Document:

Unassociated Document

     

    THIS
WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THIS
WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SUCH ACT AND ANY APPLICABLE
STATE SECURITIES LAW OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO RADIENT
PHARMACEUTICALS CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.

    

    RADIENT
PHARMACEUTICALS CORPORATION

    

    WARRANT
TO PURCHASE _______ SHARES OF COMMON STOCK

    

    1.       Issuance.  In
consideration of good and valuable consideration as set forth in the Purchase
Agreement (defined below), including without limitation the Net Purchase Price
(as defined in the Purchase Agreement), the receipt and sufficiency of which is
hereby acknowledged by Radient Pharmaceuticals Corporation, a Delaware
corporation (the “Company”),
___________________, [a(n)
__________________], its successors or registered assigns (the “Holder”),
is hereby granted the right to purchase at any time on or after the Issue Date
(as defined below) until the date which is the last calendar day of the month in
which the fifth anniversary of the Issue Date occurs (the “Expiration
Date”), up to __________ fully paid and non-assessable shares of the
Company’s common stock, par value $0.001 per share (the “Common
Stock”) at the Exercise Price (as defined below).  This Warrant
is being issued pursuant to the terms of that certain Note and Warrant Purchase
Agreement of even date herewith (the “Purchase
Agreement”), to which the Company and the Holder (or the Holder’s
predecessor in interest) are parties.

    

    Unless
otherwise indicated herein, capitalized terms not otherwise defined herein shall
have the meanings ascribed to them in the Purchase Agreement.

    

    This
Warrant was originally issued to the Holder or the Holder’s predecessor in
interest on April 8, 2010 (the “Issue
Date”).

    

    2.       Exercise of
Warrants.

    

                                   2.1           General.

    

                                   (a)
This Warrant is exercisable in whole or in part at any time and from time to
time commencing on the Issue Date.  Such exercise shall be effectuated
by submitting to the Company (either by delivery to the Company or by facsimile
transmission) a completed and duly executed Notice of Exercise (substantially in
the form attached to this Warrant as Exhibit
A).  The date such Notice of Exercise is either faxed, emailed
or delivered to the Company shall be the “Exercise
Date,” provided that, if such exercise represents the full exercise of
the outstanding balance of the Warrant, the Holder of this Warrant shall tender
this Warrant to the Company within five (5) Trading Days (as defined below)
thereafter.  The Notice of Exercise shall be executed by the Holder of
this Warrant and shall indicate (i) the number of shares then being purchased
pursuant to such exercise, and (ii) if applicable (as provided below), whether
the exercise is a cashless exercise.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    For
purposes of this Warrant, the term “Trading
Day” means any day during which the Principal Market (as defined below)
shall be open for business.

    

    (b)
Notwithstanding any other provision contained herein to the contrary, at any
time prior to the Expiration Date if and only if there is no then effective
registration statement for the Warrant Shares, the Holder may elect a “cashless”
exercise of this Warrant for any Warrant Shares whereby the Holder shall be
entitled to receive a number of shares of Common Stock equal to (x) the excess
of the Current Market Value (as defined below) over the aggregate Exercise Price
of the portion of the Warrant then being exercised, divided by (y) the Adjusted
Price of the Common Stock.

    

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

    

    “Adjusted Price of
the Common Stock” shall mean the Conversion Price, as defined in that
certain Convertible Promissory Note issued by the Company in favor of the Holder
on even date herewith, in effect on any relevant Exercise Date.

    

    “Current Market
Value” shall mean an amount equal to the Market Price of the Common
Stock, multiplied by the number of shares of Common Stock specified in the
applicable Notice of Exercise.

    

    “Closing
Price” means the 4:00 P.M. last sale price of the Common Stock on the
Principal Market on the relevant trading day(s), as reported by Bloomberg, LP
(or if that service is not then reporting the relevant information regarding the
Common Stock, a comparable reporting service of national reputation selected by
the Holder and reasonably acceptable to the Company) (“Bloomberg”)
for the relevant date.

    

    “Exercise
Price” shall mean $0.38 per
share.

    

    “Market Price of
the Common Stock” shall mean the higher of: (i) the Closing Price of the
Common Stock on the Issue Date; or (ii) the VWAP of the Common Stock for the
Trading Day that is two Trading Days prior to the Exercise Date.

    

    “VWAP”
shall mean the volume-weighted average price of the Common Stock on the
Principal Trading Market for a particular Trading Day or set of Trading Days, as
the case may be, as reported by Bloomberg.

    

    (c) If
the Notice of Exercise form elects a “cash” exercise (or if the cashless
exercise referred to in the immediately preceding paragraph (b) is not available
in accordance with the terms hereof), the Exercise Price per share of Common
Stock for the shares then being exercised shall be payable, at the election of
the Holder, in cash or by certified or official bank check or by wire transfer
in accordance with instructions provided by the Company at the request of the
Holder.

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    (d) Upon
the appropriate payment to the Company, if any, of the Exercise Price for the
shares of Common Stock purchased, together with the surrender of this Warrant
(if required), the Company shall immediately deliver the shares of Common Stock
electronically via Deposit/Withdrawal at Custodian (DWAC) to the account
designated by Holder on the Notice of Exercise.  If for any reason the
Company is not able to deliver the shares via DWAC notwithstanding its best
efforts to do so, the Company shall deliver certificates representing the
Warrant Shares to the Holder as provided in the Notice of Exercise (the
certificates delivered in such manner, the “Warrant Share
Certificates”) within three (3) Trading Days (such third Trading Day, a
“Delivery
Date”) of (i) with respect to a “cashless exercise,” the Exercise Date as
the case may be, or, (ii) with respect to a “cash” exercise, the later of the
Exercise Date or the date the payment of the Exercise Price for the relevant
Warrant Shares is received by the Company.

