EXHIBIT 10.1

 

Securities Purchase Agreement

 

THIS SECURITIES PURCHASE AGREEMENT (this “SPA”) is dated as of March [•], 2013,
between Armada Oil, Inc., a Nevada 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, the Company and the Purchasers are executing and delivering this SPA in
reliance upon an exemption from securities registration afforded by the
provisions of Section 4(2), Section 4(6) and/or Regulation D (“Regulation D”) as
promulgated by the United States Securities and Exchange Commission (the “SEC”)
under the Securities Act of 1933, as amended (the “Securities Act”); and

 

Whereas, the parties desire that, subject to the terms and conditions set forth
in this SPA, the Company issue and sell to each Purchaser, and each Purchaser,
severally and not jointly, purchase from the Company, securities of the Company
as more fully described in this SPA.

 

Now, Therefore, In Consideration of the mutual covenants contained in this SPA,
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. In addition to the terms defined elsewhere in this SPA
(a) capitalized terms that are not otherwise defined herein have the meanings
given to such terms in the Notes (as defined herein), and (b) the following
terms have the meanings set forth in this Section 1.1:

 

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

 

“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.

 

“Board of Directors” means the board of directors of the Company.

 

“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.

 

“Closing” means each 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, but in no event later than the Final
Closing Date.

 

“Common Stock” means the common stock of the Company, par value $0.001 per
share, and any other class of securities into which such securities may
hereafter be reclassified or changed.

 

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

 

 

 

 

“Company Counsel” means Sierchio & Company, LLP with offices located at 430 Park
Avenue, Suite 702, New York, New York 10022.

 

“Escrow Agent” means Sierchio & Company, LLP with offices located at 430 Park
Avenue, Suite 702, New York, New York 10022.

 

“Escrow Agreement” means the Escrow Agreement to be entered into between
Purchaser, Company and Escrow Agent.

 

“Effective Date” means the earliest of the date that (a) a registration
statement covering the Warrant Shares has been declared effective by the SEC,
(b) all of the Warrant Shares have been sold pursuant to Rule 144 or may be sold
pursuant to Rule 144 without the requirement for the Company to be in compliance
with the current public information required under Rule 144 and without volume
or manner-of-sale restrictions or (c) following the one year anniversary of the
Closing Date, provided that a holder of Warrant Shares is not an Affiliate of
the Company, all of the Warrant Shares may be sold pursuant to an exemption from
registration under Section 4(1) of the Securities Act without volume or
manner-of-sale restrictions and Company Counsel has delivered to such holders a
standing written unqualified opinion that resales may then be made by such
holders of the Warrant Shares pursuant to such exemption which opinion shall be
in form and substance reasonably acceptable to such holders.

 

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

 

“Final Closing Date” means the Business Day on which: (i) the Company has
accepted subscriptions for the Maximum Amount; (ii) June 1, 2013, unless
extended by the Company in its sole discretion and without notice for up to an
additional ninety (90) days; or (iii), on such earlier date as the Company may
deem advisable, even if all of the Notes have not yet been sold.

 

“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.

 

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

 

“Legend Removal Date” shall have the meaning ascribed to such term in Section
4.1(c).

 

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

 

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

 

“Maximum Offering” shall mean the sale of Notes having an aggregate principal
amount of $4,000,000.

 

“Minimum Offering” shall mean the sale of Notes having an aggregate principal
amount of $300,000.

 

“Notes” means the Series A Senior Unsecured 9.625% Notes carrying an annual
interest rate of 9.625% per annum, compounded on a quarterly basis, with,
subject to the terms therein, a maturity date of May 30, 2014, in the form of
Exhibit A attached hereto.

“Offering” means the sale of Securities by the Company pursuant to this SPA.

 

“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.

 

“Purchaser Party” shall have the meaning ascribed to such term in Section 4.8.

 

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

 

 

 

 

“Rule 144” means Rule 144 promulgated by the SEC 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 SEC having substantially the same effect as such Rule.

 

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

 

“Securities” means collectively, the Notes, the Warrants and the Warrant Shares.

 

“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).

 

“Subscription Amount” means, as to each Purchaser, the amounts set forth below
such Purchaser’s signature block on the signature pages hereto next to the
heading “Subscription Amount,” in United States Dollars.

 

“Subsidiary” means any subsidiary of the Company, as set forth in the SEC
reports, including any direct or indirect subsidiary of the Company formed or
acquired after the date hereof.

 

“Trading Market” means any of the following markets or exchanges on which the
Common Stock is listed or quoted for trading on the date in question: the NYSE
MKT (formerly NYSE AMEX), the Nasdaq Capital Market, the Nasdaq Global Market,
the Nasdaq Global Select Market, the New York Stock Exchange, the OTC Bulletin
Board, the OTC Markets Group Inc. (or any successors to any of the foregoing).

 

“Transaction Documents” means this SPA, the Notes, 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 Broadridge Corporate Issuer Solutions, located at 1717
Arch Street, Suite 1300, Philadelphia, PA 19103, or such other transfer agent as
the Company may then maintain.

 

“Warrants” means, collectively, the Series D Common Stock Purchase Warrants
delivered to the Purchasers at the Closing in accordance with Section 2.2(a)
hereof, which Warrants shall be exercisable beginning September 1, 2013 through
March 1, 2018, substantially in the form of Exhibit B attached hereto.

 

“Warrant Shares” means the shares of Common Stock issuable upon exercise of the
Warrants.

 

ARTICLE II

PURCHASE AND SALE

 

2.1         Closing.

 

(a)         The sale and purchase of the Shares under this SPA shall take place
at one or more closings (each of which is referred to herein as a “Closing” and
each date of a Closing is referred to herein as a “Closing Date”).

 

(b)          Subject to the terms and conditions set forth in this SPA, and in
reliance upon the Company’s and the Purchasers’ representations set forth below,
at the Initial Closing, the Company shall sell to the Purchasers, and the
Purchasers shall purchase from the Company, severally and not jointly, an
aggregate principal amount of Notes equal to no less than $300,000. To the
extent that less than the Maximum Offering is consummated Business the Initial
Closing, subsequent closings (each a “Subsequent Closing”) shall be held on the
last Trading Day in each calendar month following the Initial Closing Date (each
a “Subsequent Closing Date”) through the Final Closing Date. At each Subsequent
Closing, the Company will issue and sell, and the Purchasers shall purchase up
to an aggregate principal amount of Notes equal to the difference between the
aggregate principal amount of Notes issued prior to such Subsequent Closing Date
and $4,000,000.

 

 

 

 

(c)         Simultaneously with its execution and delivery of this SPA, each
Purchaser shall deliver to the Escrow Agent, via wire transfer or a certified
check, immediately available funds equal to its Subscription Amount as set forth
on the signature page hereto executed by such Purchaser, and the Company shall
deliver to each Purchaser its respective Note and a Warrant, as determined
pursuant to Section 2.2(a)(iii) and Section 2.2(a)(iv), and the Company and each
Purchaser shall deliver the other items set forth in Section 2.2 at the Closing.
Upon satisfaction of the conditions set forth in Sections 2.2 and 2.3, the
Initial Closing and any Subsequent Closings shall occur at the offices of the
Company Counsel or such other location as the parties shall mutually agree.

 

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 SPA duly executed by the Company;

 

(ii)         the Escrow Agreement duly executed by the Company;

 

(iii)        a Note in the principal amount equal to such Purchaser’s
Subscription Amount, registered in the name of such Purchaser;

 

(iv)        a Warrant registered in the name of such Purchaser to purchase up to
a number of shares of Common Stock equal to 100% of the quotient of the
Purchaser’s Subscription Amount divided by $0.75, with an exercise price equal
to $0.75, subject to adjustment as provided therein (such Warrant document shall
be delivered within ten (10) Business Days of each Closing). The Purchaser shall
not have any rights as a shareholder of the Company with respect to the Warrant
Shares until such Purchaser exercises such Warrants and the Warrant Shares are
issued to the Purchaser.

 

(b)         On or prior to the Closing Date, each Purchaser shall deliver or
cause to be delivered to the Company the following:

 

(i)          this SPA duly executed by such Purchaser;

 

(ii)         the Escrow Agreement duly executed by such Purchaser; and

 

(iii)        such Purchaser’s Subscription Amount by wire transfer or check to
the Company or the Escrow Agent.

