EXHIBIT 10.1


                                 GENETHERA, INC.
    SHARES OF SERIES A CONVERTIBLE PREFERRED STOCK AND COMMON STOCK WARRANTS

                             SUBSCRIPTION AGREEMENT

                                                                January 18, 2005

Mercator Advisory Group LLC
Mercator Momentum Fund, LP
Mercator Momentum Fund III, LP
Monarch Pointe Fund, Ltd.
555 South Flower Street, Suite 4200
Los Angeles, California 90071

Ladies and Gentlemen:

GeneThera,  Inc., a Florida  corporation  (the  "COMPANY"),  hereby confirms its
agreement with Mercator  Momentum Fund, LP, Mercator  Momentum Fund III, LP, and
Monarch Pointe Fund, Ltd. (collectively, the "PURCHASERS") and Mercator Advisory
Group, LLC ("MAG"), as set forth below.

         1.  The  Securities.   Subject  to  the  terms  and  conditions  herein
contained, the Company proposes to issue and sell to the Purchasers an aggregate
of: (a) Eleven Thousand  (11,000)  shares of its Series A Convertible  Preferred
Stock (the  "SERIES A STOCK"),  which  shall be  convertible  into  shares  (the
"CONVERSION  SHARES") of the  Company's  Common  Stock (the  "COMMON  STOCK") in
accordance  with the formula  set forth in the  Articles  of  Amendment  further
described  below  and (b)  Five  Hundred  Ninety-Seven  Thousand  Eight  Hundred
Twenty-Six  (597,826)  warrants,  substantially  in the form attached  hereto at
Exhibit A (the "WARRANTS"),  to acquire up to Five Hundred Ninety-Seven Thousand
Eight Hundred Twenty-Six (597,826) shares of Common Stock (the "WARRANT SHARES")
at an exercise price of $0.92 per share. The rights,  preferences and privileges
of the Series A Stock are as set forth in the  Articles  of  Amendment  as filed
with  the  Secretary  of  State  of the  State  of  Florida  (the  "ARTICLES  OF
AMENDMENT")  in the form attached  hereto as Exhibit B. The number of Conversion
Shares and Warrant Shares that any Purchaser may acquire at any time are subject
to limitation in the Articles of Amendment and in the Warrants, respectively, so
that the aggregate  number of shares of Common Stock of which such Purchaser and
all persons affiliated with such Purchaser have beneficial ownership (calculated
pursuant to Rule 13d-3 of the Securities  Exchange Act of 1934, as amended) does
not at any time exceed 9.99% of the Company's then outstanding Common Stock.

         The Series A Stock and the Warrants are sometimes  herein  collectively
referred to as the  "SECURITIES."  This  Agreement,  the Articles of  Amendment,
Registration  Rights  Agreement and the Warrant  Agreements are sometimes herein
collectively referred to as the "TRANSACTION DOCUMENTS."


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         The Securities will be offered and sold to the Purchasers  without such
offers and sales being  registered  under the Securities Act of 1933, as amended
(together  with  the  rules  and  regulations  of the  Securities  and  Exchange
Commission  (the  "SEC")  promulgated  thereunder,  the  "SECURITIES  ACT"),  in
reliance on exemptions therefrom.

         In  connection  with the sale of the  Securities,  the Company has made
available  (including  electronically  via the SEC's EDGAR system) to Purchasers
its periodic and current reports, forms,  schedules,  proxy statements and other
documents  (including  exhibits  and  all  other  information   incorporated  by
reference)  filed with the SEC under the  Securities  Exchange  Act of 1934,  as
amended (the "EXCHANGE  ACT").  These  reports,  forms,  schedules,  statements,
documents,   filings  and  amendments,  are  collectively  referred  to  as  the
"DISCLOSURE DOCUMENTS." All references in this Agreement to financial statements
and schedules and other information which is "contained," "included" or "stated"
in the Disclosure Documents (or other references of like import) shall be deemed
to mean and include all such  financial  statements  and  schedules,  documents,
exhibits  and  other  information  which is  incorporated  by  reference  in the
Disclosure Documents.

         2.  Representations and Warranties of the Company.  Except as set forth
on the Disclosure Schedule (the "DISCLOSURE  SCHEDULE") delivered by the Company
to Purchasers  on the Closing Date (as defined in Section 3 below),  the Company
represents and warrants to and agrees with Purchasers and MAG as follows:

                  (a) The  Disclosure  Documents  did not at the time of filing,
contain any untrue statement of a material fact or omit to state a material fact
necessary  to make the  statements  therein,  in the light of the  circumstances
under which they were made, not  misleading.  The  Disclosure  Documents and the
documents incorporated or deemed to be incorporated by reference therein, at the
time they were filed with the SEC,  complied in all material  respects  with the
requirements  of the Securities Act and/or the Exchange Act, as the case may be,
as applicable.

                  (b) Schedule A attached  hereto sets forth a complete  list of
the  subsidiaries of the Company (the  "SUBSIDIARIES").  Each of the Company and
its  Subsidiaries  has been duly  incorporated  and each of the  Company and the
Subsidiaries  is validly  existing in good standing as a  corporation  under the
laws of its jurisdiction of  incorporation,  with the requisite  corporate power
and authority to own its properties and conduct its business as now conducted as
described in the Disclosure  Documents and is duly qualified to do business as a
foreign  corporation  in good  standing  in all  other  jurisdictions  where the
ownership or leasing of its  properties or the conduct of its business  requires
such  qualification,  except  where the  failure to be so  qualified  would not,
individually  or in  the  aggregate,  have  a  material  adverse  effect  on the
business,  condition (financial or other),  properties, or results of operations
of the  Company  and the  Subsidiaries,  taken as a whole  (any  such  event,  a
"MATERIAL  ADVERSE  EFFECT");  as of the Closing Date, the Company will have the
authorized,  issued and  outstanding  capitalization  set forth in on Schedule B


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attached  hereto  (the  "COMPANY  CAPITALIZATION");  except  as set forth in the
Disclosure   Documents  or  on  Schedule  A,  the  Company  does  not  have  any
subsidiaries  or own directly or  indirectly  any of the capital  stock or other
equity or long-term debt  securities of or have any equity interest in any other
person;  all of the  outstanding  shares of capital stock of the Company and the
Subsidiaries  have been duly authorized and validly  issued,  are fully paid and
non-assessable  and were not issued in  violation of any  preemptive  or similar
rights; except as set forth in the Disclosure Documents,  all of the outstanding
shares of capital stock of the Subsidiaries  are owned,  directly or indirectly,
by the Company;  except as set forth in the Disclosure  Documents or on Schedule
B, no  options,  warrants or other  rights to  purchase  from the Company or any
Subsidiary,  agreements or other obligations of the Company or any Subsidiary to
issue or other rights to convert any obligation into, or exchange any securities
for,  shares of capital  stock of or  ownership  interests in the Company or any
Subsidiary are outstanding;  and except as set forth in the Disclosure Documents
or on Schedule C, there is no agreement,  understanding or arrangement among the
Company or any Subsidiary and each of their respective stockholders or any other
person  relating to the  ownership or  disposition  of any capital  stock of the
Company or any  Subsidiary  or the  election of  directors of the Company or any
Subsidiary or the governance of the Company's or any Subsidiary's  affairs, and,
if any, such agreements, understandings and arrangements will not be breached or
violated as a result of the  execution and delivery of, or the  consummation  of
the transactions contemplated by, the Transaction Documents.

