8-K

                               UNITED STATES
                    SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549


                                FORM 8-K

                              CURRENT REPORT
    Pursuant to Section 13 OR 15(d) of The Securities Exchange Act Of 1934


Date of Report (Date of earliest event reported): October 20, 2010


                           THE INTERGROUP CORPORATION
                ---------------------------------------------------
               (Exact name of registrant as specified in its charter)


        Delaware                      1-10324              13-3293645
- ----------------------------        ------------       -------------------
(State or other jurisdiction        (Commission         (IRS Employer
 of incorporation)                  File Number)       Identification No.)


  10940 Wilshire Blvd., Suite 2150, Los Angeles, California      90024
  ---------------------------------------------------------     --------
           (Address of principal executive offices)            (Zip Code)


Registrant's telephone number, including area code: (310) 889-2500


Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

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

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

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

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





ITEM 1.01 Entry into a Material Definitive Agreement

On October 20, 2010, The InterGroup Corporation and its consolidated
subsidiaries, Santa Fe Financial Corporation and Portsmouth Square Inc. (the
"Company") exchanged approximately $13,231,000 in notes, convertible notes and
debt instruments that it held in Comstock Mining, Inc. ("Comstock" - OTCBB:
LODE)) for 13,231 shares of newly created 7 1/2% Series A-1 Convertible
Preferred Stock (the "A-1 Preferred") of Comstock. As of June 30, 2010, those
notes and convertible debt instruments had a carrying value of $1,875,000 (net
of impairment adjustments) on the Company's consolidated balance sheet. As part
of that transaction, The Company's Chairman and President also exchanged
approximately $7,681,000 in notes, convertible notes and debt instruments held
personally by him for 7,681 shares of A-1 Preferred. Together, the Company and
Mr. Winfield constitute all of the holders of the A-1 Preferred.

Each share of A-1 Preferred has a stated value of $1,000 per share and a
liquidation and change of control preference equal to the stated value plus
accrued and unpaid dividends.  Commencing January 1, 2011, the holders are
entitled to semi-annual dividends at a rate of 7.5% per annum, payable in cash,
common stock preferred stock or any combination of the foregoing, at the
election of Comstock. At the holder's election, each share of A-1 Preferred is
convertible at a fixed conversion rate (subject to anti dilution) into 1,536
shares of common stock of Comstock, therefore converting into common stock at a
conversion price of $0.6510.  Each share of A-1 Preferred will entitle the
holder to vote with the holders of common stock as a single class on all
matters submitted to the vote of the common stock (on an as converted basis)
and, for purposes of voting only, each share of A-1 Preferred shall be entitled
to five times the number of votes per common share to which it would otherwise
be entitled. Each share of A-1 Preferred shall entitle its holder to one (1)
vote in any matter submitted to vote of holders of Preferred Stock, voting as a
separate class. The A-1 Preferred, in conjunction with the other series of
newly created Preferred Stock of Comstock discussed below, also has certain
rights requiring consent of the Preferred Stock holders for Comstock to take
certain corporate and business actions. The holders will have registration
rights with respect to the shares of common stock underlying the A-1 Preferred
and also preemptive rights, In addition, so long as the holders of the A-1
Preferred hold 25% or more of the total Preferred Stock of Comstock, (i) Mr.
Winfield will be a member of Comstock's board of directors and (ii) the A-1
Preferred holders will have the right, upon written request to Comstock, to
nominate a member of Comstock's board of directors who meet the definition of
an "independent" director" and other requirements. The foregoing description of
the A-1 Preferred and the specific terms of the A-1 Preferred is qualified in
its entirety by reference to the provisions of the Series A Securities Purchase
Agreement, the Certificate of Designation of Preferences and Rights and
Limitations of 7 1/2% Series A-1 Convertible Preferred Stock and the
Registration Rights Agreement for the Series A Preferred Stock, attached to
this report as Exhibits 10.1 10.2 and 10.3, respectively.

Concurrent with the exchange of the convertible debt held by the Company and
Mr. Winfield for A-1 Preferred, Comstock also exchanged approximately
$8,483,000 of other senior indebtedness for 8,483 shares of newly created
7 1/2% Series A-2 Convertible Preferred Stock (the A-2 Preferred") and issued
35,750 shares of 7 1/2% Series B Convertible Preferred Shares (the "B
Preferred") as part of a new equity raise of $35.75 million in gross proceeds
($32 million, net of commissions and transaction related expenses). Each share

                                   -2-


of A-2 Preferred is convertible into 1,536 shares of common stock and each
share of B Preferred is convertible into 606 shares of common stock, both at a
fixed conversion rate (subject to anti dilution adjustments). Each share of A-2
Preferred and B Preferred will entitle the holder to vote with the holders of
common stock as a single class on all matters submitted to the vote of the
common stock on an as converted basis. Each share of A-2 Preferred and B
Preferred shall also entitle its holder to one (1) vote in any matter submitted
to vote of holders of Preferred Stock, voting as a separate class. Following
these transactions, the A-1 Preferred will constitute approximately 32.1% of
the total Preferred Stock of Comstock.

As long as 25% or more of the Preferred Stock issued on or prior to October 20,
2010 is outstanding, Comstock will not be permitted (subject to limited
exceptions) without the consent of the Preferred Stock, to incur indebtedness,
grant liens, repurchase more than 5% of the common stock outstanding, enter
into any transaction with an affiliate of Comstock which is not on an arm's
length basis, enter into transactions with affiliates of officers or directors
that provide for the payment of services in securities of Comstock, amend its
certificate of incorporation, by-laws, or a certificate of designations of the
Preferred Stock in a manner that adversely affects the interests of the
Preferred Stock, issue new series of preferred stock, pay dividends on equity
junior to the Preferred Stock, adopt an executive equity incentive plan which
provides for the issuance of not greater than 6.0% of the fully diluted equity
of the Company, enter into any transaction for the sale or pledge of a material
asset of Comstock, approve or consent to the initiation of a bankruptcy
proceeding or issue any securities of the Comstock in exchange for services to
a consultant.  A majority of the Preferred Stock is generally required to
provide consent; provided, that the holders of the A-1 Preferred must be part
of that majority so long as they hold 25% or more of the Preferred Stock.

In addition, as long as at least 25% of the Preferred Stock issued on or prior
to October 20, 2010, is still outstanding, and as long as the holders of the A-
1 Preferred still hold at least 25% of the Preferred Stock, Comstock shall not,
without the affirmative vote of the holders of the A-1 Preferred, enter into
any transaction for the acquisition of any business, property or asset pursuant
to which Comstock will incur indebtedness to finance such acquisition in
principal amount in excess of $500,000, pay any dividends to holders of
Preferred Stock in cash in an amount to exceed $500,000, engage in a private
placement or public offering of any common stock or common stock equivalents of
the Comstock, enter into a Change of Control Transaction (as defined in each
certificate of designation) or enter into any transaction that would constitute
a Fundamental Transaction (as defined in each certificate of designation).

Following the transactions discussed herein, the Company will have an economic
ownership (on a converted basis) of approximately 24.5% in Comstock and have
the right to vote approximately 47.6% of the common stock pursuant to the
voting rights it was granted pursuant to the A-1 Preferred.

                                   -3-




Item 9.01  Financial Statements and Exhibits

     (d) Exhibits

         10.1 Securities Purchase Agreement dated as of August 31, 2010
              (Series A Preferred).

         10.2 Certificate of Designation of Preferences and rights and
              Limitations of 7 1/2% Series A-1 Convertible Preferred Stock,
              dated October 20, 2010.

         10.3 Registration Rights Agreement for the Series A Preferred Stock



                               SIGNATURES

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

                                            THE INTERGROUP CORPORATION

Dated: October 26, 2010                  By  /s/ Michael G. Zybala
                                             -----------------------------
                                             Michael G. Zybala
                                             Asst. Secretary and Counsel

                                   -4-



                              EXHIBIT INDEX

Exhibit
Number                        Description
- -------                       -----------

10.1              Securities Purchase Agreement dated as of August 31, 2010
                  (Series A Preferred).

10.2              Certificate of Designation of Preferences and rights and
                  Limitations of 7 1/2% Series A-1 Convertible Preferred Stock,
                  dated October 20, 2010.

10.3              Registration Rights Agreement for the Series A Preferred
                  Stock

EX-10

                                                             Exhibit 10.1

                    SECURITIES PURCHASE AGREEMENT

      This Securities Purchase Agreement (this "Agreement") is dated as of
August 31, 2010, between Comstock Mining Inc., a Nevada corporation (the
"Company"), and each Purchaser identified on Schedule A hereto (each,
including its successors and assigns, a "Purchaser" and collectively, the
"Purchasers").

      WHEREAS, subject to the terms and conditions set forth in this
Agreement and pursuant to Section 4(2) of the Securities Act of 1933, as
amended (the "Securities Act"), and Rule 506 promulgated thereunder, the
Company desires to issue and sell to each Purchaser, and each Purchaser,
severally and not jointly, desires to purchase from the Company, securities
of the Company as more fully described in this Agreement; and

      NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser
agree as follows:

                               ARTICLE 1
                              DEFINITIONS

      1.1   Definitions.  In addition to the terms defined elsewhere in this
Agreement: (a) capitalized terms that are not otherwise defined herein have
the meanings given to such terms in the other Transaction Documents (as
applicable), and (b) the following terms have the meanings set forth in this
Section 1.1:

      "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 405
under the Securities Act.

      "Board of Directors" means the board of directors of the Company.

      "Business Day" means any day except any Saturday, any Sunday, any day
which is 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.

      "Closing" means the closing of the purchase and sale of the Securities
pursuant to Section 2.1.

      "Closing Date" has the meaning set forth in Section 2.1.

      "Commission" means the United States Securities and Exchange
Commission.

      "Common Stock" means the common stock of the Company, par value
$0.000666 per share, and any other class of securities into which such common
stock may hereafter be reclassified or changed.

      "Common Stock Equivalents" means any securities of the Company or the
Subsidiaries which would, directly or indirectly, 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, directly or indirectly, convertible into or exercisable or exchangeable
for, or otherwise entitles the holder thereof to receive, Common Stock.

                                  1


      "Company Counsel" means Kelley Drye & Warren LLP, with offices located
at 101 Park Avenue, New York, NY 10178.

      "Cross-Receipt" means the cross receipts executed by the Purchasers and
the Company, each in the form of Exhibit F hereto.

      "Disclosure Schedules" shall have the meaning set forth in Section 3.1.

      "Effective Date" means the earlier of the date that (a) all of the
Registrable Securities (as defined in the Registration Rights Agreement) have
been registered for resale by the holders thereof pursuant to a registration
statement(s) declared effective by the Commission or (b) all of the
Registrable Securities have been sold pursuant to Rule 144 or may be sold
pursuant to Rule 144 without volume or manner-of-sale restrictions, so long
as the Company is current with the public information requirements under Rule
144.

      "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 (i) duly adopted for such purpose, by a majority of the
non-employee members of the Board of Directors or a majority of the members
of a committee of non-employee directors established for such purpose, and
(ii) approved pursuant to the provisions of Section 8 of the Series A-1
Certificate of Designation and the Series A-2 Certificate of Designation, (b)
securities upon the exercise or exchange of or conversion of any Securities
issued hereunder (including, without limitation, any Underlying Shares)
and/or other securities exercisable or exchangeable for or convertible into
shares of Common Stock issued and outstanding on the date of this Agreement
or as disclosed in the Company's Disclosure Schedules, provided that such
securities have not been amended on or after the date of this Agreement to
increase the number of such securities or to decrease the exercise price,
exchange price or conversion price of such securities (it being understood
that such securities may be adjusted for anti-dilution purposes in connection
with this Agreement), (c) securities issued pursuant to acquisitions or
strategic transactions approved by (i) a majority of the disinterested
directors of the Company, and (ii) pursuant to the provisions of Section 8 of
the Series A-1 Certificate of Designation and the Series A-2 Certificate of
Designation, and (d) securities issued as consideration for (i) dividends to
the Purchasers of the Preferred Stock under the Series A-1 Certificate of
Designation and the Series A-2 Certificates of Designation and to purchasers
of any other Parity Securities (including, solely with respect to the Series
A-2 Preferred Stock and any other Parity Securities, as the case may be, any
and all shares of Common Stock issuable in lieu of cash payments pursuant to
the Make-Whole Payment and including, solely with respect to the Series A-1
Preferred Stock, any and all shares of Common Stock issuable in lieu of cash
payments pursuant to the Additional Dividend payment (as defined in the
Series A-1 Certificate of Designation)); or (ii) capital contributions to
Northern Comstock LLC made pursuant to the Limited Liability Company
Operating Agreement.

      "Existing Debt Amount" means, with respect to each Purchaser, the
amount owed by the Company to such Purchaser under such Purchaser's Existing
Promissory Note as of the Closing, as set forth on Schedule A hereto.

      "Existing Promissory Notes" means the promissory notes listed on
Schedule B hereto.

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

      "Liens" means a lien, charge, security interest, encumbrance, right of
first refusal, preemptive right or other restriction.

                                  2


      "Limited Liability Company Operating Agreement" means the Northern
Comstock LLC Limited Liability Company Operating Agreement, dated August __,
2010, entered into among DWC Resources Inc., John Winfield and the Company,
in the form of Exhibit G hereto.

      "Lost Note Affidavit and Indemnity Agreement" means a Lost Note
Affidavit and Indemnity Agreement in a form reasonably acceptable to the
Company in the form attached hereto as Exhibit E.

      "Material Adverse Effect" shall have the meaning assigned to such term
in Section 3.1(b).

      "Northern Comstock LLC" means the limited liability company formed
under Chapter 86 of the Nevada Revised Statutes Act on August __, 2010.

      "Participation Maximum" shall have the meaning ascribed to such term in
Section 4.8(a).

      Payoff Letter" means the payoff letters executed by the Purchasers in
favor of the Company, each in the form of Exhibit A hereto, providing for
termination and release of all obligations under the applicable Existing
Promissory Note and related Loan Documents (as defined in such Payoff
Letter).

       "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.

      "Preferred Stock" means shares of Series A-1 Preferred Stock and shares
of Series A-2 Preferred Stock issued to the Purchasers hereunder.

      "Pre-Notice" shall have the meaning ascribed to such term in Section
4.8(b).

      "Pro Rata Portion" shall have the meaning ascribed to such term in
Section 4.8(e).

      "Proceeding" means an action, claim, suit, investigation or proceeding
(including, without limitation, an informal investigation or partial
proceeding, such as a deposition), whether commenced or threatened.

      "Purchaser Party" shall have the meaning ascribed to such term in
Section 4.6.

      "Registration Rights Agreement" means the Registration Rights
Agreement, in the form of Exhibit B hereto, by and among the Company and the
Purchasers, providing registration rights with respect to the Underlying
Shares held by the Purchasers on the terms and conditions set forth therein.

      "Required Approvals" shall have the meaning ascribed to such term in
Section 3.1(e).

      "Required Minimum" means, as of any date, the maximum aggregate number
of shares of Common Stock then issued or potentially issuable in the future
pursuant to the Transaction Documents, including any Underlying Shares,
ignoring any conversion or exercise limits set forth therein and assuming
that any previously unconverted shares of Preferred Stock are held until the
third anniversary of the Closing Date and all dividends are paid in shares of
Common Stock or Preferred Stock until such third anniversary.

                                  3


      "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.

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

      "Securities" means the Preferred Stock and the Underlying Shares.

      "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.

      "Series A-1 Certificate of Designation" means the 71/2% Series A-1
Convertible Preferred Stock Certificate of Designation to be filed prior to
the Closing by the Company with the Secretary of State of Nevada, in the form
of Exhibit C attached hereto.

      "Series A-1 Preferred Stock" means the Company's 71/2% Series A-1
Convertible Preferred Stock issued hereunder having the rights, preferences
and privileges set forth in the Series A-1 Certificate of Designation.

      "Series A-2 Certificate of Designation" means the 71/2% Series A-2
Convertible Preferred Stock Certificate of Designation to be filed prior to
the Closing by the Company with the Secretary of State of Nevada, in the form
of Exhibit D attached hereto.

      "Series A-2 Preferred Stock" means the Company's 71/2% Series A-2
Convertible Preferred Stock issued hereunder having the rights, preferences
and privileges set forth in the Series A-2 Certificate of Designation.

      "Short Sales" means all "short sales" as defined in Rule 200 of
Regulation SHO under the Exchange Act (but shall not be deemed to include the
location and/or reservation of borrowable shares of Common Stock).

      "Stated Value" means $1,000 per share of Preferred Stock, subject to
adjustment as provided in the Series A-1 Certificate of Designation or the
Series A-2 Certificate of Designation (as applicable).

      "Subsequent Financing" shall have the meaning ascribed to such term in
Section 4.8(a).

      "Subsequent Financing Notice" shall have the meaning ascribed to such
term in Section 4.8(b).

      "Subsidiary" shall have the meaning ascribed to such term in Section
3.1(a) and shall, where applicable, also include any direct or indirect
subsidiary of the Company formed or acquired after the date hereof.

      "Trading Day" means a day on which the principal Trading Market is open
for trading.

      "Trading Market" means any of the following markets or exchanges on
which the Common Stock is listed or quoted for trading on the date in
question: the New York Stock Exchange, American Stock Exchange, the Toronto
Stock Exchange, the Nasdaq Capital Market, the Nasdaq Global Market, the
Nasdaq Global Select Market, the New York Stock Exchange or the OTC Bulletin
Board (or any successors to any of the foregoing).

                                  4


      "Transaction Documents" means this Agreement, the Series A-1
Certificate of Designation, the Series A-2 Certificate of Designation, the
Registration Rights Agreement, all exhibits and schedules thereto and hereto,
and any other documents or agreements executed in connection with the
transactions contemplated hereunder (including, without limitation, the
documents referenced in Section 2.2(c)(ii)(B)).

      "Transfer Agent" means Corporate Stock Transfer Inc., the current
transfer agent of the Company, with a mailing address of 3200 Cherry Creek
South Drive, Suite 430, Denver, CO 80209, and any successor transfer agent of
the Company.

      "Underlying Shares" means the shares of Common Stock that are:

      (a)  issued and issuable upon conversion of the Series A-1 Preferred
Stock or Series A-2 Preferred Stock issued to the Purchasers hereunder; and

      (b)  issued or issuable in lieu of cash payment of dividends on the
Preferred Stock referenced in clause (a) in accordance with the terms of the
Series A-1 Certificate of Designation and the Series A-2 Certificate of
Designation, as applicable (including, solely with respect to the Series A-2
Preferred Stock, any and all shares of Common Stock issuable in lieu of cash
payments pursuant to the Make-Whole Payment (as defined in the Series A-2
Certificate of Designation) and including, solely with respect to the Series
A-1 Preferred Stock, any and all shares of Common Stock issuable in lieu of
cash payments pursuant to the Additional Dividend payment (as defined in the
Series A-1 Certificate of Designation).

