AMENDED AND RESTATED STANDBY EQUITY DISTRIBUTION AGREEMENT

                              AMENDED AND RESTATED

                      STANDBY EQUITY DISTRIBUTION AGREEMENT

THIS AMENDED AND RESTATED STANDBY EQUITY DISTRIBUTION  AGREEMENT dated as of the
3rd day of February 2006 (the "Agreement") between CORNELL CAPITAL PARTNERS, LP,
a Delaware limited partnership (the "Investor"), and HEALTHRENU MEDICAL, INC., a
corporation  organized  and existing  under the laws of the State of Nevada (the
"Company").

      WHEREAS,  on May 23, 2005,  the parties  hereto  entered into the original
Standby Equity  Distribution  Agreement.  The parties desire that this Agreement
amend and restate the original Standby Equity Distribution Agreement.

      WHEREAS,  the  parties  desire  that,  upon the terms and  subject  to the
conditions  contained herein,  the Company shall issue and sell to the Investor,
from time to time as provided  herein,  and the Investor shall purchase from the
Company up to Ten Million Dollars  ($10,000,000)  of the Company's common stock,
par value $0.001 per share (the "Common Stock"); and

      WHEREAS,  such investments will be made in reliance upon the provisions of
Regulation D ("Regulation D") of the Securities Act of 1933, as amended, and the
regulations  promulgated  thereunder (the  "Securities  Act"),  and or upon such
other exemption from the registration  requirements of the Securities Act as may
be available with respect to any or all of the investments to be made hereunder.

      WHEREAS,  the Company has engaged  Monitor  Capital,  Inc. (the "Placement
Agent"),  to act as the Company's  exclusive  placement agent in connection with
the sale of the Company's Common Stock to the Investor hereunder pursuant to the
Placement  Agent  Agreement  dated May 23,  2005 by and among the  Company,  the
Placement Agent and the Investor (the "Placement Agent Agreement").

      NOW, THEREFORE, the parties hereto agree as follows:

                                   ARTICLE I.
                               Certain Definitions

      Section 1.1.  "Advance"  shall mean the portion of the  Commitment  Amount
requested by the Company in the Advance Notice.

      Section 1.2.  "Advance  Date" shall mean the first (1st) Trading Day after
expiration of the applicable Pricing Period for each Advance.

      Section 1.3.  "Advance  Notice" shall mean a written notice in the form of
Exhibit A attached hereto to the Investor  executed by an officer of the Company
and setting forth the Advance amount that the Company requests from the Investor
and the Advance Date.
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      Section  1.4.  "Advance  Notice  Date"  shall  mean each date the  Company
delivers to the  Investor an Advance  Notice  requiring  the Investor to advance
funds to the Company,  subject to the terms of this Agreement. No Advance Notice
Date shall be less than five (5)  Trading  Days after the prior  Advance  Notice
Date.

      Section 1.5.  "Bid Price" shall mean,  on any date,  the closing bid price
(as reported by Bloomberg  L.P.) of the Common Stock on the Principal  Market or
if the Common Stock is not traded on a Principal  Market,  the highest  reported
bid price for the Common  Stock,  as furnished by the  National  Association  of
Securities Dealers, Inc.

      Section  1.6.  "Closing"  shall mean one of the closings of a purchase and
sale of Common Stock pursuant to Section 2.3.

      Section 1.7.  "Commitment Amount" shall mean the aggregate amount of up to
Ten Million  Dollars  ($10,000,000)  which the Investor has agreed to provide to
the Company in order to purchase  the  Company's  Common  Stock  pursuant to the
terms and conditions of this Agreement.

      Section 1.8.  "Commitment  Period" shall mean the period commencing on the
earlier to occur of (i) the  Effective  Date,  or (ii) such  earlier date as the
Company and the  Investor  may  mutually  agree in writing,  and expiring on the
earliest to occur of (x) the date on which the Investor  shall have made payment
of Advances  pursuant to this  Agreement in the aggregate  amount of Ten Million
Dollars  ($10,000,000),  (y) the date this  Agreement is terminated  pursuant to
Section  2.4,  or (z) the date  occurring  twenty-four  (24)  months  after  the
Effective Date.

