EQUITY INVESTMENT AND SHARE PURCHASE AGREEMENT
EQUITY
INVESTMENT AND
SHARE
PURCHASE AGREEMENT
This
Equity Investment and Share Purchase Agreement (the 'Agreement') originally
effective June 22, 2005, (the "Closing Date"), is hereby amended and restated
this 15th
day of
September, 2005 by and between REGAL ONE CORPORATION, a corporation organized
under the laws of Florida ("▇▇▇▇"), having its principal offices at ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and NEURALSTEM, INC.,
a
Delaware corporation ("NEURALSTEM"), having its principal offices at ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
RECITALS:
NEURALSTEM
is a development stage company engaged in stem cell research and the therapeutic
application of stem cells; and
To
further its business plans and
raise
needed capital, NEURALSTEM is seeking to sell its common shares in a private
placement and to accelerate the registration of its shares for public trading
through an SB-2 Registration filing with the SEC, and
It
is the
intention of the parties hereto that ▇▇▇▇ shall either directly or through
its
assigns acquire equity interests in NEURALSTEM for a minimum of $500,000 in
cash, payable according to a pre-agreed share purchase schedule and other good
and valuable consideration, and
The
boards of directors of ▇▇▇▇ and NEURALSTEM deem it to be in the best interest
of
▇▇▇▇ and NEURALSTEM to proceed with these actions.
NOW,
THEREFORE, in consideration of the mutual covenants,
agreements,
representations and warranties contained in this Agreement, the parties hereto
agree as follows:
SECTION
1. PURCHASE
OF SHARES AND OTHER CONSIDERATIONS
1.
Purchase of Shares
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1.1
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On
or before September 20, 2005, ▇▇▇▇ or other investors facilitated
by ▇▇▇▇,
shall purchase between $200,000 and $500,000 of NEURALSTEM common
stock at
a price of fifty cents per share, following a forward split of NEURALSTEM
common stock to create 16,607,588 issued and outstanding
shares
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1.2
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Upon
the closing of this Agreement, NEURALSTEM will transfer to ▇▇▇▇ 1,845,287
shares (10% of the total of 18,452,875 shares which will then be
shown as
issued and outstanding at
the closing), in exchange for facilitating and paying for the SB-2
Registration and for arranging investments in NEURALSTEM
by the investment community.
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| 1.3 |
In
addition, ▇▇▇▇ will be granted a warrant to purchase 1,000,000 shares
of
NEURALSTEM at a purchase price of $5.00 per share; this warrant will
be
valid for ten years from the earlier of i) the date the SB-2 statement
is
effective, or ii) December 31, 2006. NEURALSTEM agrees to ▇▇▇▇▇ ▇▇▇▇
unlimited piggy back registration. The warrants shall also contain
a
provision making them callable by the Company in the event that the
shares
trade at a price of at least $6.00 per share for ten (10) consecutive
trading days.
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1.4
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Prior
to the date of filing the registration, ▇▇▇▇ or other investors
facilitated by ▇▇▇▇ intend to invest an overall minimum amount of
$3,000,000 in NEURALSTEM stock.
The
purchase price for shares purchased after those described in Section
1.1
is anticipated to be $1.00 per share; however,
both parties agree that NEURALSTEM will sell these shares at a lower
price
if required, to achieve at least $2,000,000 of investment prior to
the
SB-2 filing.
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1.5
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Restricted
Securities. The
Common Stock issued by NEURALSTEM has not been registered under
the
Securities Act of 1933, as amended (the “Securities Act"), and may not be
re-sold unless the resale thereof is registered under the Securities
Act
or an exemption from such registration is available. Each certificate
representing the Common Stock will have a legend thereon in substantially
the following form:
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|
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THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT''),
OR ANY
APPLICABLE STATE LAW. THEY MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR PLEDGED UNLESS REGISTERED UNDER THE SECURITIES ACT AND ANY APPLICABLE
STATE LAW OR PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION
REQUIREMENTS.
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1.6
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Board
of Directors. ▇▇▇▇
shall have the right, but not the obligation, to occupy a seat on
the
Board of Directors of NEURALSTEM for
one three-year term.
