--------------------------------------------------------------------------------

S E T T L E M E N T   A N D  S E C U R I T I E S   P U R C H A S E   A G R E E M
E N T

            THIS SETTLEMENT AND SECURITIES PURCHASE AGREEMENT (this “Agreement”)
is executed as of April 7, 2016 by and between Silver Dragon Resources Inc., a
Delaware corporation (“Company”), and Tonaquint, Inc., a Utah corporation, its
successors and/or assigns (“Investor”).

            A.        Pursuant to that certain Securities Purchase Agreement
dated February 15, 2011 (the “Purchase Agreement”) between Investor and Company,
Company issued to Investor, among other securities, a certain Secured
Convertible Promissory Note in the original principal amount of $2,766,500.00
and having an original issue date of February 15, 2011 (the “Prior Note”).

            B.        Among other defaults, Company failed to repay the Prior
Note by its maturity date.

            C.        As a result of such defaults under the Prior Note,
Investor filed a lawsuit against Company in United States District Court,
District of Utah, Central Division, as Case No. 2:16-cv-00182 (the “Lawsuit”).

            D.        In the Lawsuit, Investor asserted an outstanding balance
of the Prior Note in the amount of $9,093,950.00 (the “Prior Note Balance”).

            E.        After weeks of negotiation, the parties have reached an
agreement to settle the Lawsuit (the “Settlement”).

            F.        Investor and Company have agreed that as part of the
Settlement: (i) Investor will forgive $2,677,393.47 of the Prior Note Balance,
(ii) Investor will make a new cash investment in Company in the amount of
$400,000.00 (the “New Investment Amount”), (iii) Investor will cancel the
remaining $6,416,556.53 outstanding balance of the Prior Note, and (iv) Company
will issue to Investor a new Secured Convertible Promissory Note in the original
principal amount of $6,836,556.53 and substantially in the form attached hereto
as Exhibit A (the “New Note”).

            G.        Company and Investor are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the rules and regulations promulgated by the United States Securities and
Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended
(the “1933 Act”).

            H.        This Agreement, the New Note, the Security Agreement (as
defined below), the Pledge Agreement (as defined below), and all other
certificates, documents, agreements, resolutions and instruments delivered to
any party under or in connection with this Agreement, as the same may be amended
from time to time, are collectively referred to herein as the “Transaction
Documents”.

            I.        This Agreement, any Additional Note (as defined below),
and all other certificates, documents, agreements, resolutions and instruments
delivered to any party under or in connection with the issuance of such
Additional Note, as the same may be amended from time to time, are collectively
referred to herein as the “Additional Investment Documents”.

            J.        For purposes of this Agreement: “Conversion Shares” means
all shares of Common Stock issuable upon conversion of all or any portion of the
New Note or any Additional Note; and “Securities” means the Notes (as defined
below) and the Conversion Shares.

            K.        The parties now desire to settle the Lawsuit in accordance
with the terms and conditions set forth in this Agreement.

--------------------------------------------------------------------------------

            NOW, THEREFORE, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties
and covenants herein contained, the parties hereto agree as follows:

            1.        Purchase and Sale of Notes.

                        1.1.        Issuance of New Note. On the Initial Closing
Date (as defined below), Company shall issue and sell to Investor and Investor
shall purchase from Company the New Note. In consideration thereof, Investor
shall pay to Company the New Note Purchase Price (as defined below) in the
manner described in Section 1.3 below.

                        1.2.        Additional Investments. Company and Investor
agree that upon the mutual agreement of both parties, Investor may make
additional investments (each such investment, an “Additional Investment”) in
Company pursuant to a Secured Convertible Promissory Note substantially in the
form attached hereto as Exhibit B (each, an “Additional Note”, and together with
the New Note, the “Notes”).

                        1.3.        Form of Payment. On the Initial Closing
Date, Investor shall pay the New Note Purchase Price by delivering the New
Investment Amount via wire transfer of immediately available funds to Company
and surrendering the Prior Note to Company for cancellation. The New Investment
Amount will be included in the outstanding balance of the New Note. On any
Subsequent Closing Date (as defined below), if applicable, Investor shall pay
the purchase price for any Additional Note via wire transfer of immediately
available funds.

                        1.4.        Transaction Expense Amount; New Note
Purchase Price. Company acknowledges that the outstanding balance of the New
Note will include a $20,000.00 fee to cover Investor’s legal fees, accounting
costs, due diligence, monitoring and other transaction costs incurred in
connection with the Settlement (the “Transaction Expense Amount”). The “New Note
Purchase Price”, therefore, shall be $6,816,556.53, computed as follows:
$6,836,556.53 initial principal balance, less the Transaction Expense Amount.
The New Investment Amount shall be the New Note Purchase Price less the Prior
Note Balance (following forgiveness by Investor of $2,677,393.47) .

                        1.5.        Collateral for the Notes. The New Note and
any Additional Notes shall be secured by: (i) that certain Security Agreement
substantially in the form attached hereto as Exhibit C (the “Security
Agreement”), whereby Borrower granted a security interest in all of its assets
in favor of Investor to secure the performance its obligations under the New
Note and all Additional Notes; and (ii) that certain Pledge Agreement
substantially in the form attached hereto as Exhibit D (the “Pledge Agreement”),
whereby Borrower pledged all of its right, title and interest in and to the
equity interests held by Company in Sanhe Sino-Tip Resources & Technologies,
Ltd., a Chinese foreign cooperative joint venture (the “Sino-Top Interest”), to
secure the performance of its obligations under the New Note and all Additional
Notes.

                        1.6.        Closings.

                                        (a)        Subject to the satisfaction
(or written waiver) of the conditions set forth in Section 2 and Section 3
below, the closing of the purchase of the New Note (the “Initial Closing”) along
with the delivery of the Prior Note and the other Transaction Documents (as
defined below) shall occur on the date that is mutually agreed to by Company and
Investor (the “Initial Closing Date”) by means of the exchange by express
courier and email of .pdf documents, but shall be deemed to have occurred at the
offices of Hansen Black Anderson Ashcraft PLLC in Lehi, Utah.

2

--------------------------------------------------------------------------------

                                        (b)        Subject to the satisfaction
(or written waiver) of the conditions set forth in Section 2 and Section 3
below, the closing of any Additional Investment (each, a “Subsequent Closing”,
and together with the Initial Closing, the “Closings”) and issuance of any
Additional Notes shall occur on a date that is mutually agreed to by Company and
Investor (each, a “Subsequent Closing Date”, and together with the Initial
Closing Date, the “Closing Dates”) by means of the exchange by express courier
and email of .pdf documents, but shall be deemed to have occurred at the offices
of Hansen Black Anderson Ashcraft PLLC in Lehi, Utah.

            2.        Conditions to Company’s Obligations to Sell. The
obligation of Company hereunder to issue and sell the Notes to Investor at the
Closings is subject to the satisfaction, on or before the applicable Closing
Date, of each of the following conditions: 2.1. With respect to the Initial
Closing, Investor shall have executed this Agreement and delivered the same to
Company.

                        2.2.        With respect to the Initial Closing,
Investor shall have delivered the Additional Investment Amount to Company.

                        2.3.        With respect to the Initial Closing,
Investor shall have delivered the Prior Note to Company for cancellation.

                        2.4.        With respect to each Subsequent Closing, if
any, Investor shall have delivered the applicable purchase price for such
Additional Note to Company.

            3.        Conditions to Investor’s Obligation to Purchase. The
obligation of Investor hereunder to purchase the Notes at the Closings is
subject to the satisfaction, on or before the applicable Closing Date, of each
of the following conditions, provided that these conditions are for Investor’s
sole benefit and may be waived by Investor at any time in its sole discretion:

                        3.1.        With respect to the Initial Closing, Company
shall have executed this Agreement, the Security Agreement and the Pledge
Agreement and delivered the same to Investor.

                        3.2.        With respect to each Closing, Company shall
have executed and delivered the applicable Note to Investor.

                        3.3.        With respect to the Initial Closing, Company
shall have delivered to Investor a fully executed Letter of Instructions to
Transfer Agent (“TA Letter”) substantially in the form attached hereto as
Exhibit E acknowledged and agreed to in writing by Company’s transfer agent (the
“Transfer Agent”).

                        3.4.        With respect to the Initial Closing, Company
shall have delivered to Investor a fully executed Secretary’s Certificate
substantially in the form attached hereto as Exhibit F evidencing Company’s
approval of the applicable transaction documents.

                        3.5.        With respect to the Initial Closing, Company
shall have delivered to Investor a fully executed Share Issuance Resolution
substantially in the form attached hereto as Exhibit G to be delivered to the
Transfer Agent.

                        3.6       . With respect to the Initial Closing, Company
shall have delivered to Investor a fully executed Confession of Judgment
substantially in the form attached hereto as Exhibit H.

3

--------------------------------------------------------------------------------

                        3.7.        With respect to each Subsequent Closing,
Company shall have delivered to Investor fully executed copies of all other
documents required to be executed by Company or otherwise requested by Investor
for Company to execute, including, but not limited to, an updated TA Letter,
Secretary’s Certificate or Share Issuance Resolution.

            4.        Representations, Warranties and Covenants of Investor.
Investor hereby represents and warrants to Company that the following are true
and correct as of the date hereof, and as of each Closing Date: (i) this
Agreement has been duly and validly authorized; (ii) this Agreement constitutes
a valid and binding agreement of Investor enforceable in accordance with its
terms; (iii) Investor is an “accredited investor” as that term is defined in
Rule 501(a) of Regulation D of the 1933 Act; (iv) Investor is purchasing the
Notes and any securities of the Company issuable upon conversion of or otherwise
pursuant to the Notes for its own account and not with a present view towards
the public sale or distribution thereof, except pursuant to sales registered or
exempted from registration under the 1933 Act; and (v) Investor has carefully
reviewed the Company’s filings with the SEC including the the risk factors set
forth therein.

