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Form 8-K MINERALRITE Corp For: Jan 22

January 22, 2015 12:21 PM EST

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________


FORM 8-K


________________________

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):���January 15, 2015

MineralRite Corporation

(Exact name of Registrant as Specified in its Charter)

���Nevada

000-27739

90-0315909

��(State or Other Jurisdiction of Incorporation

or Organization)�

(Commission file number)

(I.R.S. Employer Identification Number)

55 South Geneva Road

��Lindon, Utah �84042

�(Address of Principal Executive Offices including Zip Code)

(801) 796-8944

�(Registrant�s Telephone Number, including Area Code)

________________________________________________

Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

















Item 1.01 �Entry or Termination of a Material Definitive Agreement

On or about January 10, 2015 MineralRite Corporation, a Nevada corporation (the �Company�) �entered into a convertible note purchase agreement (the �Loan Agreement�) with River North Equity, Inc., an Illinois corporation (�River North�) in the principal amount of $77,778 at an original issue discount of 10% maturing one year from the date of issuance. �The promissory note issued under the Loan Agreement (the �Note�) bears interest at a rate of 6% per annum and the principal and interest due thereunder are convertible into shares of the Company�s common stock at a 50% discount to market, as further defined in the Note, at any time beginning 180 days from the date of issuance until maturity. �The Note may not be prepaid without penalty and the Loan Agreement provides for certain registration rights and rights of first refusal in the event that the Company seeks further investment from other parties. The Note is secured by a pledge of preferred shares held by our CEO, Guy Peckham.


In addition to the Loan Agreement the Company entered into a Securities Purchase Agreement (the �Investment Agreement�) with River North. Pursuant to the Investment Agreement, and subject to certain restrictions and conditions, the Company may issue and sell to the River North, and River North shall purchase from the Company, up to that number of shares of the Company�s common stock having an aggregate purchase price of ten million dollars ($10,000,000), over a period of 24 months from the first trading day following the effectiveness of the registration statement registering the resale of shares purchased by River North pursuant to the Investment Agreement, but not more than 30 months from the date of the Investment Agreement.

The Company may in its discretion draw on the facility from time to time, as and when the Company determines appropriate in accordance with the terms and conditions of the Investment Agreement. The maximum investment amount that the Company is entitled to draw down from River North in any one draw down notice is the �purchase price multiplied by the lesser of either: (i) 4.99% of the outstanding shares of common stock as of the closing trading day immediately preceeding the applicable commencement date and (ii) the average daily trading volume of the common stock during the draw down pricing period multiplied by three. However, the maximum investment amount shall not exceed $500,000.


The purchase price shall be set at seventy percent (70%) (60% in the case of a DTC Chill) of the lower of (i) the average closing bid price during the ten trading days preceeding the draw down notice delivery date or (ii) the Closing Price on the date the draw down notice is delivered to River North, in each case subject to adjustment for reverse splits etc.

There are put restrictions applied on days between the draw down notice date and the closing date with respect to that particular put. During such time, the Company shall not be entitled to deliver another draw down notice. In addition, River North will not be obligated to purchase shares of the Company�s common stock if: (i) there is no effective registration statement to cover the resale of the shares of common stock; (ii) the common stock is suspended from trading or the Company is notified of any pending or threatened proceeding or other action to suspend the trading of the common stock; (iii) the Company has not complied with its obligations and is otherwise not in breach of or in default under the Investment Agreement or any other related agreement; (iv) certain other conditions described in the Investment Agreement are not met.

The Investment Agreement also contains customary representations and warranties of each of the parties. The assertions embodied in those representations and warranties were made for purposes of the Investment Agreement and are subject to qualifications and limitations agreed to by the parties in connection with negotiating the terms of the Investment Agreement. The Investment Agreement further provides that the Company and the Investor are each entitled to customary indemnification from the other for, among other things, any losses or liabilities they may suffer as a result of any breach by the other party of any provisions of the Investment Agreement or Registration Rights Agreement (as defined below). Investors should read the Investment Agreement together with the other information concerning the Company that the Company publicly files in reports and statements with the Securities and Exchange Commission (the �SEC�).

Pursuant to the terms of a Registration Rights Agreement dated January 10, 2015 between the Company and the Investor (the �Registration Rights Agreement�), the Company is obligated to file one or more registrations statements with the SEC to register the resale by River North of the shares of Common Stock issued or issuable under the Investment Agreement. In addition, the Company is obligated to use all commercially reasonable efforts to have the registration statement remain effective by the SEC as provided for in the Investment Agreement.

The foregoing description of each of the Convertible Note Purchase Agreement, the Convertible Promissory Note, the Pledge and Security Agreement, the Investment Agreement and the Registration Rights Agreement is qualified in its entirety by reference to the full text of the forgoing, respectively, which are filed as Exhibits 10.1, 10.2, 10.3, 10.4 and 10.5 to this Report on Form 8-K and incorporated herein by reference.



��Item 9.01 Financial Statements and Exhibits



(d) Exhibits

Exhibit�No.

Description

10.1

Convertible Note Purchase Agreement by and between MineralRite Corporation and River North equity, Inc. dated as of January 10, 2015

10.2

Convertible Promissory Note by and between MineralRite Corporation and River North equity, Inc. dated as of January 10, 2015

10.3

Pledge and Security Agreement by and between Guy Peckham and River North Equity, Inc. dated January 10, 2015

10.4

Securities Purchase Agreement by and between MineralRite Corporation and River North equity, Inc. dated as of January 10, 2015

10.5

Registration Rights Agreement �by and between MineralRite Corporation and River North equity, Inc. dated as of January 10, 2015






SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated:� January 22, 2015

MINERALRITE CORPORATION

By: ���/s/ Guy Peckham���������������������������������������������

Name:�� Guy Peckham

Title:���� Chief Executive Officer



Page 1 of 23

CONVERTIBLE NOTE PURCHASE AGREEMENT

ThisCONVERTIBLENOTEPURCHASEAGREEMENT(theAgreement),datedJanuary

__,2015,byandbetweenMineralRiteCorporation,aNevadacorporation,withheadquarters

located �at �55 �South �Geneva �Road, �Lindon, �Utah �84042 �(the �"Company"), �and �River �North

Equity,Inc.,anIllinoiscorporation,withitsprincipalplaceofbusinessat360W.HubbardSt.,

Unit2801,Chicago,Illinois60654(the"Buyer"),(togetherthe"Parties"). ��Capitalizedterms

usedinthisAgreementandnototherwisedefinedshallhavethemeaningsascribedtothemin

Article 1.

WHEREAS:

A. ��The Parties are executing and delivering this Agreement in reliance upon the exemption from

securitiesregistrationaffordedbytherulesandregulationsaspromulgatedbytheUnited

StatesSecuritiesandExchangeCommission(theSEC)undertheSecuritiesActof1933,

as amended (the 1933 Act) as described in this Agreement.

B. ��Buyer �desires �to �purchase �and �Company �desires �to �issue �and �sell, �upon �the �terms �and

conditions set forth in this Agreement a six percent (6%) convertible note of Company, in the

formattachedheretoasExhibitA,intheaggregateprincipalamountof$77,778(together

withanynote(s)issuedinreplacementthereoforasadividendthereonorotherwisewith

respect �thereto �in �accordancewith �theterms �thereof,the �Note), �with �an �originalissue

discountoftenpercent(10%),convertible intosharesofcommonstockofCompany,$0.001

������par value per share (the Common Stock) uponthe termsand subject tothe limitations and

conditions set forth in such Note.

C. ��Thetermsandconditionscontainedherein,Buyerwishestopurchase,uponthetermsand

conditions �stated �in �this �Agreement, �such �principal �amount �of ��the �Note �as �is �set �forth

immediately below its name on the signature pages hereto.

NOW THEREFORE, Company and Buyer severally (and not jointly) hereby agree as follows:

1. ��Purchase and Sale of Note.

a.

PurchaseofNote. ��OntheClosingDate(asdefinedbelow),Companyshallissueand

sell to Buyer and Buyer agrees to purchase from Company such principal amount ofthe

Note as is set forth immediately below Buyers name on the signature pages hereto.

b. �����FormofPayment/Closing. ��OntheClosingDate,(i) Buyershallpay thepurchaseprice

fortheNotetobeissuedandsoldtoitattheClosing(thePurchasePrice)bywire

transferofimmediatelyavailablefundstoCompany,inaccordancewithCompanys

writtenwiring instructions,againstdelivery oftheNote,and(ii)Company shalldeliver

suchdulyexecutedNoteonbehalfofCompany,toBuyer,againstdeliveryofsuch

Purchase Price. �Such event, the Closing.

Company ___________

Buyer ___________



Page 2 of 23

ClosingDate. ��Subjecttothesatisfaction(orwrittenwaiver)oftheconditionsset

forthinSection6andSection7below,thedateandtimeoftheissuanceandsaleofthe

NotepursuanttotheAgreement(theClosingDate)shallbeonoraboutJanuary__,

2015, �or �such �other �mutually �agreed �upon �time. ���The �Closing �to �occur �at �any �such

location as may be agreed to by the Parties.

2. ��Representations and Warranties of Buyer. �Buyer represents and warrants to Company that:

a.

Investment Purpose. �As of the date hereof, Buyer is purchasing the Note and the shares

ofCommonStockissuableuponfullconversionof,orotherwisepursuantto,theNote

(including,withoutlimitation,suchadditionalsharesofCommonStock,ifany,asare

issuable �(i) �on �account �of �interest �on �the �Note, �and �(ii) �as �a �result �of �the �events

describedinSections1.3and1.4oftheNote)pursuanttothisAgreement,suchshares

ofCommonStockbeingcollectivelyreferredtohereinastheConversionShares

and, ��collectively ��with ��the ��Note, ��the ��Securities ��and ��any ��of ��the ��Securities, ��a

"Security")foritsownaccountandnotwithapresentviewtowardsthepublicsaleor

distributionthereof,exceptpursuanttosalesregisteredorexemptedfromregistration

under �the �1933 �Act, �provided, �however, �that �bymakingthe �representations �herein,

BuyerdoesnotagreetoholdanySecuritiesforaminimumorotherspecifictermand

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 1933 Act.

b. �����AccreditedInvestorStatus. ��BuyerisanAccreditedInvestorasthattermisdefined

in Rule 501(a) of Regulation D.

c.

RelianceonExemptions. ��BuyerunderstandsthattheSecuritiesarebeingofferedand

soldtoitinrelianceuponspecificexemptionsfromtheregistrationrequirementsof

UnitedStatesfederalandstatesecuritieslawsandthatCompanyisrelyinguponthe

truthandaccuracyof,andBuyerscompliancewith,therepresentations,warranties,

agreements, acknowledgements and understandings of Buyer set forth herein in order to

determine the availability of such exemptions and the eligibility ofBuyerto acquire the

Securities.

d. �����Information. ���Buyeranditsadvisors,ifany,havebeen,andforsolongastheNote

remains �outstanding �will �continue �to �be �furnished �with �all �publiclymade �materials

relatingtothebusiness,financesandoperationsofCompanyandmaterialsrelatingto

theofferandsaleoftheSecuritieswhichhave beenrequestedby Buyeroritsadvisors.

Buyer ��and ��its ��advisors, ��if ��any, ��have ��been, ��and ��for ��so ��long ��as ��the ��Note ��remains

outstandingwillcontinuetobe,affordedtheopportunity toaskquestionsofCompany.

Notwithstanding �the �foregoing, �Company �has �not �disclosed �to �Buyer �any �material

nonpublic information and will not disclose such information unless such information is

disclosed to the public prior to or promptly following such disclosure to Buyer. �Neither

suchinquiriesnoranyotherduediligenceinvestigationconductedbyBuyeroranyof

itsadvisorsorrepresentativesshallmodify,amendoraffectBuyersrighttorelyon

Companys ��representations ��and ��warranties ��contained ��in ��Section ��3 ��below. ����Buyer

understandsthatitsinvestmentintheSecuritiesinvolvesasignificantdegreeofrisk.

Company ___________

Buyer ___________



Page 3 of 23

BuyerisnotawareofanyfactsthatmayconstituteabreachofanyofCompany's

representations and warranties made herein.

e.

Governmental Review. ��Buyer 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.

f.

TransferorRe-sale. ��Buyerunderstandsthatthesaleorre-saleoftheSecuritieshasnot

beenandisnotbeingregisteredunderthe1933Actoranyapplicablestatesecurities

laws, �and �the �Securities �may �not �be �transferred �unless: �(a) �the �Securities �are �sold

pursuanttoaneffectiveregistrationstatementunderthe1933Act;(b) Buyershallhave

deliveredtoCompany,atthecostofBuyer,anopinionofcounseltotheeffectthatthe

Securitiestobesoldortransferredmay be soldortransferredpursuanttoanexemption

fromsuchregistration;(c)theSecuritiesaresoldortransferredtoan"affiliate"(as

defined �in �Rule �144 �promulgated �under �the �1933 �Act �(or �a �successor �rule) �(Rule

144)) ��of ��Buyer ��who ��agrees ��to ��sell ��or ��otherwise ��transfer ��the ��Securities ��only ��in

accordancewiththisSection2(f)andwhoisanAccreditedInvestor;(d)theSecurities

are sold pursuant to Rule 144; (e) the Securities are sold pursuant to Regulation S under

the 1933 Act (or a successor rule) (Regulation S); (f) the Securities are sold pursuant

toanyotheravailableexemptionfromtheregistrationrequirementsunderthe1933

Act; ��(g) ��a ��restrictive ��legend ��is ��not ��required ��under ��applicable ��requirements ��of ��the

Securities �Act �(including �judicial �interpretations �and �pronouncements �issued �bythe

staffoftheCommission)andBuyershallhavedeliveredtoCompany,atthecostof

Buyer,anopinionofcounselthatshallbeinform,substanceandscopecustomaryfor

opinions ��of ��counsel ��in ��corporate ��transactions. ����Notwithstanding ��the ��foregoing ��or

anything ��else ��contained ��herein ��to ��the ��contrary, ��the ��Securities ��may �be ��pledged ��as

collateralinconnectionwithabonafidemarginaccountorotherlendingarrangement

in compliance with applicable securities rules and regulations.

g.

Legends. ���Buyer �understands �that �the �Note, �and �until �such �time �asthe �Conversion

Shareshavebecomeeligiblefor transferpursuanttoany ofthealternativesspecifiedin

Section 2(f) above, the Conversion Shares may bear a restrictive legend insubstantially

the following form:

NEITHER ����THE ����ISSUANCE ����AND ����SALE ����OF ����THE ����SECURITIES

REPRESENTED ��BY ��THIS ��CERTIFICATE ��NOR ��THE ��SECURITIES ��INTO

WHICH ����THESE ����SECURITIES ����ARE ����EXERCISABLE ����HAVE ����BEEN

REGISTEREDUNDERTHESECURITIESACTOF1933,ASAMENDED,OR

APPLICABLESTATESECURITIESLAWS. ���THESECURITIESMAYNOT

BEOFFEREDFORSALE,SOLD,TRANSFERREDORASSIGNED(I) INTHE

ABSENCEOF(A)ANEFFECTIVEREGISTRATIONSTATEMENTFORTHE

SECURITIESUNDERTHESECURITIESACTOF1933,ASAMENDED,OR

(B)ANOPINIONOFCOUNSEL(WHICHCOUNSELSHALLBESELECTED

BY ��THE ��HOLDER), ��IN ��A ��GENERALLY ��ACCEPTABLE ��FORM, ��THAT

REGISTRATIONIS �NOT �REQUIREDUNDERSAIDACT �OR �(II)UNLESS

SOLD ��PURSUANT ��TO ��RULE ��144 ��OR ��RULE ��144A ��UNDER ��SAID ��ACT.

Company ___________

Buyer ___________



Page 4 of 23

NOTWITHSTANDING ��THE ��FOREGOING, ��THE ��SECURITIES ��MAY ��BE

PLEDGEDINCONNECTIONWITHABONAFIDEMARGINACCOUNTOR

OTHER ��LOAN ��OR ��FINANCING ��ARRANGEMENT ��SECURED ��BY ��THE

SECURITIES.

The legendsetforthaboveshallberemovedfroma Security whichsatisfiedany ofthe

alternatives specified in Section 2(f) aboveand Company shall cause its Transfer Agent

toissueacertificate(s)withoutsuchlegenduponrequestbyitsholder.Intheabsence

ofaregistrationstatementcoveringtheSecurity,suchholdershallprovideanopinion

ofcounsel,totheeffectthatapublicsaleortransferofsuchSecuritymaybemade

without registration under the 1933 Act. ��In the event that Company does not accept the

opinionofcounselprovidedbyBuyerbytheDeadline,itwillbeconsideredanEvent

of Default pursuant to Section 3.3 of the Note.

h. �����Authorization;Enforcement. ���ThisAgreementhasbeendulyandvalidlyauthorized.

ThisAgreementhasbeendulyexecutedanddeliveredonbehalfofBuyer,andthis

Agreement ��constitutes ��a ��valid ��and ��binding ��agreement ��of ��Buyer ��enforceable ��in

accordance with its terms.

i.

Residency. ��Buyerisaresidentofthejurisdictionsetforthimmediately belowBuyers

name on the signature pages hereto.

3. ��RepresentationsandWarrantiesofCompany. ���CompanyrepresentsandwarrantstoBuyer

that:

a.

Organization �and �Qualification. ���Companyand �each �of �its �Subsidiaries �(as �defined

below), if any, is, or shall be, a corporation duly organized, validly existing and in good

standingunderthelawsofthejurisdictioninwhichitisincorporated,withfullpower

andauthority(corporateandother)toown,lease,useandoperateitspropertiesandto

carryonitsbusinessasandwherenowowned,leased,used,operatedandconducted.

Schedule3(a)setsforthalistofallof theSubsidiariesofCompany andthe jurisdiction

in which each is incorporated. �Company and each of it Subsidiaries is duly qualified as

aforeigncorporationtodobusinessandisingoodstandingineveryjurisdictionin

whichitsownershiporuseofpropertyorthenatureofthebusinessconductedbyit

makessuchqualificationnecessaryexceptwherethefailuretobesoqualifiedorin

goodstandingwouldnothaveaMaterialAdverseEffect. ��MaterialAdverseEffect

means ��any ��material ��adverse ��effect ��on ��the ��business, ��operations, ��assets, ��financial

conditionorprospectsofCompanyoritsSubsidiaries,ifany,takenasawhole,oron

thetransactionscontemplatedhereby orby theagreementsorinstrumentstobe entered

intoinconnectionherewith. ���"Subsidiary"orSubsidiaries(asthe �casemaybe)

meansanycorporationorotherorganization,whetherincorporatedorunincorporated,

inwhichCompanyowns,directlyorindirectly,anequitymajorityorothercontrolling

ownership interest.

b. �����Authorization; ��Enforcement. ����(i) ��Company ��has ��all ��requisite ��corporate ��power ��and

authoritytoenterintoandperformthisAgreement,theNoteandtoconsummatethe

Company ___________

Buyer ___________



Page 5 of 23

transactions contemplated hereby andthereby andto issue theSecurities, in accordance

with the terms hereof and thereof, (ii) the execution and delivery of this Agreement, the

Noteby Company andtheconsummationby itofthetransactionscontemplatedhereby

and thereby (including without limitation, the issuance of the Note and the issuance and

reservationforissuanceoftheConversionSharesissuableuponconversionorexercise

thereof)havebeendulyauthorizedbyCompanysBoardofDirectorsandnofurther

consent �or �authorizationofCompany,itsBoard �ofDirectors,or �itsshareholders �is

required,(iii)thisAgreementhasbeenduly executedanddeliveredby Company by its

authorizedrepresentative,andsuchauthorizedrepresentativeisthetrueandofficial

representative �with �the ��authority �to �sign �this �Agreement �and �the �other �documents

executed ��in ��connection ��herewith ��and ��bind ��Company ��accordingly, ��and ��(iv) ��this

Agreementconstitutes, and upon execution and delivery by Company of the Note,each

ofsuchinstrumentswillconstitute,alegal,validandbindingobligationofCompany

enforceable against Company in accordance with its terms.

c.

Capitalization. ��Asofthedatehereof,theauthorizedcapitalstockofCompany consists

of:_______________sharesofCommonStock,$0.001parvaluepershare,ofwhich

_______________ shares are issued and outstanding as of _______________; except as

disclosed inCompanysSEC Documents(as defined herein), no sharesare reserved for

issuancepursuanttoCompanysstockoptionplans,nosharesarereservedfor issuance

pursuant �to �securities �(other �than �the �Note) �exercisable �for, �or �convertible �into �or

exchangeableforsharesofCommonStock. ��Allofsuchoutstandingsharesofcapital

stockare,oruponissuancewillbe,duly authorized,validly issued,fully paidandnon-

assessable. ��NosharesofcapitalstockofCompanyaresubjecttopreemptiverightsor

anyothersimilarrightsoftheshareholdersofCompanyoranyliensorencumbrances

imposedthroughtheactionsorfailureto �act �ofCompany. ���Except �asdisclosedin

CompanysSECDocumentsasoftheeffectivedateofthisAgreement,(i)thereareno

outstandingoptions,warrants,scrip,rightstosubscribefor,puts,calls,rightsoffirst

refusal, �agreements, �understandings, �claims �or �other �commitments �or �rights �of �any

character whatsoever relating to, or securities or rights convertible into or exchangeable

foranysharesofcapitalstockofCompanyoranyofitsSubsidiaries,orarrangements

by �which ��Company �or ��any �of ��its ��Subsidiaries ��is ��or ��may �become �bound ��to ��issue

additional shares of capital stock of Company or any of its Subsidiaries, (ii) there are no

agreements ��or ��arrangements ��under ��which ��Company ��or ��any ��of ��its ��Subsidiaries ��is

obligated to register the sale of any of its or their securities under the 1933Act and (iii)

there �are �no �anti-dilution �or �price �adjustment �provisions �contained �in �any �security

issuedbyCompany(orinanyagreementprovidingrightstosecurityholders)thatwill

betriggeredbytheissuanceofthe �Noteorthe �ConversionShares. ���Companyhas

furnishedto �BuyerviaemaillinkstoCompanysSECDocumentstrueandcorrect

copies ��of ��Companys ��Certificate ��of ��Incorporation ��as ��in ��effect ��on ��the ��date ��hereof

(CertificateofIncorporation),CompanysBy-laws,asineffectonthedatehereof

(the �By-laws), �and �the �terms �of �all �securities �convertible �into �or �exercisable �for

CommonStockofCompanyandthematerialrightsoftheholdersthereofinrespect

thereto. ���CompanyshallprovideBuyerwithawrittenupdateofthisrepresentation

signed by Companys Chief Executive on behalf of Company as of the Closing Date.

Company ___________

Buyer ___________



Page 6 of 23

d. �����Issuance �of �Shares. ���The �Conversion �Shares �are �duly �authorized �and �reserved �for

issuanceand,uponconversionoftheNoteinaccordancewithitsrespectiveterms,will

bevalidlyissued,fullypaidandnon-assessable,andfreefromalltaxes,liens,claims

and ��encumbrances ��with ��respect ��to ��the ��issue ��thereof ��and ��shall ��not ��be ��subject ��to

preemptive �rights �or �other �similar �rights �of �shareholders �of �Company �and �will �not

impose personal liability upon the holder thereof.

e.

Tag-Along ��Registration ��Rights ��of ��Conversion ��Shares. ��Company ��shall ��include ��the

Conversion �Shares �in �anyRegistration �Statement �filed �with �the �SEC �followingthe

RegistrationStatementwhichshallbefiledinconnectionwiththeSecuritiesPurchase

Agreement dated January __, 2015.

f.

Acknowledgment of Dilution. ��Company understands andacknowledges the potentially

dilutiveeffecttotheCommonStockupontheissuanceoftheConversionSharesupon

conversionoftheNote. ���Companyfurtheracknowledgesthatitsobligationtoissue

Conversion Shares upon conversion of the Note in accordance with this Agreement, the

Noteisabsoluteandunconditionalregardlessofthedilutiveeffectthatsuchissuance

may have on the ownership interests of other shareholders of Company.

g.

No Conflicts. ��The execution, delivery and performance of this Agreement, the Note by

Companyandtheconsummationby Companyofthetransactionscontemplatedhereby

andthereby(including,withoutlimitation,theissuanceandreservationforissuanceof

the Conversion Shares) will not (i) conflict with or result in a violation of any provision

of the Certificate of Incorporation or By-laws, or (ii) violate or conflict with, or result in

abreachofanyprovisionof,orconstituteadefault(oraneventwhichwithnoticeor

lapseoftimeorbothcouldbecomeadefault)under,orgivetoothersanyrightsof

termination, �amendment, �acceleration �or �cancellation �of, �any �agreement, �indenture,

patent,patentlicenseofinstrumenttowhichCompanyoranyofitsSubsidiariesisa

party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree

(includingfederalandstatesecuritieslawsandregulationsandregulationsofanyself-

regulatoryorganizationstowhichCompanyoritssecuritiesaresubject)applicableto

CompanyoranyofitsSubsidiariesorbywhichanypropertyorassetofCompanyor

any ��of ��its ��Subsidiaries ��is ��bound ��or ��affected ��(except ��for ��such ��conflicts, ��defaults,

terminations, �amendments, �accelerations, �cancellations �and �violations �as �would �not,

individuallyorintheaggregate,haveaMaterialAdverseEffect). ��NeitherCompany

noranyofitsSubsidiariesisinviolationofitsCertificateofIncorporation,By-lawsor

otherorganizationaldocumentsandneitherCompanynoranyofitsSubsidiariesisin

default(andnoeventhasoccurredwhichthenoticeorlapseoftimeorbothcouldput

CompanyoranyofitsSubsidiariesindefault)under,andneitherCompanynoranyof

itsSubsidiarieshastakenanyactionorfailedtotakeanyactionthatwouldgiveto

others ��any ��rights ��of ��termination, ��amendment, ��acceleration ��or ��cancellation ��of, ��any

agreement,indentureorinstrumenttowhichCompanyoranyofitsSubsidiariesisa

party or by which any property or assets of Company or any of its Subsidiaries is bound

oraffected,exceptforpossibledefaultsaswouldnot,individuallyorintheaggregate,

haveaMaterialAdverseEffect. ��ThebusinessesofCompanyanditsSubsidiaries,if

any,arenotbeing conducted,andshallbeconductedsolong asBuyerownsany ofthe

Company ___________

Buyer ___________



Page 7 of 23

Securities,inviolationofanylaw,ordinanceorregulationofanygovernmentalentity.

ExceptasspecificallycontemplatedbythisAgreementandasrequiredunderthe1933

Actandanyapplicablestatesecuritieslaws,Companyisnotrequiredtoobtainany

consent,authorizationororderof,ormakeanyfilingorregistrationwithanycourt,

governmentalagency,regulatoryagency,self-regulatoryorganizationorstockmarket

oranythirdpartyinorderforittoexecute,deliverorperformanyofitsobligations

underthisAgreement,theNoteinaccordancewiththetermshereoforthereoforto

issueandselltheNotein accordance withthetermshereofandtoissue the Conversion

SharesuponconversionoftheNote. ��Allconsents,authorizations,orders,filingsand

registrationswhichCompanyisrequiredtoobtainpursuanttotheprecedingsentence

havebeenobtainedoreffectedonorpriortothedatehereof. ���Companyis �not �in

violation �of �the �listing �requirements �of �the �OTC �Pink �market �(the �"OTC �Pink")

operatedby OTCMarketsGroup,afinancialmarketplaceplatform("OTCMarkets"),

itwillbecurrentwithitsSECreportswithin14daysofthedatehereofanddoesnot

reasonablyanticipatethatintheforeseeablefuturesuchcurrentstatuswillbelostor

thatitsCommonStockwillbedelistedfromtheOTCPinkorthata"Stop"or"Yield"

sign will be placed on its trading symbol. �Company and its Subsidiaries are unaware of

any facts or circumstances, which might give rise to any of the foregoing.

h. �����SEC ��Documents: ��Financial ��Statements. �����Company ��has ��timely ��filed ��all ��reports,

schedules,forms,statementsandotherdocumentsrequiredtobefiledbyitwiththe

SECpursuanttothereportingrequirementsoftheSecuritiesExchangeActof1934,as

amended(the1934Act)(alloftheforegoingfiledpriortothedatehereofandall

exhibits included therein and financial statements and schedules thereto and documents,

other ��than ��exhibits ��to ��such ��documents, ��incorporated ��by ��reference ��therein, ��being

hereinafter ��referred ��to ��herein ��as ��the ��SEC ��Documents). ��Upon ��written ��request

Company will deliver to Buyer true and complete copies of the SEC Documents, except

forsuchexhibitsandincorporateddocuments. ��Asoftheirrespectivedates,theSEC

Documents complied inall material respectswith the requirements of the 1934 Act and

therulesandregulationsoftheSECpromulgatedthereunderapplicabletotheSEC

Documents, and none ofthe SEC Documents, at the time they were filedwith the SEC,

containedanyuntruestatementofamaterialfactoromittedtostateamaterialfact

requiredtobestatedthereinornecessaryinordertomakethestatementstherein,in

lightofthecircumstancesunderwhichtheyweremade,notmisleading. ��Noneofthe

statementsmadeinanysuchSECDocumentsis,orhasbeen,requiredtobeamended

orupdatedunderapplicablelaw(exceptforsuchstatementsashavebeenamendedor

updatedinsubsequentfilingspriorthedatehereof,orpursuanttopendingcomments

from �the �SEC. �As �of �their �respective �dates, �the �financial �statements �of �Company

included �in �the �SEC �Documents �complied �as �to �form �in �all �material �respects �with

applicableaccountingrequirementsandthepublishedrulesandregulationsoftheSEC

withrespectthereto. ��Suchfinancialstatementshavebeenpreparedinaccordancewith

the ���United ���States ���Generally ���Accepted ���Accounting ���Principles ���("US ���GAAP"),

consistently �applied, �during �the �periods �involved �and �fairly �present �in �all �material

respects ��the ��consolidated ��financial ��position ��of ��Company ��and ��its ��consolidated

Subsidiariesasofthedatesthereofandtheconsolidatedresultsoftheiroperationsand

cashflowsfortheperiodsthenended(subject,inthecaseofunauditedstatements,to

Company ___________

Buyer ___________



Page 8 of 23

normalyear-endauditadjustments). ��Exceptassetforthinthefinancialstatementsof

CompanyincludedintheSECDocuments,Companyhasnoliabilities,contingentor

otherwise,otherthan(i)liabilitiesincurredintheordinarycourseofbusiness,and(ii)

obligations ��under ��contracts ��and ��commitments ��incurred ��in ��the ��ordinary ��course ��of

businessandnotrequiredunderUSGAAPtobe reflectedinsuchfinancialstatements,

which,individuallyorintheaggregate,arenotmaterialtothefinancialconditionor

operating results of Company. ��Company issubject to thereporting requirements of the

1934 Act.

i.

AbsenceofCertainChanges. ��SinceJune30,2014,therehasbeennomaterialadverse

change ��and ��no ��material ��adverse ��development ��in ��the ��assets, ��liabilities, ��business,

properties,operations,financialcondition,resultsofoperations,prospectsor1934Act

reporting status of Company or any of its Subsidiaries.

j.

Absence ��of ��Litigation. ����There ��is ��no ��action, ��suit, ��claim, ��proceeding, ��inquiry ��or

investigationbeforeorbyanycourt,publicboard,governmentagency,self-regulatory

organization ��or ��body ��pending ��or, ��to ��the ��knowledge ��of ��Company ��or ��any ��of ��its

Subsidiaries,threatenedagainstoraffectingCompanyofanyofitsSubsidiaries,or

their �officers �or �directors �in �the �their �capacity �as �such, �that �could �have �a �Material

Adverse Effect. ��Schedule 3(j)containsa complete list and summary description of any

pendingor,totheknowledgeofCompanythreatenedproceedingagainstoraffecting

Company orany of its Subsidiaries, without regard to whether it would have a Material

Adverse ��Effect. �����Company ��and ��its ��Subsidiaries ��are ��unaware ��of ��any ��facts ��or

circumstances which might give rise to any of the foregoing.

k. �����Patents, Copyrights, etc. ��Company andeach of its Subsidiaries owns or possessesor in

theprocessofobtainingownershipoftherequisitelicensesorrightstouseallpatents,

patent �applications, �patent �rights, �inventions, �know-how, �trade �secrets, �trademarks,

trademark ��applications, ��service �marks, ��service ��names, ��trade �names ��and ��copyrights

(Intellectual ��Property) ��necessary ��to ��enable ��it ��to ��conduct ��its ��business ��as ��now

operated(and,aspresently contemplated tobe operatedin thefuture); there is noclaim

or ��action ��by ��any ��person ��pertaining ��to, ��or ��proceeding ��pending, ��or ��to ��Companys

knowledgethreatened,whichchallengestherightofCompanyorofaSubsidiarywith

respect to any Intellectual Property necessary to enable it to conduct its business as now

operated(and,aspresentlycontemplatedtobeoperatedinthefuture);tothebestof

Companysknowledge,CompanysoritsSubsidiariescurrentandintendedproducts,

servicesandprocessesdonotinfringeonanyIntellectualPropertyorotherrightsheld

byanyperson;andCompanyisunawareofanyfactsorcircumstanceswhichmight

giverisetoanyoftheforegoing. ���CompanyandeachofitsSubsidiarieshavetaken

reasonablesecuritymeasurestoprotectthesecrecy,confidentialityandvalueoftheir

Intellectual Property.

l.

NoMateriallyAdverseContracts,Etc. ��NeitherCompanynoranyofitsSubsidiariesis

subjecttoanycharter,corporateorotherlegalrestriction,oranyjudgment, �decree,

order, �rule �or �regulation, �which �in �the �judgment �of �Companys �officers �has �or �is

expectedinthefuturetohaveaMaterialAdverseEffect. ��NeitherCompanynorany of

Company ___________

Buyer ___________



Page 9 of 23

its �Subsidiaries �is �a �partyto �anycontract �or �agreement, �which �in �the �judgment �of

Companys officers has or is expected to have a Material Adverse Effect.

m. ����TaxStatus. ��CompanyandeachofitsSubsidiarieshasmadeorfiledallfederal,state

andforeignincomeandallothertaxreturns,reportsanddeclarationsrequiredbyany

jurisdictiontowhichitissubject(unlessandonly totheextentthatCompany andeach

ofitsSubsidiarieshassetasideonitsbooksprovisionsreasonablyadequateforthe

payment ��of ��all ��unpaid ��and ��unreported ��taxes) ��and ��has ��paid ��all ��taxes ��and ��other

governmental ��assessments ��and ��charges ��that ��are ��material ��in ��amount, ��shown ��or

determined �to �be �due �on �such �returns, �reports �and �declarations, �except �those �being

contestedingoodfaithandhassetasideonitsbooksprovisionsreasonablyadequate

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 �the �officers �of

Companyknowofnobasisforanysuchclaim. ��Companyhasnotexecutedawaiver

withrespecttothestatuteoflimitationsrelatingtotheassessmentorcollectionofany

foreign,federal,stateorlocaltax. ��NoneofCompanystaxreturnsarepresentlybeing

audited by any taxing authority.

n. �����Certain Transactions. ��Except for arms length transactions pursuant to which Company

oranyofitsSubsidiariesmakespaymentsintheordinarycourseofbusinessupon

terms no less favorable than Company or any of its Subsidiaries could obtain from third

parties ��and ��other ��than ��the ��grant ��of ��stock ��options ��disclosed ��in ��Companys ��SEC

Documents �and �on �Schedule �3(c), �none �of �the �officers, �directors, �or �employees �of

Company ��is ��presently ��a ��party ��to ��any ��transaction ��with ��Company ��or ��any ��of ��its

Subsidiaries(otherthanforservicesasemployees,officersanddirectors),including

any contract, agreement or other arrangement providing for the furnishing of services to

or ��by, ��providing �for �rental ��of ��real ��or ��personal ��property �to ��or ��from, ��or ��otherwise

requiring ��payments ��to ��or ��from ��any ��officer, ��director ��or ��such ��employee ��or, ��to ��the

knowledge of Company,any corporation, partnership, trust or other entity in which any

officer, �director, �or �any �such �employee �has �a �substantial �interest �or �is �an �officer,

director, trustee or partner.

o. �����Disclosure. �����All ��information ��relating ��to ��or ��concerning ��Company ��or ��any ��of ��its

Subsidiaries set forth in this Agreementand provided to Buyer pursuanttoSection 2(d)

hereofandotherwiseinconnectionwiththetransactionscontemplatedherebyistrue

andcorrectinallmaterialrespectsandCompanyhasnotomittedtostateanymaterial

factnecessaryinordertomakethestatementsmadehereinortherein,inlightofthe

circumstancesunderwhichthey were made,notmisleading. ��Noeventorcircumstance

hasoccurredorexistswithrespecttoCompany orany ofitsSubsidiariesoritsortheir

business, ��properties, ��prospects, ��operations ��or ��financial ��conditions, ��which, ��under

applicable ��law, ��rule �or ��regulation, ��requires ��public �disclosure �or ��announcement ��by

Company but which has not been so publicly announced or disclosed (assuming for this

purpose that Companysreports filed under the 1934 Act are being incorporated into an

effective registration statement filed by Company under the 1933 Act).

Company ___________

Buyer ___________



Page 10 of 23

p. �����AcknowledgmentRegardingBuyersPurchaseofSecurities. ��Companyacknowledges

andagreesthatBuyerisactingsolelyinthecapacityofarmslengthpurchaserswith

respecttothisAgreementandthetransactionscontemplatedhereby. ��Companyfurther

acknowledgesthatBuyerisnotactingasafinancialadvisororfiduciaryofCompany

(or ��in ��any ��similar ��capacity) ��with ��respect ��to ��this ��Agreement ��and ��the ��transactions

contemplated ��hereby ��and ��any ��statement ��made ��by ��Buyer ��or ��any ��of ��its ��respective

representatives ��or ��agents ��in ��connection ��with ��this ��Agreement ��and ��the ��transactions

contemplatedherebyisnotadviceorarecommendationandismerelyincidentalto

Buyers ��purchase ��of ��the ��Securities. ����Company ��further ��represents ��to ��Buyer ��that

Companys ��decision ��to ��enter ��into ��this ��Agreement ��has ��been ��based ��solely ��on ��the

independent evaluation of Company and its representatives.

q. �����No ��Integrated ��Offering. ����Assuming ��the ��accuracy ��of ��Buyers ��representations ��and

warrantiessetforthinSection2,neithertheCompany,norany ofitsaffiliates,norany

Personactingonitsortheirbehalfhas,directlyorindirectly,madeanyoffersorsales

ofanysecurityorsolicitedanyofferstobuyanysecurity,undercircumstancesthat

wouldcausethisofferingoftheSecuritiestobeintegratedwithpriorofferingsbythe

CompanyforpurposesoftheSecuritiesActoranyapplicableshareholderapproval

provisionsofanyTradingMarketonwhichanyoftheSecuritiesoftheCompanyare

listed or designated.

r.

Permits;Compliance. ���CompanyandeachofitsSubsidiariesisinpossessionofall

franchises,grants,authorizations,licenses,permits,easements,variances,exemptions,

consents, �certificates, �approvals �and �orders �necessaryto �own, �lease �and �operate �its

propertiesandtocarryonitsbusinessasitisnowbeingconducted(collectively,the

Company ��Permits), ��and ��there ��is ��no ��action ��pending ��or, ��to ��the ��knowledge ��of

Company,threatenedregarding suspensionorcancellationofany ofCompany Permits.

Neither �Company �nor �any �of �its ��Subsidiaries �is �in �conflict �with, �or �in �default �or

violation ��of, ��any �of ��Company �Permits, ��except ��for ��any �such ��conflicts, ��defaults ��or

violationswhich,individually orintheaggregate,wouldnotreasonably beexpectedto

haveaMaterialAdverseEffect. ��SinceJune30,2014,neitherCompanynoranyofits

Subsidiarieshasreceivedany notificationwithrespecttopossibleconflicts,defaultsor

violations �of �applicable �laws, �except �for �notices �relating �to �the �possible �conflicts,

defaultsorviolations,whichconflicts,defaultsorviolationswouldnothaveaMaterial

Adverse Effect.

s.

Environmental Matters.

(i) �����There �are, �to �Companys �knowledge, �with �respect �to �Company �or �any �of �its

Subsidiaries �or �anypredecessor �of �Company, �no �past �or �present �violations �of

Environmental ��Laws ��(as ��defined ��below), ��releases ��of ��any ��material ��into ��the

environment, �actionsactivities,circumstances, �conditions, �events, �incidents, �or

contractualobligationswhichmaygiverisetoanycommonlawenvironmental

liability ��or ��any ��liability ��under ��the ��Comprehensive ��Environmental ��Response,

CompensationandLiabilityActof1980orsimilarfederal,state,localorforeign

lawsandneitherCompanynoranyofitsSubsidiarieshasreceivedanynotice

Company ___________

Buyer ___________



Page 11 of 23

withrespecttoanyoftheforegoing,norisanyactionpendingor,toCompanys

knowledge, ��threatened ��in ��connection ��with ��any ��of ��the ��foregoing. ����The ��term

EnvironmentalLawsmeansallfederal,state,localorforeignlawsrelatingto

pollutionorprotectionofhumanhealthortheenvironment(including,without

limitation,ambientair,surfacewater,groundwater,landsurfaceorsubsurface

strata), ��including, ��without ��limitation, ��laws ��relating ��to ��emissions, ��discharges,

releasesorthreatenedreleasesofchemicals,pollutantscontaminants,ortoxicor

hazardoussubstancesorwaste(collectively, �HazardousMaterials)intothe

environment,orotherwiserelatingtothemanufacture,processing,distribution,

use,treatment,storage,disposal,transportorhandlingofHazardousMaterials,as

wellasallauthorizations,codes,decrees,demandsordemandletters,injunctions,

judgments,licenses,noticesornoticeletters,orders,permits,plansorregulations

issued, entered, promulgated or approved thereunder.

(ii) ����Otherthanthosethatareorwerestored,usedordisposedofincompliancewith

applicable ��law, ��no ��Hazardous ��Materials ��are ��contained ��on ��or ��about ��any ��real

propertycurrentlyowned,leasedorusedbyCompanyoranyofitssubsidiaries,

and ��no ��Hazardous ��Materials ��were ��released ��on ��or ��about ��any ��real ��property

previouslyowned,leasedorusedbyCompanyoranyofitsSubsidiariesduring

theperiodthepropertywasowned,leasedorusedbyCompanyoranyofits

Subsidiaries, except in the normal course of Companys or any of its Subsidiaries

business.

(iii) ��Therearenoundergroundstoragetanksonorunderanyrealpropertyowned,

leasedorusedbyCompanyoranyofitsSubsidiariesthatarenotincompliance

with applicable law.

t.

TitletoProperty. ��CompanyanditsSubsidiarieshavegoodandmarketabletitleinfee

simple to all real property andgoodand marketable title to all personal property owned

by them which is material to the business of Company and its Subsidiaries, in each case

freeandclearofallliens,encumbrancesanddefectsexceptsuchasaredescribedin

Schedule3(t)orsuchaswouldnothaveaMaterialAdverseEffect. ��Anyrealproperty

andfacilitiesheldunderleaseby Company anditsSubsidiariesare heldby themunder

valid, �subsisting �and �enforceable �leases �with �such �exceptions �as �would �not �have �a

Material Adverse Effect.

u.

Insurance. ��Company andeachofitsSubsidiariesareinsuredby insurersofrecognized

financial ��responsibility ��against ��such ��losses ��and ��risks ��and ��in ��such ��amounts ��as

managementofCompanybelievestobeprudentandcustomaryinthebusinessesin

whichCompanyanditsSubsidiariesareengaged. ���NeitherCompanynoranysuch

Subsidiaryhas �any �reason �to �believe �that �it �will �not �be �able �to �renew �its �existing

insurancecoverageasandwhensuchcoverageexpiresortoobtainsimilarcoverage

fromsimilarinsurersasmaybenecessarytocontinueitsbusinessatacostthatwould

nothaveaMaterialAdverseEffect. ���UponwrittenrequestCompanywillprovideto

Buyertrueandcorrect �copiesofall �policiesrelatingto �thedirectors �andofficers

Company ___________

Buyer ___________



Page 12 of 23

liability �coverage, �errors �and �omissions �coverage, �and �commercial �general �liability

coverage.

v.

Internal Accounting Controls. ��Company and each of its Subsidiaries maintain a system

of �internal �accounting �controls �sufficient, �in �the �judgment �of �Companys �board �of

directors, ��to ��provide ��reasonable ��assurance ��that ��(i) ��transactions ��are ��executed ��in

accordancewithmanagement'sgeneralorspecificauthorizations,(ii)transactionsare

recordedasnecessarytopermitpreparationoffinancialstatementsinconformitywith

generally �accepted �accounting �principles �and �to �maintain �asset �accountability, �(iii)

accesstoassetsispermittedonlyinaccordancewithmanagement'sgeneralorspecific

authorization �and �(iv) �the �recorded �accountability �for �assets �is �compared �with �the

existingassetsatreasonableintervalsandappropriateactionistakenwithrespectto

any differences.

w.

Foreign �Corrupt �Practices. ���Neither �Company, �nor �anyof �its �Subsidiaries, �nor �any

director,officer,agent,employeeorotherpersonactingonbehalfofCompanyorany

Subsidiaryhas,inthecourseofhisactionsfor,oronbehalfof,Company,usedany

corporatefundsforanyunlawfulcontribution,gift,entertainmentorotherunlawful

expensesrelatingtopoliticalactivity;madeanydirectorindirectunlawfulpaymentto

any ��foreign ��or ��domestic ��government ��official ��or ��employee ��from ��corporate ��funds;

violated or is in violation of any provisions of the U.S. Foreign Corrupt Practices Act of

1977,asamended,ormadeanybribe,rebate,payoff,influencepayment,kickbackor

other unlawful payment to any foreign or domestic government official or employee.

x.

Solvency. ��Company ��(after ��giving ��effect ��to ��the ��transactions ��contemplated ��by ��this

Agreement)issolvent(i.e.,itsassetshaveafairmarketvalueinexcessoftheamount

requiredtopay itsprobableliabilitieson its existing debtsasthey becomeabsoluteand

matured)andcurrentlyCompanyhasnoinformationthatwouldleadittoreasonably

concludethatCompanywouldnot,aftergivingeffecttothetransactioncontemplated

bythisAgreement,havetheabilityto,nordoesitintendtotakeanyactionthatwould

impairitsability to,pay itsdebtsfromtimetotimeincurredinconnectiontherewithas

suchdebtmature. ��Companydidnotreceiveaqualifiedopinionfromitsauditorswith

respecttoitsmostrecentfiscalyearendand,aftergivingeffecttothetransactions

contemplatedbythisAgreement,doesnotanticipateorknowofanybasisuponwhich

its auditors might issue a qualified opinion in respect of its current fiscal year.

y.

No Investment Company. �Company is not, and upon the issuance and sale of Securities

ascontemplatedby thisAgreement,willnotbeanInvestmentCompany requiredtobe

registeredundertheInvestmentCompanyActof1940. ��Companyisnotcontrolledby

an Investment Company.

z.

BreachofRepresentationsandWarrantiesbyCompany. ��IfCompanybreachesanyof

therepresentationsorwarrantiessetforthinthisSection3,andinaddition toany other

remediesavailabletoBuyerpursuanttothisAgreement,itwillbeconsideredanEvent

of Default under Section 3.4 of the Note.

Company ___________

Buyer ___________



Page 13 of 23

4. ��Covenants.

a. ���Best �Efforts. ����The �Parties �shall �use �their �best ��efforts �to ��timely �satisfy �each �of �the

conditions described in Section 6 and 7 of this Agreement.

b. ��UseofProceeds. ��$70,000oftheproceedstotheCompanypursuanttothisAgreement

shallbeusedonlyasfollows:PederDavisson-$10,000;JrReubenacctg-$10,000;SEC

Filers �- �$2,500; �Nevada �Transfer �- �$10,000; �Davisson �Trust �for �SEC �- �$5,000; �State �of

Nevada - $3,500; 3 months of operations (including legal, accounting, filing etc.) - $30,000.

c. ���RightofFirstRefusal. ��TheCompanyshalldelivertoBuyer,atleastseventytwo(72)

hourspriortotheclosingofaFutureOffering(asdefinedherein),writtennoticedescribing

the �proposed �Future �Offering, �including �the �terms �and �conditions �thereof �and �proposed

definitivedocumentationtobeenteredintoinconnectiontherewith,andprovidingBuyeran

optionduring theseventy two(72) hourperiodfollowing delivery ofsuchnotice topurchase

the securities being offered in the Future Offering on the same terms as contemplated by such

FutureOffering(thelimitationsreferredtointhissentenceandtheprecedingsentenceare

collectivelyreferred �to �as �the �Right �Of �First �Refusal) �(and �subject �to �the �exceptions

described �below). ����In �the �event �the �terms �and �conditions �of �proposed ��equity �financing

(including debt with anequity component) (Future Offerings) are amended in any respect

after delivery of the notice to Buyer concerning the proposed Future Offering, Company shall

deliveranewnoticetoBuyerdescribingtheamendedtermsandconditionsoftheproposed

FutureOfferingandBuyerthereaftershallhaveanoptionduringtheseventytwo(72)hour

periodfollowingdeliveryofsuchnewnoticetopurchaseitsproratashareofthesecurities

being �offered �on �the �same �terms �as �contemplated �bysuch �proposed �Future �Offering, �as

amended. ��Theforegoingsentenceshallapplytosuccessiveamendmentstothetermsand

conditionsofanyproposedFutureOffering. ��TheRightOfFirstRefusalshallnotapplyto

any �transaction �involving �(i) �issuances �of �securities �in �a �firm �commitment �underwritten

publicoffering(excludingacontinuousofferingpursuanttorule415underthe1933Act)or

(ii)issuancesofsecuritiesasconsiderationforamerger,consolidationorpurchaseofassets,

or in connection with any strategic partnership or joint venture (the primary purpose of which

is �not �to �raise �equity �capital), �or �in �connection �with �the �disposition �or �acquisition �of �a

business,productorlicensebyCompany. ��TheRightofFirstRefusalalsoshallnotapply to

������theissuanceofsecuritiesuponexerciseorconversionofCompanysoptions,warrantsor

otherconvertiblesecuritiesoutstandingasofthedatehereofortothegrantofadditional

options or warrants, or the issuance of additional securities, under any Company stock option

or restricted stock plan approved by the shareholders of Company.

d. ��FinancialInformation. ��Upon writtenrequestby Buyer,Company agreesto send ormake

availableby facsimile(withreceiptconfirmationby recipient)oremailthefollowingreports

toBuyeruntilBuyertransfers,assigns,orsellsalloftheSecurities;(i)withinten(10)days

after the filing with the SEC, a copy of its Annual Report on Form 10-K, its Quarterly reports

onForm10-QandanyCurrentReportsonForm8-K;(ii)withinone(1)dayafterrelease,

copies ��of ��all ��press ��releases ��issued ��by ��Company ��or ��any ��of ��its ��Subsidiaries; ��and ��(iii)

contemporaneouslywiththemakingavailableorgivingtotheshareholdersofCompany,

Company ___________

Buyer ___________



Page 14 of 23

copies �of �any �notices �or �other �information �Company �makes �available �or �gives �to �such

shareholders.

e. ���Listing. ���CompanyshallpromptlysecurethelistingoftheConversionSharesoneach

national �securities �exchange �or �automated �quotation �system, �if �any, �on �which �shares �of

Common �Stock �are �then �listed �and, �so �long �as �Buyer �owns �anyof �the �Securities, �shall

maintain such listing ofall Conversion Sharesfrom time to time issuable upon conversion of

theNote. ��Companywillobtainand,solongasBuyerownsanyoftheSecurities,maintain

thelistingandtradingofitsCommonStockontheOTCBB,OTCQB,OTCQXortheOTC

Pink(providedthatifitislistedontheOTCPinkitmustmaintainitsSECcurrentreporting

status),theNASDAQStockMarket,theNewYorkStockExchange,ortheNYSEMKT

f/k/a ��the ��American ��Stock ��Exchange ��(collectively, ��the ��"Trading ��Markets" ��and ��each, ��a

"TradingMarket")andwillcomplyinallrespectswithCompanysreporting,filingand

otherobligationsunderthebylawsorrulesoftheFinancialIndustryRegulatoryAuthority

(FINRA)andsuchTradingMarkets,asapplicable. ��Companyshallpromptlyprovideto

Buyer copies of any notices it receivesfrom theOTC Pink and any otherTrading Marketsor

quotation ��systems ��on ��which ��the ��Common ��Stock ��is ��then ��listed ��regarding �the ��continued

eligibility of the Common Stock for listing on such Trading Markets and quotation systems.

f. ���Corporate �Existence. ���So �long �as �Buyer �beneficiallyowns �anyNote, �Companyshall

������maintain its corporate existence and shall not sell all or substantially all of Companys assets,

except ��in ��the ��event ��of ��a ��merger ��or ��consolidation ��or ��sale ��of ��all ��or ��substantially �all ��of

Company'sassets,wherethesurvivingorsuccessorentityinsuchtransaction(i)assumes

������Companysobligationshereunderandundertheagreementsandinstrumentsenteredintoin

connectionherewithand(ii)isapubliclytradedcorporationwhoseCommonStockislisted

for trading on a Trading Market.

g. ��NoIntegration. ���TheCompanyshallnotsell,offerforsaleorsolicitofferstobuyor

otherwisenegotiateinrespectofanysecurity(asdefinedinSection2oftheSecuritiesAct)

thatwouldbeintegratedwiththeofferorsaleoftheSecuritiesinamannerthatwould

requiretheregistrationundertheSecuritiesActofthesaleoftheSecuritiestotheBuyeror

thatwouldbeintegratedwiththeofferorsaleoftheSecuritiesforpurposesoftherulesand

regulationsofanyTradingMarketsuchthatitwouldrequireshareholderapprovalpriorto

the �closing �of �such �other �transaction �unless �shareholder �approval �is �obtained �before �the

closing of such subsequent transaction.

h. ��Breach of Covenants. ��IfCompany breaches any of the covenants set forth in this Section

4, and in addition to any other remedies available to Buyer pursuant to this Agreement, it will

be considered an event of default under Section 3.4 of the Note.

i. ���FailuretoComplywiththe1934Act. ���SolongasBuyerbeneficiallyownstheNote,

Company shallcomplywiththereportingrequirementsofthe1934Act;andCompany shall

continue to be subject to the reporting requirements of the 1934 Act.

Company ___________

Buyer ___________



Page 15 of 23

j. ���TradingActivities. ���NeitherBuyernoritsaffiliateshasanopenshortpositioninthe

commonstockofCompanyandBuyeragreesthatitshallnot,andthatitwillcauseits

affiliates not to, engage in any short sales with respect to the common stock of Company.

5. ��TransferAgent �Instructions. ���Companyshallissueirrevocable �instructionsto �itstransfer

agent to issue certificates, registeredin the name of Buyer or its nominee,for the Conversion

Shares ��in ��such ��amounts ��as ��specified ��from ��time ��to ��time ��by ��Buyer ��to ��Company ��upon

conversion of the Note in accordance with the termsset forth in Exhibit B (the Irrevocable

Transfer �Agent �Instructions). ���In �the �event �that �the �Borrower �proposes �to �replace �its

transferagent,theBorrowershallprovide,priortotheeffectivedateofsuchreplacement,a

fully ��executed ��Irrevocable ��Transfer ��Agent ��Instructions ��in ��a ��form ��as ��initially ��delivered

pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably

reservesharesofCommonStockintheReservedAmount)signedbythesuccessortransfer

agent to Borrower and the Borrower. �Prior to registration of the Conversion Shares under the

1933ActorthedateonwhichtheConversionSharesmaybesoldwithoutanyrestriction

pursuanttoRule144oranyavailableexemptionunderthe1933Act,allsuchcertificates

shall �bear �the �restrictive �legend �specified �in �Section �2(g) �of �this �Agreement. ���Company

warrants ��that; ��(i) ��no ��instruction ��other ��than ��the ��Irrevocable ��Transfer ��Agent ��Instructions

referred to in this Section 5, and stop transfer instructions to give effect to Section 2(f) hereof

(inthecaseoftheConversionShares,priortoregistrationofConversionSharesunderthe

1933ActorthedateonwhichtheConversionSharesmaybesoldpursuanttoRule144or

any �available �exemption �under �the �1933 �Act, �without �anyrestriction), �will �be �given �by

Company to its transfer agentand that the Securities shall otherwise be freely transferable on

thebooksandrecordsofCompanyasandtotheextentprovidedinthisAgreementandthe

Note;(ii)itwillnotdirectitstransferagentnottotransferordelay,impair,and/orhinderits

transfer agent in transferring (or issuing), electronically or in certificated form, any certificate

for ConversionSharestobeissuedtoBuyeruponconversionoforotherwisepursuanttothe

Noteasandwhenrequired �bytheNoteandthisAgreement; �and(iii)it �willnot �failto

remove,ordirectitstransferagentnottoremoveorimpair,delay,and/orhinderitstransfer

agentfromremoving,anyrestrictivelegend,ortowithdrawanystoptransferinstructionsin

respect ��thereof, ��on ��any ��certificate ��for ��any ��Conversion ��Shares ��issued ��to ��Buyer ��upon

conversionoforotherwisepursuanttotheNoteasandwhenrequiredbytheNoteandthis

Agreement. ����Nothing ��in ��this ��Section ��shall ��affect ��in ��any ��way ��Buyers ��obligations ��and

agreement set forth in Section 2(g) hereof. ��If Buyer provides Company, atthe cost of Buyer,

with �(i) �an �opinion �of �counsel �in �form, �substance �and �scope �customary �for �opinions �in

comparabletransactions,totheeffectthatapublicsaleortransferofsuchSecuritiesmay be

made ��without ��registration ��under ��the ��1933 ��Act ��pursuant ��to ��Rule ��144 ��or ��any ��available

exemptionunderthe1933Act,Companyshallpermitthetransfer,and,inthecaseofthe

ConversionShares,promptly instructitstransferagenttoissueoneormorecertificates,free

from �restrictivelegend,in �suchnameandinsuchdenominationsasspecifiedbyBuyer.

Company acknowledgesthat a breachby it of its obligations hereunder will cause irreparable

harmtoBuyer,byvitiatingtheintentandpurposeofthetransactionscontemplatedhereby.

Accordingly,Companyacknowledgesthattheremedyatlawforabreachofitsobligations

underthisSection5maybeinadequateandagrees,intheeventofabreachorthreatened

breachby Company ofthe provisions of this Section, that Buyer shall be entitled, in addition

to ��all ��other ��available ��remedies, ��to ��an ��injunction ��restraining ��any ��breach ��and ��requiring

Company ___________

Buyer ___________



Page 16 of 23

immediatetransfer,withoutthenecessity ofshowing economic lossandwithoutany bondor

other security being required.

6. ��Conditions to Companys Obligation to Sell. ���The obligation of Company hereunder to issue

andsell �theNoteto �Buyer �at �theClosingis �subject �to �thesatisfaction,at �orbeforethe

Closing Date of each of the following conditions thereto:

a. ���Buyer shall have executed this Agreement and delivered the same to Company.

b. ��Buyer shall have delivered the Purchase Price in accordance with Section 1(b) above.

c. ���Therepresentations �and �warrantiesofBuyershall �betrueand �correct �in �all �material

respects as of the date when made and as of the Closing Date as though made at that time

(exceptforrepresentationsandwarrantiesthatspeakasofaspecificdate),andBuyer

shallhaveperformed,satisfiedandcompliedinallmaterialrespectswiththecovenants,

agreements �and �conditions �required �by �this �Agreement �to �be �performed, �satisfied �or

complied with by Buyer at or prior to the Closing Date.

d. ��Nolitigation,statute,rule,regulation,executiveorder,decree,rulingorinjunctionshall

havebeenenacted,entered,promulgatedorendorsedbyorinanycourtorgovernmental

authorityorcompetentjurisdictionoranyself-regulatoryorganizationhavingauthority

overthematterscontemplatedherebywhichprohibitstheconsummationofanyofthe

transactions contemplated by this Agreement.

7. ��Conditions ��to ��Buyers ��Obligation ��to ��Purchase. ����The ��obligation ��of ��Buyer ��hereunder ��to

purchase the Note at the Closing is subject to the satisfaction, at or before the Closing date of

each of the following conditions:

a. ���Company shall have executed this Agreement and delivered the same to Buyer.

b. ��Company �shall �have �delivered �to �Buyer �the �duly �executed �Note �in �accordance �with

Section 1(b) above.

c. ���TheIrrevocableTransferAgentInstructions,informandsubstancesatisfactorytothe

Buyer,shall have beendelivered toand acknowledgedin writing by Companys Transfer

Agent.

d. ��TherepresentationsandwarrantiesofCompanyshallbetrueandcorrectinallmaterial

respectsasofthedatewhenmadeandasoftheClosingDateasthoughmadeatsuch

time �(except �for �representations �and �warranties �that �speak �as �of �a �specific �date) �and

Companyshallhaveperformed,satisfiedandcompliedinallmaterialrespectswiththe

covenants, ��agreements ��and �conditions �required ��by �this ��Agreement �to ��be �performed,

satisfiedorcompliedwithby Company atorprior totheClosing Date. ��Buyershallhave

receivedacertificateorcertificates,executedbythechiefexecutiveofficerofCompany,

datedasoftheClosingDate,totheforegoingeffectandastosuchothermattersasmay

be reasonably requestedby Buyer including, but not limited to certificateswith respect to

Company ___________

Buyer ___________



Page 17 of 23

CompanysCertificateofIncorporation,By-lawsandBoardofDirectorsresolutions

relating to the transactions contemplated hereby.

e. ���Nolitigation,statute,rule,regulation,executiveorder,decree,rulingorinjunctionshall

havebeenenacted,entered,promulgatedorendorsedbyorinanycourtorgovernmental

authorityorcompetentjurisdictionoranyself-regulatoryorganizationhavingauthority

overthematterscontemplatedherebywhichprohibitstheconsummationofanyofthe

transactions contemplated by this Agreement.

f. ���NoeventshallhaveoccurredwhichcouldreasonablybeexpectedtohaveaMaterial

Adverse �Effect �on �Company �including �but �not �limited �to �a �change �in �the �1934 �Act

reportingstatusofCompanyorthefailureofCompanytobetimelyinits1934Act

reporting obligations.

g. ��Trading in the Company's Common Stock shall not have been suspendedby the SEC and

a"Stop"signshallnothavebeenplaced �ontheCompany'stradingsymbol �byOTC

Markets.

h. �Par value of Company's Common Stock shall have been set at $0.00001.

i. ���BuyershallhavereceivedanofficerscertificatedescribedinSection3(c)above,dated

as of the Closing Date.

8. ��Governing Law; Indemnity; Miscellaneous.

a. ���Governing Law. ��This Agreement shall be governed by andconstruedin accordancewith

thelawsoftheStateofIllinoiswithoutregardtoprinciplesofconflictsoflaws. ��Any

actionbroughtbyeitherpartyagainsttheotherconcerningthetransactionscontemplated

bythisAgreementshallbebroughtonlyinthestatecourtsofIllinoisorinthefederal

courtslocatedinthestateandcountyofCook. ��ThePartiestothisAgreementhereby

irrevocably ��waive ��any ��objection ��to ��jurisdiction ��and ��venue ��of ��any ��action ��instituted

hereunder and shall not assert any defense based on lack of jurisdiction or venue or based

uponforumnonconveniens. ��CompanyandBuyerwaivetrialbyjury. ��Theprevailing

partyshallbeentitledtorecoverfromtheotherpartyitsreasonableattorneysfeesand

costs. ��In the event that any provision of this Agreement or any other agreement delivered

inconnectionherewithisinvalidorunenforceableunderany applicablestatuteorruleof

law,thensuchprovisionshallbedeemedinoperativetotheextentthatitmayconflict

therewith and shall be deemed modified to conform with such statute or rule of law. ��Any

suchprovisionwhichmayproveinvalidorunenforceableunderanylawshallnotaffect

the validity or enforceability of any other provision of any agreement. ��Each party hereby

irrevocablywaivespersonalserviceofprocessandconsentstoprocessbeingservicedin

any suit, action or proceeding in connection with this Agreement or any other Transaction

Document by mailing a copy thereof viaregistered or certifiedmail or overnight delivery

(withevidenceofdelivery)tosuchpartyattheaddressineffectfornoticestoitunder

this Agreement and agrees that such service shall constitute good and sufficient service of

Company ___________

Buyer ___________



Page 18 of 23

process and notice thereof. �Nothing contained herein shall be deemed to limit in any way

any right to serve process in any other manner permitted by law.

b. ��Counterparts. ���ThisAgreementmaybeexecutedinoneormorecounterparts,eachof

whichshallbedeemedanoriginalbutallofwhichshallconstituteoneandthesame

agreementandshallbecomeeffectivewhencounterpartshavebeensignedbyeachparty

and delivered to the other party.

c. ���Headings. ��TheheadingsofthisAgreementareforconvenienceofreferenceonlyand

shall not form part of, or affect the interpretation of, this Agreement.

d. ��Severability. �����In ��the ��event ��that ��any ��provision ��of ��this ��Agreement ��is ��invalid ��or

unenforceableunderanyapplicablestatuteorruleoflaw,thensuchprovisionshallbe

deemed �inoperative �to �the �extent �that �it �mayconflict �therewith �and �shall �be �deemed

modifiedtoconformwithsuchstatuteorruleoflaw. ��Anyprovisionhereofwhichmay

prove ��invalid ��or ��unenforceable ��under ��any ��law ��shall ��not ��affect ��the ��validity ��or

enforceability of any other provision hereof.

e. ���EntireAgreement;Amendments. ��ThisAgreementandtheinstrumentsreferencedherein

containtheentireunderstandingofthePartieswithrespecttothematterscoveredherein

andthereinand,exceptasspecificallysetforthhereinortherein,neitherCompanynor

Buyermakesanyrepresentation,warranty,covenantorundertakingwithrespecttosuch

matters. ��NoprovisionofthisAgreementmaybewaivedoramendedotherthanbyan

instrument in writing signed by the majority in interest of Buyer.

f. ���Notices. ��Allnotices,demands,requests,consents,approvals,andothercommunications

required or permitted hereunder shall be in writing and, unless otherwise specified herein,

shallbe(i)personallyserved,(ii)depositedinthemail,registeredorcertified,return

receiptrequested,postageprepaid,(iii)deliveredbyreputableaircourierservicewith

charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as

setforthbelowortosuchotheraddressassuchpartyshallhavespecifiedmostrecently

bywrittennotice. ��Anynoticeorothercommunicationrequiredorpermittedtobegiven

hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with

accurateconfirmationgeneratedbythetransmittingfacsimilemachine,attheaddressor

numberdesignatedbelow(ifdeliveredonabusinessdayduringnormalbusinesshours

wheresuchnoticeistobereceived),orthefirstbusinessdayfollowingsuchdelivery(if

delivered other than on a business day during normal business hours where such notice is

to be received) or (b) on the second business day following the date of mailing by express

courierservice,fullyprepaid,addressedtosuchaddress,oruponactualreceiptofsuch

mailing, whichever shall first occur. The addresses for such communications shall be:

If to Company:

MineralRite Corporation

55 South Geneva Road

Lindon, Utah 84042

Company ___________

Buyer ___________



Page 19 of 23

Phone: �801-796-8944

Email: [email protected]

If to Buyer:

River North Equity, Inc.

360 W. Hubbard St., Unit 2801

Chicago, IL 60654

Phone: �(312) 643-0280

Email: [email protected]

Each party shall provide notice to the other party of any change in address.

g. ��SuccessorsandAssigns. ��ThisAgreementshallbebindinguponandinuretothebenefit

ofthePartiesandtheirsuccessorsandassigns. ��NeitherCompany norBuyershallassign

this Agreement or any rights or obligations hereunder without the prior written consent of

theother. ��Notwithstandingtheforegoing,subjecttoSection2(f),Buyermayassignits

rightshereundertoanypersonthatpurchasesSecuritiesinaprivatetransactionfrom

Buyerortoanyofitsaffiliatesasthattermisdefinedunderthe1934Act,withoutthe

consent of Company.

h. ��ThirdPartyBeneficiaries. ���This �Agreementis �intendedfor �thebenefit �ofthe �Parties

heretoandtheirrespectivepermittedsuccessorsandassigns,andisnotforthebenefitof,

nor may any provision hereof be enforced by, any other person.

i. ���Survival. ����The �representations �and �warranties ��of �Company �and ��the ��agreements ��and

covenants set forth in this Agreement shall survive the closing hereunder notwithstanding

any due diligence investigation conducted by or on behalf of Buyer.

j. ���Indemnity. ��Company agrees to indemnify andhold harmless Buyer andall their officers,

directors,employeesandagentsfor lossordamage arising asaresultoforrelatedtoany

breach �or �alleged �breach �by �Company �of �any �of �its �representations, �warranties �and

covenantssetforthinthisAgreementoranyofitscovenantsandobligationsunderthis

Agreement, including advancement of expenses as they are incurred.

k. ��Publicity. �Company, and Buyer shall have the right to review a reasonable period of time

beforeissuanceofany pressreleases,SEC,OTCMarketsorFINRAfilings,orany other

public ��statements ��with ��respect ��to ��the ��transactions ��contemplated ��hereby; ��provided,

however,thatCompanyshallbeentitled,withoutthepriorapprovalofBuyer,tomake

any ��press ��release ��or ��SEC, ��OTC ��Markets ��or ��FINRA ��filings ��with ��respect ��to ��such

transactionsasisrequiredbyapplicablelawandregulations(althoughBuyershallbe

consultedbyCompanyinconnectionwithanysuchpressreleasepriortoitsreleaseand

shall be provided with a copy thereof and be given an opportunity to comment thereon).

Company ___________

Buyer ___________



Page 20 of 23

l. ���Further Assurances. �Each party shall do and perform, or cause to be done and performed,

allsuchfurtheractsandthings,andshallexecuteanddeliverallsuchotheragreements,

certificates,instrumentsanddocuments,astheotherpartymayreasonablyrequestin

ordertocarryouttheintentandaccomplishthepurposesofthisAgreementandthe

consummation of the transactions contemplated hereby.

m. �NoStrictConstruction. ��ThelanguageusedinthisAgreementwillbedeemedtobethe

language �chosen �bythe �Parties �to �express �their �mutual �intent, �and �norules �of �strict

construction will be applied against any party.

n. ��Remedies. ��Companyacknowledgesthatabreachbyitofitsobligationshereunderwill

causeirreparableharmtoBuyerbyvitiatingtheintentandpurposeofthetransaction

contemplatedhereby. ��Accordingly,Company acknowledgesthattheremedy atlawfor a

breach of its obligations under this Agreement will be inadequate and agrees, in the event

ofabreachorthreatenedbreachbyCompanyoftheprovisionsofthisAgreement,that

Buyershall beentitled, in addition to allother available remediesat law or in equity,and

inadditiontothepenaltiesassessableherein,toaninjunctionorinjunctionsrestraining,

preventingorcuringanybreachofthisAgreementandtoenforcespecificallytheterms

andprovisionshereof,withoutthenecessityofshowingeconomiclossandwithoutany

bond or other security being required.

[REMAINDER OF DOCUMENT INTENTIONALLY LEFT BLANK]

Company ___________

Buyer ___________



Page 21 of 23

INWITNESSWHEREOF,theundersignedBuyerandCompany havecausedthisAgreementto

be duly executed as of the date first above written.

SIGNED by: �Edward M. Liceaga

Signature: ______________________

for and on behalf of:

RIVER NORTH EQUITY, INC.

Principal Amount of Note:

$77,778.00

SIGNED by: ____________________

Signature: ______________________

for and on behalf of:

MINERALRITE CORPORATION

Company ___________

Buyer ___________



Page 22 of 23

EXHIBIT B: �IRREVOCABLE INSTRUCTIONS

Nevada Agency & Transfer Company

50 W. Liberty St., Suite 880

Reno, NV 89501

775-322-0626

[email protected]

RE: �����IRREVOCABLE INSTRUCTIONS

MineralRite Corporation

To whom it may concern:

RiverNorthEquity,Inc.(theHolder)istheholderofa$77,778ConvertibleNote(the

Note)and________sharesofcommonstockissuedbyMineralRiteCorporation(the

Company).

Nevada ��Agency ��& ��Trust ��Company ��(the ��Transfer ��Agent ��or ��you) ��is ��hereby

irrevocablyauthorizedanddirectedtoissuethesharesofCommonStock(theShares)

oftheCompany �withinthree(3)businessdaysuponyourreceiptfromtheHolderofa

notice of conversion ("Conversion Notice") executed by the Holder, as well asan opinion

of �counsel, �in �form, �substance �and �scope �customary �for �opinions �of �counsel �in �comparable

transactions,accordingtowhichtheSharesarenotrestrictedsecuritiespursuanttorule

144 �under �the �Securities �Act �of �1933, �as �amended �(the �"Act"), �any �other �available

exemption under the Act, or an effective registration with the SEC.

Acopy oftheNoteisattachedhereto.TheSharestobeissuedaretoberegisteredinthe

name of the registered holder of the securities submitted for conversion or exercise.

So long as you have previously received a Conversion notice and a confirmation from the

CompanysorHolderscounselthattheShareshavebeenregisteredunderthe1933Act

or otherwise may be soldwithout any restriction, including pursuant to Rule 144,and the

numberofSharestobeissuedinanyoneconversionarelessthan9.99%ofthetotal

issued and outstanding common stock of the Company, such Shares should be transferred

via �DWAC �or, �if �DWAC �is �unavailable, �via �unrestricted �certificate(s) �issued �to �the

Holder,pursuanttotheinstructionsprovidedbytheHolderontheConversionNoticeor

as otherwise instructed by the Holder.

You ���are ���instructed ���to ���reserve ���for ���issuance ���to ���the ���Holder ���a ���minimum ���of

____________________________sharesofcommonstockoftheCompany,asmaybe

increaseduponadvicefromtheCompany(theShareReserve).TheShareReserve

shallneitheracttoincreasethenumberofSharestobeissuedpursuanttotheNotenor

shalltheShareReservearticulatedhereincreateorbedeemedtobeacaponthenumber

ofSharestobeissuedtotheHolder.Allsuchsharesshallremaininreservewiththe

TransferAgentuntiltheHolderprovidestheTransferAgentinstructionsthattheshares

oranypartofthemshallbetakenoutofreserveandshallnolongerbesubjecttothe

terms of these instructions. Until suchtimeas theHolder issuesany such instruction, and

subjecttotheownershippercentagelimitationintheprecedingparagraph,theHolder

Company ___________

Buyer ___________



Page 23 of 23

shallhavenobeneficialinterest �intheSharessoreservedandnorightsattendant �to

ownership, including, but not limited to, the right to vote, sell or hypothecate the reserved

shares.

The �Company �shall �indemnify �you �and ��your �officers, �directors, �principals, �partners,

agentsandrepresentatives,andholdeachofthemharmlessfromandagainstanyandall

loss, liability, damage, claim or expense (including the reasonable fees and disbursements

ofitsattorneys)incurredbyorassertedagainstyouoranyofthemarisingoutoforin

connection ��with ��the ��instructions ��set ��forth ��herein, ��the ��performance ��of ��your ��duties

hereunderandotherwiseinrespecthereof,including thecostsandexpensesofdefending

yourselforthemselvesagainstanyclaimorliability hereunder,exceptthattheCompany

shallnotbeliablehereunderastomattersinrespectofwhichitisdeterminedthatyou

have acted with gross negligence or in bad faith. �Transfer Agent shall have no liability to

theCompanyinrespecttoanyactiontakenoranyfailuretoactinrespectofthisifsuch

actionwastakenoromittedtobetakeningoodfaith,andyoushallbeentitledtorely in

this regard on the advice of counsel.

TheCompanyherebyrequeststhattheTransferAgentactimmediately,withoutdelay

andwithouttheneedforanyactionorconfirmationbytheCompanywithrespecttothe

issuance ��of ��Common ��Stock ��pursuant ��to ��any �Conversion ��Notices ��received ��from ��the

Holder.TransferAgentwillnotdelay inprocessing aduly validConversionNotice from

the Holder.

TheCompanyagreesthatintheeventthattheTransferAgentresignsastheCompanys

transferagent,theCompanyshallengageasuitablereplacementtransferagentthatwill

agree �to �serve ��as �transfer ��agent �for �the ��Company �and �be �bound �by �the �terms ��and

conditionsoftheseIrrevocableInstructionswithinfive(5)businessdays,andthatthe

obligations, ���indemnifications ���and ���representations ���contained ���in ���these ���irrevocable

instructionswillassigntoeachandevery replacementtransferagent,withoutany further

action by the Company.

The Holderisintendedtobeandisa third-party beneficiarieshereof,andnoamendment

ormodificationtotheinstructionssetforthhereinmaybemadewithouttheconsentof

the Holder.

SIGNED by: ____________________

Accepted and Agreed

Siganture: _____________________

By: ___________________

for and on behalf of:

Signature: _________________

MineralRite Corporation

Nevada Agency & Transfer

Company

Company ___________

Buyer ___________



Page 1 of 21

EXHIBIT A

CONVERTIBLE PROMISSORY NOTE

NEITHERTHEISSUANCEANDSALEOFTHESECURITIESREPRESENTEDBYTHIS

CERTIFICATE ���NOR ���THE ���SECURITIES ���INTO ���WHICH ���THESE ���SECURITIES ���ARE

CONVERTIBLEHAVEBEENREGISTEREDUNDERTHESECURITIESACTOF �1933,

AS ��AMENDED, ��OR ��APPLICABLE ��STATE ��SECURITIES ��LAWS. ��THE ��SECURITIES

MAYNOT �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

OPINIONOFCOUNSEL(WHICHCOUNSELSHALLBESELECTEDBYTIIEHOLDER),

INAGENERALLYACCEPTABLEFORM,THATREGISTRATIONISNOTREQUIRED

UNDER SAID ACT OR(11)UNLESS SOLDP U R S U A N T �T O ��R U L E ��1 4 4 ��O R ��R U L E

1 4 4 A �U N D E R ��S A I D �A C T. ��NOTWITHSTANDING THE FOREGOING, THE SECURITIES

MAYBE �PLEDGED �IN �CONNECTION ��WITH �A �BONA �FIDE ��MARGIN �ACCOUNT ��OR

OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

Issue Date: �January __, 2015

Principal Amount: �$77,778.00

Original Issue Discount: �10%

Interest Rate: �6% per annum

Maturity Date: �January __, 2016

CONVERTIBLE PROMISSORY NOTE

FOR VALUERECEIVED,MineralRiteCorporation,aNevadacorporation(hereinaftercalledthe

"Borrower"), ��hereby �promises ��to ��pay �to ��the ��order ��of ��River ��North ��Equity ��Inc., ��an ��Illinois

corporation,oritsregisteredassigns(the"Holder")thesumof$77,778.00togetherwithany

interestassetforthherein,onJanuary __,2016(the"MaturityDate"),andtopay interestonthe

unpaidprincipalbalancehereofattherateofsixpercent(6%)perannum(the"InterestRate")

fromthedatehereof(the"IssueDate")untilthesamebecomesdueandpayable,whetheratthe

Maturity Dateoruponacceleration or by prepaymentorotherwise.ThisNotemaynotbeprepaid

inwholeorinpartexceptasotherwiseexplicitlysetforthherein.Anyamountofprincipalor

interest on this Note, whichisnot paidwhen due, shallbearinterestattherateofsixteenpercent

(16%)perannumfromtheduedatethereofuntilthesameispaid("DefaultInterest")andshall

besubjecttoapartialpenaltyattherateoffivepercent(5%)ontheoutstandingprincipaland

accrued interest under this Note ("Partial Penalty Payment").Interest shall commence accruing

onthedatethattheNoteisfully paidby theHolderandshallbecomputedonthebasisofa 365-

dayyearandtheactualnumberofdayselapsed.Allpaymentsduehereunder(totheextentnot

converted into common stock, $0.001 par value per share (the "Common Stock")) in accordance

with �the �terms �hereof �shall �be �made �in �lawful �moneyof �the �United �States �ofAmerica.All

paymentsshallbemadeatsuchaddress,asHoldershallhereaftergivetoBorrowerbywritten

notice made in accordance with the provisions of this Note. Whenever any amount expressed to be

due by the terms of this Note is due on any day which is not a business day, the same shall instead

Borrower _______________

Holder _______________



Page 2 of 21

be due on the next succeeding day which is a business day and in the case of any interest payment

date which is not the date on whichthisNoteispaidinfull,theextensionofthedue date thereof

shallnotbetakenintoaccountforpurposesofdeterminingtheamountofinterestdueonsuch

date.AsusedinthisNote,theterm"businessday"shallmeananydayotherthanaSaturday,

SundayoradayonwhichcommercialbanksinthecityofNew York,New Yorkareauthorized

orrequiredbylaworexecutiveordertoremainclosed.Eachcapitalizedtermusedherein,and

nototherwisedefined,shallhavethemeaningascribedtheretointhatcertainConvertibleNote

PurchaseAgreementdatedthedatehereof,byandbetweenBorrowerandHolder,pursuantto

which thisNote was originally issued(the"Purchase Agreement").

ThisNoteisfreefromalltaxes,liens,claimsandencumbranceswithrespecttotheissuethereof

and shall not be subject to preemptive rights or other similar rights of shareholders of Borrower and

will not impose personal liability upon Holder thereof.

The following terms shall apply to this Note:

ARTICLE I. CONVERSION RIGHTS

1.1ConversionRight.180 days after the Issue Date and until this Note is no longer outstanding,

this �Note �shall �be �convertible, �in �whole �or �in �part, �into �shares �of �Common �Stock �(as �such

CommonStockexistsontheIssueDate,oranysharesofcapitalstockorothersecuritiesof

BorrowerintowhichsuchCommonStockshallhereafterbechangedorreclassified)atthe

option ��of ��the ��Holder, ��at ��any ��time ��and ��from ��time ��to ��time, ��at ��the ��conversion ��price ��(the

"Conversion ��Price") ��determined ��as ���provided ���herein ���(a ���"Conversion"); ���provided,

however, �that �in �no �event �shall �Holder �be �entitledtoconvertanyportionofthisNotein

excessofthatportionofthisNoteuponconversionofwhichthesumof(1)thenumberof

sharesofCommonStockbeneficiallyownedbyHolderand its affiliates (other thansharesof

Common ��Stock ��which �may �be ��deemed ��beneficially �owned ��through ��the ��ownership ��of ��the

unconverted �portion �of �the �Notes �or �the �un-exercised �or �unconverted �portion �or �any �other

security �of ��Borrower ��subject �to ��a �limitation ��on �conversion ��or ��exercise ��analogous ��to ��the

limitationscontainedherein)and(2)thenumberofsharesofCommonStockissuableupon

theconversionoftheportionofthisNotewithrespecttowhich �thedetermination �of �this

provisoisbeingmade,wouldresultinbeneficialownershipbyHolderanditsaffiliatesof

morethan9.99%oftheoutstandingsharesofCommonStock.Forpurposesoftheprovisoto

theimmediatelyprecedingsentence,beneficialownershipshallbedeterminedinaccordance

withSection13(d)oftheSecuritiesExchangeActof1934,asamended �(the"Exchange

Act"), �and �Regulations �13D �thereunder, �except �as �otherwise ��provided �in �clause �(1) �of

suchproviso,provided,further,howeverthatthelimitationsonconversionmaybewaived

byHolderupon,attheelectionofHolder,notlessthan61days'priornoticetoBorrower,and

theprovisionsoftheconversionlimitationshallcontinuetoapplyuntilsuch61stday(orsuch

laterdate,asdeterminedbyHolder,asmaybespecifiedinsuchnoticeofwaiver).Should

Borrowerfailtoeliminateanyprohibitionsunderapplicablelawortherulesorregulationsof

anystockexchange,inter-dealerquotationsystemorotherself-regulatoryorganizationwith

jurisdiction �over �Borrower �or �anyof �its �securities �on �Borrower's �ability �to �issueshares �of

Common Stock, in lieu of any right to convert this Note as described in this Section 1.1, this will be

considered an Event of Default under Section 3.2 of the Note.

Borrower _______________

Holder _______________



Page 3 of 21

ThenumberofsharesofCommonStocktobeissueduponeachconversionofthisNoteshall

be �determined �by �dividing �the �ConversionAmount �(as �defined ��below) �by �the �applicable

ConversionPricethenineffectonthedatespecifiedinthenoticeofconversion,intheform

attachedheretoasExhibitC(the"ConversionNotice"),deliveredtoBorrowerbyHolderin

accordance �with �Section �1.4 �below; �provided �that �the ��Conversion �Notice �is �submitted �by

facsimile �or �e-mail �(or �by �other �means �resulting �in, �or �reasonably ��expected �to �result �in,

notice)toBorrowerbefore6:00pmNewYork,NewYorktimeonsuchconversiondate(the

"ConversionDate").ThetermConversion Amount"means,withrespecttoanyconversion

of �this �Note, �the �sum �of �(1) �the �principal �amount �of �this �Note �to �be �converted �in �such

conversionplus(2)atBorrower'soption,accruedandunpaidinterest,ifany,onsuchprincipal

amount ��at ��the ��interest ��rates ��provided ��in ��this ��Note ��to ��the ��Conversion ��Date, ��plus ��(3) ��at

Borrower's ��option, ��Default ��Interest ��and ��Partial �Penalty �Payment, ��if ��any, ��on ��the �amounts

referredtointheimmediatelyprecedingclauses(1)and/or(2)plus(3)atHolder'soption,any

amounts owedto Holder pursuant to Sections 1.3 and 1.4(g) hereof.

1.2 Conversion Price

1.2(a) �CalculationofConversionPrice: ���The �Conversion �Price �shall �equal

the VariableConversionPrice(asdefinedherein)(subjecttoequitableadjustmentsfor

stocksplits,stockdividendsorrightsofferingsbyBorrowerrelatingtoBorrower's

securities ���or ���the ���securities ���of ���any ���subsidiary ���of ���Borrower, ���combinations,

recapitalization,reclassifications,extraordinary distributionsandsimilarevents). Asused

in this Agreement, the"Variable ConversionPrice"shall mean50% multiplied by the

Formula �Price �(representing �a �discount ��rate �of ��50%). �The �term ��"Formula ��Price"

meansthe lower of: (i) theMarket Price (as defined herein); and (ii) theclosing bid price

ontheConversionDate,subjecttoadjustmentforreverseandforwardstocksplits,stock

dividends,stockcombinationsandothersimilartransactionsoftheCommonStockthat

occurafterthedatehereof. �MarketPricemeanstheaverage �TradingPriceofthe

CommonStockduring the10Trading Daysimmediately preceding theConversionDate.

"TradingPrice"means,foranysecurityasofanydate,theclosingbidpriceonthe

OTC ��Pink, ��or ��other ��applicable ��Trading ��Market ��(as ��such ��term ��is ��defined ��in ��the

ConvertibleNotePurchaseAgreementdatedJanuary__,2015pursuanttowhichthis

Noteisissued(the"Purchase Agreement")),asreportedby areliablereportingservice

designatedbyHolder(e.g.BloombergLP),orifnoclosingbidpriceofsuchsecurityis

availableinanyoftheforegoingmanners,theaverageoftheclosingbidpricesofany

marketmakersforsuch �securitythatarelistedontheOTCMarkets.IftheTrading

Price cannotbe calculatedfor suchsecurityon such date in the manner provided above,

the Trading Price shall be the fair marketvalue asmutually determined by Borrower and

HoldersofamajorityininterestoftheNotesbeingconvertedforwhichthecalculation

oftheTradingPriceisrequiredinordertodeterminetheConversionPriceofsuch

Notes."TradingDay"shallmeananydayonwhichtheCommonStockistradable

foranyperiodontheOTCPink,oranyotherTradingMarketonwhichtheCommon

Stock is then being traded.

1.2(b)

Conversion ��Price ��During ��Major ��Announcements: ��Notwithstanding

Borrower _______________

Holder _______________



Page 4 of 21

anythingcontainedinSection1.2(a)tothecontrary,intheevent �Borrower(i)makesa

publicannouncementthatitintendstoconsolidateormergewithanyothercorporation

(otherthanamergerinwhichBorroweristhesurvivingorcontinuingcorporationandits

capitalstockisunchanged) �or �sellortransfer �allorsubstantiallyall �ofthe �assetsof

Borroweror(ii)anyperson,grouporentity(includingBorrower)publiclyannouncesa

tenderoffer topurchase50% or more of Borrower's Common Stock (or any other takeover

scheme)(thedateofthe �announcement �referred �to �in �clause �(i) �or �(ii) �is �hereinafter

referred �to �as �the �"Announcement �Date"),then �theConversion �Priceshall, �effective

upontheAnnouncementDateandcontinuingthrough �theAdjusted �Conversion �Price

TerminationDate(asdefinedbelow),beequaltothelowerof(x)theConversionPrice

which would have been applicable for a Conversion occurringon the Announcement Date

and �(y) �the �Conversion �Price �that �would �otherwise �be �in �effect. �From �and ��after �the

AdjustedConversionPriceTerminationDate,theConversionPriceshallbedetermined

as �set �forth �in �this �Section �1.2(b). �For �purposes �hereof, �"Adjusted �Conversion �Price

Termination �Date" �shall �mean, �with �respect �to �any �proposed �transaction �or �tender

offer(ortakeoverscheme)forwhichapublicannouncementascontemplatedbythis

Section1.2(b)hasbeenmade,thedateuponwhichBorrower(inthecaseofclause(i)

above)ortheperson,grouporentity(inthecaseofclause(ii)above)consummatesor

publicly �announces �the ��termination �or �abandonment �of �the �proposed �transaction �or

tenderofferortakeoverscheme)which caused this Section 1.2(b) to become operative.

1.3 ��Authorized ��Shares. ��Borrower ��covenants ��that ��during ��the ��period ��the ��conversion ��right

exists, �Borrowerwill �reservefromitsauthorizedandunissuedCommon �Stockasufficient

number of shares, free from preemptive rights, toprovide for the issuance of Common Stockfor

theentireprincipalamountofthisNote,plusallaccruedandunpaidinterestthereon,plusany

liquidated ��damages ��as ��per ��Section ��1.4(g) ��below ��(the ��"Reserved ��Amount"). ��Borrower

representsthatuponissuance,suchshareswillbe duly andvalidlyissued,fullypaidandnon-

assessable. �In �addition, �if �Borrower �shall �issue �any �securities �or �make �anychange �to �its

capitalstructurewhichwouldchangethenumberofsharesofCommonStockintowhichthe

Notes shall be convertible at the then current Conversion Price,Borrowershallatthesame time

make �proper �provision �so �that �thereafter �there �shall �be �a �sufficient �number �of �shares �of

CommonStockauthorizedandreserved,freefrompreemptiverights,forconversionofthe

outstandingNotes. �Borrower �(i)acknowledgesthatithas �irrevocablyinstructeditstransfer

agenttoissuecertificatesfor theCommonStockissuable uponconversionofthisNote,and(ii)

agreesthatitsissuanceofthisNoteshallconstitutefullauthoritytoitsofficersandagentswho

arechargedwiththedutyofexecutingstockcertificatestoexecuteandissuethenecessary

certificatesforsharesofCommonStockinaccordancewiththetermsandconditionsofthis

Note. ��If, at any timeBorrowerdoes not maintain the Reserved Amount it will beconsidered an

Event of Default under Section 3.2 of the Note.

1.4 Method of Conversion.

(a) ����MechanicsofConversion.SubjecttoSection1.1,thisNotemaybeconvertedbyHolder

inwholeorinpartatanytimefromtime totimeaftertheIssue Date,by(a)submittingto

Borrower a ConversionNotice by facsimile (with receipt confirmationfromrecipient),e-

mailorotherreasonablemeansofcommunicationdispatchedontheConversionDate

Borrower _______________

Holder _______________



Page 5 of 21

priorto6:00p.m.,EasternStandardTimeand(b)subjecttoSection1.4(b), surrendering

this Note at the principal office ofBorrower.

(b) ����Surrender �of �Note �Upon �Conversion. �Notwithstanding �anything �to �the �contraryset �forth

herein, upon conversion of this Note in accordance with the terms hereof,Holder shall not be

requiredtophysicallysurrenderthisNotetoBorrowerunlesstheentireunpaidprincipal

amountofthisNoteissoconverted.HolderandBorrowershallmaintain records showing

theprincipalamountsoconvertedandthedatesofsuchconversionsorshallusesuchother

method, ��reasonably �satisfactory �to ��Holder ��and �Borrower, ��so ��as ��not ��to ��require �physical

surrender of thisNoteuponeachsuchconversion.in theeventofany dispute ordiscrepancy,

such records of Borrower shall, prima-facie, be controlling and determinative in the absence

of manifest error. Notwithstanding the foregoing, if any portion of this Note isconverted as

aforesaid,HoldermaynottransferthisNoteunlessHolderfirstphysicallysurrendersthis

NotetoBorrower,whereuponBorrowerwillforthwithissueanddeliverupontheorderof

HolderanewNoteofliketenor,registeredtoHolder(uponpaymentbyHolder �of �any

applicabletransfertaxes)representingintheaggregatethe �remainingunpaidprincipal

amountofthisNote.Holderandanyassigneewhoisan"accreditedinvestor"asdefined

under Rule501(a), by acceptance of thisNote,acknowledge andagree that, by reason of the

provisionsofthisparagraph,followingconversionofaportionofthisNote,theunpaidand

unconvertedprincipalamountofthisNoterepresentedbythisNotemaybelessthanthe

amount stated on the face hereof.

(c) ����PaymentofTaxes.Borrowershallnotberequiredtopayanytaxwhichmaybepayablein

respectofanytransferinvolvedintheissueanddeliveryofsharesofCommonStockor

othersecuritiesorpropertyonconversionofthisNoteinanameotherthanthatofHolder

(or in street name), and Borrower shall not be required to issue or deliver any such shares or

othersecuritiesorproperty unlessanduntilthepersonorpersons(other thanHolderorthe

custodianinwhosestreetnamesuchsharesaretobeheldforHolder'saccount)requesting

theissuancethereofshallhavepaidtoBorrowertheamountofanysuchtaxorshallhave

established to the satisfaction of Borrower that such tax has been paid.

(d) ����Delivery ofCommonStockuponConversion.UponreceiptbyBorrowerfromHolderofa

facsimile ��transmission ��(with ��receipt ��confirmation ��from ��recipient) ��or ��e-mail ��(or ��other

reasonablemeansofcommunication)ofaConversionNoticemeetingtherequirementsfor

conversionasprovidedinthisSection1.4,Borrowershallissueanddeliverorcausetobe

issuedanddeliveredtoorupontheorderofHoldercertificatesfortheCommonStock

issuableuponsuchconversionwithintwo(2)businessdaysaftersuchreceipt(butinno

event ��later ��than ��the ��fourth ��(4th) ��business ��day ��being ��hereinafter ��referred ��to ��as ��the

"Deadline")(and,solelyinthecaseofconversionoftheentireunpaidprincipalamount

hereof, �surrender �of �this �Note) �in �accordance �with �the �terms �hereof �and �the �Purchase

Agreement.

(e) ����Obligation ��of ��Borrower ��to ��Deliver ��Common ��Stock. ��Upon ��receipt ��by ��Borrower ��of ��a

ConversionNotice,HoldershallbedeemedtobeHolderofrecordoftheCommonStock

issuable ��upon ��such ��conversion, ��the ��outstanding ��principal ��amount ��and ��the ��amount ��of

accruedandunpaidinterestonthisNoteshallbereducedtoreflectsuchconversion,and,

Borrower _______________

Holder _______________



Page 6 of 21

unlessBorrowerdefaults onitsobligationsunder this ArticleI,allrightswithrespect to the

portionofthisNotebeingsoconvertedshallforthwithterminateexceptthe righttoreceive

theCommonStockorothersecurities,cashorotherassets,ashereinprovided,onsuch

conversion. ��If ��Holder ��shall ��have ��given ��a ��Conversion ��Notice ��as ��provided ��herein,

Borrower'sobligationtoissueanddeliverthecertificatesforCommonStockshallbe

absolute �and �unconditional, �irrespective �of �the �absence �of �any �action �by ��Holder �to

enforcethesame,any �waiver �or �consent �with �respect �to �anyprovision �thereof, �the

recoveryofanyjudgmentagainstanypersonoranyactiontoenforcethesame,any

failureordelayintheenforcementofanyotherobligationofBorrowertoHolderof

record, ��or ��any ��setoff; ��counterclaim, ��recoupment, ��limitation ��or ��termination, ��or ��any

breachorallegedbreachbyHolderofanyobligationtoBorrower,andirrespectiveof

any �other �circumstance �which �might �otherwise ��hint �such �obligation �of �Borrower �to

Holder ��in ��connection ��with ��such ��conversion. ��The ��Conversion ��Date ��specified ��in ��the

ConversionNoticeshallbetheConversionDatesolongastheConversion �Noticeis

received by Borrowerbefore 6:00p.m.,EasternStandard Time, on such date.

(f) ����Deliveryof �Common �Stock �byElectronic �Transfer. ��In �lieu �of �deliveringphysical

certificates ��representing ��the ��Common ��Stock ��issuable ��upon ��conversion, ��provided

Borrower ���is ���participating ���in ���the ���Depository ���Trust ���Company ���( "DTC") ���Fast

Automated ��Securities ��Transfer ���("FAST") ��program, ���upon ���request ��of ���Holder,

Borrowershalluseitsbesteffortstocauseitstransferagenttoelectronicallytransmitthe

CommonStockissuableuponconversiontoHolderbycreditingtheaccountofHolder's

PrimeBrokerwithDTCthroughitsDepositWithdrawal AgentCommission("DWAC")

system.

(g) ����Failure ��to ��Deliver ��Common ��Stock ��Prior ��to ��Deadline; ��Partial ��Liquidated ��Damages.

WithoutinanywaylimitingHolder'srighttopursueotherremedies,includingactual

damagesand/orequitablerelief,thepartiesagreethatifdeliveryoftheCommonStock

issuableuponconversionofthisNoteisnotdeliveredbytheDeadline,Borrowershall

paytoHolder$500perdayincash,foreachdaybeyondtheDeadlinethatBorrower

failstodeliversuchCommonStock.SuchcashamountshallbepaidtoHolderonthe

businessdayimmediatelyfollowingdeliveryoftheCommonStockor,attheoptionof

Holder(bywrittennoticetoBorrower),shallbeaddedtotheprincipalamountofthis

Note,inwhicheventinterestshallaccruethereoninaccordancewiththetermsofthis

NoteandsuchadditionalprincipalamountshallbeconvertibleintoCommonStockin

accordancewiththetermsofthisNote.Borroweragreesthattherighttoconvertisa

valuablerighttoHolder.Thedamagesresultingfromafailure,attempttofrustrate �or

interference ��with ��such ��conversion ��right ��are ��difficult ��if ��not ��impossible ��to ��qualify.

Accordingly, �the �parties �acknowledge �that �the �partial �liquidated �damages �provision

contained in this Section 1.4(g) are justified.

1.5ConcerningtheShares.BuyerunderstandsthattheNote,anduntilsuchtimeasthe

ConversionShareshavebecomeeligiblefortransferpursuanttoanyofthealternatives

specifiedinSection2(f)ofthePurchaseAgreement,theConversionSharesmaybeara

restrictive legend in substantially the following form:

Borrower _______________

Holder _______________



Page 7 of 21

" N E I T H E R ���T H E ���I S S U A N C E ���A N D ���S A L E ���O F ���T H E ���S E C U R I T I E S

REPRESENTED ��BY ��THIS ��CERTIFICATE ��NOR ��THE ��SECURITIES ��INTO

W H I C H ���T H E S E ���S E C U R I T I E S ���A R E ���E X E R C I S A B L E ���H AV E ���B E E N

REGISTEREDUNDERTHESECURITIESACTOF1933,ASAMENDED,OR

APPLICABLE �STATE �SECURITIES �LAWS.THE �SECURITIES �MAYNOTBE

OFFERED �FOR �SALE, �SOLD, �TRANSFERRED �ORASSIGNED �(I) �IN �THE

ABSENCEOF(A)ANEFFECTIVE �REGISTRATIONSTATEMENTFORTHE

SECURITIESUNDERTHESECURITIESACTOF1933,ASAMENDED,OR(B)

ANOPINIONOFCOUNSEL(WHICHCOUNSELSHALLBESELECTEDBY

H O L D E R ) , �����I N �����A �����GE N E R A L LY ����A C C E PTA B L E �����F O R M , �����T H AT

REGISTRATION �IS �NOT �REQUIRED �UNDER �SAID �ACT �OR ��(II) �UNLESS

SOLD ��PURSUANT ��TO ��RULE ��144 ��OR ��RULE ��144A ��UNDER ��SAID ��ACT,

NOTWITHSTANDING ��THE ��FOREGOING, ��THE ��SECURITIES ��MAY ��BE

PLEDGEDINCONNECTIONWITHABONAFIDEMARGINACCOUNTOR

OTHER ��LOAN ��OR ��FINANCING ��ARRANGEMENT ��SECURED ��BY ��THE

SECURITIES."

ThelegendsetforthaboveshallberemovedfromaSecuritywhichsatisfiedanyofthe

alternatives �specified �in �Section �2(f) �of �the �Purchase �Agreement �and �Companyshall

causeitsTransferAgenttoissueacertificate(s)withoutsuchlegenduponrequestbyits

holder.IntheabsenceofaregistrationstatementcoveringtheSecurity,suchholdershall

provideanopinionofcounsel,totheeffectthatapublicsaleortransferofsuchSecurity

maybemadewithoutregistrationunderthe1933Act. ��IntheeventthatCompanydoes

not ��accept ��the ��opinion ��of ��counsel ��provided ��by ��Buyer ��by ��the ��Deadline, ��it ��will ��be

considered an Event of Default pursuant to Section 3.2 of the Note.

1.6 Effect of Certain Events.

(a) ����EffectofMerger,Consolidation,Etc.AttheoptionofHolder,thesale,conveyanceor

disposition �of �all �or �substantially �all �of �the �assets �of ��Borrower, �the �effectuation �by

Borrowerofatransactionorseriesofrelatedtransactionsinwhichmorethan50%ofthe

votingpowerofBorrowerisdisposedof,ortheconsolidation,mergerorotherbusiness

combinationofBorrowerwithorintoanyotherPerson(asdefinedbelow)orPersons

whenBorrowerisnotthesurvivorshalleither:(i)bedeemedtobeanEventofDefault

(asdefinedinArticleIII)pursuanttowhichBorrowershallberequiredtopaytoHolder

upontheconsummationofandasaconditiontosuchtransactionanamountequaltothe

DefaultAmount(asdefinedinArticleIII)or(ii)betreatedpursuanttoSection1.6(b)

hereof."Person"shallmeananyindividual,corporation,limitedliabilitycompany,

partnership,association, trust or other entity or organization

(b) ����AdjustmentDuetoMerger,Consolidation,Etc.If,atanytimewhenthisNoteisissued

andoutstandingandpriortoconversionofalloftheNotes,thereshallbeanymerger,

consolidation, ��exchange ��of ��shares, ��recapitalization, ��reorganization, ��or ��other ��similar

event,asaresultofwhichsharesofCommonStockofBorrowershallbechangedinto

thesameoradifferentnumberofsharesofanotherclassorclassesofstockor securities

Borrower _______________

Holder _______________



Page 8 of 21

ofBorroweroranotherentity,orincaseofanysaleorconveyanceofallorsubstantially

all ��of ��the ��assets ��of ��Borrower ��other ��than ��in ��connection ��with ��a ��plan ��of ��complete

liquidation �of ��Borrower, �then �Holder �of �this �Note �shall �thereafter �have �the �right �to

receiveuponconversionofthisNote,uponthebasisanduponthetermsandconditions

specifiedhereinandinlieuoftheshares �ofCommon �Stock �immediatelytheretofore

issuableuponconversion,suchstock,securities or assets whichHolder would have been

entitledtoreceiveinsuchtransactionhadthisNotebeenconvertedinfullimmediately

prior ��to ��such ��transaction ��(without ��regard ��to ��any ��limitations ��on ��conversion ��set ��forth

herein),andinanysuchcaseappropriateprovisionsshallbemadewithrespecttothe

rights ��and ��interests ��of ��Holder ��of ��this ��Note ��to ��the ��end ��that ��the ��provisions ��hereof

(including,withoutlimitation,provisionsforadjustmentoftheConver sionPriceandof

the ��number ��of ��shares ��issuable ��upon ��conversion ��of ��the ��Note) ��shall ��thereafter ��be

applicable, ��as ��nearly ��as ��may ��be ��practicable ��in ��relation ��to ��any ��securities ��or ��assets

thereafter ��deliverable ��upon ��the ��conversion ��hereof. ��Borrower ��shall ��not ��affect ��any

transaction ��described ��in ��this ��Section ��1.6(b) ��unless ��(a) ��it ��first ��gives, ��to ��the ��extent

practicable,thirty(30)dayspriorwrittennotice(butinanyeventatleastfifteen(15)

dayspriorwrittennotice)oftherecorddateofthespecialmeetingofshareholdersto

approve, ��or ��if ��there �is ��no ��such ��record ��date, ��the ��consummation ��of, ��such ��merger,

consolidation, �exchange �of �shares, �recapitalization, ��reorganizationorothersimilar

eventorsaleofassets(duringwhichtimeHoldershallbeentitledtoconvertthisNote)

and(b)theresultingsuccessororacquiringentity(ifnotBorrower)assumesbywritten

instrumenttheobligationsofthisSection1.6(b).Theabove �provisionsshallsimilarly

apply to successive consolidations, mergers, sales, transfers or share exchanges.

(c) ����AdjustmentduetoDistribution.IfBorrowershalldeclareormakeanydistributionofits

assets(orrightstoacquireitsassets)toholdersofCommonStockasadividend,stock

repurchase,by way ofreturnofcapitalorotherwise(including any dividendordistributionto

Borrower'sshareholdersincashorshares(orrightstoacquireshares)ofcapitalstockofa

subsidiary(i.e.,aspin-off))(a"Distribution"),thenHolderofthisNoteshallbeentitled,

upon any conversion of this Note after the date of record for determining shareholders entitled

tosuchDistribution,toreceivetheamountofsuchassetswhichwouldhavebeenpayableto

HolderwithrespecttothesharesofCommonStockissuableuponsuchconversionhadsuch

HolderbeenHolderofsuchsharesofCommon Stockontherecorddatefor thedetermination

of shareholders entitled to such Distribution.

(d) ����Adjustment ��due ��to ��Dilutive ��Issuance. ��If, ��at ��any ��time ��when ��any ��Notes ��are ��issued ��and

outstanding, Borrower issues or sells more than 5% of its then outstanding common shares, or

inaccordancewiththisSection1.6(d)hereofisdeemedtohaveissuedorsold, any shares of

CommonStockfornoconsiderationorforaconsiderationpershare(before �deductionof

reasonableexpensesorcommissionsorunderwritingdiscountsorallowancesinconnection

therewith)lessthantheConversionPriceineffectonthedateofsuchissuance(ordeemed

issuance) ofsuch shares ofCommon Stock (a"Dilutive Issuance"), then immediately,upon

the ��Dilutive ��Issuance, ��the ��Conversion ��Price ��will ��be ��reduced ��to ��the ��amount ��of ��the

considerationpersharereceivedbyBorrowerinsuchDilutiveIssuance. ��Borrowershallbe

deemed to have issued or sold shares of Common Stock if Borrower in any manner issuesor

grantsanywarrants,rightsoroptions(notincludingemployeestockoptionplans),whether

Borrower _______________

Holder _______________



Page 9 of 21

or �not �immediatelyexercisable, �to �subscribe �for �ortopurchaseCommonStockorother

securitiesconvertibleintoorexchangeableforCommonStock("ConvertibleSecurities")

(suchwarrants,rightsandoptionstopurchaseCommonStockorConvertibleSecuritiesare

hereinafterreferredtoas"Options")andthepricepershareforwhichCommonStockis

issuableupontheexerciseofsuchOptionsislessthantheConversionPricethenineffect,

then �the �Conversion �Price �shall �be �equal �to �such �price �per �share. �For �purposesofthe

precedingsentence,the"pricepershareforwhichCommonStockisissuable �uponthe

exerciseofsuchOptions"isdeterminedby dividing(i)thetotalamount,ifany,received or

receivableby BorrowerasconsiderationfortheissuanceorgrantingofallsuchOptions,plus

theminimumaggregateamountofadditionalconsideration,ifany,payabletoBorrowerupon

the exercise of all such Options, plus, in the case of Convertible Securities issuable upon the

exercise ��of ��such ��Options, ��the ��minimum ��aggregate ��amount ��of ��additional ��consideration

payableupon theconversion or exchange thereof at the time such Convertible Securities first

become convertible or exchangeable, by (ii) the maximum total number of shares of Common

Stockissuableupon theexerciseofallsuchOptions(assuming fullconversionofConvertible

Securities,ifapplicable).NofurtheradjustmenttotheConversionPricewillbemade upon

theactualissuanceofsuchCommonStockupontheexerciseofsuchOptionsoruponthe

conversion or exchange of Convertible Securities issuable upon exercise of such Options.

Additionally,Borrower shall be deemed to have issued or sold sharesof Common Stock if

Borrower ��in ��any �manner ��issues ��or �sells ��any �Convertible �Securities, ��whether ��or ��not

immediatelyconvertible(otherthanwherethesameareissuableuponthe �exerciseof

Options), ��and ��the ��price ��per ��share ��for ��which ��Common ��Stock ��is ��issuable ��upon ��such

conversion ��or ��exchange ��is ��less ��than ��the ��Conversion ��Price ��then ��in ��effect, ��then ��the

Conversion �Price �shall �be �equal �to �such ��price �per �share. ����For �the �purposes �of �the

precedingsentence,the"pricepershareforwhichCommonStockisissuableuponsuch

conversionorexchange" isdetermined by dividing (i) the total amount, if any, received or

receivablebyBorrowerasconsiderationfortheissuanceorsaleofallsuchConvertible

Securities, �plus �the �minimum �aggregate �amount �of �additional �consideration, �if �an y,

payable ��to ��Borrower ��upon ��the ��conversion ��or ��exchange ��thereof ��at ��the ��time ��such

ConvertibleSecuritiesfirstbecomeconvertibleorexchangeable,by(ii)themaximum

totalnumberofsharesofCommonStockissuableupontheconversionorexchangeof

allsuchConvertibleSecurities.Nofurtheradjustmenttothe �ConversionPricewillbe

madeupontheactualissuanceofsuchCommonStockuponconversionorexchangeof

such Convertible Securities.

(e) ����PurchaseRights.If,atanytimewhenanyNotesareissuedan doutstanding,Borrower

issuesanyconvertiblesecuritiesorrightstopurchasestock,warrants,securitiesorother

property(the"PurchaseRights")proratatotherecordholdersofanyclassofCommon

Stock,thenHolderofthisNotewillbeentitledtoacquire,uponthetermsapplicable

tosuchPurchaseRights,theaggregatePurchaseRightswhichsuchHoldercouldhave

acquiredifsuchHolderhadheldthenumberofsharesofCommonStockacquirable

uponcompleteconversionofthisNote(withoutregardtoanylimitationsonconversion

containedherein)immediatelybeforethedateonwhicharecordistakenforthegrant,

issuanceorsaleofsuchPurchaseRightsor,ifnosuchrecordistaken,thedateasof

whichtherecordholdersofCommonStockaretobedeterminedforthegrant,issueor

sale of such Purchase Rights.

Borrower _______________

Holder _______________



Page 10 of 21

(f) �����NoticeofAdjustments.Upontheoccurrenceofeachadjustmentorreadjustmentofthe

ConversionPriceasaresultoftheeventsdescribedinthisSection1.6,Borrower,atits

expense, ��shall ��promptly ��compute �such ��adjustment ��or ��readjustment ��and ��prepare ��and

furnishtoHolderacertificatesettingforthsuchadjustmentorreadjustmentandshowing

indetailthefactsuponwhichsuchadjustmentorreadjustmentisbased.Borrowershall,

uponthewrittenrequestatanytimeofHolder,furnishtosuchHolderalikecertificate

settingforth(i)suchadjustmentorreadjustment,(ii)theConversionPriceatthetimein

effectand(iii)thenumberofsharesofCommonStockandtheamount,ifany,ofother

securities orproperty which at the time would be received upon conversion of the Note.

1.7StatusasShareholder.UponsubmissionofaConversionNoticebyaHolder,(i)theshares

covered thereby (provided the Reserved Amount fully covers the dollar amount being converted and

thatsuchsharesmeettheconditionssetforthinSection1.1above)shallbedeemedconverted into

sharesof CommonStockand(ii)Holder'srightsasaHolderofsuchconvertedportionofthisNote

shall cease and terminate, excepting only the right to receive certificates (or electronic transmissions

intoHolder'sbrokeraccount)forsuchsharesofCommonStockandtoanyremediesprovided

hereinorotherwiseavailableatlaworinequity tosuchholderbecause ofafailureby Borrowerto

complywiththetermsofthisNote.Notwithstandingtheforegoing,ifaHolderhasnotreceived

certificates(ortransferintheformofelectronictransmissionintoHolder'sbrokeraccount)forall

sharesofCommonStockpriortothetenth(10th)businessdayaftertheexpirationoftheDeadline

with �respect �to �a �conversion �of �anyportion �ofthis �Note �for �anyreason, �then �(unless �Holder

otherwiseelectstoretainitsstatusasaholderof Common Stock by so notifyingBorrower)Holder

shall regain the rights of a Holder of this Note with respect to such unconverted portions of this Note

and Borrower shall, as soon aspracticable,returnsuchunconvertedNote toHolderor,iftheNote

hasnotbeensurrendered,adjustitsrecordstoreflectthatsuchportionofthisNotehasnotbeen

converted.Inall �cases, �Holder �shall �retain �all �of �its �rights �and �remedies �(including, �without

limitationtherighttoreceiveliquidateddamagespursuanttoSection1.4(g),totheextentrequired

thereby, for Borrower's failure to convert this Note.

1.8PrepaymentNotwithstandinganythingtothecontrarycontainedinthisNote,solongas

BorrowerhasnotreceivedaConversionNoticefromHolder,thenatanytimeduringtheperiod

beginningontheIssueDate,Borrowershallhavetheright,exercisableonnotlessthanthree

(3)TradingDayspriorwrittennoticeto �HolderoftheNotetoprepaytheoutstandingNote

(principal �and �accrued �interest), �in �full, �in �accordance �with �this �Section �1.9. �Anynotice �of

prepaymenthereunder(an"OptionalPrepaymentNotice")shallbedeliveredtoHolderofthe

Note at its registered addresses by facsimile (with receipt confirmation by recipient) or email and

shall �state: �(i) �that �Borrower �is �exercisingits �right �to �prepaythe �Note, �and �(ii) �the �date �of

prepaymentwhichshallbenotmorethanthree(3)TradingDaysfromthedateoftheOptional

Prepayment �Notice. �On �the �date �fixed �for �prepayment �(the �"Optional �Prepayment �Date"),

BorrowershallmakepaymentoftheOptionalPrepayment Amount(asdefinedbelow)toorupon

theorderofHolderasspecifiedbyHolderinwritingtoBorroweratleastone(1)businessday

prior �to �the �Optional �Prepayment �Date. �If �Borrower �exercises �its �right �to �prepay �the �Note,

Borrower �shall �make �payment �to �Holder �of �an �amount �in �cash �(the �"Optional �Prepayment

Amount") ��equal ��to ��105%, ��multiplied ��by �the ��sum ��of ��(w) �the �then ��outstanding ��principal

amountofthisNoteplus(x)accruedandunpaidinterestontheunpaidprincipalamountof

Borrower _______________

Holder _______________



Page 11 of 21

this ��Note ��to ��the ��Optional ��Prepayment ��Date ��plus ��(y) ��Default ��Interest ��and ��Partial ��Penalty

Payment,ifany,on theamounts referred to in clauses (w) and (x)plus(iv) any amounts owed to

HolderpursuanttoSections1.4and3.2hereof.IfBorrowerdeliversanOptionalPrepayment

Notice andfails to pay the Optional Prepayment Amount due to Holder of the Note within two (2)

business daysfollowing theOptionalPrepaymentDate,Borrowershallforeverforfeititsrightto

prepay the Note pursuant to this Section 1.8.

ARTICLEII.CERTAINCOVENANTS

2.1DistributionsonCapitalStock.SolongasBorrowershallhaveanyobligation under this

Note,Borrower shallnotwithoutHolder'swrittenconsent(a)pay,declareorsetapartforsuch

payment,anydividendorotherdistribution(whetherincash,propertyorothersecurities)on

sharesofcapitalstockotherthandividendsonsharesofCommonStocksolelyintheformof

additional �sharesofCommonStockor(b)directlyorindirectlyor �through �anysubsidiary

makeanyotherpaymentordistributioninrespectofitscapitalstockexceptfordistributions

pursuant �to �any �shareholders' �rights �plan �which �is �approved �by �a �majority �of ��Borrower's

disinterested directors.

2.2RestrictiononStockRepurchases.SolongasBorrowershallhaveanyobligationunder

thisNote,BorrowershallnotwithoutHolder'swrittenconsentredeem,repurchaseorotherwise

acquire(whetherforcashorinexchangeforpropertyorothersecuritiesorotherwise)inany

onetransactionorseriesofrelatedtransactionsanysharesofcapitalstockofBorrowerorany

warrants, rights or options to purchase or acquire any such shares.

2.3ParValueofCommonStock.SolongasBorrowershallhaveanyobligationunderthis

Note,Borrowercovenantsthatatany time whenHolder shalldelivera ConversionNotice,the

par ��value ��of ��Borrower's ��Common ��Stock ��shall ��not ��be ��higher ��than ��the ��Conversion ��Price

applicable to such ConversionNotice.

2.4MandatoryReverseStockSplit.SolongasBorrowershallhaveanyobligationunderthis

Note,shouldtherebenobidontheTradingMarketwheretheCompany'sCommonStockis

listed �or �traded �for �3 �consecutive �trading �days, �the �Company �shall �immediately �have �its

Common Stockundergoa reverse stocksplitata ratio of 100-to-1.

2.5CurrentstatusofSECReports.14daysofthedatehereoftheCompanyshallceasebeing

delinquent with its SECfilingsand shallregaincurrentstatuswithrespect to suchfilings.

2.6Borrowings.Solongas �Borrowershallhaveanyobligationunderthis �Note,Borrower

shallnot,withoutgivingHoldernoticeofhisRightOfFirstRefusal,inaccordancewithSection

4(c) �of �the �PurchaseAgreement �written �consent, �create, �incur, �assume �guarantee, ��endorse,

contingently �agree ��to �purchase �or ��otherwise �become �liable �upon �the ��obligation ��of ��any

person, ��firm, ��partnership, ��joint ��venture ��or ��corporation, ��except ��by ��the ��endorsement ��of

negotiableinstrumentsfordepositorcollection,orsuffertoexistanyliabilityfor �borrowed

money,except(a)borrowingsinexistenceorcommittedon �thedatehereofandof �which

BorrowerhasinformedHolderinwritingpriortothedatehereof,(b)indebtednessto �trade

creditors ��or ��financial ��institutions ��incurred ��in ��the ��ordinary ��course ��of ��business ��or ��(c)

Borrower _______________

Holder _______________



Page 12 of 21

borrowings, the proceeds of which shall be usedto repay this Note.

2.7SaleofAssets.SolongasBorrowershallhaveanyobligationunderthisNote,Borrower

shallnot,withoutHolder'swrittenconsent,sell,leaseorotherwisedisposeofanysignificant

portionofitsassetsoutsidetheordinarycourseofbusiness.Anyconsenttothedispositionof

any assets may be conditioned on a specified use of the proceeds of disposition.

2.8 �AdvancesandLoans.Solongas �Borrower �shallhaveanyobligation �underthisNote,

Borrower shallnot, withoutHolder's writtenconsent, lend money,givecreditor make advances

to ��any ��person, ��firm, ��joint ��venture ��or ��corporation, ��including, ��without ��limitation, ��officers,

directors, ��employees, ��subsidiaries ��and ��affiliates ��of ��Borrower, ��except ��loans, ��credits ��or

advances(a)inexistenceorcommittedonthedatehereofandwhichBorrowerhasinformed

Holderinwritingpriortothedatehereof,(b)madeintheordinarycourseofbusinessor(c)

not in excess of $150,000.

ARTICLE III. EVENTS OF DEFAULT/INDEMNITY

If �any �of �the �following �events �occur �(each, �an �"Event �of �Default"), �the �Holder �shall �be

entitledtoconsidertheBorrowertobeindefaultandthisNoteshallbecomeimmediatelydue

and payable:

3.1FailuretoPayPrincipalorInterest. ��Borrowerfailstopaytheprincipalhereoforinterest

thereon whendue on this Note,whether atthe Maturity Date,uponaccelerationorotherwise.

3.2ConversionandtheShares. ��Borrowerfailstoissuesharesof CommonStocktoHolder(or

announcesorthreatensinwritingthatitwillnothonoritsobligationtodoso)uponexercise

byHolderoftheconversionrightsofHolderinaccordancewiththetermsofthisNote,failsto

transfer ��or ��cause ��its ��transfer ��agent ��to ��transfer ��or ��issue ��any ��certificate ��(or ��electronic

transmission)forsharesofCommonStockissuedtoHolderuponconversionoforotherwise

pursuanttothisNoteasandwhenrequiredbythisNote,Borrowerdirectsitstransferagent

nottotransferordelays,impairs,and/orhindersitstransferagentintransferring(orissui ng)

(electronicallyorincertificatedform) �thesharesofCommonStocktobeissuedtoHolder

uponconversionoforotherwisepursuanttothisNoteasandwhenrequiredbythisNote,or

failstoremove(ordirectsitstransferagentnottoremoveorimpairs,delays,and/orhinders

its �transfer �agent �from �removing) �any �restrictive ��legend(ortowithdrawanystoptransfer

instructionsinrespectthereof)onanycertificateforanysharesofCommonStockissuedto

HolderuponconversionoforotherwisepursuanttothisNoteasandwhenrequiredbythis

Note(ormakesanywrittenannouncement,statementorthreatthatitdoesnotintendtohonor

theobligationsdescribedinthisparagraph)andanysuchfailureshallcontinueuncured(or

any �written ��announcement, �statement �or �threat �not �to �honor �its ��obligations �shall �not �be

rescinded ��in ��writing) ��for ��three ��(3) ��business ��days ��after ��Holder ��shall ��have ��delivered ��a

Conversion Notice.

3.3BreachofCovenants. ��Borrowerbreachesanymaterialcovenantorothermaterialtermor

conditioncontainedinthisNoteandanycollateraldocumentsincludingbutnotlimitedtothe

Purchase Agreement and such breachcontinuesfor a periodof ten(10) daysafterwrittennotice

Borrower _______________

Holder _______________



Page 13 of 21

thereof toBorrower fromHolder.

3.4BreachofRepresentationsandWarranties. ���Anyrepresentationorwarrantyof �Borrower

made ��herein ��or ��in ��any ��agreement, ��statement ��or ��certificate ��given ��in ��pursuant ��hereto ��or ��in

connectionherewith(including,withoutlimitation,thePurchase Agreement),shallbefalseor

misleading �in �any �material �respect �when �made �and �the �breach �of �which �has �(or �with ��the

passage of time will have) a material adverse effect on the rights ofHolder with respect to this Note

or the Purchase Agreement.

3.5Receiveror Trustee. ��Borrowerorany subsidiary ofBorrowershallmake an assignment for the

benefitofcreditors,orapply fororconsenttotheappointmentofareceiverortrusteeforitorfora

substantial part of its property or business, or such a receiver or trustee shall otherwise be appointed.

3.6Judgments. ���Anymoneyjudgment,writorsimilarprocessshallbeenteredorfiledagainst

Borrower or any subsidiary of Borrower or any of its property or other assets for more than $50,000,

and shall remain unvacated, unbonded or unstayedfor a period of twenty (20)days unless otherwise

consented to by Holder, which consent will not be unreasonably withheld.

3.7Bankruptcy.Bankruptcy, ��insolvency, ��reorganization �or �liquidation ��proceedingsorother

proceedings, voluntary or involuntary, for relief under any bankruptcy law orany lawfortherelief

of debtors shall be instituted by or against Borrower or any subsidiary of Borrower.

3.8DelistingofCommonStock. ��BorrowershallfailtomaintainthelistingoftheCommonStock

on a Trading Market.

3.9FailuretoComplywiththeExchangeAct. ��Borrowershallfailtocomplywiththereporting

requirementsoftheExchangeAct; �and/or �Borrowershall �ceasetobe �subjecttothereporting

requirements of the Exchange Act.

3.10Liquidation. ��Anydissolution,liquidation,orwindingupofBorroweroranysubstantial

portion of its business.

3.11 Cessation of Operations. ��AnycessationofoperationsbyBorrowerorBorroweradmitsitis

otherwisegenerally unabletopay itsdebtsassuchdebtsbecomedue,provided,however,thatany

disclosureofBorrower'sabilitytocontinueasa"goingconcern"shallnotbeanadmissionthat

Borrower cannot pay its debts as they become due.

3.12 �Maintenance �ofAssets. ���The �failure �by �Borrower �to �maintain �any �materialintellectual

propertyrights,personal,realpropertyorotherassetswhicharenecessarytoconductitsbusiness

(whether now or in the future).

3.13 Financial Statement Restatement.

The �restatement �of �any �financial �statementsfiledby

BorrowerwiththeSECforany dateorperiodfromtwo(2)yearspriortotheIssueDateanduntil

thisNoteisnolongeroutstanding,iftheresultofsuchrestatementwould,by comparisontothe

unrestatedfinancialstatement,haveconstitutedamaterialadverseeffectontherightsofHolder

with respect to this Note or the Purchase Agreement.

Borrower _______________

Holder _______________



Page 14 of 21

3.14 Reverse Splits. ��BorrowereffectuatesareversesplitofitsCommon Stock without twenty

(20) days prior written notice to Holder, unless such reverse split is done pursuant to Section 2.4 of

this Note.

3.15ReplacementofTransfer Agent. ��IntheeventthatBorrowerproposestoreplaceitstransfer

agent, Borrower fails to provide, prior to the effective date of such replacement, a fully executed

IrrevocableTransfer AgentInstructionsinaformasinitiallydeliveredpursuanttothePurchase

Agreement(includingbutnotlimitedtotheprovisiontoirrevocablyreservesharesofCommon

Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and Borrower.

3.16Cross-Default. ��Notwithstanding anything tothecontrary containedinthisNote or the other

related or companion documents, a breach or default by Borrower of any covenant or other term or

condition contained in any of the Other Agreements, after the passage of all applicable notice and

cureorgraceperiods,shall,attheoptionofHolder,beconsidereda default under this Note and

the Other Agreements, in which eventHolder shallbe entitled(butinnoeventrequired)toapply

allrightsandremediesofHolderunderthetermsofthisNoteandtheOtherAgreementsby

reasonofadefaultundersaidOtherAgreementorhereunder."OtherAgreements"means,

collectively,allagreementsandinstrumentsbetween,amongorby:(i)BorrowerorPledgor,

and,orforthebenefitof,(ii)HolderandanyaffiliateofHolder,including,withoutlimitation,

thePurchaseAgreement,StockPledgeAgreement,andanypromissorynotes.Eachoftheloan

transactions will be cross-defaulted with each other loan transaction and with all other existing and

futuredebtofBorrower toHolder. ��UpontheoccurrenceofanEventofDefaultunder ArticleIII,

exercisablethroughthedeliveryofwrittennoticetoBorrowerbysuchHolders(the"Default

Notice"), �the �Note �shall �become �immediately �due �and �payable �and �Borrower �shall �payto

Holder,infullsatisfactionofitsobligationshereunder,anamountequaltothegreaterof:(i)

150% �times �the �sum �of �(w) �the �then �outstanding �principal �amount �of �this �Note ��plus �(x)

accrued �and �unpaid �interest �on �the �unpaid �principal ��amount �of �this ��Note �to �the �date �of

payment(the"MandatoryPrepaymentDate")plus(y)DefaultInterestandPartialPenalty

Payment,ifany,ontheamountsreferredtoinclauses(w)and/or(x)plus(z)anyamounts

owedtoHolderpursuanttoSection1.4(g) hereof (the then outstanding principal amount of this

Notetothedateofpayment �plustheamounts �referred �to �in �clauses �(x), �(y) �and �(z) �shall

collectivelybeknownasthe"DefaultSum")and(ii)the"parityvalue"oftheDefaultSum

tobeprepaid,whereparityvaluemeans:(a)thehighestnumberofsharesofCommonStock

issuableuponconversionoforotherwisepursuantto �suchDefaultSuminaccordance �with

ArticleI,treatingthe TradingDayimmediatelyprecedingtheMandatoryPrepaymentDateas

theConversionDateforpurposesof �determiningthe �lowestapplicableConversionPrice,

unlesstheEventofDefaultarisesasaresultofabreachinrespectofaspecificConversion

DateinwhichcasesuchConversionDatesha llbetheConversionDate),multipliedby(b)

the highest Closing Price for the Common Stock during theperiodbeginning on the date of first

occurrenceoftheEventofDefaultandendingonedaypriortotheMandatoryPrepayment

Date(the"DefaultAmount")andallotheramountspayablehereundershallimmediately

becomedueandpayable,allwithoutdemand,presentmentornotice,allofwhichherebyare

expressly ��waived, ��together ��with ��all ��costs, ��including, ��without ��limitation, ��legal ��fees ��and

expenses,ofcollection,andHoldershallbeentitledtoexerciseallotherrightsandremedies

availableatlaworinequity. �If �Borrower �fails �topaythe �DefaultAmount �within �five �(5)

Borrower _______________

Holder _______________



Page 15 of 21

business daysof writtennoticethat such amount is due and payable, thenHolder shall have the

right at any time, so long asBorrower remains in default (and so long and to the extent that there

aresufficientauthorizedshares),torequireBorrower,uponwrittennotice,toimmediately issue,

inlieuoftheDefaultAmount(oranypartthereof),thenumberofsharesofCommonStockof

BorrowerequaltotheDefaultAmount(oranypartthereof)dividedbytheConversionPrice

then in effect.

3.17ParValueofCommonStock.BorrowershallfailtohavetheappropriateCommonStock

par value in accordance with Section 2.3 of this Note.

3.18MandatoryReverseStockSplit.BorrowershallfailtohaveitsCommonStockundergoa

reverse stock split in accordance with Section 2.4 of this Note.

3.19 Current status of SEC reports. Borrower shall failto regain current status with respect to its

SEC reports within 14 days of the date hereof.

3.20 ��IndemnificationofHolder. ���InadditiontoanyotherremediesavailabletotheHolder,

Borrower ��will, ��at ��all ��times, ��indemnify, ��save, ��and ��hold ��harmless ��Holde r ��and ��its ��officers,

directors, ��employees, ��and �agents ��from �and �against ��all �sums ��and ��expenses, ��claims, �costs,

charges, �legal �fees, �collection �fees, �disbursements, �and �expenses �of �very �kind �and �nature

associatedwithabreachofthisAgreementbyBorrower,including,butnotlimitedto,any

breach of a representation, warranty, or covenantmade by Borrower.

ARTICLE IV.MISCELLANEOUS

4.1 �Failure �or �Indulgence �NotWaiver. �No �failure �or �delayon �the �part �of �Holder �in �the

exerciseofanypower,rightorprivilegehereundershalloperateasawaiver �thereof,nor

shallanysingleorpartialexerciseofanysuchpower,rightorprivilegepreclude �otheror

furtherexercisethereoforofanyotherright,powerorprivileges.Allrightsand �remedies

existinghereunderarecumulativeto,andnotexclusiveof,anyrightsorremediesotherwise

available.

4.2 ���Notices. ���All ����notices, ����demands, ����requests, ����consents, ����approvals, ����and ����other

communications ��required ��or ��permitted ��hereunder ��shall ��be ��in ��writing ��and, ��unless

otherwise ��specified ��herein, ��shall ��be ��(i) ��personally ��served, ��(ii) ��deposited ��in ��the ��mail,

registered ��or ��certified, ��return ��receipt ��requested, ��postage ��prepaid, ��(iii) ��delivered ��by

reputableaircourierservicewithchargesprepaid,or(iv)transmittedbyhanddelivery,

telegram,orfacsimile,addressedassetforthbelowortosuchotheraddressassuchparty

shall �havespecifiedmostrecentlybywritten �notice.Anynoticeorothercommunication

requiredorpermittedtobegivenhereundershallbedeemedeffective(a)uponhanddelivery

ordeliverybyfacsimile,withaccurateconfirmation �generatedbythetransmittingfacsimile

machine,attheaddressornumberdesignatedbelow(if �deliveredonabusinessdayduring

normalbusinesshourswheresuchnoticeistobereceived),orthefirstbusinessdayfollowing

suchdelivery(ifdeliveredotherthanonabusinessdayduringnormalbusinesshourswhere

suchnoticeistohereceived)or(b)onthesecondbusinessdayfollowingthedateofmailing

Borrower _______________

Holder _______________



Page 16 of 21

byexpresscourierservice,fullyprepaid,addressedtosuchaddress,oruponactualreceipt

of suchmailing,whichevershallfirstoccur.

The addressesforsuch communications shall be:

If to Borrower, to:

MineralRite Corporation

55 South Geneva Road

Lindon, Utah 84042

Attn: Guy Peckham

Telephone: �801-796-8944

Email: [email protected]

If to Holder, to:

River North Equity, Inc.

360 W. Hubbard St., Unit 2801

Chicago, Illinois 60654

Attn: �Edward Liceaga

Telephone: �(312)-643-0280

E-mail: [email protected]

4.3Amendments.ThisNoteandanyprovisionhereofmayonlybeamendedbyaninstrument

inwritingsignedbyBorrowerandHolder.Theterm"Note"andallreferencethereto,as

used throughout this instrument, shall mean this instrument (and the otherNotes issued pursuant

tothePurchaseAgreement)asoriginally executed,oriflateramendedorsupplemented,thenas

so amended or supplemented.

4.4Assignability. �This �Note �shall �be �binding �upon �Borrower �and �its �successorsand

assigns, ��and ��shall ��inure ��to ��the ��benefit ��of ��Holder ��and ��its ��successors ��and ��assigns. ��Each

transfereeofthisNotemustbean"accreditedinvestor"asdefinedinRule501(a)ofthe1933

Act.NotwithstandinganythinginthisNotetothecontrary,thisNotemay �bepledgedas

collateral �in �connection �with �a �bona �fide �margin �account �or �other �lending �arrangement ��in

compliance with applicable securities rules and regulations.

4.5CostofCollection.IfdefaultismadeinthepaymentofthisNote,Borrowershallpay

Holder hereof all costs of collection, including reasonable attorneys' fees.

4.6GoverningLaw.ThisNoteshallbegovernedbyandconstruedinaccordancewiththelaws

oftheStateofIllinoiswithoutregardtoprinciplesofconflictsoflaws. Anyactionbroughtby

eitherpartyagainsttheotherconcerningthetransactionscontemplatedbythisNoteshallbe

broughtonlyinthestatecourtsofIllinoisorinthefederalcourtslocatedinCookCounty. The

partiestothisNoteherebyirrevocablywaiveanyobjectiontojurisdictionandvenueofany

Borrower _______________

Holder _______________



Page 17 of 21

actioninstitutedhereunderandshallnotassertanydefensebased �onlackofjurisdictionor

venueorbaseduponforumnonconveniens.BorrowerandHolderwaivetrialbyjury.The

prevailingpartyshallbeentitledtorecoverfromtheotherpartyitsreasonableattorney'sfees

andcosts.IntheeventthatanyprovisionofthisNoteoranyotheragreementdeliveredin

connectionherewithisinvalidorunenforceableunderanyapplicable �statuteorruleoflaw,

thensuchprovisionsshallbedeemedinoperativetotheextentthatitmayconflicttherewith

and ��shall ��be ��deemed ��modified ��to ��conform ��with ��such ��statute ��or ��rule ��of ��law. ��Any �such

provision,whichmay proveinvalidorunenforceableunderany law,shallnotaffectthevalidity

orenforceabilityofanyotherprovisionofanyagreement.Eachpartyherebyirrevocably

waivespersonalserviceofprocessandconsentstoprocessbeingservedinanysuit,actionor

proceedingin �connectionwiththis �Note,oranyotheragreement/documentrelatedtoit, �by

mailingacopythereofviaregisteredorcertifiedmailorovernightdelivery(withevidenceof

delivery) �tosuchpartyattheaddressineffectfornoticestoitunderthisAgreement �and

agreesthatsuchserviceshallconstitutegoodandsufficientserviceofpr ocessandnotice

thereof. �Nothing �contained �herein �shall �be �deemed �to �limit �in �anyway �anyright �to �serve

process in any othermanner permittedby law.

4.7ConvertibleNotePurchaseAgreement.ByitsacceptanceofthisNote,eachpartyagreesto

beboundbytheapplicabletermsoftheConvertibleNotePurchaseAgreementdatedJanuary

__, 2015.

4.8Notice of Corporate Events.Exceptasotherwise providedbelow,Holderof thisNote shall

havenorightsasaHolderofCommonStockunlessandonly totheexte ntthatitconvertsthis

Note �into �Common ��Stock. ��Borrower ��shall ��provide ��Holder ��with ��prior �notification ��of �any

meetingofBorrower'sshareholders(andcopiesofproxymaterialsandotherinformationsent

toshareholders).Intheeventofany takingbyBorrowerofarecordofitsshareholdersforthe

purposeofdeterminingshareholderswhoareentitledtoreceivepaymentofanydividendor

other distribution, any right to subscribe for, purchase or otherwise acquire (including by way of

merger,consolidation,reclassificationorrecapitalization)anyshareofanyclassoranyother

securities or property, or to receive any other right, or for the purpose of determining shareholders

whoareentitledtovoteinconnectionwithanyproposedsale,leaseorconveyanceofallor

substantiallyalloftheassetsofBorroweroranyproposedliquidation,dissolutionorwinding

upofBorrower,BorrowershallmailanoticetoHolder,atleasttwenty(20)dayspriortothe

recorddatespecifiedtherein(or thirty (30)daysprior totheconsummationofthetransactionor

event, whichever is earlier),of the date on which any suchrecord is tobe takenfor the purpose

ofsuchdividend,distribution,rightorotherevent,andabriefstatementregardingtheamount

andcharacterofsuchdividend,distribution,rightorothereventtotheextentknownatsuch

time. �Borrower �shall �make �a �public �announcement �of �any �event ��requiring ��notification ��to

HolderhereundersubstantiallysimultaneouslywiththenotificationtoHolderinaccordance

with the terms of this Section 4.9.

4.9 �Remedies. �Borrower �acknowledgesthat �abreachbyitofits �obligationshereunder

willcauseirreparableharmtoHolder,byvitiatingtheintentandpurposeofthetransaction

contemplatedhereby. Accordingly,Borroweracknowledgesthatthe remedy at law for a breach

ofitsobligationsunderthisNotewillbeinadequateandagrees,intheeventofabreachor

threatenedbreachbyBorroweroftheprovisionsofthisNote,thatHoldershallbeentitled,in

Borrower _______________

Holder _______________



Page 18 of 21

additiontoallotheravailableremediesatlaworinequity,andin �additiontothepenalties

assessableherein,toaninjunctionorinjunctionsrestraining,preventingorcuringanybreach

ofthisNoteandtoenforcespecificallythetermsandprovisionsthereof,withoutthenecessity

of showing economic loss and without any bond or other security beingrequired.

[THEREMAINDEROFTHISPAGEHASDELIBERATELYBEENLEFT

BLANK]

Borrower _______________

Holder _______________



Page 19 of 21

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first

written above.

SIGNED by: Edward M. Liceaga

|

for and on behalf of

|

River North Equity, Inc.

|

|

Signature: ____________________

|

|

SIGNED by: ____________________

|

for and on behalf of

|

MineralRite Corporation

Signature: ____________________

|

|

|

|

Borrower _______________

Holder _______________



Page 20 of 21

EXHIBIT C: �NOTICE OF CONVERSION

Theundersignedherebyelectstoconvert$[____________]oftheNote(definedbelow)intothe

numberofsharesofCommonStockofMineralRiteCorporation(the"Borrower")tobeissued

pursuanttotheconversionoftheNoteassetforthbelowaccordingtotheconditionsofthe

ConvertiblePromissoryNoteofBorrowerdatedJanuary__,2015(the"Note").Nofeewillbe

charged to Holder for any conversion, except for transfer taxes, if any.

Box Checked as to applicable instructions:

 �The �Borrower �shall �electronically �transmit �the �Common �Stock �issuable �pursuant ��to �this

ConversionNoticetotheaccountoftheundersignedoritsnomineewithDTCthroughits

Deposit Withdrawal Agent Commission system ("DWACTransfer"). This election shall only

be �effective �if �the �Company's �transfer �agent �is �a �participatingmemberof �DTC's �DWAC

program and the Borrower is DWAC eligible.

Name of DTC Prime Broker:

Account Number:

 �TheundersignedherebyrequeststhattheBorrowerissueacertificateorcertificates for

thenumberofsharesofCommonStocksetforthbelow(whichnumbersarebasedonthe

Holder's ��calculation ��attached ��hereto) ��in ��the ��name(s) ��specified ��immediately �below ��or, ��if

additional space is necessary, on an attachment hereto:

River North Equity, Inc.

360 W. Hubbard St., Unit 2801

Chicago, Illinois 60654

T (312)-643-0280

Date of Conversion: �________________

Applicable Conversion Price: �________________

Number of Shares of Common Stock to be Issued: �________________

Pursuant to Conversion of the Notes:

Amount of Principal Balance Due remaining under the Note after this conversion:

Borrower _______________

Holder _______________



Page 21 of 21

River North Equity, Inc.

By: �___________________________

Name: Edward M. Liceaga

Title:President

Date: __________________________

Borrower _______________

Holder _______________



STOCK PLEDGE AGREEMENT

ThisSTOCKPLEDGEAGREEMENT(thisAgreement)made asofJanuary __,2015by and

between ��River ��North ��Equity, ��Inc., ��an ��Illinois ��corporation ��(River ��North), ��and ��Mr. ��Guy

Pekham,CEOofMineralRiteCorporation,aNevadaCorporation(Pledgorand"Company",

respectively).

RECITALS

A.

Pledgor ��is ��the ��record ��and ��beneficial ��owner ��of ��105,000 ��Preferred ��A ��shares ��of

Company, which have 3,000 votes per share and 13,500 Preferred B shares, which are

convertible into 13,500,000 shares of common stock, $.001 par value, of Company.

B.

Pledgorhasagreedtosecure,totheextenthereinaftersetforth,thepaymentinfull

andtheperformanceoftheobligationsofCompanyunderthePurchaseAgreement

and the Note (as defined below).

C.

InconnectionwithRiverNorthextending a loantoCompany,Company hassigneda

Convertible ��Note ��Purchase ��Agreement ��dated ��January ��__, ��2015 ��(the ��"Purchase

Agreement")and issuedthat certainConvertiblePromissory Note(the Note)dated

January__,2015payabletotheorderofRiverNorthintheprincipalamountof

seventy-seven thousand and seven-hundred seventy eight Dollars ($77,778).

D.

SuchNoteissecuredbythePledgedShares(asdefinedbelow)andothercollateral

upon the terms set forth in this Agreement.

NOW, THEREFORE, it is hereby agreed as follows:

1. ��Grant of Security Interest. �Pledgor hereby grants and pledges for the benefit of River North a

security interestin,andassigns,transferstoandpledgeswiththeCompany'sTransferAgentfor

the ��benefit ��of ��River ��North, ��the ��following ��securities ��and ��other ��property ��(collectively, ��the

Collateral):

(i) ���105,000PreferredAsharesand13,500PreferredBsharesofCompany issuedinthe

name of Pledgor (the Pledged Shares) to be served as Collateral for the Note, delivered to and

depositedwiththeCompany'sTransferAgent,guaranteedandstampedbyaMedallionStock

PowersignedbyaparticipantoftheSecuritiesTransferAgentsMedallionProgram(STAMP)

which �is �recognized �by �the �Company's �Transfer �Agent. �Such �Medallion �Stock �Power �shall

authorize ��the ��immediate ��transfer ��and ��assignment ��of ��the ��Collateral ��to ��River ��North ��upon

occurrence �of �an �Event �of �Default �pursuant �to �Section �9 �of �this �Agreement. �The �Collateral

transferred and assigned to River North shall be used by River North freely, at its own discretion,

withoutanylimitationwhatsoever(forpurposesofthisAgreement,commonstockshallreferto

the common stock of the Pledgor);

(ii) ��anyandallnew,additionalordifferentsecuritiesorotherpropertysubsequently

distributed or issued toPledgor,any members ofhis household or any business owned by him or

by �any �member ��of ��his ��household, ��in ��connection ��with ��the ��Pledged ��Shares ��or ��without ��any

connection to the Pledged Shares, which are to be delivered to and deposited withthe Company's

Transfer Agent pursuant to the requirements of Section 3 of this Agreement;



(iii)anyandallotherpropertyandmoneywhichisdeliveredtoorcomesintothe

possession of the Company's Transfer Agent pursuant to the terms of this Agreement; and

(iv)theproceedsofanysale,exchangeordispositionofthepropertyandsecurities

described in subsections (i), (ii) or (iii) above.

2. ���Warranties. ��PledgorherebywarrantsthatPledgoristheowneroftheCollateralandhasthe

righttopledgetheCollateralandthattheCollateralisfreefromallliens,adverseclaimsand

other security interests (other than those created hereby).

3. ����DutytoDeliver. ��Anynew,additionalordifferentsecuritiesorotherproperty(otherthan

regularcashdividends)whichmaynoworhereafterbecomedistributablewithrespecttothe

Collateral by reason of (i) any stock split, stock dividend, recapitalization, combination of shares,

exchangeofsharesorotherchangeaffectingthePledgedSharesasaclassand(ii)anymerger,

consolidationorotherreorganizationaffectingthecapitalstructureoftheCompanyshall,upon

receiptbyPledgor,bepromptlydeliveredtoanddepositedwiththeCompany'sTransferAgent

aspartoftheCollateralhereunder.Andinaddition,allsecuritiesissuedbytheCompanyto

Pledgor,any membersofhishouseholdorany businessownedby himorbyany memberofhis

household ��and ��any ��new, ��additional ��or ��different ��securities ��or ��other ��property ��distributed ��in

connectionwithsuchissuedsecurities,foraslongastheCompanyshallhaveanyobligation

under the Note, shall become part of the Collateral. All securities described in this Section 3 shall

be deliveredto and deposited with the Company'sTransfer Agentandbe accompanied by one or

more properly-endorsed stock power assignments as described in section 1(i) above.

4. ����PaymentofTaxesandOtherCharges. ��ForaslongastheCollateralsecurestheNote,all

taxes,liens,assessmentsandotherchargesagainsttheCollateral,andintheeventofPledgors

failuretodoso,RiverNorthmayatitselectionpayanyorallofsuchtaxesandothercharges

withoutcontestingthevalidityorlegalitythereof. ��Thepaymentssomadeshallbecomepartof

theindebtednesssecuredhereunderanduntilpaidshallbearinterestattheminimumperannum

rate,compoundedsemi-annually,requiredtoavoidtheimputationofinterestincometoRiver

North and compensation income to Pledgor under the Federal tax laws.

5. ����ShareholderRights. ���SolongasthereexistsnoeventofdefaultunderSection9ofthis

Agreement, Pledgor may exercise all shareholdervoting rights and be entitled to receiveany and

allregularcashdividendspaidontheCollateralandallproxystatementsandothershareholder

materials pertaining to the Collateral.

6. ���Rights and Powers of River North. ��River North may, without obligation to do so, exercise at

anytimeandfromtimetotimeoneormoreofthefollowingrightsandpowerswithrespectto

any or all of the Collateral:

(i)

subjecttotheapplicablelimitationsofSection8,acceptinitsdiscretionother

property �of �Pledgor �in �exchange �for �all �or �part �of �the �Collateral �and �cause �the �Company's

TransferAgenttoreleaseCollateraltoPledgortotheextentnecessarytoeffectsuchexchange,

andinsucheventtheotherproperty receivedintheexchange shallbecomepartoftheCollateral

hereunder;



(ii) ���performsuchactsasarenecessarytopreserveandprotecttheCollateralandthe

rights, powers and remedies granted with respect to such Collateral by this Agreement; and

(iii) ���transferrecordownershipoftheCollateraltoRiverNorthoritsnomineeand

receive,endorseandgivereceiptfor,orcollectbylegalproceedingsorotherwise,dividendsor

other distributions made or paid with respect to the Collateral, provided and only if there exists at

thetimeanoutstandingeventofdefaultunderSection9ofthisAgreement.Anycashsums

whichRiverNorthmaysoreceiveshallbeappliedtothepaymentoftheNoteandanyother

indebtednesssecuredhereunder,insuchorderofapplicationasRiverNorthdeemsappropriate.

AnyremainingcashshallbepaidovertoPledgor. ��AnyactionbyRiverNorthpursuanttothe

provisions �of �this �Section �6 �maybe �taken �without �notice �to �Pledgor. ���Expenses �reasonably

incurred �in �connection �with �such �action �shall �be �payable �by �Pledgor �and �form �part �of �the

indebtedness secured hereunder as provided in Section 11.

7. ���Transfer of Collateral. ��In connection with the transfer or assignment of the Note (whether by

negotiation,discountorotherwise),RiverNorthmayinstructtheCompany'sTransferAgentto

keepholdingtheCollateralforthebenefitofthetransfereeorassigneeandsuchtransfereeor

assigneeshallthereuponsucceedtoalltherights,powersandremediesgrantedtoRiverNorth

hereunderwithrespecttotheCollateralsotransferred. ��Uponsuchtransfer,River Northshallbe

fully discharged from all liability and responsibility for the transferred Collateral, if any.

8. ����ReleaseofCollateral. ��Providedallindebtednesssecuredhereundershallatthetimehave

beenpaidinfullandtheredoesnototherwiseexistanyeventofdefaultunderSection9ofthis

Agreement,thePledgedShares,togetherwithanyadditionalCollateralwhichmayhereafterbe

pledged �and �deposited �hereunder, �shall �be �released �from �pledge �and �returned �to �Pledgor �in

accordance with the following provisions:

(i) ����UponpaymentorprepaymentofprincipalundertheNote,along withany accrued

interesttodateontheprincipalamountsopaidorprepaid,oneormoreofthePledgedShares

held as Collateral hereunder shall(subjectto theapplicable limitations ofSection 8(iii)and 8(iv)

below)bereleasedatthetimeofsuchpaymentorprepayment.Thenumberofsharestobeso

releasedshallbeequaltothenumberobtainedbymultiplying(i)thetotalnumberofPledged

SharesheldunderthisAgreementatthetimeofpaymentorprepayment,by(ii)afraction,the

numeratorofwhichshallbetheamountofprincipaltogetherwithanyaccruedinterestpaidor

prepaidandthedenominatorofwhichshallbetheunpaidprincipalbalanceoftheNotetogether

withallaccruedinterestthereunderimmediatelypriortosuchpaymentorprepayment. ���Inno

event, however, shall any fractional shares be released.

(ii) ���AnyadditionalCollateralwhichmayhereafterbepledgedanddepositedwiththe

Company's �Transfer �Agent �(pursuant �to �the �requirements �of �Section �3) �with �respect �to �the

PledgedSharesshallbereleasedatthesametimetheparticularsharestowhichtheadditional

Collateral relates are to be released in accordance with the applicable provisions of Section 8(i).

(iii) ����Under ��no ��circumstances, ��however, ��shall ��any ��Pledged ��Shares ��or ��any ��other

Collateral ��be ��released ��if ��previously ��applied ��to ��the ��payment ��of ��any ��indebtedness ��secured

hereunder.Inaddition,innoeventshallanyPledgedSharesorotherCollateralbereleased



pursuant to the provisions of Section 8(i) or 8(ii) if, and to the extent, the fair market value of the

sharesandallotherCollateralwhichwouldotherwiseremaininpledgehereunderaftersuch

releasewereeffectedwouldbelessthantheunpaidprincipalandaccruedinterestunderthe

Note.

(iv)ForallvaluationpurposesunderthisAgreement,thefairmarketvaluepershareof

common stock on any relevant date shall be determined as follows: the fair market value shall be

theclosing bidprice pershareofcommonStock ontheapplicableTrading Market(assuchterm

is defined in the Purchase Agreement) on the datein question. ��If there is no reported closing bid

price �for �the �common �Stock �on �the �date �in �question, �then �the �closing �bid �price �on �the �last

preceding date for which such quotation exists shall be determinative of fair market value.

9. ���EventsofDefault.EachofthefollowingoccurrencesshallconstituteanEventofDefault

under ��this ��Agreement: ��(i) ��Pledgor ��shall ��fail ��to ��observe ��or ��perform ��any �material ��covenant

applicabletosuchPledgorunderthisAgreementandsuchfailureshallcontinueforaperiodof

thirty (30)consecutive daysafterwritten notice byRiver North; (ii)any default by the Company

undertheNotewhichis nottimely curedby theCompany orPledgor;(iii)theoccurrence ofany

otheraccelerationeventspecifiedintheNote;(iv)thefailureoftheCompanytoperformany

obligation imposed upon it by reason of the Purchase Agreement and the Note (including, but not

limited �to, �honoring �conversion �of �the �Note); �or �(v) �the �breach �of �anywarrantyof �Pledgor

contained in this Agreement.

Upon the occurrence of any such event of default, River North may, at its election, declare the

Noteandallotherindebtednesssecuredhereundertobecomeimmediatelydueandpayableand

may exercise any or all of the rights and remedies granted to a secured party under the provisions

oftheIllinoisUniformCommercialCode(asnoworhereafterineffect),including(without

limitation) �thepowerto �disposeoftheCollateral �bypublicorprivate �saleorto �accept �the

Collateral in full payment of the Note and all other indebtedness secured hereunder.

AnyproceedsrealizedfromthedispositionoftheCollateralpursuanttotheforegoingpower

ofsaleshallbeappliedfirsttothepaymentofexpensesincurredbyRiverNorthinconnection

with �thedisposition, �thento �the �payment �of �theNoteandfinallyto �anyotherindebtedness

securedhereunder. ��AnysurplusproceedsshallbepaidovertoPledgor. ��However,intheevent

suchproceedsproveinsufficienttosatisfyallobligationsoftheCompanyundertheNote,then

Pledgor shall remain personally liable for the resulting deficiency.

10. ��OtherRemedies. ��The rights,powersandremediesgrantedtoRiver Northpursuantto

theprovisionsofthisAgreementshallbeinadditiontoallrights,powersandremediesgranted

to River North under any statute or rule of law. Any forbearance, failure or delay by River North

inexercisinganyright,powerorremedyunderthisAgreementshallnotbedeemedtobea

waiverofsuchright,powerorremedy.Anysingleorpartialexerciseofanyright,poweror

remedyunderthisAgreementshallnotprecludethefurtherexercisethereof,andeveryright,

powerandremedyofRiverNorthunderthisAgreementshallcontinueinfullforceandeffect

unlesssuchright,powerorremedyisspecificallywaivedbyaninstrumentexecutedbyRiver

North.



11. ���CostsandExpenses. ���Allcostsandexpenses(includingreasonableattorneys'fees)

incurredby RiverNorthintheexerciseorenforcementofany right,powerorremedy grantedto

it �under �this �Agreement �shall �become �part �of �the �indebtedness �secured �hereunder �and �shall

constituteapersonalliability ofPledgorpayableimmediatelyupondemandandbearinginterest

untilpaidattheminimumperannumrate,compoundedsemi-annually,requiredtoavoidthe

imputationofinterestincometoRiverNorthandcompensationincometoPledgorunderthe

Federal tax laws.

12. ��ApplicableLaw. ��ThisAgreementshallbegovernedby andconstruedinaccordance

withthelawsoftheStateofIllinoiswithoutresorttothatStatesconflict-of-lawsrules.The

partiesherebysubmittotheexclusivejurisdictionof,andwaiveanyvenueobjectionsagainst

anysuperior,municipal,orotherstatecourtlocatedinCookCountyinIllinoisoranyfederal

court for the Northern District of Illinois in any litigation arising under or in connection with this

Agreement. �The parties hereby consent to the exclusive jurisdiction of the above listed courts.

13. �Successors. �This Agreement shall be binding upon River Northand its successors and

assigns and upon Pledgor and the executors, heirs and legatees of Pledgors estate.

14. ��Severability. ��Ifany provision of this Agreement is held to beinvalid under applicable

law,thensuchprovisionshallbeineffective only totheextentofsuchinvalidity,andneitherthe

remainder �of �such �provision �nor ��any �other �provisions �of �this �Agreement �shall �be �affected

thereby.

INWITNESSWHEREOF,thisAgreementhasbeenexecutedby PledgorandRiverNorthasof

January __, 2015.

SIGNED by: Edward M. Liceaga

Signature: _____________________

for and on behalf of

River North Equity, Inc.

SIGNED by: Guy Pekham

Signature: _____________________



ASSIGNMENT SEPARATE FROM CERTIFICATE

FOR ����VALUE ����RECEIVED, ����________________________________________________

hereby ��sell(s), ��assign(s) ��and ��transfer(s) ��to ��River ��North ��Equity, ��Inc. ��(River ��North),

_____________________ �(__________) �Preferred �A �shares �of �MineralRite �Corporation �(the

Company)standinginhisnameonthebooksoftheCompany,representedbyCertificateNo.

_______ �herewith �and �do(e)s �hereby �irrevocably �constitute �and �appoint �Nevada �Agency �&

TransferCompanytotransferthesaidstockonthebooksoftheCompanywithfullpowerof

substitution in the premises.

Dated: __________________________

Signature:________________________



ASSIGNMENT SEPARATE FROM CERTIFICATE

FOR ����VALUE ����RECEIVED, ����________________________________________________

hereby ��sell(s), ��assign(s) ��and ��transfer(s) ��to ���River ��North ��Equity, ��Inc. ��(River ��North),

_____________________ �(__________) �Preferred �B �shares �of �MineralRite �Corporation �(the

Company)standinginhisnameonthebooksoftheCompany,representedbyCertificateNo.

_______ �herewith �and �do(e)s �hereby �irrevocably �constitute �and �appoint ��Nevada �Agency �&

TransferCompanytotransferthesaidstockonthebooksoftheCompanywithfullpowerof

substitution in the premises.

Dated: __________________________

Signature:________________________



SECURITIES PURCHASE AGREEMENT

ThisSECURITIESPURCHASEAGREEMENT(the"Agreement"),datedJanuary__,2015,by

andbetweenMineralRiteCorporation,aNevadacorporation,withheadquarterslocatedat55

SouthGenevaRoad,Lindon,Utah84042(the"Company"),andRiverNorthEquity,Inc.,an

Illinois �corporation, �with �its �principal �place �of �business �at �360 �W. �Hubbard �St., �Unit �2801,

Chicago,Illinois60654(the"Buyer"),(togetherthe"Parties"). ��Capitalizedtermsusedinthis

Agreement and not otherwise defined shall have the meanings ascribed to them in Article 1.

WHEREAS, the Parties desire that, upon the terms and subject to the conditions contained

herein,theCompanyshallhavetherighttoissueandselltotheBuyerfromtimetotimeas

providedherein,andtheBuyershallbeobligatedtopurchasefromtheCompanyuptoTen

MillionDollars($10,000,000)oftheCompanysCommonStockwithaparvalueof$0.001per

shareonaprivateplacementbasispursuanttotheprovisionsofregulationDoftheSecurities

Act,and/oruponsuchotherexemptionfromtheregistrationrequirementsoftheSecuritiesAct

as may be available with respect to any or all of the investments to be made hereunder; and

WHEREAS, �the �Buyer �shall �be �entitled �to �resell �shares �of �Common �Stock �acquired

hereunderpursuanttoaresaleregistrationstatementestablishedby theCompany pursuanttothe

terms of the Registration Rights Agreement between the Company and theBuyer, which shall be

declared effective by the Commission prior to the delivery of the first Draw Down Notice.

NOW,THEREFORE,inconsiderationoftheforegoingpremises,andthepromisesand

covenants herein contained, the receipt and sufficiency of which are hereby acknowledged by the

parties hereto, the parties, intending to be legally bound, hereby agree as follows:

ARTICLE I.

DEFINITIONS

1.1

Definitions. ��InadditiontothetermsdefinedelsewhereinthisAgreement,forall

purposes of this Agreement, the following terms have the meanings indicated in this Section 1.1:

Action shall have the meaning ascribed to such term in Section 3.1(i).

AffiliatemeansanyPersonthat,directlyorindirectlythroughoneormore

intermediaries,controlsoriscontrolledbyorisundercommoncontrolwithaPersonas

suchtermsareusedinandconstruedunderRule144undertheSecuritiesAct. ���With

respecttotheBuyer,anyinvestmentfundormanagedaccountthatismanagedona

discretionary basis by the same investment manager asthe Buyer will be deemed to be an

Affiliate of the Buyer.

BusinessDaymeansanydayexceptSaturday,Sunday,anydaywhichshallbe

afederallegalholidayintheUnitedStatesoranydayonwhichbankinginstitutionsin

theStateofNewYorkareauthorizedorrequiredby laworothergovernmentalactionto

close.

Buyer Party shall have the meaning ascribed to such term in Section 4.7.

1



ClosingPricemeansonanyparticulardate(a) thelastreportedclosingbid

pricepershareofCommonStockonsuchdateontheTradingMarket(asreportedby

BloombergL.P.at4:15PM(NewYorktime)),or(b)ifthereisnosuchpriceonsuch

date,thentheclosingbidprice ontheTrading Marketonthedatenearestpreceding such

date (as reported by Bloomberg L.P. at 4:15 PM (New York time)), or (c) if the Common

StockisnotthenlistedorquotedontheTradingMarketandifpricesfortheCommon

Stockarethenreportedover-the-counterandpublishedbyOTCMarketsGroup,Inc.(or

asimilarorganizationoragency succeeding toits functionsofreporting prices),themost

recent �bid �price �per �share �of �the �Common �Stock �so �reported, �or �(d)if �the �shares �of

CommonStockare notthenpublicly traded,thefairmarketvalue ofa share ofCommon

Stock as determined by an appraiser selected in good faith by the Buyer.

Commission means the Securities and Exchange Commission.

Commencement �Date �shall �mean �the �Trading �Dayon �which �the �applicable

Draw Down Notice is delivered to the Buyer.

CommitmentAmountshallhavethemeaningassignedtosuchterminSection

2.1 hereof.

Commitment ��Period ��shall ��mean ��the ��period ��of ��24 ��consecutive ���months

commencing immediately after the Effective Datebut in no event later than the 30-month

anniversary of the date hereof.

Common Stock means the common stock of the Company, par value $0.001 per

share, �and �any �other �class �of �securities �into �which �such �securities �may �hereafter �be

reclassified or changed into.

Common ��Stock ��Equivalents ��means ��any ��securities ��of ��the ��Company ��or ��the

Subsidiaries �which �would �entitle �the �holder �thereof �to �acquire �at �anytime �Common

Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or

other instrument that is at any time convertible intoor exercisable or exchangeable for, or

otherwise entitles the holder thereof to receive, Common Stock.

CompanyCounselmeans_________________________,withofficeslocated

at ____________________________________.

Consolidation ��Event ��shall ��mean ��a ��sale ��of ��all ��or ��substantially ��all ��of ��the

Companysassetsoramergerpursuanttowhichtheholdersofthevotingsecuritiesof

theCompanypriortothemergerdonotownamajorityofthevotingsecuritiesofthe

surviving entity.

Disclosure ��Schedules ��means ��the ��Disclosure ��Schedules ��of ��the ��Company

delivered concurrently herewith.

Discussion Time shallhave the meaning assigned to such term in Section 3.2(f)

hereof.

2



DrawDownshallhavethemeaningassignedtosuchterminSection6.1(a)

hereof.

DrawDownCushionshallmeanthemandatoryten(10)TradingDaysbetween

Draw Down Notices.

DrawDownNoticeshallhavethemeaningassignedtosuchterminSection

6.1(c) hereof.

DrawDownPricingPeriodshallmeantheten(10)TradingDaysimmediately

preceding the date on which the applicable Draw Down Notice is delivered to the Buyer.

DrawDownSharesshallmeanthesharesofCommonStockissuablepursuant

to a Draw Down.

DTC shall have the meaning assigned to such term in Section 6.1(g).

DWAC shall have the meaning assigned to such term in Section 6.1(g).

Effective Date means the date that the initial Registration Statement filed by the

Company pursuanttotheRegistrationRightsAgreementisfirstdeclaredeffective by the

Commission.

EquityConditionsshallmean,duringtheperiodinquestion,(i)allliquidated

damagesandotheramountsowingtotheBuyerpursuanttotheTransactionDocuments

havebeenpaid,(ii)thereisaneffectiveRegistrationStatementpursuanttowhichthe

BuyerispermittedtoutilizetheprospectusthereundertoresellalloftheDrawDown

Shares(issuedandtobeissuedpursuanttotheapplicableDrawDown)andtheShares

(and ��the ��Company ��believes, ��in ��good ��faith, ��that ��such ��effectiveness ��will ��continue

uninterrupted �for �the �foreseeable �future), ��(iii) �the �Common �Stock �is �trading �on �the

TradingMarketandallofthesharesissuablepursuanttotheTransactionDocumentsare

listed �or �quoted �(if �applicable) �for �trading �on �a �Trading �Market �(and �the �Company

believes,in �goodfaith,thattradingoftheCommonStockonaTradingMarketwill

continueuninterruptedfortheforeseeablefuture),(iv)thereisasufficientnumberof

authorized �but �unissued �and �otherwise �unreserved �shares �of �Common �Stock �for �the

issuance �of �all �of �the �Draw �Down �Shares �(issued �and �to �be �issued �pursuant �to �the

applicable �Draw �Down) �and �the �Shares, �(v) �the �issuance �of �the �Draw �Down �Shares

subject to the applicable Draw Down would not violate the limitations set forth in Section

4.12, (vi) the daily trading volume for each Trading Day during such period shall equal or

exceed$5,000ofCommonStock(basedontheClosingPriceontheapplicableday)and

(vii)theCompany,directlyorindirectly,hasnotprovidedtheBuyerwithanymaterial,

non-public ��information ��that ��has ��not ��been ��made ��publicly ��available ��in ��a ��widely

disseminated release.

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

Exchange Act means the Securities Exchange Act of 1934, as amended, and the

rules and regulations promulgated thereunder.

3



ExemptIssuancemeanstheissuance of(a)sharesofCommonStockor options

toemployees,officersordirectorsoftheCompanypursuanttoanystockoroptionplan

dulyadoptedbyamajorityofthenon-employeemembersoftheBoardofDirectorsof

theCompanyoramajorityofthemembersofacommitteeofnon-employeedirectors

established ��for ��such ��purpose, ��(b) ��securities ��upon ��the ��exercise ��or ��exchange ��of ��or

conversion �of �any �Securities �issued �hereunder ��and/or �other �securities �exercisable �or

exchangeablefororconvertibleintosharesofCommonStockissuedandoutstandingon

the date of this Agreement, provided that such securities have not been amended since the

date �of �this �Agreement �to �increase �the �number �of �such �securities �or �to �decrease �the

exercise,exchangeorconversionpriceofanysuchsecurities,and(c)securitiesissued

pursuant ��to ��acquisitions ��or ��strategic ��transactions ��approved ��by ��a ��majority ��of ��the

disinteresteddirectors,providedanysuchissuanceshallonlybetoaPersonwhichis,

itselforthroughitssubsidiaries,anoperatingcompany inabusinesssynergisticwiththe

businessoftheCompanyandinwhichtheCompanyreceivesbenefitsinadditiontothe

investmentoffunds,butshallnotincludeatransactioninwhichtheCompanyisissuing

securities �primarily �for �the �purpose �of �raising �capital �or �to �an �entitywhose �primary

business is investing in securities.

FormulaPricemeansthelowerof:(i)theMarketPrice;and(ii)theClosing

PriceontheCommencementDate,subjecttoadjustmentforreverseandforwardstock

splits,stockdividends,stockcombinationsandother similartransactionsoftheCommon

Stock that occur after the date of this Agreement.

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

InitialClosingshallhavethemeaningassignedtosuchterminSection �2.2

hereof.

Initial Closing Date shall have the meaning assigned to such term in Section2.2

hereof.

IntellectualPropertyRightsshallhavethemeaningascribedtosuchtermin

Section 3.1(n).

InvestmentAmountshallhavethemeaningassignedtosuchterminSection

6.1(c) hereof.

LegendRemovalDateshallhavethemeaningascribedtosuchterminSection

4.1(c).

Liens means a lien,charge, security interest, encumbrance, right offirstrefusal,

preemptive right or other restriction.

MarketPricemeans,withrespecttoaDrawDown,theaverageclosingbid

priceoftheCommonStockduringtheDrawDownPricingPeriodapplicabletosuch

Draw Down.

4



Material ��Adverse ��Effect ��shall ��have ��the ��meaning ��assigned ��to ��such ��term ��in

Section 3.1(b).

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

Personmeansanindividualorcorporation,partnership,trust,incorporatedor

unincorporatedassociation, joint venture, limitedliability company, jointstock company,

government (or an agency or subdivision thereof) or other entity of any kind.

Proceeding ���means ���an ���action, ���claim, ���suit, ���investigation ���or ���proceeding

(including, ��without ��limitation, ��an ��investigation ��or ��partial ��proceeding, ��such ��as ��a

deposition), whether commenced or threatened.

"Buyer'sOwnershipLimitation"shallhavethemeaningascribedtosuchtermin

Section 4.12.

Purchase ��Price ��shall ��mean, ��with ��respect ��to ��Draw ��Down ��Shares ��purchased

pursuanttoaDrawDownNotice,70%oftheFormulaPrice. ��IncaseaDTCChillorder

is placed on the Common Stock of the Company, and as long as this order is in effect, the

Purchase Price shall mean 60% of the Formula Price.

Registration ��Rights ��Agreement ��means ��the ��Registration ��Rights ��Agreement,

datedthedatehereof,betweentheCompanyandtheBuyer,intheformofExhibitA

attached hereto.

Registration Statementmeans a registration statement meeting therequirements

set forth in the Registration Rights Agreement and covering the resale by the Buyer of the

Draw Down Shares and the Shares.

RequiredApprovalsshallhavethemeaningascribedtosuchterminSection

3.1(e).

Rule144 �means �Rule �144promulgated �bytheCommission �pursuant �to �the

SecuritiesAct,assuchRulemaybeamendedfromtimetotime,oranysimilarruleor

regulationhereafteradoptedbytheCommissionhavingsubstantiallythesameeffectas

such Rule.

Rule424 �means �Rule �424promulgated �bytheCommission �pursuant �to �the

SecuritiesAct,assuchRulemaybeamendedfromtimetotime,oranysimilarruleor

regulationhereafteradoptedbytheCommissionhavingsubstantiallythesameeffectas

such Rule.

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

Securities means the Draw Down Shares and the Shares.

SecuritiesActmeanstheSecuritiesActof1933,asamended,andtherulesand

regulations promulgated thereunder.

5



SettlementshallmeanthedeliveryoftheDrawDownSharesintotheBuyers

DTC account via DTCs DWAC system in exchange for payment therefor.

Settlement Date shall have the meaning assigned to such term in Section 6.1(f).

SharesshallmeanthesharesofCommonStockdeliveredtotheBuyeratthe

InitialClosingandanyadditionalsharesofCommonStockissuedpursuanttoSection

2.3.

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

ShortSalesshallincludeallshortsalesasdefinedinRule200ofRegulation

SHO under the Exchange Act.

Subsidiary �means �anysubsidiaryofthe �Companyasset �forth �on �Schedule

3.1(a).

TradingDaymeansadayonwhichtheCommonStockistradedonaTrading

Market.

Trading ��Market ��means ��the ��following ��markets ��or ��exchanges ��on ��which ��the

CommonStockislistedorquotedfortradingonthedateinquestion:theNasdaqStock

Market, ��the ��New ��York ��Stock ��Exchange, ��NYSE ��MKT ��or ��the ��OTC ��Bulletin ��Board,

OTCQX,OTCQBandOTCPink(providedthatiftheCompany islistedonOTCPinkit

must maintain its SEC current reporting status).

Transaction ��Documents ��means ���this ��Agreement, ���the ��Registration ���Rights

Agreement �and �anyother �documents �or �agreements �executed �in �connection �with �the

transactions contemplated hereunder.

ARTICLE II.

PURCHASE AND SALE

2.1

PurchaseandSaleofDrawDownShares. ���Uponthetermsandsubjecttothe

conditionsofthisAgreement,theCompany maysellandissuetotheBuyerandtheBuyershall

be ��obligated ��to ��purchase ��from ��the ��Company, ��up ��to ��an ��aggregate ��of ��ten ��million ��Dollars

($10,000,000) worth of Common Stock (the Commitment Amount).

2.2

Initial �Closing. ���The �execution �and �deliveryof �this �Agreement �and �the �other

agreementsreferredtoherein(theInitialClosing)shalltakeplaceatsuchdateastheBuyer

andtheCompanymayagreeupon(theInitialClosingDate). ���Eachpartyshalldeliverthe

following documents, instruments and writings at or prior to the Initial Closing:

(a)

the �Company �shall �deliver �or �cause �to �be �delivered �to �the ��Buyer �the

following:

(i)

this Agreement duly executed by the Company;

6



(ii)

a �legal �opinion �of �Company �counsel �in �the �form �of �Exhibit �B

attached hereto;

(iii)

astockcertificateevidencinganumberofsharesofCompany's

Common �Stock �representing �immediately �post �issuance �9.99% �of �Company's

outstanding shares of Common Stock.

(iv)

the Registration Rights Agreement duly executed by the Company.

(b)

the �Buyer �shall �deliver �or �cause �to �be �delivered �to �the �Company �the

following:

(i)

this Agreement duly executed by the Buyer; and

(ii)

the Registration Rights Agreement duly executed by the Buyer.

2.3 Additional Shares.

(a)AftertheRegistrationStatementtobefiledwiththeSECpursuanttothis

Agreementgoeseffective,uponreachingamarketcapof$800,000ormore(andshouldbythe

timetheRegistrationStatementbecomeseffective suchmarketcapisreached,thenimmediately

upon effective notice from the SEC) the Company shall immediately issue to the Buyer shares of

its Common Stock representing 9.99% of its outstanding shares of Common Stock post issuance.

ShouldtheBuyerownanysharesoftheCompany'sCommonStockatthetimeofissuance,the

sharesalready ownedbytheBuyertogetherwiththesharestobeissuedpursuanttothisSection

2.3(a) ��shall ��represent ��9.99% ��of ��the ��Company's ��outstanding �shares ��of ��Common ��Stock ��post

issuance.TheBuyershallbeentitledtohavetheCompany,atBuyer'ssolediscretion,delaythe

issuance of Common Stock pursuant to this Section 2.3(a) for a period not to exceed 90 days.

(b)AftertheRegistrationStatementtobefiledwiththeSECpursuanttothis

Agreementgoes effective, upon reaching a market cap of $2,000,000 or more (and should by the

timetheRegistrationStatementbecomeseffective suchmarketcapisreached,thenimmediately

upon effective notice from the SEC) the Company shall immediately issue to the Buyer shares of

its Common Stock representing 9.99% of its outstanding shares of Common Stock post issuance.

ShouldtheBuyerownanysharesoftheCompany'sCommonStockatthetimeofissuance,the

sharesalready ownedbytheBuyertogetherwiththesharestobeissuedpursuanttothisSection

2.3(b) �shall �represent ��9.99% �of �the ��Company's ��outstanding �shares �of ��Common �Stock �post

issuance.TheBuyershallbeentitledtohavetheCompany,atBuyer'ssolediscretion,delaythe

issuance of Common Stock pursuant to this Section 2.3(b) for a period not to exceed 90 days.

(c)Should �by �the �time �the �Registration �Statement �to �be �filed �with �the �SEC

pursuanttothisAgreementbecomeseffective,amarketcapof$2,000,000ormoreisreached

thentheCompanyshallimmediatelyuponeffectivenoticefromtheSECissuesharesofits

CommonStocktotheBuyerinaccordancewithSection2.3(b)above.TheCompany shallissue

additionalsharesofCommonStockrepresenting$80,000basedontheFormulaPriceassoonas

theBuyershallnotifytheCompanythatsuchissuanceshallnotresultinitsownershipofmore

than9.99%oftheCompany'soutstandingsharesofCommonStock.TheBuyershallbeentitled

7



tohavetheCompany,atBuyer'ssolediscretion,delaytheissuanceofCommonStockpursuant

to this Section 2.3(c) for a period not to exceed 90 days.

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

3.1

RepresentationsandWarrantiesoftheCompany. ��Exceptassetforthunderthe

corresponding sectionoftheDisclosure Schedules,whichDisclosure Schedulesshallbe deemed

a part hereof and to qualify any representation or warranty otherwise made herein to the extent of

such disclosure, the Company hereby makes the representations and warranties set forth below to

the Buyer:

(a)

Subsidiaries. ��AllofthedirectandindirectsubsidiariesoftheCompany

aresetforthonSchedule3.1(a). ��TheCompanyowns,directlyorindirectly,allofthe

capitalstockorotherequity interestsofeachSubsidiaryfreeandclearofanyLiens,and

all the issued and outstanding shares of capital stock of each Subsidiary are validly issued

andarefullypaid,non-assessableandfreeofpreemptiveandsimilarrightstosubscribe

fororpurchasesecurities. ��IftheCompanyhasnosubsidiaries,thenallotherreferences

in the Transaction Documents to the Subsidiaries or any of them will be disregarded.

(b)

Organization ���and ���Qualification.

The ��Company ��and ���each ���of ���the

Subsidiariesisanentity duly incorporatedorotherwiseorganized,validly existing andin

goodstandingunderthelawsofthejurisdictionofitsincorporationororganization(as

applicable),withtherequisitepowerandauthoritytoownanduseitspropertiesand

assetsandtocarry onitsbusinessascurrently conducted. ��NeithertheCompany norany

Subsidiary is in violation or default of any of theprovisions of its respective certificate or

articlesofincorporation,bylawsorotherorganizationalorcharterdocuments. ��Eachof

theCompanyandtheSubsidiariesisdulyqualifiedtoconductbusinessandisingood

standingasaforeigncorporationorotherentityineachjurisdictioninwhichthenature

ofthebusinessconductedorpropertyownedbyitmakessuchqualificationnecessary,

exceptwherethefailuretobesoqualifiedoringoodstanding,asthecasemay be,could

not �have �or �reasonably �be �expected �to �result �in �(i) �a �material �adverse �effect �on �the

legality,validityorenforceabilityofanyTransactionDocument,(ii)amaterialadverse

effectontheresultsofoperations,assets,business,prospectsorcondition(financialor

otherwise)oftheCompanyandtheSubsidiaries,takenasawhole,or(iii)amaterial

adverseeffectontheCompanysabilitytoperforminanymaterialrespectonatimely

basisitsobligationsunderanyTransactionDocument(anyof(i),(ii)or(iii),aMaterial

Adverse Effect) and noProceeding has been instituted in any such jurisdiction revoking,

limitingorcurtailingorseekingtorevoke,limitorcurtailsuchpowerandauthorityor

qualification.

(c)

Authorization;Enforcement. ���TheCompanyhastherequisitecorporate

powerandauthoritytoenterintoandtoconsummatethetransactionscontemplatedby

eachoftheTransactionDocumentsandotherwisetocarryoutitsobligationshereunder

and thereunder. �The execution and delivery of each of the Transaction Documents by the

Company �and �the �consummation �by �it ��of �the �transactions �contemplated �hereby �and

therebyhavebeendulyauthorizedbyallnecessaryactiononthepartoftheCompany

8



and ��no ��further ��action ��is ��required ��by ��the ��Company, ��its ��board ��of ��directors ��or ��its

stockholders ��in ��connection ��therewith ��other ��than ��in ��connection ��with ��the ��Required

Approvals. ��EachTransactionDocumenthasbeen(or upondelivery willhave been)duly

executedbytheCompanyand,whendeliveredinaccordancewiththetermshereofand

thereof, �will �constitute �the �valid �and �binding �obligation �of �the �Companyenforceable

against �the �Company �in �accordance �with �its �terms �except �(i) �as �limited �by ��general

equitableprinciplesandapplicablebankruptcy,insolvency,reorganization,moratorium

and other laws ofgeneral application affecting enforcement of creditors rightsgenerally,

(ii) as limited by laws relating to the availability of specific performance, injunctive relief

or ��other ��equitable ��remedies ��and ��(iii) ��insofar ��as ��indemnification ��and ��contribution

provisions may be limited by applicable law.

(d)

No Conflicts. �The execution, delivery and performance of the Transaction

DocumentsbytheCompany,theissuanceandsaleoftheDrawDownSharesandthe

consummation ��by ��the ��Company ��of ��the ��other ��transactions ��contemplated ��hereby ��and

thereby donotand will not (i)conflict with or violate any provision of theCompanysor

any Subsidiaryscertificateorarticlesofincorporation,bylawsorotherorganizationalor

charterdocuments,or(ii)conflictwith,orconstituteadefault(oraneventthatwith

noticeorlapseoftimeorbothwouldbecomeadefault)under,resultinthecreationof

anyLienuponanyofthepropertiesorassetsoftheCompanyoranySubsidiary,orgive

to �others �anyrights �of �termination, �amendment, �acceleration �or �cancellation �(with �or

withoutnotice,lapseoftimeorboth)of,anyagreement,creditfacility,debtorother

instrument ���(evidencing ���a ���Company ��or ���Subsidiary ��debt ���or ���otherwise) ���or ���other

understanding �to �which �the �Companyor �any �Subsidiaryis �a �partyor �bywhich �any

propertyorassetoftheCompanyoranySubsidiaryisboundoraffected,or(iii)subject

to ��the ��Required ��Approvals, ��conflict ��with ��or ��result ��in ��a �violation ��of ��any �law, ��rule,

regulation, ��order, ��judgment, ��injunction, ��decree ��or ��other ��restriction ��of ��any ��court ��or

governmental �authority �to �which �the �Company �or �a �Subsidiary �is �subject �(including

federal and state securities laws and regulations), or by which any property or asset of the

CompanyoraSubsidiaryisboundoraffected;exceptinthecaseofeachofclauses(ii)

and (iii), such as could not have or reasonably be expected to result in a Material Adverse

Effect.

(e)

Filings,ConsentsandApprovals. ��TheCompanyisnotrequiredtoobtain

anyconsent,waiver,authorizationororderof,giveanynoticeto,ormakeanyfilingor

registrationwith,anycourtorotherfederal,state,localorothergovernmentalauthority

or �other �Person �in �connection �with �the �execution, �delivery �and �performance �by �the

Company �of �the �Transaction �Documents, �other �than �(i) �filings �required �pursuant �to

Section4.4ofthisAgreement,(ii)thefilingwiththeCommissionoftheRegistration

Statement ��and ��any ��amendments ��or ��supplements ��thereto, ��(iii) ��application(s) ��to ��each

applicableTradingMarketforthelistingoftheSecuritiesfortradingthereoninthetime

andmannerrequiredthereby,and(iv)thefilingofFormDwiththeCommissionand

such filings as are required to be made under applicable state securities laws (collectively,

the Required Approvals).

(f)

IssuanceoftheSecurities. ��TheSecuritiesaredulyauthorizedand,when

issuedandpaidforinaccordancewiththeapplicableTransactionDocuments,willbe

9



duly andvalidly issued,fully paidandnonassessable,free andclearofallLiensimposed

by �the �Company �other �than �restrictions �on �transfer �provided �for �in �the �Transaction

Documents. ����Capitalization. ����The �capitalization ��of ��the ��Company �is ��as ��set ��forth ��on

Schedule3.1(f). ��TheCompanyhasnotissuedanycapitalstocksinceitsmostrecently

filed �periodic �report �under �the �Exchange �Act, �other �than �pursuant �to �the �exercise �of

employeestockoptionsundertheCompanysstockoptionplans,theissuanceofshares

ofCommonStocktoemployeespursuanttotheCompanysemployeestockpurchase

plan ��and ��pursuant ��to ��the ��conversion ��or ��exercise ��of ��Common ��Stock ��Equivalents

outstandingasofthedateofthemostrecentlyfiledperiodicreportundertheExchange

Act. ��NoPersonhasanyrightoffirstrefusal,preemptiveright,rightofparticipation,or

any �similar ��right ��to ��participate ��in ��the ��transactions ��contemplated ��by �the �Transaction

Documents. ��ExceptasaresultofthepurchaseandsaleoftheSecurities,thereareno

outstandingoptions,warrants,scriptrightstosubscribeto,callsorcommitmentsofany

characterwhatsoeverrelatingto,orsecurities,rightsorobligationsconvertibleintoor

exercisable �or �exchangeable �for, �or �giving �any �Person �any �right �to �subscribe �for �or

acquire, �anysharesof �CommonStock,orcontracts, �commitments,understandings �or

arrangementsby whichtheCompany orany Subsidiary isormay becomeboundtoissue

additionalsharesofCommonStockorCommonStockEquivalents. ��Theissuanceand

saleoftheSecuritieswillnotobligatetheCompany toissuesharesofCommonStockor

othersecuritiestoanyPerson(otherthantheBuyer)andwillnotresultinarightofany

holderofCompanysecuritiestoadjusttheexercise,conversion,exchangeorresetprice

under ��any �of ��such ��securities. ��All ��of ��the ��outstanding �shares ��of ��capital ��stock ��of ��the

Company ��are ��validly ��issued, ��fully ��paid ��and ��nonassessable, ��have ��been ��issued ��in

compliance with all federal and state securities laws, and none of such outstanding shares

wasissuedinviolationofanypreemptiverightsorsimilarrightstosubscribeforor

purchasesecurities. ��Nofurtherapprovalorauthorizationofanystockholder,theBoard

of �Directors �of �the �Company �or �others �is �required �for �the �issuance �and �sale �of �the

Securities. ���Therearenostockholdersagreements,votingagreementsorothersimilar

agreementswithrespecttotheCompanyscapitalstocktowhichtheCompany isaparty

or, ��to ��the ��knowledge ��of ��the ��Company, ��between ��or ��among ��any ��of ��the ��Companys

stockholders.

(g)

SECReports;FinancialStatements. ��TheCompanyhasfiledallreports,

schedules,forms,statementsandotherdocumentsrequiredtobefiledbyitunderthe

Securities �Act �and �the �Exchange �Act, �including �pursuant �to �Section �13(a) �or �15(d)

thereof, �for �the �two ��years �preceding �the �date �hereof �(or �such �shorter �period �as �the

Company ��was ��required ��by ��law ��or ��regulation ��to ��file ��such ��material) ��(the ��foregoing

materials, including the exhibits thereto and documents incorporated by reference therein,

beingcollectivelyreferredto �herein �asthe �SEC �Reports)onatimelybasis �orhas

received a valid extension of such time of filing and has filed any such SEC Reports prior

totheexpirationofanysuchextension. ��Asoftheirrespectivedates,theSECReports

compliedinallmaterialrespectswiththerequirementsoftheSecuritiesActandthe

ExchangeAct,asapplicable,andnoneoftheSECReports,whenfiled,containedany

untrue statementofamaterialfactoromittedtostatea materialfactrequiredtobe stated

therein ��or ��necessary ��in ��order ��to ��make ��the ��statements ��therein, ��in ��the ��light ��of ��the

circumstancesunderwhichthey weremade,notmisleading. ��Thefinancialstatementsof

the Company included in the SEC Reports comply in all material respects with applicable

10



accountingrequirementsandtherulesandregulationsoftheCommissionwithrespect

theretoasineffectatthetimeoffiling. ��Suchfinancialstatementshavebeenpreparedin

accordance �with �United �States �generallyaccepted �accounting �principles �applied �on �a

consistent �basis �during �the �periods �involved �(GAAP), �except �as �may �be �otherwise

specified �in �such �financial �statements �or �the �notes �thereto �and �except �that �unaudited

financialstatementsmaynotcontainallfootnotesrequiredbyGAAP,andfairlypresent

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.

(h)

Material ��Changes; ��Undisclosed ��Events, ��Liabilities ��or ��Developments.

Since thedateofthelatestauditedfinancialstatementsincludedwithintheSECReports,

exceptasspecificallydisclosedinasubsequentSECReport,(i)therehasbeennoevent,

occurrenceordevelopmentthathashadorthatcouldreasonablybeexpectedtoresultin

a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or

otherwise)otherthan(A)tradepayablesandaccruedexpensesincurredintheordinary

courseofbusiness �consistentwithpast �practice �and(B)liabilitiesnotrequiredto �be

reflectedintheCompanysfinancialstatementspursuanttoGAAPordisclosedinfilings

madewiththeCommission,(iii)theCompanyhasnotaltereditsmethodofaccounting,

(iv)theCompanyhasnotdeclaredormadeanydividendordistributionofcashorother

property toitsstockholdersorpurchased,redeemedormadeany agreementstopurchase

orredeemanysharesofitscapitalstockand(v)theCompanyhasnotissuedanyequity

securitiestoanyofficer,directororAffiliate,exceptpursuanttoexistingCompany stock

optionplans. ��TheCompanydoesnothavependingbeforetheCommissionanyrequest

for �confidential �treatment �of �information. ���Except �for �the �issuance �of �the �Securities

contemplatedbythisAgreementorassetforthonSchedule3.1(h),noevent,liabilityor

developmenthasoccurredorexistswithrespecttotheCompanyoritsSubsidiariesor

their �respective �business, �properties, �operations �or �financial �condition, �that �would �be

requiredtobedisclosedby theCompany underapplicablesecuritieslawsatthetimethis

representation is made that has not been publicly disclosed at least 1 Trading Day prior to

the date that this representation is made.

(i)

Litigation. �There is no action, suit, inquiry, notice of violation, proceeding

orinvestigationpendingor,totheknowledgeoftheCompany,threatenedagainstor

affectingtheCompany,anySubsidiaryoranyoftheirrespectivepropertiesbeforeorby

any ��court, ��arbitrator, ��governmental ��or ��administrative ��agency �or ��regulatory ��authority

(federal,state,county,localorforeign)(collectively,anAction)which(i)adversely

affectsorchallengesthelegality,validityorenforceabilityofanyoftheTransaction

DocumentsortheSecuritiesor(ii)could,iftherewereanunfavorabledecision,haveor

reasonably beexpectedtoresultinaMaterialAdverseEffect. ��NeithertheCompany nor

anySubsidiary,noranydirectororofficerthereof,isorhasbeenthesubjectofany

Actioninvolvingaclaimofviolationoforliabilityunderfederalorstatesecuritieslaws

oraclaimofbreachoffiduciaryduty. ��Therehasnotbeen,andtotheknowledgeofthe

Company,thereisnotpendingorcontemplated,anyinvestigationbytheCommission

involving the Company or any current or former director or officer of theCompany. ��The

Commissionhasnotissuedanystoporderorotherordersuspendingtheeffectivenessof

11



anyregistrationstatementfiledbytheCompanyoranySubsidiaryundertheExchange

Act or the Securities Act.

(j)

LaborRelations. ��Nomateriallabordisputeexistsor,totheknowledgeof

theCompany,isimminentwithrespecttoanyoftheemployeesoftheCompanywhich

could �reasonably �be �expected �to �result �in �a �Material �Adverse �Effect. ����None �of �the

CompanysoritsSubsidiariesemployeesisamemberofaunionthatrelatestosuch

employees �relationship �with �the �Company, �and �neither �the �Company �or �any �of �its

Subsidiariesisapartytoacollectivebargainingagreement,andtheCompanyandits

Subsidiariesbelievethattheirrelationshipswiththeiremployeesaregood. ��Noexecutive

officer,totheknowledgeoftheCompany,is,orisnowexpectedtobe,inviolationof

anymaterialtermofanyemploymentcontract,confidentiality,disclosureorproprietary

information agreement or non-competition agreement, or any other contract or agreement

or any restrictivecovenant, and the continuedemployment ofeach suchexecutive officer

doesnotsubjecttheCompanyoranyofitsSubsidiariestoanyliabilitywithrespectto

anyoftheforegoingmatters. ��TheCompanyanditsSubsidiariesareincompliancewith

allU.S.federal,state,localandforeignlawsandregulationsrelatingtoemploymentand

employmentpractices,termsandconditionsofemploymentandwagesandhours,except

where ��the ��failure ��to ��be ��in ��compliance ��could ��not, ��individually �or ��in ��the ��aggregate,

reasonably be expected to have a Material Adverse Effect.

(k)

Compliance. ���NeithertheCompanynoranySubsidiary(i)isindefault

underorinviolationof(andnoeventhasoccurredthathasnotbeenwaivedthat,with

notice �or �lapse �of �time �or �both, �would �result �in �a �default �by �the �Company �or �any

Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that

it is in default under or that it is in violation of, any indenture, loan or credit agreement or

anyotheragreementorinstrumenttowhichitisapartyorbywhichitoranyofits

propertiesisbound(whetherornotsuchdefaultorviolationhasbeenwaived),(ii)isin

violation of any order of any court, arbitrator or governmental body, or (iii) is or has been

inviolationofanystatute,ruleorregulationofanygovernmentalauthority,including

withoutlimitationallforeign,federal,stateandlocallawsapplicabletoitsbusinessand

all �such �laws �that �affect �the �environment, �except �in �each �case �as �could �not �have �or

reasonably be expected to result in a Material Adverse Effect.

(l)

Regulatory ��Permits. ����The ��Company ��and ��the ��Subsidiaries ��possess ��all

certificates,authorizationsandpermitsissuedbytheappropriatefederal,state,localor

foreign ��regulatory ��authorities ��necessary ��to ��conduct ��their ��respective ��businesses ��as

describedintheSECReports,exceptwherethefailure topossesssuchpermitscouldnot

have ��or ��reasonably ��be ��expected ��to ��result ��in ��a ��Material ��Adverse ��Effect ��(Material

Permits), �and �neither �the �Company �nor �any �Subsidiary �has �received �any �notice �of

proceedings relating to the revocation or modification of any Material Permit.

(m)

Title ��to ��Assets. ����The ��Company ��and ��the ��Subsidiaries ��have ��good ��and

marketabletitleinfeesimpletoallrealpropertyownedbythemthatismaterialtothe

business �of �the �Company �and �the �Subsidiaries �and �good �and �marketable �title �in �all

personal property ownedby them that is materialto the business of theCompany andthe

Subsidiaries, in each case free and clear of all Liens, except for Liens as do not materially

12



affectthevalueofsuchpropertyanddonotmateriallyinterferewiththeusemadeand

proposed to be made of such property by the Company and the Subsidiaries and Liens for

thepaymentoffederal,stateorothertaxes,thepaymentofwhichisneitherdelinquent

nor ��subject ��to ��penalties. ����Any �real ��property ��and ��facilities ��held ��under ��lease ��by �the

CompanyandtheSubsidiariesareheldbythemundervalid,subsistingandenforceable

leases with which the Company and the Subsidiaries are in compliance.

(n)

Patents and Trademarks. �The Company and the Subsidiaries have, or have

rightstouse,allpatents,patentapplications,trademarks,trademarkapplications,service

marks,tradenames,tradesecrets,inventions,copyrights,licensesandotherintellectual

propertyrightsandsimilarrightsnecessaryormaterialforuseinconnectionwiththeir

respectivebusinessesasdescribedintheSECReportsandwhichthefailuretosohave

couldhaveaMaterialAdverseEffect(collectively,theIntellectualPropertyRights).

Neither the Company nor any Subsidiary has received anotice (written orotherwise) that

the �Intellectual �Property �Rights �used �by �the �Company �or �any �Subsidiary �violates �or

infringesupontherightsofanyPerson. ���TotheknowledgeoftheCompany,allsuch

Intellectual �PropertyRights �are �enforceable �and �there �is �no �existing �infringement �by

another ��Person ��of ��any ��of ��the ��Intellectual ��Property ��Rights. ����The ��Company ��and ��its

Subsidiaries ���have ���taken ���reasonable ���security ���measures ���to ���protect ���the ���secrecy,

confidentialityandvalueofalloftheirintellectualproperties,exceptwherefailuretodo

socouldnot,individuallyorintheaggregate,reasonablybeexpectedtohaveaMaterial

Adverse Effect.

(o)

Insurance. ��TheCompanyandtheSubsidiariesareinsuredbyinsurersof

recognizedfinancialresponsibilityagainstsuchlossesandrisksandinsuchamountsas

areprudentandcustomaryinthebusinessesinwhichtheCompanyandtheSubsidiaries

areengaged,including,butnotlimitedto,directorsandofficersinsurancecoverageat

leastequalto$5,000,000. ��NeithertheCompanynoranySubsidiaryhasanyreasonto

believethatitwillnotbeabletorenewitsexistinginsurancecoverageasandwhensuch

coverageexpiresortoobtainsimilarcoveragefromsimilarinsurersasmay benecessary

to continue its business without a significant increase in cost.

(p)

TransactionsWithAffiliatesandEmployees. ���Exceptassetforthinthe

SECReports,noneoftheofficersordirectorsoftheCompanyand,totheknowledgeof

the ��Company, ��none ��of ��the ��employees ��of ��the ��Company �is ��presently �a �party �to ��any

transactionwiththeCompanyoranySubsidiary(otherthanforservicesasemployees,

officersanddirectors),including any contract,agreementorotherarrangementproviding

for thefurnishing ofservicestoorby,providingforrentalofrealorpersonalproperty to

or ��from, ��or ��otherwise ��requiring ��payments ��to ��or ��from ��any �officer, ��director ��or ��such

employee or, to the knowledge of the Company,any entity in which any officer, director,

or �any �such �employee �has �a �substantial �interest �or �is �an �officer, �director, �trustee �or

partner, �in �each �case �in �excess �of �$60,000 �other �than �(i) �for �payment �of �salary �or

consultingfeesforservicesrendered,(ii)reimbursementforexpensesincurredonbehalf

oftheCompanyand(iii)forotheremployeebenefits,includingstockoptionagreements

under any stock option plan of the Company.

13



(q)

Sarbanes-Oxley; ��Internal ��Accounting ��Controls. ����The ��Company ��is ��in

materialcompliancewithallprovisionsoftheSarbanes-OxleyActof2002whichare

applicabletoitasoftheClosingDate. ��TheCompanyandtheSubsidiariesmaintaina

systemofinternalaccountingcontrolssufficienttoprovidereasonableassurancethat(i)

transactions ��are ��executed ��in ��accordance ��with ��managements ��general ��or ��specific

authorizations, ��(ii) ��transactions ��are ��recorded ��as ��necessary ��to ��permit ��preparation ��of

financialstatementsinconformitywithGAAPandtomaintainassetaccountability,(iii)

accesstoassetsispermittedonlyinaccordancewithmanagementsgeneralorspecific

authorization, ��and ��(iv) ��the ��recorded ��accountability ��for ��assets ��is ��compared ��with ��the

existingassetsatreasonableintervalsandappropriateactionistakenwithrespecttoany

differences.TheCompany hasestablisheddisclosure controlsandprocedures(asdefined

inExchangeActRules13a-15(e)and15d-15(e))fortheCompanyanddesignedsuch

disclosurecontrolsandprocedurestoensurethatinformationrequiredtobedisclosedby

the �Companyin �the �reports �it �files �or �submits �under �the �Exchange �Act �is �recorded,

processed, ���summarized ���and ���reported, ���within ���the ���time ���periods ���specified ���in ���the

Commissionsrulesandforms. ��TheCompanyscertifyingofficershaveevaluatedthe

effectivenessoftheCompanysdisclosurecontrolsandproceduresasoftheendofthe

periodcoveredby theCompanysmostrecently filedperiodicreportundertheExchange

Act (such date, the Evaluation Date). �The Company presented in its most recently filed

periodicreportundertheExchangeActtheconclusionsofthecertifyingofficersabout

theeffectivenessofthedisclosurecontrolsandproceduresbasedontheirevaluationsas

oftheEvaluationDate. ��SincetheEvaluationDate,therehavebeennochangesinthe

Companys �internal �control �over �financial �reporting �(as �such �term �is �defined �in �the

ExchangeAct)thathasmateriallyaffected,orisreasonablylikelytomateriallyaffect,

the Companys internal control over financial reporting.

(r)

CertainFees.Anybrokerageorfindersfeesorcommissionsthatare,or

willbe,payablebytheCompanytoanybroker,financialadvisororconsultant,finder,

placement agent, investment banker, bank or other Personwith respect to the transactions

contemplatedby theTransactionDocumentsshallbe borne solely by theCompany. ��The

Buyershallhavenoobligationwithrespecttoanyfeesorwithrespecttoanyclaims

made by or onbehalf ofother Persons for fees ofatype contemplated in this Section that

may ��be ��due ��in ��connection ��with ��the ��transactions ��contemplated ��by ��the ��Transaction

Documents.

(s)

PrivatePlacement.AssumingtheaccuracyoftheBuyerrepresentations

and warranties set forth in Section 3.2, no registration under the Securities Act is required

fortheofferandsaleoftheSecuritiesbytheCompanytotheBuyerascontemplated

hereby.TheissuanceandsaleoftheSecuritieshereunderdoesnotcontravenetherules

and regulations of the Trading Market.

(t)

InvestmentCompany.TheCompany isnot,andisnotanAffiliateof,and

immediatelyafterreceiptofpaymentfortheSecurities,willnotbeorbeanAffiliateof,

aninvestmentcompanywithinthemeaningoftheInvestmentCompanyActof1940,

asamended. ���TheCompanyshallconductitsbusinessinamannersothatitwillnot

become subject to the Investment Company Act.

14



(u)

RegistrationRights. ���OtherthantheBuyer,noPersonhasanyrightto

causetheCompany toeffecttheregistrationundertheSecuritiesActofanysecuritiesof

the Company.

(v)

ListingandMaintenanceRequirements. ��TheCompanysCommonStock

isregisteredpursuanttoSection12(b)or12(g)oftheExchangeAct,andtheCompany

hastakennoactiondesignedto,orwhichtoitsknowledgeislikely tohavetheeffectof,

terminatingtheregistrationoftheCommonStockundertheExchangeActnorhasthe

CompanyreceivedanynotificationthattheCommissioniscontemplatingterminating

suchregistration. ���TheCompanyhasnot,inthe12monthsprecedingthedatehereof,

receivednoticefromanyTradingMarketonwhichtheCommonStockisorhasbeen

listedorquotedtotheeffectthattheCompanyisnotincompliancewiththelistingor

maintenancerequirementsofsuchTradingMarket.TheCompanyis,andhasnoreason

tobelievethatitwillnotintheforeseeablefuturecontinuetobe,incompliancewithall

such listing and maintenance requirements.

(w)

Application �of �Takeover �Protections. ���The �Company �and �its �Board �of

Directorshavetakenall �necessaryaction, �ifany, �in �orderto �renderinapplicableany

controlshareacquisition,businesscombination,poisonpill(includinganydistribution

underarightsagreement)orothersimilaranti-takeoverprovisionundertheCompanys

Certificateof �Incorporation �(orsimilarcharterdocuments)orthelawsofitsstateof

incorporation that is or could become applicable to theBuyer asa result of theBuyer and

theCompanyfulfillingtheirobligationsorexercisingtheirrightsundertheTransaction

Documents,includingwithoutlimitationasaresultoftheCompanysissuanceofthe

Securities and the Buyers ownership of the Securities.

(x)

Disclosure. ��Exceptwithrespecttothematerialtermsandconditionsof

the �transactions �contemplated �bythe �Transaction �Documents, �the �Companyconfirms

that,neitheritnorany other Personacting onitsbehalfhasprovidedany oftheBuyeror

their ��agents ��or ��counsel ��with ��any ��information ��that ��it ��believes ��constitutes ��or ��might

constitutematerial,non-publicinformation. ����TheCompanyunderstandsandconfirms

that �the �Buyer �will �rely �on �the �foregoing �representation �in �effecting �transactions �in

securitiesoftheCompany. ��AlldisclosurefurnishedbyoronbehalfoftheCompanyto

the Buyerregarding theCompany, its businessand the transactions contemplated hereby,

including theDisclosureSchedulestothisAgreement,withrespecttotherepresentations

andwarrantiesmadehereinaretrueandcorrectwithrespecttosuchrepresentationsand

warrantiesanddonotcontainany untruestatementofamaterialfactoromittostateany

materialfactnecessaryinordertomakethestatementsmadetherein, �inlightofthe

circumstances ��under ��which ��they ��were ��made, ��not ��misleading. ��The ��press ��releases

disseminated �by �the �Company �during �the �twelve �months �preceding �the �date �of �this

Agreementtakenasawholedonotcontainanyuntruestatementofamaterialfactor

omit to state a material fact required to be stated therein or necessary in order to make the

statements,inlightofthecircumstancesunderwhichtheyweremadeandwhenmade,

notmisleading. ��TheCompanyacknowledgesandagreesthattheBuyerneithermakes

nor ��has ��made ��any ��representations ��or ��warranties ��with ��respect ��to ��the ��transactions

contemplated hereby other than those specifically set forth in Section 3.2 hereof.

15



(y)

No ���Integrated ���Offering. ���Assuming ���the ���accuracy ���of ���the ���Buyers

representationsandwarrantiessetforthinSection3.2,neithertheCompany,noranyof

itsaffiliates,noranyPersonactingonitsortheirbehalfhas,directlyorindirectly,made

anyoffersorsalesofanysecurityorsolicitedanyofferstobuyanysecurity,under

circumstancesthatwouldcausethisofferingoftheSecuritiestobeintegratedwithprior

offerings ��by ��the ��Company ��for ��purposes ��of ��the ��Securities ��Act ��or ��any ��applicable

shareholderapprovalprovisionsofanyTradingMarketonwhichany ofthesecuritiesof

the Company are listed or designated.

(z)

Solvency. ���BasedonthefinancialconditionoftheCompanyasofthe

ClosingDateaftergivingeffecttothereceiptbytheCompanyoftheproceedsfromthe

sale �of �the �Securities �hereunder, �(i) �the �fair �saleable �value �of �the �Companys �assets

exceedstheamountthatwillberequiredtobepaidonorinrespectoftheCompanys

existing debts and other liabilities (including known contingent liabilities) as they mature;

(ii)theCompanysassetsdonotconstituteunreasonablysmallcapitaltocarryonits

businessasnowconductedandasproposedtobeconductedincludingitscapitalneeds

takingintoaccounttheparticularcapitalrequirementsofthebusinessconductedbythe

Company, and projected capital requirements and capital availability thereof; and (iii) the

current �cash �flow �of �the �Company, �together �with �the �proceeds �the �Company �would

receive,wereittoliquidateallofitsassets,aftertakingintoaccountallanticipateduses

ofthecash,wouldbesufficienttopayallamountsonorinrespectofitsliabilitieswhen

suchamountsarerequiredtobepaid. ���TheCompanydoesnotintendtoincurdebts

beyonditsabilitytopaysuchdebtsastheymature(takingintoaccountthetimingand

amounts �of �cash �to �be �payable �on �or �in �respect �of �its �debt). ���The �Companyhas �no

knowledgeofanyfactsorcircumstanceswhichleadittobelievethatitwillfilefor

reorganization ��or ��liquidation ��under ��the ��bankruptcy ��or ��reorganization ��laws ��of ��any

jurisdictionwithinoneyearfromtheClosingDate. ��TheSECReportssetforthasofthe

datesthereofalloutstandingsecuredandunsecuredIndebtednessoftheCompany orany

Subsidiary,orforwhichtheCompanyoranySubsidiaryhascommitments. ���Forthe

purposesofthisAgreement,Indebtednessshallmean(a)anyliabilitiesforborrowed

money �or �amounts �owed �in �excess �of ��$150,000 �(other �than �trade �accounts �payable

incurredintheordinarycourseofbusiness),(b)allguaranties,endorsementsandother

contingentobligationsinrespectofIndebtednessofothers,whetherornotthesameare

orshouldbereflectedintheCompanysbalancesheet �(orthenotesthereto), �except

guarantiesbyendorsementofnegotiableinstrumentsfordepositorcollectionorsimilar

transactionsintheordinarycourseofbusiness;and(c)thepresentvalueofanylease

payments in excess of $150,000 due under leases required to be capitalized in accordance

withGAAP. ��NeithertheCompanynoranySubsidiaryisindefaultwithrespecttoany

Indebtedness.

(aa) �����Tax �Status. ���Except �for �matters �that �would �not, �individuallyor �in �the

aggregate,haveorreasonablybeexpectedtoresultinaMaterialAdverseEffect,the

CompanyandeachSubsidiaryhasfiledallnecessaryfederal,stateandforeignincome

andfranchisetaxreturnsandhaspaidoraccruedalltaxesshownasduethereon,andthe

Companyhasnoknowledgeofataxdeficiencywhichhasbeenassertedorthreatened

against the Company or any Subsidiary.

16



(bb) �����NoGeneralSolicitation. ��NeithertheCompanynoranypersonactingon

behalfoftheCompanyhasofferedorsoldanyoftheSecuritiesbyanyformofgeneral

solicitationorgeneraladvertising. ��TheCompanyhasofferedtheSecuritiesforsaleonly

to the Buyer.

(cc) �����Foreign Corrupt Practices. ��Neither the Company,nor to theknowledge of

the Company, any agentor other person acting onbehalf of the Company,has (i) directly

orindirectly,used �anyfundsforunlawful �contributions,gifts, �entertainmentorother

unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful

paymenttoforeignordomesticgovernmentofficialsoremployeesortoanyforeignor

domesticpoliticalpartiesorcampaignsfromcorporatefunds,(iii)failedtodisclosefully

anycontributionmadebytheCompany(ormadebyanypersonactingonitsbehalfof

which �the �Companyis �aware) �which �is ���in �violation �of �law, �or �(iv) �violated �in �any

material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.

(dd) �����Accountants. ����The ��Companys ��accountants ��are ��set ��forth ��on ��Schedule

3.1(dd) ��of ��the ��Disclosure ��Schedule. �����To ��the ��knowledge ��of ��the ��Company, ��such

accountants,whotheCompanyexpectswillexpresstheiropinionwithrespecttothe

financialstatementstobeincludedintheCompanysAnnualReportonForm10-Kfor

theyearendingDecember31,2014,arearegisteredpublicaccountingfirmasrequired

by the Exchange Act.

(ee) �����Acknowledgment ��Regarding ��Buyers ��Purchase ��of ��Securities.

The

CompanyacknowledgesandagreesthattheBuyerisactingsolelyinthecapacityofan

arms �length �Buyer �with �respect �to �the �Transaction �Documents �and �the �transactions

contemplatedthereby. ��TheCompanyfurtheracknowledgesthattheBuyerisnotacting

as �afinancial �advisororfiduciaryoftheCompany(orin �anysimilar �capacity)with

respecttotheTransactionDocumentsandthetransactionscontemplatedthereby andany

advice given by theBuyer orany of its respective representatives or agents in connection

with �theTransactionDocumentsandthetransactionscontemplatedtherebyis �merely

incidentaltotheBuyerspurchaseoftheSecurities. ��TheCompanyfurtherrepresentsto

the �Buyer �that �the �Companys �decision �to �enter �into �this �Agreement ��and �the �other

Transaction �Documents �has �been �based �solely �on �the �independent �evaluation �of �the

transactions contemplated hereby by the Company and its representatives.

(ff)

ManipulationofPrice. ��TheCompanyhasnot,andtoitsknowledgeno

oneactingonitsbehalfhas,(i)taken,directly orindirectly,any actiondesignedtocause

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, �(ii) �sold, �bid �for,

purchased, or, paid any compensation for soliciting purchases of, any of the Securities, or

(iii) �paid �or �agreed �to �payto �anyperson �anycompensation �for �soliciting �another �to

purchaseanyothersecuritiesoftheCompany,otherthan,inthecaseofclauses(ii)and

(iii), ��compensation ��paid ��to ��the ��Companys ��placement ��agent ��in ��connection ��with ��the

placement of the Securities.

(gg) �����AcknowledgementRegardingBuyersTradingActivity. ��Anythinginthis

Agreement �or �elsewhere �herein �to �the �contrary �notwithstanding, �it �is �understood �and

17



acknowledged by the Company that Buyer has neither been asked to agree, nor has Buyer

agreed,todesistfrompurchasingorsellinglongsecuritiesoftheCompany,including,

without limitation, during the periods that the value of the Draw Down Shares deliverable

inconnectionwithaDrawDownarebeingdetermined. ��TheCompanyacknowledges

thatsuchaforementionedactivitiesdonotconstituteabreachofanyoftheTransaction

Documents.

3.2

Representations ��and ��Warranties ��of ��the ��Buyer. ����Buyer ��hereby �represents ��and

warrants as of the date hereof and as of each Closing Date to the Company as follows:

(a)

Organization; ��Authority. ����Buyer ��is ��an ��entity ��duly ��organized, ��validly

existingandingoodstandingunderthelawsofthejurisdictionofitsorganizationwith

fullright,corporateorpartnershippowerandauthoritytoenterintoandtoconsummate

thetransactionscontemplatedbytheTransactionDocumentsandotherwisetocarryout

its obligationshereunder and thereunder. The execution,delivery and performance by the

BuyerofthetransactionscontemplatedbythisAgreementhavebeendulyauthorizedby

allnecessarycorporateorsimilaractiononthepartoftheBuyer. ���EachTransaction

Document to which it is a party has been duly executed by the Buyer, and when delivered

bytheBuyerinaccordancewiththetermshereof,willconstitutethevalidandlegally

binding �obligation �of �the �Buyer, �enforceable �against �it �in �accordance �with �its �terms,

except ��(i) ��as ��limited ��by ��general ��equitable ��principles ��and ��applicable ��bankruptcy,

insolvency,reorganization,moratoriumandotherlawsofgeneralapplicationaffecting

enforcement ��of ��creditors ��rights ��generally, ��(ii) ��as ��limited ��by ��laws ��relating ��to ��the

availability ofspecificperformance,injunctiverelief orother equitableremediesand(iii)

insofar as indemnification and contribution provisions may be limited by applicable law.

(b)

Own ��Account. �����Buyer ��understands ��that ��the ��Shares ��are ��restricted

securitiesandhavenotbeenregisteredundertheSecuritiesActoranyapplicablestate

securitieslawandisacquiring theShares ��asprincipalfor itsownaccountandnotwitha

viewtoorfordistributingorresellingsuchSharesoranypartthereofinviolationofthe

Securities ��Act ��or ��any ��applicable ��state ��securities ��law, ��has ��no ��present ��intention ��of

distributinganyofsuchSharesinviolationoftheSecuritiesActoranyapplicablestate

securitieslawandhasnodirectorindirectarrangementorunderstandingswithany other

persons �to �distribute �or �regarding �the �distribution �of �such �Shares �in �violation �of �the

SecuritiesActorany applicablestatesecuritieslaw(thisrepresentationandwarranty not

limitingtheBuyersrighttoselltheSecuritiespursuanttotheRegistrationStatementor

otherwise �in �compliance �with �applicable �federal �and �state �securities �laws). ���Buyer �is

acquiring the Shares hereunder in the ordinary course of its business.

(c)

BuyerStatus. ��At the time theBuyer wasofferedthe Shares,it was,and at

thedatehereofitis,and90daysfollowingtheInitialClosing,itwillbeeither:(i)an

accreditedinvestorasdefinedinRule501undertheSecuritiesActor(ii)aqualified

institutional buyer as defined in Rule 144A(a) under the Securities Act

(d)

Experience ���of ���Buyer. ���Buyer, ���either ���alone ���or ���together ���with ���its

representatives, ��has ��such ��knowledge, ��sophistication ��and ��experience ��in ��business ��and

financialmatterssoastobecapableofevaluatingthemeritsandrisksoftheprospective

18



investment in the Securities, and has so evaluated the merits and risks of such investment.

BuyerisabletobeartheeconomicriskofaninvestmentintheSecuritiesand,atthe

present time, is able to afford a complete loss of such investment.

(e)

GeneralSolicitation. ��BuyerisnotpurchasingtheSecuritiesasaresultof

any ��advertisement, ��article, ��notice ��or ��other ��communication ��regarding ��the ��Securities

publishedinanynewspaper,magazineorsimilarmediaorbroadcastovertelevisionor

radio ��or ��presented ��at ��any ��seminar ��or ��any ��other ��general ��solicitation ��or ��general

advertisement.

(f)

ShortSalesandConfidentialityPriortotheDateHereof. ��Otherthanthe

transactioncontemplatedhereunder,theBuyerhasnotdirectlyorindirectly,norhasany

Person acting on behalf of or pursuant to any understanding withthe Buyer, executed any

disposition,includingShortSales, inthesecuritiesoftheCompanyduringtheperiod

commencingfromthetimethattheBuyerfirstreceivedatermsheet(writtenororal)

from the Company or any other Person setting forth the material terms of the transactions

contemplatedhereunderuntilthedatehereof(DiscussionTime). ��Notwithstandingthe

foregoing, if the Buyer isa multi-managed investment vehicle whereby separate portfolio

managers manage separate portions ofthe Buyer'sassets and the portfolio managers have

no ��direct ��knowledge ��of ��the ��investment ��decisions ��made ��by ��the ��portfolio ��managers

managingotherportionsoftheBuyer'sassets,therepresentationsetforthaboveshall

onlyapplywithrespecttotheportionofassetsmanagedbytheportfoliomanagerthat

made �the �investment �decision �to �purchase �the �Securities �covered �bythis �Agreement.

Other �than �to �other �Persons �party �to �this �Agreement, �the �Buyer �has �maintained �the

confidentiality ofalldisclosuresmadetoitinconnectionwiththistransaction(including

the existence and terms of this transaction).

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

4.1

Transfer Restrictions.

(a)

The �Securities �mayonlybe �disposed �of �in �compliance �with �state �and

federalsecuritieslaws. ��InconnectionwithanytransferofSecuritiesotherthanpursuant

to an effective registration statement or Rule 144, to the Company or to anaffiliate ofthe

BuyerorinconnectionwithapledgeascontemplatedinSection4.1(b),theCompany

mayrequirethe �transferorthereofto �provideto �theCompanyanopinionofcounsel

selected �by �the �transferor �and �reasonably �acceptable �to �the �Company, �the �form �and

substanceofwhichopinionshallbe reasonably satisfactory totheCompany,totheeffect

thatsuchtransferdoesnotrequireregistrationofsuchtransferredSecuritiesunderthe

Securities Act. ��As a condition of transfer, any such transferee shall agree in writing to be

boundbythetermsofthisAgreementandshallhavetherightsoftheBuyerunderthis

Agreement and the Registration Rights Agreement, as to issued Securities only.

(b)

TheBuyeragreestotheimprinting,solongasisrequiredby thisSection

4.1, of a legend on any of the Securities in the following form:

19



THESE ���SECURITIES ���HAVE ���NOT ���BEEN ���REGISTERED ���WITH ���THE

SECURITIES ��AND ��EXCHANGE ��COMMISSION ��OR ��THE ��SECURITIES

COMMISSION �OF �ANY �STATE �IN �RELIANCE �UPON �AN �EXEMPTION

FROM ��REGISTRATION ��UNDER ��THE ��SECURITIES ��ACT ��OF ��1933, ��AS

AMENDED(THESECURITIESACT),AND,ACCORDINGLY,MAYNOT

BE ��OFFERED ���OR ��SOLD ��EXCEPT ��PURSUANT ��TO ��AN ��EFFECTIVE

REGISTRATION ���STATEMENT ���UNDER ���THE ���SECURITIES ���ACT ���OR

PURSUANT ���TO ���AN ���AVAILABLE ���EXEMPTION ���FROM, ���OR ���IN ���A

TRANSACTION

NOT

SUBJECT

TO,

THE

REGISTRATION

REQUIREMENTS ��OF ��THE ��SECURITIES ��ACT ��AND ��IN ��ACCORDANCE

WITHAPPLICABLESTATESECURITIES �LAWS �AS �EVIDENCED �BYA

LEGAL ��OPINION ��OF ��COUNSEL ��TO ��THE ��TRANSFEROR ��TO ��SUCH

EFFECT, ���THE ���SUBSTANCE ���OF ��WHICH ���SHALL ���BE ���REASONABLY

ACCEPTABLE ��TO ��THE ��COMPANY. �����THESE ��SECURITIES ��MAY ��BE

PLEDGED �INCONNECTIONWITHA �BONAFIDEMARGIN �ACCOUNT

WITH ��A ��REGISTERED ��BROKER-DEALER ��OR ��OTHER ��LOAN ��WITH ��A

FINANCIALINSTITUTIONTHATISANACCREDITEDINVESTORAS

DEFINED ��IN �RULE �501(a) �UNDER �THE �SECURITIES �ACT ��OR �OTHER

LOAN SECURED BY SUCH SECURITIES.

TheCompanyacknowledgesandagreesthattheBuyermayfromtimetotime

pledgepursuanttoabonafidemarginagreementwitharegisteredbroker-dealerorgrant

asecurityinterestinsomeoralloftheSecuritiestoafinancialinstitutionthatisan

accreditedinvestorasdefinedinRule501(a)undertheSecuritiesActandwhoagrees

tobeboundbytheprovisionsofthisAgreementandtheRegistrationRightsAgreement

and,ifrequiredunderthetermsofsucharrangement,theBuyermaytransferpledgedor

secured Securities to thepledgees or secured parties. �Such a pledge or transfer would not

besubject �to �approvaloftheCompanyandno �legal �opinionoflegal �counsel �ofthe

pledgee,securedpartyorpledgorshallberequiredinconnectiontherewith. ��Further,no

noticeshallberequired �ofsuchpledge. ���Atthe �Buyersexpense,the �Companywill

execute �and �deliver �such �reasonable �documentation �as �a �pledgee �or �secured �partyof

Securities ��may ��reasonably ��request ��in ��connection ��with ��a ��pledge ��or ��transfer ��of ��the

Securities, ��including, ��if ��the ��Securities ��are ��subject ��to ��registration ��pursuant ��to ��the

RegistrationRights �Agreement,the �preparation �andfilingof �anyrequiredprospectus

supplementunderRule424(b)(3)undertheSecuritiesActorotherapplicableprovision

of the Securities Act to appropriately amend the list of Selling Stockholders thereunder.

(c)

CertificatesevidencingtheDrawDownSharesandtheSharesshallnot

contain ��any ��legend ��(including ��the ��legend ��set ��forth ��in ��Section ��4.1(b)), ��(i) ��while ��a

registrationstatement(includingtheRegistrationStatement)coveringtheresaleofsuch

securityiseffectiveundertheSecuritiesAct,or(ii)followinganysaleofsuchDraw

DownSharesorSharespursuanttoRule144,or(iii)ifsuchlegendisnotrequiredunder

applicable ��requirements ��of ��the ��Securities ��Act ��(including ��judicial ��interpretations ��and

pronouncementsissuedbythestaffoftheCommission). ��TheCompanyshallcauseits

counsel �to �issue �a �legal �opinion �to �the �Companys �transfer �agent �promptlyafter �the

EffectiveDateifrequiredbytheCompanystransferagenttoeffecttheremovalofthe

legend hereunder. ��The Company agrees that following the Effective Dateor at such time

20



assuchlegendisnolongerrequiredunderthisSection4.1(c),itwill,nolaterthan3

(three) ��Trading ��Days ��following ��the ��delivery ��by ��the ��Buyer ��to ��the ��Company ��or ��the

CompanystransferagentofacertificaterepresentingDrawDownShares,orShares,as

thecasemaybe,issuedwitharestrictivelegend(suchthirdTradingDay,theLegend

RemovalDate),deliverorcausetobedeliveredtotheBuyeracertificaterepresenting

suchsharesthatisfreefromallrestrictiveandotherlegends.AllDrawDownShares

shall �be �delivered �without �anyrestrictive �legends. �The �Companymay �not �make �any

notationonitsrecordsorgiveinstructionstoanytransferagentoftheCompanythat

enlargetherestrictionsontransfersetforthinthisSection. ���CertificatesforSecurities

subjecttolegendremovalhereundershallbetransmittedbythetransferagentofthe

CompanytotheBuyerbycreditingtheaccountoftheBuyersbroker(asindicatedby

Buyer) with the Depository Trust Company system.

(d)

In addition to the Buyers other available remedies, the Company shall pay

totheBuyer,incash,aspartialliquidateddamagesandnotasapenalty,foreach$1,000

ofDrawDownShares,orShares(basedontheClosingPriceoftheCommonStockon

thedatesuchSecuritiesaresubmittedtotheCompanystransferagent)deliveredfor

removaloftherestrictivelegendandsubjecttoSection4.1(c),$7.50perTradingDay

(increasing to $15per Trading Day 5 (five) Trading Days after such damages have begun

toaccrue)foreachTradingDayafter2ndTradingDayfollowingtheLegendRemoval

Dateuntilsuchcertificateisdeliveredwithoutalegend.Nothinghereinshalllimitthe

BuyersrighttopursueactualdamagesfortheCompanysfailuretodelivercertificates

representinganySecuritiesasrequiredbytheTransactionDocuments,andtheBuyer

shallhavetherighttopursueallremediesavailabletoitatlaworinequityincluding,

without limitation, a decree of specific performance and/or injunctive relief.

(e)

Buyeragreesthattheremovaloftherestrictivelegendfromcertificates

representingSecuritiesassetforthinthisSection4.1ispredicatedupontheCompanys

reliance ��that ��the ��Buyer ��will ��sell ��any ��Securities ��pursuant ��to ��either ��the ��registration

requirements ��of ��the ��Securities ��Act, ��including ��any ��applicable ��prospectus ��delivery

requirements, or an exemption therefrom.

4.2

FurnishingofInformation. ��AslongasBuyerownsanySecurities,theCompany

covenantstotimelyfile(orobtainextensionsinrespectthereofandfilewithintheapplicable

grace period) all reports required to be filed by the Company after the date hereof pursuant to the

ExchangeAct. ��AslongastheBuyerownsany Securities,iftheCompany isnotrequiredtofile

reportspursuanttotheExchangeAct,itwillprepare andfurnishtotheBuyerandmake publicly

available in accordance with Rule 144(c) such information as is required for theBuyer to sell the

Securities under Rule 144. The Company further covenants that it will take such further action as

Buyermayreasonablyrequest,totheextentrequiredfromtimetotimetoenabletheBuyerto

sellsuchSecuritieswithoutregistrationundertheSecuritiesActwithintherequirementsofthe

exemption provided by Rule 144.

4.3

Integration. ��TheCompanyshallnotsell,offerforsaleorsolicitofferstobuyor

otherwisenegotiateinrespectofany security (asdefinedinSection2oftheSecuritiesAct)that

wouldbeintegratedwiththeofferorsaleoftheSecuritiesinamannerthatwouldrequirethe

registrationundertheSecuritiesActofthesaleoftheSecuritiestotheBuyerorthatwouldbe

21



integratedwiththeofferorsaleoftheSecuritiesforpurposesoftherulesandregulationsofany

Trading Market such thatit would require shareholder approval prior to theclosing of such other

transaction ��unless ��shareholder ��approval ��is ��obtained ��before ��the ��closing ��of ��such ��subsequent

transaction.

4.4

SecuritiesLawsDisclosure;Publicity. ��TheCompanyshall,by5:30p.m.Eastern

time on the fourth Trading Day immediately following the date hereof, issue a Current Report on

Form 8-K, disclosing the material terms of the transactions contemplated hereby, and shall attach

theTransactionDocumentsthereto. ��TheCompanyandtheBuyershallconsultwitheachother

inissuinganyotherpressreleaseswithrespecttothetransactionscontemplatedhereby,and

neithertheCompanynortheBuyershallissueanysuchpressreleaseorotherwisemakeany

such �public �statement �without �the �prior �consent �of �the �Company, �with �respect �to �anypress

releaseoftheBuyer,orwithoutthepriorconsentoftheBuyer,withrespecttoany pressrelease

oftheCompany,whichconsentshallnotunreasonablybewithheldordelayed,exceptifsuch

disclosure is required by law, in whichcase the disclosing party shall promptly providethe other

party with prior notice of such public statement or communication.

4.5

Shareholder RightsPlan. ��Noclaimwillbe made orenforcedby theCompanyor,

withtheconsentoftheCompany,anyotherPerson,thattheBuyerisanAcquiringPerson

under any control share acquisition, business combination, poison pill (including any distribution

underarightsagreement)orsimilaranti-takeoverplanorarrangementineffectorhereafter

adopted by the Company, or that the Buyer could be deemed to trigger the provisions of any such

plan or arrangement, by virtue of receiving Securities under the Transaction Documents or under

any other agreement between the Company and the Buyer.

4.6

Non-Public Information. ��Except with respect to the material terms and conditions

ofthetransactionscontemplatedbytheTransactionDocuments,theCompanycovenantsand

agrees that neither it nor any other Person acting on its behalf will provide the Buyer or its agents

or �counsel �with �any �information �that �the �Company �believes �constitutes �material �non-public

information, unless prior thereto the Buyer shall have executed a written agreement regarding the

confidentialityanduseofsuchinformation. ��TheCompanyunderstandsandconfirmsthatthe

Buyershallberelyingontheforegoingrepresentationsineffectingtransactionsinsecuritiesof

the Company.

4.7

Indemnification �of �Buyer. �����Subject �to �the �provisions �of �this �Section4.7, �the

CompanywillindemnifyandholdtheBuyeranditsdirectors,officers,shareholders,members,

partners,employeesandagents(andanyotherPersonswithafunctionallyequivalentroleofa

Personholdingsuchtitlesnotwithstandingalackofsuchtitleoranyothertitle),eachPerson

who controls the Buyer (within the meaning of Section 15 of the Securities Act and Section 20 of

the ��Exchange ��Act), ��and ��the ��directors, ��officers, ��shareholders, ��agents, ��members, ��partners ��or

employees(andanyotherPersonswithafunctionallyequivalentroleofaPersonholdingsuch

titlesnotwithstandingalackofsuchtitleoranyothertitle)ofsuchcontrollingpersons(each,a

BuyerParty)harmlessfromanyandalllosses,liabilities,obligations,claims,contingencies,

damages,costsandexpenses,includingalljudgments,amountspaidinsettlements,courtcosts

andreasonableattorneysfeesandcostsofinvestigationthatanytheBuyerPartymaysufferor

incur �as �a �result �of �or �relating �to �(a) �any �breach �of �any �of �the �representations, �warranties,

covenantsoragreementsmadebytheCompanyinthisAgreementorintheotherTransaction

22



Documents �or �(b) �any �action �instituted �against ��the �Buyer, �or �any �of �its �Affiliates, �by �any

stockholderoftheCompanywhoisnotanAffiliateoftheBuyer,withrespecttoanyofthe

transactionscontemplatedbytheTransactionDocuments(unlesssuchactionisbasedupona

breachoftheBuyersrepresentations,warrantiesorcovenantsundertheTransactionDocuments

oranyagreementsorunderstandingstheBuyermayhavewithanysuchstockholderorany

violationsbytheBuyerofstateorfederalsecuritieslawsoranyconductbytheBuyerwhich

constitutesfraud,grossnegligence,willfulmisconductormalfeasance). ��Ifanyactionshallbe

broughtagainstanyBuyerPartyinrespectofwhichindemnitymaybesoughtpursuanttothis

Agreement,theBuyerPartyshallpromptlynotifytheCompanyinwriting,andtheCompany

shallhavetherighttoassumethedefensethereofwithcounselofitsownchoosingreasonably

acceptabletotheBuyerParty. ��AnyBuyerPartyshallhavetherighttoemploy separatecounsel

inanysuchactionandparticipateinthedefensethereof,butthefeesandexpensesofsuch

counselshallbeattheexpenseoftheBuyerPartyexcepttotheextentthat(i)theemployment

thereofhasbeenspecificallyauthorizedbytheCompanyinwriting,(ii)theCompanyhasfailed

afterareasonableperiodoftimetoassumesuchdefenseandtoemploycounselor(iii)insuch

actionthereis,inthereasonableopinionofsuchseparatecounsel,amaterialconflictonany

material issue between the position of the Company and the position of the Buyer Party, in which

casetheCompany shallberesponsiblefor thereasonablefeesandexpensesofnomore than one

such separate counsel. ��The Company will not be liable to any Buyer Party under this Agreement

(i)foranysettlementbytheBuyerPartyeffectedwithouttheCompanyspriorwrittenconsent,

whichshallnotbeunreasonablywithheldordelayed;or(ii)totheextent,butonlytotheextent

thataloss,claim,damageorliabilityisattributabletoanyBuyerPartysbreachofanyofthe

representations, warranties, covenants or agreements made by theBuyer Party in this Agreement

or in the other Transaction Documents.

4.8

ReservationofCommonStock.Asofthedatehereof,theCompanyhasreserved

andtheCompanyshallcontinuetoreserveandkeepavailableatalltimes,freeofpreemptive

rights, a sufficient number ofshares of CommonStock for the purpose ofenabling the Company

to issue Draw Down Shares and Shares pursuant to this Agreement.

4.9

ListingofCommonStock. ���TheCompanyherebyagreestousebesteffortsto

maintainthelistingoftheCommonStockonaTradingMarket, �andassoonas �reasonably

practicablefollowingtheInitialClosing(butnotlaterthantheEffectiveDate)tolistallofthe

DrawDownSharesandtheSharesonsuchTradingMarket.TheCompanyfurtheragrees,ifthe

Company applies to have the Common Stock traded on any other Trading Market, it will include

insuchapplicationalloftheDrawDownSharesandtheSharesandwilltakesuchotheraction

asisnecessarytocausealloftheDrawDownSharesandtheSharestobelistedonsuchother

Trading Market as promptly as possible. ��The Company will take all action reasonably necessary

tocontinuethelisting andtrading ofitsCommon Stockona Trading Marketandwillcomply in

allrespectswiththeCompanysreporting,filingandotherobligationsunderthebylawsorrules

of the Trading Market.

4.10 ����Short �Sales �and �ConfidentialityAfter �the �Date �Hereof. ���Buyer �covenants �that

neitheritnoranyAffiliateactingonitsbehalforpursuanttoanyunderstandingwithitwill,

directly or indirectly,execute any Net Short Sales (as defined below) from the time starting upon

receiptofaDrawDownNoticeandendinguponreceiptoftheDrawDownShares. ��Buyer

covenantsthatuntilsuchtimeasthetransactionscontemplatedbythisAgreementarepublicly

23



disclosed ��by ��the ��Company ��as ��described ��in ��Section ��4.4, ��the ��Buyer ��will ��maintain ��the

confidentialityofalldisclosuresmadetoitinconnectionwiththistransaction(includingthe

existence and terms of this transaction). ��For purposes of this Section 4.10, a Net Short Sale by

theBuyershallmeanasaleofCommonStockbysuchBuyerthatismarkedasashortsaleand

that is made at a time when there is no equivalent offsetting long position in Common Stock held

by such Buyer

4.11 ����FormD;BlueSkyFilings. ��TheCompanyagreestotimelyfileaFormDwith

respecttotheSecuritiesasrequiredunderRegulationDandtoprovideacopy thereof,promptly

upon request of the Buyer. The Company shall take such action as the Company shall reasonably

determine is necessary in order to obtain an exemption for, or to qualify the Securities for, sale to

theBuyerattheClosingunderapplicablesecuritiesorBlueSkylawsofthestatesofthe

United States, and shall provide evidence of such actions promptly upon request of Buyer.

4.12 ����Buyer's ��Ownership ��Limitation. ����Anything ��in ��this ��Agreement ��to ��the ��contrary

notwithstanding,theCompanymaynotmakeaDrawDowntotheextentthatsuchDrawDown

exceeds4.999%ofthethenissuedandoutstandingsharesofCommonStockasreportedinthe

Companys most recent periodic report filed with the Commission.

4.13 ����Accuracy of Registration Statement. ��OneachSettlementDate,theRegistration

Statementandtheprospectustherein(includinganyprospectussupplement)shallnotcontain

anyuntruestatementofamaterialfactoromittostateanymaterialfactrequiredtobestated

therein �or �necessaryin �order �to �make �the �statements �therein �not �misleading �in �light �of �the

circumstances �under �which �they �were �made; �and �on �such �Settlement �Date �the �Registration

Statementandtheprospectusthereinwillnotincludeanyuntruestatementofamaterialfactor

omittostateamaterialfactnecessary inordertomakethestatementstherein,inthelightofthe

circumstancesunderwhichtheyweremade,notmisleading;provided,however,theCompany

makesnorepresentationsorwarrantiesastotheinformationcontainedinoromittedfromthe

RegistrationStatementandtheprospectusthereininrelianceuponandinconformitywiththe

informationfurnishedinwritingtotheCompanybytheBuyerspecificallyforinclusioninthe

Registration Statement and the prospectus therein.

4.14 ����Notice of Certain Events Affecting Registration; Suspension of Right to Request a

DrawDown. ��TheCompanywillpromptlynotifytheBuyerinwritingupontheoccurrenceof

anyoftheeventssetforthinSection3(d)oftheRegistrationRightsAgreement. ��TheCompany

shallnotdelivertotheBuyeranyDrawDownNoticeduringthecontinuationofanyofthe

foregoing ��events. ����The ��Company ��shall ��promptly ��make ��available ��to ��the ��Buyer ��any ��such

supplements ��or ��amendments ��to ��the ��related ��prospectus, ��at ��which ��time, ��provided ��that ��the

registration �statement �and �any �supplements �and �amendments �thereto �are �then �effective, �the

Company may recommence the delivery of Draw Down Notices.

4.15 ����MandatoryReverse �Stock �Split. ���Should �at �anytime �during �the �Commitment

Periodthereshallbenobidfor theCompany'sCommonStockontheTrading Marketwhere the

Company'ssharesofCommonStockare listedortradedfor 3consecutivetrading days,thenthe

CompanyshallimmediatelyhaveitsCommonStockundergoareversestocksplitataratioof

100-to-1(each100sharesofCommonStockshallbecombinedtobecome1shareofCommon

Stock).

24



4.16 ����Subsequent Equity Sales.

(a)

FromthedatehereofuntiltheEffectiveDate,neithertheCompanynor

any Subsidiary shall issue shares of Common Stock or Common Stock Equivalents.

(b)

Untiltheearlierof(i)theexpirationoftheCommitmentPeriodand(ii)

thedatethattheCompanyhasdrawndownduringthetermofthisAgreementtheentire

Commitment �Amount �hereunder, �the �Company �shall �be �prohibited �from �effecting �or

entering intoanagreementtoeffectanysubsequentfinancing involving aVariableRate

Transaction. ��ThetermVariableRateTransactionshallmeanatransactioninwhich

theCompanyissuesorsells(i)anydebtorequitysecuritiesthatareconvertibleinto,

exchangeable �or �exercisable �for, �or �include �the �right �to �receive �additional �shares �of

Common Stock either (A) at a conversion, exercise orexchange rate orother price that is

based �upon �and/or �varies �with �the �trading �prices �of �or �quotations �for �the �shares �of

CommonStockatanytimeaftertheinitialissuanceofsuchdebtorequitysecurities,or

(B)withaconversion,exerciseorexchangepricethatissubjecttobeingresetatsome

future date after the initial issuance of such debt or equity security or upon the occurrence

of �specified �or �contingent �events �directlyor �indirectlyrelated �to �the �business �of �the

Company �or ��the ��market ��for ��the ��Common ��Stock ��or ��(ii) ��enters ��into ��any ��agreement,

including,butnotlimitedto,anequitylineofcredit,wherebytheCompanymaysell

securitiesatafuturedeterminedprice.TheBuyershallbeentitledtoobtaininjunctive

reliefagainsttheCompanyto �precludeanysuchissuance,whichremedyshallbein

addition to any right to collect damages.

(c)

Notwithstanding the foregoing, this Section 4.16 shall not apply in respect

ofanExemptIssuance,exceptthatnoVariableRateTransactionshallbeanExempt

Issuance.

ARTICLE V.

CONDITIONS TO INITIAL CLOSING AND DRAW DOWNS

5.1

ConditionsPrecedenttotheObligationoftheCompanytoSelltheDrawDown

Shares. ��TheobligationhereunderoftheCompanytoproceedtoclosethisAgreementandto

issueandselltheDrawDownSharestotheBuyerissubjecttothesatisfactionorwaiver,ator

beforetheInitialClosing,andasofeachSettlementDateofeachoftheconditionssetforth

below. �These conditions are for the Company's sole benefit and may be waived by the Company

in writing at any time in its sole discretion.

(a)

Accuracy of Buyers Representations and Warranties. �The representations

and warranties of theBuyer shall be true and correct in all material respects as of the date

whenmadeandasoftheInitialClosingandasofeachSettlementDateasthoughmade

atthattime(exceptforrepresentationsandwarrantiesthatspeakasofaparticulardate,

which shall be true and correct in all material respects as of such dates).

(b)

Performance by theBuyer. ��TheBuyer shall have performed, satisfiedand

compliedinallmaterialrespectswithallcovenants,agreementsandconditionsrequired

25



by this Agreement to beperformed,satisfied or complied with by theBuyer at or prior to

the Initial Closing and as of each Settlement Date.

(c)

NoInjunction. ��Nostatute,rule,regulation,executive order,decree,ruling

orinjunctionshallhavebeenenacted,entered,promulgatedorendorsedbyanycourtor

governmentalauthorityofcompetentjurisdictionwhichprohibitstheconsummationof

any of the transactions contemplated by this Agreement.

(d)

No ��Proceedings ��or ��Litigation. ����No ��material ��Action ��shall ��have ��been

commencedagainsttheBuyerortheCompanyoranysubsidiary,oranyoftheofficers,

directorsoraffiliatesoftheCompanyoranysubsidiary,seekingtorestrain,preventor

change ��the ��transactions ��contemplated ��by ��this ��Agreement, ��or ��seeking ��damages ��in

connection with such transactions.

(e)

Initial Closing Deliveries. �The delivery by the Buyer of the items set forth

in Section 2.2(b) of this Agreement.

5.2

ConditionsPrecedenttotheObligationoftheBuyertoClose. ���Theobligation

hereunderoftheBuyertoperformitsobligationsunderthisAgreementandtopurchasethe

DrawDownSharesissubjecttothesatisfactionorwaiver,atorbeforetheInitialClosing,of

each of the conditions set forth below. �These conditions are for the Buyers sole benefit and may

be waived by the Buyer in writing at any time in its sole discretion.

(a)

AccuracyoftheCompany'sRepresentationsandWarranties. ��Eachofthe

representationsandwarrantiesoftheCompanyshallbetrueandcorrectinallmaterial

respectsasofthedatewhenmadeandasoftheInitialClosingasthoughmadeatthat

time(exceptforrepresentationsandwarrantiesthatspeakasofaparticulardate,which

shall be true and correct in all material respects as of such date).

(b)

Performance �by �the �Company. ����The �Company �shall �have �performed,

satisfiedandcompliedinallmaterialrespectswithallmaterialcovenants,agreements

and conditions required by this Agreement tobe performed, satisfied or complied with by

the Company at or prior to the Initial Closing.

(c)

No Injunction. �No statute, rule, regulation, executive order, decree, ruling

orinjunctionshallhavebeenenacted,entered,promulgatedorendorsedbyanycourtor

governmentalauthorityofcompetentjurisdictionwhichprohibitstheconsummationof

any of the transactions contemplated by this Agreement.

(d)

No ��Proceedings ��or ��Litigation. ����No ��material ��Action ��shall ��have ��been

commenced,againsttheBuyerortheCompanyoranysubsidiary,oranyoftheofficers,

directorsoraffiliatesoftheCompanyoranysubsidiaryseekingtorestrain,preventor

change ��the ��transactions ��contemplated ��by ��this ��Agreement, ��or ��seeking ��damages ��in

connection with such transactions.

(e)

ParValue.ParvalueofCompany'sCommonStockshallhavebeensetat

$0.00001.

26



(f)

InitialClosingDeliveries. ��ThedeliverybytheCompanyoftheitemsset

forth in Section 2.2(a) of this Agreement.

5.3

ConditionsPrecedenttotheObligationoftheBuyertoAcceptaDrawDownand

Purchase the Draw Down Shares. �The obligation hereunder of the Buyer to accept a Draw Down

requestandtoacquireandpayfortheDrawDownSharesissubjecttothesatisfactionator

before each Settlement Date, of each of the conditions set forth below.

(a)

SatisfactionofConditionsto �InitialClosing. ���TheCompanyshallhave

satisfiedattheInitialClosing,ortheBuyershallhavewaivedattheInitialClosing,the

conditions set forth in Section 5.2.

(b)

Issuance ��of ��Additional ��Shares. ����The ��Company ��shall ��have ��issued ��the

Additional Shares in accordance with Section 2.3.

(c)

No ��Suspension. ����Trading �in ��the �Common ��Stock ��shall ��not ��have ��been

suspended �bythe �Commission �or �the �Trading �Market �(except �for �any �suspension �of

trading ��of ��limited ��duration ��agreed ��to ��by ��the ��Company, ��which ��suspension ��shall ��be

terminatedpriortothedeliveryofeachDrawDownNotice),and,atanytimepriorto

such �Draw �Down �Notice, �trading �in �securities �generally �as �reported �on �the �Trading

Marketshallnothavebeensuspendedorlimited,orminimumpricesshallnothavebeen

establishedonsecuritieswhosetradesarereportedonthe �TradingMarketunlessthe

generalsuspensionorlimitationshallhavebeenterminatedpriortothedeliveryofsuch

Draw Down Notice.

(d)

Material ���Adverse ���Effect.

No ���Material ���Adverse ���Effect ���and ���no

ConsolidationEventwherethesuccessorentityhasnotagreedtodelivertotheBuyer

suchsharesofstockand/orsecuritiesastheBuyerisentitledtoreceivepursuanttothis

Agreement.

(e)

OpinionofCounsel. ��TheBuyershallhavereceivedabring-downletter

from �the �Companys �counsel, �confirmingthat �there �is �no �change �from �the �counsels

previouslydelivered �opinion, �or �else �specifying �with �particularitythe �reason �for �any

change.

(f)

Minimum Investment Amount. �The Investment Amount for the applicable

DrawDownNotice,aspermittedpursuanttoSection6.1(c),shallexceed$25,000. ��For

purposesofclarification,ifthemaximumInvestmentAmountasdeterminedpursuantto

Section 6.1(d) is less than $25,000, then the Company shall be precluded from exercising

a Draw Down at such time.

(g)

EquityConditions. ���DuringtheDrawDownPricingPeriodthroughthe

Settlement Date, all of the Equity Conditions have been met.

(h)

ProspectusSupplement. ��OntheTradingDay thattheCompany deliversa

DrawDownNotice,theCompanyshallhavefiledwiththeCommissionaprospectus

supplementpursuanttoRule424undertheSecuritiesActsettingforththetermsofthe

Draw Down.

27



(i)

InvoluntarySuspensionDuringDrawDownPricingPeriod. ��Duringany

TradingDay duringtheDrawDownPricingPeriodtradingoftheCommonStockonthe

TradingMarketshallnotbesuspendedformorethan3hours,intheaggregate,orifany

TradingDayduringtheDrawDownPricingPeriodisshortenedbecauseofapublic

holiday.

(j)

VoluntarySuspensionDuringDrawDownPricingPeriod. ���Duringany

Trading Day during theDrawDownPricing PeriodsalesofDrawDownSharespursuant

totheRegistrationStatementshallnotbesuspendedbytheCompanyformorethan3

hours, in the aggregate.

(k)

Directors ��and ��Officers ��Insurance. ����The �Company �shall ��have �obtained

directors ��and ��officers ��insurance ��from ��a ��reputable ��insurance ��provider ��with ��liability

coverage at least equal to the Commitment Amount.

(l)

ParValueofCommonStock. ��OnthedayonwhichDrawDownShares

shallbeissuedpursuanttoaDrawDownNotice,theparvalueoftheCommonStock

shall not be higher than the Purchase Price.

(m)

MandatoryReverseStockSplit. ���TheCompanyshallhavesatisfiedthe

requirementsetforthinSection4.15.Forclarity,shouldtheCompanyberequiredto

haveitsCommonStockundergoareversestocksplitinaccordancewithSection4.15,

fromthemomentthatrequirementbecomeseffectiveanduntilthemandatoryreverse

stock split is completed the Company shall be precluded from exercising a Draw Down.

ARTICLE VI.

DRAW DOWN TERMS

6.1

DrawDownTerms. ��Subjecttothesatisfactionoftheconditionssetforthinthis

Agreement, the parties agree as follows:

(a)

TheCompanymay,initssolediscretion,issueandexercisedrawdowns

against the Commitment Amount (each aDrawDown) during the Commitment Period,

whichDrawDownsthe �Buyershallbeobligatedtoaccept,subjectto �theterms �and

conditionsunderthisAgreement.BeforetheCompanyshallexerciseaDrawDown,the

Company �shall �have �caused �a �sufficient �number �of �shares �of �Common �Stock �to �be

registered ��with ��the ��Commission ��to ��cover ��the ��Draw ��Down ��Shares ��to ��be ��issued ��in

connection with such Draw Down (using a good faith estimate based on the recent market

priceoftheCommonStock),and,ontheTradingDaythatsuchrequestismade,the

Company shall have filed with the Commission a prospectus supplement pursuant to Rule

424 under the Securities Act setting forth the terms of the Draw Down.

(b)

TheCompanymaynotexerciseaDrawDownuntiltheapplicableDraw

Down Cushion has elapsed.

(c)

TheCompanymustinformtheBuyerbydeliveringaDrawDownnotice,

in �the �form �of �Exhibit �C �attached �hereto �(the �Draw �Down �Notice), �via �facsimile

28



transmission,inaccordancewithSection8.3,astothedollaramountoftheDrawDown

(the Investment Amount) the Company wishes to exercise.

(d)

ThemaximumInvestmentAmountastoeachDrawDownshallbeequal

tothePurchasePricemultipliedbythelesserof:(i)4.99%oftheoutstandingsharesof

CommonStockasofclosingoftheTradingDayimmediatelyprecedingtheapplicable

CommencementDateand(ii)theaveragedaily trading volumeoftheCommonStockon

theTradingMarketduringtheDrawDownPricingPeriodmultipliedbythree(3). ��The

maximum Investment Amount shall not exceed $500,000.

(e)

ThenumberofDrawDownSharestobeissuedonaSettlementDate(as

definedin6.1(f))shallequaltheInvestmentAmountapplicabletosuchSettlementDate

dividedbythelesserofthePurchasePriceascalculatedduringtheapplicableDraw

DownPricingPeriodand,iftheapplicableDrawDownSharesarenotdeliveredonor

before ��the ��applicable ��Settlement ��Date, ��the ��Purchase ��Price ��as ��calculated ��during ��the

applicableDrawDownPricingPeriod,butassumingsuchDrawDownPricingPeriodis

extendedthroughtheTradingDayimmediatelypriortothedatetheapplicableDraw

Down Shares are actually delivered to the Buyer.

(f)

On the Trading Day immediately following the last day of theDraw Down

PricingPeriod,theCompany shalldelivertotheBuyerandtheBuyershallacknowledge

totheCompanyasettlementstatement(theSettlementStatement)settingforththe

calculationofthePurchasePriceandtheInvestmentAmountastotheapplicableDraw

DownPricingPeriod. ��TheissuanceoftheDrawDownSharesastoaDrawDownand

thepaymentoftheInvestmentAmountastoaDrawDownshalloccurwithinone(1)

TradingDayoftheendoftheapplicableDrawDownPricingPeriod(theSettlement

Date).

(g)

OnorbeforetheSettlementDate,theapplicableDrawDownSharesshall

bedeliveredtotheDepositoryTrustCompany(DTC)accountofthe �Buyer,orits

designees,asdesignatedbytheBuyerintheSettlementStatement,viaDTCsDeposit

WithdrawalAgentCommissionsystem(DWAC). ��UpontheCompanyelectronically

delivering such Draw Down Shares to the DTC account of the Buyer, or its designees, via

DWACby9:30a.m.ET,theBuyershall,onthesameday(orthenextBusinessDayif

such ��day ��is ��not ��a ��Business ��Day) ��wire ��transfer ��immediately ��available ��funds ��to ��the

Companys bank account, as designated by the Company in the Settlement Statement, for

theamountoftheInvestmentAmountofsuchDrawDownShares.UpontheCompany

electronically deliveringtheapplicableDrawDownSharestotheBuyeroritsdesignees

DTCaccount �viaDWACafter9:30 �a.m. �ET,theBuyershallwiretransfernext �day

availablefundstotheCompanysdesignatedaccountonsuchday(orthenextBusiness

Day ifsuch day isnot aBusiness Day)for theamount of theInvestmentAmount of such

Draw Down Shares. ��In case the Company shall not deliver the Draw Down Shares to the

BuyerthroughDWAC,andinsteadissueanewstockcertificate,suchcertificateshallbe

shippedbyover-nightcouriertoanaddressindicatedbytheBuyerontheSettlement

Statement. ��UponreceiptofthestockcertificateevidencingtheDrawDownSharesby

theBuyeroritsdesigneesbefore9:30a.m.ET,theBuyershallwiretransfersameday

availablefundstotheCompanysdesignatedaccountonsuchday(orthenextBusiness

29



Day ifsuch day isnot aBusiness Day) for theamount of theInvestmentAmount of such

DrawDownShares. ��ShouldreceiptofthestockcertificateevidencingtheDrawDown

Sharesoccurafter9:30a.m.ET,theBuyershallwire transfernextday availablefundsto

theCompanysdesignatedaccountonsuchday(orthenextBusinessDayifsuchdayis

notaBusinessDay)fortheamountoftheInvestmentAmountofsuchDrawDown

Shares.

(h)

TheCompanyunderstandsthatadelayinthedeliveryoftheDrawDown

Shares ��into ��the ��Buyers ��DTC ��account ��beyond ��the ��Settlement ��Date ��could ��result ��in

economiclosstotheBuyer. ���InadditiontotheBuyersotheravailableremedies,the

CompanyshallpaytotheBuyer,incash,aspartialliquidateddamagesandnotasa

penalty, �for �each �$1,000 �of �Draw �Down �Shares �(based �on �the �Closing �Price �of �the

Common �Stock �on �the �applicable �Settlement �Date) �required �to �be �delivered �on �the

SettlementDate,$7.50perTradingDay(increasingto$15 �perTradingDayfive(5)

TradingDaysaftersuchdamageshavebeguntoaccrue)foreachTradingDayafterthe

SettlementDateuntilsuchDrawDownSharesaredeliveredpursuanttothisArticleVI.

NothinghereinshalllimittheBuyersrighttopursueactualdamagesfortheCompanys

failuretodelivercertificatesrepresentinganySecuritiesasrequiredbytheTransaction

Documents, and the Buyer shall have the right to pursue all remedies available to it at law

or ��in ��equity ��including, ��without ��limitation, ��a ��decree ��of ��specific ��performance ��and/or

injunctive relief.

ARTICLE VII.

TERMINATION

7.1

Term. �The term of this Agreement shall begin on the date hereof and shall endon

theearlierof(i)24monthsfromtheEffectiveDateorasotherwisesetforthinSection7.2and

(ii) 30 months from the date hereof.

7.2

OtherTermination. ��ThisAgreementshallterminateif(i)theCommonStockis

de-listedfromtheTradingMarketunlesssuchde-listingisinconnectionwithasubsequent

listingonanotherTradingMarket,(ii)thereshalloccuranystoporderorsuspensionofthe

effectiveness of the Registration Statement during the Commitment Period for an aggregate of 30

Trading Days, other than due to the acts of theBuyer, (iii) the Company files for protection from

creditors �under �any �applicable �law �or �(iv) �the �initial �Registration �Statement �is �not �declared

effective by the Commission on the 12-month anniversary of the date hereof.

ARTICLE VIII.

MISCELLANEOUS

8.1

FeesandExpenses. ����Exceptasexpressly setforthintheTransactionDocuments

tothecontrary,eachpartyshallpaythefeesandexpensesofitsadvisers,counsel,accountants

and ��other ��experts, ��if ��any, ��and ��all ��other ��expenses ��incurred ��by ��such ��party ��incident ��to ��the

negotiation,preparation,execution,delivery andperformanceofthisAgreement. ��TheCompany

shall pay all transfer agent fees, stamp taxes andother taxes and dutieslevied in connection with

the delivery of any Securities to the Buyer.

30



8.2

EntireAgreement. ���TheTransactionDocuments,togetherwiththeexhibitsand

schedulesthereto, �contain �theentireunderstandingofthepartieswith �respect �to �thesubject

matter �hereof �and �supersede �all �prior �agreements �and �understandings, �oral �or �written, �with

respecttosuchmatters,whichthepartiesacknowledgehavebeenmergedintosuchdocuments,

exhibits and schedules.

8.3

Notices. ��Anyandallnoticesorothercommunicationsordeliveriesrequiredor

permittedtobeprovidedhereundershallbeinwritingandshallbedeemedgivenandeffective

ontheearliestof(a)thedateoftransmission,ifsuchnoticeorcommunicationisdeliveredvia

facsimileatthefacsimilenumbersetforthonthesignaturepagesattachedheretopriorto5:30

p.m.(NewYorkCitytime)onaTradingDayevidencedbyatransmissionconfirmation,(b)the

next Trading Day after the date of transmission, if such notice or communication is delivered via

facsimile at the facsimile number set forth on the signature pages attachedhereto on a day that is

notaTradingDayorlaterthan5:30p.m.(NewYorkCitytime)onanyTradingDayevidenced

by atransmissionconfirmation,(c)the2ndTradingDayfollowingthedateofmailing,ifsentby

U.S.nationallyrecognizedovernightcourierservice,or(d)uponactualreceiptbythepartyto

whomsuchnoticeisrequiredtobegiven. ��Theaddressforsuchnoticesandcommunications

shall be as set forth on the signature pages attached hereto.

8.4

Amendments; �Waivers. ����No �provision �of �this �Agreement �may �be �waived �or

amendedexceptinawritteninstrumentsigned,inthecaseofanamendment,bytheCompany

andtheBuyeror,inthecaseofawaiver,bythepartyagainstwhomenforcementofanysuch

waived provision is sought. ��No waiver of any default with respect to any provision, condition or

requirementofthisAgreementshallbedeemedtobeacontinuingwaiverinthefutureora

waiverofanysubsequentdefaultorawaiverofanyotherprovision,conditionorrequirement

hereof,norshallanydelayoromissionofanypartytoexerciseanyrighthereunderinany

manner impair the exercise of any such right.

8.5

Headings. ��Theheadingshereinareforconvenienceonly,donotconstituteapart

of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

8.6

SuccessorsandAssigns. ��ThisAgreementshallbebindinguponandinuretothe

benefit of the parties and their successors. �Neither party may assign this Agreement or any rights

or obligations hereunder (other than by merger).

8.7

NoThird-PartyBeneficiaries. ��ThisAgreementisintendedforthebenefitofthe

partiesheretoandtheirrespectivesuccessorsandpermittedassignsandisnotforthebenefitof,

normayanyprovisionhereofbeenforcedby,anyotherPerson,exceptasotherwisesetforthin

Section 4.7.

8.8

GoverningLaw. ��Allquestionsconcerning theconstruction,validity,enforcement

and ��interpretation ��of ��the ��Transaction ��Documents ��shall ��be ��governed ��by ��and ��construed ��and

enforcedin �accordance �with �theinternal �lawsoftheStateof �Illinois, �without �regardto �the

principles of conflicts of law thereof. ��Each party agrees that all legal proceedings concerning the

interpretations, enforcement and defense of the transactions contemplated by this Agreement and

any �other �Transaction �Documents �(whether �brought �against �a �party �hereto �or �its �respective

affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively

31



inthestateandfederalcourtssittinginCookCounty,Illinois. ��Eachpartyherebyirrevocably

submits �to �theexclusivejurisdictionof �thestateand �federal �courtssittingin �Cook �County,

Illinoisfortheadjudicationofanydisputehereunderorinconnectionherewithorwithany

transactioncontemplatedherebyordiscussedherein(includingwithrespecttotheenforcement

of any of the Transaction Documents), and hereby irrevocably waives, and agrees not toassert in

any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any

suchcourt,thatsuchsuit,actionorproceedingisimproperorisaninconvenientvenueforsuch

proceeding. ��Eachpartyherebyirrevocablywaivespersonalserviceofprocessandconsentsto

process �being �served �in �any �such �suit, �action �or �proceeding �by �mailing �a �copy �thereof �via

registeredorcertifiedmailorovernightdelivery(withevidenceofdelivery)tosuchpartyatthe

address �in �effect �for �notices �to �it �under �this �Agreement �and �agrees �that �such �service �shall

constitutegoodandsufficientserviceofprocessandnoticethereof. ��Nothingcontainedherein

shallbedeemedtolimitinany way anyrighttoserveprocessinanyothermannerpermittedby

law. ��Thepartiesherebywaiveallrightstoatrialbyjury. ��Ifeitherpartyshallcommencean

action or proceeding to enforce any provisions of the Transaction Documents, then the prevailing

partyinsuchactionorproceedingshallbereimbursedbytheotherpartyforits �reasonable

attorneysfeesandothercostsandexpensesincurredwiththeinvestigation,preparationand

prosecution of such action or proceeding.

8.9

Survival. ��Therepresentationsandwarrantiescontainedhereinshallsurvivethe

Closing and the delivery of the Draw Down Shares and the Shares.

8.10 ����Execution. ��ThisAgreementmaybeexecutedintwoormorecounterparts,allof

whichwhentakentogethershallbeconsideredoneandthesameagreementandshallbecome

effectivewhencounterpartshavebeensignedbyeachpartyanddeliveredtotheotherparty,it

beingunderstoodthatbothpartiesneednotsignthesamecounterpart. ���Intheeventthatany

signature is delivered by facsimile transmissionor by e-mail delivery of a .pdf format data file,

suchsignatureshallcreateavalidandbindingobligationofthepartyexecuting(oronwhose

behalfsuchsignatureisexecuted)withthesameforceandeffectasifsuchfacsimileor.pdf

signature page were an original thereof.

8.11 ����Severability. ��Ifanyterm,provision,covenantorrestrictionofthisAgreementis

held �by �a �court �of �competent �jurisdiction �to �be �invalid, �illegal, �void �or �unenforceable, �the

remainder of the terms, provisions, covenants and restrictions set forth herein shallremain in full

forceandeffectandshallinnowaybeaffected,impairedorinvalidated,andthepartieshereto

shall �use �their �commercially �reasonable �efforts �to �find �and �employ �an �alternative �means �to

achievethesameorsubstantiallythesameresultasthatcontemplatedbysuchterm,provision,

covenantorrestriction.Itisherebystipulatedanddeclaredtobetheintentionofthepartiesthat

theywouldhaveexecutedtheremainingterms,provisions,covenantsandrestrictionswithout

including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

8.12 ����Replacement ��of ��Securities. ����If ��any ��certificate ��or ��instrument ��evidencing ��any

Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in

exchangeandsubstitutionfor anduponcancellationthereof(inthecaseofmutilation),orin lieu

ofandsubstitutiontherefor,anewcertificateorinstrument,butonlyuponreceiptofevidence

reasonablysatisfactorytotheCompanyofsuchloss,theftordestruction. ��Theapplicantfora

newcertificateorinstrumentundersuchcircumstancesshallalsopayanyreasonablethird-party

32



costs ��(including ��customary ��indemnity) ��associated ��with ��the ��issuance ��of ��such ��replacement

Securities.

8.13 ����Remedies. ��Inadditiontobeingentitledtoexerciseallrightsprovidedhereinor

grantedbylaw,includingrecoveryofdamages,eachoftheBuyerandtheCompanywillbe

entitled �to �specific �performance �under �the �Transaction �Documents. ����The �parties �agree �that

monetarydamagesmaynotbeadequatecompensationforanylossincurredbyreasonofany

breachofobligationscontainedintheTransactionDocumentsandherebyagreestowaiveand

nottoassertinanyactionforspecificperformanceofanysuchobligationthedefensethata

remedy at law would be adequate.

8.14 ����LiquidatedDamages. ���TheCompanysobligationstopayanypartialliquidated

damagesorotheramountsowing underthe TransactionDocumentsisa continuing obligationof

the �Company �and �shall �not �terminate �until �all �unpaid �partial �liquidated �damages �and �other

amountshavebeenpaid �notwithstandingthefactthattheinstrumentorsecuritypursuantto

whichsuchpartialliquidateddamagesorotheramountsaredueandpayableshallhavebeen

canceled.

8.15 ����Construction.Thepartiesagreethateachofthemand/ortheirrespectivecounsel

hasreviewedandhadanopportunitytorevisetheTransactionDocumentsand,therefore,the

normalruleofconstructiontotheeffectthatanyambiguitiesaretoberesolvedagainstthe

draftingpartyshallnotbeemployedintheinterpretationoftheTransactionDocumentsorany

amendments hereto.

(Signature Pages Follow)

33



IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase

Agreementtobedulyexecutedbytheirrespectiveauthorizedsignatoriesasofthedatefirst

indicated above.

MINERALRITE CORPORATION

Address for Notice:

By:__________________________________________

Fax No.:

E-mail:

Name:

Attn:

Title:

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR BUYER FOLLOWS]

34



[BUYER SIGNATURE PAGE TO GEIG SECURITIES PURCHASE AGREEMENT]

IN ��WITNESS ��WHEREOF, ��the ��undersigned ��have ��caused ��this ��Securities ��Purchase

Agreementtobedulyexecutedbytheirrespectiveauthorizedsignatoriesasofthedatefirst

indicated above.

Name of Buyer: River North Equity, Inc.

Signature of Authorized Signatory of Buyer: __________________________________

Name of Authorized Signatory: Edward M. Liceaga

Title of Authorized Signatory: President

Email Address of Buyer: [email protected]

Fax Number of Buyer:

Address for Notice of Buyer:

360 W. Hubbard St.

Unit 2801

Chicago, IL 60654

Address for Delivery of Securities for Buyer (if not same as above):

35



EXHIBIT A

REGISTRATION RIGHTS AGREEMENT

ThisRegistrationRightsAgreement(thisAgreement)ismadeandenteredinto

asofJanuary __,2015,among MineralRite Corporation,a Nevada corporation(the Company)

and River North Equity, Inc. (the Buyer).

ThisAgreementismadepursuanttotheSecuritiesPurchaseAgreement,datedas

of the date hereof between the Company and the Buyer (the Purchase Agreement).

The Company and Buyer hereby agree as follows:

1.

Definitions. ���Capitalizedtermsusedandnototherwisedefinedhereinthatare

definedinthePurchaseAgreementshallhavethemeaningsgivensuchtermsinthePurchase

Agreement. �As used in this Agreement, the following terms shall have the following meanings:

Advice shall have the meaning set forth in Section 6(d).

Effectiveness �Date �means, �with �respect �to �the �initial �Registration �Statement

required to be filed hereunder, the 120th calendar day following the date hereof.

Effectiveness Period shall have the meaning set forth in Section 2(a).

FilingDatemeans,withrespecttotheinitialRegistrationStatementrequired

hereunder, the 45th calendar day following the date hereof.

Holder or "Holders" means the holder or holders, as the case may be, from time

to time of Registrable Securities. Holder may refer to Holders where appropriate.

Indemnified Party shall have the meaning set forth in Section 5(c).

Indemnifying Party shall have the meaning set forth in Section 5(c).

Losses shall have the meaning set forth in Section 5(a).

Prospectus ��means ��the ��prospectus ��included ��in ��a ��Registration ��Statement

(including, �without �limitation, �a �prospectus �that �includes �any �information �previously

omittedfromaprospectusfiledaspartofaneffectiveregistrationstatementinreliance

uponRule430ApromulgatedundertheSecuritiesAct),asamendedorsupplementedby

any prospectus supplement, with respect to the terms of the offering of any portion of the

Registrable Securities covered by a Registration Statement, and all other amendments and

supplements �to �the �Prospectus, �including �post-effective �amendments, �and �all �material

incorporated by reference or deemed to be incorporated by reference in such Prospectus.

RegistrableSecuritiesmeansallof(i)theDrawDownSharesissuableasper

the ��Securities ��Purchase ��Agreement, ��(ii) ��the ��Shares ��as ��per ��the ��Securities ��Purchase

1



Agreement, ���and(iii)anysharesofCommonStockissuedorissuableuponanystock

split,dividendorotherdistribution,recapitalizationorsimilareventwithrespecttothe

foregoing.

RegistrationStatementmeanstheinitialRegistrationStatementrequiredtobe

filedhereunderandanyadditionalregistrationstatementsfiledpursuanttotheSecurities

Purchase ��Agreement, ��including ��(in ��each ��case) ��the ��Prospectus, ��amendments ��and

supplements ��to ��such ��registration ��statement ��or ��Prospectus, ��including ��pre- ��and ��post-

effectiveamendments,allexhibitsthereto,andallmaterialincorporatedbyreferenceor

deemed to be incorporated by reference in such registration statement.

Rule415meansRule415promulgatedbytheCommissionpursuanttothe

SecuritiesAct,assuchRulemaybeamendedfromtimetotime,oranysimilarruleor

regulationhereafteradoptedbytheCommissionhavingsubstantiallythesamepurpose

and effect as such Rule.

Rule424 �means �Rule �424promulgated �bytheCommission �pursuant �to �the

SecuritiesAct,assuchRulemaybeamendedfromtimetotime,oranysimilarruleor

regulationhereafteradoptedbytheCommissionhavingsubstantiallythesamepurpose

and effect as such Rule.

2.

Shelf Registration.

(a)

On or prior to the Filing Date, the Company shallprepare and file with the

Commission �a �Shelf �Registration �Statement �covering �the �resale �of �the �Registrable

SecuritiesforanofferingtobemadebytheHolder(s)onacontinuousbasispursuantto

Rule415;provided,however,thatif100%oftheRegistrableSecuritieshereundershall

equalorexceed33%oftheissuedandoutstandingCommonStocklessanysuchshares

heldbyAffiliatesoftheCompanyontheactualfilingdateoftheinitialRegistration

Statement(RegistrationCap),theinitialRegistrationStatementshallregisteranumber

of shares of Common Stock which is equal to the Registration Cap; provided, further, that

ifanyRegistrationStatementissubjecttoaRegistrationCap,thesharesissuedtothe

BuyerattheInitialClosingshallhavepriorityinsuchRegistrationStatementoverthe

DrawDownSharesifsuchsharesarenotthenregisteredandthattheAdditionalShares

tobeissuedtotheBuyerasperSection2.3ofthePurchaseAgreementshallbetaken

downfromaneffectiveRegistrationStatement.SubjecttothetermsofthisAgreement,

the �Companyshall �use �its �commerciallyreasonable �efforts �to �cause �anyRegistration

StatementtobedeclaredeffectiveundertheSecuritiesActaspromptlyaspossibleafter

thefiling thereof,andwithrespecttotheinitialRegistrationStatementinany eventprior

totheapplicableEffectivenessDate,andshalluseitscommerciallyreasonableeffortsto

keep suchRegistration Statement continuously effective under the Securities Act untilall

RegistrableSecuritiescoveredbysuchRegistrationStatementhavebeensold;provided,

however, �that �Company �shall �not �be �required �to �have �unissued �Draw �Down �Shares

covered by such Registration Statement after the expiration of the Commitment Period as

such ��term ��is ��described ��in ��the ��Securities ��Purchase ��Agreement ����(the ��Effectiveness

Period). �����The ��Company ��shall ��promptly ��notify ��the ��Holders ��via ��facsimile ��of ��the

effectivenessofaRegistrationStatementonthesameTradingDaythattheCompany

2



telephonicallyconfirmseffectivenesswiththeCommission.TheCompanyshallfilea

final Prospectus with the Commission as required by Rule 424.

3.

Registration Procedures

In ��connection ��with ��the ��Companys ��registration ��obligations ��hereunder, ��the

Company shall:

(a)

Not �less �than �five �Trading �Days �prior �to �the �filing �of ��a �Registration

Statementandnotlessthan1Trading Day priortothefiling ofany relatedProspectusor

any ��amendment ��or ��supplement ��thereto ��(including ��any ��document ��that ��would ��be

incorporatedordeemedtobeincorporatedthereinbyreference),theCompanyshall,(i)

furnishtoHoldercopiesofallsuchdocumentsproposedtobefiled,whichdocuments

(otherthanthoseincorporatedordeemedtobe incorporatedby reference)willbe subject

tothereviewofHolder,and(ii)causeitsofficersanddirectors,counselandindependent

certifiedpublicaccountantstorespondtosuchinquiriesasshallbenecessary,inthe

reasonableopinionofrespectivecounseltoHoldertoconductareasonableinvestigation

withinthemeaningoftheSecuritiesAct. �The �Companyshallnot �file �aRegistration

StatementoranysuchProspectusoranyamendmentsorsupplementstheretotowhich

theHoldershallreasonablyobjectingoodfaith,providedthat,theCompanyisnotified

ofsuchobjectioninwritingnolaterthan5TradingDaysaftertheHolderhasbeenso

furnishedcopiesofaRegistrationStatementor1TradingDayaftertheHolderhasbeen

sofurnishedcopiesofanyrelatedProspectusoramendmentorsupplementtheretoand

provided ��that ��such ��failure ��to ��file ��shall ��not ��constitute ��a ��default ��under ��any ��of ��the

TransactionDocumentsprovidedthattheCompanyusecommerciallyreasonableeffort

to address such objections promptly.

(b)

(i) �Prepare �and �file �with �the �Commission �such �amendments, �including

post-effective �amendments, �to �the �Registration �Statement �and �the �Prospectus �used �in

connection ��therewith ��as ��may ��be ��necessary ��to ��keep ���the ��Registration ��Statement

continuouslyeffectiveastotheapplicableRegistrableSecuritiesfortheEffectiveness

Period and prepare and file with the Commission such additional Registration Statements

in order to register for resale under the Securities Act all of the Registrable Securities; (ii)

causetherelatedProspectustobeamendedorsupplementedbyanyrequiredProspectus

supplement (subject to the terms of this Agreement), and as sosupplemented or amended

tobefiledpursuanttoRule424;(iii)respondaspromptlyasreasonablypossibletoany

commentsreceivedfromtheCommissionwithrespecttotheRegistrationStatementor

anyamendmenttheretoandaspromptlyasreasonablypossibleprovidetheHoldertrue

andcompletecopiesofallcorrespondencefromandtotheCommissionrelatingtothe

Registration ��Statement ��(provided ��that ��the ��Company ��may ��excise ��any ��information

containedthereinwhichwouldconstitutematerialnon-publicinformationastoHolder);

and(iv)complyinallmaterialrespectswiththeprovisionsoftheSecuritiesActandthe

ExchangeActwithrespecttothedispositionofallRegistrableSecuritiescoveredbya

Registration Statement during the applicable period in accordance (subject to the terms of

thisAgreement)withtheintendedmethodsofdispositionby theHoldersetforthinsuch

Registration Statement as so amended or in such Prospectus as so supplemented.

3



(c)

IfduringtheEffectivenessPeriod,thenumberofRegistrableSecuritiesat

anytimeexceeds100%ofthenumberofsharesofCommonStockthenregisteredina

RegistrationStatement,thentheCompanyshallfileassoonasreasonablypracticablean

additional Registration Statement covering the resale by the Holder of not less than 100%

of the number of such Registrable Securities.

(d)

NotifytheHolderofRegistrableSecuritiestobesold(whichnoticeshall,

pursuanttoclauses(iii)through(vi) hereof,be accompaniedby aninstructiontosuspend

theuseoftheProspectusuntiltherequisitechangeshavebeenmade)aspromptlyas

reasonably possible (and, in the case of (i)(A) below, not less than 1 Trading Day prior to

suchfiling)and(ifrequestedby any suchPerson)confirmsuchnotice inwriting nolater

thanoneTradingDayfollowingtheday(i)(A)whenaProspectusoranyProspectus

supplementorpost-effectiveamendmenttoaRegistrationStatementisproposedtobe

filed;(B)whentheCommissionnotifiestheCompanywhethertherewillbeareview

ofsuchRegistrationStatementandwhenevertheCommissioncommentsinwritingon

suchRegistrationStatement;and(C)withrespecttoaRegistrationStatementorany

post-effective amendment, when the same has become effective; (ii) of any request by the

CommissionoranyotherFederalorstategovernmentalauthorityforamendmentsor

supplementstoaRegistrationStatementorProspectusorforadditionalinformation;(iii)

of the issuance by the Commission or any other federal or state governmental authority of

anystopordersuspendingtheeffectivenessofaRegistrationStatementcoveringanyor

alloftheRegistrableSecuritiesortheinitiationofany Proceedingsforthatpurpose;(iv)

ofthereceiptbytheCompanyofanynotificationwithrespecttothesuspensionofthe

qualificationorexemptionfromqualificationofany oftheRegistrable Securitiesfor sale

in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; (v)

oftheoccurrenceofanyeventorpassageoftimethatmakesthefinancialstatements

includedin �aRegistrationStatementineligible �forinclusiontherein �or �anystatement

made inaRegistrationStatementorProspectusorany documentincorporatedordeemed

tobeincorporatedthereinby reference untrue inany material respector that requiresany

revisionstoaRegistrationStatement,Prospectusorotherdocumentssothat,inthecase

ofaRegistrationStatementortheProspectus,asthecasemay be,itwillnotcontainany

untruestatementofamaterialfactoromittostateany materialfactrequiredtobestated

thereinornecessarytomakethestatementstherein,inlightofthecircumstancesunder

which �they �were �made, �not �misleading; �and �(vi) �the �occurrence �or �existence �of �any

pendingcorporatedevelopmentwithrespecttotheCompanythattheCompanybelieves

maybematerialandthat,inthedeterminationoftheCompany,makesitnotinthebest

interestoftheCompanytoallowcontinuedavailabilityofaRegistrationStatementor

Prospectus;providedthatanyandallofsuchinformationshallremainconfidentialto

Holderuntilsuchinformationotherwisebecomespublic,unlessdisclosurebyHolderis

required �bylaw; �provided, �further, �notwithstandingHolders �agreement �to �keep �such

information ��confidential, ��the ��Holder ��makes ��no ��acknowledgement ��that ��any ��such

information is material, non-public information.

(e)

Use �its �best �efforts �to �avoid �the �issuance �of, �or, �if �issued, �obtain �the

withdrawalof(i)anyordersuspendingtheeffectivenessofaRegistrationStatement,or

(ii)anysuspensionofthequalification(orexemptionfromqualification)ofanyofthe

Registrable Securities for sale in any jurisdiction, at the earliest practicable moment.

4



(f)

FurnishtoHolder,withoutcharge,atleastoneconformedcopyofeach

suchRegistrationStatementandeachamendmentthereto,includingfinancialstatements

and �schedules, �all �documents �incorporated �or �deemed �to �be �incorporated �therein �by

referencetotheextentrequestedbysuchPerson,andallexhibitstotheextentrequested

by �such ��Person ��(including �those ��previously �furnished ��or ��incorporated ��by �reference)

promptly after the filing of such documents with the Commission.

(g)

SubjecttothetermsofthisAgreement,theCompanyherebyconsentsto

theuseofsuchProspectusandeachamendmentorsupplementtheretobytheHolderin

connection �with �the �offering �and �sale �of �the �Registrable �Securities �covered �by �such

Prospectusandanyamendmentorsupplementthereto,exceptafterthegivingofany

notice pursuant to Section 3(d).

(h)

Should ��any ��broker-dealer ��be ��required ��to ��make ��a ��filing ��or ��have ��the

Company make a filing with any regulatory authority prior to executing a sale by Holder,

the Company shall (i) make an issuer filing with such authority or authorities, (ii) respond

within five Trading Days to any comments received in connection therewith, and (iii) pay

the filing fees required in connection therewith.

(i)

Prior ���to ���any ��resale ���of ���Registrable ���Securities ���by ��Holder, ���use ���its

commerciallyreasonableeffortstoregisterorqualifyorcooperatewiththeHolderin

connectionwiththeregistrationorqualification(orexemptionfromtheRegistrationor

qualification) �of �such ��Registrable �Securities �for �the �resale �by �the �Holder �under �the

securities �or �Blue �Skylaws �of �such �jurisdictions �within �the �United �States �as �Holder

reasonablyrequestsinwriting,tokeepeachregistrationorqualification(orexemption

therefrom)effectiveduringtheEffectivenessPeriodandtodoanyandallotheractsor

things ��reasonably ��necessary ��to ��enable ��the ��disposition ��in ��such ��jurisdictions ��of ��the

Registrable Securities covered by the Registration Statement; provided, that the Company

shall not be required to qualify generally todo business in any jurisdiction where it is not

thensoqualified,subjecttheCompany toany materialtaxinany suchjurisdictionwhere

it �is �not �then �so �subject �or �file �a �general �consent �to �service �of �process �in �anysuch

jurisdiction.

(j)

If �requested �bythe �Holder, �cooperate �with �the �Holder �to �facilitate �the

timelypreparationanddeliveryofcertificatesrepresentingRegistrableSecuritiestobe

deliveredtoatransfereepursuanttotheRegistrationStatement,whichcertificatesshall

befree,totheextentpermittedby thePurchase Agreement,ofallrestrictive legends,and

toenablesuchRegistrableSecuritiestobeinsuchdenominationsandregisteredinsuch

names as Holder may request.

(k)

Upon �the �occurrence �of �any �event �contemplated �by �this �Section �3, �as

promptly ��as ��reasonably ��possible ��under ��the ��circumstances ��taking ��into ��account ��the

CompanysgoodfaithassessmentofanyadverseconsequencestotheCompanyandits

stockholders ��of ��the ��premature ��disclosure ��of ��such ��event, ��prepare ��a ��supplement ��or

amendment,includingapost-effectiveamendment,totheRegistrationStatementora

supplementto �therelatedProspectus �oranydocumentincorporatedor �deemedto �be

incorporated �therein �by �reference, �and �file �any �other �required �document �so �that, �as

5



thereafterdelivered,neithertheRegistrationStatementnorsuchProspectuswillcontain

anuntrue statementofamaterialfactoromittostate a materialfactrequiredtobe stated

thereinornecessarytomakethestatementstherein,inlightofthecircumstancesunder

which they were made, not misleading. �If the Company notifies the Holder in accordance

withclauses(iii)through(vi)ofSection3(d)above tosuspendtheuse ofany Prospectus

untiltherequisitechangestosuchProspectushavebeenmade,thentheHoldershall

suspenduseofsuchProspectus. ��TheCompany willuseitsbesteffortstoensurethatthe

use of the Prospectus may be resumed as promptly as is practicable.

(l)

Comply with all applicable rules and regulations of the Commission.

(m)

The ��Company ��may ��require ��the ��Holder ��to ��furnish ��to ��the ��Company ��a

certifiedstatementastothenumberofsharesofCommonStockbeneficiallyownedby

theHolderand,ifrequiredbytheCommission,thenaturalpersonsthereofthathave

votinganddispositivecontrolovertheShares.TheHolderacknowledgesthatitwillbe

namedasanunderwriteroftheRegistrableSecuritiesintheProspectus,asrequiredby

Commission policies.

4.

RegistrationExpenses. ��Allfeesandexpensesincidenttotheperformanceofor

compliance with this Agreement by the Company shall be borne by the Company whether or not

any �Registrable ��Securities ��are ��sold ��pursuant ��to ��the ��Registration ��Statement. ����The ��fees ��and

expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration

and �filing �fees �(including, �without �limitation, �fees �and �expenses �(A) �with �respect �to �filings

requiredtobemadewithanyTradingMarketonwhichtheCommonStockisthenlistedfor

trading,(B) incompliance with applicable state securities orBlue Sky lawsreasonably agreed to

bytheCompanyinwriting(including,withoutlimitation,feesanddisbursementsofcounselfor

the �Company �in �connection �with �Blue �Sky �qualifications �or �exemptions �of �the �Registrable

Securities)and(C)ifnotpreviouslypaidbytheCompanyinconnectionwithanissuerfiling,

with respect to any filing that may be required to be made by any broker through which a Holder

intendstomake salesof RegistrableSecurities,solong asthebrokerisreceiving nomore thana

customary brokeragecommissioninconnection withsuchsale,(ii)printing expenses(including,

withoutlimitation,expensesofprintingcertificatesforRegistrableSecurities,(iii)messenger,

telephoneanddeliveryexpenses,(iv)feesanddisbursementsofcounselfortheCompany,(v)

SecuritiesActliabilityinsurance,iftheCompanysodesiressuchinsurance,and(vi)feesand

expensesofallotherPersonsretainedby theCompanyinconnectionwiththeconsummationof

thetransactionscontemplatedby thisAgreement. ��Inaddition,theCompany shallbe responsible

forallofitsinternalexpensesincurredinconnectionwiththeconsummationofthetransactions

contemplatedbythisAgreement(including,withoutlimitation,allsalariesandexpensesofits

officersandemployeesperforminglegaloraccountingduties),theexpenseofanyannualaudit

and thefees andexpenses incurred inconnectionwith the listing of theRegistrableSecurities on

any securitiesexchangeasrequiredhereunder.InnoeventshalltheCompany be responsiblefor

any �broker �or �similar �commissions ��of �Holder �or, �except �to �the �extent �provided �for �in �the

Transaction Documents, any legal fees or other costs of the Holder.

6



5.

Indemnification

(a)

IndemnificationbytheCompany. ���TheCompanyshall,notwithstanding

anyterminationofthisAgreement,indemnifyandholdharmlessHolder,theofficers,

directors, ��members, ��partners, ��agents, ��brokers ��(including ��brokers ��who ��offer ��and ��sell

Registrable Securities as principal as a result of a pledge or any failure to perform under a

margin �call �of �Common �Stock), �investment �advisors ��and �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 �Holder, �each �Person �who

controlsHolder(withinthemeaningofSection15oftheSecuritiesActorSection20of

theExchangeAct)andtheofficers,directors,members,shareholders,partners,agents

andemployees(andanyotherPersonswithafunctionallyequivalentroleofaPerson

holdingsuchtitles,notwithstandingalackofsuchtitleoranyothertitle)ofeachsuch

controlling Person, to the fullest extent permitted by applicable law, from and against any

and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable

attorneys �fees) �and �expenses �(collectively, �Losses), �as �incurred, �arising �out �of �or

relatingto(1)anyuntrueorallegeduntruestatementofamaterialfactcontainedina

RegistrationStatement,anyProspectusoranyformofprospectusorinanyamendment

or supplement thereto or in any preliminary prospectus, or arising out of or relating to any

omissionorallegedomissionofamaterialfactrequiredtobestatedthereinornecessary

tomakethestatementstherein(inthecaseofanyProspectusorformofprospectusor

supplement �thereto, �in �light �of �the �circumstances �under �which �they �were �made) �not

misleading,or(2)anyviolationorallegedviolationbytheCompanyoftheSecurities

Act,ExchangeActoranystatesecuritieslaw,oranyruleorregulationthereunder,in

connectionwiththeperformanceofitsobligationsunderthisAgreement,excepttothe

extent, but only to the extent, that (i) such untrue statements or omissions are based solely

upon �information �regarding �Holder �furnished �in �writing �to �the �Company �by �Holder

expresslyfor �use �therein, �or �to �the �extentthatsuch �information �relates �to �Holder �or

Holders proposed method of distribution of Registrable Securities and was reviewedand

expresslyapprovedinwritingbyHolderexpresslyforuseinaRegistrationStatement,

suchProspectusorsuchformofProspectusorinanyamendmentorsupplementthereto

(it being understood that the Holder has approved AnnexA hereto for this purpose) or (ii)

inthecaseofanoccurrenceofaneventofthetypespecifiedinSection3(d)(iii)-(vi),the

usebyHolderofanoutdatedordefectiveProspectusaftertheCompanyhasnotified

HolderinwritingthattheProspectusisoutdatedordefectiveandpriortothereceiptby

Holder �of �the �Advice �contemplated �in �Section �6(d). ���The �Company �shall �notify �the

Holderpromptlyoftheinstitution,threatorassertionofanyProceedingarisingfromor

in ��connection ��with ��the ��transactions ��contemplated ��by ��this ��Agreement ��of ��which ��the

Company is aware.

(b)

Indemnification ��by ��Holder. ��Holder ��shall, ��severally ��and ��not ��jointly,

indemnifyandholdharmlesstheCompany,itsdirectors,officers,agentsandemployees,

each ��Person ��who ��controls ��the ��Company �(within ��the ��meaning ��of ��Section ��15 ��of ��the

SecuritiesActandSection20oftheExchangeAct),andthedirectors,officers,agentsor

employeesofsuchcontrollingPersons,tothefullestextentpermittedbyapplicablelaw,

from and against allLosses, as incurred, to theextent arising out of or based solely upon:

(x) Holders failure to comply with the prospectus delivery requirements of the Securities

7



Actor(y)anyuntrueorallegeduntruestatementofamaterialfactcontainedinany

RegistrationStatement,any Prospectus,oranyformofprospectus,orinanyamendment

or supplement thereto or in any preliminary prospectus, or arising out of or relating to any

omissionorallegedomissionofamaterialfactrequiredtobestatedthereinornecessary

to make the statements therein not misleading (i) to the extent, but only to the extent, that

such untrue statement oromission is contained in any information so furnished in writing

byHoldertotheCompanyspecificallyforinclusioninsuchRegistrationStatementor

suchProspectusor(ii)totheextentthatsuchinformationrelatestoHoldersproposed

method ��of ��distribution ��of ��Registrable ��Securities ��and ��was ��reviewed ��and ��expressly

approved �in �writing �by �Holder �expressly �for �use �in �a �Registration �Statement �, �such

Prospectus or such form of Prospectus or in any amendment or supplement thereto or (iii)

inthecaseofanoccurrenceofaneventofthetypespecifiedinSection3(d)(iii)-(vi),the

usebyHolderofanoutdatedordefectiveProspectusaftertheCompanyhasnotified

HolderinwritingthattheProspectusisoutdatedor ��defectiveandpriortothereceiptby

HolderoftheAdvicecontemplatedinSection6(d). ���Innoeventshalltheliabilityof

Holder �hereunder �be �greater �in �amount �than �the �dollar �amount �of �the �net �proceeds

received ��by �Holder ��upon ��the ��sale ��of ��the ��Registrable ��Securities ��giving �rise ��to ��such

indemnification obligation.

(c)

Conduct ��of ��Indemnification ��Proceedings. ��If ��any ��Proceeding ��shall ��be

broughtorassertedagainstanyPersonentitledtoindemnityhereunder(anIndemnified

Party),suchIndemnifiedPartyshallpromptlynotifythePersonfromwhomindemnity

issought(theIndemnifyingParty)inwriting,andtheIndemnifyingPartyshallhave

therighttoassumethedefensethereof,includingtheemploymentofcounselreasonably

satisfactory to theIndemnified Party and the payment of all fees and expenses incurred in

connectionwithdefensethereof;provided,thatthefailureofanyIndemnifiedPartyto

givesuchnoticeshallnotrelievetheIndemnifyingPartyofitsobligationsorliabilities

pursuant �to �this �Agreement, �except �(and �only) �to �the �extent �that �it �shall �be �finally

determinedbyacourtofcompetentjurisdiction(whichdeterminationisnotsubjectto

appeal or further review) that such failure shall have prejudiced the Indemnifying Party.

AnIndemnifiedParty shallhavetherighttoemploy separatecounselinanysuch

Proceedingandtoparticipateinthedefensethereof,butthefeesandexpensesofsuch

counselshallbeattheexpenseofsuchIndemnifiedPartyorPartiesunless: ���(1)the

Indemnifying ��Party ��has ��agreed ��in ��writing ��to ��pay ��such ��fees ��and ��expenses; ��(2) ��the

IndemnifyingPartyshallhavefailedpromptlytoassumethedefenseofsuchProceeding

andtoemploycounselreasonablysatisfactorytosuchIndemnifiedPartyinanysuch

Proceeding;or(3)thenamedpartiestoanysuchProceeding(includinganyimpleaded

parties)includebothsuchIndemnifiedPartyandtheIndemnifyingParty,andcounselto

theIndemnifiedParty shallreasonably believethata materialconflictofinterestislikely

to ��exist ��if ��the ��same ��counsel ��were ��to ��represent ��such ��Indemnified ��Party ��and ��the

IndemnifyingParty(inwhichcase,ifsuchIndemnifiedPartynotifiestheIndemnifying

Party ��in ��writing ��that ��it ��elects ��to ��employ ��separate ��counsel ��at ��the ��expense ��of ��the

Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense

thereofandthereasonablefeesandexpensesofnomorethanoneseparatecounselshall

beattheexpenseoftheIndemnifying Party). ��TheIndemnifying Party shallnotbeliable

foranysettlementofanysuchProceedingeffectedwithoutitswrittenconsent,which

8



consentshallnotbeunreasonablywithheldordelayed. ���NoIndemnifyingPartyshall,

withoutthepriorwrittenconsentoftheIndemnifiedParty,effectanysettlementofany

pendingProceedinginrespectofwhichanyIndemnifiedPartyisaparty,unlesssuch

settlementincludesanunconditionalreleaseofsuchIndemnifiedPartyfromallliability

on claims that are the subject matter of such Proceeding.

SubjecttothetermsofthisAgreement,allreasonablefeesandexpensesofthe

Indemnified �Party �(including �reasonable �fees �and �expenses �to �the �extent �incurred �in

connectionwithinvestigatingorpreparingtodefendsuchProceedinginamannernot

inconsistentwiththisSection)shallbepaidtotheIndemnifiedParty,asincurred,within

tenTradingDaysofwrittennoticethereoftotheIndemnifyingParty;provided,thatthe

IndemnifiedPartyshallpromptlyreimbursetheIndemnifyingPartyforthatportionof

suchfeesandexpensesapplicabletosuchactionsforwhichsuchIndemnifiedPartyis

judicially determined to be not entitled to indemnification hereunder.

(d)

Contribution. �����If ��the ��indemnification ��under ��Section ��5(a) ��or ��5(b) ��is

unavailable to anIndemnified Party or insufficientto hold anIndemnifiedParty harmless

foranyLosses,theneach �IndemnifyingPartyshall �contributeto �theamount �paid �or

payablebysuchIndemnifiedParty,insuchproportionasisappropriatetoreflectthe

relativefaultoftheIndemnifyingPartyandIndemnifiedPartyinconnectionwiththe

actions, statements or omissions that resulted in suchLosses as well as any other relevant

equitableconsiderations.TherelativefaultofsuchIndemnifyingPartyandIndemnified

Partyshallbedeterminedbyreferenceto,amongotherthings,whetheranyactionin

question,includinganyuntrueorallegeduntruestatementofamaterialfactoromission

or ��alleged ��omission ��of ��a ��material ��fact, ��has ��been ��taken ��or ��made ��by, ��or ��relates ��to

informationsuppliedby,suchIndemnifyingPartyorIndemnifiedParty,andtheparties

relativeintent,knowledge,accesstoinformationandopportunitytocorrectorprevent

suchaction,statementoromission. ��Theamountpaidorpayableby apartyasaresultof

any ��Losses ��shall ��be ��deemed ��to ��include, ��subject ��to ��the ��limitations ��set ��forth ��in ��this

Agreement,any reasonableattorneysorotherfeesorexpensesincurredby suchparty in

connection with any Proceeding to the extent such party would have been indemnified for

suchfeesorexpensesiftheindemnificationprovidedforinthisSectionwasavailableto

such party in accordance with its terms.

Thepartiesheretoagreethatitwouldnotbejustandequitableifcontribution

pursuanttothisSection5(d)weredeterminedbyprorataallocationorbyanyother

methodofallocationthatdoesnottakeintoaccounttheequitableconsiderationsreferred

to �in �the �immediately �preceding �paragraph. ����Notwithstanding �the �provisions �of ��this

Section5(d),Holdershallnotberequiredtocontribute,intheaggregate,anyamountin

excess of the amount by which the net proceeds actually received by Holder from the sale

of ��the ��Registrable ��Securities ��subject ��to ��the ��Proceeding ��exceeds ��the ��amount ��of ��any

damagesthatHolderhasotherwisebeenrequiredtopaybyreasonofsuchuntrueor

allegeduntruestatementoromissionorallegedomission,exceptinthecaseoffraudby

Holder.

9



The ��indemnity �and ��contribution ��agreements ��contained ��in ��this ��Section ��are ��in

addition �to �any �liability �that �the �Indemnifying �Parties �may �have �to �the �Indemnified

Parties.

6.

Miscellaneous

(a)

Remedies. ��IntheeventofabreachbytheCompanyorbytheHolder,of

anyoftheirrespectiveobligationsunderthisAgreement,HolderortheCompany,asthe

casemaybe,inadditiontobeingentitledtoexerciseallrightsgrantedbylawandunder

thisAgreement,includingrecoveryofdamages,willbeentitledtospecificperformance

of �its �rights �under �this �Agreement. ���The �Company �and �Holder �agree �that �monetary

damages would not provide adequate compensation for any losses incurred by reason of a

breachby itofany oftheprovisionsofthisAgreementandhereby furtheragreesthat,in

theeventofanyactionforspecificperformanceinrespectofsuchbreach,itshallnot

assert or shall waive the defense that a remedy at law would be adequate.

(b)

No �Piggyback �on �Registrations. ���Neither �the �Company �nor �any �of �its

securityholders(otherthantheHolderinsuchcapacitypursuanthereto)mayinclude

securities ��of ��the ��Company �in ��the ��Registration ��Statement ��other �than ��the �Registrable

Securities. ��Inaddition,fromthedatehereofuntiltheendoftheCommitmentPeriodand

solongastheCompanyshallhaveanyobligationundertheConvertibleNotePurchase

AgreementandtheConvertiblePromissoryNoteissuedtotheBuyerpursuantthereto

dated ��January ��__, ��2015, ��other ��than ��Registration ��Statement(s) ��required ��to ��be ��filed

hereunder, ��the ��Company ��shall ��not ��file ��any ��other ��registration ��statements ��with ��the

Commissionseekingtoregistersharesissuablepursuanttoanequitylineofcreditor

similar transaction based on a floating issuance or conversion price.

(c)

Compliance. ���Holdercovenantsandagreesthatitwillcomplywiththe

prospectusdeliveryrequirementsoftheSecuritiesActasapplicabletoitinconnection

with sales of Registrable Securities pursuant to a Registration Statement.

(d)

DiscontinuedDisposition. ��HolderagreesbyitsacquisitionofRegistrable

Securities that, upon receipt of a notice from the Company of the occurrence of any event

ofthekinddescribedinSection3(d),Holderwillforthwithdiscontinuedispositionof

suchRegistrableSecuritiesunderaRegistrationStatementuntilitisadvisedinwriting

(theAdvice)by theCompany thattheuseoftheapplicableProspectus(asitmay have

beensupplementedoramended)may beresumed. ��TheCompany willuse itsbestefforts

to ensure that the use of the Prospectus may be resumed as promptly as it practicable.

(e)

AmendmentsandWaivers.TheprovisionsofthisAgreement,including

theprovisionsofthissentence,maynotbeamended,modifiedorsupplemented,and

waivers or consents to departures from the provisions hereof may not be given, unless the

same �shall �be �in �writing �and �signed �by �the �Company �and �each �Holder �of �the �then

outstandingRegistrableSecurities. ��Notwithstandingtheforegoing,awaiverorconsent

to depart from the provisions hereof with respect to a matter that relates exclusively to the

rights of Holdersand that does not directly or indirectly affect therights of other Holders

maybegivenbyHoldersofalloftheRegistrableSecuritiestowhichsuchwaiveror

10



consent �relates; �provided, �however, �that �the �provisions �of �this �sentence �may �not �be

amended,modified,orsupplementedexceptinaccordancewiththeprovisionsofthe

immediately preceding sentence.

(f)

Notices. ��Any ��and ��all ��notices ��or ��other ��communications ��or ��deliveries

requiredorpermittedto �beprovidedhereunder �shallbedeliveredasset �forth �in �the

Purchase Agreement.

(g)

SuccessorsandAssigns.ThisAgreementshallbebindinguponandinure

to ��the ��benefit ��of ��the ��parties ��and ��their ��successors. ����Neither ��party ��may ��assign ��this

Agreement or any rights or obligations hereunder (other than by merger).

(h)

PiggyBackRegistrationRights. ��IfatanytimeduringtheEffectiveness

PeriodthereisnoeffectiveRegistrationStatementcoveringalloftheSharesthenissued

and ��outstanding ��and ��the ��Company ��shall ��determine ��to ��prepare ��and ��file ��with ��the

Commissionaregistrationstatementrelatingtoanofferingforitsownaccountorthe

accountofothersundertheSecuritiesActofanyofitsequitysecurities,otherthanon

Form �S-4 �or �Form �S-8 �(each �as �promulgated �under �the �Securities �Act) �or �their �then

equivalents ��relating �to ��equity �securities ��to ��be �issued ��solely �in ��connection ��with ��any

acquisitionofanyentityorbusinessorequitysecuritiesissuableinconnectionwiththe

stockoptionorotheremployeebenefitplans,thentheCompanyshallincludeinsuch

registrationstatementallofsuchShares. ��Forclarity,theprovisionsofthisSection6(h)

shallrequirethattheCompany includetheSharesandtheAdditionalSharestobeissued

pursuanttoSection2.2and2.3,respectively,oftheSecuritiesPurchaseAgreementon

the first registration statement it files following the date hereof.

(i)

No ��Inconsistent ��Agreements. ��Neither ��the ��Company ��nor ��any ��of ��its

Subsidiaries �has �entered, �as �of �the �date �hereof, �nor �shall �the �Companyor �anyof �its

Subsidiaries, on or after the date of this Agreement, enter into any agreement with respect

to its securities, that would have the effect of impairing the rights granted to the Holder in

thisAgreementorotherwiseconflictswiththeprovisionshereof. ��Exceptassetforthon

Schedule 6(i), neither the Company nor any of its subsidiaries has previously entered into

anyagreementgrantinganyregistrationrightswithrespecttoanyofitssecuritiestoany

Person that have not been satisfied in full.

(j)

ExecutionandCounterparts. ��ThisAgreementmaybeexecutedintwoor

more counterparts, all of which when taken together shall be considered one and the same

agreementandshallbecomeeffectivewhencounterpartshavebeensignedbyeachparty

anddeliveredtotheotherparty,itbeingunderstoodthatbothpartiesneednotsignthe

samecounterpart. ��Intheeventthatanysignatureisdeliveredbyfacsimiletransmission

orbye-maildeliveryofa.pdfformatdatafile,suchsignatureshallcreateavalidand

binding obligationoftheparty executing (or onwhosebehalfsuchsignature isexecuted)

withthesameforceandeffectasifsuchfacsimileor.pdfsignaturepagewerean

original thereof.

11



(k)

Governing ��Law. ����All ��questions ��concerning ��the ��construction, ��validity,

enforcementandinterpretationofthisAgreementshallbe determinedinaccordancewith

the provisions of the Securities Purchase Agreement.

(l)

CumulativeRemedies. ��Theremediesprovidedhereinarecumulativeand

not exclusive of any other remedies provided by law.

(m)

Severability. ��If ��any ��term, ��provision, ��covenant ��or ��restriction ��of ��this

Agreementisheldbyacourtofcompetentjurisdictiontobeinvalid,illegal,voidor

unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth

hereinshallremaininfullforceandeffectandshallinnowaybeaffected,impairedor

invalidated,andthepartiesheretoshallusetheircommerciallyreasonableeffortstofind

andemployanalternativemeanstoachievethesameorsubstantiallythesameresultas

that contemplated by such term, provision, covenant or restriction. ��It is hereby stipulated

and ��declared ��to ��be ��the ��intention ��of ��the ��parties ��that ��they �would ��have ��executed ��the

remainingterms,provisions,covenantsandrestrictionswithoutincludinganyofsuch

that may be hereafter declared invalid, illegal, void or unenforceable.

(n)

Headings. ��TheheadingsinthisAgreementareforconvenienceonly,do

notconstituteapartofthisAgreement,andshallnotbedeemedtolimitoraffectanyof

the provisions hereof.

*************************

12



IN �WITNESS �WHEREOF, �the �parties �have �executed �this �Registration �Rights

Agreement as of the date first written above.

MINERALRITE CORPORATION

By: ____________________________

Name: _________________________

Title: ________________________

RIVER NORTH EQUITY, INC.

By: ________________________

Name: Edward M. Liceaga

Title: President





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