EXHIBIT 10(I)

                             SUBSCRIPTION AGREEMENT
                             ----------------------

THIS  SUBSCRIPTION AGREEMENT (this "Agreement"), dated as of December ___, 2003,
by  and  among  Imaging  Technologies  Corporation,  a Delaware corporation (the
"Company"),  and the subscribers identified on the signature page hereto (each a
"Subscriber"  and  collectively  "Subscribers").

WHEREAS,  the  Company  and  the  Subscribers  are executing and delivering this
Agreement in reliance upon an exemption from securities registration afforded by
the  provisions  of  Section 4(2), Section 4(6) and/or Regulation D ("Regulation
D")  as promulgated by the United States Securities and Exchange Commission (the
"SEC")  under  the  Securities  Act  of  1933,  as  amended  (the  "1933  Act").

WHEREAS,  the  parties desire that, upon the terms and subject to the conditions
contained  herein,  the  Company  shall  issue  and  sell to the Subscribers, as
provided  herein,  and  the  Subscribers,  in  the  aggregate,  shall  purchase
$2,000,000  (the  "Purchase Price") of principal amount of 8% secured promissory
notes  of  the  Company  ("Note"  or  "Notes")  convertible  into  shares of the
Company's  common  stock,  $.005  par  value (the "Common Stock") at a per share
conversion  price  equal  to the lesser of $.02, or seventy percent (70%) of the
average  of  the three lowest closing bid prices of the Common Stock as reported
by  Bloomberg  L.P.  for the OTC Bulletin Board ("Bulletin Board") for the sixty
(60)  trading  days preceding, but not including the Conversion Date, as defined
in  Section  7.1(b)  of  this Agreement ("Conversion Price"); and share purchase
warrants (the "Warrants"), in the form attached hereto as EXHIBIT A, to purchase
shares  of  Common Stock (the "Warrant Shares").  Eight Hundred Thousand Dollars
($800,000)  of  the Purchase Price shall be payable on the Initial Closing Date,
as  defined  in  Section 1 hereof ("Initial Closing Purchase Price").  Up to One
Million  Two Hundred Thousand Dollars ($1,200,000) of the Purchase Price will be
payable  within  five  (5) business days after the actual effectiveness ("Actual
Effective Date") of the Registration Statement as defined in Section 11.1(iv) of
this  Agreement  ("Second Closing Purchase Price").  The Notes, shares of Common
Stock issuable upon conversion of the Notes (the "Shares"), the Warrants and the
Warrant  Shares  are  collectively  referred  to herein as the "Securities"; and

WHEREAS,  the  aggregate  proceeds  of  the  sale  of the Notes and the Warrants
contemplated  hereby  shall  be  held in escrow pursuant to the terms of a Funds
Escrow  Agreement  to  be  executed  by  the  parties  substantially in the form
attached  hereto  as  EXHIBIT  B  (the  "Escrow  Agreement").

NOW,  THEREFORE,  in  consideration of the mutual covenants and other agreements
contained  in  this  Agreement  the  Company and the Subscribers hereby agree as
follows:

1.     Initial Closing.   Subject to the satisfaction or waiver of the terms and
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conditions of this Agreement, on the Initial Closing Date, each Subscriber shall
purchase  and  the Company shall sell to each Subscriber a Note in the principal
amount  designated  on the signature page hereto ("Initial Closing Notes").  The
aggregate  amount of the Notes to be purchased by the Subscribers on the Initial
Closing  Date  shall, in the aggregate, be equal to the Initial Closing Purchase
Price.  The  Initial  Closing  Date  shall  be  the  date  that subscriber funds
representing  the  net  amount due the Company from the Initial Closing Purchase
Price of the Offering is transmitted by wire transfer or otherwise to or for the
benefit  of  the  Company.

2.     Second  Closing.
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     (a)     Second  Closing.   The  closing  date  in  relation  to  the Second
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Closing  Purchase  Price  shall be the fifth (5th) business day after the Actual
Effective  Date  (the  "Second  Closing  Date").  Subject to the satisfaction or
waiver of the terms and conditions of this Agreement on the Second Closing Date,
each  Subscriber  shall purchase and the Company shall sell to each Subscriber a
Note  in  the  principal amount designated on the signature page hereto ("Second
Closing  Notes").  The  aggregate Purchase Price of the Second Closing Notes for
all Subscribers shall be equal to the Second Closing Purchase Price.  The Second
Closing Note shall be identical to the Note issuable on the Initial Closing Date
except  that  the maturity date of such Notes shall be three (3) years after the
Second  Closing Date.  The Maximum Base Price (defined in Section 2.1 (6) of the
Note)  shall  be  equitably adjusted to offset the effect of stock splits, stock
dividends,  pro  rata  distributions  of  property  or  equity  interests to the
Company's  shareholders  after  the  Initial  Closing  Date.

     (b)     Conditions  to  Second  Closing.   The  occurrence  of  the  Second
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Closing  is expressly contingent on (i) the truth and accuracy, on the Effective
Date,  Actual  Effective Date and the Second Closing Date of the representations
and  warranties  of the Company and Subscriber contained in this Agreement, (ii)
continued  compliance  with  the  covenants  of  the  Company  set forth in this
Agreement,  (iii)  the non-occurrence of any Event of Default (as defined in the
Note)  or  other  default  by  the  Company  of its obligations and undertakings
contained  in  this  Agreement,  (iv) the delivery on the Second Closing Date of
Second  Closing Notes for which the Company Shares issuable upon conversion have
been  included  in the Registration Statement, which must be effective as of the
Second  Closing  Date,  and  (v) the delivery of the Second Closing Warrants for
which  the  Warrant  Shares  issuable  upon  exercise  have been included in the
Registration  Statement  which  must be effective as of the Second Closing Date

     (c)     Second  Closing  Deliveries.   On  the  Second  Closing  Date,  the
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Company will deliver the Second Closing Notes and Second Closing Warrants to the
Escrow  Agent  and  each  Subscriber  will deliver his portion of the respective
Purchase  Price  to  the  Escrow Agent.  On the Second Closing Date, the Company
will  deliver  a  certificate ("Second Closing Certificate") signed by its chief
operating  officer  or  chief  financial  officer (i) representing the truth and
accuracy of all the representations and warranties made by the Company contained
in  this  Agreement,  as of the Initial Closing Date, the Actual Effective Date,
and the Second Closing Date, as if such representations and warranties were made
and  given  on  all  such  dates, (ii) adopting the covenants and conditions set
forth  in Sections 9, 10, 11, and 12 of this Agreement in relation to the Second
Closing  Notes  and  Second  Closing  Warrants,  (iii)  representing  the timely
compliance by the Company with the Company's registration requirements set forth
in  Section  11  of this Agreement, and (iv) certifying that an Event of Default
has  not  occurred.  A  legal  opinion  nearly  identical  to  the legal opinion
referred  to in Section 6 of this Agreement shall be delivered to the Subscriber
at  the  Second  Closing  in  relation  to  the Company and Second Closing Notes
("Second  Closing  Legal  Opinion").  The Second Closing Legal Opinion must also
state  that  all  of  the  Registerable  Securities  have  been  included  for
registration  in  an effective registration statement effective as of the Actual
Effective  Date  and  Second  Closing  Date.

     (d)     Second  Closing Limitation.  A Second Closing may not take place in
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connection  with that amount of Second Closing Notes which would be in excess of
the  sum  of  (y)  the  number of shares of Common Stock beneficially owned by a
Subscriber  on  the  Second  Closing  Date, and (z) the number of Company Shares
issuable  upon  the  conversion of the Second Closing Note with respect to which
the  determination of this proviso is being made on a Second Closing Date, which
would result in beneficial ownership by the Subscriber of more than 9.99% of the
outstanding  shares  of  Common Stock of the Company on the Second Closing Date.
For  the  purposes  of  the  proviso  to  the  immediately  preceding  sentence,
beneficial ownership shall be determined in accordance with Section 13(d) of the
Securities  Exchange  Act  of 1934, as amended, and Regulation 13d-3 thereunder.
The  Subscriber  may revoke the restriction described in this paragraph upon and
effective after sixty-one (61) days prior notice to the Company.  The Subscriber
shall  have  the  right  to  determine which of the equity of the Company deemed
beneficially  owned  by  the Subscriber shall be included in the 9.99% described
above  and  which  shall  be  allocated  to  the  excess  above  9.99%.

3.     Warrants.  . On each Closing Date, the Company will issue Warrants to the
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Subscribers.  Twenty  (20)  Warrants  will be issued for each One Dollar ($1.00)
Initial  Purchase  Price  and  Second Closing Purchase Price paid on the Initial
Closing  Date  and  Second Closing Date, respectively.  The Warrants issuable on
the  Initial  Closing  Date  are  referred  to as Initial Closing Warrants.  The
Warrants  issuable  on the Second Closing Date are referred to as Second Closing
Warrants.  The  per Warrant Share exercise price to acquire a Warrant Share upon
exercise of a Warrant shall be One Hundred and Ten Percent (110%) of the closing
price  of  the  Common  Stock as reported by Bloomberg L.P. for the OTC Bulletin
Board  ("Bulletin  Board")  for  the  trading  day immediately preceding but not
including  the Initial Closing Date.  Collectively, the Initial Closing Warrants
and  Second  Closing  Warrants  are  referred to herein as Warrants.  The Common
Stock  issuable upon exercise of the Initial Closing Warrants and Second Closing
Warrants  is  referred  to  herein  as  "Warrant Shares".  The Warrants shall be
exercisable for five (5) years after the Initial Closing Date and Second Closing
Date,  respectively.  The exercise price of the Second Closing Warrants issuable
shall  be  equitably  adjusted  to  offset  the  effect  of  stock splits, stock
dividends,  pro  rata  distributions  of  property  or  equity  interests to the
Company's  shareholders,  occurring  after the Initial Closing Date.  The entire
Purchase  Price  shall  be  deemed  allocated  to  the  Common  Stock.

4.     Subscriber's  Representations  and  Warranties.  Each  Subscriber  hereby
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represents  and  warrants  to  and agrees with the Company as to such Subscriber
that:

(a)     Information  on Company.   The Subscriber has been furnished with or has
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obtained  from  the EDGAR Website of the Securities and Exchange Commission (the
"Commission")  the Company's Form 10-K for the year ended June 30, 2003 as filed
with  the  Commission, together with all subsequently filed Forms 10-Q, 8-K, and
filings  made  with  the  Commission available at the EDGAR website (hereinafter
referred  to  collectively  as  the "Reports").  In addition, the Subscriber has
received  in  writing  from  the  Company  such other information concerning its
operations,  financial  condition  and  other  matters  as  the  Subscriber  has
requested in writing (such other information is collectively, the "Other Written
Information"),  and  considered  all  factors  the  Subscriber deems material in
deciding  on  the  advisability  of  investing  in  the  Securities.

(b)     Information  on  Subscriber.  The Subscriber is, and will be at the time
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of  the  conversion  of  the  Notes  and  exercise  of  any  of the Warrants, an
"accredited  investor",  as  such term is defined in Regulation D promulgated by
the Commission under the Securities Act of 1933, as amended (the "1933 Act"), is
experienced  in  investments  and  business  matters,  has made investments of a
speculative  nature and has purchased securities of United States publicly-owned
companies  in  private placements in the past and, with its representatives, has
such knowledge and experience in financial, tax and other business matters as to
enable  the  Subscriber to utilize the information made available by the Company
to  evaluate the merits and risks of and to make an informed investment decision
with  respect  to  the  proposed  purchase,  which  represents  a  speculative
investment.  The  Subscriber has the authority and is duly and legally qualified
to  purchase and own the Securities.  The Subscriber is able to bear the risk of
such  investment for an indefinite period and to afford a complete loss thereof.
The  information set forth on the signature page hereto regarding the Subscriber
is  accurate.

(c)     Purchase  of  Notes  and Warrants.  On each closing date, the Subscriber
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will purchase the Notes and/or Warrants as principal for its own account and not
with  a  view  to  any  distribution  thereof.

