Document:

f8k111609ex10i_recovery.htm

    Exhibit
10.1

     

    
      	
              SECURITIES
      PURCHASE AGREEMENT

            

    

     

    This
Securities Purchase Agreement (this “Agreement”) is dated
as of November 16, 2009, among Recovery Energy, Inc., a Nevada corporation (the
“Company”), and
each purchaser identified on the signature pages hereto (each, including its
successors and assigns, a “Purchaser” and
collectively the “Purchasers”).

     

    WHEREAS,
subject to the terms and conditions set forth in this Agreement, the Company
desires to issue and sell to each Purchaser, and each Purchaser, severally and
not jointly, desires to purchase from the Company, securities of the Company as
more fully described in this Agreement.

     

    NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for other good and valuable consideration the receipt and adequacy of which
are hereby acknowledged, the Company and each Purchaser agree as
follows:

     

    ARTICLE
I.

     

    DEFINITIONS

     

    1.1 Definitions.  In
addition to the terms defined elsewhere in this Agreement, for all purposes of
this Agreement, the following terms have the meanings set forth in this Section
1.1:

     

    “Affiliate” means any
Person that, directly or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with a Person as such terms are
used in and construed under Rule 405 under the Securities Act.

     

    “Board of Directors”
means the board of directors of the Company.

     

    “Business Day” means
any day except any Saturday, any Sunday, any day which is a federal legal
holiday in the United States or any day on which banking institutions in the
State of New York are authorized or required by law or other governmental action
to close.

     

    “Closing” means the
closing of the purchase and sale of the Securities pursuant to Section
2.1.

     

    “Closing Date” means
the Trading Day on which all of the Transaction Documents have been executed and
delivered by the applicable parties thereto, and all conditions precedent to (i)
the Purchasers’ obligations to pay the Subscription Amount and (ii) the
Company’s obligations to deliver the Securities, in each case, have been
satisfied or waived.

     

    “Commission” means the
United States Securities and Exchange Commission.

     

    “Common Stock” means
the common stock of the Company, par value $0.001 per share, and any other class
of securities into which such securities may hereafter be reclassified or
changed.

     

    
      
        
        

      

      
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    “Disclosure Schedules”
means the Disclosure Schedules of the Company delivered concurrently
herewith.

     

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

    

    “Liens” means a lien,
charge, security interest, encumbrance, right of first refusal, preemptive right
or other restriction.

     

    “Per Share Purchase
Price” equals $4.00, subject to adjustment for reverse and forward stock
splits, stock dividends, stock combinations and other similar transactions of
the Common Stock that occur after the date of this Agreement.

     

    “Person” means an
individual or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any
kind.

     

    “Proceeding” means an
action, claim, suit, investigation or proceeding (including, without limitation,
an informal investigation or partial proceeding, such as a deposition), whether
commenced or threatened.

     

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

     

    “Securities” means the
Shares.

     

    “Securities Act” means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.

     

    “Shares” means the
shares of Common Stock issued or issuable to each Purchaser pursuant to this
Agreement.

     

    “Short Sales” means
all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange
Act (but shall not be deemed to include the location and/or reservation of
borrowable shares of Common Stock).

     

    “Subscription Amount”
means, as to each Purchaser, the aggregate amount to be paid for Shares
purchased hereunder as specified below such Purchaser’s name on the signature
page of this Agreement and next to the heading “Subscription Amount,” in United
States dollars and in immediately available funds.

     

    “Trading Day” means a
day on which the Trading Market is open for trading.

     

    “Trading Market” means
the Over the Counter Bulletin Board.

     

    
      
        
        

      

      
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    “Transaction
Documents” means this Agreement, and any other documents or agreements
executed in connection with the transactions contemplated
hereunder.

     

    ARTICLE
II.

     

    PURCHASE
AND SALE

     

    2.1 Closing.  On
the Closing Date, upon the terms and subject to the conditions set forth herein,
substantially concurrent with the execution and delivery of this Agreement by
the parties hereto, the Company agrees to sell, and the Purchasers, severally
and not jointly,  agree to purchase, up to an aggregate of
$2,000,000.00 of Shares.  Each Purchaser shall deliver to the Company,
via wire transfer or a certified check of immediately available funds equal to
such Purchaser’s Subscription Amount as set forth on the signature page hereto
executed by such Purchaser and the Company, and the Company shall deliver to
each Purchaser its respective Shares as determined pursuant to Section
2.2(a)(ii), and the Company and each Purchaser shall deliver the other items set
forth in Section 2.2 deliverable at the Closing.  Upon satisfaction of
the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing
shall occur at the offices of the Company or such other location as the parties
shall mutually agree.

     

    2.2 Deliveries.

     

    (a) On or
prior to the Closing Date, the Company shall deliver or cause to be delivered to
each Purchaser the following:

     

    (i) this
Agreement duly executed by the Company;

     

    (ii) a
certificate representing a number of Shares equal to the Subscription Amount for
such Purchaser divided by the Per Share Purchase Price;

     

    (b) On or
prior to the Closing Date, each Purchaser shall deliver or cause to be delivered
to the Company the following:

     

    (i) this
Agreement duly executed by such Purchaser; and

     

    (ii) such
Purchaser’s Subscription Amount by wire transfer to the account as specified in
writing by the Company.

     

    2.3 Closing
Conditions.

     

    (a)           The
obligations of the Company hereunder in connection with the Closing are subject
to the following conditions being met:

     

    (i) the
accuracy in all material respects when made and on the Closing Date of the
representations and warranties of the Purchasers contained herein (unless as of
a specific date therein);

     

    (ii) all
obligations, covenants and agreements of each Purchaser required to be performed
at or prior to the Closing Date shall have been performed; and

     

    
      
        
        

      

      
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    (iii) the
delivery by each Purchaser of the items set forth in Section 2.2(b) of this
Agreement.

     

    (b) The
respective obligations of the Purchasers hereunder in connection with the
Closing are subject to the following conditions being met:

     

    (i) the
accuracy in all material respects when made and on the Closing Date of the
representations and warranties of the Company contained herein (unless as of a
specific date therein);

     

    (ii) all
obligations, covenants and agreements of the Company required to be performed at
or prior to the Closing Date shall have been performed;

     

    (iii) the
delivery by the Company of the items set forth in Section 2.2(a) of this
Agreement;

     

    (iv) there
shall have been no Material Adverse Effect with respect to the Company since the
date hereof; and

     

    (v) from the
date hereof to the Closing Date, trading in the Common Stock shall not have been
suspended by the Commission or the Trading Market (except for any suspension of
trading of limited duration agreed to by the Company, which suspension shall be
terminated prior to the Closing), and, at any time prior to the Closing Date,
trading in securities generally as reported by Bloomberg L.P. shall not have
been suspended or limited, or minimum prices shall not have been established on
securities whose trades are reported by such service, or on the Trading Market,
nor shall a banking moratorium have been declared either by the United States or
New York State authorities nor shall there have occurred any material outbreak
or escalation of hostilities or other national or international calamity of such
magnitude in its effect on, or any material adverse change in, any financial
market which, in each case, in the reasonable judgment of each Purchaser, makes
it impracticable or inadvisable to purchase the Securities at the
Closing.

     

    ARTICLE
III.

     

    REPRESENTATIONS
AND WARRANTIES

     

    3.1 Representations and
Warranties of the Company.  Except as set forth in the
Disclosure Schedules, which Disclosure Schedules shall be deemed a part hereof
and shall qualify any representation or otherwise made herein to the extent of
the disclosure contained in the corresponding section of the Disclosure
Schedules, the Company hereby makes the following representations and warranties
to each Purchaser:

     

    (a) Subsidiaries.  The
Company is the sole member of two Nevada limited liability companies, Recovery
Oil & Gas, LLC and Recovery Energy Services, LLC.   Except
for those entities or as set forth in the SEC Reports, the Company does not own
any capital stock or other equity interests of any other Person.

