Document:

Exhibit 10.4
                          SECURITIES PURCHASE AGREEMENT

     This SECURITIES PURCHASE AGREEMENT (the "Agreement"), dated as of September
13, 2012, by and between LIBERTY COAL ENERGY CORP., a Nevada  corporation,  with
headquarters  located  at 99-18TH  Street - Suite  3000,  Denver,  CO 80202 (the
"Company"),  and ASHER  ENTERPRISES,  INC.,  a  Delaware  corporation,  with its
address at 1 Linden Place, Suite 207, Great Neck, NY 11021 (the "Buyer").

                                    WHEREAS:

     A. The Company and the Buyer are executing and delivering this Agreement in
reliance upon the exemption from securities  registration  afforded by the rules
and  regulations  as  promulgated  by the United States  Securities and Exchange
Commission  (the "SEC") under the  Securities Act of 1933, as amended (the "1933
Act");

     B. Buyer  desires to purchase  and the  Company  desires to issue and sell,
upon the terms and conditions set forth in this Agreement an 8% convertible note
of the  Company,  in the form  attached  hereto as Exhibit  A, in the  aggregate
principal amount of $37,500.00  (together with any note(s) issued in replacement
thereof or as a dividend thereon or otherwise with respect thereto in accordance
with the terms thereof,  the "Note"),  convertible  into shares of common stock,
$0.001 par value per share, of the Company (the "Common Stock"),  upon the terms
and subject to the limitations and conditions set forth in such Note.

     C. The Buyer wishes to purchase,  upon the terms and  conditions  stated in
this Agreement,  such principal amount of Note as is set forth immediately below
its name on the signature pages hereto; and

     NOW THEREFORE, the Company and the Buyer severally (and not jointly) hereby
agree as follows:

     1. Purchase and Sale of Note.

          a.  Purchase of Note.  On the Closing  Date (as  defined  below),  the
Company  shall issue and sell to the Buyer and the Buyer agrees to purchase from
the Company such principal amount of Note as is set forth  immediately below the
Buyer's name on the signature pages hereto.

          b. Form of Payment.  On the Closing Date (as defined  below),  (i) the
Buyer shall pay the  purchase  price for the Note to be issued and sold to it at
the Closing  (as  defined  below)  (the  "Purchase  Price") by wire  transfer of
immediately  available  funds to the Company,  in accordance  with the Company's
written  wiring  instructions,  against  delivery  of the Note in the  principal
amount equal to the Purchase Price as is set forth immediately below the Buyer's
name on the signature pages hereto, and (ii) the Company shall deliver such duly
executed Note on behalf of the Company,  to the Buyer,  against delivery of such
Purchase Price.
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          c. Closing Date.  Subject to the  satisfaction  (or written waiver) of
the conditions  thereto set forth in Section 6 and Section 7 below, the date and
time of the  issuance  and  sale of the Note  pursuant  to this  Agreement  (the
"Closing Date") shall be 12:00 noon, Eastern Standard Time on or about September
19,  2012,  or  such  other  mutually  agreed  upon  time.  The  closing  of the
transactions  contemplated by this Agreement (the "Closing")  shall occur on the
Closing Date at such location as may be agreed to by the parties.

     2.  Buyer's  Representations  and  Warranties.  The  Buyer  represents  and
warrants to the Company that:

          a. Investment  Purpose. As of the date hereof, the Buyer is purchasing
the Note and the shares of Common Stock issuable upon conversion of or otherwise
pursuant to the Note (including,  without limitation,  such additional shares of
Common  Stock,  if any, as are  issuable (i) on account of interest on the Note,
(ii) as a result of the events  described in Sections 1.3 and 1.4(g) of the Note
or (iii) in payment of the  Standard  Liquidated  Damages  Amount (as defined in
Section  2(f) below)  pursuant to this  Agreement,  such shares of Common  Stock
being  collectively   referred  to  herein  as  the  "Conversion   Shares"  and,
collectively with the Note, the "Securities") for its own account and not with a
present view towards the public sale or distribution thereof, except pursuant to
sales  registered or exempted from  registration  under the 1933 Act;  provided,
however, that by making the representations  herein, the Buyer does not agree 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 1933 Act.

          b. Accredited  Investor Status. The Buyer is an "accredited  investor"
as  that  term is  defined  in  Rule  501(a)  of  Regulation  D (an  "Accredited
Investor").

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

          d. Information. The Buyer and its advisors, if any, have been, and for
so long as the Note remain  outstanding  will continue to be, furnished with all
materials  relating to the business,  finances and operations of the Company and
materials  relating  to the offer  and sale of the  Securities  which  have been
requested by the Buyer or its advisors. The Buyer and its advisors, if any, have
been,  and for so long as the  Note  remain  outstanding  will  continue  to be,
afforded the  opportunity to ask questions of the Company.  Notwithstanding  the
foregoing,  the Company has not  disclosed to the Buyer any  material  nonpublic
information and will not disclose such  information  unless such  information is
disclosed to the public prior to or promptly  following  such  disclosure to the
Buyer.  Neither  such  inquiries  nor  any  other  due  diligence  investigation
conducted by Buyer or any of its advisors or representatives shall modify, amend
or affect Buyer's right to rely on the Company's  representations and warranties

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contained in Section 3 below.  The Buyer  understands that its investment in the
Securities  involves a significant degree of risk. The Buyer is not aware of any
facts that may constitute a breach of any of the Company's  representations  and
warranties made herein.

          e.  Governmental  Review.  The Buyer understands that no United States
federal  or state  agency or any other  government  or  governmental  agency has
passed upon or made any recommendation or endorsement of the Securities.

          f. Transfer or Re-sale. The Buyer understands that (i) the sale or re-
sale of the Securities has not been and is not being  registered  under the 1933
Act or any  applicable  state  securities  laws,  and the  Securities may not be
transferred  unless  (a)  the  Securities  are  sold  pursuant  to an  effective
registration statement under the 1933 Act, (b) the Buyer shall have delivered to
the  Company,  at the cost of the Buyer,  an opinion of counsel that shall be in
form,  substance  and scope  customary  for  opinions  of counsel in  comparable
transactions  to the effect that the Securities to be sold or transferred may be
sold or  transferred  pursuant to an  exemption  from such  registration,  which
opinion  shall  be  accepted  by the  Company,  (c) the  Securities  are sold or
transferred to an "affiliate" (as defined in Rule 144 promulgated under the 1933
Act (or a  successor  rule)  ("Rule  144")) of the  Buyer who  agrees to sell or
otherwise  transfer the Securities only in accordance with this Section 2(f) and
who is an Accredited Investor, (d) the Securities are sold pursuant to Rule 144,
or (e) the Securities are sold pursuant to Regulation S under the 1933 Act (or a
successor  rule)  ("Regulation  S"),  and the Buyer shall have  delivered to the
Company,  at the cost of the Buyer, an opinion of counsel that shall be in form,
substance and scope customary for opinions of counsel in corporate transactions,
which opinion shall be accepted by the Company; (ii) any sale of such Securities
made in  reliance on Rule 144 may be made only in  accordance  with the terms of
said Rule and  further,  if said Rule is not  applicable,  any  re-sale  of such
Securities  under  circumstances in which the seller (or the person through whom
the sale is made) may be deemed to be an underwriter (as that term is defined in
the 1933 Act) may require  compliance  with some other  exemption under the 1933
Act or the rules and  regulations of the SEC  thereunder;  and (iii) neither the
Company nor any other person is under any obligation to register such Securities
under the 1933 Act or any state  securities laws or to comply with the terms and
conditions  of any  exemption  thereunder  (in each case).  Notwithstanding  the
foregoing or anything else contained herein to the contrary,  the Securities may
be pledged as collateral in connection  with a bona fide margin account or other
lending arrangement.

