Exhibit 10.1

                          SECURITIES PURCHASE AGREEMENT

      This Securities Purchase Agreement (this "Agreement") is dated as of
December 27, 2005, among World Waste Technologies, Inc., a California
corporation (the "Company"), and each purchaser identified on the signature
pages hereto, including purchasers and holders of Existing Securities that
execute this Agreement after the date hereof in accordance with Section 2.1(b)
hereof (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. With respect to a Purchaser, any
      investment fund or managed account that is managed on a discretionary
      basis by the same investment manager as such Purchaser will be deemed to
      be an Affiliate of such Purchaser.

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

            "Closing Date" means the second Trading Day following the Trading
      Day when all conditions precedent to (i) the Purchasers' obligations to
      pay their respective Subscription Amounts and (ii) the Company's
      obligations to deliver the Debentures and Warrants have been satisfied or
      waived.

            "Commission" means the Securities and Exchange Commission.

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            "Common Stock" means the common stock of the Company, par value
      $0.001 per share, and any other class of securities into which such
      securities may hereafter have been reclassified or changed into.

            "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 exercisable or exchangeable for, or otherwise entitles
      the holder thereof to receive, Common Stock.

            "Company Counsel" means Troy & Gould, 1801 Century Park East, 16th
      Floor, Los Angeles, California 90067.

            "Debentures" means the 10% Senior Secured Debentures to be issued by
      the Company to the Purchasers at the Closing, in the form of Exhibit A.

            "Disclosure Schedules" shall have the meaning ascribed to such term
      in Section 3.1.

            "Discussion Time" shall have the meaning ascribed to such term in
      Section 3.2(f).

            "Effective Date" means the date that the initial registration
      statement filed by the Company registering the Warrant Shares for resale
      is first declared effective by the Commission.

            "Evaluation Date" shall have the meaning ascribed to such term in
      Section 3.1(r).

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

            "Exchange Offer" shall have the meaning ascribed to such term in
      Section 2.1(b).

            "Exempt Issuance" means the issuance of (a) shares of Common Stock
      or options to employees, officers, consultants or directors of the Company
      pursuant to any stock or option plan duly adopted by a majority of the
      non-employee members of the Board of Directors of the Company or a
      majority of the members of a committee of non-employee directors
      established for such purpose, (b) securities upon the exercise or exchange
      of any Securities issued hereunder and/or securities exercisable or
      exchangeable for or convertible into shares of Common Stock 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 or to decrease the exercise, exchange or
      conversion price of any such securities, (c) the exchange of securities
      pursuant to the Exchange Offer, (d) securities issued pursuant to
      acquisitions or strategic transactions, provided any such issuance shall
      only be to a Person which is, itself or through its subsidiaries, an
      operating company in a business synergistic with the business of the
      Company and in which the Company receives benefits in addition to the
      investment of funds in the good faith determination of the Board of
      Directors of the Company, but shall not include a transaction in which the
      Company is issuing securities primarily for the purpose of raising capital
      or to an entity whose primary business is investing in securities, (d)
      shares of Common Stock issued upon conversions, redemptions and additional
      shares issued on account of adjustments of the Company's Series A
      Preferred Stock or any accrued dividends thereon and securities issued as
      consideration to the Series A Preferred Stock holders to obtain consent or
      waivers, (e) shares of Common Stock issued in a public offering, (f)
      securities issued to financial institutions, equipment leasing companies
      or lessors in connection with any commercial credit arrangements,
      equipment financings or other similar transactions, or other vendors, (g)
      securities issued in connection with the acquisition of intellectual
      property or other intangible rights in licensing transactions or otherwise
      to existing or potential trade partners; securities issued in connection
      with any stock split, recapitalization or similar transaction, (h)
      securities issued as dividend or other distribution on the Company's
      Series A Preferred Stock, or (i) usual and customary securities issued to
      finders or brokers in fund raising transactions.


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<PAGE>

            "Existing Notes" shall have the meaning ascribed to such term in
      Section 2.1(b).

            "Existing Securities" shall have the meaning ascribed to such term
      in Section 2.1(b).

            "Existing Security Holder" shall have the meaning ascribed to such
      term in Section 2.1(b).

            "FW" means Feldman Weinstein LLP with offices located at 420
      Lexington Avenue, Suite 2620, New York, New York 10170-0002.

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

            "Indebtedness" shall have the meaning ascribed to such term in
      Section 3.1(aa).

            "Intellectual Property Rights" shall have the meaning ascribed to
      such term in Section 3.1(o).

            "Knowledge of the Company" shall mean actual awareness of a fact, or
      awareness of a fact if a prudent individual could be expected to discover
      or otherwise become aware of such fact or other matter in the course of
      conducting a reasonably comprehensive investigation concerning the
      existence of such fact or other matter, by the Company's management
      installed since August 25, 2004.

            "Legend Removal Date" shall have the meaning ascribed to such term
      in Section 4.1(c).

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


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<PAGE>

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

            "Material Permits" shall have the meaning ascribed to such term in
      Section 3.1(m).

            "Maximum Rate" shall have the meaning ascribed to such term in
      Section 5.17.

            "Necessary Existing Securityholder Approval" shall have the meaning
      ascribed to such term in Section 2.1(b).

            "Participation Maximum" shall have the meaning ascribed to such term
      in Section 4.13.

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

            "Pre-Notice" shall have the meaning ascribed to such term in Section
      4.13.

            "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.

            "Purchaser Party" shall have the meaning ascribed to such term in
      Section 4.11.

            "Qualified Purchaser" shall mean any Purchaser that purchases at the
      Closing at least $1,000,000 principal amount of Debentures until such
      Purchaser no longer holds any Debentures or Warrants.

            "Registration Rights Agreement" means a registration rights
      agreement among the Company, the Purchasers and the Existing
      Securityholders, in the form of Exhibit F attached hereto.

            "Restriction Date" shall have the meaning ascribed to such term in
      Section 4.15.

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

            "Required Minimum" means, as of any date, the maximum aggregate
      number of shares of Common Stock then issued or potentially issuable in
      the future pursuant to the Transaction Documents, including any Warrant
      Shares issuable upon exercise in full of all Warrants, ignoring any
      exercise limits set forth therein.

            "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.


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<PAGE>

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

            "Securities" means the Debentures, the Warrants and the Warrant
      Shares.

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

            "Security Agreement" means a Security Agreement among the Company,
      the Purchasers and the Existing Securityholders, in the form of Exhibit D
      attached hereto.

            "Security Documents" shall mean the Security Agreement, the
      Subsidiary Guarantee and any other documents and filing required
      thereunder in order to grant the Purchasers a first priority security
      interest in the assets of the Company as provided, and subject to the
      exceptions set forth in the Security Agreement, including all UCC-1 filing
      receipts.