     

    
      
        
        

      

      
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    (b) Organization and
Qualification.  The Company is an entity duly incorporated or
otherwise organized, validly existing and in good standing under the laws of the
State of Nevada, with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently
conducted.  The Company is not in violation or default of any of the
provisions of its articles of incorporation or bylaws.  The Company is
duly qualified to conduct business and is in good standing as a foreign
corporation or other entity in each jurisdiction in which the nature of the
business conducted or property owned by it makes such qualification necessary,
except where the failure to be so qualified or in good standing, as the case may
be, would reasonably be expected to result in: (i) a material adverse effect on
the legality, validity or enforceability of any Transaction Document, (ii) a
material adverse effect on the results of operations, assets, business or
condition (financial or otherwise) of the Company, or (iii) a material adverse
effect on the Company’s ability to perform in any material respect on a timely
basis its obligations under any Transaction Document (any of (i), (ii) or (iii),
a “Material Adverse
Effect”), and no Proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing or seeking to revoke, limit or curtail such
power and authority or qualification.

     

    (c) Authorization;
Enforcement.  The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by each
of the Transaction Documents and otherwise to carry out its obligations
hereunder and thereunder.  The execution and delivery of each of the
Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary action on the part of the Company and no further action is required by
the Company, the Board of Directors or the Company’s stockholders in connection
therewith other than in connection with the Required Approvals.  Each
Transaction Document to which it is a party has been (or upon delivery will have
been) duly executed by the Company and, when delivered in accordance with the
terms hereof and thereof, will constitute the valid and binding obligation of
the Company enforceable against the Company in accordance with its terms, except
(i) as limited by general equitable principles and applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance and other laws of
general application affecting enforcement of creditors’ rights generally, (ii)
as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable
law.

     

    (d) No
Conflicts.  The execution, delivery and performance by the
Company of the Transaction Documents, the issuance and sale of the Securities
and the consummation by it of the transactions contemplated hereby and thereby
to which it is a party do not and will not (i) conflict with or violate any
provision of the Company’s articles of incorporation or bylaws, or (ii) conflict
with, or constitute a default (or an event that with notice or lapse of time or
both would become a default) under, result in the creation of any Lien upon any
of the properties or assets of the Company, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company debt or otherwise) or other understanding to
which the Company is a party or by which any property or asset of the Company is
bound or affected, or (iii) subject to the Required Approvals, conflict with or
result in a violation of any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or governmental authority to which the
Company is subject (including federal and state securities laws and
regulations), or by which any property or asset of the Company is bound or
affected; except in the case of each of clauses (ii) and (iii), such as would
not have or reasonably be expected to result in a Material Adverse
Effect.

     

    
      
        
        

      

      
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    (e) Filings, Consents and
Approvals.  The Company is not required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents, other
than: (i) the filings required pursuant to Section 4.3 of this Agreement, (ii)
application to the Trading Market for the listing of the Securities for trading
thereon in the time and manner required thereby and (iii) such filings as are
required to be made under applicable state securities laws (collectively, the
“Required
Approvals”).

     

    (f) Issuance of the
Securities.  The Securities are duly authorized and, when
issued and paid for in accordance with the applicable Transaction Documents,
will be duly and validly issued, fully paid and nonassessable, free and clear of
all Liens imposed by the Company.  The Company has reserved from its
duly authorized capital stock the maximum number of shares of Common Stock
issuable pursuant to this Agreement.

     

    (g) Capitalization.  The
authorized capital stock of the Company consists of (a) 100,000,000 shares of
Common Stock, of which 10,383,388 shares were issued and outstanding as of the
close of business on the date hereof, and (b) 10,000,000 shares of preferred
stock, par value $0.001 per share, of which no shares were issued and
outstanding as of the date hereof. The issued and outstanding shares of Common
Stock have been duly authorized and validly issued, are fully paid and
nonassessable, have been issued in compliance with all federal and state
securities laws, and were not issued in violation of or subject to any
preemptive rights or other rights to subscribe for or purchase
securities.  Except as set forth in the SEC Reports, the Company does
not have outstanding any options to purchase, or any preemptive rights or other
rights to subscribe for or to purchase, any securities or obligations
convertible into, or any contracts or commitments to issue or sell, shares of
its capital stock or any such options, rights, convertible securities or
obligations.

     

    (h) SEC Reports; Financial
Statements.  The Company has complied in all material respects
with requirements to file all reports, schedules, forms, statements and other
documents required to be filed by the Company under the Securities Act and the
Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the one
year preceding the date hereof (or such shorter period as the Company was
required by law or regulation to file such material) (the foregoing materials,
including the exhibits thereto and documents incorporated by reference therein,
being collectively referred to herein as the “SEC Reports”) on a
timely basis or has received a valid extension of such time of filing and has
filed any such SEC Reports prior to the expiration of any such
extension.  As of their respective dates, the SEC Reports complied in
all material respects with the requirements of the Securities Act or Exchange
Act, as applicable, and none of the SEC Reports, when filed, contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading. The
Company has not been an issuer subject to Rule 144(i) under the Securities Act
since January 1, 2008. The financial statements of the Company included in the
SEC Reports comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing.  Such financial statements
have been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the periods involved
(“GAAP”),
except as may be otherwise specified in such financial statements or the notes
thereto and except that unaudited financial statements may not contain all
footnotes required by GAAP, and fairly present in all material respects the
financial position of the Company as of and for the dates thereof and the
results of operations and cash flows for the periods then ended, subject, in the
case of unaudited statements, to normal, immaterial, year-end audit
adjustments.

     

    
      
        
        

      

      
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    (i) Material Changes;
Undisclosed Events, Liabilities or Developments.  Since the
date of the latest audited financial statements included within the SEC Reports,
except as specifically disclosed in a subsequent SEC Report filed prior to the
date hereof, (i) there has been no event, occurrence or development that has had
or that would reasonably be expected to result in a Material Adverse Effect,
(ii) the Company has not incurred any material liabilities (contingent or
otherwise) other than (A) trade payables and accrued expenses incurred in the
ordinary course of business consistent with past practice and (B) liabilities
not required to be reflected in the Company’s financial statements pursuant to
GAAP or required to be disclosed in filings made with the Commission, (iii) the
Company has not materially altered its method of accounting, (iv) the Company
has not declared or made any dividend or distribution of cash or other property
to its stockholders or purchased, redeemed or made any agreements to purchase or
redeem any shares of its capital stock and (v) the Company has not issued any
equity securities to any officer, director or Affiliate, except pursuant to
existing Company stock option or compensation plans.  Except for the
issuance of the Securities contemplated by this Agreement or as set forth in the
SEC Reports, no event, liability or development has occurred or exists with
respect to the Company or its business, properties, operations or financial
condition, that would be required to be disclosed by the Company under
applicable securities laws at the time this representation is made or deemed
made that has not been publicly disclosed at least 1 Trading Day prior to the
date that this representation is made.

     

    (j) Litigation.  There
is no action, suit, inquiry, notice of violation, proceeding or investigation
pending or, to the knowledge of the Company, threatened against or affecting the
Company or any of its properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority (federal, state,
county, local or foreign) (collectively, an “Action”) which (i)
adversely affects or challenges the legality, validity or enforceability of any
of the Transaction Documents or the Securities or (ii) could, if there were an
unfavorable decision, have or reasonably be expected to result in a Material
Adverse Effect.  Neither the Company nor, to the Company’s knowledge,
any director or officer thereof, is or has been the subject of any Action
involving a claim of violation of or liability under federal or state securities
laws or a claim of breach of fiduciary duty.  There has not been, and
to the knowledge of the Company, there is not pending or contemplated, any
investigation by the Commission involving the Company or, to the Company’s
knowledge, any current or former director or officer of the
Company.

