10-Q/A

                             UNITED STATES
                  SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C. 20549

                               FORM 10-Q/A

          /x/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                 OF THE SECURITIES EXCHANGE ACT OF 1934

             FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2005


                      Commission File Number 0-9314


                      ACCESS PHARMACEUTICALS, INC.
          ------------------------------------------------------
          (Exact name of registrant as specified in its charter)


          Delaware                                        83-0221517
- ------------------------                          ---------------------------
(State of Incorporation)                           (I.R.S. Employer I.D. No.)

              2600 Stemmons Frwy, Suite 176, Dallas, TX 75207
              -----------------------------------------------
                  (Address of principal executive offices)

Telephone Number  (214) 905-5100

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports) and (2) has been subject to such filing
requirement for the past 90 days.

Yes  X   No
   -----   -----

Indicate by check mark whether the registrant is an accelerated
filer (as defined in Rule 12b-2 of the Exchange Act).

Yes  X   No
   -----   -----

The number of shares outstanding of the issuer's common stock,
as of May 9, 2005, was 15,724,734 shares, $0.01 par value per share.


                       Total No. of Pages   31


                      ACCESS PHARMACEUTICALS, INC.

                                 INDEX
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                                                              Page No.
                                                              --------
RISK FACTORS                                                      2

PART I - FINANCIAL INFORMATION
Item 1.  Condensed Consolidated Financial Statements:

Condensed Consolidated Balance Sheets at
March 31, 2005 and December 31, 2004                             27

Condensed Consolidated Statements of Operations and
Comprehensive Loss for the three months ended March 31, 2005
and March 31, 2004                                               28

Condensed Consolidated Statements of Cash Flows for the
three months ended March 31, 2005 and March 31, 2004             29

Notes to Unaudited Condensed Consolidated Financial Statements   30

Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations                              16

Item 3. Quantitative and Qualitative Disclosures About
Market Risk                                                      21

Item 4. Controls and Procedures                                  22

PART II - OTHER INFORMATION
Item 1 Legal Proceedings                                         23

Item 2 Changes in Securities                                     23

Item 3 Defaults Upon Senior Securities                           23

Item 4 Submission of Matters to a Vote of Security Holders       23

Item 5 Other Information                                         23

Item 6. Exhibits and Reports on Form 8-K                         24

SIGNATURES                                                       26


PART I -- FINANCIAL INFORMATION

Risk Factors
- ------------

This Quarterly Report on Form 10-Q contains certain statements
that are forward-looking within the meaning of Section 27a of
the Securities Act of 1933, as amended, and Section 21E of the
Securities and Exchange Act of 1934, as amended, and that
involve risks and uncertainties, including, but not limited to
the uncertainties associated with research and development
activities, clinical trials, our ability to raise capital, the
timing of and our ability to achieve regulatory approvals,
dependence on others to market our licensed products,
collaborations, future cash flow, the timing and receipt of
licensing and milestone revenues, the future success of our
marketed products and products in development, our ability to
manufacture amlexanox products in commercial quantities, our
sales projections, and the sales projections of our licensing
partners, our ability to achieve licensing milestones and other
risks described below as well as those discussed elsewhere in
this Form 10-Q, documents incorporated by reference and other
documents and reports that we file periodically with the
Securities and Exchange Commission. Forward-looking statements
contained in this Form 10-Q include, but are not limited to
those relating to anticipated product approvals and timing
thereof, the terms of future licensing arrangements, our
ability to secure additional financing for our operations, our
belief that our net cash burn rate for the next twelve months
to be approximately $600,000 per month, our ability to repay
our outstanding debt obligations, our ability to fund our
operations (other than debt repayment) through March 2006, and
our expected capital expenditures.

We have experienced a history of losses and we expect to incur
future losses.
- --------------------------------------------------------------

We have recorded minimal revenue to date and we have incurred
a cumulative operating loss of approximately $66.9 million
through March 31, 2005. Losses for the years ended 2004, 2003
and 2002 were $10,238,000, $6,935,000 and $9,384,000,
respectively. Our losses have resulted principally from costs
incurred in research and development activities related to our
efforts to develop clinical drug candidates and from the
associated administrative costs. We expect to incur additional
operating losses over the next several years. We also expect
cumulative losses to increase due to expanded research and
development efforts and preclinical and clinical trials. Our
net cash burn rate for the past twelve months was approximately
$750,000 per month. We project our net cash burn rate for the
next twelve months to be approximately $600,000 per month.
Capital expenditures are forecasted to be minor for the next
twelve months since most of our new equipment is leased and the
lease expense is included in the calculation of the net cash
burn rate.

We do not have significant operating revenue and we may never
attain profitability.
- --------------------------------------------------------------

To date, we have funded our operations primarily through
private sales of common stock and convertible notes. Contract
research payments and licensing fees from corporate alliances
and mergers have also provided funding for our operations. Our
ability to achieve significant revenue or profitability depends
upon our ability to successfully complete the development of
drug candidates, to develop and obtain patent protection and
regulatory approvals for our drug candidates and to manufacture
and commercialize the resulting drugs. We have not received
significant royalties for sales of amlexanox, Zindaclin(R) or
OraDisc(TM) products to date and we may not generate
significant revenues or profits from the sale of these products
in the future. Furthermore, we may not be able to ever
successfully identify, develop, commercialize, patent,
manufacture, obtain required regulatory approvals and market
any additional products. Moreover,

                                  2

even if we do identify, develop, commercialize, patent,
manufacture, and obtain required regulatory approvals to market
additional products, we may not generate revenues or royalties
from commercial sales of these products for a significant
number of years, if at all. Therefore, our proposed operations
are subject to all the risks inherent in the establishment of
a new business enterprise.  In the next few years, our revenues
may be limited to minimal product sales and royalties, any
amounts that we receive under strategic partnerships and
research or drug development collaborations that we may
establish and, as a result, we may be unable to achieve or
maintain profitability in the future or to achieve significant
revenues in order to fund our operations.

A failure to obtain necessary additional capital in the future
could jeopardize our operations.
- --------------------------------------------------------------

We have issued an aggregate of $13,530,000 of convertible
notes, which are due in two parts -- $8,030,000 is due on
September 13, 2005 and $5,500,000 is due on September 13, 2008.
The notes may convert to common stock at a conversion price of
$5.50 and we can redeem the notes for the principal amount of
the notes plus interest if our common stock trades above a
price of $8.25 for any period of ten consecutive trading days
prior to our notice of redemption. In addition, we have issued
$2,633,000 of Secured Convertible Notes due March 31, 2006.
Such Secured Convertible Notes convert at $4.00 per share. We
do not have sufficient funds to repay our convertible notes at
their maturity. We may not be able to restructure the
convertible notes or obtain additional financing to repay them
on terms acceptable to us, if at all. If we raise additional
funds by selling equity securities including in connection with
our Standby Equity Distribution Agreement (the "SEDA") with
Cornell Capital, the relative equity ownership of our existing
investors would be diluted and the new investors could obtain
terms more favorable than previous investors. A failure to
restructure our convertible notes or obtain additional funding
to repay the convertible notes and support our working capital
and operating requirements, could cause us to be in default of
our convertible notes and prevent us from making expenditures
that are needed to allow us to maintain our operations.

Our financial condition and the restrictive covenants contained
in our outstanding convertible notes may limit our ability to
borrow additional funds or to raise additional equity as may be
required to fund our future operations.
- ---------------------------------------------------------------

We incurred significant losses from operations of $2.4 million
for the quarterly period ended March 31, 2005, $2.4 million for
the quarterly period ended March 31, 2004, $9.1 million for the
year ended December 31, 2004 and $8.2 million for the year
ended December 31, 2003. Moreover, the terms of our outstanding
Convertible Notes may limit our ability to, among other things:

- - incur additional debt;
- - retire, exchange or amend the terms of outstanding debt;
- - pay cash dividends, redeem, retire or repurchase our stock or
  change our capital structure;
- - enter into certain transactions with affiliates;
- - create additional liens on our assets;
- - issue certain types of preferred stock or issue common stock
  at below market prices; or
- - merge or consolidate with other entities.

                                  3

Our ability to borrow additional funds or raise additional
equity may be limited by our financial condition, in addition
to the terms of our outstanding debt. Additionally, events such
as our inability to continue to reduce our loss from continuing
operations, could adversely affect our liquidity and our
ability to attract additional funding as required.

We may not be able to pay our debt and other obligations and
our assets may be seized as a result.
- ------------------------------------------------------------

We may not generate the cash flow required to pay our
liabilities as they become due. Our outstanding debt includes
approximately $8.03 million of our Convertible Subordinated
Notes due in September 2005, $5.5 million of our Convertible
Subordinated Notes due in September 2008 and $2,633,000 of our
Secured Convertible Notes due in March 2006.

We may be unable to repay or repurchase the Secured Convertible
Notes due in March 2006 and convertible subordinated notes due
in September 2005 and September 2008 upon a repurchase event
and be forced into bankruptcy.

The holders of our Convertible Notes may require us to
repurchase or prepay all of the outstanding Convertible Notes
under certain circumstances. We may not have sufficient cash
reserves to repurchase the Convertible Notes at such time,
which would cause an event of default under the Convertible
Notes and may force us to declare bankruptcy.

Our obligations under the secured convertible notes are secured
by all of our assets
- ---------------------------------------------------------------

Our obligations under the $2,633,000 Secured Convertible Notes
are secured by all of our assets. As a result, if we default
under the terms of the Secured Convertible Notes or related
agreements, including our failure to issue shares of common
stock upon conversion by the holder, our failure to timely file
a registration statement or have such registration statement
declared effective, breach of any covenant, representation or
warranty in the Securities Purchase Agreement or related
Secured Convertible Notes or the commencement of a bankruptcy,
insolvency, reorganization or liquidation proceeding against
the Company could require the early repayment of the Secured
Convertible Notes, if the default is not cured with the
specified grace period. In addition we could be required to
issue and the holders would have the ability to sell up to
2,891,723 shares of our Common Stock and/or the holders could
foreclose their security interest and liquidate some or all of
the assets of the Company and we could cease to operate. Any
such issuance of shares could cause a significant drop in the
price of our stock and significant dilution to our
stockholders.

Our Standby Equity Distribution Agreement may have a dilutive
impact on our stockholders.
- -------------------------------------------------------------

We are to a great extent dependent on external financing to
fund our operations. Our financial needs may be partially
provided from the SEDA. The issuance of shares of our common
stock under the SEDA will have a dilutive impact on our other
stockholders and the issuance or even potential issuance of
such shares could have a negative effect on the market price of
our common stock. In addition, if we access the SEDA, we will
issue shares of our common stock to Cornell Capital Partners at
a discount of 2% of the lowest daily volume weighted average of
our common stock during a specified period of trading days
after we access the SEDA. Issuing shares at a

                                  4

discount will further dilute the interests of other
stockholders and may negatively affect the market price of our
Common Stock.

To the extent that Cornell sells shares of our common stock
issued under SEDA to third parties, our stock price may
decrease due to the additional selling pressure in the market.
The perceived risk of dilution from sales of stock to or by
Cornell may cause holders of our common stock to sell their
shares, or it may encourage short sales of our common stock or
other similar transactions. This could contribute to a decline
in the stock price of our common stock.

We may not successfully commercialize our drug candidates.
- ----------------------------------------------------------

Our drug candidates are subject to the risks of failure
inherent in the development of pharmaceutical products based on
new technologies and our failure to develop safe, commercially
viable drugs would severely limit our ability to become
profitable or to achieve significant revenues. We may be unable
to successfully commercialize our drug candidates for a number
of reasons, including:

* some or all of our drug candidates may be found to be unsafe
  or ineffective or otherwise fail to meet applicable regulatory
  standards or receive necessary regulatory clearances;
* our drug candidates, if safe and effective, may be too
  difficult to develop into commercially viable drugs;
* it may be difficult to manufacture or market our drug
  candidates on a large scale;
* proprietary rights of third parties may preclude us from
  marketing our drug candidates; and
* third parties may market superior or equivalent drugs.

The success of our research and development activities, upon
which we primarily focus, is uncertain.
- -------------------------------------------------------------

Our primary focus is on our research and development activities
and the commercialization of compounds covered by proprietary
biopharmaceutical patents and patent applications. Research and
development activities, by their nature, preclude definitive
statements as to the time required and costs involved in
reaching certain objectives. Actual research and development
costs, therefore, could exceed budgeted amounts and estimated
time frames may require extension. Cost overruns, unanticipated
regulatory delays or demands, unexpected adverse side effects
or insufficient therapeutic efficacy will prevent or
substantially slow our research and development effort and our
business could ultimately suffer. We anticipate that we will
remain principally engaged in research and development
activities for an indeterminate, but substantial, period of
time.

We may be unable to obtain necessary additional capital to fund
operations in the future.
- ----------------------------------------------------------------

We require substantial capital for our development programs and
operating expenses, to pursue regulatory clearances and to
prosecute and defend our intellectual property rights. We
believe that our existing capital resources, interest income,
product sales, royalties and revenue from possible licensing
agreements and collaborative agreements will be sufficient to
fund our currently expected operating expenses (other than debt
obligations including the $8,030,000 of convertible notes which
are required to be repaid in September 2005 and $2,633,000 of
Secured Convertible Notes due in March 2006) and capital
requirements through March 2006. However,

                                  5

unless our convertible notes convert to common stock prior to
their maturity or are restructured, we will need to raise
substantial additional capital to support our ongoing
operations and debt obligations because our convertible notes
will mature and/or our actual cash requirements may vary
materially from those now planned and will depend upon numerous
factors, including :

* the sales levels of our marketed products;
* the results of our research and development programs;
* the timing and results of preclinical and clinical trials;
* our ability to maintain existing and establish new
  collaborative agreements with other companies to provide
  funding to us;
* technological advances; and
* activities of competitors and other factors.

If we do raise additional funds by issuing equity securities,
further dilution to existing stockholders would result and
future investors may be granted rights superior to those of
existing our stockholders. If adequate funds are not available
to us through additional equity offerings, we may be required
to delay, reduce the scope of or eliminate one or more of our
research and development programs or to obtain funds by
entering into arrangements with collaborative partners or
others that require us to issue additional equity securities or
to relinquish rights to certain technologies or drug candidates
that we would not otherwise issue or relinquish in order to
continue independent operations.

We may be unable to successfully develop, market, or
commercialize our products or our product candidates without
establishing new relationships and maintaining current relationships.
- ---------------------------------------------------------------------

Our strategy for the research, development and
commercialization of our potential pharmaceutical products may
require us to enter into various arrangements with corporate
and academic collaborators, licensors, licensees and others, in
addition to our existing relationships with other parties.
Specifically, we may seek to joint venture, sublicense or enter
other marketing arrangements with parties that have an
established marketing capability or we may choose to pursue the
commercialization of such products on our own. We may, however,
be unable to establish such additional collaborative
arrangements, license agreements, or marketing agreements as we
may deem necessary to develop, commercialize and market our
potential pharmaceutical products on acceptable terms.
Furthermore, if we maintain and establish arrangements or
relationships with third parties, our business may depend upon
the successful performance by these third parties of their
responsibilities under those arrangements and relationships.
For our commercialized products we currently rely upon the
following relationships in the following marketing territories
for sales, manufacturing or regulatory approval efforts:

* amlexanox 5% paste and OraDisc(TM) A
  o Discuss Dental, Inc. - United States marketing rights
  o ProStrakan Ltd. - United Kingdom and Ireland manufacturing,
    marketing rights and regulatory approval
  o Zambon Group - France, Germany, Holland, Belgium, Luxembourg,
    Switzerland, Brazil, Colombia and Italy manufacturing and
    marketing rights

                                  6

  o Laboratories Dr. Esteve SA - Spain, Portugal and Greece
    manufacturing and marketing rights
  o Meda, AB for Scandinavia, the Baltic states and Iceland
    marketing rights
  o Mipharm SpA for Italy manufacturing and marketing rights
  o Paladin Labs, Inc. for Canada manufacturing and marketing
    rights
  o EpiTan, Ltd. for Australia and New Zealand for marketing
    rights
  o Orient Europharma, Co., Ltd. for Taiwan, Hong-Kong, Malaysia,
    Philippines, Thailand and Singapore for marketing rights

* Zindaclin(R) and Residerm(R)
  o ProStrakan Ltd. - worldwide manufacturing, marketing and
    regulatory approval rights
  o Fujisawa GmbH - sublicensed continental Europe marketing
    rights
  o EpiTan, Ltd. - sublicensed Australia and New Zealand
    marketing rights
  o Hyundai - sublicensed Korea marketing rights
  o Taro - sublicensed Israel marketing rights
  o Biosintetica - sublicensed Brazil marketing rights
  o Pliva dd Hrvatska d.o.o. - sublicensed Czech, Estonia,
    Hungary, Latvia, Poland, Slovak and Slovenia marketing rights
  o Five companies for five other smaller countries - sublicensed
    marketing rights

For one of our OraDisc(TM) products in development, on January
6, 2004, we entered into an exclusive license and supply
agreement with Wyeth Consumer Healthcare for sales of the
product in North America. If this product is marketed, we will
be dependent upon Wyeth Consumer Healthcare for sales of such
product in this territory.

Our ability to successfully commercialize, and market our
products and product candidates could be limited if a number of
these existing relationships were terminated.

Furthermore, our strategy with respect to our polymer platinate
program is to enter into a licensing agreement with a
pharmaceutical company pursuant to which the further costs of
developing a product would be shared with our licensing
partner. Although we have had discussions with potential
licensing partners with respect to our polymer platinate
program, to date we have not entered into any licensing
arrangement. We may be unable to execute our licensing strategy
for polymer platinate.

We may be unable to successfully manufacture our products and
our product candidates in clinical quantities or for commercial
purposes without the assistance of  contract manufacturers,
which may be difficult for us to obtain and maintain.
- ---------------------------------------------------------------

We have limited experience in the manufacture of pharmaceutical
products in clinical quantities or for commercial purposes and
we may not be able to manufacture any new pharmaceutical
products that we may develop. As a result, we have established,
and in the future intend to establish arrangements with
contract manufacturers to supply sufficient quantities of
products to conduct clinical trials and for the manufacture,
packaging, labeling and distribution of finished pharmaceutical
products if any of our potential products are approved for
commercialization. If we are unable to contract for a
sufficient supply of our potential pharmaceutical products on
acceptable terms, our preclinical and human clinical testing
schedule may be delayed, resulting in

                                 7

the delay of our clinical programs and submission of product
candidates for regulatory approval, which could cause our
business to suffer. Our business could suffer if there are
delays or difficulties in establishing relationships with
manufacturers to produce, package, label and distribute our
finished pharmaceutical or other medical products, if any,
market introduction or subsequent sales of such products.
Moreover, contract manufacturers that we may use must adhere to
current Good Manufacturing Practices, as required by the FDA.
In this regard, the FDA will not issue a pre-market approval or
product and establishment licenses, where applicable, to a
manufacturing facility for the products until the manufacturing
facility passes a pre-approval plant inspection. If we are
unable to obtain or retain third party manufacturing on
commercially acceptable terms, we may not be able to
commercialize our products as planned. Our potential dependence
upon third parties for the manufacture of our products may
adversely affect our ability to generate profits or acceptable
profit margins and our ability to develop and deliver such
products on a timely and competitive basis.

Our amlexanox 5% paste is marketed in the US as Aphthasol(R).
We selected Contract Pharmaceuticals Ltd. Canada as our new
manufacturer of amlexanox 5% paste and they manufacture product
for the US market and initial qualifying batches of the product
for Europe. We re-launched Aphthasol(R) in the US market in
September 2004 and recorded sales in the third and fourth
quarters of 2004 and in the quarter ended March 31, 2005.

Amlexanox 5% paste was approved by regulatory authorities for
sale in the UK. Approval to market was granted in Austria,
Germany, Greece, Finland, Ireland, Luxembourg, The Netherlands,
Norway, Portugal, and Sweden. We did not receive approvals for
France, Italy and Belgium. We licensed manufacturing rights to
ProStrakan, Zambon, Esteve and Mipharm for specific countries
in Europe. Contract Pharmaceuticals Ltd. Canada has also been
selected as our European supplier of amlexanox 5% paste and
this facility has been approved for European supply.

We licensed our patents for worldwide manufacturing and
marketing for Zindaclin(R) and our ResiDerm(R) technology to
ProStrakan Ltd. for the period of the patents. We receive a
share of the licensing revenues and royalty on the sales of the
product. ProStrakan has a contract manufacturer for
Zindaclin(R) which is a European Union approved facility.
Zindaclin(R) is approved in the UK and throughout Europe in
most European Union countries including new member states and
several non-European markets. Zindaclin(R) is marketed in the
UK, France, Germany, Ireland, Belgium, Cyprus, Israel and
Korea. Zindaclin(R) is under regulatory review in other markets
including Australia, New Zealand, Brazil and others.

We received regulatory approval from the FDA to manufacture and
sell OraDisc(TM) A in September 2004 and are proceeding with
our manufacturing and marketing plans for 2005.

AP5346 is manufactured by third parties for our Phase I/II
clinical trials. Manufacturing is ongoing for the current
clinical trials. Certain manufacturing steps are conducted by
the Company to enable significant cost savings to be realized.

We are subject to extensive governmental regulation which
increases our cost of doing business and may affect our ability
to commercialize any new products that we may develop.
- ---------------------------------------------------------------

The FDA and comparable agencies in foreign countries impose
substantial requirements upon the

                                  8

introduction of pharmaceutical products through lengthy and
detailed laboratory, preclinical and clinical testing
procedures and other costly and time-consuming procedures to
establish their safety and efficacy. All of our drugs and drug
candidates require receipt and maintenance of governmental
approvals for commercialization. Preclinical and clinical
trials and manufacturing of our drug candidates are subject to
the rigorous testing and approval processes of the FDA and
corresponding foreign regulatory authorities. Satisfaction of
these requirements typically takes a significant number of
years and can vary substantially based upon the type,
complexity and novelty of the product. The status of our
principal products is as follows:

* 5% amlexanox paste is an approved product for sale in the US
  (Aphthasol(R)); approved in the UK and Canada but not yet sold;
  approved in ten EU countries but not yet sold;
* Zindaclin(R) is an approved product for sale in the UK and
  extensively throughout European Union countries; and is in the
  approval process in other markets.
* OraDisc(TM) A is an approved product for sale in the US as of
  September 2004; we are completing steps for manufacturing and
  sale of the product in 2005.
* Our other OraDisc(TM) products are currently in the pre-
  clinical phase.
* AP5346 has completed a Phase I clinical trial in Europe and
  has been approved for the commencement of a Phase I trial in
  the US by the FDA.
* Mucoadhesive liquid technology patient recruitment in the
  clinical trial is on hold pending commercial developments.
* Vitamin mediated delivery technology is currently in the pre-
  clinical phase.
* We also have other products in the preclinical phase.

Due to the time consuming and uncertain nature of the drug
candidate development process and the governmental approval
process described above, we cannot assure investors when we,
independently or with our collaborative partners, might submit
a New Drug Application, or "NDA", for FDA or other regulatory
review.

Government regulation also affects the manufacturing and
marketing of pharmaceutical products. Government regulations
may delay marketing of our potential drugs for a considerable
or indefinite period of time, impose costly procedural
requirements upon our activities and furnish a competitive
advantage to larger companies or companies more experienced in
regulatory affairs. Delays in obtaining governmental regulatory
approval could adversely affect our marketing as well as our
ability to generate significant revenues from commercial sales.
Our drug candidates may not receive FDA or other regulatory
approvals on a timely basis or at all. Moreover, if regulatory
approval of a drug candidate is granted, such approval may
impose limitations on the indicated use for which such drug may
be marketed. Even if we obtain initial regulatory approvals for
our drug candidates, our drugs and our manufacturing facilities
would be subject to continual review and periodic inspection,
and later discovery of previously unknown problems with a drug,
manufacturer or facility may result in restrictions on the
marketing or manufacture of such drug, including withdrawal of
the drug from the market. The FDA and other regulatory
authorities stringently apply regulatory standards and failure
to comply with regulatory standards can, among other things,
result in fines, denial or withdrawal of regulatory approvals,
product recalls or seizures, operating restrictions and
criminal prosecution.

The uncertainty associated with preclinical and clinical
testing may affect our ability to successfully commercialize
new products.
- ------------------------------------------------------------

                                  9

Before we can obtain regulatory approvals for the commercial
sale of any of our potential drugs, the drug candidates will be
subject to extensive preclinical and clinical trials to
demonstrate their safety and efficacy in humans.  Preclinical
or clinical trials of any of our future drug candidates may not
demonstrate the safety and efficacy of such drug candidates at
all or to the extent necessary to obtain regulatory approvals.
In this regard, for example, adverse side effects can occur
during the clinical testing of a new drug on humans which may
delay ultimate FDA approval or even lead us to terminate our
efforts to develop the drug for commercial use. Like other
companies in the biotechnology industry, we have suffered
significant setbacks in advanced clinical trials, even after
demonstrating promising results in earlier trials. In
particular, OraDisc(TM) and polymer platinate have taken longer
to progress through clinical trials than originally planned.
This extra time has not been related to concerns of the
formulations but rather due to the lengthy regulatory process.
The failure to adequately demonstrate the safety and efficacy
of a drug candidate under development could delay or prevent
regulatory approval of the drug candidate. A delay or failure
to receive regulatory approval for any of our drug candidates
could prevent us from successfully commercializing such
candidates and we could incur substantial additional expenses
in our attempts to further develop such candidates and obtain
future regulatory approval.

We may incur substantial product liability expenses due to the
use or misuse of our products for which we may be unable to
obtain insurance coverage.
- --------------------------------------------------------------

Our business exposes us to potential liability risks that are
inherent in the testing, manufacturing and marketing of
pharmaceutical products. These risks will expand with respect
to our drug candidates, if any, that receive regulatory
approval for commercial sale and we may face substantial
liability for damages in the event of adverse side effects or
product defects identified with any of our products that are
used in clinical tests or marketed to the public. We generally
procure product liability insurance for drug candidates that
are undergoing human clinical trials. Product liability
insurance for the biotechnology industry is generally
expensive, if available at all, and as a result, we may be
unable to obtain insurance coverage at acceptable costs or in
a sufficient amount in the future, if at all. We may be unable
to satisfy any claims for which we may be held liable as a
result of the use or misuse of products which we have
developed, manufactured or sold and any such product liability
claim could adversely affect our business, operating results or
financial condition.

We may incur significant liabilities if we fail to comply with
stringent environmental regulations or if we did not comply
with these regulations in the past.
- --------------------------------------------------------------

Our research and development processes involve the controlled
use of hazardous materials. We are subject to a variety of
federal, state and local governmental laws and regulations
related to the use, manufacture, storage, handling and disposal
of such material and certain waste products. Although we
believe that our activities and our safety procedures for
storing, using, handling and disposing of such materials comply
with the standards prescribed by such laws and regulations, the
risk of accidental contamination or injury from these materials
cannot be completely eliminated. In the event of such accident,
we could be held liable for any damages that result and any
such liability could exceed our resources.

Intense competition may limit our ability to successfully
develop and market commercial products.
- ---------------------------------------------------------

                                 10

The biotechnology and pharmaceutical industries are intensely
competitive and subject to rapid and significant technological
change. Our competitors in the United States and elsewhere are
numerous and include, among others, major multinational
pharmaceutical and chemical companies, specialized
biotechnology firms and universities and other research
institutions.

The following products may compete with polymer platinate:

* Cisplatin, marketed by Bristol-Myers-Squibb, the originator
  of the drug, and several generic manufacturers;
* Carboplatin, marketed by Bristol-Myers-Squibb, the originator
  of the drug and several generic manufacturers; and
* Oxaliplatin, marketed exclusively by Sanofi-Synthelabo.

The following companies are working on therapies and
formulations that may be competitive with our polymer
platinate:

* Antigenics and Regulon are developing liposomal formulations; and
* American Pharmaceutical Partners, Cell Therapeutics, Daiichi,
  Enzon and DebioPharm are developing alternate drugs in
  combination with polymers and other drug delivery systems.

The following products may compete with Residerm(R) products:

* Benzamycin, marketed by a subsidiary of Aventis;
* Cleocin-T and a generic topical clindamycin, marketed by Pfizer;
* Benzac, marketed by Galderma; and
* Triaz, marketed by Medicis Pharmaceutical Corp.

Technology and prescription steroids such as Kenalog in
OraBase, developed by Bristol-Myers Squibb, may compete with
our commercialized Aphthasol(R) product. Over-the-counter
("OTC") products including Orajel - Del Laboratories and
Anbesol - Wyeth Consumer Healthcare also compete in the
aphthous ulcer market.

Companies working on therapies and formulations that may be
competitive with our vitamin mediated drug delivery system
include Bristol-Myers-Squibb, Centocor (acquired by Johnson &
Johnson), GlaxoSmithKline, Imclone and Xoma which are
developing targeted monoclonal antibody therapy.

Amgen, CuraGen, McNeil, MGI Pharma and OSI Pharmaceuticals are
developing products to treat mucositis that may compete with
our mucoadhesive liquid technology.

BioDelivery, Biovail Corporation, Cellgate, CIMA Labs, Inc.,
Depomed Inc., Emisphere Technologies, Inc., Eurand, Flamel
Technologies, Nobex and Xenoport are developing products which
compete with our oral drug delivery system.

Many of these competitors have and employ greater financial and
other resources, including larger research and development,
marketing and manufacturing organizations. As a result, our
competitors may successfully develop  technologies and drugs
that are more effective or less costly than any that we are
developing or which would render our technology and future
products obsolete and noncompetitive.

                                 11

In addition, some of our competitors have greater experience
than we do in conducting preclinical and clinical trials and
obtaining FDA and other regulatory approvals. Accordingly, our
competitors may succeed in obtaining FDA or other regulatory
approvals for drug candidates more rapidly than we do.
Companies that complete clinical trials, obtain required
regulatory agency approvals and commence commercial sale of
their drugs before their competitors may achieve a significant
competitive advantage. Drugs resulting from our research and
development efforts or from our joint efforts with
collaborative partners therefore may not be commercially
competitive  with our competitors' existing products or
products under development.

Our ability to successfully develop and commercialize our drug
candidates will substantially depend upon the availability of
reimbursement funds for the costs of the resulting drugs and
related treatments.
- --------------------------------------------------------------

The successful commercialization of, and the interest of
potential collaborative partners to invest in the development
of our drug candidates, may depend substantially upon
reimbursement of the costs of the resulting drugs and related
treatments at acceptable levels from government authorities,
private health insurers and other organizations, including
health maintenance organizations, or HMOs. To date, the costs
of our marketed products Aphthasol(R) and Zindaclin(R) generally
have been reimbursed at acceptable levels; however, the amount
of such reimbursement in the United States or elsewhere may be
decreased in the future or may be unavailable for any drugs
that we may develop in the future. Limited reimbursement for
the cost of any drugs that we develop may reduce the demand
for, or the price of such drugs, which would hamper our ability
to obtain collaborative partners to commercialize our drugs, or
to obtain a sufficient financial return on our own manufacture
and commercialization of any future drugs.

The market may not accept any pharmaceutical products that we
successfully develop.
- -------------------------------------------------------------

The drugs that we are attempting to develop may compete with a
number of well-established drugs manufactured and marketed by
major pharmaceutical companies. The degree of market acceptance
of any drugs developed by us will depend on a number of
factors, including the establishment and demonstration of the
clinical efficacy and safety of our drug candidates, the
potential advantage of our drug candidates over existing
therapies and the reimbursement policies of government and
third-party payers. Physicians, patients or the medical
community in general may not accept or use any drugs that we
may develop independently or with our collaborative partners
and if they do not, our business could suffer.

In 1996, the 5% amlexanox paste product was approved for sale
in the United States. To date, the product sales have not been
significant. On July 22, 2002, we acquired the rights to it
from Block Drug Company. The product has been approved in the
UK and Canada but has not been launched in any markets other
than the United States. We re-launched Aphthasol(R) in the US
market in September 2004 and recorded sales in the third and
fourth quarters of 2004 as well as the quarter ended March 31, 2005.

We received regulatory approval from the FDA to manufacture and
sell OraDisc(TM) A in September 2004 and are proceeding with
our manufacturing and marketing plans for 2005.

Trends toward managed health care and downward price pressures
on medical products and services may limit our ability to
profitably sell any drugs that we may develop.
- ---------------------------------------------------------------

                                 12

Lower prices for pharmaceutical products may result from:

* third-party payers' increasing challenges to the prices
  charged for medical products and services;
* the trend toward managed health care in the United States and
  the concurrent growth of HMOs and similar organizations that
  can control or significantly influence the purchase of
  healthcare services and products; and
* legislative proposals to reform healthcare or reduce
  government insurance programs.

The cost containment measures that healthcare providers are
instituting, including practice protocols and guidelines and
clinical pathways, and the effect of any healthcare reform,
could limit our ability to profitably sell any drugs that we
may successfully develop. Moreover, any future legislation or
regulation, if any, relating to the healthcare industry or
third-party coverage and reimbursement, may cause our business
to suffer.

We may not be successful in protecting our intellectual
property and proprietary rights.
- --------------------------------------------------------

Our success depends, in part, on our ability to obtain U.S. and
foreign patent protection for our drug candidates and
processes, preserve our trade secrets and operate our business
without infringing the proprietary rights of third parties.
Legal standards relating to the validity of patents covering
pharmaceutical and biotechnological inventions and the scope of
claims made under such patents are still developing and there
is no consistent policy regarding the breadth of claims allowed
in biotechnology patents. The patent position of a
biotechnology firm is highly uncertain and involves complex
legal and factual questions. We cannot assure you that any
existing or future patents issued to, or licensed by, us will
not subsequently be challenged, infringed upon, invalidated or
circumvented by others. As a result, although we, together with
our subsidiaries, are either the owner or licensee to 24 U.S.
patents and to 19 U.S. patent applications now pending, and 8
European patents and 15 European patent applications, we cannot
assure investors that any additional patents will issue from
any of the patent applications owned by, or licensed to, us.
Furthermore, any rights that we may have under issued patents
may not provide us with significant protection against
competitive products or otherwise be commercially viable.
Our patents for the following technologies expire in the years
and during the date ranges indicated below:

* 5% amlexanox paste in 2011
* Zindaclin(R) and Residerm(R) between 2007 and 2011
* OraDisc(TM) in 2020
* AP5280 in 2021
* AP5346 in 2021
* Mucoadhesive technology, patents are pending
* Vitamin mediated technology between 2006 and 2019

In addition, patents may have been granted to third parties or
may be granted covering products or processes that are
necessary or useful to the development of our drug candidates.
If our drug candidates or processes are found to infringe upon
the patents or otherwise impermissibly utilize the intellectual
property of others, our development, manufacture and sale of
such drug

                                 13

candidates could be severely restricted or prohibited. In such
event, we may be required to obtain licenses from third parties
to utilize the patents or proprietary rights of others. We
cannot assure investors that we will be able to obtain such
licenses on acceptable terms, if at all. If we become involved
in litigation regarding our intellectual property rights or the
intellectual property rights of others, the potential cost of
such litigation, regardless of the strength of our legal
position, and the potential damages that we could be required
to pay could be substantial.

Our business could suffer if we lose the services of, or fail
to attract, key personnel.
- -------------------------------------------------------------

Due to the specialized scientific nature of our business, we
are highly dependent upon our ability to attract and retain
qualified management, scientific and technical personnel. In
view of the stage of our development and our research and
development programs, we have restricted our hiring to research
scientists and a small administrative staff and we have made
only limited investments in manufacturing, production, sales or
regulatory compliance resources. There is intense competition
among major pharmaceutical and chemical companies, specialized
biotechnology firms and universities and other research
institutions for qualified personnel in the areas of our
activities, however, and we may be unsuccessful in attracting
and retaining these personnel.

Ownership of our shares is concentrated, to some extent, in the
hands of a few investors which could limit the ability of our
other stockholders to influence the direction of the company.
- ---------------------------------------------------------------

Larry N. Feinberg (Oracle Partners LP, Oracle Institutional
Partners LP and Oracle Investment Management Inc.) and
Heartland Advisors, Inc. beneficially owned approximately 11.9%
and 10.9%, respectively, of our common stock as of March 31,
2005. Accordingly, they collectively may have the ability to
significantly influence or determine the election of all of our
directors or the outcome of most corporate actions requiring
stockholder approval. They may exercise this ability in a
manner that advances their best interests and not necessarily
those of our other stockholders.

Provisions of our charter documents could discourage an
acquisition of our company that would benefit our stockholders
and may have the effect of entrenching, and making it difficult
to remove, management.
- ---------------------------------------------------------------

Provisions of our Certificate of Incorporation, By-laws and
Stockholders Rights Plan may make it more difficult for a third
party to acquire control of the company, even if a change in
control would benefit our stockholders. In particular, shares
of our preferred stock may be issued in the future without
further stockholder approval and upon such terms and
conditions, and having such rights, privileges and preferences,
as our Board of Directors may determine, including, for
example, rights to convert into our common stock. The rights of
the holders of our common stock will be subject to, and may be
adversely affected by, the rights of the holders of any of our
preferred stock that may be issued in the future. The issuance
of our preferred stock, while providing desirable flexibility
in connection with possible acquisitions and other corporate
purposes, could have the effect of making it more difficult for
a third party to acquire control of us. This could limit the
price that certain investors might be willing to pay in the
future for shares of our common stock and discourage these
investors from acquiring a majority of our common stock.
Further, the existence of these corporate governance provisions
could have the effect of entrenching management and making it
more difficult to change our management.

                                 14

AMEX listing requirements.
- --------------------------

Our common stock is presently listed on the American Stock
Exchange under the symbol "AKC". All companies listed on AMEX
are required to comply with certain continued listing
standards, including corporate governance requirements,
maintaining stockholders' equity at required levels, obtaining
shareholder approvals for certain transactions, share price
requirements and other rules and regulations of AMEX. AMEX
listing requirements allow us to issue a maximum aggregate of
3,089,422 shares of our Common Stock in connection with our
Secured Convertible Notes and the SEDA without receipt of
shareholder approval. Any issuances above such amount would
require shareholder approval or would be a violation of AMEX
regulations. We are not in compliance with this stockholders'
equity standard as of March 31, 2005. If we are unable to
remedy any listing standard noncompliance with AMEX under its
regulations and within the required time frames for such
remediation, or otherwise regain compliance, we cannot assure
investors that our common stock will continue to remain
eligible for listing on AMEX. In the event that our common
stock is delisted from AMEX its market value and liquidity
could be materially adversely affected.

Substantial sales of our common stock could lower our stock price.
- -------------------------------------------------------------------

The market price for our common stock could drop as a result of
sales of a large number of our presently outstanding shares or
shares that we may issue or be obligated to issue in the
future. Substantially, all of the 15,724,734 shares of our
common stock that are outstanding as of May 9, 2005, are
unrestricted and freely tradable or tradable pursuant to a
resale registration statement or under Rule 144 of the
Securities Act.

Failure to achieve and maintain effective internal controls
could have a material adverse effect on our business.
- -----------------------------------------------------------

Effective internal controls are necessary for us to provide
reliable financial reports. If we cannot provide reliable
financial reports, our operating results could be harmed. All
internal control systems, no matter how well designed, have
inherent limitations. Therefore, even those systems determined
to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation.

While we continue to evaluate and improve our internal
controls, we cannot be certain that these measures will ensure
that we implement and maintain adequate controls over our
financial processes and reporting in the future. Any failure to
implement required new or improved controls, or difficulties
encountered in their implementation, could harm our operating
results or cause us to fail to meet our reporting obligations.

For the year ended December 31, 2004, our management determined
that our internal control over financial reporting was
effective to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with
generally accepted accounting principles. Our auditors
identified two material weaknesses in our internal controls and
procedures during the course of their evaluation for the year
ended December 31, 2004. If we fail to maintain the adequacy of
our internal controls, as such standards are modified,
supplemented or amended from time to time, we may not be able
to ensure that we can conclude on an ongoing basis that we have
effective internal control over financial reporting in
accordance with Section 404 of the Sarbanes-Oxley Act. Failure
to achieve

                                 15

and maintain an effective internal control environment could
cause investors to lose confidence in our reported financial
information, which could have a material adverse effect on our
stock price.

ITEM 1 FINANCIAL STATEMENTS

The response to this Item is submitted as a separate section of
this report.

ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
       CONDITION AND RESULTS OF OPERATIONS

This Quarterly Report on Form 10-Q contains certain statements
that are forward-looking within the meaning of Section 27a of
the Securities Act of 1933, as amended, and Section 21E of the
Securities and Exchange Act of 1934, as amended, and that
involve risks and uncertainties, including, but not limited to
the uncertainties associated with research and development
activities, clinical trials, our ability to raise capital, the
timing of and our ability to achieve regulatory approvals,
dependence on others to market our licensed products,
collaborations, future cash flow, the timing and receipt of
licensing and milestone revenues, the future success of our
marketed products and products in development, our ability to
manufacture amlexanox products in commercial quantities, our
sales projections, and the sales projections of our licensing
partners, our ability to achieve licensing milestones and other
risks described below as well as those discussed elsewhere in
this Form 10-Q, documents incorporated by reference and other
documents and reports that we file periodically with the
Securities and Exchange Commission. Forward-looking statements
contained in this Form 10-Q include, but are not limited to
those relating to anticipated product approvals and timing
thereof, the terms of future licensing arrangements, our
ability to secure additional financing for our operations, our
belief that our net cash burn rate for the next twelve months
to be approximately $600,000 per month, our ability to repay
our outstanding debt obligations, our ability to fund our
operations (other than debt repayment) through March 2006, and
our expected capital expenditures.

OVERVIEW

We are an emerging pharmaceutical company focused on developing
both novel low development risk product candidates and
technologies with longer-term major product opportunities. We
are a Delaware corporation.

Together with our subsidiaries, we have proprietary patents or
rights to several drug delivery technology platforms,
including:

* synthetic polymer targeted delivery,
* vitamin mediated targeted delivery,
* vitamin mediated oral delivery,
* bioerodible cross-linker technology,
* mucoadhesive disc technology,
* hydrogel particle aggregate technology, and
* Residerm(R) topical delivery.

In addition, we are marketing in the United States -
Aphthasol(R), the first FDA approved product for the treatment
of canker sores. We are developing new formulations and
delivery forms of

                                 16

amlexanox including mucoadhesive disc delivery and mucoadhesive
liquid delivery.

Our amlexanox 5% paste is marketed in the US as Aphthasol(R).
We selected Contract Pharmaceuticals Ltd. Canada as our
manufacturer of amlexanox 5% paste and it completed full scale
production in September 2004. We re-launched Aphthasol(R) in
the US market in September 2004 and recorded sales in the third
and fourth quarters of 2004 as well as the quarter ended March
31, 2005.

Since our inception, we have devoted our resources primarily to
fund our research and development programs. We have been
unprofitable since inception and to date have received limited
revenues from the sale of products. We cannot assure investors
that we will be able to generate sufficient product revenues to
attain profitability on a sustained basis or at all. We expect
to incur losses for the next several years as we continue to
invest in product research and development, preclinical
studies, clinical trials and regulatory compliance. As of March
31, 2005, our accumulated deficit was $66,887,000.

On March 30, 2005, the Company finalized an agreement with
Cornell Capital Partners and Highgate House Funds providing
funding in the form of Secured Convertible Note for net
proceeds of approximately $2,360,000, and a Equity Distribution
Agreement under which, subject to terms of the Agreement, the
Company can draw up to $15,000,000 in working capital over a 2-
year period (see further discussion under Liquidity and Capital
Resources).

On February 24, 2004 we closed a private placement sale of our
common stock pursuant to which we sold 1,789,371 shares of our
common stock at a per share price of $5.40. We received gross
proceeds of $9,663,000 from this sale and had expenses of
$647,000. The investors also received 5 year warrants at an
exercise price of $7.10 per share to purchase 447,344 shares of
our common stock and the placement agents received warrants in
the offering at an exercise price of $5.40 per share to
purchase 156,481 shares of our common stock.

On April 18, 2005 we announced that we executed an exclusive
License Agreement granting Discuss Dental, Inc. the US
marketing rights for amlexanox. The rights granted are for
amlexanox 5% paste, currently marketed in the United States for
the treatment of canker sores and OraDisc(TM) A, which was
approved by the FDA in September 2004 for the same indication.
In addition, we granted Discuss Dental the rights to any future
product improvements for amlexanox in oral disease. Under the
terms of the agreement, Discuss Dental will pay us a licensing
fee and will make milestone payments.

LIQUIDITY AND CAPITAL RESOURCES

We have funded our operations primarily through private sales
of common stock and convertible notes and our principal source
of liquidity is cash and cash equivalents. Contract research
payments, licensing fees and milestone payments from corporate
alliances and mergers have also provided funding for
operations. As of March 31, 2005 our cash and cash equivalents
and short-term investments were $2,888,000 and our working
capital was $(9,474,000). Our working capital at March 31, 2005
represented a decrease of $1,686,000 as compared to our working
capital as of December 31, 2004 of $(7,788,000). The decrease
in working capital was due mainly to the loss from operations
for the three months ended March 31, 2005.

As of March 31, 2005, the Company had a working capital deficit
of approximately $9,474,000.

                                17

As of that date, the Company did not have enough capital to
achieve its near, medium or long-term goals. On March 30, 2005,
the Company reached an agreement which management believes will
provide sufficient capital to achieve its short-term goals, and
depending upon results may provide sufficient capital to meet
its long-term goals.

As of March 30, 2005 the Company executed a Standby Equity
Distribution Agreement (SEDA) with Cornell Capital Partners.
Under the SEDA, subject to terms of the SEDA, the Company may
issue and sell to Cornell Capital Partners common stock for a
total purchase price of up to  a maximum of $15,000,000. The
purchase price for the shares is equal to their market price,
which is defined in the SEDA as 98% of the lowest volume
weighted average price of the common stock during a specified
period of trading days following the date notice is given by
the Company that it desires to access the SEDA. Further, we
have agreed to pay Cornell Capital Partners, L.P. 3.5% of the
proceeds that we receive under the SEDA. The amount of each
draw down  is subject to a maximum amount of $1,000,000. The
terms of the SEDA do not allow us to make any draw downs if the
draw down would cause Cornell Capital to own in excess of 9.9%
of our outstanding shares of common stock. Based on the number
of shares of our common stock currently outstanding, at volume
weighted average price of $2.50, we could sell to Cornell
Capital approximately $3,900,000 of our common stock subject to
the 9.9% limitation. Thus, in order for the Company to receive
all the funding available under the SEDA and have the financial
resources it needs for operations and debt service, Cornell
Capital must sell through to the market a significant portion
of the shares it purchases under the arrangement. The Company
believes that because the shares sold to Cornell Capital will
be covered by an effective registration statement and Cornell
Capital has a history of not holding significant positions in
companies in which it invests, the shares purchased by Cornell
Capital will be sold to the marketplace to maintain ownership
below 9.9%. Provided that continuing sales to the marketplace
are possible, the Company believes Cornell Capital will not
accumulate 9.9% of the outstanding common stock of the Company;
and, accordingly, the Company will be able to fully utilize the
$15,000,000 made available through the SEDA. Upon closing of
the transaction, Cornell Capital Partners received a one-time
commitment fee of 146,500 shares of the Company's common stock.
As of the same date, the Company entered into a Placement Agent
Agreement with Newbridge Securities Corporation, a registered
broker-dealer. Pursuant to the Placement Agent Agreement, the
Company  paid a one-time placement agent fee of 3,500 shares of
common stock.

In addition, as of March 30, 2005, the Company executed a
Securities Purchase Agreement with Cornell Capital Partners and
Highgate House Funds. Under the Securities Purchase Agreement,
Cornell Capital Partners and Highgate House Funds purchased an
aggregate of $2,633,000 principal amount of Secured Convertible
Notes from the Company (net proceeds to the Company of
$2,300,000). The Secured Convertible Notes accrue interest at
a rate of 7% per year and mature 12 months from the issuance
date with scheduled monthly repayment commencing on November 1,
2005, to the extent that the Secured Convertible Note has not
been converted to common stock. The Secured Convertible Note is
convertible into the Company's common stock at the holder's
option any time up to maturity at a conversion price equal to
$4.00. The Secured Convertible Notes are secured by all of the
assets of the Company. The Company has the right to redeem the
Secured Convertible Notes upon 3 business days notice for 110%
of the amount redeemed. Pursuant to the Securities Purchase
Agreement, the Company issued to the holders an aggregate of
50,000 shares of common stock of the Company.

Each of the SEDA, Security Purchase Agreement and related
agreements were held in escrow

                                 18

pending our filing of the Form 10-K and the issuance of shares
of common stock required to be issued under the Agreement. On
April 1, 2005 we received the funds.

On February 24, 2004 we closed a private placement sale of our
common stock pursuant to which we sold 1,789,371 shares of our
common stock at a per share price of $5.40. We received gross
proceeds of $9,663,000 from this sale and had expenses of
$647,000. The investors also received 5 year warrants at an
exercise price of $7.10 per share to purchase 447,344 shares of
our common stock and the placement agents received warrants in
the offering at an exercise price of $5.40 per share to
purchase 156,481 shares of our common stock.

We have also issued an aggregate of $13,530,000 of convertible
notes, which are due in two parts -$8,030,000 is due on
September 13, 2005 and $5,500,000 is due on September 13, 2008.
The notes which bear interest at a rate of 7.7% per annum with
$1,042,000 of interest due annually on each September 13, may
convert to common stock at a conversion price of $5.50 per
share. Should the holders of the notes not elect to convert
them to common stock, or if we are not able to force the
conversion of the notes by their terms, we must repay the
amounts on the due dates. A failure to restructure our existing
convertible notes or obtain necessary additional capital in the
future could jeopardize our operations. We do not have
sufficient funds to repay our convertible notes at their
maturity. We may not be able to restructure the convertible
notes or obtain additional financing to repay them on terms
acceptable to us, if at all. If we raise additional funds by
selling equity securities, the relative equity ownership of our
existing investors would be diluted and the new investors could
obtain terms more favorable than previous investors. A failure
to restructure our convertible notes or obtain additional
funding to repay the convertible notes and support our working
capital and operating requirements, could cause us to be in
default of our convertible notes and prevent us from making
expenditures that are needed to allow us to maintain our
operations.

We have generally incurred negative cash flows from operations
since inception, and have expended, and expect to continue to
expend in the future, substantial funds to complete our planned
product development efforts. Since inception, our expenses have
significantly exceeded revenues, resulting in an accumulated
deficit as of March 31, 2005 of $66,891,000. We expect that our
existing capital resources together with anticipated licensing
revenues and royalties will be adequate to fund our current
level of operations through March 2006 excluding any obligation
to repay the convertible notes, the debt service on the
convertible notes and the secured convertible notes. We cannot
assure investors that we will ever be able to generate
significant product revenue or achieve or sustain
profitability. We currently do not have the cash resources to
repay our Convertible Notes due in September 2005 or our
Secured Convertible Notes in March 2006. Our financing plan
through the use of the SEDA or other sales of equity are
expected to provide the resources to repay such notes.

We plan to expend substantial funds to conduct research and
development programs, preclinical studies and clinical trials
of potential products, including research and development with
respect to our acquired and developed technology. Our future
capital requirements and adequacy of available funds will
depend on many factors, including:

* the ability to convert, repay or restructure our outstanding
  convertible notes and secured convertible notes;
* the successful commercialization of amlexanox and
  Zindaclin(R);
* the ability to establish and maintain collaborative
  arrangements with corporate

                                 19

  partners for the research, development and
  commercialization of products;
* continued scientific progress in our research and
  development programs;
* the magnitude, scope and results of preclinical
  testing and clinical trials;
* the costs involved in filing, prosecuting and
  enforcing patent claims;
* the costs involved in conducting clinical trials;
* competing technological developments;
* the cost of manufacturing and scale-up;
* the ability to establish and maintain effective
  commercialization arrangements and activities; and
* successful regulatory filings.

FIRST QUARTER 2005 COMPARED TO FIRST QUARTER 2004

Our licensing revenue in the first quarter of 2005
was $11,000, as compared to licensing revenue of
$4,000 in same quarter of 2004, an increase of
$7,000. We recognize licensing revenue over the
period of the performance obligation under our
licensing agreements. Licensing revenue recognized
in both 2005 and 2004 was from several agreements,
including agreements related to various amlexanox
projects and Residerm(R).

There were $117,000 in product sales of Aphthasol(R)
in the first quarter of 2005, as compared to no
sales in the first quarter of 2004 due to a supply
interruption in such period. Aphthasol(R) product
sales recommenced in September 2004.

Royalty income in the first quarter of 2005 was
$27,000, as compared to $16,000 in the first quarter
of 2004. Increased sales of Zindaclin(R) resulted in
$11,000 higher royalty income.

Total research spending for the first quarter of
2005 was $1,319,000, as compared to $1,144,000 for
the same period in 2004, an increase of $175,000.
The increase in expenses was primarily the result of:

* higher costs ($82,000) for pre-production of OraDisc(TM) A;
* higher costs for product and clinical trials for
  AP5346 ($71,000); and
* higher salary and related costs due to additional
  employees ($74,000).

The increase in expenses was partially offset by
lower costs for other projects ($52,000).

Our cost of product sales was $102,000 in the first
quarter of 2005, as compared to $26,000 in the first
quarter of 2004, an increase of $76,000.  The
increase in cost of product sales was due to
increased product sales and fees associated with
sales in 2005 versus no sales and fees in 2004 .

Total general and administrative expenses were
$689,000 for the first quarter of 2005, a decrease
of  $65,000 as compared to the same period in 2004.
The decrease in spending was due primarily to the
following:

* lower patent expenses ($119,000), due to new
  patent expenses and PCT filings in 2004;

                                 20

* lower salary and related costs ($16,000);
* lower investor relations expenses ($10,000);

The decrease in general and administrative expenses
is partially offset by:

* higher license fees ($39,000);
* higher professional fees ($15,000);
* higher general business consulting fees ($15,000); and
* by other net increases ($11,000).

Depreciation and amortization was $164,000 for the
first quarter of 2005 as compared to $160,000 for
the same period in 2004 reflecting an increase of
$4,000. The increase in depreciation and
amortization was due to increased depreciation
resulting from the acquisition of additional capital assets.

Total operating expenses in the first quarter of
2005 were $2,274,000 as compared to total operating
expenses of $2,084,000 for the same period in 2004,
an increase of $190,000.

Loss from operations in the first quarter of 2005
was $2,119,000 as compared to a loss of $2,064,000
for the same period in 2004, an increase of $55,000.

Interest and miscellaneous income was $10,000 for
the first quarter of 2005 as compared to $33,000 for
the same period in 2004, a decrease of $23,000. The
decrease in interest income was due to lower cash
balances and lower interest rates in 2005 as
compared with 2004.

Interest expense was $313,000 for the first quarter
of 2005 as compared to $320,000 for the same period
in 2004, a decrease of $7,000.

Net loss in the first quarter of 2005 was
$2,422,000, or a $0.16 basic and diluted loss per
common share, compared with a loss of $2,351,000, or
a $0.17 basic and diluted loss per common share for
the same period in 2004, an increased loss of
$71,000 in 2005.

ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We invest our excess cash and short-term investments
in certificates of deposit, corporate securities
with high quality ratings, and U.S. government
securities. These investments are not held for
trading or other speculative purposes. These
financial investment securities all mature in 2005
and 2006 and their estimated fair value approximates
cost. Changes in interest rates affect the
investment income we earn on our investments and,
therefore, impact our cash flows and results of
operations. A hypothetical 50 basis point decrease
in interest rates would result in a decrease in
annual interest income and a corresponding increase
in net loss of approximately $3,000. This estimated
effect assumes no changes in our short-term
investments at March 31, 2005. We do not believe
that we are exposed to any other market risks, as
defined under applicable SEC regulations. We are not
exposed to risks for changes in commodity prices, or
any other market risks.

                                 21

ITEM 4 CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and
procedures. Our chief executive officer and our
chief financial officer, after evaluating the
effectiveness of our "disclosure controls and
procedures" (as defined in Rules 13a-15(e) and 15d-
(e) of the Securities and Exchange Act of 1934, as
amended (the "Exchange Act")) as of the end of the
period covered by this quarterly report, concluded
that the Company's disclosure controls and
procedures were (1) designed to ensure that material
information relating to the Company, including its
consolidated subsidiaries, is made known to the
Company's chief executive officer and chief
financial officer by others within those entities,
particularly during the period in which this report
was being prepared, and (2) effective, in that they
provide reasonable assurance that information
required to be disclosed by the Company in the
reports that it files or submits under the Exchange
Act is recorded, processed, summarized and reported
within the time periods specified in the SEC's rules
and forms.

(b) Changes in internal controls. Except as set
forth below, there were no changes in our internal
controls over financial reporting during the quarter
ended March 31, 2005 that have materially affected,
or are reasonably likely to material affect, our
internal controls over financial reporting.

(c) As previously reported in our Annual Report on
Form 10-K for the fiscal year ended December 31,
2004 (the "Form 10-K"), our management concluded
that our internal control over financial reporting
was effective as of December 31, 2004.  However, as
disclosed in the Form 10-K, our independent auditors
concluded that we have two material weaknesses in
the areas of segregation of duties and as a result
of an aggregation of three separate significant
deficiencies where the effectiveness of the controls
are dependent on segregation of duties, as set forth
in their attestation report in the Form 10-K. Their
conclusion also points out that "these material
weaknesses did not result in any adjustments to the
annual or interim consolidated financial statements
.... and that "this report does not affect (their)
report dated March 31, 2005" reflecting their
opinion on the financial statements.

(d) Based on the criteria set forth in their
attestation report in the Form 10-K, our independent
auditors determined that proper segregation of
duties do not exist within our accounting and
finance area. While management believes that
sufficient controls are in place,  and that there is
adequate segregation of duties within the business,
it recognizes that this is a perceived material
weakness and is taking the steps it believes are
necessary to mitigate this risk. Management and the
Audit Committee has considered the need for ongoing
monitoring of internal controls under the Sarbanes-
Oxley Act of 2002, as well as strengthening the
internal controls of the business by the engagement
of an outside accounting/finance consulting firm to
perform quarterly procedures designed to assist in
the maintaining and monitoring of an effective
control environment and to mitigate the risk related
to a lack of segregation of duties between senior
accounting/finance personnel. The consulting firm is
expected to report and take instructions directly
from the Audit Committee although management will be
involved in assisting in determining the scope of
the quarterly and annual procedures. Terms and
conditions of this engagement are still under
consideration.

                                22

PART II -- OTHER INFORMATION

ITEM 1 LEGAL PROCEEDINGS

None

ITEM 2 SALES OF UNREGISTERED EQUITY SECURITIES AND
USE OF PROCEEDS

On March 31, 2005, we executed a Standby Equity
Distribution Agreement (SEDA) with Cornell Capital
Partners and a Securities Purchase Agreement with
Cornell Capital Partners and Highgate House Funds
(see Part II - Item 5 - Other Information). Upon
closing of the transaction, Cornell Capital Partners
received a one-time commitment fee of 146,500 shares
of the Company's common stock. As of the same date,
the Company entered into a Placement Agent Agreement
with Newbridge Securities Corporation, a registered
broker-dealer. Pursuant to the Placement Agent
Agreement, the Company  paid a one-time placement
agent fee of 3,500 shares of common stock. The
shares and common stock issued have not been
registered. We relied on Section 4(2) and/or 3(b) of
the 1933 Securities Act and the provisions of
Regulation D as exemptions from the registration
thereunder. The proceeds of the offering will be
used principally for general corporate purposes and
to fund the development of our portfolio of product
candidates.

ITEM 3 DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

ITEM 5 OTHER INFORMATION

As of March 30, 2005 the Company executed a Standby
Equity Distribution Agreement (SEDA) with Cornell
Capital Partners. Under the SEDA, subject to terms
of the SEDA, the Company may issue and sell to
Cornell Capital Partners common stock for a total
purchase price of up to  a maximum of $15,000,000.
The purchase price for the shares is equal to their
market price, which is defined in the SEDA as 98% of
the lowest volume weighted average price of the
common stock during a specified period of trading
days following the date notice is given by the
Company that it desires to access the SEDA. Further,
we have agreed to pay Cornell Capital Partners, L.P.
3.5% of the proceeds that we receive under the SEDA.
The amount of each draw down  is subject to a
maximum amount of $1,000,000. The terms of the SEDA
do not allow us to make any draw downs if the draw
down would cause Cornell Capital to own in excess of
9.9% of our outstanding shares of common stock.
Based on the number of shares of our common stock
currently outstanding, at volume weighted average
price of $2.50, we could sell to Cornell Capital
approximately $3,900,000 of our common stock subject
to the 9.9% limitation. Thus, in order for the
Company to receive all the funding available under
the SEDA and have the financial resources it needs
for operations and debt service, Cornell Capital
must sell through to the market a significant
portion of the shares it purchases under the
arrangement. The Company believes that because the
shares sold to Cornell Capital will be covered by an
effective registration statement and Cornell Capital
has a history of not holding significant positions
in companies in which it invests, the shares
purchased by Cornell Capital will be sold to the
marketplace to maintain ownership below 9.9%.
Provided that continuing sales to the marketplace
are possible, the Company believes Cornell Capital
will not accumulate 9.9% of the outstanding common
stock of the Company; and, accordingly, the Company
will be able to fully

                                 23

utilize the $15,000,000 made available through the
SEDA. Upon closing of the transaction, Cornell
Capital Partners received a one-time commitment fee
of 146,500 shares of the Company's common stock. As
of the same date, the Company entered into a
Placement Agent Agreement with Newbridge Securities
Corporation, a registered broker-dealer. Pursuant to
the Placement Agent Agreement, the Company  paid a
one-time placement agent fee of 3,500 shares of
common stock.

In addition, as of March 30, 2005, the Company
executed a Securities Purchase Agreement with
Cornell Capital Partners and Highgate House Funds.
Under the Securities Purchase Agreement,  Cornell
Capital Partners and Highgate House Funds purchased
an aggregate of $2,633,000 principal amount of
Secured Convertible Notes from the Company (net
proceeds to the Company of $2,300,000). The Secured
Convertible Notes accrue interest at a rate of 7%
per year and mature 12 months from the issuance date
with scheduled monthly repayment commencing on
November 1, 2005 to the extent that the Secured
Convertible Note has not been converted to common
stock. The Secured Convertible Note is convertible
into the Company's common stock at the holder's
option any time up to maturity at a conversion price
equal to $4.00. The Secured Convertible Notes are
secured by all of the assets of the Company. The
Company has the right to redeem the Secured
Convertible Notes upon 3 business days notice for
110% of the amount redeemed. Pursuant to the
Securities Purchase Agreement, the Company issued to
the holders an aggregate of 50,000 shares of common
stock of the Company.

Each of the SEDA, Security Purchase Agreement and
related agreements were held in escrow pending our
filing of the Form 10-K and the issuance of shares
of common stock required to be issued under the
Agreement. On April 1, 2005 we received the funds.

ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K

Exhibits:

10.27 Standby Equity Distribution Agreement dated
March 30, 2005 between Cornell Capital Partners, LP
and us

10.28 Securities Purchase Agreement dated March 30,
2005 between Buyers and us

10.29 Secured Convertible Notes dated March 30, 2005

10.30 Investor Rights Agreement dated March 30, 2005

10.31 Security Agreement dated March 30, 2005

10.32 Pledge and Escrow Agreement dated March 30, 2005

10.33 Escrow Agreement dated March 30, 2005

10.34 Registration Rights Agreement dated March 30, 2005

31.1 Certification of Chief Executive Officer of
Access Pharmaceuticals, Inc. pursuant to Rule 13a-
14(a)/15d-14(a)

31.2 Certification of Chief Financial Officer of
Access Pharmaceuticals, Inc. pursuant to Rule 13a-
14(a)/15d-14(a)

32.1* Certification of Chief Executive Officer of
Access Pharmaceuticals, Inc. pursuant to 18 U.S.C.
Section 1350

32.2* Certification of Chief Financial Officer of
Access Pharmaceuticals, Inc. pursuant to 18 U.S.C.
Section 1350
______________

* This exhibit shall not be deemed "filed" for
purposes of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities
of that

                                24

Section, nor shall it be deemed incorporated by
reference in any filings under the Securities Act of
1933 or the Securities and Exchange Act of 1934,
whether made before or after the date hereof and
irrespective of any general incorporation language
in any filings.



SIGNATURES

Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                                       ACCESS PHARMACEUTICALS, INC.

Date: May 10, 2005                      By: /s/ Kerry P. Gray
      ------------                         ----------------------
                                        Kerry P. Gray
                                        President and Chief Executive Officer
                                        (Principal Executive Officer)

Date: May 10, 2005                      By: /s/ Stephen B. Thompson
      ------------                         -------------------------
                                        Stephen B. Thompson
                                        Vice President and Chief Financial
                                          Officer
                                        (Principal Financial and Accounting
                                          Officer)


                                 26

              Access Pharmaceuticals, Inc. and Subsidiaries


                  Condensed Consolidated Balance Sheets

                                          March 31, 2005 December 31, 2004
         ASSETS                           --------------  --------------
                                            (unaudited)
                                                    
Current assets
 Cash and cash equivalents                 $  2,888,000    $  1,775,000
 Short term investments, at cost                472,000         486,000
 Accounts and other receivables                 764,000         791,000
 Inventory                                      113,000         125,000
 Prepaid expenses and other current assets      957,000       1,093,000
                                           -------------   -------------
Total current assets                          5,194,000       4,270,000
                                           -------------   -------------

Property and equipment, net                     982,000       1,040,000

Debt issuance costs, net                        917,000         130,000

Patents, net                                  2,231,000       2,315,000

Licenses, net                                   113,000         125,000

Goodwill, net                                 1,868,000       1,868,000

Restricted cash and other assets                456,000       1,342,000
                                           -------------   -------------
Total assets                               $ 11,761,000    $ 11,090,000
                                           =============   =============

  LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
 Accounts payable and accrued expenses     $  1,800,000    $  2,131,000
 Accrued interest payable                       572,000         311,000
 Deferred revenues                            1,428,000       1,199,000
 Current portion of notes payable and
   other future obligations                  10,868,000       8,417,000
                                           -------------   -------------
Total current liabilities                    14,668,000      12,058,000

Note payable, net of current portion            152,000         193,000
Convertible note                              5,500,000       5,500,000
                                           -------------   -------------
Total liabilities                            20,320,000      17,751,000
                                           -------------   -------------

Commitments and contingencies

Stockholders' deficit
 Preferred stock - $.01 par value;
  authorized 2,000,000 shares; none
  issued or outstanding                               -               -
 Common stock - $.01 par value;
  authorized 50,000,000 shares;
  issued, 15,724,734 at March 31, 2005
  and 15,524,734 at December 31, 2004           157,000         155,000
 Additional paid-in capital                  59,508,000      59,010,000
 Notes receivable from stockholders          (1,045,000)     (1,045,000)
 Unamortized value of restricted stock
  grants                                       (277,000)       (309,000)
 Treasury stock, at cost - 819 shares            (4,000)         (4,000)
 Accumulated other comprehensive loss           (11,000)         (3,000)
 Accumulated deficit                        (66,887,000)    (64,465,000)
                                            ------------   -------------
Total stockholders' deficit                  (8,559,000)     (6,661,000)
                                            ------------   -------------
Total liabilities and stockholders' deficit $11,761,000     $11,090,000
                                            ============   =============


    The accompanying notes are an integral part of these statements.

                                 27

              Access Pharmaceuticals, Inc. and Subsidiaries

    Condensed Consolidated Statements of Operations and Comprehensive Loss
                              (unaudited)



                                               Three Months ended March 31,
                                              ------------------------------
                                                   2005            2004
                                              --------------  --------------
                                                        
Revenues
 Licensing revenues                            $     11,000    $      4,000
 Product sales                                      117,000               -
 Royalty income                                      27,000          16,000
                                               -------------  --------------
Total revenues                                      155,000          20,000

Expenses
 Research and development                         1,319,000       1,144,000
 Costs of product sales                             102,000          26,000
 General and administrative                         689,000         754,000
 Depreciation and amortization                      164,000         160,000
                                               -------------  --------------
Total expenses                                    2,274,000       2,084,000
                                               -------------  --------------
Loss from operations                             (2,119,000)     (2,064,000)

Other income (expense)
 Interest and miscellaneous income                   10,000          33,000
 Interest and other expense                        (313,000)       (320,000)
                                               -------------  -------------
                                                   (303,000)       (287,000)

Net loss                                       $ (2,422,000)  $  (2,351,000)
                                               =============  ==============

Basic and diluted loss per common share              $(0.16)         $(0.17)
                                               =============  ==============
Weighted average basic and diluted
common shares outstanding                        15,524,734      14,200,273
                                               =============  ==============


Net loss                                       $ (2,422,000)   $ (2,351,000)
Other comprehensive income (loss)
Foreign currency translation adjustment              (8,000)         10,000
                                               -------------   -------------
Comprehensive loss                             $ (2,430,000)   $ (2,341,000)
                                               =============   =============


     The accompanying notes are an integral part of these statements.

                                 28

            Access Pharmaceuticals, Inc. and Subsidiaries

          Condensed Consolidated Statements of Cash Flows
                                 (unaudited)



                                               Three Months ended March 31,
                                              ------------------------------
                                                   2005           2004
                                              --------------  --------------
                                                        
Cash flows from operating activities:
Net loss                                       $ (2,422,000)   $ (2,351,000)

Adjustments to reconcile net loss to cash used
   in operating activities:
 Warrants issued in payment of consulting
   expenses                                               -          42,000
 Amortization of restricted stock grants             32,000          29,000
 Depreciation and amortization                      164,000         160,000
 Amortization of debt costs                          46,000          46,000
Change in operating assets and liabilities:
 Accounts receivable                                 27,000         (40,000)
 Inventory                                           12,000               -
 Prepaid expenses and other current assets          136,000        (113,000)
 Restricted cash and other assets                   553,000          30,000
 Accounts payable and accrued expenses             (331,000)       (125,000)
 Accrued interest payable                           261,000         261,000
 Deferred revenues                                  229,000          (4,000)
                                                ------------   -------------
Net cash used in operating activities            (1,293,000)     (2,065,000)
                                                ------------   -------------

Cash flows from investing activities:
 Capital expenditures                               (10,000)        (60,000)
 Redemptions of short term investments and
  certificates of deposit                            14,000         921,000
                                                ------------   -------------
Net cash provided by investing activities             4,000         861,000
                                                ------------   -------------

Cash flows from financing activities:
 Payments of notes payable                         (223,000)       (225,000)
 Proceeds from secured notes payable              2,633,000               -
 Proceeds from stock issuances, net of
  costs of $647,000                                       -       9,035,000
                                                ------------   -------------
Net cash provided by financing activities         2,410,000       8,810,000
                                                ------------   -------------

Net increase in cash and cash equivalents         1,121,000       7,606,000
Effect of exchange rate changes on cash              (8,000)         23,000
Cash and cash equivalents at beginning of period  1,775,000         727,000
                                                ------------   -------------
Cash and cash equivalents at end of period      $ 2,888,000     $ 8,356,000
                                                ============   =============

Cash paid for interest                               $7,000          $6,000

Supplemental disclosure of non-cash transactions
 200,000 shares of common stock issued pursuant
   to the SEDA and Secured Convertible Notes       $500,000               -



    The accompanying notes are an integral part of these statements.

                                 29

              Access Pharmaceuticals, Inc. and Subsidiaries

            Notes to Condensed Consolidated Financial Statements
                 Three Months Ended March 31, 2005 and 2004
                                (unaudited)

(1) Interim Financial Statements
The consolidated balance sheet as of March 31, 2005
and the consolidated statements of operations and
cash flows for the three months ended March 31, 2005
and 2004 were prepared by management without audit.
In the opinion of management, all adjustments,
consisting only of normal recurring adjustments,
except as otherwise disclosed, necessary for the
fair presentation of the financial position, results
of operations, and changes in financial position for
such periods, have been made.

Certain information and footnote disclosures
normally included in financial statements prepared
in accordance with accounting principles generally
accepted in the United States of America have been
condensed or omitted. It is suggested that these
interim financial statements be read in conjunction
with the financial statements and notes thereto
included in our Annual Report on Form 10-K for the
year ended December 31, 2004. The results of
operations for the period ended March 31, 2005 are
not necessarily indicative of the operating results
which may be expected for a full year. The
consolidated balance sheet as of December 31, 2004
contains financial information taken from the
audited financial statements as of that date.

(2) Cash and Cash Equivalents

Cash and cash equivalents includes $2,360,000, kept
in an overnight escrow account, pursuant to the
Securities Purchase Agreement with Cornell Capital
Partners and Highgate House funds, executed on March
30, 2005.

(3) Intangible Assets

Intangible assets consist of the following (in thousands):



                       March 31, 2005         December 31, 2004
                ------------------------- -------------------------
                     Gross                    Gross
                   carrying   Accumulated    carrying   Accumulated
                    value    amortization     value    amortization
                ------------ ------------ ------------ ------------
                                           
Amortizable intangible assets
Patents          $    3,179   $     948    $   3,179    $     864
Licenses                500         387          500          375
                ------------ ------------ ------------ ------------
Total            $    3,679   $  1,335     $   3,679    $   1,239
                ============ ============ ============ ============


Amortization expense related to intangible assets
totaled $96,000 and $105,000 for each of the three
months ended March 31, 2005 and 2004, respectively.
The aggregate estimated amortization expense for
intangible assets remaining as of March 31 is as
follows (in thousands):

                                 30

2005              $   291
2006                  388
2007                  363
2008                  338
2009                  338
Thereafter            626
                 ---------
Total             $ 2,344
                 =========

(4) Stock-Based Compensation
The following table illustrates the effect on net
loss and loss per share if we had applied the fair
value recognition provisions of FASB Statement 123,
Accounting for Stock-Based Compensation, using
assumptions described in the 2004 Form 10-K, Note 1,
to our stock-based employee plans.




                                   Three months ended March 31,
                                    --------------------------
                                        2005         2004
                                    ------------ ------------
                                           
Net loss
As reported                         $(2,422,000) $(2,351,000)
Deduct: Stock-based employee
  compensation expense determined
  under fair value based method        (155,000)    (212,000)
                                    ------------ ------------
Pro forma                           $(2,577,000) $(2,563,000)
                                    ============ ============

Basic and diluted loss per share:
  As reported                            $(0.16)      $(0.17)
  Pro forma                               (0.17)       (0.18)



The effect of our outstanding options and warrants
are anti-dilutive when we have a net loss. The fully
diluted shares are:

                        Three months ended March 31,
                         -------------------------
                             2005         2004
                         ------------ ------------
Fully diluted shares      21,444,800   20,313,562

EX-31.1

Exhibit 31.1

                             CERTIFICATION

I, Kerry P. Gray, the President and Chief Executive Officer of
Access Pharmaceuticals, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Access
Pharmaceuticals, Inc.;

2. Based on my knowledge, this quarterly report does not contain
any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not
misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present in all material respects the financial condition,
results of operations and cash flows of the registrant as of,
and for, the periods presented in this quarterly report;

4. The registrant's other certifying officer and I are
responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
registrant and we have:

a. Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our
supervision to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during
the period in which this quarterly report is being prepared;

b. Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this quarterly report
our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by
this quarterly report based on such evaluation; and

d. Disclosed  in this quarterly report any change in the
registrant's internal control over financial reporting that
occurred during the registrant's most recent fiscal quarter (the
registrant's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over
financial reporting.

5. The registrant's other certifying officer and I have
disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of registrant's
board of directors (or persons performing the equivalent
function):

a. All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial
information; and

b. Any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal control over financial reporting.

Date: May 10, 2005

/s/ Kerry P. Gray
- ------------------
Kerry P. Gray
President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Stephen B. Thompson, the Chief Financial Officer of Access
Pharmaceuticals, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Access
Pharmaceuticals, Inc.;

2. Based on my knowledge, this quarterly report does not contain
any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not
misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present in all material respects the financial condition,
results of operations and cash flows of the registrant as of,
and for, the periods presented in this quarterly report;

4. The registrant's other certifying officer and I are
responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
registrant and we have:

a. Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during
the period in which this quarterly report is being prepared;

b. Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this quarterly report
our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by
this quarterly report based on such evaluation; and

d. Disclosed in this quarterly report any change in the
registrant's internal control over financial reporting that
occurred during the registrant's most recent fiscal quarter (the
registrant's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over
financial reporting.

5. The registrant's other certifying officer and I have
disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of registrant's
board of directors (or persons performing the equivalent
function):

a. All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial
information; and

b. Any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal control over financial reporting.

Date: May 10, 2005

/s/ Stephen B. Thompson
- -----------------------
Stephen B. Thompson
Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT
TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The certification set forth below is hereby made solely for the
purpose of satisfying the requirements of Section 906 of the
Sarbanes-Oxley Act of 2002 and may not be relied upon or used
for any other purposes.

In connection with the Quarterly Report of Access
Pharmaceuticals, Inc. (the "Company") on Form 10-Q for the
period ended March 31, 2005, as filed with the Securities and
Exchange Commission on the date hereof (the "Report"), I, Kerry
P. Gray, President and Chief Executive Officer certify pursuant
to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the
Sarbanes Oxley Act of 2002, that to my knowledge (1) the Report
fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934 and (2) the information
contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of
the Company.

A signed original of this written statement required by Section
906 or other document authenticating, acknowledging or otherwise
adopting the signature that appears in typed form within the
electronic version of this written statement required by Section
906 has been provided to the Company and will be retained by the
Company and furnished to the Securities and Exchange Commission
or its staff upon request.

Signed at the City of  Dallas, in the State of Texas, this 10th
day of May, 2005.

/s/ Kerry P. Gray
- -----------------
Kerry P. Gray
President and Chief Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT
TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The certification set forth below is hereby made solely for the
purpose of satisfying the requirements of Section 906 of the
Sarbanes-Oxley Act of 2002 and may not be relied upon or used
for any other purposes.

In connection with the Quarterly Report of Access
Pharmaceuticals, Inc. (the "Company") on Form 10-Q for the
period ended March 31, 2005, as filed with the Securities and
Exchange Commission on the date hereof (the "Report"), I,
Stephen B. Thompson, Chief Financial Officer certify pursuant to
18 U.S.C. 1350, as adopted pursuant to Section 906 of the
Sarbanes Oxley Act of 2002, that to my knowledge (1) the Report
fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934 and (2) the information
contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of
the Company.

A signed original of this written statement required by Section
906 or other document authenticating, acknowledging or otherwise
adopting the signature that appears in typed form within the
electronic version of this written statement required by Section
906 has been provided to the Company and will be retained by the
Company and furnished to the Securities and Exchange Commission
or its staff upon request.

Signed at the City of  Dallas, in the State of Texas, this 10th
day of May, 2005.

/s/ Stephen B. Thompson
- -----------------------
Stephen B. Thompson
Chief Financial Officer

EX-10.27

Exhibit 10.27
                  STANDBY EQUITY DISTRIBUTION AGREEMENT

THIS AGREEMENT dated as of the 30th day of March 2005 (the
"Agreement") between CORNELL CAPITAL PARTNERS, LP, a
Delaware limited partnership (the "Investor"), and ACCESS
PHARMACEUTICALS, INC., a corporation organized and existing under
the laws of the State of Delaware (the "Company").

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 Fifteen Million Dollars ($15,000,000) of the Company's
common stock, par value $0.01 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 Newbridge Securities
Corporation (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
the date hereof 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 date the David Gonzalez
Attorney Trust Account is in receipt of the funds from the Investor and
David Gonzalez, Esq., is in possession of free trading shares from the
Company and therefore an Advance by the Investor to the Company can be
made and David Gonzalez, Esq. can release the free trading shares to the
Investor. The Advance Date shall be 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 to the Investor
setting forth the Advance amount that the Company requests from the
Investor and the Advance Date.

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 Fifteen Million Dollars ($15,000,000) 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, provided that the
Company shall not request an Advance if the issuance of the full number of
shares of Common Stock issuable in connection with such Advance would
result in a violation of the AMEX Listing Standards, Policies and
Requirements Section 713 (or any similar applicable section) unless the
necessary shareholder approval or consent has been received prior to such
request.

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
Fifteen Million Dollars ($15,000,000), (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 $0.01 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."Escrow Agreement" shall mean the escrow agreement among
the Company, the Investor, and David Gonzalez, Esq., dated the date hereof.

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.

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 One Million
Dollars ($1,000,000) 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 Newbridge Securities
Corporation, 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 eight percent (98%) of
the Market Price during the Pricing Period.

Section 1.24."Registrable Securities" shall mean the shares of Common Stock
to be issued hereunder (i) in respect of which the Registration Statement has
not been declared effective by the SEC, (ii) which have not been sold under
circumstances meeting all of the applicable conditions of Rule 144 (or any
similar provision then in force) under the Securities Act (Rule 144"), (iii)
which have not been otherwise transferred to a holder who may trade such
shares without restriction under the Securities Act, and the Company has
delivered a new certificate or other evidence of ownership for such securities
not bearing a restrictive legend, or (iv) which are not immediately tradable
pursuant to Rule 144(k).

Section 1.25."Registration Rights Agreement" shall mean the Registration
Rights Agreement dated the date hereof, 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-3 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.

