<PAGE>


                                                                    EXHIBIT 4.9

                             SUBSCRIPTION AGREEMENT


Dear Subscriber:

         You ("Subscriber") hereby agree to purchase, and Famous Fixins, Inc., a
New York corporation (the "Company"),  hereby agrees to issue and to sell to the
Subscriber,  a Convertible Note convertible in accordance with the terms thereof
into  shares of the  Company's  $0.001  par value  common  stock  (the  "Company
Shares")  for the  consideration  as set  forth  on the  signature  page  hereof
("Purchase Price").  The form of Convertible Note is annexed hereto as Exhibit A
upon the terms and subject to the  limitations  and conditions set forth in such
Debentures and warrants, in the form attached hereto as Exhibit "B", to purchase
One Million  (1,000,000)  shares of Common Stock (the "Warrants").  (The Company
Shares  included  in the  Securities  (as  hereinafter  defined)  are  sometimes
referred to herein as the "Shares",  "Common  Shares" or "Common  Stock").  (The
Notes,  Warrants and Company Shares are collectively  referred to herein as, the
"Securities").  Upon acceptance of this Agreement by the Subscriber, the Company
shall issue and deliver the Note and Warrants against payment,  by federal funds
wire transfer of the Purchase Price.

                  The  following  terms  and  conditions  shall  apply  to  this
subscription.

                  1. SUBSCRIBER'S REPRESENTATIONS AND WARRANTIES. The Subscriber
hereby represents and warrants to and agrees with the Company that:

                           (a)  INFORMATION ON COMPANY.  The Subscriber has been
furnished  with the Company's  Form 10-K for the year ended December 31, 2001 as
filed with the Securities and Exchange  Commission (the  "Commission")  together
with all  subsequently  filed forms,  10-Q,  8-K, and other  publicly  available
filings made with the Commission  (hereinafter  referred to  collectively as the
"Reports"). In addition, the Subscriber has received from the Company such other
information concerning its operations,  financial condition and other matters as
the  Subscriber  has  requested  in  writing  (such  information  in  writing 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
was not a "U.S.  person",  as  defined in  Regulation  S  promulgated  under the
Securities  Act of 1933 at the  time  the  offer  or sale of the  Note is  made.
Additionally, Subscriber is 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 NOTE AND  WARRANT.  On the  Closing
Date, the Subscriber will purchase the Note and




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<PAGE>

Warrant for its own account and not with a view to any distribution  thereof and
that the  purchase  of the Note is  intended  to be made as a  "Transaction"  as
defined in Regulation D.

                           (d) COMPLIANCE  WITH  SECURITIES  ACT. The Subscriber
understands and agrees that the Securities have
not been  registered  under the 1933  Act,  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 unless a subsequent  disposition
is registered under the 1933 Act or is exempt from such registration.

                           (e) COMPANY SHARES  LEGEND.  The Company Shares shall
bear the following legend, unless same shall have
been included in an effective registration statement under the 1933 Act:

                  "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 AN OPINION OF COUNSEL
                  REASONABLY  SATISFACTORY  TO  FAMOUS  FIXINS,  INC.  THAT SUCH
                  REGISTRATION IS NOT REQUIRED."

                           (f) 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 FAMOUS FIXINS,
                  INC. REGISTRATION IS NOT REQUIRED."

                           (g)  COMMUNICATION  OF  OFFER.  The offer to sell the
Securities was directly communicated to the
Subscriber.  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.

                           (h)  CORRECTNESS OF  REPRESENTATIONS.  The Subscriber
represents that the foregoing representations and
warranties are true and correct as of the date hereof and, unless the Subscriber
otherwise  notifies  the  Company  prior to the  Closing  Date  (as  hereinafter
defined),  shall be true and  correct  as of the  Closing  Date.  The  foregoing
representations and warranties shall survive the Closing Date.

                  2.  COMPANY   REPRESENTATIONS  AND  WARRANTIES.   The  Company
represents and warrants to and agrees with the Subscriber that:

                           (a) DUE  INCORPORATION.  The  Company and each of its
subsidiaries, if any, is a corporation duly

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<PAGE>

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 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 and
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,
and such other agreements and to perform its obligations hereunder and under all
other agreements entered into by the Company relating hereto.

