STANDSTILL AND FORBEARANCE AGREEMENT
EXHIBIT
10.2
This
Standstill and Forbearance Agreement (this “Agreement”) is made
and entered into as of July 29, 2009 by and among (a) Advanced Cell
Technologies, Inc., a Delaware corporation (“ACTC” or the “Company”) and (b) the
senior noteholders identified on the signature pages hereof (each, a “Lender”, and
collectively the “Lenders”).
RECITALS
(a) The
Company and the Lenders are parties to that certain (i) Securities Purchase
Agreement, dated September 15, 2005, as amended (the “September 2005 Purchase
Agreement”) pursuant to which the Company issued to the Lenders
convertible debentures (the “September 2005
Debentures”), (ii) Securities Purchase Agreement, dated August 30, 2006,
as amended (the “August 2006 Purchase
Agreement”) pursuant to which the Company issued to the Lenders
Amortizing Convertible Debentures due August 30, 2009 (the “August 2006
Debentures”), (iii) Securities Purchase Agreement, dated August 31, 2007,
as amended (the “August 2007 Purchase
Agreement”) pursuant to which the Company issued to the Lenders
Amortizing Senior Secured Convertible Debentures due August 31, 2010 (the “August 2007
Debentures”) and (iv) Securities Purchase Agreement, dated March 31,
2008, as amended (the “March 2008 Purchase
Agreement” and collectively with the September 2005 Purchase Agreement,
August 2006 Purchase Agreement and August 2007 Purchase Agreement, the “Purchase Agreements”)
pursuant to which the Company issued to the Lenders Original Issue Discount
Senior Secured Convertible Debentures due March 31, 2009 (the “March 2008
Debentures” and collectively with the September 2005 Debentures, August
2006 Debentures and August 2007 Debentures, the “Debentures”). As of
the date hereof, the outstanding principal amount of the Debentures is equal to
$12,835,804.70, in the aggregate, plus continuing and accruing interest, fees
and costs under the Transaction Documents (such outstanding amount, the “Indebtedness”).
(b) The
Company acknowledges that an Event of Default has occurred under the Debentures
as set forth on Schedule 1 attached
hereto (the “Existing
Defaults”). As a result of the occurrence and continuation of the
Existing Defaults, the Lenders are entitled to, among other things, immediately
enforce their rights and remedies against the Company.
(c) The
Company has requested that the Lenders refrain and forbear from exercising
certain rights and remedies with respect to the Indebtedness, and the Lenders
are willing to do so on the terms and conditions set forth herein.
NOW THEREFORE, in
consideration of the premises and the mutual agreement contained therein, and
for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereby agree as follows:
Section
1. Definitions
and Recitals. Capitalized terms
used and not otherwise defined herein have the meanings ascribed to such terms
in the Purchase Agreement. The above recitals shall be incorporated
and construed as part of this Agreement.
Section
2. Ratification
and Incorporation of Purchase Agreement, Debentures, and Related
Agreements. Except as
expressly modified by this Agreement, (a) the Company hereby acknowledges,
confirms and ratifies all of the terms and conditions set forth in, and all of
its obligations under, the Purchase Agreement, Debentures, and related
Transaction Documents, which documents are valid, binding and in full force and
effect and (b) all of the terms and conditions set forth in the foregoing
Transaction Documents are legal, valid and binding obligations and are
incorporated herein by this reference as if set forth in full
herein.
Section
3. Acknowledgement
of Indebtedness.
(a) The
Company acknowledges and agrees that as of the date hereof, the aggregate
principal amount of the Indebtedness due under the Debentures is not less than
$50,613,127 (inclusive of outstanding principal amount, original issue discount
amounts and other amounts due and outstanding). The Company
represents and agrees that it has no offset, defense, counterclaim, dispute or
disagreement of any kind or nature whatsoever with respect to the liability or
amount of such foregoing Indebtedness.
(b) In
addition to the amount set forth above, the Company is and shall be liable to
the Lenders for all interest accrued and accruing, fees, costs, liquidated
damages, expenses, and costs of collection (including attorney’s fees and
expenses and other amounts due under the Purchase Agreement and other
Transaction Documents) heretofore or hereafter accrued or incurred in connection
with the Indebtedness, including, without limitation, all attorney’s fees and
expenses incurred in connection with the negotiation and preparation of this
Agreement and all documents, instruments, and agreements incidental hereto, as
provided in the applicable Transaction Document; and
(c) The
Company hereby acknowledges and agrees that Existing Defaults have occurred and
are continuing, each of which constitutes an Event of Default and entitles
Lenders to accrue interest at the default rate of interest and to exercise its
rights and remedies under the Transaction Documents, applicable law or
otherwise. Lenders have not waived, presently do not intend to waive
and may never waive such Existing Defaults and nothing contained herein or the
transactions contemplated hereby shall be deemed to constitute any such
waiver. The Company hereby acknowledges and agrees that Lenders have
the right to declare the Indebtedness to be immediately due and payable under
the terms of this Agreement.
