Document:

SEARCHLIGHT MINERALS CORP.

 

SECURED CONVERTIBLE NOTE PURCHASE AGREEMENT

 

This Secured Convertible
Note Purchase Agreement (this “Agreement”) is made as of September 18, 2013, by and between Searchlight Minerals
Corp., a Nevada corporation (the “Company”), and the investors listed on Schedule I (the “Schedule
of Investors”) attached to this Agreement (each an “Investor” and together the “Investors”).

 

RECITALS:

 

A.The Company and
each Investor is executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by
Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 of Regulation D
(“Regulation D”) as promulgated by the United States Securities and Exchange Commission (the “SEC”)
under the Securities Act.

 

B.Each Investor
wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, a secured convertible
promissory note convertible into shares of the common stock, par value $0.001 per share (the “Common Stock”)
of the Company, the form of which is attached as Exhibit A hereto (each, a “Note,” and collectively,
the “Notes” and as converted, collectively, the “Note Shares”), in the principal amount set
forth opposite such Investor’s name in the Schedule of Investors.

 

C.The Company and
the Company’s wholly-owned Subsidiaries, Clarkdale Minerals, LLC, a Nevada limited liability company (“Clarkdale
Minerals”) and Clarkdale Metals Corp., a Nevada corporation (“Clarkdale Metals,” and together with
Clarkdale Minerals, the “Company Subsidiaries”), are agreeing to provide collateral to the Investors to secure
the repayment of the Notes, subject to the terms and conditions of (i) a Pledge and Security Agreement, among the Company, the
Company Subsidiaries, the Investors and Bank of Utah, as collateral agent (the “Collateral Agent”), the form
of which is attached as Exhibit B hereto (as the same may be amended, supplemented or restated from time to time, the “Security
Agreement”), (ii) a Deed of Trust, Assignment of Rents and Security Agreement among Clarkdale Minerals and Yavapai Title
Agency, Inc., as trustee and Collateral Agent, as beneficiary, the form of which is attached as Exhibit C-1 hereto (as the
same may be amended, supplemented or restated from time to time, the “Arizona Deed of Trust”), (iii) a Deed
of Trust with Power of Sale, Assignment of Production, Security Agreement, Financing Statement, and Fixtures Filing among the Company
and First American Title Company, as trustee and Collateral Agent, as beneficiary, the form of which is attached as Exhibit
C-2 hereto (as the same may be amended, supplemented or restated from time to time, the “Nevada Deed of Trust”),
(iv) a Subsidiary Guaranty of Payment, to be executed by Clarkdale Minerals, the form of which is attached as Exhibit C-3
hereto (as the same may be amended, supplemented or restated from time to time, the “Clarkdale Minerals Subsidiary Guaranty”),
and (v) a Subsidiary Guaranty of Payment, to be executed by Clarkdale Metals, the form of which is attached as Exhibit C-4
hereto (as the same may be amended, supplemented or restated from time to time, the “Clarkdale Metals Subsidiary Guaranty,”
and together with the Clarkdale Minerals Subsidiary Guaranty, the “Subsidiary Guarantys”).

 

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D.The Notes and
the Note Shares collectively are referred to herein as the “Securities.”

 

E.The Company is
hereby offering to the Investors: (a) a minimum of $2,600,000 in aggregate principal of the Notes (the “Initial Investment”),
(b) up to a maximum aggregate principal amount of not more than $5,000,000, inclusive of the Initial Investment, in additional
Notes (the “Maximum Aggregate Investment”), and (c) during the one year period following the Closing, an additional
principal amount of Notes in the aggregate amount not greater than fifteen percent (15%) of the principal amount of Notes purchased
under the Maximum Aggregate Investment (the “Optional Investment”); provided that the Investors have
no obligation to purchase any such Notes except as provided in Section 1.1.

 

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

 

SECTION 1

 

Purchase, Sale and
Issuance of Notes

 

1.1Sale and
Issuance of Notes. Subject to the terms and conditions of this Agreement, at the Closing (as defined below), each Investor
agrees to purchase, severally and not jointly, and the Company agrees to sell and issue to each Investor, a Note in the principal
amount set forth opposite the Investor’s name on Schedule I hereto. The Notes shall be convertible into Common Stock
at the price of $0.40 per share, subject to adjustment as set forth in the Notes (the “Note Conversion Price”).

 

1.2Purchase
Price. The purchase price for the Notes to be purchased by each Investor at the Closing shall be the amount set forth opposite
such Investor’s name in the Schedule of Investors (the “Purchase Price”).

 

SECTION 2

 

Closing Date and Delivery

 

2.1Closing.
The purchase, sale and issuance of the Notes shall take place at a closing (the “Closing”) at the offices
of Baker & Hostetler LLP, 12100 Wilshire Boulevard, 15th Floor, Los Angeles, California 90025, to be consummated
simultaneously with the execution of this Agreement (the “Closing Date”). In addition, the Company, each Investor
and the other parties thereto shall also execute and deliver, as applicable, (i) the Security Agreement, and all UCC-1 financing
statements (if applicable) and other documents and instruments that the Investors may reasonably request to perfect its security
interest in the collateral described in the Security Agreement, (ii) the Arizona Deed of Trust, and delivery of all related perfection
instruments, (iii) the Nevada Deed of Trust, and delivery of all related perfection instruments, (iv) the Subsidiary Guarantys,
(v) a Registration Rights Agreement, the form of which is attached as Exhibit D hereto (the “Registration Rights
Agreement”); and (vi) an Escrow Agreement, the form of which is attached hereto as Exhibit E (the “Escrow
Agreement”).

 

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2.2Delivery.
At the Closing, (a) each Investor shall pay its respective amount of the Purchase Price to the Company for the Notes to be issued
and sold to such Investor at the Closing, by wire transfer of immediately available funds in accordance with the Company’s
written wire instructions, and (b) the Company will deliver to the Investor one or more Notes such Investor is purchasing as is
set forth opposite such Investor’s name in the Schedule of Investors, in all cases duly executed on behalf of the Company
and registered in the name of such Investor.

 

2.3Escrow
Agreement. The Company and Baker & Hostetler LLP, counsel to the Company, as escrow agent (the “Escrow
Holder”), shall enter into the Escrow Agreement, dated as of the date hereof. All funds received in connection with this
Agreement will be held in escrow by the Escrow Holder. Upon fulfillment of the other conditions precedent set forth in the Transaction
Documents and instructions from the Company to the Escrow Holder, funds may be released from escrow by the Escrow Holder and delivered
to the Company, at which time the securities subscribed for hereunder will be delivered to the Investors. By executing this Agreement,
the Investor hereby authorizes the Escrow Holder to serve as escrow agent with respect to the transactions contemplated by this
Agreement and authorizes the Company to enter into the Escrow Agreement with the Escrow Holder. The Investors shall execute such
documents as are as are reasonably requested by the Escrow Holder, including, without limitation, form W-9 or equivalent and documents
relating to the Patriot Act and similar acts. The Company and each of the Investors acknowledges that (i) the Escrow Holder has
represented the Company in connection with the Escrow Agreement, the other Transaction Documents and in other matters and may represent
the Company in connection with the Escrow Agreement, the other Transaction Documents and other matters, (ii) the Escrow Holder
may continue to represent the Company in connection therewith, the transactions contemplated hereby and thereby and any other matters,
and (iii) if any dispute or litigation arises under the Escrow Agreement, the other Transaction Documents or any other matters,
the Escrow Holder may represent the Company in connection therewith. Accordingly, the Company and the Investors waive any conflict
or potential conflict which may exist by virtue of the Escrow Holder serving as such under the Escrow Agreement, and as counsel
for the Company under the Transaction Documents and any other matters, or in the event of any litigation or other cause of action
arising from the Escrow Agreement, the other Transaction Documents or otherwise, and agree that Escrow Holder shall be entitled
to represent the Company in the event of any such litigation or other cause of action, it being acknowledged and agreed that the
actions of Escrow Holder under the Escrow Agreement are merely ministerial in nature and that, for the convenience of the parties,
Escrow Holder has been requested by the Company and the Investors to act as Escrow Holder under the Escrow Agreement.

 

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SECTION 3

 

Representations and
Warranties of the Company

 

The Company hereby
represents and warrants to each Investor that, except as set forth on the Disclosure Schedule attached as Exhibit F to this
Agreement, and except as disclosed in the Annual Report on Form 10-K of Company for the year ended December 31, 2012 (the “Company
Form 10-K”) and the Quarterly Reports on Form 10-Q and the Current Reports on Form 8-K of the Company (together with
the Company Form 10-K, the “Company SEC Filings”), in each case, filed from the date of the filing of the Company
Form 10-K to the date that is five (5) Business Days prior to the date of this Agreement (or, in the case of each Additional Notes
Closing, the date that is five (5) Business Days prior to the date of such Additional Notes Closing, the following representations
are true and complete as of the date hereof, as of the Closing and as of the date of each Additional Notes Closing. The Disclosure
Schedule shall be delivered separately to the Investors and shall be arranged in sections corresponding to the numbered and lettered
sections and subsections contained in this Section 3. The Disclosure Schedules shall qualify the corresponding representation made
herein to the extent of the disclosure contained in the corresponding section or subsection of the Disclosure Schedules. “Additional
Notes Closing” means a date on which Additional Notes are purchased and issued pursuant to Section 5.1.

 

 

3.1Due Incorporation,
Qualification, etc.  The Company (a) is a corporation duly organized, validly existing and in good standing under the laws
of its state of Nevada; (b) has the power and authority to own, lease and operate its properties and carry on its business as now
conducted and as proposed to be conducted by the Company as described in the Company SEC Filings; and (c) is duly qualified, licensed
to do business and in good standing as a foreign corporation in each jurisdiction where it does business except where the failure
to be so qualified or licensed could not reasonably be expected to have a Material Adverse Effect. For the purposes of this Agreement,
“Material Adverse Effect” shall mean a material adverse effect on (i) the business, properties, assets, operations,
results of operations, prospects or financial or other condition of the Company and its Subsidiaries (as defined below) considered
together; (ii) the ability or authority of the Company to pay and perform its obligations under this Agreement in accordance with
the terms of this Agreement and the other Transaction Documents (as defined below) and to avoid an event of default, or an event
which, with the giving of notice or the passage of time or both, would constitute an event of default, under any Transaction Document;
(iii) the rights and remedies of the Investor under this Agreement, the other Transaction Documents or any related document, instrument
or agreement, or (iv) the validity, binding effect or enforceability of any of the Transaction Documents or the perfection or priority
of any related security interest.

