SECURITIES PURCHASE AGREEMENT

SECURITIES PURCHASE AGREEMENT

THIS SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of November

30, 2007, by and among SEAWAY VALLEY CAPITAL CORPORATION, a Delaware corporation

(the "Company"), and the Buyers listed on Schedule I attached hereto

(individually, a "Buyer" or collectively "Buyers").

WITNESSETH

WHEREAS, the Company and the Buyer(s) are executing and delivering this

Agreement in reliance upon an exemption from securities registration pursuant to

Section 4(2) and/or Rule 506 of Regulation D ("Regulation D") as promulgated by

the U.S. Securities and Exchange Commission (the "SEC") under the Securities Act

of 1933, as amended (the "Securities Act");

WHEREAS, the parties desire that, upon the terms and subject to the

conditions contained herein, the Company shall issue and sell to the Buyer(s),

as provided herein, and the Buyer(s) shall purchase (i) up to Five Hundred Fifty

Thousand Dollars ($550,000) of secured convertible debentures in the form

attached hereto as "Exhibit A" (the "Convertible Debentures"), which shall be

convertible into shares of the Company's common stock, par value $0.0001 (the

"Common Stock") (as converted, the "Conversion Shares"), and (ii) warrants

substantially in the form attached hereto as "Exhibit B" (the "Warrants"), to

acquire up to that number of additional shares of Common Stock set forth

opposite such Buyer's name on Schedule I (as exercised, the "Warrant Shares") of

which Three Hundred Seventy Five Thousand Dollars ($375,000) shall be funded

within three (3) business day following the date hereof (the "First Closing"),

and One Hundred Seventy Five Thousand Dollars ($175,000) shall be funded upon

the filing audited financial statements for the acquisition of Patrick Hackett

Hardware Company ("Hackett's") (the "Second Closing"), for a total purchase

price of up to Five Hundred Fifty Thousand Dollars ($550,000), (the "Purchase

Price") in the respective amounts set forth opposite each Buyer(s) name on

Schedule I (the "Subscription Amount");

WHEREAS, contemporaneously with the execution and delivery of this

Agreement, the parties hereto are executing and delivering a Registration Rights

Agreement (the "Registration Rights Agreement") pursuant to which the Company

has agreed to provide certain registration rights under the Securities Act and

the rules and regulations promulgated there under, and applicable state

securities laws;

WHEREAS, contemporaneously with the execution and delivery of this

Agreement, (i) the Buyer, the Company, and each subsidiary of the Company are

executing and delivering a Security Agreement (all such security agreements

shall be referred to as the "Security Agreement") pursuant to which the Company

and its wholly owned subsidiaries agree to provide the Buyer a security interest

in Pledged Property (as this term is defined in the Security Agreement), and

(ii) each subsidiary of the Company is executing and delivering a Guaranty dated

the date hereof (the "Guaranty" and collectively with the Security Agreement,

the "Security Documents") in favor of the Buyer;

WHEREAS, contemporaneously with the execution and delivery of this

Agreement, the parties hereto are executing and delivering Irrevocable Transfer

Agent Instructions (the "Irrevocable Transfer Agent Instructions"); and

WHEREAS, the Convertible Debentures, the Conversion Shares, the Warrants,

and the Warrants Shares collectively are referred to herein as the

"Securities").

NOW, THEREFORE, in consideration of the mutual covenants and other

agreements contained in this Agreement the Company and the Buyer(s) hereby agree

as follows:

1. PURCHASE AND SALE OF CONVERTIBLE DEBENTURES.

(a) Purchase of Convertible Debentures. Subject to the satisfaction (or

waiver) of the terms and conditions of this Agreement, each Buyer

agrees, severally and not jointly, to purchase at each Closing and the

Company agrees to sell and issue to each Buyer, severally and not

jointly, at each Closing, Convertible Debentures in amounts

corresponding with the Subscription Amount set forth opposite each

Buyer's name on Schedule I hereto and the Warrants to acquire up that

number of Warrant Shares as set forth opposite such Buyer's name on

Schedule I attached hereto.

(b) Closing Dates. The First Closing of the purchase and sale of the

Convertible Debentures and Warrants shall take place at 10:00 a.m.

