SECURITIES PURCHASE AGREEMENT
 
This Securities Purchase Agreement (this “Agreement”) is dated as of February
__, 2008, between Neuralstem, Inc., a Delaware corporation (the “Company”), and
the purchaser identified on the signature pages hereto (including its successors
and assigns, the “Purchaser”).
 
WHEREAS, the Company has granted Purchaser an Option (as defined herein) to
negotiate a license for certain technology and/or products currently owned by
the Company.
 
WHEREAS, as consideration for the Option, the Purchaser has agreed to purchase
$2.5 million of the Company’s newly-issued shares of Common Stock.
 
WHEREAS, subject to the terms and conditions set forth in this Agreement and
pursuant to Section 4(2) of the Securities Act of 1933, as amended (the
“Securities Act”), and Rule 506 promulgated thereunder, the Company desires to
issue and sell to the Purchaser, and the Purchaser, desires to purchase from the
Company, securities of the Company as more fully described in this Agreement.
 
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agree
as follows:
 
ARTICLE I.
DEFINITIONS
 
1.1 Definitions. In addition to the terms defined elsewhere in this Agreement,
for all purposes of this Agreement, the following terms have the meanings set
forth in this Section 1.1:
 
“Action” shall have the meaning ascribed to such term in Section 3.1(j).
 
“Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person as such terms are used in and construed under Rule 405 under the
Securities Act. With respect to a Purchaser, any investment fund or managed
account that is managed on a discretionary basis by the same investment manager
as such Purchaser will be deemed to be an Affiliate of such Purchaser.
 
 “Business Day” means any day except Saturday, Sunday, any day which is a
national legal holiday in the United States or the Republic of Korea or any day
on which banking institutions in the State of New York or Seoul are authorized
or required by law or other governmental action to close.
 
“Closing” means the closing of the purchase and sale of the Securities pursuant
to Section 2.1.
 

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“Closing Date” means the Trading Day when all of the Transaction Documents have
been executed and delivered by the applicable parties thereto, and all
conditions precedent to (i) the Purchaser’s obligations to pay the Subscription
Amount and (ii) the Company’s obligations to deliver the Securities have been
satisfied or waived; provided that in no event shall the Closing Date be later
than February 27, 2008.
 
“Commission” means the Securities and Exchange Commission.
 
“Common Stock” means the common stock of the Company, par value $.01 per share,
and any other class of securities into which such securities may hereafter be
reclassified or changed into.
 
“Common Stock Equivalents” means any securities of the Company or the
Subsidiaries which would entitle the holder thereof to acquire at any time
Common Stock, including, without limitation, any debt, preferred stock, rights,
options, warrants or other instrument that is at any time convertible into or
exercisable or exchangeable for, or otherwise entitles the holder thereof to
receive, Common Stock.
 
 “Disclosure Schedules” means the Disclosure Schedules of the Company delivered
concurrently herewith.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

“FDA” shall mean the United States Food and Drug Administration.
 
“GAAP” shall have the meaning ascribed to such term in Section 3.1(h).
 
“Indebtedness” means: (a) any liabilities for borrowed money or amounts owed in
excess of $25,000 (other than trade accounts payable incurred in the ordinary
course of business); (b) all guaranties, Liens, endorsements and other
contingent obligations in respect of Indebtedness of others, whether or not the
same are or should be reflected in the Company’s balance sheet (or the notes
thereto), except guaranties by endorsement of negotiable instruments for deposit
or collection or similar transactions in the ordinary course of business; and
(c) the present value of any lease payments in excess of $25,000 due under
leases required to be capitalized in accordance with GAAP.
 
“Intellectual Property Rights” shall have the meaning ascribed to such term in
Section 3.1(o).
 
“Knowledge” (including any derivation thereof such as “known” or “knowing”) of a
Person that is not a natural individual means that any director or officer of
such Person: (a) has actual knowledge of a particular fact or other matter; or
(b) could reasonably be expected to discover or otherwise become aware of such
fact or other matter in the course of conducting such due investigation and
inquiry concerning the existence or truth of such fact or other matter as a
reasonably prudent person, in the ordinary and usual course of the performance
of his or her professional responsibilities, would conduct under the same
applicable circumstances.
 
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“Liens” means a lien, charge, security interest, encumbrance, right of first
refusal, preemptive right or other restriction.
 
“LRS” means the Law Offices of Raul Silvestre & Associates, APLC.
 
“Material Adverse Effect” shall have the meaning assigned to such term in
Section 3.1(b).
 
“Material Permits” shall have the meaning ascribed to such term in Section
3.1(m).
 
“Option” means that certain Exclusive Option Agreement of even date with this
Agreement executed by the parties, in the form of Exhibit B attached hereto.
 
“Option Period” means a period of time as set forth in the Option. 
 
“Per Share Purchase Price” shall equal $[_________].
 
“Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.
 
“Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.
 
“Product” shall mean technology owned by the Company for transplantation into
patients for all indications for which necessary approval from the FDA.
 
“Purchaser Party” shall have the meaning ascribed to such term in Section 4.5.
 
“Registration Rights Agreement” means the Registration Rights Agreement, dated
the date hereof, among the Company and the Purchaser, in the form of Exhibit A
attached hereto.
 
“Registration Statement” means a registration statement meeting the requirements
set forth in the Registration Rights Agreement and covering the resale by the
Purchaser of the Shares.
 
“Report” shall have the meaning ascribed to such term in Section 3.1(h).
 
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“Required Approvals” shall have the meaning ascribed to such term in Section
3.1(e).
 
“Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
 
“SEC Reports” means the most recent reports filed by the Company with the
Commission under the Securities Act and the Exchange Act, including the exhibits
thereto and documents incorporated by reference therein, consisting specifically
of: (i) Form 10-KSB filed on April 2, 2007; (ii) Form SB-2 filed on April 30,
2007; (iii) Form 10-QSB filed on May 15, 2007; (iv), Form 10-QSB filed on August
14, 2007; (v) Form 10-QSB filed on November 13, 2007; and (vi) Form 8-K/A filed
on November 8, 2007, all as attached hereto as Exhibit C.
 
“Securities” means the Shares.
 
“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
 
“Shares” means the shares of Common Stock issued or issuable to the Purchaser
pursuant to this Agreement.
 
“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO
under the Exchange Act (but shall not be deemed to include the location and/or
reservation of borrowable shares of Common Stock).
 
“Subscription Amount” means two million five hundred thousand U.S. dollars
(US$2,500,000.00).
 
“Trading Day” means a day on which the New York Stock Exchange is open for
trading.
 
“Trading Market” means the following markets or exchanges on which the Common
Stock is listed or quoted for trading on the date in question: the American
Stock Exchange, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq
Global Select Market, the New York Stock Exchange or the OTC Bulletin Board.
 
“Transaction Documents” means this Agreement, the Option, the Registration
Rights Agreement and any other documents or agreements executed in connection
with the transactions contemplated hereunder.
 
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“Transfer Agent” means American Stock Transfer & Trust Company, with a mailing
address of 59 Maiden Lane New York, NY 10038 and a facsimile number of (718) 921
8116, and any successor transfer agent of the Company.
 
ARTICLE II.
PURCHASE AND SALE
 
2.1 Closing. On the Closing Date, upon the terms and subject to the conditions
set forth herein, substantially concurrent with the execution and delivery of
this Agreement by the parties hereto, the Company agrees to sell, and the
Purchaser agrees to purchase, such number of Shares as shall be determined by
the Subscription Amount divided by the Per Share Purchase Price. The Purchaser
shall deliver to the Company, via wire transfer or a certified check,
immediately available funds equal to its Subscription Amount and the Company
shall deliver to the Purchaser the Shares as determined pursuant to Section
2.2(a), and the Company and the Purchaser shall deliver the other items set
forth in Section 2.2(b) deliverable at the Closing. Upon satisfaction of the
covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall
occur at the offices of LRS, or such other location as the parties shall
mutually agree.
 
2.2 Deliveries.
 
(a) On or prior to the Closing Date, the Company shall deliver or cause to be
delivered to the Purchaser the following:
 
(i) this Agreement duly executed by the Company;
 
(ii) the Option duly executed by the Company;
 
(iii) a certificate evidencing a number of Shares equal to such Purchaser’s
Subscription Amount divided by the Per Share Purchase Price, registered in the
name of such Purchaser; and
 
(iv) the Registration Rights Agreement duly executed by the Company.
 
(b) On or prior to the Closing Date, Purchaser shall deliver or cause to be
delivered to the Company (except as noted) the following:
 
(i) this Agreement duly executed by such Purchaser;
 
(ii) the Option duly executed by the Purchaser;
 
(iii) the Purchaser’s Subscription Amount by a certified check or wire transfer
to the Company. Both parties acknowledge that, such wire transfer might occur
later than the Closing Date, which is due to any matter associated with
accounting process and, in such a case, the Purchaser shall notify the Company
and use good faith effort for completion of wire transfer but in no event shall
such wire be delayed more than 3 days after the Closing Date; and
 
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(iv) the Registration Rights Agreement duly executed by such Purchaser.
 
2.3 Closing Conditions.
 
(a) The obligations of the Company hereunder in connection with the Closing are
subject to the following conditions being met:
 
(i) the accuracy in all material respects on the Closing Date of the
representations and warranties of the Purchaser contained herein;
 
(ii) all obligations, covenants and agreements of the Purchaser required to be
performed at or prior to the Closing Date shall have been performed; and
 
(iii) the delivery by Purchaser of the items set forth in Section 2.2(b) of this
Agreement.
 
(b) The obligations of the Purchaser hereunder in connection with the Closing
are subject to the following conditions being met:
 
(i) the accuracy in all material respects on the Closing Date of the
representations and warranties of the Company contained herein; provided that
for the purpose of determining the ‘material’ accuracy of the representations
and warranties of the Company under this Section 2.3(b)(i), should a concerned
representation and warranty itself contain any ‘materiality’ or similar
qualifications, such qualifications shall be disregarded, so that only the
‘materiality’ qualification set forth in this Section 2.3(b)(i) will apply;
 
(ii) all obligations, covenants and agreements of the Company required to be
performed at or prior to the Closing Date shall have been performed;
 
(iii) the delivery by the Company of the items set forth in Section 2.2(a) of
this Agreement;
 
(iv) this Agreement and the other Transaction Documents, and the transactions
contemplated hereby and thereby, shall have been duly approved by the board of
directors or other pertinent body or officer of the Purchaser;
 
(v) the sale, issuance and purchase of the Securities, on the Closing Date,
shall be legally permitted by all laws and regulations to which the Company is
subject. No proceeding, litigation, arbitration, investigation, shall be pending
or threatened and no judgment, decision, decree, order, injunction or award
shall be outstanding, seeking to delay, restrain, make illegal or alter the
transactions contemplated by any Transaction Document;
 
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(vi) each of the Purchaser and the Company shall have obtained any and all
approvals, consents, permits and waivers, including those by or from
governmental authorities, necessary or appropriate for consummation of the
transactions contemplated by this Agreement;
 