(d)     Compliance  with  Securities Act.  The Subscriber understands and agrees
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that  the  Securities  have  not  been  registered  under  the  1933  Act or any
applicable  state  securities laws, by reason of their issuance in a transaction
that  does  not  require  registration  under the 1933 Act (based in part on the
accuracy  of the representations and warranties of Subscriber contained herein),
and  that  such  Securities  must  be  held  indefinitely  unless  a  subsequent
disposition  is registered under the 1933 Act or any applicable state securities
laws  or  is  exempt  from  such  registration.   In  any  event, and subject to
compliance  with  applicable  securities  laws,  the  Subscriber  may enter into
hedging transactions with third parties, which may in turn engage in short sales
of  the  Securities  in  the  course of hedging the position they assume and the
Subscriber  may also enter into short positions or other derivative transactions
relating  to  the  Securities,  or  interests in the Securities, and deliver the
Securities,  or  interests  in the Securities, to close out their short or other
positions  or  otherwise  settle  short  sales or other transactions, or loan or
pledge  the Securities, or interests in the Securities, to third parties that in
turn  may  dispose  of  these  Securities.

(b)     Shares  Legend.  The  Shares  and  the  Warrant  Shares  shall  bear the
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following  or  similar  legend:
(c)
"THE  SHARES  REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES  ACT  OF 1933, AS AMENDED.  THESE SHARES MAY NOT BE SOLD, OFFERED FOR
SALE,  PLEDGED  OR  HYPOTHECATED  IN  THE  ABSENCE  OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAW OR AN
OPINION  OF  COUNSEL REASONABLY SATISFACTORY TO IMAGING TECHNOLOGIES CORPORATION
THAT  SUCH  REGISTRATION  IS  NOT  REQUIRED."

(f)     Warrants  Legend.  The  Warrants  shall  bear  the  following or similar
        ----------------
legend:

"THIS  WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
NOT  BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THIS WARRANT
AND  THE  COMMON  SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD,
OFFERED  FOR  SALE,  PLEDGED  OR  HYPOTHECATED  IN  THE  ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID ACT OR ANY APPLICABLE STATE
SECURITIES  LAW  OR  AN  OPINION  OF  COUNSEL REASONABLY SATISFACTORY TO IMAGING
TECHNOLOGIES  CORPORATION  THAT  SUCH  REGISTRATION  IS  NOT  REQUIRED."

(g)     Note  Legend.  The  Note  shall  bear  the  following  legend:
        ------------

"THIS  NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THIS NOTE AND THE
COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR
SALE,  PLEDGED  OR  HYPOTHECATED  IN  THE  ABSENCE  OF AN EFFECTIVE REGISTRATION
STATEMENT  AS  TO  THIS  NOTE UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY  TO  IMAGING TECHNOLOGIES CORPORATION THAT SUCH REGISTRATION IS NOT
REQUIRED."

(h)     Communication  of  Offer.  The offer to sell the Securities was directly
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communicated  to  the  Subscriber by the Company.  At no time was the Subscriber
presented with or solicited by any leaflet, newspaper or magazine article, radio
or  television  advertisement,  or  any  other  form  of  general advertising or
solicited  or  invited  to  attend  a  promotional  meeting  otherwise  than  in
connection  and  concurrently  with  such  communicated  offer.

(i)     Authority;  Enforceability.  This  Agreement  and  other  agreements
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delivered  together with this Agreement or in connection herewith have been duly
authorized,  executed  and delivered by the Subscriber and are valid and binding
agreements  enforceable  in  accordance with their terms, subject to bankruptcy,
insolvency,  fraudulent transfer, reorganization, moratorium and similar laws of
general  applicability  relating to or affecting creditors' rights generally and
to  general  principles  of  equity; and Subscriber has full corporate power and
authority  necessary  to enter into this Agreement and such other agreements and
to perform its obligations hereunder and under all other agreements entered into
by  the  Subscriber  relating  hereto.

(j)     Correctness  of  Representations.  Each Subscriber represents as to such
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Subscriber  that  the  foregoing  representations  and  warranties  are true and
correct  as  of  the date hereof and will be true and correct as of each closing
date and unless a Subscriber otherwise notifies the Company prior to any closing
date,  shall  be  true  and  correct  as  of  such closing dates.  The foregoing
representations  and  warranties  shall  survive  the  Second Closing Date for a
period  of  three  (3)  years.

5.     Company  Representations  and  Warranties.  The  Company  represents  and
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warrants  to  and  agrees  with  each  Subscriber  that:

(a)     Due  Incorporation.  The  Company  and  each  of  its  subsidiaries is a
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corporation duly organized, validly existing and in good standing under the laws
of  the  respective  jurisdictions of their incorporation and have the requisite
corporate  power  to  own their properties and to carry on their business as now
being  conducted.  The Company and each of its subsidiaries is duly qualified as
a  foreign  corporation  to  do  business  and  is  in  good  standing  in  each
jurisdiction  where the nature of the business conducted or property owned by it
makes  such qualification necessary, other than those jurisdictions in which the
failure  to so qualify would not have a material adverse effect on the business,
operations  or  financial  condition  of  the  Company.

(b)     Outstanding  Stock.  All  issued and outstanding shares of capital stock
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of the Company and each of its subsidiaries has been duly authorized and validly
issued  and  are  fully  paid  and  non-assessable.

(c)     Authority; Enforceability.  This Agreement, the Notes, the Warrants, the
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Escrow Agreement and any other agreements delivered together with this Agreement
or  in  connection herewith have been duly authorized, executed and delivered by
the  Company and are valid and binding agreements enforceable in accordance with
their  terms,  subject  to  bankruptcy,  insolvency,  fraudulent  transfer,
reorganization, moratorium and similar laws of general applicability relating to
or  affecting  creditors'  rights generally and to general principles of equity;
and  the  Company has full corporate power and authority necessary to enter into
this  Agreement,  the  Notes,  the Warrants, the Escrow Agreement and such other
agreements  delivered together with this Agreement or in connection herewith and
to perform its obligations hereunder and under all other agreements entered into
by  the  Company  relating  hereto.

(d)     Additional  Issuances.   There  are  no  outstanding  agreements  or
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preemptive  or similar rights affecting the Company's common stock or equity and
        -
no  outstanding  rights,  warrants  or  options  to  acquire,  or  instruments
convertible  into  or  exchangeable  for,  or  agreements or understandings with
respect  to  the sale or issuance of any shares of common stock or equity of the
Company  or  other  equity  interest  in  any of the subsidiaries of the Company
except  as  described  on  Schedule  5(d),  or  the  Reports.

(e)     Consents.  No  consent,  approval,  authorization or order of any court,
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governmental  agency or body or arbitrator having jurisdiction over the Company,
or  any  of  its  affiliates,  the  Amex, the National Association of Securities
Dealers, Inc., NASDAQ, SmallCap Market, the OTC Bulletin Board nor the Company's
Shareholders  is required for the execution and compliance by the Company of its
obligations under this Agreement, and all other agreements entered into or to be
entered  into by the Company relating hereto, including, without limitation, the
issuance  and  sale  of  the  Securities,  and  the performance of the Company's
obligations  hereunder  and  under  all  such  other  agreements.

(f)     No  Violation  or Conflict.  Assuming the representations and warranties
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of  the  Subscribers in Section 4 are true and correct, neither the issuance nor
sale  of  the  Securities nor the performance of the Company's obligations under
this  Agreement  and  all  other agreements entered into by the Company relating
thereto  by  the  Company  will:

(i)     violate,  conflict  with, result in a breach of, or constitute a default
(or  an event which with the giving of notice or the lapse of time or both would
be  reasonably  likely  to  constitute  a  default)  under  (A)  the articles of
incorporation, charter or bylaws of the Company, (B) to the Company's knowledge,
any  decree,  judgment,  order,  law,  treaty, rule, regulation or determination
applicable  to  the  Company  of  any  court,  governmental  agency  or body, or
arbitrator  having  jurisdiction  over the Company or any of its subsidiaries or
over  the  properties or assets of the Company or any of its affiliates, (C) the
terms of any bond, debenture, note or any other evidence of indebtedness, or any
agreement,  stock option or other similar plan, indenture, lease, mortgage, deed
of  trust  or  other instrument to which the Company or any of its affiliates or
subsidiaries  is  a  party,  by  which  the  Company or any of its affiliates or
subsidiaries  is  bound, or to which any of the properties of the Company or any
of  its affiliates or subsidiaries is subject, or (D) the terms of any "lock-up"
or  similar  provision  of  any  underwriting  or similar agreement to which the
Company,  or  any  of  its  affiliates  or  subsidiaries  is  a party except the
violation,  conflict,  breach,  or  default  of  which would not have a material
adverse  effect  on  the  Company;  or

(ii)     result in the creation or imposition of any lien, charge or encumbrance
upon the Securities or any of the assets of the Company, its subsidiaries or any
of  its  affiliates.

(g)     The  Securities.  The  Securities  upon  issuance:
        ---------------

(i)     are, or will be, free and clear of any security interests, liens, claims
or  other encumbrances, subject to restrictions upon transfer under the 1933 Act
and  any  applicable  state  securities  laws;

(ii)     have  been,  or will be, duly and validly authorized and on the date of
conversion  of  the  Notes,  and  upon  exercise of the Warrants, the Shares and
Warrant  Shares  respectively,  will  be duly and validly issued, fully paid and
nonassessable  (and  if registered pursuant to the 1933 Act, and resold pursuant
to  an  effective  registration statement will be free trading and unrestricted,
provided that each Subscriber complies with the prospectus delivery requirements
of  the  1933  Act);

(iii)     will  not  have  been issued or sold in violation of any preemptive or
other  similar  rights  of  the  holders  of  any securities of the Company; and

(iv)     will not subject the holders thereof to personal liability by reason of
being  such  holders.

(v)     will not result in the activation of any anti-dilution rights or a reset
or  repricing  of  any  debt  or security instrument of any other debt or equity
holder  of  the  Company.

(h)     Litigation.  There  is  no  pending  or,  to  the  best knowledge of the
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Company,  threatened action, suit, proceeding or investigation before any court,
governmental agency or body, or arbitrator having jurisdiction over the Company,
or  any  of its affiliates that would affect the execution by the Company or the
performance  by  the  Company  of  its obligations under this Agreement, and all
other  agreements  entered  into  by  the  Company  relating  hereto.  Except as
disclosed  in  the Reports, there is no pending or, to the best knowledge of the
Company,  threatened action, suit, proceeding or investigation before any court,
governmental agency or body, or arbitrator having jurisdiction over the Company,
or  any  of its affiliates which litigation if adversely determined could have a
material  adverse  effect  on  the  Company.

(i)     Reporting  Company.  The  Company  is a publicly-held company subject to
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reporting  obligations  pursuant  to  Sections  15(d)  and  13 of the Securities
Exchange  Act  of  1934,  as  amended (the "1934 Act") and has a class of common
shares  registered  pursuant  to Section 12(g) of the 1934 Act.  Pursuant to the
provisions  of  the 1934 Act, the Company has timely filed all reports and other
materials  required  to  be  filed  thereunder  with  the  Commission during the
preceding  twelve  months.

(j)     No  Market  Manipulation.  The Company has not taken, and will not take,
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directly  or  indirectly,  any  action  designed to, or that might reasonably be
expected  to,  cause  or result in stabilization or manipulation of the price of
the  Common  Stock  of  the  Company  to  facilitate  the  sale or resale of the
Securities  or affect the price at which the Securities may be issued or resold.

(k)     Information  Concerning  Company.  The  Reports  contain  all  material
        --------------------------------
information  relating  to the Company and its operations and financial condition
as  of  their  respective  dates  which  information is required to be disclosed
therein.   Since  the  date of the financial statements included in the Reports,
and  except  as  modified  in  the Other Written Information or in the Schedules
hereto,  there  has  been  no material adverse change in the Company's business,
financial condition or affairs not disclosed in the Reports.  The Reports do 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 not
misleading  in  light  of  the  circumstances  when  made.