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1.7
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Employment
Contracts. Other
Consideration. ▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇. ▇▇▇▇ ▇▇▇▇ will sign seven year
employment contracts with non-compete
provisions.
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SECTION
2. REPRESENTATIONS
AND WARRANTIES OF NEURALSTEM AND SHAREHOLDERS
NEURALSTEM
hereby represents and
warrants
on or before the First Closing date as follows:
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2.1
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Organization
and Good Standing. NEURALSTEM
is an entity, duly organized, validly existing and in good standing
under
the laws of Delaware. The company has the corporate power and authority
to
carry on its business as presently conducted, and is qualified to
do
business in all jurisdictions where the failure to be so qualified
would
have a material adverse effect on its
business.
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2.2
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Corporate
Authority. NEURALSTEM
has the power to operate as a corporation and to perform any corporate
obligations hereunder. The execution and delivery of this Agreement
by
NEURALSTEM, and the consummation of the transactions contemplated
hereby,
do not violate any State, Governmental or corporate restrictions
governing
these transactions, The execution and performance of this Agreement,
will
not constitute a breach of any agreement, indenture, mortgage, license
or
other instrument or document to which NEURALSTEM is a party and will
not
violate any judgment, decree, order, writ, rule, statute, or regulation
applicable to NEURALSTEM or its properties. The execution and performance
of this Agreement will not violate or conflict with any provision
of the
laws of the State of Delaware.
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2.3
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Capitalization
and the NEURALSTEM Shares. The
total authorized capital of NEURALSTEM consists of 75,000,000 shares
of
common stock, of which 18,452,875 shares are issued (including ▇▇▇▇
fee of
1,845,287 shares) and outstanding and 7,000,000 shares of preferred
stock,
of which none is issued and outstanding. There are no options,
warrants, or other rights to equity interests outstanding other than
those
disclosed in the accompanying option table. NEURALSTEM reserves the
right
to implement stock compensation plans and traditional ESOP programs
for
new additions to its Board of Directors, Advisory Board members,
and key
executive hires.
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2.4
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Receipt
of Corporate Information, Independent Investigation,
Access.
▇▇▇▇ information is available to NEURALSTEM via the ▇▇▇▇▇ website.
NEURALSTEM acknowledges that they, in making the decision to go forward
as
set forth in this Agreement, have relied upon independent investigations
made by them or their representatives, if any, and they have been
given
access to and the opportunity to examine all material contracts and
documents relating to this Agreement and an opportunity to ask questions
of, and to receive information from, ▇▇▇▇ or any person acting on
its
behalf concerning the terms and conditions of this Agreement. NEURALSTEM
and its advisors, if any, have received complete and satisfactory
answers
to any such inquiries.
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| 2.5 |
Financial
Statements: Books and Records.
NEURALSTEM will provide unaudited financial statements of the Company
as
of June 30, 2005 (the NEURALSTEM Financial Statements"). These NEURALSTEM
Financial Statements will be attached as Schedule 2.5 and shall fairly
represent the financial position of NEURALSTEM at those dates and
the
results of their operations for the periods then ended. The NEURALSTEM
Financial Statements will be prepared in accordance with generally
accepted GAAP accounting standards.
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2.6
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Approvals.
No
approval, authorization, consent, order or other action of, or
filing
with, any person, firm or corporation or any court, administrative
agency
or other governmental authority is required in connection with the
execution and delivery of this Agreement by
NEURALSTEM.
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| 2.7 |
No
Material Adverse Changes. Since
June 30, 2005 there has not been:
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(i)
any
material adverse change in the financial position of NEURALSTEM except changes
arising in the ordinary course of business, which changes will in no event
materially and adversely affect the financial position of
NEURALSTEM;
(ii)
any
damage, destruction or loss materially affecting the assets, prospective
business, operations or condition (financial or otherwise) of NEURALSTEM whether
or not covered by insurance;
(iii)
any
declaration, setting aside or payment of any dividend or distribution with
respect to any redemption or repurchase of NEURALSTEM capital
interests;
(iv)
any
sale of an asset (other than in the ordinary course of business) or any mortgage
or pledge by NEURALSTEM of arty properties or assets; Or
(v)
adoption of any pension, profit sharing, retirement, stock bonus, stock option
or similar plan, or arrangement, except those listed in the Schedule attached
to
this Agreement and/or delivered to ▇▇▇▇.
