<PAGE>

                                                                    EXHIBIT 10.4

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

         This Securities Purchase Agreement (this "AGREEMENT") is dated as of
May 6, 2004, among VisiJet, Inc., a Delaware corporation (the "COMPANY"), and
the purchasers identified on the signature pages hereto (each, including its
successors and assigns, a "PURCHASER" and collectively the "PURCHASERS").

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

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


                                    ARTICLE I
                                   DEFINITIONS

         1.1 DEFINITIONS. In addition to the terms defined elsewhere in this
Agreement: (a) capitalized terms that are not otherwise defined herein have the
meanings given to such terms in the Debentures (as defined herein), and (b) the
following terms have the meanings indicated in this Section 1.1:

                  "ACTION" shall have the meaning ascribed to such term in
         Section 3.1(j).

                  "AFFILIATE" means any Person that, directly or indirectly
         through one or more intermediaries, controls or is controlled by or is
         under common control with a Person, as such terms are used in and
         construed under Rule 144 under the Securities Act.

                  "CLOSING" means the closing of the purchase and sale of the
         Securities pursuant to SECTION 2.1.

                  "CLOSING DATE" means the Trading Day when all of the
         Transaction Documents have been executed and delivered by the
         applicable parties thereto, and all conditions precedent to (i) each
         Purchaser's obligations to pay the Subscription Amount have been
         satisfied or waived (ii) and the Company's obligations to deliver the
         Securities have been satisfied or waived.

                  "COMMISSION" means the Securities and Exchange Commission.

                  "COMMON STOCK" means the common stock of the Company, par
         value $0.001 per share, and any securities into which such common stock
         shall hereinafter have been reclassified into.

                                      -1-


<PAGE>

                  "COMMON STOCK EQUIVALENTS" means any securities of the Company
         or the Subsidiaries which would entitle the holder thereof to acquire
         at any time Common Stock, including without limitation, any debt,
         preferred stock, rights, options, warrants or other instrument that is
         at any time convertible into or exchangeable for, or otherwise entitles
         the holder thereof to receive, Common Stock.

                  "COMPANY COUNSEL" means Haddan & Zepfel LLP.

                  "DEBENTURES" means the 10% Convertible Debentures, due at the
         earlier of 105 days from the Closing Date or 10 business days from the
         Effective Date, issued by the Company to the Purchasers hereunder, in
         the form of EXHIBIT A.

                  "DISCLOSURE SCHEDULES" shall have the meaning ascribed to such
         term in Section 3.1 hereof.

                  "EFFECTIVE DATE" means the date that the initial Registration
         Statement filed by the Company pursuant to the Registration Rights
         Agreement is first declared effective by the Commission.

                  "ESCROW AGENT" shall have the meaning set forth in the Escrow
         Agreement.

                  "ESCROW AGREEMENT" shall mean the Escrow Agreement in
         substantially the form of EXHIBIT E hereto executed and delivered
         contemporaneously with this Agreement.

                  "EXEMPT ISSUANCES" the issuance of (a) shares of Common Stock
         or options to employees, officers or directors pursuant to any stock or
         option plan duly adopted by the Board of Directors of the Company or a
         majority of the members of a committee of directors established for
         such purpose, (b) securities upon the exercise of or conversion of any
         securities issued hereunder, convertible securities, options or
         warrants issued and outstanding on the date of this Agreement, provided
         that such securities have not been amended since the date of this
         Agreement to increase the number of such securities.

                  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
         amended.

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

                  "LIENS" shall have the meaning ascribed to such term in
         Section 3.1(a) hereof.

                  "LOSSES" means any and all losses, claims, damages,
         liabilities, settlement costs and expenses, including without
         limitation costs of preparation and reasonable attorneys' fees.

                  "MARKET PRICE" shall mean the most recent closing bid price
         per share of the Common Stock on the Trading Market on which the Common
         Stock is then listed or quoted as reported by Bloomberg Financial L.P.

                                      -2-


<PAGE>

                  "MATERIAL ADVERSE EFFECT" shall have the meaning assigned to
         such term in Section 3.1(b) hereof.

                  "PERSON" means an individual or corporation, partnership,
         trust, incorporated or unincorporated association, joint venture,
         limited liability company, joint stock company, government (or an
         agency or subdivision thereof) or other entity of any kind.

                  "PLEDGE AGREEMENT" means the Pledge Agreement of even date
         herewith by and among the Purchasers and Taika Investments, Inc.
         agreement, in the form of EXHIBIT F attached hereto, pursuant to which
         Taika Investments, Inc. shall pledge to the Purchasers, on a pro rata
         basis, an aggregate of 800,000 unrestricted shares of Common Stock as
         security for repayment of the Debentures.

                  "PLEDGED SHARES" shall have the meaning ascribed to such term
         in the Pledge Agreement.

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

                  "REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
         Agreement, dated the date hereof, among the Company and the Purchasers,
         in the form of EXHIBIT B attached hereto.

                  "REGISTRATION STATEMENT" means a registration statement
         meeting the requirements set forth in the Registration Rights Agreement
         and covering the resale of the Underlying Shares by each Purchaser as
         provided for in the Registration Rights Agreement.

                  "REQUIRED APPROVALS" shall have the meaning ascribed to such
         term in Section 3.1(e) hereof.

                  "REQUIRED MINIMUM" means, as of any date, the maximum
         aggregate number of shares of Common Stock then issued or potentially
         issuable in the future pursuant to the Transaction Documents, including
         any Underlying Shares issuable upon exercise or conversion in full of
         all Warrants and Debentures (including Underlying Shares issuable as
         payment of interest), ignoring any conversion or exercise limits set
         forth therein, and assuming that the Set Price is at all times on and
         after the date of determination 75% of the then Set Price on the
         Trading Day immediately prior to the date of determination.

                  "RP" means Richardson & Patel, LLP, with offices at 10900
         Wilshire Blvd, Suite 500, Los Angeles, CA 90024, legal counsel to
         Platinum Partners LP ("PLATINUM").

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

                                      -3-


<PAGE>

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

                  "SECURITIES" means the Debentures, the Warrants and the
         Underlying Shares.

                  "SECURITIES ACT" means the Securities Act of 1933, as amended.

                  "SET PRICE" shall have the meaning ascribed to such term in
         the Debentures.

                  "SUBSCRIPTION AMOUNT" means, as to each Purchaser, the
         aggregate amount to be paid for Debentures and Warrants purchased
         hereunder as specified below such Purchaser's name on the signature
         page of this Agreement and next to the heading "Subscription Amount",
         in United States Dollars and in immediately available funds.

                  "SUBSEQUENT FINANCING" shall have the meaning ascribed to such
         term in Section 4.13.

                  "SUBSIDIARY" means any subsidiary of the Company as set forth
         on Schedule 3.1(a) attached hereto.

                  "TRADING DAY" means any day during which the Trading Market
shall be open for business.

                  "TRADING MARKET" means the following markets or exchanges on
         which the Common Stock is listed or quoted for trading on the date in
         question: OTC Bulletin Board, the American Stock Exchange, the New York
         Stock Exchange, the Nasdaq National Market or the Nasdaq SmallCap
         Market.

                  "TRANSACTION DOCUMENTS" means this Agreement, the Debentures,
         the Warrants, the Registration Rights Agreement, the Escrow Agreement,
         the Waiver, the Pledge Agreement and any other documents or agreements
         executed in connection with the transactions contemplated hereunder.

                  "UNDERLYING SHARES" means the shares of Common Stock issuable
         upon conversion of the Debentures, if any, and upon exercise of the
         Warrants.

                  "VWAP" means, for any date, the price determined by the first
         of the following clauses that applies: (a) if the Common Stock is then
         listed or quoted on a Trading Market, the daily volume weighted average
         price of the Common Stock for such date (or the nearest preceding date)
         on the Trading Market on which the Common Stock is then listed or
         quoted as reported by Bloomberg Financial L.P. (based on a trading day
         from 9:30 a.m. Eastern Time to 4:02 p.m. Eastern Time); (b) if the
         Common Stock is not then listed or quoted on a Trading Market and if
         prices for the Common Stock are then reported in the "Pink Sheets"
         published by the National Quotation Bureau Incorporated (or a similar
         organization or agency succeeding to its functions of reporting
         prices), the most recent bid price per share of the Common Stock so
         reported; or (c) in all other cases, the fair market value of a share
         of Common Stock as determined by an independent appraiser selected in
         good faith by the Purchasers and reasonably acceptable to the Company.

                                      -4-


<PAGE>

                  "WAIVERS" means the Waiver and Consent, in form and substance
         acceptable to the Purchasers, pursuant to which each of SBI Brightline
         II, LLC and Trilogy Investment I, LLC consent to the transactions
         contemplated by this Agreement.

                  "WARRANTS" means collectively the Common Stock purchase
         warrants, in the form of EXHIBIT C delivered to the Purchasers at the
         Closing in accordance with Section 2.2 hereof, which Warrants shall be
         exercisable immediately and for a term of 5 years.