                  (c)  The  Company  has  the  requisite   corporate  power  and
authority to execute,  deliver and perform its obligations under the Transaction
Documents.  Each  of  the  Transaction  Documents  has  been  duly  and  validly
authorized by the Company and, when executed and delivered by the Company,  will
constitute a valid and legally  binding  agreement  of the Company,  enforceable
against  the  Company in  accordance  with its terms  except as the  enforcement
thereof may be limited by (A) bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws now or hereafter in effect relating
to or affecting  creditors' rights generally or (B) general principles of equity
and the  discretion  of the court before which any  proceeding  therefore may be
brought (regardless of whether such enforcement is considered in a proceeding at
law or in equity).

                  (d)  The  Series  A Stock  and the  Warrants  have  been  duly
authorized  and,  when  issued  upon  payment  thereof in  accordance  with this
Agreement,  will have been validly issued,  fully paid and  non-assessable.  The
Conversion  Shares issuable have been duly  authorized and validly  reserved for
issuance,  and when issued upon  conversion  of the Series A Stock in accordance
with the terms of the  Articles of  Amendment,  will have been  validly  issued,
fully paid and non-assessable.  The Warrant Shares have been duly authorized and
validly reserved for issuance,  and when issued upon exercise of the Warrants in
accordance with the terms thereof, will have been validly issued, fully paid and
non-assessable.  The Common  Stock of the Company  conforms  to the  description
thereof contained in the Disclosure  Documents.  The stockholders of the Company
have no preemptive or similar rights with respect to the Common Stock.


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                  (e)   No   consent,    approval,    authorization,    license,
qualification, exemption or order of any court or governmental agency or body or
third party is required for the performance of the Transaction  Documents by the
Company  or for  the  consummation  by the  Company  of any of the  transactions
contemplated  thereby, or the application of the proceeds of the issuance of the
Securities as described in this Agreement, except for such consents,  approvals,
authorizations, licenses, qualifications,  exemptions or orders (i) as have been
obtained  on or  prior  to the  Closing  Date,  (ii) as are not  required  to be
obtained on or prior to the Closing Date that will be obtained when required, or
(iii) the failure to obtain which would not,  individually  or in the aggregate,
have a Material Adverse Effect.

                  (f) Except as set forth on  Schedule D, none of the Company or
the  Subsidiaries is (i) in material  violation of its articles of incorporation
or bylaws (or similar organizational  document),  (ii) in breach or violation of
any statute, judgment, decree, order, rule or regulation applicable to it or any
of its properties or assets, which breach or violation would, individually or in
the aggregate,  have a Material Adverse Effect,  or (iii) except as described in
the  Disclosure  Documents,  in default (nor has any event  occurred  which with
notice  or  passage  of time,  or  both,  would  constitute  a  default)  in the
performance or observance of any  obligation,  agreement,  covenant or condition
contained in any contract,  indenture,  mortgage, deed of trust, loan agreement,
note, lease, license,  franchise agreement,  permit, certificate or agreement or
instrument  to which it is a party or to  which  it is  subject,  which  default
would, individually or in the aggregate, have a Material Adverse Effect.

                  (g) The execution,  delivery and performance by the Company of
the  Transaction   Documents  and  the   consummation  by  the  Company  of  the
transactions  contemplated thereby and the fulfillment of the terms thereof will
not (a)  violate,  conflict  with or  constitute  or  result in a breach of or a
default under (or an event that,  with notice or lapse of time,  or both,  would
constitute a breach of or a default under) any of (i) the terms or provisions of
any contract,  indenture,  mortgage, deed of trust, loan agreement, note, lease,
license, franchise agreement,  permit, certificate or agreement or instrument to
which any of the Company or the Subsidiaries is a party or to which any of their
respective  properties or assets are subject, (ii) the Articles of Incorporation
or bylaws of any of the Company or the Subsidiaries  (or similar  organizational
document) or (iii) any statute,  judgment,  decree, order, rule or regulation of
any court or governmental  agency or other body applicable to the Company or the
Subsidiaries  or any of their  respective  properties or assets or (b) result in
the  imposition  of any lien upon or with  respect to any of the  properties  or
assets  now  owned  or  hereafter   acquired  by  the  Company  or  any  of  the
Subsidiaries;   which  violation,  conflict,  breach,  default  or  lien  would,
individually or in the aggregate, have a Material Adverse Effect.

                  (h) The audited consolidated  financial statements included in
the Disclosure  Documents  present fairly the consolidated  financial  position,
results of  operations,  cash flows and changes in  shareholders'  equity of the
entities,  at the dates and for the  periods to which they  relate and have been
prepared in accordance with generally accepted accounting  principles applied on
a consistent basis; the interim  un-audited  consolidated  financial  statements
included in the Disclosure  Documents present fairly the consolidated  financial
position, results of operations and cash flows of the entities, at the dates and
for the periods to which they relate subject to year-end audit  adjustments  and


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have been prepared in accordance with generally accepted  accounting  principles
applied on a consistent basis with the audited consolidated financial statements
included  therein;  the selected  financial and statistical data included in the
Disclosure  Documents present fairly the information shown therein and have been
prepared  and  compiled  on  a  basis  consistent  with  the  audited  financial
statements included therein, except as otherwise stated therein; and each of the
auditors previously engaged by the Company or to be engaged in the future by the
Company  is an  independent  certified  public  accountant  as  required  by the
Securities Act for an offering registered thereunder.

