Exhibit 10.3





                          SECURITIES PURCHASE AGREEMENT
                          -----------------------------



                            LAURUS MASTER FUND, LTD.



                                       AND



                              TEXAURUS ENERGY, INC.



                             DATED:  MARCH __, 2006








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                                TABLE OF CONTENTS
                                -----------------
                                                                            PAGE
                                                                            ----

1.     Agreement  to  Sell  and  Purchase                                     1
2.     Fees,  Warrant  and  Parent  Warrant                                   1
3.     Closing,  Delivery  and  Payment.                                      2
       3.1    Closing                                                         2
       3.2    Delivery                                                        2
4.     Representations  and  Warranties  of  the  Company                     2
       4.1    Organization,  Good  Standing  and  Qualification               2
       4.2    Subsidiaries                                                    3
       4.3    Capitalization;  Voting  Rights.                                4
       4.4    Authorization;  Binding  Obligations                            4
       4.5    Liabilities                                                     5
       4.6    Agreements;  Action                                             5
       4.7    Obligations  to  Related  Parties                               6
       4.8    Changes                                                         7
       4.9    Title  to  Properties  and  Assets;  Liens,  Etc                8
       4.10   Intellectual  Property.                                         9
       4.11   Compliance  with  Other  Instruments                            9
       4.12   Litigation                                                      10
       4.13   Tax  Returns  and  Payments                                     10
       4.14   Employees                                                       10
       4.15   Voting  Rights                                                  11
       4.16   Compliance  with  Laws;  Permits                                11
       4.17   Environmental  and  Safety  Laws                                11
       4.18   Valid  Offering                                                 12
       4.19   Full  Disclosure                                                12
       4.20   Insurance                                                       12
       4.21   Dilution                                                        12
       4.22   Patriot  Act                                                    12
       4.23   ERISA                                                           13
       4.24   Registration  Rights                                            13
5.     Representations  and  Warranties  of  the  Purchaser                   13
       5.1    Requisite  Power  and  Authority                                14
       5.2    Investment  Representations                                     14
       5.3    The  Purchaser  Bears  Economic  Risk                           14
       5.4    Acquisition  for  Own  Account                                  14
       5.5    The  Purchaser  Can  Protect  Its  Interest                     14
       5.6    Accredited  Investor                                            15
       5.7    Legends.                                                        15

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6.     Covenants  of  the  Company                                            16
       6.1    Reporting  Requirements                                         16
       6.2    Use  of  Funds                                                  17
       6.3    Access  to  Facilities                                          17
       6.4    Taxes                                                           18
       6.5    Insurance                                                       18
       6.6    Intellectual  Property                                          19
       6.7    Properties                                                      19
       6.8    Confidentiality                                                 19
       6.9    Required  Approvals                                             19
       6.10   Opinion                                                         21
       6.11   Margin  Stock                                                   21
       6.12   Financing  Right  of  First  Refusal.                           21
       6.13   Authorization  and  Reservation  of  Shares                     22
       6.14   Operator  Reports                                               22
7.     Covenants  of  the  Purchaser                                          22
       7.1    Confidentiality                                                 22
       7.2    Limitation on Acquisition of Common Stock of the Company        22
8.     Covenants of the Company and the Purchaser Regarding Indemnification.  22
       8.1    Company  Indemnification                                        22
       8.2    Purchaser's  Indemnification                                    23
9.     Miscellaneous.                                                         23
       9.1    Governing  Law,  Jurisdiction  and  Waiver  of  Jury  Trial.    23
       9.2    Severability                                                    24
       9.3    Survival                                                        24
       9.4    Successors                                                      25
       9.5    Entire  Agreement;  Maximum  Interest                           25
       9.6    Amendment  and  Waiver.                                         25
       9.7    Delays  or  Omissions                                           25
       9.8    Notices                                                         25
       9.9    Attorneys'  Fees                                                28
       9.10   Titles  and  Subtitles                                          28
       9.11   Facsimile  Signatures;  Counterparts                            28
       9.12   Broker's  Fees                                                  28
       9.13   Construction                                                    28

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                                LIST OF EXHIBITS
Form  of  Term  Note                                                  Exhibit  A
Form  of  Warrant                                                     Exhibit  B
Form  of  Parent  Warrant                                             Exhibit  C
Form  of  Opinion                                                     Exhibit  D
Form  of  Escrow  Agreement                                           Exhibit  E


                                LIST OF SCHEDULES

Schedule  4.2     Subsidiaries
Schedule  4.3     Capitalization
Schedule  4.6     Agreements
Schedule  4.7     Obligations  to  Related  Parties
Schedule  4.9     Title  to  Properties  and  Assets,  Liens,  Etc.
Schedule  4.12    Litigation
Schedule  4.13    Tax  Returns  and  Payments
Schedule  4.14    Employees
Schedule  4.15    Voting  Rights
Schedule  4.17    Environmental
Schedule  6.9(e)  Indebtedness
Schedule  9.12    Brokers

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                          SECURITIES PURCHASE AGREEMENT

     THIS  SECURITIES  PURCHASE AGREEMENT (this "Agreement") is made and entered
into  as  of  March  __,  2006, by and between TEXAURUS ENERGY, INC., a Delaware
corporation  (the  "Company"),  and  LAURUS  MASTER FUND, LTD., a Cayman Islands
company  (the  "Purchaser").

                                    RECITALS

     WHEREAS,  the Company has authorized the sale to the Purchaser of a Secured
Term  Note  in  the  aggregate  principal  amount  of Eight Million Five Hundred
Thousand  Dollars  ($8,500,000)  in  the  form  of Exhibit A hereto (as amended,
modified  and/or  supplemented  from  time  to  time,  the  "Note");

     WHEREAS, the Company wishes to issue to the Purchaser a warrant in the form
of Exhibit B hereto (as amended, modified and/or supplemented from time to time,
the "Warrant") to purchase up to 961 shares of the Company's common stock, $.001
par  value  per  share  (the  "Common  Stock");

     WHEREAS,  the Purchaser desires to purchase the Note and the Warrant on the
terms  and  conditions  set  forth  herein;  and

     WHEREAS,  the Company desires to issue and sell the Note and the Warrant to
the  Purchaser  on  the  terms  and  conditions  set  forth  herein.

                                    AGREEMENT

     NOW,  THEREFORE,  in consideration of the foregoing recitals and the mutual
promises,  representations,  warranties  and covenants hereinafter set forth and
for  other good and valuable consideration, the receipt and sufficiency of which
are  hereby  acknowledged,  the  parties  hereto  agree  as  follows:

     1.     Agreement  to  Sell  and  Purchase.  Pursuant  to  the  terms  and
            ----------------------------------
conditions  set  forth  in  this  Agreement,  on the Closing Date (as defined in
Section  3),  the  Company  shall sell to the Purchaser, and the Purchaser shall
purchase  from  the Company, the Note.  The sale of the Note on the Closing Date
shall be known as the "Offering."  The Note will mature on the Maturity Date (as
defined  in  the Note).  Collectively, the Note and the Warrant and Common Stock
issuable  upon  exercise  of  the  Warrant  are referred to as the "Securities."

     2.     Fees,Warrant  and  Parent  Warrant.  On  the  Closing  Date:
            ----------------------------------

          (a) The Company will issue and deliver to the Purchaser the Warrant to
     purchase  up  to  961  shares of Common Stock (subject to adjustment as set
     forth  therein)  in  connection  with  the  Offering, pursuant to Section 1
     hereof.  All  the representations, covenants, warranties, undertakings, and
     indemnification,  and other rights made or granted to or for the benefit of

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     the  Purchaser  by  the  Company  are  hereby also made and granted for the
     benefit  of  the  holder  of the Warrant and shares of the Company's Common
     Stock  issuable  upon  exercise  of  the  Warrant  (the  "Warrant Shares").

          (b)  Texhoma  Energy,  Inc., the Company's parent (the "Parent"), will
     issue  and  deliver to the Purchaser a warrant in the form of Exhibit C (as
     amended,  modified  and/or  supplemented  from  time  to  time, the "Parent
     Warrant")  to  purchase  up  to 10,625,000 shares of Parent's common stock,
     $.001  par  value  per  share  (the  "Parent  Common  Stock")  (subject  to
     adjustment  as  set  forth  therein)  (the  "Parent  Warrant  Shares").

          (c)  Subject to the terms of Section 2(e) below, the Company shall pay
     to  Laurus Capital Management, LLC, the manager of the Purchaser, a closing
     payment  in  an  amount  equal to three and one half percent (3.50%) of the
     aggregate  principal  amount  of the Note. The foregoing fee is referred to
     herein  as  the  "Closing  Payment."

          (d)  The  Company  shall  reimburse  the  Purchaser for its reasonable
     expenses  (including  legal  fees and expenses) incurred in connection with
     the  preparation  and  negotiation  of  this  Agreement  and  the  Related
     Agreements  (as  hereinafter  defined), and expenses incurred in connection
     with  the  Purchaser's  due  diligence  review  of  the  Company  and  its
     Subsidiaries  (as  defined in Section 4.2) and all related matters. Amounts
     required  to  be  paid  under this Section 2(d) will be paid on the Closing
     Date.

          (e)  The Closing Payment and the expenses referred to in the preceding
     clause  (d)  (net of deposits previously paid by the Company) shall be paid
     at  closing  out of funds held pursuant to the Escrow Agreement (as defined
     below)  and  a  disbursement  letter  (the  "Disbursement  Letter").

     3.     Closing,  Delivery  and  Payment.
            --------------------------------

          3.1  Closing.  Subject to the terms and conditions herein, the closing
               -------
     of  the  transactions contemplated hereby (the "Closing"), shall take place
     on  the date hereof, at such time or place as the Company and the Purchaser
     may  mutually  agree  (such date is hereinafter referred to as the "Closing
     Date").

          3.2  Delivery. Pursuant to the Escrow Agreement, at the Closing on the
               --------
     Closing  Date,  the  Company  will  deliver  to  the Purchaser, among other
     things,  the  Note  and  the  Warrant and the Purchaser will deliver to the
     Company,  among  other  things,  the  amounts set forth in the Disbursement
     Letter by certified funds or wire transfer. The Company hereby acknowledges
     and  agrees  that  Purchaser's  obligation  to  purchase  the Note from the
     Company  on  the Closing Date shall be contingent upon the satisfaction (or
     waiver  by  the  Purchaser in its sole discretion) of the items and matters
     set forth in the closing checklist provided by the Purchaser to the Company
     on  or  prior  to  the  Closing  Date.

