Unassociated Document


     

     

    EXHIBIT
      10.11

    


    PLACEMENT
      AGENCY AGREEMENT

    


    


    Thomas
      Securities LLC

    d.b.a.
      Thomas Group Capital

    3414
      Peachtree Road, N.E., Suite 656 Atlanta,
      GA 30326

    Attn:
      Thomas Borbone

    


    Gentlemen:

    


    This
      Placement Agent Agreement (the "Agreement") is made this 4th
      day
      of
      April 2008 by and between East
      Coast Ethanol, LLC, a Delaware limited liability company having an address
      of
      1907 Thurmond Mall, Columbia,
      SC 29202 (the "Company") and Thomas Securities LLC, a Delaware limited liability
      company (d.b.a. Thomas Group Capital)(the "Placement Agent").

    


    1.
      AGREEMENT TO ACT AS PLACEMENT AGENT; PLACEMENT OF SECURITIES.
On
      the
      basis of the representations, warranties and agreements of the Company herein
      contained, and subject to all the
      terms
      and conditions of this Agreement:

    


    (a)    Subject
      to subsection 1(a)(i) below, the Company hereby authorizes the Placement Agent
      to act
      (x)
      as its exclusive selling agent and registered broker-dealer for all sales of
      the
      Company's securities within the States
      identified on Exhibit A attached hereto (the "Exclusive Territory") and (y)
      as
      its non-exclusive selling agent for
      all
      sales of the Company's securities outside of the Exclusive Territory. The
      Company is offering and soliciting, offers
      for the purchase of equity interests (the "Units") in the Company as part of
      a
      registered public offering (the "Offering") by the Company as described in
      the
      prospectus initially filed by the Company with the Securities and Exchange
      Commission (the "SEC" or "Commission") as part of Form SB-2 on January 29,
      2008,
      a copy of which is attached
      hereto as Exhibit B (together with any subsequently filed updates or amendments
      thereto, the "Prospectus").

    


    
      	
            	(i)	
              Upon
                the six (6) month anniversary of the date of effectiveness of the
                Company's registration
                statement related to the Offering, the Company shall have the option
                to
                terminate the exclusivity of the relationship between the Company
                and the
                Placement Agent
                in the Exclusive Territory such that the Company shall be able to
                engage
                one or more
                party(ies) other than the Placement Agent to act as its selling or
                placement agent for purposes
                of selling the Company's securities in the Exclusive Territory; provided,
                however,
                that in the event the Company exercises such option, the Placement
                Agent
                shall only
                he obligated to continue its relationship as the Company's registered
                broker-dealer and
                placement agent in the Exclusive Territory if (x) each additional
                selling
                or placement agent
                engaged by the Company is a registered broker-dealer. and (y) the
                Placement Agent retains the right to participate in a syndicate in
                the
                sale and distribution of the Company's securities
                in the Exclusive Territory through any and all sales facilitated
                by such
                additional
                selling or placement agent(s). In the event the Company exercises
                its
                option to terminate the exclusivity of its relationship with the
                Placement
                Agent in the Exclusive Territory and any new or additional selling
                agent
                or placement agent engaged by the Company acts in a finder's capacity
                and
                is not a registered broker-dealer, the Placement Agent shall have
                the
                option to terminate its relationship with the Company and its duties
                and
                responsibilities hereunder, including, without limitation, its
                responsibilities as the Company's
                registered broker-dealer, shall be terminated. The Company's exercise
                of
                the option
                described herein shall be exercised by giving written notice to the
                Placement Agent
                pursuant to Section 12 of this
                Agreement.

            


    

     

    
      	
            	(ii)	
              Until
                the earlier of the termination of this Agreement, the six (6) month
                anniversary of the
                effectiveness of the Company's registration statement related to
                the
                Offering or the Closing
                Date (as defined in Section
                3 hereof),
                the Company shall not, within the Exclusive
                Territory, without the prior consent of the Placement Agent, solicit
                or
                accept offers
                to

            


    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    purchase
      Units otherwise than through the Placement Agent.

    


    (b)    Placement
      of the Units by the Placement Agent will be made on a "best efforts" basis.
      The
Placement
      Agent represents and warrants to the Company that it is registered as a Broker
      Dealer with the Financial Industry
      Regulatory Authority ("FINRA"). The minimum subscription for Units shall he
      one
      Unit. The Units will be
      offered for a period of time (the "Offering Period") commencing on the effective
      date of the final Form SB-2 or on
      Form
      S-1/A filed by the Company, and ending no later than twelve (12) months from
      the
      effective date unless extended
      in accordance with the Prospectus. The Offering will be for a minimum amount
      of
      $253,650,000 and a maximum amount of $591,825,000. Subscriptions for the Units
      will be accepted by the Company at a price of $15,000.00 per Unit (the "Offering
      Price"). The Placement Agent agrees, as agent of the Company, to use its best
      efforts
      to solicit offers to purchase the Units from the Company on the terms and
      subject to the conditions set forth in
      the
      Prospectus (as defined below) and in accordance with the Company's requests.
      The
      Placement Agent shall make
      commercially reasonable efforts to assist the Company in obtaining performance
      by each Purchaser whose offer
      to
      purchase Units has been solicited by the Placement Agent and accepted by the
      Company, but the Placement Agent
      shall not, except as otherwise provided in this Agreement, be obligated to
      disclose the identity of any potential
      purchaser or have any liability to the Company in the event any such purchase
      is
      not consummated for any reason.
      Under no circumstances will the Placement Agent be obligated to purchase any
      Units for its own account and,
      in
      soliciting purchases of Units, the Placement Agent shall act solely as the
      Company's agent and not as principal. Notwithstanding the foregoing and except
      as otherwise provided in Section 1(c), it is understood and agreed
      that the Placement Agent (or its affiliates) may, solely at its discretion
      and
      without any obligation to do so, purchase
      Units from the Company as principal and any such purchases by the Placement
      Agent (or its affiliates) shall
      be
      disclosed to the Company (including the identity of such
      purchaser).

    


    (c)    Subject
      to the provisions of this Section
      1, offers
      for the purchase of Units may be solicited by the
      Placement Agent as agent for the Company at such times and in such amounts
      as
      the Placement Agent deems advisable.
      The Placement Agent shall communicate to the Company, orally or in writing,
      each
      reasonable offer to purchase Units received by it as agent of the Company.
      The
      Company shall have the sole right in its absolute discretion
      to accept offers to purchase the Units and in its absolute discretion may reject
      any such offer, in whole or in
      part.
      The Placement Agent shall have the right, in its discretion reasonably
      exercised, subject to giving prior notice
      to
      the Company, to reject any offer to purchase Units received by it, in whole
      or
      in part, and any such rejection
      shall not be deemed a breach of its agreement contained herein.

    


    (d)    The
      purchases of the Units by the Purchasers shall be evidenced by the execution
      of
      the subscription
      agreements in form and substance as approved by the Company and Placement Agent
      ("Subscription Agreements")
      by each of the parties thereto.

    


    (e)    As
      compensation for services rendered, on the Closing Date the Company shall pay
      to
      the Placement
      Agent, (a) in cash on the Closing Date by wire transfer of immediately available
      funds to an account or accounts
      designated by the Placement Agent, an amount equal to four and one-half percent
      (4.5%) of the gross proceeds
      received by the Company from the sale of (i) all Units sold within the Exclusive
      Territory prior to the Company's termination of its exclusive relationship
      with
      the Placement Agent in accordance with Section 1(a)(i) above
      (the time period commencing on the date hereof and ending upon such termination
      is referred to herein as the "Exclusive
      Period"), (ii) all Units sold subsequent to the Exclusive Period to Purchasers
      identified and solicited by the
      Placement Agent within the Exclusive Territory, and (iii) all Units sold to
      Purchasers identified and solicited by the Placement Agent outside the Exclusive
      Territory, and (b) warrants ("Warrants") to purchase, at purchase price
equal
      to
      the Offering Price, a number of Units equal to three and one-half percent of
      all
      Units upon which the fee equal
      to
      four and one-half percent (4.5%) is calculated pursuant to the immediately
      preceding sentence of this subsection (e). The Warrants earned by the Placement
      Agent hereunder shall be issued to the Placement Agent on the
      Closing Date and shall be exercisable, at the Offering Price, for a period
      of
      ten (10) years from and after the Closing
      Date. Notwithstanding Section l(f) below, for purposes of this provision, a
      Unit
      shall be deemed "sold" at the
      earlier of the receipt by the Company (or its agent) of an executed Indication
      of Interest (in such form as may be promulgated
      by the Company) that subsequently results in an executed Subscription Agreement
      or an executed Subscription
      Agreement, regardless of whether or not the Company has accepted such
      Subscription Agreement (but, for
      clarification, the fee with respect to any such "sold" Unit will not be due
      and
      payable until the disbursement to the
      Company of the funds paid for such Unit on the Closing Date).


    
      
        
        

      

      
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    Further,
      in no event shall the cash portion of the fee payable pursuant to subsection
      1(e)(a) above be less than $50,000.

    


    (f)    No
      Units
      which the Company has agreed to sell pursuant to this Agreement shall be deemed
      to have
      been
      purchased and paid for, until such Units shall have been delivered to the
      Purchaser thereof against payment
      by such Purchaser. If the Company shall default in its obligations to deliver
      Units to a Purchaser with whom
      it
      has entered into a binding Subscription Agreement, the Company shall indemnify
      and hold the Placement Agent
      harmless against any loss, claim or damage arising from or as a result of such
      default by the Company.