          g. Legends.  The Buyer  understands that the Note and, until such time
as the  Conversion  Shares have been  registered  under the 1933 Act may be sold
pursuant to Rule 144 or Regulation S without any restriction as to the number of
securities  as of a  particular  date  that can then be  immediately  sold,  the
Conversion  Shares may bear a restrictive  legend in substantially the following
form  (and  a  stop-transfer  order  may  be  placed  against  transfer  of  the
certificates for such Securities):

         "NEITHER THE ISSUANCE AND SALE OF THE  SECURITIES  REPRESENTED BY
         THIS  CERTIFICATE NOR THE SECURITIES INTO WHICH THESE  SECURITIES
         ARE EXERCISABLE  HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF

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         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  (WHICH  COUNSEL  SHALL BE
         SELECTED BY THE HOLDER),  IN A GENERALLY  ACCEPTABLE  FORM,  THAT
         REGISTRATION  IS NOT REQUIRED  UNDER SAID ACT OR (II) UNLESS SOLD
         PURSUANT TO RULE 144 OR RULE 144A 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."

     The legend set forth above  shall be removed and the Company  shall issue a
certificate  without such legend to the holder of any Security  upon which it is
stamped,  if, unless otherwise required by applicable state securities laws, (a)
such Security is registered for sale under an effective  registration  statement
filed  under  the  1933 Act or  otherwise  may be sold  pursuant  to Rule 144 or
Regulation  S without any  restriction  as to the number of  securities  as of a
particular  date that can then be immediately  sold, or (b) such holder provides
the Company with an opinion of counsel,  in form,  substance and scope customary
for opinions of counsel in comparable transactions,  to the effect that a public
sale or transfer of such  Security  may be made without  registration  under the
1933 Act,  which  opinion  shall be  accepted by the Company so that the sale or
transfer is effected.  The Buyer agrees to sell all Securities,  including those
represented  by a  certificate(s)  from which the legend  has been  removed,  in
compliance  with applicable  prospectus  delivery  requirements,  if any. In the
event that the Company  does not accept the  opinion of counsel  provided by the
Buyer with respect to the transfer of Securities  pursuant to an exemption  from
registration,  such as Rule 144 or  Regulation  S, at the  Deadline,  it will be
considered an Event of Default pursuant to Section 3.2 of the Note.

          h.  Authorization;  Enforcement.  This  Agreement  has  been  duly and
validly  authorized.  This  Agreement  has been duly  executed and  delivered on
behalf  of the  Buyer,  and  this  Agreement  constitutes  a valid  and  binding
agreement of the Buyer enforceable in accordance with its terms.

          i. Residency.  The Buyer is a resident of the  jurisdiction  set forth
immediately below the Buyer's name on the signature pages hereto.

     3.  Representations  and Warranties of the Company.  The Company represents
and warrants to the Buyer that:

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          a.  Organization  and  Qualification.  The  Company  and  each  of its
Subsidiaries  (as defined  below),  if any,  is a  corporation  duly  organized,
validly  existing and in good  standing  under the laws of the  jurisdiction  in
which it is incorporated, with full power and authority (corporate and other) to
own,  lease,  use and operate its properties and to carry on its business as and
where now owned, leased, used, operated and conducted.  Schedule 3(a) sets forth
a list of all of the  Subsidiaries of the Company and the  jurisdiction in which
each is incorporated. The Company and each of its Subsidiaries is duly qualified
as a  foreign  corporation  to do  business  and is in good  standing  in  every
jurisdiction  in which its  ownership  or use of  property  or the nature of the
business  conducted by it makes such  qualification  necessary  except where the
failure to be so qualified or in good standing would not have a Material Adverse
Effect.  "Material  Adverse  Effect"  means any material  adverse  effect on the
business, operations, assets, financial condition or prospects of the Company or
its Subsidiaries,  if any, taken as a whole, or on the transactions contemplated
hereby or by the  agreements  or  instruments  to be entered into in  connection
herewith.  "Subsidiaries"  means any corporation or other organization,  whether
incorporated  or  unincorporated,   in  which  the  Company  owns,  directly  or
indirectly, any equity or other ownership interest.

          b.  Authorization;  Enforcement.  (i) The  Company  has all  requisite
corporate power and authority to enter into and perform this Agreement, the Note
and to consummate the transactions  contemplated hereby and thereby and to issue
the  Securities,  in  accordance  with the terms  hereof and  thereof,  (ii) the
execution  and  delivery  of this  Agreement,  the Note by the  Company  and the
consummation  by  it  of  the  transactions   contemplated  hereby  and  thereby
(including  without  limitation,  the  issuance of the Note and the issuance and
reservation  for issuance of the Conversion  Shares  issuable upon conversion or
exercise  thereof) have been duly authorized by the Company's Board of Directors
and no further consent or authorization of the Company,  its Board of Directors,
or its shareholders is required, (iii) this Agreement has been duly executed and
delivered by the Company by its authorized  representative,  and such authorized
representative  is the true and official  representative  with authority to sign
this Agreement and the other documents executed in connection  herewith and bind
the Company accordingly, and (iv) this Agreement constitutes, and upon execution
and  delivery  by the  Company  of the  Note,  each  of  such  instruments  will
constitute,  a legal,  valid and binding  obligation of the Company  enforceable
against the Company in accordance with its terms.

          c. Capitalization. As of the date hereof, the authorized capital stock
of the Company consists of: (i) 1,500,000,000 shares of Common Stock, $0.001 par
value per share, of which 60,566,667 shares are issued and outstanding; and (ii)
there are no authorized  shares of Preferred  Stock;  no shares are reserved for
issuance  pursuant to the Company's  stock option plans,  no shares are reserved
for issuance  pursuant to securities  (other than the Note)  exercisable for, or
convertible  into or  exchangeable  for  shares of Common  Stock and  10,500,000
shares are  reserved  for  issuance  upon  conversion  of the Note.  All of such
outstanding  shares  of  capital  stock  are,  or upon  issuance  will be,  duly
authorized, validly issued, fully paid and non- assessable. No shares of capital
stock of the  Company  are  subject to  preemptive  rights or any other  similar
rights of the  shareholders of the Company or any liens or encumbrances  imposed
through the actions or failure to act of the Company.  As of the effective  date
of this Agreement, (i) there are no outstanding options, warrants, scrip, rights
to  subscribe  for,   puts,   calls,   rights  of  first  refusal,   agreements,

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understandings,   claims  or  other  commitments  or  rights  of  any  character
whatsoever relating to, or securities or rights convertible into or exchangeable
for any shares of capital  stock of the Company or any of its  Subsidiaries,  or
arrangements  by which the Company or any of its  Subsidiaries  is or may become
bound to issue  additional  shares of capital stock of the Company or any of its
Subsidiaries,  (ii) there are no  agreements  or  arrangements  under  which the
Company or any of its  Subsidiaries  is obligated to register the sale of any of
its or their  securities under the 1933 Act and (iii) there are no anti-dilution
or price adjustment  provisions  contained in any security issued by the Company
(or in any  agreement  providing  rights  to  security  holders)  that  will  be
triggered by the issuance of the Note or the Conversion  Shares. The Company has
furnished to the Buyer true and correct  copies of the Company's  Certificate of
Incorporation as in effect on the date hereof  ("Certificate of Incorporation"),
the Company's By- laws, as in effect on the date hereof (the "By-laws"), and the
terms of all securities  convertible into or exercisable for Common Stock of the
Company and the material rights of the holders thereof in respect  thereto.  The
Company  shall  provide the Buyer with a written  update of this  representation
signed by the  Company's  Chief  Executive  on behalf of the  Company  as of the
Closing Date.