     4.     Representations  andWarrantiesof  the  Company.  The  Company hereby
            ----------------------------------------------
represents  and  warrants  to  the  Purchaser  as  follows:

          4.1 Organization, Good Standing and Qualification. Each of the Parent,
              ---------------------------------------------
     Company  and  each  of  its  Subsidiaries  is a corporation, partnership or
     limited  liability  company,  as  the  case may be, duly organized, validly

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     existing  and  in  good  standing  under  the  laws  of its jurisdiction of
     organization.  Each of the Parent, the Company and each of its Subsidiaries
     has  the  corporate,  limited liability company or partnership, as the case
     may  be,  power  and authority to own and operate its properties and assets
     and,  insofar  as  it  is  or  shall be a party thereto, to (1) execute and
     deliver  (i)  this Agreement, (ii) the Note and the Warrant to be issued in
     connection  with  this Agreement, (iii) the Master Security Agreement dated
     as  of  the date hereof among the Company, the Parent, certain Subsidiaries
     of  the Company and the Purchaser (as amended, modified and/or supplemented
     from  time  to  time,  the  "Master  Security  Agreement"),  (iv)  the  two
     Restricted  Account Agreements dated as of the date hereof among North Fork
     Bank,  a  New  York banking corporation, the Company and the Purchaser, (v)
     the  Mortgage,  Security  Agreement,  Financing Statement and Assignment of
     Production  dated as of the date hereof made by the Company in favor of the
     Purchaser  (as  amended,  modified  and/or supplemented from time to time),
     (vi)  the  Parent  Warrant to purchase the Parent Warrant Shares, (vii) the
     Registration  Rights  Agreement  relating to the Parent Warrant dated as of
     the  date hereof between the Parent and the Purchaser (as amended, modified
     and/or  supplemented  from  time  to  time,  the  "Registration  Rights
     Agreement"),  (viii)  the  Guaranty dated as of the date hereof made by the
     Parent  in favor of the Purchaser (as amended, modified and/or supplemented
     from  time  to  time,  the  "Parent Guaranty"), (ix) the Guaranty Agreement
     dated as of date hereof made by Franciscus Jacobs in favor of the Purchaser
     (as amended, modified and/or supplemented from time to time), (x) the Stock
     Pledge  Agreement  dated  as  of the date hereof between the Parent and the
     Purchaser  (as  amended, modified and/or or supplemented from time to time,
     the  "Stock Pledge Agreement"), (xi) the Funds Escrow Agreement dated as of
     the  date  hereof  among  the  Company,  the Purchaser and the escrow agent
     referred  to  therein,  substantially  in  the form of Exhibit E hereto (as
     amended,  modified  and/or  supplemented  from  time  to  time, the "Escrow
     Agreement")  and  (xii)  all  other  documents,  instruments and agreements
     entered  into  in  connection with the transactions contemplated hereby and
     thereby  (the  preceding  clauses  (ii)  through  (xii),  collectively, the
     "Related  Agreements"); (2) issue and sell the Note; (3) issue and sell the
     Warrant,  the  Parent  Warrant,  the  Warrant Shares and the Parent Warrant
     Shares;  and (4) carry out the provisions of this Agreement and the Related
     Agreements and to carry on its business as presently conducted. Each of the
     Parent,  the  Company and each of its Subsidiaries is duly qualified and is
     authorized to do business and is in good standing as a foreign corporation,
     partnership  or  limited  liability  company,  as  the  case may be, in all
     jurisdictions  in which the nature or location of its activities and of its
     properties  (both  owned  and  leased)  makes such qualification necessary,
     except  for those jurisdictions in which failure to do so has not, or could
     not  reasonably  be  expected  to have, individually or in the aggregate, a
     material  adverse  effect  on  the business, assets, liabilities, condition
     (financial  or  otherwise),  properties,  operations  or  prospects  of the
     Parent, the Company and its Subsidiaries, taken individually and as a whole
     (a  "Material  Adverse  Effect").

          4.2  Subsidiaries.  Each  direct and indirect Subsidiary of the Parent
               ------------
     and  Company,  the  direct  owner  of  such  Subsidiary  and its percentage
     ownership  thereof,  is  set forth on Schedule 4.2. For the purpose of this
     Agreement,  a  "Subsidiary" of any person or entity means (i) a corporation
     or  other  entity whose shares of stock or other ownership interests having
     ordinary voting power (other than stock or other ownership interests having
     such  power  only  by  reason of the happening of a contingency) to elect a
     majority of the directors of such corporation, or other persons or entities

<PAGE>

     performing similar functions for such person or entity, are owned, directly
     or  indirectly,  by  such  person  or entity or (ii) a corporation or other
     entity  in  which  such person or entity owns, directly or indirectly, more
     than  50%  of  the  equity  interests  at  such  time.

          4.3     Capitalization;  Voting  Rights.
                  -------------------------------

          (a)  The  authorized  capital stock of the (i) Company, as of the date
     hereof,  consists  of  1,000,000  shares,  of which 1,000,000 are shares of
     Company  Common Stock, par value $.001 per share, and 1,000 shares of which
     are issued and outstanding and (ii) Parent, as of the date hereof, consists
     of 201,000,000 shares, of which 200,000,000 are shares of Common Stock, par
     value  $.001  per  share,  108,812,224  shares  of  which  are  issued  and
     outstanding  and  1,000,000  are shares of preferred stock, par value $.001
     per share of which no shares of preferred stock are issued and outstanding.
     The  authorized, issued and outstanding capital stock of each Subsidiary of
     the  Company  is  set  forth  on  Schedule  4.3.

          (b)  Except  as  disclosed on Schedule 4.3, other than: (i) the shares
     reserved  for issuance under the Parent's and Company's stock option plans;
     and  (ii)  shares  which  may be granted pursuant to this Agreement and the
     Related  Agreements,  there  are  no  outstanding options, warrants, rights
     (including  conversion  or  preemptive rights and rights of first refusal),
     proxy  or stockholder agreements, or arrangements or agreements of any kind
     for  the  purchase  or acquisition from the Parent and/or Company of any of
     its  securities.  Except  as  disclosed on Schedule 4.3, neither the offer,
     issuance  or sale of any of the Note, the Warrant or the Parent Warrant, or
     the issuance of any of the Warrant Shares or Parent Warrant Shares, nor the
     consummation of any transaction contemplated hereby will result in a change
     in  the  price  or  number  of  any securities of the Parent and/or Company
     outstanding,  under  anti-dilution or other similar provisions contained in
     or  affecting  any  such  securities.

          (c)  All  issued  and outstanding shares of the Parent's and Company's
     Common  Stock:  (i)  have  been  duly authorized and validly issued and are
     fully  paid  and nonassessable; and (ii) were issued in compliance with all
     applicable  state  and  federal laws concerning the issuance of securities.

          (d) The rights, preferences, privileges and restrictions of the shares
     of  the  Common  Stock  and  the  Parent  Common Stock are as stated in the
     Parent's  and  Company's  Certificate  of Incorporation, as applicable (the
     "Charter"). The Warrant Shares and the Parent Warrant Shares have been duly
     and  validly  reserved  for  issuance.  When  issued in compliance with the
     provisions  of  this  Agreement, the Parent's and the Company's Charter, as
     applicable, the Securities and the Parent Warrant and Parent Warrant Shares
     will  be  validly issued, fully paid and nonassessable, and will be free of
     any  liens  or encumbrances; provided, however, that the Securities and the
     Parent  Warrant and Parent Warrant Shares may be subject to restrictions on
     transfer  under state and/or federal securities laws as set forth herein or
     as  otherwise  required  by  such  laws at the time a transfer is proposed.

          4.4  Authorization; Binding Obligations. All corporate, partnership or
               ----------------------------------
     limited  liability  company,  as the case may be, action on the part of the
     Parent,  Company  and  each of its Subsidiaries (including their respective

<PAGE>

     officers  and  directors) necessary for the authorization of this Agreement
     and  the  Related  Agreements,  the  performance  of all obligations of the
     Parent,  Company and its Subsidiaries hereunder and under the other Related
     Agreements  at  the  Closing  and,  the  authorization,  sale, issuance and
     delivery  of the Note, the Warrant and the Parent Warrant has been taken or
     will  be  taken  prior  to  the  Closing.  This  Agreement  and the Related
     Agreements,  when  executed  and  delivered and to the extent it is a party
     thereto,  will  be  valid  and  binding  obligations of each of the Parent,
     Company  and each of its Subsidiaries, enforceable against each such person
     or  entity  in  accordance  with  their  terms,  except:

          (a)  as  limited by applicable bankruptcy, insolvency, reorganization,
     moratorium  or  other  laws of general application affecting enforcement of
     creditors'  rights;  and

          (b)  general  principles  of  equity that restrict the availability of
     equitable  or  legal  remedies.

The  sale of the Note is not and will not be subject to any preemptive rights or
rights  of  first  refusal  that have not been properly waived or complied with.
The  issuance  of the Warrant and the Parent Warrant and the subsequent exercise
of  the  Warrant  for  Warrant  Shares and the Parent Warrant for Parent Warrant
Shares  are  not  and  will not be subject to any preemptive rights or rights of
first  refusal  that  have  not  been  properly  waived  or  complied  with.

          4.5  Liabilities.  Neither the Company nor any of its Subsidiaries has
               ------------
     any liabilities, except current liabilities incurred in the ordinary course
     of  business.

          4.6  Agreements;  Action.  Except  as  set  forth  on  Schedule  4.6:
               -------------------

          (a)  there  are no agreements, understandings, instruments, contracts,
     proposed  transactions,  judgments,  orders,  writs or decrees to which the
     Company or any of its Subsidiaries is a party or by which it is bound which
     may  involve: (i) obligations (contingent or otherwise) of, or payments to,
     the  Company  or  any  of its Subsidiaries in excess of $50,000 (other than
     obligations  of,  or  payments  to,  the Company or any of its Subsidiaries
     arising  from  purchase  or  sale  agreements  entered into in the ordinary
     course  of  business);  or  (ii)  the  transfer  or  license of any patent,
     copyright,  trade  secret or other proprietary right to or from the Company
     or  any  of its Subsidiaries (other than licenses arising from the purchase
     of  "off  the  shelf"  or  other  standard  products);  or (iii) provisions
     restricting  the  development, manufacture or distribution of the Company's
     or any of its Subsidiaries products or services; or (iv) indemnification by
     the  Company  or  any  of its Subsidiaries with respect to infringements of
     proprietary  rights.

          (b)  Neither the Company nor any of its Subsidiaries has: (i) declared
     or  paid any dividends, or authorized or made any distribution upon or with
     respect  to  any  class  or  series of its capital stock; (ii) incurred any
     indebtedness  for  money  borrowed  or  any  other  liabilities (other than
     ordinary  course  obligations) individually in excess of $50,000 or, in the
     case  of indebtedness and/or liabilities individually less than $50,000, in
     excess  of  $100,000  in the aggregate; (iii) made any loans or advances to
     any  person  or  entity not in excess, individually or in the aggregate, of
     $100,000,  other than ordinary course advances for travel expenses; or (iv)
     sold, exchanged or otherwise disposed of any of its assets or rights, other
     than  the  sale  of  its  inventory  in  the  ordinary  course of business.

          (c)  For  the  purposes  of  subsections  (a)  and  (b)  above,  all
     indebtedness,  liabilities,  agreements,  understandings,  instruments,
     contracts  and  proposed  transactions  involving the same person or entity
     (including persons or entities the Company or any Subsidiary of the Company
     has reason to believe are affiliated therewith) shall be aggregated for the
     purpose  of  meeting  the  individual  minimum  dollar  amounts  of  such
     subsections.

