Exhibit 10.46


SECURITIES PURCHASE AGREEMENT


THIS
SECURITIES PURCHASE AGREEMENT
(this “Agreement”), dated as of August 29, 2007, by and among SENESCO TECHNOLOGIES, INC., a Delaware
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 Five Million Dollars ($5,000,000) of
secured convertible debentures in the form attached hereto as “Exhibit A”
(the “Convertible Debentures”), which shall be convertible into shares
of the Company’s common stock, par value $0.01 (the “Common Stock”) (as
converted, the “Conversion Shares”), and (ii) Series A warrants
substantially in the form attached hereto as “Exhibit B” and Series B
warrants substantially in the form attached hereto as “Exhibit C”
(collectively, the “Warrants”), to acquire up to that number of
additional shares of Common Stock set forth opposite such Buyer’s name in
columns (5), (6) and (7) of the Schedule I (as exercised, the “Warrant
Shares”), of which Two Million Dollars ($2,000,000) shall be funded within
two (2) business days following the later of (i) the date Stockholder Approval
(as defined below) is obtained or (ii) the date that the initial registration
statement relating to the YA Global Closing (as defined below) is filed with
the Securities and Exchange Commission (the “First Closing”), One
Million Five Hundred Thousand Dollars ($1,500,000) shall be funded on the First
Milestone Date (as defined below) (the “Second Closing”), and One
Million Five Hundred Thousand Dollars ($1,500,000) shall be funded on the
Second Milestone Date (as defined below) (the “Third Closing”)
(individually referred to as a “Closing” collectively referred to as the
“Closings”), for a total purchase price of up to Five Million Dollars
($5,000,000), (the “Purchase Price”) in the respective amounts set forth
opposite each Buyer(s) name on Schedule I (the “Subscription Amount”);


WHEREAS,
contemporaneously with the execution and delivery of this Agreement, the
parties hereto are executing and delivering a Registration Rights Agreement
(the “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;


WHEREAS,
the Convertible Debentures are secured by (i) a security interest in all of the
assets of the Company and of each of the Company’s subsidiaries as evidenced by
the security agreement substantially in the form agreed to by the Company and
the Buyer on the date hereof (the “Security Agreement”) and (ii) a
security interest in all of the intellectual property of the Company and of
each of the Company’s subsidiaries as evidenced by the patent security
agreement substantially in the form agreed to by the Company and the Buyer on
the date hereof













(the “Patent
Security Agreement” and together with the Security Agreement collectively
the “Security Documents”);


WHEREAS,
contemporaneously with the execution and delivery of this Agreement, the
parties hereto are executing and delivering Irrevocable Transfer Agent
Instructions (the “Irrevocable Transfer Agent Instructions”); and


WHEREAS,
the Convertible Debentures, the Conversion Shares, the Warrants, and the
Warrants Shares collectively are referred to herein as (the “Securities”).


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 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 to acquire up to that number of Warrant Shares as set forth
opposite such Buyer’s name in columns (5), (6) and (7) on Schedule I.  The First Milestone Date shall be defined as
the Company entering into a supply agreement with a third party manufacturer
for sufficient quantity and quality of nano-particle for encapsulation of eIF5A
gene to be used in toxicology and proof of concept human studies under a United
States Food and Drug Administration (“FDA”) accepted Investigational New
Drug (“IND”) application.  The
Second Milestone Date shall be defined as the Company entering into a supply
agreement with a third party manufacturer to provide sufficient quantity and
quality of eIF5A DNA to carry out toxicology and proof of concept human studies
under a FDA accepted IND application.


(b)                                 Closing
Dates.  The First Closing of the
purchase and sale of the Convertible Debentures and Warrants shall take place
at 10:00 a.m. Eastern Standard Time on the second (2nd) business day following the later of (i)
the date Stockholder Approval is obtained or (ii) the date that the initial
registration statement relating to the YA Global Closing is filed with the
Securities and Exchange Commission, subject to notification of satisfaction of
the conditions to the First Closing set forth herein and in Sections 6 and 7
below (or such later 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 4:00 p.m. Eastern
Standard Time on the First Milestone Date, subject to notification of
satisfaction of the conditions to the Second Closing set forth herein and in
Sections 6 and 7 below (or such later date as is mutually agreed to by the
Company and the Buyer(s)) (the “Second Closing Date”), and the Third
Closing of the purchase and sale of the Convertible Debentures shall take place
at 10:00 a.m. Eastern Standard Time on the Second Milestone Date, subject to
notification of satisfaction of the conditions to the Third Closing set forth
herein and in Sections 6 and 7 below (or such earlier date as is mutually
agreed to by the Company and the Buyer(s)) (the “Third Closing Date”)
(collectively referred to a the “Closing Dates”).  The Closings shall occur on the respective
Closing Dates at the offices of Morgan, Lewis & Bockius LLP, 502 Carnegie
Center,



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Princeton, New Jersey 08540 (or such other
place as is mutually agreed to by the Company and the Buyer(s)).  Notwithstanding the foregoing or anything
else in this Agreement to the contrary (including, but not limited to, the
terms of Section 7 below), the Buyer hereunder shall not be obligated to fund
any amounts to the Company which would, when aggregated with all other amounts
previously funded by the Buyer hereunder, exceed the aggregate amounts funded
by YA Global to the Company as of such date pursuant to subsection (d) below.


(c)                                  Form
of Payment.  Subject to the
satisfaction of the terms and conditions of this Agreement, on each Closing
Date, (i) the Buyers shall deliver to the Company such aggregate proceeds for
the Convertible Debentures and Warrants to be issued and sold to such Buyer at
such Closing, minus the fees to be paid directly from the proceeds of such
Closing as set forth herein, via irrevocable wire transfer, and (ii) the
Company shall deliver to each Buyer, Convertible Debentures and Warrants which
such Buyer is purchasing at such Closing in amounts indicated opposite such
Buyer’s name on Schedule I, duly executed on behalf of the Company.


