Document:

exv10w58

Exhibit 10.58

 

Third Amendment to Credit Agreement

dated as of November 10, 2008

among

Asyst Technologies, Inc.,

Asyst Technologies Japan Holdings Company, Inc.,

and

Asyst Technologies Japan, Inc.

as Borrowers,

KeyBank National Association,

as Administrative Agent, Lender, Swing Line Lender and L/C Issuer

and

the Lenders Party hereto,

as Lenders

 

 

 

Third Amendment to Credit Agreement

     This Third Amendment to Credit Agreement (this “Amendment”) dated as of November 10,
2008 (the “Amendment Effective Date”) is entered into among Asyst Technologies, Inc., a
California corporation (the “Company” or “ATI”); Asyst Technologies Japan Holdings Company,
Inc., a Japanese corporation (formerly known as Asyst Japan, Inc., “AJH”); and Asyst
Technologies Japan, Inc., a Japanese corporation (formerly known as Asyst Shinko, Inc., “ATJ”;
and together with ATI and AJH being referred to hereafter collectively as the “Borrowers” and
individually each as a “Borrower”); KeyBank National Association (“Key”), as
Administrative Agent, Lender, Swing Line Lender and L/C Issuer (“Agent”) as provided herein,
Citibank, N.A. (“Citi”), as Syndication Agent and as Lender, Silicon Valley Bank
(“SVB”), as Documentation Agent and as Lender, and RBS Citizens NA (formerly known as
Citizens Bank NA), as Lender (“Citizens”, and together with Key, Citi and SVB, as Lenders, being
referred to collectively as the “Lenders” and individually each as a “Lender”) amends that certain
Credit Agreement dated as of July 27, 2007 (as previously amended, the “Credit Agreement”). All
capitalized terms used herein without definition shall have the same meanings herein as such terms
are defined or used in the Credit Agreement.

W i t n e s s e t h:

     Whereas, the parties hereto wish to amend the Credit Agreement to revise certain
provisions and requirements of the Credit Agreement; and

     Now, Therefore, in consideration of the mutual agreements contained herein, and other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:

     Section 1. Amendment to Section 7.11(f). From and after the Amendment Effective Date,
Section 7.11(f) of the Credit Agreement is hereby amended deleting the same in its entirety
and inserting the following in lieu thereof:

     “(f) Maximum Pre-Tax Loss. Permit any pre-tax loss (as shown on the Company’s
consolidated statement of income) to be greater than the following levels for each of the
periods set forth below:

	 	 	 	 	 
	Period	 	Maximum Pre-Tax Loss
	for the fiscal quarter ending September 30, 2008
	 	$	104,700,000	 
	for the fiscal quarter ending December 31, 2008
	 	$	20,700,000	 
	for the two (2) combined fiscal quarters ending
December 31, 2008 and March 31, 2009
	 	$	24,200,000	”

 

 

Third Amendment to Credit Agreement

     Section 2. Additional Agreement. Within thirty (30) days after the Amendment Effective Date,
the Company shall engage the services of a financial consultant (the “Consultant”) reasonably
satisfactory to the Administrative Agent (in Administrative Agent’s sole discretion), pursuant to
an agreement to provide advisory, reporting, monitoring and analytical services in scope and
substance reasonably satisfactory to the Administrative Agent in its sole discretion. The Company
shall be responsible for all fees and expenses payable to the Consultant and shall promptly pay the
same when due. Failure of the Company to engage the Consultant on the time and terms contained
herein shall constitute an Event of Default under the Credit Agreement.

     Section 3. Representations and Warranties. Each Loan Party hereby represents and warrants to
the Administrative Agent and each Lender as follows:

     (a) No Default or Event of Default has occurred and is continuing under the Credit
Agreement as amended hereby. No Default or Event of Default would result from the amendment
of the Credit Agreement contemplated hereby.

     (b) The execution, delivery and performance by the Loan Parties of this Amendment has
been duly authorized by all necessary corporate and other action and do not and will not
require any registration with, consent or approval of, or notice to or action by, any Person
(including any Governmental Authority) in order to be effective and enforceable.

     (c) This Amendment and each of the other Loan Documents (as amended by this Amendment)
constitute the legal, valid and binding respective obligations of each Loan Party, as
applicable, enforceable against it in accordance with their respective terms.

     (d) All representations and warranties of Borrowers in the Credit Agreement are true
and correct (except to the extent such representations and warranties expressly refer to an
earlier date, in which case they shall be true and correct as of such earlier date).

     (e) Loan Parties are each entering into this Amendment on the basis of its own
investigation and for its own reasons, without reliance upon the Lender or any other Person.

     (f) Each Loan Party’s respective obligations under the Credit Agreement and under the
other Loan Documents are not subject to any defense, counterclaim, set-off, right of
recoupment, abatement or other claim.