                           (d)  ADDITIONAL  ISSUANCES.  Except  as set  forth on
Schedule  2(d),  there are no  outstanding  agreements  or 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 in the Reports or Other
Written Information.

                           (e) CONSENTS. No consent, approval,  authorization or
order  of  any  court,   governmental   agency  or  body  or  arbitrator  having
jurisdiction  over  the  Company,  or  any  of  its  affiliates,   the  National
Association  of  Securities  Dealers,  Inc.  ("NASD"),  NASDAQ or the  Company's
Shareholders  is  required  for  execution  of this  Agreement,  and  all  other
agreements  entered into by the Company  relating  thereto,  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 of the Subscriber in
Paragraph  1  are  true  and  correct  and  the  Subscriber  complies  with  its
obligations  under  this  Agreement,  neither  the  issuance  and  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  certificate 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
affiliates  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 is a party,  by which the Company or any of its affiliates is
bound, or to which any of the properties of the Company or any of its affiliates
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
is a party except the violation, conflict, breach, or default of which would not
have a material adverse effect on the Company; or


                                       3
<PAGE>

     (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 State laws;

     (ii) have been, or will be, duly and validly  authorized and on the date of
issuance and on the Closing Date, as hereinafter  defined, and the date the Note
is converted,  the Securities  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  the   Subscriber   complies   with  the   Prospectus   delivery
requirements);

     (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.

                           (h)  LITIGATION.  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  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 or Other  Written  Information,  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 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.  The
Company's  common  stock  is  listed  for  trading  on the  OTC  Bulletin  Board
("Bulletin Board").  Pursuant to the provisions of the 1934 Act, the Company has
filed all reports and other materials  required to be filed  thereunder with the
Securities and Exchange Commission during the preceding twelve months.

                           (j) NO  MARKET  MANIPULATION.  The  Company  has  not
taken,  and will not take,  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
Schedule  hereto,  there has been no material  adverse  change in the  Company's
business,  financial  condition or affairs not  disclosed  in the  Reports.  The


                                       4
<PAGE>

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) 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. 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 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.

                           (m)STOP TRANSFER.  The Securities are restricted
securities as of the date of this  Agreement.  The Company
will not issue any stop transfer order or other order impeding the sale,  resale
or delivery of the Securities,  except as may be required by federal  securities
laws.

                           (n)  DEFAULTS.  Neither  the  Company  nor any of its
subsidiaries  is in violation of its  Certificate  of  Incorporation  or ByLaws.
Neither the Company nor any of its  subsidiaries  is (i) 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) 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.

                           (o) 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 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 offering of the  Securities  to be
integrated  with other  offerings.  The Company has not  conducted  and will not
conduct any offer other than the transactions  contemplated  hereby that will be
integrated with the offer or issuance of the Securities.

                           (p) 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 Act) in connection  with the offer
or sale of the Securities.

                           (q) LISTING. The Company's common stock is quoted on,
and listed for trading 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 or that the Company's  common stock does not meet all requirements for the
continuation of such listing.

                           (r) 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 December
31, 2001 and which,  individually  or in the aggregate,  would not reasonably be
expected to have a material adverse effect on the Company's financial condition.


                                       5
<PAGE>

                           (s) NO  UNDISCLOSED  EVENTS OR  CIRCUMSTANCES.  Since
December 31, 2001, 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.

                           (t) 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  2(t) hereto.  Except as set forth in the Reports
and Other Written Information and Schedule 2(t), 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.

                           (u)  CORRECTNESS  OF  REPRESENTATIONS.   The  Company
represents  that  the  foregoing  representations  and  warranties  are true and
correct as of the date hereof in all material respects,  and, unless the Company
otherwise  notifies the Subscriber  prior to the Closing Date, shall be true and
correct  in  all  material  respects  as of  the  Closing  Date.  The  foregoing
representations and warranties shall survive the Closing Date.