 

3.2Subsidiaries.
The Company has no direct or indirect Subsidiaries other than those listed in Section 3.2 of the Disclosure Schedule. Except
as disclosed in Section 3.2 of the Disclosure Schedule, the Company owns, directly or indirectly, all of the capital stock
or comparable equity interests of each Subsidiary free and clear of any and all liens, charges, claims, security interests, encumbrances,
rights of first refusal, preemptive rights or other restrictions (collectively, “Liens”) and all the issued
and outstanding shares of capital stock or comparable equity interest of each Subsidiary are validly issued and are fully paid,
non-assessable and free of preemptive and similar rights. For the purposes of this Agreement, “Subsidiary” shall
mean, with respect to any Person, each corporation or other entity of which (a) such Person or any other Subsidiary of such Person
is a general partner or a manager or (b) at least 50% of the securities or other ownership interests having by their terms ordinary
voting power to elect at least 50% of the board of directors or other Persons performing similar functions is directly or indirectly
owned or controlled by such Person, by any one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries.
For the purposes of this Agreement, “Person” shall mean and include an individual, a partnership, a corporation
(including a business trust), a joint stock company, a limited liability company, an unincorporated association, a trust, a joint
venture or other entity or a governmental authority.

 

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3.3Authority.
The execution, delivery and performance by the Company and the Company Subsidiaries, as applicable, of this Agreement, the Notes,
the Security Agreement, the Arizona Deed of Trust, the Nevada Deed of Trust, the Subsidiary Guarantys, the Registration Rights
Agreement, the Escrow Agreement and all such other documents required by the terms of this Agreement to be executed by the Company
or the Company Subsidiaries, as applicable, (collectively, the “Transaction Documents”), the consummation of
the transactions contemplated hereby and thereby, the issuance of the Notes, and the reservation and issuance of the Note Shares,
(a) are within the power of the Company and the Company Subsidiaries, as applicable, and (b) have been duly authorized by all necessary
actions on the part of the Company and the Company Subsidiaries, as applicable, and no further filing, consent or authorization
is required by the Company or the Company Subsidiaries, as applicable, their Board of Directors/managers or their stockholders/members
in connection with any of the foregoing.

  

3.4Enforceability.
Each Transaction Document has been duly executed and delivered by the Company or the Company Subsidiaries, as applicable, and constitutes
a legal, valid and binding obligation of the Company or the Company Subsidiaries, as applicable, enforceable against the Company
or the Company Subsidiaries, as applicable, in accordance with its terms, except as limited by bankruptcy, insolvency or other
laws of general application relating to or affecting the enforcement of creditors’ rights generally and general principles
of equity.

 

3.5Non-Contravention.
The execution and delivery by each of the Company and the Company Subsidiaries, as applicable, of the Transaction Documents and
the performance of its obligation thereunder and consummation of the transactions contemplated hereby and thereby (including, without
limitation, the issuance of the Notes and the reservation for issuance and issuance of the Note Shares) do not and will not (a)
violate the Company’s or the Company Subsidiaries,’ as applicable, Articles of Incorporation, Certificate of Formation,
Bylaws or other organizational or governance documents, as applicable, as amended, as the case may be (“Charter Documents”),
or any judgment, order, writ, decree, statute, rule or regulation applicable to the Company or any of its Subsidiaries; (b) violate
any provision of, or result in the termination, amendment, cancellation or breach or the acceleration of, or entitle any other
Person to accelerate (whether after the giving of notice or lapse of time or both), any mortgage, indenture, agreement, instrument
or contract to which the Company or any of its Subsidiaries is a party or by which it or its properties are bound; or (c) result
in the creation or imposition of, or its obligations to create, any Lien upon any property, asset or revenue of the Company or
any of its Subsidiaries or the suspension, revocation, impairment, forfeiture, or nonrenewal of any permit, license, authorization
or approval applicable to the Company or any of its Subsidiaries, their respective businesses or operations, or any of their respective
assets or properties.

 

3.6Approvals.
Neither the Company nor any of its Subsidiaries are required to obtain any consent, authorization or order of, or make any filing
or registration with, or provide notice to, any court, governmental agency or authority or any regulatory or self-regulatory agency
or authority or any other Person in order for them to execute, deliver or perform any of their obligations under or contemplated
by the Transaction Documents, in each case in accordance with the terms hereof or thereof other than such as have been made or
obtained and except for the filing of Form D pursuant to Regulation D or any “blue sky” filing.

 

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3.7Title
to Assets. The Company and its Subsidiaries have good and marketable title to all real property owned by them that is material
to the business of the Company and the Company and its Subsidiaries have good and marketable title in all personal property owned
by them that is material to the business of the Company and its Subsidiaries, in each case free and clear of all Liens, except
for security deposits, statutory liens, bankers’ liens and other immaterial encumbrances not securing indebtedness for borrowed
money. Any real property and facilities held under lease by the Company and its Subsidiaries are held by them under valid and subsisting
leases of which the Company and its Subsidiaries are in material compliance.

 

3.8No Violation
or Default. Each of the Company and its Subsidiaries, as applicable, is not in violation of or in default with respect
to (a) its Charter Documents or any judgment, order, writ, decree, statute, rule or regulation applicable to it; (b) any mortgage,
indenture, agreement, instrument or contract to which it is a party or by which it or any of its properties is bound (nor is there
any waiver in effect which, if not in effect, would result in such a violation or default), (c) any order of any court, arbitrator
or governmental body or (d) any statute, rule or regulation of any governmental authority, where, in each case, such violation
or default, individually, or together with all such violations or defaults, could reasonably be expected to have a Material Adverse
Effect.

 

3.9Litigation.
No actions (including, without limitation, derivative actions), suits, proceedings, notices of violation or investigations are
pending or, to the knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries at law or in
equity in any court or before any other governmental authority, arbitrator, administrative agency or regulatory authority that
if adversely determined (a) would (alone or in the aggregate) reasonably be expected to have a Material Adverse Effect or (b) seeks
to enjoin, either directly or indirectly, the execution, delivery or performance by the Company of the Transaction Documents or
the transactions contemplated thereby.

 

3.10Taxes.
Within the times and in the manner prescribed by law, the Company and each of its Subsidiaries (a) has filed all foreign, federal,
state and local income and all other material tax returns, reports and declarations required by any jurisdiction to which it is
subject, (b) has paid all taxes, assessments and penalties due and payable that are material in amount, shown or determined to
be due on such returns, reports and declarations, except those being contested in good faith by appropriate proceeding and in respect
of which reserves have been established in accordance with United States generally accepted accounting principles applied on a
consistent basis during the periods involved (“GAAP”), and (c) has set aside on its books provision reasonably
adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply.
There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and, to the knowledge
of the Company, there is no basis for any such claim.

 

3.11OTCBB
Compliance. The Company is in compliance with all requirements for, and its Common Stock is quoted on the Electronic Over-the-Counter
Bulletin Board system.

 

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3.12SEC Documents.
The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), including pursuant to Section 13(a) or 15(d)
thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to
file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being
collectively referred to herein as the “Continuous Disclosure Reports”) on a timely basis or has received a
valid extension of such time of filing and has filed any such Continuous Disclosure Reports prior to the expiration of any such
extension. As of their respective dates (or if amended or superseded by a filing prior to the date that is five (5) Business Days
prior to the date of this Agreement, then on the date of such filing), the Continuous Disclosure Reports complied in all material
respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the Continuous Disclosure
Reports, when filed (or if amended or superseded by a filing prior to the date that is five (5) Business Days prior to the date
of this Agreement, then on the date of such filing), contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The financial statements of the Company included in the Continuous Disclosure Reports complied
in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto
as in effect at the time of filing (or if amended or superseded by a filing prior to the date that is five (5) Business Days prior
to the date of this Agreement, then on the date of such filing). Such financial statements have been prepared in accordance with
GAAP, except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial
statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of
the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for
the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. All agreements
to which the Company or any Subsidiary is a party or to which the property or assets of the Company or any Subsidiary are subject
are included as part of or identified in the Continuous Disclosure Reports, to the extent such agreements are required to be included
or identified pursuant to the rules and regulations of the SEC.

 

3.13Absence
of Certain Changes. Since December 31, 2012, there has been no adverse change and no adverse development that would constitute
a Material Adverse Effect. Since June 30, 2013, the Company has not declared or paid any dividends. Neither the Company nor any
of its Subsidiaries have taken any steps to seek protection pursuant to any bankruptcy law nor does the Company or any of its Subsidiaries
have any knowledge or reason to believe that its creditors intend to initiate involuntary bankruptcy proceedings or any actual
knowledge of any fact that would reasonably lead a creditor to do so.

 

3.14Internal
Accounting Controls. The Company and its Subsidiaries maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s
general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any differences.

 

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3.15Sarbanes-Oxley
Act; Internal Accounting Controls. Except as set forth in the Continuous Disclosure Reports: (a) the Company
is in material compliance with all provisions of the Sarbanes-Oxley Act of 2002 which are effective and applicable to it as of
the Closing Date, (b) the Company and its Subsidiaries maintain a system of internal accounting controls designed to provide reasonable
assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions
are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the
recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken
with respect to any differences, (c) the Company maintains disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) for the Company and reasonably designed such disclosure controls and procedures to ensure that information
required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the Commission’s rules and forms, (d) the Company’s certifying officers
have evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered
by the Company’s most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”),
(e) the Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers
about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date, and (f)
since the Evaluation Date, there have been no changes in the Company’s internal control over financial reporting (as such
term is defined in the Exchange Act) that has materially affected, or is reasonably likely to materially affect, the Company’s
internal control over financial reporting.

 

3.16No Disagreements
with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably anticipated by the
Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company which could
affect the Company’s ability to perform any of its obligations under any of the Transaction Documents, and the Company is
current with respect to any fees owed to its accountants and lawyers.

