Document:

ex10_2.htm

    Exhibit
      10.2

     

    

      COLLATERAL
        ASSIGNMENT
        OF

      ESCROW
        AGREEMENT AND ESCROW FUNDS

      

      

      

      
        	
                DATE:

              	
                October
                  9, 2008 

              

      

      

      
        	
                DEBTOR:

              	
                America
                  West Resources,
                  Inc., a Nevada corporation 

              

      

      

      
        	
                LENDERS:

              	
                Denly
                  ACI Partners,
                  Ltd., a Texas limited partnership (the "Partnership"),
                  and Dennis C. von
                  Waaden,
                  Co-Trustee ofThe
                  von Waaden 2004 Revocable Trust and Sally A. von Waaden, Co-Trustee
                  ofThe von
                  Waaden
                  2004 Revocable Trust (the "Trust")
                  

              

      

      

      
        	
                NOTE:

              	
                Those
                  two certain Secured Promissory Notes dated October 7, 2008, in
                  the
                  aggregate amounts of $2,800,000.00 made payable to the order of
                  Lenders
                  ($1,866,666.66 to the Partnership and $933,333.33 to the Trust)
                  from
                  Debtor, as the same may be renewed, extended, modified or rearranged
                  from
                  time to time. 

              

      

      

      LOAN
        AGREEMENT:  The Loan
        Agreement dated October 9, 2008, executed by Debtor and Lenders, as the same
        may
        be amended, modified, restated or replaced from time to time.

      

      COLLATERAL:  All
        of Debtor=s
        right, title, interest, claim and demand (but not Debtor=s
        duties or obligations) in and to the following described contracts and all
        payments (direct or indirect, whether in cash or otherwise), distributions,
        and
        rights to payment of every kind under and by virtue of (i) that certain Escrow
        and Account Control Agreement dated as of October 9, 2008, by and among the
        Debtor; and Wells Fargo Bank,
        National Association (as Escrow Agent), as now or hereafter amended or
        modified (the “Escrow
        Agreement”), and (ii) all accounts and general intangibles consisting of,
        relating to or otherwise arising out of the Escrow Agreement and Debtor’s right,
        title, interest, or claim (but not Debtor’s duties or obligations) in and to the
        Escrow Property (as defined therein) and all payments, distributions, and
        rights
        to payment of every kind, under and by virtue of the Escrow
        Agreement.

      

      PROCEEDS:  Any
        and all proceeds of the Collateral, as the term “proceeds” is defined in the
        Chapter 9 of the Texas Business and Commerce Code as now or hereafter adopted
        or
        amended (the "Texas
        UCC"), including without limitation all accounts, general intangibles,
        instruments, documents, moneys, insurance, chattel paper, income and other
        property, benefits or rights of whatever kind or nature arising from,
        attributable to, or accruing from any and all sales, leases, or other
        dispositions of any or all of the Collateral.

      

      1.           
        Agreement.
        Subject to the terms and conditions of this Assignment, in consideration
        of the
        sum of Ten and No/100 Dollars ($10.00) and other good and valuable
        consideration, the receipt and sufficiency of which Debtor acknowledges,
        Debtor
        hereby grants, assigns, transfers, and conveys, to Lenders, their successors
        and
        assigns, and grants to Lenders, their successors and assigns as security
        for the
        Obligations (as defined below) the Escrow Agreement and all other Collateral,
        and Debtor hereby grants to Lenders, as security for the Obligations, a security
        interest in and to the Collateral and Proceeds and all powers, benefits,
        right,
        title, and interest accruing and to accrue, and all revenues, moneys, fees,
        commissions, profits, payments, and other sums payable and to be payable
        to
        Debtor and to which Debtor is or may hereafter become entitled to by virtue
        of
        the Collateral.

      

      2.           
        Secured
        Obligations.  This security interest is granted to Lenders to
        secure the following (the “Obligations”):

      

      (a)           
        Payment of the principal sum, interest and indebtedness evidenced by the
        Notes;

      

      (b)           
        Payment of all other sums with interest thereon becoming due and payable
        to
        Lenders under the provisions of this Assignment or the Notes; and

      

      (c)           
        Performance and discharge of each and every obligation, covenant and agreement
        of Debtor contained in this Assignment, the Notes, the Loan Agreement, as
        amended from time to time, and any and all other Loan Documents (as that
        term is
        defined in the Loan Agreement).

      

      3.           
        Debtor’s
        Representations and Warranties.  Debtor represents and warrants
        to Lenders and covenants as follows:

      

      (a)           
        The execution, delivery and performance of this Assignment does not require
        the
        consent or approval of any governmental body or other regulatory authority
        and
        are not in contravention of, or in conflict with, any law or regulation or
        any
        term or provision of the Escrow Agreement. This Assignment is a valid, binding
        and legally enforceable obligation of Debtor in accordance with its terms
        except
        only as enforceability may be affected or limited by creditors’ rights,
        legislation and court decisions of general application.

      

      (b)           
        The execution and delivery of this Assignment is not, and the performance
        of
        this Assignment will not be, in contravention of, or in conflict with, any
        agreement, indenture or undertaking to which Debtor is a party or by which
        Debtor or any of its property is or may be bound or affected, and do not
        and
        will not cause any security interest, lien or other encumbrance to be created
        or
        imposed or accelerated upon or in connection with any such
        property.

      

      (c)           
        Except for Lenders’ security interest therein (which Debtor has authority to
        grant):  (i) Debtor has not previously assigned, transferred,
        conveyed, sold, pledged or hypothecated any part of the Collateral; (ii)
        Debtor
        is, and as to any Collateral acquired after the date hereof, Debtor shall
        and
        will be the owner of all the Collateral, free from any liens, security
        interests, encumbrances or other right, title or interest of any other person,
        firm or corporation; and (iii) Debtor shall defend the Collateral against
        all
        claims and demands of all persons at any time claiming the same or interest
        therein adverse to Lenders.

      

      (d)           
        No setoff or counterclaim to any money due or to become due to Debtor by
        virtue
        of the Collateral exists as of the date of this Assignment, and Debtor has
        not
        made any agreement pursuant to which any deduction or discount may be claimed
        on
        the Collateral, except as embodied in the express terms of the Escrow Agreement;
        and

      

      (e)           
        There is no financing statement (or other evidence of lien or security interest)
        now on file in any public office covering any of the Collateral in which
        Debtor
        is named or signs as Debtor, and so long as any amount remains unpaid on
        the
        Obligations, Debtor will not execute and there will not be on file in any
        public
        office any such financing statement or statements (or other evidence of lien
        or
        security interest) except the Financing Statement filed or to be filed in
        respect of and for the security interest to Lenders granted or provided for
        in
        this Assignment or any other security agreement or security agreements by
        and
        between Debtor and Lenders.

      

      (f)           
        The Escrow Agreement is presently in full force and effect and binding upon
        all
        the parties thereto. No defaults or breaches have occurred in the Escrow
        Agreement, including but not limited to such defaults or breaches which would
        result in the reduction or termination of Debtor’s interest or rights to
        payments and proceeds under the Escrow Agreement.

      

      4.           
        Debtor’s
        Agreements.  Debtor agrees as follows:

      

      (a)           
        To do, make, procure, execute and deliver all acts, things, writings and
        assurances as Lenders may at any time reasonably request, to protect, assure
        or
        enforce its interests, rights and remedies pursuant to this
        Assignment.

      

      (b)           
        At any time while a Default exists or after the occurrence of an Event of
        Default (as those terms are defined in , upon Lenders’ request, to notify the
        Escrow Agent in writing of the fact of this Assignment and direct such parties
        to make payment direct to Lenders of any monies, accounts and general
        intangibles included in the Collateral; provided that the foregoing shall
        in no
        manner impair Lenders’ right to notify such obligors as elsewhere herein
        provided.

      

      (d)           
        At any time while a Default exists or after the occurrence of any Event of
        Default, to apply all proceeds of the Collateral, including without limitation
        the Proceeds received by Lenders, on the Obligations, in any order of preference
        which Lenders, in their discretion, choose, whether or not the Obligations
        shall
        have by their terms matured, such application to be made at such intervals
        as
        Lenders may determine.

      

      (e)           
        To authorize, and Debtor does hereby authorize, Lenders to contact directly
        any
        party to the Escrow Agreement to verify information furnished by
        Debtor.

      

      (f)           
        To at all times perform or cause to be performed each and every obligation
        and
        duty imposed upon Debtor by the Escrow Agreement and applicable law, and
        to not
        do any act or not omit to do any act which would constitute a breach of,
        default
        under or noncompliance with the Escrow Agreement and applicable
        law.

      

      (g)           
        Not to execute any amendment or modification of the Escrow Agreement or
        otherwise change or alter any of the terms and provisions of the Escrow
        Agreement without Lenders’ prior written consent.

      

      (h)           
        To promptly notify Lenders of the occurrence of any event which constitutes
        a
        breach of, default under, or noncompliance with, or which with the passage
        of
        time, notice, or both, will constitute a breach of, default under, or
        noncompliance with any of the terms and provisions of the Escrow
        Agreement.

      

      (i)           
        To send, with reasonable promptness, to Lenders copies of any and all notices
        sent or received by Debtor under or pursuant to the Escrow Agreement or in
        connection with Debtor’s interest in and under the Escrow
        Agreement.

      

      (j)           
        Not to sell, assign, transfer, encumber, pledge, hypothecate or otherwise
        dispose of any or all of the Collateral or the Proceeds without Lenders=
        prior written consent.

      

      5.           
        Events
        of
        Default.  Debtor shall be in default under this Assignment upon
        the happening of any one or more of the Events of Default (as that term is
        defined in the Loan Agreement).

      

      
        	
                 

              	
                6.

              	
                Lenders=s
                  Rights and Remedies. 