            "Short Sales" shall include all "short sales" as defined in Rule 200
      of Regulation SHO under the Exchange Act.

            "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", (a) in United
      States Dollars and in immediately available funds by wire transfer to such
      accounts as specified in writing by the Company or (b) in exchange for
      Existing Securities on a $1 for $1 basis with respect to the Debentures
      (including accrued but unpaid interest thereon).

            "Subsequent Financing" shall have the meaning ascribed to such term
      in Section 4.13.

            "Subsequent Financing Notice" 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).

            "Subsidiary Guarantee" means a Subsidiary Guarantee, among each of
      the Subsidiaries (other than subsidiaries that have no material assets)
      and the Purchasers, in the form of Exhibit E attached hereto.

            "Trading Day" means a day on which the Common Stock is traded on a
      Trading Market.


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<PAGE>

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

            "Transaction Documents" means this Agreement, the Debentures, the
      Security Agreement, the Subsidiary Guarantee, the Warrants and any other
      documents or agreements executed in connection with the transactions
      contemplated hereunder.

            "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 Qualified Purchasers and reasonably
      acceptable to the Company.

            "Warrants" means collectively the Common Stock purchase warrants, in
      the form of Exhibit C, to be delivered to the Purchasers at the Closing in
      accordance with Section 2.2 hereof, which Warrants shall be exercisable
      immediately as of the Closing Date and have a term of exercise equal to 4
      years from the Closing Date.

            "Warrant Shares" means the shares of Common Stock issuable upon
      exercise of the Warrants.

                                  ARTICLE II.
                                PURCHASE AND SALE

      2.1 Closing.

            (a) On the Closing Date, upon the terms and subject to the
      conditions set forth herein, the Company agrees to sell, and each
      Purchaser agrees to purchase in the aggregate, severally and not jointly,
      up to $8,265,000 principal amount of Debentures (plus such additional
      principal amount of Debentures to take into account any accrued but unpaid
      interest through the Closing Date with respect to any Existing Notes) and
      Warrants to purchase up to a total of 528,000 shares of Common Stock. At
      the Closing, and except as set forth in Section 2.1(b), each Purchaser
      shall deliver to the Company via wire transfer or a certified check
      immediately available funds equal to their respective Subscription Amount
      and the Company shall deliver to each Purchaser their respective Debenture
      and Warrants and the parties shall deliver to each other the other items
      set forth in Section 2.2 issuable at the Closing. Notwithstanding anything
      herein to the contrary, because the Existing Securityholders received
      warrants in connection with the issuance of the Existing Notes, no
      Existing Shareholders shall receive any Warrants hereunder. Upon
      satisfaction of the conditions set forth in Section 2.2, the Closing shall
      occur on the Closing Date at the offices of FW, or such other location as
      the parties shall mutually agree.


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<PAGE>

            (b) In November 2005, the Company issued and sold $4,015,000
      aggregate principal amount of senior secured notes (the "Existing Notes"
      or the "Existing Securities") together with warrants to purchase up to a
      total of 529,980 shares of Common Stock to a number of accredited
      investors (the "Existing Securityholders"). The approval of the holders of
      at least 75% principal amount of Existing Notes (the "Necessary Existing
      Securityholder Approval") is necessary in order for the Company to issue
      the Debentures hereunder. Following the date hereof, the Company shall use
      commercially reasonable efforts to obtain the Necessary Existing
      Securityholder Approval. Additionally, following the date hereof, the
      Company shall offer each Existing Securityholder (the "Exchange Offer")
      the right to surrender its Existing Notes (together with any accrued but
      unpaid interest thereon through the Closing Date) to the Company for
      cancellation in exchange for the issuance to such Existing Securityholder
      of Debentures in the same aggregate principal amount of the Existing Notes
      (together with accrued but unpaid interest thereon) being exchanged. Each
      Existing Securityholder that accepts the Exchange Offer shall be required
      to execute this Agreement, whereupon such Existing Securityholder shall be
      deemed a "Purchaser" hereunder. The Company agrees to keep the Exchange
      Offer open until January 27, 2006. Any Existing Securityholder that
      accepts the Exchange Offer after the Closing Date shall be required to
      execute this Agreement and deliver to the Company the documents and
      instruments set forth in Section 2.2, and the Company shall be required to
      deliver to such Existing Securityholder the documents set forth in Section
      2.3, whereupon such Existing Securityholder shall also be deemed to be a
      "Purchaser" hereunder. In addition to the foregoing, subsequent to the
      date of this Agreement (but prior to the Closing Date), additional
      purchasers of up to an aggregate of $2,000,000 principal amount of
      Debentures and Warrants to purchase up to an additional 264,000 shares of
      Common Stock may, at the Company's option, execute this Agreement,
      whereupon such purchasers shall be deemed to be "Purchasers" hereunder.

      2.2 Deliveries.

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

                  (i) this Agreement duly executed by the Company;

                  (ii) a legal opinion of Company Counsel, reasonably acceptable
            to the Qualified Purchasers;

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


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<PAGE>

                  (iv) a Warrant registered in the name of such Purchaser to
            purchase up to a number of shares of Common Stock equal to 33% of
            such Purchaser's Subscription Amount divided by $2.50, with an
            exercise price equal to $0.01 per share, subject to adjustment
            therein (except that Existing Securityholders shall not receive any
            Warrants);

                  (v) the Registration Rights Agreement, duly executed by the
            Company; and

                  (vi) the Security Agreement, duly executed by the Company,
            along with all the Security Documents, including the Subsidiary
            Guarantee.

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

                  (i) this Agreement duly executed by such Purchaser;

                  (ii) such Purchaser's Subscription Amount;

                  (iii) the Registration Rights Agreement, duly executed by such
            Purchaser;

                  (iv) the Security Agreement, duly executed by such Purchaser;
            and

                  (v) with respect to each Purchaser that is an Existing
            Securityholder, such Purchaser's Existing Securities for
            cancellation.

      2.3 Closing Conditions.

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

                  (i) the accuracy in all material respects when made and on the
            Closing Date of the representations and warranties of the Purchasers
            contained herein;

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

                  (iii) the delivery by the Purchasers of the items set forth in
            Section 2.2(b) of this Agreement.

            b) The respective obligations of the Purchasers hereunder in
      connection with the Closing are subject to the following conditions being
      met or waived by each Qualified Purchaser:


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<PAGE>

                  (i) the accuracy in all material respects on the Closing Date
            of the representations and warranties of the Company contained
            herein;

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

                  (iii) the delivery by the Company of the items set forth in
            Section 2.2(a) of this Agreement;

                  (iv) there shall have been no Material Adverse Effect with
            respect to the Company since the date hereof;

                  (v) the Exchange Offer has been accepted by the holders of at
            least $3,515,000 aggregate principal amount of Existing Notes, and
            such accepting holders shall have executed this Agreement and
            delivered to the Company (to be held by the Company in escrow
            pending the Closing) all of the documents and instruments required
            to be delivered by such Purchaser under Section 2.2 (b); and

                  (vi) from the date hereof to the Closing Date, trading in the
            Common Stock shall not have been suspended by the Commission (except
            for any suspension of trading of limited duration agreed to by the
            Company, which suspension shall be terminated prior to the Closing),
            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 any 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 Qualified 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
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.


