Document:

Common Stock Purchase Agreement

 Exhibit 10.1 
 COMMON STOCK PURCHASE AGREEMENT 
 COMMON STOCK PURCHASE AGREEMENT
(the “Agreement”), dated as of December 9, 2010 by and between INTERNATIONAL STEM CELL CORPORATION, a Delaware corporation (the “Company”), and ASPIRE CAPITAL FUND, LLC, an Illinois limited liability company
(the “Buyer”). Capitalized terms used herein and not otherwise defined herein are defined in Section 10 hereof. 

WHEREAS: 

Subject to the terms and conditions set forth in this Agreement, the Company wishes to sell to the Buyer, and the Buyer wishes to buy from
the Company, up to Twenty-Five Million Dollars ($25,000,000) of the Company’s common stock, par value $0.001 per share (the “Common Stock”). The shares of Common Stock to be purchased hereunder are referred to herein as the
“Purchase Shares.” 
 NOW THEREFORE, the Company and the Buyer hereby agree as follows: 

 

	 	1.	PURCHASE OF COMMON STOCK. 

Subject to the terms and conditions set forth in this Agreement, the Company has the right to sell to the Buyer, and the Buyer has the
obligation to purchase from the Company, Purchase Shares as follows: 
 (a) Initial Purchase; Commencement of Purchases of
Common Stock. Immediately upon the execution of this Agreement, the Buyer shall purchase from the Company 333,333 Purchase Shares and upon receipt of such Purchase Shares pay to the Company as the purchase price therefor, via wire transfer, Five
Hundred Thousand Dollars ($500,000) (such purchase the “Initial Purchase” and such Purchase Shares are referred to herein as “Initial Purchase Shares”). Upon issuance and payment therefor as provided herein, such Initial Purchase
Shares shall be validly issued and fully paid and non-assessable. The Initial Purchase Shares shall be issued to the Buyer bearing the restrictive legend set forth in Section 4(e). Thereafter, the purchase and sale of Purchase Shares hereunder
shall occur from time to time upon written notices by the Company to the Buyer on the terms and conditions as set forth herein following the satisfaction of the conditions (the “Commencement”) as set forth in Sections 6 and 7 below (the
date of satisfaction of such conditions, the “Commencement Date”). 
 (b) The Company’s Right to Require
Purchases. Subject to the terms and conditions of this Agreement, on any given Business Day after the Commencement Date, the Company shall have the right but not the obligation to direct the Buyer by its delivery to the Buyer of a Purchase
Notice from time to time, and the Buyer thereupon shall have the obligation, to buy up to 100,000 Purchase Shares on any Business Day on which the Closing Sale Price is greater than $0.25 per share of Common Stock, up to 150,000 Purchase Shares on
any Business Day on which the Closing Sale Price is greater than $1.25 per share of Common Stock, up to 200,000 Purchase Shares on any Business Day on which the Closing Sale Price is greater than $1.75 per share of Common Stock, and up to 300,000
Purchase Shares on any Business Day on which the Closing Sale Price is greater than $2.25 per share of Common Stock (each such purchase, a “Purchase”) at the Purchase Price on the Purchase Date. The Company may deliver multiple Purchase
Notices to the Buyer from time to time so long as the most recent Purchase has been completed. The share amounts and respective price thresholds in the first sentence of this Section 1(b) shall be appropriately adjusted for any reorganization,
recapitalization, non-cash dividend, stock split, reverse stock split, or other similar transaction. 

 (c) Payment for Purchase Shares. The Buyer shall pay to the Company an amount equal
to the Purchase Amount with respect to such Purchase Shares as full payment for such Purchase Shares via wire transfer of immediately available funds on the same Business Day that the Buyer receives such Purchase Shares if they are received by the
Buyer before 1:00 p.m. eastern time or if received by the Buyer after 1:00 p.m. eastern time, the next Business Day. All payments made under this Agreement shall be made in lawful money of the United States of America via wire transfer of
immediately available funds to such account as the Company may from time to time designate by written notice in accordance with the provisions of this Agreement. Whenever any amount expressed to be due by the terms of this Agreement is due on any
day that is not a Business Day, the same shall instead be due on the next succeeding day that is a Business Day. 
 (d)
Purchase Price Floor. The Company and the Buyer shall not effect any sales under this Agreement on any Purchase Date where the Closing Sale Price is less than the Floor Price. “Floor Price” means $0.25 per share of Common Stock,
which shall be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction. 
 (e) Records of Purchases. The Buyer and the Company shall each maintain records showing the remaining Available Amount at any given time and the dates and Purchase Amounts for each purchase, or
shall use such other method reasonably satisfactory to the Buyer and the Company to reconcile the remaining Available Amount. 

(f) Taxes. The Company shall pay any and all transfer, stamp or similar taxes that may be payable with respect to the issuance and
delivery of any shares of Common Stock to the Buyer made under this Agreement. 
  

	 	2.	BUYER’S REPRESENTATIONS AND WARRANTIES. 

 The Buyer represents and warrants to the Company that as of the date hereof and as of the Commencement Date: 
 (a) Investment Purpose. The Buyer is entering into this Agreement and acquiring the Commitment Shares (as defined in Section 4(e) hereof) and the Initial Purchase Shares (the Purchase Shares
and the Commitment Shares are collectively referred to herein as the “Securities”), for its own account for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof; provided
however, by making the representations herein, the Buyer does not agree to hold any of the Securities for any minimum or other specific term. 
 (b) Accredited Investor Status. The Buyer is an “accredited investor” as that term is defined in Rule 501(a)(3) of Regulation D. 

(c) Reliance on Exemptions. The Buyer understands that the Securities are being offered and sold to it in reliance on specific
exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and the Buyer’s compliance with, the representations, warranties,
agreements, acknowledgments and understandings of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of the Buyer to acquire the Securities. 

  
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 (d) Information. The Buyer has been furnished with all materials relating to the
business, finances and operations of the Company and materials relating to the offer and sale of the Securities that have been reasonably requested by the Buyer, including, without limitation, the SEC Documents (as defined in Section 3(f)
hereof). The Buyer understands that its investment in the Securities involves a high degree of risk. The Buyer (i) is able to bear the economic risk of an investment in the Securities including a total loss, (ii) has such knowledge and
experience in financial and business matters that it is capable of evaluating the merits and risks of the proposed investment in the Securities and (iii) has had an opportunity to ask questions of and receive answers from the officers of the
Company concerning the financial condition and business of the Company and others matters related to an investment in the Securities. Neither such inquiries nor any other due diligence investigations conducted by the Buyer or its representatives
shall modify, amend or affect the Buyer’s right to rely on the Company’s representations and warranties contained in Section 3 below. The Buyer has sought such accounting, legal and tax advice as it has considered necessary to make an
informed investment decision with respect to its acquisition of the Securities. 
 (e) No Governmental Review. The Buyer
understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities nor
have such authorities passed upon or endorsed the merits of the offering of the Securities. 
 (f) Transfer or Sale. The
Buyer understands that except as provided in the Registration Rights Agreement (as defined in Section 4(a) hereof): (i) the Securities have not been and are not being registered under the 1933 Act or any state securities laws, and may not
be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder or (B) an exemption exists permitting such Securities to be sold, assigned or transferred without such registration; (ii) any sale of the
Securities made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of the Securities under circumstances in which the seller (or the person through whom the sale
is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and (iii) neither the Company nor any
other person is under any obligation to register the Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder. 

(g) Validity; Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Buyer and
is a valid and binding agreement of the Buyer enforceable against the Buyer in accordance with its terms, subject as to enforceability to general principles of equity and to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies. 

(h) Residency. The Buyer is a resident of the State of Illinois. 

(i) No Prior Short Selling. The Buyer represents and warrants to the Company that at no time prior to the date of this Agreement
has any of the Buyer, its agents, representatives or affiliates engaged in or effected, in any manner whatsoever, directly or indirectly, any (i) “short sale” (as such term is defined in Section 242.200 of Regulation SHO of the
Securities Exchange Act of 1934, as amended (the “1934 Act”)) of the Common Stock or (ii) hedging transaction, which establishes a net short position with respect to the Common Stock. 

  
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 (j) Disposition of Securities. In the event of any sales of Securities pursuant to
the Registration Statement, the Buyer will (i) effect such sales pursuant to the “Plan of Distribution” section of the prospectus included in the Registration Statement, and (ii) will comply with all applicable prospectus
delivery requirements. 
  

	 	3.	REPRESENTATIONS AND WARRANTIES OF THE COMPANY. 

 The Company represents and warrants to the Buyer that as of the date hereof and as of the Commencement Date: 
 (a) Organization and Qualification. The Company and its “Subsidiaries” (which for purposes of this Agreement means any entity in which the Company, directly or indirectly, owns 50% or
more of the voting stock or capital stock or other similar equity interests) are corporations or limited liability companies duly organized and validly existing in good standing under the laws of the jurisdiction in which they are incorporated or
organized, and have the requisite corporate or organizational power and authority to own their properties and to carry on their business as now being conducted. Each of the Company and its Subsidiaries is duly qualified as a foreign corporation or
limited liability company to do business and is in good standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be
so qualified or be in good standing could not reasonably be expected to have a Material Adverse Effect. As used in this Agreement, “Material Adverse Effect” means any material adverse effect on any of: (i) the business, properties,
assets, operations, results of operations or financial condition of the Company and its Subsidiaries, if any, taken as a whole, or (ii) the authority or ability of the Company to perform its obligations under the Transaction Documents (as
defined in Section 3(b) hereof). The Company has no Subsidiaries except as set forth on Schedule 3(a). 
 (b)
Authorization; Enforcement; Validity. (i) The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement, the Registration Rights Agreement and each of the other agreements
entered into by the parties on the Commencement Date and attached hereto as exhibits to this Agreement (collectively, the “Transaction Documents”), and to issue the Securities in accordance with the terms hereof and thereof, (ii) the
execution and delivery of the Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby, including without limitation, the issuance of the Commitment Shares and the reservation for issuance
and the issuance of the Purchase Shares issuable under this Agreement, have been duly authorized by the Company’s Board of Directors or duly authorized committee thereof, do not conflict with the Company’s Certificate of Incorporation or
Bylaws, and do not require further consent or authorization is required by the Company, its Board of Directors or its shareholders, (iii) this Agreement has been, and each other Transaction Document shall be on the Commencement Date, duly
executed and delivered by the Company and (iv) this Agreement constitutes, and each other Transaction Document upon its execution on behalf of the Company, shall constitute, the valid and binding obligations of the Company enforceable against
the Company in accordance with their terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting
generally, the enforcement of creditors’ rights and remedies. The Board of Directors of the Company or duly authorized committee thereof has approved the resolutions (the “Signing Resolutions”) substantially in the form as set forth
as Exhibit C-1 attached hereto to authorize this Agreement and the transactions contemplated hereby. The Signing Resolutions are valid, in full force and effect and have not been 

  
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modified or supplemented in any respect other than by the resolutions set forth in Exhibit C-2 attached hereto regarding the registration statement referred to in Section 4 hereof.
The Company has delivered to the Buyer a true and correct copy of a unanimous written consent adopting the Signing Resolutions executed by all of the members of the Board of Directors of the Company. 

(c) Capitalization. As of the date hereof, the authorized capital stock of the Company consists of (i) 200,000,000 shares of
Common Stock, of which as of the date hereof, 73,722,955 shares are issued and outstanding, none are held as treasury shares, 33,000,000 shares are reserved for future issuance pursuant to the Company’s stock incentive plans of which only
approximately 22,891,463 shares remain available for future option grants or stock awards and 13,782,678 shares are issuable and reserved for issuance pursuant to securities (other than stock options or equity based awards issued pursuant to the
Company’s stock incentive plans) exercisable or exchangeable for, or convertible into, shares of Common Stock and (ii) 20,000,000 shares of Preferred Stock, $0.001 par value with respective per share liquidation preferences set forth on
Schedule 3(c) , of which as of the date hereof the respective numbers of shares set forth on Schedule 3(c) are issued and outstanding. All of such outstanding shares have been, or upon issuance will be, validly issued and are fully paid and
nonassessable. Except as disclosed in Schedule 3(c), (i) no shares of the Company’s capital stock are subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by the Company,
(ii) there are no outstanding debt securities, (iii) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, any
shares of capital stock of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the
Company or any of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company or any of its
Subsidiaries, (iv) there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of their securities under the 1933 Act (except the Registration Rights Agreement),
(v) there are no outstanding securities or instruments of the Company or any of its Subsidiaries which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or
any of its Subsidiaries is or may become bound to redeem a security of the Company or any of its Subsidiaries, (vi) there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of
the Securities as described in this Agreement and (vii) the Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement. The Company has furnished or made available to
the Buyer true and correct copies of the Company’s Certificate of Incorporation, as amended and as in effect on the date hereof (the “Certificate of Incorporation”), and the Company’s Bylaws, as amended and as in effect on the
date hereof (the “Bylaws”), and summaries of the terms of all securities convertible into or exercisable for Common Stock, if any, and copies of any documents containing the material rights of the holders thereof in respect thereto.