      Section 1.9.  "Common  Stock" shall mean the Company's  common stock,  par
value $0.001 per share.

      Section  1.10.  "Condition  Satisfaction  Date" shall have the meaning set
forth in Section 7.2.

      Section 1.11.  "Damages" shall mean any loss,  claim,  damage,  liability,
costs and expenses (including,  without limitation,  reasonable  attorney's fees
and disbursements and costs and expenses of expert witnesses and investigation).

      Section 1.12.  "Effective Date" shall mean the date on which the SEC first
declares  effective  a  Registration  Statement  registering  the  resale of the
Registrable Securities as set forth in Section 7.2(a).

      Section 1.13. Intentionally Omitted.

      Section 1.14.  "Exchange  Act" shall mean the  Securities  Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.

      Section  1.15.   "Material  Adverse  Effect"  shall  mean  any  condition,
circumstance, or situation that would prohibit or otherwise materially interfere
with the ability of the Company to enter into and perform any of its obligations
under this  Agreement  or the  Registration  Rights  Agreement  in any  material
respect.


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      Section  1.16.  "Market  Price"  shall mean the lowest  VWAP of the Common
Stock during the Pricing Period.

      Section  1.17.  "Maximum  Advance  Amount"  shall be Three  Hundred  Fifty
Thousand Dollars ($350,000) per Advance Notice.

      Section  1.18.  "NASD" shall mean the National  Association  of Securities
Dealers, Inc.

      Section  1.19.  "Person"  shall  mean  an  individual,  a  corporation,  a
partnership, an association, a trust or other entity or organization,  including
a government or political subdivision or an agency or instrumentality thereof.

      Section  1.20.  "Placement  Agent"  shall mean  Monitor  Capital,  Inc., a
registered broker-dealer.

      Section 1.21. "Pricing Period" shall mean the five (5) consecutive Trading
Days after the Advance Notice Date.

      Section 1.22.  "Principal  Market" shall mean the Nasdaq National  Market,
the Nasdaq SmallCap Market, the American Stock Exchange,  the OTC Bulletin Board
or the New York Stock Exchange,  whichever is at the time the principal  trading
exchange or market for the Common Stock.

      Section 1.23.  "Purchase Price" shall be set at ninety seven percent (97%)
of the Market Price during the Pricing Period.

      Section  1.24.  "Registrable  Securities"  shall mean the shares of Common
Stock to be issued hereunder in respect of which the Registration  Statement has
not been declared effective by the SEC.

      Section 1.25.  "Registration Rights Agreement" shall mean the Registration
Rights  Agreement dated May 23, 2005,  regarding the filing of the  Registration
Statement for the resale of the Registrable Securities, entered into between the
Company and the Investor.

      Section 1.26. "Registration Statement" shall mean a registration statement
on Form  S-1 or  SB-2  (if use of such  form is then  available  to the  Company
pursuant to the rules of the SEC and, if not, on such other form  promulgated by
the SEC for which the Company then  qualifies  and which counsel for the Company
shall deem appropriate,  and which form shall be available for the resale of the
Registrable  Securities  to be  registered  thereunder  in  accordance  with the
provisions  of this  Agreement and the  Registration  Rights  Agreement,  and in
accordance with the intended method of distribution of such securities), for the
registration of the resale by the Investor of the Registrable  Securities  under
the Securities Act.

      Section  1.27.  "Regulation  D" shall  have the  meaning  set forth in the
recitals of this Agreement.

      Section 1.28. "SEC" shall mean the Securities and Exchange Commission.


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<PAGE>

      Section  1.29.  "Securities  Act" shall have the  meaning set forth in the
recitals of this Agreement.

      Section 1.30.  "SEC  Documents"  shall mean Annual Reports on Form 10-KSB,
Quarterly  Reports  on  Form  10-QSB,  Current  Reports  on Form  8-K and  Proxy
Statements of the Company as supplemented to May 23, 2005,  filed by the Company
for a period of at least twelve (12) months  immediately  preceding May 23, 2005
or the  Advance  Date,  as the case may be,  until  such time as the  Company no
longer  has an  obligation  to  maintain  the  effectiveness  of a  Registration
Statement as set forth in the Registration Rights Agreement.

