Document:

EXhibit 10.2

    
      

    

     

    REGISTRATION
      RIGHTS AGREEMENT

    

    THIS
      REGISTRATION RIGHTS AGREEMENT
      (this
“Agreement”),
      dated
      as of October 10, 2005, by and among CENUCO,
      INC.,
      a
      Delaware corporation (the “Company”),
      and
      the undersigned investors listed on Schedule I attached hereto (each, an
“Investor”
and
      collectively, the “Investors”).

    

    WHEREAS:

    

    A.     In
      connection with the Securities Purchase Agreement by and among the parties
      hereto, dated as of October 10, 2005 (the “Securities
      Purchase Agreement”),
      the
      Company has agreed, upon the terms and subject to the conditions of the
      Securities Purchase Agreement, to issue and sell to the Investors 6,578,947
      units (the “Units”),
      each
      Unit consisting of (i) one ten thousandth of a share of the Company’s Series B
      Junior Participating Convertible Preferred Stock, par value $0.001 per share
      (the “Preferred
      Shares”),
      convertible into shares of the Company’s common stock, par value $0.001 per
      share (the “Common
      Stock”),
      and
      (ii) a warrant, (the “Warrants”),
      to
      acquire 0.3 shares of Common Stock. Capitalized terms not defined herein shall
      have the meaning ascribed to them in the Securities Purchase
      Agreement.

    

    B.     To
      induce
      the Investors to execute and deliver the Securities Purchase Agreement, the
      Company has agreed to provide certain registration rights under the Securities
      Act of 1933, as amended, and the rules and regulations there under, or any
      similar successor statute (collectively, the “Securities
      Act”),
      and
      applicable state securities laws.

    

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

    

    1.     DEFINITIONS.

    

    As
      used
      in this Agreement, the following terms shall have the following
      meanings:

    

    (a)     "Closing
      Bid Price"
      means,
      on any date, the closing bid price (as reported by Bloomberg L.P.) of the Common
      Stock on the Principal Market or if the Common Stock is not traded on a
      Principal Market, the highest reported bid price for the Common Stock, as
      published by the National Association of Securities Dealers, Inc.

    

    (b)     “Market
      Price”
means
      the higher of $3.80 or the Closing Bid Price of a share of Common
      Stock.

    

    (c)     “Person”
means
      a
      corporation, a limited liability company, an association, a partnership, an
      organization, a business, an individual, a governmental or political subdivision
      thereof or a governmental agency.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (d)     "Principal
      Market"
      means
      the Nasdaq National Market, the Nasdaq SmallCap Market, the American Stock
      Exchange, the OTC Bulletin Board or the New York Stock Exchange, whichever
      is at
      the time the principal trading exchange or market for the Common
      Stock.

    

    (e)     “Register,”
      “registered,”
and
      “registration”
refer
      to a registration effected by preparing and filing one or more Registration
      Statements (as defined below) in compliance with the Securities Act and pursuant
      to Rule 415 under the Securities Act or any successor rule providing for
      offering securities on a continuous or delayed basis (“Rule
      415”),
      and
      the declaration or ordering of effectiveness of such Registration Statement(s)
      by the United States Securities and Exchange Commission (the “SEC”).

    

    (f)     “Registrable
      Securities”
means
      the Conversion Shares and the Warrant Shares, as such terms are defined in
      the
      Securities Purchase Agreement.

    

    (g)     “Registration
      Statement”
means
      a
      registration statement under the Securities Act which covers Registrable
      Securities.

    

    (h)     "Standby
      Distribution Agreement"
      means
      that certain Standby Equity Distribution Agreement of even date herewith by
      and
      between the Company and Cornell Capital Partners, LP, a Delaware limited
      partnership.

    

    2.     REGISTRATION.

    

    (a)     Piggyback
      Registration.
      At any
      time after the date hereof, if the Company proposes to file a Registration
      Statement under the Securities Act with respect to the resale of the Company's
      Common Stock, the Company shall send to each Investor written notice of such
      determination and, if within fifteen (15) days after the date of such notice,
      such Investor shall so request in writing, the Company shall include in such
      Registration Statement all or any part of the Registrable Securities such
      Investor requests to be registered[, except that if, in connection with any
      underwritten public offering, the managing underwriter(s) thereof shall impose
      a
      limitation on the number of shares of Common Stock which may be included in
      the
      Registration Statement because, in such underwriter(s)' judgment, marketing
      or
      other factors dictate such limitation is necessary to facilitate public
      distribution, then the Company shall be obligated to include in such
      Registration Statement only such limited portion of the Registrable Securities
      with respect to which such Investor has requested inclusion hereunder as the
      underwriter shall permit. Any exclusion of Registrable Securities shall be
      made
      pro rata among the Investors seeking to include Registrable Securities, in
      pro
      rata among the Investors seeking to include Registrable Securities, in
      proportion to the number of Registrable Securities sought to be included by
      such
      Investors; provided,
      however
      that the
      Company shall not exclude any Registrable Securities unless the Company has
      first excluded all outstanding securities, the holders of which are not
      contractually entitled to inclusion of such securities in such Registration
      Statement or are not contractually entitled to pro rata inclusion with the
      Registrable Securities; and provided, further however that after giving effect
      to the immediately preceding proviso, any exclusion of Registrable Securities
      shall be made pro rata with holder of other securities having the contractual
      right to include such securities in the Registration Statement other than holder
      of securities contractually entitled to inclusion of their securities in such
      Registration Statement by reason of demand registration rights.] In an offering
      in connection with which an Investor is entitled to registration under this
      Section 2(a), if such offering is an underwritten offering, then each Investor
      whose Registrable Securities are included in such Registration Statement shall,
      unless otherwise agreed by the Company, offer and sell such Registrable
      Securities in an underwritten offering using the same underwriter(s) and subject
      to the provisions of this Agreement, on the same terms and conditions as other
      shares of Common Stock include in such underwritten offering.

    
      
        
        

      

      
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    (b)     Demand
      Registration.
      If by
      September 15, 2006, the Company has not filed a Registration Statement with
      respect to the resale of Common Stock which (i) includes all of the Investors'
      Registrable Securities which the Investors have requested be included in such
      Registration Statement pursuant to Section 2(a), (ii) has been declared
      effective by the SEC (other than as a result of actions or failures to act
      of
      the Investors or the other parties to the Standby Distribution Agreement,
      including the failure to provide information required by the rules and
      regulations of the SEC), and (iii) remains in effect unless all Registrable
      Securities have been sold, then Investors will have the right to require the
      Company to file a Registration Statement for the resale the Investors'
      Registrable Securities. Subject to the terms and conditions of this Agreement,
      the Company shall prepare and file, no later than sixty (60) days after it
      has
      received the written request of the Investors under this Section 2(b), (the
      “Scheduled
      Filing Deadline”),
      with
      the SEC a registration statement on Form S-1 (or, if the Company is then
      eligible, on Form S-3) under the Securities Act (the “Demand
      Registration Statement”)
      for
      the resale by the Investors of the number of Registrable Securities specified
      by
      the Investors. The Company shall retain, and pay at its sole expense, a law
      firm
      to file each Demand Registration Statement from a list of approved law firms
      provided by the Investor including but not limited to Sichenzia Ross Friedman
      Ference LLP, Greenberg Traurig, LLP and Kirkpatrick & Lockhart Nicholson
      Graham LLP. Prior to the filing with the SEC of an initial Registration
      Statement which includes Investors' Registrable Securities, the Company shall
      furnish a copy of such initial Registration Statement to the Investors whose
      shares are so included for their review and comment. The Investors shall furnish
      comments on such initial Registration Statement to the Company with twenty-four
      (24) hours of the receipt thereof from the Company.

    

    (c)     Effectiveness
      of each Demand Registration Statement.
      Subject
      to the terms and conditions of this Agreement, the Company shall use its best
      efforts to: (i) have each Demand Registration Statement declared effective
      by
      the SEC no later than one hundred twenty (120) days after the date filed (the
      “Scheduled
      Effective Deadline”)
      and
      (ii) insure that such Demand Registration Statement and any subsequent
      Registration Statement remains in effect until all of the Registrable Securities
      have been sold, subject to the terms and conditions of this Agreement. It shall
      be an event of default hereunder if a Demand Registration Statement is not
      declared effective by the SEC within one hundred twenty (120) days after filing
      thereof.

    

    (d)     Failure
      to File or Obtain Effectiveness of a Demand Registration
      Statement.
      In the
      event the Registration Statement is not filed by the Scheduled Filing Deadline
      or is not declared effective by the SEC on or before the Scheduled Effective
      Deadline (other than as a result of actions or failures to act of any of the
      Investors, including the failure to provide information required by the rules
      and regulations of the SEC), or if after a Demand Registration Statement has
      been declared effective by the SEC, sales cannot be made pursuant to such
      Registration Statement (whether because of a failure to keep such Demand
      Registration Statement effective, failure to disclose such information as is
      necessary for sales to be made pursuant to such Demand Registration Statement,
      failure to register sufficient shares of Common Stock or otherwise then as
      partial relief for the damages to any holder of Registrable Securities by reason
      of any such delay in or reduction of its ability to sell the underlying shares
      of Common Stock (which remedy shall not be exclusive of any other remedies
      at
      law or in equity), the Company will pay as liquidated damages (the “Liquidated
      Damages”)
      and
      not as a penalty, to the holder, a cash amount equal to two percent (2%) per
      month of (i) an amount equal to the product of (x) the number of Registrable
      Securities which Investors have requested be registered pursuant to such Demand
      Registration Statement and (y) the Market price of Common Stock on the Scheduled
      Effective Deadline. The initial payment of Liquidated Damages shall be made
      within three (3) business days from the end of the month in which the Scheduled
      Filing Deadline or Scheduled Effective Deadline occurred, and shall continue
      thereafter until a Demand Registration Statement is filed or declared effective
      as the case may be.