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<PAGE>

            (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 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 to
      subscribe for or purchase securities.

            (b) Organization and Qualification. The Company and each of the
      Subsidiaries is an entity duly incorporated or otherwise organized,
      validly existing and in good standing under the laws of the jurisdiction
      of its incorporation or organization (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 or default 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 conduct business and is in good standing
      as a foreign corporation or other entity in each jurisdiction in which the
      nature of the business conducted or property owned by it makes such
      qualification necessary, except where the failure to be so qualified or in
      good standing, as the case may be, could not have or reasonably be
      expected to result in (i) a material adverse effect on the legality,
      validity or enforceability of any Transaction Document, (ii) a material
      adverse effect on the results of operations, assets, business or condition
      (financial or otherwise) of the Company and the Subsidiaries, taken as a
      whole, or (iii) a material adverse effect on the Company's ability to
      perform in any material respect on a timely basis its obligations under
      any Transaction Document (any of (i), (ii) or (iii), a "Material Adverse
      Effect") and no Proceeding has been instituted in any such jurisdiction
      revoking, limiting or curtailing or seeking to revoke, limit or curtail
      such power and authority or qualification.

            (c) Authorization; Enforcement. The Company has the requisite
      corporate power and authority to enter into and to consummate the
      transactions contemplated by each of the Transaction Documents and
      otherwise to carry out its obligations hereunder and thereunder. The
      execution and delivery of each of the Transaction Documents by the Company
      and the consummation by it of the transactions contemplated thereby have
      been duly authorized by all necessary action on the part of the Company
      and no further action is required by the Company, its board of directors
      or its stockholders in connection therewith other than in connection with
      the Required Approvals. Each Transaction Document has been (or upon
      delivery will have been) duly executed by the Company and, when delivered
      in accordance with the terms hereof and thereof, will constitute the valid
      and binding obligation of the Company enforceable against the Company in
      accordance with its terms except (i) as limited by 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.

            (d) No Conflicts. The execution, delivery and performance of the
      Transaction Documents by the Company and the consummation by the Company
      of the other transactions contemplated hereby and thereby do not and will
      not: (i) subject to the Required Approvals, 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) conflict with, or constitute a default (or an event that with notice
      or lapse of time or both would become a default) under, result in the
      creation of any Lien upon any of the properties or assets of the Company
      or any Subsidiary, or give to others any rights of termination, amendment,
      acceleration or cancellation (with or without notice, lapse of time or
      both) of, any agreement, credit facility, debt or other instrument
      (evidencing a Company or Subsidiary debt or otherwise) or other
      understanding to which the Company or any Subsidiary is a party or by
      which any property or asset of the Company or any Subsidiary is bound or
      affected, or (iii) subject to the Required Approvals, conflict with or
      result in a violation of any law, rule, regulation, order, judgment,
      injunction, decree or other restriction of any court or governmental
      authority to which the Company or a Subsidiary is subject (including
      federal and state securities laws and regulations), or by which any
      property or asset of the Company or a Subsidiary is bound or affected;
      except in the case of each of clauses (ii) and (iii), such as could not
      have or reasonably be expected to result in a Material Adverse Effect.


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<PAGE>

            (e) Filings, Consents and Approvals. The Company is not required to
      obtain any consent, waiver, authorization or order of, give any notice to,
      or make any filing or registration with, any court or other federal,
      state, local or other governmental authority or other Person in connection
      with the execution, delivery and performance by the Company of the
      Transaction Documents, other than (i) filings required pursuant to Section
      4.6 and (ii) the filing of Form D with the Commission and such filings as
      are required to be made under applicable state securities laws
      (collectively, the "Required Approvals").

            (f) Issuance of the Warrant Shares. The Warrant Shares, when issued
      and upon payment of the exercise price in accordance with the terms of the
      Transaction Documents, will be validly issued, fully paid and
      nonassessable, free and clear of all Liens imposed by the Company. The
      Company has reserved from its duly authorized capital stock a number of
      shares of Common Stock for issuance of the Warrant Shares at least equal
      to the Required Minimum on the date hereof.

            (g) Capitalization. The capitalization of the Company is as set
      forth on Schedule 3.1(g). 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 to the extent any such rights have been waived. Except as a result
      of the purchase and sale of the Securities and as set forth on Schedule
      3.1(g), 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 exercisable
      or exchangeable for, or giving any Person any right to subscribe for or
      acquire, any shares of Common Stock, or contracts, commitments,
      understandings or arrangements by which the Company or any Subsidiary is
      or may become bound to issue additional shares of Common Stock or Common
      Stock Equivalents. The issuance and sale of the Securities will not
      obligate the Company to issue shares of Common Stock or other securities
      to any Person (other than the Purchasers) and will not result in a right
      of any holder of Company securities to adjust the exercise, conversion,
      exchange or reset price under 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 Securities. 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.


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<PAGE>

            (h) SEC Reports; Financial Statements. The Company has filed all
      reports, schedules, forms, statements and other documents required to be
      filed by it under the Securities Act and 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, including the exhibits
      thereto and documents incorporated by reference therein, being
      collectively referred to herein as the "SEC Reports") on a timely basis or
      has received a valid extension of such time of filing and has filed any
      such SEC Reports prior to the expiration of any such extension. As of
      their respective dates, the SEC Reports complied in all material respects
      with the requirements of the Securities Act and the Exchange Act 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 the light
      of the circumstances under which they were made, not misleading. The
      financial statements of the Company included in the SEC Reports comply in
      all material respects with applicable accounting requirements and the
      rules and regulations of the Commission with respect thereto as in effect
      at the time of filing. Such financial statements have been prepared in
      accordance with United States generally accepted accounting principles
      applied on a consistent basis during the periods involved ("GAAP"), except
      as may be otherwise specified in such financial statements or the notes
      thereto and except that unaudited financial statements may not contain all
      footnotes required by GAAP, and fairly present in all material respects
      the financial position of the Company and its consolidated Subsidiaries as
      of and for the dates thereof and the results of operations and cash flows
      for the periods then ended, subject, in the case of unaudited statements,
      to normal, immaterial, year-end audit adjustments.

