Exhibit 10.1
 
INTERNATIONAL STEM CELL CORPORATION
 
Subscription Agreement
 
SERIES B PREFERRED STOCK
 
International Stem Cell Corporation
2595 Jason Court
Oceanside, CA 92056

Gentlemen:

I, the undersigned (the “Purchaser”), have been advised that INTERNATIONAL STEM
CELL CORPORATION, a Delaware corporation (the “Company”), wishes to raise cash
funds from various investors such as me by selling units (“Units”) consisting of
one (1) share of Series B Preferred Stock having the rights, preferences and
privileges set forth on Exhibit A hereto (the “Preferred Stock”), and two (2)
Common Stock Purchase Warrants in the form of Exhibit B hereto (the “Warrants),
at a price of One Dollar ($1.00) per Unit, with a minimum investment of One
Hundred Thousand Dollars ($100,000), or 100,000 Units, from each investor
(unless such minimum investment is waived by the Company as to a particular
investor in the sole discretion of the Company).  You have advised me that
officers, directors and employees of the Company may participate in this
offering, and that the Company may elect to utilize one or more broker-dealers
or finders to assist in the offering, for which assistance such broker-dealers
or finders would receive a commission and/or expenses.

I understand that there is no private placement memorandum with respect to the
offering of Units by the Company, and that, in lieu thereof, it is my
responsibility to read the filings of the Company with the Securities and
Exchange Commission and posted on the Commission’s EDGAR site, including without
limitation (i) the registration statement on Form SB-2, as amended, including
all supplements thereto pursuant to Rule 424 (collectively, the “Registration
Statement”), all Quarterly Reports on Form 10-QSB for the Company, and (iii) all
Current Reports on Form 8-K for the Company (all such EDGAR filings being
sometimes hereinafter referred to as the “SEC Filings”).

I understand that you will rely on the following information to confirm that I
am an “accredited investor” as defined in Regulation D under the Securities Act
of 1933, as amended (the “Securities Act”), and that I am qualified to be a
Purchaser.

This Subscription Agreement is one of a number of such subscriptions for
Units.  By signing this Subscription Agreement, I offer to purchase from the
Company the number of Units set forth below on the terms specified herein.  The
Company reserves the right, in its complete discretion, to reject any
subscription offer.  If my offer is accepted, the Company will execute a copy of
this Subscription Agreement and return it to me.

1.  Subscription.  Upon the terms and subject to the conditions set forth in
this Subscription Agreement, I hereby subscribe for and agree to purchase from
the Company the number of Units set forth on the Signature Page to this
Subscription Agreement (the “Subscribed Units”) at a price equal to $1.00 per
Unit.  A check or wire transfer in full payment of the purchase price must be
delivered to the Company contemporaneously with the execution and delivery of
this Subscription Agreement.

2.  Representations and Warranties.  I represent and warrant to the Company
that:

A.
I (i) have adequate means of providing for my current needs and possible
contingencies and I have no need for liquidity of my investment in the Units,
(ii) can bear the economic risk of losing the entire amount of my investment in
Units, and (iii) have such knowledge and experience that I am capable of
evaluating the relative risks and merits of this investment.

 
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B.
I have received and carefully read, and am familiar with the SEC Filings,
including, without limitation, the “Certain Risk Factors” section of the
Registration Statement.  All documents, records and books pertaining to the
Company and requested by me, financial and otherwise, have been made available
or delivered to me.

C.
I have had the opportunity to ask questions of and receive answers from the
Company’s management concerning the Company’s affairs generally and the terms
and conditions of my proposed investment in the Units.  I have had the
opportunity, and I have been encouraged by the Company, to consult my financial
and legal advisers in determining whether to invest in the Subscribed Units.

D.
I understand the risks implicit in the business of the Company.  Among other
things, I understand that there is no assurance that the Company will be
successful in obtaining the funds necessary for its success.

E.
No person or entity has made any representation or warranty whatsoever with
respect to any matter or thing concerning the Company and this offering, and I
am purchasing the Units based solely upon my own investigation and evaluation.

F.
I acknowledge that the Units are being sold by the Company in a non-public
offering pursuant to the exemption from registration provided by Section 4(2) of
the Securities Act, and/or Rule 506 of Regulation D promulgated thereunder.  I
acknowledge that this offering consequently has not been reviewed by the
Securities and Exchange Commission.  I understand that no Units have been
qualified pursuant to the provisions of the securities or other laws of
applicable jurisdictions.