                                ARTICLE
                            PURCHASE AND SALE

      2.1   Closing.

      (a)   On the date hereof (the "Closing Date"), upon the terms and
subject to the conditions set forth herein, substantially concurrent with the
execution and delivery of this Agreement by the parties hereto, the Company
agrees to sell, and the Purchasers, severally and not jointly, each agree to
purchase, the number of shares of Series A-1 Preferred Stock or Series A-2
Preferred Stock (as applicable), as set forth on Schedule A hereto,
determined by dividing such Purchaser's Existing Debt Amount, as set forth on
Schedule A hereto, by the Stated Value of one (1) share of Series A-1
Preferred Stock or Series A-2 Preferred Stock (as applicable)

      (b)   The Company and each Purchaser shall each deliver the items set
forth in Section 2.2 deliverable at the Closing.  Upon satisfaction of the
covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall
occur at the offices of Company Counsel or such other location as the parties
shall mutually agree.

      2.2   Deliveries.

      (a)   On or prior to the Closing Date, the Company shall deliver or
cause to be delivered to each Purchaser the following:

           (i)    this Agreement and the Registration Rights Agreement, and
      such Purchaser's Payoff Letter and Cross-Receipt, each duly executed by
      the Company, and (ii) evidence of the filing and acceptance of the
      Series A-1 Certificate of Designation or the Series A-2 Certificate of
      Designation (as applicable), from the Secretary of State of Nevada.

                                  5


      (b)   Within five (5) Business Days after the Closing Date, the Company
shall deliver or cause to be delivered to each Purchaser a certificate
evidencing the number of shares of Preferred Stock issued to such Purchaser,
determined as provided herein, registered in the name of such Purchaser.

      (c)   On or prior to the Closing Date, each Purchaser shall deliver or
cause to be delivered to the Company the following:

          (i)    this Agreement, the Registration Rights Agreement and such
      Purchaser's Payoff Letter, each duly executed by such Purchaser, and

          (ii) such Purchaser's original Existing Promissory Note or a Lost
      Note Affidavit and Indemnity Agreement, duly executed by such Purchaser.

      (d)   Upon receipt of the certificate identified in subsection (b)
above, the Purchaser shall deliver or cause to be delivered to the Company
such Purchaser's Cross-Receipt, duly executed by such Purchaser.

      2.3   Closing Conditions.

      (a)   The obligations of the Company hereunder in connection with the
Closing are subject to the following conditions being met:

           (i)   the accuracy in all material respects on the Closing Date

      of the representations and warranties of the Purchasers contained herein
      (unless as of a specific date therein);

           (ii)   all obligations, covenants and agreements of each Purchaser
      required to be performed at or prior to the Closing Date shall have been
      performed; and

           (iii)  the delivery by each Purchaser of the items set forth in
      Sections 2.2(c) and (d) of this Agreement.

      (b)   The respective obligations of the Purchasers hereunder in
connection with the Closing are subject to the following conditions being
met:

           (i)    the accuracy in all material respects when made and on the
      Closing Date of the representations and warranties of the Company
      contained herein (unless as of a specific date therein);

           (ii)   all obligations, covenants and agreements of the Company
      required to be performed at or prior to the Closing Date shall have been
      performed; and

           (iii)  the delivery by the Company of the items set forth in
      Sections 2.2(a) and (b) of this Agreement.

                                ARTICLE 3
                     REPRESENTATIONS AND WARRANTIES

       3.1          Representations and Warranties of the Company.  Except as
set forth in the Disclosure Schedules, which Disclosure Schedules shall be
deemed a part hereof and shall qualify any representation otherwise made
herein to the extent of the disclosure contained in the corresponding section
of the

                                  6


Disclosure Schedules, the Company hereby makes the following representations
and warranties to each Purchaser:

      (a)   Subsidiaries.  GoldSpring, LLC, The Plum Mining Company, LLC, and
the Plum Mine Special Purpose Company LLC (collectively, the "Subsidiaries,"
and each a "Subsidiary") are the only direct or indirect subsidiaries of the
Company.  The Company owns, directly or indirectly, all of the capital stock
or other equity interests of each Subsidiary free and clear of any Liens,
other than Liens incurred in connection with the Existing Promissory Notes
and which shall be discharged at the Closing of the transactions contemplated
hereunder, and all of 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.

      (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, 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 material 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, the Board of Directors or the
Company's stockholders in connection therewith.  Each Transaction Document to
which it is a party 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 by the
Company of the Transaction Documents, the issuance and sale of the Securities
and the consummation by it of the transactions contemplated hereby and
thereby to which it is a party 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, (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

                                  7


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) the filings required pursuant to Section 4.5 of
this Agreement, (ii) the filings with the Commission pursuant to the
Registration Rights Agreement, (iii) the notice and/or application(s) to each
applicable Trading Market for the issuance and sale of the Preferred Stock
and the listing of the Underlying Shares 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.  The Underlying Shares,
when issued in accordance with the terms of the Transaction Documents, will
be 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.  The Company has reserved from its duly authorized
capital stock a number of shares of Common Stock for issuance of the
Underlying Shares at least equal to 100% of the shares of Common Stock
initially issuable upon conversion of the Preferred Stock issuable hereunder.

      (g)   Capitalization.  The capitalization of the Company is as set
forth on Schedule 3.1(g), which Schedule 3.1(g) also includes the number of
shares of Common Stock owned beneficially, and of record, by Affiliates of
the Company as of the date hereof.  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 or as set forth in Schedule
3.1(g) or in the SEC Reports, there are no outstanding options, warrants,
scrip rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities, rights or obligations convertible into
or exercisable or exchangeable for, or giving any Person any right to
subscribe for or acquire any shares of Common Stock, or contracts,
commitments, understandings or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of Common Stock
or Common Stock Equivalents.  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 Purchasers) 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 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

                                  8


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.

      (h)   SEC Reports; Financial Statements.  The Company has filed all
quarterly and annual reports required to be filed by the Company under the
Exchange Act for the three (3) years preceding the date hereof (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.

      (i)   Material Changes; Undisclosed Events, Liabilities or
Developments. Except as set forth on Schedule 3.1(i) or the SEC Reports,
since the date of the latest audited financial statements included within the
SEC Reports: (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(i), no event, liability, fact, circumstance,
occurrence or development has occurred or exists or is reasonably expected to
occur or exist with respect to the Company or its Subsidiaries or their
respective business, properties, operations, assets or financial condition,
that would be required to be disclosed by the Company under applicable
securities laws at the time this representation is made or deemed made that
has not been publicly disclosed at least one (1) Trading Day prior to the
date that this representation is made.

      (j)   Private Placement.  Assuming the accuracy of the Purchasers'
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 Purchasers as contemplated hereby.  The issuance and
sale of the Securities hereunder does not contravene the rules and
regulations of the Trading Market.

      (k)   No Integrated Offering.  Assuming the accuracy of the Purchasers'
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

                                  9


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 (i) the Securities Act which would require the
registration of any such securities under the Securities Act, or (ii) any
applicable stockholder approval provisions of any Trading Market on which any
of the securities of the Company are listed or designated.

      (l)   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 Purchasers and certain other
"accredited investors" within the meaning of Rule 501 under the Securities
Act.

      (m)   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.  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.

      (n)   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), except as described in the SEC Reports or as set forth in Schedule
3.1(n) hereto, (ii) is in violation of any judgment, decree or order of any
court, arbitrator or governmental body or (iii) is or has been in violation
of any statute, rule, ordinance or regulation of any governmental authority,
including without limitation all foreign, federal, state and local laws
relating to taxes, environmental protection, occupational health and safety,
product quality and safety and employment and labor matters, except in each
case as could not have or reasonably be expected to result in a Material
Adverse Effect.

      (o)   Title to Assets.  Except as set forth in the SEC Reports, the
Company and the Subsidiaries have good and marketable title in fee simple to
all real property owned by them 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.

      (p)   Sarbanes-Oxley; Internal Accounting Controls.  The Company is in
compliance with any and all requirements of the Sarbanes-Oxley Act of 2002
applicable to smaller reporting companies that are effective as of the date
hereof, and any and all applicable rules and regulations promulgated by the
Commission thereunder that are effective as of the date hereof and 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

                                  10


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
balances of assets are compared with the actual assets of the Company 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.

      (q)   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 (i) has made or filed all
required United States federal and state income and all foreign income and
franchise tax returns (or extension requests related thereto), reports and
declarations required by any jurisdiction to which it is subject, (ii) has
paid all taxes and other governmental assessments and charges that are
material in amount, shown or determined to be due on such returns, reports
and declarations and (iii) has set aside on its books provision reasonably
adequate for the payment of all material taxes for periods subsequent to the
periods to which such returns, reports or declarations apply. There are no
unpaid taxes in any material amount claimed to be due by the taxing authority
of any jurisdiction, and the officers of the Company or of any Subsidiary
know of no basis for any such claim.

      3.2   Representations and Warranties of the Purchasers.  Each
Purchaser, for itself and for no other Purchaser, severally and not jointly,
hereby represents and warrants as of the date hereof and as of the Closing
Date to the Company as follows (unless as of a specific date therein):

      (a)   Organization; Authority.  Such Purchaser is either an individual
or an entity duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization with full right, corporate or
other 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 and delivery of the
Transaction Documents and performance by such Purchaser of the transactions
contemplated by the Transaction Documents have been duly authorized by all
necessary corporate, partnership, limited liability company or similar
action, as applicable, on the part of such Purchaser.  Each Transaction
Document to which it is a party has been duly executed by such Purchaser, and
when delivered by such Purchaser in accordance with the terms hereof, will
constitute the valid and legally binding obligation of such Purchaser,
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.  If the Purchaser(s) is a
corporation, trust, partnership or other entity that is not an individual
person, it has not been organized for the specific purpose of purchasing the
Securities and is not prohibited from doing so.

                                  11


      (b)    Own Account.  Such Purchaser understands that the Securities are
"restricted securities" and have not been registered under the Securities Act
or any applicable state securities law and is acquiring the Securities as
principal for its own account and not with a view to or for distributing or
reselling such Securities 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 Securities 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 Securities in violation of the Securities Act or any
applicable state securities law (this representation and warranty not
limiting such Purchaser's right to sell the Securities pursuant to the
Registration Statement or otherwise in compliance with applicable federal and
state securities laws). Such Purchaser is acquiring the Securities hereunder
in the ordinary course of its business.

      (c)   Purchaser Status.  At the time such Purchaser was offered the
Securities, it was, and as of the date hereof it is, and on each date on
which it converts any shares of Preferred Stock, it will be either: (i) an
"accredited investor" as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or
(a)(8) under the Securities Act or (ii) a "qualified institutional buyer" as
defined in Rule 144A(a) under the Securities Act. Such Purchaser is not
required to be registered as a broker-dealer under Section 15 of the Exchange
Act.

      (d)   Experience of Such Purchaser.  Such Purchaser, 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.  Such Purchaser 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)   Reliance on Exemptions.  Each Purchaser understands that the
Securities are being offered and sold to it in reliance on specific
exemptions from the registration requirements of United States federal and
state securities laws and that the Company is relying in part upon the truth
and accuracy of, and such Purchaser's compliance with, the representations,
warranties, agreements, acknowledgments and understandings of such Purchaser
set forth herein in order to determine the availability of such exemptions
and the eligibility of such Purchaser to acquire the Securities.  Each
Purchaser understands that no United States federal or state agency or any
other government or governmental agency has passed on or made any
recommendation or endorsement of the Securities, or the fairness or
suitability of the investment in the Securities, nor have such authorities
passed upon or endorsed the merits of the offering of the Securities.

      (f)   General Solicitation.  Such Purchaser 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.

      (g)   Representations of Purchasers.  Each Purchaser solely owns all
right, title and interest in and to its respective Existing Promissory
Note(s) and has not conveyed any interest or other right in any such Existing
Promissory Note to any other Person or otherwise subjected, or allowed to be
subjected, such Existing Promissory Note to any lien or other encumbrance.
The transactions contemplated by this Agreement will result in the full and
complete release and satisfaction of any and all obligations of the Company
with respect to each Purchaser's Existing Promissory Note(s).  The Existing
Promissory Note(s) being tendered by each Purchaser to the Company pursuant
to this Agreement are the only promissory notes or other debt obligations of
the Company to such Purchaser.

                                  12


      (h)   No Legal Advice From the Company; Sole Representations in
Agreement.  Each Purchaser acknowledges that it had the opportunity to review
this Agreement and the transactions contemplated by this Agreement with his
or its own legal counsel and investment and tax advisors.  Each Purchaser is
relying solely on such counsel and advisors and not on any statements or
representations of the Company or any of its representatives or agents for
legal, tax or investment advice with respect to this investment, the
transactions contemplated by this Agreement or the securities laws of any
jurisdiction.  Each Purchaser acknowledges that the only representations
being made by the Company in connection with the transactions contemplated by
this Agreement are set forth in this Article III and that in connection with
its decision to enter into the transactions contemplated by this Agreement,
it is relying only on such representations in this Article III and the SEC
Reports, and not on any other statements or representations of the Company or
any of its representatives or agents.

      (i)   Each Purchaser acknowledges, by its execution of this Agreement,
that its obligations hereunder are irrevocable.

The Company acknowledges and agrees that the representations contained in
Section 3.2 shall not modify, amend or affect such Purchaser's right to rely
on the Company's representations and warranties contained in this Agreement
or any representations and warranties contained in any other Transaction
Document or any other document or instrument executed and/or delivered in
connection with this Agreement or the consummation of the transaction
contemplated hereby.

                               ARTICLE 4
                    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 a Purchaser 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 and obligations of a Purchaser under this
Agreement.

      (b)   The Purchasers agree 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:

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS
CONVERTIBLE HAS 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. THIS SECURITY AND THE SECURITIES ISSUABLE UPON
CONVERSION OF THIS

                                  13


SECURITY 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 a Purchaser 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, if required under the terms of such
arrangement, such Purchaser 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.

      (c)   Certificates evidencing the Underlying Shares shall not contain
any legend (including the legend set forth in Section 4.1(b) hereof): (i)
while a registration statement covering the resale of such security is
effective under the Securities Act, (ii) following any sale of such
Underlying Shares pursuant to Rule 144, (iii) if such Underlying Shares are
eligible for sale under Rule 144, without the requirement for the Company to
be in compliance with the current public information required under Rule 144
as to such Underlying Shares and without volume or manner-of-sale
restrictions or (iv) 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 Transfer Agent promptly
after the Effective Date if required by the Transfer Agent to effect the
removal of the legend hereunder.  If all or any shares of Preferred Stock are
converted at a time when there is an effective registration statement to
cover the resale of the Underlying Shares, or if such Underlying Shares may
be sold under Rule 144 and the Company is then in compliance with the current
public information required under Rule 144, or if the Underlying Shares may
be sold under Rule 144 without the requirement for the Company to be in
compliance with the current public information required under Rule 144 as to
such Underlying Shares and without volume or manner-of-sale restrictions or
if such legend is not otherwise required under applicable requirements of the
Securities Act (including judicial interpretations and pronouncements issued
by the staff of the Commission), then such Underlying Shares shall be issued
free of all legends.  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 three Trading Days following the delivery by a
Purchaser to the Company or the Transfer Agent of a certificate representing
Underlying Shares, as applicable, issued with a restrictive legend, deliver
or cause to be delivered to such Purchaser a certificate representing such
shares that is free from all restrictive and other legends.  The Company may
not make any notation on its records or give instructions to the Transfer
Agent that enlarge the restrictions on transfer set forth in this Section
4.1(c).  Certificates for Underlying Shares subject to legend removal
hereunder shall be transmitted by the Transfer Agent to the Purchaser by
crediting the account of the Purchaser's prime broker with the Depository
Trust Company System as directed by such Purchaser.

      (d)   Each Purchaser, severally and not jointly with the other
Purchasers, agrees with the Company that such Purchaser will only sell any
Securities pursuant to either the registration requirements of the Securities
Act, including any applicable prospectus delivery requirements, or an
exemption therefrom, and acknowledges 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 upon this understanding.

      4.2   Furnishing of Information.  Until the time that no Purchaser owns
any Securities, the Company covenants to maintain the registration of the
Common Stock under Section 12(b) or 12(g) of the Exchange Act and to timely

                                  14


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 even if the Company is not then subject
to the reporting requirements of the Exchange Act.  As long as any Purchaser
owns any Securities, if the Company is not required to file reports pursuant
to the Exchange Act, it will prepare and furnish to the Purchasers and make
publicly available in accordance with Rule 144(c) such information as is
required for the Purchasers to sell the Securities, including without
limitation, under Rule 144.  The Company further covenants that it will take
such further action as any holder of Securities may reasonably request, to
the extent required from time to time to enable such Person to sell such
Securities without registration under the Securities Act, including without
limitation, within the requirements of the exemption provided by Rule 144.
With regard to the Securities purchased relating to the Purchasers' Existing
Debt Amount owed by the Plum Mine Special Purpose Company LLC, as evidenced
by the Existing Promissory Notes issued by the Plum Mine Special Purpose
Company, the Company represents that it has been advised by counsel that, if
the Purchasers sought to transfer such Securities immediately after the
Closing, such Securities would be eligible for tacking under 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 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
stockholder approval prior to the closing of such other transaction unless
stockholder approval is obtained before the closing of such subsequent
transaction.

      4.4   Conversion Procedure.  The form of Notice of Conversion included
in the Series A-1 Certificate of Designation or the Series A-2 Certificate of
Designation (as applicable) sets forth the totality of the procedures
required of the Purchasers in order to convert the Preferred Stock.  No
additional legal opinion, other information or instructions shall be required
of the Purchasers to convert their Preferred Stock. The Company shall honor
conversions of the Preferred Stock and shall deliver Underlying Shares in
accordance with the terms, conditions and time periods set forth in the
Transaction Documents.

       4.5   Securities Laws Disclosure; Publicity.  The Company shall, in
accordance with applicable federal securities law, issue a Current Report on
Form 8-K and press release disclosing the material terms of the transactions
contemplated hereby, and including the Transaction Documents as exhibits
thereto.  From and after the issuance of such press release, the Company
shall have publicly disclosed all material, non-public information delivered
to any of the Purchasers by the Company or any of its subsidiaries, or any of
their respective officers, directors, employees or agents in connection with
the transactions contemplated by the Transaction Documents. The Company and
each Purchaser shall consult with each other in issuing any other press
releases with respect to the transactions contemplated hereby, and neither
the Company nor any Purchaser shall issue any such press release nor
otherwise make any such public statement without the prior consent of the
Company, with respect to any press release of any Purchaser, or without the
prior consent of each Purchaser, 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. Notwithstanding the foregoing, the Company shall
not publicly disclose the name of any Purchaser, or include the name of any
Purchaser in any filing with the Commission or any regulatory agency or
Trading Market, without the prior written consent of such Purchaser, except:
(a) as required by federal securities law in connection with (i) any
registration statement contemplated by the Registration Rights Agreement and
(ii) the filing of final Transaction

                                  15


Documents (including signature pages thereto) with the Commission; and (b) to
the extent such disclosure is required by law or Trading Market regulations,
in which case the Company shall provide the Purchasers with prior notice of
such disclosure permitted under this Section 4.5.

      4.6   Indemnification of Purchasers.  Subject to the provisions of this
Section 4.6, the Company will indemnify and hold each Purchaser 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 such Purchaser (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 "Purchaser Party") harmless from any and all losses,
liabilities, obligations, claims, contingencies, damages, costs and expenses,
including all judgments, amounts paid in settlements, court costs and
reasonable attorneys' fees and costs of investigation that any such Purchaser
Party may suffer or incur as a result of or relating to any breach of any of
the representations, warranties, covenants or agreements made by the Company
in this Agreement or in the other Transaction Documents.  The indemnification
required by this Section 4.6 shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as and when bills
are received or are incurred.

