Document:

Unassociated Document

    COMMON
STOCK PURCHASE AGREEMENT

     

    This
Common Stock Purchase Agreement (this “Agreement”) is dated
as of December 22, 2010, by and between Searchlight Minerals Corp., a Nevada
corporation (the “Company”), and
Seaside 88, LP, a Florida limited partnership (such investor, including its
successors and assigns, “Seaside”).

     

    WHEREAS,
subject to the terms and conditions set forth in this Agreement, the Company
desires to issue and sell to Seaside, and Seaside desires to purchase from the
Company, up to 13,000,000 shares of Common Stock (as the same may be
proportionately adjusted in respect of any stock split, stock dividend,
combination, recapitalization or the like with respect to the Common Stock) on
the Closing Dates.

     

    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 Seaside 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 indicated 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 144.

     

    “Agreement” shall have
the meaning ascribed to such term in the introduction hereof, as the same may be
amended form time to time.

     

    “Closing” means the
Initial Closing and each Subsequent Closing.

     

    “Closing Dates” means
the Initial Closing Date and each Subsequent Closing Date.

     

    “Commission” means the
Securities and Exchange Commission.

     

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

     

    “Common Stock
Equivalents” means any securities of the Company or the Subsidiaries
which would entitle the holder thereof to acquire at any time Common Stock,
including without limitation, any debt, preferred stock, right, option, warrant
or other instrument that is at any time convertible into or exchangeable for, or
otherwise entitles the holder thereof to receive, Common Stock.

     

    “Company” shall have
the meaning ascribed to such term in the introduction hereof, including any
successor or assign thereof.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    “Company Counsel”
means Baker & Hostetler LLP, or other counsel (including in-house counsel of
the Company) reasonably acceptable to Seaside.

     

    “Disclosure Schedules”
means the disclosure schedules of the Company delivered concurrently herewith,
and as updated by the Company from time to time.

     

    “DTC” means the
Depository Trust Company.

     

    “DWAC” means DTC’s
Deposit Withdrawal Agent Commission system.

     

    “Exchange Act” means
the Securities Exchange Act of 1934, as amended.

     

    “Floor” shall mean
0.85 x $0.50 (as the same may be proportionately adjusted in respect of any
stock split, stock dividend, combination, recapitalization or the like with
respect to the Common Stock).

     

    “GAAP” shall have the
meaning ascribed to such term in Section 3.1(h).

     

    “Initial Closing”
means the closing of the purchase and sale of the Common Stock pursuant to
Section 2.1.

     

    “Initial Closing Date”
means December 23, 2010 or such later date when all of the Transaction Documents
required to be delivered and executed in connection with the Initial Closing
have been executed and delivered by the applicable parties thereto, and all
conditions precedent to (i) Seaside’s obligations to purchase the Shares and
(ii) the Company’s obligations to issue and deliver the Shares have been
satisfied or waived.

     

    “Intellectual
Property” shall have the meaning ascribed to such term in Section
3.1(q).

     

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

     

    “Material Adverse
Effect” means any condition, event, change or effect that would
reasonably be expected to have a material adverse effect on (i) the legality,
validity or enforceability of any Transaction Document, (ii) the results of
operations, assets, business, prospects or financial condition of the Company
and its Subsidiaries, taken as a whole, or (iii) the Company’s ability to
perform in any material respect on a timely basis its obligations under any
Transaction Document, but shall not mean or include any condition, event or
change which (1) is or results from events or occurrences relating to the
economy in general (including arising from terrorist attacks, acts of war or
civil unrest) or the Company’s industry in general and not specifically relating
to the Company or having a disproportionate impact on the Company, or (2)
results from the announcement of this Agreement or the transactions contemplated
hereby or by the other Transaction Documents.

     

    “New Agreement” shall
have the meaning ascribed to such term in Section 2.6(b).

    
      
         

      

      
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    “Per Share Purchase
Price” shall be an amount equal to the volume weighted average of actual
trading prices (measured in hundredths of cents) of the Common Stock on the
Trading Market for the ten (10) consecutive Trading Days immediately prior to a
Closing Date, as reported by Bloomberg Financial Markets, multiplied by
0.85.

     

    “Permits” shall have
the meaning ascribed to such term in Section 3.1(r).

     

    “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 investigation or partial proceeding, such as a deposition), whether commenced
or threatened.

     

    “Prospectus
Supplement” means the supplement or supplements to the base prospectus
contained in the Registration Statement to be filed in connection with the sale
to Seaside, and the resale by Seaside, of the Shares.

     

    “Registration
Statement” means the registration statement of the Company, Commission
File No. 333-169993, as the same may be amended from time to time, including any
related Rule 462(b) registration statement or amendment thereto, covering the
sale to Seaside, and the resale by Seaside, of the Shares.

     

    “Required Approvals”
shall have the meaning ascribed to such term in Section 3.1(e).

     

    “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.

     

    “Seaside” shall have
the meaning ascribed to such term in the introduction hereof, including any
successor or assign thereof.

     

    “Seaside Party” shall
have the meaning ascribed to such term in Section 4.6.

     

    “SEC Reports” shall
have the meaning ascribed to such term in Section 3.1(h).

     

    “Securities Act” means
the Securities Act of 1933, as amended.

     

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

     

    “Short Sales” shall
include, without limitation, all “short sales” as defined in Rule 200 of
Regulation SHO of the Exchange Act and all types of forward sales contracts,
options, puts, calls, swaps and similar arrangements (including on a total
return basis).

    
      
         

      

      
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    “Subsequent Closing”
means each closing of the purchase and sale of the Common Stock pursuant to
Section 2.2.

     

    “Subsequent Closing
Date” means the 15th of
every month (or, if such day is not a Trading Day, then the first day thereafter
that is a Trading Day) commencing January 15, 2011 and ending on or about
October 15, 2011, or such later dates when all conditions precedent to (i)
Seaside’s obligations to purchase the Shares and (ii) the Company’s obligations
to issue and deliver the Shares have been satisfied or waived, in each event
with respect to such Subsequent Closing, unless this Agreement is earlier
terminated pursuant to Section 5.1 herein or one or more Subsequent Closings are
rescheduled pursuant to Section 2.6 herein.

     

    “Subsidiary” shall
have the meaning ascribed to such term in Section 3.1(a).

     

    “Trading Day” means a
day on which the Common Stock is traded on a Trading Market.

     

    “Trading Market” means
whichever of the following markets or exchanges on which the Common Stock is
listed or quoted for trading on the date in question: the New York Stock
Exchange, the NYSE Alternext Exchange, the NYSE Amex, the Nasdaq Capital Market,
the Nasdaq Global Market, the Nasdaq Global Select Market or the
Over-The-Counter Bulletin Board (or any successors to any of the
foregoing).

     

    “Transaction
Documents” means this Agreement and any officer’s certificate executed
and delivered in connection with the transactions contemplated
hereunder.

     

    ARTICLE
II

    PURCHASE
AND SALE

     

    2.1           Initial
Closing.  On the Initial Closing Date, Seaside shall purchase
from the Company, and the Company shall issue and sell to Seaside, 3,000,000
Shares at the Per Share Purchase Price.  Upon satisfaction or waiver
of the conditions set forth in Sections 2.3, 2.4 and 2.5, the Initial Closing
shall occur on the Initial Closing Date electronically or at such physical
location as the parties shall mutually agree.

     

    2.2           Subsequent
Closings.  On each Subsequent Closing Date, Seaside shall
purchase from the Company, and the Company shall issue and sell to Seaside,
1,000,000 Shares (as the same may be proportionately adjusted in respect of any
stock split, stock dividend, combination, recapitalization or the like with
respect to the Common Stock) at the Per Share Purchase Price.  Upon
satisfaction or waiver of the conditions set forth in Sections 2.3, 2.4, 2.5 and
2.6, each Subsequent Closing shall occur on the applicable Subsequent Closing
Date electronically or at such physical location as the parties shall mutually
agree.

     

    2.3           Deliveries by the
Company.  On each Closing Date, the Company shall deliver or
cause to be delivered to Seaside the following:

    
      
         

      

      
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    (a)        the
applicable number of Shares being purchased at such Closing (as the same may be
proportionately adjusted in respect of any stock split, stock dividend,
combination, recapitalization or the like with respect to the Common Stock),
registered in the name of Seaside, via the DTC DWAC system, as specified on the
signature pages hereto, provided, however that in the
event the Company shall not be able or eligible to deliver such Shares via the
DTC DWAC system, the Company shall deliver one or more certificates representing
such Shares by U.S. nationally recognized overnight courier service for delivery
the next Trading Day immediately following the applicable Closing
Date;

     

    (b)       an
officer’s certificate of the Company’s Chief Executive Officer or Chief
Financial Officer in the form of Exhibit A attached
hereto; and

     

    (c)       solely
on the Initial Closing Date, a legal opinion of Company Counsel, substantially
in the form of Exhibit
B attached hereto.

     

    2.4          Deliveries by
Seaside.  On each Closing Date, Seaside shall deliver or cause
to be delivered to the Company an amount equal to the Per Share Purchase Price
for each such Closing multiplied by the applicable number of Shares being
purchased at such Closing (as the same may be proportionately adjusted in
respect of any stock split, stock dividend, combination, recapitalization or the
like with respect to the Common Stock), in each case by wire transfer of
immediately available funds to the account as specified in writing by the
Company, and in each case less the amount due Seaside for reimbursement of its
expenses pursuant to Section 5.2 hereof.

     

    2.5          Closing
Conditions.

     

    (a)      
   The obligations of the Company hereunder in connection with
each Closing are subject to the satisfaction by Seaside, or waiver by the
Company, of the following conditions:

     

    (i)           the
accuracy on the Closing Date of the representations and warranties of Seaside
contained herein;

     

    (ii)          the
performance or satisfaction by Seaside of all obligations, covenants and
agreements required to be performed by Seaside at or prior to the Closing
Date;

     

    (iii)         the
delivery by Seaside of the items set forth in Section 2.4 of this Agreement;
and

     

    (iv)        with
respect to any Subsequent Closing, the Per Share Purchase Price shall equal or
exceed the Floor, as set forth in Section 2.6(a) of this Agreement;
and

     

    (v)         the
Registration Statement shall have been declared effective by the Commission and
shall be in full force and effect.

     

    (b)  
      The obligations of Seaside hereunder in
connection with each Closing are subject to the satisfaction by the Company, or
waiver by Seaside, of the following conditions:

     

    (i)           the
accuracy on the Closing Date of the representations and warranties of the
Company contained herein (as qualified and limited by the Disclosure Schedules,
as updated through such Closing Date);

     

    
      
         

      

      
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    (ii)          the
performance or satisfaction by the Company of all obligations, covenants and
agreements required to be performed by the Company at or prior to the Closing
Date, including obtaining all Required Approvals;

     

    (iii)         the
delivery by the Company of the items set forth in Section 2.3 of this
Agreement;

     

    (iv)         with
respect to any Subsequent Closing, the Per Share Purchase Price shall equal or
exceed the Floor, as set forth in Section 2.6(a) of this Agreement;

     

    (v)          there
shall have been no Material Adverse Effect with respect to the Company since the
date hereof that has not been cured by the Company;

     

    (vi)         the
Registration Statement shall have been declared effective by the Commission and
shall be in full force and effect;

     

    (vii)        the
purchase of Shares at a Subsequent Closing from the Company shall not cause
Seaside’s beneficial ownership of the Common Stock, calculated in accordance
with Rule 13d-3 promulgated by the Commission, to exceed 9.99% of the Company’s
outstanding Common Stock immediately after such Subsequent Closing;
and

     

    (viii)       from
the date hereof to each Closing Date, trading in the Common Stock shall not have
been suspended by the Commission and trading in securities generally as reported
by Bloomberg Financial Markets 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 any 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 Seaside, makes it impracticable or
inadvisable to purchase the Shares at the Closing.

     

    2.6          The Floor; Certain
Limitations; Continuation of Investment.

     

    (a)        In
the event that the Per Share Purchase Price does not equal or exceed the Floor,
as calculated with respect to any Subsequent Closing Date, then such Subsequent
Closing will not occur.  In such event, and subject to the proviso at
the end of this sentence, a Subsequent Closing that did not occur due to failure
to meet the Floor will be rescheduled to occur following the end of the
originally scheduled Closings under this Agreement, provided that only
two Subsequent Closings may be rescheduled pursuant to this Section
2.6(a).

     

    (b)        In
the event that the Registration Statement is not effective and in full force and
effect with respect to any Subsequent Closing Date scheduled to occur any time
on or prior to the date the Company determines its continuing eligibility to use
the Registration Statement or a Form S-3 registration statement generally, then
such Closing will not occur.  In each such event, there will be one
fewer Subsequent Closing pursuant to this Agreement and the aggregate number of
Shares to be purchased hereunder shall be reduced by 1,000,000 Shares (as the
same may be proportionately adjusted in respect of any stock split, stock
dividend, combination, recapitalization or the like with respect to the Common
Stock) for each such Subsequent Closing that does not occur because the
Registration Statement is not effective and in full force and effect on the
applicable Subsequent Closing Date.

    
      
         

      

      
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    (c)        In
the event that the Company is no longer eligible to use the Registration
Statement to effect the transactions contemplated hereby with Seaside or a Form
S-3 registration statement generally, then the parties agree that no further
Closings shall occur hereunder.  As soon as reasonably practicable
following such event, the parties shall execute and deliver the securities
purchase agreement substantially in the form attached hereto as Exhibit C (the “New Agreement”) and
consummate the transactions contemplated thereby, including the purchase and
sale of Shares thereunder.  The parties agree that the New Agreement
shall provide for the purchase and sale of that number of Shares remaining
unsold under this Agreement at the time Closings cease hereunder, as such number
may have been adjusted pursuant to this Section 2.6 or otherwise as provided in
this Agreement, and that the number of Subsequent Closings under the New
Agreement shall correspond to the number of Closings necessary to purchase such
unsold Shares.

     

    (d)        In
the event that the Company furnishes to Seaside a certificate signed by the
Chief Executive Officer or Chief Financial Officer of the Company stating that a
material development or potential material development involving the Company has
occurred which the Company would be obligated to disclose in the Prospectus
Supplement, which disclosure would, in the good faith judgment of the Chief
Executive Officer, Chief Financial Officer, General Counsel or the Board of
Directors of the Company, be premature or otherwise inadvisable at such time,
then such Subsequent Closing will not occur; provided, however, that the
Company will not be permitted to cancel a Subsequent Closing pursuant to this
Section 2.6(d) more than two times during the term of this
Agreement.  In the event that a Subsequent Closing is cancelled
pursuant to this Section 2.6(d), then an additional Subsequent Closing will be
added to the end of the schedule set forth in the definition of Subsequent
Closing Date as a replacement for the cancelled Subsequent Closing such that the
number of Closings pursuant to this Agreement will remain unchanged as a
consequence of the delivery of a certificate pursuant to this Section 2.6(d),
subject to the limitation set forth herein that only up to two Subsequent
Closings may be rescheduled pursuant to this Section 2.6(d).

     

    ARTICLE
III

    REPRESENTATIONS
AND WARRANTIES

     

    3.1          Representations and
Warranties of the Company.  Except as set forth under the
corresponding section of the Disclosure Schedules, which Disclosure Schedules
may be updated before any Closing and shall be deemed a part hereof, the Company
hereby makes the representations and warranties set forth below to Seaside as of
the date hereof and as of each Closing Date (provided that
representations and warranties that speak as of a specific date shall continue
to be true and correct as of such Closing with respect to such
date):

     

    (a)        Subsidiaries.  All
of the significant subsidiaries (as that term is defined in Rule 1-02 of
Regulation S-X promulgated by the Commission) of the Company are listed in the
Company’s most recent Annual Report on Form 10-K as modified by any subsequent
SEC Reports filed with the SEC (each a “Subsidiary”).  The
Company owns, directly or indirectly, all of the capital stock or other equity
interests of each Subsidiary free and clear of any Liens, and all the issued and
outstanding shares of capital stock of each Subsidiary are validly issued and
are fully paid, non-assessable and free of preemptive and similar rights to
subscribe for or purchase securities.  If the Company has no
subsidiaries, then references in the Transaction Documents to the Subsidiaries
will be disregarded.

    
      
         

      

      
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    (b)        Organization and
Qualification.  Each of the Company and the Subsidiaries is an
entity duly incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or organization
(as applicable), with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently
conducted.  Neither the Company nor any Subsidiary is in violation or
default of any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter
documents.  Each of the Company and the Subsidiaries 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 not
reasonably be expected to result in a Material Adverse Effect and, to the
knowledge of the Company, 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
thereunder.  The execution and delivery of each of the Transaction
Documents by the Company and the consummation by it of the transactions
contemplated thereby have been duly authorized by all necessary action on the
part of the Company and its stockholders, and no further action is required by
the Company or its stockholders in connection therewith other than in connection
with the Required Approvals.  Each Transaction Document has been (or
upon delivery will have been) duly executed by the Company and, when delivered
in accordance with the terms hereof, 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 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 of the
Transaction Documents by the Company, the issuance and sale of the Shares at
each Closing and the consummation by the Company of the other transactions
contemplated thereby do not and will not (i) conflict with or violate any
provision of the Company’s or any Subsidiary’s certificate or articles of
incorporation, bylaws or other organizational or charter documents, or (ii)
conflict with, violate or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or result in the creation
of any Lien upon any of the properties or assets of the Company or any
Subsidiary pursuant to, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of,
any agreement (written or oral), credit facility, debt or other instrument
(evidencing a Company or Subsidiary debt or otherwise) to which the Company or
any Subsidiary is a party or by which any property or asset of the Company or
any Subsidiary is bound or affected, or (iii) subject to the Required Approvals,
conflict with or result in a violation of (x) any law, rule or regulation to
which the Company or a Subsidiary is subject (including federal and state
securities laws and regulations), or by which any property or asset of the
Company or a Subsidiary is bound or affected, or (y) any order, judgment,
injunction, decree or other restriction of any court or governmental authority
that names the Company or a Subsidiary or to or by which, to the Company’s
knowledge, the Company or a Subsidiary or any property or asset thereof is bound
or affected, except in the case of each of clauses (ii) and (iii), such as would
not 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, approval 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, the Trading Market or other Person (including its
stockholders) in connection with the execution, delivery and performance by the
Company of the Transaction Documents, other than (i) the filing of the
Prospectus Supplement and (ii) any notice filings or SEC Reports as are required
to be made following each Closing Date under applicable federal and state
securities laws or under applicable rules and regulations of the Trading Market
(collectively, the “Required
Approvals”).