    
      
        
        

      

      
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    (e)     Liquidated
      Damages.
      The
      Company and the Investors hereto acknowledge and agree that the sums payable
      under subsection 2(c) above shall constitute liquidated damages and not
      penalties and are in addition to all other rights of the Investor, including
      the
      right to call a default. The parties further acknowledge that (i) the amount
      of
      loss or damages likely to be incurred is incapable or is difficult to precisely
      estimate, (ii) the amounts specified in such subsection bear a reasonable
      relationship to, and are not plainly or grossly disproportionate to, the
      probable loss likely to be incurred in connection with any failure by the
      Company to file a Demand Registration Statement or to obtain or maintain the
      effectiveness of a Demand Registration Statement, (iii) one of the reasons
      for
      the Company and the Investors reaching an agreement as to such amounts was
      the
      uncertainty and cost of litigation regarding the question of actual damages,
      and
      (iv) the Company and the Investors are sophisticated business parties and have
      been represented by sophisticated and able legal counsel and negotiated this
      Agreement at arm’s length. 

    

    (f)     Certain
      Parameters of Registrations.

    

    (i)     The
      Company shall not be required to: (A) effect more than two (2) registrations
      under Section 2(b); (B) effect the registration of Registrable Securities
      pursuant to Section 2(b) at any time that the Investors may sell their Company
      securities pursuant to Rule 144 (k); or (C) file a Demand Registration Statement
      if the aggregate price to the public (calculated as the Market Price of
      Registrable Securities Scheduled Filing Deadline of the filing of the applicable
      Demand Registration) of the Registrable Securities included in such Registration
      Statement) is less than US $5,000,000. A demand registration request pursuant
      to
      Section 2(b) hereof shall be deemed to have been made and satisfied if the
      Company offers to all holders of its unregistered Common Stock, including the
      Investors with respect to all of Registrable Securities, the opportunity to
      have
      their unregistered Common Stock (including all Investors' Registrable
      Securities) included in a Registration Statement, which is filed,
      and declared
      effective by the SEC and remains in effect until all securities registered
      thereunder have been sold.

    

    (ii)     Any
      request for registration under Section 2(b) that is received by the Company
      during the period between the end of a calendar quarter and the release of
      the
      Company's earnings for such calendar quarter shall be deemed to have been
      received by the Company on the date of the earnings release; provided that
      there
      shall be not more than seventy -five (75) days between the end of a calendar
      quarter and the date of the earnings release for such calendar quarter..

    
      
        
        

      

      
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    (iii)     Investors
      shall have an unlimited right to request registration of their Registrable
      Securities pursuant to Section 2(a).

    

    (iv)     In
      connection with an Investors' demand under Section 2(b) and notwithstanding
      anything herein to the contrary, the Company shall have the right to delay
      the
      Scheduled Filing Deadline and the related Scheduled Effective Deadline: (i)
      for
      a period of not more than sixty (60) days; provided that such deferral may
      not
      be applied more than one time in any twelve (12) successive month period; (ii)
      for a period of not more than thirty (30) days to attempt to arrange for the
      sale of all of the Investors' Common Shares and Warrant Shares requested to
      be
      registered; and (iii) shall not be combined with any extension in Section
      2(f)(ii). The Scheduled Effective Deadline shall be extended to the extent
      of
      any delays in the filing of a Demand Registration Statement pursuant to the
      terms of this Section 2(f)(iv).

    

    3.     RELATED
      OBLIGATIONS.

    

    (a)     Unless
      and until Rule 144(k) becomes available with respect to the Registrable
      Securities, the Company shall keep any Registration Statement which includes
      Investors' Registrable Securities effective pursuant to Rule 415 at all
      times until the date on which the Investors shall have sold all the Registrable
      Securities covered by such Registration Statement (the “Registration
      Period”),
      which
      Registration Statement (including any amendments or supplements thereto and
      prospectuses contained therein) shall not contain any untrue statement of a
      material fact or omit to state a material fact required to be stated therein,
      or
      necessary to make the statements therein, in light of the circumstances in
      which
      they were made, not misleading.

    

    (b)     The
      Company shall prepare and file with the SEC such amendments (including
      post-effective amendments) and supplements to a Registration Statement and
      the
      prospectus used in connection with such Registration Statement, which prospectus
      is to be filed pursuant to Rule 424 promulgated under the Securities Act, as
      may
      be necessary to keep such Registration Statement effective at all times during
      the Registration Period, and, during such period, comply with the provisions
      of
      the Securities Act with respect to the disposition of all Registrable Securities
      of the Company covered by such Registration Statement until such time as all
      of
      such Registrable Securities shall have been disposed of in accordance with
      the
      intended methods of disposition by the seller or sellers thereof as set forth
      in
      such Registration Statement. In the case of amendments and supplements to a
      Registration Statement which are required to be filed pursuant to this Agreement
      (including pursuant to this Section 3(b)) by reason of the Company’s filing a
      report on Form 10-K, Form 10-Q or Form 8-K or any analogous report under the
      Securities Exchange Act of 1934, as amended (the “Exchange
      Act”),
      the
      Company shall incorporate such report by reference into the Registration
      Statement, if applicable, or shall file such amendments or supplements with
      the
      SEC on the same day on which the Exchange Act report is filed which created
      the
      requirement for the Company to amend or supplement the Registration Statement.
      

    
      
        
        

      

      
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    (c)     The
      Company shall furnish to each Investor whose Registrable Securities are included
      in any Registration Statement, without charge, (i) at least one (1) copy of
      such
      Registration Statement as declared effective by the SEC and any amendment(s)
      thereto, including financial statements and schedules, all documents
      incorporated therein by reference, all exhibits and each preliminary prospectus,
      (ii) ten (10) copies of the final prospectus included in such Registration
      Statement and all amendments and supplements thereto (or such other number
      of
      copies as such Investor may reasonably request) and (iii) such other documents
      as such Investor may reasonably request from time to time in order to facilitate
      the disposition of the Registrable Securities owned by such
      Investor.

    

    (d)     The
      Company shall use its reasonable best efforts to (i) register and qualify the
      Registrable Securities covered by a Registration Statement under such other
      securities or “blue sky” laws of such jurisdictions in the United States as any
      Investor reasonably requests, (ii) prepare and file in those jurisdictions,
      such amendments (including post-effective amendments) and supplements to such
      registrations and qualifications as may be necessary to maintain the
      effectiveness thereof during the Registration Period, (iii) take such other
      actions as may be necessary to maintain such registrations and qualifications
      in
      effect at all times during the Registration Period, and (iv) take all other
      actions reasonably necessary or advisable to qualify the Registrable Securities
      for sale in such jurisdictions; provided, however, that the Company shall not
      be
      required in connection therewith or as a condition thereto to (w) make any
      change to its articles of incorporation or by-laws, (x) qualify to do business
      in any jurisdiction where it would not otherwise be required to qualify but
      for
      this Section 3(d), (y) subject itself to general taxation in any such
      jurisdiction, or (z) file a general consent to service of process in any such
      jurisdiction. The Company shall promptly notify each Investor who holds
      Registrable Securities of the receipt by the Company of any notification with
      respect to the suspension of the registration or qualification of any of the
      Registrable Securities for sale under the securities or “blue sky” laws of any
      jurisdiction in the United States or its receipt of actual notice of the
      initiation or threat of any proceeding for such purpose.

    

    (e)     As
      promptly as practicable after becoming aware of such event or development,
      the
      Company shall notify each Investor in writing of the happening of any event
      as a
      result of which the prospectus included in a Registration Statement, as then
      in
      effect, includes an untrue statement of a material fact or omission to state
      a
      material fact required to be stated therein or necessary to make the statements
      therein, in light of the circumstances under which they were made, not
      misleading (provided that in no event shall such notice contain any material,
      nonpublic information), and promptly prepare a supplement or amendment to such
      Registration Statement to correct such untrue statement or omission, and deliver
      ten (10) copies of such supplement or amendment to each Investor.
      Notwithstanding any provision of this Agreement to the contrary, if the Company
      makes such a notification, the Company may suspend the use of any prospectus
      contained in any Registration Statement for periods not to exceed forty five
      (45) business days in any three month period or two periods not to exceed an
      aggregate of ninety (90) business days in any 12 month period in the event
      that
      the Company determines, in the exercise of its reasonable discretion, confirmed
      by a legal opinion from outside counsel, that sales of Registrable Securities
      thereunder could constitute violations of the Securities Act due to the
      Registration Statement containing an untrue statement of a material fact or
      omission to state a material fact required to be stated therein or necessary
      to
      make the statements therein, in light of the circumstances under which they
      were
      made, not misleading. In each case the Company shall use commercially reasonable
      efforts to remedy the deficiency in the Registration Statement within thirty
      (30) business days. The Company shall also promptly notify each Investor in
      writing (i) when a prospectus or any prospectus supplement or post-effective
      amendment has been filed, and when a Registration Statement or any
      post-effective amendment has become effective (notification of such
      effectiveness shall be delivered to each Investor by facsimile on the same
      day
      of such effectiveness), (ii) of any request by the SEC for amendments or
      supplements to a Registration Statement or related prospectus or related
      information, and (iii) of the Company’s reasonable determination that a
      post-effective amendment to a Registration Statement would be
      appropriate.

    
      
        
        

      

      
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    (f)     The
      Company shall use its reasonable best efforts to prevent the issuance of any
      stop order or other suspension of effectiveness of a Registration Statement,
      or
      the suspension of the qualification of any of the Registrable Securities for
      sale in any jurisdiction within the United States of America and, if such an
      order or suspension is issued, to obtain the withdrawal of such order or
      suspension at the earliest possible moment and to notify each Investor who
      holds
      Registrable Securities being sold of the issuance of such order and the
      resolution thereof or its receipt of actual notice of the initiation or threat
      of any proceeding for such purpose.

