Document:

Exhibit 10.2

 

Accuray Incorporated

 

      %
Convertible Notes due 2022

 

SUBSCRIPTION AGREEMENT (the “Subscription
Agreement”)

Dated as of July     , 2017

 

The undersigned (the “Purchaser”)
hereby confirms its agreement with you as follows:

 

This Subscription Agreement and the Terms and
Conditions for Subscription of Securities, dated July      , 2017, attached hereto as Exhibit A
(the “Terms and Conditions” and, together with this Subscription Agreement, the “Agreement”
or the “Subscription Agreement”) is made as of the Effective Date between Accuray Incorporated, a Delaware
corporation (the “Company”) and the Purchaser listed on the signature page hereto.

 

The Company is proposing (1) a separate exchange
(the “Exchange”) by the beneficial owners of certain of the Company’s (i) 3.50% Convertible Senior
Notes due 2018, CUSIP 004397 AD7 and ISIN US004397AD73 (the “2013 Notes”) and (ii) 3.50% Series A Convertible
Senior Notes due 2018, CUSIP 004397 AF2 and ISIN US004397AF22 (the “2014 Notes”, together with the “2013
Notes”, the “Old Notes” and, existing beneficial owners of the Old Notes, each, an “Exchanging
Holder”) for a newly-issued series of the Company’s convertible senior notes due 2022 (the “New
Notes” and, together with the Old Notes, the “Notes”), (2) that the Exchanging Holders
tender certain of their Old Notes for cash (the “Repurchase” and, together with the Exchange, the “Exchange/Repurchase”)
and (3) that certain of the Exchanging Holders and other qualified new investors subscribe for and purchase from the Company up
to $ aggregate principal amount of its New Notes, which are convertible into cash, shares of the Company’s common stock,
par value $0.001 per share (the “Common Stock”) or a combination thereof, at the Company’s election
(the “Subscription” and, together with the Exchange/Repurchase, the “Transactions”),
in each case on the terms more fully described in the preliminary confidential private placement memorandum (the “Preliminary
Private Placement Memorandum”) and the final term sheet dated as of July     , 2017 (the
“Final Term Sheet" and, together with the Preliminary Private Placement Memorandum as of the Effective
Date (as defined below), the “Pricing Disclosure Package”, which are attached hereto as Exhibits B
and C, respectively. The Company reserves the right to increase or decrease the amount of the Exchange, the Repurchase or
the Subscription. The New Notes to be issued in the Exchange and the Subscription are also referred to herein as the “Securities.”

 

The Company and the Purchaser agree that, upon
the terms and subject to the conditions set forth herein, the Purchaser will purchase from the Company and the Company will issue
and sell to the Purchaser the aggregate principal amount of Securities set forth below on the Purchaser’s signature page
for an aggregate purchase price for such Securities set forth on Exhibit D.2 (the “Cash Purchase Price”).

 

At or prior to the time set forth in the Subscription
Procedures set forth in Exhibit D.3 (the “Subscription Procedures”), the Purchaser shall transfer
the Cash Purchase Price by wire of immediately available funds to the account of the Company designated in the Subscription Procedures.
The Securities purchased by the Purchaser will be delivered by electronic book-entry through the facilities of The Depository Trust
Company (“DTC”), to an account specified by the Purchaser in Exhibit D.1 and in accordance with
the terms set forth in Section 4 of these Terms and Conditions, and will be released by The Bank of New York Mellon Trust
Company, N.A. (the “Trustee”), at the written request of the Company, to such Purchaser at the Settlement
(as defined below).

 

     

     

    

 

The Purchaser’s agreement to purchase
the Securities shall be subject to written acceptance, by electronic mail to the Company or its agents, of the Final Term Sheet
(such time of acceptance, the “Effective Date”).

 

The Securities are being offered only to institutional
“accredited investors” within the meaning of Rule 501 of Regulation D under the Securities Act of 1933, as amended
(the “Securities Act”), that are also qualified institutional buyers (“QIBs”)
within the meaning of Rule 144A under the Securities Act, pursuant to a private placement exemption from registration under Section
4(a)(2) of the Securities Act.

 

Each of the provisions of the Terms and Conditions
is incorporated herein by reference in its entirety, and shall be deemed to be a part of this Agreement to the same extent as if
such provisions had been set forth in full herein; and each of the representations, warranties, and agreements set forth therein
shall be deemed to have been made at and as of the date of this Agreement. Unless otherwise defined herein, terms defined in the
Terms and Conditions are used herein as therein defined.

 

The Agreement constitutes the entire agreement
among the parties with respect to the subject matters hereof. The Agreement may not be amended, modified, altered or supplemented
other than by means of a written instrument duly executed and delivered on behalf of all parties hereto. This Agreement may be
executed in counterparts, and delivered by email or telecopier, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.

 

If the foregoing correctly sets forth your
understanding as to the matters set forth herein, please indicate your acceptance thereof in the space provided below for that
purpose and deliver a copy to the undersigned, whereupon this Subscription Agreement shall constitute a binding agreement between
the Company and the Purchaser.

 

	 	Very truly yours,
	 	 	 	 
	 	Accuray Incorporated
	 	 	 	 
	 	By:	
 

	 	 	Name:	 
	 	 	Title:	 

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Aggregate Principal Amount of Securities the Purchaser Agrees
to Purchase: ____________________________

 

Please confirm that the foregoing correctly
sets forth the agreement between us by signing in the space provided below for that purpose.

 

	AGREED AND ACCEPTED:	Name of Purchaser: 	 
	 	 
	 	 
	 	 
	 	 	 	By:	 
	 	 	Print Name:	 
	 	 	Title:	 
	 	 	 	 	 	 	 	 	 

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EXHIBIT A TO THE SUBSCRIPTION AGREEMENT

 

TERMS AND
CONDITIONS FOR PURCHASE OF SECURITIES

 

  

July      , 2017

 

Accuray Incorporated, a Delaware corporation
(the “Company”), hereby confirms its agreement with each Purchaser identified in a Subscription Agreement
(the “Subscription Agreement”) to which these Terms and Conditions for Subscription of Securities (the
“Terms and Conditions”) are attached as Exhibit A, as set forth in these Terms and Conditions
for Subscription of Securities and in the Subscription Agreement (together, this “Agreement”). Capitalized
terms used but not defined in the Terms and Conditions have the meanings set forth in the Subscription Agreement.

 

1.        
Agreement to Sell and Purchase; The Securities; Placement Agent. On the basis of the representations, warranties
and agreements herein contained and subject to the terms and conditions herein set forth, the Company proposes to issue and sell
to the Purchaser, and the Purchaser, agrees to purchase, the % Convertible Notes due 2022 (the “Securities”)
in the aggregate principal amount set forth on such Purchaser’s signature page to this Agreement at the aggregate purchase
price (the “Cash Purchase Price”) determined as set forth in Exhibit D.2. The Company intends
to enter into agreements similar to this Agreement with certain other investors (the “Other Purchasers”)
and expects to complete sales of Securities to them, and the Company also separately intends to enter into agreements with certain
Holders (the “Exchanging Holders”) (x) to complete exchanges of Old Notes for New Notes pursuant
to the terms of the Exchange and (y) to complete the repurchases of Old Notes from such Exchanging Holders pursuant to the
terms of the Repurchase and the agreements to be entered into with the relevant Exchanging Holders (the “Exchange/Repurchase
Agreements”). The Purchaser and the Other Purchasers are hereinafter sometimes collectively referred to as the “Purchasers,”
the Purchasers and the Exchanging Holders are hereinafter sometimes referred to as the “Investors” and
this Agreement and the purchase or exchange/repurchase agreements executed by the Other Purchasers and/or Exchanging Holders are
hereinafter sometimes collectively referred to as the “Exchange/Subscription Agreements.”

 

The Securities are to be issued under an
indenture (the “New Notes Indenture”) to be dated as of the Settlement Date (as defined below) by and
between the Company and The Bank of New York Mellon Trust Company, N.A., as Trustee (the “Trustee”).
The Securities will be convertible into cash, shares of common stock, par value $0.001 per share (“Common Stock”),
of the Company (the shares of Common Stock underlying the Securities, the “Conversion Shares”) or a combination
thereof, at the Company’s election, on the terms and conditions set forth in the Indenture.

 

The Securities will be offered and sold
to the Purchasers and issued to the Exchanging Holders in the Exchange in reliance on an exemption from the registration requirements
of the Securities Act of 1933, as amended (the “Securities Act”). The description of the Securities is
qualified in its entirety to the terms of the Indenture.

 

The Purchaser acknowledges that, pursuant
to a Placement Agency Agreement between the Company and J. Wood Capital Advisors LLC (the “Placement Agent”)
dated as of July       , 2017 (the “Placement Agency Agreement”), the Company
intends to pay the Placement Agent a fee in respect of the Transactions.

 

2.        
Representations and Warranties of the Company. The Company represents and warrants to each Purchaser that, as of
the date hereof and as of the Settlement Date (as defined below):

 

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(a)      
The Pricing Disclosure Package did not, as of        p.m. on July     ,
2017, and as of the Settlement Date (as defined below), will not, contain any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made,
not misleading.

 

(b)      
The financial statements included or incorporated by reference in the Pricing Disclosure Package, together with the related
notes and schedules, present fairly in all material respects the consolidated financial position of the Company and the subsidiaries
as of the dates indicated and the consolidated statements of operations, cash flows and stockholders’ equity of the Company
and the subsidiaries for the periods specified; such financial statements have been prepared in conformity with U.S. generally
accepted accounting principles applied on a consistent basis throughout the periods covered thereby.

 

(c)      
Since the date of the most recent financial statements of the Company included or incorporated by reference in the Pricing
Disclosure Package, there has not been (i) any change in the capital stock (other than as a result of the grant, exercise or settlement
of equity awards granted under the Company’s equity incentive plans or employee stock purchase plans that are described in
the Pricing Disclosure Package and the repurchase by the Company of Common Stock pursuant to agreements providing for an option
to repurchase or a right of first refusal on behalf of the Company) or long-term debt of the Company or any of its subsidiaries,
or any dividend or distribution of any kind declared, set aside for payment, paid or made by the Company on any class of capital
stock other than as disclosed in the Pricing Disclosure Package; (ii) any material adverse change, or any development involving
a prospective material adverse change, in or affecting the business, properties, financial position, stockholders’ equity
or results of operations of the Company and its subsidiaries taken as a whole; or (iii) any transaction that is material to the
Company and its subsidiaries taken as a whole that would be required to be described or disclosed in reports that the Company files
or submits under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that is not so
described or disclosed in such reports or in the Pricing Disclosure Package. The Company has no material contingent obligations
which are not disclosed in the Pricing Disclosure Package or provided for in the Company’s consolidated financial statements
that are included or incorporated by reference in the Pricing Disclosure Package.

 

(d)      
The Company and each of its subsidiaries within the meaning of Rule 1-02(w) of Regulation S-X promulgated under the Securities
Act have been duly organized and are validly existing and in good standing under the laws of their respective jurisdictions of
organization, are duly qualified to do business and are in good standing in each jurisdiction in which their respective ownership
or lease of property or the conduct of their respective businesses requires such qualification, and have all power and authority
necessary to own or hold their respective properties and to conduct the businesses in which they are engaged, except where the
failure to be so qualified or have such power or authority would not, individually or in the aggregate, (i) have a material adverse
effect on the business, properties, financial position, stockholders’ equity, or results of operations of the Company and
its subsidiaries taken as a whole (a “Material Adverse Effect”) or (ii) prevent or materially interfere
with consummation of the transactions contemplated by this Agreement, the New Notes Indenture or the New Notes or (iii) result
in the delisting of shares of Common Stock from The NASDAQ Global Select Market (the “NASDAQ”).

 

(e)      
The Company has full right, power and authority to execute and deliver this Agreement, the New Notes Indenture, the Exchange/Subscription
Agreements and the New Notes (collectively, the “Transaction Documents”) and to issue, sell and deliver
the New Notes and the Common Stock issuable upon conversion of the New Notes and to consummate the Repurchase as contemplated by
this Agreement, the New Notes Indenture and the New Notes; and to perform its obligations hereunder and thereunder; and all action
required to be taken for the due and proper authorization, execution

 

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and delivery by it of each of the Transaction Documents and
the consummation by it of the transactions contemplated thereby has been duly and validly taken.

 

(f)       
The New Notes Indenture has been duly authorized by the Company and, when executed and delivered by the Company and the
Trustee, will be a legal, valid and binding agreement of the Company, enforceable in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights
generally and general principles of equity.

 

(g)      
The Agreement has been duly authorized, executed and delivered by the Company.

 

(h)      
The New Notes to be issued and sold by the Company pursuant to the Exchange/Subscription Agreements have been duly authorized
by the Company and, when executed and delivered by the Company and duly authenticated in accordance with the terms of the New Notes
Indenture and delivered to and paid for as provided in the Exchange/Subscription Agreements, will be duly and validly issued and
outstanding and will constitute legal, valid and binding obligations of the Company, enforceable against the Company in accordance
with their terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors’ rights generally and general principles of equity, and will be entitled to the benefits
of the New Notes Indenture; the Conversion Shares have been duly authorized and validly reserved for issuance upon conversion of
the New Notes, and, upon conversion of the New Notes in accordance with their terms and the terms of the New Notes Indenture, will
be issued free of statutory and contractual preemptive rights, resale rights, rights of first refusal and similar rights and free
of any voting restrictions (and will be free of any restriction, pursuant to the Company’s charter or bylaws or any agreement
or other instrument to which the Company is a party, upon the transfer thereof), and will be validly issued, fully paid and nonassessable.

 

(i)        
Neither the Company nor any of its subsidiaries is (i) in violation of its charter or by-laws or similar organizational
documents; (ii) in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default,
in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or
any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject;
or (iii) in violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental
or regulatory authority (including, without limitation, the rules and regulations of the NASDAQ), in each case, applicable to the
Company, except, in the case of clauses (ii) and (iii) above, for any such conflict, breach or violation that would not, individually
or in the aggregate, have a Material Adverse Effect.

 

(j)        
The execution, delivery and performance of the Transaction Documents and the consummation of the transactions contemplated
thereby, including the issuance of the New Notes, the issuance of the Common Stock issuable upon conversion of the New Notes and
the Repurchase, do not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute
a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument
to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which
any of the property or assets of the Company or any of its subsidiaries is subject, (ii) result in any violation of the provisions
of the charter or by-laws or similar organizational documents of the Company or any of its subsidiaries or (iii) result in the
violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory
authority (including, without limitation, the rules and regulations of the NASDAQ), in each case, applicable to the Company, except,
in the case of clauses

 

    A-6 

     

    

 

(i) and (iii) above, for any such conflict, breach or violation that would not, individually or in the aggregate,
have a Material Adverse Effect.

