Document:

Exhibit 4.6

        THIS NOTE AND THE COMMON STOCK  ISSUABLE UPON  CONVERSION OF
        THIS NOTE HAVE NOT BEEN AND WILL NOT BE REGISTERED  WITH THE
        UNITED  STATES  SECURITIES  AND EXCHANGE  COMMISSION  OR THE
        SECURITIES  COMMISSION OF ANY STATE PURSUANT TO AN EXEMPTION
        FROM REGISTRATION PROVIDED UNDER THE SECURITIES ACT OF 1933,
        AS  AMENDED,  AND  THE  RULES  AND  REGULATIONS  PROMULGATED
        THEREUNDER (THE "1933 ACT")

                                                                   US $34,650.00

                                 TUNGSTEN CORP.
                         8% CONVERTIBLE REDEEMABLE NOTE
                             DUE SEPTEMBER 10, 2015

     FOR VALUE RECEIVED,  Tungsten Corp. (the "Company")  promises to pay to the
order of LG CAPITAL  FUNDING,  LLC and its  authorized  successors and permitted
assigns  ("Holder"),  the aggregate principal face amount of exactly Thirty Four
Thousand Six Hundred  Fifty  Dollars  (U.S.  $34,650.00)  on September  10, 2015
("Maturity  Date")  and to pay  interest  on the  principal  amount  outstanding
hereunder at the rate of 8% per annum  commencing  on September  10, 2014.  This
Note  contains a 5% original  issue  discount  such that the  purchase  price is
$33,000.00.  The interest  will be paid to the Holder in whose name this Note is
registered on the records of the Company regarding registration and transfers of
this Note.  The  principal  of, and  interest  on, this Note are payable at 1218
Union Street,  Suite #2, Brooklyn,  NY 11225,  initially,  and if changed,  last
appearing on the records of the Company as  designated  in writing by the Holder
hereof from time to time.  The Company  will pay each  interest  payment and the
outstanding  principal due upon this Note before or on the Maturity  Date,  less
any amounts  required by law to be deducted or  withheld,  to the Holder of this
Note by check or wire  transfer  addressed  to such  Holder at the last  address
appearing on the records of the Company.  The  forwarding  of such check or wire
transfer shall constitute a payment of outstanding principal hereunder and shall
satisfy and  discharge the liability for principal on this Note to the extent of
the sum represented by such check or wire transfer. Interest shall be payable in
Common Stock (as defined below) pursuant to paragraph 4(b) herein.

     This Note is subject to the following additional provisions:

     1. This Note is  exchangeable  for an equal aggregate  principal  amount of
Notes  of  different  authorized  denominations,  as  requested  by  the  Holder
<PAGE>
surrendering  the same. No service charge will be made for such  registration or
transfer or exchange, except that Holder shall pay any tax or other governmental
charges payable in connection therewith.

     2. The Company  shall be entitled to withhold from all payments any amounts
required to be withheld under applicable laws.

     3. This Note may be transferred  or exchanged  only in compliance  with the
Securities Act of 1933, as amended ("Act") and applicable state securities laws.
Any attempted transfer to a non-qualifying party shall be treated by the Company
as void. Prior to due presentment for transfer of this Note, the Company and any
agent of the  Company  may  treat  the  person  in whose  name this Note is duly
registered on the Company's  records as the owner hereof for all other purposes,
whether or not this Note be overdue,  and neither the Company nor any such agent
shall be  affected or bound by notice to the  contrary.  Any Holder of this Note
electing to exercise the right of  conversion  set forth in Section 4(a) hereof,
in addition to the  requirements  set forth in Section 4(a), and any prospective
transferee  of  this  Note,  also  is  required  to  give  the  Company  written
confirmation  that this Note is being converted  ("Notice of Conversion") in the
form  annexed  hereto as Exhibit A. The date of  receipt  (including  receipt by
telecopy) of such Notice of Conversion shall be the Conversion Date.

     4. (a) The  Holder of this Note is  entitled,  at its  option,  at any time
after 180 days,  to convert  all or any amount of the  principal  face amount of
this Note then  outstanding  into  shares of the  Company's  common  stock  (the
"Common  Stock")  without   restrictive   legend  of  any  nature,  at  a  price
("Conversion  Price") for each share of Common  Stock equal to 65% of the LOWEST
TRADING PRICE of the Common Stock as reported on the National  Quotations Bureau
OTCQB exchange which the Company's  shares are traded or any exchange upon which
the  Common  Stock may be traded in the future  ("Exchange"),  for the TEN prior
trading days  including the day upon which a Notice of Conversion is received by
the Company  (provided  such Notice of  Conversion  is delivered by fax or other
electronic  method of communication to the Company after 4 P.M. Eastern Standard
or Daylight  Savings  Time if the Holder  wishes to include the same day closing
price). If the shares have not been delivered within 3 business days, the Notice
of Conversion  may be rescinded.  Such  conversion  shall be  effectuated by the
Company  delivering  the shares of Common Stock to the Holder  within 3 business
days of receipt by the Company of the Notice of Conversion.  Once the Holder has
received such shares of Common Stock,  the Holder shall  surrender  this Note to
the  Company,  executed by the Holder  evidencing  such  Holder's  intention  to
convert  this Note or a specified  portion  hereof,  and  accompanied  by proper
assignment  hereof in blank.  Accrued,  but unpaid  interest shall be subject to
conversion.  No fractional shares or scrip representing fractions of shares will
be issued on conversion,  but the number of shares  issuable shall be rounded to
the nearest whole share.  IN THE EVENT THE COMPANY  EXPERIENCES A DTC "CHILL" ON
ITS SHARES,  THE CONVERSION PRICE SHALL BE DECREASED TO 55% INSTEAD OF 65% WHILE
THAT  "CHILL" IS IN EFFECT.  In no event shall the Holder be allowed to effect a
conversion  if such  conversion,  along with all other shares of Company  Common
Stock  beneficially  owned by the Holder and its affiliates would exceed 9.9% of
the outstanding shares of the Common Stock of the Company.

     (b) Interest on any unpaid principal  balance of this Note shall be paid at
the rate of 8% per annum.  Interest shall be paid by the Company in Common Stock

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<PAGE>
("Interest Shares").  Holder may, at any time, send in a Notice of Conversion to
the Company for Interest  Shares  based on the formula  provided in Section 4(a)
above.  The dollar  amount  converted  into  Interest  Shares  shall be all or a
portion of the accrued interest  calculated on the unpaid  principal  balance of
this Note to the date of such notice.

     (c)  During the first 180 days  after the Note has been  issued,  it may be
prepaid at 150% of the face amount plus any accrued  interest  This Note may not
be  prepaid  after the 180th  day.  The  redemption  must be closed and paid for
within 3 business  days of the  Company  sending  the  redemption  demand or the
redemption will be invalid and the Company may not redeem this Note.

     (d) Upon (i) a transfer  of all or  substantially  all of the assets of the
Company to any person in a single transaction or series of related transactions,
(ii) a reclassification,  capital  reorganization or other change or exchange of
outstanding  shares of the Common  Stock,  other than a forward or reverse stock
split or stock  dividend,  or (iii) any  consolidation  or merger of the Company
with or into another  person or entity in which the Company is not the surviving
entity (other than a merger which is effected solely to change the  jurisdiction
of incorporation of the Company and results in a reclassification, conversion or
exchange  of  outstanding  shares of Common  Stock  solely into shares of Common
Stock) (each of items (i), (ii) and (iii) being  referred to as a "Sale Event"),
then, in each case, the Company shall,  upon request of the Holder,  redeem this
Note in cash for 150% of the principal amount,  plus accrued but unpaid interest
through the date of  redemption,  or at the election of the Holder,  such Holder
may convert the unpaid  principal  amount of this Note (together with the amount
of accrued but unpaid interest) into shares of Common Stock immediately prior to
such Sale Event at the Conversion Price.

     (e)  In  case  of  any  Sale  Event  (not  to  include  a  sale  of  all or
substantially all of the Company's assets) in connection with which this Note is
not redeemed or  converted,  the Company shall cause  effective  provision to be
made so that the  Holder  of this  Note  shall  have the  right  thereafter,  by
converting  this Note, to purchase or convert this Note into the kind and number
of shares of stock or other  securities or property  (including cash) receivable
upon   such   reclassification,   capital   reorganization   or  other   change,
consolidation or merger by a holder of the number of shares of Common Stock that
could have been purchased  upon exercise of the Note and at the same  Conversion
Price,  as defined  in this  Note,  immediately  prior to such Sale  Event.  The
foregoing  provisions  shall similarly  apply to successive Sale Events.  If the
consideration  received by the holders of Common  Stock is other than cash,  the
value  shall be as  determined  by the  Board of  Directors  of the  Company  or
successor person or entity acting in good faith.

     5. No  provision of this Note shall alter or impair the  obligation  of the
Company,  which is absolute  and  unconditional,  to pay the  principal  of, and
interest on, this Note at the time,  place,  and rate,  and in the form,  herein
prescribed.

     6. The Company hereby  expressly waives demand and presentment for payment,
notice of non-payment, protest, notice of protest, notice of dishonor, notice of
acceleration  or intent to  accelerate,  and  diligence  in taking any action to

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<PAGE>
collect amounts called for hereunder and shall be directly and primarily  liable
for the payment of all sums owing and to be owing hereto.

     7. The Company agrees to pay all costs and expenses,  including  reasonable
attorneys' fees and expenses,  which may be incurred by the Holder in collecting
any amount due under this Note.