    

    (g)     At
      the
      reasonable request of any Investor, the Company shall furnish to such Investor,
      on the date of the effectiveness of the Registration Statement and thereafter
      from time to time on such dates as an Investor may reasonably request (i) a
      letter, dated such date, from the Company’s independent certified public
      accountants in form and substance as is customarily given by independent
      certified public accountants to underwriters in an underwritten public offering,
      and (ii) an opinion, dated as of such date, of counsel representing the Company
      for purposes of such Registration Statement, in form, scope and substance as
      is
      customarily given in an underwritten public offering, addressed to the
      Investors.

    

    (h)     The
      Company shall make available for inspection by (i) any Investor and
      (ii) one (1) firm of accountants or other agents retained by the Investors
      (collectively, the “Inspectors”)
      all
      pertinent financial and other records, and pertinent corporate documents and
      properties of the Company (collectively, the “Records”),
      as
      shall be reasonably deemed necessary by each Inspector, and cause the Company’s
      officers, directors and employees to supply all information which any Inspector
      may reasonably request; provided, however, that each Inspector shall agree
      in
      writing, and each Investor hereby agrees, to hold in strict confidence and
      shall
      not make any disclosure (except to an Investor) or use any Record or other
      information which the Company determines in good faith to be confidential,
      and
      of which determination the Inspectors are so notified, unless (a) the disclosure
      of such Records is necessary to avoid or correct a misstatement or omission
      in
      any Registration Statement or is otherwise required under the Securities Act,
      (b) the release of such Records is ordered pursuant to a final, non-appealable
      subpoena or order from a court or government body of competent jurisdiction,
      or
      (c) the information in such Records has been made generally available to the
      public other than by disclosure in violation of this or any other agreement
      of
      which the Inspector or the Investor has knowledge. Each Investor agrees that
      it
      shall, upon learning that disclosure of such Records is sought in or by a court
      or governmental body of competent jurisdiction or through other means, give
      prompt notice to the Company and allow the Company, at its expense, to undertake
      appropriate action to prevent disclosure of, or to obtain a protective order
      for, the Records deemed confidential.

    
      
        
        

      

      
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    (i)     The
      Company shall hold in confidence and not make any disclosure of information
      concerning an Investor provided to the Company unless (i) disclosure of such
      information is necessary to comply with federal or state securities laws, (ii)
      the disclosure of such information is necessary to avoid or correct a
      misstatement or omission in any Registration Statement, (iii) the release of
      such information is ordered pursuant to a subpoena or other final,
      non-appealable order from a court or governmental body of competent
      jurisdiction, or (iv) such information has been made generally available to
      the
      public other than by disclosure in violation of this Agreement or any other
      agreement. The Company agrees that it shall, upon learning that disclosure
      of
      such information concerning an Investor is sought in or by a court or
      governmental body of competent jurisdiction or through other means, give prompt
      written notice to such Investor and allow such Investor, at the Investor’s
      expense, to undertake appropriate action to prevent disclosure of, or to obtain
      a protective order for, such information.

    

    (j)     The
      Company shall use its reasonable best efforts either to cause all the
      Registrable Securities covered by a Registration Statement (i) to be listed
      on
      each securities exchange on which securities of the same class or series issued
      by the Company are then listed, if any, if the listing of such Registrable
      Securities is then permitted under the rules of such exchange or (ii) to be
      included for quotation on the National Association of Securities Dealers, Inc.
      OTC Bulletin Board for such Registrable Securities. The Company shall pay all
      fees and expenses in connection with satisfying its obligation under this
      Section 3(j).

    

    (k)     The
      Company shall cooperate with the Investors who hold Registrable Securities
      being
      offered and, to the extent applicable, to facilitate the timely preparation
      and
      delivery of certificates to a transferee of an Investor (not bearing any
      restrictive legend) representing the Registrable Securities to be offered
      pursuant to a Registration Statement and enable such certificates to be in
      such
      denominations or amounts, as the case may be, as the Investors may reasonably
      request and registered in such names as the Investors may request.

    

    (l)     The
      Company shall use its reasonable best efforts to cause the Registrable
      Securities covered by the applicable Registration Statement to be registered
      with or approved by such other governmental agencies or authorities as may
      be
      necessary to consummate the disposition of such Registrable
      Securities.

    

    (m)     The
      Company shall make generally available to its security holders as soon as
      practical, but not later than ninety (90) days after the close of the period
      covered thereby, an earnings statement (in form complying with the provisions
      of
      Rule 158 under the Securities Act) covering a twelve (12) month period beginning
      not later than the first day of the Company’s fiscal quarter next following the
      effective date of the Registration Statement.

    

    (n)     The
      Company shall otherwise use its reasonable best efforts to comply with all
      applicable rules and regulations of the SEC in connection with any registration
      hereunder.

    
      
        
        

      

      
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    (o)     Within
      two (2) business days after a Registration Statement which covers Registrable
      Securities is declared effective by the SEC, the Company shall deliver, and
      shall cause legal counsel for the Company to deliver, to the transfer agent
      for
      such Registrable Securities (with copies to the Investors whose Registrable
      Securities are included in such Registration Statement) confirmation that such
      Registration Statement has been declared effective by the SEC in the form
      attached hereto as Exhibit
      A.

    

    (p)     The
      Company shall take all other reasonable actions necessary to expedite and
      facilitate disposition by the Investors of Registrable Securities pursuant
      to a
      Registration Statement.

    

    4.     OBLIGATIONS
      OF THE INVESTORS.

    

    Each
      Investor agrees that, upon receipt of any notice from the Company of the
      happening of any event of the kind described in Section 3(f) or the first
      sentence of Section 3(e), such Investor will immediately discontinue disposition
      of Registrable Securities pursuant to any Registration Statement(s) covering
      such Registrable Securities until such Investor’s receipt of the copies of the
      supplemented or amended prospectus contemplated by Section 3(e) or receipt
      of
      notice from the Company that no supplement or amendment is required.
      Notwithstanding anything to the contrary, the Company shall cause its transfer
      agent to deliver unlegended certificates for shares of Common Stock to a
      transferee of an Investor in accordance with the terms of the Securities
      Purchase Agreement in connection with any sale of Registrable Securities with
      respect to which an Investor has entered into a contract for sale prior to
      the
      Investor’s receipt of a notice from the Company of the happening of any event of
      the kind described in Section 3(f) or the first sentence of 3(e) and for which
      the Investor has not yet settled.

    

    5.     EXPENSES
      OF REGISTRATION.

    

    All
      expenses incurred in connection with registrations, filings or qualifications
      pursuant to Sections 2 and 3 (other than underwriting discounts and selling
      commissions), including, without limitation, all registration, listing and
      qualifications fees, printers, legal and accounting fees shall be paid by the
      Company. 

    

    6.     INDEMNIFICATION.

    

    With
      respect to Registrable Securities which are included in a Registration Statement
      under this Agreement:

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    (a)     To
      the
      fullest extent permitted by law, the Company will, and hereby does, indemnify,
      hold harmless and defend each Investor, the directors, officers, partners,
      employees, agents, representatives of, and each Person, if any, who controls
      any
      Investor within the meaning of the Securities Act or the Exchange Act (each,
      an
“Indemnified
      Person”),
      against any losses, claims, damages, liabilities, judgments, fines, penalties,
      charges, costs, reasonable attorneys’ fees, amounts paid in settlement or
      expenses, joint or several (collectively, “Claims”)
      incurred in investigating, preparing or defending any action, claim, suit,
      inquiry, proceeding, investigation or appeal taken from the foregoing by or
      before any court or governmental, administrative or other regulatory agency,
      body or the SEC, whether pending or threatened, whether or not an indemnified
      party is or may be a party thereto (“Indemnified
      Damages”),
      to
      which any of them may become subject insofar as such Claims (or actions or
      proceedings, whether commenced or threatened, in respect thereof) arise out
      of
      or are based upon: (i) any untrue statement or alleged untrue statement of
      a
      material fact in a Registration Statement or any post-effective amendment
      thereto or in any filing made in connection with the qualification of the
      offering under the securities or other “blue sky” laws of any jurisdiction in
      which Registrable Securities are offered (“Blue
      Sky Filing”),
      or
      the omission or alleged omission to state a material fact required to be stated
      therein or necessary to make the statements therein not misleading; (ii) any
      untrue statement or alleged untrue statement of a material fact contained in
      any
      final prospectus (as amended or supplemented, if the Company files any amendment
      thereof or supplement thereto with the SEC) or the omission or alleged omission
      to state therein any material fact necessary to make the statements made
      therein, in light of the circumstances under which the statements therein were
      made, not misleading; or (iii) any violation or alleged violation by the Company
      of the Securities Act, the Exchange Act, any other law, including, without
      limitation, any state securities law, or any rule or regulation there under
      relating to the offer or sale of the Registrable Securities pursuant to a
      Registration Statement (the matters in the foregoing clauses (i) through (iii)
      being, collectively, “Violations”).
      The
      Company shall reimburse the Investors and each such controlling person promptly
      as such expenses are incurred and are due and payable, for any legal fees or
      disbursements or other reasonable expenses incurred by them in connection with
      investigating or defending any such Claim. Notwithstanding anything to the
      contrary contained herein, the indemnification agreement contained in this
      Section 6(a): (x) shall not apply to a Claim by an Indemnified Person arising
      out of or based upon a Violation which occurs in reliance upon and in conformity
      with information furnished in writing to the Company by such Indemnified Person
      expressly for use in connection with the preparation of the Registration
      Statement or any such amendment thereof or supplement thereto; (y) shall not
      be
      available to the extent such Claim is based on a failure of the Investor to
      deliver or to cause to be delivered the prospectus made available by the
      Company, if such prospectus was timely made available by the Company pursuant
      to
      Section 3(c); and (z) shall not apply to amounts paid in settlement of any
      Claim if such settlement is effected without the prior written consent of the
      Company, which consent shall not be unreasonably withheld. Such indemnity shall
      remain in full force and effect regardless of any investigation made by or
      on
      behalf of the Indemnified Person and shall survive the transfer of the
      Registrable Securities by the Investors.