(d)                                 YA
Global Agreement.  In addition to the
foregoing, Buyer hereby agrees to the Company’s sale and issuance of an
additional $5,000,000 of convertible debentures to YA Global Investments, L.P. (“YA
Global”) (the “YA Global Closing”) on substantially similar terms
hereunder subject to Stockholder Approval as set forth in Section 1(e) below.


(e)                                  Stockholders
Approval.  The Company shall call and
hold a special meeting of the shareholders as soon as reasonably practicable
(and use commercially reasonable best efforts to call and hold such meeting
within ninety (90) days of the date hereof), for the purpose of (i) approving
the transactions contemplated herein and the YA Global Closing, including the
issuance of all shares of Common Stock issuable pursuant to the terms of the
Transaction Documents, including, but not limited to, all shares of Common
Stock issuable upon conversion of the Debenture, the exercise of the Warrants
and the issuance of the Interest Shares, and after giving effect to any
adjustments in the amount of shares of Common Stock issuable pursuant to the
Transaction Documents as a result of any stock split, reverse stock split,
stock dividend, reorganization, recapitalization, reclassification or other
like change, and (ii) increasing the authorized Common Stock of the Company to
at least 100,000,000 shares of Common Stock (such affirmative approval being
referred to herein as the “Stockholder Approval”)  The Company’s Board shall recommend to the
shareholders to vote in favor of approving the transactions contemplated herein
and the YA Global Closing and the increase of the Company’s authorized Common
Stock; provided, however that the Board shall
not be obligated to make such a recommendation if the Board determines in good
faith, after receiving the advice of its independent legal and financial
advisors, that such a recommendation would cause the Board to breach its
fiduciary duties.


2.               BUYER’S
REPRESENTATIONS AND WARRANTIES.


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


(a)                                  Investment
Purpose.  Each Buyer is acquiring the
Securities for its own account for investment only and not with a view towards,
or for resale in connection with,



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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 Securities at any time
in accordance with or pursuant to an effective registration statement covering
such Securities or an available exemption under the Securities Act.  Such Buyer does not presently have any
agreement or understanding, directly or indirectly, with any Person to
distribute any of the Securities.


(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 Securities 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 the 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 Securities, which have been requested by such Buyer.  Each Buyer and its advisors, if any, have
been afforded the opportunity to ask questions of the 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 Securities 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 Securities.


(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 Securities, or the fairness or suitability of the investment
in the Securities, nor have such authorities passed upon or endorsed the merits
of the offering of the Securities.


(f)                                    Transfer
or Resale.  Each Buyer understands
that except as provided in the Registration Rights Agreement: (i) the
Securities 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, (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, or (C) such Buyer provides the Company with
reasonable assurances (in the form of seller and broker representation letters)
that



 4
 









such Securities can be sold, assigned or
transferred pursuant to Rule 144, Rule 144(k), or Rule 144A promulgated under
the Securities Act, as amended (or a successor rule thereto) (collectively, “Rule
144”), in each case following the applicable holding period set forth
therein; (ii) any sale of the Securities made in reliance on 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 the 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 the 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 agrees to the imprinting, so long
as is required by this Section 2(g), of a restrictive legend in substantially
the following form:


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


Certificates
evidencing the Conversion Shares or Warrant Shares shall not contain any legend
(including the legend set forth above), (i) while a registration statement
(including the Registration Statement) covering the resale of such security is
effective under the Securities Act, (ii) following any sale of such Conversion
Shares or Warrant Shares pursuant to Rule 144, (iii) if such Conversion Shares
or Warrant Shares are eligible for sale under Rule 144(k), or (iv) if such
legend is not required under applicable requirements of the Securities Act
(including judicial interpretations and pronouncements issued by the staff of
the SEC).  The Company shall cause its
counsel to issue a legal opinion to the Company’s transfer agent promptly after
the effective date (the “Effective Date”) of a Registration Statement if
required by the Company’s transfer agent to effect the removal of the legend
hereunder.  If all or any portion of the
Convertible Debentures or Warrants are exercised by a Buyer that is not an
Affiliate of the Company (a “Non-Affiliated Buyer”) at a time when there
is an effective registration statement to cover the resale of the Conversion
Shares or the Warrant Shares, such Conversion Shares or Warrant Shares shall be
issued free of all legends.  The Company
agrees that following the Effective Date or at such time as such legend is no
longer required under this Section 2(g), it will, no later than three (3)
Trading Days following the delivery by a Non-Affiliated Buyer to the Company or
the Company’s transfer agent of a certificate representing Conversion Shares or
Warrant Shares, as



 5
 









the case may be,
issued with a restrictive legend (such third Trading Day, the “Legend
Removal Date”), deliver or cause to be delivered to such Non-Affiliated
Buyer a certificate representing such shares that is free from all restrictive
and other legends.  The Company may not
make any notation on its records or give instructions to any transfer agent of
the Company that enlarge the restrictions on transfer set forth in this
Section.  Each Buyer acknowledges that
the Company’s agreement hereunder to remove all legends from Conversion Shares
or Warrant Shares is not an affirmative statement or representation that such
Conversion Shares or Warrant Shares are freely tradable.  Each Buyer, severally and not jointly with
the other Buyers, agrees that the removal of the restrictive legend from
certificates representing Securities as set forth in this Section 2(g) is
predicated upon the Company’s reliance that the buyer will sell any Securities
pursuant to either the registration requirements of the Securities Act,
including any applicable prospectus delivery requirements, or an exemption
therefrom, and that if Securities are sold pursuant to a Registration
Statement, they will be sold in compliance with the plan of distribution set
forth therein.