                  "WARRANT SHARES" means the shares of Common Stock issuable
         upon exercise of the Warrants.


                                   ARTICLE II
                                PURCHASE AND SALE

         2.1 CLOSING. On the Closing Date, upon the terms and subject to the
conditions set forth herein, concurrent with the execution and delivery of this
Agreement by the parties hereto, the Company agrees to sell, and each Purchaser
agrees to purchase in the aggregate, severally and not jointly, up to $800,000
principal amount of the Debentures. Each Purchaser shall deliver to the Company
via wire transfer or a certified check immediately available funds equal to
their Subscription Amount and the Company shall deliver to each Purchaser their
respective Debenture and Warrants as determined pursuant to Section 2.2(a)(ii)
and the other items set forth in Section 2.2 issuable at the Closing. Upon
satisfaction of the conditions set forth in Section 2.2, the Closing shall occur
at the offices of the Escrow Agent or such other location as the parties shall
mutually agree.

         2.2 CONDITIONS TO CLOSING. The Closing shall be subject to the
following conditions and deliveries being met on the Closing Date:

                  (a) At or prior to the Closing, unless otherwise indicated
         below, the Company shall deliver or cause to be delivered to the Escrow
         Agent with respect to each Purchaser the following:

                           (i) a copy of a Debenture with a principal amount
                  equal to such Purchaser's Subscription Amount, registered in
                  the name of such Purchaser;

                           (ii) a copy of a Warrant registered in the name of
                  such Purchaser to purchase up to a number of shares of Common
                  Stock equal to 1,000,000 multiplied by a fraction the
                  numerator of which is such Purchaser's Subscription Amount and
                  the denominator of which is the sum of all Subscription
                  Amounts, with an exercise price equal to the Market Price,
                  subject to adjustment therein;

                           (iii) the legal opinion of Company Counsel, in the
                  form of EXHIBIT D attached hereto, addressed to the
                  Purchasers;

                                      -5-


<PAGE>

                           (iv) the Registration Rights Agreement duly executed
                  by the Company in the form of EXHIBIT B attached hereto;

                           (v) the Escrow Agreement duly executed by the
                  Company;

                           (vi) the Waivers, duly executed by SBI Brightline II,
                  LLC and Trilogy Investment I, LLC;

                           (vii) the Pledge Agreement duly executed by the
                  Company and Taika Investments, Inc.;

                           this Agreement, duly executed by the Company.

                  (b) At or prior to the Closing, each Purchaser shall deliver
         or cause to be delivered to the Company the following:

                           (i) such Purchaser's Subscription Amount;

                           (ii) this Agreement, duly executed by such Purchaser;

                           (iii) the Escrow Agreement duly executed by such
                  Purchaser; and

                           the Registration Rights Agreement duly executed by
                  such Purchaser.

                  (c) All representations and warranties of the respective
         parties contained herein shall remain true and correct as of the
         Closing Date and all covenants of the respective parties shall have
         been performed if due prior to such date.

                  (d) From the date hereof to the Closing Date, trading in the
         Common Stock shall not have been suspended by the Commission, and, at
         any time prior to the Closing Date, trading in securities generally as
         reported by Bloomberg Financial Markets shall not have been suspended
         or limited, or minimum prices shall not have been established on
         securities whose trades are reported by such service, or on the Trading
         Market, nor shall a banking moratorium have been declared either by the
         United States or New York State authorities, nor shall there have
         occurred any material outbreak or escalation of hostilities or other
         national or international calamity of such magnitude in its effect on,
         or any material adverse change in, any financial market which, in each
         case, in the reasonable judgment of the Purchasers, makes it
         impracticable or inadvisable to purchase the Debentures at the Closing.


                                   ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

         3.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as set forth
under the corresponding section of the disclosure schedules delivered to the

                                      -6-


<PAGE>

Purchasers concurrently herewith (the "DISCLOSURE Schedules") which Disclosure
Schedules shall be deemed a part hereof, the Company hereby makes the
representations and warranties set forth below to each Purchaser.

                  (a) SUBSIDIARIES. All of the direct and indirect subsidiaries
         of the Company are set forth on SCHEDULE 3.1(A). The Company owns,
         directly or indirectly, all of the capital stock or other equity
         interests of each Subsidiary free and clear of any lien, charge,
         security interest, encumbrance, right of first refusal or other
         restriction (collectively, "LIENS"), and all the issued and outstanding
         shares of capital stock of each Subsidiary are validly issued and are
         fully paid, non-assessable and free of preemptive and similar rights.
         If the Company has no subsidiaries, then references in the Transaction
         Documents to the Subsidiaries shall be disregarded.

                  (b) ORGANIZATION AND QUALIFICATION. Each of the Company and
         the Subsidiaries is an entity duly incorporated or otherwise organized,
         validly existing and in good standing under the laws of the
         jurisdiction of its incorporation or organization (as applicable), with
         the requisite power and authority to own and use its properties and
         assets and to carry on its business as currently conducted. Neither the
         Company nor any Subsidiary is in violation of any of the provisions of
         its respective certificate or articles of incorporation, bylaws or
         other organizational or charter documents. Each of the Company and the
         Subsidiaries is duly qualified to do business and is in good standing
         as a foreign corporation or other entity in each jurisdiction in which
         the nature of the business conducted or property owned by it makes such
         qualification necessary, except where the failure to be so qualified or
         in good standing, as the case may be, could not, individually or in the
         aggregate: (i) adversely affect the legality, validity or
         enforceability of any Transaction Document, (ii) have or result in or
         be reasonably likely to have or result in a material adverse effect on
         the results of operations, assets, prospects, business or condition
         (financial or otherwise) of the Company and the Subsidiaries, taken as
         a whole, or (iii) adversely impair the Company's ability to perform
         fully on a timely basis its obligations under any of the Transaction
         Documents (any of (i), (ii) or (iii), a "MATERIAL ADVERSE Effect").

                  (c) AUTHORIZATION; ENFORCEMENT. The Company has the requisite
         corporate power and authority to enter into and to consummate the
         transactions contemplated by each of the Transaction Documents and
         otherwise to carry out its obligations hereunder or thereunder. The
         execution and delivery of each of the Transaction Documents by the
         Company and the consummation by it of the transactions contemplated
         hereby or thereby have been duly authorized by all necessary action on
         the part of the Company and no further consent or action is required by
         the Company other than Required Approvals. Each of the Transaction
         Documents has been (or upon delivery will be) duly executed by the
         Company and, when delivered in accordance with the terms hereof, will
         constitute the valid and binding obligation of the Company enforceable
         against the Company in accordance with its terms, subject to applicable
         bankruptcy, insolvency, fraudulent conveyance, reorganization,
         moratorium and similar laws affecting creditors' rights and remedies
         generally and general principles of equity. Neither the Company nor any
         Subsidiary is in violation of any of the provisions of its respective

                                      -7-


<PAGE>

         certificate or articles of incorporation, by-laws or other
         organizational or charter documents except where such violation could
         not, individually or in the aggregate, constitute a Material Adverse
         Effect.

                  (d) NO CONFLICTS. The execution, delivery and performance of
         the Transaction Documents by the Company and the consummation by the
         Company of the transactions contemplated thereby do not and will not:
         (i) conflict with or violate any provision of the Company's or any
         Subsidiary's certificate or articles of incorporation, bylaws or other
         organizational or charter documents, or (ii) subject to obtaining the
         Required Approvals, conflict with, or constitute a default (or an event
         that with notice or lapse of time or both would become a default)
         under, or give to others any rights of termination, amendment,
         acceleration or cancellation (with or without notice, lapse of time or
         both) of, any agreement, credit facility, debt or other instrument
         (evidencing a Company or Subsidiary debt or otherwise) or other
         understanding to which the Company or any Subsidiary is a party or by
         which any property or asset of the Company or any Subsidiary is bound
         or affected, or (iii) result, in a violation of any law, rule,
         regulation, order, judgment, injunction, decree or other restriction of
         any court or governmental authority to which the Company or a
         Subsidiary is subject (including federal and state securities laws and
         regulations), or by which any property or asset of the Company or a
         Subsidiary is bound or affected; except in the case of each of clauses
         (ii) and (iii), such as could not, individually or in the aggregate,
         have or result in a Material Adverse Effect.

                  (e) FILINGS, CONSENTS AND APPROVALS. Neither the Company nor
         any Subsidiary is required to obtain any consent, waiver, authorization
         or order of, give any notice to, or make any filing or registration
         with, any court or other federal, state, local or other governmental
         authority or other Person in connection with the execution, delivery
         and performance by the Company of the Transaction Documents, other than
         (i) the filings required under Section 4.7, (ii) the filing with the
         Commission of the Registration Statement, (iii) the notice and/or
         application(s) to each applicable Trading Market for the issuance and
         sale of the Debentures and Warrants and the listing of the Underlying
         Shares for trading thereon in the time and manner required thereby and
         (iv) the filing of Form D with the Commission and applicable Blue Sky
         filings (collectively, the "REQUIRED APPROVALS").