            5.        Representations, Warranties, and Covenants of Company.
Company hereby represents and warrants to Investor that the following are true
and correct as of the date hereof, and as of each Closing Date: (i) Company is a
corporation duly organized, validly existing and in good standing under the laws
of its state of incorporation and has the requisite corporate power to own its
properties and to carry on its business as now being conducted; (ii) Company is
duly qualified as a foreign corporation to do business and is in good standing
in each jurisdiction where the nature of the business conducted or property
owned by it makes such qualification necessary; (iii) Company has registered its
Common Stock under Section 12(g) of the Securities Exchange Act of 1934, as
amended (the “1934 Act”), and is obligated to file reports pursuant to Section
13 or Section 15(d) of the 1934 Act; (iv) each of the Transaction Documents and
the Additional Investment Documents, if applicable, and the transactions
contemplated hereby and thereby, have been duly and validly authorized by
Company; (v) this Agreement, the New Note, the Security Agreement, and the other
Transaction Documents have been duly executed and delivered by Company and
constitute the valid and binding obligations of Company enforceable in
accordance with their terms; (vi) the execution and delivery of the Transaction
Documents and the Additional Investment Documents, if applicable, by Company,
the issuance of Securities in accordance with the terms hereof and thereof, and
the consummation by Company of the other transactions contemplated by the
Transaction Documents and the Additional Investment Documents do not and will
not (except in the case of clause (vi)(a) or (vi)(b) for such conflict or breach
that would not, individually or in the aggregate, have a material adverse effect
on the business, properties, assets, liabilities, operations, results of
operations, condition (financial or otherwise) or prospects of the Company and
its subsidiaries, taken as a whole, or on the transactions contemplated hereby)
conflict with or result in a breach by Company of any of the terms or provisions
of, or constitute a default under (a) Company’s formation documents or bylaws,
each as currently in effect, (b) any indenture, mortgage, deed of trust, or
other material agreement or instrument to which Company is a party or by which
it or any of its properties or assets are bound, including any listing agreement
for the Common Stock, or (c) any existing applicable law, rule, or regulation or
any applicable decree, judgment, or order of any court, United States federal or
state regulatory body, administrative agency, or other governmental body having
jurisdiction over Company or any of Company’s properties or assets; (i) no
further authorization, approval or consent of any court, governmental body,
regulatory agency, self-regulatory organization, or stock exchange or market or
the stockholders or any lender of Company is required to be obtained by Company
for the issuance of the Securities to Investor; (ii) none of Company’s filings
with the SEC contained, at the time they were filed, any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading; (iii) Company has
filed all reports, schedules, forms, statements and other documents required to
be filed by Company with the SEC under

4

--------------------------------------------------------------------------------

the 1934 Act on a timely basis or has received a valid extension of such time of
filing and has filed any such report, schedule, form, statement or other
document prior to the expiration of any such extension; (iv) there is no action,
suit, proceeding, inquiry or investigation before or by any court, public board
or body pending or, to the knowledge of Company, threatened against or affecting
Company before or by any governmental authority or non-governmental department,
commission, board, bureau, agency or instrumentality or any other person,
wherein an unfavorable decision, ruling or finding which would adversely affect
the validity or enforceability of, or the authority or ability of Company to
perform its obligations under, any of the Transaction Documents; (v) Company has
not consummated any material financing transaction that has not been disclosed
in a periodic filing or current report with the SEC under the 1934 Act; (vi)
Company is not, nor has it been at any time in the previous twelve (12) months,
a “Shell Company,” as such type of “issuer” is described in Rule 144(i)(1) under
the 1933 Act; (vii) with respect to any commissions, placement agent or finder’s
fees or similar payments that will or would become due and owing by Company to
any person or entity as a result of this Agreement or the transactions
contemplated hereby (“Broker Fees”), any such Broker Fees will be made in full
compliance with all applicable laws and regulations and only to a person or
entity that is a registered investment adviser or registered broker-dealer;
(viii) Investor shall have no obligation with respect to any Broker Fees or with
respect to any claims made by or on behalf of other persons for fees of a type
contemplated in this subsection that may be due in connection with the
transactions contemplated hereby and Company shall indemnify and hold harmless
each of Investor, Investor’s employees, officers, directors, stockholders,
members, managers, agents, and partners, and their respective affiliates, from
and against all claims, losses, damages, costs (including the costs of
preparation and attorneys’ fees) and expenses suffered in respect of any such
claimed or existing Broker Fees; (ix) when issued, the Conversion Shares will be
duly authorized, validly issued, fully paid for and non-assessable, free and
clear of all liens, claims, charges and encumbrances; (x) neither Investor nor
any of its officers, directors, stockholders, members, managers, employees,
agents or representatives has made any representations or warranties to Company
or any of its officers, directors, employees, agents or representatives except
as expressly set forth in the Transaction Documents and the Additional
Investment Documents and, in making its decision to enter into the transactions
contemplated by the Transaction Documents and the Additional Investment
Documents, Company is not relying on any representation, warranty, covenant or
promise of Investor or its officers, directors, members, managers, employees,
agents or representatives other than as set forth in the Transaction Documents
and the Additional Investment Documents; (xi) Company acknowledges that the
State of Utah has a reasonable relationship and sufficient contacts to the
transactions contemplated by the Transaction Documents and the Additional
Investment Documents and any dispute that may arise related thereto such that
the laws and venue of the State of Utah, as set forth more specifically in
Section 12.3 below, shall be applicable to the Transaction Documents, the
Additional Investment Documents, and the transactions contemplated therein;
(xii) the Prior Note represents Company’s unconditional obligation to pay the
outstanding balance of the Prior Note pursuant to the terms thereof and,
immediately prior to its cancellation pursuant to the terms of this Agreement,
is not subject to any offset, counterclaim, defense, or reduction of any kind;
and (xiii) Company has performed due diligence and background research on
Investor and its affiliates including, without limitation, John M. Fife, and, to
its satisfaction, has made inquiries with respect to all matters Company may
consider relevant to the undertakings and relationships contemplated by the
Transaction Documents including, among other things, the following:
http://investing.businessweek.com/research/stocks/people/person.asp?personId=7505107&ticker=UAHC;
SEC Civil Case No. 07-C-0347 (N.D. Ill.); SEC Civil Action No. 07-CV-347 (N.D.
Ill.); and FINRA Case #2011029203701. Company, being aware of the matters
described in subsection (xiii) above, acknowledges and agrees that such matters,
or any similar matters, have no bearing on the transactions contemplated by the
Transaction Documents and covenants and agrees it will not use any such
information as a defense to performance of its obligations under the Transaction
Documents or in any attempt to a void, modify or reduce such obligations.

5

--------------------------------------------------------------------------------

            6.        Company Covenants. Until all of Company’s obligations
under all of the Transaction Documents and, if applicable, all Additional
Investment Documents, are paid and performed in full, or within the timeframes
otherwise specifically set forth below, Company shall comply with the following
covenants: (i) so long as Investor beneficially owns any of the Securities and
for at least twenty (20) Trading Days thereafter, Company shall timely file on
the applicable deadline all reports required to be filed with the SEC pursuant
to Sections 13 or 15(d) of the 1934 Act, and shall take all reasonable action
under its control to ensure that adequate current public information with
respect to Company, as required in accordance with Rule 144 of the 1933 Act, is
publicly available, and shall not terminate its status as an issuer required to
file reports under the 1934 Act even if the 1934 Act or the rules and
regulations thereunder would permit such termination; (ii) the Common Stock
shall be listed or quoted for trading on OTCQB, OTC Pink Current Information, or
any or any equivalent replacement market, the Nasdaq stock market, the New York
Stock Exchange, or the NYSE MKT; (iii) when issued, the Conversion Shares shall
be duly authorized, validly issued, fully paid for and non-assessable, free and
clear of all liens, claims, charges and encumbrances; trading in Company’s
Common Stock shall not be suspended, halted, chilled, frozen, reach zero bid or
otherwise cease on Company’s principal trading market; (iv) Company shall not
transfer, assign, or sell the Sino-Top Interest for an amount less than would be
required to repay the New Note and any Additional Note in full without the prior
written consent of Investor, which consent may be given or withheld in
Investor’s sole and absolute discretion; (v) Company shall not pledge,
hypothecate or otherwise alienate or encumber the Sino-Top Interest in any way
without the prior written consent of Investor, which consent may be given or
withheld in Investor’s sole and absolute discretion; (vi) Company shall not at
any given time have any Variable Security Investors (as defined below),
excluding Investor, without Investor’s prior written consent, which consent may
be granted or withheld in Investor’s sole and absolute discretion; (vii) at the
Initial Closing and on the first day of each calendar quarter for so long as any
Note remains outstanding or on any other date during which any Note is
outstanding, as may be requested by Investor, the Chief Executive Officer of
Company shall provide to Investor a certificate in substantially the form
attached hereto as Exhibit I (the “Officer’s Certificate”) certifying in his
personal capacity and in his capacity as Chief Executive Officer of Company the
number of Variable Security Holders of Company as of the date the applicable
Officer’s Certificate is executed; (viii) within three (3) Trading Days of the
Initial Closing Date, Company will file with the SEC a Current Report on Form
8-K describing the terms of the Settlement, including, but not limited to,
specifically and conspicuously describing the participation right granted to
Investor in Section 10 below; and (ix) if at any time the Common Stock trades
below $0.0005, Company shall, as soon as practicable but in no event longer than
sixty (60) days thereafter, reduce the par value of its Common Stock to $0.00001
or below. For purposes hereof, the term “Variable Security Holder” means any
holder of any Company securities that (A) have or may have conversion rights of
any kind, contingent, conditional or otherwise, in which the number of shares
that may be issued pursuant to such conversion right varies with the market
price of the Common Stock, or (B) are or may become convertible into Common
Stock (including without limitation convertible debt, warrants or convertible
preferred stock), with a conversion price that varies with the market price of
the Common Stock, even if such security only becomes convertible following an
event of default, the passage of time, or another trigger event or condition
(each a “Variable Security Issuance”). For avoidance of doubt, the issuance of
shares of Common Stock under, pursuant to, in exchange for or in connection with
any contract or instrument, whether convertible or not, is deemed a Variable
Security Issuance for purposes hereof if the number of shares of Common Stock to
be issued is based upon or related in any way to the market price of the Common
Stock, including, but not limited to, Common Stock issued in connection with a
Section 3(a)(9) exchange, a Section 3(a)(10) settlement, or any other similar
settlement or exchange.

