Document:

EXHIBIT 10.1

                               PURCHASE AGREEMENT

         THIS  PURCHASE  AGREEMENT  ("Agreement")  is made as of the 11th day of
April,  2006,  by and among  PharmaFrontiers  Corp.,  a Texas  corporation  (the
"Company"),  and the Investors set forth on the signature  pages affixed  hereto
(each an "Investor" and collectively the "Investors").

                                    RECITALS

                  A. The Company and the Investors are executing and  delivering
this  Agreement in reliance  upon the  exemption  from  securities  registration
afforded by the provisions of Regulation D  ("Regulation  D"), as promulgated by
the U.S. Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended; and

                  B. The Investors  wish to purchase  from the Company,  and the
Company wishes to sell and issue to the Investors, upon the terms and conditions
stated in this  Agreement,  (i) an  aggregate  of up to  46,000,000  shares (the
"Shares") of the  Company's  Common Stock,  par value $0.05 per share  (together
with any  securities  into which such  shares may be  reclassified  the  "Common
Stock"),  at purchase price of $0.50 per share, and (ii) warrants to purchase an
aggregate of up to 23,000,000  shares of Common Stock (subject to adjustment) at
an  exercise  price of $0.65  per  share  (subject  to  adjustment)  in the form
attached hereto as EXHIBIT A (the "Warrants"); and

                  C. Contemporaneous  with the execution of this Agreement,  the
parties hereto will execute and deliver a Registration Rights Agreement,  in the
form  attached  hereto  as  EXHIBIT  B (the  "Registration  Rights  Agreement"),
pursuant to which the Company will agree to provide certain  registration rights
under the  Securities  Act of 1933,  as amended,  and the rules and  regulations
promulgated thereunder, and applicable state securities laws.

                  In  consideration  of the mutual  promises made herein and for
other good and valuable consideration,  the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

         1. DEFINITIONS.  In addition to those terms defined above and elsewhere
in this Agreement, for the purposes of this Agreement, the following terms shall
have the meanings set forth below:

                  "10-KSB" has the meaning set forth in Section 4.6

                  "AFFILIATE"  means,  with  respect  to any  Person,  any other
Person which directly or indirectly through one or more intermediaries Controls,
is controlled by, or is under common control with, such Person.

                  "BUSINESS  DAY" means a day,  other than a Saturday or Sunday,
on which  banks  in New York  City  are  open  for the  general  transaction  of
business.
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                  "CLOSING" has the meaning set forth in Section 3.

                  "CLOSING DATE" has the meaning set forth in Section 3.

                  "COMPANY'S  KNOWLEDGE"  means  the  actual  knowledge  of  the
executive  officers  (as defined in Rule 405 under the 1933 Act) of the Company,
after due inquiry.

                  "CONFIDENTIAL  INFORMATION" means trade secrets,  confidential
information  and  know-how  (including  but  not  limited  to  ideas,  formulae,
compositions,  processes,  procedures and  techniques,  research and development
information,   computer  program  code,  performance   specifications,   support
documentation, drawings, specifications,  designs, business and marketing plans,
and customer and supplier lists and related information).

                  "CONTROL" (including the terms "controlling",  "controlled by"
or "under common control with") means the possession, direct or indirect, of the
power to direct or cause the  direction  of the  management  and  policies  of a
Person,  whether  through the  ownership  of voting  securities,  by contract or
otherwise.

                  "EFFECTIVE   DATE"   means  the  date  on  which  the  initial
Registration Statement is declared effective by the SEC.

                  "EFFECTIVENESS  DEADLINE"  means the date on which the initial
Registration Statement is required to be declared effective by the SEC under the
terms of the Registration Rights Agreement.

                  "ENVIRONMENTAL  LAWS" has the  meaning  set  forth in  Section
4.16.

                  "ESCROW  AGENT"  means  Continental  Stock  Transfer  &  Trust
Company, its successors and assigns.

                  "ESCROW  AGREEMENT"  means the Escrow  Agreement,  as amended,
entered into among the Company,  the Escrow Agent and MDB Capital Group,  LLC, a
true and complete copy of which is attached hereto as EXHIBIT C.

                  "EVALUATION DATE" has the meaning set forth in Section 4.26.

                  "GAAP" has the meaning set forth in Section 4.18.

                  "INFRINGE" has the meaning set forth in Section 4.15(d).

                  "INTELLECTUAL  PROPERTY"  means  all  of  the  following:  (i)
patents, patent applications,  patent disclosures and inventions (whether or not
patentable  and whether or not reduced to practice);  (ii)  trademarks,  service
marks, trade dress, trade names,  corporate names,  logos,  slogans and Internet
domain names,  together with all goodwill associated with each of the foregoing;
(iii) copyrights and copyrightable  works; (iv) registrations,  applications and
renewals  for  any of the  foregoing;  and  (v)  proprietary  computer  software
(including but not limited to data, data bases and documentation).

                                      -2-
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                  "LICENSE  AGREEMENTS"  has the  meaning  set forth in  Section
4.15(d).

                  "MATERIAL  ADVERSE EFFECT" means a material  adverse effect on
(i) the assets,  liabilities,  results of  operations,  condition  (financial or
otherwise),  business, or prospects of the Company and its Subsidiaries taken as
a whole, or (ii) the ability of the Company to perform its obligations under the
Transaction Documents.

                  "PERSON"  means  an  individual,   corporation,   partnership,
limited  liability  company,  trust,  business trust,  association,  joint stock
company,  joint  venture,  sole  proprietorship,   unincorporated  organization,
governmental  authority  or any other  form of entity  not  specifically  listed
herein.

                  "PRIVATE  PLACEMENT  MEMORANDUM"  means the Company's  Private
Placement Memorandum,  dated January 23, 2006, as supplemented by the supplement
thereto, dated March 20, 2006.

                  "PROHIBITED  TRANSACTION" has the meaning set forth in Section
5.11.

                  "PROPOSAL" has the meaning set forth in Section 7.9.

                  "PROXY STATEMENT" has the meaning set forth in Section 7.9.

                  "PURCHASE  PRICE"  means up to  Twenty-Three  Million  Dollars
($23,000,000).

                  "REGISTRATION  RIGHTS  AGREEMENT" has the meaning set forth in
the recitals.

                  "REGISTRATION  STATEMENT"  has the  meaning  set  forth in the
Registration Rights Agreement.

                  "REVERSE  SPLIT"  means a  one-for-ten  reverse  split  of the
Common  Stock  that does not  reduce  the  number of shares of Common  Stock the
Company is authorized to issue.

                  "SEC FILINGS" has the meaning set forth in Section 4.6.

                  "SECURITIES"  means the Shares,  the  Warrants and the Warrant
Shares.

                  "SHARES"  means the shares of Common Stock being  purchased by
the Investors hereunder.

                  "STOCKHOLDERS  MEETING"  has the  meaning set forth in Section
7.9.

                  "STOCKHOLDERS  MEETING  DEADLINE" has the meaning set forth in
Section 7.9.

                                      -3-
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                  "SUBSIDIARY" of any Person means another Person,  an amount of
the voting securities, other voting ownership or voting partnership interests of
which is  sufficient  to elect at least a majority of its Board of  Directors or
other governing body (or, if there are no such voting interests,  50% or more of
the equity  interests of which) is owned  directly or  indirectly  by such first
Person.

                  "TRADING  AFFILIATES"  has the  meaning  set forth in  Section
5.11.

                  "TRANSACTION  DOCUMENTS"  means this Agreement,  the Warrants,
the Escrow Agreement and the Registration Rights Agreement.

                  "TRANSFER AGENT" has the meaning set forth in Section 7.8.

                  "WARRANTS" has the meaning set forth in the recitals.

                  "WARRANT  SHARES"  means the shares of Common  Stock  issuable
upon the exercise of the Warrants.

                  "1933 ACT" means the  Securities  Act of 1933, as amended,  or
any successor statute, and the rules and regulations promulgated thereunder.

                  "1934  ACT"  means the  Securities  Exchange  Act of 1934,  as
amended,  or any successor  statute,  and the rules and regulations  promulgated
thereunder.

         2.  PURCHASE  AND ISSUANCE OF THE SHARES AND  WARRANTS.  Subject to the
terms  and  conditions  of this  Agreement,  on the  Closing  Date,  each of the
Investors shall severally, and not jointly, purchase, and the Company shall sell
and issue to the Investors,  the Shares and Warrants in the  respective  amounts
set forth opposite the Investors'  names on the signature  pages attached hereto
in exchange for the Purchase Price.

         3. CLOSING.  Unless an Investor  shall have made  alternative  delivery
arrangements with the Company,  within one Business Day of the date of executing
this  Agreement,  the  Company  shall  cause the  delivery  of the  certificates
representing the Shares and the Warrants, registered in the names and amounts of
the Investors as set forth on the signature pages attached hereto to Continental
Stock  Transfer & Trust  Company (the "Escrow  Agent") and each of the Investors
shall wire to the  Escrow  Agent in same day funds an amount  representing  such
Investor's pro rata portion of the Purchase Price, as set forth on the signature
page hereto.  The Closing shall occur upon  confirmation that (i) the conditions
to Closing in Section 6 hereof  have been  satisfied  or duly  waived,  (ii) the
Escrow Agent has received the portion of the Purchase Price to be held by it and
the certificates representing the Shares and Warrants to be held by it and (iii)
any  alternative   delivery   requirements   have  been  satisfied.   Upon  such
confirmation,  (x)  pursuant  to the Escrow  Agreement,  the Escrow  Agent shall
deliver (A) the certificates  representing the Shares and Warrants held by it to
the  respective  Investors and (B) the Purchase Price to the Company and (y) the
remaining  portion of the  Purchase  Price  shall be paid to the Company and any
remaining   Shares  and  Warrants   shall  be  released  to  the  Investors  not
participating  in  the  escrow  (the   consummation  of  such   transactions  is
hereinafter referred to as the "Closing" and the date on which the Closing takes
place is  hereinafter  referred to as the  "Closing  Date").  The Closing of the
purchase and sale of the Shares and Warrants  shall take place at the offices of
Lowenstein  Sandler PC, 1251 Avenue of the Americas,  18th Floor,  New York, New
York 10020,  or at such other location and on such other date as the Company and
the Investors shall mutually agree.

                                      -4-
<PAGE>

         4.  REPRESENTATIONS  AND WARRANTIES OF THE COMPANY.  The Company hereby
represents  and  warrants  to the  Investors  that,  except  as set forth in the
schedules delivered herewith (collectively, the "Disclosure Schedules"):

                   4. 1 ORGANIZATION,  GOOD STANDING AND QUALIFICATION.  Each of
the  Company and its  Subsidiaries  is a  corporation  duly  organized,  validly
existing  and in  good  standing  under  the  laws  of the  jurisdiction  of its
incorporation  and has all requisite  corporate  power and authority to carry on
its business as now conducted and to own its properties. Each of the Company and
its  Subsidiaries is duly qualified to do business as a foreign  corporation and
is in good standing in each jurisdiction in which the conduct of its business or
its  ownership  or  leasing of  property  makes  such  qualification  or leasing
necessary  unless the failure to so qualify has not had and could not reasonably
be expected to have a Material  Adverse Effect.  The Company's  Subsidiaries are
listed in the SEC Filings.

                   4.2 AUTHORIZATION. Except for approval of the Proposal by its
stockholders  as  contemplated  in Section  7.9,  the Company has full power and
authority  and has taken all  requisite  action on the part of the Company,  its
officers,  directors  and  stockholders  necessary  for (i)  the  authorization,
execution and delivery of the Transaction  Documents,  (ii) the authorization of
the performance of all obligations of the Company hereunder or thereunder, (iii)
the  authorization,  issuance (or  reservation for issuance) and delivery of the
Securities  and (iv) the  consummation  of the Reverse  Split.  The  Transaction
Documents  constitute the legal,  valid and binding  obligations of the Company,
enforceable  against  the Company in  accordance  with their  terms,  subject to
bankruptcy,  insolvency,  fraudulent  transfer,  reorganization,  moratorium and
similar  laws of general  applicability,  relating  to or  affecting  creditors'
rights generally.

                   4.3   CAPITALIZATION.   SCHEDULE   4.3  sets  forth  (a)  the
authorized  capital  stock of the Company on the date hereof;  (b) the number of
shares of  capital  stock  issued and  outstanding;  (c) the number of shares of
capital stock issuable pursuant to the Company's stock plans; and (d) the number
of shares of capital  stock  issuable  and  reserved  for  issuance  pursuant to
securities  (other  than  the  Shares  and the  Warrants)  exercisable  for,  or
convertible into or exchangeable for any shares of capital stock of the Company.
All of the issued and  outstanding  shares of the  Company's  capital stock have
been duly  authorized and validly issued and are fully paid,  nonassessable  and
free of pre-emptive  rights and were issued in full  compliance  with applicable
state and  federal  securities  law and any rights of third  parties.  Except as
described on SCHEDULE 4.3, all of the issued and  outstanding  shares of capital
stock of each  Subsidiary  have been duly  authorized and validly issued and are
fully paid,  nonassessable and free of pre-emptive  rights,  were issued in full
compliance  with applicable  state and federal  securities law and any rights of
third parties and are owned by the Company,  beneficially and of record, subject
to no lien,  encumbrance or other adverse claim. Except as described on SCHEDULE
4.3, no Person is entitled to  pre-emptive  or similar  statutory or contractual
rights with respect to any  securities  of the  Company.  Except as described on
SCHEDULE 4.3, there are no outstanding warrants, options, convertible securities
or other rights,  agreements or  arrangements  of any character  under which the
Company or any of its  Subsidiaries  is or may be  obligated to issue any equity
securities of any kind and except as contemplated by this Agreement, neither the
Company  nor  any of its  Subsidiaries  is  currently  in  negotiations  for the
issuance of any equity  securities of any kind.  Except as described on SCHEDULE
4.3 and  except  for the  Registration  Rights  Agreement,  there  are no voting
agreements, buy-sell agreements, option or right of first purchase agreements or
other agreements of any kind among the Company and any of the securityholders of
the Company  relating to the  securities of the Company held by them.  Except as
described  on SCHEDULE  4.3 and except as provided  in the  Registration  Rights
Agreement,  no Person  has the right to require  the  Company  to  register  any
securities  of the Company  under the 1933 Act,  whether on a demand basis or in
connection  with the  registration  of  securities  of the  Company  for its own
account or for the account of any other Person.

