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Exhibit 10.2
 
FORM OF WARRANT CERTIFICATE

WARRANT TO PURCHASE UP TO
__________ SHARES OF COMMON STOCK
OF
INTERNATIONAL STEM CELL CORPORATION

THE SECURITIES REPRESENTED HEREBY AND THE UNDERLYING SHARES OF COMMON STOCK HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SALE OF SUCH SECURITIES UNDER SAID ACT OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.

This certifies that, for value received, _______________________________ (the
"Holder") is entitled to purchase from International Stem Cell Corporation (the
"Company"), and the Company promises and agrees to sell and issue to Holder, up
to _________ shares of Common Stock of the Company, at a per share price of
Fifty Cents ($0.50) (the "Warrant Price"), subject to adjustment as hereinafter
provided, at any time on and after the date of this Warrant and on or before
December 10, 2012. The Holder and all other persons acquiring similar Warrants
to purchase Common Stock from the Company are sometimes hereinafter referred to
collectively as the “Holders” and individually as a “Holder”).

This Warrant Certificate evidences the right to purchase shares of Common Stock
of the Company and is issued in accordance with and subject to the following
terms and conditions:

I.  THE WARRANTS

1.01  General.  The Warrants shall be numbered and registered on the books of
the Company when issued.  The Warrants shall be dated as of the date of
signature thereof on behalf of the Company either upon initial issuance or upon
division, exchange, substitution or transfer.

1.02  Transfer.  The Warrants shall be transferable only on the books of the
Company maintained at its principal executive office upon delivery thereof duly
endorsed by the Warrant holders or by their duly authorized attorney or
representative, or accompanied by proper evidence of succession, assignment or
authority to transfer.  Upon any registration to transfer, the Company shall
execute and deliver a new Warrant to the person entitled thereto.

1.03  Combination or Transfer of Warrants.  Any Warrant may be divided or
combined, upon request to the Company by the Holder of such Warrant, into a new
Warrant certificate or certificates evidencing the same aggregate number of
shares of Common Stock of the Company represented by the Warrant (“Warrant
Shares”) issuable thereunder. Unless the context indicates otherwise, the term
"Holder" shall include any transferee or transferees of any Warrant, and the
term "Warrants" shall include this Warrant and all other warrants evidenced by a
certificate or certificates issued upon division, exchange, substitution or
transfer.

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1.04   Validity of Warrants and Warrant Shares.  The Company represents and
warrants to the Holder that (i) this certificate representing the Warrant issued
to the Holder is in due and proper form, (ii) the Warrants and the Warrant
Shares have been duly authorized by all necessary corporate action on the part
of the Company, (iii) the Warrants (upon payment of the consideration therefor)
will be validly issued, fully paid and non-assessable, (iv) the Holder will
acquire valid title to such Warrants free and clear of any encumbrances, and (v)
the Warrant Shares issuable upon exercise of such Warrants have been duly and
validly reserved and upon issuance and upon payment of the exercise price
therefor will be duly and validly issued, fully paid and nonassessable.

1.05  Term.  Subject to the terms of this Warrant Certificate, each Holder shall
have the right, for the period commencing on the date on which the Warrants are
first issued by the Company and ending on the Termination Date (as hereinafter
defined), to purchase up to the number of Warrant Shares specified on the face
of the Warrant Certificate, subject to adjustment in accordance hereto, upon
surrender to the Company at its principal executive office of the certificate
evidencing the Warrant to be exercised, together with a written election to
exercise duly completed and signed, and upon payment to the Company of the
Warrant Price (as defined in and determined in accordance with the provisions of
this Article) for the number of Warrant Shares in respect of which the Warrant
is then exercised.  Payment of the aggregate Warrant Price shall be made by wire
transfer, in cash or by certified check.  "Termination Date" shall mean 5:00
p.m., Los Angeles time, on December 10, 2012.