              

      

      

      (a)           
        Debtor hereby irrevocably appoints each Lender as Debtor’s true and lawful agent
        and attorney-in-fact, with full power of substitution, in Lenders' own names
        or
        in the name of Debtor, for Lenders’ sole use and benefit, but at Debtor’s cost
        and expense, to exercise, upon the occurrence of an Event of Default, all
        or any
        of the following powers and rights with respect to the Collateral (without
        any
        obligation on the part of Lenders to exercise any of the following powers
        and
        rights): (1) to demand, receive, collect, sue and give acquittance for, settle,
        compromise, compound, prosecute or defend any action or proceeding with respect
        to the Collateral; (2) in the respective Lender’s name, or in Debtor’s name, to
        endorse, collect, deposit and receipt for any checks, drafts or other means
        of
        payment thereof received from any source; (3) without limiting the foregoing,
        to
        receive, collect, and demand payment of all sums due and payable to Debtor
        on
        and under the Collateral, including without limitation all Proceeds, and
        to
        apply any and all such sums received and collected against the Obligations;
        (4)
        to notify any party to the Escrow Agreement with respect to any Proceeds
        to make
        payments thereon directly to Lenders; (5) to extend the time of payment of
        any
        or all of the Proceeds and to grant waivers and make any allowance or adjustment
        with reference to the Collateral; and (6) to exercise, enforce, enjoy, carry
        out, receive, and/or perform any and all rights, powers, duties, benefits,
        obligations and remedies of Debtor with respect to and arising under the
        Collateral; provided, however, Lenders=
        exercise of or Lenders’ failure to exercise any such authority shall in no
        manner affect Debtor’s liability hereunder or under the Obligations, and
        provided, further, that Lenders shall be under no obligation or duty to exercise
        any of the powers hereby conferred upon them and shall be without liability
        for
        any act or failure to act in connection with the collection of, or the
        preservation of any rights under, any of the Collateral.  The agency
        and authority hereby granted and created is an agency coupled with an
        interest.  Lenders shall not be bound to take any steps necessary to
        preserve rights in any of the Collateral against prior parties.

      

      (b)           
        Upon the occurrence of an Event of Default and at any time thereafter:
        (1) Lenders shall have the rights and remedies provided in the Loan
        Agreement, (2) Lenders shall have the rights and remedies provides in the
        Texas
        UCC, and (3) Lenders may notify any party to the Escrow Agreement that Lenders
        are to receive, collect, and be paid any and all Escrow Property.

      

      (c)           
        All recitals in any instrument of assignment or any other instrument executed
        by
        Lenders incident to the sale, transfer, assignment or other disposition or
        utilization of the Collateral or any part thereof hereunder shall be full
        proof
        of the matters stated therein and no other proof shall be requisite to establish
        full legal propriety of the sale or other action taken by Lenders or of any
        fact, condition or thing incident thereto, and all prerequisites of such
        sale or
        other action shall be presumed conclusively to have been performed or to
        have
        occurred.

      

      (d)           
        Notwithstanding a foreclosure sale, transfer, assignment or other disposition
        of
        or upon any of the Collateral hereunder or exercise of any other remedy by
        Lenders in connection with an Event of Default, Debtor shall thereby not
        be
        subrogated to any of Lenders’ rights against the Collateral or any other
        security for the Obligations, nor shall Debtor be deemed to be the owner
        of any
        interest in any of the Obligations, nor shall Debtor exercise any rights
        or
        remedies with respect to the Collateral or any other security for the
        Obligations or any of them until all Obligations have been paid to Lenders
        and
        fully performed and discharged.

      

      (e)           
        Debtor waives demand, notice, protest, and all demands and notices of any
        action
        taken by Lenders under this Assignment except as is specifically elsewhere
        provided herein or in the Loan Documents and except as to notices which are
        required (and which may not be waived under the provisions of the Texas UCC),
        and any indulgence by Lenders, substitution for, exchange of, or release
        of the
        Collateral is hereby assented to and consented to.

      

      (f)           
        Lenders shall not be responsible in any way for any depreciation or diminution
        in the value or price of the Collateral, nor shall Lenders have any duty
        or
        responsibility whatsoever to enforce collection of the Collateral by legal
        proceedings or otherwise, the sole duty of Lenders being to receive collections,
        remittances and payments on the Collateral if and when tendered to Lenders,
        and
        at Lenders’ option to apply the amount or amounts so received, after deduction
        of any collection costs incurred, as payment upon the Obligations of Lenders’
selection and designation.

      

      7.           
        Indemnity.  THE
        INDEMNITY PROVISIONS CONTAINED IN THE LOAN AGREEMENT SHALL GOVERN THIS
        ASSIGNMENT. The indemnification provided for in this Section shall
        survive the termination of this Assignment and shall extend and continue
        to
        benefit each individual or entity who is or has at any time been an Indemnitee
        (as that term is defined in the Loan Agreement).

      

      8.           
        General.  Debtor
        and Lenders agree as follows:

      

      (a)           
        This Assignment and the security interests granted and created by this
        Assignment shall not be affected by, affect, or impair any other security
        or
        liens now or hereafter taken for or securing the Obligations or any part
        thereof, and no security hereafter taken for the Obligations or any part
        thereof
        shall in any manner be affected by, affect, or impair the security interests
        granted and created by this Assignment. Any extensions may be made of the
        Notes
        or any other Obligations or any part thereof without affecting the priority
        of
        the security interest created by this Assignment or its validity with reference
        to any third party. Debtor agrees that all such present and future security
        shall be cumulative security and that Lenders may enforce its rights against
        any
        such security, as Lenders may elect, without waiving the other. The holder
        of
        the Indebtedness shall not be limited by any election of remedies if he chooses
        to foreclose this security interest created by this Assignment by
        suit.

      

      (b)           
        Termination.  It
        is contemplated by the parties hereto that from time to time there may be
        no
        outstanding indebtedness under the Notes, but notwithstanding such occurrences,
        this Assignment shall remain valid and shall be in full force and effect
        as to
        subsequent or previous outstanding Obligations.  Upon (i) the
        satisfaction in full of the Notes and all other Obligations, (ii) the
        termination or expiration of any commitment of Lenders to extend credit to
        Debtor, (iii) written request for the termination hereof delivered by Debtor
        to
        Lenders, and (iv) written release or termination delivered by Lenders to
        Debtor,
        this Assignment and the security interests created hereby shall
        terminate.  Upon termination of this Assignment and Debtor’s written
        request, Lenders will, at Debtor’s sole cost and expense, return to Debtor such
        of the Collateral as shall not have been sold or otherwise disposed of or
        applied pursuant to the terms hereof and execute and deliver to Debtor such
        documents as Debtor shall reasonably request to evidence such
        termination.

      

      (c)           
        Lenders are not, by the entering into this Assignment or accepting the
        assignment of and security interest in the Collateral and Proceeds, assuming
        or
        agreeing to assume any obligation or liabilities on the part of Debtor under
        the
        Escrow Agreement, nor shall any subsequent foreclosure on the part of Lenders
        of
        the security interest created hereby constitute, or be construed to be, an
        assumption by Lenders of any obligation or liabilities on the part of Debtor
        under the Escrow Agreement, whether now existing or hereafter
        arising.

      

      (e)           
        Lenders’ remedies hereunder are cumulative, and the exercise of any one or more
        of the remedies provided for herein shall not be construed as a waiver of
        any of
        Lenders=
        other remedies.

      

      (f)           
        No indulgence by Lenders, or waiver of compliance with any provision hereof,
        shall be construed as a waiver of Lenders’ right to subsequently require strict
        performance hereof by Debtor.

      

      (i)           
        THIS ASSIGNMENT HAS BEEN MADE IN, AND THE SECURITY INTEREST GRANTED HEREBY
        IS
        GRANTED IN, AND BOTH SHALL BE GOVERNED BY, THE LAWS OF THE STATE OF TEXAS
        IN ALL
        RESPECTS, INCLUDING WITHOUT LIMITATION, MATTERS OF CONSTRUCTION, VALIDITY,
        ENFORCEMENT AND PERFORMANCE. This Assignment may not be modified, altered
        or
        amended except in writing duly signed by Lenders and by Debtor. Except as
        the
        context may otherwise require, any term used herein and defined in the Texas
        UCC
        shall have the meaning given therein. If any provision of this Assignment
        is
        rendered or declared illegal or unenforceable by reason of any existing or
        subsequently enacted statute, rule or regulation, or by order of or judgment
        of
        a court, any and all other terms and provisions of this Assignment shall
        remain
        in full force and effect as stated and set forth herein.

      

      (j)           
        All notices, demands, requests and other communications required or permitted
        hereunder shall be given in accordance with the applicable provisions of
        the
        Loan Agreement.

      

      (k)           
        This Assignment may be executed in any number of counterparts as may be
        convenient or necessary, and it shall not be necessary that the signatures
        of
        all parties hereto or thereto be contained on any one counterpart hereof
        or
        thereof. Additionally, (a) the signature pages taken from separate individually
        executed counterparts of this Assignment may be combined to form multiple
        fully
        executed counterparts and (b) a facsimile transmission shall be deemed to
        be an
        original signature. All executed counterparts of this Assignment shall be
        deemed
        to be originals, but all such counterparts taken together or collectively,
        as
        the case may be, shall constitute one and the same agreement.

      

      (l)           
        This Assignment constitutes the entire agreement and understanding between
        the
        parties and supersedes all prior agreements and understandings, if any, between
        them concerning the subject matter hereof, and there are no covenants,
        agreements, promises, terms, provisions, conditions, undertakings or
        understandings, either oral or written, between them concerning the subject
        matter of this Assignment, except those which are expressly set forth in
        this
        Assignment.

      

      (m)           
        This Assignment is one of the Loan Documents, as that term is defined in
        the
        Loan Agreement.

      

      

      

      {SIGNATURE
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            983328v2

          

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      COUNTERPART
        SIGNATURE PAGE FOR ATTACHMENT TO COLLATERAL ASSIGNMENT OF ESCROW AGREEMENT
        AND
        ESCROW FUNDS AMONG DENLY ACI
        PARTNERS, LTD., A TEXAS LIMITED PARTNERSHIP, AND DENNIS C. VON WAADEN,
        AND SALLY A.
        VON WAADEN, AS CO-TRUSTEES OFTHE VON WAADEN 2004
        REVOCABLE
        TRUST (collectively, THE "LENDERS"),
        AND AMERICA WEST RESOURCES,
        INC.,
        A NEVADA CORPORATION (THE "DEBTOR").

       

      

      EXECUTED
        as of the date first stated above.

      

      Debtor:

      

      America
        West Resources,
        Inc.,

      a
        Nevada corporation

      

      

      By:                                                                
        

      Dan
        R. Baker,

      Chief
        Executive
        Officer

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      COUNTERPART
        SIGNATURE PAGE FOR ATTACHMENT TO COLLATERAL ASSIGNMENT OF ESCROW AGREEMENT
        AND
        ESCROW FUNDS AMONG DENLY ACI
        PARTNERS, LTD., A TEXAS LIMITED PARTNERSHIP, AND DENNIS C. VON WAADEN,
        AND SALLY A.
        VON WAADEN, AS CO-TRUSTEES OFTHE VON WAADEN 2004
        REVOCABLE
        TRUST (collectively, THE "LENDERS"),
        AND AMERICA WEST RESOURCES,
        INC.,
        A NEVADA CORPORATION (THE "DEBTOR").