(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 and the Transaction
Documents (as defined herein); (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-K for the fiscal year
ended June 30, 2006; (iv) the Company’s Form 10-Q for the fiscal quarter ended
March 31, 2007 and (v) 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)                                     Due Formation of Corporate and
Other Buyers.  If the Buyer(s) is a corporation, trust,
partnership or other entity that is not an individual person, it has been
formed and validly exists and has not been organized for the specific purpose of
purchasing the Securities and is not prohibited from doing so.


(k)                                  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.



 6
 









3.               REPRESENTATIONS AND WARRANTIES OF
THE COMPANY.


Except as set forth under the corresponding section of the
Disclosure Schedules or in the Company’s SEC Documents (as defined below) which
Disclosure Schedules and/or SEC Documents shall be deemed a part hereof and to
qualify any representation or warranty otherwise made herein to the extent of
such disclosure, the Company hereby makes the representations and warranties
set forth below to each Buyer:


(a)                                  Subsidiaries. 
All of the direct and indirect subsidiaries of the Company are set forth
on Schedule 3(a).  The Company owns,
directly or indirectly, all of the capital stock or other equity interests of
each subsidiary free and clear of any liens, and all the issued and outstanding
shares of capital stock of each subsidiary are validly issued and are fully
paid, non-assessable and free of preemptive and similar rights to subscribe for
or purchase securities.


(b)                                 Organization and Qualification. 
The Company and 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 or reasonably be expected to
result in (i) a material adverse effect on the legality, validity or enforceability
of any Transaction Document, (ii) a material adverse effect on the results of
operations, assets, business or condition (financial or otherwise) of the
Company and the subsidiaries, taken as a whole, or (iii) a material adverse
effect on the Company’s ability to perform in any material respect on a timely
basis its obligations under any Transaction Document (any of (i), (ii) or
(iii), a “Material Adverse Effect”) and no proceeding has been
instituted in any such jurisdiction revoking, limiting or curtailing or seeking
to revoke, limit or curtail such power and authority or qualification.


(c)                                  Authorization, Enforcement,
Compliance with Other Instruments.  (i) The Company has the
requisite corporate power and authority to enter into and perform its obligations
under this Agreement, the Convertible Debentures, the Warrants, the Security
Documents, the Registration Rights Agreement, the Irrevocable Transfer Agent
Instructions, and each of the other agreements entered into by the parties
hereto in connection with the transactions contemplated by this Agreement
(collectively the “Transaction Documents”) and to issue the Securities
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 Securities, the reservation for issuance and
the issuance of the Conversion Shares, and the reservation for issuance and the
issuance of the Warrant Shares, 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



 7
 









applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or 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 Registration
Rights Agreement or perform any of the Company’s other obligations under the
Transaction Documents.


(d)                                 Capitalization. 
The authorized capital stock of the Company consists of 60,000,000
shares of Common Stock and 5,000,000 shares of Preferred Stock, par value $0.01
(“Preferred Stock”) of which 17,473,694 shares of Common Stock and zero
shares of Preferred Stock are issued and outstanding.  All of the outstanding shares of capital stock
of the Company are validly issued, fully paid and nonassessable, have been
issued in compliance with all federal and state securities laws, and none of
such outstanding shares was issued in violation of any preemptive rights or
similar rights to subscribe for or purchase securities.  Except as disclosed in Schedule 3(d): (i)
none of the Company’s capital stock is subject to preemptive rights or any
other similar rights or any liens or encumbrances suffered or permitted by the
Company; (ii) 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, or exercisable or exchangeable for, any
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 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, or exercisable or exchangeable for, any
capital stock of the Company or any of its subsidiaries; (iii) there are no
outstanding debt securities, notes, credit agreements, credit facilities or
other agreements, documents or instruments evidencing indebtedness of the
Company or any of its subsidiaries or by which the Company or any of its
subsidiaries is or may become bound; (iv) there are no financing statements
securing obligations in any material amounts, either singly or in the
aggregate, filed in connection with the Company or any of its subsidiaries; (v)
there are no outstanding securities or instruments of the Company or any of its
subsidiaries which contain any redemption or similar provisions, and there are
no contracts, commitments, understandings or arrangements by which the Company
or any of its subsidiaries is or may become bound to redeem a security of the
Company or any of its subsidiaries; (vi) there are no securities or instruments
containing anti-dilution or similar provisions that will be triggered by the
issuance of the Securities; (vii) the Company does not have any stock
appreciation rights or “phantom stock” plans or agreements or any similar plan
or agreement; and (viii) the Company and its subsidiaries have no liabilities
or obligations required to be disclosed in the SEC Documents but not so
disclosed in the SEC Documents, other than those incurred in the ordinary
course of the Company’s or its subsidiaries’ respective businesses and which,
individually or in the aggregate, do not or would not have a Material Adverse
Effect.  The Company has furnished to the
Buyers true, correct and complete copies of the Company’s Certificate of
Incorporation, as amended and as in effect on the date hereof (the “Certificate
of Incorporation”), and the Company’s Bylaws, as amended and as in effect
on the date hereof (the “Bylaws”), and the terms of all securities
convertible into, or exercisable or exchangeable for, shares of Common Stock
and the material rights of the holders thereof in respect thereto.  Except for Stockholder Approval of the
transactions contemplated by this Agreement, no further approval or
authorization of any stockholder, the Board of Directors of the Company or
others is required for the issuance and



 8
 









sale of the
Securities.  There are no stockholders
agreements, voting agreements or other similar agreements with respect to the
Company’s capital stock to which the Company is a party or, to the knowledge of
the Company, between or among any of the Company’s stockholders.