Eastern Standard Time on the third (3rd) business day following the

date hereof, subject to notification of satisfaction of the conditions

to the Closing set forth herein and in Sections 6 and 7 below (or such

other date as is mutually agreed to by the Company and the Buyer(s))

(the "First Closing Date") and the Second Closing of the purchase and

sale of the Convertible Debentures and Warrants shall take place at

10:00 a.m. Eastern Standard Time on the third (3rd) business day

following the date the Company files audited financials for the

Hackett's acquistion, subject to notification of satisfaction of the

conditions to the Closing set forth herein and in Sections 6 and 7

below (or such other date as is mutually agreed to by the Company and

the Buyer(s)) (the "Second Closing Date"). The Closing(s) shall occur

on the respective Closing Dates at the offices of Yorkville Advisors,

LLC, 3700 Hudson Street, Suite 3700, Jersey City, New Jersey 07302 (or

such other place as is mutually agreed to by the Company and the

Buyer(s)).

(c) Form of Payment. Subject to the satisfaction of the terms and

conditions of this Agreement, on each Closing Date, (i) the Buyers

shall deliver to the Company such aggregate proceeds for the

Convertible Debentures and Warrants to be issued and sold to such

Buyer at such Closing, minus the fees to be paid directly from the

proceeds of such Closing as set forth herein, and (ii) the Company

shall deliver to each Buyer, Convertible Debentures and Warrants which

such Buyer is purchasing at such Closing in amounts indicated opposite

such Buyer's name on Schedule I, duly executed on behalf of the

Company.

2. BUYER'S REPRESENTATIONS AND WARRANTIES.

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

(a) Investment Purpose. Each Buyer is acquiring the Securities for its own

account for investment only and not with a view towards, or for resale

in connection with, the public sale or distribution thereof, except

pursuant to sales registered or exempted under the Securities Act;

provided, however, that by making the representations herein, such

Buyer reserves the right to dispose of the Securities at any time in

accordance with or pursuant to an effective registration statement

covering such Securities or an available exemption under the

Securities Act. Such Buyer does not presently have any agreement or

understanding, directly or indirectly, with any Person to distribute

any of the Securities.

(b) Accredited Investor Status. Each Buyer is an "Accredited Investor" as

that term is defined in Rule 501(a)(3) of Regulation D.

(c) Reliance on Exemptions. Each Buyer understands that the Securities are

being offered and sold to it in reliance on specific exemptions from

the registration requirements of United States federal and state

securities laws and that the Company is relying in part upon the truth

and accuracy of, and such Buyer's compliance with, the

representations, warranties, agreements, acknowledgments and

understandings of such Buyer set forth herein in order to determine

the availability of such exemptions and the eligibility of such Buyer

to acquire the Securities.

(d) Information. Each Buyer and its advisors (and his or, its counsel), if

any, have been furnished with all materials relating to the business,

finances and operations of the Company and information he deemed

material to making an informed investment decision regarding his

purchase of the Securities, which have been requested by such Buyer.

Each Buyer and its advisors, if any, have been afforded the

opportunity to ask questions of the Company and its management.

Neither such inquiries nor any other due diligence investigations

conducted by such Buyer or its advisors, if any, or its

representatives shall modify, amend or affect such Buyer's right to

rely on the Company's representations and warranties contained in

Section 3 below. Each Buyer understands that its investment in the

Securities involves a high degree of risk. Each Buyer is in a position

regarding the Company, which, based upon employment, family

relationship or economic bargaining power, enabled and enables such

Buyer to obtain information from the Company in order to evaluate the

merits and risks of this investment. Each Buyer has sought such

accounting, legal and tax advice, as it has considered necessary to

make an informed investment decision with respect to its acquisition

of the Securities.

(e) No Governmental Review. Each Buyer understands that no United States

federal or state agency or any other government or governmental agency

has passed on or made any recommendation or endorsement of the

Securities, or the fairness or suitability of the investment in the

Securities, nor have such authorities passed upon or endorsed the

merits of the offering of the Securities.

