Document:

Exhibit 10.1

SERIES B PREFERRED STOCK PURCHASE AGREEMENT

 

	  	
           THIS SERIES B PREFERRED STOCK PURCHASE AGREEMENT (the “Agreement”), made as of the last date executed below (the “Effective Date”), by and among IDO Security Inc. a Nevada corporation with a principal address of 7875 SW 40th Street, Suite 224, Miami Florida, 33155-3510 (“the “Company”), and Magdiel Rodriguez, an individual with an address of c/o 7875 SW 40th Street, Suite 224, Miami Florida, 33155-3510  (“Buyer”). Each of the Company and Buyer is a “Party” and together, are the “Parties.”

 

W I T N E S S E T H:

 

WHEREAS, the Company has authorized 6,600 shares of preferred stock (the “Preferred Stock”); and

 

WHEREAS, the Company has designated one hundred (100) shares of Preferred Stock as Series B Preferred Stock, par value $0.001 per share (the “Series B Preferred Stock”), having the rights, preferences, privileges, powers and restrictions set forth in the Certificate of Designation filed with the Department of State of the State of Nevada on or about September 30, 2013 and attached hereto as Exhibit A; and

 

WHEREAS, the Company desires to issue, sell and transfer, and Buyer desires to purchase and receive, one hundred (100) shares of Series B Preferred Stock (the “Purchased Shares”) subject to the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the premises set forth above and the mutual agreements, covenants and representations contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and subject to the terms and conditions hereof, the Parties, intending to be legally bound, hereby agree as follows:

 

1.     Agreement to Purchase and Sell; Consideration.  The Company hereby agrees to issue, sell and transfer to Buyer, and Buyer hereby agrees to purchase and receive from the Company, the Purchased Shares, free and clear of any and all liens, mortgages, security interests, encumbrances and other restrictions or limitations (other than restrictions on resales of the Purchased Shares under applicable federal or state securities laws, and the rules and regulations promulgated thereunder) (collectively, “Liens”), as consideration for the Buyer’s services rendered and to be rendered to the Company (the “Consideration”).

 

2.     Closing.  On or before September 27, 2013 (the “Closing Date”), the Parties shall perform the following:

  

(a)     Buyer shall provide Seller a duly authorized and validly executed copy of this Agreement;

 

(b)     Upon the closing of the purchase and sale (the “Closing”), the Company shall provide Buyer with (i) a duly authorized and validly executed copy of this Agreement and (ii) the stock certificate(s) representing the Purchased Shares, together with all documents necessary to effectuate the issuance and transfer of the Purchased Shares; and

 

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(c)     The Board of Directors of the Company (the “Board”) shall execute a resolution approving the terms of this Agreement.

 

3.     Transfer Agent.  Buyer agrees that Olde Monmouth Stock Transfer and Trust Co., Inc. (the “Transfer Agent”) shall have full power and authority to act on behalf of the Company in connection with the issuance, transfer, exchange, replacement and cancellation of all of the Company’s stock certificates.  The Company shall pay all fees due to the Transfer Agent.

 

4.     Representations and Warranties of the Company.  The Company hereby represents and warrants, for a period of twelve (12) months from the Effective Date, to Buyer that all of the statements in the following paragraphs of this Section 4 are true and complete as of the date hereof and shall be true and complete as of the Closing Date.

 

(a)     Due Incorporation; Good Standing.  The Company is duly organized and in good standing in the State of Nevada and in every state in which the Company is or should be authorized to do business, unless the failure to be so qualified does not have a material adverse effect on the Company.

 

(b)     Full Power and Authority. The Company has full corporate power and authority to enter into this Agreement and consummate the transactions contemplated hereby.

 

(c)     No Liens.  The Purchased Shares shall be free and clear of any and all Liens.

 

(d)     Valid Issuance. The Purchased Shares shall be, when issued, duly authorized, validly issued, fully paid and non-assessable.

 

(e)     Good Title.  Upon delivery to Buyer at the Closing of the stock certificate(s) representing the Purchased Shares, Buyer shall have good and valid title to the Purchased Shares.

 

(f)      No Conflicts.  The execution and performance of this Agreement will not constitute a breach of the Company’s Certificate of Incorporation or By-laws.

