Document:

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                                                                   Exhibit 4.10

                          REGISTRATION RIGHTS AGREEMENT

                  THIS REGISTRATION RIGHTS AGREEMENT, dated as of May 10,
2001 between Sativum Investments Limited ("Purchaser") and StemCells, Inc.
(the "Company").

                  WHEREAS, simultaneously with the execution and delivery of
this Agreement, the parties shall enter into the Common Stock Purchase
Agreement, dated as of the date hereof, (the "Purchase Agreement") pursuant
to which the Purchaser has committed to purchase up to $30,000,000 of the
Company's Common Stock (terms not defined herein shall have the meanings
ascribed to them in the Purchase Agreement) and the Warrant; and

                  WHEREAS, the execution and delivery of this Agreement and
granting to the Purchaser of the registration rights set forth herein with
respect to the Shares is a component part of the transaction contemplated
under the Purchase Agreement.

                  NOW, THEREFORE, the parties hereto mutually agree as
follows:

                  Section 1. REGISTRABLE SECURITIES. As used herein the term
"Registrable Security" means all Shares that (i) have not been sold under the
Registration Statement, (ii) have not been sold under circumstances under
which all of the applicable conditions of Rule 144 (or any similar provision
then in force) under the Securities Act ("Rule 144") are met, (iii) have not
been otherwise transferred to persons who may trade such Shares without
restriction under the Securities Act, and the Company has delivered a new
certificate or other evidence of ownership for such Shares not bearing a
restrictive legend, or (iv) may not be sold without any time, volume or
manner limitations pursuant to Rule 144(k) (or any similar provision then in
effect) in the opinion of counsel to the Company under the Securities Act. In
the event of any merger, reorganization, consolidation, recapitalization or
other change in corporate structure affecting the Common Stock, such
adjustment shall be deemed to be made in the definition of "Registrable
Security" as is appropriate in order to prevent any dilution or enlargement
of the rights granted pursuant to this Agreement.

                  Section 2. RESTRICTIONS ON TRANSFER. The Purchaser
acknowledges and understands that in the absence of an effective Registration
Statement authorizing the resale of the Shares as provided herein, the Shares
are "restricted securities" as defined in Rule 144. The Purchaser understands
that no disposition or transfer of the Shares may be made by Purchaser in the
absence of (i) an opinion of counsel to the Purchaser, in form and substance
reasonably satisfactory to the Company, that such transfer may be made
without registration under the Securities Act or (ii) such registration.

                   With a view to making available to the Purchaser the
benefits of Rule 144, the Company agrees to:

                           (a) to comply with the provisions of paragraph (c)(1)
         of Rule 144; and

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                           (b) to file with the Commission in a timely manner
         all reports and other documents required to be filed by the Company
         pursuant to Section 13 or 15(d) under the Exchange Act; and, if at any
         time it is not required to file such reports but in the past had been
         required to or did file such reports, it will, upon the request of the
         Purchaser, make available other information as required by, and so long
         as necessary to permit sales of, its Registrable Securities pursuant to
         Rule 144.

                  Section 3.   REGISTRATION RIGHTS WITH RESPECT TO THE SHARES.

                           (a) The Company agrees that it will prepare and file
         with the Securities and Exchange Commission ("Commission"), within
         forty-five (45) days (plus an additional number of days equal to the
         period during which Purchaser's counsel reviews the Registration
         Statement pursuant to Section 3(e) herein) after the Initial Closing, a
         registration statement (on Form S-1, Form S-3 and/or SB-2, or other
         appropriate form of registration statement) under the Securities Act
         (the "Registration Statement"), at the sole expense of the Company
         (except as provided in Section 3(d) hereof), so as to permit a public
         offering and resale of the Shares under the Securities Act by
         Purchaser.

                           (b) The Company shall use commercially reasonably
         efforts to cause the Registration Statement to become effective within
         the earlier of (i) one hundred twenty (120) days of the date of filing
         the Registration Statement, or (ii) five (5) days after receiving
         written notice of SEC clearance and will within said five (5) days
         request acceleration of effectiveness. The Company will notify
         Purchaser of the effectiveness of the Registration Statement within one
         Trading Day of such event.

                           (c) The Company will maintain the Registration
         Statement or post-effective amendment filed under this Section 3 hereof
         effective under the Securities Act from the Effective Date until no
         Shares are Registrable Securities (the "Effectiveness Period").

                           (d) All fees, disbursements and out-of-pocket
         expenses and costs incurred by the Company in connection with the
         preparation and filing of the Registration Statement under subparagraph
         3(a) and in complying with applicable securities and Blue Sky laws
         (including, without limitation, all attorneys' fees of the Company)
         shall be borne by the Company. The Purchaser shall bear the cost of
         underwriting and/or brokerage discounts, fees and commissions, if any,
         applicable to the Shares being registered and the fees and expenses of
         its counsel.

                           (e) The Purchaser and its counsel shall have a
         reasonable period, not to exceed five (5) Trading Days, to review the
         proposed Registration Statement or any amendment thereto, prior to
         filing with the Commission, and the Company shall provide the Purchaser
         with copies of any comment letters received from the Commission with
         respect thereto within two (2) Trading Days of receipt thereof.

                           (f) The Company shall make reasonably available for
         inspection by Purchaser, any underwriter participating in any
         disposition pursuant to the Registration

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         Statement, and any attorney, accountant or other agent retained by
         the Purchaser or any such underwriter all relevant financial and
         other records, pertinent corporate documents and properties of the
         Company and its subsidiaries, and cause the Company's officers,
         directors and employees to supply all information reasonably
         requested by the Purchaser or any such underwriter, attorney,
         accountant or agent in connection with the Registration Statement,
         in each case, as is customary for similar due diligence
         examinations; PROVIDED, HOWEVER, that all records, information and
         documents that are confidential, proprietary or that contain any
         material non-public information shall be kept confidential by the
         Purchaser and any such underwriter, attorney, accountant or agent,
         unless such disclosure is made pursuant to judicial process in a
         court proceeding (after first giving the Company an opportunity
         promptly to seek a protective order or otherwise limit the scope of the
         information sought to be disclosed) or is required by law, or such
         records, information or documents become available to the public
         generally or through a third party not in violation of an accompanying
         obligation of confidentiality. If the foregoing inspection and
         information gathering would otherwise disrupt the Company's conduct of
         its business, such inspection and information gathering shall, to the
         maximum extent possible, be coordinated on behalf of the Purchaser and
         the other parties entitled thereto by one firm of counsel designed by
         and on behalf of the majority in interest of Purchaser and other
         parties.

                           (g) The Company shall qualify any of the Shares for
         sale in such states as the Purchaser reasonably designates and shall
         furnish indemnification in the manner provided in Section 6 hereof.
         However, the Company shall not be required to qualify in any state
         which will require an escrow or other restriction relating to the
         Company and/or the sellers, or which will require the Company to
         qualify to do business in such state or require the Company to file
         therein any general consent to service of process.

