Document:

Exhibit 10.7

 

SECURITIES
PURCHASE AGREEMENT

 

This Securities Purchase Agreement (this “Agreement”) is dated
as of October 28, 2004, among Power 3 Medical Products, Inc.,
a New York corporation (the “Company”), and each purchaser
identified on the signature pages hereto (each, including its successors
and assigns, a ”Purchaser” and collectively the “Purchasers”).

 

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

 

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

 

ARTICLE I.

DEFINITIONS

 

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

 

“Action” shall
have the meaning ascribed to such term in Section 3.1(j).

 

“Additional Investment
Right” means the Additional Investment Rights as described in Section 2.2(a)(iv), in the form of Exhibit E attached hereto.

 

“Additional Investment
Right Securities” means the Debentures issuable upon exercise of the
Additional Investment Right.

 

“Additional Investment
Right Shares” means the shares of Common Stock issuable upon conversion of
the Additional Investment Right Securities.

 

“Affiliate” means,
with respect to any Person, any other Person that, directly or indirectly
through one or more intermediaries, controls or is controlled by or is under
common control with such first Person, as such terms are used in and construed
under Rule 144 under the Securities Act. 
With respect to a Purchaser, any investment fund or managed account that
is managed on a discretionary basis by the same investment manager as such
Purchaser will be deemed to be an Affiliate of such Purchaser.

 

“Closing Dates”
means, collectively, the dates of the First Closing and Second Closing.

 

“Closing Price”
means on any particular date (a) the daily volume weighted average price
per share of Common Stock on such date (or the nearest preceding date) on

 

1

 

the Trading Market
as reported by Bloomberg Financial L.P. (based on a Trading Day from 9:30 a.m.
Eastern Time to 4:02 p.m. Eastern Time) using the VAP function, or (b) if
the Common Stock is not then listed or quoted on the Trading Market and if
prices for the Common Stock are then reported in the “pink sheets” published by
Pink Sheets LLC (or a similar organization or agency succeeding to its
functions of reporting prices), the most recent bid price per share of the
Common Stock so reported, or (c) if the shares of Common Stock are not
then publicly traded the fair market value of a share of Common Stock as
determined by a nationally-recognized independent appraiser selected in good
faith by the Purchasers of a majority in interest of the principal amount of
Debentures then outstanding and reasonably acceptable to the Company.

 

“Closings” means
collectively, the closings of the purchase and sale of the Securities pursuant
to Section 2.1, and any reference to “Closing” or “Closings” shall be
construed to include the First Closing and the Second Closing unless only one
such closing is expressly referred to.

 

“Commission” means
the Securities and Exchange Commission.

 

“Common Stock” means
the common stock of the Company, par value $0.001 per share, and any securities
into which such common stock shall hereinafter have been reclassified into.

 

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

 

“Company Counsel”
means Andrews Kurth LLP.

 

“Conversion Price”
shall have the meaning ascribed to such term in the Debentures.

 

“Debentures”
means, the Convertible Debentures due, subject to the terms therein, 3 years
from their date of issuance, issued by the Company to the Purchasers hereunder,
in the form of Exhibit A.

 

“Disclosure Letter”
shall have the meaning ascribed to such term in Section 3.1 hereof.

 

“Effective Date”
means the date that the initial Registration Statement filed by the Company
pursuant to the Registration Rights Agreement is first declared effective by
the Commission.

 

“Exchange Act”
means the Securities Exchange Act of 1934, as amended.

 

“Exempt Issuance”
means the issuance of (a) shares of Common Stock or options to employees,
officers or directors of the Company pursuant to any stock or option plan

 

 

duly adopted by
the Board of Directors of the Company or a designated committee thereof, (b) securities
upon the exercise of or conversion of any securities issued hereunder,
convertible securities, options or warrants issued and outstanding on the date
of this Agreement, provided that such securities have not been amended since
the date of this Agreement to increase the number of such securities (except
for adjustments for stock splits, stock dividends or other similar
transactions), (c) securities issued pursuant to acquisitions or strategic
transactions, provided any such issuance shall only be to a Person which is,
itself or through its subsidiaries, an operating company in a business
synergistic with the business of the Company and in which the Company receives
benefits in addition to the investment of funds, but shall not include a
transaction in which the Company is issuing securities primarily for the
purpose of raising capital or to an entity whose primary business is investing
in securities, and (d) securities having an initial issue price of at
least $20 million and which are issued for cash in a firm commitment
underwritten registered public offering and (e) securities issued in a
stock dividend or similar transaction, relating to the spin-off and related
distribution of the securities of the Company’s wholly-owned subsidiary, Power3
Medical, Inc. (“Power3 Subsidiary”).

 

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

 

“First Closing”
shall have the meaning ascribed to such term in Section 2.1 hereof.

 

“First Closing Date”
means the date of the First Closing.

 

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

 

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

 

“Market Price”
means the average of the 5 consecutive Closing Prices immediately prior to the
First Closing Date, subject to adjustment for reverse and forward stock splits,
stock dividends, stock combinations and other similar transactions of the
Common Stock that occur after the date hereof and prior to the time as of which
the Market Price is determined.

 

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

 

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

 

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

 

 

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

 

“Registration Rights
Agreement” means the Registration Rights Agreement, dated the date hereof,
among the Company and the Purchasers, in the form of Exhibit B
attached hereto.

 

“Registration
Statement” means a registration statement meeting the requirements set
forth in the Registration Rights Agreement and covering the resale of the
Underlying Shares and the Additional Investment Right Shares [Note:  These
are included in Underlying Shares.] by each Purchaser as provided
for in the Registration Rights Agreement.

 

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

 

“Required Minimum”
means, as of any date, the maximum aggregate number of shares of Common Stock
then issued or potentially issuable in the future pursuant to the Transaction
Documents, including any Underlying Shares issuable upon exercise or conversion
in full of all Warrants, Debentures and Additional Investment Right Securities,
ignoring any conversion or exercise limits set forth therein, and assuming that
the Warrant exercise price, Conversion Price and the conversion price of the
Additional Investment Rights Securities is at all times on and after the date
of determination 75% of the then Warrant exercise price, Conversion Price or
such conversion price, as the case may be, on the Trading Day immediately prior
to the date of determination.

 

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

 

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

 

“Second Closing”
shall have the meaning ascribed to such term in Section 2.1 hereof.

 

“Second Closing Date”
means the date of the Second Closing.

 

“Securities” means
the Debentures, the Warrants, the Warrant Shares, the Underlying Shares, the
Additional Investment Right Securities and the Additional Investment Right
Shares.

 

“Securities Act”
means the Securities Act of 1933, as amended.

 

“Subscription Amount”
means, as to each Purchaser, the amounts set forth below such Purchaser’s
signature block on the signature pages hereto and next to the headings

 

 

“First
Closing Subscription Amount” and “Second Closing Subscription Amount”, in
United States Dollars and in immediately available funds.

 

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

 

“Subsidiary” means
any subsidiary of the Company as set forth on Schedule 3.1(a).

 

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

 

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

 

“Transaction Documents”
means this Agreement, the Debentures, the Warrants, the Registration Rights
Agreement, the Additional Investment Rights and any other documents or
agreements executed in connection with the transactions contemplated hereunder.

 

“Underlying Shares”
means the shares of Common Stock issuable upon conversion of the Debentures,
the Warrant Shares and the Additional Investment Right Shares.

 

“Warrants” means
collectively the Common Stock purchase warrants, in the form of Exhibit C
delivered to the Purchasers at the First Closing in accordance with Section 2.2(a) hereof,
which Warrants shall be exercisable immediately and have a term of exercise
equal to 5 years.

 

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

 

ARTICLE II.

PURCHASE AND SALE

 

2.1                                 Closing.    The Company agrees to sell, and each
Purchaser agrees, severally and not jointly, to purchase the respective
principal amounts of the Debentures set forth below its name on the signature pages hereto.  The Closings shall take place in two stages
as set forth below (respectively, the “First Closing” and the “Second
Closing”).  Upon satisfaction of the
conditions set forth in Section 2.2, each Closing shall occur at the
offices of FW, or such other location as the parties shall mutually agree.

 

(a)                                  First
Closing.  The First Closing shall be
for $1,000,000 aggregate principal amount of Debentures, and shall occur within
5 Trading Days of the date hereof.

 

 

(b)                                 Second
Closing.  The Second Closing shall be
for $2,000,000 aggregate principal amount of Debentures, and shall occur on or
before the 5th Trading Day following the Effective Date.

 

2.2                                 Deliveries.

 

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

 

(i)                                     on
the First Closing Date, this Agreement duly executed by the Company;

 

(ii)                                  a Debenture with a principal amount equal to such Purchaser’s
Subscription Amount as to the applicable Closing, registered in the name of
such Purchaser;

 

(iii)                               on
the First Closing Date, a Warrant registered in the name of such Purchaser to
purchase up to a number of shares of Common Stock equal to 100% of such
Purchaser’s Subscription Amounts for the First Closing and the Second Closing
divided by the Market Price, with an exercise price equal to
$         (1), subject to adjustment
therein;

 

(iv)                              on
the First Closing Date, a copy of an Additional Investment Right, registered in
the name of such Purchaser, pursuant to which such Purchaser shall have the
right to purchase up to such Purchaser’s pro rata share (based on the principal
amount of Debentures purchased and to be purchased hereunder) of $2,500,000 of
debentures in the form of the Debentures except that the conversion price
thereof shall be equal to $        (2),
subject to adjustment for reverse and forward stock splits, stock dividends,
stock combinations and other similar transactions of the Common Stock that
occur after the date of this Agreement (“AIR Conversion Price”);

(v)                                 on
the First Closing Date, the Registration Rights Agreement duly executed by the
Company; and

 

(vi)                              on the First Closing Date, a legal opinion of Company
Counsel, substantially in the form of Exhibit D attached hereto.

 

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

 

(i)                                     on
the First Closing Date, this Agreement duly executed by such Purchaser;

 

(ii)                                  such
Purchaser’s Subscription Amount, as to the applicable Closing, by wire transfer
to the account as specified in writing by the Company; and

 

(1)          120% of the Market Price.

(2)          90% of the Market Price.

 

 

(iii)                               on the First Closing Date, the Registration Rights Agreement
duly executed by such Purchaser.

 

2.3                                 Closing Conditions.

 

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

 

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

 

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

 

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

 

(b)                                 The
respective obligations of the Purchasers hereunder in connection with the
Closings are subject to the following conditions being met:

 

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

 

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

 

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

 

(iv)                              there
shall have been no Material Adverse Effect with respect to the Company since,
for the First Closing, the date hereof, and as to the Second Closing, since the
First Closing Date; and

 

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

 

(c)                                  As
to the Second Closing only, the Company shall have filed with the Commission
the Registration Statement registering the resale of all of the Underlying
Shares

 

 

and,
on or before the 4-month anniversary of the date hereof, such Registration
Statement shall have been declared effective by the Commission as to all such
securities and been maintained effective since such date.

 

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

 

3.1                                 Representations
and Warranties of the Company.   
Except as set forth in the disclosure letter delivered to the Purchasers
concurrently herewith (the “Disclosure Letter”), which may or may not be
expressly referred to in the following representations and warranties, the Company
hereby makes the representations and warranties set forth below to each
Purchaser.  All references to Schedules
herein shall refer to the corresponding section of the Disclosure Letter.

