Document:

SECURITIES
PURCHASE AGREEMENT

     

    This
Securities Purchase Agreement (this “Agreement”) is dated
as of December 16, 2008, by and between Neuralstem, Inc., a Delaware corporation
(the “Company”), and
Seaside 88, LP, a Florida limited partnership (such investor, including its
successors and assigns, “Seaside”).

     

    WHEREAS,
subject to the terms and conditions set forth in this Agreement, the Company
desires to issue and sell to Seaside, and Seaside desires to purchase from the
Company, $2,000,000 of shares of Common Stock on the Closing Date pursuant to an
effective Registration Statement on Form S-3, file no. 333-153387;

     

    NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for other good and valuable consideration the receipt and adequacy of which
are hereby acknowledged, the Company and Seaside agree as follows:

     

    ARTICLE
I.

    DEFINITIONS

     

    1.1 Definitions.  In
addition to the terms defined elsewhere in this Agreement, for all purposes of
this Agreement, the following terms have the meanings indicated in this Section
1.1:

     

    “Action” shall have
the meaning ascribed to such term in Section 3.1(j).

     

    “Affiliate” means any
Person that, directly or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with a Person as such terms are
used in and construed under Rule 144.

     

    “Closing” means the
closing of the purchase and sale of the Common Stock pursuant to Section
2.1.

     

     “Closing Date” means
December 16, 2008 or such later date when all of the Transaction Documents have
been executed and delivered by the applicable parties thereto, and all
conditions precedent to (i) Seaside’s obligations to pay the Subscription Amount
and (ii) the Company’s obligations to deliver the Securities have been satisfied
or waived.

     

     “Commission” means the
Securities and Exchange Commission.

     

    “Common Stock” means
the common stock of the Company, par value $.01 per share, and any securities
into which such common stock may hereafter be reclassified.

     

    “Common Stock
Equivalents” means any securities of the Company or the Subsidiaries
which would entitle the holder thereof to acquire at any time Common Stock,
including without limitation, any debt, preferred stock, rights, options,
warrants or other instrument that is at any time convertible into or
exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.

     

    “Company Counsel”
means The Law Offices of Raul Silvestre & Associates, APLC.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    “Disclosure Schedules”
means the Disclosure Schedules of the Company delivered concurrently
herewith.

     

    “Effective Date” means
the date that the Registration Statement was first declared effective by the
Commission.

     

    “Evaluation Date”
shall have the meaning ascribed to such term in Section 3.1(l).

     

    “Exchange Act” means
the Securities Exchange Act of 1934, as amended.

     

    “Exempt Issuance”
means the issuance of (a) shares of Common Stock or options to employees,
officers, directors or consultants of the Company pursuant to any stock or
option plan duly adopted by a majority of the non-employee members of the Board
of Directors of the Company or a majority of the members of a committee of
non-employee directors established for such purpose, (b) securities upon the
exercise of or conversion of any Securities issued hereunder or convertible
securities, options or warrants issued and outstanding on the date of this
Agreement, provided that the terms of such securities have not been amended
since the date of this Agreement to increase the number of such securities or to
decrease the exercise or conversion price of any such securities, and (c)
securities issued pursuant to acquisitions or strategic transactions, provided
any such issuance shall only be to a Person which is, itself or through its
subsidiaries, an operating company in a business synergistic with the business
of the Company and in which the Company receives 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.

     

     “GAAP” shall have the
meaning ascribed to such term in Section 3.1(h).

     

    “Liens” means a lien,
charge, security interest, encumbrance, right of first refusal, preemptive right
or other restriction.

     

     “Material Adverse
Effect” shall have the meaning ascribed to such term in Section
3.1(b).

     

    “Per Share Purchase
Price” equals $1.25.

     

    “Person” means an
individual or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any
kind.

     

    “Proceeding” means an
action, claim, suit, investigation or proceeding (including, without limitation,
an investigation or partial proceeding, such as a deposition), whether commenced
or threatened.

     

    “Prospectus
Supplement” means the supplement to the base prospectus contained in the
Registration Statement to be filed in connection with the sale to Seaside of the
Securities.

    
      
         

      

      
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     “Registration
Statement” means the registration statement of the Company, Commission
File No. 333-153387, as amended, covering the sale to Seaside of the
Securities.

     

     “Required Approvals”
shall have the meaning ascribed to such term in Section 3.1(e).

     

    “Rule 144” means Rule
144 promulgated by the Commission pursuant to the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such
Rule.

     

    “Seaside Party” shall
have the meaning ascribed to such term in Section 4.6.

     

    “SEC Reports” shall
have the meaning ascribed to such term in Section 3.1(h).

     

    “Securities” means the
Shares.

     

    “Securities Act” means
the Securities Act of 1933, as amended.

     

    “Shares” means the
shares of Common Stock issued or issuable to Seaside pursuant to this
Agreement.

     

    “Short Sales” shall
include, without limitation, all “short sales” as defined in Rule 200 of
Regulation SHO of the Exchange Act, but does not include any reservation or
location of borrowable shares.

     

    “Subscription Amount”
means, as to Seaside, the amounts set forth below such Seaside’s signature block
on the signature page hereto, in United States dollars and in immediately
available funds.

     

    “Subsidiary” shall
mean the subsidiaries of the Company, if any, set forth on Schedule
3.1(a).

     

     “Trading Day” means a
day on which the Common Stock is traded on a Trading Market.

     

    “Trading Market” means
the following markets or exchanges on which the Common Stock is listed or quoted
for trading on the date in question:  the NYSE Alternext Exchange, the
New York Stock Exchange, the Nasdaq Capital Market, the Nasdaq Global Market,
the Nasdaq Global Select Market or the Over-the Counter Bulletin
Board.

     

    “Transaction
Documents” means this Agreement and any other documents or agreements
executed in connection with the transactions contemplated
hereunder.

    
      
         

      

      
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    ARTICLE
II.

    PURCHASE
AND SALE

     

    2.1 Closing.  On
the Closing Date, Seaside shall purchase from the Company, and the Company shall
issue and sell to Seaside, a number of Shares equal to $2,000,000 divided by the
Per Share Purchase Price.  Upon satisfaction of the conditions set
forth in Sections 2.2, 2.3 and 2.4, the Closing shall occur at the offices of
White White & Van Etten PC, 55 Cambridge Parkway, Cambridge, MA 02142, or
such other location as the parties shall mutually agree.

     

    2.2 Deliveries by the
Company.  On the Closing Date, the Company shall deliver or
cause to be delivered to Seaside the following:

     

    (a) the
receipt by Seaside, via the DTC DWAC system, as specified on the signature pages
hereto, of the number of Shares equal to $2,000,000 divided by the Per Share
Purchase Price, registered in the name of Seaside;

     

    (b) an
officer’s certificate of the Company’s Chief Executive Officer or Chief
Financial Officer, in form reasonably acceptable to Seaside, certifying the
accuracy of the Company’s representations and warranties made in this Agreement
as of the Closing Date and the Company’s performance of the covenants to be
performed by it pursuant to this Agreement at or prior to
Closing;  and

     

    (c) a
legal opinion of Company Counsel, in the form of Exhibit A attached
hereto.