 

3.17Capitalization.
The capitalization of the Company is as set forth on Schedule 3.17. The Company has not issued any capital stock since its
most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options under
the Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee
stock purchase plans and pursuant to the conversion or exercise of Common Stock Equivalents outstanding as of the date of the most
recently filed periodic report under the Exchange Act. No Person has any right of first refusal, preemptive right, right of participation,
or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as set forth on Schedule
3.17 and as a result of the purchase and sale of the Notes, there are no outstanding options, warrants, scrip rights to subscribe
to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable
or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments,
understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common
Stock or Common Stock Equivalents other than options with respect to options granted to employees, consultants, officers and directors
of the Company to purchase shares of Common Stock of the Company. The issuance and sale of the Notes will not obligate the Company
to issue shares of Common Stock or other securities to any Person (other than the Investors pursuant to the Notes) and will not
result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of
such securities. All of the outstanding capital stock of the Company is validly issued, fully paid and nonassessable, have been
issued in compliance with all federal and state securities laws, and none of such outstanding shares were issued in violation of
any preemptive rights or similar rights to subscribe for or purchase securities. Except as set forth in Section 3.6 above,
no further approval or authorization of any stockholder, the board of directors of the Company or others is required for the reservation
for issuance and the issuance and sale of the Shares. Except as set forth on Schedule 3.17, there are no stockholder agreements,
voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party
or, to the knowledge of the Company, between or among any of the Company’s stockholders. For purposes of this Agreement,
“Common Stock Equivalents” means any securities of the Company or its Subsidiaries which would entitle the holder
thereof to acquire at any time shares of Common Stock, including, without limitation, any debt, preferred stock, rights, options,
warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the
holder thereof to receive, shares of Common Stock.

 

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3.18Issuance
of Notes. The Notes are duly authorized and, upon issuance in accordance with the terms hereof, shall be validly issued
and free from all preemptive or similar rights, taxes, liens and charges with respect to the issuance thereof. As of the Closing,
the Company shall have duly authorized and reserved for issuance a number of shares of Common Stock which equals the number of
Note Shares. The Company shall, so long as any of the Notes are outstanding, take all action necessary to reserve and keep available
out of its authorized and unissued capital stock, solely for the purpose of effecting the conversion of the Notes, 100% of the
number of shares of Common Stock issuable upon the conversion of the Notes. When issued upon conversion of the Notes, the Note
Shares will be validly issued, fully paid and nonassessable and free from all preemptive or similar rights, taxes, liens and charges
with respect to the issue thereof, with the holders being entitled to all rights accorded to a holder of Common Stock. The issuance
and sale by the Company of the Securities are exempt from registration under the Securities Act.

 

3.19Related
Party Transactions. No affiliate, officer, director, or any Related Party is a party to any agreement with the Company.
No employee of the Company or any Related Party is indebted in any amount to the Company and, except for accrued payroll obligations,
the Company is not indebted to any of its employees or any Related Party. For purposes of this Agreement, “Related Party”
shall mean with respect to any specified Person (i) each Person who, together with its affiliates, owns of record or beneficially
at least five percent (5%) of the outstanding capital stock of the specified Person as of the date of this Agreement; (ii) each
individual who is, or who has at any time been, an officer or director of the specified Person; (iii) each affiliate of the Persons
referred to in clauses (i) and (ii) above; (iv) any trust or other entity (other than the specified Person) in which any one of
the Persons referred to in clauses (i), (ii) and (iii) above holds (or in which more than one of such Persons collectively hold),
beneficially or otherwise, a voting, proprietary or equity interest; and (v) any trust or other entity (other than the specified
Person) with which any of such Persons is affiliated.

 

3.20Off Balance
Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company and an unconsolidated
or other off balance sheet entity that is required to be disclosed by the Company in its Company SEC Filings and is not so disclosed
or that otherwise would be reasonably likely to have a Material Adverse Effect.

 

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3.21Patents
and Trademarks. To the Company’s knowledge, the Company and its Subsidiaries own, or possess adequate rights or licenses
to use, all trademarks, trade names, service marks, service mark registrations, service names, patents, patent applications, patent
rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and other intellectual property
rights (“Intellectual Property Rights”) necessary to conduct their respective businesses as now conducted. Except
as disclosed in the Company SEC Filings, there is no claim, action or proceeding being made or brought, or to the knowledge of
the Company, being threatened, against the Company or its Subsidiaries regarding its Intellectual Property Rights.

 

3.22Insurance.
The Company and its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and
in such amounts as are prudent and customary in the businesses and location in which the Company and its Subsidiaries are engaged.
Neither the Company nor any of its Subsidiaries has sustained since the date of the latest unaudited financial statements included
in the Company SEC Filings any loss or interference with its business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Company SEC Filings that would individually or in the aggregate result in a Material Adverse Effect.

 

3.23Regulatory
Permits. The Company and its Subsidiaries possess all certificates, approvals, consents, orders, authorizations and permits
issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses
as described in the Company SEC Filings (“Material Permits”), and neither the Company nor any Subsidiary has
received any written notice of proceedings or threatened proceedings relating to or that could result in the revocation or modification
of any Material Permit.

 

3.24Employee
Relations. Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or, to the
Company’s knowledge, employs any member of a union. No current executive officer of the Company or any of its Subsidiaries
has notified in writing the Company or any such Subsidiary that such officer intends to leave the Company or any such Subsidiary
or otherwise terminate such officer's employment with the Company or any such Subsidiary. To the knowledge of the Company or any
such Subsidiary, no executive officer of the Company or any of its Subsidiaries is in violation of any material term of any employment
contract, confidentiality, disclosure or proprietary information agreement, non-competition agreement, or any other contract or
agreement or any restrictive covenant, and the continued employment of each such executive officer does not subject the Company
or any such Subsidiary to any liability with respect to any of the foregoing matters.

 

3.25Labor
Matters. The Company and its Subsidiaries are in compliance in all material respects with all federal, state, local and
foreign laws and regulations respecting labor, employment and employment practices and benefits, terms and conditions of employment
and wages and hours, except where failure to be in compliance would not, either individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.

 

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3.26Environmental
Laws. To the Company’s knowledge, the Company and its Subsidiaries (a) are in compliance with any and all Environmental
Laws (as hereinafter defined), (b) have received all permits, licenses or other approvals required of them under applicable Environmental
Laws to conduct their respective businesses, each of which is in full force and effect, and (c) are in compliance with all terms
and conditions of any such permit, license or approval where, in each of the foregoing clauses (a), (b) and (c), the failure to
so comply would be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect. The term “Environmental
Laws” means all federal, state, local or foreign laws relating to pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without
limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or
toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters,
orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.

 

3.27Foreign
Corrupt Practices. Neither the Company nor any of its Subsidiaries nor, to the knowledge of the Company, any director,
officer, agent, employee or other Person acting on behalf of the Company or any of its Subsidiaries has, in the course of its actions
for, or on behalf of, the Company (a) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful
expenses relating to political activity; (b) made or offered to make any direct or indirect unlawful payment to any foreign or
domestic government official or employee from corporate funds; (c) violated or is in violation of any provision of the U.S. Foreign
Corrupt Practices Act of 1977, as amended; or (d) made or offered to make any unlawful bribe, rebate, payoff, influence payment,
kickback or other unlawful payment to any foreign or domestic government official or employee.

 

3.28Application
of Takeover Protections. The Company and its board of directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company’s Charter Documents or the laws of its state of incorporation
that is or could become applicable to any of the Investors as a result of the Investors and the Company fulfilling their obligations
or exercising their rights under the Transaction Documents, including without limitation, as a result of the Company’s issuance
of the Securities and the Investors’ ownership of the Securities.

 

3.29Regulation
M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (a) taken, directly or indirectly,
any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate
the sale or resale of any of the Securities, (b) sold, bid for, purchased, or, paid any compensation for soliciting purchases of,
any of the Securities, or (c) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other
securities of the Company.

 

3.30General
Solicitation. Neither the Company, nor any of its affiliates, nor any Person acting on its or their behalf, has engaged
in any form of general solicitation or general advertising (within the meaning of Regulation D promulgated under the Securities
Act) in connection with the offer or sale of the Notes.

 

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3.31No Integration.
Neither the Company nor any of its affiliates nor, any Person acting on the Company’s behalf has, directly or indirectly,
at any time within the past six months, made any offer or sale of any security or solicitation of any offer to buy any security
under circumstances that would (a) eliminate the availability of the exemption from registration under Regulation D under the Securities
Act in connection with the offer and sale by the Company of the Securities as contemplated hereby or (b) cause the offering of
the Securities pursuant to the Transaction Documents to be integrated with prior offerings by the Company for purposes of any applicable
stockholder approval provisions. The Company is not required to be registered as, and is not an affiliate of, an “investment
company” within the meaning of the Investment Company Act of 1940, as amended. The Company is not required to be registered
as a United States real property holding corporation within the meaning of the Foreign Investment in Real Property Tax Act of 1980.

 

3.32Private
Placement. Assuming the accuracy of the representations and warranties of the Investors contained in Section 4 of this
Agreement, it is not necessary, in connection with the issuance and sale of any Securities, in the manner contemplated by the Transaction
Documents, to register any Securities under the Securities Act.

 

3.33Disclosure;
Accuracy of Information Furnished. The Company confirms that neither it nor any officers, directors or affiliates, has
provided any of the Investors or their agents or counsel with any information that constitutes or might constitute material, nonpublic
information (other than the existence and terms of the issuance of Securities, as contemplated by this Agreement). The Company
understands and confirms that each of the Investors may rely on the foregoing representations in effecting transactions in securities
of the Company. None of the Transaction Documents and none of the other certificates, statements or information furnished to an
Investor or its agents or counsel by or on behalf of the Company in connection with the Transaction Documents or the transactions
contemplated thereby contains or will contain any untrue statement of a material fact or omits or will omit to state a material
fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The Company
acknowledges and agrees that no Investor makes or has made any representations or warranties with respect to the transactions contemplated
hereby other than those set forth in Section 4 of this Agreement.

