Document:

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 ______ 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.

     

    

    
      
        
        

      

      
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    “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.

     

    “Commission” means the
Securities and Exchange Commission.

     

    “Common Stock” means
the common stock of the Company, par value $0.01 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 bid price reported on the Company’s Trading Market on the
Trading Day immediately preceding any applicable measuring date, (b) 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 (b) in all other
cases, the fair market value of a share of Common Stock as determined by the
Company’s Board of Directors.

     

    “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, or
the New York Stock Exchange.

     

    “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.

     

    “VWAP” means, for any
date, the price determined by the first of the following clauses that applies:
(a) if the Common Stock is then listed or quoted on a Trading Market, the daily
volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed
or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m.
New York City time to 4:02 p.m. New York City time); (b)  if the OTC
Bulletin Board is not a Trading Market, the volume weighted average price of the
Common Stock for such date (or the nearest preceding date) on the OTC Bulletin
Board; (c) if the Common Stock is not then listed or quoted on the OTC Bulletin
Board and if prices for the Common Stock are then reported in the “Pink Sheets”
published by Pink Sheets, LLC (or a similar organization or agency succeeding to
its functions of reporting prices), the most recent bid price per share of the
Common Stock so reported; or (d) in all other cases, the fair market value
of a share of Common Stock as determined by an independent appraiser selected in
good faith by the Purchasers of a majority in interest of the Securities then
outstanding and reasonably acceptable to the Company, the fees and expenses of
which shall be paid by the Company.

     

    
      
        
        

      

      
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    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”).

     

    
      
        
        

      

      
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    c)           Cashless
Exercise.  This Warrant may also be exercised 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
      VWAP on the Trading 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.

              

      

    

    

    d)           Exercise Limitations.
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 five 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(d) 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

     

    
      
        
        

      

      
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    e)           Mechanics of
Exercise.

     

    i.      Delivery of Certificates
Upon Exercise.  Certificates for shares purchased hereunder
shall be transmitted by the Transfer Agent to the Holder by crediting the
account of the Holder’s prime broker with the Depository Trust Company through
its Deposit Withdrawal Agent Commission (“DWAC”) system if the
Company is a participant in such system and either (A) there is an effective
Registration Statement permitting the resale of the Warrant Shares by the Holder
or (B) the shares are eligible for resale without volume or manner-of-sale
limitations pursuant to Rule 144, and otherwise by physical delivery to the
address specified by the Holder in the Notice of Exercise within 3 Trading 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 (“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.

     

    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.

     

    
      
        
        

      

      
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    iii.           Rescission
Rights.  If the Company fails to cause its the Transfer Agent
to transmit to the Holder a certificate or 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.

     

    

    
      
        
        

      

      
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    Section
3.             Certain
Adjustments.

     

    a)           Stock Dividends and
Splits. If the Company, at any time while this Warrant is outstanding:
(A) pays a stock dividend or otherwise make 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), (B) subdivides outstanding shares of Common Stock into a larger number
of shares, (C) combines (including by way of reverse stock split) outstanding
shares of Common Stock into a smaller number of shares, or (D) 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)           Voluntary Adjustment By
Company. The Company may at any time during the term of this Warrant
reduce the then current Exercise Price to any amount and for any period of time
deemed appropriate by the Board of Directors of the Company.

     

    d)           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 within 45 calendar days, 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..

     

    
      
        
        

      

      
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    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; (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 5 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.

     

    Section
4.             Transfer of
Warrant.

     

    a)           Transferability.  This
Warrant is not transferable accept upon the express written permission of the
Company.  Upon receipt of such permission, and 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.

     

    
      
        
        

      

      
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    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), 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 Shareholder
Until Exercise.  This Warrant does not entitle the Holder to
any voting rights or other rights as a shareholder of the Company prior to the
exercise hereof 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.

     

    
      
        
        

      

      
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    d)           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 U.S.
District Court for the District of Maryland.  Each party hereby
irrevocably submits to the exclusive jurisdiction of the U.S. District Court for
the District 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.

     

    e)           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.

     

    f)           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.

     

    g)           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 second
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:  (i) if to Holder, at its address of records
as contained in the Warrant Register, and (ii) if to Company, at its corporate
headquarters.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    h)           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.

     

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

     

    j)           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.

     

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

     

    l)        
   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.

     

    m)           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.

     

    

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

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    

    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: 	 
	 	 	 	 

        

      

     

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    

    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

     

    [ ] [if
permitted] 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 to the following DWAC Account Number or by
physical delivery of a certificate to:

    

    
      
        
          
            
              	
                        
      

                    
	 
      
	
                         
      

                    
	 
      
	
                        
      

                    

            

          

        

      

    

    

    (4)          
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.)

    

    ALL
ASSIGNMENTS OF THIS WARRANT REQUIRE THE EXPRESS WRITTEN PERMISSION OF THE
COMPANY.  ANY ASSIGNMENT MADE WITHOUT SUCH PERMISSION SHALL BE NULL
AND VOID ON THE COMPANY’S WARRANT REGISTERY.