     8. If one or more of the  following  described  "Events of  Default"  shall
occur:

     (a) The Company  shall  default in the payment of  principal or interest on
this Note or any other note issued to the Holder by the Company; or

     (b) Any of the  representations or warranties made by the Company herein or
in any  certificate  or  financial or other  written  statements  heretofore  or
hereafter  furnished  by or on  behalf of the  Company  in  connection  with the
execution and delivery of this Note, or the Securities  Purchase Agreement under
which this note was issued shall be false or misleading in any respect; or

     (c) The  Company  shall fail to perform or  observe,  in any  respect,  any
covenant,  term,  provision,  condition,  agreement or obligation of the Company
under this Note or any other note issued to the Holder; or

     (d) The  Company  shall (1)  become  insolvent;  (2) admit in  writing  its
inability to pay its debts generally as they mature;  (3) make an assignment for
the benefit of creditors or commence proceedings for its dissolution;  (4) apply
for or consent to the  appointment of a trustee,  liquidator or receiver for its
or for a substantial  part of its property or business;  (5) file a petition for
bankruptcy relief,  consent to the filing of such petition or have filed against
it an  involuntary  petition for bankruptcy  relief,  all under federal or state
laws as applicable; or

     (e) A trustee, liquidator or receiver shall be appointed for the Company or
for a substantial part of its property or business without its consent and shall
not be discharged within sixty (60) days after such appointment; or

     (f) Any governmental  agency or any court of competent  jurisdiction at the
instance of any governmental agency shall assume custody or control of the whole
or any substantial portion of the properties or assets of the Company; or

     (g) One or more  money  judgments,  writs or  warrants  of  attachment,  or
similar process, in excess of fifty thousand dollars ($50,000) in the aggregate,
shall be entered or filed against the Company or any of its  properties or other
assets and shall remain unpaid, unvacated,  unbonded or unstayed for a period of
fifteen  (15) days or in any event later than five (5) days prior to the date of
any proposed sale thereunder; or

     (h) The Company  shall have  defaulted on or breached any term of any other
note of similar debt instrument into which the Company has entered and failed to
cure such default within the appropriate grace period; or

                                       4
<PAGE>
     (i) The  Company  shall have its Common  Stock  delisted  from an  exchange
(including  the OTCBB  exchange)  or, if the Common Stock trades on an exchange,
then trading in the Common Stock shall be suspended for more than 10 consecutive
days;

     (j) If a majority of the members of the Board of  Directors  of the Company
on the date hereof are no longer serving as members of the Board;

     (k) The Company  shall not deliver to the Holder the Common Stock  pursuant
to paragraph 4 herein without  restrictive  legend within 3 business days of its
receipt of a Notice of Conversion; or

     (l) The Company  shall not  replenish  the reserve set forth in Section 12,
within 3 business days of the request of the Holder.

     (m) The Company  shall not be "current" in its filings with the  Securities
and Exchange Commission; or

     (n) The  Company  shall  lose the  "bid"  price  for its stock and a market
(including the OTCBB marketplace or other exchange)

Then,  or at any time  thereafter,  unless cured within 5 days,  and in each and
every such case,  unless such Event of Default shall have been waived in writing
by the Holder (which waiver shall not be deemed to be a waiver of any subsequent
default) at the option of the Holder and in the Holder's  sole  discretion,  the
Holder may consider this Note immediately due and payable,  without presentment,
demand,  protest  or  (further)  notice  of  any  kind  (other  than  notice  of
acceleration),  all of which are hereby expressly waived,  anything herein or in
any note or other instruments contained to the contrary notwithstanding, and the
Holder may immediately,  and without expiration of any period of grace,  enforce
any and all of the  Holder's  rights and remedies  provided  herein or any other
rights or remedies  afforded by law.  Upon an Event of Default,  interest  shall
accrue at a default  interest rate of 24% per annum or, if such rate is usurious
or not permitted by current law, then at the highest rate of interest  permitted
by law. In the event of a breach of Section  8(k) the penalty  shall be $250 per
day the  shares  are not issued  beginning  on the 4th day after the  conversion
notice was delivered to the Company. This penalty shall increase to $500 per day
beginning  on the 10th day. The penalty for a breach of Section 8(n) shall be an
increase  of the  outstanding  principal  amounts by 20%. In case of a breach of
Section 8(i),  the  outstanding  principal due under this Note shall increase by
50%. If this Note is not paid at maturity,  the outstanding  principal due under
this Note shall increase by 10%.

If the Holder shall  commence an action or proceeding to enforce any  provisions
of this Note, including,  without limitation,  engaging an attorney, then if the
Holder  prevails in such action,  the Holder shall be  reimbursed by the Company
for  its  attorneys'  fees  and  other  costs  and  expenses   incurred  in  the
investigation, preparation and prosecution of such action or proceeding.

     9. In case  any  provision  of this  Note is held by a court  of  competent
jurisdiction  to be excessive in scope or  otherwise  invalid or  unenforceable,

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<PAGE>
such provision shall be adjusted rather than voided, if possible,  so that it is
enforceable to the maximum extent possible,  and the validity and enforceability
of the  remaining  provisions  of this Note will not in any way be  affected  or
impaired thereby.

     10.  Neither  this  Note  nor  any  term  hereof  may be  amended,  waived,
discharged  or  terminated  other  than by a  written  instrument  signed by the
Company and the Holder.

     11. The Company  represents  that it is not a "shell"  issuer and has never
been a "shell" issuer or that if it previously has been a "shell" issuer that at
least 12  months  have  passed  since  the  Company  has  reported  form 10 type
information  indicating it is no longer a "shell  issuer.  Further.  The Company
will  instruct  its  counsel  to  either  (i) write a 144  opinion  to allow for
salability  of the  conversion  shares or (ii) accept such opinion from Holder's
counsel.

     12.  The  Company  shall  issue  irrevocable  transfer  agent  instructions
reserving  38,769,000 shares of its Common Stock for conversions under this Note
(the "Share  Reserve").  The reserve shall be replenished as needed to allow for
conversions  of this  Note.  Upon  full  conversion  of this  Note,  any  shares
remaining in the Share  Reserve  shall be  cancelled.  The Company shall pay all
costs  associated with issuing and delivering the shares.  The company should at
all times  reserve a minimum of four times the amount of shares  required if the
note would be fully converted.  The Holder may reasonably request increases from
time to time to reserve such amounts.

     13.  The  Company  will give the  Holder  direct  notice  of any  corporate
actions,   including   but  not   limited  to  name   changes,   stock   splits,
recapitalizations  etc.  This  notice  shall be given to the  Holder  as soon as
possible under law.

     14. This Note shall be governed by and  construed  in  accordance  with the
laws of New York applicable to contracts made and wholly to be performed  within
the State of New York and shall be binding  upon the  successors  and assigns of
each party hereto.  The Holder and the Company  hereby  mutually  waive trial by
jury and consent to exclusive  jurisdiction and venue in the courts of the State
of New York. This Agreement may be executed in  counterparts,  and the facsimile
transmission of an executed  counterpart to this Agreement shall be effective as
an original.

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<PAGE>
     IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by
an officer thereunto duly authorized.

Dated: _____________

                            TUNGSTEN CORP.

                            By: __________________________________

                            Title: _______________________________

                                       7
<PAGE>
                                    EXHIBIT A

                              NOTICE OF CONVERSION

     (To be Executed by the Registered Holder in order to Convert the Note)

     The undersigned hereby  irrevocably  elects to convert  $___________ of the
above Note into _________  Shares of Common Stock of Tungsten  Corp.  ("Shares")
according  to the  conditions  set forth in such  Note,  as of the date  written
below.

     If  Shares  are to be  issued  in the  name  of a  person  other  than  the
undersigned,  the undersigned  will pay all transfer and other taxes and charges
payable with respect thereto.

Date of Conversion:
                   ------------------------------------------------------------
Applicable Conversion Price:
                            ---------------------------------------------------
Signature:
          ---------------------------------------------------------------------
               [Print Name of Holder and Title of Signer]
Address:
        -----------------------------------------------------------------------

SSN or EIN:
           -----------------------------------------

Shares are to be registered in the following name:

Name:
     --------------------------------------------------------------------------

Address:
        -----------------------------------------------------------------------
Tel:
     ---------------------------------------------------------------
Fax:
     ------------------------------------------------

SSN or EIN:
           --------------------------------------------------------------------

Shares are to be sent or delivered to the following account:

Account Name:
             ------------------------------------------------------------------

Address:
        -----------------------------------------------------------------------

                                       8Exhibit 10.4

                          SECURITIES PURCHASE AGREEMENT

     This SECURITIES  PURCHASE AGREEMENT (the  "Agreement"),  dated as of August
29, 2014, by and between TUNGSTEN CORP., a NEVADA corporation, with headquarters
located at 1671 SW 105 LANE, DAVIE, FL 33324 (the "Company"), and MAGNA EQUITIES
II, LLC, a New York corporation, with its address at 5 Hanover Square, New York,
New York 10004 (the "Buyer").

                                    WHEREAS:

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

     B. Buyer  desires to purchase  and the  Company  desires to issue and sell,
upon the terms and  conditions  set forth in this  Agreement an 12%  convertible
note of the Company,  in the form attached hereto as Exhibit A, in the aggregate
principal  amount of $9,250  (together  with any note(s)  issued in  replacement
thereof or as a dividend thereon or otherwise with respect thereto in accordance
with the terms thereof, the "Note"),  convertible into shares of common stock of
the Company (the "Common Stock"),  upon the terms and subject to the limitations
and conditions set forth in such Note.

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

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

     1. Purchase and Sale of Note.

      a. Purchase of Note. On the initial Closing Date (as defined  below),  the
Company  shall issue and sell to the Buyer and the Buyer agrees to purchase from
the Company such principal amount of Note as is set forth  immediately below the
Buyer's name on the signature pages hereto.

      b. Form of Payment.  On the Closing Date (as defined below), (i) the Buyer
shall pay the  purchase  price  for the Note to be issued  and sold to it at the
Closing  (as  defined  below)  (the  "Purchase   Price")  by  wire  transfer  of
immediately  available  funds to the Company,  in accordance  with the Company's
written  wiring  instructions,  against  delivery  of the Note in the  principal
amount equal to the Purchase Price as is set forth immediately below the Buyer's
name on the signature pages hereto, and (ii) the Company shall deliver such duly
executed  on behalf of the  Company,  to the  Buyer,  against  delivery  of such
Purchase Price.

      c. Closing Date.  Subject to the  satisfaction  (or written waiver) of the
conditions thereto set forth in Section 6 and Section 7 below, the date and time
of the issuance and sale of the Note  pursuant to this  Agreement  (the "Closing
Date") shall be 12:00 noon,  Eastern  Standard  Time on August 29, 2014, or such
other mutually agreed upon time. The closing of the transactions contemplated by
this Agreement (the "Closing")  shall occur on the Closing Date at such location
as may be agreed to by the parties.