                  3. REGULATION D OFFERING. This Offering is being made pursuant
to the exemption from the registration provisions of the Securities Act of 1933,
as amended,  afforded by Rule 506 of Regulation D promulgated thereunder. On the
Closing  Date,  the Company will  provide an opinion  reasonably  acceptable  to
Subscriber from the Company's  legal counsel opining on the  availability of the
Regulation  D  exemption  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 Note and issuance
of the Company Shares.

                  4.  REISSUANCE OF  SECURITIES.  The Company  agrees to reissue
certificates  representing  the  Securities  without  the  legends  set forth in
Sections 1(e) and 1(f) above at such time as (a) the holder thereof is permitted
to and disposes of such  Securities  pursuant to Rule 144(d)  and/or Rule 144(k)
under the 1933 Act in the  opinion of  counsel  reasonably  satisfactory  to the
Company, or (b) upon resale subject to an effective registration statement after
the  Securities  are  registered  under  the 1933  Act.  The  Company  agrees to
cooperate  with the Subscriber in connection  with all resales  pursuant to Rule
144(d) and Rule  144(k)  and  provide  legal  opinions  necessary  to allow such
resales  provided  the  Company  and its counsel  receive  reasonably  requested
written representations from the Subscriber and selling broker, if any. Provided
the Subscriber provides required  certifications and representation  letters, if
any, if the Company  fails to remove any legend as required by this Section 4 (a
"Legend Removal Failure"),  then beginning on the tenth (10th) day following the
date that the  Subscriber  has requested the removal of the legend and delivered
all items reasonably  required by the Company to be delivered by the Subscriber,
the Company  continues to fail to remove such legend,  the Company  shall pay to
each Subscriber or assignee holding shares, subject to a Legend Removal Failure,
as  liquidated  damages and not a penalty an amount equal to one percent (1%) of
the Purchase  Price of the shares  subject to a Legend  Removal  Failure per day
that such failure continues. If during any twelve (12) month period, the Company


                                       6
<PAGE>

fails to remove any legend as required  by this  Section 4 for an  aggregate  of
thirty (30) days, each Subscriber or assignee  holding  Securities  subject to a
Legend Removal  Failure may, at its option,  require the Company to purchase all
or any portion of the  Securities  subject to a Legend  Removal  Failure held by
such Subscriber or assignee at a price per share equal to 120% of the applicable
Purchase Price.

                  5. REGULATION S. N/A.

                  6. FEES.

                           The  Company  shall pay to counsel to the  Subscriber
its fees of $15,000 for services rendered to the
Subscriber in connection with this Agreement for aggregate  subscription amounts
of up to $500,000 of principal  amount of Notes (the  "Offering")  and acting as
escrow agent for the Offering.


                  7. COVENANTS OF THE COMPANY.  The Company covenants and agrees
with the Subscriber as follows:

                           (a) The Company will advise the Subscriber,  promptly
after it receives notice of issuance by the
Securities and Exchange 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) The Company shall promptly  secure the listing of
the Company Shares,  and Common Stock issuable upon the exercise of the Warrants
upon each national securities  exchange,  or automated 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 Notes are  outstanding.
The Company will maintain the listing of its Common Stock on the NASDAQ SmallCap
Market,  NASDAQ  National  Market System,  NASD OTC Bulletin  Board, or New York
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 National  Association of Securities
Dealers ("NASD") and such exchanges, as applicable. The Company will provide the
Subscriber  copies of all  notices  it  receives  notifying  the  Company of the
threatened and actual delisting of the Common Stock from any Principal Market.

                           (c) The Company  shall notify the  Commission,  NASD,
the Principal Market and applicable state authorities,  in accordance with their
requirements,  if any, 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 Subscriber and promptly provide copies thereof
to Subscriber.