 (d) Issuance of Securities. The Commitment Shares have been duly authorized and, upon issuance in accordance with the
terms hereof, the Commitment Shares shall be (i) validly issued, fully paid and non-assessable and (ii) free from all taxes, liens and charges with respect to the issue thereof. 20,000,000 shares of Common Stock have been duly authorized
and reserved for issuance upon purchase under this Agreement. Upon issuance and payment therefore in accordance with the terms and conditions of this Agreement, the Purchase Shares shall be validly issued, fully paid and nonassessable and free from
all taxes, liens and charges with respect to the issue thereof, with the holders being entitled to all rights accorded to a holder of Common Stock. 

  
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 (e) No Conflicts. Except as disclosed in Schedule 3(e), the execution, delivery and
performance of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the reservation for issuance and issuance of the Purchase Shares) will
not (i) result in a violation of the Certificate of Incorporation, any Certificate of Designations, Preferences and Rights of any outstanding series of preferred stock of the Company or the Bylaws or (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or
any of its Subsidiaries is a party, or result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and the rules and regulations of the Principal Market applicable to the
Company or any of its Subsidiaries) or by which any property or asset of the Company or any of its Subsidiaries is bound or affected, except in the case of conflicts, defaults, terminations, amendments, accelerations, cancellations and violations
under clause (ii), which could not reasonably be expected to result in a Material Adverse Effect. Except as disclosed in Schedule 3(e), neither the Company nor its Subsidiaries is in violation of any term of or in default under its Certificate of
Incorporation, any Certificate of Designation, Preferences and Rights of any outstanding series of preferred stock of the Company or Bylaws or their organizational charter or bylaws, respectively. Except as disclosed in Schedule 3(e), neither the
Company nor any of its Subsidiaries is in violation of any term of or is in default under any material contract, agreement, mortgage, indebtedness, indenture, instrument, judgment, decree or order or any statute, rule or regulation applicable to the
Company or its Subsidiaries, except for possible conflicts, defaults, terminations or amendments which could not reasonably be expected to have a Material Adverse Effect. The business of the Company and its Subsidiaries is not being conducted, and
shall not be conducted, in violation of any law, ordinance, or regulation of any governmental entity, except for possible violations, the sanctions for which either individually or in the aggregate could not reasonably be expected to have a Material
Adverse Effect. Except as specifically contemplated by this Agreement and as required under the 1933 Act or applicable state securities laws, the Company is not required to obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency or any regulatory or self-regulatory agency in order for it to execute, deliver or perform any of its obligations under or contemplated by the Transaction Documents in accordance with the terms
hereof or thereof. Except as disclosed in Schedule 3(e), all consents, authorizations, orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence shall be obtained or effected on or prior to the
Commencement Date. Except as disclosed in Schedule 3(e), since January 1, 2009 the Company has not received nor delivered any notices or correspondence from or to the Principal Market. The Principal Market has not commenced any delisting
proceedings against the Company. 
 (f) SEC Documents; Financial Statements. Except as disclosed in Schedule 3(f), since
January 1, 2009, the Company has filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the 1934 Act (all of the foregoing filed prior to the date
hereof and all exhibits included therein and financial statements and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the “SEC Documents”). As of their respective dates (except as they
have been correctly amended), the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC

  
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Documents, at the time they were filed with the SEC (except as they may have been properly amended), contained any untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. As of their respective dates (except as they have been properly amended), the financial statements
of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared
in accordance with generally accepted accounting principles, consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto or (ii) in the case of unaudited
interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its operations and
cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). Except as disclosed in Schedule 3(f) or for comment letters and notices of effectiveness in connection with previously filed
registration statements, the Company has received no notices or correspondence from the SEC since January 1, 2009. The SEC has not commenced any enforcement proceedings against the Company or any of its Subsidiaries. 

(g) Absence of Certain Changes. Except as disclosed in Schedule 3(g), since September 30, 2010, there has been no material
adverse change in the business, properties, operations, financial condition or results of operations of the Company or its Subsidiaries. For purposes of this Agreement, neither a decrease in cash or cash equivalents nor losses incurred in the
ordinary course of the Company’s business shall be deemed or considered a material adverse change. The Company has not taken any steps, and does not currently expect to take any steps, to seek protection pursuant to any Bankruptcy Law nor does
the Company or any of its Subsidiaries have any knowledge or reason to believe that its creditors intend to initiate involuntary bankruptcy or insolvency proceedings. The Company is financially solvent and is generally able to pay its debts as they
become due.  
 (h) Absence of Litigation. There is no action, suit, proceeding, inquiry or investigation before
or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its Subsidiaries, threatened against or affecting the Company, the Common Stock or any of the Company’s
Subsidiaries or any of the Company’s or the Company’s Subsidiaries’ officers or directors in their capacities as such, which could reasonably be expected to have a Material Adverse Effect. A description of each action, suit,
proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body which, as of the date of this Agreement, is pending or threatened in writing against or affecting the Company, the
Common Stock or any of the Company’s Subsidiaries or any of the Company’s or the Company’s Subsidiaries’ officers or directors in their capacities as such, is set forth in Schedule 3(h). 

(i) Acknowledgment Regarding Buyer’s Status. The Company acknowledges and agrees that the Buyer is acting solely in the
capacity of arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby. The Company further acknowledges that the Buyer is not acting as a financial advisor or fiduciary of the Company
(or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and thereby and any advice given by the Buyer or any of its representatives or agents in connection with the Transaction Documents and
the transactions contemplated hereby and thereby is merely incidental to the Buyer’s purchase of the Securities. The Company further represents to the Buyer that the Company’s decision to enter into the Transaction Documents has been based
solely on the independent evaluation by the Company and its representatives and advisors. 

  
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 (j) Intellectual Property Rights. The Company and its Subsidiaries own or possess
adequate rights or licenses to use all material trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and
rights (collectively, “Intellectual Property”) necessary to conduct their respective businesses as now conducted, except as set forth in Schedule 3(j) or to the extent that the failure to own, possess, license or otherwise hold adequate
rights to use Intellectual Property would not, individually or in the aggregate, have a Material Adverse Effect. Except as disclosed in Schedule 3(k), none of the Company’s material trademarks, trade names, service marks, service mark
registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals, government authorizations, trade secrets or other intellectual property rights have expired or terminated, or, by the terms and conditions thereof,
could expire or terminate within two years from the date of this Agreement. The Company and its Subsidiaries do not have any knowledge of any infringement by the Company or its Subsidiaries of any material trademark, trade name rights, patents,
patent rights, copyrights, inventions, licenses, service names, service marks, service mark registrations, trade secret or other similar rights of others, or of any such development of similar or identical trade secrets or technical information by
others and, except as set forth on Schedule 3(k), there is no claim, action or proceeding being made or brought against, or to the Company’s knowledge, being threatened against, the Company or its Subsidiaries regarding trademark, trade name,
patents, patent rights, invention, copyright, license, service names, service marks, service mark registrations, trade secret or other infringement, which could reasonably be expected to have a Material Adverse Effect. 

(k) Environmental Laws. The Company and its Subsidiaries (i) are in compliance with any and all applicable foreign, federal,
state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) have received all permits,
licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval, except where, in each of
the three foregoing clauses, the failure to so comply could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. 
 (l) Title. The Company and its Subsidiaries have good and marketable title in fee simple to all real property and good and marketable title to all personal property owned by them which is material
to the business of the Company and its Subsidiaries, in each case free and clear of all liens, encumbrances and defects except such as are described in Schedule 3(m) or such as do not materially affect the value of such property and do not interfere
with the use made and proposed to be made of such property by the Company and any of its Subsidiaries. Any real property and facilities held under lease by the Company and any of its Subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its Subsidiaries. 

(m) Insurance. The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against
such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has been refused any
insurance coverage sought or applied for and neither the Company nor any such Subsidiary has any reason to 

  
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believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not materially and adversely affect the condition, financial or otherwise, or the earnings, business or operations of the Company and its Subsidiaries, taken as a whole. 

(n) Regulatory Permits. The Company and its Subsidiaries possess all material certificates, authorizations and permits issued by
the appropriate federal, state or foreign regulatory authorities necessary to conduct their respective businesses as currently conducted, and neither the Company nor any such Subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or permit. 
 (o) Tax Status. The Company and each of
its Subsidiaries has made or filed all federal and state income and all other material tax returns, reports and declarations required by any jurisdiction to which it is subject (unless and only to the extent that the Company and each of its
Subsidiaries has set aside on its books provisions reasonably adequate for the payment of all unpaid and unreported taxes) and has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be
due on such returns, reports and declarations, except those being contested in good faith and has set aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports
or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any such claim. 

(p) Transactions With Affiliates. Except as set forth on Schedule 3(p) and other than the grant or exercise of stock options
disclosed on Schedule 3(c), none of the officers, directors, or employees of the Company is presently a party to any transaction with the Company or any of its Subsidiaries (other than for services as employees, officers and directors), including
any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to
the knowledge of the Company, any corporation, partnership, trust or other entity in which any officer, director, or any such employee has an interest or is an officer, director, trustee or partner. 

(q) Application of Takeover Protections. The Company and its board of directors have taken or will take prior to the Commencement
Date all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Certificate
of Incorporation or the laws of the state of its incorporation which is or could become applicable to the Buyer as a result of the transactions contemplated by this Agreement, including, without limitation, the Company’s issuance of the
Securities and the Buyer’s ownership of the Securities. 
  

	 	4.	COVENANTS. 

 (a) Filing
of Form 8-K and Registration Statement. The Company agrees that it shall, within the time required under the 1934 Act file a Report on Form 8-K disclosing this Agreement and the transaction contemplated hereby. The Company shall also file within
twenty (20) Business Days from the date hereof a new registration statement covering the sale of the Securities by the Buyer in accordance with the terms of the Registration Rights Agreement between the Company and the Buyer, dated as of the
date hereof (“Registration Rights Agreement”). 

  
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 (b) Blue Sky. The Company shall take such action, if any, as is reasonably necessary
in order to obtain an exemption for or to qualify (i) the initial sale of the Securities to the Buyer under this Agreement and (ii) any subsequent sale of the Securities by the Buyer, in each case, under applicable securities or “Blue
Sky” laws of the states of the United States in such states as is reasonably requested by the Buyer from time to time, and shall provide evidence of any such action so taken to the Buyer. 

(c) Listing. The Company shall promptly secure the listing of all of the Securities upon each national securities exchange and
automated quotation system, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance) and shall maintain, so long as any other shares of Common Stock shall be so listed, such listing of all such securities
from time to time issuable under the terms of the Transaction Documents. The Company shall maintain the Common Stock’s authorization for quotation on the Principal Market. Neither the Company nor any of its Subsidiaries shall take any action
that would be reasonably expected to result in the delisting or suspension of the Common Stock on the Principal Market, unless the Common Stock is immediately thereafter traded on the Nasdaq Stock Market, the NYSE Amex Equities, or the New York
Stock Exchange. The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section. 

(d) Limitation on Short Sales and Hedging Transactions. The Buyer agrees that beginning on the date of this Agreement and ending
on the date of termination of this Agreement as provided in Section 11(k), the Buyer and its agents, representatives and affiliates shall not in any manner whatsoever enter into or effect, directly or indirectly, any (i) “short
sale” (as such term is defined in Section 242.200 of Regulation SHO of the 1934 Act) of the Common Stock or (ii) hedging transaction, which establishes a net short position with respect to the Common Stock. 

(e) Issuance of Commitment Shares and Initial Purchase Shares. Immediately upon the execution of this Agreement, the Company shall
issue to the Buyer, as consideration for the Buyer entering into this Agreement, 500,000 shares of Common Stock (the “Commitment Shares”) and, pursuant to Section 1(a), the Buyer shall purchase the Initial Purchase Shares. The
Commitment Shares and Initial Purchase Shares shall be issued in certificated form and (subject to Section 5 hereof) shall bear the following restrictive legend: 
 THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, UNLESS SOLD
PURSUANT TO: (1) RULE 144 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (2) AN OPINION OF HOLDER’S COUNSEL, IN A CUSTOMARY FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS. 

(f) Due Diligence. The Buyer shall have the right, from time to time as the Buyer may reasonably deem appropriate, to perform
reasonable due diligence on the Company during normal business hours. The Company and its officers and employees shall provide information and reasonably cooperate with the Buyer in connection with any reasonable request by the Buyer related to the
Buyer’s 

  
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due diligence of the Company, including, but not limited to, any such request made by the Buyer in connection with (i) the filing of the registration statement described in Section 4(a)
hereof and (ii) the Commencement. Each party hereto agrees not to disclose any Confidential Information of the other party to any third party and shall not use the Confidential Information for any purpose other than in connection with, or in
furtherance of, the transactions contemplated hereby. Each party hereto acknowledges that the Confidential Information shall remain the property of the disclosing party and agrees that it shall take all reasonable measures to protect the secrecy of
any Confidential Information disclosed by the other party. 
  