                                      -5-
<PAGE>

                   Except as described on SCHEDULE 4.3, the issuance and sale of
the Securities hereunder will not obligate the Company to issue shares of Common
Stock or other  securities  to any other Person (other than the  Investors)  and
will not result in the adjustment of the exercise, conversion, exchange or reset
price of any outstanding security.

                   Except as  described  on SCHEDULE  4.3,  the Company does not
have  outstanding  stockholder  purchase  rights or "poison pill" or any similar
arrangement  in effect  giving  any  Person  the right to  purchase  any  equity
interest in the Company upon the occurrence of certain events.

                   4.4 VALID  ISSUANCE.  The Shares  have been duly and  validly
authorized  and,  when issued and paid for pursuant to this  Agreement,  will be
validly issued, fully paid and nonassessable, and shall be free and clear of all
encumbrances  and  restrictions  (other  than those  created by the  Investors),
except for  restrictions on transfer set forth in the  Transaction  Documents or
imposed by applicable  securities  laws. The Warrants have been duly and validly
authorized.  Assuming  that the Reverse  Split has been  effected,  upon the due
exercise of the Warrants,  the Warrant Shares will be validly issued, fully paid
and non-assessable  free and clear of all encumbrances and restrictions,  except
for  restrictions on transfer set forth in the Transaction  Documents or imposed
by applicable  securities  laws and except for those  created by the  Investors.
Upon  effecting the Reverse  Split,  the Company will have reserved a sufficient
number of shares of Common Stock for issuance upon the exercise of the Warrants,
free and clear of all encumbrances and restrictions,  except for restrictions on
transfer  set  forth in the  Transaction  Documents  or  imposed  by  applicable
securities laws and except for those created by the Investors.

                   4.5  CONSENTS.  Except for  approval  of the  Proposal by its
stockholders as contemplated in Section 7.9 and the  effectuation of the Reverse
Split, the execution, delivery and performance by the Company of the Transaction
Documents and the offer,  issuance and sale of the Securities require no consent
of, action by or in respect of, or filing with, any Person,  governmental  body,
agency,  or  official  other  than  filings  that  have been  made  pursuant  to
applicable  state  securities laws and post-sale  filings pursuant to applicable
state and federal  securities  laws which the Company  undertakes to file within
the applicable time periods.  Subject to the accuracy of the representations and
warranties of each Investor set forth in Section 5 hereof, the Company has taken
all action necessary to exempt (i) the issuance and sale of the Securities, (ii)
the issuance of the Warrant Shares upon due exercise of the Warrants,  and (iii)
the  other  transactions  contemplated  by the  Transaction  Documents  from the
provisions of any  stockholder  rights plan or other "poison pill"  arrangement,
any anti-takeover,  business combination or control share law or statute binding
on the Company or to which the Company or any of its assets and  properties  may
be subject and any  provision  of the  Company's  Articles of  Incorporation  or
Bylaws  that is or could  reasonably  be expected  to become  applicable  to the
Investors as a result of the transactions contemplated hereby, including without
limitation,  the issuance of the Securities  and the  ownership,  disposition or
voting of the  Securities  by the Investors or the exercise of any right granted
to the Investors pursuant to this Agreement or the other Transaction Documents.

                                      -6-
<PAGE>

                   4.6 DELIVERY OF SEC FILINGS;  BUSINESS.  The Company has made
available to the Investors through the EDGAR system, true and complete copies of
the Company's most recent Annual Report on Form 10-KSB for the fiscal year ended
December 31, 2004 (the  "10-KSB"),  and all other  reports  filed by the Company
pursuant  to the 1934 Act since the  filing of the  10-KSB and prior to the date
hereof (collectively,  the "SEC Filings").  The SEC Filings are the only filings
required of the Company  pursuant to the 1934 Act for such  period.  The Company
and its Subsidiaries  are engaged in all material  respects only in the business
described in the SEC Filings and the SEC Filings contain a complete and accurate
description  in all  material  respects  of the  business of the Company and its
Subsidiaries, taken as a whole.

                   4.7 USE OF  PROCEEDS.  The net  proceeds  of the  sale of the
Shares and the Warrants hereunder shall be used by the Company for (i) Phase IIb
clinical  trials  of the  Company's  Tovaxin(R)  product,  (ii)  completing  the
Company's  "good  manufacturing   practices"   manufacturing   facility,   (iii)
finalizing  preclinical  studies  and  preparing  the  investigational  new drug
application for stem cells, (iv) acquiring or investing in businesses,  products
and/or  technologies  that are complementary to those of the Company as approved
by the  Company's  Board  of  Directors  and (v)  working  capital  and  general
corporate purposes.

                   4.8 NO MATERIAL  ADVERSE  CHANGE.  Since  December  31, 2004,
except for the Reverse Split,  as identified and described in the SEC Filings or
as described on SCHEDULE 4.18, there has not been:

                           (i)   any   change   in  the   consolidated   assets,
liabilities,  financial  condition or operating results of the Company from that
reflected in the financial statements included in the Company's Quarterly Report
on Form 10-QSB for the quarter ended  September 30, 2005,  except for changes in
the ordinary  course of business  which have not had and could not reasonably be
expected to have a Material Adverse Effect, individually or in the aggregate;

                           (ii) any  declaration or payment of any dividend,  or
any authorization or payment of any  distribution,  on any of  the capital stock
of the  Company,  or any  redemption  or  repurchase  of any  securities  of the
Company;

                           (iii)  any  material  damage,  destruction  or  loss,
whether or not covered by insurance to any assets or  properties of  the Company
or its Subsidiaries;

                                      -7-
<PAGE>

                           (iv)  any  waiver,  not in  the  ordinary  course  of
business, by the Company or any Subsidiary  of a material right or of a material
debt owed to it;

                           (v) any  satisfaction or discharge of any lien, claim
or encumbrance or payment of  any  obligation  by  the Company  or a Subsidiary,
except in the ordinary course of business  and  which  is not  material  to  the
assets,  properties,  financial condition,  operating results or business of the
Company and its  Subsidiaries  taken as a whole (as such  business is  presently
conducted and as it is proposed to be conducted);

                           (vi)  any  change  or  amendment  to  the   Company's
Articles of Incorporation or Bylaws, or material change to any material contract
or arrangement by which the Company or any  Subsidiary  is bound or to which any
of their respective assets or properties is subject;

                           (vii) any material labor  difficulties or labor union
organizing   activities  with  respect  to  employees  of  the  Company  or  any
Subsidiary;

                           (viii) any material  transaction  entered into by the
Company or a Subsidiary other than in the ordinary course of business;

                           (ix) the loss of the services of any key employee, or
material change in the  composition or  duties of the senior  management  of the
Company or any Subsidiary;

                           (x) the loss or threatened loss of any customer which
has had or could reasonably be expected to have a Material Adverse Effect; or

                           (xi) any other event or  condition  of any  character
that has had or could reasonably be expected to have a Material Adverse Effect.

                   4.9 SEC FILINGS.

                           (a) At the time of filing  thereof,  the SEC  Filings
complied as to form in all material  respects with the  requirements of the 1934
Act and did not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading.

                           (b) Each  registration  statement  and any  amendment
thereto  filed by the Company since January 1, 2004 pursuant to the 1933 Act and
the rules and regulations thereunder, as of the date such statement or amendment
became effective, complied as to form in all material respects with the 1933 Act
and did not contain any untrue statement of a material fact or omit to state any
material  fact  required to be stated  therein or necessary in order to make the
statements  made therein not misleading;  and each prospectus  filed pursuant to
Rule  424(b)  under the 1933 Act,  as of its issue date and as of the closing of
any sale of securities  pursuant thereto did not contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements  made therein,  in the light of the
circumstances under which they were made, not misleading.

                                      -8-
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                   4.10 NO CONFLICT,  BREACH,  VIOLATION OR DEFAULT.  Subject to
the approval of the Proposal by its  stockholders as contemplated in Section 7.9
and  the  effectuation  of  the  Reverse  Split,  the  execution,  delivery  and
performance  of the  Transaction  Documents  by the Company and the issuance and
sale of the Securities will not conflict with or result in a breach or violation
of any of the terms and  provisions  of, or  constitute a default  under (i) the
Company's  Articles of Incorporation or the Company's Bylaws,  both as in effect
on the date hereof (true and complete  copies of which have been made  available
to the  Investors  through  the EDGAR  system),  or (ii)(a) any  statute,  rule,
regulation or order of any governmental agency or body or any court, domestic or
foreign,  having  jurisdiction over the Company,  any Subsidiary or any of their
respective assets or properties, or (b) any agreement or instrument to which the
Company or any  Subsidiary is a party or by which the Company or a Subsidiary is
bound or to which any of their respective assets or properties is subject.

                   4.11 TAX MATTERS.  The Company and each Subsidiary has timely
prepared and filed all tax returns required to have been filed by the Company or
such Subsidiary with all appropriate  governmental  agencies and timely paid all
taxes shown thereon or otherwise owed by it. The charges,  accruals and reserves
on the books of the  Company  in respect  of taxes for all  fiscal  periods  are
adequate in all material respects,  and there are no material unpaid assessments
against the Company or any Subsidiary nor, to the Company's Knowledge, any basis
for the assessment of any additional taxes, penalties or interest for any fiscal
period or audits by any federal,  state or local taxing authority except for any
assessment which is not material to the Company and its Subsidiaries, taken as a
whole.  All taxes and other  assessments  and  levies  that the  Company  or any
Subsidiary  is required  to  withhold  or to collect for payment  have been duly
withheld and collected and paid to the proper governmental entity or third party
when  due.  There  are no tax  liens or  claims  pending  or,  to the  Company's
Knowledge,  threatened  against  the Company or any  Subsidiary  or any of their
respective assets or property.  There are no outstanding tax sharing  agreements
or other such  arrangements  between  the Company  and any  Subsidiary  or other
corporation or entity.

                   4.12  TITLE TO  PROPERTIES.  Except as  disclosed  in the SEC
Filings,  the Company and each  Subsidiary has good and marketable  title to all
real  properties  and all other  properties and assets owned by it, in each case
free from liens, encumbrances and defects that would materially affect the value
thereof or  materially  interfere  with the use made or currently  planned to be
made thereof by them;  and except as  disclosed in the SEC Filings,  the Company
and each Subsidiary  holds any leased real or personal  property under valid and
enforceable  leases with no exceptions that would materially  interfere with the
use made or currently planned to be made thereof by them.

                   4.13 CERTIFICATES,  AUTHORITIES AND PERMITS.  The Company and
each Subsidiary possess adequate certificates,  authorities or permits issued by
appropriate  governmental  agencies or bodies  necessary to conduct the business
now operated by it, and neither the Company nor any  Subsidiary has received any
notice of  proceedings  relating to the revocation or  modification  of any such
certificate, authority or permit that, if determined adversely to the Company or
such Subsidiary, could reasonably be expected to have a Material Adverse Effect,
individually or in the aggregate.

                                      -9-
<PAGE>

                   4.14 LABOR MATTERS.

                   (a) The Company is not a party to or bound by any  collective
bargaining agreements or other agreements with labor organizations.  The Company
has not  violated  in any  material  respect  any laws,  regulations,  orders or
contract terms,  affecting the collective bargaining rights of employees,  labor
organizations  or  any  laws,   regulations  or  orders   affecting   employment
discrimination,  equal opportunity  employment,  or employees'  health,  safety,
welfare, wages and hours.

                   (b) (i)  There  are no  labor  disputes  existing,  or to the
Company's Knowledge,  threatened, involving strikes, slow-downs, work stoppages,
job actions, disputes,  lockouts or any other disruptions of or by the Company's
employees,  (ii) there are no unfair labor  practices or petitions  for election
pending or, to the Company's  Knowledge,  threatened  before the National  Labor
Relations Board or any other federal,  state or local labor commission  relating
to the Company's  employees,  (iii) no demand for  recognition or  certification
heretofore made by any labor  organization or group of employees is pending with
respect to the Company and (iv) to the Company's  Knowledge,  the Company enjoys
good labor and employee relations with its employees and labor organizations.

                   (c) The Company is, and at all times has been,  in compliance
in  all  material  respects  with  all  applicable  laws  respecting  employment
(including  laws  relating  to   classification  of  employees  and  independent
contractors) and employment practices, terms and conditions of employment, wages
and hours,  and  immigration  and  naturalization.  There are no claims  pending
against the Company before the Equal  Employment  Opportunity  Commission or any
other  administrative  body or in any court asserting any violation of Title VII
of the Civil Rights Act of 1964, the Age  Discrimination  Act of 1967, 42 U.S.C.
ss.ss.  1981 or 1983 or any  other  federal,  state or  local  Law,  statute  or
ordinance barring discrimination in employment.

                   (d) Except as disclosed in the SEC Filings or as described on
SCHEDULE  4.14,  the Company is not a party to, or bound by, any  employment  or
other  contract or agreement  that contains any  severance,  termination  pay or
change of control liability or obligation,  including,  without limitation,  any
"excess  parachute  payment,"  as  defined in  Section  2806(b) of the  Internal
Revenue Code.

                   (e) Each of the Company's employees is a Person who is either
a United States citizen or a permanent  resident  entitled to work in the United
States.  To the  Company's  Knowledge,  the  Company  has no  liability  for the
improper  classification  by  the  Company  of  such  employees  as  independent
contractors or leased employees prior to the Closing.

                                      -10-
<PAGE>

                   4.15 INTELLECTUAL PROPERTY.

                   (a)  All  Intellectual   Property  of  the  Company  and  its
Subsidiaries is currently in compliance with all legal  requirements  (including
timely filings,  proofs and payments of fees) and is valid and  enforceable.  No
Intellectual  Property of the Company or its Subsidiaries which is necessary for
the conduct of Company's and each of its Subsidiaries'  respective businesses as
currently  conducted or as currently proposed to be conducted has been or is now
involved in any  cancellation,  dispute or  litigation,  and,  to the  Company's
Knowledge,  no such  action  is  threatened.  No patent  of the  Company  or its
Subsidiaries  has  been  or  is  now  involved  in  any  interference,  reissue,
re-examination or opposition proceeding.