      4.7   Reservation and Listing of Securities.

      (a)   The Company shall maintain a reserve from its duly authorized
shares of Common Stock for issuance pursuant to the Transaction Documents in
such amount as may then be required to fulfill its obligations in full under
the Transaction Documents.

      (b)   If, on any date, the number of authorized but unissued (and
otherwise unreserved) shares of Common Stock and/or Preferred Stock is less
than 130% of (i) the Required Minimum on such date, minus (ii) the number of
shares of Common Stock or Preferred Stock (as applicable) previously issued
pursuant to the Transaction Documents, then the Board of Directors shall use
commercially reasonable efforts to amend the Company's certificate or
articles of incorporation to increase the number of authorized but unissued
shares of Common Stock and/or Preferred Stock (as applicable) to at least the
Required Minimum at such time (minus the number of shares of Common Stock
and/or Preferred Stock (as applicable) previously issued pursuant to the
Transaction Documents), as soon as possible and in any event not later than
the 120th day after such date; provided that the Company will not be required
at any time to authorize a number of shares of Common Stock and/or Preferred
Stock (as applicable) greater than the maximum remaining number of shares of
Common Stock or Preferred Stock (as applicable) that could possibly be issued
after such time pursuant to the Transaction Documents.

      (c)   The Company shall, if applicable: (i) in the time and manner
required by the principal Trading Market, prepare and file with such Trading
Market an additional shares listing application covering a number of shares
of Common Stock at least equal to the Required Minimum on the date of such
application, (ii) take all steps necessary to cause such shares of Common
Stock to be approved for listing or quotation on such Trading Market as soon
as possible thereafter, (iii) provide to the Purchasers evidence of such
listing or quotation and (iv) maintain the listing or quotation of such
Common Stock on any date at least equal to the Required Minimum on such date
on such Trading Market or another Trading Market.

      4.8   Participation in Future Financing.

      (a)   From the date hereof until such time as the Purchasers no longer
hold any shares of Preferred Stock, upon any issuance by the Company or any
of its Subsidiaries of Common Stock, Common Stock Equivalents for cash

                                  16


consideration, or a combination of units hereof (a "Subsequent Financing"),
each Purchaser shall have the right to participate in up to an amount of the
Subsequent Financing equal to 100% of the Subsequent Financing (the
"Participation Maximum") on the same terms, conditions and price provided for
in the Subsequent Financing.

      (b)   At least five (5) Trading Days prior to the closing of the
Subsequent Financing, the Company shall deliver to each Purchaser a written
notice of its intention to effect a Subsequent Financing ("Pre-Notice"),
which Pre-Notice shall ask such Purchaser if it wants to review the details
of such financing (such additional notice, a "Subsequent Financing
Notice").  Upon the request of a Purchaser, and only upon a request by such
Purchaser, for a Subsequent Financing Notice, the Company shall promptly, but
no later than one (1) Trading Day after such request, deliver a Subsequent
Financing Notice to such Purchaser.  The Subsequent Financing Notice shall
describe in reasonable detail the proposed terms of such Subsequent
Financing, the amount of proceeds intended to be raised thereunder and the
Person or Persons through or with whom such Subsequent Financing is proposed
to be effected and shall include a term sheet or similar document relating
thereto as an attachment.

      (c)   Any Purchaser desiring to participate in such Subsequent
Financing must provide written notice to the Company by not later than 5:30
p.m. (New York City time) on the fourth (4th) Trading Day after all of the
Purchasers have received the Pre-Notice that the Purchaser is willing to
participate in the Subsequent Financing, the amount of the Purchaser's
participation, and representing and warranting that the Purchaser has such
funds ready, willing, and available for investment on the terms set forth in
the Subsequent Financing Notice.  If the Company receives no such notice from
a Purchaser as of such fourth (4th) Trading Day, such Purchaser shall be
deemed to have notified the Company that it does not elect to participate.

      (d)   If by 5:30 p.m. (New York City time) on the fourth (4th) Trading
Day after all of the Purchasers have received the Pre-Notice, notifications
by the Purchasers of their willingness to participate in the Subsequent
Financing (or to cause their designees to participate) is, in the aggregate,
less than the total amount of the Subsequent Financing, then the Company may
effect the remaining portion of such Subsequent Financing on the terms and
with the Persons set forth in the Subsequent Financing Notice.

      (e)   If by 5:30 p.m. (New York City time) on the fourth (4th) Trading
Day after all of the Purchasers have received the Pre-Notice, the Company
receives responses to a Subsequent Financing Notice from Purchasers seeking
to purchase more than the aggregate amount of the Participation Maximum, each
such Purchaser shall have the right to purchase its Pro Rata Portion (as
defined below) of the Participation Maximum.  "Pro Rata Portion" of a
Purchaser means the ratio of: (x) the aggregate Stated Value of the Preferred
Stock issued to such Purchaser on the Closing Date; and (y) the aggregate
Stated Value of the Preferred Stock issued to all Purchasers participating in
such Subsequent Financing under this Section 4.8.

      (f)   The Company must provide the Purchasers with a second Subsequent
Financing Notice, and the Purchasers will again have the right of
participation set forth above in this Section 4.8, if the Subsequent
Financing subject to the initial Subsequent Financing Notice is not
consummated for any reason on the terms set forth in such Subsequent
Financing Notice within thirty (30) Trading Days after the date of the
initial Subsequent Financing Notice.

      (g)   Notwithstanding the foregoing, this Section 4.8 shall not apply
in respect of (i) an Exempt Issuance or (ii) an underwritten public offering
of Common Stock.

      4.9   Equal Treatment of Purchasers.  No consideration (including any
modification of any Transaction Document) shall be offered or paid to any
Person to amend or consent to a waiver or modification of any provision of
any

                                  17


of the Transaction Documents unless the same consideration is also offered to
all of the parties to the Transaction Documents.  For clarification purposes,
this provision constitutes a separate right granted to each Purchaser by the
Company and negotiated separately by each Purchaser, and is intended for the
Company to treat the Purchasers as a class and shall not in any way be
construed as the Purchasers acting in concert or as a group with respect to
the purchase, disposition or voting of Securities or otherwise.

      4.10   Certain Transactions and Confidentiality.  Each Purchaser,
severally and not jointly with the other Purchasers, covenants that neither
it, nor any Affiliate acting on its behalf or pursuant to any understanding
with it will execute any purchases or sales, including Short Sales, of any of
the Company's securities during the period commencing with the execution of
this Agreement and ending at such time that the transactions contemplated by
this Agreement are first publicly announced pursuant to the initial press
release as described in Section 4.5.  Each Purchaser, severally and not
jointly with the other Purchasers, covenants that until such time as the
transactions contemplated by this Agreement are publicly disclosed by the
Company pursuant to the initial press release as described in Section 4.5,
such Purchaser will maintain the confidentiality of the existence and terms
of this transaction and the information included in the Transaction Documents
and the Disclosure Schedules.  Notwithstanding the foregoing, and
notwithstanding anything contained in this Agreement to the contrary, the
Company expressly acknowledges and agrees that (i) no Purchaser makes any
representation, warranty or covenant hereby that it will not engage in
effecting transactions in any securities of the Company after the time that
the transactions contemplated by this Agreement are first publicly announced
pursuant to the initial press release as described in Section 4.5, (ii) no
Purchaser shall be restricted or prohibited from effecting any transactions
in any securities of the Company in accordance with applicable securities
laws from and after the time that the transactions contemplated by this
Agreement are first publicly announced pursuant to the initial press release
as described in Section 4.5; and (iii) no Purchaser shall have any duty of
confidentiality to the Company or its Subsidiaries after the issuance of the
initial press release as described in Section 4.5.  Notwithstanding the
foregoing, in the case of a Purchaser that is a multi-managed investment
vehicle whereby separate portfolio managers manage separate portions of such
Purchaser's assets and the portfolio managers have no direct knowledge of the
investment decisions made by the portfolio managers managing other portions
of such Purchaser's assets, the covenant 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.

      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 any Purchaser.  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 Purchasers 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 any Purchaser.

                                ARTICLE 5
                              MISCELLANEOUS

      5.1   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
Purchasers.

                                  18


      5.2   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.

      5.3   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, (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, (c) the second (2nd)  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.

      5.4   Amendments; Waivers.  No provision of this Agreement may be
waived, modified, supplemented or amended except in a written instrument
signed, in the case of an amendment, by the Company and Purchaser(s) holding
Existing Promissory Note(s) representing at least a majority of the aggregate
Existing Debt Amount for all Existing Promissory Notes 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.  The parties agree and acknowledge that this
Section 5.4 relates solely to waivers, modifications, supplements and
amendments to this Agreement, and not to any other Transaction Document.

      5.5   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.

      5.6   Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted
assigns.  The Company may not assign this Agreement or any rights or
obligations hereunder without the prior written consent of each Purchaser
(other than by merger).  Any Purchaser may assign any or all of its rights
under this Agreement to any Person to whom such Purchaser assigns or
transfers any Securities, provided that such transferee agrees in writing to
be bound, with respect to the transferred Securities, by the provisions of
the Transaction Documents that apply to the "Purchasers."

      5.7   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 4.9.

      5.8   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 NEW YORK, 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

                                  19


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 THE CITY OF NEW YORK.  EACH PARTY HEREBY IRREVOCABLY
SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING
IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN 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.  IF EITHER PARTY
SHALL COMMENCE AN ACTION OR PROCEEDING TO ENFORCE ANY PROVISIONS OF THE
TRANSACTION DOCUMENTS, THEN, IN ADDITION TO THE OBLIGATIONS OF THE COMPANY
UNDER SECTION 4.6, 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.

      5.9   Survival.  The representations and warranties contained herein
shall survive the Closing and the delivery of the Securities.

      5.10   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.

      5.11   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.

                                  20


      5.12   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.

      5.13   Remedies.  (a)  In addition to being entitled to exercise all
rights provided herein or granted by law, including recovery of damages, each
of the Purchasers 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 agree 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.

      (b)   If the Company defaults in complying with the covenants set out
in Section 4.2 hereof and the Company fails to remedy such default within 30
days after notice by Purchasers specifying the nature of the default, the
Company shall, at its cost and in the manner described in the Registration
Rights Agreement, as promptly as practicable file with the Commission and
thereafter cause to be declared effective (unless it becomes effective
automatically upon filing) on or prior to the 90th day after the expiration of
such 30 day cure period, a registration statement on an appropriate form
under the Securities Act relating to the offer and sale of the Underlying
Shares; provided, that if the Commission comments on such registration
statement, then the Company shall cause such registration statement to be
declared effective on or prior to the 120th day after the expiration of such
30 day cure period.

      5.14   Independent Nature of Purchasers' Obligations and Rights.  The
obligations of each Purchaser under any Transaction Document are several and
not joint with the obligations of any other Purchaser, and no Purchaser shall
be responsible in any way for the performance or non-performance of the
obligations of any other Purchaser under any Transaction Document.  Nothing
contained herein or in any other Transaction Document, and no action taken by
any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers
as a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Purchasers are in any way acting in
concert or as a group with respect to such obligations or the transactions
contemplated by the Transaction Documents.  Each Purchaser shall be entitled
to independently protect and enforce its rights, including, without
limitation, the rights arising out of this Agreement or out of the other
Transaction Documents, and it shall not be necessary for any other Purchaser
to be joined as an additional party in any proceeding for such purpose.  The
Company has elected to provide all Purchasers with the same terms and
Transaction Documents for the convenience of the Company and not because it
was required or requested to do so by any of the Purchasers.

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

      5.16   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. In addition, each and every reference to share prices
and shares of Common Stock in any Transaction Document shall be 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.

                                   21


      5.17   WAIVER OF JURY TRIAL.  IN ANY ACTION, SUIT, OR PROCEEDING IN ANY
JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH
KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE
LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES
FOREVER TRIAL BY JURY.

(Signature Pages Follow)


                                   22



COMSTOCK MINING, INC.                           Address for Notice:
                                                P.O. Box 1118
                                                1200 American Flat Road
                                                Virginia City, NV 89440
By: /s/ Corrado De Gasperis                     Fax: 775-847-4762
    --------------------------------------
    Name: Corrado De Gasperis
    Title: President & Chief Executive Officer


With a copy to (which shall not constitute notice)

  M. Ridgway Barker, Esq.
  Kelley Drye & Warren LLP
  400 Atlantic Street
  Stamford, CT 06901
  Telephone: 203-327-2669


                 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                    SIGNATURE PAGE FOR PURCHASER FOLLOWS]

                                   23


       [PURCHASER SIGNATURE PAGES TO 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 Purchaser: The InterGroup Corporation
                   ---------------------------

Signature of Authorized Signatory of Purchaser: /s/ John V. Winfield
                                                ------------------------

Name of Authorized Signatory: John V. Winfield
                              -------------------------

Title of Authorized Signatory: Chairman & President
                               ----------------------------------

Email Address of Authorized Signatory: jwinfield@intgla.com
                                       --------------------------

Facsimile Number of Authorized Signatory: 310-889-2525
                                          -----------------------

Address for Notice of Purchaser:

10940 Wilshire Blvd., Suite 2150
- -------------------------------------

Los Angeles, CA 90024
- -------------------------------------


Address for Delivery of Securities for Purchaser (if not same as address for
notice):

Address for Notice of Purchaser:

10940 Wilshire Blvd., Suite 2150
- -------------------------------------

Los Angeles, CA 90024
- -------------------------------------

EIN Number: [PROVIDE THIS UNDER SEPARATE COVER]


                       [SIGNATURE PAGES CONTINUE]

                                   24

                           [EXHIBITS OMITTED]

EX-10

                                                                 Exhibit 10.2

                          COMSTOCK MINING INC.

                 CERTIFICATE OF DESIGNATION OF PREFERENCES,
                        RIGHTS AND LIMITATIONS
                                  OF
                 7 1/2% SERIES A-1 CONVERTIBLE PREFERRED STOCK

                      PURSUANT TO SECTION 78.1955 OF THE
                           NEVADA REVISED STATUTES


The undersigned, Corrado De Gasperis, does hereby certify that:

      1.   He is the President and Chief Executive Officer of Comstock Mining
Inc., a Nevada corporation (the "Corporation").

      2.   The Corporation is authorized to issue up to 50,000,000 shares of
its preferred stock, none of which have been issued.

      3.   The following resolutions were duly adopted by the board of
directors of the Corporation (the "Board of Directors"):

WHEREAS, the certificate of incorporation of the Corporation provides for a
class of its authorized stock known as the "Preferred Stock," consisting of up
to 50,000,000 shares, $0.000666 par value per share, issuable from time to time
in one or more series;

WHEREAS, the Board of Directors is authorized to fix the dividend rights,
dividend rate, voting rights, conversion rights, rights and terms of redemption
and liquidation preferences of any wholly unissued series of the Preferred
Stock and the number of shares constituting any series and the designation
thereof, of any of them; and

WHEREAS, it is the desire of the Board of Directors, pursuant to its authority
as aforesaid, to fix the rights, preferences, restrictions and other matters
relating to a series of the Preferred Stock, which shall consist of up to
1,500,000 shares of the Preferred Stock which the Corporation has the authority
to issue, to be designated as "7 1/2% Series A-1 Convertible Preferred Stock,"
as follows:

NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby provide
for the issuance of a series of Preferred Stock for cash or exchange of other
securities, rights or property and does hereby fix and determine the rights,
preferences, restrictions and other matters relating to such series of
Preferred Stock as follows:

TERMS OF 7 1/2% SERIES A-1 CONVERTIBLE PREFERRED STOCK

      Section 1.   Definitions. For the purposes hereof, the following terms
shall have the following meanings:

      "Additional Dividend" shall have the meaning set forth in Section 3(b).

      "Additional Shares of Common Stock" shall have the meaning set forth in
Section 7(b).

                                   1


      "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 405 of the
Securities Act.

      "Aggregate Consideration" received by the Corporation with respect to any
issuance of Additional Shares of Common Stock shall: (a) to the extent it
consists of cash, be computed at the gross amount of cash received by the
Corporation before deduction of any underwriting or similar commissions,
compensation or concessions paid or allowed by the Corporation in connection
with such issuance and without deduction of any expenses payable by the
Corporation, (b) to the extent it consists of property other than cash, be
computed at the fair value of that property as determined in good faith by the
Board of Directors, and (c) with respect to Common Stock Equivalents, the
purchase price or other consideration received by the Corporation in connection
with the issuance of such Common Stock Equivalents, together with the amount of
any exercise price or other additional consideration payable to the Corporation
in connection with the exercise or conversion (as applicable) of such Common
Stock Equivalents.

      "Alternate Consideration" shall have the meaning set forth in Section
7(d).

      "Automatic Conversion Date" shall have the meaning set forth in Section
6(b).

       "Bankruptcy Proceeding" means (i)(a) a voluntary case, action,
proceeding or petition or (b) the consent to the institution of, or failure to
contest in a timely and appropriate manner, any involuntary case, action,
proceeding or petition seeking the liquidation, reorganization or other relief
in respect of the Corporation, or of a substantial part of its assets, under
any Federal or state bankruptcy, insolvency, receivership or similar law now or
hereafter in effect or (ii) the application or consent to the appointment of a
receiver, interim receiver, receiver manager, trustee, custodian, sequestrator,
conservator or similar official for the Corporation or for a substantial part
of its assets and, in any such case, such case, action, proceeding or petition
shall continue undismissed for 60 days or an order or decree approving or
ordering any of the foregoing shall be entered.

      "Base Conversion Price" shall have the meaning set forth in Section 7(b)

      "Business Day" means any day except any Saturday, any Sunday, any day
which is 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.

      "Change of Control Transaction" means the occurrence after the date
hereof of any of (a) an acquisition after the date hereof by any Person or
"group" (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act)
of effective control (whether through legal or beneficial ownership of capital
stock of the Corporation, by contract or otherwise) of a majority of the voting
securities of the Corporation (other than by means of conversion or exercise of
Series A-1 Preferred Stock and the Parity Securities or upon conversion of any
currently outstanding convertible securities in accordance with the terms
thereof as in effect on the date hereof), (b) the Corporation merges into or
consolidates with any other Person, or any Person merges into or consolidates
with the Corporation and, after giving effect to such transaction, the
stockholders of the Corporation as of immediately prior to such transaction do
not own a majority of the aggregate voting power of the Corporation or the
successor entity of such transaction, (c) the Corporation sells or transfers
all or substantially all of its assets to another Person and the stockholders
of the Corporation as of immediately prior to such transaction do not own a
majority of the aggregate voting power of the acquiring entity immediately
after the transaction, (d) the Corporation, directly or indirectly, transfers a
majority of the asset value and/or enterprise value of the Corporation
(whichever is lower) to another Person and the stockholders of the Corporation

                                   2


as of immediately prior to such transaction do not own a majority of the
aggregate voting power of the acquiring entity immediately after the
transaction, or (e) a replacement at one time or within a one year period of
more than one-half of the members of the Board of Directors which is not
approved by a majority of those individuals who are members of the Board of
Directors on the Closing Date (or by those individuals who are serving as
members of the Board of Directors on any date whose nomination to the Board of
Directors was approved by a majority of the members of the Board of Directors
who are members on the Closing Date), in each case that has been approved by
the stockholders of the Corporation as required under: (i) the Nevada corporate
law, (ii) the Corporation's certificate of incorporation, (iii) this
Certificate of Designation or (iv) any other agreement to which the Corporation
is a party, as applicable.