    

    (e) The
Company understands that a delay in the electronic delivery of shares or the
delivery of the Warrant Share Certificates, as the case may be, beyond the
Delivery Date (assuming electronic delivery is not available) could result in
economic loss to the Holder.  As compensation to the Holder for such
loss, the Company agrees to pay late payment fees (as liquidated damages and not
as a penalty) to the Holder for late delivery of Warrant Share Certificates in
the amount of $100 per Trading Day after the Delivery Date for each $10,000 of
the total Exercise Price of the Warrant Shares subject to the delivery
default.  The Company shall pay any payments incurred under this
Section in immediately available funds upon demand.  Furthermore, in
addition to any other remedies which may be available to the Holder, in the
event that the Company fails for any reason to effect delivery of the Warrant
Share Certificates by the Delivery Date, the Holder may revoke all or part of
the relevant Warrant exercise by delivery of a notice to such effect to the
Company, whereupon the Company and the Holder shall each be restored to their
respective positions immediately prior to the exercise of the relevant portion
of this Warrant, except that the liquidated damages described above shall be
payable through the date notice of revocation or rescission is given to the
Company.

    

    (f) The
Holder shall be deemed to be the holder of the shares issuable to it in
accordance with the provisions of this Section 2.1 on the Exercise
Date.

    

    2.2             Ownership
Limitation.  Notwithstanding the provisions of this Warrant, in
no event shall the this Warrant be exercisable to the extent that the issuance
of Common Stock upon the exercise thereof, after taking into account the Common
Stock then owned by the Holder and its affiliates, would result in the
beneficial ownership by the Holder and its affiliates of more than 9.99% of the
outstanding Common Stock of the Company.  For purposes of this
paragraph, beneficial ownership shall be determined in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended.

    

    3.           Mutilation or Loss of
Warrant.  Upon receipt by the Company of evidence satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant, and (in the
case of loss, theft or destruction) receipt of reasonably satisfactory
indemnification, and (in the case of mutilation) upon surrender and cancellation
of this Warrant, the Company will execute and deliver a new Warrant of like
tenor and date and any such lost, stolen, destroyed or mutilated Warrant shall
thereupon become void.

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    4.           Rights of the
Holder.  The Holder shall not, by virtue hereof, be entitled to
any rights of a stockholder in the Company, either at law or in equity, and the
rights of the Holder are limited to those expressed in this Warrant and are not
enforceable against the Company except to the extent set forth
herein.

    

    5.           Protection Against Dilution
and Other Adjustments.

    

    5.1           Capital
Adjustments.  If
the Company shall at any time prior to the expiration of this Warrant subdivide
the Common Stock, by split-up or stock split, or otherwise, or combine its
Common Stock, or issue additional shares of its Common Stock as a dividend, the
number of Warrant Shares issuable on the exercise of this Warrant shall
forthwith be automatically increased proportionately in the case of a
subdivision, split or stock dividend, or proportionately decreased in the case
of a combination.  Appropriate adjustments shall also be made to the
purchase price payable per Warrant Share, but the aggregate purchase price
payable for the total number of Warrant Shares purchasable under this Warrant
(as adjusted) shall remain the same.  Any adjustment under this
Section 5.1 shall become effective automatically at the close of business on the
date the subdivision or combination becomes effective, or as of the record date
of such dividend, or in the event that no record date is fixed, upon the making
of such dividend.

    

    5.2           Reclassification,
Reorganization and Consolidation.  In case of any reclassification,
capital reorganization, or change in the capital stock of the Company (other
than as a result of a subdivision, combination, or stock dividend provided for
in Section 5.1 above), then the Company shall make appropriate provision so that
the Holder shall have the right at any time prior to the expiration of this
Warrant to purchase, at a total price equal to that payable upon the exercise of
this Warrant, the kind and amount of shares of stock and other securities and
property receivable in connection with such reclassification, reorganization, or
change by a holder of the same number of shares of Common Stock as were
purchasable by the Holder immediately prior to such reclassification,
reorganization, or change.  In any such case appropriate provisions
shall be made with respect to the rights and interest of the Holder so that the
provisions hereof shall thereafter be applicable with respect to any shares of
stock or other securities and property deliverable upon exercise hereof, and
appropriate adjustments shall be made to the purchase price per Warrant Share
payable hereunder, provided the aggregate purchase price shall remain the
same.

    

    5.3           Computation of Adjusted
Exercise Price. Commencing on the Issue Date and continuing until this
Warrant is either exercised in full or expires, in case the Company shall at any
time after the date hereof issue or sell any (a) shares of Common Stock or
preferred shares convertible into Common Stock, or (b) debt, warrants, options
or other instruments or securities which are convertible into or exercisable for
shares of Common Stock (together herein referred to as “Equity
Securities”), in each case for consideration (or with a conversion price)
per common share less than the Exercise Price in effect immediately prior to the
issuance or sale of such securities or instruments, or without consideration,
then forthwith upon such issuance or sale, the Exercise Price shall (until
another such issuance or sale) be automatically reduced to the price (calculated
to the nearest full cent) equal to the price (or conversion price) of any such
securities or instruments. For the purposes of this Section 5.3, the term
Exercise Price shall mean the Exercise Price per share set forth in Section 1
hereof, as adjusted from time to time pursuant to the provisions of this
Section. 