                   (b) All of the licenses and sublicenses and consent,  royalty
or other agreements concerning Intellectual Property which are necessary for the
conduct of the Company's and each of its Subsidiaries'  respective businesses as
currently  conducted  or as  currently  proposed  to be  conducted  to which the
Company or any  Subsidiary  is a party or by which any of their assets are bound
(other than generally commercially available, non-custom, off-the-shelf software
application  programs having a retail acquisition price of less than $10,000 per
license) (collectively,  "License Agreements") are valid and binding obligations
of the  Company  or its  Subsidiaries  that  are  parties  thereto  and,  to the
Company's Knowledge,  the other parties thereto,  enforceable in accordance with
their  terms,  except to the extent that  enforcement  thereof may be limited by
bankruptcy,  insolvency,  reorganization,  moratorium,  fraudulent conveyance or
other similar laws affecting the enforcement of creditors' rights generally, and
there exists no event or condition which will result in a material  violation or
breach of or constitute  (with or without due notice or lapse of time or both) a
default  by the  Company  or any of its  Subsidiaries  under  any  such  License
Agreement.

                   (c) The  Company and its  Subsidiaries  own or have the valid
right to use all of the Intellectual  Property that is necessary for the conduct
of  the  Company's  and  each  of its  Subsidiaries'  respective  businesses  as
currently  conducted  or as  currently  proposed  to be  conducted  and  for the
ownership,  maintenance  and operation of the  Company's  and its  Subsidiaries'
properties and assets, free and clear of all liens, encumbrances, adverse claims
or obligations to license all such owned Intellectual  Property and Confidential
Information,  other than  licenses  entered into in the  ordinary  course of the
Company's and its  Subsidiaries'  businesses.  The Company and its  Subsidiaries
have a valid and enforceable right to use all third party Intellectual  Property
and Confidential  Information used or held for use in the respective  businesses
of the Company and its Subsidiaries.

                   (d)  The  conduct  of the  Company's  and  its  Subsidiaries'
businesses  as currently  conducted  does not  infringe or  otherwise  impair or
conflict with (collectively, "Infringe") any Intellectual Property rights of any
third party or any confidentiality obligation owed to a third party, and, to the
Company's Knowledge,  the Intellectual Property and Confidential  Information of
the  Company  and its  Subsidiaries  which  are  necessary  for the  conduct  of
Company's  and each of its  Subsidiaries'  respective  businesses  as  currently
conducted or as currently  proposed to be conducted  are not being  Infringed by
any third party.  There is no litigation or order pending or outstanding  or, to
the  Company's  Knowledge,  threatened  or  imminent,  that  seeks  to  limit or
challenge or that concerns the ownership, use, validity or enforceability of any
Intellectual  Property  or  Confidential  Information  of the  Company  and  its
Subsidiaries  and the Company's and its  Subsidiaries'  use of any  Intellectual
Property  or  Confidential  Information  owned  by a third  party,  and,  to the
Company's Knowledge, there is no valid basis for the same.

                                      -11-
<PAGE>

                   (e) The consummation of the transactions  contemplated hereby
and by the other Transaction Documents will not result in the alteration,  loss,
impairment  of or  restriction  on the  Company's  or  any of its  Subsidiaries'
ownership  or  right to use any of the  Intellectual  Property  or  Confidential
Information  which is  necessary  for the conduct of  Company's  and each of its
Subsidiaries'  respective  businesses  as  currently  conducted  or as currently
proposed to be conducted.

                   (f) The Company and its  Subsidiaries  have taken  reasonable
steps  to  protect  the  Company's  and  its   Subsidiaries'   rights  in  their
Intellectual Property and Confidential  Information.  Each employee,  consultant
and contractor who has had access to Confidential Information which is necessary
for the conduct of Company's and each of its Subsidiaries' respective businesses
as currently  conducted or as currently proposed to be conducted has executed an
agreement to maintain the  confidentiality of such Confidential  Information and
has executed appropriate  agreements that are substantially  consistent with the
Company's  standard forms  thereof.  Except under  confidentiality  obligations,
there  has  been  no  material  disclosure  of  any  of  the  Company's  or  its
Subsidiaries' Confidential Information to any third party.

                   4.16  ENVIRONMENTAL  MATTERS.  Neither  the  Company  nor any
Subsidiary is in violation of any statute, rule,  regulation,  decision or order
of any governmental agency or body or any court,  domestic or foreign,  relating
to the use,  disposal or release of hazardous or toxic substances or relating to
the protection or restoration of the  environment or human exposure to hazardous
or toxic substances  (collectively,  "Environmental Laws"), owns or operates any
real  property   contaminated   with  any  substance  that  is  subject  to  any
Environmental  Laws,  is  liable  for any  off-site  disposal  or  contamination
pursuant to any  Environmental  Laws, or is subject to any claim relating to any
Environmental Laws, which violation,  contamination,  liability or claim has had
or could reasonably be expected to have a Material Adverse Effect,  individually
or in the  aggregate;  and there is no pending or, to the  Company's  Knowledge,
threatened investigation that might lead to such a claim.

                   4.17  LITIGATION.  There  are no  pending  actions,  suits or
proceedings against or affecting the Company,  its Subsidiaries or any of its or
their  properties;  and to the Company's  Knowledge,  no such actions,  suits or
proceedings are threatened or contemplated.

                   4.18 FINANCIAL STATEMENTS.  The financial statements included
in each SEC Filing present fairly,  in all material  respects,  the consolidated
financial  position of the  Company as of the dates  shown and its  consolidated
results of operations and cash flows for the periods  shown,  and such financial
statements  have been  prepared  in  conformity  with  United  States  generally
accepted accounting principles applied on a consistent basis ("GAAP") (except as
may be disclosed therein or in the notes thereto,  and, in the case of quarterly
financial  statements,  as permitted by Form 10-Q under the 1934 Act). Except as
set forth in the financial statements of the Company included in the SEC Filings
filed prior to the date hereof or as  described  on SCHEDULE  4.18,  neither the
Company nor any of its Subsidiaries has incurred any liabilities,  contingent or
otherwise, except those incurred in the ordinary course of business,  consistent
(as to amount and nature) with past  practices  since the date of such financial
statements,  none of which,  individually or in the aggregate, have had or could
reasonably be expected to have a Material Adverse Effect.

                                      -12-
<PAGE>

                   4.19  INSURANCE  COVERAGE.  The Company  and each  Subsidiary
maintains in full force and effect  insurance  coverage  that is  customary  for
comparably  situated  companies for the business being  conducted and properties
owned or leased by the Company and each Subsidiary,  and the Company  reasonably
believes such insurance coverage to be adequate against all liabilities,  claims
and risks  against which it is customary for  comparably  situated  companies to
insure.

                   4.20 BROKERS AND FINDERS. No Person will have, as a result of
the  transactions  contemplated by the Transaction  Documents,  any valid right,
interest or claim against or upon the Company, any Subsidiary or an Investor for
any commission, fee or other compensation pursuant to any agreement, arrangement
or  understanding  entered  into by or on behalf of the  Company,  other than as
described in SCHEDULE 4.20.

                   4.21 NO  DIRECTED  SELLING  EFFORTS OR GENERAL  SOLICITATION.
Neither  the  Company  nor any Person  acting on its behalf  has  conducted  any
general  solicitation  or  general  advertising  (as  those  terms  are  used in
Regulation D) in connection with the offer or sale of any of the Securities.

                   4.22 NO INTEGRATED  OFFERING.  Neither the Company nor any of
its  Affiliates,  nor any Person acting on its or their behalf has,  directly or
indirectly,  made any offers or sales of any Company  security or solicited  any
offers to buy any security,  under  circumstances  that would  adversely  affect
reliance by the Company on Section 4(2) for the exemption from  registration for
the  transactions  contemplated  hereby  or would  require  registration  of the
Securities under the 1933 Act.

                   4.23 PRIVATE PLACEMENT.  The offer and sale of the Securities
to the  Investors  as  contemplated  hereby  is  exempt  from  the  registration
requirements of the 1933 Act.

                   4.24  QUESTIONABLE  PAYMENTS.  Neither the Company nor any of
its Subsidiaries,  nor their respective directors, officers or employees nor, to
the Company's Knowledge, any of their respective current or former stockholders,
agents or other Persons acting on behalf of the Company or any  Subsidiary,  has
on  behalf  of the  Company  or  any  Subsidiary  or in  connection  with  their
respective businesses:  (a) used any corporate funds for unlawful contributions,
gifts,  entertainment or other unlawful expenses relating to political activity;
(b) made any direct or indirect unlawful payments to any governmental  officials
or employees from corporate funds; (c) established or maintained any unlawful or
unrecorded  fund of  corporate  monies  or other  assets;  (d) made any false or
fictitious entries on the books and records of the Company or any Subsidiary; or
(e) made any unlawful bribe,  rebate,  payoff,  influence  payment,  kickback or
other unlawful payment of any nature.

                                      -13-
<PAGE>

                   4.25 TRANSACTIONS WITH AFFILIATES. Except as disclosed in the
SEC  Filings,  none of the  officers or  directors  of the  Company  and, to the
Company's  Knowledge,  none of the employees of the Company is presently a party
to any transaction with the Company or any Subsidiary  (other than as holders of
stock  options  and/or  warrants,  and for services as  employees,  officers and
directors), including any contract, agreement or other arrangement providing for
the  furnishing  of services to or by,  providing for rental of real or personal
property to or from,  or  otherwise  requiring  payments to or from any officer,
director or such  employee or, to the Company's  Knowledge,  any entity in which
any officer,  director, or any such employee has a substantial interest or is an
officer, director, trustee or partner.

                   4.26 INTERNAL CONTROLS. The Company is in material compliance
with the provisions of the  Sarbanes-Oxley  Act of 2002 currently  applicable to
the  Company.  The  Company and the  Subsidiaries  maintain a system of internal
accounting  controls  sufficient  to  provide  reasonable   assurance  that  (i)
transactions  are executed in accordance with  management's  general or specific
authorizations,   (ii)   transactions   are  recorded  as  necessary  to  permit
preparation  of financial  statements  in  conformity  with GAAP and to maintain
asset  accountability,  (iii) access to assets is permitted  only in  accordance
with  management's  general or  specific  authorization,  and (iv) the  recorded
accountability  for assets is compared  with the existing  assets at  reasonable
intervals and appropriate  action is taken with respect to any differences.  The
Company has established  disclosure  controls and procedures (as defined in 1934
Act Rules  13a-14 and  15d-14)  for the Company  and  designed  such  disclosure
controls and  procedures  to ensure that  material  information  relating to the
Company, including the Subsidiaries, is made known to the certifying officers by
others  within  those  entities,  particularly  during  the  period in which the
Company's  most recently filed period report under the 1934 Act, as the case may
be, is being  prepared.  The Company's  certifying  officers have  evaluated the
effectiveness  of the  Company's  controls and  procedures  as of the end of the
period  covered by the most recently  filed  periodic  report under the 1934 Act
(such date, the "Evaluation  Date").  The Company presented in its most recently
filed  periodic  report  under the 1934 Act the  conclusions  of the  certifying
officers about the effectiveness of the disclosure controls and procedures based
on their evaluations as of the Evaluation Date. Since the Evaluation Date, there
have been no  significant  changes in the Company's  internal  controls (as such
term is defined in Item 308 of Regulation  S-B) or, to the Company's  Knowledge,
in  other  factors  that  could  significantly  affect  the  Company's  internal
controls.  The Company maintains and will continue to maintain a standard system
of accounting  established  and  administered  in  accordance  with GAAP and the
applicable requirements of the 1934 Act.

                   4.27  SOLVENCY.  Based  on  the  financial  condition  of the
Company as of the Closing Date and giving  effect to the net  proceeds  from the
Closing,  (i) the Company's fair saleable value of its assets exceeds the amount
that will be  required  to be paid on or in  respect of the  Company's  existing
debts and other  liabilities  (including known  contingent  liabilities) as they
mature;  (ii) the Company's assets do not constitute  unreasonably small capital
to carry  on its  business  for the 2006  fiscal  year as now  conducted  and as
proposed to be  conducted  including  its capital  needs taking into account the
particular capital  requirements of the business  conducted by the Company,  and
projected capital requirements and capital  availability  thereof; and (iii) the
proceeds  the  Company  receives,  giving  effect  to the  Closing,  were  it to
liquidate all of its assets,  after taking into account all anticipated  uses of
the cash,  would be  sufficient  to pay all amounts on or in respect of its debt
when such amounts are required to be paid.  As of Closing,  the Company does not
intend to incur  debts  beyond  its  ability  to pay such  debts as they  mature
(taking  into  account  the  timing  and  amounts of cash to be payable on or in
respect of its debt).

                                      -14-
<PAGE>

                   4.28  DISCLOSURES.  Neither the Company nor any Person acting
on its behalf has  provided  the  Investors  or their agents or counsel with any
information   that  constitutes  or  might   constitute   material,   non-public
information.  The Private  Placement  Memorandum and the other written materials
delivered to the Investors in connection with the  transactions  contemplated by
the Transaction Documents do not contain any untrue statement of a material fact
or omit to state a  material  fact  necessary  in  order to make the  statements
contained therein, in light of the circumstances under which they were made, not
misleading.

         5.  REPRESENTATIONS  AND  WARRANTIES  OF  THE  INVESTORS.  Each  of the
Investors  hereby  severally,  and not jointly,  represents  and warrants to the
Company that:

                   5.1  ORGANIZATION  AND EXISTENCE.  Such Investor is either an
individual or a validly  existing  corporation,  limited  partnership or limited
liability  company  and has all  requisite  corporate,  partnership  or  limited
liability  company power and authority to invest in the  Securities  pursuant to
this Agreement.

                   5.2 AUTHORIZATION. The execution, delivery and performance by
such  Investor of the  Transaction  Documents to which such  Investor is a party
have been duly authorized and will each constitute the valid and legally binding
obligation  of such  Investor,  enforceable  against such Investor in accordance
with their  respective  terms,  subject to  bankruptcy,  insolvency,  fraudulent
transfer, reorganization,  moratorium and similar laws of general applicability,
relating to or affecting creditors' rights generally.