       

      

      EXECUTED
        as of the date first stated above.

      

      

      Lenders:

      

      Denly
        ACI Partners, Ltd.,

      a
        Texas limited
        partnership

      

      By:           
        Denly ACI Mgt., LLC,

      a
        Texas limited liability
        company,

      its
        sole General Partner

      

      By:

      Dennis
        C. von Waaden,
        Manager

      

      By:

      Sally
        A. von Waaden,
        Manager

      

      

      

      Dennis
        C. von Waaden, Co-Trustee of
        the

      von
        Waaden 2004 Revocable
        Trust

      

      

      Sally
        A. von Waaden, Co-Trustee of
        the

      von
        Waaden 2004 Revocable
        Trustex10_3.htm

    Exhibit
      10.3

     

    

      COMMON
        STOCK PURCHASE AGREEMENT

      

       

      This
        Common Stock Purchase Agreement
        (this “Agreement”) is
        made and entered into as of the 9th
        day of
        October, 2008 by, between and among America West Resources, Inc., a Nevada
        corporation (the “Company”), and each of Denly
        ACI Partners, Ltd., a Texas limited partnership (“Denly ACI”) and Dennis C.
        von
        Waaden and Sally A. von Waaden, Trustees of The von Waaden 2004 Revocable
        Trust
        (the “Trustees”) (Denly
        ACI and the Trustees are sometimes referred to in this Agreement, collectively,
        as the “Investors”).

       

       

      ARTICLE
        I.

      RECITALS

       

      1.01 Company.  The
        Company was initially incorporated on July 13, 1990 and as of the date of
        this
        Agreement has only one class of its capital stock issued and outstanding,
        that
        being its $.0001 par value common stock (the “Common Stock”).  The
        Company is engaged in the coal mining business in Utah.

       

      1.02 Consideration.  Each
        of the Parties acknowledges that each has given and received good, valuable
        and
        present consideration to support each of the obligations of the Parties under
        this Agreement.

       

       

      ARTICLE
        II.

      TRANSACTION
        TO BE EFFECTED
        PURSUANT TO THIS AGREEMENT

       

      2.01 Issuance
        and Sale of Common
        Stock for Cash.  Subject to the terms and conditions of this
        Agreement, at the Closing, the Company shall issue and sell to the Investors,
        and the Investors shall purchase from the Company, Ten Million (10,000,000)
        shares of Common Stock (the “Investors’ Common Stock”) for
        an aggregate purchase price of Two Hundred Thousand Dollars ($200,000) and
        being
        a price of approximately $.02 per share.  The Investors shall purchase
        the Investors’ Common Stock from the Company in the following amounts between
        them:

       

      Investors                                
        Shares                                                      
        Price

      

      Denly
        ACI                                           
6,666,667
        shares                                                      
$133,333.34

      Trustees                                
        3,333,333
        shares                                                      
$ 66,666.66

       

      2.02 Determination
        of Purchase
        Price for the Investors’ Common Stock.  The Company and the
        Investors acknowledge that the purchase price for the Investors’ Common stock
        under this Agreement is fair and reasonable and has been determined by
        negotiation, with each of the Parties considering, among other factors, the
        following:

       

      (a) the
        fact
        that the Company’s principal operating subsidiary has been in bankruptcy since
        October of 2007; and

       

      (b) the
        fact
        that the Company has experienced continuing operating losses in 2006, 2007
        and
        through June 30, 2008; and

       

      (c) the
        fact
        that the Company has a negative net worth in excess of ($2,500,000);
        and

       

      (d) the
        fact
        that at the end of 2007 a substantial number of unregistered shares of Common
        Stock were issued by the Company at a price of $.025 per share; and

       

      (e) the
        fact
        that the current global credit crisis has made the continued financing of
        the
        operations of the Company and its Subsidiaries very difficult.

       

      2.03 Registration
        Rights
        Agreement.  When issued, the Investors’ Common Stock shall have
        the benefit of that certain Registration Rights Agreement to be executed
        by the
        Company in the form attached as Exhibit A to this
        Agreement (the “Registration
        Rights Agreement”).

       

       

      ARTICLE
        III.

      CLOSINGS

       

      3.01 Loan
        Agreement; Escrow
        Agreement.  Contemporaneously with the execution of this
        Agreement, Investors and the Company have entered into that certain Loan
        Agreement (the “Loan
        Agreement”) pursuant to which, among other things, Investors have agreed
        to loan to the Company up to $2,800,000 subject to certain terms and conditions,
        and Investors have delivered $2,250,000 of the loan proceeds to Wells Fargo
        Bank, National Association (“Escrow Agent”) in accordance
        with that certain Escrow and Control Agreement of even date with this Agreement
        (the “Escrow
        Agreement”).

       

      3.02 Date
        and Place of
        Closing.  The closing (the “Closing”) hereunder
        with
        respect to the issuance and sale of the shares of Common Stock and the
        consummation of the related transactions contemplated hereby shall, subject
        to
        the satisfaction or waiver of the applicable conditions set forth in Article
        VII, take place at the offices of Graves, Dougherty, Hearon & Moody, P.C.,
        401 Congress Avenue, Suite 2200, Austin, Texas 78701 at the same time and
        on the
        same date (the “Closing
        Date”) as the initial disbursement of loan proceeds is made by the Escrow
        Agent in accordance with the Loan Agreement and the Escrow
        Agreement.

       

      3.03 Deliveries
        at
        Closing.

       

      (a) At,
        or
        prior to, the Closing, the Company shall:

       

      (i) deliver
        to the Investors a copy certified by the Secretary of State of the State
        of
        Nevada of the Articles of Incorporation of the Company and all amendments
        thereto;

       

      (ii) deliver
        to the Investors a Secretary’s Certificate executed by the Secretary of the
        Company certifying to the incumbency of the Chief Executive Officer of the
        Company, and certifying to and attaching (A) the Bylaws of the Company and
        all
        amendments thereto, (B) the resolutions of the Board of Directors of the
        Company
        authorizing and approving the execution, delivery and performance of this
        Agreement;

       

      (iii) deliver
        to the Investors the opinion of the Company’s counsel, in the form acceptable to
        the Investors;

       

      (iv) deliver
        to the Investors certificate evidencing the Investors’ Common Stock in customary
        form and containing only the restrictive legend described in Section 5.03 below; and

       

      (v) execute
        and deliver to the Investors the Registration Rights Agreement.

       

      (b) At
        the
        Closing, the Investors shall:

       

      (i) deliver
        to the Company the purchase price for the Investors’ Common Stock;
        and

       

      (ii) execute
        and deliver to the Company the Registration Rights Agreement.

       

       

      ARTICLE
        IV.

      REPRESENTATIONS
        AND
        WARRANTIES OF THE COMPANY

       

      4.01 Representations
        and
        Warranties of the Company.  The Company represents and warrants
        to the Investors as set forth in this Article IV.

       

      4.02 Organization
        and Standing of
        the Company; Authority.  The Company is a corporation duly
        organized, validly existing and in good standing under the laws of the State
        of
        Nevada and has all requisite corporate power to carry on its business as
        now
        conducted and as proposed to be conducted, and the Company has the corporate
        power to enter into and perform this Agreement and to issue and sell the
        Investors’ Common Stock as herein provided.  The Company is duly
        qualified or licensed as a foreign corporation and in good standing in each
        jurisdiction in which the character or location of the property owned, leased
        or
        operated by it or the nature of the business conducted by it makes such
        qualification necessary.  The Company is not in default in the
        performance, observance or fulfillment of any provisions of its Articles
        of
        Incorporation or bylaws.

       

      4.03 Capitalization
        of the
        Company.  Immediately prior to execution of this Agreement and
        the Closing:

       

      (a) the
        authorized capital stock of the Company consists entirely of Two Hundred
        Million
        (200,000,000) shares of Common Stock, and Two Million Five Hundred Thousand
        (2,500,000) shares of $.0001 par value Preferred Stock (“Preferred
        Stock”);

       

      (b) One
        Hundred Ten Million Five Hundred Forty Nine Thousand One Hundred and Twenty
        Nine
        (110,549,129) shares of Common Stock are issued and outstanding, no (0) shares
        of Preferred Stock are issued or outstanding, and the Company has outstanding
        warrants, options and a right pursuant to an employment agreement  to
        purchase and issue Common Stock in the aggregate amount of Six Million Two
        Hundred Thirty Eight Thousand Nine Hundred and Ninety-Nine (6,238,999)
        shares;

       

      (c) the
        Company has no issued or outstanding capital stock or obligations to issue
        capital stock except as set forth in subsection (b) above.

       

      4.04 Duly
        Issued.  Upon issuance and delivery to each of the Investors of
        the Investors’ Common Stock against payment of the purchase price therefore
        pursuant to this Agreement and the Escrow Agreement, such shares will be
        validly
        issued, fully paid and non-assessable shares of Common Stock, and will be
        free
        and clear of all liens, charges, restrictions, claims and encumbrances imposed
        by or through the Company.

       

      4.05 Authorization.  The
        Company has the requisite corporate power and authority to enter into this
        Agreement and each of the Transaction Documents required to be entered into
        by
        the Company pursuant to the terms and conditions hereof and thereof,
        respectively, and to perform its obligations hereunder and
        thereunder.  This Agreement, the issuance, sale and delivery of the
        shares of Investors’ Common Stock have, and each of the Transaction Documents,
        when executed and delivered by the Company, will have been duly authorized,
        executed and delivered by and on behalf of the Company and will constitute
        the
        valid and binding agreements of the Company, enforceable in accordance with
        their respective terms, except as enforceability may be limited by bankruptcy,
        insolvency, reorganization or similar laws affecting creditors’ rights
        generally.