                  (i) Except as described in the Disclosure Documents,  there is
not pending or, to the knowledge of the Company,  threatened  any action,  suit,
proceeding, inquiry or investigation, governmental or otherwise, to which any of
the  Company  or the  Subsidiaries  is a  party,  or to which  their  respective
properties or assets are subject,  before or brought by any court, arbitrator or
governmental agency or body, that, if determined adversely to the Company or any
such  Subsidiary,  would,  individually  or in the  aggregate,  have a  Material
Adverse Effect or that seeks to restrain, enjoin, prevent the consummation of or
otherwise  challenge the issuance or sale of the Securities to be sold hereunder
or the application of the proceeds therefrom or the other transactions described
in the Disclosure Documents.

                  (j) The Company and the  Subsidiaries  own or possess adequate
licenses or other rights to use all patents,  trademarks,  service marks,  trade
names, copyrights and know-how that are necessary to conduct their businesses as
described in the Disclosure  Documents.  None of the Company or the Subsidiaries
has  received  any  written  notice  of  infringement  of (or  knows of any such
infringement  of)  asserted  rights  of  others  with  respect  to any  patents,
trademarks,  service  marks,  trade names,  copyrights or know-how that, if such
assertion of infringement or conflict were sustained,  would, individually or in
the aggregate, have a Material Adverse Effect.

                  (k) Each of the Company  and the  Subsidiaries  possesses  all
licenses,   permits,   certificates,   consents,  orders,  approvals  and  other
authorizations  from,  and has made  all  declarations  and  filings  with,  all
federal,  state, local and other governmental  authorities,  all self-regulatory
organizations and all courts and other tribunals presently required or necessary
to own or lease,  as the case may be, and to operate its  respective  properties
and to carry on its respective  businesses as now or proposed to be conducted as
set forth in the Disclosure Documents  ("PERMITS"),  except where the failure to
obtain such Permits would not, individually or in the aggregate, have a Material
Adverse  Effect and none of the Company or the  Subsidiaries  has  received  any
notice of any  proceeding  relating to  revocation or  modification  of any such
Permit,  except as described in the  Disclosure  Documents and except where such
revocation or modification would not,  individually or in the aggregate,  have a
Material Adverse Effect.

                  (l) Subsequent to the respective dates as of which information
is given in the Disclosure  Documents and except as described  therein,  (i) the
Company and the  Subsidiaries  have not  incurred any  material  liabilities  or
obligations, direct or contingent, or entered into any material transactions not
in the ordinary course of business or (ii) the Company and the Subsidiaries have
not purchased any of their  respective  outstanding  capital stock, or declared,


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paid or otherwise made any dividend or  distribution of any kind on any of their
respective  capital stock or otherwise  (other than, with respect to any of such
Subsidiaries, the purchase of capital stock by the Company), (iii) there has not
been any material  increase in the long-term  indebtedness of the Company or any
of the  Subsidiaries,  (iv)  there  has not  occurred  any  event or  condition,
individually or in the aggregate,  that has a Material  Adverse Effect,  and (v)
the  Company  and the  Subsidiaries  have not  sustained  any  material  loss or
interference  with respect to their  respective  businesses or  properties  from
fire, flood, hurricane,  earthquake,  accident or other calamity, whether or not
covered by  insurance,  or from any labor  dispute or any legal or  governmental
proceeding.

                  (m) There are no material  legal or  governmental  proceedings
nor are  there  any  material  contracts  or  other  documents  required  by the
Securities  Act to be described in a  prospectus  that are not  described in the
Disclosure Documents.  Except as described in the Disclosure Documents,  none of
the  Company  or the  Subsidiaries  is in  default  under  any of the  contracts
described  in the  Disclosure  Documents,  has received a notice or claim of any
such default or has knowledge of any breach of such contracts by the other party
or  parties  thereto,  except  for such  defaults  or  breaches  as  would  not,
individually or in the aggregate, have a Material Adverse Effect.

                  (n)  Each of the  Company  and the  Subsidiaries  has good and
marketable title to all real property  described in the Disclosure  Documents as
being owned by it and good and marketable  title to the leasehold  estate in the
real  property  described  therein as being  leased by it, free and clear of all
liens, charges, encumbrances or restrictions, except, in each case, as described
in the  Disclosure  Documents  or  such as  would  not,  individually  or in the
aggregate,  have a Material Adverse Effect.  All material leases,  contracts and
agreements  to which the  Company  or any of the  Subsidiaries  is a party or by
which any of them is bound are valid and enforceable  against the Company or any
such  Subsidiary,  are, to the knowledge of the Company,  valid and  enforceable
against the other party or parties thereto and are in full force and effect.

                  (o) Each of the  Company  and the  Subsidiaries  has filed all
necessary  federal,  state and foreign income and franchise tax returns,  except
where the  failure to so file such  returns  would not,  individually  or in the
aggregate,  have a Material Adverse Effect,  and has paid all taxes shown as due
thereon;  and other than tax deficiencies which the Company or any Subsidiary is
contesting in good faith and for which  adequate  reserves have been provided in
accordance  with  generally  accepted  accounting  principles,  there  is no tax
deficiency  that has been asserted  against the Company or any  Subsidiary  that
would, individually or in the aggregate, have a Material Adverse Effect.

                  (p) None of the Company or the Subsidiaries is, or immediately
after the Closing Date will be, required to register as an "investment  company"
or a company  "controlled by" an "investment  company" within the meaning of the
Investment Company Act of 1940, as amended (the "INVESTMENT COMPANY ACT").


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                  (q)  None  of the  Company  or  the  Subsidiaries  or,  to the
knowledge of any of such entities'  directors,  officers,  employees,  agents or
controlling persons, has taken, directly or indirectly,  any action designed, or
that might  reasonably be expected,  to cause or result in the  stabilization or
manipulation of the price of the Common Stock.

                  (r)  None of the  Company,  the  Subsidiaries  or any of their
respective  Affiliates  (as  defined in Rule  501(b) of  Regulation  D under the
Securities Act) directly,  or through any agent,  engaged in any form of general
solicitation  or general  advertising  (as those terms are used in  Regulation D
under the Securities  Act) in connection  with the offering of the Securities or
engaged in any other  conduct that would cause such  offering to be constitute a
public  offering  within  the  meaning of Section  4(2) of the  Securities  Act.
Assuming the accuracy of the representations and warranties of the Purchasers in
Section 6 hereof,  it is not  necessary in connection  with the offer,  sale and
delivery of the Securities to the Purchasers in the manner  contemplated by this
Agreement to register any of the Securities under the Securities Act.

                  (s)  There  is no  strike,  labor  dispute,  slowdown  or work
stoppage with the employees of the Company or any of the  Subsidiaries  which is
pending  or,  to the  knowledge  of  the  Company  or  any of the  Subsidiaries,
threatened.