     

    
      
        
        

      

      
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    (k) Labor
Relations.  No material labor dispute exists or, to the
knowledge of the Company, is imminent with respect to any of the employees of
the Company, which would reasonably be expected to result in a Material Adverse
Effect.  None of the Company’s employees is a member of a union that
relates to such employee’s relationship with the Company, and the Company is not
a party to a collective bargaining agreement, and the Company believes that its
relationships with its employees are good.  No executive officer, to
the knowledge of the Company, is, or is now expected to be, in violation of any
material term of any employment contract, confidentiality, disclosure or
proprietary information agreement or non-competition agreement, or any other
contract or agreement or any restrictive covenant in favor of any third party,
and, to the Company’s knowledge, the continued employment of each such executive
officer does not subject the Company to any liability with respect to any of the
foregoing matters.  The Company is in compliance with all U.S.
federal, state, local and foreign laws and regulations relating to employment
and employment practices, terms and conditions of employment and wages and
hours, except where the failure to be in compliance could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse
Effect.

     

    (l) Compliance.  The
Company: (i) is not in default under or in violation of (and no event has
occurred that has not been waived that, with notice or lapse of time or both,
would result in a default by the Company under), nor has the Company received
notice of a claim that it is in default under or that it is in violation of, any
indenture, loan or credit agreement or any other agreement or instrument to
which it is a party or by which it or any of its properties is bound (whether or
not such default or violation has been waived), (ii) is in violation of any
judgment, decree or order of any court, arbitrator or governmental body or (iii)
is or has been in violation of any statute, rule, ordinance or regulation of any
governmental authority, including without limitation all foreign, federal, state
and local laws applicable to its business and all such laws that affect the
environment, except in each case as would not reasonably be expected to result
in a Material Adverse Effect.

     

    (m) Regulatory
Permits.  The Company possesses all certificates,
authorizations and permits issued by the appropriate federal, state, local or
foreign regulatory authorities necessary to conduct its business as described in
the SEC Reports, except where the failure to possess such permits could not
reasonably be expected to result in a Material Adverse Effect (“Material Permits”),
and the Company has not received any notice of proceedings relating to the
revocation or modification of any Material Permit.

     

    
      
        
        

      

      
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    (n) Title to
Assets.  The Company does not own any real
property.  Except as set forth in the SEC Reports, the Company has
good and marketable title in fee simple in all personal property owned by it
that is material to the business of the Company, free and clear of all Liens,
except for Liens as do not materially affect the value of such property and do
not materially interfere with the use made and proposed to be made of such
property by the Company and Liens for the payment of federal, state or other
taxes, the payment of which is neither delinquent nor subject to
penalties.  Any real property and facilities held under lease by the
Company are held by them under valid, subsisting and enforceable leases with
which the Company is in compliance, except where such non-compliance would not
reasonably be expected to have a Material Adverse Effect.

     

    (o) Patents and
Trademarks.  The Company has, or has rights to use, all
patents, patent applications, trademarks, trademark applications, service marks,
trade names, trade secrets, inventions, copyrights, licenses and other similar
intellectual property rights as described in the SEC Reports as necessary or
material for use in connection with its business and which the failure to so
have would not reasonably be expected to have a Material Adverse Effect
(collectively, the “Intellectual Property
Rights”).  In the last twelve months, the Company has not
received a notice (written or otherwise) that any of the Intellectual Property
Rights used by the Company violates or infringes upon the rights of any
Person.  To the knowledge of the Company, all such Intellectual
Property Rights are enforceable and there is no existing infringement by another
Person of any of the Intellectual Property Rights of others which would
reasonably be expected to have a Material Adverse Effect.  The Company
has taken reasonable security measures to protect the secrecy, confidentiality
and value of all of their intellectual properties, except where failure to do so
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

     

    (p) Transactions With Affiliates
and Employees.  Except as set forth in the SEC Reports, none of
the officers or directors of the Company and, to the knowledge of the Company,
none of the employees of the Company is presently a party to any transaction
with the Company (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner, in each case in excess of $120,000
other than for (i) payment of salary or consulting fees for services rendered,
(ii) reimbursement for expenses incurred on behalf of the Company and (iii)
other employee benefits, including stock option agreements under any stock
option plan of the Company.

     

    (q) Investment Company.
The Company is not, and is not an Affiliate of, and immediately after receipt of
payment for the Securities, will not be or be an Affiliate of, an “investment
company” within the meaning of the Investment Company Act of 1940, as
amended.

     

    
      
        
        

      

      
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    (r) Listing and Maintenance
Requirements.  The Common Stock is registered pursuant to
Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action
designed to, or which to its knowledge is likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act nor has
the Company received any notification that the Commission is contemplating
terminating such registration.  The Company has not, in the twelve
months preceding the date hereof, received notice from the Trading Market to the
effect that the Company is not in compliance with the material listing or
maintenance requirements of the Trading Market. The Company is, and has no
reason to currently believe that it will not in the foreseeable future continue
to be, in compliance with all such listing and maintenance
requirements.

     

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

     

    (t) Disclosure.  Except
with respect to the material terms and conditions of the transactions
contemplated by the Transaction Documents, the Company confirms that neither it
nor any other Person acting on its behalf has provided any of the Purchasers or
their agents or counsel with any information that it believes constitutes or
might constitute material, non-public information.  The Company
understands and confirms that the Purchasers will rely on the foregoing
representation in effecting transactions in securities of the
Company.  All of the disclosure furnished by or on behalf of the
Company to the Purchasers regarding the Company, its business and the
transactions contemplated hereby, including the Disclosure Schedules to this
Agreement, is true and correct and does not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. The Company acknowledges and agrees that no Purchaser
makes or has made any representations or warranties with respect to the
transactions contemplated hereby other than those specifically set forth in
Section 3.2 hereof.

     

    (u) Integration; Other Issuances
of Shares.  Neither the Company nor any affiliates, nor any
person or entity acting on its or their behalf, has issued any shares of Common
Stock or shares of any series of preferred stock or other securities or
instruments convertible into, exchangeable for or otherwise entitling the holder
thereof to acquire shares of Common Stock that would be integrated with the sale
of the Securities to such Purchaser for purposes of the Securities Act or of any
applicable stockholder approval provisions, including, without limitation, under
the rules and regulations of the Trading Market, nor will the Company or
affiliates take any action or steps that would require registration of any of
the Securities under the Securities Act or cause the offering of the Securities
to be integrated with other offerings. Assuming the accuracy of the
representations and warranties of Purchasers set forth in this Agreement, the
offer and sale of the Shares by the Company to the Purchasers pursuant to the
Agreement will be exempt from the registration requirements of the Securities
Act.

     

    
      
        
        

      

      
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    (v) Tax
Status.  Except for matters that would not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect, the Company has filed all necessary federal, state and foreign income
and franchise tax returns and has paid or accrued all taxes shown as due
thereon, and the Company has no knowledge of a tax deficiency which has been
asserted or threatened against the Company.

     

    (w) Foreign Corrupt
Practices.  Neither the Company nor, to the knowledge of the
Company, any agent or other person acting on behalf of the Company, has (i)
directly or indirectly, used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company (or made by any person acting on their behalf
of which the Company is aware) which is in violation of law, or (iv) violated in
any material respect any provision of the Foreign Corrupt Practices Act of 1977,
as amended.