(e)                                  Issuance of Securities. 
The issuance of the Convertible Debentures and the Warrants is duly
authorized and free from all taxes, liens and charges with respect to the issue
thereof.  Upon conversion in accordance
with the terms of the Convertible Debentures or exercise in accordance with the
Warrants, as the case may be, the Conversion Shares and Warrant Shares, respectively,
when issued will be validly issued, fully paid and nonassessable, free from all
taxes, liens and charges with respect to the issue thereof.  The Company has reserved from its duly
authorized capital stock the appropriate number of shares of Common Stock as
set forth in this Agreement.


(f)                                    No Conflicts.  
The execution, delivery and performance of the Transaction Documents by
the Company and the consummation by the Company of the transactions
contemplated hereby and thereby (including, without limitation, the issuance of
the Convertible Debentures and the Warrants, and reservation for issuance and
issuance of the Conversion Shares and the Warrant Shares) will not (i) result
in a violation of any certificate of incorporation, certificate of formation,
any certificate of designations or other constituent documents of the Company
or any of its subsidiaries, any capital stock of the Company or any of its
subsidiaries or bylaws of the Company or any of its subsidiaries or (ii)
conflict with, or constitute a default (or an event which with notice or lapse
of time or both would become a default) in any respect 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 (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including foreign, federal and state
securities laws and regulations and the rules and regulations of the Primary
Market) 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 in the case of each of clauses (ii) and (iii), such as could
not, individually or in the aggregate, have or reasonably be expected to result
in a Material Adverse Effect.  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.  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.


(g)                                 SEC Documents; Financial Statements. 
The Company has filed all reports, schedules, forms, statements and
other documents required to be filed by it with the SEC under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), for the two years
preceding the date hereof (or such shorter period as the Company was required
by law or regulation to file such material) (all of the foregoing filed prior
to the date hereof or amended



 9
 









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”) on timely basis or has received a valid
extension of such time of filing and has filed any such SEC Document prior to
the expiration of any such extension. 
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 SEC Documents complied in all material respects
with the requirements of the Exchange Act and the rules and regulations of the
SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.  As of their respective dates, the financial
statements of the Company included in the SEC Documents 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 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 Buyers which is not included in the SEC Documents,
including, without limitation, information referred to in Section 2(i) of 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 circumstance under which they are or were made and not misleading.


(h)                                 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.


(i)                                     Absence of Litigation. 
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 have a Material Adverse Effect.


(j)                                     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 each 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 Securities.  The Company
further represents to each Buyer that the Company’s decision to enter into this



 10
 









Agreement has been based
solely on the independent evaluation by the Company and its representatives.


(k)                                  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 Securities.


(l)                                     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 Securities under the Securities Act or
cause this offering of the Securities to be integrated with prior offerings by
the Company for purposes of the Securities Act.


(m)                               Employee Relations. 
Neither the Company nor any of its subsidiaries is involved in any labor
dispute or, 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.


(n)                                 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.


(o)                                 Environmental Laws. 
The Company and its subsidiaries are (i) in compliance with any and all
applicable foreign, federal, state and local laws and regulations relating to
the protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants (“Environmental Laws”),
(ii) 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.


(p)                                 Title. 
All real property and facilities held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable leases



 11
 









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.


(q)                                 Insurance. 
The Company and each of its subsidiaries is 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.


(r)                                    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.


(s)                                  Internal Accounting Controls. 
The Company and each of its subsidiaries maintains 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 are compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.


(t)                                    No Material Adverse Breaches, etc. 
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 has or would reasonably be expected in the future to
have a Material Adverse Effect on the business, properties, operations,
financial condition, results of operations or prospects of the Company or its
subsidiaries.  Neither the Company nor
any of its subsidiaries is in breach of any contract or agreement which breach
has or would reasonably be expected to have a Material Adverse Effect on the
business, properties, operations, financial condition, results of operations or
prospects of the Company or its subsidiaries.


(u)                                 Tax Status. 
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



 12
 









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.


(v)                                 Certain Transactions. 
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.


(w)                               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.


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


(y)                                 Registration Rights. 
Other than each of the Buyers, no Person has any right to cause the
Company to effect the registration under the Securities Act of any securities
of the Company.  There are no outstanding
registration statements not yet declared effective and there are no outstanding
comment letters from the SEC or any other regulatory agency.


(z)                                   Private Placement. Assuming the accuracy of the
Buyers’ representations and warranties set forth in Section 2, no registration
under the Securities Act is required for the offer and sale of the Securities
by the Company to the Buyers as contemplated hereby. The issuance and sale of
the Securities hereunder does not contravene the rules and regulations of the
Primary Market.


(aa)                            Listing and Maintenance
Requirements.  The Company’s Common Stock is registered
pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has
taken no action designed to terminate, or which to its knowledge is likely to
have the effect of, terminating the registration of the Common Stock under the
Exchange Act nor has the Company received any notification that the SEC is
contemplating terminating such registration. 
The Company has not, in the twelve (12) months preceding the date
hereof, received notice from any Primary Market on which the Common Stock is or
has been listed or quoted to the effect that the Company is not in compliance
with the listing or maintenance requirements of such Primary



 13
 









Market.  The Company is, and has no reason to believe
that it will not in the foreseeable future continue to be, in compliance with
all such listing and maintenance requirements.


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


(cc)                            Dilutive Effect. 
The Company understands and acknowledges that the number of Conversion
Shares issuable upon conversion of the Convertible Debentures and the Warrant
Shares issuable upon exercise of the Warrants will increase in certain
circumstances.  The Company further
acknowledges that its obligation to issue Conversion Shares upon conversion of
the Convertible Debentures in accordance with this Agreement and the Convertible
Debentures and its obligation to issue the Warrant Shares upon exercise of the
Warrants in accordance with this Agreement and the Warrants, in each case, is
absolute and unconditional regardless of the dilutive effect that such issuance
may have on the ownership interests of other stockholders of the Company.