 

The Company and Purchaser hereby agree and acknowledge that the Escrow Agent
shall not be obligated to accept any Subscription Amounts from either the
Company or Purchaser until it receives a duly executed Escrow Agreement from
each of the Company and Purchaser. The Company and Purchaser further agree and
acknowledge that the Escrow Agent shall disburse the Subscription Amounts
received in accordance with the Escrow Agreement.

 

2.3         Closing Conditions.

 

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

 

(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 in which case they shall be accurate as of such date);

 

(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 SPA.

 

(b)          The respective obligations of the Purchasers hereunder in
connection with the Closing are subject to the following conditions being met or
waived by the Purchaser:

 

 

 

 

(i)         the accuracy in all material respects on the Closing Date of the
representations and warranties of the Company contained herein (unless as of a
specific date therein in which case they shall be accurate as of such 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 SPA; and

 

(iv)        there shall have been no Material Adverse Effect with respect to the
Company since the date hereof.

 

Within five (5) Business Days of the Closing, Escrow Agent shall deliver to each
of Purchaser and the Company a duly countersigned copy of the Escrow Agreement.
Anything in this Agreement to the contrary notwithstanding, the delivery of a
countersigned copy of the Escrow Agreement to each of Purchaser and the Company
by the Escrow Agent shall not be a condition to Closing.

 

2.4         Company Discretion to Accept or Reject Subscriptions. Purchaser
understands and agrees that the Company in its sole discretion reserves the
right to accept or reject any subscription for the Securities, in whole or in
part, notwithstanding prior receipt by the Purchaser of notice of acceptance of
this subscription. The Company shall have no obligation hereunder until the
Company shall execute and deliver to the Purchaser an executed copy of this SPA,
along with all of Company’s closing deliverables set forth above. If this
subscription is rejected in whole, or the offering of Securities is terminated,
all funds received from the Purchaser will be returned without interest or
offset, and this SPA shall thereafter be of no further force or effect. If the
subscription is rejected in part, the funds for the rejected portion of the
subscription set forth herein will be returned without interest or offset, and
this SPA will continue in full force and effect to the extent this subscription
was accepted.

 

Article III

Representations And Warranties

 

3.1         Representations and Warranties of the Company. Except as set forth
in the Disclosure Schedules attached hereto, which Disclosure Schedules as from
time to time amended 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)          Organization and Qualification. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the requisite corporate power to own
its properties and to carry on its business as presently conducted. The Company
is duly qualified as a foreign corporation to do business and is in good
standing in each jurisdiction where the nature of the business conducted or
property owned by it makes such qualification necessary, other than those
jurisdictions in which the failure to so qualify would not have a Material
Adverse Effect. For purposes of this SPA, a “Material Adverse Effect” shall mean
a material adverse effect on the financial condition, results of operations,
prospects, properties or business of the Company and its Subsidiaries taken as a
whole. For purposes of this SPA, “Subsidiary” means, with respect to any entity
at any date, any corporation, limited or general partnership, limited liability
company, trust, estate, association, joint venture or other business entity of
which more than 30% of (i) the outstanding capital stock having (in the absence
of contingencies) ordinary voting power to elect a majority of the board of
directors or other managing body of such entity, (ii) in the case of a
partnership or limited liability company, the interest in the capital or profits
of such partnership or limited liability company or (iii) in the case of a
trust, estate, association, joint venture or other entity, the beneficial
interest in such trust, estate, association, joint venture, or other entity that
is, at the time of determination, owned or controlled directly or indirectly
through one or more intermediaries, by such entity.

 

 

 

 

(b)         Authorization; Enforcement. The Company has the requisite corporate
power and authority to enter into and to consummate the transactions
contemplated by this SPA and each of the other Transaction Documents and
otherwise to carry out its obligations hereunder and thereunder. The execution
and delivery of this SPA and each of the other 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 herewith or therewith other than in
connection with the Required Approvals. This SPA and each other 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.

 

(c)         No Conflicts. The execution, delivery and performance by the Company
of this SPA and the other Transaction Documents to which it is a party, the
issuance and sale of the Securities and the consummation by it of the
transactions contemplated hereby and thereby do not and will not: (i) conflict
with or violate any provision of the Company’s or any Subsidiary’s certificate
or articles of incorporation, bylaws or other organizational or charter
documents, (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.

 

(d)         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 4.6 of this SPA, (ii)
to the extent required, the notice and/or application(s) to each applicable
Trading Market for the issuance and sale of the Securities and the listing of
the Warrant Shares for trading thereon in the time and manner required thereby,
and (iii) the filing of Form D with the SEC and such filings as are required to
be made under applicable state securities laws (collectively, the “Required
Approvals”).

 

(e)         Issuance of the Securities. The Securities 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 imposed by the Company other than restrictions on
transfer provided for in the Transaction Documents. The Warrant Shares, when
issued in accordance with the terms of the Transaction Documents, will be
validly issued, fully paid and nonassessable, free and clear of all Liens
imposed by the Company other than restrictions on transfer provided for in the
Transaction Documents. 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 (as hereinafter defined) on the date hereof.

 

 

 

 

(f)         Capitalization. Schedule 3.1(f) sets forth the capitalization of the
Company. Except as noted on Schedule 3.1(f), the Company has not issued any
capital stock since its most recently filed periodic report under the Exchange
Act, other than pursuant to the exercise of employee stock options under the
Company’s stock option plans and pursuant to the conversion and/or exercise of
Common Stock Equivalents outstanding as of the date of the most recently filed
periodic report under the Exchange Act. No Person has any right of first
refusal, preemptive right, right of participation, or any similar right to
participate in the transactions contemplated by the Transaction Documents.
Except as set forth on Schedule 3.1(f) or in SEC Reports and a result of the
purchase and sale of the Securities pursuant to this SPA and the Transaction
Documents, there are no outstanding options, warrants, scrip rights to subscribe
to, calls or commitments of any character whatsoever relating to, or securities,
rights or obligations convertible into or exercisable or exchangeable for, or
giving any Person any right to subscribe for or acquire any shares of Common
Stock, or contracts, commitments, understandings or arrangements by which the
Company or any Subsidiary is or may become bound to issue additional shares of
Common Stock or Common Stock Equivalents. 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. All of the
outstanding shares of capital stock of the Company are duly authorized, validly
issued, fully paid and nonassessable, have been issued in compliance with all
federal and state securities laws, and none of such outstanding shares was
issued in violation of any preemptive rights or similar rights to subscribe for
or purchase securities. No further approval or authorization of any stockholder,
the Board of Directors or others is required for the issuance and sale of the
Securities.

 

(g)         SEC Reports; Financial Statements. The Company has filed all
reports, schedules, forms, statements and other documents required to be filed
by the Company under the Exchange Act, including pursuant to Section 13(a) or
15(d) thereof, for the two years preceding the date hereof (or such shorter
period as the Company was required by law 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”). Except as described on Schedule 3.1(g), such SEC Reports were
filed on a timely basis or the Company received a valid extension of such time
of filing and has filed any such SEC Reports prior to the expiration of any such
extension. As of their respective dates, the SEC Reports as modified by the
restatements that have been filed by the Company with the SEC 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. The
Company has never been an issuer subject to Rule 144(i) under the Securities
Act. 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 SEC with respect thereto as in effect at the time of
filing. Such financial statements have been prepared in accordance with United
States generally accepted accounting principles applied on a consistent basis
during the periods involved (“GAAP”), except as may be otherwise specified in
such financial statements or the notes thereto and except that unaudited
financial statements may not contain all footnotes required by GAAP, and fairly
present in all material respects the financial position of the Company and its
consolidated Subsidiaries as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, immaterial, year-end audit adjustments.

 

(h)         Material Changes; Undisclosed Events, Liabilities or Developments.
Since the date of the latest audited financial statements included within the
SEC Reports: (i) there has been no event, occurrence or development that has had
or that could reasonably be expected to result in a Material Adverse Effect,
(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 SEC, (iii) the Company has not altered its
method of accounting, and (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 The Company does not have pending before the SEC any request for
confidential treatment of information. Except for the issuance of the Securities
contemplated by this SPA, no event, liability, fact, circumstance, occurrence or
development has occurred or exists or is reasonably expected to occur or exist
with respect to the Company or its Subsidiaries or their respective businesses,
properties, operations, assets 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 two (2) Business Days prior to the date that this representation is made.

