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EXHIBIT 10.48

                          SECURITIES PURCHASE AGREEMENT

         SECURITIES PURCHASE AGREEMENT (this "AGREEMENT"), dated as of January
14, 2005, by and among VisiJet, Inc., a Delaware corporation, with headquarters
located at 192 Technology Drive, Suite Q, Irvine, California 92618 (the
"COMPANY"), each of the purchasers set forth on the signature pages hereto (the
"BUYERS"), and Renn Capital Group, Inc., a Texas corporation.

         WHEREAS:

         A. The Company and the Buyers are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the rules and regulations as promulgated by the United States Securities and
Exchange Commission (the "SEC") under the Securities Act of 1933, as amended
(the "1933 ACT");

         B. Buyers desire to purchase and the Company desires to issue and sell,
upon the terms and conditions set forth in this Agreement (i) 8% senior secured
convertible debentures of the Company, in the form attached hereto as EXHIBIT
"A", in the aggregate principal amount of $8,995,000 (together with any
debenture(s) issued in replacement thereof or as a dividend thereon or otherwise
with respect thereto in accordance with the terms thereof, the "DEBENTURES"),
convertible into shares of common stock, par value $0.001 per share, of the
Company (the "COMMON STOCK"), upon the terms and subject to the limitations and
conditions set forth in such Debentures, and (ii) warrants, in the form attached
hereto as EXHIBIT "B", to purchase up to 8,995,000 shares of Common Stock (the
"WARRANTS");

         C. Each Buyer wishes to purchase, upon the terms and conditions stated
in this Agreement, such principal amount of Debentures and number of Warrants as
is set forth immediately below its name on the signature pages hereto;

         D. Contemporaneous with the execution and delivery of this Agreement,
the parties hereto are executing and delivering an Amended and Restated
Registration Rights Agreement, in the form attached hereto as EXHIBIT "C" (the
"REGISTRATION RIGHTS AGREEMENT"), pursuant to which the Company has agreed to
provide certain registration rights under the 1933 Act and the rules and
regulations promulgated thereunder, and applicable state securities laws; and

         E. Contemporaneous with the execution and delivery of this Agreement,
the parties hereto are executing and delivering an Amended and Restated Security
Agreement, in the form attached hereto as EXHIBIT "D" (the "SECURITY AGREEMENT")
pursuant to which the Company has agreed to grant a security interest in the
assets of the Company to secure the obligations of the Company to the Buyers.

         NOW THEREFORE, the Company and each of the Buyers severally (and not
jointly) hereby agree as follows:

                  1. PURCHASE AND SALE OF DEBENTURES AND WARRANTS.

                           a. PURCHASE OF DEBENTURES AND WARRANTS. Subject to
the terms and conditions of this Agreement, on the Closing Date (as defined
below), the Company shall issue and sell to each Buyer and each Buyer severally
agrees to purchase from the Company such principal amount of Debentures and a
Warrant to purchase such number of shares of Common Stock as is set forth
immediately below such Buyer's name on the signature pages hereto.

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                           b. FORM OF PAYMENT. On the Closing Date (as defined
below), each Buyer shall pay the purchase price for the Debentures and the
Warrants to be issued and sold to it at the Closing (as defined below) (the
"PURCHASE Price") against delivery of the Debentures in the principal amount
equal to the Purchase Price and the Warrant to purchase such number of shares of
Common Stock as is set forth immediately below such Buyer's name on the
signature pages hereto. The Purchase Price shall be paid by each Buyer either
(i) by wire transfer of immediately available funds to the Company, in
accordance with the Company's written wiring instructions, or (ii) by
surrendering to the Company the Company's currently outstanding 8% Convertible
Debentures and notes, together with all accrued interest thereon (which accrued
interest shall be added to the original principal amount of the Debenture) and
surrendering to the Company the unexercised stock purchase warrant issued in
connection with the issuance of such 8% Convertible Debentures and notes. The
Company shall deliver such Debentures and Warrants duly executed on behalf of
the Company, to such Buyer, against delivery of such Purchase Price.

                           c. CLOSING DATE. Subject to the satisfaction (or
written waiver) of the conditions thereto set forth in Section 5 and Section 6
below, the date and time of the issuance and sale of the Debentures and the
Warrants pursuant to this Agreement (the "CLOSING DATE") shall be simultaneous
with the execution of this Agreement, or such other mutually agreed upon time.
The closing of the transactions contemplated by this Agreement (the "CLOSING")
shall occur on the Closing Date at such location as may be agreed to by the
parties.

                  2. BUYERS' REPRESENTATIONS AND WARRANTIES. Each Buyer
severally (and not jointly) represents and warrants to the Company solely as to
such Buyer that:

                           a. INVESTMENT PURPOSE. As of the date hereof and the
Closing Date, the Buyer is purchasing the Debentures and the shares of Common
Stock issuable upon conversion of or otherwise pursuant to the Debentures
pursuant to this Agreement, (the "CONVERSION SHARES") and the Warrants and the
shares of Common Stock issuable upon exercise thereof (the "WARRANT SHARES" and,
collectively with the Debentures, Warrants and Conversion Shares, the
"SECURITIES") for its own account and not with a present view towards the public
sale or distribution thereof, except pursuant to sales registered or exempted
from registration under the 1933 Act; provided, however, that by making the
representations herein, the Buyer does not agree to hold any of the Securities
for any minimum or other specific term and reserves the right to dispose of the
Securities at any time in accordance with or pursuant to a registration
statement or an exemption under the 1933 Act.

                           b. ACCREDITED INVESTOR STATUS. The Buyer is an
"accredited investor" as that term is defined in Rule 501(a) of Regulation D (an
"ACCREDITED INVESTOR").

                           c. RELIANCE ON EXEMPTIONS. The Buyer understands that
the Securities are being offered and sold to it in reliance upon specific
exemptions from the registration requirements of United States federal and state
securities laws and that the Company is relying upon the truth and accuracy of,
and the Buyer's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of the Buyer
to acquire the Securities.

                           d. INFORMATION. The Buyer and its advisors, if any,
have been furnished with all information relating to the business, finances and
operations of the Company and information relating to the offer and sale of the
Securities which have been requested by the Buyer or its advisors; provided,
however, that the Buyer is relying on the Company's representation that all such
information which would otherwise constitute material nonpublic information has
been disclosed to the public prior to or promptly following such disclosure to
the Buyer. Neither such inquiries nor any other due diligence investigation

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conducted by Buyer or any of its advisors or representatives shall modify, amend
or affect Buyer's right to rely on the Company's representations and warranties
contained in Section 3 below. The Buyer understands that its investment in the
Securities involves a significant degree of risk.

                           e. GOVERNMENTAL REVIEW. The Buyer understands that no
United States federal or state agency or any other government or governmental
agency has passed upon or made any recommendation or endorsement of the
Securities.

                           f. TRANSFER OR RE-SALE. The Buyer understands that
except as provided in the Registration Rights Agreement, the sale or re-sale of
the Securities has not been and is not being registered under the 1933 Act or
any applicable state securities laws, and the Securities may not be transferred
unless (i) the Securities are sold pursuant to an effective registration
statement under the 1933 Act, (ii) the Buyer shall have delivered to the Company
an opinion of counsel that shall be in form, substance and scope customary for
opinions of counsel in comparable transactions to the effect that the Securities
to be sold or transferred may be sold or transferred pursuant to an exemption
from such registration, which opinion shall be reasonably acceptable to the
Company, (iii) the Securities are sold or transferred to an "affiliate" (as
defined in Rule 144 promulgated under the 1933 Act (or a successor rule) ("RULE
144")) of the Buyer who agrees to sell or otherwise transfer the Securities only
in accordance with this Section 2(f) and who is an Accredited Investor, (iv) the
Securities are sold pursuant to Rule 144, or (v) the Securities are sold
pursuant to Regulation S under the 1933 Act (or a successor rule) ("REGULATION
S"), and the Buyer shall have delivered to the Company an opinion of counsel
that shall be in form, substance and scope customary for opinions of counsel in
corporate transactions, which opinion shall be accepted by the Company.
Notwithstanding the foregoing or anything else contained herein to the contrary,
the Securities may be pledged as collateral in connection with a bona fide
margin account or other lending arrangement.

                           g. LEGENDS. The Buyer understands that the Debentures
and the Warrants and, until such time as the resale of the Conversion Shares and
Warrant Shares have been registered under the 1933 Act as contemplated by the
Registration Rights Agreement or otherwise may be sold pursuant to Rule 144 or
Regulation S without any restriction as to the number of securities as of a
particular date that can then be immediately sold certificates evidencing
Conversion Shares and Warrant Shares may bear a restrictive legend in
substantially the following form (and a stop-transfer order may be placed
against transfer of the certificates evidencing such Securities):

                  "The securities represented by this certificate have not been
                  registered under the Securities Act of 1933, as amended (the
                  "Act"). The securities may not be sold, transferred or
                  assigned in the absence of an effective registration statement
                  for the securities under the Act, or an opinion of counsel in
                  form, substance and scope customary for opinions of counsel in
                  comparable transactions, that registration is not required
                  under the Act or unless sold pursuant to Rule 144 or
                  Regulation S under the Act."

                           h. AUTHORIZATION; ENFORCEMENT. This Agreement has
been duly and validly authorized by, and duly executed and delivered on behalf
of, the Buyer, and this Agreement constitutes the valid and binding agreement of
the Buyer enforceable in accordance with its terms.

                           i. RESIDENCY. The Buyer is a resident of the
jurisdiction set forth immediately below such Buyer's name on the signature
pages hereto.

                  3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as
set forth in the Company's Disclosure Schedule annexed hereto, the Company
represents and warrants to each Buyer that:

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                           a. ORGANIZATION AND QUALIFICATION. The Company and
each of its Subsidiaries (as defined below), if any, is a corporation or other
entity duly organized, validly existing and in good standing under the laws of
the jurisdiction in which it is incorporated or organized, with full power and
authority (corporate and other) to own, lease, use and operate its properties
and to carry on its business as and where now owned, leased, used, operated and
conducted. The Company and each of its Subsidiaries is duly qualified as a
foreign corporation to do business and is in good standing in every jurisdiction
in which its ownership or use of property or the nature of the business
conducted by it makes such qualification necessary except where the failure to
be so qualified or in good standing would not have a Material Adverse Effect.
"MATERIAL ADVERSE EFFECT" means any material adverse effect on the business,
operations, assets, financial condition or prospects of the Company or its
Subsidiaries, if any, taken as a whole, or on the transactions contemplated
hereby or by the agreements or instruments to be entered into in connection
herewith. "SUBSIDIARIES" means any corporation or other organization, whether
incorporated or unincorporated, in which the Company owns, directly or
indirectly, any equity or other ownership interest.

                           b. AUTHORIZATION; ENFORCEMENT. The Company has all
requisite corporate power and authority to enter into and perform this
Agreement, the Registration Rights Agreement, the Security Agreement, the
Debentures and the Warrants and to consummate the transactions contemplated
hereby and thereby and to issue the Securities, in accordance with the terms
hereof and thereof. The execution and delivery of this Agreement, the
Registration Rights Agreement, the Security Agreement, the Debentures and the
Warrants by the Company and the consummation by it of the transactions
contemplated hereby and thereby (including without limitation, the issuance of
the Debentures and the Warrants and the issuance and reservation for issuance of
the Conversion Shares and Warrant Shares issuable upon conversion or exercise
thereof) have been duly authorized by the Company's Board of Directors and no
further consent or authorization of the Company, its Board of Directors, or its
stockholders is required. This Agreement has been duly executed and delivered by
the Company by its authorized representative, and such authorized representative
is the true and official representative with authority to sign this Agreement
and the other documents executed in connection herewith and bind the Company
accordingly. This Agreement constitutes, and upon execution and delivery by the
Company of the Registration Rights Agreement, the Security Agreement, the
Debentures and the Warrants, each of such instruments will constitute, a legal,
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms.

                           c. CAPITALIZATION. As of the date hereof, the
authorized capital stock of the Company consists of (i) 50,000,000 shares of
Common Stock, of which 28,677,520 shares are issued and outstanding, 22,912,718
shares are reserved for issuance pursuant to securities (other than the
Debentures and the Warrants) exercisable for, or convertible into or
exchangeable for shares of Common Stock; and (ii) 10,000,000 shares of preferred
stock, of which no series or class has been designated and no shares are issued
and outstanding. All of such outstanding shares of capital stock are, or upon
issuance will be, duly authorized, validly issued, fully paid and nonassessable.
No shares of capital stock of the Company are subject to preemptive rights or
any other similar rights of the stockholders of the Company or any liens or
encumbrances imposed through the actions or failure to act of the Company. As of
the date of this Agreement, (i) there are no outstanding options, warrants,
scrip, rights to subscribe for, puts, calls, rights of first refusal,
agreements, understandings, claims or other commitments or rights of any
character whatsoever relating to, or securities or rights convertible into or
exchangeable for any shares of capital stock of the Company or any of its
Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is
or may become bound to issue additional shares of capital stock of the Company
or any of its Subsidiaries, (ii) there are no agreements or arrangements under
which the Company or any of its Subsidiaries is obligated to register the sale
of any of its or their securities under the 1933 Act (except the Registration

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Rights Agreement) and (iii) there are no anti-dilution or price adjustment
provisions contained in any security issued by the Company (or in any agreement
providing rights to security holders) that will be triggered by the issuance of
the Debentures, the Warrants, the Conversion Shares or Warrant Shares.

                           d. ISSUANCE OF SHARES. The Conversion Shares and
Warrant Shares are duly authorized and reserved for issuance and, upon
conversion of the Debentures and exercise of the Warrants in accordance with
their respective terms, will be validly issued, fully paid and non-assessable,
and free from all taxes, liens, claims and encumbrances with respect to the
issue thereof and shall not be subject to preemptive rights or other similar
rights of stockholders of the Company and will not impose personal liability
upon the holder thereof.