 

(a)                                  Subsidiaries.  All of the direct and indirect subsidiaries
of the Company are set forth on Schedule 3.1(a).  The Company owns, directly or indirectly, all
of the capital stock or other equity interests of each Subsidiary free and
clear of any Liens, and all the issued and outstanding shares of capital stock
of each Subsidiary are validly issued and are fully paid, non-assessable and
free of preemptive and similar rights to subscribe for or purchase
securities.  If the Company has no
subsidiaries, then references in the Transaction Documents to the Subsidiaries
will be disregarded.

 

(b)                                 Organization
and Qualification.  Each of the
Company and the Subsidiaries is an entity duly incorporated or otherwise
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization (as applicable), with the
requisite power and authority to own and use its properties and assets and to
carry on its business as currently conducted. 
Neither the Company nor any Subsidiary is in violation or default of any
of the provisions of its respective certificate or articles of incorporation,
bylaws or other organizational or charter documents.  Each of the Company and the Subsidiaries is
duly qualified to conduct business and is in good standing as a foreign
corporation or other entity in each jurisdiction in which the nature of the
business conducted or property owned by it makes such qualification necessary,
except where the failure to be so qualified or in good standing, as the case
may be, could not have or reasonably be expected to result in (i) a
material adverse effect on the legality, validity or enforceability of any
Transaction Document, (ii) a material adverse effect on the results of
operations, assets, business, prospects or financial condition of the Company
and the Subsidiaries, taken as a whole, or (iii) a material adverse effect
on the Company’s ability to perform in any material respect on a timely basis
its obligations under any Transaction Document (any of (i), (ii) or (iii),
a “Material Adverse Effect”) and no Proceeding has been instituted in
any such jurisdiction revoking, limiting or curtailing or seeking to revoke,
limit or curtail such power and authority or qualification.

 

(c)                                  Authorization;
Enforcement.  The Company has the
requisite corporate power and authority to enter into and to consummate the
transactions contemplated by each of the Transaction Documents and otherwise to
carry out its obligations thereunder. 
The execution and delivery of each of the Transaction Documents by the
Company and the consummation by it of the transactions contemplated thereby
have been duly authorized by all necessary corporate action on the part of the
Company and no further action is required by the Company in

 

 

connection
therewith other than in connection with the Required Approvals.  Each Transaction Document has been (or upon
delivery will have been) duly executed by the Company and, when delivered in
accordance with the terms hereof, will constitute the valid and binding
obligation of the Company enforceable against the Company in accordance with
its terms except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or
other equitable remedies, and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law.

 

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

 

(e)                                  Filings,
Consents and Approvals.  The Company
is not required to obtain any consent, waiver, authorization or order of, give
any notice to, or make any filing or registration with, any court or other
federal, state, local or other governmental authority or other Person in
connection with the execution, delivery and performance by the Company of the
Transaction Documents, other than (i) filings required pursuant to Section 4.6,
(ii) the filing with the Commission of the Registration Statement, (iii) the
notice and/or application(s) to each applicable Trading Market for the issuance
and sale of the Debentures and Warrants, the Additional Investment Rights, the
Additional Investment Right Securities and the listing of the Underlying Shares
for trading thereon in the time and manner required thereby and (iv) the
filing of Form D with the Commission and such filings as are required to
be made under applicable state securities laws (collectively, the “Required
Approvals”), except for any consent, approval or authorization the failure
of which to obtain and for any filing or registration the failure of which to
make would not have or reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.

 

(f)                                    Issuance
of the Securities.  The Securities
are duly authorized and, when issued and paid for in accordance with the
applicable Transaction Documents, will be duly and validly issued, fully paid
and nonassessable, free and clear of all Liens imposed by the Company other
than restrictions on transfer provided for in the Transaction Documents or
applicable law.  The Underlying Shares,
when issued in accordance with the terms of the Transaction

 

 

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

 

(g)                                 Capitalization.  The capitalization of the Company is as
described in Schedule 3.1(g). 
The Company has not issued any capital stock since June 30, 2004
other than pursuant to the exercise of employee stock options under the Company’s
stock option plans, the issuance of shares of Common Stock to employees
pursuant to the Company’s employee stock purchase plan and pursuant to the
conversion or exercise of outstanding Common Stock Equivalents.  No Person has any right of first refusal,
preemptive right, right of participation, or any similar right to participate
in the transactions contemplated by the Transaction Documents.  Except as a result of the purchase and sale
of the Securities, there are no outstanding options, warrants, scrip rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities, rights or obligations convertible into or exchangeable for, or
giving any Person any right to subscribe for or acquire, any shares of Common
Stock, or contracts, commitments, understandings or arrangements by which the
Company or any Subsidiary is or may become bound to issue additional shares of
Common Stock, or securities or rights convertible or exchangeable into shares
of Common Stock.  The issuance and sale
of the Securities will not obligate the Company to issue shares of Common Stock
or other securities to any Person (other than the Purchasers) and will not
result in a right of any holder of Company securities to adjust the exercise,
conversion, exchange or reset price under such securities.  All of the outstanding shares of capital
stock of the Company are validly issued, fully paid and nonassessable, have been
issued in compliance with all federal and state securities laws, and none of
such outstanding shares was issued in violation of any preemptive rights or
similar rights to subscribe for or purchase securities.  No further approval or authorization of any
stockholder or the Board of Directors of the Company is required for the
issuance and sale of the Securities. 
Except as disclosed in the SEC Reports, there are no stockholders
agreements, voting agreements or other similar agreements with respect to the
Company’s capital stock to which the Company is a party or, to the knowledge of
the Company, between or among any of the Company’s stockholders.

 

(h)                                 SEC
Reports; Financial Statements.  The
Company has filed all reports required to be filed by it under the Securities
Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the two years preceding the date hereof (or such shorter period as the
Company was required by law to file such material) (the foregoing materials,
including the exhibits thereto, being collectively referred to herein as the “SEC
Reports”) on a timely basis or has received a valid extension of such time
of filing and has filed any such SEC Reports prior to the expiration of any
such extension.  As of their respective
dates, the SEC Reports complied in all material respects with the requirements
of the Securities Act and the Exchange Act and the rules and regulations
of the Commission promulgated thereunder, and none of the SEC Reports,

 

 

when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading except for such
statements, if any, as have been modified or superseded by subsequent filings
with the Commission prior to the date hereof. 
The financial statements of the Company included in the SEC Reports
comply in all material respects with applicable accounting requirements and the
rules and regulations of the Commission with respect thereto as in effect
at the time of filing.  Such financial
statements have been prepared in accordance with United States generally
accepted accounting principles applied on a consistent basis during the periods
involved (“GAAP”), except as may be otherwise specified in such
financial statements or the notes thereto and except that unaudited financial
statements may not contain all footnotes required by GAAP, and fairly present
in all material respects the financial position of the Company and its
consolidated subsidiaries as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, immaterial, year-end audit adjustments.

 

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

 

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

 

 

(k)                                  Labor
Relations.  No material labor dispute
exists or, to the knowledge of the Company, is imminent with respect to any of
the employees of the Company which could reasonably be expected to result in a
Material Adverse Effect.

 

(l)                                     Compliance.  The Company (i) is not in default under
or in violation of (and no event has occurred that has not been waived that,
with notice or lapse of time or both, would result in a default by the Company
or any Subsidiary under), nor has the Company or any Subsidiary received notice
of a claim that it is in default under or that it is in violation of, any
indenture, loan or credit agreement or any other agreement or instrument to
which it is a party or by which it or any of its properties is bound (whether
or not such default or violation has been waived), (ii) is not in
violation of any order of any court, arbitrator or governmental body, or (iii) is
not nor has been in violation of any statute, rule or regulation of any
governmental authority, including without limitation all foreign, federal,
state and local laws applicable to its business except in each case as could
not have a Material Adverse Effect.

 

(m)                               Regulatory
Permits.  The Company possesses all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct its
business as described in the SEC Reports, except where the failure to possess
such permits could not have or reasonably be expected to result in a Material
Adverse Effect (“Material Permits”), and the Company has not received
any notice of proceedings relating to the revocation or modification of any
Material Permit.

 

(n)                                 Title
to Assets.  The Company has good and
marketable title in fee simple to all real property owned by it that is
material to the business of the Company and good and valid title in all
personal property owned by it that is material to the business of the Company,
in each case free and clear of all Liens, except for Liens as do not materially
affect the value of such property and do not materially interfere with the use
made and proposed to be made of such property by the Company and Liens for the
payment of federal, state or other taxes, the payment of which is neither
delinquent nor subject to penalties.  Any
real property and facilities held under lease by the Company are held by it
under valid, subsisting and enforceable leases of which the Company is in
compliance, except as could not, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect.

 

(o)                                 Patents
and Trademarks.  The Company has, or
has rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, licenses and other
similar rights necessary or material for use in connection with its business as
described in the SEC Reports and which the failure to so have could have a
Material Adverse Effect (collectively, the “Intellectual Property Rights”).  The Company has not received a written notice
that the Intellectual Property Rights used by the Company violates or infringes
upon the rights of any Person.  To the
knowledge of the Company, all such Intellectual Property Rights are enforceable
and there is no existing infringement by another Person of any of the
Intellectual Property Rights of others.

 

(p)                                 Insurance.  The Company is insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which the Company and
the Subsidiaries are engaged.  To the
best of Company’s knowledge, such insurance contracts and policies are accurate
and complete.  The

 

 

Company has no reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary to
continue its business without a significant increase in cost.

 

(q)                                 Transactions
With Affiliates and Employees.  Except as set forth in the SEC Reports, none of
the officers or directors of the Company and, to the knowledge of the Company,
none of the employees of the Company is presently a party to any transaction
with the Company or any Subsidiary (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the Company, any
entity in which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee or partner, in each case in excess
of $60,000 other than (i) for payment of salary, consulting fees or
director fees for services rendered, (ii) reimbursement for expenses
incurred on behalf of the Company and (iii) for other employee benefits,
including stock option agreements under any stock option plan of the Company.

 

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

 

(s)                                  Certain
Fees.  No brokerage or finder’s fees
or commissions are or will be payable by the Company to any broker, financial
advisor or consultant, finder, placement agent, investment banker, bank or
other Person with respect to the transactions contemplated by this
Agreement.  The Purchasers shall have no
obligation with respect to any fees or with respect to any claims (other than
pursuant to an agreement entered by such Purchaser for which such fees or
claims shall be the sole responsibility of the Purchaser) made by or on behalf
of other Persons

 

 

for
fees of a type contemplated in this Section that may be due in connection
with the transactions contemplated by this Agreement.

 

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

 

(u)                                 Investment
Company.  The Company is not, and is
not an Affiliate of, and immediately after receipt of payment for the
Securities, will not be or 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.

 

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

 

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

 

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

 

(y)                                 Disclosure.  The Company confirms that except for the Disclosure
Letter provided to the Purchasers, neither it nor any other Person acting on
its behalf has provided any of the Purchasers or their agents or counsel with
any information that constitutes or might constitute material, nonpublic
information.  The Company understands and
confirms that the Purchasers will rely on the foregoing representations and
covenants in effecting transactions in securities of the Company.  All written materials provided to the
Purchasers regarding the Company, its business and the transactions
contemplated hereby, including the Disclosure Letter, furnished by or on behalf
of the Company with respect to the representations and warranties

 

 

made
herein are true and correct with respect to such representations and warranties
and do not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading.  The Company acknowledges and agrees that no
Purchaser makes or has made any representations or warranties with respect to
the transactions contemplated hereby other than those specifically set forth in
Section 3.2 hereof.

 

(z)                                   No
Integrated Offering.  Neither the
Company, nor, to the Company’s knowledge, any of its affiliates nor other
Person acting on its behalf has, directly or indirectly, made any offers or
sales of any security or solicited any offers to buy any security, under
circumstances that would cause this offering of the Securities to be integrated
with prior offerings by the Company for purposes of the Securities Act or any
applicable shareholder approval provisions, including, without limitation,
under the rules and regulations of any exchange or automated quotation
system on which any of the securities of the Company are listed or designated.

