Document:

DRAWDOWN EQUITY FINANCING AGREEMENT

THIS AGREEMENT dated as of the day of March 28, 2010 (the "Agreement")
between Sunrise Energy Investments, Ltd., a Norway based
corporation (the "Investor"), and Amerilithium, Corp., a corporation
organized and existing under the laws of the state of Nevada (the
"Company").

WHEREAS, upon the terms and subject to the conditions contained herein,
the Company shall issue and sell to the Investor, from time to time as
provided herein, and the Investor shall purchase from the Company, up
to Ten Million  Dollars ($10,000,000) of the Company's common stock,
$0.001 par value per share (the "Common Stock"); and

WHEREAS, the purchase and sale of the Company's Common Stock by the
Investor will be made in reliance upon the provisions of Section 4(2)
under the Securities Act of 1933, as amended (the "1933 Act"),
Regulation S, and the rules and regulations promulgated thereunder,
and/or upon any other exemption from the registration requirements of
the 1933 Act as may be available with respect to any or all of the
investments in Common Stock to be made hereunder; and

NOW THEREFORE, in consideration of the foregoing recitals, which shall
be considered an integral part of this Agreement, the covenants and
agreements set forth hereafter, and other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company and the Investor hereby agree as follows:

ARTICLE I
Certain Definitions

Section 1.1.   "Advance" shall mean the portion of the Commitment
Amount requested by the Company in the Drawdown Notice.

Section 1.2.   "Advance Date" shall mean the first (1st) Trading Day
after expiration of the applicable Pricing Period for each Advance.

Section 1.3.   "Drawdown Notice" shall mean a written notice in the
form of Exhibit A attached hereto to the Investor executed by an
officer of the Company and setting forth the Advance amount that the
Company requests from the Investor.

Section 1.4.   "Drawdown Notice Date" shall mean each date the Company
delivers (in accordance with Section 2.2(b) of this Agreement) to the
Investor a Drawdown Notice requiring the Investor to advance funds to
the Company, subject to the terms of this Agreement.  No Drawdown
Notice Date shall be less than five (5) Trading Days after the prior
Drawdown Notice Date.

Section 1.5.   "Closing" shall mean one of the closings of a purchase
and sale of Common Stock pursuant to Section 2.3.

Section 1.6.   "Commitment Amount" shall mean the aggregate amount of
up to Ten Million Dollars ($10,000,000) which the Investor has agreed
to provide to the Company in order to purchase the Company's Common
Stock pursuant to the terms and conditions of this Agreement.

Section 1.7.   "Commitment Period" shall mean the period commencing on
the earlier to occur of (i) the Execution Date, or (ii) such earlier
date as the Company and the Investor may mutually agree in writing, and
expiring on the earliest to occur of (x) the date on which the Investor
shall have made payment of Advances pursuant to this Agreement in the
aggregate amount of the Commitment Amount, (y) the date this Agreement
is terminated pursuant to Section 10.2 or (z) the date occurring
thirty-six (36) months after the Execution Date.

Section 1.8.   "Common Stock" shall mean the Company's common stock,
$0.00001 par value per share.

Section 1.9.   "Condition Satisfaction Date" shall have the meaning set
forth in Section 7.2.

Section 1.10.   "Damages" shall mean any loss, claim, damage,
liability, costs and expenses (including, without limitation,
reasonable attorney's fees and disbursements and costs and expenses of
expert witnesses and investigation).

Section 1.11.   "Execution Date" shall mean the date indicated in the
preamble to this Agreement.

Section 1.12.   "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended, and the rules and regulations promulgated
thereunder.

Section 1.13.  "FINRA" shall mean the Financial Industry Regulatory
Authority.

Section 1.14.   "Floor" shall mean the Investor shall immediately cease
selling any shares within the Drawdown Notice if, and for such time as,
the price falls below a predetermined level ("Floor Price"). The Floor
Price is defined as  the price specified by the Company in the Drawdown
Notice or, if no such price is specified, seventy five percent (75%) of
the VWAP of the stock over the preceding five (5) trading days prior to
the Drawdown Notice Date. The "Floor" can be waived at the discretion
of the Company.

Section 1.15.   "Material Adverse Effect" shall mean any condition,
circumstance, or situation that would prohibit or otherwise materially
interfere with the ability of the Company to enter into and perform any
of its obligations under this Agreement in any material respect.

Section 1.16.   "Market Price" shall mean the lowest closing VWAP of
the Common Stock during the Pricing Period.

Section 1.17.   "Maximum Advance Amount" shall not exceed One Hundred
Fifty Thousand Dollars ($150,000) or two hundred (200%) percent of the
average daily volume based on the trailing ten (10) days preceding the
Drawdown Notice date, whichever is of a larger value.

Section 1.18.   "Person" shall mean an individual, a corporation, a
partnership, an association, a trust or other entity or organization,
including a government or political subdivision or an agency or
instrumentality thereof.

Section 1.19.   "Pricing Period" shall mean the five (5) consecutive
Trading Days after the Drawdown Notice Date.

Section 1.20.  "Principal Market" shall mean the Nasdaq National
Market, the Nasdaq Capital Market, the American Stock Exchange, the OTC
Bulletin Board, OTC Pink Sheets or the New York Stock Exchange,
whichever is at the time the principal trading exchange or market for
the Common Stock.

Section 1.21.   "Purchase Price" shall be set at ninety five percent
(95%) of the lowest closing VWAP of the common stock during the Pricing
Period.

Section 1.22.   "Registrable Securities" shall mean the shares of
Common Stock to be issued hereunder (i) in respect of which a
Registration Statement has not been declared effective by the SEC, (ii)
which have not been sold under circumstances meeting all of the
applicable conditions of Rule 144 (or any similar provision then in
force) under the Securities Act ("Rule 144") or (iii) which have not
been otherwise transferred to a holder who may trade such shares
without restriction under the Securities Act, and the Company has
delivered a new certificate or other evidence of ownership for such
securities not bearing a restrictive legend.

Section 1.23.   "Regulation D" shall have the meaning set forth in the
recitals of this Agreement.

Section 1.24.   "Regulation S" shall have the meaning set forth in the
recitals of this Agreement.

Section 1.25.   "SEC" shall mean the United States Securities and
Exchange Commission.

Section 1.26.  "Securities Act" shall have the meaning set forth in the
recitals of this Agreement.

Section 1.27.   "SEC Documents" shall mean Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and Proxy
Statements of the Company as supplemented to the date hereof, filed by
the Company for a period of at least twelve (12) months immediately
preceding the date hereof or the Advance Date, as the case may be.

Section 1.28.  "Trading Day" shall mean any day during which the New
York Stock Exchange shall be open for business.

Section 1.29.   "VWAP" shall mean, on any date, the volume-weighted
average price of the Common Stock for the past five trading days.

Section 1.30.   "Warrant" shall mean a warrant to purchase one common
share of the Company at the exercise price of 150% of the warrant issue
price.  The warrant issue price shall be the VWAP of the common stock
on the day of issuance.  The warrants shall be exercisable for a period
of three years.

                           ARTICLE II
                          Advances

Section 2.1.  Advances.

(a)   Subject to the terms and conditions of this Agreement (including,
without limitation, the provisions of Article VII hereof), the Company,
at its sole and exclusive option, may issue and sell to the Investor,
and the Investor shall purchase from the Company, shares of the
Company's Common Stock by the delivery, in the Company's sole
discretion, of Drawdown Notices.  The number of shares of Common Stock
that the Investor shall purchase pursuant to each Advance shall be
determined by dividing the amount of the Advance by the Purchase Price.
No fractional shares shall be issued.  Fractional shares shall be
rounded to the next higher whole number of shares.  The aggregate
maximum amount of all Advances that the Investor shall be obligated to
make under this Agreement shall not exceed the Commitment Amount.

(b)   For each share of the Company's Common Stock, the Investor shall
receive one Warrant.

(c)   The Investor shall immediately cease selling any shares within
the Drawdown Notice if the price falls below the Floor Price.  The
Company, in its sole and absolute discretion, may waive its right with
respect to the Floor and allow the Investor to sell any shares below
the Floor Price.

Section 2.2.   Mechanics.

(a)   Drawdown Notice.  At any time during the Commitment Period, the
Company may request the Investor to purchase shares of Common Stock by
delivering a Drawdown Notice to the Investor, subject to the conditions
set forth in Section 7.2; provided, however, the amount for each
Advance as designated by the Company in the applicable Drawdown Notice
shall not be more than the Maximum Advance Amount and the aggregate
amount of the Advances pursuant to this Agreement shall not exceed the
Commitment Amount.  The Company acknowledges that the Investor may sell
shares of the Company's Common Stock corresponding with a particular
Drawdown Notice after the Drawdown Notice is received by the
Investor.  There shall be a minimum of five (5) Trading Days between
each Drawdown Notice Date.

(b)  Date of Delivery of Drawdown Notice.  A Drawdown Notice shall be
deemed delivered on: (i) the Trading Day if such notice is received
prior to 5:00 pm Eastern Time; or (ii) the immediately succeeding
Trading Day if Drawdown Notice is received by facsimile or otherwise
after 5:00 pm Eastern Time on a Trading Day or at any time on a day
which is not a Trading Day.  No Drawdown Notice may be deemed delivered
on a day that is not a Trading Day or if positive receipt is not
acknowledged by the Investor, which receipt the Investor will send to
the Company promptly on receipt of the Drawdown Notice.

Section 2.3.   Closings.  On each Advance Date (i) the Company shall
deliver to the Investor such number of shares of the Common Stock
registered in the name of the Investor as shall equal (x) the amount of
the Advance specified in such Drawdown Notice pursuant to Section 2.1
herein, divided by (y) the Purchase Price and (ii) upon receipt of such
shares, the Investor shall deliver to the Company the amount of the
Advance specified in the Drawdown Notice by wire transfer of
immediately available funds.  In addition, on or prior to the Advance
Date, each of the Company and the Investor shall deliver to the other
all documents, instruments and writings required to be delivered by
either of them pursuant to this Agreement in order to implement and
effect the transactions contemplated herein.  To the extent the Company
has not paid the fees, expenses, and disbursements of the Investor in
accordance with Section 12.4, the amount of such fees, expenses, and
disbursements may be deducted by the Investor (and shall be paid to the
relevant party) directly out of the proceeds of the Advance with no
reduction in the amount of shares of the Company's Common Stock to be
delivered on such Advance Date.

(a)
Company's Obligations Upon Closing.

(i)  The Company shall use commercially reasonable efforts to deliver
to the Investor, through the use of a Deposit Withdrawal Agent
Commission system from a Deposit Trust Company method or commonly
referred to as "DWAC/DTC" of the Investor's choosing, the shares of
Common Stock applicable to the Advance in accordance with Section
2.3.  In the event that the Company or its transfer agent is not
participating in the DWAC system or is not eligible to participate, the
Company will endeavor to participate or become eligible to participate
within a reasonable time from the date hereof.  Notwithstanding, the
Investor will accept physical certificates representing the Company's
Common Stock applicable to any Advance in the event DWAC/DTC is not
available.  Any such certificates shall be free of restrictive
legends.  Upon receipt, Investor will perform a wire transfer on the
same business day provided that the shares have been received in
sufficient time to perform such transfer.  In the event that the
Investor is no longer able, due to time constraints beyond his control,
to perform a wire on the day of receipt, the wire will be promptly
executed the following business day.

 (ii)   the Company shall have obtained all material permits and
qualifications required by any applicable state for the offer and sale
of the Registrable Securities, or shall have the availability of
exemptions therefrom.  The sale and issuance of the Registrable
Securities shall be legally permitted by all laws and regulations to
which the Company is subject;

(iii)   the Company shall have filed with the SEC in a timely manner
all reports, notices and other documents required of a "reporting
company" under the Exchange Act and applicable Commission regulations;

(iv)   the fees as set forth in Section 12.4 below shall have been paid
or can be withheld as provided in Section 2.3; and

	(b)  Investor's Obligations Upon Closing.   Upon receipt of the
shares referenced in Section 2.3(a)(i) above and provided the Company
is in compliance with its obligations in Section 2.3, the Investor
shall deliver to the Company the amount of the Advance specified in the
Drawdown Notice by wire transfer of immediately available funds.

Section 2.4.  Hardship.  In the event the Investor sells shares of the
Company's Common Stock after receipt of an Drawdown Notice and the
Company fails to perform its obligations as mandated in Section 2.3,
and specifically the Company fails to deliver to the Investor on the
Advance Date the shares of Common Stock corresponding to the applicable
Advance pursuant to Section 2.3(a)(i), the Company acknowledges that
the Investor shall suffer financial hardship and therefore shall be
liable for any and all losses, commissions, fees, interest, legal fees
or any other financial hardship caused to the Investor.

The Company understands that a delay in the delivery of the securities
in the form required pursuant to this Agreement beyond the Closing
could result in economic loss to the Investor.  After the Execution
Date, as compensation to the Investor for late issuance of such shares
(delivery of securities after the applicable closing), the Company
agrees to make payments to the Investor in accordance with the schedule
below where the number of days overdue is defined as the number of
business days beyond the close with amount due being cumulative.

The Company shall pay any payments incurred under this Section in
immediately available funds upon demand.  Nothing herein shall limit
the right of the Investor to pursue damages for the Company's failure
to comply with the issuance and delivery of securities to the Investor.

Payments for Each Number of Days Overdue $10,000 Worth of Common Stock

1 $100
2 $200
3 $300
4 $400
5 $500
6 $600
7 $700
8 $800
9 $900
10 $1000
Over 10 $1000 + $200 for each Business Day beyond the tenth day

                           ARTICLE III
            Representations and Warranties of Investor

Investor hereby represents and warrants to, and agrees with, the
Company that the following are true and correct as of the date hereof
and as of each Advance Date:

Section 3.1.  Organization and Authorization.  The Investor is duly
incorporated or organized and validly existing in the jurisdiction of
its incorporation or organization and has all requisite power and
authority to purchase and hold the securities issuable hereunder.  The
decision to invest and the execution and delivery of this Agreement by
such Investor, the performance by such Investor of its obligations
hereunder and the consummation by such Investor of the transactions
contemplated hereby have been duly authorized and requires no other
proceedings on the part of the Investor.  The undersigned has the
right, power and authority to execute and deliver this Agreement and
all other instruments, on behalf of the Investor.  This Agreement has
been duly executed and delivered by the Investor and, assuming the
execution and delivery hereof and acceptance thereof by the Company,
will constitute the legal, valid and binding obligations of the
Investor, enforceable against the Investor in accordance with its
terms.

