American Petro-Hunter, Inc.: Exhibit 10.1 - Filed by newsfilecorp.com






Execution Version

COMMON STOCK PURCHASE AGREEMENT 

Dated as of March 22, 2013 

by and between 

AMERICAN PETRO-HUNTER INC. 

and

HANOVER HOLDINGS I, LLC, 
a New York limited liability
company




TABLE OF CONTENTS

	 	 	  	Page      
	 	 	  	  
	ARTICLE
      I DEFINITIONS 	1
      
	 	  
	ARTICLE
      II PURCHASE AND SALE OF COMMON STOCK 	1
      
	 	 	  	  
	 	Section
      2.1. 	Purchase
      and Sale of Stock 	1
      
	 	Section
      2.2. 	Closing
      Date; Settlement Dates 	2
      
	 	Section
      2.3. 	Initial
      Public Announcements and Required Filings 	2
      
	 	 	  	  
	ARTICLE
      III DRAW DOWN TERMS 	3
      
	 	 	  	  
	 	Section
      3.1. 	Draw
      Down Notice 	3
      
	 	Section
      3.2. 	Limitation
      of Draw Downs 	4
      
	 	Section
      3.3. 	Reduction
      of Commitment 	4
      
	 	Section
      3.4. 	Below
      Floor Price 	4
      
	 	Section
      3.5. 	Settlement
      	4
      
	 	Section
      3.6. 	Failure
      to Deliver Shares 	4
      
	 	Section
      3.7. 	Certain
      Limitations 	5
      
	 	Section
      3.8. 	Blackout
      Periods 	6
      
	 	 	  	  
	ARTICLE
      IV REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE INVESTOR 	7
      
	 	 	  	  
	 	Section
      4.1. 	Organization
      and Standing of the Investor 	7
      
	 	Section
      4.2. 	Authorization
      and Power 	7
      
	 	Section
      4.3. 	No
      Conflicts 	7
      
	 	Section
      4.4. 	Investment
      Purpose 	8
      
	 	Section
      4.5. 	Accredited
      Investor Status 	8
      
	 	Section
      4.6. 	Reliance
      on Exemptions 	8
      
	 	Section
      4.7. 	Information
      	8
      
	 	Section
      4.8. 	No
      Governmental Review 	9
      
	 	Section
      4.9. 	No
      General Solicitation 	9
      
	 	Section
      4.10. 	Not
      an Affiliate 	9
      
	 	Section
      4.11. 	Statutory
      Underwriter Status 	9
      
	 	Section
      4.12. 	Resales
      of Securities 	9
      
	 	 	  	  
	ARTICLE
      V REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY 	9
      
	 	 	  	  
	 	Section
      5.1. 	Organization,
      Good Standing and Power 	9
      
	 	Section
      5.2. 	Authorization,
      Enforcement 	10
      
	 	Section
      5.3. 	Capitalization
      and Voting Rights 	10
      
	 	Section
      5.4. 	Issuance
      of Securities 	11
      
	 	Section
      5.5. 	No
      Conflicts 	11
      
	 	Section
      5.6. 	Commission
      Documents, Financial Statements 	11
      







	 	Section
      5.7. 	Subsidiaries
      	13
      
	 	Section
      5.8. 	No
      Material Adverse Effect 	14
      
	 	Section
      5.9. 	No
      Undisclosed Liabilities 	14
      
	 	Section
      5.10. 	No
      Undisclosed Events or Circumstances 	14
      
	 	Section
      5.11. 	Indebtedness;
      Solvency 	14
      
	 	Section
      5.12. 	Title
      To Assets 	14
      
	 	Section
      5.13. 	Actions
      Pending 	15
      
	 	Section
      5.14. 	Compliance
      With Law 	15
      
	 	Section
      5.15. 	Certain
      Fees 	15
      
	 	Section
      5.16. 	Disclosure
      	15
      
	 	Section
      5.17. 	Operation
      of Business 	16
      
	 	Section
      5.18. 	Environmental
      Compliance 	17
      
	 	Section
      5.19. 	Material
      Agreements 	17
      
	 	Section
      5.20. 	Transactions
      With Affiliates 	18
      
	 	Section
      5.21. 	Employees
      	18
      
	 	Section
      5.22. 	Use
      of Proceeds 	18
      
	 	Section
      5.23. 	Investment
      Company Act Status 	18
      
	 	Section
      5.24. 	ERISA
      	18
      
	 	Section
      5.25. 	Taxes
      	19
      
	 	Section
      5.26. 	Insurance
      	19
      
	 	Section
      5.27. 	U.S.
      Real Property Holding Corporation 	19
      
	 	Section
      5.28. 	Exemption
      from Registration; Valid Issuances 	19
      
	 	Section
      5.29. 	No
      General Solicitation or Advertising 	20
      
	 	Section
      5.30. 	No
      Integrated Offering 	20
      
	 	Section
      5.31. 	Dilutive
      Effect 	20
      
	 	Section
      5.32. 	Manipulation
      of Price 	20
      
	 	Section
      5.33. 	Securities
      Act 	20
      
	 	Section
      5.34. 	Listing
      and Maintenance Requirements 	21
      
	 	Section
      5.35. 	Application
      of Takeover Protections 	21
      
	 	Section
      5.36. 	Foreign
      Corrupt Practices Act 	21
      
	 	Section
      5.37. 	Money
      Laundering Laws 	21
      
	 	Section
      5.38. 	OFAC
      	22
      
	 	Section
      5.39. 	Mineral
      Resource Properties and Surface Rights 	22
      
	 	Section
      5.40. 	Royalties
      and Commissions 	22
      
	 	Section
      5.41. 	Acknowledgement
      Regarding Investor’s Acquisition of Securities 	22
      
	 	 	  	  
	ARTICLE
      VI ADDITIONAL COVENANTS 	23
      
	 	 	  	  
	 	Section
      6.1. 	Securities
      Compliance 	23
      
	 	Section
      6.2. 	Reservation
      of Common Stock 	23
      
	 	Section
      6.3. 	Registration
      and Listing 	23
      
	 	Section
      6.4. 	Compliance
      with Laws. 	23
      
	 	Section
      6.5. 	Keeping
      of Records and Books of Account; Due Diligence. 	24
      
	 	Section
      6.6. 	Limitations
      on Holdings and Issuances 	25
      
	 	Section
      6.7. 	Other
      Agreements and Alternate Transactions 	25
      


ii





	 	Section
      6.8. 	Corporate
      Existence 	27
      
	 	Section
      6.9. 	Fundamental
      Transaction 	27
      
	 	Section
      6.10. 	Delivery
      of Registration Statement and Prospectus; Subsequent Changes 	27
      
	 	Section
      6.11. 	Amendments
      to the Registration Statement; Prospectus Supplements 	28
      
	 	Section
      6.12. 	Stop
      Orders 	28
      
	 	Section
      6.13. 	Selling
      Restrictions 	29
      
	 	Section
      6.14. 	Effective
      Registration Statement 	29
      
	 	Section
      6.15. 	Blue
      Sky 	29
      
	 	Section
      6.16. 	Non-Public
      Information 	30
      
	 	Section
      6.17. 	Broker/Dealer
      	30
      
	 	Section
      6.18. 	Disclosure
      Schedule 	30
      
	 	 	  	  
	ARTICLE
      VII CONDITIONS TO CLOSING AND CONDITIONS TO THE SALE AND PURCHASE OF THE
      SHARES 	31
      
	 	 	  	  
	 	Section
      7.1. 	Conditions
      Precedent to Closing 	31
      
	 	Section
      7.2. 	Conditions
      Precedent to a Draw Down 	32
      
	 	 	  	  
	ARTICLE
      VIII TERMINATION 	35
      
	 	 	  	  
	 	Section
      8.1. 	Termination
      	35
      
	 	Section
      8.2. 	Other
      Termination 	35
      
	 	Section
      8.3. 	Effect
      of Termination 	36
      
	 	 	  	  
	ARTICLE
      IX INDEMNIFICATION 	37
      
	 	 	  	  
	 	Section
      9.1. 	Indemnification
      of Investor 	37
      
	 	Section
      9.2. 	Indemnification
      Procedures 	38
      
	 	 	  	  
	ARTICLE
      X MISCELLANEOUS 	39
      
	 	 	  	  
	 	Section
      10.1. 	Fees
      and Expenses. 	39
      
	 	Section
      10.2. 	Specific
      Enforcement, Consent to Jurisdiction, Waiver of Jury Trial. 	41
      
	 	Section
      10.3. 	Entire
      Agreement; Amendment 	41
      
	 	Section
      10.4. 	Notices
      	42
      
	 	Section
      10.5. 	Waivers
      	43
      
	 	Section
      10.6. 	Headings
      	43
      
	 	Section
      10.7. 	Construction
      	43
      
	 	Section
      10.8. 	Successors
      and Assigns 	43
      
	 	Section
      10.9. 	No
      Third Party Beneficiaries 	43
      
	 	Section
      10.10. 	Governing
      Law 	43
      
	 	Section
      10.11. 	Survival
      	43
      
	 	Section
      10.12. 	Counterparts
      	44
      
	 	Section
      10.13. 	Publicity
      	44
      
	 	Section
      10.14. 	Severability
      	44
      
	 	Section
      10.15. 	Further
      Assurances 	45
      


iii





	Annex I. 	Definitions
    


iv




COMMON STOCK PURCHASE AGREEMENT

     This COMMON STOCK PURCHASE
AGREEMENT is made and entered into as of March 22, 2013 (this
“Agreement”), by and between Hanover Holdings I, LLC, a New York
limited liability company (the “Investor”), and American
Petro-Hunter Inc., a corporation organized and existing under the laws of the
State of Nevada (the “Company”).

RECITALS

     WHEREAS, the parties
desire that, upon the terms and subject to the conditions and limitations set
forth herein, the Company may issue and sell to the Investor, from time to time
as provided herein, and the Investor shall purchase from the Company, up to
$5,000,000 of newly issued shares of the Company’s common stock, $0.001 par
value (“Common Stock”);

     WHEREAS, such investments
will be made in reliance upon the provisions of Section 4(a)(2) of the
Securities Act (“Section 4(a)(2)”) and Rule 506 of Regulation D
promulgated by the Commission under the Securities Act (“Regulation
D”), and upon such other exemption from the registration requirements of
the Securities Act as may be available with respect to any or all of the
investments in Common Stock to be made hereunder; 

     WHEREAS, the parties
hereto are concurrently entering into a Registration Rights Agreement in the
form of Exhibit A hereto (the “Registration Rights
Agreement”), pursuant to which the Company shall register the
Registrable Securities (as defined in the Registration Rights Agreement), upon
the terms and subject to the conditions set forth therein; and

     WHEREAS, in consideration
for the Investor’s execution and delivery of this Agreement, the Company has
issued to the Investor the Commitment Shares prior to the date of this
Agreement;

     NOW, THEREFORE, the
parties hereto, intending to be legally bound, hereby agree as follows:

ARTICLE I 
DEFINITIONS

     Capitalized terms used in this
Agreement shall have the meanings ascribed to such terms in Annex I
hereto, and hereby made a part hereof, or as otherwise set forth in this
Agreement.

ARTICLE II
PURCHASE AND SALE OF COMMON
STOCK

     Section 2.1.
Purchase and Sale of Stock. Upon the terms and subject to the
conditions of this Agreement, during the Investment Period, the Company in its
discretion may issue and sell to the Investor, and the Investor shall purchase
from the Company, up to $5,000,000 (the “Total Commitment”) of
duly authorized, validly issued, fully paid and nonassessable shares of Common
Stock (the “Aggregate Limit”), by the delivery to the Investor of
Draw Down Notices as provided in Article III hereof.




     Section 2.2. Closing
Date; Settlement Dates. This Agreement shall become effective and
binding (the “Closing”) upon the delivery of counterpart signature
pages of this Agreement and the Registration Rights Agreement executed by each
of the parties hereto and thereto, and the delivery of all other documents,
instruments and writings required to be delivered at the Closing, in each case
as provided in Section 7.1, to the offices of Greenberg Traurig, LLP, 200 Park
Avenue, New York, New York 10166, at 5:00 p.m., New York City time, on the
Closing Date. In consideration of and in express reliance upon the
representations, warranties and covenants contained in, and upon the terms and
subject to the conditions of, this Agreement, during the Investment Period the
Company shall issue and sell to the Investor, and the Investor shall purchase
from the Company, the Shares in respect of each Draw Down. The issuance and sale
of Shares to the Investor pursuant to any Draw Down shall occur on the
applicable Settlement Date in accordance with Section 3.5, provided that
all of the conditions precedent thereto set forth in Article VII theretofore
shall have been fulfilled on or prior to such Settlement Date.

     Section 2.3. Initial
Public Announcements and Required Filings. The Company shall, at or
before 8:30 a.m., New York City time, on the first Trading Day after the
Closing, issue a press release (the “Press Release”) reasonably
acceptable to the Investor disclosing the execution of this Agreement and the
Registration Rights Agreement by the Company and the Investor and the issuance
of the Commitment Shares to the Investor, and briefly describing the
transactions contemplated thereby. At or before 8:30 a.m., New York City time,
on the second Trading Day following the Closing Date, the Company shall 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 Exchange
Act and attaching copies of each of this Agreement, the Registration Rights
Agreement and the Press Release as exhibits thereto (including all exhibits
thereto, the “Current Report”). The Company shall provide the
Investor a reasonable opportunity to comment on a draft of the Current Report
prior to filing the Current Report with the Commission, shall give due
consideration to all such comments and shall not file the Current Report to the
extent the Investor reasonably objects to the form or content thereof
(provided, however, that the failure of the Investor to
make such objection shall not relieve the Company of any obligation or liability
under this Agreement or affect the Investor’s right to rely on the
representations and warranties made by the Company in this Agreement). From and
after the issuance of the Press Release and the filing of the Current Report,
the Company shall have disclosed all material, nonpublic information delivered
to the Investor (or the Investor’s representatives or agents) by the Company or
any of its Subsidiaries, or any of their respective officers, directors,
employees, agents or representatives (if any) in connection with the
transactions contemplated by the Transaction Documents. The Investor covenants
that until such time as the transactions contemplated by this Agreement are
publicly disclosed by the Company as described in this Section 2.3, the Investor
will maintain the confidentiality of all disclosures made to it in connection
with the transactions contemplated by the Transaction Documents (including the
existence and terms of the transactions), except that the Investor may disclose
the terms of such transactions to its financial, accounting, legal and other
advisors (provided that the Investor directs such Persons to maintain the
confidentiality of such information). Not later than 15 calendar days following
the Closing Date, the Company shall file a Form D with respect to the Securities
in accordance with Regulation D and shall provide a copy thereof to the Investor
promptly after such filing. The Company shall prepare and file with the
Commission the Registration Statement (including the Prospectus) covering only
the resale by the Investor of the Registrable Securities in accordance with the Securities Act
and the Registration Rights Agreement. At or before 8:30 a.m. (New York City
time) on the Trading Day immediately following the Effective Date, the Company
shall file with the Commission in accordance with Rule 424(b) under the
Securities Act the final Prospectus to be used in connection with sales pursuant
to the Registration Statement. If the transactions contemplated by any Draw Down
are material to the Company (individually or collectively with all other prior
Draw Downs, the consummation of which have not previously been reported in any
Prospectus Supplement filed with the Commission under Rule 424(b) under the
Securities Act or in any report, statement or other document filed by the
Company with the Commission under the Exchange Act), or if otherwise required
under the Securities Act (or the interpretations of the Commission thereof), in
each case as reasonably determined by the Company or the Investor, then, on the
first Trading Day immediately following the last Trading Day of the Pricing
Period with respect to such Draw Down, the Company shall file with the
Commission a Prospectus Supplement pursuant to Rule 424(b) under the Securities
Act with respect to the applicable Draw Down(s), disclosing the total Draw Down
Amount Requested pursuant to such Draw Down(s), the total number of Shares that
are to be (and, if applicable, have been) issued and sold to the Investor
pursuant to such Draw Down(s), the total purchase price for the Shares subject
to such Draw Down(s), the applicable Discount Price(s) for such Shares and the
net proceeds that are to be (and, if applicable, have been) received by the
Company from the sale of such Shares. To the extent not previously disclosed in
the Prospectus or a Prospectus Supplement, the Company shall disclose in its
Quarterly Reports on Form 10-Q and in its Annual Reports on Form 10-K the
information described in the immediately preceding sentence relating to all Draw
Down(s) consummated during the relevant fiscal quarter, and include each such
Quarterly Report on Form 10-Q and Annual Report on Form 10-K in a Prospectus
Supplement and file such Prospectus Supplement with the Commission under Rule
424(b) under the Securities Act.

2




ARTICLE III 
DRAW DOWN TERMS

     Subject to the satisfaction of
the conditions set forth in this Agreement, the parties agree as follows:

     Section 3.1. Draw
Down Notice. From time to time during the Investment Period, the Company
may, in its sole discretion, no later than 9:30 a.m. (New York City time) on the
first Trading Day of the Pricing Period, provide to the Investor a Draw Down
Notice, substantially in the form attached hereto as Exhibit B (the
“Draw Down Notice”), which Draw Down Notice shall become effective
at 9:30 a.m. (New York City time) on the first Trading Day of the Pricing Period
specified in the Draw Down Notice; provided, however, that if the
Company delivers the Draw Down Notice to the Investor later than 9:30 a.m. (New
York City time) on a Trading Day, then the first Trading Day of such Pricing
Period shall not be the Trading Day on which the Investor received such Draw
Down Notice, but rather shall be the immediately following Trading Day (unless a
subsequent Trading Day is therein specified). The date on which the Company
delivers any Draw Down Notice in accordance with this Section 3.1 hereinafter
shall be referred to as a “Draw Down Exercise Date”. The Draw Down
Notice shall specify the Draw Down Amount Requested (which shall not exceed the
Maximum Draw Down Amount Requested), establish the Floor Price for such Draw
Down and designate the first and last Trading Day of the Pricing Period. Upon
the terms and subject to the conditions of this Agreement, the Investor is obligated to accept each Draw Down
Notice prepared and delivered in accordance with the provisions of this
Agreement and shall purchase from the Company the Shares subject to such Draw
Down Notice at the applicable Discount Price on the applicable Settlement Date.
Anything to the contrary in this Agreement notwithstanding, the parties hereto
acknowledge and agree that the Investor shall not be required to purchase, and
shall not purchase, more than the Maximum Draw Down Amount Requested pursuant to
any single Draw Down Notice.

3




     Section 3.2.
Limitation of Draw Downs. The Company shall not make more than
one Draw Down in each Pricing Period. At least 24 hours shall elapse between the
completion of the settlement of one Draw Down in accordance with Section 3.5
below and the commencement of a Pricing Period for any other Draw Down during
the Investment Period. Each Draw Down automatically shall expire immediately
following the completion of the settlement thereof in accordance with Section
3.5 below.

     Section 3.3.
Reduction of Commitment. On each Settlement Date, the
Investor’s Total Commitment under this Agreement automatically shall be reduced,
on a dollar-for-dollar basis, by the total Draw Down Amount paid to the Company
on such Settlement Date.

     Section 3.4. Below
Floor Price. If the VWAP on any Trading Day during the applicable
Pricing Period is lower than the applicable Floor Price, then for each such
Trading Day, the Draw Down Amount Requested shall be reduced by a number of
shares of Common Stock equal to the product of (x) 0.10 and (y) the total Draw
Down Amount Requested, and no Shares shall be purchased or sold with respect to
such Trading Day. If trading in the Common Stock on the Trading Market is
suspended for any reason for more than three hours on any Trading Day during the
applicable Pricing Period, then for each such Trading Day during the Pricing
Period the Draw Down Amount Requested shall be reduced as provided in the
immediately preceding sentence, and no Shares shall be purchased or sold with
respect to such Trading Day. 

     Section 3.5.
Settlement. The payment for, against simultaneous delivery of,
Shares in respect of each Draw Down shall be settled not later than the third
Business Day next following the last Trading Day of each Pricing Period (the
“Settlement Date”). On each Settlement Date, the Company shall, or
shall cause its transfer agent to, electronically transfer the Shares purchased
by the Investor by crediting the Investor’s or its designees’ account (provided
the Investor shall have given the Company written notice of such designee prior
to the Settlement Date) at DTC through its Deposit/Withdrawal at Custodian
(DWAC) system, which Shares shall be freely tradable and transferable and
without restriction on resale pursuant to the Registration Statement, against
simultaneous payment therefor to the Company’s designated account by wire
transfer of immediately available funds; provided that if the Shares are
received by the Investor later than 1:00 p.m., New York City time, payment
therefor shall be made with next day funds. As set forth in Section 3.6, a
failure by the Company or its transfer agent (if applicable) to deliver such
Shares on the applicable Settlement Date shall result in the payment of partial
damages by the Company to the Investor.

4




     Section 3.6. Failure
to Deliver Shares. If the Company issues a Draw Down Notice and fails to
deliver the Shares to the Investor on the applicable Settlement Date and such
failure continues for 10 Trading Days, the Company shall pay the
Investor, in cash, in addition to all other remedies available to the Investor,
as partial damages for such failure and not as a penalty, an amount equal to
2.0% of the payment required to be paid by the Investor on such Settlement Date
for the initial 30 days following such Settlement Date until the Shares have
been delivered, and an additional 2.0% for each additional 30-day period
thereafter until the Shares have been delivered, which amount shall be prorated
for such periods less than 30 days (the “Make Whole Amount”). If
the Make Whole Amount is not paid within two Trading Days following a demand
therefor from the Investor, the Make Whole Amount shall accrue annual interest
(on the basis of the 365 day year) compounded daily at a rate equal to the
greater of (i) the prime rate of interest then in effect as published by the
Wall Street Journal plus 3.0% and (ii) 10.0%, up to and including the date on
which the Make Whole Amount is actually paid. The Company shall not issue a Draw
Down Notice to the Investor until the Make Whole Amount, plus all accrued
interest, has been paid to the Investor in full.

     Section 3.7. Certain
Limitations. Notwithstanding anything to the contrary contained in this
Agreement, in no event may the Company issue a Draw Down Notice to the extent
that (i) the Draw Down Amount Requested in such Draw Down Notice exceeds the
Maximum Draw Down Amount Requested, (ii) the sale of Shares pursuant to such
Draw Down Notice would cause the Company to issue or sell or the Investor to
acquire or purchase a dollar value of shares of Common Stock which, when
aggregated with all Draw Down Amounts paid by the Investor pursuant to all prior
Draw Down Notices issued under this Agreement, would exceed the Aggregate Limit,
or (iii) the sale of Shares pursuant to such Draw Down Notice would cause the
Company to sell or the Investor to purchase a number of shares of Common Stock
which, when aggregated with all other shares of Common Stock then beneficially
owned (as calculated pursuant to Section 13(d) of the Exchange Act and Rule
13d-3 promulgated thereunder) by the Investor and its Affiliates, would result
in the beneficial ownership by the Investor or any of its Affiliates of more
than 4.99% of the then issued and outstanding shares of Common Stock (the
“Ownership Limitation”). If the Company issues a Draw Down Notice
in which the Draw Down Amount Requested exceeds the Maximum Draw Down Amount
Requested, such Draw Down Notice shall be void ab initio to the extent
the Draw Down Amount Requested exceeds the Maximum Draw Down Amount Requested.
If the Company issues a Draw Down Notice that otherwise would require the
Investor to purchase shares of Common Stock which would cause the aggregate
purchases of Common Stock by the Investor under this Agreement to exceed the
Aggregate Limit, such Draw Down Notice shall be void ab initio to the
extent of the amount by which the dollar value of shares of Common Stock
otherwise issuable pursuant to such Draw Down Notice, together with all Draw
Down Amounts paid by the Investor pursuant to all prior Draw Down Notices issued
under this Agreement, would exceed the Aggregate Limit. If the Company issues a
Draw Down Notice that otherwise would require the Investor to purchase shares of
Common Stock which would cause the aggregate number of shares of Common Stock
then beneficially owned (as calculated pursuant to Section 13(d) of the Exchange
Act and Rule 13d-3 promulgated thereunder) by the Investor and its Affiliates to
exceed the Ownership Limitation, such Draw Down Notice shall be void ab
initio to the extent of the amount by which the number of shares of Common
Stock otherwise issuable pursuant to such Draw Down Notice, together with all
shares of Common Stock then beneficially owned by the Investor and its
Affiliates, would exceed the Ownership Limitation.

5




     Section 3.8.
Blackout Periods. The Company shall advise the Investor in
writing of any changes to its policy on insider trading. Notwithstanding any
other provision of this Agreement, the Company shall not deliver any Draw Down
Notice or otherwise offer or sell Shares to the Investor, and the Investor shall
not be obligated to purchase any Shares pursuant to this Agreement, (i) during
any period in which the Company is, or may be deemed to be, in possession of
material non-public information, (ii) during any period (other than the period
referred to in clause (iii) of this Section 3.8) in which the Company’s insider
trading policy, as it exists from time to time, would prohibit purchases or
sales of Common Stock by its officers or directors (each such period, a
“Blackout Period”), except with respect to this clause (ii) as
expressly provided in the immediately following sentence, or (iii) except as
expressly provided in this Section 3.8, at any time from and including the date
(each, an “Announcement Date”) on which the Company shall issue a
press release containing, or shall otherwise publicly announce, its earnings,
revenues or other results of operations (each, an “Earnings
Announcement”) through and including the time that is 24 hours after the
time that the Company files (a “Filing Time”) a Quarterly Report
on Form 10-Q or an Annual Report on Form 10-K that includes consolidated
financial statements as of and for the same period or periods, as the case may
be, covered by such Earnings Announcement. If the Company wishes to deliver any
Draw Down Notice or otherwise offer, sell or deliver Shares to the Investor
during any Blackout Period, the Company shall, as a condition thereto, provide
the Investor with the compliance certificate substantially in the form attached
hereto as Exhibit D, dated the date of such Draw Down Notice, which
certificate shall be deemed to remain in effect during the applicable Pricing
Period through and including the applicable Settlement Date, and the “bring
down” opinions in the form mutually agreed to by the parties hereto, dated the
date of such Draw Down Notice. If the Company wishes to deliver any Draw Down
Notice or otherwise offer, sell or deliver Shares to the Investor at any time
during the period from and including an Announcement Date through and including
the time that is 24 hours after the corresponding Filing Time, the Company
shall, as conditions thereto, (1) prepare and deliver to the Investor (with a
copy to counsel to the Investor) a report on Form 8-K which shall include
substantially the same financial and related information as was set forth in the
relevant Earnings Announcement (other than any earnings or other projections,
similar forward-looking data and officers’ quotations) (each, an “Earnings
8-K”), in form and substance reasonably satisfactory to the Investor and
its counsel, (2) provide the Investor with the compliance certificate
substantially in the form attached hereto as Exhibit D, dated the date of
such Draw Down Notice, which certificate shall be deemed to remain in effect
during the applicable Pricing Period through and including the applicable
Settlement Date, and the “bring down” opinions in the form mutually agreed to by
the parties hereto, dated the date of such Draw Down Notice and (3) file such
Earnings 8-K with the Commission (so that it is deemed “filed” for purposes of
Section 18 of the Exchange Act), include such Earnings 8-K in a Prospectus
Supplement and file such Prospectus Supplement with the Commission under Rule
424(b) under the Securities Act, in each case on or prior to the date of such
Draw Down Notice. The provisions of clause (iii) of this Section 3.8 shall not
be applicable for the period from and after the time at which all of the
conditions set forth in the immediately preceding sentence shall have been
satisfied (or, if later, the time that is 24 hours after the time that the
relevant Earnings Announcement was first publicly released) through and
including the time that is 24 hours after the Filing Time of the relevant
Quarterly Report on Form 10-Q or Annual Report on Form 10-K, as the case may be.
For purposes of clarity, the parties agree that the delivery of the compliance
certificate and the “bring down” opinions pursuant to this Section 3.8 shall not
relieve the Company from any of its obligations under this Agreement with
respect to the delivery of the compliance certificate called for by Section
7.2(ii) and the “bring down” opinions called for by Section 7.2(xv) on the
applicable Settlement Date, which Sections shall have independent
application.

6




ARTICLE IV
REPRESENTATIONS, WARRANTIES AND
COVENANTS OF THE INVESTOR

     The Investor hereby makes the
following representations, warranties and covenants to the Company:

     Section 4.1.
Organization and Standing of the Investor. The Investor is a
limited liability company duly organized, validly existing and in good standing
under the laws of the State of New York.

     Section 4.2.
Authorization and Power. The Investor has the requisite
corporate power and authority to enter into and perform its obligations under
this Agreement and the Registration Rights Agreement and to purchase or acquire
the Securities in accordance with the terms hereof. The execution, delivery and
performance by the Investor of this Agreement and the Registration Rights
Agreement and the consummation by it of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action, and no
further consent or authorization of the Investor, its Board of Directors or its
stockholders is required. Each of this Agreement and the Registration Rights
Agreement has been duly executed and delivered by the Investor and constitutes a
valid and binding obligation of the Investor enforceable against it in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation,
conservatorship, receivership, or similar laws relating to, or affecting
generally the enforcement of, creditor’s rights and remedies or by other
equitable principles of general application (including any limitation of
equitable remedies).

