sec document




                                                                    EXHIBIT 10.1

            THE  SECURITIES  OFFERED HEREBY HAVE NOT BEEN  REGISTERED  UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE  "SECURITIES  ACT"),  OR ANY OTHER STATE
SECURITIES LAWS AND ARE SUBJECT TO RESTRICTION ON TRANSFERABILITY AND RESALE AND
MAY NOT BE  PLEDGED,  TRANSFERRED  OR  RESOLD  EXCEPT  AS  PERMITTED  UNDER  THE
SECURITIES ACT AND SUCH LAWS PURSUANT TO A  REGISTRATION  STATEMENT OR EXEMPTION
THEREFROM.  THE  SECURITIES  HAVE  NOT  BEEN  APPROVED  OR  DISAPPROVED  BY  THE
SECURITIES AND EXCHANGE COMMISSION (THE "SEC"), ANY STATE SECURITIES  COMMISSION
OR OTHER REGULATORY AUTHORITY,  NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED
UPON OR  ENDORSED  THIS  OFFERING OR THE  ACCURACY  OR ADEQUACY OF THE  OFFERING
DOCUMENTS. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

            IT IS INTENDED THAT THE UNITS OFFERED  HEREBY WILL BE MADE AVAILABLE
ONLY TO ACCREDITED INVESTORS, AS DEFINED IN SECTION 2(15) OF THE SECURITIES ACT,
AND RULE 501 THEREUNDER.  THE UNITS OFFERED HEREBY ARE BEING OFFERED PURSUANT TO
AN  EXEMPTION  FROM THE  REGISTRATION  REQUIREMENTS  OF THE  SECURITIES  ACT AND
APPLICABLE  STATE SECURITIES LAWS. SUCH EXEMPTIONS LIMIT THE NUMBER AND TYPES OF
INVESTORS TO WHICH THE OFFERING WILL BE MADE AND RESTRICT SUBSEQUENT TRANSFER OF
THE UNITS.


                          SECURITIES PURCHASE AGREEMENT

            This  Subscription  Agreement  (this  "Agreement")  is made  between
Datatec  Systems,  Inc.,  a  Delaware  corporation  (the  "Company"),   and  the
undersigned  prospective  purchaser (the "Purchaser") who is subscribing  hereby
for units of the Company's securities (the "Units"), each Unit consisting of two
shares of the Company's  common  stock,  par value $0.001 per share (the "Common
Stock"),  and one  warrant,  in the form of  Exhibit A attached  hereto  (each a
"Warrant"  and  collectively  the  "Warrants"),  to purchase one share of Common
Stock with an exercise price at a premium of 30% to the Stock Purchase Price (as
defined below). The Company desires to offer and sell (the "Offering") 2,000,000
Units (the "Offering  Amount"),  with each Unit having a purchase price per Unit
equal to two times the  Stock  Purchase  Price  (as  hereinafter  defined)  (the
"Offering  Price");  provided,  however,  that the Company and  Fahnestock & Co.
Inc.,  the placement  agent for this Offering  (the  "Placement  Agent") may, by
mutual  agreement,  increase  the  Offering  Amount to an  amount  not to exceed
2,500,000  Units.  For purposes of this Agreement,  "Stock Purchase Price" shall
mean $1.25 ($2.50 purchase price for Units), which has been determined by mutual
agreement of the Company and the Placement  Agent at the closing of the Offering
(the  "Closing").  The shares of Common  Stock,  the  Warrants and the shares of
Common Stock  issuable upon exercise of the Warrants (the "Warrant  Shares") are
sometimes herein collectively referred to as the "Securities."







            NOW,  THEREFORE,  in  consideration  of  the  mutual  covenants  and
agreements  contained  in  this  Agreement,  and for  other  good  and  valuable
consideration  the receipt and  adequacy  of which is hereby  acknowledged,  the
Company and the Purchaser agree as follows:

A.          SUBSCRIPTION

            (1) The Purchaser, intending to be legally bound, hereby irrevocably
subscribes  for and  agrees to  purchase  Units in the amount  indicated  on the
signature page hereto (the "Subscription  Amount").  The Purchaser shall deliver
the  Subscription  Amount  within  five  (5)  business  days of the date of this
Agreement by  certified or bank  cashier's  check  payable to "Datatec  Systems,
Inc." or by wire  transfer to the Placement  Agent's  escrow agent in accordance
with the wire transfer  instructions  attached hereto as Schedule A and shall be
held in the manner described in paragraph (2) below. The Purchaser  acknowledges
that the actual number of Units that the Purchaser will be issued at the Closing
will be equal to the Subscription Amount divided by the Offering Price,  rounded
down to the nearest whole number of Units.

            (2) All payments for Units made by the Purchaser as  contemplated by
paragraph  (1)  above  will  be  deposited  as  soon  as  practicable   for  the
undersigned's benefit in a non-interest bearing escrow account. The payment will
be returned  promptly,  without  interest  or  deduction,  if the  undersigned's
subscription  is rejected  or the  Offering is  terminated  for any reason.  The
Company  shall hold the  Closing at any time during the period  beginning  after
subscriptions  for 2,000,000  Units have been accepted,  but no later than April
28, 2003 (the "Termination Date"). Furthermore, upon the mutual agreement of the
Company and the Placement  Agent  following  written notice to the Purchaser and
receipt of the Purchaser's written consent, the Company may accept subscriptions
aggregating fewer than 2,000,000 Units.  Subsequent  closings may be held at any
time  after  the  Closing  and  on or  before  the  Termination  Date  (each,  a
"Subsequent  Closing")  without regard to the aggregate  amount of subscriptions
for Units  received by the  Company.  The Company  may,  with the consent of the
Placement Agent, terminate the Offering within ninety (90) days from the date of
the Memorandum (as defined below).

            (3) At the Closing,  the Company shall:  (i) prepare for delivery to
the Purchaser  stock  certificates  representing  the shares of Common Stock and
warrant certificates  representing the Warrants contained in the Units purchased
under this Agreement against payment in full by the undersigned of the aggregate
subscription  amount  therefor;  (ii)  deliver to the  Purchaser  a  certificate
stating that the representations and warranties made by the Company in Section C
of this Agreement  were true and correct in all material  respects when made and
are  true and  correct  in all  material  respects  on the  date of the  Closing
relating to the Units  subscribed  for pursuant to this Agreement as though made
on and as of the  date of such  Closing;  (iii)  cause  to be  delivered  to the
Purchaser an opinion of Olshan  Grundman  Frome  Rosenzweig & Wolosky LLP in the
form of Exhibit C hereto;.  and (iv) the  Company  shall have  issued the public
announcement referenced in Section D6 of this Agreement.

            (4) The Purchaser  acknowledges and agrees that this Agreement shall
be  binding  upon  the  Purchaser  upon the  submission  to the  Company  or the
Placement Agent of the  Purchaser's  signed  counterpart  signature page to this
Agreement  unless and until the Company or the Placement  Agent shall reject the
subscription being made hereby by the Purchaser.

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            (5) The Purchaser acknowledges and agrees that the purchase of Units
by the  Purchaser  pursuant  to the  Offering  is  subject  to all the terms and
conditions  set forth in this Agreement as well as in the Memorandum (as defined
below).

B.          REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

            Each of the Purchasers hereby represents and warrants to the Company
and the Placement Agent, and agrees with the Company as follows:

            (1) The Purchaser has been furnished with and has carefully read the
Company's  Confidential  Private Placement Memorandum dated February 6, 2003, as
supplemented  (together  with all documents and filings  attached  thereto,  the
"Memorandum") and this Agreement (collectively the "Offering Documents"), and is
familiar  with and  understands  the terms of the  Offering.  The  Purchaser has
carefully considered and has discussed with the Purchaser's  professional legal,
tax, accounting and financial  advisors,  to the extent the Purchaser has deemed
necessary,  the  suitability  of an investment in the Units for the  Purchaser's
particular tax and financial  situation and has determined  that the Units being
subscribed for by the Purchaser are a suitable investment for the Purchaser.

            (2) The  Purchaser  acknowledges  that (i) the Purchaser has had the
right to request copies of any documents,  records, and books pertaining to this
investment  and (ii) any such  documents,  records and books that the  Purchaser
requested  have  been  made  available  for  inspection  by the  Purchaser,  the
Purchaser's attorney, accountant or advisor(s).

            (3)  The  Purchaser  and  the  Purchaser's  advisor(s)  have  had  a
reasonable   opportunity   to  ask   questions  of  and  receive   answers  from
representatives  of the  Company  or  persons  acting on  behalf of the  Company
concerning  the Offering and all such  questions  have been answered to the full
satisfaction of the Purchaser.

            (4) The  Purchaser  is not  subscribing  for Units as a result of or
subsequent  to  any  advertisement,   article,  notice  or  other  communication
published  in any  newspaper,  magazine  or  similar  media  or  broadcast  over
television or radio or presented at any seminar or meeting.

            (5)  The   Purchaser   has  not   been   furnished   with  any  oral
representation  or oral information in connection with the offering of the Units
that is not contained in the Offering Documents.

            (6) If the Purchaser is a natural person,  the Purchaser has reached
the age of majority in the state in which the  Purchaser  resides,  has adequate
means  of  providing   for  the   Purchaser's   current   financial   needs  and
contingencies,  is able to bear the substantial  economic risks of an investment
in the Units for an indefinite period of time, has no need for liquidity in such
investment and could afford a complete loss of such investment.