    

    (b)     In
      connection with a Registration Statement, each Investor agrees to severally
      and
      not jointly indemnify, hold harmless and defend, to the same extent and in
      the
      same manner as is set forth in Section 6(a), the Company, each of its directors,
      each of its officers, employees, representatives, or agents and each Person,
      if
      any, who controls the Company within the meaning of the Securities Act or the
      Exchange Act (each an “Indemnified
      Party”),
      against any Claim or Indemnified Damages to which any of them may become
      subject, under the Securities Act, the Exchange Act or otherwise, insofar as
      such Claim or Indemnified Damages arise out of or is based upon any Violation,
      in each case to the extent, and only to the extent, that such Violation occurs
      in reliance upon and in conformity with written information furnished to the
      Company by such Investor expressly for use in connection with such Registration
      Statement; and, subject to Section 6(d), such Investor will reimburse any legal
      or other expenses reasonably incurred by them in connection with investigating
      or defending any such Claim; provided, however, that the indemnity agreement
      contained in this Section 6(b) and the agreement with respect to contribution
      contained in Section 7 shall not apply to amounts paid in settlement of any
      Claim if such settlement is effected without the prior written consent of such
      Investor, which consent shall not be unreasonably withheld; provided, further,
      however, that the Investor shall be liable under this Section 6(b) for only
      that
      amount of a Claim or Indemnified Damages as does not exceed the net proceeds
      to
      such Investor as a result of the sale of Registrable Securities pursuant to
      such
      Registration Statement. Such indemnity shall remain in full force and effect
      regardless of any investigation made by or on behalf of such Indemnified Party
      and shall survive the transfer of the Registrable Securities by the Investors.
      Notwithstanding anything to the contrary contained herein, the indemnification
      agreement contained in this Section 6(b) with respect to any prospectus shall
      not inure to the benefit of any Indemnified Party if the untrue statement or
      omission of material fact contained in the prospectus was corrected and such
      new
      prospectus was delivered to each Investor prior to such Investor’s use of the
      prospectus to which the Claim relates.

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    (c)     Promptly
      after receipt by an Indemnified Person or Indemnified Party under this Section
      6
      of notice of the commencement of any action or proceeding (including any
      governmental action or proceeding) involving a Claim, such Indemnified Person
      or
      Indemnified Party shall, if a Claim in respect thereof is to be made against
      any
      indemnifying party under this Section 6, deliver to the indemnifying party
      a
      written notice of the commencement thereof, and the indemnifying party shall
      have the right to participate in, and, to the extent the indemnifying party
      so
      desires, jointly with any other indemnifying party similarly noticed, to assume
      control of the defense thereof with counsel mutually satisfactory to the
      indemnifying party and the Indemnified Person or the Indemnified Party, as
      the
      case may be; provided, however, that an Indemnified Person or Indemnified Party
      shall have the right to retain its own counsel with the fees and expenses of
      not
      more than one (1) counsel for such Indemnified Person or Indemnified Party
      to be
      paid by the indemnifying party, if, in the reasonable opinion of counsel
      retained by the indemnifying party, the representation by such counsel of the
      Indemnified Person or Indemnified Party and the indemnifying party would be
      inappropriate due to actual or potential differing interests between such
      Indemnified Person or Indemnified Party and any other party represented by
      such
      counsel in such proceeding. The Indemnified Party or Indemnified Person shall
      cooperate fully with the indemnifying party in connection with any negotiation
      or defense of any such action or claim by the indemnifying party and shall
      furnish to the indemnifying party all information reasonably available to the
      Indemnified Party or Indemnified Person which relates to such action or claim.
      The indemnifying party shall keep the Indemnified Party or Indemnified Person
      fully apprised at all times as to the status of the defense or any settlement
      negotiations with respect thereto. No indemnifying party shall be liable for
      any
      settlement of any action, claim or proceeding effected without its prior written
      consent; provided, however, that the indemnifying party shall not unreasonably
      withhold, delay or condition its consent. No indemnifying party shall, without
      the prior written consent of the Indemnified Party or Indemnified Person,
      consent to entry of any judgment or enter into any settlement or other
      compromise which does not include as an unconditional term thereof the giving
      by
      the claimant or plaintiff to such Indemnified Party or Indemnified Person of
      a
      release from all liability in respect to such claim or litigation. Following
      indemnification as provided for hereunder, the indemnifying party shall be
      subrogated to all rights of the Indemnified Party or Indemnified Person with
      respect to all third parties, firms or corporations relating to the matter
      for
      which indemnification has been made. The failure to deliver written notice
      to
      the indemnifying party within a reasonable time of the commencement of any
      such
      action shall not relieve such indemnifying party of any liability to the
      Indemnified Person or Indemnified Party under this Section 6, except to the
      extent that the indemnifying party is prejudiced in its ability to defend such
      action.

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    (d)     The
      indemnification required by this Section 6 shall be made by periodic payments
      of
      the amount thereof during the course of the investigation or defense, as and
      when bills are received or Indemnified Damages are incurred.

    

    (e)     The
      indemnity agreements contained herein shall be in addition to (i) any cause
      of action or similar right of the Indemnified Party or Indemnified Person
      against the indemnifying party or others, and (ii) any liabilities the
      indemnifying party may be subject to pursuant to the law.

    

    7.     CONTRIBUTION.

    

    To
      the
      extent any indemnification by an indemnifying party is prohibited or limited
      by
      law, the indemnifying party agrees to make the maximum contribution with respect
      to any amounts for which it would otherwise be liable under Section 6 to the
      fullest extent permitted by law; provided, however, that: (i) no seller of
      Registrable Securities guilty of fraudulent misrepresentation (within the
      meaning of Section 11(f) of the Securities Act) shall be entitled to
      contribution from any seller of Registrable Securities who was not guilty of
      fraudulent misrepresentation; and (ii) contribution by any seller of Registrable
      Securities shall be limited in amount to the net amount of proceeds received
      by
      such seller from the sale of such Registrable Securities.

    

    8.     REPORTS
      UNDER THE EXHANGE ACT.

    

    With
      a
      view to making available to the Investors the benefits of Rule 144 promulgated
      under the Securities Act or any similar rule or regulation of the SEC that
      may
      at any time permit the Investors to sell securities of the Company to the public
      without registration (“Rule
      144”)
      the
      Company agrees to:

    

    (a)     make
      and
      keep public information available, as those terms are understood and defined
      in
      Rule 144;

    

    (b)     file
      with
      the SEC in a timely manner all reports and other documents required of the
      Company under the Securities Act and the Exchange Act so long as the Company
      remains subject to such requirements (it being understood that nothing herein
      shall limit the Company’s obligations under Section 4(c) of the Securities
      Purchase Agreement) and the filing of such reports and other documents as are
      required by the applicable provisions of Rule 144; and

    

    (c)     furnish
      to each Investor so long as such Investor owns Registrable Securities, promptly
      upon written request, (i) a written statement by the Company that it has
      complied with the reporting requirements of Rule 144, the Securities Act and
      the
      Exchange Act unless the Company has not so complied, (ii) a copy of the most
      recent annual or quarterly report of the Company and such other reports and
      documents so filed by the Company, and (iii) such other information as may
      be
      reasonably requested to permit the Investors to sell such securities pursuant
      to
      Rule 144 without registration.

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    9.     AMENDMENT
      OF REGISTRATION RIGHTS.

    

    Provisions
      of this Agreement may be amended and the observance thereof may be waived
      (either generally or in a particular instance and either retroactively or
      prospectively), only with the written consent of the Company and Investors
      who
      then hold at least two-thirds (2/3) of the Registrable Securities. Any amendment
      or waiver effected in accordance with this Section 9 shall be binding upon
      each Investor and the Company. No such amendment shall be effective to the
      extent that it applies to fewer than all of the holders of the Registrable
      Securities. No consideration shall be offered or paid to any Person to amend
      or
      consent to a waiver or modification of any provision of any of this Agreement
      unless the same consideration also is offered to all of the parties to this
      Agreement.

    

    10.     MISCELLANEOUS.

    

    (a)     A
      Person
      is deemed to be a holder of Registrable Securities whenever such Person owns
      or
      is deemed to own of record such Registrable Securities. If the Company receives
      conflicting instructions, notices or elections from two (2) or more Persons
      with
      respect to the same Registrable Securities, the Company shall act upon the
      basis
      of instructions, notice or election received from the registered owner of such
      Registrable Securities.

     

    
      (b)     Any
        notices, consents, waivers or other communications required or permitted
        to be
        given under the terms of this Agreement must be in writing and will be deemed
        to
        have been delivered: (i) upon receipt, when delivered personally; (ii) upon
        receipt, when sent by facsimile (provided confirmation of transmission is
        mechanically or electronically generated and kept on file by the sending
        party);
        or (iii) one (1) business day after deposit with a nationally recognized
        overnight delivery service, in each case properly addressed to the party
        to
        receive the same. The addresses and facsimile numbers for such communications
        shall be:

       

    

    
      	
              If
                to the Company, to:

            	
              Cenuco,
                Inc.