     

    2.3 Deliveries by
Seaside.   On the Closing Date, Seaside shall deliver or
cause to be delivered to the Company $2,000,000 by wire transfer to the account
as specified in writing by the Company.  The Company agrees that
Seaside may deduct from such wire transfer the amount due Seaside for
reimbursement of its expenses as described in Section 5.2 hereof.

     

    2.4 Closing
Conditions.

     

    (a)           The
obligations of the Company hereunder in connection with the Closing are subject
to the following conditions being met:

     

    (i)         the
accuracy in all material respects when made and on the Closing Date of the
representations and warranties of Seaside contained herein;

     

    (ii)        all
obligations, covenants and agreements of Seaside required to be performed at or
prior to the Closing Date shall have been performed; and

     

    (iii)       the
delivery by Seaside of the items set forth in Section 2.3 of this
Agreement.

     

    (b) The
respective obligations of Seaside hereunder in connection with the Closing are
subject to the following conditions being met:

     

    (i)         the
accuracy in all material respects on the Closing Date of the representations and
warranties of the Company contained herein;

     

    (ii)        all
obligations, covenants and agreements of the Company required to be performed at
or prior to the Closing Date shall have been performed;

    
      
         

      

      
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    (iii)       the
delivery by the Company of the items set forth in Section 2.2 of this
Agreement;

     

    (iv)       there
shall have been no Material Adverse Effect with respect to the Company since the
date hereof, that has not been cured by the Company; and

     

    (v)        from
the date hereof to the Closing Date, trading in the Common Stock shall not have
been suspended by the Commission (except for any suspension of trading of
limited duration agreed to by the Company, which suspension shall be terminated
prior to the Closing), and, at any time prior to the Closing Date, trading in
securities generally as reported by Bloomberg Financial Markets shall not have
been suspended or limited, or minimum prices shall not have been established on
securities whose trades are reported by such service, or on any Trading Market,
nor shall a banking moratorium have been declared either by the United States or
New York State authorities nor shall there have occurred any material outbreak
or escalation of hostilities or other national or international calamity of such
magnitude in its effect on, or any material adverse change in, any financial
market which, in each case, in the reasonable judgment of Seaside, makes it
impracticable or inadvisable to purchase the Shares at the Closing.

     

    ARTICLE
III.

    REPRESENTATIONS
AND WARRANTIES

     

    3.1           Representations and
Warranties of the Company.  Except as set forth under the
corresponding section of the Disclosure Schedules, which Disclosure Schedules
shall be deemed a part hereof, the Company hereby makes the representations and
warranties set forth below to Seaside:

     

    (a) Subsidiaries.  All
of the direct and indirect subsidiaries of the Company are set forth on Schedule 3.1(a) (each
a “Subsidiary”).  The Company owns, directly or indirectly, all of the
capital stock or other equity interests of each Subsidiary free and clear of any
Liens, and all the issued and outstanding shares of capital stock of each
Subsidiary are validly issued and are fully paid, non-assessable and free of
preemptive and similar rights to subscribe for or purchase
securities.  If the Company has no subsidiaries, then references in
the Transaction Documents to the Subsidiaries will be disregarded.

     

    (b)           Organization and
Qualification.  The Company and each of the Subsidiaries is an
entity duly incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or organization
(as applicable), with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently
conducted.  Neither the Company nor any Subsidiary is in violation or
default of any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter
documents.  Each of the Company and the Subsidiaries is duly qualified
to conduct business and is in good standing as a foreign corporation or other
entity in each jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, could not
have or reasonably be expected to result in (i) a material adverse effect on the
legality, validity or enforceability of any Transaction Document, (ii) a
material adverse effect on the results of operations, assets, business,
prospects or financial condition of the Company and the Subsidiaries, taken as a
whole, or (iii) a material adverse effect on the Company’s ability to perform in
any material respect on a timely basis its obligations under any Transaction
Document (any of (i), (ii) or (iii), a “Material Adverse
Effect”) and no Proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing or seeking to revoke, limit or curtail such
power and authority or qualification.

    
      
         

      

      
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    (c) Authorization;
Enforcement.  The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by each
of the Transaction Documents and otherwise to carry out its obligations
thereunder.  The execution and delivery of each of the Transaction
Documents by the Company and the consummation by it of the transactions
contemplated thereby have been duly authorized by all necessary action on the
part of the Company and its stockholders and no further action is required by
the Company or its stockholders in connection therewith other than in connection
with the Required Approvals.  Each Transaction Document has been (or
upon delivery will have been) duly executed by the Company and, when delivered
in accordance with the terms hereof, will constitute the valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms except (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law.

     

    (d) No
Conflicts.  The execution, delivery and performance of the
Transaction Documents by the Company, the issuance and sale of the Shares and
the consummation by the Company of the other transactions contemplated thereby
do not and will not (i) conflict with or violate any provision of the Company’s
or any Subsidiary’s certificate or articles of incorporation, bylaws or other
organizational or charter documents, or (ii) conflict with, violate or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or result in the creation of any Lien upon any of
the properties or assets of the Company or any Subsidiary, or give to others any
rights of termination, amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company or Subsidiary debt or otherwise) or other
understanding to which the Company or any Subsidiary is a party or by which any
property or asset of the Company or any Subsidiary is bound or affected, or
(iii) subject to the Required Approvals, conflict with or result in a violation
of any law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the Company or a
Subsidiary is subject (including federal and state securities laws and
regulations), or by which any property or asset of the Company or a Subsidiary
is bound or affected; except in the case of each of clauses (ii) and (iii), such
as could not have or reasonably be expected to result in a Material Adverse
Effect.

     

    (e) Filings, Consents and
Approvals.  The Company is not required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority, the Trading Market or other Person in connection with
the execution, delivery and performance by the Company of the Transaction
Documents, other than the filing of the Prospectus supplement and any notice
filings as are required to be made following the Closing Date under applicable
federal and state securities laws or under applicable rules and regulations of
the Trading Market (collectively, the “Required
Approvals”).

    
      
         

      

      
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    (f) Issuance of the
Securities.  The Shares are duly authorized and, when issued
and paid for in accordance with the Transaction Documents, will be duly and
validly issued, fully paid and nonassessable, free and clear of all Liens
imposed by the Company other than restrictions on transfer provided for in the
Transaction Documents or applicable federal and state securities
laws.  The Company has reserved from its duly authorized capital stock
the maximum number of shares of Common Stock issuable pursuant to this
Agreement.  The issuance by the Company of the Shares has been
registered under the Securities Act and all of the Shares when delivered will be
freely transferable and tradable on the Trading Market by Seaside without
restriction (other than any restrictions arising solely from an act or omission
of a Seaside). The Registration Statement is effective and available for the
issuance of the Shares thereunder and the Company has not received any notice
that the Commission has issued or intends to issue a stop-order with respect to
the Registration Statement or that the Commission otherwise has suspended or
withdrawn the effectiveness of the Registration Statement, either temporarily or
permanently, or intends or has threatened in writing to do so.  The
“Plan of Distribution” section under the Registration Statement permits the
issuance and sale of the Shares hereunder.  The Shares constitute less
than 10% of the issued and outstanding shares of Common Stock.

