Exhibit 4.1                Securities Purchase Agreement

                          SECURITIES PURCHASE AGREEMENT


     THIS SECURITIES PURCHASE AGREEMENT,  dated as of the date of acceptance set
forth below,  is entered into by and between  STOCKGROUP.COM  HOLDINGS,  INC., a
Colorado  corporation,  with headquarters  located at Suite 500, 750 West Pender
Street, Vancouver,  British Columbia,  Canada V6C 2T7 (the "Company"),  and each
entity named on a signature page hereto (each, a "Lender")  (each agreement with
a Lender being deemed a separate and independent  agreement  between the Company
and such Lender, except that each Lender acknowledges and consents to the rights
granted  to  each  other  Lender  under  such  agreement  and  the   Transaction
Agreements, as defined below, referred to therein).

                              W I T N E S S E T H:

     WHEREAS,  the  Company and the Lender are  executing  and  delivering  this
Agreement in accordance  with and in reliance upon the exemption from securities
registration  afforded,  inter alia, by Rule 506 under Regulation D ("Regulation
D") as promulgated by the United States Securities and Exchange  Commission (the
"SEC") under the  Securities  Act of 1933,  as amended (the "1933 Act"),  and/or
Section 4(2) of the 1933 Act; and

     WHEREAS,  the Lender  wishes to lend funds to the  Company,  subject to and
upon the terms and conditions of this Agreement , the repayment of which will be
represented  by 3%  Convertible  Debentures  Series  00-1  of the  Company  (the
"Convertible Debentures"), which Convertible Debentures will be convertible into
shares of Common  Stock,  no par value per share,  of the Company  (the  "Common
Stock"),  upon the terms  and  subject  to the  conditions  of such  Debentures,
together with the Warrants (as defined  below)  exercisable  for the purchase of
shares of Common  Stock,  and subject to  acceptance  of this  Agreement  by the
Company;

     NOW THEREFORE,  in  consideration  of the premises and the mutual covenants
contained  herein and other good and  valuable  consideration,  the  receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

     1. AGREEMENT TO PURCHASE; PURCHASE PRICE.

     a. Purchase; Certain Definitions.

     (i) Subject to the terms and  conditions  of this  Agreement  and the other
Transaction Agreements, the undersigned hereby agrees to loan to the Company the
principal amount set forth on the Lender's signature page of this Agreement (the
"Purchase  Price"),  out of the aggregate  amount being loaned by all Lenders of
$500,000.  The  obligation to repay the loan shall be evidenced by the Company's
issuance of one or more  Convertible  Debentures to the Lender in such principal
amount (the Convertible Debentures issued to the Lender, the "Debentures"). Each
Debenture  shall have the terms and conditions of, and be  substantially  in the
form  attached  hereto  as,  Annex I. The loan to be made by the  Lender and the
issuance of the
<PAGE>

Debentures  to the  Lender  are  sometimes  referred  to herein and in the other
Transaction Agreements as the purchase and sale of the Debentures.

     (ii) The  purchase  price to be paid by the Lender (the  "Purchase  Price")
shall be equal to the face  amount  of the  Debentures  being  purchased  on the
Closing Date and shall be payable in United States Dollars.

     b. Certain Definitions. As used herein, each of the following terms has the
meaning set forth below, unless the context otherwise requires:

     (i) "Affiliate" means, with respect to a specific Person referred to in the
relevant provision,  another Person who or which controls or is controlled by or
is under common control with such specified Person.

     (ii) "Cap Amount"  means,  if the Cap  Regulations  are  applicable  to the
Company's issuance of shares in connection with the transactions contemplated by
the Transaction  Agreements,  the number of shares equal to 19.99% of the number
of  outstanding  shares of Common  Stock on the date  hereof (the number of such
outstanding shares is specified in Section 3(c) hereof).

     (iii) "Cap  Regulations"  means the  maximum  number of shares  that may be
issued in compliance with the applicable  rules and regulations of its Principal
Trading  Market,   including,  but  not  necessarily  limited  to,  Nasdaq  Rule
4310(c)(25)(H)(i)  or Rule 4460(i)(1),  as may be applicable,  which would limit
the issuance of Common Stock on  conversion  of the all the  Debentures  in this
series to the Cap Amount.

     (iv)  "Certificates"  means  the  Debentures  and the  Warrants,  each duly
executed  by the  Company  and  issued  on the  Closing  Date in the name of the
Lender.

     (v)  "Closing  Date" means the date of the closing of the purchase and sale
of the Debentures, as provided herein.

     (vi)  "Conversion  Shares"  means the shares of Common Stock  issuable upon
conversion of the Debentures  (including,  if relevant,  accrued interest on the
Debentures so converted).

     (vii)  "Effective  Date"  means  the  effective  date  of the  Registration
Statement covering the Registrable Securities (as those terms are defined in the
Registration Rights Agreement) relating to the Securities.

     (viii) "Escrow Agent" means the escrow agent identified in the Joint Escrow
Instructions attached hereto as Annex II (the "Joint Escrow Instructions").

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     (ix) "Escrow Funds" means the Purchase Price  delivered to the Escrow Agent
as contemplated 12/10/00 by Sections 1(c) and (d) hereof.

     (x) "Escrow Property" means the Escrow Funds and the Certificates delivered
to the Escrow Agent as contemplated by Section 1(c) hereof.

     (xi) "Holder" means the Person holding the relevant Securities.

     (xii) "Last Audited Date" means December 31, 1999.

     (xiii)  "Lender's  Allocable  Share"  means  the  fraction,  of  which  the
numerator is the Purchase Price of the Lender's  Debentures and the  denominator
is $500,000.

     (xiv)  "Person"  means any living  person or any  entity,  such as, but not
necessarily limited to, a corporation, partnership or trust.

     (xv) "Principal Trading Market" means The NASD/OTC Bulletin Board Market.

     (xvi)  "Registration   Rights  Agreement"  means  the  Registration  Rights
Agreement in the form annexed  hereto as Annex IV, as executed by the Lender and
the Company simultaneously with the execution of this Agreement.

     (xvii)  "Reporting  Service"  means  Bloomberg LP or if that service is not
then reporting the relevant information regarding the Common Stock, a comparable
reporting  service  of  national  reputation  selected  by  the  Holders  of the
Debentures and reasonably acceptable to the Company.

     (xviii)  "Securities"  means the Debentures,  the Warrants,  the Conversion
Shares and the Warrant Shares (as defined below).