          d. Issuance of Shares.  The Conversion  Shares are duly authorized and
reserved for issuance  and, upon  conversion of the Note in accordance  with its
respective terms,  will be validly issued,  fully paid and  non-assessable,  and
free from all taxes,  liens,  claims and encumbrances  with respect to the issue
thereof and shall not be subject to preemptive rights or other similar rights of
shareholders  of the Company  and will not impose  personal  liability  upon the
holder thereof.

          e.   Acknowledgment   of  Dilution.   The  Company   understands   and
acknowledges  the  potentially  dilutive  effect to the  Common  Stock  upon the
issuance of the  Conversion  Shares  upon  conversion  of the Note.  The Company
further  acknowledges  that its  obligation  to  issue  Conversion  Shares  upon
conversion of the Note in accordance with this  Agreement,  the Note is absolute
and unconditional  regardless of the dilutive effect that such issuance may have
on the ownership interests of other shareholders of the Company.

          f. No  Conflicts.  The  execution,  delivery and  performance  of this
Agreement,  the Note by the Company and the  consummation  by the Company of the
transactions contemplated hereby and thereby (including, without limitation, the
issuance and  reservation  for issuance of the  Conversion  Shares) will not (i)
conflict  with or result in a violation of any provision of the  Certificate  of
Incorporation  or  By-laws,  or (ii)  violate or conflict  with,  or result in a
breach of any  provision  of, or  constitute  a default  (or an event which with
notice or lapse of time or both could become a default) under, or give to others
any rights of  termination,  amendment,  acceleration  or  cancellation  of, any
agreement,  indenture, patent, patent license or instrument to which the Company
or any of its  Subsidiaries  is a party,  or (iii)  result in a violation of any
law, rule,  regulation,  order,  judgment or decree (including federal and state
securities  laws  and   regulations  and  regulations  of  any   self-regulatory
organizations to which the Company or its securities are subject)  applicable to
the Company or any of its  Subsidiaries or by which any property or asset of the
Company  or any of its  Subsidiaries  is  bound  or  affected  (except  for such
conflicts, defaults, terminations, amendments, accelerations,  cancellations and
violations  as would  not,  individually  or in the  aggregate,  have a Material
Adverse Effect). Neither the Company nor any of its Subsidiaries is in violation
of its Certificate of Incorporation,  By-laws or other organizational  documents

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and neither the Company nor any of its  Subsidiaries is in default (and no event
has occurred which with notice or lapse of time or both could put the Company or
any of its  Subsidiaries in default)  under,  and neither the Company nor any of
its  Subsidiaries  has taken any action or failed to take any action  that would
give  to  others  any  rights  of   termination,   amendment,   acceleration  or
cancellation of, any agreement,  indenture or instrument to which the Company or
any of its  Subsidiaries  is a party or by which any  property  or assets of the
Company or any of its  Subsidiaries  is bound or  affected,  except for possible
defaults as would not, individually or in the aggregate, have a Material Adverse
Effect.  The  businesses  of the Company and its  Subsidiaries,  if any, are not
being conducted, and shall not be conducted so long as the Buyer owns any of the
Securities, in violation of any law, ordinance or regulation of any governmental
entity.  Except as  specifically  contemplated by this Agreement and as required
under the 1933 Act and any applicable  state securities laws, the Company is not
required to obtain any consent, authorization or order of, or make any filing or
registration  with, any court,  governmental  agency,  regulatory  agency,  self
regulatory  organization  or stock  market or any third party in order for it to
execute,  deliver or perform any of its obligations  under this  Agreement,  the
Note in  accordance  with the terms  hereof or  thereof or to issue and sell the
Note in accordance with the terms hereof and to issue the Conversion Shares upon
conversion  of the Note.  All  consents,  authorizations,  orders,  filings  and
registrations  which the Company is required to obtain pursuant to the preceding
sentence  have been  obtained or effected  on or prior to the date  hereof.  The
Company is not in violation of the listing requirements of the Over-the- Counter
Bulletin Board (the "OTCQB") and does not reasonably  anticipate that the Common
Stock will be delisted by the OTCQB in the foreseeable  future.  The Company and
its Subsidiaries are unaware of any facts or circumstances which might give rise
to any of the foregoing.

          g. SEC Documents;  Financial Statements.  The Company has timely filed
all reports,  schedules,  forms,  statements and other documents  required to be
filed  by it  with  the  SEC  pursuant  to  the  reporting  requirements  of the
Securities  Exchange  Act of 1934,  as  amended  (the  "1934  Act")  (all of the
foregoing filed prior to the date hereof and all exhibits  included  therein and
financial statements and schedules thereto and documents (other than exhibits to
such documents) incorporated by reference therein, being hereinafter referred to
herein as the "SEC Documents"). Upon written request the Company will deliver to
the  Buyer  true and  complete  copies  of the SEC  Documents,  except  for such
exhibits and  incorporated  documents.  As of their  respective  dates,  the SEC
Documents  complied in all material  respects with the  requirements of the 1934
Act and the rules and regulations of the SEC promulgated  thereunder  applicable
to the SEC Documents, and none of the SEC Documents, at the time they were filed
with the SEC,  contained  any untrue  statement of a material fact or omitted to
state a material  fact  required to be stated  therein or  necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.  None of the statements made in any such SEC Documents is,
or has been,  required to be amended or updated under applicable law (except for
such statements as have been amended or updated in subsequent  filings prior the
date hereof).  As of their  respective  dates,  the financial  statements of the
Company  included  in the SEC  Documents  complied  as to  form in all  material
respects with  applicable  accounting  requirements  and the published rules and
regulations of the SEC with respect thereto. Such financial statements have been
prepared  in  accordance  with  United  States  generally  accepted   accounting
principles, consistently applied, during the periods involved and fairly present

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in all material respects the consolidated  financial position of the Company and
its  consolidated  Subsidiaries  as of the dates  thereof  and the  consolidated
results of their  operations and cash flows for the periods then ended (subject,
in the case of unaudited  statements,  to normal  year-end  audit  adjustments).
Except as set forth in the financial  statements of the Company  included in the
SEC Documents,  the Company has no liabilities,  contingent or otherwise,  other
than (i) liabilities  incurred in the ordinary course of business  subsequent to
June 30, 2012, and (ii) obligations under contracts and commitments  incurred in
the  ordinary  course of business  and not  required  under  generally  accepted
accounting  principles  to be reflected  in such  financial  statements,  which,
individually or in the aggregate, are not material to the financial condition or
operating  results of the  Company.  The  Company  is  subject to the  reporting
requirements of the 1934 Act.

          h. Absence of Certain Changes.  Since June 30, 2012, there has been no
material  adverse  change and no  material  adverse  development  in the assets,
liabilities,  business, properties,  operations, financial condition, results of
operations,  prospects or 1934 Act reporting status of the Company or any of its
Subsidiaries.

          i. Absence of Litigation. There is no action, suit, claim, proceeding,
inquiry  or  investigation  before or by any  court,  public  board,  government
agency, self-regulatory organization or body pending or, to the knowledge of the
Company or any of its Subsidiaries,  threatened against or affecting the Company
or any of its Subsidiaries,  or their officers or directors in their capacity as
such,  that could have a  Material  Adverse  Effect.  Schedule  3(i)  contains a
complete list and summary description of any pending or, to the knowledge of the
Company,  threatened  proceeding  against or affecting the Company or any of its
Subsidiaries, without regard to whether it would have a Material Adverse Effect.
The Company and its Subsidiaries are unaware of any facts or circumstances which
might give rise to any of the foregoing.

