Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - Searchlight Minerals Corp. - Exhibit 10.10

FIRST AMENDMENT TO LETTER AGREEMENT 

This First Amendment to the Letter Agreement dated November 22,
2006 between Searchlight Minerals Corp. (“SMC”), Verde River Iron
Company, LLC (“VRIC”), Harry B. Crockett (“Crockett”) and Gerald
A. Lembas (“Lembas”) (the "Letter Agreement") is made and entered into
effective as of the 15th day of February, 2007, between SMC, VRIC,
Crockett and Lembas. 

WHEREAS: 

A. SMC, VRIC, Crockett and Lembas entered into the Letter
Agreement whereby SMC agreed to acquire Transylvania International, Inc. (“TI”),
a wholly owned subsidiary of VRIC, upon the terms and conditions set forth in
the Letter Agreement.

B. Pursuant to the terms of the Letter Agreement, VRIC was to
retain the following assets (the “Assets”):

	 	(i) 	
      Several parcels of vacant land comprising approximately
      Six Hundred (600) acres, commonly described as Yavapai County Assessor
      Parcel Numbers:

	 	400-01-007E 
	 	400-02-001 
	 	400-01-007F 
	 	400-05-017D 
	 	400-06-001Y 
	 	400-05-006A 
	 	400-06-002C 
	 	400-05-013F 
	 	400-05-013G 
	 	400-05-001E 
	 	400-05-001F 

	 	(ii) 	
      A commercial building located at 919 Main Street,
      Clarkdale, commonly described as Yavapai County Assessor Parcel Number
      ###-##-####.

C. VRIC has now agreed to sell the Assets to SMC in
consideration of which SMC has agreed to pay an additional $100,000 in cash to
VRIC and to issue an additional 825,000 shares of the common stock of SMC to
VRIC or VRIC’s nominees.

D. SMC, VRIC, Crockett and Lembas have agreed to amend the
terms of the Letter Agreement on the terms and conditions set forth in this
agreement. 

NOW, THEREFORE, in consideration of covenants and
agreements set out herein and for other good and valuable consideration, the
parties agree to amend the terms of the Letter Agreement as follows: 

	1. 	
      Definitions. Except as otherwise set out herein,
      capitalized terms used in this Agreement shall have the same meaning as
      specified in the Letter Agreement.

	2. 	
      Amendment. The Letter Agreement is hereby amended
      as follows:

	 	(i) 	Section 3(a) of the Letter Agreement
      is replaced in its entirety with the following: 
	 	 	 
	 	  	“(a) 	pay $10,100,000 in cash to VRIC; and” 
	 	 	 	 
	 	(ii) 	Section 3(b) of the Letter Agreement
      is replaced in its entirety with the following: 
	 	 	 
	 	  	“(b) 	issue to VRIC or its designates 16,825,000
      shares (the SMC Shares) of the common stock of SMC, subject to applicable
      exemptions; and.” 

		(iii) 	
      Section 7 of the Letter Agreement is deleted in its
      entirety; and

	 	 	 
		(iv) 	
      Schedule “B” of the Letter Agreement is deleted in its
      entirety.

	 	 	 
	3. 	
      No Other Modification. The parties confirm that
      the terms, covenants and conditions of the Letter Agreement remain
      unchanged and in full force and effect, except as modified by this
      Agreement.

	 	 	 
	4. 	
      Indemnity. VRIC, Crockett and Lembas shall
      indemnify, defend and hold harmless SMC and Clarkdale Minerals LLC (“SMC
      Sub”) from and against any and all costs, expenses, losses, damages and
      liabilities (including attorneys’ fees and expenses) incurred by SMC Sub
      or TI in respect of any federal, state, local, foreign and other taxes,
      charges, fees, duties, levies, penalties or other assessments, including,
      without limitation, income, gross receipts, excise, profits, value added,
      real and personal property, sales, use, transfer, severance, stamp,
      occupation or other taxes, imposed by any government authority and shall
      include any interest penalties or additions to tax attributable to any of
      the foregoing, whether disputed or not, owing or assessed in the future in
      respect of matters up to the date hereof. This Section 4 shall survive
      closing and the merger of TI with SMC Sub on February 15, 2007, with SMC
      Sub as the sole surviving corporation, and continue until the fourth
      anniversary of the closing.

	 	 	 
	5. 	
      Counterparts. This Agreement may be executed in
      two or more counterparts, each of which shall constitute an original, but
      all of which, when taken together, shall constitute but one instrument,
      and shall become effective when one or more counterparts have been signed
      by each party hereto and delivered to the other parties.

	 	 	 
	6. 	
      Successors and Assigns. Except as otherwise
      expressly provided herein, the provisions hereof shall inure to the
      benefit of, and be binding upon, the successors, assigns, heirs, executors
      and administrators of the parties hereto.

2

	7. 	
      Entire Agreement. This Agreement constitutes the
      full and entire understanding and agreement between the parties with
      regard to the subject hereof.

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

	SEARCHLIGHT MINERALS CORP 	 	  
	 	 	 
	/s/ Ian McNeil 	 	 
	Per: Ian McNeil 	 	  
	President 	 	  
	  	 	  
	  	 	  
	VERDE RIVER IRON COMPANY, LLC. 	 	  
	 	 	 
	/s/ Harry B. Crockett 	 	 
	Per: Harry B. Crockett 	 	  
	Manager	 	  
	  	 	  
	  	 	  
	/s/ Harry B. Crockett
       	 	/s/
      Gerald A. Lembas 
	Harry B. Crockett 	 	Gerald A. Lembas 

3Filed by Automated Filing Services Inc. (604) 609-0244 - Searchlight Minerals Corp. - Exhibit 10.11

AGREEMENT AND PLAN OF MERGER 

THIS AGREEMENT is made effective as of the 15th day of
February, 2007 

VERDE RIVER IRON COMPANY,
LLC., a Nevada limited liability company, having a
corporate address
at 4950 Buckley Cove Way, Suite 8, Stockton, CA 95219 

(hereinafter referred to as “VRIC")

OF THE FIRST PART 

AND: 

TRANSYLVANIA INTERNATIONAL,
INC., a Nevada corporation having a corporate 
address at 1905 South
Eastern Ave., Las Vegas NV 89104 

(hereinafter referred to as “TI") 

OF THE SECOND PART 

AND: 

SEARCHLIGHT MINERALS
CORP., a Nevada corporation having a corporate address
at #120 - 2441
W. Horizon Ridge Pkwy, Henderson, NV 89052

(hereinafter referred to as “SMC") 

     OF THE THIRD PART

AND: 

CLARKDALE MINERALS LLC, a
Nevada limited liability company having a corporate
address at #120 - 2441 W.
Horizon Ridge Pkwy, Henderson, NV 89052

(hereinafter referred to as “SMC Sub")

OF THE FOURTH PART 

WHEREAS: 

A. The Boards of Directors of each of Searchlight Minerals
Corp. (“SMC”), TI, and the manager of SMC Sub, deem it desirable and in the best
interests of their respective shareholders that TI be merged with and into SMC
Sub with SMC Sub as the surviving entity (the “Merger”) on the terms and subject
to the conditions of this Agreement and the terms and conditions of the Letter
Agreement dated November 22, 2006 between SMC, Verde River Iron Company, LLC
(“VRIC”), Harry Crockett and Gerald Lembas, as amended by the parties on
February 15, 2007(the “LA”); 

B. The Boards of Directors of each of SMC and TI, and the
manager of SMC Sub, have approved and adopted this Agreement; 

C. SMC, as the sole member of SMC Sub, has approved the Merger;
and 

D. VRIC, as the sole shareholder of TI, has approved the
Merger. 

NOW THEREFORE THIS AGREEMENT WITNESSES that in
consideration of covenants and agreements set forth herein and of the sum of
$10.00, and other good and valuable consideration, paid by SMC Sub to TI, the
receipt of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE 1.
DEFINITIONS 

     1.1 Definitions. The
following terms have the respective meanings specified in this Article, unless
the context indicates otherwise. 

Page 1 of 12 

	 	(a) 	
      "Agreement" shall mean this Agreement, and all the
      exhibits, schedules and other documents attached to or referred to in the
      Agreement, and all amendments and supplements, if any, to this
      Agreement;

	 	 	 
	 	(b) 	
      "Property" shall mean the property described in Schedule
      A to this Agreement;

	 	 	 
	 	(c) 	
      “Closing” has the meaning ascribed to it in Section 2.2
      hereto.

	 	 	 
	 	(d) 	
      "Exchange Act" shall mean the United States Securities
      Exchange Act of 1934, as amended;

	 	 	 
	 	(e) 	
      “Effective Time” has the meaning ascribed to it in
      Section 2.3 hereto;

	 	 	 
	 	(f) 	
      "GAAP" shall mean United States generally accepted
      accounting principles applied in a manner consistent with prior
      periods;

	 	 	 
	 	(g) 	
      “LA” has the meaning ascribed to it in recital A
      hereto;

	 	 	 
	 	(h) 	
      “Lembas Trust Deed” has the meaning ascribed to in
      Section 3.7 hereto;

	 	 	 
	 	(i) 	
      “Merger” has the meaning ascribed to it in Recital A
      hereto;

	 	 	 
	 	(j) 	
      “Nevada Law” has the meaning ascribed to it in Section
      2.1 hereto;

	 	 	 
	 	(k) 	
      "SEC" shall mean the United States Securities and
      Exchange Commission;

	 	 	 
	 	(l) 	
      "Securities Act" shall mean the United States Securities
      Act of 1933, as amended;

	 	 	 
	 	(m) 	
      “SMC Common Stock” has the meaning ascribed to it in
      Section 4.3 hereto;

	 	 	 
	 	(n) 	
      “SMC Merger Shares” has the meaning ascribed to it in
      Section 2.8 hereto;

	 	 	 
	 	(o) 	
      “Surviving Entity” has the meaning ascribed to it in
      Section 2.1 hereto;

	 	 	 
	 	(p) 	
      “TI Common Stock” shall have the meaning ascribed to it
      in Section 3.3 hereto; and

	 	 	 
	 	(q) 	
      “TI Financial Statements” shall mean the audited
      financial statements of TI for the years ended December 31, 2006 and
      December 31, 2005 attached as Schedule C hereto.

     1.2 Schedules. The
following schedules are attached to and form part of this Agreement: 

Schedule A – Description of the
  Property

  Schedule B – Articles of Merger

  Schedule C – TI Financial Statements

  Schedule D – Investor Representation Certificate 

     1.3 Currency. All dollar
amounts referred to in this Agreement are in United States funds, unless
expressly stated otherwise. 

ARTICLE 2.
THE MERGER 

     2.1 The Merger. At the
Effective Time, TI will be merged with and into SMC Sub in accordance with this
Agreement, the Articles of Merger in substantially the form of Schedule B
attached hereto (the “Articles of Merger”), and the applicable provisions of
Chapter 92A of the Nevada Revised Statutes (the “Nevada Law”). Following the
Merger, SMC Sub will continue as the surviving entity (the 

Page 2 of 12 

“Surviving Entity”) and the separate existence of TI will
cease, except insofar as it may be continued by Nevada Law. 

     2.2 Closing. As soon as
practicable following the satisfaction or waiver of the conditions set forth in
Article 5 of this Agreement, and provided that this Agreement has not been
terminated pursuant to Article 7, the parties to this Agreement will hold
a closing (the “Closing”) for the purpose of confirming the consummation of the
Merger at a time and date mutually agreed upon by the parties. Unless otherwise
agreed by the parties, the Closing will take place at the offices of SMC Sub or
at such other location as agreed to by the parties. The date on which the
Closing actually occurs is referred to as the “Closing Date.” At the
Closing, the parties will execute and exchange all documents, certificates and
instruments contemplated by this Agreement. The parties agree to use
commercially reasonable efforts and all due diligence to cause the Closing to be
consummated on or before February 15, 2007 unless such date is extended by the
mutual agreement of the parties. 

     2.3 Effective Time of the
Merger. The Merger will be effective at the time (the “Effective Time”) of
the filing of the Articles of Merger with the Secretary of State of the State of
Nevada, which Articles of Merger will be filed as soon as practicable on or
after the Closing Date. 

     2.4 Effect of the Merger.
The Merger will have the effect set forth in Section 92A.250 of Nevada Law.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time all the property, rights, privileges, powers and franchises of
SMC Sub and TI will vest in the Surviving Entity without further act or deed,
and all debts, liabilities and duties of SMC Sub and TI will become the debts,
liabilities and duties of the Surviving Entity. As a result or the Merger, the
Surviving Entity will be the wholly-owned subsidiary of SMC. 

     2.5 Constating Documents. 

     (a) The articles of organization of
SMC Sub as in effect immediately prior to the Effective Time will continue
unchanged, except to the extent amended by the Articles of Merger, and will be
the articles of organization of the Surviving Entity until thereafter amended in
accordance with the terms thereof and in accordance with applicable law.

     (b) At the Effective Time, the by-laws
of SMC Sub or such other constating documents of SMC Sub (collectively the
“Constating Documents”), as in effect immediately prior to the Effective Time,
will be the Constating Documents of the Surviving Entity until thereafter
amended in accordance with the terms thereof and in accordance with applicable
law. 

     2.6 Manager. The manager
of the Surviving Entity after the Effective Time will be SMC. SMC, as the
sole member of SMC Sub, by approving the Merger has approved SMC as manager of
the Surviving Entity and will take any further action in order to ensure the
proper appointment of such manager for the Surviving Entity. 

     2.7 Taking of Necessary
Action. If after the Effective Time any further action is necessary to carry
out the purposes of this Agreement or to vest the Surviving Entity with full
title to all assets, rights, approvals, immunities and franchises of either SMC
Sub or TI, the officers and directors, manager and members, or the former
officers, directors, managers or members, as the case may be, of SMC and VRIC,
shall cause SMC Sub and TI and the Surviving Entity to take all such necessary
action. 

     2.8 Merger Consideration.
The Merger consideration shall be as follows: (i) each share of TI Common Stock
issued and outstanding immediately prior to the Effective Time will, by virtue
of the Merger and without any action on the part of the holder thereof, be
converted into 16,825 shares of SMC Common Stock (the “SMC Merger Shares”), and
(ii) SMC shall grant the royalties and make the payments to VRIC referred to in
Section 3 of the LA. All certificates representing the shares of SMC Common
Stock issued on effectiveness of the Merger will be endorsed with the following
legend pursuant to the Securities Act in order to reflect that the fact that the
SMC Merger Shares will be issued to the shareholder of TI or its designees
pursuant to exemptions or safe harbours from the registration requirements of
the Securities Act: 

	
      

	
      “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
      NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT"),
      AND HAVE BEEN 
	
      

Page 3 of 12 

	
       
	
      ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE
      REGISTRATION REQUIREMENTS OF THE ACT PROVIDED BY REGULATION D OF
      THE ACT. SUCH SECURITIES MAY NOT BE REOFFERED FOR SALE OR RESOLD OR
      OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
      UNDER THE ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM
      REGISTRATION UNDER THE ACT.” 
	
       

     2.9 Stock Certificate
Conversion Procedure. At Closing, each holder of TI Common Stock will be
entitled to exchange his, her, or its certificate representing the TI Common
Stock (the “TI Stock Certificate”) for a certificate representing the number of
shares of SMC Common Stock into which the number of shares of TI Common Stock
previously represented by such certificate surrendered have been converted
pursuant to Section 2.8 of this Agreement. Each holder of TI Common Stock may
exchange his, her or its TI Stock Certificate by delivering such TI Stock
Certificate to SMC duly endorsed in blank (or accompanied by duly executed stock
powers duly endorsed in blank), in each case in proper form for transfer, with
signatures guaranteed, and, if applicable, with all stock transfer and any other
required documentary stamps affixed thereto and with appropriate instructions to
allow the transfer agent to issue certificates for the SMC Common Stock to the
holder thereof together with a Regulation D Investment Letter , a copy of which
is attached hereto in Schedule D. Until surrendered as contemplated by
this Section 2.9, each TI Stock Certificate will be deemed at any time after the
Effective Time to represent only the right to receive SMC Common Stock
certificates representing the number of whole shares of SMC Common Stock into
which the shares of TI Common Stock formerly represented by such certificate
have been converted. Upon receipt of such duly endorsed TI Stock Certificates,
SMC will cause the issuance of the number of shares of SMC Common Stock as
converted pursuant to Section 2.8 of this Agreement.