 

(k)      
No approval, authorization, consent or order of or filing with any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency, or of or with any self-regulatory organization or other non-governmental regulatory
authority (including, without limitation, the NASDAQ), or approval of the stockholders of the Company, is required in connection
with the issuance and sale of the New Notes, the issuance of Common Stock upon conversion of the New Notes, the Repurchase or the
consummation of the transactions as contemplated by this Agreement, the New Notes Indenture or the New Notes, other than (i) as
may be required under the securities or blue sky laws of the various jurisdictions in which the New Notes and the Common Stock
are being offered or (ii) has already been obtained.

 

(l)        
Except as described in the Pricing Disclosure Package, there are no legal, governmental or regulatory investigations, actions,
suits or proceedings pending to which the Company or any of its subsidiaries is or may be a party or to which any property of the
Company or any of its subsidiaries is or may be the subject that, individually or in the aggregate, if determined adversely to
the Company or any of its subsidiaries, could reasonably be expected to have a Material Adverse Effect or materially and adversely
affect the ability of the Company to perform its obligations under this Agreement; to the knowledge of the Company no such investigations,
actions, suits or proceedings are threatened or, contemplated by any governmental or regulatory authority (including, without limitation,
the NASDAQ) or threatened by others.

 

(m)     
The Company and its subsidiaries own or possess adequate rights to use all patents, patent applications, trademarks, service
marks, trade names, trademark registrations and applications, service mark registrations and applications, domain names, all goodwill
associated with the foregoing, copyrights, licenses and know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures) and all other similar intellectual property rights (collectively,
the “Intellectual Property”) necessary for the conduct of their respective businesses as described in
the Pricing Disclosure Package, except where the failure to own or possess such rights would not reasonably be expected to have
a Material Adverse Effect. The Company and its subsidiaries have not received any notice of any claim of infringement, misappropriation
or other violation of any Intellectual Property rights of others that would reasonably be expected to have a Material Adverse Effect.
Except as described in the Pricing Disclosure Package, (a) there is no pending or, to the knowledge of the Company, threatened
action, suit, proceeding or claim by others challenging the Company's or any of its subsidiaries’ rights in or to any Intellectual
Property that would reasonably be expected to have a Material Adverse Effect, and the Company is unaware of any facts which would
form a reasonable basis for any such claim; (b) there is no pending or, to the knowledge of the Company, threatened action, suit,
proceeding or claim by others challenging the validity or scope of any Intellectual Property owned by or licensed to the Company
or any of its subsidiaries that would reasonably be expected to have a Material Adverse Effect, and the Company is unaware of any
facts which would form a reasonable basis for any such claim; and (c) there is no pending or, to the knowledge of the Company,
threatened action, suit, proceeding or claim by others that the Company or any of its subsidiaries infringes, misappropriates or
otherwise violates any Intellectual Property rights of others that would reasonably be expected to have a Material Adverse Effect,
and the Company is unaware of any facts which would form a reasonable basis for any such claim.

 

(n)      
The Company will apply the net proceeds from the Subscription in all material respects as described in the Pricing Disclosure
Package under the heading “Use of Proceeds”.

 

(o)      
The Company is not and, after giving effect to the Transactions, will not be required to register as an “investment
company” or an entity “controlled” by an “investment company” within the meaning

 

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of the Investment
Company Act of 1940, as amended, and the rules and regulations of the Securities and Exchange Commission (the “Commission”)
thereunder.

 

(p)      
(i) The Company and its subsidiaries have paid all federal, state, local and foreign taxes and filed all tax returns required
to be paid or filed through the date hereof; and (ii) except as otherwise disclosed in the Pricing Disclosure Package, there is
no tax deficiency that has been, or could reasonably be expected to be, asserted against the Company or any of its subsidiaries
or any of their respective properties or assets, in each case, except as would not have a Material Adverse Effect.

 

(q)      
Except as described in the Pricing Disclosure Package, (i) the Company is and at all times has been in compliance with all
statutes, rules and regulations applicable to the ownership, testing, development, manufacture, packaging, processing, use, distribution,
marketing, labeling, promotion, sale, offer for sale, storage, import, export or disposal of any product manufactured or distributed
by the Company (“Applicable Laws”), except where the failure to so comply would not, individually or
in the aggregate, result in a Material Adverse Effect; (ii) the Company has not received any FDA Form 483, warning letter, untitled
letter or other correspondence or notice from the U.S. Food and Drug Administration (“FDA”) or any other
federal, state, local or foreign governmental agency or regulatory authority having jurisdiction over the Company or any of its
properties or assets alleging or asserting noncompliance with any Applicable Laws or any licenses, certificates, approvals, clearances,
authorizations, permits and supplements or amendments thereto required by any such Applicable Laws (“Authorizations”),
except such FDA Forms 483 notices alleging or asserting noncompliance as would not, individually or in the aggregate, result in
a Material Adverse Effect; (iii) the Company possesses or has the right to use all Authorizations and such Authorizations are valid
and in full force and effect and are not in violation of any term of any such Authorizations; (iv) the Company has not received
notice of any pending or threatened claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other
action from the FDA or any other federal, state, local or foreign governmental agency or regulatory authority having jurisdiction
over the Company or any of its properties or assets or third party alleging that any product, operation or activity is in violation
of any Applicable Laws or Authorizations and the Company does not have knowledge that the FDA or any other federal, state, local
or foreign governmental agency or regulatory authority having jurisdiction over the Company or any of its properties or assets
or any third party is considering any such claim, litigation, arbitration, action, suit, investigation or proceeding; (v) the Company
has not received notice that the FDA or any other federal, state, local or foreign governmental agency or regulatory authority
having jurisdiction over the Company or any of its properties or assets has taken, is taking or intends to take action to limit,
suspend, modify or revoke any Authorizations and the Company does not have knowledge that the FDA or any other federal, state,
local or foreign governmental agency or regulatory authority having jurisdiction over the Company or any of its properties or assets
is considering such action; (vi) the Company, or a third party on its behalf, has filed, obtained, maintained or submitted all
reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments as required by any
Applicable Laws or Authorizations, except that where the failure to so file, obtain, maintain, or submit would not, individually
or in the aggregate, result in a Material Adverse Effect, and that all such reports, documents, forms, notices, applications, records,
claims, submissions and supplements or amendments were complete and correct in all material respects on the date filed (or were
corrected or supplemented by a subsequent submission); and (vii) the Company has not, either voluntarily or involuntarily, initiated,
conducted or issued or caused to be initiated, conducted or issued, any recall, market withdrawal or replacement, safety alert,
post sale warning, "dear doctor" letter or other notice or action relating to the alleged lack of safety or efficacy
of any product or any alleged product defect or violation other than as reported to the FDA or as not required to be reported to
the FDA under Applicable Laws and, to the knowledge of the Company, neither the FDA or any other federal, state, local or foreign
governmental agency or regulatory authority having jurisdiction over the Company or any of its properties or assets has initiated,
conducted or intends to initiate any such notice or action.

 

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(r)       
Except as disclosed in the Pricing Disclosure Package neither the Company nor any of its business operations is in violation
of any Health Care Laws, except where the failure to be in compliance would not, individually or in the aggregate, result in a
Material Adverse Effect. For purposes of this Agreement, “Health Care Laws” means (i) the Federal Food,
Drug, and Cosmetic Act, and the regulations promulgated thereunder, (ii) all federal and state fraud and abuse laws, including,
without limitation, the federal Anti-Kickback Statute (42 U.S.C. §1320a-7b(b)), the Stark Law (42 U.S.C. §1395nn), the
civil False Claims Act (31 U.S.C. §3729 et seq.), the Physician Payment Sunshine Act (42 U.S.C. §1320a-7h) and the regulations
promulgated pursuant to such statutes, (iii) the administrative simplification provisions of the Health Insurance Portability and
Accountability Act of 1996 (18 U.S.C. §§669, 1035, 1347 and 1518; 42 U.S.C. §1320d et seq.) and the regulations
promulgated thereunder, (iv) Titles XVIII (42 U.S.C. §1395 et seq.) and XIX (42 U.S.C. §1396 et seq.) of the Social Security
Act and the regulations promulgated thereunder, (v) the Medicare Prescription Drug, Improvement, and Modernization Act of 2003
(42 U.S.C. §1395w-101 et seq.) and the regulations promulgated thereunder, (vi) quality, safety and accreditation requirements
of all applicable foreign or state laws or regulatory bodies and (vii) any and all other health care laws and regulations applicable
to the business of the Company as currently conducted, each of (i) through (vii) as may be amended from time to time.

 

(s)      
The Company and its subsidiaries (x) are in compliance with any and all applicable federal, state, local and foreign laws,
rules, regulations, requirements, directives, guidance, decisions and orders relating to the protection of human health and safety,
the environment or hazardous or toxic substances, emissions, materials or wastes, pollutants or contaminants (each, a “Hazardous
Material”), including, without limitation, the transportation, transfer, recycling, storage, use, treatment, manufacture,
removal, remediation, release, exposure of others to, sale, or distribution of any Hazardous Material or any product or waste containing
a Hazardous Material, or product manufactured with Ozone depleting substances, including, without limitation, any required labeling,
payment of waste fees or charges (including so-called e-waste fees) and compliance with any product take-back or product content
requirements (collectively, “Environmental Laws”); (y) have received and are in compliance with all permits,
licenses, certificates or other authorizations or approvals required of them under applicable Environmental Laws to conduct their
respective businesses; and (z) have not received notice of any actual or potential liability for the investigation or remediation
of any disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants, and (ii) there are no costs
or liabilities associated with Environmental Laws of or relating to the Company or its subsidiaries, except in the case of each
of (x), (y) and (z) above, for any such failure to comply, or failure to receive required permits, licenses or approvals, or cost
or liability, as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(t)       
The Company and its subsidiaries maintain an effective (as described in the documents incorporated by reference in the Pricing
Disclosure Package (the “Incorporated Documents”)) system of “disclosure controls and procedures”
(as defined in Rule 13a-15(e) of the Exchange Act) that is designed to ensure that information required to be disclosed by the
Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the Commission’s rules and forms, including controls and procedures designed to ensure that such information
is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure.
The Company and its subsidiaries have carried out evaluations of the effectiveness of their disclosure controls and procedures
as required by Rule 13a-15 of the Exchange Act and have disclosed the results of such evaluations in the Incorporated Documents.

 

(u)      
The Company and its subsidiaries maintain systems of “internal control over financial reporting” (as defined
in Rule 13a-15(f) of the Exchange Act) that comply with the requirements of the Exchange Act and have been designed by, or under
the supervision of, their respective principal executive and principal financial officers, or persons performing similar functions,
to provide reasonable assurance

 

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regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles, including, but not limited to internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general
or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; (iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken with respect to any differences; and (v) interactive data
in eXtensible Business Reporting Language incorporated by reference in the Pricing Disclosure Package fairly presents the information
called for in all material respects and is prepared in accordance with the Commission’s rules applicable thereto. Except
as disclosed in the Pricing Disclosure Package, the Company is not aware of any material weaknesses in the Company's internal control
over financial reporting.

 

(v)      
The operations of the Company and the subsidiaries are and have been conducted at all times in compliance with applicable
financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended,
the money laundering statutes of all jurisdictions where the Company or any of its subsidiaries conducts business, the rules and
regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental
agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator or non-governmental authority involving the Company or any of
the subsidiaries with respect to the Money Laundering Laws is pending or, to the Company’s knowledge, threatened.

 

(w)      
Neither the Company nor any of the subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee
or affiliate of the Company or any of the subsidiaries is currently subject to any U.S. sanctions administered by the Office of
Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or
indirectly use the proceeds of the offering of the New Notes contemplated hereby, or lend, contribute or otherwise make available
such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of
any person currently subject to any U.S. sanctions administered by OFAC.

 

(x)      
Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee
or affiliate of the Company or any of the subsidiaries is aware of or has taken any action, directly or indirectly, that would
result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder;
and the Company, the Subsidiaries and, to the knowledge of the Company, its affiliates have instituted and maintain policies and
procedures designed to ensure continued compliance therewith.

 

(y)      
Neither the Company nor any of the subsidiaries has incurred any liability for any finder’s fees or similar payments
in connection with the consummation of the transactions contemplated hereby other than the Letter Agreement between the Company
and the Placement Agent or the Placement Agency Agreement.

 

(z)       
Except as described in the Pricing Disclosure Package, (i) no person has the right, contractual or otherwise, to cause the
Company to issue or sell to it any shares of Common Stock or shares of any other capital stock or other equity interests of the
Company, (ii) no person has any preemptive rights, resale rights, rights of first refusal or other rights to purchase any shares
of Common Stock or shares of any other capital stock of or other equity interests in the Company pursuant to a contract with the
Company and (iii) the Company has not granted any person the right to act as an underwriter or initial purchaser or as a financial
advisor to the Company in connection with the Transactions; no person has the right, contractual or otherwise, to cause the Company
to register under the Securities

 

    A-10 

     

    

 

Act any shares of Common Stock or shares of any other capital stock of or other equity interests
in the Company.

 

(aa)    
None of the Company and its subsidiaries has or will distribute prior to the later of (i) the Settlement Date (as defined
below) and (ii) completion of the Transactions, any offering material (including, without limitation, content on its website, if
any, that may be deemed to be offering material)

 

    A-11 

     

    

 

in connection with the Transactions other than the Pricing Disclosure Package
and other materials, if any, permitted by the Securities Act, including, but not limited to, any Incorporated Documents.

 

(bb)   
The New Notes, when issued, will not be of the same class (within the meaning of Rule 144A) as securities that are listed
on a national securities exchange registered pursuant to Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer
quotation system.

 

(cc)    
Assuming the accuracy of the representations and warranties of each Investor executing an Exchange/Subscription Agreement
and their compliance with their agreements set forth therein, it is not necessary, in connection with the Transactions and the
issuance and exchange or sale of the New Notes in the manner contemplated by the Pricing Disclosure Package, to register the New
Notes under the Securities Act or to qualify the New Notes Indenture under the Trust Indenture Act of 1939, as amended.

 

(dd)   
The Company will reserve and keep available at all times, free of pre-emptive rights, a sufficient number of shares of Common
Stock for the purpose of enabling the Company to satisfy all obligations to issue the shares of Common Stock issuable upon conversion
of the New Notes.

 

(ee)    
Except as would not reasonably be expected to have a Material Adverse Effect, there is and has been no failure on the part
of the Company or any of the Company’s directors or officers, in their capacities as such, to comply with any provision of
the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith, including Section 402 related
to loans and Sections 302 and 906 related to certifications.