 

(i)           Litigation. 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, any Subsidiary or any of
their respective properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state, county, local or
foreign) (collectively, an “Action”) which (i) adversely affects or challenges
the legality, validity or enforceability of any of the Transaction Documents or
the Securities or (ii) could, if there were an unfavorable decision, have or
reasonably be expected to result in a Material Adverse Effect. Neither the
Company nor any Subsidiary, nor 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. The SEC
has not issued any stop order or other order suspending the effectiveness of any
registration statement filed by the Company or any Subsidiary under the Exchange
Act or the Securities Act.

 

 

 

  

(j)           Labor Relations. No 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. To the knowledge of the Company, no
executive officer of the Company or any Subsidiary, 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.

 

(k)         Compliance. Neither the Company nor any Subsidiary: (i) is in
default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, 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 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 judgment, decree or order of any court, arbitrator or other
governmental authority or (iii) is or has been in violation of any statute,
rule, ordinance or regulation of any governmental authority, including without
limitation all foreign, federal, state and local laws relating to taxes,
environmental protection, occupational health and safety, product quality and
safety and employment and labor matters, except in each case as could not have
or reasonably be expected to result in a Material Adverse Effect.

 

(l)          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 described in the SEC Reports, 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.

 

(m)         Title to Assets. The Company and the Subsidiaries have good and
marketable title in fee simple to all real property owned by them and good and
marketable title in all personal property 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 (i) the Liens disclosed on Schedule 3.1(m) or in the SEC
Reports, (ii) 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 (iii) Liens for the payment of
federal, state or other taxes, for which appropriate reserves have been made
therefor in accordance with GAAP and, 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.

 

(n)         Insurance. The Company and the Subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which the Company and
the Subsidiaries are engaged. Neither the Company nor any 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 without a
significant increase in cost.

 

 

 

 

(o)         Transactions With Affiliates and Employees. Except as set forth in
the SEC Reports, none of the officers or directors of the Company or any
Subsidiary and, to the knowledge of the Company, none of the employees of the
Company or any Subsidiary 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 providing for the borrowing of money from or lending of
money to, 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, stockholder, member 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. Nothing in this Section 3.1(o) shall
limit the right of any officer or director of the Company, or any Subsidiary,
from purchasing Securities from the Company, or limiting the right of the
Company to sell Securities to such person, pursuant to this SPA.

 

(p)         Sarbanes-Oxley; Internal Accounting Controls. The Company and the
Subsidiaries are in compliance with any and all applicable requirements of the
Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and
all applicable rules and regulations promulgated by the SEC thereunder that are
effective as of the date hereof and as of the Closing Date. The Company and the
Subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that: (i) transactions are executed in accordance
with management’s general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management’s general or specific
authorization, and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences. The Company and the Subsidiaries have established
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure
controls and procedures to ensure that information required to be disclosed by
the Company in the reports it files or submits under the Exchange Act is
recorded, processed, summarized and reported, within the time periods specified
in the SEC’s rules and forms. The Company’s certifying officers have evaluated
the effectiveness of the disclosure controls and procedures of the Company and
the Subsidiaries as of the end of the period covered by the most recently filed
periodic report under the Exchange Act (such date, the “Evaluation Date”). The
Company presented in its most recently filed periodic report under the Exchange
Act the conclusions of the certifying officers about the effectiveness of the
disclosure controls and procedures based on their evaluations as of the
Evaluation Date. Since the Evaluation Date, there have been no changes in the
internal control over financial reporting (as such term is defined in the
Exchange Act) that have materially affected, or is reasonably likely to
materially affect, the internal control over financial reporting of the Company
and its Subsidiaries.

 

(q)         Brokerage or Finder’s Fees. The Company may engage one or more
registered broker-dealers to assist in the Offering. To the extent brokerage or
finder’s fees or commissions are or will be payable by the Company or any
Subsidiaries 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.

 

(r)         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.

 

(s)         No General Solicitation. Neither the Company, nor any of its
Affiliates, nor to its knowledge, any Person acting on its or their behalf, has
engaged in any form of general solicitation or general advertising (within the
meaning of Regulation D under the 1933 Act) in connection with the offer or sale
of the Securities.

 

(t)           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 an “investment company” subject to
registration under the Investment Company Act of 1940, as amended.

 

 

 

  

(u)         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 (i) the Securities Act which would require the registration of
any such securities under the Securities Act, or (ii) any applicable shareholder
approval provisions of any Trading Market on which any of the securities of the
Company are listed or designated.

 

(v)         Tax Status. 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 its Subsidiaries each (i) has made or filed all United
States federal, state and local income and all foreign income and franchise tax
returns, reports and declarations required by any jurisdiction to which it is
subject, (ii) has paid all taxes and other governmental assessments and charges
that are material in amount, shown or determined to be due on such returns,
reports and declarations and (iii) has no material tax obligations for periods
subsequent to the periods to which such returns, reports or declarations apply.
There are no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and the officers of the Company or of any
Subsidiary know of no basis for any such claim.

 

(w)         Foreign Corrupt Practices Act. Neither the Company nor any
Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or
other person acting on behalf of the Company or any Subsidiary, 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 any Subsidiary (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 FCPA.

 

(x)         Accountants. The Company’s accounting firm is set forth on Schedule
3.1(y) 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
fiscal year ending March 31, 2013.

 

(y)         No Disagreements with Accountants and Lawyers. 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 and, although the Company is not current
with respect to fees owed to its accountants and lawyers, such amount is not
expected to affect the Company’s ability to perform any of its obligations under
any of the Transaction Documents.

 

(z)         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 SPA and the other Transaction Documents has been based solely on the
independent evaluation of the transactions contemplated hereby by the Company
and its representatives.

 

 

 

 

(aa)        Acknowledgment Regarding Purchaser’s Trading Activity. Anything in
this SPA or elsewhere herein to the contrary notwithstanding (except for
Sections 3.2(f) and 4.15 hereof), it is understood and acknowledged by the
Company that: (i) none of the Purchasers has been asked by the Company to agree,
nor has any Purchaser agreed, to desist from purchasing or selling, long and/or
short, securities of the Company, or “derivative” securities based on securities
issued by the Company or to hold the Securities for any specified term, (ii)
past or future open market or other transactions by any Purchaser, specifically
including, without limitation, Short Sales or “derivative” transactions, before
or after the closing of this or future private placement transactions, may
negatively impact the market price of the Company’s publicly-traded securities,
(iii) any Purchaser, and counter-parties in “derivative” transactions to which
any such Purchaser is a party, directly or indirectly, may presently have a
“short” position in the Common Stock and (iv) each Purchaser shall not be deemed
to have any affiliation with or control over any arm’s length counter-party in
any “derivative” transaction; provided, that no Purchaser shall engage in a Net
Short Sale (as defined in Section 4.15) until such Purchaser no longer holds any
Notes or Warrants. The Company further understands and acknowledges that (y) one
or more Purchasers may engage in hedging activities at various times during the
period that the Securities are outstanding, including, without limitation,
during the periods that the value of the Warrant Shares deliverable with respect
to Securities are being determined, and (z) such hedging activities (if any)
could reduce the value of the existing stockholders' equity interests in the
Company at and after the time that the hedging activities are being conducted.
The Company acknowledges that such aforementioned hedging activities do not
constitute a breach of any of the Transaction Documents.

 

(bb)       Stock Option Plans. Each stock option granted by the Company under
the Company’s stock option plan was granted (i) in accordance with the terms of
the Company’s stock option plan and (ii) with an exercise price at least equal
to the fair market value of the Common Stock on the date such stock option would
be considered granted under GAAP and applicable law. No stock option granted
under the Company’s stock option plan has been backdated. The Company has not
knowingly granted, and there is no and has been no Company policy or practice to
knowingly grant, stock options prior to, or otherwise knowingly coordinate the
grant of stock options with, the release or other public announcement of
material information regarding the Company or its Subsidiaries or their
financial results or prospects.

 

(cc)        Money Laundering. The operations of the Company and its Subsidiaries
are and have been conducted at all times in compliance with applicable financial
record-keeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, applicable money laundering
statutes and applicable rules and regulations thereunder (collectively, the
“Money Laundering Laws”), and no action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator involving the
Company or any Subsidiary with respect to the Money Laundering Laws is pending
or, to the knowledge of the Company or any Subsidiary, threatened.