     2.  Buyer's  Representations  and  Warranties.  The  Buyer  represents  and
warrants to the Company that:

      a. Investment  Purpose. As of the date hereof, the Buyer is purchasing the
Note and the shares of Common Stock  issuable  upon  conversion  of or otherwise
pursuant to the Note (including,  without limitation,  such additional shares of
Common  Stock,  if any, as are  issuable (i) on account of interest on the Note,
(ii) as a result of the events  described in Sections 1.3 and 1.4(g) of the Note
or (iii) in payment of the  Standard  Liquidated  Damages  Amount (as defined in
Section  2(f) below)  pursuant to this  Agreement,  such shares of Common  Stock
being  collectively   referred  to  herein  as  the  "Conversion   Shares"  and,
collectively with the Note, the "Securities") for its own account and not with a
present view towards the public sale or distribution thereof, except pursuant to
sales  registered or exempted from  registration  under the 1933 Act;  provided,
however, that by making the representations  herein, the Buyer does not agree to
hold any of the  Securities  for any minimum or other specific term and reserves
the  right  to  dispose  of the  Securities  at any time in  accordance  with or
pursuant to a registration statement or an exemption under the 1933 Act.
<PAGE>
      b. Accredited  Investor Status.  The Buyer is an "accredited  investor" as
that term is defined in Rule 501(a) of Regulation D (an "Accredited Investor").

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

      d. Information.  The Buyer and its advisors, if any, have been, and for so
long as the Note remain  outstanding  will  continue to be,  furnished  with all
materials  relating to the business,  finances and operations of the Company and
materials  relating  to the offer  and sale of the  Securities  which  have been
requested by the Buyer or its advisors. The Buyer and its advisors, if any, have
been,  and for so long as the  Note  remain  outstanding  will  continue  to be,
afforded the  opportunity to ask questions of the Company.  Notwithstanding  the
foregoing,  the Company has not  disclosed to the Buyer any  material  nonpublic
information and will not disclose such  information  unless such  information is
disclosed to the public prior to or promptly  following  such  disclosure to the
Buyer.  Neither  such  inquiries  nor  any  other  due  diligence  investigation
conducted by Buyer or any of its advisors or representatives shall modify, amend
or affect Buyer's right to rely on the Company's  representations and warranties
contained in Section 3 below.  The Buyer  understands that its investment in the
Securities  involves a significant degree of risk. The Buyer is not aware of any
facts that may constitute a breach of any of the Company's  representations  and
warranties made herein.

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

      f. Transfer or Re-sale.  The Buyer understands that (i) the sale or resale
of the Securities has not been and is not being registered under the 1933 Act or
any applicable  state securities laws, and the Securities may not be transferred
unless  (a) the  Securities  are  sold  pursuant  to an  effective  registration
statement under the 1933 Act, (b) the Buyer shall have delivered to the Company,
at the cost of the Buyer, an opinion of counsel that shall be in form, substance
and scope  customary for opinions of counsel in comparable  transactions  to the
effect that the Securities to be sold or transferred  may be sold or transferred
pursuant to an exemption from such registration, which opinion shall be accepted
by the Company, (c) the Securities are sold or transferred to an "affiliate" (as
defined in Rule 144 promulgated  under the 1933 Act (or a successor rule) ("Rule
144")) of the Buyer who agrees to sell or otherwise transfer the Securities only
in accordance with this Section 2(f) and who is an Accredited Investor,  (d) the
Securities  are  sold  pursuant  to Rule  144,  or (e) the  Securities  are sold
pursuant to Regulation S under the 1933 Act (or a successor  rule)  ("Regulation
S"),  and the Buyer  shall have  delivered  to the  Company,  at the cost of the
Buyer,  an  opinion  of  counsel  that  shall be in form,  substance  and  scope
customary for opinions of counsel in corporate transactions, which opinion shall
be accepted by the Company; (ii) any sale of such Securities made in reliance on
Rule 144 may be made only in accordance with the terms of said Rule and further,
if  said  Rule  is  not  applicable,   any  re-sale  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 1933 Act) may
require compliance with some other exemption under the 1933 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 1933 Act or
any state  securities  laws or to comply  with the terms and  conditions  of any
exemption  thereunder (in each case).  Notwithstanding the foregoing or anything
else  contained  herein  to the  contrary,  the  Securities  may be  pledged  as
collateral  in  connection  with a bona fide  margin  account  or other  lending
arrangement.

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

     "NEITHER  THE  ISSUANCE  AND  SALE OF THE  SECURITIES  REPRESENTED  BY THIS
     CERTIFICATE NOR THE SECURITIES INTO WHICH THESE  SECURITIES ARE EXERCISABLE
     HAVE BEEN  REGISTERED  UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED,  OR
     APPLICABLE  STATE  SECURITIES  LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR
     SALE, SOLD,  TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE
     REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933,

                                       2
<PAGE>
     AS AMENDED,  OR (B) AN OPINION OF COUNSEL  (WHICH COUNSEL SHALL BE SELECTED
     BY THE HOLDER),  IN A GENERALLY  ACCEPTABLE FORM, THAT  REGISTRATION IS NOT
     REQUIRED  UNDER SAID ACT OR (II) UNLESS  SOLD  PURSUANT TO RULE 144 OR RULE
     144A UNDER SAID ACT.  NOTWITHSTANDING THE FOREGOING,  THE SECURITIES MAY BE
     PLEDGED  IN  CONNECTION  WITH A BONA FIDE  MARGIN  ACCOUNT OR OTHER LOAN OR
     FINANCING ARRANGEMENT SECURED BY THE SECURITIES."

     The legend set forth above  shall be removed and the Company  shall issue a
certificate  without such legend to the holder of any Security  upon which it is
stamped,  if, unless otherwise required by applicable state securities laws, (a)
such Security is registered for sale under an effective  registration  statement
filed  under  the  1933 Act or  otherwise  may be sold  pursuant  to Rule 144 or
Regulation  S without any  restriction  as to the number of  securities  as of a
particular  date that can then be immediately  sold, or (b) such holder provides
the Company with an opinion of counsel,  in form,  substance and scope customary
for opinions of counsel in comparable transactions,  to the effect that a public
sale or transfer of such  Security  may be made without  registration  under the
1933 Act,  which  opinion  shall be  accepted by the Company so that the sale or
transfer is effected.  The Buyer agrees to sell all Securities,  including those
represented  by a  certificate(s)  from which the legend  has been  removed,  in
compliance  with applicable  prospectus  delivery  requirements,  if any. In the
event that the Company  does not accept the  opinion of counsel  provided by the
Buyer with respect to the transfer of Securities  pursuant to an exemption  from
registration,  such as Rule 144 or  Regulation  S, at the  Deadline,  it will be
considered an Event of Default pursuant to Section 3.2 of the Note.

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

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

     3.  Representations  and Warranties of the Company.  The Company represents
and warrants to the Buyer that:

      a.   Organization  and   Qualification.   The  Company  and  each  of  its
Subsidiaries  (as defined  below),  if any,  is a  corporation  duly  organized,
validly  existing and in good  standing  under the laws of the  jurisdiction  in
which it is incorporated, with full power and authority (corporate and other) to
own,  lease,  use and operate its properties and to carry on its business as and
where now owned, leased, used, operated and conducted.  Schedule 3(a) sets forth
a list of all of the  Subsidiaries of the Company and the  jurisdiction in which
each is incorporated. The Company and each of its Subsidiaries is duly qualified
as a  foreign  corporation  to do  business  and is in good  standing  in  every
jurisdiction  in which its  ownership  or use of  property  or the nature of the
business  conducted by it makes such  qualification  necessary  except where the
failure to be so qualified or in good standing would not have a Material Adverse
Effect.  "Material  Adverse  Effect"  means any material  adverse  effect on the
business, operations, assets, financial condition or prospects of the Company or
its Subsidiaries,  if any, taken as a whole, or on the transactions contemplated
hereby or by the  agreements  or  instruments  to be entered into in  connection
herewith.  "Subsidiaries"  means any corporation or other organization,  whether
incorporated  or  unincorporated,   in  which  the  Company  owns,  directly  or
indirectly, any equity or other ownership interest.

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

                                       3
<PAGE>
      c. Capitalization.  As of the date hereof, the authorized capital stock of
the Company  consists of: (i) shares of Common Stock, of which shares are issued
and outstanding;  no shares are reserved for issuance  pursuant to the Company's
stock option plans,  no shares are reserved for issuance  pursuant to securities
(other than the Note)  exercisable  for, or convertible into or exchangeable for
shares of Common Stock and a suitable amount of shares are reserved for issuance
upon  conversion of the Note  (subject to  adjustment  pursuant to the Company's
covenant  set forth in Section 4(g) below).  All of such  outstanding  shares of
capital stock are, or upon issuance will be, duly  authorized,  validly  issued,
fully  paid and  non-assessable  and have  been  issued in  compliance  with all
federal and state securities laws. No shares of capital stock of the Company are
subject to preemptive  rights or any other similar rights of the shareholders of
the Company or any liens or encumbrances  imposed through the actions or failure
to act of the Company. As of the effective date of this Agreement, (i) there are
no outstanding options,  warrants,  scrip, rights to subscribe for, puts, calls,
rights of first refusal, agreements, understandings, claims or other commitments
or rights of any  character  whatsoever  relating  to, or  securities  or rights
convertible  into or exchangeable for any shares of capital stock of the Company
or any of its  Subsidiaries,  or arrangements by which the Company or any of its
Subsidiaries is or may become bound to issue additional  shares of capital stock
of the  Company  or any of its  Subsidiaries,  (ii) there are no  agreements  or
arrangements  under which the Company or any of its Subsidiaries is obligated to
register the sale of any of its or their securities under the 1933 Act and (iii)
there are no  anti-dilution  or price  adjustment  provisions  contained  in any
security issued by the Company (or in any agreement providing rights to security
holders)  that will be triggered  by the issuance of the Note or the  Conversion
Shares.  The Company has  furnished to the Buyer true and correct  copies of the
Company's  Certificate  of  Incorporation  as  in  effect  on  the  date  hereof
("Certificate of Incorporation"), the Company's Bylaws, as in effect on the date
hereof (the  "By-laws"),  and the terms of all  securities  convertible  into or
exercisable  for Common  Stock of the  Company  and the  material  rights of the
holders thereof in respect  thereto.  The Company shall provide the Buyer with a
written update of this representation signed by the Company's Chief Executive on
behalf of the Company as of the Closing Date.