                           e. ACKNOWLEDGMENT OF DILUTION. The Company
understands and acknowledges the potentially dilutive effect to the Common Stock
upon the issuance of the Conversion Shares and Warrant Shares upon conversion of
the Debentures or exercise of the Warrants. The Company further acknowledges
that its obligation to issue Conversion Shares and Warrant Shares upon
conversion of the Debentures or exercise of the Warrants in accordance with this
Agreement, the Debentures and the Warrants is absolute and unconditional
regardless of the dilutive effect that such issuance may have on the ownership
interests of other shareholders of the Company.

                           f. NO CONFLICTS. The execution, delivery and
performance of this Agreement, the Registration Rights Agreement, the Security
Agreement, the Debentures and the Warrants by the Company and the consummation
by the Company of the transactions contemplated hereby and thereby (including,
without limitation, the issuance and reservation for issuance of the Conversion
Shares and Warrant Shares) will not (i) conflict with or result in a violation
of any provision of the certificate of incorporation, as amended, (the
"CERTIFICATE OF INCORPORATION") of the Company or the by-laws, as amended, (the
"BY-LAWS") of the Company, or (ii) violate or conflict with, or result in a
breach of any provision of, or constitute a default (or an event which with
notice or lapse of time or both could become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture, patent, patent license or instrument to which the Company
or any of its Subsidiaries is a party, or (iii) result in a violation of any
law, rule, regulation, order, judgment or decree (including federal and state
securities laws and regulations and regulations of any self-regulatory
organizations to which the Company or its securities are subject) applicable to
the Company or any of its Subsidiaries or by which any property or asset of the
Company or any of its Subsidiaries is bound or affected (except for such
conflicts, defaults, terminations, amendments, accelerations, cancellations and
violations as would not, individually or in the aggregate, have a Material
Adverse Effect). Neither the Company nor any of its Subsidiaries is in violation
of its Certificate of Incorporation, By-laws or other organizational documents
and neither the Company nor any of its Subsidiaries is in default (and no event
has occurred which with notice or lapse of time or both could put the Company or
any of its Subsidiaries in default) under, and neither the Company nor any of
its Subsidiaries has taken any action or failed to take any action that would
give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company or
any of its Subsidiaries is a party or by which any property or assets of the
Company or any of its Subsidiaries is bound or affected, except for possible
defaults as would not, individually or in the aggregate, have a Material Adverse
Effect. The businesses of the Company and its Subsidiaries, if any, have never
been conducted, and are not currently conducted in violation of any law,
ordinance or regulation of any governmental entity. Except as specifically
contemplated by this Agreement and as required under the 1933 Act and any
applicable state securities laws, the Company is not required to obtain any
consent, authorization or order of, or make any filing or registration with, any
court, governmental agency, regulatory agency, self regulatory organization or
stock market or any third party in order for it to execute, deliver or perform
any of its obligations under this Agreement, the Registration Rights Agreement,

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the Security Agreement, the Debentures or the Warrants in accordance with the
terms hereof or thereof or to issue and sell the Debentures and the Warrants in
accordance with the terms hereof and to issue the Conversion Shares upon
conversion of the Debentures and the Warrant Shares upon exercise of the
Warrants. All consents, authorizations, orders, filings and registrations which
the Company is required to obtain pursuant to the preceding sentence have been
obtained or effected on or prior to the date hereof. The Company is not in
violation of the listing requirements of the Over-the-Counter Bulletin Board
(the "OTCBB") and does not reasonably anticipate that the Common Stock will be
delisted by the OTCBB in the foreseeable future. The Company and its
Subsidiaries are unaware of any facts or circumstances which might give rise to
any of the foregoing.

                           g. SEC DOCUMENTS; FINANCIAL STATEMENTS. The Company
has timely filed all reports, schedules, forms, statements and other documents
required to be filed by it with the SEC pursuant to the reporting requirements
of the Securities Exchange Act of 1934, as amended (the "1934 ACT") (all of the
foregoing filed prior to the date hereof and all exhibits included therein and
financial statements and schedules thereto and documents (other than exhibits to
such documents) incorporated by reference therein, being hereinafter referred to
herein as the "SEC DOCUMENTS"). The Company has delivered to each Buyer true and
complete copies of the SEC Documents, except for such exhibits and incorporated
documents. As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. None of the statements made in any such SEC Documents is, or has
been, required to be amended or updated under applicable law (except for such
statements as have been amended or updated in subsequent filings prior the date
hereof). As of their respective dates, the financial statements of the Company
included in the SEC Documents complied as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto. Such financial statements have been prepared in
accordance with United States generally accepted accounting principles,
consistently applied, during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto, or (ii)
in the case of unaudited interim statements, to the extent they may not include
footnotes or may be condensed or summary statements) and fairly present in all
material respects the consolidated financial position of the Company and its
consolidated Subsidiaries as of the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments). Except as
set forth in the financial statements of the Company included in the SEC
Documents, the Company has no liabilities, contingent or otherwise, other than
(i) liabilities incurred in the ordinary course of business subsequent to
December 31, 2003 and (ii) obligations under contracts and commitments incurred
in the ordinary course of business and not required under generally accepted
accounting principles to be reflected in such financial statements, which,
individually or in the aggregate, are not material to the financial condition or
operating results of the Company.

                           h. ABSENCE OF CERTAIN CHANGES. Since December 31,
2003, there has been no material adverse change and no material adverse
development in the assets, liabilities, business, properties, operations,
financial condition, results of operations or prospects of the Company or any of
its Subsidiaries.

                           i. ABSENCE OF LITIGATION. There is no action, suit,
claim, proceeding, inquiry or investigation before or by any court, public
board, government agency, self-regulatory organization or body pending or, to
the knowledge of the Company or any of its Subsidiaries, threatened against or
affecting the Company or any of its Subsidiaries, or their officers or directors
in their capacity as such, that could have a Material Adverse Effect. The
Company and its Subsidiaries are unaware of any facts or circumstances which
might give rise to any of the foregoing.

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                           j. PATENTS, COPYRIGHTS, ETC.

                                    (i) The Company and each of its Subsidiaries
owns or possesses the requisite licenses or rights to use all patents, patent
applications, patent rights, inventions, know-how, trade secrets, trademarks,
trademark applications, service marks, service names, trade names and copyrights
("INTELLECTUAL PROPERTY") necessary to enable it to conduct its business as now
operated (and, to the Company's knowledge, as presently contemplated to be
operated in the future); there is no claim or action by any person pertaining
to, or proceeding pending, or to the Company's knowledge threatened, which
challenges the right of the Company or of a Subsidiary with respect to any
Intellectual Property necessary to enable it to conduct its business as now
operated (and, to the Company's knowledge, as presently contemplated to be
operated in the future); to the Company's knowledge, the Company's or its
Subsidiaries' current and intended products, services and processes do not
infringe on any Intellectual Property or other rights held by any person; and
the Company is unaware of any facts or circumstances which might give rise to
any of the foregoing

                                    (ii) Neither the Company nor any of its
Subsidiaries owns or possesses any Copyrights, Patents, or Trademarks, each as
defined herein. "COPYRIGHTS" shall mean all copyrights, registrations and
applications for registration, issued or filed, including any reissues,
extensions or renewals thereof, by or with the United States Copyright Office or
any similar office or agency of the United States, any state thereof, or any
other country or political subdivision thereof, or otherwise, including, all
rights in and to the material constituting the subject matter thereof. "PATENTS"
shall mean all letters patent of the United States or any other country or any
political subdivision thereof, and all reissues and extensions thereof or all
applications for letters patent of the United States and all divisions,
continuations and continuations-in-part thereof or any other country or any
political subdivision. "TRADEMARKS" shall mean all trademarks, trade names,
corporate names, company names, business names, fictitious business names, trade
styles, service marks, logos and other source or business identifiers, embodied
in any registration or recording, or any application in connection therewith,
whether in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any state thereof or any other country or
any political subdivision thereof.

                           k. NO MATERIALLY ADVERSE CONTRACTS, ETC. Neither the
Company nor any of its Subsidiaries is subject to any charter, corporate or
other legal restriction, or any judgment, decree, order, rule or regulation
which in the judgment of the Company's officers has or is expected in the future
to have a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries is a party to any contract or agreement which in the judgment of
the Company's officers has or is expected to have a Material Adverse Effect.

                           l. TAX STATUS. The Company and each of its
Subsidiaries has made or filed all federal, state and foreign income and all
other tax returns, reports and declarations required by any jurisdiction to
which it is subject (unless and only to the extent that the Company and each of
its Subsidiaries has set aside on its books provisions reasonably adequate for
the payment of all unpaid and unreported taxes) and has paid all taxes and other
governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and has set aside on its books provisions
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply. There are no
unpaid taxes in any material amount claimed to be due by the taxing authority of
any jurisdiction, and the officers of the Company know of no basis for any such
claim. The Company has not executed a waiver with respect to the statute of
limitations relating to the assessment or collection of any foreign, federal,
state or local tax. None of the Company's tax returns is presently being audited
by any taxing authority.

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                           m. CERTAIN TRANSACTIONS. Except for arm's length
transactions pursuant to which the Company or any of its Subsidiaries makes
payments in the ordinary course of business upon terms no less favorable than
the Company or any of its Subsidiaries could obtain from third parties, none of
the officers, directors, or employees of the Company is presently a party to any
transaction with the Company or any of its Subsidiaries (other than for services
as employees, officers and directors), including any contract, agreement or
other arrangement providing for the furnishing of services to or by, providing
for rental of real or personal property to or from, or otherwise requiring
payments to or from any officer, director or such employee or, to the knowledge
of the Company, any corporation, partnership, trust or other entity in which any
officer, director, or any such employee has a substantial interest or is an
officer, director, trustee or partner.

                           n. PERMITS; COMPLIANCE. The Company and each of its
Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exemptions, consents, certificates,
approvals and orders necessary to own, lease and operate its properties and to
carry on its business as it is now being conducted (collectively, the "COMPANY
PERMITS"), and there is no action pending or, to the knowledge of the Company,
threatened regarding suspension or cancellation of any of the Company Permits.
Neither the Company nor any of its Subsidiaries is in conflict with, or in
default or violation of, any of the Company Permits, except for any such
conflicts, defaults or violations which, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect. Since December 31,
2003, neither the Company nor any of its Subsidiaries has received any
notification with respect to possible conflicts, defaults or violations of
applicable laws, except for notices relating to possible conflicts, defaults or
violations, which conflicts, defaults or violations would not have a Material
Adverse Effect.

                           o. ENVIRONMENTAL MATTERS. There are, with respect to
the Company or any of its Subsidiaries, no past or present violations of
Environmental Laws (as defined below), releases of any material into the
environment, actions, activities, circumstances, conditions, events, incidents,
or contractual obligations which may give rise to any common law environmental
liability or any liability under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 or similar federal, state, local or
foreign laws and neither the Company nor any of its Subsidiaries has received
any notice with respect to any of the foregoing, nor is any action pending or,
to the Company's knowledge, threatened in connection with any of the foregoing.
The term "ENVIRONMENTAL LAWS" means all federal, state, local or foreign laws
relating to pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata), including, without limitation, laws relating to
emissions, discharges, releases or threatened releases of chemicals, pollutants
contaminants, or toxic or hazardous substances or wastes (collectively,
"HAZARDOUS MATERIALS") into the environment, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials, as well as all authorizations,
codes, decrees, demands or demand letters, injunctions, judgments, licenses,
notices or notice letters, orders, permits, plans or regulations issued,
entered, promulgated or approved thereunder. Other than those that are or were
stored, used or disposed of in compliance with applicable law, no Hazardous
Materials are contained on or about any real property currently owned, leased or
used by the Company or any of its Subsidiaries, and no Hazardous Materials were
released on or about any real property previously owned, leased or used by the
Company or any of its Subsidiaries during the period the property was owned,
leased or used by the Company or any of its Subsidiaries, except in the normal
course of the Company's or any of its Subsidiaries' business. There are no
underground storage tanks on or under any real property owned, leased or used by
the Company or any of its Subsidiaries that are not in compliance with
applicable law.

                                       8
<PAGE>

                           p. TITLE TO PROPERTY. The Company and its
Subsidiaries have good and marketable title in fee simple to all real property
and good and marketable title to all personal property owned by them which is
material to the business of the Company and its Subsidiaries, in each case free
and clear of all liens, encumbrances and defects except such as would not have a
Material Adverse Effect. Any real property and facilities held under lease by
the Company and its Subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as would not have a Material Adverse
Effect.

                           q. INSURANCE. The Company and each of its
Subsidiaries are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as management of the Company
believes to be prudent and customary in the businesses in which the Company and
its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has
any reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost that
would not have a Material Adverse Effect.

                           r. INTERNAL ACCOUNTING CONTROLS. The Company and each
of its Subsidiaries maintain a system of internal accounting controls
sufficient, in the judgment of the Company's board of directors, to provide
reasonable assurance that (i) transactions are executed in accordance with
management's general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability,
(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.

                           s. FOREIGN CORRUPT PRACTICES. Neither the Company,
nor any of its Subsidiaries, nor any director, officer, agent, employee or other
person acting on behalf of the Company or any Subsidiary has, in the course of
his actions for, or on behalf of, the Company, used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expenses relating
to political activity; made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds;
violated or is in violation of any provision of the U.S. Foreign Corrupt
Practices Act of 1977, as amended, or made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment to any foreign or domestic
government official or employee.

                           t. SOLVENCY. The Company (after giving effect to the
transactions contemplated by this Agreement) is solvent (I.E., its assets have a
fair market value in excess of the amount required to pay its probable
liabilities on its existing debts as they become absolute and matured) and
currently the Company has no information that would lead it to reasonably
conclude that the Company would not, after giving effect to the transaction
contemplated by this Agreement, have the ability to, nor does it intend to take
any action that would impair its ability to, pay its debts from time to time
incurred in connection therewith as such debts mature.

