this Facility Agreement, which costs shall be added to, and shall subsequently form
part of, the Loan.

8 PAYMENTS

8.1 Payment mechanics

All payments to the Lender under this Facility Agreement shall be made in Sterling, and in
immediately available funds into the account of the Lender as detailed in Schedule 1.

8.2 No set-off

All payments to be made to the Lender under this Facility Agreement shall be calculated and made
without (and free and clear of any deduction for) set off or counterclaim.

9 REPRESENTATIONS

The Borrower represents to the Lender that all the matters described in this clause 9 are true on
the date of this Facility Agreement, by reference to the facts and circumstances then existing:

9.1 The Borrower is duly incorporated and validly existing under the laws of England and Wales and
has full power to own its assets and carry on business as it is now being conducted.

9.2 The Borrower has the power to execute the Finance Documents and to exercise its Rights and
perform its Duties under the Finance Documents.

9.3 The Finance Documents to which the Borrower is a party constitute (or will, when executed,
constitute) legally valid, binding and enforceable obligations of the Borrower enforceable against
the Borrower in accordance with their respective terms.

9.4 The execution of the Finance Documents and the exercise of its Rights and the performance of
its Duties under the Finance Documents have been duly authorised by all necessary actions of the
Borrower and:

	(a)	 	do not and will not violate any provision of any law, decree, rule or regulation or of any
order, judgment, injunction, determination or award of any court or any judicial,
administrative or governmental authority or organisation having applicability to the Borrower;
	 
	(b)	 	do not and will not violate any provision of the Memorandum or Articles of Association of the
Borrower; and

 

EXECUTION VERSION

	(c)	 	do not and will not violate any provision of any deed, agreement or other instrument to which
the Borrower is a party or which is binding upon it or its assets.

9.5 No judgment has been given in legal proceedings and no arbitral or administrative award has
been given which has materially adversely affected the business, assets or financial condition of
the Borrower or any of its Subsidiaries and no litigation or administrative or arbitration
proceeding before or of any court, tribunal, arbitrator or any other relevant authority is
presently in process, pending or (to the knowledge of the Borrower) threatened which might
materially and adversely affect the business, assets or financial condition of the Borrower or any
of its Subsidiaries (save for threats made in relation to the proposed commencement of proceedings
in relation to the non-payment of sums payable by Group Companies in the ordinary course of
business).

9.6 There is not in existence nor (to the knowledge of the Borrower) likely to occur any dispute
with any governmental or other authority or any other dispute of any kind (other than as may
concern the non-payment of sums payable by Group Companies in the ordinary course of business)
which in any such case affects the Borrower or any of its Subsidiaries and which might materially
and adversely affect their business, assets or financial condition.

9.7 Neither the Borrower nor any of its Subsidiaries is in default under any law, decree, rule or
regulation nor under any order, judgment, injunction, determination or award of any court or any
judicial, administrative or governmental authority or organisation having applicability to them nor
under any deed, agreement or other instrument where such default is likely to materially and
adversely affect the business, assets or financial condition of the Borrower or any of its
Subsidiaries (other than as may concern the non-payment of sums payable by Group Companies in the
ordinary course of business).

9.8 No Default has occurred and is continuing.

10 UNDERTAKINGS

10.1 Negative Undertakings

So long as the Loan or any interest on it remains outstanding the Borrower will not, and will
procure that no other Group Company will, without the prior written consent of the Lender:

	(a)	 	pay, make or declare any dividend or other distribution or redeem or retire any of its shares
or issue any shares (or any interest therein);
	 
	(b)	 	incur or have outstanding any Borrowings, other than Permitted Borrowings;
	 
	(c)	 	make any loan other than a Permitted Loan;
	 
	(d)	 	directly or indirectly (whether by way of personal obligation or otherwise) give or permit to
subsist any guarantee, indemnity or other assurance against loss or become or remain liable
(contingently or otherwise) for any present or future indebtedness or liability of any other
person (other than a Group Company);
	 
	(e)	 	make any material change to the nature of its business as carried on at the date of this
Facility Agreement or enter into any new business;

 

EXECUTION VERSION

	(f)	 	(other than in the normal and proper course of business) sell, transfer, lease, license, lend
or otherwise dispose of the whole or any substantial part of its properties, assets or
revenues, whether by one transaction or a series of transactions (related or not);
	 
	(g)	 	create or allow to exist any Security Interest over its present or future properties, assets
or revenues, other than Permitted Security Interests;
	 
	(h)	 	sell, transfer, leave, lend or otherwise dispose of the whole or any substantial part of its
properties, assets or revenues, whether by one transaction or a series of transactions
(related or not) other than Permitted Disposals; or
	 
	(i)	 	acquire a company or any shares or securities or a business or undertaking, enter into any
joint venture or incorporate a company or other entity.

11 DEFAULT

11.1 Consequences of an Event of Default

If an Event of Default has occurred, the Lender may at any time, by giving written notice to the
Borrower:

	(a)	 	terminate the Facility; and/or
	 
	(b)	 	demand repayment of all or any part of the Loan and payment of any other amounts accrued
under this Facility Agreement (upon which such amounts will be immediately due and repayable);
and/or
	 
	(c)	 	declare that all or any part of the Loan and any other amounts accrued under this Facility
Agreement are payable on demand by the Lender at any time; and/or
	 
	(d)	 	exercise any or all of its rights, remedies, powers or discretions under the Share Mortgage
Deeds or the Assignment of contract in accordance with the provisions thereof.