     2.10 No Further Ownership
Rights in TI Common Stock. The promise to exchange the TI Common Stock for
shares of SMC in accordance with the terms of this Agreement will be deemed to
have been given in full satisfaction of all rights pertaining to the TI Common
Stock, and there will be no further registration of transfers on the stock
transfer books of TI of the shares of TI Common Stock that were outstanding
immediately prior to the Effective Time. From and after the Effective Time, the
holders of TI Common Stock outstanding immediately prior to the Effective Time
will cease to have any rights with respect to such TI Common Stock, except as
otherwise provided in this Agreement or by law. 

     2.11 Rule 144 Stock. As
long as VRIC or its designees (the “SMC Shareholders”) own the SMC Merger
Shares, SMC covenants to timely file (or obtain extensions in respect thereof
and file within the applicable grace period) all reports required to be filed by
SMC after the date hereof pursuant to the Exchange Act, and, if SMC is not
required to file reports pursuant to the Exchange Act, it will prepare and
furnish to the SMC Shareholders and make publicly available in accordance with
Rule 144(c) of the Securities Act such information as is required for the SMC
Shareholders to sell the SMC Merger Shares under Rule 144 of the Securities Act.
SMC further covenants that at such time as any of SMC Merger Shares become
available for resale in accordance with the terms and conditions of Rule 144 of
the Securities Act, SMC will take such further action as any holder of SMC
Merger Shares may reasonably request, to the extent required from time to time
to enable such person to sell such SMC Merger Shares without registration under
the Securities Act pursuant to the requirements of Rule 144 of the Securities
Act. 

ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF TI

     TI represents and warrant to SMC
Sub, and acknowledges that SMC Sub is relying upon such representations and
warranties, in connection with the execution, delivery and performance of this
Agreement, notwithstanding any investigation made by or on behalf of SMC Sub, as
follows: 

     3.1 Organization and Good
Standing. TI is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction and has all requisite corporate
power and authority to own, lease and to carry on its business as now being
conducted. TI is duly qualified to do business and is in good standing in each
of the jurisdictions in which it owns property, leases property, does business,
or is otherwise required to do so, where the failure to be so qualified would
have a material adverse effect on the business of TI taken as a whole.

Page 4 of 12 

     3.2 Authority. TI has all
requisite corporate power and authority to execute and deliver this Agreement
and any other document contemplated by this Agreement (collectively, the “TI
Merger Documents”) to be signed by TI and to perform its obligations thereunder
and to consummate the Merger contemplated thereby. The execution and delivery of
each of the TI Merger Documents by TI and the consummation of the Merger
contemplated thereby have been duly authorized by its Board of Directors and
sole shareholder. No other corporate or shareholder proceedings on the part of
TI is necessary to authorize such documents or to consummate the Merger
contemplated thereby. This Agreement has been, and the other TI Merger Documents
when executed and delivered by TI as contemplated by this Agreement will be,
duly executed and delivered by TI and this Agreement is, and the other TI Merger
Documents when executed and delivered as contemplated hereby will be, the valid
and binding obligation of TI enforceable in accordance with their respective
terms, except (1) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors' rights generally, (2) as limited by laws relating to
the availability of specific performance, injunctive relief, or other equitable
remedies, and (3) as limited by public policy. 

     3.3 Capitalization of TI.
The entire authorized capital stock and other equity securities of TI consists
of 1,000 shares of TI Common Stock, par value of $1.00 per share (the “TI Common
Stock”). There are 1,000 shares of TI Common Stock issued and outstanding as of
the date of this Agreement, all of which are owned by VRIC. There are no
outstanding options, warrants, subscriptions, conversion rights, or other
rights, agreements, or commitments obligating TI to issue any additional shares
of TI Common Stock, or any other securities convertible into, exchangeable for,
or evidencing the right to subscribe for or acquire from TI any shares of TI
Common Stock. 

     3.4 No Subsidiaries. TI does
not have any subsidiaries. 

     3.5 Actions and
Proceedings. There is no claim, charge, arbitration, grievance, action,
suit, investigation or proceeding by or before any court, arbiter,
administrative agency or other governmental authority now pending or, to the
best knowledge of TI, threatened against TI or which involves any of the
business, or the properties or assets of TI. 

     3.6 Compliance. TI has
operated in material compliance with all laws, rules, statutes, ordinances,
orders and regulations applicable to its business. TI has not received any
notice of any violation thereof, nor is TI aware of any valid basis therefore.

     3.7 Property. TI is the
legal and beneficial owner of the Property free and clear of all liens, charges,
encumbrances and security interests other than the Deed of Trust in favour of
Gerald A. Lembas dated August 15, 1989 (the “Lembas Trust Deed”), the Effluent
Lease with the Town of Clarkdale, and other matters of public record as
disclosed to SMC and as disclosed in the TI Financial Statements. No taxes or
other amounts are due or payable with respect to the Property. TI has not done
anything to encumber or prejudice the Property. TI has not entered into any
agreement regarding any sale, lease, assignment or option of the Property. 

     3.8 Financial
Representations. TI does not have aggregate liabilities or obligations
either direct or indirect, matured or unmatured, absolute, contingent or
otherwise, other than as disclosed in the TI Financial Statements. For purposes
of this Agreement, the term “liabilities” includes, any direct or indirect
indebtedness, guaranty, endorsement, claim, loss, damage, deficiency, cost,
expense, obligation or responsibility, fixed or unfixed, known or unknown,
asserted choate or inchoate, liquidated or unliquidated, secured or unsecured.

     3.9 Absence of Changes. Since
the date of the LA, TI has not: 

	 	(a) 	
      incurred any liabilities;

	 	 	 
	 	(b) 	
      sold, encumbered, assigned or transferred any of its
      assets;

Page 5 of 12 

	 	(c) 	
      created, incurred, assumed or guaranteed any indebtedness
      for money borrowed, or mortgaged, pledged or subjected any of the assets
      or properties of TI to any mortgage, lien, pledge, security interest,
      conditional sales contract or other encumbrance of any nature
      whatsoever;

	 	 	 
	 	(d) 	
      declared, set aside or paid any dividend;

	 	 	 
	 	(e) 	
      entered into any agreement or contract; or

	 	 	 
	 	(f) 	
      agreed, whether in writing or orally, to do any of the
      foregoing.

     3.10 Employees and Consultants.
TI has no employees or consultants. 

     3.11 Certain Transactions.
TI has not entered into any agreement with either VRIC or any members of VRIC,
or any entity controlled by any of such persons. 

     3.12 Completeness of
Disclosure. No representation or warranty by TI in this Agreement nor any
certificate, schedule, statement, document or instrument furnished or to be
furnished to SMC or SMC Sub pursuant to this Agreement contains or will contain
any untrue statement of a material fact or omits or will omit to state a
material fact required to be stated herein or therein or necessary to make any
statement herein or therein not materially misleading. TI has received all the
information they consider necessary or appropriate for deciding whether to
execute this Agreement. TI further represents that they have had an opportunity
to ask questions and receive answers from SMC or SMC Sub regarding the terms and
conditions of the Merger and the business, properties, prospects and financial
condition of SMC or SMC Sub.

ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF SMC
and SMC SUB 

SMC and SMC Sub represent and warrant to TI and acknowledge
that TI is relying upon such representations and warranties in connection with
the execution, delivery and performance of this Agreement, notwithstanding any
investigation made by or on behalf of TI, as follows: 

     4.1 Organization and Good
Standing. SMC and SMC Sub are each duly organized, validly existing and in
good standing under the laws of Nevada and have all requisite power and
authority to own, lease and to carry on its respective businesses as now being
conducted. SMC is duly qualified to do business and is in good standing in each
of the jurisdictions in which it owns property, leases property, does business,
or is otherwise required to do so, where the failure to be so qualified would
have a material adverse effect on the businesses, operations, or financial
condition of SMC. SMC Sub has not carried on any business or acquired any assets
or incurred any liabilities since its formation, other than by reason of
execution of this Agreement. 

     4.2 Authority. SMC and SMC
Sub have all requisite power and authority to execute and deliver this Agreement
and/or any other document contemplated by this Agreement (collectively, the “SMC
Merger Documents”) to be signed by SMC Sub or SMC to perform their obligations
thereunder and to consummate the Merger contemplated thereby. The execution and
delivery of each of the SMC Merger Documents by SMC Sub and/or SMC and the
consummation by SMC Sub of the Merger contemplated thereby have been duly
authorized by their Board of Directors and no other corporate or
shareholder/member proceedings on the part of SMC or SMC Sub are necessary to
authorize such documents or to consummate the Merger contemplated thereby. This
Agreement has been, and the other SMC Merger Documents when executed and
delivered by SMC Sub as contemplated by this Agreement will be, duly executed
and delivered by SMC Sub and this Agreement is, and the other SMC Merger
Documents when executed and delivered by SMC Sub, as contemplated hereby will
be, the valid and binding obligations of SMC and SMC Sub enforceable in
accordance with their respective terms, except (1) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws of general
application affecting enforcement of creditors' rights generally, (2) as limited
by laws relating to the availability of specific performance, injunctive relief,
or other equitable remedies, and (3) as limited by public policy. 

     4.3 Authorized Capital.
  The entire authorized capital stock of SMC consists of 400,000,000 shares of
  common stock, par value $0.001 (the “SMC Common Stock”). There are
  84,056,000 shares of SMC 

Page 6 of 12 

Common Stock issued and outstanding as of the date of this
Agreement. All of the issued and outstanding shares of SMC have been duly
authorized, are validly issued, were not issued in violation of any pre-emptive
rights and are fully paid and non-assessable, are not subject to pre-emptive
rights and were issued in full compliance with all federal, state, and local
laws, rules and regulations.

     4.4 Validity of SMC Common
Stock Issuable upon the Merger. The shares of SMC Common Stock to be issued
upon consummation of the Merger in accordance with this Agreement will, upon
issuance, have been duly and validly authorized and, when so issued in
accordance with the terms of this Agreement, will be duly and validly issued,
fully paid and non-assessable. 

     4.5 Actions and
Proceedings. There is no claim, charge, arbitration, grievance, action,
suit, investigation or proceeding by or before any court, arbiter,
administrative agency or other governmental authority now pending or, to the
best knowledge of SMC or SMC Sub, threatened against SMC or SMC Sub which
involves any of the business, or the properties or assets of SMC or SMC Sub
that, if adversely resolved or determined, would have a material adverse effect
on the business, operations, assets, properties, prospects or conditions of SMC
or SMC Sub taken as a whole. There is no reasonable basis for any claim or
action that, based upon the likelihood of its being asserted and its success if
asserted, would have such a material adverse effect. 

     4.6 No Outstanding Agreements.
No person, firm or corporation has any agreement or option or any right or
privilege (whether by law, pre-emptive or contractual) capable of becoming an
agreement or option for the purchase from SMC of any of the SMC Sub Stock. 

     4.7 Financial
Representations. SMC does not have aggregate material liabilities or
obligations either direct or indirect, matured or unmatured, absolute,
contingent or otherwise, other than as disclosed in its financial statements and
other reports filed with the SEC. For purposes of this Agreement, the term
“liabilities” includes, any direct or indirect indebtedness, guaranty,
endorsement, claim, loss, damage, deficiency, cost, expense, obligation or
responsibility, fixed or unfixed, known or unknown, asserted choate or inchoate,
liquidated or unliquidated, secured or unsecured. 

     4.8 Completeness of
Disclosure. No representation or warranty by SMC or SMC Sub in this
Agreement nor any certificate, schedule, statement, document or instrument
furnished or to be furnished to TI pursuant hereto contains or will contain any
untrue statement of a material fact or omits or will omit to state a material
fact required to be stated herein or therein or necessary to make any statement
herein or therein not materially misleading. SMC further represents that they
have had an opportunity to ask questions and receive answers from TI or VRIC
regarding the terms and conditions of the Merger and the business, properties,
prospects and financial condition of TI.

ARTICLE 5.
CLOSING CONDITIONS 

     5.1 Conditions Precedent to
Closing by SMC and SMC Sub. The obligations of SMC Sub to consummate the
Merger is subject to the satisfaction of the conditions set forth below, unless
any such condition is waived by SMC Sub at the Closing. The Closing of the
Merger contemplated by this Agreement will be deemed to mean a waiver of all
conditions to Closing. These conditions of closing are for the benefit of SMC
and SMC Sub and may be waived by SMC or SMC Sub in their discretion. 

	 	(a) 	
      Representations and Warranties. The
      representations and warranties of TI set forth in this Agreement will be
      true, correct and complete in all respects as of the Closing Date, as
      though made on and as of the Closing Date and TI will have delivered to
      SMC a certificate dated as of the Closing Date, to the effect that the
      representations and warranties made by TI in this Agreement are true and
      correct.

	 	 	 
	 	(b) 	
      Performance. All of the covenants and obligations
      that TI are required to perform or to comply with pursuant to this
      Agreement at or prior to the Closing must have been performed and complied
      with in all material respects.

	 	 	 
	 	(c) 	
      Merger Documents. This Agreement and all other TI
      Merger Documents necessary or reasonably required to consummate the
      Merger, all in form and substance

Page 7 of 12 

	 		
      reasonably satisfactory to SMC Sub, will have been
      executed and delivered to SMC Sub.

	 	 	 
	 	(d) 	
      Compliance with Securities Laws. SMC Sub will have
      received evidence satisfactory to SMC Sub that all shares of SMC Common
      Stock issuable in the Merger will be issuable without registration
      pursuant to the Securities Act in reliance on the exemptions from the
      registration requirements of the Securities Act provided by Rule 506 of
      Regulation D. In order to establish the availability of an exemption or
      safe harbour from the registration requirements of the Securities Act for
      each issuance of SMC Common Stock to VRIC or its designees, VRIC will
      deliver to SMC on Closing investment representation certificates in the
      form attached as Schedule D hereto.

	 	 	 
	 	(e) 	
      Delivery of Financial Statements. TI will have
      delivered to SMC such financial statements as, in the opinion of the
      auditors for SMC, are required to permit SMC to make the necessary filings
      under the Exchange Act in connection with the Merger.

	 	 	 
	 	(f) 	
      No Action. No suit, action, or proceeding will be
      pending or threatened before any governmental or regulatory authority
      wherein an unfavorable judgment, order, decree, stipulation, injunction or
      charge would (i) prevent the consummation of any of the Merger
      contemplated by this Agreement, or (ii) cause the Merger to be rescinded
      following consummation.

     5.2 Conditions Precedent to
Closing by TI. The obligation of TI to consummate the Merger is
subject to the satisfaction of the conditions set forth below, unless such
condition is waived by TI at the Closing. The Closing of the Merger will be
deemed to mean a waiver of all conditions to Closing. These conditions precedent
are for the benefit of TI may be waived by TI in its discretion. 

	 	(a) 	
      Representations and Warranties. The
      representations and warranties of SMC and SMC Sub set forth in this
      Agreement will be true, correct and complete in all respects as of the
      Closing Date, as though made on and as of the Closing Date and SMC and SMC
      Sub will have delivered to TI a certificate dated the Closing Date, to the
      effect that the representations and warranties made by SMC Sub in this
      Agreement are true and correct.

	 	 	 
	 	(b) 	
      Performance. All of the covenants and obligations
      that SMC Sub are required to perform or to comply with pursuant to this
      Agreement at or prior to the Closing must have been performed and complied
      with in all material respects. SMC Sub must have delivered the documents
      required to be delivered by them pursuant to this Agreement.

	 	 	 
	 	(c) 	
      Merger Documents. This Agreement and all SMC
      Merger Documents, all in form and substance reasonably satisfactory to TI,
      will have been executed and delivered by SMC Sub.

