EXHIBIT
10.1

    


    SECURITIES
PURCHASE AGREEMENT

     

    This
Securities Purchase Agreement (this “Agreement”) is dated
as of August 31, 2010, between Comstock Mining Inc., a Nevada corporation (the
“Company”), and
each Purchaser identified on Schedule A hereto
(each, including its successors and assigns, a “Purchaser” and
collectively, the “Purchasers”).

     

    WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to
Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and
Rule 506 promulgated thereunder, the Company desires to issue and sell to each
Purchaser, and each Purchaser, severally and not jointly, desires to purchase
from the Company, securities of the Company as more fully described in this
Agreement; and

     

    NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for other good and valuable consideration the receipt and adequacy of which
are hereby acknowledged, the Company and each Purchaser agree as
follows:

    


    ARTICLE
1

    DEFINITIONS

     

    1.1          Definitions.  In
addition to the terms defined elsewhere in this Agreement: (a) capitalized terms
that are not otherwise defined herein have the meanings given to such terms in
the other Transaction Documents (as applicable), and (b) the following terms
have the meanings set forth in this Section
1.1:

     

    “Affiliate” means any
Person that, directly or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with a Person, as such terms are
used in and construed under Rule 405 under the Securities Act.

     

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

     

    “Business Day” means
any day except any Saturday, any Sunday, any day which is a federal legal
holiday in the United States or any day on which banking institutions in the
State of New York are authorized or required by law or other governmental action
to close.

    


    “Closing” means the
closing of the purchase and sale of the Securities pursuant to Section
2.1.

     

    “Closing Date” has the
meaning set forth in Section
2.1.

     

    “Commission” means the
United States Securities and Exchange Commission.

     

    “Common Stock” means
the common stock of the Company, par value $0.000666 per share, and any other
class of securities into which such common stock may hereafter be reclassified
or changed.

     

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


    
      
         


      

      
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    EXHIBIT
10.1

    


    “Company Counsel”
means Kelley Drye & Warren LLP, with offices located at 101 Park Avenue, New
York, NY 10178.

    


    “Cross-Receipt” means
the cross receipts executed by the Purchasers and the Company, each in the form
of Exhibit F
hereto.

     

    “Disclosure Schedules”
shall have the meaning set forth in Section
3.1.

    


    “Effective
Date” means the earlier of the date that (a) all of the Registrable
Securities (as defined in the Registration Rights Agreement) have been
registered for resale by the holders thereof pursuant to a registration
statement(s) declared effective by the Commission or (b) all of the Registrable
Securities have been sold pursuant to Rule 144 or may be sold pursuant to Rule
144 without volume or manner-of-sale restrictions, so long as the Company is
current with the public information requirements under Rule 144.

     

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

     

    “Exempt Issuance”
means the issuance of (a) shares of Common Stock or options to employees,
officers or directors of the Company pursuant to any stock or option plan (i)
duly adopted for such purpose, by a majority of the non-employee members of the
Board of Directors or a majority of the members of a committee of non-employee
directors established for such purpose, and (ii) approved pursuant to the
provisions of Section 8 of the Series A-1 Certificate of Designation and the
Series A-2 Certificate of Designation, (b) securities upon the exercise or
exchange of or conversion of any Securities issued hereunder (including, without
limitation, any Underlying Shares) and/or other securities exercisable or
exchangeable for or convertible into shares of Common Stock issued and
outstanding on the date of this Agreement or as disclosed in the Company’s
Disclosure Schedules, provided that such securities have not been amended on or
after the date of this Agreement to increase the number of such securities or to
decrease the exercise price, exchange price or conversion price of such
securities (it being understood that such securities may be adjusted for
anti-dilution purposes in connection with this Agreement), (c) securities issued
pursuant to acquisitions or strategic transactions approved by (i) a majority of
the disinterested directors of the Company, and (ii) pursuant to the provisions
of Section 8 of the Series A-1 Certificate of Designation and the Series A-2
Certificate of Designation, and (d) securities issued as consideration for (i)
dividends to the Purchasers of the Preferred Stock under the Series A-1
Certificate of Designation and the Series A-2 Certificates of Designation and to
purchasers of any other Parity Securities (including, solely with respect to the
Series A-2 Preferred Stock and any other Parity Securities, as the case may be,
any and all shares of Common Stock issuable in lieu of cash payments pursuant to
the Make-Whole Payment and including, solely with respect to the Series A-1
Preferred Stock, any and all shares of Common Stock issuable in lieu of cash
payments pursuant to the Additional Dividend payment (as defined in the Series
A-1 Certificate of Designation)); or (ii) capital contributions to Northern
Comstock LLC made pursuant to the Limited Liability Company Operating
Agreement.

     

    “Existing Debt Amount”
means, with respect to each Purchaser, the amount owed by the Company to such
Purchaser under such Purchaser’s Existing Promissory Note as of the Closing, as
set forth on Schedule
A hereto.

    


    “Existing Promissory
Notes” means the promissory notes listed on Schedule B
hereto.

    


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

     

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


    
      
         


      

      
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    EXHIBIT
10.1

    


    “Limited Liability Company
Operating Agreement” means the Northern Comstock LLC Limited Liability
Company Operating Agreement, dated August __, 2010, entered into among DWC
Resources Inc., John Winfield and the Company, in the form of Exhibit G
hereto.

     

    “Lost Note Affidavit and
Indemnity Agreement” means a Lost Note Affidavit and Indemnity Agreement
in a form reasonably acceptable to the Company in the form attached hereto as
Exhibit
E.

    


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

     

    “Northern Comstock
LLC” means the limited liability company formed under Chapter 86 of the
Nevada Revised Statutes Act on August __, 2010.

    


    “Participation
Maximum” shall have the meaning ascribed to such term in Section
4.8(a).

     

    “Payoff Letter” means
the payoff letters executed by the Purchasers in favor of the Company, each in
the form of Exhibit
A hereto, providing for termination and release of all obligations under
the applicable Existing Promissory Note and related Loan Documents (as defined
in such Payoff Letter).

    


    “Person” means an
individual or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any
kind.

     

    “Preferred Stock”
means shares of Series A-1 Preferred Stock and shares of Series A-2 Preferred
Stock issued to the Purchasers hereunder.

    


    “Pre-Notice” shall
have the meaning ascribed to such term in Section
4.8(b).

     

    “Pro Rata Portion”
shall have the meaning ascribed to such term in Section
4.8(e).

     

    “Proceeding” means an
action, claim, suit, investigation or proceeding (including, without limitation,
an informal investigation or partial proceeding, such as a deposition), whether
commenced or threatened.

     

    “Purchaser Party”
shall have the meaning ascribed to such term in Section
4.6.

     

    “Registration Rights
Agreement” means the Registration Rights Agreement, in the form of Exhibit B hereto, by
and among the Company and the Purchasers, providing registration rights with
respect to the Underlying Shares held by the Purchasers on the terms and
conditions set forth therein.