            (7)  The  Purchaser  has  sufficient  knowledge  and  experience  in
financial,  tax and  business  matters to enable the  Purchaser  to utilize  the
information  made available to the Purchaser in connection  with the Offering to
evaluate  the  merits  and  risks of an  investment  in the Units and to make an
informed  investment  decision with respect to an investment in the Units on the
terms described in the Offering Documents.

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            (8)  The   Purchaser   is  not   relying   on  any   statements   or
representations  made  by the  Company,  the  Placement  Agent  or any of  their
respective  affiliates  with respect to economic  considerations  involved in an
investment in the Units.

            (9) The Purchaser  will not sell or otherwise  transfer the Units or
the component  Securities without registration under the Securities Act of 1933,
as amended (the  "Securities  Act"), or applicable  state  securities laws or an
exemption therefrom.  The Purchaser  acknowledges that neither the offer or sale
of the  Units  or the  component  Securities  have  been  registered  under  the
Securities  Act or  under  the  securities  laws  of any  state.  The  Purchaser
represents and warrants that the Purchaser is acquiring the Units, including the
component  Securities,  for the Purchaser's  own account as principal,  not as a
nominee or agent, for investment purposes only and not with a view toward resale
or  distribution  within  the  meaning  of the  Securities  Act and,  where  the
Purchaser  is a  natural  person,  no  other  person  has a direct  or  indirect
beneficial  interest in such Units.  Further,  the  Purchaser  does not have any
contract,  undertaking,  agreement  or  arrangement  with  any  person  to sell,
transfer  or grant  participations  to such  person or to any third  person with
respect  to any of the  Units  for  which  the  Purchaser  is  subscribing.  The
Purchaser  has not offered or sold the Units or the component  Securities  being
acquired  nor  does  the  Purchaser  have  any  present  intention  of  selling,
distributing  or otherwise  disposing of such Units or the component  Securities
either currently or after the passage of a fixed or determinable  period of time
or  upon  the  occurrence  or  non-occurrence  of  any  predetermined  event  or
circumstances  in violation of the  Securities  Act. The Purchaser is aware that
the Units and the component  Securities  are not currently  eligible for sale in
reliance upon Rule 144 promulgated under the Securities Act.

            (10)  The  Purchaser  recognizes  that an  investment  in the  Units
involves substantial risks,  including the possible loss of the entire amount of
such investment, and has determined that the Units are a suitable investment for
the  Purchaser.  The Purchaser has carefully  read and considered the Memorandum
and  all  exhibits  attached  thereto  and  has  taken  full  cognizance  of and
understands all of the risks related to the purchase of the Units.

            (11) The Purchaser  acknowledges that the certificates  representing
the Securities comprising the Units shall be stamped or otherwise imprinted with
a legend substantially in the following form: "THE SECURITIES REPRESENTED HEREBY
HAVE NOT BEEN  REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS AMENDED,  OR ANY
STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE
OFFERED, SOLD, TRANSFERRED,  PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO
AN  EFFECTIVE  REGISTRATION  UNDER SUCH ACT OR AN EXEMPTION  FROM  REGISTRATION,
WHICH, IN THE OPINION OF COUNSEL TO THE CORPORATION, IS AVAILABLE."

            (12) If this  Agreement  is executed  and  delivered  on behalf of a
partnership,  corporation,  trust or estate: (i) such partnership,  corporation,
trust or  estate  has the full  legal  right and  power  and all  authority  and
approval  required  (a) to execute  and  deliver  this  Agreement  and all other
instruments  executed  and  delivered  by  or on  behalf  of  such  partnership,
corporation,  trust or estate in connection with the purchase of its Units,  and
(b) to purchase and hold such Units;  (ii) the signature of the party signing on

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behalf of such  partnership,  corporation,  trust or estate is binding upon such
partnership,   corporation,   trust  or  estate;  and  (iii)  such  partnership,
corporation  or trust has not been formed for the specific  purpose of acquiring
such Units,  unless each  beneficial  owner of such  entity is  qualified  as an
accredited   investor  within  the  meaning  of  Rule  501(a)  of  Regulation  D
promulgated   under   the   Securities   Act  and  has   submitted   information
substantiating such individual qualification.

            (13) If the Purchaser is a retirement plan or is investing on behalf
of a retirement plan, the Purchaser acknowledges that an investment in the Units
poses  additional  risks  including the inability to use losses  generated by an
investment in the Units to offset taxable income.

            (14) The information  contained in the  questionnaire in the form of
Exhibit D attached  hereto  delivered by the Purchaser in  connection  with this
Agreement (the  "Questionnaire")  is complete and accurate in all respects.  The
Purchaser  shall  indemnify  and hold  harmless  the Company  and each  officer,
director or control person of any such entity, who is or may be a party or is or
may be  threatened  to be made a party to any  threatened,  pending or completed
action,  suit  or  proceeding,   whether  civil,  criminal,   administrative  or
investigative,   by  reason  of  or   arising   from  any   actual  or   alleged
misrepresentation  or  misstatement  of facts or omission to  represent or state
facts  made or  alleged  to have been made by the  Purchaser  to the  Company or
omitted  or  alleged  to have been  omitted  by the  Purchaser,  concerning  the
Purchaser  or the  Purchaser's  authority  to invest or  financial  position  in
connection  with  the  Offering,   including,   without  limitation,   any  such
misrepresentation,  misstatement  of omission  contained in the Agreement or any
other  document  submitted by the Purchaser,  against  losses,  liabilities  and
expenses for which the Company or any officer, director or control person of any
such  entity has not  otherwise  been  reimbursed  (including  attorney's  fees,
judgments,  fines  and  amounts  paid in  settlement)  actually  and  reasonably
incurred  by the  Company  or  such  officer,  director  or  control  person  in
connection with such action, suit or proceeding.

            (15)  No  representations  or  warranties  have  been  made  to  the
Purchaser  by the  Company,  or  any  officer,  employee,  agent,  affiliate  or
subsidiary  of the  Company,  other  than  the  representations  of the  Company
contained herein,  and in subscribing for the Units the Purchaser is not relying
upon any representations other than those contained in the Memorandum or in this
Agreement.

            (16)  The  Purchaser  represents  and  warrants,  to the best of its
knowledge, that other than the Placement Agent and its soliciting dealers, which
include  Cardinal  Securities,  LLC amongst others,  no finder,  broker,  agent,
financial advisor or other intermediary, nor any purchaser representative or any
broker-dealer  acting as a broker, is entitled to any compensation in connection
with the transactions contemplated by this Agreement.

C.          REPRESENTATIONS AND WARRANTIES OF THE COMPANY

            The Company hereby  represents and warrants to the Purchaser and the
Placement Agent that:

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            (1) ORGANIZATION, GOOD STANDING AND QUALIFICATION.  The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has full  corporate  power and authority to conduct
its  business  as  currently  conducted.  The  Company is duly  qualified  to do
business as a foreign  corporation and is in good standing in all  jurisdictions
in which the  character  of the  property  owned or leased or the  nature of the
business transacted by it makes qualification necessary except where the failure
to be so qualified  would not have a material  adverse  effect on the  business,
properties,  prospects,  financial  condition  or results of  operations  of the
Company (a "Material Adverse Effect").

            (2)  CAPITALIZATION.  The  authorized  capital  stock of the Company
consists of the  following:  (i) 75,000,000  shares of Common Stock,  $0.001 par
value per share, of which there were 36,688,906 shares issued and outstanding as
of April 8, 2003; and (ii) 4,000,000 shares of Preferred Stock, $0.001 par value
per share,  of which there were no shares issued and  outstanding as of April 8,
2003. As of April 8, 2003, the Company had reserved  4,519,458  shares of Common
Stock subject to outstanding,  unexercised  options and 435,000 shares of Common
Stock subject to outstanding  warrants.  In addition,  the Company has agreed to
issue to the  Placement  Agent a warrant  (the  "Placement  Agent  Warrant")  to
purchase  an amount of shares of Common  Stock  equal to 8% of the  number of as
converted  shares of Common  Stock  underlying  the Units sold in the  Offering.
Other than as set forth above or as contemplated in this Agreement, there are no
other  options,  warrants,  calls,  rights,  commitments  or  agreements  of any
character  to which the  Company is a party or by which  either  the  Company is
bound or obligating the Company to issue,  deliver,  sell, repurchase or redeem,
or cause to be issued,  delivered,  sold, repurchased or redeemed, any shares of
the capital stock of the Company or obligating  the Company to grant,  extend or
enter into any such option, warrant, call, right, commitment or agreement.

            (3) ISSUANCE. The issuance of the shares of Common Stock included in
the Units has been duly and validly  authorized by all  necessary  corporate and
shareholder  action and,  when issued and paid for  pursuant to this  Agreement,
will be validly issued, fully paid and non-assessable  shares of Common Stock of
the Company.  The issuance of the Warrant Shares pursuant to the exercise of the
Warrants  included  in the  Units has been duly and  validly  authorized  by all
necessary  corporate  and  shareholder  action  and,  when  issued  and paid for
pursuant to the terms of the Warrants,  will be validly  issued,  fully paid and
non-assessable shares of Common Stock of the Company. The issuance of the shares
of Common Stock and the  Warrants is being done in  compliance  with  exemptions
from registration under the Securities Act of 1933, as amended.