       

      4.06 SEC
        Filings; Financial
        Statements.  The Company has provided to the Investors copies
        of its Form 10K SB/A filed with the Commission on April 29, 2008 for the
        period
        ended December 31, 2007, the Form 10Q filed with the Commission on August
        18,
        2008 for the period ended June 30, 2008, and all Form 8-K’s filed with the SEC
        since January 1, 2008 (collectively, the “SEC Filings”).  The
        SEC Filings are accurate and complete in all material respects and contain
        all
        information required to be set forth in the same.  The financials
        statements included in the SEC Filings (collectively, the “Financial Statements”) present
        fairly, in accordance with GAAP, the financial position and the results of
        operation and cash flow of the Company as of the dates and for the periods
        indicated therein (with any of such Financial Statements that are unaudited
        subject to normal audit adjustments).

       

      4.07 No
        Conflict.  The execution, delivery and performance of this
        Agreement and the other Transaction Documents to which the Company is a party
        will not violate the Articles of Incorporation or Bylaws of the Company and
        will
        not violate any provision of law, or order of any court or governmental agency
        affecting the Company in any respect, and will not conflict with, result
        in a
        breach of the provisions of, constitute a default under any material agreement
        binding on the Company, or result in the imposition of any lien, charge,
        or
        encumbrance upon any assets of the Company that could have a Material Adverse
        Effect.  No approval or consent from any third party not already
        obtained is required in connection with the execution of or performance under
        this Agreement or the Transaction Documents.

       

      4.08 No
        Material Adverse
        Changes.  Since June 30, 2008, there have been no Material
        Adverse Changes other than as set forth in any of the SEC Filings. 

       

      4.09 Governmental
        Authorization:
        Third Party Consents.  No approval, consent, compliance,
        exemption, authorization or other action by, or notice to, or filing with,
        any
        Governmental Authority or any other Person in respect of any Requirement
        of Law,
        and no lapse of a waiting period under a Requirement of Law, is necessary
        or
        required in connection with the execution, delivery or performance by the
        Company or enforcement against the Company of this Agreement or the Transaction
        Documents to which any such Person is a party or the transactions contemplated
        thereby.

       

      4.10 Representations
        and
        Warranties in Other Agreements.  The representations and
        warranties made by the Company in the other Transaction Documents, and in
        any
        other certificates delivered pursuant hereto or thereto, are true and correct
        in
        all material respects (except where any such representation and warranty
        is
        stated as being true only as of a specific date, in which case such
        representation and warranty was true and correct in all material respects
        on
        such date).

       

      4.11 Disclosure.  This
        Agreement, The SEC Filings, the Financial Statements and the documents and
        certificates furnished to the Investors by the Company on or prior to the
        Closing do not contain any untrue statement of a material fact or omit to
        state
        a material fact necessary in order to make the statements contained herein
        or
        therein, in the light of the circumstances under which they were made, not
        misleading.  There is no fact known to the Company which the Company
        has not disclosed to the Investors in writing, which has had or would reasonably
        be expected to have a Material Adverse Effect.

       

       

      ARTICLE
        V.

      REPRESENTATIONS
        AND
        WARRANTIES OF INVESTORS

       

      5.01 Representations
        and
        Warranties of the Investors.  Each of the Investors severally
        (but not jointly) represents and warrants to the Company as set forth in
        this
        Article V.

       

      5.02 Authorization;
        Authority.  This Agreement and each of the Transaction
        Documents has been duly authorized and executed by such Investor (to the
        extent
        such Investor is a party to the same) and constitutes a valid agreement binding
        upon the Investor, enforceable in accordance with its terms (except to the
        extent that such enforceability may be limited by bankruptcy or similar laws
        affecting creditors’ rights generally or by general equitable
        principles).  Such Investor has the full legal right, power and
        authority to enter into this Agreement and each of the Transaction Documents
        to
        which it is a party and to perform such Investor’s obligations hereunder and
        thereunder upon the terms and conditions herein and therein set
        forth.

       

      5.03 Securities
        Not
        Registered.  Such Investor is acquiring the shares of Common
        Stock being purchased by such Investor hereunder for such Investor’s own account
        and not with a view to or for sale in connection with the distribution thereof
        in violation of applicable securities laws.  Such Investor has been
        advised that the shares of the Common Stock to be issued and sold hereunder
        have
        not been registered under the Securities Act, or applicable state securities
        laws and that they must be held indefinitely unless the offer and sale thereof
        are subsequently registered under the Securities Act or any exemption from
        such
        registration is available.  Such Investor acknowledges and agrees that
        the certificates representing the shares of the Investors’ Common Stock will
        bear a restrictive legend in substantially the following form:

       

      
        	
                 

              	
                “THE
                  SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
                  UNDER THE
                  SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
                  LAWS.  THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT
                  BE OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR SOLD IN THE ABSENCE
                  OF AN
                  EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER THE SECURITIES
                  ACT
                  OF 1933, A “NO ACTION” LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION
                  WITH RESPECT TO SUCH OFFER FOR SALE OR SALE, COMPLIANCE WITH RULE
                  144
                  UNDER THE SECURITIES ACT OF 1933, OR AN OPINION OF COUNSEL SATISFACTORY
                  TO
                  THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.”
                  

              

      

      

      The
        Investor further acknowledges and agrees that the Company may issue appropriate
        “stop transfer” instructions to its transfer agent, if any, with respect to such
        securities and/or make appropriate notations to such effect in its own transfer
        records.

      

      5.04 Investment
        Experience,
        Etc.  The Investor represents that such Investor (i) has
        such knowledge and experience in financial and business matters that such
        Investor is capable of evaluating the merits and risks of the purchase of
        the
        Investors’ Common Stock, (ii) has a net worth significantly in excess of the
        amount of the purchase price for the Investors’ Common Stock and is able to bear
        the economic risk of a complete loss on the purchase of the Investors’ Common
        Stock, and (iii) is an “accredited investor” as that term is defined in
        Rule 501(a) of Regulation D under the Securities Act.

       

      5.05 Finder’s
        Fees.  The Investors have not incurred any liability for
        commissions or other fees to any finder, broker or agent in connection with
        the
        transactions contemplated by this Agreement.

       

       

      ARTICLE
        VI.

      COVENANTSOF
        THE
        COMPANY

       

      Subject
        to earlier expiration with respect to Section 6.10
        as set forth herein, until the date Investors shall own less than ten percent
        (10.0%) of the Investors’ Common Stock, the Company and each Subsidiary of the
        Company shall:

       

      6.01 Maintenance
        of Corporate
        Existence, etc.  Maintain in full force and effect its
        corporate existence, rights and franchises and all licenses and other rights
        in
        or to use patents, processes, licenses, trademarks, trade names or copyrights
        owned or possessed by it of any subsidiary and deemed by the Company to be
        necessary to the conduct of their business.

       

      6.02 Prompt
        Payment of Taxes,
        etc.  Promptly pay and discharge, or cause to be paid and
        discharge, when due and payable, all lawful taxes, assessments and governmental
        charges or levies imposed upon the income, profits, property or business
        of the
        Company or any subsidiary; provided, however, that any such tax, assessment,
        charge or levy need not be paid if the validity thereof shall currently be
        contested in good faith by appropriate proceedings and if the Company shall
        have
        set aside on its books adequate reserves with respect thereto and provided,
        further, that the Company will pay all such taxes, assessments, charges or
        levies forthwith upon the commencement of proceedings to foreclose any lien
        which may have attached as security therefore. The Company will promptly
        pay or
        cause to be paid when due, or in conformance with customary trade terms or
        otherwise in accordance with policies related thereto adopted by the Company’s
        Board of Directors, all other indebtedness incident to operations of the
        Company.

       

      6.03 Accounts
        and
        Records.  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.

       

      6.04 Compliance
        with Requirements
        of Government Authorities.  Duly observe and conform to all
        valid requirements of governmental authorities relating to the conduct of
        their
        businesses or to their properties or assets.

       

      6.05 Visits
        and
        Inspections.  Permit representatives of each Investor, from
        time to time, as often as may be reasonably requested, but only during normal
        business hours and upon reasonable prior notice, to visit and inspect its
        properties; inspect, audit and make extracts from its books, records and
        files,
        including, but not limited to, management letters prepared by independent
        accountants; and discuss with its principal officers and its independent
        accountants, its business, assets, liabilities, financial condition, results
        of
        operations and business prospects (and by this provision the Company authorizes
        such accountants to discuss the finances and affairs of the
        Company).

       

      6.06 Conduct
        of
        Business.  Engage only in business consisting primarily of
        business conducted on the Closing Date and other businesses reasonably related
        thereto.

       

      6.07 Use
        of
        Proceeds.  Use the proceeds of the sale of the Investors’
Common Stock only for the purposes provided for in the Escrow Agreement
        and the
        other Transaction Documents.

       

      6.08 Compliance
        with
        Agreements.  Perform and observe all of its material
        obligations to the Investors, set forth in this Agreement and the other
        Transaction Documents to which it is a party and the Articles of Incorporation,
        Bylaws or other organizational and governing documents of the
        Company.

       

      6.09 Compliance
        with Transaction
        Documents.  Comply in all material respects with each term,
        condition and provision of the Articles of Incorporation, Bylaws and all
        other
        Transaction Documents to which the Company and any of the Investors is a
        party.

       

      6.10 Issuance
        of Preferred
        Stock.  The Company shall not issue any Preferred Stock without
        the prior written consent of the holders of a majority of the shares of
        Investors’ Common Stock (provided that this Section 6.10 shall expire one (1) year from the date of
        this
        Agreement).

       

       

      ARTICLE
        VII.

      CONDITION
        TO INVESTORS’
OBLIGATION TO CLOSE

       

      7.01 Conditions.  The
        obligation of Investors to close the purchase of the Investors’ Common Stock and
        to effect the Closing shall be expressly subject to, and conditioned upon,
        satisfaction of the following conditions:

       

      (a) satisfaction
        of all conditions for the first disbursement by Escrow Agent under the Escrow
        Agreement (including, without limitation, the satisfaction of all conditions
        to
        such disbursement set forth in that certain Loan Agreement between the Company
        and Investors of even date with this Agreement (the “Loan Agreement”);

       

      (b) all
        of
        the warrants and representations of the Company being true, correct, complete
        and accurate; and

       

      (c) full
        and
        timely performance by the Company of all of its obligations and covenants
        under
        this Agreement and each of the Transaction Documents.

       

      7.02 Termination.  Investors
        may terminate this Agreement by written notice to the Company and direct
        the
        Escrow Agent to return to Investors all of the purchase price for the Investors’
Common Stock previously delivered to Escrow Agent in the event of any one
        of the
        following:

       

      (a) the
        failure of any of the warranties or representations of the Company set forth
        in
        this Agreement or any of the Transaction Documents to be true, correct, complete
        and accurate; or

       

      (b) the
        failure of the Company to fully and timely perform any of its obligations
        under
        this Agreement or any of the other Transaction Documents; or

       

      (c) each
        of
        the conditions set forth at Section 7.01 above has
        not been fully satisfied or waived on or before December 5, 2008.

