Document:

EX-10.1

SECOND AMENDMENT TO

PURCHASE AND SALE AGREEMENT

THIS SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT (this “Second Amendment”) is made
and entered into as of January 5, 2007 by and between GREIT–ONE WORLD TRADE CENTER, L.P., a
California limited partnership (“Seller”), and LEGACY PARTNERS REALTY FUND II, LLC, a Delaware
limited liability company (“Buyer”).

RECITALS

A. Seller and Buyer have entered into that certain Purchase and Sale Agreement dated as of
August 17, 2006, as amended by that certain First Amendment to Purchase and Sale Agreement dated as
of September 21, 2006 (as amended, the “Purchase Agreement”), with respect to that certain real
property commonly known as One World Trade Center, located in the County of Los Angeles, State of
California, and more particularly described in the Purchase Agreement.

B. The parties hereto desire to amend the Purchase Agreement to confirm certain matters as set
forth below.

AGREEMENT

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, Seller and Buyer agree as follows:

1. Defined Terms. Initially capitalized terms used in this Second Amendment and not
otherwise defined in this Second Amendment shall have the meanings provided for such terms in the
Purchase Agreement.

2. Closing. Notwithstanding anything to the contrary in Section 7.2.1 of the
Purchase Agreement, Seller and Buyer agree that the outside date for Closing shall be extended to
January 22, 2007. Buyer and Seller covenant and agree to cooperate with one another and to use all
commercially reasonable efforts to resolve all outstanding issues and to confirm the respective
obligations of the parties in order to accommodate a Closing on or before January 22, 2007.

3. Miscellaneous. Except to the extent expressly modified by this Second Amendment,
the Purchase Agreement remains in full force and effect. To the extent of any inconsistency
between this Second Amendment and the Purchase Agreement, the terms and conditions of this Second
Amendment shall control. This Second Amendment may be executed in multiple counterparts, all of
which, taken together, shall constitute one document. This Second Amendment shall be deemed
effective against a party upon receipt by the other party (or its counsel) of a counterpart
executed by facsimile.

[SIGNATURES ON NEXT PAGE]

1

IN WITNESS WHEREOF, Seller and Buyer have executed this Second Amendment as of the date
referenced above.

SELLER:

GREIT–ONE WORLD TRADE CENTER, L.P.,

a California limited partnership

	 	 	 	 	 
	
 
	 	By:

Its:
	 	GREIT – One World Trade Center GP, LLC,

a California limited liability company

General Partner
	 
	 	 	 	 
	
 
	 	 	 	By:G REIT, L.P.,

a Virginia limited partnership,

Its:sole member
	 
	 	 	 	 
	
 
	 	 	 	By:G REIT, Inc.,

a Maryland corporation,

Its:General Partner
	 
	 	 	 	 
	
 
	 	 	 	By: /s/ Andrea R. Biller
	
 
	 	 	 	 
	
 
	 	 	 	Name: Andrea R. Biller
	
 
	 	 	 	 
	
 
	 	 	 	Title: Executive V.P.
	
 
	 	 	 	 
	 
	 	 	 	 
	BUYER:

	 	

	 	

	 
	 	 	 	 
	 
	 	 
	 
	 	 	 	 
	LEGACY PARTNERS REALTY FUND II, LLC,
	 	 
	 
	 	 	 	 
	a Delaware limited liability company
	 	 
	 
	 	 	 	 
	By:	 	Legacy Partners Investment Management Services, LLC

	 
	 	 	 	 
	Its:

	 	a Delaware limited liability company

Managing Member
	 	

	 
	 	 	 	 
	
 
	 	By:
	 	/s/ Barry DiRaimondo
	
 
	 	 
	 	 
	
 
	 	Name:
	 	Barry DiRaimondo
	
 
	 	 	 	 
	
 
	 	Title:
	 	President
	
 
	 	 
	 	 
	 
	 	 	 	 

2Exhibit 10.1

                          SECURITIES PURCHASE AGREEMENT
                          -----------------------------

                            LAURUS MASTER FUND, LTD.

                                       AND

                            NEW CENTURY ENERGY CORP.

                            DATED: DECEMBER 28, 2006

<PAGE>

                                TABLE OF CONTENTS
                                -----------------

                                                                          PAGE
                                                                          ----

1.      Agreement  to  Sell  and  Purchase                                 1
2.      Fees                                                               1
3.      Closing,  Delivery  and  Payment                                   2
        3.1     Closing                                                    2
        3.2     Delivery                                                   2
4.      Representations  and  Warranties  of  the  Company                 2
        4.1     Organization,  Good  Standing  and  Qualification          2
        4.2     Subsidiaries                                               3
        4.3     Capitalization;  Voting  Rights                            3
        4.4     Authorization;  Binding  Obligations                       4
        4.5     Liabilities                                                5
        4.6     Agreements;  Action                                        6
        4.7     Obligations  to  Related  Parties                          6
        4.8     Changes                                                    7
        4.9     Title  to  Properties  and  Assets;  Liens,  Etc           8
        4.10    Intellectual  Property                                     8
        4.11    Compliance  with  Other  Instruments                       9
        4.12    Litigation                                                 9
        4.13    Tax  Returns  and  Payments                                9
        4.14    Employees                                                 10
        4.15    Compliance  with  Laws;  Permits                          11
        4.16    Environmental  and  Safety  Laws                          11
        4.17    Valid  Offering                                           11
        4.18    Full  Disclosure                                          12
        4.19    Insurance                                                 12
        4.20    SEC  Reports                                              12
        4.21    Listing                                                   12
        4.22    No  Integrated  Offering                                  13
        4.23    Patriot  Act                                              13
        4.24    ERISA                                                     13
5.      Representations  and  Warranties  of  the  Purchaser              14
        5.1     No  Shorting                                              14
        5.2     Requisite  Power  and  Authority                          14
        5.3     Investment  Representations                               14
        5.4     The  Purchaser  Bears  Economic  Risk                     14
        5.5     Acquisition  for  Own  Account                            14
        5.6     The  Purchaser  Can  Protect  Its  Interest               14
        5.7     Accredited  Investor                                      15
        5.8     Legends  The  Note shall bear substantially the
                following legend:                                         15
6.      Covenants  of  the  Company                                       15

<PAGE>

        6.1     Stop-Orders                                               15
        6.2     Listing                                                   15
        6.3     Market  Regulations                                       15
        6.4     Reporting  Requirements                                   15
        6.5     Use  of  Funds                                            15
        6.6     Access  to  Facilities                                    16
        6.7     Taxes                                                     16
        6.8     Insurance                                                 16
        6.9     Intellectual  Property                                    18
        6.10    Properties                                                18
        6.11    Confidentiality                                           18
        6.12    Required  Approvals                                       18
        6.13    Opinion                                                   19
        6.14    Margin  Stock                                             19
7.      Covenants  of  the  Purchaser                                     19
        7.1     Confidentiality                                           19
        7.2     Non-Public  Information                                   20
        7.3     Limitation  on  Acquisition of Common Stock of
                the Company                                               20
8.      Covenants  of  the  Company  and  the Purchaser
        Regarding Indemnification                                         20
        8.1     Company  Indemnification                                  20
        8.2     Purchaser's  Indemnification                              21
        8.3     Offering  Restrictions                                    21
9.      Miscellaneous                                                     21
        9.1     Governing  Law, Jurisdiction and Waive  o  Jury Trial     21
        9.2     Severability                                              22
        9.3     Survival                                                  22
        9.4     Successors                                                22
        9.5     Entire  Agreement;  Maximum  Interest                     23
        9.6     Amendment  and  Waiver                                    23
        9.7     Delays  or  Omissions                                     23
        9.8     Notices                                                   23
        9.9     Attorneys'  Fees                                          24
        9.10    Titles  and  Subtitles                                    25
        9.11    Facsimile  Signatures;  Counterparts                      25
        9.12    Broker's  Fees                                            25
        9.13    Construction                                              25

<PAGE>

                                LIST OF EXHIBITS

Form  of  Term  Note     Exhibit  A
Form  of  Opinion     Exhibit  B
Form  of  Escrow  Agreement     Exhibit  C

<PAGE>

                          SECURITIES PURCHASE AGREEMENT

     THIS  SECURITIES  PURCHASE AGREEMENT (this "Agreement") is made and entered
into  as  of  December  28,  2006,  by  and  between NEW CENTURY ENERGY CORP., a
Colorado  corporation  (the  "Company"),  and LAURUS MASTER FUND, LTD., a Cayman
Islands  company  (the  "Purchaser").

                                    RECITALS

     WHEREAS,  the Company has authorized the sale to the Purchaser of a Secured
Term  Note  in the aggregate principal amount of Sixteen Million Two Hundred Ten
Thousand  Dollars  ($16,210,000)  in  the  form of Exhibit A hereto (as amended,
modified  or  supplemented  from  time  to  time,  the  "Note");

     WHEREAS,  the  Purchaser  desires  to  purchase  the  Note on the terms and
conditions  set  forth  herein;  and

     WHEREAS, the Company desires to issue and sell the Note to the Purchaser on
the  terms  and  conditions  set  forth  herein.

                                    AGREEMENT

     NOW,  THEREFORE,  in consideration of the foregoing recitals and the mutual
promises,  representations,  warranties  and covenants hereinafter set forth and
for  other good and valuable consideration, the receipt and sufficiency of which
are  hereby  acknowledged,  the  parties  hereto  agree  as  follows:

     1. Agreement to Sell and Purchase. Pursuant to the terms and conditions set
        ------------------------------
forth  in  this  Agreement,  on  the Closing Date (as defined in Section 3), the
Company  shall  sell to the Purchaser, and the Purchaser shall purchase from the
Company,  the  Note.  The sale of the Note on the Closing Date shall be known as
the  "Offering."  The  Note  will mature on the Maturity Date (as defined in the
Note).

     2.  Fees.  On  the  Closing  Date:
         ----

          (a)  Subject to the terms of Section 2(e) below, the Company shall pay
     to  Laurus  Capital  Management,  L.L.C.,  the  manager of the Purchaser, a
     closing  payment  in  an amount equal to $210,000 referred to herein as the
     "Closing  Payment."

          (b)  Subject to the terms of Section 2 below, the Company shall pay to
     Laurus  Capital Management, L.L.C., the manager of the Purchaser, a closing
     payment  in  an amount equal to $210,000 referred to herein as the "Closing
     Payment."

          (c)  The  Company  shall  reimburse  the  Purchaser for its reasonable
     expenses  (including  legal  fees and expenses) incurred in connection with
     the  negotiation  of  this  Agreement  and  the  Related  Agreements  (as
     hereinafter  defined),  and  expenses  incurred  in  connection  with  the
     Purchaser's  due  diligence  review of the Company and its Subsidiaries (as

                                     -1-
<PAGE>

     defined  in  Section  4.2)  and  all related matters; provided that the due
     diligence  fees  may not exceed $5,000 (exclusive of third party appraisals
     or  extraordinary  due  diligence).  Amounts required to be paid under this
     Section  2(d)  will  be  paid  on  the  Closing  Date.

          (d)  The Closing Payment and the expenses referred to in the preceding
     clause  (d)  (net of deposits previously paid by the Company) shall be paid
     at  closing  out of funds held pursuant to the Escrow Agreement (as defined
     below)  and  a  disbursement  letter  (the  "Disbursement  Letter").