            (4)  AUTHORIZATION;  ENFORCEABILITY.  The Company has all  corporate
right,  power and authority to enter into this  Agreement and to consummate  the
transactions  contemplated  hereby.  All  corporate  action  on the  part of the
Company,  its  directors  and  stockholders  necessary  for  the  authorization,
execution,  delivery and  performance  of this  Agreement  by the  Company,  the
authorization,  sale, issuance and delivery of the Units contemplated herein and
the  performance  of the Company's  obligations  hereunder has been taken.  This
Agreement has been duly  executed and  delivered by the Company and  constitutes
the legal, valid and binding obligations of the Company, enforceable against the
Company in  accordance  with its  terms,  except as such  enforceability  may be
limited by applicable  bankruptcy,  insolvency,  or similar laws relating to, or

                                       6





affecting  generally the  enforcement of,  creditors'  rights and remedies or by
other equitable principles of general application.  The issuance and sale of the
Units contemplated  hereby will not give rise to any preemptive rights or rights
of first refusal on behalf of any person.

            (5) NO CONFLICT; GOVERNMENTAL AND OTHER CONSENTS.

                (a) The execution and delivery by the Company of this  Agreement
and the consummation of the transactions  contemplated hereby will not result in
the violation of any law, statute,  rule,  regulation,  order, writ, injunction,
judgment  or decree of any court or  governmental  authority  to or by which the
Company is bound,  or of any provision of the  Certificate of  Incorporation  or
Bylaws of the  Company,  and will not  conflict  with,  or result in a breach or
violation of, any of the terms or provisions of, or constitute  (with due notice
or lapse of time or both) a default under, any lease, loan agreement,  mortgage,
security  agreement,  trust  indenture or other agreement or instrument to which
the Company is a party or by which it is bound or to which any of its properties
or assets is subject,  nor result in the creation or imposition of any lien upon
any of the properties or assets of the Company.

                (b) No consent,  approval,  authorization  or other order of any
governmental  authority or other  third-party  is required to be obtained by the
Company in  connection  with the  authorization,  execution and delivery of this
Agreement or with the  authorization,  issue and sale of the Units,  except such
filings  as  may be  required  to be  made  with  the  Securities  and  Exchange
Commission  (the  "SEC"),  Nasdaq  and with any  state  or  foreign  blue sky or
securities regulatory authority,  and except for such required consents, if any,
as have been obtained.

            (6) LITIGATION.  There are no pending, or to the Company's knowledge
threatened,  legal or  governmental  proceedings  against the Company which,  if
adversely determined, could have a Material Adverse Effect on the Company, other
than as set forth in the  Company's  annual  report on Form 10-K for the  fiscal
year ended April 30, 2002 (the "2002 Form 10-K").

            (7) REPORTS.  All reports required to be filed by the Company within
the two years prior to the date of this Agreement (the "SEC Reports")  under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), have been duly
filed with the SEC, complied at the time of filing in all material respects with
the  requirements of their respective forms and, except to the extent updated or
superseded by any  subsequently  filed report,  were complete and correct in all
material  respects as of the dates at which the  information  was  furnished and
contained (as of such dates) no untrue statements of a material fact nor omitted
to state any material fact necessary in order to make the  statements  contained
therein,  in  light  of the  circumstances  under  which  they  were  made,  not
misleading.

            (8) FINANCIAL  INFORMATION.  The Company's financial statements that
appear in the Memorandum and in the SEC Reports have been prepared in accordance
with United States generally  accepted  accounting  principles  (except that the
financial  statements that are not audited do not have notes thereto) applied on
a  consistent  basis  throughout  the  periods   indicated  and  such  financial
statements  fairly  present  (subject,  in the  case  of the  unaudited  interim
financial  statements,  to normal,  recurring year-end audit adjustments) in all
material  respects the  financial  condition  and results of  operations  of the
Company as of the dates and for the periods indicated therein.

                                       7





            (9)  ABSENCE OF  CERTAIN  CHANGES.  Since the date of the  Company's
financial  statements  in the 2002 Form 10-K,  there has not  occurred any event
that has caused a material adverse effect on the assets, liabilities,  condition
(financial  or  otherwise)  or  results  of  operations  of the  Company  or any
occurrence,  circumstance  or  combination  thereof  that  reasonably  could  be
expected to result in such material adverse effect.

            (10) INVESTMENT COMPANY.  The Company is not an "investment company"
within the meaning of such term under the  Investment  Company  Act of 1940,  as
amended, and the rules and regulations of the SEC thereunder.

            (11) SUBSIDIARIES.  The SEC Reports set forth each subsidiary of the
Company,  showing the  jurisdiction of its  incorporation  or  organization  and
showing the percentage of each person's  ownership of the  outstanding  stock or
other  interests  of such  subsidiary.  For  the  purposes  of  this  Agreement,
"subsidiary" shall mean any company or other entity of which at least 50% of the
securities or other  ownership  interest  having  ordinary  voting power for the
election of directors or other persons  performing  similar functions are at the
time  owned  directly  or  indirectly  by  the  Company  or  any  of  its  other
subsidiaries.  Except as set forth in the SEC Reports, none of such subsidiaries
is a "significant subsidiary" as defined in Regulation S-X.

           (12)  INDEBTEDNESS.  The SEC Reports set forth as of the date thereof
all  outstanding  secured  and  unsecured  Indebtedness  of the  Company  or any
subsidiary,  or for which the Company or any  subsidiary  has  commitments.  For
purposes of this  Agreement,  "Indebtedness"  shall mean (a) any liabilities for
borrowed  money or amounts owed in excess of $25,000  (other than trade accounts
payable  incurred  in the  ordinary  course of  business),  (b) all  guaranties,
endorsements  and other  contingent  obligations in respect of  Indebtedness  of
others,  whether  or not the same are or should be  reflected  in the  Company's
balance  sheet (or the notes  thereto),  except  guaranties  by  endorsement  of
negotiable  instruments for deposit or collection or similar transactions in the
ordinary course of business;  and (c) the present value of any lease payments in
excess of $25,000 due under leases required to be capitalized in accordance with
GAAP.  Neither the Company nor any  subsidiary is in default with respect to any
Indebtedness.

            (13) CERTAIN FEES.  Other than fees payable to the Placement  Agent,
no brokers',  finders' or financial advisory fees or commissions will be payable
by the Company or any subsidiary with respect to the  transactions  contemplated
by this Agreement.

            (14)  MATERIAL  AGREEMENTS.  Except as set forth in the SEC Reports,
neither  the  Company  nor any  subsidiary  is a party  to any  written  or oral
contract, instrument, agreement, commitment,  obligation, plan or arrangement, a
copy of which  would be  required to be filed with the SEC as an exhibit to Form
10-K (each, a "Material  Agreement").  The Company and each of its  subsidiaries
has in all  material  respects  performed  all the  obligations  required  to be
performed  by them to date under the  foregoing  agreements,  have  received  no
notice of default and, to the best of the Company's knowledge are not in default
under any Material Agreement now in effect, the result of which could reasonably
be expected to cause a Material Adverse Effect.

                                       8





            (15)  TRANSACTIONS  WITH AFFILIATES.  Except as set forth in the SEC
Reports, there are no loans, leases, agreements,  contracts, royalty agreements,
management  contracts or  arrangements  or other  continuing  transactions  with
aggregate  obligations of any party  exceeding  $60,000 between (a) the Company,
any  subsidiary  or any of their  respective  customers  or suppliers on the one
hand, and (b) on the other hand, any officer,  employee,  consultant or director
of the Company,  or any of its subsidiaries,  or any person who would be covered
by Item 404(a) of  Regulation  S-K or any Company or other entity  controlled by
such officer, employee, consultant, director or person.

            (16) TAXES.  The Company and each of the  subsidiaries  has prepared
and filed all federal,  state, local,  foreign and other tax returns for income,
gross receipts,  sales, use and other taxes and custom duties ("Taxes") required
by law to be filed by it,  has paid or made  provisions  for the  payment of all
Taxes shown to be due and all additional  assessments,  and adequate  provisions
have been and are reflected in the  financial  statements of the Company and the
subsidiaries for all current Taxes and other charges to which the Company or any
subsidiary is subject and which are not  currently  due and payable,  except for
Taxes which, if unpaid,  individually or in the aggregate,  do not and would not
have a Material Adverse Effect on the Company or its subsidiaries.  None of such
tax returns contains an inaccuracy that would, individually or in the aggregate,
have a Material Adverse Effect on the Company or its  subsidiaries.  None of the
federal  income tax  returns of the Company or any  subsidiary  for the past six
years has been  audited by the  Internal  Revenue  Service.  The  Company has no
knowledge of any additional assessments, adjustments or contingent tax liability
(whether  federal,  state,  local or foreign) pending or threatened  against the
Company  or any  subsidiary  for any  period,  nor of any  basis  for  any  such
assessment, adjustment or contingency.