11.2 Events of Default

Each of the matters listed in this clause 11.2 is an Event of Default.

	(a)	 	The Borrower fails to repay on the due date any amount payable by it pursuant to this
Facility Agreement unless its failure to make such payment is caused by an administrative or
technical error and payment is made within 3 Business Days of the due date.
	 
	(b)	 	The Borrower repudiates, disaffirms, disclaims or challenges the validity of any Finance
Document.
	 
	(c)	 	Any representation or statement made or deemed to be made by a Borrower in connection with a
Finance Document or any related document is incorrect or misleading in a material respect.
	 
	(d)	 	The Borrower or any Group Company breaches any provision of any Finance Document to which it
is a party (but, if the Lender considers that the breach is capable

 

EXECUTION VERSION

	 	 	of remedy, there will not
be an Event of Default if the Borrower or that other Group Company takes such action as is
required by the Lender to rectify the breach within such period, not being less than 5
Business Days, as the Lender stipulates).
	 
	(e)	 	A meeting of the Borrower or any other Group Company is convened for the purpose of
considering any resolution for (or to petition for) its winding-up or its administration or
any such resolution is passed, or any person presents a petition for the winding-up or
application for the administration of the Borrower or any other Group Company or any order for
the winding-up or administration of the Borrower or any other Group Company is made or any
other step (including petition, application,
proposal or convening a meeting) is taken with a view to the rehabilitation,
administration, custodianship, liquidation, winding-up or dissolution of, or any other
insolvency or moratorium proceedings involving, the Borrower or any other Group Company.
	 
	(f)	 	Any liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver,
administrative receiver, administrator or similar officer is appointed in respect of the
Borrower or any other Group Company or any part of the assets of any of them or the directors
of the Borrower or any other Group Company request the appointment of a liquidator, trustee in
bankruptcy, judicial custodian, compulsory manager, receiver, administrative receiver,
administrator or similar officer or any other steps are taken to enforce any Security Interest
over any assets of the Borrower or any other Group Company.
	 
	(g)	 	A creditor or encumbrancer takes possession of, or a distress, execution, sequestration or
other process is levied or enforced upon or sued out against, any material part of the
undertaking, assets, properties, rights or revenues of the Borrower or any Group Company and
such attachment or process is not discharged within seven days.
	 
	(h)	 	The Borrower or any other Group Company suspends payment of all (or substantially all) of its
debts or declares itself (or is held by a court of competent jurisdiction) to be unable to pay
its debts as they fall due (within the meaning of section 123 of the Insolvency Act 1986).
	 
	(i)	 	The Borrower or any other Group Company commences negotiations with all or any class of its
creditors with a view to the general readjustment or rescheduling of all or any class of its
indebtedness or proposed to enter, or enters, into any assignment, composition or other
arrangement for the benefit of its creditors generally or any class of its creditors.
	 
	(j)	 	Any event in relation to the Borrower or any other Group Company in any jurisdiction other
than England, which has an effect equivalent or similar to any of the events mentioned in
Clauses 11.2(e) to (i).
	 
	(k)	 	A Competing Proposal is publicly announced and recommended by the Borrower.

11.3 The Borrower will inform the Lender in writing of any matter which gives rise to any Default
immediately, and in every case within 3 Business Days of the Borrower becoming aware of the same.

 

EXECUTION VERSION

12 MISCELLANEOUS

12.1 Transfer

Neither the Borrower nor the Lender may transfer (either by assignment or by novation) any of its
Rights or Duties under this Facility Agreement, save that the Lender may transfer (either by
assignment or by novation) any of its Rights and/or Duties under this Facility
Agreement to an affiliate of the Lender or, whilst an Event of Default is continuing, to any third
party.

12.2 Rights

	(a)	 	The Rights of the Lender against the Borrower under this Facility Agreement are cumulative.
They do not limit any Rights of the Lender against the Borrower existing under the general
law.
	 
	(b)	 	No failure by the Lender to exercise any Right under this Facility Agreement will operate as
a waiver of that Right. Nor will a single or partial exercise of a Right by the Lender
preclude its further exercise.
	 
	(c)	 	No delay or omission by the Lender in exercising any right, power or remedy provided by law
or under this Facility Agreement shall affect that right, power or remedy, or operate as a
waiver of it.

12.3 Notices

	(a)	 	Any notice or other communication to a party to this Facility Agreement must be in writing.
It must be addressed for the attention of such person, and shall be delivered personally or
sent by international signed-for airmail or facsimile to such address or fax number as that
party may from time to time notify to the other parties.
	 
	(b)	 	Proof of posting or despatch of any notice or communication shall be deemed to be proof of
receipt:

	 	(i)	 	in the case of airmail, five Business Days after having been posted;
	 
	 	(ii)	 	in the case of a facsimile, at the time of transmission provided that if
deemed receipt (but for this proviso) would have occurred before 9 a.m. on a Business
Day the notice shall be deemed to have been received at 9 a.m. on that day, and if
deemed receipt (but for this proviso) would have occurred after 5 p.m. on a Business
Day, or a day which is not a Business Day, the notice shall be deemed to have been
received at 9 a.m. on the next Business Day.

	 	 	For the purpose of this Clause (b), “Business Day” means any day which is not a Saturday,
Sunday or a public holiday in the place at or to which the notice is sent.
	 
	(c)	 	The administrative details of the parties are contained in Schedule 1 (Initial administrative
details of the parties), but a party may amend its own details at any time on the provision of
5 Business Days prior written notice to the other parties.