 

(aa)                            Solvency. 
Based on the financial condition of the Company as of each Closing Date
after giving effect to the receipt by the Company of the proceeds from the sale
of the Securities hereunder, (i) the Company’s fair saleable value of its
assets exceeds the amount that will be required to be paid on or in respect of
the Company’s existing debts and other liabilities (including known contingent
liabilities) as they mature; (ii) the Company’s assets do not constitute
unreasonably small capital to carry on its business for the current fiscal year
as now conducted and as proposed to be conducted including its capital needs
taking into account the particular capital requirements of the business conducted
by the Company, and projected capital requirements and capital availability
thereof; and (iii) the current cash flow of the Company, together with the
proceeds the Company would receive, were it to liquidate all of its assets,
after taking into account all anticipated uses of the cash, would be sufficient
to pay all amounts on or in respect of its debt when such amounts are required
to be paid.  The Company does not intend
to incur debts beyond its ability to pay such debts as they mature (taking into
account the timing and amounts of cash to be payable on or in respect of its
debt).

 

(bb)                          [Intentionally Deleted.]

 

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

 

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

 

 

(ee)                            Foreign Corrupt Practices.  Neither the Company, nor to the knowledge of
the Company, any agent or other person acting on behalf of the Company, has (i) directly
or indirectly, used any corrupt funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (iii) failed to disclose fully
any contribution made by the Company (or made by any person acting on its
behalf of which the Company is aware) which is in violation of law, or (iv) violated
in any material respect any provision of the Foreign Corrupt Practices Act of
1977, as amended.

 

(ff)                                Accountants. 
The Company’s accountants are set forth on Schedule 3.1(ff)
of the Disclosure Schedule.  To the
Company’s knowledge, such accountants, who the Company expects will express
their opinion with respect to the financial statements to be included in the Company’s
Annual Report on Form 10-KSB for the year ending December 31, 2004
are a registered public accounting firm as required by the Securities Act.

 

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

 

(hh)                          No
Disagreements with Accountants and Lawyers. 
There are no disagreements of any kind presently existing, or reasonably
anticipated by the Company to arise, between the accountants and lawyers
formerly or presently employed by the Company and the Company is current with
respect to any fees owed to its accountants and lawyers.

 

(ii)                                  Acknowledgment
Regarding Purchasers’ Purchase of Securities.  The Company acknowledges and agrees that each
of the Purchasers is acting solely in the capacity of an arm’s length purchaser
with respect to the Transaction Documents and the transactions contemplated
hereby.  The Company further acknowledges
that no Purchaser is acting as a financial advisor or fiduciary of the Company
(or in any similar capacity) with respect to this Agreement and the
transactions contemplated hereby and any advice given by any Purchaser or any
of their respective representatives or agents in connection with this Agreement
and the transactions contemplated hereby is merely incidental to the Purchasers’
purchase of the Securities.  The Company
further represents to each Purchaser that the Company’s decision to enter into
this Agreement has been based solely on the independent evaluation of the
transactions contemplated hereby by the Company and its representatives.

 

3.2                                 Representations
and Warranties of the Purchasers.   
Each Purchaser hereby, for itself and for no other Purchaser, represents
and warrants as of the date hereof and as of each Closing Date to the Company
as follows:

 

(a)                                  Organization;
Authority.  Such Purchaser is an
entity duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization with full right, corporate or partnership
power and authority to enter into and to consummate the transactions
contemplated by the Transaction Documents and otherwise to carry out its

 

 

obligations
thereunder.  The execution, delivery and
performance by such Purchaser of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate or similar
action on the part of such Purchaser. 
Each Transaction Document to which it is a party has been duly executed
by such Purchaser, and when delivered by such Purchaser in accordance with the
terms hereof, will constitute the valid and legally binding obligation of such
Purchaser, enforceable against it in accordance with its terms, except (i) as
limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or
other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law.

 

(b)                                 Purchaser
Representation.  Such Purchaser
understands that the Securities are “restricted securities” and have not been
registered under the Securities Act or any applicable state securities law and
is acquiring the Securities as principal for its own account and not with a
view to or for distributing or reselling such Securities or any part thereof,
has no present intention of distributing any of such Securities and has no
arrangement or understanding with any other persons regarding the distribution
of such Securities (this representation and warranty not limiting such
Purchaser’s right to sell the Securities pursuant to the Registration Statement
or otherwise in compliance with applicable federal and state securities
laws).  Such Purchaser is acquiring the
Securities hereunder in the ordinary course of its business.  Such Purchaser does not have any agreement or
understanding, directly or indirectly, with any Person to distribute any of the
Securities.

 

(c)                                  Purchaser
Status.  At the time such Purchaser
was offered the Securities, it was, and at the date hereof it is, and on each
date on which it exercises any Warrants or converts any Debentures or converts
the Additional Investment Rights and Additional Investment Right Securities it
will be either: (i) an “accredited investor” as defined in Rule 501(a)(1),
(a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a
“qualified institutional buyer” as defined in Rule 144A(a) under the
Securities Act.  Such Purchaser has not
been formed for the purpose of acquiring the Securities and is not required to
be registered as a broker-dealer under Section 15 of the Exchange Act.

 

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

 

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

 

(f)                                    Short
Sales.  Such Purchaser has not
directly or indirectly, nor has any Person acting on behalf of or pursuant to
an understanding with the Purchaser, engaged in any

 

 

transactions in the securities of the Company
(including, without limitation, short sales or other similar transactions with
the same economic effect as a short sale) since the earlier to occur of (i) the
time that such Purchaser was contacted regarding an investment in the Company
and (ii) the thirtieth (30th) day prior to the date of this Agreement.

 

(g)                                 Access
to Information.  Such Purchaser
acknowledges that it has received the SEC Reports and the Disclosure Letter and
has had full and adequate opportunity to request additional information from
and ask questions of the Company.  Each
Purchaser acknowledges and agrees that the Company does not make and has not
made, and Purchaser is not relying on, any representations or warranties with
respect to the transactions contemplated hereby other than those specifically
set forth in Section 3.1 hereof.

 

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

 

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

 

4.1                                 Transfer
Restrictions.

 

(a)                                  The
Securities may only be disposed of in compliance with state and federal
securities laws.  In connection with any
transfer of Securities other than pursuant to an effective registration
statement or Rule 144, to the Company or to an affiliate of a Purchaser or
in connection with a pledge as contemplated in Section 4.1(b), the Company
may require the transferor thereof to provide to the Company an opinion of
counsel selected by the transferor and reasonably acceptable to the Company,
the form and substance of which opinion shall be reasonably satisfactory to the
Company, to the effect that such transfer does not require registration of such
transferred Securities under the Securities Act.  As a condition of transfer, any such
transferee shall agree in writing to be bound by the terms of this Agreement
and shall have the rights of a Purchaser under this Agreement and the
Registration Rights Agreement.

 

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

 

[NEITHER]
THESE SECURITIES [NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
[EXERCISABLE] [CONVERTIBLE]] HAVE BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION
NOT

 

 

SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY.  THESE
SECURITIES AND THE SECURITIES ISSUABLE UPON [EXERCISE/CONVERSION]
OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

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

 

(c)                                  Certificates
evidencing the Underlying Shares shall not contain any legend (including the
legend set forth in Section 4.1(b) hereof): [(i) while a registration statement (including
the Registration Statement) covering the resale of such security is effective
under the Securities Act,] or (ii) following any sale of such
Underlying Shares pursuant to Rule 144, or (iii) if such Underlying
Shares are eligible for sale under Rule 144(k), or (iv) if such
legend is not required under applicable requirements of the Securities Act
(including judicial interpretations and pronouncements issued by the staff of
the Commission); provided, however, in connection with the
issuance of the Underlying Shares, each Purchaser, severally and not jointly
with the other Purchasers, hereby agrees to adhere to and abide by all
prospectus delivery requirements under the Securities Act and rules and
regulations of the Commission.  If all or
any portion of a Debenture, Warrant or Additional Investment Rights Security is
converted or exercised (as applicable) at a time when there is an effective
registration statement to cover the resale of the Underlying Shares, or if such
Underlying Shares may be sold under Rule 144(k) or if such legend is not
otherwise required under applicable requirements of the Securities Act
(including judicial interpretations thereof) then such Underlying Shares shall
be issued free of all legends.  The
Company agrees that following the Effective Date or at such time as such legend
is no longer required under this Section 4.1(c), it will, no later than
three Trading Days following

 

 

the delivery by a Purchaser to the Company or the
Company’s transfer agent of a certificate representing Underlying Shares, as
applicable, issued with a restrictive legend (such third Trading Day, the “Legend
Removal Date”), deliver or cause to be delivered to such Purchaser a
certificate representing such shares that is free from all restrictive and
other legends.  The Company may not make
any notation on its records or give instructions to any transfer agent of the
Company that enlarge the restrictions on transfer set forth in this Section.

 

(d)                                 In
addition to such Purchaser’s other available remedies, the Company shall pay to
the Purchaser, in cash, as partial liquidated damages and not as a penalty, for
each $1,000 of the Underlying Shares (based on the Closing Price of the Common
Stock on the date such Securities are submitted to the Company’s transfer
agent) delivered for removal of the restrictive legend and subject to this Section 4.1(c),
$10 per Trading Day (including to $20 per Trading Day 5 Trading Days after such
damages have begun to accrue) for each Trading Day after the Legend Removal
Date until such certificate is delivered without a legend.  Nothing herein shall limit such Purchaser’s
right to pursue actual damages for the Company’s failure to deliver
certificates representing any Securities as required by the Transaction
Documents, and such Purchaser shall have the right to pursue all remedies
available to it at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief.

 

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

 

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

 

4.3                                 Furnishing
of Information.    As long as any
Purchaser owns Securities, the Company covenants to timely file (or obtain
extensions in respect thereof and file within the applicable grace period) all
reports required to be filed by the Company after the date hereof pursuant to
the Exchange Act.  As long as any
Purchaser owns Securities, if the Company is not required to file reports
pursuant to the Exchange Act, it will prepare and furnish to the Purchasers and
make publicly available in accordance with Rule 144(c) such
information as is required for the Purchasers to sell the Securities under Rule 144.  The Company further covenants that it will
take such further action as any holder of Securities may reasonably request,
all to the extent required from time to time to enable such Person to sell such
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144.

 

 

4.4                                 Integration.    The Company shall not sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2 of the Securities Act) that would be integrated with
the offer or sale of the Securities in a manner that would require the
registration under the Securities Act of the sale of the Securities to the
Purchasers or that would be integrated with the offer or sale of the Securities
for purposes of the rules and regulations of any Trading Market.

 

4.5                                 Conversion
and Exercise Procedures.    The form
of Notice of Exercise included in the Warrants, the form of Notice of
Conversion included in the Debentures and the form of Notice of Conversion set
forth in the Additional Investment Rights and Additional Investment Right
Securities set forth the totality of the procedures required of the Purchasers
in order to exercise the Warrants, convert the Debentures or convert the
Additional Investment Rights and Additional Investment Right Securities.  No additional legal opinion or other
information or instructions shall be required of the Purchasers to exercise the
Warrants or convert the Debentures or exercise the Additional Investment Rights
and Additional Investment Right Securities. 
The Company shall honor exercises of the Warrants, conversions of the Debentures
and exercises of the Additional Investment Rights and conversions of the
Additional Investment Right Securities and shall deliver the Additional
Investment Securities and the Underlying Shares in accordance with the terms,
conditions and time periods set forth in the Transaction Documents.

