Document:

Unassociated Document

    EXHIBIT
10.9

    

    STANDBY
EQUITY PURCHASE AGREEMENT

    

    Standby Equity Purchase
Agreement (this "Agreement"), dated as
of August 24, 2010, by and among ProGreen Properties, Inc., a Delaware
corporation (the “Company”), and
LeadDog Capital, LP (the “Investor”).

    

    WHEREAS,
the parties desire that, upon the terms and subject to the conditions contained
herein, the Investor shall invest up to $2,500,000 (the “Commitment Amount”)
to purchase the Company’s common stock, $.0001 par value per share (the "Common Stock”);
and

    

    WHEREAS,
such investments will be made in reliance upon the provisions of Section 4(2)
under the Securities Act of 1933, as amended (the “1933 Act”), Rule 506
of Regulation D, and the rules and regulations promulgated
thereunder.

     

    NOW
THEREFORE, the Company and the Investor hereby agree as follows:

     

    1.           Definitions.  As
used in this Agreement, the following terms shall have the following meanings
specified or indicated, and such meanings shall be equally applicable to the
singular and plural forms of the defined terms.

    

    “1933
ACT” shall mean the Securities Act of 1933, as it may be amended.

    

    “1934
ACT” shall mean the Securities Exchange Act of 1934, as it may be
amended.

    
 

    “AFFILIATE”
shall have the meaning specified in Section 5(e).

    

    “AGREEMENT”
shall mean this Standby Equity Purchase Agreement.

    

    “BUY-IN”
shall have the meaning specified in Section 6.

    

    “BUY-IN
ADJUSTMENT AMOUNT” shall have the meaning specified in Section 6.

    

    “CLOSING”
shall have the meaning specified in Section 2(h).

    

    “CLOSING
DATE” shall mean, as defined in Section 2(h) and subject to the conditions set
forth in Section 2(h), each date which is eleven (11) Trading Days following the
Put Notice Date.

    

    “COMMITMENT
AMOUNT” shall mean $2,500,000.

    

    “COMMON
STOCK” shall mean the Common Stock, par value $.0001 per share, of the
Company.

    

    “COMPANY
INDEMNITEES” shall have the meaning specified in Section 10(b).

    

    “CONTROL”
or “CONTROLS” shall have the meaning specified in Section 5(e).

    

    “COVERING
SHARES” shall have the meaning specified in Section 6.

    

    “EDGAR”
shall mean the Electronic Date Gathering Analysis and Retrieved
system.

    

     “EFFECTIVE
DATE” shall mean the date the SEC declares effective the Registration Statement
covering the transactions described in the Agreement.

    
      
         

      

      
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     “EXECUTION
DATE” shall mean the date this Agreement is executed by the Company and
Investor.

    

     “INVESTOR
INDEMNITEES” shall have the meaning specified in Section 10(a).

    

    “INDEMNIFIED
LIABILITIES” shall have the meaning specified in Section 10(a).

    

    “INEFFECTIVE
PERIOD” shall mean any period of time that the Registration Statement becomes
ineffective or unavailable for use for the sale or resale, as applicable, of any
or all of the Registrable Securities for any reason (or in the event the
prospectus is not current and deliverable) during any time period.

    

    “INVESTOR”
shall mean the undersigned investor.

    

    “MAJOR
TRANSACTION” shall have the meaning specified in Section 2(g).

    

    “MARKET
PRICE” shall mean the lowest daily VWAP of the Common Stock on the Principal
Market during the Pricing Period.

    

    “MATERIAL
ADVERSE EFFECT” shall have the meaning specified in Section 4(a).

    

     “MAXIMUM
COMMON STOCK ISSUANCE” shall have the meaning specified in Section
2(i).

    

    “MINIMUM
ACCEPTABLE PRICE” shall mean the share price chosen by the Company in its sole
and absolute discretion and set forth in the Put Notice.

     

     “OPEN
PERIOD” shall mean the period beginning on and including the first Trading Day
immediately following the Effective Date and ending on the earlier of (i) the
date which is one day and twenty-four (24) months from the Effective Date and
(ii) termination of the Agreement in accordance with Section 9.

    

    “PAYMENT
AMOUNT” shall have the meaning specified in Section 2(l).

      

    “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.

    

    “PRICING
PERIOD” shall mean the ten (10) consecutive Trading Days after the Put Notice
Date.

    

    “PRINCIPAL
MARKET” shall have the meaning specified in Section 2(f).

    

    “PROSPECTUS”
shall mean the prospectus, preliminary prospectus and supplemental prospectus
used in connection with the Registration Statement.

    

    “PURCHASE
AMOUNT” shall mean the total amount being paid by the Investor on a particular
Closing Date to purchase the Shares.

     

    "PURCHASE
PRICE" shall mean 92% of Market Price during the Pricing Period.

    

    “PUT
AMOUNT” shall mean, up to a maximum of $200,000.

       

    “PUT
NOTICE” shall mean a written notice sent to the Investor by the Company stating
the Put Amount pursuant to the terms of the Agreement and stating the current
number of Shares issued and outstanding on such date.

 

    
      
         

      

      
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    “PUT
NOTICE DATE” shall mean the Trading Day immediately following the day on which
the Investor receives a Put Notice, however a Put Notice shall be deemed
delivered on (x) the Trading Day it is received by facsimile or otherwise by the
Investor if such notice is received prior to 12:00 noon Eastern Time (receipt
being deemed to occur if the Company possess a facsimile confirmation showing
completed transmission by such time), or (y) the immediately succeeding Trading
Day if it is received by facsimile or otherwise after 12:00 noon Eastern Time on
a Trading Day (receipt being documented as described in (x)
above).  No Put Notice may be deemed delivered on a day that is not a
full Trading Day.

    

    “REGISTRABLE
SECURITIES” shall mean the Shares being registered in the Registration
Statement, which shall comprise a maximum of 10,000,000 shares of Common
Stock.

    

    “REGISTRATION
STATEMENT” means the registration statement of the Company filed under the 1933
Act covering the Shares to be registered in this transaction.

    

    “RELATED
PARTY” shall have the meaning specified in Section 5(e).

    

    “REPURCHASE
EVENT” shall have the meaning specified in Section 2(l).

    

    “RESOLUTIONS”
shall have the meaning specified in Section 8(d).

    

    “SEC”
shall mean the Securities & Exchange Commission.

    

    “SEC
DOCUMENTS” shall have the meaning specified in Section 4(f).

    

    “SECURITIES”
or “SHARES” shall mean the shares of Common Stock issued pursuant to the terms
of the Agreement.

    

    “SOLD
SHARES” shall have the meaning specified in Section 6.

    

    “SUBSIDIARIES”
shall have the meaning specified in Section 4(a).

    

    “TRADING
DAY” shall mean any day on which the Principal Market for the Company’s common
stock is open for trading.

    

    “VALUATION
EVENT” shall have the meaning specified in Section 2(j).

    

    “VOLUME
WEIGHTED AVERAGE PRICE” or “VWAP” shall be as reported by Bloomberg Financial
Markets (“Bloomberg”), or if
not available through Bloomberg because of delisting, then the average of the
bid prices of any market makers for the Company’s Common Stock as reported by
the National Quotation Bureau, Inc.

    

    2.           Purchase And Sale Of Common
Stock

    

    a.           Purchase and Sale of Common
Stock.  Upon the terms and conditions  set forth
herein, the Company shall issue and sell to the Investor, and the Investor shall
purchase from the Company, up to that number of shares of common stock having an
aggregate Purchase Price of  $2,500,000.

    

    b.           Delivery of Put
Notices.      Subject to the terms and
conditions of this Agreement the Company may, in its sole discretion, deliver a
Put Notice to the Investor which states the number of Shares which the Company
intends to sell to the Investor during the Pricing Period.   A
copy of the form of Put Notice is attached hereto and made a part hereof as
Exhibit A. The
Put Amount may be a maximum of up to $200,000. Once the Put Notice is received
by the Investor, the Put Notice shall not be terminated, withdrawn or otherwise
revoked by the Company except as set forth in this Agreement.  During
the Open Period, the Company shall not be entitled to submit a Put Notice until
after the previous closing has been completed. The Purchase Price shall be equal
to 92% of the Market Price. The Market Price shall be equal to the lowest daily
VWAP of the Common Stock during the Pricing Period.

    
      
         

      

      
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    The Investor agrees not to sell any
shares below the Minimum Acceptable Price on any Trading Day of the applicable
Pricing Period.  In the event that the Purchase Price is less than the
Minimum Acceptable Price for any Trading Day during a Pricing Period, then in
such event the VWAP on that Trading Day shall not be counted toward the Purchase
Price calculation and the trading volume on that Trading Day shall not be
counted toward Investor’s purchase obligation as set forth in Section 2
(d).

     

    c.           Interest.   The
parties agree that any interest payable under this Agreement shall not exceed
the maximum amount permitted under any applicable law. If a law, is finally
interpreted so that the interest in connection with this Agreement exceeds the
permitted limits, then: (i) any such interest shall be reduced by the amount
necessary to reduce the interest to the permitted limit; and (ii) any sums
already collected (if any) from the Company which exceed the permitted limits
will be refunded to the Company.

    

    d.           Investor’s Obligation to
Purchase Shares.  Subject to the conditions set forth in this
Agreement, following the Investor's receipt of a validly delivered Put Notice,
the Investor shall be required to purchase from the Company during the related
Pricing Period that number of Shares having an aggregate Purchase Price equal to
the lesser of (i) the Put Amount set forth in the Put Notice, and (ii) 10% of
the aggregate trading volume during the applicable Pricing Period (but excluding
block trades of 10,000 shares or more) multiplied by the Purchase Price, but
only if said Shares are freely tradable, are not subject to stop transfer
instructions and are delivered to the Investor per its written instructions,
pursuant to Section 2(h).