(f) Transfer or Resale. Each Buyer understands that except as provided in

the Registration Rights Agreement: (i) the Securities have not been

and are not being registered under the Securities Act or any state

securities laws, and may not be offered for sale, sold, assigned or

transferred unless (A) subsequently registered thereunder, (B) such

Buyer shall have delivered to the Company an opinion of counsel, in a

generally acceptable form, to the effect that such Securities to be

sold, assigned or transferred may be sold, assigned or transferred

pursuant to an exemption from such registration requirements, or (C)

such Buyer provides the Company with reasonable assurances (in the

form of seller and broker representation letters) that such Securities

can be sold, assigned or transferred pursuant to Rule 144, Rule

144(k), or Rule 144A promulgated under the Securities Act, as amended

(or a successor rule thereto) (collectively, "Rule 144"), in each case

following the applicable holding period set forth therein; (ii) any

sale of the Securities made in reliance on Rule 144 may be made only

in accordance with the terms of Rule 144 and further, if Rule 144 is

not applicable, any resale of the Securities under circumstances in

which the seller (or the person through whom the sale is made) may be

deemed to be an underwriter (as that term is defined in the Securities

Act) may require compliance with some other exemption under the

Securities Act or the rules and regulations of the SEC thereunder; and

(iii) neither the Company nor any other person is under any obligation

to register the Securities under the Securities Act or any state

securities laws or to comply with the terms and conditions of any

exemption thereunder.

(g) Legends. Each Buyer agrees to the imprinting, so long as is required

by this Section 2(g), of a restrictive legend in substantially the

following form:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN

REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR

APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN

ACQUIRED SOLELY FOR INVESTMENT PURPOSES AND NOT WITH A VIEW

TOWARD RESALE AND MAY NOT BE OFFERED FOR SALE, SOLD,

TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE

REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES

ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS,

OR AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT

REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE

STATE SECURITIES LAWS.

Certificates evidencing the Conversion Shares or Warrant Shares shall not

contain any legend (including the legend set forth above), (i) while a

registration statement (including the Registration Statement) covering

the resale of such security is effective under the Securities Act,

(ii) following any sale of such Conversion Shares or Warrant Shares

pursuant to Rule 144, (iii) if such Conversion Shares or Warrant

Shares are eligible for sale under Rule 144(k), or (iv) if such legend

is not required under applicable requirements of the Securities Act

(including judicial interpretations and pronouncements issued by the

staff of the SEC). The Company shall cause its counsel to issue a

legal opinion to the Company's transfer agent promptly after the

effective date (the "Effective Date") of a Registration Statement if

required by the Company's transfer agent to effect the removal of the

legend hereunder. If all or any portion of the Convertible Debentures

or Warrants are exercised by a Buyer that is not an Affiliate of the

Company (a "Non-Affiliated Buyer") at a time when there is an

effective registration statement to cover the resale of the Conversion

Shares or the Warrant Shares, such Conversion Shares or Warrant Shares

shall be issued free of all legends. The Company agrees that following

the Effective Date or at such time as such legend is no longer

required under this Section 2(g), it will, no later than three (3)

Trading Days following the delivery by a Non-Affiliated Buyer to the

Company or the Company's transfer agent of a certificate representing

Conversion Shares or Warrant Shares, as the case may be, issued with a

restrictive legend (such third Trading Day, the "Legend Removal

Date"), deliver or cause to be delivered to such Non-Affiliated Buyer

a certificate representing such shares that is free from all

restrictive and other legends. The Company may not make any notation

on its records or give instructions to any transfer agent of the

Company that enlarge the restrictions on transfer set forth in this

Section. Each Buyer acknowledges that the Company's agreement

hereunder to remove all legends from Conversion Shares or Warrant

Shares is not an affirmative statement or representation that such

Conversion Shares or Warrant Shares are freely tradable. Each Buyer,

severally and not jointly with the other Buyers, agrees that the

removal of the restrictive legend from certificates representing

Securities as set forth in this Section 3(g) is predicated upon the

Company's reliance that the buyer will sell any Securities pursuant to

either the registration requirements of the Securities Act, including

any applicable prospectus delivery requirements, or an exemption

therefrom, and that if Securities are sold pursuant to a Registration

Statement, they will be sold in compliance with the plan of

distribution set forth therein.

(h) Authorization, Enforcement. This Agreement has been duly and validly

authorized, executed and delivered on behalf of such Buyer and is a

valid and binding agreement of such Buyer enforceable in accordance

with its terms, except as such enforceability may be limited by

general principles of equity or applicable bankruptcy, insolvency,

reorganization, moratorium, liquidation and other similar laws

relating to, or affecting generally, the enforcement of applicable

creditors' rights and remedies.

