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STOCK PURCHASE
AGREEMENT

     This
Agreement (the “Agreement”) is made as of November 7, 2001 by and
between SCIENTIFIC LEARNING CORPORATION, a Delaware corporation (the
“Company”), and Warburg, Pincus Ventures, L.P., a Delaware limited
partnership (the “Investor”). In consideration of the mutual covenants
herein and for other good and valuable consideration, the adequacy and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows: 

     1. AUTHORIZATION
OF SALE OF THE SHARES. Subject to the terms and conditions of this agreement, the
Company has authorized the issuance and sale of Four Million (4,000,000) shares (the
“Shares”) of the Company’s common stock, par value $0.001 per share (the
“Common Stock”).  

     2. AGREEMENT
TO SELL AND PURCHASE THE SHARES. At the Closing (as defined in Section 3), the
Company shall issue and sell the Shares to the Investor and the Investor shall buy the
Shares from the Company for an aggregate purchase price of $5,000,000.00, representing a
purchase price of $1.25 per Share (the “Purchase Price”).  

     3. THE
CLOSING. 

	 	     3.1.
Closing Date. The closing of the issuance, purchase and sale and delivery of the
Shares (the “Closing”) shall take place on November 20, 2001, or at such date
and time as soon as possible thereafter on which all of the conditions to closing set
forth in this Agreement have been satisfied. If the Closing does not occur on or before
January 15, 2002, this Agreement shall automatically terminate and be of no further force
and effect; provided, however, that such termination shall not release any party from
liability for any breach of this Agreement by such party that occurs prior to such
termination. 

	 	     3.2.
Delivery. At the Closing, against payment to the Company of the Purchase Price by
wire transfer to the Company of immediately available funds, the Company shall instruct
its transfer agent to deliver promptly to the Investor a certificate representing the
Shares, registered in the name of Warburg, Pincus Ventures, L.P.,. A facsimile or other
copy of such certificate shall be made available to Investor at the Closing. 

	 	     3.3
Legends.To the extent applicable, each certificate evidencing any of the Shares
shall be endorsed with the legends set forth below:

	 	     (a)
“THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED
UNLESS AND UNTIL REGISTERED UNDER SUCH ACT, OR UNLESS THE COMPANY HAS RECEIVED AN OPINION
OF COUNSEL OR OTHER EVIDENCE, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH
REGISTRATION IS NOT REQUIRED.”

	 	     (b)
Any legend imposed or required by applicable state securities laws.

	

     4. REPRESENTATIONS,
WARRANTIES AND COVENANTS OF THE COMPANY. 

	 	     The
Company hereby represents and warrants to the Investor and agrees as follows: 

	 	     4.1.
Corporate Power. The Company is a corporation duly organized, validly existing,
and in good standing under the laws of its jurisdiction of incorporation and is duly
qualified to do business as a foreign corporation and is in good standing in each
jurisdiction in which the failure to so qualify would have a material adverse effect on
the condition (financial or otherwise), properties, business, prospects or results of
operations of the Company taken as a whole (a “Material Adverse Effect”). The
Company has all requisite corporate power and authority to own and operate its properties
and assets and to carry on its business as now conducted and as presently proposed to be
conducted, to execute and deliver this Agreement, and to issue and deliver the Shares and
to carry out and perform its obligations hereunder. 

	 	     4.2.
Authorization. All corporate action on the part of the Company, its directors and
its stockholders necessary for the authorization, execution and delivery of this
Agreement and the performance of the Company’s obligations hereunder, including the
issuance and delivery of the Shares, has been duly and properly taken or will be duly and
properly taken prior to the Closing. This Agreement, when executed and delivered by the
Company, shall constitute a valid and binding obligation of the Company enforceable in
accordance with its terms, subject only to laws of general application relating to
bankruptcy, insolvency and the relief of debtors and as limited by general principles of
equity that restrict the availability of equitable remedies. The Shares, when issued in
accordance with the terms of this Agreement, will be duly authorized, validly issued,
fully paid and nonassessable and free of any liens or encumbrances or restrictions on
transfer other than restrictions under applicable state and federal securities laws and
liens or encumbrances, if any, created by the Investor. The Board of Directors of the
Company has taken, or will have taken prior to Closing, all action necessary to render
inapplicable, as they relate to the Investor or any of its affiliates, the provisions of
Section 203 of the General Corporation Law of Delaware. 

	 	     4.3.
Governmental Consents. All consents, approvals, orders or authorizations of, or
registrations, qualifications, designations, declarations or filings with, any
governmental authority required on the part of the Company in connection with the valid
execution and delivery of this Agreement and the offer, sale and issuance of the Shares
have been obtained and will be effective at the Closing, except for any notices required
or permitted to be filed thereafter with certain state and federal securities
commissions, which notices, if any, shall be filed on a timely basis. 

	 	     4.4.
Offering. Assuming the accuracy of the representations and warranties of the
Investor contained in Section 5 of this Agreement, the offer, sale and issuance of the
Shares is exempt from the registration and prospectus delivery requirements of the
Securities Act of 1933, as amended (the “1933 Act”), and has been registered or
qualified (or is exempt from registration and qualification) under the registration,
permit, or qualification requirements of all applicable state securities laws. 

	