4.               COVENANTS.


(a)                                  Best Efforts. 
Each party shall use its best efforts to timely satisfy each of the
conditions to be satisfied by it as provided in Sections 6 and 7 of this
Agreement.


(b)                                 Form D. 
The Company agrees to file a Form D with respect to the Securities 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 Securities, or obtain an
exemption for the Securities 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.


(c)                                  Reporting Status. 
Until the earlier of (i) the date as of which the Buyer(s) may sell all
of the Securities without restriction pursuant to Rule 144(k) promulgated under
the Securities Act (or successor thereto), or (ii) the date on which (A) the
Buyers shall have sold all the Securities and (B) none of the Convertible
Debentures or Warrants 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.



 14
 









(d)                                 Use of Proceeds. 
The Company will use the proceeds from the sale of the Convertible
Debentures for the purposes and in the amounts set forth on Schedule 4(d).


(e)                                  Reservation of Shares. 
If the Company obtains Stockholder Approval, the Company shall promptly
establish a reserve of 31,888,888 shares of Common Stock for issuance to the Buyer(s)
upon conversions of the Convertible Debentures and upon exercise of the
Warrants (collectively, the “Share Reserve”).  The Company shall take all action reasonably
necessary to at all times have authorized, and reserved for the purpose of
issuance, such number of shares of Common Stock as shall be necessary to effect
the full conversion of the Convertible Debentures and the full exercise of the
Warrants.  If at any time the Share
Reserve is insufficient to effect the full conversion of the Convertible
Debentures or the full exercise of the Warrants, the Company shall increase the
Share Reserve accordingly.  If at any
time the Company does not have sufficient authorized and unissued shares of
Common Stock available to maintain the Share Reserve as required by this
Section 4(e), the Company shall call and hold a special meeting of the
shareholders as soon as reasonably practicable (and use commercially reasonable
best efforts to call and hold such meeting within ninety (90) days of the date
of such occurrence), for the purpose of increasing the number of shares
authorized.  The Company’s Board shall
recommend to the shareholders to vote in favor of increasing the number of
shares of Common Stock authorized; provided,
however that the Board shall not be obligated to make such a recommendation if
the Board determines in good faith, after receiving the advice of its
independent legal and financial advisors, that such a recommendation would
cause the Board to breach its fiduciary duties.


(f)                                    Listings or Quotation. 
The Company’s Common Stock shall be listed or quoted for trading on any
of (a) the American Stock Exchange (“AMEX”), (b) New York Stock
Exchange, (c) the Nasdaq Global Market, (d) the Nasdaq Capital Market, or (e)
the NASD OTC Bulletin Board (“OTCBB”) (each, a “Primary Market”).  The Company shall promptly secure the listing
of all of the Registrable Securities (as defined in the Registration Rights
Agreement) upon each national securities exchange and automated quotation
system, if any, upon which the Common Stock is then listed (subject to official
notice of issuance) and shall maintain such listing of all Registrable
Securities from time to time issuable under the terms of the Transaction
Documents.


(g)                                 Fees and Expenses.


(i)                                     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.


(ii)                                  The
Company shall pay to the Buyer One Hundred Thousand Dollard ($100,000) from the
proceeds of the First Closing, Seventy-Five Thousand Dollars ($75,000) from the
proceeds of the Second Closing, and Seventy-Five Thousand Dollars ($75,000)
from the proceeds of the Third Closing.



 15














(iii)                               The
Company shall reimburse Stanford Group Company for its undocumented, reasonable
costs and expenses for the transactions contemplated hereby, in an amount equal
to 2% of the gross amount actually disbursed by the Buyer hereunder.


(iv)                              The
Company shall pay a structuring and due diligence fee to the Buyer of Thirty
Thousand Dollars ($30,000), which shall be paid directly from the proceeds of
the First Closing.


(h)                                 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 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(h) will thereafter be
applicable to the Convertible Debentures.


(i)                                     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%) 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, or (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.


(j)                                     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).



 16
 








(k)                                  Subsequent Offerings. 



(i)                                     Except
as permitted pursuant to Section 4(k)(iii), without the written consent of the
Buyer, so long as any portion of the Convertible Debentures are outstanding,
the Company shall not (a) grant, issue or sell any Common Stock or other equity
securities, any securities convertible into or exchangeable for any Common
Stock or other equity securities or take any other action that may result in the
issuance of any of the foregoing, other than to issue options or similar rights
to purchase Common Stock granted pursuant to compensation, benefit, severance
or similar plans or employment agreements of the Company as in effect on the
date of this Agreement, or (b) file any registration statements on Form S-8.


(ii)                                  
Except as permitted pursuant to Section 4(k)(iii), without the written consent
of the Buyer, so long as any portion of the Convertible Debentures are
outstanding, the Company shall not 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,
or take any other action that may result in any of the foregoing, except that
any wholly-owned subsidiary of the Company may merge with the Company, provided
that the Company shall be the continuing or surviving entity. 


(iii)                               Notwithstanding
the foregoing, this Section 4(k) shall not apply to Excluded Securities (as defined
in the Convertible Debenture).


(l)            Notwithstanding the restrictions
set forth in Section 4(k)(i) and Section 4(k)(ii) above, the Company may issue
securities of the Company provided that (a) any such issuance is for
consideration not less than ninety percent (90%) of the market price of the
Common Stock on the date of such issuance.


(m)          Neither the Buyer(s) nor any of its affiliates have an open short
position in the Common Stock of the Company, and the Buyer(s) agrees that it
shall 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 as long as
any Convertible Debentures shall remain outstanding.  