Section
4. The
Standstill Period. In reliance upon the representations,
warranties and covenants of the Company contained in this Agreement, and subject
to Section 6, each Lender agrees that it will forbear from exercising its rights
and remedies.
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Section
5. Termination
of Standstill Obligations.
(a) The
obligation of any Lender under Section 4 hereof shall terminate (the “Termination”) on the
earliest of (i) the date, if any, on which a petition for relief under the
United States Bankruptcy Code or any similar state or Canadian law is filed by
or against the Company or any of its subsidiaries or (ii) the date this
Agreement is otherwise terminated or expires, it being understood that the
Lenders holding 67% of the then outstanding principal amount of the Debentures
shall have the right to terminate this Agreement on 3 Business Days’ prior
notice to the Company. Notwithstanding anything
in this Agreement or the Transaction Documents to the contrary, a Lender (the
“Injured
Lender”) shall have the right to take action against the Company pursuant
to this Agreement or the Transaction Documents without the consent of
any other Lender in the event that the Company defaults on a material obligation
to such Injured Lender and such treatment of the Injured Lender is
disproportionate to the treatment afforded by the Company to any other Lender;
provided that such action shall only seek a remedy to the extent required to
afford such Injured Lender equal treatment in proportion to such other Lenders
and further, prior to taking such action, written notice shall be provided to
all other Lenders.
(b) Upon
Termination, the agreement of Lenders to forbear shall automatically and without
further notice or action terminate and be of no force and effect, it being
understood and agreed that the effect of such Termination will be to permit
Lenders to exercise such rights and remedies hereunder, under the Transaction
Documents, or applicable law, immediately without any further notice, passage of
time or forbearance of any kind.
(c) The
Company agrees that all of the Indebtedness shall, if not sooner paid, be
absolutely and unconditionally due and payable in full in cash or other
immediately available funds by the Company and the Lenders on the
Termination.
Section
6. Representations
and Warranties. In order to induce the Lenders to enter into
this Agreement and to forbear with respect to the Existing Defaults in the
manner provided in this Agreement, the Company represents and warrants to the
Lenders as follows:
(a) Power and
Authority. The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by this
Agreement and otherwise to carry out its obligations hereunder.
(b) Authorization of this
Agreement. The execution and delivery of this Agreement by the
Company and the performance hereunder have been duly authorized by all necessary
action, and this Agreement has been duly executed and delivered by the
Company.
(c) Enforceability. This
Agreement constitutes the legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms.
(d) No Violation or
Conflict. The execution and delivery by the Company of this
Agreement and the performance by the Company hereunder do not and will not (i)
contravene, in any respect, any provision of any law, regulation, decree,
ruling, judgment or order that is applicable to the Company or its properties or
other assets, or (ii) result in a breach of or constitute a default under the
charter, bylaws or other organizational documents of the Company or any material
agreement, indenture, lease or instrument binding upon the Company or its
properties or other assets.
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(e) Equal
Consideration. No consideration has been offered or paid to
any person to amend or consent to a waiver, modification, forbearance or
otherwise of any provision of any of the Transaction Documents.
(f) No
Defaults. Other than the Existing Defaults, no Event of
Default has occurred and is continuing as of the date hereof.
Section
7. Public
Disclosure. The Company shall, on the first business day
following the date hereof, file a Form 8-K with the Commission, reasonably
acceptable to the Lenders, disclosing the material terms of the transactions
contemplated hereby. The Company shall consult with the Lenders in
issuing any other press releases with respect to the transactions contemplated
hereby.
Section
8. Effect on
Transaction Documents. Except as specifically provided herein,
all of the Transaction Documents remain in full force and effect in accordance
with their respective terms. Nothing in this Agreement shall extend
to or affect in any way any of the rights or obligations of the Company arising
under the Transaction Documents.