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
or 10-K, Quarterly Reports on Form 10-QSB or 10-Q, Current Reports on
Form 8-K and Proxy Statements of the Company as supplemented to the date
hereof, filed by the Company for a period of at least twelve (12) months
immediately preceding the date hereof 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.Investments.

(a)Advances.  Upon the terms and conditions set forth herein (including,
without limitation, the provisions of Article VII hereof), on any Advance
Notice Date 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 receive for 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 on the day 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.

Section 2.3. Closings.  On each Advance Date, which shall be the first (1st)
Trading Day after expiration of the applicable Pricing Period for each
Advance, (i) the Company shall deliver to David Gonzalez, Esq. (the
"Escrow Agent") shares of the Company's Common Stock, representing the
amount of the Advance by the Investor pursuant to Section 2.1 herein,
registered in the name of the Investor which shall be delivered to the
Investor, or otherwise in accordance with the Escrow Agreement and (ii) the
Investor shall deliver to Escrow Agent the amount of the Advance specified
in the Advance Notice by wire transfer of immediately available funds which
shall be delivered to the Company, or otherwise in accordance with the
Escrow Agreement.  In addition, on or prior to the Advance Date, each of
the Company and the Investor shall deliver to the other through the Investor's
counsel, 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.  Payment of funds to the Company and
delivery of the Company's Common Stock to the Investor shall occur in
accordance with the conditions set forth above and those contained in the
Escrow Agreement; provided, however, that to the extent the Company has
not paid the fees, expenses, and disbursements of the Investor, the Investor's
counsel, or the Company's counsel in accordance with Section 12.4, the
amount of such fees, expenses, and disbursements may be deducted by the
Investor (and shall be paid to the relevant party) from the amount 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 seventy-
five (75) 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 Escrow Agent 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;

(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 Grant Thornton LLP as to its ability to provide all
consents required in order to file a registration statement in connection with
this transaction;

(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 Escrow Agent 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 the date hereof 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.

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.  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-K for the year ended December 31,
2003 and Form 10-Q for the period ended September 30, 2004; 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.

Section 3.8. Registration Rights Agreement and Escrow Agreement.  The
parties have entered into the Registration Rights Agreement and the Escrow
Agreement, each dated the date hereof.

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 have been and 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 is permitted 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 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 the date hereof:

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 Escrow 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 Escrow 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 Escrow 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 Escrow Agreement, the Placement Agent
Agreement and assuming the execution and delivery thereof and acceptance
by the Investor and any related agreements 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.

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 $0.01 per share and 2,000,000 shares of Preferred Stock of which
15,524,734 shares of Common Stock and zero shares of Preferred Stock are
issued and outstanding.  All of such outstanding shares have been validly
issued and are fully paid and nonassessable.  Except as disclosed in the SEC
Documents and in connection with the issuance of certain Debentures to the
Investor and its Affiliates, 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 Form S-3 resale registration
statements in connection with sales of common stock discussed in the SEC
Documents, 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 and Form S-3 resale registration statements
in connection with sales of common stock discussed in the SEC Documents).
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 true and correct 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 By-laws,
as in effect on the date hereof (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
Certificate 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 agreement, indenture or
instrument to which the Company or any of its subsidiaries is a party, or
result in a 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.  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 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 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 in writing by or on behalf of the Company to the
Investor which is not included in the SEC Documents 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 circumstances under
which they were made, not misleading.

Section 4.6. 10b-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.

Section 4.7. No Default.  Except as disclosed in the SEC Documents, the
Company is not in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust or other material instrument or agreement to which
it is a party or by which it is or its property is bound and neither the
execution, nor the delivery by the Company, nor the performance by the
Company of its obligations under this Agreement or any of the exhibits or
attachments hereto will conflict with or result in the breach or violation of
any of the terms or provisions of, or constitute a default or result in the
creation or imposition of any lien or charge on any assets or properties of the
Company under its Certificate of Incorporation, By-Laws, any material
indenture, mortgage, deed of trust or other material agreement applicable to
the Company or instrument to which the Company is a party or by which it
is bound, or any statute, or any decree, judgment, order, rules or regulation
of any court or governmental agency or body having jurisdiction over the
Company or its properties, in each case which default, lien or charge is
likely to cause a Material Adverse Effect on the Company's business or
financial condition.

Section 4.8. Absence of Events of Default.  Except for matters described
in the SEC Documents and/or this Agreement, no Event of Default, as
defined in the respective agreement to which the Company is a party, and no
event which, with the giving of notice or the passage of time or both, would
become an Event of Default (as so defined), has occurred and is continuing,
which would have a Material Adverse Effect on the Company's business,
properties, prospects, financial condition or results of operations.

Section 4.9. Intellectual Property Rights.  The Company and its subsidiaries
own or possess adequate rights or licenses to use all material trademarks,
trade names, service marks, service mark registrations, service names,
patents, patent rights, copyrights, inventions, licenses, approvals,
governmental authorizations, trade secrets and rights necessary to conduct
their respective businesses as now conducted.   The Company and its
subsidiaries do not have any knowledge of any infringement by the Company
or its subsidiaries of trademark, trade name rights, patents, patent rights,
copyrights, inventions, licenses, service names, service marks, service mark
registrations, trade secret or other similar rights of others, and, to the
knowledge of the Company, there is no claim, action or proceeding being
made or brought against, or to the Company's knowledge, being threatened
against, the Company or its subsidiaries regarding trademark, trade name,
patents, patent rights, invention, copyright, license, service names, service
marks, service mark registrations, trade secret or other infringement; and the
Company and its subsidiaries are unaware of any facts or circumstances
which might give rise to any of the foregoing.

Section 4.10.Employee Relations.  Neither the Company nor any of its
subsidiaries is involved in any labor dispute nor, to the knowledge of the
Company or any of its subsidiaries, is any such dispute threatened.  None of
the Company's or its subsidiaries' employees is a member of a union and the
Company and its subsidiaries believe that their relations with their employees
are good.

Section 4.11.Environmental Laws.  The Company and its subsidiaries are
(i) in compliance with any and all applicable material foreign, federal, state
and local laws and regulations relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes, pollutants
or contaminants ("Environmental Laws"), (ii) have received all permits,
licenses or other approvals required of them under applicable Environmental
Laws to conduct their respective businesses and (iii) are in compliance with
all terms and conditions of any such permit, license or approval.

Section 4.12.Title.  Except as set forth in the SEC Documents, the
Company has good and marketable title to its properties and material assets
owned by it, free and clear of any pledge, lien, security interest,
encumbrance, claim or equitable interest other than such as are not material
to the business of the Company.  Any real property and facilities held under
lease by the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property
and buildings by the Company and its subsidiaries.

Section 4.13.Insurance.  The Company and each of its subsidiaries are
insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as management of the Company believes to be
prudent and customary in the businesses in which the Company and its
subsidiaries are engaged.  Neither the Company nor any such subsidiary has
been refused any insurance coverage sought or applied for and neither the
Company nor any such subsidiary has any reason to believe that it will not
be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not materially and
adversely affect the condition, financial or otherwise, or the earnings,
business or operations of the Company and its subsidiaries, taken as a whole.

Section 4.14.Regulatory Permits.  The Company and its subsidiaries possess
all material certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct their
respective businesses, and neither the Company nor any such subsidiary has
received any notice of proceedings relating to the revocation or modification
of any such certificate, authorization or permit.

Section 4.15.Internal Accounting Controls.  The Company and each of its
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 generally accepted accounting principles 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.

Section 4.16.No Material Adverse Breaches, etc.  Except as set forth in the
SEC Documents, neither the Company nor any of its subsidiaries is subject
to any charter, corporate or other legal restriction, or any judgment, decree,
order, rule or regulation which in the judgment of the Company's officers
has or is expected in the future to have a Material Adverse Effect on the
business, properties, operations, financial condition, results of operations or
prospects of the Company or its subsidiaries.  Except as set forth in the SEC
Documents, neither the Company nor any of its subsidiaries is in breach of
any contract or agreement which breach, in the judgment of the Company's
officers, has or is expected to have a Material Adverse Effect on the
business, properties, operations, financial condition, results of operations or
prospects of the Company or its subsidiaries.


Section 4.17.Absence of Litigation.  Except as set forth in the SEC
Documents, 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 on the
transactions contemplated hereby (ii) adversely affect the validity or
enforceability of, or the authority or ability of the Company to perform its
obligations under, this Agreement or any of the documents contemplated
herein, or (iii) except as expressly disclosed in the SEC Documents, have a
Material Adverse Effect on the business, operations, properties, financial
condition or results of operation of the Company and its subsidiaries taken
as a whole.

Section 4.18.Subsidiaries.  Except as disclosed in the SEC Documents, the
Company does not presently own or control, directly or indirectly, any
interest in any other corporation, partnership, association or other business
entity.

Section 4.19.Tax Status.  Except as disclosed in the SEC Documents, the
Company and each of its subsidiaries has made or filed all federal and state
income and all other tax returns, reports and declarations required by any
jurisdiction to which it is subject and (unless and only to the extent that the
Company and each of its subsidiaries has set aside on its books provisions
reasonably adequate for the payment of all unpaid and unreported taxes) has
paid all taxes and other governmental assessments and charges that are
material in amount, shown or determined to be due on such returns, reports
and declarations, except those being contested in good faith and has set aside
on its books provision reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports or
declarations apply.  There are no unpaid taxes in any material amount
claimed to be due by the taxing authority of any jurisdiction, and the officers
of the Company know of no basis for any such claim.

Section 4.20.Certain Transactions.  Except as set forth in the SEC
Documents none of the officers, directors, or employees of the Company is
presently a party to any transaction with the Company (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to
or by, providing for rental of real or personal property to or from, or
otherwise requiring payments to or from any officer, director or such
employee or, to the knowledge of the Company, any corporation,
partnership, trust or other entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.

Section 4.21.Fees and Rights of First Refusal.  The Company is not
obligated to offer the securities offered hereunder on a right of first refusal
basis or otherwise to any third parties including, but not limited to, current
or former shareholders of the Company, underwriters, brokers, agents or
other third parties.

Section 4.22.Use of Proceeds.  The Company shall use the net proceeds
from this offering for general corporate purposes, including, without
limitation, the payment of loans incurred by the Company.  However, in no
event shall the Company use the net proceeds from this offering for the
payment (or loan to any such person for the payment) of any judgment, or
other liability, incurred by any executive officer, officer, director or
employee of the Company, except for any liability owed to such person for
services rendered, or if any judgment or other liability is incurred by such
person originating from services rendered to the Company, or the Company
has indemnified such person from liability.

Section 4.23.Further Representation and Warranties of the Company.  For
so long as any securities issuable hereunder held by the Investor remain
outstanding, the Company acknowledges, represents, warrants and agrees that
it will maintain the listing of its Common Stock on the Principal Market.

Section 4.24.Opinion of Counsel.  Investor shall receive an opinion letter
from counsel to the Company on the date hereof.

Section 4.25.Opinion of Counsel.  The Company will obtain for the
Investor, at the Company's expense, any and all opinions of counsel which
may be reasonably required in order to sell the securities issuable hereunder
without restriction.

Section 4.26.Dilution.  The Company is aware and acknowledges that
issuance of shares of the Company's Common Stock could cause dilution to
existing shareholders and could significantly increase the outstanding number
of shares of Common Stock.

ARTICLE V.

Indemnification

The Investor and the Company represent to the other the following with
respect to itself:

Section 5.1. Indemnification.

(a)    In consideration of the Investor's execution and delivery of this
Agreement, and in addition to all of the Company's other obligations under
this Agreement, the Company shall defend, protect, indemnify and hold
harmless the Investor, and all of its officers, directors, partners, employees
and agents (including, without limitation, those retained in connection with
the transactions contemplated by this Agreement) (collectively, the "Investor
Indemnitees") from and against any and all actions, causes of action, suits,
claims, losses, costs, penalties, fees, liabilities and damages, and expenses
in connection therewith (irrespective of whether any such Investor Indemnitee
is a party to the action for which indemnification hereunder is sought), and
including reasonable attorneys' fees and disbursements (the "Indemnified
Liabilities"), incurred by the Investor Indemnitees or any of them as a result
of, or arising out of, or relating to (a) any misrepresentation or breach of any
representation or warranty made by the Company in this Agreement or the
Registration Rights Agreement or any other certificate, instrument or
document contemplated hereby or thereby, (b) any breach of any covenant,
agreement or obligation of the Company contained in this Agreement or the
Registration Rights Agreement or any other certificate, instrument or
document contemplated hereby or thereby, or (c) any cause of action, suit or
claim brought or made against such Investor Indemnitee not arising out of
any action or inaction of an Investor Indemnitee, and arising out of or
resulting from the execution, delivery, performance or enforcement of this
Agreement or any other instrument, document or agreement executed
pursuant hereto by any of the Investor Indemnitees.  To the extent that the
foregoing undertaking by the Company may be unenforceable for any reason,
the Company shall make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities, which is permissible under
applicable law.

(b)    In consideration of the Company's execution and delivery of this
Agreement, and in addition to all of the Investor's other obligations under
this Agreement, the Investor shall defend, protect, indemnify and hold
harmless the Company and all of its officers, directors, shareholders,
employees and agents (including, without limitation, those retained in
connection with the transactions contemplated by this Agreement)
(collectively, the "Company Indemnitees") from and against any and all
Indemnified Liabilities incurred by the Company Indemnitees or any of them
as a result of, or arising out of, or relating to (a) any misrepresentation or
breach of any representation or warranty made by the Investor in this
Agreement, the Registration Rights Agreement, or any instrument or
document contemplated hereby or thereby executed by the Investor, (b) any
breach of any covenant, agreement or obligation of the Investor(s) contained
in this Agreement,  the Registration Rights Agreement or any other
certificate, instrument or document contemplated hereby or thereby executed
by the Investor, or (c) any cause of action, suit or claim brought or made
against such Company Indemnitee based on  misrepresentations or due to a
breach by the Investor and arising out of or resulting from the execution,
delivery, performance or enforcement of this Agreement or any other
instrument, document or agreement executed pursuant hereto by any of the
Company Indemnitees.  To the extent that the foregoing undertaking by the
Investor may be unenforceable for any reason, the Investor shall make the
maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities, which is permissible under applicable law.

(c)    The obligations of the parties to indemnify or make contribution under
this Section 5.1 shall survive termination.

ARTICLE VI.

Covenants of the Company

Section 6.1. Registration Rights.  The Company shall cause the Registration
Rights Agreement to remain in full force and effect and the Company shall
comply in all material respects with the terms thereof.

Section 6.2. Listing of Common Stock.  The Company shall maintain the
Common Stock's authorization for listing on the American Stock
Exchange,the OTC Bulletin Board, Nasdaq National Market, or the Nasdaq
SmallCap Market .

Section 6.3. Exchange Act Registration.  The Company will cause its
Common Stock to continue to be registered under Section 12(g) of the
Exchange Act, will file in a timely manner all reports and other documents
required of it as a reporting company under the Exchange Act and will not
take any action or file any document (whether or not permitted by Exchange
Act or the rules thereunder) to terminate or suspend such registration or to
terminate or suspend its reporting and filing obligations under said Exchange
Act.

Section 6.4. Transfer Agent Instructions.  Upon effectiveness of the
Registration Statement the Company shall deliver instructions to its transfer
agent to issue shares of Common Stock to the Investor free of restrictive
legends on or before each Advance Date

Section 6.5. Corporate Existence.  The Company will take all steps
necessary to preserve and continue the corporate existence of the Company.

Section 6.6. Notice of Certain Events Affecting Registration; Suspension
of Right to Make an Advance.  The Company will immediately notify the
Investor upon its becoming aware of the occurrence of any of the following
events in respect of a registration statement or related prospectus relating to
an offering of Registrable Securities: (i) receipt of any request for additional
information by the SEC or any other Federal or state governmental authority
during the period of effectiveness of the Registration Statement for
amendments or supplements to the registration statement or related
prospectus; (ii) the issuance by the SEC or any other Federal or state
governmental authority of  any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose;
(iii) receipt of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose; (iv) the happening of any event that makes any
statement made in the Registration Statement or related prospectus of any
document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires the making of any changes in
the Registration Statement, related prospectus or documents so that, in the
case of the Registration Statement, it will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and that
in the case of the related prospectus, it will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and (v) the
Company's reasonable determination that a post-effective amendment to the
Registration Statement would be appropriate; and the Company will promptly
make available to the Investor any such supplement or amendment to the
related prospectus.  The Company shall not deliver to the Investor any
Advance Notice during the continuation of any of the foregoing events.

Section 6.7. Restriction on Sale of Capital Stock.  During the Commitment
Period, the Company shall not, without the prior written consent of the
Investor, (i) issue or sell any Common Stock or Preferred Stock without
consideration or for a consideration per share less than 20% of the bid price
of the Common Stock determined immediately prior to its issuance,
(excluding shares of Common Stock issuable upon the exercise of options,
warrants or conversion rights granted prior to the date hereof),  (ii) issue or
sell any Preferred Stock, warrant, option, right, contract, call, or other
security or instrument granting the holder thereof the right to acquire
Common Stock without consideration or for a consideration per share less
than 20% of such Common Stock's Bid Price determined immediately prior
to its issuance or (iii) file any registration statement on Form S-8 except to
register up to 1,300,000 shares of the Common Stock to be issued under a
stock incentive plan.

Section 6.8. Consolidation; Merger.  The Company shall not, at any time
after the date hereof, effect any merger or consolidation of the Company with
or into, or a transfer of all or substantially all the assets of the Company to
another entity (a "Consolidation Event") unless the resulting successor or
acquiring entity (if not the Company) assumes by written instrument the
obligation to deliver to the Investor such shares of stock and/or securities as
the Investor is entitled to receive pursuant to this Agreement.

Section 6.9. Issuance of the Company's Common Stock.  The sale of the
shares of Common Stock shall be made in accordance with the provisions and
requirements of Regulation D and any applicable state securities law.

ARTICLE VII.

Conditions for Advance and Conditions to Closing

Section 7.1. Conditions Precedent to the Obligations of the Company.  The
obligation hereunder of the Company to issue and sell the shares of Common
Stock to the Investor incident to each Closing is subject to the satisfaction,
or waiver by the Company, at or before each such Closing, of each of the
conditions set forth below.

(a)    Accuracy of the Investor's Representations and Warranties.  The
representations and warranties of the Investor shall be true and correct in all
material respects.

(b)    Performance by the Investor.  The Investor shall have performed,
satisfied and complied in all respects with all covenants, agreements and
conditions required by this Agreement and the Registration Rights Agreement
to be performed, satisfied or complied with by the Investor at or prior to
such Closing.

Section 7.2. Conditions Precedent to the Right of the Company to Deliver
an Advance Notice and the Obligation of the Investor to Purchase Shares of
Common Stock.  The right of the Company to deliver an Advance Notice and
the obligation of the Investor hereunder to acquire and pay for shares of the
Company's Common Stock incident to a Closing is subject to the fulfillment
by the Company, on (i) the date of delivery of such Advance Notice and
(ii) the applicable Advance Date (each a "Condition Satisfaction Date"), of
each of the following conditions:

(a)    Registration of the Common Stock with the SEC.  The Company shall
have filed with the SEC a Registration Statement with respect to the resale
of the Registrable Securities in accordance with the terms of the Registration
Rights Agreement.  As set forth in the Registration Rights Agreement, the
Registration Statement shall have previously become effective and shall
remain effective on each Condition Satisfaction Date and (i) neither the
Company nor the Investor shall have received notice that the SEC has issued
or intends to issue a stop order with respect to the Registration Statement or
that the SEC otherwise has suspended or withdrawn the effectiveness of the
Registration Statement, either temporarily or permanently, or intends or has
threatened to do so (unless the SEC's concerns have been addressed and the
Investor is reasonably satisfied that the SEC no longer is considering or
intends to take such action), and (ii) no other suspension of the use or
withdrawal of the effectiveness of the Registration Statement or related
prospectus shall exist.  The Registration Statement must have been declared
effective by the SEC prior to the first Advance Notice Date.

(b)    Authority.  The Company shall have obtained all permits and
qualifications required by any applicable state in accordance with the
Registration Rights Agreement for the offer and sale of the shares of
Common Stock, or shall have the availability of exemptions therefrom.  The
sale and issuance of the shares of Common Stock shall be legally permitted
by all laws and regulations to which the Company is subject.

(c)    Fundamental Changes. There shall not exist any fundamental changes
to the information set forth in the Registration Statement which would require
the Company to file a post-effective amendment to the Registration
Statement.

(d)    Performance by the Company.  The Company shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement (including, without limitation, the
conditions specified in Section 2.5 hereof) and the Registration Rights
Agreement to be performed, satisfied or complied with by the Company at
or prior to each Condition Satisfaction Date.

(e)    No Injunction.  No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction
that prohibits or directly and adversely affects any of the transactions
contemplated by this Agreement, and no proceeding shall have been
commenced that may have the effect of prohibiting or adversely affecting any
of the transactions contemplated by this Agreement.

(f)    No Suspension of Trading in or Delisting of Common Stock.  The
trading of the Common Stock is not suspended by the SEC or the Principal
Market (if the Common Stock is traded on a Principal Market).  The issuance
of shares of Common Stock with respect to the applicable Closing, if any,
shall not violate the shareholder approval requirements of the Principal
Market (if the Common Stock is traded on a Principal Market).  The
Company shall not have received any notice threatening the continued listing
of the Common Stock on the Principal Market (if the Common Stock is
traded on a Principal Market).

(g)    Maximum Advance Amount.  The amount of an Advance requested
by the Company shall not exceed the Maximum Advance Amount.  In
addition, in no event shall the number of shares issuable to the Investor
pursuant to an Advance cause the aggregate number of shares of Common
Stock beneficially owned by the Investor and its affiliates to exceed nine and
9/10 percent (9.9%) of the then outstanding Common Stock of the Company.
For the purposes of this section beneficial ownership shall be calculated in
accordance with Section 13(d) of the Exchange Act.

(h)    No Knowledge.  The Company has no knowledge of any event which
would be more likely than not to have the effect of causing such Registration
Statement to be suspended or otherwise ineffective.

(i)    Other.  On each Condition Satisfaction Date, the Investor shall have
received the certificate executed by an officer of the Company in the form
of Exhibit A attached hereto.

ARTICLE VIII.

Due Diligence Review; Non-Disclosure of Non-Public Information

Section 8.1. Due Diligence Review.  Prior to the filing of the Registration
Statement the Company shall make available for inspection and review by the
Investor, its advisors and representatives, and any underwriter participating
in any disposition of the Registrable Securities on behalf of the Investor
pursuant to the Registration Statement, any such registration statement or
amendment or supplement thereto or any blue sky, NASD or other filing, all
financial and other records, all SEC Documents 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 to supply all such information
reasonably requested by the Investor 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 Investor 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 the Registration
Statement.

Section 8.2. Non-Disclosure of Non-Public Information.

(a)    The Company shall not disclose non-public information to the
Investor, its advisors, or its representatives, unless prior to disclosure of
such information the Company identifies such information as being non-public
information and provides the Investor, such advisors and representatives with
the opportunity to accept or refuse to accept such non-public information for
review.  The Company may, as a condition to disclosing any non-public
information hereunder, require the Investor's advisors and representatives to
enter into a confidentiality agreement in form reasonably satisfactory to the
Company and the Investor.

(b)    Nothing herein shall require the Company to disclose non-public
information to the Investor or its advisors or representatives, and the
Company represents that it does not disseminate non-public information to
any investors who purchase stock in the Company in a public offering, to
money managers or to securities analysts, except under confidentiality
agreements, provided, however, that notwithstanding anything herein to the
contrary, the Company will, as hereinabove provided, immediately notify the
advisors and representatives of the Investor and, if any, underwriters, of any
event or the existence of any circumstance (without any obligation to disclose
the specific event or circumstance) of which it becomes aware, constituting
non-public information (whether or not requested of the Company specifically
or generally during the course of due diligence by such persons or entities),
which, if not disclosed in the prospectus included in the Registration
Statement would cause such prospectus to include a material misstatement or
to omit a material fact required to be stated therein in order to make the
statements, therein, in light of the circumstances in which they were made,
not misleading.  Nothing contained in this Section 8.2 shall be construed to
mean that such persons or entities other than the Investor (without the written
consent of the Investor prior to disclosure of such information) may not
obtain non-public information in the course of conducting due diligence in
accordance with the terms of this Agreement and nothing herein shall prevent
any such persons or entities from notifying the Company of their opinion that
based on such due diligence by such persons or entities, that the Registration
Statement contains an untrue statement of material fact or omits a material
fact required to be stated in the Registration Statement or necessary to make
the statements contained therein, in light of the circumstances in which they
were made, not misleading.

ARTICLE IX.

Choice of Law/Jurisdiction

Section 9.1. Governing Law.  This Agreement shall be governed by and
interpreted in accordance with the laws of the State of New Jersey without
regard to the principles of conflict of laws.  The parties further agree that
any action between them shall be heard in Hudson County, New Jersey, and
expressly consent to the jurisdiction and venue of the Superior Court of New
Jersey, sitting in Hudson County, New Jersey and the United States District
Court of New Jersey, sitting in Newark, New Jersey, for the adjudication of
any civil action asserted pursuant to this paragraph.


ARTICLE X.


Assignment; Termination

Section 10.1.Assignment.  Neither this Agreement nor any rights of the
Company hereunder may be assigned to any other Person except in
connection with a merger of the Company or sale of all or substantially all
of the stock or assets of the Company.

Section 10.2.Termination.

(a) The obligations of the Investor to make Advances under Article II hereof
shall terminate twenty-four (24) months after the Effective Date.

(b)  The Company may terminate this Agreement upon thirty (30) days
written notice to the Investor provided that (i) there are no Advances
outstanding, and (ii) The Company has paid all amounts owed to the Buyers
pursuant to this Agreement or any other agreements between the Company
and the Buyers.  Any termination of this Agreement pursuant to this Section
10.2 (b) shall not terminate the Registration Rights Agreement unless the
Investor has disposed of all the Investor Shares (as defined below) and all
shares issued to the Investor pursuant to Advances, or all such shares are
eligible for resale pursuant to Rule 144(k).

ARTICLE XI.

Notices

Section 11.1.Notices.  Any notices, consents, waivers, or other
communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered (i)
upon receipt, when delivered personally; (ii) upon receipt, when sent by
facsimile, provided a copy is mailed by U.S. certified mail, return receipt
requested; (iii) three (3) days after being sent by U.S. certified mail, return
receipt requested, or (iv) one (1) day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to the
party to receive the same.  The addresses and facsimile numbers for such
communications shall be:

If to the Company, to: Access Pharmaceuticals, inc.
2600 Stemmons Freeway, Suite 176
Dallas, TX 75207
Attention:  Kerry P. Gray
Telephone:  (214) 905-5100
Facsimile:  (214) 905-5101


With a copy to:  Bingham McCutchen LLP
150 Federal Street
Boston, MA 02110-1726
Attention:  John J. Concannon, Esq.
Telephone:  (617) 951-8874
Facsimile:  (617) 951-8736

If to the Investor(s):  Cornell Capital Partners, LP
101 Hudson Street - Suite 3700
Jersey City, NJ 07302
Attention:  Mark Angelo
Portfolio Manager
Telephone:  (201) 985-8300
Facsimile:  (201) 985-8266

With a Copy to:  Troy Rillo, Esq.
101 Hudson Street - Suite 3700
Jersey City, NJ 07302
Telephone:  (201) 985-8300
Facsimile:  (201) 985-8266

Each party shall provide five (5) days - prior written notice to the other party
of any change in address or facsimile number.

ARTICLE XII.

Miscellaneous

Section 12.1.Counterparts.  This Agreement may be executed in two or
more identical counterparts, all of which shall be considered one and the
same agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party.  In the event any
signature page is delivered by facsimile transmission, the party using such
means of delivery shall cause four (4) additional original executed signature
pages to be physically delivered to the other party within five (5) days of the
execution and delivery hereof, though failure to deliver such copies shall not
affect the validity of this Agreement.

Section 12.2.Entire Agreement; Amendments.  This Agreement supersedes
all other prior oral or written agreements between the Investor, the
Company, their affiliates and persons acting on their behalf with respect to
the matters discussed herein, and this Agreement and the instruments
referenced herein contain the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set forth
herein or therein, neither the Company nor the Investor makes any
representation, warranty, covenant or undertaking with respect to such
matters.  No provision of this Agreement may be waived or amended other
than by an instrument in writing signed by the party to be charged with
enforcement.

Section 12.3.Reporting Entity for the Common Stock.  The reporting entity
relied upon for the determination of the trading price or trading volume of
the Common Stock on any given Trading Day for the purposes of this
Agreement shall be Bloomberg, L.P. or any successor thereto.  The written
mutual consent of the Investor and the Company shall be required to employ
any other reporting entity.

Section 12.4.Fees and Expenses.  The Company hereby agrees to pay the
following fees:

(a)    Structuring Fees.  Each of the parties shall pay its own fees and
expenses (including the fees of any attorneys, accountants, appraisers or
others engaged by such party) in connection with this Agreement and the
transactions contemplated hereby, except that the Company shall pay a
structuring fee of Ten Thousand Dollars ($10,000) to Yorkville Advisors
Management, LLC, which was paid on February 28, 2005.  Subsequently on
each advance date, the Company will pay Yorkville Advisors Management,
LLC a structuring fee of Five Hundred Dollars ($500) directly out the
proceeds of any Advances hereunder.

(b)    Due Diligence Fee. Company shall pay the Investor a non-refundable
due diligence fee of Two Thousand Five Hundred Dollars ($2,500) which
was paid on February 28, 2005.

(c)    Commitment Fees.

(i)    On each Advance Date the Company shall pay to the Investor,
directly from the gross proceeds held in escrow, an amount equal to three
and one half percent (3.5%) of the amount of each Advance.  The Company
hereby agrees that if such payment, as is described above, is not made by the
Company on the Advance Date, such payment will be made at the direction
of the Investor as outlined and mandated by Section 2.3 of this Agreement.

(ii)   The Company shall issue to the Investor one hundred forty six
thousand five hundred (146,500) shares of the Common Stock upon the
execution of this Agreement, and fifty thousand (50,000) shares of Common
Stock within ten (10) business days of the date that the Company exceeds
$10,000,000 in aggregate Advances (collectively, the "Investor's Shares").

(iii)  Fully Earned.  The Investor's Shares shall be deemed fully earned as
of the date hereof.

(iv)   Registration Rights.  The Investor's Shares will have "piggy-back"
registration rights.

Section 12.5.Brokerage.  Each of the parties hereto represents that it has
had no dealings in connection with this transaction with any finder or broker
who will demand payment of any fee or commission from the other party.
The Company on the one hand, and the Investor, on the other hand, agree
to indemnify the other against and hold the other harmless from any and all
liabilities to any person claiming brokerage commissions or finder's fees on
account of services purported to have been rendered on behalf of the
indemnifying party in connection with this Agreement or the transactions
contemplated hereby.

Section 12.6.Confidentiality.  If for any reason the transactions
contemplated by this Agreement are not consummated, each of the parties
hereto shall keep confidential any information obtained from any other party
(except information publicly available or in such party's domain prior to the
date hereof, and except as required by court order) and shall promptly return
to the other parties all schedules, documents, instruments, work papers or
other written information without retaining copies thereof, previously
furnished by it as a result of this Agreement or in connection herein.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the parties hereto have caused this Standby
Equity Distribution Agreement to be executed by the undersigned, thereunto
duly authorized, as of the date first set forth above.

COMPANY:
ACCESS PHARMACEUTICALS, INC.
By: /s/ Kerry P. Gray
Name:  Kerry P. Gray
Title:  President and Chief Executive Officer


INVESTOR:
CORNELL CAPITAL PARTNERS, LP

By: Yorkville Advisors, LLC
Its:  General Partner

By:  /s/ Mark Angelo
Name:  Mark Angelo
Title:  Portfolio Manager

EX-10.28

Exhibit 10.28
                SECURITIES PURCHASE AGREEMENT

THIS SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated
as of March 30, 2005, by and among ACCESS PHARMACEUTICALS,
INC., 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 up to Two Million Six
Hundred Thirty Three Thousand Dollars ($2,633,000) of secured convertible
debentures (the "Convertible Debentures"), which shall be convertible into
shares of the Company's common stock, par value $0.01 (the "Common
Stock") (as converted, the "Conversion Shares") which shall be funded on the
fifth (5th) business day following the date hereof (the "Closing"), for a total
purchase price of Two Million Six Hundred Thirty Three Thousand Dollars
($2,633,000), (the "Purchase Price") in the respective amounts set forth
opposite each Buyer(s) name on Schedule I (the "Subscription Amount"); and

WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Registration
Rights Agreement substantially in the form attached hereto as Exhibit A (the
"Investor 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; and

WHEREAS, the aggregate proceeds of the sale of the Convertible Debentures
contemplated hereby shall be held in escrow pursuant to the terms of an
escrow agreement substantially in the form of the Escrow Agreement
attached hereto as Exhibit B.

WHEREAS contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a security
agreements substantially in the form attached hereto as Exhibit C (the
"Security Agreement") pursuant to which the Company has agreed to provide
the Buyer a security interest in Pledged Collateral (as this term is defined in
the Security Agreement and the Subsidiary Security Agreements), subject to
a security interest on certain specific equipment granted to Agilent Financial
Services, Inc., to secure the Company's obligations under this Agreement,
the Convertible Debenture, the Investor Registration Rights Agreement, the
Irrevocable Transfer Agent Instructions, the Security Agreement, the Pledge
and Escrow Agreement or any other obligations of the Company to the
Buyer;

WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Pledge and
Escrow Agreement substantially in the form attached hereto as Exhibit D (the
"Pledge and Escrow Agreement") pursuant to which the Company has agreed
to provide the Buyer a security interest in the Pledged Shares (as this term
is defined in the Pledge and Escrow Agreement) to secure the Company's
obligations under this Agreement, the Convertible Debenture, the Investor
Registration Rights Agreement, the Irrevocable Transfer Agent Instructions,
the Security Agreement, the Pledge and Escrow Agreement or any other
obligations of the Company to the Buyer; and

WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering Irrevocable
Transfer Agent Instructions substantially in the form attached hereto as
Exhibit E (the "Irrevocable Transfer Agent Instructions")

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 Closing (as defined herein below)
and the Company agrees to sell and issue to each Buyer, severally and not
jointly, at Closing, Convertible Debentures in amounts corresponding with
the Subscription Amount set forth opposite each Buyer's name on Schedule
I hereto.  Upon execution hereof by a Buyer, the Buyer shall wire transfer
the Subscription Amount set forth opposite his name on Schedule I in same-
day funds or a check payable to "David Gonzalez, Esq., as Escrow Agent for
Access Pharmaceuticals, Inc./Cornell Capital Partners, LP", which
Subscription Amount shall be held in escrow pursuant to the terms of the
Escrow Agreement (as hereinafter defined) and disbursed in accordance
therewith.  Notwithstanding the foregoing, a Buyer may withdraw his
Subscription Amount and terminate this Agreement as to such Buyer at any
time after the execution hereof and prior to Closing (as hereinafter defined).

(b) Closing Date.  The Closing of the purchase and sale of the Convertible
Debentures shall take place at 10:00 a.m. Eastern Standard Time on the fifth
(5th) business day following the date hereof, subject to notification of
satisfaction of the conditions to the First Closing set forth herein and in
Sections 6 and 7 below (or such later date as is mutually agreed to by the
Company and the Buyer(s)) (the "Closing Date").  The Closing shall occur
on the Closing Date 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) Escrow Arrangements; Form of Payment.  Upon execution hereof by
Buyer(s) and pending the Closings, the aggregate proceeds of the sale of the
Convertible Debentures to Buyer(s) pursuant hereto shall be deposited in a
non-interest bearing escrow account with David Gonzalez, Esq., as escrow
agent (the "Escrow Agent"), pursuant to the terms of an escrow agreement
between the Company, the Buyer(s) and the Escrow Agent in the form
attached hereto as Exhibit B (the "Escrow Agreement"). Subject to the
satisfaction of the terms and conditions of this Agreement, on the Closing
Date, (i) the Escrow Agent shall deliver to the Company in accordance with
the terms of the Escrow Agreement such aggregate proceeds for the
Convertible Debentures to be issued and sold to such Buyer(s), minus the
unpaid structuring fees and expenses of Yorkville Advisors Management,
LLC of Ten Thousand Dollars ($10,000) which shall be paid directly from
the gross proceeds held in escrow of the Closing and (ii) the Company shall
deliver to each Buyer, Convertible Debentures which such Buyer(s) is
purchasing 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 Convertible Debentures
and, upon conversion of Convertible Debentures, the Buyer will acquire the
Conversion Shares then issuable, 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 Conversion Shares at any time
in accordance with or pursuant to an effective registration statement covering
such Conversion Shares or an available exemption under the Securities Act.

(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 Convertible
Debentures 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 such 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
Convertible Debentures and the Conversion Shares, 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 Convertible Debentures and
the Conversion Shares 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 Convertible Debentures and the
Conversion Shares.

(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 Convertible
Debentures or the Conversion Shares, or the fairness or suitability of the
investment in the Convertible Debentures or the Conversion Shares, nor have
such authorities passed upon or endorsed the merits of the offering of the
Convertible Debentures or the Conversion Shares.

(f) Transfer or Resale.  Each Buyer understands that except as provided in
the Investor Registration Rights Agreement: (i) the Convertible Debentures
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, or (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; (ii) any sale of such securities made in
reliance on Rule 144 under the Securities Act (or a successor rule
thereto) ("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 such
securities under circumstances in which the seller (or the person through
whom the sale is made) may be deemed to be an underwriter (as that term
is defined in the 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 such securities under the Securities Act or any state
securities laws or to comply with the terms and conditions of any exemption
thereunder.  The Company reserves the right to place stop transfer
instructions against the shares and certificates for the Conversion Shares.

(g) Legends.  Each Buyer understands that the certificates or other
instruments representing the Convertible Debentures and or the Conversion
Shares shall bear a restrictive legend in substantially the following form (and
a stop transfer order may be placed against transfer of such stock
certificates):

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.

The legend set forth above shall be removed and the Company within two (2)
business days shall issue a certificate without such legend to the holder of the
Conversion Shares upon which it is stamped, if, unless otherwise required by
state securities laws, (i) in connection with a sale transaction, provided the
Conversion Shares are registered under the Securities Act or (ii) in
connection with a sale transaction, after such holder provides the Company
with an opinion of counsel, which opinion shall be in form, substance and
scope customary for opinions of counsel in comparable transactions, to the
effect that a public sale, assignment or transfer of the Conversion Shares may
be made without registration under the Securities Act.

(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, the Security Agreement, the Investor
Registration Rights Agreement, the Escrow Agreement, the Irrevocable
Transfer Agent Agreement, and the Pledge and Escrow Agreement; (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-K for the fiscal year ended December 31, 2003; (iv) the
Company's Form 10-Q for the fiscal quarter ended September 30, 2004 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 Convertible Debentures 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.

The Company represents and warrants to each of the Buyers that, except as
set forth in the SEC Documents (as defined herein):

(a) 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 a material adverse effect
on the Company and its subsidiaries taken as a whole.

(b) Authorization, Enforcement, Compliance with Other Instruments.  (i) The
Company has the requisite corporate power and authority to enter into and
perform this Agreement, the Security Agreement, the Investor Registration
Rights Agreement, the Irrevocable Transfer Agent Agreement, the Escrow
Agreement, the Pledge and Escrow Agreement, and any related agreements
(collectively the "Transaction Documents") and to issue the Convertible
Debentures and the Conversion Shares 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
Convertible Debentures the Conversion Shares  and the reservation for
issuance and the issuance of the Conversion Shares issuable upon conversion
or exercise thereof, have been duly authorized by the Company's Board of
Directors and no further consent or authorization 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 Investor
Registration Rights Agreement or perform any of the Company's other
obligations under such documents.

(c) Capitalization.  As of the date hereof the authorized capital stock of the
Company consists of 50,000,000 shares of Common Stock, par value $0.01
per share and 2,000,000 shares of Preferred Stock of which 15,536,299
shares of Common Stock and zero shares of Preferred Stock are issued and
outstanding.  All of such outstanding shares have been validly issued and are
fully paid and nonassessable.  Except as disclosed in the SEC Documents (as
defined in Section 3(f)), 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 of this Agreement, (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 and (iii) 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 and other resale registration
statement requirements relating to currently outstanding or issuable securities
described in the SEC Documents) and (iv) there are no outstanding
registration statements (other than resale registration statements relating to
currently outstanding or issuable securities described in the SEC Documents)
and there are no outstanding comment letters from the SEC or any other
regulatory agency.  There are no securities or instruments containing anti-
dilution or similar provisions that will be triggered by the issuance of the
Convertible Debentures as described in this Agreement.  The Company has
furnished to the Buyer true and correct copies of the Company's Articles of
Incorporation, as amended and as in effect on the date hereof (the "Articles
of Incorporation"), and the Company's By-laws, as in effect on the date
hereof (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 other than stock options issued to employees and
consultants or other securities described in the SEC Documents.

