Exhibit 10.1


 


[FORM OF SECURITIES PURCHASE AGREEMENT]


 


SECURITIES PURCHASE AGREEMENT


 


 


This SECURITIES
PURCHASE AGREEMENT (the “Agreement”), dated as of March 21, 2012, is by and among China Shen Zhou Mining
& Resources, Inc., a Nevada corporation with headquarters located at No. 166 Fushi Road, Zeyang Tower, Shijingshan District,
Beijing, China 100043, 86-010-8890-6927 (the ”Company”), and each of the investors listed on the Schedule
of Buyers attached hereto (individually, a “Buyer” and collectively, the “Buyers”).


 


RECITALS


 


A.The Company and
each Buyer desire to enter into this transaction to purchase the Preferred Shares (as defined below) and related Warrants (as defined
below) set forth herein pursuant to a currently effective shelf registration statement on Form S-3, which has at least $10,000,000
of unallocated securities, including common stock, $0.001 par value per share, of the Company (the “Common Stock”),
preferred stock, $0.001 par value per share (the “Preferred Stock”) and warrants registered thereunder (Registration
Number 333-171243) (the “Registration Statement”), which Registration Statement has been declared effective
in accordance with the Securities Act of 1933, as amended (the “1933 Act”), by the United States Securities
and Exchange Commission (the “SEC”).


 


B.The Company has
authorized a new series of convertible preferred stock of the Company designated as Series A Convertible Preferred Stock, $0.001
par value, the terms of which are set forth in the certificate of designation for such series of Preferred Stock (the “Certificate
of Designations”) in the form attached hereto as Exhibit A (together with any convertible preferred shares issued
in replacement thereof in accordance with the terms thereof, the “Preferred Shares”), which Preferred Shares
shall be convertible into Common Stock (as converted, the “Conversion Shares”), in accordance with the terms
of the Certificate of Designations.


 


C.Each Buyer wishes
to purchase, and the Company wishes to sell, at the Initial Closing (as defined below) upon the terms stated in this Agreement,
(i) the aggregate number of Preferred Shares set forth opposite such Buyer’s name in column (3) on the Schedule of Buyers
(which aggregate amount for all Buyers shall be 5,000 Preferred Shares and shall collectively be referred to herein as the “Initial
Preferred Shares”), and (ii) a warrant to initially acquire up to the aggregate number of shares of Common Stock set
forth opposite such Buyer’s name in column (4) on the Schedule of Buyers, in the form attached hereto as Exhibit A
(the “Warrants”) (as exercised, collectively, the “Warrant Shares”).


 


D.Subject to the
satisfaction of certain additional terms and conditions set forth in this Agreement, each Buyer wishes to purchase, and the Company
wishes to sell, at one or more Additional Closings (as defined below) upon the terms stated in this Agreement, the aggregate number
of Preferred Shares set forth opposite such Buyer’s name in column (5) on the Schedule of Buyers (which aggregate amount
for all Buyers shall 5,000 Preferred Shares and shall collectively be referred to herein as the “Additional Preferred
Shares”).


 






    	 



    	 



    
 


 


D.The Preferred
Shares may be entitled to dividends and certain other amounts, which, at the option of the Company and subject to certain conditions,
may be paid in shares of Common Stock (the “Dividend Shares”) or in cash.


 


E.The Preferred
Shares, the Conversion Shares, the Dividend Shares, the Warrants and the Warrant Shares are collectively referred to herein as
the “Securities.”


 


AGREEMENT


 


NOW, THEREFORE, in
consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Company and each Buyer hereby agree as follows:


 


		1.	PURCHASE AND SALE OF PREFERRED SHARES AND WARRANTS.



 


		(a)	Preferred Shares and Warrants.



  


(i)The
Company shall issue and sell to each Buyer, and each Buyer severally, but not jointly, shall purchase from the Company on the Initial
Closing Date (as defined below), the aggregate number of Initial Preferred Shares, as is set forth opposite such Buyer’s
name in column (3) on the Schedule of Buyers, along with an Warrant to initially acquire up to the aggregate number of Warrant
Shares as is set forth opposite such Buyer’s name in column (4) on the Schedule of Buyers.


 


(ii)Subject
to the satisfaction (or waiver) of the conditions set forth in Sections 1(b)(ii) below, the Company shall issue and sell to each
Buyer, and each Buyer severally, but not jointly, shall purchase from the Company on the Additional Closing Date (as defined below),
the aggregate number of Additional Preferred Shares, as is set forth opposite such Buyer’s name in column (5) on the Schedule
of Buyers.


 


(b)     Closings. The Initial Closing and each
Additional Closing are each individually referred to in this Agreement as a “Closing”. Each Closing shall
occur at the offices of Greenberg Traurig, LLP, MetLife Building, 200 Park Avenue, New York, NY 10166.


 


(i)Initial
Closing. The date and time of the Initial Closing (the “Initial Closing Date”) shall be 10:00 a.m., New
York time, on the third (3rd) Trading Day (as defined in the Warrants) after the date hereof (or such earlier date as
is mutually agreed to by the Company and each Buyer).


 


(ii)Additional
Closing Date. The date and time of any Additional Closing (each, “Additional Closing Date,” and the Initial
Closing Date and any Additional Closing Date, each, a “Closing Date”) shall be 10:00 a.m., New York time, subject
to satisfaction (or waiver) of the conditions to such Additional Closing, on the date that is set forth in the applicable Additional
Closing Notice (or such later other date as is mutually agreed to by the Company and the applicable Buyers).


 






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(iii)Additional
Closing Mechanics. Each Buyer, at an “Optional Additional Closing”, may purchase, at such Buyer’s option,
such aggregate number of Additional Preferred Shares, as is set forth opposite such Buyer’s name in column (5) on the Schedule
of Buyers, by delivery of written notice to the Company (an “Optional Additional Closing Notice” and
the date such Optional Additional Closing Notice has been delivered to the Company (or deemed to be delivered to the Company),
the “Optional Additional Closing Notice Date”) at any time during the period commencing on the Initial Closing
Date and ending on the one year anniversary of the Initial Closing Date; provided, that each Optional Additional Closing Notice
shall be irrevocable and each Buyer may only exercise such right once. No later than the first (1st) Business Day after
the Company’s receipt of an Optional Additional Closing Notice from a Buyer, the Company shall deliver a copy of such Optional
Additional Closing Notice to each other Buyer and, if any such other Buyer elects to deliver an Optional Additional Closing Notice
prior to Additional Closing Date with respect to such initial Optional Additional Closing Notice, such Buyer may also elect to
participate in such Additional Closing with respect to such Buyer’s Optional Additional Closing Notice and have such Buyer’s
Optional Additional Closing Notice be deemed to be delivered to the Company on the Optional Additional Closing Notice Date of such
initial Optional Additional Closing Notice. In addition to the foregoing, at any time prior to the four month anniversary of the
Initial Closing Date, the Company may force a “Mandatory Additional Closing” (and together with any Optional
Additional Closing, each an “Additional Closing,”) if (x) the Company obtains the Shareholder Approval (as defined
below), (y) with respect to such proposed Mandatory Additional Closing, each and every representation and warranty of the Company
set forth in Section 3 of this Agreement is true and correct in all material respects (other than representations and warranties
that are already qualified by materiality or Material Adverse Effect which shall be true and correct in all respects) as of the
date when made and as of the Mandatory Additional Closing Notice Date (as defined below) as though originally made as of the Mandatory
Additional Closing Notice Date (except for representations and warranties that speak as of a specific date, which shall be true
and correct as of such specific date), and the Company shall have performed, satisfied and complied in all material respects with
the covenants, agreements and conditions required to be performed, satisfied or complied with by the Company in accordance herewith
at or prior to the Mandatory Additional Closing Notice Date and (z) no Equity Conditions Failure (as defined in the Certificate
of Designations) exists as of the date Mandatory Additional Closing Notice Date, as evidenced by a written certificate of an executive
officer of the Company and such other evidence as reasonably requested by any Buyer. In such Mandatory Additional Closing, the
Company shall have the right to require each Buyer to purchase such aggregate number of Additional Preferred Shares as is set forth
opposite such Buyer’s name in column (5) on the Schedule of Buyers, by delivering written notice to each Buyer (each, a “Mandatory
Additional Closing Notice”, and together with the Optional Additional Closing Notice, each an “Additional Closing
Notice”, and the date such Mandatory Additional Closing Notice has been delivered to the Buyers, the “Mandatory
Additional Closing Notice Date”); provided, that if the Company elects to deliver a Mandatory Additional Closing Notice
to any Buyer, it must deliver a Mandatory Additional Closing Notice to all Buyers. Any Mandatory Additional Closing Notice delivered
by the Company shall be irrevocable and the Company may only exercise such right once. Each Additional Closing Notice shall set
forth (i) the proposed Additional Closing Date, which shall be three (3) Business Days following the Mandatory Additional Closing
Notice Date or Optional Additional Closing Notice Date, as applicable (or such other date as is mutually agreed to by the Company
and the applicable Buyer (or Buyers)), (ii) the aggregate number of Additional Preferred Shares to be purchased by the applicable
Buyer (or Buyers) at the applicable Additional Closing and (iii) the aggregate Additional Purchase Price for the Additional Preferred
Shares to be purchased. As used herein, “Business Day” means any day other than Saturday, Sunday or other day
on which commercial banks in The City of New York are authorized or required by law to remain closed.


 






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(c)Purchase
Price.


 


(i)Initial
Purchase Price. The aggregate purchase price for the Initial Preferred Shares and the Warrants to be purchased by each Buyer
at the Initial Closing (the “Initial Purchase Price”) shall be the amount set forth opposite such Buyer’s
name in column (6) on the Schedule of Buyers.


 


(ii)Additional
Purchase Price. The aggregate purchase price for the Additional Preferred Shares to be purchased by each Buyer at the Additional
Closing (the “Additional Purchase Price”, and together with the Initial Purchase Price, the “Purchase
Price”) shall be the amount set forth opposite such Buyer’s name in column (7) on the Schedule of Buyers.


 


(d)Payment
of Purchase Price; Deliveries.


 


(i)Payment
of Purchase Price at Initial Closing; Deliveries at Initial Closing. On the Initial Closing Date, (x) each Buyer shall
pay its respective Initial Purchase Price to the Company for the Initial Preferred Shares and the Warrants to be issued and
sold to such Buyer at the Initial Closing, by wire transfer of immediately available funds in accordance with the
Company’s written wire instructions, (less, in the case of any applicable Buyer, the amounts withheld pursuant to
Section 4(g)), and (y)  the Company shall (A) deliver to each Buyer certificates representing such aggregate number of
Initial Preferred Shares as is set forth opposite such Buyer’s name in column (3) of the Schedule of Buyers, (B)
deliver to each Buyer a Warrant to initially acquire up to the aggregate number of Warrant Shares as is set forth opposite
such Buyer’s name in column (4) on the Schedule of Buyers, duly executed on behalf of the Company and registered in the
name of such Buyer or its designee and (C) deliver to each such Buyer the other documents, instruments and certificates set
forth in Section 6 duly executed on behalf of the Company.


 


(ii)Payment
of Purchase Price at Additional Closing; Deliveries at Additional Closing. On the Additional Closing Date, (x) each Buyer
shall pay its respective Additional Purchase Price to the Company for the Additional Preferred Shares to be issued and sold to
such Buyer at the Additional Closing, by wire transfer of immediately available funds in accordance with the Company’s written
wire instructions (less, in the case of any applicable Buyer, the amounts withheld pursuant to Section 4(g)), and (y)  the
Company shall (A) deliver to each Buyer certificates representing such aggregate number of Additional Preferred Shares as is set
forth opposite such Buyer’s name in column (3) of the Schedule of Buyers, duly executed on behalf of the Company and registered
in the name of such Buyer or its designee and (B) deliver to each Buyer the other documents, instruments and certificates set
forth in Section 6 duly executed on behalf of the Company.


 






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		2.	BUYER’S REPRESENTATIONS AND WARRANTIES.



 


Each Buyer, severally
and not jointly, represents and warrants to the Company with respect to only itself that:


 


(a)Organization;
Authority. Such Buyer is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction
of its organization with the requisite power and authority to enter into and to consummate the transactions contemplated by the
Transaction Documents (as defined below) to which it is a party and otherwise to carry out its obligations hereunder and thereunder.


 


(b)Validity;
Enforcement. This Agreement has been duly and validly authorized, executed and delivered
on behalf of such Buyer and constitutes the legal, valid and binding obligations of such Buyer enforceable against such Buyer in
accordance with its terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement
of applicable creditors’ rights and remedies.


 


(c)No
Conflicts. The execution, delivery and performance by such Buyer of this Agreement and the consummation by such Buyer of the
transactions contemplated hereby and thereby will not (i) result in a violation of the organizational documents of such Buyer,
(ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument
to which such Buyer is a party or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including
federal and state securities laws) applicable to such Buyer, except, in the case of clauses (ii) and (iii) above, for such conflicts,
defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse
effect on the ability of such Buyer to perform its obligations hereunder.


 


(d)Certain
Trading Activities. Such Buyer has not directly or indirectly, nor has any Person
acting on behalf of or pursuant to any understanding with such Buyer, engaged in any transactions in the securities of the Company
(including, without limitation, any Short Sales (as defined below) involving the Company’s securities) during the period
commencing as of the time that such Buyer was first contacted by the Placement Agent (as defined below) regarding the specific
investment in the Company contemplated by this Agreement and ending immediately prior to the execution of this Agreement by such
Buyer. So long as any Preferred Shares remain outstanding, the holders of Preferred Shares shall not engage in any Short Sales,
except in compliance with applicable federal and state securities laws, rules and regulations. “Short Sales”
means all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Securities Exchange Act of
1934, as amended (the “1934 Act”) and all types of direct and indirect stock pledges, forward sales contracts,
options, puts, calls, swaps and similar arrangements (including on a total return basis), and sales and other transactions through
non-U.S. broker dealers or foreign regulated brokers (but shall not be deemed to include the location
and/or reservation of borrowable shares of Common Stock).


 


 



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		3.	REPRESENTATIONS AND WARRANTIES OF THE COMPANY.



 


The Company represents
and warrants to each of the Buyers that:


 


(a)Organization
and Qualification. Each of the Company and each of its Subsidiaries are entities duly organized and validly existing and in
good standing under the laws of the jurisdiction in which they are formed, and have the requisite power and authorization to own
their properties and to carry on their business as now being conducted and as presently proposed to be conducted. Each of the
Company and each of its Subsidiaries is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction
in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to
the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect. As used in this
Agreement, “Material Adverse Effect” means any material adverse effect on (i) the business, properties, assets,
liabilities, operations (including results thereof), condition (financial or otherwise) or prospects of the Company or any Subsidiary,
either individually or taken as a whole, (ii) the transactions contemplated hereby or in any of the other Transaction Documents
or (iii) the authority or ability of the Company to perform any of its obligations under any of the Transaction Documents. Other
than the Persons (as defined below) set forth in the SEC Documents (as defined below) the Company has no Subsidiaries. “Subsidiaries”
means any Person in which the Company, directly or indirectly, (I) owns any of the outstanding capital stock or holds any equity
or similar interest of such Person or (II) controls or operates all or any part of the business, operations or administration
of such Person, and each of the foregoing, is individually referred to herein as a “Subsidiary.”