 

3.        
Representations and Warranties of the Purchaser. The Purchaser represents, warrants and covenants, severally but
not jointly, and on behalf of each account for which the Purchaser is purchasing, to the Company as follows:

 

(a)      
The Purchaser has all requisite corporate power and authority to execute and deliver this Agreement and to carry out and
perform its obligations under the terms hereof and the transactions contemplated hereby. This Agreement has been duly authorized,
executed and delivered by the Purchaser and constitutes the valid and binding obligation of the Purchaser, enforceable in accordance
with its terms, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors, and rules
of law governing specific performance, injunctive relief or other equitable remedies.

 

(b)      
The execution, delivery and performance of this Agreement by the Purchaser and compliance by the Purchaser with all provisions
hereof and the consummation of the transactions contemplated hereby, will not (i) require any consent, approval, authorization
or other order of, or qualification with, any court or governmental body or agency (except as may be required under the securities
or Blue Sky laws of the various states), (ii) constitute a breach or violation of any of the terms or provisions of, or result
in a default under, (x) the organizational documents of the Purchaser or (y) any material indenture, loan agreement, mortgage,
lease or other agreement or instrument to which the Purchaser is a party or by which it is bound, or (iii) violate or conflict
with any applicable law or any rule, regulation, judgment, decision, order or decree of any court or any governmental body or agency
having jurisdiction over the Purchaser.

 

    A-12 

     

    

 

(c)      
The Purchaser understands that the Securities (and the Conversion Shares) acquired by the Purchaser under this Agreement
have not been registered under the Securities Act or qualified under applicable state securities laws (the “Securities
Laws”). The Purchaser also understands that the Securities (and the Conversion Shares) are being offered and sold
pursuant to exemptions from registration and qualification contained in the Securities Act and the Securities Laws based in part
upon the Purchaser’s representations contained in this Agreement.

 

(d)      
The Purchaser understands and agrees on behalf of itself and on behalf of any investor account for which it is purchasing
the Securities (and Conversion Shares), and each subsequent holder of the Securities (and Conversion Shares) by its acceptance
thereof will be deemed to agree, that the Securities (and Conversion Shares) are being offered in a transaction not involving any
public offering within the meaning of the Securities Act, that the Securities (and Conversion Shares) have not been, and will not
be, registered under the Securities Act and that (a) if it decides to offer, resell, pledge or otherwise transfer any of the Securities
or Conversion Shares, such Securities (and Conversion Shares) may be offered, resold, pledged or otherwise transferred only (i)
to a person whom the seller reasonably believes is a QIB in a transaction meeting the requirements of Rule 144A, (ii) pursuant
to any other exemption from the registration requirements of the Securities Act, including Rule 144 under the Securities Act (if
available), (iii) pursuant to an effective registration statement under the Securities Act (which the Company has no obligation
to effect), or (iv) to the Company, or one of its subsidiaries, in each of cases (i) through (iv) in accordance with any applicable
securities laws of any state of the United States, and that (b) the Purchaser will, and each subsequent holder is required to,
notify any subsequent purchaser of the Securities or Conversion Shares from it of the resale restrictions referred to in (a) above
and will provide the Company and the transfer agent such certificates and other information as they may reasonably require to confirm
that the transfer by it complies with the foregoing restrictions, if applicable. The Purchaser also understands that there is no
assurance that any exemption from registration under the Securities Act will be available to permit the Purchaser to transfer or
dispose of the Securities (and the Conversion Shares) and that, even if available, such exemption may not allow the Purchaser to
transfer all or any portion of the Securities (and the Conversion Shares) under the circumstances, in the amounts or at the times
the Purchaser might propose.

 

(e)      
The Purchaser understands that the Securities (and Conversion Shares) will, unless sold pursuant to a registration statement
that has been declared effective under the Securities Act or in compliance with Rule 144, bear a legend substantially to the following
effect:

 

THIS SECURITY AND THE SHARES OF COMMON STOCK, IF ANY, ISSUABLE
UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER: 

 

		(1)	REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING
OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND

 

		(2)	AGREES FOR THE BENEFIT OF ACCURAY INCORPORATED (THE “COMPANY”) THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE
TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE DATE THAT IS THE LATER OF (X) ONE YEAR AFTER THE LAST ORIGINAL
ISSUE DATE HEREOF OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR 

 

 

    A-13 

     

    

 

PROVISION THERETO AND (Y) SUCH LATER
DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW, EXCEPT:

 

		(A)	TO THE COMPANY OR ANY SUBSIDIARY THEREOF, OR

 

		(B)	PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT, OR

 

		(C)	TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, OR

 

		(D)	PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

 

PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH
(2)(D) ABOVE, THE COMPANY AND THE TRUSTEE RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER
EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES
ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT.

 

(f)       
The Purchaser is acquiring the Securities for its own account (or the accounts listed in Schedule 1 of Exhibit
D attached to the Subscription Agreement) for investment purposes only and not with a view to, or for resale in connection
with, any distribution or public offering of the Securities within the meaning of the Securities Act.

 

(g)      
The Purchaser (and each account for which the Purchaser is purchasing or acquiring the Securities, if applicable) is an
institutional “accredited investor” as defined in Rule 501 of Regulation D under the Securities Act as well as a “qualified
institutional buyer” as defined in Rule 144A under the Securities Act. The Purchaser agrees to furnish any additional information
reasonably requested by the Company or any of its affiliates to assure compliance with U.S. federal and state securities laws in
connection with the Transactions.

 

(h)      
The Purchaser has not been apprised of the offering of the Securities by means of any form
of general solicitation or general advertising (as those terms are used in Regulation D under the Securities Act) or in any manner
involving a public offering within the meaning of Section 4(a)(2) of the Securities Act.

 

(i)        
The Purchaser acknowledges and agrees that it has been provided with no material regarding the Company or the Securities
other than (i) the Preliminary Private Placement Memorandum, (ii) the final term sheet dated as of July     ,
2017 (the “Final Term Sheet”), which are attached to the Subscription Agreement as Exhibits B
and C hereto, respectively, and the Purchaser has relied solely on information it deems sufficient in connection with its
decision to invest in the Securities. The Purchaser acknowledges that the Placement Agent does not take any responsibility for,
and can provide no assurance as to the reliability of, the information set forth in the Preliminary Private Placement Memorandum
or any such other information. The Purchaser has requested that it not receive or otherwise be made aware of non-public information
regarding the Company that may restrict its ability to trade in the Company’s securities. The Purchaser represents that it
has access to all information that it believes is necessary, sufficient or appropriate in connection with its decision to

 

    A-14 

     

    

 

purchase
the Securities and has made an independent decision to purchase the Securities from the Company.

 

(j)        
No later than one (1) business day after the date hereof, the Purchaser agrees to deliver to the Company settlement instructions
substantially in the form of Exhibit D.1 hereto.

 

(k)      
The Purchaser has conducted its own investigation of the Company and the terms of the Securities and, in conducting its
examination, (a) it has not relied on the Placement Agent or on any statements or other information, written or oral, provided
by the Placement Agent concerning the Company, the Securities or the terms of the Transactions, (b) it has had access to, and has
had an adequate opportunity to review, all information as it deems necessary to make its decision to purchase the Securities, and
(c) it has been offered the opportunity to ask questions of the Company and received answers thereto, as it deemed necessary in
connection with the decision to purchase the Securities.

 

(l)        
The Purchaser:

 

(i)        
is able to fend for itself in the transactions contemplated hereby;

 

(ii)       
has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks
of its prospective investment in the Securities;

 

(iii)      
has considered the suitability of the Securities as an investment in light of its own circumstances and financial condition,
and the Investor is able to bear the risks associated with an investment in the Securities; and

 

(iv)     
has the ability to bear the economic risks of its prospective investment and can afford the complete loss of such investment.

 

(m)     
The Purchaser acknowledges and agrees that it has not transacted, and will not transact, in any securities of the Company,
including, but not limited to, any hedging transactions, from the time the Purchaser was first contacted by the Company or the
Placement Agent with respect to the Subscription until after the confidential information (as described in the confirmatory email
received by the Purchaser from the Placement Agent (the “Wall Cross Email”)) is made public.

 

(n)      
Except as provided in Section ‎3(d) above, the Purchaser understands, covenants and agrees that the Securities (and
the Conversion Shares) may not be sold, transferred or otherwise disposed of without registration under the Securities Act, unless
and until the Purchaser has furnished written evidence satisfactory to the Company to the effect that such sale, transfer or other
disposition will not require registration under the Securities Act and is permissible under the Securities Laws and other applicable
securities laws and regulations or that appropriate action necessary for compliance with the Securities Act, the Securities Laws
and other applicable securities laws and regulations has been taken.

 

(o)      
The Purchaser acknowledges and agrees that the Company may issue appropriate stop-transfer instructions to its transfer
agent, if any, and may make appropriate notations to the same effect in its books and records to ensure compliance with the provisions
of this Section.

 

(p)      
The Purchaser understands that the Company, the Placement Agent and others will rely upon the truth and accuracy of the
foregoing representations, acknowledgements and agreements and agrees that if any of the representations and acknowledgements deemed
to have been made by it by its purchase of the Securities are no longer accurate, the Purchaser shall promptly notify the Company

 

    A-15 

     

    

 

and the Placement Agent. The Purchaser understands that, unless the Purchaser notifies the Company in writing to the contrary before
the Settlement, each of the Purchaser’s representations and warranties contained in this Agreement will be deemed to have
been reaffirmed and confirmed as of the Settlement Date (as defined below), taking into account all information received by the
Purchaser. If the Purchaser is acquiring the Securities as a fiduciary or agent for one or more investor accounts, it represents
that it has sole investment discretion with respect to each such account and it has full power to make the foregoing representations,
acknowledgements and agreements on behalf of such account.

 

(q)      
The Purchaser acknowledges and agrees that the Placement Agent has not acted as its financial advisor or fiduciary and that
the Placement Agent and its respective directors, officers, employees, representatives and controlling persons have no responsibility
for making, and have not made, any independent investigation of the information contained herein or in the Incorporated Documents
and make no representation or warranty to the Purchaser, express or implied, with respect to the Company or the Securities or the
accuracy, completeness or adequacy of the information provided to the Purchaser, the Incorporated Documents or any other publicly
available information, nor shall any of the foregoing persons be liable for any loss or damages of any kind resulting from the
use of the information contained therein or otherwise supplied to the Purchaser.

 

(r)       
The Purchaser acknowledges that no action has been or will be taken in any jurisdiction outside the United States by the
Company or the Placement Agent that would permit an offering of the Securities, or possession or distribution of offering materials
in connection with the Transactions, including the issue of the Securities, (including any filing of a registration statement),
in any jurisdiction outside the United States where action for that purpose is required. Each Purchaser outside the United States
will comply with all applicable laws and regulations in each foreign jurisdiction in which it purchases, offers, sells or delivers
Securities or has in its possession or distributes any offering material, in all cases at its own expense.

 

(s)      
The Purchaser understands that nothing in this Agreement, information the Company has filed with and furnished to the Commission
or any other materials presented to the Purchaser in connection with the Transactions constitutes legal, business, financial or
tax advice. The Purchaser has consulted such legal, business, financial and tax advisors as it, in its sole discretion, has deemed
necessary or appropriate in connection with its purchase of the Securities and has made its own assessment and has satisfied itself
concerning the relevant tax and other economic considerations relevant to its investment in the Securities.

 

(t)       
The operations of the Purchaser have been conducted in material compliance with the rules and regulations administered or
conducted by OFAC applicable to the Purchaser. The Purchaser has performed due diligence necessary to reasonably determine that
its beneficial owners are not named on the lists of denied parties or blocked persons administered by OFAC, resident in or organized
under the laws of a country that is the subject of Sanctions, or otherwise the subject of Sanctions.

 

(u)      
The Purchaser is not an affiliate of the Company, and, during the three months preceding the date of this Subscription Agreement,
has not been an affiliate of the Company, within the meaning of Rule 144 under the Securities Act. In that connection, such Purchaser
has no ability, directly or indirectly, individually or together with any other person, to influence, direct or cause the direction
of the management or policies of the Company or any of its subsidiaries in any respect, nor has such Purchaser in fact influenced,
directed or caused the direction of the management or policies of the Company or any of its subsidiaries in any respect; neither
such Purchaser nor any of its affiliates or representatives serves as an officer or director of the Company in any similar capacity;
such Purchaser has no agreement or other understanding, written or oral, direct or indirect, with the Company, any of its directors,
officers or employees or any other stockholder of the Company with respect to its investment in, or any aspect of the business
or management of, the Company; no

 

    A-16 

     

    

 

contracts or understanding between or among the Company or any stockholders of the Company confer
on such Purchaser the power to approve or disapprove any corporate action or to exercise any other similar power with respect to
corporate affairs; such Purchaser is not otherwise, directly, or indirectly through one or more intermediaries, in control, controlled
by, or under common control with, the Company. The Purchaser understands that the Securities (and Conversion Shares) will, unless
sold pursuant to a registration statement that has been declared effective under the Securities Act or in compliance with Rule
144, bear a legend substantially to the following effect:

 

NO AFFILIATE (AS DEFINED IN RULE 144 UNDER THE SECURITIES
ACT) OF ACCURAY INCORPORATED (THE “COMPANY”) OR PERSON THAT HAS BEEN AN AFFILIATE (AS DEFINED IN RULE 144 UNDER THE
SECURITIES ACT) OF THE COMPANY DURING THE IMMEDIATELY PRECEDING THREE MONTHS MAY PURCHASE, OTHERWISE ACQUIRE OR HOLD THIS SECURITY
OR A BENEFICIAL INTEREST HEREIN.

 

4.        
Settlement of the Securities.

 

(a)      
 The delivery of and payment for the Securities (the “Settlement”) shall be made at the offices
of Davis Polk & Wardwell LLP, 1600 El Camino Real, Menlo Park, California 94025 at 10:00 A.M., New York City time, on the date
set forth in the Final Term Sheet attached to the Subscription Agreement as Exhibit C as the Settlement Date, or at such
other place, time or date as the Investors, on the one hand, and the Company, on the other hand, may agree upon, such time and
date of delivery against payment being herein referred to as the “Settlement Date.”

 

(b)      
At the Settlement, (i) the Company shall cause the Trustee to deliver to the Purchaser the principal amount of Securities
to the DTC account specified by the Purchaser on Exhibit D.1 and (ii) the Cash Purchase Price shall be delivered by
or on behalf of the Purchaser to the Company’s account specified on Exhibit D.3, such settlement to be effected pursuant
to the procedures set forth on Exhibit D.3.

 

(c)      
If the Company accepts the Purchaser’s offer to buy Securities in whole or in part, the Placement Agent shall send
the Purchaser the Final Term Sheet to the e-mail address provided on the Purchaser’s signature page to this Agreement, and
shall notify the Purchaser by e-mail of the principal amount of Securities that the Company shall sell to the Purchaser and the
Purchaser shall buy, subject to its acceptance of the terms set forth in the Final Term Sheet.