     

    (x) Accountants.  The
Company’s accounting firm is Jewett, Schwartz, Wolfe &
Associates.  To the knowledge of the Company, such accounting firm is
a registered public accounting firm as required by the Exchange Act who the
Company expects will express its opinion with respect to the financial
statements to be included in the Company’s next Annual Report on Form 10-K for
the year ended December 31, 2009.

     

    (y) Acknowledgment Regarding
Purchasers’ Purchase of Securities.  The Company acknowledges
and agrees that each of the Purchasers is acting solely in the capacity of an
arm’s length purchaser with respect to the Transaction Documents and the
transactions contemplated thereby.  The Company further acknowledges
that no Purchaser is acting as a financial advisor or fiduciary of the Company
(or in any similar capacity) with respect to the Transaction Documents and the
transactions contemplated thereby and any advice given by any Purchaser or any
of their respective representatives or agents in connection with the Transaction
Documents and the transactions contemplated thereby is merely incidental to the
Purchasers’ purchase of the Securities.  The Company further
represents to each Purchaser that the Company’s decision to enter into this
Agreement and the other Transaction Documents has been based solely on the
independent evaluation of the transactions contemplated hereby by the Company
and its representatives.

     

    
      
        
        

      

      
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    (z) Acknowledgement
Regarding Purchaser’s Trading Activity.  Anything in this
Agreement or elsewhere herein to the contrary notwithstanding, it is understood
and acknowledged by the Company that: (i) none of the Purchasers have been asked
by the Company to agree, nor has any Purchaser agreed, to desist from purchasing
or selling, long and/or short, securities of the Company, or “derivative”
securities based on securities issued by the Company or to hold the Securities
for any specified term; (ii) past or future open market or other transactions by
any Purchaser, specifically including, without limitation, Short Sales or
“derivative” transactions, before or after the closing of this or future private
placement transactions, may negatively impact the market price of the Company’s
publicly-traded securities; (iii) any Purchaser, and counter-parties in
“derivative” transactions to which any such Purchaser is a party, directly or
indirectly, presently may have a “short” position in the Common Stock, and (iv)
each Purchaser shall not be deemed to have any affiliation with or control over
any arm’s length counter-party in any “derivative” transaction.  The
Company further understands and acknowledges that (y) one or more Purchasers may
engage in hedging activities at various times during the period that the
Securities are outstanding, and (z) such hedging activities (if any) could
reduce the value of the existing stockholders' equity interests in the Company
at and after the time that the hedging activities are being
conducted.  The Company acknowledges that such aforementioned hedging
activities do not constitute a breach of any of the Transaction
Documents.

     

    (aa) Price of Common
Stock. The Company has not taken, directly or indirectly, any action
designed to cause or result in, or that has constituted or that might reasonably
be expected to constitute, the stabilization or manipulation of the price of the
shares of the Common Stock to facilitate the sale or resale of the
Shares.

     

    3.2 Representations and
Warranties of the Purchasers.  Each Purchaser, for itself and
for no other Purchaser, hereby represents and warrants as of the date hereof and
as of the Closing Date to the Company as follows (unless as of a specific date
therein):

     

    (a) Organization;
Authority.  Such Purchaser is either an individual or an entity
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with full right, corporate or partnership power
and authority to enter into and to consummate the transactions contemplated by
this Agreement and otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery of this Agreement and performance by such
Purchaser of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate, partnership, limited liability company or
similar action, as applicable, on the part of such Purchaser.  Each
Transaction Document to which it is a party has been duly executed by such
Purchaser, and when delivered by such Purchaser in accordance with the terms
hereof, will constitute the valid and legally binding obligation of such
Purchaser, enforceable against it in accordance with its terms, except: (i) as
limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law.

     

    
      
        
        

      

      
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    (b) Own
Account.  Such Purchaser is acquiring the Securities as
principal for its own account and not with a view to or for distributing or
reselling such Securities or any part thereof in violation of the Securities Act
or any applicable state securities law, has no present intention of distributing
any of such Securities in violation of the Securities Act or any applicable
state securities law and has no direct or indirect arrangement or understandings
with any other persons to distribute or regarding the distribution of such
Securities in violation of the Securities Act or any applicable state securities
law (this representation and warranty not limiting such Purchaser’s right to
sell the Securities in compliance with applicable federal and state securities
laws).  Such Purchaser is acquiring the Securities hereunder in the
ordinary course of its business.

     

    (c) Purchaser
Status.  At the time such Purchaser was offered the Securities,
it was, and as of the date hereof it is, it will be either: (i) an “accredited
investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under
the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule
144A(a) under the Securities Act.  Such Purchaser is not required to
be registered as a broker-dealer under Section 15 of the Exchange
Act.

     

    (d) Experience of Such
Purchaser.  Such Purchaser, either alone or together with its
representatives, 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, and has so evaluated the merits
and risks of such investment.  Such Purchaser is able to bear the
economic risk of an investment in the Securities and, at the present time, is
able to afford a complete loss of such investment.

     

    (e) Residency.  The
Purchaser’s principal executive offices are in the jurisdiction set forth
immediately below the Purchaser’s name on the signature pages
hereto.

     

    (f) Legend; Legend Removal;
Damages. The Purchaser understands that, until such time as the
Securities may be sold pursuant to Rule 144 under the Securities Act without any
restriction as to the number of securities as of a particular date that can then
be immediately sold, the Securities will bear a restrictive legend in
substantially the following form:

     

    “THE
SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES
LAWS OF ANY STATE OR OTHER JURISDICTION. THE SHARES MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH
ALL APPLICABLE STATE SECURITIES LAWS AND THE SECURITIES LAWS OF OTHER
JURISDICTIONS, AND IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS
THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT
THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND
SUCH OTHER APPLICABLE LAWS.”

     

    
      
        
        

      

      
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    (g) Certain Transactions and
Confidentiality.  Other than consummating the transactions
contemplated hereunder, such Purchaser has not, nor has any Person acting on
behalf of or pursuant to any understanding with such Purchaser, directly or
indirectly executed any purchases or sales, including Short Sales, of the
securities of the Company during the period commencing as of the time that such
Purchaser first received a term sheet (written or oral) from the Company or any
other Person representing the Company setting forth the material terms of the
transactions contemplated hereunder and ending immediately prior to the
execution hereof.  Notwithstanding the foregoing, in the case of a
Purchaser that is a multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of such Purchaser’s assets and the portfolio
managers have no direct knowledge of the investment decisions made by the
portfolio managers managing other portions of such Purchaser’s assets, the
representation set forth above shall only apply with respect to the portion of
assets managed by the portfolio manager that made the investment decision to
purchase the Securities covered by this Agreement.  Other than to
other Persons party to this Agreement, such Purchaser has maintained the
confidentiality of all disclosures made to it in connection with this
transaction (including the existence and terms of this transaction).
Notwithstanding the foregoing, for avoidance of doubt, nothing contained herein
shall constitute a representation or warranty, or preclude any actions, with
respect to the identification of the availability of, or securing of, available
shares to borrow in order to effect Short Sales or similar transactions in the
future.

     

    The
Company acknowledges and agrees that the representations contained in Section
3.2 shall not modify, amend or affect such Purchaser’s right to rely on the
Company’s representations and warranties contained in this Agreement or any
representations and warranties contained in any other Transaction Document or
any other document or instrument executed and/or delivered in connection with
this Agreement or the consummation of the transaction contemplated
hereby.

     

    ARTICLE
IV.

