EXHIBIT 10.1


                          SECURITIES PURCHASE AGREEMENT

      THIS SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of October
12,  2005,  by and  among  OXFORD  VENTURES,  INC.,  a Nevada  corporation  (the
"Company"), and the Buyers listed on Schedule I attached hereto (individually, a
"Buyer" or collectively "Buyers").

                                   WITNESSETH:

      WHEREAS,  the Company and the Buyer(s) are executing and  delivering  this
Agreement in reliance upon an exemption from securities registration pursuant to
Section 4(2) and/or Rule 506 of Regulation D ("Regulation  D") as promulgated by
the U.S. Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "Securities Act");

      WHEREAS,  the  parties  desire  that,  upon the terms and  subject  to the
conditions  contained herein,  the Company shall issue and sell to the Buyer(s),
as provided  herein,  and the Buyer(s) shall purchase (i) up to Fifteen  Million
Dollars  ($15,000,000)  principal amount of secured convertible  debentures (the
"Convertible  Debentures"),  which  shall  be  convertible  into  shares  of the
Company's common stock, par value $0.001 (the "Common Stock") (as converted, the
"Conversion  Shares") and (ii) warrants to purchase an aggregate of Five Million
(5,000,000)  shares of Common Stock (the  "Warrants").  Of such total  principal
amount,  subject to the deduction of any and all fees,  Thirteen Million Dollars
($13,000,000)  shall be funded  within five (5) business day  following the date
hereof (the "First  Closing"),  and Two Million  Dollars  ($2,000,000)  shall be
funded within five (5) days after the  registration  statement filed pursuant to
the  Investor  Registration  Rights  Agreement  (as  defined  below) is declared
effective by the U.S.  Securities and Exchange  Commission  ("SEC") (the "Second
Closing").  The total  purchase  price for the  Convertible  Debentures  and the
Warrants shall be up to Fifteen  Million Dollars  ($15,000,000),  (the "Purchase
Price")  which the Purchase  Price shall be allocated  among the Buyer(s) in the
respective  amounts  set forth  opposite  each  Buyers  name on  Schedule I (the
"Subscription Amount"); and

      WHEREAS,  contemporaneously  with  the  execution  and  delivery  of  this
Agreement, the parties hereto are executing and delivering a Registration Rights
Agreement  substantially in the form attached hereto as Exhibit A (the "Investor
Registration  Rights  Agreement")  pursuant  to which the  Company has agreed to
provide certain  registration  rights under the Securities Act and the rules and
regulations promulgated there under, and applicable state securities laws; and

      WHEREAS, the aggregate proceeds of the sale of the Convertible  Debentures
and the Warrants  contemplated  hereby  shall be held in escrow  pursuant to the
terms of an escrow  agreement  substantially in the form of the Escrow Agreement
among the Company, the Buyer(s) and the Escrow Agent (as defined below) attached
hereto as Exhibit B (the "Escrow Agreement").

      WHEREAS,  contemporaneously  with  the  execution  and  delivery  of  this
Agreement,  the parties hereto are executing and delivering a Security Agreement
substantially   in  the  form  attached  hereto  as  Exhibit  C  (the  "Security
Agreement")  pursuant  to which the  Company  has agreed to provide  the Buyer a


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security interest in Pledged Collateral (as this term is defined in the Security
Agreement)  to secure  the  Company's  obligations  under  this  Agreement,  the
Convertible   Debenture,   the  Investor  Registration  Rights  Agreement,   the
Irrevocable  Transfer  Agent  Instructions,   as  defined  below,  the  Security
Agreement,  the Escrow Agreement, the Escrow Shares Escrow Agreement, as defined
below, or any other obligations of the Company to the Buyer;

      WHEREAS,  contemporaneously  with  the  execution  and  delivery  of  this
Agreement,  the parties  hereto are  executing  and  delivering an Escrow Shares
Escrow  Agreement  substantially  in the form attached  hereto as Exhibit D (the
"Escrow Shares Escrow Agreement")  pursuant to which the Company shall issue and
deliver to the  Escrow  Agent  50,000,000  shares of Common  Stock or  "security
stock" (the "Escrow  Shares") and the Escrow Agent shall  distribute  the Escrow
Shares to the Buyer(s) upon receipt of a Conversion Notice (as defined herein);

      WHEREAS,  contemporaneously  with  the  execution  and  delivery  of  this
Agreement,  the parties hereto are executing and delivering Irrevocable Transfer
Agent  Instructions  substantially in the form attached hereto as Exhibit E (the
"Irrevocable Transfer Agent Instructions"); and

      NOW,  THEREFORE,  in  consideration  of the  mutual  covenants  and  other
agreements contained in this Agreement the Company and the Buyer(s) hereby agree
as follows:

      1.    PURCHASE AND SALE OF CONVERTIBLE DEBENTURES.

            (a)   Purchase   of   Convertible   Debentures.   Subject   to   the
satisfaction  (or waiver) of the terms and  conditions of this  Agreement,  each
Buyer agrees, severally and not jointly, to purchase at each Closing (as defined
herein below) and the Company agrees to sell and issue to each Buyer,  severally
and  not  jointly,   at  each   Closing,   Convertible   Debentures  in  amounts
corresponding with the Subscription  Amount set forth opposite each Buyer's name
on Schedule I hereto and the  Warrants set forth  opposite  each Buyer's name on
Schedule  I hereto.  Upon  execution  hereof by a Buyer,  the Buyer  shall  wire
transfer the  Subscription  Amount set forth  opposite his name on Schedule I in
same-day  funds or a check  payable to  "Gottbetter  & Partners,  LLP, as Escrow
Agent," which Subscription  Amount shall be held in escrow pursuant to the terms
of the Escrow  Agreement  (as  hereinafter  defined) and disbursed in accordance
therewith.

            (b)   Closing  Date.  The First  Closing of the purchase and sale of
the Convertible  Debentures shall take place at 10:00 a.m. Eastern Standard Time
on  the  fifth  (5th)  business  day  following  the  date  hereof,  subject  to
notification  of  satisfaction of the conditions to the Closing set forth herein
and in Sections 7 and 8 below (or such earlier date as is mutually  agreed to by
the Company and the Buyer(s)) (the "First Closing Date").  The Second Closing of
the purchase and sale of the  Convertible  Debentures  shall take place at 10:00
a.m.  Eastern  Standard Time on the fifth (5th)  business day following the date
the  registration  statement  is  declared  effective  by the  SEC,  subject  to
notification  of  satisfaction of the conditions to the Closing set forth herein
and in  Sections 7 and 8 below (or such later date as is  mutually  agreed to by
the Company and the Buyer(s))  (the "Second  Closing  Date").  The Closing shall
occur on each  Closing Date at the offices of  Gottbetter  & Partners,  LLP, 488
Madison  Avenue,  New York,  New York 10022 (or such other  place as is mutually
agreed to by the Company and the Buyer(s)).


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            (c)   Escrow Arrangements; Form of Payment. Upon execution hereof by
Buyer(s) and pending the  Closings,  the Buyers shall deposit  $15,000,000  in a
non-interest  bearing escrow account with  Gottbetter & Partners,  LLP as escrow
agent (the  "Escrow  Agent"),  pursuant  to the terms of the  Escrow  Agreement.
Subject to the  satisfaction of the terms and conditions of this  Agreement,  on
each  Closing  Date,  (i) the  Escrow  Agent  shall  deliver  to the  Company in
accordance  with the terms of the Escrow  Agreement such aggregate  proceeds for
the Convertible  Debentures and Warrants to be issued and sold to such Buyer(s),
and (ii) the Company shall deliver to each Buyer,  Convertible  Debentures which
such Buyer(s) is purchasing in amounts  indicated  opposite such Buyer's name on
Schedule I, duly  executed on behalf of the Company and the Warrants  which such
Buyer(s) is  purchasing  in numbers  indicated  opposite  such  Buyer's  name on
Schedule I.

      2.    BUYERS' REPRESENTATIONS AND WARRANTIES.

      Each Buyer represents and warrants, severally and not jointly, that:

            (a)   Investment  Purpose.  Each Buyer is acquiring the  Convertible
Debentures,  the Warrants and, upon conversion of Convertible  Debentures and/or
the  exercise  of the  Warrants,  the Buyer  will  acquire  the  Escrow  Shares,
Conversion Shares and/or Warrant Shares,  as defined below,  then issuable,  for
its own account for investment  only and not with a view towards,  or for resale
in connection with, the public sale or distribution thereof,  except pursuant to
sales registered or exempted under the Securities Act; provided,  however,  that
by making the  representations  herein, such Buyer reserves the right to dispose
of the Conversion Shares, the Warrants, the Warrant Shares and the Escrow Shares
at any  time  in  accordance  with  or  pursuant  to an  effective  registration
statement covering such Conversion Shares, the Warrants,  the Warrant Shares and
the Escrow Shares or an available exemption under the Securities Act.

            (b)   Accredited  Investor  Status.  Each  Buyer  is an  "Accredited
Investor" as that term is defined in Rule 501(a)(3) of Regulation D.

            (c)   Reliance  on  Exemptions.  Each  Buyer  understands  that  the
Convertible  Debentures  and the  Warrants  are being  offered and sold to it in
reliance on specific  exemptions  from the  registration  requirements of United
States federal and state securities laws and that the Company is relying in part
upon  the  truth  and  accuracy  of,  and  such  Buyer's  compliance  with,  the
representations,  warranties, agreements,  acknowledgments and understandings of
such  Buyer set forth  herein in order to  determine  the  availability  of such
exemptions and the eligibility of such Buyer to acquire such securities.

            (d)   Information.  Each  Buyer and its  advisors  (and his or,  its
counsel),  if any,  have  been  furnished  with all  materials  relating  to the
business,  finances  and  operations  of the Company and  information  he deemed
material to making an informed investment decision regarding his purchase of the
Convertible Debentures,  the Warrants, the Escrow Shares, the Warrant Shares and
the Conversion  Shares,  which have been requested by such Buyer. Each Buyer and
its advisors, if any, have been afforded the opportunity to ask questions of the


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Company and its  management.  Neither such inquiries nor any other due diligence
investigations  conducted  by  such  Buyer  or  its  advisors,  if  any,  or its
representatives  shall modify, amend or affect such Buyer's right to rely on the
Company's  representations  and  warranties  contained in Section 3 below.  Each
Buyer  understands  that  its  investment  in the  Convertible  Debentures,  the
Warrants,  the Escrow  Shares,  the  Warrant  Shares and the  Conversion  Shares
involves  a high  degree of risk.  Each  Buyer is in a  position  regarding  the
Company,   which,  based  upon  employment,   family  relationship  or  economic
bargaining power,  enabled and enables such Buyer to obtain information from the
Company in order to evaluate the merits and risks of this investment. Each Buyer
has sought such accounting, legal and tax advice, as it has considered necessary
to make an informed  investment  decision with respect to its acquisition of the
Convertible Debentures,  the Warrants, the Escrow Shares, the Warrant Shares and
the Conversion Shares.