(d) Issuance of Securities.  The Convertible Debentures are duly authorized
and, upon issuance in accordance with the terms hereof, shall be duly issued,
fully paid and nonassessable, are free from all taxes, liens and charges with
respect to the issue thereof.  The Conversion Shares issuable upon conversion
of the Convertible Debentures have been duly authorized and reserved for
issuance.  Upon conversion or exercise in accordance with the Convertible
Debentures the Conversion Shares will be duly issued, fully paid and
nonassessable.

(e) No Conflicts.  Except as disclosed in the SEC Documents, the execution,
delivery and performance of the Transaction Documents by the Company and
the consummation by the Company of the transactions contemplated hereby
will not (i) result in a violation of the Certificate of Incorporation, any
certificate of designations of any outstanding series of preferred stock of the
Company or the 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 agreement, indenture or instrument to which the
Company or any of its subsidiaries is a party, or result in a 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 American
Stock Exchange on which the Common Stock is traded) 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 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, 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.  Except as disclosed in the SEC Documents, 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.

(f) SEC Documents: Financial Statements.  Since January 1, 2002, the
Company has filed all reports, schedules, forms, statements and other
documents required to be filed by it with the SEC under of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") (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").  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 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 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
document provided by or on behalf of the Company to the Buyer which is
not included in the SEC Documents, including, without limitation,
information referred to in 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 circumstances under which they
were made, not misleading.

(g) 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.

(h) Absence of Litigation.  Except as disclosed in the SEC Documents, 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 on the transactions contemplated
hereby (ii) adversely affect the validity or enforceability of, or the authority
or ability of the Company to perform its obligations under, this Agreement
or any of the documents contemplated herein, or (iii) except as expressly
disclosed in the SEC Documents, have a material adverse effect on the
business, operations, properties, financial condition or results of  operations
of the Company and its subsidiaries taken as a whole.

(i) Acknowledgment Regarding Buyer's Purchase of the Convertible
Debentures.  The Company acknowledges and agrees that the Buyer(s) 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 the Buyer(s) 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 the Buyer(s) 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 Convertible Debentures or
the Conversion Shares.  The Company further represents to the Buyer that
the Company's decision to enter into this Agreement has been based solely
on the independent evaluation by the Company and its representatives.

(j) 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
Convertible Debentures or the Conversion Shares.

(k) 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 security or solicited any offers to buy any security,
under circumstances that would require registration of the Convertible
Debentures or the Conversion Shares under the Securities Act or cause this
offering of the Convertible Debentures or the Conversion Shares to be
integrated with prior offerings by the Company for purposes of the Securities
Act.

(l) Employee Relations.  Neither the Company nor any of its subsidiaries is
involved in any labor dispute nor, to the knowledge of the Company or any
of its subsidiaries, is any such dispute threatened.  None of the Company's
or its subsidiaries' employees is a member of a union and the Company and
its subsidiaries believe that their relations with their employees are good.

(m) Intellectual Property Rights.  The Company and its subsidiaries own or
possess adequate rights or licenses to use all trademarks, trade names, service
marks, service mark registrations, service names, patents, patent rights,
copyrights, inventions, licenses, approvals, governmental authorizations,
trade secrets and rights necessary to conduct their respective businesses as
now conducted.  The Company and its subsidiaries do not have any
knowledge of any infringement by the Company or its subsidiaries of
trademark, trade name rights, patents, patent rights, copyrights, inventions,
licenses, service names, service marks, service mark registrations, trade
secret or other similar rights of others, and, to the knowledge of the
Company there is no claim, action or proceeding being made or brought
against, or to the Company's knowledge, being threatened against, the
Company or its subsidiaries regarding trademark, trade name, patents, patent
rights, invention, copyright, license, service names, service marks, service
mark registrations, trade secret or other infringement; and the Company and
its subsidiaries are unaware of any facts or circumstances which might give
rise to any of the foregoing.

(n) Environmental Laws.  The Company and its subsidiaries are (i) in
compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants "Environmental Laws"), (ii) have received all permits,
licenses or other approvals required of them under applicable Environmental
Laws to conduct their respective businesses and (iii) are in compliance with
all terms and conditions of any such permit, license or approval.

(o) Title.  Any real property and facilities held under lease by the Company
and its subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not interfere with the
use made and proposed to be made of such property and buildings by the
Company and its subsidiaries.

(p) Insurance.  The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as management of the Company believes to be prudent
and customary in the businesses in which the Company and its subsidiaries
are engaged.  Neither the Company nor any such subsidiary has been refused
any insurance coverage sought or applied for and neither the Company nor
any such subsidiary has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not materially and adversely affect the
condition, financial or otherwise, or the earnings, business or operations of
the Company and its subsidiaries, taken as a whole.

(q) Regulatory Permits.  The Company and its subsidiaries possess all
material certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct their
respective businesses, and neither the Company nor any such subsidiary has
received any notice of proceedings relating to the revocation or modification
of any such certificate, authorization or permit.

(r) Internal Accounting Controls.  The Company and each of its 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 generally accepted accounting principles and to maintain
asset accountability, and (iii) the recorded amounts for assets is compared
with the existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.

(s) No Material Adverse Breaches, etc.  Except as set forth in the SEC
Documents, neither the Company nor any of its subsidiaries is subject to any
charter, corporate or other legal restriction, or any judgment, decree, order,
rule or regulation which in the judgment of the Company's officers has or is
expected in the future to have a material adverse effect on the business,
properties, operations, financial condition, results of operations or prospects
of the Company or its subsidiaries.  Except as set forth in the SEC
Documents, neither the Company nor any of its subsidiaries is in breach of
any contract or agreement which breach, in the judgment of the Company's
officers, has or is expected to have a material adverse effect on the business,
properties, operations, financial condition, results of operations or prospects
of the Company or its subsidiaries.

(t) Tax Status.  Except as set forth in the SEC Documents, the Company and
each of its subsidiaries has made and filed all federal and state income and
all other tax returns, reports and declarations required by any jurisdiction to
which it is subject and (unless and only to the extent that the Company and
each of its subsidiaries has set aside on its books provisions reasonably
adequate for the payment of all unpaid and unreported taxes) has paid all
taxes and other governmental assessments and charges that are material in
amount, shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith and has set aside on
its books provision reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports or
declarations apply.  There are no unpaid taxes in any material amount
claimed to be due by the taxing authority of any jurisdiction, and the officers
of the Company know of no basis for any such claim.

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

(v) Fees and Rights of First Refusal.  The Company is not obligated to offer
the securities offered hereunder on a right of first refusal basis or otherwise
to any third parties including, but not limited to, current or former
shareholders of the Company, underwriters, brokers, agents or other third
parties.

4. COVENANTS.

(a) Best Efforts.  Each party shall use its best efforts timely to satisfy each
of the conditions to be satisfied by it as provided in Sections 6 and 7 of this
Agreement.

(b) Form D.  The Company agrees to file a Form D with respect to the
Conversion Shares as required under Regulation D and to provide a copy
thereof to each Buyer promptly after such filing.  The Company shall, on or
before the Closing Date, take such action as the Company shall reasonably
determine is necessary to qualify the Conversion Shares, or obtain an
exemption for the Conversion Shares for sale to the Buyers at the Closing
pursuant to this Agreement under applicable securities or "Blue Sky" laws
of the states of the United States, and shall provide evidence of any such
action so taken to the Buyers on or prior to the Closing Date.

(c) Reporting Status.  Until the earlier of (i) the date as of which the
Buyer(s) may sell all of the Conversion Shares without restriction pursuant
to Rule 144(k) promulgated under the Securities Act (or successor thereto),
or (ii) the date on which (A) the Buyer(s) shall have sold all the Conversion
Shares and (B) none of the Convertible Debentures are outstanding (the
"Registration Period"), the Company shall file in a timely manner all reports
required to be filed with the SEC pursuant to the Exchange Act and the
regulations of the SEC thereunder, and the Company shall not terminate its
status as an issuer required to file reports under the Exchange Act even if
the Exchange Act or the rules and regulations thereunder would otherwise
permit such termination.

(d) Use of Proceeds.  The Company will use the proceeds from the sale of
the Convertible Debentures for general corporate and working capital
purposes.

(e) Reservation of Shares.  The Company shall take all action reasonably
necessary to at all times have authorized, and reserved for the purpose of
issuance, such number of shares of Common Stock as shall be necessary to
effect the issuance of the Conversion Shares.  If at any time the Company
does not have available such shares of Common Stock as shall from time to
time be sufficient to effect the conversion of all of the Conversion Shares of
the Company shall call and hold a special meeting of the shareholders within
sixty (60) days of such occurrence, for the sole purpose of increasing the
number of shares authorized.  The Company's management shall recommend
to the shareholders to vote in favor of increasing the number of shares of
Common Stock authorized.  Management shall also vote all of its shares in
favor of increasing the number of authorized shares of Common Stock.

(f) Listings or Quotation.  The Company shall promptly secure the listing or
quotation of the Conversion Shares upon each national securities exchange,
automated quotation system or The National Association of Securities Dealers
Inc.'s Over-The-Counter Bulletin Board ("OTCBB"), the American Stock
Exchange, or other market, if any, upon which shares of Common Stock are
then listed or quoted (subject to official notice of issuance) and shall use its
best efforts to maintain, so long as any other shares of Common Stock shall
be so listed, such listing of all Conversion Shares from time to time issuable
under the terms of this Agreement.

(g) Fees and Expenses.  Each of the Company and the Buyer(s) shall pay all
costs and expenses incurred by such party in connection with the negotiation,
investigation, preparation, execution and delivery of the Transaction
Documents.  The Company shall pay Yorkville Advisors Management LLC
a fee equal to ten percent (10%) of the Purchase Price.

(h) The Company shall pay a structuring fee to Yorkville Advisors
Management, LLC of Ten Thousand Dollars ($10,000) which shall be paid
directly from the proceeds of the Closing.

The Company shall pay the Buyers a non-refundable due diligence fee of
Two Thousand Five Hundred Dollars ($2,500) which was paid on February
28, 2005.

Upon the execution of this Agreement, the Company shall issue to the
Buyer(s) Fifty Thousand (50,000) shares of the Company's Common
Stock (the "Buyer's Shares")  The Buyer's Shares shall have "piggy-back"
and demand registration rights.

(i) Corporate Existence.  So long as any of the Convertible Debentures
remain outstanding, the Company shall not directly or indirectly consummate
any merger, reorganization, restructuring, reverse stock split consolidation,
sale of all or substantially all of the Company's assets or any similar
transaction or related transactions (each such transaction, an "Organizational
Change") unless, prior to the consummation of an Organizational Change, the
Company obtains the written consent of each Buyer or makes provision for
the repayment of the Convertible Debentures, as part of such Organizational
Change.  In any such case, the Company will make appropriate provision
with respect to such holders' rights and interests to insure that the provisions
of this Section 4(h) will thereafter be applicable to the Convertible
Debentures.

(j) Transactions With Affiliates.  So long as any Convertible Debentures are
outstanding, the Company shall not, and shall cause each of its subsidiaries
not to, enter into, amend, modify or supplement, or permit any subsidiary to
enter into, amend, modify or supplement any agreement, transaction,
commitment, or arrangement with any of its or any subsidiary's officers,
directors, person who were officers or directors at any time during the
previous two (2) years, stockholders who beneficially own five percent (5%)
or more of the Common Stock, or Affiliates (as defined below) or with any
individual related by blood, marriage, or adoption to any such individual or
with any entity in which any such entity or individual owns a five percent
(5%) or more beneficial interest (each a "Related Party"), except for (a)
customary employment arrangements and benefit programs on reasonable
terms, (b) any investment in an Affiliate of the Company,  (c) any
agreement, transaction, commitment, or arrangement on an arms-length basis
on terms no less favorable than terms which would have been obtainable
from a person other than such Related Party, (d) any agreement transaction,
commitment, or arrangement which is approved by a majority of the
disinterested directors of the Company, for purposes hereof, any director
who is also an officer of the Company or any subsidiary of the Company
shall not be a disinterested director with respect to any such agreement,
transaction, commitment, or arrangement.  "Affiliate" for purposes hereof
means, with respect to any person or entity, another person or entity that,
directly or indirectly, (i) has a ten percent (10%) or more equity interest in
that person or entity, (ii) has ten percent (10%) or more common ownership
with that person or entity, (iii) controls that person or entity, or (iv) shares
common control with that person or entity.  "Control" or "controls" for
purposes hereof means that a person or entity has the power, direct or
indirect, to conduct or govern the policies of another person or entity.

(k) Transfer Agent.  The Company covenants and agrees that, in the event
that the Company's agency relationship with the transfer agent should be
terminated for any reason prior to a date which is two (2) years after the
Closing Date, the Company shall immediately appoint a new transfer agent
and shall require that the new transfer agent execute and agree to be bound
by the terms of the Irrevocable Transfer Agent Instructions (as defined
herein).

(l) Restriction on Issuance of the Capital Stock. Except for shares of
Common Stock issued to the Buyers or their affiliates under conversion of
the Convertible Debentures or otherwise, so long as any Convertible
Debentures are outstanding, the Company shall not:

(i) without the prior written consent of the Buyer(s), (a) issue or sell shares
of Common Stock or Preferred Stock without consideration or for a
consideration per share less than the Bid Price of the Common Stock
determined immediately prior to its issuance, (b) issue any warrant, option,
right, contract, call, or other security instrument granting the holder thereof,
the right to acquire Common Stock without consideration or for a
consideration less than such Common Stock's Bid Price value determined
immediately prior to its issuance (except upon exercise or conversion of any
security that, pursuant to its terms, is exercisable or convertible into the
Company's Common Stock and was issued or outstanding prior to the date
hereof), (c) enter into any security instrument granting the holder a security
interest in any or all assets of the Company or its subsidiaries, or (d) file
any registration statement on Form S-8 except to register up to 1,300,000
shares of the Common Stock to be issued under a stock incentive plan, and

(ii) not withstanding Section 4(l)(i) above, the Company may, without
obtaining the prior written consent of the Buyer(s), issue or sell shares of
Common Stock or Preferred Stock for a consideration per share of up to 20%
below the closing Bid Price of the Common Stock determined immediately
prior to its issuance, provided that 50% of the net proceeds of any such
issuance are used to redeem the outstanding Convertible Debentures.

5. TRANSFER AGENT INSTRUCTIONS.

The Company shall issue the Irrevocable Transfer Agent Instructions to its
transfer agent irrevocably appointing David Gonzalez, Esq. as its agent for
purpose of having certificates issued, registered in the name of the Buyer(s)
or its respective nominee(s), for the Conversion Shares representing such
amounts of Convertible Debentures as specified from time to time by the
Buyer(s) to the Company upon conversion of the Convertible Debentures, for
interest owed pursuant to the Convertible Debenture, and for any and all
Liquidated Damages (as this term is defined in the Investor Registration
Rights Agreement).  David Gonzalez, Esq. shall be paid a cash fee of Fifty
Dollars ($50) for every occasion they act pursuant to the Irrevocable Transfer
Agent Instructions.  The Company shall not change its transfer agent without
the express written consent of the Buyer(s), which may be withheld by the
Buyer(s) in its sole discretion.  Prior to registration of the Conversion Shares
under the Securities Act, all such certificates shall bear the restrictive
legend specified in Section 2(g) of this Agreement.  The Company warrants
that no instruction other than the Irrevocable Transfer Agent Instructions
referred to in this Section 5, and stop transfer instructions to give effect
to Section 2(g) hereof (in the case of the Conversion Shares prior to
registration of such shares under the Securities Act) will be given by the
Company to its transfer agent with respect to the Conversion Shares and that
the Conversion Shares shall otherwise be freely transferable on the books
and records of the Company as and to the extent provided in this Agreement
and the Investor Registration Rights Agreement.  Nothing in this Section 5
shall affect in any way the Buyer's obligations and agreement to comply with
all applicable securities laws upon resale of Conversion Shares.  If the
Buyer(s) provides the Company with an opinion of counsel reasonable
satisfactory to the Company, in form, scope and substance customary for
opinions of counsel in comparable transactions to the effect that
registration of a resale by the Buyer(s) of any of the Conversion Shares
is not required under the Securities Act, the Company shall within
two (2) business days instruct its transfer
agent to issue one or more certificates in such name and in such
denominations as specified by the Buyer.  The Company acknowledges that
a breach by it of its obligations hereunder will cause irreparable harm to the
Buyer by vitiating the intent and purpose of the transaction contemplated
hereby.  Accordingly, the Company acknowledges that the remedy at law for
a breach of its obligations under this Section 5 will be inadequate and agrees,
in the event of a breach or threatened breach by the Company of the
provisions of this Section 5, that the Buyer(s) shall be entitled, in addition
to all other available remedies, to an injunction restraining any breach and
requiring immediate issuance and transfer, without the necessity of showing
economic loss and without any bond or other security being required.

6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.

The obligation of the Company hereunder to issue and sell the Convertible
Debentures to the Buyer(s) at the Closings is subject to the satisfaction, at or
before the Closing Date, of each of the following conditions, provided that
these conditions are for the Company's sole benefit and may be waived by
the Company at any time in its sole discretion:

(a) Each Buyer shall have executed the Transaction Documents and delivered
them to the Company.

(b) The Buyer(s) shall have delivered to the Escrow Agent the Purchase Price
for Convertible Debentures in respective amounts as set forth next to each
Buyer as outlined on Schedule I attached hereto and the Escrow Agent shall
have delivered the net proceeds to the Company by wire transfer of
immediately available U.S. funds pursuant to the wire instructions provided
by the Company.

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

7. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.

The obligation of the Buyer(s) hereunder to Purchase the Convertible
Debentures at the Closing is subject to the satisfaction, at or before the
Closing Date, of each of the following conditions:

(i) The Company shall have executed the Transaction Documents and
delivered the same to the Buyer(s).

(ii) The Common Stock shall be authorized for listing on the American Stock
Exchange, trading in the Common Stock shall not have been suspended for
any reason, and all the Conversion Shares issuable upon the conversion of
the Convertible Debentures shall be approved for listing by the American
Stock Exchange.

(iii) The representations and warranties of the Company shall be true and
correct in all material respects (except to the extent that any of such
representations and warranties is already qualified as to materiality in Section
3 above, in which case, such representations and warranties shall be true and
correct without further qualification) as of the date when made and as of the
Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date) and the Company shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed,
satisfied or complied with by the Company at or prior to the Closing Date.
If requested by the Buyer, the Buyer shall have received a certificate,
executed by the President of the Company, dated as of the Closing Date, to
the foregoing effect and as to such other matters as may be reasonably
requested by the Buyer including, without limitation an update as of the
Closing Date regarding the representation contained in Section 3(c) above.

(iv) The Company shall have executed and delivered to the Buyer(s) the
Convertible Debentures in the respective amounts set forth opposite each
Buyer(s) name on Schedule I attached hereto.

(v) The Buyer(s) shall have received an opinion of counsel from Bingham
McCutchen LLP in a form satisfactory to the Buyer(s).

(vi) The Company shall have provided to the Buyer(s) a certificate of good
standing from the secretary of state from the state in which the company is
incorporated.

(vii) The Company shall have executed a form UCC-1 or such other forms
as may be required to perfect the Buyer's interest in the Pledged Property as
detailed in the Security Agreement and the Subsidiary Security Agreements
and provided proof of such filing to the Buyer(s).

(viii) The Company shall have delivered to the Escrow Agent the Pledged
Shares as well executed and medallion guaranteed stock bond powers as
required pursuant to the Pledge and Escrow Agreement.

(ix) The Company shall have provided to the Buyer an acknowledgement, to
the satisfaction of the Buyer, from the Company's certified public accountant
as to its ability to provide all consents required in order to file a
registration statement in connection with this transaction.

(x) The Company shall have reserved out of its authorized and unissued
Common Stock, solely for the purpose of effecting the conversion of the
Convertible Debentures, shares of Common Stock to effect the conversion of
all of the Conversion Shares then outstanding.

(xi) The Irrevocable Transfer Agent Instructions, in form and substance
satisfactory to the Buyer, shall have been delivered to and acknowledged in
writing by the Company's transfer agent.

8. INDEMNIFICATION.

(a) In consideration of the Buyer's execution and delivery of this Agreement
and acquiring the Convertible Debentures and the Conversion Shares
hereunder, and in addition to all of the Company's other obligations under
this Agreement, the Company shall defend, protect, indemnify and hold
harmless the Buyer(s) and each other holder of the Convertible Debentures
and the Conversion Shares, and all of their officers, directors, employees and
agents (including, without limitation, those retained in connection with the
transactions contemplated by this Agreement) (collectively, the "Buyer
Indemnitees") from and against any and all actions, causes of action, suits,
claims, losses, costs, penalties, fees, liabilities and damages, and expenses
in connection therewith (irrespective of whether any such Buyer Indemnitee
is a party to the action for which indemnification hereunder is sought), and
including reasonable attorneys' fees and disbursements (the "Indemnified
Liabilities"), incurred by the Buyer Indemnitees or any of them as a result
of, or arising out of, or relating to (a) any misrepresentation or breach of any
representation or warranty made by the Company in this Agreement, the
Convertible Debentures or the Investor Registration Rights Agreement or any
other certificate, instrument or document contemplated hereby or thereby, (b)
any breach of any covenant, agreement or obligation of the Company
contained in this Agreement, or the Investor Registration Rights Agreement
or any other certificate, instrument or document contemplated hereby or
thereby, or (c) any cause of action, suit or claim brought or made against
such Indemnitee and arising out of or resulting from the execution, delivery,
performance or enforcement of this Agreement or any other instrument,
document or agreement executed pursuant hereto by any of the Indemnities,
any transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of the issuance of the Convertible Debentures
or the status of the Buyer or holder of the Convertible Debentures  the
Conversion Shares,  as a Buyer of Convertible Debentures in the Company.
To the extent that the foregoing undertaking by the Company may be
unenforceable for any reason, the Company shall make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities, which is permissible under applicable law.

(b) In consideration of the Company's execution and delivery of this
Agreement, and in addition to all of the Buyer's other obligations under this
Agreement, the Buyer shall defend, protect, indemnify and hold harmless the
Company and all of its officers, directors, employees and agents (including,
without limitation, those retained in connection with the transactions
contemplated by this Agreement) (collectively, the "Company Indemnitees")
from and against any and all Indemnified Liabilities incurred by the
Indemnitees or any of them as a result of, or arising out of, or relating to (a)
any misrepresentation or breach of any representation or warranty made by
the Buyer(s) in this Agreement, instrument or document contemplated hereby
or thereby executed by the Buyer, (b) any breach of any covenant, agreement
or obligation of the Buyer(s) contained in this Agreement,  the Investor
Registration Rights Agreement or any other certificate, instrument or
document contemplated hereby or thereby executed by the Buyer, or (c) any
cause of action, suit or claim brought or made against such Company
Indemnitee based on material misrepresentations or due to a material breach
and arising out of or resulting from the execution, delivery, performance or
enforcement of this Agreement, the Investor Registration Rights Agreement
or any other instrument, document or agreement executed pursuant hereto by
any of the Company Indemnities.  To the extent that the foregoing
undertaking by each Buyer may be unenforceable for any reason, each Buyer
shall make the maximum contribution to the payment and satisfaction of each
of the Indemnified Liabilities, which is permissible under applicable law.

9. GOVERNING LAW: MISCELLANEOUS.

(a) Governing Law.  This Agreement shall be governed by and interpreted
in accordance with the laws of the State of New Jersey without regard to the
principles of conflict of laws.  The parties further agree that any action
between them shall be heard in Hudson County, New Jersey, and expressly
consent to the jurisdiction and venue of the Superior Court of New Jersey,
sitting in Hudson County and the United States District Court for the District
of New Jersey sitting in Newark, New Jersey for the adjudication of any civil
action asserted pursuant to this Paragraph.

(b) Counterparts.  This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party
and delivered to the other party.  In the event any signature page is delivered
by facsimile transmission, the party using such means of delivery shall cause
four (4) additional original executed signature pages to be physically
delivered to the other party within five (5) days of the execution and delivery
hereof.

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

(d) Severability.  If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.

(e) Entire Agreement, Amendments.  This Agreement supersedes all other
prior oral or written agreements between the Buyer(s), the Company, their
affiliates and persons acting on their behalf with respect to the matters
discussed herein, and this Agreement and the instruments referenced herein
contain the entire understanding of the parties with respect to the matters
covered herein and therein and, except as specifically set forth herein or
therein, neither the Company nor any Buyer makes any representation,
warranty, covenant or undertaking with respect to such matters.  No
provision of this Agreement may be waived or amended other than by an
instrument in writing signed by the party to be charged with enforcement.

(f) Notices.  Any notices, consents, waivers, or other communications
required or permitted to be given under the terms of this Agreement must be
in writing and will be deemed to have been delivered (i) upon receipt, when
delivered personally; (ii) upon confirmation of receipt, when sent by
facsimile; (iii) three (3) days after being sent by U.S. certified mail, return
receipt requested, or (iv) one (1) day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to the
party to receive the same.  The addresses and facsimile numbers for such
communications shall be:

If to the Company, to: Access Pharmaceuticals, Inc.
2600 Stemmons Freeway, Suite 176
Dallas, TX 75207
Attention: Kerry P. Gray
Telephone: (214) 905-5100
Facsimile: (214) 905-5101

With a copy to: Bingham McCutchen LLP
150 Federal Street
Boston, MA 02110-1726
Attention: John J. Concannon, Esq.
Telephone: (617) 951-8874
Facsimile: (617) 951-8736

If to the Buyer(s), to its address and facsimile number on Schedule I, with
copies to the Buyer's counsel as set forth on Schedule I.  Each party shall
provide five (5) days' prior written notice to the other party of any change
in address or facsimile number.

(g) Successors and Assigns.  This Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors and assigns.
Neither the Company nor any Buyer shall assign this Agreement or any
rights or obligations hereunder without the prior written consent of the other
party hereto.

(h) No Third Party Beneficiaries.  This Agreement is intended for the benefit
of the parties hereto and their respective permitted successors and assigns,
and is not for the benefit of, nor may any provision hereof be enforced by,
any other person.

(i) Survival.  Unless this Agreement is terminated under Section 9(l), the
representations and warranties of the Company and the Buyer(s) contained
in Sections 2 and 3, the agreements and covenants set forth in Sections 4, 5
and 9, and the indemnification provisions set forth in Section 8, shall survive
the Closing for a period of two (2) years following the date on which the
Convertible Debentures are converted in full or, if earlier, until Convertible
Debentures have been retired.  The Buyer(s) shall be responsible only for its
own representations, warranties, agreements and covenants hereunder.

(j) Publicity.  The Company and the Buyer(s) shall have the right to approve,
before issuance any press release or any other public statement with respect
to the transactions contemplated hereby made by any party; provided,
however, that the Company shall be entitled, without the prior approval of
the Buyer(s), to issue any press release or other public disclosure with
respect to such transactions required under applicable securities or other laws
or regulations (the Company shall use its best efforts to consult the Buyer(s)
in connection with any such press release or other public disclosure prior to
its release and Buyer(s) shall be provided with a copy thereof upon release
thereof).

(k) Further Assurances.  Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents,
as the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

(l) Termination.  In the event that the Closing shall not have occurred with
respect to the Buyers on or before five (5) business days from the date hereof
due to the Company's or the Buyer's failure to satisfy the conditions set forth
in Sections 6 and 7 above (and the non-breaching party's failure to waive
such unsatisfied condition(s)), the non-breaching party shall have the option
to terminate this Agreement with respect to such breaching party at the close
of business on such date without liability of any party to any other party;
provided, however, that if this Agreement is terminated by the Company
pursuant to this Section 9(l), the Company shall remain obligated to
reimburse the Buyer(s) for the fees and expenses of Yorkville Advisors
Management, LLC described in Section 4(g) above.

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

[REMAINDER PAGE INTENTIONALLY LEFT BLANK]

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

COMPANY: ACCESS PHARMACEUTICALS, INC.

By:/s/ Kerry P. Gray
- --------------------
Name: Kerry P. Gray
Title: President and Chief Executive Officer

EX-10.29

Exhibit 10.29

THIS SECURED DEBENTURE, AND THE SECURITIES INTO WHICH
IT IS CONVERTIBLE (COLLECTIVELY, THE "SECURITIES"), HAVE
NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES
AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION
OF ANY STATE.  THE SECURITIES ARE BEING OFFERED
PURSUANT TO A SAFE HARBOR FROM REGISTRATION UNDER
REGULATION D PROMULGATED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"). THE SECURITIES ARE
"RESTRICTED" AND MAY NOT BE OFFERED OR SOLD UNLESS THE
SECURITIES ARE REGISTERED UNDER THE ACT, PURSUANT TO
REGULATION D OR PURSUANT TO AVAILABLE EXEMPTIONS
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND THE
COMPANY WILL BE PROVIDED WITH OPINION OF COUNSEL OR
OTHER SUCH INFORMATION AS IT MAY REASONABLY REQUIRE
TO CONFIRM THAT SUCH EXEMPTIONS ARE AVAILABLE.
FURTHER HEDGING TRANSACTIONS INVOLVING THE SECURITIES
MAY NOT BE MADE EXCEPT IN COMPLIANCE WITH THE ACT.

                          SECURED DEBENTURE
                     ACCESS PHARMACEUTICALS, INC.
                  7% Secured Convertible Debenture
                          March  30, 2006

              No.  HHF-001              US$1,316,500

This Secured Debenture (the "Debenture") is issued on March 30, 2005
(the "Closing Date") by Access Pharmaceuticals, Inc., a Delaware
corporation (the "Company"), to Highgate House Funds, Ltd. (together
with its permitted successors and assigns, the "Holder") pursuant to
exemptions from registration under the Securities Act of 1933, as
amended.

ARTICLE I.
Section 1.01     Principal and Interest.  For value received, the Company
hereby promises to pay to the order of the Holder on the one year
anniversary of the date hereof ("Maturity Date"), in lawful money of the
United States of America and in immediately available funds the principal
sum of One Million Three Hundred Sixteen Thousand Five Hundred
Dollars ($1,316,500), together with interest on the unpaid principal of this
Debenture at the rate of seven percent (7%) per year (compounded
monthly) from the date of this Debenture until paid in full.  The entire
principal amount and all accrued interest shall paid to the Holder on the
Maturity Date.  In no event shall the Holder be entitled to convert this
Debenture for a number of shares of Common Stock in excess of that
number of shares of Common Stock which, upon giving effect to such
conversion, would cause the aggregate number of shares of Common
Stock beneficially owned by the Holder and its affiliates to exceed 4.99%
of the outstanding shares of the Common Stock following such conversion
(unless the Holder provides the Company sixty five (65) days prior written
notice that this provision shall not apply).  For so long as the Common
Stock is listed on the American Stock Exchange or the Nasdaq, the total
number of shares issuable under this Debenture to the Holder, Cornell
Capital Partners, L.P. or their affiliates, and transferees, subsequent
transferees, or any other party pursuant to the Securities Purchase
Agreement of even date herewith among the Company, Cornell Capital
Partners, L.P., and Highgate House Funds, Ltd. (the "Securities Purchase
Agreement"), and the Pledge and Escrow Agreement of even date
herewith among the Company, Cornell Capital Partners, L.P., and
Highgate House Funds, Ltd. (the "Pledge Agreement") shall not exceed
Two Million Eight Hundred Ninety One Thousand Seven Hundred Twenty
Three (2,891,723) shares in the aggregate (representing approximately
19.9% of the  outstanding capital of the Company as of the date hereof),
absent the approval of the Company's shareholders.

Section 1.02     Monthly Repayment Schedule.  The Company shall make
six (6) scheduled payments ("Scheduled Payments") of principal, plus
accrued interest and a Redemption Premium ("Redemption Premium")
equal to 10% of the principal amount of each Scheduled Payment.  The
first Scheduled Payment shall be due and payable on November 1, 2005,
and shall continue on the first business day of each succeeding calendar
month thereafter.  The principal amount of each Scheduled Payment shall
be determined by dividing the outstanding principal amount of this
Debenture as of the date such Scheduled Payment is due by the number of
Scheduled Payments remaining.   For example, if on November 1, 2005,
the outstanding principal amount is $1,316,500, then the Scheduled
Payment due on November 1, 2005, would consist of $219,416.67 of
principal, plus a Redemption Premium of $21,942 and accrued interest on
$1,316,500 at a rate of 7% per year from the date hereof up to and
including October 31, 2005.

Section 1.03     Optional Conversion.  The Holder is entitled, at its option,
to convert, and sell on the same day, at any time and from time to time,
until payment in full of this Debenture, all or any part of the principal
amount of the Debenture, plus accrued interest, into shares (the
"Conversion Shares") of the Company's common stock, par value $0.01
per share ("Common Stock"), at the price per share (the "Conversion
Price") equal to $4.00 (the "Conversion Price").  No fraction of shares or
scrip representing fractions of shares will be issued on conversion, but the
number of shares issuable shall be rounded to the nearest whole share.  To
convert this Debenture, the Holder hereof shall deliver written notice
thereof, substantially in the form of Exhibit A to this Debenture, with
appropriate insertions (the "Conversion Notice"), to the Company at its
address as set forth herein.  The date upon which the conversion shall be
effective (the "Conversion Date") shall be deemed to be the date set forth
in the Conversion Notice.  The Holder has the right to convert this
Debenture after the Maturity Date.

Section 1.04     Reservation of Common Stock.  The Company shall reserve
and keep available out of its authorized but unissued shares of Common
Stock, solely for the purpose of effecting the conversion of this
Debenture, such number of shares of Common Stock as shall from time to
time be sufficient to effect such conversion, based upon the Conversion
Price.  If at any time the Company does not have a sufficient number of
Conversion Shares authorized and available, then the Company shall call
and hold a special meeting of its stockholders within thirty (30) days of
that time for the sole purpose of increasing the number of authorized
shares of Common Stock.

Section 1.05     Right of Redemption.  The Company at its option shall have
the right, with three (3) business days advance written notice, to redeem a
portion or all amounts outstanding under this Debenture prior to the
Maturity Date or any Scheduled Payment due date.  The Redemption
Premium shall apply to any such early redemptions.  The Company shall
pay a twenty percent (20%) premium (in lieu of the Redemption
Premium), on any Scheduled Payment not made within five (5) business
days of the date it is due.

Section 1.06     Registration Rights.  The Company is obligated to register
the resale of the Conversion Shares under the Securities Act of 1933, as
amended, pursuant to the terms of a Registration Rights Agreement,
among the Company, Cornell Capital Partners, LP and Highgate House
Funds, Ltd. of even date herewith (the "Investor Registration Rights
Agreement").

Section 1.07     Interest Payments.  The interest so payable shall be paid at
the time of a Scheduled Payment, maturity or conversion to the person in
whose name this Debenture is registered.  Interest shall be paid in
cash (via wire transfer or certified funds).  In the event of default, as
described in Article III Section 3.01 hereunder, the Holder may elect that
the interest be paid in cash (via wire transfer or certified funds) or in the
form of Common Stock.  If paid in the form of Common Stock, the
amount of stock to be issued will be calculated as follows: the value of the
stock shall be the Closing Bid Price on:  (i) the date the interest payment
is due; or (ii) if the interest payment is not made when due, the date the
interest payment is made.  A number of shares of Common Stock with a
value equal to the amount of interest due shall be issued.  No fractional
shares will be issued; therefore, in the event that the value of the Common
Stock per share does not equal the total interest due, the Company will
pay the balance in cash.

Section 1.08     Paying Agent and Registrar.  Initially, the Company will act
as paying agent and registrar.  The Company may change any paying
agent, registrar, or Company-registrar by giving the Holder not less than
ten (10) business days' written notice of its election to do so, specifying
the name, address, telephone number and facsimile number of the paying
agent or registrar.  The Company may act in any such capacity.

Section 1.09     Secured Nature of Debenture.  This Debenture is secured
by all of the assets and property of the Company as set forth on Exhibit A
to the Security Agreement dated the date hereof among the Company,
Cornell Capital Partners, LP, and Highgate House Funds, Ltd. (the
"Security Agreement") and the Pledged Shares as set forth in the Pledge
Agreement

ARTICLE II.
Section 2.01     Amendments and Waiver of Default.  The Debenture may
not be amended.  Notwithstanding the above, without the consent of the
Holder, the Debenture may be amended to cure any ambiguity, defect or
inconsistency, or to provide for assumption of the Company obligations to
the Holder.

ARTICLE III.
Section 3.01     Events of Default.  An Event of Default is defined as
follows: (a) failure by the Company to pay amounts due hereunder on the
Maturity Date; (b) failure by the Company to pay amounts due pursuant to
a Scheduled Payment within ten (10) days of the date such payment is due
(c) failure by the Company or the Company's transfer agent to deliver
Common Stock certificates to the Holder prior to the fifth (5th ) trading
day after a Conversion Date; (d) failure by the Company for ten (10) days
after notice to it to comply with any of its other agreements in the
Debenture; (d) events of bankruptcy or insolvency; (e) a breach by the
Company under the Investor Registration Rights Agreement, the Security
Agreement, the Pledge Agreement, or any of the  other Transaction
Documents (as defined in the Securities Purchase Agreement of even date
herewith among the Company, Cornell Capital Partners, LP, and Highgate
House Funds, Ltd. (the "Securities Purchase Agreement")) which is not
cured by the Company within any allocated cure period therein.  Upon the
occurrence of an Event of Default, the Holder may, in its sole discretion,
accelerate full repayment of all debentures outstanding and accrued interest
thereon or may, notwithstanding any limitations contained in this
Debenture and/or the Securities Purchase Agreement, convert all
debentures outstanding and accrued interest thereon into shares of
Common Stock pursuant to Section 1.03 herein.  Upon and Event of
Default, the Holder, in addition to any other remedies, shall have the right
(but not the obligation) to convert this Debenture at any time after an
Event of Default.

Section 3.02     Failure to Issue Unrestricted Common Stock. As indicated
in Article III Section 3.01, a breach by the Company of its obligations
under the Investor Registration Rights Agreement shall be deemed an
Event of Default, which if not cured within ten (10) days, shall entitle the
Holder to accelerate full repayment of all Debentures outstanding and
accrued interest thereon or, notwithstanding any limitations contained in
this Debenture and/or the Securities Purchase Agreement, to convert all
debentures outstanding and accrued interest thereon into shares of
Common Stock pursuant to Section 1.03 herein.  The Company
acknowledges that failure to honor a Notice of Conversion shall cause
irreparable harm to the Holder.

ARTICLE IV.
Section 4.01     Rights and Terms of Conversion.  This Debenture, in whole
or in part, may be converted at any time following the Closing Date, into
shares of Common Stock at a price equal to the Conversion Price as
described in Section 1.03 above.

Section 4.02     Re-issuance of Debenture.  When the Holder elects to
convert a part of the Debenture, then the Company shall reissue a new
Debenture in the same form as this Debenture to reflect the new principal
amount.

ARTICLE V.
Section 5.01     Anti-dilution.  If the Company, at any time while this
Debenture is outstanding, (a) shall pay a stock dividend or otherwise make
a distribution or distributions on shares of its Common Stock payable in
shares of its capital stock (whether payable in shares of its Common Stock
or of capital stock of any class), (b) subdivide outstanding shares of
Common Stock into a larger number of shares, (c) combine outstanding
shares of Common Stock into a smaller number of shares, or (d) issue by
reclassification any shares of capital stock of the Company, the
Conversion Price as applied in Section 1.03 shall be multiplied by a
fraction, the numerator of which shall be the number of shares of
Common Stock of the Company outstanding immediately before such
event and the denominator of which shall be the number of shares of
Common Stock outstanding immediately after giving effect to such event.
Any adjustment made pursuant to this Section 5.01 shall become effective
immediately after the record date for the determination of stockholders
entitled to receive such dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision,
combination or reclassification, provided that no adjustment shall be made
if the Company does not complete such dividend, distribution, subdivision,
combination or reclassification.