     

    OTHER
AGREEMENTS OF THE PARTIES

     

    4.1 Furnishing of
Information.  Until the time that no Purchaser owns Securities,
the Company covenants to timely file (or obtain extensions in respect thereof
and file within the applicable grace period) all reports required to be filed by
the Company after the date hereof pursuant to the Exchange Act even if the
Company is not then subject to the reporting requirements of the Exchange
Act.  As long as any Purchaser owns Securities, if the Company is not
required to file reports pursuant to the Exchange Act, it will prepare and
furnish to the Purchasers and make publicly available in accordance with Rule
144(c) such information as is required for the Purchasers to sell the
Securities, including without limitation, under Rule 144. The Company further
covenants that it will take such further action as any holder of Securities may
reasonably request, to the extent required from time to time to enable such
Person to sell such Securities without registration under the Securities Act,
including without limitation, within the requirements of the exemption provided
by Rule 144.

     

    4.2 Integration.  The
Company shall not sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that would be integrated with the offer or sale of the Securities for
purposes of the rules and regulations of the Trading Market such that it would
require shareholder approval prior to the closing of such other transaction
unless shareholder approval is obtained before the closing of such subsequent
transaction or that would otherwise require the registration of the Securities
under the Securities Act.

     

    
      
        
        

      

      
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    4.3 Securities Laws Disclosure;
Publicity.  The Company shall, by 9:00 a.m. (New York City
time) on the Trading Day immediately following the date hereof, issue a press
release disclosing the material terms of the transactions contemplated hereby,
and shall file a Current Report on Form 8-K including the Transaction Documents
as exhibits thereto.  From and after the issuance of such press
release, the Company shall have publicly disclosed all material, non-public
information delivered to any of the Purchasers by the Company, or any of its
officers, directors, employees or agents in connection with the transactions
contemplated by the Transaction Documents.  The Company and each
Purchaser shall consult with each other in issuing any other press releases with
respect to the transactions contemplated hereby, and neither the Company nor any
Purchaser shall issue any such press release nor otherwise make any such public
statement without the prior consent of the Company, with respect to any press
release of any Purchaser, or without the prior consent of each Purchaser, with
respect to any press release of the Company, which consent shall not
unreasonably be withheld or delayed, except if such disclosure is required by
law, in which case the disclosing party shall promptly provide the other party
with prior notice of such public statement or
communication.  Notwithstanding the foregoing, the Company shall not
publicly disclose the name of any Purchaser, or include the name of any
Purchaser in any filing with the Commission or any regulatory agency or Trading
Market, without the prior written consent of such Purchaser, except (a) as
required by federal securities law in connection with the filing of final
Transaction Documents (including signature pages thereto) with the Commission
and (b) to the extent such disclosure is required by law or Trading Market
regulations, in which case the Company shall provide the Purchasers with prior
notice of such disclosure permitted under this clause (b).

     

    4.4 Shareholder Rights
Plan.  No claim will be made or enforced by the Company or,
with the consent of the Company, any other Person, that any Purchaser is an
“Acquiring Person” under any control share acquisition, business combination,
poison pill (including any distribution under a rights agreement) or similar
anti-takeover plan or arrangement in effect or hereafter adopted by the Company,
or that any Purchaser could be deemed to trigger the provisions of any such plan
or arrangement, by virtue of receiving Securities under the Transaction
Documents or under any other agreement between the Company and the
Purchasers.

     

    4.5 Non-Public
Information.  Except with respect to the material terms and
conditions of the transactions contemplated by the Transaction Documents, the
Company covenants and agrees that neither it, nor any other Person acting on its
behalf, will provide any Purchaser or its agents or counsel with any information
that the Company believes constitutes material non-public information, unless
prior thereto such Purchaser shall have executed a written agreement with the
Company regarding the confidentiality and use of such
information.  The Company understands and confirms that each Purchaser
shall be relying on the foregoing covenant in effecting transactions in
securities of the Company.

     

    4.6 Use of
Proceeds.  The Company shall use the net proceeds from the sale
of the Securities hereunder for general corporate purposes.

     

    
      
        
        

      

      
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    4.7 Indemnification of
Purchasers.  Subject to the provisions of this Section 4.7, the
Company will indemnify and hold each Purchaser and its directors, officers,
shareholders, members, partners, employees and agents (and any other Persons
with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title), each Person who
controls such Purchaser (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title) of such controlling persons (each, a
“Purchaser
Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any such Purchaser Party may suffer or incur as a
result of or relating to any untrue statement or alleged untrue statement of any
material fact contained in the SEC Documents, or arise out of or are based upon
the omission or alleged omission to state in the SEC Documents of a material
fact required to be stated therein or necessary to make the statements therein
not misleading.  If any action shall be brought against any Purchaser
Party in respect of which indemnity may be sought pursuant to this Agreement,
such Purchaser Party shall promptly notify the Company in writing, and the
Company shall have the right to assume the defense thereof with counsel of its
own choosing reasonably acceptable to the Purchaser Party.  Any
Purchaser Party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Purchaser Party except to the extent
that (i) the employment thereof has been specifically authorized by the Company
in writing, (ii) the Company has failed after a reasonable period of time to
assume such defense and to employ counsel or (iii) in such action there is, in
the reasonable opinion of counsel, a material conflict on any material issue
between the position of the Company and the position of such Purchaser Party, in
which case the Company shall be responsible for the reasonable fees and expenses
of no more than one such separate counsel.  The Company will not be
liable to any Purchaser Party under this Agreement (y) for any settlement by a
Purchaser Party effected without the Company’s prior written consent, which
shall not be unreasonably withheld or delayed; or (z) to the extent, but only to
the extent that a loss, claim, damage or liability is attributable to any
Purchaser Party’s breach of any of the representations, warranties, covenants or
agreements made by such Purchaser Party in this Agreement or in the other
Transaction Documents.

     

    4.8 Reservation of Common
Stock. As of the date hereof, the Company has reserved and the Company
shall continue to reserve and keep available at all times, free of preemptive
rights, a sufficient number of shares of Common Stock for the purpose of
enabling the Company to issue Shares pursuant to this Agreement.

     

    4.9 Listing of Common
Stock. The Company hereby agrees to use best efforts to maintain the
listing of the Common Stock on the Trading Market, and the Company shall
promptly apply to list all of the Shares on the Trading Market and promptly
secure the listing of all of the Shares on the Trading Market.

     

    
      
        
        

      

      
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    ARTICLE
V.

     

    MISCELLANEOUS

     

    5.1 Fees and
Expenses.  Except as expressly set forth in the Transaction
Documents to the contrary, each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement.  The Company shall pay all
Transfer Agent fees, stamp taxes and other taxes and duties levied in connection
with the delivery of any Securities to the Purchasers.

     

    5.2 Entire
Agreement.  The Transaction Documents, together with the
exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and
schedules.

     

    5.3 Notices.  Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of: (a) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth on
the signature pages attached hereto prior to 5:30 p.m. (New York City time) on a
Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number set
forth on the signature pages attached hereto on a day that is not a Trading Day
or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second
(2nd)
Trading Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service or (d) upon actual receipt by the party to whom such
notice is required to be given.  The address for such notices and
communications shall be as set forth on the signature pages attached
hereto.

     

    5.4 Amendments;
Waivers.  No provision of this Agreement may be waived,
modified, supplemented or amended except in a written instrument signed, in the
case of an amendment, by the Company and the Purchasers holding at least 50% in
interest of the Shares then outstanding or, in the case of a waiver, by the
party against whom enforcement of any such waived provision is
sought.  No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any
other provision, condition or requirement hereof, nor shall any delay or
omission of any party to exercise any right hereunder in any manner impair the
exercise of any such right.