          j. Patents,  Copyrights, etc. The Company and each of its Subsidiaries
owns or possesses  the requisite  licenses or rights to use all patents,  patent
applications,  patent rights, inventions,  know-how, trade secrets,  trademarks,
trademark applications, service marks, service names, trade names and copyrights
("Intellectual  Property") necessary to enable it to conduct its business as now
operated (and, as presently contemplated to be operated in the future); there is
no claim or action by any person pertaining to, or proceeding pending, or to the
Company's knowledge threatened,  which challenges the right of the Company or of
a Subsidiary with respect to any Intellectual Property necessary to enable it to
conduct its  business as now operated  (and,  as  presently  contemplated  to be
operated in the future); to the best of the Company's  knowledge,  the Company's
or its Subsidiaries'  current and intended  products,  services and processes do
not  infringe on any  Intellectual  Property or other rights held by any person;
and the Company is unaware of any facts or  circumstances  which might give rise
to any of the  foregoing.  The Company and each of its  Subsidiaries  have taken
reasonable  security measures to protect the secrecy,  confidentiality and value
of their Intellectual Property.

          k. No Materially Adverse  Contracts,  Etc. Neither the Company nor any
of its  Subsidiaries  is  subject  to any  charter,  corporate  or  other  legal
restriction,  or any judgment,  decree,  order,  rule or regulation which in the

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judgment of the  Company's  officers  has or is expected in the future to have a
Material  Adverse Effect.  Neither the Company nor any of its  Subsidiaries is a
party to any  contract  or  agreement  which in the  judgment  of the  Company's
officers has or is expected to have a Material Adverse Effect.

          l. Tax Status.  The Company and each of its  Subsidiaries  has made or
filed all federal,  state and foreign income and all other tax returns,  reports
and declarations required by any jurisdiction to which it is subject (unless and
only to the extent that the Company and each of its  Subsidiaries  has set aside
on its books  provisions  reasonably  adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other governmental  assessments and
charges  that are  material  in amount,  shown or  determined  to be due on such
returns,  reports and  declarations,  except those being contested in good faith
and has set aside on its books provisions reasonably adequate for the payment of
all taxes for periods  subsequent to the periods to which such returns,  reports
or declarations  apply. There are no unpaid taxes in any material amount claimed
to be due by the taxing authority of any  jurisdiction,  and the officers of the
Company  know of no basis for any such claim.  The  Company  has not  executed a
waiver with respect to the statute of limitations  relating to the assessment or
collection  of any foreign,  federal,  state or local tax. None of the Company's
tax returns is presently being audited by any taxing authority.

          m. Certain Transactions. Except for arm's length transactions pursuant
to which the Company or any of its  Subsidiaries  makes payments in the ordinary
course of business upon terms no less  favorable  than the Company or any of its
Subsidiaries  could obtain from third  parties and other than the grant of stock
options  disclosed  on  Schedule  3(c),  none  of the  officers,  directors,  or
employees  of the  Company  is  presently  a party to any  transaction  with the
Company  or any of its  Subsidiaries  (other  than for  services  as  employees,
officers and directors),  including any contract, agreement or other arrangement
providing for the furnishing of services to or by,  providing for rental of real
or personal property to or from, or otherwise  requiring payments to or from any
officer,  director or such  employee or, to the  knowledge  of the Company,  any
corporation,  partnership, trust or other entity in which any officer, director,
or any such  employee  has a  substantial  interest or is an officer,  director,
trustee or partner.

          n. Disclosure.  All information  relating to or concerning the Company
or any of its Subsidiaries set forth in this Agreement and provided to the Buyer
pursuant  to  Section  2(d)  hereof  and  otherwise  in   connection   with  the
transactions  contemplated  hereby is true and correct in all material  respects
and the Company has not omitted to state any material fact necessary in order to
make the statements made herein or therein,  in light of the circumstances under
which they were made, not misleading.  No event or circumstance  has occurred or
exists with  respect to the Company or any of its  Subsidiaries  or its or their
business,  properties,  prospects,  operations or financial  conditions,  which,
under  applicable  law,  rule  or  regulation,  requires  public  disclosure  or
announcement  by the  Company but which has not been so  publicly  announced  or
disclosed  (assuming for this purpose that the Company's reports filed under the
1934 Act are being incorporated into an effective  registration  statement filed
by the Company under the 1933 Act).

                                       9
<PAGE>
          o. Acknowledgment Regarding Buyer' Purchase of Securities. The Company
acknowledges and agrees that the Buyer is acting solely in the capacity of arm's
length   purchasers  with  respect  to  this  Agreement  and  the   transactions
contemplated  hereby.  The Company  further  acknowledges  that the Buyer 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
hereby  and  any  statement   made  by  the  Buyer  or  any  of  its  respective
representatives or agents in connection with this Agreement and the transactions
contemplated  hereby is not advice or a recommendation  and is merely incidental
to the Buyer' purchase of the Securities.  The Company further represents to the
Buyer that the  Company's  decision to enter into this  Agreement has been based
solely on the independent evaluation of the Company and its representatives.

          p. No  Integrated  Offering.  The Company has entered  into,  and will
close within 30 days of this offering, an unit offering, consisting of preferred
convertible  to common shares and attached  warrants,  through a private  equity
placement  of  $9,196,500.00.  This  placement  will require a  registration  or
registrations of the preferred shares,  the underlying common of those preferred
shares and the common  shares  underlying  the  warrants.  The Company  does not
intend to integrate this Securities Purchase Agreement with any other offerings.
The Company does not control the actions of any  regulatory  agency who attempts
to integrate any offerings.

          q. No Brokers.  The Company has taken no action  which would give rise
to any  claim by any  person  for  brokerage  commissions,  transaction  fees or
similar  payments  relating to this Agreement or the  transactions  contemplated
hereby.

          r. Permits; Compliance. The Company and each of its Subsidiaries is in
possession  of  all  franchises,  grants,  authorizations,   licenses,  permits,
easements, variances, exemptions,  consents, certificates,  approvals and orders
necessary to own,  lease and operate its properties and to carry on its business
as it is now being conducted (collectively, the "Company Permits"), and there is
no action  pending or, to the  knowledge  of the Company,  threatened  regarding
suspension or  cancellation of any of the Company  Permits.  Neither the Company
nor any of its  Subsidiaries is in conflict with, or in default or violation of,
any of  the  Company  Permits,  except  for  any  such  conflicts,  defaults  or
violations  which,  individually  or in the  aggregate,  would not reasonably be
expected to have a Material  Adverse  Effect.  Since June 30, 2012,  neither the
Company nor any of its Subsidiaries  has received any notification  with respect
to possible  conflicts,  defaults or violations of applicable  laws,  except for
notices relating to possible conflicts, defaults or violations, which conflicts,
defaults or violations would not have a Material Adverse Effect.

          s. Environmental Matters.

               (i) There are, to the  Company's  knowledge,  with respect to the

Company or any of its Subsidiaries or any predecessor of the Company, no past or
present  violations of  Environmental  Laws (as defined below),  releases of any
material into the environment, actions, activities,  circumstances,  conditions,
events,  incidents, or contractual obligations which may give rise to any common
law   environmental   liability  or  any  liability   under  the   Comprehensive

                                       10
<PAGE>
Environmental  Response,  Compensation  and  Liability  Act of 1980  or  similar
federal,  state,  local or foreign  laws and  neither the Company nor any of its
Subsidiaries  has received any notice with respect to any of the foregoing,  nor
is any action pending or, to the Company's  knowledge,  threatened in connection
with any of the  foregoing.  The term  "Environmental  Laws" means all  federal,
state, local or foreign laws relating to pollution or protection of human health
or the environment (including,  without limitation,  ambient air, surface water,
groundwater,  land surface or subsurface strata), including, without limitation,
laws  relating to  emissions,  discharges,  releases or  threatened  releases of
chemicals,  pollutants contaminants,  or toxic or hazardous substances or wastes
(collectively,   "Hazardous  Materials")  into  the  environment,  or  otherwise
relating to the manufacture,  processing, distribution, use, treatment, storage,
disposal,  transport  or  handling  of  Hazardous  Materials,  as  well  as  all
authorizations,   codes,  decrees,  demands  or  demand  letters,   injunctions,
judgments,  licenses,  notices  or notice  letters,  orders,  permits,  plans or
regulations issued, entered, promulgated or approved thereunder.

