EXHIBIT 10.55
 
SECURITIES PURCHASE AGREEMENT
 
This Securities Purchase Agreement (this “Agreement”) is dated as of January 13,
2012, between United States Antimony Corporation, a Montana corporation (the
“Company”), and each purchaser identified on the signature pages hereto (each,
including its successors and assigns, a “Purchaser” and collectively, the
“Purchasers”).
 
WHEREAS, subject to the terms and conditions set forth in this Agreement and
pursuant to Section 4(2) of the Securities Act of 1933, as amended (the
“Securities Act”), and Rule 506 promulgated thereunder, the Company desires to
issue and sell to each Purchaser, and each Purchaser, severally and not jointly,
desires to purchase from the Company, securities of the Company as more fully
described in this Agreement.
 
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agree
as follows:
 
 
ARTICLE I.
DEFINITIONS
 
1.1  Definitions.  The following terms have the meanings set forth in this
Section 1.1:
 
“144 Sale” shall have the meaning ascribed to such term in Section 4.1(c).
 
“144 Sale Shares” shall have the meaning ascribed to such term in Section
4.1(c).
 
“8-K Filing” shall mean the current report on Form 8-K filed on EDGAR with the
Commission disclosing the sale of equity securities pursuant to this Agreement
and attaching as exhibits thereto all material Transaction Documents, including,
without limitation, this Agreement and the form of Warrant.
 
“Action” shall have the meaning ascribed to such term in Section 3.1(j).
 
“Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person, as such terms are used in and construed under Rule 405 under the
Securities Act.
 
“Articles of Incorporation” shall have the meaning ascribed to it in Section
3.1(h).
 
“Available Undersubscription Amount” have the meaning ascribed to it in Section
4.11(c).
 
“Basic Amount” have the meaning ascribed to it in Section 4.11(c)(ii).
 
“Board of Directors” means the board of directors of the Company.
 
 
 

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“Business Day” means any day except any Saturday, any Sunday, any day which is a
federal legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by law or other
governmental action to close.
 
“Bylaws” shall have the meaning ascribed to it in Section 3.1(h).
 
“Closing” means the closing of the purchase and sale of the Securities pursuant
to Section 2.1.
 
“Closing Date” means the Business Day on which all of the Transaction Documents
have been executed and delivered by the applicable parties thereto, and all
conditions precedent to (i) the Purchasers’ obligations to pay the Subscription
Amount and (ii) the Company’s obligations to deliver the Securities, in each
case, have been satisfied or waived.
 
“Closing Statement” means the Closing Statement in the form on Annex A attached
hereto.
 
“Commission” means the United States Securities and Exchange Commission.
 
“Common Stock” means the common stock of the Company, par value $0.01 per share,
and any other class of securities into which such securities may hereafter be
reclassified or changed.
 
“Company Counsel” means Stoel Rives LLP, with offices located at 101 S. Capitol
Blvd., Suite 1900, Boise, Idaho 83702.
 
“Contingent Obligation” means, as to any Person, any direct or indirect
liability, contingent or otherwise, of that Person with respect to any
indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the primary
effect thereof, is to provide assurance to the obligee of such liability that
such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect thereto;
 
“Disclosure Schedules” shall have the meaning ascribed to such term in
Section 3.1.
 
“Escrow Agent” means Computershare Trust Company, N.A., with offices located at
350 Indiana St., Suite 750, Golden, Colorado  80401.
 
“Escrow Agreement” means the escrow agreement entered into prior to the date
hereof, by and among the Company and the Escrow Agent in substantially the form
of Exhibit A attached hereto pursuant to which the Purchasers shall deposit
Subscription Amounts with the Escrow Agent to be applied to the transactions
contemplated hereunder.
 
 
 

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“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

“GAAP” shall have the meaning ascribed to such term in Section 3.1(i).
 
“Indebtedness” of any Person means, without duplication (A) all indebtedness for
borrowed money, (B) all obligations issued, undertaken or assumed as the
deferred purchase price of property or services (including, without limitation,
“capital leases” in accordance with GAAP) (other than trade payables entered
into in the ordinary course of business), (C) all reimbursement or payment
obligations with respect to letters of credit, surety bonds and other similar
instruments, (D) all obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses, (E) all indebtedness
created or arising under any conditional sale or other title retention
agreement, or incurred as financing, in either case with respect to any property
or assets acquired with the proceeds of such indebtedness (even though the
rights and remedies of the seller or bank under such agreement in the event of
default are limited to repossession or sale of such property), (F) all monetary
obligations under any leasing or similar arrangement which, in connection with
GAAP, consistently applied for the periods covered thereby, is classified as a
capital lease, (G) all indebtedness referred to in clauses (A) through (F) above
secured by (or for which the holder of such indebtedness has an existing right,
contingent or otherwise, to be secured by) any mortgage, lien, pledge, charge,
security interest or other encumbrance upon or in any property or assets
(including accounts and contract rights) owned by any Person, even though the
Person which owns such assets or property has not assumed or become liable for
the payment of such indebtedness, and (H) all Contingent Obligations in respect
of indebtedness or obligations of others of the kinds referred to in clauses (A)
through (G) above.
 
“Intellectual Property Rights” shall have the meaning ascribed to such term in
Section 3.1(w).
 
“Liens” means a lien, charge, security interest, encumbrance, right of first
refusal, preemptive right or other restriction.
 
“Material Adverse Effect” shall mean (i) a material adverse effect on the
legality, validity or enforceability of any Transaction Document, (ii) a
material adverse effect on the results of operations, assets, business,
prospects or condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole, or (iii) a material adverse effect on the
Company’s ability to perform in any material respect on a timely basis its
obligations under any Transaction Document.
 
“Material Permits” shall have the meaning ascribed to such term in Section
3.1(k).
 
“Notice of Acceptance” have the meaning ascribed to it in Section 4.11(c)(ii).
 
“Offer” shall have the meaning ascribed to it in Section 4.11(c)(i).
 
 
 

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“Offer Notice” shall have the meaning ascribed to it in Section 4.11(c)(i).
 
“Offer Period” have the meaning ascribed to it in Section 4.11(c)(ii).
 
“Offered Securities” have the meaning ascribed to it in Section 4.11(c)(i).
 
“Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.
 
“Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.
 
“Public Information Failure” shall have the meaning ascribed to it in
Section 4.2(b).
 
“Public Information Failure Payments” shall have the meaning ascribed to it in
Section 4.2(b).
 
“Refused Securities” shall have the meaning ascribed to it in Section
4.11(c)(iii).
 
“Required Approvals” shall have the meaning ascribed to such term in
Section 3.1(f).
 
“Required Minimum” means, as of any date, the maximum aggregate number of Shares
then issued or potentially issuable in the future pursuant to the Transaction
Documents, including, without limitation, 100% of the shares of Common Stock
underlying the Warrants, ignoring any conversion or exercise limits set forth
therein.
 
“Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
 
“SEC Reports” shall have the meaning ascribed to such term in Section 3.1(i).
 
“Securities” means the Shares, the Warrants and the Warrant Shares.
 
“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
 
“Shares” means the shares of Common Stock issued or issuable to each Purchaser
pursuant to this Agreement.
 
“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO
under the Exchange Act (but shall not be deemed to include the location and/or
reservation of borrowable shares of Common Stock). 
 
 
 

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“Subscription Amount” means, as to each Purchaser, the aggregate amount to be
paid for Shares and Warrants purchased hereunder as specified below such
Purchaser’s name on the signature page of this Agreement and next to the heading
“Subscription Amount,” in United States dollars and in immediately available
funds.
 
“Subsequent Placement” shall have the meaning ascribed to it in Section 4.11(b).
 
“Subsequent Placement Agreement” shall have the meaning ascribed to it in
Section 4.11(c)(iii).
 
“Subsequent Placement Documents” shall have the meaning ascribed to it in
Section 4.11(c)(vii).
 
“Subsidiary” means any subsidiary of the Company as set forth on Schedule 3.1(b)
and shall, where applicable, also include any direct or indirect subsidiary of
the Company formed or acquired after the date hereof.
 
“Transaction Documents” means this Agreement, the Warrants, the Escrow
Agreement, all exhibits and schedules thereto and hereto and any other documents
or agreements executed in connection with the transactions contemplated
hereunder.
 
“Transfer Agent” means Columbia Stock Transfer Company, the current transfer
agent of the Company, with a mailing address of 601 E. Seltice Way, Suite 202,
Post Falls, Idaho 83854, and any successor transfer agent of the Company.
 
“Trigger Date” shall have the meaning ascribed to it in Section 4.11(b).
 
“Undersubscription Amount” have the meaning ascribed to it in Section
4.11(c)(i).
 
“Warrants” means the Common Stock purchase warrants delivered to the Purchasers
at the Closing in accordance with Section 2.2(a) hereof, which warrants shall be
exercisable as of the Issue Date (as defined therein).  The Warrants shall have
an exercise price of $2.50 and a term of exercise equal to 2 years from the
Issue Date, in the form of Exhibit D attached hereto.
 
“Warrant Shares” means the shares of Common Stock issuable upon exercise of the
Warrants.
 
 
ARTICLE II.
PURCHASE AND SALE
 
2.1 Closing.  On the Closing Date, upon the terms and subject to the conditions
set forth herein, substantially concurrent with the execution and delivery of
this Agreement by the parties hereto, the Company agrees to sell, and the
Purchasers, severally and not jointly, agree to purchase, up to an aggregate of
1,102,500 Shares at a per share purchase price equal to $2.00 per share and
1,102,500 Warrants at a purchase price equal to $2.50 per Warrant.  For every
Share
 
 
 

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subscribed by each Purchaser, such Purchaser hereby subscribes for 1
Warrant.  Each Purchaser shall deliver to the Escrow Agent via wire transfer or
a certified check of immediately available funds equal to such Purchaser’s
Subscription Amount as set forth on the signature page hereto executed by such
Purchaser and the Company shall deliver to each Purchaser its respective Common
Stock and Warrants as determined pursuant to Section 2.2(a), and the Company and
each Purchaser shall deliver the other items set forth in Section 2.2
deliverable at the Closing. In lieu of delivering such funds to the Escrow
Agent, Purchaser may deliver such funds at the Closing to the Company via wire
transfer or a certified check of immediate available funds.  Upon satisfaction
of the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing
shall occur at the offices of Jones, Walker, Waechter, Poitevent, Carrère &
Denègre, L.L.P. at 201 St. Charles Avenue, Suite 5100, New Orleans, Louisiana
70170 or such other location as the parties shall mutually agree and the
Subscription Amount shall be released from Escrow to the account of the Company
in accordance with the terms of the Escrow Agreement.
 
2.2  Deliveries.
 
(a) On or prior to the Closing Date, the Company shall deliver or cause to be
delivered to each Purchaser the following:
 
(i)  this Agreement duly executed by the Company;
 
(ii) legal opinion, substantially in the form of Exhibit E attached hereto;
 
(iii) a copy of the irrevocable instructions to the Transfer Agent instructing
the Transfer Agent to deliver, on an expedited basis, a certificate evidencing a
number of Shares equal to such Purchaser’s Subscription Amount divided by the
per share purchase price of $2.00 per share, registered in the name of such
Purchaser and a copy of such certificate;
 
(iv) such number of Warrants as set forth opposite such Purchaser’s name in the
Schedule A hereto; and
 
(vi)  the Escrow Agreement, duly executed by the Company.
 
(b) On or prior to the Closing Date, each Purchaser shall deliver or cause to be
delivered to the Company the following:
 
(i) this Agreement duly executed by such Purchaser;
 
(ii) such Purchaser’s Subscription Amount by wire transfer to the account as
specified in writing by the Company; and
 
(vi)  the Purchaser Questionnaire in the form on Annex B attached hereto.

2.3  Closing Conditions.
 
 
 

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(a) The obligations of the Company hereunder in connection with the Closing are
subject to the following conditions being met:
 
(i) the accuracy in all material respects on the Closing Date of the
representations and warranties of the Purchasers contained herein (unless as of
a specific date therein);
 
(ii) all obligations, covenants and agreements of each Purchaser required to be
performed at or prior to the Closing Date shall have been performed; and
 
(iii) the delivery by each Purchaser of the items set forth in Section 2.2(b) of
this Agreement.
 