            
	 	
              200
                Lenox Drive

            
	 	
              Lawrenceville,
                NJ 08648

            
	 	
              Attention:           
                 Joseph
                A. Falsetti

            
	 	
              Telephone:         
                 609-219-0930

            
	 	
              Facsimile:            
                 609-219-1238

            
	 	 
	
              With
                a copy to:

            	
              Wolf,
                Block, Schorr and Solis-Cohen LLP

            
	 	
              250
                Park Avenue

            
	 	
              New
                York, NY 10177

            
	 	
              Attention:
                Herbert Henryson

            
	 	
              Telephone:
                (212) 883-4992

            
	 	
              Facsimile:
                (212) 672-1192

            
	 	 
	 	 

    

    

    

    If
      to an
      Investor, to its address and facsimile number on the Schedule of Investors
      attached hereto, with copies to such Investor’s representatives as set forth on
      the Schedule of Investors or to such other address and/or facsimile number
      and/or to the attention of such other person as the recipient party has
      specified by written notice given to each other party five (5) days prior to
      the
      effectiveness of such change. Written confirmation of receipt (A) given by
      the
      recipient of such notice, consent, waiver or other communication, (B)
      mechanically or electronically generated by the sender’s facsimile machine
      containing the time, date, recipient facsimile number and an image of the first
      page of such transmission or (C) provided by a courier or overnight courier
      service shall be rebuttable evidence of personal service, receipt by facsimile
      or receipt from a nationally recognized overnight delivery service in accordance
      with clause (i), (ii) or (iii) above, respectively.

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    (c)     Failure
      of any party to exercise any right or remedy under this Agreement or otherwise,
      or delay by a party in exercising such right or remedy, shall not operate as
      a
      waiver thereof.

    

    (d)     The
      parties hereto acknowledge that the transactions contemplated by this Agreement
      and the exhibits hereto bear a reasonable relation to the State of New York.
      The
      parties hereto agree that the internal laws of the State of New York shall
      govern this Agreement and the exhibits hereto, including, but not limited to,
      all issues related to usury. Any action to enforce the terms of this Agreement
      or any of its exhibits shall be brought exclusively in the state and/or federal
      courts situated in the County and State of New York. Each party hereby
      irrevocably waives personal service of process and consents to process being
      served in any such suit, action or proceeding by mailing a copy thereof to
      such
      party at the address for such notices to it under this Agreement and agrees
      that
      such service shall constitute good and sufficient service of process and notice
      thereof. Nothing contained herein shall be deemed to limit in any way any right
      to serve process in any manner permitted by law. If any provision of this
      Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity
      or unenforceability shall not affect the validity or enforceability of the
      remainder of this Agreement in that jurisdiction or the validity or
      enforceability of any provision of this Agreement in any other jurisdiction.
      EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT
      TO
      REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
      CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
      CONTEMPLATED HEREBY.

    

    (e)     This
      Agreement, the Irrevocable Transfer Agent Instructions, the Securities Purchase
      Agreement and related documents including the Convertible Debenture, the
      Warrants, and the Security Agreement dated the date hereof (the “Security
      Agreement”)
      constitute the entire agreement among the parties hereto with respect to the
      subject matter hereof and thereof. There are no restrictions, promises,
      warranties or undertakings, other than those set forth or referred to herein
      and
      therein. This Agreement, the Irrevocable Transfer Agent Instructions, the
      Securities Purchase Agreement and related documents including the Convertible
      Debenture, the Warrants, and the Security Agreement supersede all prior
      agreements and understandings among the parties hereto with respect to the
      subject matter hereof and thereof.

    

    (f)     This
      Agreement shall inure to the benefit of and be binding upon the permitted
      successors and assigns of each of the parties hereto.

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    (g)     The
      headings in this Agreement are for convenience of reference only and shall
      not
      limit or otherwise affect the meaning hereof.

    

    (h)     This
      Agreement may be executed in identical counterparts, each of which shall be
      deemed an original but all of which shall constitute one and the same agreement.
      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.

    

    (i)     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.

    

    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.

    

    (j)     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.

    

    

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

    

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

    

    

    IN
      WITNESS WHEREOF,
      the
      parties have caused this Registration Rights Agreement to be duly executed
      as of
      day and year first above written.

     

    
      
        	 	
                COMPANY:

              
	 	
                Cenuco,
                  Inc.

              
	 	 	 
	 	
                By:

              	 
	 	Name: Joseph
                A. Falsetti
	 	Title:   President
                and Chief Executive Officer

      

    

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      I

     

    SCHEDULE
      OF INVESTORS

    

    

    
      	
              Name

            	 	
               Signature

            	 	
              Address/Facsimile
                

              Number
                of Investors

            
	 	 	 	 	 	 
	 	 	 	 	 	 
	
              Prencen,
                LLC

            	 	By:	
                   

            	 	
              623
                Fifth Avenue, 32nd
                Fl.

            
	 	 	Name:	
               

            	 	
              New
                York, NY 10022

            
	 	 	Its:	
               

            	 	
              Telephone:
                (212) 

            
	 	 	 	 	 	
              Facsimile:
                (212) 756-1480

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    

    FORM
      OF NOTICE OF EFFECTIVENESS

    OF
      REGISTRATION STATEMENT

    

    

    Attention: 

    

    
      	 	
              Re:

            	
              CENUCO,
                INC.

            

    

    

    Ladies
      and Gentlemen:

    

    We
      are
      counsel to Cenuco, Inc., a Delaware corporation (the “Company”),
      and
      have represented the Company in connection with that certain Securities Purchase
      Agreement (the “Securities
      Purchase Agreement”)
      entered into by and among the Company and the investors named therein
      (collectively, the “Investors”)
      pursuant to which the Company issued to the Investors shares of its Common
      Stock, par value $0.001 per share (the “Common
      Stock”).
      Pursuant to the Purchase Agreement, the Company also has entered into a
      Registration Rights Agreement with the Investors (the “Investor
      Registration Rights Agreement”)
      pursuant to which the Company agreed, among other things, to register the
      Registrable Securities (as defined in the Registration Rights Agreement) under
      the Securities Act of 1933, as amended (the “Securities
      Act”).
      In
      connection with the Company’s obligations under the Registration Rights
      Agreement, on ____________ ____, the Company filed a Registration Statement
      on
      Form ________ (File No. 333-_____________) (the “Registration
      Statement”)
      with
      the Securities and Exchange SEC (the “SEC”)
      relating to the Registrable Securities which names each of the Investors as
      a
      selling stockholder there under.

    

    In
      connection with the foregoing, we advise you that a member of the SEC’s staff
      has advised us by telephone that the SEC has entered an order declaring the
      Registration Statement effective under the Securities Act at [ENTER
      TIME OF EFFECTIVENESS]
      on
[ENTER
      DATE OF EFFECTIVENESS]
      and we
      have no knowledge, after telephonic inquiry of a member of the SEC’s staff, that
      any stop order suspending its effectiveness has been issued or that any
      proceedings for that purpose are pending before, or threatened by, the SEC
      and
      the Registrable Securities are available for resale under the Securities Act
      pursuant to the Registration Statement.

     

    
      
        	 	
                Very
                  truly yours,

              	 
	 	 	 	 
	 	
                [Law
                  Firm]

              	 
	 	 	 	 
	 	
                By:

              	 	 

      

      

      
        	
                cc:

              	
                [LIST
                  NAMES OF INVESTORS]Exhibit 10.3

    
      

    

     

    SECURITIES
      PURCHASE AGREEMENT

    

    THIS SECURITIES
      PURCHASE AGREEMENT
      (this
“Agreement”),
      dated
      as of October 10, 2005, by and among CENUCO,
      INC.,
      a
      Delaware corporation (the “Company”),
      and
      the Buyer(s) listed on Schedule I attached hereto (individually, a
“Buyer”
or
      collectively “Buyers”).

     

    WITNESSETH:

    

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

    

    WHEREAS,
      the
      parties desire that, upon the terms and subject to the conditions contained
      herein, the Company shall issue and sell to the Buyer(s), as provided herein,
      and the Buyer(s) shall purchase (i) Forty Million Dollars ($40,000,000)
      principal amount of secured convertible debentures (the “Convertible
      Debentures”),
      which
      shall be convertible into shares of the Company’s common stock, par value $0.001
      (the “Common
      Stock”)
      (as
      converted, the “Conversion
      Shares”).
      Of
      such total principal amount, subject to the deduction of any and all fees,
      Forty
      Million Dollars ($40,000,000) shall be funded on the Closing Date, as defined
      below, and (ii) warrants (the “Warrants”)
      to
      purchase an aggregate of 1,052,631 shares of Common Stock (the “Warrant
      Shares”).
      The
      total purchase price for the Convertible Debentures and the Warrants shall
      be up
      to Forty Million Dollars ($40,000,000), (the “Purchase
      Price”)
      which
      Purchase Price shall be allocated among the Buyer(s) in the respective amounts
      set forth opposite each Buyer(s) name on Schedule I (the “Subscription
      Amount”);
      

    

    WHEREAS,
      on the
      Closing Date, the parties hereto shall execute and deliver a Registration Rights
      Agreement substantially in the form attached hereto as Exhibit
      A
      (the
“Investor
      Registration Rights Agreement”)
      pursuant to which the Company has agreed to provide certain registration rights
      under the Securities Act and the rules and regulations promulgated there under,
      and applicable state securities laws; 

    

    WHEREAS,
      on the
      Closing Date, the parties hereto shall execute and deliver a Security Agreement
      substantially in the form attached hereto as Exhibit
      B
      (the
“Security
      Agreement”)
      pursuant to which the Company has agreed to provide the Buyer(s) a security
      interest in Pledged Collateral (as this term is defined in the Security
      Agreement) to secure the Company’s obligations under this Agreement, the
      Convertible Debenture, the Investor Registration Rights Agreement, the
      Irrevocable Transfer Agent Instructions, as defined below, and the Security
      Agreement, ; and

    

    WHEREAS,
      on the
      Closing Date, the parties hereto shall execute and deliver an Irrevocable
      Transfer Agent Instructions substantially in the form attached hereto as
Exhibit
      D
      (the
“Irrevocable
      Transfer Agent Instructions”).