                           u. NO INVESTMENT COMPANY. The Company is not, and
upon the issuance and sale of the Securities as contemplated by this Agreement
will not be an "investment company" as defined under the Investment Company Act
of 1940 (an "INVESTMENT COMPANY"). The Company is not controlled by an
Investment Company.

                           v. DISCLOSURE. All information relating to or
concerning the Company or any of its Subsidiaries set forth in this Agreement
and provided to the Buyers in connection with the transactions contemplated
hereby is true and correct in all material respects and the Company has not
omitted to state any material fact necessary in order to make the statements
made herein or therein, in light of the circumstances under which they were

                                       9
<PAGE>

made, not misleading. No event or circumstance has occurred or exists with
respect to the Company or any of its Subsidiaries or its or their business,
properties, prospects, operations or financial conditions, which, under
applicable law, rule or regulation, requires public disclosure or announcement
by the Company but which has not been so publicly announced or disclosed.

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

                           x. NO INTEGRATED OFFERING. Neither the Company, nor
any of its affiliates, nor any person acting on its or their behalf, has
directly or indirectly made any offers or sales in any security or solicited any
offers to buy any security under circumstances that would require registration
under the 1933 Act of the issuance of the Securities to the Buyers. The issuance
of the Securities to the Buyers will not be integrated with any other issuance
of the Company's securities (past, current or future) for purposes of any
stockholder approval provisions applicable to the Company or its securities.

                           y. NO BROKERS. The Company has taken no action which
would give rise to any claim by any person for brokerage commissions,
transaction fees or similar payments relating to this Agreement or the
transactions contemplated hereby.

                           z. REGISTRATION RIGHTS. Except pursuant to the
Registration Rights Agreement or as set forth in the SEC Documents, effective
upon the Closing, neither Company nor any Subsidiary is currently subject to any
agreement providing any person or entity any rights (including piggyback
registration rights) to have any securities of the Company or any Subsidiary
registered with the SEC or registered or qualified with any other governmental
authority.

                           aa. GENERAL SOLICITATION. Neither the Company nor any
other person or entity authorized by the Company to act on its behalf has
engaged in a general solicitation or general advertising (within the meaning of
Regulation D of the 1933 Act) of investors with respect to offers or sales of
the Debentures or the Warrants

                           bb. EXCHANGE ACT REGISTRATION. The Common Stock is
registered pursuant to Section 12(g) of the Exchange Act, and the Company has
taken no action designed to, or which, to the knowledge of the Company, is
likely to have the effect of, terminating the registration of the Common Stock
under the Exchange Act.

                           cc. 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 Buyers as a result of the Buyers and the Company
fulfilling their obligations or exercising their rights under this Agreement,
the Debentures, the Warrants, and the other documents entered into in connection
with this Agreement, including without limitation as a result of the Company's
issuance of the Securities and the Buyers' ownership of the Securities.

                                       10
<PAGE>

                  4. COVENANTS.

                           a. BEST EFFORTS. The parties shall use their best
efforts to satisfy timely each of the conditions described in Section 5 and
Section 6 of this Agreement.

                           b. FORM D; BLUE SKY LAWS. The Company agrees to file
a Form D with respect to the Securities as required under Regulation D and to
provide a copy thereof to each Buyer promptly after such filing. The Company
shall, on or before the Closing Date, take such action as the Company shall
reasonably determine is necessary to qualify the Securities for sale to the
Buyers at the applicable closing pursuant to this Agreement under applicable
securities or "blue sky" laws of the states of the United States (or to obtain
an exemption from such qualification), and shall provide evidence of any such
action so taken to each Buyer on or prior to the Closing Date.

                           c. USE OF PROCEEDS. The Company shall use the
proceeds from the sale of the Debenture and Warrants as set forth in the
Company's Disclosure Schedule. The Company shall not, directly or indirectly,
use the proceeds from the sale of the Debentures and Warrants for any loan to or
investment in any other corporation, partnership, enterprise or other person
(except in connection with its currently existing direct or indirect
Subsidiaries).

                           d. EXPENSES. At the Closing, the Company shall
reimburse Buyers for expenses incurred by them in connection with the
negotiation, preparation, execution, delivery and performance of this Agreement
and the other agreements to be executed in connection herewith ("DOCUMENTS"),
including, without limitation, attorneys' and consultants' fees and expenses,
transfer agent fees, fees for stock quotation services, fees relating to any
amendments or modifications of the Documents or any consents or waivers of
provisions in the Documents, fees for the preparation of opinions of counsel,
escrow fees, and costs of restructuring the transactions contemplated by the
Documents. The Company shall reimburse, or pay directly, at the Closing, the
Buyers' counsels' fees in incurred in connection with this transaction and such
counsels' out of pocket expenses. When possible, the Company must pay these fees
directly, otherwise the Company must make immediate payment for reimbursement to
the Buyers for all fees and expenses immediately upon written notice by the
Buyer or the submission of an invoice by the Buyer If the Company fails to
reimburse the Buyer in full within three (3) business days of the written notice
or submission of invoice by the Buyer, the Company shall pay interest on the
total amount of fees to be reimbursed at a rate of 15% per annum.

                           e. FINANCIAL INFORMATION. The Company agrees to send,
or make available on EDGAR, the following reports to each Buyer until such Buyer
transfers, assigns, or sells all of the Securities: (i) within ten (10) days
after the filing with the SEC, a copy of its Annual Report on Form 10-KSB its
Quarterly Reports on Form 10-QSB and any Current Reports on Form 8-K; (ii)
within one (1) day after release, copies of all press releases issued by the
Company or any of its Subsidiaries; and (iii) contemporaneously with the making
available or giving to the shareholders of the Company, copies of any notices or
other information the Company makes available or gives to such shareholders.

                           f. AUTHORIZATION AND RESERVATION OF SHARES. The
Company shall at all times have authorized, and reserved for the purpose of
issuance, a sufficient number of shares of Common Stock to provide for the full
conversion or exercise of the outstanding Debentures and Warrants and issuance
of the Conversion Shares and Warrant Shares in connection therewith (based on
the Conversion Price of the Debentures or Exercise Price of the Warrants in
effect from time to time) and as otherwise required by the Debentures. The
Company shall not reduce the number of shares of Common Stock reserved for

                                       11
<PAGE>

issuance upon conversion of Debentures and exercise of the Warrants without the
consent of each Buyer. The Company shall at all times maintain the number of
shares of Common Stock so reserved for issuance at an amount ("RESERVED AMOUNT")
equal to no less than the number of shares of Common Stock that is then actually
issuable upon full conversion of the Debentures and upon exercise of the
Warrants (based on the Conversion Price of the Debentures or the Exercise Price
of the Warrants in effect from time to time). If at any time the number of
shares of Common Stock authorized and reserved for issuance ("AUTHORIZED AND
RESERVED SHARES") is below the Reserved Amount, the Company will promptly take
all corporate action necessary to authorize and reserve a sufficient number of
shares, including, without limitation, calling a special meeting of stockholders
to authorize additional shares to meet the Company's obligations under this
Section 4(f), in the case of an insufficient number of authorized shares, obtain
stockholder approval of an increase in such authorized number of shares, and
voting the management shares of the Company in favor of an increase in the
authorized shares of the Company to ensure that the number of authorized shares
is sufficient to meet the Reserved Amount.

                           g. LISTING. The Company shall promptly secure the
listing of the Conversion Shares and Warrant Shares upon each national
securities exchange or automated quotation system, if any, upon which shares of
Common Stock are then listed (subject to official notice of issuance) and, so
long as any Buyer owns any of the Securities, shall maintain, so long as any
other shares of Common Stock shall be so listed, such listing of all the
Conversion Shares and Warrant Shares from time to time issuable upon conversion
of the Debentures or exercise of the Warrants. The Company will obtain and, so
long as any Buyer owns any of the Securities, maintain the listing and trading
of its Common Stock on the OTCBB or any equivalent replacement exchange, the
Nasdaq National Market ("NASDAQ"), the Nasdaq SmallCap Market ("NASDAQ
SMALLCAP"), the New York Stock Exchange ("NYSE"), or the American Stock Exchange
("AMEX") and will comply in all respects with the Company's reporting, filing
and other obligations under the bylaws or rules of the National Association of
Securities Dealers ("NASD") and such exchanges, as applicable. The Company shall
promptly provide to each Buyer copies of any notices it receives from the OTCBB
and any other exchanges or quotation systems on which the Common Stock is then
listed regarding the continued eligibility of the Common Stock for listing on
such exchanges and quotation systems.

                           h. CORPORATE EXISTENCE. So long as a Buyer
beneficially owns any Debentures or Warrants, the Company shall maintain its
corporate existence and shall not sell all or substantially all of the Company's
assets, except in the event of a merger or consolidation or sale of all or
substantially all of the Company's assets, where the surviving or successor
entity in such transaction (i) assumes the Company's obligations hereunder and
under the agreements and instruments entered into in connection herewith and
(ii) is a publicly traded corporation whose Common Stock is listed for trading
on the OTCBB, Nasdaq, Nasdaq SmallCap, NYSE or AMEX.

                           i. NO INTEGRATION. The Company shall not make any
offers or sales of any security (other than the Securities) under circumstances
that would require registration of the Securities being offered or sold
hereunder under the 1933 Act or cause the offering of the Securities to be
integrated with any other offering of securities by the Company for the purpose
of any stockholder approval provision applicable to the Company or its
securities.

                           j. RESTRICTION ON SHORT SALES. The Buyers agree that,
so long as any of the Debentures remain outstanding, the Buyers will not enter
into or effect any "short sale" (as such term is defined in Rule 3b-3 of the
1934 Act) of the Common Stock or hedging transaction which establishes a net
short portion with respect to the Common Stock. For purposes of clarification
only, the Company hereby specifically acknowledges that at any time any Buyer
delivers a Notice of Conversion (in accordance with such Buyer's Debenture) or
an Exercise Agreement (in accordance with such Buyer's Warrant), such Buyer (i)
shall be deemed to be the owner of the shares of Common Stock underlying the

                                       12
<PAGE>

amount so converted or exercised, and (ii) may sell up to such number of shares
of Common Stock at any time thereafter and shall not be deemed to be engaged in
a "short sale" in violation of this Section 4(j).

                           k. ADDITIONAL ISSUANCES. Until the Company has filed
with the SEC an amended Registration Statement registering the resale of all of
the Registrable Securities (as such terms are defined in the Registration Rights
Agreement) in accordance with the Registration Rights Agreement, the Company
shall not issue any of its Common Stock, nor issue any other security
convertible or exchangeable for, or exercisable into, Common Stock, nor enter
into any agreement to do any of the foregoing.

                           l. REPORTING COMPANY. So long as any Buyer
beneficially owns any of the Securities, the Company shall timely file all
reports required to be filed with the SEC pursuant to the 1934 Act, and the
Company shall not terminate, or take any action that would result in the
termination of, the registration of its Common Stock under Section 12 of the
1934 Act or otherwise terminate its status as an issuer required to file reports
under the 1934 Act even if the 1934 Act or the rules and regulations thereunder
would permit such termination.

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

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

                           a. The applicable Buyer shall have executed this
Agreement, the Registration Rights Agreement, and the Security Agreement, and
delivered the same to the Company.

                           b. The applicable Buyer shall have delivered the
Purchase Price in accordance with Section 1(b) above.

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

                           d. No litigation, statute, rule, regulation,
executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by or in any court or governmental authority of
competent jurisdiction or any self-regulatory organization having authority over
the matters contemplated hereby which prohibits the consummation of any of the
transactions contemplated by this Agreement.

                  6. CONDITIONS TO EACH BUYER'S OBLIGATION TO PURCHASE.

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

                                       13
<PAGE>

                           a. The Company shall have executed this Agreement,
the Registration Rights Agreement, and the Security Agreement, and delivered the
same to such Buyer.

                           b. The Company shall have delivered to such Buyer
duly executed Debentures (in such denominations as the Buyer shall request) and
Warrants in accordance with Section 1 above.

                           c. The representations and warranties of the Company
shall be true and correct in all material respects (PROVIDED, HOWEVER, that such
qualification shall only apply to representations or warranties not otherwise
qualified by materiality) as of the date when made and as of the Closing Date as
though made at such time (except for representations and warranties that speak
as of a specific date) and the Company shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the
Company at or prior to the Closing Date. The Buyer shall have received a
certificate or certificates, executed by the principal executive officer of the
Company, dated as of the Closing Date, to the foregoing effect and as to such
other matters as may be reasonably requested by such Buyer including, but not
limited to certificates with respect to the Company's Certificate of
Incorporation, By-laws and Board of Directors' resolutions relating to the
transactions contemplated hereby.

                           d. No litigation, statute, rule, regulation,
executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by or in any court or governmental authority of
competent jurisdiction or any self-regulatory organization having authority over
the matters contemplated hereby which prohibits the consummation of any of the
transactions contemplated by this Agreement.

                           e. No event shall have occurred which could
reasonably be expected to have a Material Adverse Effect on the Company.

                           f. The Conversion Shares and Warrant Shares shall
have been authorized for quotation on the OTCBB and trading in the Common Stock
on the OTCBB shall not have been suspended by the SEC or the OTCBB.

                           g. The Buyer shall have received an opinion of the
Company's counsel, dated as of the Closing Date, in form, scope and substance
reasonably satisfactory to the Buyer and in substantially the same form as
EXHIBIT "E" attached hereto.

                           h. The Buyer shall have received an officer's
certificate as described in Section 6(c) above, dated as of the Closing Date.

                           i. A minimum of $4,500,000 (and a maximum of
$7,000,000) in principal amount of the Debentures shall be issued at the Closing
in consideration of the payment of cash. Any cash received by the Company as a
result of the payment of promissory notes to be paid with the proceeds of the
sale of the Debentures shall be excluded from the $4,500,000 minimum amount.