                  (t) Each of the Company and the  Subsidiaries  carries general
liability  insurance  coverage  comparable  to other  companies  of its size and
similar business.

                  (u)  Each  of  the  Company  and  the  Subsidiaries  maintains
internal  accounting  controls  which  provide  reasonable  assurance  that  (A)
transactions  are executed in accordance with  management's  authorization,  (B)
transactions  are recorded as necessary to permit  preparation  of its financial
statements  and to maintain  accountability  for its  assets,  (C) access to its
material assets is permitted only in accordance with management's  authorization
and (D) the values and amounts  reported  for its  material  assets are compared
with its existing assets at reasonable intervals.

                  (v) Except for a due diligence  fee of $88,000  payable to MAG
(the "DUE DILIGENCE FEE"), the Company does not know of any claims for services,
either in the nature of a finder's fee or financial  advisory  fee, with respect
to the  offering of the  Securities  and the  transactions  contemplated  by the
Transaction Documents.

                  (w)  The  Common  Stock  is  traded  on  the  Over-the-Counter
Bulletin Board (the "OTCBB").  Except as described in the Disclosure  Documents,
the  Company  currently  is not in  violation  of, and the  consummation  of the
transactions  contemplated  by the Transaction  Documents will not violate,  any
rule of the National Association of Securities Dealers.

                  (x) The  Company is eligible to use SB-2 for the resale of the
Conversion  Shares  and the  Warrant  Shares by  Purchasers  or their  permitted
transferees and the Warrant Shares by Purchasers, MAG or their transferees.  The
Company  has no reason to  believe  that it is not  capable  of  satisfying  the
registration or qualification requirements (or an exemption therefrom) necessary


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to permit the resale of the  Conversion  Shares and the Warrant Shares under the
securities or "blue sky" laws of any jurisdiction within the United States.

                  (y) Set forth on Schedule E is the  Company's  intended use of
the proceeds from this transaction.

                  (z) Except as set forth on Schedule F, none of the officers or
directors of the Company (i) has been convicted of any crime (other than traffic
violations  or  misdemeanors   not  involving   fraud)  or  is  currently  under
investigation  or indictment for any such crime,  (ii) has been found by a court
or governmental  agency to have violated any securities or commodities law or to
have  committed  fraud or is currently a party to any legal  proceeding in which
either  is  alleged,  (iii)  has been the  subject  of a  proceeding  under  the
bankruptcy  laws or any  similar  state  laws,  or  (iv)  has  been an  officer,
director,  general  partner,  or managing member of an entity which has been the
subject of such a proceeding.

                  (aa) The  Company's  most recent SEC review of the  Disclosure
Documents commenced on September 13, 2004 and was concluded on December 1, 2004.

         3. Purchase, Sale and Delivery of the Securities.

                  (a) Issuance of Series A Stock and  Warrants.  On the basis of
the representations,  warranties,  agreements and covenants herein contained and
subject to the terms and  conditions  herein set forth,  the  Company  agrees to
issue and sell to the  Purchasers,  and  Purchasers  agree to purchase  from the
Company,  11,000  shares of Series A Stock at $100.00  per share in the  amounts
shown on the signature page hereto.  In connection with the purchase and sale of
Series A Stock,  for no additional  consideration,  the  Purchasers and MAG will
receive  Warrants to purchase up to an aggregate  of Five  Hundred  Ninety-Seven
Thousand Eight Hundred Twenty-Six  (597,826) shares of Common Stock as set forth
on the  signature  page  hereof,  subject  to  adjustment  as set  forth  in the
Warrants.

                  (b) Closing. The closing of the transactions  described herein
(the "CLOSING") shall take place at a time and on a date (the "CLOSING DATE") to
be  specified  by the  parties,  which will be no later than 5:00 p.m.  (Pacific
time) on January 18, 2005.  On the Closing  Date,  the Company shall deliver (a)
certificates  in definitive form for the Series A Stock in the names and amounts
set forth on the signature page hereto,  (b) Warrants,  in the names and amounts
set  forth  on the  signature  page  hereto,  (c)  the  Subscription  Agreement,
Certificate of Designation and Registration Rights Agreement, each duly executed
on behalf of the  Company,  and (d) the Opinion of Counsel in the form  attached
hereto as Exhibit C. On the Closing Date,  Purchasers shall deliver the purchase
price or  $1,100,000  by wire  transfer of  immediately  available  funds to the
Company, and (ii) the Subscription  Agreement and Registration Rights Agreement,
each duly executed on behalf of the  Purchasers  and MAG. The Closing will occur
when all  documents  and  instruments  necessary  or  appropriate  to effect the
transactions  contemplated  herein are  exchanged by the parties and all actions
taken at the Closing will be deemed to be taken simultaneously.


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                  (c)  Within  three (3)  trading  days after the  Closing,  the
Company  shall  deliver  to MAG,  the Due  Diligence  Fee,  and the  legal  fees
contemplated by Section 13 hereof in the amount of $10,000.

4. Certain Covenants of the Company.  The Company covenants and agrees with each
Purchaser as follows:

                  (a) None of the  Company or any of its  Affiliates  will sell,
offer for sale or solicit offers to buy or otherwise negotiate in respect of any
"security" (as defined in the Securities Act) which could be integrated with the
sale of the  Securities in a manner which would require the  registration  under
the Securities Act of the Securities.

                  (b) The  Company  will not  become,  at any time  prior to the
expiration  of three  years  after the  Closing  Date,  an  open-end  investment
company,  unit investment trust,  closed-end  investment  company or face-amount
certificate company that is or is required to be registered under the Investment
Company Act.

                  (c) None of the proceeds of the Series A Stock will be used to
reduce or retire  any  insider  note or  convertible  debt held by an officer or
director of the Company.

                  (d) Subject to Section 10 of this  Agreement,  the  Conversion
Shares and the Warrant Shares will be eligible for trading on the OTCBB, or such
market  on which  the  Company's  shares  are  subsequently  listed  or  traded,
immediately following the effectiveness of the Registration Statement.

                  (e) The Company will use commercially reasonable efforts to do
and  perform  all  things  required  to be done and  performed  by it under this
Agreement  and the other  Transaction  Documents  and to satisfy all  conditions
precedent  on its part to the  obligations  of the  Purchasers  to purchase  and
accept delivery of the Securities.