               (ii) Other than those that are or were  stored,  used or disposed
of in compliance with applicable law, no Hazardous Materials are contained on or
about any real property currently owned, leased or used by the Company or any of
its Subsidiaries,  and no Hazardous Materials were released on or about any real
property  previously  owned,  leased  or  used  by  the  Company  or  any of its
Subsidiaries  during the period the  property  was owned,  leased or used by the
Company or any of its Subsidiaries, except in the normal course of the Company's
or any of its Subsidiaries' business.

               (iii) There are no underground storage tanks on or under any real
property owned,  leased or used by the Company or any of its  Subsidiaries  that
are not in compliance with applicable law.

          t. Title to Property.  The Company and its Subsidiaries  have good and
marketable  title in fee  simple to all real  property  and good and  marketable
title to all personal  property owned by them and listed on their balance sheet.
The Company has a lease on the properties it has contracted to operate which are
material to the business of the Company and its Subsidiaries,  in each case free
and clear of all liens, encumbrances and defects except such as are described in
Schedule  3(t) or such as would not have a  Material  Adverse  Effect.  Any real
property and facilities held under lease by the Company and its Subsidiaries are
held by them under valid, subsisting and enforceable leases with such exceptions
as would not have a Material Adverse Effect.

          u. Insurance. The Company and each of its Subsidiaries are not 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.  The  Company  intends to acquire  Directors  and  Officers  Insurance,
operating  insurance and appropriate Labor and Industries  insurance policies as
are necessary to prosecute on its business plan within the next 90 days. Neither
the Company nor any such  Subsidiary  has any reason to believe that it will not
be able to renew its  existing  insurance  coverage  as and when  such  coverage

                                       12
<PAGE>
expires or to obtain similar  coverage from similar insurers as may be necessary
to  continue  its  business  at a cost that  would not have a  Material  Adverse
Effect.

          v.  Internal  Accounting  Controls.   The  Company  and  each  of  its
Subsidiaries  maintain a system of internal accounting controls  sufficient,  in
the  judgment  of the  Company's  board  of  directors,  to  provide  reasonable
assurance that (i)  transactions  are executed in accordance  with  management's
general or specific authorizations,  (ii) transactions are recorded as necessary
to permit  preparation  of financial  statements  in conformity  with  generally
accepted  accounting  principles  and to maintain  asset  accountability,  (iii)
access to assets is permitted only in accordance  with  management's  general or
specific  authorization  and (iv) the  recorded  accountability  for  assets  is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.

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

          x.  Solvency.  The Company  (after giving  effect to the  transactions
contemplated by this Agreement) is solvent (i.e.,  its assets have a fair market
value in excess of the amount  required to pay its probable  liabilities  on its
existing  debts as they become  absolute and matured) and  currently the Company
has no  information  that would lead it to reasonably  conclude that the Company
would  not,  after  giving  effect  to  the  transaction  contemplated  by  this
Agreement, have the ability to, nor does it intend to take any action that would
impair its  ability to, pay its debts from time to time  incurred in  connection
therewith as such debts mature.  The Company did not receive a qualified opinion
from its  auditors  with respect to its most recent  fiscal year end and,  after
giving  effect to the  transactions  contemplated  by this  Agreement,  does not
anticipate or know of any basis upon which its auditors  might issue a qualified
opinion in respect of its current fiscal year.

          y. No  Investment  Company.  The Company is not, and upon the issuance
and sale of the  Securities as  contemplated  by this  Agreement  will not be an
"investment  company" required to be registered under the Investment Company Act
of  1940  (an  "Investment  Company").  The  Company  is  not  controlled  by an
Investment Company.

          z. Breach of  Representations  and  Warranties by the Company.  If the
Company  breaches any of the  representations  or  warranties  set forth in this
Section 3, and in addition to any other remedies available to the Buyer pursuant
to this  Agreement,  it will be considered an Event of default under Section 3.4
of the Note.

     4. COVENANTS.

          a. Best  Efforts.  The parties shall use their best efforts to satisfy
timely each of the conditions described in Section 6 and 7 of this Agreement.

                                       13
<PAGE>
          b. Form D; Blue Sky Laws.  Unless the Company  believes it exempt from
such filings, the Company agrees to file a Form D with respect to the Securities
as  required  under  Regulation  D and to  provide a copy  thereof  to the Buyer
promptly after such filing.  The Company  shall,  on or before the Closing Date,
take such action as the Company  shall  reasonably  determine  is  necessary  to
qualify the Securities for sale to the Buyer at the applicable  closing pursuant
to this Agreement under  applicable  securities or "blue sky" laws of the states
of the United States (or to obtain an exemption  from such  qualification),  and
shall  provide  evidence of any such action so taken to the Buyer on or prior to
the Closing Date.

          c. Use of  Proceeds.  The Company  shall use the  proceeds for general
working capital purposes.

          d. Right of First Refusal. Unless it shall have first delivered to the
Buyer,  at least  seventy  two (72) hours  prior to the  closing of such  Future
Offering (as defined  herein),  written notice  describing  the proposed  Future
Offering,  including the terms and  conditions  thereof and proposed  definitive
documentation  to be entered into in  connection  therewith,  and  providing the
Buyer an option  during the seventy two (72) hour period  following  delivery of
such notice to purchase the securities  being offered in the Future  Offering on
the same terms as contemplated by such Future Offering (the limitations referred
to in this sentence and the preceding  sentence are collectively  referred to as
the "Right of First Refusal") (and subject to the exceptions  described  below),
the Company will not conduct any equity financing (including debt with an equity
component) ("Future  Offerings") during the period beginning on the Closing Date
and ending twelve (12) months following the Closing Date. In the event the terms
and  conditions of a proposed  Future  Offering are amended in any respect after
delivery of the notice to the Buyer concerning the proposed Future Offering, the
Company shall deliver a new notice to the Buyer describing the amended terms and
conditions of the proposed Future Offering and the Buyer  thereafter  shall have
an option during the seventy two (72) hour period following delivery of such new
notice to purchase  its pro rata share of the  securities  being  offered on the
same terms as  contemplated by such proposed Future  Offering,  as amended.  The
foregoing  sentence  shall  apply to  successive  amendments  to the  terms  and
conditions of any proposed Future Offering. The Right of First Refusal shall not
apply  to any  transaction  involving  (i)  issuances  of  securities  in a firm
commitment   underwritten  public  offering  (excluding  a  continuous  offering
pursuant  to Rule 415 under the 1933 Act) or (ii)  issuances  of  securities  as
consideration  for  a  merger,  consolidation  or  purchase  of  assets,  or  in
connection with any strategic  partnership or joint venture (the primary purpose
of which is not to raise equity capital),  or in connection with the disposition
or  acquisition of a business,  product or license by the Company.  The Right of
First Refusal also shall not apply to the issuance of  securities  upon exercise
or conversion of the Company's options, warrants or other convertible securities
outstanding  as of the date  hereof or to the  grant of  additional  options  or
warrants,  or the issuance of  additional  securities,  under any Company  stock
option or restricted stock plan approved by the shareholders of the Company. The
Right of First refusal shall be limited to like transactions  (i.e.  convertible
debentures) that do not exceed $100,000.00 in the aggregate.