 


(b)Authorization;
Enforcement; Validity. The Company has the requisite power and authority to enter into and perform its obligations under this
Agreement and the other Transaction Documents and to issue the Securities in accordance with the terms hereof and thereof. The
execution and delivery of this Agreement and the other Transaction Documents by the Company and the consummation by the Company
of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Preferred Shares, the
reservation for issuance and issuance of the Conversion Shares issuable upon exercise of the Preferred Shares, the reservation
for issuance and issuance of any Dividend Shares issuable pursuant to the terms of the Certificate of Designations, the issuance
of the Warrants and the reservation for issuance and issuance of the Warrant Shares issuable upon exercise of the Warrants) have
been duly authorized by the Company’s board of directors and (other than the filing with the SEC of the prospectus supplement
required by the Registration Statement pursuant to Rule 424(b) under the 1933 Act (the “Prospectus Supplement”)
supplementing the base prospectus forming part of the Registration Statement (the “Prospectus”) and any other
filings as may be required by any state securities agencies or the Principal Market (as defined below)) no further filing, consent
or authorization is required by the Company, its board of directors or its stockholders or other governing body. This Agreement
has been, and the other Transaction Documents will be prior to each Closing, duly executed and delivered by the Company, and each
constitutes the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with its respective
terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights
and remedies and except as rights to indemnification and to contribution may be limited by federal or state securities law. The
Certificate of Designations in the form attached hereto as Exhibit A has been filed with the Secretary of State of the
State of Nevada and is in full force and effect, enforceable against the Company in accordance with its terms and has not have
been amended. “Transaction Documents” means, collectively, this Agreement, the Warrants, the Irrevocable Transfer
Agent Instructions (as defined below) and each of the other agreements and instruments entered into or delivered by any of the
parties hereto in connection with the transactions contemplated hereby and thereby, as may be amended from time to time.


 






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(c)Issuance
of Securities; Registration Statement. The issuance of the Preferred Shares and the Warrants are duly authorized and, upon
issuance in accordance with the terms of the Transaction Documents, will be validly issued, fully paid and non-assessable and
free from all preemptive or similar rights, taxes, liens, charges and other encumbrances with respect to the issue thereof. As
of each Closing, the Company shall have reserved from its duly authorized capital stock not less than the sum of (i) 125% of the
maximum number of Conversion Shares (assuming for purposes hereof, that all the Preferred Shares issuable hereunder have been
issued, such Preferred Shares are convertible at the Conversion Price and without taking into account any limitations on the conversion
of such Preferred Shares set forth in the Certificate of Designations), (ii) the maximum number of Dividend Shares issuable pursuant
to the terms of the Certificate of Designations from the Initial Closing Date through the Maturity Date (as defined in the Certificate
of Designations) (assuming for purposes hereof, that all the Preferred Shares issuable hereunder have been issued and without
taking into account any limitations on the issuance of securities set forth in the Certificate of Designations) and (iii) the
maximum number of shares of Common Stock issuable upon exercise of the Warrants (assuming for purposes hereof, that all the Warrants
issuable hereunder have been issued and without taking into account any limitations on the exercise of the Warrants set forth
in the Warrants). The issuance of the Conversion Shares, the Dividend Shares and the Warrant Shares are duly authorized, and upon
issuance in accordance with the Certificate of Designations or exercise in accordance with the Warrants (as the case may be),
the Conversion Shares, the Dividend Shares and the Warrant Shares, respectively, when issued, will be validly issued, fully paid
and non-assessable and free from all preemptive or similar rights, taxes, liens, charges and other encumbrances with respect to
the issue thereof, with the holders being entitled to all rights accorded to a holder of Common Stock. The issuance by the Company
of the Securities has been registered under the 1933 Act, the Securities are being issued pursuant to the Registration Statement
and all of the Securities are freely transferable and freely tradable by each of the Buyers without restriction, whether by way
of registration or some exemption therefrom. The Registration Statement is effective and available for the issuance of the Securities
thereunder and the Company has not received any notice that the SEC has issued or intends to issue a stop-order with respect to
the Registration Statement or that the SEC otherwise has suspended or withdrawn the effectiveness of the Registration Statement,
either temporarily or permanently, or intends or has threatened in writing to do so. The “Plan of Distribution” section
under the Registration Statement permits the issuance and sale of the Securities hereunder and as contemplated by the other Transaction
Documents. Upon receipt of the Securities, each of the Buyers will have good and marketable title to the Securities. The Registration
Statement and any prospectus included therein, including the Prospectus and the Prospectus Supplement, complied in all material
respects with the requirements of the 1933 Act and the 1934 Act and the rules and regulations of the SEC promulgated thereunder
and all other applicable laws and regulations. At the time the Registration Statement and any amendments thereto became effective,
at the date of this Agreement and at each deemed effective date thereof pursuant to Rule 430B(f)(2) of the 1933 Act, the Registration
Statement and any amendments thereto complied and will comply in all material respects with the requirements of the 1933 Act and
did not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading. The Prospectus and any amendments or supplements thereto (including,
without limitation the Prospectus Supplement), at the time the Prospectus or any amendment or supplement thereto was issued and
at the applicable Closing Date, complied, and will comply, in all material respects with the requirements of the 1933 Act and
did not, and will not, contain 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 Company meets all of
the requirements for the use of Form S-3 under the 1933 Act for the offering and sale of the Securities contemplated by this Agreement
and the other Transaction Documents, and the SEC has not notified the Company of any objection to the use of the form of the Registration
Statement pursuant to Rule 401(g)(1) under the 1933 Act. The Registration Statement meets the requirements set forth in Rule 415(a)(1)(x)
under the 1933 Act. At the earliest time after the filing of the Registration Statement that the Company or another offering participant
made a bona fide offer (within the meaning of Rule 164(h)(2) under the 1933 Act) relating to any of the Securities, the Company
was not and is not an “Ineligible Issuer” (as defined in Rule 405 under the 1933 Act). The Company (i) has not distributed
any offering material in connection with the offer or sale of any of the Securities and (ii) until no Buyer holds any of the Securities,
shall not distribute any offering material in connection with the offer or sale of any of the Securities to, or by, any of the
Buyers (if required), in each case, other than the Registration Statement, the Prospectus or the Prospectus Supplement.


 






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(d)No
Conflicts. Except as set forth on Schedule 3(d), the execution, delivery and performance of the Transaction Documents by the
Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation,
the issuance of the Preferred Shares, the Warrants, the Conversion Shares, the Dividend Shares and the Warrant Shares and the
reservation for issuance of the Conversion Shares, the Dividend Shares and the Warrant Shares) will not (i) result in a violation
of the Articles of Incorporation (as defined below) (including, without limitation, any certificates of designation contained
therein), the Certificate of Designations or other organizational documents of the Company or any of its Subsidiaries, any capital
stock of the Company, or Bylaws (as defined below), (ii) conflict with, or constitute a default (or an event which with notice
or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party or (iii) result
in a violation of any law, rule, regulation, order, judgment or decree (including, without limitation, foreign, federal and state
securities laws and regulations and the rules and regulations of the NYSE Amex (the “Principal Market”) and
including all applicable federal and provincial laws, rules and regulations of The People’s Republic of China) applicable
to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound
or affected, except, in the case of clause (ii) or (iii) above, to the extent such violations that could not reasonably be expected
to have a Material Adverse Effect.


 






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(e)Consents.
Except as set forth on Schedule 3(e) or disclosed in the Prospectus, the Company is not required to obtain any consent from, authorization
or order of, or make any filing or registration with (other than the filing with the SEC of the Prospectus Supplement and any
other filings as may be required by any state securities agencies), any court, Governmental Entity or any regulatory or self-regulatory
agency or any other Person in order for it to execute, deliver or perform any of its obligations under, or contemplated by, the
Transaction Documents, in each case, in accordance with the terms hereof or thereof. All consents, authorizations, orders, filings
and registrations which the Company is required to obtain at or prior to the applicable Closing have been obtained or effected
on or prior to the applicable Closing Date, and neither the Company nor any of its Subsidiaries are aware of any facts or circumstances
which might prevent the Company from obtaining or effecting any of the registration, application or filings contemplated by the
Transaction Documents. The Company is not in violation of the requirements of the Principal Market and has no knowledge of any
facts or circumstances which could reasonably lead to delisting or suspension of the Common Stock in the foreseeable future.


 


(f)Acknowledgment
Regarding Buyer’s Purchase of Securities. The Company acknowledges and agrees that each Buyer is acting solely in the
capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby
and thereby and that no Buyer is (i) an officer or director of the Company or any of its Subsidiaries, (ii) an “affiliate”
(as defined in Rule 144 promulgated under the 1933 Act (or a successor rule thereto) (collectively, “Rule 144”))
of the Company or any of its Subsidiaries or (iii) to its knowledge, a “beneficial owner” of more than 10% of the
shares of Common Stock (as defined for purposes of Rule 13d-3 of the 1934 Act). The Company further acknowledges that no Buyer
is acting as a financial advisor or fiduciary of the Company or any of its Subsidiaries (or in any similar capacity) with respect
to the Transaction Documents and the transactions contemplated hereby and thereby, and any advice given by a Buyer or any of its
representatives or agents in connection with the Transaction Documents and the transactions contemplated hereby and thereby is
merely incidental to such Buyer’s purchase of the Securities. The Company further represents to each Buyer that the Company’s
decision to enter into the Transaction Documents has been based solely on the independent evaluation by the Company and its representatives.


 


(g)Placement
Agent’s Fees. The Company shall be responsible for the payment of any placement agent’s fees, financial advisory
fees, or brokers’ commissions (other than for Persons engaged by any Buyer or its investment advisor) relating to or arising
out of the transactions contemplated hereby. Other than FT Global Capital, Inc. (the “Placement Agent”), neither
the Company nor any of its Subsidiaries has engaged any placement agent or other agent in connection with the offer or sale of
the Securities.


 


(h)No
Integrated Offering. None of the Company, its Subsidiaries or any of their affiliates, nor any Person acting on 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 require approval of stockholders of the Company under any applicable stockholder
approval provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation system
on which any of the securities of the Company are listed or designated for quotation. None of the Company, its Subsidiaries, their
affiliates nor any Person acting on their behalf will take any action or steps that would cause the offering of any of the Securities
to be integrated with other offerings of securities of the Company.


 






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(i)Dilutive
Effect. The Company understands and acknowledges that the number of Conversion Shares, Dividend Shares and Warrant Shares
will increase in certain circumstances. The Company further acknowledges that its obligation to issue Conversion Shares upon conversion
of the Preferred Shares in accordance with this Agreement and the Certificate of Designations, the Dividend Shares in accordance
with this Agreement and the Certificate of Designations and its obligation to issue the Warrant Shares upon exercise of the Warrants
in accordance with this Agreement and the Preferred Shares and the Warrants are, in each case, absolute and unconditional, regardless
of the dilutive effect that such issuance may have on the ownership interests of other stockholders of the Company.


 


(j)Application
of Takeover Protections; Rights Agreement. The Company and its board of directors have taken all necessary action, if any,
in order to render inapplicable any control share acquisition, interested stockholder, business combination, poison pill (including,
without limitation, any distribution under a rights agreement) or other similar anti-takeover provision under the Articles of
Incorporation, Bylaws or other organizational documents or the laws of the jurisdiction of its incorporation or otherwise which
is or could become applicable to any Buyer as a result of the transactions contemplated by this Agreement, including, without
limitation, the Company’s issuance of the Securities and any Buyer’s ownership of the Securities. The Company and
its board of directors have taken all necessary action, if any, in order to render inapplicable any stockholder rights plan or
similar arrangement relating to accumulations of beneficial ownership of shares of Common Stock or a change in control of the
Company or any of its Subsidiaries.


 


(k)SEC
Documents; Financial Statements. During the two (2) years prior to the date hereof, the Company has timely filed all reports,
schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements
of the 1934 Act (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements,
notes and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the “SEC
Documents”). True, correct and complete copies of each of the SEC Documents are available on the EDGAR system. As of
their respective dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules
and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time
they were filed with the SEC, 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. As of their respective dates, the financial statements of the Company included in the SEC Documents complied
as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC
with respect thereto as in effect as of the time of filing. Such financial statements have been prepared in accordance with generally
accepted accounting principles, consistently applied, during the periods involved (except (i) as may be otherwise indicated in
such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the
Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case
of unaudited statements, to normal year-end audit adjustments which will not be material, either individually or in the aggregate).
No other information provided by or on behalf of the Company to any of the Buyers which is not included in the SEC Documents contains
any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein
not misleading, in the light of the circumstance under which they are or were made.


 






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(l)Absence
of Certain Changes. Since the date of the Company’s most recent audited financial statements contained in a Form 10-K,
except as disclosed in the SEC Documents filed subsequent to such Form 10-K, there has been no material adverse change and no
material adverse development in the business, assets, liabilities, properties, operations (including results thereof), condition
(financial or otherwise) or prospects of the Company or any of its Subsidiaries. Since the date of the Company’s most recent
audited financial statements contained in a Form 10-K, neither the Company nor any of its Subsidiaries has (i) declared or paid
any dividends, (ii) sold any assets, individually or in the aggregate, outside of the ordinary course of business or (iii) made
any material capital expenditures, individually or in the aggregate. Neither the Company nor any of its Subsidiaries has taken
any steps to seek protection pursuant to any law or statute relating to bankruptcy, insolvency, reorganization, receivership,
liquidation or winding up, nor does the Company or any Subsidiary have any knowledge or reason to believe that any of their respective
creditors intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead
a creditor to do so. The Company and its Subsidiaries, individually and on a consolidated basis, are not as of the date hereof,
and after giving effect to the transactions contemplated hereby to occur at the applicable Closing will not be, Insolvent (as
defined below). For purposes of this Section 3(l), “Insolvent” means, (I) with respect to the Company and its
Subsidiaries, on a consolidated basis, (i) the present fair saleable value of the Company’s and its Subsidiaries’
assets is less than the amount required to pay the Company’s and its Subsidiaries’ total Indebtedness (as defined
below), (ii) the Company and its Subsidiaries are unable to pay their debts and liabilities, subordinated, contingent or otherwise,
as such debts and liabilities become absolute and matured or (iii) the Company and its Subsidiaries intend to incur or believe
that they will incur debts that would be beyond their ability to pay as such debts mature; and (II) with respect to the Company
and each Subsidiary, individually, (i) the present fair saleable value of the Company’s or such Subsidiary’s (as the
case may be) assets is less than the amount required to pay its respective total Indebtedness, (ii) the Company or such Subsidiary
(as the case may be) is unable to pay its respective debts and liabilities, subordinated, contingent or otherwise, as such debts
and liabilities become absolute and matured or (iii) the Company or such Subsidiary (as the case may be) intends to incur or believes
that it will incur debts that would be beyond its respective ability to pay as such debts mature. Neither the Company nor any
of its Subsidiaries has engaged in any business or in any transaction, and is not about to engage in any business or in any transaction,
for which the Company’s or such Subsidiary’s remaining assets constitute unreasonably small capital.