    


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

     

    “Required Minimum”
means, as of any date, the maximum aggregate number of shares of Common Stock
then issued or potentially issuable in the future pursuant to the Transaction
Documents, including any Underlying Shares, ignoring any conversion or exercise
limits set forth therein and assuming that any previously unconverted shares of
Preferred Stock are held until the third anniversary of the Closing Date and all
dividends are paid in shares of Common Stock or Preferred Stock until such third
anniversary.


    
      
         


      

      
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    EXHIBIT
10.1

    


    “Rule 144” means Rule
144 promulgated by the Commission pursuant to the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such
Rule.

     

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

     

    “Securities” means the
Preferred Stock and the Underlying Shares.

     

    “Securities Act” means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.

    


    “Series A-1 Certificate of
Designation” means the 71⁄2% Series A-1 Convertible Preferred Stock
Certificate of Designation to be filed prior to the Closing by the Company with
the Secretary of State of Nevada, in the form of Exhibit C attached
hereto.

    


    “Series A-1 Preferred
Stock” means the Company’s 71⁄2% Series A-1 Convertible Preferred Stock
issued hereunder having the rights, preferences and privileges set forth in the
Series A-1 Certificate of Designation.

    


    “Series A-2 Certificate of
Designation” means the 71⁄2% Series A-2 Convertible Preferred Stock
Certificate of Designation to be filed prior to the Closing by the Company with
the Secretary of State of Nevada, in the form of Exhibit D attached
hereto.

    


    “Series A-2 Preferred
Stock” means the Company’s 71⁄2% Series A-2 Convertible Preferred Stock
issued hereunder having the rights, preferences and privileges set forth in the
Series A-2 Certificate of Designation.

    


    “Short Sales” means
all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange
Act (but shall not be deemed to include the location and/or reservation of
borrowable shares of Common Stock).

     

    “Stated Value” means
$1,000 per share of Preferred Stock, subject to adjustment as provided in the
Series A-1 Certificate of Designation or the Series A-2 Certificate of
Designation (as applicable).

     

    “Subsequent Financing”
shall have the meaning ascribed to such term in Section
4.8(a).

     

    “Subsequent Financing
Notice” shall have the meaning ascribed to such term in Section
4.8(b).

     

    “Subsidiary” shall
have the meaning ascribed to such term in Section 3.1(a) and
shall, where applicable, also include any direct or indirect subsidiary of the
Company formed or acquired after the date hereof.

     

    “Trading Day” means a
day on which the principal Trading Market is open for trading.

     

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


    
      
         


      

      
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    EXHIBIT
10.1

    


    “Transaction
Documents” means this Agreement, the Series A-1 Certificate of
Designation, the Series A-2 Certificate of Designation, the Registration Rights
Agreement, all exhibits and schedules thereto and hereto, and any other
documents or agreements executed in connection with the transactions
contemplated hereunder (including, without limitation, the documents referenced
in Section
2.2(c)(ii)(B)).

     

    “Transfer Agent” means
Corporate Stock Transfer Inc., the current transfer agent of the Company, with a
mailing address of 3200 Cherry Creek South Drive, Suite 430, Denver, CO 80209,
and any successor transfer agent of the Company.

     

    “Underlying Shares”
means the shares of Common Stock that are:

    


    (a)       
  issued and issuable upon conversion of the Series A-1 Preferred
Stock or Series A-2 Preferred Stock issued to the Purchasers hereunder;
and

    


    (b) 
        issued or issuable in lieu of
cash payment of dividends on the Preferred Stock referenced in clause (a) in
accordance with the terms of the Series A-1 Certificate of Designation and the
Series A-2 Certificate of Designation, as applicable (including, solely with
respect to the Series A-2 Preferred Stock, any and all shares of Common Stock
issuable in lieu of cash payments pursuant to the Make-Whole Payment (as defined
in the Series A-2 Certificate of Designation) and including, solely with respect
to the Series A-1 Preferred Stock, any and all shares of Common Stock issuable
in lieu of cash payments pursuant to the Additional Dividend payment (as defined
in the Series A-1 Certificate of Designation).

     

    ARTICLE
2

    PURCHASE
AND SALE

     

    2.1     
    Closing.  

    


    (a)     
    On the date hereof (the “Closing Date”), upon
the terms and subject to the conditions set forth herein, substantially
concurrent with the execution and delivery of this Agreement by the parties
hereto, the Company agrees to sell, and the Purchasers, severally and not
jointly, each agree to purchase, the number of shares of Series A-1 Preferred
Stock or Series A-2 Preferred Stock (as applicable), as set forth on Schedule A hereto,
determined by dividing such Purchaser’s Existing Debt Amount, as set forth on
Schedule A
hereto, by the Stated Value of one (1) share of Series A-1 Preferred Stock or
Series A-2 Preferred Stock (as applicable)

    


    (b)     
    The Company and each Purchaser shall each deliver the
items set forth in Section 2.2
deliverable at the Closing.  Upon satisfaction of the covenants and
conditions set forth in Sections 2.2 and
2.3, the
Closing shall occur at the offices of Company Counsel or such other location as
the parties shall mutually agree.

     

    2.2    
     Deliveries.

     

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

     

    (i)           this
Agreement and the Registration Rights Agreement, and such Purchaser’s Payoff
Letter and Cross-Receipt, each duly executed by the Company, and (ii) evidence
of the filing and acceptance of the Series A-1 Certificate of Designation or the
Series A-2 Certificate of Designation (as applicable), from the Secretary of
State of Nevada.


    
      
         


      

      
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    EXHIBIT
10.1

    


    (b)          Within
five (5) Business Days after the Closing Date, the Company shall deliver or
cause to be delivered to each Purchaser a certificate evidencing the number of
shares of Preferred Stock issued to such Purchaser, determined as provided
herein, registered in the name of such Purchaser.

    


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

     

    (i)           this
Agreement, the Registration Rights Agreement and such Purchaser’s Payoff Letter,
each duly executed by such Purchaser, and (ii) such Purchaser’s original
Existing Promissory Note or a Lost Note Affidavit and Indemnity Agreement, duly
executed by such Purchaser.

    


    (d)          Upon
receipt of the certificate identified in subsection (b) above, the Purchaser
shall deliver or cause to be delivered to the Company such Purchaser’s
Cross-Receipt, duly executed by such Purchaser.

     

    2.3         
Closing
Conditions.

     

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

     

    (i)          
the accuracy in all material respects on the Closing Date of the representations
and warranties of the Purchasers contained herein (unless as of a specific date
therein);

     

    (ii)          all
obligations, covenants and agreements of each Purchaser required to be performed
at or prior to the Closing Date shall have been performed; and

     

    (iii)         the
delivery by each Purchaser of the items set forth in Sections 2.2(c) and
(d) of this Agreement.

     

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

     

    (i)          
the accuracy in all material respects when made and on the Closing Date of the
representations and warranties of the Company contained herein (unless as of a
specific date therein);

     

    (ii)         
all obligations, covenants and agreements of the Company required to be
performed at or prior to the Closing Date shall have been performed;
and

     

    (iii)         the
delivery by the Company of the items set forth in Sections 2.2(a) and
(b) of this Agreement.