 

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 incorporated or formed, validly existing and in good standing
under the laws of the jurisdiction of its incorporated or formed with full
right, corporate, partnership, limited liability company or similar 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 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 Notes 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; (ii) not a “U.S. Person,” as defined in
Regulation S of the Securities Act; (iii) a “qualified institutional buyer” as
defined in Rule 144A(a) under the Securities Act; or (iv) if Purchaser is a
resident of Alberta, British Columbia or Ontario, Canada, an accredited investor
as that term is defined in NI-45-106 and/or a family member, a close business
associate or a close personal friend of a director, executive officer or control
person of the Company as contemplated by Section 2.5 of NI-45-106. Such
Purchaser is not required to be registered as a broker-dealer under Section 15
of the Exchange Act.

 

(d)         Experience of Purchaser. 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. Purchaser is not 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 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 SPA. Other than to other Persons party
to this SPA, 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).

 

(g)         Ability to Bear the Economic Risk. Purchaser (i) has adequate net
worth and means of providing for its current financial needs and possible
personal contingencies, (ii) has no need for liquidity in this investment, and
(iii) is able to bear the economic risks of an investment in the Securities for
an indefinite period of time.

 

(h)         Shell Company Status. Purchaser represents, acknowledges and
warrants its understanding that, pursuant to Rule 144, a “shell company” is
defined as a company that has no or nominal operations; and, either no or
nominal assets; assets consisting solely of cash and cash equivalents; or assets
consisting of any amount of cash and cash equivalents and nominal other assets.
Accordingly, Purchaser represents, acknowledges and warrants its understanding
that until its filing of its Current Report on Form 8-K dated August 16, 2011,
reflecting its status as a “non-shell company,” the Company was a “shell
company” pursuant to Rule 144 and resales of its securities pursuant to Rule 144
may not be made until at least all of the following criteria set forth in Rule
144(i)(2) have been met: (1) the Company has ceased to be a “shell company,” (2)
the Company is subject to Section 13 or 15(d) of the Exchange Act, (3) a period
of at least twelve months has elapsed from the date “Form 10 information” was
filed with the SEC reflecting the Company’s status as a non-shell company, and
(4) the Company has filed all of its required periodic reports as required by
Section 13 or 15(d), other than Form 8-K reports, for the prior one year period.
As a result, Purchaser may not be able to sell the Securities until and unless
such securities are registered with the SEC, an exemption for the sales other
than Rule 144 can be relied upon, and/or both the Company and Purchaser fully
comply with all applicable requirements of Rule 144. Accordingly, Purchaser
represents, acknowledges and warrants its understanding that it may never be
able to dispose of its Securities purchased pursuant to this SPA using an
exemption provided for by Rule 144, or any other exemption.

 

 

 

  

(i)          Acknowledgement that Proposed Acquisition May Not be Consummated.
Purchaser hereby acknowledges that it is aware that the Company has entered into
an Asset Purchase Agreement and Plan of Reorganization dated November 14, 2012
(the “Asset Purchase Agreement”), with Mesa Energy Holdings, Inc., a Delaware
corporation (“Mesa”) and Mesa Energy, Inc., a Nevada corporation and a
wholly-owned subsidiary of Mesa (“Mesa Energy”), and amended on February 19,
2013, pursuant to which Armada will purchase all of the issued and outstanding
shares of Mesa Energy common stock, representing substantially all of the assets
of Mesa, which shares are currently owned by Mesa. As consideration for such
acquisition, the Company will issue 0.40 shares of its common stock for each
issued and outstanding share of Mesa, which shares shall then be distributed by
Mesa to its shareholders as further set forth in the Asset Purchase Agreement.
Purchaser hereby acknowledges, warrants and represents that it is aware that the
transactions contemplated by the Asset Purchase Agreement may never be
consummated, and the failure by the Company to consummate such transactions may
adversely affect the Company’s financial position, and the Purchaser’s decision
to purchase the Securities has been made with an understanding of such.

 

(j)          Other Offerings. Purchaser acknowledges that the Company will, from
time to time, offer and sell additional shares of Common Stock, debt instruments
payable by the Company and/or securities convertible into common stock on such
terms and conditions as its Board of Directors, in its sole discretion, may
determine. The terms and conditions of the offer and sale of any such additional
shares of Common Stock may be different from and on terms better than the terms
of this Offering and may result in substantial dilution to the existing
shareholders.

 

(k)         Reliance. Purchaser understands and acknowledges that (i) the
Securities are being offered and sold to Purchaser without registration under
the Securities Act in a private placement that is intended to be exempt from the
registration provisions of the Securities Act and (ii) the availability of such
exemption, depends in part on, and the Company will rely upon, the accuracy and
truthfulness of, the foregoing representations and warranties and Purchaser
hereby consents to such reliance. Purchaser agrees that the representations,
warranties and covenants of Purchaser contained herein (or in any representation
letter or questionnaire executed and delivered by Purchaser pursuant to the
provisions hereof) shall be true and correct both as of the execution of this
SPA and as of the Closing Date, and shall survive the completion of the
distribution of the Securities. Purchaser hereby agrees to notify the Company
immediately of any change in any representation, warranty, covenant or other
information relating to Purchaser contained in this SPA, or any exhibit hereto,
which takes place prior to Closing.

 

(l)          Pre-Existing, Substantive Relationship. Purchaser understands and
acknowledges that, until the closing of the transaction contemplated by Section
3.2(i), the Securities offered hereunder will be offered and sold to only those
investors who have a “pre-existing, substantive relationship,” as such term is
then defined by the SEC in its interpretive letters or otherwise with the
Company and/or its officers or directors. After the closing of the transaction
contemplated by Section 3.2(i), the Company may offer and sell the Securities to
investors who do not otherwise have a “pre-existing, substantive relationship”
with the Company and/or its officers or directors. To the extent Purchaser is
purchasing the Securities prior to the completion closing of the transaction
contemplated by Section 3.2(i), Purchaser hereby represents and warrants that it
has a “pre-existing, substantive relationship” with the Company and/or its
officers or directors.

 

(m)        Non-US Persons. If Purchaser is not a “U.S. Person” as defined in
Regulation S, Purchaser further represents and warrants to the Company that:

 

(i)         it is acquiring the Securities in an offshore transaction pursuant
to Regulation S and Purchaser was outside the United States when receiving and
executing this SPA;

 

 

 

 

(ii)         Purchaser has not acquired the Securities as a result of, and will
not itself engage in, any “directed selling efforts” (as defined in Regulation
S) in the United States in respect of the Securities which would include any
activities undertaken for the purpose of, or that could reasonably be expected
to have the effect of, conditioning the market in the United States for the
resale of the Securities; provided, however, that Purchaser may sell or
otherwise dispose of the Securities pursuant to registration of the Securities
under the Securities Act and any applicable state and provincial securities laws
or under an exemption from such registration requirements and as otherwise
provided herein;

 

(iii)        during the six month distribution compliance period set forth in
Regulation S (the “Distribution Compliance Period”), Purchaser understands and
agrees that offers and sales of any of the Securities shall only be made
pursuant to an effective registration statement as to such Securities or in
compliance with the safe harbor provisions set forth in Regulation S (which the
purchaser of the Securities (other than a distributor) certifies that it is not
a U.S. person and is not acquiring the Securities for the account or benefit of
any U.S. person or is a U.S. person who purchased securities in a transaction
that did not require registration under the Securities Act); following the
Distribution Compliance Period offers and sales of the Securities may be
effected by Purchaser solely pursuant to an effective registration statement as
to such Securities or an exemption from the registration requirements of the
Securities Act, and in each case only in accordance with all other applicable
securities laws;

 

(iv)        Purchaser understands and agrees not to engage in any hedging
transactions involving the Securities; and

 

(v)         Purchaser hereby represents that it has satisfied itself as to the
full observance of the laws of its jurisdiction in connection with any
invitation to subscribe for the Securities or any use of this SPA, including:
(i) the legal requirements within its jurisdiction for the purchase of the
Securities; (ii) any foreign exchange restrictions applicable to such purchase;
(iii) any governmental or other consents that may need to be obtained; and (iv)
the income tax and other tax consequences, if any, that may be relevant to the
purchase, holding, redemption, sale or transfer of the Securities. Purchaser’s
subscription and payment for, and its continued beneficial ownership of the
Securities, will not violate any applicable securities or other laws of
Purchaser’s jurisdiction of residency as set forth on the signature page hereto.