(l)     Stop  Transfer.  The  Securities,  when  issued,  will  be  restricted
        --------------
securities.  The  Company  will not issue any stop transfer order or other order
impeding the sale, resale or delivery of any of the Securities, except as may be
required  by  any  applicable  federal  or  state  securities  laws  and  unless
contemporaneous  notice  of  such  instruction  is  given  to  the  Subscriber.

(m)     Defaults.  The  Company  is  not  in  violation  of  its  Articles  of
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Incorporation  or  Bylaws.  The  Company  is  (i)  not  in  default  under or in
        --
violation  of  any other material agreement or instrument to which it is a party
or  by which it or any of its properties are bound or affected, which default or
violation  would  have  a  material  adverse  effect on the Company, (ii) not in
default  with respect to any order of any court, arbitrator or governmental body
or  subject  to  or  party  to  any order of any court or governmental authority
arising  out  of  any  action, suit or proceeding under any statute or other law
respecting  antitrust,  monopoly,  restraint  of  trade,  unfair  competition or
similar  matters, or (iii) to its knowledge in violation of any statute, rule or
regulation  of  any governmental authority which violation would have a material
adverse  effect  on  the  Company.

(n)     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  cause the offer and/or sale of the Securities
pursuant  to this Agreement to be integrated with prior offerings by the Company
for  purposes of the 1933 Act or any applicable stockholder approval provisions,
including,  without  limitation, under the rules and regulations of the Bulletin
Board.  Nor  will  the Company or any of its affiliates or subsidiaries take any
action  or  steps that would cause the offer and/or sale of the Securities to be
integrated  with  other  offerings.  The  Company  will not conduct any offering
other than the transactions contemplated hereby that will be integrated with the
offer  or  issuance  of  the  Securities.

(o)     No  General  Solicitation.  Neither  the  Company,  nor  any  of  its
        -------------------------
affiliates,  nor to its knowledge, 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 1933 Act) in connection with the offer or sale
of  the  Securities.

(p)     Listing.  The  Company's  common  stock is quoted on the Bulletin Board.
        -------
The  Company  has  not received any oral or written notice that its common stock
will be delisted from the Bulletin Board nor that its common stock does not meet
all  requirements  for  the  continuation  of  such  quotation  and  the Company
satisfies  the requirements for the continued listing of its common stock on the
Bulletin  Board.

(q)     No  Undisclosed  Liabilities.  The  Company  has  no  liabilities  or
        ----------------------------
obligations  which are material, individually or in the aggregate, which are not
        -
disclosed  in  the  Reports  and  Other  Written  Information,  other than those
incurred  in the ordinary course of the Company's businesses since June 30, 2003
and  which,  individually  or  in the aggregate, would reasonably be expected to
have  a material adverse effect on the Company's financial condition, other than
as  set  forth  in  Schedule  5(q).

(r)     No  Undisclosed  Events or Circumstances.  Since June 30, 2003, no event
        ----------------------------------------
or  circumstance  has  occurred  or  exists  with  respect to the Company or its
businesses,  properties,  operations  or  financial  condition,  that,  under
applicable  law,  rule or regulation, requires public disclosure or announcement
prior  to  the  date  hereof  by  the Company but which has not been so publicly
announced  or  disclosed  in  the  Reports.

(s)     Capitalization.  The  authorized  and  outstanding  capital stock of the
        --------------
Company  as  of the date of this Agreement and the Closing Date are set forth on
Schedule 5(s).  Except as set forth in the Reports and Other Written Information
and  Schedule  5(d),  there are no options, warrants, or rights to subscribe to,
securities, rights or obligations convertible into or exchangeable for or giving
any  right  to subscribe for any shares of capital stock of the Company.  All of
the outstanding shares of Common Stock of the Company have been duly and validly
authorized  and  issued  and  are  fully  paid  and  nonassessable.

(t)     Dilution.   The  Company's executive officers and directors have studied
        --------
and  fully  understand  the  nature  of  the  Securities  being  sold hereby and
recognize  that  they have a potential dilutive effect on the equity holdings of
other  holders  of  the  Company's  equity  or  rights  to receive equity of the
Company.  The board of directors of the Company has concluded, in its good faith
business  judgment  that  such issuance is in the best interests of the Company.
The  Company  specifically  acknowledges that its obligation to issue the Shares
upon  conversion  of  the  Note and exercise of the Warrants is binding upon the
Company  and  enforceable,  except  as  otherwise described in this Subscription
Agreement  or the Note, regardless of the dilution such issuance may have on the
ownership  interests of other shareholders of the Company or parties entitled to
receive  equity  of  the  Company.

(u)     No  Disagreements  with  Accountants  and  Lawyers.  There  are  no
        ---------------------------------------------------
disagreements  of  any kind presently existing, or reasonably anticipated by the
        ---
Company  to  arise,  between  the  accountants and lawyers formerly or presently
employed by the Company, including but not limited to disputes or conflicts over
payment  owed  to  such  accountants  and  lawyers.

(v)     Investment  Company.  The  Company  is  not, and is not an Affiliate (as
        -------------------
defined  in Rule 405 under the 1933 Act) of, an  "investment company" within the
meaning  of  the  Investment  Company  Act  of  1940,  as  amended.

(w)     Correctness  of  Representations.  The  Company  represents  that  the
        --------------------------------
foregoing  representations  and  warranties  are true and correct as of the date
hereof  and  will  be  true  and correct as of each closing date, and unless the
Company  otherwise  notifies the Subscribers prior to any closing date, shall be
true  and  correct  as  of such closing dates. The foregoing representations and
warranties  shall  survive  the  Second  Closing  Date for a period of three (3)
years.

6.     Regulation  D  Offering.  The offer and issuance of the Securities to the
       -----------------------
Subscribers  is  being  made  pursuant  to  the  exemption from the registration
provisions  of the 1933 Act afforded by Section 4(2) or Section 4(6) of the 1933
Act  and/or  Rule  506  of Regulation D promulgated thereunder.  On each closing
date,  the  Company  will provide an opinion reasonably acceptable to Subscriber
from  the  Company's  legal  counsel opining on the availability of an exemption
from  registration under the 1933 Act as it relates to the offer and issuance of
the Securities. A form of the legal opinion is annexed hereto as EXHIBIT C.  The
Company will provide, at the Company's expense, such other legal opinions in the
future  as are reasonably necessary for the conversion of the Notes and exercise
of  the  Warrants  and  resale  of  the  Shares  and  Warrant  Shares.

7.1.     Conversion  of  Note.
         --------------------

(a)     Upon  the  conversion of the Note or part thereof, the Company shall, at
its  own  cost  and  expense, take all necessary action, including obtaining and
delivering,  an  opinion  of counsel to assure that the Company's transfer agent
shall  issue  stock  certificates  in the name of Subscriber (or its nominee) or
such  other  persons as designated by Subscriber and in such denominations to be
specified  at  conversion  representing  the  number  of  shares of common stock
issuable  upon such conversion.  The Company warrants that no instructions other
than  these instructions have been or will be given to the transfer agent of the
Company's  Common  Stock  and  that, unless waived by the Subscriber, the Shares
will  be  free-trading,  and  freely transferable, and will not contain a legend
restricting  the resale or transferability of the Shares provided the Shares are
being  sold  pursuant to an effective registration statement covering the Shares
or  are  otherwise  exempt  from  registration.

(b)     Subscriber  will  give  notice  of its decision to exercise its right to
convert the Note or part thereof by telecopying an executed and completed Notice
of  Conversion  (a  form  of  which  is annexed to EXHIBIT A to the Note) to the
Company  via  confirmed telecopier transmission or otherwise pursuant to Section
13(a)  of  this Agreement.  The Subscriber will not be required to surrender the
Note until the Note has been fully converted or satisfied.  Each date on which a
Notice  of  Conversion  is  telecopied  to  the  Company  in accordance with the
provisions hereof shall be deemed a Conversion Date.  The Company will itself or
cause  the  Company's  transfer  agent  to  transmit  the Company's Common Stock
certificates representing the Shares issuable upon conversion of the Note to the
Subscriber  via  express courier for receipt by such Subscriber within three (3)
business  days  after  receipt  by  the Company of the Notice of Conversion (the
"Delivery Date").  In the event the Shares are electronically transferable, then
delivery  of the Shares must be made by electronic transfer provided request for
                        ----
such  electronic transfer has been made by the Subscriber.   A Note representing
the  balance of the Note not so converted will be provided by the Company to the
Subscriber  if  requested  by  Subscriber,  provided  the Subscriber delivers an
original  Note  to  the  Company.  To the extent that a Subscriber elects not to
surrender  a  Note  for  reissuance  upon  partial  payment  or  conversion, the
Subscriber  hereby  indemnifies  the  Company against any and all loss or damage
attributable  to a third-party claim in an amount in excess of the actual amount
then  due  under  the  Note.

(c)     The  Company  understands  that a delay in the delivery of the Shares in
the  form  required  pursuant  to  Section 7 hereof, or the Mandatory Redemption
Amount  described  in  Section 7.2 hereof, beyond the Delivery Date or Mandatory
Redemption  Payment  Date (as hereinafter defined) could result in economic loss
to the Subscriber.  As compensation to the Subscriber for such loss, the Company
agrees to pay to the Subscriber for late issuance of Shares in the form required
pursuant  to  Section 7 hereof upon Conversion of the Note in the amount of $100
per  business  day  after  the  Delivery Date for each $10,000 of Note principal
amount  being  converted,  of  the  corresponding  Shares  which  are not timely
delivered.  The  Company  shall  pay any payments incurred under this Section in
immediately  available funds upon demand.  Furthermore, in addition to any other
remedies which may be available to the Subscriber, in the event that the Company
fails  for  any  reason to effect delivery of the Shares by the Delivery Date or
make  payment  by  the Mandatory Redemption Payment Date, the Subscriber will be
entitled  to  revoke all or part of the relevant Notice of Conversion or rescind
all  or  part  of  the notice of Mandatory Redemption by delivery of a notice to
such  effect  to the Company whereupon the Company and the Subscriber shall each
be  restored  to their respective positions immediately prior to the delivery of
such  notice,  except that late payment charges described above shall be payable
through  the  date  notice  of revocation or rescission is given to the Company.

(d)     Nothing  contained  herein  or  in  any  document  referred to herein or
delivered  in  connection  herewith  shall be deemed to establish or require the
payment  of  a  rate  of  interest  or  other  charges  in excess of the maximum
permitted  by  applicable  law.  In  the  event  that  the  rate  of interest or
dividends  required  to  be  paid  or other charges hereunder exceed the maximum
permitted  by such law, any payments in excess of such maximum shall be credited
against  amounts  owed by the Company to the Subscriber and thus refunded to the
Company.

7.2.     Mandatory  Redemption  at  Subscriber's  Election.  In  the  event  the
         -------------------------------------------------
Company  is prohibited from issuing Shares, or fails to timely deliver Shares on
a  Delivery  Date,  or  upon  the  occurrence  of any other Event of Default (as
defined  in the Note or in this Agreement) or for any reason other than pursuant
to  the  limitations  set  forth in Section 7.3 hereof, then at the Subscriber's
election,  the  Company  must pay to the Subscriber ten (10) business days after
request  by  the  Subscriber  or  on  the  Delivery  Date  (if  requested by the
Subscriber)  at  the  Subscriber's  election,  a  sum of money determined by (i)
multiplying up to the outstanding principal amount of the Note designated by the
Subscriber  by  130%,  or  (ii)  multiplying  the  number  of  Shares  otherwise
deliverable  upon  conversion  of  an  amount  of Note principal and/or interest
designated  by the Subscriber (with the date of giving of such designation being
a  Deemed  Conversion Date) at the then Conversion Price that would be in effect
on  the  Deemed Conversion Date by the highest closing price of the Common Stock
on  the principal market for the period commencing on the Deemed Conversion Date
until  the  day  prior  to  the  receipt  of  the  Mandatory Redemption Payment,
whichever  is  greater,  together  with  accrued  but  unpaid  interest  thereon
("Mandatory  Redemption  Payment").   The  Mandatory  Redemption Payment must be
received  by  the  Subscriber  on  the same date as the Company Shares otherwise
deliverable  or within ten (10) business days after request, whichever is sooner
("Mandatory  Redemption Payment Date"). Upon receipt of the Mandatory Redemption
Payment,  the  corresponding Note principal and interest will be deemed paid and
no  longer  outstanding.