            (e)   No Governmental  Review. Each Buyer understands that no United
States federal or state agency or any other  government or  governmental  agency
has  passed on or made any  recommendation  or  endorsement  of the  Convertible
Debentures,  the  Warrants,  the  Escrow  Shares,  the  Warrant  Shares  or  the
Conversion  Shares,  or the fairness or  suitability  of the  investment  in the
Convertible  Debentures,  the Warrants, the Escrow Shares, the Warrant Shares or
the Conversion  Shares,  nor have such  authorities  passed upon or endorsed the
merits of the offering of the Convertible  Debentures,  the Warrants, the Escrow
Shares, the Warrant Shares or the Conversion Shares.

            (f)   Transfer  or Resale.  Each Buyer  understands  that  except as
provided in the Investor  Registration  Rights  Agreement:  (i) the  Convertible
Debentures and the Warrants have not been and are not being registered under the
Securities  Act or any state  securities  laws, and may not be offered for sale,
sold, assigned or transferred unless (A) subsequently registered thereunder,  or
(B) such Buyer shall have  delivered to the Company an opinion of counsel,  in a
generally  acceptable  form,  to the  effect  that such  securities  to be sold,
assigned or  transferred  may be sold,  assigned or  transferred  pursuant to an
exemption from such registration requirements;  (ii) any sale of such securities
made in  reliance  on Rule 144 under the  Securities  Act (or a  successor  rule
thereto)  ("Rule 144") may be made only in accordance with the terms of Rule 144
and further, if Rule 144 is not applicable,  any resale of such securities under
circumstances  in which the seller (or the person through whom the sale is made)
may be deemed to be an  underwriter  (as that term is defined in the  Securities
Act) may require  compliance  with some other exemption under the Securities Act
or the rules and  regulations  of the SEC  thereunder;  and  (iii)  neither  the
Company nor any other person is under any obligation to register such securities
under the  Securities  Act or any state  securities  laws or to comply  with the
terms and conditions of any exemption thereunder.

            (g)   Legends. Each Buyer understands that the certificates or other
instruments  representing the Convertible  Debentures,  the Warrants, the Escrow
Shares, the Warrant Shares and or the Conversion Shares shall bear a restrictive
legend in  substantially  the following  form (and a stop transfer  order may be
placed against transfer of such stock certificates):

          THE SECURITIES  REPRESENTED BY THIS  CERTIFICATE HAVE NOT BEEN
          REGISTERED  UNDER THE SECURITIES  ACT OF 1933, AS AMENDED,  OR


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<PAGE>

          APPLICABLE  STATE  SECURITIES  LAWS. THE SECURITIES  HAVE BEEN
          ACQUIRED  SOLELY FOR  INVESTMENT  PURPOSES AND NOT WITH A VIEW
          TOWARD  RESALE  AND  MAY  NOT  BE  OFFERED  FOR  SALE,   SOLD,
          TRANSFERRED  OR  ASSIGNED  IN  THE  ABSENCE  OF  AN  EFFECTIVE
          REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
          ACT OF 1933, AS AMENDED,  OR APPLICABLE STATE SECURITIES LAWS,
          OR AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT
          REGISTRATION  IS NOT  REQUIRED  UNDER  SAID ACT OR  APPLICABLE
          STATE SECURITIES LAWS.

The  legend set forth  above  shall be removed  and the  Company  within two (2)
business days shall issue a certificate without such legend to the holder of the
Escrow Shares,  Warrants,  Warrant Shares and Conversion Shares upon which it is
stamped,  if,  unless  otherwise  required  by  state  securities  laws,  (i) in
connection  with a sale  transaction,  provided  the  Escrow  Shares,  Warrants,
Warrant Shares and Conversion  Shares are registered under the Securities Act or
(ii) in  connection  with a sale  transaction,  after such holder  provides  the
Company with an opinion of counsel,  which opinion  shall be in form,  substance
and scope customary for opinions of counsel in comparable  transactions,  to the
effect  that a  public  sale,  assignment  or  transfer  of the  Escrow  Shares,
Warrants,  Warrant Shares and Conversion Shares may be made without registration
under the Securities Act.

            (h)   Authorization,  Enforcement.  This Agreement has been duly and
validly  authorized,  executed  and  delivered  on behalf of such Buyer and is a
valid and binding  agreement of such Buyer  enforceable  in accordance  with its
terms,  except as such  enforceability  may be limited by general  principles of
equity  or  applicable  bankruptcy,  insolvency,   reorganization,   moratorium,
liquidation  and other  similar laws  relating to, or affecting  generally,  the
enforcement of applicable creditors' rights and remedies.

            (i)   Receipt of  Documents.  Each Buyer and his or its  counsel has
received and read in their entirety: (i) this Agreement and each representation,
warranty and covenant set forth  herein,  the Security  Agreement,  the Investor
Registration Rights Agreement,  the Escrow Agreement,  the Irrevocable  Transfer
Agent Agreement, and the Escrow Shares Escrow Agreement;  (ii) all due diligence
and other information  necessary to verify the accuracy and completeness of such
representations,  warranties and covenants;  (iii) the Company's Form 10-KSB for
the fiscal year ended December 31, 2004;  (iv) the Company's Form 10-QSB for the
fiscal  quarter  ended  June 30,  2005 and (v) it has  received  answers  to all
questions  each Buyer  submitted to the Company  regarding an  investment in the
Company; and each Buyer has relied on the information  contained therein and has
not been furnished any other documents, literature, memorandum or prospectus.

            (j)   No Legal Advice From the Company. Each Buyer acknowledges that
it  had  the   opportunity  to  review  this  Agreement  and  the   transactions
contemplated  by this Agreement with his or its own legal counsel and investment
and tax advisors.  Each Buyer is relying solely on such counsel and advisors and
not  on  any  statements  or  representations  of  the  Company  or  any  of its
representatives  or agents for legal,  tax or investment  advice with respect to
this  investment,  the  transactions  contemplated  by  this  Agreement  or  the
securities laws of any jurisdiction.


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<PAGE>

            (k)   No Group Participation. Each Buyer and its affiliates is not a
member of any group,  nor is any Buyer acting in concert with any other  person,
including any other Buyer,  with respect to its  acquisition of the  Convertible
Debentures, Escrow Shares, Warrants, the Warrant Shares or Conversion Shares.

            (l)   Company   Registration   Statement.   No   Buyer   makes   any
representation  or  warranty   regarding  the  Company's  ability  to  have  any
registration   statement   filed  by  the  Company   pursuant  to  the  Investor
Registration  Rights Agreement or otherwise  declared  effective by the SEC. The
Company  has the sole  obligation  to make any and all  such  filings  as may be
necessary  to become a public  company  and to have any  registration  statement
declared effective by the SEC.

      3.    REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

      The Company  represents and warrants to each of the Buyers that, except as
set forth in the SEC Documents (as defined herein):

            (a)   Organization   and   Qualification.   The   Company   and  its
subsidiaries  are  corporations  duly  organized  and  validly  existing in good
standing under the laws of the jurisdiction in which they are incorporated,  and
have the requisite corporate power to own their properties and to carry on their
business as now being  conducted.  Each of the Company and its  subsidiaries  is
duly  qualified as a foreign  corporation to do business and is in good standing
in every  jurisdiction in which the nature of the business conducted by it makes
such  qualification  necessary,  except to the extent  that the failure to be so
qualified or be in good standing would not have a Material  Adverse  Effect,  as
defined below.

            (b)   Authorization, Enforcement, Compliance with Other Instruments.
(i) The Company has the  requisite  corporate  power and authority to enter into
and perform this Agreement,  the Security Agreement,  the Investor  Registration
Rights  Agreement,  the  Irrevocable  Transfer  Agent  Instructions,  the Escrow
Agreement,  the Escrow  Shares  Escrow  Agreement,  and any  related  agreements
(collectively  the  "Transaction   Documents")  and  to  issue  the  Convertible
Debentures,  the  Escrow  Shares,  the  Warrants,  the  Warrant  Shares  and the
Conversion  Shares in  accordance  with the terms hereof and  thereof,  (ii) the
execution  and  delivery  of the  Transaction  Documents  by the Company and the
consummation  by  it  of  the  transactions  contemplated  hereby  and  thereby,
including,  without limitation,  the issuance of the Convertible Debentures, the
Escrow Shares,  the Warrants,  the Warrant Shares and the Conversion  Shares and
the reservation for issuance and the issuance of the Conversion  Shares issuable
upon conversion or exercise thereof,  have been duly authorized by the Company's
Board of Directors and no further  consent or  authorization  is required by the
Company,  its Board of  Directors  or its  stockholders,  (iii) the  Transaction
Documents  have  been duly  executed  and  delivered  by the  Company,  (iv) the
Transaction  Documents  constitute  the valid  and  binding  obligations  of the
Company  enforceable  against the Company in accordance with their terms, except
as such  enforceability  may be  limited  by  general  principles  of  equity or
applicable bankruptcy,  insolvency,  reorganization,  moratorium, liquidation or


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similar laws relating to, or affecting generally,  the enforcement of creditors'
rights and  remedies.  The  authorized  officer  of the  Company  executing  the
Transaction  Documents  knows  of no  reason  why the  Company  cannot  file the
registration  statement  as  required  under the  Investor  Registration  Rights
Agreement  or  perform  any  of  the  Company's  other  obligations  under  such
documents.

            (c)   Capitalization.  As of  the  date  hereof,  and  prior  to the
issuance of any shares in connection  with this  Agreement or the Standby Equity
Distribution  Agreement  of even date  herewith  by and  between the Company and
Cornell  Capital  Partners,  LP ("SEDA"),  the  authorized  capital stock of the
Company  consists of 400,000,000  shares of Common Stock. As of the Closing Date
hereof,   the  Company  has  399,999,704  shares  of  Common  Stock  issued  and
outstanding.  All of such  outstanding  shares have been validly  issued and are
fully paid and  nonassessable.  Except as  disclosed  in the SEC  Documents  (as
defined in Section  3(f)),  no shares of Common Stock are subject to  preemptive
rights or any other  similar  rights or any liens or  encumbrances  suffered  or
permitted by the Company.  Except as disclosed in the SEC  Documents,  as of the
date of this Agreement, (i) there are no outstanding options,  warrants,  scrip,
rights  to  subscribe  to,  calls or  commitments  of any  character  whatsoever
relating to, or securities  or rights  convertible  into,  any shares of capital
stock of the  Company or any of its  subsidiaries,  or  contracts,  commitments,
understandings  or arrangements by which the Company or any of its  subsidiaries
is or may  become  bound to issue  additional  shares  of  capital  stock of the
Company  or any of its  subsidiaries  or  options,  warrants,  scrip,  rights to
subscribe to, calls or commitments of any character  whatsoever  relating to, or
securities  or rights  convertible  into,  any  shares of  capital  stock of the
Company  or  any  of its  subsidiaries,  (ii)  there  are  no  outstanding  debt
securities  and (iii) there are no  agreements or  arrangements  under which the
Company or any of its  subsidiaries  is obligated to register the sale of any of
their  securities  under the Securities Act (except pursuant to the Registration
Rights Agreement) and (iv) there are no outstanding  registration statements and
there are no outstanding  comment  letters from the SEC or any other  regulatory
agency.  There are no  securities or  instruments  containing  anti-dilution  or
similar  provisions  that will be triggered  by the issuance of the  Convertible
Debentures  and  Warrants  as  described  in  this  Agreement.  The  Convertible
Debentures,  Warrants,  Warrant Shares, Conversion Shares and Escrow Shares when
issued,  will be free and clear of all pledges,  liens,  encumbrances  and other
restrictions (other than those arising under federal or state securities laws as
a result of the private  placement of the Debentures  and Warrants).  No co-sale
right,  right of first refusal or other similar right exists with respect to the
Debentures, Warrants, Warrant Shares, Escrow Shares and the Conversion Shares or
the issuance and sale thereof.  The issue and sale of the Debentures,  Warrants,
Warrant  Shares,  Escrow Shares and the  Conversion  Shares will not result in a
right of any holder of Company  securities to adjust the  exercise,  conversion,
exchange or reset price under such securities.  The Company has furnished to the
Buyer true and correct  copies of the Company's  Articles of  Incorporation,  as
amended and as in effect on the date hereof (the  "Articles of  Incorporation"),
and the Company's By-laws, as in effect on the date hereof (the "By-laws"),  and
the terms of all securities convertible into or exercisable for Common Stock and
the material  rights of the holders  thereof in respect thereto other than stock
options issued to employees and consultants.