 

(g)     No Broker.  Neither the Company nor any of Representatives (as defined herein) has employed or engaged any broker or finder or incurred any liability for any brokerage fees, commissions or finders’ fees in connection with the transactions contemplated by this Agreement, and the Company hereby indemnifies Buyer against any Losses (as defined herein) arising from the breach of this Section.

 

5.     Representations and Warranties of Buyer. Buyer hereby represents and warrants to the Company that the statements in the following paragraphs of this Section 5 are all true and complete as of the date hereof and shall be true and complete as of the Closing Date.

 

(a)     Full Power and Authority.  Buyer has full power and authority to enter into this Agreement.

 

(b)     Exempt Transaction.  Buyer understands that the sale of the Series A Preferred Stock is intended to be exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), and exempt from registration or Qualification under any state law.

  

(c)     Restricted Securities.     Buyer understands that the Purchased Shares are characterized as “restricted securities” under the Securities Act inasmuch as they was acquired from a transaction that was not a public offering.

 

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(d)     Series B Preferred Stock.  The Series B Preferred Stock purchased by Buyer hereunder will be acquired for investment only for Buyer’s own account, not as a nominee or agent, and not with a view to the public resale or distribution thereof, and Buyer has no present intention of selling, granting any participation in, or otherwise distributing, the same.

 

(e)     No Oral Representations.  No oral or written representations have been made other than those stated in this Agreement. Buyer is not relying on any oral statements made by the Company or any of the Company’s Affiliates or their respective directors, officers, managers, members, partners, stockholders, employees, representatives, agents, executors or heirs, as applicable (collectively, the “Representatives”), as applicable, in purchasing the Series B Preferred Stock.  For purposes of this Agreement, “Affiliate” means, with respect to any Person, any other Person controlling, controlled by or under common control with such Person.  The term “control” as used in the preceding sentence means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether by contract or otherwise.  Further, for purposes of this Agreement, “Person” means any individual, partnership, corporation, association, joint stock company, trust, joint venture, unincorporated organization or governmental entity (or any department, agency or political subdivision thereof).

 

(f)      Information about the Company. Buyer has been given the opportunity to ask questions of, and receive answers from, the Company concerning the Company and the Series BPreferred Stock and any other matters pertaining to the transactions contemplated herein.

 

6.     Indemnification.

 

(a)     In consideration of this Agreement, the Company covenants and agrees that Buyer shall be indemnified and held harmless from and against any and all losses, damages, fees, costs, expenses, obligations and liabilities (collectively, the “Liabilities”) or actions, investigations, inquiries, arbitrations, claims or other governmental or administrative agency proceedings in respect thereof, including, without limitation, enforcement of this Agreement (collectively, the “Actions” and together with the Liabilities, the “Losses”) which are incurred as a result of the Company’s breach of any material representations, warranties and/or covenants set forth herein; provided that the breach is not the result of Buyer’s negligence or misconduct.  Without limiting the foregoing, Losses include, but are not limited to, all reasonable legal fees, court costs and other expenses incurred in connection with investigating, preparing, defending, paying, settling or compromising any suit in law or equity arising out of this Agreement.

 

(b)     In consideration of this Agreement, Buyer covenants and agrees, for itself and its Affiliates, that Buyer shall indemnify and hold harmless the Company and its Representatives from and against any and all Losses which are incurred as a result of Buyer or any of Buyer’s Representatives’ breach of this Agreement, including, but not limited to, the breach of any representations, warranties and/or covenants set forth herein.

 

7.     Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware applicable to contracts made and to be performed entirely within such State without giving effect to any choice or conflict of law provision that would cause the application of the laws of any other jurisdiction other than the State of Florida.

 

8.     Term / Survival.  The terms of this Agreement shall be effective as of the Effective Date and continue until such time as the obligations hereunder are fully satisfied; provided, however, that the terms, conditions and obligations of Sections 4, 5, 6, 7, 9, 12, 17, 18 and 19 of this Agreement and this Section 8 shall survive the termination of this Agreement.

 

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9.    Successors and Assigns.  The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns, or heirs and executors, as applicable, of the Parties.

 

10.  Counterparts.   This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same agreement.  A faxed or electronic copy of this Agreement shall be deemed an original.

