DEBENTURE PURCHASE AGREEMENT




DEBENTURE PURCHASE AGREEMENT




 

AGREEMENT made as of this 24th day of January 2005, by and
among Modern Technology Corp., a Nevada corporation ("Buyer") and each of the
sellers set forth on the signature page hereto (the "Sellers").




W I T N E S S
E T H:




WHEREAS, Sellers are the owner of debentures in the face
amount of $1,500,000, in such principal amounts as set forth immediately below
its name on the signature pages hereto (the "Debentures"), of Demarco Energy
Systems of America, Inc. ("Demarco"), a Utah corporation; and



WHEREAS, Buyer desires to purchase from Sellers and Sellers
desire to sell to Buyer, the Debentures upon the terms and conditions
hereinafter set forth.



NOW THEREFORE, in consideration of the mutual covenants and
promises herein contained and upon the terms and conditions hereinafter set
forth, the parties hereto, intending to be legally bound, agree as follows:



1. PURCHASE AND SALE OF THE DEBENTURES.




Purchase and Sale. Upon the terms and conditions
herein contained, at the Closing (as hereinafter defined), Sellers agree to sell
the Debentures to Buyer and Buyer agrees to purchase the Debentures from
Sellers, free and clear of all liens, claims, pledges, mortgages, restrictions,
obligations, security interests and encumbrances of any kind, nature and
description.



2. CONSIDERATION.




Purchase Price. The purchase price for the Debentures
(the "Purchase Price") shall be the Buyer's payment of One Million, Five Hundred
Thousand Dollars ($1,500,000) to Sellers, in such amounts as set forth
immediately below each Seller's name on the signature pages hereto, receipt of
which is hereby acknowledged. 



3. CLOSING.




3.1 Time and Place of Closing. The closing of the
transactions contemplated by this Agreement (the "Closing") is taking place
simultaneously with the execution of this Agreement, at the offices of Sichenzia
Ross Friedman Ference LLP, 1065 Avenue of the Americas, 21st Floor, New York,
New York 10018, at the date first set forth above (hereinafter the "Closing
Date").



3.2 Delivery by Seller. At the Closing, Sellers shall
deliver to Buyer, the Certificates representing the Debentures and executed
Stock Power(s) or other documents satisfactory to Buyer permitting transfer to
Buyer of the Debentures.



3.3 Delivery by Buyer. At the Closing, Buyer shall
deliver to the Sellers the sum of One Million, Five Hundred Thousand Dollars
($1,500,000), in such amounts as set forth immediately below each Seller's name
on the signature pages hereto (in a manner to be agreed upon by Buyer and
Sellers).



4. REPRESENTATIONS AND WARRANTIES OF SELLERS.
Sellers hereby severally represent and warrant to Buyer as follows:



4.1 Status of Sellers and Debentures. Each Seller is
the sole beneficial owner of the principal amount of the Debentures as set forth
immediately below each Seller's name on the signature pages hereto, and owns
such principal amount of Debenture, free and clear of all mortgages, pledges,
restrictions, liens, charges, encumbrances, security interests, obligations or
other claims.



5. REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGEMENTS OF
BUYER. Buyer hereby represents, warrants and acknowledges to Sellers as
follows:



5.1 Investment Purposes. Buyer is acquiring the
Debentures for its own account, for investment purposes only and not with a view
to resale or other distribution thereof, nor with the intention of selling,
transferring or otherwise disposing of all or any part of such Debentures, or
any interest therein, for any particular price, or at any particular time, or
upon the happening of any particular event or circumstances, except selling,
transferring, or disposing of such Debentures made in full compliance with all
applicable provisions of the Securities Act of 1993 (the "Act") and the
Securities Exchange Act of 1934 ("Exchange Act"), and the Rules and Regulations
promulgated by the Securities and Exchange Commission thereunder, all as
amended; and that such Debentures must be held indefinitely unless it is
subsequently registered under the Act, or an exemption from such registration is
available.



5.2 Sophisticated Investor. Buyer has sufficient
knowledge and experience of financial and business matters, is able to evaluate
the merits and risks of purchasing such Debentures and has had substantial
experience in previous private and public purchases of securities.



6. POST-CLOSING COVENANTS.




6.1 Further Assurances. After the Closing, at the
request of either party, the other party shall execute, acknowledge and deliver,
without further consideration, all such further assignments, conveyances,
endorsements, deeds, powers of attorney, consents and other documents and take
such other action as may be reasonably requested to consummate the transactions
contemplated by this Agreement.



7. MISCELLANEOUS.




7.1 Binding Effect; Benefits. This Agreement shall
inure to the benefit of, and shall be binding upon, the parties hereto and their
respective successors and permitted assigns. Except as otherwise set forth
herein, this Agreement may not be assigned by any party hereto without the prior
written consent of the other party hereto. Except as otherwise set forth herein,
nothing in this Agreement, expressed or implied, is intended to confer on any
person other than the parties hereto or their respective successors and
permitted assigns any rights, remedies, obligations or liabilities under or by
reason of this Agreement.