Section
9. Waiver of
Jury Trial; Governing Law and Consent to Jurisdiction
(a) Jury
Trial. The Company makes the following waiver knowingly,
voluntarily, and intentionally, and understands that each of the Lenders, in
entering into this Agreement, is relying thereon. THE COMPANY HEREBY
IRREVOCABLY WAIVES ANY PRESENT OR FUTURE RIGHT TO A JURY IN ANY TRIAL OF ANY
CASE OR CONTROVERSY IN WHICH THE LENDERS, OR EITHER OF THEM, ARE OR BECOME A
PARTY (WHETHER SUCH CASE OR CONTROVERSY IS INITIATED BY OR AGAINST THE LENDERS,
OR EITHER OF THEM, OR IN WHICH THE LENDERS, OR EITHER OF THEM, IS JOINED AS A
PARTY LITIGANT), WHICH CASE OR CONTROVERSY ARISES OUT OF, OR IS IN RESPECT OF,
ANY RELATIONSHIP BETWEEN THE COMPANY OR ANY SUCH PERSON, AND THE LENDERS, OR
EITHER OF THEM.
(b) Governing Law: Consent To
Jurisdiction And Venue. THIS AGREEMENT AND THE OBLIGATIONS
ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LAWS AND DECISIONS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES THEREOF
REGARDING CONFLICTS OF LAWS, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA. COMPANY HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL
COURTS LOCATED WITHIN THE COUNTY OF NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION
TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN COMPANY AND LENDERS
PERTAINING TO THIS AGREEMENT, THE NOTES OR ANY OF THE OTHER AGREEMENTS OR TO ANY
MATTER ARISING OUT OF OR RELATED TO THIS AGREEMENT.
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Section
10. Release
and Waivers.
(a) Waiver of Claims by the
Company. The Company hereby acknowledges and agrees that it
has no offsets, defenses, claims, or counterclaims against the Lenders, or
either of them, or any of the Lenders’ respective officers, directors,
employees, members, managers, affiliates, attorneys, representatives,
predecessors, successors, or assigns with respect to the Indebtedness, or
otherwise, and that if the Company now has, or ever did have, any such offsets,
defenses, claims, or counterclaims against the Lenders, or either of them, or
any of the Lenders’ respective officers, directors, employees, affiliates,
attorneys, representatives, predecessors, successors, or assigns, whether known
or unknown, at law or in equity, from the beginning of the world through this
date and through the time of execution of this Agreement, all of them are hereby
expressly WAIVED, and the Company hereby RELEASES the Lenders and the Lenders’
respective officers, directors, employees, affiliates, attorneys,
representatives, predecessors, successors, and assigns from any liability
therefor.
(b) Release. In
consideration of the agreements of the Lenders contained herein, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company on behalf of itself and its successors, assigns,
heirs, executor, administrator and other legal representatives, hereby, jointly
and severally, absolutely, unconditionally and irrevocably releases, remises and
forever discharges the Lenders, successors and assigns, and their respective
present and former shareholders, affiliates, subsidiaries, divisions,
predecessors, directors, officers, attorneys, employees, members, managers,
agents and other representatives (the Lenders and all such other parties being
hereinafter referred to collectively as the “Releasees” and
individually as a “Releasee”), of and
from all demands, actions, causes of action, suits, covenants, contracts,
controversies, agreements, promises, sums of money, accounts, bills, reckonings,
damages and any and all other claims, counterclaims, defenses, rights of set
off, demands and liabilities whatsoever (individually, a “Claim” and
collectively, “Claims”) of every
name and nature, known or unknown, suspected or unsuspected, both at law and in
equity, which the Company, or any of its officers, directors, employees,
successors, assigns, heirs, executor, administrator or other legal
representatives, as the case may be, may now or hereafter own, hold, have or
claim to have against the Releasees or any of them for, upon, or by reason of
any nature, cause or thing whatsoever which arises at any time on or prior to
the day and date of this Agreement, for or on account of, or in relation to, or
in any way in connection with this Agreement, as amended and supplemented
through the date hereof.
(c) The
Company understands, acknowledges and agrees that the release set forth above
may be pleaded as a full and complete defense and may be used as a basis for an
injunction against any action, suit or other proceeding which may be instituted,
prosecuted or attempted in breach of the provisions of such
release. The Company agrees that no fact, event, circumstance,
evidence or transaction which could now be asserted or which may hereafter be
discovered shall affect in any manner the final and unconditional nature of the
release set forth above.