                  (f)  Commencing on the Closing Date and  continuing  until the
effectiveness of the Registration  Statement,  the Purchasers shall have a right
of first  refusal on any financing in which the Company is the issuer of debt or
equity  securities  (excluding  debt  instruments  executed in  connection  with
commercial bank loans or lines of credit or equity securities issued to officer,
directors,  employees  agents or  consultants  of the  Company in their roles as
such).

         5.  Conditions of the Purchasers'  Obligations.  The obligation of each
Purchaser to purchase  and pay for the  Securities  is subject to the  following
conditions unless waived in writing by the Purchaser:

                  (a)  The   representations   and  warranties  of  the  Company
contained in this Agreement  shall be true and correct in all material  respects
(other  than  representations  and  warranties  with a Material  Adverse  Effect
qualifier,  which shall be true and correct as written) on and as of the Closing
Date;  the  Company  shall  have  complied  in all  material  respects  with all


                                       9
<PAGE>

agreements and satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date.

                  (b) None of the issuance and sale of the  Securities  pursuant
to this Agreement or any of the  transactions  contemplated  by any of the other
Transaction  Documents shall be enjoined  (temporarily  or  permanently)  and no
restraining  order or other  injunctive  order shall have been issued in respect
thereof; and there shall not have been any legal action,  order, decree or other
administrative proceeding instituted or, to the Company's knowledge,  threatened
against  the Company or against any  Purchaser  relating to the  issuance of the
Securities or any  Purchaser's  activities in connection  therewith or any other
transactions  contemplated by this Agreement, the other Transaction Documents or
the Disclosure Documents.

                  (c) The Purchasers shall have received certificates, dated the
Closing Date and signed by the Chief  Executive  Officer and the Chief Financial
Officer of the Company, to the effect of paragraphs 5(a) and (b).

                  (d) The  Purchasers  shall have received an opinion of Eric P.
Littman,  P.A.  with  respect to the  authorization  of the Series A Stock,  the
Conversion  Shares,  the  Warrants  and the Warrant  Shares and other  customary
matters in the form attached hereto as Exhibit C.

         6. Representations and Warranties of the Purchasers.

                  (a) Each  Purchaser  and MAG  represents  and  warrants to the
Company  that the  Securities  to be acquired  by it  hereunder  (including  the
Conversion  Shares and the Warrant Shares that it may acquire upon conversion or
exercise thereof, as the case may be) are being acquired for its own account for
investment and with no intention of  distributing  or reselling such  Securities
(including the Conversion Shares and the Warrant Shares that it may acquire upon
conversion  or  exercise  thereof,  as the case may be) or any part  thereof  or
interest  therein  in  any  transaction  which  would  be in  violation  of  the
securities  laws of the United  States of America or any State.  Nothing in this
Agreement,  however,  shall prejudice or otherwise limit a Purchaser's  right to
sell or  otherwise  dispose  of all or any  part of such  Conversion  Shares  or
Warrant Shares under an effective  registration  statement  under the Securities
Act  and in  compliance  with  applicable  state  securities  laws or  under  an
exemption from such  registration.  By executing this Agreement,  each Purchaser
further represents that such Purchaser does not have any contract,  undertaking,
agreement  or   arrangement   with  any  person  to  sell,   transfer  or  grant
participation to any person with respect to any of the Securities.

                  (b) Each  Purchaser and MAG  understands  that the  Securities
(including the Conversion Shares and the Warrant Shares that it may acquire upon
conversion  or exercise  thereof,  as the case may be) have not been  registered
under the  Securities Act and may not be offered,  resold,  pledged or otherwise
transferred  except (a) pursuant to an  exemption  from  registration  under the
Securities  Act (and,  if  requested  by the  Company,  based upon an opinion of
counsel  acceptable  to the  Company) or pursuant to an  effective  registration


                                       10
<PAGE>

statement  under the  Securities  Act and (b) in accordance  with all applicable
securities laws of the states of the United States and other jurisdictions.

                  Each  Purchaser and MAG agrees to the  imprinting,  so long as
appropriate, of the following legend on the Securities (including the Conversion
Shares and the Warrant  Shares that it may acquire upon  conversion  or exercise
thereof, as the case may be):

         THE  SHARES  OF  STOCK  EVIDENCED  BY THIS  CERTIFICATE  HAVE  NOT BEEN
         REGISTERED UNDER THE U.S.  SECURITIES ACT OF 1933, AS AMENDED,  AND MAY
         NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED  ("TRANSFERRED")
         IN  THE  ABSENCE  OF  SUCH  REGISTRATION  OR  AN  APPLICABLE  EXEMPTION
         THEREFROM. IN THE ABSENCE OF SUCH REGISTRATION,  SUCH SHARES MAY NOT BE
         TRANSFERRED UNLESS, IF THE COMPANY REQUESTS, THE COMPANY HAS RECEIVED A
         WRITTEN OPINION FROM COUNSEL IN FORM AND SUBSTANCE  SATISFACTORY TO THE
         COMPANY STATING THAT SUCH TRANSFER IS BEING MADE IN COMPLIANCE WITH ALL
         APPLICABLE FEDERAL AND STATE SECURITIES LAWS.

                  The  legend  set forth  above may be  removed  if and when the
Conversion  Shares or the Warrant  Shares,  as the case may be, are  disposed of
pursuant to an effective  registration  statement under the Securities Act or in
the opinion of counsel to the Company  experienced  in the area of United States
Federal  securities  laws such legends are no longer  required under  applicable
requirements  of the  Securities  Act.  The Series A Stock,  the  Warrants,  the
Conversion  Shares and the  Warrant  Shares  shall  also bear any other  legends
required by applicable  Federal or state  securities  laws, which legends may be
removed  when in the  opinion  of  counsel  to the  Company  experienced  in the
applicable securities laws, the same are no longer required under the applicable
requirements  of such  securities  laws. The Company agrees that it will provide
each Purchaser,  upon request, with a substitute  certificate,  not bearing such
legend at such  time as such  legend is no  longer  applicable.  Each  Purchaser
agrees that, in  connection  with any transfer of the  Conversion  Shares or the
Warrant Shares by it pursuant to an effective  registration  statement under the
Securities  Act,  such  Purchaser  will  comply  with  all  prospectus  delivery
requirements  of the  Securities  Act.  The  Company  makes  no  representation,
warranty or agreement as to the availability of any exemption from  registration
under the Securities  Act with respect to any resale of the Series A Stock,  the
Warrants, the Conversion Shares or the Warrant Shares.

                  (c) Each Purchaser and MAG is an "accredited  investor" within
the meaning of Rule 501(a) of  Regulation D under the  Securities  Act.  Neither
Purchaser nor MAG learned of the opportunity to acquire  Securities or any other
security  issuable by the Company  through  any form of general  advertising  or
public solicitation.