Section 3.2.  Evaluation of Risks.  The Investor has such knowledge and
experience in financial, tax and business matters as to be capable of
evaluating the merits and risks of, and bearing the economic risks
entailed by, an investment in the Company and of protecting its
interests in connection with this transaction.  It recognizes that its
investment in the Company involves a high degree of risk.

Section 3.3.  No Legal Advice From the Company.  The Investor
acknowledges that it had the opportunity to review this Agreement and
the transactions contemplated by this Agreement with his or its own
legal counsel and investment and tax advisors.  The Investor is relying
solely on such counsel and advisors and not on any statements or
representations of the Company or any of its representatives or agents
for legal, tax or investment advice with respect to this investment,
the transactions contemplated by this Agreement or the securities laws
of any jurisdiction.

Section 3.4.  Investment Purpose. The securities are being purchased by
the Investor for its own account, and for investment purposes.   Any
resale or other disposition of the Common Stock will be solely in
accordance with the registration provisions of the Securities Act or
pursuant to an exemption from such registration provisions. The
Investor is an "Accredited Investor" as that term is defined in Rule
501(a)(3) of Regulation D of the Securities Act.

Section 3.5.  Information.  The Investor and its advisors (and its
counsel), if any, have been furnished with all materials relating to
the business, finances and operations of the Company and information it
deemed material to making an informed investment decision.  The
Investor and its advisors, if any, have been afforded the opportunity
to ask questions of the Company and its management.  Neither such
inquiries nor any other due diligence investigations conducted by such
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.  The
Investor understands that its investment involves a high degree of
risk.  The Investor is in a position regarding the Company, which,
based upon employment, family relationship or economic bargaining
power, enabled and enables such Investor to obtain information from the
Company in order to evaluate the merits and risks of this
investment.  The Investor has sought such accounting, legal and tax
advice, as it has considered necessary to make an informed investment
decision with respect to this transaction.

Section 3.6.  Receipt of Documents. The Investor and its counsel have
received and read in their entirety:  (i) this Agreement and the
Exhibits annexed hereto; (ii) all due diligence and other information
necessary to verify the accuracy and completeness of such
representations, warranties and covenants; and (iii) answers to all
questions the Investor submitted to the Company regarding an investment
in the Company; and the Investor has relied on the information
contained therein and has not been furnished any other documents,
literature, memorandum or prospectus.

Section 3.7.  Not an Affiliate.  The Investor is not an officer,
director or a person that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common
control with the Company or any "Affiliate" of the Company (as that
term is defined in Rule 405 of the Securities Act).

Section 3.8.  Trading Activities.  The Investor's trading activities
with respect to the Company's Common Stock shall be in compliance with
all applicable federal and state securities laws, rules and regulations
and the rules and regulations of the Principal Market on which the
Company's Common Stock is listed or traded and Investor will comply
with any requests that the SEC makes in connection with the Filing of
the Registration Agreement to ensure such compliance. Neither the
Investor nor its affiliates has an open short position in the Common
Stock of the Company, the Investor agrees 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, provided that
the Company acknowledges and agrees that upon receipt of an Drawdown
Notice the Investor has the right to sell the shares to be issued to
the Investor pursuant to the Drawdown Notice during the applicable
Pricing Period.  At the request of the Company, the Investor will
provide the Company with periodic reports no less often than bi-monthly
that reflects all of its trading activity during the period as well as
the current location, accounts and status of all shares of Common Stock
delivered to Investor.

Section 3.9.  No Registration as a Dealer.  The Investor is not and
will not be required to be registered as a "dealer" under the 1934 Act,
either as a result of its execution and performance of its obligations
under this Agreement or otherwise.

Section 3.10.  Good Standing.  The Investor is an entity, duly
organized, validly existing and in good standing under the laws of its
state of formation and any jurisdiction in which it is conducting
business.

                           ARTICLE IV
              Representations and Warranties of the Company

Except as stated below, on the disclosure schedules attached hereto or
in the SEC Documents (as defined herein), the Company hereby represents
and warrants to, and covenants with, the Investor that the following
are true and correct as of the date hereof:

Section 4.1.  Organization and Qualification.  The Company is duly
incorporated or organized and validly existing in the jurisdiction of
its incorporation or organization and has all requisite corporate power
to own its properties and to carry on its business as now being
conducted.  The Company 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 by it makes such qualification

necessary, except to the extent that the failure to be so qualified or
be in good standing would not have a Material Adverse Effect on The
Company taken as a whole.

Section 4.2.  Authorization, Enforcement, Compliance with Other
Instruments.  (i) The Company has the requisite corporate power and
authority to enter into and perform this Agreement and any related
agreements, in accordance with the terms hereof and thereof, (ii) the
execution and delivery of this Agreement and any related agreements by
the Company and the consummation by it of the transactions contemplated
hereby and thereby, have been duly authorized by the Company's Board of
Directors and no further consent or authorization is required by the
Company, its Board of Directors or its stockholders, (iii) this
Agreement and any related agreements have been duly executed and
delivered by the Company, (iv) this Agreement and assuming the
execution and delivery thereof and acceptance by the Investor and any
related agreements constitute the valid and binding obligations of the
Company enforceable against the Company in accordance with their terms,
except as such enforceability may be limited by general principles of
equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting
generally, the enforcement of creditors' rights and remedies.

Section 4.2.2.  Capitalization.  The authorized capital stock of the
Company consists of common stock, $0.001 par value per share:
150,000,000 authorized; 53,100,000 shares issued and outstanding for
March 15, 2010.   All of such outstanding shares have been validly
issued and are fully paid and nonassessable.  Except as disclosed in
the SEC Documents, no shares of Common Stock are subject to preemptive
rights or any other similar rights or any liens or encumbrances
suffered or permitted by the Company.   Except as disclosed in the SEC
Documents, or as set forth on Exhibit 4.2 attached hereto, as of the
date hereof, (i) there are no outstanding options, warrants, scrip,
rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into, any
shares of capital stock of the Company or any of its subsidiaries, or
contracts, commitments, understandings or arrangements by which the
Company or any of its subsidiaries is or may become bound to issue
additional shares of capital stock of the Company or any of its
subsidiaries or options, warrants, scrip, rights to subscribe to, calls
or commitments of any character whatsoever relating to, or securities
or rights convertible into, any shares of capital stock of the Company
or any of its subsidiaries, (ii) there are no outstanding debt
securities (iii) there are no outstanding registration statements and
(iv) there are no agreements or arrangements under which the Company is
obligated to register the sale of any of its securities under the
Securities Act.  There are no securities or instruments containing
anti-dilution or similar provisions that will be triggered by this
Agreement or any related agreement or the consummation of the
transactions described herein or therein.  The Company has furnished to
the Investor true and correct copies of the Company's Certificate of
Incorporation, as amended and as in effect on the date hereof (the
"Certificate of Incorporation"), and 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 and the
material rights of the holders thereof in respect thereto.

Section 4.3.  No Conflict.  The execution, delivery and performance of
this Agreement by the Company and the consummation by the Company of
the transactions contemplated hereby will not (i) result in a violation
of the Certificate of Incorporation, any certificate of designations of
any outstanding series of preferred stock of the Company or By-laws or
(ii) conflict with or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give
to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the
Company or any of its subsidiaries is a party, or result in a violation
of any law, rule, regulation, order, judgment or decree (including
federal and state securities laws and regulations and the rules and
regulations of the Principal Market on which the Common Stock is
quoted) applicable to the Company or any of its subsidiaries or by
which any material property or asset of the Company or any of its
subsidiaries is bound or affected and which would cause a Material
Adverse Effect.  Except as disclosed in the SEC Documents, neither the
Company nor its subsidiaries is in violation of any term of or in
default under its Articles of Incorporation or By-laws or their
organizational charter or by-laws, respectively, or any material
contract, agreement, mortgage, indebtedness, indenture, instrument,
judgment, decree or order or any statute, rule or regulation applicable
to the Company or its subsidiaries.  The business of the Company is not
being conducted in violation of any material law, ordinance, regulation
of any governmental entity.  Except as specifically contemplated by
this Agreement and as required under the Securities 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 or governmental agency in order for it to
execute, deliver or perform any of its obligations under or
contemplated by this Agreement in accordance with the terms hereof or
thereof.  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 unaware of any fact or circumstance which
might give rise to any of the foregoing.

Section 4.4.  SEC Documents; Financial Statements.   As of the date
hereof, the Company has filed all reports, schedules, forms, statements
and other documents required to be filed by it with the SEC pursuant to
the reporting requirements of the 1934 Act.    As of their respective
dates, to the Company's knowledge, the financial statements of the
Company disclosed in the SEC Documents (the "Financial Statements")
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 generally accepted accounting principles, consistently
applied, during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto, or (ii) in
the case of unaudited interim statements, to the extent they may
exclude footnotes or may be condensed or summary statements) and,
fairly present in all material respects the financial position of the
Company as of the dates thereof and the results of its operations and
cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments).  No other
information provided by or on behalf of the Company to the Investor
which is not included in the SEC Documents contains any untrue
statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

Section 4.5.  No Default.  Except as disclosed in Exhibit 4.5, the
Company is not in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust or other material instrument or
agreement to which it is a party or by which it is or its property is
bound and neither the execution, nor the delivery by the Company, nor
the performance by the Company of its obligations under this Agreement
or any of the exhibits or attachments hereto will conflict with or
result in the breach or violation of any of the terms or provisions of,
or constitute a default or result in the creation or imposition of any
lien or charge on any assets or properties of the Company under its
Certificate of Incorporation, By-Laws, any material indenture,
mortgage, deed of trust or other material agreement applicable to the
Company or instrument to which the Company is a party or by which it is
bound, or any statute, or any decree, judgment, order, rules or
regulation of any court or governmental agency or body having
jurisdiction over the Company or its properties, in each case which
default, lien or charge is likely to cause a Material Adverse Effect on
the Company's business or financial condition.

Section 4.6.  Absence of Events of Default.  Except for matters
described in Exhibit 4.6 and/or this Agreement, no Event of Default, as
defined in the respective agreement to which the Company is a party,
and no event which, with the giving of notice or the passage of time or
both, would become an Event of Default (as so defined), has occurred
and is continuing, which would have a Material Adverse Effect on the
Company's business, properties, prospects, financial condition or
results of operations.

Section 4.7.  Intellectual Property Rights.  The Company own or possess
adequate rights or licenses to use all material trademarks, trade
names, service marks, service mark registrations, service names,
patents, patent rights, copyrights, inventions, licenses, approvals,
governmental authorizations, trade secrets and rights necessary to
conduct their respective businesses as now conducted.   The Company do
not have any knowledge of any infringement by the Company or its
subsidiaries of trademark, trade name rights, patents, patent rights,
copyrights, inventions, licenses, service names, service marks, service
mark registrations, trade secret or other similar rights of others,
and, to the knowledge of the Company, there is no claim, action or
proceeding being made or brought against, or to the Company's
knowledge, being threatened against, the Company or its subsidiaries
regarding trademark, trade name, patents, patent rights, invention,
copyright, license, service names, service marks, service mark
registrations, trade secret or other infringement; and The Company are
unaware of any facts or circumstances which might give rise to any of
the foregoing.

Section 4.8.  Employee Relations.   The Company is involved in any
labor dispute nor, to the knowledge of the Company is any such dispute
threatened.  None of the Company's employees is a member of a union and
the Company believes that its relations with their employees are good.

Section 4.9.  Environmental Laws.  The Company is (i) in compliance
with any and all applicable material foreign, federal, state and local
laws and regulations relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (ii) have received
all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses,
except where failure to comply would not have a Material Effect on the
business, properties, operations, financial condition, results of
operations or prospects of the Company taken as a whole, and (iii) are
in compliance with all terms and conditions of any such permit, license
or approval.

Section 4.10.  Title.  Except as set forth in Exhibit 4.10, the Company
has good and marketable title to its properties and material assets
owned by it, free and clear of any pledge, lien, security interest,
encumbrance, claim or equitable interest other than such as are not
material to the business of the Company.  Any real property and
facilities held under lease by the Company 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.

Section 4.11.  Insurance.  The Company is 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 are engaged.  The
Company has not been refused any insurance coverage sought or applied
for and the Company does not have any reason to believe that it will
not be able 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
materially and adversely affect the condition, financial or otherwise,
or the earnings, business or operations of the Company.

Section 4.12.  Regulatory Permits.  The Company possess all material
certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct
their respective businesses, except where failure to comply would not
have a Material Effect on the business, properties, operations,
financial condition, results of operations or prospects of the Company
or its subsidiaries, and neither the Company nor any such subsidiary
has received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit.

Section 4.13.  Internal Accounting Controls.  The Company and each of
its subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with 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. Representation by the company relating to internal
controls will be made on the Execution Date.

Section 4.14.  No Material Adverse Breaches, etc.  Except as set forth
in Exhibit 4.14, 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 judgment of
the Company's officers has or is expected in the future to have a
Material Adverse Effect on the business, properties, operations,
financial condition, results of operations or prospects of the Company
or its subsidiaries.  Except as set forth in the SEC Documents, neither
the Company nor any of its subsidiaries is in breach of any contract or
agreement which breach, in the judgment of the Company's officers, has
or is expected to have a Material Adverse Effect on the business,
properties, operations, financial condition, results of operations or
prospects of the Company or its subsidiaries taken as a whole.