     Section 4.3. No
Conflicts. The execution, delivery and performance by the Investor of
this Agreement and the Registration Rights Agreement and the consummation by the
Investor of the transactions contemplated hereby and thereby do not and shall
not (i) result in a violation of such Investor’s charter documents, bylaws or
other applicable organizational instruments, (ii) conflict with, constitute a
default (or an event which, with notice or lapse of time or both, would become a
default) under, or give rise to any rights of termination, amendment,
acceleration or cancellation of, any material agreement, mortgage, deed of
trust, indenture, note, bond, license, lease agreement, instrument or obligation
to which the Investor is a party or is bound, (iii) create or impose any lien,
charge or encumbrance on any property of the Investor under any agreement or any
commitment to which the Investor is party or under which the Investor is bound
or under which any of its properties or assets are bound, or (iv) result in a
violation of any federal, state, local or foreign statute, rule, or regulation,
or any order, judgment or decree of any court or governmental agency applicable
to the Investor or by which any of its properties or assets are bound or
affected, except, in the case of clauses (ii), (iii) and (iv), for such
conflicts, defaults, terminations, amendments, acceleration, cancellations and
violations as would not, individually or in the aggregate, prohibit or otherwise
interfere with, in any material respect, the ability of the Investor to enter
into and perform its obligations under this Agreement and the Registration Rights Agreement. The Investor is not required under any
applicable federal, state, local or foreign law, rule or regulation to obtain
any consent, authorization or order of, or make any filing or registration with,
any court or governmental agency in order for it to execute, deliver or perform
any of its obligations under this Agreement and the Registration Rights
Agreement or to purchase the Securities in accordance with the terms hereof;
provided, however, that for purposes of the representation made in
this sentence, the Investor is assuming and relying upon the accuracy of the
relevant representations and warranties and the compliance with the relevant
covenants and agreements of the Company in the Transaction Documents to which it
is a party.

7




     Section 4.4.
Investment Purpose. The Investor is acquiring the Securities
for its own account, for investment purposes and not with a view towards, or for
resale in connection with, the public sale or distribution thereof, except
pursuant to sales registered under or exempt from the registration requirements
of the Securities Act; provided, however, that by making the
representations herein, the Investor does not agree, or make any representation
or warranty, to hold any of the Securities for any minimum or other specific
term and reserves the right to dispose of the Securities at any time in
accordance with or pursuant to a registration statement or an exemption under
the Securities Act. The Investor does not presently have any agreement or
understanding, directly or indirectly, with any Person to distribute any of the
Securities.

     Section 4.5.
Accredited Investor Status. The Investor is an “accredited
investor” as that term is defined in Rule 501(a) of Regulation D.

     Section 4.6.
Reliance on Exemptions. The Investor understands that the
Securities are being offered and sold to it in reliance on specific exemptions
from the registration requirements of U.S. federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of, and the
Investor’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Investor set forth herein in order to
determine the availability of such exemptions and the eligibility of the
Investor to acquire the Securities.

     Section 4.7.
Information. All materials relating to the business, financial
condition, management and operations of the Company and materials relating to
the offer and sale of the Securities which have been requested by the Investor
have been furnished or otherwise made available to the Investor or its advisors,
including, without limitation, the Commission Documents. The Investor
understands that its investment in the Securities involves a high degree of
risk. The Investor is able to bear the economic risk of an investment in the
Securities and has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of a proposed
investment in the Securities. The Investor and its advisors have been afforded
the opportunity to ask questions of and receive answers from representatives of
the Company concerning the financial condition and business of the Company and
other matters relating to an investment in the Securities. Neither such
inquiries nor any other due diligence investigations conducted by the Investor
or its advisors, if any, or its representatives shall modify, amend or affect
the Investor’s right to rely on the Company’s representations and warranties
contained in this Agreement or in any other Transaction Document to which the
Company is a party or the Investor’s right to rely on any other document or
instrument executed and/or delivered in connection with this Agreement or the
consummation of the transaction contemplated hereby (including, without
limitation, the opinions of the Company’s counsel delivered pursuant to Sections
7.1(iv) and 7.2(xv)) . The Investor has sought such accounting, legal and tax advice as it has considered necessary to make an
informed investment decision with respect to its acquisition of the Securities.
The Investor understands that it (and not the Company) shall be responsible for
its own tax liabilities that may arise as a result of this investment or the
transactions contemplated by this Agreement.

8




     Section 4.8. No
Governmental Review. The Investor understands that no United States
federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Securities or the
fairness or suitability of the investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering of the
Securities.

     Section 4.9. No
General Solicitation. The Investor is not purchasing the Securities as a
result of any form of general solicitation or general advertising (within the
meaning of Regulation D) in connection with the offer or sale of the
Securities.

     Section 4.10. Not an
Affiliate. The Investor is not an officer, director or an Affiliate of
the Company.

     Section 4.11.
Statutory Underwriter Status. The Investor acknowledges that
it will be disclosed as an “underwriter” and a “selling stockholder” in the
Registration Statement and in any Prospectus contained therein to the extent
required by applicable law and to the extent the Prospectus is related to the
resale of Registrable Securities.

     Section 4.12.
Resales of Securities. The Investor represents, warrants and
covenants that unless the Securities are eligible for resale pursuant to Rule
144, it will resell such Securities only pursuant to the Registration Statement,
in a manner described under the caption “Plan of Distribution” in the
Registration Statement, and in a manner in compliance with all applicable U.S.
federal and state securities laws, rules and regulations, including, without
limitation, any applicable prospectus delivery requirements of the Securities
Act.

ARTICLE V
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE COMPANY

     Except as set forth in the
disclosure schedule delivered by the Company to the Investor (which is hereby
incorporated by reference in, and constitutes an integral part of, this
Agreement) (the “Disclosure Schedule”), the Company hereby makes
the following representations, warranties and covenants to the Investor:

     Section 5.1.
Organization, Good Standing and Power. The Company and each of
its Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has the
requisite corporate power and authority to own, lease and operate its properties
and assets and to conduct its business as it is now being conducted and as
presently proposed to be conducted. The Company and each Subsidiary is duly
qualified as a foreign corporation to do business and is in good standing in
every jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, except for any jurisdiction in
which the failure to be so qualified would not have a Material Adverse
Effect.

9




     Section 5.2.
Authorization, Enforcement. The Company has the requisite
corporate power and authority to enter into and perform its obligations under
each of the Transaction Documents to which it is a party and to issue the
Securities in accordance with the terms hereof and thereof. Except for approvals
of the Company’s Board of Directors or a committee thereof as may be required in
connection with any issuance and sale of Securities to the Investor hereunder
(which approvals shall be obtained prior to the delivery of any Draw Down
Notice), the execution, delivery and performance by the Company of each of the
Transaction Documents to which it is a party and the consummation by it of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action, and no further consent or
authorization of the Company, its Board of Directors or its stockholders is
required. Each of the Transaction Documents to which the Company is a party has
been duly executed and delivered by the Company and constitutes a valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation,
conservatorship, receivership or similar laws relating to, or affecting
generally the enforcement of, creditor’s rights and remedies or by other
equitable principles of general application (including any limitation of
equitable remedies).

     Section 5.3.
Capitalization and Voting Rights. The authorized capital stock
of the Company and the shares thereof issued and outstanding were as set forth
in the Commission Documents as of the dates reflected therein. All of the
outstanding shares of Common Stock have been duly authorized and validly issued,
and are fully paid and nonassessable. Except as set forth in the Commission
Documents, this Agreement and the Registration Rights Agreement, there are no
agreements or arrangements under which the Company is obligated to register the
sale of any securities under the Securities Act. Except as set forth in the
Commission Documents, no shares of Common Stock are entitled to preemptive
rights and there are no outstanding debt securities and no contracts,
commitments, understandings, or arrangements by which the Company is or may
become bound to issue additional shares of the capital stock of the Company or
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into or
exchangeable for, any shares of capital stock of the Company other than those
issued or granted in the ordinary course of business pursuant to the Company’s
equity incentive and/or compensatory plans or arrangements. Except for customary
transfer restrictions contained in agreements entered into by the Company to
sell restricted securities or as set forth in the Commission Documents, the
Company is not a party to, and it has no Knowledge of, any agreement restricting
the voting or transfer of any shares of the capital stock of the Company. Except
as set forth in the Commission Documents, the offer and sale of all capital
stock, convertible or exchangeable securities, rights, warrants or options of
the Company issued prior to the Closing Date complied with all applicable
federal and state securities laws, and no stockholder has any right of
rescission or damages or any “put” or similar right with respect thereto that
would have a Material Adverse Effect. Except as set forth in the Commission
Documents, there are no securities or instruments containing anti-dilution or
similar provisions that will be triggered by this Agreement or any of the other
Transaction Documents or the consummation of the transactions described herein
or therein. The Company has furnished or made available to the Investor via
EDGAR true and correct copies of the Company’s Articles of Incorporation as in
effect on the Closing Date (the “Charter”), and the Company’s
Bylaws as in effect on the Closing Date (the “Bylaws”). 

10




     Section 5.4.
Issuance of Securities. The Commitment Shares have been, and
the Shares to be issued under this Agreement have been or will be (prior to the
delivery of any Draw Down Notice to the Investor hereunder), duly authorized by
all necessary corporate action on the part of the Company. The Commitment Shares
are validly issued and outstanding, fully paid and nonassessable and free from
all liens, charges, taxes, security interests, encumbrances, rights of first
refusal, preemptive or similar rights and other encumbrances with respect to the
issue thereof. The Shares, when issued and paid for in accordance with the terms
of this Agreement, shall be validly issued and outstanding, fully paid and
nonassessable and free from all liens, charges, taxes, security interests,
encumbrances, rights of first refusal, preemptive or similar rights and other
encumbrances with respect to the issue thereof.

     Section 5.5. No
Conflicts. The execution, delivery and performance by the Company
of each of the Transaction Documents to which it is a party and the consummation
by the Company of the transactions contemplated hereby and thereby do not and
shall not (i) result in a violation of any provision of the Company’s Charter or
Bylaws, (ii) conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default (or an event which, with notice
or lapse of time or both, would become a default) under, or give rise to any
rights of termination, amendment, acceleration or cancellation of, any material
agreement, mortgage, deed of trust, indenture, note, bond, license, lease
agreement, instrument or obligation to which the Company or any of its
Significant Subsidiaries is a party or is bound, (iii) create or impose a lien,
charge or encumbrance on any property or assets of the Company or any of its
Significant Subsidiaries under any agreement or any commitment to which the
Company or any of its Significant Subsidiaries is a party or by which the
Company or any of its Significant Subsidiaries is bound or to which any of their
respective properties or assets is subject, or (iv) result in a violation of any
federal, state, local or foreign statute, rule, regulation, order, judgment or
decree applicable to the Company or any of its Subsidiaries or by which any
property or asset of the Company or any of its Subsidiaries are bound or
affected (including federal and state securities laws and regulations and the
rules and regulations of the Trading Market), except, in the case of clauses
(ii), (iii) and (iv), for such conflicts, defaults, terminations, amendments,
acceleration, cancellations, liens, charges, encumbrances and violations as
would not, individually or in the aggregate, have a Material Adverse Effect.
Except as specifically contemplated by this Agreement or the Registration Rights
Agreement and as required under the Securities Act and any applicable state
securities laws, the Company is not required under any federal, state, local or
foreign law, rule or regulation to obtain any consent, authorization or order
of, or make any filing or registration with, any court or governmental agency
(including, without limitation, the Trading Market) in order for it to execute,
deliver or perform any of its obligations under the Transaction Documents to
which it is a party, or to issue the Securities to the Investor in accordance
with the terms hereof and thereof (other than such consents, authorizations,
orders, filings or registrations as have been obtained or made prior to the
Closing Date); provided, however, that, for purposes of the
representation made in this sentence, the Company is assuming and relying upon
the accuracy of the representations and warranties of the Investor in this
Agreement and the compliance by it with its covenants and agreements contained
in this Agreement and the Registration Rights Agreement.

11




     Section 5.6. Commission Documents, Financial Statements. (a) The Company
has timely filed (giving effect to permissible extensions in accordance with
Rule 12b-25 under the Exchange Act) all Commission Documents. The Company has
delivered or made available to the Investor via EDGAR or otherwise true and complete copies of the
Commission Documents filed with or furnished to the Commission prior to the
Closing Date (including, without limitation, the 2011 Form 10-K). No Subsidiary
of the Company is required to file or furnish any report, schedule,
registration, form, statement, information or other document with the
Commission. As of its filing date, each Commission Document filed with or
furnished to the Commission prior to the Closing Date (including, without
limitation, the 2011 Form 10-K) complied in all material respects with the
requirements of the Securities Act or the Exchange Act, as applicable, and other
federal, state and local laws, rules and regulations applicable to it, and, as
of its filing date (or, if amended or superseded by a filing prior to the
Closing Date, on the date of such amended or superseded filing), such Commission
Document did not 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 light of the circumstances under which they were
made, not misleading. The Registration Statement, on the date it is filed with
the Commission, on the date it is declared effective by the Commission, on each
Draw Down Exercise Date and on each Settlement Date, shall comply in all
material respects with the requirements of the Securities Act (including,
without limitation, Rule 415 under the Securities Act) and shall not 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 not
misleading, except that this representation and warranty shall not apply to
statements in or omissions from the Registration Statement made in reliance upon
and in conformity with information relating to the Investor furnished to the
Company in writing by or on behalf of the Investor expressly for use therein.
The Prospectus and each Prospectus Supplement required to be filed pursuant to
this Agreement or the Registration Rights Agreement after the Closing Date, when
taken together, on its date, on each Draw Down Exercise Date and on each
Settlement Date, shall comply in all material respects with the requirements of
the Securities Act (including, without limitation, Rule 424(b) under the
Securities Act) and shall not 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 light of the circumstances under which
they were made, not misleading, except that this representation and warranty
shall not apply to statements in or omissions from the Prospectus or any
Prospectus Supplement made in reliance upon and in conformity with information
relating to the Investor furnished to the Company in writing by or on behalf of
the Investor expressly for use therein. Each Commission Document (other than the
Registration Statement, the Prospectus or any Prospectus Supplement) to be filed
with or furnished to the Commission after the Closing Date and incorporated by
reference in the Registration Statement, the Prospectus or any Prospectus
Supplement required to be filed pursuant to this Agreement or the Registration
Rights Agreement (including, without limitation, the Current Report), when such
document is filed with or furnished to the Commission and, if applicable, when
such document becomes effective, as the case may be, shall comply in all
material respects with the requirements of the Securities Act or the Exchange
Act, as applicable, and other federal, state and local laws, rules and
regulations applicable to it, and shall not 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 light of the circumstances
under which they were made, not misleading. The Company has delivered or made
available to the Investor via EDGAR or otherwise true and complete copies of all
comment letters and substantive correspondence received by the Company from the
Commission relating to the Commission Documents filed with or furnished to the
Commission as of the Closing Date, together with all written responses of the
Company thereto in the form such responses were filed via EDGAR. There are no outstanding
or unresolved comments or undertakings in such comment letters received by the
Company from the Commission. The Commission has not issued any stop order or
other order suspending the effectiveness of any registration statement filed by
the Company under the Securities Act or the Exchange Act.

12




     (b) The financial statements,
together with the related notes and schedules, of the Company included in the
Commission Documents comply as to form in all material respects with all
applicable accounting requirements and the published rules and regulations of
the Commission and all other applicable rules and regulations with respect
thereto. Such financial statements, together with the related notes and
schedules, have been prepared in accordance with GAAP applied on a consistent
basis 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 not include footnotes or may be
condensed or summary statements), and fairly present in all material respects
the financial condition of the Company and its consolidated Subsidiaries as of
the dates thereof and the results of operations and cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal year-end
audit adjustments).

     (c) The Company has timely filed
with the Commission and made available to the Investor via EDGAR or otherwise
all certifications and statements required by (x) Rule 13a-14 or Rule 15d-14
under the Exchange Act or (y) 18 U.S.C. Section 1350 (Section 906 of the
Sarbanes-Oxley Act of 2002 (“SOXA”)) with respect to all relevant
Commission Documents. The Company is in compliance in all material respects with
the provisions of SOXA applicable to it as of the date hereof. The Company
maintains disclosure controls and procedures required by Rule 13a-15 or Rule
15d-15 under the Exchange Act; such controls and procedures are effective to
ensure that all material information concerning the Company and its Subsidiaries
is made known on a timely basis to the individuals responsible for the timely
and accurate preparation of the Company’s Commission filings and other public
disclosure documents. As used in this Section 5.6(c), the term “file” shall be
broadly construed to include any manner in which a document or information is
furnished, supplied or otherwise made available to the Commission.

     (d) Weaver Martin & Samyn,
LLC, who shall express their opinion on the audited financial statements and
related schedules to be included or incorporated by reference in the
Registration Statement and the Prospectus are, with respect to the Company,
independent public accountants as required by the Securities Act and is an
independent registered public accounting firm within the meaning of SOXA as
required by the rules of the Public Company Accounting Oversight Board. Weaver
Martin & Samyn, LLC has not been engaged by the Company to perform any
“prohibited activities” (as defined in Section 10A of the Exchange Act).

     Section 5.7.
Subsidiaries. The 2011 Form 10-K sets forth each Subsidiary of
the Company as of the Closing Date, showing its jurisdiction of incorporation or
organization and the percentage of the Company’s ownership of the outstanding
capital stock or other ownership interests of such Subsidiary, and the Company
does not have any other Subsidiaries as of the Closing Date.

13




     Section 5.8. No
Material Adverse Effect. Except as disclosed in any Commission Documents
filed since December 31, 2011, or which may be deemed to have resulted from the
Company’s continued losses from operations, since December 31, 2011, the Company
has not experienced or suffered any Material Adverse Effect, and there exists no
current state of facts, condition or event which would have a Material Adverse
Effect.

     Section 5.9. No
Undisclosed Liabilities. Neither the Company nor any of its Subsidiaries
has any liabilities, obligations, claims or losses (whether liquidated or
unliquidated, secured or unsecured, absolute, accrued, contingent or otherwise)
that would be required to be disclosed on a balance sheet of the Company or any
Subsidiary (including the notes thereto) in conformity with GAAP and are not
disclosed in the Commission Documents, other than those incurred in the ordinary
course of the Company’s or its Subsidiaries respective businesses since December
31, 2011 and which, individually or in the aggregate, do not or would not have a
Material Adverse Effect.

     Section 5.10. No
Undisclosed Events or Circumstances. 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, operations
(including results thereof) or conditions (financial or otherwise), which, under
applicable law, rule or regulation, requires public disclosure or announcement
by the Company at or before the Closing but which has not been so publicly
announced or disclosed, except for events or circumstances which, individually
or in the aggregate, do not or would not have a Material Adverse Effect.

     Section 5.11.
Indebtedness; Solvency. The Company’s Quarterly Report on Form
10-Q for its fiscal quarter ended September 30, 2012 sets forth, as of September
30, 2012, all outstanding secured and unsecured Indebtedness of the Company or
any Subsidiary, or for which the Company or any Subsidiary has commitments
through such date. For the purposes of this Agreement,
“Indebtedness” shall mean (a) any liabilities for borrowed money
or amounts owed in excess of $10,000,000 (other than trade accounts payable
incurred in the ordinary course of business), (b) all guaranties, endorsements,
indemnities and other contingent obligations in respect of Indebtedness of
others in excess of $10,000,000, whether or not the same are or should be
reflected in the Company’s balance sheet (or the notes thereto), except
guaranties by endorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business; and (c) the present
value of any lease payments in excess of $10,000,000 due under leases required
to be capitalized in accordance with GAAP. There is no existing or continuing
default or event of default in respect of any Indebtedness of the Company or any
of its Subsidiaries. The Company has not taken any steps, and does not currently
expect to take any steps, to seek protection pursuant to Title 11 of the United
States Code or any similar federal or state bankruptcy law or law for the relief
of debtors, nor does the Company have any Knowledge that its creditors intend to
initiate involuntary bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings for relief under Title 11 of the United States
Code or any other federal or state bankruptcy law or any law for the relief of
debtors. The Company is financially solvent and is generally able to pay its
debts as they become due.

     Section 5.12. Title
To Assets. Each of the Company and its Subsidiaries has good and valid
title to, or has valid rights to lease or otherwise use, all of their respective
real and personal property reflected in the Commission Documents, free of
mortgages, pledges, charges, liens, security interests or other encumbrances, except for (i)
certain mortgages and a first priority lien on the Company’s assets in the
amount of $496,000 by ASYM Energy Opportunities LLC, (ii) those indicated in the
Commission Documents and (iii) those that would not have a Material Adverse
Effect. All 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. 

14




     Section 5.13.
Actions Pending. There is no action, suit, claim,
investigation or proceeding pending, or, to the Knowledge of the Company,
threatened, against the Company or any Subsidiary which questions the validity
of the Transaction Documents or the transactions contemplated thereby or any
action taken or to be taken pursuant thereto. Except as set forth in the
Commission Documents, there is no action, suit, claim, investigation or
proceeding pending, or to the Knowledge of the Company threatened, against or
involving the Company, any Subsidiary or any of their respective properties or
assets, or involving any officers or directors of the Company or any of its
Subsidiaries, including, without limitation, any securities class action lawsuit
or stockholder derivative lawsuit related to the Company, in each case which, if
determined adversely to the Company, its Subsidiary or any officer or director
of the Company or its Subsidiaries, would have a Material Adverse Effect. Except
as set forth in the Commission Documents, no judgment, order, writ, injunction
or decree or award has been issued by or, to the Knowledge of the Company,
requested of any court, arbitrator or governmental agency which would be
reasonably expected to result in a Material Adverse Effect.

     Section 5.14.
Compliance With Law. The business of the Company and the
Subsidiaries has been and is presently being conducted in compliance with all
applicable federal, state, local and foreign governmental laws, rules,
regulations and ordinances, except as set forth in the Commission Documents and
except for such non-compliance which, individually or in the aggregate, would
not have a Material Adverse Effect. 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 has maintained all requirements for the continued listing or quotation
of its Common Stock on the Trading Market, and the Company is not in violation
of any of the rules, regulations or requirements of the Trading Market and has
no Knowledge of any facts or circumstances that could reasonably lead to
delisting or suspension of the Common Stock by the Trading Market in the
foreseeable future.

     Section 5.15.
Certain Fees. No brokers, finders or financial advisory fees
or commissions are or shall be payable by the Company or any Subsidiary (or any
of their respective Affiliates) with respect to the transactions contemplated by
the Transaction Documents.

15




     Section 5.16. Disclosure. The Company confirms that neither it nor any other
Person acting on its behalf has provided the Investor or any of its agents,
advisors or counsel with any information that constitutes or could reasonably be
expected to constitute material, nonpublic information concerning the Company or any of its Subsidiaries,
other than the existence of the transactions contemplated by the Transaction
Documents. The Company understands and confirms that the Investor will rely on
the foregoing representations in effecting transactions in securities of the
Company. All disclosure provided to Investor regarding the Company and its
Subsidiaries, their businesses and the transactions contemplated by the
Transaction Documents (including, without limitation, the representations and
warranties of the Company contained in the Transaction Documents to which it is
a party (as modified by the Disclosure Schedule)) furnished by or on behalf of
the Company or any of its Subsidiaries, taken together, 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 12
months preceding the Closing Date did not at the time of release (or, if amended
or superseded by a later dated press release issued by the Company or any of its
Subsidiaries prior to the Closing Date or by a later dated Commission Document
filed with or furnished to the Commission by the Company prior to the Closing
Date, at the time of issuance of such later dated press release or filing or
furnishing of such Commission Document, as applicable) 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.

     Section 5.17.
Operation of Business. (a) The Company or one or more of its
Subsidiaries possesses such permits, licenses, approvals, consents and other
authorizations (including licenses, accreditation and other similar
documentation or approvals of any local health departments) issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies as
are necessary to conduct the business now operated by it (collectively,
“Governmental Licenses”), except where the failure to possess such
Governmental Licenses, individually or in the aggregate, would not have a
Material Adverse Effect. The Company and its Subsidiaries are in compliance with
the terms and conditions of all such Governmental Licenses, except where the
failure to so comply, individually or in the aggregate, would not have a
Material Adverse Effect or except as otherwise disclosed in the Commission
Documents. All of the Governmental Licenses are valid and in full force and
effect, except where the invalidity of such Governmental Licenses or the failure
of such Governmental Licenses to be in full force and effect, individually or in
the aggregate, would not have a Material Adverse Effect or except as otherwise
disclosed in the Commission Documents. Except as set forth in the Commission
Documents, neither the Company nor any of its Subsidiaries has received any
written notice of proceedings relating to the revocation or modification of any
such Governmental Licenses which, if the subject of any unfavorable decision,
ruling or finding, individually or in the aggregate, would have a Material
Adverse Effect. This Section 5.17 does not relate to environmental matters, such
items being the subject of Section 5.18.

          (b) The
Company or one or more of its Subsidiaries owns or possesses adequate patents,
patent rights, licenses, inventions, copyrights, know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks, trade names,
trade dress, logos, copyrights and other intellectual property, including,
without limitation, all of the intellectual property described in the Commission
Documents as being owned or licensed by the Company (collectively,
“Intellectual Property”), necessary to carry on the business now
operated by it. Except as set forth in the Commission Documents, there are no actions, suits
or judicial proceedings pending, or to the Company’s Knowledge threatened,
relating to patents or proprietary information to which the Company or any of
its Subsidiaries is a party or of which any property of the Company or any of
its Subsidiaries is subject, and neither the Company nor any of its Subsidiaries
has received any notice or is otherwise aware of any infringement of or conflict
with asserted rights of others with respect to any Intellectual Property or of
any facts or circumstances which could render any Intellectual Property invalid
or inadequate to protect the interest of the Company and its Subsidiaries
therein, and which infringement or conflict (if the subject of any unfavorable
decision, ruling or finding) or invalidity or inadequacy, individually or in the
aggregate, would have a Material Adverse Effect.

16




     Section 5.18.
Environmental Compliance. Except as disclosed in the
Commission Documents, the Company and each of its Subsidiaries have obtained all
material approvals, authorization, certificates, consents, licenses, orders and
permits or other similar authorizations of all governmental authorities, or from
any other person, that are required under any Environmental Laws, except for any
approvals, authorization, certificates, consents, licenses, orders and permits
or other similar authorizations the failure of which to obtain does not or would
not have a Material Adverse Effect. “Environmental Laws” shall
mean all applicable laws relating to the protection of the environment
including, without limitation, all requirements pertaining to reporting,
licensing, permitting, controlling, investigating or remediating emissions,
discharges, releases or threatened releases of hazardous substances, chemical
substances, pollutants, contaminants or toxic substances, materials or wastes,
whether solid, liquid or gaseous in nature, into the air, surface water,
groundwater or land, or relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of hazardous
substances, chemical substances, pollutants, contaminants or toxic substances,
material or wastes, whether solid, liquid or gaseous in nature. Except for such
instances as would not, individually or in the aggregate, have a Material
Adverse Effect, to the Company’s Knowledge, there are no past or present events,
conditions, circumstances, incidents, actions or omissions relating to or in any
way affecting the Company or its Subsidiaries that violate or could reasonably
be expected to violate any Environmental Law after the Closing Date or that
could reasonably be expected to give rise to any environmental liability, or
otherwise form the basis of any claim, action, demand, suit, proceeding,
hearing, study or investigation (i) under any Environmental Law, or (ii) based
on or related to the manufacture, processing, distribution, use, treatment,
storage (including without limitation underground storage tanks), disposal,
transport or handling, or the emission, discharge, release or threatened release
of any hazardous substance.

     Section 5.19.
Material Agreements. Except as set forth in the Commission
Documents, neither the Company nor any Subsidiary of the Company is a party to
any written or oral contract, instrument, agreement commitment, obligation, plan
or arrangement, a copy of which would be required to be filed with the
Commission as an exhibit to an annual report on Form 10-K (collectively,
“Material Agreements”). Except as set forth in the Commission
Documents, the Company and each of its Subsidiaries have performed in all
material respects all the obligations then required to be performed by them
under the Material Agreements, have received no notice of default or an event of
default by the Company or any of its Subsidiaries thereunder and are not aware
of any basis for the assertion thereof, and neither the Company or any of its
Subsidiaries nor, to the Knowledge of the Company, any other contracting party
thereto are in default under any Material Agreement now in effect, the result of
which would have a Material Adverse Effect. Except as set forth in the
Commission Documents, each of the Material Agreements is in full force and
effect, and constitutes a legal, valid and binding obligation enforceable in
accordance with its terms against the Company and/or any of its Subsidiaries
and, to the Knowledge of the Company, each other contracting party thereto,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation, conservatorship,
receivership or similar laws relating to, or affecting generally the enforcement
of, creditor’s rights and remedies or by other equitable principles of general
application.