                  (d) Each  Purchaser  and MAG  represents  and  warrants to the
Company that it has such  knowledge,  sophistication  and experience in business
and financial  matters so as to be capable of evaluating the merits and risks of
the  prospective  investment  in the  Securities,  having  been  represented  by
counsel,  and has so evaluated  the merits and risks of such  investment  and is
able to bear the economic risk of such  investment  and, at the present time, is
able to afford a complete loss of such investment.


                                       11
<PAGE>

                  (e) Each Purchaser represents and warrants to the Company that
(i) the  purchase  of the  Securities  to be  purchased  by it has been duly and
properly  authorized  and this Agreement has been duly executed and delivered by
it or on its behalf and constitutes the valid and legally binding  obligation of
the Purchaser,  enforceable  against the Purchaser in accordance with its terms,
subject  to  bankruptcy,   insolvency,   fraudulent  transfer,   reorganization,
moratorium  and similar laws of general  applicability  relating to or affecting
creditors'  rights  generally  and to general  principles  of  equity;  (ii) the
purchase of the  Securities  to be  purchased  by it does not  conflict  with or
violate its charter, by-laws or any law, regulation or court order applicable to
it; and (iii) the  purchase of the  Securities  to be  purchased  by it does not
impose any penalty or other onerous condition on the Purchaser under or pursuant
to any applicable law or governmental regulation.

                  (f) Each  Purchaser  and MAG  represents  and  warrants to the
Company that neither it nor any of its directors,  officers,  employees, agents,
partners, members, controlling persons or shareholders holding 5% or more of the
Common Stock  outstanding on the Closing Date, has taken or will take,  directly
or indirectly, any actions designed, or might reasonably be expected to cause or
result in the stabilization or manipulation of the price of the Common Stock.

                  (g)   Each   Purchaser   and  MAG   acknowledges   it  or  its
representatives  have reviewed the Disclosure Documents and further acknowledges
that it or its  representatives  have been afforded (i) the  opportunity  to ask
such  questions  as it has deemed  necessary  of, and to receive  answers  from,
representatives  of the  Company  concerning  the  terms and  conditions  of the
offering  of the  Securities  and the  merits  and  risks  of  investing  in the
Securities;  (ii) access to  information  about the  Company  and the  Company's
financial condition, results of operations, business, properties, management and
prospects  sufficient to enable it to evaluate its investment in the Securities;
and (iii)  the  opportunity  to obtain  such  additional  information  which the
Company possesses or can acquire without  unreasonable effort or expense that is
necessary to verify the accuracy and  completeness of the information  contained
in the Disclosure Documents.

                  (h) Each  Purchaser  and MAG  represents  and  warrants to the
Company that it has based its investment  decision  solely upon the  information
contained in the  Disclosure  Documents and such other  information  as may have
been provided to it or its  representatives  by the Company in response to their
inquiries,  and has not based its  investment  decision on any research or other
report  regarding  the  Company  prepared  by  any  third  party  ("THIRD  PARTY
REPORTS"). Each Purchaser understands and acknowledges that (i) the Company does
not  endorse  any Third  Party  Reports  and (ii) its actual  results may differ
materially from those projected in any Third Party Report.

                  (i) Each Purchaser and MAG understands and  acknowledges  that
(i)  any  forward-looking  information  included  in  the  Disclosure  Documents
supplied to Purchaser by the Company or its  management  is subject to risks and
uncertainties,  including  those  risks  and  uncertainties  set  forth  in  the
Disclosure  Documents;   and  (ii)  the  Company's  actual  results  may  differ
materially  from  those  projected  by the  Company  or its  management  in such
forward-looking information.


                                       12
<PAGE>

                  (j) Each Purchaser and MAG understands and  acknowledges  that
(i)  the  Securities  are  offered  and  sold  without  registration  under  the
Securities  Act in a  private  placement  that is exempt  from the  registration
provisions of the  Securities  Act and (ii) the  availability  of such exemption
depends in part on, and that the  Company and its  counsel  will rely upon,  the
accuracy and truthfulness of the foregoing  representations and Purchaser hereby
consents to such reliance.

         7. Covenants of Purchasers Not to Short Stock. Purchasers, on behalf of
themselves and their  affiliates,  hereby covenant and agree not to, directly or
indirectly,  offer to "short sell", contract to "short sell" or otherwise "short
sell" the securities of the Company,  including,  without limitation,  shares of
Common Stock that will be received as a result of the conversion of the Series A
Stock or the  exercise of the  Warrants.  The  Purchasers  and MAG, on behalf of
themselves and their  affiliates,  hereby covenant and agree not to, directly or
indirectly,  sell in the aggregate during any trading day shares of Common Stock
totaling more than 20% of the total shares of Common Stock traded on such day.

         8. Termination.

                  (a) This Agreement may be terminated in the sole discretion of
the Company by notice to each Purchaser if at the Closing Date:

                           (i) the  representations  and warranties  made by any
Purchaser in Section 6 are not true and correct in all material respects; or

                           (ii) as to the  Company,  the sale of the  Securities
hereunder (i) is prohibited or enjoined by any  applicable  law or  governmental
regulation  or (ii)  subjects the Company to any penalty,  or in its  reasonable
judgment,  other onerous  condition  under or pursuant to any  applicable law or
government  regulation that would materially  reduce the benefits to the Company
of the sale of the Securities to such Purchaser, so long as such regulation, law
or  onerous  condition  was  not in  effect  in such  form  at the  date of this
Agreement.

                  (b) This  Agreement  may be terminated by any Purchaser or MAG
by notice to the Company  given in the event that the Company shall have failed,
refused or been  unable to satisfy  all  material  conditions  on its part to be
performed or satisfied  hereunder on or prior to the Closing  Date,  or if after
the  execution  and  delivery of this  Agreement  and  immediately  prior to the
Closing Date,  trading in securities of the Company on the OTCBB shall have been
suspended.

                  (c) This Agreement may be terminated by mutual written consent
of all parties.

         9.  Registration.  Within 45 days after the Closing  Date,  the Company
shall prepare and file with the SEC a registration  statement (the "REGISTRATION
STATEMENT")  covering  the resale of the  maximum  number of  Conversion  Shares
issuable  upon  conversion  of  the  Series  A  Stock  and  the  Warrant  Shares
(collectively,  the "REGISTRABLE SECURITIES"),  as set forth in the Registration
Rights  Agreement  attached  hereto as Exhibit D. The Company shall use its best


                                       13
<PAGE>

efforts to ensure that the Registration  Statement is declared  effective by the
SEC within 120 days after filing the Registration Statement.