     3.  Closing,  Delivery  and  Payment.
         --------------------------------

          3.1  Closing.  Subject to the terms and conditions herein, the closing
               -------
     of  the  transactions contemplated hereby (the "Closing"), shall take place
     on  the date hereof, at such time or place as the Company and the Purchaser
     may  mutually  agree  (such date is hereinafter referred to as the "Closing
     Date").

          3.2  Delivery. Pursuant to the Escrow Agreement, at the Closing on the
               --------
     Closing  Date,  the  Company  will  deliver  to  the Purchaser, among other
     things, the Note and the Purchaser will deliver to the Company, among other
     things, the amounts set forth in the Disbursement Letter by certified funds
     or wire transfer, which will include the disbursement of $11,210,000 on the
     Closing  Date  and  an  additional $1,500,000 disbursed to the Company from
     Purchaser  at  the  discretion of Purchaser every ninety days following the
     Closing  Date  until the Company has received an aggregate of $5,000,000 in
     additional disbursements ("Additional Disbursements" and each payment being
     an  "Additional  Disbursement").  The  Company  shall  not  pay interest to
     Purchaser  on  each  Additional  Disbursement  until  such  time  as  such
     Additional  Disbursement has been received by the Company. The Company will
     receive  the  interest  payable  from  funds  held in a restricted account.

     4.  Representations  and  Warranties  of  the  Company.  The Company hereby
         -------------------------------------------------
represents  and  warrants  to  the  Purchaser  as  follows

          4.1 Organization, Good Standing and Qualification. Each of the Company
              ---------------------------------------------
     and  each  of  its  Subsidiaries  is  a corporation, partnership or limited
     liability company, as the case may be, duly organized, validly existing and
     in  good  standing under the laws of its jurisdiction of organization. Each
     of  the  Company  and  each  of its Subsidiaries has the corporate, limited
     liability  company  or partnership, as the case may be, power and authority
     to own and operate its properties and assets and, insofar as it is or shall
     be a party thereto, to (a) execute and deliver (i) this Agreement, (ii) the
     Note  to  be  issued  in  connection  with  this  Agreement,  (iii)  the
     Reaffirmation  and Ratification Agreement dated as of the date hereof among
     the  Company,  certain  Subsidiaries  of  the Company and the Purchaser (as
     amended, modified and/or supplemented from time to time, the "Reaffirmation
     Agreement")  pursuant  to which the Company and certain Subsidiaries of the
     Company  reaffirm their obligations under (A) the Master Security Agreement
     dated  as  of  June 30, 2005 among the Company, certain Subsidiaries of the
     Company  and  the  Purchaser (as amended, modified and/or supplemented from
     time to time, the "Master Security Agreement"), (B) the Subsidiary Guaranty
     dated  as  of June 30, 2005 made by certain Subsidiaries of the Company (as
     amended,  modified  and/or  supplemented from time to time, the "Subsidiary
     Guaranty");  (C) the Stock Pledge Agreement dated as of June 30, 2005 among

                                     -2-
<PAGE>

     the  Company,  certain  Subsidiaries  of  the Company and the Purchaser (as
     amended,  modified and/or supplemented from time to time, the "Stock Pledge
     Agreement"),  (iv)  the  Registration Rights Agreement dated as of June 30,
     2005  between  the  Company  and the Purchaser (as amended, modified and/or
     supplemented  from  time  to  time,  the  "Registration  Rights Agreement")
     relating  to  any  and  all  notes,  options, warrants and other securities
     delivered  to the Purchaser by the Company and/or its Subsidiaries pursuant
     to  that certain Securities Purchase Agreement dated as of June 30, 2005 by
     and  between  the  Company  and the Purchaser (collectively, the "June 2005
     Securities");  (v)  the  Amended  and  Restated  Mortgage,  Deed  of Trust,
     Security  Agreement,  Financing  Statement  and  Assignment  of  Production
     effective  as  of  April  26,  2006  made  by  the  Company in favor of the
     Purchaser (as amended, modified and/or supplemented from time to time); the
     April  26, 2006 Gulf Coast Oil Corporation ("Gulf Coast") Secured Term Note
     and  Common  Stock  Purchase  Warrant;  and  the  June 30, 2006, Gulf Coast
     Secured  Term  Note,  (v)  the  Funds Escrow Agreement dated as of the date
     hereof  among  the  Company, the Purchaser and the escrow agent referred to
     therein,  substantially  in  the  form  of  Exhibit  C  hereto (as amended,
     modified  and/or  supplemented  from time to time, the "Escrow Agreement"),
     (viii)  the  Amended Mortgage, Deed of Trust, Security Agreement, Financing
     Statement  and  Assignment  of Production dated on or about the date hereof
     made by the Company in favor of the Purchaser and (ix) all other documents,
     instruments and agreements entered into in connection with the transactions
     contemplated  hereby  and  thereby (the preceding clauses (ii) through (ix)
     including  subclauses  (A) through (C) in clause (iii) above, collectively,
     the  "Related  Agreements"); (b) issue and sell the Note; and (c) carry out
     the provisions of this Agreement and the Related Agreements and to carry on
     its  business  as  presently conducted. Each of the Company and each of its
     Subsidiaries  is  duly qualified and is authorized to do business and is in
     good  standing  as  a foreign corporation, partnership or limited liability
     company,  as  the  case may be, in all jurisdictions in which the nature or
     location  of  its  activities and of its properties (both owned and leased)
     makes such qualification necessary, except for those jurisdictions in which
     failure  to  do  so  has  not, or could not reasonably be expected to have,
     individually  or  in  the  aggregate,  a  material  adverse  effect  on the
     business,  assets,  liabilities,  condition  (financial  or  otherwise),
     properties,  operations  or  prospects of the Company and its Subsidiaries,
     taken  individually  and  as  a  whole  (a  "Material  Adverse  Effect").

          4.2  Subsidiaries. Each direct and indirect Subsidiary of the Company,
               ------------
     the  direct  owner of such Subsidiary and its percentage ownership thereof,
     is  set  forth  on  Schedule  4.2.  For  the  purpose  of this Agreement, a
     "Subsidiary"  of  any  person  or  entity  means (a) a corporation or other
     entity  whose  shares of stock or other ownership interests having ordinary
     voting  power  (other  than  stock or other ownership interests having such
     power only by reason of the happening of a contingency) to elect a majority
     of  the  directors  of  such  corporation,  or  other  persons  or entities
     performing similar functions for such person or entity, are owned, directly
     or  indirectly,  by  such  person  or  entity or (b) a corporation or other
     entity  in  which  such person or entity owns, directly or indirectly, more
     than  50%  of  the  equity  interests  at  such  time.

          4.3  Capitalization;  Voting  Rights.
               -------------------------------

          (a) The authorized capital stock of the Company, as of the date hereof
     consists  of  220,000,000 shares, of which 200,000,000 are shares of Common
     Stock,  par  value  $0.001 per share, 56,010,612 shares of which are issued
     and  outstanding  as  of  the  date  hereof,  and  20,000,000 are shares of
     preferred  stock,  par value $0.001 per share. The Company has 5,000 shares

                                     -3-
<PAGE>

     of Series A convertible preferred stock designated and 0 shares of Series A
     convertible  preferred  stock issued and outstanding as of the date hereof,
     which  can vote in the aggregate an amount equal to 1,500,000 shares of the
     Company's  Common  Stock,  and  2,000,000  shares  of  Series B convertible
     preferred  stock  designated and 0 shares of Series B convertible preferred
     stock  issued  and  outstanding.  The  authorized,  issued  and outstanding
     capital  stock  of  each Subsidiary of the Company is set forth on Schedule
     4.3.

          (b)  Except  as  disclosed on Schedule 4.3, other than: (i) the shares
     reserved  for  issuance  under  the  Company's stock option plans; and (ii)
     shares  which  may  be  granted  pursuant to this Agreement and the Related
     Agreements,  there  are no outstanding options, warrants, rights (including
     conversion  or  preemptive  rights  and  rights of first refusal), proxy or
     stockholder  agreements,  or arrangements or agreements of any kind for the
     purchase  or  acquisition from the Company of any of its securities. Except
     as disclosed on Schedule 4.3, neither the offer, issuance or sale of any of
     the  Note  nor the consummation of any transaction contemplated hereby will
     result  in a change in the price or number of any securities of the Company
     outstanding,  under  anti-dilution or other similar provisions contained in
     or  affecting  any  such  securities.

          (c)  All  issued  and outstanding shares of the Company's common stock
     (the  "Common Stock"): (i) have been duly authorized and validly issued and
     are  fully  paid and nonassessable; and (ii) were issued in compliance with
     all  applicable  state  and  federal  laws  concerning  the  issuance  of
     securities.

          (d) The rights, preferences, privileges and restrictions of the shares
     of  the  Common  Stock  are  as  stated  in  the  Company's  Certificate of
     Incorporation  (the  "Charter").  When  issued  in  compliance  with  the
     provisions  of  this  Agreement and the Company's Charter, the Note will be
     validly issued, fully paid and nonassessable, and will be free of any liens
     or  encumbrances;  provided,  however,  that  the  Note  may  be subject to
     restrictions  on transfer under state and/or federal securities laws as set
     forth  herein  or as otherwise required by such laws at the time a transfer
     is  proposed.

          4.4  Authorization; Binding Obligations. All corporate, partnership or
               ----------------------------------
     limited  liability  company,  as the case may be, action on the part of the
     Company  and  each of its Subsidiaries (including their respective officers
     and  directors)  necessary  for the authorization of this Agreement and the
     Related  Agreements,  the performance of all obligations of the Company and
     its  Subsidiaries  hereunder  and under the other Related Agreements at the
     Closing, and the authorization, sale, issuance and delivery of the Note has
     been  taken  or  will be taken prior to the Closing. This Agreement and the
     Related  Agreements,  when executed and delivered and to the extent it is a
     party thereto, will be valid and binding obligations of each of the Company
     and  each  of  its  Subsidiaries,  enforceable  against each such entity in
     accordance  with  their  terms,  except:

          (a)  as  limited by applicable bankruptcy, insolvency, reorganization,
     moratorium  or  other  laws of general application affecting enforcement of
     creditors'  rights;  and

          (b)  general  principles  of  equity that restrict the availability of
     equitable  or  legal  remedies.

                                     -4-
<PAGE>

The  sale  of the Note will not be subject to any preemptive rights or rights of
first  refusal  that  have  not  been  properly  waived  or  complied  with.

          4.5  Liabilities.  Neither the Company nor any of its Subsidiaries has
               -----------
     any liabilities, except current liabilities incurred in the ordinary course
     of business and liabilities disclosed in any of the Company's filings under
     the Securities Exchange Act of 1934 ("Exchange Act") made prior to the date
     of  this  Agreement  (collectively,  the "Exchange Act Filings"), copies of
     which  have  been  provided  to  the  Purchaser.

          4.6  Agreements;  Action.  Except  as  set forth on Schedule 4.6 or as
               -------------------
     disclosed  in  any  Exchange  Act  Filings:

          (a)  there  are no agreements, understandings, instruments, contracts,
     proposed  transactions,  judgments,  orders,  writs or decrees to which the
     Company or any of its Subsidiaries is a party or by which it is bound which
     may  involve: (i) obligations (contingent or otherwise) of, or payments to,
     the  Company  or  any  of its Subsidiaries in excess of $50,000 (other than
     obligations  of, or payments to, the Company or any of its Subsidiaries (1)
     to  the  Purchaser and (2) arising from purchase or sale agreements entered
     into  in  the ordinary course of business); or (ii) the transfer or license
     of  any  patent,  copyright,  trade secret or other proprietary right to or
     from  the  Company  or any of its Subsidiaries (other than licenses arising
     from  the purchase of "off the shelf" or other standard products); or (iii)
     provisions  restricting the development, manufacture or distribution of the
     Company's  or  any  of  its  Subsidiaries'  products  or  services; or (iv)
     indemnification  by  the Company or any of its Subsidiaries with respect to
     infringements  of  proprietary  rights.