 

5.        
Agreements of the Company. The Company agrees with the Purchaser that:

 

(a)      
The Company will reserve and keep available at all times, free of pre-emptive rights, a sufficient number of shares of Common
Stock for the purpose of enabling the Company to satisfy all obligations to issue the shares of Common Stock issuable upon conversion
of the New Notes.

 

(b)      
The Company will use commercially reasonable efforts to list, subject to notice of issuance, and maintain the listing of,
the Maximum Conversion Shares on The NASDAQ Global Select Market.

 

(c)      
If, at any time when the Company is not subject to Section 13 or 15(d) of the Exchange Act, any of the Securities (or Conversion
Shares) are “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, the Company will
furnish, upon request and at the Company’s expense, for the benefit of the holders from time to time of the Securities, to
holders and beneficial owners of Securities and prospective purchasers of Securities, information satisfying the requirements of
Rule 144A(d)(4) under the Securities Act.

 

    A-17 

     

    

 

(d)      
At or prior to 8:00 a.m., New York City time, on
the first business day after the date hereof, the Company shall file with the Commission a current report on Form 8-K announcing
the Transactions, which current report the Company acknowledges and agrees will disclose all confidential information (as described
in the Wall Cross Email) to the extent the Company believes such confidential information constitutes material non-public information,
if any, with respect to the Transactions or otherwise communicated by the Company to the Purchaser in connection with the Transactions.

 

6.        
Conditions. (a) The obligation of the Purchaser to purchase and pay for the Securities to be purchased by it on the
Settlement Date pursuant to Section‎4 hereof shall be subject to the satisfaction or waiver of the following conditions on
or prior to the Settlement Date:

 

(i)        
Representations and Warranties. The representations and warranties of the Company contained herein shall be true
and correct on the date hereof and on and as of the Settlement Date, as the case may be; and the statements of the Company and
its officers made in any certificates delivered pursuant to this Agreement shall be true and correct on and as of the Settlement
Date.

 

(ii)       
No Material Adverse Change. No event or condition of a type described in Section Error! Reference source not found.
hereof shall have occurred or shall exist, which event or condition is not described in the Pricing Disclosure Package (excluding
any amendment or supplement thereto).

 

(iii)      
Officer's Certificate. The Purchaser shall have received on and as of the Settlement Date a certificate of an executive
officer of the Company (i) confirming that such officer has carefully reviewed the Pricing Disclosure Package and, to the knowledge
of such officer, the representations set forth in this Agreement are true and correct, (ii) the Company has complied with all agreements
and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Settlement Date and (iii) to
the effect set forth in paragraph ‎(ii) above.

 

(iv)     
No Legal Impediment to Issuance. No action shall have been taken and no statute, rule, regulation or order shall
have been enacted, adopted or issued by any federal, state or foreign governmental or regulatory authority that would, as of the
Settlement Date, prevent the Transactions; and no injunction or order of any federal, state or foreign court shall have been issued
that would, as of the Settlement Date, prevent the Transactions, including the issuance of the Securities pursuant thereto.

 

(b)      
The obligation of the Company to sell and deliver the Securities to be issued and sold by it on the Settlement Date pursuant
to Section 4 hereof shall be subject to the satisfaction or waiver of the following conditions on or prior to such Settlement Date:

 

(i)        
The representations and warranties of the Purchaser contained in the Agreements shall be true and correct in all material
respects on and as of the date hereof and on and as of the Settlement Date as if made on and as of the Settlement Date; and the
Purchaser shall have performed all applicable covenants and agreements and satisfied all conditions on their part to be performed
or satisfied hereunder at or prior to the Settlement Date.

 

(ii)       
All conditions to the settlement of the Exchange shall have been satisfied at or prior to the Settlement Date.

 

(iii)      
No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by
any federal, state or foreign governmental or regulatory authority that would, as of the Settlement Date, prevent the Transactions;
and no injunction or order of any federal, state or foreign court shall have been issued that would, as of the Settlement Date,
prevent the Transactions, including the issuance of the Securities pursuant thereto.

 

    A-18 

     

    

 

7.        
Taxation. The Purchaser acknowledges that, if the Purchaser is a United States person for U.S. federal income tax
purposes, either (1) the Company must be provided with a correct taxpayer identification number (“TIN”), generally
a person’s social security or federal employer identification number, and certain other information on Internal Revenue Service
(“IRS”) Form W-9, which is provided as an attachment hereto, and a certification, under penalty of perjury, that such
TIN is correct, that the Purchaser is not subject to backup withholding (at a rate of 28%) and that the Purchaser is a United States
person, or (2) another basis for exemption from backup withholding must be established. The Purchaser further acknowledges that,
if the Purchaser is not a United States person for U.S. federal income tax purposes, (1) the Company must be provided the appropriate
IRS Form W-8 signed under penalties of perjury, attesting to that non-U.S. Purchaser’s foreign status, and (2) the Purchaser
may be subject to 30% U.S. federal withholding or 28% U.S. federal backup withholding tax on certain payments made to such Purchaser
unless such Purchaser properly establishes an exemption from, or a reduced rate of, withholding or backup withholding. The Purchaser
shall promptly notify the Company if at any time such previously delivered IRS forms are no longer correct or valid.

 

8.        
Survival Clause. The respective representations, warranties, agreements and other statements of the Company and the
Purchaser set forth in this Agreement or made by or on behalf of the Purchaser pursuant to this Agreement shall remain in full
force and effect, regardless of (i) any investigation made by or on behalf of the Company, any of its officers or directors,
the Purchaser or any of its respective officers or directors, or any controlling person referred to in Section 9 hereof and (ii) delivery
of and payment for the Securities.

 

9.        
Notices. All communications hereunder shall be in writing and, if sent to the Purchaser, shall be mailed or delivered
to its address designated on the signature page to the Subscription Agreement as the same may be updated by the Purchaser from
time to time by notice to the Company in accordance with this Section ‎9; if sent to the Company, shall be mailed or delivered
to the Company at 1310 Chesapeake Terrace, Sunnyvale, California 94089 (facsimile: 408-716-4601), Attention: General Counsel.

 

All such notices and communications shall
be deemed to have been duly given: when delivered by hand, if personally delivered; five business days after being deposited in
the mail, postage prepaid, if mailed; and one business day after being timely delivered to a next-day air courier.

 

10.     
Successors. This Agreement shall inure to the benefit of and be binding upon the Purchaser, the Company and their
respective successors and legal representatives, and nothing expressed or mentioned in this Agreement is intended or shall be construed
to give any other person any legal or equitable right, remedy or claim under or in respect of this Agreement, or any provisions
herein contained; this Agreement and all conditions and provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person. No purchasers or transferees of Securities from the Purchaser will
be deemed a successor because of such purchase or transfer.

 

11.     
APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED WHOLLY THEREIN. EACH OF THE COMPANY AND THE PURCHASER HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF
ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT AND THE SECURITIES, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY
AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS.

 

    A-19 

     

    

 

12.     
Third Party Beneficiary. The Purchaser acknowledges that the Placement Agent is a third party beneficiary entitled
to rely on this Agreement and receive the benefits of the representations, warranties and covenants made by, and the responsibilities
of, the Purchaser and the Company under this Agreement, with the same force and effect as if such representation or warranty were
made directly to the Placement Agent.

 

 

    A-20 

     

    

EXHIBIT B TO THE SUBSCRIPTION AGREEMENT

 

Preliminary Private Placement Memorandum

 

 

    B-1

     

    

EXHIBIT C TO THE SUBSCRIPTION AGREEMENT

 

Final Term Sheet

 

 

    C-1

     

    

EXHIBIT D.1 TO THE SUBSCRIPTION AGREEMENT

 

 

	Name of Purchaser:	 

 

Purchaser Address:

	 
	 
	 

 

	Telephone:	 

 

	Country of Residence:	 

 

	Taxpayer Identification Number:	 

 

	Settlement Contact Name:	 

 

	Telephone:	 

 

	Email Address:

	 

 

	Jurisdiction of Organization:	 

 

 

 

DTC Participant Information for Delivery
of New Notes

 

	DTC Participant Number:	 

 

	DTC Participant Name:	 

 

	DTC Participant Phone Number:	 

 

	DTC Participant Contact Email:	 

 

	FFC Account #:	 

 

	Account # at Bank/Broker:	 

 

 

    D-1 

     

    

EXHIBIT D.2 TO THE SUBSCRIPTION AGREEMENT

 

Aggregate Purchase Price
Formula

 

Cash Purchase Price = Principal Amount of New
Notes x Purchase Price / $1,000

 

Aggregate Principal Amount of New Notes the
Purchaser Agrees to Purchase: $

 

Purchase Price = $

 

Cash Purchase Price = $

 

 

    D-2 

     

    

EXHIBIT D.3 TO THE SUBSCRIPTION AGREEMENT

 

NOTICE OF PURCHASER SUBSCRIPTION PROCEDURES

 

Attached are Subscription
Procedures for the settlement of the subscription of newly issued      % Convertible Senior Notes due
2022 (the “New Notes”) of Accuray Incorporated (the “Company”) pursuant to the Subscription
Agreement, dated as of July     , 2017, between you and the Company which is expected to occur on or about       ,
2017. To ensure timely settlement, please follow the instructions for subscribing for New Notes as set forth on the following page.

 

These instructions
supersede any prior instructions you received. Your failure to comply with the attached instructions may delay your receipt of
the New Notes.

 

If you have any questions,
please contact Katy Neumer at 407-617-9991.

 

Thank you.

 

    D-3 

     

    

 

EXHIBIT D.3 TO THE SUBSCRIPTION AGREEMENT

 

 

 

SUBSCRIBING FOR NEW NOTES 

 

To receive New Notes

 

You must BOTH direct your eligible
DTC participant through which you wish to hold a beneficial interest in the New Notes to post and accept on      ,
2017, no later than 9:00 a.m., New York City time, a one-sided deposit instruction through DTC via DWAC for the aggregate principal
amount[1] of New Notes (CUSIP/ISIN # 004397 AG0/US004397AG05) set forth next to the caption “Aggregate Principal
Amount of Securities the Purchaser Agrees to Purchase” on your signature page to your Subscription Agreement. It is important
that this instruction be submitted and the DWAC posted on      , 2017.

 

AND 

 

No later than 9:00 a.m. New York City
time, on      , 2017, you must pay the “Cash Purchase Price”[2] by wire transfer
of immediately available funds to the following account of the Company:

 

ABA Routing Number:

Beneficiary Account Name: 

SWIFT Code:

Beneficiary Account Number:

 

 

 

SETTLEMENT

 

On       ,
2017, after the Company receives your Cash Purchase Price and your delivery instructions as set forth above, and subject to the
satisfaction of the conditions to closing as set forth in your Subscription Agreement, the Company will deliver your New Notes
in accordance with the delivery instructions set forth above.

 

 

 

 

 

 

		[1]	Note that the DWAC instruction should specify the principal
amount, not the number, of New Notes.

 

		[2]	The Cash Purchase Price is the amount of cash that you
must wire to the Company in connection with your purchase of New Notes. The Cash Purchase Price is set forth in Exhibit D.2
to your Subscription Agreement.

 

 

    D-4EXHIBIT 4.01

 

 

THE NUMBER OF SHARES
OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION
1(a) OF THIS WARRANT.

 

Neuralstem, Inc.

 

Warrant To Purchase Common
Stock

 

Warrant No.: _______

Number of Shares of Common Stock:_____________

Date of Issuance: July __, 2017 (“Issuance Date”)

 

Neuralstem, Inc., a company organized under the laws of Delaware (the “Company”),
hereby certifies that, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
[ ], the registered holder hereof or its permitted assigns (the “Holder”), is entitled, subject to the
terms set forth below, to purchase from the Company, at the Exercise Price (as defined below) then in effect, at any time or times
on or after [ ] (the “Initial Exercisability Date”), but not after 11:59 p.m., New York time, on the Expiration
Date, (as defined below), ______________ (_____________) fully paid non-assessable shares of Common Stock (as defined below), subject
to adjustment as provided herein (the “Warrant Shares”). Except as otherwise defined herein, capitalized terms
in this Warrant to Purchase Common Stock (including any Warrants to Purchase Common Stock issued in exchange, transfer or replacement
hereof, this “Warrant”), shall have the meanings set forth in Section 17. This Warrant is one of the Warrants
to purchase Common Stock (the “Warrants”) issued pursuant to (i) that certain Underwriting Agreement, dated
as of July [ ], 2017 (the “Subscription Date”) by and between the Company and Canaccord Genuity Inc. (as in
effect as of the date hereof, the “Underwriting Agreement”), (ii) the Company’s Registration Statement
on Form S-3 (File number 333-218608) (the “Registration Statement”) and (iii) the Company’s prospectus
supplement dated as of July [ ], 2017.