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

      e.  Acknowledgment of Dilution.  The Company  understands and acknowledges
the  potentially  dilutive  effect to the Common  Stock upon the issuance of the
Conversion Shares upon conversion of the Note. The Company further  acknowledges
that its obligation to issue  Conversion  Shares upon  conversion of the Note in
accordance  with  this  Agreement,   the  Note  is  absolute  and  unconditional
regardless  of the dilutive  effect that such issuance may have on the ownership
interests of other shareholders of the Company.

      f.  No  Conflicts.  The  execution,   delivery  and  performance  of  this
Agreement,  the Note by the Company and the  consummation  by the Company of the
transactions contemplated hereby and thereby (including, without limitation, the
issuance and  reservation  for issuance of the  Conversion  Shares) will not (i)
conflict  with or result in a violation of any provision of the  Certificate  of
Incorporation or By-laws or (ii) violate or conflict with, or result in a breach
of any  provision  of, or constitute a default (or an event which with notice or
lapse of time or both  could  become a  default)  under,  or give to others  any
rights  of  termination,   amendment,   acceleration  or  cancellation  of,  any
agreement,  indenture, patent, patent license or instrument to which the Company
or any of its  Subsidiaries  is a party,  or (iii)  result in a violation of any
law, rule,  regulation,  order,  judgment or decree (including federal and state
securities  laws  and   regulations  and  regulations  of  any   self-regulatory
organizations to which the Company or its securities are subject)  applicable to
the Company or any of its  Subsidiaries or by which any property or asset of the
Company  or any of its  Subsidiaries  is  bound  or  affected  (except  for such
conflicts, defaults, terminations, amendments, accelerations,  cancellations and
violations  as would  not,  individually  or in the  aggregate,  have a Material
Adverse Effect). Neither the Company nor any of its Subsidiaries is in violation
of its Certificate of Incorporation,  By-laws or other organizational  documents
and neither the Company nor any of its  Subsidiaries is in default (and no event
has occurred which with notice or lapse of time or both could put the Company or
any of its  Subsidiaries in default)  under,  and neither the Company nor any of
its  Subsidiaries  has taken any action or failed to take any action  that would
give  to  others  any  rights  of   termination,   amendment,   acceleration  or
cancellation of, any agreement,  indenture or instrument to which the Company or
any of its  Subsidiaries  is a party or by which any  property  or assets of the
Company or any of its  Subsidiaries  is bound or  affected,  except for possible
defaults as would not, individually or in the aggregate, have a Material Adverse
Effect.  The  businesses  of the Company and its  Subsidiaries,  if any, are not
being  conducted,  and shall not be conducted so long as a Buyer owns any of the
Securities, in violation of any law, ordinance or regulation of any governmental
entity.  Except as  specifically  contemplated by this Agreement and as required
under the 1933 Act and any applicable  state securities laws, the Company is not
required to obtain any consent, authorization or order of, or make any filing or

                                       4
<PAGE>
registration  with, any court,  governmental  agency,  regulatory  agency,  self
regulatory  organization  or stock  market or any third party in order for it to
execute,  deliver or perform any of its obligations  under this  Agreement,  the
Note in  accordance  with the terms  hereof or  thereof or to issue and sell the
Note in accordance with the terms hereof and to issue the Conversion Shares upon
conversion  of the Note.  All  consents,  authorizations,  orders,  filings  and
registrations  which the Company is required to obtain pursuant to the preceding
sentence  have been  obtained or effected  on or prior to the date  hereof.  The
Company is not in violation of the listing  requirements of the Over-the-Counter
Bulletin Board (the "OTCQB") and does not reasonably  anticipate that the Common
Stock will be delisted by the OTCQB in the foreseeable  future.  The Company and
its Subsidiaries are unaware of any facts or circumstances which might give rise
to any of the foregoing.

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

     h.  Absence of  Certain  Changes.  Since the date of the  latest  financial
statements included in the SEC reports: (i) there has been no event,  occurrence
or development  that has had or that could reasonably be expected to result in a
Material  Adverse  Effect,  (ii) the Company has not  incurred  any  liabilities
(contingent  or otherwise)  other than (A) trade  payables and accrued  expenses
incurred in the ordinary  course of business  consistent  with past practice and
(B)  liabilities  not  required  to be  reflected  in  the  Company's  financial
statements  pursuant to generally  accepted  accounting  principles  ("GAAP") or
disclosed  in filings  made with the SEC,  (iii) the Company has not altered its
method of accounting,  (iv) the Company has not declared or made any dividend or
distribution  of  cash or  other  property  to its  stockholders  or  purchased,
redeemed or made any  agreements to purchase or redeem any shares of its capital
stock and (v) the Company has not issued any equity  securities  to any officer,
director or affiliate,  except  pursuant to existing  Company  equity  incentive
plans.  The  Company  does not  have  pending  before  the SEC any  request  for
confidential treatment of information. Except for the issuance of the Securities
contemplated by this Agreement,  no event, liability or development has occurred
or exists with respect to the Company or its  Subsidiaries  or their  respective
business, properties,  operations or financial condition, that would be required
to be disclosed by the Company under applicable securities laws at the time this
representation  is made or deemed made that has not been  publicly  disclosed at
least one trading day prior to the date that this representation is made.

      i. Absence of Litigation.  There is no action,  suit,  claim,  proceeding,
inquiry  or  investigation  before or by any  court,  public  board,  government
agency, self-regulatory organization or body pending or, to the knowledge of the
Company or any of its Subsidiaries,  threatened against or affecting the Company
or any of its Subsidiaries,  or their officers or directors in their capacity as
such,  that could have a  Material  Adverse  Effect.  Schedule  3(i)  contains a
complete list and summary description of any pending or, to the knowledge of the
Company,  threatened  proceeding  against or affecting the Company or any of its
Subsidiaries, without regard to whether it would have a Material Adverse Effect.
The Company and its Subsidiaries are unaware of any facts or circumstances which
might give rise to any of the foregoing.

                                       5
<PAGE>
      j. Patents, Copyrights, etc. The Company and each of its Subsidiaries owns
or  possesses  the  requisite  licenses  or  rights to use all  patents,  patent
applications,  patent rights, inventions,  know-how, trade secrets,  trademarks,
trademark applications, service marks, service names, trade names and copyrights
("Intellectual  Property") necessary to enable it to conduct its business as now
operated (and, as presently contemplated to be operated in the future); there is
no claim or action by any person pertaining to, or proceeding pending, or to the
Company's knowledge threatened,  which challenges the right of the Company or of
a Subsidiary with respect to any Intellectual Property necessary to enable it to
conduct its  business as now operated  (and,  as  presently  contemplated  to be
operated in the future); to the best of the Company's  knowledge,  the Company's
or its Subsidiaries'  current and intended  products,  services and processes do
not  infringe on any  Intellectual  Property or other rights held by any person;
and the Company is unaware of any facts or  circumstances  which might give rise
to any of the  foregoing.  The Company and each of its  Subsidiaries  have taken
reasonable  security measures to protect the secrecy,  confidentiality and value
of their Intellectual Property.

      k. No Materially  Adverse  Contracts,  Etc. Neither the Company nor any of
its   Subsidiaries  is  subject  to  any  charter,   corporate  or  other  legal
restriction,  or any judgment,  decree,  order,  rule or regulation which in the
judgment of the  Company's  officers  has or is expected in the future to have a
Material  Adverse Effect.  Neither the Company nor any of its  Subsidiaries is a
party to any  contract  or  agreement  which in the  judgment  of the  Company's
officers  has or is  expected  to have a Material  Adverse  Effect.  Neither the
Company nor any  Subsidiary:  (i) is in default under or in violation of (and no
event has occurred  that has not been waived that,  with notice or lapse of time
or both, would result in a default by the Company or any Subsidiary  under), nor
has the  Company  or any  Subsidiary  received  notice of a claim  that it is in
default  under or that it is in  violation  of,  any  indenture,  loan or credit
agreement or any other  material  agreement or instrument to which it is a party
or by which it or any of its properties is bound (whether or not such default or
violation  has been  waived),  (ii) is in  violation  of any order of any court,
arbitrator  or  governmental  body or (iii) is or has been in  violation  of any
statute,  rule or regulation of any governmental  authority,  including  without
limitation all foreign, federal, state and local laws applicable to its business
and all such laws that affect the  environment,  except in each of the foregoing
cases as could not have or  reasonably  be  expected  to  result  in a  Material
Adverse Effect.