                                       14
<PAGE>
          e. Expenses.  At the Closing,  the Company shall  reimburse  Buyer for
expenses  incurred  by them in  connection  with the  negotiation,  preparation,
execution,  delivery and performance of this Agreement and the other  agreements
to  be  executed  in  connection  herewith  ("Documents"),   including,  without
limitation,  reasonable attorneys' and consultants' fees and expenses,  transfer
agent fees, fees for stock quotation  services,  fees relating to any amendments
or  modifications  of the  Documents or any consents or waivers of provisions in
the Documents, fees for the preparation of opinions of counsel, escrow fees, and
costs of  restructuring  the  transactions  contemplated by the Documents.  When
possible,  the Company must pay these fees directly,  otherwise the Company must
make immediate  payment for reimbursement to the Buyer for all fees and expenses
immediately  upon written notice by the Buyer or the submission of an invoice by
the Buyer.  The  Company's  obligation  with respect to this  transaction  is to
reimburse Buyer' expenses shall be $2,500.

          f. Financial  Information.  Upon written request the Company agrees to
send or make  available  the  following  reports  to the  Buyer  until the Buyer
transfers,  assigns,  or sells all of the  Securities:  (i) within ten (10) days
after the  filing  with the SEC,  a copy of its  Annual  Report on Form 10-K its
Quarterly  Reports on Form 10-Q and any Current Reports on Form 8-K; (ii) within
one (1) day after release, copies of all press releases issued by the Company or
any of its Subsidiaries;  and (iii)  contemporaneously with the making available
or giving to the  shareholders  of the  Company,  copies of any notices or other
information the Company makes available or gives to such shareholders.

          g. [INTENTIONALLY DELETED]

          h.  Listing.  The  Company  shall  promptly  secure the listing of the
Conversion Shares upon each national  securities exchange or automated quotation
system,  if any,  upon which shares of Common Stock are then listed  (subject to
official  notice  of  issuance)  and,  so  long  as the  Buyer  owns  any of the
Securities, shall maintain, so long as any other shares of Common Stock shall be
so listed, such listing of all Conversion Shares from time to time issuable upon
conversion  of the Note.  The Company will obtain and, so long as the Buyer owns
any of the  Securities,  maintain the listing and trading of its Common Stock on
the OTCQB or any equivalent  replacement  exchange,  the Nasdaq  National Market
("Nasdaq"),  the Nasdaq SmallCap Market ("Nasdaq SmallCap"),  the New York Stock
Exchange  ("NYSE"),  or the American Stock Exchange  ("AMEX") and will comply in
all respects with the Company's  reporting,  filing and other  obligations under
the bylaws or rules of the Financial Industry Regulatory Authority ("FINRA") and
such exchanges,  as applicable.  The Company shall promptly provide to the Buyer
copies of any  notices it  receives  from the OTCQB and any other  exchanges  or
quotation  systems  on which  the  Common  Stock is then  listed  regarding  the
continued  eligibility  of the Common  Stock for listing on such  exchanges  and
quotation systems.

          i. Corporate  Existence.  So long as the Buyer  beneficially  owns any
Note, the Company shall maintain its corporate  existence and shall not sell all
or substantially all of the Company's assets, except in the event of a merger or
consolidation or sale of all or substantially all of the Company's assets, where
the surviving or successor  entity in such transaction (i) assumes the Company's
obligations  hereunder and under the agreements and instruments  entered into in

                                       15
<PAGE>
connection herewith and (ii) is a publicly traded corporation whose Common Stock
is listed for trading on the OTCQB, Nasdaq, Nasdaq SmallCap, NYSE or AMEX.

          j. No  Integration.  The Company shall not make any offers or sales of
any security (other than the Securities) under  circumstances that would require
registration  of the Securities  being offered or sold hereunder  under the 1933
Act or cause the  offering of the  Securities  to be  integrated  with any other
offering  of  securities  by the  Company  for the  purpose  of any  stockholder
approval provision applicable to the Company or its securities.

          k. Breach of Covenants.  If the Company  breaches any of the covenants
set forth in this Section 4, and in addition to any other remedies  available to
the Buyer pursuant to this Agreement,  it will be considered an event of default
under Section 3.4 of the Note.

          l.  Failure  to  Comply  with  the  1934  Act.  So long  as the  Buyer
beneficially  owns the Note,  the  Company  shall  comply  with the  Section  13
reporting  requirements  of the 1934 Act; and the Company  shall  continue to be
subject to the reporting requirements of Section 13 of the 1934 Act.

          m. Trading  Activities.  Neither the Buyer nor its  affiliates  has an
open short  position in the common stock of the Company and the Buyer agree that
it shall not, and that it will cause its  affiliates not to, engage in any short
sales  of or  hedging  transactions  with  respect  to the  common  stock of the
Company.

     5.  Transfer  Agent  Instructions.  The  Company  shall  issue  irrevocable
instructions to its transfer agent to issue certificates, registered in the name
of the  Buyer or its  nominee,  for the  Conversion  Shares in such  amounts  as
specified  from time to time by the Buyer to the Company upon  conversion of the
Note in  accordance  with the terms  thereof (the  "Irrevocable  Transfer  Agent
Instructions").  In the event that the Borrower proposes to replace its transfer
agent,  the  Borrower  shall  provide,  prior  to the  effective  date  of  such
replacement,  a fully executed Irrevocable Transfer Agent Instructions in a form
as initially  delivered  pursuant to the Purchase  Agreement  (including but not
limited to the provision to  irrevocably  reserve  shares of Common Stock in the
Reserved  Amount)  signed by the  successor  transfer  agent to Borrower and the
Borrower.  Prior to registration of the Conversion  Shares under the 1933 Act or
the date on which the Conversion Shares may be sold pursuant to Rule 144 without
any  restriction as to the number of Securities as of a particular date that can
then be  immediately  sold,  all such  certificates  shall bear the  restrictive
legend  specified in Section 2(g) of this Agreement.  The Company warrants that:
(i) no  instruction  other  than the  Irrevocable  Transfer  Agent  Instructions
referred to in this Section 5, and stop transfer  instructions to give effect to
Section 2(f) hereof (in the case of the Conversion Shares, prior to registration
of the Conversion  Shares under the 1933 Act or the date on which the Conversion
Shares may be sold pursuant to Rule 144 without any restriction as to the number
of Securities as of a particular date that can then be immediately  sold),  will
be given by the  Company to its  transfer  agent and that the  Securities  shall
otherwise be freely  transferable on the books and records of the Company as and
to the extent  provided in this Agreement and the Note;  (ii) it will not direct
its transfer agent not to transfer or delay, impair,  and/or hinder its transfer
agent in transferring (or  issuing)(electronically  or in certificated form) any