    

    e.           Limitation on Investor's
Obligation to Purchase Shares.  Notwithstanding anything to the
contrary in this Agreement, in no event shall the Investor be required to
purchase, and the Company shall in no event sell to the Investor, that number of
Shares, which when added to the sum of the number of Shares beneficially owned
(as such term is defined under Section 13(d) and Rule 13d-3 of the Securities
Exchange Act of 1934, as may be amended, (the “1934 Act”)), by the
Investor, would exceed 4.99% of the number of Shares outstanding on the Put
Notice Date for such Pricing Period, as determined in accordance with Rule
13d-1(j) under the 1934 Act. Each Put Notice shall include a representation of
the Company as to the number of Shares of Common Stock outstanding on the
related Put Notice Date as determined in accordance with Section 13(d) of the
1934 Act. In the event that the number of Shares of Common Stock outstanding as
determined in accordance with Section 13(d) of the 1934 Act is different on any
date during a Pricing Period than on the Put Notice Date associated with such
Pricing Period, then the number of Shares of Common Stock outstanding on such
date during such Pricing Period shall govern for purposes of determining whether
the Investor would be acquiring beneficial ownership of more than 4.99% of the
number of Shares of Common Stock outstanding during such period.

    

    f.           Common Stock Listing
Requirement.  At all times during the period beginning on the
related Put Notice Date and ending on and including the related Closing Date,
the Common Stock shall have been listed on The American Stock Exchange, Inc. or
The New York Stock Exchange, Inc. or designated on the Nasdaq National Market,
The Nasdaq SmallCap Market, or the National Association of Securities Dealer’s,
Inc. OTC electronic bulletin board (the "Principal Market")
and shall not have been suspended from trading thereon for a period of five (5)
consecutive Trading Days during the Open Period; and the Company shall not have
been notified of any pending or threatened proceeding or other action to delist
or suspend the Common Stock.

    

     
g.  For purposes of this Agreement, a "Major Transaction"
shall be deemed to have occurred at the closing of any of the following events:
(i) the consolidation, merger or other business combination of the Company with
or into another entity (other than pursuant to a migratory merger effected
solely for the purposes of changing the jurisdiction of incorporation of the
Company) (ii) the sale or transfer of all or substantially all of the Company's
assets; or (iii) the consummation of a purchase, tender or exchange offer made
to, and accepted by, the holders of more than 30% of the economic interest in,
or the combined voting power of all classes of voting stock of, the
Company.

    
      
         

      

      
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    h.           Mechanics of Purchase of
Shares by Investor.  Subject to the satisfaction of the
conditions set forth in Sections 2(f), 7 and 8, each closing of the purchase by
the Investor of Shares (each a "Closing") shall occur
on the date which is eleven (11) Trading Days following the Put Notice Date
(each a "Closing
Date").  On or prior to each Closing Date, (i) the Company
shall cause the Transfer Agent to electronically transmit the shares of Common
Stock by crediting the account of Investors’ broker with The Depository Trust
Company (“DTC”)
through its Deposit Withdrawal Agent Commission (“DWAC”) system, and
provide proof satisfactory to the Investor of such delivery and (ii) the
Investor shall deliver to the Company the Purchase Price to be paid for such
Shares (after receipt of confirmation of delivery of such Shares), determined as
aforesaid, by wire transfer.

    

    i.           Overall Limit on Common
Stock Issuable. Notwithstanding anything contained herein to the
contrary, if during the Open Period the Company becomes listed on an exchange
that limits the number of shares of Common Stock that may be issued without
shareholder approval, then the number of Shares issuable by the Company and
purchasable by the Investor, including the shares of Common Stock issuable to
the Investors pursuant to Section 11(b), shall not exceed that number of the
shares of Common Stock that may be issuable without shareholder approval, (the
"Maximum Common Stock
Issuance"), unless the issuance
of Shares, including any Common Stock to be issued pursuant to Section 11(b), in
excess of the Maximum Common Stock Issuance shall first be approved by the
Company's shareholders. The parties understand and agree that the Company's
failure to seek or obtain such shareholder approval shall in no way adversely
affect the validity and due authorization of the issuance and sale of Shares
hereunder or the Investor's obligation in accordance with the terms and
conditions hereof to purchase a number of Shares in the aggregate up to the
Maximum Common Stock Issuance limitation, and that such approval pertains only
to the applicability of the Maximum Common Stock Issuance limitation provided in
this Section 2(i).

    

    j. "Valuation Event"
shall mean an event in which the Company at any time during a “Pricing Period”
takes any of the following actions:

    

    (i)        subdivides
or combines its Common Stock;

    (ii)       pays
a dividend in Common Stock or makes any other purchase of its
Common Stock, except for dividends paid with respect to the Preferred
Stock;

    
      (iii)      issues
any options or other rights to subscribe for or purchase Common Stock and the
price per share for which Common Stock may at any time thereafter be issuable
pursuant to such options or other rights shall be less than the VWAP for each of
the five (5) Trading Days immediately prior to such issuance;

    

    (iv)      issues
any securities convertible into or exchangeable for Common Stock and the
consideration per share for which shares of Common Stock may at any time
thereafter be issuable pursuant to the terms of such convertible or exchangeable
securities shall be less than the VWAP for each of the five (5) Trading Days
immediately prior to such issuance; or

    
      
         

      

      
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    (v)       issues
shares of Common Stock otherwise than as provided in the foregoing subsections
(i) through (iv), at a price per share less, or for other consideration lower,
than the VWAP for each of the five (5) Trading Days immediately prior to such
issuance, or without consideration.

    

    k.           The
Company agrees that it shall not take any action that would result in a
Valuation Event occurring during a Pricing Period.

    

    l.             Delisting;
Suspension.        If at any time
during the Open Period or within thirty (30) calendar days after the end of the
Open Period, (i) the Registration Statement, after it has been declared
effective, shall not remain effective and available for sale of all the
Registrable Securities, (ii) the Common Stock shall not be listed on the
Principal Market or shall have been suspended from trading thereon (excluding
suspensions of not more than one trading day resulting from business
announcements by the Company) or the Company shall have been notified of any
pending or threatened proceeding or other action to delist or suspend the Common
Stock, (iii) there shall have occurred a Major Transaction (as defined in
Section 2(g)) or the public announcement of a pending Major Transaction which
has not been abandoned or terminated, or (iv) the Registration Statement is no
longer effective or stale for a period of more than five (5) Trading Days as a
result of the Company to timely file its financials, then in such event, the
Company shall repurchase within thirty (30) calendar days (the “Repurchase
Date”) of the occurrence of one of the events listed in clauses (i), (ii), (iii)
or (iv) above (each a “Repurchase Event”)
and subject to the limitations imposed by applicable federal and state law, all
or any part of the Shares issued to the Investor within the five (5) Trading
Days preceding the occurrence of the Repurchase Event and then held by the
Investor at a price per Share equal to the highest Volume Weighted Average Price
during the Repurchase Date (the "Payment Amount"). If
the Company fails to pay to the Investor the full aggregate Payment Amount by
the Repurchase Date, the Company shall pay to the Investor, on the first Trading
Day following the Repurchase Date, in addition to and not in lieu of the Payment
Amount payable by the Company to the Investor, interest in an amount equal to
12% per annum on the Payment Amount then due and payable to the Investor, in
cash by wire transfer, beginning on the Repayment Date and continuing for such
period during which such Payment Amount, or any portion thereof, is
outstanding.

    

    3.           Investor’s Representations
and Warranties.

    

    The Investor represents and warrants to
the Company that:

    

    a.           Sophisticated
Investor.        The Investor has such
knowledge, sophistication and experience in business and financial matters so as
to be capable of evaluating the merits and risks of the prospective investment
in the Securities.

    

    b.           Authorization;
Enforcement.        This Agreement has
been duly and validly authorized, executed and delivered on behalf of the
Investor and is a valid and binding agreement of the Investor enforceable
against the Investor in accordance with its terms, subject as to enforceability
to general principles of equity and to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other similar laws relating to, or
affecting generally, the enforcement of applicable creditors' rights and
remedies.

    

    c.           Section 9 of the 1934
Act.    During the Open Period, the Investor will comply
with the provisions of Section 9 of the 1934 Act, and the rules promulgated
thereunder, with respect to transactions involving the Common
Stock.

    
      
         

      

      
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    d.           Accredited
Investor.     Investor is an “Accredited Investor” as
that term is defined in Rule 501(a)(3) of Regulation D of the 1933
Act.

    

    e.           No
Conflicts.      The execution, delivery and
performance of this Agreement by the Investor and the consummation by the
Investor of the transactions contemplated hereby and thereby will not (i) result
in a violation of the Articles of Incorporation or the By-laws of the Investor
or (ii) conflict with, or constitute a material default under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any
material agreement, contract, indenture mortgage, indebtedness or instrument to
or result in a violation of any law, rule, regulation, order, judgment or decree
applicable to the Investor.

    

    f.           No Fiduciary
Relationship.      Nothing contained in
this Agreement creates or establishes a fiduciary relationship on the part of
the Investor or its principals with the Company. Nothing contained in this
Agreement or any agreements or documents establishes a duty on the part of the
Investor or its principals not to trade on or otherwise use any information
disclosed to the Investor by the Company.

    

    g.           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. 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 during the term of this
Agreement and for a period of ten (10) Trading Days following the termination of
this Agreement.  

    

    h.     Investment Purpose.
The Securities are being purchased by the Investor for its own account, and for
investment purposes.  The Investor agrees not to assign or in any way
transfer the Investor’s rights to the securities or any interest therein and
acknowledges that the Company will not recognize any purported assignment or
transfer except in accordance with applicable Federal and state securities laws.
 No other person has or will have a direct or indirect beneficial interest
in the Securities.  The Investor agrees not to sell, hypothecate or
otherwise transfer the Investor’s Securities unless the Securities are
registered under Federal and applicable state securities laws or unless, in the
opinion of counsel satisfactory to the Company, an exemption from such laws is
available.

    

    
      	
               
      

            	
              4.

            	
              Representations And
      Warranties Of The Company.