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    5.4           Notice of
Adjustment.  Promptly upon the occurrence of an event which
would require an adjustment in the number or kind of shares purchasable upon
exercise of this Warrant or in the Exercise Price, and in any event not less
than ten (10) business days after such an occurrence, the Company shall notify
the Holder in writing of the event, disclose to the Holder the new Exercise
Price, the number of Shares or other securities or property thereafter
purchasable upon exercise of this Warrant, and provide to the Holder copies of
all relevant documents related to such event, even if the event was or should be
disclosed publicly.

    

    6.         Certificate as to
Adjustments.  In each case of any adjustment or readjustment in
the shares of Common Stock issuable on the exercise of the Warrants, the Company
at its expense will promptly cause its Chief Financial Officer or other
appropriate designee to compute such adjustment or readjustment in accordance
with the terms of the Warrant and prepare a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based, including a statement of (a) the
consideration received or receivable by the Company for any additional shares of
Common Stock issued or sold or deemed to have been issued or sold, (b) the
number of shares of Common Stock outstanding or deemed to be outstanding, and
(c) the Exercise Price and the number of shares of Common Stock to be received
upon exercise of this Warrant, in effect immediately prior to such adjustment or
readjustment and as adjusted or readjusted as provided in this Warrant. The
Company will forthwith mail a copy of each such certificate to the Holder of the
Warrant and any Warrant Agent of the Company (appointed pursuant to Section 8
hereof).

    

    7.           Transfer to Comply with the
Securities Act.  This Warrant has not been registered under the
1933 Act and has been issued to the Holder for investment and not with a view to
the distribution of either the Warrant or the Warrant Shares.  Neither
this Warrant nor any of the Warrant Shares or any other security issued or
issuable upon exercise of this Warrant may be sold, transferred, pledged or
hypothecated without (i) an effective registration statement under the Act
relating to such security, or (ii) an opinion of counsel reasonably satisfactory
to the Company that registration is not required under the Act.  Each
certificate for the Warrant, the Warrant Shares and any other security issued or
issuable upon exercise of this Warrant shall contain a legend on the face
thereof, in form and substance satisfactory to counsel for the Company, setting
forth the restrictions on transfer contained in this Section.  Any
such transfer shall be accompanied by a transferor assignment substantially in
the form of Exhibit
B (the “Transferor
Assignment”), executed by the transferor and the transferee and submitted
to the Company.  Upon receipt of the duly executed Transferor
Assignment, the Company shall register the Transferee thereon as the new Holder
on the books and records of the Company and such Transferee shall be deemed a
“registered holder” or “registered assign” for all purposes hereunder, and shall
have all the rights of the Holder hereof.

    

    8.           Failed
Exercise.  In the event that the Holder exercises this Warrant
in whole or in part pursuant to any provision of Section 2 hereof, and the
Company is unable or otherwise fails to deliver all or part of the Warrant
Shares (a “Failed Exercise”) due to limitations imposed on the Company by virtue
of Rule 713 (the “Rule 713 Limitations”), then the Company shall be obligated to
(i) promptly, but in no event later than one hundred twenty (120) days from such
Failed Exercise, obtain the required stockholder approval to remove the Rule 713
Limitations, and (ii) on the first date that such Rule 713 Limitations no longer
apply, deliver to the Holder the number of Warrant Shares required by the Failed
Exercise (without regard to the Rule 713 Limitations); provided, however, that
the Holder may elect to retract the Failed Exercise at any time prior to the
delivery of the Warrant Shares, whereupon the Holder shall retain all rights
under this Warrant as if the Failed Exercise had never occurred.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    9.           Warrant
Agent.  The Company may, by written notice to the Holder of the
Warrant, appoint an agent (a “Warrant
Agent”) for the purpose of issuing Common Stock on the exercise of this
Warrant pursuant hereto, exchanging this Warrant pursuant hereto, and replacing
this Warrant pursuant hereto, or any of the foregoing, and thereafter any such
issuance, exchange or replacement, as the case may be, shall be made at such
office by such Warrant Agent.

    

    10.           Transfer on the Company’s
Books.  Until this Warrant is transferred on the books of the
Company, the Company may treat the registered holder hereof as the absolute
owner hereof for all purposes, notwithstanding any notice to the
contrary.

    

    11.           Notices.  Any
notice required or permitted hereunder shall be given in manner provided in the
subsection headed “Notices” in the Purchase Agreement, the terms of which are
incorporated herein by reference.

    

    12.          Supplements and Amendments;
Whole Agreement.  This Warrant may be amended or supplemented
only by an instrument in writing signed by the parties hereto.  This
Warrant contains the full understanding of the parties hereto with respect to
the subject matter hereof and thereof and there are no representations,
warranties, agreements or understandings other than expressly contained herein
and therein.

    

    13.           Governing
Law.  This Warrant shall be governed by, and construed in
accordance with, the internal laws of the State of Illinois, without reference
to the choice of law provisions thereof.  The Company and, by
accepting this Warrant, the Holder, each irrevocably submits to the exclusive
jurisdiction of the courts of the State of Illinois located in Cook County and
any United States District Court for the Northern District of Illinois for the
purpose of any suit, action, proceeding or judgment relating to or arising out
of this Warrant and the transactions contemplated hereby.  Service of
process in connection with any such suit, action or proceeding may be served on
each party hereto anywhere in the world by the same methods as are specified for
the giving of notices under this Warrant.  The Company and, by
accepting this Warrant, the Holder, each irrevocably consents to the
jurisdiction of any such court in any such suit, action or proceeding and to the
laying of venue in such court.  The Company and, by accepting this
Warrant, the Holder, each irrevocably waives any objection to the laying of
venue of any such suit, action or proceeding brought in such courts and
irrevocably waives any claim that any such suit, action or proceeding brought in
any such court has been brought in an inconvenient forum.  EACH OF THE COMPANY AND, BY ITS
ACCEPTANCE HEREOF, THE HOLDER HEREBY WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY
IN ANY LITIGATION WITH RESPECT TO THIS WARRANT AND REPRESENTS THAT COUNSEL HAS
BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

       

    

    14.           Remedies.  The
Company stipulates that the remedies at law of the Holder of this Warrant in the
event of any default or threatened default by the Company in the performance of
or compliance with any of the terms of this Warrant are not and will not be
adequate and that, to the fullest extent permitted by law, such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.