     Section 4. Continuing Effectiveness; Ratification of Guaranties and Loan Documents. As herein
amended, each of the Loan Documents (including, without limitation, each prior amendment to the
Credit Agreement) shall remain in full force and effect and each of the agreements, guarantees and
obligations contained therein (as amended hereby) is hereby ratified and confirmed in all respects.

     Section 5. Counterparts. This Amendment may be executed in any number of counterparts and by
the different parties on separate counterparts, and each such counterpart shall

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Third Amendment to Credit Agreement

be deemed to be an original but all such counterparts shall together constitute one and the
same Amendment.

     Section 6. Governing Law. This Amendment shall be a contract made under and governed by the
laws of the State of New York applicable to contracts made and to be performed entirely within such
state.

     Section 7. Successors and Assigns. This Amendment shall be binding upon the parties hereto
and their respective successors and assigns, and shall inure to the benefit of the parties hereto,
and their respective successors and assigns.

     Section 8. Effectiveness. The amendments set forth in Section 1 above shall deemed effective
as of the Amendment Effective Date provided that the Administrative Agent shall have first received
(a) counterparts of this Amendment executed by the Administrative Agent, the Required Lenders and
each Loan Party party hereto, and (b) an amendment fee (for the account of each Lender executing
this Amendment, pro rata in accordance with each such Lender’s portion of the total Commitments
hereunder) equal to ten (10) basis points (0.10%) of the total Commitments, as revised
($108,250,000).

[Signature Pages to Follow]

-3-

 

Third Amendment to Credit Agreement

     The parties hereto have caused this Amendment to be duly executed and delivered by their duly
authorized officers as of the date first set forth above.

	 	 	 	 	 
	 	Asyst Technologies, Inc.
 	 
	 	By:  	/s/ Stephen S. Schwartz 	 
	 	 	Name:  	Stephen S. Schwartz 	 
	 	 	Its:   President and Chief Executive Officer 	 
	 

	 	 	 	 	 
	 	Asyst Technologies Japan Holdings Company, Inc.
 	 
	 	By:  	/s/ Tetsuo Yamashita 	 
	 	 	Name:  	Tetsuo Yamashita 	 
	 	 	Its:   Representative Director 	 
	 

	 	 	 	 	 
	 	Asyst Technologies Japan, Inc.
 	 
	 	By:  	/s/ Stephen S. Schwartz 	 
	 	 	Name:  	Stephen S. Schwartz 	 
	 	 	Its:   Representative Director 	 

 

 

	 	 	 	 	 

Third Amendment to Credit Agreement

	 	 	 	 	 
	 	KeyBank National Association, as

Administrative Agent, Lender, Swing Line Lender and

L/C Issuer

 	 
	 	/s/ Raed Alfayoumi
 	 
	 	By: Raed Alfayoumi 	 
	 	Title:  	Vice President 	 

 

 

	 	 	 	 	 

Third Amendment to Credit Agreement

	 	 	 	 	 
	 	Silicon Valley Bank, as Lender

 	 
	 	By:  	/s/ Tom Smith
 	 
	 	Title: 	 Managing Director 	 
	 	 	 	 

 

 

	 	 	 	 	 

Third Amendment to Credit Agreement

	 	 	 	 	 
	 	Asyst Technologies (Taiwan) Ltd.,

as a Taiwanese Subsidiary Guarantor

 	 
	 	By:  	/s/ Steve Debenham
 	 
	 	Title: Director 	 
	 	 	 	 

 

 

	 	 	 	 	 

Third Amendment to Credit Agreement

	 	 	 	 	 
	 	Asyst Korea, Ltd.,

as a Korean Subsidiary Guarantor

 	 
	 	By:  	/s/ Steve Debenham
 	 
	 	Title: Director 	 
	 	 	 

 

 

	 	 	 	 	 

Third Amendment to Credit Agreement

	 	 	 	 	 
	 	Asyst Technologies Japan, Inc. (Formerly

Asyst Shinko, Inc.),

as a Japanese Subsidiary Guarantor

 	 
	 	By:  	/s/ Stephen S. Schwartz
 	 
	 	Title: Representative Director  	 
	 	 	 	 

 

 

	 	 	 	 	 

Third Amendment to Credit Agreement

	 	 	 	 	 
	 	Asyst Technologies, Inc.,

as Guarantor

 	 
	 	By:  	/s/ Stephen S. Schwartz
 	 
	 	Title: President & Chief Executive Officer  	 
	 	 	 	 

 

 

	 	 	 	 	 

Third Amendment to Credit Agreement

	 	 	 	 	 
	 	Asyst Technologies Japan Holdings Company, Inc.