 

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

 

4.7                                 Shareholder
Rights Plan.    No claim will be made
or enforced by the Company or, to the knowledge of the Company, any other
Person that any Purchaser is an “Acquiring Person” under any shareholder rights
plan or similar plan or arrangement in effect or hereafter adopted by the
Company, or that any Purchaser could be deemed to trigger the provisions of any
such plan or arrangement, by virtue of receiving Securities under the
Transaction Documents or under any

 

 

other
agreement between the Company and the Purchasers.  The Company shall conduct its business in a manner
so that it will not become subject to the Investment Company Act.

 

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

 

4.9                                 Use
of Proceeds.    Except as set forth
on Schedule 4.9 attached hereto, the Company shall use the net
proceeds from the sale of the Securities hereunder for working capital purposes
and not for the satisfaction of any portion of the Company’s debt (other than
payment of trade payables in the ordinary course of the Company’s business and
prior practices), to redeem any Company equity or equity equivalent securities
or to settle any outstanding litigation.

 

4.10                           [Intentionally Deleted.]

 

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

 

 

warranties,
covenants or agreements made by the Purchasers in this Agreement or in the
other Transaction Documents.

 

4.12                           Reservation and Listing
of Securities.

 

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

 

(b)                                 If,
on any date, the number of authorized but unissued (and otherwise unreserved)
shares of Common Stock is less than the Required Minimum on such date, then the
Board of Directors of the Company shall use commercially reasonable efforts to
amend the Company’s certificate or articles of incorporation to increase the
number of authorized but unissued shares of Common Stock to at least the
Required Minimum at such time, as soon as possible and in any event not later
than the 75th date after such date.

 

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

 

4.13                           Participation
in Future Financing.    From the date
hereof until the one year anniversary of the Effective Date, upon any financing
by the Company or any of its Subsidiaries of Common Stock or Common Stock
Equivalents (a “Subsequent Financing”), each Purchaser shall have the
right to participate in up to 100% of the Subsequent Financing (the “Participation
Maximum”).  At least 5 Trading Days
prior to the closing of the Subsequent Financing, the Company shall deliver to
each Purchaser a written notice of its intention to effect a Subsequent
Financing (“Pre-Notice”), which Pre-Notice shall ask such Purchaser if
it wants to review the details of such financing (such additional notice, a “Subsequent
Financing Notice”).  Upon the request
of a Purchaser, and only upon a request by such Purchaser, for a Subsequent
Financing Notice, the Company shall promptly, but no later than 1 Trading
Day after such request, deliver a Subsequent Financing Notice to such
Purchaser.  The Subsequent Financing
Notice shall describe in reasonable detail the proposed terms of such
Subsequent Financing, the amount of proceeds intended to be raised thereunder,
the Person with whom such Subsequent Financing is proposed to be effected, and
attached to which shall be a term sheet or similar document relating
thereto.  If by 5:30 p.m.
(New York City time) on the 5th Trading Day after all of the
Purchasers have received the Pre-Notice, notifications by the Purchasers of
their willingness to participate in the Subsequent Financing (or to cause their
designees to participate) is, in the aggregate, less than the total amount of
the Participation Amount, then the Company may effect the remaining portion of
such Subsequent Financing on the terms and to the Persons set forth in the
Subsequent Financing Notice.  If the
Company receives no notice from a Purchaser as of such 5th Trading
Day, such Purchaser shall be deemed to have notified the Company that it does
not elect to participate.  The Company
must provide the Purchasers with a second Subsequent Financing

 

 

Notice, and the
Purchasers will again have the right of participation set forth above in this Section 4.13,
if the Subsequent Financing subject to the initial Subsequent Financing Notice
is not consummated for any reason on the terms set forth in such Subsequent
Financing Notice within 60 Trading Days after the date of the initial
Subsequent Financing Notice.  In the
event the Company receives responses to Subsequent Financing Notices from
Purchasers seeking to purchase more than the aggregate amount of the
Participation Amount, each such Purchaser shall have the right to purchase
their Pro Rata Portion (as defined below) of the Participation Maximum.  “Pro Rata Portion” is the ratio of
(x) the Subscription Amount of Securities purchased by a participating
Purchaser and (y) the sum of the aggregate Subscription Amount of all
participating Purchasers. 
Notwithstanding the foregoing, this Section 4.13 shall not apply in
respect of an Exempt Issuance.

 

4.14                           Subsequent
Equity Sales.    From the date hereof
until 90 days after the Effective Date, neither the Company nor any Subsidiary
shall issue shares of Common Stock or Common Stock Equivalents; provided,
however, the 90 day period set forth in this Section 4.14 shall be
extended for the number of Trading Days during such period in which
(y) trading in the Common Stock is suspended by any Trading Market, or
(z) following the Effective Date, the Registration Statement is not
effective or the prospectus included in the Registration Statement may not be
used by the Purchasers for the resale of the Underlying Shares.  In addition to the limitations set forth
herein, from the date hereof until such time as no Purchaser holds any of the
Securities, the Company shall be prohibited from effecting or entering into an
agreement to effect any Subsequent Financing involving a “Variable Rate
Transaction” or an “MEN Transaction” (each as defined below).  The term “Variable Rate Transaction” shall
mean a transaction in which the Company issues or sells (i) any debt or
equity securities that are convertible into, exchangeable or exercisable for,
or include the right to receive additional shares of Common Stock either (A) at
a conversion, exercise or exchange rate or other price that is based upon
and/or varies with the trading prices of or quotations for the shares of Common
Stock at any time after the initial issuance of such debt or equity securities,
or (B) with a conversion, exercise or exchange price that is subject to
being reset at some future date after the initial issuance of such debt or
equity security or upon the occurrence of specified or contingent events
directly or indirectly related to the business of the Company or the market for
the Common Stock.  The term “MEN
Transaction” shall mean a transaction in which the Company issues or sells any
securities in a capital raising transaction or series of related transactions
which grants to an investor the right to receive additional shares based upon
future transactions of the Company on terms more favorable than those granted
to such investor in such offering.  Any
Purchaser shall be entitled to obtain injunctive relief against the Company to
preclude any such issuance, which remedy shall be in addition to any right to
collect damages.  Notwithstanding the
foregoing, this Section 4.14 shall not apply in respect of an Exempt
Issuance or in respect of the issuance of securities issued in a stock dividend
or similar transaction relating to the spin-off and related distribution of the
securities of the Company’s wholly-owned subsidiary, Power3 Medical, Inc.,
except that no Variable Rate Transaction or MEN Transaction shall be an Exempt
Issuance.

 

4.15                           Equal
Treatment of Purchasers.    No
consideration shall be offered or paid to any person to amend or consent to a
waiver or modification of any provision of any of the Transaction Documents
unless the same consideration is also offered to all of the parties to the
Transaction Documents.  Further, the
Company shall not make any payment of principal on the

 

 

Debentures
in amounts which are disproportionate to the respective principal amounts
outstanding on the Debentures at any applicable time.  For clarification purposes, this provision
constitutes a separate right granted to each Purchaser by the Company and
negotiated separately by each Purchaser, and is intended to treat for the
Company the Debenture holders as a class and shall not in any way be construed
as the Purchasers acting in concert or as a group with respect to the purchase,
disposition or voting of Securities or otherwise.

 

4.16                           Short
Sales.    During any periods in which
the Conversion Price is being determined, no Purchaser nor any Person over which
the Purchaser has direct control shall sell, offer to sell, solicit offers to
buy, dispose of, loan, pledge or grant any right with respect to the Common
Stock, nor shall any Purchaser, nor any Person over which the Purchaser has
direct control, have made any purchases or sales of, or granted any option for
the purchase of or entered into any hedging or similar transaction with the
same economic effect as a short sale, of the Common Stock.  Such obligation of each Purchaser hereunder,
as with all obligations under the Transaction Documents, are several and not
joint with the other Purchasers.

 

ARTICLE V.

MISCELLANEOUS

 

5.1                                 Termination.    This Agreement may be terminated by either
the Company or any Purchaser, by written notice to the other parties, if the
Closing has not been consummated on or before October 31, 2004; provided
that no such termination will affect the right of any party to sue for any
breach by the other party (or parties).

 

5.2                                 Fees
and Expenses.    The Company shall
deliver, prior to the Closing, a completed and executed copy of the Closing
Statement, attached hereto as Annex A.  Except as expressly set forth in the
Transaction Documents to the contrary, each party shall pay the fees and
expenses of its advisers, counsel, accountants and other experts, if any, and
all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement.  The Company shall pay all transfer agent
fees, stamp taxes and other taxes and duties levied in connection with the
issuance of any Securities.

 

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

 

5.4                                 Notices.    Any and all notices or other communications
or deliveries required or permitted to be provided hereunder shall be in
writing and shall be deemed given and effective on the earliest of (a) the
date of transmission, if such notice or communication is delivered via
facsimile (and the sender receives a confirmation of successful transmission)
at the facsimile number set forth on the signature pages attached hereto
prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the
next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth on
the signature pages attached hereto on a day that is not a Trading Day or
later than 5:30 p.m. (New York City time) on any Trading Day, (c) the
second Trading Day following the date of mailing, if sent by U.S.

 

 

nationally
recognized overnight courier service, or (d) upon actual receipt by the
party to whom such notice is required to be given.  The address for such notices and
communications shall be as set forth on the signature pages attached hereto.

 

5.5                                 Amendments;
Waivers.    No provision of this
Agreement may be waived or amended except in a written instrument signed, in
the case of an amendment, by the Company and each Purchaser or, in the case of
a waiver, by the party against whom enforcement of any such waiver is
sought.  No waiver of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof,
nor shall any delay or omission of either party to exercise any right hereunder
in any manner impair the exercise of any such right.

 

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

 

5.7                                 Successors
and Assigns.    This Agreement shall
be binding upon and inure to the benefit of the parties and their successors
and permitted assigns.  The Company may
not assign this Agreement or any rights or obligations hereunder without the
prior written consent of each Purchaser. 
Any Purchaser may assign any or all of its rights under this Agreement
to any Person to whom such Purchaser assigns or transfers any Securities,
provided such transferee agrees in writing to be bound, with respect to the
transferred Securities, by the provisions hereof that apply to the
“Purchasers”.

 

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

 

5.9                                 Governing
Law.    All questions concerning the
construction, validity, enforcement and interpretation of the Transaction
Documents shall be governed by and construed and enforced in accordance with
the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. 
Each party agrees that all legal proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders, employees
or agents) shall be commenced exclusively in the state and federal courts
sitting in the City of New York. 
Each party hereby irrevocably submits to the exclusive jurisdiction of
the state and federal courts sitting in the City of New York, borough of
Manhattan for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein
(including with respect to the enforcement of any of the Transaction
Documents), and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is
improper or inconvenient venue for such proceeding.  Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit,
action or proceeding by mailing

 

 

a
copy thereof via registered or certified mail or overnight delivery (with
evidence of delivery) to such party at the address in effect for notices to it
under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to
limit in any way any right to serve process in any manner permitted by
law.  The parties hereby waive, to the
fullest extent permitted by applicable law, all rights to a trial by jury.  If either party shall commence an action or
proceeding to enforce any provisions of the Transaction Documents, then the
prevailing party in such action or proceeding shall be reimbursed by the other
party for its attorneys’ fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or proceeding.

 

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

 

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

 

5.12                           Severability.    If any provision of this Agreement is held
to be invalid or unenforceable in any respect, the validity and enforceability
of the remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.