     

    (f)         Issuance of the
Shares.  The Shares are duly authorized and, when issued and
paid for in accordance with the Transaction Documents, will be duly and validly
issued, fully paid and nonassessable, free and clear of all
Liens.  The Company has reserved from its duly authorized capital
stock the maximum number of shares of Common Stock issuable pursuant to this
Agreement.  The issuance by the Company to Seaside, and the resale by
Seaside, of the Shares have been registered under the Securities Act and all of
the Shares when delivered will be freely transferable and tradable on the
Trading Market by Seaside without restriction (other than any restrictions
arising solely from an act or omission of Seaside).  The Registration
Statement is effective and available for the issuance and resale of the Shares
thereunder and the Company has not received any notice that the Commission has
issued or intends to issue a stop-order with respect to the Registration
Statement or that the Commission otherwise has suspended or withdrawn the
effectiveness of the Registration Statement, either temporarily or permanently,
or intends or has threatened in writing to do so.  The “Plan of
Distribution” section under the Registration Statement as supplemented by the
Prospectus Supplement permits the issuance and sale and resale of the
Shares.

    
      
         

      

      
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    (g)         Capitalization.  The
capitalization of the Company is as set forth in the Registration Statement as
of the dates set forth therein.  The Company has not issued any
capital stock since its most recently filed periodic report under the Exchange
Act, other than pursuant to the exercise of employee stock options under the
Company’s stock option plans, the issuance of shares of Common Stock to
employees pursuant to the Company’s employee stock purchase plans, the issuance
of shares of Common Stock or stock options to consultants pursuant to written
consulting agreements and pursuant to the conversion or exercise of outstanding
Common Stock Equivalents, and as otherwise set forth in the Disclosure
Schedules.  No Person has any right of first refusal, preemptive
right, right of participation, or any similar right to participate in the
transactions contemplated by the Transaction Documents.  Except as
disclosed in the SEC Reports or Section 3.1(g) of the
Disclosure Schedules, there are no outstanding options, warrants, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities, rights or obligations convertible into or exchangeable for, or
giving any Person any right to subscribe for or acquire, any shares of Common
Stock, or contracts, commitments, understandings or arrangements by which the
Company or any Subsidiary is or may become bound to issue additional shares of
Common Stock or Common Stock Equivalents.  Except as disclosed in the
SEC Reports or Section
3.1(g) of the Disclosure Schedules, the issue and sale of the Shares will
not obligate the Company to issue shares of Common Stock or other securities to
any Person (other than Seaside) and will not result in a right of any holder of
Company securities to adjust the exercise, conversion, exchange or reset price
under such securities.  All of the outstanding shares of capital stock
of the Company are validly issued, fully paid and nonassessable, have been
issued in material compliance with all federal and state securities laws and
requirements of the Trading Market, and none of such outstanding shares was
issued in violation of any preemptive rights or similar rights to subscribe for
or purchase securities.  No further approval or authorization of any
stockholder or the Board of Directors of the Company is required for the
issuance and sale of the Shares, other than the Required
Approvals.  Except as disclosed in the SEC Reports or Section 3.1(g) of the
Disclosure Schedules, there are no stockholders agreements, voting agreements or
other similar agreements with respect to the Company’s capital stock to which
the Company is a party or, to the knowledge of the Company, between or among any
of the Company’s stockholders.

     

    (h)         SEC Reports; Financial
Statements. The Company has filed or furnished all reports, schedules,
forms, statements and other documents required to be filed or furnished by it
under the Securities Act and the Exchange Act (including all required exhibits
thereto), including pursuant to Section 13(a) or 15(d) thereof (the foregoing
materials, as the same may be amended, and including the exhibits thereto and
documents incorporated by reference therein, being collectively referred to
herein as the “SEC
Reports”) for the 12 months preceding the date hereof (or such shorter
period as the Company was required by law to file such material), and any
notices, reports or other filings pursuant to applicable requirements of the
Trading Market, on a timely basis or has received a valid extension of such time
of filing, and has filed any such SEC Reports and notices, reports or other
filings pursuant to applicable requirements of the Trading Market prior to the
expiration of any such extension.  As of their respective dates, the
SEC Reports complied in all material respects with the applicable requirements
of the Securities Act and the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, 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 light of the circumstances under which they were made, not
misleading.  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
(i) 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 (ii) fairly present in all material respects the
financial position of the Company and its consolidated Subsidiaries 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,
year-end audit adjustments.

    
      
         

      

      
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    (i)         Material
Changes.  Since the date of the latest audited financial
statements included within the SEC Reports, except as specifically disclosed in
the SEC Reports (including in any interim financial statement filed in any SEC
Report following the filing of the Company’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2009), (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, except as has been reasonably cured by the Company,
(ii) the Company has not incurred any liabilities (contingent or otherwise)
other than (A) trade payables, accrued expenses and other liabilities 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 altered its method of accounting except as
otherwise required pursuant to GAAP, (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 and incentive plans or awards.

     

    (j)         Litigation.  Except
as disclosed in the SEC Reports, there is no Proceeding pending or, to the
knowledge of the Company, threatened against or affecting the Company, any
Subsidiary or any of their respective properties, officers or directors (in any
such officer’s or director’s capacity as such) before or by any court,
arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) which (i) adversely affects or
challenges the legality, validity or enforceability of any of the Transaction
Documents or the Shares or (ii) would, if there were an unfavorable decision,
ruling or finding, have or reasonably be expected to result in a Material
Adverse Effect.  Neither the Company nor any Subsidiary, nor, to the
knowledge of the Company, any director or officer thereof (in his or her
capacity as such), is or has been the subject of any Proceeding involving a
claim or violation of, or liability under, any 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 currently pending or contemplated, any
investigation by the Commission involving the Company, any Subsidiary or any
current or former director or officer of the Company or any Subsidiary (in his
or her capacity as such).  The Commission has not issued any stop
order or other order suspending the effectiveness of any registration statement
filed by the Company or any Subsidiary under the Exchange Act or the Securities
Act and, to the Company’s knowledge, no proceeding for such purpose is pending
before or threatened by the Commission.

     

    (k)        Compliance.  Neither
the Company nor any Subsidiary (i) is 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 reasonably be expected to result in a default by the Company
or any Subsidiary under), nor has the Company or any Subsidiary 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
order of any court, arbitrator or governmental body naming the Company or a
Subsidiary or of which the Company has knowledge, or (iii) is in violation of
any statute, rule or regulation of any governmental authority or the Trading
Market, including without limitation all foreign, federal, state and local laws
applicable to its business, except in each case as would not reasonably be
expected to have a Material Adverse Effect.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    (l)         Listing and Maintenance
Requirements.  The Company’s Common Stock is registered
pursuant to Section 12(g) of the Exchange Act, and the Company has taken no
action designed to, or which to its knowledge is likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act, nor has
the Company received any notification that the Commission is contemplating
terminating such registration.  The Company has not, in the 12 months
preceding the date hereof or any Closing Date, received notice from any Trading
Market on which the Common Stock is or has been listed or quoted (as applicable)
to the effect that the Company is not in compliance with the listing or
quotation (as applicable) and maintenance requirements of such Trading
Market.  The Company is, and immediately after the consummation of the
transactions contemplated hereby will be, in compliance with all such listing or
quotation (as applicable) and maintenance requirements.

     

    (m)       Application of Takeover
Protections.  The Company and its Board of Directors have taken
all necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the Company’s
certificate of incorporation (or similar charter documents) and the laws of its
state of incorporation that is or could become applicable to Seaside as a result
of Seaside and the Company fulfilling their obligations or exercising their
rights under the Transaction Documents, including without limitation the
Company’s issuance of the Shares and Seaside’s ownership of the Shares pursuant
to the terms of this Agreement (but excluding the acquisition of, or the right
to acquire, by Seaside the beneficial ownership of any other shares of the
Company’s Common Stock other than pursuant to the terms and conditions of this
Agreement).

     

    (n)        Effective Registration
Statement.  Except as disclosed in Section 3.1(n) of the
Disclosure Schedules, the Registration Statement has been declared effective by
the Commission and remains effective as of the date hereof and the Company knows
of no reason why the Registration Statement will not continue to remain
effective for the foreseeable future.  As of the date hereof, the
Company is eligible to use Form S-3 registration statements for the issuance of
securities.

     

    (o)        Acknowledgment Regarding
Seaside’s Purchase of Shares.  The Company acknowledges and
agrees that Seaside is acting solely in the capacity of an arm’s length
purchaser with respect to this Agreement and the other Transaction Documents and
the transactions contemplated hereby and thereby.  The Company further
acknowledges that Seaside is not acting as a financial advisor or fiduciary of
the Company (or in any similar capacity) with respect to this Agreement or the
other Transaction Documents and the transactions contemplated hereby and thereby
and any advice given by Seaside or any of its representatives or agents in
connection with this Agreement and the other Transaction Documents and the
transactions contemplated hereby and thereby is merely incidental to Seaside’s
purchase of the Shares.  The Company further represents to Seaside
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 and thereby by the Company and its
representatives.

    
      
         

      

      
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    (p)        Approvals.  The
issuance and listing or quotation (as applicable) on the Trading Market of the
Shares requires no further approvals, including but not limited to, the approval
of stockholders.

     

    (q)        Intellectual
Property.  The Company possesses such right, title and interest
in and to, or possesses legal rights to use, all patents, patent rights, trade
secrets, inventions, know-how, trademarks, trade names, copyrights, service
marks and other proprietary rights (“Intellectual
Property”) material to the conduct of the Company’s business except
Intellectual Property the failure of which to possess would not reasonably be
expected to have a Material Adverse Effect.  Except as disclosed in
the SEC Reports, the Company has not received any notice of infringement,
misappropriation or conflict from any third party as to Intellectual Property
owned by or exclusively licensed to the Company that has not been resolved or
disposed of, which infringement, misappropriation or conflict would, if the
subject of an unfavorable decision, ruling or finding, reasonably be expected to
have a Material Adverse Effect.  To the Company’s knowledge, it has
not infringed, misappropriated, or otherwise conflicted with the Intellectual
Property of any third parties, which infringement, misappropriation or conflict
would, if the subject of an unfavorable decision, ruling or finding, reasonably
be expected to have a Material Adverse Effect.

     

    (r)         Permits.  The
Company has made all filings, applications and submissions required by, and possesses all
approvals, licenses, certificates, certifications, clearances, consents,
exemptions, marks, notifications, orders, permits and other authorizations
issued by, the appropriate federal, state or foreign regulatory authorities
necessary to own or lease its properties and to conduct its businesses
(collectively, “Permits”), except for
such Permits the failure of which to possess or obtain would not reasonably be
expected to have a Material Adverse Effect.  The Company has not
received any written notice of proceedings relating to the limitation,
revocation, cancellation, suspension, modification or non-renewal of any such
Permit which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would reasonably be expected to have a Material
Adverse Effect, and has no reason to believe that any such Permit will not be
renewed in the ordinary course.

     

    (s)        Disclosure.  The
Company confirms that neither the Company nor any officer, director or employee
of the Company acting on its behalf (as such term is used in Regulation FD) has
provided Seaside or its agents or counsel with any information that constitutes
or might reasonably be expected to constitute material, non-public information
except insofar as the existence and terms of the proposed transactions hereunder
may constitute such information.  The Company understands and confirms
that Seaside will rely on the foregoing representations and covenants in
effecting transactions in securities of the Company.  None of the
representations and warranties of the Company contained herein, nor any
statement made by the Company in any disclosure, schedule, exhibit, certificate
or other document furnished or to be furnished to Seaside in connection
herewith, contains or will 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.

     

    3.2          Representations and
Warranties of Seaside.  Seaside hereby makes the
representations and warranties set forth below to the Company as of the date
hereof and as of each Closing Date (provided that
representations and warranties that speak as of a specific date shall continue
to be true and correct as of such Closing with respect to such
date):

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    (a)         Organization;
Authority.  Seaside is a limited partnership duly organized,
validly existing and in good standing under the laws of the state of Florida,
with full right, power and authority to own and use its properties and assets
and to carry on its business as currently conducted and to enter into and to
consummate the transactions contemplated by this Agreement and the other
Transaction Documents and otherwise to carry out its obligations hereunder and
thereunder.  The execution, delivery and performance by Seaside of the
transactions contemplated by this Agreement and each other Transaction Document
have been duly authorized by all necessary action on the part of Seaside and no
such further action is required.  Each Transaction Document to which
Seaside is a party has been (or upon delivery will have been) duly executed by
Seaside, and, when delivered by Seaside in accordance with the terms thereof,
will constitute the valid and legally binding obligation of Seaside, 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.

     

    (b)         Short
Sales.  Seaside has not directly or indirectly executed any
Short Sales or other hedging transactions in the securities of the
Company.

     

    (c)         No Brokers or
Finders.  No agent, broker, investment bank or firm is or will
be entitled to any broker’s or finder’s fee, or any commission or similar fee,
from Seaside in connection with any of the transactions contemplated by this
Agreement.

     

    (d)         Limited
Ownership.  The purchase by Seaside of the Shares issuable to
it at the Closings will not result in Seaside (individually or together with any
other Person with whom Seaside has identified, or will have identified, itself
as part of a “group” in a public filing made with the Commission involving the
Company’s securities) acquiring, or obtaining the right to acquire, beneficial
ownership of a number of shares of Common Stock equal to or in excess of 15% of
the outstanding shares of Common Stock or the voting power of the Company on a
post-transaction basis that assumes that all Closings contemplated by this
Agreement shall have occurred.

     

    ARTICLE
IV

    OTHER
AGREEMENTS OF THE PARTIES

     

    4.1          No Transfer
Restrictions.  Certificates evidencing the Shares shall not
contain any legend restricting their transferability by Seaside.  The
Company shall cause its counsel to issue a legal opinion to the Company’s
transfer agent if required by the Company’s transfer agent to effect a transfer
of any of the Shares; such opinion shall be provided by the Company’s counsel at
no expense to Seaside.

    
      
         

      

      
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    4.2          Securities Laws Disclosure;
Publicity.  The Company shall, by 9:00 a.m. Eastern time on the
Trading Day following the date hereof, file a Current Report on Form 8-K which
attaches as exhibits all agreements relating to this transaction, in each case
reasonably acceptable to Seaside and its counsel, if Seaside is readily
available to review such Form 8-K in a timely manner, disclosing the material
terms of the transactions contemplated hereby.

     

    4.3          Shareholders Rights
Plan.  No claim will be made or enforced by the Company or,
with the consent of the Company, any other Person that Seaside is an “Acquiring
Person” or similar designation under any shareholders rights plan or similar
plan or arrangement in effect or hereafter adopted by the Company, or that
Seaside could be deemed to trigger the provisions of any such plan or
arrangement, by virtue of receiving Shares under the Transaction Documents or
under any other agreement between the Company and Seaside, provided that this
Section 4.3 shall not be applicable if Seaside acquires beneficial ownership (or
the right to acquire beneficial ownership) of any other shares of the Company’s
Common Stock other than pursuant to the terms and conditions of this
Agreement.

     

    4.4          Investment Company
Status.  The Company shall conduct its business in a manner so
that it will not become subject to the Investment Company Act of 1940, as
amended.

     

    4.5          Non-Public
Information.  The Company covenants and agrees that neither it
nor any other Person acting on its behalf will provide Seaside or its agents or
counsel with any information that the Company believes constitutes material
non-public information.  The Company understands and confirms that
Seaside shall be relying on the foregoing representations in effecting
transactions in securities of the Company. Seaside covenants and agrees that it
shall not, and shall cause its counsel not to, knowingly request from the
Company or any person acting on the Company’s behalf any material non-public
information (other than any such information disclosed prior to the date of this
Agreement).

     

    4.6          Indemnification of
Seaside.  Subject to the provisions of this Section 4.6, the
Company will indemnify and hold Seaside, Seaside 88 Advisors, LLC, and their
respective directors, officers, stockholders, partners, members, employees,
agents and Affiliates (each, a “Seaside Party”)
harmless from any and all losses, liabilities, obligations, claims, demands,
contingencies, damages, costs and expenses, including all judgments, amounts
paid in settlements, court costs and reasonable attorneys’ fees and costs of
investigation reasonably incurred in connection with defending or investigating
any suit or action in respect thereof to which any Seaside Party is or
reasonably believes it may become a party under the Securities Act, the Exchange
Act or any other federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, liabilities, obligations, claims, demands,
contingencies, damages, costs and expenses arise out of or are based on (a) any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement or any Prospectus Supplement, or (b) the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, provided that the
Company will not be liable in any such case to the extent that any such
liability, obligation, claim, demand, contingency, damage, cost or expense
arises out of or is based upon any untrue statement or alleged untrue statement
or omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to the Company by and regarding Seaside
expressly for inclusion therein.  If any action shall be brought
against any Seaside Party in respect of which indemnity may be sought pursuant
to this Agreement, such Seaside 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.  Any Seaside 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 Seaside 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 such separate
counsel, a material conflict on any material issue between the position of the
Company and the position of such Seaside Party such that common representation
would be unethical or ineffective, 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 Seaside Party
under this Agreement (x) for any settlement by a Seaside Party effected without
the Company’s prior written consent, which consent shall not be unreasonably
withheld or delayed; or (y) to the extent, but only to the extent, that a loss,
liability, obligation, claim, demand, damage, cost or expense is attributable to
any Seaside Party’s breach of any of the representations, warranties, covenants
or agreements made by Seaside in this Agreement or in the other Transaction
Documents.