      "Closing" means the closing of the purchase and sale of the Securities
pursuant to Section 2.1 of the Purchase Agreement.

      "Closing Date" means the date on which the Closing occurs pursuant to
Section 2.1 of the Purchase Agreement.

      "Common Stock" means the Corporation's common stock, par value $0.000666
per share, and stock of any other class of securities into which such common
stock may hereafter be reclassified or changed.

      "Common Stock Equivalents" means any securities of the Corporation 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.

      "Confidential Information" means any non-public information regarding the
Corporation or the Subsidiaries (whether in oral or written form), including,
but not limited to, business plans and business prospects, financial
information, sales, sales categories, operating methods, inventory, gross
margin, profit, expense or other data, reports, surveys or similar information.

      "Conversion Date" means an Elective Conversion Date or the Automatic
Conversion Date, as applicable.

      "Conversion Price" shall have the meaning set forth in Section 6(c).

      "Conversion Shares" means, collectively, the shares of Common Stock
issuable upon conversion of the shares of Series A-1 Preferred Stock in
accordance with the terms hereof.

      "Conversion Shares Registration Statement" means a registration statement
that registers the resale of all Conversion Shares, so long as such Conversion
Shares are Registrable Securities (as such term is defined in the Registration
Rights Agreement) of the Holders, who shall be named as "selling stockholders"
therein, and meets the requirements of the Registration Rights Agreement.

      "Dilutive Issuance" shall have the meaning set forth in Section 7(b).

      "Dilutive Issuance Notice" shall have the meaning set forth in Section
7(b).

      "Dividend Payment Date" shall have the meaning set forth in Section 3(a).

      "Effective Date" has the meaning set forth in the Purchase Agreement.

                                   3


      "Elective Conversion Date" shall have the meaning set forth in Section
6(a).

      "Equity Conditions" means, as of the date in question: (a) the
Corporation shall have duly honored all conversions of Series A-1 Preferred
Stock occurring pursuant to one or more Notices of Elective Conversion provided
by the applicable Holder to the Corporation, if any; (b) the Corporation shall
have paid all amounts owing to the applicable Holder under this Certificate of
Designation in respect of its Series A-1 Preferred Stock, if any; (c) the
Common Stock is trading on a Trading Market (and the Corporation believes, in
good faith, that trading of the Common Stock on a Trading Market will continue
uninterrupted for the foreseeable future); (d) there is a sufficient number of
authorized, but unissued and otherwise unreserved, shares of Common Stock for
the issuance of all of the Conversion Shares; (e) there has been no public
announcement of a pending or proposed Fundamental Transaction or Change of
Control Transaction that has not been consummated; (f) the applicable Holder is
not in possession of any information provided by the Corporation that
constitutes, or may constitute, material non-public information; and (g) a
Bankruptcy Proceeding shall not be pending against the Corporation.

      "Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.

      "Exempt Issuance" shall have the meaning set forth in the Purchase
Agreement.

      "Fundamental Transaction" shall have the meaning set forth in Section
7(d).

      "GAAP" means United States generally accepted accounting principles.

      "Holder" shall have the meaning given such term in Section 3(a).

      "Indebtedness" means (a) any liabilities for borrowed money or amounts
owed in excess of $50,000 (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 Corporation'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 $50,000
due under leases required to be capitalized in accordance with GAAP.

      "Junior Securities" means the Common Stock and all other Common Stock
Equivalents of the Corporation other than those securities that are explicitly
senior or pari passu to the Series A-1 Preferred Stock in dividend rights or
liquidation preference.

      "Liens" means a lien, charge, security interest, encumbrance, right of
first refusal, preemptive right or other restriction.

      "Liquidation" shall have the meaning set forth in Section 5.

      "New York Courts" shall have the meaning set forth in Section 11(d).

      "Notice of Automatic Conversion" shall have the meaning set forth in
Section 6(b).

      "Notice of Elective Conversion" shall have the meaning set forth in
Section 6(a).

      "Originally Issued" means that number of shares of the Series A-1
Preferred Stock issued on the date of the first issuance of such shares,

                                   4


regardless of the number of transfers of any particular shares of Series A-1
Preferred Stock thereafter and regardless of the number of certificates which
may be issued to evidence such Series A-1 Preferred Stock.

      "Parity Securities" means the Series A-1 Preferred Stock, the Series A-2
Preferred Stock and all other capital stock of the Corporation, whether now or
hereafter authorized, that is explicitly stated to be pari passu with the
Series A-1 Preferred Stock and the Series A-2 Preferred Stock in dividend
rights or liquidation preference.

      "Participation Maximum" shall have the meaning set forth in Section 9(a).

      "Permitted Indebtedness" means, with respect to the Corporation, any: (a)
indebtedness and other obligations arising in the ordinary course of operations
or business such as those in respect of business expense reimbursements,
workers' compensation claims, bid or performance bonds, reclamation or appeal
bonds, surety bonds or letters of credit, leases or deferred purchase price of
equipment, trade credit, endorsement of checks, and completion guarantees, (b)
indebtedness under a revolving credit facility from banks or similar financial
institutions in a principal amount of up to $5,000,000, (c) indebtedness
incurred to finance the acquisition, construction or improvement of any newly
acquired business, property or asset so long as recourse with respect to such
indebtedness is limited solely to such newly acquired business, property or
asset; and (d) indebtedness existing as of immediately after the Closing that
is set forth on the Disclosure Schedule to the Purchase Agreement.

      "Permitted Lien" means Liens incurred in connection with Permitted
Idebtedness.

      "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.

      "Pre-Notice" shall have the meaning set forth in Section 9(b).

      "Pro Rata Portion" shall have the meaning set forth in Section 9(e).

      "Purchase Agreement" means Securities Purchase Agreement, dated on or
about the Closing Date, among the Corporation and the original Holders, as
amended, modified or supplemented from time to time in accordance with its
terms.

      "Registration Rights Agreement" means the Registration Rights Agreement,
dated as of the date of the Purchase Agreement, among the Corporation and the
original Holders, in the form of Exhibit B attached to the Purchase Agreement,
as amended, modified or supplemented from time to time in accordance with its
terms.

      "Securities" has the meaning set forth in the Purchase Agreement.

      "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.

      "Series A-1 Preferred Stock" shall have the meaning set forth in Section
2.

      "Series A-2 Preferred Stock" means the Series A-2 Convertible Preferred
Stock of the Corporation, with the rights, preferences and privileges set forth
in the Certificate of Designation of Preferences, Rights and Limitations of
7 1/2% Series A-2 Convertible Preferred Stock, filed contemporaneously herewith
in the Office of the Secretary of State of the State of Nevada.

                                   5


      "Stated Value" shall have the meaning set forth in Section 2.

      "Subsequent Financing" shall have the meaning set forth in Section 9(a).

      "Subsequent Financing Notice" shall have the meaning set forth in Section
9(b).

      "Subsidiary" shall have the meaning set forth in the Purchase Agreement.

      "Successor Entity" shall have the meaning set forth in Section 7(d).

      "Trading Day" means a day on which the principal Trading Market is open
for business.

      "Trading Market" means any of the following markets or exchanges on which
the Common Stock is listed or quoted for trading on the date in question: the
American Stock Exchange, the Toronto Stock Exchange, the Nasdaq Capital Market,
the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock
Exchange or the OTC Bulletin Board (or any successors to any of the foregoing).

      "Transaction Documents" has the meaning set forth in the Purchase
Agreement.

      "VWAP" means, for any date, the price determined by the first of the
following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the daily volume weighted average price of the
Common Stock for such date (or the nearest preceding date) on the Trading
Market on which the Common Stock is then listed or quoted as reported by
Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to
4:02 p.m. (New York City time)), (b) if the OTC Bulletin Board is not a Trading
Market, the volume weighted average price of the Common Stock for such date (or
the nearest preceding date) on the OTC Bulletin Board, (c) if the Common Stock
is not then listed or quoted for trading on the OTC Bulletin Board and if
prices for the Common Stock are then reported in the "Pink Sheets" published by
Pink OTC Markets, 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) in all other cases, the fair market value of a
share of Common Stock as determined by an independent appraiser selected in
good faith by the Holders of a majority in interest of the Securities then
outstanding and reasonably acceptable to the Corporation, the fees and expenses
of which shall be paid by the Corporation.

      "Winfield Group" means John V. Winfield, his heirs, personal
representatives and family trusts created and controlled by Mr. Winfield, any
individual retirement accounts held by Mr. Winfield, Santa Fe Financial
Corporation, Portsmouth Square, Inc., and InterGroup Corporation, and any
Affiliates of Mr. Winfield; provided, that the Winfield Group shall also
include all transferees and assigns of the Winfield Group at any time that a
default has occurred under Section 4.2 of the Purchase Agreement and such
default has not been cured pursuant to Section 5.13(b) of the Purchase
Agreement.

      Section 2.   Designation, Amount and Par Value. The series of Preferred
Stock designated by this Certificate of Designation shall be the Corporation's
7 1/2% Series A-1 Convertible Preferred Stock (the "Series A-1 Preferred Stock")
and the authorized number of shares so designated shall be up to 1,500,000.
Each share of Series A-1 Preferred Stock shall have a par value of $0.000666
per share and a stated value equal to $1,000 (the "Stated Value").

                                   6


      Section 3.   Dividends.

      a)   Dividends in Cash or in Kind. Subject to Section 3(f) below, Holders
of Series A-1 Preferred Stock (each, a "Holder" and collectively, the
"Holders") shall be entitled to receive, and the Corporation shall pay,
cumulative dividends at the rate per share (as a percentage of the Stated Value
per share) of 7 1/2% per annum, payable semiannually on January 1 and July 1,
commencing on January 1, 2011 and on each Conversion Date (with respect only to
Series A-1 Preferred Stock being converted) (each such date, a "Dividend
Payment Date") (if any Dividend Payment Date is not a Trading Day, the
applicable payment shall be due on the next succeeding Trading Day), as set
forth below in this Section 3(a).  The form of dividend payments to each Holder
shall be, at the election of the Corporation: (i) if funds are legally
available for the payment of dividends, in cash, (ii) subject to the
satisfaction of the Equity Conditions, in shares of Common Stock, which shall
be valued solely for such purpose at the average of the VWAPs for the 5
consecutive Trading Days ending on the Trading Day that is immediately prior to
the applicable Dividend Payment Date, (iii) subject to the satisfaction of the
Equity Conditions, in additional shares (including, without limitation,
fractional shares) of Series A-1 Preferred Stock, in an amount equal to the
dollar amount of such dividend payment divided by the Stated Value per share,
or (iv) subject to the satisfaction of the Equity Conditions, in any
combination of the property described in the foregoing clauses (i), (ii), and
(iii).  The Holders shall have the same rights and remedies with respect to the
delivery of any such shares as if such shares were being issued upon conversion
of Series A-1 Preferred Stock pursuant to Section 6.

      b)   Dividends Upon an Automatic Conversion of Series A-2 Preferred
Stock. In the event of the automatic conversion of Series A-2 Preferred Stock
into shares of Common Stock pursuant to Sections 6(b) or Section 6(c) of the
Series A-2 Certificate of Designation (as defined in the Purchase Agreement),
in each case prior to August 31, 2013, the Corporation shall also pay to the
Holders of Series A-1 Preferred Stock an additional dividend, for each share of
Series A-1 Preferred Stock, equal to: (i) the net present value, as of the COC
Automatic Conversion Date (as defined in the Series A-2 Certificate of
Designation) or VWAP Automatic Conversion Date (as defined in the Series A-2
Certificate of Designation), as the case may be, of such Series A-2 Preferred
Stock, of a payment equal to 22 1/2% of the Stated Value of one (1) share of
Series A-1 Preferred Stock occurring on August 31, 2013 (calculated assuming a
discount rate of 7 1/2%) minus (ii) the aggregate amount of any semi-annual
dividends paid on one (1) share of Series A-1 Preferred Stock before the COC
Automatic Conversion Date or VWAP Automatic Conversion Date, as the case may be
(the "Additional Dividend");  provided, however, that in the event the Holders
of Series A-1 Preferred Stock receive an Additional Dividend payment, then
dividends to be paid pursuant to Section 3(a) hereof shall not resume to be
paid until January 1st  of the calendar year next following the Additional
Dividend payment.

      c)   Corporation's Payment of Dividends in Cash or in Additional Shares
of Stock.  The Corporation shall promptly notify the Holders at any time the
Corporation shall become unable to legally pay semi-annual dividends in cash.
The Corporation shall provide the Holders with at least 20 Trading Days' notice
of its election to pay a semi-annual dividend in shares of Common Stock or
additional shares of Series A-1 Preferred Stock (the Corporation may indicate,
in any such notice, that the election contained in such notice shall continue
for later periods until revised by a subsequent notice).

      d)   Dividend Calculations.  Dividends on the Series A-1 Preferred Stock
shall be calculated on the basis of a 360-day year, consisting of twelve 30
calendar day periods, and shall accrue daily commencing on the Closing Date,
and shall be deemed to accrue from such date whether or not earned or declared
and whether or not there are profits, surplus or other funds of the Corporation
legally available for the payment of dividends.  Payment of dividends in shares
of Common Stock or additional shares of Series A-1 Preferred Stock (as
applicable) shall be made in a manner consistent with Section 6(d)(i) herein
and, solely for purposes of the payment of dividends in shares, the Dividend
Payment Date shall be deemed to be the Conversion Date.  Dividends shall cease
to accrue with respect to any Series A-1 Preferred Stock when converted.

                                   7


Except as otherwise provided herein, if at any time the Corporation pays
dividends partially in cash and partially in shares of Common Stock and/or
Series A-1 Preferred Stock, then such payment shall be distributed ratably
among the Holders based upon the number of shares of Series A-1 Preferred Stock
held by each Holder on such Dividend Payment Date.

      e)   Other Securities. So long as any Series A-1 Preferred Stock shall
remain outstanding: (i) neither the Corporation nor any Subsidiary thereof
shall redeem, purchase or otherwise acquire directly or indirectly any Junior
Securities; and (ii) the Corporation and any Subsidiaries thereof shall only
redeem, repurchase or otherwise acquire, directly or indirectly, any Parity
Securities ratably with the Series A-1 Preferred Stock on a pari passu basis.
So long as any Series A-1 Preferred Stock shall remain outstanding: (i) neither
the Corporation nor any Subsidiary thereof shall directly or indirectly pay or
declare any dividend or make any distribution upon any Junior Securities (other
than a dividend or distribution solely in additional shares of Junior
Securities), in each case as long as any dividends due on the Series A-1
Preferred Stock remain unpaid, nor shall any monies be set aside for or applied
to the purchase or redemption (through a sinking fund or otherwise) of any
Junior Securities; and (ii) the Corporation and any Subsidiaries thereof shall
only, directly or indirectly, pay or declare any dividend or make any
distribution upon any Parity Securities, or set aside or apply any monies for
the purchase or redemption (through a sinking fund or otherwise) of any Parity
Securities, if it simultaneously, on a pari passu basis and ratably among the
holders of the Series A-1 Preferred Stock and the holders of all Parity
Securities, pays or declares a dividend or distribution, or sets aside or
applies monies for the purchase or redemption (through a sinking fund or
otherwise), of the Series A-1 Preferred Stock.

      f)   Payment of Dividends in Kind.  During the period commencing on the
Closing Date and ending on the eighteen (18) month anniversary of the Closing
Date, in the event on any Dividend Payment Date the Registration Statement (as
defined in the Registration Rights Agreement) has not been declared effective
in accordance with Section 2(b) of the Registration Rights Agreement, any
dividend payable in Common Stock or Series A-1 Preferred Stock shall accrue and
be payable to the Holders of the Series A-1 Preferred Stock within five (5)
business days following the date that such Registration Statement is declared
effective.  In the event on any Dividend Payment Date following the eighteen
(18) month anniversary of the Closing Date, the Registration Statement has not
been declared effective or the Corporation has failed to maintain its
effectiveness during the Effectiveness Period (as defined in the Registration
Rights Agreement), all dividends payable to the Holders of the Series A-1
Preferred Stock shall be payable, if funds are legally available for payment,
in cash only. If such funds are not legally available for payment, any dividend
payable shall accrue and be immediately payable to the Holders of the Series A-
1 Preferred Stock in cash, when such funds become legally available, or, at the
option of the Corporation, subject to the effectiveness on such date of the
Registration Statement, as otherwise provided for herein; provided however,
that if such funds are not legally available and the Registration Statement is
not effective, the Holders of the Series A-1 Preferred Stock can waive the
requirement that the Registration Statement be effective and elect to received
dividend payments as otherwise provided for herein.

      Section 4.   Voting Rights.

      a)   Except as otherwise provided herein or as otherwise required by law,
each Holder of Series A-1 Preferred Stock shall: (i) be entitled to notice of
any annual or special meeting of the stockholders of the Corporation, at the
same time and in the same manner as of the holders of Common Stock in
accordance with the by-laws of the Corporation; and (ii) vote together with the
Common Stock at any annual or special meeting of the stockholders of the
Corporation, or in any action by written consent of stockholders of the
Corporation in lieu of meeting, on an as-converted to Common Stock basis, with
each share of Series A-1 Preferred Stock entitling its Holder to the number of
votes equal to five (5) times the number of shares of Common Stock into which

                                   8


such share of Series A-1 Preferred Stock could be converted under this
Certificate of Designation as of the close of business on the record date fixed
for such meeting or the effective date of such written consent; provided,
however, that any share of Series A-1 Preferred Stock held by any Person other
than a member of the Winfield Group shall instead only entitle its holder to
the number of votes equal to the number of shares of Common Stock into which
such share of Series A-1 Preferred Stock could be converted under this
Certificate of Designation as of the close of business on the record date fixed
for such meeting or the effective date of such written consent.

      b)   Each share of Series A-1 Preferred Stock shall entitle its holder to
one (1) vote in any matter submitted to vote of the holders of Preferred Stock,
voting as a separate class (as opposed to voting with the holders of Common
Stock as provided in Section 4(a)).

      Section 5.   Liquidation.  Upon any liquidation, dissolution or winding-
up of the Corporation, whether voluntary or involuntary (a "Liquidation"), the
Holders shall be entitled to receive out of the assets, whether capital or
surplus, of the Corporation an amount equal to the greater of: (i) the Stated
Value, plus any accrued and unpaid dividends on the Series A-1 Preferred Stock
or (ii) the amount the Holders would have been entitled to receive as holders
of the number of shares of Common Stock for which the shares of Series A-1
Preferred Stock are convertible immediately prior to such Liquidation, together
with any other fees then due and owing thereon under this Certificate of
Designation, for each share of Series A-1 Preferred Stock, on a pari passu
basis with any distribution or payment upon a Liquidation to the holders of
Parity Securities and before any distribution or payment shall be made to the
holders of any Junior Securities, and if the assets of the Corporation shall be
insufficient to pay in full the respective liquidation preference amounts to
the Holders of Series A-1 Preferred Stock and the holders of any Parity
Securities, then the entire assets of the Corporation shall be ratably
distributed among the Holders of Series A-1 Preferred Stock and the holders of
any Parity Securities, in accordance with the respective amounts that would be
payable on such shares if all amounts payable thereon were paid in full.  A
Fundamental Transaction or Change of Control Transaction shall not be deemed a
Liquidation.  The Corporation shall mail written notice of any such
Liquidation, not less than 45 days prior to the payment date stated therein, to
each Holder.