                           (h) The Company at its expense will supply the
         Purchaser with copies of the Registration Statement and the final
         prospectus included therein (the "Prospectus") in such quantities as
         may be reasonably requested by the Purchaser.

                           (i) The Company shall not be required by this Section
         3 to include the Purchaser's Shares in any Registration Statement which
         is to be filed if, in the opinion of counsel for both the Purchaser and
         the Company (or, should they not agree, in the opinion of another
         counsel experienced in securities law matters acceptable to counsel for
         the Purchaser and the Company) the proposed offering or other transfer
         as to which such registration is requested is exempt from applicable
         federal and state securities laws and would result in all purchasers or
         transferees obtaining securities which are not "restricted securities",
         as defined in Rule 144 under the Securities Act.

                           (j) If at any time or from time to time after the
         effective date of the Registration Statement, the Company notifies the
         Purchaser in writing of the existence of a Potential Material Event (as
         defined in Section 3(k) below), the Purchaser shall not offer or sell
         any Shares or engage in any other transaction involving or relating to
         Shares, from the time of the giving of notice with respect to a
         Potential Material Event until the Purchaser receives written notice
         from the Company that such Potential Material Event

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         either has been disclosed to the public or no longer constitutes a
         Potential Material Event (the "Suspension Period"). Notwithstanding
         anything herein to the contrary, if a Suspension Period occurs at
         any time during any period commencing on a Trading Day a Draw Down
         Notice is deemed delivered and ending five (5) Trading Days
         immediately following the end of the corresponding Draw Down Pricing
         Period, then the Company must compensate the Purchaser for any net
         decline in the market value of any Shares (i) purchased by the
         Purchaser pursuant to the most recently completed Draw Down Pricing
         Period (or, if applicable, during the Draw Down Pricing Period
         during which the Suspension Period occurred), and (ii) sold by the
         Purchaser during the five (5) Trading Days immediately following the
         end of such Suspension period. Net decline shall be calculated as
         the difference between the average of the Purchases  Prices of the
         Draw Down Shares purchased by the Purchaser pursuant to the most
         recently completed Draw Down Pricing Period (or, if applicable,
         during the Draw Down Pricing Period during which the Suspension
         Period occurred) (the "Pre-Suspension Price") and the average price
         at which the Purchaser sold the Shares in accordance with (ii)
         above; PROVIDED, HOWEVER, that the Company shall only be required to
         compensate the Purchaser for the net decline if the average price at
         which the Purchaser sold the Shares in accordance with (ii) above is
         less than 80% of the Pre-Suspension Price. If a Potential Material
         Event shall occur prior to the date the Registration Statement is
         filed, then the Company's obligation to file the Registration Statement
         shall be delayed without penalty for not more than thirty (30) calendar
         days. If lawful to do so, THE COMPANY MUST GIVE PURCHASER NOTICE IN
         WRITING OF THE EXISTENCE OF A POTENTIAL MATERIAL EVENT PROMPTLY UPON
         ITS DETERMINATION THAT SUCH AN EVENT EXISTS AND, WHERE POSSIBLE, AT
         LEAST TWO (2) DAYS PRIOR TO THE FIRST DAY OF A SUSPENSION PERIOD.

                           (k) "Potential Material Event" means any of the
         following: (i) the possession by the Company of material information
         that is not ripe for disclosure in a registration statement or that
         would be detrimental to the business and affairs of the Company if
         disclosed in a Registration Statement, each as determined in good faith
         by the Chief Executive Officer or the Board of Directors of the
         Company; (ii) any material engagement or activity by the Company which
         would, in the good faith determination of the Chief Executive Officer
         or the Board of Directors of the Company, be adversely affected by
         disclosure in a registration statement at such time, which
         determination shall be accompanied by a good faith determination by the
         Chief Executive Officer or the Board of Directors of the Company that
         the Registration Statement would be materially misleading absent the
         inclusion of such information, or (iii) pursuant to applicable law, a
         fundamental change that requires the Company to file a post-effective
         amendment to the Registration Statement, change the plan of
         distribution to the Prospectus, or must update the information included
         in the Prospectus pursuant to Section 10(a)(3) of the Securities Act.

                  Section 4. COOPERATION WITH COMPANY. The Purchaser will
cooperate with the Company in all respects in connection with this Agreement,
including timely supplying all information reasonably requested by the
Company (which shall include without limitation all information regarding the
Purchaser and proposed manner of sale of the Registrable Securities required
to be disclosed in the Registration Statement) and executing and returning
all documents

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reasonably requested in connection with the registration and sale of the
Registrable Securities and entering into and performing its obligations under
any underwriting agreement, if the offering is an underwritten offering, in
usual and customary form, with the managing underwriter or underwriters of
such underwritten offering. The Purchaser shall consent to be named as an
underwriter in the Registration Statement. The Purchaser acknowledges that in
accordance with current Commission policy, the Purchaser will be named as the
underwriter of the Shares in the Registration Statement.

                  Section 5. REGISTRATION PROCEDURES. If and whenever the
Company is required by any of the provisions of this Agreement to effect the
registration of any of the Registrable Securities under the Securities Act,
the Company shall (except as otherwise provided in this Agreement), as
expeditiously as possible, subject to Sections 3(a), 3(b) and 3(e) and to the
Purchaser's assistance and cooperation as reasonably required:

                           (a) (i) prepare and file with the Commission such
         amendments and supplements to the Registration Statement and the
         Prospectus as may be necessary to keep such registration statement
         effective and to comply with the provisions of the Securities Act with
         respect to the sale or other disposition of all securities covered by
         such registration statement whenever the Purchaser of such Registrable
         Securities shall desire to sell or otherwise dispose of the same
         (including prospectus supplements with respect to the sales of
         securities from time to time in connection with a registration
         statement pursuant to Rule 415 promulgated under the Securities Act)
         and (ii) take all lawful action such that each of (A) the Registration
         Statement and any amendment thereto does not, when it becomes
         effective, contain an 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 not misleading and (B) the Prospectus, and
         any amendment or supplement thereto, does not at any time during the
         Effectiveness Period include an 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
         under which they were made, not misleading;

                           (b) (i) prior to the filing with the Commission of
         any Registration Statement (including any amendments thereto) and the
         distribution or delivery of the Prospectus (including any supplements
         thereto), provide draft copies thereof to the Purchaser and reflect in
         such documents all such comments as the Purchaser (and its counsel)
         reasonably may propose and to which the Company does not reasonably
         object and (ii) furnish to the Purchaser such numbers of copies of the
         Prospectus including a preliminary prospectus or any amendment or
         supplement to the Prospectus, as applicable, in conformity with the
         requirements of the Securities Act, and such other documents, as the
         Purchaser may reasonably request in order to facilitate the public sale
         or other disposition of the Registrable Securities;

                           (c) comply with the New York blue sky laws with
         respect to the Registrable Securities (subject to the limitations set
         forth in Section 3(g) above), and do any and all other acts and things
         which may be reasonably necessary or advisable to enable the Purchaser
         to consummate the public sale or other disposition in such

