CONVERTIBLE NOTE PURCHASE AGREEMENT

This Convertible Note Purchase Agreement (this "Agreement") is made as of December __, 2008 between Applied NeuroSolutions, Inc., a Delaware corporation (the "Company"), and each of the purchasers listed on Schedule I hereto (each a “Purchaser” and, collectively, the "Purchasers").

The Company and the Purchasers hereby agree as follows:

1.1                       Authorization of Issuance and Sale of the Units .  Prior to the Closing (as defined herein), the Company will have authorized the issuance and sale of 12% Convertible Promissory Notes up to an aggregate principal amount of $2,000,000 (the “Notes”).  The Notes will be in the form annexed hereto as Exhibit A .

1.2                       Sale and Purchase of the Units .  At the Closing, subject to the terms and conditions hereof and in reliance upon the representations, warranties and agreements contained herein, each of the Purchasers will purchase the Note(s) in the principal amount(s) set forth opposite such Purchaser’s name on Schedule I annexed hereto at a purchase price set forth opposite such Purchaser’s name on Schedule I annexed hereto (the “Purchase Price”).

2.1                       Closing .  The Closing of the sale of the Notes will occur on December 31, 2008 or on such later date as the parties may mutually determine (the “Closing”).

2.2                       Payment and Delivery .  At the Closing, (a) the Purchasers will pay to the Company by check or wire funds transfer the Purchase Price set forth opposite such Purchaser’s name on Schedule I annexed hereto, and (b) the Company will deliver to the Purchasers the Note(s) in the principal amount(s) set forth opposite each such Purchasers name on Schedule I annexed hereto registered in such name or names as each such Purchaser may reasonably designate.

The Company hereby represents and warrants to the Purchasers that:

3.1                       Corporate Power, Qualification and Standing .  The Company is validly existing and in good standing under the laws of the State of Delaware and is qualified to transact business in each jurisdiction in which its ownership of property or conduct of activities requires such qualification.  The Company has all requisite corporate power and authority to enter into this Agreement, to sell the Notes, to execute and deliver the Notes and to carry out and perform its other obligations under this Agreement and under the Notes.

3.2                       Authorization ; No Conflict ; Enforceability .  Execution and delivery of this Agreement, the Notes, the issuance and sale of the Notes and the issuance of the Common Stock upon the conversion of the Notes and/or the payment of interest on the Notes (collectively, the “Note Shares”) have been duly authorized by all necessary corporation action of the Company.  Performance by the Company of its obligations under this Agreement and the Notes will not conflict with or violate the charter documents or bylaws of the Company, or conflict with or violate, in any material respect, (i) any indenture, loan agreement, lease, mortgage or other agreement binding on the Company, (ii) any order of a court or administrative agency binding on the Company, or (iii) any applicable law or governmental regulation, the effect of any of which would have a material adverse effect on the Company or materially impair or restrict the Company's power to perform its obligations as contemplated hereby.  This Agreement and the Notes are valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as enforcement thereof may be limited by bankruptcy, insolvency, fraudulent conveyance and transfer, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (regardless of whether the issue of enforceability is considered in a proceeding in equity or at law).

3.3                  Valid Issuance .  Upon the due conversion of the Notes or the issuance by the Company of shares of Common Stock in payment of interest on the Notes, the Note Shares issuable thereupon will be validly issued, fully paid and non-assessable free and clear of all encumbrances and restrictions, except for restrictions on transfer set forth in this Agreement or imposed by applicable securities laws.  On the maturity date of the Notes, the Company shall have a sufficient number of authorized shares of Common Stock reserved for issuance upon the conversion of the principal of the Notes by the Purchasers.  Prior to the maturity date of the Notes, the Company shall take such steps as are reasonably necessary to provide for a sufficient number of authorized shares of Common Stock available for issuance upon the conversion of the principal of the Notes by the Purchasers.

3.4                  Delivery of SEC Filings; Business .  The Company has made available to the Purchasers through the EDGAR system, true and complete copies of the Company’s most recent Annual Report on Form 10-KSB for the fiscal year ended December 31, 2007 (the “10-KSB”), and all other reports filed by the Company pursuant to the 1934 Act since the filing of the 10-KSB and prior to the date hereof (collectively, the “SEC Filings”).

3.5                  Brokers and Finders .  No person will have, as a result of the transactions contemplated by this Agreement, any valid right, interest or claim against or upon the Company, or any Purchaser for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Company.