            

    

    

    Except as set forth in the Schedules
attached hereto, the Company represents and warrants to the Investor
that:

    

    a.           Organization and
Qualification.          The
Company and its “Subsidiaries” (which
for purposes of this Agreement means any entity in which the Company, directly
or indirectly, owns capital stock or holds an equity or similar interest) are
corporations duly organized and validly existing in good standing under the laws
of the respective jurisdictions of their incorporation, and have not taken any
action or omitted to take any action and agree that they shall not take any
action or omit to take any action during the Open Period that would have a
Material Adverse Effect on the Company or the trading price of its Common Stock.
As used in this Agreement, “Material Adverse
Effect” means any condition, circumstance, situation or effect on the
business, properties, assets, operations, results of operations or financial
condition of the Company that is material and adverse to the Company and its
Subsidiaries, if any, which taken as a whole, would prohibit or otherwise
interfere with the authority or ability of the Company to enter into and perform
any of its obligations under this Agreement.

    
      
         

      

      
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    b.           Authorization; Enforcement;
Compliance with Other Instruments.  (i) The Company has the
requisite corporate power and authority to enter into and perform this
Agreement, in connection with the transactions contemplated by this
Agreement  and to issue the Shares in accordance with the terms hereof
and thereof, (ii) the execution and delivery of this Agreement by the Company
and the consummation by it of the transactions contemplated hereby and thereby,
including without limitation the reservation for issuance and the issuance of
the Shares pursuant to this Agreement, have been duly and validly 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 shareholders, (iii) this
Agreement has been duly and validly executed and delivered by the Company, and
(iv) this Agreement constitutes the valid and binding obligations of the
Company.

    

    c.           Capitalization.      As
of the date hereof, the authorized capital stock of the Company consists of (i)
250,000,000 shares of Common Stock, of which as of the date hereof, 102,122,528
shares are issued and outstanding, -0- shares of Preferred Stock are issued and
outstanding and approximately -0- shares of Common Stock are issuable upon the
exercise of options, warrants and conversion rights.  All of such
outstanding shares have been, or upon issuance will be, validly issued and are
fully paid and nonassessable.  Except as disclosed in this Section and
the SEC Documents, (i) no shares of the Company's capital stock are subject to
preemptive rights or any other similar rights or any liens or encumbrances
suffered or permitted by the Company, (ii) there are no outstanding debt
securities, (iii) there are no outstanding shares of capital stock, 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, (iv) there are no
agreements or arrangements with a Person, other than the Investor under which
the Company or any of its Subsidiaries is obligated to register the sale of any
of their securities under the 1933 Act, (v) there are no outstanding securities
of the Company or any of its Subsidiaries which contain any redemption or
similar provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to redeem a security of the Company or any of its Subsidiaries, (vi) there
are no securities or instruments containing anti-dilution or similar provisions
that will be triggered by the issuance of the Securities as described in this
Agreement, (vii) the Company does not have any stock appreciation rights or
"phantom stock" plans or agreements or any similar plan or agreement and (viii)
there is no dispute as to the class of any shares of the Company's capital
stock. Prior to the signing of this Agreement by the Investor, the Company shall
furnish to the Investor true and correct copies of any outstanding securities
convertible into or exercisable for Common Stock.

    

    d.           Issuance of
Shares.   A sufficient number of Shares issuable pursuant
to this Agreement has been duly authorized and reserved for
issuance.  Upon issuance in accordance with this Agreement, the
Securities will be validly issued, fully paid and nonassessable and free from
all taxes, liens and charges with respect to the issue thereof. In the event the
Company cannot register the full number of Shares the parties anticipated would
be registered, the Company will use its best efforts to register the maximum
number of shares allowable.

     

    
      
         

      

      
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    e.           No
Conflicts.       The execution, delivery
and performance of this Agreement by the Company and the consummation by the
Company of the transactions contemplated herein will not (i) result in a
violation of the Articles of Incorporation, any Certificate of Designations,
Preferences and Rights of any outstanding series of preferred stock of the
Company or the By-laws or (ii) conflict with, or constitute a material default
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any material agreement, contract, 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 United States
federal and state securities laws and regulations and the rules and regulations
of the Principal Market or principal securities exchange or trading market on
which the Common Stock is traded or listed) applicable to the Company or any of
its Subsidiaries or by which any property or asset of the Company or any of its
Subsidiaries is bound or affected.

    Neither
the Company nor its Subsidiaries is in violation of any term of, or in default
under, the Articles of Incorporation, any Certificate of Designations,
Preferences and Rights of any outstanding series of preferred stock of the
Company or its By-laws or any contract, agreement, indebtedness, instrument,
judgment, decree, order or any statute, rule or regulation applicable to the
Company or its Subsidiaries, except as set forth in the SEC Documents or
possible conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations that would not individually or in the aggregate
have a Material Adverse Effect. Except as disclosed in the SEC Documents, the
Company and its Subsidiaries are unaware of any facts or circumstances which
might give rise to any of the foregoing. The Company is not, and will not be, in
violation of the listing requirements of the Principal Market as in effect on
the date hereof and on each of the Closing Dates and is not aware of any facts
which would reasonably lead to delisting of the Common Stock by the Principal
Market in the foreseeable future.

    

    f.           SEC Documents; Financial
Statements.         The Company
is not delinquent in its filing of any reports, schedules, forms, statements and
other documents required to be filed by it with the SEC pursuant to the
reporting requirements of the 1934 Act (all of the foregoing filed prior to the
date hereof and all exhibits included therein and financial statements and
schedules thereto and documents incorporated by reference therein being
hereinafter referred to as the "SEC Documents"). As
of their respective dates, the SEC Documents complied in all material respects
with the requirements of the 1934 Act and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. As of their respective
dates, the financial statements of the Company included in the SEC Documents
complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto. 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 written
information provided by or on behalf of the Company to the Investor which is not
included in the SEC Documents, including, without limitation, information
referred to in Section 4(c) of this Agreement, contains any untrue statement of
a material fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstance under which they are or
were made, not misleading.

    

    g.           Absence of Certain
Changes.         Except as
disclosed in the SEC Documents, there has been no change or development in the
business, properties, assets, operations, financial condition, results of
operations or prospects of the Company or its Subsidiaries which has had or
reasonably could have a Material Adverse Effect. The Company has not taken any
steps, and does not currently expect to take any steps, to seek protection
pursuant to any bankruptcy law nor does the Company or its Subsidiaries have any
knowledge or reason to believe that its creditors intend to initiate involuntary
bankruptcy proceedings.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    h.           Absence of
Litigation.  Except as disclosed in the SEC Documents, there is
no action, suit, proceeding, inquiry or investigation before or by any court,
public board, government agency, self-regulatory organization or body pending
or, to the knowledge of the executive officers of Company or any of its
Subsidiaries, threatened against or affecting the Company, the Common Stock or
any of the Company's Subsidiaries or any of the Company's or the Company's
Subsidiaries' officers or directors in their capacities as such, in which an
adverse decision could have a Material Adverse Effect.

    

    i.       
    Acknowledgment Regarding
Investor's Purchase of Shares.  The Company acknowledges and
agrees that the Investor is acting solely in the capacity of arm's length
purchaser with respect to this Agreement and the transactions contemplated
hereby and thereby. The Company further acknowledges that the Investor is not
acting as a financial advisor or fiduciary of the Company (or in any similar
capacity) with respect to this Agreement and the transactions contemplated
hereby and thereby and any advice given by the Investor or any of its respective
representatives or agents in connection with this Agreement and the transactions
contemplated hereby and thereby is merely incidental to the Investor's purchase
of the Securities. The Company further represents to the Investor that the
Company's decision to enter into this Agreement has been based solely on the
independent evaluation by the Company and its representatives.

    

    j. 
          No Undisclosed Events,
Liabilities, Developments or Circumstances.  No event,
liability, development or circumstance has occurred or exists, or to its
knowledge is contemplated to occur, with respect to the Company or its
Subsidiaries or their respective business, properties, assets, prospects,
operations or financial condition, that would be required to be disclosed by the
Company under applicable securities laws on a registration statement filed with
the SEC relating to an issuance and sale by the Company of its Common Stock and
which has not been publicly announced.

    

    k. 
          Internal Accounting
Controls.  The Company and each of its Subsidiaries agrees to
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.

    

    l. 
          Tax
Status.  The Company and each of its Subsidiaries has made or
filed all United States federal and state income and all other tax returns,
reports and declarations required by any jurisdiction to which it is subject
(unless and only to the extent that the Company and each of its Subsidiaries has
set aside on its books provisions reasonably adequate for the payment of all
unpaid and unreported taxes) and has paid all taxes and other governmental
assessments and charges that are material in amount, shown or determined to be
due on such returns, reports and declarations, except those being contested in
good faith and has set aside on its books 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.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

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

    

    n.           Dilutive
Effect.  The Company understands and acknowledges that the
number of shares of Common Stock issuable upon purchases pursuant to this
Agreement will increase in certain circumstances including, but not necessarily
limited to, the circumstance wherein the trading price of the Common Stock
declines during the period between the Effective Date and the end of the Open
Period.  The Company’s executive officers and directors have studied
and fully understand the nature of the transactions contemplated by this
Agreement and recognize that they have a potential dilutive
effect.  The board of directors of the Company has concluded, in its
good faith business judgment that such issuance is in the best interests of the
Company.

    

    o.       
   Lock-up.  The
Company agrees to use its best efforts to have its officers, directors and
affiliates refrain from selling Common Stock during each Pricing
Period.

    

    p.        
  No General
Solicitation.  Neither the Company, nor any of its affiliates,
nor any person acting on its behalf, has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with the offer or sale of the Common Stock offered
hereby.

    

    q.        
  Pre-Closing Opinion of Counsel.
 At Company’s sole cost and expense, Investor shall receive an opinion
letter from counsel to the Company on or before the Execution Date which
evidences the Company’s ability and authority to enter into this Agreement with
the Investor, which “Pre-Closing Opinion
Letter” letter shall be attached hereto and made a part hereof as Exhibit
B.

    

    r.           Post-Closing Opinion of
Counsel.  The Company will obtain for the Investor, at the Company’s
sole cost and expense, any and all opinions of counsel which may be reasonably
required in order to sell the securities issuable hereunder without restriction
after the Effective Date.