                   5.3 PURCHASE  ENTIRELY FOR OWN ACCOUNT.  The Securities to be
received by such Investor  hereunder  will be acquired for such  Investor's  own
account,  not as  nominee  or  agent,  and  not  with a view  to the  resale  or
distribution of any part thereof in violation of the 1933 Act, and such Investor
has no present intention of selling, granting any participation in, or otherwise
distributing the same in violation of the 1933 Act without  prejudice,  however,
to such Investor's right at all times to sell or otherwise dispose of all or any
part  of such  Securities  in  compliance  with  applicable  federal  and  state
securities laws.  Nothing  contained herein shall be deemed a representation  or
warranty by such Investor to hold the  Securities  for any period of time.  Such
Investor is not a broker-dealer registered with the SEC under the 1934 Act or an
entity engaged in a business that would require it to be so registered.

                   5.4 INVESTMENT EXPERIENCE. Such Investor acknowledges that it
can bear the economic risk and complete loss of its investment in the Securities
and has such knowledge and  experience in financial or business  matters that it
is capable of  evaluating  the merits and risks of the  investment  contemplated
hereby.

                   5.5  DISCLOSURE  OF  INFORMATION.  Such  Investor  has had an
opportunity to receive all  information  related to the Company  requested by it
and to ask  questions  of and receive  answers  from the Company  regarding  the
Company,  its  business  and the terms and  conditions  of the  offering  of the
Securities.  Such Investor acknowledges receipt of copies of the SEC Filings and
the Private  Placement  Memorandum.  Neither  such  inquiries  nor any other due
diligence investigation conducted by such Investor shall modify, amend or affect
such Investor's  right to rely on the Company's  representations  and warranties
contained in this Agreement.

                                      -15-
<PAGE>

                   5.6 RESTRICTED SECURITIES. Such Investor understands that the
Securities are  characterized as "restricted  securities" under the U.S. federal
securities  laws  inasmuch  as they are being  acquired  from the  Company  in a
transaction  not  involving  a public  offering  and that  under  such  laws and
applicable  regulations such securities may be resold without registration under
the 1933 Act only in certain limited circumstances.

                   5.7 LEGENDS. It is understood that, except as provided below,
certificates  evidencing  the  Securities  may bear the following or any similar
legend:

                           (a) "The  securities  represented  hereby  may not be
transferred unless (i) such securities have been registered for sale pursuant to
the  Securities  Act of 1933,  as  amended,  (ii)  such  securities  may be sold
pursuant to Rule 144(k), or (iii) the Company has received an opinion of counsel
reasonably  satisfactory  to it that such  transfer may lawfully be made without
registration under the Securities Act of 1933 or qualification  under applicable
state  securities  laws.  Notwithstanding  the foregoing,  the securities may be
pledged  in  connection   with  a  bona  fide  margin  account  secured  by  the
securities."

                           (b) If  required by the  authorities  of any state in
connection with the issuance of sale of the  Securities,  the legend required by
such state authority.

                   5.8  ACCREDITED  INVESTOR.  Such  Investor  is an  accredited
investor as defined in Rule 501(a) of Regulation  D, as amended,  under the 1933
Act.

                   5.9 NO GENERAL ADVERTISEMENT.  Such Investor did not learn of
the  investment  in the  Securities  as a result  of any  public  advertisement,
article, notice or other communication regarding the Securities published in any
newspaper,  magazine or similar  media or broadcast  over  television,  radio or
internet or presented at any seminar or other general advertisement.

                   5.10 BROKERS AND FINDERS. No Person will have, as a result of
the  transactions  contemplated by the Transaction  Documents,  any valid right,
interest or claim against or upon the Company, any Subsidiary or an Investor for
any commission, fee or other compensation pursuant to any agreement, arrangement
or understanding entered into by or on behalf of such Investor.

                   5.11  PROHIBITED  TRANSACTIONS.  During the last  thirty (30)
days prior to the date hereof,  neither such  Investor nor any Affiliate of such
Investor which (x) had knowledge of the transactions  contemplated  hereby,  (y)
has or shares discretion  relating to such Investor's  investments or trading or
information concerning such Investor's investments,  including in respect of the
Securities, or (z) is subject to such Investor's review or input concerning such
Affiliate's  investments or trading  (collectively,  "Trading  Affiliates") has,
directly or indirectly,  effected or agreed to effect any short sale, whether or
not against the box,  established any "put  equivalent  position" (as defined in
Rule 16a-1(h) under the 1934 Act) with respect to the Common Stock,  granted any
other right (including, without limitation, any put or call option) with respect
to the Common Stock or with respect to any security that includes, relates to or
derived any  significant  part of its value from the Common  Stock or  otherwise
sought  to  hedge  its  position  in  the   Securities   (each,   a  "Prohibited
Transaction").  Prior to the  earliest to occur of (i) the  termination  of this
Agreement,  (ii) the Effective Date or (iii) the  Effectiveness  Deadline,  such
Investor  shall not,  and shall cause its  Trading  Affiliates  not to,  engage,
directly or indirectly, in a Prohibited Transaction.  Such Investor acknowledges
that the  representations,  warranties  and covenants  contained in this Section
5.11 are being made for the benefit of the  Investors as well as the Company and
that each of the other Investors  shall have an independent  right to assert any
claims  against  such  Investor  arising out of any breach or  violation  of the
provisions of this Section 5.11.

                                      -16-
<PAGE>

                   5.12  PATRIOT  ACT.  Neither  such  Investor  nor  any of its
Affiliates has been designated,  and is not owned or controlled, by a "suspected
terrorist"  as defined in Executive  Order 13224.  None of the cash used to fund
such  Investor's  portion of the Purchase  Price has been,  and none of the cash
used to fund any cash exercise of such  Investor's  Warrants will be, or derived
from, any activity that could cause the Company 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.

         6. CONDITIONS TO CLOSING.

                   6.1 CONDITIONS TO THE INVESTORS' OBLIGATIONS.  The obligation
of each  Investor  to  purchase  the Shares and the  Warrants  at the Closing is
subject to the fulfillment to such Investor's  satisfaction,  on or prior to the
Closing Date, of the  following  conditions,  any of which may be waived by such
Investor (as to itself only):

                           (a) The  representations  and warranties  made by the
Company  in  Section  4 hereof  qualified  as to  materiality  shall be true and
correct at all times prior to and on the Closing Date,  except to the extent any
such representation or warranty expressly speaks as of an earlier date, in which
case  such  representation  or  warranty  shall be true and  correct  as of such
earlier date,  and, the  representations  and warranties  made by the Company in
Section 4 hereof not  qualified as to  materiality  shall be true and correct in
all material  respects at all times prior to and on the Closing Date,  except to
the extent any such representation or warranty expressly speaks as of an earlier
date, in which case such representation or warranty shall be true and correct in
all material  respects as of such earlier date. The Company shall have performed
in all material  respects all  obligations  and covenants  herein required to be
performed by it on or prior to the Closing Date.

                           (b)  The  Company  shall  have  obtained  any and all
consents, permits,  approvals,  registrations and waivers (excluding stockholder
approval of the  Proposal)  necessary or  appropriate  for  consummation  of the
purchase  and  sale  of  the  Securities  and  the  consummation  of  the  other
transactions contemplated by the Transaction Documents, all of which shall be in
full force and effect.

                                      -17-
<PAGE>

                           (c) The Company shall have executed and delivered the
Registration Rights Agreement.

                           (d) The Company  shall have received  gross  proceeds
from the sale of the  Shares and  Warrants  as  contemplated  hereby of at least
Twenty-One Million Dollars  ($21,000,000) and not more than Twenty-Three Million
Dollars ($23,000,000).

                           (e) No judgment,  writ, order,  injunction,  award or
decree of or by any  court,  or judge,  justice  or  magistrate,  including  any
bankruptcy  court or judge,  or any order of or by any  governmental  authority,
shall have been issued,  and no action or proceeding  shall have been instituted
by any governmental  authority,  enjoining or preventing the consummation of the
transactions contemplated hereby or in the other Transaction Documents.

                           (f) The Company shall have  delivered a  Certificate,
executed  on behalf of the Company by its Chief  Executive  Officer or its Chief
Financial Officer,  dated as of the Closing Date,  certifying to the fulfillment
of the conditions  specified in  subsections  (a), (b), (d), (e) and (i) of this
Section 6.1.

                           (g) The Company shall have  delivered a  Certificate,
executed  on behalf of the  Company by its  Secretary,  dated as of the  Closing
Date,  certifying  the  resolutions  adopted  by the Board of  Directors  of the
Company approving the transactions  contemplated by this Agreement and the other
Transaction  Documents,  the Reverse  Split and the issuance of the  Securities,
certifying the current versions of the Articles of  Incorporation  and Bylaws of
the Company and certifying as to the signatures and authority of persons signing
the Transaction Documents and related documents on behalf of the Company.

                           (h) The Investors shall have received an opinion from
Brewer & Pritchard,  P.C., the Company's counsel,  dated as of the Closing Date,
in form and substance reasonably acceptable to the Investors and addressing such
legal matters as the Investors may reasonably request.

                           (i) No stop order or suspension of trading shall have
been  imposed  by the SEC or any  other  governmental  or  regulatory  body with
respect to public trading in the Common Stock.

                           [(j) Messrs Brooks  Boveroux,  Tony Kamin,  and Terry
Wesner shall tender resignations to be effective no later than the Closing Date,
and the two  remaining  directors  shall  appoint Scott B. Seaman and Gregory H.
Bailey as directors to be effective at Closing.](1)

                  6.2 CONDITIONS TO  OBLIGATIONS  OF THE COMPANY.  The Company's
obligation  to sell and issue the  Shares  and the  Warrants  at the  Closing is
subject to the fulfillment to the satisfaction of the Company on or prior to the
Closing  Date of the  following  conditions,  any of which  may be waived by the
Company:

--------------------------------------------------
(1) To be  included  only  at the  specific  request  of an  Investor

                                      -18-
<PAGE>

                           (a) The  representations  and warranties  made by the
Investors in Section 5 hereof,  other than the  representations  and  warranties
contained in Sections 5.3,  5.4,  5.5,  5.6,  5.7, 5.8 and 5.9 (the  "Investment
Representations"), shall be true and correct in all material respects when made,
and shall be true and correct in all material  respects on the Closing Date with
the same force and  effect as if they had been made on and as of said date.  The
Investment  Representations shall be true and correct in all respects when made,
and shall be true and correct in all  respects on the Closing Date with the same
force and effect as if they had been made on and as of said date.  The Investors
shall have  performed in all material  respects all  obligations  and  covenants
herein required to be performed by them on or prior to the Closing Date.

                           (b) The  Investors  shall have executed and delivered
the Registration Rights Agreement.

                           (c) The Investors  shall have  delivered the Purchase
Price to the Escrow Agent or as otherwise agreed to with the Company.

                   6.3 TERMINATION OF OBLIGATIONS TO EFFECT CLOSING; EFFECTS.

                           (a) The obligations of the Company,  on the one hand,
and the Investors,  on the other hand, to effect the Closing shall  terminate as
follows:

                                    (i) Upon the mutual  written  consent of the
Company and the Investors;

                                    (ii) By the Company if any of the conditions
set forth in Section 6.2 shall have become  incapable of fulfillment,  and shall
not have been waived by the Company;

                                    (iii) By an Investor (with respect to itself
only) if any of the  conditions  set  forth in  Section  6.1 shall  have  become
incapable of fulfillment, and shall not have been waived by the Investor; or

                                    (iv) By either the  Company or any  Investor
(with  respect to itself  only) if the Closing  has not  occurred on or prior to
5:00 p.m., New York time, on April 17, 2006;

provided,  however,  that,  except in the case of clause  (i)  above,  the party
seeking to terminate  its  obligation to effect the Closing shall not then be in
breach  of any of  its  representations,  warranties,  covenants  or  agreements
contained in this  Agreement or the other  Transaction  Documents if such breach
has  resulted  in the  circumstances  giving  rise to such  party's  seeking  to
terminate its obligation to effect the Closing.

                  (b) In the event of termination by the Company or any Investor
of its obligations to effect the Closing  pursuant to this Section 6.3,  written
notice  thereof  shall  forthwith be given to the other  Investors and the other
Investors  shall have the right to  terminate  their  obligations  to effect the
Closing upon written notice to the Company and the other  Investors.  Nothing in
this Section 6.3 shall be deemed to release any party from any liability for any
breach by such party of the terms and  provisions of this Agreement or the other
Transaction  Documents  or to impair  the right of any party to compel  specific
performance  by any other party of its  obligations  under this Agreement or the
other Transaction Documents.

                                      -19-
<PAGE>

         7. COVENANTS AND AGREEMENTS OF THE COMPANY.

                   7.1  RESERVATION OF COMMON STOCK.  Upon  consummation  of the
Reverse Split,  the Company shall at all times reserve and keep available out of
its  authorized but unissued  shares of Common Stock,  solely for the purpose of
providing  for the  exercise  of the  Warrants,  such number of shares of Common
Stock as shall from time to time equal the number of shares sufficient to permit
the exercise of the Warrants  issued  pursuant to this  Agreement in  accordance
with their respective terms.

                   7.2 REPORTS. The Company will furnish to the Investors and/or
their assignees such information relating to the Company and its Subsidiaries as
from time to time may  reasonably  be  requested by the  Investors  and/or their
assignees;  provided,  however,  that the Company  shall not  disclose  material
nonpublic information to the Investors,  or to advisors to or representatives of
the  Investors,  unless  prior to  disclosure  of such  information  the Company
identifies such information as being material nonpublic information and provides
the Investors,  such advisors and representatives with the opportunity to accept
or refuse to accept  such  material  nonpublic  information  for  review and any
Investor  wishing  to  obtain  such  information   enters  into  an  appropriate
confidentiality agreement with the Company with respect thereto.

                   7.3 NO CONFLICTING AGREEMENTS.  The Company will not take any
action,  enter into any agreement or make any commitment  that would conflict or
interfere  in  any  material  respect  with  the  Company's  obligations  to the
Investors under the Transaction Documents.