(b) The respective obligations of the Purchasers hereunder in connection with
the Closing are subject to the following conditions being met:
 
(i) the accuracy in all material respects (except that any representation and
warranty that is qualified as to “materiality” or “Material Adverse Effect”
shall be true and correct in all respects) when made and on the Closing Date of
the representations and warranties of the Company contained herein (except for
those which by their terms specifically refer to an earlier date, in which case
such representations and warranties shall have been true and correct in all
material respects (except that any representation and warranty that is qualified
as to “materiality” or “Material Adverse Effect” shall be true and correct in
all respects) as of such earlier date);
 
(ii) all obligations, covenants and agreements of the Company required to be
performed at or prior to the Closing Date shall have been performed;
 
(iii) the delivery by the Company of the items set forth in Section 2.2(a) of
this Agreement;
 
(iv) there shall have been no Material Adverse Effect with respect to the
Company since the date hereof;
 
(v) from the date hereof to the Closing Date, trading in the Common Stock shall
not have been suspended by the Commission or the over-the-counter market on the
electronic bulletin board (except for any suspension of trading of limited
duration agreed to by the Company, which suspension shall be terminated prior to
the Closing); and
 
(vi) the delivery by the Company of a certificate dated as of the Closing Date
signed on behalf of the Company confirming the satisfaction of the conditions
contained in paragraphs (i), (ii), (iv) and (v) of this Section 2.3(b).
 
 
 
 

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ARTICLE III.
REPRESENTATIONS, WARRANTIES AND COVENANTS
 
3.1  Representations and Warranties of the Company.  Except as set forth in the
Disclosure Schedules, which Disclosure Schedules shall be deemed a part hereof
and shall qualify any representation or otherwise made herein to the extent of
the disclosure contained in the corresponding section of the Disclosure
Schedules, the Company hereby makes the following representations and warranties
to each Purchaser:
 
(a) [intentionally omitted].
 
 
(b) Subsidiaries.  All of the direct and indirect subsidiaries of the Company
are set forth on Schedule 3.1(b).  The Company owns, directly or indirectly,
such percentage of the Subsidiary as set forth in Schedule 3.1(b) and such
ownership interest is free and clear of any Liens, and all of the issued and
outstanding shares of capital stock of each Subsidiary are validly issued and
are fully paid, non-assessable and free of preemptive and similar rights to
subscribe for or purchase securities.  If the Company has no subsidiaries, all
other references to the Subsidiaries or any of them in the Transaction Documents
shall be disregarded. Other than as contemplated by the Transaction Documents,
there are no outstanding preemptive, conversion or other rights, options,
warrants or agreements granted or issued by or binding upon any subsidiary for
the purchase or acquisition of any shares of capital stock of any subsidiary or
any other securities convertible into, exchangeable for or evidencing the rights
to subscribe for any shares of such capital stock that would have a dilutive
effect on the Company’s ownership of its subsidiaries. Other than as
contemplated by the Transaction Documents, neither the Company nor any
subsidiary is subject to any obligation (contingent or otherwise) to repurchase
or otherwise acquire or retire any shares of the capital stock of any subsidiary
or any convertible securities, rights, warrants or options of the type described
in the preceding sentence. Neither the Company nor any subsidiary is party to,
nor has any knowledge of, any agreement restricting the voting or transfer of
any shares of the capital stock of any subsidiary.
 
(c) Organization and Qualification.  The Company and each of the Subsidiaries is
an entity duly incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization, with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently conducted.  Each
of the Company and the Subsidiaries is duly qualified to conduct business and is
in good standing as a foreign corporation or other entity in each jurisdiction
in which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, could not have or reasonably be expected to result
in a Material Adverse Effect and no Proceeding has been initiated in any such
jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or
curtail such power and authority or qualification.
 
 
 

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(d) Authorization; Enforcement.  The Company has the requisite corporate power
and authority to enter into and to consummate the transactions contemplated by
each of the Transaction Documents and otherwise to carry out its obligations
hereunder and thereunder.  The execution and delivery of each of the Transaction
Documents by the Company and the consummation by it of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
action on the part of the Company and no further action is required by the
Company, the Board of Directors or the Company’s stockholders in connection
therewith other than in connection with the Required Approvals.  Each
Transaction Document to which it is a party has been (or upon delivery will have
been) duly executed by the Company and, when delivered in accordance with the
terms hereof and thereof, will constitute the valid and binding obligation of
the Company enforceable against the Company in accordance with its terms,
except: (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law.
 
(e) No Conflicts.  The execution, delivery and performance by the Company of the
Transaction Documents, the issuance and sale of the Securities and the
consummation by it of the transactions contemplated hereby and thereby to which
it is a party do not and will not: (i) conflict with or violate any provision of
the Company’s or any Subsidiary’s certificate or articles of incorporation,
bylaws or other organizational or charter documents, (ii) conflict with, or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, result in the creation of any Lien upon any of
the properties or assets of the Company or any Subsidiary, or give to others any
rights of termination, amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company or Subsidiary debt or otherwise) or other
understanding to which the Company or any Subsidiary is a party or by which any
property or asset of the Company or any Subsidiary is bound or affected, or
(iii) subject to the Required Approvals, conflict with or result in a violation
of any law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the Company or a
Subsidiary is subject (including federal and state securities laws and
regulations), or by which any property or asset of the Company or a Subsidiary
is bound or affected; except in the case of each of clauses (ii) and (iii), such
as could not have or reasonably be expected to result in a Material Adverse
Effect.
 
(f) Filings, Consents and Approvals.  The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents, other
than: (i) the filings required pursuant to Section 4.5 of this Agreement, (ii)
the filing with the Commission pursuant to the Registration Rights Agreement and
(iii) the filing of Form D with the Commission and such filings as are required
to be made under applicable state securities laws (collectively, the “Required
Approvals”).
 
 
 

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(g) Issuance of the Securities.  The Shares and Warrants are duly authorized
and, when issued and paid for in accordance with the applicable Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free
and clear of all Liens other than restrictions on transfer provided for in the
Transaction Documents.  The Warrant Shares, when issued, will be duly authorized
and, when issued and paid for in accordance with the applicable Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free
and clear of all Liens other than restrictions on transfer provided for in the
Transaction Documents.  The Company has reserved from its duly authorized
capital stock a number of shares of Common Stock for issuance of the Warrant
Shares at least equal to the Required Minimum on the date hereof.
 
(h) Capitalization.  The capitalization of the Company is as set forth on
Schedule 3.1(h), which Schedule 3.1(h) shall also include the number of shares
of Common Stock owned beneficially, and of record, by Affiliates of the Company
as of the date hereof. All of such outstanding shares have been, or upon
issuance will be, validly issued and are fully paid and nonassessable.  Except
as disclosed in Schedule 3(h): (i) none of the Company’s capital stock is
subject to preemptive rights or any other similar rights or any liens or
encumbrances suffered or permitted by the Company; (ii) there are no outstanding
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, or
exercisable or exchangeable for, any shares of capital stock of the Company or
any of its Subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to issue additional shares of capital stock of the Company or any of its
Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, or exercisable or exchangeable for, any shares of capital
stock of the Company or any of its Subsidiaries; (iii) there are no outstanding
debt securities, notes, credit agreements, credit facilities or other
agreements, documents or instruments evidencing Indebtedness of the Company or
any of its Subsidiaries which are convertible into or exchangeable for any
shares of capital stock of the Company; (iv) there are no outstanding securities
or instruments of the Company or any of its Subsidiaries which contain any
redemption or similar provisions and other agreements consistent with past
practices, and there are no contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to redeem a security of the Company or any of its Subsidiaries; (v) there
are no securities or instruments containing anti-dilution or similar provisions
that will be triggered by the issuance of the Securities; (vi) the Company does
not have any stock appreciation rights or “phantom stock” plans or agreements or
any similar plan or agreement; (vii) there are no financing statements securing
obligations in any material amounts, either singly or in the aggregate, filed in
connection with the Company or any of its Subsidiaries; (viii) there are no
agreements or arrangements under which the Company or any of its Subsidiaries is
obligated to register the sale of any of their securities under the Securities
Act; and (ix) the Company and its Subsidiaries have no
 
 
 

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liabilities or obligations required to be disclosed in the SEC Reports but not
so disclosed in the SEC Reports, other than those incurred in the ordinary
course of the Company’s or its Subsidiaries’ respective businesses and which,
individually or in the aggregate, do not or would not have a Material Adverse
Effect.  The Company has made available to the Purchasers true, correct and
complete copies of the Company’s Articles of Incorporation, as amended and as in
effect on the date hereof (the “Articles of Incorporation”), and the Company’s
Bylaws, as amended and as in effect on the date hereof (the “Bylaws”), and the
terms of all securities convertible into, or exercisable or exchangeable for,
shares of Common Stock and the material rights of the holders thereof in respect
thereto.  No Person has any right of first refusal, preemptive right, right of
participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents.  The issuance and sale of the
Securities will not obligate the Company to issue shares of Common Stock or
other securities to any Person (other than the Purchasers) and will not result
in a right of any holder of Company securities to adjust the exercise,
conversion, exchange or reset price under any of such securities. No further
approval or authorization of any stockholder, the Board of Directors or others
is required for the issuance and sale of the Securities.
 
(i) SEC Reports; Financial Statements.  Except as set forth on Schedule 3.1(i),
the Company has filed all reports, schedules, forms, statements and other
documents required to be filed by the Company under the Securities Act and the
Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the
twelve months preceding the date hereof (or such shorter period as the Company
was required by law or regulation to file such material) (the foregoing
materials, including the exhibits thereto and documents incorporated by
reference therein, being collectively referred to herein as the “SEC Reports”)
or has received a valid extension of such time of filing and has filed any such
SEC Reports prior to the expiration of any such extension.  Except as set forth
on Schedule 3.1(i), as of their respective filing dates, the SEC Reports
complied in all material respects with the requirements of the Securities Act
and the Exchange Act, as applicable, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.  Except as set forth on Schedule 3.1(i), the financial statements of
the Company included in the SEC Reports comply in all material respects with
applicable accounting requirements and the rules and regulations of the
Commission with respect thereto as in effect at the time of filing.  Such
financial statements have been prepared in accordance with United States
generally accepted accounting principles (“GAAP”) applied on a consistent basis
during the periods involved, except as may be otherwise specified in such
financial statements or the notes thereto and except that unaudited financial
statements may not contain all footnotes required by GAAP, and fairly present in
all material respects the financial position of the Company and its consolidated
Subsidiaries as of and for the dates thereof and the results of operations and
cash flows for the periods then ended, subject, in the case of unaudited
statements, to normal, immaterial, year-end audit adjustments
 
 
 

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(j) Litigation.  Except as set forth in Schedule 3.1(j), there is no action,
suit, inquiry, notice of violation, proceeding or investigation pending or, to
the knowledge of the Company, threatened against or affecting the Company before
or by any court, arbitrator, governmental or administrative agency or regulatory
authority (federal, state, county, local or foreign) (collectively, an “Action”)
which (i) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the Securities or (ii)
could, if there were an unfavorable decision, have or reasonably be expected to
result in a Material Adverse Effect.  Neither the Company nor any director or
officer thereof, is or has been the subject of any Action involving a claim of
violation of or liability under federal or state securities laws or a claim of
breach of fiduciary duty.  There has not been, and to the knowledge of the
Company, there is not pending or contemplated, any investigation by the
Commission involving the Company or any current or former director or officer of
the Company.  The Commission has not issued any stop order or other order
suspending the effectiveness of any registration statement filed by the Company
under the Exchange Act or the Securities Act.
 
(k) Regulatory Permits.  The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses as currently conducted, except where the failure to
possess such permits could not reasonably be expected to result in a Material
Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary
has received any notice of proceedings relating to the revocation or
modification of any Material Permit.
 
(l) Private Placement.  Assuming the accuracy of the Purchasers’ representations
and warranties set forth in Section 3.2, no registration under the Securities
Act is required for the offer and sale of the Securities by the Company to the
Purchasers as contemplated hereby.
 
(m) Listing and Maintenance Requirements.  The Common Stock is registered
pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has
taken no action designed to, or which to its knowledge is likely to have the
effect of, terminating the registration of the Common Stock under the Exchange
Act nor has the Company received any notification that the Commission is
contemplating terminating such registration.  The Company has not received
notice from the over-the-counter market on the electronic bulletin board on
which the Common Stock is or has been listed or quoted to the effect that the
Company is not in compliance with the listing or maintenance requirements of
such over-the-counter market on the electronic bulletin board. The Company is
unaware of any facts or circumstances that could reasonably be expected to cause
failure to maintain the continued listing of the Common Stock on the
over-the-counter market on the electronic bulletin board.
 