            (d)   Issuance of Securities.  The  Convertible  Debentures are duly
authorized and, upon issuance in accordance with the terms hereof, shall be duly
issued, fully paid and nonassessable, are free from all taxes, liens and charges
with respect to the issue thereof. The Conversion Shares, the Warrant Shares and


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the Escrow  Shares have been duly  authorized  and reserved for  issuance.  Upon
conversion  or  exercise  in  accordance  with the  Transaction  Documents,  the
Conversion  Shares,  the Warrant  Shares and Escrow  Shares will be duly issued,
fully paid and nonassessable.

            (e)   No Conflicts.  Except as disclosed in the SEC  Documents,  the
execution,  delivery and performance of the Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated hereby will
not  (i)  result  in a  violation  of  the  Certificate  of  Incorporation,  any
certificate of designations of any outstanding  series of preferred stock of the
Company or the  By-laws or (ii)  conflict  with or  constitute  a default (or an
event which with notice or lapse of time or both would become a default)  under,
or  give to  others  any  rights  of  termination,  amendment,  acceleration  or
cancellation of, any agreement,  indenture or instrument to which the Company or
any of its  subsidiaries  is a party, or result in a violation of any law, rule,
regulation,  order,  judgment or decree (including  federal and state securities
laws and regulations  and the rules and regulations of The National  Association
of  Securities  Dealers  Inc.'s OTC Bulletin  Board on which the Common Stock is
quoted)  applicable  to the Company or any of its  subsidiaries  or by which any
property  or  asset  of the  Company  or any of its  subsidiaries  is  bound  or
affected. Except as disclosed in the SEC Documents,  neither the Company nor its
subsidiaries  is in violation of any term of or in default under its Articles of
Incorporation   or  By-laws  or  their   organizational   charter  or   by-laws,
respectively,  or any  material  contract,  agreement,  mortgage,  indebtedness,
indenture,  instrument,  judgment,  decree  or  order  or any  statute,  rule or
regulation  applicable to the Company or its  subsidiaries.  The business of the
Company and its subsidiaries is not being conducted,  and shall not be conducted
in violation of any material law,  ordinance,  or regulation of any governmental
entity.  Except as  specifically  contemplated by this Agreement and as required
under the Securities Act and any applicable  state  securities laws, the Company
is not  required to obtain any consent,  authorization  or order of, or make any
filing or registration with, any court or governmental agency in order for it to
execute, deliver or perform any of its obligations under or contemplated by this
Agreement or the  Registration  Rights  Agreement in  accordance  with the terms
hereof or thereof.  Except as  disclosed  in the SEC  Documents,  all  consents,
authorizations,  orders, filings and registrations which the Company is required
to obtain  pursuant to the preceding  sentence have been obtained or effected on
or prior to the date hereof. The Company and its subsidiaries are unaware of any
facts or circumstance, which might give rise to any of the foregoing.

            (f)   SEC Documents:  Financial  Statements.  Since January 1, 2002,
the  Company  has filed all  reports,  schedules,  forms,  statements  and other
documents  required  to be  filed by it with  the SEC  under  of the  Securities
Exchange Act of 1934,  as amended  (the  "Exchange  Act") (all of the  foregoing
filed prior to the date hereof or amended after the date hereof and all exhibits
included  therein and financial  statements and schedules  thereto and documents
incorporated by reference  therein,  being  hereinafter  referred to as the "SEC
Documents").  The Company has delivered to the Buyers or their  representatives,
or made  available  through the SEC's website at  http://www.sec.gov.,  true and
complete  copies  of the  SEC  Documents.  As of  their  respective  dates,  the
financial  statements  of the  Company  disclosed  in  the  SEC  Documents  (the
"Financial  Statements")  complied  as to form  in all  material  respects  with
applicable  accounting  requirements  and the published rules and regulations of
the SEC with respect  thereto.  Such financial  statements have been prepared in
accordance with generally accepted accounting principles,  consistently applied,
during the periods  involved  (except (i) as may be otherwise  indicated in such


                                       8
<PAGE>

Financial  Statements  or the notes  thereto,  or (ii) in the case of  unaudited
interim statements, to the extent they may exclude footnotes or may be condensed
or  summary  statements)  and,  fairly  present  in all  material  respects  the
financial position of the Company as of the dates thereof and the results of its
operations  and cash flows for the periods then ended  (subject,  in the case of
unaudited   statements,   to  normal  year-end  audit  adjustments).   No  other
information  provided  by or on behalf of the  Company to the Buyer which is not
included  in the  SEC  Documents,  including,  without  limitation,  information
referred to in this Agreement,  contains any untrue statement of a material fact
or omits to state any material  fact  necessary in order to make the  statements
therein,  in the light of the  circumstances  under  which they were  made,  not
misleading.

            (g)   10(b)-5.   The  SEC   Documents  do  not  include  any  untrue
statements  of  material  fact,  nor do they  omit to state  any  material  fact
required to be stated therein necessary to make the statements made, in light of
the circumstances under which they were made, not misleading.

            (h)   Absence  of  Litigation.   Except  as  disclosed  in  the  SEC
Documents, there is no action, suit, proceeding, inquiry or investigation before
or by any court, public board, government agency,  self-regulatory  organization
or body pending against or affecting the Company, the Common Stock or any of the
Company's subsidiaries, wherein an unfavorable decision, ruling or finding would
(i) have a material adverse effect on the transactions contemplated hereby, (ii)
adversely affect the validity or enforceability  of, or the authority or ability
of the Company to perform its  obligations  under,  this Agreement or any of the
documents contemplated herein, or (iii) except as expressly disclosed in the SEC
Documents,  have  a  material  adverse  effect  on  the  business,   operations,
properties,  financial condition or results of operations of the Company and its
subsidiaries taken as a whole.

            (i)   Acknowledgment  Regarding  Buyer's Purchase of the Convertible
Debentures. The Company acknowledges and agrees that each Buyer is acting solely
in the capacity of an arm's length  purchaser with respect to this Agreement and
the transactions contemplated hereby. The Company further acknowledges that each
Buyer is not 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  such  Buyer  or any of  their
respective  representatives  or agents in connection with this Agreement and the
transactions  contemplated  hereby is merely incidental to such Buyer's purchase
of the  Convertible  Debentures,  the Escrow Shares,  the Warrants,  the Warrant
Shares or the Conversion  Shares.  The Company further  represents to the Buyers
that the Company's  decision to enter into this  Agreement has been based solely
on the independent evaluation by the Company and its representatives.

            (j)   No General  Solicitation.  Neither the Company, nor any of its
affiliates,  nor any person  acting on its or their  behalf,  has engaged in any
form of general  solicitation  or general  advertising  (within  the  meaning of
Regulation D under the Securities  Act) in connection  with the offer or sale of
the Convertible Debentures,  the Escrow Shares, the Warrants, the Warrant Shares
or the Conversion Shares.


                                       9
<PAGE>

            (k)   No Integrated  Offering.  Neither the Company,  nor any of its
affiliates,  nor any  person  acting on its or their  behalf  has,  directly  or
indirectly,  made any offers or sales of any security or solicited any offers to
buy any security,  under  circumstances  that would require  registration of the
Convertible  Debentures,  the Escrow Shares, the Warrants, the Warrant Shares or
the  Conversion  Shares under the  Securities  Act or cause this offering of the
Convertible  Debentures,  the Escrow Shares, the Warrants, the Warrant Shares or
the Conversion  Shares to be integrated  with prior offerings by the Company for
purposes of the Securities Act.

            (l)   Employee  Relations.  Neither  the  Company  nor  any  of  its
subsidiaries  is involved in any labor  dispute  nor,  to the  knowledge  of the
Company or any of its subsidiaries,  is any such dispute threatened. None of the
Company's or its subsidiaries'  employees is a member of a union and the Company
and its subsidiaries believe that their relations with their employees are good.

            (m)   Intellectual Property Rights. The Company and its subsidiaries
own or possess  adequate rights or licenses to use all trademarks,  trade names,
service  marks,  service mark  registrations,  service  names,  patents,  patent
rights,    copyrights,    inventions,    licenses,    approvals,    governmental
authorizations,  trade secrets and rights  necessary to conduct their respective
businesses as now conducted.  The Company and its  subsidiaries  do not have any
knowledge of any  infringement by the Company or its  subsidiaries of trademark,
trade name rights, patents,  patent rights,  copyrights,  inventions,  licenses,
service names, service marks, service mark registrations,  trade secret or other
similar  rights of others,  and, to the  knowledge  of the  Company  there is no
claim,  action or proceeding being made or brought against,  or to the Company's
knowledge,  being threatened against, the Company or its subsidiaries  regarding
trademark,  trade name, patents, patent rights, invention,  copyright,  license,
service names, service marks, service mark registrations,  trade secret or other
infringement;  and the Company and its  subsidiaries are unaware of any facts or
circumstances which might give rise to any of the foregoing.

            (n)   Environmental Laws.

                  (i)   Each of the Company and its  subsidiaries  has  complied
with all applicable Environmental Laws (as defined below), except for violations
of Environmental Laws that,  individually or in the aggregate,  have not had and
would not  reasonably  be  expected  to have a  material  adverse  effect on the
assets, business,  condition (financial or otherwise),  results of operations or
future  prospects  of the Company (a  "Material  Adverse  Effect").  There is no
pending  or, to the  knowledge  of the  Company,  threatened  civil or  criminal
litigation,  written notice of violation,  formal administrative  proceeding, or
investigation, inquiry or information request, relating to any Environmental Law
involving  the  Company or any  subsidiary,  except for  litigation,  notices of
violations,  formal administrative  proceedings or investigations,  inquiries or
information  requests that,  individually or in the aggregate,  have not had and
would not reasonably be expected to have a Material Adverse Effect. For purposes
of this Agreement,  "Environmental  Law" means any federal,  state or local law,
statute,  rule or  regulation or the common law relating to the  environment  or
occupational  health and  safety,  including  without  limitation  any  statute,
regulation,  administrative  decision  or  order  pertaining  to (i)  treatment,
storage,  disposal,  generation  and  transportation  of  industrial,  toxic  or
hazardous  materials or substances or solid or hazardous waste;  (ii) air, water
and noise pollution; (iii) groundwater and soil contamination;  (iv) the release


                                       10
<PAGE>

or threatened  release into the  environment of  industrial,  toxic or hazardous
materials  or  substances,  or  solid  or  hazardous  waste,  including  without
limitation  emissions,  discharges,  injections,  spills,  escapes or dumping of
pollutants,  contaminants or chemicals;  (v) the protection of wild life, marine
life and wetlands,  including  without  limitation all endangered and threatened
species;  (vi)  storage  tanks,  vessels,  containers,  abandoned  or  discarded
barrels, and other closed receptacles;  (vii) health and safety of employees and
other  persons;  and  (viii)  manufacturing,  processing,  using,  distributing,
treating,  storing,  disposing,  transporting or handling of materials regulated
under any law as  pollutants,  contaminants,  toxic or  hazardous  materials  or
substances  or oil or petroleum  products or solid or hazardous  waste.  As used
above, the terms "release" and "environment" shall have the meaning set forth in
the  Comprehensive  Environmental  Response,  Compensation  and Liability Act of
1980, as amended ("CERCLA").