     (xix) "Shares" means the shares of Common Stock  representing any or all of
the Conversion Shares and the Warrant Shares.

     (xx) "Transaction  Agreements" means the Securities Purchase Agreement, the
Debentures,  the Joint Escrow  Instructions,  the Registration Rights Agreement,
and the  Warrants  and includes  all  ancillary  documents  referred to in those
agreements.

     (xxi) "Warrants"  means the Basic Warrants and the Additional  Warrants (as
those terms are defined below).

     (xxii)  "Warrant  Shares"  means the shares of Common Stock  issuable  upon
exercise of the Warrants.

     c. Form of Payment; Delivery of Certificates.

<PAGE>

     (i) The  Lender  shall  pay  the  Purchase  Price  for  the  Debentures  by
delivering  immediately  available  good funds in United  States  Dollars to the
Escrow Agent no later than the date prior to the Closing Date.

     (ii) No later than the Closing Date,  but in any event  promptly  following
payment by the Lender to the Escrow  Agent of the  Purchase  Price,  the Company
shall deliver the Certificates,  each duly executed on behalf of the Company and
issued in the name of the Lender, to the Escrow Agent.

     (iii) By  signing  this  Agreement,  each of the  Lender  and the  Company,
subject  to  acceptance  by the  Escrow  Agent,  agrees  to all of the terms and
conditions of, and becomes a party to, the Joint Escrow Instructions, all of the
provisions of which are incorporated herein by this reference as if set forth in
full.

     d. Method of Payment.  Payment into escrow of the  Purchase  Price shall be
made by wire transfer of funds to:

        Bank of New York
        350 Fifth Avenue
        New York, New York 10001

        ABA# 021000018
        For credit to the account of Krieger & Prager LLP
        Account No.: [To be provided to the Lender by Krieger & Prager LLP]
        Re:   Stockgroup.com Transaction

Not later than 3:00 p.m.,  New York time,  on the date which is two (2) New York
Stock Exchange ("NYSE") trading days after both the Lender and the Company shall
have accepted this  Agreement  and each  returned a signed  counterpart  of this
Agreement to the Escrow Agent by  facsimile,  the Lender shall  deposit with the
Escrow Agent the Purchase Price in immediately  available funds.  Time is of the
essence  with  respect to such  payment,  and failure by the Lender to make such
payment, shall allow the Company to cancel this Agreement.

     2.  LENDER  REPRESENTATIONS,   WARRANTIES,  ETC.;  ACCESS  TO  INFORMATION;
INDEPENDENT INVESTIGATION.

     The Lender  represents  and warrants to, and covenants and agrees with, the
Company as follows:

     a. Without limiting  Lender's right to sell the Securities  pursuant to the
Registration  Statement or otherwise in compliance with the 1933 Act, the Lender
is  purchasing  the  Debentures  and will be  acquiring  the  Shares for its own
account  for  investment  only and not with a view  towards  the public  sale or
distribution  thereof and not with a view to or for sale in connection  with any
distribution thereof.

     b. The Lender is (i) an  "accredited  investor"  as that term is defined in
Rule 501 of the General  Rules and  Regulations  under the 1933 Act by reason of
Rule 501(a)(3),  (ii) experienced in making investments of the kind described in
this Agreement and the related documents,  (iii) able, by reason of the business
and  financial  experience  of its  officers  (if an  entity)  and  professional
advisors (who are not  affiliated  with or compensated in any way by the
<PAGE>


Company  or any of its  Affiliates  or  selling  agents),  to  protect  its  own
interests in connection with the transactions  described in this Agreement,  and
the related documents, and (iv) able to afford the entire loss of its investment
in the Securities.

     c. All subsequent offers and sales of the Securities by the Lender shall be
made pursuant to registration of the Shares under the 1933 Act or pursuant to an
exemption from registration.

     d. The Lender understands that the Securities are being offered and sold to
it in reliance on specific exemptions from the registration  requirements of the
1933 Act and state  securities  laws and that the  Company is  relying  upon the
truth and accuracy of, and the Lender's  compliance  with, the  representations,
warranties,  agreements,  acknowledgments  and  understandings of the Lender set
forth herein in order to determine the  availability  of such exemptions and the
eligibility of the Lender to acquire the Securities.

     e. The  Lender  and its  advisors,  if any,  have been  furnished  with all
materials  relating to the business,  finances and operations of the Company and
materials  relating to the offer and sale of the Debentures and the offer of the
Shares  which have been  requested by the Lender,  including  those set forth on
Annex V hereto.  The Lender and its  advisors,  if any,  have been  afforded the
opportunity  to ask  questions  of the Company and have  received  complete  and
satisfactory  answers to any such inquiries.  Without limiting the generality of
the foregoing,  the Lender has also had the  opportunity to obtain and to review
the Company's (1) Annual  Report,  as amended,  on Form 10-K for the fiscal year
ended  December  31,  1999,  (2)  Quarterly  Reports on Form 10-Q for the fiscal
quarters ended March 31, 2000, June 30, 2000 and September 30, 2000; (3) Current
Reports on Form 8-K filed February 15, 2000 and April 18, 2000, (4) Registration
Statement  on Form SB-2,  as filed on My 26,  2000 and amended on August 1, 2000
and (5) Definitive Proxy Statement filed on October 16, 2000 (collectively,  the
"Company's SEC Documents").

     f. The Lender understands that its investment in the Securities  involves a
high degree of risk.

     g. The Lender  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 Securities.

     h. This Agreement and the other Transaction  Agreements to which the Lender
is a party,  and the  transactions  contemplated  thereby,  have  been  duly and
validly authorized, executed and delivered on behalf of the Lender and are valid
and  binding  agreements  of the Lender  enforceable  in  accordance  with their
respective terms,  subject as to enforceability to general  principles of equity
and to bankruptcy,  insolvency,  moratorium and other similar laws affecting the
enforcement of creditors' rights generally.