Section 4.15.  Absence of Litigation.  Except as set forth in Exhibit
4.15 , there is no action, suit, proceeding, inquiry or investigation
before or by any court, public board, government agency, self-
regulatory organization or body pending against or affecting the
Company or the Common Stock, wherein an unfavorable decision, ruling or
finding would (i) have a Material Adverse Effect on the transactions
contemplated hereby (ii) adversely affect the validity or
enforceability of, or the authority or ability of the Company to
perform its obligations under, this Agreement or any of the documents
contemplated herein, or (iii) except as expressly disclosed in the SEC
Documents, have a Material Adverse Effect on the business, operations,
properties, financial condition or results of operation of The Company
taken as a whole.

Section 4.16.  Subsidiaries.  Except as disclosed in Exhibit 4.16, the
Company does not presently own or control, directly or indirectly, any
interest in any other corporation, partnership, association or other
business entity.

Section 4.17.  Tax Status.  Except as disclosed in Exhibit 4.17, the
Company has made or filed all federal and state income and all other
tax returns, reports and declarations required by any jurisdiction to
which it is subject and (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)
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 provision reasonably adequate for the
payment of all taxes for periods subsequent to the periods to which
such returns, reports or declarations apply.  There are no unpaid taxes
in any material amount claimed to be due by the taxing authority of any
jurisdiction, and the officers of the Company know of no basis for any
such claim.

Section 4.18.  Certain Transactions.  Except as set forth in Exhibit
4.18 none of the officers, directors, or employees of the Company is
presently a party to any transaction with the Company (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.

Section 4.19.  Fees and Rights of First Refusal.  The Company is not
obligated to offer the securities offered hereunder on a right of first
refusal basis or otherwise to any third parties including, but not
limited to, current or former shareholders of the Company,
underwriters, brokers, agents or other third parties.

Section 4.20.  Use of Proceeds.  The Company shall use the net proceeds
from this offering for general corporate purposes, including, without
limitation, the payment of loans incurred by the Company, including
loans owed to officers, directors and/or affiliates of the
Company.  However, in no event shall the Company use the net proceeds
from this offering for the payment (or loan to any such person for the
payment) of any judgment, or other liability, incurred by any executive
officer, officer, director or employee of the Company, except for any
liability owed to such person for services rendered, or if any judgment
or other liability is incurred by such person originating from services
rendered to the Company, or the Company has indemnified such person
from liability.

Section 4.21.  Further Representation and Warranties of the
Company.  For so long as any securities issuable hereunder held by the
Investor remain outstanding, the Company acknowledges, represents,
warrants and agrees that it will maintain the listing of its Common
Stock on the Principal Market.

Section 4.22.  Opinion of Counsel.  The Company will obtain for the
Investor, at the Company's expense, any and all opinions of counsel
which may be reasonably required in order to sell the securities
issuable hereunder without restriction.

Section 4.23.  Dilution.  The Company is aware and acknowledges that
issuance of shares of the Company's Common Stock could cause dilution
to existing shareholders and could significantly increase the
outstanding number of shares of Common Stock.

Section 4.24.  No General Solicitation.  Neither the Company, nor any
of its 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 under the Securities Act) in
connection with the offer or sale of the shares of Common Stock offered
hereby.

                         ARTICLE V
                      Indemnification

The Investor and the Company represent to the other the following with
respect to itself:

Section 5.1.  Indemnification.

	(a) In consideration of the Investor's execution and delivery of
this Agreement, and in addition to all of the Company's other
obligations under this Agreement, the Company shall defend, protect,
indemnify and hold harmless the Investor, and all of its officers,
directors, partners, employees and agents (including, without
limitation, those retained in connection with the transactions
contemplated by this Agreement) (collectively, the "Investor
Indemnitees") from and against any and all actions, causes of action,
suits, claims, losses, costs, penalties, fees, liabilities and damages,
and expenses in connection therewith, and including reasonable
attorneys' fees and disbursements (the "Indemnified Liabilities"),
incurred by the Investor Indemnitees or any of them as a result of, or
arising out of, or relating to (a) any misrepresentation or breach of
any representation or warranty made by the Company in this Agreement or
any other certificate, instrument or document contemplated hereby or
thereby, (b) any breach of any covenant, agreement or obligation of the
Company contained in this Agreement or any other certificate,
instrument or document contemplated hereby or thereby, or (c) any cause
of action, suit or claim brought or made against such Investor
Indemnitee not arising out of any action or inaction of an Investor
Indemnitee, and arising out of or resulting from the execution,
delivery, performance or enforcement of this Agreement or any other
instrument, document or agreement executed pursuant hereto by any of
the Investor Indemnitees.  To the extent that the foregoing undertaking
by the Company may be unenforceable for any reason, the Company shall
make the maximum contribution to the payment and satisfaction of each
of the Indemnified Liabilities, which is permissible under applicable
law.

	 (b) In consideration of the Company's execution and delivery of
this Agreement, and in addition to all of the Investor's other
obligations under this Agreement, the Investor shall defend, protect,
indemnify and hold harmless the Company and all of its officers,
directors, shareholders, employees and agents (including, without
limitation, those retained in connection with the transactions
contemplated by this Agreement) (collectively, the "Company
Indemnitees") from and against any and all Indemnified Liabilities
incurred by the Company Indemnitees or any of them as a result of, or
arising out of, or relating to (a) any misrepresentation or breach of
any representation or warranty made by the Investor in this Agreement
or any instrument or document contemplated hereby or thereby executed
by the Investor, (b) any breach of any covenant, agreement or
obligation of the Investor(s) contained in this Agreement or any other
certificate, instrument or document contemplated hereby or thereby
executed by the Investor, or (c) any cause of action, suit or claim
brought or made against such Company Indemnitee based
on  misrepresentations or due to a  breach by the Investor and arising
out of or resulting from the execution, delivery, performance or
enforcement of this Agreement or any other instrument, document or
agreement executed pursuant hereto by any of the Company
Indemnitees.  To the extent that the foregoing undertaking by the
Investor may be unenforceable for any reason, the Investor shall make
the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities, which is permissible under applicable law.

	(c) The obligations of the parties to indemnify or make
contribution under this Section 5.1 shall survive termination.

                           ARTICLE VI
                     Covenants of the Company

Section 6.1.  Registration S.  The Company shall deliver instructions
to its transfer agent to issue Common Stock to the Investor pursuant to
the rules and regulations of Regulation S.

Offshore resales under Regulation S are set out in Rule 904.  Rule 904
states that "an offer or sale of securities by any person other than
the issuer, a distributor, any of their respective affiliates (except
any officer or director who is an affiliate solely by virtue of holding
such position), or any person acting on behalf of any of the foregoing,
shall be deemed to occur outside the United States within the meaning
of Rule 901 if:

-  The offer or sale are made in an offshore transaction;
-  No directed selling efforts are made in the United States by
the seller, an affiliate, or any person acting on their behalf;
and . . .

Resale limitations on securities sold under Regulation S are outlined
in Rule 905 of Regulation S.  Rule 905 states "Equity securities of
domestic issuers acquired from the issuer, a distributor, or any of
their respective affiliates in a transaction subject to the conditions
of Rule 901 or Rule 903 are deemed to be "restricted securities" as
defined in Rule 144.   Resales of any of such restricted securities by
the offshore purchaser must be made in accordance with Regulation S or
the registration requirements of the Act or an exemption therefrom.

Section 6.2.  Listing of Common Stock.  The Company shall maintain the
Common Stock's authorization for quotation on the Principal Market.

Section 6.3.  Exchange Act Registration.  The Company will cause its
Common Stock to continue to be registered under Section 12(g) of the
Exchange Act, will file in a timely manner all reports and other
documents required of it as a reporting company under the Exchange Act
and will not take any action or file any document (whether or not
permitted by Exchange Act or the rules thereunder) to terminate or
suspend such registration or to terminate or suspend its reporting and
filing obligations under said Exchange Act.

Section 6.4.  Transfer Agent Instructions.  The Company shall deliver
instructions to its transfer agent to issue shares of Common Stock
pursuant to Regulation S to the Investor on or before each Advance
Date.

Section 6.5.  Corporate Existence.  The Company will take all steps
necessary to preserve and continue the corporate existence of the
Company.

Section 6.6.  Notice of Certain Events Affecting Suspension of Right to
Make an Advance.  The Company will immediately notify the Investor upon
its becoming aware of the occurrence of any of the following events:
(i) receipt of any request for additional information by the SEC or any
other Federal or state governmental authority, and (ii) receipt of any
notification with respect to the suspension of the qualification or
exemption from qualification of any of the Registrable Securities for
sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose. The Company shall not deliver to the
Investor any Drawdown Notice during the continuation of any of the
foregoing events.

Section 6.7.  Restriction on Sale of Capital Stock.  During the
Commitment Period, the Company shall not, without the prior written
consent of the Investor, (i) except on exercise of  the type of
instruments referred to in (ii) of this subsection, below, issue or
sell any Common Stock without consideration or for a consideration per
share less than 95% of the VWAP of the Common Stock determined
immediately prior to its issuance, (ii) issue or sell any
preferred stock, warrant, option, right, contract, call, or other
security or instrument granting the holder thereof the right to acquire
Common Stock without consideration or for a consideration per share
less than the 95% of the Common Stock determined immediately prior to
the issuance of such security or instrument. Consent will not be
unreasonably withheld.

Section 6.8.  Consolidation; Merger.  The Company shall not, at any
time after the date hereof, effect any merger or consolidation of the
Company with or into, or a transfer of all or substantially all the
assets of the Company to another entity (a "Consolidation Event")
unless the resulting successor or acquiring entity (if not the Company)
assumes by written instrument the obligation to deliver to the Investor
such shares of stock and/or securities as the Investor is entitled to
receive pursuant to this Agreement.

Section 6.9.  Issuance of the Company's Common Stock.  The sale of the
shares of Common Stock shall be made in accordance with the provisions
and requirements of Regulation D and any applicable state securities
law.

Section 6.10.  Review of Public Disclosures.  All SEC filings
(including, without limitation, all filings required under the Exchange
Act, which include Forms 10-Q and 10-QSB, 10-K and 10K-SB, 8-K, etc)
and other public disclosures made by the Company, including, without
limitation, all press releases, investor relations materials, and
scripts of analysts meetings and calls, shall be reviewed and approved
for release by the Company's attorneys and, if containing financial
information, the Company's independent certified public accountants.

Section 6.11.  Market Activities.  The Company will not, directly or
indirectly, (i) take any action designed to cause or result in, or that
constitutes or might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Common Stock or (ii)
sell, bid for or purchase the Common Stock, or pay anyone any
compensation for soliciting purchases of the Common Stock.

                            ARTICLE VII
         Conditions for Advance and Conditions to Closing

Section 7.1.  Conditions Precedent to the Obligations of the
Company.  The obligation hereunder of the Company to issue and sell the
shares of Common Stock to the Investor incident to each Closing is
subject to the satisfaction, or waiver by the Company, at or before
each such Closing, of each of the conditions set forth below.

	(a) Accuracy of the Investor's Representations and
Warranties.  The representations and warranties of the Investor shall
be true and correct in all material respects.

	(b) Performance by the Investor.  The Investor shall have
performed, satisfied and complied in all respects with all covenants,
agreements and conditions required by this Agreement to be performed,
satisfied or complied with by the Investor at or prior to such Closing.

Section 7.2.  Conditions Precedent to the Right of the Company to
Deliver a Drawdown Notice.  The right of the Company to deliver an
Drawdown Notice is subject to the fulfillment by the Company, on such
Drawdown Notice (a "Condition Satisfaction Date"), of each of the
following conditions:

	(a) Authority.  The Company shall have obtained all permits and
qualifications required by any applicable state in accordance for the
offer and sale of the shares of Common Stock, or shall have the
availability of exemptions therefrom.  The sale and issuance of the
shares of Common Stock shall be legally permitted by all laws and
regulations to which the Company is subject.

	(b) Performance by the Company.  The Company shall have
performed, satisfied and complied in all material respects with all
covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by the Company at or prior to
each Condition Satisfaction Date.

	(c) No Injunction.  No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of
competent jurisdiction that prohibits or directly and adversely affects
any of the transactions contemplated by this Agreement, and no
proceeding shall have been commenced that may have the effect of
prohibiting or adversely affecting any of the transactions contemplated
by this Agreement.

	(d) No Suspension of Trading in or Delisting of Common
Stock.  The trading of the Common Stock is not suspended by the SEC or
the Principal Market (if the Common Stock is traded on a Principal
Market).  The issuance of shares of Common Stock with respect to the
applicable Closing, if any, shall not violate the shareholder approval
requirements of the Principal Market (if the Common Stock is traded on
a Principal Market).  The Company shall not have received any notice
threatening the continued listing of the Common Stock on the Principal
Market (if the Common Stock is traded on a Principal Market).

	(e) Maximum Advance Amount.  The amount of an Advance requested
by the Company shall not exceed the Maximum Advance Amount.  In
addition, in no event shall the number of shares issuable to the
Investor pursuant to an Advance cause the aggregate number of shares of
Common Stock beneficially owned by the Investor and its affiliates to
exceed nine and 9/10 percent (9.9%) of the then outstanding Common
Stock of the Company.  For the purposes of this section beneficial
ownership shall be calculated in accordance with Section 13(d) of the
Exchange Act.

 	(f) Executed Drawdown Notice.  The Investor shall have received
the Drawdown Notice executed by an officer of the Company and the
representations contained in such Drawdown Notice shall be true and
correct as of each Condition Satisfaction Date.

                        ARTICLE VIII
   Due Diligence Review; Non-Disclosure of Non-Public Information

Section 8.1.  Non-Disclosure of Non-Public Information.

	(a) The Company covenants and agrees that it shall refrain from
disclosing, and shall cause its officers, directors, employees and
agents to refrain from disclosing, any material non-public information
to the Investor without also disseminating such information to the
public, unless prior to disclosure of such information the Company
identifies such information as being material non-public information
and provides the Investor with the opportunity to accept or refuse to
accept such material non-public information for review.