       

       

      ARTICLE
        VIII.

      INDEMNIFICATION

       

      8.01 Indemnification.  In
        addition to all other sums due hereunder or provided for in this Agreement,
        the
        Company agrees to indemnify and hold harmless each Investor and their Affiliates
        and their officers, directors, agents, employees, subsidiaries, partners
        and
        controlling Persons (each, an “Indemnified Party”) to the
        fullest extent permitted by law, from and against any and all out-of-pocket
        losses, claims, damages, expenses (including reasonable fees, disbursements
        and
        other charges of counsel) or other liabilities (collectively, “Liabilities”) resulting from
        or arising out of (a) any breach of any representation or warranty, covenant
        or
        agreement of the Company in this Agreement or any of the other Transaction
        Documents or (b) any investigation or proceeding against the Company or any
        Indemnified Party and arising out of or in connection with this Agreement
        or any
        of the Transaction Documents, whether or not the transactions contemplated
        by
        this Agreement are consummated, which investigation or proceeding requires
        the
        participation of, or is commenced or filed against, any Indemnified Party
        because of this Agreement, any other Transaction Document or such other
        documents and the transactions contemplated hereby or thereby, provided,
        that
        the Company shall not be liable under this Section 8.01 to an Indemnified Party for any liabilities
        resulting primarily from any actions that involved the gross negligence or
        willful misconduct of such Indemnified Party; and provided, further, that
        if and
        to the extent that such indemnification is unenforceable for any reason,
        the
        Company shall make the maximum contribution to the payment and satisfaction
        of
        such Liabilities for which it would otherwise be liable hereunder which shall
        be
        permissible under applicable laws.  In connection with the obligation
        of the Company to indemnify for Liabilities as set forth above, the Company
        further agrees, upon presentation of appropriate invoices containing reasonable
        detail, to reimburse each Indemnified Party for all such Liabilities (including
        reasonable fees, disbursements and other charges of counsel) as they are
        incurred by such Indemnified Party; provided, that if an Indemnified Party
        is
        reimbursed hereunder for any Liabilities, such reimbursement of Liabilities
        shall be refunded to the extent it is finally judicially determined that
        the
        Liabilities in question resulted primarily from the willful misconduct or
        gross
        negligence of such Indemnified Party.  The obligations of the Company
        under this paragraph will survive any transfer of the Investors’ Common
        Stock.  In the event that the foregoing indemnity is unavailable or
        insufficient to hold an Indemnified Party harmless, then the Company will
        contribute to amounts paid or payable by such Indemnified Party in respect
        of
        such Indemnified Party’s Liabilities in such proportions as appropriately
        reflect the relative benefits received by and fault of the Company and such
        Indemnified Party in connection with the matters as to which such Liabilities
        relate and other equitable considerations.

       

      8.02 Notification.  Each
        Indemnified Party under this Article VIII will, promptly after the receipt
        of
        notice of the commencement of any action, investigation, claim or other
        proceeding against such Indemnified Party in respect of which indemnity may
        be
        sought from the Company under this Article VIII, notify the Company in writing
        of the commencement thereof.  The omission of any Indemnified Party so
        to notify the Company of any such action shall not relieve the Company from
        any
        liability which it may have to such Indemnified Party under this Article
        VIII
        unless, and only to the extent that, such omission results in the Company’s
        forfeiture of substantive rights or defenses or the Company is otherwise
        irrevocably prejudiced in defending such proceeding.  In case any such
        action, claim or other proceeding shall be brought against any Indemnified
        Party
        and it shall notify the Company of the commencement thereof, the Company
        shall
        be entitled to assume the defense thereof at its own expense, with counsel
        satisfactory to the Company; provided, that any Indemnified Party may, at
        its
        own expense, retain separate counsel to participate in such
        defense.  Notwithstanding the foregoing, in any action, claim or
        proceeding in which both the Company, on the one hand, and an Indemnified
        Party,
        on the other hand, is, or is reasonably likely to become, a party, such
        Indemnified Party shall have the right to employ separate counsel at the
        Company’s expense and to control its own defense of such action, claim or
        proceeding if, (a) the Company has failed to assume the defense and employ
        counsel as provided herein, (b) the Company has agreed in writing to pay
        such
        fees and expenses of separate counsel or (c) in the reasonable opinion of
        counsel to such Indemnified Party, a conflict or likely conflict exists between
        the Company, on the one hand, and such Indemnified Party, on the other hand,
        that would make such separate representation advisable, provided, however,
        that
        the Company shall not in any event be required to pay the fees and expenses
        of
        more than one separate counsel (and if deemed necessary by such separate
        counsel, appropriate local counsel who shall report to such separate
        counsel).  The Company agrees that it will not, without the prior
        written consent of an Indemnified Party, settle, compromise or consent to
        the
        entry of any judgment in any pending or threatened claim, action or proceeding
        relating to the matters contemplated hereby (if such Indemnified Party is
        a
        party thereto or has been actually threatened to be made a party thereto)
        unless
        such settlement, compromise or consent includes an unconditional release
        of such
        Indemnified Party from all liability arising or that may arise out of such
        claim, action or proceeding.  The Company shall not be liable for any
        settlement of any claim, action or proceeding effected against an Indemnified
        Party without the prior written consent of the Company.  The rights
        accorded to Indemnified Parties hereunder shall be in addition to any rights
        that any Indemnified Party may have at common law, by separate agreement
        or
        otherwise.

       

       

      ARTICLE
        IX.

      MISCELLANEOUS

       

      9.01 Governing
        Law.  This Agreement shall be governed by and construed in all
        respects by the internal laws of the State of Texas (except for the proper
        application of the United States federal securities laws), without giving
        effect
        to any choice of law or conflict of law provision or rule (whether of the
        State
        of Texas or any other jurisdictions) that would cause the application of
        the
        laws of any jurisdictions other than the State of Texas.

       

      9.02 Exculpation
        Among
        Investors.  Each Investor acknowledges that it is not relying
        upon any other Investor, or any officer, director, employee, member, agent,
        partner or affiliate of any such other Investor, in making its investment
        or
        decision to invest in the Company or in monitoring such investment.

       

      9.03 Notices,
        Etc.  Unless otherwise specified within a provision of this
        Agreement all notices, requests, demands and other communications hereunder
        shall be in writing and shall be deemed to have been duly given (i) upon
        receipt, when delivered personally; (ii) upon receipt, when sent by
        facsimile (provided confirmation of transmission is electronically or
        mechanically generated and kept on file by the sending party); (iii) three
        Business Days after deposit with the United States Mail when sent by registered
        or certified mail; or (iv) one Business Day after deposit with a nationally
        recognized overnight delivery service, in each case properly addressed to
        the
        party to receive the same.  The addresses and facsimile numbers for
        such communications shall be:

       

      If
        to the Company:

      

      Dan
        Baker

      Chief
        Executive Officer

      57
        West
        200 South, Suite 400

      Salt
        Lake
        City, Utah 84101

      Facsimile:  _______________

      

      With
        a
        copy to:

      

      Thomas
        C Pritchard

      Brewer
        & Pritchard, PC

      3
        Riverway, Suite 1800

      Houston,
        Texas 77056

      Facsimile:  (713)
        209-2921

      

      If
        to the Investors:

      

      13809
        Research Blvd., Suite 810

      Austin,
        Texas 78750

      Attention:  D.
        Mark von
        Waaden

      Facsimile:  (512)
        401-6551

      

      With
        a copy to:

      

      Clarke
        Heidrick, Esq.

      Graves,
        Dougherty, Hearon & Moody,
        P.C.

      401
        Congress Avenue, Suite
        2200

      Austin,
        Texas 78701

      Facsimile:  (512)
        480-5836

      

      9.04 Amendments
        and
        Waivers.

       

      (a) This
        Agreement may be terminated, amended or modified, by a written instrument
        executed by (a) the Company, and (b) the Investors.

       

      (b) Any
        obligation of the Company under this Agreement may be waived or excused by
        the
        Investors.

       

      9.05 Gender.  Wherever
        herein the singular number is used, the same shall include the plural, and
        the
        masculine gender shall include the feminine and neuter genders, and vice
        versa,
        as the context may require.

       

      9.06 Certain
        Expenses.  The Company agrees to pay or reimburse the Investors
        and their successors and assigns for: (a) all reasonable out-of-pocket costs
        and
        expenses (including, without limitation, reasonable attorneys’ fees and
        expenses) in connection with (i) the negotiation, preparation, execution
        and delivery of this Agreement and the Transaction Documents and the
        consummation of the transactions contemplated hereby and thereby and
        (ii) any amendment, modification or waiver of any of the terms of this
        Agreement or the Transaction Documents; (b) all reasonable costs and expenses
        of
        the Investors and their successors and assigns (including, without limitation,
        reasonable attorney’s fees and expenses) in connection with any default
        hereunder and any enforcement proceedings resulting therefrom; and
        (c) transfer, stamp, documentary or other similar taxes, assessments or
        charges levied by any Governmental Authority in respect of this Agreement
        or the
        Transaction Documents or any other document referred to herein or therein,
        and
        will indemnify and save the Investors harmless, without limitation as to
        time,
        from and against any and all liabilities with respect to all such taxes,
        assessments and charges and agrees to pay the Investors such additional amounts
        as may be necessary in respect of such taxes, assessments and charges in
        order
        that the Investors shall incur no greater cost or expenses than the Investors
        would have incurred had there been no such taxes, assessment or charges payable
        in respect of this Agreement, the Transaction Documents or any other document
        referred to herein or therein.  

       

      9.07 Section
        and Other
        Headings.  The section and other headings contained in this
        Agreement are for reference purposes only and shall not in any way affect
        the
        meaning or interpretation of this Agreement.

       

      9.08 Counterparts.  This
        Agreement may be executed simultaneously in any number of counterparts, each
        of
        which shall be deemed an original, but all of which together shall constitute
        one and the same instrument.

