Securities Purchase Agreement dated February 29, 2008 between St. George Investments and mPhase Technologies, Inc and Related Documents in connection with $550,000 Convertible Debenture Financing

mPhase Technologies, Inc., a New Jersey corporation ("Company'').

St. George Investments, LLC, a Nevada limited liability company, or an affiliate thereof ("Investor").

1 tranche of 7.50% Convertible Debenture and 3 million restricted shares of Common Stock ("Restricted Stock"). Interest only, on the Convertible Debenture, shall be payable semi-annually, in arrears, commencing 180 days after the Closing Date. Principal outstanding plus any accrued interest shall be due 4 years from Funding Date. The Convertible Debenture and Restricted Stock are paid for by a cash payment of $500,000 (the "Purchase Price"), which Purchase Price shall be allocated as $20,000 for the Restricted Stock and $480,000 for the Convertible Debenture. Payment of $550,000 in principal, plus accrued and unpaid interest, is due at maturity.

Working capital.

The Convertible Debenture is convertible into Common Stock at any time or from time to time by Investor at 75% of the Volume Weighted Average Price ("VWAP") of 3 of the 20 prior trading days (which need not be consecutive). Any portion of a Convertible Debenture that is converted must have been fully paid prior to conversion thereof.

The Company may prepay, in cash, in whole or in part, the Debenture at a cost equal to 110% of the then-outstanding principal amount plus accrued interest; provided, however, that Investor shall have the right to convert all or any portion of the Debenture prior to such prepayment into the Company’ Common Stock.

In no event may Investor own more than 4.99% of the outstanding voting securities of Company. This limitation applies to the conversion of Convertible Debentures, as well as foreclosure of collateral.

The occurrence of certain events will cause an Event of Default to occur. Those events include without limitation:

Non-payment of amounts owed on Secured Debentures, other defaults on transaction documents, misrepresentations or breaches of covenants,

Judgments against Company, or defaults on obligations, in amount of at least $250,000,

Failure of Company to continue to maintain its status as a reporting company or to timely file all reports required to be filed by it with the SEC pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, or otherwise required by the Securities Exchange Act of 1934, or inability of Investor to be permitted to sell shares of Restricted Stock pursuant to Rule 144 from and after the date that is 6 months following the Closing Date.

Halt or suspension of trading in Common Stock,

Failure of the 10-day average dollar volume of shares of Common Stock to be at least $25,000, or

Bankruptcy or insolvency.

Upon occurrence of an Event of Default, 110% of the principal amount then outstanding with respect to the Secured Debenture, together with any accrued and unpaid interest thereon and any other amounts owing, will be immediately due and payable in cash. Upon occurrence of an Event of Default of the type described in section (iii) above, Company immediately will issue to Investor an additional 10 million shares of Common Stock. In addition, following occurrence of an Event of Default, penalty interest of 1% per month will accrue an all amounts due and owing by Company until paid. Following occurrence of an Event of Default, Investor has the right, but not the obligation, to receive payment in shares of Common Stock of Company at the then-market price, calculated at the lowest Volume Weighted Average Price for the 20 trading days prior to the date on which Investor shall make such request.

All such amounts will be applied first to any unpaid costs, interest and principal outstanding on any outstanding Secured Purchase Note, and any amounts remaining owing to Investor will be paid to Investor in cash

The Closing and Funding of the Debenture must occur not later than the close of business on Friday, February 29, 2008, subject to satisfaction of the following three conditions:

None.

This Term Sheet has been prepared for discussion purposes only between Investor and Company. It is an indication of interest only, not an offer to sell or buy securities, and is non-binding on the parties pending execution of a definitive agreement. The information contained herein is confidential and intended only for the person and his or her advisors to whom this memorandum is furnished.

The parties hereby acknowledge their mutual consent to the above terms and their intention to negotiate in good faith the contemplated transaction. This Term Sheet will be considered null and void if it is not executed by both parties by the close of business 7 business days after the date hereof.