                           (d)     From the Closing Date and until at least two
(2) years after the  effectiveness of the Registration  Statement on Form S-2 or
such other  Registration  Statement  described in Section 10.1(iv)  hereof,  the
Company  will (i) cause its Common  Stock to  continue  to be  registered  under
Sections  12(b) or 12(g) of the Exchange  Act,  (ii) comply in all respects with
its reporting and filing  obligations  under the Exchange Act, (iii) comply with
all  reporting  requirements  that are  applicable  to an issuer with a class of
Shares registered pursuant to Section 12(g) of the Exchange Act, 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 Act or the Exchange 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 two (2)


                                       7
<PAGE>

years after the actual effective date of the Registration  Statement on Form S-2
or other Registration  Statement described in Section 10.1(iv) hereof. Until the
resale of the Company  Shares by the  Subscriber,  the Company will continue the
listing  of the  Common  Stock on the  Bulletin  Board  and will  comply  in all
respects with the Company's  reporting,  filing and other  obligations under the
bylaws or rules of Bulletin Board.

                           (e) The Company  undertakes  to reserve,  pro rata on
behalf of each holder of a Note,  from its authorized but unissued common stock,
at all times that Notes remain  outstanding,  a number of common shares equal to
not less than the amount of common shares necessary to allow each such holder to
be able to fully convert all such outstanding Notes.

                           (f) 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  notes or equity  instruments  of the
Company, nor non-trade obligations outstanding on the Closing Date.

                  8.       COVENANTS OF THE COMPANY AND SUBSCRIBER REGARDING
INDEMNIFICATION.

                           (a) The Company  agrees to indemnify,  hold harmless,
reimburse and defend Subscriber, Subscriber's
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 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 Subscribers relating hereto.

                           (b)  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  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  Subscriber  of any covenant or  undertaking  to be performed by
Subscriber  hereunder,  or any other  agreement  entered into by the Company and
Subscribers relating hereto.

                           (c)      The procedures set forth in Section 10.6
shall apply to the  indemnifications set forth in Sections8(a) and 8(b) above.

                  9.1. 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  the issuance of 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   unlegended,   free-trading,   and  freely
transferable,   and  will  not  contain  a  legend  restricting  the  resale  or
transferability  of the  Company  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 hereto) to the  Company via  confirmed  telecopier
transmission  or  otherwise  pursuant to Section  11(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 or causes the  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  the  Subscriber  has made  request  for such
electronic transfer. The Company will provide a Note representing the balance of
the Note not so converted to the Subscriber, if requested by Subscriber provided


                                       8
<PAGE>

an original  Note is delivered  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 9 hereof, or the Mandatory Redemption Amount described in Section 9.2
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 late
payments to the  Subscriber  for late  issuance  of Shares in the form  required
pursuant to Section 9 hereof upon  Conversion of the Note or late payment of the
Mandatory  Redemption  Amount,  in the amount of $100 per business day after the
Delivery Date or Mandatory Redemption Payment Date, as the case may be, for each
$10,000 of Note principal amount being converted or redeemed.  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.

                  9.2.  MANDATORY  REDEMPTION AT SUBSCRIBER'S  ELECTION.  In the
event the Company 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 for any
reason other than pursuant to the  limitations  set forth in Section 9.3 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) 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


                                       9
<PAGE>

Conversion  Date) at the  Conversion  Price by the highest  closing price of the
Common Stock on the principal  market from the Deemed  Conversion Date until the
day prior to the  receipt of the  Mandatory  Redemption  Payment,  whichever  is
greater ("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  will be deemed paid and no longer
outstanding.

                  9.3. 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 9.3 upon 75 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%.

                  9.4.  INJUNCTION - POSTING OF BOND.  In the event a Subscriber
shall  elect to  convert a Note or part  thereof,  the  Company  may not  refuse
conversion  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 shall have been sought and
obtained and the Company posts a surety bond for the benefit of such  Subscriber
in the  amount  of 130% of the  amount  of the  Note,  which is  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.

                  9.5. 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 (i) the  Subscriber's  total  purchase  price
(including  brokerage  commissions,  if any) for the  shares of Common  Stock so
purchased  exceeds (ii) 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 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.

                  9.6  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 and pro rata  distributions of property or equity
interests to the Company's shareholders.


                                       10
<PAGE>

                  9.7.  REDEMPTION.  The Company may not redeem or call the Note
without the consent of the holder of the Note.

                  10.1.  REGISTRATION  RIGHTS.  The  Company  hereby  grants the
following registration rights to holders of the Securities.