       

      9.09 Severability.  If
        any provision of this Agreement is held by final judgment of a court of
        competent jurisdiction to be invalid, illegal or unenforceable, such invalid,
        illegal or unenforceable provision shall be severed from the remainder of
        this
        Agreement, and the remainder of this Agreement shall be enforced.  In
        addition, the invalid, illegal or unenforceable provision shall be deemed
        to be
        automatically modified, and, as so modified, to be included in this Agreement,
        such modification being made to the minimum extent necessary to render the
        provision valid, legal and enforceable.  Notwithstanding the
        foregoing, however, if the severed or modified provision concerns all or
        a
        portion of the essential consideration to be delivered under this Agreement
        by
        one party to the other, the remaining provisions of this Agreement shall
        also be
        modified to the extent necessary to equitably adjust the parties’ respective
        rights and obligations hereunder.

       

      9.10 Telecopy
        Execution and
        Delivery.  A facsimile, telecopy or other reproduction of this
        Agreement may be executed by one or more parties hereto, and an executed
        copy of
        this Agreement may be delivered by one or more parties hereto by facsimile
        or
        similar electronic transmission device pursuant to which the signature of
        or on
        behalf of such party can be seen, and such execution and delivery shall be
        considered valid, binding and effective for all purposes.  At the
        request of any party hereto, all parties hereto agree to execute an original
        of
        this Agreement as well as any facsimile, telecopy or other reproduction
        hereof.

       

      9.11 Entire
        Agreement.  This Agreement and the other Transaction Documents
        constitute the entire agreement between the parties with respect to the subject
        matter hereof and thereof.  All proposals, negotiations and
        representations (if any) made prior, and with reference to the subject matter
        of
        this Agreement, are merged herein.  This Agreement has been negotiated
        by the parties and their respective counsel and will be interpreted fairly
        in
        accordance with its terms and without any strict construction in favor of
        or
        against either party.  Neither the Company nor the Investors shall be
        bound by any oral agreement or representation, irrespective of when
        made.

       

      9.12 Survival
        of Representations,
        Warranties and Covenants.  All of the representations and
        warranties made herein shall survive the execution and delivery of this
        Agreement, any investigation by or on behalf of the Investors, or acceptance
        of
        the shares of Common Stock and payment therefore and shall survive until
        such
        time as the shares of Common Stock have been sold or redeemed in full in
        cash.  All covenants and indemnities made herein shall survive in
        perpetuity, unless otherwise provided in this Agreement.

       

      9.13 Remedies
        Cumulative.  No failure or delay on the part of the Company or
        the Investors in exercising any right, power or remedy hereunder shall operate
        as a waiver thereof, nor shall any single or partial exercise of any such
        right,
        power or remedy preclude any other or further exercise thereof or the exercise
        of any other right, power or remedy.  The remedies provided for herein
        are cumulative and are not exclusive of any remedies that may be available
        to
        the Company or the Investors at law, in equity or otherwise.

       

      9.14 Further
        Assurances.  Each of the parties shall execute such documents
        and perform such further acts (including, without limitation, obtaining any
        consents, exemptions, authorizations, or other actions by, or giving any
        notices
        to, or making any filings with, any Governmental Authority or any other Person)
        as may be reasonably required or desirable to carry out or to perform the
        provisions of this Agreement or any of the Transaction Documents.

       

      9.15 Disputes.  The
        parties agree that all disputes arising under this Agreement shall be submitted
        to a court of competent jurisdiction located in Austin, Travis County,
        Texas.

       

      9.16 WAIVER
        OF JURY
        TRIAL.  EACH OF THE PARTIES WAIVES ITS RIGHTS TO TRIAL BY JURY
        AND AGREES TO SUBMIT ANY LAWSUIT TO TRIAL BEFORE THE COURT AND WITHOUT A
        JURY.

       

       

      ARTICLE
        X.

      DEFINITIONS

       

      10.01 Definitions.  As
        used in this Agreement, and unless the context requires a different meaning,
        the
        following terms have the meanings indicated:

       

      “Affiliate”
means,
        with respect
        to a Person, (a) any director, executive officer, general partner, managing
        member or other manager of such Person, (b) any other Person which directly
        or
        indirectly through one or more intermediaries, controls, or is controlled
        by, or
        is under common control with, such Person and (c) if such Person is an
        individual, any member of the immediate family (including parents, spouse
        and
        children) of such individual, any trust whose principal beneficiary is such
        individual or one or more members of such individual’s immediate family and any
        Person who is controlled by any such member or trust. The term “control” means
        (i) the power to vote more than 50% of the securities or other equity interests
        of a Person having ordinary voting power (on a fully diluted basis), or (ii)
        the
        possession, directly or indirectly, of any other power to direct or cause
        the
        direction of the management and policies of a Person, whether through ownership
        of voting securities, by contract or otherwise.

       

      “Agreement”
means
        this Common
        Stock Purchase Agreement, as amended, modified or supplemented from time
        to
        time.

       

      “Articles
        of Incorporation”
means the Articles of Incorporation of the Company and as in effect
        on the
        Closing Date, including, all amendments and restatements of the
        same.

       

      “Board
        of Directors” shall mean
        the group that manages the business and affairs of the Company as described
        in
        the bylaws of the Company.

       

      “Business
        Day” means any day
        other than a Saturday, Sunday or other day on which commercial banks in Austin,
        Texas are authorized or required by law or executive order to
        close.

       

      “Code”
means
        the Internal
        Revenue Code of 1986, as amended, or any successor
        statute  thereto.

       

      “Commission”
means
        the
        Securities and Exchange Commission or any similar agency then having
        jurisdiction to enforce the Securities Act.

       

      “Common
        Stock” has the meaning
        set forth in Section 1.01 of this Agreement.

       

      “Company”
means
        America West
        Resources, Inc., a Nevada corporation.

       

      “GAAP”
means
        generally accepted
        United States accounting principles set forth in the opinions and pronouncements
        of the Accounting Principles Board of the American Institute of Certified
        Public
        Accountants and statements and pronouncements of the Financial Accounting
        Standards Board that are applicable to the circumstances as of the date of
        determination.

       

      “Governmental
        Authority” means
        the government of any nation, state, city, locality or other political
        subdivision of any thereof, any entity exercising executive, legislative,
        judicial, regulatory or administrative functions of or pertaining to government,
        and any corporation or other entity owned or controlled, through stock or
        capital ownership or otherwise, by any of the foregoing.

       

      “Material
        Adverse Change” means
        a material adverse change in the business, assets, operations, condition
        (financial or otherwise), results of operations or prospects of the Company
        or
        any Subsidiary of the Company.

       

      “Material
        Adverse Effect” means
        a material adverse effect upon the business, assets, operation, condition
        (financial or otherwise), results of operations or prospects of the Company
        or
        any Subsidiary of the Company.

       

      “Person”
means
        any individual,
        firm, corporation, partnership, trust, limited liability company, incorporated
        or unincorporated association, joint venture, joint stock company, Governmental
        Authority or other entity of any kind, and shall include any successor (by
        merger or otherwise) of such entity.

       

      “Subsidiary”
means,
        as to any
        Person, (i) any corporation more than fifty percent (50%) of whose stock
        of any
        class or classes having by the terms thereof ordinary voting power to elect
        a
        majority of the directors of such corporation (irrespective of whether or
        not at
        the time stock of any class or classes of such corporation shall have or
        might
        have voting power by reason of the happening of any contingency) is at the
        time
        owned such Person and/or one or more Subsidiaries of such Person and (ii)
        any
        partnership, limited liability company, association, joint venture or other
        entity in which such Person and/or one or more Subsidiaries of such Person
        has
        more than a 50% equity interest at the time.

       

      “Transaction
        Documents” means,
        collectively, this Agreement, the Registration Rights Agreement, the Escrow
        Agreement, the Loan Agreement and all other documents, certificates or
        agreements entered into or delivered in connection with any of the
        foregoing.

       

      “United
        States” and “U.S.” shall mean
        the United
        States of America.

       

      10.02 Accounting
        Terms: Financial
        Statements.  All accounting terms used herein not expressly
        defined in this Agreement shall have the respective meanings given to them
        in
        accordance with sound accounting practice.  The term “sound accounting
        practice” shall mean such accounting practice as, in the opinion of the
        independent certified public accountants regularly retained by the Company,
        conforms at the time to GAAP applied on a consistent basis except for changes
        with which such accountants concur.

       

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            990067v5

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
            Signature
              Page to Common Stock Purchase Agreement

          

        

      

      IN
        WITNESS WHEREOF, the parties have
        duly executed this Agreement as of the day and year first above
        written.

      

      

      AMERICA
        WEST RESOURCES,
        INC.

      

      

      By:                                                                
        

      Name:                                                                           
        

      Title:                                                                           
        

      

      

      

      

      

      

      

      

      

      [Counterpart
        Signature Pages Follow]

      

      

      

      

      

      

      

      

      

      

      

      
        
          
            

            990067v5

          

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      

      COMMON
        STOCK PURCHASE AGREEMENT

      

      

      

      

      

      COUNTERPART
        SIGNATURE
        PAGE

      

      

      

      

      

      

      

      DENLY
        ACI
        PARTNERS, LTD.,

      a
        Texas
        limited partnership

      

      By:           
        Denly ACI Mgt., LLC, a Texas limited

      liability
        company, its general partner

      

      

      By:                                                                
        

      Dennis
        C. von Waaden,
        Manager

      

      

      By:                                                                
        

      Sally
        A. von Waaden,
        Manager

      

      

      

      

      

      

      
        
          
            

            990067v5

          

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      

      COMMON
        STOCK PURCHASE AGREEMENT

      

      

      

      

      

      COUNTERPART
        SIGNATURE
        PAGE

      

      

      

      

      

      

      

      

      DENNIS
        C.
        VON WAADEN, Trustee of

      The
        von
        Waaden 2004 Revocable Trust

      

      

      

      

      SALLY
        A.
        VON WAADEN, Trustee of

      The
        von
        Waaden 2004 Revocable Trust

      

      

      

      

      

      

      

      
        
          
            

            990067v5

          

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      EXHIBITS

      

      Exhibit
        A                                
Registration Rights Agreement

      

      

      
        
          
            

            990067v5

          

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      EXHIBIT
        A

      

      REGISTRATION
        RIGHTS
        AGREEMENT

      

      This
        REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated
        as
        of this ___ day of _______________, 2008 is made by and among America West Resources,
        Inc.,
        a Nevada corporation, (the “Company”), Denly
        ACI Partners, Ltd., a
        Texas limited partnership (the “Partnership”), and
        Dennis C. von Waaden and Sally A. von Waaden, Trustees of The von Waaden 2004 Revocable
        Trust (the “Trust,”
collectively
        with Partnership, “Investors”).