    

    

    

    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.Exhibit
4.1

     

    CERTIFICATE
OF NOTICE

    OF

    FIRST
UNITED CORPORATION

    

    First United Corporation, a Maryland
corporation (the “Corporation”), hereby certifies to the State Department of
Assessments and Taxation of Maryland, pursuant to Section 1-207.1 of the
Maryland General Corporation Law (the “MGCL”), as follows:

    

    FIRST:            The
Board of Directors of the Corporation, pursuant to Article FOURTH(b) of the
Corporation’s Amended and Restated Articles of Incorporation (the “Articles”)
and Section 2-105(b)(2) of the MGCL, adopted a resolution pursuant to which a
series of its authorized but unissued preferred stock, having no par value, was
created, with the number of shares thereof and with the voting and other powers,
preferences and relative, participating, optional or other rights, and the
qualifications, limitations and restrictions thereof as are provided in the
Certificate of Designations which is attached hereto as Exhibit
A and
incorporated herein by reference.  

    

    SECOND:       The
undersigned officer of the Corporation acknowledges this Certificate of Notice
to be the corporate act of the Corporation and as to all matters or facts
required to be verified under oath, the undersigned officer acknowledges that to
the best of his knowledge, information and belief, these matters and facts are
true in all material respects and that this statement is made under the
penalties of perjury.

    

    IN WITNESS WHEREOF, the Corporation has
caused this Certificate of Notice to be executed in its name and on its behalf
by its Chairman and Chief Executive Officer and attested to by its Secretary on
this 28th day of
January, 2009.

    

    
      
        
          
            	
                    ATTEST:

                  	 
      	
                    FIRST
      UNITED CORPORATION

                  
	 
      	 
      	 
      	 
      
	
                    /s/ Robert W. Kurtz

                  	 
      	
                    By:

                  	
                    /s/ William B. Grant

                  
	
                    Robert
      W. Kurtz, Secretary

                  	 
      	 
      	
                    William
      B. Grant, Chairman and
CEO

                  

          

        

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    EXHIBIT
A

    

    CERTIFICATE
OF DESIGNATIONS

    OF

    FIXED
RATE CUMULATIVE PERPETUAL PREFERRED STOCK, SERIES A

    OF

    FIRST
UNITED CORPORATION

    

    First United
Corporation, a corporation organized and existing under the laws of the
State of Maryland (the “Corporation”), in
accordance with the provisions of Section 2-105(b) of the Maryland General
Corporation Law, does hereby certify:

    

    The board of directors of the
Corporation (the “Board of Directors”),
in accordance with the Articles of Incorporation, as amended and restated, and
Bylaws, as amended, of the Corporation and applicable law, adopted the following
resolution on creating a series of shares of Preferred Stock of the Corporation
designated as “Fixed Rate Cumulative Perpetual Preferred Stock, Series
A”.

    

    RESOLVED,
that pursuant to the provisions of the Articles of Incorporation, as amended and
restated, and the Bylaws, as amended, of the Corporation and applicable law, a
series of Preferred Stock, having no par value, of the Corporation be and it
hereby is created, and that the designation and number of shares of such series,
and the voting and other powers, preferences and relative, participating,
optional or other rights, and the qualifications, limitations and restrictions
thereof, of the shares of such series, are as follows:

    

    Part 1.  Designation and Number of
Shares. There is hereby created out of the authorized and unissued shares
of preferred stock of the Corporation a series of preferred stock designated as
the “Fixed Rate Cumulative Perpetual Preferred Stock, Series A” (the “Designated Preferred
Stock”).  The authorized number of shares of Designated
Preferred Stock shall be 30,000.

    

    Part 2.  Standard Provisions.
The Standard Provisions contained in Annex
A attached hereto are incorporated herein by reference in their entirety
and shall be deemed to be a part of this Certificate of Designations to the same
extent as if such provisions had been set forth in full herein.

    

    Part. 3. Definitions. The
following terms are used in this Certificate of Designations (including the
Standard Provisions in Annex A hereto) as defined below:

    

    (a)       
“Common Stock”
means the common stock, par value $.01 per share, of the
Corporation.

    

    (b)       
“Dividend Payment
Date” means February 15, May 15, August 15 and November 15 of each
year.

    

    (c)       
“Junior Stock”
means the Common Stock and any other class or series of stock of the Corporation
the terms of which expressly provide that it ranks junior to Designated
Preferred Stock as to dividend rights and/or as to rights on liquidation,
dissolution or winding up of the Corporation.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    (d)       
“Liquidation
Amount” means $1,000 per share of Designated
Preferred Stock.

    

    (e)       
“Minimum
Amount” means $7,500,000.

    

    (f)       
“Parity Stock”
means any class or series of stock of the Corporation (other than Designated
Preferred Stock) the terms of which do not expressly provide that such class or
series will rank senior or junior to Designated Preferred Stock as to dividend
rights and/or as to rights on liquidation, dissolution or winding up of the
Corporation (in each case without regard to whether dividends accrue
cumulatively or non-cumulatively). 