 


(m)No
Undisclosed Events, Liabilities, Developments or Circumstances. Except as set forth in the SEC Documents, no event, liability,
development or circumstance has occurred or exists, or is reasonably expected to occur or exist with respect to the Company, any
of its Subsidiaries or any of their respective businesses, properties, liabilities, prospects, operations (including results thereof)
or condition (financial or otherwise) that (i) would be required to be disclosed by the Company under applicable securities laws
on a registration statement on Form S-1 filed with the SEC relating to an issuance and sale by the Company of its Common Stock
and which has not been publicly announced, (ii) could have a material adverse effect on any Buyer’s investment hereunder
or (iii) could have a Material Adverse Effect.


 






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(n)Conduct
of Business; Regulatory Permits. Neither the Company nor any of its Subsidiaries is in violation of any term of or in default
under its Articles of Incorporation, any certificate of designation, preferences or rights of any other outstanding series of
preferred stock of the Company or any of its Subsidiaries or Bylaws or their organizational charter, certificate of formation
or articles of incorporation or bylaws, respectively. Neither the Company nor any of its Subsidiaries is in violation of any judgment,
decree or order or any statute, ordinance, rule or regulation applicable to the Company or any of its Subsidiaries, and neither
the Company nor any of its Subsidiaries will conduct its business in violation of any of the foregoing, except in all cases for
possible violations which could not, individually or in the aggregate, have a Material Adverse Effect. Without limiting the generality
of the foregoing, the Company is not in violation of any of the rules, regulations or requirements of the Principal Market and
has no knowledge of any facts or circumstances that could reasonably lead to delisting or suspension of the Common Stock by the
Principal Market in the foreseeable future. Since January 1, 2010, except as set forth on Schedule 3(n), (i) the Common Stock
has been listed or designated for quotation on the Principal Market, (ii) trading in the Common Stock has not been suspended by
the SEC or the Principal Market and (iii) the Company has received no communication, written or oral, from the SEC or the Principal
Market regarding the suspension or delisting of the Common Stock from the Principal Market. The Company and each of its Subsidiaries
possess all certificates, authorizations and permits issued by the appropriate regulatory authorities necessary to conduct their
respective businesses, except where the failure to possess such certificates, authorizations or permits would not have, individually
or in the aggregate, a Material Adverse Effect, and neither the Company nor any such Subsidiary has received any notice of proceedings
relating to the revocation or modification of any such certificate, authorization or permit.


 


(o)Foreign
Corrupt Practices. Neither the Company nor any of its Subsidiaries nor any director, officer, agent, employee or other Person
acting on behalf of the Company or any of its Subsidiaries has, in the course of its actions for, or on behalf of, the Company
or any of its Subsidiaries (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses
relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official
or employee from corporate funds; (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act
of 1977, as amended; or (iv) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to
any foreign or domestic government official or employee.


 


(p)Sarbanes-Oxley
Act. The Company and each Subsidiary is in compliance with all applicable requirements of the Sarbanes-Oxley Act of 2002 that
are effective as of the date hereof, and all applicable rules and regulations promulgated by the SEC thereunder that are effective
as of the date hereof.


 


(q)Transactions
With Affiliates. Other than the grant of stock options disclosed in the SEC Documents, none of the officers, directors or
employees of the Company or any of its Subsidiaries is presently a party to any transaction with the Company or any of its Subsidiaries
(other than for ordinary course services as employees, officers or directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any such officer, director or employee or, to the knowledge of the Company or any of its Subsidiaries,
any corporation, partnership, trust or other Person in which any such officer, director or employee has a substantial interest
or is an employee, officer, director, trustee or partner.


 






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(r)Equity
Capitalization. As of the date hereof, the authorized capital stock of the Company consists of (i) 50,000,000 shares of Common
Stock, of which, 33,425,101 are issued and outstanding and no shares are reserved for issuance pursuant to securities (other than
the Preferred Shares and the Warrants) exercisable or exchangeable for, or convertible into, shares of Common Stock and (ii) 5,000,000
shares of preferred stock, of which none are issued and outstanding. No shares of Common Stock are held in treasury. All of such
outstanding shares are duly authorized and have been, or upon issuance will be, validly issued and are fully paid and non-assessable.
16,916,360 shares of the Company’s issued and outstanding Common Stock on the date hereof are owned by Persons who are “affiliates”
(as defined in Rule 405 of the 1933 Act and calculated based on the assumption that only officers, directors and holders of at
least 10% of the Company’s issued and outstanding Common Stock are “affiliates” without conceding that any such
Persons are “affiliates” for purposes of federal securities laws) of the Company or any of its Subsidiaries. To the
Company’s knowledge and except as set forth in the SEC Documents, no Person owns 10% or more of the Company’s issued
and outstanding shares of Common Stock (calculated based on the assumption that all Convertible Securities (as defined below),
whether or not presently exercisable or convertible, have been fully exercised or converted (as the case may be) taking
account of any limitations on exercise or conversion (including “blockers”) contained therein without conceding that
such identified Person is a 10% stockholder for purposes of federal securities laws). (i) Except as set forth in the SEC Documents
or on Schedule 3(r)(i), none of the Company’s or any Subsidiary’s capital stock is subject to preemptive rights or
any other similar rights or any liens or encumbrances suffered or permitted by the Company or any Subsidiary; (ii) except as set
forth in the SEC Documents, there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of
any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any capital
stock of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements by which the Company
or any of its Subsidiaries is or may become bound to issue additional capital stock of the Company or any of its Subsidiaries
or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities
or rights convertible into, or exercisable or exchangeable for, any capital stock of the Company or any of its Subsidiaries; (iii)
except as set forth in the SEC Documents or on Schedule 3(r)(iii), there are no outstanding debt securities, notes, credit agreements,
credit facilities or other agreements, documents or instruments evidencing material Indebtedness of the Company or any of its
Subsidiaries or by which the Company or any of its Subsidiaries is or may become bound; (iv) except as set forth in the SEC Documents,
there are no financing statements securing obligations in any amounts filed in connection with the Company or any of its Subsidiaries;
(v) except as set forth in the SEC Documents, there are no agreements or arrangements under which the Company or any of its Subsidiaries
is obligated to register the sale of any of their securities under the 1933 Act (except pursuant to this Agreement); (vi) except
as set forth in the SEC Documents, there are no outstanding securities or instruments of the Company or any of its Subsidiaries
which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by
which the Company or any of its Subsidiaries is or may become bound to redeem a security of the Company or any of its Subsidiaries;
(vii) except as set forth on Schedule 3(r), there are no securities or instruments containing anti-dilution or similar provisions
that will be triggered by the issuance of the Securities; (viii) neither the Company nor any Subsidiary has any stock appreciation
rights or “phantom stock” plans or agreements or any similar plan or agreement; and (ix) neither the Company nor any
of its Subsidiaries have any liabilities or obligations required to be disclosed in the SEC Documents which are not so disclosed
in the SEC Documents, other than those incurred in the ordinary course of the Company’s or its Subsidiaries’ respective
businesses and which, individually or in the aggregate, do not or could not have a Material Adverse Effect. The Company has furnished
to the Buyers true, correct and complete copies of the Company’s Articles of Incorporation, as amended and as in effect
on the date hereof (the “Articles of Incorporation”), and the Company’s bylaws, as amended and as in
effect on the date hereof (the “Bylaws”), and the terms of all securities convertible into, or exercisable
or exchangeable for, shares of Common Stock and the material rights of the holders thereof in respect thereto.


 






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(s)Indebtedness
and Other Contracts. Neither the Company nor any of its Subsidiaries (i) except as set forth in the SEC Documents or as set
forth on Schedule 3(s), has any outstanding Indebtedness (as defined below), (ii) except as set forth in the SEC Documents, is
a party to any contract, agreement or instrument, the violation of which, or default under which, by the other party(ies) to such
contract, agreement or instrument could reasonably be expected to result in a Material Adverse Effect, (iii) is in violation of
any term of, or in default under, any contract, agreement or instrument relating to any Indebtedness, except where such violations
and defaults would not result, individually or in the aggregate, in a Material Adverse Effect, or (iv) is a party to any contract,
agreement or instrument relating to any Indebtedness, the performance of which, in the judgment of the Company’s officers,
has or is expected to have a Material Adverse Effect. For purposes of this Agreement: (x) “Indebtedness” of
any Person means, without duplication (A) all indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed
as the deferred purchase price of property or services (including, without limitation, “capital leases” in accordance
with generally accepted accounting principles) (other than trade payables entered into in the ordinary course of business), (C)
all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (D) all
obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses, (E) all indebtedness created or arising under any conditional sale or
other title retention agreement, or incurred as financing, in either case with respect to any property or assets acquired with
the proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event
of default are limited to repossession or sale of such property), (F) all monetary obligations under any leasing or similar arrangement
which, in connection with generally accepted accounting principles, consistently applied for the periods covered thereby, is classified
as a capital lease, (G) all indebtedness referred to in clauses (A) through (F) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by) any mortgage, claim, lien, tax, right of first
refusal, pledge, charge, security interest or other encumbrance upon or in any property or assets (including accounts and contract
rights) owned by any Person, even though the Person which owns such assets or property has not assumed or become liable for the
payment of such indebtedness, and (H) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds
referred to in clauses (A) through (G) above; (y) “Contingent Obligation” means, as to any Person, any direct
or indirect liability, contingent or otherwise, of that Person with respect to any indebtedness, lease, dividend or other obligation
of another Person if the primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to
provide assurance to the obligee of such liability that such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with
respect thereto; and (z) “Person” means an individual, a limited liability company, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization, any other entity and a government or any department or agency
thereof.


 






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(t)Absence
of Litigation There is no action, suit, proceeding, inquiry or investigation before or by the Principal Market, any Governmental
Entity or other self-regulatory organization or body pending or, to the knowledge of the Company, threatened against or affecting
the Company or any of its Subsidiaries, the Common Stock or any of the Company’s or its Subsidiaries’ officers or
directors which is outside of the ordinary course of business or individually or in the aggregate material to the Company or any
of its Subsidiaries. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation
by the SEC involving the Company, any of its Subsidiaries or any current or former director or officer of the Company or any of
its Subsidiaries. The SEC has not issued any stop order or other order suspending the effectiveness of any registration statement
filed by the Company under the 1933 Act or the 1934 Act, including, without limitation, the Registration Statement.


 


(u)Insurance.
The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and
risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company
and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has been refused any insurance coverage sought or
applied for, and neither the Company nor any such Subsidiary has any reason to believe that it will be unable to renew its existing
insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not have a Material Adverse Effect.


 


(v)Employee
Relations. Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or employs any
member of a union. The Company believes that its and its Subsidiaries’ relations with their respective employees are good.
No executive officer (as defined in Rule 501(f) promulgated under the 1933 Act) or other key employee of the Company or any of
its Subsidiaries has notified the Company or any such Subsidiary that such officer intends to leave the Company or any such Subsidiary
or otherwise terminate such officer’s employment with the Company or any such Subsidiary. No executive officer or other
key employee of the Company or any of its Subsidiaries is, or is now expected to be, in violation of any material term of any
employment contract, confidentiality, disclosure or proprietary information agreement, non-competition agreement, or any other
contract or agreement or any restrictive covenant, and the continued employment of each such executive officer or other key employee
(as the case may be) does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing
matters. The Company and its Subsidiaries are in compliance with all federal, state, local and foreign laws and regulations respecting
labor, employment and employment practices and benefits, terms and conditions of employment and wages and hours, except where
failure to be in compliance would not, either individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect.


 






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(w)Title.
The Company and its Subsidiaries have land use rights as permitted under the law of the People’s Republic of China with
respect to all real property controlled by them, and have good and marketable title to all personal property, owned by them which
is material to the business of the Company and its Subsidiaries, in each case, free and clear of all liens, encumbrances and defects
except such as do not materially affect the value of such property and do not interfere with the use made and proposed to be made
of such property by the Company and any of its Subsidiaries. Any real property and facilities held under lease by the Company
or any of its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material
and do not interfere with the use made and proposed to be made of such property and buildings by the Company or any of its Subsidiaries.


 


(x)Intellectual
Property Rights. The Company and its Subsidiaries own or possess adequate rights or licenses to use all trademarks, trade
names, service marks, service mark registrations, service names, patents, patent rights, copyrights, original works, inventions,
licenses, approvals, governmental authorizations, trade secrets and other intellectual property rights and all applications and
registrations therefor (“Intellectual Property Rights”) necessary to conduct their respective businesses as
now conducted and as presently proposed to be conducted. None of the Company’s or its Subsidiaries’ Intellectual Property
Rights have expired, terminated or been abandoned, or are expected to expire, terminate or be abandoned, within three years from
the date of this Agreement. The Company has no knowledge of any infringement by the Company or any of its Subsidiaries of Intellectual
Property Rights of others. There is no claim, action or proceeding being made or brought, or to the knowledge of the Company or
any of its Subsidiaries, being threatened, against the Company or any of its Subsidiaries regarding their Intellectual Property
Rights. The Company is not aware of any facts or circumstances which might give rise to any of the foregoing infringements or
claims, actions or proceedings. The Company and each of its Subsidiaries have taken reasonable security measures to protect the
secrecy, confidentiality and value of all of their Intellectual Property Rights.


 


(y)Environmental
Laws. The Company and its Subsidiaries (i) are in compliance with all Environmental Laws (as defined below), (ii) have received
all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses
and (iii) are in compliance with all terms and conditions of any such permit, license or approval where, in each of the foregoing
clauses (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate,
a Material Adverse Effect. “Environmental Laws” means all federal, state, local or foreign laws relating to
pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater,
land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened
releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous
Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand
letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated
or approved thereunder.


 


(z)Subsidiary
Rights. The Company or one of its Subsidiaries has the unrestricted right to vote, and (subject to limitations imposed by
applicable law) to receive dividends and distributions on, all capital securities of its Subsidiaries as owned by the Company
or such Subsidiary.