10.  Event of  Default.  If an Event of Default (as  defined  below)  occurs and
remains  uncured for a period of 5 days,  the  Purchasers and MAG shall have the
right to  exercise  any or all of the  rights  given to the  Purchasers  and MAG
relating to the Securities,  as further  described in the Articles of Amendment,
including  any  reductions  in the  conversion  price  of the  Series A Stock as
contemplated therein.

                  The Holder need not provide and the Company  hereby waives any
presentment,  demand,  protest or other  notice of any kind,  and the Holder may
immediately  and without  expiration of any grace period  enforce any and all of
its rights and remedies  hereunder and all other remedies  available to it under
applicable law. Such  declaration may be rescinded and annulled by Holder at any
time prior to payment  hereunder.  No such  rescission or annulment shall affect
any subsequent Event of Default or impair any right consequent thereon.

                  An "EVENT OF DEFAULT"  shall include (a) the  commencement  by
the Company of a voluntary case or proceeding  under the bankruptcy  laws or (b)
the Company's  failure to: (i) discharge or stay a bankruptcy  proceeding within
60  days  of such  action  being  taken  against  the  Company,  (ii)  file  the
Registration Statement with the SEC within 45 days after the Closing Date, (iii)
have the Registration  Statement  declared  effective by the SEC within 120 days
after the date of filing of the Registration Statement; (iv) maintain trading of
the Company's Common Stock on the OTCBB except for any periods when the stock is
listed on the NASDAQ Small Stock Market,  the NASDAQ National Stock Market,  the
AMEX or the NYSE,  (v) pay the expenses  referred to below or the Due  Diligence
Fee within three (3) days after the Closing;  or (vi) deliver to Purchasers,  or
Purchasers'  broker,  as directed,  Common Stock that  Purchasers have converted
within three (3) business days of such conversions.

IN THE EVENT THAT THE COMPANY FAILS TO FILE THE REGISTRATION  STATEMENT WITH THE
SEC  WITHIN 45 DAYS  AFTER THE  CLOSING  DATE,  AS A REMEDY FOR SUCH AN EVENT OF
DEFAULT,  COMPANY  SHALL  PAY  TO  PURCHASERS  ON A  PRO  RATA  BASIS  BASED  ON
INVESTMENT, IN CASH, $733 FOR EACH DAY THAT THE REGISTRATION STATEMENT FILING IS
DELAYED.  PURCHASERS AND COMPANY  ACKNOWLEDGE  AND AGREE THAT THEY HAVE MUTUALLY
DISCUSSED THE IMPRACTICALITY AND EXTREME DIFFICULTY OF FIXING THE ACTUAL DAMAGES
PURCHASERS  WOULD INCUR IN THE CASE OF SUCH AN EVENT OF  DEFAULT,  AND THAT AS A
RESULT OF SUCH  DISCUSSION  THE  PARTIES  AGREE  THAT $733 FOR EACH DAY THAT THE
REGISTRATION STATEMENT FILING IS DELAYED REPRESENTS A REASONABLE ESTIMATE OF THE
ACTUAL  DAMAGES  WHICH  PURCHASERS  WOULD  INCUR IN THE CASE OF SUCH AN EVENT OF
DEFAULT.  BY  SIGNING  IN  THE  SPACES  WHICH  FOLLOW,  PURCHASERS  AND  COMPANY
SPECIFICALLY  AND EXPRESSLY  AGREE TO ABIDE BY THE TERMS AND  PROVISIONS OF THIS
PARAGRAPH CONCERNING LIQUIDATED DAMAGES.


                                       14
<PAGE>

Purchasers:                               Company:
Mercator Momentum Fund, LP                GeneThera, Inc.
a California limited partnership          a Florida corporation

By:  Mercator Advisory Group LLC
Its: General Partner                      By: /s/ Antonio Milici
     /s/ David Firestone                      Antonio Milici
     David Firestone                          Chief Executive Officer
     Managing Member



Mercator Momentum Fund III, LP            Monarch Pointe Fund, Ltd.,
a California limited partnership          a British Virgin Islands International
                                          Business Company

By:  Mercator Advisory Group LLC          /s/  David Firestone
Its: General Partner                      By:  David Firestone
                                          Its: President
     /s/ David Firestone
     David Firestone
     Managing Member

11. Notices. All communications  hereunder shall be in writing and shall be hand
delivered,  mailed by first-class mail,  couriered by next-day air courier or by
facsimile and  confirmed in writing (i) if to the Company,  at the addresses set
forth below, or (ii) if to a Purchaser or MAG, to the address set forth for such
party on the signature page hereto.

                                            If to the Company:

                                            GeneThera, Inc.
                                            3930 Youngfield Street
                                            Wheat Ridge, CO  80033
                                            Attention:  Antonio Milici
                                            Telephone:  (303) 463-6371
                                            Facsimile:   (303) 463-6377


                                       15
<PAGE>

                          with a copy to:

                          Kendall, Koenig & Oelsner PC
                          1675 Broadway, Suite 750
                          Denver, CO  80202
                          Attn: Nathan E. Seiler, Esq.
                          Telephone: (303) 672-0100
                          Facsimile: (303) 672-0101

         All such notices and  communications  shall be deemed to have been duly
given: (i) when delivered by hand, if personally  delivered;  (ii) five business
days after being deposited in the mail,  postage  prepaid,  if mailed  certified
mail,  return  receipt  requested;  (iii) one  business  day after being  timely
delivered to a next-day air courier  guaranteeing  overnight delivery;  (iv) the
date of transmission if sent via facsimile to the facsimile  number as set forth
in this  Section or the  signature  page hereof prior to 6:00 p.m. on a business
day, or (v) the  business day  following  the date of  transmission  if sent via
facsimile at a facsimile  number set forth in this  Section or on the  signature
page hereof after 6:00 p.m. or on a date that is not a business day. Change of a
party's address or facsimile number may be designated hereunder by giving notice
to all of the other parties hereto in accordance with this Section.

         12.  Survival  Clause.  The  respective  representations,   warranties,
agreements  and  covenants of the Company and the  Purchasers  set forth in this
Agreement shall survive until the first anniversary of the Closing.

         13. Fees and  Expenses.  Within three (3) days of Closing,  the Company
agrees  to pay  Purchasers'  legal  expenses  incurred  in  connection  with the
preparation  and  negotiation of the  Transaction  Documents up to $10,000.  Any
amounts  paid by Company  upon  execution  of the Term  Sheet  will be  credited
against this amount.