(vii) there shall have been no Material Adverse Effect with respect to the
Company since the date hereof; and
 
(viii) from the date hereof to the Closing Date, trading in the Common Stock
shall not have been suspended by the Commission or the Company’s principal
Trading Market (except for any suspension of trading of limited duration agreed
to by the Company, which suspension shall be terminated prior to the Closing),
and, at any time prior to the Closing Date, trading in securities generally as
reported by Bloomberg L.P. shall not have been suspended or limited, or minimum
prices shall not have been established on securities whose trades are reported
by such service, or on any Trading Market, nor shall a banking moratorium have
been declared either by the United States or New York State authorities nor
shall there have occurred any material outbreak or escalation of hostilities or
other national or international calamity of such magnitude in its effect on, or
any material adverse change in, any financial market which, in each case, in the
reasonable judgment of each Purchaser, makes it impracticable or inadvisable to
purchase the Securities at the Closing.
 
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
 
3.1 Representations and Warranties of the Company. Except as set forth in the
Disclosure Schedules and the SEC Reports where specifically referenced, which
Disclosure Schedules and SEC Reports, if specifically referenced, shall be
deemed a part hereof and shall qualify any representation or warranty otherwise
made herein to the extent of the disclosure contained in the corresponding
section of the Disclosure Schedules or the SEC Reports, if specifically
referenced, would contradict any representation or warranty contained herein,
the Company makes, as of the date hereof and as of the Closing Date, the
following representations and warranties to the Purchaser. For purposes of this
Article 3, any statement, facts, representations, or admissions contained in the
SEC Reports, if specifically referenced, will be deemed to be included in the
Disclosure Schedule and all such information will be deemed to be fully
disclosed and furnished to the Purchaser.
 
(a) Subsidiaries. The Company has no subsidiaries.
 
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(b) Organization and Qualification. The Company is an entity duly incorporated
or otherwise organized, validly existing and in good standing under the laws of
the State of Delaware, with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently conducted. The
Company is not in violation or default of any of the provisions of its
certificate or articles of incorporation, bylaws or other organizational or
charter documents. The Company is duly qualified to conduct business and is in
good standing as a foreign corporation or other entity in each jurisdiction in
which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, could not have or reasonably be expected to result
in (i) a material adverse effect on the legality, validity or enforceability of
any Transaction Document, (ii) a material adverse effect on the results of
operations, assets, business, prospects or condition (financial or otherwise) of
the Company, taken as a whole, or (iii) a material adverse effect on the
Company’s ability to perform in any material respect on a timely basis its
obligations under any Transaction Document (any of (i), (ii) or (iii), a
“Material Adverse Effect”) and no Proceeding has been instituted in any such
jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or
curtail such power and authority or qualification.
 
(c) Authorization; Enforcement. The Company has the requisite corporate power
and authority to enter into and to consummate the transactions contemplated by
each of the Transaction Documents and otherwise to carry out its obligations
hereunder and thereunder. The execution and delivery of each of the Transaction
Documents by the Company and the consummation by it of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
action on the part of the Company and no further action is required by the
Company, its board of directors or its stockholders in connection therewith
other than in connection with the Required Approvals. Each Transaction Document
has been (or upon delivery will have been) duly executed by the Company and,
when delivered in accordance with the terms hereof and thereof, will constitute
the valid and binding obligation of the Company enforceable against the Company
in accordance with its terms except (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.
 
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(d) No Conflicts. The execution, delivery and performance of the Transaction
Documents by the Company, the issuance and sale of the Securities and the
consummation by the Company of the other transactions contemplated hereby and
thereby do not and will not (i) conflict with or violate any provision of the
Company’s certificate or articles of incorporation, bylaws or other
organizational or charter documents, or (ii) conflict with, or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, result in the creation of any Lien upon any of the properties or
assets of the Company, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of,
any agreement, credit facility, debt or other instrument (evidencing a Company
debt or otherwise) or other understanding to which the Company is a party or by
which any property or asset of the Company is bound or affected, or (iii)
subject to the Required Approvals, conflict with or result in a violation of any
law, rule, regulation, order, judgment, injunction, decree or other restriction
of any court or governmental authority to which the Company is subject
(including federal and state securities laws and regulations), or by which any
property or asset of the Company is bound or affected; except in the case of
each of clauses (ii) and (iii), such as could not have or reasonably be expected
to result in a Material Adverse Effect.
 
(e) Filings, Consents and Approvals. The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents, other than
(i) filings required pursuant to Section 4.2 of this Agreement, (ii) the filing
with the Commission of the Registration Statement, (iii) application(s) to each
applicable Trading Market for the listing of the Securities for trading thereon
in the time and manner required thereby and (iv) the filing of Form D with the
Commission and such filings as are required to be made under applicable state
securities laws (collectively, the “Required Approvals”).
 
(f) Issuance of the Securities. The Securities are duly authorized and, when
issued and paid for in accordance with the applicable Transaction Documents,
will be duly and validly issued, fully paid and nonassessable, free and clear of
all Liens other than restrictions on transfer provided for in the Transaction
Documents. The sale of the Securities hereunder is not and will not be subject
to any preemptive rights or rights of first refusal that have not been properly
waived or complied with.
 
(g) Capitalization. The Company’s capitalization is as set forth on the
Disclosure Schedule.
 