     

    ARTICLE
3

    REPRESENTATIONS
AND WARRANTIES

     

    3.1          Representations and
Warranties of the Company.  Except as set forth in the Disclosure Schedules,
which Disclosure Schedules shall be deemed a part hereof and shall qualify any
representation otherwise made herein to the extent of the disclosure contained
in the corresponding section of the Disclosure Schedules, the Company hereby
makes the following representations and warranties to each
Purchaser:


    
      
         


      

      
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    EXHIBIT
10.1

    


    (a)           Subsidiaries.  GoldSpring,
LLC, The Plum Mining Company, LLC, and the Plum Mine Special Purpose Company LLC
(collectively, the “Subsidiaries,” and
each a “Subsidiary”) are the
only direct or indirect subsidiaries of the Company.  The Company
owns, directly or indirectly, all of the capital stock or other equity interests
of each Subsidiary free and clear of any Liens, other than Liens incurred in
connection with the Existing Promissory Notes and which shall be discharged at
the Closing of the transactions contemplated hereunder, and all of the issued
and outstanding shares of capital stock of each Subsidiary are validly issued
and are fully paid, non-assessable and free of preemptive and similar rights to
subscribe for or purchase securities.

     

    (b)           Organization and
Qualification.  The Company and each of the Subsidiaries is an
entity duly incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization, with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently
conducted.  Neither the Company nor any Subsidiary is in violation or
default of any of the material provisions of its respective certificate or
articles of incorporation, bylaws or other organizational or charter
documents.  Each of the Company and the Subsidiaries is duly qualified
to conduct business and is in good standing as a foreign corporation or other
entity in each jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, could not
have or reasonably be expected to result in: (i) a material adverse effect on
the legality, validity or enforceability of any Transaction Document, (ii) a
material adverse effect on the results of operations, assets, business,
prospects or condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole, or (iii) a material adverse effect on the
Company’s ability to perform in any material respect on a timely basis its
obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse
Effect”) and no Proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing or seeking to revoke, limit or curtail such
power and authority or qualification.

    


    (c)           Authorization;
Enforcement.  The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by each
of the Transaction Documents and otherwise to carry out its obligations
hereunder and thereunder.  The execution and delivery of each of the
Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary action on the part of the Company and no further action is required by
the Company, the Board of Directors or the Company’s stockholders in connection
therewith.  Each Transaction Document to which it is a party has been
(or upon delivery will have been) duly executed by the Company and, when
delivered in accordance with the terms hereof and thereof, will constitute the
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except: (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable
law.


    
      
         


      

      
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    EXHIBIT
10.1

    


    (d)           No
Conflicts.  The execution, delivery and performance by the
Company of the Transaction Documents, the issuance and sale of the Securities
and the consummation by it of the transactions contemplated hereby and thereby
to which it is a party do not and will not: (i) conflict with or violate any
provision of the Company’s or any Subsidiary’s certificate or articles of
incorporation, bylaws or other organizational or charter documents, (ii)
conflict with, or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, result in the creation of any Lien
upon any of the properties or assets of the Company or any Subsidiary, or give
to others any rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any agreement, credit
facility, debt or other instrument (evidencing a Company or Subsidiary debt or
otherwise) or other understanding to which the Company or any Subsidiary is a
party or by which any property or asset of the Company or any Subsidiary is
bound or affected, or (iii) subject to the Required Approvals, conflict with or
result in a violation of any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or governmental authority to which the
Company or a Subsidiary is subject (including federal and state securities laws
and regulations), or by which any property or asset of the Company or a
Subsidiary is bound or affected; except in the case of each of clauses (ii) and
(iii), such as
could not have or reasonably be expected to result in a Material Adverse
Effect.

     

    (e)           Filings, Consents and
Approvals.  The Company is not required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents, other
than: (i) the filings required pursuant to Section 4.5 of this
Agreement, (ii) the filings with the Commission pursuant to the Registration
Rights Agreement, (iii) the notice and/or application(s) to each applicable
Trading Market for the issuance and sale of the Preferred Stock and the listing
of the Underlying Shares for trading thereon in the time and manner required
thereby, and (iv) the filing of Form D with the Commission and such filings as
are required to be made under applicable state securities laws (collectively,
the “Required
Approvals”).

    


    (f)           
Issuance of the
Securities.  The Securities are duly authorized and, when
issued and paid for in accordance with the applicable Transaction Documents,
will be duly and validly issued, fully paid and nonassessable, free and clear of
all Liens imposed by the Company other than restrictions on transfer provided
for in the Transaction Documents.  The Underlying Shares, when issued
in accordance with the terms of the Transaction Documents, will be validly
issued, fully paid and nonassessable, free and clear of all Liens imposed by the
Company other than restrictions on transfer provided for in the Transaction
Documents.  The Company has reserved from its duly authorized capital
stock a number of shares of Common Stock for issuance of the Underlying Shares
at least equal to 100% of the shares of Common Stock initially issuable upon
conversion of the Preferred Stock issuable hereunder.

     

    (g)           Capitalization.  The
capitalization of the Company is as set forth on Schedule 3.1(g),
which Schedule
3.1(g) also includes the number of shares of Common Stock owned
beneficially, and of record, by Affiliates of the Company as of the date
hereof.  No Person has any right of first refusal, preemptive right,
right of participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents.  Except as a result of the
purchase and sale of the Securities or as set forth in Schedule 3.1(g) or in
the SEC Reports, there are no outstanding options, warrants, scrip rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities, rights or obligations convertible into or exercisable or
exchangeable for, or giving any Person any right to subscribe for or acquire any
shares of Common Stock, or contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may become bound to
issue additional shares of Common Stock or Common Stock
Equivalents.  The issuance and sale of the Securities will not
obligate the Company to issue shares of Common Stock or other securities to any
Person (other than the Purchasers) and will not result in a right of any holder
of Company securities to adjust the exercise, conversion, exchange or reset
price under any of such securities.  All of the outstanding shares of
capital stock of the Company are validly issued, fully paid and nonassessable,
have been issued in compliance with all federal and state securities laws, and
none of such outstanding shares was issued in violation of any preemptive rights
or similar rights to subscribe for or purchase securities.  No further
approval or authorization of any stockholder, the Board of Directors or others
is required for the issuance and sale of the Securities.  There are no
stockholders agreements, voting agreements or other similar agreements with
respect to the Company’s capital stock to which the Company is a party or, to
the knowledge of the Company, between or among any of the Company’s
stockholders.


    
      
         


      

      
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    EXHIBIT
10.1

    


    (h)           SEC Reports; Financial
Statements.  The Company has filed all quarterly and annual
reports required to be filed by the Company under the Exchange Act for the three
(3) years preceding the date hereof (the foregoing materials, including the
exhibits thereto and documents incorporated by reference therein, being
collectively referred to herein as the “SEC Reports”) on a
timely basis or has received a valid extension of such time of filing and has
filed any such SEC Reports prior to the expiration of any such
extension.  As of their respective dates, the SEC Reports complied in
all material respects with the requirements of the Securities Act and the
Exchange Act, as applicable, and none of the SEC Reports, when filed, contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.  The financial statements of the Company included in the SEC
Reports comply in all material respects with applicable accounting requirements
and the rules and regulations of the Commission with respect thereto as in
effect at the time of filing.  Such financial statements have been
prepared in accordance with United States generally accepted accounting
principles applied on a consistent basis during the periods involved (“GAAP”), except as may
be otherwise specified in such financial statements or the notes thereto and
except that unaudited financial statements may not contain all footnotes
required by GAAP, and fairly present in all material respects the financial
position of the Company and its consolidated Subsidiaries as of and for the
dates thereof and the results of operations and cash flows for the periods then
ended, subject, in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments.