7.3.     Maximum Conversion.  The Subscriber shall not be entitled to convert on
         ------------------
a  Conversion  Date  that  amount  of the Note in connection with that number of
shares  of Common Stock which would be in excess of the sum of (i) the number of
shares  of  common stock beneficially owned by the Subscriber and its affiliates
on  a  Conversion  Date,  and (ii) the number of shares of Common Stock issuable
upon  the conversion of the Note with respect to which the determination of this
provision  is  being made on a Conversion Date, which would result in beneficial
ownership  by  the  Subscriber  and  its  affiliates  of  more than 9.99% of the
outstanding  shares of common stock of the Company on such Conversion Date.  For
the  purposes of the provision to the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of the Securities
Exchange  Act  of 1934, as amended, and Regulation 13d-3 thereunder.  Subject to
the  foregoing,  the Subscriber shall not be limited to aggregate conversions of
only  9.99%  and  aggregate  conversion by the Subscriber may exceed 9.99%.  The
Subscriber may void the conversion limitation described in this Section 7.3 upon
and  effective  after  (sixty-one)  61 days prior written notice to the Company.
The  Subscriber  may  allocate  which  of  the  equity  of  the  Company  deemed
beneficially  owned  by  the  Subscriber  shall  be included in the 9.99% amount
described  above  and  which  shall  be  allocated  to  the  excess above 9.99%.

7.4.     Injunction - Posting of Bond.  In the event a Subscriber shall elect to
         ----------------------------
convert  a Note or part thereof or exercise the Warrant in whole or in part, the
Company  may  not  refuse  conversion  or  exercise based on any claim that such
Subscriber  or  any  one  associated or affiliated with such Subscriber has been
engaged  in any violation of law, or for any other reason, unless, an injunction
from  a court, on notice, restraining and or enjoining conversion of all or part
of  said  Note or exercise of all or part of said Warrant shall have been sought
and  obtained  and  the Company has posted a surety bond for the benefit of such
Subscriber  in  the  amount  of  130%  of  the  amount of the Note, or aggregate
purchase  price of the Warrant Shares which are subject to the injunction, which
bond  shall  remain  in effect until the completion of arbitration/litigation of
the dispute and the proceeds of which shall be payable to such Subscriber to the
extent  Subscriber  obtains  judgment.

     7.5.     Buy-In.  In  addition  to  any  other  rights  available  to  the
              ------
Subscriber,  if  the  Company  fails  to  deliver  to the Subscriber such shares
issuable  upon  conversion  of  a Note by the Delivery Date and if ten (10) days
after  the Delivery Date the Subscriber purchases (in an open market transaction
or  otherwise)  shares  of  Common Stock to deliver in satisfaction of a sale by
such  Subscriber  of the Common Stock which the Subscriber anticipated receiving
upon  such  conversion  (a  "Buy-In"), then the Company shall pay in cash to the
Subscriber  (in  addition  to  any  remedies  available  to  or  elected  by the
Subscriber)  the  amount  by  which  (A)  the  Subscriber's total purchase price
(including  brokerage  commissions,  if  any)  for the shares of Common Stock so
purchased exceeds (B) the aggregate principal and/or interest amount of the Note
for which such conversion was not timely honored, together with interest thereon
at  a rate of 15% per annum, accruing until such amount and any accrued interest
thereon  is  paid  in full (which amount shall be paid as liquidated damages and
not  as  a  penalty).  For example, if the Subscriber purchases shares of Common
Stock having a total purchase price of $11,000 to cover a Buy-In with respect to
an  attempted  conversion  of  $10,000  of  note  principal and/or interest, the
Company  shall  be  required  to  pay the Subscriber $1,000, plus interest.  The
Subscriber  shall  provide  the  Company  written  notice indicating the amounts
payable  to the Subscriber in respect of the Buy-In.  The delivery date by which
Common  Stock must be delivered pursuant to this Section 7.5 shall be tolled for
the  amount  of days that the Subscriber does not deliver information reasonably
requested  by  the  Company's  transfer  agent.

7.6     Adjustments.   The  Conversion  Price and amount of Shares issuable upon
        ------------
conversion  of the Notes shall be adjusted to offset the effect of stock splits,
stock  dividends,  pro rata distributions of property or equity interests to the
Company's  shareholders.

7.7.     Redemption.  The  Company  may  not redeem or call the Note without the
         ----------
consent  of  the  holder  of  the  Note.

8.     Legal  Fee/Escrow  Agent  and  Finder's  Fee.
       ---------------------------------------------

     (a)     Legal  Fee.   The  Company  shall pay to Grushko & Mittman, P.C., a
             ----------
fee  of  $15,000  ("Legal Fees") as reimbursement for services rendered to Alpha
Capital  Aktiengesellschaft  in  connection with this Agreement and the purchase
and  sale  of the Notes and Warrants (the "Offering") and acting as Escrow Agent
for  the Offering.   Thirteen Thousand Dollars ($13,000) of the Legal Fees shall
be  payable on or before the Initial Closing Date and $2,000 shall be payable on
the  Second  Closing  Date.  The  Legal  Fees  will be payable out of funds held
pursuant  to  the  Escrow  Agreement.

     (b)     Finder's  Fee.   The  Company  on the one hand, and each Subscriber
             --------------
(for  himself only) on the other hand, agrees to indemnify the other against and
hold  the  other  harmless  from any and all liabilities to any persons claiming
brokerage  commissions  or  finder's  fees other than the entities identified on
Schedule  8(b)  to  this  Agreement.  (each  a  "Finder") 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 and
arising out of such party's actions.  Anything to the contrary in this Agreement
notwithstanding,  each  Subscriber  is  providing  indemnification only for such
Subscriber's  own  actions and not for any action of any other Subscriber.  Each
Subscriber's  liability  hereunder is several and not joint.  The Company agrees
that  it  will  pay  the  Finders  a  cash fee equal to ten percent (10%) of the
Initial Closing Purchase Price on the Initial Closing Date and ten percent (10%)
of  the Second Closing Purchase Price on the Second Closing Date directly out of
the funds held pursuant to the Escrow Agreement ("Finder's Fees").  The Finder's
Fees  will  be  disbursed  as  described  in  Schedule 8(b) hereto.  The Company
represents  that  there  are  no  other  parties  entitled  to  receive  fees,
commissions,  or  similar  payments  in  connection with the Offering except the
Finders.

9.     Covenants  of  the  Company.  The  Company  covenants and agrees with the
       ---------------------------
Subscribers  as  follows:

(a)     Stop Orders.  The Company will advise the Subscribers, promptly after it
        -----------
receives  notice  of issuance by the Commission, any state securities commission
or  any  other regulatory authority of any stop order or of any order preventing
or  suspending  any  offering  of  any  securities  of  the  Company,  or of the
suspension  of the qualification of the Common Stock of the Company for offering
or  sale  in  any jurisdiction, or the initiation of any proceeding for any such
purpose.

(b)     Listing.  The  Company  shall  promptly secure the listing of the Shares
        -------
and  Warrant Shares upon each national securities exchange, or quotation system,
if  any,  upon which shares of common stock are then listed (subject to official
notice  of  issuance)  and shall maintain such listing so long as any Securities
are  outstanding.  The  Company will maintain the listing of its Common Stock on
the  American  Stock  Exchange,  Nasdaq  SmallCap Market, Nasdaq National Market
System,  OTC  Bulletin  Board,  or  New  York  Stock  Exchange (whichever of the
foregoing is at the time the principal trading exchange or market for the Common
Stock  [the  "Principal  Market"]),  and  will  comply  in all respects with the
Company's  reporting,  filing and other obligations under the bylaws or rules of
the  Principal  Market,  as applicable. The Company will provide the Subscribers
copies  of  all  notices it receives notifying the Company of the threatened and
actual  delisting of the Common Stock from any Principal Market.  As of the date
of  this  Agreement and the Initial Closing Date, the Bulletin Board is and will
be  the  Principal  Market.

(c)     Market  Regulations.  The  Company  shall  notify  the  Commission,  the
        -------------------
Principal  Market  and  applicable  state  authorities, in accordance with their
requirements, of the transactions contemplated by this Agreement, and shall take
all  other  necessary action and proceedings as may be required and permitted by
applicable  law,  rule  and  regulation, for the legal and valid issuance of the
Securities to the Subscribers and promptly provide copies thereof to Subscriber.

(d)     Reporting  Requirements.  From  the  date of this Agreement and until at
        -----------------------
least  two (2) years after the Actual Effective Date, the Company will (i) cause
its  Common  Stock  to continue to be registered under Section 12(b) or 12(g) of
the  1934  Act,  (ii)  comply  in  all  respects  with  its reporting and filing
obligations  under  the  1934  Act, (iii) comply with all reporting requirements
that  are  applicable to an issuer with a class of shares registered pursuant to
Section  12(b) or 12(g) of the 1934 Act, as applicable, and (iv) comply with all
requirements  related  to  any  registration  statement  filed  pursuant to this
Agreement.  The Company will use its best efforts not to take any action or file
any  document  (whether  or not permitted by the 1933 Act or the 1934 Act or the
rules  thereunder)  to terminate or suspend such registration or to terminate or
suspend  its reporting and filing obligations under said acts until the later of
two  (2) years after the Actual Effective Date.  Until the earlier of the resale
of  the  Shares  and  the  Warrant Shares by each Subscriber or at least two (2)
years  after  the  Warrants  have  been exercised, the Company will use its best
efforts  to  continue  the  listing  or  quotation  of  the  Common Stock on the
Principal  Market  and will comply in all respects with the Company's reporting,
filing  and other obligations under the bylaws or rules of the Principal Market.
The  Company  agrees to file a Form D with respect to the Securities as required
under  Regulation  D  and  to provide a copy thereof to each Subscriber promptly
after  such  filing.

(e)     Use  of  Proceeds.  The  Company  undertakes  to use the proceeds of the
        -----------------
Subscribers'  funds  for  the  purposes  set  forth  on SCHEDULE 9(E) hereto.  A
deviation  from  the use of proceeds set forth on SCHEDULE 9(E) of more than 10%
per  item or more than 20% in the aggregate shall be deemed a material breach of
the Company's obligations hereunder.   Except as set forth on SCHEDULE 9(E), the
Purchase  Price  may not and will not be used for accrued and unpaid officer and
director  salaries, payment of financing related debt, redemption of outstanding
redeemable  notes or equity instruments of the Company nor non-trade obligations
outstanding  on  the  Initial  Closing  Date.

(f)     Reservation.   The  Company undertakes to reserve, pro rata on behalf of
        -----------
each holder of a Note or Warrant, from its authorized but unissued common stock,
at  all  times  that  Notes  or  Warrants remain outstanding, a number of common
shares  equal  to not less than 200% of the amount of common shares necessary to
allow  each  such holder at all times to be able to convert all such outstanding
Notes,  and one common share for each Warrant Share.  Failure to have sufficient
shares reserved pursuant to this Section 9(f) for three (3) consecutive business
days  or  ten  (10) days in the aggregate shall be an Event of Default under the
Note.

(g)     Taxes.  From  the  date  of this Agreement until two (2) years after the
        -----
Closing  Date  (or  Second Closing Date if the Second Closing Notes are issued),
the Company will promptly pay and discharge, or cause to be paid and discharged,
when  due and payable, all lawful taxes, assessments and governmental charges or
levies  imposed  upon  the income, profits, property or business of the Company;
provided,  however,  that  any  such tax, assessment, charge or levy need not be
paid  if  the  validity  thereof  shall  currently be contested in good faith by
appropriate  proceedings  and  if  the Company shall have set aside on its books
adequate  reserves with respect thereto, and provided, further, that the Company
will  pay  all  such  taxes,  assessments,  charges or levies forthwith upon the
commencement  of  proceedings  to  foreclose any lien which may have attached as
security  therefore.