      Section 6.   Conversion.

      a)   Conversions at Option of Holder.  Each share of Series A-1 Preferred
Stock shall be convertible, at any time and from time to time from and after
the Closing Date at the option of the Holder thereof, into that number of
shares of Common Stock determined by dividing the Stated Value of such share of
Series A-1 Preferred Stock by the Conversion Price then in effect.  Holders
shall effect voluntary conversions pursuant to this Section 6(a) by providing
the Corporation with the form of conversion notice attached hereto as Annex A
(a "Notice of Elective Conversion").  Each Notice of Elective Conversion shall
specify the number of shares of Series A-1 Preferred Stock to be converted, the
number of shares of Series A-1 Preferred Stock owned prior to the conversion at
issue, the number of shares of Series A-1 Preferred Stock owned subsequent to
the conversion at issue and the date on which such conversion is to be
effected, which date may not be prior to the date the applicable Holder
delivers such Notice of Conversion to the Corporation (such date, the "Elective
Conversion Date").  If no Elective Conversion Date is specified in a Notice of
Elective Conversion, the Elective Conversion Date shall be the date that such
Notice of Elective Conversion is delivered hereunder.  The calculations and
entries set forth in the Notice of Elective Conversion shall control in the
absence of manifest or mathematical error.  To effect elective conversions of
shares of Series A-1 Preferred Stock pursuant to this Section 6(a), a Holder
shall not be required to surrender the certificate(s) representing the shares
of Series A-1 Preferred Stock to the Corporation unless all of the shares of

                                   9


Series A-1 Preferred Stock represented thereby are so converted, in which case
such Holder shall deliver the certificate representing such shares of Series A-
1 Preferred Stock promptly following the Elective Conversion Date at issue.
Any certificate representing shares of Series A-1 Preferred Stock that have
been converted in whole or part by such Holder shall be void and should be
destroyed upon receipt of replacement certificate(s) from the Corporation.
Shares of Series A-1 Preferred Stock converted into Common Stock pursuant to
this Section 6(a) shall be canceled and shall not be reissued.

      b)   Automatic Conversion.  All outstanding shares of Series A-1
Preferred Stock shall automatically be converted into shares of Common Stock,
based on the then-effective Conversion Price, effective immediately prior to,
and conditioned upon, consummation of a Change of Control Transaction.   The
Corporation shall provide each Holder with reasonable advance notice (a "Notice
of Automatic Conversion") of the occurrence of an automatic conversion of the
Series A-1 Preferred Stock pursuant to this Section 6(b), which shall specify,
for each Holder, the number of shares of Series A-1 Preferred Stock owned prior
to the automatic conversion at issue, the number of shares of Common Stock
issuable upon conversion of such Series A-1 Preferred Stock and the date on
which such automatic conversion is to be effected, which date may not be prior
to the date the Corporation delivers such Notice of Automatic Conversion to the
Holders (such date, the "Automatic Conversion Date").  The calculations and
entries set forth in the Notice of Automatic Conversion shall control in the
absence of manifest or mathematical error.  Each Holder shall deliver the
certificate(s) representing all of its shares of Series A-1 Preferred Stock to
the Corporation promptly following the Automatic Conversion Date.  Shares of
Series A-1 Preferred Stock converted into Common Stock pursuant to this Section
6(b) shall be canceled and shall not be reissued.

      c)   Conversion Price.  The conversion price for the Series A-1 Preferred
Stock shall initially equal $0.6510, subject to adjustment herein (the
"Conversion Price").

      d)   Mechanics of Conversion

           i.   Delivery of Certificate Upon Conversion. Not later than three
(3) Trading Days after each Conversion Date, the Corporation shall deliver, or
cause to be delivered, to the converting Holder (A) a certificate or
certificates representing the Conversion Shares which, on or after the earlier
of: (1) the one (1) year anniversary of the Closing Date; or (2) the Effective
Date, shall be free of restrictive legends and trading restrictions (other than
those which may then be required by the Purchase Agreement) representing the
number of Conversion Shares being acquired upon the conversion of the Series A-
1 Preferred Stock, and/or (B) a bank check in the amount of accrued and unpaid
dividends (to the extent that the Corporation has elected to pay accrued
dividends in cash).  On or after the earlier of: (1) the one (1) year
anniversary of the Closing Date or (2) the Effective Date, the Corporation
shall use commercially reasonable efforts to deliver any certificate or
certificates required to be delivered by the Corporation under this Section 6
electronically through the Depository Trust Company or another established
clearing corporation performing similar functions.

           ii.   Obligation Absolute.  The Corporation's obligation to issue
and deliver the Conversion Shares upon conversion of Series A-1 Preferred Stock
in accordance with the terms hereof are absolute and unconditional,
irrespective of any action or inaction by a Holder to enforce the same, any
waiver or consent with respect to any other provision hereof, the recovery of
any judgment against any Person or any action to enforce the same, or any
setoff, counterclaim, recoupment, limitation or termination, or any breach or
alleged breach by such Holder or any other Person of any obligation to the
Corporation or any violation or alleged violation of law by such Holder or any
other Person, and irrespective of any other circumstance which might otherwise
limit such obligation of the Corporation to such Holder in connection with the
issuance of such Conversion Shares; provided, however, that such delivery shall
not operate as a waiver by the Corporation of any such action that the
Corporation may have against such Holder or such other Person.  In the event a

                                   10


Holder shall elect to convert any or all of its Series A-1 Preferred Stock, the
Corporation may not refuse conversion based on any claim that such Holder or
any one associated or affiliated with such Holder has been engaged in any
violation of law, agreement or for any other reason, unless an injunction from
a court, on notice to Holder, restraining and/or enjoining conversion of all or
part of the Series A-1 Preferred Stock of such Holder shall have been sought
and obtained.  In the absence of such injunction, the Corporation shall issue
Conversion Shares and, if applicable, cash, upon a properly noticed conversion.
Nothing herein shall limit a Holder's right to pursue actual damages or all
other remedies available to it hereunder, at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief.
The exercise of any such rights shall not prohibit a Holder from seeking to
enforce damages pursuant to any other Section hereof or under applicable law.

           iii.   Liquidated Damages.  If the Corporation fails to deliver to a
Holder such certificate or certificates representing Conversion Shares within
five (5) Trading Days after the Elective Conversion Date provided in a Notice
of Elective Conversion pursuant to Section 6(a), the Corporation shall pay to
such Holder, in cash, as liquidated damages and not as a penalty, for each
share of Series A-1 Preferred Stock elected to be converted, $50 per Trading
Day for each Trading Day after such fifth (5th) Trading Day after the Elective
Conversion Date until such certificates are delivered or such Holder is
reimbursed in accordance with Section 6(d)(iv). Nothing herein shall limit a
Holder's right to pursue actual damages for the Corporation's failure to
deliver Conversion Shares and such Holder shall have the right to pursue all
remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief.  The
exercise of any such rights shall not prohibit a Holder from seeking to enforce
damages pursuant to any other Section hereof or under applicable law.

           iv.   Compensation for Buy-In on Failure to Timely Deliver
Certificates Upon Conversion. If the Corporation fails to deliver to a Holder
the applicable certificate or certificates within five (5) Trading Days after
the Elective Conversion Date, and if after such date such Holder is required by
its brokerage firm to purchase (in an open market transaction or otherwise), or
the Holder's brokerage firm purchases, shares of Common Stock to deliver in
satisfaction of a sale by such Holder of the Conversion Shares which such
Holder was entitled to receive upon the conversion relating to such Notice of
Elective Conversion (a "Buy-In"), then the Corporation shall (A) pay in cash to
such Holder (in addition to any other remedies available to or elected by such
Holder) the amount by which (x) such Holder's total purchase price (including
any brokerage commissions) for the shares of Common Stock so purchased exceeds
(y) the product of (1) the aggregate number of shares of Common Stock that such
Holder was entitled to receive from the conversion at issue multiplied by (2)
the actual sale price at which the sell order giving rise to such purchase
obligation was executed (including any brokerage commissions) and (B) at the
option of such Holder, either reissue (if surrendered) the shares of Series A-1
Preferred Stock equal to the number of shares of Series A-1 Preferred Stock
submitted for conversion or deliver to such Holder the number of shares of
Common Stock that would have been issued if the Corporation had timely complied
with the Notice of Elective Conversion. For example, if a Holder purchases
shares of Common Stock having a total purchase price of $11,000 to cover a Buy-
In with respect to an attempted conversion of shares of Series A-1 Preferred
Stock with respect to which the actual sale price (including any brokerage
commissions) giving rise to such purchase obligation was a total of $10,000
under clause (A) of the immediately preceding sentence, the Corporation shall
be required to pay such Holder $1,000. The Holder shall provide the Corporation
written notice indicating the amounts payable to such Holder in respect of the
Buy-In and, upon request of the Corporation, evidence of the amount of such
loss. Nothing herein shall limit a Holder's right to pursue any other remedies
available to it hereunder, at law or in equity including, without limitation, a
decree of specific performance and/or injunctive relief with respect to the
Corporation's failure to timely deliver certificates representing shares of
Common Stock upon conversion of the shares of Series A-1 Preferred Stock as
required pursuant to the terms hereof.

           v.   Reservation of Shares Issuable Upon Conversion.  The
Corporation covenants that it will, at all times while any Series A-1 Preferred

                                   11


Stock: (A) remains outstanding or (B) is reserved for issuance or otherwise
issuable under any promissory note or agreement to which the Corporation is a
party, reserve and keep available out of its authorized and unissued shares of
Common Stock, for the sole purpose of issuance upon conversion of such Series
A-1 Preferred Stock, free from preemptive rights or any other purchase rights
of Persons other than the Holder (and the other holders of the Series A-1
Preferred Stock), not less than 130% of the aggregate number of shares of the
Common Stock as shall be issuable (taking into account the adjustments and
restrictions of Section 7) upon: (A) the conversion of such Series A-1
Preferred Stock; and (B) payment of dividends on such Series A-1 Preferred
Stock in shares of Common Stock hereunder.  The Corporation covenants that it
will, at all times while any Series A-1 Preferred Stock: (A) remains
outstanding or (B) is reserved for issuance or otherwise issuable under any
promissory note or agreement to which the Corporation is a party, reserve and
keep available out of its authorized and unissued shares of Preferred Stock,
for the sole purpose of issuance upon payment of dividends on such Series A-1
Preferred Stock in additional shares of Series A-1 Preferred Stock as herein
provided, free from preemptive rights or any other purchase rights of Persons
other than the Holder (and the other holders of the Series A-1 Preferred
Stock), not less than 130% of the aggregate number of shares of the Series A-1
Preferred Stock as shall (subject to the terms and conditions set forth in the
Purchase Agreement) be issuable (taking into account the adjustments and
restrictions of Section 7) upon the payment of dividends on such Series A-1
Preferred Stock in additional shares of Series A-1 Preferred Stock hereunder.
The Corporation covenants that all shares of Common Stock and Series A-1
Preferred Stock that shall be so issuable shall, upon issue, be duly
authorized, validly issued, fully paid and nonassessable and, if the Conversion
Shares Registration Statement is then effective under the Securities Act, shall
be, with respect to such Common Stock and the Common Stock issuable upon
conversion of such Series A-1 Preferred Stock, registered for public resale in
accordance with such Conversion Shares Registration Statement (subject to such
Holder's compliance with its obligations under the Registration Rights
Agreement).

           vi.   Fractional Shares.  No fractional shares or scrip representing
fractional shares of Common Stock shall be issued upon the conversion of the
Series A-1 Preferred Stock.   As to any fraction of a share of Common Stock,
which the Holder would otherwise be entitled to receive upon such conversion,
the Corporation shall at its election, either pay a cash adjustment in respect
of such final fraction in an amount equal to such fraction multiplied by the
Conversion Price or round up to the next whole share.  The Corporation may
issue fractional shares of Series A-1 Preferred Stock.

           vii.   Transfer Taxes.  The issuance of certificates for shares of
the Common Stock upon conversion of the Series A-1 Preferred Stock shall be
made without charge to any Holder for any documentary stamp or similar taxes
that may be payable in respect of the issue or delivery of such certificates,
provided that the Corporation shall not be required to pay any tax that may be
payable in respect of any transfer involved in the issuance and delivery of any
such certificate upon conversion in a name other than that of the Holders of
such shares of Series A-1 Preferred Stock and the Corporation shall not be
required to issue or deliver such certificates unless or until the Person or
Persons requesting the issuance thereof shall have paid to the Corporation the
amount of such tax or shall have established to the satisfaction of the
Corporation that such tax has been paid.

      Section 7.   Certain Adjustments.

      a)   Stock Dividends and Stock Splits.  If the Corporation, at any time
while any Series A-1 Preferred Stock is outstanding: (i) pays a stock dividend
or otherwise makes a distribution or distributions payable in shares of Common
Stock on shares of Common Stock or any Common Stock Equivalents (which, for
avoidance of doubt, shall not include any shares of Common Stock issued by the
Corporation upon conversion of, or payment of a dividend on, the Series A-1
Preferred Stock), (ii) subdivides outstanding shares of Common Stock into a
larger number of shares, (iii) combines (including by way of a reverse stock

                                   12


split) outstanding shares of Common Stock into a smaller number of shares, or
(iv) issues, in the event of a reclassification of shares of the Common Stock,
any shares of capital stock of the Corporation, then the Conversion Price shall
be multiplied by a fraction of which the numerator shall be the number of
shares of Common Stock (excluding any treasury shares of the Corporation)
outstanding immediately before such event, and of which the denominator shall
be the number of shares of Common Stock outstanding immediately after such
event.  Any adjustment made pursuant to this Section 7(a) shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision,
combination or re-classification.

      b)   Subsequent Equity Sales.  If, at any time while any Series A-1
Preferred Stock is outstanding, the Corporation or any Subsidiary, as
applicable, sells or grants any option to purchase or sells or grants any right
to reprice, or otherwise disposes of or issues (or announces any sale, grant or
any option to purchase or reprice or other disposition), any Common Stock or
Common Stock Equivalents ("Additional Shares of Common Stock") at an effective
price per share of Common Stock that is lower than the lower of: (i) 93% of the
average of the VWAPs for the 10 consecutive Trading Days ending on the Trading
Day that is immediately prior to the date of issuance of the Additional Shares
of Common Stock; or (ii) the then effective Conversion Price (such lower price,
the "Base Conversion Price" and such issuances, collectively, a "Dilutive
Issuance") (if the holder of the Additional Shares of Common Stock so issued
shall at any time, whether by operation of purchase price adjustments, reset
provisions, floating conversion, exercise or exchange  prices or otherwise, or
due to warrants, options or rights per share which are issued in connection
with such issuance, be entitled to receive shares of Common Stock or Common
Stock Equivalents at an effective price per share that is lower than the
Conversion Price, such issuance shall be deemed to have occurred for less than
the Conversion Price on the date of the Dilutive Issuance), then the Conversion
Price shall be reduced to equal the price determined by multiplying the
Conversion Price in effect immediately prior to such issuance by a fraction:

           i.   the numerator of which shall be: (A) the number of shares of
Common Stock issuable upon the conversion of the Series A-1 Preferred Stock
immediately prior to such Dilutive Issuance, plus (B) the number of shares of
Common Stock or Common Stock Equivalents which the Aggregate Consideration
received or deemed to be received by the Corporation for the total number of
Additional Shares of Common Stock so issued would purchase at such then-
existing Base Conversion Price; and

           ii.   the denominator of which shall be the number of shares of
Common Stock issuable upon the conversion of the Series A-1 Preferred Stock
immediately prior to such Dilutive Issuance plus the total number of Additional
Shares of Common Stock actually so issued.

Such adjustment shall be made upon any issuance of Additional Shares of Common
Stock; provided, however, that no adjustment will be made under this Section
7(b) in respect of an Exempt Issuance.  The Corporation shall notify the
Holders in writing, no later than the Trading Day following the issuance of any
Additional Shares of Common Stock subject to this Section 7(b), indicating
therein the applicable issuance price, or applicable reset price, exchange
price, conversion price and other pricing terms (such notice, the "Dilutive
Issuance Notice").  For purposes of clarification, whether or not the
Corporation provides a Dilutive Issuance Notice pursuant to this Section 7(b),
upon the occurrence of any Dilutive Issuance, the Holders are entitled to
receive a number of Conversion Shares based upon the Base Conversion Price on
or after the date of such Dilutive Issuance, regardless of whether a Holder
accurately refers to the Base Conversion Price in the Notice of Conversion.

      c)   Pro Rata Distributions.  If the Corporation, at any time while any
Series A-1 Preferred Stock is outstanding, distributes to all holders of Common
Stock (and not to the Holders) evidences of its indebtedness or assets

                                   13


(including cash and cash dividends) or rights or warrants to subscribe for or
purchase any security (other than the Common Stock, which shall be subject to
Section 7(b)), then in each such case the Conversion Price shall be adjusted by
multiplying such Conversion Price in effect immediately prior to the record
date fixed for determination of stockholders entitled to receive such
distribution by a fraction of which the denominator shall be the VWAP
determined as of the record date mentioned above, and of which the numerator
shall be such VWAP on such record date less the then fair market value at such
record date of the portion of such assets or evidence of indebtedness or rights
or warrants so distributed applicable to one outstanding share of Common Stock
as determined by the Board of Directors of the Corporation in good faith.  In
either case the adjustments shall be described in a statement delivered to the
Holders describing the portion of assets or evidences of indebtedness so
distributed or such subscription rights applicable to one share of Common
Stock.  Such adjustment shall be made whenever any such distribution is made
and shall become effective immediately after the record date mentioned above.

      d)   Fundamental Transaction.  If, at any time while any Series A-1
Preferred Stock is outstanding, (i) the Corporation, directly or indirectly, in
one or more related transactions effects any merger or consolidation of the
Corporation with or into another Person, (ii) the Corporation, directly or
indirectly, effects any sale, lease, license, assignment, transfer, conveyance
or other disposition of all or substantially all of its assets in one or a
series of related transactions, (iii) any, direct or indirect, purchase offer,
tender offer or exchange offer (whether by the Corporation or another Person)
is completed pursuant to which holders of Common Stock are permitted to sell,
tender or exchange their shares for other securities, cash or property and has
been accepted by the holders of 50% or more of the outstanding Common Stock,
(iv) the Corporation, directly or indirectly, in one or more related
transactions effects any reclassification, reorganization or recapitalization
of the Common Stock or any compulsory share exchange pursuant to which the
Common Stock is effectively converted into or exchanged for other securities,
cash or property, (v) the Corporation, directly or indirectly, in one or more
related transactions consummates a stock or share purchase agreement or other
business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with another Person
whereby such other Person acquires more than 50% of the outstanding shares of
Common Stock (not including any shares of Common Stock held by the other Person
or other Persons making or party to, or associated or affiliated with the other
Persons making or party to, such stock or share purchase agreement or other
business combination), in each case other than a Change of Control Transaction
(each, a "Fundamental Transaction"), then, upon any subsequent conversion of
Series A-1 Preferred Stock, the Holder shall have the right to receive, for
each Conversion Share that would have been issuable upon such conversion
immediately prior to the occurrence of such Fundamental Transaction, the number
of shares of Common Stock of the successor or acquiring corporation or of the
Corporation, if it is the surviving corporation, and any additional
consideration (the "Alternate Consideration") receivable as a result of such
Fundamental Transaction by a holder of the number of shares of Common Stock for
which Series A-1 Preferred Stock is convertible immediately prior to such
Fundamental Transaction.  For purposes of any such conversion, the
determination of the Conversion Price shall be appropriately adjusted to apply
to such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental
Transaction, and the Corporation shall apportion the Conversion Price among the
Alternate Consideration in a reasonable manner reflecting the relative value of
any different components of the Alternate Consideration.  If holders of Common
Stock are given any choice as to the securities, cash or property to be
received in a Fundamental Transaction, then the Holder shall be given the same
choice as to the Alternate Consideration it receives upon any conversion of
Series A-1 Preferred Stock following such Fundamental Transaction.  To the
extent necessary to effectuate the foregoing provisions, any successor to the
Corporation or surviving entity in such Fundamental Transaction shall file a
new Certificate of Designation with the same terms and conditions as those
hereof, and issue to the Holders new Series A-1 Preferred Stock consistent with
the foregoing provisions and evidencing the Holders' right to convert such
Series A-1 Preferred Stock into Alternate Consideration.  The Corporation shall
cause any successor entity in a Fundamental Transaction in which the