(n) Disclosure.  Except with respect to the material terms and conditions of the
transactions contemplated by the Transaction Documents, the Company confirms
that neither it nor any other Person acting on its behalf has provided any of
the Purchasers or their agents or counsel with any information that it believes
constitutes or might
 
 
 
 

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constitute material, non-public information.  The Company understands and
confirms that the Purchasers will rely on the foregoing representation in
effecting transactions in securities of the Company.  All of the disclosure
furnished by or on behalf of the Company to the Purchasers regarding the
Company, its business and the transactions contemplated hereby, including the
Disclosure Schedules to this Agreement, is true and correct and does not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
 
(o) No Integrated Offering. Assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 3.2, neither the Company,
nor any of its Affiliates, nor any Person acting on its or their behalf has,
directly or indirectly, made any offers or sales of any security or solicited
any offers to buy any security, under circumstances that would cause this
offering of the Securities to be integrated with prior offerings by the Company
for purposes of the Securities Act which would require the registration of any
such securities under the Securities Act.
 
(p) No General Solicitation. Neither the Company nor any person acting on behalf
of the Company has offered or sold any of the Securities by any form of general
solicitation or general advertising.  The Company has offered the Securities for
sale only to the Purchasers and certain other “accredited investors” within the
meaning of Rule 501 under the Securities Act.
 
(q) Acknowledgment Regarding Purchasers’ Purchase of Securities.  The Company
acknowledges and agrees that each of the Purchasers is acting solely in the
capacity of an arm’s length purchaser with respect to the Transaction Documents
and the transactions contemplated thereby.  The Company further acknowledges
that no Purchaser is acting as a financial advisor or fiduciary of the Company
(or in any similar capacity) with respect to the Transaction Documents and the
transactions contemplated thereby and any advice given by any Purchaser or any
of their respective representatives or agents in connection with the Transaction
Documents and the transactions contemplated thereby is merely incidental to the
Purchasers’ purchase of the Securities.  The Company further represents to each
Purchaser that the Company’s decision to enter into this Agreement and the other
Transaction Documents has been based solely on the independent evaluation of the
transactions contemplated hereby by the Company and its representatives.
 
(r) Regulation M Compliance.  The Company has not, and no one acting on its
behalf has, (i) taken, directly or indirectly, any action designed to cause or
to result in the stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of any of the Securities, (ii)
sold, bid for, purchased, or paid any compensation for soliciting purchases of,
any of the Securities, or (iii) paid or agreed to pay to any Person any
compensation for soliciting another to purchase any other securities of the
Company, other than, in the case of clauses (ii) and (iii), compensation paid to
Global Hunter Securities, LLC in connection with the placement of the
Securities.
 
 
 

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(s) Material Changes; Undisclosed Events, Liabilities or Developments.  Since
the date of the latest audited financial statements included within the SEC
Reports, except as set forth on Schedule 3.1(s) or as specifically disclosed in
a subsequent SEC Report filed prior to the date hereof: (i) there has been no
event, occurrence or development that has had or that could reasonably be
expected to result in a Material Adverse Effect, (ii) the Company has not
incurred any liabilities (contingent or otherwise) other than (A) trade payables
and accrued expenses incurred in the ordinary course of business consistent with
past practice and (B) liabilities not required to be reflected in the Company’s
financial statements pursuant to GAAP or disclosed in filings made with the
Commission, (iii) the Company has not altered its method of accounting, (iv) the
Company has not declared or made any dividend or distribution of cash or other
property to its stockholders or purchased, redeemed or made any agreements to
purchase or redeem any shares of its capital stock and (v) the Company has not
issued any equity securities to any officer, director or Affiliate, except
pursuant to existing Company stock option plans.  The Company does not have
pending before the Commission any request for confidential treatment of
information.  Except for the issuance of the Securities contemplated by this
Agreement, no event, liability or development has occurred or exists with
respect to the Company or its Subsidiaries or their respective business,
properties, operations or financial condition, that would be required to be
disclosed by the Company under applicable securities laws at the time this
representation is made or deemed made that has not been publicly disclosed at
least 1 Business Day prior to the date that this representation is made.
 
(t) Labor Relations.  No material labor dispute exists or, to the knowledge of
the Company, is imminent with respect to any of the employees of the Company
which could reasonably be expected to result in a Material Adverse Effect.  None
of the Company’s or its Subsidiaries’ employees is a member of a union that
relates to such employee’s relationship with the Company or such Subsidiary, and
neither the Company nor any of its Subsidiaries is a party to a collective
bargaining agreement, and the Company and its Subsidiaries believe that their
relationships with their employees are good.  No executive officer, to the
knowledge of the Company, is, or is now expected to be, in violation of any
material term of any employment contract, confidentiality, disclosure or
proprietary information agreement or non-competition agreement, or any other
contract or agreement or any restrictive covenant in favor of any third party,
and the continued employment of each such executive officer does not subject the
Company or any of its Subsidiaries to any liability with respect to any of the
foregoing matters.  The Company and its Subsidiaries are in compliance with all
U.S. federal, state, local and foreign laws and regulations relating to
employment and employment practices, terms and conditions of employment and
wages and hours, except where the failure to be in compliance could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
 
(u) Compliance.  Neither the Company nor any Subsidiary: (i) is in default under
or in violation of (and no event has occurred that has not been waived that,
with notice or lapse of time or both, would result in a default by the Company
or any Subsidiary under), nor has the Company or any Subsidiary received notice
of a claim that
 
 
 

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it is in default under or that it is in violation of, any indenture, loan or
credit agreement or any other agreement or instrument to which it is a party or
by which it or any of its properties is bound (whether or not such default or
violation has been waived), (ii) is in violation of any order of any court,
arbitrator or governmental body or (iii) is or has been in violation of any
statute, rule or regulation of any governmental authority, including without
limitation all foreign, federal, state and local laws applicable to its business
and all such laws that affect the environment, except in each case as could not
have or reasonably be expected to result in a Material Adverse Effect.
 
(v) Title to Assets.  The Company and the Subsidiaries have good and marketable
title in all property, whether real or personal, owned by them that is material
to the business of the Company and the Subsidiaries, in each case free and clear
of all Liens, except for Liens as do not materially affect the value of such
property and do not materially interfere with the use made and proposed to be
made of such property by the Company and the Subsidiaries and Liens for the
payment of federal, state or other taxes, the payment of which is neither
delinquent nor subject to penalties.  Any real property and facilities held
under lease by the Company and the Subsidiaries are held by them under valid,
subsisting and enforceable leases with which the Company and the Subsidiaries
are in compliance.
 
(w) Patents and Trademarks.  The Company and the Subsidiaries have, or have
rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, trade secrets, inventions, copyrights,
licenses and other intellectual property rights and similar rights as described
in the SEC Reports as necessary or material for use in connection with their
respective businesses and which the failure to so have could have a Material
Adverse Effect (collectively, the “Intellectual Property Rights”).  Neither the
Company nor any Subsidiary has received a notice (written or otherwise) that any
of the Intellectual Property Rights used by the Company or any Subsidiary
violates or infringes upon the rights of any Person.  To the knowledge of the
Company, all such Intellectual Property Rights are enforceable and there is no
existing infringement by another Person of any of the Intellectual Property
Rights.  The Company and its Subsidiaries have taken reasonable security
measures to protect the secrecy, confidentiality and value of all of their
intellectual properties, except where failure to do so could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
 
(x) Insurance.  Except as set forth on Schedule 3.1(x), the Company and each of
its Subsidiaries are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as management of the Company
believes to be prudent and customary in the businesses in which the Company and
its Subsidiaries are engaged.  Neither the Company nor any such Subsidiary has
any reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost that
would not have a Material Adverse Effect. 
 
 
 

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(y) Transactions With Affiliates and Employees.  Except as set forth in the SEC
Reports, none of the officers or directors of the Company and, to the knowledge
of the Company, none of the employees of the Company is presently a party to any
transaction with the Company or any Subsidiary (other than for services as
employees, officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise requiring payments
to or from any officer, director or such employee or, to the knowledge of the
Company, any entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or partner, in each
case in excess of $120,000 other than for: (i) payment of salary or consulting
fees for services rendered, (ii) reimbursement for expenses incurred on behalf
of the Company and (iii) other employee benefits, including stock option
agreements under any stock option plan of the Company.
 
(z) Certain Fees.  Except as set forth in Schedule 3.1(z), no brokerage or
finder’s fees or commissions are or will be payable by the Company to any
broker, financial advisor or consultant, finder, placement agent, investment
banker, bank or other Person with respect to the transactions contemplated by
the Transaction Documents.  The Purchasers shall have no obligation with respect
to any fees or with respect to any claims made by or on behalf of other Persons
for fees of a type contemplated in this Section that may be due in connection
with the transactions contemplated by the Transaction Documents.
 
(aa) Investment Company. The Company is not, and is not an Affiliate of, and
immediately after receipt of payment for the Securities, will not be or be an
Affiliate of, an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.  The Company shall conduct its business in a
manner so that it will not become subject to the Investment Company Act of 1940,
as amended.
 
(bb) Shell Company Status. The Company is not, and has never been, an issuer
identified in Rule 144(i)(1).
 
(cc) Registration Rights.  Except as set forth in Schedule 3.1(cc), no Person
has any right to cause the Company to effect the registration under the
Securities Act of any securities of the Company.
 
(dd) Application of Takeover Protections.  The Company and the Board of
Directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other similar
anti-takeover provision under the Company’s Articles of Incorporation (or
similar charter documents) or the laws of its state of incorporation that is or
could become applicable to the Purchasers as a result of the Purchasers and the
Company fulfilling their obligations or exercising their rights under the
Transaction Documents, including without limitation as a result of the Company’s
issuance of the Securities and the Purchasers’ ownership of the Securities.
 
 
 

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(ee) Solvency.  Based on the consolidated financial condition of the Company as
of the Closing Date, after giving effect to the receipt by the Company of the
proceeds from the sale of the Securities hereunder: (i) the fair saleable value
of the Company’s assets exceeds the amount that will be required to be paid on
or in respect of the Company’s existing debts and other liabilities (including
known contingent liabilities) as they mature, (ii) the Company’s assets do not
constitute unreasonably small capital to carry on its business as now conducted
and as proposed to be conducted including its capital needs taking into account
the particular capital requirements of the business conducted by the Company,
and projected capital requirements and capital availability thereof, and (iii)
the current cash flow of the Company, together with the proceeds the Company
would receive, were it to liquidate all of its assets, after taking into account
all anticipated uses of the cash, would be sufficient to pay all amounts on or
in respect of its liabilities when such amounts are required to be paid.  The
Company does not intend to incur debts beyond its ability to pay such debts as
they mature (taking into account the timing and amounts of cash to be payable on
or in respect of its debt).  The Company has no knowledge of any facts or
circumstances which lead it to believe that it will file for reorganization or
liquidation under the bankruptcy or reorganization laws of any jurisdiction
within one year from the Closing Date.  Schedule 3.1(ee) sets forth as of the
date hereof all outstanding secured and unsecured Indebtedness of the Company or
any Subsidiary, or for which the Company or any Subsidiary has commitments.
 
(ff) Tax Returns.  Except for matters that would not, individually or in the
aggregate, have or reasonably be expected to result in a Material Adverse
Effect, the Company and each Subsidiary has filed all necessary federal, state
and foreign income and franchise tax returns and has paid or accrued all taxes
shown as due thereon, and the Company has no knowledge of a tax deficiency which
has been asserted or threatened against the Company or any Subsidiary.
 
(gg) Foreign Corrupt Practices.  Neither the Company, nor to the knowledge of
the Company, any agent or other person acting on behalf of the Company, has: (i)
directly or indirectly, used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company (or made by any person acting on its behalf of
which the Company is aware) which is in violation of law or (iv) violated in any
material respect any provision of the Foreign Corrupt Practices Act of 1977, as
amended.
 
(hh) Accountants.  The Company’s accounting firm is set forth on Schedule
3.1(hh) of the Disclosure Schedules.  To the knowledge and belief of the
Company, such accounting firm: (i) is a registered public accounting firm as
required by the Exchange Act and (ii) shall express its opinion with respect to
the financial statements to be included in the Company’s Annual Report for the
year ending December 31, 2011.
 