 

     

     

    

1.                 
EXERCISE OF WARRANT.

 

(a)   
Mechanics of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations
set forth in Section 1(f)), this Warrant may be exercised by the Holder at any time or times on or after the Initial Exercisability
Date, in whole or in part, by delivery (whether via facsimile, electronic mail or otherwise) of a written notice, in the form attached
hereto as Exhibit A (each, an “Exercise Notice”, and each such date, an “Exercise Date”),
of the Holder’s election to exercise this Warrant. Within two (2) Trading Days following the delivery of the Exercise Notice,
the Holder shall make payment to the Company of an amount equal to the Exercise Price in effect on the date of such exercise multiplied
by the number of Warrant Shares as to which this Warrant is being exercised (the “Aggregate Exercise Price”)
in cash by wire transfer of immediately available funds or, if the provisions of Section 1(d) are applicable, by notifying the
Company that this Warrant is being exercised pursuant to a Cashless Exercise (as defined in Section 1(d)). The Holder shall not
be required to deliver the original Warrant in order to effect an exercise hereunder, nor shall any ink-original signature or medallion
guarantee (or other type of guarantee or notarization) with respect to any Exercise Notice be required. Execution and delivery
of the Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original
Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares. On or before the
first (1st) Trading Day following the date on which the Company has received the applicable Exercise Notice, the Company
shall transmit by facsimile or electronic mail an acknowledgment of confirmation of receipt of the Exercise Notice, in the form
attached to the Exercise Notice, to the Holder and the Company’s transfer agent (the “Transfer Agent”).
So long as the Holder delivers the Aggregate Exercise Price (or notice of a Cashless Exercise) on or prior to the second (2nd)
Trading Day following the date on which the Exercise Notice has been delivered to the Company, then on or prior to the earlier
of (i) the third (3rd) Trading Day and (ii) the number of Trading Days comprising the Standard Settlement Period, in
each case following the date on which the Exercise Notice has been delivered to the Company, or, if the Holder does not deliver
the Aggregate Exercise Price (or notice of a Cashless Exercise) on or prior to the second (2nd) Trading Day following
the date on which the Exercise Notice has been delivered to the Company, then on or prior to the second (2nd) Trading
Day following the date on which the Aggregate Exercise Price (or notice of a Cashless Exercise) is delivered (such earlier date,
the “Share Delivery Date”), the Company shall (X) provided that the Transfer Agent is participating in The Depository
Trust Company (“DTC”) Fast Automated Securities Transfer Program, credit such aggregate number of Warrant Shares
to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC
through its Deposit / Withdrawal At Custodian system, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated
Securities Transfer Program, issue and dispatch by overnight courier to the address as specified in the Exercise Notice, a certificate,
registered in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant
to such exercise. The Company shall be responsible for all fees and expenses of the Transfer Agent and all fees and expenses with
respect to the issuance of Warrant Shares via DTC, if any, including without limitation for same day processing. Upon delivery
of the Exercise Notice, the Holder shall be deemed for all corporate purposes to have become the holder of record and beneficial
owner of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date such Warrant Shares
are credited to the Holder’s DTC account or the date of delivery of the certificates evidencing such Warrant Shares, as the
case may be. If this Warrant is physically delivered to the Company in connection with any exercise pursuant to this Section 1(a)
and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares
being acquired upon an exercise, then the Company shall as soon as practicable and in no event later than three (3) Trading Days
after any exercise and at its own expense, issue and deliver to the Holder (or its designee) a new Warrant (in accordance with
Section 7(d)) representing the right to purchase the number of Warrant Shares issuable immediately prior to such exercise under
this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional Warrant Shares are
to be issued upon the exercise of this Warrant, but rather the number of Warrant Shares to be issued shall be rounded to the nearest
whole number. The Company shall pay any and all transfer, stamp, issuance and similar taxes, costs and expenses (including, without
limitation, fees and expenses of the Transfer Agent) which may be payable with respect to the issuance and delivery of Warrant
Shares upon exercise of this Warrant. The Company’s obligations to issue and deliver Warrant Shares in accordance with the
terms and subject to the conditions hereof are absolute and unconditional, irrespective of any action or inaction by the Holder
to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person
or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination; provided, however,
that the Company shall not be required to deliver Warrant Shares with respect to an exercise prior to the Holder’s delivery
of the Aggregate Exercise Price (or notice of a Cashless Exercise) with respect to such exercise.

 

    	 	- 2 -	 

     

    

(b)   Exercise
Price. For purposes of this Warrant, “Exercise Price” means $[ ] per share, subject to adjustment as provided
herein.

 

(c)   
Company’s Failure to Timely Deliver Securities. If either (I) the Company shall fail for any reason or for
no reason to issue to the Holder on or prior to the applicable Share Delivery Date, if (x) the Transfer Agent is not participating
in the DTC Fast Automated Securities Transfer Program, a certificate for the number of shares of Common Stock to which the Holder
is entitled and register such Common Stock on the Company’s share register or (y) if the Transfer Agent is participating
in the DTC Fast Automated Securities Transfer Program, to credit the Holder’s balance account with DTC, for such number of
shares of Common Stock to which the Holder is entitled upon the Holder’s exercise of this Warrant or (II) a registration
statement (which may be the Registration Statement) covering the issuance or resale of the Warrant Shares that are the subject
of the Exercise Notice (the “Exercise Notice Warrant Shares”) is not available for the issuance or resale, as
applicable, of such Exercise Notice Warrant Shares and (x) the Company fails to promptly, but in no event later than one (1) Business
Day after such registration statement becomes unavailable, to so notify the Holder and (y) the Company is unable to deliver the
Exercise Notice Warrant Shares electronically without any restrictive legend by crediting such aggregate number of Exercise Notice
Warrant Shares to the Holder’s or its designee’s balance account with DTC through its Deposit / Withdrawal At Custodian
system (the event described in the immediately foregoing clause (II) is hereinafter referred as a “Notice Failure”
and together with the event described in clause (I) above, an “Exercise Failure”), then, in addition to all
other remedies available to the Holder, if on or prior to the applicable Share Delivery Date either (I) if the Transfer Agent is
not participating in the DTC Fast Automated Securities Transfer Program, the Company shall fail to issue and deliver a certificate
to the Holder and register such shares of Common Stock on the Company’s share register or, if the Transfer Agent is participating
in the DTC Fast Automated Securities Transfer Program, credit the Holder’s balance account with DTC for the number of shares
of Common Stock to which the Holder is entitled upon the Holder’s exercise hereunder or pursuant to the Company’s obligation
pursuant to clause (ii) below or (II) a Notice Failure occurs, and if on or after such Trading Day the Holder purchases (in an
open market transaction or otherwise) Common Stock to deliver in satisfaction of a sale by the Holder of shares of Common Stock
issuable upon such exercise that the Holder anticipated receiving from the Company (a “Buy-In”), then the Company
shall, within three (3) Trading Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash
to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions and other out-of-pocket
expenses, if any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which point the Company’s
obligation to deliver such certificate (and to issue such shares of Common Stock) or credit such Holder’s balance account
with DTC for such shares of Common Stock shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate
or certificates representing such shares of Common Stock or credit such Holder’s balance account with DTC, as applicable,
and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of
shares of Common Stock, times (B) any trading price of the Common Stock selected by the Holder in writing as in effect at any time
during the period beginning on the applicable Exercise Date and ending on the applicable Share Delivery Date. Nothing shall limit
the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity, including, without limitation,
a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates
representing Warrant Shares (or to electronically deliver such Warrant Shares) upon the exercise of this Warrant as required pursuant
to the terms hereof. While this Warrant is outstanding, the Company shall cause its transfer agent to participate in the DTC Fast
Automated Securities Transfer Program. In addition to the foregoing rights, (i) if the Company fails to deliver the applicable
number of Warrant Shares upon an exercise pursuant to Section 1 by the applicable Share Delivery Date, then the Holder shall have
the right to rescind such exercise in whole or in part and retain and/or have the Company return, as the case may be, any portion
of this Warrant that has not been exercised pursuant to such Exercise Notice; provided that the rescission of an exercise shall
not affect the Company’s obligation to make any payments that have accrued prior to the date of such notice pursuant to this
Section 1(c) or otherwise, and (ii) if a registration statement (which may be the Registration Statement) covering the issuance
or resale of the Warrant Shares that are subject to an Exercise Notice is not available for the issuance or resale, as applicable,
of such Exercise Notice Warrant Shares and the Holder has submitted an Exercise Notice prior to receiving notice of the non-availability
of such registration statement and the Company has not already delivered the Warrant Shares underlying such Exercise Notice electronically
without any restrictive legend by crediting such aggregate number of Warrant Shares to which the Holder is entitled pursuant to
such exercise to the Holder’s or its designee’s balance account with DTC through its Deposit / Withdrawal At Custodian
system, the Holder shall have the option, by delivery of notice to the Company, to (x) rescind such Exercise Notice in whole or
in part and retain or have returned, as the case may be, any portion of this Warrant that has not been exercised pursuant to such
Exercise Notice; provided that the rescission of an Exercise Notice shall not affect the Company’s obligation to make any
payments that have accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise, and/or (y) switch some
or all of such Exercise Notice from a cash exercise to a Cashless Exercise.

 

    	 	- 3 -	 

     

    

(d)  
Cashless Exercise. Notwithstanding anything contained herein to the contrary, if a registration statement (which
may be the Registration Statement) covering the issuance or resale of the Exercise Notice Warrant Shares is not available for the
issuance or resale, as applicable, of such Exercise Notice Warrant Shares, the Holder may, in its sole discretion, exercise this
Warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such
exercise in payment of the Aggregate Exercise Price, elect instead to receive upon such exercise the “Net Number” of
shares of Common Stock determined according to the following formula (a “Cashless Exercise”):

 

 

 

 

 

 

 

 

    	 	- 4 -	 

     

    

Net Number = (A x B) – (A x
C)

B

 

For purposes of the foregoing formula:

 

A= the total number of shares with
respect to which this Warrant is then being exercised.

 

B= as applicable: (i) the Closing
Sale Price of the Common Stock on the Trading Day immediately preceding the date of the applicable Exercise Notice if such Exercise
Notice is (1) both executed and delivered pursuant to Section 1(a) hereof on a day that is not a Trading Day or (2) both executed
and delivered pursuant to Section 1(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as
defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option
of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Exercise Notice or (z) the
Bid Price of the Common Stock as of the time of the Holder’s execution of the applicable Exercise Notice if such Exercise
Notice is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter
pursuant to Section 1(a) hereof or (iii) the Closing Sale Price of the Common Stock on the date of the applicable Exercise Notice
if the date of such Exercise Notice is a Trading Day and such Exercise Notice is both executed and delivered pursuant to Section
1(a) hereof after the close of “regular trading hours” on such Trading Day.

 

C= the Exercise Price then in effect
for the applicable Warrant Shares at the time of such exercise.

 

If Warrant Shares are
issued in such a cashless exercise, the Company acknowledges and agrees that in accordance with Section 3(a)(9) of the Securities
Act of 1933, as amended, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised, and the
holding period of the Warrants being exercised may be tacked on to the holding period of the Warrant Shares. The Company agrees
not to take any position contrary to this Section 1(d).

 

(e)   
Disputes. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of
the Warrant Shares, the Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve
such dispute in accordance with Section 11.

 

    	 	- 5 -	 

     

    

(f)   
Beneficial Ownership. Notwithstanding anything to the contrary contained herein, the Company shall not effect the
exercise of any portion of this Warrant, and the Holder shall not have the right to exercise any portion of this Warrant, pursuant
to the terms and conditions of this Warrant and any such exercise shall be null and void and treated as if never made, to the extent
that after giving effect to such exercise, the Holder together with the other Attribution Parties collectively would beneficially
own in excess of [4.99][9.99]% (the “Maximum Percentage”) of the number of shares of Common Stock outstanding
immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of shares of Common
Stock beneficially owned by the Holder and the other Attribution Parties shall include the number of shares of Common Stock held
by the Holder and all other Attribution Parties plus the number of shares of Common Stock issuable upon exercise of this Warrant
with respect to which the determination of such sentence is being made, but shall exclude the number of shares of Common Stock
which would be issuable upon (A) exercise of the remaining, unexercised portion of this Warrant beneficially owned by the Holder
or any of the other Attribution Parties and (B) exercise or conversion of the unexercised or unconverted portion of any other securities
of the Company (including, without limitation, any convertible notes or convertible preferred stock or warrants, including the
other Warrants) beneficially owned by the Holder or any other Attribution Party subject to a limitation on conversion or exercise
analogous to the limitation contained in this Section 1(f). For purposes of this Section 1(f), beneficial ownership shall be calculated
in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”). For purposes
of this Warrant, in determining the number of outstanding shares of Common Stock the Holder may acquire upon the exercise of this
Warrant without exceeding the Maximum Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected
in (x) the Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q and Current Reports on Form 8-K
or other public filing with the Securities and Exchange Commission (the “SEC”), as the case may be, (y) a more
recent public announcement by the Company or (3) any other written notice by the Company or the Transfer Agent setting forth the
number of shares of Common Stock outstanding (the “Reported Outstanding Share Number”). If the Company receives
an Exercise Notice from the Holder at a time when the actual number of outstanding shares of Common Stock is less than the Reported
Outstanding Share Number, the Company shall (i) notify the Holder in writing of the number of shares of Common Stock then outstanding
and, to the extent that such Exercise Notice would otherwise cause the Holder’s beneficial ownership, as determined pursuant
to this Section 1(f), to exceed the Maximum Percentage, the Holder must notify the Company of a reduced number of Warrant Shares
to be purchased pursuant to such Exercise Notice (the number of shares by which such purchase is reduced, the “Reduction
Shares”) and (ii) as soon as reasonably practicable, the Company shall return to the Holder any exercise price paid by
the Holder for the Reduction Shares. For any reason at any time, upon the written or oral request of the Holder, the Company shall
within one (1) Business Day confirm orally and in writing or by electronic mail 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 and any other Attribution Party since
the date as of which the Reported Outstanding Share Number was reported. In the event that the issuance of Common Stock to the
Holder upon exercise of this Warrant results in the Holder and the other Attribution Parties being deemed to beneficially own,
in the aggregate, more than the Maximum Percentage of the number of outstanding shares of Common Stock (as determined under Section
13(d) of the 1934 Act), the number of shares so issued by which the Holder’s and the other Attribution Parties’ aggregate
beneficial ownership exceeds the Maximum Percentage (the “Excess Shares”) shall be deemed null and void and
shall be cancelled ab initio, and the Holder shall not have the power to vote or to transfer the Excess Shares. As soon as reasonably
practicable after the issuance of the Excess Shares has been deemed null and void, the Company shall return to the Holder the exercise
price paid by the Holder for the Excess Shares. Upon delivery of a written notice to the Company, the Holder may from time to time
increase or decrease the Maximum Percentage to any other percentage not in excess of 9.99% as specified in such notice; provided
that (i) any such increase in the Maximum Percentage will not be effective until the sixty-first (61st) day after such
notice is delivered to the Company and (ii) any such increase or decrease will apply only to the Holder and the other Attribution
Parties and not to any other holder of Warrants that is not an Attribution Party of the Holder. For purposes of clarity, the shares
of Common Stock issuable pursuant to the terms of this Warrant in excess of the Maximum Percentage shall not be deemed to be beneficially
owned by the Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act. No prior inability
to exercise this Warrant pursuant to this paragraph shall have any effect on the applicability of the provisions of this paragraph
with respect to any subsequent determination of exercisability. The provisions of this paragraph shall be construed and implemented
in a manner otherwise than in strict conformity with the terms of this Section 1(f) to the extent necessary to correct this paragraph
or any portion of this paragraph which may be defective or inconsistent with the intended beneficial ownership limitation contained
in this Section 1(f) or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitation
contained in this paragraph may not be waived and shall apply to a successor holder of this Warrant.