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         jurisdiction of the Registrable Securities, except that the Company
         shall not for any such purpose be required to qualify to do business
         as a foreign corporation in any jurisdiction wherein it is not so
         qualified or to file therein any general consent to service of
         process;

                           (d) list such Registrable Securities on the Principal
         Market, and any other exchange on which the Common Stock of the Company
         is then listed, if the listing of such Registrable Securities is then
         permitted under the rules of such exchange or the Nasdaq Stock Market;

                           (e) notify the Purchaser at any time when the
         Prospectus is required to be delivered under the Securities Act, of the
         happening of any event of which it has knowledge as a result of which
         the Prospectus, 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 not misleading in
         the light of the circumstances then existing, and the Company shall
         promptly prepare and file a curative amendment or curative supplement
         under Section 5(a) as quickly as commercially possible and the period
         beginning on the date of notice until the curative amendment is
         effective or curative supplement is provided to the Purchaser shall be
         deemed a Suspension Period and the Company shall compensate the
         Purchaser as set forth in Section 3(j) herein;

                           (f) as promptly as practicable after becoming aware
         of such event, notify the Purchaser (or, in the event of an
         underwritten offering, the managing underwriters) of the issuance by
         the Commission or any state authority of any stop order or other
         suspension of the effectiveness of the Registration Statement at the
         earliest possible time and take all lawful action to effect the
         withdrawal, rescission or removal of such stop order or other
         suspension;

                           (g) take all such other lawful actions reasonably
         necessary to facilitate the disposition by the Purchaser of its
         Registrable Securities in accordance with the methods therefor provided
         in the Prospectus which are customary for issuers to perform under the
         circumstances;

                           (h) in the event of an underwritten offering,
         promptly include or incorporate in a prospectus supplement or
         post-effective amendment to the Registration Statement such information
         as the managing underwriters reasonably agree should be included
         therein and to which the Company does not reasonably object and make
         all required filings of such prospectus supplement or post-effective
         amendment as soon as practicable after it is notified of the matters to
         be included or incorporated in such prospectus supplement or
         post-effective amendment; and

                           (i) maintain a transfer agent for its Common Stock.

                  Section 6.   INDEMNIFICATION.

                           (a) The Company agrees to indemnify and hold harmless
         the Purchaser and each person, if any, who controls the Purchaser
         within the meaning of the Securities

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         Act ("Distributing Purchaser") against any losses, claims,
         damages or liabilities, joint or several (which shall, for all
         purposes of this Agreement, include, but not be limited to, all
         reasonable costs of defense and investigation and all reasonable
         attorneys' fees), to which the Distributing Purchaser may become
         subject, under the Securities Act or otherwise, insofar as such
         losses, claims, damages or liabilities (or actions in respect
         thereof) arise out of or are based upon any untrue statement or
         alleged untrue statement of any material fact contained in the
         Registration Statement, or any related preliminary prospectus, the
         Prospectus or amendment or supplement thereto, or arise out of or
         are based upon the omission or alleged omission to state therein a
         material fact required to be stated therein or necessary to make the
         statements therein in light of the circumstances when made not
         misleading; provided, however, that the Company will not be liable
         in any such case to the extent that any such loss, claim, damage or
         liability arises out of or is based upon an untrue statement or
         alleged untrue statement or omission or alleged omission made in the
         Registration Statement, preliminary prospectus, the Prospectus or
         amendment or supplement thereto in reliance upon, and in conformity
         with, written information furnished to the Company by the
         Distributing Purchaser specifically for use in the preparation
         thereof. This Section 6(a) shall not inure to the benefit of any
         Distributing Purchaser with respect to any person asserting such
         loss, claim, damage or liability who purchased the Registrable
         Securities which are the subject thereof if the Distributing
         Purchaser failed to send or give a copy of the Prospectus to such
         person at or prior to the written confirmation to such person of the
         sale of such Registrable Securities, where the Distributing
         Purchaser was obligated to do so under the Securities Act or the
         rules and regulations promulgated thereunder. This indemnity
         agreement will be in addition to any liability which the Company may
         otherwise have.

                           (b) Each Distributing Purchaser agrees that it will
         indemnify and hold harmless the Company, and each officer, director of
         the Company or person, if any, who controls the Company within the
         meaning of the Securities Act, against any losses, claims, damages or
         liabilities (which shall, for all purposes of this Agreement, include,
         but not be limited to, all reasonable costs of defense and
         investigation and all reasonable attorneys' fees) to which the Company
         or any such officer, director or controlling person may become subject
         under the Securities Act or otherwise, insofar as such losses, claims,
         damages or liabilities (or actions in respect thereof) arise out of or
         are based upon any untrue statement or alleged untrue statement of any
         material fact contained in the Registration Statement, or any related
         preliminary prospectus, the Prospectus or amendment or supplement
         thereto, or arise out of or are based upon the omission or the alleged
         omission to state therein a material fact required to be stated therein
         or necessary to make the statements therein not misleading, but in each
         case only to the extent that such untrue statement or alleged untrue
         statement or omission or alleged omission was made in the Registration
         Statement, preliminary prospectus, the Prospectus or amendment or
         supplement thereto in reliance upon, and in conformity with, written
         information furnished to the Company by such Distributing Purchaser
         specifically for use in the preparation thereof. This indemnity
         agreement will be in addition to any liability which the Distributing
         Purchaser may otherwise have. Notwithstanding anything to the contrary
         herein, the Distributing Purchaser shall not be liable under this
         Section 6(b) for any

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         amount in excess of the net proceeds to such Distributing
         Purchaser as a result of the sale of Registrable Securities
         pursuant to the Registration Statement.

                           (c) Promptly after receipt by an indemnified party
         under this Section 6 of notice of the commencement of any action, such
         indemnified party will, if a claim in respect thereof is to be made
         against the indemnifying party under this Section 6, notify the
         indemnifying party of the commencement thereof; but the omission so to
         notify the indemnifying party will not relieve the indemnifying party
         from any liability which it may have to any indemnified party except to
         the extent of actual prejudice demonstrated by the indemnifying party.
         In case any such action is brought against any indemnified party, and
         it notifies the indemnifying party of the commencement thereof, the
         indemnifying party will be entitled to participate in, and, to the
         extent that it may wish, jointly with any other indemnifying party
         similarly notified, assume the defense thereof, subject to the
         provisions herein stated and after notice from the indemnifying party
         to such indemnified party of its election so to assume the defense
         thereof, the indemnifying party will not be liable to such indemnified
         party under this Section 6 for any legal or other expenses subsequently
         incurred by such indemnified party in connection with the defense
         thereof other than reasonable costs of investigation, unless the
         indemnifying party shall not pursue the action to its final conclusion.
         The indemnified party shall have the right to employ separate counsel
         in any such action and to participate in the defense thereof, but the
         fees and expenses of such counsel shall not be at the expense of the
         indemnifying party if the indemnifying party has assumed the defense of
         the action with counsel reasonably satisfactory to the indemnified
         party; provided that if the indemnified party is the Distributing
         Purchaser, the fees and expenses of such counsel shall be at the
         expense of the indemnifying party if (i) the employment of such counsel
         has been specifically authorized in writing by the indemnifying party,
         or (ii) the named parties to any such action (including any impleaded
         parties) include both the Distributing Purchaser and the indemnifying
         party and the Distributing Purchaser shall have been advised by such
         counsel in writing that there may be one or more legal defenses
         available to the indemnifying party different from or in conflict with
         any legal defenses which may be available to the Distributing Purchaser
         (in which case the indemnifying party shall not have the right to
         assume the defense of such action on behalf of the Distributing
         Purchaser, it being understood, however, that the indemnifying party
         shall, in connection with any one such action or separate but
         substantially similar or related actions in the same jurisdiction
         arising out of the same general allegations or circumstances, be liable
         only for the reasonable fees and expenses of one separate firm of
         attorneys for the Distributing Purchaser, which firm shall be
         designated in writing by the Distributing Purchaser and be approved by
         the indemnifying party). No settlement of any action against an
         indemnified party shall be made without the prior written consent of
         the indemnified party, which consent shall not be unreasonably
         withheld.