                  (f) ISSUANCE OF THE SECURITIES. The Securities are duly
         authorized and, when issued and paid for in accordance with the
         applicable Transaction Documents, will be duly and validly issued,
         fully paid and non-assessable, free and clear of all Liens. The Company
         has reserved from its duly authorized capital stock a number of shares
         of Common Stock for issuance of the Underlying Shares at least equal to
         the Required Minimum on the date hereof. The Company has not, and to
         the knowledge of the Company, no Affiliate of the Company has sold,
         offered for sale or solicited offers to buy or otherwise negotiated in
         respect of any security (as defined in Section 2 of the Securities Act)
         that would be integrated with the offer or sale of the Securities in a
         manner that would require the registration under the Securities Act of
         the sale of the Securities to the Purchasers, or that would be
         integrated with the offer or sale of the Securities for purposes of the
         rules and regulations of any Trading Market.

                                      -8-


<PAGE>

                  (g) CAPITALIZATION. The number of shares and type of all
         authorized, issued and outstanding capital stock of the Company is set
         forth in the Disclosure Schedules attached hereto. No securities of the
         Company are entitled to preemptive or similar rights, and no Person has
         any right of first refusal, preemptive right, right of participation,
         or any similar right to participate in the transactions contemplated by
         the Transaction Documents. Except as a result of the purchase and sale
         of the Securities, there are no outstanding options, warrants, script
         rights to subscribe to, calls or commitments of any character
         whatsoever relating to, or securities, rights or obligations
         convertible into or exchangeable for, or giving any Person any right to
         subscribe for or acquire, any shares of Common Stock, or contracts,
         commitments, understandings or arrangements by which the Company or any
         Subsidiary is or may become bound to issue additional shares of Common
         Stock, or securities or rights convertible or exchangeable into shares
         of Common Stock. The issuance and sale of the Securities will not
         obligate the Company to issue shares of Common Stock or other
         securities to any Person (other than the Purchasers) and will not
         result in a right of any holder of Company securities to adjust the
         exercise, conversion, exchange or reset price under such securities.
         All of the outstanding shares of capital stock of the Company are
         validly issued, fully paid and nonassessable, have been issued in
         compliance with all federal and state securities laws, and none of such
         outstanding shares was issued in violation of any preemptive rights or
         similar rights to subscribe for or purchase securities. No further
         approval or authorization of any stockholder, the Board of Directors of
         the Company or others is required for the issuance and sale of the
         Shares. There are no stockholders agreements, voting agreements or
         other similar agreements with respect to the Company's capital stock to
         which the Company is a party or, to the knowledge of the Company,
         between or among any of the Company's stockholders.

                  (h) SEC REPORTS; FINANCIAL STATEMENTS. The Company has filed
         all reports required to be filed by it under the Exchange Act,
         including pursuant to Section 13(a) or 15(d) thereof, for the two years
         preceding the date hereof (or such shorter period as the Company was
         required by law to file such material) (the foregoing materials being
         collectively referred to herein as the "SEC REPORTS") on a timely basis
         or has received a valid extension of such time of filing and has filed
         any such SEC Reports prior to the expiration of any such extension. As
         of their respective dates, the SEC Reports complied in all material
         respects with the requirements of the Securities Act and the Exchange
         Act and the rules and regulations of the Commission promulgated
         thereunder, and none of the SEC Reports, when filed, contained any
         untrue statement of a material fact or omitted to state a material fact
         required to be stated therein or necessary in order to make the
         statements therein, in light of the circumstances under which they were
         made, not misleading. The financial statements of the Company included
         in the SEC Reports comply in all material respects with applicable
         accounting requirements and the rules and regulations of the Commission
         with respect thereto as in effect at the time of filing. Such financial
         statements have been prepared in accordance with generally accepted
         accounting principles applied on a consistent basis during the periods
         involved ("GAAP"), except as may be otherwise specified in such
         financial statements or the notes thereto, and fairly present in all
         material respects the financial position of the Company and its
         consolidated subsidiaries as of and for the dates thereof and the
         results of operations and cash flows for the periods then ended,
         subject, in the case of unaudited statements, to normal, immaterial,
         year-end audit adjustments.

                                      -9-


<PAGE>

                  (i) MATERIAL CHANGES. Since the date of the latest audited
         financial statements included within the SEC Reports: (i) there has
         been no event, occurrence or development that has had or that could
         result in a Material Adverse Effect, (ii) the Company has not incurred
         any liabilities (contingent or otherwise) other than (A) trade payables
         and accrued expenses incurred in the ordinary course of business
         consistent with past practice and (B) liabilities not required to be
         reflected in the Company's financial statements pursuant to GAAP or
         required to be disclosed in filings made with the Commission, (iii) the
         Company has not altered its method of accounting or the identity of its
         auditors, (iv) the Company has not declared or made any dividend or
         distribution of cash or other property to its stockholders or
         purchased, redeemed or made any agreements to purchase or redeem any
         shares of its capital stock, and (v) the Company has not issued any
         equity securities to any officer, director, consultant or Affiliate,
         except pursuant to existing Company stock option or similar plans.

                  (j) LITIGATION. There is no action, suit, inquiry, notice of
         violation, proceeding or investigation pending or, to the knowledge of
         the Company, threatened against or affecting the Company, any
         Subsidiary or any of their respective properties before or by any
         court, arbitrator, governmental or administrative agency or regulatory
         authority (federal, state, county, local or foreign) (collectively, an
         "ACTION") which: (i) adversely affects or challenges the legality,
         validity or enforceability of any of the Transaction Documents or the
         Securities or (ii) could, if there were an unfavorable decision,
         individually or in the aggregate, have or reasonably be expected to
         result in a Material Adverse Effect. Neither the Company nor any
         Subsidiary, nor any director or officer thereof, is or has been the
         subject of any Action involving a claim of violation of or liability
         under federal or state securities laws or a claim of breach of
         fiduciary duty. The Company does not have pending before the Commission
         any request for confidential treatment of information. There has not
         been, and to the knowledge of the Company, there is not pending or
         contemplated, any investigation by the Commission involving the Company
         or any current or former director or officer of the Company. The
         Commission has not issued any stop order or other order suspending the
         effectiveness of any registration statement filed by the Company or any
         Subsidiary under the Exchange Act or the Securities Act.

                  (k) COMPLIANCE. Neither the Company nor any Subsidiary: (i) is
         in default under or in violation of (and no event has occurred that has
         not been waived that, with notice or lapse of time or both, would
         result in a default by the Company or any Subsidiary under), nor has
         the Company or any Subsidiary received notice of a claim that it is in
         default under or that it is in violation of, any indenture, loan or
         credit agreement or any other agreement or instrument to which it is a
         party or by which it or any of its properties is bound (whether or not
         such default or violation has been waived), (ii) is in violation of any
         order of any court, arbitrator or governmental body, or (iii) is or has
         been in violation of any statute, rule or regulation of any

                                      -10-


<PAGE>

         governmental authority, except in each case as could not, individually
         or in the aggregate, have or result in a Material Adverse Effect.

                  (l) LABOR RELATIONS. No material labor dispute exists or, to
         the knowledge of the Company, is imminent with respect to any of the
         employees of the Company.

                  (m) REGULATORY PERMITS. The Company and the Subsidiaries
         possess all certificates, authorizations and permits issued by the
         appropriate federal, state, local or foreign regulatory authorities
         necessary to conduct their respective businesses as described in the
         SEC Reports, except where the failure to possess such permits could
         not, individually or in the aggregate, have or reasonably be expected
         to result in a Material Adverse Effect ("MATERIAL PERMITS"), and
         neither the Company nor any Subsidiary has received any notice of
         proceedings relating to the revocation or modification of any Material
         Permit.

                  (n) TITLE TO ASSETS. The Company and the Subsidiaries have
         good and marketable title in fee simple to all real property owned by
         them that is material to the business of the Company and the
         Subsidiaries and good and marketable title in all personal property
         owned by them that is material to the business of the Company and the
         Subsidiaries, in each case free and clear of all Liens, except for
         Liens as do not materially affect the value of such property and do not
         materially interfere with the use made and proposed to be made of such
         property by the Company and the Subsidiaries. Any real property and
         facilities held under lease by the Company and the Subsidiaries are
         held under valid, subsisting and enforceable leases of which the
         Company and the Subsidiaries are in compliance.

                  (o) PATENTS AND TRADEMARKS. The Company and the Subsidiaries
         have, or have rights to use, all patents, patent applications,
         trademarks, trademark applications, service marks, trade names,
         copyrights, licenses and other similar rights necessary or material for
         use in connection with their respective businesses as described in the
         SEC Reports and which the failure to so have could have a Material
         Adverse Effect (collectively, the "INTELLECTUAL PROPERTY RIGHTS").
         Neither the Company nor any Subsidiary has received a written notice
         that the Intellectual Property Rights used by the Company or any
         Subsidiary violates or infringes upon the rights of any Person. To the
         knowledge of the Company, all such Intellectual Property Rights are
         enforceable and there is no existing infringement by another Person of
         any of the Intellectual Property Rights.