(Formerly Asyst Japan, Inc.),

as a Japanese Subsidiary Guarantor

 	 
	 	By:  	/s/ Tetsuo Yamashita
 	 
	 	Title: President 	 
	 	 	 	 

 

 

	 	 	 	 	 

Third Amendment to Credit Agreement

	 	 	 	 	 
	 	Asyst Automation Technologies Ireland Limited

(Fromerly: Asyst Shinko Ireland, Ltd.)

as Other Foreign Subsidiary Guarantor
 	 
	 	By:  	/s/ John Swenson 	 
	 	Title: Director 	 
	 	 	 	 

 

 

	 	 	 	 	 

Third Amendment to Credit Agreement

	 	 	 	 	 
	 	Asyst Shinko Taiwan, Inc.,

as a Taiwanese Subsidiary Guarantor

 	 
	 	By:  	/s/ Noboru Goto
 	 
	 	Title: Chairman 	 
	 	 	 	 

 

 

	 	 	 	 	 

Third Amendment to Credit Agreement

	 	 	 	 	 
	 	Asyst Shinko Korea, Inc.,

as a Korean Subsidiary Guarantor

 	 
	 	By:  	/s/ Steve Debenham
 	 
	 	Title: Director 	 
	 	 	 	 

 

 

	 	 	 	 	 

Third Amendment to Credit Agreement

	 	 	 	 	 
	 	Asyst Shinko America, Inc.,

as US Subsidiary Guarantor

 	 
	 	By:  	Steve Debenham
 	 
	 	Title: Directorexv4w1

Exhibit 4.1

STEMCELLS, INC.

WARRANT TO PURCHASE COMMON STOCK

To Purchase 2,586,207 Shares of Common Stock

Date of Issuance: November 12, 2008

VOID AFTER MAY 12, 2014

     THIS CERTIFIES THAT, for value received,                      , or permitted registered assigns
(the “Holder”), is entitled to subscribe for and purchase at the Exercise Price (defined below)
from StemCells, Inc., a Delaware corporation (the “Company”), up to 2,586,207 shares of the common
stock of the Company, par value $0.01 per share (the “Common Stock”). This warrant is one of a
series of warrants issued by the Company as of the date hereof (individually a “Warrant”;
collectively, “Company Warrants”) pursuant to that certain subscription agreement between the
Company and the Holder, dated as of November 12, 2008 (the “Subscription Agreement”).

     1. DEFINITIONS. Capitalized terms used herein but not otherwise defined herein
shall have their respective meanings as set forth in the Subscription Agreement. As used herein,
the following terms shall have the following respective meanings:

     (a) “Exercise Period” shall mean the period commencing with the date occurring six months
after the date hereof and ending five years and six months from the date hereof, unless sooner
terminated as provided below.

     (b) “Exercise Price” shall mean $2.30 per share, subject to adjustment pursuant to
Section 4 below.

     (c) “Exercise Shares” shall mean the shares of Common Stock issuable upon exercise of this
Warrant.

     (d) “Trading Day” shall mean (i) any day on which the Common Stock is listed or quoted and
traded on its primary Trading Market, (ii) if the Common Stock is not then listed or quoted and
traded on any eligible market (meaning any of the NYSE, AMEX or NASDAQ), then a day on which
trading occurs on the OTC Bulletin Board (or any successor thereto), or (iii) if trading does not
occur on the OTC Bulletin Board (or any successor thereto), any business day.

     2. EXERCISE OF WARRANT.

     2.1 STANDARD EXERCISE OF WARRANT. The rights represented by this Warrant may be
exercised in whole or in part at any time during the Exercise Period, by delivery of the following
to the Company at its address set forth on the signature page hereto (or at such other address as
it may designate by notice in writing to the Holder):

     (a) An executed Notice of Exercise in the form attached hereto; and

     (b) Payment of the Exercise Price either (i) in cash or by check (subject to the
limitations in Section 2.4 below), or (ii) pursuant to net exercise terms outlined under
Section 2.2 below.

     Execution and delivery of the Notice of Exercise shall have the same effect as cancellation of
the original Warrant and issuance of a new Warrant evidencing the right to purchase the remaining
number of Exercise Shares, if any. Holder agrees to provide this Warrant, or an affidavit of lost
security in accordance with Section 9, to the Company within five days after the delivery
of the Notice of Exercise.

     Certificates for shares purchased hereunder shall be transmitted by the transfer agent of the
Company to the Holder by crediting the account of the Holder’s prime broker with the Depository
Trust Company through its

 

 

Exhibit 4.1

Deposits and Withdrawal at Custodian (DWAC) system if the Company is a participant in such
system, and otherwise by physical delivery to the address specified by the Holder in the Notice of
Exercise within three Trading Days from the delivery to the Company of the Notice of Exercise,
surrender of this Warrant and payment of the aggregate Exercise Price as set forth above. This
Warrant shall be deemed to have been exercised on the date the Exercise Price is received by the
Company. The Exercise Shares shall be deemed to have been issued, and Holder or any other person so
designated to be named therein shall be deemed to have become a holder of record of such shares for
all purposes, as of the date this Warrant has been exercised by payment to the Company of the
Exercise Price.