            (17) ENVIRONMENTAL MATTERS.  Except as would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect, (i) (a)
the Company and each of its  subsidiaries  is in compliance with and not subject
to any known liability under  applicable  Environmental  Laws (as defined below)
and (b) the Company is not aware of any fact,  circumstance  or  condition  that
could  reasonably be expected to cause the Company or any of its subsidiaries to
be subject to liability under any applicable Environmental Law, (ii) the Company
and each of its  subsidiaries  has made all  filings  and  provided  all notices
required under all applicable  Environmental Laws, and has, and is in compliance
in all  material  respects  with,  all  permits  required  under any  applicable
Environmental  Laws, each of which is in full force and effect,  (iii) (a) there
are no pending  proceedings with respect to any Environmental Laws affecting the
Company,  (b) none of the Company or any of its  subsidiaries  has  received any
demand,  claim or notice of violation of any Environmental  Laws, and (c) to the
knowledge of the Company and its subsidiaries, there is no proceeding, notice or
demand letter or request for information  threatened  against the Company or any
of its subsidiaries under any Environmental Law, (iv) no Lien or restriction has
been recorded under any Environmental  Law with respect to any assets,  facility
or property owned,  operated,  leased or controlled by the Company or any of its
subsidiaries,  (v) none of the Company or any of its  subsidiaries  has received
notice that it has been identified as a potentially  responsible party under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended ("CERCLA"), or any comparable state law, (vi) no property or facility of
the Company or any of its subsidiaries (a) is listed or, to the knowledge of the

                                       9





Company and its  subsidiaries,  proposed for listing on the National  Priorities
List under CERCLA or (b) is listed in the Comprehensive  Environmental Response,
Compensation,  Liability Information System List promulgated pursuant to CERCLA,
or on  any  comparable  list  maintained  by any  state  or  local  governmental
authority.

            For  purposes  of this  Agreement,  "Environmental  Laws"  means all
applicable federal, state and local laws or regulations, codes, orders, decrees,
judgments or injunctions  issued,  promulgated,  approved or entered thereunder,
relating to pollution, protection of public or employee health and safety or the
environment,  including,  without  limitation,  laws relating to (i)  emissions,
discharges,  releases or threatened  releases of Hazardous Materials (as defined
below) into the environment (including, without limitation, ambient air, surface
water, ground water, land surface or subsurface  strata),  (ii) the manufacture,
processing,   distribution,  use,  generation,   treatment,  storage,  disposal,
transport or handling of Hazardous  Materials,  and (iii)  underground and above
ground storage tanks and related piping, and emissions,  discharges, releases or
threatened  releases  therefrom.  The term  "Hazardous  Material"  means (a) any
"hazardous substance," as defined in the Comprehensive  Environmental  Response,
the Resource  Conservation  and  Recovery  Act, as amended,  (b) any  "hazardous
waste," as defined by the Resource  Conservation  and Recovery  Act, as amended,
(c) any petroleum or petroleum product,  (d) any polychlorinated  biphenyl,  and
(e) any  pollutant or  contaminant  or hazardous,  dangerous or toxic  chemical,
material, waste or substance.

            (18) INTELLECTUAL PROPERTY RIGHTS AND LICENSES.  The Company and its
subsidiaries  own or have the  right to use any and all  information,  know-how,
trade secrets, patents, copyrights, trademarks, trade names, software, formulae,
methods,  processes  and  other  intangible  properties  that are  necessary  or
customarily used by them in their business  ("Intangible  Rights").  The Company
(including its  subsidiaries) has not received any notice that it is in conflict
with or infringing upon the asserted  intellectual  property rights of others in
connection  with  the  Intangible   Rights,   and,  to  the  Company's  and  its
subsidiaries'  knowledge,  neither  the  use of the  Intangible  Rights  nor the
operation of the Company's  businesses  is infringing or has infringed  upon any
intellectual  property  rights of others.  All payments have been duly made that
are necessary to maintain the  Intangible  Rights in force.  No claims have been
made,  and to the  Company's  and its  subsidiaries  knowledge,  no  claims  are
threatened,  that  challenge  the validity or scope of any  material  Intangible
Right of the  Company or any of its  subsidiaries.  The  Company and each of its
subsidiaries  have taken  reasonable  steps to obtain and  maintain in force all
licenses  and  other  permissions  under  Intangible  Rights  of  third  parties
necessary to conduct their  businesses as heretofore  conducted by them, and now
being  conducted  by them,  and as  expected  to be  conducted,  and neither the
Company nor any of its  subsidiaries  is or has been in  material  breach of any
such license or other permission.  The Company and each of its subsidiaries have
obtained and  maintained  all necessary  agreements  providing for assignment to
them of all  patentable  inventions  made by and  copyright  interest  in  works
created by non-employees and employees for the Company and its subsidiaries. The
Company  and each of its  subsidiaries  have  used all  commercially  reasonable
efforts  to  maintain  the  confidentiality  of  all  trade  secrets  and  other
confidential  information  owned  by them or in  their  possession  and  have no
knowledge  of  any   misappropriation   of  any  such  trade  secrets  or  other
confidential information by any third party.

                                       10





            (19) LABOR, EMPLOYMENT AND BENEFIT MATTERS.

                 (a)  There  are no  strikes  or other  labor  disputes  against
Company  or  any  of its  subsidiaries  pending  or,  to  the  Company's  or its
subsidiaries'  knowledge,  threatened.  Hours  worked  by and  payment  made  to
employees of the Company and its  subsidiaries  have been in compliance with the
Fair Labor Standards Act or any other applicable labor or employment law (except
such  non-compliance  as could not  reasonably  be  expected  to have a Material
Adverse  Effect).  There is no organizing  activity  involving  employees of the
Company  or  any  of its  subsidiaries  pending  or,  to  the  Company's  or its
subsidiaries'  knowledge,  threatened  by any labor union or group of employees.
There are no  representation  proceedings  pending or, to the  Company's  or its
subsidiaries' knowledge, threatened with the National Labor Relations Board, and
no labor  organization or group of employees of the Company or its  subsidiaries
has made a pending  demand for  recognition.  There are no complaints or charges
against the Company or any of its  subsidiaries  pending or, to the Company's or
its  subsidiaries'  knowledge,  threatened,  to be filed  with any  Governmental
Authority or  arbitrator  based on,  arising out of or in  connection  with,  or
otherwise  relating to, the  employment  or  termination  of  employment  by the
Company or any of its subsidiaries of any individual.

                 (b) Except as set forth in the SEC Reports, neither the Company
nor any of its  subsidiaries  is, or during the five years preceding the date of
this Agreement was, a party to any labor or collective bargaining agreement.

                 (c)  Each  employee  benefit  plan is in  compliance  with  all
applicable  law,  except for such  noncompliance  that could not  reasonably  be
expected to have a Material Adverse Effect.

                 (d) Neither the  Company  nor any of its  subsidiaries  has any
liabilities,  contingent or otherwise, including without limitation, liabilities
for retiree health,  retiree life, severance or retirement  benefits,  which are
not fully reflected on the Balance Sheet or fully funded. The term "liabilities"
used in the preceding sentence shall be calculated in accordance with reasonable
actuarial  assumptions.  Such term shall also include any  obligation  owed to a
governmental  authority  for the purpose of providing  retiree  health,  retiree
life, severance, retirement or other benefits.

                 (e)  None  of the  Company  nor  any of  its  subsidiaries  has
terminated  any "employee  pension  benefit plan " as defined in Section 3(2) of
ERISA (as defined  below) or has  incurred  or expects to incur any  outstanding
liability under Title IV of the Employee Retirement Income Security Act of 1974,
as amended and all rules and regulations promulgated thereunder ("ERISA").

            (20)  COMPLIANCE  WITH LAW.  The  Company  is in  compliance  in all
material respects with all applicable laws, except for such  noncompliance  that
could not reasonably be expected to have a Material Adverse Effect.  The Company
has not received any notice of, nor does the Company have any  knowledge of, any
violation (or of any investigation, inspection, audit or other proceeding by any
governmental  entity  involving  allegations of any violation) of any applicable
law  involving  or  related  to the  Company  which  has not been  dismissed  or
otherwise  disposed of. The Company has not received notice or otherwise has any
knowledge  that  the  Company  is  charged  with,   threatened   with  or  under
investigation  with respect to, any violation of any applicable  law, or has any

                                       11





knowledge  of any  proposed  change  in any  applicable  law that  would  have a
Material Adverse Effect.

            (21) OWNERSHIP OF PROPERTY. Each of Company and its subsidiaries has
(i) good and  marketable  and  insurable  fee  simple  title to its  owned  real
property,  free  and  clear  of  all  liens,  except  for  liens  which  do  not
individually  or in the  aggregate  interfere  unreasonably  with the use of the
property  by the  Company  or its  subsidiaries,  (ii) a  valid  and  marketable
leasehold interest in all leased real property, and each of such leases is valid
and  enforceable  in accordance  with its terms and is in full force and effect,
and, (iii) good and marketable title to, or valid leasehold interests in, all of
its other  properties  and assets free and clear of all liens,  except for liens
which do not individually or in the aggregate  interfere  unreasonably  with the
use of the property by the Company or its subsidiaries.

D.          UNDERSTANDINGS

            The Purchaser understands,  acknowledges and agrees with the Company
as follows:

            (1) The  Company  may,  with the  consent  of the  Placement  Agent,
terminate the Offering  within ninety (90) days from the date of the Memorandum.
The  execution  of  this  Agreement  by the  Purchaser  or  solicitation  of the
investment  contemplated  hereby shall create no  obligation  on the part of the
Company  or the  Placement  Agent to accept any  subscription  or  complete  the
Offering.  Moreover,  the Company,  by mutual agreement with the Placement Agent
and after written notice to the Purchaser, may accept subscriptions  aggregating
fewer than 2,000,000 Units with the Purchaser's written consent.