                  (p) INSURANCE. The Company and the Subsidiaries are insured by
         insurers of recognized financial responsibility against such losses and
         risks and in such amounts as are prudent and customary in the
         businesses in which the Company and the Subsidiaries are engaged. To
         the best of Company's knowledge, such insurance contracts and policies
         are accurate and complete. Neither the Company nor any Subsidiary has
         any reason to believe it will not be able to renew its existing
         insurance coverage as and when such coverage expires or to obtain
         similar coverage from similar insurers as may be necessary to continue
         its business without a significant increase in cost.

                                      -11-


<PAGE>

                  (q) TRANSACTIONS WITH AFFILIATES AND EMPLOYEES. None of the
         officers or directors of the Company and, to the knowledge of the
         Company, none of the employees of the Company is presently a party to
         any transaction with the Company or any Subsidiary (other than for
         services as employees, officers and directors), including any contract,
         agreement or other arrangement providing for the furnishing of services
         to or by, providing for rental of real or personal property to or from,
         or otherwise requiring payments to or from any officer, director or
         such employee or, to the knowledge of the Company, any entity in which
         any officer, director, or any such employee has a substantial interest
         or is an officer, director, trustee or partner.

                  (r) SARBANES-OXLEY; INTERNAL ACCOUNTING CONTROLS. The Company
         is in material compliance with all provisions of the Sarbanes-Oxley Act
         of 2002 which are applicable to it as of the Closing Date. The Company
         and the Subsidiaries maintain a system of internal accounting controls
         sufficient to provide reasonable assurance that (i) transactions are
         executed in accordance with management's general or specific
         authorizations, (ii) transactions are recorded as necessary to permit
         preparation of financial statements in conformity with GAAP and to
         maintain asset accountability, (iii) access to assets is permitted only
         in accordance with management's general or specific authorization, and
         (iv) the recorded accountability for assets is compared with the
         existing assets at reasonable intervals and appropriate action is taken
         with respect to any differences. The Company has established disclosure
         controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
         15d-15(e)) for the Company and designed such disclosure controls and
         procedures to ensure that material information relating to the Company,
         including its subsidiaries, is made known to the certifying officers by
         others within those entities, particularly during the period in which
         the Company's most recently filed periodic report under the Exchange
         Act, as the case may be, is being prepared. The Company's certifying
         officers have evaluated the effectiveness of the Company's controls and
         procedures as of the date prior to the filing date of the most recently
         filed periodic report under the Exchange Act (such date, the
         "EVALUATION Date"). The Company presented in its most recently filed
         periodic report under the Exchange Act the conclusions of the
         certifying officers about the effectiveness of the disclosure controls
         and procedures based on their evaluations as of the Evaluation Date.
         Since the Evaluation Date, there have been no significant changes in
         the Company's internal controls (as such term is defined in Item 307(b)
         of Regulation S-K under the Exchange Act) or, to the Company's
         knowledge, in other factors that could significantly affect the
         Company's internal controls.

                  (s) SOLVENCY/INDEBTEDNESS. Based on the financial condition of
         the Company as of the Closing Date: (i) the fair saleable value of the
         Company's assets exceeds the amount that will be required to be paid on
         or in respect of the Company's existing debts and other liabilities
         (including known contingent liabilities) as they mature; (ii) the
         Company's assets do not constitute unreasonably small capital to carry
         on its business for the current fiscal year as now conducted and as
         proposed to be conducted including its capital needs taking into
         account the particular capital requirements of the business conducted
         by the Company, and projected capital requirements and capital
         availability thereof; and (iii) the current cash flow of the Company,

                                      -12-


<PAGE>

         together with the proceeds the Company would receive, were it to
         liquidate all of its assets, after taking into account all anticipated
         uses of the cash, would be sufficient to pay all amounts on or in
         respect of its debt when such amounts are required to be paid. The
         Company does not intend to incur debts beyond its ability to pay such
         debts as they mature (taking into account the timing and amounts of
         cash to be payable on or in respect of its debt). The Company has no
         knowledge of any facts or circumstances which lead it to believe that
         it will file for reorganization or liquidation under the bankruptcy or
         reorganization laws of any jurisdiction within one year from the
         Closing Date. The SEC Reports set forth as of the dates thereof all
         outstanding secured and unsecured Indebtedness of the Company or any
         Subsidiary, or for which the Company or any Subsidiary has commitments.
         For the purposes of this Agreement, "INDEBTEDNESS" shall mean (a) any
         liabilities for borrowed money or amounts owed in excess of $10,000
         (other than trade accounts payable incurred in the ordinary course of
         business), (b) all guaranties, endorsements and other contingent
         obligations, whether or not the same are or should be reflected in the
         Company's balance sheet or the notes thereto, except guaranties by
         endorsement of negotiable instruments for deposit or collection in the
         ordinary course of business, and (c) the present value of any lease
         payments in excess of $10,000 due under leases required to be
         capitalized in accordance with GAAP. Neither the Company nor any
         Subsidiary is in default with respect to any Indebtedness.

                  (t) CERTAIN FEES. No brokerage or finder's fees or commissions
         are or will be payable by the Company to any broker, financial advisor
         or consultant, finder, placement agent, investment banker, bank or
         other Person with respect to the transactions contemplated by this
         Agreement, and the Company has not taken any action that would cause
         any Purchaser to be liable for any such fees or commissions. The
         Company agrees that the Purchasers shall have no obligation with
         respect to any fees or with respect to any claims made by or on behalf
         of any Person for fees of the type contemplated by this Section with
         the transactions contemplated by this Agreement.

                  (u) PRIVATE PLACEMENT. Assuming the accuracy of the
         representations and warranties of the Purchasers set forth in Sections
         3.2(b)-(f), the offer, issuance and sale of the Securities to the
         Purchasers as contemplated hereby are exempt from the registration
         requirements of the Securities Act. The issuance and sale of the
         Securities hereunder does not contravene the rules and regulations of
         the Trading Market.

                  (v) LISTING AND MAINTENANCE REQUIREMENTS. The Company's Common
         Stock is registered pursuant to Section 12(g) of the Exchange Act, and
         the Company has taken no action designed to, or which to its knowledge
         is likely to have the effect of, terminating the registration of the
         Common Stock under the Exchange Act nor has the Company received any
         notification that the Commission is contemplating terminating such
         registration. The Company has not, in the 12 months preceding the date
         hereof, received notice from any Trading Market on which the Common
         Stock is or has been listed or quoted to the effect that the Company is
         not in compliance with the listing or maintenance requirements of such
         Trading Market. The Company is, and has no reason to believe that it
         will not in the foreseeable future continue to be, in compliance with
         all such listing and maintenance requirements.

                                      -13-


<PAGE>

                  (w) REGISTRATION RIGHTS. The Company has not granted or agreed
         to grant to any Person any rights (including "piggy-back" registration
         rights) to have any securities of the Company registered with the
         Commission or any other governmental authority that have not been
         satisfied.

                  (x) APPLICATION OF TAKEOVER PROTECTIONS. The Company and its
         Board of Directors have taken all necessary action, if any, in order to
         render inapplicable any control share acquisition, business
         combination, poison pill (including any distribution under a rights
         agreement) or other similar anti-takeover provision under the Company's
         Certificate of Incorporation (or similar charter documents) or the laws
         of its state of incorporation that is or could become applicable to the
         Purchasers as a result of the Purchasers and the Company fulfilling
         their obligations or exercising their rights under the Transaction
         Documents, including without limitation as a result of the Company's
         issuance of the Securities and the Purchasers' ownership of the
         Securities.

                  (y) SENIORITY. As of the Closing Date, no indebtedness of the
         Company is senior to the Debentures in right of payment, whether with
         respect to interest or upon liquidation or dissolution, or otherwise.

                  (z) DISCLOSURE. The Company confirms that neither it nor any
         other Person acting on its behalf has provided any of the Purchasers or
         their agents or counsel with any information that constitutes or might
         constitute material, nonpublic information. The Company understands and
         confirms that the Purchasers will rely on the foregoing representations
         in effecting transactions in securities of the Company. All disclosure
         provided to the Purchasers regarding the Company, its business and the
         transactions contemplated hereby, including the Schedules to this
         Agreement, furnished by or on behalf of the Company with respect to the
         representations and warranties made herein are true and correct with
         respect to such representations and warranties and do not contain any
         untrue statement of a material fact or omit to state any material fact
         necessary in order to make the statements made therein, in light of the
         circumstances under which they were made, not misleading. The Company
         acknowledges and agrees that no Purchaser makes or has made any
         representations or warranties with respect to the transactions
         contemplated hereby other than those specifically set forth in Section
         3.2 hereof.