     If by the close of the fifth Trading Day after delivery of an Notice of Exercise, the Company
fails to deliver to the Holder a certificate representing the required number of Exercise Shares in
the manner required pursuant to this Section 2, and such failure to deliver the Exercise
Shares is caused by the Company’s failure to use commercially reasonable efforts to comply with
this Section 2 and/or the covenants in Section 3.1 herein, and if after such fifth
Trading Day and prior to the receipt of such Exercise Shares, the Holder purchases (in an open
market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the
Holder of the Exercise Shares which the Holder anticipated receiving upon such exercise (a
“Buy-In”), then the Company shall, within three Trading Days after the Holder’s request and in the
Holder’s sole discretion, either (1) pay in cash to the Holder an amount equal to the Holder’s
total purchase price (including brokerage commissions, if any) for the shares of Common Stock so
purchased (the “Buy-In Price”), at which point the Company’s obligation to deliver such certificate
(and to issue such Exercise Shares) shall terminate or (ii) promptly honor its obligation to
deliver to the Holder a certificate or certificates representing such Exercise Shares and pay cash
to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A)
such number of Exercise Shares, times (B) the closing bid price on the date of exercise.

     The person in whose name any certificate or certificates for Exercise Shares are to be issued
upon exercise of this Warrant shall be deemed to have become the holder of record of such shares on
the date on which this Warrant was surrendered and payment of the Exercise Price was made,
irrespective of the date of delivery of such certificate or certificates, except that, if the date
of such surrender and payment is a date when the stock transfer books of the Company are closed,
such person shall be deemed to have become the holder of such shares at the close of business on
the next succeeding date on which the stock transfer books are open.

     To the extent permitted by law, the Company’s obligations to issue and deliver Exercise Shares
in accordance with the terms hereof are absolute and unconditional, irrespective of any action or
inaction by the Holder to enforce the same, any waiver or consent with respect to any provision
hereof, the recovery of any judgment against any person or entity or any action to enforce the
same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged
breach by the Holder or any other person or entity of any obligation to the Company or any
violation or alleged violation of law by the Holder or any other person or entity, and irrespective
of any other circumstance which might otherwise limit such obligation of the Company to the Holder
in connection with the issuance of Exercise Shares. Nothing herein shall limit a Holder’s right to
pursue any other remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver certificates representing shares of Common Stock upon exercise of this
Warrant as required pursuant to the terms hereof.

     2.2 NET EXERCISE. If during the Exercise Period, the issuance of the Exercise
Shares to the Holder is not covered by the Registration Statement, as defined in the Subscription
Agreement, or any other effective registration statement under the Securities Act of 1933, as
amended, and the fair market value of one share of the Common Stock is greater than the Exercise
Price (at the date of calculation as set forth below), the Holder shall be permitted to exercise
this Warrant by electing to receive (and the Company shall be permitted satisfy its obligation to
issue the shares to be issued on exercise of this Warrant by issuing to the Holder) shares equal to
the value (as determined below) of this Warrant (or the portion thereof being canceled), in lieu of
paying the Exercise Price in immediately available funds. Upon delivery of a properly endorsed
Notice of Exercise, the Company shall issue to the Holder a number of shares of Common Stock
computed using the following formula:

2

 

Exhibit 4.1

	 	 	 	 	 	 	 
	 

	 	X =
	 	Y (A-B)
 

A
	 	 

	 	 	 
	Where X =

	 	the number of shares of Common Stock to be issued to the Holder
	 
	 	 
	Y =

	 	the number of shares of Common Stock for which the Warrant is
then being exercised
	 
	 	 
	A =

	 	the fair market value of one share of the Company’s Common
Stock (at the date of such calculation)
	 
	 	 
	B =

	 	Exercise Price in effect at the time of exercise

     For purposes of the above calculation, the “fair market value” of one share of Common Stock
shall mean (i) the average of the closing sales prices for the shares of Common Stock on the NASDAQ
Global Market or other trading market where such security is listed or traded as reported by
Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by
the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then
reporting sales prices of such security) (collectively, “Bloomberg”) for the ten (10) consecutive
trading days immediately preceding such date, or (ii) if the NASDAQ Global Market is not the
principal trading market for the shares of Common Stock, the average of the reported sales prices
reported by Bloomberg on the principal trading market for the Common Stock during the same period,
or, if there is no sales price for such period, the last sales price reported by Bloomberg for such
period, or (iii) if neither of the foregoing applies, the last sales price of such security in the
over-the-counter market on the pink sheets or bulletin board for such security as reported by
Bloomberg, or if no sales price is so reported for such security, the last bid price of such
security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date
on any of the foregoing bases, the fair market value shall be as determined by the Board of
Directors of the Company in the exercise of its good faith judgment.

