SECURITIES PURCHASE AGREEMENT

            THIS SECURITIES PURCHASE AGREEMENT (this  "AGREEMENT"),  dated as of
March 1, 2001,  by and among  RUBBER  TECHNOLOGY  INTERNATIONAL  INC., a Florida
corporation, with headquarters located at 3185 E. Washington Blvd., Los Angeles,
CA 90023 (the  "COMPANY"),  and the Buyers listed on Schedule I attached  hereto
(individually, a "BUYER" or collectively "BUYERS" ).

                                   WITNESSETH:

            WHEREAS,  the Company and the Buyer(s) are executing and  delivering
this  Agreement  in reliance  upon an  exemption  from  securities  registration
pursuant to Section  4(2) and/or Rule 506 of  Regulation D  ("REGULATION  D") as
promulgated by the U.S. Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "1933 Act");

            WHEREAS,  the parties desire that, upon the terms and subject to the
conditions  contained herein,  the Company shall issue and sell to the Buyer(s),
as provided  herein,  and the Buyer(s)  shall  purchase  Five  Hundred  Thousand
Dollars  ($500,000) of convertible  debentures (the  "Convertible  Debentures"),
which shall be  convertible  into shares of the  Company's  common  stock,  (the
"COMMON STOCK") (as converted,  the "CONVERSION  SHARES"),  for a total purchase
price of Five Hundred Thousand Dollars  ($500,000) (the "PURCHASE PRICE") in the
respective  amounts set forth  opposite  each  Buyer(s) name on Schedule I ( the
"SUBSCRIPTION AMOUNT"); and

            WHEREAS,  contemporaneously  with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Registration Rights
Agreement  substantially in the form attached hereto as Exhibit A (the "INVESTOR
REGISTRATION  RIGHTS  AGREEMENT")  pursuant  to which the  Company has agreed to
provide  certain  registration  rights  under  the  1933 Act and the  rules  and
regulations promulgated there under, and applicable state securities laws; and

            WHEREAS,  the  Convertible  Debentures are being offered through The
May Davis Group,  Inc.  (the  "PLACEMENT  AGENT"),  as the  Company's  exclusive
placement agent for the offering; and

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

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



<PAGE>

            1.          PURCHASE AND SALE OF CONVERTIBLE DEBENTURES.

                        (a) PURCHASE OF CONVERTIBLE  DEBENTURES.  Subject to the
            satisfaction  (or  waiver)  of the  terms  and  conditions  of  this
            Agreement, each Buyer agrees, severally and not jointly, to purchase
            at Closing (as defined  herein below) and the Company agrees to sell
            and issue to each  Buyer,  severally  and not  jointly,  at Closing,
            Convertible   Debentures   in   amounts   corresponding   with   the
            Subscription Amount set forth opposite each Buyer's name on Schedule
            I hereto.  Upon  execution  hereof by a Buyer,  the Buyer shall wire
            transfer  the  Subscription  Amount set forth  opposite  his name on
            Schedule I in  same-day  funds or a check  payable  to "First  Union
            National Bank, as Escrow Agent for Rubber  Technology  International
            Inc. / The May Davis Group,  Inc.", which Subscription  Amount shall
            be held in escrow pursuant to the terms of the Escrow  Agreement (as
            hereinafter   defined)  and  disbursed  in   accordance   therewith.
            Notwithstanding the foregoing, a Buyer may withdraw his Subscription
            Amount and  terminate  this  Agreement  as to such Buyer at any time
            after the  execution  hereof  and prior to Closing  (as  hereinafter
            defined).


                        (b) CLOSING  DATE.  The closing of the purchase and sale
            of the Convertible  Debentures  (the "CLOSING")  shall take place at
            10:00 a.m. Eastern Standard Time on the fifth business day ("CLOSING
            DATE")  following  the  date  hereof,  subject  to  notification  of
            satisfaction  (or waiver) of the conditions to the Closing set forth
            in Sections 6 and 7 below (or such later date as is mutually  agreed
            to by the Company and the  Buyers).  The Closing  shall occur on the
            Closing Date at the offices of Butler Gonzalez, LLP, 1000 Stuyvesant
            Avenue, Suite 6, Union, NJ 07083 (or such other place as is mutually
            agreed to by the Company and the Buyers).

                         (c)  ESCROW   ARRANGEMENTS;   FORM  OF  PAYMENT.   Upon
             execution  hereof by Buyer(s) and pending  Closing,  the  aggregate
             proceeds  of the sale of the  Convertible  Debentures  to  Buyer(s)
             pursuant hereto, plus the fees and expenses of the Placement Agent,
             shall be deposited in a  non-interest  bearing  escrow account with
             First  Union  National  Bank,  as escrow  agent  ("ESCROW  AGENT"),
             pursuant to the terms of an escrow  agreement  between the Company,
             the  Placement  Agent  and the  Escrow  Agent in the form  attached
             hereto  as  Exhibit  B (the  "ESCROW  AGREEMENT").  Subject  to the
             satisfaction of the terms and conditions of this Agreement,  on the
             Closing Date,  (i) the Escrow Agent shall deliver to the Company in
             accordance  with the terms of the Escrow  Agreement  such aggregate
             gross proceeds for the Convertible Debentures to be issued and sold
             to such  Buyer(s) at the Closing minus the fees and expenses of the
             Placement Agent, by wire transfer of immediately available funds in
             accordance with the Company's written wire  instructions,  and (ii)
             the Company  shall  deliver to each Buyer,  Convertible  Debentures
             which such  Buyer(s) is purchasing  in amounts  indicated  opposite
             such  Buyer's  name on Schedule  I, duly  executed on behalf of the
             Company.