 

11.  Headings.  The headings used in this Agreement are for convenience of reference only and shall not be deemed to limit, characterize or in any way affect the interpretation of any provision of this Agreement.

 

12.  Modifications and Waivers.  No change, modification or waiver of any provision of this Agreement shall be valid or binding unless it is in writing, dated subsequent to the Effective Date, and signed by all Parties. No waiver of any breach, term, condition or remedy of this Agreement by any Party shall constitute a subsequent waiver of the same or any other breach, term, condition or remedy.  All remedies, either under this Agreement, by law or otherwise afforded to a Party, shall be cumulative and not alternative.

 

13.  Severability.  If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision(s) shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision(s) were so excluded and shall be enforceable in accordance with its terms.

 

14.  Termination.  The Parties may not, except for a material breach or failure of a condition or requirement, terminate this Agreement.

 

15. 
Entire Agreement.   This Agreement constitutes the entire agreement and understanding of the Parties with
respect to the subject matter hereof and supersedes any and all prior negotiations, correspondence, agreements, understandings,
duties or obligations between the Parties with respect to the subject matter hereof, whether written or oral.

 

16.  Further Assurances.  From and after the date of this Agreement, upon the reasonable request of a Party, the other Party shall use its commercially reasonable best efforts to execute and deliver such instruments, documents or other writings as may be reasonably necessary or desirable to confirm and carry out and fully effectuate the intent and purposes of this Agreement.

 

17.  Notices. All notices or other communications required or permitted by this Agreement shall be in writing to the addresses set forth in the preamble to this Agreement (or to such other addresses as may be specified by a Party to the other Party pursuant to notice given by such Party in accordance with the provisions of this Section 17 and shall be deemed to have been duly received:

 

	
(a)  

	
if given by fax or email, when transmitted and the appropriate confirmation received, as applicable, if transmitted on a business day and during normal business hours of the recipient, and otherwise on the next business day following transmission;

 

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(b)  

	
if given by certified or registered mail, return receipt requested, postage prepaid, three business days after being deposited in the U.S. mail; and

 

	
(c)  

	
if given by courier, messenger or other means, when received or personally delivered.

 

18.   Insider Trading.  Buyer hereby certifies that she has not, nor through any of her Representatives or third parties, purchased or caused to be purchased in the public marketplace, any publicly traded shares of the Company.  Buyer further certifies he has not communicated the nature of the transactions contemplated by the Agreement, is not aware of any disclosure of non-public information concerning said transactions, and has not, is not and will not be a party to any insider trading of any shares of the Company.

 

19.   Binding Arbitration.  In the event of any dispute, claim, question or disagreement arising from or relating to this Agreement or the breach thereof, the Parties shall use their commercially reasonable best efforts to settle the dispute, claim, question or disagreement. To this effect, they shall consult and negotiate with each other in good faith and, recognizing their mutual interests, attempt to reach a reasonably just and equitable solution satisfactory to all Parties. If they do not reach such a solution within a period of sixty (60) calendar days, then, upon notice by a Party to the other Party, all disputes, claims, questions or disagreements shall be settled by arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules, including the Optional Rules for Emergency Measures of Protection, and judgment on any award rendered by the arbitrator(s) shall be binding and may be entered in any court having jurisdiction thereof.

 

[Signature Page Follows]

 

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In Witness Whereof, the Parties have executed this Agreement as of the last date written below.

 

	BUYER	 
	 	 	 
	MAGDIEL RODRIGUEZ	 
	 	 	 
	 	 	 
	By: 	
/s/ Magdiel Rodriguez

	 
	 	
Magdiel Rodriguez

	 
	 	 	 
	 	 	 
	Date:   September 27, 2013	 
	 	 	 
	 	 	 
	COMPANY	 
	 	 	 
	IDO SECURITY INC.	 
	 	 	 
	 	 	 
	By: 	/s/ John Mitola 	
  

	 
	 	
John Mitola

	 
	 	
Director

	 
	 	 	 
	Date:   September 27, 2013	 

 

6EX-4.1

 Exhibit 4.1 

Form of Warrant 

STEMCELLS, INC. 