    

    15.           Counterparts.  This
Warrant may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.  Signature delivered via facsimile or email shall be
considered original signatures for purposes hereof.

    

    16.           Descriptive
Headings.  Descriptive headings of the several Sections of this
Warrant are inserted for convenience only and shall not control or affect the
meaning or construction of any of the provisions hereof.

    

    

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        7

        
          

        

      

      
         

      

    

     

     

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

    

    Dated:
April 8, 2010

     

    
      
        
          
            
              
                	 	RADIENT
      PHARMACEUTICALS CORPORATION
	 	 	 
	 	 	 
	 	
                        By:

                      	___________________________________________
	 	 
      	
                        Douglas
      C. MacLellan, Chief Executive
Officer

                      

              

            

          

        

      

    

     

     

     

     

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    EXHIBIT
A

    

    NOTICE OF
EXERCISE OF WARRANT

    

    
      	
              TO: 

            	
              RADIENT
      PHARMACEUTICALS CORPORATION

              ATTN:
      _______________

              VIA
      FAX TO:
(    )______________

            

    

              

               The
undersigned hereby irrevocably elects to exercise the right, represented by the
Warrant to Purchase Shares of Common Stock dated as of April 8, 2010, to
purchase _________ shares of the Common
Stock, $0.001 par value (“Common
Stock”), of RADIENT
PHARMACEUTICALS CORPORATION, and tenders herewith payment in accordance
with Section 2 of said Common Stock Purchase Warrant, as follows:

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          	
                                                                  _______

                                                                	
                                                                  CASH:
      $__________________________ = (Exercise Price x
Exercise

                                                                
	      
                                                                  Shares)

                                                                	
                                                                   

                                                                
	 
      	 
      
	
                                                                  _______

                                                                	
                                                                  Payment
      is being made by:

                                                                
	 
      	
                                                                  _____             
      enclosed
      check

                                                                	
                                                                   

                                                                
	 
      	
                                                                  _____             
      wire
      transfer

                                                                	
                                                                   

                                                                
	 
      	
                                                                  _____             
      other

                                                                	
                                                                   

                                                                
	 
      	 
      	 
      
	
                                                                  _______

                                                                	
                                                                  CASHLESS
      EXERCISE:

                                                                
	 
      	 
      
	 
      	
                                                                  Net
      number of Warrant Shares to be issued to Holder:
______*

                                                                
	 
      	 
      
	 
      	
                                                                  *
      based on:     Current
      Market Value - (Exercise Price x Exercise
Shares)

                                                                
	 
      	                                            
      Adjusted Price of Common Stock
	 
      	 
      
	 
      	
                                                                  Where:

                                                                	 
      	 
      
	 
      	
                                                                  Market
      Price of Common Stock [“MP”]

                                                                	
                                                                  =

                                                                	
                                                                  $____________

                                                                
	 
      	
                                                                  Current
      Market Value [MP x Exercise Shares] =

                                                                	
                                                                	      
                                                                  $____________

                                                                
	 
      	
                                                                  Exercise
      Price

                                                                	
                                                                  =

                                                                	
                                                                  $____________

                                                                
	
                                                                	
                                                                  Adjusted
      Price of Common Stock

                                                                	
                                                                  =

                                                                	      
                                                                  $____________

                                                                

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    It is the
intention of the Holder to comply with the provisions of Section 2.2 of the
Warrant regarding certain limits on the Holder’s right to exercise
thereunder.  The Holder believes this exercise complies with the
provisions of said Section 2.2.  Nonetheless, to the extent that,
pursuant to the exercise effected hereby, the Holder would have more shares than
permitted under said Section, this notice should be amended and revised, ab initio, to refer to the
exercise which would result in the issuance of shares consistent with such
provision.  Any exercise above such amount is hereby deemed void and
revoked.

    

    As
contemplated by the Warrant, this Notice of Exercise is being sent by facsimile
to the fax number and officer indicated above.

    

    
      
         

      

      
        A-1

        
          

        

      

      
         

      

    

     

    If this
Notice of Exercise represents the full exercise of the outstanding balance of
the Warrant, the Holder either (1) has previously surrendered the Warrant to the
Company or (2) will surrender (or cause to be surrendered) the Warrant to the
Company at the address indicated above by express courier within five (5)
Trading Days after delivery or facsimile transmission of this Notice of
Exercise.