G.
The Units for which I subscribe are being acquired solely for my own account,
for investment and are not being purchased with a view to or for their resale or
distribution.  In order to induce the Company to sell Units to me, the Company
will have no obligation to recognize the ownership, beneficial or otherwise, of
the Units by anyone but me.  I understand that the Units have not been
registered under the Securities Act by reason of a claimed exemption under the
provisions of the Securities Act which depends, in part, upon my investment
intention.

H.
I have not received any advertisement or general solicitation with respect to
the sale of the Units.

I.
If I am a Registered Representative of an FINRA member firm, I acknowledge that
I must give such firm the notice required by FINRA's Rules of Fair Practice or
any applicable successor rule of FINRA, receipt of which must be acknowledged by
such firm on the signature page hereof.

J.
Except as specifically indicated to the contrary on the Subscription Agreement,
I certify that my taxpayer identification number is correct and, if I am not a
corporation, IRA, Keogh, or Qualified Trust (as to which there would be no
withholding), I am not subject to backup withholding on interest or dividends.
If I have not provided a taxpayer identification number certified to be correct
or do not make the certification that I am not subject to backup withholding,
then I may be subject to twenty percent (20%) withholding on interest or
dividends paid to me.

K.
I represent and warrant that I am an “accredited investor” and come within one
or more of the categories set forth below.

 
(1)
Any natural person whose individual net worth, or joint net worth with that
person’s spouse, at the time of his or her purchase, exceeds $1,000,000;
         
Explanation.  In calculating net worth you may include equity in personal
property and real estate, including your principal residence, cash, short-term
investments, stock and securities.  Equity in personal property and real estate
should be based on the fair market value of such property less debt secured by
such property.

 
 
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(2)
Any natural person who had an individual income in excess of $200,000 in  each
of the two most recent years or joint income with that person's spouse in excess
of $300,000 in each of those years and has a reasonable expectation of reaching
the same income level in the current year;

Explanation.  In determining income, an investor should add to the investor's
adjusted gross income any amounts attributable to tax exempt income received,
losses claimed as a limited partner in any limited partnership, deductions
claimed for depletion, contributions to an IRA or KEOGH retirement plan, alimony
payments, and any amount by which income from long-term capital gains has been
reduced in arriving at adjusted gross income.

(3) 
 A bank as defined in Section 3(a)(2) of the Securities Act or any savings
and loan company or other institution as defined in Section 3(a)(5) of the
Securities Act, whether acting in its individual or fiduciary capacity;

(4) 
 Any broker or dealer registered pursuant to Section 15 of the
SecuritiesExchange Act of 1934, as amended;

 
(5)
An insurance company as defined in Section 2(13) of the Securities Act;

 
(6) 
An investment company registered under the Investment Company Act of 1940 or a
business development company as defined in Section 2(a)(48) of that Act;
        (7)  
A Small Business Investment Company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958;
        (8) 
An employee benefit plan within the meaning of Title I of the
Employee Retirement Income Security Act of 1974, if the investment decision is
made by a plan fiduciary, as defined in Section 3(21) of such Act, which is
either a bank, insurance company, or registered investment advisor, or if the
employee benefit plan has total assets in excess of $5,000,000 or, if a
self-directed plan, with investment decisions made solely by persons that are
accredited investors;
        (9)  
Any private business development company, as defined in Section 202(a)(22) of
the Investment Advisers Act of 1940;
        (10)  
An organization described in Section 501(c)(3) of the Internal Revenue Code,
corporation, Massachusetts or similar business trust, or partnership, not formed
for the specific purpose, of acquiring the securities offered, with total assets
in excess of $5,000,000;
        (11)  
Any trust, with total assets in excess of $5,000,000, not formed for
the specific purpose of acquiring the securities offered, whose purchase is
directed by a sophisticated person as described in Rule 506(b)(2)(ii) under the
Act; and
        (12) 
An entity in which all of the equity owners are accredited investors.  If
the Subscriber belongs to this investor category only, a list of the equity
owners of the Subscriber, and the investor category which each such equity owner
satisfies, should be attached to this Agreement as Attachment A.

 
O.
I understand that the Subscribed Units and any shares issuable upon exercise of
the Warrants (collectively, the "Covered Securities") are characterized as
“restricted securities” under the federal securities laws inasmuch as they are
being acquired from the Company in a transaction not involving a public
offering, and that under such laws and applicable regulations such Covered
Securities cannot be resold unless they are registered under the Securities Act
or unless an exemption from registration is available.  It is understood that
any certificates or other documents evidencing the Covered Securities may bear a
legend substantially as follows:

 
 
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“These securities have not been registered under the Securities Act.  They may
not be sold, offered for sale, pledged or hypothecated in the absence of a
registration statement in effect with respect to the securities under such Act
or an opinion of counsel satisfactory to the Company that such registration is
not required.”