 






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(aa)Tax
Status. The Company and each of its Subsidiaries (i) has timely made or filed all foreign, federal and state income and all
other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has timely 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, except those being contested in good faith and (iii) has set aside on its books provision reasonably adequate
for the payment of all 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 and its Subsidiaries know of no basis for any such claim. The Company is not operated in such a manner as to qualify
as a passive foreign investment company, as defined in Section 1297 of the U.S. Internal Revenue Code of 1986, as amended.


 


(bb)Internal
Accounting and Disclosure Controls. Except as described on Schedule 3(bb), the Company and each of its Subsidiaries maintains
internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the 1934 Act) that is effective to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles, including 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 asset and liability accountability,
(iii) access to assets or incurrence of liabilities is permitted only in accordance with management’s general or specific
authorization and (iv) the recorded accountability for assets and liabilities is compared with the existing assets and liabilities
at reasonable intervals and appropriate action is taken with respect to any difference. Except as described on Schedule 3(bb),
the Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the 1934 Act) that are
effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the
1934 Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC,
including, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company
in the reports that it files or submits under the 1934 Act is accumulated and communicated to the Company’s management,
including its principal executive officer or officers and its principal financial officer or officers, as appropriate, to allow
timely decisions regarding required disclosure. Except as described on Schedule 3(bb), neither the Company nor any of its Subsidiaries
has received any notice or correspondence from any accountant or other Person relating to any potential material weakness or significant
deficiency in any part of the internal controls over financial reporting of the Company or any of its Subsidiaries.


 


(cc)Off
Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company or any of its
Subsidiaries and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its 1934
Act filings and is not so disclosed or that otherwise could be reasonably likely to have a Material Adverse Effect.


 


(dd)Investment
Company Status. The Company is not, and upon consummation of the sale of the Securities will not be, an “investment
company,” an affiliate of an “investment company,” a company controlled by an “investment company”
or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment
company” as such terms are defined in the Investment Company Act of 1940, as amended.


 






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(ee)Acknowledgement
Regarding Buyers’ Trading Activity. It is understood and acknowledged by the Company that (i) following the public disclosure
of the transactions contemplated by the Transaction Documents, in accordance with the terms thereof, none of the Buyers have been
asked by the Company or any of its Subsidiaries to agree, nor has any Buyer agreed with the Company or any of its Subsidiaries,
to desist from effecting any transactions in or with respect to (including, without limitation, purchasing or selling, long and/or
short) any securities of the Company, or “derivative” securities based on securities issued by the Company or to hold
any of the Securities for any specified term; (ii) any Buyer, and counterparties in “derivative” transactions to which
any such Buyer is a party, directly or indirectly, presently may have a “short” position in the Common Stock which
was established prior to such Buyer’s knowledge of the transactions contemplated by the Transaction Documents; and (iii)
each Buyer shall not be deemed to have any affiliation with or control over any arm’s length counterparty in any “derivative”
transaction. The Company further understands and acknowledges that following the public disclosure of the transactions contemplated
by the Transaction Documents pursuant to the Press Release (as defined below) one or more Buyers may engage in hedging and/or
trading activities at various times during the period that the Securities are outstanding, including, without limitation, during
the periods that the value and/or number of the Warrant Shares, the Dividend Shares or Conversion Shares, as applicable, deliverable
with respect to the Securities are being determined and (b) such hedging and/or trading activities, if any, can reduce the value
of the existing stockholders’ equity interest in the Company both at and after the time the hedging and/or trading activities
are being conducted. The Company acknowledges that such aforementioned hedging and/or trading activities do not constitute a breach
of this Agreement, the Certificate of Designations, the Warrants or any other Transaction Document or any of the documents executed
in connection herewith or therewith.


 


(ff)Manipulation
of Price. Neither the Company nor any of its Subsidiaries has, and, to the knowledge of the Company, no Person acting on their
behalf has, directly or indirectly, (i) taken any action designed to cause or to result in the stabilization or manipulation of
the price of any security of the Company or any of its Subsidiaries to facilitate the sale or resale of any of the Securities,
(ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities (other than the Placement
Agent), or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities
of the Company or any of its Subsidiaries.


 


(gg)U.S.
Real Property Holding Corporation. Neither the Company nor any of its Subsidiaries is, or has ever been, and so long as any
of the Securities are held by any of the Buyers, shall become, a U.S. real property holding corporation within the meaning of
Section 897 of the Internal Revenue Code of 1986, as amended, and the Company and each Subsidiary shall so certify upon any Buyer’s
request.


 


(hh)Registration
Eligibility. The Company is eligible to register the issuance and sale of the Securities
to the Buyers using Form S-3 promulgated under the 1933 Act.


 


(ii)Transfer
Taxes. On each Closing Date, all stock transfer or other taxes (other than income
or similar taxes) which are required to be paid in connection with the issuance and sale of the Securities to be sold to each Buyer
hereunder at such Closing will be, or will have been, fully paid or provided for by the Company, and all laws imposing such taxes
will be or will have been complied with.


 






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(jj)Bank
Holding Company Act. Neither the Company nor any of its Subsidiaries is subject to
the Bank Holding Company Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of
the Federal Reserve System (the “Federal Reserve”). Neither the Company nor any of its Subsidiaries or affiliates
owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities
or twenty-five percent (25%) or more of the total equity of a bank or any equity that is subject to the BHCA and to regulation
by the Federal Reserve. Neither the Company nor any of its Subsidiaries or affiliates exercises a controlling influence over the
management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.


 


(kk)Public
Utility Holding Act. None of the Company nor any of its Subsidiaries is a “holding
company,” or an “affiliate” of a “holding company,” as such terms are defined in the Public Utility
Holding Act of 2005.


 


(ll)Federal
Power Act. None of the Company nor any of its Subsidiaries is subject to regulation
as a “public utility” under the Federal Power Act, as amended.


 


(mm)No
Additional Agreements. The Company does not have any agreement or understanding with
any Buyer with respect to the transactions contemplated by the Transaction Documents other than as specified in the Transaction
Documents.


 


(nn)Non-Oil,
Gas and Mineral Real Property. Each of the Company and its Subsidiaries holds valid
use rights to all real property, leases in real property, or other interests in real property owned or held by the Company or any
of its Subsidiaries (other than any property included in the Interests (as defined below)) (the “Other Real Property”)
owned by the Company or any of its Subsidiaries, as applicable. The Other Real Property is free and clear of all Encumbrances and
is not subject to any rights of way, building use restrictions, exceptions, variances, reservations, or limitations of any nature
except for (a) liens for current taxes not yet due, and (b) zoning laws and other land use restrictions that do not impair the
present or anticipated use of the property subject thereto.


 


(oo)Non-Oil,
Gas and Mineral Fixtures and Equipment. Each of the Company and its Subsidiaries,
as applicable, has good title to, or a valid leasehold interest in, the material tangible personal property, equipment, improvements,
fixtures, and other personal property and appurtenances that are used by the Company or its Subsidiary in connection with the conduct
of its business (the “Company Fixtures and Equipment”), except that the Company Fixtures and Equipment do not
include any property included in the Interests. The Company Fixtures and Equipment are structurally sound, are in good operating
condition and repair, are adequate for the uses to which they are being put, are not in need of maintenance or repairs except for
ordinary, routine maintenance and repairs and are sufficient for the conduct of the Company's and/or its Subsidiaries’ businesses,
as applicable, in the manner as conducted prior to the Initial Closing. Each of the Company and its Subsidiaries owns all of its
Company Fixtures and Equipment free and clear of all Encumbrances except for (a) liens for current taxes not yet due, and (b) zoning
laws and other land use restrictions that do not impair the present or anticipated use of the property subject thereto.


 


(pp)Oil,
Gas and Mineral Interests.


 


		(i)	For the purpose of this Agreement, the following definitions shall apply:



 






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(1)“Appurtenant
Rights” means, with respect to the Properties (as defined below), in each case, insofar as they may relate to the Properties,
the Company’s or any of its Subsidiaries’, as applicable, interest in (a) all presently existing and valid unitization
and pooling declarations, agreements, and/or orders relating to or affecting the Properties and all rights in the Properties
covered by the Units (as defined below) created thereby; (b) all wells, well and leasehold equipment, pipelines, platforms, facilities,
improvements, goods and other personal property located on or used in connection with the Properties; (c) all presently existing
production sales contracts, operating and other contracts or agreements which relate to the Properties; and (d) all permits, licenses,
easements, rights-of-way, rights of use, and similar agreements pertaining to the Properties.


 


(2)“Basic
Documents” means all of the following documents and instruments, including those that are recorded and unrecorded, with
respect to the Company or any of its Subsidiaries:


 


a.All
material contracts and agreements comprising any part of, or relating or pertaining to, the Interests, including but not limited
to farm-in agreements, farm-out agreements, joint operating agreements, Unit agreements and contracts by which the Interests were
acquired;


 


b.All
agreements or arrangements for the sale, gathering, transportation, compression, treating, processing or other marketing of a material
volume of production from the Interests (including calls on, or other rights to purchase, production, whether or not the same are
currently being exercised), comprising any part of or otherwise relating or pertaining to the Interests; and


 


c.All
documents and instruments evidencing the Interests.


 


(3)“Consent”
means any consents, approvals, orders, authorizations, notifications, notices, estoppel certificates, releases, registrations,
ratifications, declarations, filings, waivers, exemptions or variances.


 


(4)“Good
and Defensible Title” means, as to the Interest in question, (i) title to such Interest by virtue of which the Company
or any of its Subsidiaries, as applicable, can successfully defend against a claim to the contrary made by a third party, based
upon industry standards in the acquisition of oil and gas properties, and in the exercise of reasonable judgment and in good faith;
and, (ii) in the case of the Wells (as defined below) or Mines (as defined below), title that entitles the Company or such Subsidiary,
as applicable, to receive not less than the Net Revenue Interest (as defined below) for each of the Wells or Mines, as applicable,
and obligates the Company or such Subsidiary, as applicable, to bear not more than the Working Interest for each of the Wells or
Mines, as applicable (unless there is a corresponding increase in the Net Revenue Interest for a respective Well or Mine, as applicable);
and (iii) such Interest is subject to no liens, encumbrances, obligations or defects.


 






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(5)“Governmental
Authorizations” means any approval, consent, license, permit, waiver, or other authorization issued, granted, given,
or otherwise made available by or under the authority of any Governmental Entity or pursuant to any Legal Requirement.


 


(6)“Governmental
Entity” means any:


 


a.nation,
state, county, city, town, village, district, or other political jurisdiction of any nature;


 


b.federal,
state, local, municipal, foreign, or other government;


 


c.governmental
or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any
court or other tribunal);


 


d.multi-national
organization or body; or


 


e.body
exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority
or power of any nature.


 


(7)“Interests”
means the Properties and the Appurtenant Rights of the Company and its Subsidiaries.


 


(8)“Legal
Requirement” means any federal, state, local, municipal, foreign, international, multinational, or other administrative
order, constitution, law, ordinance, principle of common law, regulation, statute, or treaty.


 


(9)“Mine”
or “Mines” means all of the Company's and its Subsidiaries' mines and interest in mineral reserves and resources.


 


(10)“Net
Revenue Interest” means a share, expressed as a decimal, of the oil, gas and other minerals (or the proceeds of sale
thereof) produced and saved from or otherwise attributable to an Interest and the zones, horizons and reservoirs produced therefrom,
after the deduction of all royalties, overriding royalties and other burdens on production.


 


(11)“Over-produced”
means to have taken more production from an Interest (or the Units in which the Interest participates) or any product thereof,
than the ownership of the Company or any of its Subsidiaries and the Company's or any of its Subsidiaries’ predecessors in
the Interest would entitle the Company or any of its Subsidiaries and/or the Company's or any of its Subsidiaries’ predecessors
(absent any balancing agreement or arrangement) to receive.


 


(12)“Preferential
Right” means any preferential right or option to purchase or otherwise to acquire an Interest or any interest therein,
held by another party to a Basic Document, which arises as a result of the transactions contemplated by this Agreement.


 






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(13)“Properties”
means all of the Company's and its Subsidiaries’ rights, titles and interests in and to the following oil and gas and/or
mineral properties:


 


a.All
oil, gas and/or mineral leases and other mineral interests, including, but not limited to, all of the Company's operating rights,
record title interests, working interests, and overriding royalty interests, without depth or other restrictions or exclusions;


 


b.All Wells and Mines of
the Company and its Subsidiaries;


 


c.All
surface leases, rights-of-way, easements, servitudes and other rights-of-use (whether surface, subsurface or subsea); and


 


d.All
licenses and servitudes.


 


(14)“Routine
Governmental Approvals” means Governmental Authorizations required to be obtained from any Governmental Entity that are
customarily obtained after consummation of a transaction.


 


(15)“Under-produced”
means to have taken less production from an Interest (or the Units in which the Interest participates) or any product thereof,
than the ownership of the Company or any of its Subsidiaries and the Company's or any of its Subsidiaries’ predecessors in
the Interest would entitle the Company or any of its Subsidiaries and/or the Company's or any of its Subsidiaries’ predecessors
(absent any balancing agreement or arrangement) to receive.


 


(16)“Units”
means oil, gas and other mineral production, proration, or other types of units, and any ownership interests therein.


 


(17)“Well”
or “Wells” means all of the Company's and any of its Subsidiaries' oil, gas and condensate wells, (whether producing,
not producing or abandoned or temporarily abandoned).


 


(18)“Working
Interest” means a share, expressed as a decimal, of the costs of exploring, drilling, developing and operating an Interest
and producing oil, gas and other minerals from the zones, horizons and reservoirs therein and thereunder.


 


(ii)Except
as disclosed in Schedule 3(pp), the Company holds Good and Defensible Title to the Interests.


 


(iii)Except
as disclosed in Schedule 3(pp), the Basic Documents are in full force and effect and constitute valid and binding obligations
of the parties thereto.


 






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(iv)Except
as disclosed in Schedule 3(pp), neither the Company nor any of its Subsidiaries is in material breach or default (and no situation
exists which with the passing of time or giving of notice would give rise to such a breach or default) of its obligations under
any Basic Document, and no breach or default by any other party to any Basic Document (or situation which with the passage of
time or giving of notice would give rise to such a breach or default) exists, to the extent such breach or default (whether by
the Company, any Subsidiary or another party to any Basic Document) could adversely affect any of the Interests.


 


(v)All
payments (including, without limitation, all delay rentals, royalties, excess royalties, minimum royalties, overriding royalty
interests, shut in royalties and valid calls for payment or prepayment under operating agreements) owing under the Basic Documents
have been and are being made timely and properly, and before the same became delinquent (by the Company or the applicable Subsidiary
where the non payment of same by another party to any Basic Document could adversely affect any of the Interests) have been and
are being made by such other party in all material respects.