    
      
         

      

      
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    4.7          Listing or Quotation of
Common Stock.  The Company hereby agrees to use its best
efforts to maintain the listing or quotation (as applicable) of the Common Stock
on its current Trading Market and all other Trading Markets on which such Common
Stock may hereafter be listed or quoted (as applicable) and will comply in all
respects with the Company’s reporting, filing and other obligations under the
bylaws or rules of such Trading Market(s), provided that best
efforts shall not require the expenditure of time or money that is unreasonable
in light of the likelihood of success of the efforts.  The Company
further agrees that, if the Company applies to have the Common Stock traded on
any Trading Market other than its current Trading Market, it will include in
such application all of the Shares and will take such other action as is
reasonably necessary to cause all of the Shares to be listed on such other
Trading Market.

     

    4.8          Stockholder
Approval.  The Company shall not issue shares of Common Stock
or Common Stock Equivalents, if such issuance would require stockholder approval
pursuant to applicable rules of the Trading Market, unless and until such
stockholder approval is obtained.

     

    4.9          Short
Sales.  Seaside covenants that neither it nor any Person acting
on its behalf or pursuant to any understanding with it will execute any Short
Sales in the securities of the Company from the date hereof until the final
Subsequent Closing contemplated hereby.

     

    4.10       Prospectus
Supplement.  The Company will use its best efforts to file the
Prospectus Supplement in accordance with the requirements of Rule 424
promulgated under the Securities Act on or before the Initial Closing Date and,
if required, before each Subsequent Closing Date.

     

    ARTICLE
V

    MISCELLANEOUS

     

    5.1         Termination.  This
Agreement may be terminated:

     

    (a)        by
Seaside, immediately upon written notice to the Company, if the Initial Closing
has not been consummated on or before December 31, 2010, and

    
      
         

      

      
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    (b)        by
the Company at any time immediately upon written notice to Seaside,

     

    provided, however, that no such
termination pursuant to this Section 5.1 will affect the right of any party to
sue for any breach by the other party (or parties).  Notwithstanding
anything in this Section 5.1 to the contrary, the parties agree and acknowledge
that this Agreement shall terminate as contemplated by Section 2.6(b) herein in
the event the Company is no longer eligible to use the Registration
Statement.

     

    5.2         Fees and
Expenses.  Except as otherwise set forth in this Agreement and
as set forth in this Section 5.2 below, each party shall pay the fees and
expenses of its own 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 stamp and other taxes and duties
levied in connection with the delivery of the Shares.  Notwithstanding
the foregoing, at the Initial Closing the Company shall reimburse Seaside for
the fees and expenses of its counsel, White White & Van Etten PC, in an
amount equal to $25,000 and at each Subsequent Closing the Company shall
reimburse Seaside for the fees and expenses of its counsel, White White &
Van Etten PC, in an amount equal to $2,500.  Such legal fees may be
withheld by Seaside from the amount to be paid for the Shares purchased at the
Initial Closing and any Subsequent Closing.

     

    5.3         Entire
Agreement.  The Transaction Documents, together with the
exhibits and schedules thereto (including the Disclosure Schedules), 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.

     

    5.4         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 electronic mail or facsimile at the electronic
mail address or facsimile number set forth on the signature pages attached
hereto prior to 5:30 p.m. (Eastern time) on a Trading Day, (b) the next Trading
Day after the date of transmission, if such notice or communication is delivered
via electronic mail or facsimile at the electronic mail address or 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. (Eastern time) on any Trading Day, (c) the
second 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 or as otherwise provided by written notice delivered in compliance with
this Section 5.4 by the addressee to the other party.

     

    5.5          Amendments;
Waivers.  No provision of this Agreement may be waived or
amended except in a written instrument signed, in the case of an amendment, by
the Company and Seaside or, in the case of a waiver, by the party against whom
enforcement of any such waiver 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 either party to exercise any right hereunder in
any manner impair the exercise of any such right.

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

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

     

    5.7           Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted assigns. Neither party
may  assign this Agreement or any rights or obligations hereunder
without the prior written consent of the other party; provided that Seaside
may assign its rights and obligations under this Agreement to an Affiliate
without obtaining the Company’s prior written consent so long as the assignee
shall agree in writing to be bound by such obligations and provided that Seaside
shall in any event remain liable for the obligations of any such assignee under
this Agreement.

     

    5.8           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 4.6.

     

    5.9           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.  The parties hereby waive all rights to a trial by
jury.  If either party shall commence an action or proceeding to
enforce any provisions of the Transaction Documents, then 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.

     

    5.10         Survival.  The
representations and warranties herein shall survive the Closings and delivery of
the Shares for the applicable statute of limitations.

     

    5.11    
    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 or email transmission, 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 email signature
page were an original thereof.

     

    5.12   
     Severability.  If
any provision of this Agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and the
parties will attempt to agree upon a valid and enforceable provision that is a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.

    
      
         

      

      
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    5.13         Rescission and Withdrawal
Right.  Notwithstanding anything to the contrary contained in
(and without limiting any similar provisions of) the Transaction Documents,
whenever one party exercises a right, election, demand or option under a
Transaction Document and the other party does not timely perform its related
obligations within the periods therein provided, then the exercising party may
rescind or withdraw, in its sole discretion from time to time upon written
notice to the other party, any relevant notice, demand or election in whole or
in part without prejudice to its future actions and rights.

     

    5.14         Remedies.  In
addition to being entitled to exercise all rights provided herein or granted by
law, including recovery of damages, Seaside 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 the obligations set forth herein and hereby
agree to waive in any such action for specific performance of any such
obligation the defense that a remedy at law would be adequate.

     

    5.15         Payment Set
Aside.  To the extent that either party hereto makes a payment
or payments to the other party hereto pursuant to any Transaction Document or
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 other party, 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.

     

    5.16         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.

     

    (Signature
Pages Follow)

    
      
         

      

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

     

    
      
        
          
            
              	
                       Searchlight
      Minerals Corp.

                    	 
      	
                      Address for Notice:

                    
	 
      	 
      	 
      
	
                      By:

                    	
                      /s/ Martin B. Oring

                    	 
      	
                      2441
      West Horizon Ridge Parkway

                    
	 
      	
                      Name:  Martin
      B. Oring

                    	 
      	
                      Suite
      120

                    
	 
      	
                      Title:    President
      and Chief Executive Officer

                    	 
      	
                      Henderson,
      NV 89052

                    
	 
      	 
      	
                      Attention:  Carl
      S. Ager, Secretary

                    
	 
      	 
      	
                      Fax:
      (702) 939-5249

                    
	 
      	 
      	
                      Email:
      cager@searchlightminerals.com

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

                    	
                        

                    	
                      Baker
      & Hostetler LLP

                      12100
      Wilshire Boulevard

                      15th
      Floor

                      Los
      Angeles, CA 90025

                      Attention:
      Jeffrey P. Berg, Esq.

                      Fax:
      (310) 820-8859

                      Email:
      jberg@bakerlaw.com

                    
	 
      	 
      	 
      
	
                      Seaside
      88, LP

                    	 
      	
                      Address for Notice:

                    
	 
      	 
      	 
      
	
                      By:  Seaside
      88 Advisors, LLC

                    	 
      	 
      
	 
      	 
      	
                      750
      Ocean Royale Way

                    
	 
      	 
      	
                      Suite
      805

                    
	
                      By:

                    	
                      /s/ William J. Ritger

                    	 
      	
                      North
      Palm Beach, FL 33408

                    
	 
      	
                      Name:
      William J. Ritger

                    	 
      	
                      Attention:  William
      J. Ritger and

                    
	 
      	
                      Title:  Manager

                    	 
      	
                      Denis
      M. O’Donnell, M.D.

                    
	 
      	 
      	
                      Fax:  (866)
      358-6721

                    
	 
      	 
      	
                      Email:  wjr@seaside88.com

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

                    	
                        

                    	
                      White
      White & Van Etten PC

                    
	 
      	 
      	
                      55
      Cambridge Parkway

                    
	 
      	 
      	
                      Cambridge,
      MA 02142

                    
	 
      	 
      	
                      Attention:  David
      A. White, Esq.

                    
	 
      	 
      	
                      Fax:  (617)
      225-0205

                    
	 
      	 
      	
                      Email:  daw@wwvlaw.com

                    

            

          

        

      

    

    

    DWAC
Instructions for Common Stock (if applicable):

    

    DTC # -
0571 -  

    Account
number - G53-1348923

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    Exhibit
C

    SECURITIES
PURCHASE AGREEMENT

     

    This
Securities Purchase Agreement (this “Agreement”) is dated
as of _______________, 201__, between Searchlight Minerals Corp., a Nevada
corporation (the “Company”), and
Seaside 88, LP, a Florida limited partnership (such investor, including its
successors and assigns, the “Purchaser”).

     

    WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to
Section 4(2) of the Securities Act (as defined herein) and Rule 506 promulgated
thereunder, the Company desires to issue and sell to the Purchaser, and the
Purchaser 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 the 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:

     

    “Acquiring Person”
shall have the meaning ascribed to such term in Section 4.5.

     

    “Action” shall have
the meaning ascribed to such term in Section 3.1(j).

     

    “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.

     

    “Agreement” shall have
the meaning ascribed to such term in the introduction hereof, as the same may be
amended from time to time.

     

    “BHCA” shall have the
meaning ascribed to such term in Section 3.1(mm).

     

    “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
Initial Closing and each Subsequent Closing.

     

    “Closing Dates” means
the Initial Closing Date and each Subsequent Closing Date.

     

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

    
      
         

      

      
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    “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.

     

    “Common Stock
Equivalents” means any securities of the Company or the Subsidiaries
which would entitle the holder thereof to acquire at any time Common Stock,
including without limitation any debt, preferred stock, right, option, warrant
or other instrument that is at any time convertible into or exercisable or
exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.

     

    “Company” shall have
the meaning ascribed to such term in the introduction hereof, including any
successor or assign thereof.

     

    “Company Counsel”
means Baker & Hostetler LLP, or other counsel (including in-house counsel of
the Company) reasonably acceptable to the Purchaser.

     

    “Disclosure Schedules”
shall have the meaning ascribed to such term in Section 3.1.

     

    “Evaluation Date”
shall have the meaning ascribed to such term in Section 3.1(r).

     

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

    

    “Federal Reserve”
shall have the meaning ascribed to such term in Section 3.1(mm).

     

    “Floor” shall mean
0.85 x $0.50 (as the same may be proportionately adjusted in respect of any
stock split, stock dividend, combination, recapitalization or the like with
respect to the Common Stock).

     

    “GAAP” shall have the
meaning ascribed to such term in Section 3.1(h).

     

    “Indebtedness” shall
have the meaning ascribed to such term in Section 3.1(aa).

     

    “Initial Closing”
means the closing of the purchase and sale of the Common Stock pursuant to
Section 2.1.

     

    “Initial Closing Date”
means the date when all of the Transaction Documents and all other documents
required to be executed and delivered in connection with the Initial Closing
pursuant this Agreement have been executed and delivered by the applicable
parties thereto, and all conditions precedent to the Purchaser’s obligations to
purchase the Shares, and the Company’s obligations to issue and deliver the
Shares, have been satisfied or waived with respect to the Initial
Closing.

     

    “Intellectual Property
Rights” shall have the meaning ascribed to such term in Section
3.1(o).

    
      
         

      

      
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    “Legend Removal Date”
shall have the meaning ascribed to such term in Section 4.1(c).

     

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

     

    “Material Adverse
Effect” means any condition, event, change or effect that would
reasonably be expected to have a material adverse effect on (i) the legality,
validity or enforceability of any Transaction Document, (ii) the results of
operations, assets, business, prospects or financial condition of the Company
and its Subsidiaries, taken as a whole, or (iii) the Company’s ability to
perform in any material respect on a timely basis its obligations under any
Transaction Document, but shall not mean or include any condition, event or
change which (1) is or results from events or occurrences relating to the
economy in general (including arising from terrorist attacks, acts of war or
civil unrest) or the Company’s industry in general and not specifically relating
to the Company or having a disproportionate impact on the Company, or (2)
results from the announcement of this Agreement or the transactions contemplated
hereby or by the other Transaction Documents.

     

    “Material Permits”
shall have the meaning ascribed to such term in Section 3.1(m).

     

    “Money Laundering
Laws” shall have the meaning ascribed to such term in Section
3.1(nn).

     

    “OFAC” shall have the
meaning ascribed to such term in Section 3.1(kk).

     

    “Per Share Purchase
Price” shall be an amount equal to the volume weighted average of actual
trading prices (measured in hundredths of cents) of the Common Stock on the
Trading Market for the ten (10) consecutive Trading Days immediately prior to a
Closing Date, as reported by Bloomberg Financial Markets, multiplied by
0.70.

     

    “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.

     

    “Public Information
Failure” shall have the meaning ascribed to such term in Section
4.2(b).

     

    “Public Information Failure
Payments” shall have the meaning ascribed to such term in Section
4.2(b).

     

    “Purchaser” shall have
the meaning ascribed to such term in the introduction hereof, including any
successor or assign thereof.

     

    “Purchaser Party”
shall have the meaning ascribed to such term in Section 4.8.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    “Required Approvals”
shall have the meaning ascribed to such term in Section 3.1(e).

     

    “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.

     

    “Rule 424” means Rule
424 promulgated by the Commission pursuant to the Securities Act, as such rule
may be amended or interpreted from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
purpose and effect as such rule.

     

    “SEC Reports” shall
have the meaning ascribed to such term in Section 3.1(h).

     

    “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 the Purchaser pursuant to this
Agreement (as the same may be proportionately adjusted in respect of any stock
split, stock dividend, combination, recapitalization or the like with respect to
the Common Stock).

     

    “Short Sales” means
all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange
Act and all types of forward sales contracts, options, puts, calls, swaps and
similar arrangements (including on a total return basis).

     

    “Subscription Amount”
means the aggregate amount to be paid for Shares at a Closing by the Purchaser
in United States dollars and in immediately available funds.

     

    “Subsequent Closing”
means each closing of the purchase and sale of the Common Stock pursuant to
Section 2.2.

     

    “Subsequent Closing
Date” means the day that is one (1) month subsequent to the previous
Closing Date (or, if such day is not a Trading Day, then the first day
thereafter that is a Trading Day) commencing the month after the Initial Closing
Date and ending on or about the date that is approximately ____ months
subsequent to the Initial Closing Date, or, in each case, such later dates when
all conditions precedent to the Purchaser’s obligations to purchase the Shares,
and the Company’s obligations to issue and deliver the Shares, have been
satisfied or waived with respect to the Subsequent Closing, unless this
Agreement is earlier terminated pursuant to the terms hereof.

     

    “Subsidiary” shall
have the meaning ascribed to such term in Section 3.1(a).

     

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

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    “Trading Market” means
whichever of the following markets or exchanges on which the Common Stock is
listed or quoted for trading on the date in question: the New York Stock
Exchange, the NYSE Alternext Exchange, the NYSE Amex, the Nasdaq Capital Market,
the Nasdaq Global Market, the Nasdaq Global Select Market or the
Over-The-Counter Bulletin Board (or any successors to any of the
foregoing).

     

    “Transaction
Documents” means this Agreement and any officer’s certificate executed
and delivered in connection with the transactions contemplated
hereunder.

     

    “Transfer Agent” means
Empire Stock Transfer Inc., the current transfer agent of the Company, with a
mailing address of 1859 Whitney Mesa Drive, Henderson, Nevada 89014 and a
facsimile number of (702) 974-1444, and any successor transfer agent of the
Company.

     

    ARTICLE
II.

    PURCHASE
AND SALE

     

    2.1         Initial
Closing.  On the Initial 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 Purchaser agrees to purchase, 1,000,000 Shares (as the same may be
proportionately adjusted in respect of any stock split, stock dividend,
combination, recapitalization or the like with respect to the Common Stock) at the Per
Share Purchase Price.  The Purchaser shall deliver to the Company, via wire
transfer or a certified check of immediately available funds, the Subscription
Amount for the Initial Closing, and the Company shall deliver to the Purchaser
the Shares, and the Company and the Purchaser shall deliver the other items set
forth in Section 2.3 deliverable at the Initial Closing.  Upon delivery,
satisfaction or waiver of the covenants and conditions set forth in Sections 2.3
and 2.4, the Initial Closing shall occur on the Initial Closing Date
electronically or at such physical location as the parties shall mutually
agree.

     

    2.2         Subsequent
Closings.  On each Subsequent Closing Date, upon the terms and
subject to the conditions set forth herein, the Company agrees to sell, and the
Purchaser agrees to purchase, 1,000,000 Shares (as the same may be
proportionately adjusted in respect of any stock split, stock dividend,
combination, recapitalization or the like with respect to the Common Stock) at the Per
Share Purchase Price.  The Purchaser shall deliver to the Company, via wire
transfer or a certified check of immediately available funds, the applicable
Subscription Amount for each Subsequent Closing, and the Company shall deliver
to the Purchaser the Shares, and the Company and the Purchaser shall deliver the
other items set forth in Section 2.3 deliverable at each such Subsequent
Closing.  Upon delivery, satisfaction or waiver of the covenants and
conditions set forth in Sections 2.3, 2.4 and 2.5, each Subsequent Closing shall
occur on the applicable Subsequent Closing Date electronically or at such
physical location as the parties shall mutually agree.

     

    2.3         Deliveries.

     

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

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    (i)           solely
on the Initial Closing Date, this Agreement duly executed by the
Company;

     

    (ii)          solely
on the Initial Closing Date, the legal opinion of Company Counsel, substantially
in the form of Exhibit
A hereto; and

     

    (iii)         an
officer’s certificate of the Company’s Chief Executive Officer or Chief
Financial Officer in the form of Exhibit B attached
hereto; and

     

    (iv)        a
copy of the irrevocable instructions to the Transfer Agent instructing the
Transfer Agent to deliver, on an expedited basis, a certificate evidencing the
number of Shares purchased by the Purchaser at such
Closing,  registered in the name of the Purchaser.