                   7.4  INSURANCE.  The Company shall maintain in full force and
effect insurance  coverage that is customary for comparably  situated  companies
for the business being  conducted and properties  owned or leased by the Company
and each Subsidiary,  in amounts the Company reasonably  believes to be adequate
against all  liabilities,  claims and risks  against  which it is customary  for
comparably situated companies to insure.

                   7.5  COMPLIANCE  WITH LAWS.  The  Company  will comply in all
material  respects with all  applicable  laws,  rules,  regulations,  orders and
decrees of all governmental authorities.

                   7.6  LISTING  OF  UNDERLYING   SHARES  AND  RELATED  MATTERS.
Promptly  following the Closing,  the Company shall take all necessary action to
cause the  Shares  and the  Warrant  Shares to be listed on the  Nasdaq  Capital
Market as soon as practicable  after the Closing Date.  Further,  if the Company
applies  to have its  Common  Stock  or other  securities  traded  on any  other
principal  stock exchange or market,  it shall include in such  application  the
Shares and the Warrant Shares and will take such other action as is necessary to
cause such Common Stock to be so listed. Once approved for listing,  the Company
will use commercially  reasonable efforts to continue the listing and trading of
its Common Stock on the Nasdaq  Capital  Market and, in  accordance,  therewith,
will use  commercially  reasonable  efforts to comply in all  respects  with the
Company's  reporting,  filing and other obligations under the bylaws or rules of
such market or exchange, as applicable.

                                      -20-
<PAGE>

                   7.7 TERMINATION OF COVENANTS.  The provisions of Sections 7.2
through 7.5 shall terminate and be of no further force and effect on the date on
which the  Company's  obligations  under the  Registration  Rights  Agreement to
register  or  maintain  the  effectiveness  of  any  registration  covering  the
Registrable  Securities  (as such term is  defined  in the  Registration  Rights
Agreement) shall terminate.

                   7.8 REMOVAL OF LEGENDS.  Upon the earlier of (i) registration
for resale  pursuant to the  Registration  Rights  Agreement or (ii) Rule 144(k)
becoming  available the Company shall (A) deliver to the transfer  agent for the
Common Stock (the "Transfer Agent")  irrevocable  instructions that the Transfer
Agent shall  reissue a certificate  representing  shares of Common Stock without
legends upon receipt by such  Transfer  Agent of the legended  certificates  for
such shares, together with either (1) a customary representation by the Investor
that Rule 144(k)  applies to the shares of Common Stock  represented  thereby or
(2) a statement by the Investor that such Investor has sold the shares of Common
Stock represented thereby in accordance with the Plan of Distribution  contained
in the  Registration  Statement  and,  if  applicable,  in  accordance  with any
prospectus  delivery  requirements,  and (B) cause its counsel to deliver to the
Transfer  Agent one or more  blanket  opinions to the effect that the removal of
such legends in such  circumstances may be effected under the 1933 Act. From and
after the earlier of such dates, upon an Investor's written request, the Company
shall promptly  cause  certificates  evidencing the Investor's  Securities to be
replaced  with  certificates  which do not bear such  restrictive  legends,  and
Warrant Shares  subsequently  issued upon due exercise of the Warrants shall not
bear such  restrictive  legends  provided the provisions of either clause (i) or
clause (ii) above,  as  applicable,  are satisfied  with respect to such Warrant
Shares. When the Company is required to cause unlegended certificates to replace
previously  issued legended  certificates,  if unlegended  certificates  are not
delivered to an Investor  within three (3) Business  Days of  submission by that
Investor of legended  certificate(s) to the Transfer Agent as provided above (or
to the Company, in the case of the Warrants), the Company shall be liable to the
Investor  for  liquidated  damages in an amount  equal to 1.5% of the  aggregate
purchase  price of the  Securities  evidenced  by such  certificate(s)  for each
thirty (30) day period (or portion  thereof)  beyond such three (3) Business Day
that the unlegended certificates have not been so delivered.

                   7.9 REVERSE SPLIT;  STOCKHOLDERS  MEETING;  PROXY  STATEMENT.
Promptly  following the Closing,  the Company shall take all action necessary to
effect the Reverse  Split.  Without  limiting the  generality of the  foregoing,
promptly  following the Closing,  the Company shall take all action necessary to
call a meeting of its stockholders  (the  "Stockholders  Meeting"),  which shall
occur not later than June 30, 2006 (the "Stockholders  Meeting  Deadline"),  for
the purpose of seeking  approval of the Company's  stockholders  for the Reverse
Split (the  "Proposal").  In  connection  therewith,  the Company will  promptly
prepare and file with the SEC proxy  materials  (including a proxy statement and
form of proxy) for use at the  Stockholders  Meeting and,  after  receiving  and
promptly responding to any comments of the SEC thereon, shall promptly mail such
proxy materials to the stockholders of the Company. Upon request of the Company,
each Investor shall promptly  furnish in writing to the Company the  information
contained  in  the  Shareholders  Questionnaire  attached  as  Exhibit  B to the
Registration Rights Agreement for inclusion in the Proxy Statement.  The Company
will  comply  with  Section  14(a)  of the 1934  Act and the  rules  promulgated
thereunder in relation to any proxy statement (as amended or  supplemented,  the
"Proxy  Statement") and any form of proxy to be sent to the  stockholders of the
Company in connection  with the  Stockholders  Meeting,  and the Proxy Statement
shall not, on the date that the Proxy  Statement  (or any  amendment  thereof or
supplement  thereto)  is  first  mailed  to  stockholders  or at the time of the
Stockholders Meeting, contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the  statements  made therein
not false or misleading, or omit to state any material fact necessary to correct
any statement in any earlier  communication  with respect to the solicitation of
proxies or the Stockholders Meeting which has become false or misleading. If the
Company should discover at any time prior to the Stockholders Meeting, any event
relating to the Company or any of its  Subsidiaries  or any of their  respective
affiliates,  officers  or  directors  that  is  required  to be set  forth  in a
supplement  or amendment to the Proxy  Statement,  in addition to the  Company's
obligations  under the 1934 Act, the Company will promptly  inform the Investors
thereof.  Subject to their  fiduciary  duties,  the Company's Board of Directors
shall  recommend to the Company's  stockholders  that the  stockholders  vote in
favor of the  Proposal.  The  Company  shall  notify  the  Investors  in writing
promptly  and, in any event not more than  within one  Business  Day after,  the
Reverse Split becomes effective.

                                      -21-
<PAGE>

[7.10 BOARD OF DIRECTORS;  SCHEDULE 14F-1. As soon as practicable after Closing,
the Company  shall cause to be prepared  an  information  statement  on Schedule
14f-1 in accordance  with the  requirements of Section 14(f) of the Exchange Act
and Rule 14f-1 promulgated  thereunder with respect to the intended  appointment
of David Hung as a director  of the  Company.  Ten days after the filing of such
information  statement  with the  Securities  and  Exchange  Commission  and the
mailing  thereof  to the  stockholders  of record of the  Company,  the Board of
Directors  of the Company  shall take such  actions as are  necessary to appoint
David Hung to the Board of Directors.](2)

                  8. SURVIVAL AND INDEMNIFICATION.

                   8.1 SURVIVAL. The representations,  warranties, covenants and
agreements  contained  in  this  Agreement  shall  survive  the  Closing  of the
transactions contemplated by this Agreement.

                   8.2 INDEMNIFICATION. The Company agrees to indemnify and hold
harmless  each  Investor  and its  Affiliates  and their  respective  directors,
officers,  employees  and agents from and  against  any and all losses,  claims,
damages,  liabilities  and expenses  (including  without  limitation  reasonable
attorney fees and  disbursements  and other expenses incurred in connection with
investigating,  preparing or defending any action, claim or proceeding,  pending
or threatened and the costs of enforcement thereof) (collectively,  "Losses") to
which  such   Person   may  become   subject  as  a  result  of  any  breach  of
representation,  warranty,  covenant or agreement  made by or to be performed on
the part of the Company under the Transaction Documents,  and will reimburse any
such Person for all such amounts as they are incurred by such Person.

-------------------------------
(2) To be included only at the specific request of an Investor.

                                      -22-
<PAGE>

                   8.3 CONDUCT OF  INDEMNIFICATION  PROCEEDINGS.  Promptly after
receipt by any Person (the "Indemnified  Person") of notice of any demand, claim
or  circumstances  which would or might give rise to a claim or the commencement
of any action,  proceeding or investigation in respect of which indemnity may be
sought  pursuant to Section 8.2, such  Indemnified  Person shall promptly notify
the  Company in writing  and the  Company  shall  assume  the  defense  thereof,
including the employment of counsel reasonably  satisfactory to such Indemnified
Person,  and  shall  assume  the  payment  of all fees and  expenses;  PROVIDED,
HOWEVER,  that the  failure of any  Indemnified  Person so to notify the Company
shall not relieve the Company of its obligations  hereunder except to the extent
that the Company is materially prejudiced by such failure to notify. In any such
proceeding,  any  Indemnified  Person  shall  have the right to  retain  its own
counsel,  but the fees and expenses of such  counsel  shall be at the expense of
such Indemnified Person unless: (i) the Company and the Indemnified Person shall
have mutually agreed to the retention of such counsel; or (ii) in the reasonable
judgment of counsel to such Indemnified Person representation of both parties by
the same counsel  would be  inappropriate  due to actual or potential  differing
interests  between them.  The Company shall not be liable for any  settlement of
any proceeding effected without its written consent,  which consent shall not be
unreasonably  withheld, but if settled with such consent, or if there be a final
judgment for the plaintiff,  the Company shall  indemnify and hold harmless such
Indemnified  Person from and against any loss or liability (to the extent stated
above) by reason of such  settlement  or  judgment.  Without  the prior  written
consent of the  Indemnified  Person,  which  consent  shall not be  unreasonably
withheld,  the  Company  shall not  effect  any  settlement  of any  pending  or
threatened  proceeding  in respect of which any  Indemnified  Person is or could
have  been a party  and  indemnity  could  have been  sought  hereunder  by such
Indemnified Party, unless such settlement  includes an unconditional  release of
such Indemnified Person from all liability arising out of such proceeding.

         9. MISCELLANEOUS.

                   9.1  SUCCESSORS  AND  ASSIGNS.  This  Agreement  may  not  be
assigned by a party hereto  without the prior written  consent of the Company or
the Investors, as applicable, provided, however, that an Investor may assign its
rights and delegate its duties  hereunder in whole or in part to an Affiliate or
to a  third  party  acquiring  some  or  all  of  its  Securities  in a  private
transaction  without  the prior  written  consent  of the  Company  or the other
Investors,  after  notice duly given by such  Investor to the Company  provided,
that no such  assignment  or  obligation  shall affect the  obligations  of such
Investor hereunder.  The provisions of this Agreement shall inure to the benefit
of and be binding upon the  respective  permitted  successors and assigns of the
parties.  Nothing in this Agreement,  express or implied,  is intended to confer
upon any party other than the parties hereto or their respective  successors and
assigns any rights, remedies,  obligations, or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement.

                   9.2  COUNTERPARTS;  FAXES.  This Agreement may be executed in
two or more counterparts,  each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.  This Agreement may
also be executed via facsimile, which shall be deemed an original.

                                      -23-
<PAGE>

                   9.3 TITLES AND  SUBTITLES.  The titles and subtitles  used in
this  Agreement  are used for  convenience  only and are not to be considered in
construing or interpreting this Agreement.

                   9.4 NOTICES.  Unless otherwise provided,  any notice required
or permitted  under this Agreement shall be given in writing and shall be deemed
effectively  given as hereinafter  described (i) if given by personal  delivery,
then such  notice  shall be deemed  given upon such  delivery,  (ii) if given by
telex or  telecopier,  then such notice  shall be deemed  given upon  receipt of
confirmation of complete  transmittal,  (iii) if given by mail, then such notice
shall be deemed  given  upon the  earlier of (A)  receipt of such  notice by the
recipient  or (B) three days after such notice is deposited in first class mail,
postage prepaid,  and (iv) if given by an internationally  recognized  overnight
air  courier,  then such notice  shall be deemed  given one  Business  Day after
delivery to such  carrier.  All notices  shall be  addressed  to the party to be
notified at the address as follows,  or at such other  address as such party may
designate by ten days' advance written notice to the other party:

                           If to the Company:

                                    PharmaFrontiers Corp.
                                    2635 Crescent Ridge Drive
                                    The Woodlands, Texas 77381
                                    Attention:  William Rouse
                                    Facsimile:  (281) 872-8585

                           With a copy to:

                                    Brewer & Pritchard, P.C.
                                    Three Riverway, 18th Floor
                                    Houston, Texas 77056
                                    Attention:  Thomas Pritchard, Esq.
                                    Facsimile:  (713) 659-5302

                           If to the Investors:

to the addresses set forth on the signature pages hereto.

                   9.5  EXPENSES.  The parties  hereto shall pay their own costs
and  expenses in  connection  herewith,  except  that the Company  shall pay the
reasonable fees and expenses of Lowenstein Sandler PC not to exceed $40,000;  it
being  understood that  Lowenstein  Sandler PC has only rendered legal advice to
the Special  Situations  Funds  participating in this transaction and not to the
Company or any other Investor in connection with the  transactions  contemplated
hereby,  and that each of the  Company  and each  Investor  has  relied for such
matters on the advice of its own respective counsel. Such expenses shall be paid
not later than the Closing.  The Company  shall  reimburse  the  Investors  upon
demand for all  reasonable  out-of-pocket  expenses  incurred by the  Investors,
including without limitation reimbursement of attorneys' fees and disbursements,
in connection  with any amendment,  modification  or waiver of this Agreement or
the  other  Transaction  Documents.  In the event  that  legal  proceedings  are
commenced by any party to this Agreement against another party to this Agreement
in connection with this Agreement or the other Transaction Documents,  the party
or parties which do not prevail in such  proceedings  shall  severally,  but not
jointly,  pay their pro rata share of the reasonable  attorneys'  fees and other
reasonable  out-of-pocket costs and expenses incurred by the prevailing party in
such proceedings.