          (d) The Company makes and keeps books, records, and accounts, that, in
     reasonable  detail,  accurately  and  fairly  reflect  the transactions and
     dispositions  of  the  Company's  assets.  The  Company  maintains internal
     control  over financial reporting ("Financial Reporting Controls") designed
     by,  or  under  the  supervision  of, the Company's principal executive and
     principal  financial  officers,  and  effected  by  the  Company's board of
     directors, management, and other personnel, to provide reasonable assurance

<PAGE>

     regarding  the  reliability  of  financial reporting and the preparation of
     financial  statements  for  external  purposes in accordance with generally
     accepted  accounting  principles  ("GAAP"),  including  that:

               (i)  transactions  are  executed  in accordance with management's
          general  or  specific  authorization;

               (ii)  unauthorized  acquisition,  use,  or  disposition  of  the
          Company's  assets  that  could have a material effect on the financial
          statements  are  prevented  or  timely  detected;

               (iii)  transactions  are  recorded  as  necessary  to  permit
          preparation  of financial statements in accordance with GAAP, and that
          the  Company's  receipts  and  expenditures  are  being  made  only in
          accordance  with  authorizations of the Company's management and board
          of  directors;

               (iv)  transactions  are  recorded  as  necessary  to  maintain
          accountability  for  assets;  and

               (v)  the  recorded accountability for assets is compared with the
          existing  assets  at  reasonable  intervals, and appropriate action is
          taken  with  respect  to  any  differences.

          4.7  Obligations  to  Related Parties. Except as set forth on Schedule
               --------------------------------
     4.7,  there are no obligations of the Company or any of its Subsidiaries to
     officers, directors, stockholders or employees of the Company or any of its
     Subsidiaries  other  than:

          (a)  for  payment  of  salary  for  services  rendered  and  for bonus
     payments;

          (b)  reimbursement  for  reasonable expenses incurred on behalf of the
     Company  and  its  Subsidiaries;

<PAGE>

          (c)  for  other standard employee benefits made generally available to
     all  employees  (including  stock  option  agreements outstanding under any
     stock  option  plan  approved  by the Board of Directors of the Company and
     each  Subsidiary  of  the  Company,  as  applicable);  and

          (d)  obligations  listed in the Company's and each of its Subsidiary's
     financial  statements.

Except  as  described  above or set forth on Schedule 4.7, none of the officers,
directors  or,  to  the  best  of  the  Company's  knowledge,  key  employees or
stockholders  of  the Company or any of its Subsidiaries or any members of their
immediate  families,  are  indebted  to  the Company or any of its Subsidiaries,
individually  or  in  the  aggregate, in excess of $50,000 or have any direct or
indirect ownership interest in any firm or corporation with which the Company or
any  of  its  Subsidiaries is affiliated or with which the Company or any of its
Subsidiaries  has  a  business  relationship,  or  any firm or corporation which
competes  with  the  Company  or  any  of  its  Subsidiaries, other than passive
investments  in  publicly  traded  companies (representing less than one percent
(1%)  of  such  company)  which  may  compete  with  the  Company  or any of its
Subsidiaries.  Except as described above, no officer, director or stockholder of
the  Company  or  any  of  its  Subsidiaries,  or  any member of their immediate
families,  is,  directly or indirectly, interested in any material contract with
the  Company  or  any  of  its Subsidiaries and no agreements, understandings or
proposed  transactions  are  contemplated  between  the  Company  or  any of its
Subsidiaries  and any such person.  Except as set forth on Schedule 4.7, neither
the  Company  nor  any  of  its Subsidiaries is a guarantor or indemnitor of any
indebtedness  of  any  other  person  or  entity.

          4.8  Changes. Except as disclosed in any Schedule to this Agreement or
               -------
     to  any  of  the  Related  Agreements,  there  has  not  been:

          (a)  any  change  in  the  business,  assets,  liabilities,  condition
     (financial  or  otherwise),  properties,  operations  or  prospects  of the
     Company  or any of its Subsidiaries, which individually or in the aggregate
     has  had,  or  could reasonably be expected to have, individually or in the
     aggregate,  a  Material  Adverse  Effect;

          (b)  any  resignation  or  termination of any officer, key employee or
     group  of  employees  of  the  Company  or  any  of  its  Subsidiaries;

          (c) any material change, except in the ordinary course of business, in
     the contingent obligations of the Company or any of its Subsidiaries by way
     of  guaranty,  endorsement,  indemnity,  warranty  or  otherwise;

          (d)  any  damage,  destruction  or  loss,  whether  or  not covered by
     insurance,  which  has  had,  or  could  reasonably  be  expected  to have,
     individually  or  in  the  aggregate,  a  Material  Adverse  Effect;

          (e) any waiver by the Company or any of its Subsidiaries of a valuable
     right  or  of  a  material  debt  owed  to  it;

<PAGE>

          (f)  any  direct  or  indirect loans made by the Company or any of its
     Subsidiaries  to  any  stockholder,  employee,  officer  or director of the
     Company  or  any  of  its  Subsidiaries,  other  than  advances made in the
     ordinary  course  of  business;

          (g)  any  material change in any compensation arrangement or agreement
     with  any  employee, officer, director or stockholder of the Company or any
     of  its  Subsidiaries;

          (h)  any  declaration or payment of any dividend or other distribution
     of  the  assets  of  the  Company  or  any  of  its  Subsidiaries;

          (i)  any  labor organization activity related to the Company or any of
     its  Subsidiaries;

          (j)  any debt, obligation or liability incurred, assumed or guaranteed
     by  the  Company  or  any  of its Subsidiaries, except those for immaterial
     amounts  and  for  current  liabilities  incurred in the ordinary course of
     business;

          (k)  any  sale,  assignment  or  transfer  of any patents, trademarks,
     copyrights,  trade  secrets or other intangible assets owned by the Company
     or  any  of  its  Subsidiaries;

          (l)  any  change in any material agreement to which the Company or any
     of its Subsidiaries is a party or by which either the Company or any of its
     Subsidiaries  is  bound  which  either individually or in the aggregate has
     had,  or  could  reasonably  be  expected  to  have, individually or in the
     aggregate,  a  Material  Adverse  Effect;

          (m)  any  other  event  or  condition  of  any  character that, either
     individually  or in the aggregate, has had, or could reasonably be expected
     to  have,  individually  or in the aggregate, a Material Adverse Effect; or

          (n)  any  arrangement  or  commitment  by  the  Company  or any of its
     Subsidiaries  to do any of the acts described in subsection (a) through (m)
     above.

          4.9 Title to Properties and Assets; Liens, Etc. Except as set forth on
              ------------------------------------------
     Schedule 4.9, each of the Company and each of its Subsidiaries has good and
     marketable  title  to  its  properties  and  assets,  and good title to its
     leasehold  interests,  in  each  case subject to no mortgage, pledge, lien,
     lease,  encumbrance  or  charge,  other  than:

          (a)  those  resulting from taxes which have not yet become delinquent;

          (b)  minor liens and encumbrances which do not materially detract from
     the  value  of  the  property  subject  thereto  or  materially  impair the
     operations  of  the  Company or any of its Subsidiaries, so long as in each
     such  case, such liens and encumbrances have no effect on the lien priority
     of  the  Purchaser  in  such  property;  and

          (c)  those  that  have  otherwise  arisen  in  the  ordinary course of
     business,  so  long  as  they  have  no  effect on the lien priority of the
     Purchaser therein. All facilities, machinery, equipment, fixtures, vehicles

<PAGE>

     and  other  properties  owned,  leased  or  used  by  the  Company  and its
     Subsidiaries  are in good operating condition and repair and are reasonably
     fit  and  usable  for the purposes for which they are being used. Except as
     set  forth  on  Schedule  4.9,  the  Company  and  its  Subsidiaries are in
     compliance  with all material terms of each lease to which it is a party or
     is  otherwise  bound.

          4.10 Intellectual  Property.
               ----------------------

          (a) Each of the Company and each of its Subsidiaries owns or possesses
     sufficient  legal  rights  to all patents, trademarks, service marks, trade
     names,  copyrights,  trade  secrets,  licenses,  information  and  other
     proprietary  rights  and  processes  necessary  for  its  business  as  now
     conducted  and,  to  the  Company's  knowledge, as presently proposed to be
     conducted  (the "Intellectual Property"), without any known infringement of
     the  rights  of  others.  There  are  no  outstanding  options, licenses or
     agreements of any kind relating to the foregoing proprietary rights, nor is
     the  Company or any of its Subsidiaries bound by or a party to any options,
     licenses or agreements of any kind with respect to the patents, trademarks,
     service  marks,  trade  names,  copyrights,  trade  secrets,  licenses,
     information  and other proprietary rights and processes of any other person
     or  entity other than such licenses or agreements arising from the purchase
     of  "off  the  shelf"  or  standard  products.

          (b)  Neither  the Company nor any of its Subsidiaries has received any
     communications  alleging  that  the  Company or any of its Subsidiaries has
     violated  any  of  the  patents,  trademarks,  service  marks, trade names,
     copyrights or trade secrets or other proprietary rights of any other person
     or entity, nor is the Company or any of its Subsidiaries aware of any basis
     therefor.

          (c) The Company does not believe it is or will be necessary to utilize
     any  inventions,  trade  secrets  or  proprietary information of any of its
     employees  made  prior  to  their  employment  by the Company or any of its
     Subsidiaries,  except  for  inventions,  trade  secrets  or  proprietary
     information that have been rightfully assigned to the Company or any of its
     Subsidiaries.

          4.11  Compliance  with  Other Instruments. Neither the Parent, Company
                -----------------------------------
     nor  any  of its Subsidiaries is in violation or default of (x) any term of
     its  Charter or Bylaws, or (y) any provision of any indebtedness, mortgage,
     indenture,  contract,  agreement  or  instrument to which it is party or by
     which  it  is  bound  or  of  any  judgment,  decree,  order or writ, which
     violation  or  default,  in  the case of this clause (y), has had, or could
     reasonably  be expected to have, either individually or in the aggregate, a
     Material  Adverse  Effect.  The  execution, delivery and performance of and
     compliance  with this Agreement and the Related Agreements to which it is a
     party,  and  the issuance and sale of the Note by the Company and the other
     Securities  by  the  Company  and the issuance of the Parent Warrant by the
     Parent  each  pursuant  hereto  and  thereto, will not, with or without the
     passage of time or giving of notice, result in any such material violation,
     or  be  in  conflict  with  or  constitute a default under any such term or
     provision,  or  result  in  the  creation  of  any  mortgage, pledge, lien,
     encumbrance  or  charge upon any of the properties or assets of the Parent,

<PAGE>

     Company  or  any  of  its  Subsidiaries  or  the  suspension,  revocation,
     impairment,  forfeiture or nonrenewal of any permit, license, authorization
     or  approval  applicable  to  the  Parent  or  the Company, its business or
     operations  or  any  of  its  assets  or  properties.

          4.12 Litigation. Except as set forth on Schedule 4.12 hereto, there is
               ----------
     no  action,  suit, proceeding or investigation pending or, to the Company's
     knowledge,  currently  threatened against the Parent, Company or any of its
     Subsidiaries  that  prevents the Parent, Company or any of its Subsidiaries
     from  entering into this Agreement or the other Related Agreements, or from
     consummating  the transactions contemplated hereby or thereby, or which has
     had, or could reasonably be expected to have, either individually or in the
     aggregate,  a  Material  Adverse Effect or any change in the current equity
     ownership  of  the  Parent,  Company or any of its Subsidiaries, nor is the
     Company  aware  that  there  is  any  basis to assert any of the foregoing.
     Neither  the  Parent,  Company nor any of its Subsidiaries is a party to or
     subject  to  the  provisions  of  any  order, writ, injunction, judgment or
     decree  of  any  court or government agency or instrumentality. There is no
     action,  suit, proceeding or investigation by the Parent, Company or any of
     its  Subsidiaries  currently pending or which the Parent, Company or any of
     its  Subsidiaries  intends  to  initiate.