            (2)  The  Purchaser   hereby   acknowledges   and  agrees  that  the
subscription hereunder is irrevocable by the Purchaser, that, except as required
by law,  the  Purchaser  is not  entitled  to cancel,  terminate  or revoke this
Agreement or any agreements of the Purchaser hereunder and that if the Purchaser
is an individual,  this  Agreement  shall survive the death or disability of the
Purchaser  and shall be binding upon and inure to the benefit of the parties and
their heirs, executors,  administrators,  successors,  legal representatives and
permitted assigns.

            (3) No federal or state agency or authority  has made any finding or
determination as to the accuracy or adequacy of the Offering  Documents or as to
the fairness of the terms of the Offering nor any  recommendation or endorsement
of the Units.

            (4) The  Offering is intended to be exempt from  registration  under
the  Securities  Act by virtue of  Section  4(2) of the  Securities  Act and the
provisions  of  Regulation D  thereunder,  which is in part  dependent  upon the
truth,  completeness and accuracy of the statements made by the Purchaser herein
and in the Questionnaire.

            (5) There can be no  assurance  that the  Purchaser  will be able to
sell or dispose of the Units. The securities  and/or any interest therein may be
offered, sold, transferred, pledged or otherwise disposed of only pursuant to an
effective   registration   under  the   Securities  Act  or  an  exemption  from
registration,  which,  in the  opinion of  counsel  reasonably  satisfactory  to
counsel to the Company, is available. It is further understood that in order not
to jeopardize the Offering's  exempt status under Section 4(2) of the Securities

                                       12





Act and Regulation D, the Company may refuse to recognize the transfer of shares
to any  transferee  who, in the Company's  sole  judgment,  fails to fulfill the
investor suitability requirements thereunder.

            (6) Upon public  announcement of the Offering,  which shall occur at
or prior to 9:15am on April 23, 2003, the Company  represents that the Purchaser
shall not have any material  non-public  information  and the Company  covenants
that it will not disclose any material  non-public  information to the Purchaser
after the public announcement of the Offering.

            (7) The  Company  represents  that it will not  solicit  the sale of
additional  Securities  after the public  announcement  of the Offering and will
close  the  Offering  within  a  reasonable  amount  of time  after  the  public
announcement,  which shall not extend  beyond 3 business  days after such public
announcement.

            (8)  Neither  the  Company  or any of its  affiliates  or any person
acting on its behalf has  directly or  indirectly  made any offer or sale of any
security or solicited any offers to buy any security,  under  circumstances that
would cause the Offering to be  integrated  with prior  offerings by the Company
for  purposes  of the  Securities  Act of 1933,  as amended,  or any  applicable
stockholder  approval  provisions,  including without limitation under the rules
and  regulations  of any exchange or automated  quote system on which any of the
securities are listed or  designated,  nor will the Company take any such action
or steps that would cause the Offering to be integrated with other offerings.

E.          REGISTRATION RIGHTS

            (1)  CERTAIN  DEFINITIONS.  For  purposes  of this  Section  E,  the
following terms shall have the meanings ascribed to them below.

                 (a)   "PROSPECTUS"   means  the  prospectus   included  in  the
Registration  Statement  (including,   without  limitation,  a  prospectus  that
includes any information  previously  omitted from a prospectus filed as part of
an effective registration statement in reliance upon Rule 430A promulgated under
the Securities  Act), as amended or supplemented  by any prospectus  supplement,
with  respect to the terms of the  offering  of any  portion of the  Registrable
Securities covered by the Registration  Statement,  and all other amendments and
supplements to the  Prospectus,  including  post-effective  amendments,  and all
material  incorporated by reference or deemed to be incorporated by reference in
such Prospectus.

                 (b) "REGISTRABLE  SECURITIES"  shall means the shares of Common
Stock  included  in the Units  and the  shares of  Common  Stock  issuable  upon
exercise of the  Warrants  included  in the Units or  pursuant to the  Placement
Agent Warrant,  together with any  securities  issued or issuable upon any stock
split,  dividend or other  distribution,  recapitalization or similar event with
respect to the foregoing.

                 (c) "REGISTRATION  STATEMENT" means each registration statement
required  to be  filed  under  this  Section  E,  including  in  each  case  the
Prospectus,  amendments  and  supplements  to  such  registration  statement  or

                                       13





Prospectus,  including pre- and post-effective amendments, all exhibits thereto,
and all  material  incorporated  by reference  or deemed to be  incorporated  by
reference in such registration statement.

           (2)  SHELF REGISTRATION

                 (a) As  promptly as  possible,  and in any event on or prior to
the 45th day  following  the Closing  (the  "Filing  Date"),  the Company  shall
prepare and file with the Commission a "Shelf"  Registration  Statement covering
the  resale  of all  Registrable  Securities  for an  offering  to be  made on a
continuous  basis pursuant to Rule 415. The  Registration  Statement shall be on
Form S-3 (except if the Company is not then  eligible to register for resale the
Registrable  Securities on Form S-3, in which case such registration shall be on
another appropriate form in accordance herewith as the Purchasers may consent).

                 (b) The  Company  shall use its  commercially  reasonable  best
efforts to cause the  Registration  Statement  to be declared  effective  by the
Commission as promptly as possible  after the filing  thereof,  but in any event
prior to the date that is the 90th day  following  the  Closing  (the  "Required
Effectiveness  Date"),  and shall use its best efforts to keep the  Registration
Statement  continuously  effective  under  the  Securities  Act  until the fifth
anniversary  of the  Effective  Date or such earlier  date when all  Registrable
Securities   covered  by  such  Registration   Statement  have  been  sold  (the
"Effectiveness Period").

                 (c) The Company shall notify each Purchaser in writing promptly
(and in any event within two business day) after receiving notification from the
SEC that the Registration  Statement has been declared  effective.  Provided the
Registration Statement has been declared effective or the Securities have become
eligible for resale under an exemption from  registration in accordance with the
Securities Act of 1933, as amended, then upon sale of the Registrable Securities
and delivery of the Prospectus to a subsequent  purchaser,  the Company will use
its reasonable  efforts to instruct its transfer agent to issue the  Registrable
Securities without a restrictive legend.

                 (d) Upon the  occurrence of any Event (as defined below) and on
every monthly anniversary thereof while the applicable Event remains uncured, as
partial  relief for the damages  suffered  therefrom  by the  Purchasers  (which
remedy shall not be exclusive of any other  remedies are  available at law or in
equity),  the Company  shall be obligated to pay to each  Purchaser an amount in
cash, as liquidated damages and not as a penalty, equal to 1.5% of the aggregate
purchase price paid by such Purchaser  hereunder.  Such liquidated damages shall
not be cumulative if more than one Event has occurred simultaneously and remains
uncured.  The liquidated  damages payable  pursuant to the terms hereof shall be
applied on a pro-rata  basis for any portion of a month in which the  applicable
Event is uncured.  Payment of such liquidated  damages shall be made within five
(5) business  days of the  occurrence of the  applicable  Event and by the fifth
business day  following  each monthly  anniversary  while the  applicable  Event
remains  uncured.  For such purposes,  each of the following shall constitute an
"Event":

                        (i) the Registration  Statement is not filed on or prior
                 to the Filing Date or is not declared  effective on or prior to
                 the Required Effectiveness Date;

                                       14





                        (ii)  after  the  Effective  Date,  a  Purchaser  is not
                 permitted to sell Registrable Securities under the Registration
                 Statement  (or a  subsequent  Registration  Statement  filed in
                 replacement  thereof)  for any reason  for ten or more  trading
                 days (whether or not consecutive) within a six month period;

                        (iii) the Common Stock is not listed or quoted on Nasdaq
                 for a period of three consecutive  trading days or is suspended
                 from trading on Nasdaq; or

                        (iv) the  Company  fails  for any  reason  to  deliver a
                 certificate  evidencing  any Units to a Purchaser  within three
                 trading  days after  delivery of such  certificate  is required
                 pursuant to any Offering Document.

            (3)  Registration  Procedures.  In  connection  with  the  Company's
registration obligations hereunder, the Company shall:

                 (a) Not less than three  trading  days prior to the filing of a
Registration  Statement or any related Prospectus or any amendment or supplement
thereto  (including  any  document  that would be  incorporated  or deemed to be
incorporated therein by reference), the Company shall (i) furnish to counsel for
the Placement  Agent copies of all such  documents  proposed to be filed,  which
documents  (other  than  those  incorporated  or  deemed to be  incorporated  by
reference)  will be  subject  to the review of such  counsel  for the  Placement
Agent,  and (ii) cause its  officers  and  directors,  counsel  and  independent
certified public accountants to respond to such inquiries as shall be necessary,
in the  reasonable  opinion of counsel  for the  Placement  Agent,  to conduct a
reasonable  investigation  within the meaning of the Securities Act. The Company
shall not file a Registration Statement or any such Prospectus or any amendments
or supplements thereto to which counsel for the Placement Agent shall reasonably
object.

                 (b)  (i)  Prepare  and  file  with  the  SEC  such  amendments,
including  post-effective  amendments,  to each  Registration  Statement and the
Prospectus  used  in  connection  therewith  as may be  necessary  to  keep  the
Registration  Statement  continuously effective as to the applicable Registrable
Securities for the  Effectiveness  Period and prepare and file with the SEC such
additional  Registration  Statements  in order to register  for resale under the
Securities  Act  all of the  Registrable  Securities;  (ii)  cause  the  related
Prospectus to be amended or supplemented by any required Prospectus  supplement,
and as so  supplemented  or amended to be filed  pursuant to Rule 424; and (iii)
respond as promptly as reasonably possible to any comments received from the SEC
with  respect to the  Registration  Statement  or any  amendment  thereto and as
promptly  as  reasonably  possible  provide the  Purchasers  and counsel for the
Placement Agent true and complete copies of all  correspondence  from and to the
SEC relating to the Registration Statement.