    


    2.    REPRESENTATIONS
      AND WARRANTIES OF THE COMPANY. The
      Company represents
      and warrants to, and agrees with, the Placement Agent that:

    


    (a)    As
      of the
      date of the initial filing of the registration statement with the Commission,
      the Company met the requirements
      for use of Form SB-2 under the Securities Act of 1933, as amended (the
      "Securities Act"), and filed with
      the
      Commission a registration statement on such form (the "Initial Registration
      Statement") identified as Registration File No. 333-148905. Subsequently, the
      Commission adopted a new system of disclosure rules for smaller companies,
      which
      became effective as of February 4, 2008, for the registration of securities
      under the Securities
      Act whereby amendments to all registration statements originally filed on Form
      SB-2 must be made on the
      standard Form S-1 or S-3, as applicable, but may follow the Form SB-2 disclosure
      format up to August 4, 2008. Accordingly,
      the Company will file all future amendments to the Initial Registration
      Statement on Form S-1/A. The
      Initial Registration Statement meets the requirements set forth in Rule
      415(a)(1)(x) under the Securities Act and complies
      in all material respects with said Rule. The Initial Registration Statement,
      the
      exhibits thereto, and any amendments
      filed with respect thereto from time to time, are hereinafter collectively
      called the "Registration Statement."
      Any reference herein to the Registration Statement or the Prospectus shall
      be
      deemed to refer to and include
      the documents incorporated by reference therein (the "Incorporated Documents")
      which may be filed under the
      Securities Exchange Act of 1934, as amended (the "Exchange Act"), on or after
      the date of this Agreement, or the
      issue
      date of the Prospectus, as the case may be; and any reference herein to the
      terms "amend," "amendment" or "supplement"
      with respect to the Registration Statement or the Prospectus shall be deemed
      to
      refer to and include the
      filing of any document under the Exchange Act after the date of this Agreement,
      or the issue date of the Prospectus,
      as the case may be, deemed to be incorporated therein by reference. All
      references in this Agreement to financial
      statements and schedules and other information which is "contained," "included,"
      "described," "set forth" or
      "stated" in the Registration Statement or the Prospectus (and all other
      references of like import) shall be deemed to mean and include all such
      financial statements and schedules and other information which is or is deemed
      to be incorporated
      by reference in the Registration Statement or the Prospectus, as the case may
      be. No stop order suspending
      the effectiveness of the Registration Statement or the use of the Prospectus
      has
      been issued, and no proceeding for any such purpose is pending or has been
      initiated or, to the Company's knowledge, is threatened by the
      Commission. All references in this Agreement to the Registration Statement
      and
      the Prospectus, or any amendments
      or supplements to any of the foregoing shall be deemed to include any copy
      thereof filed with the Commission pursuant to its Electronic Data Gathering,
      Analysis and Retrieval System ("EDGAR").

    


    (b)    The
      Registration Statement (and any further documents to be filed with the
      Commission) contains or
      will
      contain, at the time of its effectiveness, all exhibits and schedules as
      required by the Securities Act. Each of the Registration Statement and any
      post-effective amendment thereto, at the time it became or becomes effective,
      complied
      or will comply in all material respects with the Securities Act and the Exchange
      Act and the applicable Rules and Regulations and did not and, as amended or
      supplemented, if applicable, will not, contain any untrue statement
      of a material fact or omit to state a material fact required to be stated
      therein or necessary to make the statements
      therein not misleading. The Prospectus, each as of its effective date, complied
      in all material respects with
      the
      Securities Act and the Exchange Act and the applicable Rules and Regulations.
      The Prospectus, as amended or
      supplemented, did not and will not contain as of the date thereof any untrue
      statement of a material fact or omit to state
      a
      material fact necessary in order to make the statements therein, in light of
      the
      circumstances under which they were made, not misleading. The Incorporated
      Documents, when they were filed with the Commission, conformed in all
      material respects to the requirements of the Exchange Act and the applicable
      Rules and Regulations, and none of such
      documents, when they were filed with the Commission, contained any untrue
      statement of a material fact or omitted
      to state a material fact necessary to make the statements therein, in light
      of
      the circumstances under which they
      were
      made, not misleading; and any further documents so filed and


    
      
        
        

      

      
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    incorporated
      by reference in the Prospectus, when
      such
      documents are filed with the Commission, will conform in all material respects
      to the requirements of the Exchange
      Act and the applicable Rules and Regulations, as applicable, and will not
      contain any untrue statement of a
      material fact or omit to state a material fact necessary to make the statements
      therein, in light of the circumstances under
      which they were made, not misleading; provided, however, that the Company makes
      no representation or warranty
      with respect to any statement contained in the Registration Statement or
      Prospectus in reliance upon and in conformity
      with information concerning the Placement Agent and furnished by or on behalf
      of
      the Placement Agent for
      use
      in the Registration Statement or Prospectus. No post-effective amendment to
      the
      Registration Statement reflecting any facts or events arising after the date
      thereof which represent, individually or in the aggregate, a fundamental change
      in the information set forth therein is required to be filed with the
      Commission. There are no documents presently required to be filed with the
      Commission in connection with the transaction contemplated hereby that (x)
      have
      not been filed as required pursuant to the Securities Act or (y) will not be
      filed within the requisite
      time period. There are no contracts or other documents required to be described
      in the Prospectus, or to be filed as exhibits or schedules to the Registration
      Statement, which have not been described or filed as required.

    


    (c)    The
      Company has delivered. or will as promptly as practicable deliver, to the
      Placement Agent complete
      conformed copies of the Registration Statement and of each consent and
      certificate of experts filed as a part
      thereof, and conformed copies of the Registration Statement (without exhibits)
      and the Prospectus, as amended or
      supplemented, in such quantities and at such places as the Placement Agent
      reasonably requests. Neither the Company
      nor any of its directors and officers has distributed and none of them will
      distribute, prior to the completion
      of the distribution of the Units, any offering material in connection with
      the
      offering and sale of the Units
      other than the Prospectus, the Registration Statement, copies of the documents
      incorporated by reference therein and any other materials permitted by the
      Securities Act.

    


    (d)    The
      Company is a limited liability company duly organized, validly existing and
      in
      good standing under
      the
      laws of the State of Delaware. The Company is duly qualified to transact
      business as a foreign limited liability
      company and is in good standing under the laws of each jurisdiction where the
      location of its properties or the
      conduct of its business makes such qualification necessary, except where the
      failure to be so qualified would not have,
      singularly or in the aggregate, a material adverse effect on the condition
      (financial or otherwise), results of operations, business, properties or
      prospects of the Company taken as a whole (a "Material Adverse Effect"). The
      Company has no subsidiaries.

    


    (e)    The
      Units
      to be issued and sold by the Company hereunder have been duly and validly
authorized
      and, when issued and delivered against payment therefor as provided herein,
      will
      be duly and validly issued,
      fully paid and nonassessable and free of any preemptive or similar rights.
      The
      Units conform to the description
      thereof contained in the Prospectus.

    


    (f)    The
      Company has an authorized capitalization as set forth in the Prospectus, all
      of
      the issued and
      outstanding membership interests of the Company have been duly and validly
      authorized and issued, are fully paid
      and
      non-assessable, have been issued in compliance with federal and state securities
      laws, and conform to the description
      thereof contained in the Prospectus. None of the outstanding Units was issued
      in
      violation of any preemptive
      rights, rights of first refusal or other similar rights to subscribe for or
      purchase securities of the Company,
      except for such rights as may have been fully satisfied or waived. There are
      no
      authorized options or authorized
      or outstanding warrants, preemptive rights, rights of first refusal or other
      rights to purchase, or equity or debt
      securities convertible into or exchangeable or exercisable for, any membership
      interest of the Company that have been granted by the Company other than those
      accurately described in the Prospectus.

    


    (g)    The
      Company has the full right, power and authority to enter into this Agreement
      and
      each of the
      Subscription Agreements and to perform and to discharge its obligations
      hereunder and thereunder; and each of this
      Agreement and each of the Subscription Agreements has been duly authorized,
      executed and delivered by the Company,
      and constitutes a valid and binding obligation of the Company enforceable in
      accordance with its terms, except as enforceability may be limited by applicable
      bankruptcy, insolvency, reorganization, moratorium or similar laws
      affecting creditors' rights generally and except as enforceability may be
      subject to general principles of equity (regardless
      of whether such enforceability is considered in a proceeding in equity or at
      law).

    


    (h)    The
      execution, delivery and performance of this Agreement and the Subscription
      Agreements by


    
      
        
        

      

      
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    the
      Company and the consummation of the transactions contemplated hereby and thereby
      will not conflict with or result
      in
      a breach or violation of any of the terms or provisions of, or constitute a
      default under, any indenture, mortgage,
      deed of trust, loan agreement or other agreement or instrument to which the
      Company is a party or by which
      the
      Company is bound or to which any of the property or assets of the Company is
      subject, nor will such actions
      result in any violation of the provisions of (A) the certificate of organization
      or operating agreement of the Company
      or (B) any statute, law, rule or regulation or any judgment, order or decree
      of
      any court or governmental agency
      or
      body having jurisdiction over the Company or any of their properties or assets,
      except, with respect to clause (B), any violation which, singularly or in the
      aggregate, would not have a Material Adverse Effect.

    


    (i)    There
      is
      no contract, lease, instrument or other document of a character required by
      the
Securities
      Act or the Rules and Regulations to be described in the Prospectus, or to be
      filed as an exhibit to the Registration
      Statement, which is not described or filed as required; and all statements
      summarizing any such contracts,
      leases, instruments or other documents or legal matters contained in the
      Registration Statement are accurate
      and complete in all material respects. Other than as described in the
      Prospectus, no such contract, lease, instrument or other document has been
      suspended or terminated for convenience or default by the Company or any
of
      the
      other parties thereto, the Company has not sent or received any communication
      regarding intent not to renew any
      such
      contract, lease, instrument or other document, and the Company has not received
      notice or any other knowledge of any such pending or threatened suspension,
      termination or non-renewal, except for such pending or threatened
      suspensions, terminations or non-renewals that would not reasonably be expected
      to, singularly or in the aggregate,
      have a Material Adverse Effect.

    


    (j)    All
      existing minute books of the Company, including all existing records of all
      meetings and actions of the board of directors (including, Audit, Compensation,
      Nomination/Corporate Governance and other board
      committees, if any) and members of the Company through the date of the latest
      meeting and action (collectively,
      the "Corporate Records") have been made available to the Placement Agent and
      counsel for the Placement
      Agent. All such Corporate Records are complete and accurately reflect, in all
      material respects, all transactions
      referred to in such Corporate Records. There are no material transactions,
      agreements or other actions of
      the
      Company that are not properly approved and/or recorded in the Corporate
      Records.

    


    (k)    No
      consent, approval, authorization, filing with or order of or registration with,
      any court or governmental
      agency or body is required in connection with the transactions contemplated
      herein or in the Subscription
      Agreements, except such as have been obtained or will be obtained or made under
      the Securities Act or the Exchange Act, such as may be required under the
      securities, or blue sky, laws of any jurisdiction in connection with
      the
      offer and sale of the Units by the Company in the manner contemplated herein
      and
      in the Prospectus.