 

SECTION 4

 

Representations and
Warranties of the Investor

 

Each Investor represents
and warrants with respect to only itself that:

 

4.1Authority
and Binding Obligation. The execution, delivery and performance by the Investor of the Transaction Documents to
which it is a party and the consummation of the transactions contemplated thereby (a) are within the power of the Investor and
(b) have been duly authorized by all necessary actions on the part of the Investor. Each Transaction Document to which it is a
party has been, or will be, duly executed and delivered by the Investor and constitutes, or will constitute, a legal, valid and
binding obligation of the Investor, enforceable against the Investor in accordance with its terms, except as limited by bankruptcy,
insolvency or other laws of general application relating to or affecting the enforcement of creditors’ rights generally and
general principles of equity.

 

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4.2Reserved.

 

4.3No Public
Sale or Distribution. Such Investor is (a) acquiring the Notes, and (b) upon the conversion of the Notes, will acquire
the Note Shares issuable upon conversion thereof, in the ordinary course of business for its own account and not with a view towards,
or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under
the Securities Act and such Investor does not have a present arrangement to effect any distribution of the Securities to or through
any person or entity; provided, however, that by making the representations herein, such Investor does not agree
to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any
time in accordance with or pursuant to a registration statement or an exemption under the Securities Act. Such Investor does not
presently have any agreement or understanding, directly or indirectly, with any Person to distribute any of the Securities.

 

4.4Securities
Law Compliance. Such Investor understands that the Securities are being offered and sold to it in reliance on specific
exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying
in part upon the truth and accuracy of, such Investor’s representations and warranties set forth herein in order to determine
the availability of such exemptions and the eligibility of such Investor to acquire the Securities. The Investor has not been formed
solely for the purpose of making this investment and is purchasing the Securities for its own account for investment, not as a
nominee or agent, and not with a view to, or for resale in connection with, the distribution thereof. The Investor has such knowledge
and experience in financial and business matters that the Investor is capable of evaluating the merits and risks of such investment,
is able to incur a complete loss of such investment and is able to bear the economic risk of such investment for an indefinite
period of time. The Investor is an accredited investor as such term is defined in Rule 501 of Regulation D under the Securities
Act.

 

4.5Access
to Information. Such Investor is not aware that it and its advisors, if any, have not been furnished with all materials
relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities
which have been requested by such Investor. Such Investor and its advisors, if any, have been afforded the opportunity to ask questions
of the Company. Neither such inquiries nor any other due diligence investigations conducted by such Investor or its advisors, if
any, or its representatives shall modify, amend or affect such Investor’s right to rely on the Company’s representations
and warranties contained herein in the other Transaction Documents and in the certificates, statements and other information furnished
to it or its advisors. Such Investor understands that its investment in the Securities involves a high degree of risk and is able
to afford a complete loss of such investment. Such Investor has sought such accounting, legal and tax advice as it has considered
necessary to make an informed investment decision with respect to its acquisition of the Securities.

 

4.6No Governmental
Review. Such Investor understands that no United States federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment
in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.

 

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4.7Transfer
or Resale. Such Investor understands that: (a) the Securities have not been and are not being registered under the Securities
Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (i) subsequently registered
thereunder, (ii) such Investor shall have delivered to the Company an opinion of counsel, in a form reasonably acceptable to the
Company, to the effect that such Securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to
an exemption from such registration, or (iii) such Investor provides the Company with reasonable assurance that such Securities
can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated under the Securities Act (collectively, “Rule
144”); and (b) any sale of the Securities made in reliance on Rule 144 may be made only in accordance with the terms
of Rule 144 and further, if Rule 144 is not applicable, any resale of the Securities under circumstances in which the seller (or
the Person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the Securities Act) may
require compliance with some other exemption under the Securities Act or the rules and regulations of the SEC thereunder. Notwithstanding
the foregoing, the Securities may be pledged in connection with a bona fide margin account or other loan secured by the Securities
and such pledge of Securities shall not be deemed to be a transfer, sale or assignment of the Securities hereunder, and no Investor
effecting a pledge of Securities shall be required to provide the Company with any notice thereof or otherwise make any delivery
to the Company pursuant to this Agreement or any other Transaction Document, including, without limitation, this Section 4.7; provided,
that in order to make any sale, transfer or assignment of Securities, such Investor and its pledgee makes such disposition in accordance
with or pursuant to a registration statement or an exemption under the Securities Act.

 

4.8Legends.
Such Investor understands that the certificates or other instruments representing the Notes and the stock certificates representing
the Note Shares, except as set forth below, shall bear any legend as required by the “blue sky” laws of any state and
a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of such stock
certificates):

 

NEITHER THE
ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS INSTRUMENT NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE
OR FOR WHICH THEY ARE EXERCISABLE HAVE BEEN THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT), OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY
NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING,
THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.

 

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4.9Short
Sales and Confidentiality Prior To The Date Hereof. Other than consummating the transactions contemplated hereunder, such
Investor has not, nor has any Person acting on behalf of or pursuant to any understanding with such Investor, directly or indirectly
executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing from the
time that such Investor first received a term sheet (written or oral) from the Company or any other Person representing the Company
setting forth the material terms of the transactions contemplated hereunder until the date hereof (“Discussion Time”).
Notwithstanding the foregoing, in the case of an Investor that is a multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of such Investor's assets and the portfolio managers have no direct knowledge of the investment
decisions made by the portfolio managers managing other portions of such Investor's assets, the representation set forth above
shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase
the Securities covered by this Agreement. Other than to other Persons party to this Agreement, such Investor has maintained the
confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction).
No Person has made to such Investor any written or oral representations (a) that any Person will resell or repurchase the Securities,
(b) that any Person will refund the purchase price of the Securities, or (c) as to the future price or value of the Securities.
“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange
Act (but shall not be deemed to include the location and/or reservation of borrowable Common Stock.

 

4.10Residency.
Such Investor is a resident of that jurisdiction specified below its address on the Schedule of Investors.

 

4.11Broker-Dealer
Status. Such Investor is a not a registered broker-dealer or, if such Investor is an affiliate of a broker-dealer, such
Investor is acquiring the Securities hereunder in the ordinary course of its business and such Investor does not presently have
any agreement or understanding, directly or indirectly, with any Person to distribute any of the Securities.

 

4.12Foreign
Investors. If the Investor is not a United States person (as defined by Section 7701(a)(30) of the Internal Revenue
Code of 1986, as amended (the “Code”)), the Investor hereby represents that it has satisfied itself as to the
full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Securities or any use of
this Agreement, including (a) the legal requirements within its jurisdiction for the purchase of the Securities, (b) any foreign
exchange restrictions applicable to such purchase, (c) any governmental or other consents that may need to be obtained, and
(d) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale, or
transfer of the Securities. The Investor’s subscription and payment for and continued beneficial ownership of the Securities
will not violate any applicable securities or other laws of the Investor’s jurisdiction.

 

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SECTION 5

 

Certain Agreements

 

5.1Optional
Investment. The Company hereby grant an option to the Investors to purchase, on or before the first anniversary
of the Closing Date, an additional amount of Notes (the “Additional Notes”) from the Company at the Purchase
Price, not to exceed the aggregate amount of fifteen percent (15%) of the principal amount of Notes purchased under the Maximum
Aggregate Investment (the “Optional Investment”). Except as otherwise set forth in this Agreement, the Additional
Notes shall be on the same terms and conditions as the original Notes issued at Closing. The maximum principal amount of Additional
Notes that each Investor may purchase shall be pro rata to the original principal amount of Notes purchased by each Investor at
Closing (i.e., each Investor will only be permitted to purchase up to fifteen percent (15%) of the aggregate principal amount of
Notes purchased by such Investor at the Closing at a corresponding pro rata portion of the Purchase Price). The Investors may exercise
this right in whole or from time to time in part by giving written notice to the Company not later than five (5) Business Days
prior to the first anniversary of the Closing Date. Any exercise notice shall specify the amount of Additional Notes to be purchased
by the Investors under the Optional Investment and the date on which such Additional Notes are to be purchased. Each purchase date
(including the delivery to the Company of payment in full of the Purchase Price for the Additional Notes) must be at least two
(2) Business Days after the written notice is given and later than five (5) Business Days after the date of such notice (the “Optional
Delivery Date”). On each Optional Delivery Date (a) the Investor exercising the Optional Investment shall purchase the
amount of Additional Notes set forth in the exercise notice, (b) the Company shall sell the amount of Additional Notes set forth
in the exercise notice, subject to receipt of the Purchase Price for the Additional Notes. Failure of the Investor to comply with
the foregoing shall cause any purported exercise of the Optional Investment to be null and void. The Additional Notes shall not
be assignable, except with the express written consent of the Company.

 

5.2Debt Issuances.

 

(a)Defined Terms.
When used herein, the following terms shall have the respective meanings indicated:

 

(i)“Debt”
means, as to a particular Person at the specified time of determination, the sum of the following:

 

(1)all obligations
of such Person for borrowed money, including obligations evidenced by bonds, debentures, notes or other similar instruments and
accruals for interest not yet earned, but excluding any and all trade accounts payable incurred in the ordinary course of business;

 

(2)every reimbursement
obligation of such Person with respect to letters of credit, bankers’ acceptances or similar facilities that are issued to
support an obligation for borrowed money or that creates an obligation under a credit facility pursuant to which obligations for
borrowed money are created; and

 

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(3)every obligation
of such Person as a guarantor with respect to the items referenced in (1)-(2) and Debt of others secured by a lien on assets of
such Person.

(4) “Issuer
Party” means the Company or any Subsidiary of the Company and “Issuer Parties” means all of them.

 

(b)So long as the
Notes (including the Additional Notes) are outstanding and not subject to Defeasance (as such term is defined in the Security Agreement),
no Issuer Party may, without the prior written consent of the holders of a majority of the then outstanding aggregate unpaid principal
amount of the Notes (including the Additional Notes, if any), incur: (i) any additional secured Debt, or (b) Debt of any kind (unsecured
or secured) with a maturity of all or any portion thereof of less than five (5) years from the Closing Date, except for purposes
of Defeasance (as such term is defined in the Security Agreement) of the Notes (including the Additional Notes, if any).