 

(n)          Exploration and Development Stage Company. Purchaser has been
advised that the business of the Company is in an exploration and development
stage business with minimal revenue and acknowledges that there is no assurance
that the Company will raise sufficient funds to adequately capitalize the
business or that the business will be profitable in the future.

 

(o)         No Governmental Review. Purchaser acknowledges and understands that
no United States federal or state agency, including the SEC has passed on or
made recommendations or endorsement of the Securities or the suitability of the
investment contemplated hereby. There is no government or other insurance
covering any of the Securities.

 

(p)         No Conflicts. The entering into of this SPA and the consummation of
the transactions contemplated hereby do not result in the violation of any of
the terms and provisions of any law applicable to, or the constating documents
of, Purchaser or of any agreement, written or oral, to which Purchaser may be a
party or by which Purchaser is or may be bound.

 

(q)         No Consents. Purchaser is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court or
governmental agency in order for it to execute, deliver or perform any of its
obligations under this SPA provided that for purposes of the representation made
in this sentence, Purchaser is assuming and relying upon the accuracy of the
relevant representations and agreements of the Company herein.

 

(r)           No Registration of the Warrant Shares. The Purchaser acknowledges
and understands that except as set forth in Article V of this SPA, the Company
has no obligation or intention to register for resale the Warrant Shares.

 

 

 

 

(s)         Canadian Questionnaire. If Purchaser is a resident of Alberta,
British Columbia or Ontario Canada, by completing the Canadian Questionnaire,
attached as Appendix B hereto, Purchaser is representing and warranting that
Purchaser satisfies one of the categories of registration and prospectus
exemptions provided for in NI 45-106. All information which Purchaser has
provided to the Company in the Canadian Questionnaire is correct and complete as
of the date the Questionnaire is signed, and if there should be any change in
such information prior to the Subscription Amount being accepted by the Company,
Purchaser will immediately provide the Company with such information. All
information contained in the Canadian Questionnaire is complete and accurate and
may be relied upon by the Company.

 

(t)          US Questionnaire. If Purchaser is a US Person, by completing the US
Questionnaire, attached as Appendix A hereto, Purchaser is representing and
warranting that Purchaser satisfies one of the definitions of “accredited
investor” as set forth in Regulation D. All information which Purchaser has
provided to the Company in the US Questionnaire is correct and complete as of
the date the Questionnaire is signed, and if there should be any change in such
information prior to the Subscription Amount being accepted by the Company,
Purchaser will immediately provide the Company with such information. All
information contained in the US Questionnaire is complete and accurate and may
be relied upon by the Company.

 

(u)         Independent Counsel. Purchaser acknowledges that this SPA has been
prepared on behalf of the Company by Company Counsel and that Company Counsel
does not represent, and is not acting on behalf of, Purchaser. Purchaser has
been provided with an opportunity to consult with Purchaser’s own counsel with
respect to this SPA.

 

The Company acknowledges and agrees that the representations contained in
Section 3.2 shall not modify, amend or affect such Purchaser’s right to rely on
the Company’s representations and warranties contained in this SPA or any
express representations and warranties contained in any other Transaction
Document or any other document or instrument executed and/or delivered in
connection with this SPA or the consummation of the transaction contemplated
hereby.

 

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, to the Company
or to an Affiliate of a Purchaser or in connection with a pledge as contemplated
in Section 4.1(b), the Company may require the transferor thereof to provide to
the Company an opinion of counsel selected by the transferor and reasonably
acceptable to the Company, the form and substance of which opinion shall be
reasonably satisfactory to 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 SPA and shall make the representations set forth
in Section 3.2, and then shall have the rights and obligations of a Purchaser
under this SPA.

 

(b)         Purchasers agree to the imprinting, so long as is required by this
Section 4.1, of a legend on any of the Securities in the following form, or in
such other form as the Company, in its sole discretion, deems appropriate:

 

If Purchaser is a U.S. Person:

 

THIS SECURITY HAS NOT 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. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A
BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A
FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a)
UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

 

 

 

If Purchaser is a non-US person:

 

THE SECURITIES REPRESENTED HEREBY HAVE BEEN OFFERED IN AN OFFSHORE TRANSACTION
TO A PERSON WHO IS NOT A U.S. PERSON (AS DEFINED HEREIN) PURSUANT TO REGULATION
S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”). NONE OF THE SECURITIES REPRESENTED HEREBY HAVE BEEN REGISTERED UNDER THE
SECURITES ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, MAY
NOT BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES (AS DEFINED
HEREIN) OR TO U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF
REGULATION S UNDER THE 1933 ACT, 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 EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN
ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED
UNLESS IN COMPLIANCE WITH THE SECURITIES ACT. “UNITED STATES” AND “U.S. PERSON”
ARE AS DEFINED BY REGULATION S UNDER THE SECURITIES ACT.

 

And in addition to the foregoing:

 

UNLESS OTHERWISE PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS
SECURITY MUST NOT TRADE THE SECURITY IN OR FROM BRITISH COLUMBIA UNLESS THE
CONDITIONS IN SECTION 12(2) OF BC INSTRUMENT 51-509 ISSUERS QUOTED IN THE U.S.
OVER-THE-COUNTER MARKET ARE MET.

 

The Company acknowledges and agrees that a Purchaser may from time to time
pledge pursuant to a bona fide margin agreement with a registered broker-dealer
or grant a security interest in some or all of the Securities to a financial
institution that is an “accredited investor” as defined in Rule 501(a) under the
Securities Act and who agrees to be bound by the provisions of this SPA and, if
required under the terms of such arrangement, such Purchaser may transfer
pledged or secured Securities to the pledgees or secured parties. Such a pledge
or transfer would not be subject to approval of the Company and no legal opinion
of legal counsel of the pledgee, secured party or pledgor shall be required in
connection therewith. Further, no notice shall be required of such pledge. At
the appropriate Purchaser’s expense, the Company will execute and deliver such
reasonable documentation as a pledgee or secured party of Securities may
reasonably request in connection with a pledge or transfer of the Securities.

 

(c)         Certificates evidencing the Warrant Shares shall not contain any
legend (including the legend set forth in Section 4.1(b) hereof): (i) while a
registration statement covering the resale of such security is effective under
the Securities Act, (ii) following any sale of such Warrant Shares pursuant to
Rule 144, or (iii) if such legend is not required under applicable requirements
of the Securities Act (including judicial interpretations and pronouncements
issued by the staff of the SEC). The Company shall, at Purchaser’s expense,
cause its counsel to issue a legal opinion to the Transfer Agent promptly after
the Effective Date if required by the Transfer Agent to effect the removal of
the legend hereunder to the extent permissible under applicable laws, rules and
regulations.

 

(d)         Each Purchaser, severally and not jointly with the other Purchasers,
agrees with the Company that such Purchaser will sell any Securities pursuant to
either the registration requirements of the Securities Act, including any
applicable prospectus delivery requirements, or an exemption therefrom, and that
if Securities are sold pursuant to a registration statement, they will be sold
in compliance with the plan of distribution set forth therein, 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         Acknowledgment of Dilution. The Company acknowledges that the
issuance of the Securities may result in dilution of the outstanding shares of
Common Stock, which dilution may be substantial under certain market conditions.
The Company further acknowledges that its obligations under the Transaction
Documents, including, without limitation, its obligation to issue the Warrant
Shares pursuant to the Transaction Documents, are unconditional and absolute and
not subject to any right of set off, counterclaim, delay or reduction,
regardless of the effect of any such dilution or any claim the Company may have
against any Purchaser and regardless of the dilutive effect that such issuance
may have on the ownership of the other stockholders of the Company.

 

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 or that would be integrated with
the offer or sale of the Securities for purposes of the rules and regulations of
any Trading Market such that it would require shareholder approval prior to the
closing of such other transaction unless shareholder approval is obtained before
the closing of such subsequent transaction.