          4.13  Tax  Returns  and  Payments. Each of the Company and each of its
                ---------------------------
     Subsidiaries  has  timely  filed all tax returns (federal, state and local)
     required  to  be filed by it. All taxes shown to be due and payable on such
     returns,  any  assessments  imposed, and all other taxes due and payable by
     the  Company or any of its Subsidiaries on or before the Closing, have been
     paid  or  will  be paid prior to the time they become delinquent. Except as
     set forth on Schedule 4.13, neither the Company nor any of its Subsidiaries
     has  been  advised:

          (a) that any of its returns, federal, state or other, have been or are
     being  audited  as  of  the  date  hereof;  or

          (b)  of  any  adjustment,  deficiency, assessment or court decision in
     respect  of its federal, state or other taxes.

     The  Company  has  no  knowledge  of  any  liability  for  any  tax  to  be
     imposed upon its properties or assets as of the date of this Agreement that
     is  not  adequately  provided  for.

          4.14  Employees.  Except  as  set  forth on Schedule 4.14, neither the
                ---------
     Company  nor  any  of  its  Subsidiaries  has  any  collective  bargaining
     agreements  with  any  of its employees. There is no labor union organizing
     activity pending or, to the Company's knowledge, threatened with respect to
     the  Company  or  any  of its Subsidiaries. Except as disclosed on Schedule
     4.14,  neither  the  Company  nor  any of its Subsidiaries is a party to or
     bound by any currently effective employment contract, deferred compensation
     arrangement,  bonus  plan,  incentive plan, profit sharing plan, retirement
     agreement  or  other  employee  compensation  plan  or  agreement.  To  the
     Company's knowledge, no employee of the Company or any of its Subsidiaries,
     nor  any  consultant  with  whom the Company or any of its Subsidiaries has
     contracted,  is  in  violation  of  any  term  of  any employment contract,
     proprietary  information  agreement  or any other agreement relating to the
     right  of  any  such individual to be employed by, or to contract with, the
     Company or any of its Subsidiaries because of the nature of the business to
     be  conducted  by  the  Company  or  any  of  its  Subsidiaries; and to the
     Company's  knowledge  the  continued  employment  by  the  Company  and its
     Subsidiaries  of  their  present  employees,  and  the  performance  of the
     Company's and its Subsidiaries' contracts with its independent contractors,
     will  not  result in any such violation. Neither the Company nor any of its
     Subsidiaries  is  aware  that  any  of its employees is obligated under any
     contract  (including  licenses,  covenants or commitments of any nature) or
     other  agreement,  or subject to any judgment, decree or order of any court
     or  administrative  agency  that  would  interfere with their duties to the
     Company  or  any  of  its  Subsidiaries. Neither the Company nor any of its


     Subsidiaries  has  received any notice alleging that any such violation has
     occurred.  Except  for  employees  who  have a current effective employment
     agreement  with  the Company or any of its Subsidiaries, no employee of the
     Company  or any of its Subsidiaries has been granted the right to continued
     employment  by  the  Company  or any of its Subsidiaries or to any material
     compensation following termination of employment with the Company or any of
     its  Subsidiaries. Except as set forth on Schedule 4.14, the Company is not
     aware  that  any  officer,  key  employee  or group of employees intends to
     terminate  his,  her  or  their  employment  with the Company or any of its
     Subsidiaries,  nor  does  the  Company  or  any  of its Subsidiaries have a
     present  intention to terminate the employment of any officer, key employee
     or  group  of  employees.

          4.15  Voting  Rights.  Except  as  set  forth on Schedule 4.15, to the
                --------------
     Company's  knowledge,  no  stockholder  of  the  Company  or  any  of  its
     Subsidiaries  has  entered into any agreement with respect to the voting of
     equity  securities  of  the  Company  or  any  of  its  Subsidiaries.

          4.16  Compliance  with  Laws; Permits. Neither the Parent, Company nor
                -------------------------------
     any  of  its  Subsidiaries is in violation of any provision of the Sarbanes
     Oxley  Act  of  2002  applicable  statute,  rule,  regulation,  order  or
     restriction of any domestic or foreign government or any instrumentality or
     agency  thereof  in respect of the conduct of its business or the ownership
     of  its  properties which has had, or could reasonably be expected to have,
     either  individually  or  in  the  aggregate, a Material Adverse Effect. No
     governmental orders, permissions, consents, approvals or authorizations are
     required  to  be obtained and no registrations or declarations are required
     to be filed in connection with the execution and delivery of this Agreement
     or any other Related Agreement and the issuance of any of the Securities or
     the  Parent  Warrant, except such as have been duly and validly obtained or
     filed,  or with respect to any filings that must be made after the Closing,
     as  will  be  filed  in  a  timely  manner.  Each  of  the  Company and its
     Subsidiaries has all material franchises, permits, licenses and any similar
     authority  necessary for the conduct of its business as now being conducted
     by  it,  the  lack of which could, either individually or in the aggregate,
     reasonably  be  expected  to  have  a  Material  Adverse  Effect.

          4.17  Environmental  and  Safety Laws. Neither the Parent, Company nor
                -------------------------------
     any  of  its Subsidiaries is in violation of any applicable statute, law or
     regulation  relating  to the environment or occupational health and safety,
     and  to  its knowledge, no material expenditures are or will be required in
     order  to  comply with any such existing statute, law or regulation. Except
     as  set  forth  on Schedule 4.17, no Hazardous Materials (as defined below)
     are  used  or have been used, stored, or disposed of by the Parent, Company
     or  any  of  its  Subsidiaries or, to the Company's knowledge, by any other
     person  or  entity  on  any  property  owned, leased or used by the Parent,
     Company  or  any  of  its  Subsidiaries.  For the purposes of the preceding
     sentence,  "Hazardous  Materials"  shall  mean:

<PAGE>

          (a)  materials which are listed or otherwise defined as "hazardous" or
     "toxic"  under any applicable local, state, federal and/or foreign laws and
     regulations  that  govern  the  existence and/or remedy of contamination on
     property, the protection of the environment from contamination, the control
     of  hazardous  wastes,  or other activities involving hazardous substances,
     including  building  materials;  or

          (b)  any  petroleum  products  or  nuclear  materials.

          4.18  Valid Offering. Assuming the accuracy of the representations and
                --------------
     warranties  of  the  Purchaser contained in this Agreement, the offer, sale
     and  issuance  of the Securities, the Parent Warrant and the Parent Warrant
     Shares  will be exempt from the registration requirements of the Securities
     Act  of  1933,  as  amended  (the  "Securities  Act"),  and  will have been
     registered or qualified (or are exempt from registration and qualification)
     under  the  registration,  permit  or  qualification  requirements  of  all
     applicable  state  securities  laws.

          4.19 Full Disclosure. Each of the Company and each of its Subsidiaries
               ---------------
     has  provided the Purchaser with all information requested by the Purchaser
     in  connection  with  its  decision  to  purchase the Note and the Warrant,
     including  all  information  the  Company  and  its Subsidiaries believe is
     reasonably  necessary  to  make  such  investment  decision.  Neither  this
     Agreement,  the  Related  Agreements, the exhibits and schedules hereto and
     thereto  nor  any  other  document  delivered  by the Company or any of its
     Subsidiaries to Purchaser or its attorneys or agents in connection herewith
     or  therewith  or  with  the  transactions  contemplated hereby or thereby,
     contain  any  untrue  statement  of  a  material  fact  nor omit to state a
     material fact necessary in order to make the statements contained herein or
     therein,  in  light  of  the  circumstances  in  which  they  are made, not
     misleading.  Any  financial projections and other estimates provided to the
     Purchaser  by  the  Company  or  any  of its Subsidiaries were based on the
     Company's  and  its  Subsidiaries'  experience  in  the  industry  and  on
     assumptions  of  fact  and opinion as to future events which the Company or
     any of its Subsidiaries, at the date of the issuance of such projections or
     estimates,  believed  to  be  reasonable.

          4.20  Insurance.  Each of the Company and each of its Subsidiaries has
                ---------
     general commercial, product liability, fire and casualty insurance policies
     with  coverages  which  the  Company  believes  are customary for companies
     similarly  situated  to  the  Company  and  its Subsidiaries in the same or
     similar  business.

          4.21  Dilution.  The  Company  specifically  acknowledges  that  its
                --------
     obligation to issue the shares of Common Stock upon exercise of the Warrant
     is binding upon the Company and enforceable regardless of the dilution such
     issuance  may  have on the ownership interests of other shareholders of the
     Company.

          4.22 Patriot Act. The Company certifies that, to the best of Company's
               -----------
     knowledge, neither the Parent, Company nor any of its Subsidiaries has been
     designated,  nor  is  or  shall  be  owned  or  controlled, by a "suspected
     terrorist"  as  defined  in  Executive  Order  13224.  The  Company  hereby
     acknowledges  that  the  Purchaser seeks to comply with all applicable laws
     concerning money laundering and related activities. In furtherance of those
     efforts,  the  Company  hereby represents, warrants and covenants that: (i)
     none  of  the  cash  or  property  that  the  Parent, Company or any of its
     Subsidiaries will pay or will contribute to the Purchaser has been or shall

<PAGE>

     be  derived from, or related to, any activity that is deemed criminal under
     United  States  law;  and  (ii)  no  contribution or payment by the Parent,
     Company  or any of its Subsidiaries or to the Purchaser, to the extent that
     they  are within the Company's and/or its Subsidiaries' and/or the Parent's
     control  shall  cause the Purchaser to be in violation of the United States
     Bank  Secrecy Act, the United States International Money Laundering Control
     Act  of  1986 or the United States International Money Laundering Abatement
     and Anti-Terrorist Financing Act of 2001. The Company shall promptly notify
     the  Purchaser  if  any  of  these representations, warranties or covenants
     ceases  to  be  true  and  accurate  regarding  the  Company,  any  of  its
     Subsidiaries  or  the  Parent.  The Company shall provide the Purchaser all
     additional  information  regarding  the Company, any of its Subsidiaries or
     the  Parent  that  the  Purchaser  deems  necessary or convenient to ensure
     compliance with all applicable laws concerning money laundering and similar
     activities.  The  Company  understands and agrees that if at any time it is
     discovered  that  any  of  the  foregoing  representations,  warranties  or
     covenants  are  incorrect,  or  if  otherwise required by applicable law or
     regulation related to money laundering or similar activities, the Purchaser
     may  undertake appropriate actions to ensure compliance with applicable law
     or  regulation,  including but not limited to segregation and/or redemption
     of  the  Purchaser's  investment  in  the  Company.  The  Company  further
     understands  that  the Purchaser may release confidential information about
     the  Company,  its  Subsidiaries  and  the  Parent  and, if applicable, any
     underlying  beneficial  owners,  to proper authorities if the Purchaser, in
     its  sole  discretion,  determines  that it is in the best interests of the
     Purchaser  in  light  of  relevant rules and regulations under the laws set
     forth  in  subsection  (ii)  above.