(n)           Rights of First Refusal. 
So long as any portion of
Convertible Debentures are outstanding, if the Company intends to raise
additional capital by the issuance or sale of capital stock of the Company,
including without limitation shares of any class of common stock, any class of
preferred stock, options, warrants, convertible debt or any other securities
convertible or exercisable into shares of common stock (whether the offering is
conducted by the Company, underwriter, placement agent or any third party) the
Company shall be obligated to offer to the Buyers such issuance or sale of
capital stock, by providing in writing the principal amount of capital it
intends to raise and outline of the material terms of such capital raise, prior
to the offering such issuance or sale of capital stock  to any third parties including, but not
limited to, current or former officers or directors, current or former
shareholders and/or investors of the obligor, underwriters, brokers, agents or
other third parties.  The Buyers shall
have five (5) business days from receipt of such notice of the sale or issuance
of capital stock to accept or reject all or a portion of such capital raising
offer.  Any offer made to Buyer pursuant
to this section shall simultaneously be made on the same terms to YA
Global on a pro rata basis.



 17
 








(o)                                 Lock Up Agreements. 
On the date hereof, the Company shall obtain from each officer and
director a lock up agreement in the form attached hereto as Exhibit D.


(p)                                 Additional Registration Statements. 
Until the effective date of the initial Registration Statement, and except
as required in connection with the YA Global Closing, the Company will not file a
registration statement under the Securities Act relating to securities that are
not the Securities.


(q)                                 Review of Public Disclosures. 
All SEC filings (including, without limitation, all filings required
under the Exchange Act, which include Forms 10-Q and 10-QSB, 10-K and 10K-SB,
8-K, etc) and other public disclosures made by the Company, including, without
limitation, all press releases, investor relations materials, and scripts of
analysts meetings and calls, shall be reviewed and approved for release by the
Company’s attorneys and, if containing financial information, the Company’s
independent certified public accountants.


(r)                                    Disclosure of Transaction. 
Within four Business Days following the date of this Agreement, the
Company shall file a Current Report on Form 8-K describing the terms of the
transactions contemplated by the Transaction Documents in the form required by
the Exchange Act and attaching the material Transaction Documents (including,
without limitation, this Agreement, the form of the Convertible Debenture, the
form of Warrant and the form of the Registration Rights Agreement) as exhibits
to such filing.


5.               TRANSFER AGENT INSTRUCTIONS.


(a)                                  The Company shall issue the
Irrevocable Transfer Agent Instructions to its transfer agent, and any
subsequent transfer agent, irrevocably appointing James M. Davis as the Company’s
agent for the purpose of instructing its transfer agent to issue certificates
or credit shares to the applicable balance accounts at The Depository Trust
Company (“DTC”), registered in the name of each Buyer or its respective
nominee(s), for the Conversion Shares and the Warrant Shares issued upon
conversion of the Convertible Debentures or exercise of the Warrants as
specified from time to time by each Buyer to the Company upon conversion of the
Convertible Debentures or exercise of the Warrants.  The Company shall not change its transfer
agent without the express written consent of the Buyers, which may be withheld
by the Buyers in their sole discretion. 
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 or Warrant Shares prior to registration of such shares under
the Securities Act) will be given by the Company to its transfer agent, and
that the Securities shall otherwise be freely transferable on the books and records
of the Company as and to the extent provided in this Agreement and the other
Transaction Documents.  If a Buyer
effects a sale, assignment or transfer of the Securities in accordance with
Section 2(f), the Company shall promptly instruct its transfer agent to issue
one or more certificates or credit shares to the applicable balance accounts at
DTC in such name and in such denominations as specified by such Buyer to effect
such sale, transfer or assignment and, with respect to any transfer, shall permit
the transfer.  In the event that such
sale, assignment or transfer involves Conversion Shares or Warrant Shares sold,
assigned or transferred pursuant to an effective registration statement or
pursuant to Rule 144, the transfer agent shall issue such



 18
 








Securities to the Buyer,
assignee or transferee, as the case may be, without any restrictive
legend.    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.  The Company acknowledges that a breach by it
of its obligations hereunder will cause irreparable harm to the Buyer 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.               CONDITIONS TO THE COMPANY’S
OBLIGATION TO SELL.


The obligation of the Company hereunder to issue and sell the
Convertible Debentures to the Buyer(s) at the Closings is subject to the
satisfaction, at or before the Closing Dates, 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:


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


(b)                                 The Buyer(s) shall have delivered
to the Company the Purchase Price for the Convertible Debentures and Warrants
in the respective amounts as set forth next to each Buyer as set forth on
Schedule I attached hereto, minus any fees to be paid directly from the
proceeds the Closings as set forth herein, 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 Dates 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 Dates.  


7.               CONDITIONS TO THE BUYER’S
OBLIGATION TO PURCHASE.


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


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


(ii)                                  The
Common Stock shall be authorized for quotation or trading on the AMEX, 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 be approved for listing or trading on the AMEX.



 19
 








(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 First 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 First Closing Date


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


(v)                                 The
Buyers shall have received an opinion of counsel from counsel to the Company in
a form satisfactory to the Buyers.


(vi)                              The
Company shall have provided to the Buyers a true copy of a certificate of good
standing evidencing the formation and good standing of the Company from the secretary
of state (or comparable office) from the jurisdiction in which the Company is
incorporated, as of a date within 10 days of the First Closing Date.


(vii)                           The
Company shall have delivered to the Buyers a certificate, executed by the
Secretary of the Company and dated as of the First Closing Date, as to (i) the
resolutions consistent with Section 3(c) as adopted by the Company’s Board of
Directors in a form reasonably acceptable to such Buyer, (ii) the Certificate
of Incorporation and (iii) the Bylaws, each as in effect at the First Closing.


(viii)                        A form
UCC-1, any appropriate filings to be made with the Patent and Trademark Office,
or such other forms as may be required to perfect the Buyer’s interest in the
Pledged Property as detailed in the Security Agreement and the Patent Security
Agreement shall have been filed.


(ix)                                The
Company shall have created the Share Reserve. 