     

    (g) Capitalization.  The
capitalization of the Company is as set forth in its most recently filed
periodic report under the Exchange Act.  The Company has not issued
any capital stock since its most recently filed periodic report under the
Exchange Act, other than pursuant to the exercise of employee stock options
under the Company’s stock option plans, the issuance of shares of Common Stock
to employees pursuant to the Company’s employee stock purchase plan and pursuant
to the conversion or exercise of outstanding Common Stock
Equivalents.  No Person has any right of first refusal, preemptive
right, right of participation, or any similar right to participate in the
transactions contemplated by the Transaction Documents.  Except as
disclosed in the SEC Reports or Schedule 3.1(g), there are no outstanding
options, warrants, script rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities, rights or obligations
convertible into or exchangeable for, or giving any Person any right to
subscribe for or acquire, any shares of Common Stock, or contracts, commitments,
understandings or arrangements by which the Company or any Subsidiary is or may
become bound to issue additional shares of Common Stock or Common Stock
Equivalents. Except as disclosed in the SEC Reports or Schedule 3.1(g), the
issue and sale of the Securities will not obligate the Company to issue shares
of Common Stock or other securities to any Person (other than Seaside) and will
not result in a right of any holder of Company securities to adjust the
exercise, conversion, exchange or reset price under such
securities.  All of the outstanding shares of capital stock of the
Company are validly issued, fully paid and nonassessable, have been issued in
material compliance with all federal and state securities laws and requirements
of the Trading Market, and none of such outstanding shares was issued in
violation of any preemptive rights or similar rights to subscribe for or
purchase securities.  No further approval or authorization of any
stockholder or the Board of Directors of the Company is required for the
issuance and sale of the Shares.  There are no stockholders
agreements, voting agreements or other similar agreements with respect to the
Company’s capital stock to which the Company is a party or, to the knowledge of
the Company, between or among any of the Company’s
stockholders.

    
      
         

      

      
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    (h) SEC Reports; Financial
Statements.  The Company has filed or furnished all reports,
schedules, forms, statements and other documents required to be filed or
furnished by it under the Securities Act and the Exchange Act (including all
required exhibits thereto), including pursuant to Section 13(a) or 15(d)
thereof, for the two years preceding the date hereof (or such shorter period as
the Company was required by law to file such material) (the foregoing materials,
including the exhibits thereto and documents incorporated by reference therein,
being collectively referred to herein as the “SEC Reports”) and any
notices, reports or other filings pursuant to requirements of the Trading Market
on a timely basis or has received a valid extension of such time of filing and
has filed any such SEC Reports prior to the expiration of any such
extension.  As of their respective dates, the SEC Reports complied in
all material respects with the requirements of the Securities Act and the
Exchange Act and the rules and regulations of the Commission promulgated
thereunder, and none of the SEC Reports, when filed, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.  The
financial statements of the Company included in the SEC Reports comply in all
material respects with applicable accounting requirements and the rules and
regulations of the Commission with respect thereto as in effect at the time of
filing.  Such financial statements have been prepared in accordance
with United States generally accepted accounting principles applied on a
consistent basis during the periods involved (“GAAP”), except as may
be otherwise specified in such financial statements or the notes thereto and
except that unaudited financial statements may not contain all footnotes
required by GAAP, and fairly present in all material respects the financial
position of the Company and its consolidated subsidiaries as of and for the
dates thereof and the results of operations and cash flows for the periods then
ended, subject, in the case of unaudited statements, to normal, year-end audit
adjustments.

     

    (i) Material
Changes.  Since the date of the latest audited financial
statements included within the SEC Reports, except as specifically disclosed in
the SEC Reports, (i) there has been no event, occurrence or development that has
had or that could reasonably be expected to result in a Material Adverse Effect,
except as has been reasonably cured by the Company (ii) the Company has not
incurred any liabilities (contingent or otherwise) other than (A) trade payables
and accrued expenses incurred in the ordinary course of business consistent with
past practice and (B) liabilities not required to be reflected in the Company’s
financial statements pursuant to GAAP or required to be disclosed in filings
made with the Commission, (iii) the Company has not altered its method of
accounting, (iv) the Company has not declared or made any dividend or
distribution of cash or other property to its stockholders or purchased,
redeemed or made any agreements to purchase or redeem any shares of its capital
stock and (v) the Company has not issued any equity securities to any officer,
director or Affiliate, except pursuant to existing Company stock option and
incentive plans.  The Company does not have pending before the
Commission any request for confidential treatment of
information.

    
      
         

      

      
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    (j) Litigation.  Except
as disclosed in the SEC Reports, there is no action, suit, notice of violation,
or proceeding pending or, to the knowledge of the Company, threatened against or
affecting the Company, any Subsidiary or any of their respective properties
before or by any court, arbitrator, governmental or administrative agency or
regulatory authority (federal, state, county, local or foreign) (collectively,
an “Action”)
which (i) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the Securities or (ii)
could, if there were an unfavorable decision, have or reasonably be expected to
result in a Material Adverse Effect.  Neither the Company nor any
Subsidiary, nor, to the knowledge of the Company, any director or officer
thereof, is or has been the subject of any Action involving a claim of violation
of or liability under federal or state securities laws or a claim of breach of
fiduciary duty. There has not been and, to the knowledge of the Company, there
is not currently pending or contemplated, any investigation by the Commission
involving the Company or any current or former director or officer of the
Company.  The Commission has not issued any stop order or other order
suspending the effectiveness of any registration statement filed by the Company
or any Subsidiary under the Exchange Act or the Securities Act and, to the
Company’s knowledge, no proceeding for such purpose is pending before or
threatened by the Commission.

     

    (k) Compliance.  Neither
the Company nor any Subsidiary (i) is in default under or in violation of (and
no event has occurred that has not been waived that, with notice or lapse of
time or both, could reasonably be expected to result in a default by the Company
or any Subsidiary under), nor has the Company or any Subsidiary received notice
of a claim that it is in default under or that it is in violation of, any
indenture, loan or credit agreement or any other agreement or instrument to
which it is a party or by which it or any of its properties is bound (whether or
not such default or violation has been waived), (ii) is in violation of any
order of any court, arbitrator or governmental body, or (iii) is in violation of
any statute, rule or regulation of any governmental authority or the Trading
Market, including without limitation all foreign, federal, state and local laws
applicable to its business, except in each case as would not have a Material
Adverse Effect.

     

    (l) Sarbanes-Oxley; Internal
Accounting Controls.  The Company is in material compliance
with all provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it
as of the Closing Date.  The Company maintains a system of 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 GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization, and (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. The
Company has established disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such
disclosure controls and procedures to ensure that material information relating
to the Company, including its Subsidiaries, is made known to the certifying
officers by others within those entities, particularly during the period in
which the Company’s most recently filed periodic report under the Exchange Act,
as the case may be, is being prepared.  The Company’s certifying
officers have evaluated the effectiveness of the Company’s disclosure controls
and procedures as of a date prior to the filing date of the most recently filed
periodic report under the Exchange Act (such date, the “Evaluation
Date”).  The Company presented in its most recently filed
periodic report under the Exchange Act the conclusions of the certifying
officers about the effectiveness of the Company’s disclosure controls and
procedures based on their evaluations as of the Evaluation
Date.  Since the Evaluation Date, there have been no changes in the
Company’s internal controls over financial reporting (as such term is defined in
Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially
affected, or are reasonably likely to materially affect, the Company’s internal
controls over financial reporting.