                           (i)      On one occasion,  for a period  commencing
91 days after the Closing Date, but not later than three years after the Closing
Date ("Request  Date"),  the Company,  upon a written request therefore from any
record  holder or holders  of more than 50% of the  aggregate  of the  Company's
Shares issued and issuable upon conversion of the Notes (the Common Stock issued
or issuable  upon  conversion of the Notes or issuable by virtue of ownership of
the Notes are collectively the "Registrable Securities"), shall prepare and file
with  the  Commission  a  registration  statement  under  the Act  covering  the
Registrable  Securities  which are the  subject  of such  request,  unless  such
Registrable Securities are the subject of an effective registration statement or
included for registration in a pending registration statement. 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 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 10.1(i).  As a condition  precedent to the inclusion of Registrable
Securities,  the holder thereof shall provide the Company with such  information
as the Company  reasonably  requests.  The  obligation of the Company under this
Section 10.1(i) shall be limited to one registration statement.

                           (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  Subscriber  or Holder  pursuant to an effective  registration
statement, each such time it will give at least 25 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 15 days after
the giving of any such notice by the Company, to register any of the Registrable
Securities,  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 10.1(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 10.4 hereof, the
Company may  withdraw or delay or suffer a delay of any  registration  statement
referred to in this Section 10.1(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


                                       11
<PAGE>

Section  10.1(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 10.1(ii) rather than Section 10.1(i),  and the rights of the
holders of  Registrable  Securities  covered by such  written  request  shall be
governed by Section 10.1(ii).

                           (iv)     The Company  shall file with the  Commission
not later than sixty (60) days after the Closing Date (the "Filing  Date"),  and
use its reasonable  commercial  efforts to cause to be declared effective within
one hundred  twenty (120) days after the Closing  Date, a Form S-2  registration
statement  (or such other form that it is  eligible to use) in order to register
the Registrable Securities for issuance to the Subscriber and distribution under
the Act. The Commission  must declare the  registration  statement  described in
this  paragraph  effective no later than one hundred twenty (120) days after the
Closing Date ("Effective Date"). The Company will register a number of shares of
Common Stock in the afore described  registration statement that is equal to the
number of  Company  Shares  issuable  at the  Conversion  Price in effect at the
Closing  Date,  or  actual  filing  date of the  registration  statement  or any
amendment thereto assuming conversion of 200% of the Notes (whichever results in
the  greatest  number of  Company  shares).  Such  registration  statement  will
immediately be amended or additional registration statements will be immediately
filed by the Company as necessary in order to register additional Company Shares
to allow the unlegended  reissuance of all Common Stock included and issuable by
virtue  of the  Registrable  Securities.  The  Registrable  Securities  shall be
reserved  and set  aside  exclusively  for the  benefit  of each  Subscriber  in
proportion to each Subscriber's interest in the Registrable Securities,  and not
issued, employed or reserved for anyone other than the Subscriber. No securities
of the Company  other than the  Registrable  Securities  will be included in the
registration statement described in this Section 10.1(iv) except as described on
SCHEDULE 10.1.

                  10.2. REGISTRATION PROCEDURES.  If and whenever the Company is
required by the provisions  hereof to effect the  registration  of any shares of
Registrable  Securities  under the Act, the Company  will, as  expeditiously  as
possible:

                           (a)   prepare   and  file  with  the   Commission   a
registration statement 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
("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 the latest of:  (i) twelve  months  after the latest
Maturity Date of a Note;  (ii) until six months after all the Company Shares are
eligible for resale pursuant to Rule 144(k) of the 1933 Act; or (iii) until such
registration  statement  has been  effective  for a period  of not less than 365
days, and comply with the provisions of the 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,  such number of copies of
the registration  statement and the prospectus  included therein (including each
preliminary  prospectus)  as such  Seller  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  shall
reasonably designate, 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;

                                       12
<PAGE>

                           (e) 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 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;

                           (g) 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;

                           (h) will notify the  Subscriber of the  effectiveness
of the registration statement within one business
day of such event.