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	 	     4.5.
Capitalization. The authorized capital of the Company consists of 40,000,000
shares of Common Stock and 1,000,000 shares of Preferred Stock, par value $0.001. As of
October 31, 2001, 11,474,659 shares of the Common Stock and no shares of the Preferred
Stock were issued and outstanding. All of the issued and outstanding shares of capital
stock of the Company have been duly authorized and validly issued, are fully paid and
non-assessable, were issued in accordance with the registration or qualification
provisions of the 1933 Act and any relevant state securities laws or pursuant to valid
exemptions therefrom, were not issued in violation of or subject to any preemptive rights
or other rights to subscribe for or purchase securities. Except as otherwise disclosed in
or contemplated by the Company’s (i) Annual Report on Form 10-K for the year
ended December 31, 2000, (ii) any Current Reports on Form 8-K filed with the Securities
and Exchange Commission (the “Commission”) since the filing of the Company’s
Annual Report on Form 10-K on March 30, 2001, (iii) Quarterly Reports on Form 10-Q for
the Quarters ended March 31 and June 30, 2001, (v) Proxy Statement for its Annual Meeting
of Stockholders on May 31, 2001, (vi) draft Quarterly Report on Form 10-Q for the Quarter
ended September 30, 2001, a copy of which was delivered by the Company to the Investor
prior to the date of this Agreement and (vii) any disclosure schedule delivered by the
Company to the Investor simultaneously with the execution of this Agreement
(collectively, the “Disclosure Documents”) there have been no issuances of
Common Stock since October 31, 2001, other than pursuant to the exercise of outstanding
stock options or the Company’s 1999 Employee Stock Purchase Plan. Except (i) for the
options issued under the Company’s 1999 Equity Incentive Plan, 1999 Non-Officer
Equity Incentive Plan and 1999 Non-Employee Directors Stock Option Plan , (ii)for the
issuance of shares of Common Stock pursuant to the Company’s 1999 Employee Stock
Purchase Plan(iii) for warrants to purchase 1,498,888 shares of the Company’s Common
Stock and (iv) as set forth in the Disclosure Documents, the Company does not have
outstanding any options to purchase, or any preemptive rights or other rights to
subscribe for or to purchase, any securities or obligations convertible into, or any
contracts or commitments to issue or sell, shares of its capital stock, any shares of
capital stock of any subsidiary or any such options, rights, convertible securities or
obligations. The description of the Company’s stock, stock bonus and other stock
plans or arrangements and the options or other rights granted and exercised thereunder
that is contained in the Disclosure Documents accurately and fairly presents the
information required to be shown with respect to such plans, arrangements, options and
rights. 

	 	     4.6.
Compliance With Other Instruments; Consents. The Company is not in violation or
default of any provision of its Certificate of Incorporation or Bylaws, or in violation
in any material respect of (i) any provision of any mortgage, indenture, agreement,
instrument or contract to which it is a party or by which it is bound, or (ii) to the
best of its knowledge, any federal or state judgment, order, writ, decree, statute, rule,
regulation or restriction applicable to the Company. The execution, delivery and
performance by the Company of this Agreement, the offer, issuance and sale of the Shares,
and the consummation of the transactions contemplated by this Agreement, will not result
in any such violation or the suspension, revocation, impairment, forfeiture or nonrenewal
of any material permit, license, authorization or approval applicable to the Company, its
business or operations or any of its assets or properties or be in material conflict with
or constitute, with or without the passage of time or giving of notice, either a material
default under any such provision or an event that results in the creation of any material
lien, charge or encumbrance upon any assets of the Company. The execution, delivery and
performance by the Company of this Agreement, the issuance and sale of the Shares, and
the consummation of the transactions contemplated by this Agreement, do not require the
Company to obtain any consent or approval of, or make any filing with or give any notice
to, any person, entity, governmental or judicial authority, except such as have been duly
obtained or made or such as will be duly obtained or made prior to the Closing. 

	

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	 	     4.7.
Disclosure Documents. The information contained or incorporated by reference in
the Disclosure Documents was true and correct in all material respects as of the
respective dates of the filing thereof with the Commission; and, as of such respective
dates, the Disclosure Documents did not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made, not
misleading, except to the extent updated or superseded by any report subsequently filed
by the Company with the Commission. 

	 	     4.8.
Absence of Certain Developments. Since the filing on August 14, 2001 of the Company’s
Quarterly Report on Form 10-Q for the Quarter ended June 30, 2001, and except as
described in or specifically contemplated by the Disclosure Documents, there has been no:
(i) declaration, setting aside or payment of any dividend or other distribution with
respect to the capital stock of the Company; (ii) issuance of capital stock, options,
warrants, securities convertible or exchangeable for capital stock or rights to acquire
capital stock, other than as approved by the Board of Directors of the Company (including
the affirmative vote of a representative of Investor) or as approved pursuant to
authority delegated by the Board of Directors (which delegation was approved by the Board
of Directors of the Company, including the affirmative vote of a representative of
Investor); (iii) material litigation or loss, destruction or damage to any property of
the Company, whether or not insured; (iv) acceleration or prepayment of any indebtedness
for borrowed money or the refunding of any such indebtedness; or (v) acquisition or
disposition of any material assets (or any contract or arrangement therefor), or any
other material transaction by the Company otherwise than for fair value in the ordinary
course of business. 

	 	     4.9.
Broker’s Fee.There are no other brokers or finders entitled to compensation in
connection with the offer, issuance and sale of the Shares to the Investor on the basis
of any actions and agreements by the Company.

	 	     4.10.
Compliance. The Company has not been advised, nor does it have any reason to
believe, that it is not conducting business in compliance with all applicable laws, rules
and regulations of the jurisdictions in which it conducts its business; except where
failure to be so in compliance would not have a Material Adverse Effect. 

	 	     4.11.
Nasdaq National Market. The Company’s Common Stock is registered pursuant to
Section 12(g) of the Securities Exchange Act of 1934 (the “1934 Act”) and
is listed on the Nasdaq National Market, and the Company has taken no action designed to,
or likely to have the effect of, terminating the registration of the Common Stock under
the 1934 Act or de-listing the Common Stock from the Nasdaq National Market, nor has the
Company received any notification that the Commission or the National Association of
Securities Dealers, Inc. is contemplating terminating such registration or listing. 

	

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4.12.
No Manipulation of Stock. The Company has not taken and will not take, in
violation of applicable law, any action designed to or that might reasonably be expected
to cause or result in stabilization or manipulation of the price of the Common Stock to
facilitate the transactions contemplated hereby. 

	 	
4.13.
No Integration. Neither the Company nor any of its affiliates nor any person
acting on the Company’s behalf has, directly or indirectly, at any time within the
past six months made, nor will any such party make within six months of the second
Closing Date, any offer or sale of any security or solicitation of any offer to buy any
security under circumstances, that in the opinion of the Company’s counsel,
concurred by the Investor’s counsel, would eliminate the availability of the
exemption from registration under Regulation D under the 1933 Act in connection with the
offer and sale of the Securities as contemplated hereby. 