(i) Receipt of Documents. Each Buyer and his or its counsel has

received and read in their entirety: (i) this Agreement and each

representation, warranty and covenant set forth herein and the

Transaction Documents (as defined herein); (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 fiscal year ended

December 31, 2006; (iv) the Company's Form 10-QSB for the fiscal

quarter ended September 30, 2007 and (v) answers to all questions

each Buyer submitted to the Company regarding an investment in

the Company; and each Buyer has relied on the information

contained therein and has not been furnished any other documents,

literature, memorandum or prospectus.

(j) Due Formation of Corporate and Other Buyers. If the Buyer(s) is a

corporation, trust, partnership or other entity that is not an

individual person, it has been formed and validly exists and has not

been organized for the specific purpose of purchasing the Securities

and is not prohibited from doing so.

(k) No Legal Advice From the Company. Each Buyer acknowledges, that it had

the opportunity to review this Agreement and the transactions

contemplated by this Agreement with his or its own legal counsel and

investment and tax advisors. Each Buyer is relying solely on such

counsel and advisors and not on any statements or representations of

the Company or any of its representatives or agents for legal, tax or

investment advice with respect to this investment, the transactions

contemplated by this Agreement or the securities laws of any

jurisdiction.

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

Except as set forth under the corresponding section of the Disclosure

Schedules which Disclosure Schedules shall be deemed a part hereof and to

qualify any representation or warranty otherwise made herein to the extent of

such disclosure, the Company hereby makes the representations and warranties set

forth below to each Buyer:

(a) Subsidiaries. All of the direct and indirect subsidiaries of the

Company are set forth on Schedule 3(a). The Company owns, directly or

indirectly, all of the capital stock or other equity interests of each

subsidiary free and clear of any liens, and all the issued and

outstanding shares of capital stock of each subsidiary are validly

issued and are fully paid, non-assessable and free of preemptive and

similar rights to subscribe for or purchase securities.

(b) Organization and Qualification. The Company and its subsidiaries are

corporations duly organized and validly existing in good standing

under the laws of the jurisdiction in which they are incorporated, and

have the requisite corporate power to own their properties and to

carry on their business as now being conducted. Each of the Company

and its subsidiaries is duly qualified as a foreign corporation 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 or reasonably be expected to result

in (i) a material adverse effect on the legality, validity or

enforceability of any Transaction Document, (ii) a material adverse

effect on the results of operations, assets, business or condition

(financial or otherwise) of the Company and the subsidiaries, taken as

a whole, or (iii) a material adverse effect on the Company's ability

to perform in any material respect on a timely basis its obligations

under any Transaction Document (any of (i), (ii) or (iii), a "Material

Adverse Effect") and no proceeding has been instituted in any such

jurisdiction revoking, limiting or curtailing or seeking to revoke,

limit or curtail such power and authority or qualification..

(c) Authorization, Enforcement, Compliance with Other Instruments. (i) The

Company has the requisite corporate power and authority to enter into

and perform its obligations under this Agreement, the Convertible

Debentures, the Warrants, the Security Documents, the Registration

Rights Agreement, the Irrevocable Transfer Agent Instructions, and

each of the other agreements entered into by the parties hereto in

connection with the transactions contemplated by this Agreement

(collectively the "Transaction Documents") and to issue the Securities

in accordance with the terms hereof and thereof, (ii) the execution

and delivery of the Transaction Documents by the Company and the

consummation by it of the transactions contemplated hereby and

thereby, including, without limitation, the issuance of the

Securities, the reservation for issuance and the issuance of the

Conversion Shares, and the reservation for issuance and the issuance

of the Warrant Shares, 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) the

Transaction Documents have been duly executed and delivered by the

Company, (iv) the Transaction Documents constitute the valid and

binding obligations of the Company enforceable against the Company in

accordance with their terms, except as such enforceability may be

limited by general principles of equity or applicable bankruptcy,

insolvency, reorganization, moratorium, liquidation or similar laws

relating to, or affecting generally, the enforcement of creditors'

rights and remedies. The authorized officer of the Company executing

the Transaction Documents knows of no reason why the Company cannot

file the Registration Statement as required under the Registration

Rights Agreement or perform any of the Company's other obligations

under the Transaction Documents.