	 	5.	TRANSFER AGENT INSTRUCTIONS. 

 Immediately upon the execution of this Agreement, the Company shall deliver to the Transfer Agent a letter in the form as set forth as Exhibit E attached hereto with respect to the issuance of the
Commitment Shares and the Initial Purchase Shares. On the Commencement Date, the Company shall cause any restrictive legend on the Commitment Shares and the Initial Purchase Shares to be removed upon surrender of the originally issued
certificate(s) for such shares. All of the Purchase Shares to be issued under this Agreement, other than the Initial Purchase Shares, shall be issued without any restrictive legend unless the Buyer expressly consents otherwise. The Company shall
issue irrevocable instructions to the Transfer Agent, and any subsequent transfer agent, to issue Purchase Shares in the name of the Buyer for the Purchase Shares (the “Irrevocable Transfer Agent Instructions”). The Company warrants to the
Buyer that no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5, will be given by the Company to the Transfer Agent with respect to the Purchase Shares and that the Commitment Shares and the
Purchase Shares shall otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement and the Registration Rights Agreement, subject to the provisions of Section 4(e) in the case of the
Commitment Shares and the Initial Purchase Shares. 
  

	 	6.	CONDITIONS TO THE COMPANY’S RIGHT TO COMMENCE SALES OF SHARES OF COMMON STOCK UNDER THIS AGREEMENT. 

The right of the Company hereunder to commence sales of the Purchase Shares is subject to the satisfaction of each of the following
conditions on or before the Commencement Date (the date that the Company may begin sales): 
 (a) The Buyer shall have executed
each of the Transaction Documents and delivered the same to the Company; 
 (b) The representations and warranties of the Buyer
shall be true and correct and the Buyer shall have performed, satisfied and complied in all material respects with the covenants and agreements required by this Agreement to be performed, satisfied or complied with by the Buyer at or prior to the
Commencement Date; and 
 (c) A registration statement covering the sale of the Securities shall have been declared effective
under the 1933 Act by the SEC and no stop order with respect to the registration statement shall be pending or threatened by the SEC. 

  
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	 	7.	CONDITIONS TO THE BUYER’S OBLIGATION TO MAKE PURCHASES OF SHARES OF COMMON STOCK. 

The obligation of the Buyer to buy Purchase Shares under this Agreement is subject to the satisfaction of each of the following conditions
on or before the Commencement Date (the date that the Company may begin sales) and once such conditions have been initially satisfied, there shall not be any ongoing obligation to satisfy such conditions after the Commencement has occurred:

 (a) The Company shall have executed each of the Transaction Documents and delivered the same to the Buyer; 

(b) The Company shall have issued to the Buyer the Commitment Shares and, in the event that the Buyer shall have surrendered the
originally issued certificate(s), shall have removed the restrictive transfer legend from the certificate representing the Commitment Shares and the Initial Purchase Shares; 
 (c) The Common Stock shall be authorized for quotation on the Principal Market, trading in the Common Stock shall not have been within the last 365 days suspended by the SEC or the Principal Market and
the Securities shall be approved for listing upon the Principal Market; 
 (d) The Buyer shall have received the opinions of the
Company’s legal counsel dated as of the Commencement Date in form reasonably acceptable to Buyer and its counsel; 
 (e)
The representations and warranties of the Company shall be true and correct in all material respects (except to the extent that any of such representations and warranties is already qualified as to materiality in Section 3 above, in which case,
such representations and warranties shall be true and correct without further qualification) as of the date when made and as of the Commencement Date as though made at that time (except for representations and warranties that speak as of a specific
date, which shall be true and correct in all material respects as of such specific date) and the Company shall have performed, satisfied and complied with the covenants, agreements and conditions required by the Transaction Documents to be
performed, satisfied or complied with by the Company at or prior to the Commencement Date. The Buyer shall have received a certificate, executed by the CEO, President or CFO of the Company, dated as of the Commencement Date, to the foregoing effect
in the form attached hereto as Exhibit B; 
 (f) The Board of Directors of the Company or a duly authorized
committee thereof shall have adopted resolutions in the form attached hereto as Exhibit C which shall be in full force and effect without any amendment or supplement thereto as of the Commencement Date; 

(g) As of the Commencement Date, the Company shall have reserved out of its authorized and unissued Common Stock, solely for the purpose
of effecting purchases of Purchase Shares hereunder, 20,000,000 shares of Common Stock; 
 (h) The Irrevocable Transfer Agent
Instructions, in form acceptable to the Buyer shall have been delivered to and acknowledged in writing by the Company and the Company’s Transfer Agent; 

  
 -12-

 (i) The Company shall have delivered to the Buyer a certificate evidencing the incorporation
and good standing of the Company in the State of Delaware issued by the Secretary of State of the State of Delaware as of a date within ten (10) Business Days of the Commencement Date; 

(j) The Company shall have delivered to the Buyer a certified copy of the Certificate of Incorporation, as certified by the Secretary of
State of the State of Delaware within ten (10) Business Days of the Commencement Date; 
 (k) The Company shall have
delivered to the Buyer a secretary’s certificate executed by the Secretary of the Company, dated as of the Commencement Date, in the form attached hereto as Exhibit D; 

(l) A registration statement covering the sale of all of the Commitment Shares and Purchase Shares shall have been declared effective
under the 1933 Act by the SEC and no stop order with respect to the registration statement shall be pending or threatened by the SEC. The Company shall have prepared and delivered to the Buyer a final and complete form of prospectus, dated and
current as of the Commencement Date, to be used by the Buyer in connection with any sales of any Securities, and to be filed by the Company one (1) Business Day after the Commencement Date. The Company shall have made all filings under all
applicable federal and state securities laws necessary to consummate the issuance of the Commitment Shares and the Purchase Shares pursuant to this Agreement in compliance with such laws; 

(m) No Event of Default has occurred, or any event which, after notice and/or lapse of time, would become an Event of Default has
occurred; 
 (n) On or prior to the Commencement Date, the Company shall take all necessary action, if any, and such actions as
reasonably requested by the Buyer, in order to render inapplicable any control share acquisition, business combination, shareholder rights plan or poison pill (including any distribution under a rights agreement) or other similar anti-takeover
provision under the Certificate of Incorporation or the laws of the state of its incorporation which is or could become applicable to the Buyer as a result of the transactions contemplated by this Agreement, including, without limitation, the
Company’s issuance of the Securities and the Buyer’s ownership of the Securities; and 
 (o) The Company shall have
provided the Buyer with the information reasonably requested by the Buyer in connection with its due diligence requests made prior to, or in connection with, the Commencement, in accordance with the terms of Section 4(f) hereof. 

 

	 	8.	INDEMNIFICATION. 

 In
consideration of the Buyer’s execution and delivery of the Transaction Documents and acquiring the Securities hereunder and in addition to all of the Company’s other obligations under the Transaction Documents, the Company shall defend,
protect, indemnify and hold harmless the Buyer and all of its affiliates, shareholders, officers, directors, and employees, and any of the foregoing person’s agents or other representatives (including, without limitation, those retained in
connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses
in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and 

  
 -13-

 
disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any
representation or warranty made by the Company in the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (b) any breach of any covenant, agreement or obligation of the Company contained in the
Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, or (c) any cause of action, suit or claim brought or made against such Indemnitee and arising out of or resulting from the execution,
delivery, performance or enforcement of the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, other than with respect to Indemnified Liabilities which directly and primarily result from (A) a
breach of any of the Buyer’s representations and warranties, covenants or agreements contained in this Agreement, or (B) the gross negligence or willful misconduct of the Indemnitee. To the extent that the foregoing undertaking by the
Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. 

 

	 	9.	EVENTS OF DEFAULT. 

 An
“Event of Default” shall be deemed to have occurred at any time as any of the following events occurs: 
 (a) while
any registration statement is required to be maintained effective pursuant to the terms of the Registration Rights Agreement, the effectiveness of such registration statement lapses for any reason (including, without limitation, the issuance of a
stop order) or is unavailable to the Buyer for sale of all of the Registrable Securities (as defined in the Registration Rights Agreement) in accordance with the terms of the Registration Rights Agreement, and such lapse or unavailability continues
for a period of ten (10) consecutive Business Days or for more than an aggregate of thirty (30) Business Days in any 365-day period; 
 (b) the suspension from trading or failure of the Common Stock to be listed on a Principal Market for a period of three (3) consecutive Business Days; 

(c) the delisting of the Common Stock from the Principal Market, provided, however, that the Common Stock is not immediately thereafter
trading on the New York Stock Exchange, the Nasdaq Global Market, the Nasdaq Global Select Market, the Nasdaq Capital Market or the NYSE Amex Equities; 
 (d) the failure for any reason by the Transfer Agent to issue Purchase Shares to the Buyer within five (5) Business Days after the applicable Purchase Date which the Buyer is entitled to receive;

 (e) the Company breaches any representation, warranty, covenant or other term or condition under any Transaction Document if
such breach could have a Material Adverse Effect and except, in the case of a breach of a covenant which is reasonably curable, only if such breach continues for a period of at least five (5) Business Days; 

(f) if any Person commences a proceeding against the Company pursuant to or within the meaning of any Bankruptcy Law ; 

  
 -14-

 (g) if the Company pursuant to or within the meaning of any Bankruptcy Law;
(A) commences a voluntary case, (B) consents to the entry of an order for relief against it in an involuntary case, (C) consents to the appointment of a Custodian of it or for all or substantially all of its property, (D) makes a
general assignment for the benefit of its creditors, (E) becomes insolvent, or (F) is generally unable to pay its debts as the same become due; or 
 (h) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (A) is for relief against the Company in an involuntary case, (B) appoints a Custodian of the
Company or for all or substantially all of its property, or (C) orders the liquidation of the Company or any Subsidiary. 
 In addition to
any other rights and remedies under applicable law and this Agreement, including the Buyer termination rights under Section 11(k) hereof, so long as an Event of Default has occurred and is continuing, or if any event which, after notice and/or
lapse of time, would become an Event of Default, has occurred and is continuing, or so long as the Closing Sale Price is below the Floor Price, the Buyer shall not be obligated to purchase any shares of Common Stock under this Agreement. If pursuant
to or within the meaning of any Bankruptcy Law, the Company commences a voluntary case or any Person commences a proceeding against the Company, a Custodian is appointed for the Company or for all or substantially all of its property, or the Company
makes a general assignment for the benefit of its creditors, (any of which would be an Event of Default as described in Sections 9(f), 9(g) and 9(h) hereof) this Agreement shall automatically terminate without any liability or payment to the Company
without further action or notice by any Person. No such termination of this Agreement under Section 11(k)(i) shall affect the Company’s or the Buyer’s obligations under this Agreement with respect to pending purchases and the Company
and the Buyer shall complete their respective obligations with respect to any pending purchases under this Agreement. 
  

	 	10.	CERTAIN DEFINED TERMS. 

For purposes of this Agreement, the following terms shall have the following meanings: 

(a) “1933 Act” means the Securities Act of 1933, as amended. 

(b) “Available Amount” means initially Twenty-Five Million Dollars ($25,000,000) in the aggregate which amount shall be reduced
by the Purchase Amount each time the Buyer purchases shares of Common Stock pursuant to Section 1 hereof. 
 (c)
“Bankruptcy Law” means Title 11, U.S. Code, or any similar federal or state law for the relief of debtors. 
 (d)
“Business Day” means any day on which the Principal Market is open for trading including any day on which the Principal Market is open for trading for a period of time less than the customary time. 

(e) “Closing Sale Price” means, the last closing trade price for the Common Stock on the Principal Market as reported by the
Principal Market. 
 (f) “Confidential Information” means any information disclosed by either party to the other
party, either directly or indirectly, in writing, orally or by inspection of tangible objects (including, 

  
 -15-

 
without limitation, documents, prototypes, samples, plant and equipment), which is designated as “Confidential,” “Proprietary” or some similar designation. Information
communicated orally shall be considered Confidential Information if such information is confirmed in writing as being Confidential Information within ten (10) Business Days after the initial disclosure. Confidential Information may also include
information disclosed to a disclosing party by third parties. Confidential Information shall not, however, include any information which (i) was publicly known and made generally available in the public domain prior to the time of disclosure by
the disclosing party; (ii) becomes publicly known and made generally available after disclosure by the disclosing party to the receiving party through no action or inaction of the receiving party; (iii) is already in the possession of the
receiving party at the time of disclosure by the disclosing party as shown by the receiving party’s files and records immediately prior to the time of disclosure; (iv) is obtained by the receiving party from a third party without a breach
of such third party’s obligations of confidentiality; (v) is independently developed by the receiving party without use of or reference to the disclosing party’s Confidential Information, as shown by documents and other competent
evidence in the receiving party’s possession; or (vi) is required by law to be disclosed by the receiving party, provided that the receiving party gives the disclosing party prompt written notice of such requirement prior to such
disclosure and assistance in obtaining an order protecting the information from public disclosure. 
 (g) “Custodian”
means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law. 
 (h) “Maturity Date”
means the date that is three (3) years from the Commencement Date. 
 (i) “Person” means an individual or entity
including any limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof. 