      Section  1.31.  "Trading Day" shall mean any day during which the New York
Stock Exchange shall be open for business.

      Section 1.32.  "VWAP" shall mean the volume weighted  average price of the
Company's Common Stock as quoted by Bloomberg, LP.

                                   ARTICLE II.
                                    Advances

      Section 2.1. Advances.

            Upon the terms and conditions set forth herein  (including,  without
limitation,  the  provisions of Article VII hereof),  the Company may request an
Advance by the  Investor  by the  delivery of an Advance  Notice.  The number of
shares of Common Stock that the Investor shall purchase pursuant to each Advance
shall be determined by dividing the amount of the Advance by the Purchase Price.
No fractional shares shall be issued.  Fractional shares shall be rounded to the
next higher whole number of shares. The aggregate maximum amount of all Advances
that the  Investor  shall be obligated  to make under this  Agreement  shall not
exceed the Commitment Amount.

      Section 2.2. Mechanics.

            (a) Advance Notice.  At any time during the Commitment  Period,  the
Company may deliver an Advance Notice to the Investor, subject to the conditions
set forth in Section  7.2;  provided,  however,  the amount for each  Advance as
designated by the Company in the applicable  Advance  Notice,  shall not be more
than the Maximum Advance Amount.  The aggregate amount of the Advances  pursuant
to  this  Agreement  shall  not  exceed  the  Commitment   Amount.  The  Company
acknowledges  that the  Investor may sell shares of the  Company's  Common Stock
corresponding  with a  particular  Advance  Notice  after the Advance  Notice is
received by the  Investor.  There  shall be a minimum of five (5)  Trading  Days
between each Advance Notice Date.

            (b) Date of Delivery of Advance  Notice.  An Advance Notice shall be
deemed delivered on (i) the Trading Day it is received by facsimile or otherwise
by the Investor if such notice is received  prior to 12:00 noon Eastern Time, or
(ii) the  immediately  succeeding  Trading Day if it is received by facsimile or
otherwise after 12:00 noon Eastern Time on a Trading Day or at any time on a day
which is not a Trading Day. No Advance  Notice may be deemed  delivered on a day
that is not a Trading Day.


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<PAGE>

      Section 2.3. Closings.  On each Advance Date (i) the Company shall deliver
to the Investor such number of shares of the Common Stock registered in the name
of the  Investor as shall equal (x) the amount of the Advance  specified in such
Advance Notice pursuant to Section 2.1 herein, divided by (y) the Purchase Price
and (ii) upon receipt of such shares,  the Investor shall deliver to the Company
the amount of the Advance  specified in the Advance  Notice by wire  transfer of
immediately  available funds. In addition, on or prior to the Advance Date, each
of the  Company  and the  Investor  shall  deliver  to the other all  documents,
instruments and writings  required to be delivered by either of them pursuant to
this  Agreement in order to implement and effect the  transactions  contemplated
herein.  To the  extent  the  Company  has not  paid  the  fees,  expenses,  and
disbursements  of the Investor in accordance with Section 12.4, or the Company's
counsel  fees,  the  amount of such fees,  expenses,  and  disbursements  may be
deducted by the Investor (and shall be paid to the relevant  party) directly out
of the  proceeds of the Advance with no reduction in the amount of shares of the
Company's Common Stock to be delivered on such Advance Date.

      Section 2.4. Termination of Investment.  The obligation of the Investor to
make an  Advance to the  Company  pursuant  to this  Agreement  shall  terminate
permanently  (including  with  respect  to an  Advance  Date  that  has  not yet
occurred)  in the event that (i) there shall occur any stop order or  suspension
of the  effectiveness  of the  Registration  Statement for an aggregate of fifty
(50)  Trading  Days,  other  than due to the acts of the  Investor,  during  the
Commitment  Period,  and (ii) the Company  shall at any time fail  materially to
comply with the  requirements of Article VI and such failure is not cured within
thirty (30) days after receipt of written  notice from the  Investor,  provided,
however,  that  this  termination  provision  shall  not  apply  to  any  period
commencing upon the filing of a  post-effective  amendment to such  Registration
Statement  and ending upon the date on which such post  effective  amendment  is
declared effective by the SEC.