            7.        Mutual Release and Waiver.

                        7.1.        Release by the Investor. Upon the execution
of this Agreement by all parties hereto and issuance of the New Note, Investor,
for itself and its officers, directors, shareholders, officers, employees,
agents, attorneys, subsidiaries, affiliates, successors and assigns, and any and
all past and present such persons acting by, through or under Investor
(collectively, the “Investor Releasing Parties”), forever relieves, releases and
discharges Company and each of its directors, officers, stockholders, employees,
agents, attorneys, successors and assigns, and any and all past and present such
persons (collectively, the “Company Released Parties”), from any and all claims,
debts, liabilities, demands, obligations, promises, acts, agreements, costs and
expenses (including, but not limited to, attorneys’ fees), damages, injuries,
actions and causes of actions, of whatever kind or nature, whether legal or
equitable, known or unknown, suspected or unsuspected, contingent or fixed
(each, a “Claim”, and collectively, the “Claims”), that Investor or any of the
other Investor Releasing Parties may have that are based upon, relate to or
arise out of the Lawsuit or the Prior Note, arising or accruing before the
Initial Closing Date. Each Company Released Party is an intended third party
beneficiary of the release and waiver contained in this Section.

6

--------------------------------------------------------------------------------

                        7.2.        Release by Company. Upon the execution of
this Agreement by all parties hereto and the issuance of the New Note, Company,
for itself and its officers, directors, stockholders, employees, agents,
attorneys, subsidiaries, affiliates, successors and assigns, and any and all
past and present such persons acting by, through or under Company (collectively,
the “Company Releasing Parties”), forever relieves, releases and discharges
Investor and each of its officers, directors, shareholders, employees, agents,
attorneys, affiliates, successors and assigns, and any and all past and present
such persons (the “Investor Released Parties”), from any and all Claims that
Company or any other Company Releasing Party may have that are based upon,
relate to or arise out of the Lawsuit or the Prior Note, arising or accruing
before the Initial Closing Date. Each Investor Released Party is an intended
third party beneficiary of the release and waiver contained in this Section.

                        7.3.        Release Representations. Each party hereto,
for itself and on behalf of such party’s other respective releasing parties,
represents, warrants and agrees that (a) the release and waiver contained in
this Section shall not apply to any obligations, covenants, conditions,
representations or warranties arising under any of the Transaction Document or
Additional Investment Documents, (b) such party hereby waives any Claims such
party has against any of the parties it is releasing hereunder, and covenants
not to institute against any of the parties it is releasing hereunder any
proceeding, suit or action, at law or in equity, of whatsoever kind or nature,
whether criminal or civil, or in any way to aid in or encourage the institution
or prosecution thereof, for damages, expenses, compensation, injunctive relief
or otherwise, arising from, related to, or based upon any Claim, and (c) none of
the Claims such party is releasing and waiving hereunder have been sold,
assigned or otherwise transferred or encumbered (directly or indirectly) to any
person or party whatsoever, and such party has the full right and power to
grant, execute and deliver the full and complete release and waiver contained
herein.

                        7.4.        Unknown Claims. Each party hereto represents
that it is not aware of any claim against or involving any party it is releasing
hereunder other than the Claims, all of which are released hereunder. Each party
hereto acknowledges that it has been advised by legal counsel and is familiar
with a legal principle that may provide that a general release does not extend
to claims which the releasor does not know or suspect to exist in its favor at
the time of executing the release, which if known by it must have materially
affected its settlement with the releasee. Each party hereto, being aware of
said principle, agrees to expressly waive any rights to this effect, as well as
under any other statute or common law principles of similar effect.

            8.        Dismissal of Lawsuit. Upon the execution and delivery of
all the Transaction Documents by all parties thereto, the parties agree to cause
the Lawsuit to be dismissed. Such dismissal shall be with prejudice and upon the
merits and shall occur by way of a Stipulated Motion to Dismiss and Order of
Dismissal, to be appropriately executed and filed with the court in which the
Lawsuit has been filed no later than five (5) business days after the Initial
Closing Date. The parties agree that the Order of Dismissal shall have claim and
issue preclusive effect on all claims and/or issues that were or could have been
raised in the Lawsuit.

7

--------------------------------------------------------------------------------

            9.        Reservation of Shares. Upon the earlier of (i) Company’s
next annual meeting of stockholders, and (ii) six (6) months from the date
hereof (the “Share Reserve Date”), Company will reserve 150,000,000 shares of
Common Stock from its authorized and unissued Common Stock to provide for the
issuance of Common Stock pursuant to conversions of the Notes (the “Share
Reserve”). In furtherance thereof, from and after the Share Reserve Date and
until such time that all outstanding Notes have been paid in full, Company shall
require the Transfer Agent to maintain the Share Reserve. Company shall further
require the Transfer Agent to hold such shares of Common Stock exclusively for
the benefit of Investor and to issue such shares to Investor promptly upon
Investor’s delivery of a conversion notice under the Notes.

            10.        Participation Right. Pursuant to the terms of this
Section 10, Company hereby grants Investor a right of participation with respect
to any financing by Company (whether debt, debt with equity features,
convertible debt, common stock, preferred stock, warrants, or any other type of
financing) (a “Financing Transaction”) that Company proposes to enter into at
any time during the period beginning on the Initial Closing Date and ending on
the date that all of Company’s obligations hereunder, under the New Note and
under any issued Additional Note are paid and performed in full; provided,
however, that Investor may only elect to participate in acquiring up to 50% of
the principal balance of such Financing Transaction. Company shall give written
notice of any such proposed Financing Transaction to Investor (the “Financing
Notice”), which Financing Notice shall identify the proposed parties and the
terms of the proposed Financing Transaction. Investor shall then have a period
of five (5) calendar days from receipt of the Financing Notice to notify Company
whether Investor elects to exercise its right to participate in up to 50% of the
proposed Financing Transaction upon the same terms as the proposed Financing
Transaction. If Investor elects not to exercise its right to participate,
Company and the proposed parties shall have a period of sixty (60) calendar days
to consummate the proposed Financing Transaction on the terms set forth in the
Financing Notice. In such case, if the Financing Transaction is not consummated
within such period or if the terms of the proposed Financing Transaction change
from those set forth in the applicable Financing Notice, Company shall again
submit the Financing Transaction to Investor before consummating it so that
Investor may exercise its right to participate with respect thereto pursuant to
this subsection. If Investor elects to exercise its right of participation with
respect to any proposed Financing Transaction, Company shall diligently proceed
to consummate its portion of the Financing Transaction with Investor on the
terms identified in the Financing Notice and within a timeframe reasonably
acceptable to both Investor and Company.

            11.        Board Observer Right. So long as the New Note or any
Additional Note is outstanding, Company will grant Investor the right to appoint
a board observer. The board observer shall have the right to receive timely
notice of and participate in all board of directors and board committee meetings
including, without limitation, the right to receive all meeting materials and
participate in all discussions at all such meetings. Notwithstanding the
foregoing, (i) the board observer shall not have any voting rights with respect
to any matters voted on by Company’s board of directors, and (ii) Company
reserves the right to exclude the observer from access to any material or
meeting or portion thereof if Company believes upon advice of counsel that such
exclusion is reasonably necessary to preserve the attorney-client privilege;
provided, however, in the event Company elects to exclude the board observer on
such grounds, it must provide the board observer with written notice of such
exclusion, a general description of the matter the board observer is being
excluded from (which description shall be general enough as to not affect the
attorney-client privilege), and an explanation as to why it is reasonably
necessary to exclude the board observer from such matter. The written notice
described in the foregoing sentence shall be signed by the Chief Executive
Officer of Company and shall certify that only the matters described in such
notice will be discussed while the board observer is being excluded. The initial
board observer shall be John M. Fife. Investor shall have the right change the
person appointed as its board observer at any time with three (3) days written
notice to Company.

8

--------------------------------------------------------------------------------

            12.        Miscellaneous. The provisions set forth in this Section
12 shall apply to this Agreement, as well as all other Transaction Documents and
Additional Investment Documents as if these terms were fully set forth therein;
provided, however, that in the event there is a conflict between any provision
set forth in this Section 12 and any provision in any other Transaction
Document, the provision in such other Transaction Document shall govern.

                        12.1.        Certain Capitalized Terms. To the extent
any capitalized term used in any Transaction Document or Additional Investment
Document is defined in any other Transaction Document or Additional Investment
Document (as noted therein), such capitalized term shall remain applicable in
the Transaction Document or Additional Investment Document in which it is so
used even if the other Transaction Document or Additional Investment Document
(wherein such term is defined) has been released, satisfied, or is otherwise
cancelled.

                        12.2.        Arbitration of Claims. The parties shall
submit all Claims (as defined in Exhibit J) arising under this Agreement, any
other Transaction Document, any Additional Investment Document, or any other
agreement between the parties and their affiliates to binding arbitration
pursuant to the arbitration provisions set forth in Exhibit J attached hereto
(the “Arbitration Provisions”). The parties hereby acknowledge and agree that
the Arbitration Provisions are unconditionally binding on the parties hereto and
are severable from all other provisions of this Agreement. By executing this
Agreement, Company represents, warrants and covenants that Company has reviewed
the Arbitration Provisions carefully, consulted with legal counsel about such
provisions (or waived its right to do so), understands that the Arbitration
Provisions are intended to allow for the expeditious and efficient resolution of
any dispute hereunder, agrees to the terms and limitations set forth in the
Arbitration Provisions, and that Company will not take a position contrary to
the foregoing representations. Company acknowledges and agrees that Investor may
rely upon the foregoing representations and covenants of Company regarding the
Arbitration Provisions.