                           All fees and expenses of the indemnified party
         (including reasonable costs of defense and investigation in a manner
         not inconsistent with this Section and all reasonable attorneys' fees
         and expenses) shall be promptly paid to the indemnified party, as
         incurred; within 10 Trading Days of written notice thereof to the
         indemnified party; provided, that the indemnifying party may require
         such indemnified party to undertake to

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         reimburse all such fees and expenses to the extent it is
         finally judicially determined that such indemnified party
         is not entitled to indemnification hereunder.

                  Section 7. CONTRIBUTION. In order to provide for
just and equitable contribution under the Securities Act in any case
in which (i) the indemnified party makes a claim for indemnification
pursuant to Section 6 hereof but it is judicially determined (by the
entry of a final judgment or decree by a court of competent
jurisdiction and the expiration of time to appeal or the denial of
the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that the express
provisions of Section 6 hereof provide for indemnification in such
case, or (ii) contribution under the Securities Act may be required
on the part of any indemnified party, then the Company and the
applicable Distributing Purchaser shall contribute to the aggregate
losses, claims, damages or liabilities to which they may be subject
(which shall, for all purposes of this Agreement, include, but not
be limited to, all reasonable costs of defense and investigation and
all reasonable attorneys' fees), in either such case (after
contribution from others) on the basis of relative fault as well as
any other relevant equitable considerations. The relative fault
shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the
applicable Distributing Purchaser on the other hand, and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
Company and the Distributing Purchaser agree that it would not be
just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable
considerations referred to in this Section 7. The amount paid or
payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to
above in this Section 7 shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.

                  Notwithstanding any other provision of this
Section 7, in no event shall any (i) Purchaser be required to
undertake liability to any person under this Section 7 for any
amounts in excess of the dollar amount of the net proceeds to be
received by the Purchaser from the sale of the Purchaser's
Registrable Securities (after deducting any fees, discounts and
commissions applicable thereto) pursuant to any Registration
Statement under which such Registrable Securities are or were to be
registered under the Securities Act and (ii) underwriter be required
to undertake liability to any person hereunder for any amounts in
excess of the aggregate discount, commission or other compensation
payable to such underwriter with respect to the Registrable
Securities underwritten by it and distributed pursuant to the
Registration Statement.

                  Section 8. NOTICES. All notices, demands,
requests, consents, approvals, and other communications required or
permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be delivered as set forth in the Purchase
Agreement.

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                  Section 9. ASSIGNMENT. Neither this Agreement nor
any rights of the Purchaser or the Company hereunder may be assigned
by either party to any other person. Notwithstanding the foregoing,
upon the prior written consent of the Company, which consent shall
not be unreasonably withheld or delayed in the case of an assignment
to an affiliate of the Purchaser, the Purchaser's interest in this
Agreement may be assigned at any time, in whole or in part, to any
affiliate of the Purchaser, who agrees to be bound hereby.

                  Section 10. COUNTERPARTS/FACSIMILE. This Agreement
may be executed in two or more counterparts, each of which shall
constitute an original, but all of which, when together shall
constitute but one and the same instrument, and shall become
effective when one or more counterparts have been signed by each
party hereto and delivered to the other party. In lieu of the
original, a facsimile transmission or copy of the original shall be
as effective and enforceable as the original.

                  Section 11. REMEDIES AND SEVERABILITY. The
remedies provided in this Agreement are cumulative and not exclusive
of any remedies provided by law. If any term, provision, covenant or
restriction of this Agreement is held by a board of arbitration or a
court of competent jurisdiction to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect
and shall in no way be affected, impaired or invalidated, and the
parties hereto shall use their best efforts to find and employ an
alternative means to achieve the same or substantially the same
result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any
of those that may be hereafter declared invalid, illegal, void or
unenforceable.

                  Section 12. ENTIRE AGREEMENT; AMENDMENT AND
WAIVER. This Agreement and the other Transaction Documents (as
defined in the Purchase Agreement) constitute the entire
understanding of the parties with respect to the subject matter
hereof and thereof and supersede any and all prior understandings
and agreements, whether written or oral, with respect to such
subject matter. Neither this Agreement nor any term may be amended,
waived, discharged or terminated, except by written instrument
signed by the Company and the holders of Registrable Securities.

                  Section 13. CONFLICTING AGREEMENTS. The Company
shall not enter into any agreement with respect to its securities
that is inconsistent with the rights granted to the Purchasers in
this Agreement or otherwise prevents the Company from complying with
all of its obligations hereunder.

                   Section 14. HEADINGS. The headings in this
Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement.

                  Section 15. GOVERNING LAW. This Agreement shall be
governed by and construed in accordance with the laws of the State
of New York applicable to contracts made in New York by persons
domiciled in New York City and without regard to its principles of
conflicts of laws. The Company and the Purchaser agree to submit
themselves to the IN PERSONAM jurisdiction of