    


    (1)    Except
      as
      described in the Prospectus, (i) no person has the right, contractual or
      otherwise, to cause
      the
      Company to issue or sell to it any Units or other equity interests of the
      Company, and (ii) no person has any
      preemptive rights, resale rights, rights of first refusal or other rights to
      purchase any Units or other securities of the
      Company. Except as provided herein, no person has the right to act as an
      underwriter, placement agent or financial
      advisor to the Company for sales of the Company's Units within the Exclusive
      Territory. Except as described
      in the Prospectus, no person has the right, contractual or otherwise, to cause
      the Company to register under
      the
      Securities Act any Units or other securities of the Company, or to include
      any
      such Units or securities in the Registration Statement or the offering
      contemplated thereby, whether as a result of the filing or effectiveness of
      the
      Registration Statement or the sale of the Units as contemplated thereby or
      otherwise, except for persons and entities
      who have expressly waived such right or who have been given timely and proper
      notice and have failed to exercise
      such right within the time or times required under the terms and conditions
      of
      such right, and the Company is not required to file any registration statement
      for the registration of any securities of any person or register any such
      securities pursuant to any other registration statement filed by the Company
      under the Securities Act for a period of at least 90 days after the date
      hereof.

    


    (m)    The
      financial statements, together with the related notes and schedules, of the
      Company included
      in the Prospectus or the Registration Statement, or incorporated by reference
      therein, as the case may be, present
      fairly the financial condition, results of operations and cash flows of the
      Company as of the dates and for the periods indicated, comply in all material
      respects with the Securities Act and the Rules and Regulations thereunder,
      and
      have
      been prepared in conformity with generally accepted accounting principles
      applied on a consistent basis throughout
      the periods involved. No other financial statements or supporting schedules
      or
      exhibits are required by


    
      
        
        

      

      
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    the
      Securities Act or the Rules and Regulations thereunder to be included in the
      Prospectus or the Registration Statement, or incorporated by reference therein,
      as the case may be.

    


    (n)    Except
      as
      set forth in the Prospectus, there is no legal or governmental proceeding
      pending to which
      the
      Company is a party or of which any property or assets of the Company is the
      subject which is required to he described in the Prospectus and is not described
      therein, or which, singularly or in the aggregate, if determined adversely
      to the Company, would be likely to have a Material Adverse Effect or prevent
      or
      adversely affect the ability
      of the Company to perform its obligations under this Agreement; and to the
      best
      of the Company's knowledge,
      except as set forth in the Prospectus, no such proceedings are threatened or
      contemplated by governmental
      authorities or threatened by others.

    


    (o)    The
      Company has good and marketable title to all property (real and personal)
      described in the Registration
      Statement and the Prospectus being owned by the Company, free and clear of
      any
      claim, lien, encumbrance, security interest, defect or restriction upon voting
      or transfer or any other claim of any kind ("Liens"), except
      as
      described in the Prospectus or for those Liens that do not materially interfere
      with the use made or proposed
      to be made of such property by the Company or that would not have a Material
      Adverse Effect; all the property described in the Registration Statement and
      the
      Prospectus as being held under lease by the Company is held
      thereby under valid, subsisting and enforceable leases except where the failure
      to be valid, subsisting or enforceable
      would not have a Material Adverse Effect.

    


    (p)    The
      Company is not (i) in violation of any provision of its certificate of
      organization or operating
      agreement, (ii) in default in any respect, and no event has occurred which,
      with
      notice or lapse of time or both,
      would constitute such a default, in the due performance or observance of any
      term, covenant, or condition of any
      indenture, contract, lease, mortgage, deed of trust, note agreement, loan
      agreement or other agreement, obligation,
      condition, covenant or instrument to which it is a party or by which it is
      bound
      or to which any of its property
      or assets is subject, or (iii) in violation in any respect of any statute,
      law,
      rule, regulation, ordinance, judgment,
      order or decree of any court, regulatory body, administrative agency,
      governmental body, arbitrator or other
      authority having jurisdiction over the Company or any of its properties, as
      applicable, except, with respect to clauses
      (ii) and (iii), any violations or defaults which, singularly or in the
      aggregate, would not have a Material Adverse Effect.

    


    (q)    Except
      as
      set forth in the Registration Statement and Prospectus, the contracts described
      in the Prospectus
      or incorporated by reference therein that are material to the Company are in
      full force and effect on the date
      hereof, and neither the Company nor, to the Company's knowledge, any other
      party
      to such contracts is in breach
      of
      or default under any of such contracts which would have a Material Adverse
      Effect.

    


    (t)    The
      Company maintains insurance in such amounts and covering such risks as the
      Company reasonably
      considers adequate for the conduct of its business and the value of its
      properties, all of which insurance is in
      full
      force and effect, except where the failure to maintain such insurance could
      not
      reasonably be expected to have a Material Adverse Effect.

    


    (u)    Except
      as
      set forth in the Registration Statement and Prospectus, the Company has made
      all
filings,
      applications and submissions required by, and possesses all approvals, licenses,
      certificates, certifications, clearances, consents, exemptions, marks,
      notifications, orders, permits and other authorizations issued by, the
appropriate
      federal, state or foreign regulatory authorities necessary to conduct its
      businesses (collectively, "Permits"),
      except for such Permits which the failure to obtain or comply with could not
      reasonably be expected to have
      a
      Material Adverse Effect, and is in compliance with the terms and conditions
      of
      all such Permits; all of such Permits
      held by the Company are valid and in full force and effect except as could
      not
      have a Material Adverse Effect; there is no pending or threatened action, suit,
      claim or proceeding which may cause any such Permit to be limited, revoked,
      cancelled, suspended, modified or not renewed and the Company has not received
      any notice of proceedings relating to the limitation, revocation, cancellation,
      suspension, modification or non-renewal of any such Permit which, singularly
      or
      in the aggregate, if the subject of an unfavorable decision, ruling or finding,
      would have a
      Material Adverse Effect, whether or not arising from transactions in the
      ordinary course of business, except as set forth
      in
      or contemplated by the Prospectus.


    
      
        
        

      

      
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    (v)    Hein
      & Associates LLP, who has certified certain financial statements of the
      Company and delivered
      its report with respect to the audited consolidated financial statements and
      schedules included in the Prospectus
      or the Registration Statement, or incorporated by reference therein, as the
      case
      may be, is an independent public
      accountant with respect to the Company within the meaning of the Securities
      Act
      and the Rules and Regulations.

    


    (w)    The
      Company has filed all foreign, federal, state and local tax returns that are
      required to be filed
      or
      has requested extensions thereof (except in any case in which the failure so
      to
      file would not have a Material Adverse
      Effect, except as set forth in the Prospectus) and has paid all taxes required
      to be paid by it and any other assessment,
      fine or penalty levied against it, to the extent that any of the foregoing
      is
      due and payable, except for any
      such
      assessment, fine or penalty that is currently being contested in good faith
      or
      as would not have a Material Adverse
      Effect, except as set forth in the Prospectus.

    


    (x)    The
      Company maintains "disclosure controls and procedures" (as defined in Rule
      13a-15 and 15d-15
      under the Exchange Act), and such controls and procedures are designed (i)
      to
      ensure that information required
      to be disclosed by the Company in the reports that it may be required to file
      or
      submit under the Exchange Act
      is
      recorded, processed, summarized and reported, within the time periods specified
      in the Commission's rules and
      forms
      and (ii) to ensure that information required to be disclosed by the Company
      in
      the reports that it may be required
      to file or submit under the Exchange Act is accumulated and communicated to
      the
      Company's management.
      including its principal executive officer and principal financial officer,
      as
      appropriate to allow timely decisions
      regarding required disclosure. There has been no fraud, whether or not material,
      that involves management or
      other
      employees who have a significant role in the Company's internal controls. The
      Company is in compliance in all respects with all applicable effective
      provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations
      promulgated in connection therewith (and intends to comply with all applicable
      provisions that are not yet effective upon effectiveness).

    


    (y)    The
      Company maintains 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
      generally accepted accounting principles and to maintain accountability of
      assets; (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.

    


    (z)    Except
      as
      set forth in the Registration Statement and Prospectus, the Company (i) is
      in
compliance
      in all material respects with any and all applicable foreign, federal, state
      and
      local laws and regulations relating to the protection of human health and
      safety, the environment or hazardous or toxic substances or wastes, pollutants
      or contaminants ("Environmental Laws"), (ii) has received and is in compliance
      with all permits, licenses or other approvals required of it under applicable
      Environmental Laws to conduct its business and (iii) has not received notice
      of
      any actual or potential liability for the investigation or remediation of any
      disposal or release of hazardous or toxic substances or wastes, pollutants
      or
      contaminants, except where such non-compliance with Environmental Laws, failure
      to receive required permits, licenses or other approvals, or liability would
      not, individually
      or in the aggregate, have a Material Adverse Effect, whether or not arising
      from
      transactions in the ordinary
      course of business. To the best of its knowledge, the Company has not been
      named
      as a "potentially responsible
      party" under the Comprehensive Environmental Response, Compensation, and
      Liability Act of 1980, as amended.

    


    (aa)    In
      the
      ordinary course of its business, the Company periodically reviews the effect
      of
Environmental
      Laws on the business, operations and properties of the Company, in the course
      of
      which it identifies and
      evaluates associated costs and liabilities (including, without limitation,
      any
      capital or operating expenditures required for clean-up, closure of properties
      or compliance with Environmental Laws, or any permit, license or approval,
      any related constraints on operating activities and any potential liabilities
      to
      third parties). On the basis of such
      review, the Company has reasonably concluded that such associated costs and
      liabilities would not, singularly or in the aggregate, have a Material Adverse
      Effect, whether or not arising from transactions in the ordinary course of
      business, except as set forth in or contemplated by the
      Prospectus.


    
      
        
        

      

      
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          7
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    (bb)    The
      Company owns or possesses all inventions, patent applications, patents,
      trademarks (both registered
      and unregistered), trade names, copyrights, trade secrets and other proprietary
      information described in the
      Registration Statement and Prospectus, if any, as being owned or licensed by
      it
      or which is necessary for the conduct of, or material to, its businesses
      (collectively, the "Intellectual Property") and the Company is unaware of
any
      claim
      to the contrary or challenge by any other person to the rights of the Company
      with respect to the Intellectual
      Property. To the Company's knowledge, the Company has neither infringed nor
      is
      infringing the intellectual
      property of a third party nor has the Company received notice of a claim by
      a
      third party to the contrary.