                           j. All of the Company's currently outstanding 8%
Convertible Debentures and notes (in the aggregate original principal amount of
$3,475,000, together with all accrued but unpaid interest thereon) shall have
been exchanged for Debentures at the Closing.

                           k. The Company shall have received an executed payoff
letter from HIT Credit Union ("HIT"), in form and substance satisfactory to the
Buyers, relating to the payment of the Company's indebtedness to HIT, and the
release of HIT's lien on the Company's assets.

                                       14
<PAGE>

                  7. BOARD OF DIRECTORS.

                           a. BOARD REPRESENTATION OR ATTENDANCE BY OBSERVER.
The Company agrees until such time as all of the Debentures (together with all
accrued interest thereon and all other amounts due thereunder) shall have been
fully paid or converted into Common Stock that Renn Capital Group, Inc. (the
"AGENT") shall have the right from time to time to designate a nominee to serve
as a member of the Board of Directors of the Company. In the event an Event of
Default (as defined in the Debentures) under Section 3.1 of any of the
Debentures occurs, then the Agent shall have the right to designate one (1)
additional nominee to serve as a member of the Board of Directors of the
Company. The Company will nominate and use its best efforts to secure the
election of such designee(s) as Director(s) of the Company. During such time as
Agent has not exercised such rights, the Agent shall have the right to designate
an observer, who shall be entitled to attend and participate (but not vote) in
all meetings of the Board of Directors and to receive all notices, reports,
information, correspondence and communications sent by the Company to members of
the Board of Directors. All costs and expenses incurred in connection therewith
by any such designated Director or observer, or by Agent on behalf of such
Director of observer, shall be reimbursed by the Company.

                           b. CERTAIN ABSENCES. Any such Director or observer
shall, if requested to do so, absent himself or herself from the meeting in the
event of, and so long as, the Directors are considering and acting on matters
pertaining to any rights or obligations of the Company or Agent under this
Agreement or the other agreements contemplated by this Agreement.

                           c. LIMITATION OF AUTHORITY OF PERSONS DESIGNATED AS A
DIRECTOR NOMINEE. It is provided and agreed that the actions and advice of any
person while serving pursuant to the previous paragraph as a Director or an
observer at meetings of the Board of Directors shall be construed to be the
actions and advice of that person alone and not be construed as actions of any
Buyer as to any notice of requirements or rights of any Buyer under this
Agreement, the Debentures, or any other agreement contemplated by this
Agreement, nor as action of any Buyer to approve modifications, consents,
amendments or waivers thereof; and all such actions or notices shall be deemed
actions or notices of the Buyers only when duly provided in writing and given in
accordance with the provisions of the Security Agreement.

                           d. NONLIABILITY OF THE BUYERS. The relationship
between the Company and the Buyers is, and shall at all times remain, solely
that of the Company with a purchaser of its securities. The Buyers neither
undertake nor assume any responsibility or duty to the Company to review,
inspect, supervise, pass judgment upon, or inform the Company of any matter in
connection with any phase of the Company's business, operations, or condition,
financial or otherwise. The Company shall rely entirely upon its own judgment
with respect to such matters, and any review, inspection, supervision, exercise
of judgment, or information supplied to the Company by the Buyers, or any
representative or agent of the Buyers, in connection with any such matter is for
the protection of the Buyers, and neither the Company nor any third party is
entitled to rely thereon.

                  8. GOVERNING LAW; MISCELLANEOUS.

                           a. GOVERNING LAW. THIS AGREEMENT SHALL BE ENFORCED,
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE,
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS. THE PARTIES HERETO HEREBY
SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED
IN DALLAS, TEXAS WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS AGREEMENT, THE
AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY. ALL PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. ALL PARTIES FURTHER AGREE

                                       15
<PAGE>

THAT SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED
IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT ANY PARTY'S RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW. ALL PARTIES AGREE THAT A FINAL NON-APPEALABLE
JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED
IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER.
THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER THIS AGREEMENT
SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING ATTORNEYS' FEES,
INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH DISPUTE.

                           b. COUNTERPARTS; SIGNATURES BY FACSIMILE. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original but all of which shall constitute one and the same agreement
and shall become effective when counterparts have been signed by each party and
delivered to the other party. This Agreement, once executed by a party, may be
delivered to the other party hereto by facsimile transmission of a copy of this
Agreement bearing the signature of the party so delivering this Agreement.

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

                           d. SEVERABILITY. In the event that any provision of
this Agreement is invalid or unenforceable under any applicable statute or rule
of law, then such provision shall be deemed inoperative to the extent that it
may conflict therewith and shall be deemed modified to conform to such statute
or rule of law. Any provision hereof which may prove invalid or unenforceable
under any law shall not affect the validity or enforceability of any other
provision hereof.

                           e. ENTIRE AGREEMENT; AMENDMENTS. This Agreement and
the instruments referenced herein contain the entire understanding of the
parties with respect to the matters covered herein and therein. No provision of
this Agreement may be waived or amended other than by an instrument in writing
signed by the party to be charged with enforcement.

                           f. NOTICES. Any notices required or permitted to be
given under the terms of this Agreement shall be sent by certified or registered
mail (return receipt requested) or delivered personally or by courier (including
a recognized overnight delivery service) or by facsimile and shall be effective
five days after being placed in the mail, if mailed by regular United States
mail, or upon receipt, if delivered personally or by courier (including a
recognized overnight delivery service) or by facsimile, in each case addressed
to a party. The addresses for such communications shall be:

                           If to the Company:

                           VisiJet, Inc.
                           192 Technology Drive, Suite Q
                           Irvine, California 92618
                           Attention: Laurence M. Schreiber
                           Telephone: (949) 450-1660
                           Facsimile: (949) 453-9652

         If to a Buyer: To the address set forth immediately below such Buyer's
name on the signature pages hereto.

                                       16
<PAGE>

                           With copy to:

                           Haynes and Boone, LLP
                           2505 North Plano Road, Suite 4000
                           Richardson, Texas  75082
                           Attention:  David H. Oden, Esq.
                           Telephone: (972) 739-6929
                           Facsimile: (972)-692-9029

         Each party shall provide notice to the other party of any change in
address.

                           g. SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of the parties and their successors and
assigns. Neither the Company nor any Buyer shall assign this Agreement or any
rights or obligations hereunder without the prior written consent of the other.
Notwithstanding the foregoing, subject to Section 2(f), any Buyer may assign its
rights hereunder to any person that purchases Securities in a private
transaction from a Buyer or to any of its "affiliates," as that term is defined
under the 1934 Act, without the consent of the Company.

                           h. THIRD PARTY BENEFICIARIES. This Agreement is
intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision
hereof be enforced by, any other person.

                           i. SURVIVAL. The representations and warranties of
the Company and the agreements and covenants set forth in Sections 3, 4,7 and 8
shall survive the closing hereunder notwithstanding any due diligence
investigation conducted by or on behalf of the Buyers. The Company agrees to
indemnify and hold harmless each of the Buyers and all their stockholders,
partners, members, managers, officers, directors, employees and agents for loss
or damage arising as a result of or related to any breach or alleged breach by
the Company of any of its representations, warranties and covenants set forth in
Sections 3 and 4 hereof or any of its covenants and obligations under this
Agreement, the Registration Rights Agreement, and the Security Agreement,
including advancement of expenses as they are incurred.

                           j. PUBLICITY. The Company and each of the Buyers
shall have the right to review a reasonable period of time before issuance of
any press releases, SEC, OTCBB (or other applicable trading market) or NASD
filings, or any other public statements with respect to the transactions
contemplated hereby; provided, however, that the Company shall be entitled,
without the prior approval of any of the Buyers, to make any press release or
SEC, OTCBB (or other applicable trading market) or NASD filings with respect to
such transactions as is required by applicable law and regulations (although
each of the Buyers shall be consulted by the Company in connection with any such
press release prior to its release and shall be provided with a copy thereof and
be given an opportunity to comment thereon). Subject to the foregoing, the
Company shall file with the SEC a Form 8-K disclosing the transactions herein
and attaching the relevant agreements and instruments within four (4) business
days of the Closing Date.

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

                                       17
<PAGE>

                           l. NO STRICT CONSTRUCTION. The language used in this
Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against
any party.

                           m. REMEDIES. The Company acknowledges that a breach
by it of its obligations hereunder will cause irreparable harm to the Buyers by
vitiating the intent and purpose of the transaction contemplated hereby.
Accordingly, the Company acknowledges that the remedy at law for a breach of its
obligations under this Agreement will be inadequate and agrees, in the event of
a breach or threatened breach by the Company of the provisions of this
Agreement, that the Buyers shall be entitled, in addition to all other available
remedies at law or in equity, and in addition to the penalties assessable
herein, to an injunction or injunctions restraining, preventing or curing any
breach of this Agreement and to enforce specifically the terms and provisions
hereof, without the necessity of showing economic loss and without any bond or
other security being required.

                           n. OBLIGATIONS SEVERAL NOT JOINT. The obligations of
each Buyer under this Agreement are several and not joint with the obligations
of any other Buyer, and no Buyer shall be responsible in any way for the
performance of the obligations of any other Buyer under this Agreement. Nothing
contained herein, and no action taken by any Buyer pursuant hereto, shall be
deemed to constitute the Buyers as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Buyers are
in any way acting in concert or as a group with respect to such obligations or
the transactions contemplated by this Agreement. Each Buyer shall be entitled to
independently protect and enforce its rights, including without limitation the
rights arising out of this Agreement, and it shall not be necessary for any
other Buyer to be joined as an additional party in any proceeding for such
purpose. Each Buyer has been represented by its own separate legal counsel in
their review and negotiation of this Agreement, the Debentures, the Warrants,
the Registrations Rights Agreement, the Security Agreement, and any other
documents contemplated by any of the foregoing (collectively, the "TRANSACTION
DOCUMENTS"). For reasons of administrative convenience only, Buyers and their
respective counsel have chosen to communicate with the Company through the law
firm of Haynes and Boone, LLP. Haynes and Boone, LLP does not represent all of
the Buyers but only Renaissance Capital Growth & Income Fund III, Inc.,
Renaissance US Growth Investment Trust PLC, and BFS US Special Opportunities
Trust PLC. The Company has elected to provide all Buyers 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 Buyers.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
                   ------------------------------------------

                                       18
<PAGE>

         IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
duly executed as of the date first above written.

VISIJET, INC.

By: _______________________________________
Randal A. Bailey
President

RENN CAPITAL GROUP, INC.

By: _______________________________________
Title:_____________________________________

                                       19
<PAGE>

BUYER:

___________________________________________

By: _______________________________________
Title:_____________________________________

JURISDICTION:______________________________
ADDRESS:___________________________________
        ___________________________________
        Facsimile: (____)__________________
        Telephone: (____)__________________

AGGREGATE SUBSCRIPTION AMOUNT:
        Aggregate Principal Amount of Debentures:            $_________________
        Number of Warrants:                                   _________________
        Aggregate Purchase Price:                            $_________________

                [SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]

<PAGE>

                                   EXHIBIT "A"
                                   -----------

                                FORM OF DEBENTURE

<PAGE>

                                   EXHIBIT "B"
                                   -----------

                                 FORM OF WARRANT

<PAGE>

                                   EXHIBIT "C"
                                   -----------

                      FORM OF REGISTRATION RIGHTS AGREEMENT

<PAGE>

                                   EXHIBIT "D"
                                   -----------

                           FORM OF SECURITY AGREEMENT

<PAGE>

                                   EXHIBIT "E"
                                   -----------

                              FORM OF LEGAL OPINION

<PAGE>

                               DISCLOSURE SCHEDULE<PAGE>
EXHIBIT 10.49

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THE SECURITIES MAY NOT BE
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE ACT, OR AN OPINION OF COUNSEL IN FORM,
SUBSTANCE AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS
THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT OR UNLESS SOLD PURSUANT TO RULE
144 OR REGULATION S UNDER THE ACT.

                              CONVERTIBLE DEBENTURE

Irvine, California
January 14, 2005                                          $_____________________

                  FOR VALUE RECEIVED, VISIJET, INC., a Delaware corporation
(hereinafter called the "BORROWER"), hereby promises to pay to the order of
_____________________________________or registered assigns (the "HOLDER") the
sum of _______________________________Dollars ($____________________), on
January 14, 2015 (the "MATURITY Date"), and to pay interest on the unpaid
principal balance hereof at the lesser of (a) the rate of eight percent (8%) per
annum or (b) the Maximum Rate (as defined below), from January 14, 2005, (the
"ISSUE DATE") until the same becomes due and payable, whether at maturity or
upon acceleration or by prepayment or otherwise. During any period any Event of
Default (as defined herein) has occurred and is continuing, any amount of
principal and accrued but unpaid interest on this Debenture shall bear interest
at the Maximum Rate ("DEFAULT INTEREST"). During any period any Event of Default
(as defined herein) has occurred and is continuing, any amount of principal and
accrued but unpaid interest on this Debenture shall bear interest at the rate of
twenty percent (20%) per annum ("DEFAULT INTEREST"). Interest shall commence
accruing on the Issue Date, shall be computed on the basis of a 365-day year and
the actual number of days elapsed and shall be payable quarterly on March 31,
June 30, September 30 and December 31 of each year beginning on March 31, 2005.
All payments due hereunder (to the extent not converted into common stock,
$0.001 par value per share, of the Borrower (the "COMMON STOCK") in accordance
with the terms hereof) shall be made in lawful money of the United States of
America. All payments shall be made at such address as the Holder shall
hereafter give to the Borrower by written notice made in accordance with the
provisions of this Debenture. Whenever any amount expressed to be due by the
terms of this Debenture is due on any day which is not a business day, the same
shall instead be due on the next succeeding day which is a business day and, in
the case of any interest payment date which is not the date on which this
Debenture is paid in full, the extension of the due date thereof shall not be
taken into account for purposes of determining the amount of interest due on
such date. As used in this Debenture, the term "business day" shall mean any day
other than a Saturday, Sunday or a day on which commercial banks in the city of
New York, New York are authorized or required by law or executive order to
remain closed. Each capitalized term used herein, and not otherwise defined,
shall have the meaning ascribed thereto in that certain Securities Purchase
Agreement, dated January 14, 2005, pursuant to which this Debenture was
originally issued (the "PURCHASE AGREEMENT"). This Debenture is subject to the
Amended and Restated Security Agreement, dated January 14, 2005 (the "SECURITY
AGREEMENT"), referred to in the Purchase Agreement.