                                   14


Corporation is not the survivor (the "Successor Entity") to assume in writing
all of the obligations of the Corporation under this Certificate of Designation
and the other Transaction Documents in accordance with the provisions of this
Section 7(d), pursuant to written agreements in form and substance reasonably
satisfactory to the Holders of a majority (with such majority to include the
Winfield Group as long as the Winfield Group continues to hold Series A-1
Preferred Stock) of the then outstanding shares of Series A-1 Preferred Stock
issued pursuant to the Purchase Agreement and approved by such Holders (without
unreasonable delay) prior to such Fundamental Transaction, and shall deliver to
each Holder in exchange for its Series A-1 Preferred Stock a security of the
Successor Entity evidenced by a written instrument substantially similar in
form and substance to the Series A-1 Preferred Stock which is convertible for a
corresponding number of shares of capital stock of such Successor Entity (or
its parent entity) equivalent to the shares of Common Stock acquirable and
receivable upon conversion of the Series A-1 Preferred Stock prior to such
Fundamental Transaction, and with a conversion price which applies the
conversion price hereunder to such shares of capital stock (but taking into
account the relative value of the shares of Common Stock pursuant to such
Fundamental Transaction and the value of such shares of capital stock, such
number of shares of capital stock and such conversion price being for the
purpose of protecting the economic value of the Series A-1 Preferred Stock
immediately prior to the consummation of such Fundamental Transaction), and
which is reasonably satisfactory in form and substance to the Holders of a
majority (with such majority to include the Winfield Group as long as the
Winfield Group continues to hold Series A-1 Preferred Stock) of the then
outstanding shares of Series A-1 Preferred Stock issued pursuant to the
Purchase Agreement.  Upon the occurrence of any such Fundamental Transaction,
the Successor Entity shall succeed to, and be substituted for (so that from and
after the date of such Fundamental Transaction, the provisions of this
Certificate of Designation and the other Transaction Documents referring to the
"Corporation" shall refer instead to the Successor Entity), and may exercise
every right and power of the Corporation and shall assume all of the
obligations of the Corporation under this Certificate of Designation and the
other Transaction Documents with the same effect as if such Successor Entity
had been named as the Corporation herein.

      e)   Calculations.  All calculations under this Section 7 shall be made
to the nearest cent or the nearest 1/100th of a share, as the case may be.  For
purposes of this Section 7, the number of shares of Common Stock deemed to be
issued and outstanding as of a given date shall be the sum of the number of
shares of Common Stock (excluding any treasury shares of the Corporation)
issued and outstanding.

      f)   Notice to the Holders.

           i.   Adjustment to Conversion Price.  Whenever the Conversion Price
is adjusted pursuant to any provision of this Section 7, the Corporation shall
promptly deliver to each Holder a notice setting forth the Conversion Price
after such adjustment and setting forth a brief statement of the facts
requiring such adjustment.

           ii.   Notice to Allow Conversion by Holder.  If (A) the Corporation
shall declare a dividend (or any other distribution in whatever form) on the
Common Stock, (B) the Corporation shall declare a special nonrecurring cash
dividend on or a redemption of the Common Stock, (C) the Corporation shall
authorize the granting to all holders of the Common Stock of rights or warrants
to subscribe for or purchase any shares of capital stock of any class or of any
rights, (D) the approval of any stockholders of the Corporation shall be
required in connection with any reclassification of the Common Stock, any
consolidation or merger to which the Corporation is a party, any sale or
transfer of all or substantially all of the assets of the Corporation, or any
compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property or (E) the Corporation shall authorize the
voluntary or involuntary dissolution, liquidation or winding up of the affairs
of the Corporation, then, in each case, the Corporation shall cause to be filed
at each office or agency maintained for the purpose of conversion of the Series
A-1 Preferred Stock, and shall cause to be delivered to each Holder at its last

                                   15


address as it shall appear upon the stock books of the Corporation, at least
twenty (20) calendar days prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution, redemption, rights or
warrants, or if a record is not to be taken, the date as of which the holders
of the Common Stock of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date on which
such reclassification, consolidation, merger, sale, transfer or share exchange
is expected to become effective or close, and the date as of which it is
expected that holders of the Common Stock of record shall be entitled to
exchange their shares of the Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer or share exchange, provided that the failure to deliver such notice or
any defect therein or in the delivery thereof shall not affect the validity of
the corporate action required to be specified in such notice.  To the extent
that any notice provided hereunder constitutes, or contains, material, non-
public information regarding the Corporation or any of the Subsidiaries, the
Corporation shall, as required by applicable federal securities law, file such
notice with the Commission pursuant to a Current Report on Form 8-K.  The
Holder shall remain entitled to convert the Series A-1 Preferred Stock during
the 20-day period commencing on the date of such notice through the effective
date of the event triggering such notice, except as may otherwise be expressly
set forth herein.

      Section 8.   Negative Covenants.

      a)  As long as at least 25% of the Parity Securities that were Originally
Issued are still outstanding, the Corporation shall not, and shall not permit
any of the Subsidiaries to, directly or indirectly, without the affirmative
vote of the holders of a majority of the then outstanding Parity Securities
(which shall, as long as the Winfield Group still holds at least 25% of the
Parity Securities that were Originally Issued, include the Winfield Group):

           i)   other than Permitted Indebtedness, enter into, create, incur,
assume, guarantee or suffer to exist any Indebtedness for borrowed money;

           ii)   other than Permitted Liens, grant, assume or allow to exist
any Liens of any kind, on or with respect to any of its property or assets now
owned or hereafter acquired or any interest therein or any income or profits
therefrom;

           iii)   repay, repurchase or offer to repay, repurchase or otherwise
acquire Common Stock constituting more than 5% of the outstanding shares of
Common Stock (measured as of immediately after the Closing), other than as to
(i) the Conversion Shares as permitted or required under this Certificate of
Designation or any other Transaction Documents and (ii) repurchases of Common
Stock or Common Stock Equivalents of departing officers and directors of the
Corporation, provided that such repurchases shall not exceed an aggregate of
$100,000 for all officers and directors for so long as the Parity Securities
are outstanding;

           iv)   enter into any transaction with any Affiliate of the
Corporation which would be required to be disclosed in any public filing with
the Commission, unless such transaction is made on an arm's-length basis and
expressly approved by a majority of the disinterested directors of the
Corporation (even if less than a quorum otherwise required for board approval);

           v)    enter into any transaction with any Affiliate of an Officer or
Director of the Corporation, if such transaction provides for the payment of
services in Securities of the Corporation;

                                   16


           vi)   amend the Corporation's certificate of incorporation, by-laws
or the Certificate of Designation of any of the Parity Securities in any manner
that materially adversely affects any of the rights, preferences or privileges
of the Holders of such Parity Securities;

           vii)   approve the issuance of any Preferred Stock, other than the
Series A-1 Preferred Stock and the Series A-2 Preferred Stock issued in
connection with the transactions contemplated under the Transaction Documents;

           viii)   pay any dividends or make any distributions on any Junior
Securities (except in additional shares of Junior Securities);

           ix)   adopt an executive equity incentive plan which provides for
the issuance of greater than 6.0% of the fully diluted equity of the
Corporation after taking into account the transactions contemplated under the
Transaction Documents;

           x)   enter into any transaction for the sale or pledge of a material
asset of the Corporation;

           xi)   approve or consent to the initiation of a Bankruptcy
Proceeding;

           xii)   issue any securities of the Corporation in exchange for
services to a consultant; or

           xiii)   enter into any agreement with respect to any of the
foregoing.

      b)  As long as at least 25% of the Parity Securities that were Originally
Issued are still outstanding, and as long as the Winfield Group still holds at
least 25% of the Parity Securities that were Originally Issued, the Corporation
shall not, and shall not permit any of the Subsidiaries to, directly or
indirectly, without the affirmative vote of the Winfield Group:
           i)   enter into any transaction for the acquisition of any business,
property or asset pursuant to which the Corporation will incur Indebtedness to
finance such acquisition in principal amount in excess of $500,000;

           ii)   pay any dividends pursuant to Section 3(a) hereof in cash in
an amount to exceed $500,000;

           iii)   engage in a private placement of any Common Stock or Common
Stock Equivalents of the Corporation;

           iv)   enter into any transaction that would constitute a Change of
Control Transaction;

           vii)   enter into any transaction that would constitute a
Fundamental Transaction; or

           viii)   engage in a registered offering of any Common Stock or
Common Stock Equivalents of the Corporation.

      c)   If the Corporation defaults in complying with the covenants set out
in subsection (a) or (b) above, the Corporation shall have thirty (30) days
following notice by the holders of the Parity Securities and/or the Winfield
Group, respectively, specifying the nature of the such default, to remedy such
default by (i) taking all necessary corporate action to void the action that is

                                   17

the subject of such default; (ii) obtaining the requisite approval of the
holders of the Parity Securities and/or the Winfield Group, respectively, for
such action consistent with the provisions of this Section 8; or (iii)
obtaining a waiver of such default from the holders of the Parity Securities
and/or the Winfield Group, respectively.

      Section 9.   Preemptive Rights.

      a)   From the date hereof until such time as all Holders no longer hold
any shares of  Series A-1 Preferred Stock, upon any issuance by the Corporation
or any of its Subsidiaries of Common Stock, Common Stock Equivalents for cash
consideration, or a combination of units hereof (a "Subsequent Financing"),
each Holder, collectively with all holders of Parity Securities, shall have the
right to participate in up to an amount of the Subsequent Financing equal to
100% of the Subsequent Financing (the "Participation Maximum") on the same
terms, conditions and price provided for in the Subsequent Financing.

      b)   At least five (5) Trading Days prior to the closing of the
Subsequent Financing, the Corporation shall deliver to each Holder a written
notice of its intention to effect a Subsequent Financing ("Pre-Notice"), which
Pre-Notice shall ask such Holder if it wants to review the details of such
financing (such additional notice, a "Subsequent Financing Notice").  Upon the
request of a Holder, and only upon a request by such Holder, for a Subsequent
Financing Notice, the Corporation shall promptly, but no later than one (1)
Trading Day after such request, deliver a Subsequent Financing Notice to such
Holder.  The Subsequent Financing Notice shall describe in reasonable detail
the proposed terms of such Subsequent Financing, the amount of proceeds
intended to be raised thereunder and the Person or Persons through or with whom
such Subsequent Financing is proposed to be effected and shall include a term
sheet or similar document relating thereto as an attachment.

      c)   Any Holder desiring to participate in such Subsequent Financing must
provide written notice to the Corporation by not later than 5:30 p.m. (New York
City time) on the fourth (4th) Trading Day after all of the Holders have
received the Pre-Notice that the Holder is willing to participate in the
Subsequent Financing, the amount of the Holder's participation, and
representing and warranting that the Holder has such funds ready, willing, and
available for investment on the terms set forth in the Subsequent Financing
Notice.  If the Corporation receives no such notice from a Holder as of such
fourth (4th) Trading Day, such Holder shall be deemed to have notified the
Corporation that it does not elect to participate.

      d)   If by 5:30 p.m. (New York City time) on the fourth (4th) Trading Day
after all of the Holders have received the Pre-Notice, notifications by the
Holders and holders of Parity Securities of their willingness to participate in
the Subsequent Financing (or to cause their designees to participate) is, in
the aggregate, less than the total amount of the Subsequent Financing, then the
Corporation may effect the remaining portion of such Subsequent Financing on
the terms and with the Persons set forth in the Subsequent Financing Notice.

      e)   If by 5:30 p.m. (New York City time) on the fourth (4th) Trading Day
after all of the Holders have received the Pre-Notice, the Corporation receives
responses to a Subsequent Financing Notice from Holders and holders of Parity
Securities seeking to purchase more than the aggregate amount of the
Participation Maximum, each such Holder shall have the right to purchase its
Pro Rata Portion (as defined below) of the Participation Maximum.  "Pro Rata
Portion" of a Holder means the ratio of: (x) the aggregate Stated Value of the
Parity Securities issued to such Holder on the Closing Date; and (y) the
aggregate Stated Value of the Parity Securities issued to all holders of Parity
Securities participating in such Subsequent Financing under this Section 9.

      f)   The Corporation must provide the Holders with a second Subsequent
Financing Notice, and the Holders will again have the right of participation

                                   18


set forth above in this Section 9, if the Subsequent Financing subject to the
initial Subsequent Financing Notice is not consummated for any reason on the
terms set forth in such Subsequent Financing Notice within thirty (30) Trading
Days after the date of the initial Subsequent Financing Notice.

      g)   Notwithstanding the foregoing, this Section 9 shall not apply in
respect of (i) an Exempt Issuance or (ii) an underwritten public offering of
Common Stock.

      Section 10.   Board Nomination Rights.

      a)   Promptly after the occurrence of the Closing Date (as defined in the
Purchase Agreement):

           (i)   the Corporation shall take any and all actions so that John V.
Winfield is elected as a member of the Board; and

           (ii)   upon written request of the Winfield Group, the Corporation
shall, if the Winfield Group holds at least 25% of the Parity Securities
Originally Issued at the time of such request, take or cause to be taken any
and all actions so that the Board Nominee (as defined below) is elected by the
Board as a member of the Board.  If the Board Nominee ceases to be a member of
the Board, and as long as the Winfield Group shall have continuously held at
least 25% of the Parity Securities Originally Issued from the date of the first
election of a Board Nominee through the date of such request, the Winfield
Group shall have the right, by written request of the Winfield Group to the
Corporation, to nominate another Board Nominee to become a member of the Board.

      b)   "Board Nominee" means a designee of the Winfield Group reasonably
acceptable to the Board.

      c)   If John V. Winfield and the Board Nominee shall have been elected as
a member of the Board pursuant to Section 10(a), and as long as the Winfield
Group shall have continuously held at least 25% of the Parity Securities
Originally Issued from the date of such election through the December 31
immediately preceding each meeting of stockholders of the Corporation at which
directors are to be re-elected, then the Corporation shall take or cause to be
taken any and all actions so that John V. Winfield and the Board Nominee are
nominated and recommended for re-election to the Board at each such meeting, in
the same manner and to the same extent that such action is taken in respect of
the other nominees of the Board.  Such right shall terminate immediately at
such time as the Winfield Group ceases for any reason to hold at least 25% of
the Parity Securities Originally Issued.  Upon and at any time following
termination of such right, the Corporation may in its sole discretion cease
taking any and all such actions, the Board may in its sole discretion withdraw
any nomination or recommendation for re-election previously made and John V.
Winfield and the Board Nominee may resign from the Board.

      d)   Actions to be taken as described above include, as necessary,
increasing the size of the Board, nominating for election, recommending for
election, and soliciting proxies (and, if applicable written consents) for
election.

                                   19


      e)   Notwithstanding anything contained herein to the contrary, (i) the
Board Nominee shall not be required to be elected, or nominated or recommended
for re-election, to the Board unless such Board Nominee meets the requirements
for an "independent director" under the listing rules of the principal exchange
or market on which Common Stock is then listed, satisfies the requirements set
forth in the Company's Corporate Governance Guidelines and Nominating and
Governance Committee Charter as reasonably determined by the Nominating and
Governance Committee of the Board, is not prohibited from serving as a director
of the Corporation under Section 8 of the Clayton Antitrust Act or any other
applicable law and is not affiliated or associated with or related to (A) a
material competitor of the Corporation or (B) a customer, supplier or other
supply chain participant of the Corporation where membership of a Board Nominee
on the Board could reasonably be expected, in the reasonable judgment of the
Board, to result in a material burden or disadvantage to the Corporation, and
(ii) the Board Nominee shall resign from the Board upon request by the Board if
(A) the Board Nominee fails at any time to satisfy the criteria set forth in
the preceding sentence, (B) just cause for his removal exists or (C) the
Winfield Group ceases at any time for any reason to hold at least 25% of the
Parity Securities Originally Issued.  Such a request by the Board may be made
at any time after the occurrence of an event described in clause (ii) of the
preceding sentence.  Nothing herein shall excuse the Board Nominee from
tendering his resignation from the Board or restrict the Board from accepting
any such resignation when and as provided in the Company's Corporate Governance
Guidelines.  Notwithstanding the criteria in (e)(i) herein, the Winfield Group
may designate as the Board Nominee a member of the Board existing as of the
Closing Date.

      f)   John V. Winfield and the Board Nominee, for so long as each serves
as a member of the Board and for three (3) years thereafter, shall keep all
Confidential Information of the Corporation confidential and not disclose or
use any of such Confidential Information except in connection with performing
his duties as a member of the Board.  At any time after he ceases to be a
member of the Board for any reason, upon written notice from the Corporation,
John V. Winfield and the Board Nominee shall, at his election, either (i)
promptly destroy at his expense all of such Confidential Information (in any
form other than oral) in his possession (including all copies) and confirm such
destruction to the Corporation in writing or (ii) promptly deliver to the
Company at his expense all of such Confidential Information (in any form other
than oral) in his possession (including all copies).  All of such Confidential
Information in oral form will continue to be subject to this Section 10(f).  If
John V. Winfield or the Board Nominee becomes required by law to disclose any
of such Confidential Information, John V. Winfield or the Board Nominee will,
to the extent permitted by applicable law, as promptly as possible give written
notice to that effect to the Corporation.  The Corporation, in its sole
discretion, shall be entitled to seek a protective order or other appropriate
remedy.  If the Corporation seeks such an order or remedy, John V. Winfield or
the Board Nominee will, upon request, use all reasonable efforts to fully
cooperate with the Corporation at its expense.  Regardless of whether such
protective order or other remedy is obtained, John V. Winfield or the Board
Nominee will furnish only that portion of such Confidential Information that he
is legally required to furnish.  If such a protective order or remedy is not
obtained, John V. Winfield or the Board Nominee will exercise reasonable best
efforts to obtain reliable assurance that confidential treatment will be
accorded such Confidential Information.  If such a protective order or other
remedy is obtained, John V. Winfield or the Board Nominee will exercise
reasonable efforts to obtain reliable assurance that such Confidential
Information is furnished in accordance with and subject to such protective
order or remedy.  To the extent that John V. Winfield or the Board Nominee
furnishes Confidential Information in accordance with this Section 10(f), such
furnishing will not constitute a breach of this Section 10(f).

      g)   John V. Winfield and the Board Nominee, for so long as each serves
as a member of the Board, shall be entitled to the same rights, privileges and
compensation as the other members of the Board in their capacity as such,
including with respect to indemnification, insurance coverage and reimbursement
for meeting participation and related expenses.