    


    (cc)    The
      Company has not failed to file with the applicable regulatory authorities any
      material filing,
      declaration, listing, registration, report or submission; all such filings,
      declarations, listings, registrations, reports or submissions were in compliance
      with applicable laws when filed, except where the failure to be in compliance
      did not, singularly or in the aggregate, have a Material Adverse Effect, and,
      except as described in the Prospectus,
      the Company has not been notified that any material deficiencies have been
      asserted by any applicable regulatory
      authority with respect to any such filings, declarations, listings,
      registrations, reports or submissions.

    


    (dd)    No
      relationship, direct or indirect, exists between or among the Company on the
      one
      hand and the
      directors, officers, stockholders, customers or suppliers of the Company on
      the
      other hand which is required to be described in the Prospectus and which is
      not
      so described.

    


    (ee)    Neither
      the Company nor, to the Company's knowledge, any other person associated with
      or
acting
      on
      behalf of the Company including, without limitation, any director, officer,
      agent or employee of the Company,
      has, directly or indirectly, while acting on behalf of the Company (i) used
      any
      corporate funds for unlawful
      contributions, gifts, entertainment or other unlawful expenses, or received
      or
      retained any funds, relating to political
      activity; (ii) made any unlawful payment from corporate funds to, or received
      or
      retained any unlawful funds
      from, foreign or domestic government officials or employees or to or from
      foreign or domestic political parties
      or campaigns; (iii) violated any provision of the Foreign Corrupt Practices
      Act
      of 1977, as amended; or (iv) made
      any
      other unlawful payment or received or retained any other unlawful funds, which
      payment, receipt or retention
      of funds is of a character required to be disclosed in the Registration
      Statement or the Prospectus.

    


    (ff)    The
      Company is nor or, after giving effect to the offering and sale of the Units
      and
      the application
      of the proceeds thereof as described in the Prospectus, will not become an
      "investment company" as defined
      in the Investment Company Act of 1940, as amended.

    


    (gg)    Other
      than as set forth in the Registration Statement and Prospectus, the Company
      is
      not a party
      to
      any contract, agreement or understanding with any person that would give rise
      to
      a valid claim against the Company
      or the Placement Agent for a brokerage commission, finder's fee or like payment
      in connection with the offering
      and sale of the Units.

    


    (hh)    The
      Company has not sustained, since the date of the latest audited financial
      statements included
      in the Prospectus, or incorporated by reference therein, as the case may be,
      any
      material loss or interference with
      its
      business from fire, explosion, flood, terrorist act or other calamity, whether
      or not covered by insurance, or from
      any
      labor dispute or court or governmental action, order or decree, otherwise than
      as set forth in or contemplated
      by the Prospectus.

    


    (ii)    Except
      as
      set forth in or as otherwise contemplated by the Registration Statement or
      the
Prospectus,
      subsequent to the respective dates as of which information is given in the
      Registration Statement and the Prospectus,
      there has not been (i) any material adverse change, or any development that
      would reasonably be expected
      to result in a material adverse change, in the business, properties, management,
      financial condition or results
      of operations of the Company taken as a whole, (ii) any transaction which is
      material to the Company taken as a whole, (iii) any obligation, direct or
      contingent (including any off-balance sheet obligations), incurred by the
Company
      outside the ordinary course of business, which is material to the Company taken
      as a whole, (iv) any change
      in
      the membership interests (other than the issuance of shares of Units upon
      exercise of options and warrants disclosed
      as outstanding in the Registration Statement and the Prospectus or outstanding
      indebtedness of the Company
      or (v) any dividend or distribution of any kind declared, paid or made on the
      membership interests of the Company.


    
      
        
        

      

      
        -
          8
          -

        
          

        

      

      
        
        

      

    


    (jj)    Any
      statistical and market-related data included in the Registration Statement
      or
      the Prospectus are
      based
      on or derived from sources that the Company believes to be reliable and
      accurate.

    


    (ll)    The
      Company has not taken, nor to the Company's knowledge, have any of its
      respective directors,
      officers or affiliates (within the meaning of Rule 144 promulgated under the
      Securities Act) taken, directly
      or indirectly, any action which constitutes or is designed to cause or result
      in, or which could reasonably be expected to constitute, cause or result in,
      the
      stabilization or manipulation of the price of any security to facilitate the
      sale
      or
      resale of the Units in violation of Regulation M under the Exchange
      Act.

    


    (mm)    Neither
      the Company, nor to the Company's knowledge, has any director or executive
      officer,
      been the subject of any of the disqualification provisions contained in the
      Securities Act or the Exchange Act. Without limiting the generality of the
      foregoing, neither the Company, nor to the Company's knowledge, any director
      or
      executive officer,: (i) has been the subject of any pending proceeding or
      examination under Section 8 of the Securities Act, or has been the subject
      of
      any refusal order or stop order thereunder within 10 years prior to the
date
      of
      this Agreement; (ii) is subject to any pending proceeding under Rule 258 or
      any
      similar section adopted under
      Section 3(b) of the Securities Act, or to an order entered thereunder within
      10
      years prior to the date of this Agreement;
      (iii) has been convicted within 10 years of this Agreement of any felony or
      misdemeanor in connection with
      the
      purchase or sale of any security or involving the making of any false filing
      with the SEC, or arising out of the conduct of the business of an underwriter,
      broker, dealer, municipal securities dealer, or investment adviser; (iv)
is
      subject to any order, judgment, or decree of any court of competent jurisdiction
      temporarily or preliminarily restraining
      or enjoining, or is subject to any order, judgment or decree of any court of
      competent jurisdiction, entered
      within 10 years prior to the filing of such offering statement, permanently
      restraining or enjoining, such person from engaging in or continuing any conduct
      or practice in connection with the purchase or sale of any security
      or involving the making of any false filing with the SEC, or arising out of
      the
      conduct of the business of an underwriter,
      broker, dealer, municipal securities dealer, or investment adviser; (v) is
      subject to a United States Postal Service
      false representation order entered under 39 U.S.C. §3005 within 10 years prior
      to the date of this Agreement,
      or is subject to a temporary restraining order or preliminary injunction entered
      under 39 U.S.C. §3007 with respect to conduct alleged to have violated 39 U.S.C.
§3005; (vi) is subject to an order of the Commission entered
      pursuant to section 15(b), 15B(a), or 15B(c) of the Exchange Act, or section
      203(e) or (f) of the Investment Advisers
      Act of 1940; or (vii) is suspended or expelled from membership in, or suspended
      or barred from association
      with a member of, a national securities exchange registered under section 6
      of
      the Exchange Act or a national
      securities association registered under section 15A of the Exchange Act for
      any
      act or omission to act constituting
      conduct inconsistent with just and equitable principles of trade.

    


    Any
      certificate signed by any officer of the Company and delivered to the Placement
      Agent or counsel for the
      Placement Agent in connection with the offering of the Units shall be deemed
      a
      representation and warranty by the
      Company as to the matters covered thereby, to the Placement Agent.

    


    3.    THE
      CLOSING. The
      time
      and date of closing and delivery of the documents required to be delivered
      to the Placement Agent pursuant to Section
      6 hereof
      shall be at 10:00 A.M., local time, on the date the Company
      releases equity offering proceeds from escrow due to satisfaction of the
      conditions necessary for releasing funds
      from escrow as described in the Registration Statement and Prospectus (the
      "Closing Date") at the office of the
      Company's escrow agent.

    


    4.    FURTHER
      AGREEMENTS OF THE COMPANY. The
      Company agrees with the Placement

    Agent
      and
      the Purchasers:

    


    (a)
      (i)
      to make no further amendment or supplement prior to the Closing Date to the
      Registration Statement or
      any
      amendment or supplement to the Prospectus, without the consent of the Placement
      Agent, which consent shall
      not
      be unreasonably withheld; (ii) for so long as the delivery of a prospectus
      is
      required in connection with the offering
      or sale of the Units, to advise the Placement Agent promptly after it receives
      notice thereof, of the time when
      any
      amendment to the Registration Statement has been filed or becomes effective
      or
      any supplement or amendment
      to the Prospectus has been filed and to furnish the Placement Agent with copies
      thereof; (iii) subsequent to
      the
      date of the Prospectus and for so long as the delivery of a prospectus is
      required in connection with the offering
      or sale of the Units, to use its reasonable best efforts, to file promptly
      all
      reports


    
      
        
        

      

      
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          9
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    and
      any
      definitive proxy or information
      statements required to be filed by the Company with the Commission pursuant
      to
      Section 13(a), 15 or 15(d)
      of
      the Exchange Act subsequent to the date of the Prospectus; (iv) to advise the
      Placement Agent, promptly after
      it
      receives notices thereof, (x) of any request by the Commission to amend the
      Registration Statement or to amend
      or
      supplement the Prospectus or for additional information and (y) of the issuance
      by the Commission, of any stop
      order suspending the effectiveness of the Registration Statement or any
      post-effective amendment thereto or any
      order
      directed at any Incorporated Document or any amendment or supplement thereto
      or
      any order preventing or suspending the use of the Prospectus or any amendment
      or
      supplement thereto, of the suspension of the qualification of the Units for
      offering or sale in any jurisdiction, of the institution or threatening of
      any
      proceeding for any such purpose, or of any request by the Commission for the
      amending or supplementing of the Registration Statement or Prospectus or for
      additional information; and, (v) in the event of the issuance of any stop order
      or of any order preventing or suspending the use of the Prospectus or suspending
      any such qualification, promptly to use its reasonable best efforts to obtain
      the withdrawal of such order.

    


    (b)    To
      comply
      with the Securities Act and the Exchange Act, and the Rules and Regulations
      thereunder,
      so as to permit the completion of the distribution of the Units as contemplated
      in this Agreement and the Prospectus.
      If during the period in which a prospectus is required by law to be delivered
      by
      a Placement Agent or a dealer
      in
      connection with the distribution of Units contemplated by the Prospectus, any
      event shall occur as a result of which, in the judgment of the Company or in
      the
      reasonable opinion of the Placement Agent or counsel for the Placement Agent,
      it
      becomes necessary to amend or supplement the Prospectus in order to make the
      statements therein,
      in the light of the circumstances existing at the time the Prospectus is
      delivered to a purchaser, not misleading,
      or, if it is necessary at any time to amend or supplement the Prospectus to
      comply with any law, the Company promptly will prepare and file with the
      Commission, and furnish at its own expense to the Placement Agent and to
      dealers, an appropriate amendment to the Registration Statement or supplement
      to
      the Prospectus so that
      the
      Prospectus as so amended or supplemented will not, in the light of the
      circumstances when it is so delivered, be
      misleading, or so that the Prospectus will comply with such law. Before amending
      the Registration Statement or supplementing
      the Prospectus in connection with the Offering, the Company will furnish the
      Placement Agent with a copy of such proposed amendment or supplement and will
      not file such amendment or supplement to which the Placement Agent reasonably
      objects.