     3. COMPANY REPRESENTATIONS, ETC. The Company represents and warrants to the
Lender  as of the  date  hereof  and as of the  Closing  Date  that,  except  as
otherwise provided in the Annex IV hereto or in the Company's SEC Documents:

     a. Rights of Others  Affecting  the  Transactions.  There are no preemptive
rights of any  shareholder of the Company,  as such, to acquire the  Debentures,
the  Warrants  or the  Shares.  No party  other  than a Lender  has a  currently
exercisable  right of first  refusal  which

<PAGE>

would  be  applicable  to any or all  of the  transactions  contemplated  by the
Transaction Agreements.

     b. Status.  The Company is a corporation  duly organized,  validly existing
and in good  standing  under  the  laws of the  State  of  Colorado  and has the
requisite  corporate power to own its properties and to carry on its business as
now being conducted.  The Company 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 or
results of operations of the Company and its subsidiaries  taken as a whole. The
Company has  registered  its stock and is obligated to file reports  pursuant to
Section 12 or Section  15(d) of the  Securities  and  Exchange  Act of 1934,  as
amended (the "1934 Act"). The Common Stock is quoted and traded on the Principal
Trading Market. The Company has received no notice, either oral or written, with
respect to the continued  eligibility  of the Common Stock for such quotation on
the Principal Trading Market, and the Company has maintained all requirements on
its part for the continuation of such quotation.

     c. Authorized  Shares. The authorized capital stock of the Company consists
of (i)  50,000,000  shares of Common  Stock,  no par value per  share,  of which
8,479,676 shares are outstanding as of the date hereof and (ii) 5,000,000 shares
of Preferred Stock,  non-voting,  no par value, of which none are outstanding as
of the date hereof . All issued and outstanding shares of Common Stock have been
duly  authorized and validly issued and are fully paid and  non-assessable.  The
Company has sufficient  authorized and unissued shares of Common Stock as may be
necessary  to effect the  issuance  of the  Shares.  The  Shares  have been duly
authorized  and,  when  issued  upon  conversion  of,  or as  interest  on,  the
Debentures  or upon  exercise  of the  Warrants,  each in  accordance  with  its
respective terms, will be duly and validly issued, fully paid and non-assessable
and will not subject the Holder thereof to personal liability by reason of being
such Holder.

     d. Transaction  Agreements and Stock.  This Agreement and each of the other
Transaction  Agreements,  and the transactions  contemplated  thereby, have been
duly and  validly  authorized  by the  Company,  this  Agreement  has been  duly
executed and delivered by the Company and this Agreement is, and the Debentures,
the Warrants and each of the other  Transaction  Agreements,  when  executed and
delivered by the Company,  will be, valid and binding  agreements of the Company
enforceable  in  accordance  with  their   respective   terms,   subject  as  to
enforceability  to general  principles of equity and to bankruptcy,  insolvency,
moratorium,  and other  similar laws  affecting  the  enforcement  of creditors'
rights generally.

     e. Non-contravention. The execution and delivery of this Agreement and each
of  the  other  Transaction  Agreements  by the  Company,  the  issuance  of the
Securities,  and the  consummation  by the  Company  of the  other  transactions
contemplated  by this  Agreement,  the  Debentures,  the  Warrants and the other
Transaction  Agreements  do not and will not conflict with or result in a breach
by the Company of any of the terms or  provisions  of, or  constitute  a default
under (i) the certificate of  incorporation  or by-laws of the Company,  each as
currently  in effect,  (ii) any  indenture,  mortgage,  deed of trust,  or other
material  agreement or instrument to which the Company is a party or by which it
or any of its  properties or assets are bound,  including any listing  agreement
for the Common Stock except as herein set forth, or (iii) to its knowledge,  any
existing applicable law, rule, or regulation or any applicable decree, judgment,
or  order  of any  court,  United  States  federal  or  state  regulatory  body,
administrative  agency, or

<PAGE>

other  governmental  body  having  jurisdiction  over the  Company or any of its
properties or assets,  except such  conflict,  breach or default which would not
have a material adverse effect on the business, operations,  financial condition
or results of operations of the Company and its  subsidiaries  taken as a whole,
or on the transactions contemplated herein.

     f.  Approvals.  No  authorization,   approval  or  consent  of  any  court,
governmental body,  regulatory agency,  self-regulatory  organization,  or stock
exchange or market or the shareholders of the Company is required to be obtained
by the  Company for the  issuance  and sale of the  Securities  to the Lender as
contemplated  by this  Agreement,  except  such  authorizations,  approvals  and
consents that have been obtained.

     g. Filings. None of the Company's SEC Documents contained, at the time they
were  filed,  any untrue  statement  of a material  fact or omitted to state any
material fact required to be stated  therein or necessary to make the statements
made  therein in light of the  circumstances  under  which  they were made,  not
misleading.  Since  December 1, 1999, the Company has timely filed all requisite
forms, reports and exhibits thereto required to be filed by the Company with the
SEC.

     h. Absence of Certain Changes.  Since the Last Audited Date, there has been
no material  adverse  change and no  material  adverse  effect on the  business,
operations,  financial condition or results of operations of the Company and its
subsidiaries  taken  as a  whole,  except  as  disclosed  in the  Company's  SEC
Documents.  Since the Last Audited Date, except as provided in the Company's SEC
Documents,  the Company has not (i)  incurred or become  subject to any material
liabilities (absolute or contingent) except liabilities incurred in the ordinary
course of business consistent with past practices;  (ii) discharged or satisfied
any material lien or  encumbrance  or paid any material  obligation or liability
(absolute or contingent),  other than current  liabilities  paid in the ordinary
course of business  consistent with past  practices;  (iii) declared or made any
payment or distribution  of cash or other property to shareholders  with respect
to its capital  stock,  or  purchased  or redeemed,  or made any  agreements  to
purchase or redeem,  any shares of its  capital  stock;  (iv) sold,  assigned or
transferred any other tangible assets,  or canceled any debts or claims,  except
in the ordinary course of business consistent with past practices;  (v) suffered
any substantial losses or waived any rights of material value, whether or not in
the ordinary course of business,  or suffered the loss of any material amount of
existing business; (vi) made any changes in employee compensation, except in the
ordinary course of business consistent with past practices; or (vii) experienced
any material  problems with labor or management in connection with the terms and
conditions of their employment.

     i. Full  Disclosure.  There is no fact  known to the  Company  (other  than
general economic conditions known to the public generally or as disclosed in the
Company's SEC  Documents)  that has not been  disclosed in writing to the Lender
that (i) would  reasonably be expected to have a material  adverse effect on the
business,  operations,  financial  condition  or  results of  operations  of the
Company and its subsidiaries taken as a whole, (ii) would reasonably be expected
to  materially  and  adversely  affect the ability of the Company to perform its
obligations  pursuant  to any of the  Transaction  Agreements,  or  (iii)  would
reasonably  be  expected to  materially  and  adversely  affect the value of the
rights granted to the Lender in the Transaction Agreements.