 
 

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(ii) No Disagreements with Accountants and Lawyers.    Except as set forth on
Schedule 3.1(ii), there are no disagreements of any kind presently existing, or
reasonably anticipated by the Company to arise, between the Company and the
accountants and lawyers formerly or presently employed by the Company which
could affect the Company’s ability to perform any of its obligations under any
of the Transaction Documents, the Company is current with respect to any fees
owed to its accountants and lawyers.
 
3.2  Representations and Warranties of the Purchasers.    Each Purchaser, for
itself and for no other Purchaser, hereby represents and warrants as of the date
hereof and as of the Closing Date to the Company as follows (unless as of a
specific date therein):
 
(a) Organization; Authority.  Such Purchaser is either an individual or an
entity duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization with full right, corporate or partnership
power and authority to enter into and to consummate the transactions
contemplated by the Transaction Documents and otherwise to carry out its
obligations hereunder and thereunder. The execution and delivery of the
Transaction Documents and performance by such Purchaser of the transactions
contemplated by the Transaction Documents have been duly authorized by all
necessary corporate, partnership, limited liability company or similar action,
as applicable, on the part of such Purchaser.  Each Transaction Document to
which it is a party has been duly executed by such Purchaser, and when delivered
by such Purchaser in accordance with the terms hereof, will constitute the valid
and legally binding obligation of such Purchaser, enforceable against it in
accordance with its terms, except: (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.
 
(b) Own Account.  Such Purchaser understands that the Securities are “restricted
securities” and have not been registered under the Securities Act or any
applicable state securities law and is acquiring the Securities as principal for
its own account and not with a view to or for distributing or reselling such
Securities or any part thereof in violation of the Securities Act or any
applicable state securities law, has no present intention of distributing any of
such Securities in violation of the Securities Act or any applicable state
securities law and has no direct or indirect arrangement or understandings with
any other persons to distribute or regarding the distribution of such Securities
in violation of the Securities Act or any applicable state securities law (this
representation and warranty not limiting such Purchaser’s right to sell the
Securities pursuant to the Registration Statement or otherwise in compliance
with applicable federal and state securities laws).  Such Purchaser is acquiring
the Securities hereunder in the ordinary course of its business.
 
(c) Purchaser Status.  At the time such Purchaser was offered the Securities, it
was, and as of the date hereof it is, and on each date on which it exercises any
Warrants or converts any Common Stock it will be either: (i) an “accredited
investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under
the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule
144A(a) under the Securities Act.  Such Purchaser is not required to be
registered as a broker-dealer under Section 15 of the Exchange Act.
 
 
 

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(d) Experience of Such Purchaser.  Such Purchaser, either alone or together with
its representatives, has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Securities, and has so evaluated the
merits and risks of such investment.  Such Purchaser is able to bear the
economic risk of an investment in the Securities and, at the present time, is
able to afford a complete loss of such investment.
 
(e) General Solicitation.  Such Purchaser is not, to its knowledge, purchasing
the Securities as a result of any advertisement, article, notice or other
communication regarding the Securities published in any newspaper, magazine or
similar media or broadcast over television or radio or presented at any seminar
or, to such Purchaser’s knowledge, any other general solicitation or general
advertisement.
 
(f) Certain Transactions and Confidentiality.  Other than consummating the
transactions contemplated hereunder, such Purchaser has not directly or
indirectly, nor has any Person acting on behalf of or pursuant to any
understanding with such Purchaser, executed any purchases or sales, including
Short Sales, of the securities of the Company during the period commencing as of
the time that such Purchaser first received a term sheet (written or oral) from
the Company or any other Person representing the Company setting forth the
material terms of the transactions contemplated hereunder and ending immediately
prior to the execution hereof.  Notwithstanding the foregoing, in the case of a
Purchaser that is a multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of such Purchaser’s assets and the portfolio
managers have no direct knowledge of the investment decisions made by the
portfolio managers managing other portions of such Purchaser’s assets, the
representation set forth above shall only apply with respect to the portion of
assets managed by the portfolio manager that made the investment decision to
purchase the Securities covered by this Agreement.  Other than to other Persons
party to this Agreement, such Purchaser has maintained the confidentiality of
all disclosures made to it in connection with this transaction (including the
existence and terms of this transaction). Notwithstanding the foregoing, for
avoidance of doubt, nothing contained herein shall constitute a representation
or warranty, or preclude any actions, with respect to the identification of the
availability of, or securing of, available shares to borrow in order to effect
Short Sales or similar transactions in the future.
 

 
 

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ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
 
4.1  Transfer Restrictions.
 
(a) The Securities may only be disposed of in compliance with state and federal
securities laws.  In connection with any transfer of Securities other than
pursuant to an effective registration statement or Rule 144, the Company may
require the transferor thereof to provide to the Company an opinion of counsel
selected by the Company, to the effect that such transfer does not require
registration of such transferred Securities under the Securities Act.  As a
condition of transfer, any such transferee shall agree in writing to be bound by
the terms of this Agreement and shall have the rights and obligations of a
Purchaser under this Agreement.
 
(b) The Purchasers agree to the imprinting, so long as is required by this
Section 4.1, of a legend on any Shares, Warrants and Warrant Shares in
substantially the following form:
 
NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS
EXERCISABLE, IF APPLICABLE, HAS BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY UNLESS SOLD OR TRANSFERRED TO A “QUALIFIED
INSTITUTIONAL BUYER” WITHIN THE MEANING OF RULE 144A UNDER THE 1933 ACT OR
UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.  THIS SECURITY AND
THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH
SECURITIES.
 
(c) Certificates evidencing the Shares and the Warrant Shares shall not contain
any legend (including the legend set forth in Section 4.1(b) hereof): (i)
following any sale of such Shares or Warrant Shares pursuant to Rule 144, (ii)
if such Shares or Warrant Shares, as the case may be, are eligible for sale
under Rule 144, without the requirement for the Company to be in compliance with
the current public information required under Rule 144 as to such Shares or
Warrant Shares, as the case may be, and without volume or manner-of-sale
restrictions or (iii) if such legend is not required under
 
 
 

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applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the Commission). The
Company shall cause its counsel to issue a legal opinion to the Transfer Agent
promptly after notice is received of any of the events listed in this Section
4.1(c) if required by the Transfer Agent to effect the removal of the legend
hereunder.  If any Warrant is exercised or any Shares are sold at a time when
there is an effective registration statement to cover the resale of the Warrant
Shares or the Shares, as the case may be, or if such Warrant Shares or Shares
may be sold under Rule 144 and the Company is then in compliance with the
current public information required under Rule 144, or if such Warrant Shares or
Shares may be sold under Rule 144 without the requirement for the Company to be
in compliance with the current public information required under Rule 144 as to
such Warrant Shares or Shares and without volume or manner-of-sale restrictions
or if such legend is not otherwise required under applicable requirements of the
Securities Act (including judicial interpretations and pronouncements issued by
the staff of the Commission) then such Warrant Shares or Shares, as the case may
be, shall be issued free of all legends.  The Company agrees that (i) if such
Warrant Shares or Shares may be sold under Rule 144 without the requirement for
the Company to be in compliance with the current public information required
under Rule 144 as to such Warrant Shares or Shares and without volume or
manner-of-sale restrictions or (ii) at such time as such legend is no longer
required under this Section 4.1(c), it will, no later than three (3) Business
Days following the delivery by a Purchaser to the Company or the Transfer Agent
of a certificate representing Warrant Shares or the Shares, as applicable,
issued with a restrictive legend, deliver or cause to be delivered to such
Purchaser a certificate representing such shares that is free from all
restrictive and other legends.  The Company may not make any notation on its
records or give instructions to the Transfer Agent that enlarge the restrictions
on transfer set forth in this Section 4.  Certificates for Warrant Shares and
Shares subject to legend removal hereunder shall be transmitted by the Transfer
Agent to the Purchaser by crediting the account of the Purchaser’s broker with
the Depository Trust Company System as directed by such Purchaser.  Within five
(5) Business Days after receiving written notice of a Purchaser’s sale of Shares
or Warrant Shares pursuant to Rule 144 at a time when compliance with Rule
144(c)(1) is required (a “144 Sale”), the Company shall cause the Transfer Agent
to transmit to the Purchaser or its order a certificate or certificates, free of
restrictive legends, representing the Shares and/or Warrant Shares that were the
subject of that notice (“144 Sale Shares”).  In addition to any other rights
available to a Purchaser, if the Transfer Agent fails to transmit such
certificates to a Purchaser or its order by the end of the fifth Business Day
after the Company received written notice of that 144 Sale (the “Delivery
Date”), then the Company shall pay to the Purchaser an amount in cash equal to
2% of the purchase price of the 144 Sale Shares (or the Warrant exercise price,
to the extent the 144 Sale Shares are Warrant Shares), and will pay an
additional 2% of such purchase price (or exercise price, as applicable) for
every thirty day period (pro rated for shorter periods) beginning more than 30
days after the Delivery Date until the certificate or certificates as to the 144
Sale Shares are delivered free of restrictive legends.  Nothing herein shall
limit a Purchaser’s right to pursue any other remedies available to it
hereunder, at law, or in equity including, without limitation, a decree of
specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver certificate or certificates representing Shares sold
pursuant to Rule 144 as required by this Agreement.

 
 

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(d) Each Purchaser, severally and not jointly with the other Purchasers, agrees
with the Company that such Purchaser will sell any Securities pursuant to the
registration requirements of the Securities Act, including any applicable
prospectus delivery requirements, or an exemption therefrom and acknowledges
that the removal of the restrictive legend from certificates representing
Securities as set forth in this Section 4.1 is predicated upon the Company’s
reliance upon this understanding.
 

4.2  Furnishing of Information; Public Information, Failure of Registration.
 
(a) If the Common Stock is not registered under Section 12(b) or 12(g) of the
Exchange Act on the date hereof, the Company agrees to cause the Common Stock to
be registered under Section 12(g) of the Exchange Act on or before the Closing
Date. Until the time that no Purchaser owns any Securities, the Company
covenants to maintain the registration of the Common Stock under Sections 12(b)
or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect
hereof and file within the applicable grace periods) all reports required to be
filed by the Company after the date hereof pursuant to the Exchange Act even if
the Company is not then subject to the reporting requirements of the Exchange
Act.
 
(b) At any time during the period commencing from the six (6) month anniversary
of the Closing Date and ending at such time that all of the Securities, if a
registration statement is not available for the resale of all of the Securities,
may be sold without restriction or limitation pursuant to Rule 144 and without
the requirement to be in compliance with Rule 144(c)(1), if the Company shall
fail for any reason to satisfy the current public information requirement under
Rule 144(c) (a “Public Information Failure”) then, as partial relief for the
damages to any holder of Securities by reason of any such delay in or reduction
of its ability to sell the Securities (which remedy shall not be exclusive of
any other remedies available at law or in equity), the Company shall pay to each
such holder an amount in cash equal to two percent (2.0%) of the aggregate
purchase price of such holder’s Securities that cannot be sold resulting
directly from such Public Information Failure on the day of a Public Information
Failure and on every thirtieth day (pro rated for periods totaling less than
thirty days) thereafter until the earlier of (i) the date such Public
Information Failure is cured and (ii) such time that such public information is
no longer required pursuant to Rule 144.  The payments to which a holder shall
be entitled pursuant to this Section 4(n) are referred to herein as “Public
Information Failure Payments.”  Public Information Failure Payments shall be
paid on the earlier of (x) the last day of the calendar month during which such
Public Information Failure Payments are incurred and (y) the third Business Day
after the event or failure giving rise to the Public Information Failure
Payments is cured.  In the event the Company fails to make Public Information
Failure Payments in a timely manner, such Public Information Failure Payments
shall bear interest at the rate of 1.5% per month (prorated for partial months)
until paid in full.
 
 
 

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4.3  Integration.  The Company shall not sell, offer for sale or solicit offers
to buy or otherwise negotiate in respect of any security (as defined in Section
2 of the Securities Act) that would be integrated with the offer or sale of the
Securities in a manner that would require the registration under the Securities
Act of the sale of the Securities.
 
4.4  Exercise Procedures.  The form of Notice of Exercise included in the
Warrants set forth the totality of the procedures required of the Purchasers in
order to exercise the Warrants.  No additional legal opinion, other information
or instructions shall be required of the Purchasers to exercise their
Warrants.  The Company shall honor exercises of the Warrants and shall deliver
Warrant Shares in accordance with the terms, conditions and time periods set
forth in the Transaction Documents.
 