          (b)  Since  December  31, 2005 (the "Balance Sheet Date"), neither the
     Company  nor  any  of  its  Subsidiaries  has:  (i)  declared  or  paid any
     dividends,  or  authorized or made any distribution upon or with respect to
     any  class  or  series of its capital stock; (ii) incurred any indebtedness
     for  money  borrowed  or  any other liabilities (other than ordinary course
     obligations)  individually  in  excess  of  $50,000  or,  in  the  case  of
     indebtedness  and/or  liabilities individually less than $50,000, in excess
     of  $100,000  in  the  aggregate;  (iii)  made any loans or advances to any
     person  or entity in excess, individually or in the aggregate, of $100,000,
     other  than  ordinary  course  advances  for travel expenses; or (iv) sold,
     exchanged  or otherwise disposed of any of its assets or rights, other than
     the  sale  of  its  inventory  in  the  ordinary  course  of  business.

          (c)  For  the  purposes  of  subsections  (a)  and  (b)  above,  all
     indebtedness,  liabilities,  agreements,  understandings,  instruments,
     contracts  and  proposed  transactions  involving the same person or entity
     (including persons or entities the Company or any Subsidiary of the Company
     has reason to believe are affiliated therewith) shall be aggregated for the
     purpose  of  meeting  the  individual  minimum  dollar  amounts  of  such
     subsections.

          (d)  The  Company  maintains  disclosure  controls  and  procedures
     ("Disclosure  Controls") designed to ensure that information required to be
     disclosed  by the Company in the reports that it files or submits under the
     Exchange  Act  is recorded, processed, summarized, and reported, within the
     time  periods  specified  in  the  rules  and  forms  of the Securities and
     Exchange  Commission  ("SEC").

                                     -5-
<PAGE>

          (e) The Company makes and keeps books, records, and accounts, that, in
     reasonable  detail,  accurately  and  fairly  reflect  the transactions and
     dispositions  of  the  Company's  assets.  The  Company  maintains internal
     control  over financial reporting ("Financial Reporting Controls") designed
     by,  or  under  the  supervision  of, the Company's principal executive and
     principal  financial  officers,  and  effected  by  the  Company's board of
     directors, management, and other personnel, to provide reasonable assurance
     regarding  the  reliability  of  financial reporting and the preparation of
     financial  statements  for  external  purposes in accordance with generally
     accepted  accounting  principles  ("GAAP"),  including  that:

               (i)  transactions  are  executed  in accordance with management's
          general  or  specific  authorization;

               (ii)  unauthorized  acquisition,  use,  or  disposition  of  the
          Company's  assets  that  could have a material effect on the financial
          statements  are  prevented  or  timely  detected;

               (iii)  transactions  are  recorded  as  necessary  to  permit
          preparation  of financial statements in accordance with GAAP, and that
          the  Company's  receipts  and  expenditures  are  being  made  only in
          accordance  with  authorizations of the Company's management and board
          of  directors;

               (iv)  transactions  are  recorded  as  necessary  to  maintain
          accountability  for  assets;  and

               (v)  the  recorded accountability for assets is compared with the
          existing  assets  at  reasonable  intervals, and appropriate action is
          taken  with  respect  to  any  differences.

          (f)  There  is no weakness in any of the Company's Disclosure Controls
     or  Financial Reporting Controls that is required to be disclosed in any of
     the  Exchange  Act  Filings,  except  as  so  disclosed.

          4.7  Obligations  to  Related Parties. Except as set forth on Schedule
               --------------------------------
     4.7,  there are no obligations of the Company or any of its Subsidiaries to
     officers, directors, stockholders or employees of the Company or any of its
     Subsidiaries  other  than:

          (a)  for  payment  of  salary  for  services  rendered  and  for bonus
     payments;

          (b)  reimbursement  for  reasonable expenses incurred on behalf of the
     Company  and  its  Subsidiaries;

          (c)  for  other standard employee benefits made generally available to
     all  employees  (including  stock  option  agreements outstanding under any
     stock  option  plan  approved  by the Board of Directors of the Company and
     each  Subsidiary  of  the  Company,  as  applicable);  and

          (d)  obligations  listed in the Company's and each of its Subsidiary's
     financial  statements  or  disclosed  in  any of the Company's Exchange Act
     Filings.

                                     -6-
<PAGE>

Except  as  described  above or set forth on Schedule 4.7, none of the officers,
directors  or,  to  the  best  of  the  Company's  knowledge,  key  employees or
stockholders  of  the Company or any of its Subsidiaries or any members of their
immediate  families,  are  indebted  to  the Company or any of its Subsidiaries,
individually  or  in  the  aggregate, in excess of $50,000 or have any direct or
indirect ownership interest in any firm or corporation with which the Company or
any  of  its  Subsidiaries is affiliated or with which the Company or any of its
Subsidiaries  has  a  business  relationship,  or  any firm or corporation which
competes  with  the  Company  or  any  of  its  Subsidiaries, other than passive
investments  in  publicly  traded  companies (representing less than one percent
(1%)  of  such  company)  which  may  compete  with  the  Company  or any of its
Subsidiaries.  Except  as  described above, no officer, director, stockholder of
the  Company  or  any  of  its  Subsidiaries,  or  any member of their immediate
families,  is,  directly or indirectly, interested in any material contract with
the  Company  or  any  of  its Subsidiaries and no agreements, understandings or
proposed  transactions  are  contemplated  between  the  Company  or  any of its
Subsidiaries  and any such person.  Except as set forth on Schedule 4.7, neither
the  Company  nor  any  of  its Subsidiaries is a guarantor or indemnitor of any
indebtedness  of  any  other  person,  firm  or  entity.

          4.8  Changes. Since the Balance Sheet Date, except as disclosed in any
               -------
     Exchange  Act  Filing or in any Schedule to this Agreement or to any of the
     Related  Agreements,  there  has  not  been:

          (a)  any  change  in  the  business,  assets,  liabilities,  condition
     (financial  or  otherwise),  properties,  operations  or  prospects  of the
     Company  or any of its Subsidiaries, which individually or in the aggregate
     has  had,  or  could reasonably be expected to have, individually or in the
     aggregate,  a  Material  Adverse  Effect;

          (b)  any  resignation  or  termination of any officer, key employee or
     group  of  employees  of  the  Company  or  any  of  its  Subsidiaries;

          (c) any material change, except in the ordinary course of business, in
     the contingent obligations of the Company or any of its Subsidiaries by way
     of  guaranty,  endorsement,  indemnity,  warranty  or  otherwise;

          (d)  any  damage,  destruction  or  loss,  whether  or  not covered by
     insurance,  which  has  had,  or  could  reasonably  be  expected  to have,
     individually  or  in  the  aggregate,  a  Material  Adverse  Effect;

          (e) any waiver by the Company or any of its Subsidiaries of a valuable
     right  or  of  a  material  debt  owed  to  it;

          (f)  any  direct  or  indirect loans made by the Company or any of its
     Subsidiaries  to  any  stockholder,  employee,  officer  or director of the
     Company  or  any  of  its  Subsidiaries,  other  than  advances made in the
     ordinary  course  of  business;

          (g)  any  material change in any compensation arrangement or agreement
     with  any employee, officer, director, stockholder of the Company or any of
     its  Subsidiaries;

                                     -7-
<PAGE>

          (h)  any  declaration or payment of any dividend or other distribution
     of  the  assets  of  the  Company  or  any  of  its  Subsidiaries;

          (i)  any  labor organization activity related to the Company or any of
     its  Subsidiaries;

          (j)  any debt, obligation or liability incurred, assumed or guaranteed
     by  the  Company  or  any  of its Subsidiaries, except those for immaterial
     amounts  and  for  current  liabilities  incurred in the ordinary course of
     business;

          (k)  any  sale,  assignment  or  transfer  of any patents, trademarks,
     copyrights,  trade  secrets or other intangible assets owned by the Company
     or  any  of  its  Subsidiaries;

          (l)  any  change in any material agreement to which the Company or any
     of its Subsidiaries is a party or by which either the Company or any of its
     Subsidiaries  is  bound  which  either individually or in the aggregate has
     had,  or  could  reasonably  be  expected  to  have, individually or in the
     aggregate,  a  Material  Adverse  Effect;

          (m)  any  other  event  or  condition  of  any  character that, either
     individually  or in the aggregate, has had, or could reasonably be expected
     to  have,  individually  or in the aggregate, a Material Adverse Effect; or

          (n)  any  arrangement  or  commitment  by  the  Company  or any of its
     Subsidiaries  to do any of the acts described in subsection (a) through (m)
     above.

          4.9 Title to Properties and Assets; Liens, Etc. Except as set forth on
              ------------------------------------------
     Schedule 4.9, each of the Company and each of its Subsidiaries has good and
     marketable  title  to  its  properties  and  assets,  and good title to its
     leasehold  interests,  in  each  case subject to no mortgage, pledge, lien,
     lease,  encumbrance  or  charge,  other  than:

          (a)  those  resulting from taxes which have not yet become delinquent;

          (b)  minor liens and encumbrances which do not materially detract from
     the  value  of  the  property  subject  thereto  or  materially  impair the
     operations  of  the  Company or any of its Subsidiaries, so long as in each
     such  case, such liens and encumbrances have no effect on the lien priority
     of  the  Purchaser  in  such  property;  and

          (c)  those  that  have  otherwise  arisen  in  the  ordinary course of
     business,  so  long  as  they  have  no  effect on the lien priority of the
     Purchaser  in  such  property.

All  facilities,  machinery,  equipment, fixtures, vehicles and other properties
owned,  leased or used by the Company and its Subsidiaries are in good operating
condition  and  repair  and  are  reasonably fit and usable for the purposes for
which they are being used.  Except as set forth on Schedule 4.9, the Company and
its  Subsidiaries  are  in  compliance  with all material terms of each lease to
which  it  is  a  party  or  is  otherwise  bound.

                                     -8-
<PAGE>

          4.10  Intellectual  Property.
                ----------------------

          (a) Each of the Company and each of its Subsidiaries owns or possesses
     sufficient  legal  rights  to all patents, trademarks, service marks, trade
     names,  copyrights,  trade  secrets,  licenses,  information  and  other
     proprietary  rights  and  processes  necessary  for  its  business  as  now
     conducted  and,  to  the  Company's  knowledge, as presently proposed to be
     conducted  (the "Intellectual Property"), without any known infringement of
     the  rights  of  others.  There  are  no  outstanding  options, licenses or
     agreements of any kind relating to the foregoing proprietary rights, nor is
     the  Company or any of its Subsidiaries bound by or a party to any options,
     licenses or agreements of any kind with respect to the patents, trademarks,
     service  marks,  trade  names,  copyrights,  trade  secrets,  licenses,
     information  and other proprietary rights and processes of any other person
     or  entity other than such licenses or agreements arising from the purchase
     of  "off  the  shelf"  or  standard  products.