     

    5.5 Headings.  The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.

     

    5.6 Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted
assigns.  The Company may not assign this Agreement or any rights or
obligations hereunder without the prior written consent of each Purchaser (other
than by merger).  Any Purchaser may assign any or all of its rights
under this Agreement to any Person to whom such Purchaser assigns or transfers
any Securities, provided that such transferee agrees in writing to be bound,
with respect to the transferred Securities, by the provisions of the Transaction
Documents that apply to the “Purchasers.”

     

    
      
        
        

      

      
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    5.7 No Third-Party
Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person, except as otherwise set forth in Section 4.7.

     

    5.8 Governing
Law.  All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law
thereof.  Each party agrees that all legal proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders,
employees or agents) shall be commenced exclusively in the state and federal
courts sitting in the City of New York. Each party hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in the City
of New York, borough of Manhattan for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or
discussed herein (including with respect to the enforcement of any of the
Transaction Documents), 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
improper or is an inconvenient venue for such proceeding.  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
via registered or certified mail or overnight delivery (with evidence of
delivery) to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof.  Nothing contained herein shall
be deemed to limit in any way any right to serve process in any other manner
permitted by law.  If either party shall commence an action or
proceeding to enforce any provisions of the Transaction Documents, then, in
addition to the obligations of the Company under Section 4.7, the prevailing
party in such action or proceeding shall be reimbursed by the other party for
its reasonable attorneys’ fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or
proceeding.

     

    5.9 Survival.  The
representations and warranties contained herein shall survive the Closing and
the delivery of the Securities.

     

    5.10 Execution.  This
Agreement may be executed in two or more counterparts, all of which when taken
together 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, it being understood that both parties need not sign the same
counterpart.  In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof.

     

    
      
        
        

      

      
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    5.11 Severability.  If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

     

    5.12 Replacement of
Securities.  If any certificate or instrument evidencing any
Securities is mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon cancellation
thereof (in the case of mutilation), or in lieu of and substitution therefor, a
new certificate or instrument, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction.  The
applicant for a new certificate or instrument under such circumstances shall
also pay any reasonable third-party costs (including customary indemnity)
associated with the issuance of such replacement Securities.

     

    5.13 Remedies.  In
addition to being entitled to exercise all rights provided herein or granted by
law, including recovery of damages, each of the Purchasers and the Company will
be entitled to specific performance under the Transaction
Documents.  The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations contained in the Transaction Documents and hereby agree to waive and
not to assert in any action for specific performance of any such obligation the
defense that a remedy at law would be adequate.

     

    5.14 Payment Set
Aside.  To the extent that the Company makes a payment or
payments to any Purchaser pursuant to any Transaction Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver or any other person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.

     

    
      
        
        

      

      
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    5.15 Independent Nature of
Purchasers’ Obligations and Rights.  The obligations of each
Purchaser under any Transaction Document are several and not joint with the
obligations of any other Purchaser, and no Purchaser shall be responsible in any
way for the performance or non-performance of the obligations of any other
Purchaser under any Transaction Document.  Nothing contained herein or
in any other Transaction Document, and no action taken by any Purchaser pursuant
thereto, shall be deemed to constitute the Purchasers as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the
Transaction Documents.  Each Purchaser shall be entitled to
independently protect and enforce its rights including, without limitation, the
rights arising out of this Agreement or out of the other Transaction Documents,
and it shall not be necessary for any other Purchaser to be joined as an
additional party in any proceeding for such purpose.  Each Purchaser
has had the opportunity to be represented by its own separate legal counsel in
their review and negotiation of the Transaction Documents.

     

    5.16 Saturdays, Sundays,
Holidays, etc.  If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall not
be a Business Day, then such action may be taken or such right may be exercised
on the next succeeding Business Day.

     

    5.17 Construction. The
parties agree that each of them and/or their respective counsel has reviewed and
had an opportunity to revise the Transaction Documents and, therefore, the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of the Transaction Documents or any amendments hereto. In addition, each and
every reference to share prices and shares of Common Stock in any Transaction
Document shall be subject to adjustment for reverse and forward stock splits,
stock dividends, stock combinations and other similar transactions of the Common
Stock that occur after the date of this Agreement.

     

    5.18 WAIVER OF JURY
TRIAL.  IN ANY ACTION, SUIT, OR
PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE
PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY
APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY
WAIVES FOREVER TRIAL BY JURY.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

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

     

    
      	
              RECOVERY
      ENERGY, INC.

               

            	
              Address for Notice:

            
	
              By: /s/
      Jeffrey A. Beunier   

                   Jeffrey
      A. Beunier

                   Chief
      Executive Officer

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

            	
              1515
      Wynkoop Street

              Denver
      CO 80202

               

            
	 
      	 
      

    

    

    

    

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK SIGNATURE
PAGE FOR PURCHASER FOLLOWS]

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    [PURCHASER
SIGNATURE PAGES TO SPPI SECURITIES PURCHASE AGREEMENT]

    

    IN
WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement
to be duly executed by their respective authorized signatories as of the date
first indicated above.

     

    Name of
Purchaser: ________________________________________________________

    Signature of Authorized Signatory of
Purchaser: _________________________________

    Name of
Authorized Signatory:
_______________________________________________

    Title of
Authorized Signatory:
________________________________________________

    Email
Address of Authorized
Signatory:_________________________________________

    Facsimile
Number of Authorized Signatory:
______________________________________

    Address
for Notice of
Purchaser: ______________________________________________

    

    

    

    Address
for Delivery of Securities for Purchaser (if not same as address for
notice):

    

    

    

    

    

    Subscription
Amount: $_________________

    

    Shares:
_________________

    

    EIN
Number:  [PROVIDE
THIS UNDER SEPARATE COVER]

    

    

    [SIGNATURE
PAGES CONTINUE]

    

     

     

    22f8k111609ex10ii_recovery.htm

    
      Exhibit
10.2

       

      New
Century Capital Partners, Inc.

      

      1999
Avenue of the Stars, Suite 1100

      Los
Angeles, CA 90067

      (310)
356-4641 Tel

      (310)
451-9092 Fax

    PERSONAL
& CONFIDENTIAL

    

    November
16, 2009

    

    Mr.
Jeffrey Beunier

    President
and Chief Executive Officer

    Recovery
Energy, Inc.

    Denver,
CO 80220

    

    Dear
Jeffrey:

    

    New Century Capital Partners, Inc.
(“NCCP”) is
pleased to act as the exclusive financial advisor to Recovery Energy, Inc.
(together with its subsidiaries and affiliates, the “Company”) during the term (the
“Term”, as hereinafter
defined), of this letter agreement (“Agreement”) solely with
respect to (i) identifying an investment banking firm or firms (“IBF”) to
underwrite (or placed privately) the sale of up to $25 million of equity,
equity-linked securities, convertible securities, preferred stock, debt, or in
any other form as directed and approved by the Company (the “Transaction”) to investors
(the “Investors”) on a
best-efforts basis and (ii) assisting the Company in any other way to complete
the Transaction, including advising on the type and size of security, and the
terms of the Transaction.

     

    The
Company shall cooperate fully with NCCP in connection with the identification of
potential investment banking firms relating to the Transaction. The Company
agrees that it is critical to the Transaction that the Company’s financial data
and legal records be in good working condition – such as would be expected by
investment banks, and institutional or retail investors.

     

    This
Agreement shall commence upon the date of execution of this Agreement by the
Company (the “Effective
Date”) and expire twelve (12) months after the Effective Date of this
Agreement (the “Term”),
unless the Agreement is terminated at an earlier date as provided
below.  In addition, for purposes of this Agreement, the tail (the
“Tail”) shall mean the
twelve (12) months after the termination of the Agreement.