    
      
         

      

      
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    (m) Listing and Maintenance
Requirements.  The Company’s Common Stock is registered
pursuant to Section 12(b) of the Exchange Act, and the Company has taken no
action designed to, or which to its knowledge is likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act nor has
the Company received any notification that the Commission is contemplating
terminating such registration.  The Company has not, in the 12 months
preceding the date hereof, received notice from any Trading Market on which the
Common Stock is or has been listed or quoted to the effect that the Company is
not in compliance with the listing or maintenance requirements of such Trading
Market. The Company is, and immediately after the consummation of the
transactions contemplated hereby will be, in compliance with all such listing
and maintenance requirements.

     

    (n) Application of Takeover
Protections.  The Company and its Board of Directors have taken
all necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the Company’s
Certificate of Incorporation (or similar charter documents) or the laws of its
state of incorporation that is or could become applicable to Seaside as a result
of Seaside and the Company fulfilling their obligations or exercising their
rights under the Transaction Documents, including without limitation the
Company’s issuance of the Securities and Seaside’s ownership of the
Securities.

     

    (o) Disclosure. The
Company confirms that, neither the Company nor any officer, director or employee
of the Company acting on its behalf has provided Seaside or its agents or
counsel with any information that constitutes or might constitute material,
non-public information.  The Company understands and confirms that
Seaside will rely on the foregoing representations and covenants in effecting
transactions in securities of the Company.  All disclosure provided to
Seaside regarding the Company, its business and the transactions contemplated
hereby furnished by or on behalf of the Company with respect to the
representations and warranties made herein are true and correct with respect to
such representations and warranties and do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. The Company acknowledges and agrees that Seaside does not
make and has not made any representations or warranties with respect to the
transactions contemplated hereby other than those specifically set forth in
Section 3.2 hereof.

     

    (p) Effective Registration
Statement.  The Registration Statement has been declared
effective by the Commission and the Company knows of no reason why the
Registration Statement will not continue to remain effective for the foreseeable
future.  The Company is eligible to use Form S-3 registration
statements for the issuance of securities.

     

    (q) Acknowledgment Regarding
Seaside’s Purchase of Shares.  The Company acknowledges and
agrees that Seaside is acting solely in the capacity of an arm’s length
purchaser with respect to the Transaction Documents and the transactions
contemplated hereby.  The Company further acknowledges that Seaside is
not acting as a financial advisor or fiduciary of the Company (or in any similar
capacity) with respect to this Agreement and the transactions contemplated
hereby and any advice given by Seaside or any of its respective representatives
or agents in connection with this Agreement and the transactions contemplated
hereby is merely incidental to Seaside’s purchase of the Shares.  The
Company further represents to Seaside that the Company’s decision to enter into
this Agreement has been based solely on the independent evaluation of the
transactions contemplated hereby by the Company and its
representatives.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    (r) Approvals.  The
issuance and listing on the Trading Market of the Shares requires no further
approvals, including but not limited to, the approval of
shareholders.

     

    (s) Intellectual
Property.  The Company possesses such right, title and interest
in and to, patents, patent rights, trade secrets, inventions, know-how,
trademarks, trade names, copyrights, service marks and other proprietary rights
(“Intellectual
Property”) material to the conduct of the Company’s business except
Intellectual Property the failure to possess of which would not have a Material
Adverse Effect. Except as disclosed in the SEC Reports, the Company has not
received any notice of infringement, misappropriation of conflict from any third
party as to such that has not been resolved or disposed of, which infringement,
misappropriation or conflict would if adversely decided individually or in the
aggregate have a Material Adverse Effect.  To the Company’s knowledge,
it has not infringed, misappropriated, or otherwise conflicted with Intellectual
Property of any third parties, which infringement, misappropriation of conflict
would individually or in the aggregate have a Material Adverse
Effect.

     

    (t) Permits.  The
Company has made all filings, applications and submissions required by, and possesses all
approvals, licenses, certificates, certifications, clearances, consents,
exemptions, marks, notifications, orders, permits and other authorizations
issued by, the
appropriate federal, state or foreign regulatory authorities (including, without
limitation, the U.S. Food and Drug Administration of the Department of Health
and Human Services (the “FDA”), and
any other foreign, federal, state or local government or regulatory authorities
performing functions similar to those performed by the FDA, not including
Required Approvals) necessary to own or lease its properties or to conduct its
businesses (collectively, “Permits”),
except for such Permits the failure of which to possess, obtain or make the same
would not reasonably be expected to have a Material Adverse Effect; and the
Company has not received any written notice of proceedings relating to the
limitation, revocation, cancellation, suspension, modification or non-renewal of
any such Permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a Material Adverse Effect,
and has no reason to believe that any such license, certificate, permit or
authorization will not be renewed in the ordinary course.

     

    (u) Clinical
Studies.  The clinical, pre-clinical and other studies and
tests conducted by or on behalf of or sponsored by the Company were and, if
still pending, are being conducted in accordance in all material respects with
all statutes, laws, rules and regulations, as applicable (including,
without limitation, those administered by the FDA or by any foreign, federal,
state or local governmental or regulatory authority performing functions similar
to those performed by the FDA) except as would not have a Material Adverse
Effect.   The Company has not received any notices or other
correspondence from the FDA or any other foreign, federal, state or local
governmental or regulatory authority performing functions similar to those
performed by the FDA with respect to any ongoing clinical or pre-clinical
studies or tests requiring the termination or suspension of such studies or
tests, except as would not have a Material Adverse Effect.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    Seaside
acknowledge and agree that the Company does not make or has not made any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 3.1.

     

    3.2 Representations and
Warranties of Seaside.  Seaside
represents and warrants as of the date hereof and as of the Closing Date to the
Company as follows:

     

    (a) Organization;
Authority.  Seaside is a limited partnership duly otherwise
organized, validly existing and in good standing under the laws of the state of
Florida, with full right, power and authority to own and use its properties and
assets and to carry on its business as currently conducted and to enter into and
to consummate the transactions contemplated by the Transaction Documents and
otherwise to carry out its obligations thereunder. The execution, delivery and
performance by Seaside of the transactions contemplated by this Agreement and
each other Transaction Document have been duly authorized by all necessary
action on the part of Seaside and no such further action is
required.  Each Transaction Document to which it is a party has been
(or upon delivery will have been) duly executed by Seaside, and, when delivered
by Seaside in accordance with the terms thereof, will constitute the valid and
legally binding obligation of Seaside, enforceable against it in accordance with
its terms, except (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law.

     

    (b) Seaside
Representation.  Seaside does not have any agreement or
understanding, directly or indirectly, with any Person to distribute any of the
Securities. Seaside is not required to be registered as a broker-dealer under
Section 15 of the Exchange Act or otherwise.