                                   20


      h)   John V. Winfield, the Board Nominee and the Winfield Group shall
provide prompt written notice at such time as any event occurs of which they
are aware that would reasonably be expected to terminate the obligation of the
Corporation to nominate or renominate John V. Winfield or the Board Nominee
(including the Board Nominee's failure to meet the qualifications set forth in
Section 10(e)).

      i)   The obligations of the Corporation under this Section 10 shall
terminate upon the consummation of a Change in Control Transaction.

      Section 11.   Miscellaneous.

      a)   Notices.  Any and all notices or other communications or deliveries
to be provided by the Holders hereunder including, without limitation, any
Notice of Conversion, shall be in writing and delivered personally, or sent by
a nationally recognized overnight courier service, addressed to the
Corporation, at P.O. Box 1118, 1200 American Flat Road, Virginia City, NV
89440, Attention: President, or such other address as the Corporation may
specify for such purposes by notice to the Holders delivered in accordance with
this Section 11(a).  Any and all notices or other communications or deliveries
to be provided by the Corporation hereunder shall be in writing and delivered
personally, or sent by a nationally recognized overnight courier service
addressed to each Holder at the address of such Holder appearing on the books
of the Corporation, or if no such address appears on the books of the
Corporation, at the principal place of business of such Holder, as set forth in
the Purchase Agreement.  Any notice or other communication or deliveries
hereunder shall be deemed given and effective on the earliest of (i) the second
Trading Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (ii) upon actual receipt by the party
to whom such notice is required to be given.

      b)   Absolute Obligation. Except as expressly provided herein, no
provision of this Certificate of Designation shall alter or impair the
obligation of the Corporation, which is absolute and unconditional, to pay
accrued dividends on the shares of Series A-1 Preferred Stock at the time,
place, and rate, and in the coin, currency or shares (as applicable), herein
prescribed.

      c)   Lost or Mutilated Series A-1 Preferred Stock Certificate.  If a
Holder's Series A-1 Preferred Stock certificate shall be mutilated, lost,
stolen or destroyed, the Corporation shall execute and deliver, in exchange and
substitution for and upon cancellation of a mutilated certificate, or in lieu
of or in substitution for a lost, stolen or destroyed certificate, a new
certificate for the shares of Series A-1 Preferred Stock so mutilated, lost,
stolen or destroyed, but only upon receipt of evidence of such loss, theft or
destruction of such certificate, and of the ownership hereof reasonably
satisfactory to the Corporation.

      d)   Governing Law.  All questions concerning the construction, validity,
enforcement and interpretation of this Certificate of Designation shall be
governed by and construed and enforced in accordance with the internal laws of
the State of Nevada, without regard to the principles of conflict of laws
thereof.  The Corporation and each Holder agrees that all legal proceedings
concerning the interpretation, enforcement and defense of the transactions
contemplated by any of the Transaction Documents (whether brought against a
party hereto or its respective Affiliates, directors, officers, shareholders,
employees or agents) shall be commenced in the state and federal courts sitting
in the City of New York, Borough of Manhattan (the "New York Courts").  The
Corporation and each Holder hereby irrevocably submits to the exclusive
jurisdiction of the New York Courts for the adjudication of any dispute

                                   21


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 such New York Courts, or such New York Courts are
improper or inconvenient venue for such proceeding.  The Corporation and each
Holder 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 it at the address in effect for notices to it under this
Certificate of Designation 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 applicable law. The Corporation and each Holder hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating
to this Certificate of Designation or the transactions contemplated hereby.  If
the Corporation or any Holder shall commence an action or proceeding to enforce
any provisions of this Certificate of Designation, then the prevailing party in
such action or proceeding shall be reimbursed by the other party for its
attorneys' fees and other costs and expenses incurred in the investigation,
preparation and prosecution of such action or proceeding.

      e)   Waiver.  Any waiver by the Corporation or a Holder of a breach of
any provision of this Certificate of Designation shall not operate as or be
construed to be a waiver of any other breach of such provision or of any breach
of any other provision of this Certificate of Designation or a waiver by any
other Holders.  The failure of the Corporation or a Holder to insist upon
strict adherence to any term of this Certificate of Designation on one or more
occasions shall not be considered a waiver or deprive that party (or any other
Holder) of the right thereafter to insist upon strict adherence to that term or
any other term of this Certificate of Designation on any other occasion.  Any
waiver by the Corporation or a Holder must be in writing.

      f)   Severability.  If any provision of this Certificate of Designation
is invalid, illegal or unenforceable, the balance of this Certificate of
Designation shall remain in effect, and if any provision is inapplicable to any
Person or circumstance, it shall nevertheless remain applicable to all other
Persons and circumstances.  If it shall be found that any interest or other
amount deemed interest due hereunder violates the applicable law governing
usury, the applicable rate of interest due hereunder shall automatically be
lowered to equal the maximum rate of interest permitted under applicable law.

      g)   Next Business Day.  Whenever any payment or other obligation
hereunder shall be due on a day other than a Business Day, such payment shall
be made on the next succeeding Business Day.

      h)   Headings.  The headings contained herein are for convenience only,
do not constitute a part of this Certificate of Designation and shall not be
deemed to limit or affect any of the provisions hereof.

      i)   Status of Converted or Redeemed Series A-1 Preferred Stock.  Shares
of Series A-1 Preferred Stock may only be issued pursuant to the Transaction
Documents.  If any shares of Series A-1 Preferred Stock shall be converted,
redeemed or reacquired by the Corporation, such shares shall resume the status
of authorized but unissued shares of Preferred Stock and shall no longer be
designated as 7 1/2% Series A-1 Convertible Preferred Stock.

                         *********************

                                   22


       IN WITNESS WHEREOF, the undersigned has executed this Certificate this
20th day of October 2010.


/s/ Corrado De Gasperis
- -------------------------------------
Name:  Corrado De Gasperis
Title: Presiedent and Chief
Executive Officer

                                   23


                               ANNEX A

                      NOTICE OF ELECTIVE CONVERSION

(TO BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT SHARES OF 7 71/2%
SERIES A-1 CONVERTIBLE PREFERRED STOCK)

The undersigned hereby elects to convert the number of shares of 71/2% Series
A-1 Convertible Preferred Stock indicated below into shares of common stock, par
value $0.000666 per share (the "Common Stock"), of Comstock Mining Inc., a
Nevada corporation (the "Corporation"), according to the conditions hereof, as
of the date written below.  If shares of Common Stock are to be issued in the
name of a Person other than the undersigned, the undersigned will pay all
transfer taxes payable with respect thereto and is delivering herewith such
certificates and opinions as may be required by the Corporation in accordance
with the Purchase Agreement.  No fee will be charged to the Holders for any
conversion, except for any such transfer taxes.

Conversion calculations:

Date to Effect Conversion: ____________________________________________

Number of shares of Series A-1 Preferred Stock owned prior to Conversion:
____________

Number of shares of Series A-1 Preferred Stock to be Converted: _______________

Stated Value of shares of Series A-1 Preferred Stock to be Converted:
_______________________

Number of shares of Common Stock to be Issued: ______________________________

Applicable Conversion Price:_______________________________________________

Number of shares of Series A-1 Preferred Stock subsequent to Conversion:
___________________

Address for Delivery: _________________________________________________________

or

DWAC Instructions:
Broker no: _______________
Account no: ______________


                                        [HOLDER]


                                        By: ___________________________________
                                            Name:
                                            Title:

EX-10

                                                                  Exhibit 10.3

                    REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this "Agreement") is made and entered
into as of August 31, 2010, between Comstock Mining Inc., a Nevada
corporation (the "Company"), and each of the Persons who are signatories
hereto (each such purchaser, a "Purchaser" and, collectively, the
"Purchasers").

      This Agreement is made pursuant to the Purchase Agreement (as defined
herein).

      The Company and each Purchaser hereby agrees as follows:

1.    Definitions.  Capitalized terms used and not otherwise defined herein
that are defined in the Purchase Agreement shall have the meanings given such
terms in the Purchase Agreement.  As used in this Agreement, the following
terms shall have the following meanings:

      "Advice" shall have the meaning set forth in Section 6(c).

      "Additional Dividends" shall have the meaning set forth in Section
6(a).

      "Commission" means the U.S. Securities and Exchange Commission.

      "Effectiveness Period" shall have the meaning set forth in Section
2(b).

      "FINRA" means the Financial Industry Regulatory Authority.

      "Holder" or "Holders" means the holder or holders, as the case may be,
from time to time of Registrable Securities.

      "Indemnified Party" shall have the meaning set forth in Section 5(c).

      "Indemnifying Party" shall have the meaning set forth in Section 5(c).

      "Losses" shall have the meaning set forth in Section 5(a).

      "Prospectus" means the prospectus included in a Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated by the
Commission pursuant to the Securities Act), as amended or supplemented, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by a Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference
in such Prospectus.

      "Purchase Agreement" means the Securities Purchase Agreement, dated as
of the date hereof, among the Company and the initial Holders party hereto,
as amended, modified or supplemented from time to time in accordance with its
terms.

      "Registration Default" shall have the meaning set forth in Section
6(a).

      "Registrable Securities" means, as of any date of determination, (a)
the Underlying Shares with respect to the Preferred Stock; (b) any securities
issued or then issuable upon any stock split, dividend or other distribution,
recapitalization or similar event with respect to the foregoing; provided,
however, that any such Registrable Securities shall cease to be Registrable
Securities (and the Company shall not be required to maintain the
effectiveness of any, or file another, Registration Statement hereunder with

                                   1


respect thereto) for so long as (i) a Registration Statement with respect to
the sale of such Registrable Securities is declared effective by the
Commission under the Securities Act and such Registrable Securities have been
disposed of by the Holder in accordance with such effective Registration
Statement, (ii) such Registrable Securities have been previously sold in
accordance with Rule 144, or (iii) such securities become eligible for resale
without volume or manner-of-sale restrictions (provided the Company is
current with the public information requirements as determined by the counsel
to the Company as set forth in a written opinion letter to such effect,
addressed, delivered and acceptable to the Transfer Agent and the affected
Holders (assuming that such securities and any securities issuable upon
exercise, conversion or exchange of which, or as a dividend upon which, such
securities were issued or are issuable, were at no time held by any Affiliate
of the Company), as reasonably determined by the Company, upon the advice of
counsel to the Company.

      "Registration Statement" means any registration statement required to
be filed hereunder pursuant to Section 2 (Registration) or Section 6(d)
(Piggyback Registrations), including (in each case) the Prospectus,
amendments and supplements to any such registration statement or Prospectus,
including pre- and post-effective amendments, all exhibits thereto, and all
material incorporated by reference or deemed to be incorporated by reference
in any such registration statement.

      "Rule 144" means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended or interpreted from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.

      "Rule 424" means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended or interpreted from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.

      "Selling Stockholder Questionnaire" shall have the meaning set forth in
Section 3(a).

      "Significant Holder" shall have the meaning set forth in Section 3(a).

      "10-K Filing Date" shall have the meaning set forth in Section 2(a).

2.    Registration.

      (a)   The Company shall, at its own cost, prepare and, not later than
45 days after (or if the 45th day is not a business day, the first business
day thereafter) the date upon which the Company's annual report on Form 10-K
for the fiscal year ending December 31, 2010 is filed with the Commission
(the "10-K Filing Date"), file with the Commission a Registration Statement
covering the resale of the Registrable Securities by each Holder.

      (b)   The Registration Statement filed hereunder shall be on an
appropriate form as determined by the Board of Directors.  Subject to the
terms of this Agreement, the Company shall cause a Registration Statement
filed hereunder to be declared effective under the Securities Act as promptly
as possible after the filing thereof but in no event later than the one (1)
year anniversary of the Closing Date, and shall use its best efforts to keep
such Registration Statement continuously effective under the Securities Act
until the earlier of: (i) the date on which all Registrable Securities
covered by such Registration Statement may be resold without registration and
without regard to any volume or manner-of-sale limitations by reason of Rule
144, without the requirement for the Company to be in compliance with the
current public information under Rule 144 or any other rule of similar
effect; (ii) the date on which all Registrable Securities covered by such
Registration Statement have been sold pursuant to a Prospectus or Rule 144 or
any other rule of similar effect; or (iii) as otherwise mutually agreed to
between the parties hereto (the "Effectiveness Period").  The Company shall

                                   2


telephonically request effectiveness of a Registration Statement as of 5:00
p.m. New York City time on a Trading Day.  The Company shall immediately
notify the Holders via facsimile or by e-mail of the effectiveness of such
Registration Statement on the same Trading Day that the Company
telephonically confirms effectiveness with the Commission, which shall be the
date requested for effectiveness of such Registration Statement.  The Company
shall, by 9:30 a.m. New York City time on the Trading Day after the effective
date of such Registration Statement, file a final Prospectus with the
Commission as required by Rule 424.

3.    Registration Procedures.  In connection with the Company's registration
obligations hereunder, the Company shall:

      (a)   Not less than ten (10) Trading Days prior to the filing of such
Registration Statement and not less than three (3) Trading Days prior to the
filing of any related Prospectus or any amendment or supplement thereto
(including any document that would be incorporated or deemed to be
incorporated therein by reference), the Company shall (i) furnish to each
Holder that has Registrable Securities constituting at least 35% of the
aggregate Registrable Securities included in such Registration Statement
(each, "Significant Holder") copies of all such documents proposed to be
filed, which documents (other than those incorporated or deemed to be
incorporated by reference) will be subject to the review of such Significant
Holders, and (ii) cause its officers and directors, counsel and independent
registered public accountants to respond to such inquiries as shall be
necessary, in the reasonable opinion of respective counsel to each
Significant Holder, to conduct a reasonable investigation within the meaning
of the Securities Act.  The Company shall not file a Registration Statement
or any amendments or supplements thereto to which the Significant Holders
shall reasonably object in good faith, provided that, the Company is notified
of such objection in writing no later than five (5) Trading Days after the
Significant Holders have been so furnished copies of a Registration Statement
or one (1) Trading Day after the Significant Holders have been so furnished
copies of any related Prospectus or amendments or supplements thereto.  Each
Holder agrees to furnish to the Company a completed questionnaire in the form
attached to this Agreement as Annex A (a "Selling Stockholder Questionnaire")
promptly after it has been requested by the Company, but in no event less
than five (5) Trading Days prior to the filing date of the Registration
Statement.

      (b)   (i) Prepare and file with the Commission such amendments,
including post-effective amendments, to a Registration Statement and the
Prospectus used in connection therewith as may be necessary to keep a
Registration Statement effective as to the applicable Registrable Securities
for the Effectiveness Period and prepare and file with the Commission such
additional Registration Statements in order to register for resale under the
Securities Act all of the Registrable Securities, (ii) cause the related
Prospectus to be amended or supplemented by any required Prospectus
supplement (subject to the terms of this Agreement), and, as so supplemented
or amended, to be filed pursuant to Rule 424, (iii) respond as promptly as
reasonably possible to any comments received from the Commission with respect
to a Registration Statement or any amendment thereto and provide as promptly
as reasonably possible to the Significant Holders true and complete copies of
all correspondence from and to the Commission relating to a Registration
Statement (provided that, the Company may excise any information contained
therein which would constitute material non-public information as to any
Significant Holder which has not executed a confidentiality agreement with
respect thereto with the Company), and (iv) comply in all material respects
with the applicable provisions of the Securities Act and the Exchange Act
with respect to the disposition of all Registrable Securities covered by a
Registration Statement during the applicable period in accordance (subject to
the terms of this Agreement) with the intended methods of disposition by the
Holders thereof set forth in such Registration Statement as so amended or in
such Prospectus as so supplemented.

      (c)   Provide notice to the Holders whose Registrable Securities are to
be sold (which notice shall, pursuant to clauses (iii) through (vi) hereof,
be accompanied by an instruction to suspend the use of the Prospectus until

                                   3


the requisite changes have been made) as promptly as reasonably possible
(and, in the case of clause (i)(A) below, not less than one (1) Trading Day
prior to such filing) and (if requested by any such Person) confirm such
notice in writing no later than one (1) Trading Day following the day:

            (i)   (A)  with respect to the Significant Holders and all other
Holders whose Registrable Securities are to be sold in such registration,
notice of when a Prospectus or any Prospectus supplement or post-effective
amendment to a Registration Statement is proposed to be filed;

                  (B)  with respect only to the Significant Holders, notice
when the Commission notifies the Company whether there will be a "review" of
such Registration Statement and whenever the Commission comments in writing
on such Registration Statement; and

                  (C)  with respect to the Significant Holders and all other
Holders whose Registrable Securities are to be sold in such registration,
notice of when the Registration Statement or any post-effective amendment
thereto has become effective;

            (ii)   with respect only to the Significant Holders, notice of
any request by the Commission or any other federal or state governmental
authority for amendments or supplements to a Registration Statement or
Prospectus or for additional information;

            (iii)   with respect to the Significant Holders and all other
Holders whose Registrable Securities are to be sold in such registration,
notice of the issuance by the Commission or any other federal or state
governmental authority of any stop order suspending the effectiveness of a
Registration Statement covering any or all of the Registrable Securities or
the initiation of any Proceedings for that purpose;

            (iv)   with respect to the Significant Holders and all other
Holders whose Registrable Securities are to be sold in such registration,
notice of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose;

            (v)   with respect to the Significant Holders and all other
Holders whose Registrable Securities are to be sold in such registration,
notice of the occurrence of any event or passage of time that makes the
financial statements included in a Registration Statement ineligible for
inclusion therein or any statement made in a Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein
by reference untrue in any material respect or that requires any revisions to
a Registration Statement, Prospectus or other documents so that, in the case
of a Registration Statement or the Prospectus, as the case may be, it will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; and

            (vi)   with respect to the Significant Holders and all other
Holders whose Registrable Securities are to be sold in such registration,
notice of the occurrence or existence of any pending corporate development
with respect to the Company that the Company believes may be material and
that, in the determination of the Company, makes it not in the best interest
of the Company to allow continued availability of a Registration Statement or
Prospectus, provided that, any and all of such information shall remain
confidential to each Holder until such information otherwise becomes public,
unless disclosure by a Holder is required by law; provided, further, that

                                   4


notwithstanding each Holder's agreement to keep such information
confidential, each such Holder makes no acknowledgement that any such
information is material, non-public information.

      (d)   Use its best efforts to avoid the issuance of, or, if issued,
obtain the withdrawal of (i) any order stopping or suspending the
effectiveness of a Registration Statement, or (ii) any suspension of the
qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest practicable moment.

      (e)   Furnish to each Holder, without charge, at least one conformed
copy of each such Registration Statement and each amendment thereto,
including financial statements and schedules, all documents incorporated or
deemed to be incorporated therein by reference to the extent requested by
such Person, and all exhibits to the extent requested by such Person
(including those previously furnished or incorporated by reference) promptly
after the filing of such documents with the Commission; provided, that any
such item which is available on the EDGAR system (or successor thereto) need
not be furnished in physical form.