 

EXECUTION VERSION

12.4 Partial invalidity

If, at any time, any provision of this Facility Agreement is or becomes illegal, invalid or
unenforceable in any respect under any law of any jurisdiction, neither the legality, validity
or enforceability of the remaining provisions nor the legality, validity or enforceability of such
provision in any other respect or under the law of any other jurisdiction will be affected or
impaired in any way.

12.5 Variations

No variations of this Facility Agreement shall be considered as valid and as constituting part of
this Facility Agreement unless such variation shall have been made in writing and signed by the
parties hereto. The expression “variation” shall include any variation, amendment, supplement,
deletion or replacement, however effected.

13 LAW AND JURISDICTION

13.1 Law

This Facility Agreement is governed by, and shall be construed in accordance with, English law.

13.2 Jurisdiction

	(a)	 	The Borrower and the Lender irrevocably agrees that the courts of England have exclusive
jurisdiction and accordingly submit to the jurisdiction of the courts of England in relation
to any matter arising in connection with this Facility Agreement (including regarding its
existence). The submission to the English Courts shall not (and shall not be constituted so
as to) limited the right of the Lender to take proceedings against the Borrower in any other
Court of competent jurisdiction nor should the taking of proceedings in any one jurisdiction
preclude the taking of proceedings in any other jurisdiction, concurrently or not.

THIS FACILITY AGREEMENT has been entered into on the date stated at the beginning of this Facility
Agreement.

 

EXECUTION VERSION

EXECUTION PAGE

	 	 	 	 	 
	THE BORROWER
	 	 	 	 
	 
	 	 	 	 
	Executed by

	 	 	)	 
	STEM CELL SCIENCES PLC

	 	 	)	 

	 	 	 
	/s/ Alastair Riddell

	 	Signature of director
	 

	 	 
	 
	 	 
	Alastair Riddell

	 	Name of director
	 

	 	 

THE LENDER

	 	 	 	 	 
	Executed as a deed by

	 	 	)	 
	STEMCELLS, INC.

	 	 	)	 

	 	 	 
	/s/ Martin McGlynn

	 	Signature of authorised signatory
	 

	 	 
	 
	 	 
	Martin McGlynn

	 	Name of authorised signatoryexv10w27

Exhibit
10.27

Dated 1 March 2009

Between

STEMCELLS, INC.

as Lender

and

STEM CELL SCIENCES PLC

as Borrower

and

STEM CELL SCIENCES HOLDINGS LIMITED

as Guarantor

 

SECOND FACILITY AGREEMENT

 

 

 

THIS FACILITY AGREEMENT is dated 1 March 2009 and is made between

PARTIES:

	(1)	 	STEMCELLS, INC., whose address is 3155 Porter Drive, Palo Alto, California 94304-1213, United
States of America (the “Lender”);
	 
	(2)	 	STEM CELL SCIENCES PLC, whose address is Meditrina Building 260, Babraham Research, Campus,
Cambridge CB22 3AT, United Kingdom (the “Borrower”); and
	 
	(3)	 	STEM CELL SCIENCES HOLDINGS LIMITED, whose address is KPMG LLP, Saltire Court, 20 Castle
Terrace, Edinburgh, Lothian, EH1 2EG, United Kingdom (the “Guarantor”).

WHEREAS:

	(A)	 	The share capital of the Borrower is listed on the AIM market of the London Stock Exchange
plc.
	 
	(B)	 	The Lender and the Borrower have entered into an asset purchase agreement (the “Asset
Purchase Agreement”), to be dated on or around the date of this Second Facility Agreement
pursuant to which it is intended that the Lender will acquire certain assets from the
Borrower.
	 
	(C)	 	The Lender has advanced the sum of £200,000 to the Borrower for use as working capital
pursuant to the Facility Agreement.
	 
	(D)	 	The Borrower requires further working capital to maintain its current operations prior to
completion of all the steps envisaged under the Asset Purchase Agreement.
	 
	(E)	 	The Borrower and the Guarantor have granted security to the Lender pursuant to the Share
Mortgage Deeds and the Assignment of Contract.

1 INTERPRETATION

1.1 Definitions

In this Second Facility Agreement, the following terms have the meanings given to them in this
clause 1.1, except where the context otherwise requires.

“Advance” means a loan made or to be made under the Facility or, where the context requires, the
principal amount of that loan outstanding.

“Assignment of Contract” means the assignment of contract dated 23 December 2008, pursuant to which
the Borrower has assigned the benefit of an intra-group loan agreement to the Lender by way of
security.

 

 

“Availability Period” means the period beginning on the date of this Agreement and ending on the
earlier of: (i) termination of the Asset Purchase Agreement in accordance with its terms; and (ii)
10 June 2009.

“Available Facility” means the principal sum of $415,000 (to the extent not cancelled or reduced in
accordance with the terms of this Agreement from time to time) minus, in relation to any proposed
Advance, the aggregate principal amount of any Advances already made by the Lender to the Borrower
under this Second Facility Agreement.

“Borrower’s Account” means the bank account of the Borrower, details of which are as follows:

	 	 	 	 	 
	 
	 	Account name:	 	Stem Cell Sciences PLC
	 
	 	Bank:	 	HSBC plc
	 
	 	Account number:	 	60026313
	 
	 	Sort code:	 	40-05-15
	 
	 	IBAN:	 	GB 80 MIDL 40051560026313
	 
	 	BIC:	 	MIDLGB22

“Borrowings” means amounts borrowed or raised under any transaction having the commercial effect of
a borrowing or raising of finance.