     

    (c) Experience of
Seaside.  Seaside, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Securities, and has so evaluated the merits
and risks of such investment.  Seaside is able to bear the economic
risk of an investment in the Securities and, at the present time, is able to
afford a complete loss of such investment.

     

    (d) Short
Sales.  Seaside has not directly or indirectly executed any
Short Sales in the securities of the Company through the date
hereof.

     

    The
Company acknowledges and agrees that Seaside does not make or has not made any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 3.2.

     

    ARTICLE
IV.

    OTHER
AGREEMENTS OF THE PARTIES

     

    4.1 No Transfer
Restrictions. Certificates
evidencing the Shares shall not contain any legend restricting their
transferability by Seaside.  The Company shall cause its counsel to
issue a legal opinion to the Company’s transfer agent if required by the
Company’s transfer agent to effect a transfer of any of the Securities; such
opinion shall be provided by the Company’s counsel at no expense to
Seaside.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    4.2 Furnishing of
Information. As long
as Seaside owns Securities, the Company covenants to use best efforts to timely
file (or obtain extensions in respect thereof and file within the applicable
grace period) all reports required to be filed by the Company after the date
hereof pursuant to the Exchange Act.  As long as Seaside owns
Securities, if the Company is not required to file reports pursuant to the
Exchange Act, it will prepare and furnish to Seaside and make publicly available
in accordance with Rule 144(c) such information as is required for Seaside to
sell the Securities under Rule 144.  The Company further covenants
that it will take such further action as any holder of Securities may reasonably
request, all to the extent required from time to time to enable such Person to
sell such Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144.  If at any time
from the Closing Date until 360 days thereafter, the Company fails to remain
current in its SEC reporting requirements, then in addition to Seaside’s other
available remedies, for each 30 day period or portion thereof in which the
Company is not in compliance with its SEC reporting requirements, the Company
shall pay to Seaside such number of shares of Common Stock equal to 10% of the
number of Shares then held by Seaside.  Nothing herein shall limit
Seaside’s right to pursue all remedies available to it at law or in equity
including, without limitation, a decree of specific performance and/or
injunctive relief.

     

    4.3 Securities Laws Disclosure;
Publicity.  The Company shall, by 9:00 a.m. Eastern time on the
Trading Day following the date hereof file a Current Report on Form 8-K which
attaches as exhibits all agreements relating to this transaction, in each case
reasonably acceptable to Seaside, if Seaside is readily available to review such
Form 8-K in a timely manner, disclosing the material terms of the transactions
contemplated hereby.

     

    4.4 Shareholders Rights
Plan.  No claim will be made or enforced by the Company or, to
the knowledge of the Company, any other Person that Seaside is an “Acquiring
Person” under any shareholders rights plan or similar plan or arrangement in
effect or hereafter adopted by the Company, or that Seaside could be deemed to
trigger the provisions of any such plan or arrangement, by virtue of receiving
Securities under the Transaction Documents or under any other agreement between
the Company and Seaside.  The Company shall conduct its business in a
manner so that it will not become subject to the Investment Company Act of 1940,
as amended.

     

    4.5 Non-Public
Information.  The Company covenants and agrees that neither it
nor any other Person acting on its behalf will provide Seaside or its agents or
counsel with any information that the Company believes constitutes material
non-public information, unless prior thereto Seaside shall have executed a
written agreement regarding the confidentiality and use of such
information.  The Company understands and confirms that Seaside shall
be relying on the foregoing representations in effecting transactions in
securities of the Company.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    4.6 Indemnification of
Seaside.   Subject to the provisions of this Section 4.6,
the Company will indemnify and hold Seaside, Seaside’s Affiliates and their
respective directors, officers, shareholders, partners, members, employees and
agents (each, a “Seaside Party”)
harmless from any and all losses, liabilities, obligations, claims,
contingencies, damages, costs and expenses, including all judgments, amounts
paid in settlements, court costs and reasonable attorneys’ fees and costs of
investigation reasonably incurred in connection with defending or investigating
any suit or action in respect thereof to which any Seaside Party may become a
party under the Securities Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
liabilities, obligations, claims, contingencies, damages, costs and expenses
arise out of or are based on (a) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or the
Prospectus Supplement, or (b) the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, provided that the
Company will not be liable in any such case to the extent that any such
liability, obligation, claim, contingency, damage, cost or expense arises out of
or is based upon any untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by and regarding Seaside expressly for
inclusion therein.  If any action shall be brought against any Seaside
Party in respect of which indemnity may be sought pursuant to this Agreement,
such Seaside Party shall promptly notify the Company in writing, and the Company
shall have the right to assume the defense thereof with counsel of its own
choosing.  Any Seaside Party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Seaside Party
except to the extent that (i) the employment thereof has been specifically
authorized by the Company in writing, (ii) the Company has failed after a
reasonable period of time to assume such defense and to employ counsel or (iii)
in such action there is, in the reasonable opinion of such separate counsel, a
material conflict on any material issue between the position of the Company and
the position of such Seaside Party.  The Company will not be liable to
any Seaside Party under this Agreement (i) for any settlement by a Seaside Party
effected without the Company’s prior written consent, which consent shall not be
unreasonably withheld or delayed; or (ii) to the extent, but only to the extent,
that a loss, claim, damage or liability is attributable to any Seaside Party’s
breach of any of the representations, warranties, covenants or agreements made
by Seaside in this Agreement or in the other Transaction Documents.

     

    4.7 Listing of Common
Stock.  The Company hereby agrees to use best efforts to
maintain the listing of the Common Stock on a Trading Market.  The
Company further agrees, if the Company applies to have the Common Stock traded
on any other Trading Market, it will include in such application all of the
Shares and will take such other action as is necessary to cause all of the
Shares to be listed on such other Trading Market as promptly as
possible.  The Company will take all action reasonably necessary to
continue the listing and trading of its Common Stock on a Trading Market and
will comply in all respects with the Company’s reporting, filing and other
obligations under the bylaws or rules of the Trading Market.

     

    4.8 Right of First
Refusal.  From the date hereof until six months after the
Closing Date, neither the Company nor any Subsidiary shall issue shares of
Common Stock or Common Stock Equivalents without first offering Seaside the
right to purchase such Common Stock or Common Stock Equivalents on the same
terms proposed to be sold to any third party.

     

    4.9 Approval of Subsequent
Equity Sales.  The Company shall not issue shares of Common
Stock or Common Stock Equivalents if such issuance would require shareholder
approval pursuant to applicable rules of the Trading Market, unless and until
such shareholder approval is obtained.

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    4.10
Short
Sales.  Seaside covenants that neither it nor any affiliates
acting on its behalf or pursuant to any understanding with it will execute any
Short Sales during the period it owns any of the Shares.

     

    4.11
Prospectus
Supplement.  The Company will use its best efforts to file the
Prospectus Supplement as soon as practicable following the Closing Date, but in
any event agrees to make such filing on or before December 16,
2008.

     

    ARTICLE
V.

    MISCELLANEOUS

     

    5.1 Termination.  This
Agreement may be terminated by Seaside by written notice to the Company, if the
Closing has not been consummated on or before December 17, 2008, provided
however that no such termination will affect the right of any party to sue for
any breach by the other party (or parties).