                  (aa) TAX STATUS. The Company and each of its Subsidiaries has
         made or filed all federal, state and foreign income and all other tax
         returns, reports and declarations required by any jurisdiction to which
         it is subject (unless and only to the extent that the Company and each
         of its Subsidiaries has set aside on its books provisions reasonably
         adequate for the payment of all unpaid and unreported taxes) and has
         paid all taxes and other governmental assessments and charges that are
         material in amount, shown or determined to be due on such returns,
         reports and declarations, except those being contested in good faith
         and has set aside on its books provisions reasonably adequate for the
         payment of all taxes for periods subsequent to the periods to which
         such returns, reports or declarations apply. There are no unpaid taxes
         in any material amount claimed to be due by the taxing authority of any
         jurisdiction, and the officers of the Company know of no basis for any
         such claim. The Company has not executed a waiver with respect to the

                                      -14-


<PAGE>

         statute of limitations relating to the assessment or collection of any
         foreign, federal, statue or local tax. None of the Company's tax
         returns is presently being audited by any taxing authority.

                  (bb) ACKNOWLEDGMENT REGARDING PURCHASERS' PURCHASE OF
         SECURITIES. The Company acknowledges and agrees that the Purchasers are
         acting solely in the capacity of arm's length purchasers with respect
         to this Agreement and the transactions contemplated hereby. The Company
         further acknowledges that no Purchaser is acting as a financial advisor
         or fiduciary of the Company (or in any similar capacity) with respect
         to this Agreement and the transactions contemplated hereby and any
         statement made by any Purchaser or any of their respective
         representatives or agents in connection with this Agreement and the
         transactions contemplated hereby is not advice or a recommendation and
         is merely incidental to the Purchasers' purchase of the Securities. The
         Company further represents to each Purchaser that the Company's
         decision to enter into this Agreement has been based solely on the
         independent evaluation of the Company and its representatives.

                  (cc) NO GENERAL SOLICITATION OR ADVERTISING IN REGARD TO THIS
         TRANSACTION. Neither the Company nor, to the knowledge of the Company,
         any of its directors or officers (i) has conducted or will conduct any
         general solicitation (as that term is used in Rule 502(c) of Regulation
         D) or general advertising with respect to the sale of the Debentures or
         the Warrants, or (ii) made any offers or sales of any security or
         solicited any offers to buy any security under any circumstances that
         would require registration of the Debentures, the Underlying Shares or
         the Warrants under the Securities Act or made any "directed selling
         efforts" as defined in Rule 902 of Regulation S.

                  (dd) NO DISAGREEMENTS WITH ACCOUNTANTS AND LAWYERS. There are
         no disagreements of any kind presently existing, or reasonably
         anticipated by the Company to arise, between the accountants and
         lawyers formerly or presently employed by the Company and the Company
         is current with respect to any fees owed to its accountants and
         lawyers.

                  (ee) NO INTEGRATED OFFERING. Neither the Company, nor any of
         its Affiliates, nor any Person acting on its or their behalf has,
         directly or indirectly, made any offers or sales of any security or
         solicited any offers to buy any security, under circumstances that
         would cause this offering of the Securities to be integrated with prior
         offerings by the Company for purposes of the Securities Act or which
         could violate any applicable shareholder approval provisions,
         including, without limitation, under the rules and regulations of the
         Trading Market.

                  (ff) FOREIGN CORRUPT PRACTICES. Neither the Company, nor to
         the knowledge of the Company, any agent or other person acting on
         behalf of the Company, has (i) directly or indirectly, used any corrupt
         funds for unlawful contributions, gifts, entertainment or other
         unlawful expenses related to foreign or domestic political activity,
         (ii) made any unlawful payment to foreign or domestic government
         officials or employees or to any foreign or domestic political parties
         or campaigns from corporate funds, (iii) failed to disclose fully any

                                      -15-


<PAGE>

         contribution made by the Company (or made by any person acting on its
         behalf of which the Company is aware) which is in violation of law, or
         (iv) violated in any material respect any provision of the Foreign
         Corrupt Practices Act of 1977, as amended.

                  (gg) ENVIRONMENTAL AND SAFETY LAWS. The Company, the operation
         of its business, and any real property that the Company owns, leases or
         otherwise occupies or uses (the "Premises") are in material compliance
         with all applicable Environmental Laws and orders or directives of any
         governmental authorities having jurisdiction under such Environmental
         Laws. For the purposes of this Agreement, the term "Environmental Laws"
         shall mean any federal, state or local law or ordinance or regulation
         pertaining to the protection of human health or the environment,
         including, without limitation, the Comprehensive Environmental
         Response, Compensation and Liability Act, 42 U.S.C. Sections 9601, et
         seq., the Emergency Planning and Community Right-to-Know Act, 42 U.S.C.
         Sections 11001, et seq., and the Resource Conservation and Recovery
         Act, 42 U.S.C. Sections 6901, et seq.

         3.2 REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. Each Purchaser
hereby, for itself and for no other Purchaser, represents and warrants to the
Company as follows:

                  (a) ORGANIZATION; AUTHORITY. Such Purchaser is an entity duly
         organized, validly existing and in good standing under the laws of the
         jurisdiction of its organization with the requisite corporate or
         partnership power and authority to enter into and to consummate the
         transactions contemplated by the Transaction Documents and otherwise to
         carry out its obligations thereunder. The purchase by such Purchaser of
         the Securities hereunder has been duly authorized by all necessary
         action on the part of such Purchaser. Each of this Agreement and the
         Registration Rights Agreement has been duly executed by such Purchaser,
         and when delivered by such Purchaser in accordance with the terms
         hereof, will constitute the valid and legally binding obligation of
         such Purchaser, enforceable against it in accordance with its terms
         except (i) as limited by applicable bankruptcy, insolvency,
         reorganization, moratorium and other laws of general application
         affecting enforcement of creditors' rights generally and (ii) as
         limited by laws relating to the availability of specific performance,
         injunctive relief or other equitable remedies.

                  (b) INVESTMENT REPRESENTATION. Such Purchaser is acquiring the
         Securities as principal for its own account and not with a view to or
         for distributing or reselling such Securities or any part thereof,
         without prejudice, however, to such Purchaser's right, subject to the
         provisions of this Agreement, at all times to sell or otherwise dispose
         of all or any part of such Securities pursuant to an effective
         registration statement under the Securities Act or under an exemption
         from such registration and in compliance with applicable federal and
         state securities laws. Nothing contained herein shall be deemed a
         representation or warranty by such Purchaser to hold Securities for any
         period of time or limit such Purchaser's right to sell the Securities
         pursuant to the Registration Statement or otherwise in compliance with
         applicable federal and state securities laws. Such Purchaser is
         acquiring the Securities hereunder in the ordinary course of its
         business. Such Purchaser does not have any agreement or understanding,
         directly or indirectly, with any Person to distribute any of the
         Securities.

                                      -16-


<PAGE>

                  (c) PURCHASER STATUS. At the time such Purchaser was offered
         the Securities, it was, and at the date hereof it is, and on each date
         on which it exercises any Warrants or converts any Debentures it will
         be, an "accredited investor" as defined in Rule 501(a) under the
         Securities Act. Such Purchaser has not been formed solely for the
         purpose of acquiring the Securities. Such Purchaser is not a registered
         broker-dealer under Section 15 of the Exchange Act.

                  (d) EXPERIENCE OF SUCH PURCHASER. Such Purchaser, either alone
         or together with its representatives, has such knowledge,
         sophistication and experience in business and financial matters so as
         to be capable of evaluating the merits and risks of the prospective
         investment in the Securities, and has so evaluated the merits and risks
         of such investment. Such Purchaser is able to bear the economic risk of
         an investment in the Securities and, at the present time, is able to
         afford a complete loss of such investment.

                  (e) GENERAL SOLICITATION. Such Purchaser is not purchasing the
         Securities as a result of any advertisement, article, notice or other
         communication regarding the Securities published in any newspaper,
         magazine or similar media or broadcast over television or radio or
         presented at any seminar or any other general solicitation or general
         advertisement.

                  The Company acknowledges and agrees that each Purchaser does
         not make or has not made any representations or warranties with respect
         to the transactions contemplated hereby other than those specifically
         set forth in this Section 3.2.


                                   ARTICLE IV
                         OTHER AGREEMENTS OF THE PARTIES

         4.1 TRANSFER RESTRICTIONS.

                  (a) The Securities may only be disposed of in compliance with
         state and federal securities laws. In connection with any transfer of
         Securities other than pursuant to an effective registration statement
         or Rule 144, to the Company or to an Affiliate of a Purchaser, the
         Company may require the transferor thereof to provide to the Company an
         opinion of counsel selected by the transferor and reasonably acceptable
         to the Company, the form and substance of which opinion shall be
         reasonably satisfactory to the Company, to the effect that such
         transfer does not require registration of such transferred Securities
         under the Securities Act. As a condition of transfer, any such
         transferee shall agree in writing to be bound by the terms of this
         Agreement and shall have the rights of a Purchaser under this Agreement
         and the Registration Rights Agreement.