    


    (c)    To
      furnish promptly to the Placement Agent and to counsel for the Placement Agent
      a
      copy of the
      Registration Statement as originally filed with the Commission, and each
      amendment thereto filed with the Commission, including all consents and exhibits
      filed therewith.

    


    (d)    To
      deliver promptly to the Placement Agent such number of the following documents
      as the Placement
      Agent shall reasonably request: (i) conformed copies of the Registration
      Statement as originally filed with
      the
      Commission and each amendment thereto (in each case excluding exhibits), (ii)
      the Prospectus and any amendment or supplement thereto (not later than 3:00
      P.M., New York City time, on the Business Day following the date of such
      amendment or supplement); and (iv) any document incorporated by reference in
      the
      Prospectus. The Company will pay the expenses of printing or other production
      of
      all documents relating to the Offering.

    


    (e)    To
      the
      extent not available on EDGAR, to make generally available to its members as
      soon as practicable,
      but in any event not later than eighteen months after the effective date of
      the
      Initial Registration Statement
      (as defined in Rule 158(c) under the Securities Act), an earnings statement
      of
      the Company (which need not
      be
      audited) complying with Section 11(a) of the Securities Act and the Rules and
      Regulations (including, at the option
      of
      the Company, Rule 158).

    


    (f)    To
      promptly take from time to time such actions as the Placement Agent may
      reasonably request to qualify the Units for offering and sale under the
      securities, or blue sky, laws of such jurisdictions (including
      without limitation any post-filing requirements) as the Placement Agent may
      designate and to continue such
      qualifications in effect for so long as required for the distribution of the
      Units. The Company shall not be obligated
      to qualify as a foreign corporation in any jurisdiction in which it is not
      so
      qualified or to file a general consent
      to service of process in any jurisdiction.

    


    (g)    Prior
      to
      the Closing Date, to furnish to the Placement Agent, as soon as they have been
      prepared,
      copies of any unaudited interim consolidated financial statements of the Company
      for any periods


    
      
        
        

      

      
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          10
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    subsequent
      to the periods covered by the financial statements appearing or incorporated
      by
      reference in the Prospectus
      or the Registration Statement.

    


    (h)    Prior
      to
      the Closing Date, not to issue any press release or other communication directly
      or indirectly
      or hold any press conference with respect to the Company, its condition,
      financial or otherwise, or earnings,
      business affairs or business prospects (except for routine oral marketing
      communications in the ordinary course
      of
      business and consistent with the past practices of the Company and of which
      the
      Placement Agent is notified),
      without the prior written consent of the Placement Agent, unless in the judgment
      of the Company and its counsel,
      and after notification to the Placement Agent, such press release or
      communication is required by law. In such
      event, the Company shall consult with the Placement Agent as to the contents
      of
      such press release.

    


    (i)    To
      apply
      the net proceeds from the sale of the Units in substantially the same manner
      as
      set forth
      in
      the Prospectus under the heading "Use of Proceeds", unless any deviation from
      such application is in accordance
      with the Registration Statement and occurs only after approval by the Board
      of
      Directors of the Company.

    


    (j)    To
      comply
      in all material respects with all applicable securities and other applicable
      laws, rules and
      regulations, including, without limitation, the Sarbanes-Oxley Act, and use
      its
      best efforts to cause the Company's
      directors and officers, in their capacities as such, to comply with such laws,
      rules and regulations, including, without limitation, the provisions of the
      Sarbanes-Oxley Act.

    


    (k)    To
      engage
      and maintain, at its expense, a registrar and transfer agent for the Units
      or to
      act as its
      own
      registrar and transfer agent.

    


    (1)    To
      not
      take any action prior to the Closing Date which would require the Prospectus
      to
      be amended
      or supplemented pursuant to Section
      6(b).

    


    (m)    To
      supply
      the Placement Agent with copies of all correspondence to and from, and all
      documents
      issued to and by, the Commission in connection with the registration of the
      Units under the Securities Act.

    


    5.    PAYMENT
      OF EXPENSES. The
      Company agrees with the Placement Agent to pay (a) the costs
      incident to the authorization, issuance, sale, preparation and delivery of
      the
      Units to the Purchasers and any taxes payable in that connection; (b) the costs
      incident to the Registration of the Units under the Securities Act; (c)
the
      costs
      incident to the preparation, printing and distribution of the Registration
      Statement and Prospectus and any amendments
      and exhibits thereto or any document incorporated by reference therein, and
      the
      costs of printing, reproducing and distributing, this Agreement by mail, telex
      or other means of communication; (d) the related reasonable fees and expenses
      of
      counsel for the Placement Agent, including without limitation, those incurred
      in
      connection with the preparation of this Agreement and the review, revision,
      comment and filing of the Prospectus and
      preparation or review of filings required under the Securities Act, Exchange
      Act, Blue Sky or FINRA rules and regulations;
      (e) any applicable listing or other fees; (f) the fees and expenses of
      qualifying the Units under the securities
      laws of the several jurisdictions as provided in Section
      4(f) and
      of
      preparing, printing and distributing Blue
      Sky
      Memoranda (including related reasonable fees and expenses of counsel to the
      Placement Agent); (g) all fees
      and
      expenses of the registrar and transfer agent of the Units; and (h) all other
      costs and expenses incident to the performance
      of the obligations of the Company under this Agreement (including, without
      limitation, the fees and expenses
      of the Company's independent accountants and the travel and other expenses
      incurred by Company personnel
      in connection with any "roadshow" including, without limitation, any expenses
      advanced by the Placement
      Agent on the Company's behalf (which will be promptly reimbursed)). All
      out-of-pocket expenses incurred
      by the Placement Agent as described in this Section 5 shall be submitted by
      the
      Placement Agent to the Company, on a monthly basis, and shall be deemed
      reasonable and unobjectionable upon a reasonable showing by the Placement Agent
      that such expenses were incurred, directly or indirectly, in connection with
      the
      proposed transactions
      or relationship of the parties as described herein. The Company has previously
      remitted to the Placement Agent a retainer sum of $50,000. This amount
      constitutes an advance fee payable to the Placement Agent
      for
      securing its efforts hereunder and shall not be considered an advance against
      any out-of-pocket expenses incurred by the Placement Agent to be reimbursed
      by
      the Company pursuant to this provision. Within 30 days of submission
      from the Placement Agent to the Company of the requested reimbursement expense,
      the Company shall make
      full
      payment of the requested reimbursement provided that the expenses are deemed
      reasonable and


    
      
        
        

      

      
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          11
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    unobjectionable.
      In addition to any fees, costs or expenses paid to Placement Agent hereunder,
      the Placement Agent shall be entitled to retain the $50,000 retainer described
      above upon termination of the Offering prior to the Closing Date,
      regardless of the reason for such termination. Upon successful closing of the
      Offering, the retainer shall be applied
      against the fees due the Placement Agent.

    


    6.    CONDITIONS
      TO THE OBLIGATIONS OF THE PLACEMENT AGENT AND THE PURCHASERS,
      AND THE SALE OF THE UNITS. The
      respective obligations of the Placement Agent and the Purchasers,
      and the closing of the sale of the Units hereunder are subject to the accuracy,
      when made and on the Closing
      Date, of the representations and warranties of the Company contained herein,
      to
      the accuracy of the statements of the Company made in any certificates pursuant
      to the provisions hereof, to the performance by the Company of its obligations
      hereunder, and to each of the following additional terms and
      conditions:

    


    (a)    No
      stop
      order suspending the effectiveness of the Registration Statement shall have
      been
      issued and
      no
      proceedings for that purpose shall have been initiated or threatened by the
      Commission, and any request for additional
      information on the part of the Commission (to be included in the Registration
      Statement or the Prospectus or
      otherwise) shall have been complied with to the reasonable satisfaction of
      the
      Placement Agent. The Registration Statement
      and any filings required to be made by the Company in accordance with
Section
      4(a) shall
      have been timely
      filed with the Commission.

    


    (b)    The
      Placement Agent shall not have discovered and disclosed to the Company on or
      prior to the
      Closing Date that the Registration Statement or the Prospectus or any amendment
      or supplement thereto contains an
      untrue
      statement of a fact which, in the opinion of counsel for the Placement Agent,
      is
      material or omits to state any
      fact
      which, in the opinion of such counsel, is material and is required to be stated
      therein or is necessary to make the statements therein (in the case of the
      Prospectus in light of the circumstances under which they were made) not
misleading.

    


    (c)    All
      corporate proceedings and other legal matters incident to the authorization,
      form, execution, delivery
      and validity of each of this Agreement, the Units, the Registration Statement
      and the Prospectus and all other
      legal matters relating to this Agreement and the transactions contemplated
      hereby shall be reasonably satisfactory
      in all material respects to counsel for the Placement Agent, and the Company
      shall have furnished to such
      counsel all documents and information that they may reasonably request to enable
      them to pass upon such matters.

    


    (d)    The
      Placement Agent shall have received from Brown, Winick, Graves, Gross,
      Baskerville & Schoenebaum
      P.L.C., counsel for the Company, such counsel's written opinion, addressed
      to
      the Placement Agent and
      the
      Purchasers and dated as of the Closing Date, in form and substance reasonably
      satisfactory to the Placement Agent
      as
      set forth in Exhibit
      C attached
      hereto.