	(b) Nothing herein shall require the Company to disclose non-
public information to the Investor or its advisors or representatives,
and the Company represents that it does not disseminate non-public
information to any investors who purchase stock in the Company in a
public offering, to money managers or to securities analysts, provided,
however, that notwithstanding anything herein to the contrary, the
Company will, as hereinabove provided, immediately notify the advisors
and representatives of the Investor and, if any, underwriters, of any
event or the existence of any circumstance (without any obligation to
disclose the specific event or circumstance) of which it becomes aware,
constituting non-public information (whether or not requested of the
Company specifically or generally during the course of due diligence by
such persons or entities), which, if not disclosed in the SEC documents
would cause such SEC document to include a material misstatement or to
omit a material fact required to be stated therein in order to make the
statements, therein, in light of the circumstances in which they were
made, not misleading.  Nothing contained in this Section 8.1 shall be
construed to mean that such persons or entities other than the Investor
(without the written consent of the Investor prior to disclosure of
such information) may not obtain non-public information in the course
of conducting due diligence in accordance with the terms of this
Agreement and nothing herein shall prevent any such persons or entities
from notifying the Company of their opinion that based on such due
diligence by such persons or entities, that the SEC documents contains
an untrue statement of material fact or omits a material fact required
to be stated in the SEC documents or necessary to make the statements
contained therein, in light of the circumstances in which they were
made, not misleading.

                            ARTICLE IX
                   Choice of Law/Jurisdiction

Section 9.1.  Governing Law.  This Agreement shall be governed by and
interpreted in accordance with the laws of the state of Nevada without
regard to the principles of conflict of laws.  The parties further
agree that any action between them shall be heard in Nevada for the
adjudication of any civil action asserted pursuant to this paragraph.

                            ARTICLE X
                     Assignment; Termination

Section 10.1.  Assignment.  Neither this Agreement nor any rights of
the Company hereunder may be assigned to any other Person.

Section 10.2.  Termination.

	(a)  The obligations of the Investor to make Advances under
Article II hereof shall terminate thirty-six (36) months after the
Execution Date.

	(b) The obligation of the Investor to make an Advance to the
Company pursuant to this Agreement shall terminate permanently
(including with respect to an Advance Date that has not yet occurred)
in the event that the Company shall at any time fail materially to
comply with the requirements of Article VI and such failure is not
cured within thirty (30) days after receipt of written notice from the
Investor.

                             ARTICLE XI
                              Notices

Section 11.1.  Notices.  Any notices, consents, waivers, or other
communications required or permitted to be given under the terms of
this Agreement must be in writing and will be deemed to have been
delivered (i) upon receipt, when delivered personally; (ii) upon
receipt, when sent by facsimile, provided a copy is mailed by U.S.
certified mail, return receipt requested; (iii) three (3) days after
being sent by U.S. certified mail, return receipt requested, or (iv)
one (1) day after deposit with a nationally recognized overnight
delivery service, in each case properly addressed to the party to
receive the same.  The addresses and facsimile numbers for such
communications shall be:

If to the Company:

Amerilithium Corp.
Suite 100
297 Kingsbury Grade
Lake Tahoe, Nevada 89449-4470
(775) 996-2212 facsimile

If to the Investor:
Sunrise Energy Investments, Ltd.
C.J. Hambross Plass 2C
Oslo 0164
Norway
Co. Number: 155 9935

Each party shall provide five (5) days' prior written notice to the
other party of any change in address or facsimile number.

                          ARTICLE XII
                        Miscellaneous

Section 12.1.  Counterparts.  This Agreement may be executed in two or
more identical counterparts, all of which shall be considered one and
the same agreement and shall become effective when counterparts have
been signed by each party and delivered to the other party.  In the
event any signature page is delivered by facsimile transmission, the
party using such means of delivery shall cause four (4) additional
original executed signature pages to be physically delivered to the
other party within five (5) days of the execution and delivery hereof,
though failure to deliver such copies shall not affect the validity of
this Agreement.

Section 12.2.  Entire Agreement; Amendments.  This Agreement supersedes
all other prior oral or written agreements between the Investor, the
Company, their affiliates and persons acting on their behalf with
respect to the matters discussed herein, and this Agreement and the
instruments referenced herein contain the entire understanding of the
parties with respect to the matters covered herein and therein and,
except as specifically set forth herein or therein, neither the Company
nor the Investor 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 party to be charged with enforcement.

Section 12.3.  Reporting Entity for the Common Stock.  The reporting
entity relied upon for the determination of the trading price or
trading volume of the Common Stock on any given Trading Day for the
purposes of this Agreement shall be Bloomberg, L.P. or any successor
thereto.  The written mutual consent of the Investor and the Company
shall be required to employ any other reporting entity.

Section 12.4.  Fees and Expenses.   Each of the parties shall pay its
own fees and expenses (including the fees of any attorneys,
accountants, appraisers or others engaged by such party) in connection
with this Agreement and the transactions contemplated hereby.

Section 12.5.  Confidentiality.  If for any reason the transactions
contemplated by this Agreement are not consummated, each of the parties
hereto shall keep confidential any information obtained from any other
party (except information publicly available or in such party's domain
prior to the date hereof, and except as required by court order or
applicable laws) and shall promptly return to the other parties all
schedules, documents, instruments, work papers or other written
information without retaining copies thereof, previously furnished by
it as a result of this Agreement or in connection herein.

IN WITNESS WHEREOF, the parties hereto have caused this Drawdown Equity
Financing Agreement to be executed by the undersigned, thereunto duly
authorized, as of the date first set forth above.

SUNRISE ENERGY INVESTMENTS, INC.

By: /s/Steven Draytew

AMERILITHIUM CORP.

By:  /s/Matthew Worrall
Name: Matthew Worrall

                          EXHIBIT A
                       DRAWDOWN NOTICE

Amerilithium Corp.

The undersigned, Matthew Worrall hereby certifies, with respect to the
sale of shares of Common Stock of Amerilithium Corp. (the "Company")
issuable in connection with this Drawdown Notice, delivered pursuant to
the Drawdown Equity Financing Agreement (the "Agreement"), as follows:

1. The undersigned is the duly elected chief executive officer of the
Company.

2. The Company has performed in all material respects all covenants and
agreements to be performed by the Company and has complied in all
material respects with all obligations and conditions contained in the
Agreement on or prior to the Drawdown Notice Date, and shall continue
to perform in all material respects all covenants and agreements to be
performed by the Company through the applicable Advance Date.  All
conditions to the delivery of this Drawdown Notice are satisfied as of
the date hereof.

3. The undersigned hereby represents, warrants and covenants that it
has made all filings ("SEC Filings") required to be made by it pursuant
to applicable securities laws (including, without limitation, all
filings required under the Securities Exchange Act of 1934, which
include Forms 10-Q or 10-QSB, 10-K or 10-KSB, 8-K, etc.).  All SEC
Filings and other public disclosures made by the Company, including,
without limitation, all press releases, analysts meetings and calls,
etc. (collectively, the "Public Disclosures"), have been reviewed and
approved for release by the Company's attorneys and, if containing
financial information, the Company's independent certified public
accountants.  None of the Company's Public Disclosures contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.

4. The Advance requested is $200,000.00.

The undersigned has executed this Certificate this 8th day of April
2010.

Amerilithium Corp.

By: /s/Matthew Worrall
Name: Matthew Worrall

                             EXHIBITS

EXHIBIT 4.2.

EXHIBITS      4.5,    4.6,   4.10      4.14      and     4.15

None

EXHIBIT 4.16

None

EXHIBIT 4.17

1.  Tax Status

EXHIBIT 4.18

1. Certain TransactionsUnassociated Document

Exhibit 4.1

 

	  	
State of California 

Secretary of State

	

 

I, DEBRA BOWEN, Secretary of State of the State of California, hereby certify:

 

That the attached transcript of 25 page(s) is a full, true and correct copy of the original record in the custody of this office.

 

 

	 	
IN WITNESS WHEREOF, I execute this certificate and affix the Great Seal of the State of California this day of

	 
	
APR 16 2010

	

	

DEBRA BOWEN

Secretary of State

	 

 

  

  

  

 

CERTIFICATE OF DETERMINATION

 

OF

 

MANDATORILY CONVERTIBLE CUMULATIVE

 

PERPETUAL PREFERRED STOCK, SERIES A

 

OF

 

NORTH VALLEY BANCORP

 

Pursuant to Section 401 of the Corporations Code of the State of California:

 

We, Michael J. Cushman, President and Chief Executive Officer, and Leo J. Graham, Corporate Secretary, of North Valley Bancorp, a corporation organized under the laws of the State of California (hereinafter called the “Corporation”), do hereby certify as follows:

	
1.

	
On April 15, 2010, the Board of Directors of the Corporation adopted a resolution designating 40,000 shares of serial preferred stock (hereinafter referred to as the “Preferred Stock”) as Mandatorily Convertible Cumulative Perpetual Preferred Stock, Series A.

	  	  
	
2.

	
No shares of Mandatorily Convertible Cumulative Perpetual Preferred Stock, Series A have been issued.

	  	  
	
3.

	
Pursuant to the authority conferred upon the Board of Directors by the Articles of Incorporation of the Corporation, the following resolution was duly adopted by the Board of Directors on April 15, 2010, creating the series of Preferred Stock designated as Mandatorily Convertible Cumulative Perpetual Preferred Stock, Series A:

 

RESOLVED, that pursuant to the provisions of the Articles of Incorporation of the Corporation, as amended, and applicable law, a series of preferred stock of the Corporation be and hereby is created, and that the designation and number of shares of such series, and the voting and other powers, preferences and relative, participating, optional or other rights, and the qualifications, limitations and restrictions thereof, of the shares of such series are as follows:

 

Section 1.    Designation. There is hereby created out of the authorized and unissued shares of preferred stock of the Corporation a series of preferred stock designated as the “Mandatorily Convertible Cumulative Perpetual Preferred Stock, Series A” (the “Preferred Stock”). The number of shares constituting such series shall be 40,000. The Preferred Stock shall have no par value per share.

 

Section 2.    Ranking. The Preferred Stock will, with respect to dividend rights and rights on liquidation, winding up and dissolution, rank (i) on a parity with each class or series of equity securities of the Corporation the terms of which do not expressly provide that such class or series will rank senior or junior to the Preferred Stock as to dividend rights and rights on liquidation, winding-up and dissolution of the Corporation (collectively referred to as “Parity

 

  

  

  

 

Securities”), and (ii) senior to the Corporation’s common stock, no par value per share (the “Common Stock”), any equity securities of the Company issued pursuant to the Amended and Restated Shareholder Protection Rights Agreement dated as of March 26, 2009, and each other class or series of capital stock of the Corporation outstanding or established after the Effective Date by the Corporation the terms of which do not expressly provide that it ranks on a parity with or senior to the Preferred Stock as to dividend rights and rights on liquidation, winding-up and dissolution of the Corporation (collectively referred to as “Junior Securities”). The Corporation has the power to authorize and/or issue additional shares or classes or series of Junior Securities or Parity Securities without the approval of the Holders; provided, however, that for as long as the Preferred Stock remains outstanding, no preferred stock of the Corporation that would rank senior to the Preferred Stock may be issued without, in each case, the express approval of the Holders of at least two-thirds of the issued and outstanding shares of Preferred Stock voting as a single class.

 

Section 3.   Definitions. The following initially capitalized terms shall have the following meanings, whether used in the singular or the plural:

 

(a)            “Additional Stock” has the meaning set forth in Section 10(a)(viii)(F).

 

(b)            “Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

 

(c)            “Applicable Conversion Price” means the Conversion Price in effect at any given time.

 

(d)        “Business Day” means any day that is not Saturday or Sunday and that, in the City of New York and in the State of California, is not a day on which banking institutions generally are authorized or obligated by law or executive order to be closed.

 

(e)            “Certificate of Determination” means this Certificate of Determination of North Valley Bancorp, dated April 15, 2010.

 

(f)         “Closing Price” of the Common Stock (or other relevant capital stock or equity interest) on any date of determination means the closing sale price or, if no closing sale price is reported, the last reported sale price of the shares of the Common Stock (or other relevant capital stock or equity interest) on the NASDAQ Global Select Market on such date. If the Common Stock (or other relevant capital stock or equity interest) is not traded on the NASDAQ Global Select Market on any date of determination, the Closing Price of the Common Stock (or other relevant capital stock or equity interest) on such date of determination means the closing sale price as reported in the composite transactions for the principal U.S. national or regional securities exchange on which the Common Stock (or other relevant capital stock or equity interest) is so listed or quoted, or, if no closing sale price is reported, the last reported sale price on the principal U.S. national or regional securities exchange on which the Common Stock (or

 

  

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other relevant capital stock or equity interest) is so listed or quoted, or if the Common Stock (or other relevant capital stock or equity interest) is not so listed or quoted on a U.S. national or regional securities exchange, the last quoted bid price for the Common Stock (or other relevant capital stock or equity interest) in the over-the counter market as reported by Pink OTC Markets Inc. or similar organization, or, if that bid price is not available, the market price of the Common Stock (or other relevant capital stock or equity interest) on that date as determined by a nationally recognized independent investment banking firm retained by the Corporation for this purpose, subject to ultimate joint approval by the Board of Directors and the Holders.

 

For purposes of this Certificate of Determination, all references herein to the “Closing Price” and “last reported sale price” of the Common Stock (or other relevant capital stock or equity interest) on the NASDAQ Global Select Market shall be such closing sale price and last reported sale price as reflected on the website of the NASDAQ Global Select Market (www.nasdaq.com) and as reported by Bloomberg Professional Service; provided that in the event that there is a discrepancy between the closing price and the last reported sale price as reflected on the website of the NASDAQ Stock Market and as reported by Bloomberg Professional Service, the closing sale price and the last reported sale price on the website of the NASDAQ Stock Market shall govern.

 

(g)           “Common Stock” has the meaning set forth in Section 2.

 

(h)            “Common Stock Equivalents” means securities representing rights convertible into or exchangeable for, or entitling the holder thereof to purchase or receive directly or indirectly, shares of Common Stock.