“Business Day” means a day (other than Saturday or Sunday) on which banks are open for general
business in London and San Francisco.

“Default” means: (a) any Event of Default; or (b) any event or circumstance which is reasonably
likely to constitute an event of Default subject only to the giving of any notice, the expiry of
any applicable period, the making of any specified determination or the fulfillment of any
specified condition.

“Drawdown Date” means, in relation to an Advance, the date falling within the applicable
Availability Period, being a Business Day, on which it is, or is to be, drawn down.

“Drawdown Notice” means a notice substantially in the form of Schedule 3 (Form of Drawdown Notice),
and otherwise in form and substance satisfactory to the Lender, duly completed by the Borrower.

“Duty” means any duty, obligation or liability of any kind.

“Event of Default” means any event or circumstance specified as such in clause 11.2 (Events of
Default).

“Exclusivity Letter” means the exclusivity letter dated 23 December 2008, as amended, pursuant to
which the Borrower has given certain undertakings and assurances to the Lender in connection with
their entering into discussions concerning the Proposal (as defined therein).

“Facility” means the loan facility provided under this Second Facility Agreement as described in
clause 2 (The Facility).

 

 

“Facility Agreement” means the facility agreement dated 23 December 2008 made between the Borrower
and the Lender.

“Finance Documents” means this Second Facility Agreement, the Facility Agreement, the Guarantee,
the Share Mortgage Deeds, the Assignment of Contract, the Negative Pledge Letter and the
Exclusivity Letter.

“Group” means the Borrower and its Subsidiaries from time to time; and “Group Company” means any of
them.

“Guarantee” means the all-monies guarantee dated 23 December 2008, pursuant to which the Guarantor
has guaranteed any obligations of the Borrower to the Lender.

“Loan” means, at any time, the aggregate principal amount outstanding under this Second Facility
Agreement.

“Negative Pledge Letter” means the letter from SCS UK to the Lender dated 23 December 2008
confirming, inter alia, that SCS UK will not grant security over its assets to any party without
the Lender’s prior written consent.

“Permitted Borrowings” means:

	(a)	 	Borrowings outstanding in the normal and prudent course of the trading activities of the
Group and which have not been overdue for more than 60 days; and
	 
	(b)	 	Borrowings by Group Companies from other Group Companies, provided that (i) such Borrowings
already exist as at the date of this Second Facility Agreement, or (ii) are necessary in order
to remit sums borrowed under this Second Facility Agreement, or subsequent Permitted
Borrowings from non-Group entities, to other Group Companies; and
	 
	(c)	 	Borrowings by the Borrower from non-Group entities by way of additional finance, provided
that such Borrowings are subordinated to any monies owed by the Borrower to the Lender (being
either unsecured or, if secured, then subordinated in a manner satisfactory to the Lender (in
which respect the Lender’s discretion shall be absolute)); and
	 
	(d)	 	any Borrowings arising under the Finance Documents or otherwise in favour of the Lender or
any transferee or assignee of, or any refinancing of such Borrowings.

“Permitted Disposal” means any sale, lease, licence, transfer or other disposal on arm’s length
terms:

	(a)	 	of trading stock or cash made in the ordinary course of trading of the disposing entity;
	 
	(b)	 	of obsolete or redundant vehicles, plant and equipment for cash; or
	 
	(c)	 	arising as a result of any Permitted Security Interest.

 

 

“Permitted Loan” means:

	(a)	 	any trade credit extended by any Group Company to its customers on normal commercial terms
and in the ordinary course of trading and which are not outstanding for more than 60 days; and
	 
	(b)	 	loans outstanding between Group Companies (to the extent that these are consistent with the
definition of Permitted Borrowings).

“Permitted Security Interests” means:

	(a)	 	liens arising by operation of law in the ordinary course of Group Companies’ trading;
	 
	(b)	 	retention of title claims arising over goods or equipment purchased by Group Companies in the
ordinary course of their trading; and
	 
	(c)	 	Security Interests granted to the Lender pursuant to the Finance Documents.

“Regulation” means any present or future law, regulation, rule, request, requirement or guideline
of any authority, whether or not it has the force of law (but, if it does not, with which the
person concerned habitually complies or should habitually comply).

“Repayment Date” means 23 June 2009.

“Right” means any right, privilege, power, immunity or other interest or remedy of any kind.

“SCS Australia” means Stem Cell Sciences (Australia) Pty Ltd.

“SCS UK” means Stem Cell Sciences UK Limited.

“Security Interest” means any mortgage, standard security, charge (whether fixed or floating),
assignment by way of security, hypothecation, pledge, lien or other security arrangement of any
kind.

“Share Mortgage Deeds” means:

	(a)	 	the share mortgage deed dated 23 December 2008, pursuant to which the Borrower has granted a
charge over shares held by it in the Guarantor;
	 
	(b)	 	the share mortgage deed dated 23 December 2008, pursuant to which the Guarantor has granted a
charge over shares held by it in SCS UK; and
	 
	(c)	 	the share mortgage deed dated 23 December 2008, pursuant to which the Guarantor has granted a
charge over shares held by it in SCS Australia.

“Subsidiary” means a subsidiary undertaking within the meaning of section 1162 of, and Schedule 7
to, the Companies Act 2006.

“Tax” means any tax, levy, impost, duty or other charge or withholding of a similar nature
(including any penalty or interest payable in connection with any failure to pay or any delay in
paying any of the same).

 

 

“US$” or “US Dollars” means the lawful currency of the United States of America.