	

     5. REPRESENTATIONS,
WARRANTIES AND COVENANTS OF THE INVESTOR. 

     The
Investor hereby represents and warrants to the Company and agrees as follows: 

	 	     5.1.
Purchase for Own Account. The Investor is acquiring the Shares solely for its own
account for investment and not for sale or with a view to distribution of the Shares or
any part thereof, has no present intention of selling, granting any participation in, or
otherwise distributing the same, and does not presently have reason to anticipate a
change in such intention. 

	 	     5.2.
Information and Sophistication. The Investor has received all the information it
has requested from the Company that it considers necessary or appropriate for deciding
whether to acquire the Shares. The Investor has had an opportunity to ask questions and
receive answers from the Company regarding the terms and conditions of the Shares and to
obtain any additional information necessary to verify the accuracy of the information
given to the Investor. The Investor further represents that it has such knowledge and
experience in financial and business matters that it is capable of evaluating the merits
and risk of the investment in the Shares. The Shares were not offered or sold to Investor
by any form of general solicitation or advertising. Investor has, in connection with its
decision to purchase the Shares, relied solely upon the Disclosure Documents and the
representations and warranties of the Company contained herein. The office of the
Investor in which its investment decision was made is located at the address of the
Investor set forth in Section 7.5 hereof. 

	 	     5.3.
Ability to Bear Economic Risk. The Investor acknowledges that investment in the
Shares involves a high degree of risk. The Investor is able, without materially impairing
its financial condition, to hold the Shares for an indefinite period of time and to
suffer a complete loss of its investment.

	 	     5.4.
Limitation on Disposition. The Investor will not make any disposition of all or
any portion of the Shares unless and until:

	 	     (a)
There is then in effect a registration statement under the 1933 Act covering such
proposed disposition and such disposition is made in accordance with such registration
statement; or

	

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	 	     (b)
The Investor has notified the Company of the proposed disposition and has furnished the
Company with a statement of the circumstances surrounding the proposed disposition, and
if reasonably requested by the Company, the Investor has furnished the Company with an
opinion of counsel, reasonably satisfactory to the Company, that such disposition will
not require registration under the 1933 Act. 

	

The Investor has not
engaged and will not engage in any short sales of the Company’s Common
Stock prior to the effectiveness of any registration statement covering a
proposed disposition of the Shares, except to the extent that any short sale is
fully covered by shares of Common Stock of the Company other than the Shares. 

	 	     5.5.
Experience. The Investor is an "accredited investor" as such term is defined in
Rule 501 of the 1933 Act.

	 	     5.6.
Broker's Fee. There are no other brokers or finders entitled to compensation in
connection with the offer, issuance and sale of the Shares to the Investor on the basis
of any actions and agreements by the Investor.

	 	     5.7
Requisite Power and Authority.Investor has all necessary power and authority under
all applicable provisions of law to execute and deliver this Agreement and to carry out
its provisions. All action on Investor’s part required for the lawful execution and
delivery of this Agreement have been or will be effectively taken prior to Closing. This
Agreement, when executed and delivered by the Investor, shall constitute a valid and
binding obligation of the Investor enforceable in accordance with its terms, subject only
to laws of general application relating to bankruptcy, insolvency and the relief of
debtors and as limited by general principles of equity that restrict the availability of
equitable remedies. 

	

     6. Closing
Conditions. 

	 	     6.1.
Company Conditions. The Company's obligation to complete the purchase and sale of
the Shares and deliver one or more stock certificates representing the Shares to the
Investor at the Closing shall be subject to the following conditions:

	 	     (a)
receipt by the Company of same-day funds in the full amount of the Purchase Price;

	 	     (b)
the accuracy on and as of the Closing of the representations and warranties made by the
Investor and the fulfillment of those undertakings of the Investor to be fulfilled prior
to the Closing;

	 	     (c)
receipt by the Company of written confirmation by representatives of the Nasdaq National
Market that the transactions contemplated by this Agreement do not require the Company to
obtain shareholder approval or receipt by the Company of any requisite approval of its
shareholders; and 

	

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	 	     (d)
execution and delivery of an amendment to the Amended and Restated Registration Rights
Agreement dated as of December 30, 1998 (the “Registration Rights Agreement”),
to include the Shares as “Registrable Shares”, in addition to the shares of
Common Stock already included in such definition in the Registration Rights Agreement. 

	 	     6.2.
Investor Conditions. The Investor's obligation to accept delivery of such stock
certificate(s) and to pay for the Shares evidenced thereby at the Closing shall be
subject to the following conditions:

	 	     (a)
the accuracy on and as of the Closing of the representations and warranties made by the
Company herein and the fulfillment of those undertakings of the Company to be fulfilled
prior to the Closing;

	 	     (b)
execution and delivery of an amendment to the Amended and Restated Registration Rights
Agreement dated as of December 30, 1998 (the “Registration Rights Agreement”),
to include the Shares as “Registrable Shares”, in addition to the shares of
Common Stock already included in such definition in the Registration Rights Agreement; 

	 	     (c)
evidence reasonably satisfactory to the Investor of receipt by the Company of written
confirmation by representatives of the Nasdaq National Market that the transactions
contemplated by this Agreement do not require the Company to obtain shareholder approval
or of receipt by the Company of any requisite approval by its shareholders; 

	 	     (d)
receipt by the Investor of a legal opinion of Cooley Godward, LLP, counsel to the
Company, reasonably satisfactory to the Investor and counsel to the Investor, relating to
the due organization and good standing of the Company, the due authorization, execution
and delivery of the Agreements, and the status of the Shares to be delivered at such
Closing as duly authorized, validly issued, fully paid and non-assessable shares of
Common Stock of the Company, free (to such counsel’s knowledge) of any pre-emptive
rights; and 

	 	     (e)
receipt by the Investor from the Company of a certificate executed by the Chairman of the
Board or President and the chief financial or accounting officer of the Company, dated
the Closing Date, in form and substance reasonably satisfactory to the Investor, to the
effect that the representations and warranties of the Company set forth in Section 4 of
this Agreement are true and correct as of the date of this Agreement and as of the
Closing Date, and the Company has complied with all the agreements and satisfied all the
conditions herein on its part to be performed or satisfied on or prior to the Closing
Date. 