 

(i)             “Conversion Date” means, as applicable, the Mandatory Conversion Date or the Section 15 Conversion Date.

 

(j)             “Conversion Price” means for each share of Preferred Stock, $1.50; provided that if the Shareholder Approvals are not obtained by the six month anniversary of the Effective Date, the Conversion Price shall be reduced by ten percent (10%) (subject to further adjustment or limitation from time to time in a manner consistent with the provisions of Section 10).

 

(k)            “Corporation” means North Valley Bancorp, a California corporation.

 

(1)            “Current Market Price” means, on any date, the average of the daily Closing Price per share of the Common Stock on each of the five consecutive Trading Days preceding the earlier of the day before the date in question and the day before the Ex-Date with respect to the issuance or distribution giving rise to an adjustment to the Conversion Price pursuant to Section 10.

 

(m)           “Distributed Property” has the meaning set forth in Section 10(a)(iv).

 

(n)           “Distribution” has the meaning set forth in Section 4(g).

 

(o)           “Dividend Rate” means the following respective rates during each of the following respective periods:

 

  

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(i)

	
12% per annum for the Section 4 Dividend Period beginning on the Effective Date and ending on the six (6) month anniversary of the Effective Date (the “First Period End Date”);

	  	  	  
	  	
(ii)

	
15% per annum for the Section 4 Dividend Period beginning on the First Period End Date and ending on the six (6) month anniversary of the First Period End Date (the “Second Period End Date”); and

	  	  	  
	  	
(iii)

	
20%) per annum for the dividends accruing during all Section 4 Dividend Periods subsequent to the Second Period End Date.

 

(p)            “Effective Date” means the date on which shares of the Preferred Stock are first issued.

 

(q)           “Exchange Property” has the meaning set forth in Section 11(a).

 

(r)            “Ex-Date”, when used with respect to any issuance or distribution, means the first date on which the Common Stock trades without the right to receive the issuance or distribution giving rise to an adjustment to the Conversion Price pursuant to Section 10.

 

(s)            “Filing Date” has the meaning set-forth in Section 10(a)(viii)(A).

 

        (t)            “First Dilutive Issuance” has the meaning set forth in Section 10(a)(viii)(A).

 

(u)           “Holder” means the Person in whose name the shares of the Preferred Stock are registered, which may be treated by the Corporation as the absolute owner of the shares of Preferred Stock for the purpose of making payment and settling the related conversions and for all other purposes.

 

(v)           “Junior Securities” has the meaning set forth in Section 2.

 

(w)           “Liquidation Preference” means, as to the Preferred Stock, $1,000 per share (as adjusted for any split, subdivision, combination, consolidation, recapitalization or similar event with respect to the Preferred Stock).

 

(x)         “Mandatory Conversion Date” means, with respect to the shares of Preferred Stock of any Holder, the third Business Day after which the Corporation has received the Shareholder Approvals (or if a Reorganization Event has theretofore been consummated, the date of consummation of such Reorganization Event), provided, however, that if a Mandatory Conversion Date would otherwise occur on or after an Ex-Date for an issuance or distribution that results in an adjustment of the Conversion Price pursuant to Section 10 and on or before the Record Date for such issuance or distribution, such Mandatory Conversion Date shall instead occur on the first calendar day after the Record Date for such issuance or distribution.

 

(y)            “Notice of Mandatory Conversion” has the meaning set forth in Section 9(a).

 

(z)            “Parity Securities” has the meaning set forth in Section 2.

 

  

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(aa)          “Person” means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint-stock company, limited liability company or trust.

 

(bb)         “Preferred Stock” has the meaning set forth in Section 1.

 

(cc)          “Record Date” has the meaning set forth in Section 4(d).

 

(dd)         “Reorganization Event” has the meaning set forth in Section 11(a).

 

(ee)          “Section 4 Dividend Payment Date” has the meaning set forth in Section 4(b).

 

(ff)           “Section 4 Dividend Period” has the meaning set forth in Section 4(c).

 

(gg)         “Section 15 Conversion Date” has the meaning set forth in Section 15.

 

(hh)          “Shareholder Approvals” means the shareholder approvals necessary (i) to amend the Articles of Incorporation of the Corporation to increase the number of authorized shares of Common Stock to 60,000,000 and (ii) to approve the conversion of the Preferred Stock into Common Stock for purposes of Rule 5635 of the NASDAQ Stock Market Rules.

 

(ii)            “Subsequent Dilutive Issuance” has the meaning set forth in Section 10(a)(viii)(A).

 

(jj)            “Trading Day” means a day on which the shares of Common Stock:

 

                 (i)      are not suspended from trading on any national or regional securities exchange or association or over-the-counter market at the close of business; and

 

                (ii)      have traded at least once on the national or regional securities exchange or association or over-the-counter market that is the primary market for the trading of the Common Stock.

 

(kk)          “Trading Market” means whichever of the New York Stock Exchange, the NYSE Amex, the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or OTC Bulletin Board on which the Common Stock is listed or quoted for trading on the date in question.

 

        Section 4.    Dividends. .

 

(a)            From and after the Effective Date, the Holders shall be entitled to receive, only if, when and as declared by the Board of Directors or a duly authorized committee of the Board of Directors, out of funds legally available therefor, cumulative dividends of the type and in the amounts determined as set forth in this Section 4, and no more, provided, however, if the Mandatory Conversion Date occurs before the six month anniversary of the Effective Date, then no accrued dividends shall be payable.

 

(b)            Subject to Section 4(a), commencing on the Effective Date, dividends shall accrue and be payable semi-annually in arrears commencing on the six (6) month anniversary of the

 

  

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Effective Date and continuing on each six (6) month anniversary thereafter (each, a “Section 4 Dividend Payment Date”) or, if any such day is not a Business Day, the next Business Day, if, when and as declared by the Board of Directors or a duly authorized committee of the Board of Directors. Dividends payable pursuant to this Section 4, if, when and as declared by the Board of Directors or a duly authorized committee of the Board of Directors, will be, for each outstanding share of Preferred Stock, payable in cash at an annual rate equal to the Dividend Rate multiplied by the sum of (A) the Liquidation Preference plus (B) all accrued and unpaid dividends for any prior Section 4 Dividend Period that are payable on such share of Preferred Stock, payable in cash.

 

(c)            Dividends payable pursuant to Section 4 will be computed on the basis of a 360-day year of twelve 30-day months and, for any Section 4 Dividend Period greater or less than a full Section 4 Dividend Period, will be computed on the basis of the actual number of days elapsed in the period divided by 360. The period from the Effective Date to but excluding June 30, 2010 and each period from and including a Section 4 Dividend Payment Date to but excluding the following Section 4 Dividend Payment Date is herein referred to as a “Section 4 Dividend Period”.

 

(d)            Each dividend will be payable to Holders of record as they appear in the records of the Corporation on the applicable record date (each, a “Record Date”), which with respect to dividends payable pursuant to this Section 4, shall be on the fifteenth day of the month immediately prior to the month in which the relevant Section 4 Dividend Payment Date occurs.

 

(e)            Dividends on the Preferred Stock are cumulative. To the extent that the Board of Directors does not declare and pay dividends on the Preferred Stock for a Section 4 Dividend Period prior to the related Section 4 Dividend Payment Date, in full or otherwise, such unpaid dividend shall accrue and shall cumulate from such scheduled Section 4 Dividend Payment Date, shall compound on each subsequent Section 4 Dividend Payment Date and shall be payable semi-annually in arrears on each subsequent Section 4 Dividend Payment Date. As used herein, the term “accrued” includes both accrued and accumulated dividends.

 

(f)            So long as any shares of Preferred Stock remain outstanding, if all dividends on all outstanding shares of the Preferred Stock for any Section 4 Dividend Period have not been declared and paid, or declared and funds set aside therefor, the Corporation shall not (x) declare or pay dividends with respect to, or make any distributions on, or, directly or indirectly, redeem, purchase or acquire any of its Junior Securities or (y) directly or indirectly, redeem, purchase or acquire any of its Parity Securities, other than, in each case, (i) redemptions, purchases or other acquisitions of Junior Securities or Parity Securities in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of any one or more employees, officers, directors or consultants or in connection with a dividend reinvestment plan, (ii) any declaration of a dividend in connection with any shareholders’ rights plan, or the issuance of rights, stock or other property under any shareholders’ rights plan, or the redemption or repurchase of rights pursuant thereto, (iii) conversions or exchanges of Junior Securities or Parity Securities for Junior Securities or Parity Securities, respectively, and (iv) any purchase of fractional interests in shares of the Corporation’s capital stock pursuant to the conversion or exchange provisions of such capital stock or the securities being converted or exchanged. If dividends payable pursuant to Section 4 for any Section 4 Dividend Payment Date are not paid in

 

  

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full, or declared and funds set aside therefor on the shares of the Preferred Stock and there are issued and outstanding shares of Parity Securities with the same Section 4 Dividend Payment Date (or, in the case of Parity Securities having dividend payment dates different from the Section 4 Dividend Payment Dates, on a dividend payment date falling within a Section 4 Dividend Period applicable to such Section 4 Dividend Payment Date), then all dividends declared on shares of the Preferred Stock and such Parity Securities on such date or dates, as the case may be, shall be declared pro rata so that the respective amounts of such dividends shall bear the same ratio to each other as full semi-annual dividends per share payable on the shares of the Preferred Stock pursuant to Section 4 and all such Parity Securities otherwise payable on such Section 4 Dividend Payment Date (or, in the case of Parity Securities having dividend payment dates different from the Section 4 Dividend Payment Dates, on a dividend payment date falling within a Section 4 Dividend Period applicable to such Section 4 Dividend Payment Date) (subject to such dividends on such Parity Securities having been declared by the Board of Directors out of legally available funds and including, in the case of any such Parity Securities that bear cumulative dividends, all accrued and unpaid dividends) bear to each other.

 

(g)            In addition, so long as any shares of Preferred Stock are outstanding, the Corporation shall not declare, pay or set apart for payment any dividend or make any Distribution on any Common Stock, unless at the time of such dividend or Distribution the Corporation simultaneously pays a dividend or makes a Distribution on each outstanding share of Preferred Stock in an amount equal to the product of (i) the dividend payable or Distribution to be made on each share of Common Stock and (ii) the number of shares of Common Stock issuable upon conversion of a share of Preferred Stock (assuming receipt of the Shareholder Approvals and, if necessary, regulatory approvals), calculated on the record date for determination of holders entitled to receive such dividend or Distribution. For purposes hereof, “Distribution” shall mean the transfer of cash, securities or other assets or property, including, without limitation, evidences of indebtedness, shares of capital stock or securities (including, without limitation, any dividend or distribution of (i) shares of capital stock of any class or series, or similar equity interests, of or relating to a subsidiary or other business unit in a “spin­-off” transaction or (ii) rights or warrants to purchase shares of Common Stock (other than rights issued pursuant to a shareholders’ rights plan, a dividend reinvestment plan or other similar plans), without consideration, whether by way of dividend or otherwise.

 

(h)            If a Conversion Date with respect to any share of Preferred Stock occurs on or prior to the Record Date for any declared dividend applicable to any Section 4 Dividend Period, the Holder of such share of Preferred Stock will not have the right to receive any dividends on the Preferred Stock with respect to such Section 4 Dividend Period, provided that this shall not affect any rights to receive any accrued and unpaid dividends on the Preferred Stock attributable to any Section 4 Dividend Period completed prior to such Record Date. If a Conversion Date is after the Record Date for any declared dividend applicable to any Section 4 Dividend Period and prior to the relevant Section 4 Dividend Payment Date, such Holder shall receive that dividend on the relevant Section 4 Dividend Payment Date if such Holder was the Holder of record on the Record Date for that dividend.

 

        Section 5.    Liquidation.

 

  

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(a)            In the event the Corporation voluntarily or involuntarily liquidates, dissolves or winds up, the Holders at the time shall be entitled to receive liquidating distributions in an amount equal to the greater of (X) the Liquidation Preference per share of Preferred Stock, plus an amount equal to (i) any accrued and unpaid dividends (regardless of whether any dividends are actually declared) and (ii) any authorized and declared but unpaid dividends thereon, to and including the date of such liquidation, dissolution or winding up and (Y) 110% of the payment or distribution to which such Holders would be entitled if the Preferred Stock were converted to Common Stock (assuming receipt of the Shareholder Approvals and, if necessary, regulatory approvals) immediately before such liquidation, dissolution, or winding up, in each case out of assets legally available for distribution to the Corporation’s shareholders, before any distribution of assets is made to the holders of the Common Stock or any other Junior Securities. After payment of the full amount of such liquidation distribution, the Holders shall not be entitled to any further participation in any distribution of assets by the Corporation.

 

(b)           In the event the assets of the Corporation available for distribution to shareholders upon any liquidation, dissolution or winding-up of the affairs of the Corporation, whether voluntary or involuntary, shall be insufficient to pay in full the amounts payable with respect to all outstanding shares of the Preferred Stock and the corresponding amounts payable on any Parity Securities, the Holders and the holders of such Parity Securities shall share ratably in any distribution of assets of the Corporation in proportion to the full respective liquidating distributions to which they would otherwise be respectively entitled.

 

(c)           The Corporation’s consolidation or merger with or into any other entity, the consolidation or merger of any other entity with or into the Corporation, or the sale of all or substantially all of the Corporation’s property or business will not constitute its liquidation, dissolution or winding up.

 

Section 6.   Maturity. The Preferred Stock shall be perpetual unless converted in accordance with this Certificate of Determination.

 

        Section 7.   Redemptions.

 

(a)            Redemption by the Holder. Holders of Preferred Stock will have no right to require redemption of any shares of Preferred Stock.

 

(b)        No Redemption by the Corporation. The Preferred Stock shall not be redeemable by the Corporation at any time. The Preferred Stock shall not be subject to any sinking fund or other obligation to redeem, repurchase or retire the Preferred Stock.

 

        Section 8.    Mandatory Conversion.