                                      -24-
<PAGE>

                   9.6 AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended and the  observance of any term of this  Agreement may be waived (either
generally   or  in  a   particular   instance   and  either   retroactively   or
prospectively),  only with the written consent of the Company and the Investors.
Any amendment or waiver  effected in  accordance  with this  paragraph  shall be
binding upon each holder of any Securities purchased under this Agreement at the
time outstanding, each future holder of all such Securities, and the Company.

                   9.7 PUBLICITY.  Except as set forth below,  no public release
or announcement concerning the transactions  contemplated hereby shall be issued
by the Company or the Investors without the prior consent of the Company (in the
case of a release or  announcement  by the  Investors)  or the Investors (in the
case of a release or  announcement  by the Company) (which consents shall not be
unreasonably  withheld),  except as such release or announcement may be required
by law or the applicable  rules or  regulations  of any  securities  exchange or
securities  market, in which case the Company or the Investors,  as the case may
be,  shall allow the  Investors  or the Company,  as  applicable,  to the extent
reasonably practicable in the circumstances,  reasonable time to comment on such
release or announcement in advance of such issuance. By 8:30 a.m. (New York City
time) on the trading day  immediately  following the Closing  Date,  the Company
shall issue a press release,  reviewed and approved by MDB Capital  Group,  LLC,
disclosing the consummation of the transactions  contemplated by this Agreement.
No later than the third trading day following the Closing Date, the Company will
file a Current  Report on Form 8-K,  reviewed and approved by MDB Capital Group,
LLC,  attaching the press release described in the foregoing sentence as well as
copies of the  Transaction  Documents.  In addition,  the Company will make such
other  filings  and  notices  in the  manner  and  time  required  by  the  SEC.
Notwithstanding the foregoing,  the Company shall not publicly disclose the name
of any Investor,  or include the name of any Investor in any filing with the SEC
(other than the  Registration  Statement  and any  exhibits  to filings  made in
respect of this  transaction  in accordance  with periodic  filing  requirements
under the 1934 Act) or any regulatory agency,  without the prior written consent
of such  Investor,  except to the extent such  disclosure  is required by law or
trading  market  regulations,  in  which  case the  Company  shall  provide  the
Investors with prior notice of such disclosure.

                   9.8  SEVERABILITY.  Any provision of this  Agreement  that is
prohibited or unenforceable in any jurisdiction  shall, as to such jurisdiction,
be ineffective to the extent of such  prohibition  or  unenforceability  without
invalidating the remaining  provisions  hereof but shall be interpreted as if it
were  written  so as to be  enforceable  to  the  maximum  extent  permitted  by
applicable law, and any such prohibition or unenforceability in any jurisdiction
shall  not  invalidate  or  render  unenforceable  such  provision  in any other
jurisdiction.  To the extent  permitted by  applicable  law, the parties  hereby
waive any  provision of law which  renders any  provision  hereof  prohibited or
unenforceable in any respect.

                                      -25-
<PAGE>

                   9.9 ENTIRE AGREEMENT. This Agreement,  including the Exhibits
and the Disclosure Schedules, and the other Transaction Documents constitute the
entire  agreement  among the parties  hereof with respect to the subject  matter
hereof and thereof and supersede all prior agreements and  understandings,  both
oral and written,  between the parties with respect to the subject matter hereof
and thereof.

                   9.10  FURTHER  ASSURANCES.  The  parties  shall  execute  and
deliver  all such  further  instruments  and  documents  and take all such other
actions as may reasonably be required to carry out the transactions contemplated
hereby and to evidence the fulfillment of the agreements herein contained.

                   9.11 GOVERNING LAW; CONSENT TO  JURISDICTION;  WAIVER OF JURY
TRIAL.  This Agreement  shall be governed by, and construed in accordance  with,
the internal  laws of the State of New York without  regard to the choice of law
principles  thereof.  Each of the  parties  hereto  irrevocably  submits  to the
exclusive  jurisdiction  of the  courts of the State of New York  located in New
York County and the United States  District  Court for the Southern  District of
New York for the purpose of any suit, action, proceeding or judgment relating to
or arising  out of this  Agreement  and the  transactions  contemplated  hereby.
Service of process in connection with any such suit, action or proceeding may be
served on each party  hereto  anywhere  in the world by the same  methods as are
specified  for the giving of notices under this  Agreement.  Each of the parties
hereto  irrevocably  consents to the  jurisdiction of any such court in any such
suit,  action or proceeding and to the laying of venue in such court. Each party
hereto irrevocably waives any objection to the laying of venue of any such suit,
action or  proceeding  brought in such courts and  irrevocably  waives any claim
that any such  suit,  action or  proceeding  brought  in any such court has been
brought in an inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO
REQUEST A TRIAL BY JURY IN ANY  LITIGATION  WITH RESPECT TO THIS  AGREEMENT  AND
REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

                   9.12 INDEPENDENT NATURE OF INVESTORS' OBLIGATIONS AND RIGHTS.
The obligations of each Investor under any Transaction  Document are several and
not joint with the obligations of any other  Investor,  and no Investor shall be
responsible  in any way for the  performance  of the  obligations  of any  other
Investor  under any  Transaction  Document.  The  decision  of each  Investor to
purchase Securities pursuant to the Transaction  Documents has been made by such
Investor independently of any other Investor. Nothing contained herein or in any
Transaction  Document,  and no action  taken by any Investor  pursuant  thereto,
shall be deemed to constitute the Investors as a partnership,  an association, a
joint  venture  or any other kind of entity,  or create a  presumption  that the
Investors  are in any way acting in  concert or as a group with  respect to such
obligations or the transactions  contemplated by the Transaction Documents. Each
Investor  acknowledges  that no other  Investor  has  acted  as  agent  for such
Investor in connection with making its investment hereunder and that no Investor
will be acting as agent of such  Investor  in  connection  with  monitoring  its
investment  in the  Securities  or enforcing  its rights  under the  Transaction
Documents.  Each Investor shall be entitled to independently protect and enforce
its  rights,  including,  without  limitation,  the rights  arising  out of this
Agreement  or  out of the  other  Transaction  Documents,  and it  shall  not be
necessary  for any other  Investor  to be joined as an  additional  party in any
proceeding for such purpose. The Company acknowledges that each of the Investors
has been provided with the same Transaction Documents for the purpose of closing
a  transaction  with  multiple  Investors  and not  because it was  required  or
requested to do so by any Investor.

                            [signature page follows]

                                      -26-
<PAGE>

                  IN WITNESS  WHEREOF,  the parties have executed this Agreement
or caused their duly  authorized  officers to execute  this  Agreement as of the
date first above written.

The Company:                                PHARMAFRONTIERS CORP.

                                            By:_________________________

                                            Name:
                                            Title:

                                      -27-
<PAGE>

 INVESTOR:

                                            By:
                                               -------------------------
                                            Name:
                                                  ----------------------
                                            Title:
                                                   ---------------------

Aggregate Purchase Price: $
                  -----------------------------------
Number of Shares:
                  -----------------------------------
Number of Warrants:
                  -----------------------------------

Address for Notice:
                  -----------------------------------

Facsimile:
                  -----------------------------------
Email:
                  -----------------------------------

Optional Provisions:

Section 6.1(j) and 7.10 of the Purchase Agreement

Unless checked here Section  6.1(j) and 7.10 of the Purchase  Agreement will not
be included as a condition to your Closing: [_]

Section 23 of the Warrant

Unless checked below neither  Section 23A nor Section 23B of the Warrant will be
included in your Warrant. You have the option of including either Section 23A or
23B, not both.

If you would like to include Section 23A in your Warrant check here   [_]

If you would like to include Section 23B in your Warrant check here   [_]EXHIBIT 10.2

                          REGISTRATION RIGHTS AGREEMENT

         This  Registration  Rights  Agreement  (the  "Agreement")  is made  and
entered  into as of this  11th day of April,  2006 by and among  PharmaFrontiers
Corp., a Texas  corporation (the "Company"),  and the "Investors"  named in that
certain  Purchase  Agreement  by and among the  Company and the  Investors  (the
"Purchase Agreement").

         The parties hereby agree as follows:

         1. CERTAIN DEFINITIONS.

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

         "AFFILIATE"  means, with respect to any person,  any other person which
directly or indirectly  controls,  is controlled  by, or is under common control
with, such person.

         "BUSINESS DAY" means a day,  other than a Saturday or Sunday,  on which
banks in New York City are open for the general transaction of business.

         "COMMON STOCK" shall mean the Company's  common stock,  par value $0.05
per  share,  and any  securities  into  which such  shares  may  hereinafter  be
reclassified.

         "INVESTORS"  shall  mean  the  Investors  identified  in  the  Purchase
Agreement  and any  Affiliate or permitted  transferee  of any Investor who is a
subsequent holder of any Warrants or Registrable Securities.

         "MDB WARRANT SHARES" means the shares of Common Stock issuable upon the
exercise of the MDB Warrants.

         "MDB WARRANTS" means warrants to purchase shares of Common Stock issued
to MDB  Capital  Group LLC  pursuant to its  engagement  letter with the Company
relating to the  offering of the Common  Stock and the  Warrants as disclosed in
Schedule 4.20 to the Purchase Agreement.

         "OTHER INVESTORS" shall mean, collectively,  the University of Chicago,
Sanders Morris Harris and Snehal Patel.

         "OTHER  SHARES"  shall mean up to an  aggregate  of  529,566  shares of
Common Stock held by the Other Investors.

         "PROSPECTUS" shall mean (i) the prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement, with respect
to the  terms of the  offering  of any  portion  of the  Registrable  Securities
covered  by  such  Registration  Statement  and  by  all  other  amendments  and
supplements  to the  prospectus,  including  post-effective  amendments  and all
material  incorporated  by  reference  in such  prospectus,  and (ii) any  "free
writing prospectus" as defined in Rule 163 under the 1933 Act.

         "REGISTER,"  "REGISTERED"  and  "REGISTRATION"  refer to a registration
made by preparing  and filing a  Registration  Statement or similar  document in
compliance with the 1933 Act (as defined below), and the declaration or ordering
of effectiveness of such Registration Statement or document.

<PAGE>

         "REGISTRABLE  SECURITIES"  shall mean (i) the Shares,  (ii) the Warrant
Shares and (iii) any other  securities  issued or issuable with respect to or in
exchange for Registrable Securities;  provided,  that, a security shall cease to
be a Registrable Security upon (A) sale pursuant to a Registration  Statement or
Rule 144 under the 1933 Act, or (B) such security  becoming eligible for sale by
the Investors pursuant to Rule 144(k).

         "REGISTRATION  STATEMENT" shall mean any registration  statement of the
Company  filed  under  the  1933  Act  that  covers  the  resale  of  any of the
Registrable Securities pursuant to the provisions of this Agreement,  amendments
and  supplements  to  such  Registration  Statement,   including  post-effective
amendments,  all  exhibits and all  material  incorporated  by reference in such
Registration Statement.

         "REQUIRED INVESTORS" means the Investors beneficially owning a majority
of the Shares and the Warrant Shares then constituting Registrable Securities.

         "SEC" means the U.S. Securities and Exchange Commission.
          ---

         "SHARES"  means the  shares  of Common  Stock  issued  pursuant  to the
Purchase Agreement.

         "1933 ACT" means the Securities Act of 1933, as amended,  and the rules
and regulations promulgated thereunder.

         "1934 ACT" means the Securities  Exchange Act of 1934, as amended,  and
the rules and regulations promulgated thereunder.

         "WARRANTS"  means,  the  warrants  to purchase  shares of Common  Stock
issued to the Investors pursuant to the Purchase Agreement, the form of which is
attached to the Purchase Agreement as Exhibit A.

         "WARRANT  SHARES"  means the shares of Common Stock  issuable  upon the
exercise of the Warrants.

         2. REGISTRATION.

                           (a) REGISTRATION STATEMENTS.

                           (i)  Promptly  following  the closing of the purchase
and sale of the securities  contemplated by the Purchase Agreement (the "Closing
Date") but no later than thirty (30) days after the  Closing  Date (the  "Filing
Deadline"),  the Company  shall  prepare and file with the SEC one  Registration
Statement  on Form SB-2 (or, if Form SB-2 is not then  available to the Company,
on  such  form of  registration  statement  as is then  available  to  effect  a
registration for resale of the Registrable  Securities,  subject to the Required
Investors'  consent),  covering the resale of the  Registrable  Securities in an
amount at least equal to the Shares and the Warrant  Shares.  Subject to any SEC
comments,  such  Registration  Statement  shall include the plan of distribution
attached hereto as EXHIBIT A. Such  Registration  Statement also shall cover, to
the extent  allowable  under the 1933 Act and the rules  promulgated  thereunder
(including Rule 416), such  indeterminate  number of additional shares of Common
Stock resulting from stock splits,  stock dividends or similar transactions with
respect to the Registrable  Securities.  Such  Registration  Statement shall not
include any shares of Common  Stock or other  securities  for the account of any
other holder,  other than the MDB Warrant  Shares and the Other Shares,  without
the prior written consent of the Required Investors.  The Registration Statement
(and each amendment or supplement thereto,  and each request for acceleration of
effectiveness  thereof) shall be provided in accordance with Section 3(c) to the
Investors  and  their  counsel  prior to its  filing or other  submission.  If a
Registration Statement covering the Registrable Securities is not filed with the
SEC on or prior to the Filing Deadline,  the Company will make pro rata payments
to each Investor, as liquidated damages and not as a penalty, in an amount equal
to 1.5% of the aggregate amount invested by such Investor for each 30-day period
or pro rata for any portion  thereof  following the Filing Deadline for which no
Registration Statement is filed with respect to the Registrable Securities. Such
payments  shall  constitute the Investors'  exclusive  monetary  remedy for such
events,  but shall not  affect  the right of the  Investors  to seek  injunctive
relief. Such payments shall be made to each Investor in cash.