                        12.3.        Governing Law; Venue. This Agreement shall
be construed and enforced in accordance with, and all questions concerning the
construction, validity, interpretation and performance of this Agreement shall
be governed by, the internal laws of the State of Utah, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of
Utah or any other jurisdiction) that would cause the application of the laws of
any jurisdiction other than the State of Utah. Each party consents to and
expressly agrees that the exclusive venue for arbitration of any dispute arising
out of or relating to any Transaction Document, any Additional Investment
Document or the relationship of the parties or their affiliates shall be in Salt
Lake County or Utah County, Utah. Without modifying the parties obligations to
resolve disputes hereunder pursuant to the Arbitration Provisions, for any
litigation arising in connection with any of the Transaction Documents or any of
the Additional Investment Documents (and notwithstanding the terms (specifically
including any governing law and venue terms) of any transfer agent services
agreement or other agreement between the Transfer Agent and Company, such
litigation specifically includes, without limitation any action between or
involving Company and the Transfer Agent under the TA Letter or otherwise
related to Investor in any way (specifically including, without limitation, any
action where Company seeks to obtain an injunction, temporary restraining order,
or otherwise prohibit the Transfer Agent from issuing shares of Common Stock to
Investor for any reason)), each party hereto hereby (i) consents to and
expressly submits to the exclusive personal jurisdiction of any state or federal
court sitting in Salt Lake County, Utah, (ii) expressly submits to the exclusive
venue of any such court for the purposes hereof, (iii) agrees to not bring any
such action (specifically including, without limitation, any action where
Company seeks to obtain an injunction, temporary restraining order, or otherwise
prohibit the Transfer Agent from issuing shares of Common Stock to Investor for
any reason) outside of any state or federal court sitting in Salt Lake County,
Utah, and (iv) waives any claim of improper venue and any claim or objection
that such courts are an inconvenient forum or any other claim or objection to
the bringing of any such proceeding in such jurisdiction or to any claim that
such venue of the suit, action or proceeding is improper. Finally, Company
covenants and agrees to name Investor as a party in interest in, and provide
written notice to Investor in accordance with Section 12.12 below prior to
bringing or filing, any action (including without limitation any filing or
action against any person or entity that is not a party to this Agreement,
including without limitation the Transfer Agent) that is related in any way to
the Transaction Documents or Additional Investment Documents or any transaction
contemplated herein or therein, including without limitation any action brought
by Company to enjoin or prevent the issuance of any shares of Common Stock to
Investor by the Transfer Agent, and further agrees to name Investor as a party
to any such action. Company acknowledges that the governing law and venue
provisions set forth in this Section 12.3 are material terms to induce Investor
to enter into the Transaction Documents and the Additional Investment Documents,
if applicable, and that but for Company’s agreements set forth in this Section
12.3 Investor would not have entered into the Transaction Documents or the
Additional Investment Documents, if applicable.

9

--------------------------------------------------------------------------------

                        12.4.        Specific Performance. Company acknowledges
and agrees that irreparable damage would occur to Investor in the event that
Company fails to perform any provision of this Agreement, any of the other
Transaction Documents or any of the other Additional Investment Documents, if
applicable, in accordance with its specific terms. It is accordingly agreed that
Investor shall be entitled to an injunction or injunctions to prevent or cure
breaches of the provisions of this Agreement or such other Transaction Document
or Additional Investment Document and to enforce specifically the terms and
provisions hereof or thereof, this being in addition to any other remedy to
which any Investor may be entitled under the Transaction Documents or Additional
Investment Documents, at law or in equity. For the avoidance of doubt, in the
event Investor seeks to obtain an injunction against Company or specific
performance of any provision of any Transaction Document or Additional
Investment Document, such action shall not be a waiver of any right of Investor
under any Transaction Document or Additional Investment Document, at law, or in
equity, including without limitation its rights to arbitrate any Claim pursuant
to the terms of the Transaction Documents or Additional Investment Documents.

                        12.5.        Calculation Disputes. Notwithstanding the
Arbitration Provisions, in the case of a dispute as to any determination or
arithmetic calculation under the Transaction Documents or Additional Investment
Documents, including without limitation, calculating the Outstanding Balance,
Lender Conversion Price (as defined in the New Note), Lender Conversion Shares
(as defined in the New Note), Installment Conversion Price (as defined in the
New Note), Installment Conversion Shares (as defined in the New Note),
Conversion Factor (as defined in the New Note), Market Price (as defined in the
New Note), or VWAP (as defined in the New Note) (each, a “Calculation”), Company
or Investor (as the case may be) shall submit any disputed Calculation via email
or facsimile with confirmation of receipt (i) within two (2) Trading Days after
receipt of the applicable notice giving rise to such dispute to Company or
Investor (as the case may be) or (ii) if no notice gave rise to such dispute, at
any time after Investor learned of the circumstances giving rise to such
dispute. If Investor and Company are unable to agree upon such Calculation
within two (2) Trading Days of such disputed Calculation being submitted to
Company or Investor (as the case may be), then Investor shall, within two (2)
Trading Days, submit via email or facsimile the disputed Calculation to Unkar
Systems Inc. (“Unkar Systems”). Company shall cause Unkar Systems to perform the
Calculation and notify Company and Investor of the results no later than ten
(10) Trading Days from the time it receives such disputed Calculation. Unkar
Systems’ determination of the disputed Calculation shall be binding upon all
parties absent demonstrable error. Unkar Systems’ fee for performing such
Calculation shall be paid by the incorrect party, or if both parties are
incorrect, by the party whose Calculation is furthest from the correct
Calculation as determined by Unkar Systems. In the event Company is the losing
party, no extension of the Delivery Date (as defined in the New Note) shall be
granted and Company shall incur all effects for failing to deliver the
applicable shares in a timely manner as set forth in the Transaction Documents.

10

--------------------------------------------------------------------------------

                        12.6.        Counterparts. Each Transaction Document and
Additional Investment Document may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one instrument. The parties hereto confirm that any electronic copy
of another party’s executed counterpart of a Transaction Document or an
Additional Investment Document (or such party’s signature page thereof) will be
deemed to be an executed original thereof.

                        12.7.        Headings. The headings of this Agreement
are for convenience of reference only and shall not form part of, or affect the
interpretation of, this Agreement.

                        12.8.        Severability. In the event that any
provision of this Agreement is invalid or unenforceable under any applicable
statute or rule of law, then such provision shall be deemed inoperative to the
extent that it may conflict therewith and shall be deemed modified to conform to
such statute or rule of law. Any provision hereof which may prove invalid or
unenforceable under any law shall not affect the validity or enforceability of
any other provision hereof.

                        12.9.        Entire Agreement. This Agreement, together
with the other Transaction Documents and, if applicable, the Additional
Investment Documents, contains the entire understanding of the parties with
respect to the matters covered herein and therein and, except as specifically
set forth herein or therein, neither Company nor Investor makes any
representation, warranty, covenant or undertaking with respect to such matters.
For the avoidance of doubt, all prior term sheets or other documents between
Company and Investor, or any affiliate thereof, related to the transactions
contemplated by the Transaction Documents and the Additional Investment
Documents, if applicable (collectively, “Prior Agreements”), that may have been
entered into between Company and Investor, or any affiliate thereof, are hereby
null and void and deemed to be replaced in their entirety by the Transaction
Documents and the Additional Investment Documents, if applicable. To the extent
there is a conflict between any term set forth in any Prior Agreement and the
term(s) of the Transaction Documents or Additional Investment Documents, the
Transaction Documents or Additional Investment Documents, as applicable, shall
govern.

                        12.10.      No Reliance. Company acknowledges and agrees
that neither Investor nor any of its officers, directors, shareholders,
representatives or agents has made any representations or warranties to Company
or any of its officers, directors, representatives, agents or employees except
as expressly set forth in the Transaction Documents or Additional Investment
Documents and, in making its decision to enter into the transactions
contemplated by the Transaction Documents or Additional Investment Documents,
Company is not relying on any representation, warranty, covenant or promise of
Investor or its officers, directors, members, managers, agents or
representatives other than as set forth in the Transaction Documents or
Additional Investment Documents.

                        12.11.      Amendments. The prior written consent of
both parties hereto shall be required for any change or amendment to this
Agreement.

                        12.12.      Notices. Any notice required or permitted
hereunder shall be given in writing (unless otherwise specified herein) and
shall be deemed effectively given on the earliest of: (i) the date delivered, if
delivered by personal delivery as against written receipt therefor or by email
to an executive officer, or by facsimile (with successful transmission
confirmation), (ii) the earlier of the date delivered or the third Trading Day
after deposit, postage prepaid, in the United States Postal Service by certified
mail, or (iii) the earlier of the date delivered or the third Trading Day after
mailing by express courier, with delivery costs and fees prepaid, in each case,
addressed to each of the other parties thereunto entitled at the following
addresses (or at such other addresses as such party may designate by five (5)
calendar days’ advance written notice similarly given to each of the other
parties hereto):

11

--------------------------------------------------------------------------------

If to Company:

Silver Dragon Inc.
Attn: Marc Hazout
200 Davenport Road
Toronto, Ontario M5R 1J2
Canada

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

Sichenzia Ross Friedman Ference LLP
Attn: Thomas Rose
61 Broadway, 32nd Floor
New York, New York 10006

If to Investor:

Tonaquint, Inc.
Attn: John Fife
303 East Wacker Drive, Suite 1040
Chicago, Illinois 60601

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

Hansen Black Anderson Ashcraft PLLC
Attn: Jonathan Hansen
3051 West Maple Loop Drive, Suite 325
Lehi, Utah 84043

                        12.13.      Successors and Assigns. This Agreement or
any of the severable rights and obligations inuring to the benefit of or to be
performed by Investor hereunder may be assigned by Investor to a third party,
including its financing sources, in whole or in part, without the need to obtain
Company’s consent thereto. Company may not assign its rights or obligations
under this Agreement or delegate its duties hereunder without the prior written
consent of Investor.