                  As used herein, "MAXIMUM RATE" means with respect to the
holder hereof, the maximum non-usurious rate of interest which, under all legal
requirements, such holder is permitted to contract for, charge, take, reserve,
or receive on this Debenture. If the laws of the State of Texas are applicable
for purposes of determining the "Maximum Rate," then such term means the "weekly
ceiling" from time to time in effect under Texas Finance Code ss.303.001, as
amended, as limited by Texas Finance Code ss.303.009.

                                       1
<PAGE>

         The following terms shall apply to this Debenture:

                          ARTICLE I. CONVERSION RIGHTS

         1.1 CONVERSION RIGHTS.

                  (a) GENERAL. The Holder shall have the right from time to
time, and at any time, except as otherwise provided herein, to convert all or
any part of the outstanding and unpaid principal amount and accrued but unpaid
interest of this Debenture into fully paid and non-assessable shares of Common
Stock, as such Common Stock exists on the Issue Date, or any shares of capital
stock or other securities of the Borrower into which such Common Stock shall
hereafter be changed or reclassified at the Conversion Price (as defined
herein).

                  (b) CONVERSION AMOUNT. The number of shares of Common Stock to
be issued upon each conversion of this Debenture shall be equal to (i) the
Conversion Amount (as defined below) divided by (ii) the applicable Conversion
Price then in effect on the date specified in the notice of conversion, in the
form attached hereto as Exhibit A (the "NOTICE OF CONVERSION"), delivered to the
Borrower by the Holder in accordance with Section 1.4 below; provided that the
Notice of Conversion is submitted by facsimile (or by other means resulting in,
or reasonably expected to result in, notice) to the Borrower before 6:00 p.m.,
Dallas, Texas time on such conversion date (the "CONVERSION DATE"). The term
"CONVERSION AMOUNT" means, with respect to any conversion of this Debenture, the
sum of (1) the principal amount of this Debenture to be converted in such
conversion plus (2) accrued and unpaid interest, if any, on such principal
amount at the interest rates provided in this Debenture to the Conversion Date
plus (3) Default Interest, if any, on the amounts referred to in the immediately
preceding clauses (1) and/or (2).

                  (c) CONVERSION LIMIT. In no event shall the Holder be entitled
to convert any portion of this Debenture in excess of that portion of this
Debenture upon conversion of which the sum of (i) the number of shares of Common
Stock beneficially owned by the Holder and its affiliates (other than shares of
Common Stock which may be deemed beneficially owned through the ownership of the
unconverted portion of the Debentures or the unexercised or unconverted portion
of any other security of the Borrower (including, without limitation, the
warrants issued by the Borrower pursuant to the Purchase Agreement) subject to a
limitation on conversion or exercise analogous to the limitations contained
herein) and (ii) the number of shares of Common Stock issuable upon the
conversion of the portion of this Debenture with respect to which the
determination of this proviso is being made, would result in beneficial
ownership by the Holder and its affiliates of more than 4.9999% of the
outstanding shares of Common Stock. For purposes of this Section 1.1(c),
beneficial ownership shall be determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended, and Regulations 13D-G thereunder,
except as otherwise provided in clause (i) above. The Holder may waive the
provisions of this Section 1.1(c) as to itself (and solely as to itself) (i)
upon not less than 75 days prior notice to the Borrower, and the provisions of
this Section 1.1(c) shall continue to apply until such 75th day (or such later
date as may be specified in such notice of waiver) or (ii) upon the occurrence
of any event under Section 1.6(b). No conversion in violation of Section 1.1(c),
but otherwise in accordance with this Debenture, shall affect the status of the
Common Stock issued upon such conversion as validly issued, fully-paid and
nonassessable.

         1.2 CONVERSION PRICE.

                  (a) CALCULATION OF CONVERSION PRICE. The Conversion Price
shall mean thirty-five cents ($0.35), subject to adjustment as provided herein.

                                       2
<PAGE>

                  (b) MARKET PRICE. The term "MARKET PRICE" means, as of any
date, (i) the average of the last reported sale prices for the shares of Common
Stock on the OTCBB for the five (5) Trading Days immediately preceding such date
as reported by Bloomberg, or (ii) if the OTCBB is not the principal trading
market for the shares of Common Stock, the average of the last reported sale
prices on the principal trading market for the Common Stock during the same
period as reported by Bloomberg, or (iii) if market value cannot be calculated
as of such date on any of the foregoing bases, the Market Price shall be the
fair market value as reasonably determined in good faith by (x) the Board of
Directors of the Borrower or, (y) at the option of a majority-in-interest of the
holders of the outstanding Debentures by an independent investment bank of
nationally recognized standing in the valuation of businesses similar to the
business of the Borrower. The manner of determining the Market Price of the
Common Stock set forth in the foregoing definition shall apply with respect to
any other security in respect of which a determination as to market value must
be made hereunder.

                  (c) TRADING DAY. The term "TRADING DAY" shall mean any day on
which the Common Stock is traded for any period on the OTCBB, or on the
principal securities exchange or other securities market on which the Common
Stock is then being traded.

         1.3 AUTHORIZED SHARES. The Borrower covenants that during the period
the conversion right exists, the Borrower will reserve from its authorized and
unissued Common Stock a sufficient number of shares, free from preemptive
rights, to provide for the issuance of Common Stock upon the full conversion of
this Debenture and the other Debentures issued pursuant to the Purchase
Agreement (the "RESERVED AMOUNT"). If the Borrower shall issue any securities or
make any change to its capital structure which would change the number of shares
of Common Stock into which the Debentures shall be convertible at the then
current Conversion Price, the Borrower shall at the same time make proper
provision so that thereafter there shall be a sufficient number of shares of
Common Stock authorized and reserved, free from preemptive rights, for
conversion of the outstanding Debentures. The Borrower (i) acknowledges that it
has irrevocably instructed its transfer agent to issue certificates for the
Common Stock issuable upon conversion of this Debenture, and (ii) agrees that
its issuance of this Debenture shall constitute full authority to its officers
and agents who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for shares of Common Stock in
accordance with the terms and conditions of this Debenture.

         1.4 METHOD OF CONVERSION.

                  (a) MECHANICS OF CONVERSION. Subject to Section 1.1, this
Debenture may be converted by the Holder in whole or in part at any time from
time to time after the Issue Date, by (i) submitting to the Borrower a Notice of
Conversion (by facsimile or other reasonable means of communication dispatched
on the Conversion Date prior to 6:00 p.m., Dallas, Texas time) and (ii) subject
to Section 1.4(b), surrendering this Debenture at the principal office of the
Borrower.

                  (b) SURRENDER OF DEBENTURE UPON CONVERSION. Notwithstanding
anything to the contrary set forth herein, upon conversion of this Debenture in
accordance with the terms hereof, the Holder shall not be required to physically
surrender this Debenture to the Borrower unless the entire unpaid principal
amount of this Debenture is so converted. The Holder and the Borrower shall
maintain records showing the principal amount so converted and the dates of such
conversions or shall use such other method, reasonably satisfactory to the
Holder and the Borrower, so as not to require physical surrender of this
Debenture upon each such conversion. In the event of any dispute or discrepancy,
such records of the Borrower shall be controlling and determinative in the
absence of manifest error. Notwithstanding the foregoing, if any portion of this
Debenture is converted as aforesaid, the Holder may not transfer this Debenture
unless the Holder first physically surrenders this Debenture to the Borrower,
whereupon the Borrower will forthwith issue and deliver upon the order of the
Holder a new Debenture of like tenor, registered as the Holder (upon payment by

                                       3
<PAGE>

the Holder of any applicable transfer taxes) may request, representing in the
aggregate the remaining unpaid principal amount of this Debenture. The Holder
and any assignee, by acceptance of this Debenture, acknowledge and agree that,
by reason of the provisions of this paragraph, following conversion of a portion
of this Debenture, the unpaid and unconverted principal amount of this Debenture
represented by this Debenture may be less than the amount stated on the face
hereof.

                  (c) DELIVERY OF COMMON STOCK UPON CONVERSION. Upon receipt by
the Borrower from the Holder of a facsimile transmission (or other reasonable
means of communication) of a Notice of Conversion meeting the requirements for
conversion as provided in this Section 1.4, the Borrower shall issue and deliver
or cause to be issued and delivered to or upon the order of the Holder
certificates for the Common Stock issuable upon such conversion within two (2)
business days after such receipt (and, solely in the case of conversion of the
entire unpaid principal amount hereof, surrender of this Debenture) (such second
business day being hereinafter referred to as the "DEADLINE") in accordance with
the terms hereof and the Purchase Agreement.

                  (d) OBLIGATION OF BORROWER TO DELIVER COMMON STOCK. Upon
delivery by the Holder to the Borrower of a Notice of Conversion, the Holder
shall be deemed to be the holder of record of the Common Stock issuable upon
such conversion, the outstanding principal amount and the amount of accrued and
unpaid interest on this Debenture shall be reduced to reflect such conversion,
and, unless the Borrower defaults on its obligations under this Article I, all
rights with respect to the portion of this Debenture being so converted shall
forthwith terminate except the right to receive the Common Stock or other
securities, cash or other assets, as herein provided, on such conversion. If the
Holder shall have given a Notice of Conversion as provided herein, the
Borrower's obligation to issue and deliver the certificates for Common Stock
shall be absolute and unconditional, irrespective of the absence of any action
by the Holder to enforce the same, any waiver or consent with respect to any
provision thereof, the recovery of any judgment against any person or any action
to enforce the same, any failure or delay in the enforcement of any other
obligation of the Borrower to the holder of record, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged breach by the
Holder of any obligation to the Borrower, and irrespective of any other
circumstance which might otherwise limit such obligation of the Borrower to the
Holder in connection with such conversion. The Conversion Date specified in the
Notice of Conversion shall be the Conversion Date so long as the Notice of
Conversion is received by the Borrower before 6:00 p.m., Dallas, Texas time, on
such date.

                  (e) DELIVERY OF COMMON STOCK BY ELECTRONIC TRANSFER. In lieu
of delivering physical certificates representing the Common Stock issuable upon
conversion, provided the Borrower's transfer agent is participating in the
Depository Trust Company ("DTC") Fast Automated Securities Transfer ("FAST")
program, upon request of the Holder and its compliance with the provisions
contained in Section 1.1 and in this Section 1.4, the Borrower shall use its
best efforts to cause its transfer agent to electronically transmit the Common
Stock issuable upon conversion to the Holder by crediting the account of
Holder's Prime Broker with DTC through its Deposit Withdrawal Agent Commission
("DWAC") system.

                  (f) FAILURE TO DELIVER COMMON STOCK PRIOR TO DEADLINE. Without
in any way limiting the Holder's right to pursue other remedies, including
actual damages and/or equitable relief, the parties agree that if delivery of
the Common Stock (including without a restrictive legend as required under
Section 1.5(b) herein) issuable upon conversion of this Debenture is more than
two (2) business days after the Deadline Borrower shall pay to such Holder, in
cash, as liquidated damages and not as a penalty, for each $1,000 of principal
amount being converted, $10 per business day (increasing to $20 per business day
after 5 business days after such damages begin to accrue) for each business day
after such second business day until such certificates are delivered. Such cash
amount shall be paid to Holder by the fifth (5th) day of the month following the

                                       4
<PAGE>

month in which it has accrued or, at the option of the Holder (by written notice
to the Borrower by the first day of the month following the month in which it
has accrued), shall be added to the principal amount of this Debenture, in which
event interest shall accrue thereon in accordance with the terms of this
Debenture and such additional principal amount shall be convertible into Common
Stock in accordance with the terms of this Debenture.

         1.5 CONCERNING THE SHARES.

                  (a) LEGEND. The shares of Common Stock issuable upon
conversion of this Debenture may not be sold or transferred unless (i) such
shares are sold pursuant to an effective registration statement under the Act or
(ii) the Borrower or its transfer agent shall have been furnished with an
opinion of counsel (which opinion shall be in form, substance and scope
customary for opinions of counsel in comparable transactions) to the effect that
the shares to be sold or transferred may be sold or transferred pursuant to an
exemption from such registration or (iii) such shares are sold or transferred
pursuant to Rule 144 under the Act (or a successor rule) ("RULE 144") or (iv)
such shares are transferred to an "affiliate" (as defined in Rule 144) of the
Borrower who agrees to sell or otherwise transfer the shares only in accordance
with this Section 1.5 and who is an Accredited Investor (as defined in the
Purchase Agreement). Except as otherwise provided in the Purchase Agreement (and
subject to the removal provisions set forth below), until such time as the
shares of Common Stock issuable upon conversion of this Debenture have been
registered under the Act as contemplated by the Amended and Restated
Registration Rights Agreement, dated January 14, 2005, referred to in the
Purchase Agreement (the "REGISTRATION RIGHTS AGREEMENT") or otherwise may be
sold pursuant to Rule 144 without any restriction as to the number of securities
as of a particular date that can then be immediately sold, each certificate for
shares of Common Stock issuable upon conversion of this Debenture that has not
been so included in an effective registration statement or that has not been
sold pursuant to an effective registration statement or an exemption that
permits removal of the legend, shall bear a legend substantially in the
following form, as appropriate:

         "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
         REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES
         MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
         REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION
         OF COUNSEL IN FORM, SUBSTANCE AND SCOPE CUSTOMARY FOR OPINIONS OF
         COUNSEL IN COMPARABLE TRANSACTIONS THAT REGISTRATION IS NOT REQUIRED
         UNDER SAID ACT UNLESS SOLD PURSUANT TO RULE 144 OR REGULATION S UNDER
         SAID ACT."