 


(vi)All
conditions necessary to maintain the Basic Documents in force have been duly performed.


 


(vii)No
non-consent operations exist with respect to any of the Interests that have resulted or will result in a temporary or permanent
increase or decrease in either the Company’s or any of its Subsidiaries’ Net Revenue Interest or Working Interest in
such Interest.


 


(viii)Except
as disclosed in Schedule 3(pp), all expenses payable under the terms of the Basic Documents have been properly and timely paid
except for such expenses as are being currently paid or will be paid prior to delinquency. Except for budgeted capital expenditures
disclosed in the SEC Documents, no proposals calling for expenditures in excess of $250,000 for any one project are currently
outstanding (whether made by the Company, any of its Subsidiaries, or by any other party) to drill additional wells, or to deepen,
plug back, sidetrack, abandon, or rework existing Wells or Mines, as applicable, or to conduct other operations for which consent
is required under the applicable operating agreement, or to conduct any other operations, other than normal operation of existing
Wells or Mines, as applicable, on the Interests.


 


(ix)Neither
the Company nor any of its Subsidiaries has received prepayments (including, but not limited to, payments for oil and gas not
taken pursuant to “take or pay” arrangements) for any oil or gas produced from the Interests as a result of which
the obligation does (or may) exist (i) to deliver oil, gas or minerals produced from the Interests without then receiving payment
therefor, or (ii) to make repayments in cash. Except as described on Schedule 3(pp), there is no Interest with respect to which
the Company has taken an Over-Produced or Under-Produced position to the extent such Over-produced or Under-produced position
has not, as of the day immediately preceding the date hereof been fully made up or otherwise extinguished. No pipeline imbalances
have arisen and remain outstanding due to the failure of nominations made by the Company or any of its Subsidiaries to match actual
deliveries of production from any one or more of the Interests. None of the purchasers under any production sales contracts relating
to an Interest has (i) exercised any economic out provision; (ii) curtailed its takes of natural gas in violation of such contracts;
or (iii) given notice that it desires to amend the production sales contracts with respect to price or quantity of deliveries
under take-or-pay provisions or otherwise.


 






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(x)To
the Company’s knowledge, except as disclosed in Schedule 3(pp), no delinquent unpaid bills or past due charges exist for
any labor and materials incurred by or on behalf of the Company or any of its Subsidiaries’ related to the exploration,
development or operation of the Interests.


 


(xi)Except
as may be provided for by a Basic Document, neither the Company nor any of its Subsidiaries nor any of the Interests is subject
to (i) any area of mutual interest agreements, (ii) any farm out or farm in agreement under which any party thereto is entitled
to receive assignments of any Interest or any interest therein not yet made, or could earn additional assignments of any Interest
or any interest therein after the date hereof, (iii) any tax partnership or (iv) any agreement, contract or commitment relating
to the disposition or acquisition of the assets of, or any interest in, any other entity.


 


(xii)All
severance, production, ad valorem and other similar taxes based on or measured by ownership or operation of, or production from,
the Interests have been, and are being, paid (properly and timely, and before the same become delinquent) by the Company or the
applicable Subsidiary in all respects.


 


(xiii)(i)
The ownership and operation of the Interests has, to the extent that non conformance could adversely affect the Interests, been
conducted in conformity with all applicable material Legal Requirements of all Governmental Entities having jurisdiction over the
Interests or the Company, and (ii) the Company has not received any notice of noncompliance with regard to any material Legal Requirement
of any Governmental Entity having jurisdiction over the Interests or the Company.


 


(xiv)There
are no Preferential Rights or Consents, other than Routine Governmental Approvals that affect any of the Interests and that will
be triggered by the transactions contemplated by the Transaction Documents.


 


(xv)There
exist no agreements or other arrangements under which the Company or any of its Subsidiaries undertakes to perform gathering, transportation,
processing or other marketing services for any other party for a fee or other consideration that is now, or may hereafter be, unrepresentative
of commercial rates being received by other parties in comparable, arm’s length transactions.


 


(xvi)Except
as disclosed in Schedule 3(pp), there are no Wells or Mines, as applicable, located on the Interests that (i) the Company or any
of its Subsidiaries is currently obligated by law or contract to currently plug and abandon or to cease development or exploration,
(ii) the Company or any of its Subsidiaries will be obligated by law or contract to plug and abandon with the lapse of time or
notice or both because the Well or Mines, as applicable, is not currently capable of producing severed crude oil, natural gas,
casinghead gas, drip gasoline, natural gasoline, petroleum, natural gas liquids, condensate, products, liquids, other hydrocarbons
or other minerals or materials in paying quantities or otherwise currently being used in normal operations, (iii) are subject
to exceptions to a requirement to plug and abandon issued by a Governmental Entity, or (iv) to the Company’s knowledge,
have been plugged and abandoned, but have not been plugged in accordance in all material respects with all applicable requirements
of any Governmental Entity.


 






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(xvii)Except
as disclosed in Schedule 3(pp), no suit, action or proceeding (including, without limitation, tax or environmental demands proceedings)
is pending or threatened, which might result in material impairment or loss of title to any of the Interests or the material value
thereof.


 


(xviii)All
proceeds from the sale of hydrocarbons produced from the Company’s or the applicable Subsidiaries’ proportionate share
of the Interests are currently being paid to the Company or such Subsidiary in all material respects, and no portion of such proceeds
is currently being held in suspense by any purchaser thereof or any other party by whom proceeds are paid except for immaterial
amounts.


 


(qq)Illegal
or Unauthorized Payments; Political Contributions. Neither the Company nor any of
its Subsidiaries nor, to the best of the Company’s knowledge (after reasonable inquiry of its officers and directors), any
of the officers, directors, employees, agents or other representatives of the Company or any of its Subsidiaries or any other business
entity or enterprise with which the Company or any Subsidiary is or has been affiliated or associated, has, directly or indirectly,
made or authorized any payment, contribution or gift of money, property, or services, whether or not in contravention of applicable
law, (a) as a kickback or bribe to any Person or (b) to any political organization, or the holder of or any aspirant to any elective
or appointive public office except for personal political contributions not involving the direct or indirect use of funds of the
Company or any of its Subsidiaries.


 


(rr)Money
Laundering. The Company and its Subsidiaries are in compliance with, and have not
previously violated, the USA Patriot Act of 2001 and all other applicable U.S. and non-U.S. anti-money laundering laws and regulations,
including, without limitation, the laws, regulations and Executive Orders and sanctions programs administered by the U.S. Office
of Foreign Assets Control, including, without limitation, (i) Executive Order 13224 of September 23, 2001 entitled, “Blocking
Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism” (66 Fed. Reg. 49079
(2001)); and (ii) any regulations contained in 31 CFR, Subtitle B, Chapter V.


 


(ss)Registration
Rights. No holder of securities of the Company has rights to the registration of any
securities of the Company because of the filing of the Registration Statement or the issuance of the Securities hereunder that
could expose the Company to material liability or any Buyer to any liability or that could impair the Company’s ability to
consummate the issuance and sale of the Securities in the manner, and at the times, contemplated hereby, which rights have not
been waived by the holder thereof as of the date hereof.


 






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(tt)Disclosure.
The Company confirms that neither it nor any other Person acting on its behalf has provided any of the Buyers or their agents
or counsel with any information that constitutes or could reasonably be expected to constitute material, non-public information
concerning the Company or any of its Subsidiaries, other than the existence of the transactions contemplated by this Agreement
and the other Transaction Documents. The Company understands and confirms that each of the Buyers will rely on the foregoing representations
in effecting transactions in securities of the Company. All disclosure provided to the Buyers regarding the Company and its Subsidiaries,
their businesses and the transactions contemplated hereby, including the schedules to this Agreement, furnished by or on behalf
of the Company or any of its Subsidiaries is true and correct and does not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under
which they were made, not misleading. Each press release issued by the Company or any of its Subsidiaries during the twelve (12)
months preceding the date of this Agreement did not at the time of release contain any untrue statement of a material fact or
omit 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 are made, not misleading. No event or circumstance has occurred or information exists with
respect to the Company or any of its Subsidiaries or its or their business, properties, liabilities, prospects, operations (including
results thereof) or conditions (financial or otherwise), which, under applicable law, rule or regulation, requires public disclosure
at or before the date hereof or announcement by the Company but which has not been so publicly disclosed. The Company acknowledges
and agrees that no Buyer makes or has made any representations or warranties with respect to the transactions contemplated hereby
other than those specifically set forth in Section 2.


 


		4.	COVENANTS.



 


(a)Maintenance
of Registration Statement.  For so long as any of the Warrants remain outstanding, the Company shall use its best efforts
to maintain the effectiveness of the Registration Statement for the issuance thereunder of the Warrant Shares, provided that
if at any time while the Warrants are outstanding the Company shall be ineligible to utilize Form S-3 (or any successor form)
for the purpose of issuance of the Warrant Shares, the Company shall promptly amend the Registration Statement on such other
form as may be necessary to maintain the effectiveness of the Registration Statement for this purpose. If at any time
following the date hereof the Registration Statement is not effective or is not otherwise available for the issuance of the
Securities or any prospectus contained therein is not available for use, the Company shall immediately notify the holders of
the Securities in writing that the Registration Statement is not then effective or a prospectus contained therein is not
available for use and thereafter shall promptly notify such holders when the Registration Statement is effective again and
available for the issuance of the Securities or such prospectus is again available for use.


 


(b)Prospectus
Supplement and Blue Sky. Immediately prior to execution of this Agreement, the Company
shall have delivered, and as soon as practicable after execution of this Agreement the Company shall file, the Prospectus Supplement
with respect to the Securities as required under, and in conformity with, the 1933 Act, including Rule 424(b) thereunder. If required,
the Company, on or before each Closing Date, 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 Buyers at such Closing pursuant to this Agreement under
applicable securities or “Blue Sky” laws of the states of the United States (or to obtain an exemption from such qualification),
and shall provide evidence of any such action so taken to the Buyers on or prior to such Closing Date. Without limiting any other
obligation of the Company under this Agreement, the Company shall timely make all filings and reports relating to the offer and
sale of the Securities required under all applicable securities laws (including, without limitation, all applicable federal securities
laws and all applicable “Blue Sky” laws), and the Company shall comply with all applicable federal, state and local
laws, statutes, rules, regulations and the like relating to the offering and sale of the Securities to the Buyers.


 






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(c)Reporting
Status. Until the date on which no Preferred Shares or Warrants are outstanding (the “Reporting Period”),
the Company shall timely file all reports required to be filed with the SEC pursuant to the 1934 Act, and the Company shall not
terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations
thereunder would no longer require or otherwise permit such termination.


 


(d)Use
of Proceeds. The Company shall use the proceeds from the sale of the Securities solely for (i) general corporate
purposes and working capital (including for general and administrative expenses) (provided, that the Company shall reserve
$500,000 of the proceeds from the sale of the Securities for the purposes described on Schedule 4(d) attached hereto) (ii)
potential ordinary course acquisitions that complement the Company’s business and (iii) the payment of the fees and
expenses described in Section 4(g) below. Without limiting the foregoing, none of such proceeds shall be used for (i) the
repayment of any outstanding Indebtedness of the Company or any of its Subsidiaries, (ii) the redemption or repurchase of any
securities of the Company or any of its Subsidiaries or (iii) the settlement of any outstanding litigation.


 


(e)Financial
Information. The Company agrees to send the following to each Buyer during the Reporting Period (i) unless the following are
filed with the SEC through EDGAR and are available to the public through the EDGAR system, within one (1) Business Day after the
filing thereof with the SEC, a copy of its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, any interim reports
or any consolidated balance sheets, income statements, stockholders’ equity statements and/or cash flow statements for any
period other than annual, any Current Reports on Form 8-K and any registration statements (other than on Form S-8) or amendments
filed pursuant to the 1933 Act, (ii) unless filed with the SEC through EDGAR and are available to the public through the EDGAR
system, on the same day as the release thereof, facsimile copies of all press releases issued by the Company or any of its Subsidiaries
and (iii) copies of any notices and other information made available or given to the stockholders of the Company generally, contemporaneously
with the making available or giving thereof to the stockholders.


 


(f)Listing.
The Company shall promptly secure the listing or designation for quotation (as the case may be) of all of the Preferred Shares
and Warrant Shares upon each national securities exchange and automated quotation system, if any, upon which the Common Stock
is then listed or designated for quotation (as the case may be) (subject to official notice of issuance) (but in no event later
than the applicable Closing Date) and shall maintain such listing or designation for quotation (as the case may be) of all the
shares of Common Stock from time to time issuable under the terms of the Transaction Documents on such national securities exchange
or automated quotation system. The Company shall maintain the Common Stock’s listing or designation for quotation (as the
case may be) on the Principal Market, The New York Stock Exchange, the Nasdaq Capital Market, the Nasdaq Global Market or the
Nasdaq Global Select Market (each, an “Eligible Market”). Neither the Company nor any of its Subsidiaries shall
take any action which could be reasonably expected to result in the delisting or suspension of the Common Stock on an Eligible
Market. The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section 4(f).


 






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(g)Fees.
The Company shall reimburse Greenberg Traurig, LLP (counsel to the lead investor) for all reasonable, documented costs and expenses
incurred by it in connection with preparing and delivering the Transaction Documents (including, without limitation, all reasonable,
documented legal fees and disbursements in connection therewith, and due diligence in connection with the transactions contemplated
thereby, and all fees and costs arising under Section 4(u) below), which amount may be withheld by a Buyer (at the request of
Greenberg Traurig, LLP) from its Purchase Price at any Closing or paid by the Company upon termination of this Agreement on demand
by Greenberg Traurig, LLP, less $30,000 which was previously advanced to Greenberg Traurig, LLP by the Company, provided, however,
that the amount payable by the Company to Greenberg Traurig, LLP under any and all of the Transaction Documents shall not exceed
$70,000 in the aggregate unless agreed to in writing by the Company. The Company shall be responsible for the payment of any placement
agent’s fees, financial advisory fees, transfer agent fees, DTC (as defined below) fees or broker’s commissions (other
than for Persons engaged by any Buyer) relating to or arising out of the transactions contemplated hereby (including, without
limitation, any fees payable to the Placement Agent, who is the Company’s sole placement agent in connection with the transactions
contemplated by this Agreement). The Company shall pay, and hold each Buyer harmless against, any liability, loss or expense (including,
without limitation, reasonable attorneys’ fees and out-of-pocket expenses) arising in connection with any claim relating
to any such payment. Except as otherwise set forth in the Transaction Documents, each party to this Agreement shall bear its own
expenses in connection with the sale of the Securities to the Buyers.