     

    (i)
           Material Changes;
Undisclosed Events, Liabilities or Developments. Except as set forth on
Schedule 3.1(i)
or the SEC Reports, since the date of the latest audited financial statements
included within the SEC Reports: (i) there has been no event, occurrence or
development that has had or that could reasonably be expected to result in a
Material Adverse Effect, (ii) the Company has not incurred any liabilities
(contingent or otherwise) other than (a) trade payables and accrued expenses
incurred in the ordinary course of business consistent with past practice and
(b) liabilities not required to be reflected in the Company’s financial
statements pursuant to GAAP or disclosed in filings made with the Commission,
(iii) the Company has not altered its method of accounting, (iv) the Company has
not declared or made any dividend or distribution of cash or other property to
its stockholders or purchased, redeemed or made any agreements to purchase or
redeem any shares of its capital stock and (v) the Company has not issued any
equity securities to any officer, director or Affiliate, except pursuant to
existing Company stock option plans.  The Company does not have
pending before the Commission any request for confidential treatment of
information.  Except for the issuance of the Securities contemplated
by this Agreement or as set forth on Schedule 3.1(i), no
event, liability, fact, circumstance, occurrence or development has occurred or
exists or is reasonably expected to occur or exist with respect to the Company
or its Subsidiaries or their respective business, properties, operations, assets
or financial condition, that would be required to be disclosed by the Company
under applicable securities laws at the time this representation is made or
deemed made that has not been publicly disclosed at least one (1) Trading Day
prior to the date that this representation is made.

    


    (j)
          Private Placement.
Assuming the accuracy of the Purchasers’ representations and warranties set
forth in Section
3.2, no registration under the Securities Act is required for the offer
and sale of the Securities by the Company to the Purchasers as contemplated
hereby.  The issuance and sale of the Securities hereunder does not
contravene the rules and regulations of the Trading Market.


    
      
         


      

      
        9

        
          

        

      

      
         


      

    


    EXHIBIT
10.1

    


    (k)  
        No Integrated
Offering. Assuming the accuracy of the Purchasers’ representations and
warranties set forth in Section 3.2, neither
the Company, nor any of its Affiliates, nor any Person acting on its or their
behalf has, directly or indirectly, made any offers or sales of any security or
solicited any offers to buy any security, under circumstances that would cause
this offering of the Securities to be integrated with prior offerings by the
Company for purposes of (i) the Securities Act which would require the
registration of any such securities under the Securities Act, or (ii) any
applicable stockholder approval provisions of any Trading Market on which any of
the securities of the Company are listed or designated.

     

    (l) 
          No General
Solicitation.  Neither the Company nor any person acting on
behalf of the Company has offered or sold any of the Securities by any form of
general solicitation or general advertising.  The Company has offered
the Securities for sale only to the Purchasers and certain other “accredited
investors” within the meaning of Rule 501 under the Securities Act.

    


    (m)          Litigation.  There
is no action, suit, inquiry, notice of violation, proceeding or investigation
pending or, to the knowledge of the Company, threatened against or affecting the
Company, any Subsidiary or any of their respective properties before or by any
court, arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an “Action”) which (i)
adversely affects or challenges the legality, validity or enforceability of any
of the Transaction Documents or the Securities or (ii) could, if there were an
unfavorable decision, have or reasonably be expected to result in a Material
Adverse Effect.  There has not been, and to the knowledge of the
Company, there is not pending or contemplated, any investigation by the
Commission involving the Company or any current or former director or officer of
the Company.  The Commission has not issued any stop order or other
order suspending the effectiveness of any registration statement filed by the
Company or any Subsidiary under the Exchange Act or the Securities
Act.

    


    (n)           Compliance.  Neither
the Company nor any Subsidiary: (i) is in default under or in violation of (and
no event has occurred that has not been waived that, with notice or lapse of
time or both, would result in a default by the Company or any Subsidiary under),
nor has the Company or any Subsidiary received notice of a claim that it is in
default under or that it is in violation of, any indenture, loan or credit
agreement or any other agreement or instrument to which it is a party or by
which it or any of its properties is bound (whether or not such default or
violation has been waived), except as described in the SEC Reports or as set
forth in Schedule
3.1(n) hereto, (ii) is in violation of any judgment, decree or order of
any court, arbitrator or governmental body or (iii) is or has been in violation
of any statute, rule, ordinance or regulation of any governmental authority,
including without limitation all foreign, federal, state and local laws relating
to taxes, environmental protection, occupational health and safety, product
quality and safety and employment and labor matters, except in each case as
could not have or reasonably be expected to result in a Material Adverse
Effect.

    


    (o)           Title to
Assets.  Except as set forth in the SEC Reports, the Company
and the Subsidiaries have good and marketable title in fee simple to all real
property owned by them and good and marketable title in all personal property
owned by them that is material to the business of the Company and the
Subsidiaries, in each case free and clear of all Liens, except for Liens as do
not materially affect the value of such property and do not materially interfere
with the use made and proposed to be made of such property by the Company and
the Subsidiaries and Liens for the payment of federal, state or other taxes, the
payment of which is neither delinquent nor subject to penalties.  Any
real property and facilities held under lease by the Company and the
Subsidiaries are held by them under valid, subsisting and enforceable leases
with which the Company and the Subsidiaries are in compliance.


    
      
         


      

      
        10

        
          

        

      

      
         


      

    


    EXHIBIT
10.1

    


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

    


    (q)           Tax
Status.  Except for matters that would not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect, the Company and each Subsidiary (i) has made or filed all required
United States federal and state income and all foreign income and franchise tax
returns (or extension requests related thereto), reports and declarations
required by any jurisdiction to which it is subject, (ii) has paid all taxes and
other governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations and (iii) has set
aside on its books provision reasonably adequate for the payment of all material
taxes for periods subsequent to the periods to which such returns, reports or
declarations apply.  There are no unpaid taxes in any material amount
claimed to be due by the taxing authority of any jurisdiction, and the officers
of the Company or of any Subsidiary know of no basis for any such
claim.

     

    3.2          Representations and
Warranties of the Purchasers.  Each Purchaser, for itself and
for no other Purchaser, severally and not jointly, hereby represents and
warrants as of the date hereof and as of the Closing Date to the Company as
follows (unless as of a specific date therein):

     

    (a)           Organization;
Authority.  Such Purchaser is either an individual or an entity
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with full right, corporate or other power and
authority to enter into and to consummate the transactions contemplated by the
Transaction Documents and otherwise to carry out its obligations hereunder and
thereunder.  The execution and delivery of the Transaction Documents
and performance by such Purchaser of the transactions contemplated by the
Transaction Documents have been duly authorized by all necessary corporate,
partnership, limited liability company or similar action, as applicable, on the
part of such Purchaser.  Each Transaction Document to which it is a
party has been duly executed by such Purchaser, and when delivered by such
Purchaser in accordance with the terms hereof, will constitute the valid and
legally binding obligation of such Purchaser, enforceable against it in
accordance with its terms, except: (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies, and (iii) insofar as
indemnification and contribution provisions may be limited by applicable
law.  If the Purchaser(s) is a corporation, trust, partnership or
other entity that is not an individual person, it has not been organized for the
specific purpose of purchasing the Securities and is not prohibited from doing
so.