	1.2	 	In this Second Facility Agreement:
	 
	(a)	 	the summary and the headings are inserted for convenience only and do not affect the
interpretation of this Second Facility Agreement;
	 
	(b)	 	references to clauses and schedules are to clauses of, and schedules to, this Second Facility
Agreement;
	 
	(c)	 	references to this Second Facility Agreement, a Finance Document or any other document are to
this Second Facility Agreement, that Finance Document or that other document as from time to
time amended, restated, novated, or replaced, however fundamentally;
	 
	(d)	 	references to a person include an individual, firm, company, corporation, unincorporated body
of persons and any government entity;
	 
	(e)	 	references to a person include its successors in title, permitted assignees and permitted
transferees;
	 
	(f)	 	words importing the plural include the singular and vice versa;
	 
	(g)	 	references to a time of day are to London time, using the 24 hour clock;
	 
	(h)	 	references to any enactment include that enactment as re enacted; and, if an enactment is
amended, any provision of this Second Facility Agreement which refers to that enactment will
be amended in such manner as the Lender, after consultation with the Borrower, determines to
be necessary in order to preserve the intended effect of this Second Facility Agreement;
	 
	(i)	 	a Default (other than an Event of Default) is “continuing” if it has not been remedied or
waived and an Event of Default is “continuing” if it has not been waived; and
	 
	(j)	 	if the due date for any payment under this Second Facility Agreement falls on a day which is
not a Business Day, the due date shall be extended to the next Business Day.

1.3 This Second Facility Agreement may be executed in any number of counterparts and by the
different parties on separate counterparts, each of which may be delivered by facsimile or by PDF
and each of which when so executed and delivered shall be an original, but all counterparts shall
together constitute one and the same instrument.

1.4 A person who is not a party to this Second Facility Agreement has no right under the Contracts
(Rights of Third Parties) Act 1999 to enforce or enjoy the benefit of any term of this Second
Facility Agreement.

2 THE FACILITY

2.1 Subject to the terms of this Agreement, the Lender makes available to the Borrower a loan
facility in an aggregate amount not exceeding the Available Facility.

 

 

2.2 The Borrower shall immediately use and apply any Advance made by the Lender exclusively for the
purposes specified in the Drawdown Notice relating to that Advance.

2.3 The Lender is not bound to monitor or verify the application of any amount borrowed under or
pursuant to this Second Facility Agreement.

3 ADVANCES

3.1 Conditions Precedent

The availability of the Facility is conditional on the satisfaction of the conditions precedent
described in Schedule 2 (Conditions Precedent). If such conditions precedent are not satisfied
within 2 Business Days of the date hereof this Second Facility Agreement shall terminate without
liability to either party.

3.2 Advances under the Facility

	(a)	 	If the Borrower wishes to draw an Advance (in addition to the Initial Advance), it may
deliver an irrevocable Drawdown Notice during the Availability Period to the Lender. Such
Drawdown Notice must be delivered by 16:00 at least 3 Business Days before the intended
Drawdown Date or such shorter period as the Lender may agree and:

	 	(i)	 	specify the amount of the Advance proposed to be drawn down (which may not
exceed the Available Facility);
	 
	 	(ii)	 	specify the proposed Drawdown Date;
	 
	 	(iii)	 	if the Drawdown Date is prior to Completion, provide a reasonably detailed
schedule of the proposed working capital costs and expenses of the Borrower;
	 
	 	(iv)	 	provide a reasonably detailed description of the purpose for which it is
intended that the Advance be utilised; and
	 
	 	(v)	 	confirm that, so far as the Borrower is aware, no Default has occurred and is
continuing or, in the reasonable and honest belief of the Borrower, will result from
the making of the Advance.

	(b)	 	Amounts Advanced by the Lender to the Borrower shall be used by the Borrower solely for the
bona fide working capital purposes of the Borrower and its subsidiaries, for paying the
Seller’s Transaction Expenses (as defined in the Asset Purchase Agreement) and/or bona fide
expenses incurred by the Seller after the Completion Date (as defined in the Asset Purchase
Agreement) in connection with the non-trading administrative operations and/or proposed
winding-up of the Seller (together the “Specified Purposes”).
	 
	(c)	 	The Lender shall make a proposed Advance available to the Borrower on the Drawdown Date
provided that: (i) no Default then exists; and (ii) the purpose(s) for which it is intended
that the Advance will be utilised (as stated in the Drawdown Notice) are Specified Purposes.

 

 

	(d)	 	Each Advance shall be remitted to the Borrower’s Account on the proposed Drawdown Date.
	 
	(e)	 	Each Advance will:

	 	(i)	 	be in US Dollars; and
	 
	 	(ii)	 	once made, will consolidate and form part of the Loan.

3.3 Availability Period

An Advance will only be made during the Availability Period.

4 REPAYMENT, PREPAYMENT AND CANCELLATION

4.1 Repayment

	(a)	 	Subject always to clause 11.1 (Consequences of an Event of Default), the Borrower will repay
the outstanding Loan together with all other amounts payable under or pursuant to this Second
Facility Agreement on the Repayment Date.
	 
	(b)	 	Any amount repaid under this clause 4.1 may not be re-borrowed.

4.2 Prepayment

	(a)	 	Without prejudice to the obligation to make payment pursuant to clause 4.1, the Borrower may
in its sole discretion prepay the whole or any part of the outstanding Loan together with all
other amounts payable under or pursuant to this Second Facility Agreement at any time prior to
the Repayment Date.
	 
	(b)	 	Any amount prepaid pursuant to this clause 4.2 may not be re-borrowed.