    


    (e)    The
      Company shall have furnished to the Placement Agent and the Purchasers a
      certificate, dated
      as
      of the Closing Date, executed by its Chief Executive Officer and its Chief
      Financial Officer stating that (i) such
      officers have carefully examined the Registration Statement and the Prospectus
      and, in their opinion, each of the
      Registration Statement as of its effective date and the Prospectus, as of each
      such effective date, did not include any
      untrue statement of a material fact and did not omit to state a material fact
      required to be stated therein or necessary
      to make the statements therein (in the case of the Prospectus in light of the
      circumstances under which they
      were
      made) not misleading, (ii) since the effective date of the Initial Registration
      Statement no event has occurred which should have been set forth in a supplement
      or amendment to the Registration Statement or the Prospectus,
      (iii) to the best of their knowledge after reasonable investigation, as of
      the
      Closing Date, the representations
      and warranties of the Company in this Agreement are true and correct and the
      Company has complied
      with all agreements and covenants contained in this Agreement and satisfied
      all
      conditions on its part to be performed
      or satisfied hereunder at or prior to the Closing Date, (iv) subsequent to
      the
      date of the most recent financial
      statements included or incorporated by reference in the Prospectus, there has
      been no change in the financial
      position or results of operation of the Company that could have a Material
      Adverse Effect, or any change, or
      any
      development including a prospective change, in or affecting the condition
      (financial or otherwise), results of operations,
      business or prospects of the Company taken as a whole, except as set forth
      in
      the Prospectus, and (v) the Initial
      Registration Statement became effective on January 29, 2008, and to their
      knowledge, as of the Closing Date (I)
      no
      stop order suspending the effectiveness of the Registration Statement has been
      issued and no proceedings for that


    
      
        
        

      

      
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    purpose
      have been commenced or are pending before or are contemplated by the Commission
      and (II) no action has been taken by any governmental agency, body or official,
      and no injunction, restraining order or order of any nature
      by
      any federal or state court has been issued, which would prevent the issuance
      of
      the Units.

    


    (f)    At
      the
      Execution Time, the Placement Agent shall have received from Hein &
Associates LLP a
      letter,
      addressed to the Placement Agent and dated such date, in form and substance
      satisfactory to the Placement Agent
      (i)
      confirming that they are independent certified public accountants with respect
      to the Company within the meaning of the Securities Act and the Rules and
      Regulations and (ii) stating the conclusions and findings of such firm
      with
      respect to the financial statements and certain financial information contained
      or incorporated by reference in
      the
      Prospectus.

    


    (g)    On
      the
      Closing Date, the Placement Agent shall have received a letter (the "bring-down
      letter") from
      Hein
& Associates LLP addressed to the Placement Agent and dated the Closing Date
      confirming, as of the date
      of
      the bring-down letter (or, with respect to matters involving changes or
      developments since the respective dates
      as
      of which specified financial information is given in the Prospectus as of a
      date
      not more than three Business Days
      prior to the date of the bring-down letter), the conclusions and findings of
      such firm with respect to the financial
      information and other matters covered by its letter delivered to the Placement
      Agent concurrently with the execution of this Agreement.

    


    (h)    (i)
      The
      Company shall not have sustained since the date of the latest audited financial
      statements
      included or incorporated by reference in the Prospectus any loss or interference
      with its business from fire, explosion, flood, terrorist act or other calamity,
      whether or not covered by insurance, or from any labor dispute or court or
      governmental action, order or decree, otherwise than as set forth in or
      contemplated by the Prospectus, and (ii) since such date there shall not have
      been any change in the membership interests or long-term debt of the
Company
      or any change, or any development involving a prospective change, in or
      affecting the business, general affairs,
      management, financial position, members' equity, results of operations or
      prospects of the Company, otherwise
      than as set forth in or contemplated by the Prospectus, the effect of which,
      in
      any such case described in clause
      (i) or (ii), is, in the judgment of the Placement Agent, so material and adverse
      as to make it impracticable or inadvisable to proceed with the sale or delivery
      of the Units on the terms and in the manner contemplated by the
      Prospectus.

    


    (i)    Subsequent
      to the execution and delivery of this Agreement, there shall not have occurred
      any of
      the
      following: (i) trading in securities generally on the New York Stock Exchange,
      the Nasdaq National Market or the
      American Stock Exchange or in the over-the-counter market, or trading in any
      securities of the Company on any exchange
      or in the over-the-counter market, shall have been suspended or minimum or
      maximum prices or maximum
      ranges for prices shall have been established on any such exchange or such
      market by the Commission, by
      such
      exchange or by any other regulatory body or governmental authority having
      jurisdiction, (ii) a banking moratorium shall have been declared by Federal
      or
      state authorities or a material disruption has occurred in commercial
      banking or securities settlement or clearance services in the United States,
      (iii) the United States shall have
      become engaged in hostilities, or the subject of an act of terrorism, there
      shall have been an escalation in hostilities
      in which it is not already engaged involving the United States or there shall
      have been a declaration of a national
      emergency or war by the United States or (iv) there shall have occurred any
      other calamity or crisis or any change in general economic, political or
      financial conditions in the United States or elsewhere, if the effect of any
      such event in clause (iii) or (iv) makes it, in the sole judgment of the
      Placement Agent, impracticable or inadvisable to
      proceed with the sale or delivery of the Units on the terms and in the manner
      contemplated by the Prospectus.

    


    (j)    No
      action
      shall have been taken and no statute, rule, regulation or order shall have
      been
enacted,
      adopted or issued by any governmental agency or body which would, as of the
      Closing Date, prevent the issuance
      or sale of the Units; and no injunction, restraining order or order of any
      other
      nature by any federal or state court
      of
      competent jurisdiction shall have been issued as of the Closing Date which
      would
      prevent the issuance or sale of the Units.

    


    (k)    The
      Company shall have prepared and filed with the Commission all appropriate
      Current Reports
      on Form 8-K as may be required under the Exchange Act.

    


    (l)    The
      Company shall have entered into Subscription Agreements with each of the
      Purchasers and


    
      
        
        

      

      
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    such
      agreements shall be in full force and effect.

    


    (m)    Prior
      to
      the Closing Date, the Company shall have furnished to Placement Agent such
      further information,
      certificates and documents as it may reasonably request.

    


    All
      opinions, letters, evidence and certificates mentioned above or elsewhere in
      this Agreement shall be deemed
      to
      be in compliance with the provisions hereof only if they are in form and
      substance reasonably satisfactory to
      counsel for the Placement Agent.

    


    7.    INDEMNIFICATION
      AND CONTRIBUTION.

    


    (a)    The
      Company shall indemnify and hold harmless the Placement Agent, its officers,
      employees, representatives and agents and each person, if any, who controls
      the
      Placement Agent within the meaning of the Securities Act (collectively the
      "Placement Agent Indemnified Parties" and each a "Placement Agent Indemnified
      Party") against any loss, claim, damage or liability, joint or several, or
      any
      action in respect thereof, to which that Placement
      Agent Indemnified Party may become subject, under the Securities Act or
      otherwise, insofar as such loss, claim,
      damage, liability or action arises out of or is based upon (i) any untrue
      statement or alleged untrue statement of a material fact contained in the
      Registration Statement or the Prospectus or in any amendment or supplement
      thereto except insofar as any such loss, claim, damage, liability or action
      arises out of or is based upon any untrue statement
      or alleged untrue statement of material fact contained in, and in conformity
      with, information concerning such
      Placement Agent furnished by Placement Agent for use in the Registration
      Statement; (ii) the omission or alleged
      omission to state in the Registration Statement or the Prospectus or in any
      amendment or supplement thereto a
      material fact required to be stated therein or necessary to make the statements
      therein not misleading except insofar
      as any such loss, claim, damage, liability or action arises out of or is based
      upon any omission or alleged omission
      to state a material fact in the Registration Statement in connection with
      information concerning such Placement
      Agent furnished by Placement Agent for use in the Registration Statement (or
      which Placement Agent failed
      to
      provide but that was necessary to make the information provided not misleading),
      or (iii) any breach of the representations
      and warranties of the Company contained herein, and shall reimburse each
      Placement Agent Indemnified
      Party promptly upon demand for any legal or other expenses reasonably incurred
      by that Placement Agent
      Indemnified Party in connection with investigating or preparing to defend or
      defending against or appearing as a third party witness in connection with
      any
      such loss, claim, damage, liability or action as such expenses are incurred.
      This indemnity agreement is not exclusive and will be in addition to any
      liability, which the Company might
      otherwise have and shall not limit any rights or remedies which may otherwise
      be
      available at law or in equity to
      each
      Placement Agent Indemnified Party.

    


    (b)    The
      Placement Agent shall indemnify and hold harmless the Company its officers,
      employees, representatives
      and agents, each of its directors and each person, if any, who controls the
      Company within the meaning
      of the Securities Act (collectively the "Company Indemnified Parties" and each
      a
      "Company Indemnified Party")
      against any loss, claim, damage or liability, joint or several, or any action
      in
      respect thereof, to which the Company
      Indemnified Parties may become subject, under the Securities Act or otherwise,
      insofar as such loss, claim,
      damage, liability or action arises out of or is based upon (i) any breach by
      the
      Placement Agent of the representations,
      warranties, covenants, or agreements by the Placement Agent contained in this
      Agreement, (ii) any untrue
      statement or alleged untrue statement of material fact contained in, and in
      conformity with, information concerning
      such Placement Agent furnished by Placement Agent for use in the Registration
      Statement, or (iii) any omission
      or alleged omission to state a material fact in the Registration Statement
      in
      connection with information concerning such Placement Agent furnished by
      Placement Agent for use in the Registration Statement (or which Placement
      Agent failed to provide but that was necessary to make the information provided
      not misleading), and shall
      reimburse the Company Indemnified Parties for any legal or other expenses
      reasonably incurred by such parties
      in connection with investigating or preparing to defend or defending against
      or
      appearing as third party witness in connection with any such loss, claim,
      damage, liability or action as such expenses are incurred. This indemnity
      agreement is not exclusive and will be in addition to any liability, which
      the
      Placement Agent and the Purchasers might otherwise have and shall not limit
      any
      rights or remedies which may otherwise he available at law or in equity to
      the
      Company Indemnified Parties. Notwithstanding the provisions of this Section
      7(b), in
      no
      event shall
      any
      indemnity by the Placement Agent under this Section
      7(b) exceed
      the total compensation received by such Placement
      Agent in accordance with Section
      1(e).