            2.           BUYER'S REPRESENTATIONS AND WARRANTEES.

                         Each Buyer  represents and warrants,  severally and not
jointly, that:


                                       2

<PAGE>

                         (a)  INVESTMENT  PURPOSE.  Each Buyer is acquiring  the
             Convertible   Debentures   and,  upon   conversion  of  Convertible
             Debentures,  the Buyer will  acquire  the  Conversion  Shares  then
             issuable,  for its own account for  investment  only and not with a
             view towards,  or for resale in connection with, the public sale or
             distribution  thereof,  except  pursuant  to  sales  registered  or
             exempted under the 1933 Act; provided,  however, that by making the
             representations herein, such Buyer reserves the right to dispose of
             the Conversion Shares at any time in accordance with or pursuant to
             an effective registration statement covering such Conversion Shares
             or an available exemption under the 1933 Act.

                         (b)  ACCREDITED  INVESTOR  STATUS.  Each  Buyer  is  an
             "ACCREDITED  INVESTOR" as that term is defined in Rule 501(a)(3) of
             Regulation D.

                         (c) RELIANCE ON EXEMPTIONS. Each Buyer understands that
             the  Convertible  Debentures  are being  offered  and sold to it in
             reliance on specific exemptions from the registration  requirements
             of United  States  federal and state  securities  laws and that the
             Company is relying in part upon the truth and accuracy of, and such
             Buyer's   compliance   with,   the   representations,   warranties,
             agreements,  acknowledgments  and  understandings of such Buyer set
             forth  herein  in  order  to  determine  the  availability  of such
             exemptions  and the  eligibility  of such  Buyer  to  acquire  such
             securities.

                         (d)  INFORMATION.  Each Buyer and its advisors (and his
             or, its counsel),  if any, have been  furnished  with all materials
             relating to the  business,  finances and  operations of the Company
             and information he deemed material to making an informed investment
             decision  regarding his purchase of the Convertible  Debentures and
             the  Conversion  Shares,  which have been  requested by such Buyer.
             Each  Buyer  and its  advisors,  if any,  have  been  afforded  the
             opportunity  to ask  questions  of the Company and its  management.
             Neither such  inquiries nor any other due diligence  investigations
             conducted  by  such  Buyer  or  its   advisors,   if  any,  or  its
             representatives shall modify, amend or affect such Buyer's right to
             rely on the Company's  representations and warranties  contained in
             Section 3 below.  Each Buyer understands that its investment in the
             Convertible  Debentures and the Conversion  Shares  involves a high
             degree of risk. Each Buyer is in a position  regarding the Company,
             which,  based upon  employment,  family  relationship  or  economic
             bargaining  power,   enabled  and  enables  such  Buyer  to  obtain
             information  from the Company in order to  evaluate  the merits and
             risks of this  investment.  Each Buyer has sought such  accounting,
             legal and tax advice,  as it has  considered  necessary  to make an
             informed investment decision with respect to its acquisition of the
             Convertible Debentures and the Conversion Shares.

                         (e) NO GOVERNMENTAL REVIEW. Each Buyer understands that
             no United States federal or state agency or any other government or
             governmental  agency  has passed on or made any  recommendation  or
             endorsement of the Convertible Debentures or the Conversion Shares,
             or the fairness or suitability of the investment in the Convertible
             Debentures  or the  Conversion  Shares,  nor have such  authorities
             passed  upon  or  endorsed  the  merits  of  the  offering  of  the
             Convertible Debentures or the Conversion Shares.



                                       3
<PAGE>

                         (f)  TRANSFER OR RESALE.  Each Buyer  understands  that
             except as provided in the Registration  Rights  Agreement:  (i) the
             Convertible  Debentures have not been and are not being  registered
             under the 1933 Act or any  state  securities  laws,  and may not be
             offered  for  sale,  sold,   assigned  or  transferred  unless  (A)
             subsequently  registered  thereunder,  or (B) such Buyer shall have
             delivered  to the  Company an opinion of  counsel,  in a  generally
             acceptable  form,  to the effect that such  securities  to be sold,
             assigned  or  transferred  may be  sold,  assigned  or  transferred
             pursuant to an exemption from such registration requirements;  (ii)
             any sale of such  securities made in reliance on Rule 144 under the
             1933 Act (or a successor  rule  thereto)  ("RULE  144") may be made
             only in accordance with the terms of Rule 144 and further,  if Rule
             144  is  not  applicable,  any  resale  of  such  securities  under
             circumstances  in which the seller (or the person  through whom the
             sale is made) may be deemed to be an  underwriter  (as that term is
             defined  in the 1933 Act) may  require  compliance  with some other
             exemption  under the 1933 Act or the rules and  regulations  of the
             SEC there under; and (iii) neither the Company nor any other person
             is under any obligation to register such securities  under the 1933
             Act or any state  securities  laws or to comply  with the terms and
             conditions of any exemption there under.  The Company  reserves the
             right to place stop  transfer  instructions  against the shares and
             certificates for the Conversion Shares.

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

                                    THE    SECURITIES    REPRESENTED   BY   THIS
                                    CERTIFICATE  HAVE NOT BEEN REGISTERED  UNDER
                                    THE SECURITIES  ACT OF 1933, AS AMENDED,  OR
                                    APPLICABLE   STATE   SECURITIES   LAWS.  THE
                                    SECURITIES  HAVE BEEN  ACQUIRED  SOLELY  FOR
                                    INVESTMENT  PURPOSES  AND  NOT  WITH  A VIEW
                                    TOWARD  RESALE  AND MAY NOT BE  OFFERED  FOR
                                    SALE,  SOLD,  TRANSFERRED OR ASSIGNED IN THE
                                    ABSENCE   OF   AN   EFFECTIVE   REGISTRATION
                                    STATEMENT  FOR  THE  SECURITIES   UNDER  THE
                                    SECURITIES  ACT  OF  1933,  AS  AMENDED,  OR
                                    APPLICABLE  STATE  SECURITIES  LAWS,  OR  AN
                                    OPINION   OF   COUNSEL,   IN   A   GENERALLY
                                    ACCEPTABLE  FORM,  THAT  REGISTRATION IS NOT
                                    REQUIRED UNDER SAID ACT OR APPLICABLE  STATE
                                    SECURITIES LAWS.