      (f)   Subject to the terms of this Agreement, the Company hereby
consents to the use of such Prospectus and each amendment or supplement
thereto by each of the selling Holders in connection with the offering and
sale of the Registrable Securities covered by such Prospectus and any
amendment or supplement thereto, except after the giving of any notice
pursuant to Section 3(d).

      (g)   The Company shall cooperate with any broker-dealer through which
a Holder proposes to resell its Registrable Securities in effecting a filing
with the FINRA Corporate Financing Department pursuant to FINRA Rule 5110, as
requested by any such Holder, and the Company shall pay the filing fee
required by such filing within two (2) Business Days of request therefor.

      (h)   Prior to any resale of Registrable Securities by a Holder, use
its commercially reasonable efforts to register or qualify or cooperate with
the selling Holders in connection with the registration or qualification (or
exemption from the Registration or qualification) of such Registrable
Securities for the resale by the Holder under the securities or Blue Sky laws
of such jurisdictions within the United States as any Holder reasonably
requests in writing, to keep each registration or qualification (or exemption
therefrom) effective during the Effectiveness Period and to do any and all
other acts or things reasonably necessary to enable the disposition in such
jurisdictions of the Registrable Securities covered by each Registration
Statement; provided, that, the Company shall not be required to qualify
generally to do business in any jurisdiction where it is not then so
qualified, subject the Company to any material tax in any such jurisdiction
where it is not then so subject or file a general consent to service of
process in any such jurisdiction.

      (i)   If requested by a Holder, cooperate with such Holder to
facilitate and coordinate with the Company's transfer agent the timely
preparation and delivery of certificates representing Registrable Securities
to be delivered to a transferee pursuant to a Registration Statement, which
certificates shall be free, to the extent permitted by the Purchase
Agreement, of all restrictive legends, and to enable such Registrable
Securities to be in such denominations and registered in such names as any
such Holder may request.

      (j)   Upon the occurrence of any event contemplated by Section 3(c), as
promptly as reasonably possible under the circumstances taking into account
the Company's good faith assessment of any adverse consequences to the
Company and its stockholders of the premature disclosure of such event,
prepare a supplement or amendment, including a post-effective amendment, to a
Registration Statement or a supplement to the related Prospectus or any
document incorporated or deemed to be incorporated therein by reference, and
file any other required document so that, as thereafter delivered, neither a
Registration Statement nor such Prospectus will contain an untrue statement

                                   5


of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.  If the Company
notifies the Holders in accordance with clauses (iii) through (vi) of Section
3(c) above to suspend the use of any Prospectus until the requisite changes
to such Prospectus have been made, then the Holders shall suspend use of such
Prospectus.  The Company will use its best efforts to ensure that the use of
the Prospectus may be resumed as promptly as is reasonably practicable.  The
Company shall be entitled to exercise its right under this Section 3(j) to
suspend the availability of a Registration Statement and Prospectus for a
period not to exceed 60 calendar days (which need not be consecutive days) in
any 12-month period.

      (k)   Comply with all applicable rules and regulations of the
Commission.

      (l)   The Company may require each selling Holder to furnish to the
Company a certified statement as to the number of shares of Common Stock
beneficially owned by such Holder and, if required by the Commission, the
natural persons thereof that have voting and dispositive control over the
shares.

4.    Registration Expenses.  All fees and expenses incident to the
performance of or compliance with, this Agreement by the Company shall be
borne by the Company whether or not any Registrable Securities are sold
pursuant to a Registration Statement.  The fees and expenses referred to in
the foregoing sentence shall include, without limitation, (i) all
registration and filing fees (including, without limitation, reasonable fees
and expenses of the Company's counsel and independent registered public
accountants) (A) with respect to filings made with the Commission, (B) with
respect to filings required to be made with any Trading Market on which the
Common Stock is then listed for trading, (C) in compliance with applicable
state securities or Blue Sky laws reasonably agreed to by the Company in
writing (including, without limitation, fees and disbursements of counsel for
the Company in connection with Blue Sky qualifications or exemptions of the
Registrable Securities) and (D) with respect to any sales of Registrable
Securities in an underwritten offering any filing fees payable to FINRA
pursuant to FINRA Rule 5110, so long as the broker is receiving no more than
a customary brokerage commission in connection with such sale, (ii) printing
expenses (including, without limitation, expenses of printing certificates
for Registrable Securities), (iii) fees and disbursements of counsel for the
Company, (iv) Securities Act liability insurance, if the Company so desires
such insurance, and (v) fees and expenses of all other Persons retained by
the Company in connection with the consummation of the transactions
contemplated by this Agreement.  In addition, the Company shall be
responsible for all of its internal expenses incurred in connection with the
consummation of the transactions contemplated by this Agreement (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit and
the fees and expenses incurred in connection with the listing of the
Registrable Securities on any securities exchange as required hereunder.  In
no event shall the Company be responsible for any broker or similar
commissions of any Holder or, except to the extent provided for in the
Transaction Documents, any legal fees or other costs of the Holders.

5.    Indemnification.

      (a)   Indemnification by the Company.  The Company shall,
notwithstanding any termination of this Agreement, indemnify and hold
harmless each Holder, the officers, directors, members, partners, agents,
brokers (including brokers who offer and sell Registrable Securities as
principal as a result of a pledge or any failure to perform under a margin
call of Common Stock), investment advisors and employees (and any other
Persons with a functionally equivalent role of a Person holding such titles,
notwithstanding a lack of such title or any other title) of each of them,
each Person who controls any such Holder (within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act) and the officers,
directors, members, stockholders, partners, agents and employees (and any
other Persons with a functionally equivalent role of a Person holding such
titles, notwithstanding a lack of such title or any other title) of each such
controlling Person, to the fullest extent permitted by applicable law, from

                                   6


and against any and all losses, claims, damages, liabilities, costs
(including, without limitation, reasonable attorneys' fees) and expenses
(collectively, "Losses"), as incurred, arising out of or relating to (1) any
untrue or alleged untrue statement of a material fact contained in a
Registration Statement, any Prospectus or any form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, (2) any
omission or alleged omission of a material fact required to be stated therein
or necessary to make the statements therein (in the case of any Prospectus or
supplement thereto, in light of the circumstances under which they were made)
not misleading or (3) any violation or alleged violation by the Company of
the Securities Act, the Exchange Act or any state securities law, or any rule
or regulation thereunder, in connection with the performance of its
obligations under this Agreement, except to the extent, but only to the
extent, that (i) such untrue statements or omissions are based solely upon
information regarding such Holder furnished in writing to the Company by such
Holder expressly for use in a Registration Statement, such Prospectus or in
any amendment or supplement thereto (it being understood that the Holder has
approved Annex A hereto for this purpose) or (ii) in the case of an
occurrence of an event of the type specified in Section 3(c)(iii)-(vi), the
use by such Holder of an outdated, defective or otherwise unavailable
Prospectus after the Company has notified such Holder in writing that the
Prospectus is outdated, defective or otherwise unavailable for use by such
Holder and prior to the receipt by such Holder of the Advice contemplated in
Section 6(c).  The Company shall notify the Holders promptly of the
institution, threat or assertion of any Proceeding arising from or in
connection with the transactions contemplated by this Agreement of which the
Company is aware.

      (b)   Indemnification by Holders.  Each Holder shall, severally and not
jointly, indemnify and hold harmless the Company, its directors, officers,
agents and employees, each Person who controls the Company (within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange
Act), and the directors, officers, agents or employees of such controlling
Persons, to the fullest extent permitted by applicable law, from and against
all Losses, as incurred, to the extent arising out of or relating to: (x)
such Holder's failure to comply with the prospectus delivery requirements of
the Securities Act, (y) any untrue or alleged untrue statement of a material
fact contained in any Registration Statement, any Prospectus, or in any
amendment or supplement thereto or in any preliminary prospectus, or (z) any
omission or alleged omission of a material fact required to be stated therein
or necessary to make the statements therein not misleading (i) to the extent,
but only to the extent, that such untrue statement or omission is contained
in any information so furnished in writing by such Holder to the Company
specifically for inclusion in such Registration Statement or such Prospectus
or (ii) in the case of an occurrence of an event of the type specified in
Section 3(c)(iii)-(vi), the use by such Holder of an outdated, defective or
otherwise unavailable Prospectus after the Company has notified such Holder
in writing that the Prospectus is outdated, defective or otherwise
unavailable for use by such Holder and prior to the receipt by such Holder of
the Advice contemplated in Section 6(c).  A Holder shall notify the Company
promptly of the institution, thread or assertion of any Proceeding arising
from or in connection with the transactions contemplated by this Agreement of
which the Holder is aware.  In no event shall the liability of any selling
Holder under this Section 5(b) be greater in amount than the dollar amount of
the net proceeds received by such Holder upon the sale of the Registrable
Securities giving rise to such indemnification obligation.

      (c)   Conduct of Indemnification Proceedings.  If any Proceeding shall
be brought or asserted against any Person entitled to indemnity hereunder (an
"Indemnified Party"), such Indemnified Party shall promptly notify the Person
from whom indemnity is sought (the "Indemnifying Party") in writing, and the
Indemnifying Party shall have the right to assume the defense thereof,
including the employment of counsel reasonably satisfactory to the
Indemnified Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided, that, the failure of any
Indemnified Party to give such notice shall not relieve the Indemnifying
Party of its obligations or liabilities pursuant to this Agreement, except
(and only) to the extent that it shall be finally determined by a court of
competent jurisdiction (which determination is not subject to appeal or
further review) that such failure shall have prejudiced the Indemnifying
Party.

                                   7


An Indemnified Party shall have the right to employ separate counsel in any
such Proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party or
Parties unless:  (1) the Indemnifying Party has agreed in writing to pay such
fees and expenses, (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding, or (3) the
named parties to any such Proceeding (including any impleaded parties)
include both such Indemnified Party and the Indemnifying Party, and counsel
to the Indemnified Party shall reasonably believe that a material conflict of
interest is likely to exist if the same counsel were to represent such
Indemnified Party and the Indemnifying Party (in which case, if such
Indemnified Party notifies the Indemnifying Party in writing that it elects
to employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense thereof and
the reasonable fees and expenses of no more than one separate counsel shall
be at the expense of the Indemnifying Party).  The Indemnifying Party shall
not be liable for any settlement of any such Proceeding effected without its
written consent, which consent shall not be unreasonably withheld or delayed.
No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending Proceeding in respect
of which any Indemnified Party is a party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such Proceeding.

Subject to the terms of this Agreement, all reasonable fees and expenses of
the Indemnified Party (including reasonable fees and expenses to the extent
incurred in connection with investigating or preparing to defend such
Proceeding in a manner not inconsistent with this Section) shall be paid to
the Indemnified Party, as incurred, within ten (10) Trading Days of written
notice thereof to the Indemnifying Party; provided, that, the Indemnified
Party shall promptly reimburse the Indemnifying Party for that portion of
such fees and expenses applicable to such actions for which such Indemnified
Party is judicially determined not to be entitled to indemnification
hereunder.

      (d)   Contribution.  If the indemnification under Section 5(a) or 5(b)
is unavailable to an Indemnified Party or insufficient to hold an Indemnified
Party harmless for any Losses, then each Indemnifying Party shall contribute
to the amount paid or payable by such Indemnified Party, in such proportion
as is appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions
that resulted in such Losses as well as any other relevant equitable
considerations.  The relative fault of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a material
fact, has been taken or made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission.  The amount paid or payable by a party as a
result of any Losses shall be deemed to include, subject to the limitations
set forth in this Agreement, any reasonable attorneys' or other fees or
expenses incurred by such party in connection with any Proceeding to the
extent such party would have been indemnified for such fees or expenses if
the indemnification provided for in this Section 5 was available to such
party in accordance with its terms.

The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in the immediately preceding
paragraph.  Notwithstanding the provisions of this Section 5(d), no Holder
shall be required to contribute pursuant to this Section 5(d), in the
aggregate, any amount in excess of the amount by which the net proceeds
actually received by such Holder from the sale of the Registrable Securities
subject to the Proceeding exceeds the amount of any damages that such Holder
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.

                                   8


The indemnity and contribution agreements contained in this Section 5 are in
addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.

6.    Miscellaneous.

      (a)   Remedies.   (i) Additional Dividends Under Certain Circumstances.
Additional dividends (the "Additional Dividends") with respect to the
Preferred Stock shall be assessed if the Registration Statement is not
declared effective by the Commission on or prior to the one (1) year
anniversary of the Closing Date as provided in Section 2(b) hereof (such
event, a "Registration Default"). Additional Dividends shall accrue on the
Preferred Stock over and above the dividend rate set forth in the title of
the Securities from and including the date on which such Registration Default
shall occur to but excluding the date on which such Registration Default has
been cured. The rate of the Additional Dividends will be 1.00% per annum for
the first 30-day period (or pro rata portion thereof) immediately following
the occurrence of a Registration Default, and such rate will increase by an
additional 1.00% per annum with respect to each subsequent 30-day period (or
pro rata portion thereof) until such Registration Default has been cured.
Additional Dividends shall be paid on Dividend Payment Dates. Such Additional
Dividends will be in addition to any other dividends payable from time to
time with respect to the Preferred Stock.

            (ii)  In the event of a breach by the Company or by a Holder of
any of their respective obligations under this Agreement, each Holder or the
Company, as the case may be, in addition to being entitled to exercise all
rights granted by law and under this Agreement, including recovery of
damages, shall be entitled to specific performance of its rights under this
Agreement.  Each of the Company and each Holder agrees that monetary damages
would not provide adequate compensation for any losses incurred by reason of
a breach by it of any of the provisions of this Agreement and hereby further
agrees that, in the event of any action for specific performance in respect
of such breach, it shall not assert or shall waive the defense that a remedy
at law would be adequate.

      (b)   Compliance.  Each Holder covenants and agrees that it will comply
with the prospectus delivery requirements of the Securities Act as applicable
to it in connection with sales of Registrable Securities pursuant to a
Registration Statement.

      (c)   Discontinued Disposition.  By its acquisition of Registrable
Securities, each Holder agrees that, upon receipt of a notice from the
Company of the occurrence of any event of the kind described in Section
3(c)(iii) through (vi), such Holder will forthwith discontinue disposition of
such Registrable Securities under a Registration Statement until it is
advised in writing (the "Advice") by the Company that the use of the
applicable Prospectus (as it may have been supplemented or amended) may be
resumed.  The Company will use its best efforts to ensure that the use of the
Prospectus may be resumed as promptly as is practicable.  The Company agrees
and acknowledges that any periods during which the Holder is required to
discontinue the disposition of the Registrable Securities hereunder shall be
subject to the provisions of Section 3(b).

      (d)   Piggy-Back Registrations.  If, at any time during the
Effectiveness Period, there is not an effective Registration Statement
covering all of the Registrable Securities and the Company shall determine to
prepare and file with the Commission a registration statement relating to an
offering for its own account or the account of others under the Securities
Act of any of its equity securities, other than on Form S-4 or Form S-8 (each
as promulgated under the Securities Act) or their then equivalents relating
to equity securities to be issued solely in connection with any acquisition
of any entity or business or equity securities issuable in connection with
the Company's stock option or other employee benefit plans, then the Company
shall deliver to each Holder a written notice of such determination and, if
within fifteen days after the date of the delivery of such notice, any such

                                   9


Holder shall so request in writing, the Company shall include in such
registration statement all or any part of such Registrable Securities such
Holder requests to be registered; provided, however, that the Company shall
not be required to register any Registrable Securities pursuant to this
Section 6(d) that are eligible for resale pursuant to Rule 144 promulgated by
the Commission pursuant to the Securities Act or that are the subject of a
then effective Registration Statement.

      (e)   Amendments and Waivers.  The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions
hereof may not be given, unless the same shall be in writing and signed by
the Company and the Holders of at least 85% of the then outstanding
Registrable Securities (including, for this purpose any Registrable
Securities issuable upon exercise or conversion of any Security issued and
issuable under the Purchase Agreement).  If a Registration Statement does not
register all of the Registrable Securities pursuant to a waiver or amendment
done in compliance with the previous sentence, then the number of Registrable
Securities to be registered for each Holder shall be reduced pro rata among
all Holders and each Holder shall have the right to designate which of its
Registrable Securities shall be omitted from such Registration Statement.
Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereof with respect to a matter that relates exclusively to the
rights of a Holder or some Holders and that does not directly or indirectly
affect the rights of other Holders may be given by such Holder or Holders of
all of the Registrable Securities to which such waiver or consent relates;
provided, however, that the provisions of this sentence may not be amended,
modified, or supplemented except in accordance with the provisions of the
first sentence of this Section 6(e).

      (f)   Notices.  Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be delivered
as set forth in the Purchase Agreement.

      (g)   Successors and Assigns.  This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each
of the parties and shall inure to the benefit of each Holder.  The Company
may not assign (except by merger) its rights or obligations hereunder without
the prior written consent of all of the Holders of the then outstanding
Registrable Securities.  Each Holder may assign their respective rights
hereunder in the manner and to the Persons as permitted under Section 5.6 of
the Purchase Agreement.

      (h)   No Inconsistent Agreements.  Neither the Company nor any of its
Subsidiaries has entered, as of the date hereof, nor shall the Company or any
of its Subsidiaries, on or after the date of this Agreement, enter into any
agreement with respect to its securities, that would have the effect of
impairing the rights granted to the Holders in this Agreement or otherwise
conflicts with the provisions hereof.  Neither the Company nor any of its
Subsidiaries has previously entered into any agreement granting any
registration rights with respect to any of its securities to any Person that
have not been satisfied in full.

      (i)   Execution and Counterparts.  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.

      (j)   Governing Law.  All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be
determined in accordance with the provisions of the Purchase Agreement.

                                   10


      (k)   Cumulative Remedies.  The remedies provided herein are cumulative
and not exclusive of any other remedies provided by law.

      (l)   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.

      (m)   Headings.  The headings in this Agreement are for convenience
only, do not constitute a part of the Agreement and shall not be deemed to
limit or affect any of the provisions hereof.

      (n)   Independent Nature of Holders' Obligations and Rights.  The
obligations of each Holder hereunder are several and not joint with the
obligations of any other Holder hereunder, and no Holder shall be responsible
in any way for the performance of the obligations of any other Holder
hereunder. Nothing contained herein or in any other agreement or document
delivered at any closing, and no action taken by any Holder pursuant hereto
or thereto, shall be deemed to constitute the Holders as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Holders are in any way acting in concert with respect to
such obligations or the transactions contemplated by this Agreement. Each
Holder shall be entitled to protect and enforce its rights, including without
limitation the rights arising out of this Agreement, and it shall not be
necessary for any other Holder to be joined as an additional party in any
proceeding for such purpose.

                           ********************

                                   11


     IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.

                                                 COMSTOCK MINING, INC.


                                               By: /s/ Corrado De Gasperis
                                                   -----------------------
                                                   Name: Corrado De Gasperis
                                                   Title: President and Chief
                                                   Executive Officer

                      [SIGNATURE PAGES OF HOLDERS FOLLOW

                                   12


                      [SIGNATURE PAGES OF HOLDERS TO RRA]

Name of Holder:       The InterGroup Corporation
                      --------------------------

Signature of Authorized Signatory of Holder:  /s/ John V. Winfield
                                              --------------------

Name of Authorized Signatory:   John V. Winfield
                                ----------------

Title of Authorized Signatory:  Chairman & President
                                --------------------

                                   13