WARRANT TO PURCHASE COMMON STOCK 

Date of Issuance: October     , 2013 
  

					
		  	VOID AFTER October [—], 2018	  	
		  	  
	  	

 THIS WARRANT TO PURCHASE COMMON STOCK (the “Warrant”) certifies that, for value
received,                , or permitted registered assigns (the “Holder”), is entitled, upon the terms and subject to the limitations on exercise and
the conditions hereinafter set forth, at any time on or after the Date of Issuance and on or prior to the close of business on the fifth anniversary of the Date of Issuance (the “Termination Date”) but not thereafter, to subscribe
for and purchase at the Exercise Price (defined below) from StemCells, Inc., a Delaware corporation (the “Company”), up to [                ] shares of
the common stock of the Company, par value $0.01 per share (the “Common Stock”). This warrant is one of a series of warrants issued by the Company as of the date hereof (individually a “Warrant”; collectively,
“Company Warrants”). 
 1. DEFINITIONS. As used herein, the following terms shall have the following
meanings: 
 (a) “Exercise Period” shall mean the period commencing with the date occurring immediately on the date
hereof and ending five years from the date hereof, unless sooner terminated as provided below. 
 (b) “Exercise Price”
shall mean $1.80 per share, subject to adjustment pursuant to Section 4 below. 
 (c) “Exercise Shares”
shall mean the shares of Common Stock issuable upon exercise of this Warrant. 
 (d) “Trading Day” shall mean
(i) any day on which the Common Stock is listed or quoted and traded on its primary Trading Market, (ii) if the Common Stock is not then listed or quoted and traded on any eligible market (meaning any of the NYSE, AMEX or NASDAQ), then a
day on which trading occurs on the OTC Bulletin Board (or any successor thereto), or (iii) if trading does not occur on the OTC Bulletin Board (or any successor thereto), any business day. 

2. EXERCISE OF WARRANT. 

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

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

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

The Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Exercise Shares
available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date the final Notice of Exercise is delivered to the
Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Exercise Shares available hereunder shall have the effect of lowering the outstanding number of Exercise Shares purchasable hereunder in an amount
equal to the applicable number of Exercise Shares purchased. The Holder and the Company shall maintain records showing the number of Exercise Shares purchased and the date of such purchases. The Holder and any assignee, by acceptance of this
Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Exercise Shares hereunder, the number of Exercise Shares available for purchase hereunder at any given time may be less
than the amount stated on the face hereof. 
 Certificates for shares purchased hereunder shall be transmitted by the transfer agent of
the Company to the Holder by crediting the account of the Holder’s prime broker with the Depository Trust Company through its Deposits and Withdrawal at Custodian (DWAC) system if the Company is a participant in such system, and otherwise by
physical delivery to the address specified by the Holder in the Notice of Exercise by the date that is three (3) Trading Days after the latest of (i) the delivery to the Company of the Notice of Exercise, (ii) surrender of this
Warrant and (iii) payment of the aggregate Exercise Price as set forth above (such date, the “Exercise Share Delivery Date”). This Warrant shall be deemed to have been exercised on the date the Exercise Price is received by the
Company. The Exercise Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date this Warrant has
been exercised by payment to the Company of the Exercise Price. 
 Notwithstanding the foregoing, the Company shall not be required to make
the payments set forth herein in the case of uncertificated Exercise Shares if the Holder fails to timely file a request with the depository trust company to receive such uncertificated Exercise Shares. 

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

 Notwithstanding the foregoing, if the Company fails to cause the transfer agent to transmit to
the Holder a certificate or the certificates representing the Exercise Shares pursuant to an exercise on or before the Exercise Share Delivery Date, then the Holder will have the right to rescind such Notice of Exercise. Nothing herein shall limit a
Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver a
certificate pursuant to the terms hereof. 
 2.2 NET EXERCISE. If during the Exercise Period, the issuance of the Exercise
Shares to the Holder is not covered by the registration statement on Form S-3 (File No. 33-170300) or any other effective registration statement under the Securities Act of 1933, as amended, and the fair market value of one share of the Common
Stock is greater than the Exercise Price (at the date of calculation as set forth below), the Company shall be permitted to satisfy its obligation to issue the shares to be issued on exercise of this Warrant by issuing to the Holder, and the Holder
shall be permitted to exercise all or part of this Warrant by electing to receive, shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled), in lieu of paying the Exercise Price in immediately available
funds. Upon delivery of a properly endorsed Notice of Exercise, the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: 