    

    (g)       
“Signing Date”
means the Original Issue Date.  

    

    Part. 4. Certain Voting
Matters. Holders of shares of Designated Preferred Stock will be entitled
to one vote for each such share on any matter on which holders of Designated
Preferred Stock are entitled to vote, including any action by written
consent.

    

    IN WITNESS WHEREOF, First United
Corporation has caused this Certificate of Designations to be signed by William
B. Grant, its Chairman and Chief Executive Officer, this 28th day of
January, 2009.

    

    
      
        
          
            	
                    FIRST
      UNITED CORPORATION:

                  
	 
      
	
                    By:

                  	
                    /s/ William B. Grant

                  
	
                    Name:  William
      B. Grant

                  
	
                    Title:  Chairman
      and Chief Executive
Officer

                  

          

        

      

    

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    ANNEX
A

    STANDARD
PROVISIONS

    

    Section 1.  General Matters. Each
share of Designated Preferred Stock shall be identical in all respects to every
other share of Designated Preferred Stock. The Designated Preferred Stock shall
be perpetual, subject to the provisions of Section 5 of these Standard
Provisions that form a part of the Certificate of Designations. The Designated
Preferred Stock shall rank equally with Parity Stock and shall rank senior to
Junior Stock with respect to the payment of dividends and the distribution of
assets in the event of any dissolution, liquidation or winding up of the
Corporation.

    

    Section 2.  Standard Definitions.
As used herein with respect to Designated Preferred Stock:

    

    (a)       
“Applicable Dividend
Rate” means (i) during the period from the Original Issue Date to, but
excluding, the first day of the first Dividend Period commencing on or after the
fifth anniversary of the Original Issue Date, 5% per annum and (ii) from and
after the first day of the first Dividend Period commencing on or after the
fifth anniversary of the Original Issue Date, 9% per annum.

    

    (b)       
“Appropriate Federal
Banking Agency” means the “appropriate Federal banking agency” with
respect to the Corporation as defined in Section 3(q) of the Federal Deposit
Insurance Act (12 U.S.C. Section 1813(q)), or any successor
provision.

    

    (c)       
“Business
Combination” means a merger, consolidation, statutory share exchange or
similar transaction that requires the approval of the Corporation’s
stockholders.

    

    (d)       
“Business Day”
means any day except Saturday, Sunday and any day on which banking institutions
in the State of New York generally are authorized or required by law or other
governmental actions to close.

    

    (e)       
“Bylaws” means
the bylaws of the Corporation, as they may be amended and restated from time to
time.

    

    (f)       
“Certificate of
Designations” means the Certificate of Designations or comparable
instrument relating to the Designated Preferred Stock, of which these Standard
Provisions form a part, as it may be amended from time to time.

    

    (g)       
“Charter” means
the Corporation’s certificate or articles of incorporation, articles of
association, or similar organizational document.

    

    (h)       
“Dividend
Period” has the meaning set forth in Section 3(a).

    

    (i)       
“Dividend Record
Date” has the meaning set forth in Section 3(a).

    

    (j)       
“Liquidation
Preference” has the meaning set forth in Section
4(a).

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    (k)       
“Original Issue
Date” means the date on which shares of Designated Preferred Stock are
first issued.

    

    (l)       
“Preferred
Director” has the meaning set forth in Section 7(b).

    

    (m)       
“Preferred
Stock” means any and all series of preferred stock of the Corporation,
including the Designated Preferred Stock.

    

    (n)       
“Qualified Equity
Offering” means the sale and issuance for cash by the Corporation to
persons other than the Corporation or any of its subsidiaries after the Original
Issue Date of shares of perpetual Preferred Stock, Common Stock or any
combination of such stock, that, in each case, qualify as and may be included in
Tier 1 capital of the Corporation at the time of issuance under the applicable
risk-based capital guidelines of the Corporation’s Appropriate Federal Banking
Agency (other than any such sales and issuances made pursuant to agreements or
arrangements entered into, or pursuant to financing plans which were publicly
announced, on or prior to October 13, 2008). 

    

    (o)       
“Share Dilution
Amount” has the meaning set forth in Section 3(b).

    

    (p)       
“Standard
Provisions” mean these Standard Provisions that form a part of the
Certificate of Designations relating to the Designated Preferred
Stock.

    

    (q)       
“Successor Preferred
Stock” has the meaning set forth in Section 5(a).

    

    (r)       
“Voting Parity
Stock” means, with regard to any matter as to which the holders of
Designated Preferred Stock are entitled to vote as specified in Sections 7(a) and 7(b) of these Standard
Provisions that form a part of the Certificate of Designations, any and all
series of Parity Stock upon which like voting rights have been conferred and are
exercisable with respect to such matter.

    

    Section 3.  Dividends.