                  (ii)  Set forth as Schedule III to this Agreement is a list of
all  documents  (whether  in hard copy or  electronic  form)  that  contain  any
environmental reports,  investigations and audits relating to premises currently
or  previously  owned  or  operated  by the  Company  or a  subsidiary  (whether
conducted by or on behalf of the Company or a subsidiary  or a third party,  and
whether done at the  initiative  of the Company or a subsidiary or directed by a
third party) which were issued or conducted during the past five years and which
the Company has possession of or access to. A complete and accurate copy of each
such document has been provided to the Buyer(s).

                  (iii) To the  knowledge  of the  Company  there is no material
environmental liability with respect to any solid or hazardous waste transporter
or treatment,  storage or disposal facility that has been used by the Company or
any subsidiary.

                  (iv)  The Company and its  subsidiaries  (i) have received all
permits,   licenses  or  other  approvals  required  of  them  under  applicable
Environmental  Laws to  conduct  their  respective  businesses  and (iii) are in
compliance  with all  terms  and  conditions  of any  such  permit,  license  or
approval.

            (o)   Title.  Any real property and  facilities  held under lease by
the Company and its  subsidiaries  are held by them under valid,  subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such  property and buildings by the
Company and its subsidiaries.

            (p)   Insurance.  The  Company  and  each  of its  subsidiaries  are
insured by insurers of recognized financial  responsibility  against such losses
and risks and in such  amounts  as  management  of the  Company  believes  to be
prudent  and  customary  in  the   businesses  in  which  the  Company  and  its
subsidiaries  are engaged.  Neither the Company nor any such subsidiary has been
refused any insurance coverage sought or applied for and neither the Company nor
any such  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 at a cost that would not materially and adversely affect the condition,
financial or otherwise,  or the earnings,  business or operations of the Company
and its subsidiaries, taken as a whole.


                                       11
<PAGE>

            (q)   Regulatory Permits.  The Company and its subsidiaries  possess
all material certificates,  authorizations and permits issued by the appropriate
federal,  state or foreign  regulatory  authorities  necessary to conduct  their
respective  businesses,  and neither the  Company  nor any such  subsidiary  has
received any notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit.

            (r)   Internal  Accounting  Controls.  The  Company  and each of its
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 generally accepted  accounting  principles and to maintain asset
accountability,  and (iii) the recorded  amounts for assets is compared with the
existing  assets at reasonable  intervals and  appropriate  action is taken with
respect to any differences.

            (s)   No Material Adverse Breaches,  etc. Except as set forth in the
SEC Documents, neither the Company nor any of its subsidiaries is subject to any
charter,  corporate or other legal restriction,  or any judgment, decree, order,
rule or  regulation  which in the judgment of the  Company's  officers has or is
expected in the future to have a Material Adverse Effect. Except as set forth in
the SEC Documents,  neither the Company nor any of its subsidiaries is in breach
of any  contract or agreement  which  breach,  in the judgment of the  Company's
officers, has or is expected to have a Material Adverse Effect.

            (t)   Tax  Status.  Except  as set forth in the SEC  Documents,  the
Company  and each of its  subsidiaries  has made and filed all federal and state
income and all other tax  returns,  reports  and  declarations  required  by any
jurisdiction  to which it is subject and (unless and only to the extent that the
Company  and each of its  subsidiaries  has set  aside on its  books  provisions
reasonably adequate for the payment of all unpaid and unreported taxes) has paid
all taxes and other  governmental  assessments  and charges that are material in
amount, shown or determined to be due on such returns, reports and declarations,
except  those  being  contested  in good  faith  and has set  aside on its books
provision  reasonably  adequate  for  the  payment  of  all  taxes  for  periods
subsequent to the periods to which such returns,  reports or declarations apply.
There are no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction,  and the officers of the Company know of no basis
for any such claim.

            (u)   Certain   Transactions.   Except  as  set  forth  in  the  SEC
Documents,  and  except  for arm's  length  transactions  pursuant  to which the
Company  makes  payments in the ordinary  course of business  upon terms no less
favorable  than the Company  could obtain from third  parties and other than the
grant of stock  options  disclosed in the SEC  Documents,  none of the officers,
directors,  or employees of the Company is presently a party to any  transaction
with the Company (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 corporation,
partnership,  trust or other entity in which any officer,  director, or any such
employee  has a  substantial  interest  or is an officer,  director,  trustee or
partner.


                                       12
<PAGE>

            (v)   Fees and Rights of First Refusal. The Company is not obligated
to offer the securities  offered  hereunder on a right of first refusal basis or
otherwise to any third parties including,  but not limited to, current or former
shareholders  of the  Company,  underwriters,  brokers,  agents  or other  third
parties.

            (w)   Reliance. The Company acknowledges that the Buyers are relying
on the  representations  and warranties  made by the Company  hereunder and that
such  representations  and  warranties  are a material  inducement  to the Buyer
purchasing  the  Convertible   Debentures  and  Warrants.  The  Company  further
acknowledges  that without such  representations  and  warranties of the Company
made hereunder, the Buyers would not enter into this Agreement.

            (x)   Sarbanes-Oxley.   The  Company  is  in  compliance   with  the
applicable  requirements of the Sarbanes-Oxley Act of 2002, as amended,  and the
rules and regulations  thereunder,  that are currently in effect and is actively
taking  steps to ensure  that it will be in  compliance  with  other  applicable
provisions  of  such  Act  not  currently  in  effect  at all  times  after  the
effectiveness of such provisions except where such noncompliance  would not have
or reasonably be expected to result in a Material  Adverse Effect or which would
be  reasonably  likely to have a  material  adverse  effect on the  transactions
contemplated hereby or by the Investor Registration Rights Agreement.

            (y)   Registration  Form. The Company meets the requirements for the
use of Form SB-2 or Form S-1 for the  registration  of the  resale of the Escrow
Shares, Conversion Shares and Warrant Shares by the Buyer.

            (z)   Non-Public  Information.  The Company confirms that neither it
nor any person  acting on its behalf has  provided the Buyers or their agents or
counsel with any information  that the Company  believes  constitutes  material,
non-public  information.  The Company  understands  and confirms that the Buyers
will  rely  on  the  foregoing   representation  in  effecting  transactions  in
securities of the Company.

      4.    COVENANTS.

            (a)   Best Efforts.  Each party shall use its best efforts timely to
satisfy each of the  conditions  to be satisfied by it as provided in Sections 7
and 8 of this Agreement.

            (b)   Form D. The  Company  agrees to file a Form D with  respect to
the  Convertible  Debentures,   Escrow  Shares,  Warrants,  Warrant  Shares  and
Conversion  Shares as required under  Regulation D and to provide a copy thereof
to each Buyer  promptly after such filing.  The Company shall,  on or before the
Closing  Date,  take such action as the Company  shall  reasonably  determine is
necessary to qualify the Convertible  Debentures,  Escrow Shares,  Warrants, the
Warrant Shares and Conversion Shares, or obtain an exemption for the Convertible
Debentures,  Escrow Shares,  Warrants,  the Warrant Shares and Conversion Shares
for  sale  to the  Buyers  at the  Closing  pursuant  to  this  Agreement  under
applicable securities or "Blue Sky" laws of the states of the United States, and
shall provide  evidence of any such action so taken to the Buyers on or prior to
the Closing Date.


                                       13
<PAGE>

            (c)   Reporting  Status.  Until  the  earlier  of (i) the date as of
which the Buyer(s) may sell all of the Escrow Shares, the Warrants,  the Warrant
Shares,  and  Conversion  Shares  without  restriction  pursuant  to Rule 144(k)
promulgated under the Securities Act (or successor thereto), or (ii) the date on
which (A) the Buyer(s) shall have sold all the Escrow Shares, the Warrants,  the
Warrant Shares and Conversion Shares and (B) none of the Convertible  Debentures
are outstanding (the "Registration  Period"), the Company shall file in a timely
manner all reports  required to be filed with the SEC  pursuant to the  Exchange
Act and the  regulations  of the SEC  thereunder,  and  the  Company  shall  not
terminate  its status as an issuer  required to file reports  under the Exchange
Act even if the  Exchange  Act or the rules  and  regulations  thereunder  would
otherwise permit such termination.

            (d)   Use of Proceeds.  The Company  shall use the proceeds from the
sale of the  Convertible  Debentures for the extension of a loan to Uluru,  Inc.
and for general  corporate and working capital  purposes,  but in no event shall
the Company use the proceeds to repay any  indebtedness of any Company  insiders
except for $50,000 to be paid to Daniel Leonard.

            (e)   Reservation  of  Shares.  The  Company  shall  take all action
reasonably  necessary  to at all times have  authorized,  and  reserved  for the
purpose of  issuance,  that number of shares of Common Stock equal to a multiple
of five (5)  times  the  number  of  shares  of  Common  Stock  into  which  the
Convertible Debentures are from time to time convertible unless a change in such
multiple is agreed to in writing by the Buyer(s) and the Company. If at any time
the Company  does not have  available  such number of  authorized  and  unissued
shares of Common  Stock as shall from time to time be  sufficient  to effect the
issuance of all of (i) the Conversion Shares,  including the Escrow Shares, upon
the conversion of the entire principal amount of the Convertible  Debentures and
(ii) Warrant  Shares upon exercise of the  Warrants,  the Company shall call and
hold a special meeting of the shareholders  within one hundred twenty (120) days
of such  occurrence,  for the sole  purpose of  increasing  the number of shares
authorized. The Company's management shall recommend to the shareholders to vote
in favor of  increasing  the  number  of  shares  of  Common  Stock  authorized.
Management  shall also vote all of its shares in favor of increasing  the number
of authorized shares of Common Stock.

            (f)   Listings or Quotation.  The Company shall promptly  secure the
listing or quotation of the Conversion Shares,  including the Escrow Shares, and
the Warrant  Shares upon a national  securities  exchange,  automated  quotation
system or The National Association of Securities Dealers Inc.'s Over-The-Counter
Bulletin  Board  ("OTCBB") or other market,  if any, upon which shares of Common
Stock are then listed or quoted  (subject to official  notice of  issuance)  and
shall use its best  efforts to  maintain,  so long as any other shares of Common
Stock shall be so listed,  such  listing of all  Conversion  Shares from time to
time  issuable  under  the  terms of this  Agreement.  For so long as any of the
Convertible  Debentures  remain  outstanding  or the Buyers  own any  Conversion
Shares or Warrants,  the Company shall maintain the Common Stock's authorization
for  quotation  on the OTCBB.  It shall be an event of default  hereunder if the
Company fails to strictly comply with its obligation under this Section 4(f).