                  10.3.   PROVISION  OF  DOCUMENTS.   In  connection  with  each
registration  hereunder,  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. In connection with
each   registration   pursuant  to  Section  10.1(i)  or  10.1(ii)  covering  an
underwritten  public offering,  the Company and the Seller agree to enter into a
written agreement with the managing underwriter in such form and containing such
provisions as are customary in the  securities  business for such an arrangement
between such  underwriter  and  companies of the Company's  size and  investment
stature.

                  10.4.  NON-REGISTRATION EVENTS. The Company and the Subscriber
agree that the Seller will suffer damages if any registration statement required
under  Section  10.1(i)  or  10.1(ii)  above is not filed  within 60 days  after
written  request by the  Holder and not  declared  effective  by the  Commission
within 120 days after such  request  [or the  Filing  Date and  Effective  Date,
respectively,  in  reference to the  Registration  Statement on Form S-2 or such
other form  described in Section  10.1(iv)],  and  maintained  in the manner and
within the time periods  contemplated by Section 10 hereof,  and it would not be
feasible to ascertain the extent of such damages with precision. Accordingly, if
(i) the Registration  Statement described in Sections 10.1(i) or 10.1(ii) is not
filed within 60 days of such written  request,  or is not declared  effective by
the  Commission on or prior to the date that is 120 days after such request,  or
(ii) the  registration  statement  on Form S-2 or such other form  described  in
Section  10.1(iv)  is not filed on or before  the  Filing  Date or not  declared
effective on or before the sooner of the Effective  Date, or within ten business
days of receipt  by the  Company  of a written  or oral  communication  from the
Commission that the  registration  statement  described in Section 10.1(iv) will
not be  reviewed,  or (iii) any  registration  statement  described  in Sections
10.1(i),  10.1(ii)  or  10.1(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  30 days in the  aggregate  per year or more  than 20
consecutive  calendar  days  (defined as a period of 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 10.4 is referred to herein as
a "Non-Registration  Event"),  then, for so long as such Non-Registration  Event
shall continue,  the Company shall pay, at the Subscriber's  option,  in cash or
stock at the applicable  Conversion Price, as Liquidated  Damages to each holder
of any Registrable  Securities an amount equal to two percent (2%) per month for
each month or part thereof during the pendency of such  Non-Registration  Event,
of the principal of the Notes issued in the Offering,  whether or not converted,
owned of record by such holder or issuable as of or subsequent to the occurrence
of such  Non-Registration  Event.  Payments to be made  pursuant to this Section


                                       13
<PAGE>

10.4 shall be due and  payable  within ten (10)  business  days after  demand in
immediately  available  funds.  In the event a Mandatory  Redemption  Payment is
demanded  from  the  Company  by the  Holder  pursuant  to  Section  9.2 of this
Subscription  Agreement,  then the Liquidated  Damages described in this Section
10.4 shall no longer accrue on the portion of the Purchase Price  underlying the
Mandatory  Redemption  Payment,  from and after the date the Holder receives the
Mandatory Redemption Payment. It shall be deemed a Non-Registration  Event if at
any time the Company has registered for  unrestricted  resale fewer than 125% of
the amount of Common Shares  issuable upon full conversion of all sums due under
the Note.

                  10.5.  EXPENSES.  All  expenses  incurred  by the  Company  in
complying with Section 10, 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, and costs
of insurance are called "Registration  Expenses". All underwriting discounts and
selling commissions applicable to the sale of Registrable Securities,  including
any fees and  disbursements  of any special  counsel to the  Seller,  are called
"Selling Expenses". The Seller shall pay the fees of its own additional counsel,
if any. The Company will pay all  Registration  Expenses in connection  with the
registration statement under Section 10. All Selling Expenses in connection with
each  registration  statement  under Section 10 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.

                  10.6. INDEMNIFICATION AND CONTRIBUTION.

                           (a) In the event of a registration of any Registrable
Securities  under the Act pursuant to Section 10, the Company will 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 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 Act pursuant to Section 10, 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  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.