     

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

     

    (i)           solely
on the Initial Closing Date, this Agreement duly executed by the Purchaser;
and

     

    (ii)          the
applicable Subscription Amount for such Closing, in each case less the amount
due the Purchaser for reimbursement of its expenses pursuant to Section 5.2
hereof.

     

    2.4         Closing
Conditions.

     

    (a)         The
obligations of the Company hereunder in connection with each Closing are subject
to the satisfaction by the Purchaser, or waiver by the Company, of the following
conditions:

     

    (i)           the
accuracy on the Closing Date of the representations and warranties of the
Purchaser contained herein (provided that
representations and warranties that speak as of a specific date shall continue
to be true and correct as of the Closing with respect to such
date);

     

    (ii)          the
performance or satisfaction by the Purchaser of all obligations, covenants and
agreements required to be performed by the Purchaser at or prior to the Closing
Date;

     

    (iii)         the
delivery by the Purchaser of the items set forth in Section 2.3(b) of this
Agreement; and

     

    (iv)         with
respect to any Subsequent Closing, the Per Share Purchase Price shall equal or
exceed the Floor, as set forth in Section 2.5 of this Agreement.

     

    (b)        The
obligations of the Purchaser hereunder in connection with each Closing are
subject to the satisfaction by the Company, or waiver by the Purchaser, of the
following conditions:

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    (i)           the
accuracy on the Closing Date of the representations and warranties of the
Company contained herein (as qualified and limited by the Disclosure Schedules
as updated through such Closing Date, and provided that
representations and warranties that speak as of a specific date shall continue
to be true and correct as of the Closing with respect to such
date);

     

    (ii)          the
performance or satisfaction by the Company of all obligations, covenants and
agreements required to be performed by the Company at or prior to the Closing
Date, including obtaining all Required Approvals;

     

    (iii)         the
delivery by the Company of the items set forth in Section 2.3(a) of this
Agreement;

     

    (iv)         there
shall have been no Material Adverse Effect with respect to the Company since the
date hereof that has not been cured by the Company;

     

    (v)          with
respect to any Subsequent Closing, the Per Share Purchase Price shall equal or
exceed the Floor, as set forth in Section 2.5 of this Agreement;

     

    (vi)         the
purchase of Shares at a Subsequent Closing from the Company shall not cause the
Purchaser’s beneficial ownership of the Common Stock, calculated in accordance
with Rule 13d-3 promulgated by the Commission, to exceed 9.99% of the Company’s
outstanding Common Stock immediately after such Subsequent Closing;
and

     

    (vii)        from
the date hereof to each Closing Date, trading in the Common Stock shall not have
been suspended by the Commission or the Company’s principal 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 any 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 the Purchaser, makes it impracticable or inadvisable to
purchase the Shares at the Closing.

     

    2.5         The Floor. In the
event that the Per Share Purchase Price does not equal or exceed the Floor, as
calculated with respect to any Subsequent Closing Date, then such Subsequent
Closing will not occur.  In such event, and subject to the proviso at the
end of this sentence, a Subsequent Closing that did not occur due to failure to
meet the Floor will be rescheduled to occur following the end of the originally
scheduled Closings under this Agreement, provided that only two Subsequent
Closings may be rescheduled in total pursuant to this Section 2.5 and pursuant
to Section 2.6(a) of that certain Common Stock Purchase Agreement, dated as of
December __, 2010, by and between the Company and the
Purchaser.

    
      
         

      

      
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    ARTICLE
III.

    REPRESENTATIONS
AND WARRANTIES

     

    3.1         Representations and
Warranties of the Company. Except as set forth under the corresponding
section of the disclosure schedules delivered concurrently herewith, which
disclosure schedules may be updated before any Closing and shall be deemed a
part hereof (the “Disclosure
Schedules”), the Company hereby makes the representations and warranties
set forth below to the Purchaser as of the date hereof and as of each Closing
Date (provided
that representations and warranties that speak as of a specific date shall
continue to be true and correct as of such Closing with respect to such
date):

     

    (a)           Subsidiaries. All of
the significant subsidiaries (as that term is defined in Rule 1-02 of Regulation
S-X promulgated by the Commission) of the Company are listed in the Company’s
most recent Annual Report on Form 10-K as modified by any subsequent SEC Reports
filed with the SEC (each a “Subsidiary”). 
The Company owns, directly or indirectly, all of the capital stock or other
equity interests of each Subsidiary free and clear of any Liens, and all of the
issued and outstanding shares of capital stock of each Subsidiary are validly
issued and are fully paid, non-assessable and free of preemptive and similar
rights to subscribe for or purchase securities.  If the Company has no
subsidiaries, all other references to the Subsidiaries or any of them in the
Transaction Documents shall be disregarded.

     

    (b)           Organization and
Qualification.  The Company and each of the Subsidiaries is an
entity duly incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization, with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently conducted. 
Neither the Company nor any Subsidiary is in violation nor default of any of the
provisions of its respective certificate or articles of incorporation, bylaws or
other organizational or charter documents.  Each of the Company and the
Subsidiaries 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 not have or would not reasonably be expected to result in
a Material Adverse Effect and, to the knowledge of the Company, no Action has
been instituted in any such jurisdiction revoking, limiting or curtailing or
seeking to revoke, limit or curtail such power and authority or
qualification.

    
      
         

      

      
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    (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 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 Shares 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 or any
Subsidiary’s certificate or articles of incorporation, bylaws or other
organizational or charter documents, (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 any Subsidiary, 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 or Subsidiary debt or otherwise) or other understanding to
which the Company or any Subsidiary is a party or by which any property or asset
of the Company or any Subsidiary is bound or affected, or (iii) subject to the
Required Approvals, conflict with or result in a violation of (x) any law, rule
or regulation to which the Company or a Subsidiary is subject (including federal
and state securities laws and regulations), or by which any property or asset of
the Company or a Subsidiary is bound or affected or (y) any order, judgment,
injunction, decree or other restriction of any court or governmental authority
that names the Company or a Subsidiary or to or by which, to the Company’s
knowledge, the Company or a Subsidiary or any property or asset thereof is bound
or affected,  except in the case of each of clauses (ii) and (iii),
such as would not reasonably be expected to result in a Material Adverse
Effect.

     

    (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 4.4 of this Agreement, and
(ii) the filing of Form D with the Commission and such filings as are required
to be made under applicable state securities laws (collectively, the “Required
Approvals”).

     

    (f)           Issuance of the
Shares.  The Shares 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 other than restrictions on transfer provided for in the
Transaction Documents.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    (g)           Capitalization. 
The capitalization of the Company is as set forth on Schedule 3.1(g),
which Schedule
3.1(g) shall also include the number of shares of Common Stock owned
beneficially, and of record, by Affiliates of the Company as of the date
hereof.  The Company has not issued any capital stock since its most
recently filed periodic report under the Exchange Act, other than pursuant to
the exercise of employee stock options under the Company’s stock option plans,
the issuance of shares of Common Stock to employees pursuant to the Company’s
employee stock purchase plans, the issuance of shares of Common Stock or stock
options to consultants pursuant to written consulting agreements and the
issuance of shares of Common Stock pursuant to the conversion and/or exercise of
Common Stock Equivalents outstanding as of the date of the most recently filed
periodic report under the Exchange Act.  No Person has any right of first
refusal, preemptive right, right of participation, or any similar right to
participate in the transactions contemplated by the Transaction Documents. 
Except as a result of the purchase and sale of the Shares, there are no
outstanding options, warrants, scrip rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exercisable or exchangeable for, or giving any
Person any right to subscribe for or acquire any shares of Common Stock, or
contracts, commitments, understandings or arrangements by which the Company or
any Subsidiary is or may become bound to issue additional shares of Common Stock
or Common Stock Equivalents.  Except as disclosed in the SEC Reports or
Section 3.1(g)
of the Disclosure Schedules, the issuance and sale of the Shares will not
obligate the Company to issue shares of Common Stock or other securities to any
Person (other than the Purchaser) and will not result in a right of any holder
of Company securities to adjust the exercise, conversion, exchange or reset
price under any of such securities.  All of the outstanding shares of
capital stock of the Company are validly issued, fully paid and nonassessable,
have been issued in material compliance with all federal and state securities
laws, and none of such outstanding shares was issued in violation of any
preemptive rights or similar rights to subscribe for or purchase
securities.  No further approval or authorization of any stockholder, the
Board of Directors or others is required for the issuance and sale of the
Shares. Except as disclosed in the SEC Reports or Section 3.1(g) of the
Disclosure Schedules, there are no stockholders agreements, voting agreements or
other similar agreements with respect to the Company’s capital stock to which
the Company is a party or, to the knowledge of the Company, between or among any
of the Company’s stockholders.

    
      
         

      

      
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    (h)          SEC Reports; Financial
Statements.  The Company has filed 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 two years preceding the date hereof (or such shorter
period as the Company was required by law or regulation to file such material)
(the foregoing materials, as the same may be amended, 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 and the 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
never been an issuer subject to Rule 144(i) under the Securities Act. 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 and its consolidated Subsidiaries 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, year-end audit
adjustments.

     

    (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 (including in any interim
financial statement filed in any SEC Report following the filing of the
Company’s then most recently filed Annual Report on Form 10-K) filed prior to
the date hereof or the date of a Subsequent Closing, as applicable: (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, except as has
been reasonably cured by the Company (ii) the Company has not incurred any
liabilities (contingent or otherwise) other than (A) trade payables, accrued
expenses and other liabilities 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 disclosed in filings
made with the Commission, (iii) the Company has not altered its method of
accounting except as otherwise required pursuant to GAAP, (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 and incentive plans and awards.  The Company
does not have pending before the Commission any request for confidential
treatment of information.  Except for the issuance of the Shares
contemplated by this Agreement or as set forth on Schedule 3.1(i), no
event, liability, fact, circumstance, occurrence or development has occurred or
exists, or is reasonably expected to occur or exist, with respect to the Company
or its Subsidiaries or their respective business, properties, operations, assets
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 one (1) Trading Day
prior to the date that this representation is made or deemed
made.

    
      
         

      

      
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    (j)
           Litigation. 
There is no action, claim, suit, inquiry, notice of violation, proceeding or
investigation pending or, to the knowledge of the Company, threatened against or
affecting the Company, any Subsidiary or any of their respective properties
before or by any court, arbitrator, governmental or administrative agency or
regulatory authority (federal, state, county, local or foreign and including,
without limitation, an informal investigation or partial proceeding, such as a
deposition) (collectively, an “Action”) which (i)
adversely affects or challenges the legality, validity or enforceability of any
of the Transaction Documents or the Shares or (ii) would, if there were an
unfavorable decision, reasonably be expected to result in a Material Adverse
Effect.  Neither the Company nor any Subsidiary, nor 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 any current or former director or officer of
the Company.  The Commission has not issued any stop order or other order
suspending the effectiveness of any registration statement filed by the Company
or any Subsidiary under the Exchange Act or the Securities Act.

     

    (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 or its Subsidiaries’ employees is a member of a union that
relates to such employee’s relationship with the Company or such Subsidiary, and
neither the Company nor any of its Subsidiaries is a party to a collective
bargaining agreement, and the Company and its Subsidiaries believe that their
relationships with their 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 the continued employment of each such executive officer does not subject the
Company or any of its Subsidiaries to any liability with respect to any of the
foregoing matters.  The Company and its Subsidiaries are 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 would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

     

    (l)
           Compliance. 
Neither the Company nor any Subsidiary: (i) is 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 reasonably be expected to result in a default by
the Company or any Subsidiary under), nor has the Company or any Subsidiary
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 naming the Company or a Subsidiary or of which the Company has
knowledge, or (iii) is in violation of any statute, rule, ordinance or
regulation of any governmental authority, including without limitation all
foreign, federal, state and local laws relating to taxes, environmental
protection, occupational health and safety, product quality and safety and
employment and labor matters, except in each case as would not reasonably be
expected to have or result in a Material Adverse Effect.

    
      
         

      

      
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    (m)          Regulatory
Permits.  The Company and the Subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state, local or
foreign regulatory authorities necessary to conduct their respective businesses
as described in the SEC Reports, except where the failure to possess such
permits would not reasonably be expected to have or result in a Material Adverse
Effect (“Material
Permits”), and neither the Company nor any Subsidiary has received any
notice of proceedings relating to the revocation or modification of any Material
Permit.

     

    (n)           Title to
Assets.  The Company and the Subsidiaries have good and marketable
title in fee simple to all real property owned by them and good and marketable
title in all personal property owned by them that is material to the business of
the Company and the Subsidiaries, in each case 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 the Subsidiaries 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 and the Subsidiaries are held by them under valid, subsisting and
enforceable leases with which the Company and the Subsidiaries are in
compliance.

     

    (o)           Patents and
Trademarks.  The Company and the Subsidiaries have, or have rights
to use, all patents, patent applications, trademarks, trademark applications,
service marks, trade names, trade secrets, inventions, copyrights, licenses and
other intellectual property rights and similar rights as described in the SEC
Reports as necessary or material for use in connection with their respective
businesses and which the failure to so have would reasonably be expected to have
or result in a Material Adverse Effect (collectively, the “Intellectual Property
Rights”).  None of, and neither the Company nor any Subsidiary has
received a notice (written or otherwise) that any of, the Intellectual Property
Rights has expired, terminated or been abandoned, or is expected to expire or
terminate or be abandoned, within two (2) years from the date of this
Agreement.  Neither the Company nor any Subsidiary has received, since the
date of the latest audited financial statements included within the SEC Reports,
a written notice of a claim or otherwise has any knowledge that the Intellectual
Property Rights violate or infringe upon the rights of any Person, except as
would not reasonably be expected to have or result in a Material Adverse
Effect.  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.  The Company and its
Subsidiaries have 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 or result in a Material Adverse Effect.

     

    (p)           Insurance.  The
Company and the Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which the Company and the Subsidiaries are
engaged, including, but not limited to, directors and officers insurance
coverage at least equal to the aggregate Subscription Amount from all
Closings.  Neither the Company nor any Subsidiary has any reason to believe
that it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business without a significant increase in
cost.

    
      
         

      

      
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    (q)           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 or any Subsidiary (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.

     

    (r)   
        Sarbanes-Oxley; Internal
Accounting Controls.  The Company is in compliance with any and all
applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as
of the date hereof, and any and all applicable rules and regulations promulgated
by the Commission thereunder that are effective as of the date hereof and as of
the Closing Date.  The Company and the Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that:
(i) transactions are executed in accordance with management’s general or
specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The
Company has established disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such
disclosure controls and procedures to ensure that information required to be
disclosed by the Company in the reports it files or submits under the Exchange
Act is recorded, processed, summarized and reported, within the time periods
specified in the Commission’s rules and forms.  The Company’s certifying
officers have evaluated the effectiveness of the Company’s disclosure controls
and procedures as of the end of the period covered by the Company’s most
recently filed periodic report under the Exchange Act (such date, the “Evaluation
Date”).  The Company presented in its most recently filed periodic
report under the Exchange Act the conclusions of the certifying officers about
the effectiveness of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date.  Since the Evaluation Date, there
have been no changes in the Company’s internal control over financial reporting
(as such term is defined in the Exchange Act) that has materially affected, or
is reasonably likely to materially affect, the Company’s internal control over
financial reporting.

    
      
         

      

      
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    (s)           Certain Fees. No
brokerage or finder’s fees or commissions are or will be payable by the Company
to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions
contemplated by the Transaction Documents.  The Purchaser shall have no
obligation with respect to any fees or with respect to any claims made by or on
behalf of other Persons for fees of a type contemplated in this Section that may
be due in connection with the transactions contemplated by the Transaction
Documents.

     

    (t)    
       Private Placement.
Assuming the accuracy of the Purchaser’s representations and warranties set
forth in Section 3.2, no registration under the Securities Act is required for
the offer and sale of the Shares by the Company to the Purchaser as contemplated
hereby.  The issuance and sale of the Shares hereunder does not contravene
the rules and regulations of the Trading Market.

     

    (u)           Investment Company.
The Company is not, and is not an Affiliate of, and immediately after receipt of
payment for the Shares, will not be or be an Affiliate of, an “investment
company” within the meaning of the Investment Company Act of 1940, as
amended.  The Company shall conduct its business in a manner so that it
will not become an “investment company” subject to registration under the
Investment Company Act of 1940, as amended.

     

    (v)           Registration
Rights.  Except as set forth in Section 3.1(v) of the
Disclosure Schedules, no Person has any right to cause the Company to effect the
registration under the Securities Act of any securities of the
Company.

     

    (w)          Listing and Maintenance
Requirements.  The Company has not, in the 12 months preceding the
date hereof, received notice from any Trading Market on which the Common Stock
is or has been listed or quoted to the effect that the Company is not in
compliance with the listing or maintenance requirements of such Trading Market.
The Company is, and has no reason to believe that it will not in the foreseeable
future continue to be, in compliance with all such listing and maintenance
requirements.

     

    (x)           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
certificate of incorporation (or similar charter documents) or the laws of its
state of incorporation that is or could become applicable to the Purchaser as a
result of the Purchaser 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 Shares and the
Purchaser’s ownership of the Shares pursuant to the terms of this Agreement (but
excluding the acquisition of, or the right to acquire, by the Purchaser the
beneficial ownership of any other shares of the Company’s Common Stock other
than pursuant to the terms and conditions of this Agreement)..

    
      
         

      

      
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    (y)           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 the Purchaser or its
agents or counsel with any information that it believes constitutes or might
constitute material, non-public information.   The Company understands
and confirms that the Purchaser 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 Purchaser 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 press releases disseminated by the
Company during the twelve months preceding the date of this Agreement taken as a
whole do not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made and
when made, not misleading.  The Company acknowledges and agrees that the
Purchaser does not make and has not made any representations or warranties with
respect to the transactions contemplated hereby other than those specifically
set forth in Section 3.2 hereof.