5 INTEREST

5.1 Interest shall accrue on a daily basis on the balance of the Loan from time to time outstanding
at a rate of 8 per cent. per annum on the basis of the number of days accrued on the assumption of
a 365 day year.

5.2 In the event that any outstanding Loan amount is not repaid on the date required pursuant to
this Second Facility Agreement nor, if applicable, within the cure period set out in clause 11.2(a)
for such payment, then the rate of interest accruing thereon pursuant to in clause 5.1 shall be
increased to 12 per cent. per annum in respect of the period thereafter until the date such
outstanding Loan amount is so repaid in full.

5.3 Interest shall not be compounded.

6 TAXES AND OTHER DEDUCTIONS

6.1 All payments by the Borrower to the Lender under this Second Facility Agreement shall be
without deduction or withholding (including, without limitation, any deduction or withholding of
Tax) unless the Borrower is required by law to make a payment subject to such deduction or
withholding, in which case the amount payable by the Borrower will be

 

 

sufficiently increased to ensure that the Lender receives and (after such deduction or withholding)
is left with a net sum equal to that which it would have received if no such deduction or
withholding had been required.

7 FEES AND EXPENSES

7.1 Each of the parties shall be responsible for its respective legal and other costs incurred in
relation to the negotiation, preparation and completion of this Second Facility Agreement and the
other Finance Documents.

7.2 The Borrower shall bear the reasonable cost of any transfer of funds required to be made under
the terms of this Second Facility Agreement, which costs shall be added to, and shall subsequently
form part of, the Loan.

8 PAYMENTS

8.1 Payment mechanics

All payments to the Lender under this Second Facility Agreement shall be made in US Dollars, and in
immediately available funds into the account of the Lender as detailed in Schedule 1 (Initial
administrative details of the parties).

8.2 No set-off

All payments to be made to the Lender under this Second Facility Agreement shall be calculated and
made without (and free and clear of any deduction for) set off or counterclaim.

9 REPRESENTATIONS

The Borrower represents to the Lender that all the matters described in this clause 9 are true on
the date of this Second Facility Agreement, by reference to the facts and circumstances then
existing:

9.1 The Borrower is duly incorporated and validly existing under the laws of England and Wales and
has full power to own its assets and carry on business as it is now being conducted.

9.2 The Borrower has the power to execute the Finance Documents and to exercise its Rights and
perform its Duties under the Finance Documents.

9.3 The Finance Documents to which the Borrower is a party constitute (or will, when executed,
constitute) legally valid, binding and enforceable obligations of the Borrower enforceable against
the Borrower in accordance with their respective terms.

9.4 The execution of the Finance Documents and the exercise of its Rights and the performance of
its Duties under the Finance Documents have been duly authorised by all necessary actions of the
Borrower and:

	(a)	 	do not and will not violate any provision of any law, decree, rule or regulation or of any
order, judgment, injunction, determination or award of any court or any judicial,
administrative or governmental authority or organisation having applicability to the Borrower;

 

 

	(b)	 	do not and will not violate any provision of the Memorandum or Articles of Association of the
Borrower; and
	 
	(c)	 	do not and will not violate any provision of any deed, agreement or other instrument to which
the Borrower is a party or which is binding upon it or its assets.

9.5 No judgment has been given in legal proceedings and no arbitral or administrative award has
been given which has materially adversely affected the business, assets or financial condition of
the Borrower or any of its Subsidiaries and no litigation or administrative or arbitration
proceeding before or of any court, tribunal, arbitrator or any other relevant authority is
presently in process, pending or (to the knowledge of the Borrower) threatened which might
materially and adversely affect the business, assets or financial condition of the Borrower or any
of its Subsidiaries (save for threats made in relation to the proposed commencement of proceedings
in relation to the non-payment of sums payable by Group Companies in the ordinary course of
business).

9.6 There is not in existence nor (to the knowledge of the Borrower) likely to occur any dispute
with any governmental or other authority or any other dispute of any kind (other than as may
concern the non-payment of sums payable by Group Companies in the ordinary course of business)
which in any such case affects the Borrower or any of its Subsidiaries and which might materially
and adversely affect their business, assets or financial condition.

9.7 Neither the Borrower nor any of its Subsidiaries is in default under any law, decree, rule or
regulation nor under any order, judgment, injunction, determination or award of any court or any
judicial, administrative or governmental authority or organisation having applicability to them nor
under any deed, agreement or other instrument where such default is likely to materially and
adversely affect the business, assets or financial condition of the Borrower or any of its
Subsidiaries (other than as may concern the non-payment of sums payable by Group Companies in the
ordinary course of business).

9.8 No Default has occurred and is continuing.

10 UNDERTAKINGS

10.1 Negative Undertakings

So long as the Loan or any interest on it remains outstanding the Borrower will not, and will
procure that no other Group Company will, without the prior written consent of the Lender:

	(a)	 	pay, make or declare any dividend or other distribution or redeem or retire any of its shares
or issue any shares (or any interest therein);
	 
	(b)	 	incur or have outstanding any Borrowings, other than Permitted Borrowings;
	 
	(c)	 	make any loan other than a Permitted Loan;
	 
	(d)	 	directly or indirectly (whether by way of personal obligation or otherwise) give or permit to
subsist any guarantee, indemnity or other assurance against loss or become or remain liable
(contingently or otherwise) for any present or future indebtedness or liability of any other
person (other than a Group Company);

 

 

	(e)	 	make any material change to the nature of its business as carried on at the date of this
Second Facility Agreement or enter into any new business;
	 
	(f)	 	(other than in the normal and proper course of business) sell, transfer, lease, license, lend
or otherwise dispose of the whole or any substantial part of its properties, assets or
revenues, whether by one transaction or a series of transactions (related or not);
	 
	(g)	 	create or allow to exist any Security Interest over its present or future properties, assets
or revenues, other than Permitted Security Interests;
	 
	(h)	 	sell, transfer, leave, lend or otherwise dispose of the whole or any substantial part of its
properties, assets or revenues, whether by one transaction or a series of transactions
(related or not) other than Permitted Disposals; or
	 
	(i)	 	acquire a company or any shares or securities or a business or undertaking, enter into any
joint venture or incorporate a company or other entity.