I hereby agree that the Company shall be required to refuse to register any
transfer of the Covered Securities not made pursuant to registration under the
Securities Act, or pursuant to an available exemption from registration.

P.
I understand that the Company reserves the unrestricted right to reject or limit
any subscription.

Q.
I hereby represent that, except as set forth in this Subscription Agreement, no
representations or warranties have been made to me by the Company, the Managers
or any agent, finder, employee or affiliate of the Company, and in entering into
this transaction, I am not relying on any information, other than that contained
in the Memorandum and the results of independent investigation by me.

R.
This Subscription Agreement has been duly executed and delivered by me and
constitutes the legal, valid, binding and enforceable obligation of me, subject
to applicable bankruptcy, insolvency and similar laws affecting creditors’
rights generally, and subject, as to enforceability, to general principles of
equity.

S.
Each of the representations and warranties herein shall survive the execution
and delivery of this Subscription Agreement, any investigation by or on behalf
of the Company and the issuance of the Subscribed Units.

The foregoing representations and warranties are true and accurate as of the
date hereof, shall be true and accurate as of the date of the delivery of the
funds to the Company and shall survive such delivery.

3. Indemnification.  I understand the meaning and legal consequences of the
representations and warranties contained herein, and I will indemnify and hold
harmless the Company, its officers, directors, managers and representatives
involved in the offer or sale of the Units to me, as well as each of the
managers and representatives, employees and agents and other controlling persons
of each of them, from and against any and all loss, damage or liability due to
or arising out of a breach of any representation or warranty of mine contained
in this Subscription Agreement.

4. Revocation.  I will not cancel, terminate or revoke this Subscription
Agreement or any agreement made by me hereunder and this Subscription Agreement
shall survive my death or disability.

5.  Termination of Agreement.  If this subscription is rejected by the Company,
then this Subscription Agreement shall be null and void and of no further force
and effect, no party shall have any rights against any other party hereunder,
and the Company shall promptly return to me any and all funds delivered with
this Subscription Agreement.

6.  Miscellaneous.

A.
Any dispute involving, arising out of or related to the interpretation,
application or enforcement of this Subscription Agreement shall be submitted to
binding arbitration before the American Arbitration Association, whose rules
applicable to commercial disputes shall apply except as modified hereby.  The
arbitration hearing shall take place in Los Angeles County, California before
one arbitrator, who shall be a retired judge.  The arbitrator shall comply with
the provisions hereof unless the parties to the arbitration consent in writing
otherwise.  The arbitrator may award attorney and expert witness fees and costs
to the successful party and may award exemplary or punitive damages as well. The
arbitrator shall submit a written finding of facts and conclusions of law.  The
arbitrator shall have authority only to interpret and apply provisions of this
Subscription Agreement and shall have no authority to add to, subtract from or
modify terms of this Subscription Agreement except to the extent otherwise
provided herein.  The judgment of the arbitrator shall be binding and may be
entered as a final judgment by any court having jurisdiction over the parties
hereto.  THE PARTIES UNDERSTAND AND ACKNOWLEDGE THAT UNDER THIS SECTION EACH
WAIVES THE RIGHT TO TRIAL BY JURY IN CONNECTION WITH ANY ARBITRABLE CONTROVERSY
OR CLAIM.  Prior to arbitration, if the parties agree they shall first
participate in mediation of any dispute.  The mediator shall be selected
pursuant to the rules of the American Arbitration Association unless otherwise
agreed by the parties, and shall be conducted in accordance with the mediation
procedures of the American Arbitration Association; provided, however, that a
matter subject to mediation pursuant to this Section that is not resolved by
mediation within thirty (30) days shall be submitted to binding arbitration
pursuant to this Section.

 
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B.
This Subscription Agreement is expressly not intended for the benefit of any
other person; and except and only to the extent provided by applicable statute,
no such creditor or third party shall have any rights under this Subscription
Agreement.

C.
Except as otherwise provided in this Subscription Agreement, any notice required
or permitted to be given pursuant to the provisions of this Subscription
Agreement shall be effective as of the day personally delivered, or if sent by
mail, on the third day after deposit with the United States Postal Service,
prepaid and addressed to the intended recipient at the address set forth below
the signature of such party to this Subscription Agreement or such other address
specified in writing by such party pursuant to written notice in accordance
herewith, or, if sent by facsimile, when confirmed.