3.6                  Private Placement .  The offer and sale of the Notes to the Purchasers as contemplated hereby are exempt from the registration requirements of the Securities Act of 1933 (the “Securities Act”).

Each Purchaser, severally and not jointly, represents and warrants to the Company that:

4.1                  Purchase Entirely for Own Account .  The Note(s) to be received by the Purchaser hereunder will be acquired for the Purchaser’s own account, not as nominee or agent, and not with a view to the resale or distribution of any part thereof in violation of the Securities Act, and the Purchaser has no present intention of selling, granting any participation in, or otherwise distributing the same in violation of the Securities Act.  The Purchaser is not a registered broker dealer or an entity engaged in the business of being a broker or dealer.

4.2                  Investment Experience .  The Purchaser acknowledges that it can bear the economic risk and complete loss of its investment in the Note(s) and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment contemplated hereby.

4.3                  Disclosure of Information .  Each Purchaser has had an opportunity to receive all additional information related to the Company requested by it and to ask questions of and receive answers from the Company regarding the Company, its business and the terms and conditions of the offering of the Notes.  The Purchaser acknowledges that it has access to, and an opportunity to inspect, the SEC Filings.

4.4                  Accredited Purchaser .  The Purchaser is an accredited Purchaser as defined in Rule 501(a) of Regulation D, as amended, under the Securities Act.

4.5                  Brokers and Finders .  No Person will have, as a result of the transactions contemplated by this Agreement, any valid right, interest or claim against or upon the Company or the Purchaser for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Purchaser.

5.1                       Registration Rights .  The Purchasers shall have the demand registration rights set forth on Schedule II annexed hereto with respect to the shares of Common Stock issued upon any conversion of principal of the Notes.  The Purchasers shall have piggyback registration rights, but not any demand registration rights, set forth on Schedule III annexed hereto with respect to Note Shares issued by the Company in payment of interest on the Notes pursuant to Section 2 thereof (the “Interest Shares”).

5.2                  Legend .  Each Note and each certificate representing Note Shares shall be stamped or otherwise imprinted with a legend substantially in the following form (in addition to any legend required under any applicable state securities laws):

     5.3                  Restriction on Transfer .  Notwithstanding anything to the contrary set forth in this Agreement, the Notes and the Note Shares are “restricted securities” under the Securities Act inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such securities may not be resold without registration under the Securities Act or pursuant to an exemption from such registration.

6.1               Governing Law; Consent to Jurisdiction; Waiver of Jury Trial .  This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York without regard to the choice of law principles thereof.  Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the courts of the State of New York located in New York County and the United States District Court for the Southern District of New York for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Agreement and the transactions contemplated hereby.  Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices under this Agreement.  Each of the parties hereto irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court.  Each party hereto irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

6.2               Successors and Assigns .  Except as otherwise expressly provided herein, this Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of the parties.  No Purchaser shall transfer this Agreement without the prior written consent of the Company.

6.3                Entire Agreement; Amendment .  This Agreement (including any schedules or exhibits annexed hereto) and the other documents delivered pursuant hereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof.  Neither this Agreement nor any term hereof may be amended, waived, discharged or terminated except by a written instrument signed by the Company and by the Purchasers holding Notes with a majority of the outstanding principal of all Notes.

6.4                Notices .  All notices and other communications required or permitted hereunder shall be mailed by either an express mail carrier, first-class mail, postage prepaid, or facsimile, or delivered either by hand or by messenger, addressed (a) if to the Purchasers, as indicated on Schedule I hereto, or at such other address as the Purchasers shall have furnished to the Company in writing, or (b) if to the Company, at its address set forth on the signature page hereto (with copy to:  Eilenberg Krause & Paul LLP, 11 East 44 ^th Street, 19th Floor, New York, NY  10017, Attn.: Adam D. Eilenberg, Esq.) or at such other address as the Company shall have furnished to the Purchasers and each such other holder in writing.  All such notices or communications shall be deemed given when actually delivered by hand, messenger, express mail carrier or facsimile or, if mailed, three days after deposit in the U.S. mail.

6.5                Delays or Omission .  No delay or omission to exercise any right, power or remedy accruing to any party to this Agreement, upon any breach or default of another party under this Agreement, shall impair any such right, power or remedy of such party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring.  All remedies, either under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.

6.6               Severability .  In case any provision of the Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

6.7                Expenses .  The part