(j) “Principal Market” means the OTC Bulletin Board; provided however, that in the event the Company’s Common Stock is
ever listed or traded on the Nasdaq Global Market, the Nasdaq Global Select Market, the Nasdaq Capital Market, the New York Stock Exchange or the NYSE Amex Equities, then the “Principal Market” shall mean such other market or exchange on
which the Company’s Common Stock is then listed or traded. 
 (k) “Purchase Amount” means, with respect to any
particular purchase made hereunder, the portion of the Available Amount to be purchased by the Buyer pursuant to Section 1 hereof as set forth in a valid Purchase Notice which the Company delivers to the Buyer. 

(l) “Purchase Date” means with respect to any Purchase made hereunder, the Business Day of receipt by the Buyer of a valid
Purchase Notice that the Buyer is to buy Purchase Shares pursuant to Section 1 hereof. 
 (m) “Purchase Notice”
shall mean an irrevocable written notice from the Company to the Buyer directing the Buyer to buy Purchase Shares as specified by the Company therein at the applicable Purchase Price on the Purchase Date. 

(n) “Purchase Price” means the lower of the (A) the lowest Sale Price of the Common Stock on the Purchase Date and
(B) the arithmetic average of the three (3) lowest Closing Sale Prices for the Common Stock during the twelve (12) consecutive Business Days ending on the Business Day immediately preceding such Purchase Date (to be appropriately
adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction). 

  
 -16-

 (o) “Sale Price” means any trade price for the shares of Common Stock on the
Principal Market as reported by the Principal Market. 
 (p) “SEC” means the United States Securities and Exchange
Commission. 
 (q) “Transfer Agent” means the transfer agent of the Company as set forth in Section 11(f) hereof
or such other person who is then serving as the transfer agent for the Company in respect of the Common Stock. 
  

	 	11.	MISCELLANEOUS. 

 (a)
Governing Law; Jurisdiction; Jury Trial. The corporate laws of the State of Delaware shall govern all issues concerning the relative rights of the Company and its shareholders. All other questions concerning the construction, validity,
enforcement and interpretation of this Agreement and the other Transaction Documents shall be governed by the internal laws of the State of Illinois, without giving effect to any choice of law or conflict of law provision or rule (whether of the
State of Illinois or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Illinois. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts
sitting in the City of Chicago, for the adjudication of any dispute hereunder or under the other Transaction Documents or in connection herewith or therewith, or with any transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such
suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner
permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY. 
 (b) Counterparts. This Agreement may be executed in two or more identical counterparts, all
of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile signature shall be considered due execution and shall be
binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile signature. 
 (c) Headings. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement. 

(d) Severability. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction. 

  
 -17-

 (e) Entire Agreement. With the exception of the Mutual Nondisclosure Agreement
between the parties dated as of September 27, 2010, this Agreement and the Registration Rights Agreement supersede all other prior oral or written agreements between the Buyer, the Company, their affiliates and persons acting on their behalf
with respect to the matters discussed herein, and this Agreement, the other Transaction Documents and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and,
except as specifically set forth herein or therein, neither the Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. The Company acknowledges and agrees that is has not relied on, in any
manner whatsoever, any representations or statements, written or oral, other than as expressly set forth in this Agreement. 

(f) Notices. Any notices, consents or other communications required or permitted to be given under the terms of this Agreement
must be in writing and will be deemed to have been delivered: (i) upon receipt when delivered personally; (ii) upon receipt when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept
on file by the sending party); or (iii) one Business Day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such
communications shall be: 
 If to the Company: 
  

			
	International Stem Cell Corporation
	 2595 Jason Court
 Oceanside, CA 92056

	Telephone:	  	760-940-6383
	Facsimile:	  	760-940-6387
	Attention:	  	Chief Financial Officer

 With a copy to:

  

			
	DLA Piper LLP (US)
	4365 Executive Drive, Suite 1100
	San Diego, California 92121
	Telephone:	  	858-677-1400
	Facsimile:	  	858-677-1401
	Attention:	  	Douglas J. Rein, Esq.

 If to the Buyer:

  

			
	Aspire Capital Fund, LLC
	155 North Wacker Drive, Suite 1600
	Chicago, IL 60606
	Telephone:	  	312-658-0400
	Facsimile:	  	312-658-4005
	Attention:	  	Steven G. Martin

  
 -18-

 With a copy to: 

 

			
	O’Melveny & Myers LLP
	1625 Eye Street, NW
	Washington, DC 20006
	Telephone:	  	202-383-5418
	Facsimile:	  	202-383-5414
	Attention:	  	Martin P. Dunn, Esq.

 If to the Transfer
Agent: 
  

			
	Securities Transfer Corporation
	2591 Dallas Parkway, Suite 102
	Frisco, Texas 75304
	Facsimile:	  	469-633-0088
	Attention:	  	Marilyn Fox

 or at such other address and/or facsimile
number and/or to the attention of such other person as the recipient party has specified by written notice given to each other party one (1) Business Day prior to the effectiveness of such change. Written confirmation of receipt (A) given
by the recipient of such notice, consent or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine containing the time, date, and recipient facsimile number or (C) provided by a nationally
recognized overnight delivery service, shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above,
respectively. 
 (g) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties
and their respective successors and assigns. The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Buyer, including by merger or consolidation. The Buyer may not assign its rights
or obligations under this Agreement. 
 (h) No Third Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person. 
 (i) Publicity. The Buyer shall have the right to approve before issuance any press release, SEC filing or any other public disclosure made by or on behalf of the Company whatsoever with respect to,
in any manner, the Buyer, its purchases hereunder or any aspect of this Agreement or the transactions contemplated hereby; provided, however, that the Company shall be entitled, without the prior approval of the Buyer, to make any press release or
other public disclosure (including any filings with the SEC) with respect to such transactions as is required by applicable law and regulations so long as the Company and its counsel consult with the Buyer in connection with any such press release
or other public disclosure at least two (2) Business Days prior to its release. The Buyer must be provided with a copy thereof at least two (2) Business Days prior to any release or use by the Company thereof. The Company agrees and
acknowledges that its failure to fully comply with this provision constitutes a material adverse effect on its ability to perform its obligations under this Agreement. 
 (j) Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates,
instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby. 

  
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 (k) Termination. This Agreement may be terminated only as follows: 

(i) By the Buyer any time an Event of Default exists without any liability or payment to the Company. However, if pursuant
to or within the meaning of any Bankruptcy Law, the Company commences a voluntary case or any Person commences a proceeding against the Company, a Custodian is appointed for the Company or for all or substantially all of its property, or the Company
makes a general assignment for the benefit of its creditors, (any of which would be an Event of Default as described in Sections 9(f), 9(g) and 9(h) hereof) this Agreement shall automatically terminate without any liability or payment to the Company
without further action or notice by any Person. No such termination of this Agreement under this Section 11(k)(i) shall affect the Company’s or the Buyer’s obligations under this Agreement with respect to pending purchases and the
Company and the Buyer shall complete their respective obligations with respect to any pending purchases under this Agreement. 
 (ii) In the event that the Commencement shall not have occurred, the Company shall have the option to terminate this Agreement for any reason or for no reason without any liability whatsoever of any party
to any other party under this Agreement except as set forth in Section 11(k)(viii) hereof. 
 (iii) In the
event that the Commencement shall not have occurred on or before June 1, 2011, due to the failure to satisfy the conditions set forth in Sections 6 and 7 above with respect to the Commencement, any party shall have the option to terminate this
Agreement at the close of business on such date or thereafter without liability of any party to any other party except as set forth in Section 11(k)(viii) hereof; provided, however, that the right to terminate this Agreement under this
Section 11(k)(iii) shall not be available to any party if such failure to satisfy any of the conditions set forth in Sections 6 or 7 is the result of a breach of this Agreement by such party or the failure of any representation or warranty of
such party set forth in this Agreement to be true and correct. 
 (iv) At any time after the Commencement Date,
the Company shall have the option to terminate this Agreement for any reason or for no reason by delivering notice (a “Company Termination Notice”) to the Buyer electing to terminate this Agreement without any liability whatsoever of any
party to any other party under this Agreement except as set forth in Section 11(k)(viii) hereof. The Company Termination Notice shall not be effective until one (1) Business Day after it has been received by the Buyer. 

(v) This Agreement shall automatically terminate on the date that the Company sells and the Buyer purchases the full
Available Amount as provided herein, without any action or notice on the part of any party and without any liability whatsoever of any party to any other party under this Agreement except as set forth in Section 11(k)(viii) hereof. 

(vi) If by the Maturity Date for any reason or for no reason the full Available Amount under this Agreement has not been
purchased as provided for in Section 1 of this Agreement, this Agreement shall automatically terminate on the Maturity Date, without any action or notice on the part of any party and without any liability whatsoever of any party to any other
party under this Agreement except as set forth in Section 11(k)(viii) hereof. 

  
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 (vii) Except as set forth in Sections 11(k)(i) (in respect of an Event of
Default under Sections 9(f), 9(g) and 9(h)), 11(k)(v) and 11(k)(vi), any termination of this Agreement pursuant to this Section 11(k) shall be effected by written notice from the Company to the Buyer, or the Buyer to the Company, as the case
may be, setting forth the basis for the termination hereof. 
 (viii) The representations and warranties of the
Company and the Buyer contained in Sections 2, 3 and 5 hereof, the indemnification provisions set forth in Section 8 hereof and the agreements and covenants set forth in Section 11, shall survive the Commencement and any termination of
this Agreement. No termination of this Agreement shall affect the Company’s or the Buyer’s rights or obligations (i) under the Registration Rights Agreement which shall survive any such termination or (ii) under this Agreement
with respect to pending purchases and the Company and the Buyer shall complete their respective obligations with respect to any pending purchases under this Agreement. 
 (l) No Financial Advisor, Placement Agent, Broker or Finder. The Company represents and warrants to the Buyer that it has not engaged any financial advisor, placement agent, broker or finder in
connection with the transactions contemplated hereby. The Buyer represents and warrants to the Company that it has not engaged any financial advisor, placement agent, broker or finder in connection with the transactions contemplated hereby. The
Company shall be responsible for the payment of any fees or commissions, if any, of any financial advisor, placement agent, broker or finder engaged by the Company relating to or arising out of the transactions contemplated hereby. The Company shall
pay, and hold the Buyer harmless against, any liability, loss or expense (including, without limitation, attorneys’ fees and out of pocket expenses) arising in connection with any such claim. 

(m) No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against any party. 
 (n) Remedies, Other
Obligations, Breaches and Injunctive Relief. The Buyer’s remedies provided in this Agreement shall be cumulative and in addition to all other remedies available to the Buyer under this Agreement, at law or in equity (including a decree of
specific performance and/or other injunctive relief), no remedy of the Buyer contained herein shall be deemed a waiver of compliance with the provisions giving rise to such remedy and nothing herein shall limit the Buyer’s right to pursue
actual damages for any failure by the Company to comply with the terms of this Agreement. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer and that the remedy at law for any such
breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the Buyer shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the
necessity of showing economic loss and without any bond or other security being required. 
 (o) Failure or Indulgence Not
Waiver. No failure or delay in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof
or of any other right, power or privilege. 

*    *    *    *    * 

  
 -21-

 IN WITNESS WHEREOF, the Buyer and the Company have caused this Common Stock Purchase
Agreement to be duly executed as of the date first written above. 
  

			
	THE COMPANY:
	
	INTERNATIONAL STEM CELL CORPORATION
		
	By:	 	/s/ Ray Wood
	Name: Ray Wood
	Title: Chief Financial Officer
	
	 BUYER:

	
	ASPIRE CAPITAL FUND, LLC
	BY: ASPIRE CAPITAL PARTNERS, LLC
	BY: SGM HOLDINGS CORP.
		