(d) Capitalization. The authorized capital stock of the Company consists

of 2,500,000,000 shares of Common Stock, 100,000 shares of Series B

Preferred Stock, 1,600,000 shares of Series C Preferred Stock

(collectively, "Preferred Stock") of which 732,506,363 shares of

Common Stock, 100,000 shares of Series B Preferred Stock, and

1,458,236 shares of Series C Preferred Stock are issued and

outstanding. All of the outstanding shares of capital stock of the

Company are validly issued, fully paid and nonassessable, have been

issued in compliance with all federal and state securities laws, and

none of such outstanding shares was issued in violation of any

preemptive rights or similar rights to subscribe for or purchase

securities. Except as disclosed in Schedule 3(d): (i) none of the

Company's capital stock is subject to preemptive rights or any other

similar rights or any liens or encumbrances suffered or permitted by

the Company; (ii) 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, or

exercisable or exchangeable for, any 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 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, or exercisable or exchangeable

for, any capital stock of the Company or any of its subsidiaries;

(iii) there are no outstanding debt securities, notes, credit

agreements, credit facilities or other agreements, documents or

instruments evidencing indebtedness of the Company or any of its

subsidiaries or by which the Company or any of its subsidiaries is or

may become bound; (iv) there are no financing statements securing

obligations in any material amounts, either singly or in the

aggregate, filed in connection with the Company or any of its

subsidiaries; (v) there are no outstanding securities or instruments

of the Company or any of its subsidiaries which contain any redemption

or similar provisions, and there are no contracts, commitments,

understandings or arrangements by which the Company or any of its

subsidiaries is or may become bound to redeem a security of the

Company or any of its subsidiaries; (vi) there are no securities or

instruments containing anti-dilution or similar provisions that will

be triggered by the issuance of the Securities; (vii) the Company does

not have any stock appreciation rights or "phantom stock" plans or

agreements or any similar plan or agreement; and (viii) the Company

and its subsidiaries have no liabilities or obligations required to be

disclosed in the SEC Documents but not so disclosed in the SEC

Documents, other than those incurred in the ordinary course of the

Company's or its subsidiaries' respective businesses and which,

individually or in the aggregate, do not or would not have a Material

Adverse Effect. The Company has furnished to the Buyers true, correct

and complete copies of the Company's Certificate of Incorporation, as

amended and as in effect on the date hereof (the "Certificate of

Incorporation"), and the Company's Bylaws, as amended and as in effect

on the date hereof (the "Bylaws"), and the terms of all securities

convertible into, or exercisable or exchangeable for, shares of Common

Stock and the material rights of the holders thereof in respect

thereto. No further approval or authorization of any stockholder, the

Board of Directors of the Company or others is required for the

issuance and sale of the Securities. There are no stockholders

agreements, voting agreements or other similar agreements with respect

to the Company's capital stock to which the Company is a party or, to

the knowledge of the Company, between or among any of the Company's

stockholders.

(e) Issuance of Securities. The issuance of the Convertible Debentures and

the Warrants is duly authorized and free from all taxes, liens and

charges with respect to the issue thereof. Upon conversion in

accordance with the terms of the Convertible Debentures or exercise in

accordance with the Warrants, as the case may be, the Conversion

Shares and Warrant Shares, respectively, when issued will be validly

issued, fully paid and nonassessable, free from all taxes, liens and

charges with respect to the issue thereof. The Company has reserved

from its duly authorized capital stock the appropriate number of

shares of Common Stock as set forth in this Agreement.

(f) No Conflicts. The execution, delivery and performance of the

Transaction Documents by the Company and the consummation by the

Company of the transactions contemplated hereby and thereby

(including, without limitation, the issuance of the Convertible

Debentures and the Warrants, and reservation for issuance and issuance

of the Conversion Shares and the Warrant Shares) will not (i) result

in a violation of any certificate of incorporation, certificate of

formation, any certificate of designations or other constituent

documents of the Company or any of its subsidiaries, any capital stock

of the Company or any of its subsidiaries or bylaws of the Company or

any of its subsidiaries or (ii) conflict with, or constitute a default

(or an event which with notice or lapse of time or both would become a

default) in any respect under, or give to others any rights of

termination, amendment, acceleration or cancellation of, any

agreement, indenture or instrument to which the Company or any of its

subsidiaries is a party, or (iii) result in a violation of any law,

rule, regulation, order, judgment or decree (including foreign,

federal and state securities laws and regulations and the rules and

regulations of the National Association of Securities Dealers Inc.'s

OTC Bulletin Board) applicable to the Company or any of its

subsidiaries or by which any property or asset of the Company or any

of its subsidiaries is bound or affected; except in the case of each

of clauses (ii) and (iii), such as could not, individually or in the

aggregate, have or reasonably be expected to result in a Material

Adverse Effect. The business of the Company and its subsidiaries is

not being conducted, and shall not be conducted in violation of any

material law, ordinance, or regulation of any governmental entity.