 


(h)Pledge
of Securities. Notwithstanding anything to the contrary contained in this Agreement, the Company acknowledges and agrees that
the Securities may be pledged by a Buyer in connection with a bona fide margin agreement or other loan or financing arrangement
that is secured by the Securities. The pledge of Securities shall not be deemed to be a transfer, sale or assignment of the Securities
hereunder, and no Buyer effecting a pledge of Securities shall be required to provide the Company with any notice thereof or otherwise
make any delivery to the Company pursuant to this Agreement or any other Transaction Document. The Company hereby agrees to execute
and deliver such documentation as a pledgee of the Securities may reasonably request in connection with a pledge of the Securities
to such pledgee by a Buyer.


 






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(i)Disclosure
of Transactions and Other Material Information. The Company shall, on or before
9:30 a.m. (but in no event prior to 9:15 a.m.), New York time, on the date of this Agreement, (x) issue a press release
(the “Press Release”) reasonably acceptable to the Buyers disclosing all
the material terms of the transactions contemplated by the Transaction Documents and (y) file a Current Report on Form
8-K describing all the material terms of the transactions contemplated by the Transaction Documents in the form required by
the 1934 Act and attaching all the material Transaction Documents (including, without limitation, this Agreement (and all
schedules to this Agreement) and the form of Warrants) (including all attachments, the “8-K Filing”). From
and after the issuance of the Press Release, the Company shall have disclosed all material, non-public information (if any)
delivered to any of the Buyers by the Company or any of its Subsidiaries, or any of their respective officers, directors,
employees or agents in connection with the transactions contemplated by the Transaction Documents. The Company shall not, and
the Company shall cause each of its Subsidiaries and each of its and their respective officers, directors, employees and
agents, not to, provide any Buyer with any material, non-public information regarding the Company or any of its Subsidiaries
from and after the issuance of the Press Release without the express prior written consent of such Buyer. In the event of a
breach of any of the foregoing covenants or any of the covenants contained in Section 4(n) by the Company, any of its
Subsidiaries, or any of its or their respective officers, directors, employees and agents (as determined in the reasonable
good faith judgment of such Buyer), in addition to any other remedy provided herein or in the Transaction Documents, such
Buyer shall have the right to make a public disclosure, in the form of a press release, public advertisement or otherwise, of
such breach or such material, non-public information, as applicable, without the prior approval by the Company, any of its
Subsidiaries, or any of its or their respective officers, directors, employees or agents. No Buyer shall have any
liability to the Company, any of its Subsidiaries, or any of its or their respective officers, directors, employees,
stockholders or agents, for any such disclosure. Subject to the foregoing, neither the Company, its Subsidiaries nor any
Buyer shall issue any press releases or any other public statements with respect to the transactions contemplated hereby;
provided, however, the Company shall be entitled, without the prior approval of any Buyer, to make any press release or other
public disclosure with respect to such transactions (i) in substantial conformity with the 8-K Filing and contemporaneously
therewith and (ii) as is required by applicable law and regulations (provided that in the case of clause (i) each Buyer shall
be consulted by the Company in connection with any such press release or other public disclosure prior to its release).
Without the prior written consent of the applicable Buyer, the Company shall not (and shall cause each of its Subsidiaries
and affiliates to not) disclose the name of such Buyer in any filing (other than the 8-K Filing), announcement, release or
otherwise. Notwithstanding anything contained in this Agreement to the contrary and without implication that the contrary
would otherwise be true, the Company expressly acknowledges and agrees that no Buyer has had, and no Buyer shall have (unless
expressly agreed to by a particular Buyer after the date hereof in a written definitive and binding agreement executed by the
Company and such particular Buyer (it being understood and agreed that no Buyer may bind any other Buyer with respect
thereto)), any duty of confidentiality with respect to, or a duty not to trade on the basis of, any information regarding the
Company or any of its Subsidiaries.


 






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(j)Additional
Issuance of Securities. The Company agrees that for the period commencing on the date hereof and ending on the date
immediately following the ninety (90) day anniversary of the Initial Closing Date (provided that such period shall be
extended by the number of days during such period and any extension thereof contemplated by this proviso on which the
Registration Statement is not effective or any prospectus contained therein is not available for use) (the
“Restricted Period”), neither the Company nor any of its Subsidiaries shall directly or indirectly
issue, offer, sell, grant any option or right to purchase, or otherwise dispose of (or announce any issuance, offer, sale,
grant of any option or right to purchase or other disposition of) any equity security or any equity-linked or related
security (including, without limitation, any “equity security” (as that term is defined under Rule 405
promulgated under the 1933 Act), any Convertible Securities, any debt, any preferred stock or any purchase rights) (any such
issuance, offer, sale, grant, disposition or announcement (whether occurring during the Restricted Period or at any time
thereafter) is referred to as a “Subsequent Placement”). Notwithstanding the foregoing, this Section 4(j)
shall not apply in respect of (i) the issuance of (A) shares of Common Stock or standard options to purchase Common Stock to
directors, officers or employees of the Company in their capacity as such pursuant to an Approved Share Plan (as defined
below); (B) shares of Common Stock issued upon the conversion or exercise of Convertible Securities (other than
standard options to purchase Common Stock issued pursuant to an Approved Share Plan that are covered by clause (A) above)
issued prior to the date hereof, provided that the conversion price of any such Convertible Securities (other than standard
options to purchase Common Stock issued pursuant to an Approved Share Plan that are covered by clause (A) above) is not
lowered, none of such Convertible Securities (other than standard options to purchase Common Stock issued pursuant to an
Approved Share Plan that are covered by clause (A) above) are amended to increase the number of shares issuable thereunder
and none of the terms or conditions of any such Convertible Securities (other than standard options to purchase Common Stock
issued pursuant to an Approved Share Plan that are covered by clause (A) above) are otherwise materially changed in any
manner that adversely affects any of the Buyers; (C) the Preferred Shares, (D) the Conversion Shares, (E) the Dividend
Shares, (F) the Warrant Shares and (G) shares of Common Stock or Convertible Securities issued or issuable in connection with
strategic or commercial alliances, acquisitions, mergers, and strategic partnerships, provided, that (x) the primary purpose
of such issuance is not to raise capital as determined in good faith by the board of directors of the Company, (y) the
purchaser or acquirer of the securities in such issuance solely consists of either (I) the actual participants in such
strategic or commercial alliance or strategic or commercial partnership, (II) the actual owners of such assets or securities
acquired in such acquisition or merger or (III) the stockholders, partners or members of the foregoing Persons and (z) the
number or amount of securities issued to such Person by the Company shall not be disproportionate to such Person’s
actual participation in such strategic or commercial alliance or strategic or commercial partnership or ownership of such
assets or securities to be acquired by the Company, as applicable (each of the foregoing in clauses (A) through (G),
collectively the “Excluded Securities”) and (ii) solely during the last thirty calendar days of the
Restricted Period, shares of Common Stock or Convertible Securities issued or issuable in connection with pursuant to a bona
fide retail firm commitment underwritten public offering with a nationally recognized underwriter which generates gross
proceeds to the Company in excess of $30,000,000 (other than an “at-the-market offering” as defined in Rule
415(a)(4) under the 1933 Act, “equity lines”, “confidential market public offerings”,
“unregistered direct offerings”, “wall-crossed offerings”, “pre-marketed offerings” and
such other public offerings that are announced after confidential marketing to investors). “Approved Share
Plan” means any employee benefit plan which has been approved by the board of directors of the Company prior to or
subsequent to the date hereof pursuant to which shares of Common Stock and standard options to purchase Common Stock may be
issued to any employee, officer or director for services provided to the Company or any of its Subsidiaries in their capacity
as such. “Convertible Securities” means any capital stock or other security of the Company or any of its
Subsidiaries that is at any time and under any circumstances directly or indirectly convertible into, exercisable or
exchangeable for, or which otherwise entitles the holder thereof to acquire, any capital stock or other security of the
Company (including, without limitation, Common Stock) or any of its Subsidiaries.


 


(k)Reservation
of Shares. So long as any of the Preferred Shares or Warrants remain outstanding, the Company shall take all action necessary
to at all times have authorized, and reserved for the purpose of issuance, no less than (i) 125% of the maximum number of shares
of Common Stock issuable upon conversion of the Preferred Shares (assuming for purposes hereof, that all the Preferred Shares
issuable hereunder have been issued, such Preferred Shares are convertible at the Conversion Price and without taking into account
any limitations on the conversion of such Preferred Shares set forth in the Certificate of Designations), (ii) the maximum number
of Dividend Shares issuable pursuant to the terms of the Certificate of Designations from the Initial Closing Date through the
Maturity Date (as defined in the Certificate of Designations) (assuming for purposes hereof, that all the Preferred Shares issuable
hereunder have been issued and without taking into account any limitations on the issuance of securities set forth in the Certificate
of Designations) and (iii) the maximum number of shares of Common Stock issuable upon exercise of the Warrants (assuming for purposes
hereof, that all the Warrants issuable hereunder have been issued and without taking into account any limitations on the exercise
of the Warrants set forth in the Warrants).


 






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(l)Conduct
of Business. The business of the Company and its Subsidiaries shall not be conducted in violation of any law, ordinance or
regulation of any Governmental Entity, except where such violations would not result, either individually or in the aggregate,
in a Material Adverse Effect.


 


(m)Variable
Rate Transaction. Until the second anniversary of the Initial Closing Date, the Company
and each Subsidiary shall be prohibited from effecting or entering into an agreement to effect any Subsequent Placement involving
a Variable Rate Transaction. “Variable Rate Transaction” means a transaction in which the Company or any Subsidiary
(i) issues or sells any Convertible Securities either (A) at a conversion, exercise or exchange rate or other price that is based
upon and/or varies with the trading prices of, or quotations for, the shares of Common Stock at any time after the initial issuance
of such Convertible Securities, or (B) with a conversion, exercise or exchange price that is subject to being reset at some future
date after the initial issuance of such Convertible Securities or upon the occurrence of specified or contingent events directly
or indirectly related to the business of the Company or the market for the Common Stock, other than pursuant to a customary “weighted
average” anti-dilution provision or (ii) enters into any agreement (including, without limitation, an “equity line
of credit” or an “at-the-market offering”) whereby the Company or any Subsidiary may sell securities at a future
determined price (other than standard and customary “preemptive” or “participation” rights). Each Buyer
shall be entitled to obtain injunctive relief against the Company and its Subsidiaries to preclude any such issuance, which remedy
shall be in addition to any right to collect damages.


 


(n)Participation
Right. From the date hereof through the eighteen (18) month anniversary of the
Additional Closing Date, neither the Company nor any of its Subsidiaries shall, directly or indirectly, effect any Subsequent
Placement unless the Company shall have first complied with this Section 4(n). The Company acknowledges and agrees
that the right set forth in this Section 4(n) is a right granted by the
Company, separately, to each Buyer.


 


(i)At
least five (5) Trading Days prior to any proposed or intended Subsequent Placement, the Company shall deliver to each Buyer
a written notice of its proposal or intention to effect a Subsequent Placement (each such notice, a
“Pre-Notice”), which Pre-Notice shall not contain any information (including, without limitation,
material, non-public information) other than: (i) a statement that the Company proposes or intends to effect a Subsequent
Placement, (ii) a statement that the statement in clause (i) above does not constitute material, non-public information and
(iii) a statement informing such Buyer that it is entitled to receive an Offer Notice (as defined below) with respect to such
Subsequent Placement upon its written request. Upon the written request of a Buyer within three (3) Trading Days after
the Company’s delivery to such Buyer of such Pre-Notice, and only upon a written request by such Buyer, the Company
shall promptly, but no later than one (1) Trading Day after such request, deliver to such Buyer an irrevocable written notice
(the “Offer Notice”) of any proposed or intended issuance or sale or exchange (the
“Offer”) of the securities being offered (the “Offered Securities”) in a Subsequent
Placement, which Offer Notice shall (w) identify and describe the Offered Securities, (x) describe the price and other terms
upon which they are to be issued, sold or exchanged, and the number or amount of the Offered Securities to be issued, sold or
exchanged, (y) identify the Persons (if known) to which or with which the Offered Securities are to be offered, issued, sold
or exchanged and (z) offer to issue and sell to or exchange with such Buyer in accordance with the terms of the Offer 35% of
the Offered Securities, provided that the number of Offered Securities which such Buyer shall have the right to subscribe
for under this Section 4(n) shall be (a) based on such Buyer’s pro rata portion of the aggregate number of Preferred
Shares purchased hereunder by all Buyers (the “Basic Amount”), and (b) with respect to each Buyer that
elects to purchase its Basic Amount, any additional portion of the Offered Securities attributable to the Basic Amounts of
other Buyers as such Buyer shall indicate it will purchase or acquire should the other Buyers subscribe for less than their
Basic Amounts (the “Undersubscription Amount”).


 






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(ii)To
accept an Offer, in whole or in part, such Buyer must deliver a written notice to the Company prior to the end of the fifth (5th)
Business Day after such Buyer’s receipt of the Offer Notice (the “Offer Period”), setting forth the portion
of such Buyer’s Basic Amount that such Buyer elects to purchase and, if such Buyer shall elect to purchase all of its Basic
Amount, the Undersubscription Amount, if any, that such Buyer elects to purchase (in either case, the “Notice of Acceptance”).
If the Basic Amounts subscribed for by all Buyers are less than the total of all of the Basic Amounts, then such Buyer who has
set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Basic Amounts
subscribed for, the Undersubscription Amount it has subscribed for; provided, however, if the Undersubscription Amounts subscribed
for exceed the difference between the total of all the Basic Amounts and the Basic Amounts subscribed for (the “Available
Undersubscription Amount”), such Buyer who has subscribed for any Undersubscription Amount shall be entitled to purchase
only that portion of the Available Undersubscription Amount as the Basic Amount of such Buyer bears to the total Basic Amounts
of all Buyers that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the extent it deems reasonably
necessary. Notwithstanding the foregoing, if the Company desires to modify or amend the terms and conditions of the Offer prior
to the expiration of the Offer Period, the Company may deliver to each Buyer a new Offer Notice and the Offer Period shall expire
on the fifth (5th) Business Day after such Buyer’s receipt of such new Offer Notice.


 


(iii)The
Company shall have five (5) days from the expiration of the Offer Period above (i) to offer, issue, sell or exchange all or any
part of such Offered Securities as to which a Notice of Acceptance has not been given by a Buyer (the “Refused Securities”)
pursuant to a definitive agreement(s) (the “Subsequent Placement Agreement”), but only to the offerees described
in the Offer Notice (if so described therein) and only upon terms and conditions (including, without limitation, unit prices and
interest rates) that are not more favorable to the acquiring Person or Persons or less favorable to the Company than those set
forth in the Offer Notice and (ii) to publicly announce (a) the execution of such Subsequent Placement Agreement, and (b) either
(x) the consummation of the transactions contemplated by such Subsequent Placement Agreement or (y) the termination of such Subsequent
Placement Agreement, which shall be filed with the SEC on a Current Report on Form 8-K with such Subsequent Placement Agreement
and any documents contemplated therein filed as exhibits thereto.