     

    (z)           No Integrated
Offering. Assuming the accuracy of the Purchaser’s representations and
warranties set forth in Section 3.2, neither the Company, nor any of its
Affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would cause this offering of the
Shares to be integrated with prior offerings by the Company for purposes of (i)
the Securities Act which would require the registration of any such securities
under the Securities Act, or (ii) any applicable shareholder approval provisions
of any Trading Market on which any of the securities of the Company are listed
or designated.

     

    (aa)         Solvency.  Based
on the consolidated financial condition of the Company as of the Closing Date,
after giving effect to the receipt by the Company of the proceeds from the sale
of the Shares hereunder: (i) the fair saleable value of the Company’s assets
exceeds the amount that will be required to be paid on or in respect of the
Company’s existing debts and other liabilities (including known contingent
liabilities) as they mature, (ii) the Company’s assets do not constitute
unreasonably small capital to carry on its business as now conducted and as
proposed to be conducted including its capital needs taking into account the
particular capital requirements of the business conducted by the Company, and
projected capital requirements and capital availability thereof, and (iii) the
current cash flow of the Company, together with the proceeds the Company would
receive, were it to liquidate all of its assets, after taking into account all
anticipated uses of the cash, would be sufficient to pay all amounts on or in
respect of its liabilities when such amounts are required to be paid.  The
Company does not intend to incur debts beyond its ability to pay such debts as
they mature (taking into account the timing and amounts of cash to be payable on
or in respect of its debt).  The Company has no knowledge of any facts or
circumstances that lead it to believe that it will file for reorganization or
liquidation under the bankruptcy or reorganization laws of any jurisdiction
within one year from the Closing Date.  Schedule 3.1(aa) sets
forth as of the date hereof all outstanding secured and unsecured Indebtedness
of the Company or any Subsidiary, or for which the Company or any Subsidiary has
commitments.  For the purposes of this Agreement, “Indebtedness” means
(x) any liabilities for borrowed money or amounts owed in excess of $50,000
(other than trade accounts payable incurred in the ordinary course of business),
(y) all guaranties, endorsements and other contingent obligations in respect of
indebtedness of others, whether or not the same are or should be reflected in
the Company’s balance sheet (or the notes thereto), except guaranties by
endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business; and (z) the present value of
any lease payments in excess of $50,000 due under leases required to be
capitalized in accordance with GAAP.  Neither the Company nor any
Subsidiary is in default with respect to any Indebtedness.

    
      
         

      

      
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    (bb)        Tax Status. 
Except for matters that would not, individually or in the aggregate, reasonably
be expected to have or result in a Material Adverse Effect, the Company and each
Subsidiary (i) has made or filed all United States federal and state income and
all foreign income and franchise tax returns, reports and declarations required
by any jurisdiction to which it is subject, (ii) has paid all taxes and other
governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations and (iii) has set
aside on its books provision reasonably adequate for the payment of all material
taxes for periods subsequent to the periods to which such returns, reports or
declarations apply.  There are no unpaid taxes in any material amount
claimed to be due by the taxing authority of any jurisdiction, and the officers
of the Company or of any Subsidiary know of no basis for any such
claim.

     

    (cc)         No General
Solicitation.  Neither the Company nor any person acting on behalf
of the Company has offered or sold any of the Shares by any form of general
solicitation or general advertising.  The Company has offered the Shares
for sale only to the Purchaser.

     

    (dd)        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 its 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.

     

    (ee)         Accountants. 
The Company’s accounting firm is Brown Armstrong Accountancy Corporation. 
To the knowledge and belief of the Company, such accounting firm: (i) is a
registered public accounting firm as required by the Exchange Act and (ii) shall
express its opinion with respect to the financial statements to be included in
the Company’s Annual Report for the year ending December 31,
2010.

    
      
         

      

      
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    (ff)          No Disagreements with
Accountants and Lawyers. There are no disagreements of any kind
presently existing, or reasonably anticipated by the Company to arise, between
the Company and the accountants and lawyers formerly or presently employed by
the Company and the Company is current with respect to any fees owed to its
accountants and lawyers which could affect the Company’s ability to perform any
of its obligations under any of the Transaction Documents.

     

    (gg)        Acknowledgment Regarding
Purchaser’s Purchase of Shares.  The Company acknowledges and agrees
that the Purchaser 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 the Purchaser is not 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 the Purchaser or any of its representatives or agents in
connection with the Transaction Documents and the transactions contemplated
thereby is merely incidental to the Purchaser’s purchase of the Shares. 
The Company further represents to the 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.

     

    (hh)        Acknowledgment Regarding
Purchaser’s Trading Activity.  Anything in this Agreement or elsewhere herein to the
contrary notwithstanding (except for Sections 3.2(f) and 4.10 hereof), it is
understood and acknowledged by the Company that: (i) the Purchaser has not been
asked by the Company to agree, nor has the 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
Shares for any specified term, (ii) past or future open market or other
transactions by the 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) the Purchaser, and
counter-parties in “derivative” transactions to which the Purchaser is a party,
directly or indirectly, may presently have a “short” position in the Common
Stock and (iv) the 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) the Purchaser may engage in hedging activities at various times during the
period that the Shares 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.

     

    (ii)           Regulation M
Compliance.  The Company has not, and to its knowledge no one acting
on its behalf has, (i) taken, directly or indirectly, any action designed to
cause or to result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of the Shares,
(ii) sold, bid for, purchased, or paid any compensation for soliciting purchases
of, any of the Shares, or (iii) paid or agreed to pay to any Person any
compensation for soliciting another to purchase any other securities of the
Company, other than, in the case of clauses (ii) and (iii), compensation paid to
the Company’s placement agent in connection with the placement of the
Shares.

    
      
         

      

      
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    (jj)           Stock Option Plans.
Each stock option granted by the Company under the Company’s stock option plan
was granted (i) in accordance with the terms of the Company’s stock option plan
and (ii) with an exercise price at least equal to the fair market value of the
Common Stock on the date such stock option would be considered granted under
GAAP and applicable law.  No stock option granted under the Company’s stock
option plan has been backdated.  The Company has not knowingly granted, and
there is no and has been no Company policy or practice to knowingly grant, stock
options prior to, or otherwise knowingly coordinate the grant of stock options
with, the release or other public announcement of material information regarding
the Company or its Subsidiaries or their financial results or
prospects.

     

    (kk)         Office of Foreign Assets
Control.  Neither the Company nor, to the Company's knowledge, any
director, officer, agent, employee or affiliate of the Company is currently
subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department (“OFAC”).

     

    (ll)           U.S. Real Property Holding
Corporation.  The Company is not and has never been a U.S. real
property holding corporation within the meaning of Section 897 of the Internal
Revenue Code of 1986, as amended, and the Company shall so certify upon the
Purchaser’s request.

     

    (mm)       Bank Holding Company
Act.  Neither the Company nor any of its Subsidiaries or Affiliates
is subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”) and to
regulation by the Board of Governors of the Federal Reserve System (the “Federal
Reserve”).  Neither the Company nor any of its Subsidiaries or
Affiliates owns or controls, directly or indirectly, five percent (5%) or more
of the outstanding shares of any class of voting securities or twenty-five
percent (25%) or more of the total equity of a bank or any entity that is
subject to the BHCA and to regulation by the Federal Reserve.  Neither the
Company nor any of its Subsidiaries or Affiliates exercises a controlling
influence over the management or policies of a bank or any entity that is
subject to the BHCA and to regulation by the Federal Reserve.

     

    (nn)        Money
Laundering.  The operations of the Company are and have been
conducted at all times in compliance with applicable financial record-keeping
and reporting requirements of the Currency and Foreign Transactions Reporting
Act of 1970, as amended, applicable money laundering statutes and applicable
rules and regulations thereunder (collectively, the “Money Laundering
Laws”), and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company
with respect to the Money Laundering Laws is pending or, to the knowledge of the
Company, threatened.

    
      
         

      

      
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    3.2         Representations and
Warranties of the Purchaser.  The Purchaser hereby makes the
representations and warranties set forth below to the Company as of the date
hereof and as of each Closing Date (provided that
representations and warranties that speak as of a specific date shall continue
to be true and correct as of such Closing with respect to such
date):

     

    (a)           Organization;
Authority. The Purchaser is 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 the Transaction Documents and
otherwise to carry out its obligations hereunder and thereunder. The execution
and delivery of the Transaction Documents and performance by the Purchaser of
the transactions contemplated by the Transaction Documents have been duly
authorized by all necessary corporate, partnership, limited liability company or
similar action, as applicable, on the part of the Purchaser.  Each
Transaction Document to which it is a party has been duly executed by the
Purchaser, and when delivered by the Purchaser in accordance with the terms
hereof, will constitute the valid and legally binding obligation of the
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.

     

    (b)           Own Account. The
Purchaser understands that the Shares are “restricted securities” and have not
been registered under the Securities Act or any applicable state securities law
and is acquiring the Shares as principal for its own account and not with a view
to or for distributing or reselling such Shares 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 Shares 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 Shares in violation of the Securities Act or any applicable
state securities law (this representation and warranty not limiting the
Purchaser’s right to sell the Shares in compliance with applicable federal and
state securities laws). The Purchaser is acquiring the Shares hereunder in the
ordinary course of its business.

     

    (c)           Purchaser
Status.  At the time the Purchaser was offered the Shares, it was,
and as of the date hereof it is 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. The Purchaser is not required to be registered as a
broker-dealer under Section 15 of the Exchange Act.

     

    (d)           Experience of the
Purchaser. The 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 Shares, and has so evaluated the merits and
risks of such investment. The Purchaser is able to bear the economic risk of an
investment in the Shares and, at the present time, is able to afford a complete
loss of such investment.

    
      
         

      

      
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    (e)           General Solicitation.
The Purchaser is not purchasing the Shares as a result of any advertisement,
article, notice or other communication regarding the Shares published in any
newspaper, magazine or similar media or broadcast over television or radio or
presented at any seminar or any other general solicitation or general
advertisement.

     

    (f)           Certain Transactions and
Confidentiality.  Other than consummating the transactions
contemplated hereunder, the Purchaser has not directly or indirectly, nor has
any Person acting on behalf of or pursuant to any understanding with the
Purchaser, executed any purchases or sales, including Short Sales, of the
securities of the Company during the period commencing as of the time that the
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.  Other than to other Persons party to this Agreement, the
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.

     

    (g)           No Brokers or
Finders.  No agent, broker, investment bank or firm is or will be
entitled to any broker’s or finder’s fee, or any commission or similar fee, from
the Purchaser in connection with any of the transactions contemplated by this
Agreement.

     

    (h)           Limited
Ownership.  The acquisition by the Purchaser of the Shares issuable
to it at the Closings will not result in the Purchaser (individually or together
with any other Person with which the Purchaser has identified, or will have
identified, itself as part of a “group” in a public filing made with the
Commission involving the Company’s securities) acquiring, or obtaining the right
to acquire, beneficial ownership of a number of shares of Common Stock equal to
or in excess of 15% of the outstanding shares of Common Stock or the voting
power of the Company on a post-transaction basis that assumes that all Closings
contemplated by this Agreement shall have occurred.

     

    The
Company acknowledges and agrees that the representations contained in Section
3.2 shall not modify, amend or affect the 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.

    
      
         

      

      
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    ARTICLE
IV.

    OTHER
AGREEMENTS OF THE PARTIES

     

    4.1         Transfer
Restrictions.

     

    (a)           The
Shares may only be disposed of in compliance with state and federal securities
laws.  In connection with any transfer of Shares other than pursuant to an
effective registration statement or Rule 144, to the Company or to an Affiliate
of the Purchaser or in connection with a pledge as contemplated in Section
4.1(b), the Company may require the transferor thereof to provide to the Company
an opinion of counsel selected by the transferor and reasonably acceptable to
the Company, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not require
registration of such transferred Shares under the Securities Act.  As a
condition of transfer, any such transferee shall agree in writing to be bound by
the terms of this Agreement and shall have the rights and obligations of the
Purchaser under this Agreement.

     

    (b)           The
Purchaser agrees to the imprinting, so long as is required by this Section 4.1,
of a legend on any of the Shares in the following form:

     

    THIS
SECURITY HAS NOT BEEN  REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY.  THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH
A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A
FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a)
UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.

     

    The
Company acknowledges and agrees that the Purchaser may from time to time pledge
pursuant to a bona fide margin agreement with a registered broker-dealer or
grant a security interest in some or all of the Shares to a financial
institution that is an “accredited investor” as defined in Rule 501(a) under the
Securities Act and that agrees to be bound by the provisions of this Agreement
and, if required under the terms of such arrangement, the Purchaser may transfer
pledged or secured Shares to the pledgees or secured parties.  Such a
pledge or transfer would not be subject to approval of the Company and no legal
opinion of legal counsel of the pledgee, secured party or pledgor shall be
required in connection therewith.  Further, no notice shall be required of
such pledge.  At the Purchaser’s expense, the Company will execute and
deliver such reasonable documentation as a pledgee or secured party of Shares
may reasonably request in connection with a pledge or transfer of the Shares,
including, if the Shares are then registered for resale, the preparation and
filing of any required prospectus supplement under Rule 424(b)(3) under the
Securities Act or other applicable provision of the Securities Act to
appropriately amend the list of selling stockholders.

    
      
         

      

      
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    (c)           Certificates
evidencing the Shares shall not contain any legend (including the legend set
forth in Section 4.1(b) hereof), (i) while a registration statement covering the
resale of such security is effective under the Securities Act, (ii) following
any sale of such Shares pursuant to Rule 144, (iii) if such Shares are eligible
for sale under Rule 144, without the requirement for the Company to be in
compliance with the current public information required under Rule 144 as to
such Shares and without volume or manner-of-sale restrictions, or (iv) if such
legend is not required under applicable requirements of the Securities Act
(including judicial interpretations and pronouncements issued by the staff of
the Commission).  From and after six (6) months from the applicable Closing
Date, unless the Purchaser is then an Affiliate of the Company, at such time as
the Purchaser has sold all or any portion of the Shares then eligible to be sold
pursuant to Rule 144, the Company shall cause its counsel to issue a legal
opinion to the Transfer Agent if required by the Transfer Agent to effect the
removal of the legend hereunder with respect to the Shares sold.  The
Company agrees that following the time as such legend is no longer required
under this Section 4.1(c), it will, no later than three Trading Days following
the delivery by the Purchaser to the Company or the Transfer Agent of a
certificate representing Shares issued with a restrictive legend (such third
Trading Day, the “Legend Removal
Date”), deliver or cause to be delivered to the Purchaser a certificate
representing such shares that is free from all restrictive and other legends;
provided that
the Purchaser shall provide to the Company and its counsel such representation
letters as are reasonably and customarily necessary to allow an opinion to be
provided for the purpose of removing such restrictive legend.  The Company
may not make any notation on its records or give instructions to the Transfer
Agent that enlarge the restrictions on transfer set forth in this Section
4.  Certificates for Shares subject to legend removal hereunder shall be
transmitted by the Transfer Agent to the Purchaser by crediting the account of
the Purchaser’s prime broker with the Depository Trust Company System as
directed by the Purchaser.

    

    (d)           In
addition to the Purchaser’s other available remedies, the Company shall pay to
the Purchaser, in cash, as partial liquidated damages and not as a penalty, for
each $1,000 of Shares (based on the VWAP of the Common Stock on the date such
Shares are submitted to the Transfer Agent) delivered for removal of the
restrictive legend and subject to Section 4.1(c), $10 per Trading Day
(increasing to $20 per Trading Day five (5) Trading Days after such damages have
begun to accrue) for each Trading Day after the Legend Removal Date until such
certificate is delivered without a legend. Nothing herein shall limit the
Purchaser’s right to pursue actual damages for the Company’s failure to deliver
certificates representing any Shares as required by the Transaction Documents,
and the Purchaser shall have the right to pursue all remedies available to it at
law or in equity including, without limitation, a decree of specific performance
and/or injunctive relief.

     

    (e)           The
Purchaser agrees with the Company that the Purchaser will sell any Shares
pursuant to either the registration requirements of the Securities Act,
including any applicable prospectus delivery requirements, or an exemption
therefrom, and that if Shares are sold pursuant to a registration statement,
they will be sold in compliance with the plan of distribution set forth therein,
and acknowledges that the removal of the restrictive legend from certificates
representing Shares as set forth in this Section 4.1 is predicated upon the
Company’s reliance upon this understanding.

    
      
         

      

      
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    4.2         Furnishing of Information;
Public Information.

     

    (a)           For
a period of two (2) years from the Initial Closing Date, 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 Section 15(d) of the Exchange Act even if the
Company is not then subject to the reporting requirements of the Exchange
Act.  As long as the Purchaser owns Shares, if the Company is not required
to file reports pursuant to the Exchange Act, it will prepare and furnish to the
Purchaser and make publicly available in accordance with Rule 144(c) such
information as is required for the Purchaser to sell the Shares, including
without limitation, under Rule 144. The Company further covenants that it will
take such further action as any holder of Shares may reasonably request, to the
extent required from time to time to enable such Person to sell such Shares
without registration under the Securities Act, including without limitation,
within the requirements of the exemption provided by Rule 144.