11 DEFAULT

11.1 Consequences of an Event of Default

If an Event of Default has occurred, the Lender may at any time, by giving written notice to the
Borrower:

	(a)	 	terminate the Facility; and/or
	 
	(b)	 	demand repayment of all or any part of the Loan and payment of any other amounts accrued
under this Second Facility Agreement (upon which such amounts will be immediately due and
repayable); and/or
	 
	(c)	 	declare that all or any part of the Loan and any other amounts accrued under this Second
Facility Agreement are payable on demand by the Lender at any time; and/or
	 
	(d)	 	exercise any or all of its rights, remedies, powers or discretions under the Share Mortgage
Deeds or the Assignment of contract in accordance with the provisions thereof.

11.2 Events of Default

Each of the matters listed in this clause 11.2 is an Event of Default.

	(a)	 	The Borrower fails to repay on the due date any amount payable by it pursuant to either the
Facility Agreement or this Second Facility Agreement, unless its failure to make such payment
is caused by an administrative or technical error and payment is made within 3 Business Days
of the due date.
	 
	(b)	 	The Borrower repudiates, disaffirms, disclaims or challenges the validity of any Finance
Document.

 

 

	(c)	 	Any representation or statement made or deemed to be made by a Borrower in connection with a
Finance Document or any related document is incorrect or misleading in a material respect.
	 
	(d)	 	The Borrower or any Group Company breaches any provision of any Finance Document to which it
is a party (but, if the Lender considers that the breach is capable of remedy, there will not
be an Event of Default if the Borrower or that other Group Company takes such action as is
required by the Lender to rectify the breach within such period, not being less than 5
Business Days, as the Lender stipulates).
	 
	(e)	 	A meeting of the Borrower or any other Group Company is convened for the purpose of
considering any resolution for (or to petition for) its winding-up or its administration or
any such resolution is passed, or any person presents a petition for the winding-up or
application for the administration of the Borrower or any other Group Company or any order for
the winding-up or administration of the Borrower or any other Group Company is made or any
other step (including petition, application, proposal or convening a meeting) is taken with a
view to the rehabilitation, administration, custodianship, liquidation, winding-up or
dissolution of, or any other insolvency or moratorium proceedings involving, the Borrower or
any other Group Company.
	 
	(f)	 	Any liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver,
administrative receiver, administrator or similar officer is appointed in respect of the
Borrower or any other Group Company or any part of the assets of any of them or the directors
of the Borrower or any other Group Company request the appointment of a liquidator, trustee in
bankruptcy, judicial custodian, compulsory manager, receiver, administrative receiver,
administrator or similar officer or any other steps are taken to enforce any Security Interest
over any assets of the Borrower or any other Group Company.
	 
	(g)	 	A creditor or encumbrancer takes possession of, or a distress, execution, sequestration or
other process is levied or enforced upon or sued out against, any material part of the
undertaking, assets, properties, rights or revenues of the Borrower or any Group Company and
such attachment or process is not discharged within seven days.
	 
	(h)	 	The Borrower or any other Group Company suspends payment of all (or substantially all) of its
debts or declares itself (or is held by a court of competent jurisdiction) to be unable to pay
its debts as they fall due (within the meaning of section 123 of the Insolvency Act 1986).
	 
	(i)	 	The Borrower or any other Group Company commences negotiations with all or any class of its
creditors with a view to the general readjustment or rescheduling of all or any class of its
indebtedness or proposed to enter, or enters, into any assignment, composition or other
arrangement for the benefit of its creditors generally or any class of its creditors.
	 
	(j)	 	Any event in relation to the Borrower or any other Group Company in any jurisdiction other
than England, which has an effect equivalent or similar to any of the events mentioned in
clauses 11.2(e) to (i) (inclusive).

 

 

	(k)	 	The Lender terminates the Asset Purchase Agreement in accordance with clause 10.1(e) of that
agreement.

11.3 The Borrower will inform the Lender in writing of any matter which gives rise to any Default
immediately, and in every case within 3 Business Days of the Borrower becoming aware of the same.

12 GUARANTEE AND SECURITY

12.1 The Borrower acknowledges and confirms that clause 2 (Assignment) of the Assignment of
Contract will on and after the date of this Second Facility Agreement continue to secure all
present and future obligations and liabilities owed by the Borrower to the Lender, whether actual
or contingent, and whether owed jointly or severally, as principal or surety and/or in any other
capacity whatsoever, under or in connection with the Finance Documents including this Second
Facility Agreement.

12.2 The Guarantor acknowledges and confirms that on and after the date of this Second Facility
Agreement its obligations under clause 1 (Guarantee and Indemnity) of the Guarantee will continue
in full force and effect and will extend to and include all of the liabilities of the Borrower
under this Second Facility Agreement.