                 (c) Notify the Purchasers of Registrable  Securities to be sold
as promptly as reasonably  possible,  and (if  requested by any such  Purchaser)
confirm such notice in writing no later than one trading day thereafter,  of any
of the following events:  (i) the SEC notifies the Company whether there will be
a "review" of any  Registration  Statement;  (ii) the SEC comments in writing on
any  Registration  Statement  (in which case the Company  shall  deliver to each
Purchaser a copy of such comments and of all written responses  thereto);  (iii)
the SEC or any  other  Federal  or state  governmental  authority  requests  any

                                       15





amendment or supplement to any Registration  Statement or Prospectus or requests
additional  information  related  thereto;  (iv) the SEC  issues  any stop order
suspending  the  effectiveness  of any  Registration  Statement or initiates any
action,  claim,  suit,  investigation  or proceeding (a  "Proceeding")  for that
purpose;  (v) the Company receives notice of any suspension of the qualification
or exemption from  qualification  of any Registrable  Securities for sale in any
jurisdiction, or the initiation or threat of any Proceeding for such purpose; or
(vi) the financial  statements  included in any  Registration  Statement  become
ineligible  for  inclusion  therein or any  statement  made in any  Registration
Statement  or  Prospectus  or  any  document   incorporated   or  deemed  to  be
incorporated  therein  by  reference  is untrue in any  material  respect or any
revision to a Registration  Statement,  Prospectus or other document is required
so that it will not contain any untrue  statement of a material  fact or omit to
state any material fact  required to be stated  therein or necessary to make the
statements  therein,  in light of the circumstances  under which they were made,
not misleading.

                 (d) Use its  best  efforts  to avoid  the  issuance  of or,  if
issued,  obtain the withdrawal of (i) any order suspending the  effectiveness of
any  Registration  Statement or (ii) any  suspension  of the  qualification  (or
exemption from  qualification) of any of the Registrable  Securities for sale in
any jurisdiction, at the earliest practicable moment.

                 (e) Furnish to each  Purchaser,  without  charge,  at least one
conformed  copy of each  Registration  Statement  and  each  amendment  thereto,
including  financial  statements and schedules,  all documents  incorporated  or
deemed to be incorporated  therein by reference,  and all exhibits to the extent
requested by such person  (including those previously  furnished or incorporated
by reference) promptly after the filing of such documents with the SEC.

                 (f) Promptly deliver to each Purchaser, without charge, as many
copies of the Prospectus or Prospectuses (including each form of prospectus) and
each amendment or supplement thereto as such persons may reasonably request. The
Company  hereby  consents to the use of such  Prospectus  and each  amendment or
supplement  thereto by each of the selling  Purchasers  in  connection  with the
offering and sale of the Registrable  Securities  covered by such Prospectus and
any amendment or supplement thereto.

                 (g) (i) In the time and manner required by Nasdaq,  prepare and
file with Nasdaq an additional  shares listing  application  covering all of the
Registrable Securities;  (ii) take all steps necessary to cause such Registrable
Securities to be approved for listing on Nasdaq as soon as possible  thereafter;
(iii) provide to the Purchasers evidence of such listing;  and (iv) maintain the
listing of such Registrable Securities on Nasdaq.

                 (h) Prior to any public offering of Registrable Securities, use
its best efforts to register or qualify or cooperate with the selling Purchasers
in connection  with the  registration or  qualification  (or exemption from such
registration or qualification) of such Registrable Securities for offer and sale
under the securities or "blue sky" laws of such jurisdictions  within the United
States as any Purchaser  requests in writing,  to keep each such registration or
qualification (or exemption therefrom) effective during the Effectiveness Period
and to do any and all other acts or things  necessary or advisable to enable the
disposition in such  jurisdictions  of the Registrable  Securities  covered by a
Registration Statement.

                                       16





                 (i) Upon the  occurrence  of any event  described  in Paragraph
(c)(vi)  above,  as promptly as  reasonably  possible,  prepare a supplement  or
amendment,  including a post-effective  amendment, to the Registration Statement
or a supplement to the related Prospectus or any document incorporated or deemed
to be incorporated therein by reference, and file any other required document so
that,  as  thereafter  delivered,  neither the  Registration  Statement nor such
Prospectus will contain an untrue  statement of a material fact or omit to state
a  material  fact  required  to be  stated  therein  or  necessary  to make  the
statements  therein,  in light of the circumstances  under which they were made,
not misleading.

                 (j) Comply with all  applicable  rules and  regulations  of the
SEC.

            (4)  REGISTRATION  EXPENSES.  The  Company  shall  pay all  fees and
expenses incident to the performance of or compliance with this Agreement by the
Company,  including without  limitation (a) all registration and filing fees and
expenses,  including  without  limitation those related to filings with the SEC,
Nasdaq and in connection  with applicable  state  securities or "Blue Sky" laws,
(b)  printing  expenses  (including  without  limitation  expenses  of  printing
certificates for Registrable  Securities and of printing prospectuses  requested
by the Purchasers), (c) messenger, telephone and delivery expenses, (d) fees and
disbursements  of counsel for the Company  and counsel for the  Placement  Agent
(with respect to the  Registration  Statement) up to a maximum of $2,000 and (e)
fees and  expenses of all other  Persons  retained by the Company in  connection
with the consummation of the transactions contemplated by this Agreement.

            (5) INDEMNIFICATION

                 (a)   INDEMNIFICATION  BY  THE  COMPANY.   The  Company  shall,
notwithstanding  any termination of this Agreement,  indemnify and hold harmless
each Purchaser,  the officers,  directors,  partners,  members,  agents, brokers
(including  brokers who offer and sell Registrable  Securities as principal as a
result of a pledge  or any  failure  to  perform  under a margin  call of Common
Stock),  investment  advisors  and  employees  of each of them,  each Person who
controls any such Purchaser  (within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange  Act) and the officers,  directors,  partners,
members,  agents and employees of each such controlling  Person,  to the fullest
extent permitted by applicable law, from and against any and all losses, claims,
damages,   liabilities,   settlement  costs  and  expenses,   including  without
limitation  costs of preparation and reasonable  attorneys' fees  (collectively,
"Losses"),  as  incurred,  arising  out of or  relating to any untrue or alleged
untrue statement of a material fact contained in the Registration Statement, any
Prospectus or form of prospectus or in any amendment or supplement thereto or in
any  preliminary  prospectus,  or arising out of or relating to any  omission or
alleged  omission of a material fact required to be stated  therein or necessary
to make  the  statements  therein  (in the  case  of any  Prospectus  or form of
prospectus or supplement thereto, in light of the circumstances under which they
were made) not misleading,  except to the extent,  but only to the extent,  that
(i) such untrue  statements  or  omissions  are based  solely  upon  information
regarding such  Purchaser  furnished in writing to the Company by such Purchaser
expressly  for use therein,  or to the extent that such  information  related to
such  Purchaser  or  such   Purchaser's   proposed  method  of  distribution  of
Registrable  Securities  and was reviewed and  expressly  approved in writing by
such Purchaser expressly for use in the Registration Statement,  such Prospectus
or such form of Prospectus or in any amendment or supplement  thereto or (ii) in

                                       17





the  case of an  occurrence  of an  event of the  type  specified  in  Paragraph
(3)(c)(iv)-(vi)  above the use by such  Purchaser  of an outdated  or  defective
Prospectus  after the Company has  notified  such  Purchaser in writing that the
Prospectus is outdated or defective  and prior to the receipt by such  Purchaser
of the Advice  contemplated in Paragraph (6) below. The Company shall notify the
Purchasers promptly of the institution, threat or assertion of any Proceeding of
which the Company is aware in connection with the  transactions  contemplated by
this Agreement.

                 (b)  INDEMNIFICATION  BY  PURCHASERS.   Each  Purchaser  shall,
severally  and not  jointly,  indemnify  and  hold  harmless  the  Company,  its
directors,  officers, agents and employees, each Person who controls the Company
(within  the meaning of Section 15 of the  Securities  Act and Section 20 of the
Exchange  Act),  and  the  directors,  officers,  agents  or  employees  of such
controlling Persons, to the fullest extent permitted by applicable law, from and
against all Losses (as  determined  by a court of  competent  jurisdiction  in a
final  judgment not subject to appeal or review)  arising solely out of or based
solely  upon  any  untrue   statement  of  a  material  fact  contained  in  any
Registration  Statement,  any  Prospectus,  or any form of  prospectus or in any
amendment  or  supplement  thereto,  or arising  solely out of or based upon any
omission of a material fact  required to be stated  therein or necessary to make
the statements therein not misleading t the extent, but only to the extent, that
such untrue  statement or omission is contained in any  information so furnished
in writing by such Purchaser to the Company  specifically  for inclusion in such
Registration  Statement or such Prospectus or to the extent that (i) such untrue
statements  or  omissions  are based  solely  upon  information  regarding  such
Purchaser  furnished in writing to the Company by such  Purchaser  expressly for
use therein, or to the extent that such information related to such Purchaser or
such Purchaser's  proposed method of distribution of Registrable  Securities and
was reviewed and expressly  approved in writing by such Purchaser  expressly for
use in the Registration Statement, such Prospectus or such form of Prospectus or
in any amendment or  supplement  thereto or (ii) in the case of an occurrence of
an event of the type  specified  in Paragraph  (3)(c)(iv)-(vi),  the use by such
Purchaser of an outdated or defective  Prospectus after the Company has notified
such Purchaser in writing that the Prospectus is outdated or defective and prior
to the receipt by such Purchaser of the Advice contemplated in Paragraph (6). In
no event shall the  liability of any selling  Purchaser  hereunder be greater in
amount than the dollar  amount of the net  proceeds  received by such  Purchaser
upon the sale of the Registrable  Securities giving rise to such indemnification
obligation.