 

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

 

5.14                           Replacement
of Securities.    If any certificate
or instrument evidencing any Securities is mutilated, lost, stolen or
destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation thereof, or in lieu of and substitution
therefor, a new certificate or instrument, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction and
customary and reasonable indemnity, if requested.  The applicants for a new certificate or
instrument under such circumstances shall also pay any reasonable third-party
costs associated with the issuance of such replacement Securities.

 

 

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

 

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

 

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

 

5.18                           Independent
Nature of Purchasers’ Obligations and Rights.    The obligations of each Purchaser under any
Transaction Document are several and not joint with the obligations of any
other Purchaser, and no Purchaser shall be responsible in any way for the
performance of the obligations of any other Purchaser under any Transaction
Document.  Nothing contained herein or in
any Transaction Document, and no action taken by any Purchaser pursuant
thereto, shall be deemed to constitute the Purchasers as a partnership, an
association, a joint venture or any other

 

 

kind of entity, or
create a presumption that the Purchasers are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated by
the Transaction Document.  Each Purchaser
shall be entitled to independently protect and enforce its rights, including
without limitation the rights arising out of this Agreement or out of the other
Transaction Documents, and it shall not be necessary for any other Purchaser to
be joined as an additional party in any proceeding for such purpose.  Each Purchaser has been represented by its
own separate legal counsel in their review and negotiation of the Transaction
Documents.  For reasons of administrative
convenience only, Purchasers and their respective counsel have chosen to
communicate with the Company through FW. 
FW does not represent all of the Purchasers but only RAM.  The Company has elected to provide all
Purchasers with the same terms and Transaction Documents for the convenience of
the Company and not because it was required or requested to do so by the
Purchasers.

 

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

 

(Signature
Pages Follow)

 

 

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

 

	
  POWER 3
  MEDICAL PRODUCTS, INC.

  	
  Address for
  Notice:

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/: Steven B.
  Rash

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Steven B. Rash

  	
   

  
	
   

  	
  Title:

  	
  Chairman and CEO

  	
   

  
	
   

  	
   

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

  	
   

  
					

 

 

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

 

 

[PURCHASER SIGNATURE PAGES TO PWRM SECURITIES PURCHASE AGREEMENT]

 

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

 

Name of Investing Entity: Otape Investments LLC

 

	
  Signature of Authorized Signatory of
  Investing Entity:

  	
  /s/ Richard M. Cayne

  	
   

  

 

Name of Authorized Signatory: Richard M. Cayne

 

Title of Authorized Signatory: General Counsel

 

Email Address of Authorized Entity:

 

Address for Notice of Investing Entity:

 

1 Manhattanville Rd

Purchase, NY  10577

 

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

 

	
  First
  Closing Subscription Amount:

  	
   

  	
  $

  	
  100,000

  	
   

  
	
  Second Closing Subscription Amount:

  	
   

  	
  $

  	
  200,000

  	
   

  
	
  Warrant Shares:

  	
   

  	
   

  	
   

  	
   

  
	
  Additional Investment Right:

  	
   

  	
   

  	
   

  	
   

  

 

 

[PURCHASER SIGNATURE PAGES TO PWRM SECURITIES PURCHASE AGREEMENT]

 

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

 

Name of Investing Entity: Mohawk Funding

 

	
  Signature of Authorized Signatory of
  Investing Entity:

  	
  /s/ Richard H. Bach

  	
   

  

 

Name of Authorized Signatory: Richard H. Bach

 

Title of Authorized Signatory: Managing Member

 

Email Address of Authorized Entity:

 

Address for Notice of Investing Entity:

 

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

 

	
  First
  Closing Subscription Amount:

  	
   

  	
  10,000

  	
   

  
	
  Second Closing Subscription Amount:

  	
   

  	
  20,000

  	
   

  
	
  Warrant Shares:

  	
   

  	
   

  	
   

  
	
  Additional Investment Right:

  	
   

  	
   

  	
   

  

 

 

[PURCHASER SIGNATURE PAGES TO PWRM SECURITIES PURCHASE AGREEMENT]

 

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

 

Name of Investing Entity: Richard Molinsky

 

	
  Signature of Authorized Signatory of
  Investing Entity:

  	
  /s/ Richard Molinsky

  	
   

  

 

Name of Authorized Signatory:

 

Title of Authorized Signatory:

 

Email Address of Authorized Entity:

 

Address for Notice of Investing Entity:

 

51 Lourdes Hwy E.

Weston, CT  06883

 

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

 

	
  First
  Closing Subscription Amount:

  	
   

  	
  $

  	
  30,000

  	
   

  
	
  Second Closing Subscription Amount:

  	
   

  	
  $

  	
  60,000

  	
   

  
	
  Warrant Shares:

  	
   

  	
   

  	
   

  	
   

  
	
  Additional Investment Right:

  	
   

  	
   

  	
   

  	
   

  

 

 

[PURCHASER SIGNATURE PAGES TO PWRM SECURITIES PURCHASE AGREEMENT]

 

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

 

Name of Investing Entity: Gryphon Master Fund L.P.

 

	
  Signature of Authorized Signatory of
  Investing Entity:

  	
  /s/ E. B. Lyon IV

  	
   

  

 

Name of Authorized Signatory: E. B. Lyon IV

 

Title of Authorized Signatory: Authorized Agent

 

Email Address of Authorized Entity:

 

Address for Notice of Investing Entity:

 

100 Crescent Court, Suite 490

Dallas, TX  75201

 

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

 

Same

 

 

	
  First
  Closing Subscription Amount:

  	
   

  	
  $

  	
  100,000

  	
   

  
	
  Second Closing Subscription Amount:

  	
   

  	
  $

  	
  200,000

  	
   

  
	
  Warrant Shares:

  	
   

  	
   

  	
   

  	
   

  
	
  Additional Investment Right:

  	
   

  	
   

  	
   

  	
   

  

 

 

[PURCHASER SIGNATURE PAGES TO PWRM SECURITIES PURCHASE AGREEMENT]

 

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

 

Name of Investing Entity: GSSF Master Fund, LP

 

	
  Signature of Authorized Signatory of
  Investing Entity:

  	
  /s/ E. B. Lyon IV

  	
   

  

 

Name of Authorized Signatory: E. B. Lyon IV

 

Title of Authorized Signatory: Authorized Agent

 

Email Address of Authorized Entity:

 

Address for Notice of Investing Entity:

 

100 Crescent Court, Suite 490

Dallas, TX  75201

 

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

 

Same

 

 

	
  First
  Closing Subscription Amount:

  	
   

  	
  $

  	
  100,000

  	
   

  
	
  Second Closing Subscription Amount:

  	
   

  	
  $

  	
  200,000

  	
   

  
	
  Warrant Shares:

  	
   

  	
   

  	
   

  	
   

  
	
  Additional Investment Right:

  	
   

  	
   

  	
   

  	
   

  

 

 

[PURCHASER SIGNATURE PAGES TO PWRM SECURITIES PURCHASE AGREEMENT]

 

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

 

Name of Investing Entity: Sage Capital Investments Limited

 

	
  Signature of Authorized Signatory of
  Investing Entity:

  	
  /s/ Anthony Thompson

  	
   

  

 

Name of Authorized Signatory: Anthony Thompson

 

Title of Authorized Signatory: Secretary

 

Email Address of Authorized Entity:

 

Address for Notice of Investing Entity:

 

P. O. Box N-4826 (For regular mail)

Nassau, Bahamas

 

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

 

Marron House, Virginia Street (For delivery, Fed X, etc)

Nassau, Bahamas

 

	
  First Closing Subscription Amount:

  	
   

  	
  $

  	
  25,000

  	
   (Twenty Five Thousand and no/100)

  
	
  Second Closing Subscription Amount:

  	
   

  	
  $

  	
  50,000

  	
   (Fifty Thousand and no/100)

  
	
  Warrant Shares:

  	
   

  	
   

  	
   

  	
   

  
	
  Additional Investment Right:

  	
   

  	
   

  	
   

  	
   

  

 

 

[PURCHASER SIGNATURE PAGES TO PWRM SECURITIES PURCHASE AGREEMENT]

 

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

 

Name of Investing Entity: Crestview Capital Master, LLC

 

	
  Signature of Authorized Signatory of
  Investing Entity:

  	
  /s/ Stewart R. Flink

  	
   

  

 

Name of Authorized Signatory: Stewart R. Flink

 

Title of Authorized Signatory: Manager

 

Email Address of Authorized Entity:

 

Address for Notice of Investing Entity:

 

95 Revere Drive, Suite A

Northbrook, Illinois  60062

 

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

 

	
  First Closing
  Subscription Amount:

  	
   

  	
  $

  	
  150,000

  	
   

  
	
  Second Closing Subscription Amount:

  	
   

  	
  $

  	
  300,000

  	
   

  
	
  Warrant Shares:

  	
   

  	
   

  	
   

  	
   

  
	
  Additional Investment Right:

  	
   

  	
   

  	
   

  	
   

  

 

 

[PURCHASER SIGNATURE PAGES TO PWRM SECURITIES PURCHASE AGREEMENT]

 

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

 

Name of Investing Entity: Omicron Master Trust

 

	
  Signature of Authorized Signatory of
  Investing Entity:

  	
  /s/ Bruce Bernstein

  	
   

  

 

Name of Authorized Signatory: Bruce Bernstein

 

Title of Authorized Signatory: Managing Partner

 

Email Address of Authorized Entity:

 

Address for Notice of Investing Entity:

 

650 Fifth Ave, 24th Fl

New York, NY  10019

Attn:  Brian Daly

Tel# 212 258-2302

Fax 212 258-2315

 

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

 

	
  First
  Closing Subscription Amount:

  	
   

  	
  $

  	
  100,000

  	
   

  
	
  Second Closing Subscription Amount:

  	
   

  	
  $

  	
  200,000

  	
   

  
	
  Warrant Shares:

  	
   

  	
   

  	
   

  	
   

  
	
  Additional Investment Right:

  	
   

  	
   

  	
   

  	
   

  
						

 

 

[PURCHASER SIGNATURE PAGES TO PWRM SECURITIES PURCHASE AGREEMENT]

 

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

 

Name of Investing Entity: Citiplatz Limited

 

	
  Signature of Authorized Signatory of
  Investing Entity:

  	
  /s/ Francis [Illegible]

  	
   

  

 

Name of Authorized Signatory: Francis [Illegible]

 

Title of Authorized Signatory: Secretary of Citiplatz Limited

 

Email Address of Authorized Entity:

 

Address for Notice of Investing Entity:

 

12-14 Finch Road

Douglas

Isle of Man

IM991TT

 

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

 

 

	
  First
  Closing Subscription Amount:

  	
   

  	
  $

  	
  50,000

  	
   USD

  
	
  Second Closing Subscription Amount:

  	
   

  	
  $

  	
  100,000 

  	
   USD

  
	
  Warrant Shares:

  	
   

  	
   

  	
   

  	
   

  
	
  Additional Investment Right:

  	
   

  	
   

  	
   

  	
   

  

 

 

[PURCHASER SIGNATURE PAGES TO PWRM SECURITIES PURCHASE AGREEMENT]

 

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

 

Name of Investing Entity: Platinum Partners Value Arbitrage Fund L.P.