(1)      If the Company shall declare or make any dividend or other
distribution of its assets (or rights to acquire its assets) to holders of
Common Stock, by way of return of capital or otherwise (including,
without limitation, any distribution of cash, stock or other securities,
property or options by way of a dividend, spin off, reclassification,
corporate rearrangement or other similar transaction) (a "Distribution"), at
any time after the issuance of this Debenture, then, in each such case:

(i)      any Conversion Price in effect immediately prior to the close of
business on the record date fixed for the determination of holders of
Common Stock entitled to receive the Distribution shall be reduced,
effective as of the close of business on such record date, to a price
determined by multiplying such Conversion Price by a fraction of which
(A) the numerator shall be the closing bid price of the Common Stock on
the trading day immediately preceding such record date minus the value of
the Distribution (as determined in good faith by the Company's Board of
Directors) applicable to one share of Common Stock, and (B) the
denominator shall be the closing bid price of the Common Stock on the
trading day immediately preceding such record date; and

(ii)     either (A) the number of shares of Common Stock to be obtainable
upon exercise of this Debenture shall be increased to a number of shares
equal to the number of shares of Common Stock obtainable immediately
prior to the close of business on the record date fixed for the
determination of holders of Common Stock entitled to receive the
Distribution multiplied by the reciprocal of the fraction set forth in the
immediately preceding clause (i), or (B) in the event that the Distribution
is of common stock of a company whose common stock is traded on a
national securities exchange or a national automated quotation system, then
the holder of this Debenture shall receive an additional warrant, the terms
of which shall be identical to those of this Debenture, except that such
warrant shall be exercisable into the amount of the assets that would have
been payable to the holder of this Debenture pursuant to the Distribution
had the holder exercised this Debenture immediately prior to such record
date and with an exercise price equal to the amount by which the exercise
price of this Debenture was decreased with respect to the Distribution
pursuant to the terms of the immediately preceding clause (i). The newly
issued warrant shall have piggy-back right.

(2)      All calculations under this Section shall be made to the nearest
1/1000th of a cent or the nearest 1/1000th of a share, as the case may be.
Any calculation equal to or over .005 shall be rounded up to the next cent
or share and any calculation less than .005 shall be rounded down to the
previous cent or share.

(3)      Whenever the Conversion Price is adjusted pursuant to Section
5.01, the Company shall within one (1) Business Day after the
determination of the new Conversion Price mail and fax to the Holder, a
notice ("Company Notice of Conversion Price Adjustment") setting forth
the Conversion Price after such adjustment and setting forth a brief
statement of the factsrequiring such adjustment.

(4)      In case of any reclassification of the Common Stock, any
consolidation or merger of the Company with or into another person, the
sale or transfer of all or substantially all of the assets of the Company or
any compulsory share exchange pursuant to which the Common Stock is
converted into other securities, cash or property, then each holder of
Debentures then outstanding shall have the right thereafter to convert such
Debentures only into the shares of stock and other securities and property
receivable upon or deemed to be held by holders of Common Stock
following such reclassification, consolidation, merger, sale, transfer or
share exchange (except in the event the property is cash, then the Holder
shall have the right to convert the Debenture and receive cash in the same
manner as other stockholders), and the Holder shall be entitled upon such
event to receive such amount of securities or property as the holder of
shares of the Common Stock into which such Debenture could have been
converted immediately prior to such reclassification, consolidation,
merger, sale, transfer or share exchange would have been entitled.  The
terms of any such consolidation, merger, sale, transfer or share exchange
shall include such terms so as to continue to give to the Holder the right
to receive the securities or property set forth in this Section upon any
conversion following such consolidation, merger, sale, transfer or share
exchange.  This provision shall similarly apply to successive
reclassifications, consolidations, mergers, sales, transfers or share
exchanges;

(5)If:
(a) the Company shall declare a dividend (or any other distribution) on its
Common Stock; or

(b) the Company shall declare a special non-recurring cash dividend
redemption of its Common Stock; or

(c) the Company shall authorize the grant to all holders of the Common
Stock rights or warrants to subscribe for or purchase any shares of capital
stock of any class or of any rights; or

(d) the approval of any stockholders of the Company shall be required in
connection with any reclassification of the Common Stock of the Company
(other than a subdivision or combination of the outstanding shares of
Common Stock), any consolidation or merger to which the Company is a
party, any sale or transfer of all or substantially all of the assets of the
Company, or any compulsory share exchange whereby the Common Stock
is converted into other securities, cash or property; or

(e) the Company shall authorize the voluntary or involuntary dissolution,
liquidation or winding-up of the affairs of the Company;
then the Company shall cause to be filed at each office or agency
maintained for the purpose of conversion of Debentures, and shall cause to
be mailed and faxed to the Holder and each other holder of the Debentures
at their last addresses and facsimile number set forth in the Debenture
Register at least twenty (20) calendar days prior to the applicable record
or effective date hereinafter specified, a notice stating (x) the date on
which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be
taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distributions, redemption, rights or warrants are
to be determined, or (y) the date on which such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution,
liquidation or winding-up is expected to become effective, and the date as
of which it is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger,
sale, transfer, share exchange, dissolution, liquidation or winding-up;
provided, however, that the failure to mail such notice or any defect
therein or in the mailing thereof shall not affect the validity of the
corporate action required to be specified in such notice.

Section 5.02     If at any time conditions shall arise by reason of action or
failure to act by the Company, which action or failure to act, in the
opinion of the Board of Directors of the Company, is not adequately
covered by the other provisions hereof and which might materially and
adversely affect the rights of the Holder (different or distinguishable from
the effect generally on rights of holders of any class of the Company's
capital stock), the Company shall, at least twenty (20) calendar days prior
to the effective date of such action, mail and fax a written notice to each
holder of Debenture briefly describing the action contemplated, and an
appraiser selected by the holders of majority in principal amount of the
outstanding Debentures shall give its opinion as to the adjustment, if any
(not inconsistent with the standards established in this Section 5.01), of the
Conversion Price (including, if necessary, any adjustment as to the
securities into which Debentures may thereafter be convertible) and any
distribution which is or would be required to preserve without diluting the
rights of the holders of Debentures; provided, however, that the
Company, after receipt of the determination by such appraiser, shall have
the right to select an additional appraiser, in which case the adjustment
shall be equal to the average of the adjustments recommended by each
such appraiser.  The Company shall pay all fees and expenses of any
appraiser selected under this Section 5.02.  The Board of Directors of the
Company shall make the adjustment recommended forthwith upon the
receipt of such opinion or opinions or the taking of any such action
contemplated, as the case may be; provided, however, that no such
adjustment of the Conversion Price shall be made which, in the opinion of
the appraiser(s) giving the aforesaid opinion or opinions, would result in
an increase of the Conversion Price above the Conversion Price then in
effect.

Section 5.03     Consent  of Holder to Sell Capital Stock or Grant Security
Interests.  Except for shares of Common Stock issued to the Holder or its
affiliates under conversion of this Debenture or otherwise, so long as any
of the principal of or interest on this Debenture remains unpaid and
unconverted, the Company shall not, without the prior written consent of
the Holder, (a) issue or sell shares of Common Stock or Preferred Stock
without consideration or for a consideration per share less than the bid
price of the Common Stock determined immediately prior to its issuance,
(except upon exercise or conversion of any security that, pursuant to its
terms, is exercisable or convertible into the Company's Common Stock
and was issued or outstanding prior to the date hereof) (b) issue any
warrant, option, right, contract, call, or other security instrument granting
the holder thereof, the right to acquire Common Stock without
consideration or for a consideration less than such Common Stock's bid
price determined immediately prior to its issuance, (c) enter into any
security instrument granting the holder a security interest in any and all
assets of the Company that is senior to the security interest of the
Buyer(s), or (d) file any registration statement on Form S-8 except to
register up to 1,300,000 shares of the Common Stock to be issued under a
stock incentive plan.

Section 5.04     Not withstanding Section 5.03 above, the Company may,
without obtaining the prior written consent of the Buyer(s), issue or sell
shares of Common Stock or Preferred Stock for a consideration per share
of up to 20% below the closing bid price of the Common Stock
determined immediately prior to its issuance, provided that 50% of the net
proceeds of any such issuance are used to redeem the outstanding this
Debenture.

ARTICLE VI.
Section 6.01 Notice.  Notices regarding this Debenture shall be sent to the
parties at the following addresses, unless a party notifies the other parties,
in writing, of a change of address:

if to the Company, to:
Access Pharmaceuticals, Inc.
2600 Stemmons Freeway, Suite 176
Dallas, TX 75207
Attention:       Kerry P. Gray
Telephone:       (214) 905-5100
Facsimile:       (214) 905-5101

With a copy to:
Bingham McCutchen LLP
150 Federal Street
Boston, MA 02110-1726
Attention: John J. Concannon, Esq.
Telephone: (617) 951-8874
Facsimile: (617) 951-8736

If to the Holder:
Highgate House Funds, Ltd.
101 Hudson Street, Suite 3700
Jersey City, NJ  07303
Telephone: (201) 985-8300
Facsimile: (201) 985-8266

With a copy to: Troy Rillo, Esq.
101 Hudson Street, Suite 3700
Jersey City, NJ 07302
Telephone: (201) 985-8300
Facsimile: (201) 985-8266

Section 6.02 Governing Law.  This Debenture shall be deemed to be made
under and shall be construed in accordance with the laws of the State of
New Jersey without giving effect to the principals of conflict of laws
thereof.  Each of the parties consents to the jurisdiction of the
U.S. District Court sitting in the District of the State of New Jersey or the
state courts of the State of New Jersey sitting in Hudson County, New
Jersey in connection with any dispute arising under this Debenture and
hereby waives, to the maximum extent permitted by law, any objection,
including any objection based on forum non conveniens to the bringing of
any such proceeding in such jurisdictions.

Section 6.03 Severability.  The invalidity of any of the provisions of this
Debenture shall not invalidate or otherwise affect any of the other
provisions of this Debenture, which shall remain in full force and effect.

Section 6.04 Entire Agreement and Amendments.  This Debenture
represents the entire agreement between the parties hereto with respect to
the subject matter hereof and there are no representations, warranties or
commitments, except as set forth herein.  This Debenture may be
amended only by an instrument in writing executed by the parties hereto.

Section 6.05 Attorney Fees.        If the Company fails to strictly comply with
the terms of this Debenture, then the Company shall reimburse the Holder
promptly for all fees, costs and expenses, including, without limitation,
attorney's fees and expenses incurred by the Holder in any action in
connection with this Debenture, including, without limitation, those
incurred: (i) during any workout, attempted workout, and/or in connection
with the rendering of legal advice as to the Holder's rights, remedies and
obligations, (ii) collecting any sums which become due to the Holder, (iii)
defending or prosecuting any proceeding or any counterclaim to any
proceeding or appeal; or (iv) the protection, preservation or enforcement
of any rights or remedies of the Holder.

Section 6.06 Counterparts.  This Debenture may be executed in multiple
counterparts, each of which shall be an original, but all of which shall be
deemed to constitute on instrument.

IN WITNESS WHEREOF, with the intent to be legally bound hereby, the
Company as executed this Debenture as of the date first written above.

ACCESS PHARMACEUTICALS, INC.

By: /s/ Kerry P. Gray
   ------------------
Name: Kerry P. Gray
Title: President and Chief Executive Officer


THIS SECURED DEBENTURE, AND THE SECURITIES INTO
WHICH IT IS CONVERTIBLE (COLLECTIVELY, THE
"SECURITIES"), HAVE NOT BEEN REGISTERED WITH THE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE.  THE
SECURITIES ARE BEING OFFERED PURSUANT TO A SAFE
HARBOR FROM REGISTRATION UNDER REGULATION D
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT").  THE SECURITIES ARE "RESTRICTED"
AND MAY NOT BE OFFERED OR SOLD UNLESS THE SECURITIES
ARE REGISTERED UNDER THE ACT, PURSUANT TO
REGULATION D OR PURSUANT TO AVAILABLE EXEMPTIONS
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND
THE COMPANY WILL BE PROVIDED WITH OPINION OF
COUNSEL OR OTHER SUCH INFORMATION AS IT MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH EXEMPTIONS
ARE AVAILABLE.  FURTHER HEDGING TRANSACTIONS
INVOLVING THE SECURITIES MAY NOT BE MADE EXCEPT IN
COMPLIANCE WITH THE ACT.

                            SECURED DEBENTURE
                       ACCESS PHARMACEUTICALS, INC.
                      7% Secured Convertible Debenture
                             March  30, 2006

               No.  CCP-001              US$1,316,500

This Secured Debenture (the "Debenture") is issued on March 30, 2005
(the "Closing Date") by Access Pharmaceuticals, Inc., a Delaware
corporation (the "Company"), to Cornell Capital Partners, LP (together
with its permitted successors and assigns, the "Holder") pursuant to
exemptions from registration under the Securities Act of 1933, as
amended.

ARTICLE I.
Section 1.01     Principal and Interest.  For value received, the Company
hereby promises to pay to the order of the Holder on the one year
anniversary of the date hereof ("Maturity Date"), in lawful money of the
United States of America and in immediately available funds the principal
sum of One Million Three Hundred Sixteen Thousand Five Hundred
Dollars ($1,316,500), together with interest on the unpaid principal of this
Debenture at the rate of seven percent (7%) per year (compounded
monthly) from the date of this Debenture until paid in full.  The entire
principal amount and all accrued interest shall paid to the Holder on the
Maturity Date.  In no event shall the Holder be entitled to convert this
Debenture for a number of shares of Common Stock in excess of that
number of shares of Common Stock which, upon giving effect to such
conversion, would cause the aggregate number of shares of Common
Stock beneficially owned by the Holder and its affiliates to exceed 4.99%
of the outstanding shares of the Common Stock following such conversion
(unless the Holder provides the Company sixty five (65) days prior written
notice that this provision shall not apply).  For so long as the Common
Stock is listed on the American Stock Exchange or the Nasdaq, the total
number of shares issuable under this Debenture to the Holder, Highgate
House Funds, Ltd. or their affiliates, and transferees, subsequent
transferees, or any other party pursuant to the Securities Purchase
Agreement of even date herewith among the Company, Cornell Capital
Partners, L.P., and Highgate House Funds, Ltd. (the "Securities Purchase
Agreement"), and the Pledge and Escrow Agreement of even date
herewith among the Company, Cornell Capital Partners, L.P., and
Highgate House Funds, Ltd. (the "Pledge Agreement") shall not exceed
Two Million Eight Hundred Ninety One Thousand Seven Hundred Twenty
Three (2,891,723) shares in the aggregate (representing approximately
19.9% of the  outstanding capital of the Company as of the date hereof),
absent the approval of the Company's shareholders.

Section 1.02     Monthly Repayment Schedule.  The Company shall make
six (6) scheduled payments ("Scheduled Payments") of principal, plus
accrued interest and a Redemption Premium ("Redemption Premium")
equal to 10% of the principal amount of each Scheduled Payment.  The
first Scheduled Payment shall be due and payable on November 1, 2005,
and shall continue on the first business day of each succeeding calendar
month thereafter.  The principal amount of each Scheduled Payment shall
be determined by dividing the outstanding principal amount of this
Debenture as of the date such Scheduled Payment is due by the number of
Scheduled Payments remaining.   For example, if on November 1, 2005,
the outstanding principal amount is $1,316,500, then the Scheduled
Payment due on November 1, 2005, would consist of $219,416.67 of
principal, plus a Redemption Premium of $21,942 and accrued interest on
$1,316,500 at a rate of 7% per year from the date hereof up to and
including October 31, 2005.

Section 1.03     Optional Conversion.  The Holder is entitled, at its option,
to convert, and sell on the same day, at any time and from time to time,
until payment in full of this Debenture, all or any part of the principal
amount of the Debenture, plus accrued interest, into shares (the
"Conversion Shares") of the Company's common stock, par value $0.01
per share ("Common Stock"), at the price per share (the "Conversion
Price") equal to $4.00 (the "Conversion Price").  No fraction of shares or
scrip representing fractions of shares will be issued on conversion, but the
number of shares issuable shall be rounded to the nearest whole share.  To
convert this Debenture, the Holder hereof shall deliver written notice
thereof, substantially in the form of Exhibit A to this Debenture, with
appropriate insertions (the "Conversion Notice"), to the Company at its
address as set forth herein.  The date upon which the conversion shall be
effective (the "Conversion Date") shall be deemed to be the date set forth
in the Conversion Notice.  The Holder has the right to convert this
Debenture after the Maturity Date.

Section 1.04     Reservation of Common Stock.  The Company shall reserve
and keep available out of its authorized but unissued shares of Common
Stock, solely for the purpose of effecting the conversion of this
Debenture, such number of shares of Common Stock as shall from time to
time be sufficient to effect such conversion, based upon the Conversion
Price.  If at any time the Company does not have a sufficient number of
Conversion Shares authorized and available, then the Company shall call
and hold a special meeting of its stockholders within thirty (30) days of
that time for the sole purpose of increasing the number of authorized
shares of Common Stock.

Section 1.05     Right of Redemption.  The Company at its option shall have
the right, with three (3) business days advance written notice, to redeem a
portion or all amounts outstanding under this Debenture prior to the
Maturity Date or any Scheduled Payment due date.  The Redemption
Premium shall apply to any such early redemptions.  The Company shall
pay a twenty percent (20%) premium (in lieu of the Redemption
Premium), on any Scheduled Payment not made within five (5) business
days of the date it is due.

Section 1.06     Registration Rights.  The Company is obligated to register
the resale of the Conversion Shares under the Securities Act of 1933, as
amended, pursuant to the terms of a Registration Rights Agreement,
among the Company, Cornell Capital Partners, LP and Highgate House
Funds, Ltd. of even date herewith (the "Investor Registration Rights
Agreement").

Section 1.07     Interest Payments.  The interest so payable shall be paid at
the time of a Scheduled Payment, maturity or conversion to the person in
whose name this Debenture is registered.  Interest shall be paid in
cash (via wire transfer or certified funds).  In the event of default, as
described in Article III Section 3.01 hereunder, the Holder may elect that
the interest be paid in cash (via wire transfer or certified funds) or in the
form of Common Stock.  If paid in the form of Common Stock, the
amount of stock to be issued will be calculated as follows: the value of the
stock shall be the Closing Bid Price on:  (i) the date the interest payment
is due; or (ii) if the interest payment is not made when due, the date the
interest payment is made.  A number of shares of Common Stock with a
value equal to the amount of interest due shall be issued.  No fractional
shares will be issued; therefore, in the event that the value of the Common
Stock per share does not equal the total interest due, the Company will
pay the balance in cash.

Section 1.08     Paying Agent and Registrar.  Initially, the Company will act
as paying agent and registrar.  The Company may change any paying
agent, registrar, or Company-registrar by giving the Holder not less than
ten (10) business days' written notice of its election to do so, specifying
the name, address, telephone number and facsimile number of the paying
agent or registrar.  The Company may act in any such capacity.

Section 1.09     Secured Nature of Debenture.  This Debenture is secured
by all of the assets and property of the Company as set forth on Exhibit A
to the Security Agreement dated the date hereof among the Company,
Cornell Capital Partners, LP, and Highgate House Funds, Ltd. (the
"Security Agreement") and the Pledged Shares as set forth in the Pledge
Agreement

ARTICLE II.
Section 2.01     Amendments and Waiver of Default.  The Debenture may
not be amended.  Notwithstanding the above, without the consent of the
Holder, the Debenture may be amended to cure any ambiguity, defect or
inconsistency, or to provide for assumption of the Company obligations to
the Holder.

ARTICLE III.
Section 3.01     Events of Default.  An Event of Default is defined as
follows: (a) failure by the Company to pay amounts due hereunder on the
Maturity Date; (b) failure by the Company to pay amounts due pursuant to
a Scheduled Payment within ten (10) days of the date such payment is due
(c) failure by the Company or the Company's transfer agent to deliver
Common Stock certificates to the Holder prior to the fifth (5th ) trading
day after a Conversion Date; (d) failure by the Company for ten (10) days
after notice to it to comply with any of its other agreements in the
Debenture; (d) events of bankruptcy or insolvency; (e) a breach by the
Company under the Investor Registration Rights Agreement, the Security
Agreement, the Pledge Agreement, or any of the  other Transaction
Documents (as defined in the Securities Purchase Agreement of even date
herewith among the Company, Cornell Capital Partners, LP, and Highgate
House Funds, Ltd. (the "Securities Purchase Agreement")) which is not
cured by the Company within any allocated cure period therein.  Upon the
occurrence of an Event of Default, the Holder may, in its sole discretion,
accelerate full repayment of all debentures outstanding and accrued interest
thereon or may, notwithstanding any limitations contained in this
Debenture and/or the Securities Purchase Agreement, convert all
debentures outstanding and accrued interest thereon into shares of
Common Stock pursuant to Section 1.03 herein.  Upon and Event of
Default, the Holder, in addition to any other remedies, shall have the right
(but not the obligation) to convert this Debenture at any time after an
Event of Default.

Section 3.02     Failure to Issue Unrestricted Common Stock. As indicated
in Article III Section 3.01, a breach by the Company of its obligations
under the Investor Registration Rights Agreement shall be deemed an
Event of Default, which if not cured within ten (10) days, shall entitle the
Holder to accelerate full repayment of all Debentures outstanding and
accrued interest thereon or, notwithstanding any limitations contained in
this Debenture and/or the Securities Purchase Agreement, to convert all
debentures outstanding and accrued interest thereon into shares of
Common Stock pursuant to Section 1.03 herein.  The Company
acknowledges that failure to honor a Notice of Conversion shall cause
irreparable harm to the Holder.

ARTICLE IV.
Section 4.01     Rights and Terms of Conversion.  This Debenture, in whole
or in part, may be converted at any time following the Closing Date, into
shares of Common Stock at a price equal to the Conversion Price as
described in Section 1.03 above.

Section 4.02     Re-issuance of Debenture.  When the Holder elects to
convert a part of the Debenture, then the Company shall reissue a new
Debenture in the same form as this Debenture to reflect the new principal
amount.

ARTICLE V.
Section 5.01     Anti-dilution. If the Company, at any time while this
Debenture is outstanding, (a) shall pay a stock dividend or otherwise make
a distribution or distributions on shares of its Common Stock payable in
shares of its capital stock (whether payable in shares of its Common Stock
or of capital stock of any class), (b) subdivide outstanding shares of
Common Stock into a larger number of shares, (c) combine outstanding
shares of Common Stock into a smaller number of shares, or (d) issue by
reclassification any shares of capital stock of the Company, the
Conversion Price as applied in Section 1.03 shall be multiplied by a
fraction, the numerator of which shall be the number of shares of
Common Stock of the Company outstanding immediately before such
event and the denominator of which shall be the number of shares of
Common Stock outstanding immediately after giving effect to such event.
Any adjustment made pursuant to this Section 5.01 shall become effective
immediately after the record date for the determination of stockholders
entitled to receive such dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision,
combination or reclassification, provided that no adjustment shall be made
if the Company does not complete such dividend, distribution, subdivision,
combination or reclassification.

(1)      If the Company shall declare or make any dividend or other
distribution of its assets (or rights to acquire its assets) to holders of
Common Stock, by way of return of capital or otherwise (including,
without limitation, any distribution of cash, stock or other securities,
property or options by way of a dividend, spin off, reclassification,
corporate rearrangement or other similar transaction) (a "Distribution"), at
any time after the issuance of this Debenture, then, in each such case:

(i)      any Conversion Price in effect immediately prior to the close of
business on the record date fixed for the determination of holders of
Common Stock entitled to receive the Distribution shall be reduced,
effective as of the close of business on such record date, to a price
determined by multiplying such Conversion Price by a fraction of which
(A) the numerator shall be the closing bid price of the Common Stock on
the trading day immediately preceding such record date minus the value of
the Distribution (as determined in good faith by the Company's Board of
Directors) applicable to one share of Common Stock, and (B) the
denominator shall be the closing bid price of the Common Stock on the
trading day immediately preceding such record date; and

(ii)     either (A) the number of shares of Common Stock to be obtainable
upon exercise of this Debenture shall be increased to a number of shares
equal to the number of shares of Common Stock obtainable immediately
prior to the close of business on the record date fixed for the
determination of holders of Common Stock entitled to receive the
Distribution multiplied by the reciprocal of the fraction set forth in the
immediately preceding clause (i), or (B) in the event that the Distribution
is of common stock of a company whose common stock is traded on a
national securities exchange or a national automated quotation system, then
the holder of this Debenture shall receive an additional warrant, the terms
of which shall be identical to those of this Debenture, except that such
warrant shall be exercisable into the amount of the assets that would have
been payable to the holder of this Debenture pursuant to the Distribution
had the holder exercised this Debenture immediately prior to such record
date and with an exercise price equal to the amount by which the exercise
price of this Debenture was decreased with respect to the Distribution
pursuant to the terms of the immediately preceding clause (i). The newly
issued warrant shall have piggy-back right.

(2)      All calculations under this Section shall be made to the nearest
1/1000th of a cent or the nearest 1/1000th of a share, as the case may be.
Any calculation equal to or over .005 shall be rounded up to the next cent
or share and any calculation less than .005 shall be rounded down to the
previous cent or share.

(3)      Whenever the Conversion Price is adjusted pursuant to Section
5.01, the Company shall within one (1) Business Day after the
determination of the new Conversion Price mail and fax to the Holder, a
notice ("Company Notice of Conversion Price Adjustment") setting forth
the Conversion Price after such adjustment and setting forth a brief
statement of the factsrequiring such adjustment.

(4)      In case of any reclassification of the Common Stock, any
consolidation or merger of the Company with or into another person, the
sale or transfer of all or substantially all of the assets of the Company or
any compulsory share exchange pursuant to which the Common Stock is
converted into other securities, cash or property, then each holder of
Debentures then outstanding shall have the right thereafter to convert such
Debentures only into the shares of stock and other securities and property
receivable upon or deemed to be held by holders of Common Stock
following such reclassification, consolidation, merger, sale, transfer or
share exchange (except in the event the property is cash, then the Holder
shall have the right to convert the Debenture and receive cash in the same
manner as other stockholders), and the Holder shall be entitled upon such
event to receive such amount of securities or property as the holder of
shares of the Common Stock into which such Debenture could have been
converted immediately prior to such reclassification, consolidation,
merger, sale, transfer or share exchange would have been entitled.  The
terms of any such consolidation, merger, sale, transfer or share exchange
shall include such terms so as to continue to give to the Holder the right
to receive the securities or property set forth in this Section upon any
conversion following such consolidation, merger, sale, transfer or share
exchange.  This provision shall similarly apply to successive
reclassifications, consolidations, mergers, sales, transfers or share
exchanges;

(5)If:
(a)      the Company shall declare a dividend (or any other distribution) on
its Common Stock; or

(b)      the Company shall declare a special non-recurring cash dividend
redemption of its Common Stock; or

(c)      the Company shall authorize the grant to all holders of the
Common Stock rights or warrants to subscribe for or purchase any shares
of capital stock of any class or of any rights; or

(d)      the approval of any stockholders of the Company shall be required
in connection with any reclassification of the Common Stock of the
Company (other than a subdivision or combination of the outstanding
shares of Common Stock), any consolidation or merger to which the
Company is a party, any sale or transfer of all or substantially all of the
assets of the Company, or any compulsory share exchange whereby the
Common Stock is converted into other securities, cash or property; or

(e)      the Company shall authorize the voluntary or involuntary
dissolution, liquidation or winding-up of the affairs of the Company;

then the Company shall cause to be filed at each office or agency
maintained for the purpose of conversion of Debentures, and shall cause to
be mailed and faxed to the Holder and each other holder of the Debentures
at their last addresses and facsimile number set forth in the Debenture
Register at least twenty (20) calendar days prior to the applicable record
or effective date hereinafter specified, a notice stating (x) the date on
which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be
taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distributions, redemption, rights or warrants are
to be determined, or (y) the date on which such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution,
liquidation or winding-up is expected to become effective, and the date as
of which it is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger,
sale, transfer, share exchange, dissolution, liquidation or winding-up;
provided, however, that the failure to mail such notice or any defect
therein or in the mailing thereof shall not affect the validity of the
corporate action required to be specified in such notice.

Section 5.02     If at any time conditions shall arise by reason of action or
failure to act by the Company, which action or failure to act, in the
opinion of the Board of Directors of the Company, is not adequately
covered by the other provisions hereof and which might materially and
adversely affect the rights of the Holder (different or distinguishable from
the effect generally on rights of holders of any class of the Company's
capital stock), the Company shall, at least twenty (20) calendar days prior
to the effective date of such action, mail and fax a written notice to each
holder of Debenture briefly describing the action contemplated, and an
appraiser selected by the holders of majority in principal amount of the
outstanding Debentures shall give its opinion as to the adjustment, if any
(not inconsistent with the standards established in this Section 5.01), of the
Conversion Price (including, if necessary, any adjustment as to the
securities into which Debentures may thereafter be convertible) and any
distribution which is or would be required to preserve without diluting the
rights of the holders of Debentures; provided, however, that the
Company, after receipt of the determination by such appraiser, shall have
the right to select an additional appraiser, in which case the adjustment
shall be equal to the average of the adjustments recommended by each
such appraiser.  The Company shall pay all fees and expenses of any
appraiser selected under this Section 5.02.  The Board of Directors of the
Company shall make the adjustment recommended forthwith upon the
receipt of such opinion or opinions or the taking of any such action
contemplated, as the case may be; provided, however, that no such
adjustment of the Conversion Price shall be made which, in the opinion of
the appraiser(s) giving the aforesaid opinion or opinions, would result in
an increase of the Conversion Price above the Conversion Price then in
effect.

Section 5.03     Consent  of Holder to Sell Capital Stock or Grant Security
Interests.  Except for shares of Common Stock issued to the Holder or its
affiliates under conversion of this Debenture or otherwise, so long as any
of the principal of or interest on this Debenture remains unpaid and
unconverted, the Company shall not, without the prior written consent of
the Holder, (a) issue or sell shares of Common Stock or Preferred Stock
without consideration or for a consideration per share less than the bid
price of the Common Stock determined immediately prior to its issuance,
(except upon exercise or conversion of any security that, pursuant to its
terms, is exercisable or convertible into the Company's Common Stock
and was issued or outstanding prior to the date hereof) (b) issue any
warrant, option, right, contract, call, or other security instrument granting
the holder thereof, the right to acquire Common Stock without
consideration or for a consideration less than such Common Stock's bid
price determined immediately prior to its issuance, (c) enter into any
security instrument granting the holder a security interest in any and all
assets of the Company that is senior to the security interest of the
Buyer(s), or (d) file any registration statement on Form S-8 except to
register up to 1,300,000 shares of the Common Stock to be issued under a
stock incentive plan.

Section 5.04     Not withstanding Section 5.03 above, the Company may,
without obtaining the prior written consent of the Buyer(s), issue or sell
shares of Common Stock or Preferred Stock for a consideration per share
of up to 20% below the closing bid price of the Common Stock
determined immediately prior to its issuance, provided that 50% of the net
proceeds of any such issuance are used to redeem the outstanding this
Debenture.

ARTICLE VI.
Section 6.01     Notice.  Notices regarding this Debenture shall be sent to
the parties at the following addresses, unless a party notifies the other
parties, in writing, of a change of address:

If to the Company, to:
Access Pharmaceuticals, Inc.
2600 Stemmons Freeway, Suite 176
Dallas, TX 75207
Attention: Kerry P. Gray
Telephone: (214) 905-5100
Facsimile: (214) 905-5101

With a copy to:
Bingham McCutchen LLP
150 Federal Street
Boston, MA 02110-1726
Attention: John J. Concannon, Esq.
Telephone: (617) 951-8874
Facsimile: (617) 951-8736

If to the Holder:
Cornell Capital Partners, LP
101 Hudson Street, Suite 3700
Jersey City, NJ  07303
Telephone: (201) 985-8300
Facsimile: (201) 985-8266

With a copy to:
Troy Rillo, Esq.
101 Hudson Street, Suite 3700
Jersey City, NJ 07302
Telephone: (201) 985-8300
Facsimile: (201) 985-8266

Section 6.02     Governing Law.  This Debenture shall be deemed to be
made under and shall be construed in accordance with the laws of the
State of New Jersey without giving effect to the principals of conflict of
laws thereof.  Each of the parties consents to the jurisdiction of the
U.S. District Court sitting in the District of the State of New Jersey or the
state courts of the State of New Jersey sitting in Hudson County, New
Jersey in connection with any dispute arising under this Debenture and
hereby waives, to the maximum extent permitted by law, any objection,
including any objection based on forum non conveniens to the bringing of
any such proceeding in such jurisdictions.

Section 6.03     Severability.  The invalidity of any of the provisions of this
Debenture shall not invalidate or otherwise affect any of the other
provisions of this Debenture, which shall remain in full force and effect.

Section 6.04     Entire Agreement and Amendments.  This Debenture
represents the entire agreement between the parties hereto with respect to
the subject matter hereof and there are no representations, warranties or
commitments, except as set forth herein.  This Debenture may be
amended only by an instrument in writing executed by the parties hereto.

Section 6.05     Attorney Fees. If the Company fails to strictly comply
with the terms of this Debenture, then the Company shall reimburse the
Holder promptly for all fees, costs and expenses, including, without
limitation, attorney's fees and expenses incurred by the Holder in any
action in connection with this Debenture, including, without limitation,
those incurred: (i) during any workout, attempted workout, and/or in
connection with the rendering of legal advice as to the Holder's rights,
remedies and obligations, (ii) collecting any sums which become due to
the Holder, (iii) defending or prosecuting any proceeding or any
counterclaim to any proceeding or appeal; or (iv) the protection,
preservation or enforcement of any rights or remedies of the Holder.

Section 6.06     Counterparts.  This Debenture may be executed in multiple
counterparts, each of which shall be an original, but all of which shall be
deemed to constitute on instrument.

WITNESS WHEREOF, with the intent to be legally bound hereby, the
Company as executed this Debenture as of the date first written above.

ACCESS PHARMACEUTICALS, INC.

By:/s/ Kerry P. Gray
   -----------------
Name: Kerry P. Gray
Title: President and Chief Executive Officer

EX-10.30

Exhibit 10.30

              INVESTOR REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated
as of March 30, 2005, by and among ACCESS PHARMACEUTICALS,
INC., a Delaware corporation (the "Company"), and the undersigned
investors listed on Schedule I attached hereto (each, an "Investor" and
collectively, the "Investors").

WHEREAS:

A. In connection with the Securities Purchase Agreement by and among the
parties hereto of even date herewith (the "Securities Purchase Agreement"),
the Company has agreed, upon the terms and subject to the conditions of the
Securities Purchase Agreement, to issue and sell to the Investors secured
convertible debentures (the "Convertible Debentures") which shall be
convertible into that number of shares of the Company's common stock, par
value $0.01 per share (the "Common Stock"), pursuant to the terms of the
Securities Purchase  Agreement for an aggregate purchase price of up to Two
Million Six Hundred Thirty Three Thousand Dollars ($2,633,000).
Capitalized terms not defined herein shall have the meaning ascribed to them
in the Securities Purchase Agreement.

B. To induce the Investors to execute and deliver the Securities Purchase
Agreement, the Company has agreed to provide certain registration rights
under the Securities Act of 1933, as amended, and the rules and regulations
there under, or any similar successor statute (collectively, the "Securities
Act"), and applicable state securities laws.

NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and
the Investors hereby agree as follows:

1. DEFINITIONS.

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

(a) "Person" means a corporation, a limited liability company, an association,
a partnership, an organization, a business, an individual, a governmental or
political subdivision thereof or a governmental agency.

(b) "Register," "registered," and "registration" refer to a registration
effected by preparing and filing one or more Registration Statements (as defined
below) in compliance with the Securities Act and pursuant to Rule 415 under
the Securities Act or any successor rule providing for offering securities on
a continuous or delayed basis ("Rule 415"), and the declaration or ordering
of effectiveness of such Registration Statement(s) by the United States
Securities and Exchange Commission (the "SEC").

(c) "Registrable Securities" means the shares of Common Stock issuable to
the Investors upon conversion of the Convertible Debentures pursuant to the
Securities Purchase Agreement and the Buyer's Shares, as this term is
defined in the Securities Purchase Agreement.  The Registrable Securities
shall cease to be Registrable Securities at the end of the time period set forth
in Section 2(a).

(d) "Registration Statement" means a registration statement under the
Securities Act which covers the Registrable Securities.

2. REGISTRATION.

(a) Subject to the terms and conditions of this Agreement, the Company shall
prepare and file, no later than sixty (60) days from the date hereof (the
"Scheduled Filing Deadline"), with the SEC a registration statement on Form
S-1 or SB-2 (or, if the Company is then eligible, on Form S-3) under the
Securities Act (the "Initial Registration Statement") for the resale by the
Investors of the Registrable Securities, which includes at least six hundred
fifty eight thousand two hundred fifty (658,250) shares of Common Stock to
be issued upon conversion of the Convertible Debentures.  The Company
shall cause the Registration Statement to remain effective until the earlier of
(i) all of the Registrable Securities have been sold, or (ii) all Registrable
Securities are eligible for sale pursuant to Rule 144(k).  Prior to the filing
of the Registration Statement with the SEC, the Company shall furnish a copy
of the Initial Registration Statement to the Investors for their review and
comment.  The Investors shall furnish comments on the Initial Registration
Statement to the Company within twenty-four (24) hours of the receipt
thereof from the Company.

(b) Effectiveness of the Initial Registration Statement.  The Company shall
use its best efforts (i) to have the Initial Registration Statement declared
effective by the SEC no later than one hundred twenty (120) days after the
date filed (the "Scheduled Effective Deadline") and (ii) to insure that the
Initial Registration Statement and any subsequent Registration Statement
remains in effect for the time period set forth in Section 2(a), subject to the
terms and conditions of this Agreement.  It shall be an event of default
hereunder if the Initial Registration Statement is not declared effective by the
SEC within one hundred fifty (150) days after filing thereof.

(c) Failure to File or Obtain Effectiveness of the Registration Statement.  In
the event the Registration Statement is not filed by the Scheduled Filing
Deadline or is not declared effective by the SEC on or before the Scheduled
Effective Date, or if after the Registration Statement has been declared
effective by the SEC, sales cannot be made pursuant to the Registration
Statement (whether because of a failure to keep the Registration Statement
effective, failure to disclose such information as is necessary for sales to be
made pursuant to the Registration Statement, failure to register sufficient
shares of Common Stock or otherwise then as partial relief for the damages
to any holder of Registrable Securities by reason of any such delay in or
reduction of its ability to sell the underlying shares of Common Stock (which
remedy shall not be exclusive of any other remedies at law or in equity),
subject to the obligations of the Investors pursuant to Section 4(b) hereof, the
Company will pay as liquidated damages (the "Liquidated Damages") to the
holder, at the holder's option, either a cash amount or shares of the
Company's Common Stock within three (3) business days, after demand
therefore, equal to two percent (1.5%) of the liquidated value of the
Convertible Debentures outstanding as Liquidated Damages for each thirty
(30) day period after the Scheduled Filing Deadline or the Scheduled
Effective Date as the case may be.

(d)          Liquidated Damages.  The Company and the Investor hereto
acknowledge and agree that the sums payable under subsection 2(c) above
shall constitute liquidated damages and not penalties and are in addition to all
other rights of the Investor, including the right to call a default.  The
parties further acknowledge that (i) the amount of loss or damages likely to be
incurred is incapable or is difficult to precisely estimate, (ii) the amounts
specified in such subsections bear a reasonable relationship to, and are not
plainly or grossly disproportionate to, the probable loss likely to be incurred
in connection with any failure by the Company to obtain or maintain the
effectiveness of a Registration Statement, (iii) one of the reasons for the
Company and the Investor reaching an agreement as to such amounts was the
uncertainty and cost of litigation regarding the question of actual damages,
and (iv) the Company and the Investor are sophisticated business parties and
have been represented by sophisticated and able legal counsel and negotiated
this Agreement at arm's length.

3. RELATED OBLIGATIONS.

(a) The Company shall keep the Registration Statement effective pursuant to
Rule 415 at all times until the date set forth in Section 2(a) (the
"Registration Period"), which Registration Statement (including any amendments
or supplements thereto and prospectuses contained therein) shall not contain any
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, in light of
the circumstances in which they were made, not misleading.

(b) The Company shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to a
Registration Statement and the prospectus used in connection with such
Registration Statement, which prospectus is to be filed pursuant to Rule 424
promulgated under the Securities Act, as may be necessary to keep such
Registration Statement effective at all times during the Registration Period,
and, during such period, comply with the provisions of the Securities Act
with respect to the disposition of all Registrable Securities of the Company
covered by such Registration Statement until such time as all of such
Registrable Securities shall have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof as set forth in
such Registration Statement.  In the case of amendments and supplements to
a Registration Statement which are required to be filed pursuant to this
Agreement (including pursuant to this Section 3(b)) by reason of the
Company's filing a report on Form 10-KSB, Form 10-QSB or Form 8-K or
any analogous report under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), the Company shall incorporate such report by
reference into the Registration Statement, if applicable, or, if required by
law, rule or regulation shall file such amendments or supplements with the
SEC on the same day on which the Exchange Act report is filed which
created the requirement for the Company to amend or supplement the
Registration Statement.