	 	 	 
	 	(d) 	
      No Action. No suit, action, or proceeding will be
      pending or threatened before any governmental or regulatory authority
      wherein an unfavorable judgment, order, decree, stipulation, injunction or
      charge would (i) prevent the consummation of any of the Merger
      contemplated by this Agreement, or (ii) cause the Merger to be rescinded
      following consummation.

ARTICLE 6.
CLOSING 

     6.1 Closing. The Closing
shall take place on the Closing Date at the offices of SMC Sub or at such other
location as agreed to by the parties. Notwithstanding the location of the
Closing, each party agrees that the Closing may completed by the exchange of
undertakings between the respective legal counsel for TI and SMC Sub, provided
such undertakings are satisfactory to each party’s respective legal counsel.

Page 8 of 12 

     6.2 Closing Deliveries of
TI. At Closing, TI will deliver or cause to be delivered the following,
fully executed and in form and substance reasonably satisfactory to SMC Sub:

	 	(a) 	
      copies of all resolutions and/or consent actions adopted
      by or on behalf of the boards of directors and the sole shareholder of TI
      evidencing approval of this Agreement and the Merger;

	 	 	 
	 	(b) 	
      the certificates required by Section 5.1(a);

	 	 	 
	 	(c) 	
      the Articles of Merger duly executed by TI and any other
      TI Merger Documents, each duly executed by TI, as required to give effect
      to the Merger;

	 	 	 
	 	(d) 	
      share certificates representing all of the issued and
      outstanding TI Common Stock;

	 	 	 
	 	(e) 	
      Deed of Release and Reconveyance, Affidavit, Bill of Sale
      and/or special warranty deed in form satisfactory to SMC affirming the
      transfer of all of the assets of TI to SMC Sub and the release of the
      Lembas Trust Deed pursuant to the terms of this agreement and the LA;
      and

	 	 	 
	 	(f) 	
      Receipt of confirmation from an Arizona title insurance
      company that they are in a position to issue title insurance for the
      Property to SMC or SMC Sub in a form satisfactory to
SMC.

     6.3 Closing Deliveries of SMC
and SMC Sub. At Closing, SMC and SMC Sub will deliver or cause to be
delivered the following, fully executed and in form and substance reasonably
satisfactory to TI: 

	 	(a) 	
      copies of all resolutions and/or consent actions adopted
      by or on behalf of the boards of directors of SMC and the member and
      manager of SMC Sub evidencing approval of this Agreement and the
      Merger;

	 	 	 
	 	(b) 	
      the certificates required by Section 5.2(a);

	 	 	 
	 	(c) 	
      the Articles of Merger duly executed by SMC Sub and any
      other SMC Merger Documents, each duly executed by SMC Sub, as required to
      give effect to the Merger;

	 	 	 
	 	(d) 	
      share certificates of SMC representing 16,825,000 shares
      of SMC Common Stock registered in the name of VRIC or its designees;
      and

	 	 	 
	 	(e) 	
      a check or evidence of a wire transfer addressed to VRIC
      or its nominees in the amount of $9,900,000.

ARTICLE 7
TERMINATION 

     7.1 Termination. This
Agreement may be terminated at any time prior to the Closing Date contemplated
hereby by: 

	 	(a) 	
      mutual agreement of SMC Sub and TI;

	 	 	 
	 	(b) 	
      SMC Sub, if there has been a breach by TI of any material
      representation, warranty, covenant or agreement set forth in this
      Agreement on the part of TI that is not cured, to the reasonable
      satisfaction of SMC Sub, within ten business days after notice of such
      breach is given by SMC Sub (except that no cure period will be provided
      for a breach by TI that by its nature cannot be cured);

	 	 	 
	 	(c) 	
      TI, if there has been a breach by SMC Sub of any material
      representation, warranty, covenant or agreement set forth in this
      Agreement on the part of SMC Sub that is not

Page 9 of 12 

	 		
      cured by the breaching party, to the reasonable
      satisfaction of TI, within ten business days after notice of such breach
      is given by TI (except that no cure period will be provided for a breach
      by SMC Sub that by its nature cannot be cured); or

	 	 	 
	 	(d) 	
      SMC Sub or TI if any permanent injunction or other order
      of a governmental entity of competent authority preventing the
      consummation of the Merger contemplated by this Agreement has become final
      and nonappealable.

     7.2 Effect of Termination.
In the event of the termination of this Agreement as provided in Section 7.1,
this Agreement will be of no further force or effect, provided, however, that no
termination of this Agreement will relieve any party of liability for any
breaches of this Agreement that are based on a wrongful refusal or failure to
perform any obligations. 

ARTICLE 8.
MISCELLANEOUS PROVISIONS 

     8.1 Effectiveness of
Representations; Survival. Each party is entitled to rely on the
representations, warranties and agreements of each of the other parties and all
such representation, warranties and agreement will be effective regardless of
any investigation that any party has undertaken or failed to undertake. The
representation, warranties and agreements will survive the Closing Date and
continue in full force and effect until one (1) year after the Closing Date.

     8.2 Further Assurances.
Each of the parties hereto will cooperate with the others and execute and
deliver to the other parties hereto such other instruments and documents and
take such other actions as may be reasonably requested from time to time by any
other party hereto as necessary to carry out, evidence, and confirm the intended
purposes of this Agreement. 

     8.3 Amendment. This
Agreement may not be amended except by an instrument in writing signed by each
of the parties. 

     8.4 Expenses. Each party
to this Agreement will bear its respective expenses incurred in connection with
the preparation, execution, and performance of this Agreement and the Merger
contemplated hereby, including all fees and expenses of agents, representatives,
counsel, and accountants. 

     8.5 Entire Agreement. This
Agreement, the exhibits, schedules attached hereto and the other Merger
Documents contain the entire agreement between the parties with respect to the
subject matter hereof and supersede all prior arrangements and understandings,
both written and oral, expressed or implied, with respect thereto. Any preceding
correspondence or offers are expressly superseded and terminated by this
Agreement. 

     8.6 Notices. All notices
and other communications required or permitted under to this Agreement must be
in writing and will be deemed given if sent by personal delivery, faxed with
electronic confirmation of delivery, internationally-recognized express courier
or registered or certified mail (return receipt requested), postage prepaid, to
the parties at the following addresses (or at such other address for a party as
will be specified by like notice): 

If to TI or VRIC: 

TRANSYLVANIA INTERNATIONAL,
INC.
#120 - 2441 W. Horizon Ridge Pkwy, Henderson, NV 89052
Attention:
Harry Crockett 
Telephone: 702-939-5247 
Facsimile: 702-939-5249 

If to SMC or SMC SUB:

CLARKDALE MINERALS LLC
#120 - 2441
W. Horizon Ridge Pkwy, Henderson, NV 89052
Attention: Ian McNeil, Manager

Page 10 of 12 

Telephone: 702-939-5247
Facsimile:
702-939-5249 

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

Conrad Y. Nest, Esq. 
O'Neill Law
Group PLLC
435 Martin Street, Suite 1010
Blaine, Washington 98230 

Telephone: (330)
360-3300
Facsimile: (330) 332-2291
E-Mail: cyn@stockslaw.com 

All such notices and other communications will be deemed to
have been received (a) in the case of personal delivery, on the date of such
delivery, (b) in the case of a fax, when the party sending such fax has received
electronic confirmation of its delivery, (c) in the case of delivery by
internationally-recognized express courier, on the business day following
dispatch and (d) in the case of mailing, on the fifth business day following
mailing. 

     8.7 Headings. The headings
contained in this Agreement are for convenience purposes only and will not
affect in any way the meaning or interpretation of this Agreement. 

     8.8 Benefits. This
Agreement is and will only be construed as for the benefit of or enforceable by
those persons party to this Agreement. 

     8.9 Assignment. This
Agreement may not be assigned (except by operation of law) by any party without
the consent of the other parties. 

     8.10 Governing Law. This
Agreement will be governed by and construed in accordance with the laws of the
State of Nevada applicable to contracts made and to be performed therein. 

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

     8.12 Counterparts. This
Agreement may be executed in one or more counterparts, all of which will be
considered one and the same agreement and will become effective when one or more
counterparts have been signed by each of the parties and delivered to the other
parties, it being understood that all parties need not sign the same
counterpart. 

     8.13 Fax Execution. This
Agreement may be executed by delivery of executed signature pages by fax and
such fax execution will be effective for all purposes. 

Page 11 of 12 

     8.14 Schedules and
Exhibits. The schedules and exhibits are attached to this Agreement and
incorporated herein. 

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

	CLARKDALE MINERALS LLC 	 	VERDE RIVER IRON COMPANY, LLC 
	A Nevada Limited Liability Company by its authorized 	 	A Nevada Limited Liability Company by its
      authorized 
	signatory: 	 	signatory: 
	 	 	 
	/s/ Ian McNeil 	 	/s/ Harry B. Crockett 
	Signature of Authorized Signatory 	 	Signature of Authorized Signatory 
	 	 	 
	Ian McNeil 	 	Harry B. Crockett 
	Name of Authorized Signatory 	 	Name of Authorized Signatory 
	 	 	 
	Manager	 	Manager
	Position of Authorized Signatory 	 	Position of Authorized Signatory 
	 	 	 
	 	 	 
	SEARCHLIGHT MINERALS CORP. 	 	TRANSYLVANIA INTERNATIONAL, INC. 
	a Nevada corporation by its authorized signatory: 	 	a Nevada corporation by its authorized
      signatory: 
	 	 	 
	/s/ Ian McNeil 	 	/s/ Harry B. Crockett 
	Signature of Authorized Signatory 	 	Signature of Authorized Signatory 
	 	 	 
	Ian McNeil 	 	Harry B. Crockett 
	Name of Authorized Signatory 	 	Name of Authorized Signatory 
	 	 	 
	President 	 	President 
	Position of Authorized Signatory 	 	Position of Authorized Signatory

Page 12 of 12 

	SCHEDULE “A” 
	to the Agreement and Plan of Merger dated February 15,
      2007 
	among Searchlight Minerals Corp., Verde River Iron
      Company, LLC, 
	Clarkdale Minerals LLC and Transylvania International,
      Inc. 
	  
	DESCRIPTION OF PROPERTY 

All capitalized terms referenced herein shall have the meaning
  ascribed to such terms in the Agreement and Plan of Merger dated February 15,
  2007 among Searchlight Minerals Corp., Verde River Iron Company, LLC, Clarkdale
  Minerals LLC and Transylvania International, Inc. to which this Schedule “A”
  is attached. 

Real Estate Assets 

PARCEL I:

Lots 1 and 2, Block 44, TOWN OF CLARKDALE, according to the plat
  of record in Book 5 of Maps, page 85, records of Yavapai County, Arizona.

PARCEL II: 

A portion of the Northeast quarter of Section 20, Township 16
  North, Range 3 East of the Gila and Salt River Base and Meridian, Yavapai County,
  Arizona, more particularly described as follows: 

COMMENCING at the East one-quarter corner of said Section 20;

Thence South 88°51’07” West, along the
  East-West mid-section line of said Section 20, a distance of 539.91 feet to
  the TRUE POINT OF BEGINNING; 

Thence continuing South 88°51’07” West,
  along said mid-section line, a distance of 500.74 feet to a point on the Northeasterly
  right of way line of Old Highway 89A; 

Thence Northwesterly, along said right of way line, on a curve
  to the left, having a radius of 3920.23 feet, through a central angle of 01°30’45”,
  a distance of 103.48 feet; 

Thence Northwesterly, along said right of way line, on a curve
  to the left, having a radius of 2964.79 feet, through a central angle of 12°01’32”,
  a distance of 622.26 feet; 

Thence Northwesterly, along said right of way line on a curve
  to the left, having a radius of 3920.23 feet, through a central angle of 06°00’00”,
  a distance of 410.53 feet; 

Thence North 62°56’30” West, along said
  right of way, a distance of 534.11 feet to the Southwest corner of Lot 1, Block
  13, Town of Clarkdale, as recorded in Book 5 of Maps and Plats, page 85, records
  of Yavapai County, Arizona; 

Thence North 81°24’36” East, along the
  Southerly boundary of Blocks 13, 12 and 3 in the Town of Clarkdale, a distance
  of 1245.88 feet; 

Thence South 36°03’42” East, a distance
  of 455.69 feet to a point on the boundary of Rio Vista Subdivision, Parcel 2,
  which lies North 60°23’59” East, a distance of 20.00 feet
  from the Northeast corner of Lot 1 in Rio Vista Subdivision, Parcel 2; 

Thence South 60°23’59” West, along the
  Northwesterly boundary of Rio Vista Subdivision, Parcel 2, a distance of 158.00
  feet to the Northwest corner of said subdivision; 

A-1 

Thence South 29°36’01” East, along the
  Southwesterly boundary of said subdivision, a distance of 608.84 feet to the
  Southwest corner of said subdivision; 

Thence North 60°23’59” East, along the
  Southeasterly boundary of said subdivision, a distance of 173.59 feet to a point
  on the Southwesterly boundary of Lot 11 in said subdivision; 

Thence South 31°04’02” East, a distance
  of 10.26 feet to the Southwest corner of said Lot 11; Thence North 58°55’58”
  East, a distance of 175.00 feet to the Southeast corner of said Lot 11; 

Thence North 58°55’58” East, a distance
  of 45.99 feet to a point on the Southwesterly right of way line of the Arizona
  Extension Railroad; 

Thence South 36°03’42” East, along said
  right of way line, a distance of 253.38 feet; 

Thence South 69°43’35” West a distance
  of 290.43 feet to the TRUE POINT OF BEGINNING. 

PARCEL III: 

A parcel of land located in the Southeast quarter of Section
  19, and the Southwest quarter of Section 20, Township 16 North, Range 3 East,
  Gila and Salt River Base and Meridian, Yavapai County, Arizona, being more particularly
  described as follows: 

COMMENCING at the Southeast corner of said Section 19; 

Thence South 89°52’33” West (Meas.) (West,
  Rec.) along the South line of said Section 19, a distance of 1,319.58 feet (Meas.)
  (1320 + feet, Rec.), to the South 1/16 corner of said Section 19 and the Southwest
  corner of a parcel of land as recorded in Book 937, pages 709 and 710, records
  of Yavapai County, Arizona; 

Thence North 03°38’09” East, a distance
  of 735.98 feet (Meas.) (North 10°00’ East, 695 plus or minus
  feet, Rec.), to a point on the Northerly right of way line of the Phoenix Cement
  Plant Road and the TRUE POINT OF BEGINNING; 

THENCE North 63°31’29” West (Meas.), (North
  63°27’09” West, Rec.), along said right of way, a distance
  of 719.06 feet to a point of curvature; 

Thence Northwesterly along said right of way on a curve concave
  to the right, having a radius of 2804.79 feet through a central angle of 19°23’15”,
  a distance of 949.07 feet to the Southeasterly 37.50 foot right of way line
  of Main Street; 

Thence North 60°37’00” East, along said
  right of way, a distance of 970.27 feet; 

Thence North 55°37’00” East, along said
  right of way, a distance of 6.51 feet to the Northwest corner of a parcel of
  land as recorded in Book 168, pages 453 and 454, records of Yavapai County,
  Arizona; 

Thence South 34°23’00” East, a distance
  of 640.00 feet (Meas. and Rec.), to the Southwest corner of said parcel of land;

Thence North 55°37’00” East, a distance
  of 900.00 feet (Meas. and Rec.) to the Southeast corner of said parcel of land;

Thence North 55°37’00” East, along an extension
  of the Southerly boundary of said parcel of land, a distance of 122.80 feet
  to the Southerly right of way line of Third South Street in the Town of Clarkdale,
  Arizona; 

A-2 

Thence Easterly, along said right of way on a curve concave to
  the left, having a radius of 240.00 feet through a central angle of 23°30’06”,
  a distance of 98.44 feet; Thence North 73°17’14” East
  (Meas.), (North 73°12’ East Rec.), along said right of way,
  a distance of 92.71 feet; 

Thence Easterly along said right of way on a curve concave to
  the right, having a radius of 115.00 feet through a central angle of 39°24’00”,
  a distance of 79.08 feet (Meas. and Rec.); 

Thence Easterly, along said right of way on a curve concave to
  the left, having a radius of 210.00 feet through a central angle of 44°29’0”
  (Meas.) (24°29’ Rec.) a distance of 163.04 feet (Meas. and
  Rec.); 

Thence North 68°12’14” East (Meas.) (North
  68°07’ East Rec.), along said right of way, a distance of 265.64
  feet (Meas. and Rec.); 

Thence Northeasterly, along said right of way, on a curve concave
  to the left, having a radius of 200.00 feet, through a central angle of 52°52’0”,
  a distance of 184.54 feet (Meas. and Rec.); 

Thence North 15°20’14” East (Meas.) (North
  15°15’ East, Rec.), along said right of way, a distance of
  48.01 feet (Meas. and Rec.), to the Southerly boundary of a parcel of land as
  recorded in Book 337, page 591, records of Yavapai County, Arizona; 

Thence South 52°21’46” East, along said
  Southerly boundary, a distance of 129.56 feet (Meas.), (South 52°27’
  East, 116.90 feet, Rec.) to the Westerly right of way line of Highway 89-A;

Thence South 22°33’53” West, along said
  right of way line, a distance of 135.52 feet to a point on the Northwesterly
  boundary of a parcel of land as recorded in Book 937, pages 709 and 710, records
  of Yavapai County, Arizona; 

Thence South 60°55’31” West (Meas.) (South
  60°29’ West, Rec.) along said boundary, a distance of 770.60
  feet; 

Thence South 36°04’52” West, along said
  boundary, a distance of 1405.64 feet (Meas.) (South 35°14’
  West, 1380.00 feet Rec.) to the TRUE POINT OF BEGINNING. 