 

(a)            Effective as of the close of business on the Mandatory Conversion Date with respect to the shares of Preferred Stock of a Holder, all such Holder’s shares of Preferred Stock shall, subject to the provisions of Section 15, automatically convert into shares of Common Stock as set forth below. The number of shares of Common Stock into which a share of Preferred Stock shall be convertible shall be determined by dividing (i) the Liquidation Preference, plus the aggregate sum of all accrued and unpaid dividends with respect to (1) any Section 4 Dividend Period completed prior to the Record Date for the Section 4 Dividend Period in which the

 

  

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Mandatory Conversion Date occurs, plus, if applicable, (2) the Section 4 Dividend Period in which the Mandatory Conversion Date occurs if the Mandatory Conversion Date occurs after the Record Date for such Section 4 Dividend Period (provided, however, that if the Mandatory Conversion Date occurs before the six month anniversary of the Effective Date, then no dividends shall be included in the numerator), by (ii) the Applicable Conversion Price (subject to the conversion procedures of Section 9 hereof). Upon conversion, Holders shall receive cash in lieu of fractional shares in accordance with Section 13 hereof.

 

(b)            If a Conversion Date with respect to any share of Preferred Stock occurs on or prior to the Record Date for any declared dividend applicable to any Section 4 Dividend Period, the Holder of such share of Preferred Stock will not have the right to receive any dividends on the Preferred Stock with respect to such Section 4 Dividend Period, provided that this shall not affect any rights to receive any accrued and unpaid dividends on the Preferred Stock attributable to any Section 4 Dividend Period completed prior to such Record Date.

 

        Section 9.    Conversion Procedures.

 

(a)            Upon receipt by the Corporation of the Shareholder Approvals, the Corporation shall provide, within two (2) Business Days thereafter, notice of mandatory conversion to such Holder (such notice a “Notice of Mandatory Conversion”). In addition to any information required by applicable law or regulation, the Notice of Mandatory Conversion with respect to such Holder shall state, as appropriate:

 

       (i)       the Mandatory Conversion Date;

 

       (ii)     after giving effect to the provisions of Section 15, the number of shares of Preferred Stock held of record by such Holder (x) subject to conversion on the Mandatory Conversion Date and (y) that will remain outstanding pursuant to the provisions of Section 15, if any;

 

         (iii)   the Conversion Price and the resulting number of shares of Common Stock to be issued upon conversion of each share of Preferred Stock subject to mandatory conversion; and

 

        (iv)     if certificates are to be issued, the place or places where certificates for shares of Preferred Stock held of record by such Holder and subject to mandatory conversion are to be surrendered for issuance of certificates representing shares of Common Stock.

 

(b)            Effective immediately prior to the close of business on a Conversion Date, with respect to any shares of Preferred Stock to be converted on such Conversion Date, dividends shall no longer be declared on any such shares of Preferred Stock and such shares of Preferred Stock shall cease to be outstanding, in each case, subject to the right of the Holder to receive (i) shares of Common Stock issuable upon such mandatory conversion, (ii) any accrued and unpaid dividends on such shares to the extent provided in Section 4 and (iii) any other payments to which such Holder is otherwise entitled pursuant to Section 8, Section 11 or Section 13 hereof, as applicable.

 

(c)            Prior to the close of business on a Conversion Date, with respect to any share of Preferred Stock to be converted on such Conversion Date, the shares of Common Stock issuable

 

  

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upon conversion thereof or other securities issuable upon conversion of such share of Preferred Stock shall not be deemed outstanding for any purpose, and the Holder thereof shall have no rights with respect to such shares of Common Stock or other securities issuable upon conversion (including voting rights, rights to respond to tender offers for the Common Stock or other securities issuable upon conversion and rights to receive any dividends or other distributions on the Common Stock or other securities issuable upon conversion) by virtue of holding such share of Preferred Stock, except to the extent provided in Section 4(g).

 

(d)            Shares of Preferred Stock duly converted in accordance with this Certificate of Determination, or otherwise reacquired by the Corporation, will resume the status of authorized and unissued preferred stock, undesignated as to series and available for future issuance. The Corporation may from time-to-time take such appropriate action as may be necessary to reduce the authorized number of shares of Preferred Stock; provided, however, that the Corporation shall not take any such action if such action would reduce the authorized number of shares of Preferred Stock below the number of shares of Preferred Stock then outstanding.

 

(e)            The Person or Persons entitled to receive the Common Stock and/or cash, securities or other property issuable upon conversion of Preferred Stock shall be treated for all purposes as the record holder(s) of such shares of Common Stock and/or securities as of the close of business on the relevant Conversion Date with respect thereto. In the event that a Holder shall not by written notice designate the name in which shares of Common Stock and/or cash, securities or other property (including payments of cash in lieu of fractional shares) to be issued or paid upon conversion of shares of Preferred Stock should be registered or paid or the manner in which such shares should be delivered, the Corporation shall be entitled to register and deliver such shares, and make such payment, in the name of the Holder and in the manner shown on the records of the Corporation.

 

(f)         On a Conversion Date with respect to any share of Preferred Stock, certificates representing shares of Common Stock shall be issued and delivered to the Holder thereof or such Holder’s designee (or, at the Corporation’s option such shares shall be registered in book-entry form) upon presentation and surrender of the certificate evidencing the Preferred Stock to the Corporation and, if required, the furnishing of appropriate endorsements and transfer documents and the payment of all transfer and similar taxes.

 

        Section 10.    Anti-Dilution Adjustments.

 

        (a)            The Conversion Price shall be subject to the following adjustments:

 

         (i)     Stock Dividends and Distributions. If the Corporation pays dividends or other distributions on the Common Stock in shares of Common Stock, then the Conversion Price in effect immediately prior to the Ex-Date for such dividend or distribution will be multiplied by the following fraction:

 

the numerator is the number of shares of Common Stock outstanding immediately prior to the Ex-Date for such dividend or distribution, and

 

the denominator is the sum of (1) the number of shares of Common Stock outstanding immediately prior to the Ex-Date for such dividend or distribution

  

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plus (2) the total number of shares of Common Stock constituting such dividend or distribution.

 

For the purposes of this Section 10(a)(i), the number of shares of Common Stock at the time outstanding shall not include shares acquired by the Corporation. If any dividend or distribution described in this Section 10(a)(i) is declared but not so paid or made, the Conversion Price shall be readjusted, effective as of the date the Board of Directors publicly announces its decision not to make such dividend or distribution, to such Conversion Price that would be in effect if such dividend or distribution had not been declared (but giving effect to any intervening adjustments that may have been made with respect to the Preferred Stock).

 

       (ii)     Subdivisions, Splits and Combinations of the Common Stock. If the Corporation subdivides, splits or combines the shares of Common Stock, then the Conversion Price in effect immediately prior to the effective date of such share subdivision, split or combination will be multiplied by the following fraction:

 

the numerator is the number of shares of Common Stock outstanding immediately prior to the effective date of such share subdivision, split or combination, and

 

the denominator is the number of shares of Common Stock outstanding immediately after the opening of business on the effective date of such share subdivision, split or combination.

 

For the purposes of this Section 10(a)(ii), the number of shares of Common Stock at the time outstanding shall not include shares acquired by the Corporation. If any subdivision, split or combination described in this Section 10(a)(ii) is announced but the outstanding shares of Common Stock are not subdivided, split or combined, the Conversion Price shall be readjusted, effective as of the date the Board of Directors publicly announces its decision not to subdivide, split or combine the outstanding shares of Common Stock, to such Conversion Price that would be in effect if such subdivision, split or combination had not been announced (but giving effect to any intervening adjustments that may have been made with respect to the Preferred Stock).

 

         (iii)   Issuance of Stock Purchase Rights. If the Corporation issues to all or substantially all holders of the shares of Common Stock rights or warrants (other than rights or warrants issued pursuant to a dividend reinvestment plan or share purchase plan or other similar plans) entitling them to subscribe for or purchase the shares of Common Stock at less than the Current Market Price on the date fixed for the determination of shareholders entitled to receive such rights or warrants, then the Conversion Price in effect immediately prior to the Ex-Date for such distribution will be multiplied by the following fraction:

 

the numerator is sum of (1) the number of shares of Common Stock outstanding immediately prior to the Ex-Date for such dividend or distribution plus (2) the number of shares of Common Stock equal to the aggregate price payable to exercise such rights or warrants divided by the Current Market Price on the date fixed for the determination of shareholders entitled to receive such rights or warrants, and

 

  

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the denominator is the sum of (1) the number of shares of Common Stock outstanding immediately prior to the Ex-Date for such dividend or distribution plus (2) the total number of shares of Common Stock issuable pursuant to such rights or warrants.

 

For the purposes of this Section 10(a)(iii), the number of shares of Common Stock at the time outstanding shall not include shares acquired by the Corporation. The Corporation shall not issue any such rights or warrants in respect of shares of the Common Stock acquired by the Corporation. In the event that such rights or warrants described in this Section 10(a)(iii) are not so issued, the Conversion Price shall be readjusted, effective as of the date the Board of Directors publicly announces its decision not to issue such rights or warrants, to the Conversion Price that would then be in effect if such issuance had not been declared (but giving effect to any intervening adjustments that may have been made with respect to the Preferred Stock). To the extent that such rights or warrants are not exercised prior to their expiration or shares of Common Stock are otherwise not delivered pursuant to such rights or warrants upon the exercise of such rights or warrants, the Conversion Price shall be readjusted to such Conversion Price that would then be in effect had the adjustment made upon the issuance of such rights or warrants been made on the basis of the delivery of only the number of shares of Common Stock actually delivered (but giving effect to any intervening adjustments that may have been made with respect to the Preferred Stock). In determining the aggregate offering price payable for such shares of Common Stock, there shall be taken into account any consideration received for such rights or warrants and the value of such consideration (if other than cash, to be determined in good faith by the Board of Directors). If an adjustment to the Conversion Price is required under this Section 10(a)(iii), delivery of any additional shares of Common Stock that may be deliverable upon conversion as a result of an adjustment required under this Section 10(a)(iii) shall be delayed to the extent necessary in order to complete the calculations provided in this Section  10(a)(iii).

 

        (iv)    Debt or Asset Distributions. If the Corporation distributes to all or substantially all holders of shares of Common Stock evidences of indebtedness, shares of capital stock, securities, cash or other assets (excluding any dividend or distribution referred to in Section 10(a)(i), any rights or warrants referred to in Section 10(a)(iii), any dividend or distribution paid exclusively in cash, any consideration payable in connection with a tender or exchange offer made by the Corporation or any of its subsidiaries, and any dividend of shares of capital stock of any class or series, or similar equity interests, of or relating to a subsidiary or other business unit in the case of certain spin-off transactions as described below) (such evidences of indebtedness, shares of capital stock, securities, cash or other assets, the “Distributed Property”), then the Conversion Price in effect immediately prior to the Ex-Date for such distribution will be multiplied by the following fraction:

 

the numerator is the Current Market Price per share of Common Stock on such date minus the fair market value of the portion of the distribution applicable to one share of Common Stock on such date as determined in good faith by the Board of Directors, and

 

the denominator is the Current Market Price per share of Common Stock on such date.

 

  

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  provided that, if the fair market value of the portion of the distribution applicable to one share of Common Stock on such date as determined in good faith by the Board of Directors is equal to or greater than the Current Market Price per share of Common Stock on such date, in lieu of the foregoing adjustment, adequate provision shall be made so that each Holder shall receive on the date on which the Distributed Property is distributed to holders of Common Stock, for each share of Preferred Stock, the amount of Distributed Property such Holder would have received had such Holder’s Preferred Stock been converted into such number of shares of Common Stock that such Holder’s shares of Preferred Stock would then be convertible on the Ex-Date for such distribution.

 

 In a “spin-off,” where the Corporation makes a distribution to all or substantially all holders of shares of Common Stock consisting of capital stock of any class or series, or similar equity interests of, or relating to, a subsidiary or other business unit, the Conversion Price will not be adjusted, but in lieu of such adjustment each Holder shall receive the same distribution as a holder of Common Stock would as though such Holder’s shares of Preferred Stock had been converted into such number of shares of Common Stock that such Holder’s shares of Preferred Stock would then be convertible.

 

In the event that such distribution described in this Section 10(a)(iv) is not so paid or made, the Conversion Price shall be readjusted, effective as of the date the Board of Directors publicly announces its decision not to pay or make such dividend or distribution, to the Conversion Price that would then be in effect if such dividend or distribution had not been declared (but giving effect to any intervening adjustments that may have been made with respect to the Preferred Stock). If an adjustment to the Conversion Price is required under this Section 10(a)(iv), delivery of any additional shares of Common Stock that may be deliverable upon conversion as a result of an adjustment required under this Section 10(a)(iv) shall be delayed to the extent necessary in order to complete the calculations provided for in this Section 10(a)(iv).

 

       (v)    Cash Distributions. If the Corporation makes a distribution consisting exclusively of cash to all holders of the Common Stock, excluding (a) any cash dividend or distribution on the Common Stock to the extent a corresponding cash dividend or distribution pursuant to Section 4 is paid on the Preferred Stock, (b) any dividend or distribution in connection with the Corporation’s liquidation, dissolution or winding up, and (c) any consideration payable in connection with a tender or exchange offer made by the Corporation or any of its subsidiaries, then in each event, the Conversion Price in effect immediately prior to the Ex-Date for such distribution will be multiplied by the following fraction:

 

the numerator is the Closing Price per share of Common Stock on the Trading Day immediately preceding the Ex-Date minus the amount per share of Common Stock of the cash distribution, as determined pursuant to the introduction to this Section 10(a)(v), and

 

the denominator is the Closing Price per share of Common Stock on the Trading Day immediately preceding the Ex-Date.

 

 In the event that any distribution described in this Section 10(a)(v) is not so made, the Conversion Price shall be readjusted, effective as of the date the Board of Directors publicly

 

  

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announces its decision not to pay such distribution, to the Conversion Price which would then be in effect if such distribution had not been declared (but giving effect to any intervening adjustments that may have been made with respect to the Preferred Stock).