17




     Section 5.20.
Transactions With Affiliates. Except as set forth in the
Commission Documents, there are no loans, leases, agreements, contracts, royalty
agreements, management contracts, service arrangements or other continuing
transactions exceeding $120,000 between (a) the Company or any Subsidiary, on
the one hand, and (b) any person or entity who would be covered by Item 404(a)
of Regulation S-K, on the other hand. Except as disclosed in the Commission
Documents, there are no outstanding amounts payable to or receivable from, or
advances by the Company or any of its Subsidiaries to, and neither the Company
nor any of its Subsidiaries is otherwise a creditor of or debtor to, any
beneficial owner of more than 5% of the outstanding shares of Common Stock, or
any director, employee or affiliate of the Company or any of its Subsidiaries,
other than (i) reimbursement for reasonable expenses incurred on behalf of the
Company or any of its Subsidiaries or (ii) as part of the normal and customary
terms of such person’s employment or service as a director with the Company or
any of its Subsidiaries.

     Section 5.21.
Employees. Neither the Company nor any Subsidiary of the
Company has any collective bargaining arrangements or agreements covering any of
its employees, except as set forth in the Commission Documents. Except as
disclosed in the Commission Documents, no officer, consultant or key employee of
the Company or any Subsidiary whose termination, either individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect, has
terminated or, to the Knowledge of the Company, has any present intention of
terminating his or her employment or engagement with the Company or any
Subsidiary.

     Section 5.22. Use of
Proceeds. The proceeds from the sale of the Shares shall be used by the
Company and its Subsidiaries as set forth in the Prospectus and any Prospectus
Supplement filed pursuant to Section 2.3 of this Agreement and pursuant to the
Registration Rights Agreement.

     Section 5.23.
Investment Company Act Status. The Company is not, and as a
result of the consummation of the transactions contemplated by the Transaction
Documents and the application of the proceeds from the sale of the Shares as set
forth in the Prospectus and any Prospectus Supplement shall not be required to
be registered as, an “investment company” or a company “controlled” by an
“investment company,” within the meaning of the Investment Company Act of 1940,
as amended.

     Section 5.24.
ERISA. No liability to the Pension Benefit Guaranty
Corporation has been incurred with respect to any Plan by the Company or any of
its Subsidiaries which has had or would have a Material Adverse Effect. No
“prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of
the Code) or “accumulated funding deficiency” (as defined in Section 302 of
ERISA) or any of the events set forth in Section 4043(b) of ERISA has occurred
with respect to any Plan which has had or would have a Material
Adverse Effect, and the execution and delivery of this Agreement and the
issuance and sale of the Securities hereunder shall not result in any of the
foregoing events. Each Plan is in compliance in all material respects with
applicable law, including ERISA and the Code; the Company has not incurred and
does not expect to incur liability under Title IV of ERISA with respect to the
termination of, or withdrawal from, any Plan; and each Plan for which the
Company would have any liability that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects and nothing has
occurred, whether by action or failure to act, which would cause the loss of
such qualifications. As used in this Section 5.24, the term “Plan”
shall mean an “employee pension benefit plan” (as defined in Section 3 of ERISA)
which is or has been established or maintained, or to which contributions are or
have been made, by the Company or any Subsidiary or by any trade or business,
whether or not incorporated, which, together with the Company or any Subsidiary,
is under common control, as described in Section 414(b) or (c) of the Code.

18




     Section 5.25.
Taxes. The Company and each of its Subsidiaries (i) has filed
all necessary federal, state and foreign income and franchise tax returns or has
duly requested extensions thereof, except for those the failure of which to file
would not have a Material Adverse Effect, (ii) has paid all federal, state,
local and foreign taxes due and payable for which it is liable, except to the
extent that any such taxes are being contested in good faith and by appropriate
proceedings, except for such taxes the failure of which to pay would not have a
Material Adverse Effect, and (iii) does not have any tax deficiency or claims
outstanding or assessed or, to the Company’s Knowledge, proposed against it
which would have a Material Adverse Effect. 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 Code.

     Section 5.26.
Insurance. The Company and 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.

     Section 5.27. 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 the Investor, shall become a U.S. real property holding corporation within
the meaning of Section 897 of the Code.

     Section 5.28.
Exemption from Registration; Valid Issuances. Subject to, and
in reliance on, the representations, warranties and covenants made herein by the
Investor, the offer and sale of the Securities in accordance with the terms and
conditions of this Agreement is exempt from the registration requirements of the
Securities Act pursuant to Section 4(a)(2) and Rule 506 of Regulation D; provided, however, that
at the request of and with the express agreement of the Investor, the Shares
will be delivered to the Investor via book entry through DTC and will not bear
legends noting restrictions as to resale of such securities under federal or
state securities laws, nor will any such securities be subject to stop transfer
instructions. Neither the offer or sale of the Securities pursuant to, nor the
Company’s performance of its obligations under, the Transaction Documents to
which it is a party shall (i) result in the creation or imposition of any liens,
charges, claims or other encumbrances upon the Securities, or (ii) entitle the
holders of any outstanding shares of capital stock of the Company to preemptive
or other rights to subscribe to or acquire the shares of Common Stock or other
securities of the Company.

19




     Section 5.29. No
General Solicitation or Advertising. Neither the Company, nor any of its
Subsidiaries or Affiliates, nor any Person acting on its or their behalf, has
engaged in any form of general solicitation or general advertising (within the
meaning of Regulation D) in connection with the offer or sale of the
Securities.

     Section 5.30. 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 require registration of the
issuance of any of the Securities under the Securities Act, whether through
integration with prior offerings or otherwise, or 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 the Trading Market. None of the Company, its
Subsidiaries, their Affiliates nor any Person acting on their behalf will take
any action or steps referred to in the preceding sentence that would require
registration of the issuance of any of the Securities under the Securities Act
or cause the offering of any of the Securities to be integrated with other
offerings.

     Section 5.31.
Dilutive Effect. The Company is aware and acknowledges that
issuance of the Securities could cause dilution to existing stockholders and
could significantly increase the outstanding number of shares of Common
Stock.

     Section 5.32.
Manipulation of Price. Neither the Company nor any of its
officers, directors or Affiliates has, and, to the Knowledge of the Company, no
Person acting on their behalf has, (i) taken, directly or indirectly, any action
designed or intended to cause or to result in the stabilization or manipulation
of the price of any security of the Company, or which caused or resulted in, or
which would in the future reasonably be expected to cause or result in, the
stabilization or manipulation of the price of any security of the Company, in
each case to facilitate the sale or resale of any of the Securities, or (ii)
sold, bid for, purchased, or paid any compensation for soliciting purchases of,
any of the Securities. Neither the Company nor any of its officers, directors or
Affiliates will during the term of this Agreement, and, to the Knowledge of the
Company, no Person acting on their behalf will during the term of this
Agreement, take any of the actions referred to in the immediately preceding
sentence.

     Section 5.33.
Securities Act. The Company has complied and shall comply with
all applicable federal and state securities laws in connection with the offer,
issuance and sale of the Securities hereunder, including, without limitation,
the applicable requirements of the Securities Act. The Registration Statement,
upon filing with the Commission and at the time it is declared effective by the Commission, shall satisfy all of the
requirements of the Securities Act to register the resale of the Registrable
Securities by the Investor in accordance with the Registration Rights Agreement
on a delayed or continuous basis under Rule 415 under the Securities Act at
then-prevailing market prices, and not fixed prices. The Company is not, and has
not previously been at any time, an issuer identified in, or subject to, Rule
144(i).

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     Section 5.34.
Listing and Maintenance Requirements. The Company’s Common
Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and
the Company has taken no action designed to, or which to its Knowledge is likely
to have the effect of, terminating the registration of the Common Stock under
the Exchange Act, nor has the Company received any notification that the
Commission is contemplating terminating such registration. The Company has not,
in the 12 months preceding the Closing Date, received notice from any Trading
Market on which the Common Stock is or has been listed or quoted to the effect
that the Company is not in compliance with the listing or maintenance
requirements of such Trading Market. As of the Closing Date, the Company is in
compliance with all such listing and maintenance requirements.

     Section 5.35.
Application of Takeover Protections. The Company and its Board
of Directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other similar
anti-takeover provision under the Company’s Charter or the laws of its state of
incorporation that is or could become applicable to the Investor as a result of
the Investor and the Company fulfilling their respective obligations or
exercising their respective rights under the Transaction Documents (as
applicable), including, without limitation, as a result of the Company’s
issuance of the Securities and the Investor’s ownership of the Securities.

     Section 5.36.
Foreign Corrupt Practices Act. None of the Company, any
Subsidiary or, to the Knowledge of the Company, any director, officer, agent,
employee, affiliate or other Person acting on behalf of the Company or any of
its Subsidiaries, is aware of or has taken any action, directly or indirectly,
that would result in a violation by such Persons of the Foreign Corrupt
Practices Act of 1977, as amended, and the rules and regulations thereunder
(collectively, the “FCPA”), including, without limitation, making
use of the mails or any means or instrumentality of interstate commerce
corruptly in furtherance of an offer, payment, promise to pay or authorization
of the payment of any money, or other property, gift, promise to give, or
authorization of the giving of anything of value to any “foreign official” (as
such term is defined in the FCPA) or any foreign political party or official
thereof or any candidate for foreign political office, in contravention of the
FCPA. The Company and the Subsidiaries have conducted their respective
businesses in compliance with the FCPA and have instituted and maintain policies
and procedures designed to ensure, and which are reasonably expected to continue
to ensure, continued compliance therewith.

     Section 5.37. Money
Laundering Laws. The operations of the Company and its Subsidiaries are
and have been conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, the money laundering statutes of
all jurisdictions, the rules and regulations thereunder and any related or
similar rules, regulations or guidelines, issued, administered or enforced by
any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or
before any court or governmental agency, authority or body or any arbitrator
involving the Company or any of its Subsidiaries with respect to the Money
Laundering Laws is pending or, to the Knowledge of the Company, threatened.

21




     Section 5.38.
OFAC. None of the Company, any Subsidiary or, to the Knowledge
of the Company, any director, officer, agent, employee, affiliate or Person
acting on behalf of the Company or any of its Subsidiaries is currently subject
to any U.S. sanctions administered by the Office of Foreign Assets Control of
the U.S. Treasury Department (“OFAC”); and the Company will not
directly or indirectly use the proceeds of the offering, or lend, contribute or
otherwise make available such proceeds to any subsidiary, joint venture partner
or other Person, for the purpose of financing the activities of any Person
currently subject to any U.S. sanctions administered by OFAC.

     Section 5.39.
Mineral Resource Properties and Surface Rights. All material
interests in mineral resource properties and surface rights for exploration and
exploitation, as applicable, overlying those properties of the Company and its
Subsidiaries are described in all material respects in the Commission Documents
and, except as set forth in the Commission Documents, are owned or held by the
Company or such Subsidiaries as owner thereof with good title, are in good
standing, and are valid and enforceable and free and clear of any liens, charges
or encumbrances, except for certain mortgages and a first priority lien on the
Company’s assets in the amount of $496,000 by ASYM Energy Opportunities LLC, and
no royalty is payable in respect of any of them. Except as set forth in the
Commission Documents, no other material property rights are necessary for the
conduct of the Company’s or its Subsidiaries’ businesses as they are currently
being conducted, and there are no material restrictions on the ability of the
Company or its Subsidiaries to use or otherwise exploit any such property
rights, and the Company does not know of any claim or basis for a claim that may
adversely affect such rights in any material respect.

     Section 5.40.
Royalties and Commissions. Except as set forth in the
Commission Documents, neither the Company nor any of its Subsidiaries has any
responsibility or obligation to pay or have paid on their behalf any material
commission, royalty or similar payment to any person with respect to their
property rights.

     Section 5.41.
Acknowledgement Regarding Investor’s Acquisition of
Securities. The Company acknowledges and agrees that the Investor is
acting solely in the capacity of an arm’s length purchaser with respect to this
Agreement and the transactions contemplated by the Transaction Documents. The
Company further acknowledges that the Investor is not acting as a financial
advisor or fiduciary of the Company (or in any similar capacity) with respect to
this Agreement and the transactions contemplated by the Transaction Documents,
and any advice given by the Investor or any of its representatives or agents in
connection therewith is merely incidental to the Investor’s acquisition of the
Securities. The Company further represents to the Investor that the Company’s
decision to enter into the Transaction Documents to which it is a party has been
based solely on the independent evaluation of the transactions contemplated
thereby by the Company and its representatives. The Company acknowledges and
agrees that the Investor has not made and does not make any representations or
warranties with respect to the transactions contemplated by the Transaction
Documents other than those specifically set forth in Article IV of this
Agreement.

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ARTICLE VI 
ADDITIONAL COVENANTS

     The Company covenants with the
Investor, and the Investor covenants with the Company, as follows, which
covenants of one party are for the benefit of the other party, during the
Investment Period:

     Section 6.1.
Securities Compliance. The Company shall notify the Commission
and the Trading Market, if and as applicable, in accordance with their
respective rules and regulations, of the transactions contemplated by the
Transaction Documents, and shall take all necessary action, undertake all
proceedings and obtain all registrations, permits, consents and approvals for
the legal and valid issuance of the Securities to the Investor in accordance
with the terms of the Transaction Documents, as applicable.

     Section 6.2.
Reservation of Common Stock. The Company has available and the
Company shall reserve and keep available at all times, free of preemptive and
other similar rights of stockholders, the requisite aggregate number of
authorized but unissued shares of Common Stock to enable the Company to timely
effect the issuance, sale and delivery in full to the Investor of all Securities
to be issued and delivered under this Agreement, in any case prior to the
issuance to the Investor of such Securities. The number of shares of Common
Stock so reserved from time to time, as theretofore increased or reduced as
hereinafter provided, may be reduced by the number of shares of Common Stock
actually delivered pursuant to this Agreement.

     Section 6.3.
Registration and Listing. The Company shall take all action
necessary to cause the Common Stock to continue to be registered as a class of
securities under Sections 12(b) or 12(g) of the Exchange Act, shall comply with
its reporting and filing obligations under the Exchange Act, and shall not take
any action or file any document (whether or not permitted by the Securities Act
or the Exchange Act) to terminate or suspend such registration or to terminate
or suspend its reporting and filing obligations under the Exchange Act or
Securities Act, except as permitted herein. The Company shall use its reasonable
best efforts to continue the listing and trading of its Common Stock and the
listing of the Securities purchased or acquired by the Investor hereunder on the
Trading Market and to comply with the Company’s reporting, filing and other
obligations under the bylaws, listed securities maintenance standards and other
rules and regulations of the Trading Market. The Company shall not take any
action which could be reasonably expected to result in the delisting or
suspension of the Common Stock on the Trading Market. If the Company receives
any final and non-appealable notice that the listing or quotation of the Common
Stock on the Trading Market shall be terminated on a date certain, the Company
shall promptly (and in any case within 48 hours) notify the Investor of such
fact in writing and shall use its reasonable best efforts to cause the Common
Stock to be listed or quoted on another Trading Market prior to such date
certain.

     Section 6.4. Compliance
with Laws.

          (i) The
Company shall comply, and cause each Subsidiary to comply, (a) with all laws,
rules, regulations and orders applicable to the business and operations of the
Company and its Subsidiaries, except as would not have a Material Adverse Effect
and (b) with all applicable provisions of the Securities Act and the Exchange
Act and the rules and regulations of the Trading Market. Without limiting the
foregoing, neither the Company, nor any of its Subsidiaries, nor to the
Knowledge of the Company, any of their respective directors, officers, agents,
employees or any other Persons acting on their behalf shall, in connection with
the operation of the Company’s and its Subsidiaries’ respective businesses, (1)
use any corporate funds for unlawful contributions, payments, gifts or
entertainment or to make any unlawful expenditures relating to political
activity to government officials, candidates or members of political parties or
organizations, (2) pay, accept or receive any unlawful contributions, payments,
expenditures or gifts, or (3) violate or operate in noncompliance with any
export restrictions, anti-boycott regulations, embargo regulations or other
applicable domestic or foreign laws and regulations, including, without
limitation, the FCPA and the Money Laundering Laws.

23




          (ii) The
Investor shall comply with all laws, rules, regulations and orders applicable to
the performance by it of its obligations under this Agreement and its investment
in the Securities, except as would not, individually or in the aggregate,
prohibit or otherwise interfere with the ability of the Investor to enter into
and perform its obligations under this Agreement in any material respect.
Without limiting the foregoing, the Investor shall comply with all applicable
provisions of the Securities Act and the Exchange Act, including Regulation M
thereunder, and any applicable securities laws of any non-U.S.
jurisdictions.

     Section 6.5. Keeping of
Records and Books of Account; Due Diligence.

          (i) The
Company shall keep and cause each Subsidiary to keep adequate records and books
of account, in which complete entries shall be made in accordance with GAAP
consistently applied, reflecting all financial transactions of the Company and
its Subsidiaries, and in which, for each fiscal year, all proper reserves for
depreciation, depletion, obsolescence, amortization, taxes, bad debts and other
purposes in connection with its business shall be made. The Company shall
maintain a system of internal accounting controls that (a) pertain to the
maintenance of records that in reasonable detail accurately and fairly reflect
the transactions and dispositions of the assets of the Company; (b) provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the Company are
being made only in accordance with authorizations of management and directors of
the Company; and (c) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of the Company’s
assets that could have a material effect on the Company’s financial statements
(it being acknowledged and agreed that the identification by the Company and/or
its independent registered public accounting firm of any “significant
deficiencies” or “material weaknesses” (each as defined by the Public Company
Accounting Oversight Board) in the Company’s internal controls over its
financial reporting shall not, in and of itself, constitute a breach of this
Section 6.5(i)) .

          (ii)
Subject to the requirements of Section 6.16 of this Agreement, from time to time
from and after the Closing Date, the Company shall make available for inspection
and review by the Investor during normal business hours and after reasonable
notice, customary documentation reasonably requested by the Investor and/or its
appointed counsel or advisors to conduct due diligence; provided,
however, that after the Closing Date, the Investor’s continued due
diligence shall not be a condition to the issuance of any Draw Down Notice or
the settlement of any Draw Down.

24




     Section 6.6.
Limitations on Holdings and Issuances. The Company shall not
be obligated to issue and the Investor shall not be obligated to purchase any
shares of Common Stock which would cause the aggregate number of shares of
Common Stock then beneficially owned (as calculated pursuant to Section 13(d) of
the Exchange Act and Rule 13d-3 promulgated thereunder) by the Investor and its
Affiliates to exceed the Ownership Limitation. Promptly following any request by
the Company, the Investor shall inform the Company of the number of shares of
Common Stock then beneficially owned by the Investor and its Affiliates. 

     Section 6.7. Other
Agreements and Alternate Transactions.

          (i) The
Company shall not enter into, announce or recommend to its stockholders any
agreement, plan, arrangement or transaction in or of which the terms thereof
would restrict, materially delay, conflict with or impair the ability or right
of the Company to perform its obligations under the Transaction Documents to
which it is a party, including, without limitation, the obligation of the
Company to deliver the Shares to the Investor in respect of a Draw Down on the
applicable Settlement Date. For the avoidance of doubt, nothing in this Section
6.7(i) shall in any way limit the Company’s right to terminate this Agreement in
accordance with Section 8.1 (subject in all cases to Section 8.3) .

          (ii)
If the Company enters into any agreement, plan, arrangement or transaction with
a third party or seeks to utilize any existing agreement, plan or arrangement
with a third party, in each case the principal purpose of which is to implement,
effect or consummate, at any time during the period beginning on the first
Trading Day of any Pricing Period and ending on the second Trading Day next
following the applicable Settlement Date (the “Reference Period”),
an Alternate Transaction that does not constitute an Acceptable Transaction, the
Company shall provide prompt notice thereof (an “Alternate Transaction
Notice”) to the Investor; provided, however, that such
Alternate Transaction Notice must be received by the Investor not later than the
earlier of (a) 48 hours after the Company’s execution of any agreement,
plan, arrangement or transaction relating to such Alternate Transaction (or,
with respect to any existing agreement, plan or arrangement, 48 hours after the
Company has determined to utilize any such existing agreement, plan or
arrangement to implement, effect or consummate such Other Financing) and (b) the
second Trading Day immediately preceding the applicable Settlement Date with
respect to the applicable Draw Down Notice. If required under applicable law,
including, without limitation, Regulation FD promulgated by the Commission, or
under the applicable rules and regulations of the Trading Market, the Company
shall simultaneously publicly disclose the information included in any Alternate
Transaction Notice in accordance with Regulation FD and the applicable rules and
regulations of the Trading Market. For purposes of this Section 6.7(ii), any
press release issued by, or Commission Document filed by, the Company shall
constitute sufficient notice, provided that it is issued or filed, as the case
may be, within the time requirements set forth in the first sentence (including
the provisos thereto) of this Section 6.7(ii) for an Alternate Transaction
Notice. With respect to any Reference Period for which the Company is required
to provide an Alternate Transaction Notice pursuant to the first sentence of
this Section 6.7(ii), the Investor shall purchase the Shares subject to the
applicable Draw Down at the lower of (x) the price therefor in accordance
with the terms of this Agreement or (y) the third party’s per share purchase
price (or exercise or conversion price, as the case may be) in connection with
the Alternate Transaction, net of such third party’s discounts, Warrant Value
and fees.

25




          (iii)
For all purposes of this Agreement, an “Alternate Transaction”
shall mean (w) the issuance of Common Stock for a purchase price less than, or
the issuance of securities convertible into or exchangeable for Common Stock at
an exercise or conversion price (as the case may be) less than, the then Current
Market Price of the Common Stock (including, without limitation, pursuant to any
“equity line” or other financing that is substantially similar to the financing
provided for under this Agreement, or pursuant to any other transaction in which
the purchase, conversion or exchange price for such Common Stock is determined
using a floating discount or other post-issuance adjustable discount to the then
Current Market Price (any such transaction, a “Similar
Financing”)), in each case, after all fees, discounts, Warrant Value and
commissions associated with the transaction (a “Below Market
Offering”); (x) an “at-the-market” offering of Common Stock or
securities convertible into or exchangeable for Common Stock pursuant to Rule
415(a)(4) under the Securities Act (an “ATM”); (y) the
implementation by the Company of any mechanism in respect of any securities
convertible into or exchangeable for Common Stock for the reset of the purchase
price of the Common Stock to below the then Current Market Price of the Common
Stock (including, without limitation, any antidilution or similar adjustment
provisions in respect of any Company securities, but specifically excluding
customary antidilution adjustments for stock splits, stock dividends, stock
combinations, recapitalizations, reclassifications and similar events) (a
“Price Reset Provision”); or (z) the issuance of options, warrants
or similar rights of subscription or the issuance of convertible equity or debt
securities, in each case not constituting an Acceptable Transaction. For all
purposes of this Agreement, an “Acceptable Transaction” shall mean
the issuance by the Company of: (1) debt securities or any class or series of
preferred stock of the Company, in each case that are not convertible into or
exchangeable for Common Stock or securities convertible into or exchangeable for
Common Stock; (2) shares of Common Stock or securities convertible into or
exchangeable for Common Stock other than in connection with a Below Market
Offering or an ATM, and the issuance of shares of Common Stock upon the
conversion, exercise or exchange thereof; (3) shares of Common Stock or
securities convertible into or exchangeable for Common Stock in connection with
an underwritten public offering of equity securities of the Company or a
registered direct public offering of equity securities of the Company, in each
case where the price per share of such Common Stock (or the conversion or
exercise price of such securities, as applicable) is fixed concurrently with the
execution of definitive documentation relating to such offering, and the
issuance of shares of Common Stock upon the conversion, exercise or exchange
thereof; (4) shares of Common Stock or securities convertible into or
exchangeable for Common Stock in connection with awards under the Company’s
benefit and equity plans and arrangements or shareholder rights plan (as
applicable), and the issuance of shares of Common Stock upon the conversion,
exercise or exchange thereof; (5) shares of Common Stock issuable upon the
conversion, exercise or exchange of equity awards or convertible, exercisable or
exchangeable securities outstanding as of the Closing Date; (6) shares of Common
Stock in connection with stock splits, stock dividends, stock combinations,
recapitalizations, reclassifications and similar events; (7) shares of Common
Stock or securities convertible into or exercisable or exchangeable for Common
Stock issued in connection with the acquisition, license or sale of one or more
other companies, equipment, technologies, other assets or lines of business, and
the issuance of shares of Common Stock upon the conversion, exercise or exchange
thereof; (8) shares of Common Stock or securities convertible into or
exercisable or exchangeable for Common Stock or similar rights to subscribe for
the purchase of shares of Common Stock in connection with technology sharing,
collaboration, partnering, licensing, research and joint development agreements (or amendments
thereto) with third parties, and the issuance of shares of Common Stock upon the
conversion, exercise or exchange thereof; (9) shares of Common Stock or
securities convertible into or exchangeable for Common Stock to employees,
consultants and/or advisors as consideration for services rendered or to be
rendered, and the issuance of shares of Common Stock upon the conversion,
exercise or exchange thereof; and (10) shares of Common Stock or securities
convertible into or exchangeable for Common Stock issued in connection with
capital or equipment financings and/or real property lease arrangements, and the
issuance of shares of Common Stock upon the conversion, exercise or exchange
thereof.

26




     Section 6.8.
Corporate Existence. The Company shall take all steps
necessary to preserve and continue the corporate existence of the Company;
provided, however, that, except as provided in Section 6.9,
nothing in this Agreement shall be deemed to prohibit the Company from engaging
in any Fundamental Transaction with another Person. For the avoidance of doubt,
nothing in this Section 6.8 shall in any way limit the Company’s right to
terminate this Agreement in accordance with Section 8.1 (subject in all cases to
Section 8.3) .

     Section 6.9.
Fundamental Transaction. If a Draw Down Notice has been
delivered to the Investor and the transactions contemplated therein have not yet
been fully settled in accordance with the terms and conditions of this
Agreement, the Company shall not effect any Fundamental Transaction until the
expiration of five Trading Days following the Settlement Date with respect to
such Draw Down Notice.

     Section 6.10.
Delivery of Registration Statement and Prospectus;
Subsequent Changes. In accordance with the
Registration Rights Agreement, the Company shall deliver or make available to
the Investor and its counsel, without charge, an electronic copy of the
Registration Statement, the Prospectus and all amendments and supplements to the
Registration Statement or Prospectus that are filed with the Commission during
any period in which a Prospectus (or in lieu thereof, the notice referred to in
Rule 173(a) under the Securities Act) is required by the Securities Act to be
delivered in connection with resales of the Registrable Securities, in each case
as soon as reasonably practicable after the filing thereof with the Commission.
The Company shall provide the Investor a reasonable opportunity to comment on a
draft of each such document and shall give due consideration to all such
comments. The Company consents to the use of the Prospectus (and of any
Prospectus Supplement thereto) in accordance with the provisions of the
Securities Act and with the securities or “Blue Sky” laws of the jurisdictions
in which the Registrable Securities may be sold by the Investor, in connection
with the resale of the Registrable Securities and for such period of time
thereafter as the Prospectus (or in lieu thereof, the notice referred to in Rule
173(a) under the Securities Act) is required by the Securities Act to be
delivered in connection with resales of the Registrable Securities. If during
such period of time any event shall occur that in the reasonable judgment of the
Company and its counsel is required to be set forth in the Registration
Statement, the Prospectus or any Prospectus Supplement or should be set forth
therein in order to make the statements made therein (in the case of the
Prospectus or any Prospectus Supplement, in light of the circumstances under
which they were made) not misleading, or if it is necessary to amend the
Registration Statement or supplement or amend the Prospectus or any Prospectus
Supplement to comply with the Securities Act or any other applicable law or
regulation, the Company shall forthwith (i) notify the Investor to suspend the
resale of Registrable Securities during such period and (ii) prepare and file with the Commission an appropriate
amendment to the Registration Statement or Prospectus Supplement to the
Prospectus, and shall expeditiously furnish or make available to the Investor an
electronic copy thereof, so as to correct such statement or omission or effect
such compliance.