     

    5.2 Fees and
Expenses.  Except as otherwise set forth in this Agreement and
as set forth in this Section 5.2 below, each party shall pay the fees and
expenses of its advisers, counsel, accountants and other experts, if any, and
all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this
Agreement.  The Company shall pay all stamp and other taxes and duties
levied in connection with the delivery of the
Securities.  Notwithstanding the foregoing, at the Closing, the
Company shall reimburse Seaside for the fees and expenses of its counsel, White
White & Van Etten PC, in an amount equal to $18,000.

     

    5.3 Entire
Agreement.  The Transaction Documents, together with the
exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and
schedules.

     

    5.4 Notices.  Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth on
the signature pages attached hereto prior to 5:30 p.m. (Eastern time) on a
Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number set
forth on the signature pages attached hereto on a day that is not a Trading Day
or later than 5:30 p.m. (Eastern time) on any Trading Day, (c) the second
Trading Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service, or (d) upon actual receipt by the party to whom such
notice is required to be given.  The address for such notices and
communications shall be as set forth on the signature pages attached
hereto.

     

    5.5 Amendments;
Waivers.  No provision of this Agreement may be waived or
amended except in a written instrument signed, in the case of an amendment, by
the Company and Seaside or, in the case of a waiver, by the party against whom
enforcement of any such waiver is sought.  No waiver of any default
with respect to any provision, condition or requirement of this Agreement shall
be deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of either party to exercise any right hereunder in
any manner impair the exercise of any such right.

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    5.6 Headings.  The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.  The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent, and no rules of
strict construction will be applied against any party.

     

    5.7 Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted
assigns.  The Company may not assign this Agreement or any rights or
obligations hereunder without the prior written consent of
Seaside.  Seaside may assign this Agreement or any rights or
obligations hereunder without the prior written consent of the
Company.

     

    5.8 No Third-Party
Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person, except as otherwise set forth in Section 4.6.

     

    5.9 Governing
Law.  All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law
thereof.  The parties hereby waive all rights to a trial by
jury.  If either party shall commence an action or proceeding to
enforce any provisions of the Transaction Documents, then the prevailing party
in such action or proceeding shall be reimbursed by the other party for its
attorneys’ fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such action or proceeding.

     

    5.10
Survival.  The
representations and warranties herein shall survive the Closing and delivery of
the Shares.

     

    5.11
Execution.  This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart.  In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.

     

    5.12 Severability.  If
any provision of this Agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and the
parties will attempt to agree upon a valid and enforceable provision that is a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    5.13
Rescission and
Withdrawal Right.  Notwithstanding anything to the contrary
contained in (and without limiting any similar provisions of) the Transaction
Documents, whenever Seaside exercises a right, election, demand or option under
a Transaction Document and the Company does not timely perform its related
obligations within the periods therein provided, then Seaside may rescind or
withdraw, in its sole discretion from time to time upon written notice to the
Company, any relevant notice, demand or election in whole or in part without
prejudice to its future actions and rights.

     

    5.14
Replacement of
Securities.  If any certificate or instrument evidencing any
Securities is mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon cancellation
thereof, or in lieu of and substitution therefor, a new certificate or
instrument, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable
indemnity, if requested.  The applicants for a new certificate or
instrument under such circumstances shall also pay any reasonable third-party
costs associated with the issuance of such replacement Securities.

     

    5.15
Remedies.  In
addition to being entitled to exercise all rights provided herein or granted by
law, including recovery of damages, Seaside and the Company will be entitled to
specific performance under the Transaction Documents.  The parties
agree that monetary damages may not be adequate compensation for any loss
incurred by reason of any breach of the obligations set forth herein and hereby
agree to waive in any such action for specific performance of any such
obligation the defense that a remedy at law would be adequate.

     

    5.16
Payment Set
Aside.  To the extent that the Company makes a payment or
payments to Seaside pursuant to any Transaction Document or Seaside enforces or
exercises its rights thereunder, and such payment or payments or the proceeds of
such enforcement or exercise or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, recovered from, disgorged
by or are required to be refunded, repaid or otherwise restored to the Company,
a trustee, receiver or any other person under any law (including, without
limitation, any bankruptcy law, state or federal law, common law or equitable
cause of action), then to the extent of any such restoration the obligation or
part thereof originally intended to be satisfied shall be revived and continued
in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.

     

    5.17
Construction.
The parties agree that each of them and/or their respective counsel has reviewed
and had an opportunity to revise the Transaction Documents and, therefore, the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of the Transaction Documents or any amendments hereto.

     

    (Signature
Pages Follow)

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

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

     

    
      
        
          
            
              
                	
                        Neuralstem,
      Inc.

                      	 
      	
                        Address for Notice:

                      
	 	 	 
	
                        By:

                      	 
      	 
      	
                        9700
      Great Seneca Highway

                      
	 
      	
                        Name:

                        Title:

                      	 
      	
                        Rockville,
      MD 20850

                        Attention:  President

                      
	 	 	 
	
                        With
      a copy to (which shall not constitute notice):

                      	 
      	
                        The
      Law Offices of Raul Silvestre

                        &
      Associates, APLC

                        21200
      Via Colinas, Suite 200

                        Westlake
      Village, CA, 91362

                        Attention:  Raul
      Silvestre,
Esq.

                      

              

            

          

        

      

    

    

    
      
        
          
            
              
                
                  
                    	
                            Seaside
      88, LP

                          	 
      	
                            Address for Notice:

                          
	 	 	 
	
                            By:

                          	 
      	 
      	
                            750
      Ocean Royale Way

                          
	 
      	
                            Name:

                            Title:

                          	 
      	
                            Suite
      805

                            North
      Palm Beach, FL 33408

                            Attention:  William
      J. Ritger and

                            Denis
      M. O’Donnell, M.D.

                          
	 	 	 
	
                            With
      a copy to (which shall not constitute notice):

                          	 
      	
                            White
      White & Van Etten PC

                            55
      Cambridge Parkway

                            Cambridge,
      MA 02142

                            Attention:  David
      A. White,
Esq.

                          

                  

                

              

            

          

        

      

    

    

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

    

    DWAC
Instructions for Common Stock:

    

    DTC # -
0571 -  

    Account
number - G53-1348923

    

    Subscription
Amount: $2,000,000.00

    

    EIN
Number:  [PROVIDE
THIS UNDER SEPARATE COVER]EMPLOYMENT
AGREEMENT

    

    THIS AGREEMENT is entered in
between Freedom Financial Group, Inc., a Delaware corporation (hereinafter
“Company”) and Jerald L. Fenstermaker of Springfield, Missouri, (hereinafter
“Employee”) and on this 16th day of December, 2008, agree as
follows:

    

    WITNESSETH:

    

    WHEREAS, Employee is presently
President of Company;

    

    WHEREAS, Employee is presently
employed under an Employment Agreement dated the 16th day of
August, 2007, and ending January 9, 2009;

    

    WHEREAS, Company and Employee
desire to enter into a new agreement for employment of Employee for a period
beginning on December 1, 2008, and ending November 30, 2011, and thereby
rescinding the Employment Agreement dated August 16, 2007;

    

    NOW, THEREFORE, in
consideration of the covenants and agreements as hereinafter set forth, the
parties agree as follows:

    

    1.           Employment.  Subject
to the terms and conditions of this Agreement, effective as of December 1, 2008,
the date of this Agreement, the Company hereby employs Employee to perform the
duties described in Section 4 hereof.