          4.23  ERISA. Based upon the Employee Retirement Income Security Act of
                -----
     1974  ("ERISA"),  and  the  regulations  and  published  interpretations
             -----
     thereunder: (i) neither the Company nor any of its Subsidiaries has engaged
     in  any  Prohibited  Transactions  (as  defined in Section 406 of ERISA and
     Section  4975  of  the  Internal  Revenue  Code  of  1986,  as amended (the
     "Code")); (ii) each of the Company and each of its Subsidiaries has met all
      ----
     applicable  minimum  funding  requirements  under  Section  302 of ERISA in
     respect of its plans; (iii) neither the Company nor any of its Subsidiaries
     has  any knowledge of any event or occurrence which would cause the Pension
     Benefit  Guaranty  Corporation  to  institute proceedings under Title IV of
     ERISA  to  terminate any employee benefit plan(s); (iv) neither the Company
     nor  any  of  its  Subsidiaries  has  any  fiduciary  responsibility  for
     investments  with  respect  to any plan existing for the benefit of persons
     other  than  the  Company's or such Subsidiary's employees; and (v) neither
     the  Company  nor  any  of  its  Subsidiaries  has withdrawn, completely or
     partially,  from  any  multi-employer pension plan so as to incur liability
     under  the  Multiemployer  Pension  Plan  Amendments  Act  of  1980.

          4.24  Registration  Rights.  At  such  time, if ever, that the Company
                --------------------
     completes  an  initial  public  offering  of its securities or is otherwise
     publicly  traded  (i.e.  through a reverse merger or otherwise), the shares
     underlying the Warrant shall have the same registration rights with respect
     to such shares as those contained in the Registration Rights Agreement, the
     provisions of which shall be deemed incorporated herein by reference to the
     extent  necessary  to  effectuate the purpose and intent of this provision.

     5.     Representations  and Warranties  of  the  Purchaser.  The  Purchaser
            ---------------------------------------------------
hereby  represents  and warrants to the Company as follows (such representations
and  warranties  do  not lessen or obviate the representations and warranties of
the  Company  set  forth  in  this  Agreement):

<PAGE>

          5.1  Requisite  Power  and  Authority. The Purchaser has all necessary
               --------------------------------
     power  and  authority under all applicable provisions of law to execute and
     deliver  this  Agreement  and the Related Agreements and to carry out their
     provisions.  All  corporate action on the Purchaser's part required for the
     lawful  execution and delivery of this Agreement and the Related Agreements
     have  been  or  will  be effectively taken prior to the Closing. Upon their
     execution  and  delivery, this Agreement and the Related Agreements will be
     valid  and  binding obligations of the Purchaser, enforceable in accordance
     with  their  terms,  except:

          (a)  as  limited by applicable bankruptcy, insolvency, reorganization,
     moratorium  or  other  laws of general application affecting enforcement of
     creditors'  rights;  and

          (b)  as  limited  by  general  principles  of equity that restrict the
     availability  of  equitable  and  legal  remedies.

          5.2  Investment  Representations.  The  Purchaser understands that the
               ---------------------------
     Securities  are  being  offered  and  sold  pursuant  to  an exemption from
     registration  contained  in  the  Securities  Act  based  in  part upon the
     Purchaser's representations contained in this Agreement, including, without
     limitation,  that  the  Purchaser  is  an  "accredited investor" within the
     meaning  of  Regulation D under the Securities Act of 1933, as amended (the
     "Securities  Act").  The Purchaser confirms that it has received or has had
     full access to all the information it considers necessary or appropriate to
     make  an  informed  investment  decision  with  respect to the Note and the
     Warrant  to  be purchased by it under this Agreement and the Warrant Shares
     acquired  by  it  upon  the  exercise  of  the  Warrant,  respectively. The
     Purchaser  further confirms that it has had an opportunity to ask questions
     and  receive  answers  from  the  Company  regarding  the Company's and its
     Subsidiaries'  business, management and financial affairs and the terms and
     conditions of the Offering, the Note, the Warrant and the Securities and to
     obtain  additional  information  (to  the extent the Company possessed such
     information  or  could  acquire  it without unreasonable effort or expense)
     necessary  to verify any information furnished to the Purchaser or to which
     the  Purchaser  had  access.

          5.3  The  Purchaser Bears Economic Risk. The Purchaser has substantial
               ----------------------------------
     experience in evaluating and investing in private placement transactions of
     securities  in  companies  similar  to the Company so that it is capable of
     evaluating  the  merits  and risks of its investment in the Company and has
     the  capacity  to  protect  its  own  interests.

          5.4  Acquisition for Own Account. The Purchaser is acquiring the Note,
               ---------------------------
     the  Warrant  and  the Parent Warrant and the Warrant Shares and the Parent
     Warrant Shares for the Purchaser's own account for investment only, and not
     as  a  nominee  or  agent  and  not  with  a  view towards or for resale in
     connection  with  their  distribution.

          5.5  The  Purchaser Can Protect Its Interest. The Purchaser represents
               ---------------------------------------
     that  by  reason  of  its,  or  of its management's, business and financial
     experience, the Purchaser has the capacity to evaluate the merits and risks
     of  its  investment  in  the  Note,  the  Warrant and the Securities and to
     protect  its own interests in connection with the transactions contemplated
     in  this  Agreement  and  the Related Agreements. Further, the Purchaser is
     aware  of  no  publication  of  any  advertisement  in  connection with the
     transactions  contemplated  in  the  Agreement  or  the Related Agreements.

          5.6  Accredited  Investor.  The  Purchaser  represents  that  it is an
               --------------------
     accredited investor within the meaning of Regulation D under the Securities
     Act.

          5.7  Legends.
               -------

          (a)  The  Warrant shall bear substantially the following legend: "THIS
          WARRANT  AND  THE  COMMON  SHARES  ISSUABLE  UPON  EXERCISE  OF  THIS
          WARRANT  HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
          AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS. THIS WARRANT AND THE
          COMMON  SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD,
          OFFERED  FOR  SALE,  PLEDGED  OR  HYPOTHECATED  IN  THE  ABSENCE OF AN
          EFFECTIVE  REGISTRATION STATEMENT AS TO THIS WARRANT OR THE UNDERLYING
          SHARES  OF COMMON STOCK UNDER SAID ACT AND APPLICABLE STATE SECURITIES
          LAWS  OR  AN  OPINION  OF  COUNSEL REASONABLY SATISFACTORY TO TEXAURUS
          ENERGY,  INC.  THAT  SUCH  REGISTRATION  IS  NOT  REQUIRED."

          (b) The Warrant Shares and the Parent Warrant Shares, if not issued by
     the  Deposit  Withdrawal Agent Commission system, shall bear a legend which
     shall  be in substantially the following form until such shares are covered
     by  an  effective  registration  statement  filed  with  the Securities and
     Exchange  Commission:

          "THE  SHARES  REPRESENTED  BY  THIS  CERTIFICATE  HAVE  NOT  BEEN
          REGISTERED  UNDER  THE  SECURITIES  ACT  OF  1933,  AS AMENDED, OR ANY
          APPLICABLE  STATE  SECURITIES  LAWS.  THESE  SHARES  MAY  NOT BE SOLD,
          OFFERED  FOR  SALE,  PLEDGED  OR  HYPOTHECATED  IN  THE  ABSENCE OF AN
          EFFECTIVE  REGISTRATION  STATEMENT  UNDER  SUCH  SECURITIES  ACT  AND
          APPLICABLE STATE LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY
          TO  TEXAURUS  ENERGY,  INC.  THAT  SUCH REGISTRATION IS NOT REQUIRED."

          (c)  The Parent Warrant shall bear substantially the following legend:

          "THIS  WARRANT  AND  THE  COMMON  SHARES  ISSUABLE  UPON  EXERCISE  OF
          THIS  WARRANT  HAVE  NOT  BEEN  REGISTERED UNDER THE SECURITIES ACT OF
          1933,  AS  AMENDED,  OR  ANY  APPLICABLE  STATE  SECURITIES LAWS. THIS

<PAGE>

          WARRANT  AND  THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT
          MAY  NOT  BE  SOLD,  OFFERED  FOR SALE, PLEDGED OR HYPOTHECATED IN THE
          ABSENCE  OF  AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT OR
          THE  UNDERLYING  SHARES  OF COMMON STOCK UNDER SAID ACT AND APPLICABLE
          STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY
          TO  TEXHOMA  ENERGY,  INC.  THAT  SUCH  REGISTRATION IS NOT REQUIRED."

     6.     Covenants of the Company.  The Company covenants and agrees with the
            ------------------------
Purchaser  as  follows:

          6.1  Reporting  Requirements. The Company will deliver, or cause to be
               -----------------------
     delivered,  to  the Purchaser each of the following, which shall be in form
     and  detail  acceptable  to  the  Purchaser:

          (a) As soon as available, and in any event within one hundred and five
     (105) days after the end of each fiscal year of the Parent and the Company,
     each  of  the Parent's Company's audited financial statements with a report
     of independent certified public accountants of recognized standing selected
     by  the  Company and acceptable to the Purchaser (the "Accountants"), which
     annual  financial  statements  shall  be  without  qualification  and shall
     include  each of the Parent's and the Company's balance sheet as at the end
     of  such fiscal year and the related statements of each of the Parent's and
     the  Company's income, retained earnings and cash flows for the fiscal year
     then  ended,  prepared on a consolidating and consolidated basis to include
     the  Parent  and  the  Company,  all  in  reasonable detail and prepared in
     accordance  with  GAAP,  together with (i) if and when available, copies of
     any  management letters prepared by the Accountants; and (ii) a certificate
     of  the  Parent's  President,  Chief  Executive  Officer or Chief Financial
     Officer  stating  that  such  financial  statements  have  been prepared in
     accordance  with  GAAP and whether or not such officer has knowledge of the
     occurrence  of  any  Event  of Default (as defined in the Note) and, if so,
     stating  in  reasonable  detail  the  facts  with  respect  thereto;

          (b) As soon as available and in any event within fifty (50) days after
     the end of each fiscal quarter of the Parent, an unaudited/internal balance
     sheet  and  statements  of  income, retained earnings and cash flows of the
     Parent  and  the  Company as at the end of and for such quarter and for the
     year  to  date  period  then  ended,  prepared  on  a  consolidating  and
     consolidated  basis  to  include  the Parent and the Company, in reasonable
     detail  and  stating  in comparative form the figures for the corresponding
     date  and  periods  in  the  previous year, all prepared in accordance with
     GAAP,  subject  to year-end adjustments and accompanied by a certificate of
     the Parent's President, Chief Executive Officer or Chief Financial Officer,
     stating (i) that such financial statements have been prepared in accordance
     with  GAAP,  subject to year-end audit adjustments, and (ii) whether or not
     such  officer  has  knowledge of the occurrence of any Event of Default (as
     defined  in  the  Note)  not  theretofore reported and remedied and, if so,
     stating  in  reasonable  detail  the  facts  with  respect  thereto;

          (c)  As  soon  as  available and in any event within fifteen (15) days
     after  the  end of each calendar month, an unaudited/internal balance sheet
     and  statements  of income, retained earnings and cash flows of each of the
     Parent and the Company as at the end of and for such month and for the year
     to  date  period  then  ended, prepared on a consolidating and consolidated
     basis  to  include  the  Parent  and  the Company, in reasonable detail and
     stating  in  comparative  form  the  figures for the corresponding date and
     periods in the previous year, all prepared in accordance with GAAP, subject
     to  year-end  adjustments  and accompanied by a certificate of the Parent's
     President,  Chief Executive Officer or Chief Financial Officer, stating (i)
     that  such financial statements have been prepared in accordance with GAAP,
     subject to year-end audit adjustments, and (ii) whether or not such officer
     has  knowledge of the occurrence of any Event of Default (as defined in the
     Note)  not  theretofore  reported  and  remedied  and,  if  so,  stating in
     reasonable  detail  the  facts  with  respect  thereto;  and

          (d)  The  Company shall deliver, or cause the applicable Subsidiary of
     the  Company  to  deliver,  such  other  information as the Purchaser shall
     reasonably  request.