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(d) Covenant Not to
Xxx. The Company, on behalf of itself and its successors,
shareholders, assigns, heirs, executor, administrator and other legal
representatives, hereby jointly and severally, absolutely, unconditionally and
irrevocably, covenants and agrees with each Releasee that it will not xxx (at
law, in equity, in any regulatory proceeding or otherwise) any Releasee on the
basis of any Claim released, remised and discharged by the
Company. If the Company or any party on its behalf violates the
foregoing covenant, the Company agrees to pay, in addition to such other damages
as any Releasee may sustain as a result of such violation, all attorneys’ fees
and costs incurred by any Releasee as a result of such violation.
Section
11. Miscellaneous.
(a) This
Agreement (i) contains the entire understanding of the parties with respect to
the subject matter hereof, (ii) may not be amended except in writing signed by
all of the parties hereto, (iii) shall inure to the benefit of the parties
hereto and their respective successors and assigns, (iv) may be executed in
multiple counterparts, each of which shall be deemed to be an original and all
of which taken together shall constitute one and the same
agreement.
(b) Any
determination that any provision of this Agreement or any application thereof is
invalid, illegal, or unenforceable in any respect in any instance shall not
affect the validity, legality, or enforceability of such provision in any other
instance, or the validity, legality, or enforceability of any other provision of
this Agreement. Section headings used herein are for convenience of
reference only, are not part of this Agreement, and are not to be taken into
consideration in interpreting this Agreement.
(c) The
Company represents and warrants that it (a) has engaged counsel and understands
fully the terms of this Agreement and the consequences of the execution and
delivery of this Agreement, (b) has been afforded an opportunity to have this
Agreement reviewed by, and to discuss this Agreement with such attorneys and
other persons as the Company may wish, and (c) has entered into this Agreement
and executed and delivered all documents in connection herewith of its own free
will and accord and without threat, duress or other coercion of any kind by any
person. The parties hereto acknowledge and agree that neither this
Agreement nor the other documents executed pursuant hereto shall be construed
more favorably in favor of one than the other based upon which party drafted the
same, it being acknowledged that all parties hereto contributed substantially to
the negotiation and preparation of this Agreement and the other documents
executed pursuant hereto or in connection herewith.
(d) In
making proof of this Agreement, it shall not be necessary to produce or account
for more than one counterpart thereof signed by each of the parties
hereto. In the event that any signature is delivered by facsimile
transmission or by e-mail delivery of a “.pdf” format data file, such signature
shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such
facsimile or “.pdf” signature page were an original thereof. Any
party delivering an executed counterpart of this Agreement by telefacsimile or
by e-mail delivery also shall deliver an original executed counterpart of this
Agreement, but the failure to deliver an original executed counterpart shall not
affect the validity, enforceability, and binding effect of this Agreement as to
such party or any other party.
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(e) Any
statute of limitations applicable to any claims or causes of action of the
Lenders against the Company and its officers and directors which
have not expired as of the date of this Agreement, the running of any
time under any such statute of limitations is hereby tolled from the date
hereof through the Termination Date.
(f) The
Company has elected to provide all Lenders with the same terms and form of
forbearance for the convenience of the Company and not because it was required
or requested to do so by the Lenders. The obligations of each Lender
under this forbearance, and any Transaction Document are several and not joint
with the obligations of any other Lender, and no Lender shall be responsible in
any way for the performance or non-performance of the obligations of any other
Lender under this forbearance or any Transaction Document. Nothing
contained herein or in any Transaction Document, and no action taken by any
Lender pursuant thereto, shall be deemed to constitute the Lenders as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Lenders are in any way acting in concert or as a
group with respect to such obligations or the transactions contemplated by this
forbearance or the Transaction Documents. Each Lender shall be
entitled to independently protect and enforce its rights, including without
limitation, the rights arising out of this forbearance or out of the other
Transaction Documents, and it shall not be necessary for any other Lender to be
joined as an additional party in any proceeding for such
purpose. Each Lender has been represented by its own separate legal
counsel in their review and negotiation of this forbearance agreement and the
Transaction Documents.
The
remainder of this page is intentionally blank. Signature page
follows.
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IN
WITNESS WHEREOF, the parties have executed this Standstill and Forbearance
Agreement as of the date first above written.
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ADVANCED
CELL TECHNOLOGIES, INC.
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By:
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Name:
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Title:
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[SIGNATURE
PAGE OF LENDERS FOLLOWS]
Signature
Page To Standstill And Forbearance Agreement
COUNTERPART
SIGNATURE PAGE
OF LENDER
TO
ACTC
FORBEARANCE AGREEMENT
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Name of Lender:
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By:
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Name:
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Title:
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Signature
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