                  (b) REMOVAL OF LEGEND. The legend set forth above shall be
removed and the Borrower shall issue to the Holder a new certificate therefor
free of any transfer legend if (i) the Borrower or its transfer agent shall have
received an opinion of counsel, in form, substance and scope customary for
opinions of counsel in comparable transactions, to the effect that a public sale
or transfer of such Common Stock may be made without registration under the Act
and the shares are so sold or transferred, (ii) such Holder provides the
Borrower or its transfer agent with reasonable assurances that the Common Stock
issuable upon conversion of this Debenture (to the extent such securities are
deemed to have been acquired on the same date) can be sold pursuant to Rule 144
or (iii) in the case of the Common Stock issuable upon conversion of this
Debenture, such security is registered for sale by the Holder under an effective
registration statement filed under the Act or otherwise may be sold pursuant to
Rule 144 without any restriction as to the number of securities as of a
particular date that can then be immediately sold. The Borrower shall cause its
counsel to issue a legal opinion to the Borrower's transfer agent promptly after
the effective date of any registration statement under the Act registering the

                                       5
<PAGE>

resale of the Common Stock issuable upon conversion of the Debentures if
required by the Borrower's transfer agent to effect the removal of the legend
hereunder. Nothing in this Debenture shall (i) limit the Borrower's obligation
under the Registration Rights Agreement or (ii) affect in any way the Holder's
obligations to comply with applicable prospectus delivery requirements upon the
resale of the securities referred to herein.

         1.6 EFFECT OF CERTAIN EVENTS.

                  (a) EFFECT OF MERGER, CONSOLIDATION, ETC. At the option of the
Holder, the sale, conveyance or disposition of all or substantially all of the
assets of the Borrower, the effectuation by the Borrower of a transaction or
series of related transactions in which more than 50% of the voting power of the
Borrower is disposed of, or the consolidation, merger or other business
combination of the Borrower with or into any other Person (as defined below) or
Persons when the Borrower is not the survivor shall either: (i) be deemed to be
an Event of Default under Section 3.4 pursuant to which the Borrower shall be
required to pay to the Holder upon the consummation of and as a condition to
such transaction an amount equal to the Default Amount (as defined in Article
III) or (ii) be treated pursuant to Section 1.6(b) hereof. "PERSON" shall mean
any individual, corporation, limited liability company, partnership,
association, trust or other entity or organization.

                  (b) ADJUSTMENT DUE TO MERGER, CONSOLIDATION, ETC. If, at any
time when this Debenture is issued and outstanding and prior to conversion of
all of the Debentures, there shall be any merger, consolidation, exchange of
shares, recapitalization, reorganization, or other similar event, as a result of
which shares of Common Stock of the Borrower shall be changed into the same or a
different number of shares of another class or classes of stock or securities of
the Borrower or another entity, or in case of any sale or conveyance of all or
substantially all of the assets of the Borrower other than in connection with a
plan of complete liquidation of the Borrower, then the Holder of this Debenture
shall thereafter have the right to receive upon conversion of this Debenture,
upon the basis and upon the terms and conditions specified herein and in lieu of
the shares of Common Stock immediately theretofore issuable upon conversion,
such stock, securities or assets which the Holder would have been entitled to
receive in such transaction had this Debenture been converted in full
immediately prior to such transaction (without regard to any limitations on
conversion set forth herein), and in any such case appropriate provisions shall
be made with respect to the rights and interests of the Holder of this Debenture
to the end that the provisions hereof (including, without limitation, provisions
for adjustment of the Conversion Price and of the number of shares issuable upon
conversion of the Debenture) shall thereafter be applicable, as nearly as may be
practicable in relation to any securities or assets thereafter deliverable upon
the conversion hereof. The Borrower shall not effect any transaction described
in this Section 1.6(b) unless (a) it first gives, to the extent practicable,
thirty (30) days prior written notice (but in any event at least fifteen (15)
days prior written notice) of the record date of the special meeting of
stockholders to approve, or if there is no such record date, the consummation
of, such merger, consolidation, exchange of shares, recapitalization,
reorganization or other similar event or sale of assets (during which time the
Holder shall be entitled to convert this Debenture notwithstanding Section
1.1(c)) and (b) the resulting successor or acquiring entity (if not the
Borrower) assumes by written instrument the obligations of this Section 1.6(b).
The above provisions shall similarly apply to successive consolidations,
mergers, sales, transfers or share exchanges.

                  (c) ADJUSTMENT DUE TO DISTRIBUTION. If the Borrower shall
declare or make any distribution of its assets (or rights to acquire its assets)
to holders of Common Stock as a dividend, stock repurchase, by way of return of
capital or otherwise (including any dividend or distribution to the Borrower's
shareholders in cash or shares (or rights to acquire shares) of capital stock of
a subsidiary (i.e., a spin-off)) (a "DISTRIBUTION"), then the Holder of this
Debenture shall be entitled, upon any conversion of this Debenture after the
date of record for determining shareholders entitled to such Distribution, to

                                       6
<PAGE>

receive the amount of such assets which would have been payable to the Holder
with respect to the shares of Common Stock issuable upon such conversion had
such Holder been the holder of such shares of Common Stock on the record date
for the determination of shareholders entitled to such Distribution.

                  (d) ADJUSTMENT DUE TO DILUTIVE ISSUANCE. If, at any time when
any Debentures are issued and outstanding, the Borrower issues or sells, or in
accordance with this Section 1.6(d) hereof is deemed to have issued or sold, any
shares of Common Stock for no consideration or for a consideration per share
(before deduction of reasonable expenses or commissions or underwriting
discounts or allowances in connection therewith) less than the Conversion Price
in effect on the date of such issuance (or deemed issuance) of such shares of
Common Stock (a "DILUTIVE ISSUANCE"), then immediately upon the Dilutive
Issuance, the Conversion Price will be reduced to the amount of the
consideration per share received by the Borrower in such Dilutive Issuance;
provided that only one adjustment will be made for each Dilutive Issuance. No
adjustment to the Conversion Price shall have the effect of increasing the
Conversion Price above the Conversion Price in effect immediately prior to such
adjustment.

                  (e) EFFECT ON CONVERSION PRICE OF CERTAIN EVENTS. For purposes
of determining the adjusted Conversion Price under Section 1.6(d) hereof, the
following will be applicable:

                           (i) ISSUANCE OF RIGHTS OR OPTIONS. If the Borrower in
any manner issues or grants any warrants, rights or options, whether or not
immediately exercisable, to subscribe for or to purchase Common Stock or other
securities convertible into or exchangeable for Common Stock ("CONVERTIBLE
SECURITIES") (such warrants, rights and options to purchase Common Stock or
Convertible Securities are hereinafter referred to as "OPTIONS") and the price
per share for which Common Stock is issuable upon the exercise of such Options
is less than the Conversion Price on the date of issuance or grant of such
Options, then the maximum total number of shares of Common Stock issuable upon
the exercise of all such Options will, as of the date of the issuance or grant
of such Options, be deemed to be outstanding and to have been issued and sold by
the Borrower for such price per share. For purposes of the preceding sentence,
the "price per share for which Common Stock is issuable upon the exercise of
such Options" is determined by dividing (i) the total amount, if any, received
or receivable by the Borrower as consideration for the issuance or granting of
all such Options, plus the minimum aggregate amount of additional consideration,
if any, payable to the Borrower upon the exercise of all such Options, plus, in
the case of Convertible Securities issuable upon the exercise of such Options,
the minimum aggregate amount of additional consideration payable upon the
conversion or exchange thereof at the time such Convertible Securities first
become convertible or exchangeable, by (ii) the maximum total number of shares
of Common Stock issuable upon the exercise of all such Options (assuming full
conversion of Convertible Securities, if applicable). No further adjustment to
the Conversion Price will be made upon the actual issuance of such Common Stock
upon the exercise of such Options or upon the conversion or exchange of
Convertible Securities issuable upon exercise of such Options.

                           (ii) ISSUANCE OF CONVERTIBLE SECURITIES. If the
Borrower in any manner issues or sells any Convertible Securities, whether or
not immediately convertible (other than where the same are issuable upon the
exercise of Options) and the price per share for which Common Stock is issuable
upon such conversion or exchange is less than the Conversion Price on the date
of issuance, then the maximum total number of shares of Common Stock issuable
upon the conversion or exchange of all such Convertible Securities will, as of
the date of the issuance of such Convertible Securities, be deemed to be
outstanding and to have been issued and sold by the Borrower for such price per
share. For the purposes of the preceding sentence, the "price per share for
which Common Stock is issuable upon such conversion or exchange" is determined
by dividing (i) the total amount, if any, received or receivable by the Borrower
as consideration for the issuance or sale of all such Convertible Securities,
plus the minimum aggregate amount of additional consideration, if any, payable

                                       7
<PAGE>

to the Borrower upon the conversion or exchange thereof at the time such
Convertible Securities first become convertible or exchangeable, by (ii) the
maximum total number of shares of Common Stock issuable upon the conversion or
exchange of all such Convertible Securities. No further adjustment to the
Conversion Price will be made upon the actual issuance of such Common Stock upon
conversion or exchange of such Convertible Securities.

                           (iii) CHANGE IN OPTION PRICE OR CONVERSION RATE. If
there is a change at any time in (i) the amount of additional consideration
payable to the Borrower upon the exercise of any Options; (ii) the amount of
additional consideration, if any, payable to the Borrower upon the conversion or
exchange of any Convertible Securities; or (iii) the rate at which any
Convertible Securities are convertible into or exchangeable for Common Stock
(other than under or by reason of provisions designed to protect against
dilution), the Conversion Price in effect at the time of such change will be
readjusted to the Conversion Price which would have been in effect at such time
had such Options or Convertible Securities still outstanding provided for such
changed additional consideration or changed conversion rate, as the case may be,
at the time initially granted, issued or sold.

                           (iv) TREATMENT OF EXPIRED OPTIONS AND UNEXERCISED
CONVERTIBLE SECURITIES. If, in any case, the total number of shares of Common
Stock issuable upon exercise of any Option or upon conversion or exchange of any
Convertible Securities is not, in fact, issued and the rights to exercise such
Option or to convert or exchange such Convertible Securities shall have expired
or terminated, the Conversion Price then in effect will be readjusted to the
Conversion Price which would have been in effect at the time of such expiration
or termination had such Option or Convertible Securities, to the extent
outstanding immediately prior to such expiration or termination (other than in
respect of the actual number of shares of Common Stock issued upon exercise or
conversion thereof), never been issued.

                           (v) CALCULATION OF CONSIDERATION RECEIVED. If any
Common Stock, Options or Convertible Securities are issued, granted or sold for
cash, the consideration received therefor for purposes of this Debenture will be
the amount received by the Borrower therefor, before deduction of reasonable
commissions, underwriting discounts or allowances or other reasonable expenses
paid or incurred by the Borrower in connection with such issuance, grant or
sale. In case any Common Stock, Options or Convertible Securities are issued or
sold for a consideration part or all of which shall be other than cash, the
amount of the consideration other than cash received by the Borrower will be the
fair value of such consideration, except where such consideration consists of
securities, in which case the amount of consideration received by the Borrower
will be the Market Price thereof as of the date of receipt. In case any Common
Stock, Options or Convertible Securities are issued in connection with any
acquisition, merger or consolidation in which the Borrower is the surviving
corporation, the amount of consideration therefor will be deemed to be the fair
value of such portion of the net assets and business of the non-surviving
corporation as is attributable to such Common Stock, Options or Convertible
Securities, as the case may be. The fair value of any consideration other than
cash or securities will be determined in good faith by the Board of Directors of
the Borrower.

                           (vi) EXCEPTIONS TO ADJUSTMENT OF CONVERSION PRICE. No
adjustment to the Conversion Price will be made (i) upon the exercise of any
warrants, options or convertible securities granted, issued and outstanding on
the date of issuance of this Debenture or (ii) upon the conversion of the
Debentures.

                  (f) SUBDIVISION OR COMBINATION OF COMMON STOCK. If the
Borrower at any time subdivides (by any stock split, stock dividend,
recapitalization, reorganization, reclassification or otherwise) the shares of
Common Stock acquirable hereunder into a greater number of shares, then, after
such date of record for effecting such subdivision, the Conversion Price in
effect immediately prior to such subdivision will be proportionately reduced. If

                                       8
<PAGE>

the Borrower at any time combines (by any reverse stock split, recapitalization,
reorganization, reclassification or otherwise) the shares of Common Stock
acquirable hereunder into a smaller number of shares, then, after such date of
record for effecting such combination, the Conversion Price in effect
immediately prior to such subdivision will be proportionately increased.

                  (g) NOTICE OF ADJUSTMENTS. Upon the occurrence of each
adjustment or readjustment of the Conversion Price as a result of the events
described in this Section 1.6, the Borrower, at its expense, shall promptly
compute such adjustment or readjustment and prepare and furnish to the Holder a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based. The Borrower
shall, upon the written request at any time of the Holder, furnish to such
Holder a like certificate setting forth (i) such adjustment or readjustment,
(ii) the Conversion Price at the time in effect and (iii) the number of shares
of Common Stock and the amount, if any, of other securities or property which at
the time would be received upon conversion of the Debenture.