 

4.4         Exercise Procedures. Each of 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 and 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. To the extent required by the
Securities Act or Exchange Act, the Company shall file a Current Report on Form
8-K, including the Transaction Documents as exhibits thereto, with the SEC
within the time required by the Exchange Act. From and after the issuance of
such Current Report on Form 8-K, the Company represents to the Purchasers that
it shall have publicly disclosed all material, non-public information delivered
to any of the Purchasers by the Company or any of its Subsidiaries, or any of
their respective officers, directors, employees or agents in connection with the
transactions contemplated by the Transaction Documents. The Company shall not
publicly disclose the name of any Purchaser, or include the name of any
Purchaser in any filing with the SEC or any regulatory agency or Trading Market,
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 with the SEC, (b) to the extent requested by the SEC and (c) to the
extent such disclosure is required by law or Trading Market regulations, in
which case the Company shall provide the Purchasers with prior notice of such
disclosure permitted under this clauses (b) and (c).

 

4.6         Non-Public Information. Except with respect to the material terms
and conditions of the transactions contemplated by the Transaction Documents,
the Company covenants and agrees that neither it, nor any other Person acting on
its behalf, will provide any Purchaser or its agents or counsel with any
information that the Company believes constitutes material non-public
information, unless prior thereto such Purchaser shall have entered into a
written agreement with the Company regarding the confidentiality and use of such
information. The Company understands and confirms that each Purchaser shall be
relying on the foregoing covenant in effecting transactions in securities of the
Company.

 

4.7         Use of Proceeds. The Company shall use the net proceeds from the
sale of the Securities hereunder for capital expenditures, working capital and
general corporate purposes.

 

 

 

 

4.8         Indemnification of Purchasers. Subject to the provisions of this
Section 4.8, the Company will indemnify and hold each Purchaser and its
directors, officers, shareholders, members, partners, employees and agents (and
any other Persons with a functionally equivalent role of a Person holding such
titles notwithstanding a lack of such title or any other title), each Person who
controls such Purchaser (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title) of such controlling persons (each, a
“Purchaser Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any such Purchaser Party may suffer or incur as a
result of or relating to (a) any breach of any of the representations,
warranties, covenants or agreements made by the Company in this SPA or in the
other Transaction Documents or (b) any action instituted against the Purchaser
Parties in any capacity, or any of them or their respective Affiliates, by any
stockholder of the Company who is not an Affiliate of such Purchaser Party, with
respect to any of the transactions contemplated by the Transaction Documents
(unless such action is based upon a breach of such Purchaser Party’s
representations, warranties or covenants under the Transaction Documents or any
agreements or understandings such Purchaser Party may have with any such
stockholder or any violations by such Purchaser Party of state or federal
securities laws or any conduct by such Purchaser Party which constitutes fraud,
gross negligence, willful misconduct or malfeasance). If any action shall be
brought against any Purchaser Party in respect of which indemnity may be sought
pursuant to this SPA, such Purchaser Party shall promptly notify the Company in
writing, and the Company shall have the right to assume the defense thereof with
counsel of its own choosing reasonably acceptable to the Purchaser Party. Any
Purchaser Party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Purchaser Party except to the extent
that (i) the employment thereof has been specifically authorized by the Company
in writing, (ii) the Company has failed after a reasonable period of time to
assume such defense and to employ counsel or (iii) in such action there is, in
the reasonable opinion of counsel, a material conflict on any material issue
between the position of the Company and the position of such Purchaser Party, in
which case the Company shall be responsible for the reasonable fees and expenses
of no more than one such separate counsel. The Company will not be liable to any
Purchaser Party under this SPA (y) for any settlement by a Purchaser Party
effected without the Company’s prior written consent, which shall not be
unreasonably withheld or delayed; or (z) to the extent, but only to the extent
that a loss, claim, damage or liability is attributable to any Purchaser Party’s
breach of any of the representations, warranties, covenants or SPA s made by
such Purchaser Party in this SPA or in the other Transaction Documents. The
indemnification required by this Section 4.8 shall be made by periodic payments
of the amount thereof during the course of the investigation or defense, in a
commercially reasonable manner. The indemnity agreements contained herein shall
be in addition to any cause of action or similar right of any Purchaser Party
against the Company or others and any liabilities the Company may be subject to
pursuant to law.

 

4.9         Reservation and Listing 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 (the “Required Minimum”).

 

(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 certificate or 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 practicable and in any event
not later than the 180th day after such date.

 

(c)         The Company shall, if applicable: (i) in the time and manner
required by the principal Trading Market, prepare and file with such Trading
Market an additional shares listing application covering a number of shares of
Common Stock at least equal to the Required Minimum on the date of such
application, (ii) take all steps necessary to cause such shares of Common Stock
to be approved for listing or quotation on such Trading Market as soon as
commercially reasonable thereafter, (iii) provide to the Purchasers evidence of
such listing or quotation and (iv) maintain the listing or quotation of such
Common Stock on any date at least equal to the Required Minimum on such date on
such Trading Market or another Trading Market.

 

4.10       Equal Treatment of Purchasers. No consideration (including any
modification of any Transaction Document) shall be offered or paid to any Person
to amend or consent to a waiver or modification of any provision of this SPA
unless the same consideration is also offered to all of the parties to this SPA.
Further, the Company shall not make any payment of principal or interest on the
Notes in amounts which are disproportionate to the respective principal amounts
outstanding on the Notes at any applicable time. For clarification purposes,
this provision constitutes a separate right granted to each Purchaser by the
Company and negotiated separately by each Purchaser, and is intended for the
Company to treat the Purchasers as a class and shall not in any way be construed
as the Purchasers acting in concert or as a group with respect to the purchase,
disposition or voting of Securities or otherwise.

 

 

 

 

4.11       Short Sales and Confidentiality After the Date Hereof. 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 SPA and ending at such time that the transactions contemplated
by this SPA are first publicly announced pursuant to Section 4.6. Each
Purchaser, severally and not jointly with the other Purchasers, covenants that
until such time as the transactions contemplated by this SPA are publicly
disclosed by the Company pursuant to the initial press release as described in
Section 4.6, 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, no
Purchaser makes any representation, warranty or covenant hereby that it will not
engage in Short Sales in the securities of the Company after the time that the
transactions contemplated by this SPA are first publicly announced as described
in Section 4.6; provided, however, each Purchaser agrees, severally and not
jointly with any other Purchasers, that such Purchaser will not enter into any
Net Short Sales (as hereinafter defined) from the period commencing on the
Closing Date and ending on the date that such Purchaser no longer holds any
Notes or Warrant Shares. For purposes of this Section 4.11, a “Net Short Sale”
by any Purchaser shall mean a sale of Common Stock by such Purchaser that is
marked as a short sale and that is made at a time where there is no equivalent
offsetting long position in Common Stock held by such Purchaser. For purposes of
determining whether there is an equivalent offsetting long position in Common
Stock held by the Purchaser, Warrant Shares that have not yet been exercised
pursuant to the Warrants shall be deemed to be held long by the Purchaser, and
the amount of shares of Common Stock held in a long position shall be all
unexercised Warrant Shares (ignoring any exercise limitations included therein)
issuable to such Purchaser on such date, plus any shares of Common Stock or
Common Stock Equivalents otherwise then held by such Purchaser. 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 SPA.

 

4.12       Form D; Blue Sky Filings. The Company agrees to timely file a Form D
with respect to the Securities as required under Regulation D and to provide a
copy thereof, promptly upon request of any Purchaser. The Company shall take
such action as the Company shall reasonably determine is necessary in order to
obtain an exemption for, or to qualify the Securities for, sale to the
Purchasers at the Closing under applicable securities or “Blue Sky” laws of the
states of the United States, and shall provide evidence of such actions promptly
upon request of any Purchaser.

 

Article V

Registration Rights

 

5.1         Definitions. For purposes of this Section 5, the following terms
shall have the following meanings:

 

“Effectiveness Period” shall mean the period beginning on the Initial
Effectiveness Date and ending on the earlier of (i) the sale pursuant to a
Registration Statement of all Registrable Securities thereunder, and (ii) the
date when all Registrable Securities are eligible to be sold pursuant to Rule
144 without limitation thereunder on volume or manner of sale.

 

“Initial Effectiveness Date” means the Closing Date.

 

“Registrable Securities” means the Warrant Shares, until such securities have
been converted or exchanged and, at all times subsequent to such conversion or
exchange, any securities into or for which such securities have been converted
or exchanged, and any security issued with respect thereto upon any stock
dividend, split, merger or similar event until, in the case of any such
security, the earliest of: (i) its effective registration under the Securities
Act and resale in accordance with the Registration Statement covering it; (ii)
its sale pursuant to Rule 144 of the Securities Act; (iii) the expiration of the
Effectiveness Period; and (iv) the date upon which such Warrant Shares shall
cease to be outstanding.