                                      -2-
<PAGE>

                           (ii) S-3  QUALIFICATION.  Promptly following the date
(the  "Qualification  Date")  upon which the Company  becomes  eligible to use a
registration  statement on Form S-3 to register the  Registrable  Securities for
resale,  but in no event more than thirty (30) days after the Qualification Date
(the "Qualification  Deadline"), the Company shall file a registration statement
on Form S-3 covering the Registrable  Securities (or a post-effective  amendment
on Form S-3 to the registration  statement on Form SB-2) (a "Shelf  Registration
Statement") and shall use  commercially  reasonable  efforts to cause such Shelf
Registration  Statement  to be declared  effective  as  promptly as  practicable
thereafter.   If  a  Shelf  Registration   Statement  covering  the  Registrable
Securities is not filed with the SEC on or prior to the Qualification  Deadline,
the Company will make pro rata payments to each Investor,  as liquidated damages
and not as a penalty, in an amount equal to 1.5% of the aggregate purchase price
paid by such Investor pursuant to the Purchase  Agreement  attributable to those
Registrable Securities that remain unsold at that time for each 30-day period or
pro  rata for any  portion  thereof  following  the  date by  which  such  Shelf
Registration   Statement  should  have  been  filed  for  which  no  such  Shelf
Registration Statement is filed with respect to the Registrable Securities. Such
payments  shall  constitute the Investors'  exclusive  monetary  remedy for such
events,  but shall not  affect  the right of the  Investors  to seek  injunctive
relief. Such payments shall be made to each Investor in cash.

                           (b)  EXPENSES.  The  Company  will  pay all  expenses
associated  with each  registration,  including  filing and printing  fees,  the
Company's  counsel and  accounting  fees and  expenses,  costs  associated  with
clearing the Registrable  Securities for sale under  applicable state securities
laws,  listing fees,  fees and expenses of one counsel to the Investors  (not to
exceed $7,500) and the  Investors'  reasonable  expenses in connection  with the
registration,  but  excluding  discounts,  commissions,  fees  of  underwriters,
selling brokers,  dealer managers or similar securities  industry  professionals
with respect to the Registrable Securities being sold.

                           (c)      EFFECTIVENESS.

                           (i) The  Company  shall use  commercially  reasonable
efforts  to  have  the  Registration  Statement  declared  effective  as soon as
practicable.  Any request for acceleration of the  Registration  Statement shall
seek  effectiveness  at 5:00  p.m.,  New York  time,  or as soon  thereafter  as
practicable  The Company  shall  notify the  Investors by facsimile or e-mail as
promptly as practicable, and in any event, prior to 9:00 a.m., New York time, on
the day after any Registration Statement is declared effective,  shall file with
the SEC under Rule 424 a final Prospectus as promptly as practicable, and in any
event,  prior to 9:00  a.m.,  New York time,  on the day after any  Registration
Statement is declared effective,  and shall advise the Investors in writing that

                                      -3-
<PAGE>

either  (i) it has  complied  with  the  requirements  of Rule 172 or (ii) it is
unable to satisfy the  conditions  of Rule 172 and, as a result,  Investors  are
required to deliver a copy of the  Prospectus  in  connection  with any sales of
Registrable  Securities  (in  which  case,  the  Company  shall  deliver  to the
Investors a copy of the  Prospectus  to be used in  connection  with the sale or
other disposition of the securities  covered thereby).  If (A)(x) a Registration
Statement  covering the Registrable  Securities is not declared effective by the
SEC prior to the earlier of (i) five (5) Business  Days after the SEC shall have
informed the Company that no review of the  Registration  Statement will be made
or that the SEC has no further  comments on the  Registration  Statement or (ii)
the 90th day after the Closing Date (the 120th day after the Closing Date if the
SEC  comments  on  the  Registration  Statement)  or  (y) a  Shelf  Registration
Statement is not declared effective by the SEC within ninety (90) days after the
Qualification  Deadline  (120 days after the  Qualification  Deadline if the SEC
comments  on the Shelf  Registration  Statement),  or (B)  after a  Registration
Statement has been declared  effective by the SEC, sales cannot be made pursuant
to such Registration  Statement for any reason (including  without limitation by
reason of a stop  order,  or the  Company's  failure to update the  Registration
Statement),  but excluding the inability of any Investor to sell the Registrable
Securities  covered  thereby  due to market  conditions  and  except as  excused
pursuant  to  subparagraph  (ii)  below,  then the  Company  will  make pro rata
payments to each  Investor,  as liquidated  damages and not as a penalty,  in an
amount equal to 1.5% of the aggregate  amount invested by such Investor for each
30-day  period or pro rata for any portion  thereof  following the date by which
such Registration  Statement should have been effective (the "Blackout Period").
Such payments shall constitute the Investors' exclusive monetary remedy for such
events,  but shall not  affect  the right of the  Investors  to seek  injunctive
relief.  The amounts  payable as liquidated  damages  pursuant to this paragraph
shall be paid monthly  within  three (3)  Business  Days of the last day of each
month following the commencement of the Blackout Period until the termination of
the Blackout Period. Such payments shall be made to each Investor in cash.

                           (ii)   For not more than twenty (20) consecutive days
or for a total of not more than  forty-five  (45) days in any twelve  (12) month
period, the Company may delay the disclosure of material non-public  information
concerning the Company,  by suspending the use of any Prospectus included in any
registration  contemplated  by this Section  containing  such  information,  the
disclosure  of which  at the  time is not,  in the  good  faith  opinion  of the
Company,  in the best interests of the Company (an "Allowed  Delay");  provided,
that the  Company  shall  promptly  (a) notify the  Investors  in writing of the
existence of (but in no event, without the prior written consent of an Investor,
shall the Company  disclose to such  Investor any of the facts or  circumstances
regarding) material non-public  information giving rise to an Allowed Delay, (b)
advise  the  Investors  in  writing  to cease all sales  under the  Registration
Statement until the end of the Allowed Delay and (c) use commercially reasonable
efforts to terminate an Allowed Delay as promptly as practicable.

                           (d) LIMITATION ON LIQUIDATED DAMAGES. Notwithstanding
the other  provisions of this Section 2, in no event shall the Company be liable
for liquidated  damages in excess of an aggregate of 24% of the aggregate amount
invested by the Investors pursuant to the Purchase Agreement.

                                      -4-
<PAGE>

         3. COMPANY  OBLIGATIONS.  The Company will use commercially  reasonable
efforts to effect the  registration of the Registrable  Securities in accordance
with the terms hereof,  and pursuant  thereto the Company will, as expeditiously
as possible:

                           (a) use commercially reasonable efforts to cause such
Registration  Statement to become  effective at 5:00 p.m.,  New York time, or as
soon thereafter as practicable and to remain continuously effective for a period
that will  terminate  upon the earlier of (i) the date on which all  Registrable
Securities covered by such Registration  Statement as amended from time to time,
have been sold, and (ii) the date on which all Registrable Securities covered by
such   Registration   Statement  may  be  sold  pursuant  to  Rule  144(k)  (the
"Effectiveness   Period")   and  advise  the   Investors  in  writing  when  the
Effectiveness Period has expired;

                           (b) prepare and file with the SEC such amendments and
post-effective  amendments to the  Registration  Statement and the Prospectus as
may  be  necessary  to  keep  the  Registration   Statement  effective  for  the
Effectiveness  Period and to comply with the  provisions of the 1933 Act and the
1934 Act with respect to the  distribution of all of the Registrable  Securities
covered thereby;

                           (c) provide  copies to each Investor  (together  with
its Affiliates) who purchased at least  6,000,000  Shares and permit  Lowenstein
Sandler PC, or such counsel as is  designated by the  Investors,  to review each
Registration  Statement and all amendments and supplements thereto no fewer than
three (3)  Business  Days  prior to their  filing  with the SEC and not file any
document to which such counsel reasonably objects;

                           (d) furnish to the  Investors and their legal counsel
(i) promptly after the same is prepared and publicly distributed, filed with the
SEC, or received by the Company (but not later than two (2) Business  Days after
the filing date,  receipt date or sending date, as the case may be) one (1) copy
of any  Registration  Statement  and any  amendment  thereto,  each  preliminary
prospectus and Prospectus  and each  amendment or supplement  thereto,  and each
letter  written  by or on behalf of the  Company  to the SEC or the staff of the
SEC,  and each item of  correspondence  from the SEC or the staff of the SEC, in
each case relating to such Registration Statement (other than any portion of any
thereof which contains information for which the Company has sought confidential
treatment),  and (ii)  such  number  of  copies  of a  Prospectus,  including  a
preliminary  prospectus,  and all  amendments and  supplements  thereto and such
other  documents as each Investor may reasonably  request in order to facilitate
the  disposition of the Registrable  Securities  owned by such Investor that are
covered by the related Registration Statement;

                           (e)  use  commercially   reasonable  efforts  to  (i)
prevent the issuance of any stop order or other suspension of effectiveness and,
(ii) if such order is issued,  obtain  the  withdrawal  of any such order at the
earliest possible moment;

                                      -5-
<PAGE>

                           (f)  prior  to any  public  offering  of  Registrable
Securities,  use best efforts to (i)  register or qualify or cooperate  with the
Investors and their counsel in connection with the registration or qualification
of such  Registrable  Securities for offer and sale under the securities or blue
sky laws of such  jurisdictions  requested by the  Investors and (ii) do any and
all other acts or things  necessary or advisable to enable the  distribution  in
such  jurisdictions  of the Registrable  Securities  covered by the Registration
STATEMENT;  provided,  however,  that  the  Company  shall  not be  required  in
connection  therewith or as a condition thereto to (i) qualify to do business in
any  jurisdiction  where it would not  otherwise  be required to qualify but for
this Section 3(f), (ii) subject itself to general  taxation in any  jurisdiction
where it would not  otherwise be so subject but for this Section  3(f), or (iii)
file a general consent to service of process in any such jurisdiction;

                           (g) use commercially  reasonable efforts to cause all
Registrable  Securities covered by a Registration Statement to be listed on each
securities  exchange,  interdealer  quotation  system  or other  market on which
similar securities issued by the Company are then listed;

                           (h)  immediately  notify the  Investors,  at any time
prior to the end of the Effectiveness  Period,  upon discovery that, or upon the
happening of any event as a result of which,  the Prospectus  includes an untrue
statement of a material  fact or omits to state any material fact required to be
stated  therein or necessary to make the  statements  therein not  misleading in
light of the circumstances  then existing,  and promptly prepare,  file with the
SEC  and  furnish  to  such  holder  a  supplement  to or an  amendment  of such
Prospectus  as may be  necessary  so that such  Prospectus  shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements  therein not misleading in
light of the circumstances then existing; and

                           (i)  otherwise  use best  efforts to comply  with all
applicable rules and regulations of the SEC under the 1933 Act and the 1934 Act,
including,  without  limitation,  Rule 172 under  the 1933  Act,  file any final
Prospectus, including any supplement or amendment thereof, with the SEC pursuant
to Rule 424 under the 1933 Act,  promptly inform the Investors in writing if, at
any time  during the  Effectiveness  Period,  the  Company  does not satisfy the
conditions  specified in Rule 172 and, as a result  thereof,  the  Investors are
required  to  deliver  a  Prospectus  in  connection  with  any  disposition  of
Registrable  Securities  and  take  such  other  actions  as may  be  reasonably
necessary  to  facilitate  the   registration  of  the  Registrable   Securities
hereunder;  and make  available to its security  holders,  as soon as reasonably
practicable,  but not later than the  Availability  Date (as defined below),  an
earnings statement  covering a period of at least twelve (12) months,  beginning
after  the  effective  date  of  each  Registration  Statement,  which  earnings
statement  shall  satisfy  the  provisions  of  Section  11(a) of the 1933  Act,
including Rule 158  promulgated  thereunder  (for the purpose of this subsection
3(i),  "Availability  Date" means the 45th day  following  the end of the fourth
fiscal quarter that includes the effective date of such Registration  Statement,
except that, if such fourth fiscal  quarter is the last quarter of the Company's
fiscal year, "Availability Date" means the 90th day after the end of such fourth
fiscal quarter).

                           (j) With a view to making  available to the Investors
the  benefits  of Rule  144 (or  its  successor  rule)  and  any  other  rule or
regulation  of the SEC that may at any time permit the  Investors to sell shares
of Common Stock to the public without  registration,  the Company  covenants and
agrees  to:  (i) use its  best  efforts  to make  and  keep  public  information
available,  as those terms are  understood  and  defined in Rule 144,  until the
earlier of (A) six months after such date as all of the  Registrable  Securities
may be resold pursuant to Rule 144(k) or any other rule of similar effect or (B)
such date as all of the Registrable  Securities shall have been resold; (ii) use
its best  efforts to file with the SEC in a timely  manner all reports and other
documents  required of the Company under the 1934 Act; and (iii) furnish to each
Investor upon request, as long as such Investor owns any Registrable Securities,
(A) a written  statement by the Company that it has complied  with the reporting
requirements  of the 1934 Act, (B) a copy of the  Company's  most recent  Annual
Report on Form 10-KSB or  Quarterly  Report on Form  10-QSB,  and (C) such other
information  as may be  reasonably  requested in order to avail such Investor of
any  rule  or  regulation  of the SEC  that  permits  the  selling  of any  such
Registrable Securities without registration.

                                      -6-
<PAGE>

              4. DUE  DILIGENCE  REVIEW;  INFORMATION.  The  Company  shall make
available,  during  normal  business  hours,  for  inspection  and review by the
Investors,  advisors to and representatives of the Investors (who may or may not
be  affiliated  with the  Investors  and who are  reasonably  acceptable  to the
Company),  all financial and other  records,  all SEC Filings (as defined in the
Purchase  Agreement)  and other  filings with the SEC,  and all other  corporate
documents and  properties of the Company as may be reasonably  necessary for the
purpose  of such  review,  and  cause  the  Company's  officers,  directors  and
employees,  within a  reasonable  time  period,  to supply all such  information
reasonably  requested by the  Investors or any such  representative,  advisor or
underwriter in connection with such Registration  Statement (including,  without
limitation,  in response to all questions and other inquiries reasonably made or
submitted  by any of them),  prior to and from time to time after the filing and
effectiveness of the Registration Statement for the sole purpose of enabling the
Investors  and  such  representatives,   advisors  and  underwriters  and  their
respective  accountants  and  attorneys  to  conduct  initial  and  ongoing  due
diligence  with  respect to the  Company and the  accuracy of such  Registration
Statement.