    

    (a)       
Rate.  Holders
of Designated Preferred Stock shall be entitled to receive, on each share of
Designated Preferred Stock if, as and when declared by the Board of Directors or
any  duly authorized committee of the Board of Directors, but only out
of assets legally available therefor, cumulative cash dividends with respect to
each Dividend Period (as defined below) at a rate per annum equal to the
Applicable Dividend Rate on (i) the Liquidation Amount per share of Designated
Preferred Stock and (ii) the amount of accrued and unpaid dividends for any
prior Dividend Period on such share of Designated Preferred Stock, if any. Such
dividends shall begin to accrue and be cumulative from the Original Issue Date,
shall compound on each subsequent Dividend Payment Date (i.e.,
no dividends shall accrue on other dividends unless and until the first Dividend
Payment Date for such other dividends has passed without such other dividends
having been paid on such date) and shall be payable quarterly in arrears on each
Dividend Payment Date, commencing with the first such Dividend Payment Date to
occur at least 20 calendar days after the Original Issue Date. In the event that
any Dividend Payment Date would otherwise fall on a day that is not a Business
Day, the dividend payment due on that date will be postponed to the next day
that is a Business Day and no additional dividends will accrue as a result of
that postponement. The period from and including any Dividend Payment Date to,
but excluding, the next Dividend Payment Date is a “Dividend Period”,
provided that the initial Dividend Period shall be the period from and including
the Original Issue Date to, but excluding, the next Dividend Payment
Date.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

    Dividends that are payable on
Designated Preferred Stock in respect of any Dividend Period shall be computed
on the basis of a 360-day year consisting of twelve 30-day months. The amount of
dividends payable on Designated Preferred Stock on any date prior to the end of
a Dividend Period, and for the initial Dividend Period, shall be computed on the
basis of a 360-day year consisting of twelve 30-day months, and actual days
elapsed over a 30-day month.

    

    Dividends that are payable on
Designated Preferred Stock on any Dividend Payment Date will be payable to
holders of record of Designated Preferred Stock as they appear on the stock
register of the Corporation on the applicable record date, which shall be the
15th calendar day immediately preceding such Dividend Payment Date or such other
record date fixed by the Board of Directors or any duly authorized committee of
the Board of Directors that is not more than 60 nor less than 10 days prior to
such Dividend Payment Date (each, a “Dividend Record
Date”). Any such day that is a Dividend Record Date shall be a Dividend
Record Date whether or not such day is a Business Day.

    

    Holders of Designated Preferred Stock
shall not be entitled to any dividends, whether payable in cash, securities or
other property, other than dividends (if any) declared and payable on Designated
Preferred Stock as specified in this Section 3 (subject to the
other provisions of the Certificate of Designations).

    

    (b)       
Priority of
Dividends.  So long as any share of Designated Preferred Stock
remains outstanding, no dividend or distribution shall be declared or paid on
the Common Stock or any other shares of Junior Stock (other than dividends
payable solely in shares of Common Stock) or Parity Stock, subject to the
immediately following paragraph in the case of Parity Stock, and no Common
Stock, Junior Stock or Parity Stock shall be, directly or indirectly, purchased,
redeemed or otherwise acquired for consideration by the Corporation or any of
its subsidiaries unless all accrued and unpaid dividends for all past Dividend
Periods, including the latest completed Dividend Period (including, if
applicable as provided in Section 3(a) above, dividends
on such amount), on all outstanding shares of Designated Preferred Stock have
been or are contemporaneously declared and paid in full (or have been declared
and a sum sufficient for the payment thereof has been set aside for the benefit
of the holders of shares of Designated Preferred Stock on the applicable record
date). The foregoing limitation shall not apply to (i) redemptions, purchases or
other acquisitions of shares of Common Stock or other Junior Stock in connection
with the administration of any employee benefit plan in the ordinary course of
business (including purchases to offset the Share Dilution Amount (as defined
below) pursuant to a publicly announced repurchase plan) and consistent with
past practice, provided
that any purchases to offset the Share Dilution Amount shall in no event
exceed the Share Dilution Amount; (ii) purchases or other acquisitions by a
broker-dealer subsidiary of the Corporation solely for the purpose of
market-making, stabilization or customer facilitation transactions in Junior
Stock or Parity Stock in the ordinary course of its business; (iii) purchases by
a broker-dealer subsidiary of the Corporation of capital stock of the
Corporation for resale pursuant to an offering by the Corporation of such
capital stock underwritten by such broker-dealer subsidiary; (iv) any dividends
or distributions of rights or Junior Stock in connection with a stockholders’
rights plan or any redemption or repurchase of rights pursuant to any
stockholders’ rights plan; (v) the acquisition by the Corporation or any of its
subsidiaries of record ownership in Junior Stock or Parity Stock for the
beneficial ownership of any other persons (other than the Corporation or any of
its subsidiaries), including as trustees or custodians; and (vi) the exchange or
conversion of Junior Stock for or into other Junior Stock or of Parity Stock for
or into other Parity Stock (with the same or lesser aggregate liquidation
amount) or Junior Stock, in each case, solely to the extent required pursuant to
binding contractual agreements entered into prior to the Signing Date or any
subsequent agreement for the accelerated exercise, settlement or exchange
thereof for Common Stock. “Share Dilution
Amount” means the increase in the number of diluted shares outstanding
(determined in accordance with generally accepted accounting principles in the
United States, and as measured from the date of the Corporation’s consolidated
financial statements most recently filed with the Securities and Exchange
Commission prior to the Original Issue Date) resulting from the grant, vesting
or exercise of equity-based compensation to employees and equitably adjusted for
any stock split, stock dividend, reverse stock split, reclassification or
similar transaction.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    