 

	
  Signature of Authorized Signatory of
  Investing Entity:

  	
  /s/ Richard Geyser

  	
   

  

 

Name of Authorized Signatory: Richard Geyser

 

Title of Authorized Signatory: Managing Director

 

Email Address of Authorized Entity:

 

Address for Notice of Investing Entity:

 

Platinum Partners

152 W. 57th St., 54th Fl.

New York, NY  10019-3310

 

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

 

 

	
  First Closing Subscription
  Amount:

  	
   

  	
  $

  	
  83,333

  	
   

  
	
  Second
  Closing Subscription Amount:

  	
   

  	
   

  	
   

  
	
  Warrant
  Shares:

  	
   

  	
   

  	
   

  
	
  Additional
  Investment Right:

  	
   

  	
   

  	
   

  

 

 

[PURCHASER SIGNATURE PAGES TO PWRM SECURITIES PURCHASE AGREEMENT]

 

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

 

Name of Investing Entity: Crescent International Ltd.

 

	
  Signature of Authorized Signatory of
  Investing Entity:

  	
  /s/ Mel Craw /s/ Maxi Brezzi

  	
   

  

 

Name of Authorized Signatory: Mel Craw and Maxi Brezzi

 

Title of Authorized Signatory: Authorized Signatory

 

Email Address of Authorized Entity:

 

Address for Notice of Investing Entity:

 

Crescent International Ltd.

C/o GreenLight (Switzerland) SA

84, av. Louis-Casai

CH 1216 COINTRIN

Geneva, Switzerland

 

Fax Number of Notice of Investing Entity:  +41 22 791 7171

 

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

 

Crescent International Ltd.

C/o GreenLight (Switzerland) SA

84, av. Louis-Casai

CH 1216 COINTRIN

Geneva, Switzerland

 

 

	
  First
  Closing Subscription Amount:

  	
   

  	
  $

  	
  200,000

  	
   

  
	
  Second Closing Subscription Amount:

  	
   

  	
  $

  	
  400,000

  	
   

  
	
  Warrant Shaes:

  	
   

  	
   

  	
   

  	
   

  
	
  Additional Investment Right:

  	
   

  	
   

  	
   

  	
   

  

 

 

[PURCHASER SIGNATURE PAGES TO PWRM SECURITIES PURCHASE AGREEMENT]

 

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

 

	
  Name of Investing Entity:

  	
  DKR SoundShore Oasis Holding Fund Ltd.

  	
   

  
	
   

  	
   

  
	
  Signature of Authorized Signatory of
  Investing Entity:

  	
  /s/ Barbara Burger

  	
   

  
	
   

  
	
  Name of Authorized Signatory:

  	
  Barbara Burger

  	
   

  
	
   

  	
   

  
	
  Title of Authorized Signatory: 

  	
  Alternate Director

  	
   

  
							

 

Email Address of Authorized Entity:

 

 

Address for Notice of Investing Entity:

 

c/o DKR Capital
Partners L.P.

1281 East Main Street

Stambord, CT  06902

 

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

 

(Same)

 

Registered Address:

 

29 Richmond Road

Pembroke HM08

Bermuda

 

	
  First
  Closing Subscription Amount:

  	
   

  	
  $

  	
  50,000

  	
   

  
	
  Second Closing Subscription Amount:

  	
   

  	
  $

  	
  100,000

  	
   

  
	
  Warrant Shares:

  	
   

  	
   

  	
   

  	
   

  
	
  Additional Investment Right:

  	
   

  	
   

  	
   

  	
   

  
						

 

 

[PURCHASER SIGNATURE PAGES TO PWRM SECURITIES
PURCHASE AGREEMENT]

 

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

 

	
  Name of Investing Entity:

  	
  Bach Farms LLC

  	
   

  
	
   

  	
   

  
	
  Signature of Authorized Signatory of
  Investing Entity:

  	
  /s/ Richard H. Bach

  	
   

  
	
   

  
	
  Name of Authorized Signatory:

  	
  Richard H. Bach

  	
   

  
	
   

  	
   

  
	
  Title of Authorized Signatory:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Email Address of Authorized Entity:

  	
   

  	
   

  
							

 

Address for Notice of Investing Entity:

 

 

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

 

(Same)

 

Registered Address:

 

 

	
  First
  Closing Subscription Amount:

  	
   

  	
  $

  	
  1,667

  	
   

  
	
  Second Closing Subscription Amount:

  	
   

  	
  $

  	
  3,333

  	
   

  
	
  Warrant Shares:

  	
   

  	
   

  	
   

  	
   

  
	
  Additional Investment Right:

  	
   

  	
   

  	
   

  	
   

  

 

 

ANNEX A

 

CLOSING STATEMENT

 

Pursuant to the attached Securities Purchase Agreement, dated as of the
date hereto, the purchasers shall purchase up to $3,000,000 of Debentures,
Warrants and Additional Investment Rights from Power 3 Medical Products, Inc.
(the “Company”). All funds will be wired into an escrow account maintained by
HSBC Bank, as escrow agent. All funds will be disbursed in accordance with this

Closing Statement.

 

DISBURSEMENT DATE:         October    ,
2004

 

I. PURCHASE PRICE

 

	
  GROSS
  PROCEEDS TO BE RECEIVED IN ESCROW

  	
   

  	
  $

  	
  1,000,000

  	
   

  

 

 

II. DISBURSEMENTS

 

	
  Westor
  Online, L.L.C.

  	
   

  	
  $

  	
  130,000

  	
   

  
	
  Andrews Kurth, LLP

  	
   

  	
  $

  	
  40,000

  	
   

  
	
  HSBC Bank - escrow fees

  	
   

  	
  $

  	
  2,500

  	
   

  
	
  Power3 Medical Products, Inc.

  	
   

  	
  $

  	
  827,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  TOTAL AMOUNT DISBURSED:

  	
   

  	
  $

  	
  1,000,000

  	
   

  

 

WIRE INSTRUCTIONS:

 

	
  To:

  	
  Westor Online, L.L.C.

  
	
   

  	
  Bank Name: Charter One Bank

  
	
   

  	
  Address: 266 Genesee St.

  
	
   

  	
  Utica, Ny 13502

  
	
  Account Name:

  	
  Westor Online, Inc.

  
	
  Address:

  	
  258 Genesee St., Suite 601

  
	
   

  	
  Utica, NY 13502

  
	
  ABA 

  	
  221370030

  
	
  Account #

  	
  5250030032

  
			

 

 

	
  To:

  	
  Andrews Kurth, LLP

  
	
   

  	
  Chase Bank, National Association, Houston,
  Texas

  
	
   

  	
  Account Number 00100184952

  
	
   

  	
  ABA Code 113000609

  
	
   

  	
  Reference number 0024268/0156088

  
	
   

  	
  Attention Jodie Hubbard, phone number 713-750-3725

  
	
   

  	
   

  
	
  To:

  	
  HSBC Bank

  
	
   

  	
  452 Fifth Avenue

  
	
   

  	
  New York, New York

  
	
   

  	
  ABA#021-001-088

  
	
   

  	
  Power3 Medical Products, Inc.

  
	
   

  	
  Escrow Account

  
	
   

  	
   

  
	
  To:

  	
  Power3 Medical Products, Inc.

  
	
   

  	
  JP Morgan Chase

  
	
   

  	
  ABA # 113-000-609

  
	
   

  	
  Account # 336915653665

  
	
   

  	
  Power3 Medical Products

  

 

1Exhibit 10.8

 

Execution Copy

 

AMENDMENT TO

SECURITIES PURCHASE AGREEMENT

 

This Amendment to
Securities Purchase Agreement (this “Amendment”) is dated as of January 19,
2005, among Power 3 Medical Products, Inc., a New York corporation
(the “Company”) and each purchaser identified on the signature pages attached
hereto (each, including its successors and assigns, a “Purchaser” and
collectively the “Purchasers”).

 

WHEREAS, the Company and
the Purchasers entered into that certain Securities Purchase Agreement dated as
of October 28, 2004 (the “Securities Purchase Agreement”) providing
for the purchase and sale of the securities more specifically described
therein; and

 

WHEREAS, the Company and
certain of the Purchasers have agreed to amend provisions of the Securities
Purchase Agreement pertaining to the timing of their purchase of additional
Debentures and the Company has agreed to amend provisions of the Securities
Purchase Agreement regarding the number of Warrants issuable to such
Purchasers; and

 

WHEREAS, pursuant to Section 5.5
of the Securities Purchase Agreement, the Company and each of the Purchasers
are entering into this Amendment to set forth the terms and conditions of, and
acknowledge their consent and agreement to, the following amendments to the Securities
Purchase Agreement.

 

NOW, THEREFORE, for and
in consideration of the mutual covenants and agreements herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged and confessed, the Company and the Purchasers hereby agree
as follows:

 

Section 1.                                            Definitions.  Except
as otherwise amended or defined in this Amendment, all terms used herein with
their initial letter capitalized shall have the meaning given to such terms in
the Securities Purchase Agreement.

 

Section 2.                                            Amendments to Securities Purchase Agreement.  The Securities Purchase Agreement shall be
amended effective as of the date hereof in the manner provided in this Section 2.

 

2.1                                 Amended
Definitions.  

 

(a)                                  The
definition of “Closing Date” shall be and it is hereby amended and
restated in its entirety to read as follows:

 

“Closing Date” means, collectively, the dates
of the First Closing, Interim Closing and Second Closing.

 

(b)                                 The
definition of “Closings” shall be and it is hereby amended and restated
in its entirety to read as follows:

 

“Closings” means, collectively, the closings of
the purchase and sale of the Securities pursuant to Section 2.1, and any
reference to

 

 

“Closing” or “Closings” shall be construed to include
the First Closing, Interim Closing and the Second Closing unless only one such
closing is expressly referred to.

 

(c)                                  The
definition of “Subscription Amount” shall be and it is hereby amended
and restated in its entirety to read as follows:

 

“Subscription Amount” means, as to each
Purchaser, the amount set forth below such Purchaser’s signature block on the
signature pages hereto and next to the headings “First Closing
Subscription Amount,” “Interim Closing Subscription Amount” and “Second Closing
Subscription Amount,” in United States Dollars and in immediately available
funds.

 

(d)                                 The
definition of “Warrants” shall be and it is hereby amended and restated
in its entirety to read as follows:

 

“Warrants” means collectively the Common Stock
purchase warrants in the form of Exhibit C delivered (i) to
the Purchasers at the First Closing in accordance with Section 2.2(a) hereof,
and (ii) to those Purchasers participating in the Interim Closing in
accordance with Section 2.2(a) hereof, all of such Warrants shall be
exercisable immediately and have a term of exercise equal to five (5) years
from October 28, 2004.

 

2.2                                 Additional
Definitions.  Section 1.1 of the
Securities Purchase Agreement shall be and it is hereby amended by adding the
following definitions in proper alphabetical order:

 

(a)                                  “Interim
Closing” shall have the meaning ascribed to such term in Section 2.1
hereof.

 

(b)                                 “Interim
Closing Date” means the date of the Interim Closing.

 

(c)                                  “Registration
Statement Filing Date” means the date that the initial Registration
Statement required to be filed by the Company pursuant to the Registration
Rights Agreement is first filed by the Company with the Commission.

 

2.3                                 Closing.  

 

(a)                                  Section 2.1
of the Securities Purchase Agreement is hereby amended by deleting the second
sentence of the initial paragraph of said Section and inserting the
following sentence in lieu thereof:

 

The Closings shall take place in three stages as set
forth below (respectively, the “First Closing,” the “Interim Closing”
and the “Second Closing”).

 

2

 

(b)                                 Section 2.1(b) of
the Securities Purchase Agreement is deleted in its entirety and the following
Sections 2.1(b) and 2.1(c) are inserted in lieu thereof:

 

(b)                                 Interim
Closing.  The Interim Closing shall
be for $400,000 aggregate principal amount of Debentures, and shall occur on or
before the third (3rd) Trading Day following the Registration Statement Filing
Date.