 

    	 	- 6 -	 

     

    

(g)  
Required Reserve Amount.  So long as this Warrant remains outstanding, the Company shall at all times keep reserved
for issuance under this Warrant a number of shares of Common Stock at least equal to 100% of the maximum number of shares of Common
Stock as shall be necessary to satisfy the Company’s obligation to issue shares of Common Stock under the Warrants then outstanding
(without regard to any limitations on exercise) (the “Required Reserve Amount”); provided that at no
time shall the number of shares of Common Stock reserved pursuant to this Section 1(g) be reduced other than in connection with
any exercise of Warrants or such other event covered by Section 2(c) below.  The Required Reserve Amount (including, without
limitation, each increase in the number of shares so reserved) shall be allocated pro rata among the holders of the Warrants based
on the number of shares of Common Stock issuable upon exercise of Warrants held by each holder thereof on the Issuance Date (without
regard to any limitations on exercise) (the “Authorized Share Allocation”). In the event that a holder shall
sell or otherwise transfer any of such holder’s Warrants, each transferee shall be allocated a pro rata portion of such holder’s
Authorized Share Allocation. Any shares of Common Stock reserved and allocated to any Person which ceases to hold any Warrants
shall be allocated to the remaining holders of Warrants, pro rata based on the number of shares of Common Stock issuable upon exercise
of the Warrants then held by such holders thereof (without regard to any limitations on exercise).

 

(h)  
Insufficient Authorized Shares. If at any time while this Warrant remains outstanding the Company does not have a
sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance the Required
Reserve Amount (an “Authorized Share Failure”), then the Company shall promptly take all action reasonably necessary
to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to reserve the Required
Reserve Amount for this Warrant then outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable
after the date of the occurrence of an Authorized Share Failure, but in no event later than ninety (90) days after the occurrence
of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase in the number
of authorized shares of Common Stock. In connection with such meeting, the Company shall provide each stockholder with a proxy
statement and shall use its reasonable best efforts to solicit its stockholders’ approval of such increase in authorized
shares of Common Stock and to cause its board of directors to recommend to the stockholders that they approve such proposal. Notwithstanding
the foregoing, if any such time of an Authorized Share Failure, the Company is able to obtain the written consent of a majority
of the shares of its issued and outstanding shares of Common Stock to approve the increase in the number of authorized shares of
Common Stock, the Company may satisfy this obligation by obtaining such consent and submitting for filing with the SEC an Information
Statement on Schedule 14C.

 

    	 	- 7 -	 

     

    

2.     
ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and the number of Warrant Shares
shall be adjusted from time to time as follows:

 

(a)   
Adjustment Upon Issuance of Shares of Common Stock. If and whenever on or after the Subscription Date, the Company
issues or sells, or in accordance with this Section 2 is deemed to have issued or sold, any shares of Common Stock (including
the issuance or sale of shares of Common Stock owned or held by or for the account of the Company, but excluding any Excluded Securities
issued or sold or deemed to have been issued or sold) for a consideration per share (the “New Issuance Price”)
less than a price equal to the Exercise Price in effect immediately prior to such issuance or sale or deemed issuance or sale (such
Exercise Price then in effect is referred to herein as the “Applicable Price”) (the foregoing a “Dilutive
Issuance”), then immediately after such Dilutive Issuance, the Exercise Price then in effect shall be reduced to an amount
equal to the New Issuance Price. For all purposes of the foregoing (including, without limitation, determining the adjusted Exercise
Price and the New Issuance Price under this Section 2(a)), the following shall be applicable:

 

(i)    
 Issuance of Options. If the Company in any manner grants or sells any Options and the lowest price per share for
which one share of Common Stock is at any time issuable upon the exercise of any such Option or upon conversion, exercise or exchange
of any Convertible Securities issuable upon exercise of any such Option or otherwise pursuant to the terms thereof is less than
the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the
Company at the time of the granting or sale of such Option for such price per share. For purposes of this Section 2(a)(i),
the “lowest price per share for which one share of Common Stock is issuable upon the exercise of any such Options or upon
conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option or otherwise pursuant
to the terms thereof” shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received
or receivable by the Company with respect to any one share of Common Stock upon the granting or sale of such Option, upon exercise
of such Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option or otherwise
pursuant to the terms thereof and (y) the lowest exercise price set forth in such Option for which one share of Common Stock is
issuable upon the exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities issuable
upon exercise of any such Option or otherwise pursuant to the terms thereof minus (2) the sum of all amounts paid or payable to
the holder of such Option (or any other Person) upon the granting or sale of such Option, upon exercise of such Option and upon
conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option or otherwise pursuant to the
terms thereof plus the value of any other consideration received or receivable by, or benefit conferred on, the holder of such
Option (or any other Person). Except as contemplated below, no further adjustment of the Exercise Price shall be made upon the
actual issuance of such shares of Common Stock or of such Convertible Securities upon the exercise of such Options or otherwise
pursuant to the terms of or upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such
Convertible Securities.

 

    	 	- 8 -	 

     

    

(ii)  
 Issuance of Convertible Securities. If the Company in any manner issues or sells any Convertible Securities and
the lowest price per share for which one share of Common Stock is at any time issuable upon the conversion, exercise or exchange
thereof or otherwise pursuant to the terms thereof is less than the Applicable Price, then such share of Common Stock shall be
deemed to be outstanding and to have been issued and sold by the Company at the time of the issuance or sale of such Convertible
Securities for such price per share. For the purposes of this Section 2(a)(ii), the “lowest price per share for which
one share of Common Stock is issuable upon the conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof”
shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company
with respect to one share of Common Stock upon the issuance or sale of the Convertible Security and upon conversion, exercise or
exchange of such Convertible Security or otherwise pursuant to the terms thereof and (y) the lowest conversion price set forth
in such Convertible Security for which one share of Common Stock is issuable upon conversion, exercise or exchange thereof or otherwise
pursuant to the terms thereof minus (2) the sum of all amounts paid or payable to the holder of such Convertible Security (or any
other Person) upon the issuance or sale of such Convertible Security plus the value of any other consideration received or receivable
by, or benefit conferred on, the holder of such Convertible Security (or any other Person). Except as contemplated below, no further
adjustment of the Exercise Price shall be made upon the actual issuance of such shares of Common Stock upon conversion, exercise
or exchange of such Convertible Securities or otherwise pursuant to the terms thereof, and if any such issuance or sale of such
Convertible Securities is made upon exercise of any Options for which adjustment of this Warrant has been or is to be made pursuant
to other provisions of this Section 2(a), except as contemplated below, no further adjustment of the Exercise Price shall
be made by reason of such issuance or sale.

 

(iii) Change in Option Price or
Rate of Conversion. If the purchase or exercise price provided for in any Options, the additional consideration, if any, payable
upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible Securities
are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time (other than proportional
changes in conversion or exercise prices, as applicable, in connection with an event referred to in Section 2(c)), the Exercise
Price in effect at the time of such increase or decrease shall be adjusted to the Exercise Price which would have been in effect
at such time had such Options or Convertible Securities provided for such increased or decreased purchase price, additional consideration
or increased or decreased conversion rate, as the case may be, at the time initially granted, issued or sold. For purposes of this
Section 2(a)(iii), if the terms of any Option or Convertible Security that was outstanding as of the Subscription Date are
increased or decreased in the manner described in the immediately preceding sentence, then such Option or Convertible Security
and the shares of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued
as of the date of such increase or decrease. No adjustment pursuant to this Section 2(a) shall be made if such adjustment
would result in an increase of the Exercise Price then in effect.

 

    	 	- 9 -	 

     

    

(iv) Calculation of Consideration
Received. If any Option and/or Convertible Security is issued in connection with the issuance or sale or deemed issuance or
sale of any other securities of the Company (as determined by the Holder, the "Primary Security", and such Option
and/or Convertible Security and/or Adjustment Right, the "Secondary Securities" and together with the Primary
Security, each a "Unit"), together comprising one integrated transaction (or one or more transactions if such
issuances or sales or deemed issuances or sales of securities of the Company either (A) have at least one investor or purchaser
in common, (B) are consummated in reasonable proximity to each other and/or (C) are consummated under the same plan of financing),
the aggregate consideration per share of Common Stock with respect to such Primary Security shall be deemed to be the lowest of
(x) the purchase price of such Unit, (y) if such Primary Security is an Option and/or Convertible Security, the lowest price per
share for which one share of Common Stock is at any time issuable upon the exercise or conversion of the Primary Security in accordance
with Section 2(a)(i) or 2(a)(ii) above and (z) the quotient of (I) the sum of the three (3) lowest VWAPs of the Common Stock during
the five (5) Trading Day period immediately following the public announcement of such Dilutive Issuance, divided by (II) three
(3) (for the avoidance of doubt, if such public announcement is released prior to the opening of the Principal Market on a Trading
Day, such Trading Day shall be the first Trading Day in such five (5) Trading Day period). If any shares of Common Stock, Options
or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor
will be deemed to be the net amount of consideration received by the Company therefor. If any shares of Common Stock, Options or
Convertible Securities are issued or sold for a consideration other than cash, the amount of such consideration received by the
Company will be the fair value of such consideration, except where such consideration consists of publicly traded securities, in
which case the amount of consideration received by the Company for such securities will be the arithmetic average of the VWAPs
of such security for each of the five (5) Trading Days immediately preceding the date of receipt. If any shares of Common Stock,
Options or Convertible Securities are issued to the owners of the non-surviving entity in connection with any merger in which the
Company is the surviving entity, the amount of consideration therefor will be deemed to be the fair value of such portion of the
net assets and business of the non-surviving entity as is attributable to such shares of Common Stock, Options or Convertible Securities
(as the case may be). The fair value of any consideration other than cash or publicly traded securities will be determined jointly
by the Company and the Holder. If such parties are unable to reach agreement within ten (10) days after the occurrence of an event
requiring valuation (the “Valuation Event”), the fair value of such consideration will be determined within
five (5) Trading Days after the tenth (10th) day following such Valuation Event by an independent, reputable appraiser
jointly selected by the Company and the Holder. The determination of such appraiser shall be final and binding upon all parties
absent manifest error and the fees and expenses of such appraiser shall be borne by the Company.

 

    	 	- 10 -	 

     

    

(v)  
 Record Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling
them (A) to receive a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities
or (B) to subscribe for or purchase shares of Common Stock, Options or Convertible Securities, then such record date will
be deemed to be the date of the issuance or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration
of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase
(as the case may be).

 

(b)  
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.

 

(c)   
Adjustment Upon Subdivision or Combination of Common Stock. If the Company at any time on or after the Subscription
Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares
of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately
reduced and the number of Warrant Shares will be proportionately increased. If the Company at any time on or after the Subscription
Date combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock
into a smaller number of shares, the Exercise Price in effect immediately prior to such combination will be proportionately increased
and the number of Warrant Shares will be proportionately decreased. Any adjustment under this Section 2(c) shall become effective
at the close of business on the date the subdivision or combination becomes effective.

 

(d)  
Holder’s Right of Alternative Exercise Price Following Issuance of Certain Options or Convertible Securities.
In addition to and not in limitation of the other provisions of this Section 2, if the Company in any manner issues or sells
or enters into any agreement to issue or sell, any Common Stock, Options or Convertible Securities (any such securities, “Variable
Price Securities”) after the Subscription Date that are issuable pursuant to such agreement or convertible into or exchangeable
or exercisable for shares of Common Stock at a price which varies or may vary with the market price of the shares of Common Stock,
including by way of one or more reset(s) to a fixed price, but exclusive of such formulations reflecting customary anti-dilution
provisions (such as share splits, share combinations, share dividends and similar transactions) (each of the formulations for such
variable price being herein referred to as, the “Variable Price”), the Company shall provide written notice
thereof via facsimile and overnight courier to the Holder on the date of such agreement and the issuance of such Convertible Securities
or Options. From and after the date the Company enters into such agreement or issues any such Variable Price Securities, the Holder
shall have the right, but not the obligation, in its sole discretion to substitute the Variable Price for the Exercise Price upon
exercise of this Warrant by designating in the Exercise Notice delivered upon any exercise of this Warrant that solely for purposes
of such exercise the Holder is relying on the Variable Price rather than the Exercise Price then in effect. The Holder’s
election to rely on a Variable Price for a particular exercise of this Warrant shall not obligate the Holder to rely on a Variable
Price for any future exercises of this Warrant.

 

    	 	- 11 -	 

     

    

(e)   
Other Events. If any event occurs of the type contemplated by the provisions of this Section 2 but not expressly
provided for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights
or other rights with equity features), then the Company’s Board of Directors will make an appropriate adjustment in the Exercise
Price and the number of Warrant Shares, as mutually determined by the Company’s Board of Directors and the Required Holders,
so as to protect the rights of the Holder; provided that no such adjustment pursuant to this Section 2(e) will increase
the Exercise Price or decrease the number of Warrant Shares as otherwise determined pursuant to this Section 2.

 

3.                 
RIGHTS UPON DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 2 above, if, on or after the
Subscription Date and on or prior to the Expiration Date, the Company shall declare or make any dividend or other distribution
of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise
(including, without limitation, any distribution of cash, stock or other securities, property, options, evidence of indebtedness
or any other assets by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar
transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the
Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein
if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to
any limitations or restrictions on exercise of this Warrant, including without limitation, the Maximum Percentage) immediately
before the date on which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record
holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however,
that to the extent that the Holder’s right to participate in any such Distribution would result in the Holder and the other
Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Distribution
to such extent (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Distribution
(and beneficial ownership) to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the
Holder until such time or times as its right thereto would not result in the Holder and the other Attribution Parties exceeding
the Maximum Percentage, at which time or times the Holder shall be granted such Distribution (and any Distributions declared or
made on such initial Distribution or on any subsequent Distribution held similarly in abeyance) to the same extent as if there
had been no such limitation).

 

4.     
PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.

 

    	 	- 12 -	 

     

    

(a)               
Purchase Rights. In addition to any adjustments pursuant to Section 2 above, if at any time on or after the Subscription
Date and on or prior to the Expiration Date the Company grants, issues or sells any Options, Convertible Securities or rights to
purchase stock, warrants, securities or other property pro rata to the record holders of any class of Common Stock (the “Purchase
Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate
Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon
complete exercise of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant, including without
limitation, the Maximum Percentage) immediately before the date on which a record is taken for the grant, issuance or sale of such
Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for
the grant, issuance or sale of such Purchase Rights (provided, however, that to the extent that the Holder’s
right to participate in any such Purchase Right would result in the Holder and the other Attribution Parties exceeding the Maximum
Percentage, then the Holder shall not be entitled to participate in such Purchase Right to such extent (and shall not be entitled
to beneficial ownership of such Common Stock as a result of such Purchase Right (and beneficial ownership) to such extent) and
such Purchase Right to such extent shall be held in abeyance for the benefit of the Holder until such time or times as its right
thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times
the Holder shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any
subsequent Purchase Right to be held similarly in abeyance) to the same extent as if there had been no such limitation).