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(h) SEC Filings; Financial Statements. The Company has filed all reports,
schedules, forms, statements and other documents required to be filed by the
Company under the Securities Act and the Exchange Act, including pursuant to
Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or
such shorter period as the Company was required by law or regulation to file
such material) (the foregoing materials, including the exhibits thereto and
documents incorporated by reference therein, being collectively referred to
herein as the “Reports”) on a timely basis or has received a valid extension of
such time of filing and has filed any such Reports prior to the expiration of
any such extension. As of their respective dates, the Reports complied in all
material respects with the requirements of the Securities Act and the Exchange
Act, as applicable, and none of the Reports, when filed, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
financial statements of the Company included in the Reports comply in all
material respects with applicable accounting requirements and the rules and
regulations of the Commission with respect thereto as in effect at the time of
filing. Such financial statements have been prepared in accordance with United
States generally accepted accounting principles applied on a consistent basis
during the periods involved (“GAAP”), except as may be otherwise specified in
such financial statements or the notes thereto and except that unaudited
financial statements may not contain all footnotes required by GAAP, and fairly
present in all material respects the financial position of the Company as of and
for the dates thereof and the results of operations and cash flows for the
periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments. Specifically, but not by way of
limitation, the balance sheet of such financial statements discloses all of the
Company’s material debts, liabilities and obligations of any nature, whether due
or to become due, as of their respective dates (including, without limitation,
absolute liabilities, accrued liabilities, and contingent liabilities) to the
extent such debts, liabilities and obligations are required to be disclosed in
accordance with GAAP.
 
(i) Material Changes; Undisclosed Events, or Developments. Since the date of the
latest audited financial statements included within the Reports, except as
specifically disclosed in the SEC Report filed prior to the date hereof or in
Schedule 3.1(i) hereof, (i) there has been no event, occurrence or development
that has had or that could reasonably be expected to result in a Material
Adverse Effect, (ii) the Company has not altered its method of accounting, (iii)
the Company has not declared or made any dividend or distribution of cash or
other property to its stockholders or purchased, redeemed or made any agreements
to purchase or redeem any shares of its capital stock and (iv) the Company has
not issued any Common Stock Equivalents to any officer, director or Affiliate,
except pursuant to existing Company stock option plans. The Company does not
have pending before the Commission any request for confidential treatment of
information.  Except as disclosed in the SEC Reports or contained in Schedule
3.1(i) hereto, the Company has no indebtedness for borrowed money that the
Company has directly or indirectly created, incurred, assumed, or guaranteed, or
with respect to which the Company has otherwise become directly or indirectly
liable. The Company has no material liability and, to its Knowledge, knows of no
material contingent liability not disclosed to the Purchaser, except current
liabilities incurred in the ordinary course of business which have not been,
either individually or in the aggregate, materially adverse to the assets,
financial condition or operations of the Company.
 
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(j) Litigation. Except as disclosed in the Disclosure Schedule there is no
action, suit, inquiry, notice of violation, proceeding or investigation pending
or, to the Knowledge of the Company, threatened against or affecting the Company
or any of its properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state, county, local or
foreign) (collectively, an “Action”) which (i) adversely affects or challenges
the legality, validity or enforceability of any of the Transaction Documents or
the Securities or (ii) could, if there were an unfavorable decision, have or
reasonably be expected to result in a Material Adverse Effect. Neither the
Company nor any director or officer thereof, is or has been the subject of any
Action involving a claim of violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty. There has not been, and
to the Knowledge of the Company, there is not pending or contemplated, any
investigation by the Commission involving the Company or any current or former
director or officer of the Company. The Commission has not issued any stop order
or other order suspending the effectiveness of any registration statement filed
by the Company under the Exchange Act or the Securities Act.
 
(k) Labor Relations. No material labor dispute exists or, to the Knowledge of
the Company, is imminent with respect to any of the employees of the Company
which could reasonably be expected to result in a Material Adverse Effect. None
of the Company’s employees is a member of a union that relates to such
employee’s relationship with the Company and the Company is not a party to a
collective bargaining agreement, and the Company believes that its relationships
with its employees are good. No executive officer is, or, to the Knowledge of
the Company, is now expected to be, in violation of any material term of any
employment contract, confidentiality, disclosure or proprietary information
agreement or non-competition agreement, or any other contract or agreement or
any restrictive covenant in favor of any third party, and the continued
employment of each such executive officer does not subject the Company to any
liability with respect to any of the foregoing matters. The Company is in
compliance with all U.S. federal, state, local and foreign laws and regulations
relating to employment and employment practices, terms and conditions of
employment and wages and hours, except where the failure to be in compliance
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
 
(l) Compliance. The Company (i) is not in default under or in violation of (and
no event has occurred that has not been waived that, with notice or lapse of
time or both, would result in a default by the Company under), nor has the
received notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any other agreement or
instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is not in
violation of any order of any court, arbitrator or governmental body, or (iii)
is not and has not been in violation of any statute, rule or regulation of any
governmental authority, including without limitation all foreign, federal, state
and local laws applicable to its business and all such laws that affect the
environment, except in each case as could not have or reasonably be expected to
result in a Material Adverse Effect.
 
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(m) Regulatory Permits. The Company possesses all certificates, authorizations
and permits issued by the appropriate federal, state, local or foreign
regulatory authorities necessary to conduct their respective businesses as
described in the SEC Reports, except where the failure to possess such permits
could not reasonably be expected to result in a Material Adverse Effect
(“Material Permits”), and the Company has not received any notice of proceedings
relating to the revocation or modification of any Material Permit.
 