     

    
      	
              1.  

            	
              The
      Transaction

            

    

     

    In
connection with our engagement, we propose to undertake certain services on your
behalf, including to the extent you may request:

     

    
      	
              (i)  

            	
              Advise
      the Company with regard to various financing strategies and alternatives.
      This may initially include assisting in the composition of a summary
      document which would be circulated to potential strategic investors
      selected by the IBF and approved by the
Company;

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      Engagement
Agreement

      Recovery
Energy, Inc.

      Page  of 2
of 7

    

     

    
      	
              (ii)  

            	
              Advise
      the management of the Company with regard to the investors
      identified  by the IBF;

            

    

    

    
      	
              (iii)  

            	
              Review
      with and advise the management of the Company with regard to the structure
      of a comprehensive financial package negotiated by the IBF;
      and

            

    

    

    
      	
              (iv)  

            	
              Assist
      the Company in respect to the raising of capital in the form of equity,
      equity-linked securities, preferred stock, debt, or in any other form as
      directed and approved by the Company in the
  Transaction.

            

    

    

    
      	
              2.  

            	
              Fees and
      Expenses

            

    

     

    As
compensation for the services to be provided by NCCP hereunder, the Company
agrees to pay to NCCP:

     

    
      	
              (i)  

            	
              Non-Refundable
      Engagement Fee.  A non-refundable cash engagement fee of $25,000
      (the “Engagement
      Fee”) to be paid upon signing of the Agreement which will be
      credited against any Financial Advisory
Fee;

            

    

    

    
      	
              (ii)  

            	
              Financial
      Advisory Fee.  Upon the consummation of the Transaction, the
      Company shall pay NCCP a financial advisory fee in cash (the “Financial Advisory Fee or
      Advisory Fee”) of twenty percent (20%) of the total amount earned
      by the underwriting IBF, including any cash payments and
      warrants;

            

    

    

    
      	
              (iii)  

            	
              Finder’s
      Fee: NCCP will be entitled to receive as a Finder’s Fee (“Finder’s Fee”)
      in cash equal to 5% of the gross proceeds and in warrants equal to 5% of
      the gross proceeds received by the Company from investors introduced by
      NCCP such as Yorkville and Cohen & Company, if such company
      participates in the capital raise. Such Finder’s Fee will be separate and
      apart from any Advisory Fee received by NCCP under this
      agreement;

            

    

    

    
      	
              (iv)  

            	
              Warrants.  The
      warrants issued to NCCP pursuant to clause (ii) (the "Warrants") shall be
      the equivalent of twenty percent (20%) of the warrants issued to the IBF
      with respect to the Transaction and shall have the same terms and
      conditions, including exercise price and term of the warrants, as the
      warrants issued to the
  IBF.    

            

    

    

    
      	
              (v)  

            	
              The
      Company agrees to reimburse NCCP by wire transfer on the first business
      day of each month for all reasonable and documented out-of-pocket expenses
      (including, third-party databases and research, communication and document
      production expenses, the fees of counsel, and all travel related expenses)
      incurred by NCCP pursuant to its engagement hereunder and submitted to the
      Company in the preceeding month, whether or not a Transaction is
      consummated and independent of any Advisory
Fee.

            

    

    

    The
Company also agrees to indemnify NCCP and certain other entities and persons as
set forth in Schedule I
attached hereto, which obligation shall survive the termination or expiration of
this Agreement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      Engagement
Agreement

      Recovery
Energy, Inc.

      Page  of 3
of 7

    

     

    
      	
              3.  

            	
              Information to be
      Supplied

            

    

     

    The
Company shall make available to NCCP all financial and other information
requested by it for the purpose of its assignment hereunder.  In
performing its services hereunder, NCCP shall be entitled to rely upon and
assume, without independent verification, the accuracy and completeness of all
information that has been furnished to it by, or on behalf of, the Company or
otherwise reviewed by it and shall have no obligation to verify the accuracy or
completeness of any such information or to conduct any appraisal of any
assets.

     

    Any
financial advice rendered by NCCP pursuant to this Agreement, written or oral,
will be solely for the information of the Company and may not be disclosed
publicly in any manner without NCCP's prior written approval and will be treated
by the Company as confidential.

     

    
      	
              4.  

            	
              Announcement of
      Transaction

            

    

     

    When a
Transaction is completed, and subject to compliance with applicable securities
laws, NCCP may, at its option and expense, place announcements and
advertisements or otherwise publicize the Transaction and NCCP’s role in it
(which may include the reproduction of the Company’s logo and a hyperlink to the
Company’s web site) on NCCP’s Internet web site and in such newspapers and
periodicals as it may choose stating that NCCP has acted as the financial
advisor to the Company with respect to the Transaction subject to the review and
consent of the of the content by the Company.  When the Company is
going to issue a press release disclosing the Transaction, NCCP has the right to
review the press release and description of NCCP’s role in the
Transaction.

     

    
      	
              5.  

            	
              Termination

            

    

     

    This
Agreement may be terminated by the Company, or by NCCP, with or without cause,
at any time upon giving written notice to the effect to that other
party.  For purposes of this Agreement, the term “with cause” shall
mean gross negligence, bad faith or willful misconduct by NCCP.  No
such termination, whether with or without cause, will affect: (i) NCCP’s right
to receive reimbursement for any out-of-pocket expenses incurred prior to the
date of termination; (ii) the Company’s obligation to pay NCCP any Engagement
Fee, Advisory Fee or termination fee that accrued prior to such termination; or
(iii) the Company’s obligation to indemnify NCCP or any other Indemnified Person
(as defined in Schedule I attached hereto) pursuant to the manner set forth in
this Agreement.

     

    
      	
              6.  

            	
              Dispute Resolution

            

    

     

    Any
controversy arising out of or concerning this Agreement shall be determined by
arbitration upon the initiation of either party, and the parties hereto hereby
agree to submit to such arbitration.  Such controversies shall be
settled and conclusively resolved by a single, mutually-acceptable arbitrator
who shall be an attorney experienced in corporate finance matters.  In
the event the parties are unable to agree upon an arbitrator, the arbitrator
shall be selected by the Director of Arbitration for the Financial Industry
Regulatory Authority.  The arbitration shall be conducted in Los
Angeles, California and the written decision of the arbitrator shall be final
and binding on the parties and enforceable in any court of competent
jurisdiction.  In the event the dispute or controversy between the
parties concerns the determination or calculation of any fees or compensation
payable to NCCP hereunder, NCCP and the Company agree that the amounts in
dispute shall be placed in an escrow account upon the consummation of the
Transaction (with any amounts not in dispute being paid to NCCP at such time as
determined in accordance with section 2, “Fees and Expenses”, above) pending the
outcome of the arbitration.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      Engagement
Agreement

      Recovery
Energy, Inc.

      Page  of 4
of 7

    

     

    
      	
              7.  

            	
              Miscellaneous

            

    

     

    It is
understood that if the Company completes a transaction in lieu of any
Transaction (for example, a strategic partnership agreement) for which NCCP is
entitled to compensation pursuant to this Agreement, NCCP and the Company will
negotiate in good faith appropriate compensation for NCCP in an amount to be
mutually agreed upon taking into account, among other things, the results
obtained and the custom and practice among investment bankers acting in similar
transactions.

     

    The
Company acknowledges that NCCP has been retained solely to provide the services
set forth herein, shall have no obligations except as expressly set forth
herein, shall owe such obligations as are expressly set forth herein solely to
the Company, shall be acting as an independent contractor, and shall not be
deemed to have a fiduciary or agency relationship with the Company or any of its
subsidiaries.