PARCEL IV:

A parcel of land located in the North half of Section 20, Township
  16 North, Range 3 East, Gila and Salt River Base and Meridian, Yavapai County,
  Arizona, more particularly described as follows:

Commencing at the intersection of Ninth Street and Main Street
  in the Supplemental Dedication Plat of the Town of Clarkdale as recorded in
  Book 5 of Maps and Plats, Page 83, records of Yavapai County, Arizona; 

Thence North 08°39’46” West, along the
  centerline of said Ninth Street a distance of 37.50 feet to the Northerly boundary
  of Main Street; 

Thence North 81°19’36” East, along said
  Northerly boundary of Main Street, a distance of 30.00 feet to the Easterly
  boundary of Ninth Street and the TRUE POINT OF BEGINNING; 

Thence North 08°39’46” West, along the
  Easterly boundary of Ninth Street, a distance of 131.30 feet;

 Thence North 81°19’36” East, a distance
  of 83.82 feet; 

A-3 

Thence South 07°43’24” East, a distance
  of 29.81 feet; 

Thence North 81°19’36” East, a distance
  of 143.67 feet; 

Thence South 08°39’46” East, a distance
  of 101.49 feet to a point on the Northerly boundary of Main Street; 

Thence South 81°19’36” West, along said
  boundary, a distance of 227.00 feet to the TRUE POINT OF BEGINNING.

PARCEL V: 

A portion of Sections 17, 18, 19 and 20, Township 16 North, Range
  3 East, Gila and Salt River Base and Meridian, Yavapai County, Arizona, more
  particularly described as follows: 

COMMENCING at the Southwest corner of said Section 18; 

Thence North 00°02'56" West, along the West boundary
  of said Section 18, a distance of 181.66 feet (Meas.) (172.80 feet, Record),
  to the TRUE POINT OF BEGINNING; 

Thence continuing North 00°02'56" West, a distance
  of 5096.55 feet to the Northwest corner of said Section 18; 

Thence North 89°59'29" East, along the North boundary
  of said Section 18, a distance of 2517.87 feet to the North one-quarter corner
  of said Section 18; 

Thence North 89°55'05" East, along the North boundary
  of said Section 18, a distance of 2673.48 feet to the Northeast corner of said
  Section 18; 

Thence South 00°06'28" West, along the East boundary
  of said Section 18, a distance of 18.59 feet to a point on the Northeasterly
  right-of-way line of the A.T & S.F. Railroad; 

Thence Southeasterly, along said right-of-way, on a curve to
  the left, having a radius of 1859.86 feet, through a central angle of 06°21'11",
  a distance of 206.22 feet; Thence South 48°45'16" East, along said
  right -of-way, a distance of 962.40 feet; 

Thence Southerly, along said right-of-way, on a curve to the
  right, having a radius of 2914.79 feet, through a central angle of 12°51'24",
  a distance of 654.06 feet to a point on the boundary of the Corporate Limits
  of the Town of Clarkdale; 

Thence along said Corporate Limits of the Town of Clarkdale the
  following courses: 

North 50°46'39" East, a distance of 79.03 feet; 

Thence North 57°55'39" East, a distance of 254.00
  feet; 

Thence North 71°53'39" East, a distance of 292.20
  feet; 

Thence North 86°10'39" East, a distance of 208.10
  feet; 

Thence South 71°26'21" East, a distance of 227.50
  feet; 

Thence South 70°53'21" East, a distance of 143.90
  feet; 

A-4 

Thence South 45°13'16" East, a distance of 722.30
  feet (Meas.) (723.60 feet, Record); 

Thence South 31°52'21" East, a distance of 300.80
  feet; Thence South 10°34'21" East, a distance of 391.10 feet; 

Thence South 07°21'39" West, a distance of 318.20
  feet; Thence South 38°20'39" West, a distance of 460.00 feet; 

Thence South 46°02'21" East, a distance of 158.96
  feet; 

Thence leaving the boundary of the Corporate Limits of the Town
  of Clarkdale, South 25°57'29" West, a distance of 582.76 feet; 

Thence North 41°24'31" West, a distance of 20.17
  feet; 

Thence South 42°23'59" West, a distance of 772.31
  feet to a point on the Easterly right-of-way line of the A.T. & S.F. Railroad;

Thence Northerly, along said right -of-way, on a curve to the
  right, having a radius of 522.96 feet, through a central angle of 05°31'30",
  a distance of 50.43 feet to a point opposite Railroad Station 1995+22.6; 

Thence North 01°51'37" West, along said right-of-way,
  a distance of 114.71 feet to a point opposite Railroad Station 1994+02.6; 

Thence North 00°05'37" East, along said right-of-way,
  a distance of 294.20 feet to a point opposite Railroad Station 1991+08.3; 

Thence Northerly, along said right-of-way, on a curve to the
  left, having a radius of 1482.40 feet, through a central angle of 13°12'00",
  a distance of 341.52 feet to a point opposite Railroad Station 1987+78.3; 

Thence South 79°39'29" West, a distance of 61.69
  feet (Meas.), (62.00 feet, Record) to a point on the Westerly right-of-way line
  of the A.T. & S.F. Railroad; 

Thence Southerly, along said right-of-way line, on a curve to
  the right, having a radius of 486.22 feet, through a central angle of 14°30'00",
  a distance of 123.05 feet to a point opposite Railroad Station 1989+04.4; 

Thence Southerly, along said right-of-way on a curve to the right,
  having a radius of 1420.40 feet, through a central angle of 05°25'00",
  a distance of 134.28 feet to a point opposite Railroad Station 1990+39.0; 

Thence South 06°47'40" West, along said right-of-way,
  a distance of 425.80 feet to a point opposite Railroad Station 1994+64.8; 

Thence North 83°12'20" West, along said right-of-way,
  a distance of 63.00 feet; 

Thence South 06°47'40" West, along said right-of-way,
  a distance of 719.20 feet to a point opposite Railroad Station 2001+84.0; 

Thence Southwesterly, along said right-of-way, on a curve to
  the right, having a radius of 688.94 feet, through a central angle of 39°01'45",
  a distance of 469.30 feet to a point opposite Railroad Station 2007+04.3; 

A-5 

Thence South 45°49'25" West, along said right of
  way, a distance of 530.39 feet to a point opposite Railroad Station 2012+34.69;

Thence South 44°10'35" East, a distance of 25.00
  feet; 

Thence South 45°49'25" West, a distance of 630.04
  feet to a point opposite Railroad Station 2018+73.70; 

Thence Southwesterly, along said right-of-way, on a curve to
  the right, having a radius of 713.94 feet, through a central angle of 09°24'22",
  a distance of 117.21 feet; 

Thence South 34°46'11" East, a distance of 99.20
  feet (Meas.), (100.00 feet, Record); 

Thence South 45°40'02" East, a distance of 644.04
  feet to a point on the Northwesterly boundary of the Town of Clarkdale as recorded
  in Book 5 of Maps, page 83, records of Yavapai County, Arizona; 

Thence South 81°19'28" West, along said Town of Clarkdale
  boundary, a distance of 197.84 feet; 

Thence South 61°10'41" West, along said Town of Clarkdale
  boundary, a distance of 63.88 feet; 

Thence South 66°23'42" West, along said Town of Clarkdale
  boundary, a distance of 393.31 feet; 

Thence South 08°45'38" East, along said Town of Clarkdale
  boundary, a distance of 72.68 feet to the Northeast corner of a parcel as recorded
  in Book 1014 of Deeds, page 358, records of Yavapai County, Arizona; 

Thence South 81°19'01" West, along the North boundary
  of said parcel, a distance of 192.00 feet to the Northwest corner of said parcel;

Thence South 08°45'38" East, along the Westerly boundary
  of said parcel, a distance of 50.00 feet to a point on the Northwesterly boundary
  of the Town of Clarkdale; 

Thence South 81°19'01" West, along said Town of Clarkdale
  boundary, a distance of 550.84 feet; 

Thence North 79°07'02" West, along said Town of Clarkdale
  boundary, a distance of 321.01 feet; 

Thence South 78°44'58" West, along said Town of Clarkdale
  boundary, a distance of 247.18 feet; 

Thence South 55°32'20" West, along said Town of Clarkdale
  boundary, a distance of 866.97 feet to a point on the Northeasterly boundary
  of the Yavapai-Apache Indian Community of the Camp Verde Reservation as recorded
  in Book 544 of Deeds, pages 751 through 756, records of Yavapai County, Arizona;

Thence North 34°54'59" West, along said Reservation
  boundary, a distance of 319.49 feet; 

Thence North 39°05'01" East, along said Reservation
  boundary, a distance of 652.66 feet (Meas.), (655.00 feet, Record), to the centerline
  of the A.T. & S.F. Railroad; 

Thence North 88°39'57" West, along said centerline
  and Reservation boundary, a distance of 96.85 feet (Meas.), (115.06 feet, Record);

Thence Northwesterly, along said centerline and Reservation boundary,
  on a curve to the right, having a radius of 1146.28 feet, through a central
  angle of 33°40'33", a distance of 673.73 feet; 

A-6 

Thence leaving said centerline South 56°21'00" West,
  along said Reservation boundary, a distance of 1923.33 feet to the Northeasterly
  right-of-way line of the Phoenix Cement Plant Road; 

Thence North 24°36'48" West, along said right-of-way,
  a distance of 1066.81 feet; 

Thence Northwesterly, on a curve to the left, having a radius
  of 2964.79 feet, through a central angle of 04°50'53", a distance
  of 250.86 feet to the Southeast corner of a parcel as recorded in Book 251 of
  Deeds, page 420, records of Yavapai County, Arizona; 

Thence North 56°16'50" East, along the Southeasterly
  boundary of said parcel, a distance of 552.40 feet;

 Thence North 40°29'10" West, along the Northeasterly
  boundary of said parcel, a distance of 789.70 feet to a point on the Southeasterly
  boundary of a parcel as recorded in Book 988 of Deeds, page 723, records of
  Yavapai County, Arizona; 

Thence North 43°42'50" East, along the Southeasterly
  boundary of said parcel, a distance of 250.30 feet (Meas.) (250.0 feet, Record),
  to the Northeast corner of said parcel; 

Thence North 50°05'16" West, along the Northerly
  boundary of said parcel, a distance of 780.88 feet (Meas.) (780.69 feet, Record),
  to a point on the South right-of-way of the A.T. & S.F. Railroad; 

Thence Westerly, along said right -of-way, on a curve to the
  left, having a radius of 744.02 feet (Meas. and Record), through a central angle
  of 57°34'54" (Meas.) (57°38'49" Record), a distance
  of 747.73 feet (Meas.) (748.58 feet, Record); 

Thence South 41°00'43" West, along said right-of-way,
  a distance of 68.21 feet (Meas.) (68.30 feet, Record) to the TRUE POINT OF BEGINNING.

EXCEPT FROM PARCELS II, III, IV & V THE FOLLOWING PARCELS:

EXCEPTION PARCEL A: 

A portion of the West half of Section 18, Township 16 North,
  Range 3 East, Gila and Salt River Base and Meridian, Yavapai County, Arizona,
  more particularly described as follows: 

COMMENCING at the Southwest corner of said Section 18; 

Thence North 00°02'56" West, along the West line
  of said Section 18, a distance of 401.50 feet to the Northerly right-of-way
  of the A.T & S.F. Railroad and the TRUE POINT OF BEGINNING; 

Thence continuing North 00°02'56" West, a distance
  of 3258.50 feet; 

Thence North 89°57'04" East, a distance of 400.00
  feet; 

Thence South 36°30'37" East, a distance of 2524.06
  feet; 

Thence South 00°02'56" East, a distance of 1472.72
  feet to the Northerly right-of-way of the A.T. & S.F. Railroad; 

Thence North 48°05'20" West, along said right-of-way,
  a distance of 157.05 feet; 

Thence Westerly, along said right-of-way on a curve to the left,
  having a radius of 894.02 feet (Rec. & Meas.), through a central angle of
  27°56'23" (Meas.) (28°00', Rec.), a distance of 435.96
  feet; 

A-7 

Thence North 76°01'43" West, along said right -of-way,
  a distance of 599.05 feet (Meas.), (597.78 feet, Rec.); 

Thence Southwesterly along said right-of-way on a curve to the
  left, having a radius of 894.02 feet (Rec. & Meas.), through a central angle
  of 56°32'39", a distance of 882.29 feet to the TRUE POINT OF BEGINNING.

EXCEPTION PARCEL B: 

A portion of the West half of Section 18 and 19, Township 16
  North, Range 3 East, Gila and Salt River Base and Meridian, Yavapai County,
  Arizona, more particularly described as follows: 

COMMENCING at the Southwest corner of said Section 18; 

Thence North 00°02'56" West, along the West line
  of said Section 18, a distance of 181.66 feet to the Southerly right-of-way
  of the A.T. & S.F. Railroad; 

Thence North 41°00'43" East, along said right-of-way,
  a distance of 68.21 feet; 

Thence Easterly, along said right-of-way, on a curve to the right,
  having a radius of 744.02 feet (Meas. & Rec.) through a central angle of
  57°34'54", a distance of 747.74 feet to the TRUE POINT OF BEGINNING;

Thence continuing along said right -of-way on a curve to the
  right, having a radius of 744.02 feet (Meas. and Rec.), through a central angle
  of 05°11'50", a distance of 67.49 feet; 

Thence South 76°01'43" East, along said right-of-way,
  a distance of 599.05 feet (Meas.) (597.78 feet, Rec.); 

Thence Southeasterly, along said right -of-way, on a curve to
  the right, having a 744.02 feet (Meas. and Rec.), through a central angle of
  27°56'23" (Meas.), (28’00”, Rec.), a distance of 362.81
  feet; 

Thence South 48°05'20" East, along said right-of-way,
  a distance of 2036.67 feet (Meas.), (2043.43 feet, Rec.); 

Thence Southeasterly, along said right -of-way on a curve to
  the left, having a radius of 1221.28 feet, through a central angle of 05°31'58",
  a distance of 117.93 feet; 

Thence South 56°21'00" West, a distance of 1843.19
  feet to the Easterly right-of-way line of the Cement Plant Road; 

Thence North 24°36'48" West, along said right-of-way,
  a distance of 1066.81 feet; 

Thence Northwesterly, along said right -of-way on a curve to
  the left, having a radius of 2964.79 feet, through a central angle of 04°50'53",
  a distance of 250.86 feet; 

Thence North 56°16'50" East, a distance of 552.40
  feet; 

Thence North 40°29'10" West, a distance of 789.70
  feet; 

Thence North 43°42'50" East, a distance of 250.30
  feet; 

Thence North 50°05'16" West, a distance of 780.88
  feet to the TRUE POINT OF BEGINNING. 