    

    The
certificates representing the Warrant Shares should be transmitted by the
Company to the Holder

    

                                    _______
via express courier, or

    

                                    _______
by electronic transfer

    

    after
receipt of this Notice of Exercise (by facsimile transmission or otherwise)
to:

    

                                    _____________________________________

                                    _____________________________________

                                    _____________________________________

    

    

    Dated: _____________________

    

    

    *

    

    

    By:     ________________________________

    
          
________________________________

    Printed Name (and title, if
applicable)

     

     

    
      
         

      

      
        A-2

        
          

        

      

      
         

      

    

    

    EXHIBIT
B

    

    FORM OF
TRANSFEROR ENDORSEMENT

    (To be
signed only on transfer of Warrant)

    

    For value
received, the undersigned hereby sells, assigns, and transfers unto the
person(s) named below under the heading “Transferees”
the right represented by the within Warrant to purchase the percentage and
number of shares of Common Stock of RADIENT PHARMACEUTICALS CORPORATION to which
the within Warrant relates specified under the headings “Percentage
Transferred” and “Number
Transferred,” respectively, opposite the name(s) of such person(s) and
appoints each such person Attorney to transfer its respective right on the books
of RADIENT PHARMACEUTICALS CORPORATION with full power of substitution in the
premises.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  	
                                          Transferees

                                        	
                                          Percentage Transferred

                                        	Number Transferred
	 
      	 	 
      	 
      
	 
      	 	 
      	 
      
	 
      	 	 
      	 
      
	 
      	 	 
      	 
      
	
                                          Dated:___________,
      ______

                                        	 	 
      	 
      
	 
      	 	 
      	 
      
	 	 	___________________________________________ 
	 	 	 	 
	 	 	 	 
	 
      	 	
                                          [Transferor Name must conform to the name
      of 

                                          Holder
      as specified on face of Warrant]

                                        
	 	 	 
	 
      	 	 
      	 
      
	 
      	 	
                                          By:_________________________________________

                                        
	 
      	 	 
      	 
      
	 
      	 	
                                          Name:
      ______________________________________

                                        

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    Signed in
the presence of:

    

    _________________________

    (Name)

    

    

    ACCEPTED
AND AGREED:

    

    _________________________

    [TRANSFEREE]

    

    By:
_______________________

    Name:
_____________________NEITHER
THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE
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 AND THE SECURITIES ISSUABLE UPON EXERCISE OF
THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN SECURED BY SUCH SECURITIES.

    

    COMMON
STOCK PURCHASE WARRANT

    

     NEURALSTEM,
INC.

    

    
      
        
          
            
              
                
                  
                    	
                            Warrant
      Shares:  ______

                          	
                            Initial
      Exercise Date:

                          	
                            __________

                          

                  

                

              

            

          

        

      

    

     

    THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies
that, for value received, __________ (the “Holder”) is entitled,
upon the terms and subject to the limitations on exercise and the conditions
hereinafter set forth, at any time on or after the date hereof (the “Initial Exercise
Date”) and on or prior to the close of business on the ten year
anniversary of the Initial Exercise Date (the “Termination Date”)
but not thereafter, to subscribe for and purchase from Neuralstem, Inc., a
Delaware corporation (the “Company”), up to
________ shares (the “Warrant Shares”) of
Common Stock.  The purchase price of one share of Common Stock under
this Warrant shall be equal to the Exercise Price, as defined in Section
2(b).

     

    Section
1.         Definitions.

     

    “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 Holder, any investment fund or managed account that is managed on a
discretionary basis by the same investment manager as such Holder will be deemed
to be an Affiliate of such Holder.

     

    “Board of Directors”
means the board of directors of the Company.

     

    “Business Day” means
any day except any Saturday, any Sunday, any day which is a federal legal
holiday in the United States or any day on which banking institutions in the
State of New York are authorized or required by law or other governmental action
to close.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    “Commission” means the
Securities and Exchange Commission.

     

    “Common Stock” means
the common stock of the Company, par value $0.001 per share, and any other class
of securities into which such securities may hereafter be reclassified or
changed into.

     

    “Exchange Act” means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.

    

    “Market Price” means:
(a) the closing price reported on the Company’s Trading Market on the Trading
Day immediately preceding any applicable measuring date, (b) if no trading
occurs on the Trading Day immediately preceding any applicable measurement date,
then the closing bid price reported on such Trading Market, (c) if the Company’s
Common Shares are not then listed on a Trading Market, the price offered by any
acquirer in a Fundamental Transaction, or (d) in all other cases, the fair
market value of a share of Common Stock as determined in good faith by the
Company’s Board of Directors at their sole and absolute discretion.

     

    “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.

     

    “Securities Act” means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.

     

    “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, and the OTC Bulletin Board.

     

    “Transfer Agent” means
American Stock Transfer and Trust Company, the current transfer agent of the
Company with a mailing address of 59 Maiden Lane, New York, New York 10038 and a
facsimile number of (718) 921-8336, and any successor transfer agent of the
Company.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    Section
2.         
    Exercise.

     

    a)         
  Exercise
of Warrant.  Exercise of the purchase rights represented by
this Warrant may be made, in whole or in part, at any time or times on or after
the Initial Exercise Date and on or before the Termination Date by delivery to
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 the Holder
appearing on the books of the Company) of a duly executed facsimile copy of the
Notice of Exercise Form annexed hereto; and, within 3 Business Days of the date
said Notice of Exercise is delivered to the Company, the Company shall have
received  payment of the aggregate Exercise Price of the shares
thereby purchased by wire transfer or cashier’s check drawn on a United States
bank.  Notwithstanding anything herein to the contrary, the Holder
shall not be required to physically surrender this Warrant to the Company until
the Holder has purchased all of the Warrant Shares available hereunder and the
Warrant has been exercised in full, in which case, the Holder shall surrender
this Warrant to the Company for cancellation within 3 Business Days of the date
the final Notice of Exercise is delivered to the Company.  Partial
exercises of this Warrant resulting in purchases of a portion of the total
number of Warrant Shares available hereunder shall have the effect of lowering
the outstanding number of Warrant Shares purchasable hereunder in an amount
equal to the applicable number of Warrant Shares purchased.  The
Holder and the Company shall maintain records showing the number of Warrant
Shares purchased and the date of such purchases.  The Company shall
deliver any objection to any Notice of Exercise Form within 1 Business Day of
receipt of such notice.  In the event of any dispute or discrepancy,
the records of the Company shall be controlling and determinative in the absence
of manifest error. The Holder
and any assignee, by acceptance of this Warrant, acknowledge and agree that, by
reason of the provisions of this paragraph, following the purchase of a portion
of the Warrant Shares hereunder, the number of Warrant Shares available for
purchase hereunder at any given time may be less than the amount stated on the
face hereof.