 

(b)              
Fundamental Transaction.The Company shall not enter into or be party to a Fundamental Transaction unless the
Successor Entity assumes in writing all of the obligations of the Company under this Warrant in accordance with the provisions
of this Section 4(b), including agreements to deliver to the Holder in exchange for this Warrant a security of the Successor Entity
evidenced by a written instrument substantially similar in form and substance to this Warrant, including, without limitation, which
is exercisable for a corresponding number of shares of capital stock equivalent to the shares of Common Stock acquirable and receivable
upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction,
and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account
the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital
stock, such adjustments to the number of shares of capital stock and such exercise price being for the purpose of protecting the
economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction). Upon the consummation of
each Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of
the applicable Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company”
shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the
obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein.
Upon consummation of each Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall
be issued upon exercise of this Warrant at any time after the consummation of the applicable Fundamental Transaction, in lieu of
the shares of Common Stock (or other securities, cash, assets or other property (except such items still issuable under Sections
3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of this Warrant prior to the applicable
Fundamental Transaction, such shares of common stock (or its equivalent) of the Successor Entity (including its Parent Entity)
which the Holder would have been entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant
been exercised immediately prior to the applicable Fundamental Transaction (without regard to any limitations on the exercise of
this Warrant), as adjusted in accordance with the provisions of this Warrant. Notwithstanding the foregoing, and without limiting
Section 1(f) hereof, the Holder may elect, at its sole option, by delivery of written notice to the Company to waive this Section
4(b) to permit the Fundamental Transaction without the assumption of this Warrant. In addition to and not in substitution for any
other rights hereunder, prior to the consummation of each Fundamental Transaction pursuant to which holders of shares of Common
Stock are entitled to receive securities or other assets with respect to or in exchange for shares of Common Stock (a “Corporate
Event”), the Company shall make appropriate provision to insure that the Holder will thereafter have the right to receive
upon an exercise of this Warrant at any time after the consummation of the applicable Fundamental Transaction but prior to the
Expiration Date, in lieu of the shares of the Common Stock (or other securities, cash, assets or other property (except such items
still issuable under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of
the Warrant prior to such Fundamental Transaction, such shares of stock, securities, cash, assets or any other property whatsoever
(including warrants or other purchase or subscription rights) (collectively, the “Corporate Event Consideration”) which
the Holder would have been entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been
exercised immediately prior to the applicable Fundamental Transaction (without regard to any limitations on the exercise of this
Warrant). The provision made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory to the
Holder.

 

    	 	- 13 -	 

     

    

(c)   
Black Scholes Value. Notwithstanding the foregoing and the provisions of Section 4(b) above, at the request
of the Holder delivered at any time commencing on the earliest to occur of (x) the public disclosure of any Change of Control,
(y) the consummation of any Change of Control and (z) the Holder first becoming aware of any Change of Control through the date
that is ninety (90) days after the public disclosure of the consummation of such Fundamental Transaction by the Company pursuant
to a Current Report on Form 8-K filed with the SEC, the Company or the Successor Entity (as the case may be) shall purchase this
Warrant from the Holder on the date of such request by paying to the Holder cash in an amount equal to the Black Scholes Value.
Payment of such amounts shall be made by the Company (or at the Company’s direction) to the Holder on or prior to the later
of (x) the second (2nd) Trading Day after the date of such request and (y) the date of consummation of such Change of
Control.

 

5.     
NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate
of Incorporation or Bylaws, or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution,
issuance 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, and will at all times in good faith carry out all of the provisions of this Warrant and take all action
as may be required to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall
not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price
then in effect, (ii) shall take all such actions as may be necessary or appropriate in order that the Company may validly
and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant, and (iii) shall, so long
as any of the Warrants are outstanding, take all action necessary to reserve and keep available out of its authorized and unissued
shares of Common Stock, solely for the purpose of effecting the exercise of the Warrants, the number of shares of Common Stock
as shall from time to time be necessary to effect the exercise of the Warrants then outstanding (without regard to any limitations
on exercise).

 

    	 	- 14 -	 

     

    

6.     
WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely
in such Person’s capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the
holder of capital stock of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon
the Holder, solely in such Person’s capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company
or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification
of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights,
or otherwise, prior to the issuance to the Holder of the Warrant Shares which such Person is then entitled to receive upon the
due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on
the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether
such liabilities are asserted by the Company or by creditors of the Company. Notwithstanding this Section 6, the Company shall
provide the Holder with copies of the same notices and other information given to the stockholders of the Company generally, contemporaneously
with the giving thereof to the stockholders.

 

7.     
REISSUANCE OF WARRANTS.

 

(a)               
Transfer of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company,
whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)),
registered as the Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the
Holder and, if less than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in
accordance with Section 7(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.

 

(b)  
Lost, Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company
of the loss, theft, destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification
undertaking by the Holder to the Company in customary form (but without the obligation to post a bond) and, in the case of mutilation,
upon surrender and cancellation of this Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance
with Section 7(d)) representing the right to purchase the Warrant Shares then underlying this Warrant.

 

(c)   
Exchangeable for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the
principal office of the Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate
the right to purchase the number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right
to purchase such portion of such Warrant Shares as is designated by the Holder at the time of such surrender.

 

    	 	- 15 -	 

     

    

(d)  
Issuance of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant,
such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant,
the right to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to
Section 7(a) or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock
underlying the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying
this Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance
Date, and (iv) shall have the same rights and conditions as this Warrant.

 

8.                 
NOTICES. Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice
shall be given in writing, (i) if delivered (a) from within the domestic United States, by first-class registered or certified
airmail, or nationally recognized overnight express courier, postage prepaid, electronic mail or by facsimile or (b) from outside
the United States, by International Federal Express, electronic mail or facsimile, and (ii) will be deemed given (A) if delivered
by first-class registered or certified mail domestic, three (3) Business Days after so mailed, (B) if delivered by nationally recognized
overnight carrier, one (1) Business Day after so mailed, (C) if delivered by International Federal Express, two (2) Business Days
after so mailed, (D) on the date of transmission, if delivered by electronic mail to each of the email addresses specified in this
Section 8 prior to 5:00 p.m. (New York time) on a Trading Day, (E) the next Trading Day after the date of transmission, if delivered
by electronic mail to each of the email addresses specified in this Section 8 on a day that is not a Trading Day or later than
5:00 p.m. (New York time) on any Trading Day and (F) if delivered by facsimile, upon electronic confirmation of receipt of such
facsimile, and will be delivered and addressed as follows:

 

(i)       if to the Company, to:

 

Neuralstem, Inc.

20271 Goldenroad Lane

Germantown, MD 20876

Attention: Rich Daly

Facsimile: 301.560.6634

Email: rdaly@neuralstem.com

 

(ii) if to the Holder, at such address
or other contact information delivered by the Holder to Company or as is on the books and records of the Company.

 

The Company shall provide the Holder with prompt
written notice of all actions taken pursuant to this Warrant, including in reasonable detail a description of such action and the
reason therefor. Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately
upon any adjustment of the Exercise Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment
and (ii) at least fifteen (15) days prior to the date on which the Company closes its books or takes a record (A) with respect
to any dividend or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or sales of any Options,
Convertible Securities or rights to purchase stock, warrants, securities or other property to holders of shares of Common Stock
or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation; provided
in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided
to the Holder. It is expressly understood and agreed that the time of exercise specified by the Holder in each Exercise Notice
shall be definitive and may not be disputed or challenged by the Company.

 

    	 	- 16 -	 

     

    

9.     
AMENDMENT AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant may be amended or waived
and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if
the Company has obtained the written consent of the Holder.

 

10.  GOVERNING
LAW; JURISDICTION; JURY TRIAL. This Warrant shall be governed by and construed and enforced in accordance with, and all questions
concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws of
the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of
New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of
New York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City
of New York, Borough of Manhattan, 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 brought
in an inconvenient forum or that the venue of such suit, action or proceeding is improper. The Company 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
to the Company at the address set forth in Section 8(i) above or such other address as the Company subsequently delivers to the
Holder 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 manner permitted by law. Nothing contained herein
shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Company in any other
jurisdiction to collect on the Company’s obligations to the Holder, to realize on any collateral or any other security for
such obligations, or to enforce a judgment or other court ruling in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES
ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH
OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

11.  DISPUTE
RESOLUTION. In the case of a dispute relating to the Exercise Price, the Closing Sale Price, the Bid Price, Black Scholes Value
or fair market value or the arithmetic calculation of the number of Warrant Shares (as the case may be) (including, without limitation,
a dispute relating to the determination of any of the foregoing), the Company or the Holder (as the case may be) shall submit the
dispute to the other party via facsimile (A) if by the Company, within two (2) Business Days after the occurrence of the circumstances
giving rise to such dispute or (B) if by the Holder, at any time after the Holder learned of the circumstances giving rise to such
dispute. If the Holder and the Company are unable to promptly resolve such dispute relating to such Exercise Price, such Closing
Sale Price, such Bid Price, Black Scholes Value or such fair market value or such arithmetic calculation of the number of Warrant
Shares (as the case may be), at any time after the second (2nd) Business Day following such initial notice by the Company
or the Holder (as the case may be) of such dispute to the Company or the Holder (as the case may be), then the Holder may, at its
sole option, select an independent, reputable investment bank to resolve such dispute.

 

    	 	- 17 -	 

     

    

(a)       The
Holder and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered in
accordance with the first sentence of this Section 11 and (B) written documentation supporting its position with respect to such
dispute, in each case, no later than 5:00 p.m. (New York time) by the fifth (5th) Business Day immediately following
the date on which the Holder selected such investment bank (the “Dispute Submission Deadline”) (the documents
referred to in the immediately preceding clauses (A) and (B) are collectively referred to herein as the “Required Dispute
Documentation”) (it being understood and agreed that if either the Holder or the Company fails to so deliver all of the
Required Dispute Documentation by the Dispute Submission Deadline, then the party who fails to so submit all of the Required Dispute
Documentation shall no longer be entitled to (and hereby waives its right to) deliver or submit any written documentation or other
support to such investment bank with respect to such dispute and such investment bank shall resolve such dispute based solely on
the Required Dispute Documentation that was delivered to such investment bank prior to the Dispute Submission Deadline). Unless
otherwise agreed to in writing by both the Company and the Holder or otherwise requested by such investment bank, neither the Company
nor the Holder shall be entitled to deliver or submit any written documentation or other support to such investment bank in connection
with such dispute (other than the Required Dispute Documentation).

 

(b)       The
Company and the Holder shall cause such investment bank to determine the resolution of such dispute and notify the Company and
the Holder of such resolution no later than ten (10) Business Days immediately following the Dispute Submission Deadline. The fees
and expenses of such investment bank shall be borne solely by the Company, and such investment bank’s resolution of such
dispute shall be final and binding upon all parties absent manifest error.

 

(c)       The
Company expressly acknowledges and agrees that (i) this Section 11 constitutes an agreement to arbitrate between the Company and
the Holder (and constitutes an arbitration agreement) under the rules then in effect under § 7501, et seq. of the New York
Civil Practice Law and Rules (“CPLR”) and that the Holder is authorized to apply for an order to compel arbitration
pursuant to CPLR § 7503(a) in order to compel compliance with this Section 11, (ii) a dispute relating to the Exercise Price
includes, without limitation, disputes as to (A) whether an issuance or sale or deemed issuance or sale of Common Stock occurred
under Section 2(a), (B) the consideration per share at which an issuance or deemed issuance of Common Stock occurred, (C) whether
any issuance or sale or deemed issuance or sale of Common Stock was an issuance or sale or deemed issuance or sale of Excluded
Securities, (D) whether an agreement, instrument, security or the like constitutes and Option or Convertible Security and (E) whether
a Dilutive Issuance occurred, (iii) the terms of this Warrant and each other applicable Transaction Document shall serve as the
basis for the selected investment bank’s resolution of the applicable dispute, such investment bank shall be entitled (and
is hereby expressly authorized) to make all findings, determinations and the like that such investment bank determines are required
to be made by such investment bank in connection with its resolution of such dispute (including, without limitation, determining
(A) whether an issuance or sale or deemed issuance or sale of Common Stock occurred under Section 2(a), (B) the consideration per
share at which an issuance or deemed issuance of Common Stock occurred, (C) whether any issuance or sale or deemed issuance or
sale of Common Stock was an issuance or sale or deemed issuance or sale of Excluded Securities, (D) whether an agreement, instrument,
security or the like constitutes and Option or Convertible Security and (E) whether a Dilutive Issuance occurred) and in resolving
such dispute such investment bank shall apply such findings, determinations and the like to the terms of this Warrant and any other
applicable Transaction Documents, (iv) the Holder (and only the Holder), in its sole discretion, shall have the right to submit
any dispute described in this Section 11 to any state or federal court sitting in The City of New York, Borough of Manhattan in
lieu of utilizing the procedures set forth in this Section 11 and (v) nothing in this Section 11 shall limit the Holder from obtaining
any injunctive relief or other equitable remedies (including, without limitation, with respect to any matters described in this
Section 11).

 

    	 	- 18 -	 

     

    

12.  REMEDIES,
OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in addition
to all other remedies available under this Warrant and any other Transaction Documents, at law or in equity (including a decree
of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual
damages for any failure by the Company to comply with the terms of this Warrant. The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate.
The Company therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled,
in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic
loss and without any bond or other security being required.

 

13.  TRANSFER.This
Warrant and the Warrant Shares may be offered for sale, sold, transferred, pledged or assigned without the consent of the Company.

 

14.  SEVERABILITY;
CONSTRUCTION; HEADINGS.If any provision of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable
by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed
amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such
provision shall not affect the validity of the remaining provisions of this Warrant so long as this Warrant as so modified continues
to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited
nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations
or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the
parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s)
with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).
This Warrant shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against any Person
as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or affect the
interpretation of, this Warrant.

 

    	 	- 19 -	 

     

    

15.  DISCLOSURE.
Upon receipt or delivery by the Company of any notice in accordance with the terms of this Warrant, unless the Company has in good
faith determined that the matters relating to such notice do not constitute material, nonpublic information relating to the Company
or its subsidiaries, the Company shall contemporaneously with any such receipt or delivery publicly disclose such material, nonpublic
information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains material,
nonpublic information relating to the Company or its subsidiaries, the Company so shall indicate to such Holder contemporaneously
with delivery of such notice, and in the absence of any such indication, the Holder shall be allowed to presume that all matters
relating to such notice do not constitute material, nonpublic information relating to the Company or its subsidiaries.

 

16.             
PAYMENT OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Warrant is placed in the hands of an attorney for
collection or enforcement or is collected or enforced through any legal proceeding or the holder otherwise takes action to collect
amounts due under this Warrant or to enforce the provisions of this Warrant or (b) there occurs any bankruptcy, reorganization,
receivership of the company or other proceedings affecting company creditors’ rights and involving a claim under this Warrant,
then the Company shall pay the costs incurred by the Holder for such collection, enforcement or action or in connection with such
bankruptcy, reorganization, receivership or other proceeding, including, without limitation, attorneys’ fees and disbursements.