     

    (b)           At
any time during the period commencing on the Initial Closing Date and ending at
such time that all of the Shares may be sold without the requirement for the
Company to be in compliance with Rule 144(c)(1) and otherwise without
restriction or limitation pursuant to Rule 144, if the Company shall fail for
any reason to satisfy the current public information requirement under Rule
144(c) (a “Public
Information Failure”) then, in addition to the Purchaser’s other
available remedies, the Company shall pay to the Purchaser, in cash, as
liquidated damages and not as a penalty, for each $1,000 of Shares (based on the
VWAP of the Common Stock on the date on which the Purchaser shall first attempt
a sale) sought to be sold by the Purchaser, $10 per Trading Day (increasing to
$20 per Trading Day five (5) Trading Days after such damages have begun to
accrue) for each Trading Day that the Public Information Failure remains uncured
by the Company.  The payments to which the Purchaser shall be entitled
pursuant to this Section 4.2(b) are referred to herein as “Public Information Failure
Payments.”  Public Information Failure Payments shall be paid
within five (5) Business Days of the first occurrence of the Public Information
Failure and on or before the last day of each calendar month thereafter if the
Public Information Failure continues beyond the first month.  In the event
the Company fails to make Public Information Failure Payments in a timely
manner, such Public Information Failure Payments shall bear
interest at the rate of 1.5% per month (prorated for partial months) until paid
in full.  Nothing herein shall limit the Purchaser’s right to pursue actual
damages for the Public Information Failure, and the Purchaser shall have the
right to pursue all remedies available to it at law or in equity including,
without limitation, a decree of specific performance and/or injunctive
relief.

     

    4.3         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 Shares in a manner
that would require the registration under the Securities Act of the sale of the
Shares or that would be integrated with the offer or sale of the Shares for
purposes of the rules and regulations of any 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.

    
      
         

      

      
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    4.4           Securities Laws Disclosure;
Publicity.  The Company shall timely file a Current Report on Form
8-K and press release disclosing the material terms of the transactions
contemplated hereby, and including the Transaction Documents as exhibits
thereto, in each case reasonably acceptable to the Purchaser and its counsel, if
the Purchaser is readily available to review such Form 8-K in a timely
manner.  From and after the issuance of such press release, the Company
shall have publicly disclosed all material, non-public information delivered to
the Purchaser by the Company or any of its Subsidiaries, or any of their
respective officers, directors, employees or agents in connection with the
transactions contemplated by the Transaction Documents.  The Company and
the Purchaser shall consult with each other in issuing any other press releases
with respect to the transactions contemplated hereby, and neither the Company
nor the 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 the Purchaser, or without the prior consent of the 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 the Purchaser, or include the name of the Purchaser in any filing with the
Commission or any regulatory agency or Trading Market, without the prior written
consent of the Purchaser, except: (a) as required by federal securities law in
connection with (i) any registration statement contemplated by Section 4.13 and
(ii) 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 Purchaser with prior notice of such disclosure permitted under this clause
(b).

     

    4.5           Shareholder Rights
Plan.  No claim will be made or enforced by the Company or, with the
consent of the Company, any other Person, that the 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 the
Purchaser could be deemed to trigger the provisions of any such plan or
arrangement, by virtue of receiving Shares under the Transaction Documents or
under any other agreement between the Company and the Purchaser, provided that this
Section 4.5 shall not be applicable if the Purchaser acquires beneficial
ownership (or the right to acquire beneficial ownership) of any other shares of
the Company’s Common Stock other than pursuant to the terms and conditions of
this Agreement.

     

    4.6           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 the Purchaser or its agents or counsel with any information
that the Company believes constitutes material non-public information, unless
prior thereto the Purchaser shall have executed a written agreement with the
Company regarding the confidentiality and use of such information.  The
Company understands and confirms that the Purchaser shall be relying on the
foregoing covenant in effecting transactions in securities of the Company. The
Purchaser covenants and agrees that it shall not, and shall cause its counsel
not to, knowingly request from the Company or any person acting on the Company’s
behalf any material non-public information (other than any such information
disclosed prior to the date of this Agreement).

    
      
         

      

      
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    4.7           Use of
Proceeds.  Except as set forth on Schedule 4.7 attached
hereto, the Company shall use the net proceeds from the sale of the Shares
hereunder for working capital and general corporate purposes.

     

    4.8           Indemnification of
Purchaser.   Subject to the provisions of this Section 4.8, the
Company will indemnify and hold the Purchaser, Seaside 88 Advisors, LLC and
their respective directors, officers, shareholders, members, partners,
employees, agents and Affiliates (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 the 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 Purchaser Party may suffer or incur as a result of or
relating to (a) any breach of any of the representations, warranties, covenants
or agreements made by the Company in this Agreement or in the other Transaction
Documents or (b) any action instituted against a Purchaser Party in any
capacity, or any of them or their respective Affiliates, by any stockholder of
the Company who is not an Affiliate of the Purchaser, with respect to any of the
transactions contemplated by the Transaction Documents (unless such action is
based upon a breach of the Purchaser’s representations, warranties or covenants
under the Transaction Documents or any agreements or understandings the
Purchaser may have with any such stockholder or any violations by the Purchaser
of state or federal securities laws or any conduct by the Purchaser which
constitutes fraud, gross negligence, willful misconduct or malfeasance). 
If any action shall be brought against any Purchaser Party in respect of which
indemnity may be sought pursuant to this Agreement, the 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 the 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 the Purchaser Party such that common representation
would be unethical or ineffective, 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 the
Purchaser Party in this Agreement or in the other Transaction Documents. 
The indemnification required by this Section 4.8 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as and when bills are received or are incurred. The indemnity
agreements contained herein shall be in addition to any cause of action or
similar right of any Purchaser Party against the Company or others, and (y) any
liabilities the Company may be subject to pursuant to law.

    
      
         

      

      
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    4.9           Listing of Common
Stock. The Company hereby agrees to use its best efforts to maintain the
listing or quotation (as applicable) of the Common Stock on its current Trading
Market and all other Trading Markets on which such Common Stock may hereafter be
listed or quoted (as applicable) and will comply in all respects with the
Company’s reporting, filing and other obligations under the bylaws or rules of
such Trading Market(s), provided that best
efforts shall not require the expenditure of time or money that is unreasonable
in light of the likelihood of success of the efforts.  The Company further
agrees that, if the Company applies to have the Common Stock traded on any
Trading Market other than its current Trading Market, it will include in such
application all of the Shares and will take such other action as is reasonably
necessary to cause all of the Shares to be listed on such other Trading
Market.

     

    4.10         Certain Transactions and
Confidentiality. The Purchaser covenants that neither it, nor any Person
acting on its behalf or pursuant to any understanding with it, will execute any
purchases or sales, including Short Sales, of any of the Company’s securities
during the period commencing with the execution of this Agreement and ending
upon the earlier of the date of termination of this Agreement or the date of the
final Subsequent Closing contemplated hereby.  The Purchaser covenants that
until such time as the transactions contemplated by this Agreement are publicly
disclosed by the Company pursuant to the initial press release as described in
Section 4.4, the Purchaser will maintain the confidentiality of the existence
and terms of this transaction and the information included in the Transaction
Documents and the Disclosure Schedules.  Notwithstanding the foregoing, and
notwithstanding anything contained in this Agreement to the contrary, the
Company expressly acknowledges and agrees that (i) the Purchaser makes no
representation, warranty or covenant hereby that it will not engage in effecting
transactions in any securities of the Company after the time end of the period
contemplated by this Section 4.10, (ii) the Purchaser shall not be restricted or
prohibited from effecting any transactions in any securities of the Company in
accordance with applicable securities laws from and after such time, and (iii)
the Purchaser shall have no duty of confidentiality to the Company or its
Subsidiaries after such time, provided, that the
Purchaser will not engage in any Short Sales while it holds any of the
Shares. 

     

    4.11         Form D; Blue Sky
Filings.  The Company agrees to timely file a Form D with respect to
the Shares as required under Regulation D and to provide a copy thereof,
promptly upon request of the Purchaser. The Company shall take such action as
the Company shall reasonably determine is necessary in order to obtain an
exemption for, or to qualify the Shares for, sale to the Purchaser at the
Closing under applicable securities or “Blue Sky” laws of the states of the
United States, and shall provide evidence of such actions promptly upon request
of the Purchaser.

     

    4.12         Delivery of Shares After
Closing.  The Company shall deliver, or cause to be delivered, a
certificate representing the Shares purchased by the Purchaser at each Closing
to the Purchaser within three (3) Trading Days of the applicable Closing
Date.

    
      
         

      

      
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    4.13       Piggyback Registration
Rights. If, at any time after the Closing Date, the Company shall propose
to file with the Commission a registration statement under the Securities Act
other than on Forms S-4 or S-8 (or any successor to such forms), the Company
shall give notice to the Purchaser and include in such registration statement
all or any part of the Shares that the Purchaser requests to be registered;
provided, however, that the
Company shall not be required to register any Shares pursuant to this Section
4.13 that are eligible for resale pursuant to Rule 144 under the Securities Act
without any requirement for the Company to maintain current public information
and without any limitation on volume or manner of sale.  The Company shall
use best efforts to cause such registration statement to become effective as
soon as practicable.

     

    ARTICLE
V.

    MISCELLANEOUS

     

    5.1         Termination. 
This Agreement may be terminated:

     

    (a)           by
the Purchaser upon written notice to the Company, if the Initial Closing has not
been consummated on or before _______________, 20__;
or

     

    (b)           by
the Company at any time immediately upon written notice to the
Purchaser;

     

    provided, however, that no such
termination pursuant to this Section 5.1 will affect the right of any party to
sue for any breach by the other party (or parties).

     

    5.2         Fees and
Expenses.  Except as otherwise set forth in this Agreement and as
set forth in this Section 5.2 below, each party shall pay the fees and expenses
of its own 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 stamp and other taxes and duties levied in connection with the delivery
of the Shares.  Notwithstanding the foregoing, at the Initial Closing and
at each Subsequent Closing the Company shall reimburse the Purchaser for the
fees and expenses of its counsel, White White & Van Etten PC, in an amount
equal to $2,500.  Such legal fees may be withheld by the Purchaser from the
Subscription Amount to be paid for the Shares purchased at the Initial Closing
and any Subsequent Closing.

     

    5.3         Entire
Agreement.  The Transaction Documents, together with the 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.

    
      
         

      

      
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    5.4           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 electronic mail or facsimile at the electronic
mail address or 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 electronic mail or facsimile at the electronic mail address or
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 or
as otherwise provided by written notice delivered in compliance with this
Section 5.4 by the addressee to the other party.

     

    5.5           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 Purchaser 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.

     

    5.6           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.

     

    5.7           Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted assigns. Neither party
may  assign this Agreement or any rights or obligations hereunder
without the prior written consent of the other party; provided that the
Purchaser may assign its rights and obligations under this Agreement to an
Affiliate without obtaining the Company’s prior written consent so long as the
assignee shall agree in writing to be bound by such obligations and provided that the
Purchaser shall in any event remain liable for the obligations of any such
assignee under this Agreement.

     

    5.8           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 4.8.

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

    5.9           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 4.8,
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.

     

    5.10         Survival.  The
representations and warranties contained herein shall survive the Closing and
the delivery of the Shares for the applicable statute of
limitations.

     

    5.11         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.

     

    5.12         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.

     

    5.13         Replacement of
Shares.  If any certificate or instrument evidencing any Shares 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 Shares.

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

    5.14         Remedies.  In
addition to being entitled to exercise all rights provided herein or granted by
law, including recovery of damages, each of the Purchaser 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.

     

    5.15         Payment Set
Aside.  To the extent that either party hereto makes a payment or
payments to the other party hereto pursuant to any Transaction Document or
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 other party, 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.

     

    5.16         Liquidated
Damages.  The Company’s obligations to pay any partial liquidated
damages or other amounts owing under the Transaction Documents is a continuing
obligation of the Company and shall not terminate until all unpaid partial
liquidated damages and other amounts have been paid notwithstanding the fact
that the instrument or security pursuant to which such partial liquidated
damages or other amounts are due and payable shall have been
canceled.

     

    5.17         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.

     

    5.18         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.

     

    5.19         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.

     

    (Signature
Pages Follow)

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

    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.

     

    
      
        
          
            
              
                
                  
                    
                      	
                              Searchlight
      Minerals Corp.

                            	 
      	
                              Address for Notice:

                            
	 
      	 
      	 
      
	
                              By:

                            	
                               

                            	 
      	
                              2441
      West Horizon Ridge Parkway

                            
	 
      	
                              Name:

                            	 
      	
                              Suite
      120

                            
	 
      	
                              Title:

                            	 
      	
                              Henderson,
      NV 89052

                            
	 
      	 
      	
                              Attention:

                            
	 
      	 
      	
                              Fax:

                            
	 
      	 
      	
                              Email:

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

                            	 
      	
                              Baker
      & Hostetler LLP

                            
	 
      	 
      	
                              12100
      Wilshire Boulevard

                            
	 
      	 
      	
                              15th
      Floor

                            
	 
      	 
      	
                              Los
      Angeles, CA 90025

                            
	 
      	 
      	
                              Attention:
      Jeffrey P. Berg, Esq.

                            
	 
      	 
      	
                              Fax:
      (310) 820-8859

                            
	 
      	 
      	
                              Email:
      jberg@bakerlaw.com

                            
	 
      	 
      	 
      
	
                              Seaside
      88, LP

                            	 
      	
                              Address for Notice:

                            
	 
      	 
      	 
      
	
                              By:  Seaside
      88 Advisors, LLC

                            	 
      	 
      
	 
      	 
      	
                              750
      Ocean Royale Way

                            
	 
      	 
      	
                              Suite
      805

                            
	
                              By:

                            	
                               

                            	 
      	
                              North
      Palm Beach, FL 33408

                            
	 
      	
                              Name:
      William J. Ritger

                            	 
      	
                              Attention:  William
      J. Ritger and

                            
	 
      	
                              Title:   Manager

                            	 
      	
                              Denis
      M. O’Donnell, M.D.

                            
	 
      	 
      	
                              Fax:  866-358-6721

                            
	 
      	 
      	
                              Email:  wjr@seaside88.com

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

                            	 
      	
                              White
      White & Van Etten PC

                            
	 
      	 
      	
                              55
      Cambridge Parkway

                            
	 
      	 
      	
                              Cambridge,
      MA 02142

                            
	 
      	 
      	
                              Attention:  David
      A. White, Esq.

                            
	 
      	 
      	
                              Fax:  617-225-0205

                            
	 
      	
                                

                            	
                              Email:  daw@wwvlaw.com

                            

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        32SUBSCRIPTION
AGREEMENT

     

    THIS SUBSCRIPTION AGREEMENT
(this “Agreement”), is
dated as of December 22, 2010, by and between American Standard Energy Corp., a
Delaware corporation (the “Company”), and the subscribers
identified on the signature pages hereto (each a “Subscriber” and collectively,
the “Subscribers”).

    

    RECITALS:

    

    WHEREAS, the Company and the
Subscribers are executing and delivering this Agreement in reliance upon an
exemption from securities registration afforded by the provisions of Section
4(2), Section 4(6), Regulation D (“Regulation D”) and/or
Regulation S (“Regulation
S”) as promulgated by the United States Securities and Exchange
Commission (the “Commission”) under the
Securities Act of 1933, as amended (the “1933 Act”).

    

    WHEREAS, this is a private
offering (the
“Offering”) in which the
Subscribers agree to purchase and the Company agrees to offer and sell shares of
its common stock (the “Purchased Shares”) at a price
of $3.25 per share (the “Share
Purchase Price”) for aggregate gross proceeds of up to $750,000 (the
“Purchase
Price”).

     

    WHEREAS, in connection with
the Offering, the Company shall issue to the Subscribers share purchase warrants
(the “Series A
Warrants”) in the form attached hereto as Exhibit A (the “Warrants”), with the Warrants entitling
the Subscribers to purchase one (1) share of the Company’s Common Stock (the
“A Warrant Shares”) for every
share purchased in this Private Placement by the Subscriber, (collectively
the  Purchased Shares and Warrants are  referred to as the
“Purchased
Securities”).

     

    WHEREAS, the Company desires
to enter into this Agreement to issue and sell the Purchased Securities and the
Subscriber desires to purchase that number of Purchased Securities set forth on
the signature page hereto on the terms and conditions set forth
herein.

     

    AGREEMENT:

     

    NOW, THEREFORE, in
consideration of the mutual covenants and other agreements contained in this
Agreement, the Company and the Subscriber hereby agree as follows:

     

    1.           Purchase and Sale of
Purchased Securities.

     

    (a)           The Purchased
Shares.   Subject to the satisfaction or waiver of the
terms and conditions of this Agreement, on the Closing Date (as defined below),
each Subscriber shall purchase and the Company shall sell to each Subscriber the
Purchased Shares for the portion of the Purchase Price designated on the
signature pages hereto.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    (b)           Warrants. Upon the
following terms and conditions and for no additional consideration, each of the
Subscribers shall be issued Series A Warrants in the form attached hereto as
Exhibit A with the
Series A Warrants entitling the Subscribers to purchase one (1) share of the
Company’s Common Stock for every share purchased by the Subscriber for Purchased
Shares as set forth on the signature pages hereto. The Warrants shall expire one
hundred and twenty (120) days following the Closing Date, and the Warrants shall
have an initial exercise price of $3.50.

     

    2.           Closing.  The
issuance and sale of the Purchased Securities shall occur on the closing date
(the “Closing Date”),
which shall be the date that Subscriber funds representing the net amount due to
the Company from the Purchase Price of the Offering is transmitted by wire
transfer or otherwise to or for the benefit of the Company. The initial Closing
Date shall occur on or before December 22, 2010 (the “Initial Closing”) and shall
transmit to the Company gross proceeds of $750,000.  The consummation
of the transactions contemplated herein (the “Closing”) shall take place at
the offices of Anslow + Jaclin, LLP, 195 Route 9 South, Manalapan, NJ 07726 on
such date and time as the Subscribers and the Company may agree upon; provided, that all of
the conditions set forth in Section 11 hereof and applicable to the Closing
shall have been fulfilled or waived in accordance herewith. The Subscriber and
the Company acknowledge and agree that the Company may consummate the sale of
additional Purchased Securities to the Subscriber, on the terms set forth in
this Agreement and the other Transaction Documents as defined herein, at more
than one closing (each referred to herein as a “Closing”).

     

    3.           Subscriber Representations,
Warranties and Covenants.  The Subscriber hereby represents and
warrants to and agrees with the Company that:

    

    (a)           Organization and Standing of
the Subscriber.   If such
Subscriber is an entity, such Subscriber is
a corporation, partnership or other entity duly incorporated or organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or organization.