                        12.14.      Survival. The representations and warranties
of Company and the agreements and covenants set forth in this Agreement shall
survive the Closing hereunder notwithstanding any due diligence investigation
conducted by or on behalf of Investor. Company agrees to indemnify and hold
harmless Investor and all its officers, directors, employees, attorneys, and
agents for loss or damage arising as a result of or related to any breach or
alleged breach by Company of any of its representations, warranties and
covenants set forth in this Agreement or any of its covenants and obligations
under this Agreement, including advancement of expenses as they are incurred.

                        12.15.      Further Assurances. Each party shall do and
perform, or cause to be done and performed, all such further acts and things,
and shall execute and deliver all such other agreements, certificates,
instruments and documents, as the other party may reasonably request in order to
carry out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.

12

--------------------------------------------------------------------------------

                        12.16.      Investor’s Rights and Remedies Cumulative;
Liquidated Damages. All rights, remedies, and powers conferred in this
Agreement, the Transaction Documents and the Additional Investment Documents are
cumulative and not exclusive of any other rights or remedies, and shall be in
addition to every other right, power, and remedy that Investor may have, whether
specifically granted in this Agreement or any other Transaction Document or
Additional Investment Document, or existing at law, in equity, or by statute,
and any and all such rights and remedies may be exercised from time to time and
as often and in such order as Investor may deem expedient. The parties
acknowledge and agree that upon Company’s failure to comply with the provisions
of the Transaction Documents or Additional Investment Documents, Investor’s
damages would be uncertain and difficult (if not impossible) to accurately
estimate because of the parties’ inability to predict future interest rates and
future share prices, Investor’s increased risk, and the uncertainty of the
availability of a suitable substitute investment opportunity for Investor, among
other reasons. Accordingly, any fees, charges, and default interest due under
the New Note and the other Transaction Documents and Additional Investment
Documents are intended by the parties to be, and shall be deemed, liquidated
damages (under Company’s and Investor’s expectations that any such liquidated
damages will tack back to the Closing Date for purposes of determining the
holding period under Rule 144 under the 1933 Act). The parties agree that such
liquidated damages are a reasonable estimate of Investor’s actual damages and
not a penalty, and shall not be deemed in any way to limit any other right or
remedy Investor may have hereunder, at law or in equity. The parties acknowledge
and agree that under the circumstances existing at the time this Agreement is
entered into, such liquidated damages are fair and reasonable and are not
penalties. All fees, charges, and default interest provided for in the
Transaction Documents and Additional Investment Documents are agreed to by the
parties to be based upon the obligations and the risks assumed by the parties as
of the Initial Closing Date and are consistent with investments of this type.
The liquidated damages provisions of the Transaction Documents and Additional
Investment Documents shall not limit or preclude a party from pursuing any other
remedy available at law or in equity; provided, however, that the liquidated
damages provided for in the Transaction Documents and Additional Investment
Documents are intended to be in lieu of actual damages.

                        12.17.      Ownership Limitation. Notwithstanding
anything to the contrary contained in this Agreement or the other Transaction
Documents, if at any time Investor shall or would be issued shares of Common
Stock under any of the Transaction Documents or Additional Investment Documents,
but such issuance would cause Investor (together with its affiliates) to
beneficially own a number of shares exceeding the Maximum Percentage (as defined
in the New Note), then Company must not issue to Investor the shares that would
cause Investor to exceed the Maximum Percentage. The shares of Common Stock
issuable to Investor that would cause the Maximum Percentage to be exceeded are
referred to herein as the “Ownership Limitation Shares”. Company will reserve
the Ownership Limitation Shares for the exclusive benefit of Investor. From time
to time, Investor may notify Company in writing of the number of the Ownership
Limitation Shares that may be issued to Investor without causing Investor to
exceed the Maximum Percentage. Upon receipt of such notice, Company shall be
unconditionally obligated to immediately issue such designated shares to
Investor, with a corresponding reduction in the number of the Ownership
Limitation Shares. For purposes of this Section, beneficial ownership of Common
Stock will be determined under Section 13(d) of the 1934 Act. By written notice
to Company, Investor may increase, decrease or waive the Maximum Percentage as
to itself but any such waiver will not be effective until the 61st day after
delivery thereof. The foregoing 61-day notice requirement is enforceable,
unconditional and non-waivable and shall apply to all affiliates and assigns of
Investor.

                        12.18.      Attorneys’ Fees and Cost of Collection. In
the event of any arbitration or action at law or in equity to enforce or
interpret the terms of this Agreement or any of the other Transaction Documents,
the parties agree that the party who is awarded the most money (which, for the
avoidance of doubt, shall be determined without regard to any statutory fines,
penalties, fees, or other charges awarded to any party) shall be deemed the
prevailing party for all purposes and shall therefore be entitled to an
additional award of the full amount of the attorneys’ fees, deposition costs,
and expenses paid by such prevailing party in connection with arbitration or
litigation without reduction or apportionment based upon the individual claims
or defenses giving rise to the fees and expenses. Nothing herein shall restrict
or impair an arbitrator’s or a court’s power to award fees and expenses for
frivolous or bad faith pleading. If (i) any Note is placed in the hands of an
attorney for collection or enforcement prior to commencing arbitration or legal
proceedings, or is collected or enforced through any arbitration or legal
proceeding, or Investor otherwise takes action to collect amounts due under any
Note or to enforce the provisions of any Note; or (ii) there occurs any
bankruptcy, reorganization, receivership of Company or other proceedings
affecting Company’s creditors’ rights and involving a claim under any Note; then
Company shall pay the costs incurred by Investor for such collection,
enforcement or action or in connection with such bankruptcy, reorganization,
receivership or other proceeding, including, without limitation, attorneys’
fees, expenses, deposition costs, and disbursements.

13

--------------------------------------------------------------------------------

                        12.19.      Waiver. No waiver of any provision of this
Agreement shall be effective unless it is in the form of a writing signed by the
party granting the waiver. No waiver of any provision or consent to any
prohibited action shall constitute a waiver of any other provision or consent to
any other prohibited action, whether or not similar. No waiver or consent shall
constitute a continuing waiver or consent or commit a party to provide a waiver
or consent in the future except to the extent specifically set forth in writing.

                        12.20.      Waiver of Jury Trial. EACH PARTY TO THIS
AGREEMENT IRREVOCABLY WAIVES ANY AND ALL RIGHTS SUCH PARTY MAY HAVE TO DEMAND
THAT ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED
TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, ANY ADDITIONAL INVESTMENT
DOCUMENT, OR THE RELATIONSHIPS OF THE PARTIES HERETO BE TRIED BY JURY. THIS
WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING UNDER
COMMON LAW OR ANY APPLICABLE STATUTE, LAW, RULE OR REGULATION. FURTHER, EACH
PARTY HERETO ACKNOWLEDGES THAT SUCH PARTY IS KNOWINGLY AND VOLUNTARILY WAIVING
SUCH PARTY’S RIGHT TO DEMAND TRIAL BY JURY.

                        12.21.      Time is of the Essence. Time is expressly
made of the essence with respect to each and every provision of this Agreement
and the other Transaction Documents.

                        12.22.      Voluntary Agreement. Company has carefully
read this Agreement and each of the other Transaction Documents and has asked
any questions needed for Company to understand the terms, consequences and
binding effect of this Agreement and each of the other Transaction Documents and
Additional Investment Documents, if applicable, and fully understand them.
Company has had the opportunity to seek the advice of an attorney of Company’s
choosing, or has waived the right to do so, and is executing this Agreement and
each of the other Transaction Documents and Additional Investment Documents, if
applicable, voluntarily and without any duress or undue influence by Investor or
anyone else.

[Remainder of the page intentionally left blank; signature page to follow]

14

--------------------------------------------------------------------------------

            IN WITNESS WHEREOF, each of the undersigned represents that the
foregoing statements made by it above are true and correct and that it has
caused this Securities Purchase to be duly executed on its behalf (if an entity,
by one of its officers thereunto duly authorized) as of the date first above
written.

HOLDER:

TONAQUINT, INC.

  By: /s/ John M. Fife     John M. Fife, President

COMPANY:

SILVER DRAGON RESOURCES INC.

By: /s/ Marc Hazout                                 
Name: Marc Hazout
Title: President and CEO

ATTACHMENTS:

Exhibit A New Note Exhibit B Form of Additional Note Exhibit C Security
Agreement Exhibit D Pledge Agreement Exhibit E Transfer Agent Letter Exhibit F
Secretary’s Certificate Exhibit G Share Issuance Resolution Exhibit H Confession
of Judgment Exhibit I Officer’s Certificate Exhibit J Arbitration Provisions

[Signature Page to Settlement and Securities Agreement]

--------------------------------------------------------------------------------

Exhibit J

ARBITRATION PROVISIONS

1.        Dispute Resolution. For purposes of this Exhibit J, the term “Claims”
means any disputes, claims, demands, causes of action, requests for injunctive
relief, requests for specific performance, liabilities, damages, losses, or
controversies whatsoever arising from, related to, or connected with the
transactions contemplated in the Transaction Documents and any communications
between the parties related thereto, including without limitation any claims of
mutual mistake, mistake, fraud, misrepresentation, failure of formation, failure
of consideration, promissory estoppel, unconscionability, failure of condition
precedent, rescission, and any statutory claims, tort claims, contract claims,
or claims to void, invalidate or terminate the Agreement (or these Arbitration
Provisions (defined below)) or any of the other Transaction Documents. The term
“Claims” specifically excludes a dispute over Calculations. The parties to the
Agreement (the “parties”) hereby agree that the arbitration provisions set forth
in this Exhibit J (“Arbitration Provisions”) are binding on each of them. As a
result, any attempt to rescind the Agreement (or these Arbitration Provisions)
or declare the Agreement (or these Arbitration Provisions) or any other
Transaction Document invalid or unenforceable for any reason is subject to these
Arbitration Provisions. These Arbitration Provisions shall also survive any
termination or expiration of the Agreement. Any capitalized term not defined in
these Arbitration Provisions shall have the meaning set forth in the Agreement.