                                       14
<PAGE>

            (g)   Fees and Expenses. (i) The Company shall pay a structuring fee
of Ten  Thousand  Dollars  ($10,000)  in  connection  with this  transaction  to
Yorkville Advisors Management LLC at the Closing.  The Company shall bear all of
its own legal and professional  fees and expenses,  including but not limited to
those associated with the filing of the  registration  statement as contemplated
herein.  Each of the Company and the  Buyer(s)  shall pay all costs and expenses
incurred  by such  party  in  connection  with the  negotiation,  investigation,
preparation,  execution and delivery of the Transaction  Documents.  The Company
shall pay each Buyer (or such Buyer's designee) a fee equal to ten percent (10%)
of each Buyer's portion of the Purchase Price pro rata at each Closing.

                  (ii)  The Company shall pay a non refundable due diligence fee
to Yorkville  Advisors  Management LLC of Five Thousand Dollars ($5,000),  which
has previously been paid.

            (h)   Warrants.  The Company  shall issue to the Buyers  warrants to
purchase an aggregate of Five Million (5,000,000) shares of the Company's Common
Stock as set forth in Schedule I (the "Warrant Shares") for a period of five (5)
years at exercise  prices  specified in the Warrants.  The Warrant  Shares shall
have such registration  rights as set forth in the Investor  Registration Rights
Agreement.

            (i)   Registration   Statement.   The   Company   shall  be   solely
responsible for the contents of the registration statement,  prospectus or other
filing made with the SEC or  otherwise  used in the  offering  of the  Company's
securities  (except as such disclosure relates solely to the Buyer and then only
to the extent  that such  disclosure  conforms  with  information  furnished  in
writing  by the Buyer to the  Company),  even if the  Buyer or its  agents as an
accommodation  to the Company  participate  or assist in the  preparation of the
registration statement, prospectus or other SEC filing. The Company shall retain
its own legal  counsel to review,  edit,  confirm and do all things such counsel
deems necessary or desirable to the registration statement,  prospectus or other
SEC filing to ensure  that it does not  contain an untrue  statement  or alleged
untrue  statement  of material  fact or omit or alleged to omit a material  fact
necessary to make the  statements  made therein,  in light of the  circumstances
under which the statements were made, not misleading.

            (j)   Corporate  Existence.  So  long  as  any  of  the  Convertible
Debentures  remain  outstanding,  the Company  shall not directly or  indirectly
consummate  any  merger,  reorganization,  restructuring,  reverse  stock  split
consolidation,  sale of all or substantially  all of the Company's assets or any
similar  transaction  or  related   transactions  (each  such  transaction,   an
"Organizational  Change") unless, prior to the consummation of an Organizational
Change, the Company obtains the written consent of each Buyer. In any such case,
the Company will make appropriate provision with respect to such holders' rights
and interests to insure that the provisions of this Section 4(i) will thereafter
be applicable to the Convertible Debentures.

            (k)   Transactions  With  Affiliates.  So  long  as any  Convertible
Debentures are  outstanding,  the Company shall not, and shall cause each of its
subsidiaries  not to, enter into,  amend,  modify or  supplement,  or permit any
subsidiary  to  enter  into,   amend,   modify  or  supplement   any  agreement,
transaction,  commitment,  or  arrangement  with any of its or any  subsidiary's
officers,  directors,  person who were  officers or directors at any time during
the previous two (2) years,  stockholders who beneficially own five percent (5%)
or more of the  Common  Stock,  or  Affiliates  (as  defined  below) or with any
individual  related by blood,  marriage,  or adoption to any such  individual or
with any entity in which any such entity or individual  owns a five percent (5%)


                                       15
<PAGE>

or more beneficial  interest (each a "Related Party"),  except for (a) customary
employment  arrangements  and benefit  programs  on  reasonable  terms,  (b) any
investment  in an  Affiliate  of the Company,  (c) any  agreement,  transaction,
commitment,  or arrangement  on an arms-length  basis on terms no less favorable
than  terms  which  would  have been  obtainable  from a person  other than such
Related Party, (d) any agreement transaction,  commitment,  or arrangement which
is approved by a majority of the  disinterested  directors of the  Company,  for
purposes  hereof,  any  director  who is also an officer  of the  Company or any
subsidiary of the Company shall not be a disinterested  director with respect to
any such agreement,  transaction,  commitment,  or arrangement.  "Affiliate" for
purposes hereof means,  with respect to any person or entity,  another person or
entity that, directly or indirectly,  (i) has a ten percent (10%) or more equity
interest  in that person or entity,  (ii) has ten  percent  (10%) or more common
ownership with that person or entity,  (iii) controls that person or entity,  or
(iv) shares common  control with that person or entity.  "Control" or "controls"
for  purposes  hereof  means that a person or entity  has the  power,  direct or
indirect, to conduct or govern the policies of another person or entity.

            (l)   Transfer Agent. The Company  covenants and agrees that, in the
event that the Company's agency  relationship  with the transfer agent should be
terminated  for any  reason  prior to a date  which is two (2)  years  after the
Closing Date,  the Company shall  immediately  appoint a new transfer  agent and
shall  require that the new transfer  agent execute and agree to be bound by the
terms of the Irrevocable Transfer Agent Instructions (as defined herein).

            (m)   Restriction on Issuance of the Capital  Stock.  So long as any
Convertible  Debentures or the Warrants are  outstanding,  other than securities
issued in connection  with the SEDA,  the Company  shall not,  without the prior
written  consent  of the  Buyers,  (i) issue or sell  shares of Common  Stock or
Preferred Stock without consideration or for a consideration per share less than
the Closing Bid Price of the Common Stock  determined  immediately  prior to its
issuance,  (ii) issue any  warrant,  option,  right,  contract,  call,  or other
security  instrument  granting the holder  thereof,  the right to acquire Common
Stock without consideration or for a consideration less than such Common Stock's
Closing Bid Price value  determined  immediately  prior to its  issuance,  (iii)
enter into any security  instrument  granting the holder a security  interest in
any and all assets of the Company other than a purchase money security interest,
or (iv) file any  registration  statement  on Form S-8,  unless  (x) the  shares
underlying  such  registration  statement  on Form  S-8 are not  issued  without
consideration  or for a  consideration  less than the Common Stock's closing Bid
Price on the date of issuance,  and (y) such Form S-8 registration  statement is
not filed  prior to 90 days  following  the  effectiveness  of the  registration
statement.  "Closing  Bid Price" on any day shall be the closing bid price for a
share of Common Stock on such date on the OTCBB (or such other exchange, market,
or other  system  that the Common  Stock is then  traded  on),  as  reported  on
Bloomberg,  L.P. (or similar  organization or agency succeeding to its functions
of reporting prices).

      Not withstanding  Section 4(m) above,  the Company may, without  obtaining
the prior written consent of the Buyers, issue or sell shares of Common Stock or
Preferred Stock for a consideration  of up to 20% below the Closing Bid Price of
the Common Stock determined immediately prior to its issuance, provided that 50%
of the net proceeds of any such issuance are used to redeem amounts  outstanding
under the Convertible Debentures.


                                       16
<PAGE>

            (n)   Resales Absent Effective Registration  Statement.  Each of the
Buyers  understand  and  acknowledge  that (i) this Agreement and the agreements
contemplated  hereby may require  the  Company to issue and  deliver  Conversion
Shares,  Escrow Shares or Warrant Shares to the Buyers with a legend restricting
their  transferability  under  the  Securities  Act,  and (ii) it is aware  that
resales of such  Conversion  Shares,  Escrow Shares or Warrant Shares may not be
made unless, at the time of resale, there is an effective registration statement
under the  Securities  Act  covering  such Buyer's  resale(s)  or an  applicable
exemption from registration.

            (o)   Legend.  Certificates  evidencing the Convertible  Debentures,
Warrants,  Warrant Shares, Conversion Shares and Escrow Shares shall not contain
any legend  (including  the legend set forth  above),  (A) while a  registration
statement covering the resale of such security is effective under the Securities
Act (provided,  however, that the Buyer's prospectus delivery requirements under
the  Securities Act will remain  applicable),  or (B) following any sale of such
Convertible  Debentures,  Warrants,  Warrant  Shares,  Conversion  Shares and/or
Escrow  Shares  pursuant  to Rule 144,  or (C) if such  Convertible  Debentures,
Warrants,  Warrant Shares,  Conversion  Shares and/or Escrow Shares are eligible
for  sale  under  Rule  144(k),  or (D) if such  legend  is not  required  under
applicable    requirements   of   the   Securities   Act   (including   judicial
interpretations and pronouncements  issued by the Staff of the SEC). The Company
shall cause its counsel to issue a legal opinion to the Company's transfer agent
promptly after the effective date of any registration  statement (the "Effective
Date") if required by the Company's  transfer agent to effect the removal of the
legend  hereunder.  The Company  agrees that  following the Effective Date or at
such time as such legend is no longer  required under this clause (ii), it will,
no later than three  trading  days  following  the  delivery by the Buyer to the
Company or the Company's  transfer agent of a certificate  representing  Warrant
Shares, Conversion Shares and/or Escrow Shares issued with a restrictive legend,
deliver or cause to be delivered to such Buyer a certificate  representing  such
Warrant  Shares,  Conversion  Shares  and/or Escrow 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(s) the restrictions on transfer set forth herein.

            (p)   Pledge.  The Company  acknowledges  and agrees that the Buyers
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 the
Convertible  Debentures,  Warrants,  Warrant  Shares,  Conversion  Shares and/or
Escrow Shares to a financial  institution  that is an  "accredited  investor" as
defined in Rule 501(a) under the Securities Act and, if required under the terms
of such  arrangement,  the Buyer may  transfer  pledged or  secured  Convertible
Debentures,  Warrants, Warrant Shares, Conversion Shares and/or Escrow Shares 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 Buyer's  expense,  the Company
will execute and deliver such reasonable  documentation  as a pledgee or secured
party of Convertible  Debentures,  Warrants,  Warrant Shares,  Conversion Shares
and/or  Escrow  Shares may  reasonably  request in  connection  with a pledge or
transfer of the Convertible  Debentures,  Warrants,  Warrant Shares,  Conversion
Shares  and/or  Escrow  Shares,  including  the  preparation  and  filing of any
required  prospectus  supplement  under Rule  424(b)(3) of the Securities Act or
other applicable provision of the Securities Act to appropriately amend the list
of selling stockholders thereunder.


                                       17
<PAGE>

            (q)   Removal of Legend.  In addition to the Buyer's other available
remedies,  the Company shall pay to the Buyers,  in cash, as partial  liquidated
damages  and not as a penalty,  for each  $1,000 of Warrant  Shares,  Conversion
Shares  and/or  Escrow Shares (based on the closing price of the Common Stock on
the date such  Warrant  Shares,  Conversion  Shares  and/or  Escrow  Shares  are
submitted to the Company's  transfer  agent),  $5 per trading day (increasing to
$10 per  trading  day five (5)  trading  days after such  damages  have begun to
accrue)  for each  trading day after the twelfth  (12th)  trading day  following
delivery  by a  Buyer  to the  Company  or the  Company's  transfer  agent  of a
certificate representing Warrant Shares,  Conversion Shares and/or Escrow Shares
issued with a restrictive  legend,  until such  certificate  is delivered to the
Buyer with such legend removed.  Nothing herein shall limit the Buyer's right to
pursue actual  damages for the failure of the Company and its transfer  agent to
deliver  certificates  representing  any securities as required hereby or by the
Irrevocable  Transfer Agent Instructions,  and the Buyer 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.