(c) The Company shall furnish to each Investor whose Registrable Securities
are included in any Registration Statement, without charge, (i) at least one
(1) copy of such Registration Statement as declared effective by the SEC and
any amendment(s) thereto, including financial statements and schedules, all
documents incorporated therein by reference, all exhibits and each
preliminary prospectus, (ii) ten (10) copies of the final prospectus included
in such Registration Statement and all amendments and supplements thereto
(or such other number of copies as such Investor may reasonably request)
and (iii) such other documents as such Investor may reasonably request from
time to time in order to facilitate the disposition of the Registrable
Securities owned by such Investor.

(d) The Company shall use its best efforts to (i) register and qualify the
Registrable Securities covered by a Registration Statement under such other
securities or "blue sky" laws of such jurisdictions in the United States as any
Investor reasonably requests, (ii) prepare and file in those jurisdictions, such
amendments (including post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain the
effectiveness thereof during the Registration Period, (iii) take such other
actions as may be necessary to maintain such registrations and qualifications
in effect at all times during the Registration Period, and (iv) take all other
actions reasonably necessary or advisable to qualify the Registrable Securities
for sale in such jurisdictions; provided, however, that the Company shall not
be required in connection therewith or as a condition thereto to (w) make any
change to its articles of incorporation or by-laws, (x) qualify to do business
in any jurisdiction where it would not otherwise be required to qualify but for
this Section 3(d), (y) subject itself to general taxation in any such
jurisdiction, or (z) file a general consent to service of process in any such
jurisdiction.  The Company shall promptly notify each Investor who holds
Registrable Securities of the receipt by the Company of any notification with
respect to the suspension of the registration or qualification of any of the
Registrable Securities for sale under the securities or "blue sky" laws of any
jurisdiction in the United States or its receipt of actual notice of the
initiation or threat of any proceeding for such purpose.

(e) As promptly as practicable after becoming aware of such event or
development, the Company shall notify each Investor in writing of the
happening of any event as a result of which the prospectus included in a
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omission to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading (provided that in no event shall
such notice contain any material, nonpublic information), and promptly
prepare a supplement or amendment to such Registration Statement to correct
such untrue statement or omission, and deliver ten (10) copies of such
supplement or amendment to each Investor.  Notwithstanding any provision
of this Agreement to the contrary, if the Company makes such a notification,
the Company may suspend the use of any prospectus contained in any
Registration Statement for periods not to exceed forty five (45) business days
in any three month period or two periods not to exceed an aggregate of
ninety  (90) business days in any 12 month period in the event that the
Company determines, after consultation with outside legal counsel, in the
exercise of its reasonable discretion, that sales of Registrable Securities
thereunder could constitute violations of the Securities Act due to the
Registration Statement containing an untrue statement of a material fact or
omission to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading .  In each case the Company shall use
commercially reasonable efforts to remedy the deficiency in the Registration
Statement within thirty (30) business days.  The Company shall also promptly
notify each Investor in writing (i) when a prospectus or any prospectus
supplement or post-effective amendment has been filed, and when a
Registration Statement or any post-effective amendment has become effective
(notification of such effectiveness shall be delivered to each Investor by
facsimile on the same day of such effectiveness), (ii) of any request by the
SEC for amendments or supplements to a Registration Statement or related
prospectus or related information, and (iii) of the Company's reasonable
determination that a post-effective amendment to a Registration Statement
would be appropriate.
(f) The Company shall use commercially reasonable efforts to prevent the
issuance of any stop order or other suspension of effectiveness of a
Registration Statement, or the suspension of the qualification of any of the
Registrable Securities for sale in any jurisdiction within the United States of
America and, if such an order or suspension is issued, to obtain the
withdrawal of such order or suspension at the earliest possible moment and
to notify each Investor who holds Registrable Securities being sold of the
issuance of such order and the resolution thereof or its receipt of actual
notice of the initiation or threat of any proceeding for such purpose.

(g) At the reasonable request of any Investor, the Company shall furnish to
such Investor, on the date of the effectiveness of the Registration Statement
and thereafter from time to time on such dates as an Investor may reasonably
request in connection with any underwritten offering (i) a letter, dated such
date, from the Company's independent certified public accountants in form
and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering, and (ii) an
opinion, dated as of such date, of counsel representing the Company for
purposes of such Registration Statement, in form, scope and substance as is
customarily given in an underwritten public offering, addressed to the
Investors provided, however, that no "10b-5 opinion" shall be included in
any such opinion.

(h) The Company shall make available for inspection by (i) any Investor and
(ii) one (1) firm of accountants or other agents retained by the Investors
(collectively, the "Inspectors") all pertinent financial and other records, and
pertinent corporate documents and properties of the Company (collectively,
the "Records"), as shall be reasonably deemed necessary by each Inspector,
and cause the Company's officers, directors and employees to supply all
information which any Inspector may reasonably request; provided, however,
that each Inspector shall agree, and each Investor hereby agrees, to hold in
strict confidence and shall not make any disclosure (except to an Investor) or
use  any Record or other information which the Company determines in good
faith to be confidential, and of which determination the Inspectors are so
notified, unless (a) the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in any Registration Statement or is
otherwise required under the Securities Act, (b) the release of such Records
is ordered pursuant to a final, non-appealable subpoena or order from a court
or government body of competent jurisdiction, or (c) the information in such
Records has been made generally available to the public other than by
disclosure in violation of this or any other agreement of which the Inspector
and the Investor has knowledge.  Each Investor agrees that it shall, upon
learning that disclosure of such Records is sought in or by a court or
governmental body of competent jurisdiction or through other means, give
prompt notice to the Company and allow the Company, at its expense, to
undertake appropriate action to prevent disclosure of, or to obtain a
protective order for, the Records deemed confidential.

(i) The Company shall hold in confidence and not make any disclosure of
information concerning an Investor provided to the Company unless (i)
disclosure of such information is necessary to comply with federal or state
securities laws, (ii) the disclosure of such information is necessary to avoid
or correct a misstatement or omission in any Registration Statement, (iii) the
release of such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to the
public other than by disclosure in violation of this Agreement or any other
agreement.  The Company agrees that it shall, upon learning that disclosure
of such information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means, give
prompt written notice to such Investor and allow such Investor, at the
Investor's expense, to undertake appropriate action to prevent disclosure of,
or to obtain a protective order for, such information.

(j) The Company shall use its best efforts either to cause all the Registrable
Securities covered by a Registration Statement (i) to be listed on each
securities exchange on which securities of the same class or series issued by
the Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange or (ii) the
inclusion for quotation on the National Association of Securities Dealers, Inc.
OTC Bulletin Board for such Registrable Securities.  The Company shall pay
all fees and expenses in connection with satisfying its obligation under this
Section 3(j).

(k) The Company shall cooperate with the Investors who hold Registrable
Securities being offered and, to the extent applicable, to facilitate the timely
preparation and delivery of certificates (not bearing any restrictive legend)
representing the Registrable Securities to be offered pursuant to a
Registration Statement and enable such certificates to be in such
denominations or amounts, as the case may be, as the Investors may
reasonably request and registered in such names as the Investors may request.

(l) The Company shall use its best efforts to cause the Registrable Securities
covered by the applicable Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be
necessary to consummate the disposition of such Registrable Securities.

(m) The Company shall make generally available to its security holders as
soon as practical, but not later than ninety (90) days after the close of the
period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 under the Securities Act) covering a twelve (12)
month period beginning not later than the first day of the Company's fiscal
quarter next following the effective date of the Registration Statement.

(n) The Company shall otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC in connection with any
registration hereunder.

(o) Within two (2) business days after a Registration Statement which
covers Registrable Securities is declared effective by the SEC, the Company
shall deliver, and shall cause legal counsel for the Company to deliver, to the
transfer agent for such Registrable Securities (with copies to the Investors
whose Registrable Securities are included in such Registration Statement)
confirmation that such Registration Statement has been declared effective by
the SEC in the form attached hereto as Exhibit A.

(p) The Company shall take all other reasonable actions necessary to expedite
and facilitate disposition by the Investors of Registrable Securities pursuant
to a Registration Statement.

4. OBLIGATIONS OF THE INVESTORS.

(a) Each Investor agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 3(f) or the
first sentence of 3(e), such Investor will immediately discontinue disposition
of Registrable Securities pursuant to any Registration Statement(s) covering
such Registrable Securities until such Investor's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(e) or receipt
of notice that no supplement or amendment is required.  Notwithstanding
anything to the contrary, the Company shall cause its transfer agent to deliver
unlegended certificates for shares of Common Stock to a transferee of an
Investor in accordance with the terms of the Securities Purchase Agreement
in connection with any sale of Registrable Securities with respect to which
an Investor has entered into a contract for sale prior to the Investor's receipt
of a notice from the Company of the happening of any event of the kind
described in Section 3(f) or the first sentence of 3(e) and for which the
Investor has not yet settled.

(b) Each Investor shall provide the Company with written information
concerning the Investor necessary for inclusion in the Registration Statement.

5. EXPENSES OF REGISTRATION.
All expenses incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without limitation, all
registration, listing and qualifications fees, printers, legal and accounting
fees shall be paid by the Company.

6. INDEMNIFICATION.
With respect to Registrable Securities which are included in a Registration
Statement under this Agreement:

(a) To the fullest extent permitted by law, the Company will, and hereby
does, indemnify, hold harmless and defend each Investor, the directors,
officers, partners, employees, agents, representatives of, and each Person,
if any, who controls any Investor within the meaning of the Securities Act
or the Exchange Act (each, an "Indemnified Person"), against any losses,
claims, damages, liabilities, judgments, fines, penalties, charges, costs,
reasonable attorneys' fees, amounts paid in settlement or expenses, joint or
several (collectively, "Claims") incurred in investigating, preparing or
defending any action, claim, suit, inquiry, proceeding, investigation or appeal
taken from the foregoing by or before any court or governmental,
administrative or other regulatory agency, body or the SEC, whether pending
or threatened, whether or not an indemnified party is or may be a party
thereto ("Indemnified Damages"), to which any of them may become subject
insofar as such Claims (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon: (i) any untrue
statement or alleged untrue statement of a material fact in a Registration
Statement or any post-effective amendment thereto or in any filing made in
connection with the qualification of the offering under the securities or other
"blue sky" laws of any jurisdiction in which Registrable Securities are
offered ("Blue Sky Filing"), or the omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; (ii) any untrue statement or alleged untrue statement
of a material fact contained in any final prospectus (as amended or
supplemented, if the Company files any amendment thereof or supplement
thereto with the SEC) or the omission or alleged omission to state therein any
material fact necessary to make the statements made therein, in light of the
circumstances under which the statements therein were made, not misleading;
or (iii) any violation or alleged violation by the Company of the Securities
Act, the Exchange Act, any other law, including, without limitation, any
state securities law, or any rule or regulation there under relating to the
offer or sale of the Registrable Securities pursuant to a Registration
Statement (the matters in the foregoing clauses (i) through (iii) being,
collectively, "Violations").  The Company shall reimburse the Investors and
each such controlling person promptly as such expenses are incurred and are
due and payable, for any legal fees or disbursements or other reasonable
expenses incurred by them in connection with investigating or defending any
such Claim.  Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(a): (x) shall not apply
to a Claim by an Indemnified Person arising out of or based upon a Violation
which occurs in reliance upon and in conformity with information furnished
in writing to the Company by such Indemnified Person expressly for use in
connection with the preparation of the Registration Statement or any such
amendment thereof or supplement thereto; (y) shall not be available to the
extent such Claim is based on (i) a failure of the Investor to deliver or to
cause to be delivered the prospectus made available by the Company, if such
prospectus was timely made available by the Company pursuant to Section
3(c) or (ii) is based on the delivery of a defective prospectus after the
Investor has been given written notice that such prospectus is defective; and
(z) shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of the Company,
which consent shall not be unreasonably withheld. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of the Indemnified Person and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 9 hereof.

(b) In connection with a Registration Statement, each Investor agrees to
severally and not jointly indemnify, hold harmless and defend, to the same
extent and in the same manner as is set forth in Section 6(a), the Company,
each of its directors, each of its officers, employees, representatives, or
agents and each Person, if any, who controls the Company within the
meaning of the Securities Act or the Exchange Act (each an "Indemnified
Party"), against any Claim or Indemnified Damages to which any of them
may become subject, under the Securities Act, the Exchange Act or
otherwise, insofar as such Claim or Indemnified Damages arise out of or is
based upon any Violation, in each case to the extent, and only to the extent,
that such Violation is a result of any action described in Section 6(a)(x)-(z);
and, subject to Section 6(d), such Investor will reimburse any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such Claim; provided, however, that the indemnity agreement
contained in this Section 6(b) and the agreement with respect to contribution
contained in Section 7 shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent of such
Investor, which consent shall not be unreasonably withheld; provided,
further, however, that the Investor shall be liable under this Section 6(b) for
only that amount of a Claim or Indemnified Damages as does not exceed the
net proceeds to such Investor as a result of the sale of Registrable Securities
pursuant to such Registration Statement.  Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of such
Indemnified Party and shall survive the transfer of the Registrable Securities
by the Investors pursuant to Section 9.  Notwithstanding anything to the
contrary contained herein, the indemnification agreement contained in this
Section 6(b) with respect to any prospectus shall not inure to the benefit of
any Indemnified Party if the untrue statement or omission of material fact
contained in the prospectus was corrected and such new prospectus was
delivered to each Investor prior to such Investor's use of the prospectus to
which the Claim relates.

(c) Promptly after receipt by an Indemnified Person or Indemnified Party
under this Section 6 of notice of the commencement of any action or
proceeding (including any governmental action or proceeding) involving a
Claim, such Indemnified Person or Indemnified Party shall, if a Claim in
respect thereof is to be made against any indemnifying party under this
Section 6, deliver to the indemnifying party a written notice of the
commencement thereof, and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume control of the
defense thereof with counsel mutually satisfactory to the indemnifying party
and the Indemnified Person or the Indemnified Party, as the case may be;
provided, however, that an Indemnified Person or Indemnified Party shall
have the right to retain its own counsel with the fees and expenses of not
more than one (1) counsel for such Indemnified Person or Indemnified Party
to be paid by the indemnifying party, if, in the reasonable opinion of counsel
retained by the indemnifying party, the representation by such counsel of the
Indemnified Person or Indemnified Party and the indemnifying party would
be inappropriate due to actual or potential differing  interests between such
Indemnified Person or Indemnified Party and any other party represented by
such counsel in such proceeding.  The Indemnified Party or Indemnified
Person shall cooperate fully with the indemnifying party in connection with
any negotiation or defense of any such action or claim by the indemnifying
party and shall furnish to the indemnifying party all information reasonably
available to the Indemnified Party or Indemnified Person which relates to
such action or claim.  The indemnifying party shall keep the Indemnified
Party or Indemnified Person fully apprised at all times as to the status of the
defense or any settlement negotiations with respect thereto.  No indemnifying
party shall be liable for any settlement of any action, claim or proceeding
effected without its prior written consent; provided, however, that the
indemnifying party shall not unreasonably withhold, delay or condition its
consent.  No indemnifying party shall, without the prior written consent of
the Indemnified Party or Indemnified Person, consent to entry of any
judgment or enter into any settlement or other compromise which does not
include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party or Indemnified Person of a release from
all liability in respect to such claim or litigation.  Following indemnification
as provided for hereunder, the indemnifying party shall be subrogated to all
rights of the Indemnified Party or Indemnified Person with respect to all third
parties, firms or corporations relating to the matter for which indemnification
has been made.  The failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any such action shall
not relieve such indemnifying party of any liability to the Indemnified Person
or Indemnified Party under this Section 6, except to the extent that the
indemnifying party is prejudiced in its ability to defend such action.

(d) The indemnification required by this Section 6 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as and when bills are received or Indemnified Damages are
incurred.

(e) The indemnity agreements contained herein shall be in addition to (i) any
cause of action or similar right of the Indemnified Party or Indemnified
Person against the indemnifying party or others, and (ii) any liabilities the
indemnifying party may be subject to pursuant to the law.

7. CONTRIBUTION.
To the extent any indemnification by an indemnifying party is prohibited or
limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be
liable under Section 6 to the fullest extent permitted by law; provided,
however, that:  (i) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any seller of Registrable Securities who
was not guilty of fraudulent misrepresentation; and (ii) contribution by any
seller of Registrable Securities shall be limited in amount to the net amount
of proceeds received by such seller from the sale of such Registrable
Securities.

8.REPORTS UNDER THE EXHANGE ACT.
With a view to making available to the Investors the benefits of Rule 144
promulgated under the Securities Act or any similar rule or regulation of the
SEC that may at any time permit the Investors to sell securities of the
Company to the public without registration ("Rule 144"),  while either the
Convertible Debentures or the Registrable Securities are outstanding the
Company agrees to:

(a) make and keep public information available, as those terms are
understood and defined in Rule 144;

(b) file with the SEC in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act so
long as the Company remains subject to such requirements (it being
understood that nothing herein shall limit the Company's obligations under
Section 4(c) of the Securities Purchase Agreement) and the filing of such
reports and other documents as are  required by the applicable provisions of
Rule 144; and

(c) furnish to each Investor so long as such Investor owns Registrable
Securities, promptly upon request, (i) a written statement by the Company
that it has complied with the reporting requirements of Rule 144, the
Securities Act and the Exchange Act, (ii) a copy of the most recent annual
or quarterly report of the Company and such other reports and documents so
filed by the Company, and (iii) such other information as may be reasonably
requested to permit the Investors to sell such securities pursuant to Rule 144
without registration.

9.AMENDMENT OF REGISTRATION RIGHTS.
Provisions of this Agreement may be amended and the observance thereof
may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and Investors who then hold at least two-thirds (2/3) of the Registrable
Securities.  Any amendment or waiver effected in accordance with this
Section 9 shall be binding upon each Investor and the Company.  No such
amendment shall be effective to the extent that it applies to fewer than all of
the holders of the Registrable Securities.  No consideration shall be offered
or paid to any Person to amend or consent to a waiver or modification of any
provision of any of this Agreement unless the same consideration also is
offered to all of the parties to this Agreement.

10.MISCELLANEOUS.
(a) A Person is deemed to be a holder of Registrable Securities whenever
such Person owns or is deemed to own of record such Registrable Securities.
If the Company receives conflicting instructions, notices or elections from
two (2) or more Persons with respect to the same Registrable Securities, the
Company shall act upon the basis of instructions, notice or election received
from the registered owner of such Registrable Securities.

(b) Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in writing
and will be deemed to have been delivered:  (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided confirmation
of transmission is mechanically or electronically generated and kept on file
by the sending party); or (iii) one (1) business day after deposit with a
nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same.  The addresses and facsimile
numbers for such communications shall be:

If to the Company, to:
Access Pharmaceuticals, Inc.
2600 Stemmons Freeway, Suite 176
Dallas, TX 75207

Attention:                Kerry P. Gray
Telephone:                (214) 905-5100
Facsimile:                (214) 905-5101

With Copy to:
Bingham McCutchen LLP
150 Federal Street
Boston, MA 02110-1726
Attention:                John J. Concannon, Esq.
Telephone:                (617) 951-8874
Facsimile:                (617) 951-8736

If to an Investor, to its address and facsimile number on the Schedule of
Investors attached hereto, with copies to such Investor's representatives as set
forth on the Schedule of Investors or to such other address and/or facsimile
number and/or to the attention of such other person as the recipient party has
specified by written notice given to each other party five (5) days prior to the
effectiveness of such change.  Written confirmation of receipt (A) given by
the recipient of such notice, consent, waiver or other communication, (B)
mechanically or electronically generated by the sender's facsimile machine
containing the time, date, recipient facsimile number and an image of the
first page of such transmission or (C) provided by a courier or overnight
courier service shall be rebuttable evidence of personal service, receipt by
facsimile or receipt from a nationally recognized overnight delivery service
in accordance with clause (i), (ii) or (iii) above, respectively.

(c) Failure of any party to exercise any right or remedy under this Agreement
or otherwise, or delay by a party in exercising such right or remedy, shall
not operate as a waiver thereof.

(d) The laws of the State of New Jersey shall govern all issues concerning the
relative rights of the Company and the Investors as its stockholders.  All
other questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by the internal laws of the
State of New Jersey, without giving effect to any choice of law or conflict
of law provision or rule (whether of the State of New Jersey or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of New Jersey.  Each party hereby irrevocably submits
to the non-exclusive jurisdiction of the Superior Courts of the State of New
Jersey, sitting in Hudson County, New Jersey and federal courts for the
District of New Jersey sitting Newark, New Jersey, for the adjudication of
any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is brought in an inconvenient forum or that the venue of such
suit, action or proceeding is improper.  Each party hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof to such party at the
address for such notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way any
right to serve process in any manner permitted by law.  If any provision of
this Agreement shall be invalid or unenforceable in any jurisdiction, such
invalidity or unenforceability shall not affect the validity or enforceability
of the remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY
HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT
OR ANY TRANSACTION CONTEMPLATED HEREBY.

(e) This Agreement, the Irrevocable Transfer Agent Instructions, the
Securities Purchase Agreement and related documents including the
Convertible Debenture and the Escrow Agreement dated the date hereof by
and among the Company, the Investors set forth on the Schedule of Investors
attached hereto, and David Gonzalez, Esq. (the "Escrow Agreement") and
the Security Agreement dated the date hereof (the "Security Agreement")
constitute the entire agreement among the parties hereto with respect to the
subject matter hereof and thereof.  There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
and therein.  This Agreement, the Irrevocable Transfer Agent Instructions,
the Securities Purchase Agreement and related documents including the
Convertible Debenture, the Escrow Agreement and the Security Agreement
supersede all prior agreements and understandings among the parties hereto
with respect to the subject matter hereof and thereof.

(f) This Agreement shall inure to the benefit of and be binding upon the
permitted successors and assigns of each of the parties hereto.

(g) The headings in this Agreement are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof.

(h) This Agreement may be executed in identical counterparts, each of which
shall be deemed an original but all of which shall constitute one and the same
agreement.  This Agreement, once executed by a party, may be delivered to
the other party hereto by facsimile transmission of a copy of this Agreement
bearing the signature of the party so delivering this Agreement.

(i) Each party shall do and perform, or cause to be done and performed, all
such further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as the other party may
reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions
contemplated hereby.

The language used in this Agreement will be deemed to be the language
chosen by the parties to express their mutual intent and no rules of strict
construction will be applied against any party.
(j) This Agreement is intended for the benefit of the parties hereto and their
respective permitted successors and assigns, and is not for the benefit of, nor
may any provision hereof be enforced by, any other Person.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


IN WITNESS WHEREOF, the parties have caused this Investor Registration
Rights Agreement to be duly executed as of day and year first above written.

COMPANY:
ACCESS PHARMACEUTICALS, INC.
By:/s/ Kerry P. Gray
   -----------------
Name:Kerry P. Gray
Title:President and Chief Executive Officer

EX-10.31

Exhibit 10.31

                           SECURITY AGREEMENT

THIS SECURITY AGREEMENT (the "Agreement"), is entered into and made
effective as of March 30, 2005, by and between ACCESS PHARMACEUTICALS, INC.,
a Delaware corporation (the "Company"), and the BUYER(S) listed on Schedule I
attached to the Securities Purchase Agreement dated the date hereof (the
"Secured Party").

WHEREAS, the Company shall issue and sell to the Secured Party, as
provided in the Securities Purchase Agreement dated the date hereof, and
the Secured Party shall purchase up to Two Million Six Hundred Thirty
Three Thousand Dollars ($2,633,000) of seven percent (7%) secured
convertible debentures (the "Convertible Debentures"), which shall be
convertible into shares of the Company's common stock, par value $0.01
(the "Common Stock") (as converted, the "Conversion Shares") in the
respective amounts set forth opposite each Buyer(s) name on Schedule I
attached to the Securities Purchase Agreement;

WHEREAS, to induce the Secured Party to enter into the transaction
contemplated by the Securities Purchase Agreement, the Convertible
Debentures, the Investor Registration Rights Agreement, the Pledge and
Escrow Agreement, and the Escrow Agreement (collectively referred to as
the "Transaction Documents"), the Company hereby grants to the Secured
Party a security interest in and to the pledged property identified on Exhibit
A hereto (collectively referred to as the "Pledged Property"), subject to a
security interest on certain specific equipment granted to Agilent Financial
Services, Inc., until the satisfaction of the Obligations, as defined herein
below.

NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, and for other good and valuable consideration,
the adequacy and receipt of which are hereby acknowledged, the parties
hereto hereby agree as follows:

ARTICLE 1.

DEFINITIONS AND INTERPRETATIONS

Section 1.1. Recitals.

The above recitals are true and correct and are incorporated herein, in their
entirety, by this reference.

Section 1.2. Interpretations.

Nothing herein expressed or implied is intended or shall be construed to
confer upon any person other than the Secured Party any right, remedy or
claim under or by reason hereof.

Section 1.3. Obligations Secured.

The obligations secured hereby are any and all obligations of the Company
now existing or hereinafter incurred to the Secured Party, arising from, on
or after the date hereof including, without limitation, those obligations of
the Company to the Secured Party under the Securities Purchase
Agreement, the Secured Convertible Debenture, the Investor Registration
Rights Agreement and Irrevocable Transfer Agent Instructions, and any
other amounts now or hereafter owed to the Secured Party by the Company
thereunder or hereunder (collectively, the "Obligations").

ARTICLE 2.

PLEDGED COLLATERAL, ADMINISTRATION OF COLLATERAL
AND TERMINATION OF SECURITY INTEREST

Section 2.1. Pledged Property.

(a) Company hereby pledges to the Secured Party, and creates in the
Secured Party for its benefit, a security interest for such time until the
Obligations are paid in full, in and to all of the property of the Company
as set forth in Exhibit "A" attached hereto (collectively, the "Pledged
Property"):

The Pledged Property, as set forth in Exhibit "A" attached hereto, and the
products thereof and the proceeds of all such items are hereinafter
collectively referred to as the "Pledged Collateral."

(b) Simultaneously with the execution and delivery of this Agreement, the
Company shall make, execute, acknowledge, file, record and deliver to the
Secured Party any documents reasonably requested by the Secured Party to
perfect its security interest in the Pledged Property. Simultaneously with the
execution and delivery of this Agreement, the Company shall make,
execute, acknowledge and deliver to the Secured Party such documents and
instruments, including, without limitation, financing statements, certificates,
affidavits and forms as may, in the Secured Party's reasonable judgment,
be necessary to effectuate, complete or perfect, or to continue and preserve,
the security interest of the Secured Party in the Pledged Property, and the
Secured Party shall hold such documents and instruments as secured party,
subject to the terms and conditions contained herein.

Section 2.2. Rights; Interests; Etc.

(a) So long as no Event of Default (as hereinafter defined) shall have
occurred and be continuing:

(i) the Company shall be entitled to exercise any and all rights pertaining
to the Pledged Property or any part thereof for any purpose not inconsistent
with the terms hereof; and

(ii) the Company shall be entitled to receive and retain any and all payments
paid or made in respect of the Pledged Property.

(b) Upon the occurrence and during the continuance of an Event of Default:

(i) All rights of the Company to exercise the rights which it would
otherwise be entitled to exercise pursuant to Section 2.2(a)(i) hereof and to
receive payments which it would otherwise be authorized to receive and
retain pursuant to Section 2.2(a)(ii) hereof shall be suspended, and all such
rights shall thereupon become vested in the Secured Party who shall
thereupon have the sole right to exercise such rights and to receive and hold
as Pledged Collateral such payments; provided, however, that if the Secured
Party shall become entitled and shall elect to exercise its right to realize on
the Pledged Collateral pursuant to Article 5 hereof, then all cash sums
received by the Secured Party, or held by Company for the benefit of the
Secured Party and paid over pursuant to Section 2.2(b)(ii) hereof, shall be
applied against any outstanding Obligations; and

(ii) All interest, dividends, income and other payments and distributions
which are received by the Company contrary to the provisions of
Section 2.2(b)(i) hereof shall be received in trust for the benefit of the
Secured Party, shall be segregated from other property of the Company and
shall be forthwith paid over to the Secured Party; or

(iii) The Secured Party in its sole discretion shall be authorized to sell any
or all of the Pledged Property at public or private sale in order to recoup
all of the outstanding principal plus accrued interest owed pursuant to the
Convertible Debenture as described herein

(c) Each of the following events shall constitute a default under this
Agreement (each an "Event of Default"):

(i) any default, whether in whole or in part, shall occur in the payment to
the Secured Party of principal, interest or other item comprising the
Obligations as and when due or with respect to any other debt or obligation
of the Company to a party other than the Secured Party;

(ii) any default, whether in whole or in part, shall occur in the due
observance or performance of any obligations or other covenants, terms or
provisions to be performed under this Agreement or the Transaction
Documents;

(iii) the Company shall:  (1) make a general assignment for the benefit of
its creditors; (2) apply for or consent to the appointment of a receiver,
trustee, assignee, custodian, sequestrator, liquidator or similar official for
itself or any of its assets and properties; (3) commence a voluntary case for
relief as a debtor under the United States Bankruptcy Code; (4) file with or
otherwise submit to any governmental authority any petition, answer or
other document seeking:  (A) reorganization, (B) an arrangement with
creditors or (C) to take advantage of any other present or future applicable
law respecting bankruptcy, reorganization, insolvency, readjustment of
debts, relief of debtors, dissolution or liquidation; (5) file or otherwise
submit any answer or other document admitting or failing to contest the
material allegations of a petition or other document filed or otherwise
submitted against it in any proceeding under any such applicable law, or
(6) be adjudicated a bankrupt or insolvent by a court of competent
jurisdiction; or

(iv) any case, proceeding or other action shall be commenced against the
Company for the purpose of effecting, or an order, judgment or decree
shall be entered by any court of competent jurisdiction approving (in whole
or in part) anything specified in Section 2.2(c)(iii) hereof, or any receiver,
trustee, assignee, custodian, sequestrator, liquidator or other official shall
be appointed with respect to the Company, or shall be appointed to take or
shall otherwise acquire possession or control of all or a substantial part of
the assets and properties of the Company, and any of the foregoing shall
continue unstayed and in effect for any period of thirty (30) days.

ARTICLE 3.

ATTORNEY-IN-FACT; PERFORMANCE

Section 3.1. Secured Party Appointed Attorney-In-Fact.

Upon the occurrence of an Event of Default, the Company hereby appoints
the Secured Party as its attorney-in-fact, with full authority in the place and
stead of the Company and in the name of the Company or otherwise, from
time to time in the Secured Party's discretion to take any action and to
execute any instrument which the Secured Party may reasonably deem
necessary to accomplish the purposes of this Agreement, including, without
limitation, to receive and collect all instruments made payable to the
Company representing any payments in respect of the Pledged Collateral or
any part thereof and to give full discharge for the same.  The Secured Party
may demand, collect, receipt for, settle, compromise, adjust, sue for,
foreclose, or realize on the Pledged Property as and when the Secured Party
may determine.  To facilitate collection, the Secured Party may notify
account debtors and obligors on any Pledged Property or Pledged Collateral
to make payments directly to the Secured Party.

Section 3.2. Secured Party May Perform.

If the Company fails to perform any agreement contained herein, the
Secured Party, at its option, may itself perform, or cause performance of,
such agreement, and the expenses of the Secured Party incurred in
connection therewith shall be included in the Obligations secured hereby
and payable by the Company under Section 8.3.

ARTICLE 4.

REPRESENTATIONS AND WARRANTIES

Section 4.1. Authorization; Enforceability.

Each of the parties hereto represents and warrants that it has taken all
action necessary to authorize the execution, delivery and performance of
this Agreement and the transactions contemplated hereby; and upon
execution and delivery, this Agreement shall constitute a valid and binding
obligation of the respective party, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting creditors'
rights or by the principles governing the availability of equitable remedies.

Section 4.2. Ownership of Pledged Property.

The Company warrants and represents that it is the legal and beneficial
owner of the Pledged Property free and clear of any lien, security interest,
option or other charge or encumbrance except for the security interest
created by this Agreement and a security interest on certain specific
equipment granted to Agilent Financial Services, Inc.

ARTICLE 5.

DEFAULT; REMEDIES; SUBSTITUTE COLLATERAL

Section 5.1. Default and Remedies.

(a) If an Event of Default described in Section 2.2(c)(i) and (ii) occurs, then
in each such case the Secured Party may declare the Obligations to be due
and payable immediately, by a notice in writing to the Company, and upon
any such declaration, the Obligations shall become immediately due and
payable.  If an Event of Default described in Sections 2.2(c)(iii) or
(iv) occurs and is continuing for the period set forth therein, then the
Obligations shall automatically become immediately due and payable
without declaration or other act on the part of the Secured Party.

(b) Upon the occurrence of an Event of Default, the Secured Party shall:
(i) be entitled to receive all distributions with respect to the Pledged
Collateral, (ii) to cause the Pledged Property to be transferred into the name
of the Secured Party or its nominee, (iii) to dispose of the Pledged
Property, and (iv) to realize upon any and all rights in the Pledged Property
then held by the Secured Party.

(c) Notwithstanding the provisions of this Section 5 or the Agreement, the
Secured Party agrees not to take any action under this Agreement prior to
exhausting its remedies for a default or an Event of Default under the
Pledge and Escrow Agreement; provided that if the Secured Party could not
sell or dispose of all the Pledged Shares within 90 days of an Event of
Default as determined by the Secured Party in its sole discretion, then the
Secured Party may proceed against any collateral without the need to
exhaust its remedies under the Pledge and Escrow Agreement.

Section 5.2. Method of Realizing Upon the Pledged Property: Other
Remedies.

Subject to the provisions of 5.1(c), upon the occurrence of an Event of
Default, in addition to any rights and remedies available at law or in equity,
the following provisions shall govern the Secured Party's right to realize
upon the Pledged Property:

(a) Any item of the Pledged Property may be sold for cash or other value
in any number of lots at brokers board, public auction or private sale and
may be sold without demand, advertisement or notice (except that the
Secured Party shall give the Company ten (10) days' prior written notice of
the time and place or of the time after which a private sale may be made
(the "Sale Notice")), which notice period is hereby agreed to be
commercially reasonable. At any sale or sales of the Pledged Property, the
Company may bid for and purchase the whole or any part of the Pledged
Property and, upon compliance with the terms of such sale, may hold,
exploit and dispose of the same without further accountability to the
Secured Party. The Company will execute and deliver, or cause to be
executed and delivered, such instruments, documents, assignments, waivers,
certificates, and affidavits and supply or cause to be supplied such further
information and take such further action as the Secured Party reasonably
shall require in connection with any such sale.

(b) Any cash being held by the Secured Party as Pledged Collateral and all
cash proceeds received by the Secured Party in respect of, sale of,
collection from, or other realization upon all or any part of the Pledged
Collateral shall be applied as follows:

(i) to the payment of all amounts due the Secured Party for the expenses
reimbursable to it hereunder or owed to it pursuant to Section 8.3 hereof;

(ii) to the payment of the Obligations then due and unpaid.

(iii) the balance, if any, to the person or persons entitled thereto, including,
without limitation, the Company.

(c) In addition to all of the rights and remedies which the Secured Party
may have pursuant to this Agreement, the Secured Party shall have all of
the rights and remedies provided by law, including, without limitation,
those under the Uniform Commercial Code.

(i) If the Company fails to pay such amounts due upon the occurrence of an
Event of Default which is continuing, then the Secured Party may institute
a judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the
same against the Company and collect the monies adjudged or decreed to
be payable in the manner provided by law out of the property of Company,
wherever situated.

(ii) The Company agrees that it shall be liable for any reasonable fees,
expenses and costs incurred by the Secured Party in connection with
enforcement, collection and preservation of the Transaction Documents,
including, without limitation, reasonable legal fees and expenses, and such
amounts shall be deemed included as Obligations secured hereby and
payable as set forth in Section 8.3 hereof.

Section 5.3. Proofs of Claim.

In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relating to the Company or the property of the Company
or of such other obligor or its creditors, the Secured Party (irrespective of
whether the Obligations shall then be due and payable as therein expressed
or by declaration or otherwise and irrespective of whether the Secured Party
shall have made any demand on the Company for the payment of the
Obligations), subject to the rights of Previous Security Holders, shall be
entitled and empowered, by intervention in such proceeding or otherwise:

(i) to file and prove a claim for the whole amount of the Obligations and to
file such other papers or documents as may be necessary or advisable in
order to have the claims of the Secured Party (including any claim for the
reasonable legal fees and expenses and other expenses paid or incurred by
the Secured Party permitted hereunder and of the Secured Party allowed in
such judicial proceeding), and

(ii) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same; and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by the
Secured Party to make such payments to the Secured Party and, in the event
that the Secured Party shall consent to the making of such payments
directed to the Secured Party, to pay to the Secured Party any amounts for
expenses due it hereunder.

Section 5.4. Duties Regarding Pledged Collateral.

The Secured Party shall have no duty as to the collection or protection of
the Pledged Property or any income thereon or as to the preservation of any
rights pertaining thereto, beyond the safe custody and reasonable care of
any of the Pledged Property actually in the Secured Party's possession.

ARTICLE 6.

AFFIRMATIVE COVENANTS

The Company covenants and agrees that, from the date hereof and until the
Obligations have been fully paid and satisfied, unless the Secured Party
shall consent otherwise in writing (as provided in Section 8.4 hereof):

Section 6.1. Existence, Properties, Etc.

(a) The Company shall do, or cause to be done, all things, or proceed with
due diligence with any actions or courses of action, that may be reasonably
necessary (i) to maintain Company's due organization, valid existence and
good standing under the laws of its state of incorporation, and (ii) to
preserve and keep in full force and effect all qualifications, licenses and
registrations in those jurisdictions in which the failure to do so could have
a Material Adverse Effect (as defined below); and (b) the Company shall
not do, or cause to be done, any act impairing the Company's corporate
power or authority (i) to carry on the Company's business as now
conducted, and (ii) to execute or deliver this Agreement or any other
document delivered in connection herewith, including, without limitation,
any UCC-1 Financing Statements required by the Secured Party to which
it is or will be a party, or perform any of its obligations hereunder or
thereunder.  For purpose of this Agreement, the term "Material Adverse
Effect" shall mean any material and adverse affect as determined by
Secured Party in its sole discretion, whether individually or in the
aggregate, upon (a) the Company's assets, business, operations, properties
or condition, financial or otherwise; (b) the Company's to make payment
as and when due of all or any part of the Obligations; or (c) the Pledged
Property.

Section 6.2. Financial Statements and Reports.

The Company shall furnish to the Secured Party within a reasonable time
such financial data as the Secured Party may reasonably request, including,
without limitation, the following financial data:

a) The balance sheet of the Company as of the close of each fiscal year, the
statement of earnings and retained earnings of the Company as of the close
of such fiscal year, and statement of cash flows for the Company for such
fiscal year, all in reasonable detail, prepared in accordance with generally
accepted accounting principles consistently applied, certified by the chief
executive and chief financial officers of the Company as being true and
correct and accompanied by a certificate of the chief executive and chief
financial officers of the Company, stating that the Company has kept,
observed, performed and fulfilled each covenant, term and condition of this
Agreement during such fiscal year and that no Event of Default hereunder
has occurred and is continuing, or if an Event of Default has occurred and
is continuing, specifying the nature of same, the period of existence of same
and the action the Company proposes to take in connection therewith;

b) A balance sheet of the Company as of the close of each month, and
statement of earnings and retained earnings of the Company as of the close
of such month, all in reasonable detail, and prepared substantially in
accordance with generally accepted accounting principles consistently
applied, certified by the chief executive and chief financial officers of the
Company as being true and correct; and

c) Copies of all accountants' reports and accompanying financial reports
submitted to the Company by independent accountants in connection with
each annual examination of the Company.

Section 6.3. Accounts and Reports.

The Company shall maintain a standard system of accounting in accordance
with generally accepted accounting principles consistently applied and
provide, at its sole expense, to the Secured Party the following:

(a) as soon as available, a copy of any notice or other communication
alleging any nonpayment or other material breach or default, or any
foreclosure or other action respecting any material portion of its assets and
properties, received respecting any of the indebtedness of the Company in
excess of $15,000 (other than the Obligations), or any demand or other
request for payment under any guaranty, assumption, purchase agreement
or similar agreement or arrangement respecting the indebtedness or
obligations of others in excess of $15,000, including any received from any
person acting on behalf of the Secured Party or beneficiary thereof; and

(b) within fifteen (15) days after the making of each submission or filing,
a copy of any report, financial statement, notice or other document,
whether periodic or otherwise, submitted to the shareholders of the
Company, or submitted to or filed by the Company with any governmental
authority involving or affecting (i) the Company that could have a Material
Adverse Effect; (ii) the Obligations; (iii) any part of the Pledged Collateral;
or (iv) any of the transactions contemplated in this Agreement or the Loan
Instruments.