27




     Section 6.11.
Amendments to the Registration Statement; Prospectus
Supplements. Except as provided in this Agreement and other than
periodic reports required to be filed pursuant to the Exchange Act, the Company
shall not file with the Commission any amendment to the Registration Statement
that relates to the Investor, the Transaction Documents or the transactions
contemplated thereby or file with the Commission any Prospectus Supplement that
relates to the Investor, the Transaction Documents or the transactions
contemplated thereby with respect to which (a) the Investor shall not previously
have been advised, (b) the Company shall not have given due consideration to any
comments thereon received from the Investor or its counsel, or (c) the Investor
shall reasonably object after being so advised, unless it is necessary to amend
the Registration Statement or make any supplement to the Prospectus to comply
with the Securities Act or any other applicable law or regulation, in which case
the Company shall promptly so inform the Investor, the Investor shall be
provided with a reasonable opportunity to review and comment upon any disclosure
relating to the Investor and the Company shall expeditiously furnish to the
Investor an electronic copy thereof. In addition, for so long as, in the
reasonable opinion of counsel for the Investor, the Prospectus (or in lieu
thereof, the notice referred to in Rule 173(a) under the Securities Act) is
required to be delivered in connection with any sales of Registrable Securities
by the Investor, the Company shall not file any Prospectus Supplement without
delivering or making available a copy of such Prospectus Supplement to the
Investor promptly.

     Section 6.12. Stop
Orders. The Company shall notify the Investor as soon as possible (but
in no event later than 24 hours), and confirm in writing, upon its becoming
aware of the occurrence of any of the following events in respect of the
Registration Statement or related Prospectus or Prospectus Supplement relating
to an offering of Registrable Securities: (i) receipt of any request by the
Commission or any other federal or state governmental authority for any
additional information relating to the Registration Statement, the Prospectus or
any Prospectus Supplement, or for any amendment of or supplement to the
Registration Statement, the Prospectus, or any Prospectus Supplement; (ii) the
issuance by the Commission or any other federal or state governmental authority
of any stop order suspending the effectiveness of the Registration Statement or
prohibiting or suspending the use of the Prospectus or any Prospectus
Supplement, or of the suspension of qualification or exemption from
qualification of the Securities for offering or sale in any jurisdiction, or the
initiation or contemplated initiation of any proceeding for such purpose; and
(iii) any event or the existence of any condition or state of facts, which makes
any statement of a material fact made in the Registration Statement, the
Prospectus or any Prospectus Supplement untrue or which requires the making of
any additions to or changes to the statements then made in the Registration
Statement, the Prospectus or any Prospectus Supplement in order to state a
material fact required by the Securities Act to be stated therein or necessary
in order to make the statements then made therein (in the case of the Prospectus
or any Prospectus Supplement, in light of the circumstances under which they
were made) not misleading, or which requires an amendment to the Registration
Statement or a supplement to the Prospectus or any Prospectus Supplement to
comply with the Securities Act or any other law (other than the transactions
contemplated by any Draw Down Notice and the settlement thereof). The Company shall not be required to
disclose to the Investor the substance or specific reasons of any of the events
set forth in clauses (i) through (iii) of the immediately preceding sentence,
but rather, shall only be required to disclose that the event has occurred. The
Company shall not issue any Draw Down during the continuation of any of the
foregoing events. If at any time the Commission or any other federal or state
governmental authority shall issue any stop order suspending the effectiveness
of the Registration Statement or prohibiting or suspending the use of the
Prospectus or any Prospectus Supplement, the Company shall use commercially
reasonable efforts to obtain the withdrawal of such order at the earliest
possible time.

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     Section 6.13. Selling
Restrictions.

          (i)
Except as expressly set forth below, the Investor covenants that from and after
the Closing Date through and including the Trading Day next following the
expiration or termination of this Agreement (the “Restricted
Period”), neither the Investor nor any of its Affiliates nor any entity
managed or controlled by the Investor (collectively, the “Restricted
Persons” and each of the foregoing is referred to herein as a
“Restricted Person”) shall, directly or indirectly, (x) engage in
any Short Sales involving the Company’s securities or (y) grant any option to
purchase, or acquire any right to dispose of or otherwise dispose for value of,
any shares of Common Stock or any securities convertible into or exercisable or
exchangeable for any shares of Common Stock, or enter into any swap, hedge or
other similar agreement that transfers, in whole or in part, the economic risk
of ownership of the Common Stock. Notwithstanding the foregoing, it is expressly
understood and agreed that nothing contained herein shall (without implication
that the contrary would otherwise be true) prohibit any Restricted Person during
the Restricted Period from: (1) selling “long” (as defined under Rule 200
promulgated under Regulation SHO) the Securities; or (2) selling a number of
shares of Common Stock equal to the number of Shares that such Restricted Person
is or may be obligated to purchase under a pending Draw Down Notice but has not
yet taken possession of so long as such Restricted Person (or the Broker-Dealer,
as applicable) delivers the Shares purchased pursuant to such Draw Down Notice
to the purchaser thereof or the applicable Broker-Dealer; provided,
however, such Restricted Person (or the applicable Broker-Dealer, as
applicable) shall not be required to so deliver any such Shares subject to such
Draw Down Notice if the Company fails for any reason to deliver such Shares to
the Investor on the applicable Settlement Date upon the terms and subject to the
provisions of this Agreement.

          (ii) In
addition to the foregoing, in connection with any sale of Securities (including
any sale permitted by paragraph (i) above), the Investor shall comply in all
respects with all applicable laws, rules, regulations and orders, including,
without limitation, the requirements of the Securities Act and the Exchange
Act.

     Section 6.14.
Effective Registration Statement. During the Investment
Period, the Company shall use its commercially reasonable efforts to maintain
the continuous effectiveness of the Registration Statement under the Securities
Act.

     Section 6.15. Blue
Sky. The Company shall take such action, if any, as is necessary in
order to obtain an exemption for or to qualify the Securities for issuance and
sale to the Investor pursuant to the Transaction Documents, at the request of
the Investor, and the subsequent resale of Registrable Securities by the Investor, in each case, under
applicable state securities or “Blue Sky” laws and shall provide evidence of any
such action so taken to the Investor from time to time following the Closing
Date; provided, however, that the Company shall not be required in
connection therewith or as a condition thereto to (x) qualify to do business in
any jurisdiction where it would not otherwise be required to qualify but for
this Section 6.15, (y) subject itself to general taxation in any such
jurisdiction, or (z) file a general consent to service of process in any such
jurisdiction.

29




     Section 6.16.
Non-Public Information. Neither the Company or any of its
Subsidiaries, nor any of their respective directors, officers, employees or
agents shall disclose any material non-public information about the Company to
the Investor, unless a simultaneous public announcement thereof is made by the
Company in the manner contemplated by Regulation FD. In the event of a breach of
the foregoing covenant by the Company or any of its Subsidiaries, or any of
their respective directors, officers, employees and agents (as determined in the
reasonable good faith judgment of the Investor), (i) the Investor shall promptly
provide written notice of such breach to the Company and (ii) after such notice
has been provided to the Company and in addition to any other remedy provided
herein or in the other Transaction Documents, the Investor shall have the right
to make a public disclosure, in the form of a press release, public
advertisement or otherwise, of such material, non-public information without the
prior approval by the Company, any of its Subsidiaries, or any of their
respective directors, officers, employees or agents; provided that the Company
shall have failed to publicly disclose such material, non-public information
within 24 hours following demand therefor by the Investor. The Investor shall
not have any liability to the Company, any of its Subsidiaries, or any of their
respective directors, officers, employees, stockholders or agents, for any such
disclosure.

     Section 6.17.
Broker/Dealer. The Investor shall use one or more
broker-dealers to effectuate all sales, if any, of Securities that it may
purchase or otherwise acquire from the Company pursuant to the Transaction
Documents, as applicable, which (or whom) shall be unaffiliated with the
Investor and not then currently engaged or used by the Company (collectively,
the “Broker-Dealer”). The Investor shall, from time to time,
provide the Company with all information regarding the Broker-Dealer reasonably
requested by the Company. The Investor shall be solely responsible for all fees
and commissions of the Broker-Dealer, which shall not exceed customary brokerage
fees and commissions.

     Section 6.18. Disclosure
Schedule.

          (i) The
Company may, from time to time, update the Disclosure Schedule as may be
required to satisfy the condition set forth in Section 7.2(i) . For purposes of
this Section 6.18, any disclosure made in a schedule to the Compliance
Certificate substantially in the form attached hereto as Exhibit D shall
be deemed to be an update of the Disclosure Schedule. Notwithstanding anything
in this Agreement to the contrary, no update to the Disclosure Schedule pursuant
to this Section 6.18 shall cure any breach of a representation or warranty of
the Company contained in this Agreement and made prior to the update and shall
not affect any of the Investor’s rights or remedies with respect thereto.

          (ii)
Notwithstanding anything to the contrary contained in the Disclosure Schedule or
in this Agreement, the information and disclosure contained in any Schedule of
the Disclosure Schedule shall be deemed to be disclosed and
incorporated by reference in any other Schedule of the Disclosure Schedule as
though fully set forth in such Schedule for which applicability of such
information and disclosure is readily apparent on its face. The fact that any
item of information is disclosed in the Disclosure Schedule shall not be
construed to mean that such information is required to be disclosed by this
Agreement. Except as expressly set forth in this Agreement, such information and
the thresholds (whether based on quantity, qualitative characterization, dollar
amounts or otherwise) set forth herein shall not be used as a basis for
interpreting the terms “material” or “Material Adverse Effect” or other similar
terms in this Agreement.

30




ARTICLE VII
CONDITIONS TO CLOSING AND CONDITIONS TO
THE SALE AND 
PURCHASE OF THE SHARES

     Section 7.1.
Conditions Precedent to Closing. The Closing is subject to the
satisfaction of each of the conditions set forth in this Section 7.1.

          (i)
Accuracy of the Investor’s Representations and Warranties. The
representations and warranties of the Investor contained in this Agreement (a)
that are not qualified by “materiality” shall be true and correct in all
material respects as of the Closing Date, except to the extent such
representations and warranties are as of another date, in which case, such
representations and warranties shall be true and correct in all material
respects as of such other date and (b) that are qualified by “materiality” shall
be true and correct as of the Closing Date, except to the extent such
representations and warranties are as of another date, in which case, such
representations and warranties shall be true and correct as of such other
date.

          (ii)
Accuracy of the Company’s Representations and Warranties. The
representations and warranties of the Company contained in this Agreement (a)
that are not qualified by “materiality” or “Material Adverse Effect” shall be
true and correct in all material respects as of the Closing Date, except to the
extent such representations and warranties are as of another date, in which
case, such representations and warranties shall be true and correct in all
material respects as of such other date and (b) that are qualified by
“materiality” or “Material Adverse Effect” shall be true and correct as of the
Closing Date, except to the extent such representations and warranties are as of
another date, in which case, such representations and warranties shall be true
and correct as of such other date.

          (iii)
Issuance of Commitment Shares. Prior to the Closing, the
Company shall have caused its transfer agent to issue to the Investor a
certificate representing the Commitment Shares in the name of the Investor or
its designee, in consideration for the Investor’s execution and delivery of this
Agreement. For the avoidance of doubt, all of the Commitment Shares shall be
fully earned as of the Closing Date regardless of whether any Draw Downs are
issued by the Company or settled hereunder.

          (iv)
Closing Deliverables. At the Closing, counterpart signature pages
of this Agreement and the Registration Rights Agreement executed by each of the
parties hereto shall be delivered as provided in Section 2.2. Simultaneously
with the execution and delivery of this Agreement and the Registration Rights Agreement, the Investor’s
counsel shall have received a certificate from the Company, dated the Closing
Date, in the form of Exhibit C hereto.

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     Section 7.2.
Conditions Precedent to a Draw Down. The right of the Company
to deliver a Draw Down Notice and the obligation of the Investor to accept a
Draw Down Notice and to acquire and pay for the Shares in accordance therewith
is subject to the satisfaction, at each Draw Down Exercise Date and at each
Settlement Date (except as otherwise expressly set forth below), of each of the
conditions set forth in this Section 7.2.

          (i)
Accuracy of the Company’s Representations and Warranties. The
representations and warranties of the Company contained in this Agreement (a)
that are not qualified by “materiality” or “Material Adverse Effect” shall have
been true and correct in all material respects when made and shall be true and
correct in all material respects as of the applicable Draw Down Exercise Date
and the applicable Settlement Date with the same force and effect as if made on
such dates, except to the extent such representations and warranties are as of
another date, in which case, such representations and warranties shall be true
and correct in all material respects as of such other date and (b) that are
qualified by “materiality” or “Material Adverse Effect” shall have been true and
correct when made and shall be true and correct as of the applicable Draw Down
Exercise Date and the applicable Settlement Date with the same force and effect
as if made on such dates, except to the extent such representations and
warranties are as of another date, in which case, such representations and
warranties shall be true and correct as of such other date.

          (ii)
Performance of the Company. The Company shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement and the Registration Rights Agreement
to be performed, satisfied or complied with by the Company at or prior to the
applicable Draw Down Exercise Date and the applicable Settlement Date. The
Company shall have delivered to the Investor on the applicable Settlement Date
the Compliance Certificate substantially in the form attached hereto as
Exhibit D.

          (iii)
Registration Statement Effective. The Registration Statement
covering the resale by the Investor of the Registrable Securities shall have
been declared effective under the Securities Act by the Commission and shall
remain effective, and the Investor shall be permitted to utilize the Prospectus
therein to resell (a) all of the Commitment Shares, (b) all of the Shares issued
pursuant to all prior Draw Down Notices, and (c) all of the Shares issuable
pursuant to the applicable Draw Down Notice.

          (iv)
No Material Notices. None of the following events shall have
occurred and be continuing: (a) receipt of any request by the Commission or any
other federal or state governmental authority for any additional information
relating to the Registration Statement, the Prospectus or any Prospectus
Supplement, or for any amendment of or supplement to the Registration Statement,
the Prospectus, or any Prospectus Supplement; (b) the issuance by the Commission
or any other federal or state governmental authority of any stop order
suspending the effectiveness of the Registration Statement or prohibiting or
suspending the use of the Prospectus or any Prospectus Supplement, or of the
suspension of qualification or exemption from qualification of the Securities
for offering or sale in any jurisdiction, or the initiation or contemplated initiation of any proceeding for such purpose; or
(c) the occurrence of any event or the existence of any condition or state of
facts, which makes any statement of a material fact made in the Registration
Statement, the Prospectus or any Prospectus Supplement untrue or which requires
the making of any additions to or changes to the statements then made in the
Registration Statement, the Prospectus or any Prospectus Supplement in order to
state a material fact required by the Securities Act to be stated therein or
necessary in order to make the statements then made therein (in the case of the
Prospectus or any Prospectus Supplement, in light of the circumstances under
which they were made) not misleading, or which requires an amendment to the
Registration Statement or a supplement to the Prospectus or any Prospectus
Supplement to comply with the Securities Act or any other law (other than the
transactions contemplated by the applicable Draw Down Notice and the settlement
thereof). The Company shall have no Knowledge of any event that could reasonably
be expected to have the effect of causing the suspension of the effectiveness of
the Registration Statement or the prohibition or suspension of the use of the
Prospectus or any Prospectus Supplement in connection with the resale of the
Registrable Securities by the Investor.

32




          (v)
Other Commission Filings. The Current Report and the Form D shall
have been filed with the Commission as required pursuant to Section 2.3, and the
final Prospectus and all other Prospectus Supplements required to have been
filed with the Commission pursuant to Section 2.3 and pursuant to the
Registration Rights Agreement shall have been filed with the Commission in
accordance with Section 2.3 and the Registration Rights Agreement. All reports,
schedules, registrations, forms, statements, information and other documents
required to have been filed by the Company with the Commission pursuant to the
reporting requirements of the Exchange Act, including all material required to
have been filed pursuant to Section 13(a) or 15(d) of the Exchange Act, shall
have been filed with the Commission and, if any Registrable Securities are
covered by a Registration Statement on Form S-3, such filings shall have been
made within the applicable time period prescribed for such filing under the
Exchange Act.

          (vi)
No Suspension of Trading in or Notice of Delisting of Common
Stock. Trading in the Common Stock shall not have been suspended by the
Commission, the Trading Market or the FINRA (except for any suspension of
trading of limited duration agreed to by the Company, which suspension shall be
terminated prior to the applicable Draw Down Exercise Date), the Company shall
not have received any final and non-appealable notice that the listing or
quotation of the Common Stock on the Trading Market shall be terminated on a
date certain (unless, prior to such date certain, the Common Stock is listed or
quoted on any other Trading Market), and trading in securities generally as
reported on the Trading Market shall not have been suspended or limited, nor
shall a banking moratorium have been declared either by the U.S. or New York
State authorities (except for any suspension, limitation or moratorium which
shall be terminated prior to the applicable Draw Down Exercise Date), nor shall
there have occurred any material outbreak or escalation of hostilities or other
national or international calamity or crisis that has had or would reasonably be
expected to have a material adverse change in any U.S. financial, credit or
securities market that is continuing as of the applicable Draw Down Exercise
Date.

          (vii)
Compliance with Laws. The Company shall have complied with all
applicable federal, state and local governmental laws, rules, regulations and
ordinances in connection with the execution, delivery and performance of this
Agreement and the other Transaction Documents to which it is a party and the
consummation of the transactions contemplated hereby and thereby, including,
without limitation, the Company shall have obtained all permits and
qualifications required by any applicable state securities or “Blue Sky” laws
for the offer and sale of the Securities by the Company to the Investor and the
subsequent resale of the Registrable Securities by the Investor (or shall have
the availability of exemptions therefrom).

33




          (viii)
No Injunction. No statute, regulation, order, decree, writ, ruling
or injunction shall have been enacted, entered, promulgated, threatened or
endorsed by any court or governmental authority of competent jurisdiction which
prohibits the consummation of or which would materially modify or delay any of
the transactions contemplated by the Transaction Documents.

          (ix)
No Proceedings or Litigation. No action, suit or proceeding before
any arbitrator or any court or governmental authority shall have been commenced
or threatened, and no inquiry or investigation by any governmental authority
shall have been commenced or threatened, against the Company or any Subsidiary,
or any of the officers, directors or affiliates of the Company or any
Subsidiary, seeking to restrain, prevent or change the transactions contemplated
by the Transaction Documents, or seeking material damages in connection with
such transactions.

          (x)
Aggregate Limit. The issuance and sale of the Shares
issuable pursuant to such Draw Down Notice shall not violate Sections 3.1, 3.7,
3.9 and 6.6 hereof.

          (xi)
Securities Authorized and Delivered. The Shares issuable
pursuant to such Draw Down Notice shall have been duly authorized by all
necessary corporate action of the Company. The Company shall have delivered all
Shares relating to all prior Draw Down Notices [and all Maintenance Fee Shares
required to be delivered pursuant to this Agreement], as applicable.

          (xii)
Listing of Securities. All of the Securities that may be
issued pursuant to this Agreement shall have been approved for listing or
quotation on the Trading Market as of the Closing Date, subject only to notice
of issuance.

          (xiii)
No Material Adverse Effect. No condition, occurrence, state
of facts or event constituting a Material Adverse Effect shall have occurred and
be continuing.

          (xiv)
No Restrictive Legends. If requested by the Investor from and
after the Effective Date, the Company shall have either (i) issued and delivered
(or caused to be issued and delivered) to the Investor a certificate
representing the Commitment Shares that is free from all restrictive and other
legends or (ii) caused the Company’s transfer agent to credit the Investor’s or
its designee’s account at DTC through its Deposit/Withdrawal at Custodian (DWAC)
system with a number of shares of Common Stock equal to the number of Commitment
Shares represented by the certificate delivered by the Investor to the Company
in accordance with Section 10.1(iv) of this Agreement.

34




          (xv)
Opinion of Counsel; Bring-Down. Prior to the first Draw Down
Exercise Date, the Investor shall have received an opinion from outside counsel
to the Company, in the form mutually agreed to by the parties hereto. On each
Settlement Date, the Investor shall have received an opinion “bring down” from
outside counsel to the Company, dated the applicable Settlement Date, in the
form mutually agreed to by the parties hereto.

ARTICLE VIII 
TERMINATION

     Section 8.1.
Termination. Unless earlier terminated as provided hereunder,
this Agreement shall terminate automatically on the earlier to occur of
(i) the first day of the month next following the 24-month anniversary of the
Effective Date and (ii) the date on which the Investor shall have purchased or
acquired shares of Common Stock pursuant to this Agreement equal to the
Aggregate Limit. Subject to Section 8.3, the Company may terminate this
Agreement effective upon one Trading Day’s prior written notice to the Investor
in accordance with Section 10.4; provided, however, that (A) the
Company shall have issued all Commitment Shares owed to the Investor or its
counsel, as applicable, pursuant to Section 10.1 of this Agreement, prior to
such termination, and (B) prior to issuing any press release, or making any
public statement or announcement, with respect to such termination, the Company
shall consult with the Investor and shall obtain the Investor’s consent to the
form and substance of such press release or other disclosure, which consent
shall not be unreasonably delayed or withheld. Subject to Section 8.3, this
Agreement may be terminated at any time by the mutual written consent of the
parties, effective as of the date of such mutual written consent unless
otherwise provided in such written consent.

     Section 8.2. Other
Termination. Subject to Section 8.3, the Investor shall have the right
to terminate this Agreement effective upon one Trading Day’s prior written
notice to the Company in accordance with Section 10.4, if: (i) any condition,
occurrence, state of facts or event constituting a Material Adverse Effect has
occurred and is continuing; (ii) the Company shall have entered into any
agreement, plan, arrangement or transaction with a third party or shall have
determined to utilize any existing agreement, plan or arrangement with a third
party, in each case the principal purpose of which is to implement, effect or
consummate at any time during the Investment Period a Similar Financing, an ATM
or a Price Reset Provision; (iii) a Fundamental Transaction shall have occurred;
(iv) the Registration Statement is not filed by the Filing Deadline (as defined
in the Registration Rights Agreement) or declared effective by the Effectiveness
Deadline (as defined in the Registration Rights Agreement), or the Company is
otherwise in breach or default in any material respect under any of the other
provisions of the Registration Rights Agreement, and, if such failure, breach or
default is capable of being cured, such failure, breach or default is not cured
within 10 Trading Days after notice of such failure, breach or default is
delivered to the Company pursuant to Section 10.4; (v) while the Registration
Statement is required to be maintained effective pursuant to the terms of the
Registration Rights Agreement and the Investor holds any Registrable Securities,
the effectiveness of the Registration Statement lapses for any reason
(including, without limitation, the issuance of a stop order) or the
Registration Statement, the Prospectus or any Prospectus Supplement is otherwise
unavailable to the Investor for the resale of all of the Registrable Securities
in accordance with the terms of the Registration Rights Agreement, and such
lapse or unavailability continues for a period of 20 consecutive Trading Days or
for more than an aggregate of 60 Trading Days in any 365-day period, other than
due to acts of the Investor; (vi) trading in the Common Stock on the Trading
Market shall have been suspended or the Common Stock shall have failed to be
listed or quoted on a Trading Market, and such suspension or failure continues
for a period of 20 consecutive Trading Days or for more than an aggregate of 60
Trading Days in any 365-day period; (vii) the Company has filed for and/or is
subject to any bankruptcy, insolvency, reorganization or liquidation proceedings
or other proceedings for relief under any bankruptcy law or any law for the
relief of debtors instituted by or against the Company or (viii) the Company is
in material breach or default of this Agreement, and, if such breach or default
is capable of being cured, such breach or default is not cured within 10 Trading
Days after notice of such breach or default is delivered to the Company pursuant
to Section 10.4. Unless notification thereof is required elsewhere in this
Agreement (in which case such notification shall be provided in accordance with
such other provision), the Company shall promptly (but in no event later than 24
hours) notify the Investor (and, if required under applicable law, including,
without limitation, Regulation FD promulgated by the Commission, or under the
applicable rules and regulations of the Trading Market, the Company shall
publicly disclose such information in accordance with Regulation FD and the
applicable rules and regulations of the Trading Market) upon becoming aware of
any of the events set forth in the immediately preceding sentence.

35




     Section 8.3. Effect
of Termination. In the event of termination by the Company or the
Investor pursuant to Section 8.1 or 8.2, as applicable, written notice thereof
shall forthwith be given to the other party as provided in Section 10.4 and the
transactions contemplated by this Agreement shall be terminated without further
action by either party. If this Agreement is terminated as provided in Section
8.1 or 8.2 herein, this Agreement shall become void and of no further force and
effect, except that (i) the provisions of Article V (Representations and
Warranties of the Company), Article IX (Indemnification), Article X
(Miscellaneous) and this Article VIII (Termination) shall remain in full force
and effect indefinitely notwithstanding such termination, and, (ii) so long as
the Investor owns any Securities, the covenants and agreements of the Company
contained in Article VI (Additional Covenants) shall remain in full force and
notwithstanding such termination for a period of six months following such
termination. Notwithstanding anything in this Agreement to the contrary, no
termination of this Agreement by any party shall (i) become effective prior to
the first Trading Day immediately following the Settlement Date related to any
pending Draw Down Notice that has not been fully settled in accordance with the
terms and conditions of this Agreement (it being hereby acknowledged and agreed
that no termination of this Agreement shall limit, alter, modify, change or
otherwise affect any of the Company’s or the Investor’s rights or obligations
under the Transaction Documents with respect to any pending Draw Down, and that
the parties shall fully perform their respective obligations with respect to any
such pending Draw Down under the Transaction Documents, provided all of
the conditions to the settlement thereof set forth in Article VII are timely
satisfied), (ii) limit, alter, modify, change or otherwise affect the Company’s
or the Investor’s rights or obligations under the Registration Rights Agreement,
all of which shall survive any such termination, (iii) affect any Commitment
Shares previously issued or delivered, or any rights of any holder thereof (it
being hereby acknowledged and agreed that all of the Commitment Shares shall be
fully earned as of the Closing Date, regardless of whether any Draw Downs are
issued by the Company or settled hereunder), or (iv) affect any cash fees paid
to the Investor or its counsel pursuant to Section 10.1 (including, without
limitation, the Document Preparation Fee), in each case all of which fees shall
be non-refundable when paid regardless of whether any Draw Downs are issued by the Company or settled
hereunder. Nothing in this Section 8.3 shall be deemed to release the Company or
the Investor from any liability for any breach or default under this Agreement
or any of the other Transaction Documents to which it is a party, or to impair
the rights of the Company and the Investor to compel specific performance by the
other party of its obligations under the Transaction Documents to which it is a
party.

36




ARTICLE IX
 INDEMNIFICATION

     Section 9.1.
Indemnification of Investor. In consideration of the
Investor’s execution and delivery of this Agreement and acquiring the Shares
hereunder and in addition to all of the Company’s other obligations under the
Transaction Documents to which it is a party, subject to the provisions of this
Section 9.1, the Company shall indemnify and hold harmless the Investor, each of
its directors, officers, shareholders, members, partners, employees,
representatives, agents and advisors (and any other Persons with a functionally
equivalent role of a Person holding such titles notwithstanding the lack of such
title or any other title), each Person, if any, who controls the Investor
(within the meaning of Section 15 of the Securities Act or Section 20(a) of the
Exchange Act), and the respective directors, officers, shareholders, members,
partners, employees, representatives, agents and advisors (and any other Persons
with a functionally equivalent role of a Person holding such titles
notwithstanding the lack of such title or any other title) of such controlling
Persons (each, an “Investor Party”), from and against all losses,
liabilities, obligations, claims, contingencies, damages, costs and expenses
(including all judgments, amounts paid in settlement, court costs, reasonable
attorneys’ fees and costs of defense and investigation) (collectively,
“Damages”) that any Investor Party may suffer or incur as a result
of or relating to (a) any breach of any of the representations, warranties,
covenants or agreements made by the Company in this Agreement or in the other
Transaction Documents to which it is a party or (b) any action, suit, claim or
proceeding (including for these purposes a derivative action brought on behalf
of the Company) instituted against such Investor Party arising out of or
resulting from the execution, delivery, performance or enforcement of the
Transaction Documents, other than claims for indemnification within the scope of
Section 6 of the Registration Rights Agreement; provided, however,
that (x) the foregoing indemnity shall not apply to any Damages to the extent,
but only to the extent, that such Damages resulted directly and primarily from a
breach of any of the Investor’s representations, warranties, covenants or
agreements contained in this Agreement or the Registration Rights Agreement, and
(y) the Company shall not be liable under subsection (b) of this Section 9.1 to
the extent, but only to the extent, that a court of competent jurisdiction shall
have determined by a final judgment (from which no further appeals are
available) that such Damages resulted directly and primarily from any acts or
failures to act, undertaken or omitted to be taken by such Investor Party
through its fraud, bad faith, gross negligence, or willful or reckless
misconduct.

     The Company shall reimburse any
Investor Party promptly upon demand (with accompanying presentation of
documentary evidence) for all legal and other costs and expenses reasonably
incurred by such Investor Party in connection with (i) any action, suit, claim
or proceeding, whether at law or in equity, to enforce compliance by the Company
with any provision of the Transaction Documents or (ii) any other any action,
suit, claim or proceeding, whether at law or in equity, with respect to which it
is entitled to indemnification under this Section 9.1; provided that the
Investor shall promptly reimburse the Company for all such legal and other costs and expenses to the extent a court of competent
jurisdiction determines that any Investor Party was not entitled to such
reimbursement.