    

    2.           Term of
the Agreement.  The term of this Agreement is for a period
beginning on December 1, 2008 (the “Effective Date”) and ending November 30,
2011, subject to earlier termination as provided herein.  Employee
agrees that this Agreement supersedes and replaces his Employment Agreement
dated August 16, 2007, as amended, and extended.

    

    3.           Compensation
of Employee:

    

    (a)           Base Compensation:  
 Employee will be paid an annual base salary of $200,000.00 a year, payable
in equal bi-weekly payments which shall be made on the same day and date as
other employees of Company are paid, and prorated for any partial pay
period.  Annual compensation of $200,000.00 is gross
compensation.  Employee’s base salary is subject to annual review by
the Board of Directors of the Company.  Company will deduct therefrom
the normal and usual deductions for taxes, insurance and deductions of a similar
nature.

    

    (b)           Incentive
Compensation:      In addition to Base
Compensation, Employee will be entitled to receive the incentive compensation
provided in the Management Compensation Plan adopted effective April 9, 2008, as
amended.

    

    4.           Duties of
Employee.  Employee shall, during the term hereof, have the
title of President of the Company, and shall perform such duties as and have
such authority as are customary and usual for such position.  Without
limiting the generality of the foregoing:

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    

    (a)           Full Time.  Employee
shall devote Employee’s full working time during regular and normal business
hours to the business of the Company and shall, in accordance with professional
standards generally observed by senior management of the Company, seek to
maximize the financial success of the Company’s business and to optimize the
goodwill and reputation of the Company within its industry and with its
customers.  Nothing contained herein shall be construed to prohibit
Employee from engaging in other businesses so long as such business does not
compete with the business of the Company or conflict with the Employee’s duties
hereunder;

    

    (b)           Reporting.  Employee
shall report to the Board of Directors of the Company.

    

    5.           Expenses.  Employee
will be authorized to incur reasonable and necessary expenses in connection with
the discharge of Employee’s duties and in promoting the business of the
Company.  The Company, according to its usual practices, will
reimburse Employee for all such reasonable and necessary expenses upon
presentation of a properly itemized account of such expenditures, setting forth
the business reasons for such expenditures.

    

    6.           Other
Benefits. Employee shall be
entitled to pension, profit sharing and fringe benefits, such as
hospitalization, medical, life and other insurance benefits, sick pay and
short-term disability, and paid time off including vacation, as are provided for
other management employees of the Company and approved by the Board of Directors
of the Company (the “Fringe Benefits”).  Employee acknowledges that
the Company shall have the right to change the Fringe Benefits from time to
time, and such changes shall not be deemed a termination of employment by the
Company.

    

    7.           Termination
by the Company Due to Death, Disability, Cause or Other.

    

    (a)           Death,
Disability.  In the event of Employee’s death during the Term,
this Agreement and the employment of Employee hereunder shall terminate
automatically as of the date of death, except that Sections 9, 10, 11, 12, 13,
14, 15, and 16 shall survive such termination.  In the event of
Employee’s Disability (as hereinafter defined) for ninety (90) consecutive
calendar days or one hundred and twenty (120) calendar days in the aggregate
during any consecutive twelve (12) months of the Term, the Company shall have
the right, by written notice to Employee, to terminate this Agreement and the
employment of Employee hereunder as of the date of such notice, except that
Sections 9, 10, 11, 12, 13, 14, 15, and 16 shall survive such
termination.  “Disability” for the purposes of this Agreement shall
mean Employee’s physical or mental disability so as to render Employee incapable
of carrying out substantially all of Employee’s duties under this
Agreement.  In the event of termination pursuant to this subsection
(a), the Company shall not be under any further obligation to Employee hereunder
except to pay Employee (or Employee’s estate) within thirty (30) days of such
termination (i) salary, declared bonuses and benefits (including paid time off
pay) accrued and payable up to the date of termination, (ii) reimbursement for
expenses accrued and payable under Section 5 hereof through the date of
termination.

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    (b)           Cause.  The Company
shall have the right to discharge Employee and terminate this Agreement for
Cause (as hereinafter defined) by written notice to Employee and this Agreement
shall be deemed terminated as of the date of such notice, except that Sections
9, 10, 11, 12, 13, 14, 15, and 16 shall survive such termination.  For
the purpose of this Agreement, “Cause” shall mean (i) conviction of, or a plea
of nolo contendere to, a felony, (ii) substantial neglect, substantial
misconduct or substantial failure (including conflict of interest) in the
carrying out of Employee’s duties in accordance with Section 4 hereof, (iii) the
engaging by Employee in a material act or acts of dishonesty adversely affecting
the Company, any affiliate or any client of the Company, or (iv) habitual
drunkenness or the illegal use of drugs by Employee.  In the event of
a termination pursuant to this subsection (b), the Company shall not be under
any further obligation to Employee hereunder, except to pay Employee within
thirty (30) days of such termination (i) salary, declared bonuses and benefits
(including paid time off pay) accrued and payable up to the date of termination,
and (ii) reimbursement for expenses accrued and payable under Section 5 hereof
through the date of termination.

    

    (c)           Termination by the Company Other Than
Due to Death, Disability or Cause.  This Agreement and the
employment of Employee hereunder may be terminated by the Company other than
pursuant to subsection (a) or subsection (b) by giving thirty (30) days prior
written notice to the Employee at any time, and such termination shall be
effective as of the date of termination stated in such notice, except that
Sections 9, 10, 11, 12, 13, 14, 15, and 16 shall survive such
termination.  In the event of a termination pursuant to this
subsection (c), the Company shall not be under any further obligation to
Employee hereunder, except   to pay Employee within thirty (30)
days of such termination (i) salary, declared bonuses and benefits (including
paid time off pay) accrued and payable up to the date of termination, (ii)
reimbursement for expenses accrued and payable under Section 5 hereof through
the date of termination, and (iii) Severance Benefits as defined
below.

    

    (d)           Severance
Benefits.  For purposes of this Agreement, “Severance Benefits”
shall mean (i) The sum of $ 5,000.00 a month (Severance Base Salary) for each
month that remains under the term of this agreement, which shall be payable to
Employee on the first day of each month beginning with the first month following
the month in which the employee was terminated; with the month in which the
employee is terminated being pro-rated; and (ii) continuation of all of
Employee’s Fringe Benefits, except vacation pay, for the remaining term of this
Agreement.  To the extent any of the Fringe Benefits are not readily
available to the Employee following termination of employment, the monthly cost
thereof, except vacation  pay, incurred by Company prior to
termination shall be paid to Employee at the same time as the Severance Base
Salary.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    8.           Termination
by the Employee.  The Employee shall have the right to
terminate Employee’s employment under this Agreement by giving ninety (90) days
prior written notice to the Company at any time, and such termination shall be
effective as of the date of termination stated in such notice, provided that the
Company may elect to accelerate the date of termination. Sections 9, 10, 11, 12,
13, 14, 15 and 16 shall survive such termination.  In the event
Employee terminates employment under this Section 9, the Company shall not be
under any further obligation to Employee hereunder, except to promptly pay
Employee (a) salary, declared bonuses and benefits (including vacation pay)
accrued and payable up to the date of termination, and (b) reimbursement for
expenses accrued and payable under Section 5 hereof through the date of
termination.