                  (b) Each Purchaser agrees to the imprinting, so long as is
         required by this SECTION 4.1(b), of the following legend on any
         certificate evidencing Securities:

                                      -17-


<PAGE>

         [NEITHER] THESE SECURITIES [NOR THE SECURITIES INTO WHICH THESE
         SECURITIES ARE [EXERCISABLE] [CONVERTIBLE]] HAVE BEEN REGISTERED WITH
         THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF
         ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
         ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
         REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
         AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
         REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
         APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF
         COUNSEL TO THE TRANSFEROR REASONABLY ACCEPTABLE TO THE COMPANY TO SUCH
         EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
         COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF
         THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
         ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

                  The Company acknowledges and agrees that a Purchaser may from
         time to time pledge pursuant to a bona fide margin agreement or grant a
         security interest in some or all of the Securities to a financial
         institution that is an "accredited investor" as defined in Rule 501(a)
         under the Securities Act and, if required under the terms of such
         arrangement, such Purchaser may transfer pledged or secured Securities
         to the pledgees or secured parties. Such pledge or transfer would not
         be subject to approval of the Company and no legal opinion of legal
         counsel of the pledgee, secured party or pledgor shall be required in
         connection therewith. Further, no notice shall be required of such
         pledge. At the appropriate Purchaser's expense, the Company will
         execute and deliver such reasonable documentation as a pledgee or
         secured party of Securities may reasonably request in connection with a
         pledge or transfer of the Securities, including the preparation and
         filing of any required prospectus supplement under Rule 424(b)(3) of
         the Securities Act or other applicable provision of the Securities Act
         to appropriately amend the list of Selling Stockholders thereunder.

                  (c) Certificates evidencing the Underlying Shares shall not
         contain any legend (including the legend set forth in Section 4.1(b)
         hereof): (i) while a registration statement (including the Registration
         Statement) covering the resale of such security is effective under the
         Securities Act, or (ii) following any sale of such Underlying Shares
         pursuant to Rule 144, or (iii) if such Underlying Shares are eligible
         for sale under Rule 144(k), or (iv) if such legend is not required
         under applicable requirements of the Securities Act (including judicial
         interpretations and pronouncements issued by the staff of the
         Commission); PROVIDED, HOWEVER, in connection with the issuance of the
         Underlying Shares, each Purchaser, severally and not jointly with the
         other Purchasers, hereby agrees to adhere to and abide by all
         prospectus delivery requirements under the Securities Act and rules and
         regulations of the Commission. The Company shall cause its counsel to
         issue a legal opinion to the Company's transfer agent promptly after
         the Effective Date if required by the Company's transfer agent to

                                      -18-


<PAGE>

         effect the removal of the legend hereunder. If all or any portion of a
         Debenture or Warrant is converted or exercised (as applicable) at a
         time when there is an effective registration statement to cover the
         resale of the Underlying Shares, or if such Underlying Shares may be
         sold under Rule 144(k) or if such legend is not otherwise required
         under applicable requirements of the Securities Act (including judicial
         interpretations thereof) then such Underlying Shares shall be issued
         free of all legends. The Company agrees that following the Effective
         Date or at such time as such legend is no longer required under this
         Section 4.1(c), it will, no later than three Trading Days following the
         delivery by a Purchaser to the Company or the Company's transfer agent
         of a certificate representing Underlying Shares, as applicable, issued
         with a restrictive legend (such third Trading Day, the "LEGEND REMOVAL
         DATE"), deliver or cause to be delivered to such Purchaser a
         certificate representing such shares that is free from all restrictive
         and other legends. The Company may not make any notation on its records
         or give instructions to any transfer agent of the Company that enlarge
         the restrictions on transfer set forth in this Section.

                  (d) In addition to such Purchaser's other available remedies,
         the Company shall pay to a Purchaser, in cash, as partial liquidated
         damages and not as a penalty, for each $5,000 of Underlying Shares
         (based on the VWAP of the Common Stock on the date such Securities are
         submitted to the Company's transfer agent) delivered for removal of the
         restrictive legend and subject to this Section 4.1(c), $50 per Trading
         Day (increasing to $100 per Trading Day 3 Trading Days after such
         damages have begun to accrue) for each Trading Day after the Legend
         Removal Date until such certificate is delivered without a legend.
         Nothing herein shall limit such Purchaser's right to pursue actual
         damages for the Company's failure to deliver certificates representing
         any Securities as required by the Transaction Documents, and such
         Purchaser shall have the right to pursue all remedies available to it
         at law or in equity including, without limitation, a decree of specific
         performance and/or injunctive relief.

         4.2 ACKNOWLEDGMENT OF DILUTION. The Company acknowledges that the
issuance of the Securities may result in dilution of the outstanding shares of
Common Stock, which dilution may be substantial under certain market conditions.
The Company further acknowledges that its obligations under the Transaction
Documents, including without limitation its obligation to issue the Underlying
Shares pursuant to the Transaction Documents, are unconditional and absolute and
not subject to any right of set off, counterclaim, delay or reduction,
regardless of the effect of any such dilution or any claim the Company may have
against any Purchaser and regardless of the dilutive effect that such issuance
may have on the ownership of the other stockholders of the Company.

         4.3 FURNISHING OF INFORMATION. As long as any Purchaser owns
Securities, the Company covenants to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to the
Exchange Act. Upon the request of any Purchaser, the Company shall deliver to
such Purchaser a written certification of a duly authorized officer as to
whether it has complied with the preceding sentence. As long as any Purchaser
owns Securities, if the Company is not required to file reports pursuant to such
laws, it will prepare and furnish to the Purchasers and make publicly available
in accordance with Rule 144(c) such information as is required for the

                                      -19-


<PAGE>

Purchasers to sell the Securities under Rule 144. The Company further covenants
that it will take such further action as any holder of Securities may reasonably
request, all to the extent required from time to time to enable such Person to
sell such Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144.

         4.4 INTEGRATION. The Company shall not, and shall use its best efforts
to ensure that no Affiliate of the Company shall, sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2 of the Securities Act) that would be integrated with the
offer or sale of the Securities in a manner that would require the registration
under the Securities Act of the sale of the Securities to the Purchasers, or
that would be integrated with the offer or sale of the Securities for purposes
of the rules and regulations of any Trading Market.

         4.5 RESERVATION AND LISTING OF SECURITIES.

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

                  (b) If, on any date, the number of authorized but unissued
         (and otherwise unreserved) shares of Common Stock is less than the
         Required Minimum on such date, then the Board of Directors of the
         Company shall use commercially reasonable efforts to amend the
         Company's certificate or articles of incorporation to increase the
         number of authorized but unissued shares of Common Stock to at least
         the Required Minimum at such time, as soon as possible and in any event
         not later than the 60th day after such date.

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

         4.6 CONVERSION AND EXERCISE PROCEDURES. The form of Notice of Exercise
included in the Warrants and the form of Notice of Conversion included in the
Debentures set forth the totality of the procedures required of the Purchasers
in order to exercise the Warrants or convert the Debentures. No additional legal
opinion or other information or instructions shall be required of the Purchasers
to exercise their Warrants or convert their Debentures. The Company shall honor
exercises of the Warrants and conversions of the Debentures and shall deliver
Underlying Shares in accordance with the terms, conditions and time periods set
forth in the Transaction Documents.

         4.7 SECURITIES LAWS DISCLOSURE; PUBLICITY. The Company shall, by 8:30
a.m. Eastern time on the Trading Day following the date of this Agreement, issue
a press release or file a Current Report on Form 8-K reasonably acceptable to
each Purchaser disclosing all material terms of the transactions contemplated
hereby. The Company and the Purchasers shall consult with each other in issuing

                                      -20-


<PAGE>

any press releases with respect to the transactions contemplated hereby and
neither the Company nor any Purchaser shall issue any such press release or
otherwise make any such public statement without the prior consent of the
Company, with respect to any press release of any Purchaser, with respect to any
press release of the Company, which consent shall not unreasonably be withheld,
except if such disclosure is required by law, in which case the disclosing party
shall promptly provide the other party with prior notice of such public
statement or communication. Notwithstanding the foregoing, other than in any
registration statement filed pursuant to the Registration Rights Agreement and
filings related thereto, the Company shall not publicly disclose the name of any
Purchaser, or include the name of any Purchaser in any filing with the
Commission or any regulatory agency or Trading Market, without the prior written
consent of such Purchaser, except to the extent such disclosure is required by
law or Trading Market regulations, in which case the Company shall provide each
Purchaser with prior notice of such disclosure.

         4.8 NON-PUBLIC INFORMATION. The Company covenants and agrees that
neither it nor any other Person acting on its behalf will provide any Purchaser
or its agents or counsel with any information that the Company believes
constitutes material non-public information, unless prior thereto such Purchaser
shall have executed a written agreement regarding the confidentiality and use of
such information. The Company understands and confirms that each Purchaser shall
be relying on the foregoing representations in effecting transactions in
securities of the Company.