     2.3 ISSUANCE OF NEW WARRANTS. Upon any partial exercise of this Warrant, the
Company, at its expense, will forthwith and, in any event within five Trading Days, issue and
deliver to the Holder a new warrant or warrants of like tenor, registered in the name of the
Holder, exercisable, in the aggregate, for the balance of the number of shares of Common Stock
remaining available for purchase under this Warrant.

     2.4 EXERCISE LIMITATIONS; HOLDER’S RESTRICTIONS. A Holder shall not have the
right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the
extent that after giving effect to such issuance after exercise, such Holder (together with such
Holder’s affiliates) would beneficially own in excess of 4.99% of the number of shares of the
Common Stock outstanding immediately after giving effect to such issuance. For purposes of the
foregoing sentence, the number of shares of Common Stock beneficially owned by such Holder and its
affiliates shall include the number of shares of Common Stock issuable upon exercise of this
Warrant with respect to which the determination of such sentence is being made, but shall exclude
the number of shares of Common Stock which would be issuable upon (A) exercise of the remaining,
nonexercised portion of this Warrant beneficially owned by such Holder or any of its affiliates and
(B) exercise or conversion of the unexercised or nonconverted portion of any other securities of
the Company (including, without limitation, any other shares of Common Stock or Warrants) subject
to a limitation on conversion or exercise analogous to the limitation contained herein beneficially
owned by such Holder or any of its affiliates. Except as set forth in the preceding sentence, for
purposes of this Section 2.4, beneficial ownership shall be calculated in accordance with
Section 13(d) of the Exchange Act, it being acknowledged by a Holder that the Company is not
representing to such Holder that such calculation is in compliance with Section 13(d) of the
Exchange Act and such Holder is solely responsible for any schedules or other filings required to
be filed under the Exchange Act. To the extent that the limitation contained in this Section
2.4 applies, the determination of whether this Warrant is exercisable (in relation to other
securities owned by such Holder) and of which a portion of this Warrant is exercisable shall be in
the sole discretion of a Holder, and the submission of a Notice of Exercise shall be deemed to be
each Holder’s determination of whether

3

 

Exhibit 4.1

this Warrant is exercisable (in relation to other securities owned by such Holder) and of
which portion of this Warrant is exercisable, in each case subject to such aggregate percentage
limitation, and the Company shall be entitled to rely on the Holder’s determination and shall have
no obligation to verify or confirm the accuracy of such determination. For purposes of this
Section 2.4, in determining the number of outstanding shares of Common Stock, a Holder may
rely on the number of outstanding shares of Common Stock as reflected in (x) the Company’s most
recent Form 10-Q or Form 10-K, as the case may be, (y) a more recent public announcement by the
Company or (z) any other notice by the Company or the Company’s Transfer Agent setting forth the
number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the
Company shall within two Trading Days confirm orally and in writing to such Holder the number of
shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common
Stock shall be determined after giving effect to the conversion or exercise of securities of the
Company, including this Warrant, by such Holder or its affiliates since the date as of which such
number of outstanding shares of Common Stock was reported. The provisions of this Section
2.4 may be waived by such Holder, at the election of such Holder, upon not less than 61 days’
prior notice to the Company, and the provisions of this Section 2.4 shall continue to apply
until such 61st day (or such later date, as determined by such Holder, as may be specified in such
notice of waiver).

     3. COVENANTS OF THE COMPANY.

     3.1 COVENANTS AS TO EXERCISE SHARES. The Company covenants and agrees that all
Exercise Shares that may be issued upon the exercise of the rights represented by this Warrant
will, upon issuance, be validly issued and outstanding, fully paid and nonassessable, and free from
all taxes, liens and charges with respect to the issuance thereof.

     The Company further covenants and agrees that the Company will at all times during the
Exercise Period, have authorized and reserved, free from preemptive rights, a sufficient number of
shares of Common Stock to provide for the exercise of the rights represented by this Warrant. If at
any time during the Exercise Period the number of authorized but unissued shares of Common Stock
shall not be sufficient to permit exercise of this Warrant, the Company will take such corporate
action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient for such purposes.

     3.2 NO IMPAIRMENT. The Company will not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed hereunder by the Company,
and will at all times in good faith assist in the carrying out of all the provisions of this
Warrant and in the taking of all such action as may be necessary or appropriate in order to protect
the exercise rights of the Holder against impairment.