             The legend set forth above  shall be removed and the Company  shall
             issue a  certificate  without  such  legend  to the  holder  of the
             Conversion  Shares upon which it is stamped,  if, unless  otherwise
             required by state  securities  laws, (i) in connection  with a sale
             transaction,  provided the Conversion  Shares are registered  under
             the 1933 Act or (ii) in connection  with a sale  transaction,  such
             holder  provides  the Company  with an opinion of counsel,  in form


                                       4
<PAGE>

             acceptable  to the  Company and its  counsel,  to the effect that a
             public sale, assignment or transfer of the Conversion Shares may be
             made without registration under the 1933 Act.

                         (h) AUTHORIZATION, ENFORCEMENT. This Agreement has been
             duly and validly  authorized,  executed and  delivered on behalf of
             such  Buyer  and is a valid and  binding  agreement  of such  Buyer
             enforceable   in  accordance   with  its  terms,   except  as  such
             enforceability  may be limited by general  principles  of equity or
             applicable  bankruptcy,  insolvency,  reorganization,   moratorium,
             liquidation  and other  similar  laws  relating  to,  or  affecting
             generally,  the  enforcement  of applicable  creditors'  rights and
             remedies.

                        (i)  RECEIPT  OF  DOCUMENTS.  Each  Buyer and his or its
             counsel has received and read in their entirety: (i) this Agreement
             and each  representation,  warranty and covenant set forth  herein,
             the  Investor   Registration  Rights  Agreement,   and  the  Escrow
             Agreement;  (ii) all due diligence and other information  necessary
             to verify the accuracy and  completeness  of such  representations,
             warranties and  covenants;  (iii) the Company's Form 10-KSB for the
             fiscal year ended November 30, 2000; (iv) the Company's Form 10-QSB
             for the fiscal quarter March 31, 2000, June 30, 2000, and September
             30, 2000;  and (v) answers to all questions the Buyer  submitted to
             the Company  regarding an investment in the Company;  and the Buyer
             has relied on the  information  contained  therein and has not been
             furnished   any  other   documents,   literature,   memorandum   or
             prospectus.

                         (j) DUE FORMATION OF CORPORATE AND OTHER BUYERS. If the
             Buyer(s) is a corporation,  trust, partnership or other entity that
             is not an individual  person, it has been formed and validly exists
             and has not been  organized for the specific  purpose of purchasing
             the Convertible Debentures and is not prohibited from doing so.

                         (k)  DUE  AUTHORIZATION  OF  FIDUCIARY  BUYERS.  If the
             Buyer(s) is purchasing  the  Convertible  Debentures in a fiduciary
             capacity  for  another   person  or  entity,   including,   without
             limitation, a corporation,  partnership, trust or any other entity,
             the Buyer(s) has been duly authorized and empowered to execute this
             Agreement and such other person fulfills all the  requirements  for
             purchase of the  Convertible  Debentures  and agrees to be bound by
             the  obligations,   representations,   warranties,   and  covenants
             contained  herein.  Upon request of the Company,  the Buyer(s) will
             provide true, complete and current copies of all relevant documents
             creating  the Buyers,  authorizing  its  investment  in the Company
             and/or evidencing the satisfaction of the foregoing.

                         (l) FURTHER  REPRESENTATIONS  BY FOREIGN BUYERS. If the
             Buyer(s) is not a U.S. Person (as defined below), such Buyer hereby
             represents that such Buyer(s) is satisfied as to full observance of
             the  laws of such  Buyer's  jurisdiction  in  connection  with  any
             invitation  to  subscribe  for  the  securities  or any use of this
             Agreement,  including:  (i) the legal  requirements of such Buyer's
             jurisdiction  for the purchase of the securities,  (ii) any foreign
             exchange  restrictions  applicable  to  such  purchase,  (iii)  any
             governmental  or other  consents that may need to be obtained,  and
             (iv) the income tax and other tax  consequences,  if any, which may
             be relevant to the purchase, holding, redemption, sale, or transfer
             of the securities.  Such Buyer's  subscription and payment for, and
             such Buyer's continued beneficial ownership of, the securities will


                                       5
<PAGE>

             not violate any applicable securities or other laws of such Buyer's
             jurisdiction.  The term "U.S. Person" as used herein shall mean any
             person who is a citizen or resident of the United States or Canada,
             or any state, territory or possession thereof,  including,  but not
             limited  to, any  estate of any such  person,  or any  corporation,
             partnership,  trust or other entity  created or existing  under the
             laws  thereof,  or any  entity  controlled  or  owned by any of the
             foregoing.

                         (m) NO  LEGAL  ADVICE  FROM  THE  COMPANY.  Each  Buyer
             acknowledges,  that it had the opportunity to review this Agreement
             and the transactions contemplated by this Agreement with his or its
             own legal counsel and  investment  and tax advisors.  Each Buyer is
             relying  solely  on  such  counsel  and  advisors  and  not  on any
             statements  or  representations  of  the  Company  or  any  of  its
             representatives  or agents for legal, tax or investment advice with
             respect to this investment,  the transactions  contemplated by this
             Agreement or the securities laws of any jurisdiction.


             3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

             The Company represents and warrants to each of the Buyers that:

                         (a) ORGANIZATION AND QUALIFICATION. The Company and its
             subsidiaries are  corporations  duly organized and validly existing
             in good standing under the laws of the  jurisdiction  in which they
             are  incorporated,  and have the requisite  corporate  power to own
             their  properties  and to  carry  on their  business  as now  being
             conducted.  Each  of the  Company  and  its  subsidiaries  is  duly
             qualified  as a foreign  corporation  to do business and is in good
             standing in every  jurisdiction in which the nature of the business
             conducted by it makes such qualification  necessary,  except to the
             extent that the failure to be so qualified  or be in good  standing
             would not have a material  adverse  effect on the  Company  and its
             subsidiaries taken as a whole.