(h)     Insurance.  From  the  date  of this Agreement until two (2) years after
        ---------
the  Closing  Date  (or  Second  Closing  Date  if  the Second Closing Notes are
issued),  the  Company  will keep its assets which are of an insurable character
insured  by  financially  sound and reputable insurers against loss or damage by
fire,  explosion and other risks customarily insured against by companies in the
Company's  line  of  business, in amounts sufficient to prevent the Company from
becoming a co-insurer and not in any event less than 100% of the insurable value
of  the  property insured; and the Company will maintain, with financially sound
and  reputable insurers, insurance against other hazards and risks and liability
to  persons and property to the extent and in the manner customary for companies
in  similar  businesses  similarly  situated  and  to  the  extent  available on
commercially  reasonable  terms.

(i)     Books  and Records.  From the date of this Agreement until two (2) years
        -------------------
after  the  Closing Date (or Second Closing Date if the Second Closing Notes are
issued),  the Company will keep true records and books of account in which full,
true  and  correct  entries  will  be  made  of  all dealings or transactions in
relation  to  its  business  and  affairs  in accordance with generally accepted
accounting  principles  applied  on  a  consistent  basis.

(j)     Governmental  Authorities.From  the date of this Agreement until two (2)
        --------------------------
years after the Closing Date (or Second Closing Date if the Second Closing Notes
are issued), the Company shall duly observe and conform in all material respects
to all valid requirements of governmental authorities relating to the conduct of
its  business  or  to  its  properties  or  assets.

(k)     Intellectual  Property.  From  the  date of this Agreement until two (2)
        ----------------------
years after the Closing Date (or Second Closing Date if the Second Closing Notes
are  issued),  the Company shall maintain in full force and effect its corporate
existence,  rights  and  franchises  and  all  licenses  and other rights to use
intellectual  property  owned  or  possessed  by  it and reasonably deemed to be
necessary  to  the  conduct  of  its  business.

(l)     Properties.  From  the  date of this Agreement until two (2) years after
        -----------
the  Closing  Date  (or  Second  Closing  Date  if  the Second Closing Notes are
issued),  the Company will keep its properties in good repair, working order and
condition,  reasonable  wear  and  tear excepted, and from time to time make all
needful  and  proper repairs, renewals, replacements, additions and improvements
thereto;  and  the  Company  will at all times comply with each provision of all
leases  to which it is a party or under which it occupies property if the breach
of  such  provision  could  reasonably  be  expected  to have a material adverse
effect.

(m)     Confidentiality.  From  the  date  of this Agreement until two (2) years
        ----------------
after  the  Closing Date (or Second Closing Date if the Second Closing Notes are
issued),  the Company agrees that it will not disclose publicly or privately the
identity  of  the  Subscribers  unless  expressly  agreed  to  in  writing  by a
Subscriber  or  only  to  the extent required by law and then only upon ten (10)
days  prior  notice  to  Subscriber.

(n)     Blackout.    The  Company  undertakes and covenants that until the first
        ---------
to  occur of (i) the registration statement described in Section 11.1(iv) having
been effective for one hundred and eighty (180) business days, or (ii) until all
the  Shares  and  Warrant  Shares have been resold pursuant to said registration
statement,  the Company will not enter into any acquisition, merger, exchange or
sale  or  other  transaction  that  could  have  the  effect  of  delaying  the
effectiveness  of  any  pending  registration  statement,  causing  an  already
effective  registration  statement  to  no  longer  be  effective or current, or
require  the  filing  of  an  amendment  to  an  already  effective registration
statement.
(o)     S-8.   The  Company  will not file a Form S-8 with the Commission during
        ----
the  Exclusion Period (as defined in Section 12(a) of the Agreement) without the
consent  of  the  Subscriber.

10.     Covenants  of  the  Company  and  Subscriber  Regarding Indemnification.
        ------------------------------------------------------------------------

(a)     The Company agrees to indemnify, hold harmless, reimburse and defend the
Subscribers,  the  Subscribers' officers, directors, agents, affiliates, control
persons,  and  principal  shareholders,  against  any  claim,  cost,  expense,
liability,  obligation,  loss or damage (including reasonable legal fees) of any
nature,  incurred  by  or  imposed  upon the Subscriber or any such person which
results,  arises  out  of or is based upon (i) any material misrepresentation by
Company  or  breach  of  any  warranty  by  Company  in this Agreement or in any
Exhibits  or  Schedules  attached  hereto, or other agreement delivered pursuant
hereto;  or  (ii) after any applicable notice and/or cure periods, any breach or
default  in  performance  by  the  Company  of any covenant or undertaking to be
performed  by  the Company hereunder, or any other agreement entered into by the
Company  and  Subscriber  relating  hereto.

(b)     Each Subscriber agrees to indemnify, hold harmless, reimburse and defend
the  Company  and each of the Company's officers, directors, agents, affiliates,
control persons against any claim, cost, expense, liability, obligation, loss or
damage  (including  reasonable legal fees) of any nature, incurred by or imposed
upon  the  Company  or  any such person which results, arises out of or is based
upon  (i) any material misrepresentation by such Subscriber in this Agreement or
in  any  Exhibits  or  Schedules  attached  hereto, or other agreement delivered
pursuant  hereto;  or  (ii) after any applicable notice and/or cure periods, any
breach  or  default  in  performance  by  such  Subscriber  of  any  covenant or
undertaking to be performed by such Subscriber hereunder, or any other agreement
entered  into  by  the  Company  and  Subscribes  relating  hereto.

(c)     In no event shall the liability of any Subscriber or permitted successor
hereunder  or  under  any  other  agreement  delivered in connection herewith be
greater  in  amount  than the dollar amount of the net proceeds received by such
Subscriber  upon  the  sale of Registrable Securities (as defined herein) giving
rise  to  such  indemnification  obligation.

(d)     The  procedures  set  forth  in  Section  11.6  shall  apply  to  the
indemnifications  set  forth  in  Sections  10(a)  and  10(b)  above.

11.1.     Registration  Rights.  The  Company  hereby  grants  the  following
          --------------------
registration  rights  to  holders  of  the  Securities.

(i)     On  one  occasion,  for  a  period commencing one hundred and twenty-one
(120)  days  after  the Initial Closing Date, but not later than three (3) years
after  the  Second  Closing  Date  ("Request Date"), the Company, upon a written
request  therefor  from  any  record  holder  or holders of more than 50% of the
Shares  issued and issuable upon conversion of the issued Initial Closing Notes,
Second  Closing  Notes,  and Warrant Shares actually issued upon exercise of the
Warrants  shall  prepare  and  file with the Commission a registration statement
under  the  1933  Act  covering  the  Shares  and  Warrant  Shares (collectively
"Registrable  Securities")  which are the subject of such request.  For purposes
of  Sections  11.1(i)  and  11.1(ii),  Registrable  Securities shall not include
Securities  which  are  registered  for  resale  in  an  effective  registration
statement  or  included for registration in a pending registration statement, or
which  have  been  issued  without further transfer restrictions after a sale or
transfer pursuant to Rule 144 under the 1933 Act.  In addition, upon the receipt
of  such  request,  the  Company shall promptly give written notice to all other
record holders of the Registrable Securities that such registration statement is
to  be  filed  and  shall  include  in  such  registration statement Registrable
Securities for which it has received written requests within ten (10) days after
the  Company  gives  such  written notice.  Such other requesting record holders
shall  be  deemed  to  have exercised their demand registration right under this
Section  11.1(i).

(ii)     If  the  Company at any time proposes to register any of its securities
under  the  1933  Act for sale to the public, whether for its own account or for
the  account  of  other  security  holders  or  both,  except  with  respect  to
registration  statements  on  Forms  S-4,  S-8 or another form not available for
registering  the  Registrable  Securities  for  sale to the public, provided the
Registrable  Securities  are  not  otherwise  registered  for  resale  by  the
Subscribers or Holder pursuant to an effective registration statement, each such
time it will give at least fifteen (15) days' prior written notice to the record
holder of the Registrable Securities of its intention so to do. Upon the written
request  of  the  holder, received by the Company within ten (10) days after the
giving  of  any  such  notice by the Company, to register any of the Registrable
Securities  not  previously  registered, the Company will cause such Registrable
Securities  as to which registration shall have been so requested to be included
with  the  securities to be covered by the registration statement proposed to be
filed  by  the  Company,  all to the extent required to permit the sale or other
disposition  of  the  Registrable Securities so registered by the holder of such
Registrable  Securities  (the  "Seller").  In  the  event  that any registration
pursuant to this Section 11.1(ii) shall be, in whole or in part, an underwritten
public  offering  of  common  stock  of  the  Company,  the  number of shares of
Registrable  Securities to be included in such an underwriting may be reduced by
the  managing  underwriter  if  and  to  the  extent  that  the  Company and the
underwriter  shall  reasonably  be  of  the  opinion  that  such inclusion would
adversely  affect  the  marketing  of  the  securities to be sold by the Company
therein;  provided, however, that the Company shall notify the Seller in writing
of any such reduction. Notwithstanding the foregoing provisions, or Section 11.4
hereof,  the Company may withdraw or delay or suffer a delay of any registration
statement  referred  to  in  this Section 11.1(ii) without thereby incurring any
liability  to  the  Seller.

(iii)     If,  at  the  time any written request for registration is received by
the  Company  pursuant to Section 11.1(i), the Company has determined to proceed
with  the  actual  preparation  and filing of a registration statement under the
1933  Act  in connection with the proposed offer and sale for cash of any of its
securities for the Company's own account and the Company actually does file such
other  registration statement, such written request shall be deemed to have been
given  pursuant  to Section 11.1(ii) rather than Section 11.1(i), and the rights
of  the  holders of Registrable Securities covered by such written request shall
be  governed  by  Section  11.1(ii).

(iv)     The  Company  shall file with the Commission not later than thirty (30)
days  after  the  Initial  Closing  Date  (the  "Filing  Date"), and cause to be
declared  effective  within  one hundred and twenty (120) days after the Initial
Closing  Date  (the  "Effective  Date"), a Form SB-2 registration statement (the
"Registration  Statement")  (or  such  other form that it is eligible to use) in
order  to  register the Registrable Securities for resale and distribution under
the  1933  Act.  The  Company  will register not less than a number of shares of
common  stock  in the aforedescribed registration statement that is equal to one
hundred and seventy-one percent (171%) of the Shares issuable upon conversion of
the Notes (using the Conversion Price on the Initial Closing Date or the trading
day  immediately preceding the filing date of the Registration Statement, or any
amendment  thereto,  whichever  results  in  the  greatest number of registrable
Shares,  such  amount  of Shares being included in the definition of Registrable
Securities)  and  one hundred percent (100%) of the Warrant Shares issuable upon
exercise  of the Warrants.  The Registrable Securities shall be reserved and set
aside  exclusively  for the benefit of each Subscriber, and not issued, employed
or  reserved for anyone other than each Subscriber.  Such Registration Statement
will  immediately  be  amended  or  additional  registration  statements will be
immediately  filed  by the Company as necessary to register additional shares of
Common  Stock  to  allow  the  public resale of all Common Stock included in and
issuable  by virtue of the Registrable Securities.  No securities of the Company
other  than  the  Registrable  Securities  will  be included in the registration
statement  described  in  this  Section 11.1(iv) except as disclosed on Schedule
11.1,  without  the written consent of Subscriber.  A registration that is filed
but withdrawn prior to being declared effective shall be deemed not to have been
filed  for  purposes  of  this  Section  11.1.