37




     An Investor Party’s right to
indemnification or other remedies based upon the representations, warranties,
covenants and agreements of the Company set forth in the Transaction Documents
shall not in any way be affected by any investigation or knowledge of such
Investor Party. Such representations, warranties, covenants and agreements shall
not be affected or deemed waived by reason of the fact that an Investor Party
knew or should have known that any representation or warranty might be
inaccurate or that the Company failed to comply with any agreement or covenant.
Any investigation by such Investor Party shall be for its own protection only
and shall not affect or impair any right or remedy hereunder.

     To the extent that the foregoing
undertakings by the Company set forth in this Section 9.1 may be unenforceable
for any reason, the Company shall make the maximum contribution to the payment
and satisfaction of each of the Damages which is permissible under applicable
law.

     Section 9.2.
Indemnification Procedures. Promptly after an Investor Party
receives notice of a claim or the commencement of an action for which the
Investor Party intends to seek indemnification under Section 9.1, the Investor
Party will notify the Company in writing of the claim or commencement of the
action, suit or proceeding; provided, however, that failure to
notify the Company will not relieve the Company from liability under Section
9.1, except to the extent it has been materially prejudiced by the failure to
give notice. The Company will be entitled to participate in the defense of any
claim, action, suit or proceeding as to which indemnification is being sought,
and if the Company acknowledges in writing the obligation to indemnify the
Investor Party against whom the claim or action is brought, the Company may (but
will not be required to) assume the defense against the claim, action, suit or
proceeding with counsel satisfactory to it. After the Company notifies the
Investor Party that the Company wishes to assume the defense of a claim, action,
suit or proceeding, the Company will not be liable for any further legal or
other expenses incurred by the Investor Party in connection with the defense
against the claim, action, suit or proceeding except that if, in the opinion of
counsel to the Investor Party, it would be inappropriate under the applicable
rules of professional responsibility for the same counsel to represent both the
Company and such Investor Party. In such event, the Company will pay the
reasonable fees and expenses of no more than one separate counsel for all such
Investor Parties promptly as such fees and expenses are incurred. Each Investor
Party, as a condition to receiving indemnification as provided in Section 9.1,
will cooperate in all reasonable respects with the Company in the defense of any
action or claim as to which indemnification is sought. The Company will not be
liable for any settlement of any action effected without its prior written
consent, which consent shall not be unreasonably withheld, delayed or
conditioned. The Company will not, without the prior written consent of the
Investor Party, effect any settlement of a pending or threatened action with
respect to which an Investor Party is, or is informed that it may be, made a
party and for which it would be entitled to indemnification, unless the
settlement includes an unconditional release of the Investor Party from all
liability and claims which are the subject matter of the pending or threatened
action.

     The remedies provided for in this
Article IX are not exclusive and shall not limit any rights or remedies which
may otherwise be available to any Investor Party at law or in equity.

38




ARTICLE X 
MISCELLANEOUS

     Section 10.1. Fees and
Expenses.

          (i)
Counsel and Other Fees and Expenses. Each party shall bear its own
fees and expenses related to the transactions contemplated by this Agreement;
provided, however, that the Company shall reimburse the Investor,
by wire transfer of immediately available funds to an account designated by the
Investor, a non-accountable and non-refundable document preparation fee of
$15,000, exclusive of disbursements and out-of-pocket expenses (the
“Document Preparation Fee”), in connection with the preparation,
negotiation, execution and delivery of the Transaction Documents, which Document
Preparation Fee shall be paid as follows: (i) $5,000 of such Document
Preparation Fee shall be paid on or prior to April 7, 2013 and (ii) $10,000 of
such Document Preparation Fee shall be paid within 20 days following the
Effective Date. For the avoidance of doubt, the Document Preparation Fee (and
any portion thereof) shall be non-refundable when paid, regardless of whether
any Draw Downs are issued by the Company or settled hereunder. The Company shall
pay all U.S. federal, state and local stamp and other similar transfer and other
taxes and duties levied in connection with issuance of the Securities pursuant
hereto.

          (ii)
Commitment Shares. In consideration for the Investor’s execution
and delivery of this Agreement, prior to the date of this Agreement, the Company
shall have caused its transfer agent to issue to the Investor a certificate
representing the Commitment Shares in the name of the Investor or its designee.
For the avoidance of doubt, all of the Commitment Shares shall be fully earned
as of the Closing Date regardless of whether any Draw Downs are issued by the
Company or settled hereunder. Upon issuance, the Commitment Shares shall
constitute “restricted securities” as such term is defined in Rule 144(a)(3)
under the Securities Act and, subject to the provisions of subsection (iv) of
this Section 10.1, the certificate representing the Commitment Shares shall bear
the restrictive legend set forth below in subsection (iii) of this Section 10.1.
The Commitment Shares shall constitute Registrable Securities and shall be
included in the Registration Statement in accordance with the terms of the
Registration Rights Agreement.

          (iii)
Legends. The certificate(s) representing the Commitment Shares and
any Maintenance Fee Shares issued prior to the Effective Date, except as set
forth below, shall bear a restrictive legend in substantially the following form
(and a stop-transfer order may be placed against transfer of such stock
certificate(s)):


	
      THE OFFER AND SALE OF THE SECURITIES REPRESENTED BY THIS
      CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
      AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE
      OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A)
      AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE
      HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO
      THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT
      OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 UNDER SAID
      ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
      CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
    ARRANGEMENT SECURED BY THE SECURITIES. 





39




     Notwithstanding the foregoing and
for the avoidance of doubt, all Shares to be issued in respect of any Draw Down
Notice delivered to the Investor pursuant to this Agreement shall be issued to
the Investor in accordance with Section 3.5 by crediting the Investor’s or its
designees’ account at DTC through its Deposit/Withdrawal at Custodian (DWAC)
system, and all such Shares shall be freely tradable and transferable and
without restriction on resale (and no stop-transfer order shall be placed
against transfer thereof), and the Company shall not take any action or give
instructions to any transfer agent of the Company otherwise.

          (iv)
Removal of Legend. From and after the Effective Date, the Company
shall, no later than two Trading Days following the delivery by the Investor to
the Company or the Company’s transfer agent (with notice to the Company) of a
legended certificate representing the Commitment Shares (endorsed or with stock
powers attached, signatures guaranteed, and otherwise in form necessary to
affect the reissuance and/or transfer, if applicable), as directed by the
Investor, either: (A) issue and deliver (or cause to be issued and delivered) to
the Investor a certificate representing such Commitment Shares that is free from
all restrictive and other legends or (B) cause the Company’s transfer agent to
credit the Investor’s or its designee’s account at DTC through its
Deposit/Withdrawal at Custodian (DWAC) system with a number of shares of Common
Stock equal to the number of Commitment Shares represented by the certificate so
delivered by the Investor (the date by which such certificate is required to be
delivered to the Investor or such credit is so required to be made to the
account of the Investor or its designee at DTC pursuant to the foregoing is
referred to herein as the “Required Delivery Date”). If the
Company fails on or prior to the Required Delivery Date to either (i) issue and
deliver (or cause to be issued and delivered) to the Investor a certificate
representing the Commitment Shares that is free from all restrictive and other
legends or (ii) cause the Company’s transfer agent to credit the balance account
of the Investor or its designee at DTC through its Deposit/Withdrawal at
Custodian (DWAC) system with a number of shares of Common Stock equal to the
number of Commitment Shares represented by the certificate delivered by the
Investor pursuant hereto, then, in addition to all other remedies available to
the Investor, the Company shall pay in cash to the Investor on each day after
the Required Delivery Date that the issuance or credit of such shares is not
timely effected an amount equal to 2.0% of the product of (A) the sum of the
number of Commitment Shares not issued to the Investor on a timely basis and to
which the Investor is entitled and (B) the VWAP for the five Trading Day period
immediately preceding the Required Delivery Date. In addition to the foregoing,
if the Company fails to so properly deliver such unlegended certificates or so
properly credit the account of the Investor or its designee at DTC by the
Required Delivery Date, and if on or after the Required Delivery Date the
Investor purchases (in an open market transaction or otherwise) shares of Common
Stock to deliver in satisfaction of a sale by the Investor of shares of Common
Stock that the Investor anticipated receiving from the Company without any
restrictive legend, then the Company shall, within three Trading Days after the
Investor’s request, pay cash to the Investor in an amount equal to the
Investor’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so
purchased, at which point the Company’s obligation to deliver a certificate or
credit such Investor’s or its designee’s account at DTC for such shares of
Common Stock shall terminate and such shares shall be cancelled.

40




     Section 10.2. Specific
Enforcement, Consent to Jurisdiction, Waiver of Jury Trial.

          (i)
The Company and the Investor acknowledge and agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that either party shall be entitled to an injunction or
injunctions to prevent or cure breaches of the provisions of this Agreement by
the other party and to enforce specifically the terms and provisions hereof
(without the necessity of showing economic loss and without any bond or other
security being required), this being in addition to any other remedy to which
either party may be entitled by law or equity.

          (ii)
Each of the Company and the Investor (a) hereby irrevocably submits to the
jurisdiction of the U.S. District Court and other courts of the United States
sitting in the State of New York for the purposes of any suit, action or
proceeding arising out of or relating to this Agreement, and (b) hereby waives,
and agrees not to assert in any such suit, action or proceeding, any claim that
it is not personally subject to the jurisdiction of such court, that the suit,
action or proceeding is brought in an inconvenient forum or that the venue of
the suit, action or proceeding is improper. Each of the Company and the Investor
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address in effect for notices to it
under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing in this Section 10.2
shall affect or limit any right to serve process in any other manner permitted
by law.

          (iii)
EACH OF THE COMPANY AND THE INVESTOR HEREBY WAIVES TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR DISPUTES RELATING
HERETO. EACH OF THE COMPANY AND THE INVESTOR (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.2.

     Section 10.3. Entire
Agreement; Amendment. The Transaction Documents set forth the entire
agreement and understanding of the parties with respect to the subject matter
hereof and supersedes all prior and contemporaneous agreements, negotiations and
understandings between the parties, both oral and written, with respect to such
matters. There are no promises, undertakings, representations or warranties by
either party relative to subject matter hereof not expressly set forth in the
Transaction Documents. No provision of this Agreement may be amended by the
parties from and after the date that is one Trading Day immediately preceding
the initial filing of the Registration Statement with the
Commission. Subject to the immediately preceding sentence, no provision of this
Agreement may be amended other than by a written instrument signed by both
parties hereto. The Disclosure Schedule and all exhibits to this Agreement are
hereby incorporated by reference in, and made a part of, this Agreement as if
set forth in full herein.

41




     Section 10.4.
Notices. Any notice, demand, request, waiver or other
communication required or permitted to be given hereunder shall be in writing
and shall be effective (a) upon hand delivery or facsimile (with facsimile
machine confirmation of delivery received) at the address or number designated
below (if delivered on a business day during normal business hours where such
notice is to be received), or the first business day following such delivery (if
delivered other than on a business day during normal business hours where such
notice is to be received) or (b) on the second business day following the date
of mailing by express courier service, fully prepaid, addressed to such address,
or upon actual receipt of such mailing, whichever shall first occur. The address
for such communications shall be:

	 	If to the Company:    	
	 	 	  
	 	 	American Petro-Hunter Inc. 
	 	 	250 N. Rock Road, Suite 365 
	 	 	Wichita, Kansas 67206 
	 	 	Telephone Number: (316) 201-1853 
	 	 	Attention: Robert B. McIntosh 
	 	 	  
	 	If to the Investor:    	
	 	 	  
	 	 	Hanover Holdings I, LLC, a New York 
	 	 	limited liability company 
	 	 	c/o Magna Group 
	 	 	5 Hanover Square 
	 	 	New York, NY 10004 
	 	 	Telephone Number: (347) 491-4240 
	 	 	Fax: (646) 737-9948 
	 	 	Attention: Marc Manuel 
	 	 	  
	 	With a copy (which
      shall not constitute notice) to: 
	 	 	  
	 	 	Greenberg Traurig, LLP 
	 	 	The MetLife Building 
	 	 	200 Park Avenue 
	 	 	New York, NY 10166 
	 	 	Telephone Number: (212) 801-9200 
	 	 	Fax: (212) 801-6400 
	 	 	Attention: Anthony J. Marsico



Either party hereto may from time to time change its address
for notices by giving at least 10 days advance written notice of such changed
address to the other party hereto.

42




     Section 10.5.
Waivers. No provision of this Agreement may be waived by the
parties from and after the date that is one Trading Day immediately preceding
the initial filing of the Registration Statement with the Commission. Subject to
the immediately preceding sentence, no provision of this Agreement may be waived
other than in a written instrument signed by the party against whom enforcement
of such waiver is sought. No failure or delay in the exercise of any power,
right or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power, right or privilege preclude other
or further exercises thereof or of any other right, power or privilege. 

     Section 10.6.
Headings. The article, section and subsection headings in this
Agreement are for convenience only and shall not constitute a part of this
Agreement for any other purpose and shall not be deemed to limit or affect any
of the provisions hereof. 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.

     Section 10.7.
Construction. The parties agree that each of them and their
respective counsel has reviewed and had an opportunity to revise the Transaction
Documents and, therefore, the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of the Transaction Documents. In addition, each and every
reference to share prices and shares of Common Stock in any Transaction Document
shall be subject to adjustment for any stock splits, stock combinations, stock
dividends, recapitalizations and other similar transactions that occur on or
after the date of this Agreement. Any reference in this Agreement to “Dollars”
or “$” shall mean the lawful currency of the United States of America.

     Section 10.8.
Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors and
assigns. The Company may not assign this Agreement or any rights or obligations
hereunder to any Person without the prior written consent of the Investor, which
may be withheld or delayed in the Investor’s sole discretion, including by any
Fundamental Transaction. The Investor may not assign its rights or obligations
under this Agreement.

     Section 10.9. No
Third Party Beneficiaries. Except as expressly provided in Article IX,
this Agreement is intended only 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.

     Section 10.10.
Governing Law. This Agreement shall be governed by and
construed in accordance with the internal procedural and substantive laws of the
State of New York, without giving effect to the choice of law provisions of such
state that would cause the application of the laws of any other
jurisdiction.

     Section 10.11.
Survival. The representations, warranties, covenants and
agreements of the Company and the Investor contained in this Agreement shall
survive the execution and delivery hereof until the termination of this Agreement;
provided, however, that (i) the provisions of Article V
(Representations and Warranties of the Company), Article VIII (Termination),
Article IX (Indemnification) and this Article X (Miscellaneous) shall remain in
full force and effect indefinitely notwithstanding such termination, and, (ii)
so long as the Investor owns any Securities, the covenants and agreements of the
Company contained in Article VI (Additional Covenants), shall remain in full
force and effect notwithstanding such termination for a period of six months
following such termination.

43




     Section 10.12.
Counterparts. This Agreement may be executed in counterparts,
all of which taken together shall constitute one and the same original and
binding instrument and shall become effective when all counterparts have been
signed by each party and delivered to the other parties hereto, it being
understood that all parties hereto need not sign the same counterpart. In the
event any signature is delivered by facsimile, digital or electronic
transmission, such transmission shall constitute delivery of the manually
executed original and the party using such means of delivery shall thereafter
cause four additional executed signature pages to be physically delivered to the
other parties within five days of the execution and delivery hereof. Failure to
provide or delay in the delivery of such additional executed signature pages
shall not adversely affect the efficacy of the original delivery.

     Section 10.13.
Publicity. The Investor shall have the right to approve, prior
to issuance or filing, any press release, Commission filing or any other public
disclosure made by or on behalf of the Company relating to the Investor, its
purchases hereunder or any aspect of the Transaction Documents or the
transactions contemplated thereby; provided, however, that except
as otherwise provided in this Agreement, the Company shall be entitled, without
the prior approval of the Investor, to make any press release or other public
disclosure (including any filings with the Commission) with respect thereto as
is required by applicable law and regulations (including the regulations of the
Trading Market), so long as prior to making any such press release or other
public disclosure, if reasonably practicable, the Company and its counsel shall
have provided the Investor and its counsel with a reasonable opportunity to
review and comment upon, and shall have consulted with the Investor and its
counsel on the form and substance of, such press release or other disclosure.
For the avoidance of doubt, the Company shall not be required to submit for
review any such disclosure (i) contained in periodic reports filed with the
Commission under the Exchange Act if it shall have previously provided the same
disclosure for review in connection with a previous filing or (ii) any
Prospectus Supplement if it contains disclosure that does not reference the
Investor, its purchases hereunder or any aspect of the Transaction Documents or
the transactions contemplated thereby.

     Section 10.14.
Severability. The provisions of this Agreement are severable
and, in the event that any court of competent jurisdiction shall determine that
any one or more of the provisions or part of the provisions contained in this
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provision or part of a provision of this Agreement, and this Agreement
shall be reformed and construed as if such invalid or illegal or unenforceable
provision, or part of such provision, had never been contained herein, so that
such provisions would be valid, legal and enforceable to the maximum extent
possible.

44




     Section 10.15.
Further Assurances. From and after the Closing Date, upon the
request of the Investor or the Company, each of the Company and the Investor
shall execute and deliver such instrument, documents and other writings as may
be reasonably necessary or desirable to confirm and carry out and to effectuate
fully the intent and purposes of this Agreement.

[Signature Page Follows]

45




     IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed by their
respective authorized officer as of the date first above written.

	 	AMERICAN PETRO-HUNTER 
	 	INC.: 
	 	  
	 	  
	 	By:/s/ Robert McIntosh 
	 	Name: Robert McIntosh 
	 	Title: President and CEO 
	 	  
	 	HANOVER HOLDINGS I, LLC, a 
	 	New York limited liability company:
  
	 	  
	 	  
	 	By:/s/ Joshua Sason 
	 	Name: Joshua Sason 
	 	Title: CEO 


46




ANNEX I TO THE
COMMON STOCK PURCHASE AGREEMENT

DEFINITIONS

     “Acceptable
Transaction” shall have the meaning assigned to such term in Section
6.7(iii) hereof.

     “Affiliate” means
any Person that, directly or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with a Person, as such
terms are used in and construed under Rule 144. With respect to the Investor,
without limitation, any Person owning, owned by, or under common ownership with
the Investor, and any investment fund or managed account that is managed on a
discretionary basis by the same investment manager as the Investor will be
deemed to be an Affiliate.

     “Aggregate Limit”
shall have the meaning assigned to such term in Section 2.1 hereof.

     “Agreement” shall
have the meaning assigned to such term in the preamble hereof.

     “Alternate
Transaction” shall have the meaning assigned to such term in Section
6.7(iii) hereof.

     “Alternate Transaction
Notice” shall have the meaning assigned to such term in Section 6.7(ii)
hereof.

     “Announcement Date”
shall have the meaning assigned to such term in Section 3.8 hereof.

     “ATM” shall have
the meaning assigned to such term in Section 6.7(iii) hereof.

     “Average Trading
Volume” means the average trading volume of the Common Stock on the
Trading Market for the 10 Trading Days immediately prior to the applicable Draw
Down Exercise Date.

     “Below Market
Offering” shall have the meaning assigned to such term in Section
6.7(iii) hereof.

     “Blackout Period”
shall have the meaning assigned to such term in Section 3.8 hereof.
“Broker-Dealer” shall have the meaning assigned to such term in
Section 6.17 hereof. “Bylaws” shall have the meaning assigned to
such term in Section 5.3 hereof.

     “Charter” shall
have the meaning assigned to such term in Section 5.3 hereof.
“Closing” shall have the meaning assigned to such term in Section
2.2 hereof. “Closing Date” means the date of this Agreement.

i




     “Code” means the
Internal Revenue Code of 1986, as amended.

     “Commission” means
the U.S. Securities and Exchange Commission or any successor entity.

     “Commission
Documents” shall mean (1) all reports, schedules, registrations, forms,
statements, information and other documents filed with or furnished to the
Commission by the Company pursuant to the reporting requirements of the Exchange
Act, including all material filed or furnished pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act, since December 31, 2011, including, without
limitation, the Annual Report on Form 10-K filed by the Company for its fiscal
year ended December 31, 2011 (the “2011 Form 10-K”), and which
hereafter shall be filed with or furnished to the Commission by the Company,
including, without limitation, the Current Report, (2) the Registration
Statement, as the same may be amended from time to time, the Prospectus and each
Prospectus Supplement and (3) all information contained in such filings and all
documents and disclosures that have been and heretofore shall be incorporated by
reference therein.

     “Commitment Shares”
means 1,764,706 shares of duly authorized, validly issued, fully paid
and nonassessable shares of Common Stock which, prior to the date of this
Agreement, the Company has caused its transfer agent to issue and deliver to the
Investor.

     “Common Stock”
shall have the meaning assigned to such term in the recitals hereof.

     “Company” shall
have the meaning assigned to such term in the preamble hereof.

     “Current Market
Price” means, with respect to any particular measurement date, the
closing price of a share of Common Stock as reported on the Trading Market for
the Trading Day immediately preceding such measurement date.

     “Current Report”
shall have the meaning assigned to such term in Section 2.3 hereof.

     “Damages” shall
have the meaning assigned to such term in Section 9.1 hereof.

     “Disclosure
Schedule” shall have the meaning assigned to such term in the preamble
to Article V hereof.

     “Discount Price”
means a price equal to 90% of the arithmetic average of the three lowest VWAPs
that equal or exceed the applicable Floor Price during the applicable Pricing
Period; provided, however, that if the VWAP does not equal or
exceed the applicable Floor Price for at least three Trading Days during the
applicable Pricing Period, then the “Discount Price” shall mean a
price equal to 90% of the arithmetic average of all of the VWAPs that equal or
exceed the applicable Floor Price (if any) during such Pricing Period.

     “Document Preparation
Fee” shall have the meaning assigned to such term in Section 10.1
hereof.

ii




     “Draw Down” means
the transactions contemplated in Article III of this Agreement with respect to
any Draw Down Notice delivered by the Company in accordance with Article III of
this Agreement.

     “Draw Down Amount”
means the actual amount of proceeds received by the Company pursuant to a Draw
Down under this Agreement.

     “Draw Down Amount
Requested” shall mean the specific numbers of shares of Common Stock
requested by the Company in a Draw Down Notice delivered pursuant to Section
3.1, up to the Maximum Draw Down Amount Requested.

     “Draw Down Exercise
Date” shall have the meaning assigned to such term in Section 3.1
hereof.

     “Draw Down Notice”
shall have the meaning assigned to such term in Section 3.1 hereof.

     “DTC” means The
Depository Trust Company, or any successor thereto.

     “Earnings
Announcement” shall have the meaning assigned to such term in Section
3.8 hereof.

     “Earnings 8-K”
shall have the meaning assigned to such term in Section 3.8 hereof.

     “EDGAR” means the
Commission’s Electronic Data Gathering, Analysis and Retrieval System.

     “Effective Date”
means the first Trading Day immediately following the date on which the initial
Registration Statement filed pursuant to Section 2(a) of the Registration Rights
Agreement is declared effective by the Commission.

     “Environmental
Laws” shall have the meaning assigned to such term in Section 5.18
hereof.

     “ERISA” shall mean
the Employee Retirement Income Security Act of 1974, as amended.

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

     “FCPA” shall have
the meaning assigned to such term in Section 5.36 hereof.

     “FDA” shall have
the meaning assigned to such term in Section 5.17 hereof.

     “Filing Time” shall
have the meaning assigned to such term in Section 3.8 hereof.

     “FINRA” means the
Financial Industry Regulatory Authority.

iii




     “Floor Price” is
the lowest price at which the Company may sell Shares during the applicable
Pricing Period as set forth in the applicable Draw Down Notice (not taking into
account the applicable Discount Price).

     “Fundamental
Transaction” means that (i) the Company shall, directly or indirectly,
in one or more related transactions, (1) consolidate or merge with or into
(whether or not the Company is the surviving corporation) another Person, with
the result that the holders of the Company’s capital stock immediately prior to
such consolidation or merger together beneficially own less than 50% of the
outstanding voting power of the surviving or resulting corporation, or (2) sell,
lease, license, assign, transfer, convey or otherwise dispose of all or
substantially all of the properties or assets of the Company to another Person,
or (3) take action to facilitate a purchase, tender or exchange offer by another
Person that is accepted by the holders of more than 50% of the outstanding
shares of Common Stock (not including any shares of Common Stock held by the
Person or Persons making or party to, or associated or affiliated with the
Persons making or party to, such purchase, tender or exchange offer), or (4)
consummate a stock or share purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off or
scheme of arrangement) with another Person whereby such other Person acquires
more than 50% of the outstanding shares of Common Stock (not including any
shares of Common Stock held by the other Person or other Persons making or party
to, or associated or affiliated with the other Persons making or party to, such
stock or share purchase agreement or other business combination), or (5)
reorganize, recapitalize or reclassify its Common Stock, or (ii) any “person” or
“group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the
Exchange Act) is or shall become the “beneficial owner” (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of 50% of the aggregate
ordinary voting power represented by issued and outstanding Common Stock.

     “GAAP” shall mean
generally accepted accounting principles in the United States of America as
applied by the Company.

     “Governmental
Licenses” shall have the meaning assigned to such term in Section 5.17
hereof.

     “Indebtedness”
shall have the meaning assigned to such term in Section 5.11 hereof.

     “Intellectual
Property” shall have the meaning assigned to such term in Section
5.17(b) hereof.

     “Investment Period”
means the period commencing on the Effective Date and expiring on the date this
Agreement is terminated pursuant to Article VIII hereof.

     “Investor” shall
have the meaning assigned to such term in the preamble hereof.

     “Investor Party”
shall have the meaning assigned to such term in Section 9.1 hereof.

     “Knowledge” means
the actual knowledge of the Company’s Chief Executive Officer or Chief Financial
Officer, after reasonable inquiry of all officers, directors and employees of
the 

iv




Company who could reasonably be expected to have knowledge or
information with respect to the matter in question.

     “Make Whole Amount”
shall have the meaning assigned to such term in Section 3.6 hereof.

     “Material Adverse
Effect” means (i) any condition, occurrence, state of facts or event
having, or insofar as reasonably can be foreseen would likely have, any material
adverse effect on the legality, validity or enforceability of the Transaction
Documents or the transactions contemplated thereby, (ii) any condition,
occurrence, state of facts or event having, or insofar as reasonably can be
foreseen would likely have, any effect on the business, operations, properties
or financial condition of the Company that is material and adverse to the
Company and its Subsidiaries, taken as a whole, and/or (iii) any condition,
occurrence, state of facts or event that would, or insofar as reasonably can be
foreseen would likely, prohibit or otherwise materially interfere with or delay
the ability of the Company to perform any of its obligations under any of the
Transaction Documents to which it is a party; provided, however,
that none of the following, individually or in the aggregate, shall be taken
into account in determining whether a Material Adverse Effect has occurred or
insofar as reasonably can be foreseen would likely occur: (a) changes in
conditions in the U.S. or global capital, credit or financial markets generally,
including changes in the availability of capital or currency exchange rates,
provided such changes shall not have affected the Company in a materially
disproportionate manner as compared to other similarly situated companies; (b)
changes generally affecting the oil and natural gas exploration and production
industries, provided such changes shall not have affected the Company in a
materially disproportionate manner as compared to other similarly situated
companies; (c) any effect of the announcement of, or the consummation of the
transactions contemplated by, this Agreement and the other Transaction Documents
on the Company’s relationships, contractual or otherwise, with customers,
suppliers, vendors, bank lenders, strategic venture partners or employees; and
(d) the receipt of any notice that the Common Stock may be ineligible to
continue listing or quotation on the Trading Market, other than a final and
non-appealable notice that the listing or quotation of the Common Stock on the
Trading Market shall be terminated on a date certain (unless, prior to such date
certain, the Common Stock is listed or quoted on any other Trading Market).

     “Material
Agreements” shall have the meaning assigned to such term in Section 5.19
hereof.

     “Maximum Draw Down Amount
Requested” means the product of (i) the Average Trading Volume and (ii)
3.0.

     “Money Laundering
Laws” shall have the meaning assigned to such term in Section 5.37
hereof.

     “OFAC” shall have
the meaning assigned to such term in Section 5.38 hereof.

     “Ownership
Limitation” shall have the meaning assigned to such term in Section 3.7
hereof.

v




     “Person” means any
person or entity, whether a natural person, trustee, corporation, partnership,
limited partnership, limited liability company, trust, unincorporated
organization, business association, firm, joint venture, governmental agency or
authority.

     “Plan” shall have
the meaning assigned to such term in Section 5.24 hereof.

     “Press Release”
shall have the meaning assigned to such term in Section 2.3 hereof.

     “Price Reset
Provision” shall have the meaning assigned to such term in Section
6.7(iii) hereof.

     “Pricing Period”
shall mean, with respect to each Draw Down, a period of 10 consecutive Trading
Days commencing on the Pricing Period start date set forth in the Draw Down
Notice in accordance with Section 3.1 hereof.