          6.2  Use  of  Funds. The Company shall use the proceeds of the sale of
               --------------
     the  Note  and  the Warrant solely for the purpose of acquiring the oil and
     gas  properties  described  in the Sales and Purchase Agreement dated as of
     March  27,  2006  between the Company and Kilrush Petroleum, Inc., the sale
     and  purchase  documentation  to  be  entered  into on a post-closing basis
     between  the  Company  and  the seller of the Little White Lake oil and gas
     assets  and  any and all other acquisitions with the prior written approval
     of  the  Purchaser

          6.3  Access  to  Facilities.  Each  of  the  Company  and  each of its
               ----------------------
     Subsidiaries  will  permit  any representatives designated by the Purchaser
     (or  any  successor  of  the  Purchaser), upon reasonable notice and during
     normal  business  hours,  at  such  person's  expense  and accompanied by a
     representative  of  the  Company  or  any Subsidiary (provided that no such
     prior  notice  shall  be required to be given and no such representative of
     the  Company or any Subsidiary shall be required to accompany the Purchaser
     in the event the Purchaser believes such access is necessary to preserve or
     protect  the  Collateral  (as  defined in the Master Security Agreement) or
     following  the occurrence and during the continuance of an Event of Default
     (as  defined  in  the  Note)),  to:

          (a)  visit  and inspect any of the properties of the Company or any of
     its  Subsidiaries;

          (b)  examine the corporate and financial records of the Company or any
     of  its  Subsidiaries (unless such examination is not permitted by federal,
     state  or  local  law  or  by contract) and make copies thereof or extracts
     therefrom;  and

          (c)  discuss  the affairs, finances and accounts of the Company or any
     of  its  Subsidiaries  with  the  directors,  officers  and  independent
     accountants  of  the  Company  or  any  of  its  Subsidiaries.

<PAGE>

     Notwithstanding  the  foregoing,  neither  the  Company  nor  any  of  its
     Subsidiaries  will  provide  any  material,  non-public  information to the
     Purchaser  unless  the  Purchaser  signs  a  confidentiality  agreement and
     otherwise  complies  with Regulation FD, under the federal securities laws.

          6.4  Taxes.  Each  of  the  Company  and each of its Subsidiaries will
               -----
     promptly  pay  and  discharge, or cause to be paid and discharged, when due
     and  payable,  all  taxes,  assessments  and governmental charges or levies
     imposed  upon  the income, profits, property or business of the Company and
     its  Subsidiaries; provided, however, that any such tax, assessment, charge
     or  levy  need  not  be  paid  currently  if (i) the validity thereof shall
     currently  and  diligently  be  contested  in  good  faith  by  appropriate
     proceedings, (ii) such tax, assessment, charge or levy shall have no effect
     on the lien priority of the Purchaser in any property of the Company or any
     of  its  Subsidiaries and (iii) if the Company and/or such Subsidiary shall
     have  set  aside  on  its  books  adequate reserves with respect thereto in
     accordance  with  GAAP;  and  provided,  further,  that the Company and its
     Subsidiaries  will  pay  all  such  taxes,  assessments,  charges or levies
     forthwith  upon the commencement of proceedings to foreclose any lien which
     may  have  attached  as  security  therefor.

          6.5  Insurance. Each of the Company and its Subsidiaries will keep its
               ---------
     assets which are of an insurable character insured by financially sound and
     reputable  insurers  against  loss  or  damage by fire, explosion and other
     risks  customarily  insured  against  by  companies  in  similar  business
     similarly situated as the Company and its Subsidiaries; and the Company and
     its  Subsidiaries  will  maintain,  with  financially  sound  and reputable
     insurers,  insurance  against  other  hazards  and  risks  and liability to
     persons  and  property  to  the  extent and in the manner which the Company
     reasonably  believes  is  customary  for  companies  in  similar  business
     similarly  situated  as  the Company and its Subsidiaries and to the extent
     available  on  commercially  reasonable terms. The Company, and each of its
     Subsidiaries,  will  jointly  and severally bear the full risk of loss from
     any loss of any nature whatsoever with respect to the assets pledged to the
     Purchaser  as security for their respective obligations hereunder and under
     the  Related  Agreements.  At  the  Company's and each of its Subsidiaries'
     joint  and several cost and expense in amounts and with carriers reasonably
     acceptable  to  the  Purchaser,  each  of  the  Company  and  each  of  its
     Subsidiaries  shall (i) keep all its insurable properties and properties in
     which  it  has  an  interest  insured  against  the hazards of fire, flood,
     sprinkler leakage, those hazards covered by extended coverage insurance and
     such  other  hazards,  and for such amounts, as is customary in the case of
     companies  engaged in businesses similar to the Company's or the respective
     Subsidiary's  including  business  interruption  insurance; (ii) maintain a
     bond  in  such  amounts as is customary in the case of companies engaged in
     businesses similar to the Company's or the respective Subsidiary's insuring
     against  larceny,  embezzlement  or  other  criminal  misappropriation  of
     insured's  officers  and  employees  who  may either singly or jointly with
     others at any time have access to the assets or funds of the Company or any
     of  its  Subsidiaries  either directly or through governmental authority to
     draw upon such funds or to direct generally the disposition of such assets;
     (iii)  maintain  public  and product liability insurance against claims for
     personal injury, death or property damage suffered by others; (iv) maintain
     all  such  worker's  compensation  or  similar insurance as may be required
     under  the  laws  of  any state or jurisdiction in which the Company or the
     respective Subsidiary is engaged in business; and (v) furnish the Purchaser
     with  (x)  copies  of  all policies and evidence of the maintenance of such
     policies  at  least  thirty  (30)  days  before  any  expiration  date, (y)
     excepting  the Company's workers' compensation policy, endorsements to such
     policies  naming  the Purchaser as "co-insured" or "additional insured" and
     appropriate loss payable endorsements in form and substance satisfactory to
     the Purchaser, naming the Purchaser as loss payee, and (z) evidence that as
     to  the  Purchaser  the  insurance  coverage  shall  not  be  impaired  or
     invalidated  by any act or neglect of the Company or any Subsidiary and the
     insurer  will  provide  the Purchaser with at least thirty (30) days notice

<PAGE>

     prior  to  cancellation. The Company and each Subsidiary shall instruct the
     insurance  carriers  that in the event of any loss thereunder, the carriers
     shall  make  payment for such loss to the Company and/or the Subsidiary and
     the  Purchaser jointly. In the event that as of the date of receipt of each
     loss  recovery  upon  any such insurance, the Purchaser has not declared an
     event  of  default  with  respect  to  this Agreement or any of the Related
     Agreements,  then  the Company and/or such Subsidiary shall be permitted to
     direct  the application of such loss recovery proceeds toward investment in
     property,  plant  and equipment that would comprise "Collateral" secured by
     the Purchaser's security interest pursuant to the Master Security Agreement
     or  such  other  security  agreement as shall be required by the Purchaser,
     with  any  surplus funds to be applied toward payment of the obligations of
     the  Company to the Purchaser. In the event that the Purchaser has properly
     declared  an  event of default with respect to this Agreement or any of the
     Related Agreements, then all loss recoveries received by the Purchaser upon
     any  such  insurance  thereafter  may  be applied to the obligations of the
     Company  hereunder  and  under the Related Agreements, in such order as the
     Purchaser may determine. Any surplus (following satisfaction of all Company
     obligations to the Purchaser) shall be paid by the Purchaser to the Company
     or  applied  as  may  be  otherwise required by law. Any deficiency thereon
     shall  be  paid  by  the  Company  or the Subsidiary, as applicable, to the
     Purchaser,  on  demand.

          6.6  Intellectual  Property.  Each  of  the  Company  and  each of its
               ----------------------
     Subsidiaries  shall maintain in full force and effect its existence, rights
     and  franchises  and  all  licenses  and  other  rights to use Intellectual
     Property  owned or possessed by it and reasonably deemed to be necessary to
     the  conduct  of  its  business.

          6.7  Properties. Each of the Company and each of its Subsidiaries will
               ----------
     keep its properties in good repair, working order and condition, reasonable
     wear  and  tear excepted, and from time to time make all needful and proper
     repairs,  renewals,  replacements,  additions and improvements thereto; and
     each  of  the Company and each of its Subsidiaries will at all times comply
     with  each provision of all leases to which it is a party or under which it
     occupies  property  if  the  breach  of  such  provision  could,  either
     individually or in the aggregate, reasonably be expected to have a Material
     Adverse  Effect.

          6.8  Confidentiality. The Company will not, and will not permit any of
               ---------------
     its  Subsidiaries  to,  disclose,  and  will  not  include  in  any  public
     announcement,  the name of the Purchaser, unless expressly agreed to by the
     Purchaser  or  unless  and  until  such  disclosure  is  required by law or
     applicable  regulation,  and  then  only to the extent of such requirement.
     Notwithstanding  the  foregoing,  the  Company may disclose the Purchaser's
     identity  and  the  terms  of this Agreement to its current and prospective
     debt  and  equity  financing  sources.

          6.9  Required  Approvals. (I) For so long as twenty-five percent (25%)
               -------------------
     of  the  principal  amount of the Note is outstanding, the Company, without
     the prior written consent of the Purchaser, shall not, and shall not permit
     any  of  its  Subsidiaries  to:

          (a)  (i)  directly  or  indirectly declare or pay any dividends, other
     than dividends paid to the Company or any of its wholly-owned Subsidiaries,
     (ii)  issue any preferred stock that is mandatorily redeemable prior to the
     one year anniversary of the Maturity Date (as defined in the Note) or (iii)
     redeem  any  of  its  preferred  stock  or  other  equity  interests;

          (b)  liquidate, dissolve or effect a material reorganization (it being
     understood  that  in  no event shall the Company or any of its Subsidiaries
     dissolve,  liquidate  or  merge with any other person or entity (unless, in
     the  case  of  such  a  merger,  the  Company or, in the case of merger not
     involving  the  Company,  such  Subsidiary, as applicable, is the surviving
     entity);

          (c)  become  subject  to  (including,  without  limitation,  by way of
     amendment  to  or modification of) any agreement or instrument which by its
     terms  would (under any circumstances) restrict the Company's or any of its
     Subsidiaries,  right  to  perform  the  provisions  of  this Agreement, any
     Related  Agreement or any of the agreements contemplated hereby or thereby;

          (d)  materially  alter  or  change  the  scope  of the business of the
     Company  and  its  Subsidiaries  taken  as  a  whole;  or