    
      
         


      

      
        11

        
          

        

      

      
         


      

    


    EXHIBIT
10.1

    


    (b)           Own
Account.  Such Purchaser understands that the Securities are
“restricted securities” and have not been registered under the Securities Act or
any applicable state securities law and is acquiring the Securities as principal
for its own account and not with a view to or for distributing or reselling such
Securities or any part thereof in violation of the Securities Act or any
applicable state securities law, has no present intention of distributing any of
such Securities in violation of the Securities Act or any applicable state
securities law and has no direct or indirect arrangement or understandings with
any other persons to distribute or regarding the distribution of such Securities
in violation of the Securities Act or any applicable state securities law (this
representation and warranty not limiting such Purchaser’s right to sell the
Securities pursuant to the Registration Statement or otherwise in compliance
with applicable federal and state securities laws).  Such Purchaser is
acquiring the Securities hereunder in the ordinary course of its
business.

    


    (c)           Purchaser
Status.  At the time such Purchaser was offered the Securities,
it was, and as of the date hereof it is, and on each date on which it converts
any shares of Preferred Stock, it will be either: (i) an “accredited investor”
as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the
Securities Act or (ii) a “qualified institutional buyer” as defined in Rule
144A(a) under the Securities Act.  Such Purchaser is not required to
be registered as a broker-dealer under Section 15 of the Exchange
Act.

     

    (d)           Experience of Such
Purchaser.  Such Purchaser, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Securities, and has so evaluated the merits
and risks of such investment.  Such Purchaser is able to bear the
economic risk of an investment in the Securities and, at the present time, is
able to afford a complete loss of such investment.

     

    (e)           Reliance on
Exemptions.  Each Purchaser understands that the Securities are
being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of, and such
Purchaser’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Purchaser set forth herein in order
to determine the availability of such exemptions and the eligibility of such
Purchaser to acquire the Securities.  Each Purchaser understands that
no United States federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the
Securities, or the fairness or suitability of the investment in the Securities,
nor have such authorities passed upon or endorsed the merits of the offering of
the Securities.

     

    (f) 
         General
Solicitation.  Such Purchaser is not purchasing the Securities
as a result of any advertisement, article, notice or other communication
regarding the Securities published in any newspaper, magazine or similar media
or broadcast over television or radio or presented at any seminar or any other
general solicitation or general advertisement.

    


    (g)           Representations of
Purchasers.  Each Purchaser solely owns all right, title and
interest in and to its respective Existing Promissory Note(s) and has not
conveyed any interest or other right in any such Existing Promissory Note to any
other Person or otherwise subjected, or allowed to be subjected, such Existing
Promissory Note to any lien or other encumbrance.  The transactions
contemplated by this Agreement will result in the full and complete release and
satisfaction of any and all obligations of the Company with respect to each
Purchaser’s Existing Promissory Note(s).  The Existing Promissory
Note(s) being tendered by each Purchaser to the Company pursuant to this
Agreement are the only promissory notes or other debt obligations of the Company
to such Purchaser.


    
      
         


      

      
        12

        
          

        

      

      
         


      

    


    EXHIBIT
10.1

    


    (h)           No Legal Advice From the
Company; Sole Representations in Agreement.  Each Purchaser
acknowledges that it had the opportunity to review this Agreement and the
transactions contemplated by this Agreement with his or its own legal counsel
and investment and tax advisors.  Each Purchaser is relying solely on
such counsel and advisors and not on any statements or representations of the
Company or any of its representatives or agents for legal, tax or investment
advice with respect to this investment, the transactions contemplated by this
Agreement or the securities laws of any jurisdiction.  Each Purchaser
acknowledges that the only representations being made by the Company in
connection with the transactions contemplated by this Agreement are set forth in
this Article
III and that in connection with its decision to enter into the
transactions contemplated by this Agreement, it is relying only on such
representations in this Article III and the SEC Reports, and not on any other
statements or representations of the Company or any of its representatives or
agents.

     

    (i)
           Each Purchaser
acknowledges, by its execution of this Agreement, that its obligations hereunder
are irrevocable.

    


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

     

    ARTICLE
4

    OTHER
AGREEMENTS OF THE PARTIES

     

    4.1  
        Transfer
Restrictions.

     

    (a)           The
Securities may only be disposed of in compliance with state and federal
securities laws.  In connection with any transfer of Securities other
than pursuant to an effective registration statement or Rule 144, to the Company
or to an Affiliate of a Purchaser or in connection with a pledge as contemplated
in Section
4.1(b), the Company may require the transferor thereof to provide to the
Company an opinion of counsel selected by the transferor and reasonably
acceptable to the Company, the form and substance of which opinion shall be
reasonably satisfactory to the Company, to the effect that such transfer does
not require registration of such transferred Securities under the Securities
Act.  As a condition of transfer, any such transferee shall agree in
writing to be bound by the terms of this Agreement and shall have the rights and
obligations of a Purchaser under this Agreement.

    


    (b) 
         The Purchasers agree to
the imprinting, so long as is required by this Section 4.1, of a
legend on any of the Securities in the following form:

     

    NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAS
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A
REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN
“ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR
OTHER LOAN SECURED BY SUCH SECURITIES.


    
      
         


      

      
        13

        
          

        

      

      
         


      

    


    EXHIBIT
10.1

    


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

    


    (c)           Certificates
evidencing the Underlying Shares shall not contain any legend (including the
legend set forth in Section 4.1(b)
hereof): (i) while a registration statement covering the resale of such security
is effective under the Securities Act, (ii) following any sale of such
Underlying Shares pursuant to Rule 144, (iii) if such Underlying Shares are
eligible for sale under Rule 144, without the requirement for the Company to be
in compliance with the current public information required under Rule 144 as to
such Underlying Shares and without volume or manner-of-sale restrictions or (iv)
if such legend is not required under applicable requirements of the Securities
Act (including judicial interpretations and pronouncements issued by the staff
of the Commission).  The Company shall cause its counsel to issue a
legal opinion to the Transfer Agent promptly after the Effective Date if
required by the Transfer Agent to effect the removal of the legend
hereunder.  If all or any shares of Preferred Stock are converted at a
time when there is an effective registration statement to cover the resale of
the Underlying Shares, or if such Underlying Shares may be sold under Rule 144
and the Company is then in compliance with the current public information
required under Rule 144, or if the Underlying Shares may be sold under Rule 144
without the requirement for the Company to be in compliance with the current
public information required under Rule 144 as to such Underlying Shares and
without volume or manner-of-sale restrictions or if such legend is not otherwise
required under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the Commission), then
such Underlying Shares shall be issued free of all legends.  The
Company agrees that following the Effective Date or at such time as such legend
is no longer required under this Section 4.1(c), it
will, no later than three Trading Days following the delivery by a Purchaser to
the Company or the Transfer Agent of a certificate representing Underlying
Shares, as applicable, issued with a restrictive legend, deliver or cause to be
delivered to such Purchaser a certificate representing such shares that is free
from all restrictive and other legends.  The Company may not make any
notation on its records or give instructions to the Transfer Agent that enlarge
the restrictions on transfer set forth in this Section
4.1(c).  Certificates for Underlying Shares subject to legend
removal hereunder shall be transmitted by the Transfer Agent to the Purchaser by
crediting the account of the Purchaser’s prime broker with the Depository Trust
Company System as directed by such Purchaser.