    When dividends are not paid (or
declared and a sum sufficient for payment thereof set aside for the benefit of
the holders thereof on the applicable record date) on any Dividend Payment Date
(or, in the case of Parity Stock having dividend payment dates different from
the Dividend Payment Dates, on a dividend payment date falling within a Dividend
Period related to such Dividend Payment Date) in full upon Designated Preferred
Stock and any shares of Parity Stock, all dividends declared on Designated
Preferred Stock and all such Parity Stock and payable on such Dividend Payment
Date (or, in the case of Parity Stock having dividend payment dates different
from the Dividend Payment Dates, on a dividend payment date falling within the
Dividend Period related to such Dividend Payment Date) shall be declared pro
rata so that the respective amounts of such dividends declared shall bear
the same ratio to each other as all accrued and unpaid dividends per share on
the shares of Designated Preferred Stock (including, if applicable as provided
in Section 3(a) above,
dividends on such amount) and all Parity Stock payable on such Dividend Payment
Date (or, in the case of Parity Stock having dividend payment dates different
from the Dividend Payment Dates, on a dividend payment date falling within the
Dividend Period related to such Dividend Payment Date) (subject to their having
been declared by the Board of Directors or a duly authorized committee of the
Board of Directors out of legally available funds and including, in the case of
Parity Stock that bears cumulative dividends, all accrued but unpaid dividends)
bear to each other. If the Board of Directors or a duly authorized committee of
the Board of Directors determines not to pay any dividend or a full dividend on
a Dividend Payment Date, the Corporation will provide written notice to the
holders of Designated Preferred Stock prior to such Dividend Payment
Date.

    

    Subject to the foregoing, and not
otherwise, such dividends (payable in cash, securities or other property) as may
be determined by the Board of Directors or any duly authorized committee of the
Board of Directors may be declared and paid on any securities, including Common
Stock and other Junior Stock, from time to time out of any funds legally
available for such payment, and holders of Designated Preferred Stock shall not
be entitled to participate in any such dividends.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    

    Section 4.  Liquidation
Rights.

    

    (a)       
Voluntary or
Involuntary Liquidation.  In the event of any liquidation,
dissolution or winding up of the affairs of the Corporation, whether voluntary
or involuntary, holders of Designated Preferred Stock shall be entitled to
receive for each share of Designated Preferred Stock, out of the assets of the
Corporation or proceeds thereof (whether capital or surplus) available for
distribution to stockholders of the Corporation, subject to the rights of any
creditors of the Corporation, before any distribution of such assets or proceeds
is made to or set aside for the holders of Common Stock and any other stock of
the Corporation ranking junior to Designated Preferred Stock as to such
distribution, payment in full in an amount equal to the sum of (i) the
Liquidation Amount per share and (ii) the amount of any accrued and unpaid
dividends (including, if applicable as provided in Section 3(a) above, dividends
on such amount), whether or not declared, to the date of payment (such amounts
collectively, the “Liquidation
Preference”).

    

    (b)       
Partial
Payment.  If in any distribution described in Section 4(a) above the assets
of the Corporation or proceeds thereof are not sufficient to pay in full the
amounts payable with respect to all outstanding shares of Designated Preferred
Stock and the corresponding amounts payable with respect of any other stock of
the Corporation ranking equally with Designated Preferred Stock as to such
distribution, holders of Designated Preferred Stock and the holders of such
other stock shall share ratably in any such distribution in proportion to the
full respective distributions to which they are entitled. 

    

    (c)       
Residual
Distributions.  If the Liquidation Preference has been paid in
full to all holders of Designated Preferred Stock and the corresponding amounts
payable with respect of any other stock of the Corporation ranking equally with
Designated Preferred Stock as to such distribution has been paid in full, the
holders of other stock of the Corporation shall be entitled to receive all
remaining assets of the Corporation (or proceeds thereof) according to their
respective rights and preferences.

    

    (d)       
Merger, Consolidation
and Sale of Assets Not Liquidation.  For purposes of this Section 4, the merger or
consolidation of the Corporation with any other corporation or other entity,
including a merger or consolidation in which the holders of Designated Preferred
Stock receive cash, securities or other property for their shares, or the sale,
lease or exchange (for cash, securities or other property) of all or
substantially all of the assets of the Corporation, shall not constitute a
liquidation, dissolution or winding up of the Corporation. 

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    

    Section 5.  Redemption.