         1.7 STATUS AS SHAREHOLDER.

                  (a) DEEMED OWNER; RESCISSION. Upon submission of a Notice of
Conversion by a Holder, (i) the shares covered thereby (other than the shares,
if any, which cannot be issued because their issuance would exceed such Holder's
allocated portion of the Reserved Amount) shall be deemed converted into shares
of Common Stock and (ii) the Holder's rights as a Holder of such converted
portion of this Debenture shall cease and terminate, excepting only the right to
receive certificates for such shares of Common Stock and to any remedies
provided herein or otherwise available at law or in equity to such Holder
because of a failure by the Borrower to comply with the terms of this Debenture.
Notwithstanding the foregoing, if a Holder has not received certificates for all
shares of Common Stock prior to the third (3rd) business day after the Deadline
with respect to a conversion of any portion of this Debenture for any reason,
then the Holder may elect at its option to regain the rights of a Holder of this
Debenture with respect to such attempted converted portions of this Debenture
and the Borrower shall, as soon as practicable, return such attempted converted
Debenture to the Holder or, if the Debenture has not been surrendered, adjust
its records to reflect that such portion of this Debenture has not been
converted. In all cases, the Holder shall retain all of its rights and remedies
for the Borrower's failure to convert this Debenture.

                  (b) COMPENSATION FOR BUY-IN ON FAILURE TO TIMELY DELIVER
CERTIFICATES UPON CONVERSION. In addition to any other rights available to the
Holder, if the Borrower fails for any reason to deliver to the Holder such
certificate or certificates pursuant to Sections 1.4 and 1.5 by the third (3rd)
business day after the Deadline, and if after such third business day after the
Deadline the Holder is required by its brokerage firm to purchase (in an open
market transaction or otherwise) Common Stock to deliver in satisfaction of a
sale by such Holder of Common Stock which the Holder anticipated receiving upon
such conversion (a "BUY-IN"), then the Borrower shall (i) pay in cash to the
Holder (in addition to any remedies available to or elected by the Holder) the
amount by which (x) the Holder's total purchase price (including brokerage
commissions, if any) for the Common Stock so purchased exceeds (y) the product
of (1) the aggregate number of shares of Common Stock that such Holder
anticipated receiving from the conversion at issue multiplied by (2) the actual
sale price of the Common Stock at the time of the sale (including brokerage
commissions, if any) giving rise to such purchase obligation and (ii) at the
option of the Holder, either reissue Debentures in principal amount equal to the
principal amount of the attempted conversion or deliver to the Holder the number
of shares of Common Stock that would have been issued had the Borrower timely
complied with its delivery requirements under Sections 1.4 and 1.5. The Holder
shall provide the Borrower written notice indicating the amounts payable to the
Holder in respect of the Buy-In.

                                       9
<PAGE>

                         ARTICLE II. CERTAIN COVENANTS

         2.1 DISTRIBUTIONS ON CAPITAL STOCK. So long as the Borrower shall have
any obligation under this Debenture, the Borrower shall not, without the written
consent of holders of at least seventy-five percent (75%) of the
then-outstanding principal amount of Debentures issued pursuant to the Purchase
Agreement, (a) pay, declare or set apart for such payment, any dividend or other
distribution (whether in cash, property or other securities) on shares of
capital stock other than dividends on shares of Common Stock solely in the form
of additional shares of Common Stock or (b) directly or indirectly or through
any subsidiary make any other payment or distribution in respect of its capital
stock except for distributions pursuant to any shareholders' rights plan which
is approved by a majority of the Borrower's disinterested directors.

         2.2 RESTRICTION ON STOCK REPURCHASES. So long as the Borrower shall
have any obligation under this Debenture, the Borrower shall not, without the
written consent of holders of at least seventy-five percent (75%) of the
then-outstanding principal amount of Debentures issued pursuant to the Purchase
Agreement, redeem, repurchase or otherwise acquire (whether for cash or in
exchange for property or other securities or otherwise) in any one transaction
or series of related transactions any shares of capital stock of the Borrower or
any warrants, rights or options to purchase or acquire any such shares.

         2.3 BORROWINGS. So long as the Borrower shall have any obligation under
this Debenture, the Borrower shall not, without the written consent of holders
of at least seventy-five percent (75%) of the then-outstanding principal amount
of Debentures issued pursuant to the Purchase Agreement, create, incur, assume
or suffer to exist any liability for borrowed money, except (a) borrowings in
existence or committed on the date hereof and of which the Borrower has informed
Holder in writing prior to the date hereof, (b) indebtedness to trade creditors
or financial institutions incurred in the ordinary course of business or (c)
borrowings, the proceeds of which shall be used to repay this Debenture.

         2.4 SALE OF ASSETS. So long as the Borrower shall have any obligation
under this Debenture, the Borrower shall not, without the written consent of
holders of at least seventy-five percent (75%) of the then-outstanding principal
amount of Debentures issued pursuant to the Purchase Agreement, sell, lease or
otherwise dispose of any significant portion of its assets outside the ordinary
course of business. Any consent to the disposition of any assets may be
conditioned on a specified use of the proceeds of disposition.

         2.5 ADVANCES AND LOANS. So long as the Borrower shall have any
obligation under this Debenture, the Borrower shall not, without the written
consent of holders of at least seventy-five percent (75%) of the
then-outstanding principal amount of Debentures issued pursuant to the Purchase
Agreement, lend money, give credit or make advances to any person, firm, joint
venture or corporation, including, without limitation, officers, directors,
employees, subsidiaries and affiliates of the Borrower, except loans, credits or
advances (a) in existence or committed on the Issue Date, (b) made in the
ordinary course of business or (c) not in excess of an aggregate of $50,000.

         2.6 CONTINGENT LIABILITIES. So long as the Borrower shall have any
obligation under this Debenture, the Borrower shall not, without the written
consent of holders of at least seventy-five percent (75%) of the
then-outstanding principal amount of Debentures issued pursuant to the Purchase
Agreement, assume, guarantee, endorse, contingently agree to purchase or
otherwise become liable upon the obligation of any person, firm, partnership,
joint venture or corporation, except by the endorsement of negotiable
instruments for deposit or collection and except assumptions, guarantees,
endorsements and contingencies (a) in existence or committed on the Issue Date,
or (b) made in the ordinary course of business.

                                       10
<PAGE>

                         ARTICLE III. EVENTS OF DEFAULT

         If any of the following events of default (each, an "EVENT OF DEFAULT")
shall occur:

         3.1 FAILURE TO PAY PRINCIPAL OR INTEREST. The Borrower fails to pay (or
shall state in writing an intention not to pay or its inability to pay) the
principal hereof or interest thereon when due on this Debenture, whether at
maturity, upon acceleration or otherwise, including, without limitation, Article
V hereof;

         3.2 CONVERSION AND THE SHARES. The Borrower fails to issue shares of
Common Stock to the Holder (or announces or threatens that it will not honor its
obligation to do so) upon exercise by the Holder of the conversion rights of the
Holder in accordance with the terms of this Debenture, fails to transfer or
cause its transfer agent to transfer (electronically or in certificated form)
any certificate for shares of Common Stock issued to the Holder upon conversion
of or otherwise pursuant to this Debenture as and when required by this
Debenture, or fails to remove any restrictive legend (or to withdraw any stop
transfer instructions in respect thereof) on any certificate for any shares of
Common Stock issued to the Holder upon conversion of or otherwise pursuant to
this Debenture as and when required by this Debenture or the Registration Rights
Agreement (or makes any announcement, statement or threat that it does not
intend to honor the obligations described in this paragraph) and any such
failure shall continue uncured (or any announcement, statement or threat not to
honor its obligations shall not be rescinded in writing) for ten (10) days after
the Borrower shall have been notified thereof in writing by the Holder;

         3.3 FAILURE TO TIMELY FILE REGISTRATION OR EFFECT REGISTRATION. The
Borrower fails to file a pre-effective amendment to the Registration Statement
on Form SB-2, SEC File Number 333-120449, (the "REGISTRATION STATEMENT") by
January 31, 2005 or obtain effectiveness with the Securities and Exchange
Commission of the Registration Statement (as amended) within ninety (90) days
following the Issue Date or such Registration Statement lapses in effect (or
sales cannot otherwise be made thereunder effective, whether by reason of the
Borrower's failure to amend or supplement the prospectus included therein in
accordance with the Registration Rights Agreement or otherwise) for more than
twenty (20) consecutive days or forty (40) days in any twelve month period after
the Registration Statement becomes effective;

         3.4 BREACH OF COVENANTS. The Borrower breaches any material covenant or
other material term or condition contained in this Debenture, the Purchase
Agreement, the Registration Rights Agreement or the Security Agreement and such
breach continues for a period of ten (10) days after written notice thereof to
the Borrower from the Holder;

         3.5 BREACH OF REPRESENTATIONS AND WARRANTIES. Any representation or
warranty of the Borrower made herein or in any agreement, statement or
certificate given in writing pursuant hereto or in connection herewith
(including, without limitation, the Purchase Agreement and the Registration
Rights Agreement), shall be false or misleading in any material respect when
made and the breach of which has (or with the passage of time will have) a
material adverse effect on the rights of the Holder with respect to this
Debenture, the Purchase Agreement or the Registration Rights Agreement;

         3.6 RECEIVER OR TRUSTEE. The Borrower or any subsidiary of the Borrower
shall make an assignment for the benefit of creditors, or apply for or consent
to the appointment of a receiver or trustee for it or for a substantial part of
its property or business, or such a receiver or trustee shall otherwise be
appointed;

         3.7 JUDGMENTS. Any money judgment, writ or similar process shall be
entered or filed against the Borrower or any subsidiary of the Borrower or any
of its property or other assets for more than $50,000, and shall remain

                                       11
<PAGE>

unvacated, unbonded or unstayed for a period of twenty (20) days unless
otherwise consented to by the Holder, which consent will not be unreasonably
withheld;

         3.8 BANKRUPTCY. Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings for relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by or against the Borrower or any
subsidiary of the Borrower;

         3.9 DELISTING OF COMMON STOCK. The Borrower shall fail to maintain the
listing of the Common Stock on at least one of the OTCBB or an equivalent
replacement exchange, the Nasdaq National Market, the Nasdaq SmallCap Market,
the New York Stock Exchange, or the American Stock Exchange; or

         3.10 DEFAULT UNDER OTHER DEBENTURES. An Event of Default has occurred
and is continuing under any of the other Debentures issued pursuant to the
Purchase Agreement,

then, upon the occurrence and during the continuation of any Event of Default
specified in Section 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 3.9, or 3.10, at the option
of the holders of seventy-five percent (75%) of the aggregate principal amount
of the outstanding Debentures issued pursuant to the Purchase Agreement
exercisable through the delivery of written notice to the Borrower by such
Holders (the "DEFAULT NOTICE"), or upon the occurrence of an Event of Default
specified in Section 3.6 or 3.8, the Debentures shall become immediately due and
payable and the Borrower shall pay to the Holder, in full satisfaction of its
obligations hereunder, an amount equal to the greater of (i) 125% MULTIPLIED BY
the SUM of (w) the then outstanding principal amount of this Debenture PLUS (x)
accrued and unpaid interest on the unpaid principal amount of this Debenture to
the date of payment (the "MANDATORY PREPAYMENT DATE") PLUS (y) Default Interest,
if any, on the amounts referred to in clauses (w) and/or (x) PLUS (z) any
amounts owed to the Holder pursuant to the Registration Rights Agreement (the
then outstanding principal amount of this Debenture to the date of payment PLUS
the amounts referred to in clauses (x), (y) and (z) shall collectively be known
as the "DEFAULT SUM") or (ii) the "parity value" of the Default Sum to be
prepaid, where parity value means (x) the highest number of shares of Common
Stock issuable upon conversion of or otherwise pursuant to such Default Sum in
accordance with Article I (treating the Trading Day immediately preceding the
Mandatory Prepayment Date as the "Conversion Date" for purposes of determining
the Conversion Price, unless the Default Event arises as a result of a breach in
respect of a specific Conversion Date in which case such Conversion Date shall
be the Conversion Date), MULTIPLIED BY (y) the highest Market Price for the
Common Stock during the period beginning on the date of first occurrence of the
Event of Default and ending one day prior to the Mandatory Prepayment Date (the
"DEFAULT AMOUNT") and all other amounts payable hereunder shall immediately
become due and payable, all without demand, presentment or notice, all of which
hereby are expressly waived, together with all costs, including, without
limitation, legal fees and expenses, of collection, and the Holder shall be
entitled to exercise all other rights and remedies available at law or in
equity. If the Borrower fails to pay the Default Amount within five (5) business
days of written notice that such amount is due and payable, then the Holder
shall have the right at any time, so long as the Borrower remains in default
(and so long and to the extent that there are sufficient authorized shares), to
require the Borrower, upon written notice, to immediately issue, in lieu of the
Default Amount, the number of shares of Common Stock of the Borrower equal to
the Default Amount divided by the Conversion Price then in effect.

                           ARTICLE IV. MISCELLANEOUS

         4.1 FAILURE OR INDULGENCE NOT WAIVER. No failure or delay on the part
of the Holder in the exercise of any power, right or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other right, power or privileges. All rights and remedies existing hereunder
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.

                                       12
<PAGE>

         4.2 NOTICES. Any notice herein required or permitted to be given shall
be in writing and may be personally served or delivered by courier or sent by
United States mail and shall be deemed to have been given upon receipt if
personally served (which shall include telephone line facsimile transmission) or
sent by courier or three (3) days after being deposited in the United States
mail, certified, with postage pre-paid and properly addressed, if sent by mail.
For the purposes hereof, the address of the Holder shall be as shown on the
records of the Borrower; and the address of the Borrower shall be 192 Technology
Drive, Suite Q, Irvine, California 92618, facsimile number: (949) 453-9652. Both
the Holder and the Borrower may change the address for service by service of
written notice to the other as herein provided.