                 (c) CONDUCT OF INDEMNIFICATION  PROCEEDINGS.  If any Proceeding
shall be brought or asserted against any Person entitled to indemnity  hereunder
(an  "Indemnified  Party"),  such  Indemnified  Party shall promptly  notify the
Person from whom indemnity is sought (the "Indemnifying  Party") in writing, and
the  Indemnifying  Party  shall  assume  the  defense  thereof,   including  the
employment of counsel  reasonably  satisfactory to the Indemnified Party and the
payment of all fees and expenses  incurred in connection  with defense  thereof,
provided,  that the failure of any  Indemnified  party to give such notice shall
not relieve the Indemnifying Party of its obligations or liabilities pursuant to
this  Agreement,  except  (and  only) to the  extent  that it  shall be  finally
determined  by a court of competent  jurisdiction  (which  determination  is not
subject to appeal or further  review) that such failure  shall have  proximately
and materially adversely prejudiced the Indemnifying Party.

                                       18





            An Indemnified Party shall have the right to employ separate counsel
in any such Proceeding and to participate in the defense  thereof,  but the fees
and expenses of such counsel shall be at the expense of such  Indemnified  Party
or Parties unless:  (i) the Indemnifying Party has agreed in writing to pay such
fees and expenses;  or (ii) the Indemnifying Party shall have failed promptly to
assume  the  defense  of  such  Proceeding  and  to  employ  counsel  reasonably
satisfactory  to such  Indemnified  Party in any such  Proceeding;  or (iii) the
named parties to any such Proceeding  (including any impleaded  parties) include
both such  Indemnified  Party and the  Indemnifying  Party, and such Indemnified
Party shall have been  advised by counsel  that a conflict of interest is likely
to exist if the same counsel were to represent  such  Indemnified  Party and the
Indemnifying  Party (in which  case,  if such  Indemnified  Party  notifies  the
Indemnifying  Party in writing that it elects to employ separate  counsel at the
expense of the Indemnifying  Party,  the  Indemnifying  Party shall not have the
right to assume the defense  thereof and such counsel shall be at the expense of
the  Indemnifying  Party).  The  Indemnifying  Party shall not be liable for any
settlement of any such Proceeding  affected without its written  consent,  which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party,  unless
such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding.

            All fees and expenses of the Indemnified Party (including reasonable
fees and expenses to the extent  incurred in connection  with  investigating  or
preparing  to defend  such  Proceeding  in a manner not  inconsistent  with this
Section) shall be paid to the Indemnified Party, as incurred, within ten trading
days of written notice thereof to the Indemnifying  Party (regardless of whether
it is  ultimately  determined  that an  Indemnified  Party  is not  entitled  to
indemnification  hereunder;  provided,  that the Indemnifying  Party may require
such  Indemnified  Party to undertake to reimburse all such fees and expenses to
the extent it is finally  judicially  determined that such Indemnified  Party is
not entitled to indemnification hereunder).

                 (d)  CONTRIBUTION.   If  a  claim  for  indemnification   under
Paragraph  (5)(a) or (b) is unavailable  to an  Indemnified  Party (by reason of
public  policy  or  otherwise),   then  each  Indemnifying  Party,  in  lieu  of
indemnifying  such  Indemnified  Party,  shall  contribute to the amount paid or
payable by such Indemnified party as a result of such Losses, in such proportion
as is appropriate to reflect the relative  fault of the  Indemnifying  Party and
Indemnified  Party in connection with the actions,  statements or omissions that
resulted in such Losses as well as any other relevant equitable  considerations.
The relative fault of such  Indemnifying  Party and  Indemnified  Party shall be
determined by reference to, among other things,  whether any action in question,
including any untrue or alleged untrue  statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or related to
information  supplied by, such Indemnifying  Party or Indemnified Party, and the
parties'  relative intent,  knowledge,  access to information and opportunity to
correct or prevent  such  action,  statement  or  omission.  The amount  paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Paragraph (5)(c),  any reasonable  attorneys' or
other reasonable fees or expenses  incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the indemnification  provided for in this Paragraph was available to
such party in accordance with its terms.

                                       19





            The parties  hereto agree that it would not be just and equitable if
contribution  pursuant  to this  Paragraph  (5)(d) were  determined  by pro rata
allocation or by any other method of allocation  that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding  the provision of this Paragraph  (5)(d),  no Purchaser shall be
required to contribute,  in the aggregate, any amount in excess of the amount by
which the  proceeds  actually  received by such  Purchaser  from the sale of the
Registrable  Securities  subject  to the  Proceeding  exceeds  the amount of any
damages that such Purchaser has otherwise been required to pay by reason of such
untrue or alleged untrue  statement or omission or alleged  omission.  No Person
guilty of fraudulent  misrepresentation  (within the meaning of Section 11(f) of
the Securities  Act) shall be entitled to  contribution  from any Person who was
not guilty of such fraudulent misrepresentation.

            The indemnity and contribution  agreements contained in this Section
are in addition to any liability that the  Indemnifying  Parties may have to the
Indemnified Parties.

            (6) DISPOSITIONS. Each Purchaser agrees that it will comply with the
prospectus  delivery  requirements  of the Securities Act as applicable to it in
connection  with sales of Registrable  Securities  pursuant to the  Registration
Statement. Each Purchaser further agrees that, upon receipt of a notice from the
Company  of the  occurrence  of any event of the kind  described  in  Paragraphs
(3)(c)(iv),  (v) or (vi),  such Purchaser will  discontinue  disposition of such
Registrable  Securities under the Registration  Statement until such Purchaser's
receipt of the copies of the supplemented Prospectus and/or amended Registration
Statement  contemplated by Paragraph  (3)(i),  or until it is advised in writing
(the "Advice") by the Company that the use of the  applicable  Prospectus may be
resumed,  and,  in  either  case,  has  received  copies  of any  additional  or
supplemental  filings  that are  incorporated  or deemed to be  incorporated  by
reference in such Prospectus or Registration Statement.  The Company may provide
appropriate stop orders to enforce the provision of this paragraph.

            (7)  PIGGYBACK  ON   REGISTRATIONS.   In  the  event  the  Company's
registration   statement   currently  on  file  with  the  SEC  (the   "Existing
Registration  Statement") has not yet been declared effective on or prior to the
date fifteen (15)  business  days after the Closing,  the Company  shall use its
reasonable  efforts  to  include  the  Registrable  Securities  in the  Existing
Registration Statement. In the event the Registrable Securities are not included
in the Existing Registration  Statement,  the Company may not include securities
of  the  Company  in the  Registration  Statement  other  than  the  Registrable
Securities  without the approval of the  Placement  Agent.  Such approval of the
Placement Agent shall not be unreasonably withheld.

            (8)  SURVIVAL.  The  provisions  of this Section E shall survive the
Closing of the Offering and any subsequent termination of this Agreement

F.          EXCHANGE RIGHT

            In the event  that the  Company  completes  a sale of Common  Stock,
equity  linked   securities  or  any   combination   thereof  (the   "Subsequent
Securities")  within 90 days of the Closing  resulting in aggregate net proceeds
to the Company of not less than $5 million, each Purchaser shall have a one-time

                                       20





right to exchange,  in whole but not in part, all Units purchased  hereunder for
the aggregate  amount or number of  Subsequent  Securities  that such  Purchaser
would have received had the  consideration  used to purchase the Units been used
to purchase such  Subsequent  Securities.  For purposes of this exchange  right,
equity linked securities shall mean securities convertible into, or exchangeable
for, Common Stock or securities  which include a significant  number of warrants
to purchase  Common Stock.  The Company shall be required to give written notice
of the  closing  of the  sale of  Subsequent  Securities  prior to or as soon as
reasonably  practicable  following such closing, and the Purchasers may exercise
such right within ten (10) business days  thereafter by giving written notice to
the Company.  This exchange right shall be to acquire the Subsequent  Securities
only and shall not extend to other  rights  that the  purchasers  of  Subsequent
Securities  may  receive   including,   but  not  limited  to,  information  and
observation  rights. The Company reserves the right to take all necessary action
to comply  with  rules  imposed by its  principal  trading  market  prior to the
issuance of Subsequent  Securities to the Purchasers  pursuant to their exercise
of this exchange right.

G.          MISCELLANEOUS

            (1) All  pronouns  and any  variations  thereof used herein shall be
deemed to refer to the masculine,  feminine,  singular or plural, as identity of
the person or persons may require.

            (2) Any notice or other  document  required or permitted to be given
or  delivered  to the  Purchaser  shall be in writing and sent (i) by fax if the
sender on the same day sends a  confirming  copy of such notice by a  recognized
overnight delivery service (charges prepaid),  or (b) by registered or certified
mail with return  receipt  requested  (postage  prepaid) or (c) by a  recognized
overnight delivery service (with charges prepaid).