                                      10

<PAGE>

the state and federal courts situated within the Southern District
of the State of New York with regard to any controversy arising out
of or relating to this Agreement. Any party shall have the right to
seek injunctive relief from any court of competent jurisdiction in
any case where such relief is available. Any dispute under this
Agreement shall be submitted to arbitration under the American
Arbitration Association (the "AAA") in New York City, New York, and
shall be finally and conclusively determined by the decision of a
board of arbitration consisting of three (3) members (hereinafter
referred to as the "Board of Arbitration") selected as according to
the rules governing the AAA. The Board of Arbitration shall meet on
consecutive business days in New York City, New York, and shall
reach and render a decision in writing (concurred in by a majority
of the members of the Board of Arbitration) with respect to the
amount, if any, which the losing party is required to pay to the
other party in respect of a claim filed. In connection with
rendering its decisions, the Board of Arbitration shall adopt and
follow the laws of the State of New York. To the extent practical,
decisions of the Board of Arbitration shall be rendered no more than
thirty (30) calendar days following commencement of proceedings with
respect thereto. The Board of Arbitration shall cause its written
decision to be delivered to all parties involved in the dispute. The
Board of Arbitration shall be authorized and is directed to enter a
default judgment against any party refusing to participate in the
arbitration proceeding within thirty days of any deadline for such
participation. Any decision made by the Board of Arbitration (either
prior to or after the expiration of such thirty (30) calendar day
period) shall be final, binding and conclusive on the parties to the
dispute, and entitled to be enforced to the fullest extent permitted
by law and entered in any court of competent jurisdiction. The
prevailing party shall be awarded its costs, including reasonable
attorneys' fees, from the non-prevailing party as part of the
arbitration award. Any party shall have the right to seek injunctive
relief from any court of competent jurisdiction in any case where
such relief is available. The prevailing party in such injunctive
action shall be awarded its costs, including reasonable attorney's
fees, from the non-prevailing party.

                            [SIGNATURE PAGE FOLLOWS]

                                      11

<PAGE>

      [SIGNATURE PAGE TO REGISTRATION RIGHTS REGISTRATION RIGHTS AGREEMENT]

                  IN WITNESS WHEREOF, the parties hereto have caused
this Registration Rights Agreement to be duly executed, on this 10th
day of May, 2001

                                      STEMCELLS, INC.

                                      By:  /s/ Martin McGlynn
                                          --------------------------------------
                                            Martin McGlynn, President & CEO

                                      SATIVUM INVESTMENTS LIMITED

                                      By:  /s/ David Sims
                                          --------------------------------------
                                            David Sims, Director

                                      12<PAGE>

                                                                    Exhibit 4.11

NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT") OR ANY OTHER APPLICABLE SECURITIES LAWS IN RELIANCE UPON AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER
SECURITIES LAWS. NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE
HEREOF MAY BE SOLD, PLEDGED, TRANSFERRED, ENCUMBERED OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OR IN A TRANSACTION WHICH IS EXEMPT FROM REGISTRATION UNDER THE
PROVISIONS OF THE SECURITIES ACT AND ANY APPLICABLE STATE LAWS.

                             STOCK PURCHASE WARRANT

                  To Purchase 250,000 Shares of Common Stock of

                                STEMCELLS, INC.

                  THIS CERTIFIES that, for value received, Sativum
Investments Limited (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 May 10, 2001 (the "Initial Exercise Date") and on or
prior to the close of business on May 10, 2004 (the "Termination Date") but
not thereafter, to subscribe for and purchase from StemCells, Inc., a
corporation incorporated in Delaware (the "Company"), up to 250,000 shares
(the "Warrant Shares") of Common Stock, $0.01 par value per share, of the
Company (the "Common Stock"). The purchase price of one share of Common Stock
(the "Exercise Price") under this Warrant shall be $2.3805. The Exercise
Price and the number of Warrant Shares for which the Warrant is exercisable
shall be subject to adjustment as provided herein. In the event of any
conflict between the terms of this Warrant and the Common Stock Purchase
Agreement dated as of May 10, 2001 pursuant to which this Warrant has been
issued (the "Purchase Agreement"), the Purchase Agreement shall control.
Capitalized terms used and not otherwise defined herein shall have the
meanings set forth for such terms in the Purchase Agreement.

                                      1

<PAGE>

                  1. TITLE TO WARRANT. Prior to the Termination Date and
subject to compliance with applicable laws, this Warrant and all rights
hereunder are transferable, subject to Section 7 herein, in whole or in part,
at the office or agency of the Company by the Holder in person or by duly
authorized attorney, upon surrender of this Warrant together with the
Assignment Form annexed hereto properly endorsed.

                  2. AUTHORIZATION OF SHARES. The Company covenants that all
Warrant Shares which may be issued upon the exercise of the purchase rights
represented by this Warrant will, upon exercise of the purchase rights
represented by this Warrant, be duly authorized, validly issued, fully paid
and nonassessable and free from all taxes, liens and charges in respect of
the issue thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue).

                  3.       EXERCISE OF WARRANT.

                           (a) Except as provided in Section 4 herein, exercise
         of the purchase rights represented by this Warrant may be made at any
         time or times on or after the Initial Exercise Date and on or before
         the close of business on the Termination Date by the surrender of this
         Warrant and the Notice of Exercise Form annexed hereto duly executed,
         at the office of the Company (or such other office or agency of the
         Company as it may designate by notice in writing to the registered
         Holder at the address of such Holder appearing on the books of the
         Company) and upon payment of the Exercise Price of the shares thereby
         purchased by wire transfer or cashier's check drawn on a United States
         bank, or by means of a cashless exercise as provided in Section 3(c)
         below, the Holder shall be entitled to receive a certificate for the
         number of Warrant Shares so purchased. Certificates for shares
         purchased hereunder shall be delivered to the Holder within three (3)
         Trading Days after the date on which this Warrant shall have been
         exercised as aforesaid. This Warrant shall be deemed to have been
         exercised and such certificate or certificates 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 the Warrant has been exercised
         by payment to the Company of the Exercise Price and all taxes required
         to be paid by the Holder, if any, pursuant to Section 5 prior to the
         issuance of such shares, have been paid.

                           (b) If this Warrant shall have been exercised in
         part, the Company shall, at the time of delivery of the certificate or
         certificates representing Warrant Shares, deliver to Holder a new
         Warrant evidencing the rights of Holder to purchase the unpurchased
         Warrant Shares called for by this Warrant, which new Warrant shall in
         all other respects be identical with this Warrant.

                           (c) This Warrant shall also be exercisable by means
         of a "cashless exercise" in which the Holder shall be entitled to
         receive a certificate for the number of Warrant Shares equal to the
         quotient obtained by dividing [(A-B) (X)] by (A), where:

                                      2

<PAGE>

                           (A) = the average of the high and low trading prices
                           per share of Common Stock on the Trading Day
                           preceding the date of such election on the Nasdaq
                           Stock Market, or if the Common Stock is not traded on
                           the Nasdaq Stock Market, then the Principal Market in
                           terms of volume;

                           (B) =  the Exercise Price of this Warrant; and

                           (X) = the number of Warrant Shares issuable upon
                           exercise of this Warrant in accordance with the terms
                           of this Warrant and the Notice of Exercise.