      Section 2.5.  Agreement to Advance Funds.  The Investor  agrees to advance
the amount  specified in the Advance  Notice to the Company after the completion
of each of the following  conditions and the other  conditions set forth in this
Agreement:

            (a) the execution and delivery by the Company, and the Investor,  of
this Agreement and the Exhibits hereto;

            (b) the  Investor  shall have  received  the shares of Common  Stock
applicable to the Advance in  accordance  with Section 2.3. Such shares shall be
free of restrictive legends;

            (c) the Company's  Registration Statement with respect to the resale
of the Registrable  Securities in accordance with the terms of the  Registration
Rights Agreement shall have been declared effective by the SEC;

            (d) the  Company  shall  have  obtained  all  material  permits  and
qualifications  required by any  applicable  state for the offer and sale of the
Registrable Securities,  or shall have the availability of exemptions therefrom.
The sale and issuance of the Registrable  Securities shall be legally  permitted
by all laws and regulations to which the Company is subject;

            (e) the  Company  shall have filed with the  Commission  in a timely
manner  all  reports,  notices  and other  documents  required  of a  "reporting
company" under the Exchange Act and applicable Commission regulations;


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<PAGE>

            (f) the fees as set forth in Section 12.4 below shall have been paid
or can be withheld as provided in Section 2.3; and

            (g) the  conditions  set  forth  in  Section  7.2  shall  have  been
satisfied;

            (h)  the   Company   shall  have   provided   to  the   Investor  an
acknowledgement,  from Ham, Langston & Brezina, LLP as to its ability to provide
all consents  required in order to file a  registration  statement in connection
with this transaction; and

            (i) The Company's transfer agent shall be DWAC eligible.

      Section 2.6. Lock Up Period. On the date hereof,  the Company shall obtain
from each officer and director a lock-up  agreement,  as defined  below,  in the
form annexed hereto as Schedule 2.6 agreeing to only sell in compliance with the
volume limitation of Rule 144.

      Section  2.7.  Hardship.  In the event the  Investor  sells  shares of the
Company's  Common Stock after receipt of an Advance Notice and the Company fails
to perform its  obligations  as mandated in Section  2.3, and  specifically  the
Company  fails to  deliver to the  Investor  on the  Advance  Date the shares of
Common Stock corresponding to the applicable Advance,  the Company  acknowledges
that the Investor shall suffer financial  hardship and therefore shall be liable
for any and all losses,  commissions,  fees, or financial hardship caused to the
Investor.

                                  ARTICLE III.
                   Representations and Warranties of Investor

      Investor  hereby  represents and warrants to, and agrees with, the Company
that the following are true and as of May 23, 2005 and as of each Advance Date:

      Section  3.1.  Organization  and  Authorization.   The  Investor  is  duly
incorporated  or  organized  and  validly  existing in the  jurisdiction  of its
incorporation  or  organization  and has all  requisite  power and  authority to
purchase and hold the securities issuable hereunder.  The decision to invest and
the execution and delivery of this Agreement by such Investor,  the  performance
by such  Investor of its  obligations  hereunder  and the  consummation  by such
Investor of the transactions  contemplated  hereby have been duly authorized and
requires no other  proceedings on the part of the Investor.  The undersigned has
the right,  power and  authority to execute and deliver this  Agreement  and all
other  instruments  (including,  without  limitations,  the Registration  Rights
Agreement), on behalf of the Investor. This Agreement has been duly executed and
delivered by the Investor and,  assuming the  execution and delivery  hereof and
acceptance thereof by the Company,  will constitute the legal, valid and binding
obligations of the Investor, enforceable against the Investor in accordance with
its terms.

      Section 3.2.  Evaluation  of Risks.  The Investor has such  knowledge  and
experience in financial tax and business  matters as to be capable of evaluating
the  merits  and risks of,  and  bearing  the  economic  risks  entailed  by, an
investment  in the Company and of protecting  its  interests in connection  with
this  transaction.  It recognizes that its investment in the Company  involves a
high degree of risk.