                 (a)  if to the Company, at

                      Datatec Systems, Inc.
                      23 Madison Road
                      Fairfield, NJ 07004
                      Attn: Isaac J. Gaon
                      Tel: 973.808.4000;  Fax 973.890.2888

                      or such other  address as it shall have  specified  to the
                      Purchaser  in  writing,  with  a  copy  (which  shall  not
                      constitute notice) to

                      Olshan Grundman Frome Rosenzweig & Wolosky LLP
                      505 Park Avenue
                      New York, NY 10022
                      Attn: Robert H. Friedman, Esq.
                      Tel: 212.753.7200;  Fax 212.755.1467

                 (b) if to  the  Purchaser,  at its  address  set  forth  on the
signature  page to this  Agreement,  or such  other  address  as it  shall  have
specified  to the Company in writing,  with a copy (which  shall not  constitute
notice) to

                                       21





                      Reed Smith LLP
                      One Riverfront Plaza, Suite 1000
                      Newark, NJ  07102
                      Attn: Gerard S. DiFiore, Esq.
                      Tel: 973. 621.3179;  Fax 973.621.3199

            (3)  Failure of the Company to  exercise  any right or remedy  under
this Agreement or any other agreement between the Company and the Purchaser,  or
otherwise,  or delay by the Company in exercising such right or remedy, will not
operate as a waiver thereof.  No waiver by the Company will be effective  unless
and until it is in writing and signed by the Company.

            (4) This Agreement shall be enforced,  governed and construed in all
respects in accordance  with the laws of the State of New York, as such laws are
applied by the New York courts to agreements entered into and to be performed in
New York by and between  residents  of New York,  and shall be binding  upon the
Purchaser, the Purchaser's heirs, estate, legal representatives,  successors and
assigns  and shall  inure to the  benefit of the  Company,  its  successors  and
assigns.

            (5) If any  provision  of this  Agreement  is held to be  invalid or
unenforceable  under any applicable  statute or rule of law, then such provision
shall be deemed  modified  to  conform  with such  statute  or rule of law.  Any
provision hereof that may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provisions hereof.

            (6) The parties understand and agree that money damages would not be
a  sufficient  remedy  for any  breach of the  Agreement  by the  Company or the
Purchaser  and that the party  against  which such breach is committed  shall be
entitled to equitable relief, including injunction and specific performance,  as
a remedy  for any such  breach.  Such  remedies  shall  not be  deemed to be the
exclusive remedies for a breach by either party of the Agreement but shall be in
addition to all other  remedies  available at law or equity to the party against
which such breach is committed.

            (7) This  Agreement,  together  with the  agreements  and  documents
executed and delivered in connection with this Agreement, constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof.

H.          SIGNATURE

            The  signature  page of this  Agreement  is contained as part of the
applicable subscription package, entitled "Signature Page".

                                       22





                                 SIGNATURE PAGE

            The Purchaser  hereby  subscribes  for such number of Units as shall
equal the  Subscription  Amount as set forth below divided by the Offering Price
and agrees to be bound by the terms and conditions of this Agreement.

PURCHASER

1.          Dated:      _________, 2003

2.          Subscription Amount:  $__________

_________________________________       __________________________________
Signature of Purchaser                  Signature of Joint Purchaser
(and title, if applicable)              (if any)

_________________________________       __________________________________
Taxpayer Identification or Social       Taxpayer Identification or Social
Security Number                         Security Number of Joint Purchaser (if any)

_________________________________       __________________________________
Name (please print as name will         Name of Joint Purchaser (please print if any)
appear on certificate)

_________________________________       __________________________________
Number and Street                       Number and Street

_________________________________       __________________________________
City   State   Zip Code                 City   State   Zip Code



ACCEPTED BY:

DATATEC SYSTEMS, INC.


By:
Name:  ________________________
Title: ________________________

Dated: ________________________

                                       23





            EXHIBIT A TO DATATEC SYSTEMS, INC. SUBSCRIPTION AGREEMENT

                                 FORM OF WARRANT



                                       24





            EXHIBIT B TO DATATEC SYSTEMS, INC. SUBSCRIPTION AGREEMENT

                           WIRE TRANSFER INSTRUCTIONS


                       [INSERT WIRE TRANSFER INSTRUCTIONS]


                                       25





            EXHIBIT C TO DATATEC SYSTEMS, INC. SUBSCRIPTION AGREEMENT

                              FORM OF LEGAL OPINION


                                       26





            EXHIBIT D TO DATATEC SYSTEMS, INC. SUBSCRIPTION AGREEMENT

                             PURCHASER QUESTIONNAIRE









                                  CONFIDENTIAL

                             PURCHASER QUESTIONNAIRE
                             -----------------------

            Before any sale of securities in the above-captioned  Company can be
made to you, this  Questionnaire  must be completed and returned to FAHNESTOCK &
CO. INC., Attn: Investment Banking Dept., 125 Broad St., New York, NY 10004.

            The purpose of this  Questionnaire is to determine  whether you meet
the standards  imposed by Section 4(6) of the Securities Act of 1933, as amended
(the "Securities Act").

(1)  Name:______________________________________________________________________

(2)  Address:

     (a)     Home: _____________________________________________________________

                   _____________________________________________________________

             Telephone:  (    )
                        ________________________________________________________

     (b)     Business: _________________________________________________________

                       _________________________________________________________

             Telephone:  (    )
                        ________________________________________________________


(3)  Social Security Number:                            -             -
                            ____________________________________________________

(4)  Occupation:            ____________________________________________________

(5)  Age:                   ____________________________________________________

(6)  The  following  information  is required to ascertain  whether you would be
     deemed an  "accredited  investor"  as defined in Rule 501 of  Regulation  D
     under  the  Securities  Act.  Please  check  whether  you  are  any  of the
     following:

     (a)    A bank as defined in Section  3(a)(2) of the Securities  Act, or any
            savings  and loan  association  or other  institution  as defined in
            Section  3(a)(5)(A)  of the  Securities  Act  whether  acting in its
            individual or fiduciary  capacity;  any broker or dealer  registered
            pursuant to Section 15 of the  Securities  Exchange Act of 1934,  as
            amended;  any  insurance  company as defined in Section 2(13) of the
            Securities  Act;  any  investment   company   registered  under  the
            Investment Company Act of 1940 or a business  development company as
            defined  in  Section  2(a)(48)  of  that  act;  any  Small  Business
            Investment   Company   licensed   by   the   U.S.   Small   Business
            Administration  under  Section  301(c) or (d) of the Small  Business
            Investment  Act of 1958;  any plan  established  and maintained by a

                                      D-1





            state, its political subdivisions,  or any agency or instrumentality
            of a state or its  political  subdivisions,  for the benefits of its
            employees if such plan has total assets in excess of $5,000,000; any
            employee  benefit plan within the meaning of Title I of the Employee
            Retirement Income Security Act of 1974 if the investment decision is
            made by a plan  fiduciary,  as defined in Section 3(21) of such act,
            which is  either a bank,  savings  and loan  association,  insurance
            company,  or  registered  investment  adviser,  or if  the  employee
            benefit  plan has total  assets in  excess  of  $5,000,000  or, if a
            self-directed plan, with investment decisions made solely by persons
            that are accredited investors;

                                                               Yes____    No____

     (b)    A  private  business  development  company  as  defined  in  Section
            202(a)(22) of the Investment Advisers Act of 1940;

                                                               Yes____    No____

     (c)    An  organization  described  in Section  501(c)(3)  of the  Internal
            Revenue Code, corporation,  Massachusetts or similar business trust,
            or partnership, not formed for the specific purpose of acquiring the
            securities offered, with total assets in excess of $5,000,000.

                                                               Yes____    No____

     (d)    A director, executive officer, or general partner of the Company;

                                                               Yes____    No____

     (e)    A natural person whose individual net worth, or joint net worth with
            your spouse, at the time of your purchase exceeds $1,000,000;

                                                               Yes____    No____

     (f)    A natural person who had an individual  income in excess of $200,000
            in each of the two  most  recent  years or joint  income  with  your
            spouse  in  excess  of  $300,000  in each of those  years  and has a
            reasonable  expectation  of reaching  the same  income  level in the
            current year;

                                                               Yes____    No____

     (g)    A trust,  with total assets in excess of  $5,000,000  not formed for
            the specific  purpose of acquiring  the  securities  offered,  whose
            purchase is directed by a sophisticated person; or

                                                               Yes____    No____

     (h)    Any  entity  in  which  all  of the  equity  owners  are  accredited
            investors.

                                                               Yes____    No____

                                      D-2





     (7)    Investment, business, and educational experience:

            (a)  Educational background:

            ___________________________________________________

            ___________________________________________________

            (b)  Principal employment positions held during last five years:

            ___________________________________________________

            ___________________________________________________

            ___________________________________________________

            (c) Frequency of prior investment (check one in each column):

                                                           Venture Capital
                                  Stocks and Bonds             Investments
                                  ----------------             -----------

                Frequently        ________________       _____________________

                Occasionally      ________________       _____________________

                Never             ________________       _____________________

     (8)    Please list the name and address of your:

            (a) Bank ________________________________________________

                _____________________________________________________

            (b) Accountant___________________________________________

                _____________________________________________________

            I represent that the foregoing information is true and correct.

            Dated:______________________________, 2003

                                          ____________________________________
                                          (Name of Investor - Please Print)

                                          ____________________________________
                                          (Signature)

                                          ____________________________________
                                          (Print Name)      (Title)

                                      D-3