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

    

    1.     PURCHASE
      AND SALE OF CONVERTIBLE DEBENTURES.

    

    (a)     Purchase
      of Convertible Debentures.
      Subject
      to the satisfaction (or waiver) of the terms and conditions of this Agreement,
      each Buyer agrees, severally and not jointly, to purchase at Closing (as defined
      herein below) and the Company agrees to sell and issue to each Buyer, severally
      and not jointly, at Closing, Convertible Debentures in amounts corresponding
      with the Subscription Amount set forth opposite each Buyer’s name on Schedule I
      hereto and the Warrants set forth opposite each Buyer’s name on Schedule I
      hereto. 

    

    (b)     Closing
      Date.
      The
      closing of the purchase and sale of the Convertible Debentures and Warrants
      (the
“Closing”)
      shall
      take place at 10:00 a.m. Eastern Standard Time on the fifth (5th)
      business day following the date that the conditions to the Closing set forth
      herein and in Sections 7 and 8 below (or such later date as is mutually agreed
      to by the Company and the Buyer(s)) are satisfied (the “Closing
      Date”).
      The
      Closing shall occur on the Closing Date at the offices of Gottbetter &
Partners, LLP, 488 Madison Avenue, New York, New York 10022 (or such other
      place
      as is mutually agreed to by the Company and the Buyer(s)). 

    

    2.     BUYERS’
      REPRESENTATIONS AND WARRANTIES.

    

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

    

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

    

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

    

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

    

    (d)     Information.
      Each
      Buyer and its advisors (and his or, its counsel), if any, have been furnished
      with all materials relating to the business, finances and operations of the
      Company and information he deemed material to making an informed investment
      decision regarding his purchase of the Convertible Debentures, the Warrants,
      the
      Warrant Shares and the Conversion Shares, which have been requested by such
      Buyer. Each Buyer and its advisors, if any, have been afforded the opportunity
      to ask questions of the Company and its management. Neither such inquiries
      nor
      any other due diligence investigations conducted by such Buyer or its advisors,
      if any, or its representatives shall modify, amend or affect such Buyer’s right
      to rely on the Company’s representations and warranties contained in Section 3
      below. Each Buyer understands that its investment in the Convertible Debentures,
      the Warrants, the Warrant Shares and the Conversion Shares involves a high
      degree of risk. Each Buyer is in a position regarding the Company, which, based
      upon employment, family relationship or economic bargaining power, enabled
      and
      enables such Buyer to obtain information from the Company in order to evaluate
      the merits and risks of this investment. Each Buyer has sought such accounting,
      legal and tax advice, as it has considered necessary to make an informed
      investment decision with respect to its acquisition of the Convertible
      Debentures, the Warrants, the Warrant Shares and the Conversion
      Shares.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

    

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

    

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

    

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

    

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (i)     Receipt
      of Documents.
      Each
      Buyer and his or its counsel has received and read in their entirety: (i) this
      Agreement and each representation, warranty and covenant set forth herein,
      the
      Security Agreement, the Investor Registration Rights Agreement and the
      Irrevocable Transfer Agent Agreement; (ii) all due diligence and other
      information necessary to verify the accuracy and completeness of such
      representations, warranties and covenants; (iii) the Company’s Annual Report on
      Form 10-KSB for the fiscal year ended June 30, 2004; (iv) the Company’s
      Quarterly Report on Form 10-QSB for the fiscal quarters ended September 30,
      2004, December 31, 2004 and March 31, 2005; and (v) the Company’s Quarterly
      Report on Form 10-Q for the fiscal quarter ended May 28, 2005. Each Buyer has
      received answers to all questions such Buyer submitted to the Company regarding
      an investment in the Company; and each Buyer has relied on the information
      contained therein and has not been furnished any other documents, literature,
      memorandum or prospectus.

    

    (j)     Due
      Formation of Corporate and Other Buyers.
      If a
      Buyer is a corporation, trust, partnership, or other entity that is not an
      individual person, it has been formed and validly exists.

    

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

    

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

    

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

    

    3.     REPRESENTATIONS
      AND WARRANTIES OF THE COMPANY.

    

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

    

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b)     Authorization,
      Enforcement, Compliance with Other Instruments.
      (i) The Company has the requisite corporate power and authority to enter
      into and perform this Agreement, the Security Agreement, the Investor
      Registration Rights Agreement, the Irrevocable Transfer Agent Instructions,
      and
      any related agreements (collectively the “Transaction
      Documents”)
      and to
      issue the Convertible Debentures, the Warrants, the Warrant Shares and the
      Conversion Shares in accordance with the terms hereof and thereof, (ii) the
      execution and delivery of the Transaction Documents by the Company and the
      consummation by it of the transactions contemplated hereby and thereby,
      including, without limitation, the issuance of the Convertible Debentures,
      the
      Warrants, the Warrant Shares and the Conversion Shares and the reservation
      for
      issuance and the 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, except for approval of the stockholders of the Company
      as required by the rules of the American Stock Exchange, no further consent
      or
      authorization is required by the Company, its Board of Directors or its
      stockholders, (iii) the Transaction Documents have been duly executed and
      delivered by the Company, (iv) the Transaction Documents constitute the valid
      and binding obligations of the Company enforceable against the Company in
      accordance with their terms, except as such enforceability may be limited by
      general principles of equity or applicable bankruptcy, insolvency,
      reorganization, moratorium, liquidation or similar laws relating to, or
      affecting generally, the enforcement of creditors’ rights and remedies. The
      authorized officer of the Company executing the Transaction Documents knows
      of
      no reason why the Company cannot file the registration statement as required
      under the Investor Registration Rights Agreement or perform any of the Company’s
      other obligations under such documents. 

    

    (c)     Capitalization.
      As of
      the date hereof, and prior to the issuance of any shares in connection with
      this
      Agreement or the Standby Equity Distribution Agreement of even date herewith
      by
      and between the Company and Cornell Capital Partners, LP (“SEDA”),
      the
      authorized capital stock of the Company consists of 25,000,000 shares of Common
      Stock and 1,000,000 shares of preferred stock, $.001 par value per share (the
      “Preferred
      Stock”).
      As of
      the date of this Agreement, the Company has 13,826,556 shares of Common Stock
      and 2,553.6746 shares of Preferred Stock, designated as Series A Junior
      Participating Preferred Stock, issued and outstanding. All of such outstanding
      shares have been validly issued and are fully paid and nonassessable. Except
      as
      disclosed in the SEC Documents (as defined in Section 3(f)), no shares of Common
      Stock are subject to preemptive rights or any other similar rights or any liens
      or encumbrances suffered or permitted by the Company. Except as disclosed in
      the
      SEC Documents, as of the date of this Agreement, (i) there are no outstanding
      options, warrants, scrip, rights to subscribe to, calls or commitments of any
      character whatsoever relating to, or securities or rights convertible into,
      any
      shares of capital stock of the Company or any of its subsidiaries, or contracts,
      commitments, understandings or arrangements by which the Company or any of
      its
      subsidiaries is or may become bound to issue additional shares of capital stock
      of the Company or any of its subsidiaries or options, warrants, scrip, rights
      to
      subscribe to, calls or commitments of any character whatsoever relating to,
      or
      securities or rights convertible into, any shares of capital stock of the
      Company or any of its subsidiaries, (ii) there are no outstanding debt
      securities and (iii) there are no agreements or arrangements under which the
      Company or any of its subsidiaries is obligated to register the sale of any
      of
      their securities under the Securities Act (except pursuant to the Registration
      Rights Agreement, agreements relating to the SEDA transaction and related
      transactions) and (iv) there are no outstanding registration statements. There
      are no securities or instruments containing anti-dilution or similar provisions
      that will be triggered by the issuance of the Convertible Debentures and
      Warrants as described in this Agreement. The Convertible Debentures, Warrants,
      Warrant Shares and Conversion Shares when issued, will be free and clear of
      all
      pledges, liens, encumbrances and other restrictions (other than those arising
      under federal or state securities laws as a result of the private placement
      of
      the Convertible Debentures and Warrants). No co-sale right, right of first
      refusal or other similar right exists with respect to the Convertible
      Debentures, Warrants, Warrant Shares, and the Conversion Shares or the issuance
      and sale thereof. The issue and sale of the Debentures, Warrants, Warrant Shares
      and the Conversion Shares will not result in a right of any holder of Company
      securities to adjust the exercise, conversion, exchange or reset price under
      such securities. The Company has furnished to the Buyer(s) true and correct
      copies of the Company’s Certificate of Incorporation, as amended and as in
      effect on the date hereof (the “Certificate
      of Incorporation”),
      and
      the Company’s By-laws, as in effect on the date hereof (the “By-laws”),
      and
      the terms of all securities convertible into or exercisable for Common Stock
      and
      the material rights of the holders thereof in respect thereto other than stock
      options issued to employees and consultants. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (d)     Issuance
      of Securities.
      The
      Convertible Debentures are duly authorized and, upon issuance in accordance
      with
      the terms hereof, shall be duly issued, fully paid and nonassessable, are free
      from all taxes, liens and charges with respect to the issue thereof. The
      Conversion Shares and the Warrant Shares have been duly authorized and reserved
      for issuance. Upon conversion or exercise in accordance with the Transaction
      Documents, the Conversion Shares and the Warrant Shares will be duly issued,
      fully paid and nonassessable.