     j. Absence of Litigation. There is no action, suit, proceeding,  inquiry or
investigation  before or by any court,  public  board or body pending or, to the
knowledge of the Company,  threatened against or affecting the Company,  wherein
an unfavorable decision, ruling

<PAGE>

or finding would have a material  adverse  effect on the  business,  operations,
financial condition or results of operations of the Company and its subsidiaries
taken  as a whole or the  transactions  contemplated  by any of the  Transaction
Agreements or which would adversely affect the validity or enforceability of, or
the authority or ability of the Company to perform its obligations under, any of
the Transaction Agreements.

     k.  Absence  of Events of  Default.  Except  as set forth in  Section  3(e)
hereof,  no Event  of  Default  (or its  equivalent  term),  as  defined  in the
respective  agreement to which the Company is a party, and no event which,  with
the giving of notice or the  passage of time or both,  would  become an Event of
Default (or its equivalent term) (as so defined in such agreement), has occurred
and is continuing,  which would have a material  adverse effect on the business,
operations,  financial condition or results of operations of the Company and its
subsidiaries taken as a whole.

     l. Prior Issues.  During the twelve (12) months  preceding the date hereof,
the Company has not issued any stock option  grants,  convertible  securities or
any shares of its Common Stock.

     m. No Undisclosed  Liabilities or Events. The Company has no liabilities or
obligations  other than those  disclosed in the  Transaction  Agreements  or the
Company's  SEC  Documents  or  those  incurred  in the  ordinary  course  of the
Company's  business since the Last Audited Date, or which individually or in the
aggregate,  do not or would not have a material  adverse effect on the business,
operations,  financial condition or results of operations of the Company and its
subsidiaries  taken as a whole. No event or circumstances has occurred or exists
with respect to the Company or its properties,  business, operations,  condition
(financial or otherwise), or results of operations, which, 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.
There are no proposals currently under consideration or currently anticipated to
be under  consideration  by the Board of Directors or the executive  officers of
the Company which proposal would (x) change the certificate of  incorporation or
other charter  document or by-laws of the Company,  each as currently in effect,
with or without  shareholder  approval,  which  change would reduce or otherwise
adversely  affect the rights and powers of the  shareholders of the Common Stock
or (y) materially or substantially change the business, assets or capital of the
Company, including its interests in subsidiaries.

     n. No  Default.  Neither  the  Company  nor any of its  subsidiaries  is in
default in the performance or observance of any material obligation,  agreement,
covenant or condition  contained in any material  indenture,  mortgage,  deed of
trust or other  material  instrument  or  agreement to which it is a party or by
which it or its property is bound.

     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, at any
time  since  December  1,  1999,  made any  offer or  sales of any  security  or
solicited  any  offers  to buy  any  security  under  circumstances  that  would
eliminate the availability of the exemption from registration under Regulation D
in connection with the offer and sale of the Securities as contemplated hereby.

     p.  Dilution.  The  number  of  Shares  issuable  upon  conversion  of  the
Debentures may increase substantially in certain circumstances,  including,  but
not necessarily  limited to, the  circumstance  wherein the trading price of the
Common Stock declines prior to the conversion of the  Debentures.  The Company's
executive officers and directors have studied and

<PAGE>

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  Debentures and
upon  exercise  of the  Warrants is binding  upon the  Company  and  enforceable
regardless of the dilution such issuance may have on the ownership  interests of
other  shareholders  of the Company,  and the Company will honor every Notice of
Conversion  (as defined in the  Debentures)  relating to the  conversion  of the
Debentures,  and every Notice of Exercise  (as  contemplated  by the  Warrants),
unless the Company is subject to an injunction  (which injunction was not sought
by the Company) prohibiting the Company from doing so.

     r. Fees to Brokers,  Finders and Others. Neither the Company nor the Lender
has taken any  action  which  would  give  rise to any claim by any  person  for
brokerage  commission,  finder's fees or similar payments by the Lender relating
to this Agreement or the transactions  contemplated hereby. Each of the Company,
on  the  one  hand,  and  the  Lender,  on  the  other  (each  of  them,  a "Fee
Indemnitor"),  shall  indemnify and hold harmless the other (and its  employees,
officers,  directors,  agents,  and partners,  and their respective  Affiliates;
each,  including  the  Company  or  the  Lender,  as the  case  may  be,  a "Fee
Indemnitee") from and against all claims, losses,  damages, costs (including the
costs of preparation  and attorney's  fees) and expenses  suffered in respect of
any such claimed or existing fees, as and when  incurred,  by any party claiming
the  payment  from a Fee  Indemnitee  on  account  of an  agreement  made by the
relevant Fee Indemnitor.

     4. CERTAIN COVENANTS AND ACKNOWLEDGMENTS.

     a. Transfer  Restrictions.  The Lender acknowledges that (1) the Securities
have not been and are not being  registered under the provisions of the 1933 Act
and,  except as provided  in the  Registration  Rights  Agreement  or  otherwise
included in an effective registration  statement,,  the Shares have not been and
are not being registered  under the 1933 Act, and may not be transferred  unless
(A) subsequently registered thereunder or (B) the Lender shall have delivered to
the Company an opinion of counsel,  reasonably  satisfactory in form,  scope and
substance  to the  Company,  to the  effect  that the  Securities  to be sold or
transferred  may be sold or  transferred  pursuant  to an  exemption  from  such
registration;  (2) any  sale of the  Securities  made in  reliance  on Rule  144
promulgated  under the 1933 Act may be made only in accordance with the terms of
said  Rule and  further,  if said  Rule 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 used in
the 1933 Act, may require  compliance  with some other  exemption under the 1933
Act or the rules and  regulations  of the SEC  thereunder;  and (3)  neither the
Company nor any other Person is under any  obligation to register the Securities
(other than pursuant to the Registration Rights Agreement) under the 1933 Act or
to comply with the terms and conditions of any exemption thereunder.

     b.  Restrictive  Legend.  The  Lender  acknowledges  and  agrees  that  the
Securities  and, until such time as the Common Stock has been  registered  under
the 1933 Act as contemplated by the  Registration  Rights  Agreement and sold in
accordance with an effective  Registration  Statement or otherwise in accordance
with  another   effective   registration   statement,   certificates  and  other
instruments  representing any of the Securities shall bear a restrictive  legend
in  substantially  the following form (and a  stop-transfer  order may be placed
against transfer of any such Securities):