 

Notwithstanding the foregoing, if the amount per share of Common Stock of the cash distribution, as determined pursuant to the introduction to this Section 10(a)(v), is equal to or greater than the Closing Price per share of Common Stock on the Trading Day immediately preceding the Ex-Date, in lieu of the foregoing adjustment, adequate provision shall be made so that each Holder shall have the right to receive on the date on which the relevant cash dividend or distribution is distributed to holders of Common Stock, for each share of Preferred Stock, the amount of cash such Holder would have received had such Holder’s Preferred Stock been converted into such number of shares of Common Stock that such Holder’s shares of Preferred Stock would then be convertible on the Ex-Date for such distribution.

 

        (vi)    Self Tender Offers and Exchange Offers. If the Corporation or any of its subsidiaries successfully completes a tender or exchange offer for the Common Stock where the cash and the value of any other consideration included in the payment per share of the Common Stock exceeds the Closing Price per share of the Common Stock on the Trading Day immediately succeeding the expiration of the tender or exchange offer, then the Conversion Price in effect at the close of business on such immediately succeeding Trading Day will be multiplied by the following fraction:

	  	
OS-l x SP

	  
	  	
AC + (SP x OS-2)

	  

 

        where,

 

SP = the Closing Price per share of Common Stock on the Trading Day immediately succeeding the expiration of the tender or exchange offer.

 

OS-1 = the number of shares of Common Stock outstanding immediately prior to the expiration of the tender or exchange offer, including any shares validly tendered and not withdrawn.

 

OS-2 = the number of shares of Common Stock outstanding immediately after the expiration of the tender or exchange offer, giving effect to consummation of the acquisition of all shares validly tendered or exchanged (and not withdrawn) in connection with such tender or exchange.

 

AC = the aggregate cash and fair market value of the other consideration payable in the tender or exchange offer, as determined by the Board of Directors.

 

 In the event that the Corporation, or one of its subsidiaries, is obligated to purchase shares of Common Stock pursuant to any such tender offer or exchange offer, but the Corporation, or such subsidiary, is permanently prevented by applicable law from effecting any such purchases, or all such purchases are rescinded, then the Conversion Price shall be readjusted to be such Conversion Price that would then be in effect if such tender offer or exchange offer had not been made (but giving effect to any intervening adjustments that may have been made with respect to the Preferred Stock). Except as set forth in the preceding sentence, if the

 

  

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application of this Section 10(a)(vi) to any tender offer or exchange offer would result in a decrease in the Conversion Price, no adjustment shall be made for such tender offer or exchange offer under this Section 10(a)(vi).

 

          (vii)    Rights Plans. To the extent that the Corporation has a shareholder rights plan in effect with respect to the Common Stock on the Conversion Date, upon conversion of any shares of the Preferred Stock, Holders will receive, in addition to the shares of Common Stock, the rights under the rights plan, unless, prior to such Conversion Date, the rights have separated from the shares of Common Stock, in which case the Conversion Price will be adjusted at the time of separation as if the Corporation had made a distribution to all holders of the Common Stock as described in Section 10(a)(iv) above, subject to readjustment in the event of the expiration, termination or redemption of such rights.

 

                 (viii)  Other Issuances of Additional Stock.

 

     (A)         For so long as any shares of Preferred Stock remain outstanding, if the Corporation shall issue (or be deemed to have issued), after the date of filing of this Certificate of Determination (the “Filing Date”), any Additional Stock (as defined below in Section 10(a)(viii)(F)) without consideration or for a consideration per share less than the Conversion Price for the Preferred Stock in effect immediately prior to the issuance of such Additional Stock, the Conversion Price for such series in effect immediately prior to each such issuance of Additional Stock shall forthwith (except as otherwise provided in this Section 10(a)(viii)) be adjusted to a price equal to (calculated to the nearest cent) the product obtained by multiplying the Conversion Price for the Preferred Stock in effect immediately prior to such issuance of Additional Stock by a fraction, the numerator of which is equal to the sum of (x) the total number of shares of Common Stock outstanding (including any shares of Common Stock previously deemed to have been issued pursuant to Section 10(a)(viii)(E)(l) or Section 10(a)(viii)(E)(2) (to the extent not actually issued)) immediately prior to such issuance of Additional Stock plus (y) the number of shares of Common Stock that the aggregate consideration received by this Corporation for such issuance of Additional Stock would purchase at the Conversion Price for Preferred Stock in effect immediately prior to such issuance of Additional Stock, and the denominator of which is equal to the sum of (x) the total number of shares of Common Stock outstanding (including any shares of Common Stock previously deemed to have been issued pursuant to Section 10(a)(viii)(E)(l) or Section 10(a)(viii)(E)(2) (to the extent not actually issued)) immediately prior to such issuance of Additional Stock plus (y) the number of shares of Additional Stock issued. In the event that the Corporation issues or sells, or is deemed to have issued or sold, Additional Stock (the “First Dilutive Issuance”), then in the event that the Corporation issues or sells, or is deemed to have issued or sold, Additional Stock other than the First Dilutive Issuance as a part of the same transaction or series of related transactions as the First Dilutive Issuance (a “Subsequent Dilutive Issuance”), then and in each such case upon a Subsequent Dilutive Issuance, the Conversion Price shall be reduced to the Conversion Price that would have been in effect had the First Dilutive Issuance and each Subsequent Dilutive Issuance all occurred on the closing date of the First Dilutive Issuance.

 

     (B)          Except to the limited extent provided for in subsections Section 10(a)(viii)(E)(3) or Section 10(a)(viii)(E)(4), no adjustment of the Conversion Price for Preferred

 

  

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Stock pursuant to this subsection (viii) shall have the effect of increasing any such Conversion Price above the Conversion Price in effect immediately prior to such adjustment.

 

    (C)          In the case of the issuance of Additional Stock for cash, the consideration shall be deemed to be the amount of cash paid therefor before deducting any discounts, commissions or other expenses allowed, paid or incurred by the Corporation for any underwriting or otherwise in connection with the issuance and sale thereof.

 

    (D)         In the case of the issuance of Additional Stock for a consideration in whole or in part other than cash, the consideration other than cash shall be deemed to be the fair value thereof as determined in good faith by the Corporation’s Board of Directors irrespective of any accounting treatment.

 

    (E)          In the case of the issuance (whether before, on or after the Filing Date) of (i) options to purchase or rights to subscribe for Common Stock, (ii) securities by their terms convertible into or exchangeable for Common Stock or (iii) options to purchase or rights to subscribe for securities by their terms convertible into or exchangeable for Common Stock, the following provisions shall apply for all purposes of this Section 10(a)(viii):

 

   (1)           The aggregate maximum number of shares of Common Stock deliverable upon exercise (assuming the satisfaction of any conditions to exercisability, including without limitation, the passage of time, but without taking into account potential anti-dilution adjustments) of such options to purchase or rights to subscribe for Common Stock shall be deemed to have been issued at the time such options or rights were issued and for a consideration equal to the consideration (determined in the manner provided in Section 10(a)(viii)(C) and Section 10(a)(viii)(D)) if any, received by the Corporation upon the issuance of such options or rights plus the minimum exercise price provided in such options or rights (without taking into account potential anti-dilution adjustments) for the Common Stock covered thereby.

 

   (2)           The aggregate maximum number of shares of Common Stock deliverable upon conversion of or in exchange (assuming the satisfaction of any conditions to convertibility or exchangeability, including without limitation, the passage of time, but without taking into account potential anti-dilution adjustments) for any such convertible or exchangeable securities or upon the exercise of options to purchase or rights to subscribe for such convertible or exchangeable securities and subsequent conversion or exchange thereof shall be deemed to have been issued at the time such securities were issued or such options or rights were issued and for a consideration equal to the consideration, if any, received by the Corporation for any such securities and related options or rights (excluding any cash received on account of accrued interest or accrued dividends), plus the minimum additional consideration, if any, to be received by the Corporation (without taking into account potential anti-dilution adjustments) upon the conversion or exchange of such securities or the exercise of any related options or rights (the consideration in each case to be determined in the manner provided in Section 10(a)(viii)(C) and Section 10(a)(viii)(D)).

 

    (3)           In the event of any change in the number of shares of Common

  

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Stock deliverable or in the consideration payable to this Corporation upon exercise of such options or rights or upon conversion of or exchange for such convertible or exchangeable securities, including, but not limited to, a change resulting from the anti­dilution provisions thereof, the Conversion Price for Preferred Stock, to the extent in any way affected by or computed using such options, rights or securities, shall be recomputed to reflect such change, but no further adjustment shall be made for the actual issuance of Common Stock or any payment of such consideration upon the exercise of any such options or rights or the conversion or exchange of such securities.

 

   (4)           Upon the expiration of any such options or rights, the termination of any such rights to convert or exchange or the expiration of any options or rights related to such convertible or exchangeable securities, the Conversion Price for the Preferred Stock, to the extent in any way affected by or computed using such options, rights or securities or options or rights related to such securities, shall be recomputed to reflect the issuance of only the number of shares of Common Stock (and convertible or exchangeable securities that remain in effect) actually issued upon the exercise of such options or rights, upon the conversion or exchange of such securities or upon the exercise of the options or rights related to such securities (but giving effect to any intervening adjustments that may have been made with respect to the Preferred Stock).

 

   (5)           The number of shares of Common Stock deemed issued and the consideration deemed paid therefor pursuant to Section 10(a)(viii)(E)(l) or Section 10(a)(viii)(E)(2) shall be appropriately adjusted to reflect any change, termination or expiration of the type described in either Section 10(a)(viii)(E)(3) or Section 10(a)(viii)(E)(4).

 

    (F)          “Additional Stock” shall mean any shares of Common Stock issued (or deemed to have been issued pursuant to Section 10(a)(viii)(E)) by this Corporation after the Filing Date for so long as any shares of Preferred Stock remain outstanding, other than:

 

                   (1)          shares of Common Stock or Common Stock Equivalents issued pursuant to an event or transaction described in Section 10(a)(i) or Section 10(a)(ii);

 

                   (2)          shares of Common Stock issued pursuant to an event or transaction described in Section 10(c)(iii);

 

                   (3)          shares of Common Stock issued or issuable upon conversion of shares of Preferred Stock;

 

                   (4)          shares of Common Stock issued (or deemed to have been issued pursuant to Section 10(a)(viii)(E)) in connection with a Reorganization Event.

 

 (b)           The Corporation may make such decreases in the Conversion Price, in addition to any other decreases required by this Section 10, if the Board of Directors deems it advisable to avoid or diminish any income tax to holders of the Common Stock resulting from any dividend or distribution of shares of Common Stock (or issuance of rights or warrants to acquire shares of Common Stock) or from any event treated as such for income tax purposes or for any other reason.

  

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 (c)           (i) All adjustments to the Conversion Price shall be calculated to the nearest 1/10 of a cent. No adjustment in the Conversion Price shall be required if such adjustment would be less than $0.01; provided, that any adjustments which by reason of this subparagraph are not required to be made shall be carried forward and taken into account in any subsequent adjustment; provided further that on the applicable Conversion Date adjustments to the Conversion Price will be made with respect to any such adjustment carried forward and which has not been taken into account before such date.

 

(ii)           No adjustment to the Conversion Price shall be made if Holders may participate in the transaction that would otherwise give rise to an adjustment, as a result of holding the Preferred Stock (including without limitation pursuant to Section 4 hereof), without having to convert the Preferred Stock, as if they held the full number of shares of Common Stock into which a share of the Preferred Stock may then be converted.

 

        (iii)         The Conversion Price shall not be adjusted:

 

 (A)            upon the issuance of any shares of Common Stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on the Corporation’s securities and the investment of additional optional amounts in shares of Common Stock under any such plan;

 

 (B)             upon the issuance of any shares of Common Stock or rights or warrants to purchase those shares pursuant to any present or future employee, director or consultant benefit plan or program of or assumed by the Corporation or any of its subsidiaries;

 

 (C)             upon the issuance of any shares of Common Stock pursuant to any option, warrant, right or exercisable, exchangeable or convertible security outstanding as of the date shares of the Preferred Stock were first issued and not substantially amended thereafter;

 

             (D)             for accrued and unpaid dividends on the Preferred Stock.

 

 (d)           Whenever the Conversion Price is to be adjusted in accordance with Section 10(a) or Section 10(b), the Corporation shall: (i) compute the Conversion Price in accordance with Section 10(a) or Section 10(b), taking into account the $0.01 threshold set forth in Section 10(c) hereof; (ii) as soon as practicable following the occurrence of an event that requires an adjustment to the Conversion Price pursuant to Section 10(a) or Section 10(b), taking into account the $0.01 threshold set forth in Section 10(c) hereof (or if the Corporation is not aware of such occurrence, as soon as practicable after becoming so aware), provide, or cause to be provided, a written notice to the Holders of the occurrence of such event; and (iii) as soon as practicable following the determination of the revised Conversion Price in accordance with Section 10(a) or Section 10(b) hereof, provide, or cause to be provided, a written notice to the Holders setting forth in reasonable detail the method by which the adjustment to the Conversion Price was determined and setting forth the revised Conversion Price.

 

        Section 11.    Reorganization Events.

 

 (a)           In the event that, for so long as any shares of Preferred Stock remain outstanding, there occurs:

  

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                (i)       any consolidation, merger or other similar business combination of the Corporation with or into another Person, in each case pursuant to which the Common Stock will be converted into cash, securities or other property of the Corporation or another Person;

 

           (ii)      any sale, transfer, lease or conveyance to another Person of all or substantially all of the property and assets of the Corporation, in each case pursuant to which the Common Stock will be converted into cash, securities or other property of the Corporation or another Person;

 

         (iii)     any reclassification of the Common Stock into securities including securities other than the Common Stock; or

 

         (iv)    any statutory exchange of the outstanding shares of Common Stock for securities of another Person (other than in connection with a merger or acquisition);

 

 (any such event specified in this Section 11(a), a “Reorganization Event”), then each share of Preferred Stock outstanding immediately prior to such Reorganization Event shall, at the option of the Holders, either convert into the kind of securities, cash and other property receivable in such Reorganization Event by the holder (excluding the counterparty to the Reorganization Event or an Affiliate of such counterparty) of that number of shares of Common Stock into which the share of Preferred Stock would then be convertible (such securities, cash and other property, the “Exchange Property”) plus an amount in cash equal to any accrued and unpaid dividends on such Preferred Stock, or be entitled to receive liquidating distributions in accordance with Section 5 as if such Reorganization Event were a liquidation of the Corporation.