 

 

 

 

“Registration Statement” means any registration statement of the Company that
covers any of the Registrable Securities, including the prospectus, amendments
and supplements to such Registration Statement, including post-effective
amendments, all exhibits and materials incorporated by reference in such
Registration Statement.

 

“Underwriter” has the definition set forth in Section 2(a)(11) of the Securities
Act.

 

5.2         Piggyback Registrations.

 

(a)         Right to Piggyback. Whenever during the Effectiveness Period the
Company proposes to publicly sell or register for sale any of its common equity
securities (or any security which is convertible into or exchangeable or
exercisable for common equity securities) pursuant to a registration statement
(a “Piggyback Registration Statement”) under the Securities Act (other than a
registration statement on Form S-8 or Form S-4, or any similar successor forms
thereto), whether for its own account or for the account of one or more security
holders of the Company (a “Piggyback Registration”), the Company shall give
prompt written notice to Purchaser of its intention to effect such sale or
registration and, subject to Section 5(b), shall use its commercially reasonable
efforts to include in such transaction all Registrable Securities (in the form
of common equity securities) with respect to which the Company has received a
written request from Purchaser for inclusion therein within 10 days after
Purchaser’s receipt of the Company’s notice. The Company may postpone or
withdraw the filing or the effectiveness of a Piggyback Registration at any time
in its sole discretion (or, if applicable, at the sole discretion of the
security holder requesting such Piggyback Registration).

 

(b)         Cutbacks.

 

(i)          Cutbacks Pursuant to Rule 415 or Underwriters Advice. In the event
a cutback is requested by the SEC pursuant to Rule 415 of the Securities Act in
a written comment to the Company, or as otherwise requested by the SEC in a
written comment to the Company, or upon the advice of an Underwriter, if any,
the number of Registrable Securities to be included in the Piggyback
Registration Statement shall be subject to a reduction as required to register
the greatest number of Registrable Securities, and all cutbacks shall be, to the
greatest extent possible, made pro-rata.

 

(ii)         Cutbacks for Additional Financings. In the event the Company
undertakes one or more additional financings and, upon the advice of an
Underwriter, or if the Company so determines a cutback is reasonably required,
and:

 

(x) the Piggyback Registration Statement has not yet been declared effective,
the Company shall file a pre-effective amendment reducing the number of
Registrable Securities to be included in the Piggyback Registration Statement in
the manner set forth in Section 5(b)(i).

 

(y) the Piggyback Registration Statement has been declared effective, the
Company shall file a post-effective amendment to the Piggyback Registration
Statement reducing the number of Registrable Securities to be included in the
Piggyback Registration Statement in the manner set forth in Section 5(b)(i).

 

If any of the Registrable Securities are not registered in, or are deregistered
from, the Piggyback Registration Statement because of a cutback pursuant to this
Section 5.2(b), the Company shall cause a registration statement to be filed
with the SEC to include the remaining Registrable Securities immediately
following the date on which the Piggyback Registration Statement is declared
effective.

 

5.3          Registration Expenses.

 

Unless otherwise mutually agreed between the Parties in writing:

 

(a)         All expenses incident to the Company’s performance of or compliance
with this SPA, including, without limitation, all registration and filing fees
(including SEC registration fees), fees and expenses of compliance with
securities or blue sky laws, listing applications fees, and fees, expenses and
disbursements of counsel and accountants for the Company in connection
therewith, shall be borne by the Company; and

 

 

 

  

(b)         All expenses incident to the Purchaser’s performance of or
compliance with this SPA, including, without limitations, printing expenses,
transfer agent’s and registrar’s fees, stock transfer taxes, costs of
distributing prospectuses in preliminary and final form as well as any
supplements thereto, and fees, expenses and disbursements of counsel and
accountants for Purchaser and fees, expenses, commissions and disbursements for
other persons retained by Purchaser in connection therewith, shall be borne by
Purchaser.

 

5.4         Indemnification.

 

(a)         In the event of the offer and sale of any of the Registrable
Securities under the Securities Act, the Company shall, and hereby does,
indemnify and hold harmless, to the fullest extent permitted by law, each
Purchaser, its directors, officers, partners, each other person who participates
as an Underwriter in the offering or sale of such securities, and each other
person, if any, who controls or is under common control with such Purchaser or
any such Underwriter within the meaning of Section 15 of the Securities Act,
against any losses, claims, damages or liabilities, joint or several, and
expenses to which Purchaser or any such director, officer, partner or
Underwriter or controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon any untrue statement of any material fact
contained in any registration statement prepared and filed by the Company under
which Registrable Securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or any omission to state
therein a material fact required to be stated or necessary to make the
statements therein in light of the circumstances in which they were made not
misleading, and the Company shall reimburse Purchaser, and each such director,
officer, partner, Underwriter and controlling person for any legal or any other
expenses reasonably incurred by them in connection with investigating, defending
or settling any such loss, claim, damage, liability, action or proceeding;
provided, that such indemnity agreement found in this Section 5.4 shall in no
event exceed the net proceeds from the Offering, received by the Company; and
provided further, that the Company shall not be liable in any such case (i) to
the extent that any such loss, claim, damage, liability (or action or proceeding
in respect thereof) or expense arises out of or is based upon an untrue
statement in or omission from such registration statement, any such preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company for use in the preparation thereof or (ii) if the person asserting any
such loss, claim, damage, liability (or action or proceeding in respect thereof)
who purchased the Registrable Securities that are the subject thereof did not
receive a copy of an amended preliminary prospectus or the final prospectus (or
the final prospectus as amended or supplemented) at or prior to the written
confirmation of the sale of such Registrable Securities to such person because
of the failure of such Purchaser or Underwriter to so provide such amended
preliminary or final prospectus and the untrue statement or omission of a
material fact made in such preliminary prospectus was corrected in the amended
preliminary or final prospectus (or the final prospectus as amended or
supplemented). Such indemnity shall remain in full force and effect regardless
of any investigation made by or on behalf of Purchaser, or any such director,
officer, partner, Underwriter or controlling person and shall survive the
transfer of such shares by Purchaser.

 

(b)         As a condition to including the Registrable Securities in any
Registration Statement filed pursuant to this SPA, each Purchaser agrees to be
bound by the terms of this Section 5.4 and to indemnify and hold harmless, to
the fullest extent permitted by law, the Company, each of its directors,
officers, partners, legal counsel and accountants and each Underwriter, if any,
and each other Person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which the Company or any such director or
officer or controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) that arises
out of or is based upon an untrue statement in or omission from such
registration statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance upon and in conformity
with written information furnished by Purchaser for use in the preparation
thereof, and such Purchaser shall reimburse the Company, and such Purchaser,
directors, officers, partners, legal counsel and accountants, Persons,
Underwriters, or control persons, each such director, officer, and controlling
person for any legal or other expenses reasonably incurred by them in connection
with investigating, defending, or settling any such loss, claim, damage,
liability, action, or proceeding; provided, however, that such indemnity
agreement found in this Section 5.4(b) shall in no event exceed the net proceeds
received by such Purchaser as a result of the sale of Registrable Securities
pursuant to such Registration Statement, except in the case of fraud or willful
misconduct. Such indemnity shall remain in full force and effect, regardless of
any investigation made by or on behalf of the Company or any such director,
officer or controlling person and shall survive the transfer by any Purchaser of
such shares.