     

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


    
      
         


      

      
        14

        
          

        

      

      
         


      

    


    EXHIBIT
10.1

    


    4.2   
       Furnishing of
Information.  Until the time that no Purchaser owns any
Securities, the Company covenants to maintain the registration of the Common
Stock under Section 12(b) or 12(g) of the Exchange Act and to timely file (or
obtain extensions in respect thereof and file within the applicable grace
period) all reports required to be filed by the Company after the date hereof
pursuant to the Exchange Act even if the Company is not then subject to the
reporting requirements of the Exchange Act.  As long as any Purchaser
owns any Securities, if the Company is not required to file reports pursuant to
the Exchange Act, it will prepare and furnish to the Purchasers and make
publicly available in accordance with Rule 144(c) such information as is
required for the Purchasers to sell the Securities, including without
limitation, under Rule 144.  The Company further covenants that it
will take such further action as any holder of Securities may reasonably
request, to the extent required from time to time to enable such Person to sell
such Securities without registration under the Securities Act, including without
limitation, within the requirements of the exemption provided by Rule
144.  With regard to the Securities purchased relating to the
Purchasers’ Existing Debt Amount owed by the Plum Mine Special Purpose Company
LLC, as evidenced by the Existing Promissory Notes issued by the Plum Mine
Special Purpose Company, the Company
represents that it has been advised by counsel that, if the Purchasers sought to
transfer such Securities immediately after the Closing, such Securities would be
eligible for tacking under Rule 144.

    


    4.3    
      Integration.  The
Company shall not sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that would be integrated with the offer or sale of the Securities in a
manner that would require the registration under the Securities Act of the sale
of the Securities or that would be integrated with the offer or sale of the
Securities for purposes of the rules and regulations of any Trading Market such
that it would require stockholder approval prior to the closing of such other
transaction unless stockholder approval is obtained before the closing of such
subsequent transaction.

     

    4.4     
     Conversion
Procedure.  The form of Notice of Conversion included in the
Series A-1 Certificate of Designation or the Series A-2 Certificate of
Designation (as applicable) sets forth the totality of the procedures required
of the Purchasers in order to convert the Preferred Stock.  No
additional legal opinion, other information or instructions shall be required of
the Purchasers to convert their Preferred Stock.  The Company shall
honor conversions of the Preferred Stock and shall deliver Underlying Shares in
accordance with the terms, conditions and time periods set forth in the
Transaction Documents.

     

    4.5     
     Securities Laws Disclosure;
Publicity.  The Company shall, in accordance with applicable
federal securities law, issue a Current Report on Form 8-K and press release
disclosing the material terms of the transactions contemplated hereby, and
including the Transaction Documents as exhibits thereto.  From and
after the issuance of such press release, the Company shall have publicly
disclosed all material, non-public information delivered to any of the
Purchasers by the Company or any of its subsidiaries, or any of their respective
officers, directors, employees or agents in connection with the transactions
contemplated by the Transaction Documents. The Company and each Purchaser shall
consult with each other in issuing any other press releases with respect to the
transactions contemplated hereby, and neither the Company nor any Purchaser
shall issue any such press release nor otherwise make any such public statement
without the prior consent of the Company, with respect to any press release of
any Purchaser, or without the prior consent of each Purchaser, with respect to
any press release of the Company, which consent shall not unreasonably be
withheld or delayed, except if such disclosure is required by law, in which case
the disclosing party shall promptly provide the other party with prior notice of
such public statement or communication.  Notwithstanding the
foregoing, the Company shall not publicly disclose the name of any Purchaser, or
include the name of any Purchaser in any filing with the Commission or any
regulatory agency or Trading Market, without the prior written consent of such
Purchaser, except: (a) as required by federal securities law in connection with
(i) any registration statement contemplated by the Registration Rights Agreement
and (ii) the filing of final Transaction Documents (including signature pages
thereto) with the Commission; and (b) to the extent such disclosure is required
by law or Trading Market regulations, in which case the Company shall provide
the Purchasers with prior notice of such disclosure permitted under this Section
4.5.


    
      
         


      

      
        15

        
          

        

      

      
         


      

    


    EXHIBIT
10.1

    


    4.6    
      Indemnification of
Purchasers.   Subject to the provisions of this Section 4.6, the
Company will indemnify and hold each Purchaser and its directors, officers,
shareholders, members, partners, employees and agents (and any other Persons
with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title), each Person who
controls such Purchaser (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title) of such controlling persons (each, a
“Purchaser
Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any such Purchaser Party may suffer or incur as a
result of or relating to any breach of any of the representations, warranties,
covenants or agreements made by the Company in this Agreement or in the other
Transaction Documents.  The indemnification required by this Section 4.6 shall be
made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or are
incurred.

     

    4.7       
   Reservation and Listing of
Securities.

     

    (a)           The
Company shall maintain a reserve from its duly authorized shares of Common Stock
for issuance pursuant to the Transaction Documents in such amount as may then be
required to fulfill its obligations in full under the Transaction
Documents.

     

    (b)           If,
on any date, the number of authorized but unissued (and otherwise unreserved)
shares of Common Stock and/or Preferred Stock is less than 130% of (i) the
Required Minimum on such date, minus (ii) the number of shares of Common Stock
or Preferred Stock (as applicable) previously issued pursuant to the Transaction
Documents, then the Board of Directors shall use commercially reasonable efforts
to amend the Company’s certificate or articles of incorporation to increase the
number of authorized but unissued shares of Common Stock and/or Preferred Stock
(as applicable) to at least the Required Minimum at such time (minus the number
of shares of Common Stock and/or Preferred Stock (as applicable) previously
issued pursuant to the Transaction Documents), as soon as possible and in any
event not later than the 120th day
after such date; provided that the Company will not be required at any time to
authorize a number of shares of Common Stock and/or Preferred Stock (as
applicable) greater than the maximum remaining number of shares of Common Stock
or Preferred Stock (as applicable) that could possibly be issued after such time
pursuant to the Transaction Documents.

    


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


    
      
         


      

      
        16

        
          

        

      

      
         


      

    


    EXHIBIT
10.1

    


    4.8  
        Participation in Future
Financing.

     

    (a)           From
the date hereof until such time as the Purchasers no longer hold any shares of
Preferred Stock, upon any issuance by the Company or any of its Subsidiaries of
Common Stock, Common Stock Equivalents for cash consideration, or a combination
of units hereof (a “Subsequent
Financing”), each Purchaser shall have the right to participate in up to
an amount of the Subsequent Financing equal to 100% of the Subsequent Financing
(the “Participation
Maximum”) on the same terms, conditions and price provided for in the
Subsequent Financing.