1.06  Exercise of Warrants.

(a) Cash Exercise. Upon notice by any Holder to the Company and upon surrender
of the Warrant Certificate for the Warrants to be exercised and payment of such
Warrant Price, the Company shall issue and cause to be delivered, within five
(5) business days after payment is received by the Company, to or upon the
written order of such Holder and in such name or names as such Holder may
designate, a certificate or certificates for the number of full Warrant Shares
so purchased upon the exercise of such Warrants, together with payment in
respect of any fractional shares otherwise issuable upon such surrender.  Such
certificate or certificates shall be deemed to have been issued and any person
so designated to be named therein shall be deemed to have become a holder of
record of the Warrant Shares as of the date of the surrender of such Warrant and
payment of the Warrant Price, as aforesaid; provided, however, that if, at the
date of surrender of such Warrants and payment of the Warrant Price, the
transfer books for the Warrant Shares or other class of stock purchasable upon
the exercise of such Warrant shall be closed, the certificates for the Warrant
Shares in respect of which such Warrants are then exercised shall be issuable as
of the date on which such books shall next be opened (whether before or after
the Termination Date) and until such date the Company shall be under no duty to
deliver any certificate for such Warrant Shares; provided, further, that the
transfer books of record, unless otherwise required by law, shall not be closed
at any one time for a period longer than twenty (20) days.  The rights of
purchase represented by each Warrant shall be exercisable, at the election of
the Holder, either in full or from time to time in part and, in the event that a
certificate evidencing any Warrant is exercised in respect of less than all of
the Warrant Shares specified therein at any time prior to the date of expiration
of such Warrant, a new certificate evidencing the right to acquire the remaining
unacquired Warrant Shares will be promptly issued by the Company.

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(b) Cashless Exercise Right.  Notwithstanding the payment provisions set forth
above, the Holder may elect to convert Warrants into Warrant Shares (a “Cashless
Exercise Right”) by surrendering the Warrant Certificate for the subject
Warrants at the principal office of the Company and delivering to the Company
written notice of the Holder’s intention to exercise this Cashless Exercise
Right, which notice shall specify the number of Warrant Shares subject to this
Cashless Exercise Right (hereinafter, a “Cashless Exercise”).  Upon such
delivery, the Company shall issue to the Holder the number of Warrant Shares
equal to the result obtained by (a) subtracting B from A, (b) multiplying the
difference by C, and (c) dividing the product by A, as set forth in the
following equation:
 
X = (A - B) x C        where:
            A

 
X =
the number of Warrant Shares issuable upon net issuance exercise pursuant to the
provisions of this Section 1.06(b).

 
 
A =
the Fair Market Value (as hereinafter defined) of one Warrant Share on the date
of net issuance exercise.

 
 
B =
the Warrant Price.

 
 
C =
the number of Warrant Shares for which this Warrant is being exercised.

 
If the foregoing calculation results in a negative number, then no Warrant
Shares shall be issued upon net issuance exercise pursuant to this
Section 1.06(b).
 
(c) Definition of Fair Market Value. “Fair Market Value” shall be the closing
sale price for one share of the Company’s Common Stock on the business day
immediately prior to the date on which the Company receives written notice of
the Cashless Exercise, or if no sale occurred on such date, the average of the
bid and asked prices for one share of the Company’s Common Stock on such date.
 
1.07  Payment of Taxes. The Company shall pay all stock transfer taxes and
similar governmental charges that may be imposed with respect to the issuance of
Warrant Shares; provided, however, that the Company shall not be required to pay
any tax or other charge imposed in connection with any transfer of Warrants or
the issuance or delivery of certificates for Warrant Shares to a person or
entity other than a then existing Holder of the Warrant; provided, further, that
the Company shall not be required to pay any income or other similar tax levied
on any Holder of the Warrant.
 
1.08  Mutilated or Missing Warrant.  In case the certificate or certificates
evidencing any Warrant shall be mutilated, lost, stolen or destroyed, the
Company shall, at the request of the Holder and upon delivery by the Holder to
the Company of reasonably satisfactory proof thereof and (except in the case of
a mutilated certificate) an indemnity agreement satisfactory to the Company,
issue and deliver in exchange and substitution for and upon cancellation of the
mutilated certificate or certificates, or in lieu of and substitution for the
certificate or certificates lost, stolen or destroyed, a new Warrant certificate
or certificates of like tenor and representing an equivalent right or interest.

1.09  Reservation of Shares.  There has been reserved, and the Company shall at
all times keep reserved so long as the Warrants remain outstanding, out of its
authorized but unissued Common Stock a number of shares of Common Stock
sufficient to provide for the exercise of the rights of purchase represented by
the outstanding Warrants.

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1.10  Warrant Price.  The price per share (the "Warrant Price") at which Warrant
Shares shall be purchasable upon exercise of the Warrants shall be Fifty Cents
($0.50) per share, subject to further adjustment pursuant to this Article.