                         (b) AUTHORIZATION,  ENFORCEMENT,  COMPLIANCE WITH OTHER
             INSTRUMENTS.  (i) The Company has the requisite corporate power and
             authority  to enter into and perform this  Agreement,  the Investor
             Registration  Rights Agreement and any related  agreements,  and to
             issue  the  Convertible  Debentures  and the  Conversion  Shares in
             accordance  with the terms hereof and thereof,  (ii) the  execution
             and delivery of this Agreement,  the Registration  Rights Agreement
             and any related  agreements by the Company and the  consummation by
             it of the transactions contemplated hereby and thereby,  including,
             without limitation,  the issuance of the Convertible Debentures the
             Conversion Shares and the reservation for issuance and the issuance
             of the  Conversion  Shares  issuable  upon  conversion  or exercise
             thereof,  have  been  duly  authorized  by the  Company's  Board of
             Directors and no further  consent or  authorization  is required by
             the Company, its Board of Directors or its stockholders, (iii) this
             Agreement and the Investor  Registration  Rights  Agreement and any
             related  agreements  have been duly  executed and  delivered by the
             Company,  (iv) this  Agreement,  the Investor  Registration  Rights
             Agreement  and any  related  agreements  constitute  the  valid and
             binding  obligations of the Company enforceable against the Company
             in accordance with their terms,  except as such  enforceability may


                                       6
<PAGE>

             be  limited  by  general   principles   of  equity  or   applicable
             bankruptcy, insolvency, reorganization,  moratorium, liquidation or
             similar laws relating to, or affecting  generally,  the enforcement
             of creditors' rights and remedies.

                         (c)   CAPITALIZATION.   As  of  the  date  hereof,  the
             authorized  capital  stock of the Company  consists  of  75,000,000
             shares of Common Stock, par value $0.0001 per share, of which as of
             March 20, 2001, 70,660,940 shares were issued and outstanding.  All
             of such  outstanding  shares have been validly issued and are fully
             paid and  nonassessable.  Except as disclosed in the SEC  Documents
             (as defined in Section 3(f)) as amended,  no shares of Common Stock
             are subject to preemptive rights or any other similar rights or any
             liens or encumbrances suffered or permitted by the Company.  Except
             as  disclosed  in the  SEC  Documents  , as of  the  date  of  this
             Agreement, (i) there are no outstanding options,  warrants,  scrip,
             rights to  subscribe  to,  calls or  commitments  of any  character
             whatsoever  relating to, or securities or rights  convertible into,
             any  shares  of  capital  stock  of  the  Company  or  any  of  its
             subsidiaries,   or  contracts,   commitments,   understandings   or
             arrangements by which the Company or any of its  subsidiaries is or
             may become bound to issue additional shares of capital stock of the
             Company or any of its  subsidiaries  or options,  warrants,  scrip,
             rights to  subscribe  to,  calls or  commitments  of any  character
             whatsoever  relating to, or securities or rights  convertible into,
             any  shares  of  capital  stock  of  the  Company  or  any  of  its
             subsidiaries,  (ii) there are no  outstanding  debt  securities and
             (iii)  there are no  agreements  or  arrangements  under  which the
             Company or any of its  subsidiaries  is  obligated  to register the
             sale of any of their securities under the 1933 Act (except pursuant
             to the Registration  Rights Agreement).  There are no securities or
             instruments  containing  anti-dilution  or similar  provisions that
             will be triggered by the issuance of the Convertible  Debentures as
             described in this Agreement. The Company has furnished to the Buyer
             true  and  correct   copies  of  the   Company's   Certificate   of
             Incorporation,  as amended and as in effect on the date hereof (the
             "Certificate of  Incorporation"),  and the Company's By-laws, as in
             effect on the date  hereof  (the  "By-laws"),  and the terms of all
             securities convertible into or exercisable for Common Stock and the
             material  rights of the holders  thereof in respect  thereto  other
             than stock options issued to employees and consultants.

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

                         (e) NO CONFLICTS. Except as disclosed in SEC Documents,
             the  execution,  delivery and  performance of this Agreement by the
             Company and the  consummation  by the  Company of the  transactions
             contemplated  hereby  will not (i)  result  in a  violation  of the
             Certificate of  Incorporation,  any  certificate of designations of
             any  outstanding  series of  preferred  stock of the Company or the
             By-laws or (ii)  conflict with or constitute a default (or an event


                                       7
<PAGE>

             which with notice or lapse of time or both would  become a default)
             under,  or give to others  any  rights of  termination,  amendment,
             acceleration  or  cancellation  of,  any  agreement,  indenture  or
             instrument  to which the  Company or any of its  subsidiaries  is a
             party,  or  result in a  violation  of any law,  rule,  regulation,
             order,  judgment or decree (including  federal and state securities
             laws and  regulations  and the rules and  regulations of the Nasdaq
             Stock Market Inc.'s OTC Bulletin Board on which the Common Stock is
             quoted)  applicable to the Company or any of its subsidiaries or by
             which  any  property  or  asset  of  the  Company  or  any  of  its
             subsidiaries  is bound or affected.  Except as disclosed in the SEC
             Documents, neither the Company nor its subsidiaries is in violation
             of any term of or in default under its Certificate of Incorporation
             or   By-laws   or  their   organizational   charter   or   by-laws,
             respectively,  or  any  material  contract,  agreement,   mortgage,
             indebtedness,  indenture,  instrument, judgment, decree or order or
             any statute,  rule or  regulation  applicable to the Company or its
             subsidiaries.  The business of the Company and its  subsidiaries is
             not being conducted, and shall not be conducted in violation of any
             material law, ordinance,  or regulation of any governmental entity.
             Except  as  specifically  contemplated  by  this  Agreement  and as
             required  under the 1933 Act and any  applicable  state  securities
             laws,   the  Company  is  not   required  to  obtain  any  consent,
             authorization or order of, or make any filing or registration with,
             any  court  or  governmental  agency  in order  for it to  execute,
             deliver or perform any of its obligations  under or contemplated by
             this Agreement or the  Registration  Rights Agreement in accordance
             with the terms  hereof or thereof.  Except as  disclosed in the SEC
             Documents,  all  consents,  authorizations,   orders,  filings  and
             registrations  which the Company is required to obtain  pursuant to
             the  preceding  sentence have been obtained or effected on or prior
             to the date hereof. The Company and its subsidiaries are unaware of
             any  facts or  circumstance,  which  might  give rise to any of the
             foregoing.