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


                                      -12-
<PAGE>

            (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, 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.
      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, to the Company's Knowledge, 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) 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 which could reasonably be expected to result in a Material
      Adverse Effect.

            (l) 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, to the Knowledge of the Company, has
      been in violation of any statute, rule or regulation of any governmental
      authority, including without limitation all foreign, federal, state and
      local laws applicable to its business, except in the case of each of (i),
      (ii) and (iii) as would not reasonably be expected to have a Material
      Adverse Effect.

            (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 would not 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.


                                      -13-
<PAGE>

            (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
      and Liens for the payment of federal, state or other taxes, the payment of
      which is neither delinquent nor subject to penalties. Any real property
      and facilities held under lease by the Company and the Subsidiaries are
      held by them under valid, subsisting and enforceable leases 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 would have a Material Adverse Effect, except for such
      items as have yet to be conceived or developed or that are expected to be
      available for licensing on reasonable terms from third parties
      (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 of others.

            (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, including, but not
      limited to, directors and officers insurance coverage at least equal to
      the aggregate Subscription Amount. To the best Knowledge of the Company,
      such insurance contracts and policies are accurate and complete in all
      material respects. Neither the Company nor any Subsidiary has any reason
      to believe that 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.

            (q) Transactions With Affiliates and Employees. Except as set forth
      in the SEC Reports, 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, in each case in excess of
      $60,000 other than (i) for payment of salary or consulting fees for
      services rendered, (ii) reimbursement for expenses incurred on behalf of
      the Company and (iii) for other employee benefits, including stock option
      agreements under any stock option plan of the Company.


                                      -14-
<PAGE>

            (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 disclosure 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 Knowledge of the Company, in other factors that could
      significantly affect the Company's internal controls.

            (s) 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 the Transaction
      Documents. The Purchasers shall have no obligation with respect to any
      fees or with respect to any claims made by or on behalf of other Persons
      for fees of a type contemplated in this Section that may be due in
      connection with the transactions contemplated by the Transaction
      Documents.

            (t) Private Placement. Assuming the accuracy of the Purchasers
      representations and warranties set forth in Section 3.2, no registration
      under the Securities Act is required for the offer and sale of the
      Securities by the Company to the Purchasers as contemplated hereby. The
      issuance and sale of the Securities hereunder does not contravene the
      rules and regulations of the Trading Market.


                                      -15-
<PAGE>

            (u) Investment Company. The Company is not, and is not an Affiliate
      of, and immediately after receipt of payment for the Securities, will not
      be or become an Affiliate of, an "investment company" within the meaning
      of the Investment Company Act of 1940, as amended. The Company shall
      conduct its business in a manner so that it will not become subject to the
      Investment Company Act.

            (v) Registration Rights. No Person has any right to cause the
      Company to effect the registration under the Securities Act of any
      securities of the Company.

            (w) 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 the Knowledge of the
      Company 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.

            (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 Articles 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) 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
      reasonably be deemed to constitute material, nonpublic information. The
      Company understands and confirms that the Purchasers will rely on the
      foregoing representations and covenants 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 Disclosure 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 in all material respects 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 the 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.


                                      -16-
<PAGE>

            (z) No Integrated Offering. Assuming the accuracy of the Purchasers'
      representations and warranties set forth in Section 3.2, neither the
      Company, nor any of its Affiliates, nor any Person acting on its or their
      behalf has, directly or indirectly, made any offers or sales of any
      security or solicited 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 any
      applicable shareholder approval provisions, including, without limitation,
      under the rules and regulations of any Trading Market on which any of the
      securities of the Company are listed or designated, except to the extent
      that any such integration would not have a Material Adverse Effect.

            (aa) Solvency. 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 $50,000 (other
      than trade accounts payable incurred in the ordinary course of business),
      (b) all guaranties, endorsements and other contingent obligations in
      respect of Indebtedness of others, whether or not the same are or should
      be reflected in the Company's balance sheet (or the notes thereto), except
      guaranties by endorsement of negotiable instruments for deposit or
      collection or similar transactions in the ordinary course of business; and
      (c) the present value of any lease payments in excess of $50,000 due under
      leases required to be capitalized in accordance with GAAP. Neither the
      Company nor any Subsidiary is in default with respect to any Indebtedness.

            (bb) Tax Status. Except for matters that would not, individually or
      in the aggregate, have or reasonably be expected to result in a Material
      Adverse Effect, the Company and each Subsidiary has filed all necessary
      federal, state and foreign income and franchise tax returns and has paid
      or accrued all taxes shown as due thereon, and to the Knowledge of the
      Company, no tax deficiency exists which has been asserted or threatened
      against the Company or any Subsidiary.

            (cc) No General Solicitation. Neither the Company nor any person
      acting on behalf of the Company has offered or sold any of the Securities
      by any form of general solicitation or general advertising. The Company
      has offered the Securities for sale only to the Purchasers and certain
      other "accredited investors" within the meaning of Rule 501 under the
      Securities Act.

            (dd) 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 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 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


                                      -17-
<PAGE>

            (ee) Accountants. The Company's accountants are set forth on
      Schedule 3.1(ee) of the Disclosure Schedule. To the Knowledge of the
      Company, such accountants, who expressed their opinion with respect to the
      financial statements included in the Company's Annual Report on Form
      10-KSB for the year ended December 31, 2004, are a registered public
      accounting firm as required by the Securities Act.

            (ff) Seniority. As of the Closing Date, no Indebtedness or other
      equity of the Company will be senior to the Debentures in right of
      payment, whether with respect to interest or upon liquidation or
      dissolution, or otherwise, other than Indebtedness secured by purchase
      money security interests (which is senior only as to underlying assets
      covered thereby) and capital lease obligations (which is senior only as to
      the property covered thereby).

            (gg) No Disagreements with Accountants and Lawyers. There are no
      material 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.

            (hh) Acknowledgment Regarding Purchasers' Purchase of Securities.
      The Company acknowledges and agrees that each of the Purchasers is acting
      solely in the capacity of an arm's length purchaser with respect to the
      Transaction Documents 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
      advice given by any Purchaser or any of their respective representatives
      or agents in connection with this Agreement and the transactions
      contemplated hereby 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 transactions contemplated hereby by the
      Company and its representatives.