	By:	 	/s/ Steven G. Martin
	Name: Steven G. Martin
	Title: President

  
 -22-

  

			
	 SCHEDULES

 

	Schedule 3(a)	  	Subsidiaries
	Schedule 3(c)	  	Capitalization
	Schedule 3(e)	  	Conflicts
	Schedule 3(f)	  	1934 Act Filings
	Schedule 3(g)	  	Material Changes
	Schedule 3(h)	  	Litigation
	Schedule 3(k)	  	Intellectual Property
	Schedule 3(m)	  	Liens
	Schedule 3(q)	  	Certain Transactions
	  
 EXHIBITS

 

	Exhibit A	  	[Reserved]
	Exhibit B	  	Form of Officer’s Certificate
	Exhibit C	  	Form of Resolutions of Board of Directors of the Company
	Exhibit D	  	Form of Secretary’s Certificate
	Exhibit E	  	Form of Letter to Transfer Agent

 DISCLOSURE SCHEDULES 
 The following schedules are provided in connection with the various representations and warranties contained in Section 3 of the Common Stock Purchase Agreement dated as of December 9, 2010,
(the “Agreement”) by and between International Stem Cell Corporation, a Delaware corporation (the “Company”) and Aspire Capital Fund, LLC, an Illinois limited liability company (the “Buyer”). These disclosure schedules
are an integral part of the Agreement. Any terms defined in the Agreement shall have the same meaning when used in these schedules, unless the context indicates otherwise. Any disclosure herein shall constitute a disclosure under other disclosure
schedules, where such disclosure is appropriate and reasonably apparent. 
 Schedule 3(a) – Subsidiaries 

International Stem Cell, Inc. a California corporation (“ISC California”), is a wholly owned subsidiary of the Company. ISC California owns all
of the equity interests of Lifeline Cell Technology, LLC and Lifeline Skincare, Inc. 
 Schedule 3(c) - Capitalization

 In connection with the sale of Series D Preferred Stock in December 2008, the Company entered into an Investor Rights Agreement (the
“Rights Agreement”) with X-Master, Inc., an affiliate of Andrey Semechkin and Ruslan Semechkin, who now serve as directors and executive officers of the Company. A copy of the Rights Agreement is filed as an exhibit to the Company’s
8-K filed on January 5, 2009. The Rights Agreement obligates the Company to provide notice of various securities issuances, including shares issued in private placement transactions, and grants X-Master participation rights with respect to
certain issuances and sales of common stock. X-Master has waived its rights under the Rights Agreement with respect to the transactions contemplated by the Agreement. 
 As set forth in the Certificates of Designation for the outstanding shares of Series A, Series B, Series C and Series D Preferred Stock, each of which is filed as an exhibit to the most recent Annual
Report on Form 10-K, those shares of preferred stock are convertible into shares of common stock. The following schedule sets forth the number of shares of preferred stock of each series outstanding and the respective per share liquidation
preferences of such series. 
  

							
	 Series
	  	Number of Shares Outstanding	  	Per Share Liquidation Preference	 
	Series A	  	500,000	  	$	1.00	* 
	Series B	  	300,000	  	$	1.00	  
	Series C	  	2,000,000	  	$	1.00	** 
	Series D	  	43	  	$	100,000	*** 

  

	*	Liquidation preference of Series A Preferred Stock increases 1% for every two months from January 1, 2008 

	**	Liquidation preference of Series C Preferred Stock increases by 1% for every two months from August 1, 2008 

	***	Liquidation preference of Series D Preferred Stock increases for any accrued but unpaid dividends 

As described in the first sentence of Section 3(c) of the Agreement, the Company has issued options under its stock option plans, and outside of its
stock option plans, that are exercisable for shares of common stock and has also issued numerous warrants in connection with previous financing transactions. All such instruments give the holders rights to acquire shares of common stock. 

 While the various series of preferred stock have certain anti-dilution protections, as set forth in their
respective Certificates of Designation, those rights are not triggered unless sales under the Purchase Agreement are made at less than $0.25 per share. The outstanding warrants issued as part of the Brookstreet transaction have an exercise price of
$0.56 per share, so the anti-dilution provisions of those instruments would be triggered in the event of sales of stock at less than $0.56 per share.  
  

	
	Schedule 3(e) - No Conflicts
	  
 Nothing to report.

 

	 Schedule 3(f) - 1934 Act Filings

 

	 Nothing to report.
  

	Schedule 3(g) - Absence of Certain Changes

The Company has signed a lease and is moving into new facilities in Walkersville, Maryland. The Company has also made arrangements for two new offices,
one for corporate headquarters and one for manufacturing facilities. 
  

	
	Schedule 3(h) - Litigation
	  
 Nothing to report.

 

	Schedule 3(j) - Intellectual Property Rights

The intellectual property rights held under licenses (which are filed as exhibits to the most recent Annual Report on Form 10-K) are subject to
termination in the event of specified defaults or termination of the respective agreements. 
  

	
	Schedule 3(m) - Title
	  
 Nothing to report.

 

	Schedule 3(p) - Transactions with Affiliates

The Company is a party to employment agreements with several executive officers. Those agreements are filed as exhibits to the Annual Report on Form 10-K
for the most recent fiscal year. The Company is also party to agreements or arrangements with its other employees for their employment. 

X-Master and Dr. Andrey Semechkin are holders of Series D Preferred Stock and receive dividend payments on those shares. 

The Board of Directors has approved entering into a transaction with Andrey Semechkin, the Company’s CEO, who is also a director and major
stockholder, to lease new corporate offices in a building being acquired by Dr. Semechkin. The terms of the lease are subject to review by the Audit Committee. The Company believes that the lease rate per square foot will be approximately the
same amount as it is currently paying for its facility in Oceanside, which the Company believes would be below market for rent at the new facility. 

 EXHIBIT A 

[Reserved] 

 EXHIBIT B 

FORM OF OFFICER’S CERTIFICATE 
 This Officer’s Certificate (“Certificate”) is being delivered pursuant to Section 7(e) of that certain Common Stock Purchase Agreement dated as of December 9, 2010
(“Common Stock Purchase Agreement”), by and between INTERNATIONAL STEM CELL CORPORATION, a Delaware corporation (the “Company”), and ASPIRE CAPITAL FUND, LLC (the “Buyer”). Terms used
herein and not otherwise defined shall have the meanings ascribed to them in the Common Stock Purchase Agreement. 
 The
undersigned,                     ,
                             of the Company, hereby certifies as follows: 

1. I am the
                     of the Company and make the statements contained in this Certificate; 

2. The representations and warranties of the Company are true and correct in all material respects (except to the extent
that any of such representations and warranties is already qualified as to materiality in Section 3 of the Common Stock Purchase Agreement, in which case, such representations and warranties are true and correct without further qualification)
as of the date when made and as of the Commencement Date as though made at that time (except for representations and warranties that speak as of a specific date); 

3. The Company has performed, satisfied and complied in all material respects with covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied with by the Company at or prior to the Commencement Date. 
 4. The Company has not taken any steps, and does not currently expect to take any steps, to seek protection pursuant to any Bankruptcy Law nor does the Company or any of its Subsidiaries have any
knowledge or reason to believe that its creditors intend to initiate involuntary bankruptcy or insolvency proceedings. The Company is financially solvent and is generally able to pay its debts as they become due. 

IN WITNESS WHEREOF, I have hereunder signed my name on this      day of
            . 
  

	
	                             
                   
	    Name:
	    Title:

 The
undersigned as Secretary of INTERNATIONAL STEM CELL CORPORATION, a Delaware corporation, hereby certifies that                      is
the duly elected, appointed, qualified and acting                      of
                     and that the signature appearing above is his genuine signature. 

	
	  

	Secretary

 EXHIBIT C-1 

FORM OF COMPANY RESOLUTIONS 
 FOR SIGNING PURCHASE AGREEMENT 
 WHEREAS, there has been presented to the
Board of Directors of the Corporation a draft of the Common Stock Purchase Agreement (the “Purchase Agreement”) by and between the Corporation and Aspire Capital Fund, LLC (“Aspire”), providing for the purchase by Aspire of up to
Twenty-Five Million Dollars ($25,000,000) of the Corporation’s common stock, par value $0.001 (the “Common Stock”); and 
 WHEREAS, after careful consideration of the Purchase Agreement, the documents incident thereto and other factors deemed relevant by the Board of Directors, the Board of Directors has determined that it is
advisable and in the best interests of the Corporation to engage in the transactions contemplated by the Purchase Agreement, including, but not limited to, the issuance of 500,000 shares of Common Stock to Aspire as a commitment fee (the
“Commitment Shares”) and the sale of shares of Common Stock to Aspire up to the available amount under the Purchase Agreement (the “Purchase Shares”). 
 Transaction Documents 
 NOW, THEREFORE, BE IT RESOLVED, that the
transactions described in the Purchase Agreement are hereby approved and the Chairman, Chief Executive Officer and Chief Financial Officer (the “Authorized Officers”) are severally authorized to execute and deliver the Purchase Agreement,
and any other agreements or documents contemplated thereby including, without limitation, a registration rights agreement (the “Registration Rights Agreement”) providing for the registration of the shares of the Company’s Common Stock
issuable in respect of the Purchase Agreement on behalf of the Corporation, with such amendments, changes, additions and deletions as the Authorized Officers may deem to be appropriate and approve on behalf of, the Corporation, such approval to be
conclusively evidenced by the signature of an Authorized Officer thereon; and 
 FURTHER RESOLVED, that the terms and provisions
of the Registration Rights Agreement by and among the Corporation and Aspire are hereby approved and the Authorized Officers are authorized to execute and deliver the Registration Rights Agreement (pursuant to the terms of the Purchase Agreement),
with such amendments, changes, additions and deletions as the Authorized Officer may deem appropriate and approve on behalf of, the Corporation, such approval to be conclusively evidenced by the signature of an Authorized Officer thereon; and

 FURTHER RESOLVED, that the terms and provisions of the Form of Transfer Agent Instructions (the “Instructions”) are
hereby approved and the Authorized Officers are authorized to execute and deliver the Instructions (pursuant to the terms of the Purchase Agreement), with such amendments, changes, additions and deletions as the Authorized Officers may deem
appropriate and approve on behalf of, the Corporation, such approval to be conclusively evidenced by the signature of an Authorized Officer thereon; and 

 Execution of Purchase Agreement 

FURTHER RESOLVED, that the Corporation be and it hereby is authorized to execute the Purchase Agreement providing for the purchase of
common stock of the Corporation having an aggregate value of up to $25,000,000; and 
 Issuance of Common Stock

 FURTHER RESOLVED, that the Corporation is hereby authorized to issue the Commitment Shares to Aspire Capital Fund,
LLC as Commitment Shares and that upon issuance of the Commitment Shares pursuant to the Purchase Agreement, the Commitment Shares shall be duly authorized, validly issued, fully paid and nonassessable with no personal liability attaching to the
ownership thereof; and 
 FURTHER RESOLVED, that the Corporation is hereby authorized to issue shares of Common Stock upon the
purchase of Purchase Shares up to the available amount under the Purchase Agreement in accordance with the terms of the Purchase Agreement and that, upon issuance of the Purchase Shares pursuant to the Purchase Agreement, the Purchase Shares will be
duly authorized, validly issued, fully paid and nonassessable with no personal liability attaching to the ownership thereof; and 
 FURTHER RESOLVED, that the Corporation shall initially reserve 20,000,000 shares of Common Stock for issuance as Purchase Shares under the Purchase Agreement. 

Approval of Actions 
 FURTHER RESOLVED, that, without limiting the foregoing, the Authorized Officers are, and each of them hereby is, authorized and directed to proceed on behalf of the Corporation and to take all such steps
as deemed necessary or appropriate, with the advice and assistance of counsel, to cause the Corporation to consummate the agreements referred to herein and to perform its obligations under such agreements; and 

FURTHER RESOLVED, that the Authorized Officers be, and each of them hereby is, authorized, empowered and directed on behalf of and in the
name of the Corporation, to take or cause to be taken all such further actions and to execute and deliver or cause to be executed and delivered all such further agreements, amendments, documents, certificates, reports, schedules, applications,
notices, letters and undertakings and to incur and pay all such fees and expenses as in their judgment shall be necessary, proper or desirable to carry into effect the purpose and intent of any and all of the foregoing resolutions, and that all
actions heretofore taken by any officer or director of the Corporation in connection with the transactions contemplated by the agreements described herein are hereby approved, ratified and confirmed in all respects. 