Except as specifically contemplated by this Agreement and as required

under the Securities Act and any applicable state securities laws, the

Company is not required to obtain any consent, authorization or order

of, or make any filing or registration with, any court or governmental

agency in order for it to execute, deliver or perform any of its

obligations under or contemplated by this Agreement or the

Registration Rights Agreement in accordance with the terms hereof or

thereof. All consents, authorizations, orders, filings and

registrations which the Company is required to obtain pursuant to the

preceding sentence have been obtained or effected on or prior to the

date hereof. The Company and its subsidiaries are unaware of any facts

or circumstance, which might give rise to any of the foregoing.

(g) SEC Documents; Financial Statements. The Company has filed all

reports, schedules, forms, statements and other documents required to

be filed by it with the SEC under the Securities Exchange Act of 1934,

as amended (the "Exchange Act"), for the two years preceding the date

hereof (or such shorter period as the Company was required by law or

regulation to file such material) (all of the foregoing filed prior to

the date hereof or amended after the date hereof and all exhibits

included therein and financial statements and schedules thereto and

documents incorporated by reference therein, being hereinafter

referred to as the "SEC Documents") on timely basis or has received a

valid extension of such time of filing and has filed any such SEC

Document prior to the expiration of any such extension. The Company

has delivered to the Buyers or their 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 SEC Documents complied in all material respects with the

requirements of the Exchange Act and the rules and regulations of the

SEC promulgated thereunder applicable to the SEC Documents, and none

of the SEC Documents, at the time they were filed with the SEC,

contained any untrue statement of a material fact or omitted to state

a material fact required to be stated therein or necessary in order to

make the statements therein, in the light of the circumstances under

which they were made, not misleading. As of their respective dates,

the financial statements of the Company included in the SEC Documents

complied as to form in all material respects with applicable

accounting requirements and the published rules and regulations of the

SEC with respect thereto. Such financial statements have been prepared

in accordance with generally accepted accounting principles,

consistently applied, during the periods involved (except (i) as may

be otherwise indicated in such financial statements or the notes

thereto, or (ii) in the case of unaudited interim statements, to the

extent they may exclude footnotes or may be condensed or summary

statements) and fairly present in all material respects the financial

position of the Company as of the dates thereof and the results of its

operations and cash flows for the periods then ended (subject, in the

case of unaudited statements, to normal year-end audit adjustments).

No other information provided by or on behalf of the Company to the

Buyers which is not included in the SEC Documents, including, without

limitation, information referred to in Section 2(i) of this Agreement,

contains any untrue statement of a material fact or omits to state any

material fact necessary in order to make the statements therein, in

the light of the circumstance under which they are or were made and

not misleading.

(h) 10(b)-5. The SEC Documents do not include any untrue statements of

material fact, nor do they omit to state any material fact required to

be stated therein necessary to make the statements made, in light of

the circumstances under which they were made, not misleading.

(i) Absence of Litigation. There is no action, suit, proceeding, inquiry

or investigation before or by any court, public board, government

agency, self-regulatory organization or body pending against or

affecting the Company, the Common Stock or any of the Company's

subsidiaries, wherein an unfavorable decision, ruling or finding would

(i) have a Material Adverse Effect.

(j) Acknowledgment Regarding Buyer's Purchase of the Convertible

Debentures. The Company acknowledges and agrees that each Buyer is

acting solely in the capacity of an arm's length purchaser with

respect to this Agreement and the transactions contemplated hereby.

The Company further acknowledges that each Buyer is not acting as a

financial advisor or fiduciary of the Company (or in any similar

capacity) with respect to this Agreement and the transactions

contemplated hereby and any advice given by each Buyer or any of their

respective representatives or agents in connection with this Agreement

and the transactions contemplated hereby is merely incidental to such

Buyer's purchase of the Securities. The Company further represents to

each Buyer that the Company's decision to enter into this Agreement

has been based solely on the independent evaluation by the Company and

its representatives.

(k) 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