     “Prospectus” means
the prospectus in the form included in the Registration Statement, as
supplemented from time to time by any Prospectus Supplement, including the
documents incorporated by reference therein.

     “Prospectus
Supplement” means any prospectus supplement to the Prospectus filed with
the Commission from time to time pursuant to Rule 424(b) under the Securities
Act, including the documents incorporated by reference therein.

     “Reference Period”
shall have the meaning assigned to such term in Section 6.7(ii) hereof.

     “Registrable
Securities” shall have the meaning assigned to such term in the
Registration Rights Agreement.

     “Registration Rights
Agreement” shall have the meaning assigned to such term in the recitals
hereof.

     “Registration
Statement” shall have the meaning assigned to such term in the
Registration Rights Agreement.

     “Regulation D”
shall have the meaning assigned to such term in the recitals hereof.

     “Required Delivery
Date” shall have the meaning assigned to such term in Section 10.1(iv)
hereto.

     “Restricted Period”
shall have the meaning assigned to such term in Section 6.13(i) hereof.

     “Restricted Person”
shall have the meaning assigned to such term in Section 6.13(i) hereof.

     “Restricted
Persons” shall have the meaning assigned to such term in Section 6.13(i)
hereof.

vi




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

     “Section 4(a)(2)”
shall have the meaning assigned to such term in the recitals hereof.

     “Securities”
means, collectively, the Shares and the Commitment Shares.

     “Securities Act”
shall mean the Securities Act of 1933, as amended, and the rules and regulations
of the Commission thereunder.

     “Settlement Date”
shall have the meaning assigned to such term in Section 3.5 hereof.

     “Shares” shall mean
the whole shares of Common Stock that are and/or may be purchased by the
Investor under this Agreement pursuant to one or more Draw Downs, and not the
Commitment Shares.

     “Short Sales” shall
mean “short sales” as defined in Rule 200 promulgated under Regulation SHO under
the Exchange Act.

     “Significant
Subsidiary” means any Subsidiary of the Company that would constitute a
Significant Subsidiary of the Company within the meaning of Rule 1-02 of
Regulation S-X of the Commission.

     “Similar Financing”
shall have the meaning assigned to such term in Section 6.7(iii) hereof.

     “SOXA” shall mean
the Sarbanes-Oxley Act of 2002 and the rules and regulations of the Commission
thereunder.

     “Subsidiary” shall
mean any corporation or other entity of which at least a majority of the
securities or other ownership interest having ordinary voting power for the
election of directors or other persons performing similar functions are at the
time owned directly or indirectly by the Company and/or any of its other
Subsidiaries.

     “Total Commitment”
shall have the meaning assigned to such term in Section 2.1 hereof.

     “Trading Day” shall
mean a full trading day (beginning at 9:30 a.m., New York City time, and ending
at 4:00 p.m., New York City time) on the Trading Market.

     “Trading Market”
means the OTC Bulletin Board; provided, however, that in the event
the Common Stock is ever listed or quoted on the NASDAQ Global Market, the
NASDAQ Global Select Market, the NASDAQ Capital Market, the New York Stock
Exchange, NYSE Arca, the NYSE MKT, or the OTCQX or the OTCQB operated by OTC
Markets Group Inc., than the “Trading Market” shall mean such
other market or exchange or any successor to the foregoing on which the Common
Stock is then listed or quoted.

vii




     “Transaction
Documents” means, collectively, this Agreement (as qualified by the
Disclosure Schedule) and the exhibits hereto, the Registration Rights Agreement
and each of the other agreements, documents, certificates and instruments
entered into or furnished by the parties hereto in connection with the
transactions contemplated hereby and thereby.

     “VWAP” means the
volume weighted average price (the aggregate sales price of all trades of Common
Stock during a Trading Day divided by the total number of shares of Common Stock
traded during such Trading Day) of the Common Stock during a Trading Day as
reported by Bloomberg L.P. using the AQR function.

     “Warrant Value”
shall mean the fair value of all warrants, options and other similar rights
issued to a third party in connection with an Alternate Transaction, determined
by using a standard Black-Scholes option-pricing model using a reasonable and
appropriate expected volatility percentage based on applicable volatility data
from an investment banking firm of nationally recognized reputation.

viii




EXHIBIT A TO THE
COMMON STOCK PURCHASE AGREEMENT

FORM OF REGISTRATION RIGHTS AGREEMENT




REGISTRATION RIGHTS AGREEMENT

     This REGISTRATION RIGHTS
AGREEMENT (this “Agreement”), dated as of March 22, 2013, is
by and between American Petro-Hunter Inc., a Nevada corporation (the
“Company”), and Hanover Holdings I, LLC, a New York limited
liability company (the “Investor”).

RECITALS

     A. The Company and the Investor
have entered into that certain Common Stock Purchase Agreement, dated as of the
date hereof (the “Purchase Agreement”), pursuant to which the
Company may issue, from time to time, to the Investor up to $5,000,000 of newly
issued shares of the Company’s common stock, $0.001 par value (“Common
Stock”), as provided for therein.

     B. Pursuant to the terms of, and
in consideration for the Investor entering into, the Purchase Agreement, the
Company has issued to the Investor the Commitment Shares (as defined in the
Purchase Agreement) in accordance with the terms of the Purchase Agreement.

     C. Pursuant to the terms of, and
in consideration for the Investor entering into, the Purchase Agreement, and to
induce the Investor to execute and deliver the Purchase Agreement, the Company
has agreed to provide the Investor with certain registration rights with respect
to the Registrable Securities (as defined herein) as set forth herein.

AGREEMENT

     NOW, THEREFORE, in
consideration of the premises, the representations, warranties, covenants and
agreements contained herein and in the Purchase Agreement, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, intending to be legally bound hereby, the Company and the Investor
hereby agree as follows:

1. Definitions.

     Capitalized terms used herein and
not otherwise defined herein shall have the respective meanings set forth in the
Purchase Agreement. As used in this Agreement, the following terms shall have
the following meanings:

     (a) “Business Day”
means any day other than Saturday, Sunday or any other day on which commercial
banks in New York, New York are authorized or required by law to remain
closed.

     (b) “Closing Date”
shall mean the date of this Agreement.

     (c) “Effective
Date” means the date that the applicable Registration Statement has been
declared effective by the SEC.

     (d) “Effectiveness
Deadline” means (i) with respect to the initial Registration Statement
required to be filed to pursuant to Section 2(a), the earlier of (A) the
90th calendar day after the Closing Date and (B) the fifth Business Day after the
date the Company is notified (orally or in writing, whichever is earlier) by the
SEC that such Registration Statement will not be reviewed or will not be subject
to further review and (ii) with respect to any additional Registration
Statements that may be required to be filed by the Company pursuant to this
Agreement, the earlier of (A) the 90th calendar day following the
date on which the Company was required to file such additional Registration
Statement and (B) the fifth Business Day after the date the Company is notified
(orally or in writing, whichever is earlier) by the SEC that such Registration
Statement will not be reviewed or will not be subject to further review.

A-1




     (e) “Filing
Deadline” means (i) with respect to the initial Registration Statement
required to be filed to pursuant to Section 2(a), April 22, 2013 and (ii) with
respect to any additional Registration Statements that may be required to be
filed by the Company pursuant to this Agreement, the later of (A) the 60th
calendar day following the sale of substantially all of the Registrable
Securities included in the initial Registration Statement or the most recent
prior additional Registration Statement, as applicable, and (B) six months
following the Effective Date of the initial Registration Statement or the most
recent prior additional Registration Statement, as applicable, or such earlier
date as permitted by the SEC.

     (f) “Person” means
any person or entity, whether a natural person, trustee, corporation,
partnership, limited partnership, limited liability company, trust,
unincorporated organization, business association, firm, joint venture,
governmental agency or authority.

     (g) “register,”
“registered,” and “registration” refer to a
registration effected by preparing and filing one or more Registration
Statements in compliance with the Securities Act and pursuant to Rule 415 and
the declaration of effectiveness of such Registration Statement(s) by the
SEC.

     (h) “Registrable
Securities” means (i) all of the Shares, (ii) all of the Commitment
Shares, and (iii) any capital stock of the Company issued or issuable with
respect to such Shares or Commitment Shares, including, without limitation, (1)
as a result of any stock split, stock dividend, recapitalization, exchange or
similar event or otherwise and (2) shares of capital stock of the Company into
which the shares of Common Stock are converted or exchanged and shares of
capital stock of a successor entity into which the shares of Common Stock are
converted or exchanged.

     (i) “Registration
Statement” means a registration statement or registration statements of
the Company filed under the Securities Act covering the resale by the Investor
of Registrable Securities, as such registration statement or registration
statements may be amended and supplemented from time to time (including pursuant
to Rule 462(b) under the Securities Act), including all documents filed as part
thereof or incorporated by reference therein.

     (j) “Rule 144”
means Rule 144 promulgated by the SEC under the Securities Act, as such rule may
be amended from time to time, or any other similar or successor rule or
regulation of the SEC that may at any time permit the Investor to sell
securities of the Company to the public without registration.

A-2




     (k) “Rule 415”
means Rule 415 promulgated by the SEC under the Securities Act, as such rule may
be amended from time to time, or any other similar or successor rule or
regulation of the SEC providing for offering securities on a delayed or
continuous basis.

     (l) “SEC” means the
U.S. Securities and Exchange Commission or any successor entity.

2. Registration.

     (a) Mandatory
Registration. The Company shall prepare and, as soon as practicable, but in
no event later than the Filing Deadline, file with the SEC an initial
Registration Statement on Form S-1, or such other form reasonably acceptable to
the Investor and Legal Counsel, covering the resale by the Investor of
Registrable Securities in an amount equal to 16,182,230 shares of Common Stock,
which shall include 1,764,706 Commitment Shares. Such initial Registration
Statement shall contain (except if otherwise directed by the Investor) the
“Selling Stockholder” and “Plan of Distribution” sections
in substantially the form attached hereto as Exhibit B. The Company shall
use its commercially reasonable efforts to have such initial Registration
Statement, and each other Registration Statement required to be filed pursuant
to the terms hereof, declared effective by the SEC as soon as practicable, but
in no event later than the applicable Effectiveness Deadline.

     (b) Legal Counsel. Subject
to Section 5 hereof, the Investor shall have the right to select one legal
counsel to review and oversee, solely on its behalf, any registration pursuant
to this Section 2 (“Legal Counsel”), which shall be Greenberg
Traurig, LLP or such other counsel as thereafter designated by the Investor.
Except as provided under Section 10.1(i) of the Purchase Agreement, the Company
shall have no obligation to reimburse the Investor for any and all legal fees
and expenses of the Legal Counsel incurred in connection with the transactions
contemplated hereby.

     (c) Reserved. 

     (d) Sufficient Number of
Shares Registered. If at any time all Registrable Securities are not covered
by the initial Registration Statement filed pursuant to Section 2(a) as a result
of Section 2(h) or otherwise, the Company shall file with the SEC one or more
additional Registration Statements (on the short form available therefor, if
applicable), so as to cover all of the Registrable Securities not covered by
such initial Registration Statement, in each case, as soon as practicable
(taking into account any Staff position with respect to date on which the Staff
will permit such additional Registration Statement(s) to be filed with the SEC),
but in no event later than the applicable Filing Deadline for such additional
Registration Statement(s). The Company shall use its commercially reasonable
efforts to cause such additional Registration Statement(s) to become effective
as soon as practicable following the filing thereof with the SEC, but in no
event later than the applicable Effectiveness Deadline for such Registration
Statement.

     (e) Piggyback
Registrations. Without limiting any of the Company’s obligations hereunder
or under the Purchase Agreement, if there is not an effective Registration
Statement covering all of the Registrable Securities and the Company shall
determine to prepare and file with the SEC a registration statement relating to an offering
for its own account or the account of others under the Securities Act of any of
its equity securities (other than on Form S-4 or Form S-8 (each as promulgated
under the Securities Act) or their then equivalents relating to equity
securities to be issued solely in connection with any acquisition of any entity
or business or equity securities issuable in connection with the Company’s stock
option or other employee benefit plans), then the Company shall deliver to the
Investor a written notice of such determination and, if within five (5) days
after the date of the delivery of such notice, the Investor shall so request in
writing, the Company shall include in such registration statement all or any
part of such Registrable Securities the offer and sale of which the Investor
requests to be registered; provided, however, the Company shall
not be required to register the offer and sale of any Registrable Securities
pursuant to this Section 2(e) that are eligible for resale pursuant to Rule 144
without restriction (including, without limitation, volume restrictions) and
without the need for current public information required by Rule 144(c)(1) (or
Rule 144(i)(2), if applicable) or that are the subject of a then-effective
Registration Statement.

A-3




     (f) No Inclusion of Other
Securities. In no event shall the Company include any securities other than
Registrable Securities on any Registration Statement pursuant to Section 2(a) or
2(d) without the prior written consent of the Investor. Subject to the proviso
in Section 2(e), in connection with any offering involving an underwriting of
shares, the Company shall not be required under this Section 2 or otherwise to
include the Registrable Securities of any Investor therein unless such Investor
accepts and agrees to the terms of the underwriting, which shall be reasonable
and customary, as agreed upon between the Company and the underwriters selected
by the Company.

     (g) Offering. If the staff
of the SEC (the “Staff”) or the SEC seeks to characterize any
offering pursuant to a Registration Statement filed pursuant to this Agreement
as constituting an offering of securities that does not permit such Registration
Statement to become effective and be used for resales by the Investor on a
delayed or continuous basis under Rule 415 at then-prevailing market prices (and
not fixed prices) (or as otherwise may be acceptable to the Investor), or if
after the filing of the initial Registration Statement with the SEC pursuant to
Section 2(a), the Company is otherwise required by the Staff or the SEC to
reduce the number of Registrable Securities included in such initial
Registration Statement, then the Company shall reduce the number of Registrable
Securities to be included in such initial Registration Statement (with the prior
consent of the Investor and Legal Counsel as to the specific Registrable
Securities to be removed therefrom) until such time as the Staff and the SEC
shall so permit such Registration Statement to become effective and be used as
aforesaid. Notwithstanding anything in this Agreement to the contrary, if after
giving effect to the actions referred to in the immediately preceding sentence,
the Staff or the SEC does not permit such Registration Statement to become
effective and be used for resales by the Investor on a delayed or continuous
basis under Rule 415 at then-prevailing market prices (and not fixed prices) (or
as otherwise may be acceptable to the Investor), the Company shall not request
acceleration of the Effective Date of such Registration Statement, the Company
shall promptly (but in no event later than 48 hours) request the withdrawal of
such Registration Statement pursuant to Rule 477 under the Securities Act, and
the Effectiveness Deadline shall automatically be deemed to have elapsed with
respect to such Registration Statement at such time as the Staff or the SEC has
made a final and non-appealable determination that the SEC will not permit such
Registration Statement to be so utilized (unless prior to such time the Company
and the Investor have received assurances from the Staff or the SEC reasonably acceptable to Legal Counsel
that a new Registration Statement filed by the Company with the SEC promptly
thereafter may be so utilized). In the event of any reduction in Registrable
Securities pursuant to this paragraph, the Company shall file additional
Registration Statements in accordance with Section 2(d) until such time as all
Registrable Securities have been included in Registration Statements that have
been declared effective and the prospectus contained therein is available for
use by the Investor.

A-4




3. Related Obligations.

     The Company shall use its
commercially reasonable efforts to effect the registration of the Registrable
Securities in accordance with the intended method of disposition thereof, and,
pursuant thereto, the Company shall have the following obligations:

     (a) The Company shall promptly
prepare and file with the SEC a Registration Statement with respect to the
Registrable Securities (but in no event later than the applicable Filing
Deadline) and use its commercially reasonable efforts to cause such Registration
Statement to become effective as soon as practicable after such filing (but in
no event later than the applicable Effectiveness Deadline). Subject to Allowable
Grace Periods, the Company shall keep each Registration Statement effective (and
the prospectus contained therein available for use) pursuant to Rule 415 for
resales by the Investor on a delayed or continuous basis at then-prevailing
market prices (and not fixed prices) at all times until the earlier of (i) the
date as of which the Investor may sell all of the Registrable Securities
required to be covered by such Registration Statement (disregarding any
reduction pursuant to Section 2(g)) without restriction pursuant to Rule 144 and
without the need for current public information as required by Rule 144(c)(1)
(or Rule 144(i)(2), if applicable) and (ii) the date on which the Investor shall
have sold all of the Registrable Securities covered by such Registration
Statement (the “Registration Period”). Notwithstanding anything to
the contrary contained in this Agreement (but subject to the provisions of
Section 3(q) hereof), the Company shall ensure that, when filed and at all times
while effective, each Registration Statement (including, without limitation, all
amendments and supplements thereto) and the prospectus (including, without
limitation, all amendments and supplements thereto) used in connection with such
Registration Statement shall not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein, or necessary to
make the statements therein (in the case of prospectuses, in the light of the
circumstances in which they were made) not misleading. The Company shall submit
to the SEC, within two (2) Business Days after the later of the date that (i)
the Company learns that no review of a particular Registration Statement will be
made by the Staff or that the Staff has no further comments on a particular
Registration Statement (as the case may be) and (ii) the approval of Legal
Counsel is obtained pursuant to Section 3(c) (which approval shall be promptly
sought), a request for acceleration of effectiveness of such Registration
Statement to a time and date not later than forty-eight (48) hours after the
submission of such request.

A-5




     (b) Subject to Section 3(q) of
this Agreement, the Company shall prepare and file with the SEC such amendments
(including, without limitation, post-effective amendments) and supplements to
each Registration Statement and the prospectus used in connection with each such
Registration Statement, which prospectus is to be filed pursuant to Rule 424
promulgated under the Securities Act, as may be necessary to keep each such
Registration Statement effective (and the prospectus contained therein current
and available for use) at all times during the Registration Period for such Registration Statement, and,
during such period, comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Securities of the Company required
to be covered by such Registration Statement until such time as all of such
Registrable Securities shall have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof as set forth in
such Registration Statement. Without limiting the generality of the foregoing,
the Company covenants and agrees that (i) at or before 8:30 a.m. (New York City
time) on the Trading Day immediately following each Effective Date, the Company
shall file with the SEC in accordance with Rule 424(b) under the Securities Act
the final prospectus to be used in connection with sales pursuant to the
applicable Registration Statement, and (ii) if the transactions contemplated by
any Draw Down (as defined in the Purchase Agreement) are material to the Company
(individually or collectively with all other prior Draw Downs, the consummation
of which have not previously been reported in any prospectus supplement filed
with the SEC under Rule 424(b) under the Securities Act or in any periodic
report filed by the Company with the SEC under the Securities Exchange Act of
1934, as amended (the “Exchange Act”)), or if otherwise required
under the Securities Act, in each case as reasonably determined by the Company
or the Investor, then, on the first Trading Day immediately following the last
Trading Day of the Pricing Period with respect to such Draw Down, the Company
shall file with the SEC a prospectus supplement pursuant to Rule 424(b) under
the Securities Act with respect to the applicable Draw Down(s), disclosing the
total Draw Down Amount Requested pursuant to such Draw Down(s), the total number
of Shares that have been (or are to be) issued and sold to the Investor pursuant
to such Draw Down(s), the total purchase price for the Shares subject to such
Draw Down(s), the applicable Discount Price(s) for such Shares and the net
proceeds that have been (or are to be) received by the Company from the sale of
such Shares. To the extent not previously disclosed in the prospectus or a
prospectus supplement, the Company shall disclose in its Quarterly Reports on
Form 10-Q and in its Annual Reports on Form 10-K the information described in
the immediately preceding sentence relating to any Draw Down(s) consummated
during the relevant fiscal quarter. In the case of amendments and supplements to
any Registration Statement or prospectus which are required to be filed pursuant
to this Agreement (including, without limitation, pursuant to this Section 3(b))
by reason of the Company filing a report on Form 8-K, Form 10-Q or Form 10-K or
any analogous report under the Exchange Act, the Company shall have incorporated
such report by reference into such Registration Statement and prospectus, if
applicable, or shall file such amendments or supplements to the Registration
Statement or prospectus with the SEC on the same day on which the Exchange Act
report is filed which created the requirement for the Company to amend or
supplement such Registration Statement or prospectus, for the purpose of
including or incorporating such report into such Registration Statement and
prospectus. The Company consents to the use of the prospectus (including,
without limitation, any supplement thereto) included in each Registration
Statement in accordance with the provisions of the Securities Act and with the
securities or “Blue Sky” laws of the jurisdictions in which the Registrable
Securities may be sold by the Investor, in connection with the resale of the
Registrable Securities and for such period of time thereafter as such prospectus
(including, without limitation, any supplement thereto) (or in lieu thereof, the
notice referred to in Rule 173(a) under the Securities Act) is required by the
Securities Act to be delivered in connection with resales of Registrable
Securities.

A-6




     (c) The Company shall (A) permit
Legal Counsel to review and comment upon (i) each Registration Statement at
least five (5) Business Days prior to its filing with the SEC (or such shorter period as may be agreed to by the Investor and
Legal Counsel) and (ii) all amendments and supplements to each Registration
Statement (including, without limitation, the prospectus contained therein)
(except for Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current
Reports on Form 8-K, and any similar or successor reports or prospectus
supplements the contents of which is limited to that set forth in such reports)
within a reasonable number of days prior to their filing with the SEC, and (B)
not file any Registration Statement or amendment or supplement thereto or to any
prospectus contained therein in a form to which Legal Counsel reasonably
objects. The Company shall not submit a request for acceleration of the
effectiveness of a Registration Statement or any amendment or supplement thereto
without the prior consent of Legal Counsel, which consent shall not be
unreasonably withheld. The Company shall promptly furnish to Legal Counsel,
without charge, (i) electronic copies of any correspondence from the SEC or the
Staff to the Company or its representatives relating to each Registration
Statement (which correspondence shall be redacted to exclude any material,
non-public information regarding the Company or any of its Subsidiaries), (ii)
after the same is prepared and filed with the SEC, one (1) electronic copy of
each Registration Statement and any amendment(s) and supplement(s) thereto,
including, without limitation, financial statements and schedules, all documents
incorporated therein by reference, if requested by the Investor, and all
exhibits and (iii) upon the effectiveness of each Registration Statement, one
(1) electronic copy of the prospectus included in such Registration Statement
and all amendments and supplements thereto. The Company shall reasonably
cooperate with Legal Counsel in performing the Company’s obligations pursuant to
this Section 3.

     (d) Without limiting any
obligation of the Company under the Purchase Agreement, the Company shall
promptly furnish to the Investor, without charge, (i) after the same is prepared
and filed with the SEC, at least one (1) electronic copy of each Registration
Statement and any amendment(s) and supplement(s) thereto, including, without
limitation, financial statements and schedules, all documents incorporated
therein by reference, if requested by the Investor, all exhibits and each
preliminary prospectus, (ii) upon the effectiveness of each Registration
Statement, one (1) electronic copy of the prospectus included in such
Registration Statement and all amendments and supplements thereto (or such other
number of copies as the Investor may reasonably request from time to time) and
(iii) such other documents, including, without limitation, copies of any
preliminary or final prospectus, as the Investor may reasonably request from
time to time in order to facilitate the disposition of the Registrable
Securities owned by the Investor.

     (e) The Company shall take such
action as is necessary to (i) register and qualify, unless an exemption from
registration and qualification applies, the resale by the Investor of the
Registrable Securities covered by a Registration Statement under such other
securities or “Blue Sky” laws of all applicable jurisdictions in the United
States, (ii) prepare and file in those jurisdictions, such amendments
(including, without limitation, post-effective amendments) and supplements to
such registrations and qualifications as may be necessary to maintain the
effectiveness thereof during the Registration Period, (iii) take such other
actions as may be necessary to maintain such registrations and qualifications in
effect at all times during the Registration Period, and (iv) take all other
actions reasonably necessary or advisable to qualify the Registrable Securities
for sale in such jurisdictions; provided, however, the Company
shall not be required in connection therewith or as a condition thereto to (x)
qualify to do business in any jurisdiction where it would not otherwise be
required to qualify but for this Section 3(e), (y) subject itself to general taxation in any such jurisdiction, or
(z) file a general consent to service of process in any such jurisdiction. The
Company shall promptly notify Legal Counsel and the Investor of the receipt by
the Company of any notification with respect to the suspension of the
registration or qualification of any of the Registrable Securities for sale
under the securities or “Blue Sky” laws of any jurisdiction in the United States
or its receipt of actual notice of the initiation or threatening of any
proceeding for such purpose.

A-7




     (f) The Company shall notify
Legal Counsel and the Investor in writing of the happening of any event, as
promptly as practicable after becoming aware of such event, as a result of which
the prospectus included in a Registration Statement, as then in effect, includes
an untrue statement of a material fact or omission to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading
(provided that in no event shall such notice contain any material, non-public
information regarding the Company or any of its Subsidiaries), and, subject to
Section 3(q), promptly prepare a supplement or amendment to such Registration
Statement and such prospectus contained therein to correct such untrue statement
or omission and deliver one (1) electronic copy of such supplement or amendment
to Legal Counsel and the Investor (or such other number of copies as Legal
Counsel or the Investor may reasonably request). The Company shall also promptly
notify Legal Counsel and the Investor in writing (i) when a prospectus or any
prospectus supplement or post-effective amendment has been filed, when a
Registration Statement or any post-effective amendment has become effective
(notification of such effectiveness shall be delivered to Legal Counsel and the
Investor by facsimile or e-mail on the same day of such effectiveness and by
overnight mail), and when the Company receives written notice from the SEC that
a Registration Statement or any post-effective amendment will be reviewed by the
SEC, (ii) of any request by the SEC for amendments or supplements to a
Registration Statement or related prospectus or related information, (iii) of
the Company’s reasonable determination that a post-effective amendment to a
Registration Statement would be appropriate and (iv) of the receipt of any
request by the SEC or any other federal or state governmental authority for any
additional information relating to the Registration Statement or any amendment
or supplement thereto or any related prospectus. The Company shall respond as
promptly as practicable to any comments received from the SEC with respect to a
Registration Statement or any amendment thereto. Nothing in this Section 3(f)
shall limit any obligation of the Company under the Purchase Agreement.

     (g) The Company shall (i) use its
reasonable best efforts to prevent the issuance of any stop order or other
suspension of effectiveness of a Registration Statement or the use of any
prospectus contained therein, or the suspension of the qualification, or the
loss of an exemption from qualification, of any of the Registrable Securities
for sale in any jurisdiction and, if such an order or suspension is issued, to
obtain the withdrawal of such order or suspension at the earliest possible time
and (ii) notify Legal Counsel and the Investor of the issuance of such order and
the resolution thereof or its receipt of actual notice of the initiation or
threat of any proceeding for such purpose.

A-8




     (h) Upon the written request of
the Investor, the Company shall make available for inspection during normal
business hours by (i) the Investor, (ii) Legal Counsel and (iii) one (1) firm of
accountants or other agents retained by such Investor (collectively, the
“Inspectors”), all pertinent financial and other records, and
pertinent corporate documents and properties of the Company (collectively, the “Records”), as shall
be reasonably deemed necessary by each Inspector, and cause the Company’s
officers, directors and employees to supply all information which any Inspector
may reasonably request; provided, however, each Inspector shall
agree in writing to hold in strict confidence and not to make any disclosure
(except to the Investor) or use of any Record or other information which the
Company’s board of directors determines in good faith to be confidential, and of
which determination the Inspectors are so notified, unless (a) the disclosure of
such Records is necessary to avoid or correct a misstatement or omission in any
Registration Statement or is otherwise required under the Securities Act, (b)
the release of such Records is ordered pursuant to a final, non-appealable
subpoena or order from a court or government body of competent jurisdiction, or
(c) the information in such Records has been made generally available to the
public other than by disclosure in violation of this Agreement or any other
Transaction Document (as defined in the Purchase Agreement). The Investor agrees
that it shall, upon learning that disclosure of such Records is sought in or by
a court or governmental body of competent jurisdiction or through other means,
give prompt notice to the Company and allow the Company, at its expense, to
undertake appropriate action to prevent disclosure of, or to obtain a protective
order for, the Records deemed confidential. Nothing herein (or in any other
confidentiality agreement between the Company and the Investor, if any) shall be
deemed to limit the Investor’s ability to sell Registrable Securities in a
manner which is otherwise consistent with applicable laws and regulations.

     (i) The Company shall hold in
confidence and not make any disclosure of information concerning the Investor
provided to the Company unless (i) disclosure of such information is necessary
to comply with federal or state securities laws, (ii) the disclosure of such
information is necessary to avoid or correct a misstatement or omission in any
Registration Statement or is otherwise required to be disclosed in such
Registration Statement pursuant to the Securities Act, (iii) the release of such
information is ordered pursuant to a subpoena or other final, non-appealable
order from a court or governmental body of competent jurisdiction, or (iv) such
information has been made generally available to the public other than by
disclosure in violation of this Agreement or any other Transaction Document. The
Company agrees that it shall, upon learning that disclosure of such information
concerning the Investor is sought in or by a court or governmental body of
competent jurisdiction or through other means, give prompt written notice to the
Investor and allow the Investor, at the Investor’s expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, such information.