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<PAGE>

      Section 3.3. No Legal Advice From the Company.  The Investor  acknowledges
that it had the  opportunity  to  review  this  Agreement  and the  transactions
contemplated  by this Agreement with his or its own legal counsel and investment
and tax  advisors.  The Investor is relying  solely on such counsel and advisors
and  not on any  statements  or  representations  of the  Company  or any of its
representatives  or agents for legal,  tax or investment  advice with respect to
this  investment,  the  transactions  contemplated  by  this  Agreement  or  the
securities laws of any jurisdiction.

      Section 3.4. Investment Purpose. The securities are being purchased by the
Investor for its own account,  and for investment  purposes and without any view
to the  distribution,  assignment  or resale to others or  fractionalization  in
whole or in part.  The Investor  agrees not to assign or in any way transfer the
Investor's  rights to the  securities or any interest  therein and  acknowledges
that the Company will not recognize any purported  assignment or transfer except
in accordance with applicable Federal and state securities laws. No other person
has or will have a direct or indirect beneficial interest in the securities. The
Investor  agrees not to sell,  hypothecate or otherwise  transfer the Investor's
securities  unless the securities  are  registered  under Federal and applicable
state securities laws or unless,  in the opinion of counsel  satisfactory to the
Company, an exemption from such laws is available.

      Section 3.5. Accredited Investor. The Investor is an "Accredited Investor"
as that term is defined in Rule 501(a)(3) of Regulation D of the Securities Act.

      Section 3.6. Information. The Investor and its advisors (and its counsel),
if any,  have  been  furnished  with all  materials  relating  to the  business,
finances and  operations of the Company and  information  it deemed  material to
making an informed investment decision.  The Investor and its advisors,  if any,
have been  afforded  the  opportunity  to ask  questions  of the Company and its
management.  Neither such  inquiries nor any other due diligence  investigations
conducted by such Investor or its advisors, if any, or its representatives shall
modify,  amend  or  affect  the  Investor's  right  to  rely  on  the  Company's
representations  and  warranties  contained  in  this  Agreement.  The  Investor
understands that its investment  involves a high degree of risk. The Investor is
in a position  regarding  the  Company,  which,  based upon  employment,  family
relationship or economic bargaining power,  enabled and enables such Investor to
obtain information from the Company in order to evaluate the merits and risks of
this investment. The Investor has sought such accounting,  legal and tax advice,
as it has  considered  necessary to make an informed  investment  decision  with
respect to this transaction.

      Section  3.7.  Receipt of  Documents.  The  Investor  and its counsel have
received and read in their entirety: (i) this Agreement and the Exhibits annexed
hereto;  (ii) all due  diligence and other  information  necessary to verify the
accuracy and  completeness  of such  representations,  warranties and covenants;
(iii) the  Company's  Form 10-KSB for the year ended  September  30, 2004,  Form
10-QSB for the period  ended  December  31,  2004 and Form 10-QSB for the period
ended March 31, 2005;  and (iv) answers to all questions the Investor  submitted
to the Company  regarding an  investment  in the  Company;  and the Investor has
relied on the information contained therein and has not been furnished any other
documents, literature, memorandum or prospectus.


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<PAGE>

      Section 3.8. Registration Rights Agreement.  The parties have entered into
the Registration Rights Agreement dated May 23, 2005.

      Section 3.9. No General Solicitation.  Neither the Company, nor any of its
affiliates,  nor any person  acting on its or their  behalf,  has engaged in any
form of general  solicitation  or general  advertising  (within  the  meaning of
Regulation D under the Securities  Act) in connection  with the offer or sale of
the shares of Common Stock offered hereby.

      Section 3.10. Not an Affiliate.  The Investor is not an officer,  director
or a person that  directly,  or indirectly  through one or more  intermediaries,
controls or is controlled by, or is under common control with the Company or any
"Affiliate"  of the  Company  (as  that  term  is  defined  in  Rule  405 of the
Securities Act).