1.11  Adjustments of Warrant Shares and/or Warrant Price.  The number of Warrant
Shares purchasable upon the exercise of the Warrants and the Warrant Price
therefor shall be subject to adjustment as follows:

(a)            In case the Company shall (i) pay a dividend in shares of Common
Stock or make a distribution in shares of Common Stock, (ii) subdivide or split
its outstanding shares of Common Stock, (iii) combine in the form of a reverse
stock split or otherwise change its outstanding shares of Common Stock into a
smaller number of shares of Common Stock or (iv) issue, by reclassification of
its shares of Common Stock, other securities of the Company, the number of
Warrant Shares purchasable upon exercise of each Warrant immediately prior
thereto shall be adjusted so that the Holder holding such Warrant shall be
entitled to receive the kind and number of shares or other securities of the
Company which the Holder would have owned or have been entitled to receive after
the happening of any of the events described above had such Warrant been
exercised immediately prior to the happening of such event or any record date
with respect thereof.

(b)            In case the Company shall issue rights, options, warrants or
convertible securities to all or substantially all holders of its shares of
Common Stock, without any charge to such holders, entitling them to subscribe
for or purchase shares of Common Stock at a price per share which is lower at
the record date mentioned below than the Warrant Price, the number of Warrant
Shares thereafter purchasable upon the exercise of each Warrant shall be
determined by multiplying the number of Warrant Shares theretofore purchasable
upon the exercise of such Warrant by a fraction, of which the numerator shall be
the number of shares of Common Stock outstanding immediately prior to the
issuance of such rights, options or warrants plus the number of additional
shares of Common Stock offered for subscription or purchase to all or
substantially all holders of its shares of Common Stock, and of which the
denominator shall be the number of shares of Common Stock outstanding
immediately prior to the issuance of such rights, options or warrants plus the
number of shares which the aggregate offering price of the total number of
shares of Common Stock so offered would purchase at such Warrant Price. Such
adjustment shall be made whenever such rights, options or warrants are issued,
and shall become effective immediately after the record date for the
determination of stockholders entitled to receive such rights, options or
warrants; provided, however, that in no event shall the number of Warrant Shares
purchasable upon exercise of such Warrant be adjusted pursuant to the
computation provided in this subsection 1.11(b) to a number less than the number
of Warrant Shares purchasable immediately prior to such computation.

(c)            In case the Company shall distribute to all or substantially all
holders of its shares of Common Stock evidences of its indebtedness or assets
(excluding cash dividends or distributions out of earnings) or rights, options,
warrants or convertible securities containing the right to subscribe for or
purchase shares of Common Stock (excluding those referred to in paragraph (b)
above), then in each case the number of Warrant Shares thereafter purchasable
upon the exercise of each Warrant shall be determined by multiplying the number
of Warrant Shares theretofore purchasable upon exercise of such Warrant by a
fraction, of which the numerator shall be the Warrant Price on the date of such
distribution, and of which the denominator shall be such Warrant Price on such
date minus the then fair value of the portion of the assets or evidences of
indebtedness so distributed or such subscription rights, options, warrants or
convertible securities applicable to one share of Common Stock. Such adjustment
shall be made whenever any such distribution is made and shall become effective
on the date of distribution retroactive to the record date for the determination
of stockholders entitled to receive such distribution; provided, however, that
in no event shall the number of Warrant Shares purchasable upon exercise of such
Warrant be adjusted pursuant to the computation provided in this subsection
1.11(c) to a number less than the number of Warrant Shares purchasable
immediately prior to such computation.
 
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(d) No adjustment in the number of Warrant Shares purchasable hereunder shall be
required unless such adjustment would require an increase or decrease of at
least one percent in the number of Warrant Shares then purchasable upon the
exercise of the Warrants; provided, however, that any adjustments which by
reason of this subsection 1.11(d) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment.

(e) Whenever the number of Warrant Shares purchasable upon the exercise of any
Warrant is adjusted, as herein provided, the Warrant Price payable upon exercise
of such Warrant shall be adjusted by multiplying such Warrant Price immediately
prior to such adjustment by a fraction, of which the numerator shall be the
number of Warrant Shares purchasable upon the exercise of such Warrant
immediately prior to such adjustment, and of which the denominator shall be the
number of Warrant Shares so purchasable immediately thereafter.