    

    (a)       
Optional
Redemption.  Except as provided below, the Designated Preferred
Stock may not be redeemed prior to the first Dividend Payment Date falling on or
after the third anniversary of the Original Issue Date. On or after the first
Dividend Payment Date falling on or after the third anniversary of the Original
Issue Date, the Corporation, at its option, subject to the approval of the
Appropriate Federal Banking Agency, may redeem, in whole or in part, at any time
and from time to time, out of funds legally available therefor, the shares of
Designated Preferred Stock at the time outstanding, upon notice given as
provided in Section
5(c) below, at a redemption price equal to the sum of (i) the Liquidation
Amount per share and (ii) except as otherwise provided below, any accrued and
unpaid dividends (including, if applicable as provided in Section 3(a) above, dividends
on such amount) (regardless of whether any dividends are actually declared) to,
but excluding, the date fixed for redemption.

    

    Notwithstanding the foregoing, prior to
the first Dividend Payment Date falling on or after the third anniversary of the
Original Issue Date, the Corporation, at its option, subject to the approval of
the Appropriate Federal Banking Agency, may redeem, in whole or in part, at any
time and from time to time, the shares of Designated Preferred Stock at the time
outstanding, upon notice given as provided in Section 5(c) below, at a
redemption price equal to the sum of (i) the Liquidation Amount per share and
(ii) except as otherwise provided below, any accrued and unpaid dividends
(including, if applicable as provided in Section 3(a) above, dividends
on such amount) (regardless of whether any dividends are actually declared) to,
but excluding, the date fixed for redemption; provided
that (x) the Corporation (or any successor by Business Combination) has
received aggregate gross proceeds of not less than the Minimum Amount (plus the
“Minimum Amount” as defined in the relevant certificate of designations for each
other outstanding series of preferred stock of such successor that was
originally issued to the United States Department of the Treasury (the “Successor Preferred
Stock”) in connection with the Troubled Asset Relief Program Capital
Purchase Program) from one or more Qualified Equity Offerings (including
Qualified Equity Offerings of such successor), and (y) the aggregate redemption
price of the Designated Preferred Stock (and any Successor Preferred Stock)
redeemed pursuant to this paragraph may not exceed the aggregate net cash
proceeds received by the Corporation (or any successor by Business Combination)
from such Qualified Equity Offerings (including Qualified Equity Offerings of
such successor). 

    

    The redemption price for any shares of
Designated Preferred Stock shall be payable on the redemption date to the holder
of such shares against surrender of the certificate(s) evidencing such shares to
the Corporation or its agent. Any declared but unpaid dividends payable on a
redemption date that occurs subsequent to the Dividend Record Date for a
Dividend Period shall not be paid to the holder entitled to receive the
redemption price on the redemption date, but rather shall be paid to the holder
of record of the redeemed shares on such Dividend Record Date relating to the
Dividend Payment Date as provided in Section 3 above.

    

    (b)       
No Sinking
Fund.  The Designated Preferred Stock will not be subject to
any mandatory redemption, sinking fund or other similar provisions. Holders of
Designated Preferred Stock will have no right to require redemption or
repurchase of any shares of Designated Preferred Stock.

    

    (c)       
Notice of
Redemption.  Notice of every redemption of shares of Designated
Preferred Stock shall be given by first class mail, postage prepaid, addressed
to the holders of record of the shares to be redeemed at their respective last
addresses appearing on the books of the Corporation. Such mailing shall be at
least 30 days and not more than 60 days before the date fixed for redemption.
Any notice mailed as provided in this Subsection shall be conclusively presumed
to have been duly given, whether or not the holder receives such notice, but
failure duly to give such notice by mail, or any defect in such notice or in the
mailing thereof, to any holder of shares of Designated Preferred Stock
designated for redemption shall not affect the validity of the proceedings for
the redemption of any other shares of Designated Preferred
Stock.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    

    Notwithstanding the foregoing, if
shares of Designated Preferred Stock are issued in book-entry form through The
Depository Trust Company or any other similar facility, notice of redemption may
be given to the holders of Designated Preferred Stock at such time and in any
manner permitted by such facility. Each notice of redemption given to a holder
shall state: (1) the redemption date; (2) the number of shares of Designated
Preferred Stock to be redeemed and, if less than all the shares held by such
holder are to be redeemed, the number of such shares to be redeemed from such
holder; (3) the redemption price; and (4) the place or places where certificates
for such shares are to be surrendered for payment of the redemption
price.

    

    (d)       
Partial
Redemption.  In case of any redemption of part of the shares of
Designated Preferred Stock at the time outstanding, the shares to be redeemed
shall be selected either pro
rata or in such other manner as the Board of Directors or a duly
authorized committee thereof may determine to be fair and equitable. Subject to
the provisions hereof, the Board of Directors or a duly authorized committee
thereof shall have full power and authority to prescribe the terms and
conditions upon which shares of Designated Preferred Stock shall be redeemed
from time to time. If fewer than all the shares represented by any certificate
are redeemed, a new certificate shall be issued representing the unredeemed
shares without charge to the holder thereof.