    
      
        
        

      

      
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    (c)    Promptly
      after receipt by an indemnified party under this Section
      7 of
      notice
      of any claim or the
      commencement of any action, the indemnified party shall, if a claim in respect
      thereof is to be made against the indemnifying
      party under this Section
      7, notify
      the indemnifying party in writing of the claim or the commencement of
      that
      action; provided,
      however, that
      the
      failure to notify the indemnifying party shall not relieve it from any
liability
      which it may have under this Section
      7 except
      to
      the extent it has been materially prejudiced by such failure; and,
      provided,
      further, that
      the
      failure to notify the indemnifying party shall not relieve it from any liability
      which it may
      have
      to an indemnified party otherwise than under this Section
      7. If
      any
      such claim or action shall be brought against
      an indemnified party, and it shall notify the indemnifying party thereof, the
      indemnifying party shall be entitled
      to participate therein and, to the extent that it wishes, jointly with any
      other
      similarly notified indemnifying party,
      to
      assume the defense thereof with counsel reasonably satisfactory to the
      indemnified party. After notice from the
      indemnifying party to the indemnified party of its election to assume the
      defense of such claim or action, the indemnifying
      party shall not be liable to the indemnified party under this Section
      7 for
      any
      legal or other expenses subsequently incurred by the indemnified party in
      connection with the defense thereof other than reasonable costs of investigation:
      provided,
      however, that
      any
      indemnified party shall have the right to employ separate counsel in any
such
      action and to participate in the defense thereof but the fees and expenses
      of
      such counsel shall be at the expense of
      such
      indemnified party unless (i) the employment thereof has been specifically
      authorized by the indemnifying party
      in
      writing, (ii) such indemnified party shall have been advised by such counsel
      that there may be one or more legal
      defenses available to it which are different from or additional to those
      available to the indemnifying party and in
      the
      reasonable judgment of such counsel it is advisable for such indemnified party
      to employ separate counsel or (iii) the indemnifying party has failed to assume
      the defense of such action in accordance with the terms hereof and employ
      counsel reasonably satisfactory to the indemnified party, in which case, if
      such
      indemnified party notifies the
      indemnifying party in writing that it elects to employ separate counsel at
      the
      expense of the indemnifying party, the
      indemnifying party shall not have the right to assume the defense of such action
      on behalf of such indemnified party,
      it
      being understood, however, that the indemnifying party shall not, in connection
      with any one such action or separate
      but substantially similar or related actions in the same jurisdiction arising
      out of the same general allegations
      or circumstances, be liable for the reasonable fees and expenses of more than
      one separate firm of attorneys
      at any time for all such indemnified parties, which firm shall be designated
      in
      writing by the Placement Agent,
      if
      the indemnified parties under this Section
      7 consist
      of any Placement Agent Indemnified Party, or by the Company
      if the indemnified parties under this Section
      7 consist
      of any Company Indemnified Parties. Each indemnified
      party, as a condition of the indemnity agreements contained in Sections
      7(a) and
      7(b)
      shall
      use
      all reasonable
      efforts to cooperate with the indemnifying party in the defense of any such
      action or claim. Subject to the provisions
      of Section
      7(d) below,
      no
      indemnifying party shall be liable for any settlement, compromise or consent
      to
the
      entry
      of judgment in connection with any such action effected without its written
      consent (which consent shall not be unreasonably withheld), but if settled
      with
      its written consent or if there be a final judgment for the plaintiff in any
      such action (other than a judgment entered with the consent of such indemnified
      party), the indemnifying party
      agrees to indemnify and hold harmless any indemnified party from and against
      any
      loss or liability by reason of
      such
      settlement or judgment.

    


    (d)    If
      at any
      time an indemnified party shall have requested that an indemnifying party
      reimburse the
      indemnified party for fees and expenses of counsel, such indemnifying party
      agrees that it shall be liable for any settlement
      of the nature contemplated by this Section
      7 effected
      without its written consent if (i) such settlement is entered
      into more than 45 days after receipt by such indemnifying party of the request
      for reimbursement, (ii) such indemnifying
      party shall have received notice of the terms of such settlement at least 30
      days prior to such settlement
      being entered into and (iii) such indemnifying party shall not have reimbursed
      such indemnified party in accordance
      with such request prior to the date of such settlement.

    


    (e)    If
      the
      indemnification provided for in this Section
      7 is
      unavailable or insufficient to hold harmless
      an indemnified party under Section
      7(a) or
      7(11),
      then
      each
      indemnifying party shall, in lieu of indemnifying
      such indemnified party, contribute to the amount paid or payable by such
      indemnified party as a result of
      such
      loss, claim, damage or liability, or action in respect thereof, (i) in such
      proportion as shall be appropriate to reflect
      the relative benefits received by the Company on the one hand and the Placement
      Agent on the other from the offering
      of the Units or (ii) if the allocation provided by clause (i) above is not
      permitted by applicable law, in such proportion
      as is appropriate to reflect not only the relative benefits referred to in
      clause (i) above but also the relative fault
      of
      the Company on the one hand and the Placement Agent on the other with respect
      to
      the statements or omissions
      which resulted in such loss, claim, damage or liability, or action in respect
      thereof, as well


    
      
        
        

      

      
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    as
      any
      other relevant
      equitable considerations. The relative benefits received by the Company on
      the
      one hand and the Placement Agent
      on
      the other with respect to such offering shall be deemed to he in the same
      proportion as the total net proceeds
      from the offering of the Units purchased under this Agreement (before deducting
      expenses) received by the Company
      bears to the total compensation received by the Placement Agent with respect
      to
      the Units purchased under this Agreement.. The Company and the Placement Agent
      agree that it would not be just and equitable if contributions
      pursuant to this Section
      7(e) were
      to
      be determined by pro rata allocation or by any other method of allocation
      which does not take into account the equitable considerations referred to
      herein. The amount paid or payable by an indemnified party as a result of the
      loss, claim, damage or liability, or action in respect thereof, referred
      to above in this Section
      7(e) shall
      be
      deemed to include, for purposes of this Section
      7(e), any
      legal
      or other expenses
      reasonably incurred by such indemnified party in connection with investigating
      or defending any such action
      or
      claim. Notwithstanding the provisions of this Section
      7(e), the
      Placement Agent shall not be required to contribute
      any amount in excess of the total compensation received by such Placement Agent
      in accordance with Section
      1(e) less
      the
      amount of any damages which such Placement Agent has otherwise paid or become
      liable to pay by reason of any untrue or alleged untrue statement or omission
      or
      alleged omission. No person guilty of fraudulent misrepresentation (within
      the
      meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution
      from any person who was not guilty of such fraudulent
      misrepresentation.

    


    8.    TERMINATION.
      The
      obligations of the Placement Agent and the Purchasers hereunder and under
      the
      Subscription Agreements may be terminated by the Placement Agent, in its
      reasonable discretion by notice given
      to
      the Company prior to delivery (including electronic delivery) of and payment
      for
      the Units if, prior to that time,
      any
      condition to the obligations of the Placement Agent and the Purchasers set
      forth
      in Section
      6 hereof
      is
      not satisfied to the satisfaction of Placement Agent or if the Purchasers shall
      decline to purchase the Units for any reason permitted
      under this Agreement or the Subscription Agreements. This Agreement and the
      obligations of the Company
      hereunder may be terminated by the Company upon breach by the Placement Agent
      of
      any of the representations, warranties, covenants, or agreements by the
      Placement Agent contained in this Agreement if said breach
      remains uncured ten (10) days after written notice thereof from the Company.
      The
      provisions of Sections 1(e),
      2,
      4, 5, 6, 7 and 9 hereof shall survive any termination of this Agreement. Without
      limiting the forgoing, the Placement
      Agent's right to receive payment pursuant to Section 1(e) hereof shall continue
      despite any such termination
      and the Placement Agent shall be entitled to receive full payment on the Closing
      Date of any amounts it would
      have been entitled to, pursuant to Section 1(e), 5, 9 or otherwise, the same
      as
      if this Agreement had not been terminated.

    


    9.    REIMBURSEMENT
      OF PLACEMENT AGENT'S EXPENSES. If
      the
      sale of the Units provided
      for herein is not consummated because any condition to the obligations of the
      Placement Agent and the Purchasers
      set forth in Section
      6 hereof
      is
      not satisfied, because of any termination pursuant to Section
      8 hereof
      or
      because of any refusal, inability or failure on the part of the Company to
      perform any agreement herein or comply with
      any
      provision hereof other than by reason of a default by the Placement Agent,
      the
      Company will reimburse the Placement
      Agent upon demand for all reasonable out-of-pocket expenses (including
      reasonable fees and disbursements
      of counsel and any expenses advanced by the Placement Agent on the Company's
      behalf) that shall have
      been
      incurred by the Placement Agent in connection with this Agreement and the
      proposed purchase and sale of
      the
      Units and, upon demand, the Company shall pay the full amount thereof to
      Placement Agent.

    


    10.    SUCCESSORS;
      PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This
      Agreement shall inure to the benefit of and be binding upon the Placement Agent,
      the Purchasers, the Company, and their
      respective successors. Nothing expressed or mentioned in this Agreement is
      intended or shall be construed to give
      any
      person other than the persons mentioned in the preceding sentence any legal
      or
      equitable right, remedy or claim
      under or in respect of this Agreement, or any provisions herein contained,
      this
      Agreement and all conditions and
      provisions hereof being intended to be and being for the sole and exclusive
      benefit of such persons and for the benefit
      of no other person; except that the representations, warranties, covenants,
      agreements and indemnities of the Company
      contained in this Agreement shall also he for the benefit of the Placement
      Agent
      Indemnified Parties, and the
      indemnities of the Placement Agent shall also be for the benefit of the Company
      Indemnified Parties. It is understood that the Placement Agent's
      responsibilities to the Company are solely contractual in nature and the
Placement
      Agent does not owe the Company, or any other party, any fiduciary duty as a
      result of this Agreement.


    
      
        
        

      

      
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    11.    SURVIVAL
      OF INDEMNITIES, REPRESENTATIONS, WARRANTIES, ETC. The
      respective
      indemnities, covenants, agreements, representations, warranties and other
      statements of the Company and the
      Placement Agent, as set forth in this Agreement or made by them respectively,
      pursuant to this Agreement, shall remain
      in
      full force and effect, regardless of any investigation made by or on behalf
      of
      the Placement Agent, the Company,
      the Purchasers or any person controlling any of them and shall survive delivery
      of and payment for the Units.