            (ii) Acknowledgement Regarding Purchasers' Trading Activity.
      Anything in this Agreement or elsewhere herein to the contrary
      notwithstanding (except for Section 4.15 hereof), it is understood and
      agreed by the Company (i) that none of the Purchasers have been asked to
      agree, nor has any Purchaser agreed, to desist from purchasing or selling,
      long and/or short, securities of the Company, or "derivative" securities
      based on securities issued by the Company or to hold the Securities for
      any specified term; (ii) that past or future open market or other
      transactions by any Purchaser, including Short Sales, and specifically
      including, without limitation, Short Sales or "derivative" transactions,
      before or after the closing of this or future private placement
      transactions, may negatively impact the market price of the Company's
      publicly-traded securities; (iii) that each Purchaser, and counter parties
      in "derivative" transactions to which any such Purchaser is a party,
      directly or indirectly, presently may have a "short" position in the
      Common Stock, and (iv) that each Purchaser shall not be deemed to have any
      affiliation with or control over any arm's length counter-party in any
      "derivative" transaction. The Company further understands and acknowledges
      that (a) one or more of the Purchasers may engage in hedging activities at
      various times during the period that the Securities are outstanding,
      including, without limitation, during the periods that the value of the
      Warrant Shares deliverable with respect to Warrants are being determined
      and (b) such hedging activities (if any) could reduce the value of the
      existing stockholders' equity interests in the Company at and after the
      time that the hedging activities are being conducted. The Company
      acknowledges that such aforementioned hedging activities do not constitute
      a breach of any of the Transaction Documents.


                                      -18-
<PAGE>

            (jj) Manipulation of Price. The Company has not, and to the
      Knowledge of the Company, no one acting on its behalf has, (i) taken,
      directly or indirectly, any action designed to cause or to result in the
      stabilization or manipulation of the price of any security of the Company
      to facilitate the sale or resale of any of the Securities, (ii) sold, bid
      for, purchased, or, paid any compensation for soliciting purchases of, any
      of the Securities (other than for the placement agent's placement of the
      Securities), or (iii) paid or agreed to pay to any person any compensation
      for soliciting another to purchase any other securities of the Company.

      3.2 Representations and Warranties of the Purchasers. Each Purchaser
hereby, for itself and no other Purchaser, represents and warrants as of the
date hereof and as of the Closing Date 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 full right, 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 hereunder and thereunder. The execution, delivery and
      performance by such Purchaser of the transactions contemplated by this
      Agreement have been duly authorized by all necessary corporate or similar
      action on the part of such Purchaser. Each Transaction Document to which
      it is a party has been duly executed by Purchaser, and when delivered by
      such Purchaser in accordance with the terms hereof, will constitute the
      valid and legally binding obligation of such Purchaser, enforceable
      against it in accordance with its terms, except (i) as limited by general
      equitable principles and applicable bankruptcy, insolvency,
      reorganization, moratorium and other laws of general application affecting
      enforcement of creditors' rights generally, (ii) as limited by laws
      relating to the availability of specific performance, injunctive relief or
      other equitable remedies and (iii) insofar as indemnification and
      contribution provisions may be limited by applicable law.


                                      -19-
<PAGE>

            (b) Own Account. Such Purchaser understands that the Securities are
      "restricted securities" and have not been registered under the Securities
      Act or any applicable state securities law and is acquiring the Securities
      as principal for its own account and not with a view to or for
      distributing or reselling such Securities or any part thereof in violation
      of the Securities Act or any applicable state securities law, has no
      present intention of distributing any of such Securities in violation of
      the Securities Act or any applicable state securities law and has no
      arrangement or understanding with any other persons regarding the
      distribution of such Securities (this representation and warranty not
      limiting such Purchaser's right to sell the Securities pursuant to a
      registration statement or otherwise in compliance with applicable federal
      and state securities laws) in violation of the Securities Act or any
      applicable state securities law. 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.

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

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

            (e) 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 or as a result of any registration statement of the Company
      on Form SB-2 that may be on file with the Commission.

            (f) Short Sales and Confidentiality Prior To The Date Hereof. Other
      than the transaction contemplated hereunder, such Purchaser has not
      directly or indirectly, nor has any Person acting on behalf of or pursuant
      to any understanding with such Purchaser, executed any disposition,
      including Short Sales (but not including the location and/or reservation
      of borrowable shares of Common Stock), in the securities of the Company
      during the period commencing from the time that such Purchaser first
      received a term sheet from the Company or any other Person setting forth
      the material terms of the transactions contemplated hereunder until the
      date hereof ("Discussion Time"). Other than to other Persons party to this
      Agreement, such Purchaser has maintained the confidentiality of all
      disclosures made to it in connection with this transaction (including the
      existence and terms of this transaction).


                                      -20-
<PAGE>

            (g) Existing Securities. Each Purchaser that is an Existing
      Securityholder further represents and warrants that such Purchaser (i) has
      good and marketable title to its Existing Securities, (ii) has the right
      to exchange such securities without the consent of any other Person
      whatsoever and (iii) upon surrender of its Existing Securities to the
      Company for cancellation pursuant to the Exchange Offer such securities
      shall be owned by the Company free and clear of any liens, charges,
      encumbrances, rights of first refusal or other adverse claims whatsoever.

      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 or in connection with a
      pledge as contemplated in Section 4.1(b), the Company may require the
      transferor thereof to provide to the Company an opinion of counsel
      selected by the transferor and reasonably acceptable to the Company, the
      form and substance of which opinion shall be reasonably satisfactory to
      the Company, to the effect that such transfer does not require
      registration of such transferred Securities under the Securities Act. As a
      condition of transfer, any such transferee shall agree in writing to be
      bound by the terms of this Agreement and shall have the rights of a
      Purchaser under this Agreement.

            (b) The Purchasers agree to the imprinting, so long as is required
      by this Section 4.1(b), of a legend on any of the Securities in the
      following form:

      THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
      COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
      EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
      (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
      EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
      SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
      TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
      SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
      EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT,
      THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
      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.


                                      -21-
<PAGE>

            The Company acknowledges and agrees that any Purchaser may from time
      to time pledge pursuant to a bona fide margin agreement with a registered
      broker-dealer or grant a security interest in some or all of its
      Securities to a financial institution that is an "accredited investor" as
      defined in Rule 501(a) under the Securities Act and who agrees to be bound
      by the provisions of this Agreement and, if required under the terms of
      such arrangement, such Purchaser may transfer pledged or secured
      Securities to the pledgees or secured parties. Such a pledge or transfer
      would not be subject to approval of the Company and no legal opinion of
      legal counsel of the pledgee, secured party or pledgor shall be required
      in connection therewith. Further, no notice shall be required of such
      pledge. 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) under the Securities Act or
      other applicable provision of the Securities Act to appropriately amend
      the list of Selling Stockholders thereunder.