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

      m. Certain Transactions.  Except for arm's length transactions pursuant to
which the Company or any of its  Subsidiaries  makes  payments  in the  ordinary
course of business upon terms no less  favorable  than the Company or any of its
Subsidiaries  could obtain from third  parties and other than the grant of stock
options  disclosed  on  Schedule  3(c),  none  of the  officers,  directors,  or
employees  of the  Company  is  presently  a party to any  transaction  with the
Company  or any of its  Subsidiaries  (other  than for  services  as  employees,
officers and directors),  including any contract, agreement or other arrangement
providing for the furnishing of services to or by,  providing for rental of real
or personal property to or from, or otherwise  requiring payments to or from any
officer,  director or such  employee or, to the  knowledge  of the Company,  any
corporation,  partnership, trust or other entity in which any officer, director,
or any such  employee  has a  substantial  interest or is an officer,  director,
trustee or partner.

      n.  Disclosure.  All information  relating to or concerning the Company or
any of its  Subsidiaries  set forth in this  Agreement and provided to the Buyer
pursuant  to  Section  2(d)  hereof  and  otherwise  in   connection   with  the
transactions  contemplated  hereby is true and correct in all material  respects
and the Company has not omitted to state any material fact necessary in order to
make the statements made herein or therein,  in light of the circumstances under
which they were made, not misleading.  No event or circumstance  has occurred or
exists with  respect to the Company or any of its  Subsidiaries  or its or their
business,  properties,  prospects,  operations or financial  conditions,  which,
under  applicable  law,  rule  or  regulation,  requires  public  disclosure  or
announcement  by the  Company but which has not been so  publicly  announced  or
disclosed  (assuming for this purpose that the Company's reports filed under the
1934 Act are being incorporated into an effective  registration  statement filed
by the Company under the 1933 Act).

                                       6
<PAGE>
      o.  Acknowledgment  Regarding  Buyer' Purchase of Securities.  The Company
acknowledges and agrees that the Buyer is acting solely in the capacity of arm's
length   purchasers  with  respect  to  this  Agreement  and  the   transactions
contemplated hereby. The Company further acknowledges that no Buyer is acting as
a financial  advisor or  fiduciary  of the Company (or in any similar  capacity)
with respect to this Agreement and the transactions  contemplated hereby and any
statement made by any Buyer or any of their respective representatives or agents
in connection with this Agreement and the  transactions  contemplated  hereby is
not advice or a recommendation  and is merely  incidental to the Buyer' purchase
of the  Securities.  The  Company  further  represents  to the  Buyer  that  the
Company's  decision to enter into this  Agreement  has been based  solely on the
independent evaluation of the Company and its representatives.

      p. No Integrated Offering. Neither the Company, nor any of its affiliates,
nor any person  acting on behalf of the  Company or such  affiliate,  will sell,
offer for sale, or solicit offers to buy or otherwise  negotiate with respect to
any security (as defined in the 1933 Act) which will be integrated with the sale
of the  securities  in a manner  which  would  require the  registration  of the
securities  under the Securities Act of 1933, or require  stockholder  approval,
under the rules and regulations of the trading market for the common stock.  The
Company will take all action that is appropriate or necessary to assure that its
offerings  of  other  securities  will not be  integrated  for  purposes  of the
Securities Act of 1933 or the rules and regulations of the trading market,  with
the issuance of securities contemplated hereby.

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

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

      s. Environmental Matters.

     (i) There are, to the Company's  knowledge,  with respect to the Company or
any of its  Subsidiaries or any  predecessor of the Company,  no past or present
violations of  Environmental  Laws (as defined below),  releases of any material
into the environment,  actions, activities,  circumstances,  conditions, events,
incidents,  or  contractual  obligations  which may give rise to any  common law
environmental  liability or any liability under the Comprehensive  Environmental
Response,  Compensation  and  Liability Act of 1980 or similar  federal,  state,
local or foreign  laws and neither the Company nor any of its  Subsidiaries  has
received  any notice  with  respect to any of the  foregoing,  nor is any action
pending or, to the Company's knowledge, threatened in connection with any of the
foregoing.  The term  "Environmental  Laws" means all federal,  state,  local or
foreign  laws  relating  to  pollution  or  protection  of human  health  or the
environment  (including,   without  limitation,   ambient  air,  surface  water,
groundwater,  land surface or subsurface strata), including, without limitation,
laws  relating to  emissions,  discharges,  releases or  threatened  releases of
chemicals,  pollutants contaminants,  or toxic or hazardous substances or wastes
(collectively,   "Hazardous  Materials")  into  the  environment,  or  otherwise
relating to the manufacture,  processing, distribution, use, treatment, storage,
disposal,  transport  or  handling  of  Hazardous  Materials,  as  well  as  all
authorizations,   codes,  decrees,  demands  or  demand  letters,   injunctions,
judgments,  licenses,  notices  or notice  letters,  orders,  permits,  plans or
regulations issued, entered, promulgated or approved thereunder.

     (ii)  Other  than those that are or were  stored,  used or  disposed  of in
compliance with applicable law, no Hazardous Materials are contained on or about
any real property  currently owned,  leased or used by the Company or any of its
Subsidiaries,  and no  Hazardous  Materials  were  released on or about any real
property  previously  owned,  leased  or  used  by  the  Company  or  any of its
Subsidiaries  during the period the  property  was owned,  leased or used by the
Company or any of its Subsidiaries, except in the normal course of the Company's
or any of its Subsidiaries' business.

                                       7
<PAGE>
     (iii) There are no underground  storage tanks on or under any real property
owned,  leased or used by the Company or any of its Subsidiaries that are not in
compliance with applicable law.

      t. Title to  Property.  The  Company  and its  Subsidiaries  have good and
marketable  title in fee  simple to all real  property  and good and  marketable
title to all personal  property  owned by them which is material to the business
of the Company and its  Subsidiaries,  in each case free and clear of all liens,
encumbrances  and defects  except such as are described in Schedule 3(t) or such
as would not have a Material  Adverse  Effect.  Any real property and facilities
held under  lease by the  Company  and its  Subsidiaries  are held by them under
valid,  subsisting and enforceable leases with such exceptions as would not have
a Material Adverse Effect.

      u.  Insurance.  The  Company and each of its  Subsidiaries  are insured by
insurers of recognized  financial  responsibility  against such losses and risks
and in such  amounts as  management  of the  Company  believes to be prudent and
customary  in the  businesses  in which the  Company  and its  Subsidiaries  are
engaged.  Neither the Company nor any such  Subsidiary has any reason to believe
that it will not be able to renew its  existing  insurance  coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may
be  necessary  to continue its business at a cost that would not have a Material
Adverse Effect. The Company has provided to Buyer true and correct copies of all
policies  relating to directors' and officers'  liability  coverage,  errors and
omissions coverage, and commercial general liability coverage.

      v. Internal Accounting  Controls.  Except as set forth in the SEC Reports,
the Company is in material  compliance with all provisions of the Sarbanes-Oxley
Act of 2002 which are  applicable to it as of the Closing Date.  The Company and
the Subsidiaries maintain a system of internal accounting controls sufficient to
provide  reasonable  assurance that: (i) transactions are executed in accordance
with  management's  general or specific  authorizations,  (ii)  transactions are
recorded  as  necessary  to  permit  preparation  of  financial   statements  in
conformity  with GAAP and to  maintain  asset  accountability,  (iii)  access to
assets is permitted  only in accordance  with  management's  general or specific
authorization,  and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.  The Company has established disclosure controls and
procedures  (as defined in Exchange Act Rules  13a-15(e) and  15d-15(e)) for the
Company and designed  such  disclosure  controls and  procedures  to ensure that
information  required to be  disclosed by the Company in the reports it files or
submits under the Exchange Act is recorded, processed,  summarized and reported,
within the time  periods  specified  in the  Commission's  rules and forms.  The
Company's  certifying officers have evaluated the effectiveness of the Company's
disclosure  controls and  procedures as of the end of the period  covered by the
Company's most recently filed periodic report under the Exchange Act (such date,
the  "Evaluation  Date").  The  Company  presented  in its most  recently  filed
periodic  report  under  the  Exchange  Act the  conclusions  of the  certifying
officers about the effectiveness of the disclosure controls and procedures based
on their evaluations as of the Evaluation Date. Since the Evaluation Date, there
have been no changes in the Company's internal control over financial  reporting
(as such term is defined in the Exchange Act) that has materially  affected,  or
is reasonably likely to materially  affect,  the Company's internal control over
financial reporting.

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

      x.  Solvency.  The  Company  (after  giving  effect  to  the  transactions
contemplated by this Agreement) is solvent (i.e.,  its assets have a fair market
value in excess of the amount  required to pay its probable  liabilities  on its
existing  debts as they become  absolute and matured) and  currently the Company
has no  information  that would lead it to reasonably  conclude that the Company
would  not,  after  giving  effect  to  the  transaction  contemplated  by  this
Agreement, have the ability to, nor does it intend to take any action that would
impair its  ability to, pay its debts from time to time  incurred in  connection
therewith as such debts mature.  The Company did not receive a qualified opinion
from its  auditors  with respect to its most recent  fiscal year end and,  after
giving  effect to the  transactions  contemplated  by this  Agreement,  does not
anticipate or know of any basis upon which its auditors  might issue a qualified
opinion in respect of its current fiscal year.

                                       8
<PAGE>
     y.  Application  of  Takeover  Protections.  The  Company  and the Board of
Directors  have  taken  all  necessary  action,  if  any,  in  order  to  render
inapplicable any control share acquisition,  business  combination,  poison pill
(including  any  distribution   under  a  rights  agreement)  or  other  similar
anti-takeover  provision under the Company's  certificate of  incorporation  (or
similar charter  documents) or the laws of its state of incorporation that is or
could  become  applicable  to the Buyer as a result of the Buyer and the Company
fulfilling  their  obligations or exercising  their rights under the Transaction
Documents, including without limitation as a result of the Company's issuance of
the Securities and the Buyer' ownership of the Securities.

     z. No  Investment  Company.  The Company is not,  and upon the issuance and
sale  of the  Securities  as  contemplated  by  this  Agreement  will  not be an
"investment  company" required to be registered under the Investment Company Act
of  1940  (an  "Investment  Company").  The  Company  is  not  controlled  by an
Investment Company.

     aa.  No  Disagreements  with  Accountants  and  Lawyers;   Outstanding  SEC
Comments.  There  are  no  disagreements  of any  kind  presently  existing,  or
reasonably  anticipated  by the  Company to arise,  between  the Company and the
accountants  and lawyers  formerly or presently  employed by the Company and the
Company is or immediately after the Closing Date will be current with respect to
any fees owed to its  accountants  which could affect the  Company's  ability to
perform any of its obligations under any of the Transaction Documents. There are
no unresolved  comments or inquiries  received by the Company or its  Affiliates
from the SEC which remain unresolved as of the date hereof.

     bb. Bad Actor Disqualification.