     3.3 NOTICES OF RECORD DATE AND CERTAIN OTHER EVENTS. In the event of any taking
by the Company of a record of the holders of any class of securities for the purpose of determining
the holders thereof who are entitled to receive any dividend or other distribution, the Company
shall provide to the Holder, at least ten (10) days prior to the date on which any such record is
to be taken for the purpose of such dividend or distribution, a notice specifying such date. In the
event of any voluntary dissolution, liquidation or winding up of the Company, the Company shall
provide to the Holder, at least ten (10) days prior to the date of the occurrence of any such
event, a notice specifying such date. In the event the Company authorizes or approves, enters into
any agreement contemplating, or solicits stockholder approval for any Fundamental Transaction, as
defined in Section 6 herein, the Company shall provide to the Holder, at least ten (10) days prior
to the date of the occurrence of such Fundamental Transaction, a notice specifying such date.
Notwithstanding the foregoing, the failure to deliver such notice or any defect therein shall not
affect the validity of the corporate action required to be described in such notice.

     4. ADJUSTMENT OF EXERCISE PRICE AND EXERCISE SHARES.

     (a) If the Company, at any time while this Warrant is outstanding, (i) pays a stock
dividend on its Common Stock or otherwise makes a distribution on any class of capital stock that
is payable in shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into a
larger number of shares, or (iii) combines outstanding shares

4

 

Exhibit 4.1

of Common Stock into a smaller number of shares, then in each such case the Exercise Price
shall be multiplied by a fraction of which the numerator shall be the number of shares of Common
Stock outstanding immediately before such event and of which the denominator shall be the number of
shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to
clause (i) of this paragraph shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution, and any adjustment
pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the
effective date of such subdivision or combination. The form of this Warrant need not be changed
because of any adjustment in the number of Exercise Shares subject to this Warrant.

     (b) If the Company, at any time while this Warrant is outstanding, distributes to holders
of Common Stock, (i) Common Stock or any shares of stock or other securities which are at any time
directly or indirectly convertible into or exchangeable for Common Stock, or any rights or options
to subscribe for, purchase or otherwise acquire any of the foregoing by way of dividend or other
distribution (other than a dividend or distribution covered in Section 4(a) above); (ii)
any cash paid or payable otherwise than as a cash dividend; or (iii) any other asset, then and in
each such case, the Holder hereof will, upon the exercise of this Warrant, be entitled to receive,
in addition to the number of shares of Common Stock receivable thereupon, and without payment of
any additional consideration therefor, the amount of stock and other securities and property
(including cash in the cases referred to in clauses (ii) and (iii) above) which such Holder would
hold on the date of such exercise had such Holder been the holder of record of such Common Stock as
of the date on which holders of Common Stock received or became entitled to receive such shares or
all other additional stock and other securities and property.

     (c) Upon the occurrence of each adjustment pursuant to this Section 4, the Company
at its expense will, at the written request of the Holder, promptly compute such adjustment in
accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment,
including a statement of the adjusted Exercise Price and adjusted number or type of Exercise Shares
or other securities issuable upon exercise of this Warrant (as applicable), describing the
transactions giving rise to such adjustments and showing in detail the facts upon which such
adjustment is based. Upon written request, the Company will promptly deliver a copy of each such
certificate to the Holder and to the Company’s transfer agent.

     5. FRACTIONAL SHARES. No fractional shares shall be issued upon the exercise of
this Warrant as a consequence of any adjustment pursuant hereto. All Exercise Shares (including
fractions) issuable upon exercise of this Warrant may be aggregated for purposes of determining
whether the exercise would result in the issuance of any fractional share. If, after aggregation,
the exercise would result in the issuance of a fractional share, the Company shall, in lieu of
issuance of any fractional share, pay the Holder otherwise entitled to such fraction a sum in cash
equal to the product resulting from multiplying the then current fair market value of an Exercise
Share by such fraction.

     6. FUNDAMENTAL TRANSACTIONS. If, at any time while this Warrant is outstanding,
(i) the Company effects any merger or consolidation of the Company with or into another entity, in
which the shareholders of the Company as of immediately prior to the transaction own less than a
majority of the outstanding stock of the surviving entity, (ii) any tender offer or exchange offer
(whether by the Company or another person or entity) is completed pursuant to which the holders of
more than the 50% of the outstanding shares of Common Stock (not including any shares of Common
Stock held by the person or persons making or party to, or associated or affiliated with the
Persons making or party to, such purchase, tender or exchange offer) are permitted to tender or
exchange their shares for other securities, cash or property, or (iii) the Company effects any sale
of all or substantially all of its assets in one or a series of related transactions, or (iv) the
Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other securities, cash or
property (other than as a result of a subdivision or combination of shares of Common Stock covered
by Section 4 above), (v) the Company consummates a stock purchase agreement or other
business combination (including, without limitation, a reorganization, recapitalization, spin-off
or scheme of arrangement) with another person whereby such other person acquires more than the 50%
of the outstanding shares of Common Stock (not including any shares of Common Stock held by the
other person or other persons making or party to, or associated or affiliated with the other
persons making or party to, such stock purchase agreement or other business combination), or (vi)
any “person” or “group” (as these terms are used for purposes of Sections 13(d) and

5

 