<PAGE>

     THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
     AS  AMENDED,  OR THE  SECURITIES  LAWS OF ANY  STATE AND MAY NOT BE SOLD OR
     OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE  REGISTRATION STATEMENT FOR
     THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE
     COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

     c. Filings. The Company undertakes and agrees to make all necessary filings
in  connection  with the sale of the  Securities  to the Lender under any United
States  laws and  regulations  applicable  to the  Company,  or by any  domestic
securities  exchange  or trading  market,  and to provide a copy  thereof to the
Lender promptly after such filing.

     d. Reporting  Status.  So long as the Lender  beneficially  owns any of the
Securities, the Company shall file all reports required to be filed with the SEC
pursuant  to  Section  13 or 15(d) of the 1934 Act,  shall  take all  reasonable
action under its control to ensure that adequate current public information with
respect to the Company,  as required in  accordance  with Rule  144(c)(2) of the
1933 Act, is publicly available, and shall not terminate its status as an issuer
required  to file  reports  under the 1934 Act even if the 1934 Act or the rules
and regulations thereunder would permit such termination.  The Company will take
all reasonable action under its control to maintain the continued  quotation and
trading of its Common Stock  (including,  without  limitation,  all  Registrable
Securities)  on the  Principal  Trading  Market and will comply in all  material
respects with the Company's  reporting,  filing and other  obligations under the
by-laws  or  rules of the  National  Association  of  Securities  Dealers,  Inc.
applicable to it.

     e. Use of Proceeds.  The Company will use the proceeds from the sale of the
Debentures  (excluding  amounts paid by the Company for legal and escrow fees in
connection  with  the  sale of the  Securities)  for  internal  working  capital
purposes,  and, unless specifically  consented to in advance in each instance by
the Lender, the Company shall not, directly or indirectly, use such proceeds for
any loan to or investment in any other  corporation,  partnership  enterprise or
other Person or for the repayment of any outstanding  loan by the Company to any
other party.

     f. Warrants.  The Company agrees to issue to the Lender on the Closing Date
(i) transferable warrants (the "Basic Warrants") for the purchase of a number of
shares  equal  to  500,000  multiplied  by the  Lender's  Allocable  Share at an
exercise  price  of  $1.00  per  share  and  (ii)  transferable   warrants  (the
"Additional  Warrants")  for the  purchase of a number of shares of Common Stock
equal to 300,000 multiplied by the Lender's Allocable Share at an exercise price
of $2.00 per share.  The  Warrants  will expire on the last day of the  calendar
month in which the fourth  anniversary  of the Closing Date occurs.  Each of the
Warrants  shall be in the form  annexed  hereto as Annex VI,  and shall have (x)
registration  rights as provided in the  Registration  Rights  Agreement and (y)
piggy-back  registration  rights  after the  effectiveness  of the  Registration
Statement expires, as contemplated by the Registration Rights Agreement.

     g. Certain Agreements.

     (i)  Except to the extent  specifically  provided  below,  but in each such
event subject to compliance with all of the other  provisions of this Agreement,
the Company  covenants  and agrees that it will not,  without the prior  written
consent of the Lender,  enter into any  subsequent  or further  offer or sale of
Common Stock or securities  convertible  into Common Stock

<PAGE>


(collectively,  "New  Common  Stock") to or with any third  party  pursuant to a
transaction  in which the  purchase  price per share or the  exercise  price per
share,  as  applicable,  of New Common  Stock is less than the Fixed  Conversion
Price (as defined in the  Debentures)  on any date which is earlier  than ninety
(90) days after the filing of the Registration Statement.

     (ii) If, at any time after the  expiration  of the period  contemplated  by
Section  4(g)(i)  hereof (or prior  thereto  with the consent of the Lender) and
through and  including  the date which is eight (8) months  after the  Effective
Date, the Company enters into a transaction (a "New  Transaction")  with a third
party on terms  providing  for either  (A) a sale  price  (the "New  Transaction
Price") equal to or computed based on, or a determination  of a conversion price
(howsoever defined or computed) based on, a lower percentage of the then current
market price (howsoever defined or computed) than provided in the Debentures for
determining  the  Conversion  Price  and/or (B) an  exercise  price (an  "Actual
Exercise  Price") for a warrant or other  purchase right lower than the Exercise
Price of the Basic  Warrants,  then (x) the terms of any unissued or unconverted
Debenture  shall be  modified  to  reduce  the  Fixed  Conversion  Price and the
percentage used in computing the Variable  Conversion  Price to be equal to that
provided  in the  New  Transaction  as so  consummated  (all  such  adjustments,
collectively,  the "New  Conversion  Price"),  (y) the  exercise  price for each
unexercised  Warrant as of such date shall be reduced to the lower of the Actual
Exercise Price, if any, or the adjusted Fixed  Conversion  Price, and (z) in the
event that the New Transaction Price is lower then the Minimum Conversion Price,
the Minimum  Conversion Price will be reduced to be equal to the New Transaction
Price.

     (iii) The foregoing provisions of Section 4(g) do not apply to the issuance
of New Common Stock (a) to Deephaven  Private  Placement Trading Ltd. or to Amro
International S.A. in connection with either such party's exercise of conversion
or  other  rights  it  may  have  under  documents   executed  and  transactions
consummated  prior to the date of this  Agreement or (b) pursuant to an Employee
Stock  Option Plan  ("ESOP")  of the  Company,  such ESOP  having been  properly
approved by the shareholders of the Company prior to the date of this Agreement.

     (iv) By the Closing Date,  the Company shall obtain the agreement  (each, a
_Principal_s  Agreement_)  of each of its  Principals  (as defined  below) that,
without the prior written consent of the Lender in each instance, such Principal
will not sell or otherwise  transfer or offer to sell or otherwise  transfer any
shares of Common Stock directly or indirectly held by such Principal  during the
period  commencing  on the date of this  Agreement  and  continuing  through and
including the date which is ninety (90) days after the Effective Date. Each such
Principal_s Agreement shall (w) specify that it is entered into as an inducement
to the Lender_s execution,  delivery and performance of this Agreement, (x) name
the  Lender as a third  party  beneficiary  thereof,  (y)  acknowledge  that the
Company_s  transfer agent will be provided with instructions that transfers by a
Principal require the consent of the Company and the Lender, and (z) contemplate
that, in addition to any other damages or remedies that may be appropriate,  the
Principal_s  Agreement shall be enforceable by injunction  sought by the Company
and the Lender or any one or more of them. A  _Principal_  is a Person who meets
any one or more of the following criteria:  (A) each Person who is a director or
principal officer of the Company or who, directly or indirectly, holds in excess
of five (5%)  percent of the  outstanding  shares of Common Stock of the Company
(each,  a  "Company  Principal"),  (B)  a  spouse  of  a  Company  Principal  (a
_Principal_s  Spouse_) who,  directly or indirectly,  holds any shares of Common
Stock of the Company, (C) a parent,  sibling or child of a Company Principal who
resides in the  household  of a Company  Principal  or of a  Principal_s  Spouse
(each, a  _Principal_s  Relative_)  and who,  directly or indirectly,  holds any
shares of Common Stock,  or (D) any other Person or entity,  including,  without
limitation,  for profit or  non-profit  corporations,  partnerships  and trusts,
whose