 






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(iv)In
the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on
the terms specified in Section 4(n)(iii) above), then such Buyer may, at its sole option and in its sole discretion, reduce
the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than
the number or amount of the Offered Securities that such Buyer elected to purchase pursuant to Section 4(n)(iii) above
multiplied by a fraction, (i) the numerator of which shall be the number or amount of Offered Securities the Company actually
proposes to issue, sell or exchange (including Offered Securities to be issued or sold to Buyers pursuant to this Section
4(n)prior to such reduction) and (ii) the denominator of which shall be the original amount of the Offered Securities. In the
event that any Buyer so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance,
the Company may not issue, sell or exchange more than the reduced number or amount of the Offered Securities unless and until
such securities have again been offered to the Buyers in accordance with Section 4(n)(i) above.





 


(v)Upon
the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, such Buyer shall acquire from
the Company, and the Company shall issue to such Buyer, the number or amount of Offered Securities specified in its Notice of Acceptance.
The purchase by such Buyer of any Offered Securities is subject in all cases to the preparation, execution and delivery by the
Company and such Buyer of a separate purchase agreement relating to such Offered Securities reasonably satisfactory in form and
substance to such Buyer and its counsel.


 


(vi)Any
Offered Securities not acquired by a Buyer or other Persons in accordance with this Section 4(n) may not be issued, sold or
exchanged until they are again offered to such Buyer under the procedures specified in this Agreement.


 


(vii)The
Company and each Buyer agree that if any Buyer elects to participate in the Offer, neither the Subsequent Placement Agreement with
respect to such Offer nor any other transaction documents related thereto (collectively, the “Subsequent Placement Documents”)
shall include any term or provision whereby such Buyer shall be required to agree to any restrictions on trading as to any securities
of the Company or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under
or in connection with, any agreement previously entered into with the Company or any instrument received from the Company.


 


(viii)Notwithstanding
anything to the contrary in this Section 4(n) and unless otherwise agreed to by such Buyer, the Company shall either confirm in
writing to such Buyer that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose
its intention to issue the Offered Securities, in either case in such a manner such that such Buyer will not be in possession
of any material, non-public information, by the fifth (5th) Business Day following delivery of the Offer Notice. If
by such fifth (5th) Business Day, no public disclosure regarding a transaction with respect to the Offered Securities
has been made, and no notice regarding the abandonment of such transaction has been received by such Buyer, such transaction shall
be deemed to have been abandoned and such Buyer shall not be in possession of any material, non-public information with respect
to the Company or any of its Subsidiaries. Should the Company decide to pursue such transaction with respect to the Offered Securities,
the Company shall provide such Buyer with another Offer Notice in accordance with, and subject to, the terms of this Section 4
(n) and such Buyer will again have the right of participation set forth in this Section 4(n). The Company shall not be permitted
to deliver more than one Offer Notice to such Buyer in any sixty (60) day period, except as expressly contemplated by the last
sentence of Section 4(n)(ii).


 






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(ix)The
restrictions contained in this Section 4(n) shall not apply in connection with the issuance of any Excluded Securities
(other than securities issued or issuable in connection with pursuant to a bona fide underwritten public offering or other
shelf offering (x) if such underwriter or placement agent, as applicable, has consented to the participation of the Buyers in
such offering and (y) to the extent of the allocation by such underwriter or placement agent, as applicable, of all, or any
portion, as determined by such underwriter or placement agent, as applicable, of the applicable securities being sold in such
offering to the Buyers). The Company shall not circumvent the provisions of this Section 4(n) by providing terms or
conditions to one Buyer that are not provided to all.


 


(o)Passive
Foreign Investment Company. The Company shall conduct its business in such a manner
as will ensure that the Company will not be deemed to constitute a passive foreign investment company within the meaning of Section
1297 of the U.S. Internal Revenue Code of 1986, as amended.


 


(p)Restriction
on Redemption and Cash Dividends. So long as any Warrants are outstanding, the Company
shall not, directly or indirectly, redeem, or declare or pay any cash dividend or distribution on, any securities of the Company
without the prior express written consent of the Buyers.


 


(q)Corporate
Existence. So long as any Buyer owns any Warrants, the Company shall not be party
to any Fundamental Transaction (as defined in the Warrants) unless the Company is in compliance with the applicable provisions
governing Fundamental Transactions set forth in the Warrants.


 


(r)Stock
Splits. Until the Warrants and all warrants issued pursuant to the terms thereof are
no longer outstanding, the Company shall not effect any stock splits, stock dividends, stock combinations, recapitalizations or
other similar transactions (or make any public announcement or disclosure with respect to any of the foregoing) without the prior
written consent of the holders thereof. 


 


(s)Conversion
and Exercise Procedures. Each of the form of Notice of Exercise included in the Warrants
and the form of Notice of Conversion included in the Certificate of Designations set forth the totality of the procedures required
of the Buyers in order to exercise the Warrants or convert the Preferred Shares. No legal opinion, other information or instructions
shall be required of the Buyers to exercise their Warrants or convert their Preferred Shares. The Company shall honor exercises
of the Warrants and conversions of the Preferred Shares and shall deliver the Conversion Shares, Dividend Shares and Warrant Shares
in accordance with the terms, conditions and time periods set forth in the Certificate of Designations and Warrants.


 






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(t)Closing
Documents. On or prior to fourteen (14) calendar days after each Closing Date, the
Company agrees to deliver, or cause to be delivered, to each Buyer and Greenberg Traurig, LLP executed copies of the Transaction
Documents, Securities and other document required to be delivered to any party pursuant to Section 7 hereof. 


 


		5.	REGISTER; TRANSFER AGENT INSTRUCTIONS; LEGEND.



 


(a)Register.
The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate
by notice to each holder of Securities), a register for the Preferred Shares and the Warrants in which the Company shall record
the name and address of the Person in whose name the Preferred Shares and the Warrants have been issued (including the
name and address of each transferee), the number of the Preferred Shares held by such Person, the number of Conversion Shares
issuable upon conversion of the Preferred Shares, the number of Dividend Shares issuable with respect to the Preferred Shares
and the number of Warrant Shares issuable upon exercise of the Warrants held by such Person. The Company shall keep the register
open and available at all times during business hours for inspection of any Buyer or its legal representatives.


 


(b)   Transfer Agent
Instructions. The Company shall issue irrevocable instructions to the Standard Registrar & Transfer, Inc. (together
with any subsequent transfer agent, the “Transfer Agent”) in the form previously provided to the Company (the
“Irrevocable Transfer Agent Instructions”) to issue certificates or credit shares to the applicable balance
accounts at Depository Trust Company (“DTC”), as applicable, registered in the name of each Buyer or its respective
nominee(s), for the Preferred Shares, the Conversion Shares, the Dividend Shares and the Warrant Shares in such amounts as specified
from time to time by each Buyer to the Company upon delivery of the Preferred Shares, exercise of the Preferred Shares, issuance
pursuant to the Certificate of Designations or the exercise of the Warrants (as the case may be). The Company represents and warrants
that no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5(b) will be given by the
Company to the Transfer Agent with respect to the Securities, and that the Securities shall otherwise be freely transferable on
the books and records of the Company. If a Buyer effects a sale, assignment or transfer of the Securities, the Company shall permit
the transfer and shall promptly instruct the Transfer Agent to issue one or more certificates or credit shares to the applicable
balance accounts at DTC in such name and in such denominations as specified by such Buyer to effect such sale, transfer or assignment.
The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to each Buyer. Accordingly,
the Company acknowledges that the remedy at law for a breach of its obligations under this Section 5(b) will be inadequate and
agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section 5(b), that each Buyer shall
be entitled, in addition to all other available remedies, to an order and/or injunction restraining any breach and requiring immediate
issuance and transfer, without the necessity of showing economic loss and without any bond or other security being required. The
Company shall cause its counsel to issue the legal opinion referred to in the Irrevocable Transfer Agent Instructions to the Transfer
Agent to the extent required or requested by the Transfer Agent. Any fees (with respect to the Transfer Agent, counsel to the
Company or otherwise) associated with the issuance of such opinion shall be borne by the Company.


 






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(c)Legends.
Certificates and any other instruments evidencing the Securities shall not bear any restrictive or other legend.


 


		6.	ADDITIONAL CLOSING DELIVERIES OF THE COMPANY. 



 


(a)Deliveries.
The Company shall deliver to each Buyer on each Closing Date each of the following:


 


(i)The
opinion of Cadwalader, Wickersham & Taft LLP, the
Company’s counsel, dated as of such Closing Date, in the form previously provided to the Company.


 


(ii)The
opinion of Lionel Sawyer & Collins, the Company’s
Nevada counsel, dated as of such Closing Date, in the form previously provided to the Company.


 


(iii)A
copy of the Irrevocable Transfer Agent Instructions, in the form previously provided to the Company, that have been delivered to
and acknowledged in writing by the Transfer Agent.


 


(iv)A
certificate evidencing the formation and good standing of the Company and each of its Subsidiaries in each such entity’s
jurisdiction of formation issued by the Secretary of State (or comparable office) of such jurisdiction of formation as of a date
within ten (10) days of such Closing Date.


 


(v)A
certificate evidencing the Company’s qualification as a foreign corporation and good standing issued by the Secretary of
State (or comparable office) of each jurisdiction, if any, in which the Company conducts business and is required to so qualify,
as of a date within ten (10) days of such Closing Date.


 


(vi)A
certified copy of the Articles of Incorporation and the Certificate of Designations as certified by the Secretary of State of Nevada
within two (2) days of such Closing Date.


 


(vii)A
certificate, in the form previously provided to the Company, executed by the Secretary of the Company and dated as of such
Closing Date, as to (i) the resolutions consistent with Section 3(b) as adopted by the Company’s board of directors in
a form reasonably acceptable to such Buyer, (ii) the Articles of Incorporation and the Certificate of Designations and (iii)
the Bylaws, each as in effect at such Closing.


 


(viii)A
letter from the Transfer Agent certifying the number of shares of Common Stock outstanding on the Closing Date immediately prior
to such Closing.


 


(ix)Such
other documents, instruments or certificates relating to the transactions contemplated by this Agreement as such Buyer or its counsel
may reasonably request.


 



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		7.	TERMINATION. 



 


In the event
that the Initial Closing shall not have occurred with respect to a Buyer within five (5) days after the date hereof, then
such Buyer shall have the right to terminate its obligations under this Agreement with respect to itself at any time on or
after the close of business on such date without liability of such Buyer to any other party; provided, however, (i) the right
to terminate this Agreement under this Section 7shall not be available to such Buyer if the failure of the transactions
contemplated by this Agreement to have been consummated by such date is the result of such Buyer’s breach of this
Agreement and (ii) the abandonment of the sale and purchase of the Preferred Shares and the Warrants shall be applicable only
to such Buyer providing such written notice, provided further that no such termination shall affect any obligation of the
Company under this Agreement to reimburse such Buyer for the expenses described in Section 4(g) above, except if (x) such
breach is caused by such Buyer and (y) solely to the extent of any such reimbursement amounts in excess of $30,000. Nothing
contained in this Section 7 shall be deemed to release any party from any liability for any breach by such party of the terms
and provisions of this Agreement or the other Transaction Documents or to impair the right of any party to compel specific
performance by any other party of its obligations under this Agreement or the other Transaction Documents.


 


		8.	MISCELLANEOUS.



 


(a)Governing
Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict
of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State 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, 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 brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. 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 to such party at the address for such 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 manner permitted by law. The Company hereby appoints
CT Corporation System, with offices at 111 Eighth Avenue, New York, New York 10011, as its agent for service of process in New
York. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.


 


(b)Counterparts.
This Agreement may be executed in two or more identical counterparts, all of which 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. In the event that
any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of
an executed signature page, such signature page 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 signature page were an original thereof.


 






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(c)Headings;
Gender. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation
of, this Agreement. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine,
feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,” “include”
and words of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,”
“hereunder,” “hereof” and words of like import refer to this entire Agreement instead of just the provision
in which they are found.


 


(d)Severability.
If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without
material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity
or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations
of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will
endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s),
the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).


 






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(e)Entire
Agreement; Amendments. This Agreement, the other Transaction Documents and the schedules and exhibits attached hereto and
thereto and the instruments referenced herein and therein supersede all other prior oral or written agreements between the Buyers,
the Company, their affiliates and Persons acting on their behalf solely with respect to the matters contained herein and therein,
and this Agreement, the other Transaction Documents, the schedules and exhibits attached hereto and thereto and the instruments
referenced herein and therein contain the entire understanding of the parties solely with respect to the matters covered herein
and therein; provided, however, nothing contained in this Agreement or any other Transaction Document shall (or shall be deemed
to) (i) have any effect on any agreements any Buyer has entered into with the Company or any of its Subsidiaries prior to the
date hereof with respect to any prior investment made by such Buyer in the Company or (ii) waive, alter, modify or amend in any
respect any obligations of the Company or any of its Subsidiaries, or any rights of or benefits to any Buyer or any other Person,
in any agreement entered into prior to the date hereof between or among the Company and/or any of its Subsidiaries and any Buyer
and all such agreements shall continue in full force and effect. Except as specifically set forth herein or therein, neither the
Company nor any Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. For clarification
purposes, the Recitals are part of this Agreement. No provision of this Agreement may be amended other than by an instrument in
writing signed by the Company and each of the Buyers. No waiver shall be effective unless it is in writing and signed by an authorized
representative of the waiving party. No consideration 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 also is offered to all of the
parties to the Transaction Documents, all holders of Preferred Shares or all holders of the Warrants (as the case may be). The
Company has not, directly or indirectly, made any agreements with any Buyers relating to the terms or conditions of the transactions
contemplated by the Transaction Documents except as set forth in the Transaction Documents. Without limiting the foregoing, the
Company confirms that, except as set forth in this Agreement, no Buyer has made any commitment or promise or has any other obligation
to provide any financing to the Company, any Subsidiary or otherwise. As a material inducement for each Buyer to enter into this
Agreement, the Company expressly acknowledges and agrees that (i) no due diligence or other investigation or inquiry conducted
by a Buyer, any of its advisors or any of its representatives shall affect such Buyer’s right to rely on, or shall modify
or qualify in any manner or be an exception to any of, the Company’s representations and warranties contained in this Agreement
or any other Transaction Document, (ii) nothing contained in the Registration Statement, the Prospectus or the Prospectus Supplement
shall affect such Buyer’s right to rely on, or shall modify or qualify in any manner or be an exception to any of, the Company’s
representations and warranties contained in this Agreement or any other Transaction Document and (iii) unless a provision of this
Agreement or any other Transaction Document is expressly preceded by the phrase “except as disclosed in the SEC Documents,”
nothing contained in any of the SEC Documents shall affect such Buyer’s right to rely on, or shall modify or qualify in
any manner or be an exception to any of, the Company’s representations and warranties contained in this Agreement or any
other Transaction Document.