     

    b)         
  Exercise
Price.  The exercise price per share of the Common Stock under
this Warrant shall be $______,
subject to adjustment hereunder (the “Exercise
Price”).

     

    c)        
   Cashless
Exercise.  At any time after the Initial Exercise Date, subject
to any restrictions on exercisability contained herein, this Warrant may also be
exercised at such time 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:

     

    
      
        	 	
                (A)

              	
                 =
      the Market Price on the Business Day immediately preceding the date of
      such election;

              

      

    

     

    
      
        	 	
                (B) 

              	
                 =
      the Exercise Price of this Warrant, as adjusted;
  and

              

      

    

    

    
      
        	 	
                (X)
      

              	
                 =
      the number of Warrant Shares issuable upon exercise of this Warrant in
      accordance with the terms of this Warrant by means of a cash exercise
      rather than a cashless
exercise.

              

      

    

    

    Notwithstanding
anything herein to the contrary, and provided this Warrant is then in the money,
on the Termination Date this Warrant shall be automatically exercised via
cashless exercise pursuant to this Section 2(c).

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    d)      
     Exercise
Limitations.

     

    i.           The
Company shall not effect any exercise of this Warrant, and a Holder shall not
have the right to exercise any portion of this Warrant, pursuant to Section 2 or
otherwise, to the extent that after giving effect to such issuance after
exercise as set forth on the applicable Notice of Exercise, the Holder (together
with the Holder’s Affiliates, and any other person or entity acting as a group
together with the Holder or any of the Holder’s Affiliates), would beneficially
own in excess of the Beneficial Ownership Limitation (as defined below). 
For purposes of the foregoing sentence, the number of shares of Common Stock
beneficially owned by the Holder and its Affiliates shall include the number of
shares of Common Stock issuable upon exercise of this Warrant with respect to
which such determination is being made, but shall exclude the number of shares
of Common Stock which would be issuable upon (A) exercise of the remaining,
nonexercised portion of this Warrant beneficially owned by the Holder or any of
its Affiliates and (B) exercise or conversion of the unexercised or nonconverted
portion of any other securities of the Company (including, without limitation,
any other  Common Stock Equivalents) subject to a limitation on
conversion or exercise analogous to the limitation contained herein beneficially
owned by the Holder or any of its affiliates.  Except as set forth in the
preceding sentence, for purposes of this Section 2(d), beneficial ownership
shall be calculated in accordance with Section 13(d) of the Exchange Act and the
rules and regulations promulgated thereunder, it being acknowledged by the
Holder that the Company is not representing to the Holder that such calculation
is in compliance with Section 13(d) of the Exchange Act and the Holder is solely
responsible for any schedules required to be filed in accordance
therewith.   To the extent that the limitation contained in this
Section 2(d) applies, the determination of whether this Warrant is exercisable
(in relation to other securities owned by the Holder together with any
Affiliates) and of which portion of this Warrant is exercisable shall be in the
sole discretion of the Holder, and the submission of a Notice of Exercise shall
be deemed to be the Holder’s determination of whether this Warrant is
exercisable (in relation to other securities owned by the Holder together with
any Affiliates) and of which portion of this Warrant is exercisable, in each
case subject to the Beneficial Ownership Limitation, and the Company shall have
no obligation to verify or confirm the accuracy of such
determination.   In addition, a determination as to any group
status as contemplated above shall be determined in accordance with Section
13(d) of the Exchange Act and the rules and regulations promulgated
thereunder.  For purposes of this Section 2(d), in determining the
number of outstanding shares of Common Stock, a Holder may rely on the number of
outstanding shares of Common Stock as reflected in (x) the Company’s most recent
periodic or annual report, as the case may be, (y) a more recent public
announcement by the Company or (z) any other notice by the Company or the
Transfer Agent setting forth the number of shares of Common Stock
outstanding.  Upon the written or oral request of a Holder, the Company
shall within two Trading Days confirm orally and in writing to the Holder the
number of shares of Common Stock then outstanding.  In any case, the number
of outstanding shares of Common Stock shall be determined after giving effect to
the conversion or exercise of securities of the Company, including this Warrant,
by the Holder or its Affiliates since the date as of which such number of
outstanding shares of Common Stock was reported.  The “Beneficial Ownership
Limitation” shall be 4.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of shares of Common
Stock issuable upon exercise of this Warrant.  The Holder, upon not
less than 61 days’ prior notice to the Company, may increase or decrease the
Beneficial Ownership Limitation provisions of this Section 2(d), provided that
the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of
shares of the Common Stock outstanding immediately after giving effect to the
issuance of shares of Common Stock upon exercise of this Warrant held by the
Holder and the provisions of this Section 2(d) shall continue to
apply.  Any such increase or decrease will not be effective until the
61st
day after such notice is delivered to the Company.  The provisions of
this paragraph shall be construed and implemented in a manner otherwise than in
strict conformity with the terms of this Section 2(c) to correct this paragraph
(or any portion hereof) which may be defective or inconsistent with the intended
Beneficial Ownership Limitation herein contained or to make changes or
supplements necessary or desirable to properly give effect to such limitation.
The limitations contained in this paragraph shall apply to a successor holder of
this Warrant.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    ii.           The
Company shall not effect any exercise of this Warrant, and a Holder shall not
have the right to exercise any portion of this Warrant, pursuant to Section 2 or
otherwise, until such time as the Company receives approval from its primary
Trading Market for the listing of the Warrant Shares.