<PAGE>

voting rights regarding Common Stock of the Company is subject to the direction,
control or other  influence of any Company  Principal,  Principal_s  Spouse,  or
Principal_s Relative.

     h.  Reimbursement.  If (i) any  Lender,  other  than by reason of its gross
negligence  or willful  misconduct,  becomes  involved  in any  capacity  in any
action,  proceeding or investigation  brought by any stockholder of the Company,
in  connection  with or as a  result  of the  consummation  of the  transactions
contemplated  by the Transaction  Agreements,  or if such Lender is impleaded in
any such action,  proceeding or investigation by any Person, or (ii) any Lender,
other than by reason of its gross negligence or willful  misconduct or by reason
of its trading of the Common Stock in a manner that is illegal under the federal
securities laws,  becomes involved in any capacity in any action,  proceeding or
investigation  brought  by the  SEC  against  or  involving  the  Company  or in
connection  with  or  as a  result  of  the  consummation  of  the  transactions
contemplated  by the Transaction  Agreements,  or if such Lender is impleaded in
any such action,  proceeding or  investigation  by any Person,  then in any such
case, the Company will reimburse such Lender for its reasonable  legal and other
expenses  (including the cost of any investigation and preparation)  incurred in
connection  therewith,  as such expenses are incurred.  In addition,  other than
with  respect to any matter in which such Lender is a named  party,  the Company
will pay such Lender the charges,  as reasonably  determined by such Lender, for
the time of any officers or employees  of such Lender  devoted to appearing  and
preparing to appear as witnesses,  assisting in preparation for hearings, trials
or pretrial matters,  or otherwise with respect to inquiries,  hearing,  trials,
and other  proceedings  relating to the subject  matter of this  Agreement.  The
reimbursement  obligations  of the  Company  under  this  paragraph  shall be in
addition to any  liability  which the Company may otherwise  have,  shall extend
upon the same  terms and  conditions  to any  Affiliates  of the  Lender who are
actually  named in such  action,  proceeding  or  investigation,  and  partners,
directors,  agents,  employees and controlling persons (if any), as the case may
be, of the Lender and any such Affiliate, and shall be binding upon and inure to
the benefit of any successors,  assigns,  heirs and personal  representatives of
the Company,  the Lender and any such Affiliate and any such Person. The Company
also agrees that neither any Lender nor any such Affiliate, partners, directors,
agents, employees or controlling persons shall have any liability to the Company
or any  person  asserting  claims  on behalf  of or in right of the  Company  in
connection with or as a result of the consummation of the Transaction Agreements
except to the extent that any losses, claims,  damages,  liabilities or expenses
incurred by the Company result from the gross  negligence or willful  misconduct
of such Lender.

     h.  Available  Shares.  The Company shall have at all times  authorized and
reserved for  issuance,  free from  preemptive  rights,  a number of shares (the
"Minimum Available Shares") at least equal to the sum of (x) two hundred percent
(200%) of the number of shares of Common  Stock  issuable  as may be required to
satisfy  the  conversion  rights of the Holders of all  outstanding  Convertible
Debentures (whether  originally issued to the Lender or to other Lenders),  plus
(y) the number of shares issuable upon exercise of all outstanding Warrants held
by all Holders (in each case,  whether such  Convertible  Debentures or Warrants
were originally  issued to the Lender or to any other Lender).  For the purposes
of such  calculations,  the Company should assume that all such  Debentures were
then  convertible and all Warrants were then  exercisable  without regard to any
restrictions  which  might  limit  any  Lender's  right  to  convert  any of the
Convertible Debentures or exercise any of the Warrants held by any Lender.

     i.  Limitation on Issuance of Shares;  Redemption  Amount.  If, at any time
while the Debentures or the Warrants are outstanding,  the Cap Regulations apply
to limit the number of shares of Common Stock which the Company may issue to the
Lenders,  or if the Company  breaches the provisions of Section 4(g) hereof (the
Cap Regulations and such breach,

<PAGE>


collectively  referred to as the "Issuance  Limitations"),  Without limiting the
other  provisions of the Securities  Purchase  Agreement or this Debenture,  the
Company  will take all steps  reasonably  necessary to be in a position to issue
shares of Common Stock on conversion of all the Convertible  Debentures  without
violating the Issuance  Limitations.  If, despite taking such steps, the Company
still can not issue such shares of Common Stock  without  violating the Issuance
Limitations,  , the  Holder of a  Debenture  (to the  extent the same can not be
converted  in  compliance  with  the  Issuance   Limitations,   an  "Unconverted
Debenture"),  shall  have the  option,  exercisable  in such  Holder's  sole and
absolute discretion, to elect either of the following remedies:

          (i) if permitted by the Cap Regulations,  require the Company to issue
     shares  of  Common  Stock  in  accordance  with  such  Holder's  Notice  of
     Conversion  at a  conversion  purchase  price  equal to the  average of the
     closing  price  per  share of  Common  Stock  for any five (5)  consecutive
     trading days (subject to certain  equitable  adjustments for certain events
     occurring   during  such  period)   during  the  sixty  (60)  trading  days
     immediately preceding the date of Notice of Conversion; or

          (y) require the Company to redeem each  Unconverted  Debenture  for an
     amount (the "Redemption Amount"), payable in cash, equal to:

                            V                        x                 M
                           ---
                            CP

     where:

          "V" means the principal of an  Unconverted  Debenture plus any accrued
     but unpaid interest thereon;

          "CP" means the  Conversion  Price in effect on the date of  redemption
     (the  "Redemption  Date")  specified  in the notice  from the Holder of the
     Unconverted Debentures electing this remedy; and

          "M" means the  highest  closing  price per share of the  Common  Stock
     during  the  period  beginning  on the  Redemption  Date and  ending on the
     trading  date  immediately  preceding  date of  payment  of the  Redemption
     Amount.