     (j) Without limiting any
obligation of the Company under the Purchase Agreement, the Company shall use
its reasonable best efforts either to (i) cause all of the Registrable
Securities covered by each Registration Statement to be listed on each
securities exchange on which securities of the same class or series issued by
the Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange or (ii) secure
designation and quotation of all of the Registrable Securities covered by each
Registration Statement on another Trading Market, or (iii) if, despite the
Company’s reasonable best efforts to satisfy the preceding clauses (i) or (ii)
the Company is unsuccessful in satisfying the preceding clauses (i) or (ii),
without limiting the generality of the foregoing, to use its reasonable best
efforts to arrange for at least two market makers to register with the Financial
Industry Regulatory Authority (f/k/a the National Association of Securities
Dealers, Inc.) (“FINRA”) as such with respect to such Registrable
Securities. In addition, the Company shall cooperate with the Investor and any
Broker-Dealer through which the Investor proposes to sell its Registrable Securities in effecting a filing with FINRA pursuant to FINRA
Rule 5110 as requested by the Investor. The Company shall pay all fees and
expenses in connection with satisfying its obligation under this Section
3(j).

A-9




     (k) The Company shall cooperate
with the Investor and, to the extent applicable, facilitate the timely
preparation and delivery of certificates (not bearing any restrictive legend)
representing the Registrable Securities to be offered pursuant to a Registration
Statement and enable such certificates to be in such denominations or amounts
(as the case may be) as the Investor may reasonably request from time to time
and registered in such names as the Investor may request. Certificates for
Registrable Securities free from all restrictive legends may be transmitted by
the transfer agent to the Investor by crediting an account at DTC as directed by
the Investor.

     (l) If requested by the Investor,
the Company shall as soon as practicable after receipt of notice from the
Investor and subject to Section 3(q) hereof, (i) incorporate in a prospectus
supplement or post-effective amendment such information as the Investor
reasonably requests to be included therein relating to the sale and distribution
of Registrable Securities, including, without limitation, information with
respect to the number of Registrable Securities being offered or sold, the
purchase price being paid therefor and any other terms of the offering of the
Registrable Securities to be sold in such offering; (ii) make all required
filings of such prospectus supplement or post-effective amendment after being
notified of the matters to be incorporated in such prospectus supplement or
post-effective amendment; and (iii) supplement or make amendments to any
Registration Statement or prospectus contained therein if reasonably requested
by the Investor.

     (m) The Company shall use its
reasonable best efforts to cause the Registrable Securities covered by a
Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to consummate the
disposition of such Registrable Securities.

     (n) The Company shall make
generally available to its security holders as soon as practical, but not later
than ninety (90) days after the close of the period covered thereby, an earnings
statement (in form complying with, and in the manner provided by, the provisions
of Rule 158 under the Securities Act) covering a twelve-month period beginning
not later than the first day of the Company’s fiscal quarter next following the
applicable Effective Date of each Registration Statement.

     (o) The Company shall otherwise
use its reasonable best efforts to comply with all applicable rules and
regulations of the SEC in connection with any registration hereunder.

     (p) Within one (1) Business Day
after each Registration Statement which covers Registrable Securities is
declared effective by the SEC, the Company shall deliver, and shall cause legal
counsel for the Company to deliver, to the transfer agent for such Registrable
Securities (with copies to the Investor) confirmation that such Registration
Statement has been declared effective by the SEC in the form attached hereto as
Exhibit A.

A-10




     (q) Notwithstanding anything to
the contrary herein (but subject to the last sentence of this Section 3(q)), at
any time after the Effective Date of a particular Registration Statement, the
Company may delay the disclosure of material, non-public information concerning
the Company or any of its Subsidiaries the disclosure of which at the time is
not, in the good faith opinion of the board of directors of the Company, in the
best interest of the Company and, in the opinion of counsel to the Company,
otherwise required (a “Grace Period”), provided that the Company
shall promptly, but in no event later than 9:30 a.m. (New York City time) on the
second Trading Day immediately prior to the commencement of any Grace Period
(except for such case where it is impossible to provide such two-Trading Day
advance notice, in which case the Company shall provide such notice as soon as
possible), notify the Investor in writing of the (i) existence of material,
non-public information giving rise to a Grace Period (provided that in each such
notice the Company shall not disclose the content of such material, non-public
information to the Investor) and the date on which such Grace Period will begin
and (ii) date on which such Grace Period ends, provided further that (I) no
Grace Period shall exceed 20 consecutive Trading Days and during any 365-day
period all such Grace Periods shall not exceed an aggregate of 60 Trading Days;
provided, further, that the Company shall not register any securities for the
account of itself or any other stockholder during any such Grace Period (other
than pursuant to a registration statement on Form S-4 or S-8), (II) the first
day of any Grace Period must be at least three Trading Days (or such shorter
period as may be agreed by the parties) after the last day of any prior Grace
Period and (III) no Grace Period may exist during (A) the first 10 consecutive
Trading Days after the Effective Date of the particular Registration Statement
or (B) the five-Trading Day period following each Settlement Date (each, an
“Allowable Grace Period”). For purposes of determining the length
of a Grace Period above, such Grace Period shall begin on and include the date
set forth in the notice referred to in clause (i) above, provided that such
notice is received by the Investor not later than 9:30 a.m. (New York City time)
on the second Trading Day immediately prior to such commencement date (except
for such case where it is impossible to provide such two-Trading Day advance
notice, in which case the Company shall provide such notice as soon as possible)
and shall end on and include the later of the date the Investor receives the
notice referred to in clause (ii) above and the date referred to in such notice.
The provisions of Section 3(l) hereof shall not be applicable during the period
of any Allowable Grace Period. Upon expiration of each Grace Period, the Company
shall again be bound by the first sentence of Section 3(f) with respect to the
information giving rise thereto unless such material, non-public information is
no longer applicable. Notwithstanding anything to the contrary contained in this
Section 3(q), the Company shall cause its transfer agent to deliver unlegended
shares of Common Stock to a transferee of the Investor in accordance with the
terms of the Purchase Agreement in connection with any sale of Registrable
Securities with respect to which the Investor has entered into a contract for
sale, and delivered a copy of the prospectus included as part of the particular
Registration Statement to the extent applicable, prior to the Investor’s receipt
of the notice of a Grace Period and for which the Investor has not yet
settled.

     (r) The Company shall take all
other reasonable actions necessary to expedite and facilitate disposition by the
Investor of its Registrable Securities pursuant to each Registration
Statement.

4. Obligations of the Investor.

A-11




     (a) At least five Business Days
prior to the first anticipated filing date of each Registration Statement (or
such shorter period to which the parties agree), the Company shall notify the
Investor in writing of the information the Company requires from the Investor
with respect to such Registration Statement. It shall be a condition precedent
to the obligations of the Company to complete the registration pursuant to this
Agreement with respect to the Registrable Securities of the Investor that the
Investor shall furnish to the Company such information regarding itself, the
Registrable Securities held by it and the intended method of disposition of the
Registrable Securities held by it, as shall be reasonably required to effect and
maintain the effectiveness of the registration of such Registrable Securities
and shall execute such documents in connection with such registration as the
Company may reasonably request.

     (b) The Investor, by its
acceptance of the Registrable Securities, agrees to cooperate with the Company
as reasonably requested by the Company in connection with the preparation and
filing of each Registration Statement hereunder, unless the Investor has
notified the Company in writing of the Investor’s election to exclude all of the
Investor’s Registrable Securities from such Registration Statement.

     (c) The Investor agrees that,
upon receipt of any notice from the Company of the happening of any event of the
kind described in Section 3(g) or the first sentence of 3(f), the Investor will
immediately discontinue disposition of Registrable Securities pursuant to any
Registration Statement(s) covering such Registrable Securities until the
Investor’s receipt of the copies of the supplemented or amended prospectus
contemplated by Section 3(g) or the first sentence of Section 3(f) or receipt of
notice that no supplement or amendment is required. Notwithstanding anything to
the contrary in this Section 4(c), the Company shall cause its transfer agent to
deliver unlegended shares of Common Stock to a transferee of the Investor in
accordance with the terms of the Purchase Agreement in connection with any sale
of Registrable Securities with respect to which the Investor has entered into a
contract for sale prior to the Investor’s receipt of a notice from the Company
of the happening of any event of the kind described in Section 3(g) or the first
sentence of Section 3(f) and for which the Investor has not yet settled.

     (d) The Investor covenants and
agrees that it will comply with the prospectus delivery and other requirements
of the Securities Act as applicable to it in connection with sales of
Registrable Securities pursuant to a Registration Statement.

5. Expenses of Registration.

     All reasonable expenses, other
than underwriting discounts and commissions, incurred in connection with
registrations, filings or qualifications pursuant to Sections 2 and 3,
including, without limitation, all registration, listing and qualifications
fees, printers and accounting fees, FINRA filing fees (if any) and fees and
disbursements of counsel for the Company shall be paid by the Company.

6. Indemnification.

A-12




     (a) In the event any Registrable
Securities are included in any Registration Statement under this Agreement, to
the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend the Investor, each of its
directors, officers, shareholders, members, partners, employees, agents,
advisors, representatives (and any other Persons with a functionally equivalent
role of a Person holding such titles notwithstanding the lack of such title or
any other title) and each Person, if any, who controls the Investor within the
meaning of the Securities Act or the Exchange Act and each of the directors,
officers, shareholders, members, partners, employees, agents, advisors,
representatives (and any other Persons with a functionally equivalent role of a
Person holding such titles notwithstanding the lack of such title or any other
title) of such controlling Persons (each, an “Investor Party” and
collectively, the “Investor Parties”), against any losses,
obligations, claims, damages, liabilities, contingencies, judgments, fines,
penalties, charges, costs (including, without limitation, court costs,
reasonable attorneys’ fees, costs of defense and investigation), amounts paid in
settlement or expenses, joint or several, (collectively, “Claims”)
incurred in investigating, preparing or defending any action, claim, suit,
inquiry, proceeding, investigation or appeal taken from the foregoing by or
before any court or governmental, administrative or other regulatory agency,
body or the SEC, whether pending or threatened, whether or not an Investor Party
is or may be a party thereto (“Indemnified Damages”), to which any
of them may become subject insofar as such Claims (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise out of or are based
upon: (i) any untrue statement or alleged untrue statement of a material fact in
a Registration Statement or any post-effective amendment thereto or in any
filing made in connection with the qualification of the offering under the
securities or other “Blue Sky” laws of any jurisdiction in which Registrable
Securities are offered (“Blue Sky Filing”), or the omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
prospectus (as amended or supplemented) or in any prospectus supplement or the
omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in light of the circumstances under which the
statements therein were made, not misleading (the matters in the foregoing
clauses (i) and (ii) being, collectively, “Violations”). Subject
to Section 6(c), the Company shall reimburse the Investor Parties, promptly as
such expenses are incurred and are due and payable, for any legal fees or other
reasonable expenses incurred by them in connection with investigating or
defending any such Claim. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(a): (i) shall
not apply to a Claim by an Investor Party arising out of or based upon a
Violation which occurs in reliance upon and in conformity with information
furnished in writing to the Company by such Investor Party for such Investor
Party expressly for use in connection with the preparation of such Registration
Statement, prospectus or prospectus supplement or any such amendment thereof or
supplement thereto; (ii) shall not be available to the Investor to the extent
such Claim is based on a failure of the Investor to deliver or to cause to be
delivered the prospectus (as amended or supplemented) made available by the
Company (to the extent applicable), including, without limitation, a corrected
prospectus, if such prospectus (as amended or supplemented) or corrected
prospectus was timely made available by the Company pursuant to Section 3(d) and
then only if, and to the extent that, following the receipt of the corrected
prospectus no grounds for such Claim would have existed; and (iii) shall not
apply to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of the Company, which consent shall not be
unreasonably withheld or delayed. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of the Investor Party and shall survive
the transfer of any of the Registrable Securities by the Investor pursuant to
Section 9.

A-13




     (b) In connection with any
Registration Statement in which the Investor is participating, the Investor
agrees to severally and not jointly indemnify, hold harmless and defend, to the
same extent and in the same manner as is set forth in Section 6(a), the Company,
each of its directors, each of its officers who signs the Registration Statement
and each Person, if any, who controls the Company within the meaning of the
Securities Act or the Exchange Act (each, an “Company Party”),
against any Claim or Indemnified Damages to which any of them may become
subject, under the Securities Act, the Exchange Act or otherwise, insofar as
such Claim or Indemnified Damages arise out of or are based upon any Violation,
in each case, to the extent, and only to the extent, that such Violation occurs
in reliance upon and in conformity with written information relating to the
Investor furnished to the Company by the Investor expressly for use in
connection with such Registration Statement; and, subject to Section 6(c) and
the below provisos in this Section 6(b), the Investor will reimburse a Company
Party any legal or other expenses reasonably incurred by such Company Party in
connection with investigating or defending any such Claim; provided,
however, the indemnity agreement contained in this Section 6(b) and the
agreement with respect to contribution contained in Section 7 shall not apply to
amounts paid in settlement of any Claim if such settlement is effected without
the prior written consent of the Investor, which consent shall not be
unreasonably withheld or delayed, provided further that the Investor shall be
liable under this Section 6(b) for only that amount of a Claim or Indemnified
Damages as does not exceed the net proceeds to the Investor as a result of the
applicable sale of Registrable Securities pursuant to such Registration
Statement. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of such Company Party and shall survive
the transfer of any of the Registrable Securities by the Investor pursuant to
Section 9.

     (c) Promptly after receipt by an
Investor Party or Company Party (as the case may be) under this Section 6 of
notice of the commencement of any action or proceeding (including, without
limitation, any governmental action or proceeding) involving a Claim, such
Investor Party or Company Party (as the case may be) shall, if a Claim in
respect thereof is to be made against any indemnifying party under this Section
6, deliver to the indemnifying party a written notice of the commencement
thereof, and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume control of the defense thereof
with counsel mutually satisfactory to the indemnifying party and the Investor
Party or the Company Party (as the case may be); provided,
however, an Investor Party or Company Party (as the case may be) shall
have the right to retain its own counsel with the fees and expenses of such
counsel to be paid by the indemnifying party if: (i) the indemnifying party has
agreed in writing to pay such fees and expenses; (ii) the indemnifying party
shall have failed promptly to assume the defense of such Claim and to employ
counsel reasonably satisfactory to such Investor Party or Company Party (as the
case may be) in any such Claim; or (iii) the named parties to any such Claim
(including, without limitation, any impleaded parties) include both such
Investor Party or Company Party (as the case may be) and the indemnifying party,
and such Investor Party or such Company Party (as the case may be) shall have
been advised by counsel that a conflict of interest is likely to exist if the
same counsel were to represent such Investor Party or such Company Party and the
indemnifying party (in which case, if such Investor Party or such Company Party
(as the case may be) notifies the indemnifying party in writing
that it elects to employ separate counsel at the expense of the indemnifying
party, then the indemnifying party shall not have the right to assume the
defense thereof on behalf of the indemnified party and such counsel shall be at
the expense of the indemnifying party, provided further that in the case of
clause (iii) above the indemnifying party shall not be responsible for the
reasonable fees and expenses of more than one (1) separate legal counsel for all
Investor Parties or Company Parties (as the case may be). The Company Party or
Investor Party (as the case may be) shall reasonably cooperate with the
indemnifying party in connection with any negotiation or defense of any such
action or Claim by the indemnifying party and shall furnish to the indemnifying
party all information reasonably available to the Company Party or Investor
Party (as the case may be) which relates to such action or Claim. The
indemnifying party shall keep the Company Party or Investor Party (as the case
may be) reasonably apprised at all times as to the status of the defense or any
settlement negotiations with respect thereto. No indemnifying party shall be
liable for any settlement of any action, claim or proceeding effected without
its prior written consent; provided, however, the indemnifying
party shall not unreasonably withhold, delay or condition its consent. No
indemnifying party shall, without the prior written consent of the Company Party
or Investor Party (as the case may be), 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
Company Party or Investor Party (as the case may be) of a release from all
liability in respect to such Claim or litigation, and such settlement shall not
include any admission as to fault on the part of the Company Party. For the
avoidance of doubt, the immediately preceding sentence shall apply to Sections
6(a) and 6(b) hereof. Following indemnification as provided for hereunder, the
indemnifying party shall be subrogated to all rights of the Company Party or
Investor Party (as the case may be) 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 indemnifying party within a reasonable
time of the commencement of any such action shall not relieve such indemnifying
party of any liability to the Investor Party or Company Party (as the case may
be) under this Section 6, except to the extent that the indemnifying party is
materially and adversely prejudiced in its ability to defend such action.

A-14




     (d) No Person involved in the
sale of Registrable Securities who is guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) in connection with
such sale shall be entitled to indemnification from any Person involved in such
sale of Registrable Securities who is not guilty of fraudulent
misrepresentation.

     (e) The indemnification required
by this Section 6 shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, as and when bills are
received or Indemnified Damages are incurred; provided that the Investor
shall promptly reimburse the Company for all such payments to the extent a court
of competent jurisdiction determines that any Investor Party was not entitled to
such payments.

     (f) The indemnity and
contribution agreements contained herein shall be in addition to (i) any cause
of action or similar right of the Company Party or Investor Party against the
indemnifying party or others, and (ii) any liabilities the indemnifying party
may be subject to pursuant to the law.

A-15




7. Contribution.

     To the extent any indemnification
by an indemnifying party is prohibited or limited by law, the indemnifying party
agrees to make the maximum contribution with respect to any amounts for which it
would otherwise be liable under Section 6 to the fullest extent permitted by
law; provided, however: (i) no contribution shall be made under
circumstances where the maker would not have been liable for indemnification
under the fault standards set forth in Section 6 of this Agreement, (ii) no
Person involved in the sale of Registrable Securities which Person is guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) in connection with such sale shall be entitled to contribution
from any Person involved in such sale of Registrable Securities who was not
guilty of fraudulent misrepresentation; and (iii) contribution by any seller of
Registrable Securities shall be limited in amount to the amount of net proceeds
received by such seller from the applicable sale of such Registrable Securities
pursuant to such Registration Statement. Notwithstanding the provisions of this
Section 7, the Investor shall not be required to contribute, in the aggregate,
any amount in excess of the amount by which the net proceeds actually received
by the Investor from the applicable sale of the Registrable Securities subject
to the Claim exceeds the amount of any damages that the Investor has otherwise
been required to pay, or would otherwise be required to pay under Section 6(b),
by reason of such untrue or alleged untrue statement or omission or alleged
omission.

8. Reports Under the Exchange Act.

     With a view to making available
to the Investor the benefits of Rule 144, the Company agrees to:

     (a) use its reasonable best
efforts to make and keep public information available, as those terms are
understood and defined in Rule 144;

     (b) use its reasonable best
efforts to file with the SEC in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act so long as
the Company remains subject to such requirements (it being understood that
nothing herein shall limit any of the Company’s obligations under the Purchase
Agreement) and the filing of such reports and other documents is required for
the applicable provisions of Rule 144;

     (c) furnish to the Investor so
long as the Investor owns Registrable Securities, promptly upon request, (i) a
written statement by the Company, if true, that it has complied with the
reporting, submission and posting requirements of Rule 144 and the Exchange Act,
(ii) a copy of the most recent annual or quarterly report of the Company and
such other reports and documents so filed by the Company with the SEC if such
reports are not publicly available via EDGAR, and (iii) such other information
as may be reasonably requested to permit the Investor to sell such securities
pursuant to Rule 144 without registration; and

     (d) take such additional action
as is reasonably requested by the Investor to enable the Investor to sell the
Registrable Securities pursuant to Rule 144, including, without limitation,
delivering all such legal opinions, consents, certificates, resolutions and
instructions to the Company’s Transfer Agent as may be reasonably requested from
time to time by the Investor and otherwise fully cooperate with Investor and Investor’s
broker to effect such sale of securities pursuant to Rule 144.

A-16




9. Assignment of Registration Rights.

     All or any portion of the rights
under this Agreement shall be automatically assignable by the Investor to any
transferee or assignee of all or any portion of the Investor’s Registrable
Securities if: (i) the Investor agrees in writing with such transferee or
assignee to assign all or any portion of such rights, and a copy of such
agreement is furnished to the Company within a reasonable time after such
assignment; (ii) the Company is, within a reasonable time after such transfer or
assignment, furnished with written notice of (a) the name and address of such
transferee or assignee, and (b) the securities with respect to which such
registration rights are being transferred or assigned; (iii) immediately
following such transfer or assignment the further disposition of such securities
by such transferee or assignee is restricted under the Securities Act or
applicable state securities laws if so required; (iv) at or before the time the
Company receives the written notice contemplated by clause (ii) of this sentence
such transferee or assignee agrees in writing with the Company to be bound by
all of the provisions contained herein; (v) such transfer or assignment shall
have been made in accordance with the applicable requirements of the Purchase
Agreement; and (vi) such transfer or assignment shall have been conducted in
accordance with all applicable federal and state securities laws. The term
“Investor” in this Agreement shall also include all such transferees and
assignees.

10. Amendment or Waiver.

     No provision of this Agreement
may be amended or waived by the parties from and after the date that is one
Trading Day immediately preceding the initial filing of the Registration
Statement with the SEC. Subject to the immediately preceding sentence, no
provision of this Agreement may be (i) amended other than by a written
instrument signed by both parties hereto or (ii) waived other than in a written
instrument signed by the party against whom enforcement of such waiver is
sought. Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.

11. Miscellaneous.

     (a) Solely for purposes of this
Agreement, a Person is deemed to be a holder of Registrable Securities whenever
such Person owns or is deemed to own of record such Registrable Securities. If
the Company receives conflicting instructions, notices or elections from two or
more Persons with respect to the same Registrable Securities, the Company shall
act upon the basis of instructions, notice or election received from such record
owner of such Registrable Securities.

     (b) Any notices, consents,
waivers or other communications required or permitted to be given under the
terms of this Agreement shall be given in accordance with Section 10.4 of the
Purchase Agreement.

     (c) Failure of any party to
exercise any right or remedy under this Agreement or otherwise, or delay by a
party in exercising such right or remedy, shall not operate as a waiver thereof. The Company and the Investor acknowledge and agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that either party shall be
entitled to an injunction or injunctions to prevent or cure breaches of the
provisions of this Agreement by the other party and to enforce specifically the
terms and provisions hereof (without the necessity of showing economic loss and
without any bond or other security being required), this being in addition to
any other remedy to which either party may be entitled by law or equity.

A-17




     (d) 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 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. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction. 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 HEREWITH OR ARISING OUT
OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

     (e) The Transaction Documents set
forth the entire agreement and understanding of the parties solely with respect
to the subject matter thereof and supersedes all prior and contemporaneous
agreements, negotiations and understandings between the parties, both oral and
written, solely with respect to such matters. There are no promises,
undertakings, representations or warranties by either party relative to subject
matter hereof not expressly set forth in the Transaction Documents.
Notwithstanding anything in this Agreement to the contrary and without
implication that the contrary would otherwise be true, nothing contained in this
Agreement shall limit, modify or affect in any manner whatsoever (i) the
conditions precedent to a Draw Down contained in Article VII of the Purchase
Agreement, including, without limitation, the condition precedent contained in
Section 7.2(iii) thereof or (ii) any of the Company’s obligations under the
Purchase Agreement.

     (f) Subject to compliance with
Section 9, this Agreement shall inure to the benefit of and be binding upon the
permitted successors and assigns of each of the parties hereto. This Agreement is not for the benefit of, nor may any provision
hereof be enforced by, any Person, other than the parties hereto, their
respective permitted successors and assigns and the Persons referred to in
Sections 6 and 7 hereof.

A-18




     (g) The headings in this
Agreement are for convenience of reference only and shall not limit or otherwise
affect the meaning hereof. 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.

     (h) 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. If 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.

     (i) 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.

     (j) 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.

[signature pages follow]

A-19




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

	 	COMPANY: 
	 	  
	 	AMERICAN PETRO-HUNTER INC. 
	 	  
	 	  
	 	  
	 	By: ____________________________________
	 	           
       Name: ____________________________
	 	           
       Title: _____________________________


A-20




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

	 	INVESTOR: 
	 	  
	 	HANOVER HOLDINGS I, LLC, a New 
	 	York limited liability company 
	 	  
	 	  
	 	By: _____________________________
	 	Its:
_____________________________


A-21




EXHIBIT A

	FORM OF NOTICE OF EFFECTIVENESS 
	OF REGISTRATION STATEMENT



______________________

______________________

______________________

Attention: ______________

	 	Re: 	American Petro-Hunter Inc.



Ladies and Gentlemen:

     We are counsel to American
Petro-Hunter, Inc., a Nevada corporation (the “Company”), and have
represented the Company in connection with that certain Common Stock Purchase
Agreement, dated as of March 22, 2013 (the “Purchase Agreement”),
entered into by and among the Company and the Investor named therein (the
“Holder”) pursuant to which the Company will issue to the Holder
from time to time shares of the Company’s common stock, $0.001 par value per
share (the ”Common Stock”). Pursuant to the Purchase Agreement,
the Company also has entered into a Registration Rights Agreement with the
Holder (the “Registration Rights Agreement”) pursuant to which the
Company agreed, among other things, to register the offer and sale of the
Registrable Securities (as defined in the Registration Rights Agreement) under
the Securities Act of 1933, as amended (the “Securities Act”). In
connection with the Company’s obligations under the Registration Rights
Agreement, on _______________, 20__, the Company filed a Registration Statement
on Form S-[3][1] (File No. 333-_____________) (the “Registration
Statement”) with the Securities and Exchange Commission (the
“SEC”) relating to the Registrable Securities which names the
Holder as an underwriter and a selling stockholder thereunder.

     In connection with the foregoing,
based solely upon oral advice from the staff of the SEC, the Registration
Statement was declared effective under the Securities Act on [ENTER DATE OF
EFFECTIVENESS], and no stop order suspending its effectiveness has been issued
and no proceedings for that purpose have been instituted or overtly
threatened.

     This letter shall serve as our
standing opinion to you that the shares of Common Stock are freely transferable
by the Holder pursuant to the Registration Statement, provided the Registration
Statement remains effective.

	 	Very truly yours, 
	 	 
	 	[ISSUER’S COUNSEL] 
	 	 
	 	By:_____________________




	CC: 	
      Hanover Holdings I, LLC



A-22




EXHIBIT B

SELLING STOCKHOLDER

     This prospectus relates to the
possible resale from time to time by the selling stockholder of any or all of
the shares of common stock that have been or may be issued by us to Hanover
under the Purchase Agreement. For additional information regarding the issuance
of common stock covered by this prospectus, see “Prospectus Summary—Equity
Enhancement Program With Hanover” above. We are registering the shares of common
stock pursuant to the provisions of the Registration Rights Agreement we entered
into with Hanover on March 22, 2013 in order to permit the selling stockholder
to offer the shares for resale from time to time. Except for the transactions
contemplated by the Purchase Agreement and the Registration Rights Agreement,
Hanover has not had any material relationship with us within the past three
years.

     The table below presents
information regarding the selling stockholder and the shares of common stock
that it may offer from time to time under this prospectus. This table is
prepared based on information supplied to us by the selling stockholder, and
reflects holdings as of _________ , 201__. As used in this prospectus, the term
“selling stockholder” includes Hanover and any donees, pledgees, transferees or
other successors in interest selling shares received after the date of this
prospectus from the selling stockholder as a gift, pledge, or other non-sale
related transfer. The number of shares in the column “Maximum Number of Shares
of Common Stock to be Offered Pursuant to this Prospectus” represents all of the
shares of common stock that the selling stockholder may offer under this
prospectus. The selling stockholder may sell some, all or none of its shares in
this offering. We do not know how long the selling stockholder will hold the
shares before selling them, and we currently have no agreements, arrangements or
understandings with the selling stockholder regarding the sale of any of the
shares.

     Beneficial ownership is
determined in accordance with Rule 13d-3(d) promulgated by the SEC under the
Exchange Act, and includes shares of common stock with respect to which the
selling stockholder has voting and investment power. The percentage of shares of
common stock beneficially owned by the selling stockholder prior to the offering
shown in the table below is based on an aggregate of ____________ shares of our
common stock outstanding on ___________ , 201__. Because the purchase price of
the shares of common stock issuable under the Purchase Agreement is determined
on each settlement date, the number of shares that may actually be sold by the
Company under the Purchase Agreement may be fewer than the number of shares
being offered by this prospectus. The fourth column assumes the sale of all of
the shares offered by the selling stockholder pursuant to this prospectus.