    

    (b)           Authorization and
Power.   Such
Subscriber has the requisite power and
authority to enter into and perform this Agreement and the other Transaction
Documents (as defined in Section
4(c)) and to purchase the Purchased Securities being
sold to it hereunder.  The execution, delivery and
performance of this Agreement and the other
Transaction Documents by such Subscriber and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate or partnership action, and no further consent or authorization of
such Subscriber or its Board of Directors, stockholders, partners, members, as
the case may be, is required.  This Agreement and the other
Transaction Documents have been duly authorized, executed and delivered by such
Subscriber and constitutes, or shall constitute when executed and
delivered, a valid and binding obligation of such Subscriber enforceable against
such Subscriber in accordance with the terms thereof.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    (c)           No Conflicts.   The
execution, delivery and performance of this Agreement and the other Transaction Documents and the
consummation by such Subscriber of the transactions contemplated hereby and
thereby or relating hereto do not and will not (i) result in a violation of such
Subscriber’s charter documents or bylaws or other organizational
documents or (ii) conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of any
agreement, indenture or instrument or obligation to which
such Subscriber is a party or by which its properties or assets are bound, or
result in a violation of any law, rule, or regulation, or any order, judgment or
decree of any court or governmental agency applicable to
such Subscriber or its properties (except for such conflicts, defaults and
violations as would not, individually or in the aggregate, have a material
adverse effect on such Subscriber).  Such Subscriber is not required
to obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency in order for it to execute,
deliver or perform any of its obligations under this Agreement and the other
Transaction Documents or to purchase the Purchased
Securities in accordance with the terms hereof, provided that for
purposes of the representation made in this sentence, such Subscriber is
assuming and relying upon the accuracy of the relevant representations and
agreements of the Company herein.

    

    (d)           Acquisition for
Investment. The Subscriber is acquiring the Purchased Securities solely
for its own account for the purpose of investment and not with a view to or for
resale in connection with a distribution.  The Subscriber does not
have a present intention to sell the Purchased Securities, nor a present
arrangement (whether or not legally binding) or intention to effect any
distribution of the Purchased Securities to or through any person or entity;
provided, however, that by
making the representations herein and subject to Section 3.2(h) below, the
Subscriber does not agree to hold the Purchased Securities for any minimum or
other specific term and reserves the right to dispose of the Purchased
Securities at any time in accordance with Federal and state securities laws
applicable to such disposition.  The Subscriber acknowledges that it
is able to bear the financial risks associated with an investment in the
Purchased Securities and that it has been given full access to such records of
the Company and the subsidiaries and to the officers of the Company and the
subsidiaries and received such information as it has deemed necessary or
appropriate to conduct its due diligence investigation and has sufficient
knowledge and experience in investing in companies similar to the Company in
terms of the Company’s stage of development so as to be able to evaluate the
risks and merits of its investment in the Company.

     

    (e)           Information on
Company.    Such
Subscriber has been furnished with or has had access to the EDGAR Website of the
Commission and to the Company’s Form 8-K filed on EDGAR on October 4, 2010 for
the fiscal year ended December 31, 2009, together with all other filings made
with the Commission available at the EDGAR website (hereinafter referred to
collectively as the “Reports”) and all
correspondence from the Commission to the Company including but not limited to
the Commission’s comment letters relating to the Company’s periodic filings with
the Commission whether available at the EDGAR website or not.  In
addition, such Subscriber has received in
writing from the Company such other information concerning its operations,
financial condition and other matters as such Subscriber has requested in writing,
identified thereon as OTHER WRITTEN INFORMATION (such other information is
collectively, the “Other
Written Information”), and considered all factors such Subscriber deems material in deciding on the
advisability of investing in the Purchased Securities.  Such
Subscriber has relied on the Reports and Other Written Information in making its
investment decision.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    (f)           Opportunities for Additional
Information.  The Subscriber acknowledges that the Subscriber
has had the opportunity to ask questions of and receive answers from, or obtain
additional information from, the executive officers of the Company concerning
the financial and other affairs of the Company.

    

    (g)           Information on
Subscriber.   Subscriber is, and will be on the Closing
Date, an “accredited
investor”, as such term is defined in Regulation D promulgated by the
Commission under the 1933 Act, is experienced in investments and business
matters, has made investments of a speculative nature and has purchased
securities of United States publicly-owned companies in private placements in
the past and, with its representatives, has such knowledge and experience in
financial, tax and other business matters as to enable such Subscriber to utilize the information made
available by the Company to evaluate the merits and risks of and to make an
informed investment decision with respect to the proposed purchase, which
represents a speculative investment.  Such Subscriber has the authority and is duly and
legally qualified to purchase and own the Purchased
Securities.  Such Subscriber is
able to bear the risk of such investment for an indefinite period and to afford
a complete loss thereof.  The information set forth on the signature
page hereto regarding such Subscriber is
accurate.

    

    (h)           Compliance with 1933
Act.   Such Subscriber understands and agrees that the
Purchased Securities have not been registered under the 1933 Act or any
applicable state securities laws, by reason of their issuance in a transaction
that does not require registration under the 1933 Act (based in part on the
accuracy of the representations and warranties of the Subscriber contained herein), and that such
Purchased Securities must be held indefinitely unless a subsequent disposition
is registered under the 1933 Act or any applicable state securities laws or is
exempt from such registration.  The Subscriber acknowledges that the
Subscriber is familiar with Rule 144 of the rules and regulations of the
Commission, as amended, promulgated pursuant to the Securities Act (“Rule 144”), and that such
person has been advised that Rule 144 permits resales only under certain
circumstances. The Subscriber understands that to the extent that Rule 144 is
not available, the Subscriber will be unable to sell any Purchased Securities
without either registration under the 1933 Act or the existence of another
exemption from such registration requirement. In any event, and subject to
compliance with applicable securities laws, the Subscriber may enter into lawful
hedging transactions in the course of hedging the position they assume and the
Subscriber may also enter into lawful short positions or other derivative
transactions relating to the Purchased Securities, and deliver the Purchased
Securities, to close out their short or other positions or otherwise settle
other transactions, or loan or pledge the Purchased Securities, to third parties
who in turn may dispose of these Purchased Securities.

    

    (i)           Purchased Securities
Legend.  The Purchased Securities shall bear the following or
similar legend:

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    “THE ISSUANCE AND SALE OF THE
PURCHASED SECURITIES REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR APPLICABLE STATE SECURITIES
LAWS.  THE PURCHASED SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE
PURCHASED SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE
HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER
SAID ACT OR  PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT, OR
OTHERWISE.  NOTWITHSTANDING THE
FOREGOING, THE PURCHASED
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A
BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
PURCHASED SECURITIES.”

     

     (j)           Communication of
Offer.  The offer to sell the Purchased Securities was directly
communicated to such Subscriber by the Company.  At no time was such
Subscriber presented with or solicited by any leaflet, newspaper or magazine
article, radio or television advertisement, or any other form of general
advertising or solicited or invited to attend a promotional meeting otherwise
than in connection and concurrently with such communicated offer.

    

    (k)           Restricted
Securities.   Such Subscriber understands that the
Purchased Securities have not been registered under the 1933 Act and such
Subscriber will not sell, offer to sell, assign, pledge, hypothecate or
otherwise transfer any of the Purchased Securities unless pursuant to an
effective registration statement under the 1933 Act, or unless an exemption from
registration is available.  Notwithstanding anything to the contrary
contained in this Agreement, such Subscriber may transfer (without restriction
and without the need for an opinion of counsel) the Purchased Securities to its
Affiliates (as defined below) provided that each such Affiliate is an
“accredited investor” under Regulation D and such Affiliate agrees to be bound
by the terms and conditions of this Agreement. For the purposes of this
Agreement, an “Affiliate” of any person or entity
means any other person or entity directly or indirectly controlling, controlled
by or under direct or indirect common control with such person or
entity.  Affiliate includes each Subsidiary of the Company.  For
purposes of this definition, “control” means the power to
direct the management and policies of such person or firm, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise.

    

    (l)           No Governmental
Review.   Such Subscriber understands that no United
States federal or state agency or any other governmental or state agency has
passed on or made recommendations or endorsement of the Purchased Securities or
the suitability of the investment in the Purchased Securities nor have such
authorities passed upon or endorsed the merits of the offering of the Purchased
Securities.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    (m)         Correctness of
Representations.  Such Subscriber represents that the foregoing
representations and warranties are true and correct as of the date hereof and,
unless such Subscriber otherwise notifies the Company prior to the Closing Date,
shall be true and correct as of the Closing Date.  The Subscriber
understands that the Purchased Securities are being offered and sold in reliance
on a transactional exemption from the registration requirement of Federal and
state securities laws and the Company is relying upon the truth and accuracy of
the representations, warranties, agreements, acknowledgments and understandings
of the Subscriber set forth herein in order to determine the applicability of
such exemptions and the suitability of the Subscriber to acquire the Purchased
Securities.

    

    (n)           Short Sales and
Confidentiality. Other than the transaction contemplated hereunder, the
Subscriber has not directly or indirectly, nor has any person acting on behalf
of or pursuant to any understanding with the Subscriber, executed any
disposition, including short sales (but not including the location and/or
reservation of borrowable shares of Common Stock), in the securities of the
Company during the period commencing from the time that the Subscriber first
received a term sheet from the Company or any other person setting forth the
material terms of the transactions contemplated hereunder until the date that
the transactions contemplated by this Agreement are first publicly announced as
described in Section 7(m).  The Subscriber covenants that until such
time as the transactions contemplated by this Agreement are publicly disclosed
by the Company as described in Section 7(m), the Subscriber will maintain the
confidentiality of all disclosures made to it in connection with this
transaction (including the existence and terms of this transaction). The
Subscriber understands and acknowledges that the Commission currently takes the
position that coverage of short sales of shares of the Common Stock
“against the box” prior to the effective date of the Registration Statement with
the Purchased Securities is a violation of Section 5 of the 1933 Act, as set
forth in Item 65, Section 5 under Section A, of the Manual of Publicly Available
Telephone Interpretations, dated July 1997, compiled by the Office of Chief
Counsel, Division of Corporation Finance. Notwithstanding the foregoing, the
Subscriber does not make any representation, warranty or covenant hereby that it
will not engage in short sales in the securities of the Company after the date
that the transactions contemplated by this Agreement are first publicly
announced as described in Section 7(m). Notwithstanding the foregoing, in the
case of a Subscriber that is a multi-managed investment vehicle whereby separate
portfolio managers manage separate portions of such Subscriber's assets and the
portfolio managers have no direct knowledge of the investment decisions made by
the portfolio managers managing other portions of such Subscriber's assets, the
covenant 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 Purchased Securities covered by this Agreement.

     

    4.           Company Representations and
Warranties.  The Company represents and warrants to and agrees
with each Subscriber that:

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    (a)           Due
Incorporation.  The Company is a corporation or other entity
duly incorporated or organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization and has the
requisite corporate power to own its properties and to carry on its business as
presently conducted.  For purposes of this Agreement, a “Material Adverse Effect” means any
material adverse effect on the business, operations, properties, or financial
condition of the Company and its Subsidiaries individually, or in the aggregate
and/or any condition, circumstance, or situation that would prohibit or
otherwise materially interfere with the ability of the Company to perform any of
its obligations under this Agreement in any material respect. For purposes
of this Agreement, “Subsidiary” means, with
respect to any entity at any date, any corporation, limited or general
partnership, limited liability company, trust, estate, association, joint
venture or other business entity of which more than 30% of (i) the
outstanding capital stock having (in the absence of contingencies) ordinary
voting power to elect a majority of the board of directors or other managing
body of such entity, (ii) in the case of a partnership or limited liability
company, the interest in the capital or profits of such partnership or limited
liability company or (iii) in the case of a trust, estate, association,
joint venture or other entity, the beneficial interest in such trust, estate,
association or other entity business is, at the time of determination, owned or
controlled directly or indirectly through one or more intermediaries, by
such entity.

     

    (b)           Outstanding
Stock.  All issued and outstanding shares of capital stock and
equity interests in the Company have been duly authorized and validly issued and
are fully paid and non-assessable.

     

    (c)           Authority;
Enforceability.  This Agreement, the Purchased
Securities, and any other agreements delivered together with this Agreement
or in connection herewith (collectively, the “Transaction Documents”) have
been duly authorized, executed and delivered by the Company and are valid and
binding agreements of the Company enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors’ rights generally and to general principles of equity.  The
Company has full corporate power and authority necessary to enter into and
deliver the Transaction Documents and to perform its obligations
thereunder.

     

    (d)           Consents.  No
consent, approval, authorization or order of any court, governmental agency or
body or arbitrator having jurisdiction over the Company, or any of its
Affiliates, the Over The Counter Bulletin Board (the “Bulletin Board”) or the
Company’s shareholders is required for the execution by the Company of the
Transaction Documents and compliance and performance by the Company of its
obligations under the Transaction Documents, including, without limitation, the
issuance and sale of the Purchased Securities.  The Transaction
Documents and the Company’s performance of its obligations thereunder have been
unanimously approved by the Company’s Board of Directors.  No consent,
approval, order or authorization of, or registration, qualification,
designation, declaration or filing with, any governmental authority in the
world, including without limitation, the United States, or elsewhere is required
by the Company or any Affiliate of the Company in connection with the
consummation of the transactions contemplated by this Agreement, except as would
not otherwise have a Material Adverse Effect or the consummation of any of the
other agreements, covenants or commitments of the Company or any Subsidiary
contemplated by the other Transaction Documents. Any such qualifications and
filings will, in the case of qualifications, be effective on the Closing and
will, in the case of filings, be made within the time prescribed by
law.

     

    (e)           No Violation or
Conflict.  Assuming the representations and warranties of the
Subscriber in Section 3 are true and correct, neither the issuance nor sale of
the Purchased Securities nor the performance of the Company’s obligations under
this Agreement and all other Transaction Documents entered into by the Company
relating thereto will:

    
      
         

      

      
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    (i)           violate,
conflict with, result in a breach of, or constitute a default (or an event which
with the giving of notice or the lapse of time or both would be reasonably
likely to constitute a default) under (A) the articles or certificate of
incorporation, charter or bylaws of the Company, (B) to the Company’s knowledge,
any decree, judgment, order, law, treaty, rule, regulation or determination
applicable to the Company of any court, governmental agency or body, or
arbitrator having jurisdiction over the Company or over the properties or assets
of the Company or any of its Affiliates, (C) the terms of any bond, debenture,
note or any other evidence of indebtedness, or any agreement, stock option or
other similar plan, indenture, lease, mortgage, deed of trust or other
instrument to which the Company or any of its Affiliates is a party, by which
the Company or any of its Affiliates is bound, or to which any of the properties
of the Company or any of its Affiliates is subject, or (D) the terms of any
“lock-up” or similar provision of any underwriting or similar agreement to which
the Company, or any of its Affiliates is a party except the violation, conflict,
breach, or default of which would not have a Material Adverse Effect;
or

     

    (ii)          result
in the creation or imposition of any lien, charge or encumbrance upon the
Purchased Securities or any of the assets of the Company or any of its
Affiliates except in favor of Subscriber as described herein; or

     

    (iii)         result
in the activation of any anti-dilution rights or a reset or repricing of any
debt, equity or security instrument of any creditor or equity holder of the
Company, or the holder of the right to receive any debt, equity or security
instrument of the Company nor result in the acceleration of the due date of any
obligation of the Company; or

     

    (iv)        result
in the triggering of any piggy-back or other registration rights of any person
or entity holding securities of the Company or having the right to receive
securities of the Company.

     

    (f)           The Purchased Securities.  The
Purchased Securities upon issuance:

     

    (i)           are,
or will be, free and clear of any security interests, liens, claims or other
encumbrances, subject only to restrictions upon transfer under the 1933 Act and
any applicable state securities laws;

    

    (ii)          have
been, or will be, duly and validly authorized and on the date of issuance of the
Purchased Securities, the Purchased Securities will be duly and validly issued,
fully paid and nonassessable or if resold in a transaction registered pursuant
to the 1933 Act and pursuant to an effective registration statement or exempt
from registration will be free trading, unrestricted and
unlegended;

     

    (iii)         will
not have been issued or sold in violation of any preemptive or other similar
rights of the holders of any securities of the Company or rights to acquire
securities of the Company; and

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    (iv)         will
not subject the holders thereof to personal liability by reason of being such
holders.

     

    (g)           Litigation.  There
is no pending or, to the best knowledge of the Company, threatened action, suit,
proceeding or investigation before any court, governmental agency or body, or
arbitrator having jurisdiction over the Company, or any of its Affiliates that
would affect the execution by the Company or the complete and timely performance
by the Company of its obligations under the Transaction
Documents.  Except as disclosed in the Reports, there is no pending
or, to the best knowledge of the Company, basis for or threatened action, suit,
proceeding or investigation before any court, governmental agency or body, or
arbitrator having jurisdiction over the Company, or any of its Affiliates which
litigation if adversely determined would have a Material Adverse
Effect.

     

    (h)           Defaults.  The
Company is not in material violation of its articles of incorporation or
bylaws.   The Company is (i) not in default under or in violation
of any other material agreement or instrument to which it is a party or by which
it or any of its properties are bound or affected, which default or violation
would have a Material Adverse Effect, (ii) not in default with respect to any
order of any court, arbitrator or governmental body or subject to or party to
any order of any court or governmental authority arising out of any action, suit
or proceeding under any statute or other law respecting antitrust, monopoly,
restraint of trade, unfair competition or similar matters which default
would have a Material Adverse Effect, or (iii) not in violation of any statute,
rule or regulation of any governmental authority which violation would have a
Material Adverse Effect.

     

    (i)           No General
Solicitation.  Neither the Company, nor any of its Affiliates,
nor to its knowledge, any person acting on its or their behalf, has engaged in
any form of general solicitation or general advertising (within the meaning of
Regulation D/Regulation S under the 1933 Act) in connection with the offer or
sale of the Purchased Securities.