            (c) Certificates evidencing Warrant Shares shall not contain any
      legend (including the legend set forth in Section 4.1(b) hereof): (i)
      while a registration statement covering the resale of such security is
      effective under the Securities Act, or (ii) following any sale of such
      Securities pursuant to Rule 144, or (iii) if such Securities 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 that with respect to (ii) and (iii) the Purchaser holding the
      Warrant Shares provides the Company with the customary representations and
      forms required for a Rule 144 transfer opinion. 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 effect the removal of the legend hereunder. If all or any portion
      of a Warrant is exercised at a time when there is an effective
      registration statement to cover the resale of the Warrant Shares, or if
      such Warrant 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 Warrant 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 five Trading Days following
      the delivery by a Purchaser to the Company or the Company's transfer agent
      of a certificate representing Warrant Shares, as applicable, issued with a
      restrictive legend, together with a copy of the Form 144 filed with the
      Commission and a seller's and broker's representation letter (with respect
      to Rule 144 sales other than pursuant to Rule 144(k)) (such fifth 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.
      Certificates for Securities subject to legend removal hereunder shall be
      transmitted by the transfer agent of the Company to the Purchasers by
      crediting the account of the Purchaser's prime broker with the Depository
      Trust Company System.


                                      -22-
<PAGE>

            (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 $2,000 of Warrant 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), $10 per Trading Day (increasing to $20
      per Trading Day 5 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.

            (e) Each Purchaser severally and not jointly with the other
      Purchaser agrees that the removal of the restrictive legend from
      certificates representing Securities as set forth in this Section 4.1 is
      predicated upon the Company's reliance that each such Purchaser will sell
      any Securities pursuant to either the registration requirements of the
      Securities Act, including any applicable prospectus delivery requirements,
      or an exemption therefrom.

      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 Warrant
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. As long as any
Purchaser owns Securities, if the Company is not required to file reports
pursuant to the Exchange Act, it will prepare and furnish to the Purchasers and
make publicly available in accordance with Rule 144(c) such information as is
required for the Purchasers to sell the Securities 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.


                                      -23-
<PAGE>

      4.4 Integration. The Company shall not sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the offer or sale
of the Securities in a manner that would require the registration under the
Securities Act of the sale of the Securities 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 Exercise Procedures. The form of Notice of Exercise included in the
Warrants set forth the totality of the procedures required of the Purchasers in
order to exercise the Warrants. No additional legal opinion or other information
or instructions shall be required of the Purchasers to exercise their Warrants.
The Company shall honor exercises of the Warrants and shall deliver Warrant
Shares in accordance with the terms, conditions and time periods set forth in
the Transaction Documents.

      4.6 Securities Laws Disclosure; Publicity. The Company shall, by 5:30 p.m.
Eastern time on the fourth Trading Day following the date hereof, issue a
Current Report on Form 8-K, reasonably acceptable to each Qualified Purchaser
disclosing the material terms of the transactions contemplated hereby, and shall
attach the Transaction Documents thereto. The Company and the Qualified
Purchasers shall consult with each other in issuing any other press releases
with respect to the transactions contemplated hereby, and neither the Company
nor any Purchaser shall issue any such press release or otherwise make any such
public statement without the prior consent of the Company, with respect to any
press release of any Purchaser, or without the prior consent of each Qualified
Purchaser, with respect to any press release of the Company, which consent shall
not unreasonably be withheld (the failure of any such party to object within 24
hours to any such press release or public statement shall be deemed acceptance
of such press release or public statement), except if such disclosure is
required by law, in which case the disclosing party shall promptly provide the
other party with prior notice of such public statement or communication.
Notwithstanding the foregoing, the Company shall not publicly disclose the name
of any Purchaser, or include the name of any Purchaser in any filing with the
Commission or any regulatory agency or Trading Market, without the prior written
consent of each Qualified Purchaser, except (i) as required by federal
securities law in connection with the registration statement registering the
resale of the Warrant Shares and (ii) to the extent such disclosure is required
by law or Trading Market regulations, in which case the Company shall provide
the Purchasers with prior notice of such disclosure permitted under subclause
(i) or (ii).

      4.7 Shareholder Rights Plan. No claim will be made or enforced by the
Company or, to the Knowledge of the Company, any other Person that any Purchaser
is an "Acquiring Person" under any shareholder rights plan or similar plan or
arrangement in effect or hereafter adopted by the Company, or that any Purchaser
could be deemed to trigger the provisions of any such plan or arrangement, by
virtue of receiving Securities under the Transaction Documents or under any
other agreement between the Company and the Purchasers. The Company shall
conduct its business in a manner so that it will not become subject to the
Investment Company Act.

      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.


                                      -24-
<PAGE>

      4.9 Use of Proceeds. The Company shall be required to use the net proceeds
from the sale of the Securities hereunder specifically as set forth on Schedule
4.9 hereto.

      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
(except as a result of sales, pledges, margin sales and similar transactions by
such Purchaser to or with any current stockholder and except for a Proceeding
which is based upon a breach of such Purchaser's representations, warranties or
covenants under the Transaction Documents or any agreements or understandings
such Purchaser may have with any such stockholder or any violations by such
Purchaser of state or federal securities laws or any conduct by Purchaser which
constitutes fraud, gross negligence, willful misconduct or malfeasance), solely
as a result of such Purchaser's acquisition of the Securities under 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. The reimbursement obligations 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. Other than with respect to willful misconduct by a Purchaser in
connection with the acquisition of the Securities, 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.

      4.11 Indemnification of Purchasers. Subject to the provisions of this
Section 4.11, the Company will indemnify and hold the Purchasers and their
directors, officers, shareholders, members, 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 breach 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 action instituted
against a Purchaser, or any of them or their respective Affiliates, by any
stockholder of the Company who is not an Affiliate of such Purchaser, with
respect to any of the transactions contemplated by the Transaction Documents
(unless such action is based upon a breach of such Purchaser's representations,
warranties or covenants under the Transaction Documents or any agreements or
understandings such Purchaser may have with any such stockholder or any
violations by such Purchaser of state or federal securities laws or any conduct
by Purchaser which constitutes fraud, gross negligence, willful misconduct or
malfeasance). If any action shall be brought against any Purchaser Party in
respect of which indemnity may be sought pursuant to this Agreement, such
Purchaser Party shall promptly notify the Company in writing, and the Company
shall have the right to assume the defense thereof with counsel of its own
choosing. Any Purchaser Party shall have the right to employ separate counsel in
any such action and participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Purchaser Party except
to the extent that (i) the employment thereof has been specifically authorized
by the Company in writing, (ii) the Company has failed after a reasonable period
of time to assume such defense and to employ counsel or (iii) in such action
there is, in the reasonable opinion of such separate counsel, a material
conflict on any material issue between the position of the Company and the
position of such Purchaser Party. The Company will not be liable to any
Purchaser Party under this Agreement (i) for any settlement by a Purchaser Party
effected without the Company's prior written consent, which shall not be
unreasonably withheld or delayed; or (ii) to the extent, but only to the extent
that a loss, claim, damage or liability is attributable to any Purchaser Party's
breach of any of the representations, warranties, covenants or agreements made
by the Purchasers in this Agreement or in the other Transaction Documents.