            (r)   Press  Release.  In  addition  to any  and  all  other  public
statements or disclosures made by the Company in its sole discretion (subject to
the last sentence of this Section  3(q),  the Company will issue a press release
and file a Current  Report on Form 8-K with the SEC regarding the Closing of the
purchase and sale of the Convertible  Debentures and Warrants on the date of the
Closing.  Notwithstanding the foregoing, the Company shall not publicly disclose
the names of the  Buyers,  or include the names of the Buyers in any filing with
the SEC, without the prior written consent of the Buyers, except (i) as required
by federal  securities law and (ii) to the extent such disclosure is required by
law or  regulations,  in which case the  Company  shall  provide the Buyers with
prior  notice  of  such  disclosure  permitted  under  subclause  (i)  or  (ii).
Furthermore,  the Company  covenants  and agrees  that  neither it nor any other
person  acting on its behalf will  provide the Buyers or their agents or counsel
with any information that the Company believes  constitutes  material non-public
information,  unless  prior  thereto  the Buyers  shall have  executed a written
agreement regarding the confidentiality and use of such information. The Company
understands  and  confirms  that the Buyers  shall be  relying on the  foregoing
representations in effecting transactions in securities of the Company.

            (s)   Stock Splits,  Etc. The provisions of this Agreement  shall be
appropriately adjusted to reflect any stock split, stock divided,  reverse stock
split, reorganization or other similar event effected after the date hereof.

            (t)   No  Short  Position.  Each  of  the  Buyers  and  any  of  its
affiliates  do not have an open short  position  in the Common  Stock,  and each
Buyer  agrees that it will not,  and that it will cause its  affiliates  not to,
engage in any short sales of, or hedging transactions with respect to the Common
Stock.

      5.    TRANSFER AGENT INSTRUCTIONS.

      The Company shall issue the Irrevocable Transfer Agent Instructions to its
transfer agent irrevocably  appointing  Gottbetter & Partners,  LLP as its agent
for  purpose  of  having  certificates  issued,  registered  in the  name of the
Buyer(s) or their respective nominee(s),  for the Conversion Shares representing
such amounts of  Convertible  Debentures  as specified  from time to time by the
Buyer(s) to the Company  upon  conversion  of the  Convertible  Debentures,  for
interest  owed  pursuant  to the  Convertible  Debenture,  and  for  any and all


                                       18
<PAGE>

Liquidated Damages (as this term is defined in the Investor  Registration Rights
Agreement).  Gottbetter & Partners,  LLP shall be paid a cash fee of One Hundred
Fifty Dollars  ($150) by the Buyers or their assigns for every occasion they act
pursuant to the Irrevocable  Transfer Agent Instructions.  The Company shall not
change its transfer agent without the express  written  consent of the Buyer(s),
which consent may not be  unreasonably  withheld.  The successor  transfer agent
shall be required to execute the Irrevocable Transfer Agent Instructions.  Prior
to  registration  of the Conversion  Shares under the  Securities  Act, all such
certificates shall bear the restrictive legend specified in Section 2(g) of this
Agreement.  The Company warrants that no instruction  other than the Irrevocable
Transfer  Agent  Instructions  referred to in this Section 5, and stop  transfer
instructions  to  give  effect  to  Section  2(g)  hereof  (in  the  case of the
Conversion Shares prior to registration of such shares under the Securities Act)
will be given by the  Company  to its  transfer  agent  and that the  Conversion
Shares shall  otherwise be freely  transferable  on the books and records of the
Company  as and to the  extent  provided  in this  Agreement  and  the  Investor
Registration Rights Agreement. Nothing in this Section 5 shall affect in any way
the Buyer's  obligations and agreement to comply with all applicable  securities
laws upon resale of Conversion Shares. If the Buyer(s) provides the Company with
an opinion of counsel,  in form,  scope and substance  customary for opinions of
counsel in comparable  transactions to the effect that  registration of a resale
by the  Buyer(s)  of any of the  Conversion  Shares  is not  required  under the
Securities  Act, and absent  manifest  error in such opinion,  the Company shall
within two (2) business  days  instruct its transfer  agent to issue one or more
certificates in such name and in such  denominations as specified by the Buyers.
The Company  acknowledges that a breach by it of its obligations  hereunder will
cause  irreparable harm to the Buyers by vitiating the intent and purpose of the
transaction contemplated hereby. Accordingly,  the Company acknowledges that the
remedy  at law for a breach  of its  obligations  under  this  Section 5 will be
inadequate  and  agrees,  in the event of a breach or  threatened  breach by the
Company  of the  provisions  of this  Section  5,  that  the  Buyer(s)  shall be
entitled,  in  addition  to  all  other  available  remedies,  to an  injunction
restraining any breach and requiring  immediate  issuance and transfer,  without
the necessity of showing  economic  loss and without any bond or other  security
being required.

      6.    THE ESCROW SHARES; LIMITATION ON CONVERSION.

            (a)   Share  Denominations.  The Escrow  Agent shall retain and hold
the  Escrow  Shares  which  shall be held in  accordance  with the terms of this
Agreement and the Escrow Shares Escrow Agreement.  The Escrow Shares shall be in
the share denominations specified in Schedule II attached hereto,  registered in
the name of the Buyer(s) specified in Schedule II.

            (b)   Conversion  Notice.  EXHIBIT F attached hereto and made a part
hereof  sets  forth  the  procedures  with  respect  to  the  conversion  of the
Convertible Debentures,  including the forms of Conversion Notice to be provided
upon conversion, instructions as to the procedures for conversion and such other
information  and  instructions  as may be  reasonably  necessary  to enable  the
Buyer(s) or its  permitted  transferee(s)  to exercise  the right of  conversion
smoothly and expeditiously.

            (c)   The Company agrees that, at any time the  conversion  price of
the  Convertible  Debentures  is such that the  number of Escrow  Shares for the
Convertible  Debentures  is less than  five (5)  times  the  number of shares of
Common  Stock  that would be needed to satisfy  full  conversion  of all of such


                                       19
<PAGE>

Convertible Debentures then outstanding, given the then current conversion price
(the "Full  Conversion  Shares"),  upon five (5) business days written notice of
such circumstance to the Company by the Buyers and the Escrow Agent, the Company
shall issue  additional  share  certificates  in the name of the Buyer(s) and/or
their assigns in  denominations  specified by the Buyer(s),  and deliver same to
the Escrow Agent,  such that the new number of Escrow Shares with respect to the
Convertible Debentures is equal to five (5) times the Full Conversion Shares.

            (d)   Buyer's  Ownership of Common Stock.  In addition to and not in
lieu of the limitations on conversion set forth in the  Convertible  Debentures,
the conversion rights of the Buyer set forth in the Convertible Debentures shall
be limited,  solely to the extent required, from time to time, such that, unless
the Buyer gives written  notice 65 days in advance to the Company of the Buyer's
intention to exceed the Limitation on Conversion as defined herein, with respect
to all or a specified amount of the Convertible Debentures and the corresponding
number of the Conversion Shares in no instance the Buyer  (singularly,  together
with any Persons who in the determination of the Buyer, together with the Buyer,
constitute a group as defined in Rule 13d-5 of the Exchange  Act) be entitled to
convert the Convertible Debentures to the extent such conversion would result in
the Buyer  beneficially  owning  four and  ninety  nine one  hundredths  percent
(4.99%) of the  outstanding  shares of Common  Stock of the  Company.  For these
purposes,  beneficial  ownership  shall be defined and  calculated in accordance
with Rule 13d-3,  promulgated under the Exchange Act (the foregoing being herein
referred to as the  "Limitation on  Conversion");  provided,  however,  that the
Limitation on Conversion  shall not apply to any forced or automatic  conversion
pursuant to this Agreement or the Convertible Debentures;  and provided, further
that if the Company shall have breached any of the  Transaction  Documents,  the
provisions of this Section 6(d) shall be null and void from and after such date.
The Company shall,  promptly upon its receipt of a Conversion Notice tendered by
the Buyer (or its sole designee) for the Convertible Debentures,  as applicable,
notify the Buyer by telephone and by facsimile (the "Limitation  Notice") of the
number  of shares of Common  Stock  outstanding  on such date and the  number of
Conversion  Shares,  which would be issuable to the Buyer (or its sole designee,
as the case may be) if the conversion  requested in such Conversion  Notice were
effected  in full and the number of shares of Common  Stock  outstanding  giving
full effect to such  conversion  whereupon,  in accordance  with the Convertible
Debentures,   notwithstanding   anything  to  the  contrary  set  forth  in  the
Convertible  Debentures,  the Buyer may, by notice to the Company within one (1)
business day of its receipt of the Limitation  Notice by facsimile,  revoke such
conversion  to the extent (in whole or in part) that the Buyer  determines  that
such  conversion  would result in the ownership by the Buyer of shares of Common
Stock in excess of the  Limitation on Conversion.  The  Limitation  Notice shall
begin the 65 day advance notice required in this Section 6(d).

      7.    CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.

      The obligation of the Company  hereunder to issue and sell the Convertible
Debentures  and the  Warrants  to the  Buyer(s) at the Closing is subject to the
satisfaction,  at  or  before  the  Closing  Date,  of  each  of  the  following
conditions,  provided that these  conditions  are for the Company's sole benefit
and may be waived by the Company at any time in its sole discretion:


                                       20
<PAGE>

            (a)   Each Buyer shall have executed the  Transaction  Documents and
delivered them to the Company.

            (b)   The  Buyer(s)  shall have  delivered  to the Escrow  Agent the
Purchase  Price for  Convertible  Debentures in respective  amounts as set forth
next to each Buyer as outlined on  Schedule I attached  hereto and the  Warrants
and the Escrow  Agent shall have  delivered  the net  proceeds to the Company by
wire  transfer  of  immediately  available  U.S.  funds  pursuant  to  the  wire
instructions provided by the Company.

            (c)   The  representations  and  warranties of the Buyer(s) shall be
true and correct in all material respects as of the date when made and as of the
Closing  Date as  though  made at that  time  (except  for  representations  and
warranties  that  speak as of a  specific  date),  and the  Buyer(s)  shall have
performed,  satisfied and complied in all material  respects with the covenants,
agreements and conditions required by this Agreement to be performed,  satisfied
or complied with by the Buyer(s) at or prior to the Closing Date.

      8.    CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.

      The  obligation  of the Buyer(s)  hereunder  to Purchase  the  Convertible
Debentures  at the  Closing is subject to the  satisfaction,  at or before  each
Closing Date, of each of the following conditions:

                  (i)   The  Company   shall  have   executed  the   Transaction
Documents and delivered the same to the Buyer(s).

                  (ii)  The Common Stock shall be  authorized  for  quotation on
the OTCBB,  trading in the Common  Stock shall not have been  suspended  for any
reason,  and all the  Conversion  Shares  issuable  upon the  conversion  of the
Convertible Debentures shall have been approved by the OTCBB.