A-8 

EXCEPTION PARCEL C: 

A parcel of land lying in the Northwest quarter of Section 19,
  Township 16 North, Range 3 East, Gila and Salt River Base and Meridian, Yavapai
  County, Arizona, and more particularly described as follows: 

BEGINNING at the Southwest corner of said Northwest quarter;

Thence North 00°01'46" East, along the West line
  of said Northwest quarter, a distance of 212.98 feet; 

Thence North 89°55'09" East, along a line parallel
  with the South line of said Northwest quarter, a distance of 1587.62 feet to
  a point on the Westerly 100-foot right-of-way line of the Phoenix Cement Plant
  Road; 

Thence South 24°30'25" East (Meas.) (South 24°29'45"
  East, Record), a distance of 233.92 feet to a point on the South line of said
  Northwest quarter; 

Thence South 89°55'09" West, along the South line
  of said Northwest quarter, a distance of 1684.76 feet to the TRUE POINT OF BEGINNING.

EXCEPTION PARCEL D: 

A parcel of land located in the Southeast quarter of Section
  19, Township 16 North, Range 3 East, Gila and Salt River Base and Meridian,
  Yavapai County, Arizona, more particularly described as follows: 

COMMENCING at the Southeast corner of said Section 19; 

Thence South 89°52'33" West, along the South line
  of said Section 19, a distance of 1319.58 feet to the South one-sixteenth corner
  of said Section 19 and the Southwest corner of a parcel as recorded in Book
  937, pages 709-710, records of Yavapai County, Arizona; 

Thence North 03°38'09" East, a distance of 735.98
  feet to a point on the Northerly right-of-way line of the Phoenix Cement Plant
  Road; 

Thence North 36°04'52" East, a distance of 647.29
  feet to the TRUE POINT OF BEGINNING; 

Thence North 60°57'30" West, a distance of 431.12
  feet; 

Thence South 62°00'00" West, distance of 520.00 feet;

Thence North 45°48'35" West, a distance of 840.67
  feet to the Southerly right -of-way of Main Street; 

Thence North 60°37'00" East, along said right-of-way,
  a distance of 570.27 feet; 

Thence North 55°37'00" East, along said right-of-way,
  a distance of 6.51 feet; 

Thence South 34°23'00" East, a distance of 740.00
  feet; 

Thence North 55°37'00" East, a distance of 900.00
  feet; 

Thence North 34°23'00" West, a distance of 100.00
  feet; 

Thence North 55°37'00" East, a distance of 122.80
  feet to the South right -of-way of Third South Street in the Town of Clarkdale,
  Arizona; 

A-9 

Thence Easterly, along said right-of-way on a curve to the left,
  having a radius 240.00 feet, through a central angle of 23°30'06",
  a distance of 98.44 feet; 

Thence North 73°17'14" East, along said right-of-way,
  a distance of 92.71 feet; 

Thence Easterly, along said right-of-way, on a curve to the right,
  having a radius of 115.00 feet, through a central angle of 39°24',
  a distance of 79.08 feet; 

Thence Easterly, along said right-of-way on a curve to the left,
  having a radius of 210.00 feet, through a central angle of 44°29',
  distance of 163.04 feet; 

Thence North 68°12'14" East, along said right-of-way,
  a distance of 265.64 feet; 

Thence Northerly, along said right -of-way on a curve to the
  left, having a radius of 200.00 feet, through a central angle of 52°52',
  a distance of 184.54 feet; 

Thence North 15°20'14" East, along said right-of-way,
  a distance of 48.01 feet; 

Thence South 52°21'46" East, a distance of 129.56
  feet to the Westerly right -of-way of Old Highway 89A; 

Thence South 22°33'53" West, along said right-of-way,
  a distance of 135.52 feet; 

Thence South 60°55'31" West, a distance of 770.60
  feet; Thence South 36°04'52" West, a distance of 758.35 feet to
  the TRUE POINT OF BEGINNING. 

EXCEPTION PARCEL E: 

A portion of the Southeast quarter of Section 19, Township 16
  North, Range 3 East of the Gila and Salt River Base and Meridian, Yavapai County,
  Arizona, more particularly described as follows: 

COMMENCING at the Southeast corner of said Section 19; 

Thence South 89°52'33" West, a distance of 1319.58
  feet; 

Thence North 03°38'09" East, a distance of 735.98
  feet to the Northerly right of way line of the Phoenix Cement Plant Road; 

Thence North 63°31'29" West, along said right of
  way line a distance of 719.06 feet; 

Thence Northwesterly, along said right of way line on a curve
  to the right, having a radius of 2804.79 feet, through a central angle of 19°23'15",
  a distance of 949.07 feet; 

Thence North 60°37'00" East, along the Southeasterly
  right of way line of Main Street, a distance of 970.27 feet; 

Thence North 55°37'00" East, along said right of
  way line, a distance of 6.51 feet; 

Thence South 34°23'00" East, a distance of 640.00
  feet to the TRUE POINT OF BEGINNING; 

Thence North 55°37'00" East, a distance of 900.00
  feet; 

Thence South 34°23'00" East, a distance of 100.00
  feet; 

A-10 

Thence South 55°37'00" West, a distance of 900.00
  feet; 

Thence North 34°23'00" West, a distance of 100.00
  feet to the TRUE POINT OF BEGINNING. 

EXCEPTION PARCEL F: 

A parcel of land located in the South half of Section 18 and
  the North half of Section 19, Township 16 North, Range 3 East of the Gila and
  Salt River Base and Meridian, Yavapai County, Arizona, and is more particularly
  described as follows: 

COMMENCING at the North quarter corner of said Section 19; 

Thence South 89°35'38" West, along the North line
  of the Northwest quarter of said Section 19, a distance of 471.13 feet to the
  North right-of-way of the Santa Fe Railway and the TRUE POINT OF BEGINNING;

Thence North 48°05'20" West, along said right of
  way, a distance of 216.02 feet; 

Thence North 00°02'56" West, a distance of 1139.72
  feet; 

Thence South 44°37'12" East, a distance of 666.09
  feet; 

Thence South 51°51'56" East, a distance of 1320.36
  feet; 

Thence South 41°54'40" West, a distance of 894.17
  feet to said right -of-way; 

Thence North 48°05'20" West, along said right-of-way,
  a distance of 1004.31 feet to the TRUE POINT OF BEGINNING. 

EXCEPTION PARCEL G: 

Those portions of the Southwest quarter of Section 17 and the
  Northwest quarter of Section 20, Township 16 North, Range 3 East of the Gila
  and Salt River Base and Meridian, Yavapai County, Arizona, described as follows:

COMMENCING at the Southwest corner of said Section 17; 

Thence North 87°38'59" East, along the South boundary
  of said Section 17, 741.01 feet to the TRUE POINT OF BEGINNING; 

Thence North 62°20'39" West, 552.01 feet; Thence
  North 32°01'36" East, 623.10 feet; 

Thence South 70°18'00" East, along an existing chain
  link fence line and along an existing chain link fence line produced, 844.46
  feet; 

Thence South 32°01'36" West, 740.33 feet; 

Thence North 62°20'39" West, 275.34 feet to the TRUE
  POINT OF BEGINNING. 

A-11 

EXCEPTION PARCEL H: 

Those portions of the Northwest quarter of Section 20 and the
  Southwest quarter of Section 17, Township 16 North, Range 3 East of the Gila
  and Salt River Base and Meridian, Yavapai County, Arizona, more particularly
  described as follows: 

COMMENCING at the Southwest corner of said Section 17; 

Thence North 87°38'59" East along the Southerly boundary
  of said Section 17, a distance of 741.01 feet to a point on the Southwesterly
  boundary of that parcel described in Book 2263, page 716, Yavapai County Recorder;

Thence South 62°20'39" East, a distance of 275.34
  feet to the Southern most corner of said parcel; 

Thence North 32°01'36" East along the Westerly boundary
  of said parcel, a distance of 230.48 feet; 

Thence South 57°58'24" East, a distance of 25.00
  feet to the TRUE POINT OF BEGINNING; 

Thence South 32°01'36" West, a distance of 230.48
  feet to a point; 

Thence South 57°58'24" East, a distance of 155.16
  feet to a point; 

Thence North 32°01'36" East, a distance of 290.40
  feet to a point; 

Thence North 57°58'24" West, a distance of 130.16
  feet to a point; 

Thence South 32°01'36" West, a distance of 59.92
  feet to a point; 

Thence North 57°58'24" West, a distance of 25.00
  feet to the POINT OF BEGINNING. 

EXCEPTION PARCEL I: 

A parcel of ground lying in Sections 17 and 20, Township 16 North,
  Range 3 East of the Gila and Salt River Base and Meridian, Yavapai County, Arizona,
  described as follows: 

COMMENCING at a found Dr. Morgan Johnson Brass Cap Monument at
  the Southwest corner of Section 17 from which a found Dr. Morgan Johnson Brass
  Cap Monument at the South quarter corner of Section 17 lies North 87°38'59"
  East (Basis of Bearing) 2654.11 feet (Record North 87°38'59" East,
  2554.37 feet per Results of Survey prepared by Joe Jones and Associates, Job
  No. 89-104 hereafter referred to as "record"): 

Thence South 87°38'59" East, 741.10 feet (record
  741.01 feet) to the TRUE POINT OF BEGINNING; Thence South 62°21'22"
  East, 275.33 feet (record South 52°20'39" East, 275.34 feet) to
  a found 1/2 inch rebar; 

Thence South 32°00'53" West, 211.16 feet (South 32°01'36"
  West, 211.16 feet per a legal description furnished by First American Title
  hereafter referred to as "record 2") to a set 5/8 inch rebar with plastic cap
  stamped "SEC RLS 13015"); 

Thence North 62°21'22" West, 827.29 feet (North 62°20'39"
  West, 827.35 feet per record 2) to a set 5/8 inch rebar with plastic cap stamped
  "SEC RLS 13015"; 

Thence North 32°00'53" East, 211.16 feet (North 32°01'36"
  East, 211.16 feet per record 2) to a found 1/2 inch rebar; 

A-12 

Thence South 62°21'22" East, 551.96 feet (South 62°20'39"
  East, 552.01 feet per record) to the TRUE POINT OF BEGINNING. 

EXCEPTION PARCEL J:

A parcel of land located in the South half of Section 18 and
  the North half of Section 19, Township 16 North, Range 3 East of the Gila and
  Salt River Base and Meridian, Yavapai County, Arizona, and is more particularly
  described as follows:

COMMENCING at the North quarter corner of said Section 19; 

Thence South 89°35’38” West, along the
  North line of the Northwest quarter of said Section 19, a distance of 471.13
  feet to the North right-of-way of the Santa Fe Railway and the TRUE POINT OF
  BEGINNING; 

Thence North 48°05’20” West, along said
  right-of-way, a distance of 216.02 feet; 

Thence North 00°02’56” West, a distance
  of 1139.72 feet; 

Thence South 44°37’12” East, a distance
  of 666.09 feet; 

Thence South 51°51’56” East, a distance
  of 1320.36 feet; 

Thence South 41°54’40” West, a distance
  of 894.17 feet to said right-of-way; 

Thence North 48°05’20” West, along said
  right-of-way, a distance of 1004.31 feet to the TRUE POINT OF BEGINNING.

EXCEPTION PARCEL K:

Those portions of the Northwest quarter of Section 20 and the
  Southwest quarter of Section 17, Township 16 North, Range 3 East, Gila and Salt
  River Base and Meridian, Yavapai County, Arizona, more particularly described
  as follows:

COMMENCING at the Southwest corner of said Section 17;

Thence North 87°38’59” East along the Southerly
  boundary of said Section 17 a distance of 741.01 feet to a point on the Southwesterly
  boundary of that parcel described in Book 2263, page 716, Yavapai County Recorder;

Thence South 62°20’39” East a distance
  of 275.34 feet to the Southern most corner of said Parcel; 

Thence North 32°01’36” East along the Westerly
  boundary of said parcel, a distance of 230.48 feet; 

Thence South 57°58’24” East, a distance
  of 25.00 feet to the TRUE POINT OF BEGINNING; 

Thence South 32°01’36” West a distance
  of 230.48 feet to a point; 

Thence South 57°58’24” East a distance
  of 155.16 feet to a point; 

Thence North 32°01’36” East a distance
  of 290.40 feet to a point; 

Thence North 57°58’24” West a distance
  of 130.16 feet to a point;

A-13 

Thence South 32°01’36” West a distance
  of 59.92 feet to a point;

Thence North 57°58’24” West a distance
  of 25.00 feet to the POINT OF BEGINNING. 

EXCEPTION PARCEL L: 

Following is a description of a parcel of land located in the
  Northeast quarter of Section 19, Township 16 North, Range 3 East, Gila and Salt
  River Base and Meridian, Town of Clarkdale, Yavapai County, Arizona: 

(Note: all references to recorded instruments refer to the records
  of the Yavapai County Recorders Office.) 

The parcel of land being described is a portion of the parcel
  of land described as Parcel 5 in Book 1544, Page 445 and is shown as Parcel
  1 on the Record of Survey drawing recorded in Book 99 of Surveys, Map 37. 

The parcel is more particularly described by metes and bounds
  as follows: 

COMMENCING at the Northeast corner of the parcel of land described
  in Book 544, Page 754, which lies on the Southerly line of Parcel 5 described
  in Book 1544, Page 445, monumented by a 1/2" rebar; 

Thence South 39°08'15" West along the Easterly line of the
  parcel of land described in Book 544, Page 754 and the Southerly line of Parcel
  5, 652.53 feet, monumented by a 5/8" rebar; 

Thence South 34°51'35" East along the Easterly line of the
  parcel of land described in Book 544, Page 754 and the Southerly line of Parcel
  5, 106.74 feet to the Northwest corner of the Clarkdale Townsite Boundary as
  shown on the "Map and Plat of Clarkdale" recorded in Book 5 of Maps and Plats,
  Page 83, monumented as a 5' witness corner with a 5/8" rebar with aluminum cap
  marked "ARENCO LS 13010", the TRUE POINT OF BEGINNING of this description: 

Thence North 55°37'00" East along the Clarkdale Townsite
  Boundary, 869.13 feet, monumented by a 5/8" rebar with aluminum cap marked "ARENCO
  LS 13010"; 

Thence South 34°23'00" East, 212.48 feet to the Southerly
  line of Parcel 5 and to the North line of the 20.00 foot wide alley dedicated
  on the "Street and Alley Dedication Plat" recorded in Book 11 of Maps and Plats,
  Page 69, monumented by a 1/2" rebar;

Thence South 55°36'06" West along the Southerly line of
  Parcel 5 and along the North line of the 20.00 foot wide alley, 867.36 feet
  to the intersection of the North line of the 20' wide alley and the West right
  of way line of 16th Street dedicated on the "Map and Plat of Clarkdale" recorded
  in Book 5 of Maps and Plats, Page 83, which lies on the Easterly line of the
  parcel of land described in Book 544, Page 754 monumented by a 1/2" rebar; 

Thence North 34°51 '35" West along the Easterly line of
  the parcel of land described in Book 544, Page 754 and the Southerly line of
  Parcel 5, 212.72 feet to the TRUE POINT OF BEGINNING of this description. 

The BASIS OF BEARINGS for this description is the North line
  of the Northeast quarter of Section 19, which bears North 89°57’47”
  East. 