     

    9.           Non-Disclosure.  Employee
agrees that during and after the expiration of the Term, any confidential
information concerning the Company or its businesses, or customers of the
Company (including, without limitation, trade secrets, plans, processes,
customer lists, customer names and all other information relating to customers,
price lists, pricing policies, any and all financial information, employee
lists, prospect lists, contracts and compilations of information, records and
specifications) which comes to Employee in the course of Employee’s employment
and which is not (independent of disclosure by Employee) public knowledge or
general knowledge in the trade, shall remain confidential and, except as
required by legal process, may not be used or made available for any purpose
except as necessary in the performance of Employee’s duties
hereunder.  Employee agrees that, upon termination of Employee’s
employment hereunder, Employee will promptly deliver to the Company all
materials constituting confidential information (including all copies thereof
that are in the possession of, or under the control of, the Employee), and
Employee will not make or retain any copies or extracts of such materials in any
form.

    

    10.           Governing
Law and Choice of Venue.  This Agreement shall be governed by
and interpreted in accordance with the laws of the State of
Missouri.  Unless arbitration is required, the parties hereto agree to
submit to the jurisdiction of the courts of Missouri for the purposes of
enforcement of this Agreement or any action that may arise relating to the
employment relationship or the enforcement of this Agreement between Employee
and Company.  The parties further agree that any such action must be
brought in a court of competent jurisdiction sitting in the State of
Missouri.

    

    11.           Severability.  Each
of the sections contained in this Agreement shall be enforceable independently
of every other section in this Agreement, and the invalidity or unenforceability
of any section shall not invalidate or render unenforceable any other section
contained in this Agreement. Employee acknowledges that the restrictive
covenants contained in this Agreement are a condition of this Agreement and are
reasonable and valid in all respects.  If any court determines that
any of the covenants contained herein, or any part of any of them, is invalid or
unenforceable, the remainder of such covenants and parts thereof shall not
thereby be affected and shall be given full effect, without regard to the
invalid portion.

    

    12.           Survival
of Certain Provisions.  Any termination or expiration of this
Agreement or suspension or termination of Employee's employment by Company
notwithstanding, the provisions of this Agreement that are intended to continue
and survive shall so continue and survive. This Agreement and all rights
hereunder shall inure to the benefit of the parties hereto and to their
respective heirs, assigns, and legal representatives.

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    13.           Cumulative
Remedies and Fees.  All rights and remedies of both parties
shall be cumulative and each party shall have the right to obtain specific
performance against the other for the enforcement of this
Agreement.  Each party shall pay their own attorney fees and expenses
in any proceeding commenced under this Agreement.

    14.           Equitable
Relief.  Employee acknowledges that, due to the unique nature
of the Confidential Information, Inventions, and Work Product, there may be no
adequate remedy at law for any breach of the obligations hereunder, and that any
such breach may allow Employee or third parties to unfairly compete with
Company.  For that reason, it is mutually agreed that upon any such
breach or any threat thereof, Company shall be entitled to seek appropriate
equitable relief in addition to whatever remedies it might have at law in
connection with any breach or enforcement of Employee’s obligations hereunder or
the unauthorized use or release of any Confidential Information, Inventions, or
Work Product.  Employee will notify Company in writing immediately
upon the occurrence of any such unauthorized release or other breach of which
Employee becomes aware.

    

    15.           Mediation
and Arbitration.  The parties agree that any dispute or claim
arising out of or relating to this Agreement or any termination of the
Employee’s employment, shall be settled by mediation or by final and binding
arbitration in accordance with the Employment Arbitration Rules and Mediation
Procedures of the American Arbitration Association ("AAA").  Judgment
upon any award entered in the arbitration proceeding may be entered in any court
having jurisdiction thereof.  Mediation and arbitration proceedings
shall be private and confidential.  Any dispute regarding the
enforcement or interpretation of this Agreement shall be first submitted to
mediation, and, if mediation is unsuccessful, to arbitration.  The
mediation and the arbitration shall be in accordance with the Employment
Arbitration Rules and Mediation Procedures of the AAA.

    

    The arbitration shall take place in
Springfield, Missouri.  All costs and expenses of the arbitration
(e.g. arbitrator's fee) shall be borne equally by the parties.  Each
party shall pay their own attorney's fees and litigation expenses and all other
costs and expenses they incur arising out of or related to the
arbitration.

    

    16.           Prior
Agreements and Amendments.  Employee hereby acknowledges
receipt of a signed counterpart of this Agreement and acknowledges that it is
Employee’s entire agreement with Company concerning the subject matter, thereby
canceling, terminating and superseding any previous oral or written
understandings or agreements with Company or any officer or representative of
Company.  No amendment or modification of this Agreement shall be
valid or binding upon Company unless made in writing, approved by the Board of
Directors of the Company and signed by an officer of Company.  No
amendment or modification of this Agreement shall be valid or binding upon
Employee unless made in writing and signed by him.

    

    17.           Waiver.  Employee’s or
Company’s failure to insist upon strict compliance with any provision hereof or
any other provision of this Agreement or the failure to assert any right
Employee or Company may have hereunder shall not be deemed to be a waiver or
subsequent breach of such provision or right or any other provision or right of
this Agreement.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

    18.           Notices.  Any notice
required by this Agreement or given in connection with it, shall be in writing
and shall be given to the appropriate party by personal delivery, or by
certified mail, postage prepaid, or recognized overnight delivery
service.

    

    If to
Company:

    

    Freedom
Financial Group, Inc.

    3058 East
Elm St.

    Springfield,
MO 65802

    

    If to
Employee:

    

    Jerald L.
Fenstermaker

    _________________

    _________________

    

    WE
UNDERSTAND THAT THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH
CAN BE ENFORCED BY THE PARTIES.

    

    IN
WITNESS WHEREOF, the parties have duly executed this Agreement under seal as of
the day and year first above written.

     

    
      
        
          
            
              
                	
                        COMPANY:

                      
	 
      
	
                        FREEDOM
      FINANCIAL GROUP, INC.

                      
	
                        a
      Delaware corporation

                      
	 
      	 
      
	 
      	 
      
	
                        By:

                      	
                        /s/Robert Chancellor

                      
	
                        Name:

                      	
                        Robert
      Chancellor

                      
	
                        Title:

                      	
                        Chairman
      – Compensation Committee

                      
	 
      	 
      
	 
      	 
      
	
                        EMPLOYEE:

                      
	 
      	 
      
	 
      	 
      
	 	
                        /s/Jerald L.  Fenstermaker
      

                      
	
                        Jerald
      L.
Fenstermaker

                      

              

            

          

        

      

    

     

    
      
         

      

      
        6

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