 EXHIBIT C-2 

FORM OF COMPANY RESOLUTIONS APPROVING REGISTRATION STATEMENT 

WHEREAS, there has been presented to the Board of Directors of the Corporation a Common Stock Purchase Agreement (the “Purchase
Agreement”) by and among the Corporation and Aspire Capital Fund, LLC (“Aspire”), providing for the purchase by Aspire of up to Twenty-five Million Dollars ($25,000,000) of the Corporation’s common stock, par value $0.001 (the
“Common Stock”); and 
 WHEREAS, after careful consideration of the Purchase Agreement, the documents incident thereto
and other factors deemed relevant by the Board of Directors, the Board of Directors has approved the Purchase Agreement and the transactions contemplated thereby and the Company has executed and delivered the Purchase Agreement to Aspire; and

 WHEREAS, in connection with the transactions contemplated pursuant to the Purchase Agreement, the Company has agreed to file
a registration statement with the Securities and Exchange Commission (the “Commission”) registering the Commitment Shares (as defined in the Purchase Agreement) and the Purchase Shares (as herein defined in the Purchase Agreement) and to
list the Commitment Shares and Purchase Shares on the OTC Bulletin Board; 
 WHEREAS, the management of the Corporation has
prepared an initial draft of a Registration Statement on Form S-1 (the “Registration Statement”) in order to register the sale of the Purchase Shares and the Commitment Shares (collectively, the “Securities”); and 

WHEREAS, the Board of Directors has determined to approve the Registration Statement and to authorize the appropriate officers of the
Corporation to take all such actions as they may deem appropriate to effect the offering. 
 NOW, THEREFORE, BE IT RESOLVED,
that the officers and directors of the Corporation be, and each of them hereby is, authorized and directed, with the assistance of counsel and accountants for the Corporation, to prepare, execute and file with the Commission the Registration
Statement, which Registration Statement shall be filed substantially in the form presented to the Board of Directors, with such changes therein as the Chief Executive Officer of the Corporation or any Vice President of the Corporation shall deem
desirable and in the best interest of the Corporation and its shareholders (such officer’s execution thereof including such changes shall be deemed to evidence conclusively such determination); and 

FURTHER RESOLVED, that the officers of the Corporation be, and each of them hereby is, authorized and directed, with the assistance of
counsel and accountants for the Corporation, to prepare, execute and file with the Commission all amendments, including post-effective amendments, and supplements to the Registration Statement, and all certificates, exhibits, schedules, documents
and other instruments relating to the Registration Statement, as such officers shall deem necessary or appropriate (such officer’s execution and filing thereof shall be deemed to evidence conclusively such determination); and 

 FURTHER RESOLVED, that the execution of the Registration Statement and of any amendments and
supplements thereto by the officers and directors of the Corporation be, and the same hereby is, specifically authorized either personally or by the Authorized Officers as such officer’s or director’s true and lawful attorneys-in-fact and
agents; and 
 FURTHER RESOLVED, that the Authorized Officers are hereby designated as “Agent for Service” of the
Corporation in connection with the Registration Statement and the filing thereof with the Commission, and the Authorized Officers hereby are authorized to receive communications and notices from the Commission with respect to the Registration
Statement; and 
 FURTHER RESOLVED, that the officers of the Corporation be, and each of them hereby is, authorized and directed
to pay all fees, costs and expenses that may be incurred by the Corporation in connection with the Registration Statement; and 

FURTHER RESOLVED, that it is desirable and in the best interest of the Corporation that the Securities be qualified or registered for
sale in various states; that the officers of the Corporation be, and each of them hereby is, authorized to determine the states in which appropriate action shall be taken to qualify or register for sale all or such part of the Securities as they may
deem advisable; that said officers be, and each of them hereby is, authorized to perform on behalf of the Corporation any and all such acts as they may deem necessary or advisable in order to comply with the applicable laws of any such states, and
in connection therewith to execute and file all requisite papers and documents, including, but not limited to, applications, reports, surety bonds, irrevocable consents, appointments of attorneys for service of process and resolutions; and the
execution by such officers of any such paper or document or the doing by them of any act in connection with the foregoing matters shall conclusively establish their authority therefor from the Corporation and the approval and ratification by the
Corporation of the papers and documents so executed and the actions so taken; and 
 FURTHER RESOLVED, that if, in any state
where the securities to be registered or qualified for sale to the public, or where the Corporation is to be registered in connection with the public offering of the Securities, a prescribed form of resolution or resolutions is required to be
adopted by the Board of Directors, each such resolution shall be deemed to have been and hereby is adopted, and the Secretary is hereby authorized to certify the adoption of all such resolutions as though such resolutions were now presented to and
adopted by the Board of Directors; and 
 FURTHER RESOLVED, that the officers of the Corporation with the assistance of counsel
be, and each of them hereby is, authorized and directed to take all necessary steps and do all other things necessary and appropriate to effect the listing of the Shares on the OTC Bulletin Board. 

Approval of Actions 
 FURTHER RESOLVED, that, without limiting the foregoing, the Authorized Officers are, and each of them hereby is, authorized and directed to proceed on behalf of the Corporation and to take all such steps
as are deemed necessary or appropriate, with the advice and assistance of counsel, to cause the Corporation to take all such action referred to herein and to perform its obligations incident to the registration, listing and sale of the Shares; and

 FURTHER RESOLVED, that the Authorized Officers be, and each of them hereby is, authorized, empowered and directed on behalf
of and in the name of the Corporation, to take or cause to be taken all such further actions and to execute and deliver or cause to be executed and delivered all such further 

 agreements, amendments, documents, certificates, reports, schedules, applications, notices, letters and
undertakings and to incur and pay all such fees and expenses as in their judgment shall be necessary, proper or desirable to carry into effect the purpose and intent of any and all of the foregoing resolutions, and that all actions heretofore taken
by any officer or director of the Corporation in connection with the transactions contemplated by the agreements described herein are hereby approved, ratified and confirmed in all respects. 
 . 

 EXHIBIT D 

FORM OF SECRETARY’S CERTIFICATE 
 This Secretary’s Certificate (“Certificate”) is being delivered pursuant to Section 7(k) of that certain Common Stock Purchase Agreement dated as of December 9, 2010 (“Common
Stock Purchase Agreement”), by and between INTERNATIONAL STEM CELL CORPORATION, a Delaware corporation (the “Company”) and ASPIRE CAPITAL FUND, LLC (the “Buyer”), pursuant to which the Company may sell to the
Buyer up to Twenty-Five Million Dollars ($25,000,000) of the Company’s Common Stock, par value $0.001 per share (the “Common Stock”). Terms used herein and not otherwise defined shall have the meanings ascribed to them in the Common
Stock Purchase Agreement. 
 The undersigned, Ray Wood, Secretary of the Company, hereby certifies as follows: 

1. I am the Secretary of the Company and make the statements contained in this Secretary’s Certificate. 

2. Attached hereto as Exhibit A and Exhibit B are true, correct and complete copies of the Company’s
bylaws (“Bylaws”) and Certificate of Incorporation (“Articles”), in each case, as amended through the date hereof, and no action has been taken by the Company, its directors, officers or shareholders, in contemplation of the
filing of any further amendment relating to or affecting the Bylaws or Articles. 
 3. Attached hereto as
Exhibit C are true, correct and complete copies of the resolutions duly adopted by the Board of Directors of the Company on
                            , at which a quorum was present and acting throughout. Such resolutions
have not been amended, modified or rescinded and remain in full force and effect and such resolutions are the only resolutions adopted by the Company’s Board of Directors, or any committee thereof, or the shareholders of the Company relating to
or affecting (i) the entering into and performance of the Common Stock Purchase Agreement, or the issuance, offering and sale of the Purchase Shares and the Commitment Shares and (ii) and the performance of the Company of its obligation
under the Transaction Documents as contemplated therein. 

 4. As of the date hereof, the authorized, issued and reserved capital stock of the Company is as set forth
on Exhibit D hereto. 
 IN WITNESS WHEREOF, I have hereunder signed my name on this
     day of                     . 

 

	
	
                        
                                         
       

	  Ray Wood, Secretary

 The undersigned as
                     of INTERNATIONAL STEM CELL CORPORATION, a Delaware corporation, hereby certifies that Ray Wood is the duly
elected, appointed, qualified and acting Secretary of INTERNATIONAL STEM CELL CORPORATION, and that the signature appearing above is his genuine signature. 

 

	
	
                        
                                         
   

 EXHIBIT E 

FORM OF LETTER TO THE TRANSFER AGENT FOR THE ISSUANCE OF THE COMMITMENTS SHARES AND INITIAL PURCHASE SHARES AT SIGNING OF THE PURCHASE
AGREEMENT 
 [COMPANY LETTERHEAD] 
 [DATE] 
 Securities Transfer Corporation 
 2591 Dallas Parkway, Suite 102 
 Frisco, Texas 75304 

Attn: Marilyn Fox 
 Re: Issuance of Common
Shares to Aspire Capital Fund, LLC 
 Ladies and Gentlemen: 
 On behalf of INTERNATIONAL STEM CELL CORPORATION, (the “Company”), you are hereby instructed to issue as soon as possible 833,333 shares of our common stock in the name of
Aspire Capital Fund, LLC. The share certificate should be dated December [8], 2010. I have included a true and correct copy of a unanimous written consent executed by all of the members of the Board of Directors of the Company adopting
resolutions approving the issuance of these shares. The shares should be issued subject to the following restrictive legend: 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE
STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS, UNLESS SOLD PURSUANT TO: (1) RULE 144 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (2) AN OPINION OF HOLDER’S COUNSEL, IN A CUSTOMARY FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID
ACT OR APPLICABLE STATE SECURITIES LAWS. 

 The share certificate should be sent as soon as possible via overnight mail to the following
address: 
 Aspire Capital Fund, LLC 
 155 North Wacker Drive, Suite 1600 
 Chicago, IL 60606 

Attention: Steven G. Martin 

Thank you very much for your help. Please call me at
                             if you have any questions or need anything further. 

 

	
	INTERNATIONAL STEM CELL CORPORATION
	
	
BY:                       
                                         
                    

	            [name]
	            [title]Registration Rights Agreement

 Exhibit 10.2 
 REGISTRATION RIGHTS AGREEMENT 
 REGISTRATION RIGHTS AGREEMENT (this
“Agreement”), dated as of December 9, 2010, by and between INTERNATIONAL STEM CELL CORPORATION, a Delaware corporation, (the “Company”), and ASPIRE CAPITAL FUND, LLC, an Illinois limited liability
company (together with it permitted assigns, the “Buyer”). Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Common Stock Purchase Agreement by and between the parties
hereto, dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the “Purchase Agreement”). 
 WHEREAS: 
 A. The Company has agreed, upon the terms and subject to the
conditions of the Purchase Agreement, to issue to the Buyer (i) up to Twenty-Five Million Dollars ($25,000,000) of the Company’s common stock, par value $0.001 per share (the “Common Stock”) (the “Purchase
Shares”), and (ii) such number of shares of Common Stock as is required pursuant to Section 4(e) of the Purchase Agreement (the “Commitment Shares”); and 

B. To induce the Buyer to enter into the Purchase Agreement, the Company has agreed to provide certain registration rights under the
Securities Act of 1933, as amended, and the rules and regulations there under, or any similar successor statute (collectively, the “1933 Act”), and applicable state securities laws. 

NOW, THEREFORE, in consideration of the promises and the mutual covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Buyer hereby agree as follows: 
  

	 	1.	DEFINITIONS. 

 As used in
this Agreement, the following terms shall have the following meanings: 
 a. “Investor” means the Buyer, any
transferee or assignee thereof to whom a Buyer assigns its rights under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 9 and any transferee or assignee thereof to whom a transferee
or assignee assigns its rights under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 9. 
 b. “Person” means any person or entity including any corporation, a limited liability company, an association, a partnership, an organization, a business, an individual, a governmental or
political subdivision thereof or a governmental agency. 
 c. “Register,” “registered,” and
“registration” refer to a registration effected by preparing and filing one or more registration statements of the Company in compliance with the 1933 Act and pursuant to Rule 415 under the 1933 Act or any successor rule providing
for offering securities on a continuous basis (“Rule 415”), and the declaration or ordering of effectiveness of such registration statement(s) by the United States Securities and Exchange Commission (the “SEC”).

 d. “Registrable Securities” means the Purchase Shares which have been, or
which may from time to time be, issued or issuable to the Investor upon purchases of the Available Amount under the Purchase Agreement (without regard to any limitation or restriction on purchases) and the Commitment Shares issued or issuable to the
Investor and any shares of capital stock issued or issuable with respect to the Purchase Shares, the Commitment Shares or the Purchase Agreement as a result of any stock split, stock dividend, recapitalization, exchange or similar event or
otherwise, without regard to any limitation on purchases under the Purchase Agreement. 
 e. “Registration
Statement” means the registration statement of the Company covering only the sale of the Registrable Securities. 
  

	 	2.	REGISTRATION. 

 a.
Mandatory Registration. The Company shall within ten (10) Business Days from the date hereof file with the SEC the Registration Statement. The Registration Statement shall register only the Registrable Securities and no other securities
of the Company. The Investor and its counsel shall have a reasonable opportunity to review and comment upon such Registration Statement or any amendment to such Registration Statement and any related prospectus prior to its filing with the SEC.
Investor shall furnish all information reasonably requested by the Company for inclusion therein. The Company shall use its reasonable best efforts to have the Registration Statement or any amendment declared effective by the SEC at the earliest
possible date. The Company shall use reasonable best efforts to keep the Registration Statement effective pursuant to Rule 415 promulgated under the 1933 Act and available for sales of all of the Registrable Securities at all times until the earlier
of (i) the date as of which the Investor may sell all of the Registrable Securities without restriction pursuant to Rule 144(k) promulgated under the 1933 Act (or successor thereto) or (ii) the date on which (A) the Investor shall
have sold all the Registrable Securities and no Available Amount remains under the Purchase Agreement (the “Registration Period”). The Registration Statement (including any amendments or supplements thereto and prospectuses
contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein, in light of the circumstances in which they were made, not
misleading. 
 b. Rule 424 Prospectus. The Company shall, as required by applicable securities regulations, from time to
time file with the SEC, pursuant to Rule 424 promulgated under the 1933 Act, a prospectus and prospectus supplements, if any, to be used in connection with sales of the Registrable Securities under the Registration Statement. The Investor and its
counsel shall have a reasonable opportunity to review and comment upon such prospectus prior to its filing with the SEC. The Investor shall use its reasonable best efforts to comment upon such prospectus within one (1) Business Day from the
date the Investor receives the final version of such prospectus. 
 c. Sufficient Number of Shares Registered. In the
event the number of shares available under the Registration Statement is insufficient to cover all of the Registrable Securities, the Company shall amend the Registration Statement or file a new registration statement (a “New Registration
Statement”), so as to cover all of such Registrable Securities as soon as practicable, but in any event not later than ten (10) Business Days after the necessity therefor arises. The Company shall use its reasonable best efforts to
cause such amendment and/or New Registration Statement to become effective as soon as practicable following the filing thereof. 