     

    e)           Mechanics of
Exercise.

     

    i.      Delivery of Certificates
Upon Exercise.  Certificates for shares purchased hereunder
shall be by physical delivery to the address specified by the Holder in the
Notice of Exercise within 15 Business Days from the delivery to the Company of
the Notice of Exercise Form, surrender of this Warrant (if required) and payment
of the aggregate Exercise Price as set forth above (the “Warrant Share Delivery
Date”).  This Warrant shall be deemed to have been exercised on
the date the Exercise Price is received by the Company.  The Warrant
Shares shall be deemed to have been issued, and Holder or any other person so
designated to be named therein shall be deemed to have become a holder of record
of such shares for all purposes, as of the date the Warrant has been exercised
by payment to the Company of the Exercise Price (or by cashless exercise, if
permitted) and all taxes required to be paid by the Holder, if any, pursuant to
Section 2(e)(v) prior to the issuance of such shares, have been
paid.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    ii.     Delivery of New Warrants
Upon Exercise.  If this Warrant shall have been exercised in
part, the Company shall, at the request of a Holder and upon surrender of this
Warrant certificate, 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.

     

    iii.    Rescission
Rights.  If the Company fails to cause the transfer agent of
the Company to transmit to the Holder a certificate or the certificates
representing the Warrant Shares pursuant to Section 2(e)(i) by the Warrant Share
Delivery Date, then, the Holder will have the right to rescind such
exercise.

     

    iv.    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, at its election, either pay a cash adjustment
in respect of such final fraction in an amount equal to such fraction multiplied
by the Exercise Price or round up to the next whole share.

     

    v.     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 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.

     

    vi.    Closing of
Books.  The Company will not close its stockholder books or
records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    Section
3.              Certain
Adjustments.

     

    a)          
 Stock Dividends
and Splits. If the Company, at any time while this Warrant is
outstanding: (i) pays a stock dividend or otherwise makes a distribution or
distributions on shares of its Common Stock or any other equity or equity
equivalent securities payable in shares of Common Stock (which, for avoidance of
doubt, shall not include any shares of Common Stock issued by the Company upon
exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock
into a larger number of shares, (iii) combines (including by way of reverse
stock split) outstanding shares of Common Stock into a smaller number of shares
or (iv) issues by reclassification of shares of the Common Stock any shares of
capital stock of the Company, then in each case the Exercise Price shall be
multiplied by a fraction of which the numerator shall be the number of shares of
Common Stock (excluding treasury shares, if any) outstanding immediately before
such event and of which the denominator shall be the number of shares of Common
Stock outstanding immediately after such event and the number of shares issuable
upon exercise of this Warrant shall be proportionately adjusted such that the
aggregate Exercise Price of this Warrant shall remain unchanged.  Any
adjustment made pursuant to this Section 3(a) shall become effective immediately
after the record date for the determination of stockholders entitled to receive
such dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or
re-classification.

     

    b)           
Calculations.
All calculations under this Section 3 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be. For purposes of this Section 3,
the number of shares of Common Stock deemed to be issued and outstanding as of a
given date shall be the sum of the number of shares of Common Stock (excluding
treasury shares, if any) issued and outstanding.

     

    c)           
Notice to
Holder.

     

    i.      Adjustment to Exercise
Price. Whenever the Exercise Price is adjusted pursuant to any provision
of this Section 3, the Company shall promptly mail to the Holder a notice
setting forth the Exercise Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment.  Notwithstanding the
forgoing, in the event the Company makes a public disclosure with regard to the
Exercise Price adjustment, such disclosure shall be deemed notice to the
Holders.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    ii.     Notice to Allow Exercise by
Holder. If (A) the Company shall declare a dividend (or any other
distribution in whatever form) on the Common Stock, (B) the Company shall
declare a special nonrecurring cash dividend on or a redemption of the Common
Stock, (C) the Company shall authorize the granting to all holders of the Common
Stock rights or warrants to subscribe for or purchase any shares of capital
stock of any class or of any rights, (D) the approval of any stockholders of the
Company shall be required in connection with any reclassification of the Common
Stock, any consolidation or merger to which the Company is a party, any sale or
transfer of all or substantially all of the assets of the Company, of any
compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property, or (E) the Company shall authorize the voluntary
or involuntary dissolution, liquidation or winding up of the affairs of the
Company, then, in each case, the Company shall cause to be mailed to the Holder
at its last address as it shall appear upon the Warrant Register of the Company,
at least 20 calendar days prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution, redemption, rights or
warrants, or if a record is not to be taken, the date as of which the holders of
the Common Stock of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date on which
such reclassification, consolidation, merger, sale, transfer or share exchange
is expected to become effective or close, and the date as of which it is
expected that holders of the Common Stock of record shall be entitled to
exchange their shares of the Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer or
share exchange; provided that the failure to mail such notice or any defect
therein or in the mailing thereof shall not affect the validity of the corporate
action required to be specified in such notice.  The Holder is
entitled to exercise this Warrant during the period commencing on the date of
such notice to the effective date of the event triggering such notice.
Notwithstanding the forgoing, in the event the Company makes a public disclosure
with regard to the subject matter of this Section 3(d)(ii), such disclosure
shall be deemed notice to the Holders.

     

    Section
4.              Transfer of
Warrant.