      Section 3.11. Trading  Activities.  The Investor's trading activities with
respect to the Company's Common Stock shall be in compliance with all applicable
federal  and state  securities  laws,  rules and  regulations  and the rules and
regulations  of the  Principal  Market on which the  Company's  Common  Stock is
listed or traded.  Neither the  Investor  nor its  affiliates  has an open short
position in the Common Stock of the Company,  the Investor  agrees that it shall
not, and that it will cause its  affiliates not to, engage in any short sales of
or hedging  transactions  with respect to the Common  Stock,  provided  that the
Company  acknowledges  and agrees  that upon  receipt  of an Advance  Notice the
Investor has the right to sell the shares to be issued to the Investor  pursuant
to the Advance Notice during the applicable Pricing Period.

                                   ARTICLE IV.
                  Representations and Warranties of the Company

      Except as stated below, on the disclosure  schedules  attached hereto (the
"Disclosure Schedules") or in the SEC Documents (as defined herein), the Company
hereby  represents  and warrants to, and covenants  with,  the Investor that the
following are true and correct as of May 23, 2005:

      Section  4.1.   Organization  and  Qualification.   The  Company  is  duly
incorporated  or  organized  and  validly  existing in the  jurisdiction  of its
incorporation or organization  and has all requisite  corporate power to own its
properties  and to carry on its  business  as now being  conducted.  Each of the
Company and its  subsidiaries  is duly qualified as a foreign  corporation to do
business and is in good  standing in every  jurisdiction  in which the nature of
the business conducted by it makes such qualification  necessary,  except to the
extent that the failure to be so qualified or be in good standing would not have
a Material Adverse Effect on the Company and its subsidiaries taken as a whole.

      Section   4.2.   Authorization,   Enforcement,   Compliance   with   Other
Instruments.  (i) The Company has the requisite corporate power and authority to
enter into and perform this Agreement,  the Registration  Rights Agreement,  the
Placement  Agent  Agreement and any related  agreements,  in accordance with the
terms hereof and thereof, (ii) the execution and delivery of this Agreement, the
Registration  Rights  Agreement,  the Placement  Agent Agreement and any related
agreements  by the  Company  and  the  consummation  by it of  the  transactions
contemplated  hereby and thereby,  have been duly  authorized  by the  Company's
Board of Directors and no further  consent or  authorization  is required by the
Company, its Board of Directors or its stockholders,  (iii) this Agreement,  the
Registration  Rights  Agreement,  the Placement  Agent Agreement and any related
agreements  have been duly  executed and  delivered  by the  Company,  (iv) this
Agreement,  the Registration Rights Agreement, the Placement Agent Agreement and
any related  agreements  and assuming  the  execution  and delivery  thereof and
acceptance by the Investor  constitute the valid and binding  obligations of the
Company  enforceable  against the Company in accordance with their terms, except
as such  enforceability  may be  limited  by  general  principles  of  equity or
applicable bankruptcy,  insolvency,  reorganization,  moratorium, liquidation or
similar laws relating to, or affecting generally,  the enforcement of creditors'
rights and remedies.


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<PAGE>

      Section 4.3. Capitalization. As of the date hereof, the authorized capital
stock of the Company  consists of 50,000,000  shares of Common Stock,  par value
$0.001 per share and 5,000,000  shares of Preferred  Stock, par value $0.001 per
share,  of which  1,500,000  shares are  designated as Series 2000A  Convertible
Preferred Stock and 500,000 shares are designated as 2003A  Preferred  Stock. As
of May 23,  2005,  29,897,531  shares of Common Stock and 1,763 shares of Series
2000A  Convertible  Preferred  Stock were  issued and  outstanding.  All of such
outstanding shares have been validly issued and are fully paid and nonassessable
except as disclosed in the Disclosure Schedules.  Except as disclosed in the SEC
Documents,  no shares of Common  Stock are subject to  preemptive  rights or any
other similar rights or any liens or  encumbrances  suffered or permitted by the
Company.  Except as disclosed in the SEC Documents,  as of the date hereof,  (i)
there are no outstanding options, warrants, scrip, rights to subscribe to, calls
or commitments of any character  whatsoever relating to, or securities or rights
convertible  into,  any  shares of  capital  stock of the  Company or any of its
subsidiaries, or contracts, commitments, understandings or arrangements by which
the  Company  or  any of  its  subsidiaries  is or may  become  bound  to  issue
additional  shares of capital stock of the Company or any of its subsidiaries or
options,  warrants,  scrip,  rights to subscribe to, calls or commitments of any
character  whatsoever relating to, or securities or rights convertible into, any
shares of capital  stock of the Company or any of its  subsidiaries,  (ii) there
are no outstanding debt securities  (iii) there are no outstanding  registration
statements  other  than  on  Form  S-8  and  (iv)  there  are no  agreements  or
arrangements  under which the Company or any of its subsidiaries is obligated to
register the sale of any of their  securities  under the  Securities Act (except
pursuant to the  Registration  Rights  Agreement).  There are no  securities  or
instruments  containing   anti-dilution  or  similar  provisions  that  will  be
triggered by this Agreement or any related  agreement or the consummation of the
transactions  described  herein or therein.  The Company  has  furnished  to the
Investor,  or made  available  through the SEC's website at  http://www.sec.gov,
true and correct copies of the Company's  Articles of Incorporation,  as amended
and as in effect on May 23,  2005 (the  "Articles  of  Incorporation"),  and the
Company's By-laws,  as in effect on May 23, 2005 (the "By-laws"),  and the terms
of all  securities  convertible  into or  exercisable  for Common  Stock and the
material rights of the holders thereof in respect thereto.