2.        Arbitration. Except as otherwise provided herein, all Claims must be
submitted to arbitration (“Arbitration”) to be conducted exclusively in Salt
Lake County or Utah County, Utah and pursuant to the terms set forth in these
Arbitration Provisions. Subject to the arbitration appeal right provided for in
Paragraph 5 below (the “Appeal Right”), the parties agree that the award of the
arbitrator rendered pursuant to Paragraph 4 below (the “Arbitration Award”)
shall be (a) final and binding upon the parties, (b) the sole and exclusive
remedy between them regarding any Claims, counterclaims, issues, or accountings
presented or pleaded to the arbitrator, and (c) promptly payable in United
States dollars free of any tax, deduction or offset (with respect to monetary
awards). Subject to the Appeal Right, any costs or fees, including without
limitation attorneys’ fees, incurred in connection with or incident to enforcing
the Arbitration Award shall, to the maximum extent permitted by law, be charged
against the party resisting such enforcement. The Arbitration Award shall
include default interest (as defined or otherwise provided for in the applicable
Note (“Default Interest”)) (with respect to monetary awards) at the rate
specified in the applicable Note for Default Interest both before and after the
Arbitration Award. Judgment upon the Arbitration Award will be entered and
enforced by any state or federal court sitting in Salt Lake County, Utah.

3.        The Arbitration Act. The parties hereby incorporate herein the
provisions and procedures set forth in the Utah Uniform Arbitration Act, U.C.A.
§ 78B–11–101 et seq. (as amended or superseded from time to time, the
“Arbitration Act”). Notwithstanding the foregoing, pursuant to, and to the
maximum extent permitted by, Section 105 of the Arbitration Act, in the event of
conflict or variation between the terms of these Arbitration Provisions and the
provisions of the Arbitration Act, the terms of these Arbitration Provisions
shall control and the parties hereby waive or otherwise agree to vary the effect
of all requirements of the Arbitration Act that may conflict with or vary from
these Arbitration Provisions.

4.        Arbitration Proceedings. Arbitration between the parties will be
subject to the following:

            4.       1 Initiation of Arbitration. Pursuant to Section 110 of the
Arbitration Act, the parties agree that a party may initiate Arbitration by
giving written notice to the other party (“Arbitration Notice”) in the same
manner that notice is permitted under Section 12.12 of the Agreement; provided,
however, that the Arbitration Notice may not be given by email or fax.
Arbitration will be deemed initiated as of the date that the Arbitration Notice
is deemed delivered to such other party under Section 12.12 of the Agreement
(the “Service Date”). After the Service Date, information may be delivered, and
notices may be given, by email or fax pursuant to Section 12.12 of the Agreement
or any other method permitted thereunder. The Arbitration Notice must describe
the nature of the controversy, the remedies sought, and the election to commence
Arbitration proceedings. All Claims in the Arbitration Notice must be pleaded
consistent with the Utah Rules of Civil Procedure.

Arbitration Provisions, Page 1

--------------------------------------------------------------------------------

            4.2        Selection and Payment of Arbitrator.

                           (a) Within ten (10) calendar days after the Service
Date, Investor shall select and submit to Company the names of three (3)
arbitrators that are designated as “neutrals” or qualified arbitrators by Utah
ADR Services (http://www.utahadrservices.com) (such three (3) designated persons
hereunder are referred to herein as the “Proposed Arbitrators”). For the
avoidance of doubt, each Proposed Arbitrator must be qualified as a “neutral”
with Utah ADR Services. Within five (5) calendar days after Investor has
submitted to Company the names of the Proposed Arbitrators, Company must select,
by written notice to Investor, one (1) of the Proposed Arbitrators to act as the
arbitrator for the parties under these Arbitration Provisions. If Company fails
to select one of the Proposed Arbitrators in writing within such 5–day period,
then Investor may select the arbitrator from the Proposed Arbitrators by
providing written notice of such selection to Company.

                           (b) If Investor fails to submit to Company the
Proposed Arbitrators within ten (10) calendar days after the Service Date
pursuant to subparagraph (a) above, then Company may at any time prior to
Investor so designating the Proposed Arbitrators, identify the names of three
(3) arbitrators that are designated as “neutrals” or qualified arbitrators by
Utah ADR Service by written notice to Investor. Investor may then, within five
(5) calendar days after Company has submitted notice of its Proposed Arbitrators
to Investor, select, by written notice to Company, one (1) of the Proposed
Arbitrators to act as the arbitrator for the parties under these Arbitration
Provisions. If Investor fails to select in writing and within such 5–day period
one (1) of the three (3) Proposed Arbitrators selected by Company, then Company
may select the arbitrator from its three (3) previously selected Proposed
Arbitrators by providing written notice of such selection to Investor.

                           (c) If a Proposed Arbitrator chosen to serve as
arbitrator declines or is otherwise unable to serve as arbitrator, then the
party that selected such Proposed Arbitrator may select one (1) of the other
three (3) Proposed Arbitrators within three (3) calendar days of the date the
chosen Proposed Arbitrator declines or notifies the parties he or she is unable
to serve as arbitrator. If all three (3) Proposed Arbitrators decline or are
otherwise unable to serve as arbitrator, then the arbitrator selection process
shall begin again in accordance with this Paragraph 4.2.

                           (d) The date that the Proposed Arbitrator selected
pursuant to this Paragraph 4.2 agrees in writing (including via email) delivered
to both parties to serve as the arbitrator hereunder is referred to herein as
the “Arbitration Commencement Date”. If an arbitrator resigns or is unable to
act during the Arbitration, a replacement arbitrator shall be chosen in
accordance with this Paragraph 4.2 to continue the Arbitration. If Utah ADR
Services ceases to exist or to provide a list of neutrals, then the arbitrator
shall be selected under the then prevailing rules of the American Arbitration
Association.

                           (e) Subject to Paragraph 4.10 below, the cost of the
arbitrator must be paid equally by both parties. Subject to Paragraph 4.10
below, if one party refuses or fails to pay its portion of the arbitrator fee,
then the other party can advance such unpaid amount (subject to the accrual of
Default Interest thereupon), with such amount being added to or subtracted from,
as applicable, the Arbitration Award.

            4.3        Applicability of Certain Utah Rules. The parties agree
that the Arbitration shall be conducted generally in accordance with the Utah
Rules of Civil Procedure and the Utah Rules of Evidence. More specifically, the
Utah Rules of Civil Procedure shall apply, without limitation, to the filing of
any pleadings, motions or memoranda, the conducting of discovery, and the taking
of any depositions. The Utah Rules of Evidence shall apply to any hearings,
whether telephonic or in person, held by the arbitrator. Notwithstanding the
foregoing, it is the parties’ intent that the incorporation of such rules will
in no event supersede these Arbitration Provisions. In the event of any conflict
between the Utah Rules of Civil Procedure or the Utah Rules of Evidence and
these Arbitration Provisions, these Arbitration Provisions shall control.

            4.4        Answer and Default. An answer and any counterclaims to
the Arbitration Notice shall be required to be delivered to the party initiating
the Arbitration within twenty (20) calendar days after the Arbitration
Commencement Date. If an answer is not delivered by the required deadline, the
arbitrator must provide written notice to the defaulting party stating that the
arbitrator will enter a default award against such party if such party does not
file an answer within five (5) calendar days of receipt of such notice. If an
answer is not filed within the five (5) day extension period, the arbitrator
must render a default award, consistent with the relief requested in the
Arbitration Notice, against a party that fails to submit an answer within such
time period.

Arbitration Provisions, Page 2

--------------------------------------------------------------------------------

            4.5        Related Litigation. The party that delivers the
Arbitration Notice to the other party shall have the option to also commence
concurrent legal proceedings with any state or federal court sitting in Salt
Lake County, Utah (“Litigation Proceedings”), subject to the following: (a) the
complaint in the Litigation Proceedings is to be substantially similar to the
claims set forth in the Arbitration Notice, provided that an additional cause of
action to compel arbitration will also be included therein, (b) so long as the
other party files an answer to the complaint in the Litigation Proceedings and
an answer to the Arbitration Notice, the Litigation Proceedings will be stayed
pending an Arbitration Award (or Appeal Panel Award (defined below), as
applicable) hereunder, (c) if the other party fails to file an answer in the
Litigation Proceedings or an answer in the Arbitration proceedings, then the
party initiating Arbitration shall be entitled to a default judgment consistent
with the relief requested, to be entered in the Litigation Proceedings, and (d)
any legal or procedural issue arising under the Arbitration Act that requires a
decision of a court of competent jurisdiction may be determined in the
Litigation Proceedings. Any award of the arbitrator (or of the Appeal Panel
(defined below)) may be entered in such Litigation Proceedings pursuant to the
Arbitration Act.

            4.6        Discovery. Pursuant to Section 118(8) of the Arbitration
Act, the parties agree that discovery shall be conducted as follows:

                           (a)        Written discovery will only be allowed if
the likely benefits of the proposed written discovery outweigh the burden or
expense thereof, and the written discovery sought is likely to reveal
information that will satisfy a specific element of a claim or defense already
pleaded in the Arbitration. The party seeking written discovery shall always
have the burden of showing that all of the standards and limitations set forth
in these Arbitration Provisions are satisfied. The scope of discovery in the
Arbitration proceedings shall also be limited as follows:

            (i)        To facts directly connected with the transactions
contemplated by the Agreement.

             (ii)       To facts and information that cannot be obtained from
another source or in another manner that is more convenient, less burdensome or
less expensive than in the manner requested.