                         (f) SEC DOCUMENTS:  FINANCIAL STATEMENTS. Since January
             1, 2000,  the  Company  has filed all  reports,  schedules,  forms,
             statements and other documents  required to be filed by it with the
             SEC under of the  Securities  Exchange Act of 1934, as amended (the
             "1934 ACT") (all of the foregoing filed prior to the date hereof or
             amended after the date hereof and all exhibits included therein and
             financial   statements   and   schedules   thereto  and   documents
             incorporated by reference therein, being hereinafter referred to as
             the "SEC  DOCUMENTS").  The Company has  delivered to the Buyers or
             their representatives,  or made available through the SEC's website
             at  http://www.sec.gov.,  true  and  complete  copies  of  the  SEC
             Documents.  As of their respective dates, the financial  statements
             of the  Company  disclosed  in the SEC  Documents  (the  "FINANCIAL
             STATEMENTS")  complied  as to form in all  material  respects  with
             applicable  accounting  requirements  and the  published  rules and
             regulations  of  the  SEC  with  respect  thereto.  Such  financial
             statements have been prepared in accordance with generally accepted
             accounting  principles,  consistently  applied,  during the periods
             involved  (except  (i)  as  may  be  otherwise  indicated  in  such
             Financial  Statements or the notes thereto,  or (ii) in the case of
             unaudited  interim  statements,  to the  extent  they  may  exclude
             footnotes  or may be condensed  or summary  statements)  and fairly
             present in all  material  respects  the  financial  position of the
             Company as of the dates  thereof and the results of its  operations
             and cash flows for the periods then ended (subject,  in the case of


                                       8
<PAGE>

             unaudited  statements,  to normal year-end audit  adjustments).  No
             other  information  provided  by or on behalf of the Company to the
             Buyer  which  is not  included  in the  SEC  Documents,  including,
             without limitation, information referred to in Section 2(d) and (i)
             of this Agreement, contains any untrue statement of a material fact
             or omits to state any material fact  necessary in order to make the
             statements  therein,  in the light of the circumstances under which
             they were made, not misleading.

                         (g)  10(b)-5.  The SEC  Documents  do not  include  any
             untrue  statements of material  fact, nor do they omit to state any
             material fact required to be stated  therein  necessary to make the
             statements  made,  in light of the  circumstances  under which they
             were made, not misleading.

                         (h) ABSENCE OF  LITIGATION.  Except as disclosed in the
             SEC Documents,  there is no action,  suit,  proceeding,  inquiry or
             investigation  before or by any  court,  public  board,  government
             agency,  self-regulatory  organization  or body pending  against or
             affecting  the Company,  the Common  Stock or any of the  Company's
             subsidiaries,  wherein an unfavorable  decision,  ruling or finding
             would  (i)  have a  material  adverse  effect  on the  transactions
             contemplated   hereby  (ii)   adversely   affect  the  validity  or
             enforceability  of, or the  authority  or ability of the Company to
             perform  its  obligations  under,  this  Agreement  or  any  of the
             documents   contemplated  herein,  or  (iii)  except  as  expressly
             disclosed in the SEC Documents,  have a material  adverse effect on
             the  business,  operations,   properties,  financial  condition  or
             results of operation of the Company and its subsidiaries taken as a
             whole.

                         (i)  ACKNOWLEDGMENT  REGARDING  BUYER'S PURCHASE OF THE
             CONVERTIBLE  DEBENTURES.  The Company  acknowledges and agrees that
             the  Buyer(s) is acting  solely in the  capacity of an arm's length
             purchaser  with  respect  to this  Agreement  and the  transactions
             contemplated  hereby.  The Company  further  acknowledges  that the
             Buyer(s) is not acting as a financial  advisor or  fiduciary of the
             Company (or in any similar capacity) with respect to this Agreement
             and the  transactions  contemplated  hereby and any advice given by
             the Buyer(s) or any of their respective  representatives  or agents
             in connection with this Agreement and the transactions contemplated
             hereby  is  merely  incidental  to  such  Buyer's  purchase  of the
             Convertible  Debentures  or  the  Conversion  Shares.  The  Company
             further  represents  to the Buyer that the  Company's  decision  to
             enter into this Agreement has been based solely on the  independent
             evaluation by the Company and its representatives.

                         (j) NO GENERAL  SOLICITATION.  Neither the Company, nor
             any of its  affiliates,  nor  any  person  acting  on its or  their
             behalf, has engaged in any form of general  solicitation or general
             advertising (within the meaning of Regulation D under the 1933 Act)
             in connection with the offer or sale of the Convertible  Debentures
             or the Conversion Shares..



                                       9
<PAGE>

                         (k) NO INTEGRATED  OFFERING.  Neither the Company,  nor
             any of its affiliates, nor any person acting on its or their behalf
             has,  directly  or  indirectly,  made  any  offers  or sales of any
             security  or  solicited  any  offers  to buy  any  security,  under
             circumstances  that would require  registration  of the Convertible
             Debentures  or the  Conversion  Shares  under the 1933 Act or cause
             this  offering  of the  Convertible  Debentures  or the  Conversion
             Shares to be  integrated  with prior  offerings  by the Company for
             purposes of the 1933 Act.