                  (iii) The  representations and warranties of the Company shall
be true and correct in all material  respects  (except to the extent that any of
such  representations  and warranties is already  qualified as to materiality in
Section 3 above, in which case,  such  representations  and warranties  shall be
true and correct without further  qualification) as of the date when made and as
of the Closing Date as though made at that time (except for  representations and
warranties  that  speak  as of a  specific  date)  and the  Company  shall  have
performed,  satisfied and complied in all material  respects with the covenants,
agreements and conditions required by this Agreement to be performed,  satisfied
or complied with by the Company at or prior to the Closing Date. If requested by
the  Buyer,  the Buyer  shall  have  received  a  certificate,  executed  by the
President of the Company,  dated as of the Closing Date, to the foregoing effect
and as to such  other  matters  as may be  reasonably  requested  by the  Buyers
including,  without  limitation  an update as of the Closing Date  regarding the
representation contained in Section 3(c) above.

                  (iv)  The Company  shall have  executed  and  delivered to the
Buyer(s) the Convertible Debentures in the respective amounts set forth opposite
each  Buyer(s)  name on  Schedule I  attached  hereto  and the  Warrants  in the
respective  numbers set forth opposite each Buyer(s) name on Schedule I attached
hereto.


                                       21
<PAGE>

                  (v)   The Buyer(s)  shall have  received an opinion of counsel
from  Gottbetter  &  Partners,  LLP in a  form  reasonably  satisfactory  to the
Buyer(s).

                  (vi)  The  Company  shall  have  provided  to the  Buyer(s)  a
certificate of good standing from the Secretary of State from the state in which
the company is incorporated.

                  (vii) The Company shall have delivered to the Escrow Agent the
Escrow Shares.

                  (viii) The  Company  shall  have  provided  to the  Buyers  an
acknowledgement, to the satisfaction of the Buyers, from the Company's certified
public accountant as to its ability to provide all consents required in order to
file a registration statement in connection with this transaction.

                  (ix)  The Company  shall have  reserved out of its  authorized
and unissued Common Stock, solely for the purpose of effecting the conversion of
the Convertible  Debentures,  shares of Common Stock to effect the conversion of
all of the Conversion Shares then outstanding.

                  (x)   The Irrevocable Transfer Agent Instructions, in form and
substance  satisfactory  to  the  Buyers,  shall  have  been  delivered  to  and
acknowledged in writing by the Company's transfer agent.

                  (xi)  The  Company  shall have filed a form UCC -1 with regard
to the Pledged  Property  and  Pledged  Collateral  as detailed in the  Security
Agreement  dated  the date  hereof  and  provided  proof of such  filing  to the
Buyer(s).

                  (xii) In connection with the Second Closing,  the registration
statement  filed pursuant to the Investor  Registration  Rights  Agreement shall
have been declared effective by the SEC.

      9.    INDEMNIFICATION.

            (a)   In consideration of the Buyer's execution and delivery of this
Agreement and acquiring  the  Convertible  Debentures,  the Escrow  Shares,  the
Warrants  and the  Conversion  Shares  hereunder,  and in addition to all of the
Company's  other  obligations  under this  Agreement,  the Company shall defend,
protect,  indemnify  and hold harmless the Buyer(s) and each other holder of the
Convertible  Debentures,  the Escrow  Shares,  the Warrants  and the  Conversion
Shares, and all of their officers,  directors,  employees and agents (including,
without   limitation,   those  retained  in  connection  with  the  transactions
contemplated by this Agreement) (collectively, the "Buyer Indemnitees") from and
against any and all actions,  causes of action,  suits, claims,  losses,  costs,
penalties,  fees,  liabilities and damages, and expenses in connection therewith
(irrespective  of whether any such Buyer Indemnitee is a party to the action for
which indemnification  hereunder is sought), and including reasonable attorneys'
fees and disbursements  (the "Indemnified  Liabilities"),  incurred by the Buyer
Indemnitees or any of them as a result of, or arising out of, or relating to (a)
any  misrepresentation  or breach of any  representation or warranty made by the
Company  in  this  Agreement,   the  Convertible   Debentures  or  the  Investor


                                       22
<PAGE>

Registration  Rights Agreement or any other certificate,  instrument or document
contemplated  hereby or thereby,  (b) any breach of any  covenant,  agreement or
obligation  of  the  Company  contained  in  this  Agreement,  or  the  Investor
Registration  Rights Agreement or any other certificate,  instrument or document
contemplated  hereby  or  thereby,  or (c) any  cause of  action,  suit or claim
brought or made against such Indemnitee and arising out of or resulting from the
execution,  delivery,  performance or enforcement of this Agreement or any other
instrument,  document  or  agreement  executed  pursuant  hereto  by  any of the
Indemnities,  any  transaction  financed  or to be financed in whole or in part,
directly or  indirectly,  with the proceeds of the  issuance of the  Convertible
Debentures or the status of the Buyer or holder of the  Convertible  Debentures,
the  Escrow  Shares,  the  Warrants  or the  Conversion  Shares,  as a Buyer  of
Convertible Debentures, the Escrow Shares, the Warrants or the Conversion Shares
in the Company. To the extent that the foregoing  undertaking by the Company may
be unenforceable for any reason, the Company shall make the maximum contribution
to the payment and satisfaction of each of the Indemnified Liabilities, which is
permissible under applicable law.

            (b)   In  consideration  of the Company's  execution and delivery of
this Agreement,  and in addition to all of the Buyer's other  obligations  under
this Agreement, the Buyer shall defend, protect, indemnify and hold harmless the
Company and all of its officers,  directors,  employees  and agents  (including,
without   limitation,   those  retained  in  connection  with  the  transactions
contemplated by this Agreement)  (collectively,  the "Company Indemnitees") from
and against any and all Indemnified  Liabilities  incurred by the Indemnitees or
any of  them  as a  result  of,  or  arising  out  of,  or  relating  to (a) any
misrepresentation  or  breach  of any  representation  or  warranty  made by the
Buyer(s)  in this  Agreement,  instrument  or  document  contemplated  hereby or
thereby  executed by the Buyer,  (b) any breach of any  covenant,  agreement  or
obligation  of  the  Buyer(s)   contained  in  this   Agreement,   the  Investor
Registration  Rights Agreement or any other certificate,  instrument or document
contemplated  hereby  or  thereby  executed  by the  Buyer,  or (c) any cause of
action,  suit or claim brought or made against such Company  Indemnitee based on
material  misrepresentations  or due to a material  breach and arising out of or
resulting  from the  execution,  delivery,  performance  or  enforcement of this
Agreement,  the Investor  Registration Rights Agreement or any other instrument,
document  or  agreement   executed   pursuant  hereto  by  any  of  the  Company
Indemnities.  To the extent that the foregoing  undertaking by each Buyer may be
unenforceable for any reason, each Buyer shall make the maximum  contribution to
the payment and  satisfaction of each of the Indemnified  Liabilities,  which is
permissible under applicable law.

      10.   GOVERNING LAW: MISCELLANEOUS.

            (a)   Governing  Law.  The  parties  hereto   acknowledge  that  the
transactions  contemplated  by this  Agreement  and the  exhibits  hereto bear a
reasonable  relation to the State of New York. The parties hereto agree that the
internal  laws of the State of New York  shall  govern  this  Agreement  and the
exhibits hereto, including, but not limited to, all issues related to usury. Any
action to enforce the terms of this  Agreement or any of its  exhibits  shall be
brought  exclusively in the state and/or  federal courts  situated in the County
and State of New York. Service of process in any action by the Buyers to enforce
the terms of this  Agreement  may be made by serving a copy of the  summons  and
complaint,  in addition to any other relevant documents, by commercial overnight
courier to the Company at its principal address set forth in this Agreement.


                                       23
<PAGE>

            (b)   Counterparts.  This  Agreement  may be executed in two or more
identical  counterparts,  all of  which  shall  be  considered  one and the same
agreement and shall become effective when  counterparts have been signed by each
party and  delivered  to the other  party.  In the event any  signature  page is
delivered  by  facsimile  transmission,  the party  using such means of delivery
shall  cause  four  (4)  additional  original  executed  signature  pages  to be
physically  delivered to the other party  within five (5) days of the  execution
and delivery hereof.

            (c)   Headings.  The headings of this Agreement are for  convenience
of reference and shall not form part of, or affect the  interpretation  of, this
Agreement.

            (d)   Severability.  If any  provision  of this  Agreement  shall be
invalid   or   unenforceable   in   any   jurisdiction,   such   invalidity   or
unenforceability  shall  not  affect  the  validity  or  enforceability  of  the
remainder  of  this   Agreement  in  that   jurisdiction   or  the  validity  or
enforceability of any provision of this Agreement in any other jurisdiction.

            (e)   Entire Agreement,  Amendments.  This Agreement  supersedes all
other prior oral or written agreements between the Buyer(s),  the Company, their
affiliates  and  persons  acting on their  behalf  with  respect to the  matters
discussed  herein,  and this  Agreement and the  instruments  referenced  herein
contain  the entire  understanding  of the parties  with  respect to the matters
covered  herein and therein  and,  except as  specifically  set forth  herein or
therein,  neither the Company nor any Buyer makes any representation,  warranty,
covenant or  undertaking  with  respect to such  matters.  No  provision of this
Agreement may be waived or amended other than by an instrument in writing signed
by the party to be charged with enforcement.

            (f)   Notices.   Any   notices,   consents,    waivers,   or   other
communications  required  or  permitted  to be  given  under  the  terms of this
Agreement  must be in writing and will be deemed to have been delivered (i) upon
receipt, when delivered personally; (ii) upon confirmation of receipt, when sent
by  facsimile;  (iii)  three (3) days after being sent by U.S.  certified  mail,
return  receipt  requested,  or (iv) one (1) day after deposit with a nationally
recognized  overnight  delivery service,  in each case properly addressed to the
party to  receive  the  same.  The  addresses  and  facsimile  numbers  for such
communications shall be:

If to the Company, to:            Oxford Ventures, Inc.
                                  4655 East Ivy Street, Suite 101
                                  Mesa, Arizona 85215
                                  Attention: Daniel Leonard
                                  Telephone: (402) 681-4635
                                  Facsimile: (402) 763-9511

With a copy to:                   Gottbetter & Partners, LLP
                                  488 Madison Avenue
                                  New York, NY 10022
                                  Attention: Adam Gottbetter, Esq.
                                  Telephone: (212) 400-6900
                                  Facsimile: (212) 400-6901


                                       24
<PAGE>

If to the Transfer Agent, to:


      If to the  Buyer(s),  to its address and  facsimile  number on Schedule I,
with copies to the Buyer's  counsel as set forth on Schedule I. Each party shall
provide five (5) days' prior written  notice to the other party of any change in
address or facsimile number.

            (g)   Successors and Assigns.  This Agreement  shall be binding upon
and inure to the  benefit of the  parties and their  respective  successors  and
assigns.  Neither the Company nor any Buyer shall  assign this  Agreement or any
rights or obligations  hereunder  without the prior written consent of the other
party hereto.

            (h)   No Third Party  Beneficiaries.  This Agreement is intended for
the benefit of the parties hereto and their respective  permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.