                                      -25-
<PAGE>

      4.12 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 75th 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.

      4.13 Participation in Future Financing.

            (a) From the date hereof until the earlier of (i) the later of (A)
      18 months from the date hereof and (B) the date that the Debentures are no
      longer outstanding and (ii) the date that the Company has consummated, in
      the aggregate since the date hereof, the sale of at least $12,030,000 of
      the Company's securities in one or more Subsequent Financings following
      the Closing that are subject to the rights of participation under this
      Section 4.13 (provided that the $12,030,000 threshold shall be increased
      to up to $16,030,000 if and to the extent additional purchasers become a
      party to this Agreement subsequent to the date hereof as provided for in
      the last sentence of Section 2.1(b)), upon any financing by the Company or
      any of its Subsidiaries of Common Stock or Common Stock Equivalents after
      the date hereof (a "Subsequent Financing"), each Purchaser shall have the
      right to participate in up to an amount of the Subsequent Financing equal
      to the lesser of (i) 100% of the Subsequent Financing and (ii) the
      principal amount of such Purchaser's Debentures issued and sold by the
      Company pursuant to this Agreement (the "Participation Maximum").


                                      -26-
<PAGE>

            (b) At least 5 Trading Days prior to the closing of the Subsequent
      Financing, the Company shall deliver to each Purchaser a written notice of
      its intention to effect a Subsequent Financing ("Pre-Notice"), which
      Pre-Notice shall ask such Purchaser if it wants to review the details of
      such financing. Upon the written request of a Purchaser for the details of
      such financing (but subject to the provisions of (c) below), and only upon
      such a request by such Purchaser, the Company shall promptly, but no later
      than 1 Trading Day after such request, deliver a notice that describes
      such details (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.

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

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

            (e) If by 5:30 p.m. (New York City time) on the 5th Trading Day
      after all of the Purchasers have been sent the Pre-Notice with respect to
      a Subsequent Financing, the Company receives responses to a Subsequent
      Financing Notice from Purchasers seeking to purchase, in the aggregate,
      more than the aggregate amount of the Subsequent Financing, each such
      Purchaser shall have the right to purchase the greater of (a) their Pro
      Rata Portion (as defined below) of the Participation Maximum and (b) the
      difference between the Participation Maximum and the aggregate amount of
      participation by all other Purchasers. "Pro Rata Portion" is the ratio of
      (x) the Subscription Amount of Securities purchased on the Closing Date by
      a Purchaser participating under this Section 4.13 and (y) the sum of the
      aggregate Subscription Amounts of Securities purchased on the Closing Date
      by all Purchasers participating under this Section 4.13.


                                      -27-
<PAGE>

            (f) The Company must provide the Purchasers with a second Subsequent
      Financing Notice, and the Purchasers will again have the right of
      participation set forth above in this Section 4.13, if the Subsequent
      Financing subject to the initial Subsequent Financing Notice is not
      consummated for any reason on substantially the terms set forth in such
      Subsequent Financing Notice within 60 Trading Days after the date of the
      initial Subsequent Financing Notice.

            (g) Notwithstanding anything herein to the contrary, if the Company
      effects a Subsequent Financing at any time while the Debentures are
      outstanding, each Purchaser may elect, in its sole discretion, to exchange
      all or some of the Debentures then held by such Purchaser for any
      securities or combination of securities issued in such Subsequent
      Financing based on the effective price at which such securities were sold
      in such Subsequent Financing. For each $1 principal amount of Debenture
      exchanged, such Purchaser shall receive $1 of securities issued in such
      Subsequent Financing as if such Purchaser had paid for such securities in
      cash. This right to exchange Debentures into new securities shall be in
      addition to the Purchasers' rights to participate in the transaction for
      cash consideration pursuant to Section 4.13(a) but shall otherwise be
      subject to the procedures set forth in this Section 4.13 regarding notice
      and closing.

            (h) Upon exercise of any of the rights granted to the Purchasers
      hereunder, such Purchaser's right shall be conditioned upon the
      participating Purchasers entering into the same documents agreed to by the
      third party investors in the Subsequent Financing.

            (i) Notwithstanding the foregoing, this Section 4.13 shall not apply
      in respect to an Exempt Issuance.

            (j) Notwithstanding any provision in this Agreement or in any other
      Transaction Document to the contrary, provided that the Company complies
      with any obligations it has expressly agreed to and rights it has
      expressly granted to the Purchasers under the Transaction Documents,
      nothing else in any such agreement shall be interpreted to give any of the
      Purchasers (acting collectively or individually), the right to take any
      action that would block, delay or otherwise hinder the Company's ability
      to raise capital through the sale of Common Stock or Common Stock
      Equivalents that are not Indebtedness (unless such Indebtedness is used to
      prepay the Debentures). Without limiting the generality of the foregoing,
      the parties agree and acknowledge that any amendment to the Company's
      articles of incorporation, bylaws or other charter documents effectuated
      in order to enable the Company to issue Common Stock or Common Stock
      Equivalents in a bona fide round of financing (such as the creation of a
      new series of preferred stock, an increase in the Company's authorized
      shares of any class of capital stock, or any change requested by the
      holders of the Company's Series A Preferred Stock to the terms thereof in
      order to obtain such holders' consent to such financing) shall in no event
      be deemed to be an amendment that materially and adversely affects the
      rights of any Purchaser.


                                      -28-
<PAGE>

      4.14 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
purposes, this provision constitutes a separate right granted to each Purchaser
by the Company and negotiated separately by each Purchaser, and is intended for
the Company to treat the Purchasers as a class and shall not in any way be
construed as the Purchasers, if more than one, acting in concert or as a group
with respect to the purchase, disposition or voting of Securities or otherwise.