                           (d) Notwithstanding anything herein to the contrary,
         in no event shall the Holder be permitted to exercise this Warrant for
         Warrant Shares to the extent that (i) the number of shares of Common
         Stock owned by such Holder (other than Warrant Shares issuable upon
         exercise of this Warrant) plus (ii) the number of Warrant Shares
         issuable upon exercise of this Warrant, would be equal to or exceed
         9.9% of the number of shares of Common Stock then issued and
         outstanding, including shares issuable upon exercise of this Warrant
         held by such Holder after application of this Section 3(d). As used
         herein, beneficial ownership shall be determined in accordance with
         Section 13(d) of the Exchange Act. To the extent that the limitation
         contained in this Section 3(d) applies, the determination of whether
         this Warrant is exercisable (in relation to other securities owned by
         the Holder) and of which a portion of this Warrant is exercisable shall
         be in the sole discretion of such Holder, and the submission of a
         Notice of Exercise shall be deemed to be such 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 have no obligation to verify or
         confirm the accuracy of such determination. Nothing contained herein
         shall be deemed to restrict the right of a Holder to exercise this
         Warrant into Warrant Shares at such time as such exercise will not
         violate the provisions of this Section 3(d). The provisions of this
         Section 3(d) may be waived by the Holder upon, at the election of the
         Holder, with not less than 61 days' prior notice to the Company, and
         the provisions of this Section 3(d) shall continue to apply until such
         61st day (or such later date as may be specified in such notice of
         waiver). No exercise of this Warrant in violation of this Section 3(d)
         but otherwise in accordance with this Warrant shall affect the status
         of the Warrant Shares as validly issued, fully-paid and nonassessable.

                  4. NO FRACTIONAL SHARES OR SCRIP. No fractional shares or
scrip representing fractional shares shall be issued upon the exercise of
this Warrant. As to any fraction of a share which Holder would otherwise be
entitled to purchase upon such exercise, the Company shall pay a cash
adjustment in respect of such final fraction in an amount equal to such
fraction multiplied by the Exercise Price.

                  5. CHARGES, TAXES AND EXPENSES. Issuance of certificates
for Warrant Shares shall be made without charge to the Holder for any issue
or transfer tax or other incidental expense in respect of the issuance of
such certificate, all of which taxes and expenses shall be

                                      3

<PAGE>

paid by the Company, and such certificates shall be issued in the name of the
Holder or in such name or names as may be directed by the Holder; PROVIDED,
HOWEVER, that in the event certificates for Warrant Shares are to be issued
in a name other than the name of the Holder, this Warrant when surrendered
for exercise shall be accompanied by the Assignment Form attached hereto duly
executed by the Holder; and the Company may require, as a condition thereto,
the payment of a sum sufficient to reimburse it for any transfer tax
incidental thereto.

                   6. CLOSING OF BOOKS. The Company will not close its
stockholder books or records in any manner which prevents the timely exercise
of this Warrant.

                   7. TRANSFER, DIVISION AND COMBINATION.

                           (a) Subject to compliance with any applicable
         securities laws, transfer of this Warrant and all rights hereunder, in
         whole or in part, shall be registered on the books of the Company to be
         maintained for such purpose, upon surrender of this Warrant at the
         principal office of the Company, together with a written assignment of
         this Warrant substantially in the form attached hereto duly executed by
         the Holder or its agent or attorney and funds sufficient to pay any
         transfer taxes payable upon the making of such transfer. In the event
         that the Holder wishes to transfer a portion of this Warrant, the
         Holder shall transfer at least 100,000 shares underlying this Warrant
         to any such transferee. Upon such surrender and, if required, such
         payment, the Company shall execute and deliver a new Warrant or
         Warrants in the name of the assignee or assignees and in the
         denomination or denominations specified in such instrument of
         assignment, and shall issue to the assignor a new Warrant evidencing
         the portion of this Warrant not so assigned, and this Warrant shall
         promptly be cancelled. A Warrant, if properly assigned, may be
         exercised by a new holder for the purchase of Warrant Shares without
         having a new Warrant issued.

                           (b) This Warrant may be divided or combined with
         other Warrants upon presentation hereof at the aforesaid office of the
         Company, together with a written notice specifying the names and
         denominations in which new Warrants are to be issued, signed by the
         Holder or its agent or attorney. Subject to compliance with Section
         7(a), as to any transfer which may be involved in such division or
         combination, the Company shall execute and deliver a new Warrant or
         Warrants in exchange for the Warrant or Warrants to be divided or
         combined in accordance with such notice.

                           (c) The Company shall prepare, issue and deliver at
         its own expense (other than transfer taxes) the new Warrant or Warrants
         under this Section 7.

                           (d) The Company agrees to maintain, at its aforesaid
         office, books for the registration and the registration of transfer of
         the Warrants.

                  8. NO RIGHTS AS SHAREHOLDER UNTIL EXERCISE. This Warrant
does not entitle the Holder to any voting rights or other rights as a
shareholder of the Company prior to the exercise hereof. Upon the surrender
of this Warrant and the payment of the aggregate Exercise Price or by means
of a cashless exercise, the Warrant Shares so purchased shall be and be
deemed to be

                                      4

<PAGE>

issued to such Holder as the record owner of such shares as of the close of
business on the later of the date of such surrender or payment.

                  9. LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT. The
Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant or any stock certificate relating to the Warrant Shares, and in case
of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it (which shall not include the posting of any bond), and
upon surrender and cancellation of such Warrant or stock certificate, if
mutilated, the Company will make and deliver a new Warrant or stock
certificate of like tenor and dated as of such cancellation, in lieu of such
Warrant or stock certificate.

                  10. SATURDAYS, SUNDAYS, HOLIDAYS, ETC. If the last or
appointed day for the taking of any action or the expiration of any right
required or granted herein shall be a Saturday, Sunday or a legal holiday,
then such action may be taken or such right may be exercised on the next
succeeding day not a Saturday, Sunday or legal holiday.

                  11. ADJUSTMENTS OF EXERCISE PRICE AND NUMBER OF WARRANT
SHARES. STOCK SPLITS, ETC. The number and kind of securities purchasable upon
the exercise of this Warrant and the Exercise Price shall be subject to
adjustment from time to time upon the happening of any of the following. In
case the Company shall (i) pay a dividend in shares of Common Stock or make a
distribution in shares of Common Stock to holders of its outstanding Common
Stock, (ii) subdivide its outstanding shares of Common Stock into a greater
number of shares, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, or (iv) issue any shares of its
capital stock in a reclassification of the Common Stock, then the number of
Warrant Shares purchasable upon exercise of this Warrant immediately prior
thereto shall be adjusted so that the Holder shall be entitled to receive the
kind and number of Warrant Shares or other securities of the Company which it
would have owned or have been entitled to receive had such Warrant been
exercised in advance thereof. Upon each such adjustment of the kind and
number of Warrant Shares or other securities of the Company which are
purchasable hereunder, the Holder shall thereafter be entitled to purchase
the number of Warrant Shares or other securities resulting from such
adjustment at an Exercise Price per Warrant Share or other security obtained
by multiplying the Exercise Price in effect immediately prior to such
adjustment by the number of Warrant Shares purchasable pursuant hereto
immediately prior to such adjustment and dividing by the number of Warrant
Shares or other securities of the Company resulting from such adjustment. An
adjustment made pursuant to this paragraph shall become effective immediately
after the effective date of such event retroactive to the record date, if
any, for such event.