 

17.             
CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:

 

(a)   
 “Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls,
is controlled by, or is under common control with, such Person, it being understood for purposes of this definition that “control”
of a Person means the power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the
election of directors of such Person or direct or cause the direction of the management and policies of such Person whether by
contract or otherwise.

 

(b)  
“Adjustment Right” means any right granted with respect to any securities issued in connection with,
or with respect to, any issuance or sale (or deemed issuance or sale in accordance with Section 2) of shares of Common Stock
(other than rights of the type described in Section 3 and 4 hereof) that could result in a decrease in the net consideration
received by the Company in connection with, or with respect to, such securities (including, without limitation, any cash settlement
rights, cash adjustment or other similar rights).

 

    	 	- 20 -	 

     

    

(c)   
 “Approved Stock Plan” means any contract, arrangement, stock or option plan whereby the Company may
issue securities to its employees, officers, directors or consultants, duly adopted for such purpose, by a majority of the non-employee
members of the Company’s board of directors or a majority of the members of a committee of non-employee directors established
for such purpose and which is consistent with the Company’s prior business practices for services provided to the Company
in their capacity as such.

 

(d)  
 “Attribution Parties” means, collectively, the following Persons and entities: (i) any investment vehicle,
including, any funds, feeder funds or managed accounts, currently, or from time to time after the Subscription Date, directly or
indirectly managed or advised by the Holder’s investment manager or any of its Affiliates or principals, (ii) any direct
or indirect Affiliates of the Holder or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a
Group together with the Holder or any of the foregoing and (iv) any other Persons whose beneficial ownership of the Company’s
Common Stock would or could be aggregated with the Holder’s and the other Attribution Parties for purposes of Section 13(d)
of the 1934 Act. For clarity, the purpose of the foregoing is to subject collectively the Holder and all other Attribution Parties
to the Maximum Percentage.

 

(e)   
 “Bid Price” means, for any security as of the particular time of determination, the bid price for such
security on the Principal Market as reported by Bloomberg as of such time of determination, or, if the Principal Market is not
the principal securities exchange or trading market for such security, the bid price of such security on the principal securities
exchange or trading market where such security is listed or traded as reported by Bloomberg as of such time of determination, or
if the foregoing does not apply, the bid price of such security in the over-the-counter market on the electronic bulletin board
for such security as reported by Bloomberg as of such time of determination, or, if no bid price is reported for such security
by Bloomberg as of such time of determination, the average of the bid prices of any market makers for such security as reported
in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC) as of such time of determination. If the
Bid Price cannot be calculated for a security as of the particular time of determination on any of the foregoing bases, the Bid
Price of such security as of such time of determination shall be the fair market value as mutually determined by the Company and
the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall
be resolved in accordance with the procedures in Section 11. All such determinations shall be appropriately adjusted for any
stock dividend, stock split, stock combination or other similar transaction during such period.

 

(f)   
“Black Scholes Value” means the value of the unexercised portion of this Warrant remaining on the date
of the Holder’s request pursuant to Section 4(c), which value is calculated using the Black Scholes Option Pricing Model
obtained from the “OV” function on Bloomberg utilizing (i) an underlying price per share equal to the greater of (1)
the highest Closing Sale Price of the Common Stock during the period beginning on the Trading Day immediately preceding the announcement
of the applicable Change of Control (or the consummation of the applicable Change of Control, if earlier) and ending on the Trading
Day of the Holder’s request pursuant to Section 4(c) and (2) the sum of the price per share being offered in cash in the
applicable Change of Control (if any) plus the value of the non-cash consideration being offered in the applicable Change of Control
(if any), (ii) a strike price equal to the Exercise Price in effect on the date of the Holder’s request pursuant to Section 4(c),
(iii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the greater of (1) the remaining
term of this Warrant as of the date of the Holder’s request pursuant to Section 4(c) and (2) the remaining term of this
Warrant as of the date of consummation of the applicable Change of Control or as of the date of the Holder’s request pursuant
to Section 4(c) if such request is prior to the date of the consummation of the applicable Change of Control, (iv) a zero
cost of borrow and (v) an expected volatility equal to the greater of 100% and the 30 day volatility obtained from the “HVT”
function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately following the earliest
to occur of (A) the public disclosure of the applicable Change of Control, (B) the consummation of the applicable Change of Control
and (C) the date on which the Holder first became aware of the applicable Change of Control.

 

    	 	- 21 -	 

     

    

(g)  
 “Bloomberg” means Bloomberg Financial Markets.

 

(h)  
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The
City of New York are authorized or required by law to remain closed.

 

(i)    
“Change of Control” means any Fundamental Transaction other than (i) any reorganization, recapitalization
or reclassification of the Common Stock in which holders of the Company’s voting power immediately prior to such reorganization,
recapitalization or reclassification continue after such reorganization, recapitalization or reclassification to hold publicly
traded securities and, directly or indirectly, are, in all material respect, the holders of the voting power of the surviving entity
(or entities with the authority or voting power to elect the members of the board of directors (or their equivalent if other than
a corporation) of such entity or entities) after such reorganization, recapitalization or reclassification, (ii) pursuant to a
migratory merger effected solely for the purpose of changing the jurisdiction of incorporation of the Company or (iii) a merger
in connection with a bona fide acquisition by the Company of any Person in which (x) the gross consideration paid, directly or
indirectly, by the Company in such acquisition is not greater than 20% of the Company’s market capitalization as calculated
on the date of the consummation of such merger and (y) such merger does not contemplate a change to the identity of a majority
of the board of directors of the Company. Notwithstanding anything herein to the contrary, any transaction or series of transaction
that, directly or indirectly, results in the Company or the Successor Entity not having Common Stock or common stock, as applicable,
registered under the 1934 Act and listed on an Eligible Market shall be deemed a Change of Control.

 

(j)    
“Closing Bid Price” and “Closing Sale Price” means, for any security as of any date,
the last closing bid price and last closing trade price, respectively, for such security on the Principal Market, as reported by
Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing bid price
or the closing trade price, as the case may be, then the last bid price or the last trade price, respectively, of such security
prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange
or trading market for such security, the last closing bid price or last trade price, respectively, of such security on the principal
securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do
not apply, the last closing bid price or last trade price, respectively, of such security in the over-the-counter market on the
electronic bulletin board for such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively,
is reported for such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers
for such security as reported in the OTC Link or “pink sheets” by OTC Markets Group Inc. (formerly Pink OTC Markets
Inc.). If the Closing Bid Price or the Closing Sale Price cannot be calculated for a security on a particular date on any of the
foregoing bases, the Closing Bid Price or the Closing Sale Price, as the case may be, of such security on such date shall be the
fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon
the fair market value of such security, then such dispute shall be resolved pursuant to Section 11. All such determinations to
be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or other similar transaction
during the applicable calculation period.

 

    	 	- 22 -	 

     

    

(k)  
“Common Stock” means (i) the Company’s Common Stock, par value $0.01 per share, and (ii) any
capital stock into which such Common Stock shall have been changed or any capital stock resulting from a reclassification of such
Common Stock.

 

(l)    
“Convertible Securities” means any stock or securities (other than Options) directly or indirectly convertible
into or exercisable or exchangeable for shares of Common Stock.

 

(m) “Eligible Market” means
The NASDAQ Capital Market, the NYSE MKT LLC, The NASDAQ Global Select Market, The NASDAQ Global Market or The New York Stock Exchange,
Inc.

 

(n)  
 “Excluded Securities” means (i) securities issued pursuant to an Approved Stock Plan (as defined above),
provided that the exercise price of any such security is not lowered, none of such securities are amended to increase the number
of shares issuable thereunder and none of the terms or conditions of any such security are otherwise materially changed in any
manner that adversely affects the Holder; (ii) shares of Common Stock issued upon the conversion or exercise of Convertible Securities
(other than securities issued pursuant to an Approved Stock Plan that are covered by clause (i) above) issued prior to the Subscription
Date, provided that the conversion price of any such Convertible Securities (other than standard options to purchase Common Stock
issued pursuant to an Approved Stock Plan that are covered by clause (i) above) is not lowered, none of such Convertible Securities
(other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i)
above) are amended to increase the number of shares issuable thereunder and none of the terms or conditions of any such Convertible
Securities (other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by
clause (i) above) are otherwise materially changed in any manner that adversely affects the Holder; (iii) the shares of Common
Stock issuable upon exercise of the Warrants; provided, that the terms of the Warrants are not amended, modified or changed on
or after the Subscription Date (other than antidilution adjustments pursuant to the terms thereof in effect as of the Subscription
Date) and (iv) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested
directors of the Company, provided that any such issuance shall only be to a Person (or to the equity holders of a Person) which
is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business
of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include
a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary
business is investing in securities.

 

    	 	- 23 -	 

     

    

(o)  
“Expiration Date” means the date eighty four (84) months after the Initial Exercisability Date or, if
such date falls on a day other than a Business Day or on which trading does not take place on the Principal Market (a “Holiday”),
the next day that is not a Holiday.

 

(p)  
“Fundamental Transaction” means (A) that the Company shall, directly or indirectly, including through
subsidiaries, Affiliates or otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not
the Company is the surviving corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of
all or substantially all of the properties or assets of the Company or any of its “significant subsidiaries” (as defined
in Rule 1-02 of Regulation S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make,
or allow the Company to be subject to or have its shares of Common Stock be subject to or party to one or more Subject Entities
making, a purchase, tender or exchange offer that is accepted by the holders of at least either (x) 50% of the outstanding shares
of Common Stock, (y) 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all Subject
Entities making or party to, or Affiliated with any Subject Entities making or party to, such purchase, tender or exchange offer
were not outstanding; or (z) such number of shares of Common Stock such that all Subject Entities making or party to, or Affiliated
with any Subject Entity making or party to, such purchase, tender or exchange offer, become collectively the beneficial owners
(as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (iv) consummate a stock
purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or
scheme of arrangement) with one or more Subject Entities whereby all such Subject Entities, individually or in the aggregate, acquire,
either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated
as if any shares of Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject Entity making
or party to, such stock purchase agreement or other business combination were not outstanding; or (z) such number of shares of
Common Stock such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934
Act) of at least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its shares of Common
Stock, (B) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more
related transactions, allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the “beneficial
owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through acquisition, purchase, assignment,
conveyance, tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination,
reorganization, recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise
in any manner whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding
shares of Common Stock, (y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding shares of
Common Stock not held by all such Subject Entities as of the Subscription Date calculated as if any shares of Common Stock held
by all such Subject Entities were not outstanding, or (z) a percentage of the aggregate ordinary voting power represented by issued
and outstanding shares of Common Stock or other equity securities of the Company sufficient to allow such Subject Entities to effect
a statutory short form merger or other transaction requiring other stockholders of the Company to surrender their Common Stock
without approval of the stockholders of the Company or (C) directly or indirectly, including through subsidiaries, Affiliates or
otherwise, in one or more related transactions, the issuance of or the entering into any other instrument or transaction structured
in a manner to circumvent, or that circumvents, the intent of this definition in which case this definition shall be construed
and implemented in a manner otherwise than in strict conformity with the terms of this definition to the extent necessary to correct
this definition or any portion of this definition which may be defective or inconsistent with the intended treatment of such instrument
or transaction.

 

    	 	- 24 -	 

     

    

(q)   “Group”
means a “group” as that term is used in Section 13(d) of the 1934 Act and as defined in Rule 13d-5 thereunder.

 

(r)     “Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.

 

(s)   
“Parent Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person,
including such entity whose common stock or equivalent equity security is quoted or listed on an Eligible Market (or, if so elected
by the Holder, any other market, exchange or quotation system), or, if there is more than one such Person or such entity, the Person
or such entity designated by the Holder or in the absence of such designation, such Person or entity with the largest public market
capitalization as of the date of consummation of the Fundamental Transaction.

 

(t)     “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity and a government or any department or agency thereof.

 

(u)   “Principal
Market” means The NASDAQ Stock Market.

 

(v)   “Required
Holders” means the holders of the Warrants representing at least a majority of the shares of Common Stock underlying
the Warrants then outstanding.

 

(w) “Standard Settlement Period” means the standard
settlement period, expressed in a number of Trading Days, for the Company’s primary trading market or quotation system with
respect to the Common Stock that is in effect on the date of receipt of an applicable Exercise Notice.

 

(x)   “Subject
Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.

 

(y)  
“Successor Entity” means one or more Person or Persons (or, if so elected by the Holder, the Company
or Parent Entity) formed by, resulting from or surviving any Fundamental Transaction or one or more Person or Persons (or, if so
elected by the Holder, the Company or the Parent Entity) with which such Fundamental Transaction shall have been entered into.

 

    	 	- 25 -	 

     

    

(z)    “Trading
Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the
principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common
Stock is then traded.

 

(aa)“Transaction Documents” means any agreement
entered into by and between the Company and the Holder, as applicable with regard to the transaction contemplated in the Underwriter
Agreement.

 

[Signature Page Follows]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	- 26 -	 

     

    

IN WITNESS WHEREOF, the Company has caused
this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.

 

 

Neuralstem, Inc.

 

 

By:___________________________

Name:       

Title:       

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     

     

    

EXHIBIT A

 

EXERCISE NOTICE

 

TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

WARRANT TO PURCHASE COMMON STOCK

 

Neuralstem, inc.

 

The undersigned
holder hereby exercises the right to purchase _________________ of the shares of Common Stock (“Warrant Shares”)
of Neuralstem, Inc., a company organized under the laws of Delaware (the “Company”),
evidenced by the attached Warrant to Purchase Common Stock (the “Warrant”). Capitalized terms used herein and
not otherwise defined shall have the respective meanings set forth in the Warrant.

 

1. Form of Exercise Price. The Holder intends
that payment of the Exercise Price shall be made as:

 

____________a “Cash
Exercise” with respect to _________________ Warrant Shares; and/or

 

____________a “Cashless
Exercise” with respect to _______________ Warrant Shares.

 

2. Payment of Exercise Price. In the event that
the holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the holder
shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in accordance with the terms of the Warrant.

 

3. Delivery of Warrant Shares. The Company shall
deliver to the holder __________ Warrant Shares in accordance with the terms of the Warrant.

 

 

 

Date: _______________ __, ______

 

_____________________________

Name of Registered Holder

 

 

By: __________________________

Name:

Title:

 

     

     

    

ACKNOWLEDGMENT

 

 

The Company hereby acknowledges this Exercise
Notice and hereby directs [TRANSFER AGENT] to issue the above indicated number of shares of Common Stock on or prior to the applicable
Share Delivery Date.

 

NEURALSTEM, INC.

 

 

 

By:________________________________

Name:

Title:

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