            (i)   Survival.  Unless this  Agreement is terminated  under Section
10(l),  the  representations  and  warranties  of the Company  and the  Buyer(s)
contained  in  Sections  2 and 3, the  agreements  and  covenants  set  forth in
Sections 4, 5 and 10, and the indemnification provisions set forth in Section 9,
shall  survive the Closing for a period of two (2) years  following  the date on
which the  Convertible  Debentures  are converted in full. The Buyer(s) shall be
responsible  only  for  its  own  representations,  warranties,  agreements  and
covenants hereunder.

            (j)   Publicity.  The Company and the Buyer(s)  shall have the right
to approve, before issuance any press release or any other public statement with
respect to the  transactions  contemplated  hereby made by any party;  provided,
however,  that the Company shall be entitled,  without the prior approval of the
Buyer(s),  to issue any press release or other public disclosure with respect to
such  transactions  required  under  applicable  securities  or  other  laws  or
regulations  (the Company  shall use its best efforts to consult the Buyer(s) in
connection with any such press release or other public  disclosure  prior to its
release  and  Buyer(s)  shall  be  provided  with a copy  thereof  upon  release
thereof).

            (k)   Further Assurances.  Each party shall do and perform, or cause
to be done and  performed,  all such further acts and things,  and shall execute
and deliver all such other agreements, certificates,  instruments and documents,
as the other party may  reasonably  request in order to carry out the intent and
accomplish  the  purposes  of  this  Agreement  and  the   consummation  of  the
transactions contemplated hereby.

            (l)   Termination.  In the  event  that the  Closing  shall not have
occurred with respect to the Buyers on or before five (5) business days from the
date  hereof  due to the  Company's  or  the  Buyer's  failure  to  satisfy  the
conditions  set forth in Sections 7 and 8 above (and the  non-breaching  party's
failure to waive such unsatisfied  condition(s)),  the non-breaching party shall
have the option to terminate this Agreement with respect to such breaching party
at the close of  business  on such date  without  liability  of any party to any


                                       25
<PAGE>

other party;  provided,  however,  that if this  Agreement is  terminated by the
Company  pursuant to this Section 10(l),  the Company shall remain  obligated to
reimburse  the  Buyer(s)  for  the  fees  and  expenses  of  Yorkville  Advisors
Management, LLC described in Section 4(g) above.

            (m)   No Strict  Construction.  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.

            (n)   Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages,  the Buyer and
the Company will be entitled to specific  performance  under the Agreement.  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 agree to waive in any action for specific performance of any
such obligation the defense that a remedy at law would be adequate.


                    [REMAINDER PAGE INTENTIONALLY LEFT BLANK]


                                       26
<PAGE>

      IN WITNESS WHEREOF, the Buyers and the Company have caused this Securities
Purchase Agreement to be duly executed as of the date first written above.


                                 COMPANY:
                                 OXFORD VENTURES, INC.

                                 By: /s/ Daniel Leonard
                                    --------------------------------------------
                                    Name:  Daniel Leonard
                                    Title: President and Chief Executive Officer



                                       27
<PAGE>

                                    EXHIBIT A

                 FORM OF INVESTOR REGISTRATION RIGHTS AGREEMENT




                                       1

<PAGE>

                                    EXHIBIT B

                            FORM OF ESCROW AGREEMENT





                                       1
<PAGE>

                                    EXHIBIT C

                               SECURITY AGREEMENT




                                       1

<PAGE>

                                    EXHIBIT D

                         ESCROW SHARES ESCROW AGREEMENT




                                       1
<PAGE>

                                    EXHIBIT E

                     IRREVOCABLE TRANSFER AGENT INSTRUCTIONS







                                       1

<PAGE>

                                    EXHIBIT F

                              CONVERSION PROCEDURES

      1.    At any time and from time to time during the term of the Convertible
Debentures,  the  Holder  may  deliver to the  Escrow  Agent  written  notice (a
"Conversion  Notice")  that it has elected to convert  the  Company  Convertible
Debentures (the "Debentures")  registered in the name of such Holder in whole or
in part in accordance with the terms of the Debentures and the Conversion Notice
shall be in the form  annexed  as  Exhibit  A to the  Debentures.  A fee of $50,
payable by the Holder,  shall accompany every Conversion Notice delivered to the
Escrow Agent.

      2.    The  Holder  shall  send by fax or e-mail  the  executed  Conversion
Notice to the Escrow  Agent (with a copy to the  Company) by 4:00 p.m.  New York
time at least one business day prior to the  Conversion  Date (as defined in the
Debentures).  The Escrow Agent shall send the Conversion  Notice by facsimile or
e-mail  address  to the  Company  by the  end of  the  business  day on the  day
received,  assuming received by 6:00 p.m. New York time and if thereafter on the
next business day, at the facsimile  telephone number or e-mail address,  as the
case may be, of the  principal  place of business of the  Company.  Each Company
Conversion  Notice price  adjustment  under Article V of the Debentures shall be
given by  facsimile  addressed  to the  Holder of  Debentures  at the  facsimile
telephone  number  of such  Holder  appearing  on the  books of the  Company  as
provided  to the  Company  by such  Holder  for  the  purpose  of  such  Company
Conversion  Notice price  adjustment,  with a copy to the Escrow Agent. Any such
notice  shall be  deemed  given  and  effective  upon the  transmission  of such
facsimile or e-mail at the facsimile  telephone number or e-mail address, as the
case  may be,  specified  in this  paragraph  2 (with  printed  confirmation  of
transmission). In the event that the Escrow Agent receives the Conversion Notice
after 4:00 p.m.  New York time,  the  Conversion  Notice shall be deemed to have
been received on the next  business day. In the event that the Company  receives
the Conversion  Notice after the end of the business day,  notice will be deemed
to have been given the next business day.

      3.    The Company shall have one (1) business day from transmission of the
Conversion  Notice by the Escrow Agent to object only to the  calculation of the
number of Company  Escrow Shares to be released.  If the Company fails to object
to the  calculation  of the number of Escrow  Shares to be released  within said
time,  then the Company  shall be deemed to have waived any  objections  to said
calculation.  The Company's only basis for any objection  hereunder  shall be to
the  calculation  of the number of Escrow  Shares to be released.  If the Escrow
Agent does not receive said  objection  notice  within the time period set forth
above from the Company,  and provided  that the  Purchaser  does not revoke such
conversion, the Escrow Agent shall release from escrow and deliver to the Holder
certificates or instruments representing the number of Escrow Shares issuable to
the Holder in accordance  with such  conversion on the second  business day from
the  receipt by the  Company  of the  Conversion  Notice.  In the event that the
certificates  evidencing  the Escrow  Shares held by the Escrow Agent are not in
denominations  appropriate  for such  delivery to the Holder,  the Escrow  Agent
shall  request the Company to cause its transfer  agent and registrar to reissue
certificates  in  smaller  denominations.   The  Escrow  Agent  shall,  however,
immediately  release to the requesting  Holder  certificates  representing  such


<PAGE>

lesser number of shares as the  denominations  in its possession will allow that
is closest to but no more than the actual  number to be released to such Holder.
Upon receipt of the reissued shares in lesser  denominations  from the Company's
transfer agent, the Escrow Agent shall release to such Holder the balance of the
shares due to such Holder.

      4.    The Holder shall send the original  Debentures and Conversion Notice
to the Escrow Agent via FedEx or other commercial overnight courier,  along with
a fee of $50,  instructions  regarding names and amount of certificates  for the
issuance  of  the  Conversion  Shares,  and,  if  conversion  is  not  in  full,
instructions as to the  re-issuance of the balance of the Debentures;  provided,
however, that if the Escrow Agent is holding the Debentures, then the Conversion
Notice may be faxed or e-mailed and the fee may be transmitted via wire transfer
to the Escrow Agent. The Escrow Agent shall deliver the foregoing to the Company
within one (1) business day of the Escrow Agent's receipt thereof.  In the event
that the Escrow  Agent has  custody of the  Debentures,  the Escrow  Agent shall
notify the Company  and the Holder in writing of the  balance of the  Debentures
remaining  and the  Company  and the Holder  shall  acknowledge  such  notice in
writing, in lieu of issuance of a new Debenture for the balance.

      5.    If the Company  will be issuing a new  Debenture,  it will send such
new Debenture to the Escrow Agent by overnight  courier within five (5) business
days of its receipt of the original Debentures and Conversion Notice. The Escrow
Agent shall send the Conversion Shares to the Holder in accordance with Holder's
instructions within one (1) business day of receipt of the Conversion Notice and
will send the new Debenture (if any) to the Holder upon receipt.

      6.    The  Escrow  Agent  agrees to  notify  the  Company  in  writing  by
facsimile or e-mail each time the Escrow Agent releases the Escrow Shares to the
Holder,  such  notice  to be given at least one (1)  business  day prior to such
release.

      7.    Subject to the  provisions of and any  limitations  set forth in the
Purchase  Agreement or the Debentures,  the Company agrees that, at any time the
conversion  price of the  Debentures  are such that the number of Escrow  Shares
with respect to the  Debentures is less than five (5) times the number of shares
of Common  Stock that would be needed to satisfy full  conversion  of all of the
Debentures  given  the then  current  conversion  price  (the  "Full  Conversion
Shares"), upon five (5) business days written notice of such circumstance to the
Company  by a  Holder  and/or  Escrow  Agent,  it will  issue  additional  share
certificates,  in the names of all Holders and deliver same to the Escrow Agent,
such that the new number of Escrow  Shares  with  respect to the  Debentures  is
equal to five (5) times the Full Conversion Shares.


<PAGE>

                                    EXHIBIT G

                                    WARRANTS




<PAGE>

<TABLE>
<CAPTION>
                                                             SCHEDULE I


                                                         SCHEDULE OF BUYERS


                                                                                                                 NUMBER OF
          NAME                             SIGNATURE                       AMOUNT OF SUBSCRIPTION                 WARRANTS
--------------------------        ----------------------------         ------------------------------  -----------------------------
<S>                               <C>                                  <C>             <C>             <C>           <C>
                                                                        First Closing  Second Closing  First Closing  Second Closing

Highgate House Funds, Ltd.        By: /s/ Adam S. Gottbetter               $3,000,000        $500,000      1,166,667               0
                                    --------------------------

                                  Name: Adam S. Gottbetter
                                  Its:  Portfolio Manager

                                  488 Madison Avenue
                                  New York, NY 10022
                                  Telephone: (212) 400-6990
                                  Facsimile: (212) 400-6901

With a copy to:                   Troy Rillo, Esq.

                                  101 Hudson Street, Suite 3700
                                  Jersey City, NJ 07302
                                  Telephone: (201) 985-8300
                                  Facsimile: (201) 985-1964


Prenox, LLC                       By: /s/ Michael Weiss                   $10,000,000      $1,500,000      3,833,333               0
                                    --------------------------
                                  Name: Michael Weiss
                                  Its:

                                  623 Fifth Avenue, 32nd Floor
                                  New York, NY 10022
                                  Telephone: (212) 756-8045
                                  Facsimile: (212) 756-1480
</TABLE>


<PAGE>

                                   SCHEDULE II

                               SHARE DENOMINATIONS

NAME OF INVESTOR

Highgate House Funds, Ltd.

Stock  Certificate  Denominations  for the Escrow Shares in the name of Highgate
House Funds, Ltd.:

1     certificate for 11,666,667

Prenox, LLC.

Stock  Certificate  Denominations  for the Escrow  Shares in the name of Prenox,
LLC.:

1     certificate for 38,333,333