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2.8
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No
Breach. The
execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby will
not:
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(i)
violate any provision of the Articles of Incorporation or the Bylaws of
NEURALSTEM;
(ii)
violate, conflict with or result in the breach of any of the terms of, result
in
a material modification of, otherwise give any other contracting party the
right
to terminate, or constitute (or with notice or lapse of time, or both
constitute) a default under any contract or other agreement to which NEURALSTEM
is a party or by or to which it or any of its assets or properties may be bound
or subject;
(iii)
violate any order, judgment, injunction, award or decree of any court,
arbitrator or governmental or regulatory body against, or binding upon,
NEURALSTEM or upon the properties or business of NEURALSTEM; or
(iv)
violate any statute,
law or
regulation of any jurisdiction applicable to the transactions contemplated
herein which could have a material, adverse effect on the business or operations
of NEURALSTEM.
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2.9
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Actions
and Proceedings.
NEURALSTEM
is not a
party to any material pending litigation or, to the knowledge of
the
shareholders, after reasonable inquiry, any governmental investigation
or
proceeding not reflected in the NEURALSTEM Financial Statements and,
to
their best knowledge, no material litigation, claims, assessments
or
non-governmental proceedings are threatened against
NEURALSTEM.
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| 2.10 |
Operations
of NEURALSTEM. From
the date of the Financial Statement through the Date of Closing,
NEURALSTEM has not and will not, outside of the ordinary course of
business, have:
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(i)
incurred any indebtedness or borrowed money; except as disclosed in the exhibits
hereto,
(ii)
declared or paid any dividend or declared or made any distribution of any kind
to any Shareholder, or made any direct or indirect redemption, retirement,
purchase or other acquisition of any interests in its capital
structure;
(iii)
made any loan or advance to any shareholder, officer, director, employee,
consultant, agent or other representative or made any other loan or
advance;
(iv)
disposed of any assets of NEURALSTEM;
(v)
materially increased the annual level of compensation of any executive employee
of NEURALSTEM;
(vi)
increased, terminated, amended or otherwise modified any plan for the benefit
of
employees of NEURALSTEM;
(vii)
issued any equity securities or rights to acquire such equity securities except
as listed in the attached Schedule; or entered into or modified any contract,
agreement or transaction, outside of the ordinary business of the
Company.
SECTION
3.
COVENANTS
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3.1
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Corporate
Examinations and Investigations. Prior
to the Closing Date, the parties acknowledge that they have been
entitled,
through their employees and representatives, to make such investigation
of
the assets, properties, business and operations, books, records
and
financial condition of the other as they each may reasonably require.
No
investigations, by a party hereto shall, however, diminish or waive
any of
the representations, warranties, covenants or agreements of the
party
under this Agreement
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3.2
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Further
Assurances.
The parties shall execute such documents and other papers and take
such
further actions as may be reasonably required or desirable to carry
our
the provisions hereof and the transactions contemplated hereby. Each
such
party shall use its best efforts to fulfill or obtain the fulfillment
of
the conditions to the Closing, including, without limitation, the
execution and delivery of any documents or other papers, the execution
and
delivery of which are necessary or appropriate to the
Closing.
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3.3
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Confidentiality.
In
the event the transactions contemplated by this Agreement are not
consummated, ▇▇▇▇ and NEURALSTEM agree to keep confidential any
information disclosed to each other in connection therewith for a
period
of one (1) year from the date hereof; provided however, such obligation
shall not apply to information
which:
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(i)
at
the time of the disclosure was public knowledge;
(ii)
after the time of disclosure becomes public knowledge (except due to the action
of the receiving party); or
(iii)
the
receiving party had within its possession at the time of disclosure: or
(iv)
is
ordered disclosed by a Court of proper jurisdiction
SECTION
4. SURVIVAL OF REPRESENTATIONS AND WARRANTEES
Notwithstanding
any right of either party to investigate the affairs of the other party
and its
Shareholders, each party has the right to rely fully upon representations,
warranties, covenants and agreements of the other party and its Shareholders
contained in this Agreement or in any document delivered to one by the other
or
any of their representatives, in connection with the transactions contemplated
by this Agreement. All such representations, warranties, covenants and
agreements shall survive the execution and delivery hereof and the closing
hereunder for one year following the Closing.