11.2.     Registration  Procedures.  If  and whenever the Company is required by
          ------------------------
the  provisions of Section 11.1(i), 11.1(ii), or (iv) to affect the registration
of any shares of Registrable Securities under the 1933 Act, the Company will, as
expeditiously  as  possible:

(a)     subject  to  the  timelines provided in this Agreement, prepare and file
with  the  Commission  a  registration  statement  required  by Section 11, with
respect  to  such securities and use its best efforts to cause such registration
statement  to  become  and  remain  effective for the period of the distribution
contemplated  thereby  (determined  as herein provided), and promptly provide to
the  holders of Registrable Securities (the "Sellers") copies of all filings and
Commission  letters  of  comment;

(b)     prepare  and file with the Commission such amendments and supplements to
such  registration  statement and the prospectus used in connection therewith as
may  be  necessary  to  keep  such  registration  statement effective until such
registration  statement  has  been  effective for a period of two (2) years, and
comply  with  the  provisions of the 1933 Act with respect to the disposition of
all  of  the  Registrable  Securities  covered by such registration statement in
accordance  with  the  Seller's intended method of disposition set forth in such
registration  statement  for  such  period;

(c)     furnish  to  the Seller, at the Company's expense, such number of copies
of  the  registration  statement  and the prospectus included therein (including
each  preliminary prospectus) as such persons reasonably may request in order to
facilitate  the  public  sale  or their disposition of the securities covered by
such  registration  statement;

(d)     use  its  best  efforts  to register or qualify the Seller's Registrable
Securities  covered by such registration statement under the securities or "blue
sky"  laws  of  such  jurisdictions  as  the Seller, provided, however, that the
Company  shall  not  for  any  such  purpose be required to qualify generally to
transact  business  as a foreign corporation in any jurisdiction where it is not
so  qualified  or  to  consent  to  general  service  of  process  in  any  such
jurisdiction;

(e)     if  applicable,  list  the  Registrable  Securities  covered  by  such
registration statement with any securities exchange on which the Common Stock of
the  Company  is  then  listed;

(f)     immediately  notify  the  Seller  when  a prospectus relating thereto is
required  to  be  delivered under the 1933 Act, of the happening of any event of
which the Company has knowledge as a result of which the prospectus contained in
such  registration statement, as then in effect, includes an untrue statement of
a  material fact or omits to state a material fact required to be stated therein
or  necessary  to  make  the  statements  therein not misleading in light of the
circumstances  then  existing;  and

(g)     provided  same  would not be in violation of the provision of Regulation
FD  under  the  1934  Act, make available for inspection by the Seller,  and any
attorney,  accountant  or other agent retained by the Seller or underwriter, all
publicly  available,  non-confidential  financial  and  other records, pertinent
corporate  documents  and  properties  of  the  Company, and cause the Company's
officers,  directors  and  employees  to  supply  all  publicly  available,
non-confidential  information  reasonably  requested  by  the  seller, attorney,
accountant  or  agent  in  connection  with  such  registration  statement.

11.3.     Provision  of  Documents.  In  connection  with  each  registration
          ------------------------
described  in this Section 11, the Seller will furnish to the Company in writing
such  information  and  representation  letters  with  respect to itself and the
proposed  distribution by it as reasonably shall be necessary in order to assure
compliance  with  federal  and  applicable  state  securities  laws.

11.4.     Non-Registration  Events.  The  Company and the Subscribers agree that
          ------------------------
the  Seller  will  suffer  damages  if any registration statement required under
Section  11.1(iv)  above  is  not  filed  by  the  Filing  Date and not declared
effective  by  the  Commission  by  the  Effective  Date,  and  any registration
statement  required  under Section 11.1(i) or 11.1(ii) is not filed within sixty
(60)  days after written request and declared effective by the Commission within
one  hundred  and  twenty  (120)  days after such request, and maintained in the
manner  and  within  the  time periods contemplated by Section 11 hereof, and it
would  not  be  feasible to ascertain the extent of such damages with precision.
Accordingly,  if  (i) the registration statement on Form SB-2 or such other form
described  in  Section  11.1(iv) is not filed on or before the Filing Date or is
not  declared effective on or before the sooner of the Effective Date, or within
ten  (10)  business  days  of  receipt  by  the  Company  of  a  written or oral
communication  from  the Commission that the registration statement described in
Section  11.1(iv)  will  not  be  reviewed,  (ii)  if the registration statement
described  in  Sections  11.1(i) or 11.1(ii) is not filed within sixty (60) days
after  such written request, or is not declared effective within one hundred and
twenty  (120)  days  after  such  written  request,  or  (iii)  any registration
statement  described  in  Sections  11.1(i),  11.1(ii)  or 11.1(iv) is filed and
declared  effective  but  shall  thereafter cease to be effective (without being
succeeded immediately by an additional registration statement filed and declared
effective)  for  a  period  of  time  which shall exceed thirty (30) days in the
aggregate  per  year  or  more  than  twenty (20) consecutive days (defined as a
period  of  three  hundred  and sixty-five (365) days commencing on the date the
Registration  Statement  is  declared effective) (each such event referred to in
clauses  (i),  (ii)  and  (iii)  of this Section 11.4 is referred to herein as a
"Non-Registration  Event"),  then  the  Company  shall  deliver to the holder of
Registrable  Securities,  as  Liquidated Damages, an amount equal to two percent
(2%)  for  each  thirty  (30) days or part thereof, of the Purchase Price of the
Notes  remaining unconverted and purchase price of Shares issued upon conversion
of  the Notes and actually paid "Purchase Price" (as defined in the Warrants) of
Warrant  Shares issued or issuable upon actual exercise of the Warrants, for the
Registrable  Securities  owned  of  record  by  such holder as of and during the
pendency  of  such  Non-Registration  Event  which  are  subject  to  such
Non-Registration  Event.   Payments  to  be  made  pursuant to this Section 11.4
shall  be  due  and  payable within ten (10) business days after the end of each
thirty  (30)  day  period  or  part  thereof,  in  the  form of additional Notes
identical  to  and  carrying  the  same  rights,  including  but  not limited to
registration  rights  and  indemnification,  as the Notes.  It shall be deemed a
Non-Registration  Event  if at any time after the Effective Date the Company has
registered  for  unrestricted resale on behalf of each Subscriber fewer than one
hundred  and  twenty-five  percent (125%) of the amount of Common Stock issuable
upon  full  conversion  of  all  sums  due  under  such  Subscriber's  Note.

11.5.     Expenses.  All  expenses  incurred  by  the  Company in complying with
          --------
Section  11,  including,  without  limitation, all registration and filing fees,
printing  expenses,  fees  and  disbursements  of counsel and independent public
accountants  for  the  Company,  fees and expenses (including reasonable counsel
fees)  incurred in connection with complying with state securities or "blue sky"
laws,  fees  of  the  National Association of Securities Dealers, Inc., transfer
taxes, fees of transfer agents and registrars, costs of insurance and fee of one
counsel  for  all  Sellers  are called "Registration Expenses". All underwriting
discounts  and  selling  commissions  applicable  to  the  sale  of  Registrable
Securities,  including  any  fees and disbursements of any additional counsel to
the  Seller,  are  called  "Selling  Expenses".  The  Company  will  pay  all
Registration  Expenses  in  connection  with  the  registration  statement under
Section  11.  Selling  Expenses  in  connection with each registration statement
under  Section  11 shall be borne by the Seller and may be apportioned among the
Sellers in proportion to the number of shares sold by the Seller relative to the
number  of  shares  sold  under  such  registration  statement or as all Sellers
thereunder  may  agree.

11.6.     Indemnification  and  Contribution.
          ----------------------------------

(a)     In  the  event of a registration of any Registrable Securities under the
1933  Act  pursuant  to Section 11, the Company will, to the extent permitted by
law,  indemnify  and  hold harmless the Seller, each officer of the Seller, each
director  of  the  Seller,  each  underwriter  of  such  Registrable  Securities
thereunder  and  each  other  person,  if  any,  who  controls  such  Seller  or
underwriter  within  the  meaning  of  the 1933 Act, against any losses, claims,
damages  or  liabilities,  joint  or  several,  to  which  the  Seller,  or such
underwriter  or  controlling  person  may  become  subject under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect  thereof) arise out of or are based upon any untrue statement or alleged
untrue  statement  of  any material fact contained in any registration statement
under  which  such  Registrable  Securities  was  registered  under the 1933 Act
pursuant to Section 11, any preliminary prospectus or final prospectus contained
therein,  or  any  amendment or supplement thereof, or arise out of or are based
upon  the omission or alleged omission to state therein a material fact required
to  be stated therein or necessary to make the statements therein not misleading
in  light  of the circumstances when made, and will subject to the provisions of
Section  11.6(c)  reimburse  the  Seller,  each  such  underwriter and each such
controlling  person  for any legal or other expenses reasonably incurred by them
in  connection  with  investigating  or  defending any such loss, claim, damage,
liability  or action; provided, however, that the Company shall not be liable to
the Seller to the extent that any such damages arise out of or are based upon an
untrue  statement  or  omission  made  in  any preliminary prospectus if (i) the
Seller failed to send or deliver a copy of the final prospectus delivered by the
Company  to  the Seller with or prior to the delivery of written confirmation of
the sale by the Seller to the person asserting the claim from which such damages
arise,  (ii)  the final prospectus would have corrected such untrue statement or
alleged  untrue  statement or such omission or alleged omission, or (iii) to the
extent  that any such loss, claim, damage or liability arises out of or is based
upon  an  untrue  statement  or  alleged untrue statement or omission or alleged
omission so made in conformity with information furnished by any such Seller, or
any such controlling person in writing specifically for use in such registration
statement  or  prospectus.

(b)     In  the  event  of  a  registration of any of the Registrable Securities
under the 1933 Act pursuant to Section 11, each Seller severally but not jointly
will,  to  the extent permitted by law, indemnify and hold harmless the Company,
and each person, if any, who controls the Company within the meaning of the 1933
Act,  each  officer  of  the  Company who signs the registration statement, each
director  of  the  Company,  each  underwriter  and each person who controls any
underwriter  within  the  meaning  of  the 1933 Act, against all losses, claims,
damages  or liabilities, joint or several, to which the Company or such officer,
director,  underwriter  or  controlling person may become subject under the 1933
Act  or  otherwise,  insofar  as such losses, claims, damages or liabilities (or
actions  in respect thereof) arise out of or are based upon any untrue statement
or  alleged  untrue statement of any material fact contained in the registration
statement under which such Registrable Securities were registered under the 1933
Act  pursuant  to  Section  11,  any  preliminary prospectus or final prospectus
contained  therein,  or  any amendment or supplement thereof, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required  to  be  stated therein or necessary to make the statements therein not
misleading,  and  will  reimburse  the  Company and each such officer, director,
underwriter  and  controlling  person for any legal or other expenses reasonably
incurred  by  them  in connection with investigating or defending any such loss,
claim,  damage,  liability or action, provided, however, that the Seller will be
liable  hereunder in any such case if and only to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged  untrue  statement or omission or alleged omission made in reliance upon
and in conformity with information pertaining to such Seller, as such, furnished
in  writing  to  the  Company  by  such  Seller  specifically  for  use  in such
registration  statement  or prospectus, and provided, further, however, that the
liability  of  the  Seller  hereunder  shall  be  limited  to the gross proceeds
received  by  the Seller from the sale of Registrable Securities covered by such
registration  statement.