          (b)  Neither  the Company nor any of its Subsidiaries has received any
     communications  alleging  that  the  Company or any of its Subsidiaries has
     violated  any  of  the  patents,  trademarks,  service  marks, trade names,
     copyrights or trade secrets or other proprietary rights of any other person
     or entity, nor is the Company or any of its Subsidiaries aware of any basis
     therefor.

          (c) The Company does not believe it is or will be necessary to utilize
     any  inventions,  trade  secrets  or  proprietary information of any of its
     employees  made  prior  to  their  employment  by the Company or any of its
     Subsidiaries,  except  for  inventions,  trade  secrets  or  proprietary
     information that have been rightfully assigned to the Company or any of its
     Subsidiaries.

          4.11 Compliance with Other Instruments. Neither the Company nor any of
               ---------------------------------
     its  Subsidiaries is in violation or default of (a) any term of its Charter
     or  Bylaws,  or (b) any provision of any indebtedness, mortgage, indenture,
     contract,  agreement  or  instrument to which it is party or by which it is
     bound  or  of  any  judgment,  decree,  order  or  writ, which violation or
     default,  in  the  case of this clause (b), has had, or could reasonably be
     expected  to  have,  either  individually  or  in the aggregate, a Material
     Adverse  Effect.  Subject  to  the  requirement that the Company obtain any
     consents  set  forth  on  Schedule  4.11,  the  Company's  or  any  of  its
     Subsidiary's  execution,  delivery  and  performance of and compliance with
     this  Agreement  and the Related Agreements to which it is a party, and the
     issuance  and  sale of the Note by the Company pursuant hereto and thereto,
     will  not,  with or without the passage of time or giving of notice, result
     in  any  such  material  violation,  or be in conflict with or constitute a
     default  under any such term or provision, or result in the creation of any
     mortgage, pledge, lien, encumbrance or charge upon any of the properties or
     assets  of  the  Company  or  any  of  its  Subsidiaries or the suspension,
     revocation,  impairment,  forfeiture  or nonrenewal of any permit, license,
     authorization  or  approval  applicable  to  the  Company,  its business or
     operations  or  any  of  its  assets  or  properties.

          4.12 Litigation. Except as set forth on Schedule 4.12 hereto, there is
               ----------
     no  action,  suit, proceeding or investigation pending or, to the Company's
     knowledge,  currently  threatened  against  the  Company  or  any  of  its
     Subsidiaries  that  prevents  the  Company  or any of its Subsidiaries from
     entering  into  this  Agreement  or  the  other Related Agreements, or from

                                     -9-
<PAGE>

     consummating  the transactions contemplated hereby or thereby, or which has
     had, or could reasonably be expected to have, either individually or in the
     aggregate,  a  Material  Adverse Effect or any change in the current equity
     ownership  of  the  Company  or any of its Subsidiaries, nor is the Company
     aware  that  there is any basis to assert any of the foregoing. Neither the
     Company  nor  any  of  its  Subsidiaries  is  a  party to or subject to the
     provisions  of any order, writ, injunction, judgment or decree of any court
     or  government  agency  or  instrumentality.  There  is  no  action,  suit,
     proceeding  or  investigation  by  the  Company  or any of its Subsidiaries
     currently  pending  or which the Company or any of its Subsidiaries intends
     to  initiate.

          4.13  Tax  Returns  and  Payments. Each of the Company and each of its
                ---------------------------
     Subsidiaries  has  timely  filed all tax returns (federal, state and local)
     required  to  be filed by it. All taxes shown to be due and payable on such
     returns,  any  assessments  imposed, and all other taxes due and payable by
     the  Company or any of its Subsidiaries on or before the Closing, have been
     paid  or  will  be paid prior to the time they become delinquent. Except as
     set forth on Schedule 4.13, neither the Company nor any of its Subsidiaries
     has  been  advised:

          (a) that any of its returns, federal, state or other, have been or are
     being  audited  as  of  the  date  hereof;  or

          (b)  of  any  adjustment,  deficiency, assessment or court decision in
     respect  of  its  federal,  state  or  other  taxes.

The Company has no knowledge of any liability for any tax to be imposed upon its
properties  or  assets  as  of the date of this Agreement that is not adequately
provided  for.

          4.14  Employees.  Except  as  set  forth on Schedule 4.14, neither the
                ---------
     Company  nor  any  of  its  Subsidiaries  has  any  collective  bargaining
     agreements  with  any  of its employees. There is no labor union organizing
     activity pending or, to the Company's knowledge, threatened with respect to
     the Company or any of its Subsidiaries. Except as disclosed in the Exchange
     Act  Filings  or  on  Schedule  4.14,  neither  the  Company nor any of its
     Subsidiaries  is  a party to or bound by any currently effective employment
     contract,  deferred  compensation  arrangement, bonus plan, incentive plan,
     profit  sharing  plan,  retirement agreement or other employee compensation
     plan  or  agreement. To the Company's knowledge, no employee of the Company
     or any of its Subsidiaries, nor any consultant with whom the Company or any
     of  its  Subsidiaries  has  contracted,  is in violation of any term of any
     employment  contract,  proprietary  information  agreement  or  any  other
     agreement  relating  to the right of any such individual to be employed by,
     or  to contract with, the Company or any of its Subsidiaries because of the
     nature  of  the  business  to  be  conducted  by  the Company or any of its
     Subsidiaries;  and  to  the Company's knowledge the continued employment by
     the  Company  and  its  Subsidiaries  of  their  present employees, and the
     performance  of  the  Company's  and  its  Subsidiaries' contracts with its
     independent contractors, will not result in any such violation. Neither the
     Company  nor  any of its Subsidiaries is aware that any of its employees is
     obligated  under any contract (including licenses, covenants or commitments
     of  any  nature)  or other agreement, or subject to any judgment, decree or
     order of any court or administrative agency that would interfere with their
     duties  to  the Company or any of its Subsidiaries. Neither the Company nor
     any  of  its  Subsidiaries  has  received any notice alleging that any such
     violation  has  occurred. Except for employees who have a current effective
     employment  agreement  with  the  Company  or  any  of its Subsidiaries, no

                                      -10-
<PAGE>

     employee  of  the  Company  or any of its Subsidiaries has been granted the
     right  to continued employment by the Company or any of its Subsidiaries or
     to  any  material compensation following termination of employment with the
     Company  or  any of its Subsidiaries. Except as set forth on Schedule 4.14,
     the  Company  is  not  aware  that  any  officer,  key employee or group of
     employees  intends  to  terminate  his,  her  or  their employment with the
     Company  or  any  of  its  Subsidiaries, nor does the Company or any of its
     Subsidiaries  have  a  present intention to terminate the employment of any
     officer,  key  employee  or  group  of  employees.

          4.15 Compliance with Laws; Permits. Neither the Company nor any of its
               --------------------
     Subsidiaries  is in violation of any provision of the Sarbanes-Oxley Act of
     2002  or any SEC regulation or rule or any rule of the Principal Market (as
     hereafter  defined) promulgated thereunder or any applicable statute, rule,
     regulation,  order  or restriction of any domestic or foreign government or
     any  instrumentality  or  agency  thereof  in respect of the conduct of its
     business  or  the  ownership  of  its  properties  which  has had, or could
     reasonably  be expected to have, either individually or in the aggregate, a
     Material  Adverse  Effect.  No  governmental orders, permissions, consents,
     approvals  or  authorizations  are  required  to  be  obtained  and  no
     registrations  or  declarations are required to be filed in connection with
     the execution and delivery of this Agreement or any other Related Agreement
     and  the  issuance  of  the Note, except such as have been duly and validly
     obtained  or  filed, or with respect to any filings that must be made after
     the  Closing,  as will be filed in a timely manner. Each of the Company and
     its  Subsidiaries  has  all  material franchises, permits, licenses and any
     similar  authority  necessary  for the conduct of its business as now being
     conducted  by  it,  the  lack of which could, either individually or in the
     aggregate,  reasonably  be  expected  to  have  a  Material Adverse Effect.

          4.16 Environmental and Safety Laws. Neither the Company nor any of its
               -----------------------------
     Subsidiaries  is  in violation of any applicable statute, law or regulation
     relating  to  the environment or occupational health and safety, and to its
     knowledge,  no  material  expenditures  are or will be required in order to
     comply  with  any  such  existing statute, law or regulation. Except as set
     forth  on Schedule 4.17, no Hazardous Materials (as defined below) are used
     or  have  been  used,  stored,  or disposed of by the Company or any of its
     Subsidiaries  or, to the Company's knowledge, by any other person or entity
     on  any  property  owned,  leased  or  used  by  the  Company or any of its
     Subsidiaries.  For  the  purposes  of  the  preceding  sentence, "Hazardous
     Materials"  shall  mean:

          (a)  materials which are listed or otherwise defined as "hazardous" or
     "toxic"  under any applicable local, state, federal and/or foreign laws and
     regulations  that  govern  the  existence and/or remedy of contamination on
     property, the protection of the environment from contamination, the control
     of  hazardous  wastes,  or other activities involving hazardous substances,
     including  building  materials;  or

          (b)  any  petroleum  products  or  nuclear  materials.

          4.17  Valid Offering. Assuming the accuracy of the representations and
                --------------
     warranties  of  the  Purchaser contained in this Agreement, the offer, sale
     and  issuance of the Note will be exempt from the registration requirements
     of  the Securities Act of 1933, as amended (the "Securities Act"), and will
     have  been  registered  or  qualified  (or are exempt from registration and

                                      -11-
<PAGE>

     qualification) under the registration, permit or qualification requirements
     of  all  applicable  state  securities  laws.

          4.18 Full Disclosure. Each of the Company and each of its Subsidiaries
               ---------------
     has  provided the Purchaser with all information requested by the Purchaser
     in  connection  with  its  decision  to  purchase  the  Note, including all
     information  the  Company  and  its  Subsidiaries  believe  is  reasonably
     necessary  to  make  such  investment decision. Neither this Agreement, the
     Related  Agreements,  the exhibits and schedules hereto and thereto nor any
     other  document  delivered  by  the  Company  or any of its Subsidiaries to
     Purchaser or its attorneys or agents in connection herewith or therewith or
     with  the  transactions  contemplated hereby or thereby, contain any untrue
     statement of a material fact nor omit to state a material fact necessary in
     order  to  make the statements contained herein or therein, in light of the
     circumstances  in  which  they  are  made,  not  misleading.  Any financial
     projections and other estimates provided to the Purchaser by the Company or
     any  of  its Subsidiaries were based on the Company's and its Subsidiaries'
     experience  in  the  industry  and on assumptions of fact and opinion as to
     future  events which the Company or any of its Subsidiaries, at the date of
     the  issuance  of such projections or estimates, believed to be reasonable.

          4.19  Insurance.  Each of the Company and each of its Subsidiaries has
                ---------
     general  commercial,  product liability, and will deliver to the Purchaser,
     within  thirty (30) days of the Closing Date, evidence of fire and casualty
     insurance policies, in each case, with coverages which the Company believes
     are  customary  for  companies  similarly  situated  to the Company and its
     Subsidiaries  in  the  same  or  similar  business.