    

    
      5.         
 Covenants Of The
Company

    

    

    a.           Best
Efforts.  The Company shall use its best efforts timely to
satisfy each of the conditions to be satisfied by it as provided in Section 7 of
this Agreement.

    

    b.           Blue
Sky.  The Company shall, at its sole cost and expense, before
the first Closing Date, take such action as the Company shall reasonably
determine is necessary to qualify the Securities for, or obtain exemption for
the Securities for, sale to the Investor pursuant to this Agreement under
applicable securities or "Blue Sky" laws as may be applicable, and shall provide
evidence of any such action so taken to the Investor on or prior to the first
Closing Date.

    

    c.           Reporting Status;
Registration Statement.  During the Open Period, the Company
shall use its best efforts to timely file all reports required to be filed with
the SEC pursuant to the 1934 Act and maintain the effectiveness of the
Registration Statement.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    d.           Use of
Proceeds.  The Company will use the proceeds from the sale of
the Shares (excluding amounts paid by the Company for fees associated with this
transaction) for general corporate and working capital purposes.

    

    e.           Transactions With
Affiliates.  Except as set forth in this Section, the Company
shall not, and shall cause each of its Subsidiaries not to, enter into, amend,
modify or supplement, or permit any Subsidiary to enter into, amend, modify or
supplement, any agreement, transaction, commitment or arrangement with any of
its or any Subsidiary's officers, directors, persons who were officers or
directors at any time during the previous two years, shareholders who
beneficially own 5% or more of the Common Stock, or affiliates or with any
individual related by blood, marriage or adoption to any such individual or with
any entity in which any such entity or individual owns a 5% or more beneficial
interest (each a “Related Party”),
except for (i) customary employment arrangements and benefit programs on
reasonable terms; (ii) any agreement, transaction, commitment or arrangement on
an arms-length basis on terms no less favorable than terms which would have been
obtainable from a person other than such Related Party; (iii) transactions
disclosed in the Company Reports; and (iv) transactions in connection with
financing transactions of which the Company is the recipient of the financing.
“Affiliate” for
purposes hereof means, with respect to any person or entity, another person or
entity that, directly or indirectly, (i) has a 5% or more equity interest in
that person or entity, (ii) has 5% or more common ownership with that person or
entity, (iii) controls that person or entity, or (iv) shares common control with
that person or entity.  “Control” or "Controls" for
purposes hereof means that a person or entity has the power, direct or indirect,
to conduct or govern the policies of another person or entity.

    

    f. 
          Filing of Form
8-K.  On or before the date which is three (3) Trading Days
after the Execution Date, the Company shall file a Current Report on Form 8-K
with the SEC describing the terms of the transaction contemplated by this
Agreement in the form required by the 1934 Act, if such filing is
required.

    

    g.    Notice of Certain Events
Affecting Registration; Suspension of Right to Make a Put. The Company
shall promptly notify Investor upon the occurrence of any of the following
events (“Registration Events”) in respect of a Registration Statement or related
prospectus in respect of an offering of the Shares: (i) receipt of any comments
or a request for additional information by the SEC or any other federal or state
governmental authority either prior to or  during the period of
effectiveness of the Registration Statement for amendments or supplements to the
Registration Statement or related prospectus; (ii) the issuance by the SEC or
any other federal or state governmental authority of any stop order suspending
the effectiveness of any Registration Statement or the initiation of any
proceedings for that purpose; (iii) receipt of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Shares for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose; (iv) the happening of any event that makes any
statement made in such Registration Statement or related prospectus or any
document incorporated or deemed to be incorporated therein by reference untrue
in any material respect or that requires the making of any changes in the
Registration Statement, related prospectus or documents so that, in the case of
a Registration Statement, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and that in the case of
the related prospectus, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and (v) the Company's reasonable
determination that a post-effective amendment to the Registration Statement
would be appropriate, and the Company shall promptly make available to Investor
any such supplement or amendment to the related prospectus. The Company shall
not deliver to Investor any Put Notice during the continuation of any of the
foregoing events; provided, that, the
filing by the Company of a supplement to the Prospectus under Rule 424(b)(3)
shall not be deemed a Registration Event for purposes of this paragraph
(g).

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    h.    Registration
Statement.  The Company is aware and acknowledges that it may
not be able to issue Put Notices under this Agreement if it can not obtain an
effective Registration Statement or if any issuances of Common Stock pursuant to
any Put Notices would violate any rules of the Principal Market.  The
Company further is aware and acknowledges that any fees paid or shares issued
pursuant to this Agreement shall be earned on the date hereof and not refundable
or returnable under any circumstances.

    

    i.     Reimbursement. If (i)
Investor, other than by reason of its gross negligence or willful misconduct,
becomes involved in any capacity in any action, proceeding or investigation
brought by any shareholder of the Company, in connection with or as a result of
the consummation of the transactions contemplated by this Agreement, or if
Investor is impleaded in any such action, proceeding or investigation by any
person, or (ii) Investor, other than by reason of its gross negligence or
willful misconduct or by reason of its trading of the Common Stock in a manner
that is illegal under the federal securities laws, becomes involved in any
capacity in any action, proceeding or investigation brought by the SEC against
or involving the Company or in connection with or as a result of the
consummation of the transactions contemplated by this Agreement, or if Investor
is impleaded in any such action, proceeding or investigation by any person, then
in any such case, the Company will reimburse Investor for its reasonable legal
and other expenses (including the cost of any investigation and preparation)
incurred in connection therewith, as such expenses are incurred. The
reimbursement obligations of the Company under this section shall be in addition
to any liability which the Company may otherwise have, shall extend upon the
same terms and conditions as to Investor to any Affiliates of Investor that are
actually named in such action, proceeding or investigation, and partners,
directors, agents, employees, attorneys, accountants, auditors and controlling
persons (if any), as the case may be, of Investor and any such Affiliate, and
shall be binding upon and inure to the benefit of any successors of the Company,
Investor and any such Affiliate and any such person.

    

    j.    
Transfer Agent
Instructions.  Upon effectiveness of the Registration Statement the
Company shall deliver instructions to its transfer agent to issue shares of
Common Stock to the Investor free of restrictive legends on or before each
Closing Date pursuant to the blanket legal opinion to be delivered to the
Company’s transfer agent.

    

    k.  
  Non-disclosure of Non-public
Information.

    

    (a)  The
Company covenants and agrees that neither it nor any other Person acting on its
behalf will provide the Investor or its agents or counsel with any information
that the Company believes constitutes material non-public information, unless
prior thereto the Company identifies such information as being material
non-public information and provides one of the principals of the Investor with
the opportunity to accept or refuse to accept such material non-public
information for review.  The Company acknowledges that only the Investor’s
signatory to this Agreement shall have the authority to accept the receipt of
material non-public information from the Company.  The Company acknowledges
that any information provided to the Investor without first being accepted by
the designated signatory will be deemed not to be material non-public
information and the Investor shall be under no duty to maintain the
confidentiality of such information.  The Company understands and confirms
that the Investor shall be relying on the foregoing representations in effecting
transactions in securities of the Company.  

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    (b)  Nothing
herein shall require the Company to disclose non-public information to the
Investor or its advisors or representatives. 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 immediately notify Investor’s designated signatory 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 prospectus included in the Registration Statement
would cause such prospectus 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.
 

    

    (c)  Neither
the Company nor any of its Subsidiaries or any of their officers, directors,
employees or agents have provided the Investor with any material, nonpublic
information which was not publicly disclosed prior to the date hereof and any
material, nonpublic information provided to the Investor by the Company or its
Subsidiaries or any of their officers, directors, employees or agents prior to
any Closing Date shall be publicly disclosed by the Company prior to such
Closing Date. Nothing contained herein creates or establishes a fiduciary
relationship on the part of the Investor or its principals with the Company. The
Company agrees that it shall not disclose to the Investor, its principals or
Affiliates any confidential non-public information for any reason. Nothing
contained herein establishes a duty on the part of the Investor or its
principals not to trade on or otherwise use any information disclosed to the
Investor by the Company.

    

    6.           
Cover.  If,
the number of Shares represented by any Put Notices become restricted or are no
longer freely trading for any reason, and after the applicable Closing Date, the
Investor purchases, in an open market transaction or otherwise, the Company’s
Common Stock (the “Covering Shares”) in
order to make delivery in satisfaction of a sale of Common Stock by the Investor
(the “Sold
Shares”), which delivery such Investor anticipated to make using the
Shares represented by the Put Notice  (a “Buy-In”), the Company
shall pay to the Investor the Buy-In Adjustment Amount.  The “Buy-In Adjustment
Amount” is the amount equal to the excess, if any, of (a) the Investor’s
total purchase price (including brokerage commissions, if any) for the Covering
Shares over (b) the net proceeds (after brokerage commissions, if any) received
by the Investor from the sale of the  Sold Shares.  The
Company shall pay the Buy-In Adjustment Amount to the Investor in immediately
available funds immediately upon demand by the Investor.  By way of
illustration and not in limitation of the foregoing, if the Investor purchases
Common Stock having a total purchase price (including brokerage commissions) of
$11,000 to cover a Buy-In with respect to the Common Stock it sold for net
proceeds of $10,000, the Buy-In Adjustment Amount which the Company will be
required to pay to the Investor will be $1,000.

    

    
      	
               
      

            	
              7.

            	
              Conditions of the
      Company's Obligation to Sell Investor the
  Shares.

            

    

    

    The obligation hereunder of the Company
to issue and sell the Shares to the Investor is further subject to the
satisfaction, at or before each Closing Date, of each of the following
conditions set forth below. These conditions are for the Company's sole benefit
and may be waived by the Company at any time in its sole
discretion.

    

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

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    b.           The
Investor shall have delivered to the Company the Purchase Price for the Shares
being purchased by the Investor at the Closing (after receipt of confirmation of
delivery of such freely tradable Shares) by wire transfer of immediately
available funds pursuant to the wire instructions provided by the
Company.