  
 2 

  

	 	3.	RELATED OBLIGATIONS. 

With respect to the Registration Statement and whenever any Registrable Securities are to be registered pursuant to Sections 2(a) and (c),
including on any New Registration Statement, the Company shall use its reasonable best efforts to effect the registration of the Registrable Securities in accordance with the intended method of disposition thereof and, pursuant thereto, the Company
shall have the following obligations: 
 a. The Company shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to any Registration Statement and the prospectus used in connection with such Registration Statement, as may be necessary to keep the Registration Statement or any New Registration Statement effective at
all times during the Registration Period, and, during such period, comply with the provisions of the 1933 Act with respect to the disposition of all Registrable Securities of the Company covered by the Registration Statement or any New Registration
Statement until such time as all of such Registrable Securities shall have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in such Registration Statement. 

b. The Company shall submit to the Investor for review and comment any disclosure in the Registration Statement or any New Registration
Statement and all amendments and supplements thereto (other than prospectus supplements that consist only of a copy of a filed Form 10-Q) containing information provided by the Investor for inclusion in such document and any descriptions or
disclosure regarding the Investor, the Purchase Agreement, including the transaction contemplated thereby, or this Agreement at least two (2) Business Days prior to their filing with the SEC, and not file any document in a form to which
Investor reasonably objects. Upon request of the Investor, the Company shall provide to the Investor all disclosure in the Registration Statement or any New Registration Statement and all amendments and supplements thereto (other than prospectus
supplements that consist only of a copy of a filed Form 10-Q) at least two (2) Business Days prior to their filing with the SEC, and not file any document in a form to which Investor reasonably and timely objects. The Investor shall use its
reasonable best efforts to comment upon the Registration Statement or any New Registration Statement and any amendments or supplements thereto within two (2) Business Days from the date the Investor receives the final version thereof. The
Company shall furnish to the Investor, without charge, any correspondence from the SEC or the staff of the SEC to the Company or its representatives relating to the Registration Statement or any New Registration Statement. 

c. Upon request of the Investor, the Company shall furnish to the Investor, (i) promptly after the same is prepared and filed with
the SEC, at least one copy of the Registration Statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits, (ii) upon the effectiveness of any
Registration Statement, a copy of the prospectus included in such Registration Statement and all amendments and supplements thereto (or such other number of copies as the Investor may reasonably request) and (iii) such other documents,
including copies of any preliminary or final prospectus, as the Investor may reasonably request from time to time in order to facilitate the disposition of the Registrable Securities owned by the Investor. 

d. The Company shall use reasonable best efforts to (i) register and qualify, unless an exemption from registration and
qualification is available, the Registrable Securities covered by a registration statement under such other securities or “blue sky” laws of such jurisdictions in the United 

  
 3 

 
States as the Investor reasonably requests, (ii) prepare and file in those jurisdictions, such amendments (including post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during the
Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, that the Company shall not be required in connection therewith or as
a condition thereto to (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(d), (y) subject itself to general taxation in any such jurisdiction, or (z) file a
general consent to service of process in any such jurisdiction. The Company shall promptly notify the Investor who holds Registrable Securities of the receipt by the Company of any notification with respect to the suspension of the registration or
qualification of any of the Registrable Securities for sale under the securities or “blue sky” laws of any jurisdiction in the United States or its receipt of actual notice of the initiation or threatening of any proceeding for such
purpose. 
 e. As promptly as practicable after becoming aware of such event or facts, the Company shall notify the Investor in
writing if the Company has determined that the prospectus included in any Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were made, not misleading, and promptly prepare a supplement or amendment to such registration statement to correct such untrue statement or omission, and, upon the
Investor’s request, deliver a copy of such supplement or amendment to the Investor. In providing this notice to the Investor, the Company shall not include any other information about the facts underlying the Company’s determination and
shall not in any way communicate any material nonpublic information about the Company or the Common Stock to the Investor. The Company shall also promptly notify the Investor in writing (i) when a prospectus or any prospectus supplement or
post-effective amendment has been filed, and when a Registration Statement or any post-effective amendment has become effective (notification of such effectiveness shall be delivered to the Investor by facsimile or e-mail on the same day of such
effectiveness), (ii) of any request by the SEC for amendments or supplements to any registration statement or related prospectus or related information, and (iii) of the Company’s reasonable determination that a post-effective
amendment to a Registration Statement would be appropriate. 
 f. The Company shall use its reasonable best efforts to prevent
the issuance of any stop order or other suspension of effectiveness of any Registration Statement, or the suspension of the qualification of any Registrable Securities for sale in any jurisdiction and, if such an order or suspension is issued, to
obtain the withdrawal of such order or suspension at the earliest practical time and to notify the Investor of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding for
such purpose. 
 g. The Company shall (i) cause all the Registrable Securities to be listed on each securities exchange on
which securities of the same class or series issued by the Company are then listed, if any, if the listing of such Registrable Securities is then permitted under the rules of such exchange, or (ii) secure designation and quotation of all the
Registrable Securities on the Principal Market. The Company shall pay all fees and expenses in connection with satisfying its obligation under this Section. 

  
 4 

 h. The Company shall cooperate with the Investor to facilitate the timely preparation and
delivery of certificates (not bearing any restrictive legend) representing the Registrable Securities to be offered pursuant to any Registration Statement and enable such certificates to be in such denominations or amounts as the Investor may
reasonably request and registered in such names as the Investor may request. 
 i. The Company shall at all times provide a
transfer agent and registrar with respect to its Common Stock. 
 j. If reasonably requested by the Investor, the Company shall
(i) immediately incorporate in a prospectus supplement or post-effective amendment such information as the Investor believes should be included therein relating to the sale and distribution of Registrable Securities, including, without
limitation, information with respect to the number of Registrable Securities being sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities; (ii) make all required filings of such prospectus
supplement or post-effective amendment as soon as notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and (iii) supplement or make amendments to any Registration Statement. 

k. The Company shall use its reasonable best efforts to cause the Registrable Securities covered by any Registration Statement to be
registered with or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition of such Registrable Securities. 
 l. Within one (1) Business Day after any Registration Statement is ordered effective by the SEC, the Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer
agent for such Registrable Securities (with copies to the Investor) confirmation that such Registration Statement has been declared effective by the SEC in the form attached hereto as Exhibit A. Thereafter, if reasonably requested by the
Buyer at any time, the Company shall require its counsel to deliver to the Buyer a written confirmation whether or not the effectiveness of such Registration Statement has lapsed at any time for any reason (including, without limitation, the
issuance of a stop order) and whether or not the registration statement is currently effective and available to the Buyer for sale of all of the Registrable Securities. 
 m. The Company shall take all other reasonable actions necessary to expedite and facilitate disposition by the Investor of Registrable Securities pursuant to any Registration Statement. 

 

	 	4.	OBLIGATIONS OF THE INVESTOR. 

 a. The Company shall notify the Investor in writing of the information the Company reasonably requires from the Investor in connection with any Registration Statement hereunder. The Investor shall furnish
to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it as shall be reasonably required to effect the registration of such Registrable
Securities and shall execute such documents in connection with such registration as the Company may reasonably request. 
 b.
The Investor agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of any Registration Statement hereunder. 

  
 5 

 c. The Investor agrees that, upon receipt of any notice from the Company of the happening of
any event or existence of facts of the kind described in Section 3(f) or any notice of the kind described in the first sentence of 3(e), the Investor will immediately discontinue disposition of Registrable Securities pursuant to any
registration statement(s) covering such Registrable Securities until the Investor’s receipt of the copies of the filed supplemented or amended prospectus contemplated by Section 3(f) or the first sentence of 3(e). In addition, upon receipt
of any notice from the Company of the kind described in the first sentence of Section 3(e), the Investor will immediately discontinue purchases or sales of any securities of the Company other than in compliance with applicable U.S. securities
laws. Notwithstanding anything to the contrary, the Company shall cause its transfer agent to promptly deliver shares of Common Stock without any restrictive legend in accordance with the terms of the Purchase Agreement in connection with any sale
of Registrable Securities with respect to which an Investor has entered into a contract for sale prior to the Investor’s receipt of a notice from the Company of the happening of any event of the kind described in Section 3(f) or the first
sentence of 3(e) and for which the Investor has not yet settled. 
  

	 	5.	EXPENSES OF REGISTRATION. 

All reasonable expenses, other than sales or brokerage commissions, incurred in connection with registrations, filings or qualifications
pursuant to Sections 2 and 3, including, without limitation, all registration, listing and qualifications fees, printers and accounting fees, and fees and disbursements of counsel for the Company, shall be paid by the Company. 

 

	 	6.	INDEMNIFICATION. 

 a. To
the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend the Investor, each Person, if any, who controls the Investor, the members, the directors, officers, partners, employees, agents,
representatives of the Investor and each Person, if any, who controls the Investor within the meaning of the 1933 Act or the Securities Exchange Act of 1934, as amended (the “1934 Act”) (each, an “Indemnified
Person”), against any losses, claims, damages, liabilities, judgments, fines, penalties, charges, costs, attorneys’ fees, amounts paid in settlement or expenses, joint or several, (collectively, “Claims”) incurred in
investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental, administrative or other regulatory agency, body or the SEC, whether pending
or threatened, whether or not an indemnified party is or may be a party thereto (“Indemnified Damages”), to which any of them may become subject insofar as such Claims (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in the Registration Statement, any New Registration Statement or any post-effective amendment thereto or in any filing made
in connection with the qualification of the offering under the securities or other “blue sky” laws of any jurisdiction in which Registrable Securities are offered (“Blue Sky Filing”), or the omission or alleged omission to
state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in the final prospectus (as amended or
supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in light of the circumstances under
which the statements therein were made, not misleading, (iii) any violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any other law, including, without limitation, any state securities law, or any rule or regulation
thereunder relating to the offer or sale of the Registrable Securities 

  
 6 

 
pursuant to the Registration Statement or any New Registration Statement or (iv) any material violation by the Company of this Agreement (the matters in the foregoing clauses
(i) through (iv) being, collectively, “Violations”). The Company shall reimburse each Indemnified Person promptly as such expenses are incurred and are due and payable, for any reasonable legal fees or other reasonable
expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a): (i) shall not apply to a Claim
by an Indemnified Person arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by such Indemnified Person expressly for use in connection with the preparation of
the Registration Statement, any New Registration Statement or any such amendment thereof or supplement thereto, if such prospectus was timely made available by the Company pursuant to Section 3(c) or Section 3(e); (ii) with respect to
any superceded prospectus, shall not inure to the benefit of any such person from whom the person asserting any such Claim purchased the Registrable Securities that are the subject thereof (or to the benefit of any person controlling such person) if
the untrue statement or omission of material fact contained in the superceded prospectus was corrected in the revised prospectus, as then amended or supplemented, if such revised prospectus was timely made available by the Company pursuant to
Section 3(c) or Section 3(e), and the Indemnified Person was promptly advised in writing not to use the incorrect prospectus prior to the use giving rise to a violation and such Indemnified Person, notwithstanding such advice, used it;
(iii) shall not be available to the extent such Claim is based on a failure of the Investor to deliver or to cause to be delivered the prospectus made available by the Company, if such prospectus was timely made available by the Company
pursuant to Section 3(c) or Section 3(e); and (iv) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably
withheld. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall survive the transfer of the Registrable Securities by the Investor pursuant to Section 9.

 b. In connection with the Registration Statement or any New Registration Statement, the Investor agrees to severally and not
jointly indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth in Section 6(a), the Company, each of its directors, each of its officers who signs the Registration Statement or any New Registration
Statement, each Person, if any, who controls the Company within the meaning of the 1933 Act or the 1934 Act (collectively and together with an Indemnified Person, an “Indemnified Party”), against any Claim or Indemnified Damages to
which any of them may become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or are based upon any Violation, in each case to the extent, and only to the extent, that such Violation
occurs in reliance upon and in conformity with written information about the Investor set forth on Exhibit B attached hereto and furnished to the Company by the Investor expressly for use in connection with such registration statement; and,
subject to Section 6(d), the Investor will reimburse any legal or other expenses reasonably incurred by them in connection with investigating or defending any such Claim; provided, however, that the indemnity agreement contained in this
Section 6(b) and the agreement with respect to contribution contained in Section 7 shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Investor, which consent
shall not be unreasonably withheld; provided, further, however, that the Investor shall be liable under this Section 6(b) for only that amount of a Claim or Indemnified Damages as does not exceed the net proceeds to the Investor as a result of
the sale of Registrable Securities pursuant to such registration statement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Indemnified Party and shall survive the transfer of the
Registrable Securities by the Investor pursuant to Section 9. 