    

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (f)     SEC
      Documents: Financial Statements.
      Except
      as set forth in the SEC Documents and except for the filing of an interim Annual
      Report on Form 10-K for the period ended February 28, 2005, if required, the
      Company has filed all reports, schedules, forms, statements and other documents
      required to be filed by it with the SEC under of the Securities Exchange Act
      of
      1934, as amended (the “Exchange
      Act”)
      (all
      of the foregoing filed prior to the date hereof or amended after the date hereof
      and all exhibits included therein and financial statements and schedules thereto
      and documents incorporated by reference therein, being hereinafter referred
      to
      as the “SEC
      Documents”).
      The
      Company has delivered to the Buyer(s) or its/their representatives, or made
      available through the SEC’s website at http://www.sec.gov., true and complete
      copies of the SEC Documents. Except as set forth in the SEC Documents, as of
      their respective dates, the financial statements of the Company disclosed in
      the
      SEC Documents (the “Financial
      Statements”)
      complied as to form in all material respects with applicable accounting
      requirements and the published rules and regulations of the SEC with respect
      thereto. Such financial statements have been prepared in accordance with
      generally accepted accounting principles, consistently applied, during the
      periods involved (except (i) as may be otherwise indicated in such Financial
      Statements or the notes thereto, or (ii) in the case of unaudited interim
      statements, to the extent they may exclude footnotes or may be condensed or
      summary statements) and, fairly present in all material respects the financial
      position of the Company as of the dates thereof and the results of its
      operations and cash flows for the periods then ended (subject, in the case
      of
      unaudited statements, to normal year-end audit adjustments). No other written
      information, excluding any financial or business projections, provided by or
      on
      behalf of the Company to the Buyer(s) which is not included in the SEC
      Documents, including, without limitation, information referred to in this
      Agreement, contains any untrue statement of a material fact or omits to state
      any material fact necessary in order to make the statements therein, in the
      light of the circumstances under which they were made, not misleading.

    

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

    

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

    

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

    

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

    

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

    

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (n)     Environmental
      Laws.
      

    

    (i)     Each
      of
      the Company and its subsidiaries has complied with all applicable Environmental
      Laws (as defined below), except for violations of Environmental Laws that,
      individually or in the aggregate, have not had and would not reasonably be
      expected to have a material adverse effect on the assets, business, condition
      (financial or otherwise), or results of operations of the Company (a
“Material
      Adverse Effect”).
      There
      is no pending or, to the knowledge of the Company, threatened civil or criminal
      litigation, written notice of violation, formal administrative proceeding,
      or
      investigation, inquiry or information request, relating to any Environmental
      Law
      involving the Company or any subsidiary, except for litigation, notices of
      violations, formal administrative proceedings or investigations, inquiries
      or
      information requests that, individually or in the aggregate, have not had and
      would not reasonably be expected to have a Material Adverse Effect. For purposes
      of this Agreement, “Environmental Law” means any federal, state or local law,
      statute, rule or regulation or the common law relating to the environment or
      occupational health and safety, including without limitation any statute,
      regulation, administrative decision or order pertaining to (i) treatment,
      storage, disposal, generation and transportation of industrial, toxic or
      hazardous materials or substances or solid or hazardous waste; (ii) air, water
      and noise pollution; (iii) groundwater and soil contamination; (iv) the release
      or threatened release into the environment of industrial, toxic or hazardous
      materials or substances, or solid or hazardous waste, including without
      limitation emissions, discharges, injections, spills, escapes or dumping of
      pollutants, contaminants or chemicals; (v) the protection of wild life, marine
      life and wetlands, including without limitation all endangered and threatened
      species; (vi) storage tanks, vessels, containers, abandoned or discarded
      barrels, and other closed receptacles; and (vii) manufacturing, processing,
      using, distributing, treating, storing, disposing, transporting or handling
      of
      materials regulated under any law as pollutants, contaminants, toxic or
      hazardous materials or substances or oil or petroleum products or solid or
      hazardous waste. As used above, the terms “release” and “environment” shall have
      the meaning set forth in the Comprehensive Environmental Response, Compensation
      and Liability Act of 1980, as amended (“CERCLA”).

    

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

    

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

    

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

    

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

    

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

    

    (r)     Internal
      Accounting Controls.
      The
      Company and each of its subsidiaries maintain a system of internal accounting
      controls sufficient to provide reasonable assurance that (i) transactions are
      executed in accordance with management’s general or specific authorizations,
      (ii) transactions are recorded as necessary to permit preparation of financial
      statements in conformity with generally accepted accounting principles and
      to
      maintain asset accountability, and (iii) the recorded amounts for assets is
      compared with the existing assets at reasonable intervals and appropriate action
      is taken with respect to any differences.

    

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

    

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

    

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

    

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

    

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

    

    (y)     Anti-Takeover
      Provision.
      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 jurisdiction
      of
      incorporation that is or could become applicable to the Buyer(s) as a result
      of
      the Buyer(s) and the Company fulfilling their obligations or exercising their
      rights under this Agreement, including without limitation the Company’s issuance
      of the Convertible Debentures, Warrants, Warrant Shares and Conversion Shares
      and each Buyer’s ownership thereof.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    4.     COVENANTS.

    

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

    

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

    

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

    

    (d)     Use
      of
      Proceeds.
      The
      Company shall use the proceeds from the sale of the Convertible Debentures
      for
      general corporate and working capital purposes, but in no event shall the
      Company use the proceeds to repay any indebtedness of any Company insiders.
      

    

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

    

    (g)     Fees
      and Expenses.
      (i) At
      the Closing, the Company shall reimburse the Buyers for legal fees of up to
      an
      aggregate of Fifty Thousand Dollars ($50,000) incurred by the Buyers in
      connection with this transaction to Gottbetter & Partners, LLP at the
      Closing. The Company shall bear all of its own legal and professional fees
      and
      expenses, including but not limited to those associated with the filing of
      the
      registration statement as contemplated herein. Each of the Company and the
      Buyer(s) shall pay all costs and expenses incurred by such party in connection
      with the negotiation, investigation, preparation, execution and delivery of
      the
      Transaction Documents. At the Closing, the Company shall pay either Yorkville
      Advisors Management, LLC or Prentice Capital Management, LP a fee equal to
      six
      percent (6%) of the Purchase Price. 

    

    (ii)     The
      Company shall reimburse the Buyer(s) for expenses relating to due diligence
      up
      to an aggregate of Ten Thousand Dollars ($10,000), which shall be paid directly
      from the proceeds of the Closing. 

    

    (h)     Warrants.
      The
      Company shall issue to the Buyer(s) the Warrants in substantially the form
      attached hereto as Exhibit
      C.
      The
      Warrant Shares shall have such registration rights as set forth in the Investor
      Registration Rights Agreement. 

    

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (j)     Corporate
      Existence.
      So long
      as any of the Convertible Debentures remain outstanding, if the Company engages
      in any merger, consolidation, sale of all or substantially all of the Company’s
      assets or any similar transaction, the Company shall make appropriate provision
      with respect to such holders’ rights and interests to insure that the provisions
      of this Section 4(i) will thereafter be applicable to the Convertible
      Debentures.

    

    (k)     Transactions
      With Affiliates.
      So long
      as any Convertible Debentures are outstanding, the Company shall not, and shall
      cause each of its subsidiaries not to, enter into, amend, modify or supplement,
      or permit any subsidiary to enter into, amend, modify or supplement any
      agreement, transaction, commitment, or arrangement with any of its or any
      subsidiary’s officers, directors, person who were officers or directors at any
      time during the previous two (2) years, stockholders who beneficially own five
      percent (5%) or more of the Common Stock, or Affiliates (as defined below)
      or
      with any individual related by blood, marriage, or adoption to any such
      individual or with any entity in which any such entity or individual owns a
      five
      percent (5%) or more beneficial interest (each a “Related
      Party”),
      except for (a) customary employment arrangements and benefit programs on
      reasonable terms, (b) any investment in an Affiliate of the Company, (c) any
      agreement, transaction, commitment, or arrangement on an arms-length basis
      on
      terms no less favorable than terms which would have been obtainable from a
      person other than such Related Party, or (d) any agreement, transaction,
      commitment, or arrangement which is approved by a majority of the disinterested
      directors of the Company. For purposes hereof, any director who is also an
      officer of the Company or any subsidiary of the Company shall not be a
      disinterested director with respect to any agreement, transaction, commitment,
      or arrangement. “Affiliate”
for
      purposes hereof means, with respect to any person or entity, another person
      or
      entity that, directly or indirectly, (i) has a ten percent (10%) or more equity
      interest in that person or entity, (ii) has ten percent (10%) or more common
      ownership with that person or entity, (iii) controls that person or entity,
      or
      (iv) shares common control with that person or entity. “Control”
or
      “controls”
for
      purposes hereof means that a person or entity has the power, direct or indirect,
      to conduct or govern the policies of another person or entity.

    

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

    

    (m)    Restriction
      on Issuance of the Capital Stock.
      So long
      as any Convertible Debentures or the Warrants are outstanding, other than
      securities issued in connection with the SEDA, and other than securities issued
      pursuant to options, warrants or convertible securities outstanding on the
      date
      hereof or otherwise issued in accordance with the terms hereof, the Company
      shall not, without the prior written consent of the Buyer(s), (i) issue or
      sell
      shares of Common Stock or Preferred Stock without consideration or for a
      consideration per share less than the Closing Bid Price of the Common Stock
      determined immediately prior to its issuance, (ii) issue any warrant, option,
      right, contract, call, or other security instrument granting the holder thereof,
      the right to acquire Common Stock without consideration or for a consideration
      less than such Common Stock’s Closing Bid Price value determined immediately
      prior to its issuance, (iii) enter into any security instrument granting the
      holder a security interest in any and all assets of the Company, or (iv)
file
      any
      registration statement on Form S-8 except to register up to 5,000,000 shares
      of
      the Common Stock to be issued under a stock option plan providing for the
      issuance of incentive stock options and non-statutory stock options to the
      Company’s non-executive employees,
      provided
      that (x) such shares are not issued without consideration or for a consideration
      less than the Common Stock’s closing Bid Price on the date of issuance or the
      date on which the obligation to issue any such shares of capital stock first
      arose, and (y) such Form S-8 registration statement is not filed prior to 90
      days following the effectiveness of the registration statement. “Closing Bid
      Price” on any day shall be the closing bid price for a share of Common Stock on
      such date on the American Stock Exchange (or such other exchange, market, or
      other system that the Common Stock is then traded on), as reported on Bloomberg,
      L.P. (or similar organization or agency succeeding to its functions of reporting
      prices).