     

    a)          
 Transferability.  Subject
to compliance with any applicable securities laws and the conditions set forth
in Section 4(d) hereof, this Warrant and all rights hereunder (including,
without limitation, any registration rights) are transferable, in whole or in
part, upon surrender of this Warrant at the principal office of the Company or
its designated agent, 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.  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, as applicable, 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.  The Warrant, if
properly assigned, may be exercised by a new holder for the purchase of Warrant
Shares without having a new Warrant issued.  Notwithstanding the
foregoing, upon request by Holder, the Company will issue a new Warrant or
Warrants in the names of any assignee(s) of Holder at no charge to Holder or the
assignee(s). 

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    b)          
 New
Warrants. 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 4(a) and 4(d), 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. All Warrants issued on transfers or
exchanges shall be dated the original Issue Date and shall be identical with
this Warrant except as to the number of Warrant Shares issuable pursuant
thereto.

     

    c)          
 Warrant
Register. The Company shall register this Warrant, upon records to be
maintained by the Company for that purpose (the “Warrant Register”),
in the name of the record Holder hereof from time to time.  The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the
contrary.

     

    d)           Transfer
Restrictions. If, at the time of the surrender of this Warrant in connection with
any transfer of this Warrant, the transfer of this Warrant shall not be
eligible for resale without volume or
manner-of-sale restrictions pursuant to Rule 144, the Company may require, as a condition of allowing
such transfer, that the Holder or transferee of this Warrant, as the case may be, may be required by the Company to provide an opinion of
counsel with regard to such assignment or transfer.

     

    Section
5.              Miscellaneous.

     

    a)          
 No Rights as
Stockholder Until Exercise.  This Warrant does not entitle the
Holder to any voting rights or other rights as a stockholder of the Company
prior to the exercise hereof as set forth in Section 2(e)(i).

     

    b)          
 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, in the case of the
Warrant, 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.

     

    c)          
 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 not be a Business Day, then, such action may be taken or such right may be
exercised on the next succeeding Business Day.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    d)       
    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 Trading Market upon which the
Common Stock may be listed.  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 created by the Company in respect of the
issue thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue).

     

    Except
and to the extent as waived or consented to by the Holder, 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 as set forth in this Warrant against
impairment.  Without limiting the generality of the foregoing, the
Company will (i) 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, (ii) take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
Warrant Shares upon the exercise of this Warrant and (iii) 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.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    e)      
     Governing Law and
Venue. All questions concerning the construction, validity, enforcement
and interpretation of this Warrant 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 Warrant (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 Maryland.  Each party
hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the state of Maryland for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or
proceeding is improper or is an inconvenient venue for such
proceeding.  Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in
effect for notices and agrees that such service shall constitute good and
sufficient service of process and notice thereof.  Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
other manner permitted by law.   If either party shall commence
an action or proceeding to enforce any provisions of this Warrant, 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
proceedings or questions concerning the construction, validity, enforcement and
interpretation of this Warrant.

     

    f)      
     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.

     

    g)    
       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 the fact that all rights hereunder terminate on the Termination
Date.  If 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.

     

    h)   
        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 prior to 5:30 p.m. (New York City time)
on a Trading Day, (b) the date of transmission, if such notice or communication
is delivered via electronic mail prior to 5:30 p.m. (New York City time) on a
Trading Day, (c) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile or electronic mail on a day
that is not a Trading Day or later than 5:30 p.m. (New York City time) on any
Trading Day, the date of the public disclosure if such notice is communicated
via public disclosure (d) the second Trading Day following the date of mailing,
if sent by U.S. nationally recognized overnight courier service, or (e) upon
actual receipt by the party to whom such notice is required to be
given.  The address  for such notices and communications
shall be:  (i) if to Holder, at its address of records as contained in
the Warrant Register, and (ii) if to Company, at its corporate
headquarters.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    i)       
     Limitation of
Liability.  No provision hereof, in the absence of any
affirmative action by Holder to exercise this Warrant 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.

     

    j)     
       Remedies.  The
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
by it of the provisions of this Warrant and hereby agrees to waive and not to
assert the defense in any action for specific performance that a remedy at law
would be adequate.

     

    k)     
      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 the Holder or holder of Warrant Shares.

     

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

     

    m)           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.

     

    n)   
        Headings.  The
headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.

     

    

    ********************

    

    (Signature
Pages Follow)

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    

    IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized as of the date first above
indicated.

    

    
      
        	
                NEURALSTEM,
      INC.

              
	 
      	 
      
	
                By:

              	
                    

              
	 
      	
                Name:

              
	 
      	
                Title:

              

      

    

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    

    NOTICE
OF EXERCISE

    

    TO:      NEURALSTEM,
INC.

    

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

     

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

     

     ̈ in
lawful money of the United States; or

     

     ̈ the
cancellation of such number of Warrant Shares as is necessary, in accordance
with the formula set forth in subsection 2(c), to exercise this Warrant with
respect to the maximum number of Warrant Shares purchasable pursuant to the
cashless exercise procedure set forth in subsection 2(c).

     

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

     

    _______________________________

    

    

    The
Warrant Shares shall be delivered by the physical delivery of a certificate
to:

    

    _______________________________

    

    _______________________________

    

    _______________________________

    

    (4)  [If required by
applicable regulations] Accredited
Investor.  The undersigned is an “accredited investor” as
defined in Regulation D promulgated under the Securities Act of 1933, as
amended.

    

    [SIGNATURE
OF HOLDER]

    

    Name of
Investing Entity:
_______________________________________________________________________________

    Signature of Authorized Signatory of
Investing Entity:
________________________________________________________

    Name of
Authorized Signatory:
__________________________________________________________________________

    Title of
Authorized Signatory:
___________________________________________________________________________

    Date:
_______________________________________________________________________________________________

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    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, [____] all of or [_______] shares of 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 a fiduciary or
other representative capacity should file proper evidence of authority to assign
the foregoing Warrant.

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