	

     7. MISCELLANEOUS. 

	 	     7.1.
Binding Agreement; Assignment. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and the respective successors and assigns of the parties.
Nothing in this Agreement, express or implied, is intended to confer upon any third party
any rights, remedies, obligations, or liabilities under or by reason of this Agreement
except as expressly otherwise provided in this Agreement. 

	 	     7.2.
Governing Law. This Agreement shall be governed by and construed under the laws of
the State of New York as applied to agreements among New York residents, made and to be
performed entirely within the State of New York, irrespective of any contrary result
otherwise required under the conflict or choice of law rules of New York. 

	

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	 	     7.3.
Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed an original, but both of which together shall constitute one and the same
instrument.

	 	     7.4.
Titles and Subtitles. The titles and subtitles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.

	 	     7.5.
Notices. Any notice required or permitted under this Agreement must be given in
writing and shall be deemed effectively given upon personal delivery or upon deposit with
the United States Post Office, postage prepaid, addressed to the Company at 300 Frank H.
Ogawa Plaza, Suite 500, Oakland, CA 94612-2040, or to the Investor at 466 Lexington
Avenue, New York, New York 10017, or at such other address as a party may designate by
ten days’advance written notice to the other party. 

	 	     7.6.
Modification; Waiver. No modification or waiver of any provision of this Agreement
or consent to departure therefrom shall be effective unless in writing and approved by
the Company and the Investor.

	 	     7.7.
Further Assurances. The parties shall take such further actions, and execute,
deliver and file such documents, as may be reasonably necessary or appropriate to
effectuate the intent of this Agreement.

	 	     7.8.
Construction. The language used in this Agreement shall be deemed to be the
language chosen by the parties to express their mutual intent, and no rule of strict
construction shall be applied against any party. Any references to any federal, state,
local or foreign statute or law shall also refer to all rules and regulations promulgated
thereunder, unless the context otherwise requires. Unless the context otherwise requires:
(a) a term has the meaning assigned to it by this Agreement; (b) forms of the word “include” mean
that the inclusion is not limited to the items listed; (c) “or” is disjunctive
but not exclusive; (d) words in the singular include the plural, and in the plural
include the singular; (e) provisions apply to successive events and transactions; (f)
“hereof”, “hereunder”, “herein” and “hereto” refer
to the entire Agreement and not any section or subsection; and (g) “$” means the
currency of the United States. 

	 	     7.9.
Severability. If any one or more of the provisions contained in this Agreement or
in any other instrument referred to herein, shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, then to the maximum extent permitted by law,
such invalidity, illegality or unenforceability shall not affect any other provision of
this Agreement or any such instrument. Furthermore, in lieu of any such invalid or
unenforceable term or provision, the parties hereto intend that there shall be added as a
part of this Agreement a provision as similar in terms and commercial effect to such
invalid or unenforceable provision as may be possible and be valid and enforceable. 

	 	     7.10.
Entire Agreement. This Agreement constitutes the full and entire understanding and
agreement between the parties with regard to the subjects hereof and no party will be
liable or bound to the other in any manner by any representations, warranties, covenants
and agreements other than those specifically set forth herein. 

	

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	 	     7.11.
Survival of Representations, Warranties and Agreements. Notwithstanding any
investigation made by any party to this Agreement, the respective representations and
warranties given by the parties hereto shall survive the Closing and the consummation of
the transactions contemplated herein for a period of one year. The other covenants and
agreements contained herein shall survive for the period specified therein, or if not
specified, for a period of two years. 

	

[THE NEXT PAGE IS THE
SIGNATURE PAGE] 

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     IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above. 

			SCIENTIFIC LEARNING CORPORATION

By: /s/ Sheryle J. Bolton
——————————————

Sheryle J. Bolton
President and Chief Executive Officer

			WARBURG, PINCUS VENTURES, L.P.

By: Warburg, Pincus & Co., its general partner

By: /s/ Rodman W. Moorhead, III
——————————————

Rodman W. Moorhead, III
Partner

	

[SIGNATURE PAGE TO
STOCK PURCHASE AGREEMENT] 

10Exhibit 10.3

                            PRO-PHARMACEUTICALS, INC.

                            2001 STOCK INCENTIVE PLAN

1.        Purposes of the Plan.

          The purposes of this 2001 Stock Incentive Plan of Pro-Pharmaceuticals,
Inc. (the "Company") are to promote the interests of the Company and its
stockholders by strengthening the Company's ability to attract, motivate, and
retain employees, consultants, advisors and outside directors of exceptional
ability and to provide a means to encourage stock ownership and a proprietary
interest in the Company by them upon whose judgment, initiative, and efforts the
financial success and growth of the business of the Company largely depend.

2.        Definitions.

          (a) "Accelerate," "Accelerated," and "Acceleration," (i) when used
with respect to an Option, mean that as of the relevant time of reference, such
Option shall become fully exercisable with respect to the total number of shares
of Common Stock subject to such Option and may be exercised for all or any
portion of such shares and (ii) when used with respect to shares of Common Stock
granted pursuant to a Restricted Stock Award, mean that as of the relevant time
of reference, such shares shall become free of any reacquisition or repurchase
rights in the Company with respect thereto.

          (b) "Acquisition" means

               (i) a merger or consolidation in which securities possessing more
               than 50% of the total combined voting power of the Company's
               outstanding securities are transferred to a person or persons
               different from the persons who held those securities immediately
               prior to such transaction, or

               (ii) the sale, transfer, or other disposition of all or
               substantially all of the Company's assets to one or more persons
               (other than any wholly owned subsidiary of the Company) in a
               single transaction or series of related transactions.

          (c) "Beneficial Ownership" means beneficial ownership determined
pursuant to Securities and Exchange Commission Rule 13d-3 promulgated under the
Exchange Act.

          (d) "Board" means the Board of Directors of the Company.