X = Y (A–B) 

    A 
  

			
	Where X =	 	the number of shares of Common Stock to be issued to the Holder
		
	Y =	 	the number of shares of Common Stock for which the Warrant is then being exercised
		
	A =	 	the fair market value of one share of the Company’s Common Stock (at the date of such calculation)
		
	B =	 	Exercise Price in effect at the time of exercise

 For purposes of the above calculation, the “fair market value” of one share of Common Stock shall
mean (i) the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Market or other trading market where such security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting
service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the ten
(10) consecutive trading days immediately preceding such date, or (ii) if the NASDAQ Capital Market is not the principal trading market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the
principal trading market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the

 
foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so
reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value shall be as determined by the Board
of Directors of the Company in the exercise of its good faith judgment. 
 2.3 ISSUANCE OF NEW WARRANTS. Upon any partial
exercise of this Warrant, the Company, at its expense, will forthwith and, in any event within five Trading Days, issue and deliver to the Holder a new warrant or warrants of like tenor, registered in the name of the Holder, exercisable, in the
aggregate, for the balance of the number of shares of Common Stock remaining available for purchase under this Warrant. 

2.4 EXERCISE LIMITATIONS; HOLDER’S RESTRICTIONS. A Holder shall not have the right to exercise any portion of this
Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise, such Holder (together with such Holder’s affiliates) would beneficially own in excess of 4.99% of the number of
shares of the Common Stock outstanding immediately after giving effect to such issuance. For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by such Holder and its affiliates shall include the number of
shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination of such sentence is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (A) exercise of the
remaining, nonexercised portion of this Warrant beneficially owned by such Holder or any of its affiliates and (B) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without
limitation, any other shares of Common Stock or Warrants) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by such Holder or any of its affiliates. Except as set forth in the preceding
sentence, for purposes of this Section 2.4, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act, it being acknowledged by a Holder that the Company is not representing to such Holder that
such calculation is in compliance with Section 13(d) of the Exchange Act and such Holder is solely responsible for any schedules or other filings required to be filed under the Exchange Act. To the extent that the limitation contained in this
Section 2.4 applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by such Holder) and of which a portion of this Warrant is exercisable shall be in the sole discretion of a Holder, and
the submission of a Notice of Exercise shall be deemed to be each Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by such Holder) and of which portion of this Warrant is exercisable, in each
case subject to such aggregate percentage limitation, and the Company shall be entitled to rely on the Holder’s determination and shall have no obligation to verify or confirm the accuracy of such determination. For purposes of this
Section 2.4, in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company’s most recent Form 10-Q or Form 10-K, as the
case may be, (y) a more recent public announcement by the Company or (z) any other notice by the Company or the Company’s Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request
of a Holder, the Company shall within two Trading Days confirm orally and in writing to such Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common

 
Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by such Holder or its affiliates since the date as of which such
number of outstanding shares of Common Stock was reported. The provisions of this Section 2.4 may be waived by such Holder, at the election of such Holder, upon not less than 61 days’ prior notice to the Company, and the provisions
of this Section 2.4 shall continue to apply until such 61st day (or such later date, as determined by such Holder, as may be specified in such notice of waiver). 

3. COVENANTS OF THE COMPANY. 

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

The Company further covenants and agrees that the Company will at all times during the Exercise Period, have authorized and reserved, free
from preemptive rights, a sufficient number of shares of Common Stock to provide for the exercise of the rights represented by this Warrant. If at any time during the Exercise Period the number of authorized but unissued shares of Common Stock shall
not be sufficient to permit exercise of this Warrant, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be
sufficient for such purposes. 
 3.2 NO IMPAIRMENT. The Company will not, by amendment of its Certificate of Incorporation or
through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed
hereunder by the Company, and will at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may be necessary or appropriate in order to protect the exercise rights of the
Holder against impairment. 
 3.3 NOTICES OF RECORD DATE AND CERTAIN OTHER EVENTS. In the event of any taking by the Company of a
record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, the Company shall provide to the Holder, at least ten (10) days prior to the
date on which any such record is to be taken for the purpose of such dividend or distribution, a notice specifying such date. In the event of any voluntary dissolution, liquidation or winding up of the Company, the Company shall provide to the
Holder, at least ten (10) days prior to the date of the occurrence of any such event, a notice specifying such date. In the event the Company authorizes or approves, enters into any agreement contemplating, or solicits stockholder approval for
any Fundamental Transaction, as defined in Section 6 herein, the Company shall provide to the Holder, at least ten (10) days prior to the date of the occurrence of such Fundamental Transaction, a notice specifying such date.
Notwithstanding the foregoing, the failure to deliver such notice or any defect therein shall not affect the validity of the corporate action required to be described in such notice. 