  
 7 

 c. Promptly after receipt by an Indemnified Person or Indemnified Party under this
Section 6 of notice of the commencement of any action or proceeding (including any governmental action or proceeding) involving a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the Indemnified Party, as the case may be; provided,
however, that an Indemnified Person or Indemnified Party shall have the right to retain its own counsel with the fees and expenses to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel of the Indemnified Person or Indemnified Party and the indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnified Person or Indemnified Party and any other party
represented by such counsel in such proceeding. The Indemnified Party or Indemnified Person shall cooperate fully with the indemnifying party in connection with any negotiation or defense of any such action or claim by the indemnifying party and
shall furnish to the indemnifying party all information reasonably available to the Indemnified Party or Indemnified Person which relates to such action or claim. The indemnifying party shall keep the Indemnified Party or Indemnified Person fully
apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its written consent, provided,
however, that the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the consent of the Indemnified Party or Indemnified Person, consent to entry of any judgment or enter into any
settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party or Indemnified Person of a release from all liability in respect to such claim or litigation.
Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Indemnified Party or Indemnified Person with respect to all third parties, firms or corporations relating to the matter for which
indemnification has been made. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person or
Indemnified Party under this Section 6, except to the extent that the indemnifying party is prejudiced in its ability to defend such action. 
 d. The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or
Indemnified Damages are incurred. 
 e. The indemnity agreements contained herein shall be in addition to (i) any cause of
action or similar right of the Indemnified Party or Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to pursuant to the law. 

  
 8 

	 	7.	CONTRIBUTION. 

 To the
extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the
fullest extent permitted by law; provided, however, that: (i) no seller of Registrable Securities guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
seller of Registrable Securities who was not guilty of fraudulent misrepresentation; and (ii) contribution by any seller of Registrable Securities shall be limited in amount to the net amount of proceeds received by such seller from the sale of
such Registrable Securities. 
  

	 	8.	REPORTS AND DISCLOSURE UNDER THE SECURITIES ACTS. 

 With a view to making available to the Investor the benefits of Rule 144 promulgated under the 1933 Act or any other similar rule or regulation of the SEC that may at any time permit the Investor to sell
securities of the Company to the public without registration (“Rule 144”), the Company agrees, at the Company’s sole expense, to: 
 a. make and keep public information available, as those terms are understood and defined in Rule 144; 
 b. file with the SEC in a timely manner all reports and other documents required of the Company under the 1933 Act and the 1934 Act so long as the Company remains subject to such requirements and the
filing of such reports and other documents is required for the applicable provisions of Rule 144; and 
 c. furnish to the
Investor so long as the Investor owns Registrable Securities, promptly upon request, (i) a written statement by the Company that it has complied with the reporting and or disclosure provisions of Rule 144, the 1933 Act and the 1934 Act,
(ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested to permit the Investor to sell such
securities pursuant to Rule 144 without registration. 
 d. take such additional action as is requested by the Investor to
enable the Investor to sell the Registrable Securities pursuant to Rule 144, including, without limitation, delivering all such legal opinions, consents, certificates, resolutions and instructions to the Company’s Transfer Agent as may be
requested from time to time by the Investor and otherwise fully cooperate with Investor and Investor’s broker to effect such sale of securities pursuant to Rule 144. 
 The Company agrees that damages may be an inadequate remedy for any breach of the terms and provisions of this Section 8 and that Investor shall, whether or not it is pursuing any remedies at law, be
entitled to equitable relief in the form of a preliminary or permanent injunctions, without having to post any bond or other security, upon any breach or threatened breach of any such terms or provisions. 

 

	 	9.	ASSIGNMENT OF REGISTRATION RIGHTS. 

 The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Investor. The Investor may not assign its rights under this Agreement without
the written consent of the Company. 

  
 9 

	 	10.	AMENDMENT OF REGISTRATION RIGHTS. 

 Provisions of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent
of the Company and the Investor. 
  

	 	11.	MISCELLANEOUS. 

 a. A
Person is deemed to be a holder of Registrable Securities whenever such Person owns or is deemed to own of record such Registrable Securities. If the Company receives conflicting instructions, notices or elections from two or more Persons with
respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from the registered owner of such Registrable Securities. 

b. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file
by the sending party); or (iii) one (1) Business Day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such
communications shall be: 
 If to the Company: 
  

			
	International Stem Cell Corporation
	2595 Jason Court
	Oceanside, CA 92056
	Telephone:	  	760-940-6383
	Facsimile:	  	760-940-6387
	Attention:	  	Chief Financial Officer

 With a copy to:

  

			
	 DLA Piper LLP (US)

4365 Executive Drive, Suite 1100

San Diego, CA

	 Telephone:
	  	858-677-1400
	 Facsimile:
	  	858-677-1401
	 Attention:
	  	Douglas J. Rein, Esq.

 If to the Investor:

  

			
	 Aspire Capital Fund, LLC

	 155 North Wacker Drive, Suite 1600

Chicago, IL 60606

	 Telephone:
	  	312-658-0400
	 Facsimile:
	  	312-658-4005
	 Attention:
	  	Steven G. Martin

  
 10 

 With a copy to: 

 

			
	 O’Melveny & Myers LLP

	 1625 Eye Street, NW

	 Washington, DC 20006

	 Telephone:
	  	202-383-5418
	 Facsimile:
	  	202-383-5414
	 Attention:
	  	Martin P. Dunn, Esq.

 or at such other address and/or
facsimile number and/or to the attention of such other person as the recipient party has specified by written notice given to each other party three (3) Business Days prior to the effectiveness of such change. Written confirmation of receipt
(A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an image of
the first page of such transmission or (C) provided by a nationally recognized overnight delivery service, shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service
in accordance with clause (i), (ii) or (iii) above, respectively. 
 c. Failure of any party to exercise any right or
remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof. 
 d. The corporate laws of the State of Delaware shall govern all issues concerning the relative rights of the Company and its stockholders. All other questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of Illinois, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Illinois or any other
jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Illinois. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting the City of Chicago, for
the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. If any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY. 
 e. This Agreement and the Purchase Agreement constitute the entire agreement among the parties hereto with
respect to the subject matter hereof and thereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein. With the exception of the Mutual Nondisclosure Agreement between the
parties dated as of September 27, 2010, this Agreement and the Purchase Agreement supersede all prior agreements and understandings among the parties hereto with respect to the subject matter hereof and thereof. 

  
 11 

 f. Subject to the requirements of Section 9, this Agreement shall inure to the benefit
of and be binding upon the permitted successors and assigns of each of the parties hereto. 
 g. The headings in this Agreement
are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. 
 h. This Agreement may be
executed in identical counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement. This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile
transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement. 
 i. Each party shall
do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out
the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby. 
 j. The
language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and no rules of strict construction will be applied against any party. 

k. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for
the benefit of, nor may any provision hereof be enforced by, any other Person. 
 * * * * * * 

  
 12 

 IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be
duly executed as of day and year first above written. 
  

			
	THE COMPANY:
	
	INTERNATIONAL STEM CELL CORPORATION
		
	By:	 	/s/ Ray Wood
	Name: Ray Wood
	Title: Chief Financial Officer
	
	 BUYER:

	
	ASPIRE CAPITAL FUND, LLC
	BY: ASPIRE CAPITAL PARTNERS, LLC
	BY: SGM HOLDINGS CORP.
		
	 By:
	 	 /s/ Steven G. Martin

	Name: Steven G. Martin
	Title: President

  
 13 

 EXHIBIT A 

TO REGISTRATION RIGHTS AGREEMENT 
 FORM OF NOTICE OF EFFECTIVENESS 
 OF REGISTRATION STATEMENT

 [Date] 
 Securities Transfer
Corporation 
 2591 Dallas Parkway, Suite 102 
 Frisco, Texas 75304 
 Attn: Marilyn Fox 
 Re: INTERNATIONAL STEM CELL CORPORATION 
 Ladies and Gentlemen: 

We are counsel to INTERNATIONAL STEM CELL CORPORATION, a Delaware corporation (the “Company”), and have
represented the Company in connection with that certain Common Stock Purchase Agreement, dated as of December 9, 2010 (the “Purchase Agreement”), entered into by and between the Company and Aspire Capital Fund, LLC (the
“Buyer”) pursuant to which the Company has agreed to issue to the Buyer shares of the Company’s Common Stock, par value $0.001 per share (the “Common Stock”), in an amount up to Twenty-Five Million Dollars
($25,000,000) (the “Purchase Shares”), in accordance with the terms of the Purchase Agreement. In connection with the transactions contemplated by the Purchase Agreement, the Company has registered with the U.S. Securities and
Exchange Commission the following shares of Common Stock: 
  

	 	(1)	up to 20,000,000 shares of Common Stock with an aggregate value of up to $25,000,000 to be issued upon purchase from the Company by the Buyer from time to time (the
“Purchase Shares.”). 

  

	 	(2)	500,000 shares of Common Stock which have been issued to the Buyer as a commitment fee (the “Commitment Shares”). 

Pursuant to the Purchase Agreement, the Company also has entered into a Registration Rights Agreement, dated as of December 9, 2010, with the Buyer
(the “Registration Rights Agreement”) pursuant to which the Company agreed, among other things, to register the Purchase Shares and the Commitment Shares under the Securities Act of 1933, as amended (the “1933
Act”). In connection with the Company’s obligations under the Purchase Agreement and the Registration Rights Agreement, on December __, 2010, the Company filed a Registration Statement (File
No. 333-                ) (the “Registration Statement”) with the U.S. Securities and Exchange Commission (the “SEC”)
relating to the sale of the Purchase Shares and the Commitment Shares. Pursuant to the Purchase Agreement, the Buyer has agreed (i) to effect any sales under the Registration Statement of the Purchase Shares and the Commitment Shares pursuant
to the “Plan of Distribution” section of the prospectus included in the Registration Statement, and (ii) to comply with applicable prospectus delivery requirements in connection with any such sales. 

 In connection with the foregoing, we advise you that a member of the SEC’s staff has
advised us by telephone that the SEC has entered an order declaring the Registration Statement effective under the 1933 Act at          P.M. on
            , 20     and we have no knowledge, after telephonic inquiry of a member of the SEC’s staff, that any stop order suspending its
effectiveness has been issued or that any proceedings for that purpose are pending before, or threatened by, the SEC and the Purchase Shares and the Commitment Shares are available for sale under the 1933 Act pursuant to the Registration Statement
and may issued without any restrictive legend. 
  

			
	Very truly yours,
	DLA Piper LLP (US)
		
	By:	 	                             
                               
		 	Douglas J. Rein

  

	CC:	Aspire Capital Fund, LLC 

 EXHIBIT B 

TO REGISTRATION RIGHTS AGREEMENT 
 Information About The Investor Furnished To The Company By The Investor 

Expressly For Use In Connection With The Registration Statement 
 As of the date of the Purchase Agreement, Aspire Capital beneficially owned zero shares of common stock of the Company. Steven G. Martin, Erik J. Brown and Christos Komissopoulos, the principals of Aspire
Capital, are deemed to be beneficial owners of all of the shares of common stock owned by Aspire Capital. Messrs. Martin, Brown and Komissopoulos have shared voting and investment power over the shares being offered under the prospectus filed with
the SEC in connection with the transactions contemplated under the Purchase Agreement. Aspire Capital is not a licensed broker dealer or an affiliate of a licensed broker dealer. 
 Plan of Distribution 
 The common stock may be sold or distributed from time to time by the
selling stockholder directly to one or more purchasers or through brokers, dealers, or underwriters who may act solely as agents at market prices prevailing at the time of sale, at prices related to the prevailing market prices, at negotiated
prices, or at fixed prices, which may be changed. The sale of the common stock offered by this prospectus may be effected in one or more of the following methods: 
  

	 	•	 	 ordinary brokers’ transactions; 

  

	 	•	 	 transactions involving cross or block trades; 

  

	 	•	 	 through brokers, dealers, or underwriters who may act solely as agents; 

 

	 	•	 	 “at the market” into an existing market for the common stock; 

 

	 	•	 	 in other ways not involving market makers or established business markets, including direct sales to purchasers or sales effected through agents;

  

	 	•	 	 in privately negotiated transactions; or 

  

	 	•	 	 any combination of the foregoing. 

 In order to comply with the securities laws of certain states, if applicable, the shares may be sold only through registered or licensed brokers or dealers. In addition, in certain states, the shares may
not be sold unless they have been registered or qualified for sale in the state or an exemption from the registration or qualification requirement is available and complied with. 
 The selling stockholder may also sell shares of common stock under Rule 144 promulgated under the Securities Act, if available, rather than under this prospectus. In addition, the selling stockholder may
transfer the shares of common stock by other means not described in this prospectus. 

 Brokers, dealers, underwriters, or agents participating in the distribution of the shares as agents may
receive compensation in the form of commissions, discounts, or concessions from the selling stockholder and/or purchasers of the common stock for whom the broker-dealers may act as agent. Aspire Capital has informed us that each such broker-dealer
will receive commissions from Aspire Capital which will not exceed customary brokerage commissions. 
 The selling shareholder and its
affiliates have agreed not to engage in any direct or indirect short selling or hedging of our common stock during the term of the Purchase Agreement.

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