                                       14
<PAGE>

                           (b)  In the  event  of a  registration  of any of the
Registrable  Securities  under the Act  pursuant  to Section 10, the Seller will
indemnify and hold harmless the Company,  and each person,  if any, who controls
the Company within the meaning of the 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 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 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 Act pursuant to Section 10, 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  10.6(c) and shall only relieve it from any liability  which it may have
to such indemnified party under this Section 10.6(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 10.6(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  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 Act in any case in which
either (i) the Seller,  or any controlling  person of the Seller,  makes a claim
for  indemnification  pursuant  to  this  Section  10.6  but  it  is  judicially

                                       15
<PAGE>

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 10.6 provides for indemnification in
such case, or (ii) contribution under the Act may be required on the part of the
Seller  or  controlling   person  of  the  Seller  in  circumstances  for  which
indemnification  is provided  under this Section  10.6;  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 Act) will be entitled to  contribution  from any person or
entity who was not guilty of such fraudulent misrepresentation.

                  11.      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 Famous  fixins  Inc.,  1325 Howard  Avenue,  Suite #422,  Burlingame,
California  94010,  telecopier  number:  (650)  340-8015  and  (ii)  if  to  the
Subscriber,  to the name, address and telecopy number set forth on the signature
page  hereto,  with a copy  by  telecopier  to  Naccarato  &  Associates,  19600
Fairchild,  Suite  260,  Irvine,  CA  92612,  Attn:  Owen  M.  Naccarato,  Esq.,
telecopier number: (949) 851-9262.

                           (b) CLOSING.  The  consummation  of the  transactions
contemplated  herein shall take place at the offices of Feldman Weinstein,  LLP,
420  Lexington  Avenue,   Suite  2620,  New  York,  New  York  10170,  upon  the
satisfaction  of all  conditions  to Closing  set forth in this  Agreement.  The
closing date shall be the date that subscriber funds representing the net amount
due the Company from the Purchase  Price of the Offering is  transmitted by wire
transfer or otherwise to the Company (the "Closing Date").

                           (c)  ENTIRE  AGREEMENT;  ASSIGNMENT.  This  Agreement
represents 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.  That party shall assign no right or obligation of either party without
prior notice to and the written consent of the other party.

                           (d)  EXECUTION.  This  Agreement  may be  executed by
facsimile transmission, and in counterparts, each of which will be deemed an
original.


                                       16
<PAGE>

                           (e) LAW  GOVERNING  THIS  AGREEMENT.  This  Agreement
shall be governed by and construed in  accordance  with the laws of the State of
California 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 California or in the
federal  courts  located  in the  state  of  California.  Both  parties  and the
individuals  executing  this  Agreement  and other  agreements  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  with 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  11(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) CONFIDENTIALITY.  The Company agrees that it will
not  disclose  publicly  or  privately  the  identity of the  Subscriber  unless
expressly  agreed to in writing by the Subscriber or only to the extent required
by law.

                           (h)  AUTOMATIC  TERMINATION.   This  Agreement  shall
automatically terminate without any further action of either party hereto if the
Closing shall not have  occurred by the tenth (10th)  business day following the
date this Agreement is accepted by the Subscriber.


                                       17
<PAGE>

         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.

                            FAMOUS FIXINS, INC.
                            A New York Corporation


                            B: /S/ S. MICHAEL RUDOLPH
                            -------------------------------
                            Name: S. Michael Rudolph
                            Title:  Chief Executive officer

                            Dated: December 27, 2002




                                       18
<PAGE>
SUBSCRIBERS
-------------------------------------------- ----------------------------------
                                            Purchase Price of Note:    $500,000
                                             Number of Warrants:      1,000,000
                                             Aggregate purchase Price: $500,000
/s/ David Firestone
--------------------------------------
(Signature)

Mercator Momentum Fund, LP
Address: 555 South Flower Street, Suite 4500
         Los Angeles, CA 9071
Attn:    David Firestone
Telecopier: 213-599-8285




-------------------------------------------- ----------------------------------




                                       19
<PAGE>

                         LIST OF SCHEDULES AND EXHIBITS
                        --------------------------------

         Exhibit A                  Form of Note

         Exhibit B                  Form of Warrrant

         Exhibit C                  Form of Legal Opinion

         Schedule 2(d)              Additional Issuances

         Schedule 2(t)              Capitalization

         Schedule 10.1              Other Securities to be Registered












                                       20


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