    

    (e)       
Effectiveness of
Redemption.  If notice of redemption has been duly given and if
on or before the redemption date specified in the notice all funds necessary for
the redemption have been deposited by the Corporation, in trust for the pro
rata benefit of the holders of the shares called for redemption, with a
bank or trust company doing business in the Borough of Manhattan, The City of
New York, and having a capital and surplus of at least $500 million and selected
by the Board of Directors, so as to be and continue to be available solely
therefor, then, notwithstanding that any certificate for any share so called for
redemption has not been surrendered for cancellation, on and after the
redemption date dividends shall cease to accrue on all shares so called for
redemption, all shares so called for redemption shall no longer be deemed
outstanding and all rights with respect to such shares shall forthwith on such
redemption date cease and terminate, except only the right of the holders
thereof to receive the amount payable on such redemption from such bank or trust
company, without interest. Any funds unclaimed at the end of three years from
the redemption date shall, to the extent permitted by law, be released to the
Corporation, after which time the holders of the shares so called for redemption
shall look only to the Corporation for payment of the redemption price of such
shares.

    

    (f)       
Status of Redeemed
Shares.  Shares of Designated Preferred Stock that are
redeemed, repurchased or otherwise acquired by the Corporation shall revert to
authorized but unissued shares of Preferred Stock (provided
that any such cancelled shares of Designated Preferred Stock may be
reissued only as shares of any series of Preferred Stock other than Designated
Preferred Stock).

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    

    Section 6.  Conversion.  Holders
of Designated Preferred Stock shares shall have no right to exchange or convert
such shares into any other securities.

    

    Section 7.  Voting
Rights.

    

    (a)       
General.  The
holders of Designated Preferred Stock shall not have any voting rights except as
set forth below or as otherwise from time to time required by law.

    

    (b)       
Preferred Stock
Directors.  Whenever, at any time or times, dividends payable
on the shares of Designated Preferred Stock have not been paid for an aggregate
of six quarterly Dividend Periods or more, whether or not consecutive, the
authorized number of directors of the Corporation shall automatically be
increased by two and the holders of the Designated Preferred Stock shall have
the right, with holders of shares of any one or more other classes or series of
Voting Parity Stock outstanding at the time, voting together as a class, to
elect two directors (hereinafter the “Preferred
Directors”
and each a “Preferred
Director”)
to fill such newly created directorships at the Corporation’s next annual
meeting of stockholders (or at a special meeting called for that purpose prior
to such next annual meeting) and at each subsequent annual meeting of
stockholders until all accrued and unpaid dividends for all past Dividend
Periods, including the latest completed Dividend Period (including, if
applicable as provided in Section 3(a) above, dividends
on such amount), on all outstanding shares of Designated Preferred Stock have
been declared and paid in full at which time such right shall terminate with
respect to the Designated Preferred Stock, except as herein or by law expressly
provided, subject to revesting in the event of each and every subsequent default
of the character above mentioned; provided
that it shall be a qualification for election for any Preferred Director
that the election of such Preferred Director shall not cause the Corporation to
violate any corporate governance requirements of any securities exchange or
other trading facility on which securities of the Corporation may then be listed
or traded that listed or traded companies must have a majority of independent
directors. Upon any termination of the right of the holders of shares of
Designated Preferred Stock and Voting Parity Stock as a class to vote for
directors as provided above, the Preferred Directors shall cease to be qualified
as directors, the term of office of all Preferred Directors then in office shall
terminate immediately and the authorized number of directors shall be reduced by
the number of Preferred Directors elected pursuant hereto. Any Preferred
Director may be removed at any time, with or without cause, and any vacancy
created thereby may be filled, only by the affirmative vote of the holders a
majority of the shares of Designated Preferred Stock at the time outstanding
voting separately as a class together with the holders of shares of Voting
Parity Stock, to the extent the voting rights of such holders described above
are then exercisable. If the office of any Preferred Director becomes vacant for
any reason other than removal from office as aforesaid, the remaining Preferred
Director may choose a successor who shall hold office for the unexpired term in
respect of which such vacancy occurred.

    

    (c)       
Class Voting Rights as
to Particular Matters.  So long as any shares of Designated
Preferred Stock are outstanding, in addition to any other vote or consent of
stockholders required by law or by the Charter, the vote or consent of the
holders of at least 66 2/3% of the shares of Designated Preferred Stock at the
time outstanding, voting as a separate class, given in person or by proxy,
either in writing without a meeting or by vote at any meeting called for the
purpose, shall be necessary for effecting or validating:

    
      
         

      

      
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    (i)       
Authorization of
Senior Stock. Any amendment or alteration of the Certificate of
Designations for the Designated Preferred Stock or the Charter to authorize or
create or increase the authorized amount of, or any issuance of, any shares of,
or any securities convertible into or exchangeable or exercisable for shares of,
any class or series of capital stock of the Corporation ranking senior to
Designated Preferred Stock with respect to either or both the payment of
dividends and/or the distribution of assets on any liquidation, dissolution or
winding up of the Corporation;

    