 4. ADJUSTMENT OF EXERCISE PRICE AND EXERCISE SHARES. 

(a) If the Company, at any time while this Warrant is outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes
a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into a larger number of shares, or (iii) combines outstanding shares of Common Stock into a smaller
number of shares, then in each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately before such event and of which the denominator shall be the
number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for the determination of stockholders entitled to
receive such dividend or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination. The form of this Warrant need not
be changed because of any adjustment in the number of Exercise Shares subject to this Warrant. 
 (b) If the Company, at any time while
this Warrant is outstanding, distributes to holders of Common Stock, (i) Common Stock or any shares of stock or other securities which are at any time directly or indirectly convertible into or exchangeable for Common Stock, or any rights or
options to subscribe for, purchase or otherwise acquire any of the foregoing by way of dividend or other distribution (other than a dividend or distribution covered in Section 4(a) above); (ii) any cash paid or payable otherwise
than as a cash dividend; or (iii) any other asset, then and in each such case, the Holder hereof will, upon the exercise of this Warrant, be entitled to receive, in addition to the number of shares of Common Stock receivable thereupon, and
without payment of any additional consideration therefor, the amount of stock and other securities and property (including cash in the cases referred to in clauses (ii) and (iii) above) which such Holder would hold on the date of such
exercise had such Holder been the holder of record of such Common Stock as of the date on which holders of Common Stock received or became entitled to receive such shares or all other additional stock and other securities and property. 

(c) Upon the occurrence of each adjustment pursuant to this Section 4, the Company at its expense will, at the written
request of the Holder, promptly compute such adjustment in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment, including a statement of the adjusted Exercise Price and adjusted number or type of
Exercise Shares or other securities issuable upon exercise of this Warrant (as applicable), describing the transactions giving rise to such adjustments and showing in detail the facts upon which such adjustment is based. Upon written request, the
Company will promptly deliver a copy of each such certificate to the Holder and to the Company’s transfer agent. 
 5. FRACTIONAL
SHARES. No fractional shares shall be issued upon the exercise of this Warrant as a consequence of any adjustment pursuant hereto. All Exercise Shares (including fractions) issuable upon exercise of this Warrant may be aggregated for
purposes of determining whether the exercise would result in the issuance of any fractional share. If, after aggregation, the exercise would result in the issuance of a fractional share, the Company shall, in lieu of issuance of any fractional
share, pay the Holder otherwise entitled to such fraction a sum in cash equal to the product resulting from multiplying the then current fair market value of an Exercise Share by such fraction. 

 6. FUNDAMENTAL TRANSACTIONS. If, at any time while this Warrant is outstanding,
(i) the Company effects any merger or consolidation of the Company with or into another entity, in which the shareholders of the Company as of immediately prior to the transaction own less than a majority of the outstanding stock of the
surviving entity, (ii) any tender offer or exchange offer (whether by the Company or another person or entity) is completed pursuant to which the holders of more than the 50% of the outstanding shares of Common Stock (not including any shares
of Common Stock held by the person or persons making or party to, or associated or affiliated with the Persons making or party to, such purchase, tender or exchange offer) are permitted to tender or exchange their shares for other securities, cash
or property, or (iii) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, or (iv) the Company effects any reclassification of the Common Stock or any compulsory share exchange
pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (other than as a result of a subdivision or combination of shares of Common Stock covered by Section 4 above),
(v) the Company consummates a stock purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another person whereby such other person acquires
more than the 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other person or other persons making or party to, or associated or affiliated with the other persons making or party to, such stock
purchase agreement or other business combination), or (vi) any “person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended), directly or indirectly, of 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock (each, a
“Fundamental Transaction”), the Holder shall have the right thereafter to receive, upon exercise of this Warrant, the same amount and kind of securities, cash or property as it would have been entitled to receive upon the occurrence
of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of the number of Exercise Shares then issuable upon exercise in full of this Warrant (the “Alternate Consideration”). To
the extent necessary to effectuate the foregoing provisions, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Holder a new warrant consistent with the foregoing provisions and evidencing the
Holder’s right to exercise such warrant into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the
provisions of this Section 6 and ensuring that this Warrant (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction. 