                                       16
<PAGE>
certificate  for Conversion  Shares to be issued to the Buyer upon conversion of
or  otherwise  pursuant  to the Note as and when  required  by the Note and this
Agreement;  and (iii) it will not fail to remove (or directs its transfer  agent
not to remove or  impairs,  delays,  and/or  hinders  its  transfer  agent  from
removing) any restrictive legend (or to withdraw any stop transfer  instructions
in respect  thereof) on any certificate for any Conversion  Shares issued to the
Buyer upon conversion of or otherwise  pursuant to the Note as and when required
by the Note and this Agreement.  Nothing in this Section shall affect in any way
the Buyer's obligations and agreement set forth in Section 2(g) hereof to comply
with all applicable  prospectus delivery  requirements,  if any, upon re-sale of
the  Securities.  If the Buyer  provides the Company,  at the cost of the Buyer,
with (i) an  opinion  of  counsel in form,  substance  and scope  customary  for
opinions  in  comparable  transactions,  to the  effect  that a  public  sale or
transfer of such Securities may be made without  registration under the 1933 Act
and such sale or  transfer is  effected  or (ii) the Buyer  provides  reasonable
assurances  that the  Securities  can be sold  pursuant to Rule 144, the Company
shall permit the transfer,  and, in the case of the Conversion Shares,  promptly
instruct  its  transfer  agent  to issue  one or more  certificates,  free  from
restrictive  legend, in such name and in such  denominations as specified by the
Buyer. The Company acknowledges that a breach by it of its obligations hereunder
will cause irreparable harm to the Buyer, by vitiating the intent and purpose of
the transactions contemplated hereby. Accordingly, the Company acknowledges that
the remedy at law for a breach of its  obligations  under this  Section 5 may be
inadequate  and  agrees,  in the event of a breach or  threatened  breach by the
Company of the provisions of this Section,  that the Buyer shall be entitled, in
addition to all other  available  remedies,  to an  injunction  restraining  any
breach and  requiring  immediate  transfer,  without  the  necessity  of showing
economic loss and without any bond or other security being required.

     6.  Conditions to the Company's  Obligation to Sell.  The obligation of the
Company  hereunder  to issue  and sell the Note to the Buyer at the  Closing  is
subject  to the  satisfaction,  at or  before  the  Closing  Date of each of the
following  conditions  thereto,  provided  that  these  conditions  are  for the
Company's  sole benefit and may be waived by the Company at any time in its sole
discretion:

          a. The Buyer shall have executed this Agreement and delivered the same
to the Company.

          b. The Buyer shall have  delivered  the Purchase  Price in  accordance
with Section 1(b) above.

          c. The  representations  and warranties of the Buyer shall be true and
correct in all material  respects as of the date when made and as of the Closing
Date as though made at that time (except for representations and warranties that
speak as of a specific date), and the Buyer shall have performed,  satisfied and
complied in all material respects with the covenants,  agreements and conditions
required by this  Agreement to be  performed,  satisfied or complied with by the
Buyer at or prior to the Closing Date.

          d. No litigation, statute, rule, regulation,  executive order, decree,
ruling or injunction shall have been enacted,  entered,  promulgated or endorsed
by or in any court or  governmental  authority of competent  jurisdiction or any
self-regulatory  organization  having  authority  over the matters  contemplated

                                       17
<PAGE>
hereby which prohibits the consummation of any of the transactions  contemplated
by this Agreement.

     7. Conditions to The Buyer's Obligation to Purchase.  The obligation of the
Buyer  hereunder  to  purchase  the  Note  at  the  Closing  is  subject  to the
satisfaction, at or before the Closing Date of each of the following conditions,
provided  that these  conditions  are for the  Buyer's  sole  benefit and may be
waived by the Buyer at any time in its sole discretion:

          a. The Company shall have  executed  this  Agreement and delivered the
same to the Buyer.

          b. The Company  shall have  delivered  to the Buyer the duly  executed
Note (in such  denominations  as the Buyer  shall  request) in  accordance  with
Section 1(b) above.

          c. The Irrevocable Transfer Agent Instructions,  in form and substance
satisfactory to a  majority-in-interest  of the Buyer, shall have been delivered
to and acknowledged in writing by the Company's Transfer Agent.

          d. The representations and warranties of the Company shall be true and
correct in all material  respects as of the date when made and as of the Closing
Date as though made at such time (except for representations and warranties that
speak as of a specific date) and the Company shall have performed, satisfied and
complied in all material respects with the covenants,  agreements and conditions
required by this  Agreement to be  performed,  satisfied or complied with by the
Company  at or prior to the  Closing  Date.  The Buyer  shall  have  received  a
certificate  or  certificates,  executed by the chief  executive  officer of the
Company,  dated as of the Closing Date,  to the foregoing  effect and as to such
other matters as may be  reasonably  requested by the Buyer  including,  but not
limited  to   certificates   with  respect  to  the  Company's   Certificate  of
Incorporation,  By-laws  and Board of  Directors'  resolutions  relating  to the
transactions contemplated hereby.

          e. No litigation, statute, rule, regulation,  executive order, decree,
ruling or injunction shall have been enacted,  entered,  promulgated or endorsed
by or in any court or  governmental  authority of competent  jurisdiction or any
self-regulatory  organization  having  authority  over the matters  contemplated
hereby which prohibits the consummation of any of the transactions  contemplated
by this Agreement.

          f. No event shall have occurred which could  reasonably be expected to
have a Material  Adverse  Effect on the Company  including  but not limited to a
change in the 1934 Act  reporting  status of the  Company or the  failure of the
Company to be timely in its 1934 Act reporting obligations.

          g. The Conversion  Shares shall have been  authorized for quotation on
the OTCQB  and  trading  in the  Common  Stock on the OTCQB  shall not have been
suspended by the SEC or the OTCQB.

                                       18
<PAGE>
          h. The Buyer shall have received an officer's certificate described in
Section 3(c) above, dated as of the Closing Date.

     8. Governing Law; Miscellaneous.

          a. Governing Law. This Agreement shall be governed by and construed in
accordance  with the laws of the State of New York without  regard to principles
of  conflicts  of laws.  Any action  brought by either  party  against the other
concerning the transactions contemplated by this Agreement shall be brought only
in the state  courts of New York or in the federal  courts  located in the state
and county of Nassau. The parties to this Agreement hereby irrevocably waive any
objection to jurisdiction and venue of any action instituted hereunder and shall
not  assert any  defense  based on lack of  jurisdiction  or venue or based upon
FORUM NON CONVENIENS.  The Company and Buyer waive trial by jury. The prevailing
party  shall  be  entitled  to  recover  from the  other  party  its  reasonable
attorney's  fees and costs. In the event that any provision of this Agreement or
any other agreement delivered in connection herewith is invalid or unenforceable
under any applicable statute or rule of law, then such provision shall be deemed
inoperative  to the extent that it may  conflict  therewith  and shall be deemed
modified to conform with such statute or rule of law. Any such  provision  which
may prove invalid or  unenforceable  under any law shall not affect the validity
or  enforceability  of any other  provision of any agreement.  Each party hereby
irrevocably  waives  personal  service of process and consents to process  being
served in any suit,  action or proceeding in connection  with this  Agreement or
any other  Transaction  Document  by mailing a copy  thereof via  registered  or
certified  mail or overnight  delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this  Agreement and agrees that
such service shall constitute good and sufficient  service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way any right
to serve process in any other manner permitted by law.

          b.  Counterparts.  This  Agreement  may be  executed  in  one or  more
counterparts,  each of which shall be deemed an original  but all of which shall
constitute  one  and  the  same  agreement  and  shall  become   effective  when
counterparts have been signed by each party and delivered to the other party.

          c.  Headings.  The headings of this  Agreement are for  convenience of
reference only and shall not form part of, or affect the interpretation of, this
Agreement.

          d. Severability.  In the event that any provision of this Agreement is
invalid or unenforceable  under any applicable statute or rule of law, then such
provision  shall  be  deemed  inoperative  to the  extent  that it may  conflict
therewith  and shall be deemed  modified to conform with such statute or rule of
law. Any provision hereof which may prove invalid or unenforceable under any law
shall not affect the validity or enforceability of any other provision hereof.

          e. Entire  Agreement;  Amendments.  This Agreement and the instruments
referenced  herein contain the entire  understanding of the parties with respect