(f)  If the Company shall issue, after the date of this Warrant (the “Issue
Date”), (i) not less than two hundred fifty thousand (250,000) shares of Common
Stock for a purchase price per share less than the Warrant Price in effect
immediately prior to such issuance (other than pursuant to the exercise or
conversion or options, warrants or rights outstanding as of the Issue Date), or
(ii) options, warrants or rights to purchase shares of Common Stock, or
convertible securities convertible into or exchangeable for shares of Common
Stock (such options, warrants, rights and convertible securities are hereinafter
referred to collectively as “Common Stock Rights”), which Common Stock Rights
are exercisable for or convertible into not less than two hundred fifty thousand
(250,000) shares of Common Stock at an exercise price or conversion rate per
share that is less than the Warrant Price in effect immediately prior to such
issuance, then, in either such event, the Warrant Price shall automatically be
adjusted to equal the purchase price of such shares or the exercise price or
conversion rate of the Common Stock Rights, as applicable.

(g)  Upon the occurrence of each adjustment or readjustment of the number of
Warrant Shares issuable upon exercise of the Warrants or the Warrant Price
pursuant to this Section 1.11, the Company at its expense shall promptly compute
such adjustment or readjustment and furnish to the Holder a certificate setting
forth such adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based.  The Company shall, upon the written
request at any time of any Holder, furnish or cause to be furnished to the
Holder a like certificate setting forth (i) such adjustments and readjustments,
(ii) the Warrant Price in effect at the time, and (iii) the number of Warrant
Shares and the amount, if any, of other property which at the time would be
received upon exercise of the Warrants.

(h)  For the purpose of this Section 1.11, the term "shares of Common Stock"
shall mean (i) the class of stock designated as the Common Stock of the Company
at the date of this Agreement or (ii) any other class of stock resulting from
successive changes or reclassifications of such shares of Common Stock.  In the
event that at any time, as a result of an adjustment made pursuant to this
Article II, the Holders shall become entitled to purchase any shares of the
Company other than shares of Common Stock, thereafter the number of such other
shares so purchasable upon exercise of the Warrants and the Warrant Price of
such shares shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to the
Warrant Shares contained in this Section 1.11.

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(i)  Upon the expiration without exercise of any rights, options, warrants or
conversion privileges for which an adjustment has been made pursuant to this
Section 1.11, the number of Warrant Shares purchasable upon exercise of each
Warrant and the Warrant Price, to the extent such Warrant has not been
exercised, shall, upon such expiration, be readjusted and shall thereafter be
such as they would have been had they been originally adjusted (or had the
original adjustment not been required, as the case may be) on the basis that (i)
the only shares of Common Stock so issued were the shares of Common Stock, if
any, actually issued or sold upon the exercise of such rights, options, warrants
or conversion rights and (ii) such shares of Common Stock, if any, were issued
or sold for the consideration actually received by the Company upon such
exercise plus the consideration, if any, actually received by the Company for
the issuance, sale or grant to all of such rights, option, warrants or
conversion rights whether or not exercise; provided, however, that no such
readjustment shall have the affect of increasing the Warrant Price by an amount
in excess of the amount of the adjustment initially made in respect of the
issuance, sale or grant of such rights, options, warrants or convertible rights.

1.12  No Adjustment for Dividends.  Except as provided in Section 1.11, no
adjustment in respect of any dividends shall be made during the term of the
Warrants or upon the exercise of the Warrants.

1.13  Rights upon Reclassification, Consolidation, Etc. in case of any
consolidation of the Company with, or merger of the Company into, another
corporation or in case of any sale or conveyance to another corporation of the
property of the Company as an entirety or substantially as an entirety, the
Company or such successor or purchasing corporation, as the case may be, shall
execute, and the Holders shall execute, an agreement that the Holders will have
the right thereafter upon payment of the Warrant Price in effect immediately
prior to such action to purchase upon exercise of the Warrants the kind and
amount of shares and other securities and property which they would have owned
or have been entitled to receive after the happening of such consolidation,
merger, sale or conveyance had the Warrants been exercised immediately prior to
such action or the record date therefor, whichever would be greater. Such
agreement shall provide for adjustments, which shall be as nearly equivalent as
may be practicable to the adjustments provided for herein.  The provisions of
this Section 1.13 shall similarly apply to successive consolidations, mergers,
sales or conveyances.

1.14  Statement on Warrants.  Irrespective of any adjustments in the Warrant
Price or the number or kind of securities purchasable upon the exercise of the
Warrants, the Warrant certificates theretofore or thereafter issued may continue
to express the same price and number and kind of shares as are stated in the
Warrants initially issuable pursuant hereto.