(n) Title to Assets. The Company has good and marketable title in all personal
property owned by them that is material to the business of the Company, in each
case free and clear of all Liens, except for Liens as do not materially affect
the value of such property and do not materially interfere with the use made and
proposed to be made of such property by the Company and Liens for the payment of
federal, state or other taxes, the payment of which is neither delinquent nor
subject to penalties. Any real property and facilities held under lease by the
Company are held by them under valid, subsisting and enforceable leases with
which the Company is in compliance.
 
(o) Patents and Trademarks. To the Company’s Knowledge, the Company has, or has
rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, trade secrets, inventions, copyrights,
licenses and other intellectual property rights and similar rights necessary or
material for use in connection with its businesses as described in the Reports
(collectively, the “Intellectual Property Rights”), without any known
infringement of the rights of others and which failure to so have could have a
Material Adverse Effect. Except for the Option and except as disclosed in
Disclosure Schedules, there are no outstanding options, licenses or agreements
of any kind relating to the Intellectual Property Rights that are the subject of
the Option, nor is the Company bound by or a party to any options, licenses or
agreements of any kind with respect to the patents, patent applications,
trademarks, trademark applications, service marks, trade names, trade secrets,
inventions, copyrights, licenses and other intellectual property rights and
similar rights of any other Person which relate to any Intellectual Property
Rights that are the subject of the Option. The Company has not received a notice
(written or otherwise) that any of the Intellectual Property Rights used by the
Company violates or infringes upon the rights of any Person. To the Knowledge of
the Company, all such Intellectual Property Rights are enforceable and there is
no existing or threatened infringement by another Person of any of the
Intellectual Property Rights other than as contained in the Disclosure Schedule.
Except as disclosed in the Disclosure Schedules, there are no proceedings,
including interference, re-examination, reissue, opposition, nullity, or
cancellation proceedings pending that relate to any of the Intellectual Property
Rights that are the subject of the Option, and the Company is not aware of any
information indicating that such proceedings are threatened or contemplated by
any governmental authority or any other Person. The Company has taken reasonable
security measures to protect the secrecy, confidentiality and value of all of
their intellectual properties, except where failure to do so could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
 
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(p) Tax Status. Except for matters that would not, individually or in the
aggregate, have or reasonably be expected to result in a Material Adverse
Effect, the Company has filed all necessary federal, state and foreign income
and franchise tax returns and has paid or accrued all taxes shown as due
thereon, and the Company has no Knowledge of a tax deficiency which has been
asserted or threatened against the Company.
 
(q) Contracts. To the Company’s Knowledge, all agreements, contracts and
undertakings to which the Company is a party or by which any of its assets may
be bound are in full force and effect and binding upon the parties thereto, and
neither the Company nor any other party thereto is in material breach of or
default thereunder, and no condition exists that with or without the giving of
notice or lapse of time, or both, would constitute a material breach or default
thereunder. The Company is not a party to or bound by any contract, agreement,
arrangement or understanding that by its terms would, after consummation of the
transactions contemplated hereunder, purport to obligate, restrict or otherwise
bind the Company with regard to exclusivity, non-competition or other similar
covenant or agreement, or restrict the ability of the Company to engage freely
in its business as it sees fit.
 
(r) Offering Valid. Assuming the accuracy of the representations and warranties
of the Purchaser contained in Section 3.2 hereof, the offer, sale and issuance
of the Securities will be exempt from the registration requirements of the
Securities Act, and will have been registered or qualified (or are exempt from
registration and qualification) under the registration, permit or qualification
requirements of all applicable state securities laws. Neither the Company nor
any agent on its behalf has solicited or will solicit any offers to sell or has
offered to sell or will offer to sell all or any part of the Securities to any
person or persons so as to bring the sale of such Securities by the Company
within the registration provisions of the Securities Act or any state securities
laws.
 
(s) Full Disclosure. To the Knowledge of the Company, (i) neither this Agreement
nor any other written document, certificate, instrument or statement furnished
or made available to the Purchaser by or on behalf of the Company in connection
with the transactions contemplated hereby contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained herein and therein not misleading, and (ii) there are no
facts which materially adversely affect the business, assets, liabilities,
financial condition, prospects or operations of the Company that have not been
set forth in this Agreement or in the other documents, certificates, instruments
or statements furnished to the Purchaser by or on behalf of the Company.
 
(t) Reliance by Purchaser. The Company understands that the representations,
warranties, covenants and acknowledgements set forth in this Section 3.1
constitute a material inducement to the Purchaser to execute and deliver the
Transaction Documents.
 
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3.2 Representations and Warranties of the Purchaser. The Purchaser hereby
represents and warrants as of the date hereof and as of the Closing Date to the
Company as follows:
 
(a) Organization; Authority. Purchaser is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization with full right, corporate or partnership power and authority to
enter into and to consummate the transactions contemplated by the Transaction
Documents and otherwise to carry out its obligations hereunder and thereunder.
The execution and delivery of the Transaction Documents and performance by such
Purchaser of the transactions contemplated by the Transaction Documents have
been duly authorized by all necessary corporate or similar action on the part of
such Purchaser. Each Transaction Document to which it is a party has been duly
executed by Purchaser, and when delivered by Purchaser in accordance with the
terms hereof, will constitute the valid and legally binding obligation of the
Purchaser, enforceable against it in accordance with its terms, except (i) as
limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law.
 