                           (b)        No party shall be allowed (i) more than
fifteen (15) interrogatories (including discrete subparts), (ii) more than
fifteen (15) requests for admission (including discrete subparts), (iii) more
than ten (10) document requests (including discrete subparts), or (iv) more than
three (3) depositions (excluding expert depositions) for a maximum of seven (7)
hours per deposition. The costs associated with depositions will be borne by the
party taking the deposition. The party defending the deposition will submit a
notice to the party taking the deposition of the estimated attorneys’ fees that
such party expects to incur in connection with defending the deposition. If the
party defending the deposition fails to submit an estimate of attorneys’ fees
within five (5) calendar days of its receipt of a deposition notice, then such
party shall be deemed to have waived its right to the estimated attorneys’ fees.
The party taking the deposition must pay the party defending the deposition the
estimated attorneys’ fees prior to taking the deposition, unless such obligation
is deemed to be waived as set forth in the immediately preceding sentence. If
the party taking the deposition believes that the estimated attorneys’ fees are
unreasonable, such party may submit the issue to the arbitrator for a decision.
All depositions will be taken in Utah.

                           (c)        All discovery requests (including document
production requests included in deposition notices) must be submitted in writing
to the arbitrator and the other party. The party submitting the written
discovery requests must include with such discovery requests a detailed
explanation of how the proposed discovery requests satisfy the requirements of
these Arbitration Provisions and the Utah Rules of Civil Procedure. The
receiving party will then be allowed, within five (5) calendar days of receiving
the proposed discovery requests, to submit to the arbitrator an estimate of the
attorneys’ fees and costs associated with responding to such written discovery
requests and a written challenge to each applicable discovery request. After
receipt of an estimate of attorneys’ fees and costs and/or challenge(s) to one
or more discovery requests, consistent with subparagraph (c) above, the
arbitrator will within three (3) calendar days make a finding as to the likely
attorneys’ fees and costs associated with responding to the discovery requests
and issue an order that (i) requires the requesting party to prepay the
attorneys’ fees and costs associated with responding to the discovery requests,
and (ii) requires the responding party to respond to the discovery requests as
limited by the arbitrator within twenty–five (25) calendar days of the
arbitrator’s finding with respect to such discovery requests. If a party
entitled to submit an estimate of attorneys’ fees and costs and/or a challenge
to discovery requests fails to do so within such 5–day period, the arbitrator
will make a finding that (A) there are no attorneys’ fees or costs associated
with responding to such discovery requests, and (B) the responding party must
respond to such discovery requests (as may be limited by the arbitrator) within
twenty–five (25) calendar days of the arbitrator’s finding with respect to such
discovery requests. Any party submitting any written discovery requests,
including without limitation interrogatories, requests for production subpoenas
to a party or a third party, or requests for admissions, must prepay the
estimated attorneys’ fees and costs, before the responding party has any
obligation to produce or respond to the same, unless such obligation is deemed
waived as set forth above.

Arbitration Provisions, Page 3

--------------------------------------------------------------------------------

                           (d)        In order to allow a written discovery
request, the arbitrator must find that the discovery request satisfies the
standards set forth in these Arbitration Provisions and the Utah Rules of Civil
Procedure. The arbitrator must strictly enforce these standards. If a discovery
request does not satisfy any of the standards set forth in these Arbitration
Provisions or the Utah Rules of Civil Procedure, the arbitrator may modify such
discovery request to satisfy the applicable standards, or strike such discovery
request in whole or in part.

                           (e)        Each party may submit expert reports (and
rebuttals thereto), provided that such reports must be submitted within sixty
(60) days of the Arbitration Commencement Date. Each party will be allowed a
maximum of two (2) experts. Expert reports must contain the following: (i) a
complete statement of all opinions the expert will offer at trial and the basis
and reasons for them; (ii) the expert’s name and qualifications, including a
list of all the expert’s publications within the preceding ten (10) years, and a
list of any other cases in which the expert has testified at trial or in a
deposition or prepared a report within the preceding ten (10) years; and (iii)
the compensation to be paid for the expert’s report and testimony. The parties
are entitled to depose any other party’s expert witness one (1) time for no more
than four (4) hours. An expert may not testify in a party’s case–in–chief
concerning any matter not fairly disclosed in the expert report.

            4.6        Dispositive Motions. Each party shall have the right to
submit dispositive motions pursuant Rule 12 or Rule 56 of the Utah Rules of
Civil Procedure (a “Dispositive Motion”). The party submitting the Dispositive
Motion may, but is not required to, deliver to the arbitrator and to the other
party a memorandum in support (the “Memorandum in Support”) of the Dispositive
Motion. Within seven (7) calendar days of delivery of the Memorandum in Support,
the other party shall deliver to the arbitrator and to the other party a
memorandum in opposition to the Memorandum in Support (the “Memorandum in
Opposition”). Within seven (7) calendar days of delivery of the Memorandum in
Opposition, as applicable, the party that submitted the Memorandum in Support
shall deliver to the arbitrator and to the other party a reply memorandum to the
Memorandum in Opposition (“Reply Memorandum”). If the applicable party shall
fail to deliver the Memorandum in Opposition as required above, or if the other
party fails to deliver the Reply Memorandum as required above, then the
applicable party shall lose its right to so deliver the same, and the
Dispositive Motion shall proceed regardless.

            4.7        Confidentiality. All information disclosed by either
party (or such party’s agents) during the Arbitration process (including without
limitation information disclosed during the discovery process or any Appeal
(defined below)) shall be considered confidential in nature. Each party agrees
not to disclose any confidential information received from the other party (or
its agents) during the Arbitration process (including without limitation during
the discovery process or any Appeal) unless (a) prior to or after the time of
disclosure such information becomes public knowledge or part of the public
domain, not as a result of any inaction or action of the receiving party or its
agents, (b) such information is required by a court order, subpoena or similar
legal duress to be disclosed if such receiving party has notified the other
party thereof in writing and given it a reasonable opportunity to obtain a
protective order from a court of competent jurisdiction prior to disclosure, or
(c) such information is disclosed to the receiving party’s agents,
representatives and legal counsel on a need to know basis who each agree in
writing not to disclose such information to any third party. Pursuant to Section
118(5) of the Arbitration Act, the arbitrator is hereby authorized and directed
to issue a protective order to prevent the disclosure of privileged information
and confidential information upon the written request of either party.

            4.8        Authorization; Timing; Scheduling Order. Subject to all
other portions of these Arbitration Provisions, the parties hereby authorize and
direct the arbitrator to take such actions and make such rulings as may be
necessary to carry out the parties’ intent for the Arbitration proceedings to be
efficient and expeditious. Pursuant to Section 120 of the Arbitration Act, the
parties hereby agree that an Arbitration Award must be made within one hundred
twenty (120) calendar days after the Arbitration Commencement Date. The
arbitrator is hereby authorized and directed to hold a scheduling conference
within ten (10) calendar days after the Arbitration Commencement Date in order
to establish a scheduling order with various binding deadlines for discovery,
expert testimony, and the submission of documents by the parties to enable the
arbitrator to render a decision prior to the end of such 120–day period.

Arbitration Provisions, Page 4

--------------------------------------------------------------------------------

            4.9        Relief. The arbitrator shall have the right to award or
include in the Arbitration Award (or in a preliminary ruling) any relief which
the arbitrator deems proper under the circumstances, including, without
limitation, specific performance and injunctive relief, provided that the
arbitrator may not award exemplary or punitive damages.

            4.10      Fees and Costs. As part of the Arbitration Award, the
arbitrator is hereby directed to require the losing party (the party being
awarded the least amount of money by the arbitrator, which, for the avoidance of
doubt, shall be determined without regard to any statutory fines, penalties,
fees, or other charges awarded to any party) to (a) pay the full amount of any
unpaid costs and fees of the Arbitration, and (b) reimburse the prevailing party
for all reasonable attorneys’ fees, arbitrator costs and fees, deposition costs,
other discovery costs, and other expenses, costs or fees paid or otherwise
incurred by the prevailing party in connection with the Arbitration.

5.        Arbitration Appeal.

            5.1        Initiation of Appeal. Following the entry of the
Arbitration Award, either party (the “Appellant”) shall have a period of thirty
(30) calendar days in which to notify the other party (the “Appellee”), in
writing, that the Appellant elects to appeal (the “Appeal”) the Arbitration
Award (such notice, an “Appeal Notice”) to a panel of arbitrators as provided in
Paragraph 5.2 below. The date the Appellant delivers an Appeal Notice to the
Appellee is referred to herein as the “Appeal Date”. The Appeal Notice must be
delivered to the Appellee in accordance with the provisions of Paragraph 4.1
above with respect to delivery of an Arbitration Notice. In addition, together
with delivery of the Appeal Notice to the Appellee, the Appellant must also pay
for (and provide proof of such payment to the Appellee together with delivery of
the Appeal Notice) a bond in the amount of 110% of the sum the Appellant owes to
the Appellee as a result of the Arbitration Award the Appellant is appealing. In
the event an Appellant delivers an Appeal Notice to the Appellee (together with
proof of payment of the applicable bond) in compliance with the provisions of
this Paragraph 5.1, the Appeal will occur as a matter of right and, except as
specifically set forth herein, will not be further conditioned. In the event a
party does not deliver an Appeal Notice (along with proof of payment of the
applicable bond) to the other party within the deadline prescribed in this
Paragraph 5.1, such party shall lose its right to appeal the Arbitration Award.
If no party delivers an Appeal Notice (along with proof of payment of the
applicable bond) to the other party within the deadline described in this
Paragraph 5.1, the Arbitration Award shall be final. The parties acknowledge and
agree that any Appeal shall be deemed part of the parties’ agreement to
arbitrate for purposes of these Arbitration Provisions and the Arbitration Act.

            5.2        Selection and Payment of Appeal Panel. In the event an
Appellant delivers an Appeal Notice to the Appellee (together with proof of
payment of the applicable bond) in compliance with the provisions of Paragraph
5.1 above, the Appeal will be heard by a three (3) person arbitration panel (the
“ Appeal Panel”).