EXCEPTION PARCEL M: 

A portion of the Northeast quarter of Section 20, Township 16
  North, Range 3 East of the Gila and Salt River Base and Meridian, Yavapai County,
  Arizona, more particularly described as follows: 

A-14 

COMMENCING at the East one-quarter corner of said Section 20;

Thence South 88°51’07” West, along the
  East-West mid-section line of said Section 20, a distance of 539.91 feet to
  the TRUE POINT OF BEGINNING; 

Thence continuing South 88°51’07” West,
  along said mid-section line, a distance of 500.74 feet to a point on the Northeasterly
  right of way line of Old Highway 89A; 

Thence Northwesterly, along said right of way line, on a curve
  to the left, having a radius of 3920.23 feet, through a central angle of 01°30’45”,
  a distance of 103.48 feet; 

Thence Northwesterly, along said right of way line, on a curve
  to the left, having a radius of 2964.79 feet, through a central angle of 12°01’32”,
  a distance of 622.26 feet; 

Thence Northwesterly, along said right of way line on a curve
  to the left, having a radius of 3920.23 feet, through a central angle of 06°00’00”,
  a distance of 410.53 feet; 

Thence North 62°56’30” West, along said
  right of way, a distance of 534.11 feet to the Southwest corner of Lot 1, Block
  13, Town of Clarkdale, as recorded in Book 5 of Maps and Plats, page 85, records
  of Yavapai County, Arizona; 

Thence North 81°24’36” East, along the
  Southerly boundary of Blocks 13, 12 and 3 in the Town of Clarkdale, a distance
  of 1245.88 feet; 

Thence South 36°03’42” East, a distance
  of 455.69 feet to a point on the boundary of Rio Vista Subdivision, Parcel 2,
  which lies North 60°23’59” East, a distance of 20.00 feet
  from the Northeast corner of Lot 1 in Rio Vista Subdivision, Parcel 2; 

Thence South 60°23’59” West, along the
  Northwesterly boundary of Rio Vista Subdivision, Parcel 2, a distance of 158.00
  feet to the Northwest corner of said subdivision; 

Thence South 29°36’01” East, along the
  Southwesterly boundary of said subdivision, a distance of 608.84 feet to the
  Southwest corner of said subdivision; 

Thence North 60°23’59” East, along the
  Southeasterly boundary of said subdivision, a distance of 173.59 feet to a point
  on the Southwesterly boundary of Lot 11 in said subdivision; 

Thence South 31°04’02” East, a distance
  of 10.26 feet to the Southwest corner of said Lot 11; 

Thence North 58°55’58” East, a distance
  of 175.00 feet to the Southeast corner of said Lot 11; 

Thence North 58°55’58” East, a distance
  of 45.99 feet to a point on the Southwesterly right of way line of the Arizona
  Extension Railroad; 

Thence South 36°03’42” East, along said
  right of way line, a distance of 253.38 feet; 

Thence South 69°43’35” West a distance
  of 290.43 feet to the TRUE POINT OF BEGINNING.

EXCEPTION PARCEL N: 

A parcel of land located in the Southeast quarter of Section
  19, and the Southwest quarter of Section 20, Township 16 North, Range 3 East,
  Gila and Salt River Base and Meridian, Yavapai County, Arizona, being more particularly
  described as follows: 

COMMENCING at the Southeast corner of said Section 19; 

A-15 

Thence South 89°52’33” West (Meas.) (West,
  Rec.) along the South line of said Section 19, a distance of 1,319.58 feet (Meas.),
  (1320 + feet, Rec.), to the South 1/16 corner of said Section 19 and the Southwest
  corner of a parcel of land as recorded in Book 937, pages 709 and 710, records
  of Yavapai County, Arizona; 

Thence North 03°38’09” East, a distance
  of 735.98 feet (Meas.) (North 10°00’ East, 695 plus or minus
  feet, Rec.), to a point on the Northerly right of way line of the Phoenix Cement
  Plant Road and the TRUE POINT OF BEGINNING; 

THENCE North 63°31’29” West (Meas.), (North
  63°27’09” West, Rec.), along said right of way, a distance
  of 719.06 feet to a point of curvature; 

Thence Northwesterly along said right of way on a curve concave
  to the right, having a radius of 2804.79 feet through a central angle of 19°23’15”,
  a distance of 949.07 feet to the Southeasterly 37.50 foot right of way line
  of Main Street; 

Thence North 60°37’00” East, along said
  right of way, a distance of 970.27 feet; 

Thence North 55°37’00” East, along said
  right of way, a distance of 6.51 feet to the Northwest corner of a parcel of
  land as recorded in Book 168, pages 453 and 454, records of Yavapai County,
  Arizona; 

Thence South 34°23’00” East, a distance
  of 640.00 feet (Meas. and Rec.), to the Southwest corner of said parcel of land;

Thence North 55°37’00” East, a distance
  of 900.00 feet (Meas. and Rec.) to the Southeast corner of said parcel of land;

Thence North 55°37’00” East, along an extension
  of the Southerly boundary of said parcel of land, a distance of 122.80 feet
  to the Southerly right of way line of Third South Street in the Town of Clarkdale,
  Arizona; 

Thence Easterly, along said right of way on a curve concave to
  the left, having a radius of 240.00 feet through a central angle of 23°30’06”,
  a distance of 98.44 feet;

 Thence North 73°17’14” East (Meas.), (North
  73°12’ East, Rec.), along said right of way, a distance of
  92.71 feet; 

Thence Easterly along said right of way on a curve concave to
  the right, having a radius of 115.00 feet through a central angle of 39°24’00”,
  a distance of 79.08 feet (Meas. and Rec.); 

Thence Easterly, along said right of way on a curve concave to
  the left, having a radius of 210.00 feet through a central angle of 44°29’0”
  (Meas.), (24°29’ Rec.), a distance of 163.04 feet (Meas. and
  Rec.); 

Thence North 68°12’14” East (Meas.), (North
  68°07’ East, Rec.), along said right of way, a distance of
  265.64 feet (Meas. and Rec.); 

Thence Northeasterly, along said right of way, on a curve concave
  to the left, having a radius of 200.00 feet, through a central angle of 52°52’0”,
  a distance of 184.54 feet (Meas. and Rec.); 

Thence North 15°20’14” East (Meas.), (North
  15°15’ East, Rec.), along said right of way, a distance of
  48.01 feet (Meas. and Rec.), to the Southerly boundary of a parcel of land as
  recorded in Book 337, page 591, records of Yavapai County, Arizona; 

A-16 

Thence South 52°21’46” East, along said
  Southerly boundary, a distance of 129.56 feet (Meas.), (South 52°27’
  East, 116.90 feet, Rec.) to the Westerly right of way line of Highway 89A; 

Thence South 22°33’53” West, along said
  right of way line, a distance of 135.52 feet to a point on the Northwesterly
  boundary of a parcel of land as recorded in Book 937, pages 709 and 710, records
  of Yavapai County, Arizona; 

Thence South 60°55’31” West (Meas.), (South
  60°29’ West, Rec.) along said boundary, a distance of 770.60
  feet; 

Thence South 36°04’52” West, along said
  boundary, a distance of 1405.64 feet (Meas.), (South 35°14’
  West, 1380.00 feet Rec.) to the TRUE POINT OF BEGINNING. 

EXCEPTING THEREFROM the following described property: 

A parcel of land located in the Southeast quarter of Section
  19 and the Southwest quarter of Section 20, Township 16 North, Range 3 East
  of the Gila and Salt River Base and Meridian, Yavapai County, Arizona, more
  particularly described as follows: 

COMMENCING at the Southeast corner of said Section 19; 

Thence South 89°52’33” West, along the
  South line of said Section 19, a distance of 1319.58 feet to the South one-sixteenth
  corner of said Section 19 and the Southwest corner of a parcel as recorded in
  Book 937, pages 709-710, records of Yavapai County, Arizona; 

Thence North 03°38’09” East, a distance
  of 735.98 feet to a point on the Northerly right of way line of the Phoenix
  Cement Plant Road; 

Thence North 36°04’52” East, a distance
  of 647.29 feet to the TRUE POINT OF BEGINNING; 

Thence North 60°57’30” West, a distance
  of 431.12 feet; 

Thence South 62°00’00” West, a distance
  of 520.00 feet; 

Thence North 45°48’35” West, a distance
  of 840.67 feet to the Southerly right of way of Main Street; 

Thence North 60°37’00” East, along said
  right of way, a distance of 570.27 feet; 

Thence North 55°37’00” East, along said
  right of way a distance of 6.51 feet; 

Thence South 34°23’00” East, a distance
  of 740.00 feet; 

Thence North 55°37’0” East, a distance
  of 900.0 feet; 

Thence North 34°23’00” West, a distance
  of 100.00 feet; 

Thence North 55°37’00” East, a distance
  of 122.80 feet to the South right of way of Third Street in the Town of Clarkdale,
  Arizona; 

Thence Easterly along said right of way on a curve to the left,
  having a radius of 240.00 feet, through a central angle of 23°30’06”
  a distance of 98.44 feet; 

Thence North 73°17’14” East, along said
  right of way, a distance of 92.71 feet; 

A-17 

Thence Easterly, along said right of way on a curve to the right,
  having a radius of 115.00 feet, through a central angle of 39°24’,
  a distance of 79.08 feet; 

Thence Easterly, along said right of way on a curve to the left
  having a radius of 210.00 feet, through a central angle of 44°29’,
  a distance of 163.04 feet; 

Thence North 68°12’14” East, along said
  right of way, a distance of 265.64 feet; 

Thence Northerly, along said right of way on a curve to the left,
  having a radius of 200.00 feet, through a central angle of 52°52’,
  a distance of 184.54 feet; 

Thence North 15°20’14” East, along said
  right of way a distance of 48.01 feet; 

Thence South 52°21’46” East, a distance
  of 129.56 feet to the Westerly right of way of Old Highway 89A; 

Thence South 22°33’53” West, along said
  right of way, a distance of 135.52 feet; 

Thence South 60°55’31” West, a distance
  of 770.60 feet; Thence South 36°04’52” West, a distance
  of 758.35 feet to the TRUE POINT OF BEGINNING. 

Also excepting those certain parcels described in Deeds recorded
  in Book 1804 of Official Records, Page 629, in Book 2148 of Official Records,
  Page 386 and in Book 4218 of Official Records, Page 219.

EXCEPTION PARCEL O: 

All that portion of the Northeast quarter of Section 19, Township
  16 North, Range 3 East of the Gila and Salt River Base and Meridian, Yavapai
  County, Arizona, lying Easterly of the Yavapai-Apache Indian Community property
  as described in Deed recorded in Book 544 of Deeds, Page 754, Westerly of Parcels
  1 and 2 as shown on plat recorded in Book 99 of Land Surveys, Page 37 and South
  of the A.T. & S.F. Railroad right of way as shown on said plat.

ALSO EXCEPTING any portion lying within 2006 Assessors Parcel
  No. 400-02-002, and any portion lying within the railroad right -of-way. 

ALSO EXCEPTING from the above described parcels being conveyed
  herein, any portion, if any, lying within those certain parcels conveyed in
  Deed recorded in Book 4236 of Official Records, page 423 and rerecorded in Book
  4469 of Official Records, page 707. 

Permits and Material Contracts 

	1. 	 Town of Clarkdale Conditional Use Permit 2003-4
        and all related documents.

	 	 	 	 
	2. 	 Architectural Plans -- Contract with Reynold
        P. Radoccia, Architect dated November 14, 2005 and all documents related
        to “Project Manual Clarkdale Slag Recovery Project” “ Phase
        1 – Demonstration Module” “Date July 1, 2006”.

	 	 	 	 
	3. 	 Leases

	 	 	 	 
		a. 	 Effluent lease dated August 25, 2004 between
        Town of Clarkdale, TI, VRIC.

	 	 	 	 
		b. 	 Month-to-month rental arrangements:

	 	 	 	 
			i. 	 Clarkdale Arizona Central Railroad

	 	 	 	 
			ii. 	 Intellequest / Java House Coffee Shop

A-18 

	 	iii. 	Wild Apache, Inc. 

	 	4. 	 Environmental Reports -- URS Corporation “Class
        II Air Quality Permit Application for Verde River Iron Company” Dated
        September 25, 2006.

	 	 	 
	 	5. 	 Surveys -- Any and all survey documents wherever situated
        and in whatever form.

	 	 	 
	 	6. 	 Any and all books and records of TI, wherever situated
        and in whatever form.

	 	 	 
	 	7. 	 Equipment, Furniture and fixtures remaining with the
        commercial property and slag pile site.

	 	 	 
	 	8. 	 Any and all personal property attached or on premises
        of TI properties .

	 	 	 
	 	9. 	 Assignment of all VRIC agreements, documents, drawings,
        sketches and information germane to the acquired slag project, vacant
        land, commercial property and any other items related to the business
        of TI.

A-19 

	
SCHEDULE “B”
	
	
to the Agreement and Plan of Merger dated February 15, 2007
	
	
among Searchlight Minerals Corp., Verde River Iron Company, LLC,
	
	
Clarkdale Minerals LLC and Transylvania International, Inc.
	
	 

	
	
ARTICLES OF MERGER
	

  

  

  

  

  

  

 

	
SCHEDULE “C”
	
	
to the Agreement and Plan of Merger dated February 15, 2007
	
	
among Searchlight Minerals Corp., Verde River Iron Company, LLC,
	
	
Clarkdale Minerals LLC and Transylvania International, Inc.
	
	 

	
	
TI FINANCIAL STATEMENTS
	

Transylvania International, Inc.

Financial Statements

as of and for the years then ended

December 31, 2006 and 2005

	Transylvania International, Inc. 
	Table of Contents 
	December 31, 2006 and 2005 
	 

	 	Page 
	Report of Independent Registered Public
      Accounting Firm 	1 
	Financial Statements 	  
	•   Balance Sheets 	2 
	•    Statements of Operations and Accumulated
      Deficit 	3 
	•   Statements of Cash Flows
    	4 
	•   Notes to Financial Statements 	5 

 

	Transylvania International, Inc. 
	Balance Sheets 
	December 31, 2006 and 2005 
	 

	Assets 	 	2006 	 	 	2005 	 
	       Current Assets
    	 	  	 	 	  	 
	               Cash
    	$	 3,105 	 	$	 1,382 	 
	  	 	  	 	 	  	 
	                 
                           
       Total Current Assets 	 	3,105
    	 	 	1,382
    	 
	  	 	  	 	 	  	 
	       Real Property 	 	  	 	 	  	 
	             
       Income property and improvements 	 	722,044 	 	 	722,044 	 
	               Land
    	 	507,446 	 	 	507,446 	 
	             
       Accumulated depreciation 	 	(583,650	) 	 	(551,642	) 
	  	 	  	 	 	  	 
	             
                           
           Total Real Property 	 	645,840 	 	 	677,848 	 
	  	 	  	 	 	  	 
	  	 	  	 	 	  	 
	       Other Assets 	 	  	 	 	  	 
	             
       Land - slag pile 	 	397,531 	 	 	397,531 	 
	  	 	  	 	 	  	 
	             
                           
           Total Other Assets 	 	397,531 	 	 	397,531 	 
	  	 	  	 	 	  	 
	             
                           
           Total Assets 	$	 1,046,476 	 	$	 1,076,761 	 
	  	 	  	 	 	  	 
	Liabilities and Shareholders' Equity
    	 	  	 	 	  	 
	       Current Liabilities 	 	  	 	 	  	 
	             
       Related party payable 	$	 6,901 	 	$	 26,467 	 
	  	 	  	 	 	  	 
	             
                           
           Total Current Liabilities 	 	6,901 	 	 	26,467 	 
	  	 	  	 	 	  	 
	             
                           
           Total Liabilities 	 	6,901 	 	 	26,467 	 
	  	 	  	 	 	  	 
	       Shareholders'
      Equity 	 	  	 	 	  	 
	               Common
      stock - $1 par value, 1,000 shares 	 	  	 	 	  	 
	                 
      authorized; 1,000 shares issued and 	 	  	 	 	  	 
	                 
      outstanding 	 	1,000 	 	 	1,000 	 
	             
       Other paid-in capital 	 	5,715,304 	 	 	5,715,304 	 
	               Accumulated
      Deficit 	 	(4,676,729	) 	 	(4,666,010	) 
	  	 	  	 	 	  	 
	                 
                           
       Total Shareholders' Equity 	 	1,039,575 	 	 	1,050,294 	 
	  	 	  	 	 	  	 
	                 
                           
       Total Liabilities and 	 	  	 	 	  	 
	             
                           
               Shareholders' Equity 	$	 1,046,476 	 	$	 1,076,761 	 

The accompanying notes are an integral part of these financial
  statements. 