                                       19
<PAGE>
to the matters covered herein and therein and, except as specifically  set forth
herein or therein,  neither the Company nor the Buyer makes any  representation,
warranty,  covenant or undertaking with respect to such matters. No provision of
this  Agreement  may be waived or amended other than by an instrument in writing
signed by the majority in interest of the Buyer.

          f. Notices. All notices, demands, requests,  consents,  approvals, and
other  communications  required or permitted  hereunder shall be in writing and,
unless  otherwise  specified  herein,  shall  be  (i)  personally  served,  (ii)
deposited  in the mail,  registered  or  certified,  return  receipt  requested,
postage  prepaid,  (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other  address as such party shall have  specified
most recently by written notice. Any notice or other  communication  required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or  delivery  by  facsimile,   with  accurate  confirmation   generated  by  the
transmitting  facsimile  machine,  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 addresses for
such communications shall be:

    If to the Company, to:
        LIBERTY COAL ENERGY CORP.
        99-18TH Street - Suite 3000
        Denver, CO 80202
        Attn: ROBERT MALASEK, Chief Financial Officer facsimile:
        530-548-7369

    With a copy by fax only to (which copy shall not constitute notice):
        Raines Feldman, LLP
        Jason J Belice
        9720 Wilshire Boulevard, Fith Floor
        Beverly Hills, CA 90212
        Tel. 424-239-2521 Fax. 424-777-4149

     If to the Buyer:
        ASHER ENTERPRISES, INC.
        1 Linden Pl., Suite 207
        Great Neck, NY. 11021
        Attn: Curt Kramer, President
        facsimile: 516-498-9894

     With a copy by fax only to (which copy shall not constitute notice):

                                       20
<PAGE>
        Naidich Wurman Birnbaum & Maday LLP
        80 Cuttermill Road, Suite 410
        Great Neck, NY 11021
        Attn: Bernard S. Feldman, Esq.
        facsimile: 516-466-3555

     Each  party  shall  provide  notice  to the  other  party of any  change in
address.

          g.  Successors and Assigns.  This Agreement  shall be binding upon and
inure to the benefit of the parties and their  successors  and assigns.  Neither
the  Company  nor the  Buyer  shall  assign  this  Agreement  or any  rights  or
obligations   hereunder   without  the  prior  written  consent  of  the  other.
Notwithstanding the foregoing, subject to Section 2(f), the Buyer may assign its
rights  hereunder  to  any  person  that  purchases   Securities  in  a  private
transaction  from  the  Buyer  or to any of its  "affiliates,"  as that  term is
defined under the 1934 Act, without the consent of the Company.

          h. Third Party  Beneficiaries.  This  Agreement  is  intended  for the
benefit of the parties  hereto and their  respective  permitted  successors  and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.

          i. Survival. The representations and warranties of the Company and the
agreements and covenants set forth in this  Agreement  shall survive the closing
hereunder  notwithstanding  any due diligence  investigation  conducted by or on
behalf of the Buyer. The Company agrees to indemnify and hold harmless the Buyer
and all their  officers,  directors,  employees  and  agents  for loss or damage
arising as a result of or related to any breach or alleged breach by the Company
of any of its  representations,  warranties  and  covenants  set  forth  in this
Agreement  or  any  of its  covenants  and  obligations  under  this  Agreement,
including advancement of expenses as they are incurred.

          j.  Publicity.  The  Company,  and the Buyer  shall  have the right to
review a reasonable  period of time before issuance of any press releases,  SEC,
OTCQB or FINRA  filings,  or any other  public  statements  with  respect to the
transactions  contemplated hereby; provided,  however, that the Company shall be
entitled,  without the prior approval of the Buyer, to make any press release or
SEC, OTCQB (or other applicable trading market) or FINRA filings with respect to
such transactions as is required by applicable law and regulations (although the
Buyer  shall be  consulted  by the  Company  in  connection  with any such press
release  prior to its release and shall be provided  with a copy  thereof and be
given an opportunity to comment thereon).

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

                                       21
<PAGE>
          l. No Strict Construction. The language used in this Agreement will be
deemed to be the language  chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.

          m.  Remedies.  The  Company  acknowledges  that a breach  by it of its
obligations  hereunder will cause irreparable harm to the Buyer by vitiating the
intent and purpose of the  transaction  contemplated  hereby.  Accordingly,  the
Company  acknowledges  that the  remedy at law for a breach  of its  obligations
under this Agreement will be inadequate and agrees,  in the event of a breach or
threatened  breach by the Company of the provisions of this Agreement,  that the
Buyer shall be entitled,  in addition to all other available  remedies at law or
in equity, and in addition to the penalties  assessable herein, to an injunction
or  injunctions  restraining,  preventing or curing any breach of this Agreement
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.

     IN WITNESS WHEREOF,  the undersigned Buyer and the Company have caused this
Agreement to be duly executed as of the date first above written.

LIBERTY COAL ENERGY CORP.

By: /s/ Robert Malasek
   --------------------------------
   ROBERT MALASEK
   Chief Financial Officer

ASHER ENTERPRISES, INC.

By: /s/ Curt Kramer
   --------------------------------
   Name:  Curt Kramer
   Title: President
   1 Linden Pl., Suite 207
   Great Neck, NY   11021

AGGREGATE SUBSCRIPTION AMOUNT:

Aggregate Principal Amount of Note:                 $37,500.00

Aggregate Purchase Price:                           $37,500.00

2861(1) 9-13-12
rmalasek@gmail.com
egmorrow@earthlink.net
j.greig@catwalkcapital.com

                                       22Exhibit 10.5

                             ASHER CONVERTIBLE NOTE

Commencing on September 17, 2012 Liberty Coal Energy Corp. (the "Company")
entered into a transaction in which it issued five convertible promissory notes
("Asher Note") to Asher Enterprises, Inc. ("Asher") in consideration $37,500
loaned by Asher to the Company.

The Asher Note bears regular interest at a rate of 8% per annum, with a default
rate of 22% per annum. The Asher Notes are unsecured, due and payable on or
before June 19, 2013. At any time prior to the payment in full of the entire
balance of an Asher Note, Asher has the option of converting all or any portion
of the unpaid balance of the Asher Note into shares of the Company's common
stock at a conversion price discussed hereafter. Nevertheless, Asher is not
entitled to convert any portion of an Asher Note to the extent that the shares
to be issued in connection there with would cause Asher's beneficial ownership
of the Company's common stock to exceed 4.99% of the outstanding shares of the
Company's common stock. The conversion price for the Asher Note features a
"variable" conversion price. The variable conversion price is a percentage
discount from an average of the three lowest closing bid prices of the Company's
common stock for the 10 most recent trading days preceding the date of exercise.
The percentage discounts for the variable conversion prices provided for in the
Asher Note is 42%. Because of the operation of the floating conversion price and
the limitation on the ability of Asher to convert as described above, the
Company is unable to determine at any time that number of shares into which
Asher could convert one or more of the Asher Notes.

The Asher Note (and related documentation) contain customary representations and
warranties, customary affirmative and negative covenants, customary
anti-dilution provisions, and customary events of default that entitle Asher to
accelerate the due date of the unpaid principal amount of, and all accrued and
unpaid interest on, the Asher Note. A default on the Asher Note could lead to
certain penalties, including an obligation to (a) pay all of the following, plus
an additional 50% of (i) default interest, (ii) other monetary penalties, and
(iii) the outstanding balance on the related Asher Note, and (b) to issue shares
of the Company's common stock to satisfy the amount computed in accordance with
(a) immediately preceding.

                                    SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                      Liberty Coal Energy Corp.

Date: September 17, 2012             /s/ Robert T Malasek
                                     --------------------------------------
                                     Robert T Malasek,
                                     Chief Financial Officer & Treasurer

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