         14.  Legal  Fees.  If any  action at law or in equity is  necessary  to
enforce or interpret the terms of this  Agreement,  the Warrants or the Articles
of Amendment,  the prevailing party or parties shall be entitled to receive from
the other  party or parties  reasonable  attorneys'  fees,  costs and  necessary
disbursements  in addition to any other relief to which the prevailing  party or
parties may be entitled.

         15.  Successors.  This  Agreement  shall inure to the benefit of and be
binding upon Purchasers, MAG and the Company and their respective successors and
legal  representatives,  and nothing expressed or mentioned in this Agreement is
intended or shall be  construed  to give any other person any legal or equitable
right, remedy or claim under or in respect of this Agreement,  or any provisions
herein contained;  this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive  benefit of such persons and
for the benefit of no other  person.  Neither the Company nor any  Purchaser may


                                       16
<PAGE>

assign this  Agreement or any rights or obligation  hereunder  without the prior
written consent of the other party.

         16. No Waiver;  Modifications  in  Writing.  No failure or delay on the
part of the Company,  MAG or any  Purchaser in  exercising  any right,  power or
remedy  hereunder  shall  operate as a waiver  thereof,  nor shall any single or
partial  exercise  of any such  right,  power or  remedy  preclude  any other or
further  exercise  thereof or the exercise of any other right,  power or remedy.
The remedies  provided for herein are  cumulative  and are not  exclusive of any
remedies that may be available to the Company, MAG or any Purchaser at law or in
equity or  otherwise.  No waiver of or consent to any  departure by the Company,
MAG or any  Purchaser  from any provision of this  Agreement  shall be effective
unless signed in writing by the party entitled to the benefit thereof,  provided
that notice of any such waiver  shall be given to each party hereto as set forth
below.  Except as otherwise  provided  herein,  no  amendment,  modification  or
termination of any provision of this Agreement shall be effective  unless signed
in writing by or on behalf of each of the Company,  MAG and the Purchasers.  Any
amendment,  supplement or modification of or to any provision of this Agreement,
any waiver of any provision of this Agreement,  and any consent to any departure
by the Company,  MAG or any  Purchaser  from the terms of any  provision of this
Agreement shall be effective only in the specific  instance and for the specific
purpose for which made or given. Except where notice is specifically required by
this Agreement,  no notice to or demand on the Company in any case shall entitle
the  Company  to any other or  further  notice or  demand  in  similar  or other
circumstances.

         17.  Entire  Agreement.  This  Agreement,   together  with  Transaction
Documents,  constitutes  the  entire  agreement  among the  parties  hereto  and
supersedes  all  prior  agreements,  understandings  and  arrangements,  oral or
written,  among the parties hereto with respect to the subject matter hereof and
thereof.

         18.  Severability.  If any  provision  of this  Agreement is held to be
invalid or unenforceable in any respect,  the validity and enforceability of the
remaining  terms  and  provisions  of  this  Agreement  shall  not in any way be
affected or impaired thereby.

         19. APPLICABLE LAW. THE VALIDITY AND  INTERPRETATION OF THIS AGREEMENT,
AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT GIVING EFFECT TO
PROVISIONS  RELATING TO  CONFLICTS OF LAW TO THE EXTENT THE  APPLICATION  OF THE
LAWS OF ANOTHER  JURISDICTION  WOULD BE REQUIRED  THEREBY.  THE  PARTIES  HEREBY
IRREVOCABLY AND UNCONDITIONALLY AGREE THAT ACTIONS, SUITS OR PROCEEDINGS ARISING
OUT OF OR RELATING  TO THIS  AGREEMENT  MAY BE BROUGHT  ONLY IN STATE OR FEDERAL
COURTS  LOCATED IN THE CITY OF LOS ANGELES,  CALIFORNIA AND HEREBY SUBMIT TO THE
EXCLUSIVE JURISDICTION OF SUCH COURTS FOR SUCH PURPOSE.


                                       17
<PAGE>

         20.  Counterparts.  This  Agreement  may be  executed  in  two or  more
counterparts and may be delivered by facsimile transmission, each of which shall
be deemed an original,  but all of which together  shall  constitute one and the
same instrument.

         21. If the foregoing  correctly  sets forth our  understanding,  please
indicate your  acceptance  thereof in the space provided below for that purpose,
whereupon this Agreement shall constitute a binding agreement among the Company,
the Purchasers and MAG.

                                            Very truly yours,

                                            GeneThera, Inc.


                                            By: /s/ Antonio Milici
                                                Name:   Antonio Milici
                                                Title:  Chief Executive Officer


                                       18
<PAGE>

ACCEPTED AND AGREED:

MERCATOR MOMENTUM FUND, LP               MERCATOR MOMENTUM FUND III, LP

By:   Mercator Advisory Group LLC        By:   Mercator Advisory Group LLC
Its:  General Partner                    Its:  General Partner

      /s/ David Firestone                      /s/ David Firestone
      David Firestone                          David Firestone
      Managing Member                          Managing Member



MERCATOR ADVISORY GROUP, LLC             MONARCH POINTE FUND, LTD.

                                         By:   /s/ David Firestone
By:   /s/ David Firestone                Name: David Firestone
Name: David Firestone                    Its:  President
Its:  Managing Member
                                         Addresses for Notice to Purchasers and
                                         MAG:

                                         Mercator Advisory Group, LLC
                                         555 South Flower Street, Suite 4200
                                         Los Angeles, California 90071
                                         Attention:  David Firestone
                                         Facsimile:  (213) 533-8285

                                         with copy to:

                                         David C. Ulich, Esq.
                                         Sheppard, Mullin, Richter & Hampton LLP
                                         333 South Hope Street, 48th Floor
                                         Los Angeles, California 90071
                                         Facsimile: (213) 620-1398

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
                         MERCATOR       MERCATOR        MONARCH       MERCATOR
                         MOMENTUM       MOMENTUM      POINTE FUND,    ADVISORY
                         FUND, LP     FUND III, LP        LTD.       GROUP, LLC        TOTAL
----------------------------------------------------------------------------------------------
<S>                     <C>            <C>            <C>               <C>         <C>
PURCHASE PRICE          $  286,000     $  187,000     $  627,000             --     $1,100,000
----------------------------------------------------------------------------------------------
PREFERRED SHARES             2,860          1,870          6,270             --         11,000
----------------------------------------------------------------------------------------------
WARRANTS                   124,348         81,304        272,609        119,565        597,826
----------------------------------------------------------------------------------------------
</TABLE>



                                       19