                  12. REORGANIZATION, RECLASSIFICATION, MERGER, CONSOLIDATION
OR DISPOSITION OF ASSETS. In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where
there is a change in or distribution with respect to the Common Stock of the
Company) and, pursuant to the terms of such reorganization, reclassification,
merger, consolidation, shares of common stock of the successor or acquiring
corporation, or any cash, shares of stock or other securities or property of
any nature whatsoever (including warrants or other subscription or purchase
rights) in addition to or in lieu of common stock of the successor or
acquiring

                                      5

<PAGE>

corporation ("Other Property"), are to be received by or distributed to the
holders of Common Stock of the Company, then the Holder shall have the right
thereafter to receive, upon exercise of this Warrant, the number of shares of
Common Stock of the successor or acquiring corporation or of the Company, if
it is the surviving corporation, and Other Property receivable upon or as a
result of such reorganization, reclassification, merger, or consolidation by
a Holder of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such event. In case of any such
reorganization, reclassification, merger or, consolidation, the successor or
acquiring corporation (if other than the Company) shall expressly assume the
due and punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company and all
the obligations and liabilities hereunder, subject to such modifications as
may be deemed appropriate (as determined in good faith by resolution of the
Board of Directors of the Company) in order to provide for adjustments of
Warrant Shares for which this Warrant is exercisable which shall be as nearly
equivalent as practicable to the adjustments provided for in this Section 12.
For purposes of this Section 12, "common stock of the successor or acquiring
corporation" shall include stock of such corporation of any class which is
not preferred as to dividends or assets over any other class of stock of such
corporation and which is not subject to redemption and shall also include any
evidences of indebtedness, shares of stock or other securities which are
convertible into or exchangeable for any such stock, either immediately or
upon the arrival of a specified date or the happening of a specified event
and any warrants or other rights to subscribe for or purchase any such stock.
The foregoing provisions of this Section 12 shall similarly apply to
successive reorganizations, reclassifications, mergers, or consolidations.

                   13. VOLUNTARY ADJUSTMENT BY THE COMPANY. The Company may
at any time during the term of this Warrant reduce the then current Exercise
Price to any amount and for any period of time deemed appropriate by the
Board of Directors of the Company.

                  14. NOTICE OF ADJUSTMENT. Whenever the number of Warrant
Shares or number or kind of securities or other property purchasable upon the
exercise of this Warrant or the Exercise Price is adjusted, as herein
provided, the Company shall promptly mail by registered or certified mail,
return receipt requested, to the Holder notice of such adjustment or
adjustments setting forth the number of Warrant Shares (and other securities
or property) purchasable upon the exercise of this Warrant and the Exercise
Price of such Warrant Shares (and other securities or property) after such
adjustment, setting forth a brief statement of the facts requiring such
adjustment and setting forth the computation by which such adjustment was
made. Such notice, in the absence of manifest error, shall be conclusive
evidence of the correctness of such adjustment.

                  15. NOTICE OF CORPORATE ACTION.  If at any time:

                                    (a) the Company shall take a record of the
         holders of its Common Stock for the purpose of entitling them to
         receive a dividend or other distribution, or any right to subscribe for
         or purchase any evidences of its indebtedness, any shares of stock of
         any class or any other securities or property, or to receive any other
         right, or

                                      6

<PAGE>

                                    (b) there shall be any capital
         reorganization of the Company, any reclassification or
         recapitalization of the capital stock of the Company or any
         consolidation or merger of the Company with, or any sale, transfer
         or other disposition of all or substantially all the property,
         assets or business of the Company to, another corporation or,

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

then, in any one or more of such cases, the Company shall give to Holder (i)
at least 10 days' prior written notice of the date on which a record date
shall be selected for such dividend, distribution or right or for determining
rights to vote in respect of any such reorganization, reclassification,
merger, consolidation, sale, transfer, disposition, liquidation or winding
up, and (ii) in the case of any such reorganization, reclassification,
merger, consolidation, sale, transfer, disposition, dissolution, liquidation
or winding up, at least 10 days' prior written notice of the date when the
same shall take place. Such notice in accordance with the foregoing clause
also shall specify (i) the date on which any such record is to be taken for
the purpose of such dividend, distribution or right, the date on which the
holders of Common Stock shall be entitled to any such dividend, distribution
or right, and the amount and character thereof, and (ii) the date on which
any such reorganization, reclassification, merger, consolidation, sale,
transfer, disposition, dissolution, liquidation or winding up is to take
place and the time, if any such time is to be fixed, as of which the holders
of Common Stock shall be entitled to exchange their Warrant Shares for
securities or other property deliverable upon such disposition, dissolution,
liquidation or winding up. Each such written notice shall be sufficiently
given if addressed to Holder at the last address of Holder appearing on the
books of the Company and delivered in accordance with Section 17(d).

                  16. AUTHORIZED SHARES. The Company covenants that during
the period the Warrant is outstanding, it will reserve from its authorized
and unissued Common Stock a sufficient number of shares to provide for the
issuance of the Warrant Shares upon the exercise of any purchase rights under
this Warrant. The Company further covenants that its issuance of this Warrant
shall constitute full authority to its officers who are charged with the duty
of executing stock certificates to execute and issue the necessary
certificates for the Warrant Shares upon the exercise of the purchase rights
under this Warrant. The Company will take all such reasonable action as may
be necessary to assure that such Warrant Shares may be issued as provided
herein without violation of any applicable law or regulation, or of any
requirements of the Principal Market upon which the Common Stock may be
listed.

                           The Company shall not by any action, including,
without limitation, amending 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 of this Warrant, but will
at all times in good faith assist in the carrying out of all such terms and
in the taking of all such actions as may be necessary or appropriate to
protect the rights of Holder against impairment. Without limiting the
generality of the foregoing, the Company will (a) not increase the par value
of any Warrant Shares above the amount payable therefor upon such exercise
immediately prior to such increase in par value, (b) take all such action as
may be necessary or appropriate in order that the

                                      7

<PAGE>

Company may validly and legally issue fully paid and nonassessable Warrant
Shares upon the exercise of this Warrant, and (c) use commercially reasonable
efforts to obtain all such authorizations, exemptions or consents from any
public regulatory body having jurisdiction thereof as may be necessary to
enable the Company to perform its obligations under this Warrant.

                           Before taking any action which would result in an
adjustment in the number of Warrant Shares for which this Warrant is
exercisable or in the Exercise Price, the Company shall obtain all such
authorizations or exemptions thereof, or consents thereto, as may be
necessary from any public regulatory body or bodies having jurisdiction
thereof.

                  17. MISCELLANEOUS.

                           (a) JURISDICTION. This Warrant shall constitute a
         contract under the laws of New York, without regard to its conflict of
         law, principles or rules, and be subject to arbitration pursuant to the
         terms set forth in the Purchase Agreement.

                           (b) RESTRICTIONS. The Holder acknowledges that the
         Warrant Shares acquired upon the exercise of this Warrant, if not
         registered, will have restrictions upon resale imposed by state and
         federal securities laws.