     

    (b)           At
least five (5) Trading Days prior to the closing of the Subsequent Financing,
the Company shall deliver to each Purchaser a written notice of its intention to
effect a Subsequent Financing (“Pre-Notice”), which
Pre-Notice shall ask such Purchaser if it wants to review the details of such
financing (such additional notice, a “Subsequent Financing
Notice”).  Upon the request of a Purchaser, and only upon a
request by such Purchaser, for a Subsequent Financing Notice, the Company shall
promptly, but no later than one (1) Trading Day after such request, deliver a
Subsequent Financing Notice to such Purchaser.  The Subsequent
Financing Notice shall describe in reasonable detail the proposed terms of such
Subsequent Financing, the amount of proceeds intended to be raised thereunder
and the Person or Persons through or with whom such Subsequent Financing is
proposed to be effected and shall include a term sheet or similar document
relating thereto as an attachment.

     

    (c)           Any
Purchaser desiring to participate in such Subsequent Financing must provide
written notice to the Company by not later than 5:30 p.m. (New York City time)
on the fourth (4th)
Trading Day after all of the Purchasers have received the Pre-Notice that the
Purchaser is willing to participate in the Subsequent Financing, the amount of
the Purchaser’s participation, and representing and warranting that the
Purchaser has such funds ready, willing, and available for investment on the
terms set forth in the Subsequent Financing Notice.  If the Company
receives no such notice from a Purchaser as of such fourth (4th)
Trading Day, such Purchaser shall be deemed to have notified the Company that it
does not elect to participate.

     

    (d)           If
by 5:30 p.m. (New York City time) on the fourth (4th) Trading
Day after all of the Purchasers have received the Pre-Notice, notifications by
the Purchasers of their willingness to participate in the Subsequent Financing
(or to cause their designees to participate) is, in the aggregate, less than the
total amount of the Subsequent Financing, then the Company may effect the
remaining portion of such Subsequent Financing on the terms and with the Persons
set forth in the Subsequent Financing Notice.

     

    (e)           If
by 5:30 p.m. (New York City time) on the fourth (4th)
Trading Day after all of the Purchasers have received the Pre-Notice, the
Company receives responses to a Subsequent Financing Notice from Purchasers
seeking to purchase more than the aggregate amount of the Participation Maximum,
each such Purchaser shall have the right to purchase its Pro Rata Portion (as
defined below) of the Participation Maximum.  “Pro Rata Portion” of
a Purchaser means the ratio of: (x) the aggregate Stated Value of the Preferred
Stock issued to such Purchaser on the Closing Date; and (y) the aggregate Stated
Value of the Preferred Stock issued to all Purchasers participating in such
Subsequent Financing under this Section
4.8.

     

    (f)
           The Company
must provide the Purchasers with a second Subsequent Financing Notice, and the
Purchasers will again have the right of participation set forth above in this
Section 4.8, if
the Subsequent Financing subject to the initial Subsequent Financing Notice is
not consummated for any reason on the terms set forth in such Subsequent
Financing Notice within thirty (30) Trading Days after the date of the initial
Subsequent Financing Notice.

     

    (g)           Notwithstanding
the foregoing, this Section 4.8 shall not
apply in respect of (i) an Exempt Issuance or (ii) an underwritten public
offering of Common Stock.


    
      
         


      

      
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    EXHIBIT
10.1

    


    4.9       
   Equal Treatment of
Purchasers.  No consideration (including any modification of
any Transaction Document) shall be offered or paid to any Person to amend or
consent to a waiver or modification of any provision of any of the Transaction
Documents unless the same consideration is also offered to all of the parties to
the Transaction Documents.  For clarification purposes, this provision
constitutes a separate right granted to each Purchaser by the Company and
negotiated separately by each Purchaser, and is intended for the Company to
treat the Purchasers as a class and shall not in any way be construed as the
Purchasers acting in concert or as a group with respect to the purchase,
disposition or voting of Securities or otherwise.

     

    4.10   
     Certain Transactions and
Confidentiality.  Each Purchaser, severally and not jointly
with the other Purchasers, covenants that neither it, nor any Affiliate acting
on its behalf or pursuant to any understanding with it will execute any
purchases or sales, including Short Sales, of any of the Company’s securities
during the period commencing with the execution of this Agreement and ending at
such time that the transactions contemplated by this Agreement are first
publicly announced pursuant to the initial press release as described in Section 4.5. 
Each Purchaser, severally and not jointly with the other Purchasers, covenants
that until such time as the transactions contemplated by this Agreement are
publicly disclosed by the Company pursuant to the initial press release as
described in Section
4.5, such Purchaser will maintain the confidentiality of the existence
and terms of this transaction and the information included in the Transaction
Documents and the Disclosure Schedules.  Notwithstanding the
foregoing, and notwithstanding anything contained in this Agreement to the
contrary, the Company expressly acknowledges and agrees that (i) no Purchaser
makes any representation, warranty or covenant hereby that it will not engage in
effecting transactions in any securities of the Company after the time that the
transactions contemplated by this Agreement are first publicly announced
pursuant to the initial press release as described in Section 4.5, (ii) no
Purchaser shall be restricted or prohibited from effecting any transactions in
any securities of the Company in accordance with applicable securities laws from
and after the time that the transactions contemplated by this Agreement are
first publicly announced pursuant to the initial press release as described in
Section 4.5;
and (iii) no Purchaser shall have any duty of confidentiality to the Company or
its Subsidiaries after the issuance of the initial press release as described in
Section
4.5.  Notwithstanding the foregoing, in the case of a Purchaser that
is a multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Purchaser’s assets and the portfolio managers have no
direct knowledge of the investment decisions made by the portfolio managers
managing other portions of such Purchaser’s assets, the covenant set forth above
shall only apply with respect to the portion of assets managed by the portfolio
manager that made the investment decision to purchase the Securities covered by
this Agreement.

     

    4.11    
    Form D; Blue Sky
Filings.  The Company agrees to timely file a Form D with
respect to the Securities as required under Regulation D and to provide a copy
thereof, promptly upon request of any Purchaser.  The Company shall
take such action as the Company shall reasonably determine is necessary in order
to obtain an exemption for, or to qualify the Securities for, sale to the
Purchasers at the Closing under applicable securities or “Blue Sky” laws of the
states of the United States, and shall provide evidence of such actions promptly
upon request of any Purchaser. 

    


    ARTICLE
5

    MISCELLANEOUS

     

    5.1  
        Fees and
Expenses.  Except as expressly set forth in the Transaction
Documents to the contrary, each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement.  The Company shall pay all
Transfer Agent fees, stamp taxes and other taxes and duties levied in connection
with the delivery of any Securities to the Purchasers.


    
      
         


      

      
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    EXHIBIT
10.1

    


    5.2       
   Entire
Agreement.  The Transaction Documents, together with the
exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and
schedules.