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

    

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

    

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (q)     Removal
      of Legend.
      Provided that all conditions to the removal of the applicable restrictive legend
      have been satisfied, in addition to the Buyer(s)’ other available remedies, the
      Company shall pay to the Buyer(s),
      in
      cash, as partial liquidated damages and not as a penalty, for each $1,000 of
      Warrant Shares and/or Conversion Shares (based on the closing price of the
      Common Stock on the date such Warrant Shares and/or Conversion Shares are
      submitted to the Company’s transfer agent), $5 per trading day (increasing to
      $10 per trading day five (5) trading days after such damages have begun to
      accrue) for each trading day after the tenth (10th) trading day following
      delivery by a Buyer to the Company or the Company’s transfer agent of a
      certificate representing Warrant Shares and/or Conversion Shares issued with
      a
      restrictive legend, until such certificate is delivered to the Buyer(s)
      with
      such legend removed. Nothing herein shall limit the Buyer’s right to pursue
      actual damages for the failure of the Company and its transfer agent to deliver
      certificates representing any securities as required hereby or by the
      Irrevocable Transfer Agent Instructions, and the Buyer(s)
      shall
      have the right to pursue all remedies available to it at law or in equity,
      including, without limitation, a decree of specific performance and/or
      injunctive relief.

    

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

    

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

    

    5.     TRANSFER
      AGENT INSTRUCTIONS.

    

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    6.     LIMITATION
      ON CONVERSION.

    

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

    

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

    

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

    

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

    

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

    (v)     The
      Buyer(s) shall have received an opinion of counsel from Wolf, Block, Schorr
      and
      Solis-Cohen LLP and Taylor, Colicchio and Silverman, LLP in a form reasonably
      satisfactory to the Buyer(s).

    

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (vii)     The
      Company’s shareholders approve (i) the transactions contemplated by the
      Transaction Documents, and (ii) increase the authorized shares to
      225,000,000.

    

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

    

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

    

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

    

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

    

    (xii)     The
      Company shall have entered into an agreement with Cornell Capital Partners,
      LP,
      for a One Hundred Million Dollar ($100,000,000) SEDA and execute all documents
      thereto and provide a written use of proceeds for the Purchase Price.

    

    (xiii)     The
      Company shall have executed an Asset Purchase Agreement with Playtex Products,
      Inc. and Playtex Manufacturing, Inc., in a form reasonably satisfactory to
      the
      Buyer(s). 

    

    9.     INDEMNIFICATION.

    

    (a)     In
      consideration of the Buyer’s execution and delivery of this Agreement and
      acquiring the Convertible Debentures, the Warrants and the Conversion Shares
      hereunder, and in addition to all of the Company’s other obligations under this
      Agreement, the Company shall defend, protect, indemnify and hold harmless the
      Buyer(s) and each other holder of the Convertible Debentures, the Warrants
      and
      the Conversion Shares, and all of their officers, directors, employees and
      agents (including, without limitation, those retained in connection with
      the transactions contemplated by this Agreement) (collectively, the
“Buyer
      Indemnitees”)
      from
      and against any and all actions, causes of action, suits, claims, losses, costs,
      penalties, fees, liabilities and damages, and expenses in connection therewith
      (irrespective of whether any such Buyer Indemnitee is a party to the action
      for
      which indemnification hereunder is sought), and including reasonable attorneys’
fees and disbursements (the “Indemnified
      Liabilities”),
      incurred by the Buyer Indemnitees or any of them as a result of, or arising
      out
      of, or relating to (a) any misrepresentation or breach of any representation
      or
      warranty made by the Company in this Agreement, the Convertible Debentures
      or
      the Investor Registration Rights Agreement, (b) any breach of any covenant,
      agreement or obligation of the Company contained in this Agreement, or the
      Investor Registration Rights Agreement or any other certificate, instrument
      or
      document contemplated hereby or thereby, or (c) any cause of action, suit or
      claim brought or made against such Indemnitee and arising out of or resulting
      from the execution, delivery, performance or enforcement of this Agreement
      or
      any other instrument, document or agreement executed pursuant hereto by any
      of
      the Indemnities, any transaction financed or to be financed in whole or in
      part,
      directly or indirectly, with the proceeds of the issuance of the Convertible
      Debentures or the status of the Buyer or holder of the Convertible Debentures,
      the Warrants or the Conversion Shares, as a Buyer of Convertible Debentures,
      the
      Warrants or the Conversion Shares in the Company. To the extent that the
      foregoing undertaking by the Company may be unenforceable for any reason, the
      Company shall make the maximum contribution to the payment and satisfaction
      of
      each of the Indemnified Liabilities, which is permissible under applicable
      law.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

    

    10.     GOVERNING
      LAW: MISCELLANEOUS.

    

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

    

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

    

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

    

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

    

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

    

    
      	
              If
                to the Company, to:

            	
              Cenuco,
                Inc.

            
	 	
              200
                Lenox Drive

            
	 	
              Lawrenceville,
                NJ 08645

            
	 	
              Attention:           
                 Joseph
                A. Falsetti

            
	 	
              Telephone:         
                 (609)
                219-0930

            
	 	
              Facsimile:             
                (609)
                219-1238

            
	 	 
	
              With
                a copy to:

            	
              Wolf,
                Block, Schorr and Solis-Cohen LLP

            
	 	
              250
                Park Avenue

            
	 	
              New
                York, NY 10177

            
	 	
              Attn:
                 Herbert
                Henryson

            
	 	
              Telephone:          
                (212)
                883-4992

            
	 	
              Facsimile:             
                (212)
                672-1192

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	 
	
              If
                to the Transfer Agent, to:

            	
              American
                Stock Transfer & Trust Company

            
	 	
              59
                Maiden Lane

              Plaza
                Level

            
	 	
              New
                York, NY 10038

            
	 	
              Attention:
                [ ]

            
	 	
              Telephone:        
                 (212)
                936-5100

            
	 	
              Facsimile:            
                (718)
                921-8328

            

    

    

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

    

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

    

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

    

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

    

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

    

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

    

    (l)     Termination.
      In the
      event that the Closing shall not have occurred with respect to the Buyer(s)
      on
      or before December 31, 2005 due to the Company’s or the Buyer’s failure to
      satisfy the conditions set forth in Sections 7 and 8 above (and any
      non-breaching party’s failure to waive such unsatisfied condition(s)), any
      non-breaching party shall have the option to terminate this Agreement at the
      close of business on such date without liability of any party to any other
      party; provided, however, that if this Agreement is terminated by the Company
      pursuant to this Section 10(l), the Company shall remain obligated to reimburse
      the Buyer(s) for the fees and expenses of Gottbetter & Partners, LLP
      described in Section 4(g) above.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (m)    No
      Strict Construction.
      The
      language used in this Agreement will be deemed to be the language chosen by
      the
      parties to express their mutual intent, and no rules of strict construction
      will
      be applied against any party.

    

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

    

    

    [REMAINDER
      PAGE INTENTIONALLY LEFT BLANK]

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

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

    

    

    
      	 	
              COMPANY:

            
	 	
              CENUCO,
                INC. 

            
	 	 
	 	
              By:

            	 
	 	Name: Joseph
              A. Falsetti
	 	Title: Chief
              Executive Officer

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      A

    

    FORM
      OF INVESTOR REGISTRATION RIGHTS AGREEMENT

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      B

    

    SECURITY
      AGREEMENT

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      C

    

    WARRANT

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      D

    

    IRREVOCABLE
      TRANSFER AGENT INSTRUCTIONS

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      E

     

    SCHEDULE
      OF BUYERS 

     

    
      	
              Name

            	 	 	
              Signature

            	 	
              Address/Facsimile

              Number
                of Buyer

            	 	
              Amount
                of Subscription

            	 	
              Number
                of Warrants

            
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	
              Highgate
                House Funds, Ltd.

            	 	By:	
                 

            	 	
              488
                Madison Avenue

            	 	
              $6,000,000

            	 	
              157,895

            
	 	 	Name:	
                Adam
                S. Gottbetter

            	 	
              New
                York, NY 10022

            	 	 	 	 
	 	 	Its: 	
               
                Portfolio Manager

            	 	
              Telephone:
                (212) 400-6990

            	 	 	 	 
	 	 	 	 	 	
              Facsimile:
                (212) 400-6901

            	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	
              With
                a copy to: 

            	 	 	
              Jason
                Rimland, Esq.

            	 	
              Gottbetter
                & Partners, LLP

              488
                Madison Avenue

            	 	 	 	 
	 	 	 	 	 	
              New
                York, NY 10022

            	 	 	 	 
	 	 	 	 	 	
              Telephone:
                (212) 400-6900

            	 	 	 	 
	 	 	 	 	 	
              Facsimile:
                (212) 400-6901

            	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	
              Prencen,
                LLC

            	 	By:
              PRENTICE
              CAPITAL MANAGEMENT,  LP,
              as Manager	 	
              623
                Fifth Avenue. 32nd
                Fl

            	 	
              $34,000,000

            	 	
              894,736

            
	 	 	By:	
                   

            	 	
              New
                York, NY 10022

            	 	 	 	 
	 	 	 	
              Name: 
                Michael Weiss

            	 	
              Telephone:
                (212) 756-8045

            	 	 	 	 
	 	 	 	
              Title: 
                Chief Financial Officer

            	 	
              Facsimile:
                (212) 7561480

            	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	
              With
                a copy to:

            	 	Jason
              Rimland, Esq.	 	
              Gottbetter
                & Partners, LLP

              488
                Madison Avenue

            	 	 	 	 
	 	 	 	 	 	
              New
                York, NY 10022

            	 	 	 	 
	 	 	 	 	 	
              Telephone:
                (212) 400-6900

            	 	 	 	 
	 	 	 	 	 	
              Facsimile:
                (212) 400-6901

            	 	 	 	 

    

     

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