                                       1
<PAGE>

          (e) "Committee" means the Compensation Committee of the Board;
provided, that the Board by resolution duly adopted may at any time or from time
to time determine to assume any or all of the functions of the Committee under
the Plan, and during the period of effectiveness of any such resolution,
references herein to the "Committee" shall mean the Board acting in such
capacity. During any period in which there is no Committee or the Committee has
disbanded, the Board shall be deemed to be the Committee and references herein
to the "Committee" shall mean the Board acting in such capacity.

          (f) "Change in Control" means a change in ownership or control of the
Company effected through either of the following transactions:

               (i) any person or related group of persons (other than the
               Company or a person that directly or indirectly controls, is
               controlled by, or is under common control with the Company)
               directly or indirectly acquires Beneficial Ownership of
               securities possessing more than 50% of the total combined voting
               power of the Company's outstanding securities pursuant to a
               tender or exchange offer made directly to the Company's
               stockholders that the Board does not recommend such stockholders
               to accept, or

               (ii) over a period of 36 consecutive months or less, there is a
               change in the composition of the Board such that a majority of
               the Board members (rounded up to the next whole number, if a
               fraction) ceases, by reason of one or more proxy contests for the
               election of Board members, to be composed of individuals who
               either (A) have been Board members continuously since the
               beginning of such period, or (B) have been elected or nominated
               for election as Board members during such period by at least a
               majority of the Board members described in the preceding clause
               (A) who were still in office at the time such election or
               nomination was approved by the Board.

          (g) "Common Stock" means the authorized common stock of the Company.

          (h) "Company" means Pro-Pharmaceuticals, Inc., a Nevada corporation.

          (i) "Eligible Employee" means any person who is, at the time of the
grant of an Option or Restricted Stock Award, an employee (including officers
and employee directors) of, or a consultant, advisor or outside director to, the
Company or any Subsidiary.

          (j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended and in effect from time to time.

          (k) "Fair Market Value" means the value of a share of Common Stock as
of the relevant time of reference, as determined as follows. If the Common Stock
is then publicly traded, Fair Market Value shall be (i) the last sale price of a
share of Common Stock on the

                                       2
<PAGE>

principal national securities exchange on which the Common Stock is traded, if
the Common Stock is then traded on a national securities exchange; or (ii) the
last sale price of the Common Stock reported in the NASDAQ National Market
System, if the Common Stock is not then traded on a national securities
exchange; or (iii) the average of the closing bid and asked prices for the
Common Stock quoted by an established quotation service for over-the-counter
securities, if the Common Stock is not then traded on a national securities
exchange or reported in the NASDAQ National Market System. If the Common Stock
is not then publicly traded, Fair Market Value shall be the fair value of a
share of the Common Stock as determined by the Board or the Committee, taking
into consideration such factors as it deems appropriate, which may include
recent sale and offer prices of Common Stock in arms'-length private
transactions.

          (l) "Hostile Takeover" means a change in ownership of the Company
effected through the following transaction:

               (i) any person or related group of persons (other than the
               Company or a person that directly or indirectly controls, is
               controlled by, or is under common control with the Company)
               directly or indirectly acquires Beneficial Ownership of
               securities possessing more than 50% of the total combined voting
               power of the Company's outstanding securities pursuant to a
               tender or exchange offer made directly to the Company's
               stockholders that the Board does not recommend such stockholders
               to accept, and

               (ii) more than 50% of the securities so acquired in such tender
               or exchange offer are accepted from holders other than the
               officers and directors of the Company who are subject to the
               short-swing profit restrictions of Section 16 of the Exchange
               Act.

          (m) "Incentive Stock Option" means an Option intended to qualify as an
"incentive stock option" under Section 422 of the Internal Revenue Code and
regulations thereunder.

          (n) "Nonqualified Stock Option" means a stock option granted hereunder
that is not intended to be an Incentive Stock Option.

          (o) "Option" means an Incentive Stock Option or a Nonqualified Stock
Option.

          (p) "Participant" means any Eligible Employee selected to receive an
Option or Restricted Stock Award pursuant to Section 5 or any Permitted
Transferee to whom an Option or Restricted Stock has been transferred in
accordance with Section 9(e).

          (q) "Permitted Transferee" means any immediate family member of a
person to whom an Option or Restricted Stock Award has been granted pursuant to
Section 5 or a trust maintained exclusively for the benefit of, or partnership
of all of the interests which are held by, one or more of such immediate family
members.

                                       3
<PAGE>

          (r) "Plan" means this 2001 Stock Incentive Plan as set forth herein
and as amended and/or restated from time to time.

          (s) "Restricted Stock Award" means a right to the grant or purchase,
at a price determined by the Committee, of Common Stock which is
nontransferable, except in accordance with Section 9(e) and subject to
substantial risk of forfeiture until specific conditions of continuing
employment or performance, specified by the Committee, are met.

          (t) "Subsidiary" means any subsidiary corporation (as defined in
Section 424 of the Internal Revenue Code) of the Company.

          (u) "Takeover Price" means, with respect to any Option, the greater of
(i) the Fair Market Value per share of Common Stock on the date such Option is
surrendered to the Company in connection with a Hostile Takeover or (ii) the
highest reported price per share of Common Stock paid by the tender offeror in
effecting such Hostile Takeover.

3.        Shares of Common Stock Subject to the Plan.

          (a) Subject to adjustment in accordance with the provisions of Section
3(c) and Section 8 of the Plan, the aggregate number of shares of Common Stock
that may be issued or transferred pursuant to Options or Restricted Stock Awards
under the Plan shall not exceed 2,000,000 shares, all of which may be awards of
Incentive Stock Options.

          (b) The shares of Common Stock to be delivered under the Plan will be
made available, at the discretion of the Committee, from authorized but unissued
shares of Common Stock and/or from previously issued shares of Common Stock
reacquired by the Company and shall be issued subject to any and all
restrictions on the Company's Common Stock in effect as of the time of the
issuance.

          (c) If shares covered by any Option cease to be issuable for any
reason, and/or shares covered by Restricted Stock Awards are forfeited, such
number of shares will no longer be charged against the limitation provided in
Section 3(a) and may again be made subject to Options or Restricted Stock
Awards.