D.
This Subscription Agreement constitutes the entire agreement between the parties
pertaining to the subject matter of the transactions contemplated by this
Subscription Agreement.  This Subscription Agreement supersedes all written or
oral, prior and contemporaneous agreements, representations, warranties and
understandings of the parties with respect thereto.

E.
This Subscription Agreement and the rights of stockholders shall be governed by
and construed and enforced in accordance with the internal laws of the state of
California, inclusive of any statutes of limitation, but without regard to the
conflict of laws rules thereof.  Jurisdiction and venue for any action
concerning a dispute involving, arising out of or related to the interpretation,
application or enforcement of this Subscription Agreement shall be in Los
Angeles County, California.

F.
This Subscription Agreement may be executed in several counterparts and all
counterparts so executed shall constitute one Subscription Agreement binding on
all parties hereto, notwithstanding that all the parties are not signatories to
the original or the same counterpart.  Facsimile signatures shall be acceptable
as if original signatures had been exchanged.

G.
If a court or an arbitrator of competent jurisdiction holds any provision of
this Subscription Agreement to be illegal, unenforceable or invalid in whole or
in part for any reason, such provision shall be adjusted rather than voided, if
possible to achieve the intent of the parties to the extent possible, and in any
event the validity and enforceability of the remaining sections shall not be
affected unless an essential purpose of this Subscription Agreement would be
defeated by the loss of the illegal, unenforceable, or invalid
provision.  Without limiting the foregoing, in the event that any provision of
this Subscription Agreement relating to time period and areas of restriction
shall be declared by an arbitrator or court of competent jurisdiction to exceed
the maximum time period or areas such arbitrator or court deems reasonable and
enforceable, the agreed upon time period and areas of restriction shall be
deemed to become and thereafter be the maximum time period and areas which said
arbitrator or court deems reasonable and enforceable.

H.
This Subscription Agreement may be amended or modified from time to time only by
a written instrument executed by all parties hereto.

I.
Except as herein otherwise provided, this Subscription Agreement shall be
binding upon and inure to the benefit of the parties and their respective heirs,
executors, administrators, successors and assigns.

J.
Headings are used merely for reference purposes and do not affect content in any
manner.

K.
Wherever applicable, references herein to the masculine, feminine or neuter
shall equally apply to the neuter, feminine and masculine.  Furthermore,
wherever applicable in this Subscription Agreement, the singular shall include
the plural.  Except as otherwise provided herein, “Person” means any natural
person, firm or corporation or any group of individuals, firms or corporations,
or any other entities.

 
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L.
Time is of the essence of every provision of this Subscription Agreement that
specifies a time for performance.

M.
The parties agree to execute and deliver all such further documents, agreements
and instruments and take such other and further action as may be necessary or
appropriate to carry out the purposes and intent of this Subscription Agreement.

 
 
 
 
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7.  Ownership Information.  Please print here the total number of Units to be
purchased, and the exact name(s) in which the Interest(s) will be held; then
sign and date this document in the space below.

Total Units: __________ total purchase price $  _____________($1.00 per Unit)

Names:    The Douglas R. Sonderegger Revocable Trust Dated September 18, 1998
 

 
_____  Single Person
_____  Joint Tenants (with right of Survivorship)
_____  A Married Person as separate property
_____  A Partnership
_____  Other: ____________________________
_____ Husband and Wife, as community property
_____ Tenants in Common
 
_____ Corporation of other organization
_____ Trust

 
Social Security Number or Tax I.D.
Number:  ____________________________________________

Residence
Address:  ________________________________________________________________
Mailing Address (if
different):  ________________________________________________________

Email Address:  ______________________
___________________________________________

Phone Numbers:
Home:
Business
Cell

8.  Date and Signatures – Individual Investor.              Dated
____________________, 2008

Signature(s)                                                                  
       Purchaser Name (Print)

______________________________________        _____________________________________

______________________________________        _____________________________________
(Each co-owner or joint venture owner must sign – Names must be signed exactly
as listed under “Purchaser Name)

9.  Date and Signatures –Legal Entity (partnership, corp., etc).       Dated
___________________, 2008

Name of
Entity                                                                      Number
of Partners (if applicable)

______________________________________       
_____________________________________
Signature                                                                               
Person’s Name (Print) and Title/Position
  Of Person Signing on Behalf of Entity

__________________________________________

ACCEPTED:

INTERNATIONAL STEM CELL CORPORATION

By:                                                                                       
Dated:  ___________________, 2008

Signed ________________________________

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