1.15  Fractional Interests.  The Company shall not be required to issue
fractional shares on the exercise of the Warrants.  In the event any fractional
shares are so issuable, the Company shall round such fraction down to the
nearest whole share.

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1.16  No Rights as Stockholder; Notices to Holders.  Nothing contained in this
Warrant shall be construed as conferring upon the Holders or their transferees
any rights whatsoever as stockholders of the Company by virtue of the ownership
of the Warrants, including the right to vote, receive dividends, consent or
receive notices as a stockholder in respect of any meeting of stockholders for
the election of directors of the Company or any other matter.  If, however, at
any time prior to the expiration of the Warrants and prior to their exercise,
any of the following events shall occur:

(a)  the Company shall declare any dividend payable in any securities upon any
class of its shares of capital stock or make any distribution (other than a cash
dividend) to the holders of any class of its capital stock;

(b)  the Company shall offer to the holders of any class of its shares of
capital stock any additional shares of capital stock or securities convertible
into shares of any class of capital stock or any right to subscribe thereto;

(c)  a dissolution, liquidation or winding up of the Company shall be proposed;
or

(d)  a consolidation of the Company with, or merger of the Company into, another
corporation, or a sale or conveyance to another corporation of the property of
the Company as an entirety or substantially as an entirety or any other
corporate reorganization in which the Company is the acquired party shall be
proposed;

then in any of said events, the Company shall give notice in writing of such
event to the Holders as provided by the provisions of this Agreement (i) at
least 10 days prior to the date fixed as a record date or the date of closing
the transfer books for the determination of the stockholders entitled to such
dividend, distribution or subscription rights, or for the determination of
stockholders entitled to vote on such proposed dissolution, liquidation or
winding up, and (ii) at least 10 days prior to the effective date or the closing
date, whichever is earlier, of such proposed merger, consolidation, sale,
conveyance or other reorganization.  Such notice shall specify such record date,
the date of closing the transfer books, and the effective date or the closing
date, as the case may be.

1.17             Authority of Board in Certain Events.  If any event occurs as
to which, in the good faith opinion of the Board of Directors of the Company,
the other provisions of this Article I are not strictly applicable or as
strictly applied would not fairly protect the purchase rights of the Warrant in
accordance with the essential intent and principles of such provisions, then the
Board shall have the authority to make an adjustment in the application of such
provisions, in accordance with principles of equity and fairness, in order to
accomplish the intent and principles of such provisions, provided that no such
adjustment may be to the detriment of the rights of the

II.  MISCELLANEOUS PROVISIONS

2.01             Survival of Representations, Warranties and
Agreements.  Notwithstanding any investigation conducted or notice or knowledge
obtained by or on behalf of any Holder, each representation and warranty of the
Company herein and each agreement or covenant of the Company herein which does
not by its own terms expire at an earlier time shall survive until the exercise
or expiration of the Warrants, and any claim for breach of any representation or
warranty in this Warrant must be brought within one (1) year after such exercise
or expiration.

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2.02  Governing Law.  THIS WARRANT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
CREATED HEREBY SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF CALIFORNIA
WITHOUT REGARD TO THE CONFLICT OF LAW RULES THEREOF.

2.03  Severability of Provisions.  If any provision of any portion of any
provision of this Warrant or the application of any such provision or any
portion thereof to any person or circumstance, shall be held invalid or
unenforceable for any reason, it shall be adjusted rather than voided, if
possible, to achieve the intent of the parties  to the extent possible.  In any
event, all other provisions of this Warrant shall be deemed valid and
enforceable to the extent possible.

2.04  Modification; Waiver.  No modification of or amendment to the terms of
this Warrant shall be valid unless in a writing signed by the Company and all
Holders referring specifically to this Agreement and stating the parties'
intention to modify or amend the same.  Any waiver of any term or condition of
this Warrant must be in a writing signed by the party or parties sought to be
charged with such waiver referring specifically to the term or condition to be
waived, and no such waiver shall be deemed to constitute the waiver of any other
breach of the same or of any other term or condition of this Warrant.

2.05  Gender.  The use of the masculine, feminine or neuter gender herein shall
be deemed to include the other genders.

IN WITNESS WHEREOF, International Stem Cell Corporation has caused this Warrant
to be duly executed on its behalf as of the ____ day of ______, 2008.

 
INTERNATIONAL STEM CELL CORPORATION
                     
By: ___________________________

 
 
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