- 2 - 

	Transylvania International, Inc. 
	Statements of Operations and Accumulated Deficit 
	For the Years Ended December 31, 2006 and 2005 
	 

	  	 	2006 	 	 	2005 	 
	Revenue 	 	  	 	 	  	 
	     Rental revenue 	$	 36,295 	 	$	 34,745 	 
	     Other income 	 	- 	 	 	894 	 
	     Sales of real property 	 	- 	 	 	1,035,000 	 
	     Cost of real property sold
    	 	- 	 	 	(165,763	) 
	                 Gross
      Profit 	 	36,295 	 	 	904,876 	 
	Operating Expenses 	 	  	 	 	  	 
	     General and administrative 	 	12,620 	 	 	6,019 	 
	     Rental property expenses
    	 	8,317 	 	 	10,028 	 
	     Rental property depreciation 	 	32,007 	 	 	35,031 	 
	     Property taxes (refund)
    	 	(5,930	) 	 	28,318 	 
	                 Total
      Operating Expenses 	 	47,014 	 	 	79,396 	 
	             
         Income (Loss) from Operations before 	 	  	 	 	  	 
	                     
      Other Income 	 	(10,719	) 	 	825,480 	 
	Other Expense 	 	  	 	 	  	 
	     Other receivable write-off 	 	- 	 	 	835,814 	 
	             
         Total Other Expense 	 	- 	 	 	835,814 	 
	                 Loss
      Before Income Taxes 	 	(10,719	) 	 	(10,334	) 
	             
         Income Tax Benefit (Provision) 	 	- 	 	 	- 	 
	                 Net
      Loss 	 	(10,719	) 	 	(10,334	) 
	Accumulated Deficit, Beginning of Period
    	 	(4,666,010	) 	 	(4,655,676	) 
	Accumulated Deficit, End of Period 	$	 (4,676,729	) 	$	 (4,666,010	) 

The accompanying notes are an integral part of these financial
  statements. 

- 3 - 

	Transylvania International, Inc. 
	Statements of Cash Flows 
	For the Years Ended December 31, 2006 and 2005 
	 

	  	 	2006 	 	 	2005 	 
	  	 	  	 	 	  	 
	Cash Flows from Operating Activities
    	 	  	 	 	  	 
	     Net Loss 	$	 (10,719	) 	$	 (10,334	) 
	             Adjustments
      to reconcile net income to net cash 	 	  	 	 	  	 
	             provided
      by operating activities 	 	  	 	 	  	 
	             
           Depreciation 	 	32,007 	 	 	35,031 	 
	                 
       Other receivables 	 	- 	 	 	9,000 	 
	             
           Other receivable write-off 	 	- 	 	 	835,814 	 
	                 
       Basis in real property sold 	 	- 	 	 	110,000 	 
	             
           Land proceeds paid out directly from escrow 	 	  	 	 	  	 
	                 
               in repayment of related party loans 	 	- 	 	 	(944,204	) 
	             
           Expenses paid directly by shareholder 	 	- 	 	 	27,563 	 
	                 
       Changes in operating assets and liabilities 	 	  	 	 	  	 
	             
                   Options deposit 	 	- 	 	 	(3,000	) 
	  	 	  	 	 	  	 
	             
                   Net Cash Provided by
      Operating Activities 	 	21,288 	 	 	59,870 	 
	  	 	  	 	 	  	 
	Cash Flows from Financing Activities
    	 	  	 	 	  	 
	      Net decrease in related party
      loans 	 	(19,565	) 	 	(61,071	) 
	  	 	  	 	 	  	 
	                 
               Net Cash Used by Financing Activities
    	 	(19,565	) 	 	(61,071	) 
	  	 	  	 	 	  	 
	Net Increase (Decrease) in Cash 	 	1,723 	 	 	(1,201	) 
	  	 	  	 	 	  	 
	Cash, Beginning of Period 	 	1,382
    	 	 	2,583
    	 
	  	 	  	 	 	  	 
	Cash, End of Period 	$	 3,105 	 	$	 1,382 	 
	  	 	  	 	 	  	 
	Supplemental Disclosure of Cash Flow Information 	 	  	 	 	  	 
	  	 	  	 	 	  	 
	     Cash paid during the year for 	 	  	 	 	  	 
	             Related
      party loans paid directly by shareholder 	$	 - 	 	$	 175,000 	 
	  	 	  	 	 	  	 
	             Related
      party loans paid directly by shareholder 	$	 - 	 	$	 (175,000	) 
	  	 	  	 	 	  	 
	             Paid-in
      capital increased by contribution of 	 	  	 	 	  	 
	                 
       related party shareholder loans 	$	 - 	 	$	 131,304 	 
	  	 	  	 	 	  	 
	             Related party
      shareholder loans decreased 	 	  	 	 	  	 
	             
           by contribution to paid-in capital 	$	 - 	 	$	 (131,304	) 

The accompanying notes are an integral part of these financial
  statements. 

- 4 - 

	Transylvania International, Inc. 
	Notes to Financial Statements 
	December 31, 2006 and 2005 
	 

	1. 	 Summary of Significant Accounting
      Policies 

This summary of significant accounting policies of Transylvania
  International, Inc. (the Company) is presented to assist in understanding the
  Company's financial statements.

Business Activity 

The Company was incorporated on October 21, 1982 and has invested
  in real property consisting of mineral land, vacant land and income producing
  properties.

The Company operated as an S corporation for federal and state
  income tax purposes until December 15, 2003 at which time it transferred share
  ownership to a nonqualifying shareholder and became taxable as a C corporation.

The Company has incurred cumulative net losses since inception
  of approximately $4.7 million from rental property operations and holding of
  mineral land and has relied upon shareholder funding and sales of investment
  property to sustain operations and holding costs.

Income Taxes 

Until December 15, 2003, the Company, with the consent of its
  shareholder, had elected under the Internal Revenue Code to be an S corporation.
  In lieu of corporation income taxes, the shareholder of the corporation is taxed
  on its share of the Company’s taxable income. 

After December 15, 2003, the Company accounts for income taxes
  under the provisions of SFAS No. 109, Accounting for Income Taxes. SFAS
  No. 109 requires recognition of deferred tax assets and liabilities for the
  expected future tax consequences of events that have been included in the financial
  statements or tax returns. Under this method, deferred tax assets and liabilities
  are determined based on the difference between the financial statement and tax
  bases of assets and liabilities using enacted rates in effect for the year in
  which the differences are expected to reverse. 

Estimates 

The preparation of financial statements in conformity with U.S.
  generally accepted accounting principles requires management to make estimates
  and assumptions that affect the reported amounts of assets and liabilities and
  the disclosure of contingent assets and liabilities at the date of the financial
  statements and the reported amounts of revenues and expenses during the reporting
  period. 

Significant items subject to such estimates and assumptions include
  carrying amount of real property and mineral assets and deferred income tax
  assets. Actual results could differ from those estimates. 

Cash and Cash Equivalents 

For purposes of the statement of cash flows, the Company considers
  all highly liquid debt instruments purchased with a maturity of three months
  or less to be cash equivalents. 

- 5 - 

	Transylvania International, Inc. 
	Notes to Financial Statements 
	December 31, 2006 and 2005 
	 

Real Property and Mineral Assets 

Real property and mineral assets are stated at cost. Depreciation
  is calculated using straight-line and declining balance methods over estimated
  useful lives ranging from 5 to 39 years. The Company records all property acquisitions
  at the original cost of the acquisition. Expenditures for property betterments
  and renewals are capitalized. Upon sale or disposition of a depreciable asset
  or asset held for investment, cost and accumulated depreciation are removed
  from the accounts and any gain or loss is reflected in the financial statements.

Impairment of Long-Lived Assets 

The Company applies the provisions of SFAS No. 144, Accounting
  for the Impairment or Disposal of Long-Lived Assets. In accordance with
  Statement 144, long-lived assets, such as property, plant, and equipment, and
  purchased intangibles subject to amortization, are reviewed for impairment whenever
  events or changes in circumstances indicate that the carrying amount of an asset
  may not be recoverable. Recoverability of assets to be held and used is measured
  by a comparison of the carrying amount of an asset to estimated undiscounted
  future cash flows expected to be generated by the asset or investment value
  of the asset. If the carrying amount of an asset exceeds its estimated future
  cash flows, an impairment charge is recognized by the amount by which the carrying
  amount of the asset exceeds the fair value of the asset. No impairment charge
  was recognized during 2006 or 2005. 

Revenue Recognition 

Revenue is recognized when rents are received or receivable for
  the period earned, collection of the relevant receivable is probable, persuasive
  evidence of an arrangement exists and the revenue is fixed or determinable.

Uncollectible Loans 

The Company periodically reviews collectiblity of amounts due
  to it in the form of loans or advances for collectiblity. When it is determined
  based on review of the terms, facts and circumstances that a loan amount is
  either partially or totally uncollectible, the Company either records a total
  write-off of the loan or an allowance against the loan balance. 

	2. 	 New Accounting Standards
    

In September 2006, the Securities and Exchange Commission issued
  Staff Accounting Bulletin No. 108 (SAB 108). SAB 108 considers the effects of
  prior year misstatements when quantifying misstatements in current year financial
  statements. It is effective for fiscal years ending after November 15, 2006.
  The Company does not believe the adoption of SAB 108 will have a material impact
  on its financial statements. 

In June 2006, the FASB issued FIN No. 48, Accounting for Uncertainty
  in Income Taxes – an Interpretation of FASB Statement No. 109 (FIN 48),
  which clarifies the accounting for uncertainty in tax positions. FIN 48 requires
  financial statement recognition of the impact of a tax position, if that position
  is more likely than not to be sustained on examination, based on the technical
  merits of the position. The provisions of FIN 48 will be effective for financial
  statements issued for fiscal years beginning after December 15, 2006, with the
  cumulative effect of the change in accounting principle recorded as an adjustment
  to opening retained earnings. The Company is currently evaluating the impact
  of FIN 48 on its financial statements. 

In May 2005, the FASB issued SFAS No. 154, Accounting Changes
  and Error Corrections (SFAS 154). SFAS 154 requires retrospective application
  to prior-period financial statements of changes in accounting principle, unless
  it is impractical to determine either the period-specific effects or the cumulative
  effect of the change. SFAS 154 also redefines “restatement” as the
  revising of previously issued financial statements to reflect the correction
  of an error. This statement is effective for accounting changes and corrections
  of errors made in fiscal years beginning after December 15, 2005. The Company
  does not currently believe that the adoption of SFAS 154 will have a material
  impact on its financial statements. 

- 6 - 

	Transylvania International, Inc. 
	Notes to Financial Statements 
	December 31, 2006 and 2005 
	 

	3. 	 Property Rental Arrangements and
      Leases 

The Company has the following lease and rental arrangements:

Clarkdale Arizona Central Railroad - Lease 

The Company has a month-to-month rental agreement with Clarkdale
  Arizona Central Railroad. The rental payment is $1,700 per month.

Commercial Building - Lease

The Company rents commercial building space to two tenants. The
  rental arrangements for both tenants stem from expired leases and are month-to-month.
  Rent under these agreements totaled $1,260 per month.

Land Lease - Wastewater Effluent

The Company entered into a lease on August 25, 2004 with the
  Town of Clarkdale, AZ (Clarkdale). The Company provides approximately 60 acres
  of land to Clarkdale for disposal of Class B effluent. In return, the Company
  has first rights to purchase up to 46,000 gallons per day of the effluent for
  its use at fifty percent (50%) of the potable water rate. In addition, if Class
  A effluent becomes available, the Company may purchase that at seventy five
  percent (75%) of the potable water rate.

The term of the lease is 5 years with a one year extension available.
  At such time as Clarkdale no longer uses the property for effluent disposal,
  and for a period of twenty five (25) years measured from the date of the lease,
  the Company has a continuing right to purchase Class B , and if available, Class
  A effluent at then market rates.

	4. 	 Income Taxes 

The Company is a Nevada corporation operating primarily in the
  state of Arizona and files federal and Arizona income tax returns. Nevada does
  not impose a corporate income tax.

The provision for income taxes consisted of the following at
  December 31, 

	  	 	2006 	 	 	2005 	 
	  	 	  	 	 	  	 
	Federal - deferred benefit (provision) 	$	 (3,455	) 	$	 (3,268	) 
	State - deferred benefit (provision) 	 	(708	) 	 	(670	) 
	Expected non-utilization of loss carryforwards
    	 	4,163 	 	 	3,938 	 
	  	 	  	 	 	  	 
	Provision for income taxes 	$	 - 	 	$	 - 	 

Temporary differences giving rise to deferred tax assets and
  liabilities are due to differences in the recognition period of certain expenses.
  These differences relate primarily to net operating loss carryforward amounts.

- 7 - 

	Transylvania International, Inc. 
	Notes to Financial Statements 
	December 31, 2006 and 2005 
	 

The components of the net deferred tax assets at December 31
  were as follows: 

	  	 	2006 	 	 	2005 	 
	  	 	  	 	 	  	 
	Gross deferred federal income tax assets -
      current 	$	 62,892 	 	$	 - 	 
	Gross deferred state income tax assets - current 	 	12,889 	 	 	- 	 
	Less: valuation allowance 	 	(75,781	) 	 	- 	 
	  	 	  	 	 	  	 
	Net current deferred income tax asset 	$	 - 	 	$	 - 	 
	  	 	  	 	 	  	 
	Gross deferred federal income tax assets -
      long term 	$	 - 	 	$	 59,437 	 
	Gross deferred state income tax assets - long term 	 	- 	 	 	12,181 	 
	Less: valuation allowance 	 	- 	 	 	(71,618	) 
	  	 	  	 	 	  	 
	Net long term deferred income tax asset 	$	 - 	 	$	 - 	 

As of December 31, 2006 and 2005, the Company had net operating
  loss carryforwards of approximately $185,000 and $175,000, respectively for
  both federal and Arizona income taxes. The net operating loss carryforwards
  expire between 2024 and 2026. 

Under the provisions of the Internal Revenue Code, certain substantial
  changes in the Company’s ownership may result in a limitation on the amount
  of net operating loss carryforwards. Utilization of the net operating loss carryforwards
  may be subject to an annual limitation due to the ownership percentage change
  limitations provided by the Internal Revenue Code of 1986 and similar state
  provisions. The annual limitation may result in the expiration of the net operating
  loss carryforwards before utilization. 

Valuation Allowance 

A valuation allowance must be provided when it is more likely
  than not that the net deferred tax asset will not be realized.

A full valuation allowance has been established for the deferred
  tax assets generated by net operating loss carryforwards due to the uncertainty
  of future utilization. 

In subsequent periods, the Company may reduce the valuation allowance,
  provided that utilization of the deferred tax is more likely than not. As a
  result of this valuation allowance, there has been a reduction of the income
  tax expense or benefit for the periods presented. 

- 8 - 

	Transylvania International, Inc. 
	Notes to Financial Statements 
	December 31, 2006 and 2005 
	 

	5. 	 Concentration of Activity
    

The Company's principal revenue source is the rental of commercial
  real estate, holding of land and a mineral asset in Clarkdale Arizona. 

	6. 	 Write-off of Loans Receivable
    

During 2005 the Company exhausted collection efforts and determined
  that two separate loans in the amount of $250,000 and $594,814 were not collectible.
  The $250,000 note was settled for recovery of $5,000 of which $1,000 was applied
  to legal fees. The $594,814 loan was written off in its entirety. The Company
  recognized $835,814 in bad debt expense. 