4.        Administration of the Plan.

          (a) The Plan will be governed by and interpreted and construed in
accordance with the internal laws of the Commonwealth of Massachusetts (without
reference to principles of conflicts or choice of law). The captions of sections
of the Plan are for reference only and will not affect the interpretation or
construction of the Plan.

                                       4
<PAGE>

          (b) The Plan will be administered by the Committee as determined and
appointed by the Company's Board of Directors, which shall consist of two or
more persons. The Committee has and may exercise such powers and authority of
the Board as may be necessary or appropriate for the Committee to carry out its
functions as described in the Plan. By way of specification and not by way of
limitation, the Committee shall determine the Eligible Employees to whom, and
the time or times at which, Options or Restricted Stock Awards may be granted
and the number of shares subject to each Option or Restricted Stock Award. The
Committee also has authority (i) to interpret the Plan, (ii) to determine the
terms and provisions of the Option or Restricted Stock Award instruments, and
(iii) to make all other determinations necessary or advisable for Plan
administration. The Committee has authority to prescribe, amend, and rescind
rules and regulations relating to the Plan. All interpretations, determinations,
and actions by the Committee will be final, conclusive, and binding upon all
parties.

          (c) No member of the Committee will be liable for any action taken or
determination made in good faith by the Committee with respect to the Plan or
any Option or Restricted Stock Award under it.

5.       Grants.

          (a) The Committee shall determine and designate from time to time
those Eligible Employees who are to be granted Options or Restricted Stock
Awards, the type of each Option to be granted and the number of shares covered
thereby or issuable upon exercise thereof, and the number of shares covered by
each Restricted Stock Award. Each Option and Restricted Stock Award will be
evidenced by a written agreement or instrument and may include any other terms
and conditions consistent with the Plan, as the Committee may determine.

          (b) No person will be eligible for the grant of an Incentive Stock
Option who owns or would own immediately before the grant of such Option,
directly or indirectly, stock possessing more than ten percent of the total
combined voting power of all classes of stock of the Company or of any parent
corporation or Subsidiary. This limitation will not apply if, at the time such
Incentive Stock Option is granted, its exercise price is at least 110% of the
Fair Market Value of the Common Stock and by its terms, it is not exercisable
after the expiration of five years from the date of grant.

6.       Terms and Conditions of Stock Options.

          (a) The price at which Common Stock may be purchased by a Participant
under an Option shall be determined by the Committee; provided however, that the
purchase price under an Incentive Stock Option shall not be less than 100% of
the Fair Market Value of the Common Stock on the date of grant of such Option.
The price at which Common Stock may be purchased by a Participant under a
Nonqualified Stock Option may be a nominal amount as determined by the Committee
in its complete discretion.

                                       5
<PAGE>

          (b) Each Option shall be exercisable at such time or times, during
such periods, and for such numbers of shares as shall be determined by the
Committee and set forth in the agreement or instrument evidencing the Option
grant (subject to Acceleration by the Committee, in its discretion). In any
event, the Option shall expire no later than the tenth anniversary of the date
of grant.

          (c) Unless the Committee otherwise determines at the time any
Incentive Stock Option is granted or at the time of grant of any Nonqualified
Stock Option or thereafter, upon the exercise of an Option, the purchase price
will be payable in full in cash.

          (d) For purposes of this Section 6(d), Incentive Stock Options may be
granted under the Plan only to Eligible Employees defined as individuals who
are, at the time of the grant of the Incentive Stock Option, actual so-called
"common law employees" of the Company and not a consultant, advisor, service
provider or independent contractor. The aggregate Fair Market Value of the
shares with respect to which Incentive Stock Options may become exercisable for
the first time in any calendar year shall not exceed the excess, if any, of (i)
one hundred thousand dollars ($100,000) over (ii) the aggregate Fair Market
Value of the shares which the Eligible Employee, as defined in this Section
6(d), may acquire for the first time in that calendar year pursuant to other
incentive stock options (within the meaning of section 422 of the Internal
Revenue Code) previously granted, if any, to such Eligible Employee after
December 31, 1986, under this Plan or any other plan of the Company, its
Subsidiaries and any "parent corporation" (as defined in section 424 of the
Internal Revenue Code) of the Company. For purposes of the preceding sentence,
the Fair Market Value of shares shall be determined as of the respective dates
of grant of the Options under which such shares may be purchased. Any Options
that purport to be Incentive Stock Options but which are granted to persons
other than employees of the Company or a Subsidiary shall be, and any Options
that purport to be Incentive Stock Options but are granted or become exercisable
in amounts in excess of those specified in this Section 6(d), shall to the
extent of such excess be, Nonqualified Stock Options.

          (e) No fractional shares will be issued pursuant to the exercise of an
Option, nor will any cash payment be made in lieu of fractional shares.

          (f) Subject to the short-swing profit restrictions of the Federal
securities laws, each Option granted to any officer of the Company may provide
that upon the occurrence of a Hostile Takeover, such Option, if outstanding for
at least six months, will automatically be canceled in exchange for a cash
distribution from the Company in an amount equal to the excess of (i) the
aggregate Takeover Price of the shares of Common Stock at the time subject to
the canceled Option (regardless of whether the Option is otherwise then
exercisable for such shares) over (ii) the aggregate Option price payable for
such shares. Such cash distribution shall be made within five days after the
consummation of the Hostile Takeover. Neither the approval of the Committee nor
the consent of the Board shall be required in connection with such Option
cancellation and cash distribution.

                                       6
<PAGE>
7.        Terms and Conditions of Restricted Stock Awards.

          (a) All shares of Common Stock subject to Restricted Stock Awards
granted or sold pursuant to the Plan may be issued or transferred for such
consideration (which may consist wholly of services) as the Committee may
determine, and will be subject to the following conditions:

               (i) The shares may not be sold, transferred, or otherwise
               alienated or hypothecated, except to the Company, until the
               conditions imposed pursuant to subsection (b) of this Section 7
               have been met or are removed, unless the Committee determines
               otherwise in accordance with Section 9(d).