(c)     Promptly  after  receipt  by an indemnified party hereunder of notice of
the  commencement  of  any  action,  such indemnified party shall, if a claim in
respect  thereof  is to be made against the indemnifying party hereunder, notify
the  indemnifying  party  in  writing thereof, but the omission so to notify the
indemnifying  party shall not relieve it from any liability which it may have to
such  indemnified  party  other  than  under this Section 11.6(c) and shall only
relieve  it from any liability which it may have to such indemnified party under
this  Section  11.6(c),  except  and  only if and to the extent the indemnifying
party  is  prejudiced by such omission. In case any such action shall be brought
against  any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate in
and,  to  the  extent it shall wish, to assume and undertake the defense thereof
with  counsel satisfactory to such indemnified party, and, after notice from the
indemnifying  party  to  such indemnified party of its election so to assume and
undertake  the  defense  thereof,  the indemnifying party shall not be liable to
such  indemnified  party  under  this  Section  11.6(c)  for  any legal expenses
subsequently  incurred  by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation and of liaison with counsel
so  selected,  provided,  however,  that,  if  the defendants in any such action
include  both  the  indemnified  party  and  the  indemnifying  party  and  the
indemnified  party  shall have reasonably concluded that there may be reasonable
defenses  available  to  it  which  are  different  from  or additional to those
available to the indemnifying party or if the interests of the indemnified party
reasonably  may  be  deemed  to  conflict with the interests of the indemnifying
party,  the  indemnified parties, as a group, shall have the right to select one
separate  counsel and to assume such legal defenses and otherwise to participate
in  the  defense  of  such action, with the reasonable expenses and fees of such
separate  counsel  and  other  expenses  related  to  such  participation  to be
reimbursed  by  the  indemnifying  party  as  incurred.

(d)     In  order to provide for just and equitable contribution in the event of
joint  liability under the 1933 Act in any case in which either (i) a Seller, or
any  controlling  person of a Seller, makes a claim for indemnification pursuant
to  this  Section  11.6 but it is judicially determined (by the entry of a final
judgment  or  decree  by a court of competent jurisdiction and the expiration of
time  to  appeal  or  the  denial  of  the  last  right  of  appeal)  that  such
indemnification  may  not be enforced in such case notwithstanding the fact that
this  Section  11.6  provides  for  indemnification  in  such  case,  or  (ii)
contribution  under  the  1933  Act may be required on the part of the Seller or
controlling  person  of the Seller in circumstances for which indemnification is
not  provided  under this Section 11.6; then, and in each such case, the Company
and  the  Seller  will  contribute  to  the aggregate losses, claims, damages or
liabilities  to  which  they  may be subject (after contribution from others) in
such  proportion  so  that  the  Seller  is  responsible  only  for  the portion
represented  by  the percentage that the public offering price of its securities
offered  by the registration statement bears to the public offering price of all
securities  offered  by such registration statement, provided, however, that, in
any  such  case, (y) the Seller will not be required to contribute any amount in
excess  of  the  public  offering  price  of  all  such securities offered by it
pursuant  to  such registration statement; and (z) no person or entity guilty of
fraudulent  misrepresentation  (within  the meaning of Section 10(f) of the 1933
Act)  will  be  entitled  to  contribution from any person or entity who was not
guilty  of  such  fraudulent  misrepresentation.

11.7.     Delivery  of  Unlegended  Shares.
          --------------------------------

(a)     Within three (3) business days (such third business day, the "Unlegended
Shares  Delivery Date") after the business day on which the Company has received
(i)  a  notice that Registrable Securities have been sold either pursuant to the
Registration  Statement  or  Rule  144 under the 1933 Act, (ii) a representation
that  the  prospectus delivery requirements, or the requirements of Rule 144, as
applicable,  have  been  satisfied,  and  (iii)  the original share certificates
representing  the shares of Common Stock that have been sold, the Company at its
expense,  (y)  shall  deliver,  and  shall  cause  legal counsel selected by the
Company  to  deliver,  to  its  transfer  agent  (with  copies to Subscriber) an
appropriate  instruction and opinion of such counsel, for the delivery of shares
of  Common Stock without any legends including the legends set forth in Sections
4(e) and 4(g) above, issuable pursuant to any effective and current registration
statement  described  in  Section  11  of this Agreement or pursuant to Rule 144
under  the 1933 Act (the "Unlegended Shares"); and (z) cause the transmission of
the  certificates  representing  the  Unlegended Shares together with a legended
certificate  representing  the  balance of the unsold shares of Common Stock, if
any,  to  the  Subscriber  at  the  address specified in the notice of sale, via
express courier, by electronic transfer or otherwise on or before the Unlegended
Shares  Delivery  Date.

(b)     In  lieu of delivering physical certificates representing the Unlegended
Shares, if the Company's transfer agent is participating in the Depository Trust
Company  ("DTC")  Fast  Automated Securities Transfer program, upon request of a
Subscriber,  so  long as the certificates therefore do not bear a legend and the
Subscriber  is  not  obligated to return such certificate for the placement of a
legend  thereon,  the  Company  shall cause its transfer agent to electronically
transmit  the  Unlegended  Shares by crediting the account of Subscriber's prime
Broker  with  DTC  through its Deposit Withdrawal Agent Commission system.  Such
delivery  must  be  made  on  or  before  the  Unlegended  Shares Delivery Date.

(c)     The  Company  understands that a delay in the delivery of the Unlegended
Shares  pursuant to Section 11 hereof beyond the Unlegended Shares Delivery Date
could  result in economic loss to a Subscriber.  As compensation to a Subscriber
for  such  loss,  the  Company  agrees  to  pay late payment fees (as liquidated
damages  and not as a penalty) to the Subscriber for late delivery of Unlegended
Shares  in  the amount of $100 per business day after the Delivery Date for each
$10,000  of  purchase  price  of  the  Unlegended Shares subject to the delivery
default.  If  during any 360 day period, the Company fails to deliver Unlegended
Shares  as  required  by this Section 11.7 for an aggregate of thirty (30) days,
then each Subscriber or assignee holding Securities subject to such default may,
at  its option, require the Company to purchase all or any portion of the Shares
and Warrant Shares subject to such default at a price per share equal to 130% of
the Purchase Price of such Shares and Warrant Shares.  The Company shall pay any
payments incurred under this Section in immediately available funds upon demand.

(d)     In  addition  to  any  other  rights  available  to a Subscriber, if the
Company  fails  to  deliver  to  a  Subscriber Unlegended Shares within ten (10)
calendar  days  after  the  Unlegended  Shares  Delivery Date and the Subscriber
purchases (in an open market transaction or otherwise) shares of common stock to
deliver  in  satisfaction  of  a sale by such Subscriber of the shares of Common
Stock  which the Subscriber anticipated receiving from the Company (a "Buy-In"),
then  the  Company  shall  pay  in  cash  to  the Subscriber (in addition to any
remedies  available to or elected by the Subscriber) the amount by which (A) the
Subscriber's  total purchase price (including brokerage commissions, if any) for
the shares of common stock so purchased exceeds (B) the aggregate purchase price
of  the  shares  of  Common  Stock  delivered  to  the Company for reissuance as
Unlegended  Shares,  together  with interest thereon at a rate of 15% per annum,
accruing  until  such  amount  and  any accrued interest thereon is paid in full
(which  amount  shall  be paid as liquidated damages and not as a penalty).  For
example,  if  a  Subscriber  purchases  shares  of  Common  Stock having a total
purchase  price of $11,000 to cover a Buy-In with respect to $10,000 of purchase
price  of  shares  of  Common  Stock  delivered to the Company for reissuance as
Unlegended  Shares,  the Company shall be required to pay the Subscriber $1,000,
plus  interest.  The  Subscriber  shall  provide  the  Company  written  notice
indicating  the  amounts  payable  to  the  Subscriber in respect of the Buy-In.

12.     (a)     Right of First Refusal.  Until one hundred and eighty (180) days
                ----------------------
after  the  Actual  Effective Date of the Registration Statement (the "Exclusion
Period"),  the  Subscribers  shall be given not less than fourteen (14) business
days  prior  written  notice  of  any proposed sale by the Company of its common
stock  or  other  securities  or debt obligations, except in connection with (i)
employee  stock  options  or  compensation  plans,  (ii)  as  full  or  partial
consideration  in  connection  with  any  merger,  consolidation  or purchase of
substantially  all  of  the  securities  or  assets  of any corporation or other
entity,  or  (iii)  as  has  been  described  in  the  Reports  or Other Written
Information  filed  or delivered prior to the Initial Closing Date (collectively
"Excepted  Issuances").   The  Subscribers  shall  have  the  right  during  the
fourteen (14) business days following the notice to purchase such offered common
stock,  debt or other securities in accordance with the terms and conditions set
forth  in  the  notice  of  sale  in  the same proportion to each other as their
purchase  of  Notes in the Offering.  In the event such terms and conditions are
modified  during the notice period, the Subscribers shall be given prompt notice
of  such modification and shall have the right during the original notice period
or  for  a  period  of  fourteen  (14)  business  days  following  the notice of
modification,  whichever  is  longer,  to  exercise  such  right.

(b)     Offering  Restrictions.  Except  as  disclosed  in  the Reports or Other
        ----------------------
Written  Information  filed  with  the  Commission  or  made  available  to  the
Subscriber  prior  to  the  Initial Closing Date, or in connection with Excepted
Issuances,  the  Company  will  not  issue any equity, convertible debt or other
securities  convertible  into  common  stock on any terms more favorable to such
other  investor than any of the terms of the Offering, until after the Exclusion
Period without the prior written consent of Subscribers, holding the majority of
the  unconverted  principal  of  the  Notes and Purchase Price of issued Shares,
which  consent  may  be  withheld  for  any  reason.

(c)     Favored  Nations  Provision.   If,  at  any  time  a  Note or Warrant is
        ---------------------------
outstanding  or  Registrable  Securities are not then registered in an effective
Registration  Statement for unrestricted resale as required by Section 11 hereof
("Outstanding  Period"),  except  for  the Excepted Issuances, the Company shall
offer,  issue  or agree to issue any Common Stock or securities convertible into
or  exercisable for shares of Common Stock to any person, firm or corporation at
a  price per share or conversion or exercise price per share which shall be less
than  the  per  share  purchase price of the Shares, or upon any other term more
favorable  to  such  other  investor,  without the consent of a Subscriber still
holding  Securities, then the Subscriber is granted the right to modify any term
or  condition  of the Offering including but not limited to the Conversion Price
or  other  price  at  which Common Stock may be purchased upon conversion of the
Notes  and  exercise of the Warrants.  The rights of the Subscriber set forth in
this  Section  12(c)  are  in  addition  to  any other rights the Subscriber has
pursuant  to  this Agreement and any other agreement referred to or entered into
in  connection  herewith.

(d)     Maximum  Exercise  of  Rights.   In the event the exercise of the rights
        -----------------------------
described  in  Sections 12(a) or 12(c) would result in the issuance of an amount
of  common stock of the Company that would exceed the maximum amount that may be
issued  to  a Subscriber as described in Section 7.3 of this Agreement, then the
purchase  and/or issuance of such other Common Stock or Common Stock equivalents
of  the  Company  to  such Subscriber will be deferred in whole or in part until
such  time  as  such Subscriber is able to beneficially own such Common Stock or
Common  Stock  equivalents  without  exceeding  the  maximum amount set forth in
Section  7.3.  The  determination  of  when  such  Common  Stock or Common Stock
equivalents  may  be  issued  shall  be  made by each Subscriber as to only such
Subscriber.

13.     Security  Interest.  The Subscribers will be granted a security interest
        ------------------
in  all  the  assets  of the Company to be memorialized in a Security Agreement.
The  Company  will  execute  such  other  agreements,  documents  and  financing
statements  to be filed at the Company's expense with such jurisdictions, states
and  counties  designated by the Subscribers.  The Company will also execute all
such  documents reasonably necessary in the opinion of Subscriber to memorialize
and  further protect the security interest described herein.  A form of Security
Agreement  is  annexed  hereto  as  EXHIBIT  D.  The  Subscribers will appoint a
Collateral  Agent to represent them collectively in connection with the security
interest  to  be  granted  in  the  Company's  assets.  The  appointment will be
pursuant  to  a Collateral Agent Agreement, a form of which is annexed hereto as
EXHIBIT  E.