7. NO STOCKHOLDER RIGHTS. Other than as provided in Section 3.3 or otherwise herein, the Holder, solely in such
Holder’s capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon
the Holder, solely in such Holder’s capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether

 
any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise,
prior to the issuance to the Holder of the Exercise Shares which such Holder is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the
Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company. 

8. TRANSFER OF WARRANT. Subject to compliance with any applicable laws, this Warrant and all rights hereunder are transferable, by
the Holder in person or by duly authorized attorney, upon delivery of this Warrant and the form of assignment attached hereto to any transferee designated by Holder. If this Warrant is to be transferred, the Holder shall surrender this Warrant to
the Company or its designated agent, whereupon the Company or its agent, as applicable, will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 2.3), registered as the Holder may request,
representing the right to purchase the number of Exercise Shares being transferred by the Holder and, if less then the total number of Exercise Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with
Section 2.3) to the Holder representing the right to purchase the number of Exercise Shares not being transferred. 
 9. LOST,
STOLEN, MUTILATED OR DESTROYED WARRANT. If this Warrant is lost, stolen, mutilated or destroyed, the Company may, on such terms as to reasonable bond and indemnity or otherwise as it may reasonably impose (which shall, in the case of a
mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination and tenor as this Warrant so lost, stolen, mutilated or destroyed. 

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

 11. NOTICES, ETC. All notices required or permitted hereunder shall be in writing and
shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient, if not, then on the next Trading Day,
(c) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written
verification of receipt. All communications shall be sent to the Company at the address listed on the signature page hereto and to Holder at the address appearing on the books of the Company or at such other address as the Company or Holder may
designate by ten (10) days advance written notice to the other parties hereto. 
 12. ACCEPTANCE. Receipt of this Warrant
by the Holder shall constitute acceptance of and agreement to all of the terms and conditions contained herein. 
 13. GOVERNING LAW;
WAIVER OF JURY TRIAL. This Warrant shall be governed by, and construed in accordance with, the laws of the State of New York. The Holder and the Company hereby submit to the non-exclusive jurisdiction of the Federal and state courts in the
Borough of Manhattan in The City of New York in any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated thereby. The Holder and the Company irrevocably and unconditionally waive any objection to the
laying of venue of any suit or proceeding arising out of or relating to this Warrant in Federal and state courts in the Borough of Manhattan in The City of New York and irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such suit or proceeding in any such court has been brought in an inconvenient forum. EACH OF THE COMPANY AND THE HOLDER HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY. 

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

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 

 IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its duly authorized
officer as of             , 2013. 
  

			
	STEMCELLS, INC.
		
	By:	 	  

		 	Name:
		 	Title:
	
	 7707 Gateway Blvd
 Newark, CA
94560

 NOTICE OF EXERCISE 

TO: STEMCELLS, INC.  
 (1) The undersigned
hereby elects to purchase Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any. By
executing this notice, the undersigned Holder represents that it has complied with the Holder’s Exercise Limitations set forth in Section 2.4 of this Warrant. 

(2) Payment shall take the form of (check applicable box): 

 ̈ in lawful money of the United States; or 

 ̈ if permitted the cancellation of such number of Warrant Shares as is necessary, in
accordance with the formula set forth in subsection 2.2, to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2.2. 

(3) Please issue a certificate or certificates representing said Warrant Shares in the name of the undersigned or in such other name as is
specified below: 
  
  

The Warrant Shares shall be delivered to the following DWAC Account Number or by physical delivery of a certificate to: 

 

					
	  
	  		  	
	  
	  		  	
	  
	  		  	
	  
	  		  	

  

			
	[SIGNATURE OF HOLDER]
	
	Name of Investing Entity:
	  

	
	Signature of Authorized Signatory of Investing Entity:
	  

	
	Name of Authorized Signatory:
	  

	
	Title of Authorized Signatory:
	  

		
	Date:

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