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


(xi)                                YA
Global shall have funded to the Company $3,000,000 in aggregate gross proceeds
in connection with the YA Global Closing;


(xii)                             Stockholder Approval shall have been obtained
and the Registration Statement for  YA Global shall have been filed
with the SEC.


(xiii)                          The Company shall be in compliance with the
terms of all of the Transaction Documents.



 20
 








(xiv)                         The Company shall have certified, in a
certificate executed by two officers of the Company and dated as of the First
Closing Date, that all conditions to the First Closing have been satisfied.


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


(i)                                     The
First Closing shall have occurred.


(ii)                                  All the requirements required to have be
achieved in connection with the First Milestone Date shall have been achieved
and the Company shall have provided to Buyer reasonably satisfactory evidence
thereof.


(iii)                               The
Common Stock shall be authorized for quotation or trading on the Primary
Market, 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 be approved for listing or trading on the Primary
Market.  


(iv)                              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 Second 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 Second Closing Date. 


(v)                                 The
Company shall have executed and delivered to the Buyers the Convertible
Debentures with respect to the Second Closing in the amounts set forth opposite
each Buyers name on Schedule I attached hereto.


(vi)                              The
Company shall have filed the Registration Statement with the SEC materially in
compliance with the rules and regulations promulgated by the SEC for filing
thereof.


(vii)                           The Company shall be in compliance with the
terms of all of the Transaction Documents.


(viii)                        The
Company shall have certified, in a certificate executed by two officers of the
Company and dated as of the Second Closing Date, that all conditions to the
Second Closing have been satisfied.


(c)                                  The
obligation of the Buyers hereunder to accept the Convertible Debentures at the
Third Closing is subject to the satisfaction, at or before the Third Closing
Date, of each of the following conditions:



 21
 








(i)                                     The
First Closing and the Second Closing shall both have occurred.


(ii)                                  All the requirements required to have be
achieved in connection with the Second Milestone Date shall have been achieved
and the Company shall have provided to Buyer reasonably satisfactory evidence
thereof.


(iii)                               The
Common Stock shall be authorized for quotation or trading on the Primary
Market, 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 be approved for listing or trading on the Primary
Market. 


(iv)                              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 Third 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 Third Closing Date.


(v)                                 The
Company shall have executed and delivered to the Buyers the Convertible
Debentures with respect to the Third Closing in the amounts set forth opposite
each Buyers name on Schedule I attached hereto.


(vi)                              The
Registration Statement shall have been declared effective by the SEC.  


(vii)                           The Company shall be in compliance with the
terms of all of the Transaction Documents.


(viii)                        The
Company shall have certified, in a certificate executed by two officers of the
Company and dated as of the Third Closing Date, that all conditions to the
Third Closing have been satisfied.


8.               INDEMNIFICATION.


(a)                                  In
consideration of the Buyer’s execution and delivery of this Agreement and
acquiring the Convertible Debentures 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 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



 22
 








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 other Transaction
Documents 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 other Transaction Documents 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 Buyer
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 parties hereto, 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 and the
Conversion Shares, as a Buyer of Convertible Debentures 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 Transaction Documents 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 Transaction Documents or any
other instrument, document or agreement executed pursuant hereto by any of the
parties hereto.  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.


9.               GOVERNING LAW:
MISCELLANEOUS.


(a)                                  Governing
Law.  This Agreement shall be
governed by and interpreted in accordance with the laws of the State of New
Jersey without regard to the principles of conflict of laws.  The parties further agree that any action
between them shall be heard in Hudson County, New Jersey, and expressly consent
to the jurisdiction and venue of the Superior Court of New Jersey, sitting in
Hudson County and the United States District Court for the District of New
Jersey sitting in Newark, New Jersey for the adjudication of any civil action
asserted pursuant to this Paragraph.



 23
 








(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:

  	
  Senesco Technologies, Inc.

  
	
   

  	
  303 George Street, Suite 420

  
	
   

  	
  New Brunswick, NJ 08901

  
	
   

  	
  Attention:

  	
  Chief Executive Officer

  
	
   

  	
  Telephone:

  	
  732-296-8400

  
	
   

  	
  Facsimile:

  	
  732-296-9292

  
	
   

  	
   

  
	
  With a copy to:

  	
  Morgan, Lewis & Bockius LLP

  
	
   

  	
  502 Carnegie Center

  
	
   

  	
  Princeton, NJ 08540

  
	
   

  	
  Attention:

  	
  Emilio Ragosa, Esq.

  
	
   

  	
  Telephone:

  	
  (609) 919-6633

  
	
   

  	
  Facsimile:

  	
  (609) 919-6701

  



 



 24
 








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 9(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 9, and the indemnification provisions set forth in Section
8, 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 First 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 6 and 7 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 other party; provided, however, that if this
Agreement is terminated by the Company pursuant to this Section 9(l), the
Company shall remain obligated to reimburse the Buyer(s) for the fees and
expenses of the Buyer described in Section 4(g) above.


(m)                               Brokerage.  Except for H.C. Wainright & Co., Inc. and
Stanford Group Company, the Company represents that no broker, agent, finder or
other party has been



 25
 








retained by it in connection
with the transactions contemplated hereby and that no other fee or commission
has been agreed by the Company to be paid for or on account of the transactions
contemplated hereby.  


(n)                                 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.


(o)                                 Accounting
Provision.  For purposes of clarity,
the Company shall not be obligated to settle any conversion of the Debentures
or exercise of the Warrants in cash, except as a result of the negligence or
willful misconduct of the Company, then in such case, any cash settlement shall
be as per the terms of the Debenture or Warrant, as applicable.


[REMAINDER PAGE INTENTIONALLY LEFT BLANK]



 26
 








IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.