                  The Company shall not disclose material nonpublic  information
to the Investors, or to advisors to or representatives of the Investors,  unless
prior to disclosure of such information the Company  identifies such information
as being  material  nonpublic  information  and  provides  the  Investors,  such
advisors and representatives  with the opportunity to accept or refuse to accept
such  material  nonpublic  information  for review and any  Investor  wishing to
obtain such  information  enters into an appropriate  confidentiality  agreement
with the Company with respect thereto.

         5. OBLIGATIONS OF THE INVESTORS.

                           (a) Each  Investor  shall  furnish  in writing to the
Company such information regarding itself, the Registrable Securities held by it
and the intended method of disposition of the Registrable Securities held by it,
as shall be reasonably  required to effect the  registration of such Registrable
Securities and shall execute such documents in connection with such registration
as the Company may reasonably  request,  including a completed  questionnaire in
the form attached  hereto as EXHIBIT B. At least ten (10) Business Days prior to
the first  anticipated  filing date of any Registration  Statement,  the Company
shall notify each  Investor of the  information  the Company  requires from such
Investor  if such  Investor  elects  to have any of the  Registrable  Securities
included  in  the  Registration   Statement.  An  Investor  shall  provide  such
information  to the  Company at least two (2)  Business  Days prior to the first
anticipated  filing date of such Registration  Statement if such Investor elects
to  have  any  of  the  Registrable  Securities  included  in  the  Registration
Statement.

                                      -7-
<PAGE>

                           (b)  Each   Investor,   by  its   acceptance  of  the
Registrable  Securities  agrees to  cooperate  with the  Company  as  reasonably
requested  by the Company in  connection  with the  preparation  and filing of a
Registration Statement hereunder,  unless such Investor has notified the Company
in writing of its  election to exclude all of its  Registrable  Securities  from
such Registration Statement.

                           (c) Each  Investor  agrees that,  upon receipt of any
notice  from the  Company of either  (i) the  commencement  of an Allowed  Delay
pursuant  to Section  2(c)(ii)  or (ii) the  happening  of an event  pursuant to
Section 3(h) hereof, such Investor will immediately  discontinue  disposition of
Registrable  Securities  pursuant to the  Registration  Statement  covering such
Registrable  Securities,  until the Investor is advised by the Company that such
dispositions may again be made.

         6. INDEMNIFICATION.

                           (a) INDEMNIFICATION BY THE COMPANY.  The Company will
indemnify and hold harmless each Investor and its officers,  directors, members,
employees and agents, successors and assigns, and each other person, if any, who
controls such Investor  within the meaning of the 1933 Act,  against any losses,
claims,  damages  or  liabilities,  joint or  several,  to which they may become
subject under the 1933 Act or otherwise, insofar as such losses, claims, damages
or liabilities  (or actions in respect  thereof) arise out of or are based upon:
(i) any untrue  statement  or alleged  untrue  statement  of any  material  fact
contained in any  Registration  Statement,  any preliminary  Prospectus or final
Prospectus,   or  any  amendment  or  supplement  thereof;  (ii)  any  blue  sky
application  or other  document  executed by the Company  specifically  for that
purpose or based upon written information  furnished by the Company filed in any
state or other  jurisdiction  in order to qualify any or all of the  Registrable
Securities under the securities laws thereof (any such application,  document or
information  herein  called a "Blue Sky  Application");  (iii) the  omission  or
alleged  omission to state therein a material fact required to be stated therein
or necessary to make the statements  therein not misleading;  (iv) any violation
by the  Company or its agents of any rule or  regulation  promulgated  under the
1933 Act  applicable  to the  Company or its agents  and  relating  to action or
inaction  required of the Company in connection with such  registration;  or (v)
any failure to register or qualify the  Registrable  Securities  included in any
such Registration in any state where the Company or its agents has affirmatively
undertaken  or  agreed  in  writing  that  the  Company  will   undertake   such
registration or  qualification  on an Investor's  behalf and will reimburse such
Investor,  and each such officer,  director or member and each such  controlling
person for any legal or other expenses reasonably incurred by them in connection
with  investigating  or defending  any such loss,  claim,  damage,  liability or
action; PROVIDED,  HOWEVER, that the Company will not be liable in any such case
if and to the extent that any such loss,  claim,  damage or liability arises out
of or is based upon an untrue  statement or alleged untrue statement or omission
or alleged  omission so made in conformity  with  information  furnished by such
Investor or any such controlling person in writing  specifically for use in such
Registration Statement or Prospectus.

                           (b)  INDEMNIFICATION BY THE INVESTORS.  Each Investor
agrees,  severally  but not jointly,  to  indemnify  and hold  harmless,  to the
fullest  extent  permitted  by  law,  the  Company,  its  directors,   officers,
employees,  stockholders  and each person who controls  the Company  (within the
meaning of the 1933 Act) against any losses,  claims,  damages,  liabilities and
expense (including reasonable attorney fees) resulting from any untrue statement
of a material  fact or any omission of a material  fact required to be stated in
the Registration  Statement or Prospectus or preliminary Prospectus or amendment
or  supplement   thereto  or  necessary  to  make  the  statements  therein  not
misleading,  to the extent, but only to the extent that such untrue statement or
omission is contained in any  information  furnished in writing by such Investor
to the Company  specifically  for  inclusion in such  Registration  Statement or
Prospectus or amendment or supplement  thereto.  In no event shall the liability
of an Investor be greater in amount than the dollar  amount of the proceeds (net
of all expense paid by such  Investor in connection  with any claim  relating to
this Section 6 and the amount of any damages such  Investor has  otherwise  been
required to pay by reason of such untrue statement or omission) received by such
Investor  upon  the  sale  of  the  Registrable   Securities   included  in  the
Registration Statement giving rise to such indemnification obligation.

                                      -8-
<PAGE>

                           (c)  CONDUCT  OF  INDEMNIFICATION   PROCEEDINGS.  Any
person entitled to indemnification hereunder shall (i) give prompt notice to the
indemnifying  party of any claim with respect to which it seeks  indemnification
and (ii) permit such indemnifying party to assume the defense of such claim with
counsel  reasonably  satisfactory  to the indemnified  party;  PROVIDED that any
person  entitled  to  indemnification  hereunder  shall have the right to employ
separate  counsel and to participate in the defense of such claim,  but the fees
and expenses of such counsel  shall be at the expense of such person  unless (a)
the  indemnifying  party has  agreed to pay such  fees or  expenses,  or (b) the
indemnifying  party  shall have  failed to assume the  defense of such claim and
employ counsel  reasonably  satisfactory to such person or (c) in the reasonable
judgment  of any such  person,  based  upon  written  advice of its  counsel,  a
conflict of interest exists between such person and the indemnifying  party with
respect to such claims (in which case, if the person  notifies the  indemnifying
party in  writing  that such  person  elects to employ  separate  counsel at the
expense of the indemnifying  party,  the  indemnifying  party shall not have the
right to  assume  the  defense  of such  claim on behalf  of such  person);  and
PROVIDED,  FURTHER,  that the failure of any indemnified party to give notice as
provided  herein  shall not relieve the  indemnifying  party of its  obligations
hereunder,  except  to the  extent  that  such  failure  to  give  notice  shall
materially  adversely affect the  indemnifying  party in the defense of any such
claim or litigation.  It is understood that the indemnifying party shall not, in
connection with any proceeding in the same  jurisdiction,  be liable for fees or
expenses of more than one  separate  firm of  attorneys at any time for all such
indemnified  parties. No indemnifying party will, except with the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
that  does not  include  as an  unconditional  term  thereof  the  giving by the
claimant or plaintiff to such indemnified  party of a release from all liability
in respect of such claim or litigation.

                           (d)    CONTRIBUTION.    If   for   any   reason   the
indemnification  provided  for  in  the  preceding  paragraphs  (a)  and  (b) is
unavailable to an indemnified  party or insufficient to hold it harmless,  other
than  as  expressly  specified  therein,   then  the  indemnifying  party  shall
contribute to the amount paid or payable by the indemnified party as a result of
such loss,  claim,  damage or liability in such  proportion as is appropriate to
reflect the relative fault of the indemnified party and the indemnifying  party,
as well as any other  relevant  equitable  considerations.  No person  guilty of
fraudulent misrepresentation within the meaning of Section 11(f) of the 1933 Act
shall be entitled to contribution  from any person not guilty of such fraudulent
misrepresentation.  In no event shall the contribution obligation of a holder of
Registrable  Securities  be  greater  in amount  than the  dollar  amount of the
proceeds (net of all expenses  paid by such holder in connection  with any claim
relating  to this  Section  6 and the  amount of any  damages  such  holder  has
otherwise  been  required  to pay by reason of such  untrue  or  alleged  untrue
statement or omission or alleged  omission)  received by it upon the sale of the
Registrable Securities giving rise to such contribution obligation.

                                      -9-
<PAGE>

         7. MISCELLANEOUS.

                           (a)  AMENDMENTS  AND WAIVERS.  This  Agreement may be
amended only by a writing signed by the Company and the Required Investors.  The
Company may take any action herein prohibited, or omit to perform any act herein
required to be  performed  by it, only if the Company  shall have  obtained  the
written  consent to such  amendment,  action or omission to act, of the Required
Investors.

                           (b)  NOTICES.  All notices  and other  communications
provided for or permitted hereunder shall be made as set forth in Section 9.4 of
the Purchase Agreement.

                           (c)  ASSIGNMENTS  AND  TRANSFERS  BY  INVESTORS.  The
provisions of this  Agreement  shall be binding upon and inure to the benefit of
the  Investors  and their  respective  successors  and assigns.  An Investor may
transfer  or  assign,  in  whole or from  time to time in  part,  to one or more
persons its rights  hereunder in  connection  with the  transfer of  Registrable
Securities by such Investor to such person, provided that such Investor complies
with all laws  applicable  thereto and provides  written notice of assignment to
the Company promptly after such assignment is effected.

                           (d)  ASSIGNMENTS  AND TRANSFERS BY THE COMPANY.  This
Agreement  may not be assigned by the Company  (whether by  operation  of law or
otherwise)  without  the  prior  written  consent  of  the  Required  Investors,
provided,  however,  that the  Company  may assign its rights and  delegate  its
duties hereunder to any surviving or successor  corporation in connection with a
merger or  consolidation  of the Company  with another  corporation,  or a sale,
transfer  or other  disposition  of all or  substantially  all of the  Company's
assets to another corporation, without the prior written consent of the Required
Investors, after notice duly given by the Company to each Investor.

                           (e)  BENEFITS  OF  THE   AGREEMENT.   The  terms  and
conditions of this  Agreement  shall inure to the benefit of and be binding upon
the respective permitted successors and assigns of the parties.  Nothing in this
Agreement,  express or implied,  is intended to confer upon any party other than
the  parties  hereto or their  respective  successors  and  assigns  any rights,
remedies,  obligations,  or  liabilities  under or by reason of this  Agreement,
except as expressly provided in this Agreement.

                           (f)  COUNTERPARTS;   FAXES.  This  Agreement  may  be
executed in two or more counterparts, each of which shall be deemed an original,
but all of which together shall  constitute  one and the same  instrument.  This
Agreement may also be executed via facsimile, which shall be deemed an original.

                                      -10-
<PAGE>

                           (g) TITLES AND  SUBTITLES.  The titles and  subtitles
used  in  this  Agreement  are  used  for  convenience  only  and  are not to be
considered in construing or interpreting this Agreement.

                           (h)  SEVERABILITY.  Any  provision of this  Agreement
that is  prohibited  or  unenforceable  in any  jurisdiction  shall,  as to such
jurisdiction,   be   ineffective   to  the   extent  of  such   prohibition   or
unenforceability  without invalidating the remaining provisions hereof but shall
be  interpreted  as if it were  written so as to be  enforceable  to the maximum
extent permitted by applicable law, and any such prohibition or unenforceability
in any jurisdiction shall not invalidate or render  unenforceable such provision
in any other  jurisdiction.  To the extent  permitted  by  applicable  law,  the
parties  hereby waive any provision of law which renders any  provisions  hereof
prohibited or unenforceable in any respect.

                           (i) FURTHER ASSURANCES. The parties shall execute and
deliver  all such  further  instruments  and  documents  and take all such other
actions as may reasonably be required to carry out the transactions contemplated
hereby and to evidence the fulfillment of the agreements herein contained.

                           (j) ENTIRE  AGREEMENT.  This Agreement is intended by
the  parties as a final  expression  of their  agreement  and  intended  to be a
complete and  exclusive  statement of the  agreement  and  understanding  of the
parties hereto in respect of the subject matter contained herein. This Agreement
supersedes  all prior  agreements  and  understandings  between the parties with
respect to such subject matter.

                           (k) GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF
JURY TRIAL.  This  Agreement  shall be governed by, and  construed in accordance
with, the internal laws of the State of New York without regard to the choice of
law principles  thereof.  Each of the parties hereto irrevocably  submits to the
exclusive  jurisdiction  of the  courts of the State of New York  located in New
York County and the United States  District  Court for the Southern  District of
New York for the purpose of any suit, action, proceeding or judgment relating to
or arising  out of this  Agreement  and the  transactions  contemplated  hereby.
Service of process in connection with any such suit, action or proceeding may be
served on each party  hereto  anywhere  in the world by the same  methods as are
specified  for the giving of notices under this  Agreement.  Each of the parties
hereto  irrevocably  consents to the  jurisdiction of any such court in any such
suit,  action or proceeding and to the laying of venue in such court. Each party
hereto irrevocably waives any objection to the laying of venue of any such suit,
action or  proceeding  brought in such courts and  irrevocably  waives any claim
that any such  suit,  action or  proceeding  brought  in any such court has been
brought in an inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO
REQUEST A TRIAL BY JURY IN ANY  LITIGATION  WITH RESPECT TO THIS  AGREEMENT  AND
REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

                                      -11-
<PAGE>

                  IN WITNESS  WHEREOF,  the parties have executed this Agreement
or caused their duly  authorized  officers to execute  this  Agreement as of the
date first above written.

The Company:                                PHARMAFRONTIERS CORP.

                                            By:_________________________

                                            Name:
                                            Title:

                                      -12-
<PAGE>

                                            Investor:
                                            ----------------------------------

                                            By:
                                               -------------------------------
                                            Name:
                                                  ----------------------------
                                            Title:
                                                   ---------------------------

                                      -13-

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