          4.20  SEC  Reports.  Except as set forth on Schedule 4.21, the Company
                ------------
     has  filed all proxy statements, reports and other documents required to be
     filed  by  it  under  the  Securities  Exchange  Act  1934, as amended (the
     "Exchange Act"). The Company has furnished the Purchaser copies of: (a) its
     Annual Reports on Form 10-KSB for its fiscal years ended December 31, 2005;
     and  (b) its Quarterly Reports on Form 10-QSB for its fiscal quarters ended
     March  31, 2006, June 30, 2006, September 30, 2006 and the Form 8-K filings
     which  it  has  made  during  the  fiscal year 2006 (collectively, the "SEC
     Reports").  Except  as  set forth on Schedule 4.21, each SEC Report was, at
     the  time of its filing, in substantial compliance with the requirements of
     its  respective  form  and  none  of  the  SEC  Reports,  nor the financial
     statements (and the notes thereto) included in the SEC Reports, as of their
     respective  filing dates, contained any untrue statement of a material fact
     or  omitted  to  state  a  material  fact  required to be stated therein or
     necessary  to  make  the  statements therein, in light of the circumstances
     under  which  they  were  made,  not  misleading.

          4.21  Listing.  The  Company's  Common  Stock  is listed or quoted, as
                -------
     applicable,  on a Principal Market (as hereafter defined) and satisfies and
     at  all times hereafter will satisfy, all requirements for the continuation
     of  such  listing or quotation, as applicable. The Company has not received
     any notice that its Common Stock will be delisted from, or no longer quoted
     on,  as  applicable, the Principal Market or that its Common Stock does not
     meet  all  requirements  for  such listing or quotation, as applicable. For
     purposes  hereof,  the  term "Principal Market" means the NASD OTC Bulletin
     Board,  NASDAQ  SmallCap  Market,  NASDAQ  National Market System, American
     Stock Exchange or New York Stock Exchange (whichever of the foregoing is at
     the  time  the  principal trading exchange or market for the Common Stock).

                                      -12-
<PAGE>

          4.22  Intentionally  Deleted.
                -----------------------

          4.23 Patriot Act. The Company certifies that, to the best of Company's
               -----------
     knowledge,  neither  the  Company  nor  any  of  its  Subsidiaries has been
     designated,  nor  is  or  shall  be  owned  or  controlled by, a "suspected
     terrorist"  as  defined  in  Executive  Order  13224.  The  Company  hereby
     acknowledges  that  the  Purchaser seeks to comply with all applicable laws
     concerning money laundering and related activities. In furtherance of those
     efforts,  the  Company  hereby represents, warrants and covenants that: (a)
     none  of  the  cash or property that the Company or any of its Subsidiaries
     will  pay  or will contribute to the Purchaser has been or shall be derived
     from,  or  related  to,  any  activity that is deemed criminal under United
     States law; and (b) no contribution or payment by the Company or any of its
     Subsidiaries  to  the  Purchaser,  to  the  extent that they are within the
     Company's  and/or its Subsidiaries' control shall cause the Purchaser to be
     in  violation  of  the  United  States  Bank Secrecy Act, the United States
     International  Money  Laundering  Control  Act of 1986 or the United States
     International  Money  Laundering Abatement and Anti-Terrorist Financing Act
     of  2001.  The  Company shall promptly notify the Purchaser if any of these
     representations,  warranties  or  covenants  ceases to be true and accurate
     regarding the Company or any of its Subsidiaries. The Company shall provide
     the  Purchaser  any and all additional information regarding the Company or
     any of its Subsidiaries that the Purchaser deems necessary or convenient to
     ensure  compliance with all applicable laws concerning money laundering and
     similar  activities. The Company understands and agrees that if at any time
     it  is  discovered that any of the foregoing representations, warranties or
     covenants  are  incorrect,  or  if  otherwise required by applicable law or
     regulation related to money laundering or similar activities, the Purchaser
     may  undertake appropriate actions to ensure compliance with applicable law
     or  regulation,  including but not limited to segregation and/or redemption
     of  the  Purchaser's  investment  in  the  Company.  The  Company  further
     understands  that  the Purchaser may release confidential information about
     the  Company  and  its  Subsidiaries  and,  if  applicable,  any underlying
     beneficial  owners,  to  proper  authorities  if the Purchaser, in its sole
     discretion, determines that it is in the best interests of the Purchaser in
     light  of  relevant  rules  and  regulations  under  the  laws set forth in
     subsection  (b)  above.

          4.24  ERISA. Based upon the Employee Retirement Income Security Act of
                -----
     1974  ("ERISA"),  and  the  regulations  and  published  interpretations
             ------
     thereunder: (a) neither the Company nor any of its Subsidiaries has engaged
     in  any  Prohibited  Transactions  (as  defined in Section 406 of ERISA and
     Section  4975  of  the  Internal  Revenue  Code  of  1986,  as amended (the
     "Code"));  (b) each of the Company and each of its Subsidiaries has met all
      ----
     applicable  minimum  funding  requirements  under  Section  302 of ERISA in
     respect  of  its plans; (c) neither the Company nor any of its Subsidiaries
     has  any knowledge of any event or occurrence which would cause the Pension
     Benefit  Guaranty  Corporation  to  institute proceedings under Title IV of
     ERISA  to  terminate  any employee benefit plan(s); (d) neither the Company
     nor  any  of  its  Subsidiaries  has  any  fiduciary  responsibility  for
     investments  with  respect  to any plan existing for the benefit of persons
     other  than  the  Company's or such Subsidiary's employees; and (e) neither
     the  Company  nor  any  of  its  Subsidiaries  has withdrawn, completely or
     partially,  from  any  multi-employer pension plan so as to incur liability
     under  the  Multiemployer  Pension  Plan  Amendments  Act  of  1980.

                                      -13-
<PAGE>

     5.  Representations  and  Warranties of the Purchaser. The Purchaser hereby
         -------------------------------------------------
represents  and  warrants  to  the  Company as follows (such representations and
warranties  do  not  lessen or obviate the representations and warranties of the
Company  set  forth  in  this  Agreement):

          5.1 No Shorting. The Purchaser or any of its affiliates and investment
              -----------
     partners  has  not,  will  not  and will not cause any person or entity, to
     directly  or  indirectly  engage  in  "short sales" of the Company's Common
     Stock  as  long  as  the  Note  shall  be  outstanding.

          5.2  Requisite  Power  and  Authority. The Purchaser has all necessary
               --------------------------------
     power  and  authority under all applicable provisions of law to execute and
     deliver  this  Agreement  and the Related Agreements and to carry out their
     provisions.  All  corporate action on the Purchaser's part required for the
     lawful  execution and delivery of this Agreement and the Related Agreements
     have  been  or  will  be effectively taken prior to the Closing. Upon their
     execution  and  delivery, this Agreement and the Related Agreements will be
     valid  and  binding obligations of the Purchaser, enforceable in accordance
     with  their  terms,  except:

          (a)  as  limited by applicable bankruptcy, insolvency, reorganization,
     moratorium  or  other  laws of general application affecting enforcement of
     creditors'  rights;  and

          (b)  as  limited  by  general  principles  of equity that restrict the
     availability  of  equitable  and  legal  remedies.

          5.3  Investment  Representations.  The  Purchaser understands that the
               ---------------------------
     Note  is  being offered and sold pursuant to an exemption from registration
     contained  in  the  Securities  Act  based  in  part  upon  the Purchaser's
     representations contained in this Agreement, including, without limitation,
     that  the  Purchaser  is  an  "accredited  investor"  within the meaning of
     Regulation  D under the Securities Act of 1933, as amended (the "Securities
     Act").  The  Purchaser confirms that it has received or has had full access
     to  all  the  information  it considers necessary or appropriate to make an
     informed investment decision with respect to the Note to be purchased by it
     under  this  Agreement.  The  Purchaser further confirms that it has had an
     opportunity to ask questions and receive answers from the Company regarding
     the  Company's  and  its  Subsidiaries'  business, management and financial
     affairs  and  the  terms  and  conditions  of the Offering, the Note and to
     obtain  additional  information  (to  the extent the Company possessed such
     information  or  could  acquire  it without unreasonable effort or expense)
     necessary  to verify any information furnished to the Purchaser or to which
     the  Purchaser  had  access.

          5.4  The  Purchaser Bears Economic Risk. The Purchaser has substantial
               ----------------------------------
     experience in evaluating and investing in private placement transactions of
     securities  in  companies  similar  to the Company so that it is capable of
     evaluating  the  merits  and risks of its investment in the Company and has
     the  capacity  to  protect  its  own  interests.

          5.5  Acquisition  for Own Account. The Purchaser is acquiring the Note
               ----------------------------
     for  the  Purchaser's own account for investment only, and not as a nominee
     or agent and not with a view towards or for resale in connection with their
     distribution.

          5.6  The  Purchaser Can Protect Its Interest. The Purchaser represents
               ---------------------------------------
     that  by  reason  of  its,  or  of its management's, business and financial
     experience, the Purchaser has the capacity to evaluate the merits and risks
     of  its  investment  in  the  Note  and  to  protect  its  own interests in

                                      -14-
<PAGE>

     connection  with  the  transactions  contemplated in this Agreement and the
     Related  Agreements.  Further,  the Purchaser is aware of no publication of
     any  advertisement  in connection with the transactions contemplated in the
     Agreement  or  the  Related  Agreements.

          5.7  Accredited  Investor.  The  Purchaser  represents  that  it is an
               --------------------
     accredited investor within the meaning of Regulation D under the Securities
     Act.

          5.8  Legends.  The Note shall bear substantially the following legend:
               -------

          "THIS  NOTE  HAS  NOT  BEEN  REGISTERED  UNDER  THE  SECURITIES ACT OF
          1933,  AS  AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS. THIS NOTE
          MAY  NOT  BE  SOLD,  OFFERED  FOR SALE, PLEDGED OR HYPOTHECATED IN THE
          ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE OR SUCH
          SHARES  UNDER  SAID  ACT  AND  APPLICABLE  STATE SECURITIES LAWS OR AN
          OPINION OF COUNSEL REASONABLY SATISFACTORY TO NEW CENTURY ENERGY CORP.
          THAT  SUCH  REGISTRATION  IS  NOT  REQUIRED."

     6.  Covenants  of  the  Company.  The Company covenants and agrees with the
         ---------------------------
Purchaser  as  follows:

          6.1 Stop-Orders. The Company will advise the Purchaser, promptly after
              -----------
     it  receives notice of issuance by the SEC, any state securities commission
     or  any  other  regulatory  authority  of  any  stop  order or of any order
     preventing  or suspending any offering of any securities of the Company, or
     of  the  suspension of the qualification of the Common Stock of the Company
     for  offering  or  sale  in  any  jurisdiction,  or  the  initiation of any
     proceeding  for  any  such  purpose.

          6.2  Listing.  The  Company will maintain the listing or quotation, as
               -------
     applicable, of its Common Stock on the Principal Market, and will comply in
     all  material  respects  with  the  Company's  reporting,  filing and other
     obligations  under  the  bylaws  or  rules  of  the National Association of
     Securities  Dealers  ("NASD")  and  such  exchanges,  as  applicable.

          6.3  Market  Regulations.  The  Company shall notify the SEC, NASD and
               -------------------
     applicable state authorities, in accordance with their requirements, of the
     transactions  contemplated  by  this  Agreement,  and  shall take all other
     necessary  action  and  proceedings  as  may  be  required and permitted by
     applicable  law,  rule  and regulation, for the legal and valid issuance of
     the  Securities to the Purchaser and promptly provide copies thereof to the
     Purchaser.

          6.4 Reporting Requirements. The Company shall timely file with the SEC
              ----------------------
     all  reports  required to be filed pursuant to the Exchange Act and refrain
     from  terminating  its  status as an issuer required by the Exchange Act to
     file  reports  thereunder  even  if  the  Exchange  Act  or  the  rules  or
     regulations  thereunder  would  permit  such  termination.