      

      WHEREAS,
        the Company and
        Investors have entered into a Common Stock Agreement, dated October [__],
        2008
        (the “Purchase
        Agreement”), in which the Investors have agreed to purchase from the
        Company an aggregate of 10,000,000 shares of the Company’s common stock (the
“Restricted
        Shares”); and

      

      WHEREAS
        , among other matters,
        the Company has undertaken to register the resale of the Restricted Shares
        and
        comply with certain other covenants with respect to the Restricted Shares
        pursuant to the terms set forth herein.

      

      NOW,
        THEREFORE, the Company and the Investors hereby covenant and agree as
        follows:

      

      1.           
        Definitions.
        All terms not defined herein shall have the following respective
        meanings:

      

                 
        “Common Stock”
        shall mean the common stock, par value $0.001 per share, of the
        Company.

      

      “Exchange
        Act” shall
        mean the Securities Exchange Act of 1934, as amended, and the rules and
        regulations of the SEC thereunder, all as the same shall be in effect at
        the
        time.

      

      “Holder”
or
“Holders”
shall
        mean
        any person or persons to whom Restricted Shares were originally issued or
        qualifying transferees.

      

      “Restricted
        Shares”
shall mean the 10,000,000 shares of the Company’s common stock issued in
        connection with the Purchase Agreement.

      

      “Securities
        Act” shall
        mean the Securities Act of 1933, as amended, and the rules and regulations
        of
        the SEC thereunder, all as the same shall be in effect at the applicable
        time.

      

      “SEC”
shall
        mean the
        U.S. Securities and Exchange SEC, or any other federal agency at the time
        administering the Securities Act.

      

       

      2.           
        Registration
        Rights.

      

      SECTION
        2.1                                
Registration Rights
        Available. The Company agrees to provide Holder with respect to the
        Restricted Shares and any other securities issued or issuable at any time
        or
        from time to time in respect of the Restricted Shares upon a stock split,
        stock
        dividend, recapitalization or other similar event involving the Company
        (collectively, the “Restricted Securities”)
        unlimited rights to “piggyback” on any public offering of Company securities
        subject to terms of this Agreement (the registration rights hereunder being
        “Registration
        Right”).

      

      SECTION
        2.2                                
Piggyback
        Registration. With respect to Holder’s right to piggyback on a public
        offering of the Company securities pursuant to Section 2.1, the
        parties agree as follows:

      

      (a)           
        Pursuant to Section
        2.1, the Company will (i) promptly give to Holder written notice of any
        registration relating to a public offering of the Company securities; and
        (ii)
        include in such registration (and related qualification under blue sky laws
        or
        other compliance), and in the underwriting involved therein, all the Securities
        specified in Holders’ written request or requests, mailed in accordance with
Section 4.8
        herein within 30 days after the date of such written notice from the
        Company.

      

      (b)           
        The Holders’ right to registration pursuant to Section 2.1 shall
        be
        conditioned upon Holders’ participation in such offering, and the inclusion of
        the Restricted Securities in the underwriting shall be limited to the extent
        provided herein. Notwithstanding any other provision of this Agreement, if
        the
        managing underwriter determines that market factors require a limitation
        of the
        aggregate number of shares to be underwritten, the managing underwriter may
        only
        limit the Restricted Securities that may be included in the registration
        and
        underwriting as follows: the number of Restricted Securities that may be
        included in the registration and underwriting by Holders shall be determined
        by
        multiplying the number of shares of all securities of the Company to be included
        in such registration and underwriting, times a fraction, the numerator of
        which
        is the number of Restricted Securities requested to be included in such
        registration and underwriting by Holders, and the denominator of which is
        the
        total number of securities of the Company to be included in such registration
        and underwriting. To facilitate the allocation of shares in accordance with
        the
        above provisions, the Company may round the number of shares allocable to
        any
        such  person to the nearest 100 shares. If either Holder disapproves
        of the terms of any such underwriting, it may elect to withdraw therefrom
        by
        written notice to the Company and the managing underwriter, delivered not
        less
        than seven days before the effective date of any registration statement.
        Any
        Restricted Securities excluded or withdrawn from such underwriting shall
        be
        withdrawn from such registration, and shall not be transferred in a public
        distribution prior to 120 days after the effective date of the registration
        statement relating thereto, or such other shorter period of time as the
        underwriters may require.

      

      SECTION
        2.3                                
Registration
        Procedure. With respect to the Registration Rights, whenever the Company
        is required under this Agreement to effect the registration of any Restricted
        Securities, the following provisions shall apply:

      

      (a)           
        Holders shall be obligated to furnish to the Company and the underwriters
        (if
        any) such information regarding the Restricted Securities and the proposed
        manner of distribution of the Restricted Securities as the Company and the
        underwriters (if any) may request in writing and as shall be required in
        connection with any registration, qualification or compliance referred to
        herein
        and shall otherwise cooperate with the Company and the underwriters (if any)
        in
        connection with such registration, qualification or compliance.

      

      (b)           
        The Company agrees that it will furnish to either Holder such number of
        prospectuses, offering circulars or other documents incident to any Registration
        Right, qualification or compliance referred to herein as provided or, if
        not
        otherwise provided, as either Holder from time to time may reasonably
        request.

      

      (c)           
        The Company shall use best efforts to register and qualify the securities
        covered by such registration statement under such other securities or Blue
        Sky
        laws of such jurisdictions as shall be reasonably requested by the
        Holders.

      

      (d)           
        In the event of any underwritten public offering, the Company will enter
        into
        and perform its obligations under an underwriting agreement, in usual and
        customary form, with the managing underwriter of such offering.

      

      (d)           
        The Company will notify each Holder of Restricted Securities covered by such
        registration statement at any time when a prospectus relating thereto is
        required to be delivered under the Securities Act of the happening of any
        event
        as a result of which the prospectus included in such registration statement,
        as
        then in effect, includes an untrue statement of a material fact or omits
        to
        state a material fact required to be stated therein or necessary to make
        the
        statements therein not misleading in the light of the circumstances then
        existing.

      

      (e)           
        As applicable, the Company will cause all such Restricted Securities registered
        pursuant to this Agreement to be listed on a national exchange or trading
        system
        and on each securities exchange and trading system on which similar securities
        issued by the Company are then listed.

      

      (f)           
        The Company will provide a transfer agent and registrar for all Restricted
        Securities registered pursuant hereunder and a CUSIP number for all such
        Restricted Securities, in each case not later than the effective date of
        such
        registration.

      

      (g)           
        All expenses of any registrations permitted pursuant to this Agreement and
        of
        all other offerings by the Company (including, but not limited to, the expenses
        of any qualifications under the blue-sky or other state securities laws and
        compliance with governmental requirements of preparing and filing any
        post-effective amendments required for the lawful distribution of the Restricted
        Securities to the public in connection with such registration, of supplying
        prospectuses, offering circulars or other documents, and Holders’ legal fees
        (not to exceed $10,000) will be paid by the Company.

      

      (h)           
        The Company will promptly make available for inspection by the selling Holders,
        any underwriter(s) participating in any disposition pursuant to such
        registration statement, and any attorney or accountant or other agent retained
        by any such underwriter or selected by the selling Holders, all financial
        and
        other records, pertinent corporate documents, and properties of the Company,
        and
        cause the Company’s officers, directors, employees and independent accountants
        to supply all information reasonably requested by any such seller, underwriter,
        attorney, accountant or agent, in each case, as necessary or advisable to
        verify
        the accuracy of the information in such registration statement and to conduct
        appropriate due diligence in connection therewith.

      

      (i)           
        The Company will notify each selling Holder, promptly after the Company receives
        notice thereof, of the time when such registration statement has been declared
        effective or a supplement to any prospectus forming a part of such registration
        statement has been filed.

      

      (j)           
        After any such registration statement hereunder has become effective, the
        Company will notify each selling Holder of any request by the SEC that the
        Company amend or supplement such registration statement or
        prospectus.

      

      (k)           
        The registration rights of this Agreement, subject to the terms and conditions
        hereof, shall be available to any subsequent holder of the Restricted
        Securities. Each subsequent holder entitled to registration rights under
        this
        Agreement shall be bound by the terms and subject to the obligations of this
        Agreement as though it were an original signatory hereto.

      

                 
        3.            Indemnification
        .

      

      SECTION
        3.1                                
Indemnification
        by the
        Company . In the event of any registration of the Restricted Securities
        of the Company under the Securities Act, the Company agrees to indemnity
        and
        hold harmless Holders and any other person who participates as an underwriter
        in
        the offering or sale of such securities against any and all claims, demands,
        losses, costs, expenses, obligations, liabilities, joint or several, damages,
        recoveries and deficiencies, including interest, penalties and attorneys’ fees
        (collectively, “Claims”), to which
        Holders or underwriter may become subject under the Securities Act or otherwise,
        insofar as such Claims (or actions or proceedings, whether commenced or
        threatened, in respect thereof) arise out of or are based on any untrue
        statement or alleged untrue statement of any material fact contained in any
        registration statement under which either Holders’ Restricted Securities were
        registered under the Securities Act, any preliminary prospectus, final
        prospectus or summary prospectus contained therein, or any amendment or
        supplement thereto, or any omission or alleged omission to state therein
        a
        material fact required to be stated therein or necessary to make the statements
        therein not misleading, and the Company will reimburse each Holder and each
        such
        underwriter for any legal or any other expenses reasonably incurred by any
        of
        them in connection with investigating or defending any such Claim (or action
        or
        proceeding in respect thereof); provided that the Company shall not be liable
        in
        any such case to the extent that any such Claim (or action or proceeding
        in
        respect thereof) or expense arises out of or is based on an untrue statement
        or
        alleged untrue statement or omission or alleged omission made in such
        registration statement, any such preliminary prospectus, final prospectus,
        summary prospectus, amendment or supplement in reliance on and in conformity
        with written information furnished to the Company through an instrument duly
        executed by either Holder specifically stating that it is for use in the
        preparation thereof. Such indemnity shall remain in full force and effect
        regardless of any investigation made by or on behalf of either Holder or
        any
        such underwriter and shall survive any transfer of the Restricted Securities
        by
        each Holder.