4.5  Securities Laws Disclosure; Publicity.  The Company shall, by 8:30 a.m.
(New York City time) on the Business Day immediately following the date hereof,
issue a Current Report on Form 8-K and press release disclosing the material
terms of the transactions contemplated hereby, and including the Transaction
Documents as exhibits thereto.  Notwithstanding the foregoing, the Company shall
not publicly disclose the name of any Purchaser, or include the name of any
Purchaser in any filing with the Commission or any regulatory agency, without
the prior written consent of such Purchaser, except: (a) as required by federal
securities law in connection with the filing of final Transaction Documents
(including signature pages thereto) with the Commission and (b) to the extent
such disclosure is required by law, in which case the Company shall provide the
Purchasers with prior notice of such disclosure permitted under this clause (b).
 
4.6  Shareholder Rights Plan.  No claim will be made or enforced by the Company
or, with the consent of the Company, any other Person, that any Purchaser is an
“Acquiring Person” under any control share acquisition, business combination,
poison pill (including any distribution under a rights agreement) or similar
anti-takeover plan or arrangement in effect or hereafter adopted by the Company,
or that any Purchaser could be deemed to trigger the provisions of any such plan
or arrangement, by virtue of receiving Securities under the Transaction
Documents or under any other agreement between the Company and the Purchasers.
 
4.7  Non-Public Information.  From and after the filing of the 8-K Filing with
the SEC, no Purchaser shall be in possession of any material, nonpublic
information received from the Company, any of its Subsidiaries or any of their
respective officers, directors, employees or agents, that is not disclosed in
the 8-K Filing.  The Company shall not, and shall cause each of its Subsidiaries
and its and each of their respective officers, directors, employees and agents,
not to, provide any Purchaser with any material, nonpublic information regarding
the Company or any of its Subsidiaries from and after the filing of the 8-K
Filing with the SEC without the prior express written consent of such
Purchaser.  If a Purchaser has, or believes it has, received any such material,
nonpublic information regarding the Company or any of its Subsidiaries from the
Company, any of its Subsidiaries or any of their respective officers, directors,
affiliates or agents, it may provide the Company with written notice thereof. 
In the event of the disclosure of any material nonpublic information, the
Company shall comply with its obligations under Regulation FD promulgated under
the Securities Act and the Exchange Act by filing a press release and current
report on Form 8-K disclosing the material non-public information within five
days of its
 
 
 

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disclosure to any Purchaser.  Subject to the foregoing, neither the Company, its
Subsidiaries nor any Purchaser shall issue any press releases or any other
public statements with respect to the transactions contemplated hereby;
provided, however, that the Company shall be entitled, without the prior
approval of any Purchaser, to make any press release or other public disclosure
with respect to such transactions (i) in substantial conformity with the 8-K
Filing and contemporaneously therewith and (ii) as is required by applicable law
and regulations (provided that in the case of clause (i) each Purchaser shall be
consulted by the Company in connection with any such press release or other
public disclosure prior to its release).  Without the prior written consent of
any applicable Purchaser, neither the Company nor any of its Subsidiaries or
affiliates shall disclose the name of such Purchaser in any filing,
announcement, release or otherwise.
 
4.8  Use of Proceeds.  The Company shall use the net proceeds from the sale of
the Securities hereunder for expansion and other working capital purposes.
 
4.9  Reservation of Securities.
 
(a) The Company shall maintain a reserve from its duly authorized shares of
Common Stock for issuance pursuant to the Transaction Documents in such amount
as may then be required to fulfill its obligations in full under the Transaction
Documents.
 
(b) If, on any date, the number of authorized but unissued (and otherwise
unreserved) shares of Common Stock is less than the Required Minimum on such
date, then the Board of Directors shall use commercially reasonable efforts to
amend the Company’s Articles of Incorporation to increase the number of
authorized but unissued shares of Common Stock to at least the Required Minimum
at such time, as soon as possible and in any event not later than the 75th day
after such date.
 
4.10  Certain Transactions and Confidentiality. Each Purchaser, severally and
not jointly with the other Purchasers, covenants that neither it, nor any
Affiliate acting on its behalf or pursuant to any understanding with it will
execute any purchases or sales, including Short Sales, of any of the Company’s
securities during the period commencing with the execution of this Agreement and
ending at such time that the transactions contemplated by this Agreement are
first publicly announced pursuant to the initial press release as described in
Section 4.5.  Each Purchaser, severally and not jointly with the other
Purchasers, covenants that until such time as the transactions contemplated by
this Agreement are publicly disclosed by the Company pursuant to the initial
press release as described in Section 4.5, such Purchaser will maintain the
confidentiality of the existence and terms of this transaction and the
information included in the Transaction Documents and the Disclosure
Schedules.  Notwithstanding the foregoing, and notwithstanding anything
contained in this Agreement to the contrary, the Company expressly acknowledges
and agrees that (i) no Purchaser makes any representation, warranty or covenant
hereby that it will not engage in effecting transactions in any securities of
the Company after the time that the transactions contemplated by this Agreement
are first publicly announced pursuant to the initial press release as described
in Section 4.5, (ii) no Purchaser shall be restricted or prohibited from
effecting any transactions in any securities of the Company in accordance with
applicable securities laws from and after the time that the transactions
contemplated by this
 
 
 

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Agreement are first publicly announced pursuant to the initial press release as
described in Section 4.5 and (iii) no Purchaser shall have any duty of
confidentiality to the Company or its Subsidiaries after the issuance of the
initial press release as described in Section 4.5.  Notwithstanding the
foregoing, in the case of a Purchaser that is a multi-managed investment vehicle
whereby separate portfolio managers manage separate portions of such Purchaser’s
assets and the portfolio managers have no direct knowledge of the investment
decisions made by the portfolio managers managing other portions of such
Purchaser’s assets, the covenant set forth above shall only apply with respect
to the portion of assets managed by the portfolio manager that made the
investment decision to purchase the Securities covered by this Agreement.
 
4.11  Additional Issuances of Securities.
 
(a) For purposes of this Section 4.11, the following definitions shall apply.
 
(i) “Common Stock Equivalents” means, collectively, Options and Convertible
Securities
 
(ii) “Convertible Securities” means any stock or securities (other than Options)
convertible into or exercisable or exchangeable for shares of Common Stock.
 
(iii) “Options” means any rights, warrants or options to subscribe for or
purchase shares of Common Stock or Convertible Securities.
 
(b) From the date hereof and until seven (7) months after the Closing Date,
provided that the Company is in compliance with the current public information
requirement under Rule 144(c) on such date and the Company is unaware of any
facts or circumstances that might prevent the Company from complying with its
current public information requirement set forth in Rule 144(c) in the
foreseeable future (the “Trigger Date”), the Company will not, directly or
indirectly, file any registration statement with the SEC.  From the date hereof
until the Trigger Date, the Company will not, (i) directly or indirectly, offer,
sell, grant any option to purchase, or otherwise dispose of (or announce any
offer, sale, grant or any option to purchase or other disposition of) any of its
or its Subsidiaries’ equity or equity equivalent securities, including without
limitation any debt, preferred stock or other instrument or security that is, at
any time during its life and under any circumstances, convertible into or
exchangeable or exercisable for shares of Common Stock or Common Stock
Equivalents (any such offer, sale, grant, disposition or announcement being
referred to as a “Subsequent Placement”) or (ii) be party to any solicitations,
negotiations or discussions with regard to the foregoing.
 
(c) From the Trigger Date until the second anniversary of the Closing Date, the
Company will not, directly or indirectly, effect any Subsequent Placement unless
the Company shall have first complied with this Section 4.11.
 
(i) The Company shall deliver to each Purchaser an irrevocable written notice
(the ”Offer Notice”) of any proposed or intended issuance or
 
 
 

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sale or exchange (the ”Offer”) of the securities being offered (the “Offered
Securities”) in a Subsequent Placement, which Offer Notice shall (w) identify
and describe the Offered Securities, (x) describe the price and other terms upon
which they are to be issued, sold or exchanged, and the number or amount of the
Offered Securities to be issued, sold or exchanged, (y) identify the persons or
entities (if known) to which or with which the Offered Securities are to be
offered, issued, sold or exchanged and (z) offer to issue and sell to or
exchange with such Purchasers all of the Offered Securities, allocated among
such Purchasers (a) based on such Purchaser’s pro rata portion of the aggregate
number of shares of Common Stock purchased hereunder (the “Basic Amount”), and
(b) with respect to each Purchaser that elects to purchase its Basic Amount, any
additional portion of the Offered Securities attributable to the Basic Amounts
of other Purchasers as such Purchaser shall indicate it will purchase or acquire
should the other Purchasers subscribe for less than their Basic Amounts (the
“Undersubscription Amount”), which process shall be repeated once until the
Purchasers shall have an opportunity to subscribe for any remaining
Undersubscription Amount.
 
(ii) To accept an Offer, in whole or in part, such Purchaser must deliver a
written notice to the Company prior to the end of the fifth (5th) Business Day
after such Purchaser’s receipt of the Offer Notice (the “Offer Period”), setting
forth the portion of such Purchaser’s Basic Amount that such Purchaser elects to
purchase and, if such Purchaser shall elect to purchase all of its Basic Amount,
the Undersubscription Amount, if any, that such Purchaser elects to purchase (in
either case, the “Notice of Acceptance”).  If the Basic Amounts subscribed for
by all Purchasers are less than the total of all of the Basic Amounts, then each
Purchaser who has set forth an Undersubscription Amount in its Notice of
Acceptance shall be entitled to purchase, in addition to the Basic Amounts
subscribed for, the Undersubscription Amount it has subscribed for; provided,
however, that if the Undersubscription Amounts subscribed for exceed the
difference between the total of all the Basic Amounts and the Basic Amounts
subscribed for (the “Available Undersubscription Amount”), each Purchaser who
has subscribed for any Undersubscription Amount shall be entitled to purchase
only that portion of the Available Undersubscription Amount as the Basic Amount
of such Purchaser bears to the total Basic Amounts of all Purchasers that have
subscribed for Undersubscription Amounts, subject to rounding by the Company to
the extent its deems reasonably necessary.  Notwithstanding anything to the
contrary contained herein, if the Company desires to modify or amend the terms
and conditions of the Offer prior to the expiration of the Offer Period, the
Company may deliver to the Purchasers a new Offer Notice and the Offer Period
shall expire on the third (3rd) Business Day after such Purchaser’s receipt of
such new Offer Notice.
 
(iii) The Company shall have fourteen (14) calendar days from the expiration of
the Offer Period above to offer, issue, sell or exchange all or any part of such
Offered Securities as to which a Notice of Acceptance has not been given by the
Purchasers (the “Refused Securities”) pursuant to a definitive agreement (the
“Subsequent Placement Agreement”)  but only to the offerees described in the
Offer Notice (if so described therein) and only upon terms and conditions
(including, without limitation, unit prices and interest rates) that are not
more favorable to the acquiring
 
 
 

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person or persons or less favorable to the Company than those set forth in the
Offer Notice and (ii) to publicly announce (a) the execution of such Subsequent
Placement Agreement, and (b) either (x) the consummation of the transactions
contemplated by such Subsequent Placement Agreement or (y) the termination of
such Subsequent Placement Agreement, which shall be filed with the SEC on a
Current Report on Form 8-K with such Subsequent Placement Agreement and any
documents contemplated therein filed as exhibits thereto.
 
(iv) In the event the Company shall propose to sell less than all the Refused
Securities (any such sale to be in the manner and on the terms specified in
Section 4.11(c)(ii) above), then each Purchaser may, at its sole option and in
its sole discretion, reduce the number or amount of the Offered Securities
specified in its Notice of Acceptance to an amount that shall be not less than
the number or amount of the Offered Securities that such Purchaser elected to
purchase pursuant to Section 4.11(c)(ii) above multiplied by a fraction, (i) the
numerator of which shall be the number or amount of Offered Securities the
Company actually proposes to issue, sell or exchange (including Offered
Securities to be issued or sold to Purchasers pursuant to Section 4.11(c)(ii)
above prior to such reduction) and (ii) the denominator of which shall be the
original amount of the Offered Securities.  In the event that any Purchaser so
elects to reduce the number or amount of Offered Securities specified in its
Notice of Acceptance, the Company may not issue, sell or exchange more than the
reduced number or amount of the Offered Securities unless and until such
securities have again been offered to the Purchasers in accordance with Section
4.11(c)(ii) above.
 