     

    5.3     
     Notices.  Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of: (a) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth on
the signature pages attached hereto prior to 5:30 p.m. (New York City time) on a
Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number set
forth on the signature pages attached hereto on a day that is not a Trading Day
or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second
(2nd)  Trading
Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service or (d) upon actual receipt by the party to whom such
notice is required to be given.  The address for such notices and
communications shall be as set forth on the signature pages attached
hereto.

     

    5.4      
    Amendments;
Waivers.  No provision of this Agreement may be waived,
modified, supplemented or amended except in a written instrument signed, in the
case of an amendment, by the Company and Purchaser(s) holding Existing
Promissory Note(s) representing at least a majority of the aggregate Existing
Debt Amount for all Existing Promissory Notes or, in the case of a waiver, by
the party against whom enforcement of any such waived provision is
sought.  No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any
other provision, condition or requirement hereof, nor shall any delay or
omission of any party to exercise any right hereunder in any manner impair the
exercise of any such right. The parties agree and
acknowledge that this Section 5.4 relates
solely to waivers, modifications, supplements and amendments to this Agreement,
and not to any other Transaction Document.

     

    5.5     
     Headings.  The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.

     

    5.6     
     Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted
assigns.  The Company may not assign this Agreement or any rights or
obligations hereunder without the prior written consent of each Purchaser (other
than by merger).  Any Purchaser may assign any or all of its rights
under this Agreement to any Person to whom such Purchaser assigns or transfers
any Securities, provided that such transferee agrees in writing to be bound,
with respect to the transferred Securities, by the provisions of the Transaction
Documents that apply to the “Purchasers.”

     

    5.7     
     No Third-Party
Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person, except as otherwise set forth in Section 4.9.


    
      
         


      

      
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    EXHIBIT
10.1

    


    5.8       
   Governing
Law.  ALL
QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION
OF THE TRANSACTION DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.  EACH PARTY AGREES THAT
ALL LEGAL PROCEEDINGS CONCERNING THE INTERPRETATIONS, ENFORCEMENT AND DEFENSE OF
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT AND ANY OTHER TRANSACTION
DOCUMENTS (WHETHER BROUGHT AGAINST A PARTY HERETO OR ITS RESPECTIVE AFFILIATES,
DIRECTORS, OFFICERS, SHAREHOLDERS, EMPLOYEES OR AGENTS) SHALL BE COMMENCED
EXCLUSIVELY IN THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW
YORK.  EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE
JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK,
BOROUGH OF MANHATTAN FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED
HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE TRANSACTION
DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT,
ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER
OR IS AN  INCONVENIENT VENUE FOR SUCH PROCEEDING.  EACH
PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO
PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY
THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF
DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS
AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT
SERVICE OF PROCESS AND NOTICE THEREOF.  NOTHING CONTAINED HEREIN SHALL
BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW.  IF EITHER PARTY SHALL COMMENCE AN ACTION OR
PROCEEDING TO ENFORCE ANY PROVISIONS OF THE TRANSACTION DOCUMENTS, THEN, IN
ADDITION TO THE OBLIGATIONS OF THE COMPANY UNDER SECTION 4.6, THE PREVAILING
PARTY IN SUCH ACTION OR PROCEEDING SHALL BE REIMBURSED BY THE OTHER PARTY FOR
ITS REASONABLE ATTORNEYS’ FEES AND OTHER COSTS AND EXPENSES INCURRED WITH THE
INVESTIGATION, PREPARATION AND PROSECUTION OF SUCH ACTION OR
PROCEEDING.

     

    5.9   
       Survival.  The
representations and warranties contained herein shall survive the Closing and
the delivery of the Securities.

     

    5.10  
      Execution.  This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart.  In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof.

     

    5.11    
   Severability.  If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.


    
      
         


      

      
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    EXHIBIT
10.1

    


    5.12  
      Replacement of
Securities.  If any certificate or instrument evidencing any
Securities is mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon cancellation
thereof (in the case of mutilation), or in lieu of and substitution therefor, a
new certificate or instrument, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction.  The
applicant for a new certificate or instrument under such circumstances shall
also pay any reasonable third-party costs (including customary indemnity)
associated with the issuance of such replacement Securities.

     

    5.13
        Remedies.  (a) In
addition to being entitled to exercise all rights provided herein or granted by
law, including recovery of damages, each of the Purchasers and the Company will
be entitled to specific performance under the Transaction
Documents.  The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations contained in the Transaction Documents and hereby agree to waive and
not to assert in any action for specific performance of any such obligation the
defense that a remedy at law would be adequate.

    


    (b)           If
the Company defaults in complying with the covenants set out in Section 4.2
hereof and the Company fails to remedy such default within 30 days after notice
by Purchasers specifying the nature of the default, the Company shall, at its
cost and in the manner described in the Registration Rights Agreement, as
promptly as practicable file with the Commission and thereafter cause to be
declared effective (unless it becomes effective automatically upon filing) on or
prior to the 90th day
after the expiration of such 30 day cure period, a registration statement on an
appropriate form under the Securities Act relating to the offer and sale of the
Underlying Shares; provided, that if the Commission comments on such
registration statement, then the Company shall cause such registration statement
to be declared effective on or prior to the 120th day after the expiration of
such 30 day cure period.

     

    5.14     
   Independent Nature of
Purchasers’ Obligations and Rights.  The obligations of each
Purchaser under any Transaction Document are several and not joint with the
obligations of any other Purchaser, and no Purchaser shall be responsible in any
way for the performance or non-performance of the obligations of any other
Purchaser under any Transaction Document.  Nothing contained herein or
in any other Transaction Document, and no action taken by any Purchaser pursuant
thereto, shall be deemed to constitute the Purchasers as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the
Transaction Documents.  Each Purchaser shall be entitled to
independently protect and enforce its rights, including, without limitation, the
rights arising out of this Agreement or out of the other Transaction Documents,
and it shall not be necessary for any other Purchaser to be joined as an
additional party in any proceeding for such purpose.  The Company has
elected to provide all Purchasers with the same terms and Transaction Documents
for the convenience of the Company and not because it was required or requested
to do so by any of the Purchasers.

     

    5.15  
      Saturdays, Sundays,
Holidays, etc.  If the last or appointed day for the taking of any
action or the expiration of any right required or granted herein shall not be a
Business Day, then such action may be taken or such right may be exercised on
the next succeeding Business Day.

     

    5.16    
    Construction. The
parties agree that each of them and/or their respective counsel has reviewed and
had an opportunity to revise the Transaction Documents and, therefore, the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of the Transaction Documents or any amendments hereto. In addition, each and
every reference to share prices and shares of Common Stock in any Transaction
Document shall be subject to adjustment for reverse and forward stock splits,
stock dividends, stock combinations and other similar transactions of the Common
Stock that occur after the date of this Agreement.


    
      
         


      

      
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    EXHIBIT
10.1

    


    5.17   
    WAIVER OF
JURY TRIAL.  IN ANY ACTION, SUIT, OR
PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE
PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY
APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY
WAIVES FOREVER TRIAL BY JURY.

     

    
      
         


      

      
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