 

 

 

  

(c)         Promptly after receipt by an indemnified party of notice of the
commencement of any action or proceeding involving a claim referred to in this
Section 5.4 (including any governmental action), such indemnified party shall,
if a claim in respect thereof is to be made against an indemnifying party, give
written notice to the indemnifying party of the commencement of such action;
provided, that the failure of any indemnified party to give notice as provided
herein shall not relieve the indemnifying party of its obligations under this
Section 5.4, except to the extent that the indemnifying party is actually
prejudiced by such failure to give notice. In case any such action is brought
against an indemnified party, unless in the reasonable judgment of counsel to
such indemnified party a conflict of interest between such indemnified and
indemnifying parties may exist or the indemnified party may have defenses not
available to the indemnifying party in respect of such claim, the indemnifying
party shall be entitled to participate in and to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party and, after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof, unless in such indemnified
party’s reasonable judgment a conflict of interest between such indemnified and
indemnifying parties arises in respect of such claim after the assumption of the
defenses thereof or the indemnifying party fails to defend such claim in a
diligent manner, other than reasonable costs of investigation. Neither an
indemnified nor an indemnifying party shall be liable for any settlement of any
action or proceeding effected without its consent. No indemnifying party shall,
without the consent of the indemnified party, consent to entry of any judgment
or enter into any settlement, which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party of a
release from all liability in respect of such claim or litigation.
Notwithstanding anything to the contrary set forth herein, and without limiting
any of the rights set forth above, in any event any party shall have the right
to retain, at its own expense, counsel with respect to the defense of a claim.
Each indemnified party shall furnish such information regarding itself or the
claim in question as an indemnifying party may reasonably request in writing and
as shall be reasonably required in connection with defense of such claim and
litigation resulting therefrom.

 

(d)         If an indemnifying party does not, or is not permitted to, assume
the defense of an action pursuant to Section 5.4, or in the case of the expense
reimbursement obligation set forth in Sections 5.4(a) and (b), the
indemnification required by Sections 5.4(a) and (b) shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as and when bills received or expenses, losses, damages, or liabilities
are incurred.

 

(e)         If the indemnification provided for in Sections 5.4(a) and (b) is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage or expense referred to
herein, the indemnifying party, in lieu of indemnifying such indemnified party
hereunder, shall (i) contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage or expense
as is appropriate to reflect the proportionate relative fault of the
indemnifying party on the one hand and the indemnified party on the other
(determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission relates to information supplied
by the indemnifying party or the indemnified party and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission), or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law or provides a lesser sum to the
indemnified party than the amount hereinafter calculated, not only the
proportionate relative fault of the indemnifying party and the indemnified
party, but also the relative benefits received by the indemnifying party on the
one hand and the indemnified party on the other, as well as any other relevant
equitable considerations. No indemnified party guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any indemnifying party who was not guilty
of such fraudulent misrepresentation.

 

(f)         Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement entered
into in connection with an underwritten public offering are in conflict with the
foregoing provisions, the provisions in the underwriting agreement shall
control.

 

 

 

 

5.5          Cooperation. Each Purchaser agrees as a condition to the inclusion
of such Purchaser’s Warrant Shares in a Registration Statement, to provide the
Company promptly with such information as the Company, on advice of its counsel,
may reasonably request in order to fulfill its disclosure and reporting
obligations under applicable laws, rules and regulations. Each Purchaser
acknowledges that the information provided may be disclosed in the Registration
Statement.

 

Article VI

Miscellaneous

 

6.1         Termination. This SPA 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 Initial Closing has not been consummated on or before
April 30, 2013; provided, however, that such termination will not affect the
right of any party to sue for any breach by any other party (or parties).

 

6.2         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 SPA. The Company shall pay all Transfer Agent
fees (including, without limitation, any fees required for same-day processing
of any instruction letter delivered by the Company and any conversion or
exercise notice delivered by a Purchaser), stamp taxes and other taxes and
duties levied in connection with the delivery of any Securities to the
Purchasers.

 

6.3         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 thereof 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.

 

6.4         Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of: (a) the date of transmission, if
such notice or communication is delivered via facsimile or email at the
facsimile number or email address set forth on the signature pages attached
hereto at or 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, facsimile number and
email address for such notices and communications shall be as set forth on the
signature pages attached hereto.

 

6.5         Amendments; Waivers. No provision of this SPA 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 67% in
interest of the Notes then outstanding 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 SPA
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.

 

6.6        Gender/Headings. Whenever the context requires, the gender of any
word used in this SPA includes the masculine, feminine or neuter, and the number
of any word includes the singular or plural. Unless the context otherwise
requires, all references to articles and sections refer to articles and sections
of this SPA. The headings herein are for convenience only, do not constitute a
part of this SPA and shall not be deemed to limit or affect any of the
provisions hereof.

 

 

 

 

6.7         Successors and Assigns. This SPA shall be binding upon and inure to
the benefit of the parties and their successors and permitted assigns. The
Company may not assign this SPA 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 SPA 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.”

 

6.8         No Third-Party Beneficiaries. This SPA 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 4.8 and this Section 6.8.

 

6.9         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 SPA and any
other Transaction Documents (whether brought against a party hereto or its
respective affiliates, directors, officers, shareholders, partners, members,
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 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 SPA 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, suit or proceeding to enforce any provisions of the
Transaction Documents, then, in addition to the obligations of the Company under
Section 4.8, the prevailing party in such action, suit 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.

 

6.10       Survival. The representations and warranties contained herein shall
survive the Closing and the delivery of the Securities.

 

6.11       Execution/Counterparts. This SPA 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 each other party, it being understood that the
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.

 

6.12       Severability. If any term, provision, covenant or restriction of this
SPA 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.

 

6.13       Rescission and Withdrawal Right. Notwithstanding anything to the
contrary contained in (and without limiting any similar provisions of) any of
the other Transaction Documents, whenever any Purchaser exercises a right,
election, demand or option under a Transaction Document and the Company does not
timely perform its related obligations within the periods therein provided, then
such Purchaser may rescind or withdraw, in its sole discretion from time to time
upon written notice to the Company, any relevant notice, demand or election in
whole or in part without prejudice to its future actions and rights; provided,
however, that in the case of a rescission of an exercise of a Warrant, the
applicable Purchaser shall be required to return any shares of Common Stock
subject to any such rescinded exercise notice concurrently with the return to
such Purchaser of the aggregate exercise price paid to the Company for such
shares and the restoration of such Purchaser’s right to acquire such shares
pursuant to such Purchaser’s Warrant (including, issuance of a replacement
warrant certificate evidencing such restored right).

 

 

 

  

6.14       Replacement of Securities. If any certificate or instrument
evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon
cancellation thereof (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.

 

6.15       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.

 

6.16       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.

 

6.17       Usury. To the extent it may lawfully do so, the Company hereby agrees
not to insist upon or plead or in any manner whatsoever claim, and will resist
any and all efforts to be compelled to take the benefit or advantage of, usury
laws wherever enacted, now or at any time hereafter in force, in connection with
any claim, action or proceeding that may be brought by any Purchaser in order to
enforce any right or remedy under any Transaction Document. Notwithstanding any
provision to the contrary contained in any Transaction Document, it is expressly
agreed and provided that the total liability of the Company under the
Transaction Documents for payments in the nature of interest shall not exceed
the maximum lawful rate authorized under applicable law (the “Maximum Rate”),
and, without limiting the foregoing, in no event shall any rate of interest or
default interest, or both of them, when aggregated with any other sums in the
nature of interest that the Company may be obligated to pay under the
Transaction Documents exceed such Maximum Rate. It is agreed that if the maximum
contract rate of interest allowed by law and applicable to the Transaction
Documents is increased or decreased by statute or any official governmental
action subsequent to the date hereof, the new maximum contract rate of interest
allowed by law will be the Maximum Rate applicable to the Transaction Documents
from the effective date thereof forward, unless such application is precluded by
applicable law. If under any circumstances whatsoever, interest in excess of the
Maximum Rate is paid by the Company to any Purchaser with respect to
indebtedness evidenced by the Transaction Documents, such excess shall be
applied by such Purchaser to the unpaid principal balance of any such
indebtedness or be refunded to the Company, the manner of handling such excess
to be at such Purchaser’s election.

 

6.18       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 hereto or 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 SPA 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, or has had the opportunity
to be, represented by its own separate legal counsel in its review and
negotiation of the Transaction Documents. 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.

 

 

 

  

6.19       Liquidated Damages. The Company’s obligations to pay any partial
liquidated damages or other amounts owing under the Transaction Documents is a
continuing obligation of the Company and shall not terminate until all unpaid
partial liquidated damages and other amounts have been paid notwithstanding the
fact that the instrument or security pursuant to which such partial liquidated
damages or other amounts are due and payable shall have been canceled.

 

6.20       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.

 

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

 

6.22       Construction. The parties agree that the normal rule of construction
to the effect that any ambiguities in the SPA are to be resolved against the
drafting party shall not be employed in the interpretation of this SPA and
Transaction Documents or any amendments thereto. 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 SPA.

 

6.23       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.

  

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