    

    NCCP is
not experts on, and cannot render opinions regarding legal, accounting,
regulatory or tax matters. The Company acknowledges that it is not relying on
the advice of NCCP for legal, accounting, regulatory or tax matters and will
rely on the advice of its own professionals and advisors for such matters and it
will make an independent analysis and decision regarding each Transaction based
on such advice.

    

    No
waiver, amendment or other modification of this Agreement shall be effective
unless in writing and signed by each party to be bound thereby.  This
Agreement shall inure to the benefit of and be binding on the Company, NCCP and
their respective successors.  Neither party may sell, assign,
transfer, or otherwise convey any of its rights or delegate any of its duties
under this Agreement without the prior written consent of the other, except to
an entity which has succeeded to substantially all the business and assets of
the assignor or to an entity surviving a merger or consolidation to which the
party to this Agreement is a party.  Any attempted sale, assignment,
transfer, conveyance, delegation or pursuit in violation of this paragraph shall
be void.

    

    This
Agreement sets forth the entire understanding of NCCP and the Company relating
to the subject matter hereof and supersedes and cancels any prior
communications, understandings and agreements between the parties relating to
the subject matter hereof.

    

    In case
any provision of this Agreement shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions of this
Agreement shall not in any way be affected or impaired thereby.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      Engagement
Agreement

      Recovery
Energy, Inc.

      Page  of 5
of 7

    

     

    It is
also understood that the Company’s obligations hereunder shall survive any
change in control or ownership of the Company.

     

    If the
foregoing correctly sets forth the agreement between the Company and NCCP please
sign and return the enclosed copy of this Agreement, whereupon it shall become
our binding agreement to be governed and construed pursuant to the laws of the
State of California.

     

    Very
truly yours,

     

    NEW
CENTURY CAPITAL PARTNERS, INC.

     

    
      	
              By:

            	
                               /s/
      Mark Salter

            
	 
      	
              Mark
      Salter

            
	 
      	
              Managing
      Director

            

    

    Accepted
as of the date first written above:

    

    RECOVERY
ENERGY, INC.

     

    
      	
              By:

            	
                     /s/
      Jeffrey Beunier

            
	 
      	
              Jeffrey
      Beunier

            
	 
      	
              President
      and Chief Executive Officer

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      Engagement
Agreement

      Recovery
Energy, Inc.

      Page  of 6
of 7

    

     

    SCHEDULE
I

     

    The
Company agrees that it will indemnify and hold harmless NCCP and their
affiliates, and their respective directors, officers, employees, agents,
representatives and controlling persons (NCCP and each such entity or person
being an “Indemnified
Party”) from and against any and all losses, claims, damages and
liabilities, joint or several, as incurred, to which such Indemnified Party may
become subject, and related to or arising out of activities performed by or on
behalf of an Indemnified Party pursuant to this Agreement, the Transactions
contemplated thereby or NCCP’s role in connection therewith; provided that the
Company will not be liable to the extent that any loss, claim, damage or
liability is found in a final judgment by a court of competent jurisdiction to
have resulted from actions taken or omitted to be taken by NCCP in bad faith or
from NCCP's gross negligence or willful misconduct in performing the services
described above. The Company also agrees to reimburse any Indemnified Party for
all expenses (including counsel fees and disbursements) as they are incurred in
connection with the investigation of, preparation for or defense of any pending
or threatened claim, or any action, investigation, suit or proceeding arising
therefrom, whether or not such Indemnified Party is a party and whether or not
such claim, action or proceeding is initiated or brought by or on behalf of the
Company. The Company also agrees that no Indemnified Party shall have any
liability (whether direct or indirect, in contract or tort or otherwise) to the
Company or its security holders or creditors related to or arising out of the
engagement of NCCP pursuant to, or the performance by NCCP of the services
contemplated by, this Agreement except to the extent that any loss, claim,
damage or liability is found in a final judgment by a court or competent
jurisdiction to have resulted from actions taken or omitted to be taken by NCCP
in bad faith or from NCCP's gross negligence or willful misconduct.

     

    If the
indemnification provided for in this Agreement is for any reason held
unenforceable, the Company agrees to contribute to the losses, claims, damages
and liabilities, as incurred by any Indemnified Person, for which such
indemnification is held unenforceable in such proportion as is appropriate to
reflect the relative benefits to the Company, on the one hand, and NCCP, on the
other hand, of the Transaction (whether or not the Transaction is
consummated).  The Company agrees that for the purposes of this
paragraph the relative benefits to the Company, NCCP of the Transaction shall be
deemed to be in the same proportion that the total value of the Transaction or
contemplated Transaction by the Company as a result of or in connection with the
proposed Transaction bears to the Advisory Fee paid or Finder’s Fee to be paid
to NCCP under this Agreement; provided that, to the extent
permitted by applicable law, in no event shall the Indemnified Parties be
required to contribute an aggregate amount in excess of the aggregate fees
actually paid to NCCP under this Agreement.

     

    Promptly
after receipt by an Indemnified Party of notice of any claim or the commencement
of any action, suit or proceeding with respect to which an Indemnified Party may
be entitled to indemnity hereunder, the Indemnified Parties will notify the
Company in writing of such claim or of the commencement of such action or
proceeding, and the Company will assume the defense
of such action, suit or proceeding and will employ counsel satisfactory to the
Indemnified Parties and will pay the fees and disbursements of such counsel, as
incurred.  Notwithstanding the preceding sentence, any Indemnified
Party will be entitled to employ counsel separate from counsel for the Company
and from any other party in such action if such Indemnified Party reasonably
determines that a conflict of interest exists which makes representation by
counsel chosen by the Company not advisable or if such Indemnified Party
reasonably determines that the Company’s assumption of the defense does not
adequately represent its interest.  In such event, the fees and
disbursements of such separate counsel will be paid by the Company, but in no
event shall the Company be liable for the fees and disbursements of more than
one counsel (in addition to local counsel) for all Indemnified Parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or
circumstances.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      Engagement
Agreement

      Recovery
Energy, Inc.

      Page  of
7 of 7

    

    The
Company agrees that, without NCCP’s prior written consent, it will not settle,
compromise or consent to the entry of any judgment in any pending or threatened
claim, action or proceeding in respect of which indemnification could be sought
under the indemnification provision of this Agreement (whether or not NCCP or
any other Indemnified Party is an actual or potential party to such claim,
action or proceeding), unless such settlement, compromise or consent includes an
unconditional release of each Indemnified Party from all liability arising out
of such claim, action or proceeding. NCCP agrees that, without the Company’s
prior written consent, it will not settle, compromise or consent to the entry of
any judgment in any pending or threatened claim, action or proceeding in respect
of which indemnification could be sought under the indemnification provision of
this Agreement (whether or not the Company is an actual or potential party to
such claim, action or proceeding), unless such settlement, compromise or consent
includes an unconditional release of each Indemnified Party from all liability
arising out of such claim, action or proceeding.

     

    In the
event any Indemnified Party is requested or required to appear as a witness in
any action, suit or proceeding brought by or on behalf of or against the Company
or any affiliate or any participant in a Transaction covered hereby in which
such Indemnified Party is not named as a defendant, the Company agrees to
reimburse NCCP for all reasonable disbursements incurred by it in connection
with such Indemnified Party’s appearing and preparing to appear as a witness,
including, without limitation, the fees and disbursements of its legal counsel,
and to compensate NCCP in an amount to be mutually agreed upon.

     

    The
provisions of Schedule I shall be in addition to any liability which the Company
may otherwise have.  These provisions shall be governed by the law of
the State of California and shall be operative, in full force and in full effect
regardless of any termination or expiration of this agreement.

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