    (ii)       Amendment of Designated
Preferred Stock. Any amendment, alteration or repeal of any provision of
the Certificate of Designations for the Designated Preferred Stock or the
Charter (including, unless no vote on such merger or consolidation is required
by Section 7(c)(iii)
below, any amendment, alteration or repeal by means of a merger, consolidation
or otherwise) so as to adversely affect the rights, preferences, privileges or
voting powers of the Designated Preferred Stock; or 

    

    (iii)      Share Exchanges,
Reclassifications, Mergers and Consolidations. Any consummation of a
binding share exchange or reclassification involving the Designated Preferred
Stock, or of a merger or consolidation of the Corporation with another
corporation or other entity, unless in each case (x) the shares of Designated
Preferred Stock remain outstanding or, in the case of any such merger or
consolidation with respect to which the Corporation is not the surviving or
resulting entity, are converted into or exchanged for preference securities of
the surviving or resulting entity or its ultimate parent, and (y) such shares
remaining outstanding or such preference securities, as the case may be, have
such rights, preferences, privileges and voting powers, and limitations and
restrictions thereof, taken as a whole, as are not materially less favorable to
the holders thereof than the rights, preferences, privileges and voting powers,
and limitations and restrictions thereof, of Designated Preferred Stock
immediately prior to such consummation, taken as a whole; 

    

    provided,
however,
that for all purposes of this Section 7(c), any increase in
the amount of the authorized Preferred Stock, including any increase in the
authorized amount of Designated Preferred Stock necessary to satisfy preemptive
or similar rights granted by the Corporation to other persons prior to the
Signing Date, or the creation and issuance, or an increase in the authorized or
issued amount, whether pursuant to preemptive or similar rights or otherwise, of
any other series of Preferred Stock, or any securities convertible into or
exchangeable or exercisable for any other series of Preferred Stock, ranking
equally with and/or junior to Designated Preferred Stock with respect to the
payment of dividends (whether such dividends are cumulative or non-cumulative)
and the distribution of assets upon liquidation, dissolution or winding up of
the Corporation will not be deemed to adversely affect the rights, preferences,
privileges or voting powers, and shall not require the affirmative vote or
consent of, the holders of outstanding shares of the Designated Preferred
Stock.

    

    (d)       
Changes after
Provision for Redemption.  No vote or consent of the holders of
Designated Preferred Stock shall be required pursuant to Section 7(c) above if, at or
prior to the time when any such vote or consent would otherwise be required
pursuant to such Section, all outstanding shares of the Designated Preferred
Stock shall have been redeemed, or shall have been called for redemption upon
proper notice and sufficient funds shall have been deposited in trust for such
redemption, in each case pursuant to Section 5 above.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    

    (e)       
Procedures for Voting
and Consents.  The rules and procedures for calling and
conducting any meeting of the holders of Designated Preferred Stock (including,
without limitation, the fixing of a record date in connection therewith), the
solicitation and use of proxies at such a meeting, the obtaining of written
consents and any other aspect or matter with regard to such a meeting or such
consents shall be governed by any rules of the Board of Directors or any duly
authorized committee of the Board of Directors, in its discretion, may adopt
from time to time, which rules and procedures shall conform to the requirements
of the Charter, the Bylaws, and applicable law and the rules of any national
securities exchange or other trading facility on which Designated Preferred
Stock is listed or traded at the time.

    

    Section 8.  Record
Holders.  To the fullest extent permitted by applicable law,
the Corporation and the transfer agent for Designated Preferred Stock may deem
and treat the record holder of any share of Designated Preferred Stock as the
true and lawful owner thereof for all purposes, and neither the Corporation nor
such transfer agent shall be affected by any notice to the
contrary.

    

    Section 9.  Notices.  All
notices or communications in respect of Designated Preferred Stock shall be
sufficiently given if given in writing and delivered in person or by first class
mail, postage prepaid, or if given in such other manner as may be permitted in
this Certificate of Designations, in the Charter or Bylaws or by applicable law.
Notwithstanding the foregoing, if shares of Designated Preferred Stock are
issued in book-entry form through The Depository Trust Company or any similar
facility, such notices may be given to the holders of Designated Preferred Stock
in any manner permitted by such facility. 

    

    Section 10.  No Preemptive
Rights.  No share of Designated Preferred Stock shall have any
rights of preemption whatsoever as to any securities of the Corporation, or any
warrants, rights or options issued or granted with respect thereto, regardless
of how such securities, or such warrants, rights or options, may be designated,
issued or granted.

    

    Section 11.  Replacement
Certificates.  The Corporation shall replace any mutilated
certificate at the holder’s expense upon surrender of that certificate to the
Corporation. The Corporation shall replace certificates that become destroyed,
stolen or lost at the holder’s expense upon delivery to the Corporation of
reasonably satisfactory evidence that the certificate has been destroyed, stolen
or lost, together with any indemnity that may be reasonably required by the
Corporation.

    

    Section 12.  Other
Rights.  The shares of Designated Preferred Stock shall not
have any rights, preferences, privileges or voting powers or relative,
participating, optional or other special rights, or qualifications, limitations
or restrictions thereof, other than as set forth herein or in the Charter or as
provided by applicable law.

    
      
         

      

      
        13

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