          (e)  (i)  create,  incur,  assume  or suffer to exist any indebtedness
     (exclusive  of  trade  debt  and  debt  incurred to finance the purchase of
     equipment  (not  in excess of five percent (5%) of the fair market value of
     the  Company's  and its Subsidiaries' assets)) whether secured or unsecured
     other  than  (x)  the  Company's  obligations  owed  to  the Purchaser, (y)
     indebtedness  set  forth on Schedule 6.9(e) attached hereto and made a part
     hereof  and  any  refinancings  or  replacements  thereof  on terms no less
     favorable  to  the  Purchaser  than  the  indebtedness  being refinanced or
     replaced, and (z) any indebtedness incurred in connection with the purchase
     of assets (other than equipment) in the ordinary course of business, or any
     refinancings  or  replacements  thereof  on  terms no less favorable to the
     Purchaser  than  the  indebtedness being refinanced or replaced, so long as
     any lien relating thereto shall only encumber the fixed assets so purchased
     and  no other assets of the Company or any of its Subsidiaries; (ii) cancel
     any  indebtedness  owing to it in excess of $50,000 in the aggregate during
     any  12  month period; (iii) assume, guarantee, endorse or otherwise become
     directly  or  contingently liable in connection with any obligations of any
     other person or entity, except the endorsement of negotiable instruments by
     the  Company or any Subsidiary thereof for deposit or collection or similar
     transactions  in  the  ordinary  course  of  business  or  guarantees  of
     indebtedness  otherwise permitted to be outstanding pursuant to this clause
     (e);  and

     (II) The Company, without the prior written consent of the Purchaser, shall
not,  and  shall  not  permit  any of its Subsidiaries to, create or acquire any
Subsidiary  after  the  date hereof unless (i) such Subsidiary is a wholly-owned
Subsidiary of the Company and (ii) such Subsidiary becomes a party to the Master
Security  Agreement,  the  Stock  Pledge  Agreement  and the Subsidiary Guaranty
(either by executing a counterpart thereof or an assumption or joinder agreement

<PAGE>

in respect thereof) and, to the extent required by the Purchaser, satisfies each
condition  of  this  Agreement  and the Related Agreements as if such Subsidiary
were  a  Subsidiary  on  the  Closing  Date.

          6.10  Opinion.  On  the  Closing Date, the Company will deliver to the
                -------
     Purchaser  an  opinion  acceptable  to  the  Purchaser  from  the Company's
     external legal counsel. The Company will provide, at the Company's expense,
     such  other legal opinions in the future as are deemed reasonably necessary
     by  the  Purchaser (and acceptable to the Purchaser) in connection with the
     exercise  of  the  Warrant  and  the  Parent  Warrant.

          6.11  Margin Stock. The Company will not permit any of the proceeds of
                ------------
     the  Note or the Warrant to be used directly or indirectly to "purchase" or
     "carry"  "margin  stock" or to repay indebtedness incurred to "purchase" or
     "carry" "margin stock" within the respective meanings of each of the quoted
     terms  under  Regulation U of the Board of Governors of the Federal Reserve
     System  as  now  and  from  time  to  time  hereafter  in  effect.

          6.12  Financing  Right  of  First  Refusal.
                ------------------------------------

          (a)  The  Company  hereby  grants  to  the  Purchaser a right of first
     refusal to provide any Additional Financing (as defined below) to be issued
     by  the  Company  and/or  any of its Subsidiaries, subject to the following
     terms  and  conditions.  From  and  after  the  date  hereof,  prior to the
     incurrence  of  any  additional indebtedness and/or the sale or issuance of
     any  equity  interests  of  the  Company  or  any  of  its Subsidiaries (an
     "Additional  Financing"), the Company and/or any Subsidiary of the Company,
     as  the  case  may be, shall notify the Purchaser of its intention to enter
     into such Additional Financing. In connection therewith, the Company and/or
     the  applicable Subsidiary thereof shall submit a fully executed term sheet
     (a  "Proposed  Term  Sheet")  to  the  Purchaser  setting  forth the terms,
     conditions  and pricing of any such Additional Financing (such financing to
     be  negotiated  on  "arm's  length"  terms  and  the  terms  thereof  to be
     negotiated in good faith) proposed to be entered into by the Company and/or
     such  Subsidiary.  The  Purchaser  shall  have  the  right,  but  not  the
     obligation,  to  deliver  its  own proposed term sheet (the "Purchaser Term
     Sheet")  setting  forth  the  terms and conditions upon which the Purchaser
     would be willing to provide such Additional Financing to the Company and/or
     such  Subsidiary.  The  Purchaser  Term  Sheet  shall contain terms no less
     favorable  to  the  Company  and/or  such Subsidiary than those outlined in
     Proposed  Term Sheet. The Purchaser shall deliver such Purchaser Term Sheet
     within  ten  business  days of receipt of each such Proposed Term Sheet. If
     the provisions of the Purchaser Term Sheet are at least as favorable to the
     Company  and/or  such  Subsidiary, as the case may be, as the provisions of
     the  Proposed  Term  Sheet,  the Company and/or such Subsidiary shall enter
     into  and  consummate  the Additional Financing transaction outlined in the
     Purchaser  Term  Sheet.

          (b)  The  Company  will  not, and will not permit its Subsidiaries to,
     agree, directly or indirectly, to any restriction with any person or entity
     which  limits  the  ability  of  the  Purchaser to consummate an Additional
     Financing  with  the  Company  or  any  of  its  Subsidiaries.

<PAGE>

          6.13 Authorization and Reservation of Shares. The Company shall at all
               ---------------------------------------
     times  have authorized and reserved a sufficient number of shares of Common
     Stock  to  provide for the exercise of the Warrant. The Parent shall at all
     times  have authorized and reserved a sufficient number of shares of Parent
     Common  Stock  to  provide  for  the  exercise  of  the  Parent  Warrant.

          6.14  Operator  Reports.  The  Company shall deliver to the Purchaser,
                -----------------
     within  two  (2) business days following the Company's receipt thereof from
     the  operators  of  the  Company's  oil  and  gas properties, a copy of the
     monthly  lease  operating  reports  relating  to  such  properties.

     7.  Covenants of the Purchaser. The Purchaser covenants and agrees with the
         --------------------------
Company  as  follows:

          7.1  Confidentiality.  The  Purchaser  will not disclose, and will not
               ---------------
     include  in  any  public  announcement,  the  name  of  the Company, unless
     expressly  agreed  to by the Company or unless and until such disclosure is
     required  by  law  or applicable regulation, and then only to the extent of
     such  requirement.

          7.2  Limitation  on  Acquisition  of  Common  Stock  of  the  Company.
               ----------------------------------------------------------------
     Notwithstanding  anything  to the contrary contained in this Agreement, any
     Related  Agreement or any document, instrument or agreement entered into in
     connection  with  any  other  transactions  between  the  Purchaser and the
     Company,  the  Purchaser  may  not acquire stock in the Company (including,
     without  limitation,  pursuant  to a contract to purchase, by exercising an
     option  or  Warrant,  by  converting  any  other security or instrument, by
     acquiring  or  exercising  any  other  right to acquire, shares of stock or
     other  security  convertible  into  shares  of  stock  in  the  Company, or
     otherwise,  and  such  contracts,  options,  Warrants,  conversion or other
     rights  shall  not  be enforceable or exercisable) to the extent such stock
     acquisition  would  cause  any  interest  (including  any  original  issue
     discount)  payable  by  the  Company  to  the  Purchaser  not to qualify as
     "portfolio  interest"  within the meaning of Section 881(c)(2) of the Code,
     by  reason  of  Section  881(c)(3)  of  the  Code,  taking into account the
     constructive  ownership  rules  under Section 871(h)(3)(C) of the Code (the
     "Stock  Acquisition  Limitation").  The  Stock Acquisition Limitation shall
     automatically  become  null and void without any notice to the Company upon
     the  existence  of  an  Event  of  Default  (as  defined  in  the  Note).

     8.  Covenants  of  the Company and the Purchaser Regarding Indemnification.
         ----------------------------------------------------------------------

          8.1  Company  Indemnification.  The  Company agrees to indemnify, hold
               ------------------------
     harmless,  reimburse  and  defend  the  Purchaser,  each of the Purchaser's
     officers,  directors,  agents,  affiliates,  control persons, and principal
     shareholders,  against  all  claims,  costs,  expenses,  liabilities,
     obligations,  losses  or  damages  (including reasonable legal fees) of any
     nature,  incurred  by or imposed upon the Purchaser which result, arise out
     of  or  are  based upon: (i) any misrepresentation by the Company or any of
     its  Subsidiaries  or  breach  of any warranty by the Company or any of its
     Subsidiaries  in  this  Agreement,  any  other  Related Agreement or in any
     exhibits  or  schedules  attached  hereto or thereto; or (ii) any breach or
     default  in  performance  by  Company  or  any  of  its Subsidiaries of any
     covenant  or  undertaking  to  be  performed  by  Company  or  any  of  its
     Subsidiaries  hereunder,  under  any  other  Related Agreement or any other

<PAGE>

     agreement  entered  into  by the Company and/or any of its Subsidiaries and
     the Purchaser relating hereto or thereto; or (iii) (a) the violation of any
     local, state or federal law, rule or regulation pertaining to environmental
     regulation,  contamination or cleanup (collectively, "Environmental Laws"),
     including  without  limitation,  the  Comprehensive Environmental Response,
     Compensation  and  Liability Act of 1980 (42 U.S.C. Sec.9601 et seq. and 40
     CFR  Sec.302.1 et seq.), the Resource Conservation and Recovery Act of 1976
     (42  U.S.C.  Sec.6901 et seq.), the Federal Water Pollution Control Act (33
     U.S.C.  Sec.1251  et  seq.,  and  40  CFR Sec.116.1 et seq.), the Hazardous
     Materials  Transportation  Act  (49  U.S.C.  Sec.1801  et  seq.)  and  the
     regulations  promulgated pursuant to said laws, all as amended and relating
     to  or affecting the Company and/or any Subsidiary and the Company's and/or
     any Subsidiary's properties, whether or not caused by or within the control
     of  the  Purchaser and/or (b) the presence, release or threat of release of
     any  Hazardous  Materials  (including,  without  limitation,  asbestos,
     polychlorinated  biphenyls,  petroleum  products,  flammable  explosives,
     radioactive materials, infectious substances or raw materials which include
     hazardous  constituents)  on,  in, under or affecting all or any portion of
     any property of the Company and/or any Subsidiary or any surrounding areas,
     regardless  of  whether  or  not  caused  by  or  within the control of the
     Purchaser.

          8.2  Purchaser's  Indemnification.  The Purchaser agrees to indemnify,
               ----------------------------
     hold  harmless,  reimburse and defend the Company and each of the Company's
     officers,  directors,  agents,  affiliates,  control  persons and principal
     shareholders,  at  all  times  against  any  claims,  costs,  expenses,
     liabilities,  obligations,  losses  or  damages (including reasonable legal
     fees)  of any nature, incurred by or imposed upon the Company which result,
     arise  out of or are based upon: (i) any misrepresentation by the Purchaser
     or  breach  of  any  warranty  by the Purchaser in this Agreement or in any
     exhibits or schedules attached hereto or any Related Agreement; or (ii) any
     breach  or  default  in  performance  by  the  Purchaser of any covenant or
     undertaking  to  be  performed  by  the  Purchaser  hereunder, or any other
     agreement  entered  into  by the Company and the Purchaser relating hereto.