    

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

    

    d.           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 which prohibits the consummation of any of
the transactions contemplated by this Agreement.

    

    
      	
               
      

            	
              e.

            	
              No
      Valuation Event shall have occurred since the applicable Pricing
      Period.

            

    

    

    
      	
              8.

            	
              Conditions of the
      Investor's Obligation to Purchase the
  Shares.

            

    

    

    The obligation of the Investor
hereunder to purchase Shares is subject to the satisfaction, on or before each
Closing Date, of each of the following conditions set forth
below.  Notwithstanding anything to the contrary in this Agreement,
the Company shall not be entitled to deliver a Put Notice and require the
Investor to purchase any Shares at a Closing (as defined in Section 2(h)) unless
each of the following conditions are satisfied:

    

    j. 
          the Company shall
have complied with its obligations and is otherwise not in breach of a material
provision, or in default under, this Agreement;

    

    k.           no
injunction shall have been issued, or action commenced by a governmental
authority, prohibiting the purchase or the issuance of the Common
Stock;

    

    l.           
The Common Stock shall be authorized for quotation on the Principal Market and
trading in the Common Stock shall not have been suspended by the Principal
Market or the SEC, at any time beginning on the date hereof and through and
including the respective Closing Date;

    

    m.          The
representations and warranties of the Company shall be true and correct as of
the date when made and as of the applicable Closing Date as though made at that
time (except for (i) representations and warranties that speak as of a specific
date and (ii) with respect to the representations made in Sections 4(g), (h) and
(j) events which occur on or after the date of this Agreement and are disclosed
in SEC filings made by the Company prior to the applicable Put Notice Date) and
the Company shall have performed, satisfied and complied with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Company on or before such Closing Date.  The
Investor may request an update as of such Closing Date regarding the
representation contained in Section 4(c) above;

    

    n.           The
Board of Directors of the Company shall have adopted resolutions consistent with
Section 4(b)(ii) above and in a form reasonably acceptable to the Investor (the
“Resolutions”)
and such Resolutions shall not have been amended or rescinded prior to such
Closing Date and the Investor shall have been provided with a copy of those
Resolutions which shall be attached hereto as Exhibit
C;

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    o.           The
Company shall have executed electronic book-entry transfer of, the Shares (in
such denominations as such Investor shall request) being purchased by the
Investor at such Closing and all previous Put Notices shall have
settled;

    

    p.           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 which prohibits the consummation of any of
the transactions contemplated by this Agreement;

    

    q.           The
Registration Statement covering the Shares issued as a commitment fee and the
Shares being sold to the Investor pursuant to a Draw Down Notice shall be
effective on each Closing Date and no stop order suspending the effectiveness of
the Registration Statement shall be in effect or shall be pending or threatened.
Furthermore, on each Closing Date (i) neither the Company nor Investor shall
have received notice that the SEC has issued or intends to issue a stop order
with respect to such Registration Statement or that the SEC otherwise has
suspended or withdrawn the effectiveness of such Registration Statement, either
temporarily or permanently, or intends or has threatened to do so (unless the
SEC's concerns have been addressed and Investor is reasonably satisfied that the
SEC no longer is considering or intends to take such action),and (ii) no other
suspension of the use or withdrawal of the effectiveness of such Registration
Statement or related prospectus shall exist;

    

    r.           At
the time of each Closing, the Registration Statement (including information or
documents incorporated by reference therein) and any amendments or supplements
thereto shall not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading or which would require public disclosure or an
update supplement to the prospectus;

    

    s.           There
shall have been no filing of a petition in bankruptcy, either voluntarily or
involuntarily, with respect to the Company and there shall not have been
commenced any proceedings under any bankruptcy or insolvency laws, or any laws
relating to the relief of debtors, readjustment of indebtedness or
reorganization of debtors, and there shall have been no calling of a meeting of
creditors of the Company or appointment of a committee of creditors or
liquidating agents or offering of a composition or extension to creditors by,
for, with or without the consent or acquiescence of the Company;

    

    t. 
          If applicable, the
shareholders of the Company shall have approved the issuance of any Shares in
excess of the Maximum Common Stock Issuance in accordance with Section 2(i);
and

    

    u.           The
Company shall have delivered to such Investor such other documents relating to
the transactions contemplated by this Agreement as such Investor or its counsel
may reasonably request upon reasonable advance notice.

    

    If any of
the events described in clauses (a) through (l) above occurs during a Pricing
Period or at any time on or before the delivery of the freely trading Common
Stock to the Investor covered by that Pricing Period, then the Investor shall
have no obligation to purchase the Put Amount of Common Stock set forth in the
applicable Put Notice and if such an event occurs after the delivery of the
freely trading Common Stock and before the Investor has sold such Common Stock
then the Company shall be required to repurchase that number of shares still
held by the Investor at the same price paid by the Investor for such
purchase.

    

    9.           Termination.  This
Section shall govern termination of the Agreement between the
parties.

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (a)

            	
              This
      Agreement shall terminate upon any of the following
  events:

            

    

    

    (i)  the
earlier of the date upon which the Investor has purchased pursuant to this
Agreement all the Registrable Securities to be registered pursuant to the
Registration Statement or the Commitment Amount; provided that the Company’s
representations, warranties and covenants contained in this Agreement insofar as
applicable to the transactions consummated hereunder prior to such termination,
shall survive the termination of this Agreement for the period of any applicable
statute of limitations;

    

    (ii)  the
day following the last day of the Open Period;

    

    (iii)  if
the Company shall file or consent by answer or otherwise to the entry of an
order for relief or approving a petition for relief, reorganization or
arrangement or any other petition in bankruptcy for liquidation or to take
advantage of any bankruptcy or insolvency law of any jurisdiction, or shall make
an assignment for the benefit of its creditors, or shall consent to the
appointment of a custodian, receiver, trustee or other officer with similar
powers of itself or of any substantial part of its property, or shall be
adjudicated a bankrupt or insolvent, or shall take corporate action for the
purpose of any of the foregoing; or

    

    (iv)  if
the Company shall issue or sell any equity securities or securities convertible
into, or exchangeable for, equity securities or enter into any other equity
financing facility during the Open Period, other than in compliance with Section
4(v).

    

    Upon the
occurrence of one of the above-described events, the Company shall send written
notice of such event to the Investor.

    

    10.  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 (irrespective of whether any such Investor
Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified
Liabilities”), incurred by the Investor Indemnitees or any of them as a
result of, or arising out of, or relating to (i) 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, (ii)
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 (iii) 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; provided,
that, with regard to indemnification for untrue statements or omissions
from the Prospectus, such indemnification shall be only to the extent that such
untrue statements or omissions arise out of or are based upon information
regarding one or more of the Investor Indemnitees furnished in writing to the
Company by the Investor or its counsel expressly for use in the Prospectus,
which information was reasonably relied on by the Company for use therein or to
the extent that such information relates to an Investor Indemnitee, or such
Investor Indemnitee’s proposed method of distribution of Registrable Securities,
was reviewed and expressly approved in writing by such Investor Indemnitee or
its counsel expressly for use in the Prospectus or in any amendment or
supplement thereto; and provided further,
that, with
respect to any statement or omission made in any such Prospectus, or amendment
or supplement thereto, the indemnity agreement contained in this paragraph shall
not inure to the benefit of any such Investor Indemnitee to the extent that any
such Losses of such Investor indemnitee result from the fact that a copy of the
final prospectus was not sent or given to the purchaser of Registrable
Securities at or prior to the written confirmation of the sale of such
Registrable Securities as required by the 1933 Act; and provided further, that with
respect to any statement or omission made in any preliminary prospectus, the
indemnity agreement contained in this paragraph shall not inure to the benefit
of any Investor Indemnitee to the extent that (x) any such Losses result from
the fact that a copy of the final prospectus was not sent or given at or prior
to the written confirmation of the sale of such Registrable Securities to the
purchaser of Registrable Securities as required by the 1933 Act,.  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.

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    (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 (i)
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, (ii) any breach of any covenant, agreement or
obligation of the Investor(s) contained in this Agreement,  the
Registration Rights Agreement or any other certificate, instrument or document
contemplated hereby or thereby executed by the Investor, (iii) 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; or (iv) untrue statements or omissions
that arise out of or are based upon information regarding one or more of the
Investor Indemnitees furnished in writing to the Company by the Investor or its
counsel expressly for use in the Prospectus, or any amendment or supplement
thereto, which information was reasonably relied on by the Company for use
therein.  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 10 shall survive termination of this
Agreement.

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              11.

            	
              Governing Law;
      Miscellaneous.

            

    

    

    a.           Governing Law. This
Agreement shall be governed by and interpreted in accordance with the laws of
the State of New York without regard to the principles of conflict of laws. Each
party hereby irrevocably submits to the exclusive jurisdiction of the state
courts sitting in the City of New York, borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law.  If any provision of
this Agreement shall be invalid or unenforceable in any jurisdiction, such
invalidity or unenforceability shall not affect the validity or enforceability
of the remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction. The
Company and Investor hereby waive a trial by jury in any action, proceeding or
counterclaim brought by either of the parties hereto against the other in
respect of any matter arising out or in connection with this Agreement. The
parties agree that in the event of any action, litigation or proceeding between
the parties arising out of or in relation to this Agreement, the prevailing
party in a final judgment after the appeal period has passed shall be awarded,
in addition to any damages, injunctions or other relief, such party’s costs and
expenses, including but not limited to all related costs and reasonable
attorneys’, accountants’ and experts’ fees incurred in bringing such action,
litigation or proceeding and/or enforcing any judgment or order granted
therein.

    

    
      	
               
      

            	
              b.

            	
              Commitment Fees;
      Structuring Fees; Legal Fees; and Registration Statement
      Fees

            

    

    

    (i)   
As an inducement to LeadDog Capital, L.P. to enter into this Agreement, the
Company has agreed to issue to LeadDog Capital, L.P. as a commitment fee 300,000
shares of Common Stock.  The Common Stock shall be registered in the
current offering and issued to LeadDog Capital, L.P. in certificate form no
later than five (5) Trading Days after the Execution Date.