          6.5  Use  of  Funds. The Company shall use the proceeds of the sale of
               --------------
     the  Note  as  set  forth  on  Schedule  6.5.

                                      -15-
<PAGE>

          6.6  Access  to  Facilities.  Each  of  the  Company  and  each of its
               ----------------------
     Subsidiaries  will  permit  any representatives designated by the Purchaser
     (or  any  successor  of  the  Purchaser), upon reasonable notice and during
     normal  business  hours,  at  such  person's  expense  and accompanied by a
     representative  of  the  Company  or  any Subsidiary (provided that no such
     prior  notice  shall  be required to be given and no such representative of
     the  Company or any Subsidiary shall be required to accompany the Purchaser
     in the event the Purchaser believes such access is necessary to preserve or
     protect  the  Collateral  (as  defined in the Master Security Agreement) or
     following  the occurrence and during the continuance of an Event of Default
     (as  defined  in  the  Note)),  to:

          (a)  visit  and inspect any of the properties of the Company or any of
     its  Subsidiaries;

          (b)  examine the corporate and financial records of the Company or any
     of  its  Subsidiaries (unless such examination is not permitted by federal,
     state  or  local  law  or  by contract) and make copies thereof or extracts
     therefrom;  and

          (c)  discuss  the affairs, finances and accounts of the Company or any
     of  its  Subsidiaries  with  the  directors,  officers  and  independent
     accountants  of  the  Company  or  any  of  its  Subsidiaries.

Notwithstanding  the  foregoing, neither the Company nor any of its Subsidiaries
will  provide  any  material, non-public information to the Purchaser unless the
Purchaser  signs  a  confidentiality  agreement  and  otherwise  complies  with
Regulation  FD,  under  the  federal  securities  laws.

          6.7  Taxes.  Each  of  the  Company  and each of its Subsidiaries will
               -----
     promptly  pay  and  discharge, or cause to be paid and discharged, when due
     and  payable,  all  taxes,  assessments  and governmental charges or levies
     imposed  upon  the income, profits, property or business of the Company and
     its  Subsidiaries; provided, however, that any such tax, assessment, charge
     or  levy  need  not  be  paid  currently  if (a) the validity thereof shall
     currently  and  diligently  be  contested  in  good  faith  by  appropriate
     proceedings,  (b) such tax, assessment, charge or levy shall have no effect
     on the lien priority of the Purchaser in any property of the Company or any
     of  its  Subsidiaries  and  (c) if the Company and/or such Subsidiary shall
     have  set  aside  on  its  books  adequate reserves with respect thereto in
     accordance  with  GAAP;  and  provided,  further,  that the Company and its
     Subsidiaries  will  pay  all  such  taxes,  assessments,  charges or levies
     forthwith  upon the commencement of proceedings to foreclose any lien which
     may  have  attached  as  security  therefor.

          6.8  Insurance. Each of the Company and its Subsidiaries will keep its
               ---------
     assets which are of an insurable character insured by financially sound and
     reputable  insurers  against  loss  or  damage by fire, explosion and other
     risks  customarily  insured  against  by  companies  in  similar  business
     similarly situated as the Company and its Subsidiaries; and the Company and
     its  Subsidiaries  will  maintain,  and  in the case of casualty insurance,
     within  thirty  (30)  days of the Closing Date, will procure and thereafter
     maintain,  in  each  case,  with  financially sound and reputable insurers,
     insurance  against  other  hazards  and  risks and liability to persons and
     property  to  the  extent  and  in  the manner which the Company reasonably
     believes  is customary for companies in similar business similarly situated
     as  the  Company  and  its  Subsidiaries  and  to  the  extent available on

                                      -16-
<PAGE>

     commercially  reasonable  terms. The Company, and each of its Subsidiaries,
     will  jointly and severally bear the full risk of loss from any loss of any
     nature  whatsoever  with  respect to the assets pledged to the Purchaser as
     security  for  their respective obligations hereunder and under the Related
     Agreements.  At  the  Company's  and  each  of  its Subsidiaries' joint and
     several cost and expense in amounts and with carriers reasonably acceptable
     to  the  Purchaser,  each of the Company and each of its Subsidiaries shall
     (a)  keep  all  its  insurable properties and properties in which it has an
     interest  insured  against  the  hazards of fire, flood, sprinkler leakage,
     those  hazards  covered  by  extended  coverage  insurance  and  such other
     hazards,  and  for  such  amounts, as is customary in the case of companies
     engaged  in  businesses  similar  to  the  Company's  or  the  respective
     Subsidiary's  including  business  interruption  insurance;  (b) maintain a
     bond,  in  such amounts as is customary in the case of companies engaged in
     businesses  similar  to  the  Company's  or  the  respective  Subsidiary's,
     insuring  against  larceny, embezzlement or other criminal misappropriation
     of  insured's  officers and employees who may either singly or jointly with
     others at any time have access to the assets or funds of the Company or any
     of  its  Subsidiaries  either directly or through governmental authority to
     draw upon such funds or to direct generally the disposition of such assets;
     (c)  maintain  public  and  product  liability insurance against claims for
     personal  injury, death or property damage suffered by others; (d) maintain
     all  such  worker's  compensation  or  similar insurance as may be required
     under  the  laws  of  any state or jurisdiction in which the Company or the
     respective Subsidiary is engaged in business; and (e) furnish the Purchaser
     with  (i)  copies  of  all policies and evidence of the maintenance of such
     policies  at  least  thirty  (30)  days  before  any  expiration date, (ii)
     excepting  the Company's workers' compensation policy, endorsements to such
     policies  naming  the Purchaser as "co-insured" or "additional insured" and
     appropriate loss payable endorsements in form and substance satisfactory to
     the  Purchaser, naming the Purchaser as loss payee, and (iii) evidence that
     as  to  the  Purchaser  the  insurance  coverage  shall  not be impaired or
     invalidated  by any act or neglect of the Company or any Subsidiary and the
     insurer  will  provide  the Purchaser with at least thirty (30) days notice
     prior  to  cancellation. The Company and each Subsidiary shall instruct the
     insurance  carriers  that in the event of any loss thereunder, the carriers
     shall  make  payment for such loss to the Company and/or the Subsidiary and
     the  Purchaser jointly. In the event that as of the date of receipt of each
     loss  recovery  upon  any such insurance, the Purchaser has not declared an
     event  of  default  with  respect  to  this Agreement or any of the Related
     Agreements,  then  the Company and/or such Subsidiary shall be permitted to
     direct  the application of such loss recovery proceeds toward investment in
     property,  plant  and equipment that would comprise "Collateral" secured by
     the  Purchaser's  security  interest granted by the Company pursuant to the
     Master  Security  Agreement  and  reaffirmed by the Company pursuant to the
     Reaffirmation  Agreement,  any Related Agreement and/or such other security
     agreement  as shall be required by the Purchaser, with any surplus funds to
     be  applied  toward  payment  of  the  obligations  of  the  Company to the
     Purchaser.  In  the event that the Purchaser has properly declared an event
     of default with respect to this Agreement or any of the Related Agreements,
     then  all loss recoveries received by the Purchaser upon any such insurance
     thereafter  may  be applied to the obligations of the Company hereunder and
     under the Related Agreements, in such order as the Purchaser may determine.
     Any  surplus  (following  satisfaction  of  all  Company obligations to the
     Purchaser)  shall be paid by the Purchaser to the Company or applied as may
     be  otherwise  required by law. Any deficiency thereon shall be paid by the
     Company  or  the  Subsidiary,  as  applicable, to the Purchaser, on demand.

                                      -17-
<PAGE>

          6.9  Intellectual  Property.  Each  of  the  Company  and  each of its
               ----------------------
     Subsidiaries  shall maintain in full force and effect its existence, rights
     and  franchises  and  all  licenses  and  other  rights to use Intellectual
     Property  owned or possessed by it and reasonably deemed to be necessary to
     the  conduct  of  its  business.

          6.10 Properties. Each of the Company and each of its Subsidiaries will
               ----------
     keep its properties in good repair, working order and condition, reasonable
     wear  and  tear excepted, and from time to time make all needful and proper
     repairs,  renewals,  replacements,  additions and improvements thereto; and
     each  of  the Company and each of its Subsidiaries will at all times comply
     with  each provision of all leases to which it is a party or under which it
     occupies  property  if  the  breach  of  such  provision  could,  either
     individually or in the aggregate, reasonably be expected to have a Material
     Adverse  Effect.

          6.11 Confidentiality. The Company will not, and will not permit any of
               ---------------
     its  Subsidiaries  to,  disclose,  and  will  not  include  in  any  public
     announcement,  the name of the Purchaser, unless expressly agreed to by the
     Purchaser  or  unless  and  until  such  disclosure  is  required by law or
     applicable  regulation,  and  then  only to the extent of such requirement.
     Notwithstanding  the  foregoing,  the  Company may disclose the Purchaser's
     identity  and  the  terms  of this Agreement to its current and prospective
     debt  and  equity  financing  sources.

          6.12  Required  Approvals.  Except  as set forth on Schedule 6.12, the
                -------------------
     Company, without the prior written consent of the Purchaser, shall not, and
     shall  not  permit  any  of  its  Subsidiaries  to:

          (a)  (i)  directly  or  indirectly declare or pay any dividends, other
     than dividends paid to the parent of the Company, the Company or any of its
     wholly-owned  Subsidiaries,  (ii)  issue  any  preferred  stock  that  is
     mandatorily  redeemable  prior to the one year anniversary of Maturity Date
     (as  defined  in  the  Note)  or (iii) redeem any of its preferred stock or
     other  equity  interests;

          (b)  liquidate, dissolve or effect a material reorganization (it being
     understood  that  in  no event shall the Company or any of its Subsidiaries
     dissolve,  liquidate  or  merge with any other person or entity (unless, in
     the  case  of  such  a  merger,  the  Company or, in the case of merger not
     involving  the  Company,  such  Subsidiary, as applicable, is the surviving
     entity);

          (c)  become  subject  to  (including,  without  limitation,  by way of
     amendment  to  or modification of) any agreement or instrument which by its
     terms  would (under any circumstances) restrict the Company's or any of its
     Subsidiaries'  right  to  perform  the  provisions  of  this Agreement, any
     Related  Agreement or any of the agreements contemplated hereby or thereby;

          (d)  materially  alter  or  change  the  scope  of the business of the
     Company  and  its  Subsidiaries  taken  as  a  whole;

          (e)  (i)  create,  incur,  assume  or suffer to exist any indebtedness
     (exclusive  of  trade  debt  and  debt  incurred to finance the purchase of
     equipment  (not  in excess of five percent (5%) of the fair market value of
     the  Company's  and its Subsidiaries' assets)) whether secured or unsecured
     other  than  (x)  the  Company's  obligations  owed  to  the Purchaser, (y)

                                      -18-
<PAGE>

     indebtedness  set forth on Schedule 6.12(e) attached hereto and made a part
     hereof  and  any  refinancings  or  replacements  thereof  on terms no less
     favorable  to  the  Purchaser  than  the  indebtedness  being refinanced or
     replaced, and (z) any indebtedness incurred in connection with the purchase
     of assets (other than equipment) in the ordinary course of business, or any
     refinancings  or  replacements  thereof  on  terms no less favorable to the
     Purchaser  than  the  indebtedness being refinanced or replaced, so long as
     any lien relating thereto shall only encumber the fixed assets so purchased
     and  no other assets of the Company or any of its Subsidiaries; (ii) cancel
     any  indebtedness  owing to it in excess of $50,000 in the aggregate during
     any  12  month period; (iii) assume, guarantee, endorse or otherwise become
     directly  or  contingently liable in connection with any obligations of any
     other person or entity, except the endorsement of negotiable instruments by
     the  Company or any Subsidiary thereof for deposit or collection or similar
     transactions  in  the  ordinary  course  of  business  or  guarantees  of
     indebtedness  otherwise permitted to be outstanding pursuant to this clause
     (e);

          (f)  create or acquire any Subsidiary after the date hereof unless (i)
     such  Subsidiary  is a wholly-owned Subsidiary of the Company and (ii) such
     Subsidiary  becomes  a  party  to  the Master Security Agreement, the Stock
     Pledge  Agreement  and  the  Subsidiary  Guaranty  (either  by  executing a
     counterpart  thereof  or  an  assumption  or  joinder  agreement in respect
     thereof)  and,  to  the  extent  required  by the Purchaser, satisfies each
     condition  of  this  Agreement  and  the  Related  Agreements  as  if  such
     Subsidiary  were  a  Subsidiary  on  the  Closing  Date;  and

          (g)  transfer  or assign in any manner whatsoever any of its assets to
     any  person  or entity, including without limitation any subsidiary created
     after  the  date  hereof.