    


    12.    NOTICES.
      All
      statements, requests, notices and agreements hereunder shall be in writing,
      and:

    


    (a)    if
      to the
      Placement Agent, shall be delivered or sent by mail, telex or facsimile
      transmission to

    


    Thomas
      Securities LLC, d.b.a. Thomas Group Capital, 3414 Peachtree Road, N.E., Suite
      730, Atlanta, GA 30326,
      Attn: Thomas Borbone (Fax: 678-500-1225), with a copy to: Taylor, Busch,
      Slipakoff & Duma, LLP, 1600 Parkwood
      Circle, Suite 200, Atlanta, GA 30339, Attention: Adam Slipakoff, Esq. (Fax:
      770-434-7376).

    


    (b)    if
      to the
      Company shall be delivered or sent by mail, telex or facsimile transmission
      to
      East Coast
      Ethanol, LLC, 1907 Thurmond Mall, P.O. Box 1058, Columbia, South Carolina 29202,
      Attention: John F. Long, Chief Financial Officer (Fax: 803.799.5658), with
      a
      copy to: BrownWinick, PLC, Suite 2000 Ruan Center, 666 Grand Avenue, Des Moines,
      Iowa 50309, Attention: Valerie Bandstra, Esq. (Fax: 515.323.8559)

    


    13.    DEFINITIONS
      OF CERTAIN TERMS. The
      terms
      which follow, when used in this Agreement,
      shall have the meanings indicated.

    


    "Business
      Day" shall
      mean any day other than a Saturday, a Sunday, a legal holiday, a day on which
      banking
      institutions or trust companies are authorized or obligated by law to close
      in
      New York City or any day on which
      the
      Nasdaq National Market is not open for trading.

    


    "Effective
      Date" shall
      mean each date and time that the Registration Statement (and any post-effective
      amendment
      or amendments thereto) became or becomes effective.

    


    "Execution
      Time" shall
      mean the date and time that this Agreement is executed and delivered by the
      parties
      hereto.

    


    "Interference
      Proceeding" shall
      have the meaning set forth in 35 U.S.C. § 135.

    


    "To
      the Company's knowledge" and
      words
      of similar import shall mean that knowledge which the Company
      actually has in its possession.

    


    14.    GOVERNING
      LAW. This
      Agreement shall be governed by and construed in accordance with the
      laws
      of the State of Georgia.

    


    15.    PARTIAL
      UNENFORCEABILITY. The
      invalidity or unenforceability of any Section, paragraph
      or provision of this Agreement shall not affect the validity or enforceability
      of any other Section, paragraph
      or provision hereof. If any Section, paragraph or provision of this Agreement
      is
      for any reason determined to he invalid or unenforceable, there shall be deemed
      to be made such minor changes (and only such minor changes) as
      are
      necessary to make it valid and enforceable.

    


    16.    GENERAL.
      This
      Agreement constitutes the entire agreement of the parties to this Agreement
      and
      supersedes all prior written or oral and all contemporaneous oral agreements,
      understandings and negotiations with
      respect to the subject matter hereof. In this Agreement, the masculine, feminine
      and neuter genders and the singular
      and the plural include one another. The section headings in this Agreement
      are
      for the convenience of the parties
      only and will not affect the construction or interpretation of this Agreement.
      This Agreement may be amended
      or


    
      
        
        

      

      
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          17
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    modified,
      and the observance of any term of this Agreement may be waived, only by a
      writing signed by
      the
      Company and the Placement Agent.

    


    17.    COUNTERPARTS.
      This
      Agreement may be signed in any number of counterparts, each of which
      shall be an original, with the same effect as if the signatures thereto and
      hereto were upon the same instrument.

    


    If
      the
      foregoing is in accordance with your understanding of the agreement between
      the
      Company and the Placement
      Agent, kindly indicate your acceptance in the space provided for that purpose
      below.

     

    Very
      truly yours,

     

     

    EAST
      COAST ETHANOL, LLC

     

     

    By: 
      /s/
      Randy
      D. Hudson 
      
        

      

    

    Name:
      Randall D. Hudson

    Title:
      Chief Executive Officer

    


    


    Accepted
      as of the date first above written:

    


    


    THOMAS
      SECURITIES LLC

    


    


    /s/
      William G. Vincent 
      
        

      

    

    William
      G. Vincent

    President/CEO

     

     

    
      
        
        

      

      
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          18
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    EXHIBIT
      A

    EXCLUSIVE
      TERRITORY

     

    North
      Carolina

     

    Virginia

     

    Maryland

     

     

    
      
        
        

      

      
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          19
          -

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      B 

    PROSPECTUS

     

     

     

     

    
      
        
        

      

      
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          20
          -

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      C 

    OPINION
      OF COUNSEL FOR THE COMPANY

    

      1.
        The
        Company validly exists as a limited liability company in good standing under
        the
        laws of the State of Delaware, with the limited liability company power and
        authority to own its properties and conduct its business as described in
        the
        Registration Statement and the Prospectus. The Company has no subsidiaries
        

       

      2.
        The
        Company is duly qualified to do business as a foreign limited liability company
        and is in good standing in each jurisdiction where the ownership or leasing
        of
        its properties or the conduct of its business requires such qualification,
        except where the failure to be so qualified and in good standing would not,
        individually, or in the aggregate, have a Material Adverse Effect. 

       

      3.
        The
        Company has the authorized capitalization set forth in the Registration
        Statement and the Prospectus. The Units to be delivered on the Closing Date
        have
        been duly and validly authorized and, when issued, delivered and paid for
        in
        accordance with the Placement Agreement, will be fully paid and non-assessable.
        The Units conform as to legal matters to the descriptions thereof contained
        in
        the Registration Statement and the Prospectus in all material respects.


       

       4.
        The
        Company is not in violation of any material provision of its certificate
        of
        organization or operating agreement and, to the best of our knowledge, is
        not in
        material default in the performance of any obligation, agreement, covenant
        or
        condition contained in any document filed as an exhibit to the Registration
        Statement or incorporated by reference therein. 

       

      5.
        Except
        as otherwise disclosed in the Registration Statement and Prospectus, there
        are
        no preemptive or similar rights that entitle or will entitle any person to
        acquire any Units from the Company upon issuance or sale thereof pursuant
        to any
        document filed as an exhibit to the Registration Statement or incorporated
        by
        reference therein. 

       

      6.
        Except
        as otherwise disclosed in the Registration Statement and Prospectus and to
        our
        knowledge, no person or entity has the right to require the registration
        of
        Units or other securities of the Company because of the filing or effectiveness
        of the Registration Statement or the completion of the offering.

       

      7.
        The
        Company has the limited liability company power and authority to execute
        and
        deliver the Placement Agreement, the Subscription Agreements and the Units
        and
        to perform its obligations under the Placement Agreement and the Subscription
        Agreements. All limited liability company action required to be taken for
        the
        due and proper authorization, execution and delivery of the Placement Agreement
        and consummation of the transactions contemplated by the Placement Agreement
        have been duly and validly taken. 

       

      8.
        The
        Placement Agreement has been duly and validly authorized, executed and delivered
        by the Company and constitutes the legal, valid and binding obligation of
        the
        Company, enforceable in accordance with its terms, except as enforceability
        may
        be limited by applicable bankruptcy, insolvency, reorganization, moratorium
        or
        similar laws affecting creditors' rights generally and except as enforceability
        may be subject to general principles of equity (regardless of whether such
        enforceability is considered in a proceeding in equity or at law).



      


      9.
        To our
        knowledge and other than as set forth in the Registration Statement or the
        Prospectus, there are no judicial, regulatory or other legal or governmental
        proceedings pending to which the Company is a party or of which any property
        of
        the Company is subject which are required to be disclosed in the Registration
        Statement or the Prospectus pursuant to Item 103 of Regulation S-B of the
        Rules
        and Regulations that are not described as required. 

       

      10.
        The
        execution, delivery and performance of the Placement Agreement and consummation
        of the transactions contemplated by the Placement Agreement do not and will
        not
        (A) conflict with or result in a breach of any of the terms and provisions
        of,
        or constitute a default (or an event which with notice or lapse of time,
        or
        both, would constitute a default) under, or result in the creation or imposition
        of any lien, charge or encumbrance upon any property or assets of the Company
        pursuant to, any indenture, mortgage, deed of trust, loan agreement or any
        other
        agreement, instrument, franchise, license or permit known to us to which
        the
        Company is a party or by which any of the Company or its properties or assets
        may be bound and which is filed as an exhibit to the Registration Statement
        and
        the documents incorporated therein by reference, (B) violate or conflict
        with
        any provision of the certificate of organization or operating agreement of
        the
        Company, or, (C) to our knowledge, violate or conflict with any judgment,
        decree, order, statute, rule or regulation of any court or any judicial,
        regulatory or other legal or governmental agency or body known by us to be
        applicable to the Company, except (in the case of clauses (A) and (C)) for
        any
        of the foregoing that would not individually or in the aggregate have a Material
        Adverse Effect. 

       

      
        
           

        

        
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            21 -


          
            

          

        

        
           

        

         

      

      11.
        No
        consent, approval, authorization, order, registration, filing, qualification,
        license or permit of or with any court or any judicial, regulatory or other
        legal or governmental agency or body is required for the execution, delivery
        and
        performance of the Placement Agreement or consummation of the transactions
        contemplated by the Placement Agreement, including the issuance and sale
        of the
        Units, except for (1) such as are required by the Securities Act and blue
        sky
        laws; and (2) such as are required by FINRA. 

       

      12.
        To
        our knowledge, the Company is not a party to any contract or agreement of
        a
        character required to be described or incorporated by reference in the
        Registration Statement or the Prospectus or to be filed as an exhibit to
        the
        Registration Statement pursuant to Item 601(b)(10) of Regulation S-B of the
        Rules and Regulations that has not been described or filed as
        required.

       

      13.
        No
        facts have come to our attention that have caused us to believe that the
        Registration Statement or the Prospectus and any amendments thereof or
        supplements thereto contain any untrue statement of material fact or omit to
        state a material fact necessary in order to make the statements therein,
        in
        light of the circumstances under which they were made, not misleading (except
        that in each case we do not express any view as to the financial statements,
        schedules and other financial or statistical information included therein
        or
        excluded therefrom or the statements contained in the exhibits to the
        Registration Statement). 

      


      14.
        The
        Company is not and, after giving effect to the offering and sale of the Units
        and the application of the proceeds thereof as described in the Registration
        Statement and the Prospectus, will not be, an "investment company" as such
        term
        is defined in the Investment Company Act of 1940, as amended.


    

     

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