     (i) No  Disqualification  Events.  With respect to Securities to be offered
and sold hereunder in reliance on Rule 506 under the Securities Act ("Regulation
D Securities"),  none of the Company,  any of its  predecessors,  any affiliated
issuer,  any  director,   executive  officer,   other  officer  of  the  Company
participating  in the  offering,  any  beneficial  owner  of 20% or  more of the
Company's  outstanding  voting  equity  securities,  calculated  on the basis of
voting  power,  nor any  promoter (as that term is defined in Rule 405 under the
Securities  Act)  connected with the Company in any capacity at the time of sale
(each, an "Issuer Covered Person" and,  together,  "Issuer Covered  Persons") is
subject  to  any  of  the  "Bad  Actor"  disqualifications   described  in  Rule
506(d)(1)(i)  to (viii) under the Securities Act (a  "Disqualification  Event"),
except for a  Disqualification  Event covered by Rule  506(d)(2) or (d)(3).  The
Company has exercised  reasonable  care to determine  whether any Issuer Covered
Person is subject to a Disqualification  Event. The Company has complied, to the
extent  applicable,  with its disclosure  obligations under Rule 506(e), and has
furnished to the  Placement  Agent and the  Purchaser a copy of any  disclosures
provided thereunder.

     (ii) Other Covered Persons. The Company is not aware of any person that (i)
has been or will be paid (directly or indirectly)  remuneration for solicitation
of  Purchaser  in  connection  with the sale of the  Securities  and (ii) who is
subject to a Disqualification Event.

     (iii)  Notice of  Disqualification  Events.  The  Company  will  notify the
Purchaser in writing of (i) any  Disqualification  Event  relating to any Issuer
Covered Person and (ii) any event that would, with the passage of time, become a
Disqualification  Event  relating  to any Issuer  Covered  Person,  prior to any
Closing of this Offering.

     cc. Breach of Representations and Warranties by the Company. If the Company
breaches any of the  representations  or warranties set forth in this Section 3,
and in addition to any other  remedies  available to the Buyer  pursuant to this
Agreement,  it will be  considered  an Event of default under Section 3.4 of the
Note.

     4. COVENANTS.

     a. Best Efforts. The parties shall use their best efforts to satisfy timely
each of the conditions described in Section 6 and 7 of this Agreement.

     b. Form D; Blue Sky Laws.  The Company agrees to file a Form D with respect
to the Securities as required  under  Regulation D and to provide a copy thereof
to the Buyer  promptly after such filing.  The Company  shall,  on or before the
Closing  Date,  take such action as the Company  shall  reasonably  determine is
necessary  to qualify  the  Securities  for sale to the Buyer at the  applicable
closing  pursuant to this Agreement  under  applicable  securities or "blue sky"

                                       9
<PAGE>
laws of the states of the United  States  (or to obtain an  exemption  from such
qualification),  and shall  provide  evidence of any such action so taken to the
Buyer on or prior to the Closing Date.

     c. Use of Proceeds.  The Company shall use the proceeds for general working
capital purposes.

     d. Right of First  Refusal.  Unless it shall have  first  delivered  to the
Buyer,  at least  seventy  two (72) hours  prior to the  closing of such  Future
Offering (as defined  herein),  written notice  describing  the proposed  Future
Offering,  including the terms and  conditions  thereof and proposed  definitive
documentation  to be entered into in  connection  therewith,  and  providing the
Buyer an option  during the seventy two (72) hour period  following  delivery of
such notice to purchase the securities  being offered in the Future  Offering on
the same terms as contemplated by such Future Offering (the limitations referred
to in this sentence and the preceding  sentence are collectively  referred to as
the "Right of First Refusal") (and subject to the exceptions  described  below),
the Company will not conduct any equity financing (including debt with an equity
component) ("Future  Offerings") during the period beginning on the Closing Date
and ending two (two) years  following  the Closing  Date. In the event the terms
and  conditions of a proposed  Future  Offering are amended in any respect after
delivery of the notice to the Buyer concerning the proposed Future Offering, the
Company shall deliver a new notice to the Buyer describing the amended terms and
conditions of the proposed Future Offering and the Buyer  thereafter  shall have
an option during the seventy two (72) hour period following delivery of such new
notice to purchase  its pro rata share of the  securities  being  offered on the
same terms as  contemplated by such proposed Future  Offering,  as amended.  The
foregoing  sentence  shall  apply to  successive  amendments  to the  terms  and
conditions of any proposed Future Offering. The Right of First Refusal shall not
apply  to any  transaction  involving  (i)  issuances  of  securities  in a firm
commitment   underwritten  public  offering  (excluding  a  continuous  offering
pursuant  to Rule 415 under the 1933 Act) or (ii)  issuances  of  securities  as
consideration  for  a  merger,  consolidation  or  purchase  of  assets,  or  in
connection with any strategic  partnership or joint venture (the primary purpose
of which is not to raise equity capital),  or in connection with the disposition
or  acquisition of a business,  product or license by the Company.  The Right of
First Refusal also shall not apply to the issuance of  securities  upon exercise
or conversion of the Company's options, warrants or other convertible securities
outstanding  as of the date  hereof or to the  grant of  additional  options  or
warrants,  or the issuance of  additional  securities,  under any Company  stock
option or restricted stock plan approved by the shareholders of the Company.

     e. Expenses. At the Closing, the Company shall reimburse Buyer for expenses
incurred by them in connection  with the  negotiation,  preparation,  execution,
delivery  and  performance  of this  Agreement  and the other  agreements  to be
executed in connection herewith  ("Documents"),  including,  without limitation,
reasonable  attorneys' and consultants' fees and expenses,  transfer agent fees,
fees  for  stock  quotation  services,   fees  relating  to  any  amendments  or
modifications  of the  Documents or any consents or waivers of provisions in the
Documents,  fees for the  preparation  of opinions of counsel,  escrow fees, and
costs of  restructuring  the  transactions  contemplated by the Documents.  When
possible,  the Company must pay these fees directly,  otherwise the Company must
make immediate  payment for reimbursement to the Buyer for all fees and expenses
immediately  upon written notice by the Buyer or the submission of an invoice by
the  Buyer  Notwithstanding  anything  herein  to the  contrary,  the  Company's
obligation to reimburse Buyer's expenses shall be $1,500.

     f. Financial  Information.  Upon written request the Company agrees to send
or make available the following  reports to the Buyer until the Buyer transfers,
assigns,  or sells all of the  Securities:  (i)  within  two (2) days  after the
filing  with the SEC,  a copy of its  Annual  Report on Form 10-K its  Quarterly
Reports on Form 10-Q and any  Current  Reports on Form 8-K;  (ii) within one (1)
day after release,  copies of all press releases issued by the Company or any of
its  Subsidiaries;  and (iii)  contemporaneously  with the making  available  or
giving  to the  shareholders  of the  Company,  copies of any  notices  or other
information the Company makes available or gives to such shareholders.

     g.  Authorization and Reservation of Shares. The Company shall at all times
have authorized,  and reserved for the purpose of issuance,  a sufficient number
of shares of Common Stock to provide for the full  conversion or exercise of the
outstanding Note and issuance of the Conversion  Shares in connection  therewith
(based on the  Conversion  Price of the Note in effect from time to time) and as
otherwise  required  by the Note.  The  Company  shall not  reduce the number of
shares of Common Stock reserved for issuance upon conversion of Note without the
consent of the Buyer.  The  Company  shall at all times  maintain  the number of
shares of Common Stock so reserved for issuance at an amount ("Reserved Amount")
equal  to five  times  the  number  that is then  actually  issuable  upon  full
conversion of the Note and Additional Note (based on the Conversion Price of the
Note in effect from time to time). If at any time the number of shares of Common
Stock authorized and reserved for issuance ("Authorized and Reserved Shares") is
below the Reserved  Amount,  the Company will promptly take all corporate action
necessary to authorize  and reserve a  sufficient  number of shares,  including,

                                       10
<PAGE>
without  limitation,  calling a special  meeting of  shareholders  to  authorize
additional shares to meet the Company's  obligations under this Section 4(g), in
the case of an  insufficient  number of authorized  shares,  obtain  shareholder
approval  of an  increase in such  authorized  number of shares,  and voting the
management  shares of the  Company  in favor of an  increase  in the  authorized
shares  of the  Company  to  ensure  that the  number  of  authorized  shares is
sufficient  to meet the  Reserved  Amount.  If the Company  fails to obtain such
shareholder  approval  within  thirty (30) days  following the date on which the
number of Reserved Amount exceeds the Authorized and Reserved Shares, it will be
considered an Event of default under Section 3.4 of the Note.

      h.  Listing.  The  Company  shall  promptly  secure  the  listing  of  the
Conversion Shares upon each national  securities exchange or automated quotation
system,  if any,  upon which shares of Common Stock are then listed  (subject to
official  notice  of  issuance)  and,  so  long  as any  Buyer  owns  any of the
Securities, shall maintain, so long as any other shares of Common Stock shall be
so listed, such listing of all Conversion Shares from time to time issuable upon
conversion  of the Note.  The Company will obtain and, so long as any Buyer owns
any of the  Securities,  maintain the listing and trading of its Common Stock on
the OTCQB or any equivalent  replacement  exchange,  the Nasdaq  National Market
("Nasdaq"),  the Nasdaq SmallCap Market ("Nasdaq SmallCap"),  the New York Stock
Exchange  ("NYSE"),  or the American Stock Exchange  ("AMEX") and will comply in
all respects with the Company's  reporting,  filing and other  obligations under
the bylaws or rules of the Financial Industry Regulatory Authority ("FINRA") and
such exchanges,  as applicable.  The Company shall promptly provide to the Buyer
copies of any  notices it  receives  from the OTCQB and any other  exchanges  or
quotation  systems  on which  the  Common  Stock is then  listed  regarding  the
continued  eligibility  of the Common  Stock for listing on such  exchanges  and
quotation  systems.  If the market price of the Company's  Common Stock shall at
any time fall below the price required to continue to be quoted on the Company's
then principal exchange or automated quotation system, the Company shall as soon
as  practicable  take all  actions  necessary  to effect a reverse  split of the
Company's Common Stock, such that the price would then be at least fifty percent
(50%) above the required price, post-split.  If the Company fails to achieve the
required  reverse split within thirty (30) days  following the date on which the
price fell below the required  minimum  trading price,  it will be considered an
Event of default under Section 3.4 of the Note.