 

5.3Indemnification
of Investor. Subject to the provisions of this Section 5.3, the Company will indemnify and hold each Investor and
its directors, officers, managers, stockholders, members, partners, employees and agents (and any other Persons with a functionally
equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls
such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors,
officers, managers, stockholders, agents, members, partners or employees (and any other Persons with a functionally equivalent
role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each,
a “Investor Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages,
costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any such Investor Party may suffer or incur as a result of or relating to (a) any breach of any of
the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents
or (b) any action instituted against an Investor in any capacity, or any of them or their respective affiliates, by any stockholder
of the Company who is not an affiliate of such Investor, with respect to any of the transactions contemplated by the Transaction
Documents (unless such action is based upon a breach of such Investor’s representations, warranties or covenants under the
Transaction Documents or any agreements or understandings such Investor may have with any such stockholder or any violations by
the Investor of state or federal securities laws or any conduct by such Investor which constitutes fraud, gross negligence, willful
misconduct or malfeasance).

 

SECTION 6

 

Conditions to the Investor’s
Obligation to Close

 

Each Investor’s
obligations at the Closing are subject to the fulfillment, on or prior to the Closing Date, of all of the following conditions,
any of which may be waived in whole or in part by the Investor:

 

6.1Representations
and Warranties. The representations and warranties made by the Company in Section 3 hereof shall have been true and correct
when made, and shall be true and correct on the Closing Date.

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6.2Performance.
The Company shall have performed and complied with all covenants, agreements, obligations and conditions contained in this Agreement
that are required to be performed or complied with by the Company on or before such Closing.

 

6.3Governmental
Approvals and Filings. The Company shall have obtained all governmental approvals required in connection with the lawful
sale and issuance of the Notes.

 

6.4Legal
Requirements. At the Closing, the sale and issuance by the Company, and the purchase by the Investor, of the Notes shall
be legally permitted by all laws and regulations to which the Investor or the Company are subject.

 

6.5Proceedings
and Documents. All corporate and other proceedings in connection with the transactions contemplated at the Closing and
all documents and instruments incident to such transactions shall be reasonably satisfactory in substance and form to the Investor.

 

6.6Transaction
Documents. The Company shall deliver to the Investors:

 

(a)this Agreement
duly executed by the Company;

 

(b)the Notes duly
executed by the Company;

 

(c)the Security Agreement
duly executed by the Company, Clarkdale Minerals, Clarkdale Metals and the Collateral Agent;

 

(d) the Arizona Deed
of Trust duly executed by Clarkdale Minerals, and if required by applicable law, the Collateral Agent and the Trustee listed therein;

 

(e)the Nevada Deed
of Trust duly executed by the Company, and if required by applicable law, the Collateral Agent and the Trustee listed therein;

 

(f)the Subsidiary
Guarantys duly executed by Clarkdale Minerals and Clarkdale Metals, as applicable;

 

(g)the Registration
Rights Agreement duly executed by the Company;

 

(h)the Escrow Agreement
duly executed by the Company and the Escrow Holder;

 

(i)evidence of satisfaction
of Section 3.28; and

 

(j)all other Transaction
Documents duly executed by the Company or its Subsidiaries, as applicable.

 

6.7Compliance
Certificate. The President of the Company shall deliver to the Investors at Closing a certificate certifying that the conditions
specified in this Section 6 have been fulfilled.

 

6.8Secretary’s
Certificate. The Secretary of the Company shall deliver to the Investors at Closing a certificate attaching and certifying
to the truth and correctness of the resolutions of the Company’s board of directors adopted in connection with the transactions
contemplated by this Agreement.

 

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6.9Good Standing
Certificates. The Company shall have delivered to Investors (a) a certificate of the Secretary of State of the State of
Nevada, with respect to the good standing of the Company, (b) a certificate of good standing from the applicable governmental entity
in each jurisdiction where the Company is required to be qualified to do business, and (c) with respect to each of the Company’s
Subsidiaries, (i) a certificate of good standing (or equivalent document) from the Secretary of State (or equivalent governmental
entity) of the jurisdiction of incorporation or organization of such Subsidiary, and (ii) a certificate of good standing from the
applicable governmental entity in each jurisdiction where it is required to be qualified to do business.

 

SECTION 7

 

Conditions to Company’s
Obligation to Close

 

The Company’s
obligation to issue and sell the Notes at the Closing is subject to the fulfillment, on or prior to the Closing Date, of the following
conditions, any of which may be waived in whole or in part by the Company:

 

7.1Representations
and Warranties. The representations and warranties made by the Investor in Section 4 shall be true and correct when made,
and shall be true and correct on the Closing Date.

 

7.2Purchase
Price. The Investors shall have delivered to the Company the Purchase Price.

 

7.3Transaction
Documents. Each Investor shall deliver to the Company:

 

(a)this Agreement
duly executed by such Investor,

 

(b)the Security Agreement
duly executed by such Investor, and

 

(c)the Registration
Rights Agreement duly executed by such Investor.

 

SECTION 8

 

Miscellaneous

 

8.1Fees and
Expenses. Upon the Closing, the Company shall pay the reasonable fees and expenses of Akin Gump Strauss Hauer & Feld
LLP, counsel for Luxor Capital Partners, L.P. At the Closing, the Company will remit such amount by wire transfer directly to Akin
Gump on behalf of the Company. Except for the amount payable to such firm, the Company shall not be liable for and shall have no
obligation to pay the fees and expenses of counsel to any other Investor.

 

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8.2Finder’s
Fees and Commissions. Each party represents that it neither is nor will be obligated for any finder’s fee or commission
in connection with this transaction. Each Investor agrees to indemnify and to hold harmless the Company from any liability for
any commission or compensation in the nature of a finder’s or broker’s fee arising out of this transaction (and the
costs and expenses of defending against such liability or asserted liability) for which each or any Investor of its officers, employees,
or representatives is responsible. The Company agrees to indemnify and hold harmless each Investor from any liability for any commission
or compensation in the nature of a finder’s or broker’s fee arising out of this transaction (and the costs and expenses
of defending against such liability or asserted liability) for which the Company or any of its officers, employees or representatives
is responsible.

 

8.3Independent
Nature of Investors’ Obligations and Rights. The obligations of each Investor under any Transaction Document are
several and not joint with the obligations of any other Investor, and no Investor shall be responsible in any way for the performance
of the obligations of any other Investor under any Transaction Document and nor shall the Company be relieved of any of its obligations
to an Investor as a result of the breach hereof by any other Investor. Nothing contained herein or in any other Transaction Document,
and no action taken by any Investor pursuant hereto or thereto, shall be deemed to constitute the Investors as a partnership, an
association, a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in concert
or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents and the Company acknowledges
that the Investors are not acting in concert or as a group with respect to such obligations or the transactions contemplated by
the Transaction Documents. Each Investor confirms that it has independently participated in the negotiation of the transaction
contemplated hereby with the advice of its own counsel and advisors. Each Investor shall be entitled to independently protect and
enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents,
and it shall not be necessary for any other Investor to be joined as an additional party in any proceeding for such purpose.

 

8.4Waivers
and Amendments. Any provision of this Agreement may be amended, waived or modified only upon the written consent of the
Company and the Investors.

 

8.5Delays
or Omissions. Except as expressly provided herein, no delay or omission to exercise any right, power or remedy accruing
to either party to this Agreement upon any breach or default of the other party under this Agreement shall impair any such right,
power or remedy of such non-defaulting party, nor shall it be construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of
any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any
party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically
set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party to this Agreement,
shall be cumulative and not alternative.

 

8.6Attorney’s
Fees. In the event that any suit or action is instituted to enforce any provisions in this Agreement, the prevailing party
in such dispute shall be entitled to recover from the losing party all fees, costs and expenses of enforcing any right of such
prevailing party under or with respect to this Agreement, including without limitation, such reasonable fees and expenses of attorneys
and accountants, which shall include, without limitation, all fees, costs and expenses of appeals.

 

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8.7Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed
by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of
conflicts of law thereof. The Company agrees that all legal proceedings concerning the interpretations, enforcement and defense
of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, directors,
officers, shareholders, employees or agents) may be brought against it in the state and federal courts sitting in the City of New
York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City
of New York for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein (including with respect to the enforcement of this Agreement), and hereby irrevocably waives, agrees not to
assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper and agrees that service of process in any such proceeding may be made by mail addressed
to it in accordance with Sections 8.12(b) (personal delivery) or (f) (certified or registered mail) hereof. Each party hereto hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Agreement or the transactions contemplated hereby. If either party shall commence an action
or proceeding to enforce any provisions of this Agreement, then the prevailing party in such action or proceeding shall be reimbursed
by the other party for its attorneys’ fees and other costs and expenses incurred with the investigation, preparation and
prosecution of such action or proceeding.

 

8.8Survival.
The representations, warranties, covenants and agreements made herein shall survive the execution and delivery of this Agreement.

 

8.9Successors
and Assigns. This Agreement, and any and all rights, duties and obligations hereunder, shall not be assigned, transferred,
delegated or sublicensed by any party without the prior written consent of the non-assigning party; provided, that the Investors
may assign its rights hereunder (including the rights in Section 5) to any of their affiliates without the Company’s prior
consent. Except as set forth in the previous sentence, any attempt by any party without such permission to assign, transfer, delegate
or sublicense any rights, duties or obligations that arise under this Agreement shall be void. Subject to the foregoing and except
as otherwise provided herein, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors,
assigns, heirs, executors and administrators of the parties hereto.

 

    	21

    	 

    

 

8.10Registration,
Transfer and Replacement of the Note. The Company will keep, at its principal executive office, books for the registration
and registration of transfer of the Notes. Prior to presentation of any Note for registration of transfer, the Company shall treat
the Person in whose name such Note is registered as the owner and holder of such Note for all purposes whatsoever, whether or not
such Note shall be overdue, and the Company shall not be affected by notice to the contrary. Subject to any restrictions on or
conditions to transfer set forth in any Note, the holder of any Note, at its option, may in person or by duly authorized attorney
surrender the same for exchange at the Company’s chief executive office, and promptly thereafter and at the Company’s
expense, except as provided below, receive in exchange therefor one or more new Note(s), each in the principal amount requested
by such holder, dated the date to which interest shall have been paid on the Note so surrendered or, if no interest shall have
yet been so paid, dated the date of the Note so surrendered and registered in the name of such Person or Persons as shall have
been designated in writing by such holder or its attorney for the same principal amount as the then unpaid principal amount of
the Note so surrendered. Upon receipt by the Company of evidence reasonably satisfactory to it of the ownership of and the loss,
theft, destruction or mutilation of any Note and (i) in the case of loss, theft or destruction, of customary indemnity reasonably
satisfactory to it; or (ii) in the case of mutilation, upon surrender thereof, the Company, at its expense, will execute and
deliver in lieu thereof a new Note executed in the same manner as the Note being replaced, in the same principal amount as the
unpaid principal amount of such Note and dated the date to which interest shall have been paid on such Note or, if no interest
shall have yet been so paid, dated the date of such Note.

 

8.11Entire
Agreement. This Agreement together with the other Transaction Documents constitute and contain the entire agreement between
the Company and the Investors and supersede any and all prior agreements, negotiations, correspondence, understandings and communications
among the parties, whether written or oral, respecting the subject matter hereof.

 

8.12Notices.
All notices, requests, demands, consents, instructions or other communications required or permitted hereunder shall in writing
and faxed, mailed or delivered to each party as follows: (a) if to an Investor, at the Investor’s address or facsimile number
set forth on the signature page hereto, or at such other address as such Investor shall have furnished the Company in writing,
or (b) if to the Company, at 2360 W. Horizon Ridge Parkway, Suite 100, Henderson, Nevada 89052, Attn: Carl Ager, Vice President,
facsimile: (702) 939-5249, or at such other address or facsimile number as the Company shall have furnished to the Investors in
writing. All such notices and communications will be deemed effectively given the earlier of (a) when received, (b) when delivered
personally, (c) one Business Day after being delivered by facsimile (with receipt of appropriate confirmation), (d) one Business
Day after being deposited inside the United States with an overnight courier service of recognized standing for delivery within
the United States, (e) three Business Days after being deposited within the United States with an overnight courier service of
recognized standing for delivery outside of the United States or vice versa or (f) four Business Days after being deposited in
the U.S. mail, by certified or registered mail, return receipt requested, postage prepaid, provided that certified or registered
mail shall not be used for the delivery of notice outside of the United States. For purposes of this Agreement, “Business
Day” means any day except Saturday, Sunday, any day which is a federal legal holiday in the United States or any
day on which banking institutions in the City of New York are authorized or required by law or other governmental action to close.

 

8.13Severability.
If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or
void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Agreement,
and such court will replace such illegal, void or unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the same economic, business and other purposes of the illegal, void or unenforceable
provision. The balance of this Agreement shall be enforceable in accordance with its terms.

  

8.14Further
Assurances. Each party hereto agrees to execute and deliver, by the proper exercise of its corporate, limited liability
company, partnership or other powers, all such other and additional instruments and documents and do all such other acts and things
as may be reasonably necessary to more fully effectuate this Agreement and the other Transaction Documents.

 

    	22

    	 

    

 

8.15Counterparts.
This Agreement may be executed in one or more counterparts, each of which will be deemed an original, but all of which together
will constitute one and the same agreement. Facsimile copies of signed signature pages will be deemed binding originals.

 

8.16Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required
or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding
Business Day.

 

8.17No Strict
Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their
mutual intent, and no rules of strict construction will be applied against any party.

 

[Signature Pages Follow]

 

    	23

    	 

    

 

IN WITNESS WHEREOF,
each Investor and the Company have caused its respective signature page to this Secured Convertible Note Purchase Agreement to
be duly executed as of the date first written above.

 

 

	 	COMPANY:
	 	 
	 	SEARCHLIGHT MINERALS CORP.
	 	 
	 	 
	 	 
	 	By:	 
	 	 	Martin B. Oring
	 	 	President and Chief Executive Officer

 

[Investor signature pages follow]

 

    	 

    	 

    

 

[SIGNATURE PAGE OF INVESTORS]

 

 

 

 

	Name of Investor:	 

 

	Signature of Authorized Signatory of Investor:	 

 

	Name of Authorized Signatory:	 

 

	Title of Authorized Signatory:	 

 

 

 

 

[SIGNATURE PAGES CONTINUE]

 

    	 

    	 

    

  

SCHEDULE I

 

SCHEDULE OF INVESTORS

 

 

	(1)	(2)	(3)	(4)
	Investor	Address and Facsimile Number	Principal Amount of Secured Convertible Promissory Notes	Purchase Price
	Luxor Capital Partners, LP	
        

         
	$1,911,000	$1,911,000
	Luxor Wavefront,  LP	
         
	$621,000	$621,000
	OC 19 MASTER FUND L.P. - LCG	
        

         
	$68,000 	$68,000
	James R. Poage	
        

         
	$100,000 	$100,000
	Blashek Living Trust, dated December 21, 1992	
        

         
	$50,000 	$50,000
	Brian W. Lawrence Living Trust	
        

         
	$100,000 	$100,000 
	
        Paul D. Selver and Ellen
        J. Roller, joint tenants with the right of survivorship

         

         
	
        
	
        $50,000

         
	
        $50,000

         

	Harvey I. Wallack	
        

         
	$100,000 	$100,000

 

    	 

    	 

    

 

	Glen Tobias	
        

         
	$160,000 	$160,000
	Detlef Rostock	
        

         
	$80,000 	$80,000
	Martin Oring Financial Trust	
        

         
	$185,000 	$185,000
	Wealth Preservation Defined Benefit Plan	
        

         
	$50,000 	$50,000
	David Oring	
        

         
	$75,000 	$75,000
	Steven B. Slawson	
        
	$150,000 	$150,000
	Stanley Tomchin Trust	
        

         
	$100,000 	$100,000
	Richard Gunther	
        

         
	$200,000 	$200,000

.NEITHER THE ISSUANCE AND SALE OF THE
SECURITIES REPRESENTED BY THIS INSTRUMENT NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE OR FOR WHICH THEY ARE
EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT), OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A FORM REASONABLY ACCEPTABLE
TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT. NOTWITHSTANDING
THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT
SECURED BY THE SECURITIES.

 

SEARCHLIGHT MINERALS CORP.

 

SECURED CONVERTIBLE PROMISSORY NOTE

 

 

	 	September 18, 2013
	$_________________	Henderson, Nevada

 

FOR VALUE RECEIVED,
Searchlight Minerals Corp., a Nevada corporation (“Company”) promises to pay _____________________
(“Holder”), or its registered assigns, the principal sum of _____________ Dollars ($_____________), or such
lesser amount as shall equal the outstanding principal amount hereof, together with interest from the date of this Note on the
unpaid principal balance at a rate equal to seven percent (7%) per annum (the “Initial Interest Rate”), subject
to the provisions of this Note (including Section 5 hereof), computed on the basis of a year of 360 days consisting of twelve 30-day
months. Interest payments on this Note shall be payable semi-annually in cash, on each March 18th and September 18th, following
the date of this Note, and on such other dates and at such other times as hereinafter provided. All unpaid principal, together
with any then unpaid and accrued interest and other amounts payable hereunder, shall be due and payable on the earliest to occur
(the “Maturity Date”) of (i) September 18, 2018, (ii) when, upon or after the occurrence of an Event of Default
(as defined below), such amounts are declared due and payable by Holder or made automatically due and payable in accordance with
the terms hereof, or (iii) such other date as may otherwise be provided for in accordance with the provisions of this Note. All
payments on this Note shall be first applied to accrued and unpaid interest on this Note, and thereafter to the unpaid principal
amount hereof, and shall be made to the Holder at the address for such purpose specified below the Holder’s name in Section
8.12 of the Note Purchase Agreement, or at such other address or bank account as the Holder may from time to time direct in writing.
All references to Dollars herein are to lawful currency of the United States of America. This Note is one of the Notes issued by
the Company pursuant to Section 1 of that certain Secured Convertible Promissory Note Purchase Agreement dated September 18, 2013
(as amended, modified or supplemented, the “Note Purchase Agreement”) between Company and the Investors (as
defined in the Note Purchase Agreement). This Note may not be voluntarily prepaid by the Company.

 

    	 

    	 

    

 

THE OBLIGATIONS DUE UNDER
THIS NOTE ARE SECURED BY (i) A PLEDGE AND SECURITY AGREEMENT, DATED AS OF THE DATE HEREOF AND EXECUTED BY COMPANY IN FAVOR OF THE
COLLATERAL AGENT APPOINTED PURSUANT TO THIS AGREEMENT, AND (ii) A DEED OF TRUST, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT DATED
AS OF THE DATE HEREOF AND EXECUTED BY A SUBSIDIARY OF THE COMPANY IN FAVOR OF THE COLLATERAL AGENT APPOINTED PURSUANT TO THIS AGREEMENT,
IN EACH CASE FOR THE BENEFIT OF THE HOLDER AND THE OTHER INVESTORS PURCHASING NOTES PURSUANT TO THE NOTE PURCHASE AGREEMENT. ADDITIONAL
RIGHTS OF HOLDER ARE SET FORTH IN SUCH AGREEMENTS AND THE NOTE PURCHASE AGREEMENT.

 

The following is a statement
of the rights of Holder and the conditions to which this Note is subject, and to which Holder, by the acceptance of this Note,
agrees:

 

1.Definitions.
Capitalized terms used in this Note have the meanings given in the Note Purchase Agreement unless otherwise defined herein. In
addition, the following capitalized terms have the following meanings:

 

“Change
of Control” shall mean (a) any “person” or “group” (within the meaning of Section 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended), becomes the “beneficial owner” (as defined in Rule 13d-3 under
the Securities Exchange Act of 1934, as amended), directly or indirectly, of more than 50% of the outstanding voting securities
of the Company having the right to vote for the election of members of the Board of Directors, (b) any reorganization, merger or
consolidation of the Company, other than a transaction or series of related transactions in which the holders of the voting securities
of the Company outstanding immediately prior to such transaction or series of related transactions retain, immediately after such
transaction or series of related transactions, at least a 80% of the total voting power represented by the outstanding voting securities
of the Company or such other surviving or resulting entity or (c) a sale, lease or other disposition of all or substantially all
of the assets of the Company.

 

    	2

    	 

    

 

“Exempt
Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers, directors or consultants
(provided that issuances to consultants shall not exceed an aggregate of 500,000 shares of Common Stock and Common Stock Equivalents
in any 6 month period, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other
similar transactions of shares of Common Stock that occur after the date of the Note Purchase Agreement) of the Company pursuant
to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors
of the Company or a majority of the members of a committee of non-employee directors established, (b) shares of Common Stock upon
the exercise or exchange of the Notes issued under the Note Purchase Agreement and/or other securities exercisable or exchangeable
for or convertible into shares of Common Stock issued and outstanding on the date of the Note Purchase Agreement, provided that
such securities have not been amended since the date of the Note Purchase Agreement to increase the number of such securities or
to decrease the exercise, exchange or conversion price of such securities and (c) securities issued pursuant to acquisitions or
strategic transactions approved by a majority of the disinterested directors of the Company, provided that any such issuance shall
only be to a Person which is, itself or through its subsidiaries, an operating company in a business similar to and/or compatible
with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not
include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose
primary business is investing in securities.

 

 

“Holder”
shall mean the Person specified in the introductory paragraph of this Note or any Person who shall at the time be the registered
holder of this Note. A reference to a Lien of Holder or a security agreement executed in favor of Holder shall be deemed to include
a Lien granted to a collateral agent on behalf of Holder and a security agreement executed in favor of a collateral agent on behalf
of Holder, respectively.

 

2.Rights of
Redemption. Notwithstanding anything the contrary in this Note, the Holder shall have the following rights of redemption:

 

(a)Change of
Control. In the event of a Change of Control of the Company, Holder shall be entitled to demand, upon written notice (the “Change
of Control Notice”) to the Company, that the Company redeem this Note for an amount equal to: (i) 120% of the then outstanding
principal amount of the Note, plus (ii) all outstanding accrued and unpaid interest through and including the date of payment.

 

(b)Put Option.
The Company hereby grants to Holder the irrevocable right, but not the obligation, to require the Company, on the second anniversary
of the date hereof and on the last day of each consecutive six month period thereafter (each such date, a “Put Exercise
Date”), to redeem all (but not less than all) of this Note from the Holder for an amount equal to: (A) 100% of the then
outstanding principal amount of the Note, plus (B) all outstanding accrued and unpaid interest through and including the date of
payment (the “Put Option”). Holder may exercise the Put Option, by providing written notice to the Company (the
“Put Exercise Notice”) on any Business Day, whereupon, the Company shall be obligated to so redeem this Note
on the next succeeding Put Exercise Date that is not less than thirty (30) days following the date of the Put Exercise Notice.
A Put Exercise Notice, once delivered, may be revoked by Holder on any day prior to the Put Exercise Date.

 

    	3

    	 

    

 

(c)Completion of
the redemption of this Note shall take place, in the case of a redemption pursuant to Section 2(a), no later than ten (10) days
following the delivery by Holder of the Change of Control Notice and, in the case of a redemption pursuant to Section 2(b), on
the applicable Put Exercise Date (the “Redemption Closing”). At the Redemption Closing, the applicable redemption
price shall be paid by the Company in immediately available funds by wire transfer to the Holder, as directed in the Change of
Control Notice or Put Exercise Notice, as applicable. Failure to pay the redemption price pursuant to this Section 2 shall be deemed
an Event of Default under this Note.

 

3.Conversion
of Note.

 

(a)Terms of
Conversion. Holder has the right, exercisable at Holder’s option, at any time hereafter and until such date as this Note
has been paid in full by the Company, to convert, subject to the terms and provisions of this Section 3, the unpaid principal amount
of this Note, or any part thereof, but not any accrued but unpaid interest (such amount being the “Converted Amount”),
into such number of fully paid and non-assessable shares of common stock, $0.001 par value per
share, of the Company (the “Common Stock”) as is determined by dividing the Converted
Amount by the Conversion Price. All accrued and unpaid interest on the principal amount hereof that is so converted shall
be due and payable in cash on the next Business Day following the day on which this Note is surrendered pursuant to Section 3(d)
hereof.

 

(b)Conversion
Price; Adjustments to Conversion Price.

 

(i)The
initial conversion price (“Initial Conversion Price”) is $0.40. “Conversion Price” means
the Initial Conversion Price, subject to adjustment as hereinafter provided.

 

(ii)If,
after the date of this Note, the outstanding shares of Common Stock are subdivided (split), or combined (reverse split), by reclassification
or otherwise, or if any dividend or other distribution payable on the Common Stock in shares of Common Stock occurs, the Conversion
Price in effect immediately before such subdivision, combination, dividend or other distribution will, concurrently with the effectiveness
of such subdivision, combination, dividend or other distribution, be proportionately adjusted.

 

(iii)If
a reclassification, reorganization or exchange of the Company’s securities, or a consolidation or merger of the Company,
occurs (other than a Sale of the Company, in which event Section 3(f) applies), or if the Company at any time or from time to time
after the date of this Note makes or declares a dividend or other distribution payable in cash, securities or property, then and
in each such case, Holder shall receive, upon conversion of the remaining principal balance of this Note, in addition to the amount
of securities receivable thereupon, the amount of cash, securities or other property which Holder would have received had this
Note been converted on the date of such occurrence and had Holder thereafter, during the period from the date of such occurrence
to and including the conversion date, retained such cash, securities or other property receivable during such period.

 

    	4

    	 

    

 

(iv)Upon
the occurrence of each adjustment or readjustment of the Conversion Price, the Company at its expense shall promptly compute such
adjustment or readjustment in accordance with the terms hereof and furnish to Holder a certificate setting forth such adjustment
or readjustment and showing in detail the facts upon which such adjustment or readjustment is based.

 

(c)Subsequent
Equity Sales. If the Company or any Subsidiary thereof, as applicable, at any time while this Note is outstanding, shall offer,
sell, grant any option to purchase or offer, sell or grant any right to reprice its securities, or otherwise dispose of or issue
any shares of Common Stock or Common Stock Equivalents (other than an Exempt Issuance) entitling any Person to acquire shares of
Common Stock, at an effective price per share less than the then Conversion Price (such issuances collectively, a “Dilutive
Issuance”), as adjusted hereunder (if the holder of the shares of Common Stock or Common Stock Equivalents so issued
shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange
prices or otherwise, or due to warrants, options or rights per share which is issued in connection with such issuance, be entitled
to receive shares of Common Stock at an effective price per share which is less than the Conversion Price, such issuance shall
be deemed to have occurred for less than the Conversion Price on such date of the Dilutive Issuance), then the Conversion Price
shall be reduced by multiplying the Conversion Price by a fraction, the numerator of which is the number of shares of Common Stock
issued and outstanding immediately prior to the Dilutive Issuance plus the number of shares of Common Stock which the offering
price for such Dilutive Issuance would purchase at the then Conversion Price, and the denominator of which shall be the sum of
the number of shares of Common Stock issued and outstanding immediately prior to the Dilutive Issuance plus the number of shares
of Common Stock so issued or issuable in connection with the Dilutive Issuance and the amount of the Notes issuable hereunder shall
be increased such that the aggregate Conversion Price payable hereunder, after taking into account the decrease in the Conversion
Price, shall be equal to the aggregate Conversion Price prior to such adjustment. Such adjustment shall be made whenever such shares
of Common Stock or Common Stock Equivalents are issued. The Company shall notify the Holder in writing, no later than the Business
Day following the issuance of any shares of Common Stock or Common Stock Equivalents subject to this section, indicating therein
the applicable issuance price, or of applicable reset price, exchange price, conversion price and other pricing terms.

 

(d)Exercise
of Conversion Privilege: Surrender of Note. In order to exercise the conversion privilege, Holder shall surrender this Note
in whole or in part to the Company together with the conversion notice, which shall be irrevocable, in the form attached hereto
as Exhibit A at the Company’s principal office or such other agency maintained by the Company for such purpose during
normal business hours. This Note shall be converted in accordance with Subsection 3(a) above only when the conversion notice is
delivered and this Note is surrendered, accompanied by proper assignments thereof to the Company or in blank for transfer. The
Common Stock of the Company issuable on conversion shall be issued in Holder’s name. As promptly as practicable after proper
surrender of this Note by Holder, the Company shall issue and shall deliver at such office or agency to Holder, a certificate or
certificates for the number of full shares of Common Stock of the Company issuable upon the conversion of this Note in accordance
with the provisions of this Section 3. Such conversion shall be deemed to have been effected immediately prior to the close of
business on the date this Note is surrendered as aforesaid, all rights of Holder as a holder of this Note, other than the right
to receive accrued and unpaid interest hereon and other than the rights in the last sentence of this Section 3(d), shall cease
at such time, and Holder will be treated for all purposes as having become the holder of record of the shares represented thereby.
If the last day for exercise of the conversion right is not a Business Day, then such conversion right may be exercised on the
next succeeding Business Day. If less than all of the outstanding principal balance of this Note is converted into Common Stock
in accordance with this Section 3, the Company shall, upon surrender of this Note, issue Holder a new note evidencing the outstanding
principal balance of this Note not so converted.

 

    	5

    	 

    

 

(e)Fractional
Shares. If any portion of principal amount would convert into only a fractional share in connection, then the Company shall
pay to Holder the principal amount representing such fractional share, in accordance with the terms of this Note, and no fractional
shares of Common Stock shall be issued upon conversion of this Note.