               (ii) The Committee may provide in the agreement or instrument
               evidencing the grant of the Restricted Stock Awards that the
               certificates representing shares subject to Restricted Stock
               Awards granted or sold pursuant to the Plan will be held in
               escrow by the Company until the restrictions on the shares lapse
               in accordance with the provisions of subsection (b) of this
               Section 7.

               (iii) Each certificate representing shares subject to Restricted
               Stock Awards granted or sold pursuant to the Plan will bear a
               legend making appropriate reference to the restrictions imposed.

               (iv) The Committee may impose other conditions on any shares
               subject to Restricted Stock Awards granted or sold pursuant to
               the Plan as it may deem advisable, including without limitation,
               restrictions under the Securities Act of 1933, as amended, under
               the requirements of any stock exchange or securities quotations
               system upon which such shares or shares of the same class are
               then listed, and under any blue sky or other securities laws
               applicable to such shares.

          (b) The restrictions imposed under subparagraph (a) above upon
Restricted Stock Awards will lapse at such time or times, and/or upon the
achievement of such predetermined performance objectives, as shall be determined
by the Committee and set forth in the agreement or instrument evidencing the
Restricted Stock Award grant. In the event a holder of a Restricted Stock Award
ceases to be an employee or consultant of the Company, all shares under the
Restricted Stock Award that remain subject to restrictions at the time his or
her employment or consulting relationship terminates will be returned to or
repurchased by the Company at their initial price unless the Committee
determines otherwise.

          (c) Subject to the provisions of subparagraphs (a) and (b) above, the
holder will have all rights of a shareholder with respect to the shares covered
by Restricted Stock Awards granted or sold, including the right to receive all
dividends and other distributions paid or made with respect thereto; provided,
however, that the Committee may require that he or she shall execute an
irrevocable proxy or enter into a voting agreement with the Company as
determined by the

                                       7
<PAGE>

Committee for the purpose of granting the Company or its nominee the right to
vote all shares that remain subject to restrictions under this Section 7 in the
same proportions (for and against) as the outstanding voting shares of the
Company that are not subject to such restrictions are voted by the other
shareholders of the Company on any matter, unless the Committee determines
otherwise.

8.        Adjustment Provisions.

          (a) All of the share numbers set forth in the Plan reflect the capital
structure of the Company at the time of the effectiveness of the Plan. Subject
to Section 8(b), if subsequent to such date the outstanding shares of Common
Stock of the Company are increased, decreased, or exchanged for a different
number or kind of shares or other securities, or if additional shares or new or
different shares or other securities are distributed with respect to such shares
of Common Stock or other securities, through merger, consolidation, sale of all
or substantially all the property of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split, or other distribution with respect to such shares of Common Stock, or
other securities, an appropriate and proportionate adjustment shall be made in
(i) the maximum numbers and kinds of shares provided in Sections 3 and 5, (ii)
the numbers and kinds of shares or other securities subject to the then
outstanding Options and Restricted Stock Awards, and (iii) the price for each
share or other unit of any other securities subject to then outstanding Options
(without change in the aggregate purchase price as to which such Options remain
exercisable).

          (b) Upon the occurrence of a Change in Control of the Company, the
Committee shall have discretion to provide for the Acceleration of (i) one or
more outstanding Options held by Participants and/or (ii) one of more shares of
Common Stock held by Participants as Restricted Stock Awards. Such Acceleration
may be conditioned on the subsequent termination of the affected optionee's
employment and/or advisory or consulting relationship as the case may be. Any
Options Accelerated in connection with a Change in Control shall remain fully
exercisable until the expiration or sooner termination of the term of such
Option.

          (c) In the event of an Acquisition, (i) to the extent that any shares
of Common Stock held by Participants as Restricted Stock Awards are then subject
to any rights in the Company with respect to the reacquisition or repurchase
thereof, such reacquisition or repurchase rights shall be terminated
immediately, except to the extent that such reacquisition or repurchase rights
are to be assigned to the acquiring entity and (ii) all outstanding Options held
by Participants will Accelerate to the extent not assumed by the acquiring
entity or replaced by comparable options to purchase shares of the capital stock
of the successor or acquiring entity or parent thereof (the determination of
comparability to be made by the Committee, which determination shall be final,
binding, and conclusive). The Committee shall have discretion, exercisable
either in advance of an Acquisition or at the time thereof, to provide (upon
such terms as it may deem appropriate) for the automatic Acceleration of (i) one
or more outstanding Options held by Participants that are assumed or replaced
and do not otherwise Accelerate by reason of the Acquisition, and/or (ii) one or
more shares held by Participants as Restricted Stock Awards that are assigned in
connection

                                       8
<PAGE>

with the Acquisition and do not otherwise Accelerate at the time thereof, in the
event that the employment and/or consulting relationship, as applicable, of the
respective grantees of such Options or Restricted Stock Awards should
subsequently terminate following such Acquisition.

          (d) Each outstanding Option that is assumed in connection with an
Acquisition, or is otherwise to continue in effect subsequent to such
Acquisition, shall be appropriately adjusted, immediately after such
Acquisition, to apply to the number and class of securities that would have been
issued to the Option holder, in consummation of such Acquisition, had such
holder exercised such Option immediately prior to such Acquisition. Appropriate
adjustments shall also be made to the Option price payable per share, provided,
that the aggregate Option price payable for such securities shall remain the
same. The class and number of securities available for issuance under the Plan
following the consummation of such Acquisition shall be appropriately adjusted.

          (e) Adjustments under this Section 8 will be made by the Committee in
accordance with the terms of such sections, whose determination as to what
adjustments will be made and the extent thereof so as to effectuate the intent
of such sections will be final, binding, and conclusive. No fractional shares
will be issued under the Plan on account of any such adjustments.

9.       General Provisions.

          (a) Nothing in the Plan or in any instrument executed pursuant to the
Plan will confer upon any Participant any right to continue as an employee,
consultant or advisor to the Company or any of its Subsidiaries or affect the
right of the Company or any Subsidiary to terminate the employment, consulting
or advisory relationship of any Participant at any time, with or without cause.