 

 (b)           In the event that holders of the shares of Common Stock have the opportunity to elect the form of consideration to be received in such transaction, the Holders shall likewise be allowed to make such an election.

 

 (c)           The above provisions of this Section 11 shall similarly apply to successive Reorganization Events and the provisions of Section 10 shall apply to any shares of capital stock of the Corporation (or any successor) received by the holders of the Common Stock in any such Reorganization Event.

 

 (d)           The Corporation (or any successor) shall, within seven (7) days of the consummation of any Reorganization Event, provide written notice to the Holders of such consummation of such event and of the kind and amount of the cash, securities or other property that constitutes the Exchange Property. Failure to deliver such notice shall not affect the operation of this Section 11.

 

 (e)           The Corporation shall not enter into any agreement for a transaction constituting a Reorganization Event unless such agreement does not interfere with or prevent (as applicable) (i) conversion of the Preferred Stock into the Exchange Property or (ii) the ability of Holders to receive, at their option, a liquidating distribution in accordance with Section 5, in each case, in a manner that is consistent with and gives effect to this Section 11.

 

        Section 12.    Voting Rights.

  

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 (a)           Holders shall not have any voting rights except as set forth in this Section 12 or as otherwise from time to time required by law.

 

       (b)           Voting Rights.

 

        (i)      So long as any shares of Preferred Stock are outstanding, in addition to any other vote or written consent of shareholders required by law or by the Articles of Incorporation, the vote or written consent of the holders of at least two-thirds of the outstanding shares of Preferred Stock (subject to the last paragraph of this Section 12(b)(i)) at the time outstanding and entitled to vote thereon, voting together as a single class, given in person or by proxy, either in writing without a meeting or by vote at any meeting called for the purpose, shall be necessary for effecting or validating:

 

  (A)          Authorization of Senior Stock. Any amendment or alteration (including by means of a merger, consolidation or otherwise) of the Corporation’s Articles of Incorporation (including this Certificate of Determination) to authorize, or create, or increase the authorized amount of, any shares of, or any securities convertible into shares of any class or series of the Corporation’s capital stock ranking senior to the Preferred Stock in the payment of dividends or in the distribution of assets on any liquidation, dissolution or winding up of the Corporation; or

 

  (B)          Amendment of Preferred Stock. Any amendment, alteration or repeal (including by means of a merger, consolidation or otherwise) of any provision of the Corporation’s Articles of Incorporation (including this Certificate of Determination) or the Corporation’s Bylaws that would alter or change the rights, preferences or privileges of the Preferred Stock so as to affect them adversely;

 

provided, however, that for all purposes of this Section 12(b), (1) any increase in the amount of the Corporation’s authorized but unissued shares of preferred stock, (2) any increase in the amount of the Corporation’s authorized or issued Preferred Stock, and (3) to the extent allowed by California law, the creation and issuance, or an increase in the authorized or issued amount, of other series of preferred stock of the Corporation ranking equally with or junior to the Preferred Stock either or both with respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and/or the distribution of assets upon the liquidation, dissolution or winding up of the Corporation, will not, in and of itself, be deemed to materially and adversely affect the rights, preferences, privileges or voting powers of the Preferred Stock.

 

           (ii)     So long as any shares of Preferred Stock are outstanding a Holder shall be entitled to vote, with a number of votes equal to that number of shares of Common Stock into which such Holder’s shares of Preferred Stock would then be convertible, together with the holders of Common Stock acting as a single class, in person or by proxy, either in writing without a meeting or by vote at any meeting called for the purpose, for effecting or validating any consummation of any Reorganization Event, as defined in Section 11 above;

 

        (iii)    Notwithstanding the foregoing, Holders shall not have any voting rights if, at or prior to the effective time of the act with respect to which such vote would otherwise be required, all outstanding shares of Preferred Stock shall have been converted into shares of Common Stock.

 

  

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 (c)           Change for Clarification. Without the vote or written consent of the holders of the Preferred Stock, so long as such action does not adversely affect the rights, preferences, privileges and voting powers, and limitations and restrictions thereof, of the Preferred Stock, the Corporation may amend, alter, supplement or repeal any terms of the Preferred Stock:

 

           (i)      to cure any ambiguity, or to cure, correct or supplement any provision contained in this Certificate of Determination that may be ambiguous, defective or inconsistent; or

 

                (ii)     to make any provision with respect to matters or questions relating to the Preferred Stock that is not inconsistent with the provisions of this Certificate of Determination.

 

 (d)       Procedures for Voting and Written Consents. The rules and procedures for calling and conducting any meeting of the holders of Preferred Stock (including, without limitation, the fixing of a record date in connection therewith), the solicitation and use of proxies at such a meeting, the obtaining of written consents and any other aspect or matter with regard to such a meeting or such written consents shall be governed by the requirements of the Articles of Incorporation, the Bylaws, applicable law and any national securities exchange or other trading facility, if any, on which the Preferred Stock or Common Stock is listed or traded at the time.

 

        Section 13.    Fractional Shares.

 

 (a)           No fractional shares of Common Stock will be issued as a result of any conversion of shares of Preferred Stock.

 

 (b)           In lieu of any fractional share of Common Stock otherwise issuable in respect of any mandatory conversion pursuant to Section 8 hereof, the Corporation shall pay an amount in cash (computed to the nearest cent) equal to the fair value of a fraction, which fair value shall be determined based upon the same fraction of the Closing Price of the Common Stock determined as of the second Trading Day immediately preceding the applicable Conversion Date.

 

 (c)           If more than one share of the Preferred Stock is surrendered for conversion at one time by or for the same Holder, the number of full shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the aggregate number of shares of the Preferred Stock so surrendered.

 

        Section 14.    Reservation of Common Stock.

 

 (a)           The Corporation shall at all times reserve and keep available out of its authorized and unissued Common Stock solely for issuance upon the conversion of shares of Preferred Stock as provided in this Certificate of Determination free from any preemptive or other similar rights, such number of shares of Common Stock as shall from time to time be issuable upon the conversion of all the shares of Preferred Stock (assuming receipt of Shareholder Approvals and, if necessary, regulatory approvals), then outstanding, based on the Applicable Conversion Price. For purposes of this Section 14(a), the number of shares of Common Stock that shall be deliverable upon the conversion of all outstanding shares of Preferred Stock shall be computed as if at the time of computation all such outstanding shares were held by a single Holder and there was regulatory impediment to such conversion,

  

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 (b)           All shares of Common Stock delivered upon conversion of the Preferred Stock shall be duly authorized, validly issued, fully paid and non-assessable, free and clear of all liens, claims, security interests and other encumbrances.

 

 (c)           Prior to the delivery of any securities that the Corporation shall be obligated to deliver upon conversion of the Preferred Stock, the Corporation shall use its reasonable best efforts to comply with all federal and state laws and regulations thereunder requiring the registration of such securities with, or any approval of or consent to the delivery thereof by, any governmental authority.

 

 (d)           The Corporation hereby covenants and agrees that it will list and keep listed on the Trading Market, so long as the Common Stock shall be so listed on the Trading Market, all the Common Stock issuable upon conversion of the Preferred Stock.

 

        Section 15.    Limitations on Beneficial Ownership.

 

  Notwithstanding anything to the contrary contained herein, if the number of shares to be issued to a Holder of Preferred Stock upon a conversion to Common Stock would cause the Holder, together with any holdings of Common Stock already held directly or indirectly by the Holder, or by any other Person whose Common Stock would be aggregated with such Holder’s Common Stock for purposes of any bank regulation, to (i) require prior approval of any banking regulator to acquire those shares, (ii) violate any bank regulation, or (iii) collectively be deemed to own, control or have the power to vote securities which (assuming, for this purpose only, full conversion and/or exercise of such securities by the Holder) would represent more than 9.9% of the voting securities of the Company outstanding at such time (each, a “Violation”), the Corporation will not issue shares of the Corporation to the extent, and only to the extent, such issuance would result in a Violation until shares may be issued without causing a Violation (the third Business Day following the date such shares may be issued without causing a Violation, the “Section 15 Conversion Date”), and then only in accordance with the terms and conditions of any required approvals. By accepting ownership of the Preferred Stock, and as a condition to the Corporation’s obligation to issue Common Stock upon conversion or to pay any further dividends to such Holder, each Holder agrees (i) to provide the Corporation all such customary and necessary information and documents as the Corporation may reasonably require in order for the Corporation to determine the status of compliance with any potential bank regulatory approval requirements; provided, that such Holder shall not be obligated to provide any information, the disclosure of which either (x) is prohibited by applicable law or contract (and such Holder shall not be obligated to seek the consent of any person to such disclosure) or (y) in the reasonable judgment of such Holder’s investment adviser, would be adverse to the interests of such Holder or such investment adviser or their respective partners or clients, and (ii) that the Holder shall be solely responsible at the Holder’s sole expense for obtaining any such approvals, but shall keep the Corporation fully informed as to the status of the Holder’s efforts to obtain approvals and the resolution of any applications for approval. To the extent such approvals are not obtained, the shares of Preferred Stock that are not convertible shall remain outstanding and accrue dividends in accordance with the provisions of Section 4. Notwithstanding any other provision of this Certificate of Determination (as it may hereafter be amended) or of the Preferred Stock, during any period of delay beyond the Mandatory Conversion Date because of

  

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the need for a regulatory approval as described in this Section 15, the Corporation shall not be obligated to pay any damages for delay in issuance and delivery of the Common Stock.

 

        Section 16.    Replacement Certificates.

 

 (a)           The Corporation shall replace any mutilated certificate at the Holder’s expense upon surrender of that certificate to the Corporation. The Corporation shall replace certificates that become destroyed, stolen or lost at the Holder’s expense upon delivery to the Corporation of satisfactory evidence that the certificate has been destroyed, stolen or lost, together with any indemnity that may be required by the Corporation.

 

 (b)           The Corporation shall not be required to issue any certificates representing the Preferred Stock on or after the Mandatory Conversion Date. In place of the delivery of a replacement certificate following the Mandatory Conversion Date, the Corporation, upon delivery of the evidence and indemnity described in clause (a) above, shall deliver the shares of Common Stock pursuant to the terms of the Preferred Stock formerly evidenced by the certificate.

 

        Section 17.    Miscellaneous.

 

 (a)           All notices referred to herein shall be in writing, and, unless otherwise specified herein, all notices hereunder shall be deemed to have been given upon the earlier of receipt thereof or five (5) Business Days after the mailing thereof if sent by registered or certified mail (unless first-class mail shall be specifically permitted for such notice under the terms of this Certificate of Determination) with postage prepaid, addressed: (i) if to the Corporation, to its office at 300 Park Marina Circle, Redding California 96001, Attention: President and Chief Executive Officer, with a copy to the Corporation’s Corporate Secretary, or (ii) if to any Holder, to such Holder at the address of such Holder as listed in the stock record books of the Corporation, or (iii) to such other address as the Corporation or any such Holder, as the case may be, shall have designated by notice similarly given.

 

 (b)           The Corporation shall pay any and all stock transfer and documentary stamp taxes that may be payable in respect of any issuance or delivery of shares of Preferred Stock or shares of Common Stock or other securities issued on account of Preferred Stock pursuant hereto or certificates representing such shares or securities. The Corporation shall not, however, be required to pay any such tax that may be payable in respect of any transfer involved in the issuance or delivery of shares of Preferred Stock or Common Stock or other securities in a name other than that in which the shares of Preferred Stock with respect to which such shares or other securities are issued or delivered were registered, or in respect of any payment to any Person other than a payment to the registered holder thereof, and shall not be required to make any such issuance, delivery or payment unless and until the Person otherwise entitled to such issuance, delivery or payment has paid to the Corporation the amount of any such tax or has established, to the satisfaction of the Corporation, that such tax has been paid or is not payable.

 

 (c)           All payments on the shares of Preferred Stock shall be subject to withholding and backup withholding of tax to the extent required by applicable law, subject to applicable exemptions, and amounts withheld, if any, shall be treated as received by the holders thereof.

 

  

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 (d)           No share of Preferred Stock shall have any rights of preemption whatsoever under this Certificate of Determination as to any securities of the Corporation, or any: warrants, rights or options issued or granted with respect thereto, regardless of how such securities, or such warrants, rights or options, may be designated issued or granted.

 

 (e)           The shares of Preferred Stock shall not have any voting powers, preferences or relative, participating, optional or other rights, or qualifications, limitations or restrictions thereof, other than as set forth herein or in the Corporation’s Articles of Incorporation or as provided by applicable law.

 

 (f)           The Corporation covenants not to treat the Preferred Stock as preferred stock for purposes of Section 305 of the Internal Revenue Code of 1986, as amended, except as otherwise required by applicable law.

 

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 RESOLVED, that all actions taken by the officers and directors of the Corporation or any of them in connection with the foregoing resolutions through the date hereof be, and they hereby are, ratified and approved.

 

 IN WITNESS WHEREOF, the undersigned have caused this Certificate of Determination to be executed this 15th day of April, 2010.

	 		  	
	 	
Michael J. Cushman

	  	
Leo J. Graham

	 	
President and Chief Executive Officer

	  	
Corporate Secretary

 

 We further declare under penalty of perjury under the laws of the State of California that the matters set forth in this certificate are true and correct of our own knowledge.

 

	 		  	
	 	
Michael J. Cushman

	  	
Leo J. Graham

	 	
President and Chief Executive Officer

	  	
Corporate Secretary

 

Date: April 15, 2010.

 

  

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