14.     Miscellaneous.
        -------------

(a)     Notices.  All notices, demands, requests, consents, approvals, and other
        -------
communications  required  or permitted hereunder shall be in writing and, unless
otherwise  specified  herein,  shall be (i) personally served, (ii) deposited in
the  mail,  registered  or certified, return receipt requested, postage prepaid,
(iii)  delivered  by reputable air courier service with charges prepaid, or (iv)
transmitted  by  hand  delivery,  telegram, or facsimile, addressed as set forth
below  or to such other address as such party shall have specified most recently
by  written  notice.  Any notice or other communication required or permitted to
be  given hereunder shall be deemed effective (a) upon hand delivery or delivery
by facsimile, with accurate confirmation generated by the transmitting facsimile
machine,  at  the address or number designated below (if delivered on a business
day  during  normal  business hours where such notice is to be received), or the
first  business  day  following  such  delivery  (if  delivered  other than on a
business  day  during normal business hours where such notice is to be received)
or  (b)  on  the  second  business  day following the date of mailing by express
courier  service,  fully  prepaid,  addressed  to  such  address, or upon actual
receipt  of  such  mailing, whichever shall first occur.  The addresses for such
communications  shall  be:  (i)  if  to  the  Company,  to: Imaging Technologies
Corporation,  17075 Via Del Campo, San Diego, California 92127, telecopier (858)
613-1311,  with  a  copy  by  telecopier  only to: Naccarato & Associates, 19600
Fairchild,  Suite 260, Irvine, CA 92612, Attn: Owen Naccarato, Esq., telecopier:
(949)  851-9262,  (ii)  if  to  the  Subscribers, to: the address and telecopier
number  indicated  on  the signature page hereto, with a copy by telecopier only
to:  Grushko  &  Mittman, P.C., 551 Fifth Avenue, Suite 1601, New York, New York
10176,  telecopier  number: (212) 697-3575, and (iii) if to the Finders, to: the
addresses  and  telecopier  numbers  set  forth  on  Schedule  8(b).

(b)     Closing.  The consummation of the transactions contemplated herein shall
        -------
take  place  at  the offices of Grushko & Mittman, P.C., 551 Fifth Avenue, Suite
1601,  New  York,  New  York  10176,  upon the satisfaction of all conditions to
Closing  set  forth  in  this  Agreement.

(c)     Entire  Agreement;  Assignment.  This  Agreement  and  other  documents
        ------------------------------
delivered  in  connection  herewith  represent  the entire agreement between the
parties hereto with respect to the subject matter hereof and may be amended only
by  a writing executed by both parties.  Neither the Company nor the Subscribers
have  relied  on  any  representations  not  contained  or  referred  to in this
Agreement  and  the  documents  delivered  herewith.   No right or obligation of
either  party  shall  be  assigned by that party without prior notice to and the
written  consent  of  the  other  party.

(d)      Counterparts/Execution.  This  Agreement  may be executed in any number
        -----------------------
of  counterparts  and  by  the  different  signatories  hereto  on  separate
counterparts,  each of which, when so executed, shall be deemed an original, but
all  such  counterparts  shall constitute but one and the same instrument.  This
Agreement  may  be  executed  by  facsimile signature and delivered by facsimile
transmission.

(e)     Law  Governing  this Agreement.  This Agreement shall be governed by and
        ------------------------------
construed in accordance with the laws of the State of New York without regard to
principles of conflicts of laws.  Any action brought by either party against the
other  concerning  the  transactions  contemplated  by  this  Agreement shall be
brought only in the state courts of New York or in the federal courts located in
the state of New York.  The parties and the individuals executing this Agreement
and  other  agreements referred to herein or delivered in connection herewith on
behalf  of  the  Company  agree to submit to the jurisdiction of such courts and
waive trial by jury.  The prevailing party shall be entitled to recover from the
other  party  its  reasonable  attorney's fees and costs.  In the event that any
provision  of  this  Agreement  or  any  other agreement delivered in connection
herewith  is  invalid  or  unenforceable under any applicable statute or rule of
law,  then  such provision shall be deemed inoperative to the extent that it may
conflict  therewith  and  shall be deemed modified to conform to such statute or
rule  of law.  Any such provision which may prove invalid or unenforceable under
any  law  shall not affect the validity or enforceability of any other provision
of  any  agreement.

(f)     Specific  Enforcement,  Consent  to  Jurisdiction.  The  Company  and
        -------------------------------------------------
Subscriber  acknowledge  and  agree  that  irreparable damage would occur in the
event  that  any  of  the  provisions  of  this  Agreement were not performed in
accordance  with  their  specific  terms  or  were  otherwise  breached.  It  is
accordingly  agreed  that  the  parties  shall  be  entitled to an injunction or
injunctions  to prevent or cure breaches of the provisions of this Agreement and
to  enforce  specifically the terms and provisions hereof or thereof, this being
in  addition  to any other remedy to which any of them may be entitled by law or
equity.  Subject  to  Section  14(e)  hereof, each of the Company and Subscriber
hereby  waives, and agrees not to assert in any such suit, action or proceeding,
any  claim  that it is not personally subject to the jurisdiction of such court,
that  the suit, action or proceeding is brought in an inconvenient forum or that
the  venue  of  the  suit,  action  or  proceeding is improper.  Nothing in this
Section  shall  affect  or  limit any right to serve process in any other manner
permitted  by  law.

(g)     Independent  Nature  of  Subscribers'  Obligations  and  Rights.  The
        ----------------------------------------------------------------
obligations  of  each  Subscriber  hereunder  are several and not joint with the
obligations  of  any other Subscriber hereunder, and no such Subscriber shall be
responsible  in  any  way  for  the  performance of the obligations of any other
hereunder.

<PAGE>
                  SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT (A)
                  --------------------------------------------

Please  acknowledge  your  acceptance of the foregoing Subscription Agreement by
signing  and  returning  a  copy  to the undersigned whereupon it shall become a
binding  agreement  between  us.

IMAGING  TECHNOLOGIES  CORPORATION
A  Delaware  Corporation

By:_________________________________
     Name:
     Title:

Dated:  December  _____,  2003

SUBSCRIBER

ALPHA  CAPITAL  AKTIENGESELLSCHAFT
Pradafant  7
9490  Furstentums
Vaduz,  Lichtenstein

INITIAL  CLOSING  NOTE  (INITIAL  CLOSING  PURCHASE  PRICE)

$225,000.00

WARRANTS  ISSUABLE  ON  INITIAL  CLOSING  DATE

4,500,000

SECOND  CLOSING  NOTE  (SECOND  CLOSING  PURCHASE  PRICE):

$337,500.00

WARRANTS  ISSUABLE  ON  SECOND  CLOSING  DATE

6,750,000

<PAGE>
                  SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT (B)
                  --------------------------------------------

Please  acknowledge  your  acceptance of the foregoing Subscription Agreement by
signing  and  returning  a  copy  to the undersigned whereupon it shall become a
binding  agreement  between  us.

IMAGING  TECHNOLOGIES  CORPORATION
A  Delaware  Corporation

By:_________________________________
     Name:
     Title:

Dated:  December  _____,  2003

SUBSCRIBER

GAMMA  OPPORTUNITY  CAPITAL  PARTNERS,  LP
British  Colonial  Centre  of  Commerce
One  Bay  Street,  Suite  401
Nassau  (NP),  The  Bahamas
Vaduz,  Lichtenstein

INITIAL  CLOSING  NOTE  (INITIAL  CLOSING  PURCHASE  PRICE)

$225,000.00

WARRANTS  ISSUABLE  ON  INITIAL  CLOSING  DATE

4,500,000

SECOND  CLOSING  NOTE  (SECOND  CLOSING  PURCHASE  PRICE):

$337,500.00

WARRANTS  ISSUABLE  ON  SECOND  CLOSING  DATE

6,750,000

<PAGE>
                  SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT (C)
                  --------------------------------------------

Please  acknowledge  your  acceptance of the foregoing Subscription Agreement by
signing  and  returning  a  copy  to the undersigned whereupon it shall become a
binding  agreement  between  us.

IMAGING  TECHNOLOGIES  CORPORATION
A  Delaware  Corporation

By:_________________________________
     Name:
     Title:

Dated:  December  _____,  2003

SUBSCRIBER

LONGVIEW  FUND,  L.P.
1325  Howard  Avenue  #422
Burlingame,  CA  94010

INITIAL  CLOSING  NOTE  (INITIAL  CLOSING  PURCHASE  PRICE)

$150,000.00

WARRANTS  ISSUABLE  ON  INITIAL  CLOSING  DATE

3,000,000

SECOND  CLOSING  NOTE  (SECOND  CLOSING  PURCHASE  PRICE):

$300,000.00

WARRANTS  ISSUABLE  ON  SECOND  CLOSING  DATE

6,000,000

<PAGE>
                  SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT (D)
                  --------------------------------------------

Please  acknowledge  your  acceptance of the foregoing Subscription Agreement by
signing  and  returning  a  copy  to the undersigned whereupon it shall become a
binding  agreement  between  us.

IMAGING  TECHNOLOGIES  CORPORATION
A  Delaware  Corporation

By:_________________________________
     Name:
     Title:

Dated:  December  _____,  2003


SUBSCRIBER

LONGVIEW  FUND,  L.P.
1325  Howard  Avenue  #422
Burlingame,  CA  94010

INITIAL  CLOSING  NOTE  (INITIAL  CLOSING  PURCHASE  PRICE)

$150,000.00

WARRANTS  ISSUABLE  ON  INITIAL  CLOSING  DATE

3,000,000

SECOND  CLOSING  NOTE  (SECOND  CLOSING  PURCHASE  PRICE):

$225,000.00

WARRANTS  ISSUABLE  ON  SECOND  CLOSING  DATE

4,500,000

<PAGE>
                         LIST OF EXHIBITS AND SCHEDULES
                         ------------------------------

Exhibit  A          Form  of  Warrant
Exhibit  B          Escrow  Agreement
Exhibit  C          Form  of  Legal  Opinion
Exhibit  D          Form  of  Security  Agreement
Exhibit  E          Form  of  Collateral  Agent  Agreement
Schedule  5(d)      Additional  Issuances
Schedule  5(q)      Undisclosed  Liabilities
Schedule  5(s)      Capitalization
Schedule  8(b)      Finders
Schedule  9(e)      Use  of  Proceeds
Schedule  11.1      Other  Securities  to  be  Registered

<PAGE>
                             SCHEDULE 8(B) - FINDERS
                             -----------------------

<TABLE>
<CAPTION>
<S>                                <C>
FINDER. . . . . . . . . . . . . .  10% FINDER'S FEE PAYABLE IN CONNECTION WITH INVESTMENT BY

LIBRA FINANCE, S.A. . . . . . . .  ALPHA CAPITAL AKTIENGESELLSCHAFT
P.O. Box 4603 . . . . . . . . . .  Pradafant 7
Zurich, Switzerland . . . . . . .  9490 Furstentums
Fax: 323-468-8307 . . . . . . . .  Vaduz, Lichtenstein
Fax: 011-42-32323196

LIBRA FINANCE, S.A. . . . . . . .  GAMMA OPPORTUNITY CAPITAL PARTNERS, LP
P.O. Box 4603 . . . . . . . . . .  British Colonial Centre of Commerce
Zurich, Switzerland . . . . . . .  One Bay Street, Suite 401
Fax: 323-468-8307 . . . . . . . .  Nassau (NP), The Bahamas
Fax:  (242) 322-6657

BI-COASTAL CONSULTING CORP.
25 Longview Court . . . . . . . .  LONGVIEW FUND, L.P.
Hillsborough, CA 94010. . . . . .  1325 Howard Avenue #422
Fax: (650) 343-2506 . . . . . . .  Burlingame, CA 94010
Fax: (650) 343-2506

STONESTREET CORPORATION . . . . .  STONESTREET LIMITED PARTNERSHIP
C/o Canaccord Capital Corporation  C/o Canaccord Capital Corporation
320 Bay Street, Suite 1300. . . .  320 Bay Street, Suite 1300
Toronto, Ontario M5H 4A6, Canada.  Toronto, Ontario M5H 4A6, Canada
Fax: (416) 956-8989 . . . . . . .  Fax: (416) 956-8989

</TABLE>