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

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

      k. Breach of Covenants.  If the Company  breaches any of the covenants set
forth in this Section 4, and in addition to any other remedies  available to the
Buyer  pursuant to this  Agreement,  it will be  considered  an Event of default
under Section 3.4 of the Note.

      l. Failure to Comply with the 1934 Act. So long as the Buyer  beneficially
owns the Note, the Company shall comply with the reporting  requirements  of the
1934  Act;  and the  Company  shall  continue  to be  subject  to the  reporting
requirements of the 1934 Act.

      m. Trading Activities.  Neither the Buyer nor their affiliates has an open
short  position in the common stock of the Company and the Buyer agree that they
shall not, and that they will cause their affiliates not to, engage in any short
sales  of or  hedging  transactions  with  respect  to the  common  stock of the
Company.

       n. Omitted Intentionally.

       o.  Non-Frustration  of Purpose.  So long as the Buyer or its  affiliates
hold  any  Securities,  neither  the  Company  nor  any  of  its  affiliates  or
subsidiaries, nor any of its or their respective officers, employees, directors,
agents or other representatives,  will effect, enter into, announce or recommend
to its stockholders any agreement, plan, arrangement or transaction the terms of
which  would or would  reasonably  be  expected  to (i) have a material  adverse
effect  on the  Buyer's  investment  in the Note or  Conversion  Shares  or (ii)

                                       11
<PAGE>
restrict,  delay, conflict with or impair the ability or right of the Company to
timely perform its  obligations  under this  Agreement or the Notes,  including,
without  limitation,  the  obligation of the Company to timely deliver shares of
Common Stock to the Buyer or its affiliates in accordance with this Agreement or
the Note.

       p. Restricted  Transactions.  So long as any of the Securities being sold
to the Buyer in this offering remain outstanding,  including  Conversion Shares,
neither the Company nor any of its affiliates or subsidiaries, nor any of its or
their   respective   officers,    employees,    directors,   agents   or   other
representatives,  will,  without  the prior  written  consent  of the  Investor,
directly or indirectly,  solicit,  accept,  enter into,  announce,  or otherwise
cooperate in any way,  assist or participate in or facilitate or encourage,  any
exchange (i) of any security of the Company or any of its  subsidiaries  for any
other security of the Company or any of its  subsidiaries,  except to the extent
(x)  consummated  pursuant  to  an  exchange  registered  under  a  registration
statement of the Company filed  pursuant to the 1933 Act and declared  effective
by the SEC or (y) such  exchange  is exempt  from  registration  pursuant  to an
exemption  provided under the 1933 Act (other than Section  3(a)(10) of the 1933
Act) or (ii) of any  indebtedness  or other  securities of the Company or any of
its  subsidiaries  relying on the exemption  provided by Section 3(a)(10) of the
1933 Act.  Notwithstanding  the  foregoing or anything  contained  herein to the
contrary, neither the Company nor any of its affiliates or subsidiaries, nor any
of its or their  respective  officers,  employees,  directors,  agents  or other
representatives,  will, without the prior written consent of the Investor (which
consent  may  be  withheld,  delayed  or  conditioned  in  the  Investor's  sole
discretion), directly or indirectly, cooperate in any way, assist or participate
in,  facilitate  or encourage any effort or attempt by any third party to effect
any  acquisition  of  securities  of the  Company  by such  third  party from an
existing  holder of such  securities in connection  with a proposed  exchange of
such securities of the Company (whether  pursuant to Section 3(a)(9) or 3(a)(10)
of the 1933 Act or otherwise)..

       q.  Prohibition  on  Variable  Rate  Transactions.  So long as any of the
Securities being sold to the Buyer in this offering remain outstanding and owned
by the Buyer,  including  Conversion  Shares, the Company shall not, directly or
indirectly,  (i)  issue  or sell  any  convertible  securities  either  (A) at a
conversion,  exercise or exchange  rate or other price that is based upon and/or
varies with the trading prices of, or quotations for, the shares of Common Stock
at any time after the initial  issuance of such convertible  securities,  or (B)
with a conversion,  exercise or exchange price that is subject to being reset at
some future date after the initial  issuance of such  convertible  securities or
upon the  occurrence  of specified or contingent  events  directly or indirectly
related to the  business of the Company or the market for the Common  Stock,  or
(ii) enter into any agreement (including, without limitation, an "equity line of
credit"  or an  "at-the-market  offering")  whereby  the  Company  or any of its
subsidiaries  may sell  securities  at a future  determined  price  (other  than
standard and customary "preemptive" or "participation"  rights). The Buyer shall
be entitled to obtain injunctive relief against the Company and its subsidiaries
to preclude any such issuance, which remedy shall be in addition to any right to
collect damages.

       r. Non-Public Information.  Except with respect to the material terms and
conditions of the transactions  contemplated by the Transaction  Documents,  the
Company  covenants  and agrees that after the Closing  Date  neither it, nor any
other person  acting on its behalf,  will provide Buyer or its agents or counsel
with any information that the Company believes  constitutes  material non-public
information,  unless  prior  thereto  the Buyer  shall  have  executed a written
agreement regarding the confidentiality and use of such information. The Company
understands  and  confirms  that the Buyer  shall be  relying  on the  foregoing
covenant in effecting  transactions  in  securities  of the Company.  Each Buyer
acknowledges  that it is aware that the United States  securities  laws prohibit
any  person  who  has  material  non-public  information  about a  company  from
purchasing or selling  securities of such company,  or from  communicating  such
information  to any other person under  circumstances  in which it is reasonably
foreseeable that such person is likely to purchase or sell such securities,  and
the Buyer  agrees not to engage in any  unlawful  trading in  securities  of the
Company or unlawful misuse or  misappropriation  of any such information.  Buyer
agrees to maintain  the  confidentiality  of and not disclose or use (except for
purposes  relating  to the  transactions  contemplated  by this  Agreement)  any
confidential,  proprietary or non-public information disclosed by the Company to
Buyer.

     5. Transfer Agent  Instructions.  The Company  covenants and agrees that it
will at all times  while  any  Securities  remain  outstanding  maintain  a duly
qualified  independent  transfer agent. On or prior to the initial Closing Date,
the Company shall provide a copy of its agreement with the transfer agent to the
Buyer.  If a new  transfer  agent is appointed  at any time,  the Company  shall
provide the Buyer with a copy of the new  agreement  within  three (3)  business
days of its execution.  The Company shall issue irrevocable  instructions to its
transfer agent to issue certificates, registered in the name of the Buyer or its
nominee,  for the  Conversion  Shares in such amounts as specified  from time to
time by the Buyer to the Company upon  conversion of the Note in accordance with
the terms thereof (the "Irrevocable Transfer Agent Instructions").  In the event
that the Borrower  proposes to replace its transfer  agent,  the Borrower  shall
provide,  prior to the  effective  date of such  replacement,  a fully  executed
Irrevocable  Transfer  Agent  Instructions  in a  form  as  initially  delivered
pursuant to the Purchase  Agreement  (including but not limited to the provision
to irrevocably  reserve shares of Common Stock in the Reserved Amount) signed by

                                       12
<PAGE>
the successor transfer agent to Borrower and the Borrower. Prior to registration
of the Conversion  Shares under the 1933 Act or the date on which the Conversion
Shares may be sold pursuant to Rule 144 without any restriction as to the number
of Securities as of a particular  date that can then be  immediately  sold,  all
such certificates shall bear the restrictive legend specified in Section 2(g) of
this  Agreement.  The Company  warrants that: (i) 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(f) hereof (in the case of the
Conversion Shares, prior to registration of the Conversion Shares under the 1933
Act or the date on which the Conversion  Shares may be sold pursuant to Rule 144
without any  restriction as to the number of Securities as of a particular  date
that can then be immediately sold), will be given by the Company to its transfer
agent and that the  Securities  shall  otherwise be freely  transferable  on the
books and records of the Company as and to the extent provided in this Agreement
and the Note;  (ii) it will not direct its  transfer  agent not to  transfer  or
delay,   impair,   and/or  hinder  its  transfer  agent  in   transferring   (or
issuing)(electronically  or in certificated form) any certificate for Conversion
Shares to be issued to the Buyer upon conversion of or otherwise pursuant to the
Note as and when required by the Note and this Agreement;  and (iii) it will not
fail to remove (or directs its transfer agent not to remove or impairs,  delays,
and/or hinders its transfer agent from removing) any  restrictive  legend (or to
withdraw any stop transfer  instructions in respect  thereof) on any certificate
for any  Conversion  Shares issued to the Buyer upon  conversion of or otherwise
pursuant  to the Note as and  when  required  by the  Note  and this  Agreement.
Nothing in this  Section  shall  affect in any way the Buyer's  obligations  and
agreement  set  forth in  Section  2(g)  hereof to  comply  with all  applicable
prospectus delivery requirements,  if any, upon re-sale of the Securities.  If a
Buyer  provides  the Company,  at the cost of the Buyer,  with (i) an opinion of
counsel in form,  substance  and scope  customary  for  opinions  in  comparable
transactions,  to the effect that a public  sale or transfer of such  Securities
may be made without registration under the 1933 Act and such sale or transfer is
effected or (ii) the Buyer provides  reasonable  assurances  that the Securities
can be sold pursuant to Rule 144, the Company shall permit the transfer, and, in
the case of the Conversion Shares, promptly instruct its transfer agent to issue
one or more certificates, free from restrictive legend, in such name and in such
denominations as specified by the Buyer. The Company  acknowledges that a breach
by it of its obligations  hereunder will cause irreparable harm to the Buyer, by
vitiating  the  intent  and  purpose of the  transactions  contemplated  hereby.
Accordingly, the Company acknowledges that the remedy at law for a breach of its
obligations under this Section 5 may be inadequate and agrees, in the event of a
breach or  threatened  breach by the Company of the  provisions of this Section,
that the Buyer shall be entitled,  in addition to all other available  remedies,
to an  injunction  restraining  any breach  and  requiring  immediate  transfer,
without the  necessity  of showing  economic  loss and without any bond or other
security being required.