SECTION
5. MISCELLANEOUS
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5.1
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Waivers. The
waiver of a breach of this Agreement or the failure of any party
hereto to
exercise any right under this Agreement shall in no way constitute
waiver
as to future breach whether similar or dissimilar in nature or as
to the
exercise of any further right under this
Agreement.
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| 5.2 |
Amendment.
This Agreement may he amended or modified only by an instrument of
equal
formality signed by the parties
or the duly authorized representatives of the respective
parties.
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| 5.3 |
Assignment.
This Agreement is not assignable except by operation of
law.
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| 5.4 |
Notice.
Until otherwise specified in writing, the mailing addresses and fax
numbers of the parties of this Agreement shall be as
follows;
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TO:
REGAL
ONE CORPORATION:
c/o
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
▇▇
▇▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
Email;
▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
with
copy
to;
▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇) ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ 9006.1
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
Email:
venturelaw@gmail,com
To:
NEURALSTEM:
▇▇▇▇▇▇▇
▇▇▇▇, President
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Email:
▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
Any
notice or statement given under this Agreement shall be deemed to have been
given if sent by
registered mail addressed to the other party at the address indicated above
or
at such other address which shall have been furnished in writing to the
addressor.
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5.5
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Governing
Law.
This Agreement shall be construed, and the legal relations between
the
parties determined, in accordance with the laws of the State of
California, thereby precluding any choice of law rules which may
direct the application of the laws of any other
jurisdiction.
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5.6
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Publicity.
No
publicity release or announcement concerning this Agreement or the
transactions contemplated hereby shall be issued by either party
hereto at
any time from the signing hereof without advance approval in writing
of
the form
and substance by the other party.
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5.7
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Entire
Agreement. This
Agreement and the collateral agreements executed in connection with
the
consummation of the transactions contemplated herein contain the
entire
agreement among the parties with respect to the purchase and issuance
of
the shares and options and related transactions, and supersede all
prior
agreements, written or oral,
with respect thereto.
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| 5.8 |
Headings.
The headings in this Agreement are for reference purposes only and
shall
not in any way affect the
meaning or interpretation of this
Agreement.
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| 5.9 |
Severability
of Provisions.
The invalidity or unenforceability of any term, phrase, clause, paragraph,
restriction, covenant, agreement or provision of this Agreement shall
in
no way affect the validity or enforcement of any other provision
or any
part thereof.
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| 5.10 |
Counterparts.
This Agreement may be executed in any number of counterparts, each
of
which when so executed, shall constitute an original copy hereof,
but all
of which together shall consider but one and the same document.
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| 5.11 |
Binding
Effect.
This Agreement shall be binding upon the parties hereto and inure
to the
benefit of the parties, their respective heirs, administrators, executors,
successors ad assigns.
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| 5.12 |
Tax
Treatment. Each
party acknowledges that they each have been represented by their
own tax
advisors in connection ,
in
connection with this transaction; that none of them has made a
representation or warranty to any of the other parties with respect
to the
tax treatment accorded this transaction, or the effect individually
or
corporately on any party under the applicable tax laws, regulations,
or
interpretations; and that no opinion of counsel or private revenue
ruling
has been obtained with respect to the effects of this transaction
under
the Code.
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| 5.13 |
Press
Releases.
The parties will mutually agree as to the wording
and timing of any informational releases concerning this transaction
prior
to and through Closing.
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IN
WITNESS WHEREOF, the parties
have executed this Agreement on the date first above written:
| REGAL ONE CORPORATION | NEURALSTEM, INC. | ||||||
| By: |
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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By: |
/s/ I. ▇▇▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇▇▇
▇▇▇▇▇▇,
President/CEO
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I.
▇▇▇▇▇▇▇ ▇▇▇▇
President/CEO
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