(v) Upon the closing of the issuance, sale or exchange of all or less than all
of the Refused Securities, the Purchasers shall acquire from the Company, and
the Company shall issue to the Purchasers, the number or amount of Offered
Securities specified in the Notices of Acceptance, as reduced pursuant
to  4.11(c)(ii) above if the Purchasers have so elected, upon the terms and
conditions specified in the Offer.  The purchase by the Purchasers of any
Offered Securities is subject in all cases to the preparation, execution and
delivery by the Company and the Purchasers of a purchase agreement relating to
such Offered Securities reasonably satisfactory in form and substance to the
Purchasers and their respective counsel.
 
(vi) Any Offered Securities not acquired by the Purchasers or other persons in
accordance with Section 4.11(c)(ii) above may not be issued, sold or exchanged
until they are again offered to the Purchasers under the procedures specified in
this Agreement.
 
(vii) The Company and the Purchasers agree that if any Purchaser elects to
participate in the Offer, neither the Subsequent Placement Agreement with
respect to such Offer nor any other transaction documents related thereto
(collectively, the “Subsequent Placement Documents”) shall include any term or
provisions whereby any Purchaser shall be required to agree to any restrictions
in trading as to any securities of the Company owned by such Purchaser prior to
such Subsequent Placement.
 
 
 

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(viii) Notwithstanding anything to the contrary in this Section 4.11 and unless
otherwise agreed to by the Purchasers, the Company shall either confirm in
writing to the Purchasers that the transaction with respect to the Subsequent
Placement has been abandoned or shall publicly disclose its intention to issue
the Offered Securities, in either case in such a manner such that the Purchasers
will not be in possession of material non-public information, by the fifteenth
(15th) Business Day following delivery of the Offer Notice.  If by the fifteenth
(15th) Business Day following delivery of the Offer Notice no public disclosure
regarding a transaction with respect to the Offered Securities has been made,
and no notice regarding the abandonment of such transaction has been received by
the Purchasers, such transaction shall be deemed to have been abandoned and the
Purchasers shall not be deemed to be in possession of any material, non-public
information with respect to the Company.  Should the Company decide to pursue
such transaction with respect to the Offered Securities, the Company shall
provide each Purchaser with another Offer Notice and each Purchaser will again
have the right of participation set forth in this Section 4.11.  The Company
shall not be permitted to deliver more than one such Offer Notice to the
Purchasers in any 60 day period.
 
ARTICLE V.
MISCELLANEOUS
 
5.1  Termination.  This Agreement may be terminated by any Purchaser, as to such
Purchaser’s obligations hereunder only and without any effect whatsoever on the
obligations between the Company and the other Purchasers, by written notice to
the other parties, if the Closing has not been consummated on or before January
23, 2012.
 
5.2  Fees and Expenses.  Except as expressly set forth in the Transaction
Documents to the contrary, each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement.  The Company shall pay all Transfer
Agent fees, stamp taxes and other taxes and duties levied in connection with the
delivery of any Securities to the Purchasers.  The Company shall pay an expense
allowance to Harvest Capital Strategies LLC (a Purchaser) or its designee(s) for
all reasonable costs and expenses incurred in connection with the transactions
contemplated by the Transaction Documents (including all reasonable legal fees
and disbursements in connection therewith, documentation and implementation of
the transactions contemplated by the Transaction Documents and due diligence in
connection therewith), in an amount not to exceed $2,500.
 
5.3  Entire Agreement.  The Transaction Documents, together with the exhibits
and schedules thereto, contain the entire understanding of the parties with
respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.
 
5.4  Notices.  Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective
 
 
 

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on the earliest of: (a) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth on
the signature pages attached hereto prior to 5:30 p.m. (New York City time) on a
Business Day, (b) the next Business Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number set
forth on the signature pages attached hereto on a day that is not a Business Day
or later than 5:30 p.m. (New York City time) on any Business Day, (c) the second
(2nd) Business Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service or (d) upon actual receipt by the party to
whom such notice is required to be given.  The address for such notices and
communications shall be as set forth on the signature pages attached hereto.
 
5.5  Amendments; Waivers.  No provision of this Agreement may be waived,
modified, supplemented or amended except in a written instrument signed, in the
case of an amendment, by the Company and the Purchasers holding at least 75% in
interest of the Securities purchased hereunder or, in the case of a waiver, by
the party against whom enforcement of any such waived provision is sought.  No
waiver of any default with respect to any provision, condition or requirement of
this Agreement shall be deemed to be a continuing waiver in the future or a
waiver of any subsequent default or a waiver of any other provision, condition
or requirement hereof, nor shall any delay or omission of any party to exercise
any right hereunder in any manner impair the exercise of any such right.
 
5.6  Headings.  The headings herein are for convenience only, do not constitute
a part of this Agreement and shall not be deemed to limit or affect any of the
provisions hereof.
 
5.7  Successors and Assigns.  This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and permitted assigns.  The
Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of each Purchaser (other than by merger).  Any
Purchaser may assign any or all of its rights under this Agreement to any Person
to whom such Purchaser assigns or transfers any Securities, provided that such
transferee agrees in writing to be bound, with respect to the transferred
Securities, by the provisions of the Transaction Documents that apply to the
“Purchasers.”
 
5.8  No Third-Party Beneficiaries.  This Agreement is intended for the benefit
of the parties hereto and their respective successors and permitted assigns and
is not for the benefit of, nor may any provision hereof be enforced by, any
other Person, except as otherwise set forth in Section 4.10.
 
5.9  Governing Law.  All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof.  Each
party agrees that all legal proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement and
any other Transaction Documents (whether brought against a party hereto or its
respective affiliates, directors, officers, shareholders, employees or agents)
shall be commenced exclusively in the state and federal courts sitting in the
City of New York.  Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York,
borough of Manhattan for the adjudication of any dispute hereunder or in
connection
 
 
 

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herewith or with any transaction contemplated hereby or discussed herein
(including with respect to the enforcement of any of the Transaction Documents),
and hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is improper or is an
inconvenient venue for such proceeding.  Each party hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way any right
to serve process in any other manner permitted by law.   If either party shall
commence an action or proceeding to enforce any provisions of the Transaction
Documents, then the prevailing party in such action or proceeding shall be
reimbursed by the other party for its reasonable attorneys’ fees and other costs
and expenses incurred with the investigation, preparation and prosecution of
such action or proceeding.
 
5.10  Survival.  The representations and warranties contained herein shall
survive the Closing and the delivery of the Securities.
 
5.11  Execution.  This Agreement may be executed in two or more counterparts,
all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart.  In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof.
 
5.12  Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
 
5.13  Replacement of Securities.  If any certificate or instrument evidencing
any Securities is mutilated, lost, stolen or destroyed, the Company shall issue
or cause to be issued in exchange and substitution for and upon cancellation
thereof (in the case of mutilation), or in lieu of and substitution therefor, a
new certificate or instrument, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction.  The applicant
for a new certificate or instrument under such circumstances shall also pay any
reasonable third-party costs (including customary indemnity) associated with the
issuance of such replacement Securities.
 
 
 

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5.14  Remedies.  In addition to being entitled to exercise all rights provided
herein or granted by law, including recovery of damages, each of the Purchasers
and the Company will be entitled to specific performance under the Transaction
Documents.  The parties agree that monetary damages may not be adequate
compensation for any loss incurred by reason of any breach of obligations
contained in the Transaction Documents and hereby agree to waive and not to
assert in any action for specific performance of any such obligation the defense
that a remedy at law would be adequate.
 
5.15  Payment Set Aside. To the extent that the Company makes a payment or
payments to any Purchaser pursuant to any Transaction Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver or any other person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.
 
5.16  Independent Nature of Purchasers’ Obligations and Rights.  The obligations
of each Purchaser under any Transaction Document are several and not joint with
the obligations of any other Purchaser, and no Purchaser shall be responsible in
any way for the performance or non-performance of the obligations of any other
Purchaser under any Transaction Document.  Nothing contained herein or in any
other Transaction Document, and no action taken by any Purchaser pursuant
thereto, shall be deemed to constitute the Purchasers as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the
Transaction Documents.  Each Purchaser shall be entitled to independently
protect and enforce its rights, including, without limitation, the rights
arising out of this Agreement or out of the other Transaction Documents, and it
shall not be necessary for any other Purchaser to be joined as an additional
party in any proceeding for such purpose.  Each Purchaser has been represented
by its own separate legal counsel in their review and negotiation of the
Transaction Documents.  For reasons of administrative convenience only, each
Purchaser and its respective counsel have chosen to communicate with the Company
through Jones, Walker, Waechter, Poitevent, Carrère & Denègre L.L.P..  Jones,
Walker, Waechter, Poitevent, Carrère & Denègre L.L.P. does not represent any of
the Purchasers and only represents Global Hunters Securities LLC.  The Company
has elected to provide all Purchasers with the same terms and Transaction
Documents for the convenience of the Company and not because it was required or
requested to do so by any of the Purchasers.
 
5.17  Saturdays, Sundays, Holidays, etc.     If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall not be a Business Day, then such action may be taken or such right
may be exercised on the next succeeding Business Day.
 
 
 

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5.18  Construction. The parties agree that each of them and/or their respective
counsel has reviewed and had an opportunity to revise the Transaction Documents
and, therefore, the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of the Transaction Documents or any amendments hereto. In
addition, each and every reference to share prices and shares of Common Stock in
any Transaction Document shall be subject to adjustment for reverse and forward
stock splits, stock dividends, stock combinations and other similar transactions
of the Common Stock that occur after the date of this Agreement.
 
5.19  WAIVER OF JURY TRIAL.  IN ANY ACTION, SUIT, OR PROCEEDING IN ANY
JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH
KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW,
HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER
TRIAL BY JURY.
 

 
(Signature Pages Follow)
 
 
 

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

 
IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
UNITED STATES ANTIMONY CORPORATION
 
 
Address for Notice:
P.O. Box 643
Thompson Falls, Montana 59873
By: /s/ John C. Lawrence                               
     Name: John C. Lawrence
     Title: President
With a copy to (which shall not constitute notice):
Fax:________________
   

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
 
 
 
 
 
 

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PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
Name of Purchaser:                                                              
Artorius
Trading                                                                                       
Signature of Authorized Signatory of Purchaser:          /s/ Richard M. Furland,
Jr.                                                                       
Name of Authorized Signatory:                                          Richard
M. Furland,
Jr.                                                                            
Title of Authorized
Signatory:                                            Principal of
G.P.                                                                             
Email Address of Authorized Signatory:         ___________________________ 
Facsimile Number of Authorized Signatory:                   
___________________________
Address for Notice of Purchaser:

Address for Delivery of Securities for Purchaser (if not same as address for
notice):

Subscription Amount:                $300,000                           

Warrant Shares:                           150,000                             

EIN Number:

[SIGNATURE PAGES CONTINUE]

 
 

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PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
Name of Purchaser:                                                             
Bernard J. Guarnera 
Signature of Authorized Signatory of Purchaser:         /s/ Bernard J. Guarnera
Name of Authorized Signatory:                                          Bernard
J. Guarnera
Title of Authorized Signatory:                                            NA 
Email Address of Authorized Signatory:                         
___________________________
Facsimile Number of Authorized Signatory:                   
___________________________
Address for Notice of Purchaser: 

Address for Delivery of Securities for Purchaser (if not same as address for
notice):

 

Subscription Amount:               $10,000                      

Warrant Shares:                         5,000                      

EIN Number:

[SIGNATURE PAGES CONTINUE]

 
 

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PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
Name of Purchaser:                                                              
Blaise A. Aguirre                           
Signature of Authorized Signatory of Purchaser:          /s/ Blaise A.
Aguirre                 
Name of Authorized Signatory:                                           Blaise
A. Aguirre        
Title of Authorized
Signatory:                                            Self                                                                           
Email Address of Authorized Signatory:
_____________________________________________
Facsimile Number of Authorized Signatory:
__________________________________________
Address for Notice of Purchaser:

Address for Delivery of Securities for Purchaser (if not same as address for
notice):

Subscription Amount:              $30,000                      

Warrant Shares:                         15,000                                

EIN Number:

[SIGNATURE PAGES CONTINUE]

 
 