          (b) No shares of Common Stock will be issued or transferred pursuant
to an Option or Restricted Stock Award unless and until all then applicable
requirements imposed by Federal and state securities and other laws, rules and
regulations and by any regulatory agencies having jurisdiction, and by any stock
exchanges or securities quotations systems upon which the Common Stock may be
listed, have been fully met. As a condition precedent to the issuance of shares
pursuant to the grant or exercise of an Option or Restricted Stock Award, the
Company may require the Participant to take any reasonable action to meet such
requirements.

          (c) No Participant and no beneficiary or other person claiming under
or through such Participant will have any right, title, or interest in or to any
shares of Common Stock allocated or reserved under the Plan or subject to any
Option, except as to such shares of Common Stock, if any, that have been issued
or transferred to such Participant.

          (d) Except as set forth in paragraph (f) below, no Option and no right
under the Plan, contingent or otherwise, will be transferable or assignable or
subject to any encumbrance, pledge,

                                       9
<PAGE>

or charge of any nature except that, under such rules and regulations as the
Committee may establish pursuant to the terms of the Plan, a beneficiary may be
designated with respect to an Option in the event of death of a Participant. If
such beneficiary is the executor or administrator of the estate of the
Participant, any rights with respect to such Option may be transferred to the
person or persons or entity (including a trust) entitled thereto under the will
of the holder of such Option.

          (e) The Committee may, upon the grant of a Nonqualified Stock Option
or a Restricted Stock Award or by amendment to any written agreement or
instrument evidencing such Nonqualified Stock Option or Restricted Stock Award,
provide that such Nonqualified Stock Option or Restricted Stock Award be
transferable by the person to whom such Nonqualified Stock Option or Restricted
Stock Award was granted, without payment of consideration, to a Permitted
Transferee of such person; provided, however, that no transfer of a Nonqualified
Stock Option or Restricted Stock Award shall be valid unless first approved by
the Committee, acting in its sole discretion.

          (f) The Committee may cancel, with the consent of the Participant, all
or a portion of any Option granted under the Plan to be conditioned upon the
granting to the Participant of a new Option for the same or a different number
of shares as the Option surrendered, or may require such voluntary surrender as
a condition to a grant of a new Option to such Participant. Subject to the
provisions of Section 6(d), such new Option shall be exercisable at such time or
time, during such periods, and for such numbers of shares, and in accordance
with any other terms or conditions, as are specified by the Committee at the
time the new Option is granted, all determined in accordance with the provisions
of the Plan without regard to the price, period of exercise, or any other terms
or conditions of the Option surrendered.

         (g) The written agreements or instruments evidencing Restricted Stock
Awards or Options granted under the Plan may contain such other provisions as
the Committee may deem advisable. Without limiting the foregoing, and if so
authorized by the Committee at the date of grant in the case of any Incentive
Stock Option or at the date of grant or thereafter in the case of any
Nonqualified Stock Option, the Company may, with the consent of the Participant
and at any time or from time to time, cancel all or a portion of any Option
granted under the Plan then subject to exercise and discharge its obligation
with respect to the Option either by payment to the Participant of an amount of
cash equal to the excess, if any, of the Fair Market Value, at such time, of the
shares subject to the portion of the Option so canceled over the aggregate
purchase price specified in the Option covering such shares, or by issuance or
transfer to the Participant of shares of Common Stock with a Fair Market Value
at such time, equal to any such excess, or by a combination of cash and shares.
Upon any such payment of cash or issuance of shares, (i) there shall be charged
against the aggregate limitations set forth in Section 3(a) a number of shares
equal to the number of shares so issued plus the number of shares purchasable
with the amount of any cash paid to the Participant on the basis of the Fair
Market Value as of the date of payment, and (ii) the number of shares subject to
the portion of the Option so canceled, less the number of shares so charged
against such limitations, shall thereafter be available for other grants.

                                       10
<PAGE>

10.       Withholding; Notice of Disposition of Stock Prior to Expiration of
          Specified Holding Period.

          (a) The Committee shall adopt rules regarding the withholding of
federal, state, or local taxes of any kind required by law to be withheld with
respect to payments and delivery of shares to Participants under the Plan.
Whenever shares of Common Stock are to be issued upon exercise of an Option, the
Committee shall have the right to require the Optionee to remit to the Company
an amount sufficient to satisfy federal, state, local or other withholding tax
requirements (whether so required to secure for the Company an otherwise
available tax deduction or otherwise) if and to the extent required by law prior
to the delivery of any certificate for such shares. With respect to any
Nonqualified Stock Option, the Committee, in its discretion, may permit the
Participant to satisfy, in whole or in part, any tax withholding obligation that
may arise in connection with the exercise of the Nonqualified Stock Option by
electing to have the Company withhold shares of Common Stock having a Fair
Market Value equal to the amount of the tax withholding.

          (b) The Committee may require as a condition to the issuance of shares
covered by any Incentive Stock Option that the person exercising such Option
give a written representation to the Company, satisfactory in form and substance
to its counsel and upon which the Company may reasonably rely, that he or she
will report to the Company any disposition of those shares prior to the
expiration of the holding periods specified by Section 422(a)(1) of the Code. If
and to the extent that the disposition imposes upon the Company federal, state,
local or other withholding tax requirements, or any such withholding is required
to secure for the Company an otherwise available tax deduction, the Company
shall have the right to require that the person making the disposition remit to
the Company an amount sufficient to satisfy those requirements.

11.        Amendment and Termination.

          (a) The Board shall have the power, in its discretion, to amend,
modify, suspend, or terminate the Plan at any time, subject to the rights of
holders of outstanding Options and Restricted Stock Awards on the date of such
action, and to the approval of the stockholders of the Company if an amendment
or modification would change the eligibility requirements of the Plan, extend
the term of the Plan, increase the number of shares of Common Stock subject to
grant as Options or Restricted Stock Awards under the Plan, or is required by
applicable law or regulation.

          (b) The Committee may, with the consent of a Participant, make such
modifications in the terms and conditions of an Option or Restricted Stock Award
held by such Participant as it deems advisable.

                                       11
<PAGE>

          (c) No amendment, suspension or termination of the Plan will, without
the consent of the Participant, alter, terminate, impair, or adversely affect
any right or obligation under any Option or Restricted Stock Award previously
granted to such Participant under the Plan.

                                       12

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