      

      SECTION
        3.2                                
Indemnification
        by
Holders
        . The Company may require, as a condition to including the Restricted Securities
        in any registration statement filed pursuant to this Agreement, that the
        Company
        shall have received an undertaking satisfactory to it from the requesting
        Holder(s), to indemnify and hold harmless (in the same manner and to the
        same
        extent as set forth in Section 3.1)
        the Company,
        each director of the Company, each officer of the Company and each other
        person,
        if any, who controls the Company, within the meaning of the Securities Act,
        with
        respect to any statement or alleged statement in or omission or alleged omission
        from such registration statement, any preliminary prospectus contained therein,
        or any amendment or supplement thereto, if such statement or alleged statement
        or omission or alleged omission was made in reliance on and in conformity
        with
        written information furnished to the Company through an instrument duly executed
        by the requesting Holder specifically stating that it is for use in the
        preparation of such registration statement, preliminary prospectus, final
        prospectus, summary prospectus, amendment or
        supplement.  Notwithstanding the foregoing, the maximum liability
        hereunder that any Holder shall be required to suffer shall be limited to
        the
        net proceeds to such Holder from the Restricted Securities sold by such Holder
        in the offering. Such indemnity shall remain in full force and effect,
        regardless of any investigation made by or on behalf of the Company or any
        such
        director, officer or controlling person and shall survive any transfer of
        the
        Securities by each Holder.

      

      SECTION
        3.3                                
Notices of Claims,
        etc. Promptly after receipt by an indemnified party of notice of the
        commencement of any action or proceeding involving a Claim referred to in
        this
Article 3,
        such indemnified
        party will, if a claim in respect thereof is to be made against an indemnifying
        party, give written notice to the latter of the commencement of such action,
        provided that the failure of any indemnified party to give notice as
        provided herein shall not relieve the indemnifying party of its obligations
        under this Article
3,
        except to the extent that the indemnifying party is actually prejudiced by
        such
        failure to give notice.  In case any such action is brought against an
        indemnifying party, unless in such indemnified party’s reasonable judgment a
        conflict of interest between such indemnified and indemnifying parties may
        exist
        in respect of such Claim, the indemnifying party shall be entitled to
        participate in and to assume the defense thereof, jointly with any other
        indemnifying party similarly notified to the extent that it may wish, with
        counsel reasonably satisfactory to such indemnified party, and after notice
        from
        the indemnifying party to such indemnified party of its election so to assume
        the defense thereof, the indemnifying party shall not be liable to such
        indemnified party for any legal or other expenses subsequently incurred by
        the
        latter in connection with the defense thereof other than reasonable costs
        of
        investigation. No indemnifying party shall, without the consent of the
        indemnified party, consent to entry of any judgment or enter into any settlement
        that does not include as an unconditional term thereof the giving by the
        claimant or plaintiff to such indemnified party of a release from all liability
        in respect of such Claim.

      

      SECTION
        3.4                                
Indemnification
        Payments. The indemnification required by this Article
3
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 expense, loss, damage or liability is
        incurred.

      

      4.           
        Additional
        Covenants.

      

                 
        SECTION
        4.1                                
Restrictive
        Legend.  It is understood that the certificates evidencing the
        Restricted Shares shall bear the following legend:

      

      
        	
              	
                “THE
                  SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
                  UNDER THE
                  SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
                  LAWS.  THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT
                  BE OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR SOLD IN THE ABSENCE
                  OF AN
                  EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER THE SECURITIES
                  ACT
                  OF 1933, A “NO ACTION” LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION
                  WITH RESPECT TO SUCH OFFER FOR SALE OR SALE, COMPLIANCE WITH RULE
                  144
                  UNDER THE SECURITIES ACT OF 1933, OR AN OPINION OF COUNSEL SATISFACTORY
                  TO
                  THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.”
                  

              

      

      

                 
        SECTION
        4.2                                
Rule
        144.  With a view to making available the benefits of certain
        rules and regulations of the SEC that may at any time permit the sale of
        the
        Restricted Securities to the public without registration, the Company agrees
        to
        use its best lawful efforts to: 

      

      (a)           
        Make and keep adequate current public information available, as those terms
        are
        understood and defined in Rule 144 under the Securities Act, at all times
        during
        which the Company is subject to the reporting requirements of the Exchange
        Act;

      

      (b)           
        File with the SEC in a timely manner all reports and other documents required
        of
        the Company under the Securities Act and the Exchange Act (at all times during
        which the Company is subject to such reporting requirements); 

      

      (c)           
        So long as either Holder owns any Restricted Securities, to furnish to such
        Holder forthwith upon request a written statement by the Company as to its
        compliance with the reporting requirements of said Rule 144 and with regard
        to
        the Securities Act and the Exchange Act (at all times during which the Company
        is subject to such reporting requirements), a copy of the most recent annual
        or
        quarterly report of the Company, and such other reports and documents of
        the
        Company and other information in the possession of or reasonably obtainable
        by
        the Company as either Holder may reasonably request in availing themselves
        of
        any rule or regulation of the SEC allowing Holder to sell any such securities
        without registration; and

      

      (d)           
        From time to time, upon the request of any Holder, cause counsel for Company
        to
        issue, at the expense of Company, an opinion to the transfer agent for the
        Company’s securities and the broker for Holder confirming that the applicable
        Restricted Shares may be sold without registration under the Securities Act
        pursuant to Rule 144 thereunder.

      

      Further,
        in connection with any sale, transfer or other disposition by any Holder
        of any
        Restricted Shares pursuant to Rule 144, Company shall cooperate with such
        Holder
        to facilitate the timely preparation and delivery of certificates representing
        the Restricted Shares to be sold and not bearing any legend, and enable
        certificates for such Restricted Shares to be for such number of shares as
        Seller may reasonably request at least two (2) business days prior to any
        sale
        of such Restricted Shares.

      

                 
        SECTION
        4.3                                
Limitation on
        Subsequent Registration Rights.  From and after the date of
        this Agreement, the Company will not, without the prior written consent of
        the
        Holders of a majority of the Restricted Securities, enter into any agreement
        with any holder or prospective holder of any securities of the Company that
        would (i) allow such holder or prospective holder to demand any registration
        of
        their securities, or (ii) otherwise grant any registration rights to such
        holder
        or prospective holder that are more favorable to such holder or prospective
        holder than the rights granted to the Holders hereunder, unless such agreement
        provides that the registration of the resale of the Restricted Securities
        under
        the Securities Act will be effected concurrently with such other registration
        and that the holders of the Restricted Securities will be subject to pro-rata
        reduction along with the other holders if required by the underwriter in
        the
        event of an underwritten offering.

      

      5.           
        Miscellaneous
        .

      

      SECTION
        5.1                                
Consent to
        Amendments. Except as otherwise expressly provided herein, the provisions
        of this Agreement may be amended or waived only by the written agreement
        of the
        Company and the Holders and shall be effective only to the extent specifically
        set forth in such writing.

      

      SECTION
        5.2                                
Term of the
        Agreement. This Agreement shall terminate with respect to Holder on the
        earlier to occur of (i) all of the Restricted Securities having been registered
        as provided in Article One, or (ii) three (3) years after the date
        hereof.

      

      SECTION
        5.3 Successors
        and
        Assigns. Except as otherwise expressly provided herein, all covenants and
        agreements contained in this Agreement by or on behalf of any of the parties
        hereto are transferable and will bind and inure to the benefit of the respective
        successors and assigns of the parties hereto, but only if so expressed in
        writing.

      

      SECTION
        5.4                                
Severability.
        Whenever possible, each provision of this Agreement will be interpreted in
        such
        a manner as to be effective and valid under applicable law, but if any provision
        of this Agreement is held to be prohibited by or invalid under applicable
        law,
        such provision will be ineffective only to the extent of such prohibition
        or
        invalidity, without invalidating the remainder of this Agreement.

      

      SECTION
        5.5                                
Delays or
        Omissions. No failure to exercise or delay in the exercise of any right,
        power or remedy accruing to Holder on any breach or default of the Company
        under
        this Agreement shall impair any such right, power or remedy nor shall it
        be
        construed to be a waiver of any such breach or default.

      

      SECTION
        5.6                                
Remedies
        Cumulative. All remedies
        under this
        Agreement, or by law or otherwise afforded to any party hereto shall be
        cumulative and not alterative.

      

      SECTION
        5.7                                
Descriptive
        Headings. The descriptive headings of this Agreement are inserted for
        convenience only and do not constitute a part of this Agreement. Unless clearly
        denoted otherwise, any reference to Articles or Sections contained herein
        shall
        be to the Articles or Sections of this Agreement.

      

      SECTION
        5.8                                
Notices. Any
        notices required or permitted to be sent hereunder shall be delivered personally
        or mailed, certified mail, return receipt requested, to the addresses set
        forth
        in the Loan Agreement, and shall be deemed to have been received on the day
        of
        personal delivery or within three business days after deposit in the mail,
        postage prepaid.

      

      SECTION
        5.9                                
Governing Law.
        The validity, meaning and effect of this Agreement shall be determined in
        accordance with the laws of the State of Texas applicable to contracts made
        and
        to be performed in that state.

      

      SECTION
        5.10 Final
        Agreement. This Agreement, together with those documents expressly
        referred to herein, constitutes the final agreement of the parties concerning
        the matters referred to herein, and supersedes all prior agreements and
        understandings.

      

      SECTION
        5.11 Execution in
        Counterparts. This Agreement may be executed in any number of
        counterparts, each of which when so executed and delivered shall be deemed
        an
        original, and such counterparts together shall constitute one
        instrument.

      

      

      

      [Signature
        Page Follows]

      

      
        
          
            

            A-

            990067v5

          

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, the parties hereto have executed this Registration Rights
        Agreement to be effective as of the day and year first above
        written.

      

      AMERICA
        WEST RESOURCES, INC.

      

      By:           
        

      Name:                      
        

      Title:                      
        

      

      

      INVESTORS:

      

      DENLY
        ACI
        PARTNERS, LTD.,

      a
        Texas
        limited partnership

      

      By:           
        Denly ACI Mgt., LLC, a Texas limited

      liability
        company, its general partner

      

      

      By:                                                                
        

      Dennis
        C. von Waaden,
        Manager

      

      

      By:                                                                
        

      Sally
        A. von Waaden,
        Manager

      

      

      

      

      Dennis
        C.
        von Waaden, Trustee of The

      von
        Waaden 2004 Revocable Trust

      

      

      

      Sally
        A.
        von Waaden, Trustee of The

      von
        Waaden 2004 Revocable Trust

      

      

      

      
        
          
            

            A-

            990067v5

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