(b) Own Account. The Purchaser understands that the Securities are “restricted
securities” and have not been registered under the Securities Act or any
applicable state securities law and is acquiring the Securities as principal for
its own account and not with a view to or for distributing or reselling such
Securities or any part thereof in violation of the Securities Act or any
applicable state securities law, has no present intention of distributing any of
such Securities in violation of the Securities Act or any applicable state
securities law and has no direct or indirect arrangement or understandings with
any other Persons to distribute or regarding the distribution of such Securities
(this representation and warranty not limiting such Purchaser’s right to sell
the Securities pursuant to the Registration Statement or otherwise in compliance
with applicable federal and state securities laws) in violation of the
Securities Act or any applicable state securities law.
 
(c) Purchaser Status. Purchaser is either: (i) an “accredited investor” as
defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities
Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under
the Securities Act. Such Purchaser is not required to be registered as a
broker-dealer under Section 15 of the Exchange Act.
 
(d) Experience of Such Purchaser. The Purchaser, either alone or together with
its representatives, has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Securities, and has so evaluated the
merits and risks of such investment. The Purchaser is able to bear the economic
risk of an investment in the Securities and, at the present time, is able to
afford a complete loss of such investment.
 
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(e) Short Sales and Confidentiality Prior To The Date Hereof. Other than
consummating the transactions contemplated hereunder, the Purchaser has not, nor
has any Person acting on behalf of or pursuant to any understanding with such
Purchaser, directly or indirectly executed any purchases or sales, including
Short Sales, of the securities of the Company during the period commencing from
the time that the Purchaser and Company first discussed the terms of the Option
or any other Person representing the Company setting forth the material terms of
the transactions contemplated hereunder until the date hereof (“Discussion
Time”). Other than to other Persons party to this Agreement, such Purchaser has
maintained the confidentiality of all disclosures made to it in connection with
this transaction (including the existence and terms of this transaction).
 
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
 
4.1 Transfer Restrictions.
 
(a) The Securities may only be disposed of in compliance with state and federal
securities laws. In connection with any transfer of Securities other than
pursuant to an effective Registration Statement or Rule 144, to the Company or
to an Affiliate of a Purchaser, the Company may require the transferor thereof
to provide to the Company an opinion of counsel selected by the transferor and
reasonably acceptable to the Company, the form and substance of which opinion
shall be reasonably satisfactory to the Company, to the effect that such
transfer does not require registration of such transferred Securities under the
Securities Act. As a condition of transfer, any such transferee shall agree in
writing to be bound by the terms of this Agreement and shall have the rights of
a Purchaser under this Agreement and the Registration Rights Agreement. 
 
(b) The Purchaser agrees to the imprinting, so long as is required by this
Section 4.1, of a legend on any of the Securities in the following form:
 
THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A
BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A
FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a)
UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.
 
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The restrictions set forth in this Section 4.1 shall terminate upon the
effective date of the Registration Statement filed under the Securities Act or
the registration of the Shares under the Exchange Act.
 
4.2 Securities Laws Disclosure; Publicity. The Company shall issue a Current
Report on Form 8-K, disclosing the material terms of the transactions
contemplated hereby, and filing the Transaction Documents as exhibits thereto
within the required period of time following the Closing. The Company and the
Purchaser shall consult with each other in issuing any other press releases with
respect to the transactions contemplated hereby, and neither the Company nor the
Purchaser shall issue any such press release or otherwise make any such public
statement without the prior consent of the Company, with respect to any press
release of the Purchaser, or without the prior consent of the Purchaser, with
respect to any press release of the Company, which consent shall not
unreasonably be withheld or delayed, except if such disclosure is required by
law, in which case the disclosing party shall promptly provide the other party
with prior notice of such public statement or communication.
 
4.3 Limitation on Ownership & Representation.
 
(a) While the Option remains effective and outstanding (or in the event the
parties enter into a licensing agreement as contemplated in the Option, for the
duration of any such licensing agreement), the Purchaser shall not: (i) seek to
secure board representation; (ii) enter into any voting agreement or grant a
proxy to any third party with respect to any Common Stock owned by the
Purchaser; or (iii) acquire any of the Company’s Common Stock or Common Stock
Equivalents to the extent that any such acquisition would trigger the filing
under Section 13(d) of the Exchange Act. For purposes of this Section 4.3, (A)
beneficial ownership, the manner of calculation of the percentage, and the
definition of Common Stock Equivalents shall all be determined in accordance
with Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder, and (B) in determining the number of outstanding shares of Common
Stock, the parties may rely on the number of outstanding shares of Common Stock
as reflected in (x) the Company’s most recent Form 10-QSB or Form 10-KSB, 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 the Purchaser, the Company shall within two Trading Days confirm orally and
in writing to the Purchaser the number of shares of Common Stock and the Common
Stock Equivalents then outstanding, and if requested by the Purchaser, the
percentage that would result from the Purchaser’s additional acquisition,
calculated pursuant to Section 13(d) of the Exchange Act, it being acknowledged
by the Purchaser that if the Company provides calculation of the percentage, the
Company is not representing to the Purchaser that such calculation is in
compliance with Section 13(d) of the Exchange Act and the Purchaser is solely
responsible for any schedules required to be filed in accordance therewith.
 
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(b) In the event Purchaser breaches any of the covenants and agreements
contained in Section 4.3(a), Purchaser acknowledges that monetary remedies would
not be sufficient and acknowledges that any such violation or threatened
violation will cause irreparable injury to the other party and that, in addition
to any other remedies that may be available, in law, in equity or otherwise, the
Company shall be entitled to the following remedies, cumulatively: (i) the
obtaining of injunctive relief against the threatened breach or the continuation
of any such breach, without the necessity of proving actual damages and (ii) a
determination by the Company, in its sole discretion, that any votes cast by the
Purchaser, Affiliates acting on its behalf, or assigns with regard to the Common
Stock then owned, are improper, void and of no force or effect, which
determination will be binding on the Purchaser.