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

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

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

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

                         (p) INSURANCE. The Company and each of its subsidiaries
             are  insured by  insurers of  recognized  financial  responsibility
             against such losses and risks and in such amounts as  management of
             the Company  believes to be prudent and customary in the businesses


                                       10
<PAGE>

             in which the Company and its subsidiaries are engaged.  Neither the
             Company nor any such  subsidiary  has been  refused  any  insurance
             coverage sought or applied for and neither the Company nor any such
             subsidiary  has any reason to  believe  that it will not be able to
             renew its  existing  insurance  coverage as and when such  coverage
             expires or to obtain similar  coverage from similar insurers as may
             be  necessary  to  continue  its  business at a cost that would not
             materially  and  adversely  affect  the  condition,   financial  or
             otherwise,  or the earnings,  business or operations of the Company
             and its subsidiaries, taken as a whole.

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

                         (r) INTERNAL ACCOUNTING CONTROLS.  The Company and each
             of its  subsidiaries  maintain  a  system  of  internal  accounting
             controls  sufficient  to  provide  reasonable  assurance  that  (i)
             transactions are executed in accordance with  management's  general
             or  specific  authorizations,  (ii)  transactions  are  recorded as
             necessary  to  permit   preparation  of  financial   statements  in
             conformity  with generally  accepted  accounting  principles and to
             maintain asset  accountability,  and (iii) the recorded amounts for
             assets is compared with the existing assets at reasonable intervals
             and appropriate action is taken with respect to any differences.

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

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


                                       11
<PAGE>

             authority of any jurisdiction, and the officers of the Company know
             of no basis for any such claim.

                         (t)  CERTAIN  TRANSACTIONS.  Except as set forth in the
             SEC Documents and except for arm's length transactions  pursuant to
             which the Company makes payments in the ordinary course of business
             upon terms no less  favorable  than the Company  could  obtain from
             third parties and other than the grant of stock  options  disclosed
             in the SEC Documents, none of the officers, directors, or employees
             of the  Company is  presently a party to any  transaction  with the
             Company  (other  than  for  services  as  employees,  officers  and
             directors),  including any contract, agreement or other arrangement
             providing for the  furnishing  of services to or by,  providing for
             rental  of real or  personal  property  to or  from,  or  otherwise
             requiring  payments  to or  from  any  officer,  director  or  such
             employee  or, to the  knowledge of the  Company,  any  corporation,
             partnership,  trust or other entity in which any officer, director,
             or any such employee has a  substantial  interest or is an officer,
             director, trustee or partner.

                         (u) FEES AND RIGHTS OF FIRST  REFUSAL.  The  Company is
            not obligated to offer the securities  offered  hereunder on a right
            of first refusal basis or otherwise to any third parties  including,
            but not limited to, current or former  shareholders  of the Company,
            underwriters, brokers, agents or other third parties.


             4. COVENANTS.

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

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

                         (c) REPORTING STATUS. Until the earlier of (i) the date
             as of  which  the  Investor(s)  (as  that  term is  defined  in the
             Registration  Rights  Agreement)  may  sell  all of the  Conversion
             Shares  without  restriction  pursuant to Rule  144(k)  promulgated
             under  the 1933  Act (or  successor  thereto),  or (ii) the date on
             which (A) the Buyer(s)  shall have sold all the  Conversion  Shares
             and (B) none of the  Convertible  Debentures are  outstanding  (the
             "REGISTRATION  Period"),  the  Company  shall use its  commercially
             reasonable  efforts to file in a timely manner all reports required
             to be  filed  with  the  SEC  pursuant  to the  1934  Act  and  the
             regulations  of the SEC  there  under,  and the  Company  shall not
             terminate  its status as an issuer  required to file reports  under


                                       12
<PAGE>

             the 1934 Act even if the  1934  Act or the  rules  and  regulations
             there under would otherwise permit such termination.

                         (d) USE OF PROCEEDS.  The Company will use the proceeds
             from the sale of the Convertible  Debentures for general  corporate
             purposes.

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

                         (f) LISTINGS OR QUOTATION.  The Company shall  promptly
            secure the listing or quotation of the  Conversion  Shares upon each
            national   securities   exchange,   automated  quotation  system  or
            Over-The-Counter  Bulletin Board or other market, if any, upon which
            shares  of  Common  Stock are then  listed  or  quoted  (subject  to
            official  notice of  issuance)  and shall  use its best  efforts  to
            maintain,  so long as any other  shares of Common  Stock shall be so
            listed,  such  listing of all  Conversion  Shares  from time to time
            issuable  under  the  terms of this  Agreement.  The  Company  shall
            maintain  the Common  Stock's  authorization  for  quotation  in the
            over-the counter market

                         (g)  EXPENSES.  Each of the  Company  and the  Buyer(s)
             shall  pay  all  costs  and  expenses  incurred  by such  party  in
             connection  with  the  negotiation,   investigation,   preparation,
             execution  and  delivery  of this  Agreement  and the  Registration
             Rights  Agreement.  The costs and expenses of the Placement  Agent,
             its counsel,  and  Kirkpatrick  & Lockhart LLP shall be paid for by
             the  Company  at  Closing  in  accordance  with  the  terms  of the
             Placement  Agent  Agreement  between the Company and the  Placement
             Agent, dated March 1, 2001.

                         (h)  CORPORATE  EXISTENCE.   So  long  as  any  of  the
             Convertible  Debentures remain  outstanding,  the Company shall not
             directly  or  indirectly  consummate  any  merger,  reorganization,
             restructuring,  consolidation,  sale of all or substantially all of
             the  Company's  assets  or  any  similar   transaction  or  related
             transactions  (each  such  transaction,  a "Sale  of the  Company")
             unless,  prior to the  consummation  of a Sale of the Company,  the
             Company  makes  appropriate  provision  to  insure  that,  upon the
             consummation  of such Sale of the  Company,  each of the holders of
             the  Convertible  Debentures  will  thereafter  have  the  right to
             acquire and receive such shares of stock,  securities  or assets as
             may be issued or payable  with  respect to or in  exchange  for the
             number of shares of Common Stock immediately theretofore acquirable
             and  receivable  upon the  conversion of such holder's  Convertible


                                       13
<PAGE>

             Debentures  had such Sale of the  Company not taken  place.  In any
             such case, the Company will make appropriate provision with respect
             to such holders' rights and interests to insure that the provisions
             of  this  Section  4(h)  will   thereafter  be  applicable  to  the
             Convertible Debentures.

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

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


             5.          TRANSFER AGENT INSTRUCTIONS.

                         The Company shall issue irrevocable instructions in the
            form  attached  hereto as Exhibit D to its  transfer  agent to issue
            certificates,  registered  in  the  name  of  the  Buyer(s)  or  its
            respective  nominee(s),  for the Conversion Shares representing such
            amounts of Convertible  Debentures as specified from time to time by
            the  Buyer(s)  to the Company  upon  conversion  of the  Convertible
            Debentures (the "Irrevocable Transfer Agent Instructions"). Prior to


                                       14
<PAGE>

            registration  of the Conversion  Shares under the 1933 Act, all such
            certificates  shall bear the restrictive legend specified in Section
            2(g) of this  Agreement.  The Company  warrants that no  instruction
            other than the Irrevocable  Transfer Agent Instructions  referred to
            in this Section 5, and stop transfer  instructions to give effect to
            Section 2(f) hereof (in the case of the  Conversion  Shares prior to
            registration of such shares under the 1933 Act) will be given by the
            Company to its transfer agent and that the  Conversion  Shares shall
            otherwise  be freely  transferable  on the books and  records of the
            Company  as and to the extent  provided  in this  Agreement  and the
            Registration  Rights  Agreement.  Nothing  in this  Section  5 shall
            affect in any way the Buyer's  obligations  and  agreement to comply
            with all  applicable  securities  laws  upon  resale  of  Conversion
            Shares.  If the  Buyer(s)  provides  the Company  with an opinion of
            counsel,  reasonably  satisfactory  in form,  and  substance  to the
            Company, that registration of a resale by the Buyer(s) of any of the
            Conversion  Shares is not  required  under the 1933 Act, the Company
            shall permit the transfer and,  promptly instruct its transfer agent
            to  issue  one or  more  certificates  in  such  name  and  in  such
            denominations  as specified by the Buyer.  The Company  acknowledges
            that  a  breach  by it  of  its  obligations  hereunder  will  cause
            irreparable harm to the Buyer by vitiating the intent and purpose of
            the  transaction  contemplated  hereby.  Accordingly,   the  Company
            acknowledges  that the remedy at law for a breach of its obligations
            under this Section 5 will be inadequate and agrees,  in the event of
            a breach or  threatened  breach by the Company of the  provisions of
            this Section 5, that the Buyer(s) shall be entitled,  in addition to
            all other  available  remedies,  to an  injunction  restraining  any
            breach and requiring  immediate  issuance and transfer,  without the
            necessity  of showing  economic  loss and  without any bond or other
            security being required.

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

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

                         (a) Each Buyer shall have executed  this  Agreement and
             the  Registration  Rights  Agreement  and delivered the same to the
             Company.

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

                         (c) The  representations and warranties of the Buyer(s)
             shall be true and correct in all  material  respects as of the date
             when made and as of the  Closing  Date as though  made at that time
             (except  for  representations  and  warranties  that  speak as of a


                                       15
<PAGE>

             specific date),  and the Buyer(s) shall have  performed,  satisfied
             and  complied  in  all  material   respects  with  the   covenants,
             agreements  and  conditions   required  by  this  Agreement  to  be
             performed,  satisfied or complied  with by the Buyer(s) at or prior
             to the Closing Date.

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

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

                         (a) The Company shall have executed this  Agreement and
             the Registration  Rights  Agreement,  and delivered the same to the
             Buyer(s).

                         (b) The Common Stock shall be authorized  for quotation
             on  The  National  Association  of  Securities  Dealers,  Inc.  OTC
             Bulletin  Board,  trading in the Common  Stock  shall not have been
             suspended for any reason and all of the Conversion  Shares issuable
             upon conversion of the Convertible Debentures shall be approved for
             listing or  quotation  on The National  Association  of  Securities
             Dealers, Inc. OTC Bulletin Board.

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

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

                        (f) As of the  Closing  Date,  the  Company  shall  have
            reserved out of its authorized and unissued Common Stock, solely for
            the  purpose  of  effecting  the   conversion  of  the   Convertible
            Debentures , shares of Common Stock to effect the  conversion of all
            of the  Conversion  then  outstanding  and the  Company  shall  have
            deposited with Butler  Gonzalez LLP 1,487,500 free trading shares of
            the  Company's  Common  Stock in order to honor  conversions  in the


                                       16
<PAGE>

            event that the  Company's  registration  statement  registering  for
            resale the shares of Common Stock  issuable  upon  conversion of the
            Debentures has not been filed or declared effective by the SEC.