12.3 Each of the Borrower and the Guarantor acknowledges and confirms that each of the Share
Mortgage Deeds executed by them will (as applicable) on and after the date of this Second Facility
Agreement continue to secure all present and future obligations and liabilities owed by the
Borrower to the Lender, whether actual or contingent, and whether owed jointly or severally, as
principal or surety and/or in any other capacity whatsoever, under or in connection with the
Finance Documents including this Second Facility Agreement.

13 MISCELLANEOUS

13.1 Transfer

Neither the Borrower nor the Lender may transfer (either by assignment or by novation) any of its
Rights or Duties under this Second Facility Agreement, save that the Lender may transfer (either by
assignment or by novation) any of its Rights and/or Duties under this Second Facility Agreement to
an affiliate of the Lender or, whilst an Event of Default is continuing, to any third party.

13.2 Rights

	(a)	 	The Rights of the Lender against the Borrower under this Second Facility Agreement are
cumulative. They do not limit any Rights of the Lender against the Borrower existing under
the general law.
	 
	(b)	 	No failure by the Lender to exercise any Right under this Second Facility Agreement will
operate as a waiver of that Right. Nor will a single or partial exercise of a Right by the
Lender preclude its further exercise.
	 
	(c)	 	No delay or omission by the Lender in exercising any right, power or remedy provided by law
or under this Second Facility Agreement shall affect that right, power or remedy, or operate
as a waiver of it.

 

 

13.3 Notices

	(a)	 	Any notice or other communication to a party to this Second Facility Agreement must be in
writing. It must be addressed for the attention of such person, and shall be delivered
personally or sent by international signed-for airmail or facsimile to such address or fax
number as that party may from time to time notify to the other parties.
	 
	(b)	 	Proof of posting or despatch of any notice or communication shall be deemed to be proof of
receipt:

	 	(i)	 	in the case of airmail, five Business Days after having been posted;
	 
	 	(ii)	 	in the case of a facsimile, at the time of transmission provided that if deemed
receipt (but for this proviso) would have occurred before 9 a.m. on a Business Day the
notice shall be deemed to have been received at 9 a.m. on that day, and if deemed
receipt (but for this proviso) would have occurred after 5 p.m. on a Business Day, or a
day which is not a Business Day, the notice shall be deemed to have been received at
9:00 a.m. on the next Business Day.

For the purpose of this clause 13.3(b), “Business Day” means any day which is not a
Saturday, Sunday or a public holiday in the place at or to which the notice is sent.

	(c)	 	The administrative details of the parties are contained in Schedule 1 (Initial administrative
details of the parties), but a party may amend its own details at any time on the provision of
5 Business Days prior written notice to the other parties.

13.4 Partial invalidity

If, at any time, any provision of this Second Facility Agreement is or becomes illegal, invalid or
unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or
enforceability of the remaining provisions nor the legality, validity or enforceability of such
provision in any other respect or under the law of any other jurisdiction will be affected or
impaired in any way.

13.5 Variations

No variations of this Second Facility Agreement shall be considered as valid and as constituting
part of this Second Facility Agreement unless such variation shall have been made in writing and
signed by the parties hereto. The expression “variation” shall include any variation, amendment,
supplement, deletion or replacement, however effected.

14 LAW AND JURISDICTION

14.1 Law

This Second Facility Agreement is governed by, and shall be construed in accordance with, English
law.

 

 

14.2 Jurisdiction

The Borrower and the Lender irrevocably agrees that the courts of England have exclusive
jurisdiction and accordingly submit to the jurisdiction of the courts of England in relation to any
matter arising in connection with this Facility Agreement (including regarding its existence). The
submission to the English Courts shall not (and shall not be constituted so as to) limited the
right of the Lender to take proceedings against the Borrower in any other Court of competent
jurisdiction nor should the taking of proceedings in any one jurisdiction preclude the taking of
proceedings in any other jurisdiction, concurrently or not.

THIS SECOND FACILITY AGREEMENT has been entered into on the date stated at the beginning of this
Second Facility Agreement.

 

 

EXECUTION PAGE

	 	 	 	 	 
	THE LENDER
	 	 	 	 
	 
	 	 	 	 
	Executed as a deed by

	 	) 	 	 
	STEMCELLS, INC.

	 	)	 	 
	 
	 	 	 	 
	/s/ Alastair Riddell     Signature of authorised signatory
	 	 	 	 
	                                         
	 	 	 	 
	 
	 	 	 	 
	Alastair Riddell     Name of authorised signatory
	 	 	 	 
	                                         
	 	 	 	 
	 
	 	 	 	 
	 
	THE BORROWER
	 	 	 	 
	 
	 	 	 	 
	Executed for and on behalf of

	 	)	 	 
	STEM CELL SCIENCES PLC

	 	)	 	 
	 
	/s/ Martin McGlynn     Signature of director
	 	 	 	 
	                                        
	 	 	 	 
	 
	 	 	 	 
	Martin McGlynn     Name of director
	 	 	 	 
	                                        
	 	 	 	 
	 
	 	 	 	 
	 
	THE GUARANTOR
	 	 	 	 
	 
	 	 	 	 
	Executed for and on behalf of

	 	)	 	 
	STEM CELL SCIENCES HOLDINGS LIMTED)
	 	 	 	 
	 
	 	 	 	 
	/s/ Alastair Riddell     Signature of director
	 	 	 	 
	                                        
	 	 	 	 
	 
	 	 	 	 
	Alastair Riddell     Name of director

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00155-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00155-of-00352.parquet"}]]