         4.3 AMENDMENTS. This Debenture and any provision hereof may only be
amended by an instrument in writing signed by the Borrower and the Holder. The
term "DEBENTURE" and all reference thereto, as used throughout this instrument,
shall mean this instrument (and the other Debentures issued pursuant to the
Purchase Agreement) as originally executed, or if later amended or supplemented,
then as so amended or supplemented.

         4.4 ASSIGNABILITY. This Debenture shall be binding upon the Borrower
and its successors and assigns, and shall inure to be the benefit of the Holder
and its successors and assigns. Each transferee of this Debenture must be an
"accredited investor" (as defined in Rule 501(a) of the 1933 Act).
Notwithstanding anything in this Debenture to the contrary, this Debenture may
be pledged as collateral in connection with a BONA FIDE margin account or other
lending arrangement.

         4.5 COST OF COLLECTION. If default is made in the payment of this
Debenture, the Borrower shall pay the Holder hereof costs of collection,
including reasonable attorneys' fees.

         4.6 GOVERNING LAW. THIS DEBENTURE SHALL BE ENFORCED, GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICT OF LAWS. THE BORROWER HEREBY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN DALLAS,
TEXAS WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS DEBENTURE, THE AGREEMENTS
ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY. THE BORROWER IRREVOCABLY WAIVES THE DEFENSE OF AN INCONVENIENT FORUM TO
THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. THE BORROWER FURTHER AGREES THAT
SERVICE OF PROCESS UPON IT MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY
RESPECT EFFECTIVE SERVICE OF PROCESS UPON IT IN ANY SUCH SUIT OR PROCEEDING.
NOTHING HEREIN SHALL AFFECT THE HOLDER'S RIGHT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW. THE PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT
IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER.

         4.7 CERTAIN AMOUNTS. Whenever pursuant to this Debenture the Borrower
is required to pay an amount in excess of the outstanding principal amount (or
the portion thereof required to be paid at that time) plus accrued and unpaid
interest plus Default Interest on such interest, the Borrower and the Holder
agree that the actual damages to the Holder from the receipt of cash payment on
this Debenture may be difficult to determine and the amount to be so paid by the
Borrower represents stipulated damages and not a penalty and is intended to
compensate the Holder in part for loss of the opportunity to convert this
Debenture and to earn a return from the sale of shares of Common Stock acquired
upon conversion of this Debenture at a price in excess of the price paid for
such shares pursuant to this Debenture. The Borrower and the Holder hereby agree
that such amount of stipulated damages is not plainly disproportionate to the
possible loss to the Holder from the receipt of a cash payment without the
opportunity to convert this Debenture into shares of Common Stock.

                                       13
<PAGE>

         4.8 ALLOCATIONS OF RESERVED AMOUNT. The Reserved Amount shall be
allocated pro rata among the Holder of this Debenture and the holders of the
other debentures issued pursuant to the Purchase Agreement based on the
principal amount of this Debenture and each such other debenture issued to the
Holder and each such holder. Each increase to the Reserved Amount shall be
allocated pro rata among the Holder and each such other holder based on the
principal amount of this Debenture and each such other debenture held by the
Holder and each such other holder at the time of the increase in the Reserved
Amount. In the event the Holder shall sell or otherwise transfer any portion of
this Debenture, each transferee shall be allocated a pro rata portion of the
Holder's Reserved Amount. Any portion of the Reserved Amount which remains
allocated to any person or entity which does not hold any portion of this
Debenture shall be allocated to the remaining holders of debentures, pro rata
based on the principal amount of such debentures then held by such holders.

         4.9 DENOMINATIONS. At the request of the Holder, upon surrender of this
Debenture, the Borrower shall promptly issue new Debentures in the aggregate
outstanding principal amount hereof, in the form hereof, in such denominations
of at least $50,000 as the Holder shall request.

         4.10 NOTICE OF CORPORATE EVENTS. Except as otherwise provided below,
the Holder of this Debenture shall have no rights as a holder of Common Stock
unless and only to the extent that it converts this Debenture into Common Stock.
The Borrower shall provide the Holder with prior notification of any meeting of
the Borrower's stockholders (and copies of proxy materials and other information
sent to shareholders). In the event of any taking by the Borrower of a record of
its stockholders for the purpose of determining stockholders who are entitled to
receive payment of any dividend or other distribution, any right to subscribe
for, purchase or otherwise acquire (including by way of merger, consolidation,
reclassification or recapitalization) any share of any class or any other
securities or property, or to receive any other right, or for the purpose of
determining stockholders who are entitled to vote in connection with any
proposed sale, lease or conveyance of all or substantially all of the assets of
the Borrower or any proposed liquidation, dissolution or winding up of the
Borrower, the Borrower shall mail a notice to the Holder, at least twenty (20)
days prior to the record date specified therein (or thirty (30) days prior to
the consummation of the transaction or event, whichever is earlier), of the date
on which any such record is to be taken for the purpose of such dividend,
distribution, right or other event, and a brief statement regarding the amount
and character of such dividend, distribution, right or other event to the extent
known at such time. The Borrower shall make a public announcement of any event
requiring notification to the Holder hereunder substantially simultaneously with
the notification to the Holder in accordance with the terms of this Section
4.10.

         4.11 WAIVER OF STAY, EXTENSION OR USURY LAWS. The Borrower covenants
that it shall not at any time insist upon, or plead, or in any manner whatsoever
claim, and shall resist any and all efforts to be compelled to take the benefit
or advantage of, any stay or extension law or any usury law or other law which
would prohibit or forgive the Borrower from paying all or any portion of the
principal of or interest on the Debenture as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may effect the
covenants or the performance of this Agreement; and the Borrower hereby
expressly waives all benefit or advantage of any such law and covenants that it
shall not hinder, delay or impede the execution of power herein granted to the
Holder but shall suffer and permit the execution of every such power as though
no such law had been enacted. All agreements between the Borrower and Holder,
whether now existing or hereafter arising and whether written or oral, are
hereby limited so that in no contingency, whether by reason or demand or
acceleration of the final maturity date of this Debenture or otherwise, shall
the interest contracted for, charged, received, paid or agreed to be paid to
holders exceed the Maximum Rate. Regardless of any provision contained in this

                                       14
<PAGE>

Debenture, the Security Agreement, the Purchase Agreement, or any other document
executed in connection therewith (collectively, the "LOAN DOCUMENTS"), Holder
shall never be entitled to receive, collect or apply as interest (whether termed
interest herein or deemed to be interest by operation of law or judicial
determination) on this Debenture any amount in excess of interest calculated at
the Maximum Rate, and, in the event that any Holder ever receives, collects or
applies as interest any such excess, the amount which would be excessive
interest shall be deemed to be a partial prepayment of principal and treated
hereunder as such; and, if the principal amount of this Debenture is paid in
full, any remaining excess shall forthwith be paid to Borrower. In determining
whether or not the interest paid or payable under any specific contingency
exceeds interest calculated at the Maximum Rate, Borrower and Lender shall, to
the maximum extent permitted under applicable law, (i) characterize any
nonprincipal payment as an expense, fee or premium rather than as interest; (ii)
exclude voluntary prepayments and the effects thereof; and (iii) amortize,
prorate, allocate and spread, in equal parts, the total amount of interest
throughout the entire contemplated term of this Debenture.

         4.12 REMEDIES. The Borrower acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the Holder, by vitiating
the intent and purpose of the transaction contemplated hereby. Accordingly, the
Borrower acknowledges that the remedy at law for a breach of its obligations
under this Debenture will be inadequate and agrees, in the event of a breach or
threatened breach by the Borrower of the provisions of this Debenture, that the
Holder shall be entitled, in addition to all other available remedies at law or
in equity, and in addition to the penalties assessable herein, to an injunction
or injunctions restraining, preventing or curing any breach of this Debenture
and to enforce specifically the terms and provisions thereof, without the
necessity of showing economic loss and without any bond or other security being
required

         4.13 CERTAIN WAIVERS. Borrower and each surety, endorser, guarantor,
and other party ever liable for payment of any sums of money payable upon this
Debenture, jointly and severally waive presentment, demand, protest, notice of
protest and non payment or other notice of default, notice of acceleration, and
intention to accelerate, or other notice of any kind, and agree that their
liability under this Debenture shall not be affected by any renewal or extension
in the time of payment hereof, or in any indulgences, or by any release or
change in any security for the payment of this Debenture, and hereby consent to
any and all renewals, extensions, indulgences, releases, or changes, regardless
of the number of such renewals, extensions, indulgences, releases, or changes.

         4.14 ENTIRETY. THIS DEBENTURE AND ALL THE OTHER LOAN DOCUMENTS EMBODY
THE FINAL, ENTIRE AGREEMENT OF HOLDER AND BORROWER AND SUPERSEDE ANY AND ALL
PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER
WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT
BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OR DISCUSSIONS OF HOLDER AND BORROWER. THERE ARE NO ORAL
AGREEMENTS BETWEEN HOLDER AND BORROWER.

                          ARTICLE V. REPURCHASE RIGHT

         5.1 REPURCHASE OF THE DEBENTURE AT THE OPTION OF THE HOLDER. This
Debenture shall be purchased by the Borrower, in whole or in part and from time
to time, at the option of the Holder (each the "REPURCHASE DATE"), at a purchase
price equal to 100% of the principal amount of this Debenture, plus accrued and
unpaid interest on this Debenture, to (but excluding) such Repurchase Date (the
"REPURCHASE PRICE"). The Borrower shall have the option to pay all or any
portion of the Repurchase Price in newly issued, fully paid and nonassessable
shares of Common Stock, with each share of Common Stock having a value equal to

                                       15
<PAGE>

the average Market Price of a share of Common Stock for each of the ten (10)
Trading Days immediately preceding the date on which the Repurchase Price is
paid; PROVIDED, HOWEVER, that the Borrower shall not have the right to issue any
shares of Common Stock pursuant to this Article V unless such shares of Common
Stock are then registered pursuant to a Registration Statement (as defined in
the Registration Rights Agreement) which is available for the resale of such
shares of Common Stock immediately upon issuance.

         5.2 REPURCHASE PROCEDURE. The Holder may exercise its rights under
Section 5.1, at any time and from time to time, on or after January 14, 2008, by
delivering to the Borrower (i) a written notice of repurchase (a "REPURCHASE
NOTICE") at any time prior to 5:00 p.m., Dallas, Texas time, on any business day
which is not less than ten (10) business days and not more than twenty (20)
business days of the applicable Repurchase Date stating the Repurchase Date and
the portion of the Debenture which the Holder will deliver to be purchased,
which portion must be in principal amounts of $1,000 or an integral multiple of
$1,000, and irrevocably agreeing that such principal amount of the Debenture
shall be purchased by the Borrower as of the Repurchase Date and (ii) this
Debenture. In the event that this Debenture is repurchased in part, upon
surrender of this Debenture, the Borrower shall execute and deliver to the
Holder a new Debenture equal in principal amount to the unpurchased portion of
the Debenture surrendered. Not later than five (5) business days prior to the
Repurchase Date, the Borrower shall give written notice to the Holder, which
notice shall specify, subject to the proviso in the last sentence of Section
5.1, the portions of the Repurchase Price payable in cash and/or shares of
Common Stock.

                  [remainder of page intentionally left blank]
                   ------------------------------------------

                                       16
<PAGE>

         IN WITNESS WHEREOF, the Borrower has caused this Debenture to be signed
in its name by its duly authorized officer this 14th day of January, 2005.

VISIJET, INC.

By:      ______________________________
         Randal A. Bailey
         President

                                       17
<PAGE>

                                    EXHIBIT A

                              NOTICE OF CONVERSION
                    (To be Executed by the Registered Holder
                       in order to Convert the Debentures)

                  The undersigned hereby irrevocably elects to convert
$__________ principal amount of the Debenture (defined below) into shares of
common stock, par value $0.001 per share ("COMMON STOCK"), of VisiJet, Inc., a
Delaware corporation (the "BORROWER") according to the conditions of the
Convertible Debentures of the Borrower dated as of January 14, 2005 (the
"DEBENTURES"), as of the date written below. If securities are to be issued in
the name of a person other than the undersigned, the undersigned will pay all
transfer taxes payable with respect thereto and is delivering herewith such
certificates. No fee will be charged to the Holder for any conversion, except
for transfer taxes, if any. A copy of each Debenture is attached hereto (or
evidence of loss, theft or destruction thereof).

                  The Borrower shall electronically transmit the Common Stock
issuable pursuant to this Notice of Conversion to the account of the undersigned
or its nominee with DTC through its Deposit Withdrawal Agent Commission system
("DWAC TRANSFER").

Name of DTC Prime Broker: _____________________________________________________
         Account Number: ______________________________________________________

                  In lieu of receiving shares of Common Stock issuable pursuant
to this Notice of Conversion by way of a DWAC Transfer, the undersigned hereby
requests that the Borrower issue a certificate or certificates for the number of
shares of Common Stock set forth below (which numbers are based on the Holder's
calculation attached hereto) in the name(s) specified immediately below or, if
additional space is necessary, on an attachment hereto:

Name:__________________________________________________________________________
         Address:______________________________________________________________

                  The undersigned represents and warrants that all offers and
sales by the undersigned of the securities issuable to the undersigned upon
conversion of the Debentures shall be made pursuant to registration of the
securities under the Securities Act of 1933, as amended (the "ACT"), or pursuant
to an exemption from registration under the Act.

Date of Conversion:_____________________________
Applicable Conversion Price:____________________
Number of Shares of Common Stock to be Issued Pursuant to
Conversion of the Debentures:___________________
Signature:______________________________________
Name:___________________________________________
Address:________________________________________

The Borrower shall issue and deliver shares of Common Stock to an overnight
courier not later than three business days following receipt of the original
Debenture(s) to be converted, and shall make payments pursuant to the Debentures
for the number of business days such issuance and delivery is late.

                                       18

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