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

      a. The Buyer shall have executed this  Agreement and delivered the same to
the Company.

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

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

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

     7. Conditions to The Buyer's Obligation to Purchase.  The obligation of the
Buyer  hereunder  to  purchase  the  Note  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  Buyer's  sole  benefit and may be
waived by the Buyer at any time in its sole discretion:

      a. The Company shall have  executed this  Agreement and delivered the same
to the Buyer.

                                       13
<PAGE>
      b. The Company  shall have  delivered to the Buyer duly  executed Note (in
such  denominations  as the Buyer shall request) in accordance with Section 1(b)
above.

      c. The  Irrevocable  Transfer  Agent  Instructions,  in form and substance
satisfactory to a  majority-in-interest  of the Buyer, shall have been delivered
to and acknowledged in writing by the Company's Transfer Agent.

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

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

      f. No event shall have occurred which could reasonably be expected to have
a Material  Adverse Effect on the Company  including but not limited to a change
in the 1934 Act reporting status of the Company or the failure of the Company to
be timely in its 1934 Act reporting  obligations,  or in the sole  discretion of
Buyer,  the  transaction's  risk profile,  market pricing or implied  volatility
substantially  changes,  due diligence  concerns arise, or any other  conditions
material to the successful  closing of the transaction are not acceptable to the
Buyer.

      g. The Conversion  Shares shall have been  authorized for quotation on the
OTCQB and trading in the Common Stock on the OTCQB or such  equivalent  exchange
and  shall not have been  suspended  by the SEC or the OTCQB or such  equivalent
exchange.

      h. The Buyer shall have  received an  officer's  certificate  described in
Section 3(c) above, dated as of the Closing Date.

i. The Buyer shall have received an opinion of counsel for the Company,  in form
and substance satisfactory to the Buyer.

     8. Governing Law; Miscellaneous.

      a.  Governing  Law. This  Agreement  shall be governed by and construed in
accordance  with the laws of the State of New York without  regard to principles
of  conflicts  of laws.  Any action  brought by either  party  against the other
concerning the transactions contemplated by this Agreement shall be brought only
in the state  courts of New York or in the federal  courts  located in the state
and county of New York.

The  parties  to this  Agreement  hereby  irrevocably  waive  any  objection  to
jurisdiction and venue of any action  instituted  hereunder and shall not assert
any  defense  based on lack of  jurisdiction  or venue or based  upon  FORUM NON
CONVENIENS.  The Company and Buyer waive  trial by jury.  The  prevailing  party
shall be entitled to recover from the other party its reasonable attorney's fees
and  costs.  In the event  that any  provision  of this  Agreement  or any other
agreement delivered in connection herewith is invalid or unenforceable under any
applicable  statute  or  rule  of law,  then  such  provision  shall  be  deemed
inoperative  to the extent that it may  conflict  therewith  and shall be deemed
modified to conform with such statute or rule of law. Any such  provision  which
may prove invalid or  unenforceable  under any law shall not affect the validity
or  enforceability  of any other  provision of any agreement.  Each party hereby
irrevocably  waives  personal  service of process and consents to process  being
served in any suit,  action or proceeding in connection  with this  Agreement or
any other  agreement or document  executed in connection  with this  transaction
(each a  "Transaction  Document"),  by mailing a copy thereof via  registered or
certified  mail or overnight  delivery (with evidence of delivery) to such party

                                       14
<PAGE>
at the address in effect for notices to it under this  Agreement and agrees that
such service shall constitute good and sufficient  service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way any right
to serve process in any other manner permitted by law.

IN ANY ACTION,  SUIT,  OR PROCEEDING  IN ANY  JURISDICTION  BROUGHT BY ANY PARTY
AGAINST ANY OTHER PARTY,  THE PARTIES EACH KNOWINGLY AND  INTENTIONALLY,  TO THE
GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY,
IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

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

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

      d. Severability.  If any term, provision,  covenant or restriction of this
Agreement is held by a court of competent  jurisdiction to be invalid,  illegal,
void or  unenforceable,  the remainder of the terms,  provisions,  covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected,  impaired or  invalidated,  and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially  the same result as that  contemplated by such
term, provision,  covenant or restriction.  It is hereby stipulated and declared
to be the  intention of the parties that they would have  executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.

      e.  Entire  Agreement;  Amendments.  This  Agreement  and the  instruments
referenced  herein contain the entire  understanding of the parties with respect
to the matters covered herein and therein and, except as specifically  set forth
herein or therein,  neither the Company nor the 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 majority in interest of the Buyer.

      f. Notices. All notices, demands, requests, consents, approvals, and other
communications  required or permitted  hereunder shall be in writing and, unless
otherwise  specified herein,  shall be (i) personally served,  (ii) deposited in
the mail,  registered or certified,  return receipt requested,  postage prepaid,
(iii) delivered by reputable air courier service with charges  prepaid,  or (iv)
transmitted by hand  delivery,  telegram,  or facsimile,  addressed as set forth
below or to such other address as such party shall have  specified most recently
by written notice. Any notice or other communication required or permitted to be
given hereunder shall be deemed  effective (a) upon hand delivery or delivery by
facsimile,  with accurate confirmation  generated by the transmitting  facsimile
machine,  at the address or number  designated below (if delivered on a business
day during normal  business  hours where such notice is to be received),  or the
first  business  day  following  such  delivery  (if  delivered  other than on a
business day during normal  business  hours where such notice is to be received)
or (b) on the  second  business  day  following  the date of  mailing by express
courier  service,  fully  prepaid,  addressed  to such  address,  or upon actual
receipt of such  mailing,  whichever  shall first occur.  The addresses for such
communications shall be:

       If to the Company, to:
            TUNGSTEN CORP.
            1671 SW 105 LANE
            DAVIE, FL 33324
            Attn: Guy Martin, CEO

       If to the Buyer:
            MAGNA GROUP
            5 HANOVER SQUARE
            NEW YORK, NY 10004
            Attn: Joshua Sason, Managing Member
            facsimile: 646-737-9948

                                       15
<PAGE>
     Each  party  shall  provide  notice  to the  other  party of any  change in
address.

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

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

      i.  Survival.  The  representations  and warranties of the Company and the
agreements and covenants set forth in this  Agreement  shall survive the closing
hereunder  notwithstanding  any due diligence  investigation  conducted by or on
behalf of the Buyer.  The Company  agrees to indemnify and hold harmless each of
the Buyer and all their  officers,  directors,  employees and agents for loss or
damage  arising as a result of or related to any breach or alleged breach by the
Company of any of its  representations,  warranties  and  covenants set forth in
this  Agreement or any of its covenants and  obligations  under this  Agreement,
including advancement of expenses as they are incurred.

      j. Publicity.  The Company,  and each of the Buyer shall have the right to
review a reasonable  period of time before issuance of any press releases,  SEC,
OTCQB or FINRA  filings,  or any other  public  statements  with  respect to the
transactions  contemplated hereby; provided,  however, that the Company shall be
entitled,  without the prior  approval  of each of the Buyer,  to make any press
release or SEC, OTCQB (or other applicable trading market) or FINRA filings with
respect to such  transactions  as is required by applicable law and  regulations
(although each of the Buyer shall be consulted by the Company in connection with
any such press  release  prior to its release and shall be provided  with a copy
thereof and be given an opportunity to comment thereon).

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

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

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

                                       16
<PAGE>
       o. Usury.  To the extent it may lawfully do so, the Company hereby agrees
not to insist upon or plead or in any manner  whatsoever  claim, and will resist
any and all efforts to be compelled  to take the benefit or advantage  of, usury
laws wherever enacted, now or at any time hereafter in force, in connection with
any claim, action or proceeding that may be brought by Buyer in order to enforce
any  right  or  remedy  under  any  Transaction  Document.  Notwithstanding  any
provision to the contrary contained in any Transaction Document, it is expressly
agreed  and  provided  that  the  total  liability  of  the  Company  under  the
Transaction  Documents  for payments in the nature of interest  shall not exceed
the maximum lawful rate authorized  under  applicable law (the "Maximum  Rate"),
and, without  limiting the foregoing,  in no event shall any rate of interest or
default  interest,  or both of them,  when aggregated with any other sums in the
nature  of  interest  that  the  Company  may  be  obligated  to pay  under  the
Transaction Documents exceed such Maximum Rate. It is agreed that if the maximum
contract  rate of  interest  allowed by law and  applicable  to the  Transaction
Documents is  increased  or  decreased  by statute or any official  governmental
action subsequent to the date hereof,  the new maximum contract rate of interest
allowed by law will be the Maximum Rate applicable to the Transaction  Documents
from the  effective  date  forward,  unless such  application  is  precluded  by
applicable law. If under any circumstances whatsoever, interest in excess of the
Maximum  Rate is paid by the  Company  to Buyer  with  respect  to  indebtedness
evidenced  by the  Transaction  Documents,  such excess  shall be applied by the
Buyer to the unpaid principal balance of any such indebtedness or be refunded to
the Company, the manner of handling such excess to be at the Buyer's election.

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

TUNGSTEN CORP.

By: ___________________________________
    Guy Martin
    CEO

MAGNA EQUITIES II, LLC

By: ___________________________________
    Joshua Sason
    Managing Member

5 Hanover Square
New York, NY 10004

AGGREGATE SUBSCRIPTION AMOUNT:
Aggregate Principal Amount of Note:                                       $9,250
Aggregate Purchase Price:                                                 $9,250

                                       17

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