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PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
Name of Purchaser:                                                            
 Robert E. Baer              
Signature of Authorized Signatory of Purchaser:         /s/ Robert E.
Baer            
Name of Authorized Signatory:                                         Robert E.
Baer          
Title of Authorized Signatory: _____________________________________________
Email Address of Authorized Signatory: _____________________________________
Facsimile Number of Authorized Signatory: ___________________________________
Address for Notice of Purchaser:

Address for Delivery of Securities for Purchaser (if not same as address for
notice):

Subscription Amount:              $20,000                      

Warrant Shares:                        10,000                                

EIN Number:

[SIGNATURE PAGES CONTINUE]

 
 

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PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
Name of Purchaser:                                                             
Craig Horn                
Signature of Authorized Signatory of Purchaser:         /s/ Craig Horn   
Name of Authorized Signatory:                                         Craig
Horn             
Title of Authorized Signatory: _____________________________________________
Email Address of Authorized Signatory: _____________________________________
Facsimile Number of Authorized Signatory: ___________________________________
Address for Notice of Purchaser:

Address for Delivery of Securities for Purchaser (if not same as address for
notice):

Subscription Amount:              $50,000                      

Warrant Shares:                         25,000                                

EIN Number:

[SIGNATURE PAGES CONTINUE]

 
 

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PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
Name of Purchaser:                                                            
Daniel J. Phillips     
Signature of Authorized Signatory of Purchaser:        /s/ Daniel J.
Phillips               
Name of Authorized Signatory:                                         Daniel J.
Phillips      
Title of Authorized
Signatory:                                           Investor               
Email Address of Authorized Signatory: ______________________________________
Facsimile Number of Authorized Signatory: ____________________________________
Address for Notice of Purchaser:

Address for Delivery of Securities for Purchaser (if not same as address for
notice):

Subscription Amount:             $30,000                      

Warrant Shares:                        15,000                                

EIN Number:

[SIGNATURE PAGES CONTINUE]

 
 
 

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PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
Name of Purchaser:                                                             
Encompass Fund         
Signature of Authorized Signatory of Purchaser:         /s/ Marshall G.
Berol           
Name of Authorized Signatory:                                          Marshall
G. Berol          
Title of Authorized
Signatory:                                           Secretary        
Email Address of Authorized Signatory: _____________________________________
Facsimile Number of Authorized Signatory: ___________________________________
Address for Notice of Purchaser:

Address for Delivery of Securities for Purchaser (if not same as address for
notice):

Subscription Amount:             $150,000                      

Warrant Shares:                         75,000                                

EIN Number:

[SIGNATURE PAGES CONTINUE]

 
 

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PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
Name of Purchaser:                                                          
  Harvest Small Cap Partners, L.P.       
Signature of Authorized Signatory of Purchaser:        /s/ KC
Lynch                  
Name of Authorized Signatory:                                         KC
Lynch          
Title of Authorized
Signatory:                                           President of General
Partner              
Email Address of Authorized Signatory: ______________________________________
Facsimile Number of Authorized Signatory: ___________________________________
Address for Notice of Purchaser:

Address for Delivery of Securities for Purchaser (if not same as address for
notice):

Subscription Amount:              $448,830       

Warrant Shares:                          224,415     

EIN Number:

[SIGNATURE PAGES CONTINUE]

 
 

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PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
Name of Purchaser:                                                             
Harvest Small Cap Partners Master, Ltd.      
Signature of Authorized Signatory of Purchaser:         /s/ KC
Lynch              
Name of Authorized Signatory:                                         KC
Lynch     
Title of Authorized
Signatory:                                           President of Investment
Manager           
Email Address of Authorized Signatory: _____________________________________
Facsimile Number of Authorized Signatory: ___________________________________
Address for Notice of Purchaser:

Address for Delivery of Securities for Purchaser (if not same as address for
notice):

Subscription Amount:                $551,170                      

Warrant Shares:                          275,585                      

EIN Number:

[SIGNATURE PAGES CONTINUE]

 
 

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PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
Name of Purchaser:                                                             
John J. Driscoll           
Signature of Authorized Signatory of Purchaser:          /s/ John J.
Driscoll              
Name of Authorized Signatory:                                          John J.
Driscoll                 
Title of Authorized
Signatory:                                            Individual                 
Email Address of Authorized Signatory: ______________________________________
Facsimile Number of Authorized Signatory: ____________________________________
Address for Notice of Purchaser:

Address for Delivery of Securities for Purchaser (if not same as address for
notice):

Subscription Amount:              $25,000                      

Warrant Shares:                         12,500                                

EIN Number:

[SIGNATURE PAGES CONTINUE]

 
 

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PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
Name of Purchaser:                                                             
Kenneth and Rebecca King      
Signature of Authorized Signatory of Purchaser:         /s/ Kenneth M. King, /s/
Rebecca S. King 
Name of Authorized Signatory:                                          Kenneth
and Rebecca King      
Title of Authorized
Signatory:                                            Individual
Investors       
Email Address of Authorized Signatory: _____________________________________
Facsimile Number of Authorized Signatory: ___________________________________
Address for Notice of Purchaser:

Address for Delivery of Securities for Purchaser (if not same as address for
notice):

Subscription Amount:               $100,000                      

Warrant Shares:                         50,000                                

EIN Number:

[SIGNATURE PAGES CONTINUE]

 
 

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PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
Name of Purchaser:                                                           
  Laura Tze and Hsiung Chia Tze (TIC)    
Signature of Authorized Signatory of Purchaser:         /s/ Laura Tze, /s/
Hsiung Chia Tse              
Name of Authorized Signatory:                                         Laura Tze,
Hsiung Chia Tze                       
Title of Authorized Signatory: _____________________________________________
Email Address of Authorized Signatory: _____________________________________
Facsimile Number of Authorized Signatory: ___________________________________
Address for Notice of Purchaser:

Address for Delivery of Securities for Purchaser (if not same as address for
notice):

Subscription Amount:             $50,000                      

Warrant Shares:                       25,000                                

EIN Number:

[SIGNATURE PAGES CONTINUE]

 
 

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PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
Name of Purchaser:                                                              
Lazar G. Schafran   
Signature of Authorized Signatory of Purchaser:          /s/ Lazar G.
Schafran   
Name of Authorized Signatory:                                           Lazar G.
Schafran     
Title of Authorized Signatory: _____________________________________________
Email Address of Authorized Signatory: _____________________________________
Facsimile Number of Authorized Signatory: __________________________________
Address for Notice of Purchaser:

Address for Delivery of Securities for Purchaser (if not same as address for
notice):

Subscription Amount:               $20,000                      

Warrant Shares:                         10,000                                

EIN Number:

[SIGNATURE PAGES CONTINUE]

 
 

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PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
Name of Purchaser:                                                             
Marshall G. Berol     
Signature of Authorized Signatory of Purchaser:         /s/ Marshall G.
Berol        
Name of Authorized Signatory:                                          Marshall
G. Berol                
Title of Authorized Signatory:                                           
Individual        
Email Address of Authorized Signatory: ____________________________________
Facsimile Number of Authorized Signatory: __________________________________
Address for Notice of Purchaser:

Address for Delivery of Securities for Purchaser (if not same as address for
notice):

Subscription Amount:               $50,000                      

Warrant Shares:                          25,000                                

EIN Number:

[SIGNATURE PAGES CONTINUE]

 
 

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PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
Name of
Purchaser:                                                               
Malcolm Gissen & Judith Cohen 2003 Trust U/A Dated 10/27/2003
Signature of Authorized Signatory of Purchaser:           /s/ Malcolm H.
Gissen       
Name of Authorized Signatory:                                           Malcolm
H. Gissen    
Title of Authorized
Signatory:                                             Trustee   
Email Address of Authorized Signatory: ____________________________________
Facsimile Number of Authorized Signatory: _________________________________
Address for Notice of Purchaser:

Address for Delivery of Securities for Purchaser (if not same as address for
notice):

Subscription Amount:              $25,000                      

Warrant Shares:                         12,500                                

EIN Number:

[SIGNATURE PAGES CONTINUE]

 
 

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PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
Name of Purchaser:                                                            
 Norwood Partners, LP   
Signature of Authorized Signatory of Purchaser:         /s/ Charles Hoeveler    
Name of Authorized Signatory:                                          Charles
Hoeveler     
Title of Authorized Signatory:                                         
  Managing Partner        
Email Address of Authorized Signatory: ______________________________________
Facsimile Number of Authorized Signatory: ____________________________________
Address for Notice of Purchaser:

Address for Delivery of Securities for Purchaser (if not same as address for
notice):

Subscription Amount:              $100,000                      

Warrant Shares:                         50,000                                

EIN Number:

[SIGNATURE PAGES CONTINUE]

 
 

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PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
Name of Purchaser:                                                              
Paul L. Craig      
Signature of Authorized Signatory of Purchaser:          /s/ Paul L. Craig  
Name of Authorized Signatory:                                          Paul L.
Craig    
Title of Authorized Signatory:                                             an
individual     
Email Address of Authorized Signatory: _____________________________________
Facsimile Number of Authorized Signatory: ___________________________________
Address for Notice of Purchaser:

Address for Delivery of Securities for Purchaser (if not same as address for
notice):

Subscription Amount:               $50,000                      

Warrant Shares:                          25,000                                

EIN Number:

[SIGNATURE PAGES CONTINUE]

 
 

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PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
Name of Purchaser:                                                             
Belliveau Investment Trust     
Signature of Authorized Signatory of Purchaser:         /s/ Robert E. Belliveau,
/s/ Merrilyn C. Belliveau
Name of Authorized Signatory:                                          Robert E.
Belliveau, Merrilyn C. Belliveau     
Title of Authorized
Signatory:                                            Trustees   
Email Address of Authorized Signatory: ______________________________________
Facsimile Number of Authorized Signatory: ___________________________________
Address for Notice of Purchaser:

Address for Delivery of Securities for Purchaser (if not same as address for
notice):

Subscription Amount:              $20,000                      

Warrant Shares:                         10,000                                

EIN Number:

[SIGNATURE PAGES CONTINUE]

 
 

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PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
Name of Purchaser:                                                             
Sarah R. Pease   
Signature of Authorized Signatory of Purchaser:         /s/ Sarah R.
Pease          
Name of Authorized Signatory:                                          Sarah R.
Pease     
Title of Authorized
Signatory:                                            Individual         
Email Address of Authorized Signatory: _____________________________________
Facsimile Number of Authorized Signatory: ___________________________________
Address for Notice of Purchaser:

Address for Delivery of Securities for Purchaser (if not same as address for
notice):

Subscription Amount:               $20,000                      

Warrant Shares:                          10,000                                

EIN Number:

[SIGNATURE PAGES CONTINUE]

 
 

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PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
Name of Purchaser:                                                         
    Stephen Marsh     
Signature of Authorized Signatory of Purchaser:         /s/ Stephen Marsh    
Name of Authorized Signatory: ________________________________________
Title of Authorized Signatory: _________________________________________
Email Address of Authorized Signatory: _________________________________
Facsimile Number of Authorized Signatory: ______________________________
Address for Notice of Purchaser:

Address for Delivery of Securities for Purchaser (if not same as address for
notice):

Subscription Amount:               $10,000                      

Warrant Shares:                         5,000                      

EIN Number:

[SIGNATURE PAGES CONTINUE]

 
 

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PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
Name of Purchaser:                                                            
Suresh J. Doshi        
Signature of Authorized Signatory of Purchaser:        /s/ Suresh J.
Doshi        
Name of Authorized Signatory:                                         Suresh J.
Doshi         
Title of Authorized Signatory: _____________________________________________
Email Address of Authorized Signatory: ______________________________________
Facsimile Number of Authorized Signatory: ___________________________________
Address for Notice of Purchaser:

Address for Delivery of Securities for Purchaser (if not same as address for
notice):

Subscription Amount:               $25,000                      

Warrant Shares:                          12,500                                

EIN Number:

[SIGNATURE PAGES CONTINUE]

 
 

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PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
Name of Purchaser:                                                             
Thomas H. McInish        
Signature of Authorized Signatory of Purchaser:         /s/ Thomas H.
McInish     
Name of Authorized Signatory: __________________________________________
Title of Authorized Signatory: ___________________________________________
Email Address of Authorized Signatory: ___________________________________
Facsimile Number of Authorized Signatory: _________________________________
Address for Notice of Purchaser:

Address for Delivery of Securities for Purchaser (if not same as address for
notice):

Subscription Amount:               $70,000                      

Warrant Shares:                          35,000                                

EIN Number:

[SIGNATURE PAGES CONTINUE]

 
 

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PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
Name of Purchaser:                                                            
Thomas Nigra   
Signature of Authorized Signatory of Purchaser:        /s/ Thomas P. Nigra      
Name of Authorized Signatory:                                        Thomas P.
Nigra       
Title of Authorized Signatory: _____________________________________________
Email Address of Authorized Signatory: _____________________________________
Facsimile Number of Authorized Signatory: ___________________________________
Address for Notice of Purchaser:

Address for Delivery of Securities for Purchaser (if not same as address for
notice):

Subscription Amount:             $50,000                      

Warrant Shares:                       25,000                                

EIN Number:

 
 

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SCHEDULE A

       
Purchaser Name
Final Share Allocations
 
Final Warrant Allocations
 
Harvest Small Cap Partners Master, Ltd.
275,585
 
275,585
Harvest Small Cap Partners L.P.
224,415
 
224,415
Artorius Trading
150,000
 
150,000
Encompass Fund
75,000
 
75,000
Kenneth & Rebecca King
50,000
 
50,000
Norwood Partners, LP
50,000
 
50,000
Thomas H. McInish
35,000
 
35,000
Craig Horn
25,000
 
25,000
Laura Tze and Hsiung Chia Tze TIC
25,000
 
25,000
Marshall G. Berol
25,000
 
25,000
Paul Craig
25,000
 
25,000
Thomas Peter Nigra
25,000
 
25,000
Blaise A. Aguirre
15,000
 
15,000
Daniel Phillips
15,000
 
15,000
John J. Driscoll
12,500
 
12,500
Malcolm Gissen & Judith Cohen 2003 Trust U/A 10/27/2003
12,500
 
12,500
Suresh J. Doshi
12,500
 
12,500
Robert E. Baer
10,000
 
10,000
Lazar G. Schafran
10,000
 
10,000
Belliveau Investment Trust
10,000
 
10,000
Sarah R. Pease
10,000
 
10,000
Bernard J. Guarnera
5,000
 
5,000
Stephen Marsh
5,000
 
5,000
TOTAL:
1,102,500
 
1,102,500

 
 

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ANNEX A
 
CLOSING STATEMENT
 
January 19, 2012
 
The undersigned does hereby give written notice and direct Computershare, as
escrow agent, to disburse via wire transfer of immediately available U.S. funds,
the amounts set forth below to the following parties in accordance with the
respective wire transfer and account debit instructions set forth below:
 
United States Antimony Corp.
Amount:
   
Name of Account:
   
Bank:
   
ABA number:
   
Account number:
                   
Global Hunter Securities LLC
Amount:
   
Bank:
   
ABA  number:
   
Beneficiary:
   
Beneficiary Account:
   
For further credit to:
 

 
Jones Walker LLP
Amount:
   
Name of Account:
   
Bank:
   
ABA number:
   
Account number:
             
Sidley Austin LLP
Amount:
 
 
Name of Account:
   
Bank:
   
ABA number:
   
Account number:
 

 
 
 

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

 
UNITED STATES ANTIMONY CORPORATION
 
 
By:   /s/ John Lawrence                             
        Name:  John Lawrence
       Title: Chief Executive Officer

 

 

GLOBAL HUNTER SECURITIES, LLC
 

By:   /s/ J. Barry                                      
        Name:  J Barry
       Title: Managing Director
 
 
 
 

 
 
 

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ANNEX B
CONFIDENTIAL PURCHASER QUESTIONNAIRE

UNITED STATES ANTIMONY CORPORATION

THIS QUESTIONNAIRE MUST BE ANSWERED FULLY AND RETURNED ALONG WITH YOUR COMPLETED
SUBSCRIPTION AGREEMENT IN CONNECTION WITH YOUR PROSPECTIVE PURCHASE OF
SECURITIES FROM UNITED STATES ANTIMONY CORPORATION  (THE “COMPANY”).

THE INFORMATION SUPPLIED IN THIS QUESTIONNAIRE WILL BE HELD IN STRICT
CONFIDENCE.  NO INFORMATION WILL BE DISCLOSED EXCEPT TO THE EXTENT THAT SUCH
DISCLOSURE IS REQUIRED BY LAW OR REGULATION, OTHERWISE DEMANDED BY PROPER LEGAL
PROCESS OR IN LITIGATION INVOLVING THE COMPANY AND ITS CONTROLLING PERSONS.

Capitalized terms used herein without definition shall have the respective
meanings given such terms as set forth in the Securities Purchase Agreement
between the Company and the Purchaser signatory thereto (the “Purchase
Agreement”) dated as of January __, 2012.

(1)           The undersigned represents and warrants that he, she or it comes
within at least one category marked below, and that for any category marked, he,
she or it has truthfully set forth, where applicable, the factual basis or
reason the undersigned comes within that category.  The undersigned agrees to
furnish any additional information which the Company deems necessary in order to
verify the answers set forth below.

Category A  __
The undersigned is an individual (not a partnership, corporation, etc.) whose
individual net worth, or joint net worth with his or her spouse, presently
exceeds $1,000,000.

Explanation.  In calculating net worth you may include equity in personal
property and real estate, including your principal residence, cash, short-term
investments, stock and securities.  Equity in personal property and real estate
should be based on the fair market value of such property less debt secured by
such property.

Category B  __
The undersigned is an individual (not a partnership, corporation, etc.) who had
an income in excess of $200,000 in each of the two most recent years, or joint
income with his or her spouse in excess of $300,000 in each of those years (in
each case including foreign income, tax exempt income and full amount of capital
gains and losses but excluding any income of other family members and any
unrealized capital appreciation) and has a reasonable expectation of reaching
the same income level in the current year.

Category C  __
The undersigned is a director or executive officer of the Company which is
issuing and selling the Securities.

 
 

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Category D  __
The undersigned is a bank, as defined in Section 3(a)(2) of the Securities Act
of 1933, as amended (the “Act”); a savings and loan associa­tion or other
institution as defined in Section 3(a)(5)(A) of the Act, whether acting in its
individual or fiduciary capacity; any broker or dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934, as amended; any insurance
company as defined in Section 2(13) of the Act; any investment company
registered under the Investment Company Act of 1940 or a business development
company as defined in Section 2(a)(48) of that Act; any Small Business
Investment Company licensed by the U.S. Small Business Administration under
Section 301(c) or (d) of the Small Business Investment Act of 1958; any plan
established and maintained by a state, its political subdivisions, or any agency
or instrumentality of a state or its political subdivisions, for the benefit of
its employees, if such plan has total assets in excess of $5,000,000; any
employee benefit plan within the meaning of the Employee Retirement Income
Security Act of 1974 if the investment decision is made by a plan fiduciary, as
defined in Section 3(21) of such act, which is either a bank, savings and loan
association, insurance company, or registered investment advisor, or if the
employee benefit plan has total assets in excess of $5,000,000 or, if a
self-directed plan, with investment decisions made solely by persons that are
accredited investors. (describe entity)

 

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Category E  __
The undersigned is a private business development company as defined in section
202(a) (22) of the Investment Advisors Act of 1940. (describe entity)

 

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Category F  __
The undersigned is either a corporation, partnership, Massachusetts or similar
business trust, or non-profit organization within the meaning of
Section 501(c)(3) of the Internal Revenue Code, in each case not formed for the
specific purpose of acquiring the Securities and with total assets in excess of
$5,000,000. (describe entity)

 

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Category G  __
The undersigned is a trust with total assets in excess of $5,000,000, not formed
for the specific purpose of acquiring the Securities, where the purchase is
directed by a “sophisticated investor” as defined in
Regulation  506(b)(2)(ii) under the Act.

 
Category H  __
The undersigned is an entity (other than a trust) in which all of the equity
owners are “accredited investors” within one or more of the above
categories.  If relying upon this Category alone, each equity owner must
complete a separate copy of this Purchaser Questionnaire.  (describe entity)

 

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The undersigned agrees that the undersigned will notify the Company at any time
on or prior to the applicable Closing (as defined in the Purchase Agreement) in
the event that the representations and warranties in this Purchaser
Questionnaire shall cease to be true, accurate and complete.

(2)           Suitability (please answer each question)

 
(a)
For an individual, please describe your current employment, including the
company by which you are employed and its principal business:

 

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(b)
For individuals, do you expect your current level of income to significantly
decrease in the foreseeable future?

 
YES
   
NO
 

 
(c)
For trust, corporate, partnership and other institutional subscribers, do you
expect your total assets to significantly decrease in the foreseeable future?

 
YES
   
NO
 

 
(d)
For all subscribers, are you familiar with the risk aspects and the
non-liquidity of investments such as the Securities for which you seek to
purchase?

 
YES
   
NO
 

 
 

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(e)
For all subscribers, do you understand that there is no guarantee of financial
return on this investment and that you run the risk of losing your entire
investment?

YES
   
NO
 

(3)           Manner in which title is to be held: (circle one)

(a)           Individual Ownership
(b)           Community Property
(c)           Joint Tenant with Right of Survivorship (both parties must sign)
(d)           Partnership
(e)           Tenants in Common
(f)           Company
(g)           Trust
(h)           Other

(4)           FINRA Affiliation.

Are you affiliated or associated with an FINRA member firm (please check one):

YES
   
NO
 

If Yes, please describe how you are affiliated/associated:

_________________________________________________________
_________________________________________________________
_________________________________________________________

*If subscriber is a Registered Representative with an FINRA member firm, have
the following acknowledgment signed by the appropriate party:

The undersigned FINRA member firm acknowledges receipt of the notice required by
the FINRA Conduct Rules.

_________________________________
Name of FINRA Member Firm

By: ______________________________
Authorized Officer

Date: ____________________________

 
 

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(5) For Trust Subscribers

A. Certain trusts generally may not qualify as accredited investors except under
special circumstances.  Therefore, if you intend to purchase the shares of the
Company’s stock in whole or in part through a trust, please answer each of the
following questions.

Is the trustee of the trust a national or state bank that is acting in its
fiduciary capacity in making the investment on behalf of the trust?

Yes o                                         No o

Does this investment in the Company exceed 10% of the trust assets?

Yes o                                         No o

B. If the trust is a revocable trust, please complete Question 1 below.  If the
trust is an irrevocable trust, please complete Question 2 below.

1.           REVOCABLE TRUSTS

Can the trust be amended or revoked at any time by its grantors:

Yes o                                         No o

If yes, please answer the following questions relating to each grantor (please
add sheets if necessary):

Grantor Name: _________________________

Net worth of grantor (including spouse, if applicable), including home, home
furnishings and automobiles exceeds $1,000,000?

Yes o                                         No o

OR

Income (exclusive of any income attributable to spouse) was in excess of
$200,000 for 2009 and 2010 and is reasonably expected to be in excess of
$200,000 for 2011?

Yes o                                         No o

OR                                                                                                                                         

 
 

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Income (including income attributable to spouse) was in excess of $300,000 for
2009 and 2010 and is reasonably expected to be in excess of $300,000 for 2011?

Yes o                                         No o

2.           IRREVOCABLE TRUSTS

If the trust is an irrevocable trust, please answer the following questions:

Please provide the name of each trustee:

Trustee Name: ________________________________________

Trustee Name: ________________________________________

Does the trust have assets greater than $5 million?

Yes o                                         No o

Do you have such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risks of an investment in the
Company?

Yes o                                         No o

Indicate how often you invest in:

Marketable Securities

Often o                      Occasionally
o                                Seldom o                      Never o

Restricted Securities

Often o                      Occasionally
o                                Seldom o                      Never o

Venture Capital Companies

Often o                      Occasionally
o                                Seldom o                      Never o

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The undersigned has been informed of the significance to the Company of the
foregoing representations and answers contained in this Confidential Purchaser
Questionnaire and such representations and answers have been provided with the
understanding that the Company and the Selling Agent will rely on them.

                                                                           Individual

Date:           ________________________                                    _______________________________
Name of Individual
(Please type or print)

_______________________________
Signature of Individual

_______________________________
Name of Joint Owner
(Please type or print)

_______________________________
Signature (Joint Owner)

Partnership, Corporation or
Other Entity

Date:           ________________________                                  
_______________________________
Print or Type Entity Name

               By: Name:_______________________
      Print or Type Name

              Title:
___________________________                                                                           

              _________________________________
              Signature

              Title:
____________________________                                                                           

              _________________________________
              Signature (other authorized signatory)