    

    
      (ii)   The
Company has also agreed to issue to LeadDog Capital Markets, LLC as a
structuring and due diligence fee 100,000 shares of Common Stock.  The
Common Stock shall be registered in the current offering and issued to LeadDog
Capital Markets, LLC in certificate form no later than five (5) Trading Days
after the Execution Date.

    

    

    (iv)  The
Company and LeadDog Capital Markets, LLC shall each be responsible for their own
legal fees regarding the preparation and changes to this Agreement.

    

    (v)   The
Company shall, at its sole cost and expense, use its reasonable best efforts to
have the Registration Statement filed within sixty (60) calendar days following
the Execution Date.

    

    c.           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;
provided that a facsimile signature shall be considered due execution and shall
be binding upon the signatory thereto with the same force and effect as if the
signature were an original, not a facsimile signature.

    

    d.           Headings;
Singular/Plural. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.  Whenever required by the context of this Agreement, the
singular shall include the plural and masculine shall include the
feminine.

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    e.           Severability. If any
provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of any provision of this Agreement in any other
jurisdiction.

    

    f.           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 contains the entire understanding of the parties with respect to the
matters covered herein and, except as specifically set forth herein, 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
amended other than by an instrument in writing signed by the Company and the
Investor, and no provision hereof may be waived other than by an instrument in
writing signed by the party against whom enforcement is sought.

    

    g.           Notices. Any notices
or other communications required or permitted to be given under the terms of
this Agreement must be in writing and will be deemed to have been delivered (i)
upon receipt, when delivered personally; (ii) upon receipt, when sent by
facsimile (provided confirmation is electronically generated and kept on file by
the sending party); or (iii) 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:

    

    380 North Old Woodward
Avenue

    Suite 226

    Birmingham,
MI  48009

    

    Attention:   
Jan Telander

    Telephone:  248-530-0770

    Facsimile:

    

    If to the
Investor:

    

    At the address listed in the
Questionnaire.

    

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

    

    
      	
               
      

            	
              h.

            	
              No Assignment.
      This Agreement shall not be assigned by either
  party.

            

    

    

    i.            No Third Party
Beneficiaries. This Agreement is intended for the benefit of the parties
hereto and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.

    

    j.   
        Survival. The
representations and warranties of the Company and the Investor contained in
Sections 2 and 3, the agreements and covenants set forth in Sections 4 and 5,
and the indemnification provisions set forth in Section 10, shall survive each
of the Closings. The Investor shall be responsible only for its own
representations, warranties, agreements and covenants
hereunder.

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    k.           Publicity.  The
Company and Investor shall consult with each other in issuing any press releases
or otherwise making public statements with respect to the transactions
contemplated hereby and no party shall issue any such press release or otherwise
make any such public statement without the prior written consent of the other
parties, which consent shall not be unreasonably withheld or delayed, except
that no prior consent shall be required if such disclosure is required by law,
in which such case the disclosing party shall provide the other parties with
prior notice of such public statement. Notwithstanding the foregoing, the
Company shall not publicly disclose the name of Investor without the prior
written consent of such Investor, except to the extent required by law. Investor
acknowledges that this Agreement may be deemed to be a "material contract" as
that term is defined by Item 601(b)(10) of Regulation S-K, and that the Company
may therefore be required to file such documents as exhibits to reports or
registration statements filed under the Securities 1933 Act or the 1934 Act.
Investor further agrees that the status of such documents and materials as
material contracts shall be determined solely by the Company, in consultation
with its counsel.

    

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

    

    m.          Other Fees. The
Investor shall have no obligation with respect to any fees or with respect to
any claims made by or on behalf of other persons or entities for fees that may
be due in connection with the transactions contemplated by this
Agreement.  The Company shall indemnify and hold harmless the
Investor, their employees, officers, directors, agents, and partners, and their
respective affiliates, from and against all claims, losses, damages, costs
(including reasonable attorney’s fees) and expenses incurred in respect of any
such claim.

    

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

    

    o.           List of
Exhibits.

    

    
      	
               
      

            	
              Exhibit
      A

            	
              Put
      Notice (page 4 and attached as page
30).

            

    

    
      	
               
      

            	
              Exhibit
      B

            	
              Pre-closing
      Opinion Letter (page 13)

            

    

    
      	
               
      

            	
              Exhibit
      C

            	
              Board
      Resolution (page 19)

            

    

    

    [Balance
of this page intentionally left blank.]

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    PROGREEN
PROPERTIES, INC.

    QUESTIONNAIRE

    

    The information contained in this
Questionnaire is being furnished in order to determine whether the undersigned’s
subscription to purchase the Shares described in this Agreement may be
accepted.

    

    All Information Contained In
This Questionnaire Will Be Treated Confidentially.  The
undersigned understands, however, that the Company may present this
Questionnaire to such parties as it deems appropriate if called upon to
establish that the proposed offer and sale of the Securities is exempt from
registration under the 1933 Act, as amended.  Further, the undersigned
understands that the offering may be required to be reported to the Securities
and Exchange Commission, NASDAQ and to various state securities and “blue sky”
regulators.

    

    In Addition To Signing The
Signature Page, If Requested By The Company, The Undersigned Must Complete Form
W-9.

    

    I.            Please Check Each Of The
Statements Below That Applies.

    

    
      
        	
                 ̈

              	
                1.          
       The undersigned: (a) has total assets in excess of $5,000,000; (b)
      was not formed for the specific purpose of acquiring the securities and
      (c) has its principal place of business in
  ___________.

              

      

    

    

    
      
        	
                 ̈

              	
                2.            The
      undersigned is a natural person whose individual net worth* or joint net
      worth with his or her spouse exceeds
$1,000,000.

              

      

    

    

    
      
        	
                 ̈

              	
                3.            The
      undersigned is a natural person who had an individual income* in excess of
      $200,000 in each of the two most recent years and who reasonably expects
      an individual income in excess of $200,000 in the current
      year.  Such income is solely that of the undersigned and
      excludes the income of the undersigned’s
spouse.

              

      

    

    

    
      
        	
                 ̈

              	
                4.            The
      undersigned is a natural person who, together with his or her spouse, has
      had a joint income* in excess of $300,000 in each of the two most recent
      years and who reasonably expects a joint income in excess of $300,000 in
      the current year.

              

      

    

    

    *         For
purposes of this Questionnaire, the term “net worth” means the excess of total
assets over total liabilities.  In determining “income”, an investor
should add to his or her adjusted gross income any amounts attributable to
tax-exempt income received, losses claimed as a limited partner in any limited
partnership, deductions claimed for depletion, contributions to IRA or Keogh
retirement plan, alimony payments and any amount by which income from long-term
capital gains has been reduced in arriving at adjusted gross
income.

    

    5.          The
undersigned is:

    

    
      
        	
                 ̈

              	
                (a)            a
      bank as defined in Section 3(a)(2) of the 1933 Act;
  or

              

      

    

    

    
      
        	
                 ̈

              	
                (b)            a
      savings and loan association or other institution as defined in Section
      3(a)(5)(A) of the 1933 Act whether acting in its individual or fiduciary
      capacity; or

              

      

    

    

    
      
        	
                 ̈

              	
                (c)            a
      broker or dealer registered pursuant to Section 15 of the 1934
      Act;  or

              

      

    

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    
      
        	
                 ̈

              	
                (d)            an
      insurance company as defined in Section 2(13) of the 1933 Act;
      or

              

      

    

    

    
      
        	
                 ̈

              	
                (e)            An
      investment company registered under the Investment Company Act of 1940 or
      a business development company as defined in Section 2(a)(48) of the
      Investment Company Act of 1940;
or

              

      

    

    

    
      
        	
                 ̈

              	
                (f)            a
      small business investment company licensed by the U.S. Small Business
      Administration under Section 301 (c) or (d) of the Small Business
      Investment Act of 1958; or

              

      

    

    

    
      
        	
                 ̈

              	
                6.             The
      undersigned is an entity in which all of the equity owners are “accredited
      investors”, as that term is defined in Rule 501(a)(3) of Regulation D of
      the 1933 Act.

              

      

    

    
    

    
      INVESTOR
INFORMATION:

    

    

    
      Name of
Entity
_______________________________________________________

    

    

    Person’s
Name ________________________ Title___________________________

    

    
      State of
Organization
__________________________________________________

    

    

    
      Principal
Business Address
_____________________________________________

    

    

    
      City,
State, Zip Code
__________________________________________________

    

    

    
      Phone
______________________________ Fax
____________________________

    

    

    
      Send
Correspondence to:

    

    
       

      
        

      

       

      
        
 

      
        

      

       

      
        

      

       

    

    PROGREEN
PROPERTIES, INC.

    SIGNATURE
PAGE

    

    Your signature on this Signature Page
evidences your agreement to be bound by this Agreement, the Questionnaire, and
the Registration Rights Agreement.

    

    1.           The
undersigned hereby represents that (a) the information contained in the
Questionnaire is complete and accurate and (b) the undersigned will notify ProGreen Properties,
Inc. immediately if any material change in any of the information occurs
prior to the acceptance of the undersigned’s subscription and will promptly send
ProGreen Properties,
Inc. written confirmation of such change.

    

    2.           The
undersigned signatory hereby certifies that he/she has read and understands this
Agreement and Questionnaire, and the representations made by the undersigned in
this Agreement and Questionnaire are true and accurate.

    

    LeadDog
Capital, LP by its General Partner

    LeadDog
Capital Markets, LLC

    

    
      
        
          
            
              	
                      By:

                    	
                      /s/ Joseph B. LaRocco

                    	 	
                      August 24, 2010

                    
	
                        

                    	
                      Name:  
      Joseph B. LaRocco

                    	 	
                      Date

                    
	
                       
      

                    	
                      Title:    
      Managing Member

                    	 	 
      

            

          

        

      

    

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

     

    
      
        

      

       

      COMPANY ACCEPTANCE
PAGE

    

    

    This  Agreement
accepted and agreed to this
25th
day of August, 2010.

    

    
      
        	
                PROGREEN
      PROPERTIES, INC.