The notice of exercise of this provision by the Holder shall specify the date on
which the Redemption Amount shall be paid, which date shall be at least five (5)
business days after the Redemption  Date;  provided,  however,  that the Company
shall have the right to accelerate  the date of such  payment.  The Holder of an
Unconverted  Debenture  may elect one of the above  remedies  with  respect to a
portion of such Unconverted Debenture and the other remedy with respect to other
portions of the Unconverted  Debenture.  If the Redemption  Amount is not timely
paid by the Company,  the Redemption  Amount  computed as of such date will bear
interest at the rate of eighteen  percent  (18%) or the highest  rate allowed by
law,  whichever is lower,  from the date it was due until and including the date
actually paid. The Debentures shall contain provisions  substantially consistent
with the above terms, with such additional  provisions as may be consented to by
the Lender. The provisions of this paragraph are not intended to limit the scope
of the provisions otherwise included in the Debentures.

     5. TRANSFER AGENT INSTRUCTIONS.

<PAGE>

     a. The Company  warrants that, with respect to the  Securities,  other than
the stop transfer  instructions  to give effect to Section 4(a) hereof,  it will
give its transfer agent no instructions  inconsistent with instructions to issue
Common Stock from time to time upon conversion of the Debentures in such amounts
as specified from time to time by the Company to the transfer agent, bearing the
restrictive  legend  specified  in  Section  4(b) of  this  Agreement  prior  to
registration  of the Shares  under the 1933 Act,  registered  in the name of the
Lender or its nominee and in such denominations to be specified by the Lender in
connection with each conversion of the  Debentures.  Except as so provided,  the
Shares shall  otherwise be freely  transferable  on the books and records of the
Company as and to the extent provided in this Agreement, the Registration Rights
Agreement,  and applicable law.  Nothing in this Section shall affect in any way
the Lender's obligations and agreement to comply with all applicable  securities
laws upon resale of the  Securities.  If the Lender provides the Company with an
opinion of counsel reasonably satisfactory to the Company that registration of a
resale by the Lender of any of the  Securities in accordance  with clause (1)(B)
of  Section  4(a) of this  Agreement  is not  required  under the 1933 Act,  the
Company  shall  (except  as  provided  in  clause  (2) of  Section  4(a) of this
Agreement)  permit  the  transfer  of the  Securities  and,  in the  case of the
Conversion  Shares,  promptly instruct the Company's transfer agent to issue one
or more  certificates  for Common Stock without  legend in such name and in such
denominations as specified by the Lender.

     b. Subject to the provisions of this Agreement, the Company will permit the
Lender  to  exercise  its  right  to  convert  the   Debentures  in  the  manner
contemplated by the Debentures.

     c. The Company  understands  that a delay in the  issuance of the Shares of
Common  Stock  beyond the  Delivery  Date (as defined in the  Debentures)  could
result in economic loss to the Lender.  As  compensation  to the Lender for such
loss, the Company agrees to pay late payments to the Lender for late issuance of
Shares upon  Conversion in accordance  with the following  schedule  (where "No.
Business  Days Late" is defined as the number of business  days which is two (2)
business days beyond the Delivery Date):

                                         Late Payment For Each $10,000
                                         of Debenture Principal or Interest
      No. Business Days Late             Amount Being Converted
      ---------------------------------------------------------------------

               1                                  $100
               2                                  $200
               3                                  $300
               4                                  $400
               5                                  $500
               6                                  $600
               7                                  $700
               8                                  $800
               9                                  $900
               10                                 $1,000
               >10                                $1,000

               +$200 for each Business Day Late beyond 10 days

<PAGE>

The Company shall pay any payments  incurred  under this Section in  immediately
available  funds upon demand as the Lender's  exclusive  remedy  (other than the
following  provisions of this Section 5(c) and the provisions of the immediately
following  Section  5(d) of this  Agreement)  for such  delay.  Furthermore,  in
addition to any other  remedies  which may be  available  to the Lender,  in the
event that the Company fails for any reason to effect delivery of such shares of
Common  Stock by close of  business  on the  Delivery  Date,  the Lender will be
entitled to revoke the relevant  Notice of  Conversion by delivering a notice to
such effect to the Company,  whereupon  the Company and the Lender shall each be
restored to their  respective  positions  immediately  prior to delivery of such
Notice of Conversion;  provided, however, that any payments contemplated by this
Section 5(c) which have accrued through the date of such revocation notice shall
remain due and owing to the Converting Holder notwithstanding such revocation..

     d. If, by the relevant  Delivery  Date, the Company fails for any reason to
deliver the Shares to be issued upon  conversion  of a Debenture  and after such
Delivery  Date,  the Holder of the  Debentures  being  converted (a  "Converting
Holder")  purchases,  in an arm's-length  open market  transaction or otherwise,
shares of Common  Stock (the  "Covering  Shares")  in order to make  delivery in
satisfaction  of a sale of Common  Stock by the  Converting  Holder  (the  "Sold
Shares"),  which delivery such Converting  Holder  anticipated to make using the
Shares to be issued upon such  conversion (a "Buy-In"),  the  Converting  Holder
shall the right,  to require the  Company to pay to the  Converting  Holder,  in
addition to and not in lieu of the amounts due under Section 5(c) hereof (but in
addition  to  all  other  amounts   contemplated  in  other  provisions  of  the
Transaction  Agreements,  and not in lieu of any such other amounts), the Buy-In
Adjustment  Amount (as defined  below).  The "Buy-In  Adjustment  Amount" is the
amount  equal  to the  excess,  if any,  of (x) the  Converting  Holder's  total
purchase price (including brokerage commissions, if any) for the Covering Shares
over (y) the net proceeds (after brokerage commissions,  if any) received by the
Converting  Holder from the sale of the Sold Shares.  The Company  shall pay the
Buy-In  Adjustment  Amount  to  the  Company  in  immediately   available  funds
immediately upon demand by the Converting Holder. By way of illustration and not
in limitation of the foregoing,  if the Converting  Holder  purchases  shares of
Common Stock having a total purchase price (including brokerage  commissions) of
$11,000 to cover a Buy-In with respect to shares of Common Stock it sold for net
proceeds of $10,000, the Buy-In Adjustment Amount which Company will be required
to pay to the Converting Holder will be $1,000.