Exhibit 4.1

14(d) of the Securities Exchange Act of 1934, as amended) becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended), directly or
indirectly, of 50% of the aggregate ordinary voting power represented by issued and outstanding
Common Stock (each, a “Fundamental Transaction”), the Holder shall have the right thereafter to
receive, upon exercise of this Warrant, the same amount and kind of securities, cash or property as
it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it
had been, immediately prior to such Fundamental Transaction, the holder of the number of Exercise
Shares then issuable upon exercise in full of this Warrant (the “Alternate Consideration”). To the
extent necessary to effectuate the foregoing provisions, any successor to the Company or surviving
entity in such Fundamental Transaction shall issue to the Holder a new warrant consistent with the
foregoing provisions and evidencing the Holder’s right to exercise such warrant into Alternate
Consideration. In lieu of the Alternate Consideration, the Holder shall have the right to require
the Company to redeem this Warrant, for a purchase price, payable in cash on the closing date of
such Fundamental Transaction, equal to the Black Scholes Value of the remaining unexercised portion
of this Warrant on the closing date of such Fundamental Transaction. “Black Scholes Value” means
the value of this Warrant based on the Black and Scholes Option Pricing Model obtained from the
“OV” function on Bloomberg determined as of the day immediately following the public announcement
of the applicable Fundamental Transaction and reflecting (i) a risk-free interest rate
corresponding to the U.S. Treasury rate for a period equal to the remaining term of this Warrant as
of such date, (ii) an expected volatility equal to the lesser of (x) 60-day volatility or (y)
100-day volatility, in each case obtained from the HVT function on Bloomberg, provided however, the
expected volatility used to calculate such value shall not exceed eighty (80%) percent and (iii) an
underlying price per share used in such calculation equal to the sum of the price per share being
offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in the
Fundamental Transaction. The terms of any agreement pursuant to which a Fundamental Transaction is
effected shall include terms requiring any such successor or surviving entity to comply with the
provisions of this Section 6 and ensuring that this Warrant (or any such replacement
security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental
Transaction.

     7. NO STOCKHOLDER RIGHTS. Other than as provided in Section 3.3 or
otherwise herein, the Holder, solely in such Holder’s capacity as a holder of this Warrant, shall
not be entitled to vote or receive dividends or be deemed the holder of share capital of the
Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon
the Holder, solely in such Holder’s capacity as the Holder of this Warrant, any of the rights of a
stockholder of the Company or any right to vote, give or withhold consent to any corporate action
(whether any reorganization, issue of stock, reclassification of stock, consolidation, merger,
conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or
otherwise, prior to the issuance to the Holder of the Exercise Shares which such Holder is then
entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this
Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities
(upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such
liabilities are asserted by the Company or by creditors of the Company.

     8. TRANSFER OF WARRANT. Subject to compliance with any applicable laws, this
Warrant and all rights hereunder are transferable, by the Holder in person or by duly authorized
attorney, upon delivery of this Warrant and the form of assignment attached hereto to any
transferee designated by Holder. If this Warrant is to be transferred, the Holder shall surrender
this Warrant to the Company, whereupon the Company will forthwith issue and deliver upon the order
of the Holder a new Warrant (in accordance with Section 2.3), registered as the Holder may request,
representing the right to purchase the number of Exercise Shares being transferred by the Holder
and, if less then the total number of Exercise Shares then underlying this Warrant is being
transferred, a new Warrant (in accordance with Section 2.3) to the Holder representing the right to
purchase the number of Exercise Shares not being transferred.

     9. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT. If this Warrant is lost,
stolen, mutilated or destroyed, the Company may, on such terms as to reasonable bond and indemnity
or otherwise as it may reasonably impose (which shall, in the case of a mutilated Warrant, include
the surrender thereof), issue a new Warrant of like denomination and tenor as this Warrant so lost,
stolen, mutilated or destroyed.

6

 

Exhibit 4.1

     10. DISPUTE. In the case of a dispute as to the determination of the Exercise
Price or the arithmetic calculation of the Exercise Shares, the Company shall promptly issue to the
Holder the number of Exercise Shares that are not disputed and resolve such dispute in accordance
with this Section 10. In the case of a dispute as to the determination of the Exercise
Price or the arithmetic calculation of the Exercise Shares, the Company shall provide notice to the
Holder of the disputed determinations or arithmetic calculations within two Trading Days of receipt
of the Notice of Exercise giving rise to such dispute, as the case may be. If the Holder and the
Company are unable to agree upon such determination or calculation of the Exercise Price or the
Exercise Shares within three Trading Days of such disputed determination or arithmetic calculation
being submitted to the Holder, then the Company shall, within two Trading Days provide submit (a)
the disputed determination of the Exercise Price to an independent, reputable investment bank
selected by the Company and approved by the Holder or (b) the disputed arithmetic calculation of
the Exercise Shares to the Company’s independent, outside accountant. The Company shall cause at
its expense the investment bank or the accountant, as the case may be, to perform the
determinations or calculations and notify the Company and the Holder of the results no later than
ten Trading Days from the time it receives the disputed determinations or calculations. Such
investment bank’s or accountant’s determination or calculation, as the case may be, shall be
binding upon all parties absent demonstrable error.