              	 
      
	 
      	 
      
	
                By

              	
                /s/ Jan Telander

              	 
      
	 
      	
                Jan
      Telander, CEO

              	 
      

      

    

     

    EXHIBIT
A

     

    PROGREEN
PROPERTIES, INC. -  PUT NOTICE NO._________

     

    The
undersigned, _______________________ hereby certifies, with respect to the sale
of shares of Common Stock of PROGREEN PROPERTIES, INC. (the “Company”) issuable in
connection with this Advance Notice, delivered pursuant to the Standby Equity
Purchase Agreement (the “Agreement”), as
follows:

     

    1.         
 The undersigned is the duly elected ______________ of the
Company.

    

    2.         
There are no fundamental changes to the information set forth in the
Registration Statement which would require the Company to file a post effective
amendment to the Registration Statement. The Registration Statement is currently
effective and I have no cause, reason or information to believe that the
Registration Statement will be declared ineffective during the next thirty (30)
calendar days.

    

    3.         
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 Put
Notice Date, and shall continue to perform in all material respects all
covenants and agreements to be performed by the Company through the applicable
Put Date.  All conditions to the delivery of this Put Notice are satisfied
as of the date hereof.

    

    4.          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.

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    5.          
The amount requested is $_____________________.

    

    6.          
The Minimum Acceptable Price selected by the Company is
$_______________.

    

    The
undersigned has executed this Put Notice this ____ day of
_________________.

     

    
      
        
          	
                  ProGreen
      Properties, Inc.

                	 
	 
      	 
      	 
	
                  By:

                	
                    

                	 
	 
      	
                  Jan
      Telander, CEO

                	 

        

      

    

     

    
      
         

      

      
        25Unassociated Document

    

    DEED OF VARIATION

     TO
A PUT AND CALL OPTION AGREEMENT

    DATED
29 JUNE 2010

     

    DATE:   24 August
2010

    

    (1)
Grafton Resource Investments Ltd

    c/o dms
Corporate Services Ltd

    P O Box
1344, DMS House

    20
Genesis Close

    Grand
Cayman, KY1-1108 Cayman Islands

    

    (2)
Universal Gold Holdings (Cayman) Ltd

    C/-
Maples Corporate Finance Services Ltd

    PO Box
309, Ugland House

    Grand
Cayman, KY1-1104 Cayman Islands

     

    BACKGROUND

     

    
      	
               
      

            	
              A.

            	
              On
      29 June 2010, Grafton Resource Investments Ltd, (“Grafton”) and Universal
      Gold Holdings (Cayman) Ltd (“UNIVERSAL”) entered
      into a Put and Call Option Agreement (the “June Agreement”) in
      respect of shares in Kolar Gold plc (an English company No 3404980) (“Kolar”).  Terms
      defined in the June Agreement shall apply where used in this
      Deed.

            

    

    

    
      	
               
      

            	
              B.

            	
              Pursuant
      to the June Agreement, UNIVERSAL has paid the sum of £680,000 by way of
      subscription monies to Kolar and Grafton has in accordance with the June
      Agreement procured that UNIVERSAL has had issued to it by
      Kolar:

            

    

    

    
      	
               
      

            	
              (a)

            	
              a
      Loan Note Certificate No 4 (“Loan Note”) in the sum
      of £680,000 pursuant to the CLN Instrument and giving UNIVERSAL as the
      registered holder thereof the right to convert into 2,720,000 “B” Ordinary
      shares of £0.07 each in Kolar at £0.25 per share;
  and

            

    

    

    
      	
               
      

            	
              (b)

            	
              a
      Warrant Certificate No 4 (“Warrant”) giving
      UNIVERSAL as the registered holder thereof the right to subscribe for
      2,720,000 “B” Ordinary shares of £0.07 each in Kolar at £0.30 per
      share. 

            

    

    

    
      	
               
      

            	
              C.

            	
              Grafton
      confirms that it remains the holder of the 7,160,000 Existing Shares in
      Kolar.

            

    

    

    
      	
               
      

            	
              D.

            	
              Grafton
      and UNIVERSAL wish to cancel and substitute the provisions of clauses 2
      (Call Option), 3 (Put Option) and 4 (Failure to Exercise) of the June
      Agreement with the provisions set out in this
  Deed.

            

    

    

    
      	
               
      

            	
              E.

            	
              Grafton
      anticipates that it will prior to the end of the Call Option Period
      referred to below subscribe for or otherwise acquire rights on a fully
      paid basis to between 6,840,000 and 10,840,000 additional B Ordinary
      Shares in Kolar (“Additional Kolar Share
      Rights”).

            

    

    

    
      	
               
      

            	
              F.

            	
              Grafton
      has agreed to grant UNIVERSAL put and call options over the Existing
      Shares and such Additional Kolar Share Rights as may be acquired by
      Grafton prior to the exercise of the Call Option referred to below for a
      consideration based on the valuation criteria set out or referred to in
      Schedules 1 and 2 to this Agreement and subject to the terms and
      conditions set out below.

            

    

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    
AGREED
TERMS:

    

    In
consideration for the mutual undertakings and commitments given by each party to
the other hereunder it is hereby agreed between Grafton and UNIVERSAL as
follows:

    

    
      	
              1.

            	
              VARIATION

            

    

    

    The June
Agreement is hereby varied by this Deed by the deletion of Clauses 2, 3 and 4 of
the June Agreement and the substitution therefore of clauses 2, 3 and 4
(respectively) of this Deed.

    

    
      	
              2.

            	
              CALL
      OPTION

            

    

     

    
      	
              a)

            	
              Grafton
      hereby grants to UNIVERSAL a 90 day call option (Call Option) to acquire
      Grafton's entire shareholding and share interests in Kolar
      comprising:

            

    

     

    
      	
               
      

            	
              i)

            	
              its
      Existing Shares; and

            

    

     

    
      	
               
      

            	
              ii)

            	
              such
      Additional Kolar Share Rights as Grafton shall have
    acquired

            

    

     

    Provided
that the aggregate of the Existing Shares and Additional Kolar Share Rights
(together “Total Kolar
Shares”) shall not be more than 16,535,000 Total Kolar Shares (“Maximum
Commitment”);

     

    
      	
              b)

            	
              the
      90 day Call Option period shall commence on 16 August 2010 and UNIVERSAL
      acknowledges that 90 days shall be sufficient time for it to conduct
      due diligence in relation to Kolar and to decide whether or not it wishes
      to exercise its call option;

            

    

     

    
      	
              c)

            	
              Where
      the Total Kolar Shares comprise only the Existing Shares the exercise
      price under the Call Option shall
comprise:

            

    

     

    (i) the
issue by UNIVERSAL to Grafton of 15,107,600 new shares in UNIVERSAL credited as
fully paid and ranking pari passu with the existing shares in UNIVERSAL (the
"Shares Consideration");
plus

    

    (ii) the
legally binding commitment for UNIVERSAL to issue to Grafton over an 18 month
period from the date of exercise of the Call Option, warrants to subscribe
for:

     

    
      	
               
      

            	
              (a)

            	
              3,233,026
      new shares in UNIVERSAL, such shares to be issued at $0.75 per share;
      and

            

    

    
      	
               
      

            	
              (b)

            	
              3,233,026
      new shares in UNIVERSAL, such shares to be issued at $0.90 per
      share

            

    

    

    all such
shares in UNIVERSAL ranking pari passu with all other existing shares in
UNIVERSAL (together the “Warrants Consideration”). The
Shares Consideration and the Warrants  Consideration being together
referred to as the “UNIVERSAL
Consideration”.

     

    
      	
              d)

            	
              Where
      the Total Kolar Shares available is equal to the Maximum Commitment the
      exercise price under the Call Option shall
  comprise:

            

    

    

    (i) the
issue by UNIVERSAL to Grafton of 34,888,850 new shares in UNIVERSAL by way of
the Shares
Consideration; plus

    

    (ii) the
legally binding commitment for UNIVERSAL to issue to Grafton over an 18 month
period from the date of exercise of the Call Option, warrants to subscribe
for:

     

    
      	
               
      

            	
              (a)

            	
              7,466,214
      new shares in UNIVERSAL, such shares to be issued at $0.75 per share;
      and

            

    

    
      	
               
      

            	
              (b)

            	
              7,466,214
      new shares in UNIVERSAL, such shares to be issued at $0.90 per
      share

            

    

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    by way of
the Warrants
Consideration.

    

    
      	
              e).

            	
              if
      and to the extent that the Total Kolar Shares available are
      more  than the Existing Shares but less than the Maximum
      Commitment:

            

    

    
      
        	
              	
                (i)

              	
                the
      number of shares in UNIVERSAL to be issued by way of the Shares
      Consideration shall be ascertained in proportion to the number of Total
      Kolar Shares available on the basis of 2.11:1 (namely 2.11 UNIVERSAL
      Shares shall be issued for each Kolar Share)
and

              

      

    

    
      
        	
              	
                (ii)

              	
                the
      number of warrants in respect of UNIVERSAL shares to be issued by way of
      the Warrants Consideration shall be the amount equal to 0.428% of the
      Shares Consideration pursuant to sub- clause (i) above and shall be
      divided equally between warrants at $0.75 per UNIVERSAL Share and warrants
      at $0.90 per UNIVERSAL Share.

              

      

    

    

    
      	
              f)

            	
              for
      the avoidance of doubt if the Total Kolar Shares available to Grafton
      exceeds the Maximum Commitment any such excess Kolar Shares shall not be
      subject to the terms of this Agreement save that Grafton hereby grants to
      UNIVERSAL a right of first refusal to be granted a further 90 day Call
      Option Agreement over such excess Kolar Shares.  UNIVERSAL’s
      right of first refusal shall expire on the Completion Date (as defined
      below) unless UNIVERSAL has given Grafton prior written notice during the
      period from its date of exercise of the Call Option (under this Deed) and
      prior to the Completion Date, that it wishes to exercise such
      right.  As soon as practicable following Grafton’s receipt of
      said notice, the parties hereto shall enter into a further 90 day call
      option agreement commencing on the Completion Date in respect of such
      excess Kolar Shares for an exercise price calculated on the same basis as
      set out in clause 2(e) and Schedules 1 & 2 of this
    Deed.