         4.9 USE OF PROCEEDS. The Company shall use the net proceeds from the
sale of the Securities hereunder for working capital purposes and not for the
satisfaction of any portion of the Company's debt (other than payment of trade
payables, capital lease obligations and accrued expenses in the ordinary course
of the Company's business and prior practices), to redeem any Company equity or
equity-equivalent securities or to settle any outstanding litigation.

         4.10 REIMBURSEMENT. If any Purchaser becomes involved in any capacity
in any Proceeding by or against any Person who is a stockholder of the Company,
solely as a result of such Purchaser's acquisition of the Securities under this
Agreement and without causation by any other activity, obligation, condition or
liability on the part of, or pertaining to such Purchaser and not to the
purchase of Securities pursuant to this Agreement, the Company will reimburse
such Purchaser, to the extent such reimbursement is not provided for in Section
4.11, for its reasonable legal and other expenses (including the cost of any
investigation, preparation and travel in connection therewith) incurred in
connection therewith, as such expenses are incurred. The reimbursement
obligations (and limitations thereon) of the Company under this paragraph shall
be in addition to any liability which the Company may otherwise have, shall
extend upon the same terms and conditions to any Affiliates of the Purchasers
who are actually named in such action, proceeding or investigation, and
partners, directors, agents, employees and controlling persons (if any), as the
case may be, of the Purchasers and any such Affiliate, and shall be binding upon
and inure to the benefit of any successors, assigns, heirs and personal
representatives of the Company, the Purchasers and any such Affiliate and any
such Person. The Company also agrees that neither the Purchasers nor any such
Affiliates, partners, directors, agents, employees or controlling persons shall
have any liability to the Company or any Person asserting claims on behalf of or
in right of the Company solely as a result of acquiring the Securities under
this Agreement except to the extent any covenant or warranty owing to the
Company is breached.

                                      -21-


<PAGE>

         4.11 INDEMNIFICATION. The Company will indemnify and hold the
Purchasers and their directors, officers, shareholders, partners, employees and
agents (each, a "PURCHASER PARTY") harmless from any and all losses,
liabilities, obligations, claims, contingencies, damages, costs and expenses,
including all judgments, amounts paid in settlements, court costs and reasonable
attorneys' fees and costs of investigation that any such Purchaser Party may
suffer or incur as a result of or relating to: (a) any misrepresentation, breach
or inaccuracy, or any allegation by a third party that, if true, would
constitute a breach or inaccuracy, of any of the representations, warranties,
covenants or agreements made by the Company in this Agreement or in the other
Transaction Documents; or (b) any cause of action, suit or claim brought or made
against such Purchaser Party and arising solely out of or solely resulting from
the execution, delivery, performance or enforcement of this Agreement or any of
the other Transaction Documents and without causation by any other activity,
obligation, condition or liability pertaining to such Purchaser and not to the
transactions contemplated by this Agreement. The Company will reimburse such
Purchaser for its reasonable legal and other expenses (including the cost of any
investigation, preparation and travel in connection therewith) incurred in
connection therewith, as such expenses are incurred.

         4.12 SHAREHOLDERS RIGHTS PLAN. In the event that a shareholders rights
plan is adopted by the Company, no claim will be made or enforced by the Company
or any other Person that any Purchaser is an "Acquiring Person" under the plan
or in any way could be deemed to trigger the provisions of such plan by virtue
of receiving Securities under the Transaction Documents.

         4.13 PARTICIPATION IN FUTURE FINANCING. From the date hereof until 12
months after the Effective Date, upon any financing by the Company or any of its
Subsidiaries of Common Stock or Common Stock Equivalents (a "SUBSEQUENT
FINANCING"), each Purchaser shall have the right to participate in up to 100% of
such Subsequent Financing. At least 10 Trading Days prior to the closing of the
Subsequent Financing, the Company shall deliver to each Purchaser a written
notice of its intention to effect a Subsequent Financing ("PRE-NOTICE"), which
Pre-Notice shall ask such Purchaser if it wants to review the details of such
financing (such additional notice, a "SUBSEQUENT FINANCING NOTICE"). Upon the
request of a Purchaser, and only upon a request by such Purchaser, for a
Subsequent Financing Notice, the Company shall promptly, but no later than 1
Trading Day after such request, deliver a Subsequent Financing Notice to such
Purchaser. The Subsequent Financing Notice shall describe in reasonable detail
the proposed terms of such Subsequent Financing, the amount of proceeds intended
to be raised thereunder, the Person with whom such Subsequent Financing is
proposed to be effected, and attached to which shall be a term sheet or similar
document relating thereto. If by 6:30 p.m. (New York City time) on the 10th
Trading Day after all of the Purchasers have received the Pre-Notice,
notifications of the Purchasers of their willingness to participate in the
Subsequent Financing (or to cause their designees to provide) is, in the
aggregate, less than the total amount of the Subsequent Financing, then the
Company may effect the remaining portion of such Subsequent Financing on the
terms and to the Persons set forth in the Subsequent Financing Notice. If the
Company receives no notice from a Purchaser as of such 10th Trading Day, such
Purchaser shall be deemed to have notified the Company that it does not elect to
participate. The Company must provide the Purchasers with a second Subsequent

                                      -22-


<PAGE>

Financing Notice, and the Purchasers will again have the right of participation
set forth above in this Section 4.13, if the Subsequent Financing subject to the
initial Subsequent Financing Notice is not consummated for any reason
substantially on terms no more favorable to the Purchasers than those set forth
in such Subsequent Financing Notice within 60 Trading Days after the date of the
initial Subsequent Financing Notice. In the event the Company receives responses
to Subsequent Financing Notices from Purchasers seeking to purchase more than
the aggregate amount of the Subsequent Financing, each such Purchaser shall have
the right to purchase their Pro Rata Portion (as defined below) of the
Subsequent Financing. "PRO RATA PORTION" is the ratio of (x) the Subscription
Amount of a participating Purchaser and (y) the sum of the aggregate
Subscription Amount of all participating Purchasers. Notwithstanding the
foregoing, this Section 4.13 shall not apply in respect of an Exempt Issuance.

         4.14 PROHIBITION ON SUBSEQUENT FINANCINGS. From the date hereof until
90 days after the Effective Date, other than as contemplated by this Agreement,
neither the Company nor any Subsidiary shall issue or sell any Common Stock or
Common Stock Equivalents. Notwithstanding anything herein to the contrary, the
90 day period set forth in this Section 4.14 shall be extended for the number of
Trading Days during such period in which (y) trading in the Common Stock is
suspended by any Trading Market, or (z) following the Effective Date, the
Registration Statement is not effective or the prospectus included in the
Registration Statement may not be used by the Purchasers for the resale of the
Underlying Shares. Notwithstanding anything to the contrary herein, this Section
4.14 shall not apply in respect of an Exempt Issuance. Additionally, in
additional to the limitations set forth herein, from the date hereof until such
time as no Purchaser holds any of the Securities, the Company shall be
prohibited from effecting or enter into an agreement to effect any Subsequent
Financing involving a "VARIABLE RATE TRANSACTION" or an "MFN TRANSACTION" (each
as defined below). The term "VARIABLE RATE TRANSACTION" shall mean a transaction
in which the Company issues or sells (i) any debt or equity securities that are
convertible into, exchangeable or exercisable for, or include the right to
receive additional shares of Common Stock either (A) at a conversion, exercise
or exchange rate or other price that is based upon and/or varies with the
trading prices of or quotations for the shares of Common Stock at any time after
the initial issuance of such debt or equity securities, or (B) with a
conversion, exercise or exchange price that is subject to being reset at some
future date after the initial issuance of such debt or equity security or upon
the occurrence of specified or contingent events directly or indirectly related
to the business of the Company or the market for the Common Stock. The term "MFN
TRANSACTION" shall mean a transaction in which the Company issues or sells any
securities in a capital raising transaction or series of related transactions
which grants to an investor the right to receive additional shares based upon
future transactions of the Company on terms more favorable than those granted to
such investor in such offering.

         4.15 EQUAL TREATMENT OF PURCHASERS. No consideration shall be offered
or paid to any person to amend or consent to a waiver or modification of any
provision of any of the Transaction Documents unless the same consideration is
also offered to all of the parties to the Transaction Documents. Further, the
Company shall not make any payment of principal or interest on the Debentures in
amounts which are disproportionate to the respective principal amounts
outstanding on the Debentures at any applicable time. For clarification

                                      -23-


<PAGE>

purposes, this provision constitutes a separate right granted to each Purchaser
by the Company and negotiated separately by each Purchaser, and is intended to
treat for the Company the Debenture holders as a class and shall not in any way
be construed as the Purchasers acting in concert or as a group with respect to
the purchase, disposition or voting of Securities or otherwise.