 

(c)                                  Second
Closing.  The Second Closing shall be
for $1,600,000 aggregate principal amount of Debentures, and shall occur on or
before the fifth (5th) Trading Day following the Effective Date.

 

2.4                                 Deliveries.  

 

(a)                                  Section 2.2(a)(iii) of
the Securities Purchase Agreement is hereby amended by adding the phrase “,
Interim Closing” after the phrase “First Closing.”

 

(b)                                 Section 2.2(a)(vi) of the Securities Purchase Agreement is hereby
amended by deleting “.” at the end of such Section and inserting “; and”
in lieu thereof.

 

(c)                                  Section 2.2(a) of
the Securities Purchase Agreement is hereby amended by adding the following new
subparagraph to the end of such Section:

 

(vii)                           on the Interim Closing Date,
a Warrant registered in the name of each Purchaser participating in the Interim
Closing to purchase up to a number of shares of Common Stock equal to (1) 100%
of such Purchaser’s Subscription Amounts for the First Closing, Interim Closing
and Second Closing divided by $0.90, less (2) the original number
of shares of Common Stock covered by the Warrant delivered to such Purchaser at
the First Closing pursuant to Section 2.2(a)(iii) above.  All such Warrants delivered pursuant to this Section 2.2(a)(vii) shall have an exercise price equal to $1.44,
subject to adjustment therein, and shall expire concurrently with the Warrants
delivered at the First Closing.  (For the
avoidance of doubt and as an example, the following will illustrate the
calculation of the number of additional shares of Common Stock to be covered by
the Warrants deliverable pursuant to this Section 2.2(a)(vii) to
a Purchaser with an aggregate Subscription Amount of $300,000 who received a
Warrant to purchase 250,000 shares of Common Stock pursuant to Section 2.2(a)(iii) in
the First Closing:

 

($300,000 ) $0.90) –
250,000 = 83,333 additional Warrant Shares

 

3

 

2.5                                 Closing
Conditions.

 

(a)                                  Section 2.3(b)(iv) of
the Securities Purchase Agreement is hereby amended by adding the phrase “Interim
Closing and” before the phrase “Second Closing.”

 

(b)                                 Section 2.3
of the Securities Purchase Agreement is hereby amended by renumbering Section 2.3(c) as
Section 2.3(d) and by inserting the following new Section 2.3(c):

 

(c)                                  As
to the Interim Closing only, the Company shall have filed with the Commission
the Registration Statement registering the resale of all of the Underlying
Shares.

 

Section 3.                                            Acknowledgment and Consent of Purchasers.  By execution of this Amendment, each
Purchaser agrees and consents to the foregoing amendments to the Securities
Purchase Agreement and the terms of the transaction evidenced thereby.  Each Purchaser hereby acknowledges and
confirms that pursuant to Section 4.15 of the Securities Purchase
Agreement, each Purchaser was offered the opportunity to participate in the
Interim Closing and to receive the additional Warrants issuable by the Company
in the Interim Closing and that the Company has satisfied its obligations under
Section 4.15 as they relate to the Interim Closing.

 

Section 4.                                            Effectiveness. 
This Amendment shall be effective as of the date hereof upon the execution
of this Amendment by the Company and each of the Purchasers.

 

Section 5.                                            Miscellaneous.

 

5.1                                 Reaffirmation.  The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions of
the Securities Purchase Agreement as set forth herein and shall not be deemed
to be a consent to the modification or waiver of any
other term or condition of the Securities Purchase Agreement.  Except as expressly modified and superseded
by this Amendment, the terms and provisions of the Securities Purchase
Agreement are ratified and confirmed and shall continue in full force and
effect.

 

5.2                                 Governing
Law.  All questions concerning the
construction, validity, enforcement and interpretation of this Amendment shall
be governed by and construed and enforced in accordance with the internal laws
of the State of New York, without regard to principles of conflicts of laws
thereof.

 

5.3                                 Counterparts.  This Amendment may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement, it being understood that those parties need not sign the same
counterpart.

 

5.4                                 Parties.  This Amendment is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person.

 

4

 

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

 

	
  POWER
  3 MEDICAL PRODUCTS, INC.

  	
  Address for
  Notice:

  
	
   

  	
   

  
	
   

  	
  3400 Research
  Forest Drive, Suite B2-3

  
	
  By:

  	
  /s/ Steven B.
  Rash

  	
   

  	
  The Woodlands,
  Texas 77381

  
	
  Name:

  	
  Steven B. Rash

  	
   

  
	
  Title:

  	
  Executive
  Officer

  	
   

  
				

 

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASERS FOLLOWS]

 

 

[PURCHASER
SIGNATURE PAGES TO 

AMENDMENT TO SECURITIES PURCHASE AGREEMENT]

 

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

 

	
  Name
  of Investing Entity:

  	
    Bach
  Farms LLC

  
	
  Signature of Authorized Signatory of Investing Entity:

  	
  /s/Richard H. Bach

  
	
  Name
  of Authorized Signatory:

  	
    Richard
  H. Bach

  
	
  Title
  of Authorized Signatory:

  	
   

  
	
  Email
  Address of Authorized Entity:

  	
   

  
						

 

Address
for Notice of Investing Entity:

 

Bach
Farms LLC

Attn:  Richard H. Bach

258 Genessee Street, Suite 601

Utica,
New York  13502

 

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

 

 

	
  First Closing Subscription Amount:

  	
   

  	
  $

  	
  1,667

  	
   

  
	
  Interim Closing
  Subscription Amount:

  	
   

  	
  $

  	
  0

  	
   

  
	
  Second Closing
  Subscription Amount:

  	
   

  	
  $

  	
  3,333

  	
   

  
	
  Warrant Shares:

  	
   

  	
   

  	
   

  
	
  First Closing:

  	
   

  	
  4,167

  	
   

  
	
  Interim Closing:

  	
   

  	
  0

  	
   

  
	
  Additional
  Investment Right:

  	
   

  	
  $

  	
  4,167

  	
   

  

 

 

[PURCHASER
SIGNATURE PAGES TO 

AMENDMENT TO SECURITIES PURCHASE AGREEMENT]

 

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

 

	
  Name
  of Investing Entity:

  	
    Citiplatz
  Limited

  
	
  Signature of Authorized Signatory of Investing Entity:

  	
   

  
	
  Name
  of Authorized Signatory:

  	
   

  
	
  Title
  of Authorized Signatory:

  	
   

  
	
  Email
  Address of Authorized Entity:

  	
   

  
						

 

Address
for Notice of Investing Entity:

 

12-14
Finch Road

Douglas

Isle of Man

IM991TT

 

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

 

 

	
  First Closing Subscription Amount:

  	
   

  	
  $

  	
  50,000

  	
   

  
	
  Interim Closing
  Subscription Amount:

  	
   

  	
  $

  	
  50,000

  	
   

  
	
  Second Closing
  Subscription Amount:

  	
   

  	
  $

  	
  50,000

  	
   

  
	
  Warrant Shares:

  	
   

  	
   

  	
   

  
	
  First Closing:

  	
   

  	
  125,000

  	
   

  
	
  Interim Closing:

  	
   

  	
  41,667

  	
   

  
	
  Additional
  Investment Right:

  	
   

  	
  $

  	
  125,000

  	
   

  

 

 

[PURCHASER
SIGNATURE PAGES TO 

AMENDMENT TO SECURITIES PURCHASE AGREEMENT]

 

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

 

	
  Name
  of Investing Entity:

  	
    Crescent
  International Ltd.

  
	
  Signature of Authorized Signatory of Investing Entity:

  	
   /s/Mel Craw and Maxi Brezzi

  
	
  Name
  of Authorized Signatory:

  	
    Mel
  Craw and Maxi Brezzi

  
	
  Title
  of Authorized Signatory:

  	
      Authorized
  Signatory

  
	
  Email
  Address of Authorized Entity:

  	
        info@greenlight.dmitrust.com

  
						

 

Address
for Notice of Investing Entity:

 

Crescent
International Ltd.

c/o GreenLight (Switzerland) SA

84,
av. Louis-Casai

CH
1216 COINTRIN

Geneva,
Switzerland

 

Fax
Number of Notice of Investing Entity: 
+41 22 791 7171

 

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

 

Crescent
International Ltd.

c/o GreenLight (Switzerland) SA

84,
av. Louis-Casai

CH
1216 COINTRIN

Geneva,
Switzerland

 

 

	
  First Closing Subscription Amount:

  	
   

  	
  $

  	
  200,000

  	
   

  
	
  Interim Closing
  Subscription Amount:

  	
   

  	
  $

  	
  0

  	
   

  
	
  Second Closing
  Subscription Amount:

  	
   

  	
  $

  	
  400,000

  	
   

  
	
  Warrant Shares:

  	
   

  	
   

  	
   

  
	
  First Closing:

  	
   

  	
  500,000

  	
   

  
	
  Interim Closing:

  	
   

  	
  0

  	
   

  
	
  Additional
  Investment Right:

  	
   

  	
  $

  	
  500,000

  	
   

  
						

 

 

[PURCHASER
SIGNATURE PAGES TO 

AMENDMENT TO SECURITIES PURCHASE AGREEMENT]

 

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

 

	
  Name
  of Investing Entity:

  	
    Crestview
  Capital Master, LLC

  
	
  Signature of Authorized Signatory of Investing Entity:

  	
  /s/Stewart R. Flink

  
	
  Name
  of Authorized Signatory:

  	
    Stewart
  R. Flink

  
	
  Title
  of Authorized Signatory:

  	
      Manager

  
	
  Email
  Address of Authorized Entity:

  	
       stewart@crestviewcap.com

  
						

 

Address
for Notice of Investing Entity:

 

95
Revere Drive, Suite A

Northbrook,
Illinois  60062

 

 

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

 

 

	
  First Closing Subscription Amount:

  	
   

  	
  $

  	
  150,000

  	
   

  
	
  Interim Closing
  Subscription Amount:

  	
   

  	
  $

  	
  150,000

  	
   

  
	
  Second Closing
  Subscription Amount:

  	
   

  	
  $

  	
  150,000

  	
   

  
	
  Warrant Shares:

  	
   

  	
   

  	
   

  
	
  First Closing:

  	
   

  	
  375,000

  	
   

  
	
  Interim Closing:

  	
   

  	
  125,000

  	
   

  
	
  Additional
  Investment Right:

  	
   

  	
  $

  	
  375,000

  	
   

  

 

 

[PURCHASER
SIGNATURE PAGES TO 

AMENDMENT TO SECURITIES PURCHASE AGREEMENT]

 

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

 

	
  Name
  of Investing Entity:

  	
    DKR
  SoundShore Oasis Holding Fund, Ltd.

  
	
  Signature of Authorized Signatory of Investing Entity:

  	
  /s/Barbara
  Burger

  
	
  Name
  of Authorized Signatory:

  	
    Barbara
  Burger

  
	
  Title
  of Authorized Signatory:

  	
      Alternate
  Director

  
	
  Email
  Address of Authorized Entity:

  	
   

  
						

 

Address
for Notice of Investing Entity:

 

c/o DKR Capital Partners L.P.