      4.15 Short Sales and Confidentiality After The Date Hereof. Each Purchaser
severally and not jointly with the other Purchasers covenants that neither it
nor any Affiliates acting on its behalf or pursuant to any understanding with it
will execute any disposition, including Short Sales (but not including the
location and/or reservation of borrowable shares of Common Stock), in the
securities of the Company during the period after the Discussion Time (as
defined in Section 3.2(f)) and ending on March 23, 2006 (the "Restriction
Date"). Each Purchaser severally and not jointly with the other Purchasers
covenants that until such time as the transactions contemplated by this
Agreement are publicly disclosed by the Company as described in Section 4.6,
such Purchaser will maintain, the confidentiality of all disclosures made to it
in connection with this transaction (including the existence and terms of this
transaction). Each Purchaser understands and acknowledges, severally and not
jointly with any other Purchaser, that the Commission currently takes the
position that coverage of short sales of shares of the Common Stock "against the
box" prior to the Effective Date of the registration statement registering such
Common Stock with the Commission is a violation of Section 5 of the Securities
Act, as set forth in Item 65, Section 5 under Section A, of the Manual of
Publicly Available Telephone Interpretations, dated July 1997, compiled by the
Office of Chief Counsel, Division of Corporation Finance. Notwithstanding the
foregoing, no Purchaser makes any representation, warranty or covenant hereby
that it will not engage in Short Sales in the securities of the Company after
the Restriction Date.

      4.16 Piggy-Back Registrations. If at any time prior to the 24-month
anniversary of the Closing Date there is not an effective registration statement
covering all of the Warrant Shares and the Company shall determine to prepare
and file with the Commission a registration statement relating to an offering
for its own account or the account of others under the Securities Act of any of
its equity securities, then the Company shall send to each Purchaser a written
notice of such determination and, if within fifteen days after the date of such
notice, any such Holder shall so request in writing, the Company shall include
in such registration statement all or any part of such Warrant Shares as such
Holder requests to be registered (if and to the extent such inclusion is
permitted by the rules and regulations of the Commission). The registration
rights of the Purchasers are set forth more fully in the Registration Rights
Agreement.


                                      -29-
<PAGE>

                                   ARTICLE V.
                                  MISCELLANEOUS

      5.1 Termination. This Agreement may be terminated by any Purchaser, as to
such Purchaser's obligations hereunder only and without any effect whatsoever on
the obligations between the Company and the other Purchasers, by written notice
to the other parties, if the Closing has not been consummated on or before
January 27, 2006; provided, however, that no such termination will affect the
right of any party to sue for any breach by the other party (or parties). This
Agreement may be terminated by the Company at any time after January 27, 2006 if
the Company has not obtained the Necessary Existing Securityholder Approval by
such date; provided that the Company has complied with its obligations in
Section 2.1(b) to use commercially reasonable efforts to obtain such approval
and it provides to the Qualified Purchasers, upon their request, documentation
evidencing the same (or if such documentation is not available they represent in
writing that such approval was not obtained despite the Company's compliance
with Section 2.1 (b)).

      5.2 Fees and Expenses. At the Closing, the Company has agreed to reimburse
Midsummer Capital, LLC ("Midsummer") up to $10,000, for its actual, reasonable,
out-of-pocket legal fees and expenses. Except as expressly set forth in the
Transaction Documents to the contrary, each party shall pay the fees and
expenses of its advisers, counsel, accountants and other experts, if any, and
all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement. The Company
shall pay all transfer agent fees, stamp taxes and other taxes and duties levied
in connection with the delivery of any Securities.

      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
set forth on the signature pages attached hereto prior to 5:30 p.m. (New York
City time) on a Trading Day, (b) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number set forth on the signature pages attached hereto on a day that
is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading
Day, (c) the 2nd Trading Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service, or (d) upon actual receipt by
the party to whom such notice is required to be given. The address for such
notices and communications shall be as set forth on the signature pages attached
hereto.

      5.5 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 Qualified 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
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.


                                      -30-
<PAGE>

      5.6 Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. 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 each Qualified Purchaser. Any Purchaser may
assign any or all of its rights under this Agreement to any Person to whom such
Purchaser assigns or transfers any Securities, provided such transferee agrees
in writing to be bound, with respect to the transferred Securities, by the
provisions hereof that apply to the "Purchasers".

      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. 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 any 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 reasonable attorneys' fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or proceeding.


                                      -31-
<PAGE>

      5.10 Survival. The representations and warranties contained herein shall
survive the Closing and the delivery and exercise of the Securities 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, it being understood that all 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) 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 an exercise of a Warrant, the Purchaser
shall be required to return any shares of Common Stock subject to any such
rescinded 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. The applicants for a new certificate or instrument
under such circumstances shall also pay any reasonable third-party costs
associated with the issuance of such replacement Securities.

      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.


                                      -32-
<PAGE>

      5.16 Payment Set Aside. To the extent that the Company makes a payment or
payments to a Purchaser pursuant to any Transaction Document or a Purchaser
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, if any, 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, if more than one, as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated by the
Transaction Documents. Each Purchaser shall be entitled to independently protect
and enforce its rights, including without limitation the rights arising out of
this Agreement or out of the other Transaction Documents (provided that the
action of the holders of at least 30% of the aggregate principal amount of
Debentures is required to call an Event of Default (as defined in the
Debentures) under the Debentures), 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, or been given the opportunity to
be represented by its own separate legal counsel in its 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 FW. FW does not represent all of the Purchasers but only
Midsummer. 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.


                                      -33-
<PAGE>

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

      5.20 Construction. The parties agree that each of them and/or their
respective counsel has reviewed and had an opportunity to revise the Transaction
Documents and, therefore, the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of the Transaction Documents or any amendments hereto.

                            (Signature Pages Follow)


                                      -34-
<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.

WORLD WASTE TECHNOLOGIES, INC.                        Address for Notice:
                                                      -------------------


By:
   --------------------------------------------
   Name:
   Title:

With a copy to (which shall not constitute notice):

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


                                      -35-
<PAGE>

        [PURCHASER SIGNATURE PAGES TO WDWT SECURITIES PURCHASE AGREEMENT]

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

Name of Purchaser: ________________________________________________________
Signature of Authorized Signatory of Purchaser: ________________________________
Name of Authorized Signatory: __________________________________________________
Title of Authorized Signatory: _________________________________________________
Email Address of Purchaser:________________________________________________

Address for Notice of Purchaser:




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




Subscription Amount:
Warrant Shares:


                                      -36-
<PAGE>

                                                                         Annex A

                             CASH CLOSING STATEMENT

Pursuant to the attached Securities Purchase Agreement, dated as of the date
hereto, the purchasers shall purchase for new cash consideration up to
$8,265,000 of Debentures and Warrants from World Waste Technologies, Inc. (the
"Company"). All funds will be wired into a trust account maintained by Feldman
Weinstein, LLP, counsel to Midsummer. All funds will be disbursed in accordance
with this Closing Statement.

Disbursement Date: January ___, 2006

--------------------------------------------------------------------------------

I. PURCHASE PRICE

                    Gross Proceeds to be Received in Trust              $

II. DISBURSEMENTS

                               Midsummer Capital                        $
                                                                        $
                                                                        $
                                                                        $
                                                                        $

Total Amount Disbursed:                                                 $


WIRE INSTRUCTIONS:

To: _____________________________________


                                      -37-