          6.13  Opinion.  On  the  Closing Date, the Company will deliver to the
                -------
     Purchaser  an  opinion  acceptable  to  the  Purchaser  from  the Company's
     external  legal  counsel  in  the  form  of  Exhibit  B  hereto.

          6.14  Margin Stock. The Company will not permit any of the proceeds of
                ------------
     the Note to be used directly or indirectly to "purchase" or "carry" "margin
     stock"  or  to repay indebtedness incurred to "purchase" or "carry" "margin
     stock"  within  the  respective  meanings of each of the quoted terms under
     Regulation U of the Board of Governors of the Federal Reserve System as now
     and  from  time  to  time  hereafter  in  effect.

          6.15  Financing Right of First Refusal. The Company will not, and will
                --------------------------------
     not  permit  its  Subsidiaries  to,  agree,  directly or indirectly, to any
     restriction  with  any  person  or  entity  which limits the ability of the
     Purchaser  to consummate an Additional Financing with the Company or any of
     its  Subsidiaries.

     7.  Covenants of the Purchaser. The Purchaser covenants and agrees with the
         --------------------------
Company  as  follows:

          7.1  Confidentiality.  The  Purchaser  will not disclose, and will not
               ---------------
     include  in  any  public  announcement,  the  name  of  the Company, unless
     expressly  agreed  to by the Company or unless and until such disclosure is
     required  by  law  or applicable regulation, and then only to the extent of
     such  requirement.

                                      -19-
<PAGE>

          7.2 Non-Public Information. The Purchaser will not affect any sales in
              ----------------------
     the  shares  of the Company's Common Stock while in possession of material,
     non-public  information  regarding  the Company if such sales would violate
     applicable  securities  law.

          7.3  Limitation  on  Acquisition  of  Common  Stock  of  the  Company.
               ----------------------------------------------------------------
     Notwithstanding  anything  to the contrary contained in this Agreement, any
     Related  Agreement or any document, instrument or agreement entered into in
     connection  with  any  other  transactions  between  the  Purchaser and the
     Company,  the  Purchaser  may  not acquire stock in the Company (including,
     without  limitation,  pursuant  to a contract to purchase, by exercising an
     option  or  warrant,  by  converting  any  other security or instrument, by
     acquiring  or  exercising  any  other  right to acquire, shares of stock or
     other  security  convertible  into  shares  of  stock  in  the  Company, or
     otherwise,  and  such  contracts,  options,  warrants,  conversion or other
     rights  shall  not  be enforceable or exercisable) to the extent such stock
     acquisition  would  cause  any  interest  (including  any  original  issue
     discount)  payable  by  the  Company  to  the  Purchaser  not to qualify as
     "portfolio  interest"  within the meaning of Section 881(c)(2) of the Code,
     by  reason  of  Section  881(c)(3)  of  the  Code,  taking into account the
     constructive  ownership  rules  under Section 871(h)(3)(C) of the Code (the
     "Stock  Acquisition  Limitation").

     8.  Covenants  of  the Company and the Purchaser Regarding Indemnification.
         ----------------------------------------------------------------------

          8.1  Company  Indemnification.  The  Company agrees to indemnify, hold
               ------------------------
     harmless,  reimburse  and  defend  the  Purchaser,  each of the Purchaser's
     officers,  directors,  agents,  affiliates,  control persons, and principal
     shareholders,  against  any  and  all claims, costs, expenses, liabilities,
     obligations,  losses  or  damages  (including reasonable legal fees) of any
     nature,  incurred  by or imposed upon the Purchaser which result, arise out
     of  or  are  based upon: (a) any misrepresentation by the Company or any of
     its  Subsidiaries  or  breach  of any warranty by the Company or any of its
     Subsidiaries  in  this  Agreement,  any  other  Related Agreement or in any
     exhibits or schedules attached hereto or thereto; (b) any breach or default
     in performance by the Company or any of its Subsidiaries of any covenant or
     undertaking  to  be  performed  by  the  Company or any of its Subsidiaries
     hereunder, under any other Related Agreement or any other agreement entered
     into  by  the  Company  and/or  any  of  its Subsidiaries and the Purchaser
     relating  hereto or thereto or (c) (i) the violation of any local, state or
     federal  law,  rule  or  regulation pertaining to environmental regulation,
     contamination  or  cleanup  (collectively, "Environmental Laws"), including
     without  limitation, the Comprehensive Environmental Response, Compensation
     and  Liability Act of 1980 (42 U.S.C. Sec.9601 et seq. and 40 CFR Sec.302.1
     et  seq.),  the  Resource  Conservation and Recovery Act of 1976 (42 U.S.C.
     Sec.6901  et  seq.),  the  Federal  Water  Pollution Control Act (33 U.S.C.
     Sec.1251  et  seq.,  and 40 CFR Sec.116.1 et seq.), the Hazardous Materials
     Transportation  Act  (49  U.S.C.  Sec.1801  et  seq.)  and  the regulations
     promulgated  pursuant  to  said  laws,  all  as  amended and relating to or
     affecting  the  Company  and/or any Subsidiary and the Company's and/or any
     Subsidiary's  properties, whether or not caused by or within the control of
     the Purchaser and/or (ii) the presence, release or threat of release of any
     hazardous,  toxic  or  harmful substances, wastes, materials, pollutants or
     contaminants  (including,  without  limitation,  asbestos,  polychlorinated
     biphenyls, petroleum products, flammable explosives, radioactive materials,
     infectious  substances  or  raw  materials  which  include  hazardous
     constituents)  or  any other substances or raw materials which are included

                                      -20-
<PAGE>

     under  or regulated by Environmental Laws on, in, under or affecting all or
     any  portion  of  any  property of the Company and/or any Subsidiary or any
     surrounding  areas,  regardless  of  whether or not caused by or within the
     control  of  the  Purchaser.

          8.2  Purchaser's  Indemnification.  The Purchaser agrees to indemnify,
               ----------------------------
     hold  harmless,  reimburse and defend the Company and each of the Company's
     officers,  directors,  agents,  affiliates,  control  persons and principal
     shareholders,  at  all  times  against  any  claims,  costs,  expenses,
     liabilities,  obligations,  losses  or  damages (including reasonable legal
     fees)  of any nature, incurred by or imposed upon the Company which result,
     arise  out of or are based upon: (a) any misrepresentation by the Purchaser
     or  breach  of  any  warranty  by the Purchaser in this Agreement or in any
     exhibits  or schedules attached hereto or any Related Agreement; or (b) any
     breach  or  default  in  performance  by  the  Purchaser of any covenant or
     undertaking  to  be  performed  by  the  Purchaser  hereunder, or any other
     agreement  entered  into  by the Company and the Purchaser relating hereto.

          8.3  Offering  Restrictions. Except as previously disclosed in the SEC
               ----------------------
     Reports  or  in the Exchange Act Filings, or stock or stock options granted
     to  employees  or  directors  of  the Company (these exceptions hereinafter
     referred  to  as  the "Excepted Issuances"), neither the Company nor any of
     its  Subsidiaries  will,  prior to the full repayment of the Note (together
     with  all  accrued and unpaid interest and fees related thereto), (a) enter
     into any equity line of credit agreement or similar agreement or (b) issue,
     or  enter  into  any  agreement  to  issue,  any  securities  with  a
     variable/floating  conversion  and/or pricing feature which are or could be
     (by  conversion or registration) free-trading securities (i.e. common stock
     subject  to  a  registration  statement).

     9.  Miscellaneous.
         -------------

          9.1  Governing  Law,  Jurisdiction  and  Waiver  of  Jury  Trial.
               -----------------------------------------------------------

          (a)  THIS AGREEMENT AND THE OTHER RELATED AGREEMENTS SHALL BE GOVERNED
     BY  AND  CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
     NEW  YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT
     REGARD  TO  PRINCIPLES  OF  CONFLICTS  OF  LAWS.

          (b)  THE  COMPANY HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL
     COURTS  LOCATED  IN  THE  COUNTY  OF NEW YORK, STATE OF NEW YORK SHALL HAVE
     EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN
     THE  COMPANY,  ON  THE  ONE  HAND,  AND  THE  PURCHASER, ON THE OTHER HAND,
     PERTAINING  TO  THIS  AGREEMENT  OR ANY OF THE RELATED AGREEMENTS OR TO ANY
     MATTER  ARISING  OUT  OF  OR  RELATED TO THIS AGREEMENT OR ANY OF THE OTHER
     RELATED  AGREEMENTS;  PROVIDED,  THAT  THE  PURCHASER  AND  THE  COMPANY
                           --------
     ACKNOWLEDGE  THAT  ANY  APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A
     COURT  LOCATED  OUTSIDE  OF  THE COUNTY OF NEW YORK, STATE OF NEW YORK; AND
     FURTHER PROVIDED, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE
     ------- --------
     TO  PRECLUDE  THE PURCHASER FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION
     IN  ANY  OTHER  JURISDICTION  TO COLLECT THE OBLIGATIONS, TO REALIZE ON THE

                                      -21-
<PAGE>

     COLLATERAL  (AS  DEFINED  IN  THE  MASTER  SECURITY AGREEMENT) OR ANY OTHER
     SECURITY FOR THE OBLIGATIONS (AS DEFINED IN THE MASTER SECURITY AGREEMENT),
     OR  TO  ENFORCE  A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE PURCHASER.
     THE  COMPANY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION
     IN  ANY  ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND THE COMPANY HEREBY
     WAIVES  ANY  OBJECTION  WHICH  IT  MAY  HAVE  BASED  UPON  LACK OF PERSONAL
     JURISDICTION,  IMPROPER  VENUE  OR FORUM NON CONVENIENS. THE COMPANY HEREBY
                                        --------------------
     WAIVES  PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED
     IN  ANY  SUCH  ACTION  OR  SUIT  AND  AGREES  THAT SERVICE OF SUCH SUMMONS,
     COMPLAINT  AND  OTHER  PROCESS  MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
     ADDRESSED  TO THE COMPANY AT THE ADDRESS SET FORTH IN SECTION 11.9 AND THAT
     SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF THE COMPANY'S
     ACTUAL  RECEIPT  THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS,
     PROPER  POSTAGE  PREPAID.