Section 6.4. Maintenance of Books and Records; Inspection.

The Company shall maintain its books, accounts and records in accordance
with generally accepted accounting principles consistently applied, and
permit the Secured Party, its officers and employees and any professionals
designated by the Secured Party in writing, at any time to visit and inspect
any of its properties (including but not limited to the collateral security
described in the Transaction Documents and/or the Loan Instruments),
corporate books and financial records, and to discuss its accounts, affairs
and finances with any employee, officer or director thereof.

Section 6.5. Maintenance and Insurance.

(a) The Company shall maintain or cause to be maintained, at its own
expense, all of its assets and properties in good working order and
condition, making all necessary repairs thereto and renewals and
replacements thereof.

(b) The Company shall maintain or cause to be maintained, at its own
expense, insurance in form, substance and amounts (including deductibles),
which the Company deems reasonably necessary to the Company's
business, (i) adequate to insure all assets and properties of the Company,
which assets and properties are of a character usually insured by persons
engaged in the same or similar business against loss or damage resulting
from fire or other risks included in an extended coverage policy; (ii) against
public liability and other tort claims that may be incurred by the Company;
(iii) as may be required by the Transaction Documents and/or applicable
law and (iv) as may be reasonably requested by Secured Party, all with
adequate, financially sound and reputable insurers.


Section 6.6. Contracts and Other Collateral.

The Company shall perform all of its obligations under or with respect to
each instrument, receivable, contract and other intangible included in the
Pledged Property to which the Company is now or hereafter will be party
on a timely basis and in the manner therein required, including, without
limitation, this Agreement.

Section 6.7. Defense of Collateral, Etc.

The Company shall defend and enforce its right, title and interest in and to
any part of:  (a) the Pledged Property; and (b) if not included within the
Pledged Property, those assets and properties whose loss could have a
Material Adverse Effect, the Company shall defend the Secured Party's
right, title and interest in and to each and every part of the Pledged
Property, each against all manner of claims and demands on a timely basis
to the full extent permitted by applicable law.

Section 6.8. Payment of Debts, Taxes, Etc.

The Company shall pay, or cause to be paid, all of its indebtedness and
other liabilities and perform, or cause to be performed, all of its obligations
in accordance with the respective terms thereof, and pay and discharge, or
cause to be paid or discharged, all taxes, assessments and other
governmental charges and levies imposed upon it, upon any of its assets and
properties on or before the last day on which the same may be paid without
penalty, as well as pay all other lawful claims (whether for services, labor,
materials, supplies or otherwise) as and when due

Section 6.9. Taxes and Assessments; Tax Indemnity.

The Company shall (a) file all tax returns and appropriate schedules thereto
that are required to be filed under applicable law, prior to the date of
delinquency, (b) pay and discharge all taxes, assessments and governmental
charges or levies imposed upon the Company, upon its income and profits
or upon any properties belonging to it, prior to the date on which penalties
attach thereto, and (c) pay all taxes, assessments and governmental charges
or levies that, if unpaid, might become a lien or charge upon any of its
properties; provided, however, that the Company in good faith may contest
any such tax, assessment, governmental charge or levy described in the
foregoing clauses (b) and (c) so long as appropriate reserves are maintained
with respect thereto.

Section 6.10. Compliance with Law and Other Agreements.

The Company shall maintain its business operations and property owned or
used in connection therewith in compliance with (a) all applicable federal,
state and local laws, regulations and ordinances governing such business
operations and the use and ownership of such property, and (b) all
agreements, licenses, franchises, indentures and mortgages to which the
Company is a party or by which the Company or any of its properties is
bound.  Without limiting the foregoing, the Company shall pay all of its
indebtedness promptly in accordance with the terms thereof.

Section 6.11. Notice of Default.

The Company shall give written notice to the Secured Party of the
occurrence of any default or Event of Default under this Agreement, the
Transaction Documents or any other Loan Instrument or any other
agreement of Company for the payment of money, promptly upon the
occurrence thereof.

Section 6.12. Notice of Litigation.

The Company shall give notice, in writing, to the Secured Party of (a) any
actions, suits or proceedings wherein the amount at issue is in excess of
$50,000, instituted by any persons against the Company, or affecting any
of the assets of the Company, and (b) any dispute, not resolved within
fifteen (15) days of the commencement thereof, between the Company on
the one hand and any governmental or regulatory body on the other hand,
which might reasonably be expected to have a Material Adverse Effect on
the business operations or financial condition of the Company.

ARTICLE 7.

NEGATIVE COVENANTS

The Company covenants and agrees that, from the date hereof until the
Obligations have been fully paid and satisfied, the Company shall not,
unless the Secured Party shall consent otherwise in writing:

Section 7.1. Indebtedness.

The Company shall not directly or indirectly permit, create, incur, assume,
permit to exist, increase, renew or extend on or after the date hereof any
indebtedness on its part, including commitments, contingencies and credit
availabilities, or apply for or offer or agree to do any of the foregoing other
than the extension of or amendment of the Company's currently outstanding
convertible subordinated notes or in connection with a transaction whereby
the Convertible Debentures will be retired.

Section 7.2. Liens and Encumbrances.

The Company shall not directly or indirectly make, create, incur, assume
or permit to exist any assignment, transfer, pledge, mortgage, security
interest or other lien or encumbrance of any nature in, to or against any
part of the Pledged Property or of the Company's capital stock, or offer or
agree to do so, or own or acquire or agree to acquire any asset or property
of any character subject to any of the foregoing encumbrances (including
any conditional sale contract or other title retention agreement), or assign,
pledge or in any way transfer or encumber its right to receive any income
or other distribution or proceeds from any part of the Pledged Property or
the Company's capital stock; or enter into any sale-leaseback financing
respecting any part of the Pledged Property  as lessee, or cause or assist the
inception or continuation of any of the foregoing other than in connection
with its currently outstanding lease lines of credit.

Section 7.3. Management, Ownership.

The Company shall not materially change its ownership, executive staff or
management without the prior written consent of the Secured Party.  The
ownership, executive staff and management of the Company are material
factors in the Secured Party's willingness to institute and maintain a lending
relationship with the Company.

Section 7.4. Dividends, Etc.

The Company shall not declare or pay any dividend of any kind, in cash or
in property, on any class of its capital stock, nor purchase, redeem, retire
or otherwise acquire for value any shares of such stock, nor make any
distribution of any kind in respect thereof, nor make any return of capital
to shareholders, nor make any payments in respect of any pension, profit
sharing (other than standard 401(k) matching) or retirement plan (except as
required or permitted hereunder), without the prior written consent of the
Secured Party.

Section 7.5. Guaranties; Loans.

The Company shall not guarantee nor be liable in any manner, whether
directly or indirectly, or become contingently liable after the date of this
Agreement in connection with the obligations or indebtedness of any person
or persons, except for (i) the indebtedness currently secured by the liens
identified on the Pledged Property identified on Exhibit A hereto and (ii)
the endorsement of negotiable instruments payable to the Company for
deposit or collection in the ordinary course of business.  The Company
shall not make any loan, advance or extension of credit to any person other
than in the normal course of its business.

Section 7.6. Debt.

The Company shall not create, incur, assume or suffer to exist any
additional indebtedness of any description whatsoever in an aggregate
amount in excess of $25,000 (excluding any indebtedness of the Company
to the Secured Party, trade accounts payable and accrued expenses incurred
in the ordinary course of business and the endorsement of negotiable
instruments payable to the Company, respectively for deposit or collection
in the ordinary course of business).

Section 7.7. Conduct of Business.

The Company will continue to engage, in an efficient and economical
manner, in a business of the same general type as conducted by it on the
date of this Agreement.

Section 7.8. Places of Business.

The location of the Company's chief place of business is 2600 Stemmons
Freeway, Suite 176, Dallas TX 75207.  The Company shall not change the
location of its chief place of business, chief executive office or any place
of business disclosed to the Secured Party or move any of the Pledged
Property from its current location without thirty (30) days' prior written
notice to the Secured Party in each instance.

ARTICLE 8.

MISCELLANEOUS

Section 8.1. Notices.

All notices or other communications required or permitted to be given
pursuant to this Agreement shall be in writing and shall be considered as
duly given on:  (a) the date of delivery, if delivered in person, by nationally
recognized overnight delivery service or (b) five (5) days after mailing if
mailed from within the continental United States by certified mail, return
receipt requested to the party entitled to receive the same:

If to the Secured Party: Cornell Capital Partners, LP
101 Hudson Street-Suite 3700
Jersey City, New Jersey 07302
Attention: Mark Angelo
Portfolio Manager
Telephone: (201) 986-8300
Facsimile: (201) 985-8266

With a copy to: Troy Rillo, Esq.
101 Hudson Street, Suite 3700
Jersey City, NJ 07302
Telephone: (201) 985-8300
Facsimile: (201) 985-8266

And if to the Company: Access Pharmaceuticals, Inc.
2600 Stemmons Freeway, Suite 176
Dallas, TX 75207
Attention: Kerry P. Grey
Telephone: (214) 905-5100
Facsimile: (214) 905-5101

With a copy to: Bingham McCutchen LLP
150 Federal Street
Boston, MA 02110-1726
Attention: John J. Concannon, Esq.
Telephone: (617) 951-8874
Facsimile: (617) 951-8736

Any party may change its address by giving notice to the other party stating
its new address.  Commencing on the tenth (10th) day after the giving of
such notice, such newly designated address shall be such party's address for
the purpose of all notices or other communications required or permitted to
be given pursuant to this Agreement.

Section 8.2. Severability.

If any provision of this Agreement shall be held invalid or unenforceable,
such invalidity or unenforceability shall attach only to such provision and
shall not in any manner affect or render invalid or unenforceable any other
severable provision of this Agreement, and this Agreement shall be carried
out as if any such invalid or unenforceable provision were not contained
herein.

Section 8.3. Expenses.

In the event of an Event of Default, the Company will pay to the Secured
Party the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel, which the Secured Party may
incur in connection with:  (i) the custody or preservation of, or the sale,
collection from, or other realization upon, any of the Pledged Property;
(ii) the exercise or enforcement of any of the rights of the Secured Party
hereunder or (iii) the failure by the Company to perform or observe any of
the provisions hereof.

Section 8.4. Waivers, Amendments, Etc.

The Secured Party's delay or failure at any time or times hereafter to
require strict performance by Company of any undertakings, agreements or
covenants shall not waiver, affect, or diminish any right of the Secured
Party under this Agreement to demand strict compliance and performance
herewith.  Any waiver by the Secured Party of any Event of Default shall
not waive or affect any other Event of Default, whether such Event of
Default is prior or subsequent thereto and whether of the same or a
different type.  None of the undertakings, agreements and covenants of the
Company contained in this Agreement, and no Event of Default, shall be
deemed to have been waived by the Secured Party, nor may this Agreement
be amended, changed or modified, unless such waiver, amendment, change
or modification is evidenced by an instrument in writing specifying such
waiver, amendment, change or modification and signed by the Secured
Party.

Section 8.5. Continuing Security Interest.

This Agreement shall create a continuing security interest in the Pledged
Property and shall: (i) remain in full force and effect until payment in full
of the Obligations; and (ii) be binding upon the Company and its successors
and heirs and (iii) inure to the benefit of the Secured Party and its
successors and assigns.  Upon the payment or satisfaction in full of the
Obligations, the Company shall be entitled to the return, at its expense, of
such of the Pledged Property as shall not have been sold in accordance with
Section 5.2 hereof or otherwise applied pursuant to the terms hereof.

Section 8.6. Independent Representation.

Each party hereto acknowledges and agrees that it has received or has had
the opportunity to receive independent legal counsel of its own choice and
that it has been sufficiently apprised of its rights and responsibilities with
regard to the substance of this Agreement.

Section 8.7. Applicable Law:  Jurisdiction.

This Agreement shall be governed by and interpreted in accordance with the
laws of the State of New Jersey without regard to the principles of conflict
of laws.  The parties further agree that any action between them shall be
heard in Hudson County, New Jersey, and expressly consent to the
jurisdiction and venue of the Superior Court of New Jersey, sitting in
Hudson County and the United States District Court for the District of New
Jersey sitting in Newark, New Jersey for the adjudication of any civil action
asserted pursuant to this Paragraph.

Section 8.8. Waiver of Jury Trial.

AS A FURTHER INDUCEMENT FOR THE SECURED PARTY TO ENTER INTO THIS AGREEMENT
AND TO MAKE THE FINANCIAL ACCOMMODATIONS TO THE COMPANY, THE COMPANY HEREBY
WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATED IN ANY WAY
TO THIS AGREEMENT AND/OR ANY AND ALL OTHER DOCUMENTS RELATED TO THIS
TRANSACTION.

Section 8.9. Entire Agreement.

This Agreement constitutes the entire agreement among the parties and
supersedes any prior agreement or understanding among them with respect
to the subject matter hereof.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.

CORNELL CAPITAL PARTNERS, LP

By: Yorkville Advisors, LLC
Its: General Partner

By:/s/ Mark Angelo
- --------------------
Name: Mark Angelo
Title: Portfolio Manager

HIGHGATE HOUSE FUNDS, LTD

By: Yorkville Advisors, LLC
Its: General Partner

By: /s/ Mark Angelo
- --------------------
Name: Mark Angelo
Title: Portfolio Manager


ACCESS PHARMACEUTICAL, INC.

By: /s/ Kerry P. Gray
- ----------------------
Name:Kerry P. Gray
Title: President and Chief Executive Officer

ESCROW AGENT

By: /s/ David Gonzalez
- --------------------------
Name: David Gonzalez, Esq.


EXHIBIT A

DEFINITION OF PLEDGED PROPERTY

For the purpose of securing prompt and complete payment and performance
by the Company of all of the Obligations, the Company unconditionally and
irrevocably hereby grants to the Secured Party a continuing security interest
in and to, and lien upon, the following Pledged Property of the Company:

(a) all goods of the Company, including, without limitation, machinery,
equipment, furniture, furnishings, fixtures, signs, lights, tools, parts,
supplies and motor vehicles of every kind and description, now or hereafter
owned by the Company or in which the Company may have or may
hereafter acquire any interest, and all replacements, additions, accessions,
substitutions and proceeds thereof, arising from the sale or disposition
thereof, and where applicable, the proceeds of insurance and of any tort
claims involving any of the foregoing;

(b) all inventory of the Company, including, but not limited to, all goods,
wares, merchandise, parts, supplies, finished products, other tangible
personal property, including such inventory as is temporarily out of
Company's custody or possession and including any returns upon any
accounts or other proceeds, including insurance proceeds, resulting from the
sale or disposition of any of the foregoing;

(c) all contract rights and general intangibles of the Company, including,
without limitation, goodwill, trademarks, trade styles, trade names,
leasehold interests, partnership or joint venture interests, patents and patent
applications, copyrights, deposit accounts whether now owned or hereafter
created;

(d) all documents, warehouse receipts, instruments and chattel paper of the
Company whether now owned or hereafter created;

(e) all accounts and other receivables, instruments or other forms of
obligations and rights to payment of the Company (herein collectively
referred to as "Accounts"), together with the proceeds thereof, all goods
represented by such Accounts and all such goods that may be returned by
the Company's customers, and all proceeds of any insurance thereon, and
all guarantees, securities and liens which the Company may hold for the
payment of any such Accounts including, without limitation, all rights of
stoppage in transit, replevin and reclamation and as an unpaid vendor
and/or lienor, all of which the Company represents and warrants will be
bona fide and existing obligations of its respective customers, arising out
of the sale of goods by the Company in the ordinary course of business;

(f) to the extent assignable, all of the Company's rights under all present
and future authorizations, permits, licenses and franchises issued or granted
in connection with the operations of any of its facilities;

(g) all products and proceeds (including, without limitation, insurance
proceeds) from the above-described Pledged Property.

EX-10.32

EXHIBIT 10.32

                       PLEDGE AND ESCROW AGREEMENT

THIS PLEDGE AND ESCROW AGREEMENT (the "Agreement") is made
and entered into as of March 30, 2005 (the "Effective Date") by and among
CORNELL CAPITAL PARTNERS, LP, HIGHGATE HOUSE FUNDS,
LTD. (collectively, the "Pledgee"), ACCESS PHARMACEUTICALS,
INC., a corporation organized and existing under the laws of the State of
Delaware (the "Pledgor"), and DAVID GONZALEZ, ESQ., as escrow
agent ("Escrow Agent").

RECITALS:

WHEREAS, in order to secure the Company's obligations under the
Securities Purchase Agreement, the Convertible Debentures, the Security
Agreement, this Agreement and the Escrow Agreement all of even date
herewith (collectively referred to as the "Transaction Documents"), the
Pledgor has agreed to pledge to the Pledgee up to Two Million Eight
Hundred Ninety Thousand Seven Hundred Twenty Three (2,891,723) shares
(the "Pledged Shares") of the Pledgor's common stock.

WHEREAS, subject to the terms of the Convertible Debentures, the
Pledgee has the right to convert at any time until payment in full, the
Convertible Debentures into an aggregate of up to 658,250 shares of the
Pledgor's common stock (the "Conversion Shares").

NOW, THEREFORE, in consideration of the mutual covenants,
agreements, warranties, and representations herein contained, and for other
good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:

TERMS AND CONDITIONS

1. Pledge and Transfer of Pledged Shares.

1.1. The Pledgor hereby grants to Pledgee a security interest in all Pledged
Shares as security for Pledgor's obligations under the Convertible
Debentures. Simultaneously with the execution of the Transaction
Documents, the Pledgor shall deliver to the Escrow Agent stock certificates
representing the Pledged Shares, together with duly executed stock powers
or other appropriate transfer documents executed in blank by the Pledgor
(the "Transfer Documents"), and such stock certificates and Transfer
Documents shall be held by the Escrow Agent until the full payment of all
amounts due to the Pledgee under the Convertible Debentures and through
repayment in accordance with the terms of the Convertible Debentures, or
the termination or expiration of this Agreement.

1.2. Adjustment to Pledged Shares. Upon each conversion by the Pledgee
into Conversion Shares, the Pledgor shall provide written notice to the
Escrow Agent, with a copy to the Pledgee, of the number of Conversion
Shares issued to the Pledgee pursuant to such conversion and the number
of Pledged Shares pursuant to this agreement shall be reduced, share for
share, by the number of Conversion Shares issued to the Pledgee (if
required by the applicable rules of the American Stock Exchange or the
Nasdaq).

2. Rights Relating to Pledged Shares.  Prior to the occurrence of an Event
of Default (as defined herein), the Pledged Shares shall not be, or be
deemed to be, issued or outstanding shares of the Pledgor and neither the
Pledgee nor any other person shall be entitled to vote, receive dividends and
other distributions thereon, and enjoy all other rights and privileges incident
to the ownership of the number of Pledged Shares actually released from
escrow in accordance with Section 5.1.

3. Release of Pledged Shares from Pledge.  Upon the payment of all
amounts due to the Pledgee under the Convertible Debentures by repayment
or conversion in accordance with the terms of the Convertible Debenture,
the parties hereto shall notify the Escrow Agent to such effect in writing.
Upon receipt of such written notice for payment of the amounts due to the
Pledgee under the Convertible Debentures, the Escrow Agent shall return
to the Pledgor the Transfer Documents and the certificates representing the
Pledged Shares, (collectively the "Pledged Materials), whereupon any and
all rights of Pledgee in the Pledged Materials shall be terminated.
Notwithstanding anything to the contrary contained herein, upon full
payment of all amounts due to the Pledgee under the Convertible
Debentures, by repayment or conversion in accordance with the terms of
the Convertible Debenture, this Agreement and Pledgee's security interest
and rights in and to the Pledged Shares shall terminate.

4. Event of Default.  An "Event of Default" shall be deemed to have
occurred under this Agreement upon an Event of Default under the
Transaction Documents.

5. Remedies.

5.1. Upon the occurrence of an Event of Default, the Pledgee shall provide
written notice of such Default (the "Default Notice") to the Escrow Agent,
with a copy to the Pledgor.  As soon as practicable after receipt of the
Default Notice, the Escrow Agent shall deliver to Pledgee the Pledged
Materials held by the Escrow Agent hereunder, whereupon Pledgee may
sell the number of Pledged Shares of which the proceeds from such sales,
net of any selling commissions, are sufficient to repay all amounts owed to
the Pledgee including, without limitation, outstanding principal, interest,
legal fees, and any other amounts owed to the Pledgee and exercise all
other rights and remedies of a secured party with respect to such property
as may be available under the Uniform Commercial Code as in effect in the
State of New Jersey.  To the extent that the net proceeds received by the
Pledgee are less than the amounts it is owed, the Pledgee shall be entitled
to a deficiency judgment for such amount and shall be entitled to proceed
against any other collateral.  The Pledgee shall have the absolute right to
sell or dispose of the Pledged Shares in any manner it sees fit and shall
have no liability to the Pledgor or any other party for selling or disposing
of such Pledged Shares even if other methods of sales or dispositions would
or allegedly would result in greater proceeds than the method actually used.
The Escrow Agent shall have the absolute right to disburse the Pledged
Shares to the Pledgee in batches not to exceed 9.9% of the outstanding
capital of the Company.  The Pledgee shall return any Pledged Shares
released to it and remaining after the Pledgee has applied the net proceeds
to all amounts owed to the Pledgee.  The Pledgee shall be entitled to vote,
receive dividends and other distributions thereon, and enjoy all other rights
and privileges incident to the ownership of the number of Pledged Shares
actually released from escrow in accordance with this Section 5.1

5.2. Demand Registration Rights.  In addition to all other remedies
available to the Pledgee, upon an Event of Default, the Pledgor shall
promptly, but in no event more than thirty (30) days after the date of the
Default Notice, file a registration statement to register with the Securities
and Exchange Commission the Pledged Shares for the resale by the
Pledgee.  The Pledgor shall cause the registration statement to remain in
effect until all of the Pledged Shares have been sold by the Pledgee or until
they are eligible for sale pursuant to Rule 144(k).

6. Concerning the Escrow Agent.

6.1. The Escrow Agent undertakes to perform only such duties as are
expressly set forth herein and no implied duties or obligations shall be read
into this Agreement against the Escrow Agent.

6.2. The Escrow Agent may act in reliance upon any writing or instrument
or signature which it, in good faith, believes to be genuine, may assume the
validity and accuracy of any statement or assertion contained in such a
writing or instrument, and may assume that any person purporting to give
any writing, notice, advice or instructions in connection with the provisions
hereof has been duly authorized to do so.  The Escrow Agent shall not be
liable in any manner for the sufficiency or correctness as to form, manner,
and execution, or validity of any instrument deposited in this escrow, nor
as to the identity, authority, or right of any person executing the same; and
its duties hereunder shall be limited to the safekeeping of such certificates,
monies, instruments, or other document received by it as such escrow
holder, and for the disposition of the same in accordance with the written
instruments accepted by it in the escrow.

6.3. Pledgee and the Pledgor hereby agree, to defend and indemnify the
Escrow Agent and hold it harmless from any and all claims, liabilities,
losses, actions, suits, or proceedings at law or in equity, or any other
expenses, fees, or charges of any character or nature which it may incur or
with which it may be threatened by reason of its acting as Escrow Agent
under this Agreement; and in connection therewith, to indemnify the
Escrow Agent against any and all expenses, including attorneys' fees and
costs of defending any action, suit, or proceeding or resisting any claim
(and any costs incurred by the Escrow Agent pursuant to Sections 6.4 or
6.5 hereof).  The Escrow Agent shall be vested with a lien on all property
deposited hereunder, for indemnification of attorneys' fees and court costs
regarding any suit, proceeding or otherwise, or any other expenses, fees,
or charges of any character or nature, which may be incurred by the
Escrow Agent by reason of disputes arising between the makers of this
escrow as to the correct interpretation of this Agreement and instructions
given to the Escrow Agent hereunder, or otherwise, with the right of the
Escrow Agent, regardless of the instructions aforesaid, to hold said property
until and unless said additional expenses, fees, and charges shall be fully
paid.  Any fees and costs charged by the Escrow Agent for serving
hereunder shall be paid by the Pledgor.

6.4. If any of the parties shall be in disagreement about the interpretation
of this Agreement, or about the rights and obligations, or the propriety of
any action contemplated by the Escrow Agent hereunder, the Escrow Agent
may, at its sole discretion deposit the Pledged Materials with the Clerk of
the United States District Court of New Jersey, sitting in Newark, New
Jersey, and, upon notifying all parties concerned of such action, all liability
on the part of the Escrow Agent shall fully cease and terminate.  The
Escrow Agent shall be indemnified by the Pledgor, the Company and
Pledgee for all costs, including reasonable attorneys' fees in connection
with the aforesaid proceeding, and shall be fully protected in suspending all
or a part of its activities under this Agreement until a final decision or other
settlement in the proceeding is received.

6.5. The Escrow Agent may consult with counsel of its own choice (and the
costs of such counsel shall be paid by the Pledgor and Pledgee) and shall
have full and complete authorization and protection for any action taken or
suffered by it hereunder in good faith and in accordance with the opinion
of such counsel.  The Escrow Agent shall not be liable for any mistakes of
fact or error of judgment, or for any actions or omissions of any kind,
unless caused by its willful misconduct or gross negligence.

6.6. The Escrow Agent may resign upon ten (10) days' written notice to the
parties in this Agreement.  If a successor Escrow Agent is not appointed
within this ten (10) day period, the Escrow Agent may petition a court of
competent jurisdiction to name a successor.

6.7 Conflict Waiver. The Pledgor hereby acknowledges that the Escrow
Agent is general counsel to the Pledgee, a partner in the general partner of
the Pledgee, and counsel to the Pledgee in connection with the transactions
contemplated and referred herein.  The Pledgor agrees that in the event of
any dispute arising in connection with this Agreement or otherwise in
connection with any transaction or agreement contemplated and referred
herein, the Escrow Agent shall be permitted to continue to represent the
Pledgee and the Pledgor will not seek to disqualify such counsel and waives
any objection Pledgor might have with respect to the Escrow Agent acting
as the Escrow Agent pursuant to this Agreement.

6.8 Notices.  Unless otherwise provided herein, all demands, notices,
consents, service of process, requests and other communications hereunder
shall be in writing and shall be delivered in person or by overnight courier
service, or mailed by certified mail, return receipt requested, addressed:

If to the Pledgor, to: Access Pharmaceuticals, Inc.
2600 Stemmons Freeway, Suite 176
Dallas, TX 75207
Attention: Kerry P. Gray
Telephone: (214) 905-5100
Facsimile: (214) 905-5101

With a copy to: Bingham McCutchen
150 Federal Street
Boston, MA 02110-1726
Attention: John J. Concannon, Esq.
Telephone: (617) 951-8874
Facsimile: (617) 951-8736

If to the Pledgee: Cornell Capital Partners LP
101 Hudson Street, Suite 3700
Jersey City, NJ 07302
Attention: Mark A. Angelo
Telephone: (201) 985-8300
Facsimile: (201) 985-8744

With copy to: Troy Rillo, Esq.
101 Hudson Street, Suite 3700
Jersey City, NJ 07302
Telephone: (201) 985-8300
Facsimile: (201) 985-1964

Any such notice shall be effective (a) when delivered, if delivered by hand
delivery or overnight courier service, or (b) five (5) days after deposit in
the United States mail, as applicable.

7. Binding Effect.  All of the covenants and obligations contained herein
shall be binding upon and shall inure to the benefit of the respective parties,
their successors and assigns.

8. Governing Law; Venue; Service of Process.  The validity, interpretation
and performance of this Agreement shall be determined in accordance with
the laws of the State of New Jersey applicable to contracts made and to be
performed wholly within that state except to the extent that Federal law
applies.  The parties hereto agree that any disputes, claims, disagreements,
lawsuits, actions or controversies of any type or nature whatsoever that,
directly or indirectly, arise from or relate to this Agreement, including,
without limitation, claims relating to the inducement, construction,
performance or termination of this Agreement, shall be brought in the state
superior courts located in Hudson County, New Jersey or Federal district
courts located in Newark, New Jersey, and the parties hereto agree not to
challenge the selection of that venue in any such proceeding for any reason,
including, without limitation, on the grounds that such venue is an
inconvenient forum.  The parties hereto specifically agree that service of
process may be made, and such service of process shall be effective if
made, pursuant to Section 8 hereto.

9. Enforcement Costs.  If any legal action or other proceeding is brought
for the enforcement of this Agreement, or because of an alleged dispute,
breach, default or misrepresentation in connection with any provisions of
this Agreement, the successful or prevailing party or parties shall be entitled
to recover reasonable attorneys' fees, court costs and all expenses even if
not taxable as court costs (including, without limitation, all such fees, costs
and expenses incident to appeals), incurred in that action or proceeding, in
addition to any other relief to which such party or parties may be entitled.

10. Remedies Cumulative.  No remedy herein conferred upon any party is
intended to be exclusive of any other remedy, and each and every such
remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law, in equity, by statute,
or otherwise.  No single or partial exercise by any party of any right,
power or remedy hereunder shall preclude any other or further exercise
thereof.

11. Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute the same instrument.

12. No Penalties.  No provision of this Agreement is to be interpreted as
a penalty upon any party to this Agreement.

13. JURY TRIAL.  EACH OF THE PLEDGEE AND THE PLEDGOR
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES THE RIGHT WHICH IT MAY HAVE TO A TRIAL BY JURY
OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
BASED HEREON, OR ARISING OUT OF, UNDER OR IN ANY WAY
CONNECTED WITH THE DEALINGS BETWEEN PLEDGEE AND
PLEDGOR, THIS PLEDGE AND ESCROW AGREEMENT OR ANY
DOCUMENT EXECUTED IN CONNECTION HEREWITH, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY PARTY
HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING
OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT,
EQUITY OR OTHERWISE.

IN WITNESS WHEREOF, the parties hereto have duly executed this
Pledge and Escrow Agreement as of the date first above written.

CORNELL CAPITAL PARTNERS, LP

By: Yorkville Advisors, LLC
Its: General Partner

By: /s/ Mark Angelo
Name: Mark Angelo
Title: Portfolio Manager


HIGHGATE HOUSE FUNDS, LTD
By: Yorkville Advisors, LLC
Its: General Partner
By: /s/ Mark Angelo

Name: Mark Angelo
Title: Portfolio Manager


ACCESS PHARMACEUTICALS, INC.

By: /s/ Kerry P. Gray
Name: Kerry P. Gray
Title: President and Chief Executive Officer

ESCROW AGENT

By: /s/ David Gonzalez
Name: David Gonzalez, Esq.

EX-10.33

Exhibit 10.33

                           ESCROW AGREEMENT

THIS ESCROW AGREEMENT (this "Agreement") is made and entered
into as of March 30, 2005 by and among ACCESS
PHARMACEUTICALS, INC., a Delaware corporation (the "Company");
the Buyer(s) listed in the Securities Purchase Agreement, dated the date
hereof (also referred to as the "Investor(s)"), and DAVID GONZALEZ,
ESQ., as Escrow Agent hereunder (the "Escrow Agent").

BACKGROUND

WHEREAS, the Company and the Investor(s) have entered into a Securities
Purchase Agreement (the "Securities Purchase Agreement"), dated as of the
date hereof, pursuant to which the Company proposes to sell secured
convertible debentures (the "Convertible Debentures") which shall be
convertible into the Company's Common Stock, par value $0.01 per
share (the "Common Stock"), for a total purchase price of up to Two
Million Six Hundred Thirty Three Thousand Dollars ($2,633,000).  The
Securities Purchase Agreement provides that the Investor(s) shall deposit the
purchase amount in a segregated escrow account to be held by Escrow
Agent in order to effectuate a disbursement to the Company at a closing to
be held as set forth in the Securities Purchase Agreement (the "Closing").

WHEREAS, the Company intends to sell Convertible Securities (the
"Offering").

WHEREAS, Escrow Agent has agreed to accept, hold, and disburse the
funds deposited with it in accordance with the terms of this Agreement.

WHEREAS, in order to establish the escrow of funds and to effect the
provisions of the Securities Purchase Agreement, the parties hereto have
entered into this Agreement.

NOW THEREFORE, in consideration of the foregoing, it is hereby agreed
as follows:

1. Definitions.  The following terms shall have the following meanings
when used herein:

a. "Escrow Funds" shall mean the funds deposited with Escrow Agent
pursuant to this Agreement.

b. "Joint Written Direction" shall mean a written direction executed by the
Investor(s) and the Company directing Escrow Agent to disburse all or a
portion of the Escrow Funds or to take or refrain from taking any action
pursuant to this Agreement.

c. "Escrow Period" shall begin with the commencement of the Offering and
shall terminate upon the earlier to occur of the following dates:

(i) The date upon which Escrow Agent confirms that it has received in the
Escrow Account all of the proceeds of the sale of the Convertible
Debentures;

(ii) The expiration of twenty (20) days from the date of commencement of
the Offering (unless extended by mutual written agreement between the
Company and the Investor(s) with a copy of such extension to Escrow
Agent); or

(iii) The date upon which a determination is made by the Company and the
Investor(s) to terminate the Offering prior to the sale of all the Convertible
Debentures.

During the Escrow Period, the Company and the Investor(s) are aware that
they are not entitled to any funds received into escrow and no amounts
deposited in the Escrow Account shall become the property of the Company
or the Investor(s) or any other entity, or be subject to the debts of the
Company or the Investor(s) or any other entity.

2. Appointment of and Acceptance by Escrow Agent.  The Investor(s) and
the Company hereby appoint Escrow Agent to serve as Escrow Agent
hereunder.  Escrow Agent hereby accepts such appointment and, upon
receipt by wire transfer of the Escrow Funds in accordance with Section 3
below, agrees to hold, invest and disburse the Escrow Funds in accordance
with this Agreement.

a. The Company hereby acknowledges that the Escrow Agent is general
counsel to the Investor(s), a partner in the general partner of the
Investor(s), and counsel to the Investor(s) in connection with the
transactions contemplated and referred herein.  The Company agrees that
in the event of any dispute arising in connection with this Escrow
Agreement or otherwise in connection with any transaction or agreement
contemplated and referred herein, the Escrow Agent shall be permitted to
continue to represent the Investor(s) and the Company will not seek to
disqualify such counsel.

3. Creation of Escrow Funds.  On or prior to the date of the
commencement of the Offering, the parties shall establish an escrow
account with the Escrow Agent, which escrow account shall be entitled as
follows:  Access Pharmaceuticals, Inc./Cornell Capital Partners, LP Escrow
Account for the deposit of the Escrow Funds.  The Investor(s) will instruct
subscribers to wire funds to the account of the Escrow Agent as follows:


Bank: Wachovia, N.A. of New Jersey
Routing #: 031201467
Account #: 2000014931134
Name on Account: David Gonzalez Attorney Trust Account
Name on Sub-Account: Access Pharmaceuticals, Inc./Cornell Capital
Partners, LP Escrow account

4. Deposits into the Escrow Account.  The Investor(s) agrees that they shall
promptly deliver funds for the payment of the Convertible Debentures to
Escrow Agent for deposit in the Escrow Account.

5. Disbursements from the Escrow Account.
a. The Escrow Agent will continue to hold such funds until Cornell Capital
Partners, LP on behalf of the Investor(s) and Company execute a Joint
Written Direction directing the Escrow Agent to disburse the Escrow Funds
pursuant to Joint Written Direction signed by the Company and the
Investor(s).  In disbursing such funds, Escrow Agent is authorized to rely
upon such Joint Written Direction from the Company and the Investor(s)
and may accept any signatory from the Company listed on the signature
page to this Agreement and any signature from the Investor(s) that the
Escrow Agent already has on file.

b. In the event Escrow Agent does not receive the amount of the Escrow
Funds from the Investor(s), Escrow Agent shall notify the Company and the
Investor(s).  Upon receipt of payment instructions from the Company,
Escrow Agent shall refund to each subscriber without interest the amount
received from each Investor(s), without deduction, penalty, or expense to
the subscriber.  The purchase money returned to each subscriber shall be
free and clear of any and all claims of the Company, the Investor(s) or any
of their creditors.

c. In the event Escrow Agent does receive the amount of the Escrow Funds
prior to expiration of the Escrow Period, in no event will the Escrow Funds
be released to the Company until such amount is received by Escrow Agent
in collected funds. For purposes of this Agreement, the term "collected
funds" shall mean all funds received by Escrow Agent which have cleared
normal banking channels and are in the form of cash.

6. Collection Procedure.  Escrow Agent is hereby authorized to deposit the
proceeds of each wire in the Escrow Account.

7. Suspension of Performance: Disbursement Into Court.  If at any time,
there shall exist any dispute between the Company and the Investor(s) with
respect to holding or disposition of any portion of the Escrow Funds or any
other obligations of Escrow Agent hereunder, or if at any time Escrow
Agent is unable to determine, to Escrow Agent's sole satisfaction, the
proper disposition of any portion of the Escrow Funds or Escrow Agent's
proper actions with respect to its obligations hereunder, or if the parties
have not within thirty (30) days of the furnishing by Escrow Agent of a
notice of resignation pursuant to Section 9 hereof, appointed a successor
Escrow Agent to act hereunder, then Escrow Agent may, in its sole
discretion, take either or both of the following actions:

a. suspend the performance of any of its obligations (including without
limitation any disbursement obligations) under this Escrow Agreement until
such dispute or uncertainty shall be resolved to the sole satisfaction of
Escrow Agent or until a successor Escrow Agent shall be appointed (as the
case may be); provided however, Escrow Agent shall continue to invest the
Escrow Funds in accordance with Section 8 hereof; and/or

b. petition (by means of an interpleader action or any other appropriate
method) any court of competent jurisdiction in any venue convenient to
Escrow Agent, for instructions with respect to such dispute or uncertainty,
and to the extent required by law, pay into such court, for holding and
disposition in accordance with the instructions of such court, all funds held
by it in the Escrow Funds, after deduction and payment to Escrow Agent
of all fees and expenses (including court costs and attorneys' fees) payable
to, incurred by, or expected to be incurred by Escrow Agent in connection
with performance of its duties and the exercise of its rights hereunder.

c. Escrow Agent shall have no liability to the Company, the Investor(s), or
any person with respect to any such suspension of performance or
disbursement into court, specifically including any liability or claimed
liability that may arise, or be alleged to have arisen, out of or as a result
of any delay in the disbursement of funds held in the Escrow Funds or any
delay in with respect to any other action required or requested of Escrow
Agent.

8. Investment of Escrow Funds.  Escrow Agent shall deposit the Escrow
Funds in a non-interest bearing account.

If Escrow Agent has not received a Joint Written Direction at any time that
an investment decision must be made, Escrow Agent shall maintain the
Escrow Funds, or such portion thereof, as to which no Joint Written
Direction has been received, in a non-interest bearing account.

9. Resignation and Removal of Escrow Agent.  Escrow Agent may resign
from the performance of its duties hereunder at any time by giving thirty
(30) days' prior written notice to the parties or may be removed, with or
without cause, by the parties, acting jointly, by furnishing a Joint Written
Direction to Escrow Agent, at any time by the giving of ten (10) days'
prior written notice to Escrow Agent as provided herein below.  Upon any
such notice of resignation or removal, the representatives of the Investor(s)
and the Company identified in Sections 13a.(iv) and 13b.(iv), below, jointly
shall appoint a successor Escrow Agent hereunder, which shall be a
commercial bank, trust company or other financial institution with a
combined capital and surplus in excess of $10,000,000.00.  Upon the
acceptance in writing of any appointment of Escrow Agent hereunder by a
successor Escrow Agent, such successor Escrow Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Escrow Agent, and the retiring Escrow Agent shall be
discharged from its duties and obligations under this Escrow Agreement,
but shall not be discharged from any liability for actions taken as Escrow
Agent hereunder prior to such succession.  After any retiring Escrow
Agent's resignation or removal, the provisions of this Escrow Agreement
shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was Escrow Agent under this Escrow Agreement.  The retiring
Escrow Agent shall transmit all records pertaining to the Escrow Funds and
shall pay all funds held by it in the Escrow Funds to the successor Escrow
Agent, after making copies of such records as the retiring Escrow Agent
deems advisable and after deduction and payment to the retiring Escrow
Agent of all fees and expenses (including court costs and attorneys' fees)
payable to, incurred by, or expected to be incurred by the retiring Escrow
Agent in connection with the performance of its duties and the exercise of
its rights hereunder.