	7. 	 Significant Sales of Real Property
    

During 2005, the Company sold two parcels of unimproved land.
  One parcel was sold for approximately $35,000 and the other for approximately
  $1,000,000. The net proceeds were primarily used to repay advances made by members
  of the LLC stockholder of the company. 

	8. 	 Related Party Advances 

During 2006 and 2005 as well as previous years, Verde River Iron
  Company, LLC (VRIC), the LLC shareholder and an Gerald A. Lembas, (an equity
  member of VRIC) advanced funds to the Company for operations and land holding
  costs. 

Related party advance transactions and balances consisted of
  the following at December 31, 

	  	  	  	 	2006 	 	 	2005 	 
	  	  	  	 	  	 	 	  	 
	VRIC 	Balance    	January 1, 	$	 - 	 	$	 697,944 	 
	     Repayments 	 	- 	 	 	(566,640	) 
	     Capitalized
      as paid-in capital 	 	- 	 	 	(131,304	) 
	  	  	  	 	  	 	 	  	 
	  	Balance    	December 31, 	$	 - 	 	$	 - 	 
	  	  	  	 	  	 	 	  	 
	Gerald A. Lembas (a member 	 	  	 	 	  	 
	 of VRIC) 	Balance    	January 1, 	$	 26,467 	 	$	 437,538 	 
	     Repayments
    	 	(19,566	) 	 	(411,071	) 
	  	  	  	 	  	 	 	  	 
	  	Balance    	December 31, 	$	 6,901 	 	$	 26,467 	 

	9. 	 Real Property Deed of Trust
    

Gerald A. Lembas, a member of VRIC holds a deed of trust against
  substantially all of the real property of the Company in the amount of $9,600,000.
  The basis of this encumbrance placed on the property by Mr. Lembas is related
  to funding he had infused into the Company over a long period of time and appreciation
  of the property value. Mr. Lembas converted the bulk of his funding to paid-in
  capital in 2003, but retained the deed of trust.

The terms of the potential ownership change discussed further
  in Note 10, provide for release of this deed of trust as part of the overall
  transaction. 

- 9 - 

	Transylvania International, Inc. 
	Notes to Financial Statements 
	December 31, 2006 and 2005 
	 

	10. 	 Subsequent Event - Potential Ownership
      Change 

During 2006 and subsequent to year-end, the Company has been
  in discussion with a publicly traced company regarding the potential sale of
  the Company.

In November 2006, the shareholder of the Company entered into
  an option agreement to sell 100% of the issued and outstanding the shares of
  the Company.

The potential purchaser had a due diligence period until January
  8, 2007 to provide the Company notice of intent to exercise the option. The
  potential purchaser provided the Company notice of intent to exercise the option
  on January 8, 2007. 

Pursuant to the option agreement the potential purchaser advanced
  a deposit of $200,000 for benefit of the shareholder of the Company. This deposit
  was fully refundable until the end of the due diligence period, after notice
  of intent was provided, the deposit is non-refundable and will be credited to
  the purchase price of the Company upon closing of the transaction. 

The agreement provides for a closing date of January 15, 2007
  with available extension to February 15, 2007 pending completion of audited
  financial statements of the Company in the form acceptable to meet all securities
  law filing requirements. 

- 10 - 

	SCHEDULE “D” 
	to the Agreement and Plan of Merger dated February 15,
      2007 
	among Searchlight Minerals Corp., Verde River Iron
      Company, LLC, 
	Clarkdale Minerals LLC and Transylvania International,
      Inc. 
	  
	INVESTOR REPRESENTATION CERTIFICATE
  

     In connection with the issuance
of common stock ("SMC Common Stock") of Searchlight Minerals Corp., a Nevada
corporation ("SMC"), to the undersigned, pursuant to that certain Agreement and
Plan of Merger dated February 15, 2007 among SMC, Clarkdale Minerals LLC, a
Nevada limited liability company, and Transylvania International, Inc., a Nevada
corporation (the "Target"), the undersigned hereby agrees, represents and
warrants that he, she or it: 

	1. 	Acquired Entirely for Own Account.
  

     The undersigned represents and
warrants that they are acquiring the SMC Common Stock solely for the
undersigned’s own account for investment and not with a view to or for sale or
distribution of the SMC Common Stock or any portion thereof and without any
present intention of selling, offering to sell or otherwise disposing of or
distributing the SMC Common Stock or any portion thereof in any transaction
other than a transaction complying with the registration requirements of the
U.S. Securities Act of 1933, as amended (the "Securities Act"), and applicable
state and provincial securities laws, or pursuant to an exemption therefrom. The
undersigned also represents that the entire legal and beneficial interest of the
SMC Common Stock that he, she or it is acquiring is being acquired for, and will
be held for, the undersigned’s account only, and neither in whole nor in part
for any other person or entity. 

	2. 	Information Concerning SMC.
  

     The undersigned acknowledges that
they have received all such information as the undersigned deems necessary and
appropriate to enable them to evaluate the financial risk inherent in making an
investment in the SMC Common Stock, including but not limited to SMC’s public
filings with the United States Securities and Exchange Commission, available at
www.sec.gov, including its periodic reports on Form 10-KSB and Form 10-QSB, and
the documents and materials included therewith, which includes a description of
the risks inherent in an investment in SMC (the "Disclosure Documents"). The
undersigned further acknowledges that he, she or it has received satisfactory
and complete information concerning the business and financial condition of SMC
in response to all inquiries in respect thereof.

	3. 	Economic Risk and Suitability.
  

The undersigned represents and warrants
as follows: 

	 	(a) 	
      the undersigned realizes that the SMC Common Stock
      involves a high degree of risk and are a speculative investment, and that
      he, she or it is able, without impairing the undersigned’s financial
      condition, to hold the SMC Common Stock for an indefinite period of
      time;

	 	 	 
	 	(b) 	
      the undersigned recognizes that there is no assurance of
      future profitable operations and that investment in SMC involves
      substantial risks, and that the undersigned has taken full cognizance of
      and understands all of the risk factors related to the SMC Common
      Stock;

	 	 	 
	 	(c) 	
      the undersigned has carefully considered and has, to the
      extent the undersigned believes such discussion necessary, discussed with
      the undersigned’s professional legal, tax and financial advisors the
      suitability of an investment in SMC for the particular tax and financial
      situation of the undersigned and that the undersigned and/or the
      undersigned’s advisors have determined that the SMC Common Stock is a
      suitable investment for the undersigned;

	 	 	 
	 	(d) 	
      the financial condition and investment of the undersigned
      are such that he, she or it is in a financial position to hold the SMC
      Common Stock for an indefinite period of time and to bear the economic
      risk of, and withstand a complete loss of, the value of the SMC Common
      Stock;

D-1

	 	(e) 	
      the undersigned alone, or with the assistance of
      professional advisors, has such knowledge and experience in financial and
      business matters that the undersigned is capable of evaluating the merits
      and risks of acquiring the SMC Common Stock, or has a pre-existing
      personal or business relationship with SMC or any of its officers,
      directors, or controlling persons of a duration and nature that enables
      the undersigned to be aware of the character, business acumen and general
      business and financial circumstances of SMC or such other
person;

	 	 	 
	 	(f) 	
      the undersigned has carefully read the Disclosure
      Documents and SMC has made available to the undersigned or the
      undersigned’s advisors all information and documents requested by the
      undersigned relating to investment in the SMC Common Stock, and has
      provided answers to the undersigned’s satisfaction to all of the
      undersigned’s questions concerning SMC;

	 	 	 
	 	(g) 	
      if the undersigned is a partnership, trust, corporation
      or other entity: (1) it was not organized for the purpose of acquiring the
      SMC Common Stock (or all of its equity owners are "accredited investors"
      as defined in Section 6 below); (2) it has the power and authority to
      execute this Certificate and the person executing said document on its
      behalf has the necessary power to do so; (3) its principal place of
      business and principal office are located within the state set forth in
      its address below; and (4) all of its trustees, partners, members and/or
      shareholders, whichever the case may be, are bona fide residents of said
      state;

	 	 	 
	 	(h) 	
      the undersigned understands that neither SMC nor any of
      its officers or directors has any obligation to register the SMC Common
      Stock under any federal or other applicable securities act or
  law;

	 	 	 
	 	(i) 	
      the undersigned has relied solely upon the Disclosure
      Documents, advice of his or her representatives, if any, and independent
      investigations made by the undersigned and/or his or her the undersigned
      representatives, if any, in making the decision to acquire the SMC Common
      Stock and acknowledges that no representations or agreements other than
      those set forth in the Disclosure Documents have been made to the
      undersigned in respect thereto;

	 	 	 
	 	(j) 	
      all information which the undersigned has provided
      concerning the undersigned himself, herself or itself is correct and
      complete as of the date set forth below, and if there should be any
      material change in such information prior to the issuance of the SMC
      Common Stock, he, she or it will immediately provide such information to
      SMC;

	 	 	 
	 	(k) 	
      the undersigned confirms that the undersigned has
      received no general solicitation or general advertisement and has attended
      no seminar or meeting (whose attendees have been invited by any general
      solicitation or general advertisement) and has received no advertisement
      in any newspaper, magazine, or similar media, broadcast on television or
      radio regarding acquiring the SMC Common Stock; and

	 	 	 
	 	(l) 	
      the undersigned is at least 21 years of age and is a
      citizen of the United States residing at the address indicated
    below.

	4. 	Restricted Securities.

The undersigned acknowledges that SMC
has hereby disclosed to the undersigned in writing: 

	 	(a) 	
      the SMC Common Stock that the undersigned is acquiring
      have not been registered under the Securities Act or the securities laws
      of any state of the United States, and such securities must be held
      indefinitely unless a transfer of them is subsequently registered under
      the Securities Act or an exemption from such registration is available;
      and

	 	 	 
	 	(b) 	
      SMC will make a notation in its records of the above
      described restrictions on transfer and of the legend described
    below.

D-2

	5. 	Legends. 

The undersigned agrees that the SMC
Common Stock will bear the following legends: 

	 	
      “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
      NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT"),
      AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE
      REGISTRATION REQUIREMENTS OF THE ACT PROVIDED BY REGULATION D
      PROMULGATED UNDER THE ACT. SUCH SECURITIES MAY NOT BE
      REOFFERED FOR SALE OR RESOLD OR OTHERWISE TRANSFERRED EXCEPT
      PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE ACT OR PURSUANT TO
      AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT.”

	 

	6. 	Suitable Investor. 

In order to establish the
qualification of the undersigned to acquire the SMC Common Stock, the
information requested in either subsection 6(a) must be supplied. 

     (a) The undersigned is an
"accredited investor," as defined in Securities and Exchange Commission (the
"SEC") Rule 501. An "accredited investor" is one who meets any of the
requirements set forth below. The undersigned represents and warrants that the
undersigned falls within the category (or categories) marked. PLEASE INDICATE
EACH CATEGORY OF ACCREDITED INVESTOR THAT YOU, THE UNDERSIGNED, SATISFY, BY
PLACING AN "X" ON THE APPROPRIATE LINE BELOW. 

	_____	Category 1. 	
      A bank, as defined in Section 3(a)(2) of the Securities
      Act, whether acting in its individual or fiduciary capacity; or 

	 	  	
       

	_____	Category 2. 	
      A savings and loan association or other institution as
      defined in Section 3(a) (5) (A) of the Securities Act, whether acting in
      its individual or fiduciary capacity; or 

	 	  	
       

	_____	Category 3. 	
      A broker or dealer registered pursuant to Section 15 of
      the Securities Exchange Act of 1934; or

	 	  	
       

	_____	Category 4. 	
      An insurance company as defined in Section 2(13) of the
      Securities Act; or 

	 	  	
       

	_____	Category 5. 	
      An investment company registered under the Investment
      Company Act of 1940; or 

	 	  	
       

	_____	Category 6. 	
      A business development company as defined in Section 2(a)
      (48) of the Investment Company Act of 1940; or 

	 	  	
	_____	Category 7. 	
      A small business investment company licensed by the U.S.
      Small Business Administration under Section 301(c) or (d) of the Small
      Business Investment Act of 1958; or 

	 	  	
       

	_____	Category 8. 	
      A plan established and maintained by a state, its
      political subdivision or any agency or instrumentality of a state or its
      political subdivisions, for the benefit of its employees, with assets in
      excess of $5,000,000; or 

	 	  	
       

	_____	Category 9. 	
      An employee benefit plan within the meaning of the
      Employee Retirement Income Security Act of 1974 in which the investment
      decision is made by a plan fiduciary, as defined in Section 3(21) of such
      Act, which is either a bank, savings and loan association, insurance
      company or registered investment advisor, or an employee benefit plan with
      total assets in excess of $5,000,000 or, if a self-directed plan, the
      investment decisions are made solely by persons who are accredited
      investors; or 

	 	  	
       

	_____	Category 10. 	
      A private business development company as defined in
      Section 202(a) (22) or the Investment Advisers Act of 1940; or
  

D-3

	_____	Category 11. 	
      An organization described in Section 501(c)(3) of the
      Internal Revenue Code, a corporation, a Massachusetts or similar business
      trust, or a partnership, not formed for the specific purpose of acquiring
      the Interest, with total assets in excess of $5,000,000; or 

	 	  	
	_____	Category 12. 	
      A director or executive officer of SMC; or 

	 	  	
	_____	Category 13. 	
      A natural person whose individual net worth, or joint net
      worth with that person’s spouse, at the time of this purchase exceeds
      $1,000,000; or 

	 	  	
	_____	Category 14. 	
      A natural person who had an individual income in excess
      of $200,000 in each of the two most recent years or joint income with that
      person’s spouse in excess of $300,000 in each of those years and has a
      reasonable expectation of reaching the same income level in the current
      year; or 

	 	  	
	_____	Category 15. 	
      A trust, with total assets in excess of $5,000,000, not
      formed for the specific purpose of acquiring the Interest, whose purchase
      is directed by a sophisticated person as described in SEC Rule
      506(b)(2)(ii); or 

	 	  	
	_____	Category 16. 	
      An entity in which all of the equity owners are
      accredited investors. 

	7. 	Understandings. 

The undersigned understands,
acknowledges and agrees that: 

	 	(a) 	
      no federal or state agency has made any finding or
      determination as to the accuracy or adequacy of the Disclosure Documents
      or as to the fairness of the terms of this offering for investment nor any
      recommendation or endorsement of the SMC Common Stock;

	 	 	 
	 	(b) 	
      this offering is intended to be exempt from registration
      under the Securities Act by virtue of Section 4(2) of the Securities Act,
      which is in part dependent upon the truth, completeness and accuracy of
      the statements made by the undersigned herein;

	 	 	 
	 	(c) 	
      the SMC Common Stock is "restricted securities" in the
      U.S. under the Securities Act. There can be no assurance that the
      undersigned will be able to sell or dispose of the SMC Common Stock. It is
      understood that in order not to jeopardize this offering’s exempt status
      under Section 4(2) of the Act, any transferee may, at a minimum, be
      required to fulfill the investor suitability requirements
    thereunder;

	 	 	 
	 	(d) 	
      the representations, warranties and agreements of the
      undersigned contained herein and in any other writing delivered in
      connection with the transactions contemplated hereby shall be true and
      correct in all respects on and as of the date the SMC Common Stock is
      acquired as if made on and as of such date; and

D-4

	 	(e) 	
      THE SMC COMMON STOCK MAY NOT BE TRANSFERRED, RESOLD OR
      OTHERWISE DISPOSED OF EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND ANY
      OTHER APPLICABLE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
      THEREFROM. THE UNDERSIGNED SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO
      BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF
      TIME.

IN WITNESS WHEREOF, I have executed this Investor
Representation Certificate. 

	 	 	 
	Signature 	 	Date 
	 	 	 
	 	 	 
	Print Name 	 	Title (if Applicable) 
	 	 	 
	 	 	 
	Address 	 	  

D-5

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