	
  

  	
  COMPANY:

  
	
   

  	
  SENESCO TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/ Bruce C. Galton

  	
   

  
	
   

  	
  Name: Bruce C. Galton

  
	
   

  	
  Title:   President and Chief
  Executive Officer

  



 



 27
 








IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.


	
  

  	
  BUYERS:

  
	
   

  	
  STANFORD VENTURE CAPITAL HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James M. Davis

  	
   

  
	
   

  	
  Name: James M. Davis

  
	
   

  	
  Its:       President
  and Director

  



 



 28














SCHEDULE I


SCHEDULE OF BUYERS


	
  (1)

  	
   

  	
  (2)

  	
   

  	
  (3)

  	
   

  	
  (4)

  	
   

  	
  (5)

  	
   

  	
  (6)

  	
   

  	
  (7)

  	
   

  	
  (8)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Legal Representative’s

  
	
   

  	
   

  	
  Subscription
  Amount

  	
   

  	
  Number of Warrant
  Shares*

  	
   

  	
  Address and Facsimile

  
	
  Buyer

  	
   

  	
  First Closing

  	
   

  	
  Second Closing

  	
   

  	
  Third Closing

  	
   

  	
  First Closing

  	
   

  	
  Second Closing

  	
   

  	
  Third Closing

  	
   

  	
  Number

  
	
  Stanford Venture Capital Holdings,
  Inc.

  

  6075 Poplar Avenue

  Suite 300

  Memphis, TN 38119

  Attention: James M. Davis,

  President and Director

  Telephone: (901) 537-1600

  Facsimile: (901) 680-5265

  	
   

  	
  $2,000,000 (conversion price of $0.90 per share)

  	
   

  	
  $1,500,000 (conversion price of $0.90 per share)

  	
   

  	
  $1,500,000 (conversion price of $0.90 per share)

  	
   

  	
  1,111,111 shares of Series A Warrants (at an exercise
  price of $1.01 per share).

   

  1,111,111 shares of Series B Warrants (at an exercise
  price of $0.90 per share).

   

  Additional 50% warrant coverage as follows:

   

  1,388,889 shares of Series A Warrants (at an exercise
  price of $1.01 per share).

   

  1,388,889 shares of Series B Warrants (at an exercise
  price of $0.90 per share).

  	
   

  	
  833,333 shares of Series A Warrants (at an exercise
  price of $1.01 per share).

   

  833,333 shares of Series B Warrants (at an exercise
  price of $0.90 per share).

  	
   

  	
  833,333 shares of Series A Warrants (at an exercise
  price of $1.01 per share).

   

  833,333 shares of Series B Warrants (at an exercise
  price of $0.90 per share).

  	
   

  	
  Akerman Senterfitt

  One Southeast Third Avenue,

  25th Floor

  Miami, Florida 33131

  Attention: Jose Gordo, Esq.

  Telephone: 305-755-5812

  Facsimile: 305-349-4789

  



 






* Each issuance of Warrants shall be distributed to
the following entities or individuals in the indicated proportions:  Stanford Venture Capital Holdings, Inc.
(50.00%), Daniel T. Bogar (11.5625%), William R. Fusselmann (11.5625%), Osvaldo
Pi and Vivian Pi, Trustees, or their successors in trust, under the Osvaldo and
Vivian Pi Living Trust, dated February 13, 2007, and any amendments thereto,
(11.5625%), Ronald M. Stein (11.5625%), Charles M. Weiser (1.875%), and Tal
Kimmel (1.875%).

















DISCLOSURE
SCHEDULE


None.















EXHIBIT A


FORM OF CONVERTIBLE DEBENTURE















EXHIBIT B


FORM OF SERIES A WARRANT















EXHIBIT C


FORM OF SERIES B WARRANT  















EXHIBIT D


LOCK UP AGREEMENT


The undersigned
hereby agrees that for a period commencing on August 29, 2007 and expiring on
the earlier of (a) the date that all amounts owed to Stanford Venture
Capital Holdings, Inc. under the Secured Convertible Debentures issued pursuant
to the Securities Purchase Agreement have been repaid, (b) the date ninety (90) days after the YA
Global Third Closing (as
defined in the YA Global
Securities Purchase Agreement), or (c) if the Company has not obtained
Stockholder Approval, eighteen months from the YA Global First Closing (as
defined in the YA Global Securities Purchase Agreement) (the “Lock-up Period”), he, she or it will not, directly
or indirectly, without the prior written consent of the Buyer, issue, offer,
agree or offer to sell, sell, grant an option for the purchase or sale of,
transfer, pledge, assign, hypothecate, distribute or otherwise encumber or
dispose of any securities of the Company, including common stock or options,
rights, warrants or other securities underlying, convertible into, exchangeable
or exercisable for or evidencing any right to purchase or subscribe for any
common stock (whether or not beneficially owned by the undersigned), or any
beneficial interest therein (collectively, the “Securities”) except (i)
in accordance with the volume
limitations set forth in Rule 144(e) of the General Rules and Regulations under
the Securities Act of 1933, as amended, or (ii) either during his
or her lifetime or upon death, by gift, will or intestacy, to his or her immediate
family or to a trust or limited partnership the beneficiaries or members of
which are exclusively the undersigned and/or a member or members of his or her
immediate family; provided, however, it shall be a condition to the transfer
that the transferee execute an agreement stating that the transferee is
receiving and holding the Securities subject to the provisions of this Lock-up
Agreement.


In order to enable
the aforesaid covenants to be enforced, the undersigned hereby consents to the
placing of legends and/or stop-transfer orders with the transfer agent of the
Company’s securities with respect to any of the Securities registered in the
name of the undersigned or beneficially owned by the undersigned, and the
undersigned hereby confirms the undersigned’s investment in the Company.


	
  Dated:
                        ,
  2007

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
  City, State, Zip
  Code:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Social
  Security Number

  	
   

  
	
   

  	
  or Taxpayer I.D.
  Number