            

    

    

    
      	
              g)

            	
              UCMC
      shall exercise its Call Option by giving written notice to Grafton during
      the Call Option period, which notice shall be irrevocable (without
      Grafton’s consent) and shall contain UGM’s undertaking
  to:

            

    

    

    
      
        	
              	
                i)

              	
                file
      a registration statement with the SEC  in respect of the new
      shares comprising the Shares Consideration and also comprising the
      Warrants Consideration arising from the exercise by Grafton of its rights
      under the Warrants Consideration in each case within 75 days of issue;
      and

              

      

    

    

    
      
        	
              	
                ii)

              	
                use
      its best endeavours to procure that the SEC ensure registration of each
      such tranche of  shares in UNIVERSAL to which Grafton is
      entitled as above, takes place not more than 180 days after initial
      filing. and

              

      

    

    

    
      
        	
              	
                iii)

              	
                seek,
      with the co-operation of Grafton, a listing for the entire issued share
      capital of UNIVERSAL on AIM, TSX or other equivalent market within 6
      months;

              

      

    

    

    and
completion of the transfer of the Total Kolar Shares by Grafton and issue of the
UNIVERSAL Consideration by UNIVERSAL will take place within 30 days of the
exercise of the Call Option by UNIVERSAL (the “Completion
Date”).

     

    
      	
              3.

            	
              PUT
      OPTION

            

    

    

    
      	
              a.

            	
              Grafton
      hereby also grants to UGCM a 90 day put option (“Put Option”) exercisable
      only during and no later than the end of  the Call Option period
      referred to in paragraph 2 (b) above to require Grafton to acquire from
      UNIVERSAL its entire rights and interest in the Loan Note and Warrant (and
      any New Kolar Shares into which they may at such date have been converted)
      for an aggregate price of £680,000 such purchase to be completed within 30
      days after the exercise of the Put
Option

            

    

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    
      	
              b.

            	
              The
      price payable by Grafton to UNIVERSAL under the Put Option shall be
      satisfied by Grafton in cash (in Sterling or US Dollars at the prevailing
      spot conversion rate) as Grafton shall decide against the transfer to
      Grafton by UNIVERSAL as the registered holder of both the Loan Note and
      Warrant(or shares as aforesaid).

            

    

    

    
      	
              4.

            	
              FAILURE TO
      EXERCISE

            

    

     

    
      In the
event UNIVERSAL does not exercise either its Call Option or its Put Option
within the option period, both such options will lapse and in such circumstances
Grafton shall retain the Existing Shares and any Additional Kolar Share Rights
and UNIVERSAL shall retain the Loan Note and Warrant and/or  New Kolar
Shares as the case may be.

    

     

    
      	
              5.

            	
              GOVERNING
      LAW

            

    

     

    
      This Deed
shall be governed by English law and Grafton and UNIVERSAL agree to the
non-excusive jurisdiction of the English courts.

    

     

    
      	
              6.

            	
              CONFIDENTIALITY

            

    

     

    The
parties undertake to each other to keep confidential the existence of this Deed
and UNIVERSAL undertakes that it will not issue any announcement or press
release in relation to or containing information relating to Kolar, nor shall it
disclose to any third party any information relating to Kolar made available to
it during the course of its due diligence, and that it will use the information
available to it in relation to Kolar only for the purposes contemplated by this
Deed,

     

    SAVE THAT
either party may disclose any information that it is otherwise required to keep
confidential under this clause 6:

     

    
      
        	
                i.

              	
                to
      such of its professional advisers, consultants and employees or officers
      as are reasonably necessary to advise on this Deed, or to facilitate the
      exercise of the Option, provided that the disclosing party procures that
      the people to whom the information is disclosed keep it confidential as if
      they were that party; or

              

      

    

    
       

      
        	
                ii.

              	
                with
      the written consent of the other party;
or

              

      

    

    
       

      
        	
                iii.

              	
                to
      the extent that the disclosure is required by law or by an regulatory
      body, tax authority or securities
exchange,

              

      

    

    

    but shall
use reasonable endeavours to consult the other party and give them a reasonable
time to respond and take into account any reasonable requests such other party
may have in relation to the disclosure before making it.

     

    
      	
              7.

            	
              FURTHER
      ASSURANCE

            

    

     

    At all
times after the date of this Deed the parties shall, at their own expense,
execute all such documents and do all such acts and things as may reasonably be
required for the purpose of giving full effect to this Deed.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    
      	
              8.

            	
              ASSIGNMENT

            

    

     

    All
rights under this Deed are personal to the parties and may not be assigned by
either party without the prior written consent of the other party.

    

    
      	
              9.

            	
              WHOLE
      AGREEMENT

            

    

     

    This
Deed, and any documents referred to in it, constitute the whole agreement
between the parties and supersede any previous arrangement, understanding or
agreement between them relating to the subject matter they cover.

     

    
      	
              10.

            	
              VARIATION
      AND WAIVER

            

    

    

    
      	
              a.

            	
              A
      variation of this Deed shall be in writing and signed by or on behalf of
      each party.

            

    

    
      	
              b.

            	
              Any
      waiver of any right under this Deed is only effective if it is in writing
      and signed by the waiving or consenting party and it applies only in the
      circumstances for which it is given, and shall not prevent the party who
      has given the waiver from subsequently relying on the provision it has
      waived.

            

    

    
      	
              c.

            	
              Except
      as expressly stated, no failure to exercise or delay in exercising any
      right or remedy provided under this Deed or by law constitutes a waiver of
      such right or remedy or shall prevent any future exercise in whole or in
      part thereof.

            

    

    
      	
              d.

            	
              No
      single or partial exercise of any right or remedy under this Deed shall
      preclude or restrict the further exercise of any such right or
      remedy.

            

    

    
      	
              e.

            	
              Unless
      specifically provided otherwise, rights arising under this Deed are
      cumulative and do not exclude rights provided by
  law.

            

    

     

    
      	
              11.

            	
              COSTS

            

    

    

    UNIVERSAL
shall pay on demand, an amount equal to fifty percent (50%) of all reasonable
legal costs and expenses (together with any value added tax on them) that
Grafton incurs in connection with the negotiation and preparation, amendment,
extension, alteration of the June Agreement, this Deed and any further 90 day
call option agreement (described in clause 2(f)) including without limitation
such legal costs and expenses incurred by Grafton in effecting any transfers of
shares in Kolar to UNIVERSAL in connection thereto.  Except as
provided in this Deed each party shall bear its own legal, accountancy and other
costs, charges and expenses connected with the negotiation, preparation and
implementation of this Deed and any other agreement incidental to or referred to
in this Deed.

     

    
      	
              12.

            	
              NOTICES

            

    

     

    
      	
              a.

            	
              A
      notice given under this Deed shall be in writing and shall be sent for the
      attention of the person, and to the address given above or to such other
      address, fax number or person as the relevant party may notify to the
      other party)  and shall be delivered personally or sent by
      fax  or sent by pre-paid first-class post or recorded
      delivery.

            

    

     

    
      	
              b.

            	
              A
      notice is deemed to have been
received:

            

    

    
       

      
        	
              	
                i.

              	
                if
      delivered personally, at the time of delivery;
  or

              

      

    

    
      
        	
              	
                ii.

              	
                in
      the case of fax, at the time of transmission;
or

              

      

    

    
      
        	
              	
                iii.

              	
                in
      the case of pre-paid first class post or recorded delivery, 48 hours from
      the date of posting;

              

      

    

     

    AND if
deemed receipt under the previous paragraphs of this clause 12.b) is not within business hours (meaning 9.00
am to 5.30 pm Monday to Friday on a day that is not a Business Day), when
business next starts in the place of receipt. To prove service, it is sufficient
to prove that the notice was transmitted by fax to the fax number of the party
or, in the case of post, that the envelope containing the notice was properly
addressed and posted.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    
      	
              13.

            	
              SEVERANCE

            

    

     

    
      	
              a.

            	
              If
      any provision of this Deed (or part of a provision) is found by any court
      or administrative body of competent jurisdiction to be invalid,
      unenforceable or illegal, the other provisions shall remain in
      force.

            

    

    

    
      	
              b.

            	
              If
      any invalid, unenforceable or illegal provision would be valid,
      enforceable or legal if some part of it were deleted, the provision shall
      apply with whatever modification is necessary to give effect to the
      commercial intention of the
parties.

            

    

     

    
      	
              14.

            	
              THIRD
      PARTY RIGHTS

            

    

    

     No
term of this Deed shall be enforceable by a third party (being any
person   other than the parties and their permitted successors
and assignees).

     

    
      	
              15. 

            	
              COUNTERPARTS

            

    

    

    This Deed
may be executed in any number of counterparts, each of which is an original and
which together have the same effect as if each party had signed the same
document.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    
      	Executed and
      delivered as a deed  	 )	 
	For and on behalf of
      Grafton 	 )	 
	Resource Investments
      Ltd in 	 )	/s/ David
      Hutchins
	the presence
      of:  	 )	 
	 	 	 
	in the presence of
      :	 )	 
	 	 	 
	Signature
      of witness: /s/ Matthew Lavers	 
	Name:  Matthew
      Lavers	 
	Address:  11
      Albermarle St.	 
	Occupation:  Financial
      Analyst	 

    

     

     

    
       

      
        	Executed and
      delivered as a deed  	 )	 
	For and on behalf
      of	 )	 
	Universal Gold
      Holdings	 )	 /s/ David Cather,
      Director
	Cayman)
      Ltd in	 )	 
	the presence
      of:  	 )	 
	 	 	 
	in the presence of
      :	 )	 
	 	 	 
	Signature
      of witness: /s/ Miles Leahy	 	 
	Name:  Miles
      Leahy	 	 
	Address:  1920
      Grosvenor St.	 	 
	Occupation:  Analyst	 	 

      

    

    

    
      
         

      

      
        7

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