4.4 Use of Proceeds. The Company shall use the net proceeds from the sale of the
Securities hereunder for working capital purposes.
 
4.5 Indemnification of Purchaser. Subject to the provisions of this Section 4.5,
the Company will indemnify and hold Purchaser and its directors, officers,
shareholders, members, partners, employees and agents (and any other Persons
with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title), each Person who
controls such Purchaser (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title) of such controlling Persons (each, a
“Purchaser Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any such Purchaser Party may suffer or incur as a
result of or relating to (a) any breach of any of the representations,
warranties, covenants or agreements made by the Company in this Agreement or in
the other Transaction Documents or (b) any action instituted against any such
Purchaser Party in any capacity, or any of them or their respective Affiliates,
by any stockholder of the Company who is not an Affiliate of such Purchaser,
with respect to any of the transactions contemplated by the Transaction
Documents (unless such action is based upon a breach of Purchaser’s
representations, warranties or covenants under the Transaction Documents or any
agreements or understandings such Purchaser may have with any such stockholder
or any violations by the Purchaser of state or federal securities laws or any
conduct by such Purchaser which constitutes fraud, gross negligence, willful
misconduct or malfeasance). If any action shall be brought against any Purchaser
Party in respect of which indemnity may be sought pursuant to this Agreement,
such Purchaser Party shall promptly notify the Company in writing, and the
Company shall have the right to assume the defense thereof with counsel of its
own choosing reasonably acceptable to the Purchaser Party. Purchaser Party shall
have the right to employ separate counsel in any such action and participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Purchaser Party except to the extent that (i) the employment
thereof has been specifically authorized by the Company in writing, (ii) the
Company has failed after a reasonable period of time to assume such defense and
to employ counsel or (iii) in such action there is, in the reasonable opinion of
such separate counsel, a material conflict on any material issue between the
position of the Company and the position of such Purchaser Party, in which case
the Company shall be responsible for the reasonable fees and expenses of no more
than one such separate counsel. The Company will not be liable to Purchaser
Party under this Agreement (i) for any settlement by Purchaser Party effected
without the Company’s prior written consent, which shall not be unreasonably
withheld or delayed; or (ii) to the extent, but only to the extent that a loss,
claim, damage or liability is attributable to any Purchaser Party’s breach of
any of the representations, warranties, covenants or agreements made by such
Purchaser Party in this Agreement or in the other Transaction Documents.
 
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4.6 Short Sales and Confidentiality After The Date Hereof. The Purchaser
covenants that neither it nor any Affiliate acting on its behalf or pursuant to
any understanding with it will execute any Short Sales during the period
commencing at the Discussion Time and ending at the expiration of the Option
Period or in the event a licensing agreement is reached between the parties, at
the termination of the licensing period.
 
4.7 Delivery of Securities After Closing. The Company shall deliver, or cause to
be delivered, the Securities purchased by the Purchaser within 15 Trading Days
of the Closing Date.
 
4.8 Financial Reports. The Company shall furnish to the Purchaser the following
financial statements prepared in accordance with GAAP, consistently applied: (i)
within sixty (60) days after the end of each calendar quarter, the Company’s
unaudited or if available, audited balance sheet and statements of income and
cash flows for the quarter just ended; and (ii) as soon as possible after the
end of each fiscal year of the Company and not later than one hundred twenty
(120) days after the end of each fiscal year, the Company’s unaudited or if
available, audited balance sheet as of the end of its fiscal year and the
related statements of income and cash flows for the fiscal year.
 
4.9 Inspection Rights. The Purchaser shall have the right to visit and inspect
any of the properties of the Company, and to discuss the affairs, finances,
accounts and capitalization of the Company with its officers, and to review such
information as is reasonably requested all at such reasonable times and as often
as may be reasonably requested; provided, however, that the Company shall not be
obligated under this Section 4.9 with respect to a competitor of the Company. In
the event Purchaser avails itself of its inspection rights as contained herein,
Purchaser acknowledges that it may come privy to material inside information and
accordingly, agrees to purchase or sell any of the Company’s securities until
such information is publicly disclosed.
 
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4.10 Notice of Stockholder Meeting or Resolutions. The Company shall provide
written notice to the Purchaser of any proposed meeting, resolution or consent
of the stockholders, setting forth the agenda in reasonable detail together with
other appropriate documents to inform the Purchaser adequately of matters to be
discussed and resolved, which notice shall be given no later than two (2) weeks
in advance of the date of such meeting, resolution or consent.
 
ARTICLE V.
MISCELLANEOUS
 
5.1 Fees and Expenses. Except as expressly set forth in the Transaction
Documents to the contrary, each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement. The Company shall pay all Transfer
Agent fees, stamp taxes and other taxes and duties levied in connection with the
delivery of any Securities to the Purchaser.
 
5.2 Entire Agreement. The Transaction Documents, together with the exhibits and
schedules thereto, contain the entire understanding of the parties with respect
to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.
 
5.3 Notices. Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be in writing and shall be deemed
given and effective on the earliest of (a) the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number set
forth on the signature pages attached hereto prior to 5:30 p.m. (New York City
time) on a Trading Day, (b) the next Trading Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
number set forth on the signature pages attached hereto on a day that is not a
Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c)
the 2nd Trading Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (d) upon actual receipt by the party to
whom such notice is required to be given. The address for such notices and
communications shall be as set forth on the signature pages attached hereto.
 