A-23





	  	Number of Shares
      of 	Maximum Number of 	Number of Shares
      of 
	  	Common Stock Owned
      Prior 	Shares of Common Stock
    	Common Stock Owned
      After 
	Name of Selling Stockholder 	to Offering
	to be Offered Pursuant
      to 	Offering

	  	 	this Prospectus 	 
	  	 	  	  	 
	  	  	 	  	  	 
	  	Number(1) 	Percent(2)  	  	Number(3) 	Percent(2)  
	  	  	 	  	  	 
	  	  	 	  	  	 
	Hanover Holdings I, LLC (4) 	 1,764,706 	 	  	  	 



	______	 
	 	 
	* 	Represents beneficial ownership of less than one percent of the
      outstanding shares of our common stock.
	 	 
	(1) 	
      This number represents the 1,764,706 shares of common
      stock we issued to Hanover on March 6, 2013 as Commitment Shares in
      consideration for entering into the Purchase Agreement with us. In
      accordance with Rule 13d-3(d) under the Exchange Act, we have excluded
      from the number of shares beneficially owned prior to the offering all of
      the shares that Hanover may be required to purchase under the Purchase
      Agreement, because the issuance of such shares is solely at our discretion
      and is subject to certain conditions, the satisfaction of all of which are
      outside of Hanover’s control, including the registration statement of
      which this prospectus is a part becoming and remaining effective.
      Furthermore, the maximum dollar value of each put of common stock to
      Hanover under the Purchase Agreement is subject to certain agreed upon
      threshold limitations set forth in the Purchase Agreement. Also, under the
      terms of the Purchase Agreement, we may not issue shares of our common
      stock to Hanover to the extent that Hanover or any of its affiliates
      would, at any time, beneficially own more than 4.99% of our outstanding
      common stock.

	 	 
	(2) 	
      Applicable percentage ownership is based on
      [______________] shares of our common stock outstanding as of __________,
      20___.

	 	 
	(3) 	
      Assumes the sale of all shares being offered pursuant to
      this prospectus.

	 	 
	(4) 	
      The business address of Hanover is c/o Magna Group, 5
      Hanover Square, New York, New York 10004. Hanover’s principal business is
      that of a private investment firm. We have been advised that Hanover is
      not a member of the Financial Industry Regulatory Authority, or FINRA, or
      an independent broker-dealer, and that neither Hanover nor any of its
      affiliates is an affiliate or an associated person of any FINRA member or
      independent broker-dealer. We have been further advised that Joshua Sason
      is the Chief Executive Officer of Hanover and owns all of the membership
      interests in Hanover, and that Mr. Sason has sole power to vote or to
      direct the vote and sole power to dispose or to direct the disposition of
      all securities owned directly by Hanover.



A-24




PLAN OF DISTRIBUTION

     We are registering shares of
common stock that have been or may be issued by us from time to time to Hanover
under the Purchase Agreement to permit the resale of these shares of common
stock after the issuance thereof by the selling stockholder from time to time
after the date of this prospectus. We will not receive any of the proceeds from
the sale by the selling stockholder of the shares of common stock. We will bear
all fees and expenses incident to our obligation to register the shares of
common stock.

     The selling stockholder may
decide not to sell any shares of common stock. The selling stockholder may sell
all or a portion of the shares of common stock beneficially owned by it and
offered hereby from time to time directly or through one or more underwriters,
broker-dealers or agents, who may receive compensation in the form of discounts,
concessions or commissions from the selling stockholder and/or the purchasers of
the shares of common stock for whom they may act as agent. In effecting sales,
broker-dealers that are engaged by the selling stockholder may arrange for other
broker-dealers to participate. Hanover is an “underwriter” within the meaning of
the Securities Act. Any brokers, dealers or agents who participate in the
distribution of the shares of common stock by the selling stockholder may also
be deemed to be “underwriters,” and any profits on the sale of the shares of
common stock by them and any discounts, commissions or concessions received by
any such brokers, dealers or agents may be deemed to be underwriting discounts
and commissions under the Securities Act. Hanover has advised us that it will
use an unaffiliated broker-dealer to effectuate all resales of our common stock.
To our knowledge, Hanover has not entered into any agreement, arrangement or
understanding with any particular broker-dealer or market maker with respect to
the shares of common stock offered hereby, nor do we know the identity of the
broker-dealers or market makers that may participate in the resale of the
shares. Because Hanover is, and any other selling stockholder, broker, dealer or
agent may be deemed to be, an “underwriter” within the meaning of the Securities
Act, Hanover will (and any other selling stockholder, broker, dealer or agent
may) be subject to the prospectus delivery requirements of the Securities Act
and may be subject to certain statutory liabilities of the Securities Act
(including, without limitation, Sections 11, 12 and 17 thereof) and Rule 10b-5
under the Exchange Act.

     The selling stockholder will act
independently of us in making decisions with respect to the timing, manner and
size of each sale. The shares of common stock may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time of the
sale, at varying prices determined at the time of sale, or at negotiated prices.
These sales may be effected in transactions, which may involve crosses or block
transactions, pursuant to one or more of the following methods:

	
  on any national securities exchange or quotation service on which the
  securities may be listed or quoted at the time of sale; 

  
	
  in the over-the-counter market in accordance with the rules of NASDAQ; 

  
	
  in transactions otherwise than on these exchanges or systems or in the
  over-the- counter market; 



A-25




	
  through the writing or settlement of options, whether such options are
  listed on an options exchange or otherwise; 

  
	
  ordinary brokerage transactions and transactions in which the broker-dealer
  solicits purchasers; 

  
	
  block trades in which the broker-dealer will attempt to sell the shares as
  agent but may position and resell a portion of the block as principal to
  facilitate the transaction; 

  
	
  purchases by a broker-dealer as principal and resale by the broker-dealer
  for its account; 

  
	
  an exchange distribution in accordance with the rules of the applicable
  exchange; 

  
	
  privately negotiated transactions; 

  
	
  broker-dealers may agree with the selling stockholder to sell a specified
  number of such shares at a stipulated price per share; 

  
	
  a combination of any such methods of sale; and 

  
	
  any other method permitted pursuant to applicable law. 



     The selling stockholder may also
sell shares of common stock covered by this prospectus pursuant to Rule 144
promulgated under the Securities Act, if available, rather than under this
prospectus. In addition, the selling stockholder may transfer the shares of
common stock by other means not described in this prospectus.

     Any broker-dealer participating
in such transactions as agent may receive commissions from the selling
stockholder (and, if they act as agent for the purchaser of such shares, from
such purchaser). Hanover has informed us that each such broker-dealer will
receive commissions from Hanover which will not exceed customary brokerage
commissions. Broker-dealers may agree with the selling stockholder to sell a
specified number of shares at a stipulated price per share, and, to the extent
such a broker-dealer is unable to do so acting as agent for the selling
stockholder, to purchase as principal any unsold shares at the price required to
fulfill the broker-dealer commitment to the selling stockholder. Broker-dealers
who acquire shares as principal may thereafter resell such shares from time to
time in one or more transactions (which may involve crosses and block
transactions and which may involve sales to and through other broker-dealers,
including transactions of the nature described above and pursuant to the one or
more of the methods described above) at fixed prices, at prevailing market
prices at the time of the sale, at varying prices determined at the time of
sale, or at negotiated prices, and in connection with such resales may pay to or
receive from the purchasers of such shares commissions computed as described
above. To the extent required under the Securities Act, an amendment to this
prospectus or a supplemental prospectus will be filed, disclosing:

	the name of any such broker-dealers; 


A-26




	
  the number of shares involved; 

  
	
  the price at which such shares are to be sold; 

  
	
  the commission paid or discounts or concessions allowed to such
  broker-dealers, where applicable; 

  
	
  that such broker-dealers did not conduct any investigation to verify the
  information set out or incorporated by reference in this prospectus, as
  supplemented; and 

  
	
  other facts material to the transaction. 



     Hanover has informed us that it
does not have any written or oral agreement or understanding, directly or
indirectly, with any person to distribute the common stock. Pursuant to a
requirement of the Financial Industry Regulatory Authority, or FINRA, the
maximum commission or discount and other compensation to be received by any
FINRA member or independent broker-dealer shall not be greater than eight
percent (8%) of the gross proceeds received by us for the sale of any securities
being registered pursuant to Rule 415 under the Securities Act.

     Under the securities laws of some
states, the shares of common stock may be sold in such states only through
registered or licensed brokers or dealers. In addition, in some states the
shares of common stock may not be sold unless such shares have been registered
or qualified for sale in such state or an exemption from registration or
qualification is available and is complied with.

     There can be no assurance that
the selling stockholder will sell any or all of the shares of common stock
registered pursuant to the registration statement, of which this prospectus
forms a part.

     Underwriters and purchasers that
are deemed underwriters under the Securities Act may engage in transactions that
stabilize, maintain or otherwise affect the price of the common stock, including
the entry of stabilizing bids or syndicate covering transactions or the
imposition of penalty bids. The selling stockholder and any other person
participating in the sale or distribution of the shares of common stock will be
subject to applicable provisions of the Exchange Act and the rules and
regulations thereunder (including, without limitation, Regulation M of the
Exchange Act), which may restrict certain activities of, and limit the timing of
purchases and sales of any of the shares of common stock by, the selling
stockholder and any other participating person. To the extent applicable,
Regulation M may also restrict the ability of any person engaged in the
distribution of the shares of common stock to engage in market-making and
certain other activities with respect to the shares of common stock. In
addition, the anti-manipulation rules under the Exchange Act may apply to sales
of the shares of common stock in the market. All of the foregoing may affect the
marketability of the shares of common stock and the ability of any person or
entity to engage in market-making activities with respect to the shares of
common stock.

A-27




     We have agreed to pay all
expenses of the registration of the shares of common stock pursuant to the
registration rights agreement, estimated to be $[ ] in total, including, without
limitation, Securities and Exchange Commission filing fees and expenses of
compliance with state securities or “Blue Sky” laws; provided, however, Hanover
will pay all selling commissions, concessions and discounts, and other amounts
payable to underwriters, dealers or agents, if any, as well as transfer taxes
and certain other expenses associated with the sale of the shares of common
stock. We have agreed to indemnify Hanover and certain other persons against
certain liabilities in connection with the offering of shares of common stock
offered hereby, including liabilities arising under the Securities Act or, if
such indemnity is unavailable, to contribute amounts required to be paid in
respect of such liabilities. Hanover has agreed to indemnify us against
liabilities under the Securities Act that may arise from any written information
furnished to us by Hanover specifically for use in this prospectus or, if such
indemnity is unavailable, to contribute amounts required to be paid in respect
of such liabilities.

     At any time a particular offer of
the shares of common stock is made by the selling stockholder, a revised
prospectus or prospectus supplement, if required, will be distributed. Such
prospectus supplement or post-effective amendment will be filed with the
Securities and Exchange Commission to reflect the disclosure of any required
additional information with respect to the distribution of the shares of common
stock. We may suspend the sale of shares by the selling stockholder pursuant to
this prospectus for certain periods of time for certain reasons, including if
the prospectus is required to be supplemented or amended to include additional
material information.

A-28




EXHIBIT B TO THE
COMMON STOCK PURCHASE AGREEMENT

FORM OF DRAW DOWN NOTICE

     Reference is made to the Common
Stock Purchase Agreement dated as of March 22, 2013 (the “Purchase
Agreement”) between American Petro-Hunter Inc., a corporation organized
and existing under the laws of the State of Nevada (the
“Company”), and Hanover Holdings I, LLC, a New York limited
liability company. Capitalized terms used and not otherwise defined herein shall
have the meanings given such terms in the Purchase Agreement. In accordance with
and pursuant to Section 3.1 of the Purchase Agreement, the Company hereby issues
this Draw Down Notice to exercise a Draw Down for the Draw Down Amount Requested
indicated below.


	Draw Down Amount Requested: 	 _________________________________________
	Pricing Period start date: 	 _________________________________________
	Pricing Period end date: 	 _________________________________________
	Settlement Date: 	 _________________________________________
	Draw Down Floor Price: 	 _________________________________________



     On behalf of the Company, the
undersigned hereby certifies to the Investor that (i) the above Draw Down Amount
Requested does not exceed the Maximum Draw Down Amount Requested, (ii) the sale
of Shares pursuant to this Draw Down Notice shall not cause the Company to sell
or the Investor to purchase shares of Common Stock which, when aggregated with
all purchases made by the Investor pursuant to all prior Draw Down Notices
issued under the Purchase Agreement, would exceed the Aggregate Limit, (iii) to
the Company’s Knowledge, the sale of Shares pursuant to this Draw Down Notice
shall not cause the Company to sell or the Investor to purchase shares of Common
Stock which would cause the aggregate number of shares of Common Stock then
beneficially owned (as calculated pursuant to Section 13(d) of the Exchange Act
and Rule 13d-3 promulgated thereunder) by the Investor and its Affiliates to
exceed the Ownership Limitation, (iv) as of the date hereof, the Company does
not possess any material non-public information, and (v) the Company has
performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by the Purchase Agreement and the
Registration Rights Agreement to be performed, satisfied or complied with by the
Company at or prior to the date hereof and shall perform, satisfy and comply in
all material respects with all covenants, agreements and conditions required by
the Purchase Agreement and the Registration Rights Agreement to be performed,
satisfied or complied with by the Company at or prior to the applicable
settlement date, including without limitation, delivery of all certificates and
bring down opinions required to be delivered by the Purchase Agreement.

	Dated: 	By:
______________________________________
	  	Name 
	  	Title: 
	  	  
	  	  
	  	Address: 
	  	Facsimile No. 


AGREED AND ACCEPTED

	By: _____________________________
	         Name 
	         Title:



B-1





	EXHIBIT C TO THE 
	COMMON STOCK PURCHASE AGREEMENT 
	CERTIFICATE OF THE COMPANY 
	  
	CLOSING CERTIFICATE 


_________20__

     The undersigned, the
[___________] of American Petro-Hunter Inc., a corporation organized and
existing under the laws of the State of Nevada (the “Company”),
delivers this certificate in connection with the Common Stock Purchase
Agreement, dated as of March 22, 2013 (the “Agreement”), by and
between the Company and Hanover Holdings I, LLC, a New York limited liability
company (the “Investor”), and hereby certifies on the date hereof
that (capitalized terms used herein without definition have the meanings
assigned to them in the Agreement):

     1. Attached hereto as Exhibit
A is a true, complete and correct copy of the Articles of Incorporation of
the Company as filed with the Secretary of State of the State of Nevada. The
Articles of Incorporation of the Company have not been further amended or
restated, and no document with respect to any amendment to the Articles of
Incorporation of the Company has been filed in the office of the Secretary of
State of the State of Nevada since the date shown on the face of the state
certification relating to the Company’s Articles of Incorporation, which is in
full force and effect on the date hereof, and no action has been taken by the
Company in contemplation of any such amendment or the dissolution, merger or
consolidation of the Company.

     2. Attached hereto as Exhibit
B is a true and complete copy of the Bylaws of the Company, as amended and
restated through, and as in full force and effect on, the date hereof, and no
proposal for any amendment, repeal or other modification to the Bylaws of the
Company has been taken or is currently pending before the Board of Directors or
stockholders of the Company.

     3. The Board of Directors of the
Company has approved the transactions contemplated by the Transaction Documents;
said approval has not been amended, rescinded or modified and remains in full
force and effect as of the date hereof.

     4. Each person who, as an officer
of the Company, or as attorney-in-fact of an officer of the Company, signed the
Transaction Documents to which the Company is a party, was duly elected,
qualified and acting as such officer or duly appointed and acting as such
attorney-in-fact, and the signature of each such person appearing on any such
document is his genuine signature.

IN WITNESS WHEREOF, I have signed my name as of the date
first above written.

	 	 
	 	Name: 
	 	Title: 


C-1





	EXHIBIT D TO THE 
	COMMON STOCK PURCHASE AGREEMENT 
	COMPLIANCE CERTIFICATE 


     In connection with the issuance
of shares of common stock of American Petro-Hunter Inc., a corporation organized
and existing under the laws of the State of Nevada (the
“Company”), pursuant to the Draw Down Notice, dated
[_____________], delivered by the Company to Hanover Holdings I, LLC, a New York
limited liability company (the “Investor”) pursuant to Article III
of the Common Stock Purchase Agreement, dated as of March 22, 2013, by and
between the Company and the Investor (the “Agreement”), the
undersigned hereby certifies to the Investor as follows:

     1. The undersigned is the duly appointed [_____________] of the
Company.

     2. Except as set forth in the
attached Disclosure Schedule, the representations and warranties of the Company
set forth in Article V of the Agreement (i) that are not qualified by
“materiality” or “Material Adverse Effect” are true and correct in all material
respects as of [insert Draw Down Exercise Date] and as of the date hereof with
the same force and effect as if made on such dates, except to the extent such
representations and warranties are as of another date, in which case, such
representations and warranties are true and correct in all material respects as
of such other date and (ii) that are qualified by “materiality” or “Material
Adverse Effect” are true and correct as of [insert Draw Down Exercise Date] and
as of the date hereof with the same force and effect as if made on such dates,
except to the extent such representations and warranties are as of another date,
in which case, such representations and warranties are true and correct as of
such other date.

     3. The Company has performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by the Agreement and the Registration Rights Agreement
to be performed, satisfied or complied with by the Company at or prior to
[insert Draw Down Exercise Date] and the date hereof.

     4. The Shares issuable on the
date hereof in respect of the Draw Down Notice referenced above shall be
delivered electronically by crediting the Investor’s or its designees’ account
at DTC through its Deposit/Withdrawal at Custodian (DWAC) system, and shall be
freely tradable and transferable and without restriction on resale. To the
extent requested by the Investor pursuant to Section 10.1(iv) under the
Agreement, the legend set forth in Section 10.1(iii) of the Agreement has been
removed from the certificate representing the Commitment Shares in accordance
with Section 10.1(iv) of the Agreement.

     5. As of [insert Fixed Request
Exercise Date] and the date hereof, the Company did not and does not possess any
material non-public information.

     Capitalized terms used but not
otherwise defined herein shall have the meanings assigned to them in the
Agreement.

     The undersigned has executed this
Certificate this [___] day of [___________], 20[__].


	By: 	



D-1






	Name: 	 
	Title: 	 



D-2





	DISCLOSURE SCHEDULE 
	RELATING TO THE COMMON STOCK 
	PURCHASE AGREEMENT, DATED AS OF MARCH 22,
      2013 
	BETWEEN AMERICAN PETRO-HUNTER INC. AND HANOVER
      HOLDINGS I, LLC 


     This disclosure schedule is made
and given pursuant to Article V of the Common Stock Purchase Agreement, dated as
of March 22, 2013 (the “Agreement”), by and between American
Petro-Hunter Inc., a Nevada corporation (the “Company”), and
Hanover Holdings I, LLC, a New York limited liability company. Unless the
context otherwise requires, all capitalized terms are used herein as defined in
the Agreement. The numbers below correspond to the section numbers of
representations and warranties in the Agreement most directly modified by the
below exceptions.

D-3





	FORM OF OPINION OF OUTSIDE COUNSEL TO BE DELIVERED
      PURSUANT TO 
	SECTION 7.2(xv) OF THE COMMON STOCK PURCHASE
      AGREEMENT 
	DATED AS OF MARCH 22, 2013 BETWEEN AMERICAN
      PETRO-HUNTER INC. AND 
	HANOVER HOLDINGS I, LLC 


[Company Counsel’s Letterhead]

	1. 	
      The Company has been duly incorporated and is validly
      existing and in good standing under the laws of the State of Nevada, with
      full corporate power and authority to own its properties and to conduct
      its business as described in the Registration Statement and the
      Prospectus. The Company is duly qualified to do business as a foreign
      corporation and is in good standing in every jurisdiction in which the
      nature of the business conducted or property owned by it makes such
      qualification necessary, except for any jurisdiction in which the failure
      to be so qualified would not have a Material Adverse Effect.

	 	 
	2. 	
      The Company has the requisite corporate power and
      authority to execute, deliver and perform its obligations under the
      Transaction Documents to which it is a party and to issue the Securities
      in accordance with the terms thereof. The execution and delivery by the
      Company of the Transaction Documents to which it is a party, and the
      consummation by the Company of the transactions contemplated thereby
      (including, without limitation, the issuance of the Securities) have been
      duly and validly authorized by all necessary corporate action and, except
      for any consent or authorization of the Company’s Board of Directors or a
      committee thereof in connection with the delivery of a Draw Down Notice to
      the Investor, no further consent or authorization of the Company, its
      Board of Directors or its stockholders is required.

	 	 
	3. 	
      Each of the Transaction Documents to which the Company is
      a party has been duly executed and delivered by the Company and
      constitutes a legal, valid and binding obligation of the Company,
      enforceable against the Company in accordance with its terms, subject to
      applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
      moratorium and similar laws affecting creditors’ rights and remedies
      generally, and subject, as to enforceability, to general principles of
      equity, including principles of commercial reasonableness, good faith and
      fair dealing (regardless of whether enforcement is sought in a proceeding
      at law or in equity).

	 	 
	4. 	
      The execution, delivery and performance by the Company of
      the Transaction Documents to which it is a party and the consummation by
      the Company of the transactions contemplated thereby (including, without
      limitation, the issuance of the Securities) do not and will not: (i)
      violate the Company’s certificate of incorporation or bylaws (the
      “Governing Documents”); (ii) violate the general corporation law of the
      State of Nevada, or any federal statute, rule or regulation applicable to
      the Company; (iii) require any consents, approvals, or authorizations to
      be obtained by the Company, or any registrations, declarations or filings
      to be made by the Company, in each case, under the general corporation law
      of the State of Nevada or any federal statute, rule or regulation
      applicable to the Company that have not been obtained or made; (iv)
      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 material agreement, mortgage, deed
      of trust, indenture, note, bond, license, lease agreement, instrument or
      obligation to which the Company is a party or is bound that has been filed
      as an exhibit to the 2011 Form 10-K or any other Commission Document filed
      after the 2011 Form 10-K; (v) create or impose a lien, charge or
      encumbrance on any property of the Company under any agreement or
      commitment to which the Company is a party or is bound that has been filed
      as an exhibit to the 2011 Form 10-K or any other Commission Document filed
      after the 2011 Form 10-K; or (vi) to our knowledge, result in a violation
      of any federal or state order, judgment or decree applicable to the
      Company or any of its Subsidiaries or by which any property or asset of
  the Company or any of its Subsidiaries are bound or affected.









	5. 	
      Assuming the accuracy of the representations and
      warranties made by you in the Purchase Agreement and your compliance with
      the covenants made by you in the Purchase Agreement and the Registration
      Rights Agreement, the offering, sale and issuance of the Securities in
      accordance with the Transaction Documents is exempt from the registration
      requirements of the Securities Act of 1933, as amended (the “Securities
      Act”).

	 	 
	6. 	
      The Commitment Shares are duly authorized and validly
      issued, fully paid and nonassessable, free and clear of all liens,
      charges, taxes, security interests, encumbrances, rights of first refusal,
      preemptive or similar rights and other encumbrances under the Company’s
      Governing Documents, the laws of the State of Delaware or any material
      agreement, mortgage, deed of trust, indenture, note, bond, license, lease
      agreement, instrument or obligation to which the Company is a party or is
      bound that has been filed as an exhibit to the 2011 Form 10-K or any other
      Commission Document filed after the 2011 Form 10-K. When issued and paid
      for in accordance with the Purchase Agreement, the Shares will be duly
      authorized and validly issued, fully paid and nonassessable, free and
      clear of all liens, charges, taxes, security interests, encumbrances,
      rights of first refusal, preemptive or similar rights and other
      encumbrances under the Company’s Governing Documents, the laws of the
      State of Delaware or any material agreement, mortgage, deed of trust,
      indenture, note, bond, license, lease agreement, instrument or obligation
      to which the Company is a party or is bound that has been filed as an
      exhibit to the 2011 Form 10-K or any other Commission Document filed after
      the 2011 Form 10-K.

	 	 
	7. 	
      There is no action, suit, claim, investigation or
      proceeding pending or, to our knowledge, threatened against the Company or
      any Subsidiary which questions the validity of any of the Transaction
      Documents or the transactions contemplated thereby or any action taken or
      to be taken pursuant thereto.

	 	 
	8. 	
      The Company is not an “investment company” or any entity
      controlled by an “investment company,” as such term is defined in the
      Investment Company Act of 1940, as amended.

	 	 
	9. 	
      The Registration Statement has become effective under the
      Securities Act. With your consent, based solely on a telephonic
      confirmation by a member of the Staff of the Commission on [__________],
      2013, no stop order suspending the effectiveness of the Registration
      Statement has been issued under the Securities Act and no proceedings
      therefor have been initiated or, to our knowledge threatened, by the
      Commission, and the Registrable Securities may be resold under the Securities
      Act pursuant to the Registration Statement. Any required filing of the
      Prospectus and a Prospectus Supplement pursuant to Rule 424 under the
      Securities Act has been made in accordance with Rule 424 under the
      Securities Act.









	10. 	
      The Registration Statement, as of the date it became
      effective, and the Prospectus and each Prospectus Supplement, as of its
      date, complied as to form in all material respects with the requirements
      for registration statements on Form S-1 under the Act; it being
      understood, however, that we express no opinion with respect to Regulation
      S-T or the financial statements, schedules or other financial data
      included in or incorporated by reference in or omitted from the
      Registration Statement, the Prospectus or any Prospectus Supplement. For
      purposes of this paragraph, we have assumed that the statements made in
      the Registration Statement, the Prospectus and each Prospectus Supplement
      are correct and complete.



     In addition, we have participated
in conferences with officers and other representatives of the Company and
representatives of the independent registered public accounting firm for the
Company, at which the contents of the Registration Statement, the Prospectus and
each Prospectus Supplement, and the Commission Documents incorporated by
reference therein, and related matters were discussed and, although we are not
passing upon, and do not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained or incorporated by
reference in the Registration Statement, the Prospectus, each Prospectus
Supplement, or the Commission Documents incorporated by reference therein, and
have not made any independent check or verification thereof, during the course
of such participation, no facts came to our attention that caused us to believe
that the Registration Statement, at the time it became effective and as of the
date hereof, together with the Commission Documents incorporated by reference
therein, at such time and as of the date hereof, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or that the
Prospectus, as of its date and as of the date hereof, together with the
Commission Documents incorporated by reference therein, at that date and as of
the date hereof, contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; it being understood
that we express no belief with respect to the financial statements, the notes
and schedules thereto, other financial data, or exhibits included in,
incorporated by reference in, or omitted from, the Registration Statement or the
Prospectus.





	FORM OF OPINION “BRING DOWN” OF OUTSIDE COUNSEL TO BE
      DELIVERED 
	PURSUANT TO SECTION 7.2(xv) OF THE COMMON STOCK
      PURCHASE 
	AGREEMENT DATED AS OF MARCH 22, 2013 BETWEEN AMERICAN
      PETRO- 
	HUNTER INC. AND HANOVER HOLDINGS I, LLC 
	  
	[Company Counsel’s Letterhead] 



	1. 	
      The Registration Statement has become effective under the
      Securities Act. With your consent, based solely on a telephonic
      confirmation by a member of the Staff of the Commission on [_____] [___],
      20[_], no stop order suspending the effectiveness of the Registration
      Statement has been issued under the Securities Act and no proceedings
      therefor have been initiated or, to our knowledge threatened, by the
      Commission, and the Registrable Securities may be resold under the
      Securities Act pursuant to the Registration Statement. Any required filing
      of the Prospectus and a Prospectus Supplement pursuant to Rule 424 under
      the Securities Act has been made in accordance with Rule 424 under the
      Securities Act.

	 	 
	2. 	
      Based on our inquiry of the Company’s [______________],
      no facts have come to our attention that cause us to believe that any of
      the opinions expressed in our opinion letter to you dated [___________],
      2013 are not true and correct as of the date
hereof.



     In addition, we have participated
in conferences with officers and other representatives of the Company and
representatives of the independent registered public accounting firm for the
Company, at which the contents of the Registration Statement, the Prospectus and
each Prospectus Supplement, and the Commission Documents incorporated by
reference therein, and related matters were discussed and, although we are not
passing upon, and do not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained or incorporated by
reference in the Registration Statement, the Prospectus, each Prospectus
Supplement, or the Commission Documents incorporated by reference therein, and
have not made any independent check or verification thereof, during the course
of such participation, no facts came to our attention that caused us to believe
that the Registration Statement, at the time it became effective and as of the
date hereof, together with the Commission Documents incorporated by reference
therein, at such time and as of the date hereof, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or that the
Prospectus, as of its date and as of the date hereof, together with the
Commission Documents incorporated by reference therein, at that date and as of
the date hereof, contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; it being understood
that we express no belief with respect to the financial statements, the notes
and schedules thereto, other financial data, or exhibits included in,
incorporated by reference in, or omitted from, the Registration Statement or the
Prospectus.