     11. NOTICES, ETC. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the party to be
notified, (b) when sent by confirmed telex or facsimile if sent during normal business hours of the
recipient, if not, then on the next Trading Day, (c) five days after having been sent by registered
or certified mail, return receipt requested, postage prepaid, or (d) one day after deposit with a
nationally recognized overnight courier, specifying next day delivery, with written verification of
receipt. All communications shall be sent to the Company at the address listed on the signature
page hereto and to Holder at the applicable address set forth on the applicable signature page to
the Subscription Agreement or at such other address as the Company or Holder may designate by ten
(10) days advance written notice to the other parties hereto.

     12. ACCEPTANCE. Receipt of this Warrant by the Holder shall constitute
acceptance of and agreement to all of the terms and conditions contained herein.

     13. GOVERNING LAW; WAIVER OF JURY TRIAL. This Warrant shall be governed by, and
construed in accordance with, the laws of the State of New York. The Holder and the Company hereby
submit to the non-exclusive jurisdiction of the Federal and state courts in the Borough of
Manhattan in The City of New York in any suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated thereby. The Holder and the Company irrevocably and
unconditionally waive any objection to the laying of venue of any suit or proceeding arising out of
or relating to this Warrant in Federal and state courts in the Borough of Manhattan in The City of
New York and irrevocably and unconditionally waives and agrees not to plead or claim in any such
court that any such suit or proceeding in any such court has been brought in an inconvenient forum.
EACH OF THE COMPANY AND THE HOLDER HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY.

     14. AMENDMENT OR WAIVER. Any term of this Warrant may be amended or waived (either
generally or in a particular instance and either retroactively or prospectively) with the written
consent of the Company and the Holder. The Company shall give prompt written notice to the Holder
of any amendment hereof or waiver hereunder that was effected without the Holder’s written consent.
No waivers of any term, condition or provision of this Warrant, in any one or more instances, shall
be deemed to be, or construed as, a further or continuing waiver of any such term, condition or
provision.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

7

 

Exhibit 4.1

     IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its duly authorized
officer as of November 12, 2008.

	 	 	 	 	 	 	 
	 	 	STEMCELLS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	3155 Porter Drive

Palo Alto, CA 94304	 	 

8

 

Exhibit 4.1

NOTICE OF EXERCISE

TO: STEMCELLS, INC.

     (1) [  ] The undersigned registered holder hereby elects to purchase [
] shares of the common stock, par value $0.01 (the “Common Stock”), of STEMCELLS, INC. (the
“Company”) pursuant to the terms of the attached Warrant, and tenders herewith payment of the
exercise price in full, together with all applicable transfer taxes, if any, subject to the
limitations set forth in Section 2.4 of the Warrant.

     [  ] The undersigned hereby elects to purchase [          ] shares of Common Stock
of the Company pursuant to the terms of the net exercise provisions set forth in Section
2.2 of the attached Warrant, and shall tender payment of all applicable transfer taxes, if any.

     (2) Please issue the certificate for shares of Common Stock in the name of:

 

Print or type name

 

Social Security or other Identifying Number

 

Street Address

 

City State Zip Code

     (3) If such number of shares shall not be all the shares purchasable upon the exercise of
the Warrants evidenced by this Warrant, a new warrant certificate for the balance of such Warrants
remaining unexercised shall be registered in the name of and delivered to:

 

 

Print or type name

 

Social Security or other Identifying Number

 

Street Address

9

 

Exhibit 4.1

 

City State Zip Code

Dated:                                         

  (Date)

	 	 	 	 	 
	 

	 	
 

	 	 
	 

	 	(Signature)	 	 
	 
	 

	 	
 

	 	 
	 

	 	(Print name)
	 	 

10

 

Exhibit 4.1

ASSIGNMENT FORM

     (To assign the foregoing Warrant, execute this form and supply required information. Do not
use this form to purchase shares.)

     FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned
to

	 	 	 
	Name:
	 	 
	 

	 	 
	 

	 	(Please Print)
	 
	 	 
	Address:
	 	 
	 

	 	 
	 

	 	(Please Print)
	 
	 	 
	Dated:      , 200[  ]
	 	 

	 	 	 	 	 
	Holder’s Signature:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Holder’s Address:
	 	 	 	 
	 

	 	 

	 	 

NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face
of the Warrant, without alteration or enlargement or any change whatever. Officers of corporations
and those acting in a fiduciary or other representative capacity should file proper evidence of
authority to assign the foregoing Warrant.

11

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