 


(f)Notices.
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must
be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when
sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending
party); or (iii) one (1) Business Day after deposit with an overnight courier service with next day delivery specified, in each
case, properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:


 


If to the Company:


 


China Shen
Zhou Mining & Resources, Inc.


No. 166 Fushi Road

Zeyang Tower

Shijingshan District

Beijing, China 100043

86-010-8890-6927

Telephone: +86-010-8890-9976

Facsimile: +86-010-8890-6927

Attention: Ms. Xiaojing Yu


 


With a copy (for informational
purposes only) to:


 


Cadwalader, Wickersham & Taft
LLP

2301 China Central Place Tower 2

No. 79 Jianguo Road

Beijing 100025, China

Telephone: +86-010-6599-7270

Facsimile: +86-010-6599-7300

Attention: Jiannan Zhang, Esq.


 






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If to the Transfer Agent:


 


Standard Registrar
& Transfer


12528 South
1840 East


Draper, UT 84020


Telephone: 801-571-8844


Facsimile: 801-571-2551


 


If to a Buyer, to its address and facsimile
number set forth on the Schedule of Buyers, with copies to such Buyer’s representatives as set forth on the Schedule of Buyers,


 


with a copy (for informational
purposes only) to:


 


Greenberg Traurig, LLP

MetLife Building

200 Park Avenue

New York, NY 10166

Telephone: (212) 801-9200

Facsimile: (212) 805-9222

Attention: Michael A. Adelstein, Esq.


 


or to such other address and/or facsimile
number and/or to the attention of such other Person as the recipient party has specified by written notice given to each other
party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine
containing the time, date, recipient facsimile number and an image of the first page of such transmission or (C) provided by an
overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from an overnight courier
service in accordance with clause (i), (ii) or (iii) above, respectively.


 


(g)Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors
and assigns, including, as contemplated below, any assignee of any of the Securities. The Company shall not assign this Agreement
or any rights or obligations hereunder without the prior written consent of each of the Buyers, including, without limitation,
by way of a Fundamental Transaction (as defined in the Warrants) (unless the Company is in compliance with the applicable provisions
governing Fundamental Transactions set forth in the Warrants). A Buyer may assign some or all of its rights hereunder in connection
with any transfer of any of its Securities without the consent of the Company, in which event such assignee shall be deemed to
be a Buyer hereunder with respect to such assigned rights.


 


(h)No
Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, other than
the Indemnitees referred to in Section 8


(k).


 


(i)Survival.
The representations, warranties, agreements and covenants shall survive each Closing. Each Buyer shall be responsible only for
its own representations, warranties, agreements and covenants hereunder.


 






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


 


(k)Indemnification.


 


(i)In
consideration of each Buyer’s execution and delivery of the Transaction Documents and acquiring the Securities thereunder
and in addition to all of the Company’s other obligations under the Transaction Documents, the Company shall defend, protect,
indemnify and hold harmless each Buyer and each holder of any Securities and all of their stockholders, partners, members, officers,
directors, employees and direct or indirect investors and any of the foregoing Persons’ agents or other representatives
(including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively,
the “Indemnitees”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties,
fees, liabilities and damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to
the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the
“Indemnified Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or relating to (a)
any misrepresentation or breach of any representation or warranty made by the Company in any of the Transaction Documents, (b)
any breach of any covenant, agreement or obligation of the Company contained in any of the Transaction Documents or (c) any cause
of action, suit or claim brought or made against such Indemnitee by a third party (including for these purposes a derivative action
brought on behalf of the Company) and arising out of or resulting from (i) the execution, delivery, performance or enforcement
of any of the Transaction Documents, (ii) any transaction financed or to be financed in whole or in part, directly or indirectly,
with the proceeds of the issuance of the Securities, (iii) any disclosure properly made by such Buyer pursuant to Section 4(i),
or (iv) the status of such Buyer or holder of the Securities as an investor in the Company pursuant to the transactions contemplated
by the Transaction Documents. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason,
the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law.


 






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(ii)Promptly
after receipt by an Indemnitee under this Section 8(k) of notice of the commencement of any action or proceeding (including any
governmental action or proceeding) involving an Indemnified Liability, such Indemnitee shall, if a claim in respect thereof is
to be made against the Company under this Section 8(k), deliver to the Company a written notice of the commencement thereof, and
the Company shall have the right to participate in, and, to the extent the Company so desires, to assume control of the defense
thereof with counsel mutually satisfactory to the Company and the Indemnitee; provided, however, that an Indemnitee shall have
the right to retain its own counsel with the fees and expenses of such counsel to be paid by the Company if: (i) the Company has
agreed in writing to pay such fees and expenses; (ii) the Company shall have failed promptly to assume the defense of such Indemnified
Liability and to employ counsel reasonably satisfactory to such Indemnitee in any such Indemnified Liability; or (iii) the named
parties to any such Indemnified Liability (including any impleaded parties) include both such Indemnitee and the Company, and
such Indemnitee shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to
represent such Indemnitee and the Company (in which case, if such Indemnitee notifies the Company in writing that it elects to
employ separate counsel at the expense of the Company, then the Company shall not have the right to assume the defense thereof
and such counsel shall be at the expense of the Company), provided further, that in the case of clause (iii) above the Company
shall not be responsible for the reasonable fees and expenses of more than one (1) separate legal counsel for such Indemnitee.
The Indemnitee shall reasonably cooperate with the Company in connection with any negotiation or defense of any such action or
Indemnified Liability by the Company and shall furnish to the Company all information reasonably available to the Indemnitee which
relates to such action or Indemnified Liability. The Company shall keep the Indemnitee reasonably apprised at all times as to
the status of the defense or any settlement negotiations with respect thereto. The Company shall not be liable for any settlement
of any action, claim or proceeding effected without its prior written consent, provided, however, that the Company shall not unreasonably
withhold, delay or condition its consent. The Company shall not, without the prior written consent of the Indemnitee, consent
to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof
the giving by the claimant or plaintiff to such Indemnitee of a release from all liability in respect to such Indemnified Liability
or litigation, and such settlement shall not include any admission as to fault on the part of the Indemnitee. Following indemnification
as provided for hereunder, the Company shall be subrogated to all rights of the Indemnitee with respect to all third parties,
firms or corporations relating to the matter for which indemnification has been made. The failure to deliver written notice to
the Company within a reasonable time of the commencement of any such action shall not relieve the Company of any liability to
the Indemnitee under this Section 8(k), except to the extent that the Company is materially and adversely prejudiced in its ability
to defend such action.


 


(iii)The
indemnification required by this Section 8(k) 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 Indemnified Liabilities are incurred.


 


(iv)The
indemnity agreement contained herein shall be in addition to (A) any cause of action or similar right of the Indemnitee against
the Company or others, and (B) any liabilities the Company may be subject to pursuant to the law.


 


(l)Construction.
The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and
no rules of strict construction will be applied against any party. No specific representation or warranty shall limit the generality
or applicability of a more general representation or warranty. Each and every reference to share prices, shares of Common Stock
and any other numbers in this Agreement that relate to the Common Stock shall be automatically adjusted for stock splits, stock
dividends, stock combinations and other similar transactions that occur with respect to the Common Stock after the date of this
Agreement.


 






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(m)Remedies.
Each Buyer and each holder of any Securities shall have all rights and remedies set forth in the Transaction Documents and all
rights and remedies which such holders have been granted at any time under any other agreement or contract and all of the rights
which such holders have under any law. Any Person having any rights under any provision of this Agreement shall be entitled to
enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any breach of any
provision of this Agreement and to exercise all other rights granted by law. Furthermore, the Company recognizes that in the event
that it fails to perform, observe, or discharge any or all of its obligations under the Transaction Documents, any remedy at law
may prove to be inadequate relief to the Buyers. The Company therefore agrees that the Buyers shall be entitled to seek specific
performance and/or temporary, preliminary and permanent injunctive or other equitable relief from any court of competent jurisdiction
in any such case without the necessity of proving actual damages and without posting a bond or other security.


 


(n)Withdrawal
Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction
Documents, whenever any Buyer exercises a right, election, demand or option under a Transaction Document and the Company does
not timely perform its related obligations within the periods therein provided, then such Buyer may rescind or withdraw, in its
sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part
without prejudice to its future actions and rights.


 


(o)Payment
Set Aside; Currency. To the extent that the Company makes a payment or payments to any Buyer hereunder or pursuant to any
of the other Transaction Documents or any of the Buyers enforce or exercise their rights hereunder or thereunder, and such payment
or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent
or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company,
a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, foreign, state or federal
law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred. Unless otherwise expressly indicated, all dollar amounts referred to in this Agreement
and the other Transaction Documents are in United States Dollars (“U.S. Dollars”), and all amounts owing under
this Agreement and all other Transaction Documents shall be paid in U.S. Dollars. All amounts denominated in other currencies
(if any) shall be converted into the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation.
“Exchange Rate” means, in relation to any amount of currency to be converted into U.S. Dollars pursuant
to this Agreement, the U.S. Dollar exchange rate as published in the Wall Street Journal on the relevant date of calculation.


 


(p)Judgment
Currency.


 


(i)If
for the purpose of obtaining or enforcing judgment against the Company in connection with this Agreement or any other
Transaction Document in any court in any jurisdiction it becomes necessary to convert into any other currency (such other
currency being hereinafter in this Section 8(p) referred to as the “Judgment Currency”) an amount due in
US Dollars under this Agreement, the conversion shall be made at the Exchange Rate prevailing on the Trading Day immediately
preceding:


 






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		(1)	the date actual payment of the amount due, in the case of any proceeding in the courts of New York or in the courts of any
other jurisdiction that will give effect to such conversion being made on such date: or



 


		(2)	the date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the
date as of which such conversion is made pursuant to this Section 8(p)(i)(2) being hereinafter referred to as the “Judgment Conversion Date”).






 


(ii)If
in the case of any proceeding in the court of any jurisdiction referred to in Section 8(p)


(i)(2) above, there is a change in the Exchange Rate prevailing between the Judgment Conversion Date and
the date of actual payment of the amount due, the applicable party shall pay such adjusted amount as may be necessary to ensure
that the amount paid in the Judgment Currency, when converted at the Exchange Rate prevailing on the date of payment, will produce
the amount of U.S. Dollars which could have been purchased with the amount of Judgment Currency stipulated in the judgment or judicial
order at the Exchange Rate prevailing on the Judgment Conversion Date.


 


(iii)Any
amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment being obtained
for any other amounts due under or in respect of this Agreement.


 


(q)Independent
Nature of Buyers’ Obligations and Rights. The obligations of each Buyer under the Transaction Documents are several
and not joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the performance of the
obligations of any other Buyer under any Transaction Document. Nothing contained herein or in any other Transaction Document,
and no action taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as, and the Company acknowledges
that the Buyers do not so constitute, a partnership, an association, a joint venture or any other kind of group or entity, or
create a presumption that the Buyers are in any way acting in concert or as a group or entity with respect to such obligations
or the transactions contemplated by the Transaction Documents or any matters, and the Company acknowledges that the Buyers are
not acting in concert or as a group, and the Company shall not assert any such claim, with respect to such obligations or the
transactions contemplated by the Transaction Documents. The decision of each Buyer to purchase Securities pursuant to the Transaction
Documents has been made by such Buyer independently of any other Buyer. Each Buyer acknowledges that no other Buyer has acted
as agent for such Buyer in connection with such Buyer making its investment hereunder and that no other Buyer will be acting as
agent of such Buyer in connection with monitoring such Buyer’s investment in the Securities or enforcing its rights under
the Transaction Documents. The Company and each Buyer confirms that each Buyer has independently participated with the Company
in the negotiation of the transaction contemplated hereby with the advice of its own counsel and advisors. Each Buyer shall be
entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement
or out of any other Transaction Documents, and it shall not be necessary for any other Buyer to be joined as an additional party
in any proceeding for such purpose. The use of a single agreement to effectuate the purchase and sale of the Securities contemplated
hereby was solely in the control of the Company, not the action or decision of any Buyer, and was done solely for the convenience
of the Company and not because it was required or requested to do so by any Buyer. It is expressly understood and agreed that
each provision contained in this Agreement and in each other Transaction Document is between the Company and a Buyer, solely,
and not between the Company and the Buyers collectively and not between and among the Buyers.


 






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		(r)	Taxes.



 


(i)Without
limiting any other provision of this Agreement, any and all payments by the Company hereunder shall be made free and clear of and
without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities
with respect thereto (collectively referred to as “Taxes”) unless the Company is required to withhold or deduct
any amounts for, or on account of Taxes pursuant to any applicable law. If the Company shall be required to deduct any Taxes from
or in respect of any sum payable hereunder to any Buyer, (i) the sum payable shall be increased by the amount by which the sum
payable would otherwise have to be increased (the “make-whole amount”) to ensure that after making all required
deductions (including deductions applicable to the make-whole amount) such Buyer would receive an amount equal to the sum it would
have received had no such deductions been made, (ii) the Company shall make such deductions and (iii) the Company shall pay the
full amount withheld or deducted to the relevant governmental authority within the time required.


 


(ii)In
addition, the Company agrees to pay to the relevant governmental authority in accordance with applicable law any present or future
stamp or documentary taxes or any other excise or property taxes, charges or similar levies that arise from any payment made hereunder
or in connection with the execution, delivery, registration or performance of, or otherwise with respect to, this Agreement (“Other
Taxes”).


 


(iii)The
Company shall deliver to each Buyer official receipts, if any, in respect of any Taxes and Other Taxes payable hereunder promptly
after payment of such Taxes and Other Taxes or other evidence of payment reasonably acceptable to each such Buyer.


 


(iv)If
the Company fails to pay any amounts in accordance with this Section 8(r), the Company shall indemnify each Buyer within ten (10)
calendar days after written demand therefor, for the full amount of any Taxes or Other Taxes, plus any related interest or penalties,
that are paid by the applicable Buyer to the relevant governmental authority or other relevant governmental authority as a result
of such failure.


 


(v)The
obligations of the Company under this Section 8(r) shall survive the termination of this Agreement and the payment of all
amounts payable hereunder.


 


[signature
pages follow]


 



    	45



    	 



    



 





IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first
written above.


 


 


	 	COMPANY:
	 	 
	 	China Shen Zhou Mining & Resources, Inc.






	 	 	 
	 	 	 
	 	 	 
	 	
        By:

        
	
	 	 	Name:
	 	 	Title











  





	 	BUYER:
	 	 	 
	 	
	 	 	 
	 	 	 
	 	 	 
	 	By:	
	 	 	Name:
	 	 	Title: