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SECURITIES PURCHASE AGREEMENT

This SECURITIES PURCHASE AGREEMENT (the "Agreement"), dated January __, 2015, by

and between MineralRite Corporation, a Nevada corporation, with headquarters located at 55

South Geneva Road, Lindon, Utah 84042 (the "Company"), and River North Equity, Inc., an

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

Chicago, Illinois 60654 (the "Buyer"), (together the "Parties"). Capitalized terms used in this

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, the Company shall have the right to issue and sell to the Buyer from time to time as

provided herein, and the Buyer shall be obligated to purchase from the Company up to Ten

Million Dollars ($10,000,000) of the Company’s Common Stock with a par value of $0.001 per

share on a private placement basis pursuant to the provisions of regulation D of the Securities

Act, and/or upon such other exemption from the registration requirements of the Securities Act

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

hereunder pursuant to a resale registration statement established by the Company pursuant to the

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

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

NOW, THEREFORE, in consideration of the foregoing premises, and the promises and

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. In addition to the terms defined elsewhere in this Agreement, for all

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

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

“Affiliate” means any Person that, directly or indirectly through one or more

intermediaries, controls or is controlled by or is under common control with a Person as

such terms are used in and construed under Rule 144 under the Securities Act. With

respect to the Buyer, any investment fund or managed account that is managed on a

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

Affiliate of the Buyer.

“Business Day” means any day except Saturday, Sunday, any day which shall be

a federal legal holiday in the United States or any day on which banking institutions in

the State of New York are authorized or required by law or other governmental action to

close.

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

“Closing Price” means on any particular date (a) the last reported closing bid

price per share of Common Stock on such date on the Trading Market (as reported by

Bloomberg L.P. at 4:15 PM (New York time)), or (b) if there is no such price on such

date, then the closing bid price on the Trading Market on the date nearest preceding such

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

Stock is not then listed or quoted on the Trading Market and if prices for the Common

Stock are then reported over-the-counter and published by OTC Markets Group, Inc. (or

a similar organization or agency succeeding to its functions of reporting prices), the most

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

Common Stock are not then publicly traded, the fair market value of a share of Common

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 Day on which the applicable

Draw Down Notice is delivered to the Buyer.

“Commitment Amount” shall have the meaning assigned to such term in Section

2.1 hereof.

“Commitment Period” shall mean the period of 24 consecutive months

commencing immediately after the Effective Date but 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 any time Common

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

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

otherwise entitles the holder thereof to receive, Common Stock.

“Company Counsel” means _________________________, with offices located

at ____________________________________.

“Consolidation Event” shall mean a sale of all or substantially all of the

Company’s assets or a merger pursuant to which the holders of the voting securities of

the Company prior to the merger do not own a majority of the voting securities of the

surviving entity.

“Disclosure Schedules” means the Disclosure Schedules of the Company

delivered concurrently herewith.

“Discussion Time” shall have the meaning assigned to such term in Section 3.2(f)

hereof.

“Draw Down” shall have the meaning assigned to such term in Section 6.1(a)

hereof.

“Draw Down Cushion” shall mean the mandatory ten (10) Trading Days between

Draw Down Notices.

“Draw Down Notice” shall have the meaning assigned to such term in Section

6.1(c) hereof.

“Draw Down Pricing Period” shall mean the ten (10) Trading Days immediately

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

“Draw Down Shares” shall mean the shares of Common Stock issuable pursuant

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 pursuant to the Registration Rights Agreement is first declared effective by the

Commission.

“Equity Conditions” shall mean, during the period in question, (i) all liquidated

damages and other amounts owing to the Buyer pursuant to the Transaction Documents

have been paid, (ii) there is an effective Registration Statement pursuant to which the

Buyer is permitted to utilize the prospectus thereunder to resell all of the Draw Down

Shares (issued and to be issued pursuant to the applicable Draw Down) and the Shares

(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

Trading Market and all of the shares issuable pursuant to the Transaction Documents are

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

believes, in good faith, that trading of the Common Stock on a Trading Market will

continue uninterrupted for the foreseeable future), (iv) there is a sufficient number of

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 $5,000 of Common Stock (based on the Closing Price on the applicable day) and

(vii) the Company, directly or indirectly, has not provided the Buyer with any material,

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.

“Exempt Issuance” means the issuance of (a) shares of Common Stock or options

to employees, officers or directors of the Company pursuant to any stock or option plan

duly adopted by a majority of the non-employee members of the Board of Directors of

the Company or a majority of the members of a committee of non-employee directors

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

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

exchangeable for or convertible into shares of Common Stock issued and outstanding on

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, exchange or conversion price of any such securities, and (c) securities issued

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

disinterested directors, provided any such issuance shall only be to a Person which is,

itself or through its subsidiaries, an operating company in a business synergistic with the

business of the Company and in which the Company receives benefits in addition to the

investment of funds, but shall not include a transaction in which the Company is issuing

securities primarily for the purpose of raising capital or to an entity whose primary

business is investing in securities.

“Formula Price” means the lower of: (i) the Market Price; and (ii) the Closing

Price on the Commencement Date, subject to adjustment for reverse and forward stock

splits, stock dividends, stock combinations and other similar transactions of the Common

Stock that occur after the date of this Agreement.

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

“Initial Closing” shall have the meaning assigned to such term in Section 2.2

hereof.

“Initial Closing Date” shall have the meaning assigned to such term in Section 2.2

hereof.

“Intellectual Property Rights” shall have the meaning ascribed to such term in

Section 3.1(n).

“Investment Amount” shall have the meaning assigned to such term in Section

6.1(c) hereof.

“Legend Removal Date” shall have the meaning ascribed to such term in Section

4.1(c).

“Liens” means a lien, charge, security interest, encumbrance, right of first refusal,

preemptive right or other restriction.

“Market Price” means, with respect to a Draw Down, the average closing bid

price of the Common Stock during the Draw Down Pricing Period applicable to such

Draw Down.

“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).

“Person” means an individual or corporation, partnership, trust, incorporated or

unincorporated association, joint venture, limited liability company, joint stock company,

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

“Proceeding” means an action, claim, suit, investigation or proceeding

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

deposition), whether commenced or threatened.

"Buyer's Ownership Limitation" shall have the meaning ascribed to such term in

Section 4.12.

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

pursuant to a Draw Down Notice, 70% of the Formula Price. In case a DTC Chill order

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,

dated the date hereof, between the Company and the Buyer, in the form of Exhibit A

attached hereto.

“Registration Statement” means a registration statement meeting the requirements

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

Draw Down Shares and the Shares.

“Required Approvals” shall have the meaning ascribed to such term in Section

3.1(e).

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the

Securities Act, as such Rule may be amended from time to time, or any similar rule or

regulation hereafter adopted by the Commission having substantially the same effect as

such Rule.

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the

Securities Act, as such Rule may be amended from time to time, or any similar rule or

regulation hereafter adopted by the Commission having substantially the same effect as

such Rule.

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

“Securities” means the Draw Down Shares and the Shares.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and

regulations promulgated thereunder.

“Settlement” shall mean the delivery of the Draw Down Shares into the Buyer’s

DTC account via DTC’s DWAC system in exchange for payment therefor.

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

“Shares” shall mean the shares of Common Stock delivered to the Buyer at the

Initial Closing and any additional shares of Common Stock issued pursuant to Section

2.3.

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

“Short Sales” shall include all “short sales” as defined in Rule 200 of Regulation

SHO under the Exchange Act.

“Subsidiary” means any subsidiary of the Company as set forth on Schedule

3.1(a).

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

Market.

“Trading Market” means the following markets or exchanges on which the

Common Stock is listed or quoted for trading on the date in question: the Nasdaq Stock

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

OTCQX, OTCQB and OTC Pink (provided that if the Company is listed on OTC Pink it

must maintain its SEC current reporting status).

“Transaction Documents” means this Agreement, the Registration Rights

Agreement and any other documents or agreements executed in connection with the

transactions contemplated hereunder.

ARTICLE II.

PURCHASE AND SALE

2.1

Purchase and Sale of Draw Down Shares. Upon the terms and subject to the

conditions of this Agreement, the Company may sell and issue to the Buyer and the Buyer shall

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 delivery of this Agreement and the other

agreements referred to herein (the “Initial Closing”) shall take place at such date as the Buyer

and the Company may agree upon (the “Initial Closing Date”). Each party shall deliver the

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;

(ii)

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

attached hereto;

(iii)

a stock certificate evidencing a number of shares of Company'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) After the Registration Statement to be filed with the SEC pursuant to this

Agreement goes effective, upon reaching a market cap of $800,000 or more (and should by the

time the Registration Statement becomes effective such market cap is reached, then immediately

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.

Should the Buyer own any shares of the Company's Common Stock at the time of issuance, the

shares already owned by the Buyer together with the shares to be issued pursuant to this Section

2.3(a) shall represent 9.99% of the Company's outstanding shares of Common Stock post

issuance. The Buyer shall be entitled to have the Company, at Buyer's sole discretion, delay the

issuance of Common Stock pursuant to this Section 2.3(a) for a period not to exceed 90 days.

(b) After the Registration Statement to be filed with the SEC pursuant to this

Agreement goes effective, upon reaching a market cap of $2,000,000 or more (and should by the

time the Registration Statement becomes effective such market cap is reached, then immediately

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.

Should the Buyer own any shares of the Company's Common Stock at the time of issuance, the

shares already owned by the Buyer together with the shares to be issued pursuant to this Section

2.3(b) shall represent 9.99% of the Company's outstanding shares of Common Stock post

issuance. The Buyer shall be entitled to have the Company, at Buyer's sole discretion, delay the

issuance of Common Stock pursuant to this Section 2.3(b) for a period not to exceed 90 days.

pursuant to this Agreement becomes effective, a market cap of $2,000,000 or more is reached

then the Company shall immediately upon effective notice from the SEC issue shares of its

Common Stock to the Buyer in accordance with Section 2.3(b) above. The Company shall issue

additional shares of Common Stock representing $80,000 based on the Formula Price as soon as

the Buyer shall notify the Company that such issuance shall not result in its ownership of more

than 9.99% of the Company's outstanding shares of Common Stock. The Buyer shall be entitled

to have the Company, at Buyer's sole discretion, delay the issuance of Common Stock pursuant

to this Section 2.3(c) for a period not to exceed 90 days.

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

3.1

Representations and Warranties of the Company. Except as set forth under the

corresponding section of the Disclosure Schedules, which Disclosure Schedules shall be 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. All of the direct and indirect subsidiaries of the Company

are set forth on Schedule 3.1(a). The Company owns, directly or indirectly, all of the

capital stock or other equity interests of each Subsidiary free and clear of any Liens, and

all the issued and outstanding shares of capital stock of each Subsidiary are validly issued

and are fully paid, non-assessable and free of preemptive and similar rights to subscribe

for or purchase securities. If the Company has no subsidiaries, then all other references

in the Transaction Documents to the Subsidiaries or any of them will be disregarded.

(b)

Organization and Qualification.

The Company and each of the

Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in

good standing under the laws of the jurisdiction of its incorporation or organization (as

applicable), with the requisite power and authority to own and use its properties and

assets and to carry on its business as currently conducted. Neither the Company nor any

Subsidiary is in violation or default of any of the provisions of its respective certificate or

articles of incorporation, bylaws or other organizational or charter documents. Each of

the Company and the Subsidiaries is duly qualified to conduct business and is in good

standing as a foreign corporation or other entity in each jurisdiction in which the nature

of the business conducted or property owned by it makes such qualification necessary,

except where the failure to be so qualified or in good standing, as the case may be, could

not have or reasonably be expected to result in (i) a material adverse effect on the

legality, validity or enforceability of any Transaction Document, (ii) a material adverse

effect on the results of operations, assets, business, prospects or condition (financial or

otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material

adverse effect on the Company’s ability to perform in any material respect on a timely

basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material

Adverse Effect”) and no Proceeding has been instituted in any such jurisdiction revoking,

limiting or curtailing or seeking to revoke, limit or curtail such power and authority or

qualification.

(c)

Authorization; Enforcement. The Company has the requisite corporate

power and authority to enter into and to consummate the transactions contemplated by

each of the Transaction Documents and otherwise to carry out its obligations hereunder

and thereunder. The execution and delivery of each of the Transaction Documents by the

Company and the consummation by it of the transactions contemplated hereby and

thereby have been duly authorized by all necessary action on the part of the Company

and no further action is required by the Company, its board of directors or its

stockholders in connection therewith other than in connection with the Required

Approvals. Each Transaction Document has been (or upon delivery will have been) duly

executed by the Company and, when delivered in accordance with the terms hereof and

thereof, will constitute the valid and binding obligation of the Company enforceable

against the Company in accordance with its terms except (i) as limited by general

equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium

and other laws of general application affecting enforcement of creditors’ rights generally,

(ii) as limited by laws relating to the availability of specific performance, injunctive relief

or other equitable remedies and (iii) insofar as indemnification and contribution

provisions may be limited by applicable law.

(d)

No Conflicts. The execution, delivery and performance of the Transaction

Documents by the Company, the issuance and sale of the Draw Down Shares and the

consummation by the Company of the other transactions contemplated hereby and

thereby do not and will not (i) conflict with or violate any provision of the Company’s or

any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or

charter documents, or (ii) conflict with, or constitute a default (or an event that with

notice or lapse of time or both would become a default) under, result in the creation of

any Lien upon any of the properties or assets of the Company or any Subsidiary, or give

to others any rights of termination, amendment, acceleration or cancellation (with or

without notice, lapse of time or both) of, any agreement, credit facility, debt or other

instrument (evidencing a Company or Subsidiary debt or otherwise) or other

understanding to which the Company or any Subsidiary is a party or by which any

property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject

to the Required Approvals, conflict with or result in a violation of 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

Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii)

and (iii), such as could not have or reasonably be expected to result in a Material Adverse

Effect.

(e)

Filings, Consents and Approvals. The Company is not required to obtain

any consent, waiver, authorization or order of, give any notice to, or make any filing or

registration with, any court or other federal, state, local or other governmental authority

or other Person in connection with the execution, delivery and performance by the

Company of the Transaction Documents, other than (i) filings required pursuant to

Section 4.4 of this Agreement, (ii) the filing with the Commission of the Registration

Statement and any amendments or supplements thereto, (iii) application(s) to each

applicable Trading Market for the listing of the Securities for trading thereon in the time

and manner required thereby, and (iv) the filing of Form D with the Commission and

such filings as are required to be made under applicable state securities laws (collectively,

the “Required Approvals”).

(f)

Issuance of the Securities. The Securities are duly authorized and, when

issued and paid for in accordance with the applicable Transaction Documents, will be

duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed

by the Company other than restrictions on transfer provided for in the Transaction

Documents. Capitalization. The capitalization of the Company is as set forth on

Schedule 3.1(f). The Company has not issued any capital stock since its most recently

filed periodic report under the Exchange Act, other than pursuant to the exercise of

employee stock options under the Company’s stock option plans, the issuance of shares

of Common Stock to employees pursuant to the Company’s employee stock purchase

plan and pursuant to the conversion or exercise of Common Stock Equivalents

outstanding as of the date of the most recently filed periodic report under the Exchange

Act. No Person has any right of first refusal, preemptive right, right of participation, or

any similar right to participate in the transactions contemplated by the Transaction

Documents. Except as a result of the purchase and sale of the Securities, there are no

outstanding options, warrants, script rights to subscribe to, calls or commitments of any

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

exercisable or exchangeable for, or giving any Person any right to subscribe for or

acquire, any shares of Common Stock, or contracts, commitments, understandings or

arrangements by which the Company or any Subsidiary is or may become bound to issue

additional shares of Common Stock or Common Stock Equivalents. The issuance and

sale of the Securities will not obligate the Company to issue shares of Common Stock or

other securities to any Person (other than the Buyer) and will not result in a right of any

holder of Company securities to adjust the exercise, conversion, exchange or reset price

under any of such securities. All of the outstanding shares of capital stock of the

Company are validly issued, fully paid and nonassessable, have been issued in

compliance with all federal and state securities laws, and none of such outstanding shares

was issued in violation of any preemptive rights or similar rights to subscribe for or

purchase securities. No further approval or authorization of any stockholder, the Board

of Directors of the Company or others is required for the issuance and sale of the

Securities. There are no stockholders agreements, voting agreements or other similar

agreements with respect to the Company’s capital stock to which the Company is a party

or, to the knowledge of the Company, between or among any of the Company’s

stockholders.

(g)

SEC Reports; Financial Statements. The Company has filed all reports,

schedules, forms, statements and other documents required to be filed by it under the

Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d)

thereof, for the two years preceding the date hereof (or such shorter period as the

Company was required by law or regulation to file such material) (the foregoing

materials, including the exhibits thereto and documents incorporated by reference therein,

being collectively referred to herein as the “SEC Reports”) on a timely basis or has

received a valid extension of such time of filing and has filed any such SEC Reports prior

to the expiration of any such extension. As of their respective dates, the SEC Reports

complied in all material respects with the requirements of the Securities Act and the

Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any

untrue statement of a material fact or omitted to state a material fact required to be stated

therein or necessary in order to make the statements therein, in the light of the

circumstances under which they were made, not misleading. The financial statements of

the Company included in the SEC Reports comply in all material respects with applicable

accounting requirements and the rules and regulations of the Commission with respect

thereto as in effect at the time of filing. Such financial statements have been prepared in

accordance with United States generally accepted accounting principles applied on a

consistent basis during the periods involved (“GAAP”), except as may be otherwise

specified in such financial statements or the notes thereto and except that unaudited

financial statements may not contain all footnotes required by GAAP, and fairly present

in all material respects the financial position of the Company and its consolidated

subsidiaries as of and for the dates thereof and the results of operations and cash flows for

the periods then ended, subject, in the case of unaudited statements, to normal,

immaterial, year-end audit adjustments.

(h)

Material Changes; Undisclosed Events, Liabilities or Developments.

Since the date of the latest audited financial statements included within the SEC Reports,

except as specifically disclosed in a subsequent SEC Report, (i) there has been no event,

occurrence or development that has had or that could reasonably be expected to result in

a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or

otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary

course of business consistent with past practice and (B) liabilities not required to be

reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings

made with the Commission, (iii) the Company has not altered its method of accounting,

(iv) the Company has not declared or made any dividend or distribution of cash or other

property to its stockholders or purchased, redeemed or made any agreements to purchase

or redeem any shares of its capital stock and (v) the Company has not issued any equity

securities to any officer, director or Affiliate, except pursuant to existing Company stock

option plans. The Company does not have pending before the Commission any request

for confidential treatment of information. Except for the issuance of the Securities

contemplated by this Agreement or as set forth on Schedule 3.1(h), no event, liability or

development has occurred or exists with respect to the Company or its Subsidiaries or

their respective business, properties, operations or financial condition, that would be

required to be disclosed by the Company under applicable securities laws at the time this

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

or investigation pending or, to the knowledge of the Company, threatened against or

affecting the Company, any Subsidiary or any of their respective properties before or by

any court, arbitrator, governmental or administrative agency or regulatory authority

(federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely

affects or challenges the legality, validity or enforceability of any of the Transaction

Documents or the Securities or (ii) could, if there were an unfavorable decision, have or

reasonably be expected to result in a Material Adverse Effect. Neither the Company nor

any Subsidiary, nor any director or officer thereof, is or has been the subject of any

Action involving a claim of violation of or liability under federal or state securities laws

or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the

Company, there is not pending or contemplated, any investigation by the Commission

involving the Company or any current or former director or officer of the Company. The

Commission has not issued any stop order or other order suspending the effectiveness of

any registration statement filed by the Company or any Subsidiary under the Exchange

Act or the Securities Act.

(j)

Labor Relations. No material labor dispute exists or, to the knowledge of

the Company, is imminent with respect to any of the employees of the Company which

could reasonably be expected to result in a Material Adverse Effect. None of the

Company’s or its Subsidiaries’ employees is a member of a union that relates to such

employee’s relationship with the Company, and neither the Company or any of its

Subsidiaries is a party to a collective bargaining agreement, and the Company and its

Subsidiaries believe that their relationships with their employees are good. No executive

officer, to the knowledge of the Company, is, or is now expected to be, in violation of

any material term of any employment contract, confidentiality, disclosure or proprietary

information agreement or non-competition agreement, or any other contract or agreement

or any restrictive covenant, and the continued employment of each such executive officer

does not subject the Company or any of its Subsidiaries to any liability with respect to

any of the foregoing matters. The Company and its Subsidiaries are in compliance with

all U.S. federal, state, local and foreign laws and regulations relating to employment and

employment practices, terms and conditions of employment and wages and hours, except

where the failure to be in compliance could not, individually or in the aggregate,

reasonably be expected to have a Material Adverse Effect.

(k)

Compliance. Neither the Company nor any Subsidiary (i) is in default

under or in violation of (and no event has occurred that has not been waived that, with

notice or lapse of time or both, would result in a default by the Company or any

Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that

it is in default under or that it is in violation of, any indenture, loan or credit agreement or

any other agreement or instrument to which it is a party or by which it or any of its

properties is bound (whether or not such default or violation has been waived), (ii) is in

violation of any order of any court, arbitrator or governmental body, or (iii) is or has been

in violation of any statute, rule or regulation of any governmental authority, including

without limitation all foreign, federal, state and local laws applicable to its business and

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, authorizations and permits issued by the appropriate federal, state, local or

foreign regulatory authorities necessary to conduct their respective businesses as

described in the SEC Reports, except where the failure to possess such permits could not

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

marketable title in fee simple to all real property owned by them that is material to the

business of the Company and the Subsidiaries and good and marketable title in all

personal property owned by them that is material to the business of the Company and the

Subsidiaries, in each case free and clear of all Liens, except for Liens as do not materially

affect the value of such property and do not materially interfere with the use made and

proposed to be made of such property by the Company and the Subsidiaries and Liens for

the payment of federal, state or other taxes, the payment of which is neither delinquent

nor subject to penalties. Any real property and facilities held under lease by the

Company and the Subsidiaries are held by them under valid, subsisting and enforceable

leases with which the Company and the Subsidiaries are in compliance.

(n)

Patents and Trademarks. The Company and the Subsidiaries have, or have

rights to use, all patents, patent applications, trademarks, trademark applications, service

marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual

property rights and similar rights necessary or material for use in connection with their

respective businesses as described in the SEC Reports and which the failure to so have

could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”).

Neither the Company nor any Subsidiary has received a notice (written or otherwise) that

the Intellectual Property Rights used by the Company or any Subsidiary violates or

infringes upon the rights of any Person. To the knowledge of the Company, all such

Intellectual Property Rights are enforceable and there is no existing infringement by

another Person of any of the Intellectual Property Rights. The Company and its

Subsidiaries have taken reasonable security measures to protect the secrecy,

confidentiality and value of all of their intellectual properties, except where failure to do

so could not, individually or in the aggregate, reasonably be expected to have a Material

Adverse Effect.

(o)

Insurance. The Company and the Subsidiaries are insured by insurers of

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

are prudent and customary in the businesses in which the Company and the Subsidiaries

are engaged, including, but not limited to, directors and officers insurance coverage at

least equal to $5,000,000. Neither the Company nor any Subsidiary has any reason to

believe that it will not be able to renew its existing insurance coverage as and when such

coverage expires or to obtain similar coverage from similar insurers as may be necessary

to continue its business without a significant increase in cost.

(p)

Transactions With Affiliates and Employees. Except as set forth in the

SEC Reports, none of the officers or directors of the Company and, to the knowledge of

the Company, none of the employees of the Company is presently a party to any

transaction with the Company or any Subsidiary (other than for services as employees,

officers and directors), including any contract, agreement or other arrangement providing

for the furnishing of services to or by, providing for rental of real or personal property to

or from, or otherwise requiring payments to or from any officer, director or such

employee or, to the knowledge of the Company, any entity in which any officer, director,

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

partner, in each case in excess of $60,000 other than (i) for payment of salary or

consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf

of the Company and (iii) for other employee benefits, including stock option agreements

under any stock option plan of the Company.

(q)

Sarbanes-Oxley; Internal Accounting Controls. The Company is in

material compliance with all provisions of the Sarbanes-Oxley Act of 2002 which are

applicable to it as of the Closing Date. The Company and the Subsidiaries maintain a

system of internal accounting controls sufficient to provide reasonable assurance that (i)

transactions are executed in accordance with management’s general or specific

authorizations, (ii) transactions are recorded as necessary to permit preparation of

financial statements in conformity with GAAP and to maintain asset accountability, (iii)

access to assets is permitted only in accordance with management’s general or specific

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

existing assets at reasonable intervals and appropriate action is taken with respect to any

differences. The Company has established disclosure controls and procedures (as defined

in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such

disclosure controls and procedures to ensure that information required to be disclosed by

the Company in the reports it files or submits under the Exchange Act is recorded,

processed, summarized and reported, within the time periods specified in the

Commission’s rules and forms. The Company’s certifying officers have evaluated the

effectiveness of the Company’s disclosure controls and procedures as of the end of the

period covered by the Company’s most recently filed periodic report under the Exchange

Act (such date, the “Evaluation Date”). The Company presented in its most recently filed

periodic report under the Exchange Act the conclusions of the certifying officers about

the effectiveness of the disclosure controls and procedures based on their evaluations as

of the Evaluation Date. Since the Evaluation Date, there have been no changes in the

Company’s internal control over financial reporting (as such term is defined in the

Exchange Act) that has materially affected, or is reasonably likely to materially affect,

the Company’s internal control over financial reporting.

(r)

Certain Fees. Any brokerage or finder’s fees or commissions that are, or

will be, payable by the Company to any broker, financial advisor or consultant, finder,

placement agent, investment banker, bank or other Person with respect to the transactions

contemplated by the Transaction Documents shall be borne solely by the Company. The

Buyer shall have no obligation with respect to any fees or with respect to any claims

made by or on behalf of other Persons for fees of a type contemplated in this Section that

may be due in connection with the transactions contemplated by the Transaction

Documents.

(s)

Private Placement. Assuming the accuracy of the Buyer representations

and warranties set forth in Section 3.2, no registration under the Securities Act is required

for the offer and sale of the Securities by the Company to the Buyer as contemplated

hereby. The issuance and sale of the Securities hereunder does not contravene the rules

and regulations of the Trading Market.

(t)

Investment Company. The Company is not, and is not an Affiliate of, and

immediately after receipt of payment for the Securities, will not be or be an Affiliate of,

an “investment company” within the meaning of the Investment Company Act of 1940,

as amended. The Company shall conduct its business in a manner so that it will not

become subject to the Investment Company Act.

(u)

Registration Rights. Other than the Buyer, no Person has any right to

cause the Company to effect the registration under the Securities Act of any securities of

the Company.

(v)

Listing and Maintenance Requirements. The Company’s Common Stock

is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company

has taken no action designed to, or which to its knowledge is likely to have the effect of,

terminating the registration of the Common Stock under the Exchange Act nor has the

Company received any notification that the Commission is contemplating terminating

such registration. The Company has not, in the 12 months preceding the date hereof,

received notice from any Trading Market on which the Common Stock is or has been

listed or quoted to the effect that the Company is not in compliance with the listing or

maintenance requirements of such Trading Market. The Company is, and has no reason

to believe that it will not in the foreseeable future continue to be, in compliance with all

such listing and maintenance requirements.

(w)

Application of Takeover Protections. The Company and its Board of

Directors have taken all necessary action, if any, in order to render inapplicable any

control share acquisition, business combination, poison pill (including any distribution

under a rights agreement) or other similar anti-takeover provision under the Company’s

Certificate of Incorporation (or similar charter documents) or the laws of its state of

incorporation that is or could become applicable to the Buyer as a result of the Buyer and

the Company fulfilling their obligations or exercising their rights under the Transaction

Documents, including without limitation as a result of the Company’s issuance of the

Securities and the Buyer’s ownership of the Securities.

(x)

Disclosure. Except with respect to the material terms and conditions of

the transactions contemplated by the Transaction Documents, the Company confirms

that, neither it nor any other Person acting on its behalf has provided any of the Buyer or

their agents or counsel with any information that it believes constitutes or might

constitute material, non-public information. The Company understands and confirms

that the Buyer will rely on the foregoing representation in effecting transactions in

securities of the Company. All disclosure furnished by or on behalf of the Company to

the Buyer regarding the Company, its business and the transactions contemplated hereby,

including the Disclosure Schedules to this Agreement, with respect to the representations

and warranties made herein are true and correct with respect to such representations and

warranties and do not contain any untrue statement of a material fact or omit to state any

material fact necessary in order to make the statements made therein, in light of the

circumstances under which they were made, not misleading. The press releases

disseminated by the Company during the twelve months preceding the date of this

Agreement taken as a whole do not contain any untrue statement of a material fact or

omit to state a material fact required to be stated therein or necessary in order to make the

statements, in light of the circumstances under which they were made and when made,

not misleading. The Company acknowledges and agrees that the Buyer neither makes

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.

(y)

No Integrated Offering. Assuming the accuracy of the Buyer’s

representations and warranties set forth in Section 3.2, neither the Company, nor any of

its affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made

any offers or sales of any security or solicited any offers to buy any security, under

circumstances that would cause this offering of the Securities to be integrated with prior

offerings by the Company for purposes of the Securities Act or any applicable

shareholder approval provisions of any Trading Market on which any of the securities of

the Company are listed or designated.

(z)

Solvency. Based on the financial condition of the Company as of the

Closing Date after giving effect to the receipt by the Company of the proceeds from the

sale of the Securities hereunder, (i) the fair saleable value of the Company’s assets

exceeds the amount that will be required to be paid on or in respect of the Company’s

existing debts and other liabilities (including known contingent liabilities) as they mature;

(ii) the Company’s assets do not constitute unreasonably small capital to carry on its

business as now conducted and as proposed to be conducted including its capital needs

taking into account the particular capital requirements of the business conducted by the

Company, and projected capital requirements and capital availability thereof; and (iii) the

current cash flow of the Company, together with the proceeds the Company would

receive, were it to liquidate all of its assets, after taking into account all anticipated uses

of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when

such amounts are required to be paid. The Company does not intend to incur debts

beyond its ability to pay such debts as they mature (taking into account the timing and

amounts of cash to be payable on or in respect of its debt). The Company has no

knowledge of any facts or circumstances which lead it to believe that it will file for

reorganization or liquidation under the bankruptcy or reorganization laws of any

jurisdiction within one year from the Closing Date. The SEC Reports set forth as of the

dates thereof all outstanding secured and unsecured Indebtedness of the Company or any

Subsidiary, or for which the Company or any Subsidiary has commitments. For the

purposes of this Agreement, “Indebtedness” shall mean (a) any liabilities for borrowed

money or amounts owed in excess of $150,000 (other than trade accounts payable

incurred in the ordinary course of business), (b) all guaranties, endorsements and other

contingent obligations in respect of Indebtedness of others, whether or not the same are

or should be reflected in the Company’s balance sheet (or the notes thereto), except

guaranties by endorsement of negotiable instruments for deposit or collection or similar

transactions in the ordinary course of business; and (c) the present value of any lease

payments in excess of $150,000 due under leases required to be capitalized in accordance

with GAAP. Neither the Company nor any Subsidiary is in default with respect to any

Indebtedness.

(aa) Tax Status. Except for matters that would not, individually or in the

aggregate, have or reasonably be expected to result in a Material Adverse Effect, the

Company and each Subsidiary has filed all necessary federal, state and foreign income

and franchise tax returns and has paid or accrued all taxes shown as due thereon, and the

Company has no knowledge of a tax deficiency which has been asserted or threatened

against the Company or any Subsidiary.

(bb) No General Solicitation. Neither the Company nor any person acting on

behalf of the Company has offered or sold any of the Securities by any form of general

solicitation or general advertising. The Company has offered the Securities for sale only

to the Buyer.

(cc) Foreign Corrupt Practices. Neither the Company, nor to the knowledge of

the Company, any agent or other person acting on behalf of the Company, has (i) directly

or indirectly, used any funds for unlawful contributions, gifts, entertainment or other

unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful

payment to foreign or domestic government officials or employees or to any foreign or

domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully

any contribution made by the Company (or made by any person acting on its behalf of

which the Company is aware) which is in violation of law, or (iv) violated in any

material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.

(dd) Accountants. The Company’s accountants are set forth on Schedule

3.1(dd) of the Disclosure Schedule. To the knowledge of the Company, such

accountants, who the Company expects will express their opinion with respect to the

financial statements to be included in the Company’s Annual Report on Form 10-K for

the year ending December 31, 2014, are a registered public accounting firm as required

by the Exchange Act.

(ee) Acknowledgment Regarding Buyer’s Purchase of Securities.

The

Company acknowledges and agrees that the Buyer is acting solely in the capacity of an

arm’s length Buyer with respect to the Transaction Documents and the transactions

contemplated thereby. The Company further acknowledges that the Buyer is not acting

as a financial advisor or fiduciary of the Company (or in any similar capacity) with

respect to the Transaction Documents and the transactions contemplated thereby and any

advice given by the Buyer or any of its respective representatives or agents in connection

with the Transaction Documents and the transactions contemplated thereby is merely

incidental to the Buyer’s purchase of the Securities. The Company further represents to

the Buyer that the Company’s decision to enter into this Agreement and the other

Transaction Documents has been based solely on the independent evaluation of the

transactions contemplated hereby by the Company and its representatives.

(ff)

Manipulation of Price. The Company has not, and to its knowledge no

one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause

or to result in the stabilization or manipulation of the price of any security of the

Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for,

purchased, or, paid any compensation for soliciting purchases of, any of the Securities, or

(iii) paid or agreed to pay to any person any compensation for soliciting another to

purchase any other securities of the Company, other than, in the case of clauses (ii) and

(iii), compensation paid to the Company’s placement agent in connection with the

placement of the Securities.

(gg) Acknowledgement Regarding Buyer’s Trading Activity. Anything in this

Agreement or elsewhere herein to the contrary notwithstanding, it is understood and

acknowledged by the Company that Buyer has neither been asked to agree, nor has Buyer

agreed, to desist from purchasing or selling long securities of the Company, including,

without limitation, during the periods that the value of the Draw Down Shares deliverable

in connection with a Draw Down are being determined. The Company acknowledges

that such aforementioned activities do not constitute a breach of any of the Transaction

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

existing and in good standing under the laws of the jurisdiction of its organization with

full right, corporate or partnership power and authority to enter into and to consummate

the transactions contemplated by the Transaction Documents and otherwise to carry out

its obligations hereunder and thereunder. The execution, delivery and performance by the

Buyer of the transactions contemplated by this Agreement have been duly authorized by

all necessary corporate or similar action on the part of the Buyer. Each Transaction

Document to which it is a party has been duly executed by the Buyer, and when delivered

by the Buyer in accordance with the terms hereof, will constitute the valid and legally

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, moratorium and other laws of general application affecting

enforcement of creditors’ rights generally, (ii) as limited by laws relating to the

availability of specific performance, injunctive relief or other equitable remedies and (iii)

insofar as indemnification and contribution provisions may be limited by applicable law.

(b)

Own Account. Buyer understands that the Shares are “restricted

securities” and have not been registered under the Securities Act or any applicable state

securities law and is acquiring the Shares as principal for its own account and not with a

view to or for distributing or reselling such Shares or any part thereof in violation of the

Securities Act or any applicable state securities law, has no present intention of

distributing any of such Shares in violation of the Securities Act or any applicable state

securities law and has no direct or indirect arrangement or understandings with any other

persons to distribute or regarding the distribution of such Shares in violation of the

Securities Act or any applicable state securities law (this representation and warranty not

limiting the Buyer’s right to sell the Securities pursuant to the Registration Statement or

otherwise in compliance with applicable federal and state securities laws). Buyer is

acquiring the Shares hereunder in the ordinary course of its business.

(c)

Buyer Status. At the time the Buyer was offered the Shares, it was, and at

the date hereof it is, and 90 days following the Initial Closing, it will be either: (i) an

“accredited investor” as defined in Rule 501 under the Securities Act or (ii) a “qualified

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

financial matters so as to be capable of evaluating the merits and risks of the prospective

investment in the Securities, and has so evaluated the merits and risks of such investment.

Buyer is able to bear the economic risk of an investment in the Securities and, at the

present time, is able to afford a complete loss of such investment.

(e)

General Solicitation. Buyer is not purchasing the Securities as a result of

any advertisement, article, notice or other communication regarding the Securities

published in any newspaper, magazine or similar media or broadcast over television or

radio or presented at any seminar or any other general solicitation or general

advertisement.

(f)

Short Sales and Confidentiality Prior to the Date Hereof. Other than the

transaction contemplated hereunder, the Buyer has not directly or indirectly, nor has any

Person acting on behalf of or pursuant to any understanding with the Buyer, executed any

disposition, including Short Sales, in the securities of the Company during the period

commencing from the time that the Buyer first received a term sheet (written or oral)

from the Company or any other Person setting forth the material terms of the transactions

contemplated hereunder until the date hereof (“Discussion Time”). Notwithstanding the

foregoing, if the Buyer is a multi-managed investment vehicle whereby separate portfolio

managers manage separate portions of the Buyer's assets and the portfolio managers have

no direct knowledge of the investment decisions made by the portfolio managers

managing other portions of the Buyer's assets, the representation set forth above shall

only apply with respect to the portion of assets managed by the portfolio manager that

made the investment decision to purchase the Securities covered by this Agreement.

Other than to other Persons party to this Agreement, the Buyer has maintained the

confidentiality of all disclosures made to it in connection with this transaction (including

the existence and terms of this transaction).

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

4.1

Transfer Restrictions.

(a)

The Securities may only be disposed of in compliance with state and

federal securities laws. In connection with any transfer of Securities other than pursuant

to an effective registration statement or Rule 144, to the Company or to an affiliate of the

Buyer or in connection with a pledge as contemplated in Section 4.1(b), the Company

may require the transferor thereof to provide to the Company an opinion of counsel

selected by the transferor and reasonably acceptable to the Company, the form and

substance of which opinion shall be reasonably satisfactory to the Company, to the effect

that such transfer does not require registration of such transferred Securities under the

Securities Act. As a condition of transfer, any such transferee shall agree in writing to be

bound by the terms of this Agreement and shall have the rights of the Buyer under this

Agreement and the Registration Rights Agreement, as to issued Securities only.

(b)

The Buyer agrees to the imprinting, so long as is required by this Section

4.1, of a legend on any of the Securities in the following form:

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 (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT

BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR

PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A

TRANSACTION

NOT

SUBJECT

TO,

THE

REGISTRATION

REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE

WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A

LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH

EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY

ACCEPTABLE TO THE COMPANY. THESE SECURITIES MAY BE

PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT

WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A

FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS

DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER

LOAN SECURED BY SUCH SECURITIES.

The Company acknowledges and agrees that the Buyer may from time to time

pledge pursuant to a bona fide margin agreement with a registered broker-dealer or grant

a security interest in some or all of the Securities to a financial institution that is an

“accredited investor” as defined in Rule 501(a) under the Securities Act and who agrees

to be bound by the provisions of this Agreement and the Registration Rights Agreement

and, if required under the terms of such arrangement, the Buyer may transfer pledged or

secured Securities to the pledgees or secured parties. Such a pledge or transfer would not

be subject to approval of the Company and no legal opinion of legal counsel of the

pledgee, secured party or pledgor shall be required in connection therewith. Further, no

notice shall be required of such pledge. At the Buyer’s expense, the Company will

execute and deliver such reasonable documentation as a pledgee or secured party of

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

Registration Rights Agreement, the preparation and filing of any required prospectus

supplement under Rule 424(b)(3) under the Securities Act or other applicable provision

of the Securities Act to appropriately amend the list of Selling Stockholders thereunder.

(c)

Certificates evidencing the Draw Down Shares and the Shares shall not

contain any legend (including the legend set forth in Section 4.1(b)), (i) while a

registration statement (including the Registration Statement) covering the resale of such

security is effective under the Securities Act, or (ii) following any sale of such Draw

Down Shares or Shares pursuant to Rule 144, or (iii) if such legend is not required under

applicable requirements of the Securities Act (including judicial interpretations and

pronouncements issued by the staff of the Commission). The Company shall cause its

counsel to issue a legal opinion to the Company’s transfer agent promptly after the

Effective Date if required by the Company’s transfer agent to effect the removal of the

legend hereunder. The Company agrees that following the Effective Date or at such time

as such legend is no longer required under this Section 4.1(c), it will, no later than 3

(three) Trading Days following the delivery by the Buyer to the Company or the

Company’s transfer agent of a certificate representing Draw Down Shares, or Shares, as

the case may be, issued with a restrictive legend (such third Trading Day, the “Legend

Removal Date”), deliver or cause to be delivered to the Buyer a certificate representing

such shares that is free from all restrictive and other legends. All Draw Down Shares

shall be delivered without any restrictive legends. The Company may not make any

notation on its records or give instructions to any transfer agent of the Company that

enlarge the restrictions on transfer set forth in this Section. Certificates for Securities

subject to legend removal hereunder shall be transmitted by the transfer agent of the

Company to the Buyer by crediting the account of the Buyer’s broker (as indicated by

Buyer) with the Depository Trust Company system.

(d)

In addition to the Buyer’s other available remedies, the Company shall pay

to the Buyer, in cash, as partial liquidated damages and not as a penalty, for each $1,000

of Draw Down Shares, or Shares (based on the Closing Price of the Common Stock on

the date such Securities are submitted to the Company’s transfer agent) delivered for

removal of the restrictive legend and subject to Section 4.1(c), $7.50 per Trading Day

(increasing to $15 per Trading Day 5 (five) Trading Days after such damages have begun

to accrue) for each Trading Day after 2^nd Trading Day following the Legend Removal

Date until such certificate is delivered without a legend. Nothing herein shall limit the

Buyer’s right to pursue actual damages for the Company’s failure to deliver certificates

representing any Securities as required by the Transaction 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.

(e)

Buyer agrees that the removal of the restrictive legend from certificates

representing Securities as set forth in this Section 4.1 is predicated upon the Company’s

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

Furnishing of Information. As long as Buyer owns any Securities, the Company

covenants to timely file (or obtain extensions in respect thereof and file within the applicable

grace period) all reports required to be filed by the Company after the date hereof pursuant to the

Exchange Act. As long as the Buyer owns any Securities, if the Company is not required to file

reports pursuant to the Exchange Act, it will prepare and furnish to the Buyer and make publicly

available in accordance with Rule 144(c) such information as is required for the Buyer to sell the

Securities under Rule 144. The Company further covenants that it will take such further action as

Buyer may reasonably request, to the extent required from time to time to enable the Buyer to

sell such Securities without registration under the Securities Act within the requirements of the

exemption provided by Rule 144.

4.3

Integration. The Company shall not sell, offer for sale or solicit offers to buy or

otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that

would be integrated with the offer or sale of the Securities in a manner that would require the

registration under the Securities Act of the sale of the Securities to the Buyer or that would be

integrated with the offer or sale of the Securities for purposes of the rules and regulations of any

Trading Market such that it would require shareholder approval prior to the closing of such other

transaction unless shareholder approval is obtained before the closing of such subsequent

transaction.

4.4

Securities Laws Disclosure; Publicity. The Company shall, by 5:30 p.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

the Transaction Documents thereto. The Company and the Buyer shall consult with each other

in issuing any other press releases with respect to the transactions contemplated hereby, and

neither the Company nor the Buyer shall issue any such press release or otherwise make any

such public statement without the prior consent of the Company, with respect to any press

release of the Buyer, or without the prior consent of the Buyer, with respect to any press release

of the Company, which consent shall not unreasonably be withheld or delayed, except if such

disclosure is required by law, in which case the disclosing party shall promptly provide the other

party with prior notice of such public statement or communication.

4.5

Shareholder Rights Plan. No claim will be made or enforced by the Company or,

with the consent of the Company, any other Person, that the Buyer is an “Acquiring Person”

under any control share acquisition, business combination, poison pill (including any distribution

under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter

adopted by the Company, or that the 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

of the transactions contemplated by the Transaction Documents, the Company covenants and

agrees that neither it nor any other Person acting on its behalf will provide the 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

confidentiality and use of such information. The Company understands and confirms that the

Buyer shall be relying on the foregoing representations in effecting transactions in securities of

the Company.

4.7

Indemnification of Buyer. Subject to the provisions of this Section 4.7, the

Company will indemnify and hold the Buyer and its directors, officers, shareholders, members,

partners, employees and agents (and any other Persons with a functionally equivalent role of a

Person holding such titles notwithstanding a lack of such title or any other title), each Person

who controls 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 (and any other Persons with a functionally equivalent role of a Person holding such

titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a

“Buyer Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies,

damages, costs and expenses, including all judgments, amounts paid in settlements, court costs

and reasonable attorneys’ fees and costs of investigation that any the Buyer Party may suffer or

incur as a result of or relating to (a) any breach of any of the representations, warranties,

covenants or agreements made by the Company in this Agreement or in the other Transaction

Documents or (b) any action instituted against the Buyer, or any of its Affiliates, by any

stockholder of the Company who is not an Affiliate of the Buyer, with respect to any of the

transactions contemplated by the Transaction Documents (unless such action is based upon a

breach of the Buyer’s representations, warranties or covenants under the Transaction Documents

or any agreements or understandings the Buyer may have with any such stockholder or any

violations by the Buyer of state or federal securities laws or any conduct by the Buyer which

constitutes fraud, gross negligence, willful misconduct or malfeasance). If any action shall be

brought against any Buyer Party in respect of which indemnity may be sought pursuant to this

Agreement, the Buyer Party shall promptly notify the Company in writing, and the Company

shall have the right to assume the defense thereof with counsel of its own choosing reasonably

acceptable to the Buyer Party. Any Buyer Party shall have the right to employ separate counsel

in any such action and participate in the defense thereof, but the fees and expenses of such

counsel shall be at the expense of the Buyer Party except to the extent that (i) the employment

thereof has been specifically authorized by the Company in writing, (ii) the Company has failed

after a reasonable period of time to assume such defense and to employ counsel or (iii) in such

action there is, in the reasonable opinion of such separate counsel, a material conflict on any

material issue between the position of the Company and the position of the Buyer Party, in which

case the Company shall be responsible for the reasonable fees and expenses of no more than one

such separate counsel. The Company will not be liable to any Buyer Party under this Agreement

(i) for any settlement by the Buyer Party effected without the Company’s prior written consent,

which shall not be unreasonably withheld or delayed; or (ii) to the extent, but only to the extent

that a loss, claim, damage or liability is attributable to any Buyer Party’s breach of any of the

representations, warranties, covenants or agreements made by the Buyer Party in this Agreement

or in the other Transaction Documents.

4.8

Reservation of Common Stock. As of the date hereof, the Company has reserved

and the Company shall continue to reserve and keep available at all times, free of preemptive

rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company

to issue Draw Down Shares and Shares pursuant to this Agreement.

4.9

Listing of Common Stock. The Company hereby agrees to use best efforts to

maintain the listing of the Common Stock on a Trading Market, and as soon as reasonably

practicable following the Initial Closing (but not later than the Effective Date) to list all of the

Draw Down Shares and the Shares on such Trading Market. The Company further agrees, if the

Company applies to have the Common Stock traded on any other Trading Market, it will include

in such application all of the Draw Down Shares and the Shares and will take such other action

as is necessary to cause all of the Draw Down Shares and the Shares to be listed on such other

Trading Market as promptly as possible. The Company will take all action reasonably necessary

to continue the listing and trading of its Common Stock on a Trading Market and will comply in

all respects with the Company’s reporting, filing and other obligations under the bylaws or rules

of the Trading Market.

4.10 Short Sales and Confidentiality After the Date Hereof. Buyer covenants that

neither it nor any Affiliate acting on its behalf or pursuant to any understanding with it will,

directly or indirectly, execute any Net Short Sales (as defined below) from the time starting upon

receipt of a Draw Down Notice and ending upon receipt of the Draw Down Shares. Buyer

covenants that until such time as the transactions contemplated by this Agreement are publicly

disclosed by the Company as described in Section 4.4, the Buyer will maintain the

confidentiality of all disclosures made to it in connection with this transaction (including the

existence and terms of this transaction). For purposes of this Section 4.10, a “Net Short Sale” by

the Buyer shall mean a sale of Common Stock by such Buyer that is marked as a short sale and

that is made at a time when there is no equivalent offsetting long position in Common Stock held

by such Buyer

4.11 Form D; Blue Sky Filings. The Company agrees to timely file a Form D with

respect to the Securities as required under Regulation D and to provide a copy 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

the Buyer at the Closing under applicable securities or “Blue Sky” laws of the states of the

United States, and shall provide evidence of such actions promptly upon request of Buyer.

4.12 Buyer's Ownership Limitation. Anything in this Agreement to the contrary

notwithstanding, the Company may not make a Draw Down to the extent that such Draw Down

exceeds 4.999% of the then issued and outstanding shares of Common Stock as reported in the

Company’s most recent periodic report filed with the Commission.

4.13 Accuracy of Registration Statement. On each Settlement Date, the Registration

Statement and the prospectus therein (including any prospectus supplement) shall not contain

any untrue statement of a material fact or omit to state any material fact required to be stated

therein or necessary in 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

Statement and the prospectus therein will not include any untrue statement of a material fact or

omit to state a material fact necessary in order to make the statements therein, in the light of the

circumstances under which they were made, not misleading; provided, however, the Company

makes no representations or warranties as to the information contained in or omitted from the

Registration Statement and the prospectus therein in reliance upon and in conformity with the

information furnished in writing to the Company by the Buyer specifically for inclusion in the

Registration Statement and the prospectus therein.

4.14 Notice of Certain Events Affecting Registration; Suspension of Right to Request a

Draw Down. The Company will promptly notify the Buyer in writing upon the occurrence of

any of the events set forth in Section 3(d) of the Registration Rights Agreement. The Company

shall not deliver to the Buyer any Draw Down Notice during the continuation of any of the

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 Mandatory Reverse Stock Split. Should at any time during the Commitment

Period there shall be no bid for the Company's Common Stock on the Trading Market where the

Company's shares of Common Stock are listed or traded for 3 consecutive trading days, then the

Company shall immediately have its Common Stock undergo a reverse stock split at a ratio of

100-to-1 (each 100 shares of Common Stock shall be combined to become 1 share of Common

Stock).

4.16 Subsequent Equity Sales.

(a)

From the date hereof until the Effective Date, neither the Company nor

any Subsidiary shall issue shares of Common Stock or Common Stock Equivalents.

(b)

Until the earlier of (i) the expiration of the Commitment Period and (ii)

the date that the Company has drawn down during the term of this Agreement the entire

Commitment Amount hereunder, the Company shall be prohibited from effecting or

entering into an agreement to effect any subsequent financing involving a “Variable Rate

Transaction”. The term “Variable Rate Transaction” shall mean a transaction in which

the Company issues or sells (i) any debt or equity securities that are convertible into,

exchangeable or exercisable for, or include the right to receive additional shares of

Common Stock either (A) at a conversion, exercise or exchange rate or other price that is

based upon and/or varies with the trading prices of or quotations for the shares of

Common Stock at any time after the initial issuance of such debt or equity securities, or

(B) with a conversion, exercise or exchange price that is subject to being reset at some

future date after the initial issuance of such debt or equity security or upon the occurrence

of specified or contingent events directly or indirectly related to the business of the

Company or the market for the Common Stock or (ii) enters into any agreement,

including, but not limited to, an equity line of credit, whereby the Company may sell

securities at a future determined price. The Buyer shall be entitled to obtain injunctive

relief against the Company to preclude any such issuance, which remedy shall be in

addition to any right to collect damages.

(c)

Notwithstanding the foregoing, this Section 4.16 shall not apply in respect

of an Exempt Issuance, except that no Variable Rate Transaction shall be an Exempt

Issuance.

ARTICLE V.

CONDITIONS TO INITIAL CLOSING AND DRAW DOWNS

5.1

Conditions Precedent to the Obligation of the Company to Sell the Draw Down

Shares. The obligation hereunder of the Company to proceed to close this Agreement and to

issue and sell the Draw Down Shares to the Buyer is subject to the satisfaction or waiver, at or

before the Initial Closing, and as of each Settlement Date of each of the conditions set forth

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 Buyer’s Representations and Warranties. The representations

and warranties of the Buyer shall be true and correct in all material respects as of the date

when made and as of the Initial Closing and as of each Settlement Date as though made

at that time (except for representations and warranties that speak as of a particular date,

which shall be true and correct in all material respects as of such dates).

(b)

Performance by the Buyer. The Buyer shall have performed, satisfied and

complied in all material respects with all covenants, agreements and conditions required

by this Agreement to be performed, satisfied or complied with by the Buyer at or prior to

the Initial Closing and as of each Settlement Date.

(c)

No Injunction. No statute, rule, regulation, executive order, decree, ruling

or injunction shall have been enacted, entered, promulgated or endorsed by any court or

governmental authority of competent jurisdiction which prohibits the consummation of

any of the transactions contemplated by this Agreement.

(d)

No Proceedings or Litigation. No material Action shall have been

commenced against the Buyer or the Company or any subsidiary, or any of the officers,

directors or affiliates of the Company or any subsidiary, seeking to restrain, prevent or

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

Conditions Precedent to the Obligation of the Buyer to Close. The obligation

hereunder of the Buyer to perform its obligations under this Agreement and to purchase the

Draw Down Shares is subject to the satisfaction or waiver, at or before the Initial Closing, of

each of the conditions set forth below. These conditions are for the Buyer’s sole benefit and may

be waived by the Buyer in writing at any time in its sole discretion.

(a)

Accuracy of the Company's Representations and Warranties. Each of the

representations and warranties of the Company shall be true and correct in all material

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

time (except for representations and warranties that speak as of a particular date, which

shall be true and correct in all material respects as of such date).

(b)

Performance by the Company. The Company shall have performed,

satisfied and complied in all material respects with all material covenants, agreements

and conditions required by this Agreement to be 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

or injunction shall have been enacted, entered, promulgated or endorsed by any court or

governmental authority of competent jurisdiction which prohibits the consummation of

any of the transactions contemplated by this Agreement.

(d)

No Proceedings or Litigation. No material Action shall have been

commenced, against the Buyer or the Company or any subsidiary, or any of the officers,

directors or affiliates of the Company or any subsidiary seeking to restrain, prevent or

change the transactions contemplated by this Agreement, or seeking damages in

connection with such transactions.

(e)

Par Value. Par value of Company's Common Stock shall have been set at

$0.00001.

(f)

Initial Closing Deliveries. The delivery by the Company of the items set

forth in Section 2.2(a) of this Agreement.

5.3

Conditions Precedent to the Obligation of the Buyer to Accept a Draw Down and

Purchase the Draw Down Shares. The obligation hereunder of the Buyer to accept a Draw Down

request and to acquire and pay for the Draw Down Shares is subject to the satisfaction at or

before each Settlement Date, of each of the conditions set forth below.

(a)

Satisfaction of Conditions to Initial Closing. The Company shall have

satisfied at the Initial Closing, or the Buyer shall have waived at the Initial Closing, 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 by the Commission or the Trading Market (except for any suspension of

trading of limited duration agreed to by the Company, which suspension shall be

terminated prior to the delivery of each Draw Down Notice), and, at any time prior to

such Draw Down Notice, trading in securities generally as reported on the Trading

Market shall not have been suspended or limited, or minimum prices shall not have been

established on securities whose trades are reported on the Trading Market unless the

general suspension or limitation shall have been terminated prior to the delivery of such

Draw Down Notice.

(d)

Material Adverse Effect.

No Material Adverse Effect and no

Consolidation Event where the successor entity has not agreed to deliver to the Buyer

such shares of stock and/or securities as the Buyer is entitled to receive pursuant to this

Agreement.

(e)

Opinion of Counsel. The Buyer shall have received a “bring-down” letter

from the Company’s counsel, confirming that there is no change from the counsel’s

previously delivered opinion, or else specifying with particularity the reason for any

change.

(f)

Minimum Investment Amount. The Investment Amount for the applicable

Draw Down Notice, as permitted pursuant to Section 6.1(c), shall exceed $25,000. For

purposes of clarification, if the maximum Investment Amount as determined pursuant to

Section 6.1(d) is less than $25,000, then the Company shall be precluded from exercising

a Draw Down at such time.

(g)

Equity Conditions. During the Draw Down Pricing Period through the

Settlement Date, all of the Equity Conditions have been met.

(h)

Prospectus Supplement. On the Trading Day that the Company delivers a

Draw Down Notice, 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.

(i)

Involuntary Suspension During Draw Down Pricing Period. During any

Trading Day during the Draw Down Pricing Period trading of the Common Stock on the

Trading Market shall not be suspended for more than 3 hours, in the aggregate, or if any

Trading Day during the Draw Down Pricing Period is shortened because of a public

holiday.

(j)

Voluntary Suspension During Draw Down Pricing Period. During any

Trading Day during the Draw Down Pricing Period sales of Draw Down Shares pursuant

to the Registration Statement shall not be suspended by the Company for more than 3

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)

Par Value of Common Stock. On the day on which Draw Down Shares

shall be issued pursuant to a Draw Down Notice, the par value of the Common Stock

shall not be higher than the Purchase Price.

(m)

Mandatory Reverse Stock Split. The Company shall have satisfied the

requirement set forth in Section 4.15. For clarity, should the Company be required to

have its Common Stock undergo a reverse stock split in accordance with Section 4.15,

from the moment that requirement becomes effective and until the mandatory reverse

stock split is completed the Company shall be precluded from exercising a Draw Down.

ARTICLE VI.

DRAW DOWN TERMS

6.1

Draw Down Terms. Subject to the satisfaction of the conditions set forth in this

Agreement, the parties agree as follows:

(a)

The Company may, in its sole discretion, issue and exercise draw downs

against the Commitment Amount (each a “Draw Down”) during the Commitment Period,

which Draw Downs the Buyer shall be obligated to accept, subject to the terms and

conditions under this Agreement. Before the Company shall exercise a Draw Down, 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

price of the Common Stock), and, on the Trading Day that such request is made, 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)

The Company may not exercise a Draw Down until the applicable Draw

Down Cushion has elapsed.

(c)

The Company must inform the Buyer by delivering a Draw Down notice,

in the form of Exhibit C attached hereto (the “Draw Down Notice”), via facsimile

transmission, in accordance with Section 8.3, as to the dollar amount of the Draw Down

(the “Investment Amount”) the Company wishes to exercise.

(d)

The maximum Investment Amount as to each Draw Down shall be equal

to the Purchase Price multiplied by the lesser of: (i) 4.99% of the outstanding shares of

Common Stock as of closing of the Trading Day immediately preceding the applicable

Commencement Date and (ii) the average daily trading volume of the Common Stock on

the Trading Market during the Draw Down Pricing Period multiplied by three (3). The

maximum Investment Amount shall not exceed $500,000.

(e)

The number of Draw Down Shares to be issued on a Settlement Date (as

defined in 6.1(f)) shall equal the Investment Amount applicable to such Settlement Date

divided by the lesser of the Purchase Price as calculated during the applicable Draw

Down Pricing Period and, if the applicable Draw Down Shares are not delivered on or

before the applicable Settlement Date, the Purchase Price as calculated during the

applicable Draw Down Pricing Period, but assuming such Draw Down Pricing Period is

extended through the Trading Day immediately prior to the date the applicable Draw

Down Shares are actually delivered to the Buyer.

(f)

On the Trading Day immediately following the last day of the Draw Down

Pricing Period, the Company shall deliver to the Buyer and the Buyer shall acknowledge

to the Company a settlement statement (the “Settlement Statement”) setting forth the

calculation of the Purchase Price and the Investment Amount as to the applicable Draw

Down Pricing Period. The issuance of the Draw Down Shares as to a Draw Down and

the payment of the Investment Amount as to a Draw Down shall occur within one (1)

Trading Day of the end of the applicable Draw Down Pricing Period (the “Settlement

Date”).

(g)

On or before the Settlement Date, the applicable Draw Down Shares shall

be delivered to the Depository Trust Company (“DTC”) account of the Buyer, or its

designees, as designated by the Buyer in the Settlement Statement, via DTC’s Deposit

Withdrawal Agent Commission system (“DWAC”). Upon the Company electronically

delivering such Draw Down Shares to the DTC account of the Buyer, or its designees, via

DWAC by 9:30 a.m. ET, the Buyer shall, on the same day (or the next Business Day if

such day is not a Business Day) wire transfer immediately available funds to the

Company’s bank account, as designated by the Company in the Settlement Statement, for

the amount of the Investment Amount of such Draw Down Shares. Upon the Company

electronically delivering the applicable Draw Down Shares to the Buyer or its designee’s

DTC account via DWAC after 9:30 a.m. ET, the Buyer shall wire transfer next day

available funds to the Company’s designated account on such day (or the next Business

Day if such day is not a Business Day) for the amount of the Investment Amount of such

Draw Down Shares. In case the Company shall not deliver the Draw Down Shares to the

Buyer through DWAC, and instead issue a new stock certificate, such certificate shall be

shipped by over-night courier to an address indicated by the Buyer on the Settlement

Statement. Upon receipt of the stock certificate evidencing the Draw Down Shares by

the Buyer or its designees before 9:30 a.m. ET, the Buyer shall wire transfer same day

available funds to the Company’s designated account on such day (or the next Business

Day if such day is not a Business Day) for the amount of the Investment Amount of such

Draw Down Shares. Should receipt of the stock certificate evidencing the Draw Down

Shares occur after 9:30 a.m. ET, the Buyer shall wire transfer next day available funds to

the Company’s designated account on such day (or the next Business Day if such day is

not a Business Day) for the amount of the Investment Amount of such Draw Down

Shares.

(h)

The Company understands that a delay in the delivery of the Draw Down

Shares into the Buyer’s DTC account beyond the Settlement Date could result in

economic loss to the Buyer. In addition to the Buyer’s other available remedies, the

Company shall pay to the Buyer, in cash, as partial liquidated damages and not as a

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

Settlement Date, $7.50 per Trading Day (increasing to $15 per Trading Day five (5)

Trading Days after such damages have begun to accrue) for each Trading Day after the

Settlement Date until such Draw Down Shares are delivered pursuant to this Article VI.

Nothing herein shall limit the Buyer’s right to pursue actual damages for the Company’s

failure to deliver certificates representing any Securities as required by the Transaction

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 end on

the earlier of (i) 24 months from the Effective Date or as otherwise set forth in Section 7.2 and

(ii) 30 months from the date hereof.

7.2

Other Termination. This Agreement shall terminate if (i) the Common Stock is

de-listed from the Trading Market unless such de-listing is in connection with a subsequent

listing on another Trading Market, (ii) there shall occur any stop order or suspension of the

effectiveness of the Registration Statement during the Commitment Period for an aggregate of 30

Trading Days, other than due to the acts of the Buyer, (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

Fees and Expenses. Except as expressly set forth in the Transaction Documents

to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants

and other experts, if any, and all other expenses incurred by such party incident to the

negotiation, preparation, execution, delivery and performance of this Agreement. The Company

shall pay all transfer agent fees, stamp taxes and other taxes and duties levied in connection with

the delivery of any Securities to the Buyer.

8.2

Entire Agreement. The Transaction Documents, together with the exhibits and

schedules thereto, contain the entire understanding of the parties with respect to the subject

matter hereof and supersede all prior agreements and understandings, oral or written, with

respect to such matters, which the parties acknowledge have been merged into such documents,

exhibits and schedules.

8.3

Notices. Any and all notices or other communications or deliveries required or

permitted to be provided hereunder shall be in writing and shall be deemed given and effective

on the earliest of (a) the date of transmission, if such notice or communication is delivered via

facsimile at the facsimile number set forth on the signature pages attached hereto prior to 5:30

p.m. (New York City time) on a Trading Day evidenced by a transmission confirmation, (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 attached hereto on a day that is

not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day evidenced

by a transmission confirmation, (c) the 2^nd Trading Day following the date of mailing, if sent by

U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the party to

whom such notice is required to be given. The address for such notices and communications

shall be as set forth on the signature pages attached hereto.

8.4

Amendments; Waivers. No provision of this Agreement may be waived or

amended except in a written instrument signed, in the case of an amendment, by the Company

and the Buyer or, in the case of a waiver, by the party against whom enforcement of any such

waived provision is sought. No waiver of any default with respect to any provision, condition or

requirement of this Agreement shall be deemed to be a continuing waiver in the future or a

waiver of any subsequent default or a waiver of any other provision, condition or requirement

hereof, nor shall any delay or omission of any party to exercise any right hereunder in any

manner impair the exercise of any such right.

8.5

Headings. The headings herein are for convenience only, do not constitute a part

of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

8.6

Successors and Assigns. This Agreement shall be binding upon and inure 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).

8.7

No Third-Party Beneficiaries. This Agreement is intended for the benefit of the

parties hereto and their respective successors and permitted assigns and is not for the benefit of,

nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in

Section 4.7.

8.8

Governing Law. All questions concerning the construction, validity, enforcement

and interpretation of the Transaction Documents shall be governed by and construed and

enforced in accordance with the internal laws of the State of Illinois, without regard to the

principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the

interpretations, enforcement and defense of the transactions contemplated by this Agreement and

any other Transaction Documents (whether brought against a party hereto or its respective

affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively

in the state and federal courts sitting in Cook County, Illinois. Each party hereby irrevocably

submits to the exclusive jurisdiction of the state and federal courts sitting in Cook County,

Illinois for the adjudication of any dispute hereunder or in connection herewith or with any

transaction contemplated hereby or discussed herein (including with respect to the enforcement

of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in

any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any

such court, that such suit, action or proceeding is improper or is an inconvenient venue for such

proceeding. Each party hereby irrevocably waives personal service of process and consents to

process being served in any such suit, action or proceeding by mailing a copy thereof via

registered or certified mail or overnight delivery (with evidence of delivery) to such party at the

address in effect for notices to it under this Agreement and agrees that such service shall

constitute good and sufficient service of process and notice thereof. Nothing contained herein

shall be deemed to limit in any way any right to serve process in any other manner permitted by

law. The parties hereby waive all rights to a trial by jury. If either party shall commence an

action or proceeding to enforce any provisions of the Transaction Documents, then the prevailing

party in such action or proceeding shall be reimbursed by the other party for its reasonable

attorneys’ fees and other costs and expenses incurred with the investigation, preparation and

prosecution of such action or proceeding.

8.9

Survival. The representations and warranties contained herein shall survive the

Closing and the delivery of the Draw Down Shares and the Shares.

8.10 Execution. This Agreement may be executed in two or more counterparts, all of

which when taken together shall be considered one and the same agreement and shall become

effective when counterparts have been signed by each party and delivered to the other party, it

being understood that both parties need not sign the same counterpart. In the event that any

signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file,

such signature shall create a valid and binding obligation of the party executing (or on whose

behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf”

signature page were an original thereof.

8.11 Severability. If any term, provision, covenant or restriction of this Agreement is

held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the

remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full

force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto

shall use their commercially reasonable efforts to find and employ an alternative means to

achieve the same or substantially the same result as that contemplated by such term, provision,

covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that

they would have executed the remaining terms, provisions, covenants and restrictions without

including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

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

exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu

of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence

reasonably satisfactory to the Company of such loss, theft or destruction. The applicant for a

new certificate or instrument under such circumstances shall also pay any reasonable third-party

costs (including customary indemnity) associated with the issuance of such replacement

Securities.

8.13 Remedies. In addition to being entitled to exercise all rights provided herein or

granted by law, including recovery of damages, each of the Buyer and the Company will be

entitled to specific performance under the Transaction Documents. The parties agree that

monetary damages may not be adequate compensation for any loss incurred by reason of any

breach of obligations contained in the Transaction Documents and hereby agrees to waive and

not to assert in any action for specific performance of any such obligation the defense that a

remedy at law would be adequate.

8.14 Liquidated Damages. The Company’s obligations to pay any partial liquidated

damages or other amounts owing under the Transaction Documents is a continuing obligation of

the Company and shall not terminate until all unpaid partial liquidated damages and other

amounts have been paid notwithstanding the fact that the instrument or security pursuant to

which such partial liquidated damages or other amounts are due and payable shall have been

canceled.

8.15 Construction. The parties agree that each of them and/or their respective counsel

has reviewed and had an opportunity to revise the Transaction Documents and, therefore, the

normal rule of construction to the effect that any ambiguities are to be resolved against the

drafting party shall not be employed in the interpretation of the Transaction Documents or any

amendments hereto.

(Signature Pages Follow)

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase

Agreement to be duly executed by their respective authorized signatories as of the date first

indicated above.

MINERALRITE CORPORATION

Address for Notice:

By:__________________________________________

Fax No.:

E-mail:

Name:

Attn:

Title:

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR BUYER FOLLOWS]

[BUYER SIGNATURE PAGE TO GEIG SECURITIES PURCHASE AGREEMENT]

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase

Agreement to be duly executed by their respective authorized signatories as of the date first

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: edward@rivernorthequity.com

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):