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

             8.          INDEMNIFICATION.

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

                         (b) In  consideration  of the  Company's  execution and
            delivery  of this  Agreement,  and in addition to all of the Buyer's
            other  obligations  under this  Agreement,  the Buyer shall  defend,
            protect,  indemnify  and hold  harmless  the Company and all of it's
            officers,  directors,   employees  and  agents  (including,  without
            limitation,  those  retained  in  connection  with the  transactions
            contemplated   by  this   Agreement)   (collectively,   the  Company


                                       17
<PAGE>

            Indemnitees")  from and against any and all Indemnified  Liabilities
            incurred  by the  Indemnitees  or any of them  as a  result  of,  or
            arising out of, or relating to (a) any  misrepresentation  or breach
            of any  representation  or  warranty  made by the  Buyer(s)  in this
            Agreement,  , instrument or document  contemplated hereby or thereby
            executed by the Buyer, (b) any breach of any covenant,  agreement or
            obligation of the Buyer(s) contained in this Agreement, the Investor
            Registration  Rights Agreement or any other certificate,  instrument
            or document contemplated hereby or thereby executed by the Buyer, or
            (c) any cause of action,  suit or claim brought or made against such
            Company Indemnitee based on material  misrepresentations or due to a
            material  breach and arising out of or resulting from the execution,
            delivery, performance or enforcement of this Agreement, the Investor
            Registration  Rights Agreement or any other instrument,  document or
            agreement   executed   pursuant   hereto  by  any  of  the   Company
            Indemnities.  To the extent that the foregoing  undertaking  by each
            Buyer may be unenforceable for any reason, each Buyer shall make the
            maximum  contribution to the payment and satisfaction of each of the
            Indemnified Liabilities, which is permissible under applicable law.

            9.           GOVERNING LAW: MISCELLANEOUS.

                         (a) GOVERNING LAW. This Agreement  shall be governed by
             and  interpreted  in  accordance  with the laws of the State of New
             York  without  regard to the  principles  of conflict of laws.  The
             parties  further agree that any action  between them shall be heard
             in  New  York  City,  New  York,  and  expressly   consent  to  the
             jurisdiction  and  venue of the  Supreme  Court of New York and the
             United States District Court for the Southern  District of New York
             for the adjudication of any civil action asserted  pursuant to this
             Paragraph.

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

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

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



                                       18
<PAGE>

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

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

           If to the Company, to:           Rubber Technology International Inc.
                                            3185 E. Washington Blvd.
                                            Los Angeles, CA 90023
                                            Attention:  Fred Schmidt
                                            Chief Financial Officer
                                            Telephone:  (323) 268-6842
                                            Facsimile:  (323) 268-7328

                  With a copy to:         Kirkpatrick & Lockhart LLP
                                          201 South Biscayne Blvd. - Suite 2000
                                          Miami, Fl 33131
                                          Attention:  Clayton E. Parker, Esq.
                                          Telephone:  (305) 539-3300
                                          Facsimile:  (305) 358-7095

         If to the Transfer Agent, to:    Securities Transfer Corporation
                                          P.O. Box 701629
                                          Dallas, TX 75370
                                          Attention:

                  If to the Investor:     At the address listed on Schedule A.


                                       19
<PAGE>



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

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

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

                         (i) SURVIVAL. Unless this Agreement is terminated under
             Section 9(l), the representations and warranties of the Company and
             the  Buyers  contained  in  Sections  2 and 3, the  agreements  and
             covenants set forth in Sections 4, 5 and 9, and the indemnification
             provisions  set forth in Section 8, shall survive the Closing for a
             period of one (1) year following the date on which the  Convertible
             Debentures are converted in full. The Buyer(s) shall be responsible
             only  for  its  own  representations,  warranties,  agreements  and
             covenants hereunder.

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

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

                         (1)  TERMINATION.  In the event that the Closing  shall
             not have  occurred with respect to the Buyers on or before five (5)
             business  days from the date  hereof  due to the  Company's  or the
             Buyer's  failure to satisfy the  conditions set forth in Sections 6
             and 7 above (and the  non-breaching  party's  failure to waive such
             unsatisfied  condition(s)),  the non-breaching party shall have the
             option to terminate  this  Agreement with respect to such breaching
             party at the close of business on such date  without  liability  of


                                       20
<PAGE>

             any  party to any  other  party;  provided,  however,  that if this
             Agreement is terminated  pursuant to this Section 9(l), the Company
             shall remain  obligated to reimburse  the Buyer(s) for the expenses
             described in Section 4(g) above.

                         (m)  FINDER.  The  Company  acknowledges  that  it  has
             engaged  The May  Davis  Group,  Inc.,  as the  placement  agent in
             connection with the sale of the Convertible Debentures. The Company
             shall be  responsible  for the payment of any placement  agent fees
             (which   includes   cash)   relating  to  or  arising  out  of  the
             transactions contemplated hereby and from the proceeds thereof.

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


                    [REMAINDER PAGE INTENTIONALLY LEFT BLANK]
























                                       21
<PAGE>


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


                               RUBBER TECHNOLOGY INTERNATIONAL
                               INC.


                               By:  /s/ Fred Schmidt
                                   ---------------------------------------------
                                   Name:  Fred Schmidt
                                   Title: Chief Financial Officer



                               By:
                                   ---------------------------------------------
                                   Name:
                                           -------------------------------------
                                   Title:
                                           -------------------------------------

















                                       22
<PAGE>




                                                                       EXHIBIT A



                      FORM OF REGISTRATION RIGHTS AGREEMENT


<PAGE>


                                                                       EXHIBIT B




                            FORM OF ESCROW AGREEMENT


<PAGE>


                                                                       EXHIBIT C



                                 FORM OF WARRANT




<PAGE>



                                                                       EXHIBIT D




                           TRANSFER AGENT INSTRUCTIONS


<PAGE>


<TABLE>
<CAPTION>
                                   SCHEDULE I
                               SCHEDULE OF BUYERS


--------------------------- ------------------------------------------------------- ----------------------------- ------------------
                                                                                       AMOUNT OF SUBSCRIPTION
        NAME                           ADDRESS/FACSIMILE NUMBER OF BUYER
--------------------------- ------------------------------------------------------- ----------------------------- ------------------
<S>                         <C>                                                     <C>                           <C>


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



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



--------------------------- ------------------------------------------------------- ----------------------------- ------------------
</TABLE>