                                    ARTICLE V
                                  MISCELLANEOUS

         5.1 TERMINATION. This Agreement may be terminated by any Purchaser, by
written notice to the other parties, if the Closing has not been consummated on
or before May 15, 2004; provided that no such termination will affect the right
of any party to sue for any breach by the other party (or parties).

         5.2 FEES AND EXPENSES. Except as expressly set forth in the Transaction
Documents to the contrary, each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement. The Company shall pay all transfer
agent fees, stamp taxes and other taxes and duties levied in connection with the
issuance of any Securities.

         5.3 ENTIRE AGREEMENT. The Transaction Documents, together with the
exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.

         5.4 NOTICES. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
specified on the signature page attached hereto prior to 5:30 p.m. (New York
City time) on a Trading Day and an electronic confirmation of delivery is
received by the sender, (b) the next Trading Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
number specified in this Section on a day that is not a Trading Day or later
than 5:30 p.m. (New York City time) on any Trading Day, (c) three Trading Days
following the date of mailing, if sent by U.S. nationally recognized overnight
courier service, or (d) upon actual receipt by the party to whom such notice is
required to be given. The addresses for such notices and communications are
those set forth on the signature pages hereof, or such other address as may be
designated in writing hereafter, in the same manner, by such Person.

         5.5 AMENDMENTS; WAIVERS. No provision of this Agreement may be waived
or amended except in a written instrument signed, in the case of an amendment,
by the Company and each of the Purchasers or, in the case of a waiver, by the
party against whom enforcement of any such waiver is sought. No waiver of any
default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any subsequent default or a waiver of any other provision, condition or

                                      -24-


<PAGE>

requirement hereof, nor shall any delay or omission of either party to exercise
any right hereunder in any manner impair the exercise of any such right.

         5.6 CONSTRUCTION. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.

         5.7 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Purchasers. Any Purchaser may assign
its rights under this Agreement and the Registration Rights Agreement to any
Person to whom such Purchaser assigns or transfers any Securities.

         5.8 NO THIRD-PARTY BENEFICIARIES. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except as otherwise set forth in Section 4.11.

         5.9 GOVERNING LAW; VENUE; WAIVER OF JURY TRIAL. All questions
concerning the construction, validity, enforcement and interpretation of the
Transaction Documents shall be governed by and construed and enforced in
accordance with the internal laws of the State of New York, without regard to
the principles of conflicts of law thereof. Each party agrees that all legal
proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement and any other Transaction Documents
(whether brought against a party hereto or its respective affiliates, directors,
officers, shareholders, employees or agents) shall be commenced exclusively in
the state and federal courts sitting in the City of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to
the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper or inconvenient venue for such
proceeding. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner
permitted by law. The parties hereby waive all rights to a trial by jury. If
either party shall commence an action or proceeding to enforce any provisions of
the Transaction Documents, then the prevailing party in such action or
proceeding shall be reimbursed by the other party for its attorneys' fees and
other costs and expenses incurred with the investigation, preparation and
prosecution of such action or proceeding.

                                      -25-


<PAGE>

         5.10 SURVIVAL. The representations and warranties contained herein
shall survive the Closing and the delivery, exercise and/or conversion of the
Securities, as applicable for the applicable statue of limitations.

         5.11 EXECUTION. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) such document with the same force and effect as if such facsimile
signature page were an original thereof.

         5.12 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 and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.

         5.13 RESCISSION AND WITHDRAWAL RIGHT. Notwithstanding anything to the
contrary contained in (and without limiting any similar provisions of) the
Transaction Documents, whenever any Purchaser exercises a right, election,
demand or option under a Transaction Document and the Company does not timely
perform its related obligations within the periods therein provided, then such
Purchaser may rescind or withdraw, in its sole discretion from time to time upon
written notice to the Company, any relevant notice, demand or election in whole
or in part without prejudice to its future actions and rights; PROVIDED,
HOWEVER, in the case of a rescission of a conversion of a Debenture or exercise
of a Warrant, the Purchaser shall be required to return any shares of Common
Stock subject to any such rescinded conversion or exercise notice.

         5.14 REPLACEMENT OF SECURITIES. If any certificate or instrument
evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon
cancellation thereof, or in lieu of and substitution therefor, a new certificate
or instrument, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable
indemnity, if requested.

         5.15 REMEDIES. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Purchasers and the Company will be entitled to specific performance under the
Transaction Documents. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agrees to waive in
any action for specific performance of any such obligation the defense that a
remedy at law would be adequate.

         5.16 PAYMENT SET ASIDE. To the extent that the Company makes a payment
or payments to any Purchaser pursuant to any Transaction Document or a Purchaser

                                      -26-


<PAGE>

enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver or any other person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.

         5.17 USURY. To the extent it may lawfully do so, the Company hereby
agrees not to insist upon or plead or in any manner whatsoever claim, and will
resist any and all efforts to be compelled to take the benefit or advantage of,
usury laws wherever enacted, now or at any time hereafter in force, in
connection with any claim, action or proceeding that may be brought by any
Purchaser in order to enforce any right or remedy under any Transaction
Document. Notwithstanding any provision to the contrary contained in any
Transaction Document, it is expressly agreed and provided that the total
liability of the Company under the Transaction Documents for payments in the
nature of interest shall not exceed the maximum lawful rate authorized under
applicable law (the "MAXIMUM RATE"), and, without limiting the foregoing, in no
event shall any rate of interest or default interest, or both of them, when
aggregated with any other sums in the nature of interest that the Company may be
obligated to pay under the Transaction Documents exceed such Maximum Rate. It is
agreed that if the maximum contract rate of interest allowed by law and
applicable to the Transaction Documents is increased or decreased by statute or
any official governmental action subsequent to the date hereof, the new maximum
contract rate of interest allowed by law will be the Maximum Rate applicable to
the Transaction Documents from the effective date forward, unless such
application is precluded by applicable law. If under any circumstances
whatsoever, interest in excess of the Maximum Rate is paid by the Company to any
Purchaser with respect to indebtedness evidenced by the Transaction Documents,
such excess shall be applied by such Purchaser to the unpaid principal balance
of any such indebtedness or be refunded to the Company, the manner of handling
such excess to be at such Purchaser's election.

         5.18 INDEPENDENT NATURE OF PURCHASERS' OBLIGATIONS AND RIGHTS. The
obligations of each Purchaser under any Transaction Document are several and not
joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under any Transaction Document. Nothing contained herein or in any
Transaction Document, and no action taken by any Purchaser pursuant thereto,
shall be deemed to constitute the Purchasers as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Document. Each
Purchaser shall be entitled to independently protect and enforce its rights,
including without limitation the rights arising out of this Agreement or out of
the other Transaction Documents, and it shall not be necessary for any other
Purchaser to be joined as an additional party in any proceeding for such
purpose. Each Purchaser has been represented by its own separate legal counsel
in their review and negotiation of the Transaction Documents. For reasons of
administrative convenience only, Purchasers and their respective counsel have
chosen to communicate with the Company through RP. RP does not represent all of

                                      -27-


<PAGE>

the Purchasers but only Platinum, the placement agent to the transaction. The
Company has elected to provide all Purchasers with the same terms and
Transaction Documents for the convenience of the Company and not because it was
required or requested to do so by the Purchasers.

         5.19 LIQUIDATED DAMAGES. The Company's obligations to pay any
liquidated damages or other amounts owing under the Transaction Documents is a
continuing obligation of the Company and shall not terminate until all unpaid
liquidated damages and other amounts have been paid notwithstanding the fact
that the instrument or security pursuant to which such liquidated damages or
other amounts are due and payable shall have been canceled.

                            (SIGNATURE PAGES FOLLOW)

                                      -28-


<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.


VISIJET, INC.                                 Address for Notice:
                                              -------------------


By: /s/ Laurence M. Schreiber                 192 Technology, Suite Q
     Name:  Laurence M. Schreiber             Irvine, CA 92618
     Title: COO, Corporate Secretary and Treasurer


With a copy to                                Richardson & Patel, LLP
(which shall not constitute notice):          10900 Wilshire Blvd, Suite 500
                                              Los Angeles, CA 90024
                                              Attention:  Kevin Friedmann, Esq.

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

                                      -29-


<PAGE>

        [PURCHASER SIGNATURE PAGES TO VJET SECURITIES PURCHASE AGREEMENT]

         IN WITNESS WHEREOF, the undersigned have caused this Securities
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.


Name of Investing Entity: _____________________________________________________
SIGNATURE OF AUTHORIZED SIGNATORY OF INVESTING ENTITY: ________________________
Name of Authorized Signatory: _________________________________________________
Title of Authorized Signatory: ________________________________________________
Email Address of Authorized Entity:____________________________________________

Address for Notice of Investing Entity:


Address for Delivery of Securities for Investing Entity (if not same as above):


Subscription Amount:
Shares:
Warrant Shares:
EIN Number:  [PROVIDE THIS UNDER SEPARATE COVER]

                           [SIGNATURE PAGES CONTINUE]

                                      -30-