7.2 Notices. All notices, requests, demands and other
communications which are required to be or may be given under this Agreement
shall be in writing and shall be deemed to have been duly given when delivered
in person, or transmitted by telecopy or telex, or upon receipt after dispatch
by certified or registered first class mail, postage prepaid, return receipt
requested, to the party to whom the same is so given or made, at the following
addresses (or such others as shall be provided in writing hereinafter):



(a) If to Sellers, to:

To the address set forth immediately below such Seller's name
on the signature pages hereto.

With copy to:

            

            Ballard Spahr Andrews & Ingersoll, LLP

            1735 Market Street, 51st Floor

            Philadelphia, Pennsylvania 19103

            Attention: Gerald J. Guarcini, Esq.

            Telephone: 215-864-8625

            Facsimile: 215-864-8999

            Email: guarcini@ballardspahr.com

            

          
        
        (b) If to the Buyer, to:

      
    
  



Modern Technology Corp.

            1420 N. Lamar Boulevard

            Oxford, Mississippi 38655

            Attention: Anthony Welch, Chief Executive Officer

            Telephone: 662-236-5928

            Facsimile: 662-236-7663

            Email: anthony@moderntechnologycorp.com

            With a copy to:

            

            Sichenzia Ross Friedman Ference LLP

            1065 Avenue of the Americas, 21st Floor

            New York, New York 10018

            Attention: Gregory Sichenzia, Esq.

            Telephone: 212-930-9700

            Facsimile: 212-930-9725

            Email: gsichenzia@srff.com

          
        
      
    
  

7.3 Entire Agreement. This Agreement constitutes the
entire agreement and supersedes all prior agreements and understandings, oral
and written, between the parties hereto with respect to the subject matter
hereof.



7.4 Headings. The section and other headings contained
in this Agreement are for reference purposes only and shall not be deemed to be
a part of this Agreement or to affect the meaning or interpretation of this
Agreement.



7.5 Counterparts. This Agreement may be executed in
any number of counterparts, each of which, when executed, shall be deemed to be
an original and all of which together shall be deemed to be one and the same
instrument.



7.6 Governing Law. This Agreement shall be construed
as to both validity and performance and enforced in accordance with and governed
by the laws of the State of New York, without giving effect to the conflicts of
law principles thereof.



7.7 Severability. If any term or provision of this
Agreement shall to any extent be invalid or unenforceable, the remainder of this
Agreement shall not be affected thereby, and each term and provision of the
Agreement shall be valid and enforced to the fullest extent permitted by law.



7.8 Arbitration. Any controversy or dispute arising
out of or in connection with this Agreement, its interpretation, performance or
termination, which the parties hereto are unable to resolve within a reasonable
time after written notice from one (1) party to the other of the existence of
such controversy or dispute shall be determined by arbitration. Such arbitration
shall be in accordance with the rules and procedures then in effect of the
National Association of Securities Dealers, Inc. by a securities industry panel.
The costs and expenses of such arbitration, including attorney's fees and
expenses, shall be awarded as determined by the arbitrators.



7.9 Amendments. This Agreement may not be modified or
changed except by an instrument or instruments in writing executed by the
parties hereto.




IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.




BUYER:


 


  
    
      
        
          
            
              
                MODERN TECHNOLOGY CORP.

                
                By: /s/ Anthony K. Welch

                Anthony K. Welch

                Chief Executive Officer

                

                

                
                SELLERS:

                AJW PARTNERS, LLC

                
                By: SMS Group, LLC

                /s/ Cory S. Ribotsky

                
                

                
                Corey S. Ribotsky

                Manager

                 

                RESIDENCE: Delaware

                ADDRESS: 1044 Northern Boulevard

                Suite 302

                Roslyn, New York 11576

                Facsimile: (516) 739-7115

                Telephone: (516) 739-7110

              

            

          

        

      

    

  



AGGREGATE PRINCIPAL AMOUNT OF DEBENTURES OWNED: $340,500


 

 

AJW OFFSHORE, LTD.


By: First Street Manager II, LLC

/s/ Corey S. Ribotsky





Corey S. Ribotsky

Manager

 

RESIDENCE: Cayman Islands

ADDRESS: AJW Offshore, Ltd.

P.O. Box 32021 SMB

Grand Cayman, Cayman Island, B.W.I.

AGGREGATE PRINCIPAL AMOUNT OF DEBENTURES OWNED: $583,500


 

AJW QUALIFIED PARTNERS, LLC

By: AJW Manager, LLC

/s/ Corey S. Ribotsky





Corey S. Ribotsky

Manager

 

RESIDENCE: New York

ADDRESS: 1044 Northern Boulevard

Suite 302

Roslyn, New York 11576

Facsimile: (516) 739-7115

Telephone: (516) 739-7110

AGGREGATE PRINCIPAL AMOUNT OF DEBENTURES OWNED: $261,000


NEW MILLENNIUM CAPITAL PARTNERS II, LLC 

By: First Street Manager II, LLP

/s/ Corey S. Ribotsky





Corey S. Ribotsky

Manager

 

RESIDENCE: New York

ADDRESS: 1044 Northern Boulevard

Suite 302

Roslyn, New York 11576

Facsimile: (516) 739-7115

Telephone: (516) 739-7110

AGGREGATE PRINCIPAL AMOUNT OF DEBENTURES OWNED: $315,000