      Section 4.4. No Conflict. The execution,  delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated  hereby  will not (i)  result in a  violation  of the  Articles  of
Incorporation,  any certificate of  designations  of any  outstanding  series of
preferred  stock of the Company or By-laws or (ii) conflict with or constitute a
default (or an event  which with notice or lapse of time or both would  become a
default)  under,  or  give to  others  any  rights  of  termination,  amendment,
acceleration or cancellation of, any material agreement, indenture or instrument
to which  the  Company  or any of its  subsidiaries  is a party,  or result in a


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<PAGE>

violation of any law, rule,  regulation,  order,  judgment or decree  (including
federal and state  securities laws and regulations and the rules and regulations
of the Principal  Market on which the Common Stock is quoted)  applicable to the
Company or any of its subsidiaries or by which any material property or asset of
the  Company or any of its  subsidiaries  is bound or  affected  and which would
cause a Material  Adverse  Effect.  Except as  disclosed  in the SEC  Documents,
neither the Company nor its  subsidiaries  is in  violation of any term of or in
default under its Articles of Incorporation  or By-laws or their  organizational
charter or by-laws, respectively, or any material contract, agreement, mortgage,
indebtedness,  indenture,  instrument, judgment, decree or order or any statute,
rule or regulation  applicable to the Company or its subsidiaries.  The business
of the Company and its  subsidiaries  is not being conducted in violation of any
material law, ordinance, regulation of any governmental entity applicable to it.
Except as specifically  contemplated by this Agreement and as required under the
Securities  Act and any  applicable  state  securities  laws, the Company is not
required to obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental  agency in order for it to execute,
deliver  or  perform  any of its  obligations  under  or  contemplated  by  this
Agreement or the  Registration  Rights  Agreement in  accordance  with the terms
hereof  or  thereof.   All  consents,   authorizations,   orders,   filings  and
registrations  which the  Company is required to obtain or effect on or prior to
May 23, 2005 pursuant to the  preceding  sentence have been obtained or effected
on or prior to May 23, 2005. The Company and its subsidiaries are unaware of any
fact or circumstance which might give rise to any of the foregoing.

      Section 4.5. SEC Documents;  Financial Statements.  Since January 1, 2003,
the  Company  has filed all  reports,  schedules,  forms,  statements  and other
documents required to be filed by it with the SEC under of the Exchange Act. The
Company has delivered to the Investor or its representatives,  or made available
through the SEC's website at http://www.sec.gov, true and complete copies of the
SEC Documents.  As of their respective  dates,  the financial  statements of the
Company disclosed in the SEC Documents (the "Financial  Statements") complied as
to form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto.  Such financial
statements have been prepared in accordance with generally  accepted  accounting
principles, consistently applied, during the periods involved (except (i) as may
be otherwise  indicated in such financial  statements or the notes  thereto,  or
(ii) in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary  statements) and, fairly present in all
material respects the fi