    

    (j)           Reporting
Company.  The Company is a publicly-held company subject to
reporting obligations pursuant to Section 13 of the Securities Exchange Act of
1934, as amended (the “1934
Act”).  Pursuant to the provisions of the 1934 Act, the Company
has timely filed all reports and other materials required to be filed thereunder
with the Commission during the preceding twelve months.

    

    (k)           Listing.  The
Company’s common stock is quoted on the Bulletin Board currently under the
symbol “ASEN”.  The Company has not received any oral or written
notice that its common stock is not eligible nor will become ineligible for
quotation on the Bulletin Board nor that its common stock does not meet all
requirements for the continuation of such quotation.  The Company
satisfies all the requirements for the continued quotation of its common stock
on the Bulletin Board.

    

    (l)           Transfer
Agent.   The name, address, and telephone number, of the
Company transfer agent is Corporate Stock Transfer, Inc. 3200 Cherry Creek
Drive South, Suite 430, Denver, CO 80209 (303) 282-4800, Fax (303)
282-5800.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    (m)     
    Independent Nature of
Subscribers. The Company acknowledges that the obligations of each
Subscriber under the Transaction Documents are several and not joint with the
obligations of any other Subscriber, and no Subscriber shall be responsible in
any way for the performance of the obligations of any other Subscriber under the
Transaction Documents. The Company acknowledges that the decision of each
Subscriber to purchase securities pursuant to this Agreement has been made by
such Subscriber independently of any other Subscriber and independently of any
information, materials, statements or opinions as to the business, affairs,
operations, assets, properties, liabilities, results of operations, condition
(financial or otherwise) or prospects of the Company or of its Subsidiaries
which may have been made or given by any other Subscriber or by any agent or
employee of any other Subscriber, and no Subscriber or any of its agents or
employees shall have any liability to any Subscriber (or any other person)
relating to or arising from any such information, materials, statements or
opinions. The Company acknowledges that nothing contained herein, or in any
Transaction Documents, and no action taken by any Subscriber pursuant hereto or
thereto, shall be deemed to constitute the Subscribers as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Subscribers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the
Transaction Documents. The Company acknowledges that each Subscriber 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 Subscriber to
be joined as an additional party in any proceeding for such
purpose.

    

    (n)           PFIC.  Neither
the Company nor any of its Subsidiaries is or intends to become a “passive
foreign investment company” within the meaning of Section 1297 of the U.S.
Internal Revenue Code of 1986, as amended.

    

    (o)           Correctness of
Representations.  The Company represents that the foregoing
representations and warranties are true and correct as of the date hereof in all
material respects, and, unless the Company otherwise notifies the Subscribers
prior to the Closing Date, shall be true and correct in all material respects as
of the Closing Date; provided, that, if such representation or warranty is made
as of a different date, in which case such representation or warranty shall be
true as of such date.

     

    (p)           Survival.  The
foregoing representations and warranties shall survive for a period of two years
after the Closing Date.

     

    5.           Regulation D/Regulation S
Offering.  The offer and issuance of the Purchased Securities
to the Subscribers is being made pursuant to the exemption from the registration
provisions of the 1933 Act afforded by Section 4(2) or Section 4(6) of the 1933
Act or Rule 506 of Regulation D and/or Regulation S promulgated
thereunder.  

     

    6.           Covenants of the
Company.  The Company covenants and agrees with the Subscribers
as follows:

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    (a)           Listing/Quotation.  The
Company will maintain the quotation or listing of its common stock on the
American Stock Exchange, Nasdaq Capital Market, Nasdaq Global Market, Nasdaq
Global Select Market, Bulletin Board, or New York Stock Exchange (whichever of
the foregoing is at the time the principal trading exchange or market for the
common stock (the “Principal
Market”), and will comply in all respects with the Company’s reporting,
filing and other obligations under the bylaws or rules of the Principal Market,
as applicable, as long as any Purchased Securities are outstanding. The Company
will provide Subscribers with copies of all notices it receives notifying the
Company of the threatened and actual delisting of the common stock from any
Principal Market.  As of the date of this Agreement and the Closing
Date, the Bulletin Board is and will be the Principal Market.

     

    (b)           Market
Regulations.  If required, the Company shall notify the
Commission, the Principal Market and applicable state authorities, in accordance
with their requirements, of the transactions contemplated by this Agreement, and
shall take all other necessary action and proceedings as may be required and
permitted by applicable law, rule and regulation, for the legal and valid
issuance of the Purchased Securities to the Subscribers and promptly provide
copies thereof to the Subscribers.

     

    (c)           Use of
Proceeds.   The proceeds of the Offering will be employed
by the Company for expenses of the Offering, and general working
capital.  The Purchase Price may not and will not be used for accrued
and unpaid officer and director salaries, payment of financing related debt,
redemption of outstanding notes or equity instruments of the Company nor
non-trade obligations outstanding on the Closing Date.

     

    (d)           Books and
Records.  From the date of this Agreement and until the End
Date, the Company will keep true records and books of account in which full,
true and correct entries will be made of all dealings or transactions in
relation to its business and affairs in accordance with generally accepted
accounting principles applied on a consistent basis.

     

    (e)           Governmental
Authorities.   From the date of this Agreement and until
the End Date, the Company shall duly observe and conform in all material
respects to all valid requirements of governmental authorities relating to the
conduct of its business or to its properties or assets.

     

    (f)           Non-Public
Information.  The Company covenants and agrees that except for
the Reports, Other Written Information and schedules and exhibits to this
Agreement and the Transaction Documents, which information the Company
undertakes to publicly disclose on the Form 8-K described in Section 7(k) above
and except for the information as to currently contemplated and/or negotiated
financing transactions, neither it nor any other person acting on its behalf
will at any time provide any Subscriber or its agents or counsel with any
information that the Company believes constitutes material non-public
information, unless prior thereto such Subscriber shall have agreed in writing
to accept such information.  The Company understands and confirms that
each Subscriber shall be relying on the foregoing representations in effecting
transactions in securities of the Company.

     

    7.           Covenants of the Company
Regarding Indemnification.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    (a)           The
Company agrees to indemnify, hold harmless, reimburse and defend the
Subscribers, the Subscribers’ officers, directors, agents, Affiliates, members,
managers, control persons, and principal shareholders, against any claim, cost,
expense, liability, obligation, loss or damage (including reasonable legal fees)
of any nature, incurred by or imposed upon the Subscribers or any such person
which results, arises out of or is based upon (i) any material misrepresentation
by the Company or breach of any representation or warranty by the Company in
this Agreement or in any Exhibits or Schedules attached hereto in any
Transaction Documents, or (ii) after any applicable notice and/or cure periods,
any breach or default in performance by the Company of any material covenant or
undertaking to be performed by the Company hereunder, or any other material
agreement entered into by the Company and Subscribers relating
hereto.

     

    (b)           The
Subscribers agree to indemnify, hold harmless, reimburse and defend
the Company, the Company’s officers, directors, agents, Affiliates,
members, managers, control persons, and principal shareholders, against any
claim, cost, expense, liability, obligation, loss or damage (including
reasonable legal fees) of any nature, incurred by or imposed upon them or any
such person which results, arises out of or is based upon any material
misrepresentation by the Subscribers in this Agreement or in any Exhibits or
Schedules attached hereto or in any Transaction
Documents.  Notwithstanding the forgoing, in no event shall the
liability of the Subscriber or permitted successor hereunder, or under any
Transaction Documents or other agreement delivered in connection
herewith, exceed the Purchase Price paid by such Subscriber.

     

    (c)           The
procedures set forth in Section 9(f) shall apply to the indemnification set
forth in Section 8.

     

    8.           Closing
Conditions.

     

    (a)           The
obligation hereunder of the Subscriber to acquire and pay for the Purchased
Securities is subject to the satisfaction or waiver, at or before the Closing,
of each of the conditions set forth below. These conditions are for the
Subscriber’s sole benefit and may be waived by the Subscriber at any time in its
sole discretion.

     

    (i)           The
representations and warranties of the Company contained in this Agreement shall
have been true and correct on the date of this Agreement and shall be true and
correct on the Closing Date as if given on and as of the Closing Date (except
for representations given as of a specific date, which representations shall be
true and correct as of such date), and on or before the Closing Date the Company
shall have performed all covenants and agreements of the Company contained
herein or in any of the other Transaction Documents required to be performed by
the Company on or before the Closing Date;

    

    (ii)          The
Company shall have delivered to the Escrow Agent a certificate, dated the
Closing Date, duly executed by its Chief Executive Officer, to the effect set
forth in subparagraph (i) of this Section 8(a);

    

    (iii)         The
Transaction Documents have been duly executed and delivered by the Company to
the Escrow Agent.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     (b)         The
obligation hereunder of the Company to issue and sell the Purchased Securities
to the Purchaser is subject to the satisfaction or waiver, at or before the
Closing, of each of the conditions set forth below. These conditions are for the
Company’s sole benefit and may be waived by the Company at any time in its sole
discretion.

    

    (i)           
 The representations and warranties of the Subscriber in this Agreement and
each of the other Transaction Documents to which the Subscriber is a party shall
be true and correct in all material respects as of the date when made and as of
the Closing Date as though made at that time, except for representations and
warranties that are expressly made as of a particular date, which shall be true
and correct in all material respects as of such date;

    

    (ii)          
 The initial Closing Date shall have occurred on or before December 22,
2010 and shall have transmitted to the Company gross proceeds of $750,000;
and

    

    (iv)          The
Transaction Documents to which the Subscriber is a party have been duly executed
and delivered by the Subscriber to the Escrow Agent.

    

    9.           Miscellaneous.

     

    (a)           Notices.  All
notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in the mail,
registered or certified, return receipt requested, postage prepaid, (iii)
delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice.  Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be:

    

    If to the
Company, to:

    

    American
Standard Energy Corp.

    4800
North Scottsdale Road

    Suite
1400

    Scottsdale,
AZ 85251

    (480)
371-1929

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    

    If to the
Subscribers:

    To each
of the addresses and facsimile numbers listed on the signature pages of this
Agreement

     

    (b) Entire Agreement;
Amendment. This Agreement
and the other Transaction Documents contain the entire understanding and
agreement of the parties with respect to the matters covered hereby and, except
as specifically set forth herein or in the Transaction Documents, neither the
Company nor any of the Subscribers makes any representations, warranty, covenant
or undertaking with respect to such matters and they supersede all prior
understandings and agreements with respect to said subject matter, all of which
are merged herein. No provision of this Agreement nor any of the Transaction
Documents may be waived or amended other than by a written instrument signed by
the Company and the holders of at least fifty percent (50%) of the total shares
of common stock purchased in the Offering and then outstanding (the “Majority Holders”), and no
provision hereof may be waived other than by a written instrument signed by the
party against whom enforcement of any such waiver is sought. No such amendment
shall be effective to the extent that it applies to less than all of the holders
of the Purchased Shares then outstanding. No consideration shall be offered or
paid to any person to amend or consent to a waiver or modification of any
provision of any of the Transaction Documents unless the same consideration is
also offered to all of the parties to the Transaction Documents or holders of
Purchased Shares, as the case may be.

     

     (c)         Counterparts/Execution.  This
Agreement may be executed in any number of counterparts and by the different
signatories hereto on separate counterparts, each of which, when so executed,
shall be deemed an original, but all such counterparts shall constitute but one
and the same instrument.  This Agreement may be executed by facsimile
transmission, PDF, electronic signature or other similar electronic means with
the same force and effect as if such signature page were an original
thereof.

     

    (d)         Law Governing this
Agreement.  This Agreement shall be governed by and construed
in accordance with the laws of the State of Arizona without regard to principles
of conflicts of laws. Any action brought by either party against the other
concerning the transactions contemplated by this Agreement shall be brought only
in the state courts of Arizona or in the federal courts located in the state and
county of Arizona.  The parties to this Agreement hereby irrevocably
waive any objection to jurisdiction and venue of any action instituted hereunder
and shall not assert any defense based on lack of jurisdiction or venue or based
upon forum non
conveniens.  The parties executing this Agreement
and other agreements referred to herein or delivered in connection herewith on
behalf of the Company agree to submit to the in personam jurisdiction of such
courts and hereby irrevocably waive trial by jury.  The
prevailing party shall be entitled to recover from the other party its
reasonable attorney’s fees and costs.  In the event that any provision
of this Agreement or any other agreement delivered in connection herewith is
invalid or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of
law.  Any such provision which may prove invalid or unenforceable
under any law shall not affect the validity or enforceability of any other
provision of any agreement.  Each party hereby irrevocably waives
personal service of process and consents to process being served in any suit,
action or proceeding in connection with this Agreement or any other Transaction
Documents 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.

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    (e)           Specific Enforcement,
Consent to
Jurisdiction.  The Company and Subscribers acknowledge and
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached.  It is accordingly agreed
that the parties shall be entitled to seek an injunction or injunctions to
prevent or cure breaches of the provisions of this Agreement and to enforce
specifically the terms and provisions hereof, this being in addition to any
other remedy to which any of them may be entitled by law or
equity.  Subject to Section 13(d) hereof, the Company and the
Subscribers hereby irrevocably waive, and agree not to assert in any such suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction in New York of such court, that the suit, action or proceeding is
brought in an inconvenient forum or that the venue of the suit, action or
proceeding is improper.  Nothing in this Section shall affect or limit
any right to serve process in any other manner permitted by law.

     

    (f)           Damages.   In
the event the Subscriber is entitled to receive any liquidated damages pursuant
to the Transactions Documents, the Subscriber may elect to receive the greater
of actual damages or such liquidated damages.

     

    (g)           Maximum
Payments.   Nothing contained herein or in any document
referred to herein or delivered in connection herewith shall be deemed to
establish or require the payment of a rate of interest or other charges in
excess of the maximum permitted by applicable law.  In the event that
the rate of interest or dividends required to be paid or other charges hereunder
exceed the maximum permitted by such law, any payments in excess of such maximum
shall be credited against amounts owed by the Company to the Subscriber and thus
refunded to the Company.

     

    (h)           Calendar
Days.   All references to “days” in the Transaction
Documents shall mean calendar days unless otherwise stated.  The terms
“business days” and “trading days” shall mean days that the New York Stock
Exchange is open for trading for three or more hours.  Time periods
shall be determined as if the relevant action, calculation or time period were
occurring in New York City.  Any deadline that falls on a non-business
day in any of the Transaction Documents shall be automatically extended to
the next business day and interest, if any, shall be calculated and payable
through such extended period.

     

    (i)           Captions: Certain
Definitions.  The captions of the various sections and
paragraphs of this Agreement have been inserted only for the purposes of
convenience; such captions are not a part of this Agreement and shall not be
deemed in any manner to modify, explain, enlarge or restrict any of the
provisions of this Agreement.  As used in this Agreement the term
“person” shall mean and
include an individual, a partnership, a joint venture, a corporation, a limited
liability company, a trust, an unincorporated organization and a government or
any department or agency thereof.

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    (j)           Severability.  In
the event that any term or provision of this Agreement shall be finally
determined to be superseded, invalid, illegal or otherwise unenforceable
pursuant to applicable law by an authority having jurisdiction and venue, that
determination shall not impair or otherwise affect the validity, legality or
enforceability: (i) by or before that authority of the remaining terms and
provisions of this Agreement, which shall be enforced as if the unenforceable
term or provision were deleted, or (ii) by or before any other authority of any
of the terms and provisions of this Agreement.

     

    [Signature
Pages Follow]

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    SIGNATURE PAGE TO
SUBSCRIPTION AGREEMENT

    

    Please
acknowledge your acceptance of the foregoing Subscription Agreement with
American Standard Energy Corp. by signing and returning a copy to the Company
whereupon it shall become a binding agreement.

    

    NUMBER
OF SHARES         230,770          x    $3.25 =
     $750,000          (the
“Purchase
Price”)

    

    
      
        	
                  

              	 
      	
                  

              
	
                Signature

              	 
      	
                Signature
      (if purchasing jointly)

              
	 
      	 
      	 
      
	
                  

              	 
      	
                  

              
	
                Name
      Typed or Printed

              	 
      	
                Name
      Typed or Printed

              
	 
      	 
      	 
      
	
                  

              	 
      	
                  

              
	
                Entity
      Name

              	 
      	
                Entity
      Name

              
	 
      	 
      	 
      
	
                  

              	 
      	
                  

              
	
                Address

              	 
      	
                Address

              
	 
      	 
      	 
      
	
                  

              	 
      	
                  

              
	
                City,
      State and Zip Code

              	 
      	
                City,
      State and Zip Code

              
	 
      	 
      	 
      
	
                  

              	 
      	
                  

              
	
                Telephone
      - Business

              	 
      	
                Telephone
      - Business

              
	 
      	 
      	 
      
	
                  

              	 
      	
                  

              
	
                Telephone
      – Residence

              	 
      	
                Telephone
      – Residence

              
	 
      	 
      	 
      
	
                  

              	 
      	
                  

              
	
                Facsimile
      – Business

              	 
      	
                Facsimile
      - Business

              
	 
      	 
      	 
      
	
                  

              	 
      	
                  

              
	
                Facsimile
      – Residence

              	 
      	
                Facsimile
      – Residence

              
	 
      	 
      	 
      
	
                  

              	 
      	
                  

              
	
                Tax
      ID # or Social Security #

              	
                  

              	
                Tax
      ID # or Social Security #

              

      

    

    

    Name in
which securities should be issued:                                                                                                

     

    Dated: 
December 22, 2010

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    This
Subscription Agreement is agreed to and accepted as of December 22,
2010.

     

    
      
        
          
            	
                    AMERICAN
      STANDARD ENERGY

                  
	
                    CORP.

                  
	 
      	 
      
	
                    By:

                  	
                      

                  
	 
      	
                    Name:

                  
	 
      	
                    Title:

                  

          

        

      

    

    
      
         

      

      
        18

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