5.4 Amendments; Waivers. No provision of this Agreement may be waived or amended
except in a written instrument signed by the Company and the Purchaser or, in
the case of a waiver, by the party against whom enforcement of any such waived
provision is sought. No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any
other provision, condition or requirement hereof, nor shall any delay or
omission of any party to exercise any right hereunder in any manner impair the
exercise of any such right.
 
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5.5 Headings. The headings herein are for convenience only, do not constitute a
part of this Agreement and shall not be deemed to limit or affect any of the
provisions hereof.
 
5.6 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and permitted assigns. The
Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of each Purchaser (other than by merger). Any
Purchaser may assign any or all of its rights under this Agreement to any Person
to whom such Purchaser assigns or transfers any Securities, provided such
transferee agrees in writing to be bound, with respect to the transferred
Securities, by the provisions of the Transaction Documents that apply to the
“Purchaser.”
 
5.7 No Third-Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person, except as otherwise set forth in Section 4.8.
 
5.8 Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
Delaware, without regard to the principles of conflicts of law thereof. Each
party agrees that all legal proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement and
any other Transaction Documents (whether brought against a party hereto or its
respective affiliates, directors, officers, shareholders, employees or agents)
shall be commenced exclusively in the state and federal courts sitting in the
state of Delaware. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the state of Delaware
for the adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein (including with respect
to the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper or is an inconvenient venue for such
proceeding. Each party agrees that any service of process in any such suit,
action or proceeding shall be made in strict accordance with the Convention on
the Service Abroad of Judicial and Extrajudicial Documents in Civil or
Commercial Matters, as the same is effective for the jurisdiction of the Company
and the Purchaser, respectively. Nothing contained herein shall be deemed to
limit in any way any right to serve process in any other manner permitted by
law. If either party shall commence an action or proceeding to enforce any
provisions of the Transaction Documents, then the prevailing party in such
action or proceeding shall be reimbursed by the other party for its reasonable
attorneys’ fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such action or proceeding.
 
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5.9 Survival. The representations and warranties contained herein shall survive
the Closing and the delivery of the Shares.
 
5.10 Execution. This Agreement may be executed in two or more counterparts, all
of which when taken together shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart. In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof.
 
5.11 Severability. If any term, provision, covenant or restriction of this
Agreement is held by 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 commercially reasonable 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 such that
may be hereafter declared invalid, illegal, void or unenforceable.
 
5.12 Rescission and Withdrawal Right. Notwithstanding anything to the contrary
contained in (and without limiting any similar provisions of) any of the other
Transaction Documents, whenever Purchaser exercises a right, election, demand or
option under a Transaction Document and the Company does not timely perform its
related obligations within the periods therein provided, then the Purchaser may
rescind or withdraw, in its sole discretion from time to time upon written
notice to the Company, any relevant notice, demand or election in whole or in
part without prejudice to its future actions and rights.
 
5.13 Replacement of Securities. If any certificate or instrument evidencing the
Securities is mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon cancellation
thereof (in the case of mutilation), or in lieu of and substitution therefor, a
new certificate or instrument, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction. The applicant
for a new certificate or instrument under such circumstances shall also pay any
reasonable third-party costs (including customary indemnity) associated with the
issuance of such replacement Securities.
 
5.14 Remedies. In addition to being entitled to exercise all rights provided
herein or granted by law, including recovery of damages, the Purchaser and the
Company will be entitled to specific performance under the Transaction
Documents. The parties agree that monetary damages may not be adequate
compensation for any loss incurred by reason of any breach of obligations
contained in the Transaction Documents and hereby agrees to waive and not to
assert in any action for specific performance of any such obligation the defense
that a remedy at law would be adequate.
 
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5.15 Construction. The parties agree that each of them and/or their respective
counsel has reviewed and had an opportunity to revise the Transaction Documents
and, therefore, the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of the Transaction Documents or any amendments hereto.
 
5.16 Waiver of Jury Trial. In any action, suit or proceeding in any jurisdiction
brought by any party against any other party, the parties each knowingly and
intentionally, to the greatest extent permitted by applicable law, hereby
absolutely, unconditionally, irrevocably and expressly waives forever trial by
jury.

 
(Signature Pages Follow)
 
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IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 

NEURALSTEM, INC.
 
Address for Notice:
9700 Great Seneca Highway
Rockville, Maryland 20850
By:__________________________________________
      Name:
      Title:
Attn:
e-mail:
Tel:
Fax:
With a copy to (which shall not constitute notice):
 

 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
 
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[PURCHASER SIGNATURE PAGES TO NRLS SECURITIES PURCHASE AGREEMENT]

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
Name of Purchaser: CJ CheilJedang Corporation____
 
Signature of Authorized Signatory of Purchaser:
__________________________________
 
Name of Authorized Signatory: _Jin Soo Kim _____________________________________
 
Title of Authorized Signatory: _Chief Executive Officer
_________________________
 
Email Address of Purchaser:_
 
kek2006@CJ.net (attn: Kyoung-Eun Kim, Stem Cell Business Team, Pharma BU)_______
 
Fax Number of Purchaser:
_+82-2-6363-0519_____________________________________________
 
Address for Notice of Purchaser:
Attn: Kyoung-Eun Kim, Stem Cell Business Team,
CJ CheilJedang Corporation
KCCI Building 45, 4-ga, Namdaemun-ro, Jung-gu, Seoul, 100-743 Korea

Address for Delivery of Securities for Purchaser (if not same as above):

Subscription Amount:
$:
Shares:
#:
EIN Number:

[SIGNATURE PAGES CONTINUE]
 
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