10. Liability of Escrow Agent.
a. Escrow Agent shall have no liability or obligation with respect to the
Escrow Funds except for Escrow Agent's willful misconduct or gross
negligence.  Escrow Agent's sole responsibility shall be for the safekeeping,
investment, and disbursement of the Escrow Funds in accordance with the
terms of this Agreement.  Escrow Agent shall have no implied duties or
obligations and shall not be charged with knowledge or notice or any fact
or circumstance not specifically set forth herein.  Escrow Agent may rely
upon any instrument, not only as to its due execution, validity and
effectiveness, but also as to the truth and accuracy of any information
contained herein, which Escrow Agent shall in good faith believe to be
genuine, to have been signed or presented by the person or parties
purporting to sign the same and conform to the provisions of this
Agreement.  In no event shall Escrow Agent be liable for incidental,
indirect, special, and consequential or punitive damages.  Escrow Agent
shall not be obligated to take any legal action or commence any proceeding
in connection with the Escrow Funds, any account in which Escrow Funds
are deposited, this Agreement or the Purchase Agreement, or to appear in,
prosecute or defend any such legal action or proceeding.  Escrow Agent
may consult legal counsel selected by it in any event of any dispute or
question as to construction of any of the provisions hereof or of any other
agreement or its duties hereunder, or relating to any dispute involving any
party hereto, and shall incur no liability and shall be fully indemnified from
any liability whatsoever in acting in accordance with the opinion or
instructions of such counsel.  The Company and the Investor(s) jointly and
severally shall promptly pay, upon demand, the reasonable fees and
expenses of any such counsel.

b. Escrow Agent is hereby authorized, in its sole discretion, to comply with
orders issued or process entered by any court with respect to the Escrow
Funds, without determination by Escrow Agent of such court's jurisdiction
in the matter.  If any portion of the Escrow Funds is at any time attached,
garnished or levied upon under any court order, or in case the payment,
assignment, transfer, conveyance or delivery of any such property shall be
stayed or enjoined by any court order, or in any case any order judgment
or decree shall be made or entered by any court affecting such property or
any part thereof, then and in any such event, Escrow Agent is authorized,
in its sole discretion, to rely upon and comply with any such order, writ
judgment or decree which it is advised by legal counsel selected by it,
binding upon it, without the need for appeal or other action; and if Escrow
Agent complies with any such order, writ, judgment or decree, it shall not
be liable to any of the parties hereto or to any other person or entity by
reason of such compliance even though such order, writ judgment or decree
may be subsequently reversed, modified, annulled, set aside or vacated.

11. Indemnification of Escrow Agent.  From and at all times after the date
of this Agreement, the parties jointly and severally, shall, to the fullest
extent permitted by law and to the extent provided herein, indemnify and
hold harmless Escrow Agent and each director, officer, employee, attorney,
agent and affiliate of Escrow Agent (collectively, the "Indemnified Parties")
against any and all actions, claims (whether or not valid), losses, damages,
liabilities, costs and expenses of any kind or nature whatsoever (including
without limitation reasonable attorney's fees, costs and expenses) incurred
by or asserted against any of the Indemnified Parties from and after the date
hereof, whether direct, indirect or consequential, as a result of or arising
from or in any way relating to any claim, demand, suit, action, or
proceeding (including any inquiry or investigation) by any person, including
without limitation the parties to this Agreement, whether threatened or
initiated, asserting a claim for any legal or equitable remedy against any
person under any statute or regulation, including, but not limited to, any
federal or state securities laws, or under any common law or equitable
cause or otherwise, arising from or in connection with the negotiation,
preparation, execution, performance or failure of performance of this
Agreement or any transaction contemplated herein, whether or not any such
Indemnified Party is a party to any such action or proceeding, suit or the
target of any such inquiry or investigation; provided, however, that no
Indemnified Party shall have the right to be indemnified hereunder for
liability finally determined by a court of competent jurisdiction, subject to
no further appeal, to have resulted from the gross negligence or willful
misconduct of such Indemnified Party.  If any such action or claim shall be
brought or asserted against any Indemnified Party, such Indemnified Party
shall promptly notify the Company and the Investor(s) hereunder in writing,
and the Investor(s) and the Company shall assume the defense thereof,
including the employment of counsel and the payment of all expenses.
Such Indemnified Party shall, in its sole discretion, have the right to
employ separate counsel (who may be selected by such Indemnified Party
in its sole discretion) in any such action and to participate and to participate
in the defense thereof, and the fees and expenses of such counsel shall be
paid by such Indemnified Party, except that the Investor(s) and/or the
Company shall be required to pay such fees and expense if (a) the
Investor(s) or the Company agree to pay such fees and expenses, or (b) the
Investor(s) and/or the Company shall fail to assume the defense of such
action or proceeding or shall fail, in the sole discretion of such Indemnified
Party, to employ counsel reasonably satisfactory to the Indemnified Party
in any such action or proceeding, (c) the Investor(s) and the Company are
the plaintiff in any such action or proceeding or (d) the named or potential
parties to any such action or proceeding (including any potentially
impleaded parties) include both the Indemnified Party, the Company and/or
the Investor(s) and the Indemnified Party shall have been advised by
counsel that there may be one or more legal defenses available to it which
are different from or additional to those available to the Company or the
Investor(s).  The Investor(s) and the Company shall be jointly and severally
liable to pay fees and expenses of counsel pursuant to the preceding
sentence, except that any obligation to pay under clause (a) shall apply only
to the party so agreeing.  All such fees and expenses payable by the
Company and/or the Investor(s) pursuant to the foregoing sentence shall be
paid from time to time as incurred, both in advance of and after the final
disposition of such action or claim.  The obligations of the parties under
this section shall survive any termination of this Agreement, and resignation
or removal of the Escrow Agent shall be independent of any obligation of
Escrow Agent.

The parties agree that neither payment by the Company or the Investor(s)
of any claim by Escrow Agent for indemnification hereunder shall impair,
limit, modify, or affect, as between the Investor(s) and the Company, the
respective rights and obligations of Investor(s), on the one hand, and the
Company, on the other hand.

12. Expenses of Escrow Agent.  Except as set forth in Section 11 the
Company shall reimburse Escrow Agent for all of its reasonable out-of-
pocket expenses related to its performance of this Agreement, including
attorneys' fees, travel expenses, telephone and facsimile transmission costs,
postage (including express mail and overnight delivery charges), copying
charges and the like.  All of the compensation and reimbursement
obligations set forth in this Section shall be payable by the Company, upon
demand by Escrow Agent.  The obligations of the Company under this
Section shall survive any termination of this Agreement and the resignation
or removal of Escrow Agent.

13. Warranties.
a. The Investor(s) makes the following representations and warranties to
Escrow Agent:

(i) The Investor(s) has full power and authority to execute and deliver this
Agreement and to perform its obligations hereunder.

(ii) This Agreement has been duly approved by all necessary action of the
Investor(s), including any necessary approval of the limited partner of the
Investor(s) or necessary corporate approval, as applicable, has been
executed by duly authorized officers of the Investor(s), enforceable in
accordance with its terms.

(iii) The execution, delivery, and performance of the Investor(s) of this
Agreement will not violate, conflict with, or cause a default under any
agreement of limited partnership of Investor(s) or the articles of
incorporation or bylaws of the Investor(s) (as applicable), any applicable
law or regulation, any court order or administrative ruling or degree to
which the Investor(s) is a party or any of its property is subject, or any
agreement, contract, indenture, or other binding arrangement.

(iv) Mark Angelo has been duly appointed to act as the representative of the
Investor(s) hereunder and has full power and authority to execute, deliver,
and perform this Escrow Agreement, to execute and deliver any Joint
Written Direction, to amend, modify, or waive any provision of this
Agreement, and to take any and all other actions as the Investor(s)'s
representative under this Agreement, all without further consent or direction
form, or notice to, the Investor(s) or any other party.

(v) No party other than the parties hereto and the Investor(s)s have, or shall
have, any lien, claim or security interest in the Escrow Funds or any part
thereof.  No financing statement under the Uniform Commercial Code is
on file in any jurisdiction claiming a security interest in or describing
(whether specifically or generally) the Escrow Funds or any part thereof.

(vi) All of the representations and warranties of the Investor(s) contained
herein are true and complete as of the date hereof and will be true and
complete at the time of any disbursement from the Escrow Funds.

b. The Company makes the following representations and warranties to the
Escrow Agent:

(i) The Company is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Delaware and has full power
and authority to execute and deliver this Agreement and to perform its
obligations hereunder.

(ii) This Agreement has been duly approved by all necessary corporate
action of the Company, including any necessary shareholder approval, has
been executed by duly authorized officers of the Company, enforceable in
accordance with its terms.

(iii) The execution, delivery, and performance by the Company of this
Agreement is in accordance with the Securities Purchase Agreement and
will not violate, conflict with, or cause a default under the certificate of
incorporation or bylaws of the Company, any applicable law or regulation,
any court order or administrative ruling or decree to which the Company
is a party or any of its property is subject, or any agreement, contract,
indenture, or other binding arrangement, including without limitation to the
Securities Purchase Agreement, to which the Company is a party.

(iv) Kerry P. Gray has been duly appointed to act as the representative of
the Company hereunder and has full power and authority to execute,
deliver, and perform this Agreement, to execute and deliver any Joint
Written Direction, to amend, modify or waive any provision of this
Agreement and to take all other actions as the Company's Representative
under this Agreement, all without further consent or direction from, or
notice to, the Company or any other party.

(v) No party other than the parties hereto and the Investor(s)s have, or shall
have, any lien, claim or security interest in the Escrow Funds or any part
thereof.  No financing statement under the Uniform Commercial Code is
on file in any jurisdiction claiming a security interest in or describing
(whether specifically or generally) the Escrow Funds or any part thereof.

(vi) All of the representations and warranties of the Company contained
herein are true and complete as of the date hereof and will be true and
complete at the time of any disbursement from the Escrow Funds.

14. Consent to Jurisdiction and Venue.  In the event that any party hereto
commences a lawsuit or other proceeding relating to or arising from this
Agreement, the parties hereto agree that the United States District Court for
the District of New Jersey shall have the sole and exclusive jurisdiction
over any such proceeding.  If all such courts lack federal subject matter
jurisdiction, the parties agree that the Superior Court Division of New
Jersey, Chancery Division of Hudson County shall have sole and exclusive
jurisdiction.  Any of these courts shall be proper venue for any such lawsuit
or judicial proceeding and the parties hereto waive any objection to such
venue.  The parties hereto consent to and agree to submit to the jurisdiction
of any of the courts specified herein and agree to accept the service of
process to vest personal jurisdiction over them in any of these courts.

15. Notice.  All notices and other communications hereunder shall be in
writing and shall be deemed to have been validly served, given or delivered
five (5) days after deposit in the United States mails, by certified mail with
return receipt requested and postage prepaid, when delivered personally,
one (1) day delivered to any overnight courier, or when transmitted by
facsimile transmission and upon confirmation of receipt and addressed to
the party to be notified as follows:

If to Investor(s), to: Cornell Capital Partners, LP
101 Hudson Street - Suite 3700
Jersey City, NJ  07302
Attention: Mark Angelo
Portfolio Manager
Telephone: (201) 985-8300
Facsimile:  (201) 985-8266

If to Escrow Agent, to: Troy Rillo, Esq.
101 Hudson Street - Suite 3700
Jersey City, NJ 07302
Telephone: (201) 985-8300
Facsimile: (201) 985-8266

If to the Company, to: Access Pharmaceuticals, Inc.
2600 Stemmons Freeway, Suite 176
Dallas, TX 75207
Attention: Kerry P. Gray
Telephone: (214) 905-5100
Facsimile: (214) 905-5101

With a copy to: Bingham McCutchen LLP
150 Federal Street
Boston, MA 02110-1726
Attention: John J. Concannon, Esq.
Telephone: (617) 951-8874
Facsimile: (617) 951-8736

Or to such other address as each party may designate for itself by like
notice.

16. Amendments or Waiver.  This Agreement may be changed, waived,
discharged or terminated only by a writing signed by the parties hereto.  No
delay or omission by any party in exercising any right with respect hereto
shall operate as waiver.  A waiver on any one occasion shall not be
construed as a bar to, or waiver of, any right or remedy on any future
occasion.

17. Severability.  To the extent any provision of this Agreement is
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition, or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.

18. Governing Law.  This Agreement shall be construed and interpreted in
accordance with the internal laws of the State of New Jersey without giving
effect to the conflict of laws principles thereof.

19. Entire Agreement.  This Agreement constitutes the entire Agreement
between the parties relating to the holding, investment, and disbursement
of the Escrow Funds and sets forth in their entirety the obligations and
duties of the Escrow Agent with respect to the Escrow Funds.

20. Binding Effect.  All of the terms of this Agreement, as amended from
time to time, shall be binding upon, inure to the benefit of and be
enforceable by the respective heirs, successors and assigns of the
Investor(s), the Company, or the Escrow Agent.

21. Execution of Counterparts.  This Agreement and any Joint Written
Direction may be executed in counter parts, which when so executed shall
constitute one and same agreement or direction.

22. Termination.  Upon the first to occur of the disbursement of all
amounts in the Escrow Funds pursuant to Joint Written Directions or the
disbursement of all amounts in the Escrow Funds into court pursuant to
Section 7 hereof, this Agreement shall terminate and Escrow Agent shall
have no further obligation or liability whatsoever with respect to this
Agreement or the Escrow Funds.


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


IN WITNESS WHEREOF the parties have hereunto set their hands and
seals the day and year above set forth.

ACCESS PHARMACEUTICALS, INC.

By: /s/ Kerry Gray
Name: Kerry Gray
Title: Chief Executive Officer

CORNELL CAPITAL PARTNERS, LP

By: Yorkville Advisors, LLC
Its: General Partner

By: /s/ Mark Angelo
Name: Mark Angelo
Its: Portfolio Manager


HIGHGATE HOUSE FUNDS, LTD.

By: Yorkville Advisors, LLC
Its: General Partner

By: /s/ Mark Angelo
Name: Mark Angelo
Title: Portfolio Manager

By: /s/ David Gonzalez
Name: David Gonzalez, Esq.

EX-10.34

Exhibit 10.34

                       REGISTRATION RIGHTS AGREEMENT

REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
March 30, 2005 by and between ACCESS PHARMACEUTICALS, INC.,
a Delaware corporation (the "Company"), and CORNELL CAPITAL
PARTNERS, LP, a Delaware limited partnership (the "Investor").

WHEREAS:

A. In connection with the Standby Equity Distribution Agreement by and
between the parties hereto of even date herewith (the "Standby Equity
Distribution Agreement"), the Company has agreed, upon the terms and
subject to the conditions of the Standby Equity Distribution Agreement, to
issue and sell to the Investor that number of shares of the Company's
common stock, par value $0.01 per share (the "Common Stock"), which
can be purchased pursuant to the terms of the Standby Equity Distribution
Agreement for an aggregate purchase price of up to Fifteen Million
Dollars ($15,000,000).  Capitalized terms not defined herein shall have the
meaning ascribed to them in the Standby Equity Distribution Agreement.

B. To induce the Investor to execute and deliver the Standby Equity
Distribution Agreement, the Company has agreed to provide certain
registration rights under the Securities Act of 1933, as amended, and the
rules and regulations thereunder, or any similar successor statute
(collectively, the "Securities Act"), and applicable state securities laws.

NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company
and the Investor hereby agree as follows:

1. DEFINITIONS.

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

a. "Person" means a corporation, a limited liability company, an
association, a partnership, an organization, a business, an individual, a
governmental or political subdivision thereof or a governmental agency.

b."Register," "registered," and "registration" refer to a registration effected
by preparing and filing one or more Registration Statements (as defined
below) in compliance with the Securities Act and pursuant to Rule 415
under the Securities Act or any successor rule providing for offering
securities on a continuous or delayed basis ("Rule 415"), and the
declaration or ordering of effectiveness of such Registration Statement(s) by
the United States Securities and Exchange Commission (the "SEC").

c. "Registrable Securities" means the Investor's Shares, as defined in the
Standby Equity Distribution Agreement and shares of Common Stock
issuable to Investors pursuant to the Standby Equity Distribution
Agreement.

d. "Registration Statement" means a registration statement under the
Securities Act which covers the Registrable Securities.

2. REGISTRATION.
a. Mandatory Registration.  The Company shall prepare and file with the
SEC a Registration Statement on Form S-3, S-1, SB-2 or on such other
form as is available.  The Company shall cause such Registration Statement
to be declared effective by the SEC prior to the first sale to the Investor of
the Company's Common Stock pursuant to the Standby Equity Distribution
Agreement.

b. Sufficient Number of Shares Registered.  In the event the number of
shares available under a Registration Statement filed pursuant to Section
2(a) is insufficient to cover all of the Registrable Securities which the
Investor has purchased pursuant to the Standby Equity Distribution
Agreement, the Company shall amend the Registration Statement, or file a
new Registration Statement (on the short form available therefore, if
applicable), or both, so as to cover all of such Registrable Securities which
the Investor has purchased pursuant to the Standby Equity Distribution
Agreement as soon as practicable, but in any event not later than fifteen
(15) days after the necessity therefore arises.  The Company shall use it
best efforts to cause such amendment and/or new Registration Statement to
become effective as soon as practicable following the filing thereof.  For
purposes of the foregoing provision, the number of shares available under
a Registration Statement shall be deemed "insufficient to cover all of the
Registrable Securities" if at any time the number of Registrable Securities
issuable on an Advance Notice Date is greater than the number of shares
available for resale under such Registration Statement.

3. RELATED OBLIGATIONS.
a. The Company shall keep the Registration Statement effective pursuant to
Rule 415 at all times until the date on which the Investor shall have sold all
the Registrable Securities covered by such Registration Statement or until
all shared covered by the Registration Statement may be sold pursuant to
Rule 144(k) (the "Registration Period"), which Registration Statement
(including any amendments or supplements thereto and prospectuses
contained therein) shall not contain any 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, in light of the circumstances in which they
were made, not misleading.

b. During the Registration Period, the Company shall prepare and file with
the SEC such amendments (including post-effective amendments) and
supplements to a Registration Statement and the prospectus used in
connection with such Registration Statement, which prospectus is to be filed
pursuant to Rule 424 promulgated under the Securities Act, as may be
necessary to keep such Registration Statement effective at all times during
the Registration Period, and, during such period, comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities of the Company covered by such Registration
Statement until such time as all of such Registrable Securities shall have
been disposed of in accordance with the intended methods of disposition by
the seller or sellers thereof as set forth in such Registration Statement.  In
the case of amendments and supplements to a Registration Statement which
are required to be filed pursuant to this Agreement (including pursuant to
this Section 3(b)) by reason of the Company's filing a report on Form 10-K
or 10-KSB, Form 10-QSB or 10-Q, or Form 8-K or any analogous report
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), the Company shall have incorporated such report by reference into
the Registration Statement, if applicable, or, if required by law, shall, if
required by law, rule or regulation, file such amendments or supplements
with the SEC on the same day on which the Exchange Act report is filed
which created the requirement for the Company to amend or supplement the
Registration Statement.

c. The Company shall furnish to the Investor without charge, (i) at least one
copy of such Registration Statement as declared effective by the SEC and
any amendment(s) thereto, including financial statements and schedules, all
documents incorporated therein by reference, all exhibits and each
preliminary prospectus, (ii) ten (10) copies of the final prospectus included
in such Registration Statement and all amendments and supplements thereto
(or such other number of copies as such Investor may reasonably request)
and (iii) such other documents as such Investor may reasonably request
from time to time in order to facilitate the disposition of the Registrable
Securities owned by such Investor.

d. The Company shall use its best efforts to (i) register and qualify the
Registrable Securities covered by a Registration Statement under such other
securities or "blue sky" laws of such jurisdictions in the United States as the
Investor reasonably requests, (ii) prepare and file in those jurisdictions,
such amendments (including post-effective amendments) and supplements
to such registrations and qualifications as may be necessary to maintain the
effectiveness thereof during the Registration Period, (iii) take such other
actions as may be necessary to maintain such registrations and qualifications
in effect at all times during the Registration Period, and (iv) take all other
actions reasonably necessary or advisable to qualify the Registrable
Securities for sale in such jurisdictions; provided, however, that the
Company shall not be required in connection therewith or as a condition
thereto to (w) make any change to its certificate of incorporation or by-
laws, (x) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(d), (y) subject itself
to general taxation in any such jurisdiction, or (z) file a general consent to
service of process in any such jurisdiction.  The Company shall promptly
notify the Investor of the receipt by the Company of any notification with
respect to the suspension of the registration or qualification of any of the
Registrable Securities for sale under the securities or "blue sky" laws of any
jurisdiction in the United States or its receipt of actual notice of the
initiation or threat of any proceeding for such purpose.

e. As promptly as practicable after becoming aware of such event or
development, the Company shall notify the Investor in writing of the
happening of any event as a result of which the prospectus included in a
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omission to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (provided that
in no event shall such notice contain any material, nonpublic information),
and promptly prepare a supplement or amendment to such Registration
Statement to correct such untrue statement or omission, and deliver ten (10)
copies of such supplement or amendment to each Investor.  Notwithstanding
any provision of this Agreement to the contrary, if the Company makes
such a notification, the Company may suspend the use of any prospectus
contained in any Registration Statement for periods not to exceed forty five
(45) business days in any three month period or two periods not to exceed
an aggregate of ninety (90) business days in any 12 month period in the
event that the Company determines, in the exercise of its reasonable
discretion, after consultation with outside legal counsel, that sales of
Registrable Securities thereunder could constitute violations of the Securities
Act due to the Registration Statement containing an untrue statement of a
material fact or omission to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.  In each case
the Company shall use commercially reasonable efforts to remedy the
deficiency in the Registration Statement within thirty (30) business days.
The Company shall also promptly notify the Investor in writing (i) when a
prospectus or any prospectus supplement or post-effective amendment has
been filed, and when a Registration Statement or any post-effective
amendment has become effective (notification of such effectiveness shall be
delivered to the Investor by facsimile on the same day of such
effectiveness), (ii) of any request by the SEC for amendments or
supplements to a Registration Statement or related prospectus or related
information, and (iii) of the Company's reasonable determination that a
post-effective amendment to a Registration Statement would be appropriate.

f. The Company shall use commercially reasonable efforts to prevent the
issuance of any stop order or other suspension of effectiveness of a
Registration Statement, or the suspension of the qualification of any of the
Registrable Securities for sale in any jurisdiction within the United States
of America and, if such an order or suspension is issued, to obtain the
withdrawal of such order or suspension at the earliest possible moment and
to notify the Investor of the issuance of such order and the resolution
thereof or its receipt of actual notice of the initiation or threat of any
proceeding for such purpose.

g. At the reasonable request of the Investor, the Company shall furnish to
the Investor, on the date of the effectiveness of the Registration Statement
and thereafter from time to time on such dates as the Investor may
reasonably request in connection with an underwritten offering (i) a letter,
dated such date, from the Company's independent certified public
accountants in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public
offering, and (ii) an opinion, dated as of such date, of counsel representing
the Company for purposes of such Registration Statement, in form, scope
and substance as is customarily given in an underwritten public offering,
addressed to the Investor, provided, however, that no "10b-5 opinion" shall
be included in any such opinion.

h. The Company shall make available for inspection by (i) the Investor and
(ii) one firm of accountants or other agents retained by the Investor
(collectively, the "Inspectors") all pertinent financial and other records, and
pertinent corporate documents and properties of the Company (collectively,
the "Records"), as shall be reasonably deemed necessary by each Inspector,
and cause the Company's officers, directors and employees to supply all
information which any Inspector may reasonably request; provided,
however, that each Inspector shall agree, and the Investor hereby agrees,
to hold in strict confidence and shall not make any disclosure (except to an
Investor) or use of any Record or other information which the Company
determines in good faith to be confidential, and of which determination the
Inspectors are so notified, unless (a) the disclosure of such Records is
necessary to avoid or correct a misstatement or omission in any Registration
Statement or is otherwise required under the Securities Act, (b) the release
of such Records is ordered pursuant to a final, non-appealable subpoena or
order from a court or government body of competent jurisdiction, or (c) the
information in such Records has been made generally available to the public
other than by disclosure in violation of this or any other agreement of
which the Inspector and the Investor has knowledge.  The Investor agrees
that it shall, upon learning that disclosure of such Records is sought in or
by a court or governmental body of competent jurisdiction or through other
means, give prompt notice to the Company and allow the Company, at its
expense, to undertake appropriate action to prevent disclosure of, or to
obtain a protective order for, the Records deemed confidential.

i. The Company shall hold in confidence and not make any disclosure of
information concerning the Investor provided to the Company unless (i)
disclosure of such information is necessary to comply with federal or state
securities laws, (ii) the disclosure of such information is necessary to avoid
or correct a misstatement or omission in any Registration Statement, (iii)
the release of such information is ordered pursuant to a subpoena or other
final, non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to
the public other than by disclosure in violation of this Agreement or any
other agreement.  The Company agrees that it shall, upon learning that
disclosure of such information concerning the Investor is sought in or by a
court or governmental body of competent jurisdiction or through other
means, give prompt written notice to the Investor and allow the Investor,
at the Investor's expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, such information.

j. The Company shall use its best efforts either to cause all the Registrable
Securities covered by a Registration Statement (i) to be listed on each
securities exchange on which securities of the same class or series issued
by the Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange or to secure
the inclusion for quotation on the National Association of Securities
Dealers, Inc. OTC Bulletin Board for such Registrable Securities.  The
Company shall pay all fees and expenses in connection with satisfying its
obligation under this Section 3(j).

k. The Company shall cooperate with the Investor to the extent applicable,
to facilitate the timely preparation and delivery of certificates (not bearing
any restrictive legend) representing the Registrable Securities to be offered
pursuant to a Registration Statement and enable such certificates to be in
such denominations or amounts, as the case may be, as the Investor may
reasonably request and registered in such names as the Investor may
request.

l. The Company shall use its best efforts to cause the Registrable Securities
covered by the applicable Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be
necessary to consummate the disposition of such Registrable Securities.

m. The Company shall make generally available to its security holders as
soon as practical, but not later than ninety (90) days after the close of the
period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 under the Securities Act) covering a twelve-month
period beginning not later than the first day of the Company's fiscal quarter
next following the effective date of the Registration Statement.

n. The Company shall otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC in connection with any
registration hereunder.

o. Within two (2) business days after a Registration Statement which covers
Registrable Securities is ordered effective by the SEC, the Company shall
deliver, and shall cause legal counsel for the Company to deliver, to the
transfer agent for such Registrable Securities (with copies to the Investor)
confirmation that such Registration Statement has been declared effective
by the SEC in the form attached hereto as Exhibit A.

p. The Company shall take all other reasonable actions necessary to
expedite and facilitate disposition by the Investor of Registrable Securities
pursuant to a Registration Statement.

4. OBLIGATIONS OF THE INVESTOR.
(a) The Investor agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 3(f) or the
first sentence of 3(e), the Investor will immediately discontinue disposition
of Registrable Securities pursuant to any Registration Statement(s) covering
such Registrable Securities until the Investor's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(e) or
receipt of notice that no supplement or amendment is required.
Notwithstanding anything to the contrary, the Company shall cause its
transfer agent to deliver unlegended certificates for shares of Common
Stock to a transferee of the Investor in accordance with the terms of the
Standby Equity Distribution Agreement in connection with any sale of
Registrable Securities with respect to which the Investor has entered into a
contract for sale prior to the Investor's receipt of a notice from the
Company of the happening of any event of the kind described in Section
3(f) or the first sentence of 3(e) and for which the Investor has not yet
settled.

(b) Each Investor shall provide the Company with written information
concerning the Investor necessary for inclusion in the Registration
Statement.

5. EXPENSES OF REGISTRATION.
All expenses incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without limitation,
all registration, listing and qualifications fees, printers, legal and
accounting fees shall be paid by the Company.

6. INDEMNIFICATION.
With respect to Registrable Securities which are included in a Registration
Statement under this Agreement:

a. To the fullest extent permitted by law, the Company will, and hereby
does, indemnify, hold harmless and defend the Investor, the directors,
officers, partners, employees, agents, representatives of, and each Person,
if any, who controls the Investor within the meaning of the Securities Act
or the Exchange Act (each, an "Indemnified Person"), against any losses,
claims, damages, liabilities, judgments, fines, penalties, charges, costs,
reasonable attorneys' fees, amounts paid in settlement or expenses, joint or
several (collectively, "Claims") incurred in investigating, preparing or
defending any action, claim, suit, inquiry, proceeding, investigation or
appeal taken from the foregoing by or before any court or governmental,
administrative or other regulatory agency, body or the SEC, whether
pending or threatened, whether or not an indemnified party is or may be a
party thereto ("Indemnified Damages"), to which any of them may become
subject insofar as such Claims (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based
upon: (i) any untrue statement or alleged untrue statement of a material fact
in a Registration Statement or any post-effective amendment thereto or in
any filing made in connection with the qualification of the offering under
the securities or other "blue sky" laws of any jurisdiction in which
Registrable Securities are offered ("Blue Sky Filing"), or the omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
final prospectus (as amended or supplemented, if the Company files any
amendment thereof or supplement thereto with the SEC) or the omission or
alleged omission to state therein any material fact necessary to make the
statements made therein, in light of the circumstances under which the
statements therein were made, not misleading; or (iii) any violation or
alleged violation by the Company of the Securities Act, the Exchange Act,
any other law, including, without limitation, any state securities law, or any
rule or regulation there under relating to the offer or sale of the Registrable
Securities pursuant to a Registration Statement (the matters in the foregoing
clauses (i) through (iii) being, collectively, "Violations").  The Company
shall reimburse the Investor and each such controlling person promptly as
such expenses are incurred and are due and payable, for any legal fees or
disbursements or other reasonable expenses incurred by them in connection
with investigating or defending any such Claim.  Notwithstanding anything
to the contrary contained herein, the indemnification agreement contained
in this Section 6(a): (x) shall not apply to a Claim by an Indemnified Person
arising out of or based upon a Violation which occurs in reliance upon and
in conformity with information furnished in writing to the Company by such
Indemnified Person expressly for use in connection with the preparation of
the Registration Statement or any such amendment thereof or supplement
thereto; (y) shall not be available to the extent such Claim (i) is based on
a failure of the Investor to deliver or to cause to be delivered the prospectus
made available by the Company, if such prospectus was timely made
available by the Company pursuant to Section 3(e) or (ii) is based on the
delivery of a defective prospectus after the Investor has been given written
notice that such prospectus is defective; and (z) shall not apply to amounts
paid in settlement of any Claim if such settlement is effected without the
prior written consent of the Company, which consent shall not be
unreasonably withheld.  Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Indemnified
Person.

b. In connection with a Registration Statement, the Investor agrees to
indemnify, hold harmless and defend, to the same extent and in the same
manner as is set forth in Section 6(a), the Company, each of its directors,
each of its officers who signs the Registration Statement and each Person,
if any, who controls the Company within the meaning of the Securities Act
or the Exchange Act (each an "Indemnified Party"), against any Claim or
Indemnified Damages to which any of them may become subject, under the
Securities Act, the Exchange Act or otherwise, insofar as such Claim or
Indemnified Damages arise out of or is based upon any Violation, in each
case to the extent, and only to the extent, that such Violation is a result of
any action described in Section 6(a)(x)-(z); and, subject to Section 6(d), the
Investor will reimburse any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such Claim;
provided, however, that the indemnity agreement contained in this Section
6(b) and the agreement with respect to contribution contained in Section 7
shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of the Investor,
which consent shall not be unreasonably withheld; provided, further,
however, that the Investor shall be liable under this Section 6(b) for only
that amount of a Claim or Indemnified Damages as does not exceed the net
proceeds to the Investor as a result of the sale of Registrable Securities
pursuant to such Registration Statement.  Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf
of such Indemnified Party.  Notwithstanding anything to the contrary
contained herein, the indemnification agreement contained in this Section
6(b) with respect to any prospectus shall not inure to the benefit of any
Indemnified Party if the untrue statement or omission of material fact
contained in the prospectus was corrected and such new prospectus was
delivered to the Investor prior to the Investor's use of the prospectus to
which the Claim relates.

c. Promptly after receipt by an Indemnified Person or Indemnified Party
under this Section 6 of notice of the commencement of any action or
proceeding (including any governmental action or proceeding) involving a
Claim, such Indemnified Person or Indemnified Party shall, if a Claim in
respect thereof is to be made against any indemnifying party under this
Section 6, deliver to the indemnifying party a written notice of the
commencement thereof, and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume control of
the defense thereof with counsel mutually satisfactory to the indemnifying
party and the Indemnified Person or the Indemnified Party, as the case may
be; provided, however, that an Indemnified Person or Indemnified Party
shall have the right to retain its own counsel with the fees and expenses of
not more than one counsel for such Indemnified Person or Indemnified
Party to be paid by the indemnifying party, if, in the reasonable opinion of
counsel retained by the indemnifying party, the representation by such
counsel of the Indemnified Person or Indemnified Party and the
indemnifying party would be inappropriate due to actual or potential
differing  interests between such Indemnified Person or Indemnified Party
and any other party represented by such counsel in such proceeding. The
Indemnified Party or Indemnified Person shall cooperate fully with the
indemnifying party in connection with any negotiation or defense of any
such action or claim by the indemnifying party and shall furnish to the
indemnifying party all information reasonably available to the Indemnified
Party or Indemnified Person which relates to such action or claim.  The
indemnifying party shall keep the Indemnified Party or Indemnified Person
fully apprised at all times as to the status of the defense or any settlement
negotiations with respect thereto.  No indemnifying party shall be liable for
any settlement of any action, claim or proceeding effected without its prior
written consent, provided, however, that the indemnifying party shall not
unreasonably withhold, delay or condition its consent.  No indemnifying
party shall, without the prior written consent of the Indemnified Party or
Indemnified Person, consent to entry of any judgment or enter into any
settlement or other compromise which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnified
Party or Indemnified Person of a release from all liability in respect to such
claim or litigation.  Following indemnification as provided for hereunder,
the indemnifying party shall be subrogated to all rights of the Indemnified
Party or Indemnified Person with respect to all third parties, firms or
corporations relating to the matter for which indemnification has been
made.  The failure to deliver written notice to the indemnifying party within
a reasonable time of the commencement of any such action shall not relieve
such indemnifying party of any liability to the Indemnified Person or
Indemnified Party under this Section 6, except to the extent that the
indemnifying party is prejudiced in its ability to defend such action.

d. The indemnification required by this Section 6 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as and when bills are received or Indemnified Damages are
incurred.

e. The indemnity agreements contained herein shall be in addition to (i) any
cause of action or similar right of the Indemnified Party or Indemnified
Person against the indemnifying party or others, and (ii) any liabilities the
indemnifying party may be subject to pursuant to the law.

7. CONTRIBUTION.
To the extent any indemnification by an indemnifying party is prohibited or
limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be
liable under Section 6 to the fullest extent permitted by law; provided,
however, that: (i) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any seller of Registrable Securities
who was not guilty of fraudulent misrepresentation; and (ii) contribution by
any seller of Registrable Securities shall be limited in amount to the net
amount of proceeds received by such seller from the sale of such
Registrable Securities.

8. REPORTS UNDER THE EXCHANGE ACT.
With a view to making available to the Investor the benefits of Rule 144
promulgated under the Securities Act or any similar rule or regulation of
the SEC that may at any time permit the Investors to sell securities of the
Company to the public without registration ("Rule 144") during the
Registration Period the Company agrees to:

a. make and keep public information available, as those terms are
understood and defined in Rule 144;

b. file with the SEC in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act so
long as the Company remains subject to such requirements (it being
understood that nothing herein shall limit the Company's obligations under
Section 6.3 of the Standby Equity Distribution Agreement) and the filing of
such reports and other documents is required for the applicable provisions
of Rule 144; and

c. furnish to the Investor so long as the Investor owns Registrable
Securities, promptly upon request, (i) a written statement by the Company
that it has complied with the reporting requirements of Rule 144, the
Securities Act and the Exchange Act, (ii) a copy of the most recent annual
or quarterly report of the Company and such other reports and documents
so filed by the Company, and (iii) such other information as may be
reasonably requested to permit the Investor to sell such securities pursuant
to Rule 144 without registration.

9. AMENDMENT OF REGISTRATION RIGHTS.
Provisions of this Agreement may be amended and the observance thereof
may be waived (either generally or in a particular instance and either
retroactively or prospectively), only by a written agreement between the
Company and the Investor.  Any amendment or waiver effected in
accordance with this Section 9 shall be binding upon the Investor and the
Company.  No consideration shall be offered or paid to any Person to
amend or consent to a waiver or modification of any provision of any of
this Agreement unless the same consideration also is offered to all of the
parties to this Agreement.

10. MISCELLANEOUS.
a. A Person is deemed to be a holder of Registrable Securities whenever
such Person owns or is deemed to own of record such Registrable
Securities.  If the Company receives conflicting instructions, notices or
elections from two or more Persons with respect to the same Registrable
Securities, the Company shall act upon the basis of instructions, notice or
election received from the registered owner of such Registrable Securities.

b. Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in writing
and will be deemed to have been delivered:  (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one business day after deposit
with a nationally recognized overnight delivery service, in each case
properly addressed to the party to receive the same.  The addresses and
facsimile numbers for such communications shall be:

If to the Company, to: Access Pharmaceuticals, Inc.
2600 Stemmons Freeway, Suite 176
Dallas, TX 75207
Attention: Kerry P. Gray
Telephone: (214) 905-5100
Facsimile: (214) 905-5101

With a copy to: Bingham McCutchen LLP
150 Federal Street
Boston, MA 02110-1726
Attention: John J. Concannon, Esq.
Telephone: (617) 951-8874
Facsimile: (617) 951-8736

If to the Investor, to: Cornell Capital Partners, LP
101 Hudson Street - Suite 3700
Jersey City, New Jersey 07302
Attention: Mark Angelo
Portfolio Manager
Telephone: (201) 985-8300
Facsimile: (201) 985-8266

With a copy to: Troy Rillo, Esq.
101 Hudson Street - Suite 3700
Jersey City, NJ 07302
Telephone: (201) 985-8300
Facsimile: (201) 985-8266

Any party may change its address by providing written notice to the other
parties hereto at least five days prior to the effectiveness of such change.
Written confirmation of receipt (A) given by the recipient of such notice,
consent, waiver or other communication, (B) mechanically or electronically
generated by the sender's facsimile machine containing the time, date,
recipient facsimile number and an image of the first page of such
transmission or (C) provided by a courier or overnight courier service shall
be rebuttable evidence of personal service, receipt by facsimile or receipt
from a nationally recognized overnight delivery service in accordance with
clause (i), (ii) or (iii) above, respectively.

c. Failure of any party to exercise any right or remedy
under this Agreement or otherwise, or delay by a party in exercising such
right or remedy, shall not operate as a waiver thereof.

d. The corporate laws of the State of New Jersey shall
govern all issues concerning the relative rights of the Company and the
Investor.  All other questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of New Jersey, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of New
Jersey or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of New Jersey.  Each party hereby
irrevocably submits to the non-exclusive jurisdiction of the Superior Courts
of the State of New Jersey, sitting in Hudson County, New Jersey and the
Federal District Court for the District of New Jersey sitting in Newark,
New Jersey, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein,
and hereby irrevocably waives, and agrees not to assert in any suit, action
or proceeding, any claim that it is not personally subject to the jurisdiction
of any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper.  Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to
serve process in any manner permitted by law.  If any provision of this
Agreement shall be invalid or unenforceable in any jurisdiction, such
invalidity or unenforceability shall not affect the validity or enforceability
of the remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.

EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT
MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR
THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT
OR ANY TRANSACTION CONTEMPLATED HEREBY.

e. This Agreement, the Standby Equity Distribution
Agreement, the Escrow Agreement, and the Placement Agent Agreement
constitute the entire agreement among the parties hereto with respect to the
subject matter hereof and thereof.  There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
and therein.  This Agreement, the Standby Equity Distribution Agreement,
the Escrow Agreement, and the Placement Agent Agreement supersede all
prior agreements and understandings among the parties hereto with respect
to the subject matter hereof and thereof.

f. This Agreement shall inure to the benefit of and be
binding upon the permitted successors and assigns of each of the parties
hereto.

g. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.

h. This Agreement may be executed in identical
counterparts, each of which shall be deemed an original but all of which
shall constitute one and the same agreement.  This Agreement, once
executed by a party, may be delivered to the other party hereto by facsimile
transmission of a copy of this Agreement bearing the signature of the party
so delivering this Agreement.

i. Each party shall do and perform, or cause to be done
and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents,
as the other party may reasonably request in order to carry out the intent
and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.

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

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


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IN WITNESS WHEREOF, the parties have caused this
Registration Rights Agreement to be duly executed as of day and year first
above written.

COMPANY: ACCESS PHARMACEUTICALS, INC.

By:/s/ Kerry P. Gray
Name: Kerry P. Gray
Title:President and Chief Executive Officer

INVESTOR: CORNELL CAPITAL PARTNERS, LP

By:Yorkville Advisors, LLC
Its:General Partner
By:/s/ Mark Angelo
Name:Mark Angelo
Title:Portfolio Manager