                           (a)        Within ten (10) calendar days after the
Appeal Date, the Appellee shall select and submit to the Appellant the names of
five (5) arbitrators that are designated as “neutrals” or qualified arbitrators
by Utah ADR Services (http://www.utahadrservices.com) (such five (5) designated
persons hereunder are referred to herein as the “Proposed Appeal Arbitrators”).
For the avoidance of doubt, each Proposed Appeal Arbitrator must be qualified as
a “neutral” with Utah ADR Services, and shall not be the arbitrator who rendered
the Arbitration Award being appealed (the “Original Arbitrator”). Within five
(5) calendar days after the Appellee has submitted to the Appellant the names of
the Proposed Appeal Arbitrators, the Appellant must select, by written notice to
the Appellee, three (3) of the Proposed Appeal Arbitrators to act as the members
of the Appeal Panel. If the Appellant fails to select three (3) of the Proposed
Appeal Arbitrators in writing within such 5–day period, then the Appellee may
select such three (3) arbitrators from the Proposed Appeal Arbitrators by
providing written notice of such selection to the Appellant.

                           (b)        If the Appellee fails to submit to the
Appellant the names of the Proposed Appeal Arbitrators within ten (10) calendar
days after the Appeal Date pursuant to subparagraph (a) above, then the
Appellant may at any time prior to the Appellee so designating the Proposed
Appeal Arbitrators, identify the names of five (5) arbitrators that are
designated as “neutrals” or qualified arbitrators by Utah ADR Service (none of
whom may be the Original Arbitrator) by written notice to the Appellee. The
Appellee may then, within five (5) calendar days after the Appellant has
submitted notice of its selected arbitrators to the Appellee, select, by written
notice to the Appellant, three (3) of such selected arbitrators to serve on the
Appeal Panel. If the Appellee fails to select in writing within such 5–day
period three (3) of the arbitrators selected by the Appellant to serve as the
members of the Appeal Panel, then the Appellant may select the three (3) members
of the Appeal Panel from the Appellant’s list of five (5) arbitrators by
providing written notice of such selection to the Appellee.

Arbitration Provisions, Page 5

--------------------------------------------------------------------------------

                           (c)        If a selected Proposed Appeal Arbitrator
declines or is otherwise unable to serve, then the party that selected such
Proposed Appeal Arbitrator may select one (1) of the other five (5) designated
Proposed Appeal Arbitrators within three (3) calendar days of the date a chosen
Proposed Appeal Arbitrator declines or notifies the parties he or she is unable
to serve as an arbitrator. If at least three (3) of the five (5) designated
Proposed Appeal Arbitrators decline or are otherwise unable to serve, then the
Proposed Appeal Arbitrator selection process shall begin again in accordance
with this Paragraph 5.2; provided, however, that any Proposed Appeal Arbitrators
who have already agreed to serve shall remain on the Appeal Panel.

                           (d)        The date that all three (3) Proposed
Appeal Arbitrators selected pursuant to this Paragraph 5.2 agree in writing
(including via email) delivered to both the Appellant and the Appellee to serve
as members of the Appeal Panel hereunder is referred to herein as the “Appeal
Commencement Date”. No later than five (5) calendar days after the Appeal
Commencement Date, the Appellee shall designate in writing (including via email)
to the Appellant and the Appeal Panel the name of one (1) of the three (3)
members of the Appeal Panel to serve as the lead arbitrator in the Appeal
proceedings. Each member of the Appeal Panel shall be deemed an arbitrator for
purposes of these Arbitration Provisions and the Arbitration Act, provided that,
in conducting the Appeal, the Appeal Panel may only act or make determinations
upon the approval or vote of no less than the majority vote of its members, as
announced or communicated by the lead arbitrator on the Appeal Panel. If an
arbitrator on the Appeal Panel ceases or is unable to act during the Appeal
proceedings, a replacement arbitrator shall be chosen in accordance with
Paragraph 5.2 above to continue the Appeal as a member of the Appeal Panel. If
Utah ADR Services ceases to exist or to provide a list of neutrals, then the
arbitrators for the Appeal Panel shall be selected under the then prevailing
rules of the American Arbitration Association.

                           (d)        Subject to Paragraph 5.7 below, the cost
of the Appeal Panel must be paid entirely by the Appellant.

            5.3        Appeal Procedure. The Appeal will be deemed an appeal of
the entire Arbitration Award. In conducting the Appeal, the Appeal Panel shall
conduct a de novo review of all Claims described or otherwise set forth in the
Arbitration Notice. Subject to the foregoing and all other provisions of this
Paragraph 5, the Appeal Panel shall conduct the Appeal in a manner the Appeal
Panel considers appropriate for a fair and expeditious disposition of the
Appeal, may hold one or more hearings and permit oral argument, and may review
all previous evidence and discovery, together with all briefs, pleadings and
other documents filed with the Original Arbitrator (as well as any documents
filed with the Appeal Panel pursuant to Paragraph 5.4(a) below). Notwithstanding
the foregoing, in connection with the Appeal, the Appeal Panel shall not permit
the parties to conduct any additional discovery or raise any new Claims to be
arbitrated, shall not permit new witnesses or affidavits, and shall not base any
of its findings or determinations on the Original Arbitrator’s findings or the
Arbitration Award.

            5.4        Timing.

                           (a)        Within seven (7) calendar days of the
Appeal Commencement Date, the Appellant (i) shall deliver or cause to be
delivered to the Appeal Panel copies of the Appeal Notice, all discovery
conducted in connection with the Arbitration, and all briefs, pleadings and
other documents filed with the Original Arbitrator (which material Appellee
shall have the right to review and supplement if necessary), and (ii) may, but
is not required to, deliver to the Appeal Panel and to the Appellee a Memorandum
in Support of the Appellant’s arguments concerning or position with respect to
all Claims, counterclaims, issues, or accountings presented or pleaded in the
Arbitration. Within seven (7) calendar days of the Appellant’s delivery of the
Memorandum in Support, as applicable, the Appellee shall deliver to the Appeal
Panel and to the Appellant a Memorandum in Opposition to the Memorandum in
Support. Within seven (7) calendar days of the Appellee’s delivery of the
Memorandum in Opposition, as applicable, the Appellant shall deliver to the
Appeal Panel and to the Appellee a Reply Memorandum to the Memorandum in
Opposition. If the Appellant shall fail to substantially comply with the
requirements of clause (i) of this subparagraph (a), the Appellant shall lose
its right to appeal the Arbitration Award, and the Arbitration Award shall be
final. If the Appellee shall fail to deliver the Memorandum in Opposition as
required above, or if the Appellant shall fail to deliver the Reply Memorandum
as required above, then the Appellee or the Appellant, as the case may be, shall
lose its right to so deliver the same, and the Appeal shall proceed regardless.

Arbitration Provisions, Page 6

--------------------------------------------------------------------------------

                          (b)        Subject to subparagraph (a) above, the
parties hereby agree that the Appeal must be heard by the Appeal Panel within
thirty (30) calendar days of the Appeal Commencement Date, and that the Appeal
Panel must render its decision within thirty (30) calendar days after the Appeal
is heard (and in no event later than sixty (60) calendar days after the Appeal
Commencement Date).

            5.5        Appeal Panel Award. The Appeal Panel shall issue its
decision (the “Appeal Panel Award”) through the lead arbitrator on the Appeal
Panel. Notwithstanding any other provision contained herein, the Appeal Panel
Award shall (a) supersede in its entirety and make of no further force or effect
the Arbitration Award (provided that any protective orders issued by the
Original Arbitrator shall remain in full force and effect), (b) be final and
binding upon the parties, with no further rights of appeal, (c) be the sole and
exclusive remedy between the parties regarding any Claims, counterclaims,
issues, or accountings presented or pleaded in the Arbitration, and (d) be
promptly payable in United States dollars free of any tax, deduction or offset
(with respect to monetary awards). Any costs or fees, including without
limitation attorneys’ fees, incurred in connection with or incident to enforcing
the Appeal Panel Award shall, to the maximum extent permitted by law, be charged
against the party resisting such enforcement. The Appeal Panel Award shall
include Default Interest (with respect to monetary awards) at the rate specified
in applicable Note for Default Interest both before and after the Arbitration
Award. Judgment upon the Appeal Panel Award will be entered and enforced by a
state or federal court sitting in Salt Lake County, Utah.

            5.6        Relief. The Appeal Panel shall have the right to award or
include in the Appeal Panel Award any relief which the Appeal Panel deems proper
under the circumstances, including, without limitation, specific performance and
injunctive relief, provided that the Appeal Panel may not award exemplary or
punitive damages.

            5.7        Fees and Costs. As part of the Appeal Panel Award, the
Appeal Panel is hereby directed to require the losing party (the party being
awarded the least amount of money by the arbitrator, which, for the avoidance of
doubt, shall be determined without regard to any statutory fines, penalties,
fees, or other charges awarded to any party) to (a) pay the full amount of any
unpaid costs and fees of the Arbitration and the Appeal Panel, and (b) reimburse
the prevailing party (the party being awarded the most amount of money by the
Appeal Panel, which, for the avoidance of doubt, shall be determined without
regard to any statutory fines, penalties, fees, or other charges awarded to any
part) the reasonable attorneys’ fees, arbitrator and Appeal Panel costs and
fees, deposition costs, other discovery costs, and other expenses, costs or fees
paid or otherwise incurred by the prevailing party in connection with the
Arbitration (including without limitation in connection with the Appeal).

6. Miscellaneous.

            6.1        Severability. If any part of these Arbitration Provisions
is found to violate or be illegal under applicable law, then such provision
shall be modified to the minimum extent necessary to make such provision
enforceable under applicable law, and the remainder of the Arbitration
Provisions shall remain unaffected and in full force and effect.

            6.2        Governing Law. These Arbitration Provisions shall be
governed by the laws of the State of Utah without regard to the conflict of laws
principles therein.

            6.3        Interpretation. The headings of these Arbitration
Provisions are for convenience of reference only and shall not form part of, or
affect the interpretation of, these Arbitration Provisions.

            6.4        Waiver. No waiver of any provision of these Arbitration
Provisions shall be effective unless it is in the form of a writing signed by
the party granting the waiver.

            6.5        Time is of the Essence. Time is expressly made of the
essence with respect to each and every provision of these Arbitration
Provisions.

[Remainder of page intentionally left blank]

Arbitration Provisions, Page 7

--------------------------------------------------------------------------------