                           (c) NONWAIVER AND EXPENSES. No course of dealing or
         any delay or failure to exercise any right hereunder on the part of
         Holder shall operate as a waiver of such right or otherwise prejudice
         Holder's rights, powers or remedies, notwithstanding all rights
         hereunder terminate on the Termination Date. If there is a final
         judgment finding that the Company willfully and knowingly fails to
         comply with any provision of this Warrant, which results in any
         material damages to the Holder, the Company shall pay to Holder such
         amounts as shall be sufficient to cover any costs and expenses
         including, but not limited to, reasonable attorneys' fees, including
         those of appellate proceedings, incurred by Holder in collecting any
         amounts due pursuant hereto or in otherwise enforcing any of its
         rights, powers or remedies hereunder.

                           (d) NOTICES. Any notice, request or other document
         required or permitted to be given or delivered to the Holder by the
         Company shall be delivered in accordance with the notice provisions of
         the Purchase Agreement.

                           (e) LIMITATION OF LIABILITY. No provision hereof, in
         the absence of affirmative action by Holder to purchase Warrant Shares,
         and no enumeration herein of the rights or privileges of Holder, shall
         give rise to any liability of Holder for the purchase price of any
         Common Stock or as a stockholder of the Company, whether such liability
         is asserted by the Company or by creditors of the Company.

                           (f) REMEDIES. Holder, in addition to being entitled
         to exercise all rights granted by law, including recovery of damages,
         will be entitled to specific performance of its rights under this
         Warrant. The Company agrees that monetary damages would not be adequate
         compensation for any loss incurred by reason of a breach

                                      8

<PAGE>

         by it of the provisions of this Warrant and hereby agrees to waive
         the defense in any action for specific performance that a remedy at
         law would be adequate.

                           (g) SUCCESSORS AND ASSIGNS. Subject to applicable
         securities laws, this Warrant and the rights and obligations evidenced
         hereby shall inure to the benefit of and be binding upon the successors
         of the Company and the successors and permitted assigns of Holder. The
         provisions of this Warrant are intended to be for the benefit of all
         Holders from time to time of this Warrant and shall be enforceable by
         any such Holder or holder of Warrant Shares.

                           (h) AMENDMENT.  This Warrant may be modified or
         amended or the provisions hereof waived with the written consent of the
         Company and the Holder.

                           (i) SEVERABILITY. Wherever possible, each provision
         of this Warrant shall be interpreted in such manner as to be effective
         and valid under applicable law, but if any provision of this Warrant
         shall be prohibited by or invalid under applicable law, such provision
         shall be ineffective to the extent of such prohibition or invalidity,
         without invalidating the remainder of such provisions or the remaining
         provisions of this Warrant.

                           (j) HEADINGS.  The headings used in this Warrant are
         dissolution, liquidation or reference only and shall not, for any
         purpose, be deemed a part of this Warrant.

                                      9

<PAGE>

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

Dated:  May 10, 2001
                                     STEMCELLS, INC.

                                     By:  /s/ Martin McGlynn
                                        ----------------------------------
                                          Martin McGlynn, President & CEO

                                      10

<PAGE>

                               NOTICE OF EXERCISE

To:      StemCells, Inc.

                  (1) The undersigned hereby elects to purchase ________
Warrant Shares (the "Common Stock"), of StemCells, Inc. pursuant to the terms
of the attached Warrant, and tenders herewith payment of the exercise price
in full, together with all applicable transfer taxes, if any.

                  (2) 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:

                      ----------------------------------------

                      ----------------------------------------

                      ----------------------------------------

                                      SATIVUM INVESTMENTS LIMITED

                                        By: ______________________________
                                            Name:
                                            Title:

                                        Dated: ________________________

<PAGE>

                   NOTICE OF EXERCISE OF COMMON STOCK WARRANT
                    PURSUANT TO CASHLESS EXERCISE PROVISIONS

To: StemCells, Inc.

Aggregate Price of Warrant Before Exercise:  $___________
Aggregate Price Being Exercised:  $______
Exercise Price:  $______ per share
Number of Shares of Common Stock to be Issued Under this Notice:  ________
Remaining Aggregate Price (if any) After Issuance:  $_______

Gentlemen:

                  The undersigned, registered Holder of the Warrant delivered
herewith, hereby irrevocably exercises such Warrant for, and purchases
thereunder, shares of the Common Stock of StemCells, Inc., a Delaware
corporation, as provided below. Capitalized terms used herein, unless otherwise
defined herein, shall have the meanings given in the Warrant. The portion of the
Exercise Price (as defined in the Warrant) to be applied toward the purchase of
Common Stock pursuant to this Notice of Exercise is $_______, thereby leaving a
remaining Exercise Price (if any) equal to $________. Such exercise shall be
pursuant to the cashless exercise provisions of Section 3 of the Warrant;
therefore, Holder makes no payment with this Notice of Exercise. The number of
shares to be issued pursuant to this exercise shall be determined by reference
to the formula in Section 3 of the Warrant which, by reference to Section 3,
requires the use of the high and low trading price of the Company's Common Stock
on the Trading Day preceding the date of such election. The high and low trading
price of the Company's Common Stock has been determined by Holder to be $______
and $_________, respectively, which figure is acceptable to Holder for
calculations of the number of shares of Common Stock issuable pursuant to this
Notice of Exercise. Holder requests that the certificates for the purchased
shares of Common Stock be issued in the name of _________________________ and
delivered to ______________________________________________. To the extent the
foregoing exercise is for less than the full Aggregate Price of the Warrant, a
replacement Warrant representing the remainder of the Aggregate Price (and
otherwise of like form, tenor and effect) shall be delivered

                                      2

<PAGE>

to Holder along with the share certificate evidencing the Common Stock issued
in response to this Notice of Exercise.

                                      SATIVUM INVESTMENTS LIMITED

                                      By:
                                         ---------------------------------------
                                           Name:
                                           Title:

                                      Date:

                                      NOTE
                  The execution to the foregoing Notice of Exercise must
exactly correspond to the name of the Holder on the Warrant.

                                      3

<PAGE>

                                 ASSIGNMENT FORM

                    (To assign the foregoing warrant, execute
                   this form and supply required information.
                 Do not use this form to exercise the warrant.)

                  FOR VALUE RECEIVED, the foregoing Warrant and all rights
evidenced thereby are hereby assigned to

_______________________________________________ whose address is

______________________________________________________________

______________________________________________________________

                                         Dated:  ______________, _______

                           Holder's Signature:__________________________

                           Holder's Address:  __________________________

                                              __________________________

Signature Guaranteed:  ___________________________________________

NOTE: The signature to this Assignment Form must correspond with the name as
it appears on the face of the Warrant, without alteration or enlargement or
any change whatsoever, and must be guaranteed by a bank or trust company.
Officers of corporations and those acting in an fiduciary or other
representative capacity should file proper evidence of authority to assign
the foregoing Warrant.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00026-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00026-of-00352.parquet"}]]