          (c)  THE  PARTIES  DESIRE  THAT  THEIR DISPUTES BE RESOLVED BY A JUDGE
     APPLYING  SUCH  APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION
     OF  THE  BENEFITS  OF  THE  JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES
     HERETO WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING
     BROUGHT  TO  RESOLVE  ANY  DISPUTE,  WHETHER  ARISING IN CONTRACT, TORT, OR
     OTHERWISE  BETWEEN  THE  PURCHASER  AND/OR  THE  COMPANY  ARISING  OUT  OF,
     CONNECTED  WITH,  RELATED  OR  INCIDENTAL  TO  THE RELATIONSHIP ESTABLISHED
     BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT, ANY OTHER RELATED AGREEMENT
     OR  THE  TRANSACTIONS  RELATED  HERETO  OR  THERETO.

          9.2  Severability.  Wherever possible each provision of this Agreement
               ------------
     and  the  Related  Agreements  shall be interpreted in such manner as to be
     effective  and  valid  under  applicable  law, but if any provision of this
     Agreement  or  any  Related  Agreement shall be prohibited by or invalid or
     illegal  under  applicable  law  such provision shall be ineffective to the
     extent  of  such  prohibition  or  invalidity  or  illegality,  without
     invalidating  the  remainder  of such provision or the remaining provisions
     thereof  which  shall  not  in  any  way  be  affected or impaired thereby.

          9.3  Survival.  The  representations,  warranties,  covenants  and
               --------
     agreements  made  herein  shall  survive  any  investigation  made  by  the
     Purchaser  and  the  closing of the transactions contemplated hereby to the
     extent  provided therein. All statements as to factual matters contained in
     any  certificate  or  other  instrument  delivered  by  or on behalf of the
     Company  pursuant  hereto  in connection with the transactions contemplated
     hereby  shall be deemed to be representations and warranties by the Company
     hereunder  solely  as  of  the  date of such certificate or instrument. All
     indemnities  set  forth  herein  shall  survive the execution, delivery and
     termination  of this Agreement and the Note and the making and repayment of
     the  obligations  arising  hereunder,  under  the  Note and under the other
     Related  Agreements.

          9.4  Successors.  Except  as  otherwise expressly provided herein, the
               ----------
     provisions  hereof  shall inure to the benefit of, and be binding upon, the
     successors,  heirs,  executors and administrators of the parties hereto and

                                      -22-
<PAGE>

     shall  inure  to the benefit of and be enforceable by each person or entity
     which  shall  be  a holder of the Note from time to time. The Purchaser may
     not  assign  its  rights  hereunder  or  under  any  Related Agreement to a
     competitor  of  the  Company  unless an Event of Default (as defined in the
     Note)  has  occurred  and  is  continuing.

          9.5  Entire  Agreement;  Maximum Interest. This Agreement, the Related
               ------------------------------------
     Agreements,  the  exhibits  and  schedules hereto and thereto and the other
     documents  delivered  pursuant  hereto  constitute  the  full  and  entire
     understanding and agreement between the parties with regard to the subjects
     hereof  and no party shall be liable or bound to any other in any manner by
     any  representations,  warranties,  covenants  and  agreements  except  as
     specifically  set  forth  herein  and  therein.  Nothing  contained in this
     Agreement,  any  Related Agreement or in any document referred to herein or
     delivered  in  connection  herewith shall be deemed to establish or require
     the payment of a rate of interest or other charges in excess of the maximum
     rate permitted by applicable law. In the event that the rate of interest or
     dividends required to be paid or other charges hereunder exceed the maximum
     rate permitted by such law, any payments in excess of such maximum shall be
     credited  against  amounts  owed  by  the Company to the Purchaser and thus
     refunded  to  the  Company.

          9.6  Amendment  and  Waiver.
               ----------------------

          (a)  This  Agreement  may be amended or modified only upon the written
     consent  of  the  Company  and  the  Purchaser.

          (b)  The  obligations  of  the Company and the rights of the Purchaser
     under  this  Agreement  may  be waived only with the written consent of the
     Purchaser.

          (c)  The  obligations  of  the Purchaser and the rights of the Company
     under  this  Agreement  may  be waived only with the written consent of the
     Company.

          9.7  Delays  or  Omissions.  It is agreed that no delay or omission to
               ---------------------
     exercise any right, power or remedy accruing to any party, upon any breach,
     default  or  noncompliance  by  another  party  under this Agreement or the
     Related Agreements, shall impair any such right, power or remedy, nor shall
     it  be  construed  to  be  a  waiver  of  any  such  breach,  default  or
     noncompliance, or any acquiescence therein, or of or in any similar breach,
     default  or  noncompliance thereafter occurring. All remedies, either under
     this  Agreement  or the Related Agreements, by law or otherwise afforded to
     any  party,  shall  be  cumulative  and  not  alternative.

          9.8  Notices.  All notices required or permitted hereunder shall be in
               -------
     writing  and  shall  be  deemed  effectively  given:

          (a)  upon  personal  delivery  to  the  party  to  be  notified;

          (b)  when  sent  by confirmed facsimile if sent during normal business
     hours  of  the  recipient,  if  not,  then  on  the  next  business  day;

          (c)  three  (3)  business days after having been sent by registered or
     certified  mail,  return  receipt  requested,  postage  prepaid;  or

                                      -23-
<PAGE>

          (d)  one  (1) day after deposit with a nationally recognized overnight
     courier,  specifying  next  day  delivery,  with  written  verification  of
     receipt.

     All  communications  shall  be  sent  as  follows:
            If  to  the  Company,       New  Century  Energy  Corp.
            to:                         5851  San  Felipe,  Suite  775
                                        Houston,  TX  77057
                                        Attention:  Chief  Financial  Officer
                                        Facsimile:  713-255-4358

                                        with  a  copy  to:

                                        David  M.  Loev,  Esq.
                                        6300  West  Loop  South
                                        Suite  280
                                        Bellaire,  Texas  77401
                                        Facsimile:  713-524-4122

          If  to  the  Purchaser,       Laurus  Master  Fund,  Ltd.
          to:                           c/o  M&C  Corporate  Services  Limited
                                        P.O.  Box  309  GT
                                        Ugland  House
                                        George  Town
                                        South  Church  Street
                                        Grand  Cayman,  Cayman  Islands
                                        Facsimile:  345-949-8080

          with  a  copy  to:            Portfolio  Services
                                        Laurus  Capital  Management,  LLC
                                        825  Third  Avenue,  17th  Floor
                                        New  York,  NY  10022
                                        Facsimile:  212-541-4410

          with  a  copy  to:            t  LLP
                                        333  Clay  Street
                                        Suite  3300
                                        Houston,  Texas  77002
                                        Attention:  Barry  Davis,  Esq.
                                        Facsimile:  832-397-8104

or  at  such  other  address  as  the  Company or the Purchaser may designate by
written  notice  to  the  other  parties  hereto  given  in accordance herewith.

          9.9  Attorneys'  Fees.  In  the  event  that  any  suit  or  action is
               ----------------
     instituted  to  Thompson  & Knighenforce any provision in this Agreement or
     any  Related  Agreement,  the  prevailing  party  in  such dispute shall be
     entitled  to  recover from the losing party all fees, costs and expenses of
     enforcing  any right of such prevailing party under or with respect to this

                                      -24-
<PAGE>

     Agreement  and/or  such  Related  Agreement, including, without limitation,
     such reasonable fees and expenses of attorneys and accountants, which shall
     include,  without  limitation,  all  fees,  costs  and expenses of appeals.

          9.10  Titles and Subtitles. The titles of the sections and subsections
                --------------------
     of  this  Agreement are for convenience of reference only and are not to be
     considered  in  construing  this  Agreement.

          9.11  Facsimile  Signatures;  Counterparts.  This  Agreement  may  be
                ------------------------------------
     executed by facsimile signatures and in any number of counterparts, each of
     which  shall be an original, but all of which together shall constitute one
     agreement.

          9.12 Broker's Fees. Except as set forth on Schedule 11.12 hereof, each
               -------------
     party  hereto  represents  and  warrants  that no agent, broker, investment
     banker,  person  or firm acting on behalf of or under the authority of such
     party  hereto is or will be entitled to any broker's or finder's fee or any
     other commission directly or indirectly in connection with the transactions
     contemplated  herein.  Each  party  hereto further agrees to indemnify each
     other party for any claims, losses or expenses incurred by such other party
     as  a  result  of  the  representation  in this Section 11.13 being untrue.

          9.13  Construction.  Each  party  acknowledges  that its legal counsel
                ------------
     participated  in  the  preparation  of  this  Agreement  and  the  Related
     Agreements  and,  therefore,  stipulates that the rule of construction that
     ambiguities  are  to  be  resolved  against the drafting party shall not be
     applied in the interpretation of this Agreement or any Related Agreement to
     favor  any  party  against  the  other.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

                                      -25-
<PAGE>

     IN  WITNESS  WHEREOF,  the  parties  hereto  have  executed this Securities
Purchase  Agreement  as  of  the  date  set forth in the first paragraph hereof.

COMPANY:                             PURCHASER:
NEW  CENTURY  ENERGY  CORP.          LAURUS  MASTER  FUND,  LTD.

By: /s/ Edward R. DeStefano         By: /s/ Eugene Grin
   -----------------------              ------------------------
Name: Edward R. DeStefano           Name: Eugene Grin
     ---------------------                ----------------------
Title:  President                   Title: Director
      --------------------                 ---------------------

                                      -26-
<PAGE>

                                    EXHIBIT A

                                FORM OF TERM NOTE

<PAGE>

                                    EXHIBIT B

                                 FORM OF OPINION

<PAGE>

                                    EXHIBIT C

                            FORM OF ESCROW AGREEMENT

<PAGE>

                                  SCHEDULE 4.2
                                  ------------

CENTURY  RESOURCES, INC., a Delaware corporation, is wholly owned by New Century
------------------------
Energy  Corp.

GULF  COAST  OIL  CORPORATION,  a  Delaware  corporation, is wholly owned by New
-----------------------------
Century  Energy  Corp.

<PAGE>
                                  SCHEDULE 4.3
                                  ------------

                                      None.

<PAGE>
                                  SCHEDULE 4.6
                                  ------------

                                      None.

<PAGE>
                                  SCHEDULE 4.7
                                  ------------

     Edward  R.  DeStefano, the Chief Executive Officer and sole Director of New
Century  Energy  Corp.  (the "Parent" of the Company), owns 37,500,000 shares of
the  Parent's common stock, making Mr. DeStefano the majority shareholder of the
Parent.  Additionally,  Mr.  DeStefano  is  employed by the Parent under a three
year  Employment  Agreement,  as  amended,  which  ends  August  31,  2008.

<PAGE>

                                  SCHEDULE 4.9
                                  ------------

                                      None.

<PAGE>

                                  SCHEDULE 4.12
                                  -------------

                                      None.

<PAGE>

                                  SCHEDULE 4.13
                                  -------------

                                      None.

<PAGE>

                                  SCHEDULE 4.14
                                  -------------

                                      None.

<PAGE>

                                  SCHEDULE 4.15
                                  -------------

                                      None.

<PAGE>

                                  SCHEDULE 4.17
                                  -------------

                                      None.

<PAGE>

                                  SCHEDULE 6.9
                                  ------------

                                      None.

<PAGE>

                                  SCHEDULE 9.12
                                  -------------

                                      None.

<PAGE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00115-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00115-of-00352.parquet"}]]