1281 East Main Street

Stamford,
Connecticut  06902

 

 

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

 

Registered
Address:

 

29
Richmond Road

Pembroke
HM08

Bermuda

 

 

	
  First Closing Subscription Amount:

  	
   

  	
  $

  	
  50,000

  	
   

  
	
  Interim Closing
  Subscription Amount:

  	
   

  	
  $

  	
  0

  	
   

  
	
  Second Closing
  Subscription Amount:

  	
   

  	
  $

  	
  100,000

  	
   

  
	
  Warrant Shares:

  	
   

  	
   

  	
   

  
	
  First Closing:

  	
   

  	
  125,000

  	
   

  
	
  Interim Closing:

  	
   

  	
  0

  	
   

  
	
  Additional
  Investment Right:

  	
   

  	
  $

  	
  125,000

  	
   

  

 

 

[PURCHASER
SIGNATURE PAGES TO 

AMENDMENT TO SECURITIES PURCHASE AGREEMENT]

 

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

 

	
  Name
  of Investing Entity:

  	
    Gryphon
  Master Fund L.P.

  
	
  Signature of Authorized Signatory of Investing Entity:

  	
  /s/E.B. Lyon IV

  
	
  Name
  of Authorized Signatory:

  	
    E.B.
  Lyon IV

  
	
  Title
  of Authorized Signatory:

  	
      Authorized
  Agent

  
	
  Email
  Address of Authorized Entity:

  	
     warren@gryphonlp.com

  
						

 

Address
for Notice of Investing Entity:

 

100
Crescent Court, Suite 490

Dallas,
Texas  75201

 

 

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

 

 

	
  First Closing Subscription Amount:

  	
   

  	
  $

  	
  100,000

  	
   

  
	
  Interim Closing
  Subscription Amount:

  	
   

  	
  $

  	
  100,000

  	
   

  
	
  Second Closing
  Subscription Amount:

  	
   

  	
  $

  	
  100,000

  	
   

  
	
  Warrant Shares:

  	
   

  	
   

  	
   

  
	
  First Closing:

  	
   

  	
  250,000

  	
   

  
	
  Interim Closing:

  	
   

  	
  83,333

  	
   

  
	
  Additional
  Investment Right:

  	
   

  	
  $

  	
  250,000

  	
   

  

 

 

[PURCHASER
SIGNATURE PAGES TO 

AMENDMENT TO SECURITIES PURCHASE AGREEMENT]

 

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

 

	
  Name
  of Investing Entity:

  	
    GSSF
  Master Fund, LP

  
	
  Signature of Authorized Signatory of Investing Entity:

  	
  /s/E.B. Lyon IV

  
	
  Name
  of Authorized Signatory:

  	
    E.B.
  Lyon IV

  
	
  Title
  of Authorized Signatory:

  	
      Authorized
  Agent

  
	
  Email
  Address of Authorized Entity:

  	
      warren@gryphonlp.com

  
						

 

Address
for Notice of Investing Entity:

 

100
Crescent Court, Suite 490

Dallas, Texas  75201

 

 

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

 

 

	
  First Closing Subscription Amount:

  	
   

  	
  $

  	
  100,000

  	
   

  
	
  Interim Closing
  Subscription Amount:

  	
   

  	
  $

  	
  100,000

  	
   

  
	
  Second Closing
  Subscription Amount:

  	
   

  	
  $

  	
  100,000

  	
   

  
	
  Warrant Shares:

  	
   

  	
   

  	
   

  
	
  First Closing:

  	
   

  	
  250,000

  	
   

  
	
  Interim Closing:

  	
   

  	
  83,333

  	
   

  
	
  Additional
  Investment Right:

  	
   

  	
  $

  	
  250,000

  	
   

  

 

 

[PURCHASER
SIGNATURE PAGES TO 

AMENDMENT TO SECURITIES PURCHASE AGREEMENT]

 

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

 

	
  Name
  of Investing Entity:

  	
    Mohawk
  Funding

  
	
  Signature of Authorized Signatory of Investing Entity:

  	
  /s/ Richard H. Bach

  
	
  Name
  of Authorized Signatory:

  	
    Richard
  H. Bach

  
	
  Title
  of Authorized Signatory:

  	
      Manager
  Member

  
	
  Email
  Address of Authorized Entity:

  	
      rick.bach@verizon.net

  
						

 

Address
for Notice of Investing Entity:

 

 

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

 

 

	
  First Closing Subscription Amount:

  	
   

  	
  $

  	
  10,000

  	
   

  
	
  Interim Closing
  Subscription Amount:

  	
   

  	
  $

  	
  0

  	
   

  
	
  Second Closing
  Subscription Amount:

  	
   

  	
  $

  	
  20,000

  	
   

  
	
  Warrant Shares:

  	
   

  	
   

  	
   

  
	
  First Closing:

  	
   

  	
  25,000

  	
   

  
	
  Interim Closing:

  	
   

  	
  0

  	
   

  
	
  Additional
  Investment Right:

  	
   

  	
  $

  	
  25,000

  	
   

  

 

 

[PURCHASER
SIGNATURE PAGES TO 

AMENDMENT TO SECURITIES PURCHASE AGREEMENT]

 

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

 

	
  Name
  of Investing Entity:

  	
    Richard
  Molinsky

  
	
  Signature of Authorized Signatory of Investing Entity:

  	
  /s/ Richard Molinsky

  
	
  Name
  of Authorized Signatory:

  	
   

  
	
  Title
  of Authorized Signatory:

  	
   

  
	
  Email
  Address of Authorized Entity:

  	
      RMOL15@aol.com

  
						

 

Address
for Notice of Investing Entity:

 

51
Lourdes Hwy E.

Weston,
CT  06883

 

 

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

 

 

	
  First Closing Subscription Amount:

  	
   

  	
  $

  	
  30,000

  	
   

  
	
  Interim Closing
  Subscription Amount:

  	
   

  	
  $

  	
  0

  	
   

  
	
  Second Closing
  Subscription Amount:

  	
   

  	
  $

  	
  60,000

  	
   

  
	
  Warrant Shares:

  	
   

  	
   

  	
   

  
	
  First Closing:

  	
   

  	
  75,000

  	
   

  
	
  Interim Closing:

  	
   

  	
  0

  	
   

  
	
  Additional
  Investment Right:

  	
   

  	
  $

  	
  75,000

  	
   

  

 

 

[PURCHASER
SIGNATURE PAGES TO 

AMENDMENT TO SECURITIES PURCHASE AGREEMENT]

 

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

 

	
  Name
  of Investing Entity:

  	
    Omicron
  Master Trust

  
	
  Signature of Authorized Signatory of Investing Entity:

  	
  /s/ Bruce Bernstein

  
	
  Name
  of Authorized Signatory:

  	
    Bruce
  Bernstein

  
	
  Title
  of Authorized Signatory:

  	
      Managing
  Partner

  
	
  Email
  Address of Authorized Entity:

  	
     bb@omicroncapital.com

  
						

 

Address
for Notice of Investing Entity:

 

650
Fifth Ave., 24th Fl.

New York, NY  10019

Attn:  Brian Daly

Telephone:  212.258.2302

Fax:  212.258.2315

E-mail:  bd@omicroncapital.com

 

 

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

 

 

	
  First Closing Subscription Amount:

  	
   

  	
  $

  	
  100,000

  	
   

  
	
  Interim Closing
  Subscription Amount:

  	
   

  	
  $

  	
  0

  	
   

  
	
  Second Closing
  Subscription Amount:

  	
   

  	
  $

  	
  200,000

  	
   

  
	
  Warrant Shares:

  	
   

  	
   

  	
   

  
	
  First Closing:

  	
   

  	
  250,000

  	
   

  
	
  Interim Closing:

  	
   

  	
  0

  	
   

  
	
  Additional
  Investment Right:

  	
   

  	
  $

  	
  250,000

  	
   

  

 

 

[PURCHASER
SIGNATURE PAGES TO 

AMENDMENT TO SECURITIES PURCHASE AGREEMENT]

 

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

 

	
  Name
  of Investing Entity:

  	
    Otape
  Investments LLC

  
	
  Signature of Authorized Signatory of Investing Entity:

  	
  /s/Richard M. Cayne

  
	
  Name
  of Authorized Signatory:

  	
    Richard
  M. Cayne

  
	
  Title
  of Authorized Signatory:

  	
      General
  Counsel

  
	
  Email
  Address of Authorized Entity:

  	
     rich@ox.com,
  paul.masters@ox.com

  
						

 

Address
for Notice of Investing Entity:

 

1
Manhattanville Rd.

Purchase,
NY  10577

 

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

 

 

	
  First Closing Subscription Amount:

  	
   

  	
  $

  	
  100,000

  	
   

  
	
  Interim Closing
  Subscription Amount:

  	
   

  	
  $

  	
  0

  	
   

  
	
  Second Closing
  Subscription Amount:

  	
   

  	
  $

  	
  200,000

  	
   

  
	
  Warrant Shares:

  	
   

  	
   

  	
   

  
	
  First Closing:

  	
   

  	
  250,000

  	
   

  
	
  Interim Closing:

  	
   

  	
  0

  	
   

  
	
  Additional
  Investment Right:

  	
   

  	
  $

  	
  250,000

  	
   

  
						

 

 

[PURCHASER
SIGNATURE PAGES TO 

AMENDMENT TO SECURITIES PURCHASE AGREEMENT]

 

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

 

	
  Name
  of Investing Entity:

  	
    Platinum
  Partners Value Arbitrage Fund L.P.

  
	
  Signature of Authorized Signatory of Investing Entity:

  	
  /s/ Richard Geyser

  
	
  Name
  of Authorized Signatory:

  	
    Richard
  Geyser

  
	
  Title
  of Authorized Signatory:

  	
      Managing
  Director

  
	
  Email
  Address of Authorized Entity:

  	
     rgeyser@platinumlp.com

  
						

 

Address
for Notice of Investing Entity:

 

152 W.
57th St., 54th Fl.

New
York, NY  10019-3310

 

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

 

 

	
  First Closing Subscription Amount:

  	
   

  	
  $

  	
  83,333

  	
   

  
	
  Interim Closing
  Subscription Amount:

  	
   

  	
  $

  	
  0

  	
   

  
	
  Second Closing
  Subscription Amount:

  	
   

  	
  $

  	
  166,667

  	
   

  
	
  Warrant Shares:

  	
   

  	
   

  	
   

  
	
  First Closing:

  	
   

  	
  208,333

  	
   

  
	
  Interim Closing:

  	
   

  	
  0

  	
   

  
	
  Additional
  Investment Right:

  	
   

  	
  $

  	
  208,333

  	
   

  
						

 

 

[PURCHASER
SIGNATURE PAGES TO 

AMENDMENT TO SECURITIES PURCHASE AGREEMENT]

 

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

 

	
  Name
  of Investing Entity:

  	
    Sage
  Capital Investments Limited

  
	
  Signature of Authorized Signatory of Investing Entity:

  	
  /s/Anthony Thompson

  
	
  Name
  of Authorized Signatory:

  	
    Anthony
  Thompson

  
	
  Title
  of Authorized Signatory:

  	
      Secretary

  
	
  Email
  Address of Authorized Entity:

  	
     Rubicon532@cableone.net

  
						

 

Address
for Notice of Investing Entity:

 

P. O.
Box N-4826 (For regular mail)

Nassau,
Bahamas

 

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

 

 

	
  First Closing Subscription Amount:

  	
   

  	
  $

  	
  25,000

  	
   

  
	
  Interim Closing
  Subscription Amount:

  	
   

  	
  $

  	
  0

  	
   

  
	
  Second Closing
  Subscription Amount:

  	
   

  	
  $

  	
  50,000

  	
   

  
	
  Warrant Shares:

  	
   

  	
   

  	
   

  
	
  First Closing:

  	
   

  	
  62,500

  	
   

  
	
  Interim Closing:

  	
   

  	
  0

  	
   

  
	
  Additional
  Investment Right:

  	
   

  	
  $

  	
  62,500

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00090-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00090-of-00352.parquet"}]]