     9.  Miscellaneous.
         -------------

          9.1  Governing  Law,  Jurisdiction  and  Waiver  of  Jury  Trial.
               -----------------------------------------------------------

          (a)  THIS AGREEMENT AND THE OTHER RELATED AGREEMENTS SHALL BE GOVERNED
     BY  AND  CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
     NEW  YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT
     REGARD  TO  PRINCIPLES  OF  CONFLICTS  OF  LAWS.

          (b)  THE  COMPANY HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL
     COURTS  LOCATED  IN  THE  COUNTY  OF NEW YORK, STATE OF NEW YORK SHALL HAVE
     EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN
     THE  COMPANY,  ON  THE  ONE  HAND,  AND  THE  PURCHASER, ON THE OTHER HAND,
     PERTAINING  TO  THIS  AGREEMENT  OR ANY OF THE RELATED AGREEMENTS OR TO ANY
     MATTER  ARISING  OUT  OF  OR  RELATED TO THIS AGREEMENT OR ANY OF THE OTHER
     RELATED  AGREEMENTS;  PROVIDED,  THAT  THE  PURCHASER  AND  THE  COMPANY
     ACKNOWLEDGE  THAT  ANY  APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A
     COURT  LOCATED  OUTSIDE  OF  THE COUNTY OF NEW YORK, STATE OF NEW YORK; AND

<PAGE>

     FURTHER  PROVIDED,  THAT,  NOTHING  IN  THIS  AGREEMENT  SHALL BE DEEMED OR
     OPERATE  TO PRECLUDE THE PURCHASER FROM BRINGING SUIT OR TAKING OTHER LEGAL
     ACTION  IN ANY OTHER JURISDICTION TO COLLECT THE OBLIGATIONS, TO REALIZE ON
     THE  COLLATERAL  (AS DEFINED IN THE MASTER SECURITY AGREEMENT) OR ANY OTHER
     SECURITY FOR THE OBLIGATIONS (AS DEFINED IN THE MASTER SECURITY AGREEMENT),
     OR  TO  ENFORCE  A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE PURCHASER.
     THE  COMPANY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION
     IN  ANY  ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND THE COMPANY HEREBY
     WAIVES  ANY  OBJECTION  THAT  IT  MAY  HAVE  BASED  UPON  LACK  OF PERSONAL
     JURISDICTION,  IMPROPER  VENUE  OR FORUM NON CONVENIENS. THE COMPANY HEREBY
     WAIVES  PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED
     IN  ANY  SUCH  ACTION  OR  SUIT  AND  AGREES  THAT SERVICE OF SUCH SUMMONS,
     COMPLAINT  AND  OTHER  PROCESS  MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
     ADDRESSED  TO  THE COMPANY AT THE ADDRESS SET FORTH IN SECTION 9.9 AND THAT
     SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF THE COMPANY'S
     ACTUAL  RECEIPT  THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS,
     PROPER  POSTAGE  PREPAID.

          (c)  THE  PARTIES  DESIRE  THAT  THEIR DISPUTES BE RESOLVED BY A JUDGE
     APPLYING  SUCH  APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION
     OF  THE  BENEFITS  OF  THE  JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES
     HERETO WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING
     BROUGHT  TO  RESOLVE  ANY  DISPUTE,  WHETHER  ARISING IN CONTRACT, TORT, OR
     OTHERWISE  BETWEEN  THE  PURCHASER  AND/OR  THE  COMPANY  ARISING  OUT  OF,
     CONNECTED  WITH,  RELATED  OR  INCIDENTAL  TO  THE RELATIONSHIP ESTABLISHED
     BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT, ANY OTHER RELATED AGREEMENT
     OR  THE  TRANSACTIONS  RELATED  HERETO  OR  THERETO.

          9.2  Severability.  Wherever possible each provision of this Agreement
               ------------
     and  the  Related  Agreements  shall be interpreted in such manner as to be
     effective  and  valid  under  applicable  law, but if any provision of this
     Agreement  or  any  Related  Agreement shall be prohibited by or invalid or
     illegal  under  applicable  law  such provision shall be ineffective to the
     extent  of  such  prohibition  or  invalidity  or  illegality,  without
     invalidating  the  remainder  of such provision or the remaining provisions
     thereof  which  shall  not  in  any  way  be  affected or impaired thereby.

          9.3  Survival.  The  representations,  warranties,  covenants  and
               --------
     agreements  made  herein  shall  survive  any  investigation  made  by  the
     Purchaser  and  the  closing of the transactions contemplated hereby to the
     extent  provided therein. All statements as to factual matters contained in
     any  certificate  or  other  instrument  delivered  by  or on behalf of the
     Company  pursuant  hereto  in connection with the transactions contemplated
     hereby  shall be deemed to be representations and warranties by the Company

<PAGE>

     hereunder  solely  as  of  the  date of such certificate or instrument. All
     indemnities  set  forth  herein  shall  survive the execution, delivery and
     termination  of this Agreement and the Note and the making and repayment of
     the  obligations  arising  hereunder,  under  the  Note and under the other
     Related  Agreements.

          9.4  Successors.  Except  as  otherwise expressly provided herein, the
               ----------
     provisions  hereof  shall inure to the benefit of, and be binding upon, the
     successors,  heirs, executors and administrators of the parties hereto. The
     Purchaser  shall  not  be permitted to assign its rights hereunder or under
     any  Related  Agreement  to  a competitor of the Company unless an Event of
     Default  (as  defined  in  the  Note)  has  occurred  and  is  continuing.

          9.5  Entire  Agreement;  Maximum Interest. This Agreement, the Related
               ------------------------------------
     Agreements,  the  exhibits  and  schedules hereto and thereto and the other
     documents  delivered  pursuant  hereto  constitute  the  full  and  entire
     understanding and agreement between the parties with regard to the subjects
     hereof  and no party shall be liable or bound to any other in any manner by
     any  representations,  warranties,  covenants  and  agreements  except  as
     specifically  set  forth  herein  and  therein.  Nothing  contained in this
     Agreement,  any  Related Agreement or in any document referred to herein or
     delivered  in  connection  herewith shall be deemed to establish or require
     the payment of a rate of interest or other charges in excess of the maximum
     rate permitted by applicable law. In the event that the rate of interest or
     dividends required to be paid or other charges hereunder exceed the maximum
     rate permitted by such law, any payments in excess of such maximum shall be
     credited  against  amounts  owed  by  the Company to the Purchaser and thus
     refunded  to  the  Company.

          9.6  Amendment  and  Waiver.
               ----------------------

          (a)  This  Agreement  may be amended or modified only upon the written
     consent  of  the  Company  and  the  Purchaser.

          (b)  The  obligations  of  the Company and the rights of the Purchaser
     under  this  Agreement  may  be waived only with the written consent of the
     Purchaser.

          (c)  The  obligations  of  the Purchaser and the rights of the Company
     under  this  Agreement  may  be waived only with the written consent of the
     Company.

          9.7  Delays  or  Omissions.  It is agreed that no delay or omission to
               ---------------------
     exercise any right, power or remedy accruing to any party, upon any breach,
     default  or  noncompliance  by  another  party  under this Agreement or the
     Related Agreements, shall impair any such right, power or remedy, nor shall
     it  be  construed  to  be  a  waiver  of  any  such  breach,  default  or
     noncompliance, or any acquiescence therein, or of or in any similar breach,
     default  or  noncompliance thereafter occurring. All remedies, either under
     this  Agreement  or the Related Agreements, by law or otherwise afforded to
     any  party,  shall  be  cumulative  and  not  alternative.

          9.8  Notices.  All notices required or permitted hereunder shall be in
               -------
     writing  and  shall  be  deemed  effectively  given:

          (a)  upon  personal  delivery  to  the  party  to  be  notified;

<PAGE>

          (b)  when  sent  by confirmed facsimile if sent during normal business
     hours  of  the  recipient,  if  not,  then  on  the  next  business  day;

          (c)  three  (3)  business days after having been sent by registered or
     certified  mail,  return  receipt  requested,  postage  prepaid;  or

          (d)  one  (1) day after deposit with a nationally recognized overnight
     courier,  specifying  next  day  delivery,  with  written  verification  of
     receipt.

All  communications  shall  be  sent  as  follows:

If to the Company, to:            Texaurus  Energy,  Inc.
                                  2411  Fountainview,  #120
                                  Houston,  Texas  77057

                                  Attention:  Chief  Financial  Officer
                                  Facsimile:  604-683-2883

                                  with a copy to:

                                  David M. Loev, Esq.
                                  Attorney at Law
                                  2777 Allen Parkway
                                  Suite 1000
                                  Houston, Texas 77019

                                  Attention:  David Loev, Esq.
                                  Facsimile:  713-524-4122

If to the Purchaser, to:          Laurus Master Fund, Ltd.
                                  c/o M&C Corporate Services Limited
                                  P.O.  Box 309 GT
                                  Ugland House
                                  George Town
                                  South Church Street
                                  Grand Cayman, Cayman Islands
                                  Facsimile:  345-949-8080

                                  with a copy to:

                                  John E.  Tucker, Esq.
                                  825 Third Avenue 14th Floor
                                  New York, New York 10022
                                  Facsimile:  212-541-4434

                                  and to:

                                  Scott J. Giordano, Esq.
                                  Loeb & Loeb LLP
                                  345 Park Avenue
                                  New York, New York 10154
                                  Facsimile:  212-407-4990

or  at  such  other  address  as  the  Company or the Purchaser may designate by
written  notice  to  the  other  parties  hereto  given  in accordance herewith.

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

          9.10  Titles and Subtitles. The titles of the sections and subsections
                --------------------
     of  this  Agreement are for convenience of reference only and are not to be
     considered  in  construing  this  Agreement.

          9.11  Facsimile  Signatures;  Counterparts.  This  Agreement  may  be
                ------------------------------------
     executed by facsimile signatures and in any number of counterparts, each of
     which  shall be an original, but all of which together shall constitute one
     agreement.

          9.12  Broker's Fees. Except as set forth on Schedule 9.12 hereof, each
                -------------
     party  hereto  represents  and  warrants  that no agent, broker, investment
     banker,  person  or firm acting on behalf of or under the authority of such
     party  hereto is or will be entitled to any broker's or finder's fee or any
     other commission directly or indirectly in connection with the transactions
     contemplated  herein.  Each  party  hereto further agrees to indemnify each
     other party for any claims, losses or expenses incurred by such other party
     as  a  result  of  the  representation  in  this Section 9.12 being untrue.

          9.13  Construction.  Each  party  acknowledges  that its legal counsel
                ------------
     participated  in  the  preparation  of  this  Agreement  and  the  Related
     Agreements  and,  therefore,  stipulates that the rule of construction that
     ambiguities  are  to  be  resolved  against the drafting party shall not be
     applied in the interpretation of this Agreement or any Related Agreement to
     favor  any  party  against  the  other.

             [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK

<PAGE>

     IN  WITNESS  WHEREOF,  the  parties  hereto  have  executed  the SECURITIES
PURCHASE  AGREEMENT  as  of  the  date  set forth in the first paragraph hereof.

COMPANY:                           PURCHASER:

TEXAURUS  ENERGY,  INC.            LAURUS  MASTER  FUND,  LTD.

By:/s/ Frank Jacobs                By: /s/ Eugene Grin
   ----------------------             -------------------------
Name: Frank A. Jacobs              Name: Eugene Grin
     --------------------               -----------------------
Title: Director                    Title: Director
      -------------------                ----------------------

<PAGE>