 

(f)Adjustment
for Certain Events. In case of (i) any consolidation or merger to which the Company is a party or statutory exchange of securities
with another corporation (unless the shareholders of the Company immediately prior to such consolidation, merger or exchange have
beneficial ownership immediately following such consolidation, merger or exchange of securities of the surviving entity representing
80% or more of the combined voting power of the surviving entity’s then outstanding securities ordinarily having the right
to vote at elections of directors in approximately the same voting proportions as such shareholders had in the Company immediately
prior to such consolidation, merger or exchange); or (ii) any sale or conveyance to another entity of all or substantially all
of the assets of the Company (in one transaction or a series of related transactions) (each of (i) and (ii) a “Sale of
the Company”), the entire principal amount of this Note, to the extent not previously converted pursuant to Section 3(a)
hereof, shall be due and payable together with accrued and unpaid interest on the effective date of such Sale of the Company. The
Company shall give Holder written notice of an impending Sale of the Company not later than 15 days before the stockholders’
meeting of the Company called to approve such transaction, or 15 days before the scheduled closing of such transaction, whichever
is earlier, and shall also notify Holder in writing of the final approval of such transaction. The first of such notices shall
give the proposed effective date of the transaction and shall describe the material terms and conditions of the proposed Sale of
the Company, and the Company shall thereafter give Holder prompt notice of any material changes to such terms and conditions.

 

(g)Reservation
of Common Stock. The Company covenants that it will at all times reserve and keep available out of its authorized but unissued
Common Stock, solely for the purpose of delivering upon conversion of this Note as herein provided, such number of shares of Common
Stock as shall then be deliverable upon the conversion of this Note.

 

(h)Rights of
Holder. Until this Note is converted in accordance with this Section 3, nothing contained in this Note confers upon Holder
the right of a holder of Common Stock to vote on or consent to any action to be taken by the Company.

 

    	6

    	 

    

 

(i)Limitations.
Holder recognizes that the Company may be limited in the number of shares of Common Stock it may issue by the applicable rules
and regulations of the principal securities market on which the Common Stock is listed or traded (collectively, the "Cap
Regulations"). Without limiting the other provisions hereof, (i) the Company will take all steps reasonably necessary
to be in a position to issue shares of Common Stock on conversion of this Note without violating the Cap Regulations and (ii) if,
despite taking such steps, the Company still can not issue such shares of Common Stock without violating the Cap Regulations, the
principal being converted by Holder pursuant hereto shall be reduced to comply with Cap Regulations. The Holder, by its acceptance
of this Note, further agrees that if the Holder transfers or assigns any of this Note to a party who or which would not be considered
such an affiliate, such assignment shall be made subject to the transferee’s or assignee’s specific agreement to be
bound by the provisions of this Section 3 as if such transferee or assignee were the original Holder hereof.

 

4.Events of
Default. The occurrence of any of the following shall constitute an “Event of Default” under this Note:

 

(a)Failure to
Pay or Convert. The Company shall (i) fail to pay (A) when due any portion of the principal hereof when due or interest thereon
on the due date hereunder and, in the case of interest, such payment shall not have been made within three (3) Business Days of
such failure to pay when due, or (B) any other payment required under the terms of this Note on the date due and such payment shall
not have been made within five (5) Business Days of such failure to pay when due, or (ii) fail to convert this Note as provided
herein or otherwise comply with its obligations relating to such conversion;

 

(b)Misrepresentation;
Breaches of Covenants. (i) Any representation or warranty made by the Company or Clarkdale in any Transaction Document or any
certificate, statement or other writing delivered to the Holder or its advisors in connection therewith shall be incorrect in any
material respect when made or deemed made, or (ii) the Company or Clarkdale shall fail to observe or perform any covenant,
obligation, condition or agreement contained in any Transaction Document (other than those specified in Section 4(a) above) and
such failure shall continue for thirty (30) days;

 

(c)Voluntary
Bankruptcy or Insolvency Proceedings.  The Company or Clarkdale shall (i) apply for or consent to the appointment of
a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its property, (ii) be unable, or admit
in writing its inability, to pay its debts generally as they mature, (iii) make a general assignment for the benefit of its or
any of its creditors, (iv) be dissolved or liquidated, (v) become insolvent (as such term may be defined or interpreted under any
applicable statute), (vi) commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any
such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding
commenced against it, or (vii) take any action for the purpose of effecting any of the foregoing;

 

    	7

    	 

    

 

(d) Involuntary
Bankruptcy or Insolvency Proceedings. Proceedings for the appointment of a receiver, trustee, liquidator or custodian of the
Company or Clarkdale or of all or a substantial part of the property thereof, or an involuntary case or other proceedings seeking
liquidation, reorganization or other relief with respect to the Company or Clarkdale or the debts thereof under any bankruptcy,
insolvency or other similar law now or hereafter in effect shall be commenced and an order for relief entered or such proceeding
shall not be dismissed or discharged within 30 days of commencement;

 

(e)Other Notes.
An Event of Default shall have occurred under the terms of any of the other Notes issued in connection with the Note Purchase Agreement;
or

 

(f)Transaction
Documents; Security Interest. Any of the Transaction Documents shall be or become unenforceable against the Company or Clarkdale
in any respect or any such Person shall so assert in writing, or any security interest or lien provided for in any of the Transaction
Documents shall be or become invalid or unperfected or lose the priority required by the terms of the Transaction Documents.

 

5.Rights of
Holder upon Default. Upon the occurrence and during the continuance of any Event of Default (and giving effect to any applicable
cure periods) and at any time thereafter during the continuance of such Event of Default, Holder may declare all amounts payable
hereunder and under the other Transaction Documents to be and become immediately due and payable, whereupon such amounts shall
be immediately due and payable in full. In addition, Holder shall be entitled to exercise all of its other rights and remedies
provided for under the Transaction Documents (whether directly or through the Collateral Agent) and under applicable law. Further,
following and during the continuance of an Event of Default, this Note shall bear interest at a rate per annum equal to the rate
otherwise appicable thereto, plus an additional two percent (2%) per annum.

 

6.Defeasance
of Note. In the event of a Defeasance of this Note, in accordance with the provisions of the Security Agreement, interest
at the Initial Interest Rate shall no longer accrue, and this Note shall thereafter bear interest at a rate of four percent (4%)
per annum, subject to the imposition of the default rate of interest provided for under Section 5 hereof.

 

7.Successors
and Assigns. Subject to the provisions of this Section 7 and the Note Purchase Agreement regarding the transferability
hereof, the rights and obligations of Company and Holder of this Note shall be binding upon and benefit the successors, assigns,
heirs, administrators and transferees of the parties. Transfers of this Note made in accordance with the Note Purchase Agreement
shall be registered upon registration books maintained for such purpose by or on behalf of the Company as provided in the Note
Purchase Agreement. Prior to presentation of this Note for registration of transfer, the Company shall treat the registered holder
hereof as the owner and holder of this Note for the purpose of receiving all payments of principal and interest hereon and for
all other purposes whatsoever, whether or not this Note shall be overdue and the Company shall not be affected by notice to the
contrary. Any transfer of this Note may be effected only pursuant to the foregoing and the Note Purchase Agreement and by surrender
of this Note to the Company and reissuance of a new note to the transferee.

 

    	8

    	 

    

 

8.Waiver and
Amendment. Any provision of this Note may be amended, waived or modified upon the written consent of Company and the Holder
of this Note.

 

9.Notices.
All notices, requests, demands, consents, instructions or other communications required or permitted hereunder shall be in writing
and faxed, mailed or delivered to each party at the respective addresses of the parties as set forth in or determined pursuant
to the Note Purchase Agreement. All such notices and communications will be deemed effectively given as provided in the
Note Purchase Agreement. Any party hereto may by notice so given change its address for future notice hereunder. Notice shall conclusively
be deemed to have been given when received.

 

10.Payment.
Payment shall be made in lawful tender of the United States.

 

11.Expenses;
Waivers. If action is instituted to collect this Note, Company promises to pay all costs and expenses, including, without
limitation, attorneys’ fees and costs, incurred in connection with such action. Company hereby waives notice of default,
presentment or demand for payment, protest or notice of nonpayment or dishonor and all other notices or demands relative to this
instrument.

 

12.Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed
by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of
conflicts of law thereof. The Company agrees that all legal proceedings concerning the interpretations, enforcement and defense
of the transactions contemplated by this Note (whether brought against a party hereto or its respective affiliates, directors,
officers, shareholders, employees or agents) may be brought against it in the state and federal courts sitting in the City of New
York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City
of New York for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein (including with respect to the enforcement of this Note), and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper and agrees that service of process in any such proceeding may be made by mail addressed
to it in accordance with Sections 8.12(b) (personal delivery) or (f) (certified or registered mail) of the Note Purchase Agreement.
Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury
in any legal proceeding arising out of or relating to this Note or the transactions contemplated hereby. If either party shall
commence an action or proceeding to enforce any provisions of this Note, then the prevailing party in such action or proceeding
shall be reimbursed by the other party for its attorneys fees and other costs and expenses incurred with the investigation, preparation
and prosecution of such action or proceeding.

 

    	9

    	 

    

 

13.Usury.
In the event any interest is paid on this Note which is deemed to be in excess of the then legal maximum rate, then that portion
of the interest payment representing an amount in excess of the then legal maximum rate shall be deemed a payment of principal
and applied against the principal of this Note.

 

14.Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required
or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding
Business Day (with, in the case of payments due hereunder, the accrual of additional interest for such period).

 

[signature page follows]

 

    	10

    	 

    

 

IN WITNESS WHEREOF,
Company has caused this Note to be issued as of the date first written above.

 

 

	 	SEARCHLIGHT MINERALS CORP.
	 	 	 
	 	 	 
	 	 	 
	 	By:	
	 	Name:	Carl Ager
	 	Title:	Vice President and Secretary

  

    	 

    	 

    

 

EXHIBIT A

 

NOTICE OF CONVERSION

 

(To be Executed by the Registered Holder
in order to Convert the Note)

 

The undersigned hereby irrevocably elects
to convert $ ________________ of the principal amount of the above Note No. ___ into Shares of Common Stock of Searchlight Minerals
Corp., a Nevada corporation (the "Company") according to the conditions hereof, as of the date written
below.

 

Conversion Date*

 

___________________________________________________________________

 

 

 

Applicable Conversion Price

 

___________________________________________________________

 

 

 

Signature

 

________________________________________________________________________

[Name]

 

Address:

 

________________________________________________________________________

 

________________________________________________________________________

 

 

 

 

 

* This original Note must be received by
the Company or its transfer agent by the third Business Day following the Conversion Date.

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