     e. In lieu of  delivering  physical  certificates  representing  the Common
Stock  issuable  upon  conversion,  provided  the  Company's  transfer  agent is
participating in the Depository Trust Company ("DTC") Fast Automated  Securities
Transfer  program,  upon  request  of the  Holder  and its  compliance  with the
provisions contained in this paragraph,  so long as the certificates therefor do
not bear a legend  and the  Holder  thereof  is not  obligated  to  return  such
certificate  for the  placement of a legend  thereon,  the Company shall use its
best efforts to cause its transfer agent to  electronically  transmit the Common
Stock  issuable  upon  conversion  to the  Holder by  crediting  the  account of
Holder's Prime Broker with DTC through its Deposit  Withdrawal  Agent Commission
system.

     f.  The  holder  of any  Debentures  shall  be  entitled  to  exercise  its
conversion  privilege  with  respect  to  the  Debentures   notwithstanding  the
commencement of any case under 11 U.S.C.ss.101 et seq. (the "Bankruptcy  Code").
In the event the  Company is a debtor  under the  Bankruptcy  Code,  the Company
hereby waives, to the fullest extent permitted, any rights to relief it may have
under 11  U.S.C.ss.362  in respect of such holder's  conversion  privilege.  The
Company hereby waives, to the fullest extent permitted,  any rights to relief it
may have under 11  U.S.C.ss.362  in respect of the conversion of the Debentures.
The Company agrees, without cost

<PAGE>


or expense to such holder, to take or to consent to any and all action necessary
to effectuate relief under 11 U.S.C.ss.362.

     g. The  Company  will  authorize  its  transfer  agent to give  information
relating to the Company  directly to the Lender or the Lender's  representatives
upon the  request of the Lender or any such  representative,  to the extent such
information  relates  to (i) the  status of shares  of  Common  Stock  issued or
claimed to be issued to the Lender in connection  with a Notice of Conversion or
exercise of a Warrant,  or (ii) the number of outstanding shares of Common Stock
of all  shareholders  as of a current or other  specified date. The Company will
provide the Lender  with a copy of the  authorization  so given to the  transfer
agent.

     6. CLOSING DATE.

     a. The Closing Date shall occur on the first practicable trading day (other
than a bank  holiday) for the release of the Escrow  Property  after each of the
conditions  contemplated  by  Sections  7 and 8 hereof  shall have  either  been
satisfied or been waived by the party in whose favor such conditions run.

     b. The closing of the purchase and  issuance of  Debentures  shall occur on
the  Closing  Date at the  offices of the  Escrow  Agent and shall take place no
later  than 3:00  P.M.,  New York  time,  on such day or such  other  time as is
mutually agreed upon by the Company and the Lender.

     c.  Notwithstanding  anything to the contrary  contained herein, the Escrow
Agent will be authorized to release the Escrow Property on the Closing Date upon
satisfaction  of the  conditions  set forth in  Sections  7 and 8 hereof  and as
provided in the Joint Escrow Instructions.

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

     The Lender understands that the Company's obligation to sell the Debentures
to the Lender  pursuant to this  Agreement  on the Closing  Date is  conditioned
upon:

     a. The execution and delivery of this Agreement and the Registration Rights
Agreement by the Lender;

     b.  Delivery by the Lender to the Escrow  Agent of good funds as payment in
full of an amount equal to the Purchase  Price for the  Securities in accordance
with this Agreement;

     c. The accuracy on the Closing Date of the  representations  and warranties
of the Lender contained in this Agreement, each as if made on such date, and the
performance by the Lender on or before such date of all covenants and agreements
of the Lender required to be performed on or before such date; and

     d. There shall not be in effect any law, rule or regulation  prohibiting or
restricting the transactions  contemplated  hereby,  or requiring any consent or
approval which shall not have been obtained.

<PAGE>


     8. CONDITIONS TO THE LENDER'S OBLIGATION TO PURCHASE.

     The Company  understands  that the  Lender's  obligation  to  purchase  the
Debentures on the Closing Date is conditioned upon:

     a. The execution and delivery of this  Agreement and the other  Transaction
Agreements by the Company;

     b.  Delivery  by the  Company to the Escrow  Agent of the  Certificates  in
accordance with this Agreement;

     c.  The  accuracy  in all  material  respects  on the  Closing  Date of the
representations and warranties of the Company contained in this Agreement,  each
as if made on such date,  and the  performance  by the Company on or before such
date of all covenants and agreements of the Company  required to be performed on
or before such date;

     d. On the Closing Date, the Registration  Rights Agreement shall be in full
force and effect and the Company shall not be in default thereunder;

     e. On the  Closing  Date,  the  Lender  shall have  received  an opinion of
counsel for the Company,  dated the Closing Date,  in form,  scope and substance
reasonably satisfactory to the Lender,  substantially to the effect set forth in
Annex III attached hereto;

     f. There shall not be in effect any law, rule or regulation  prohibiting or
restricting the transactions  contemplated  hereby,  or requiring any consent or
approval which shall not have been obtained;

     g. From and after the date hereof to and including  the Closing Date,  each
of the following conditions will remain in effect: (i) the trading of the Common
Stock  shall  not have been  suspended  by the SEC or on the  Principal  Trading
Market;  (ii) trading in securities  generally on the Principal  Trading  Market
shall not have been  suspended or limited;  (iii),  no minimum prices shall been
established for securities  traded on the Principal  Trading Market;  (iv) there
shall not have been any outbreak or  escalation  of  hostilities  involving  the
United States;  (v) there shall not have been any material adverse change in any
financial  market  that,  in the  reasonable  judgment of the  Lender,  makes it
impracticable or inadvisable to purchase the Debentures.

     9. GOVERNING LAW: MISCELLANEOUS.

     a. This Agreement  shall be governed by and  interpreted in accordance with
the laws of the State of New York for  contracts to be wholly  performed in such
state and without giving effect to the principles thereof regarding the conflict
of laws.  Each of the parties  consents  to the  exclusive  jurisdiction  of the
federal courts whose districts encompass any part of the City of New York or the
state  courts  of the  State  of New  York  sitting  in the  City of New York in
connection with any dispute  arising under this Agreement and hereby waives,  to
the maximum  extent  permitted by law, any  objection,  including  any objection
based on forum non  conveniens,  to the bringing of any such  proceeding in such
jurisdictions.  To the  extent  determined  by such  court,  the  Company  shall
reimburse the Lender for any reasonable legal fees and disbursements

<PAGE>


incurred  by the Lender in  enforcement  of or  protection  of any of its rights
under any of the Transaction Agreements.

     b.  Failure  of any  party to  exercise  any  right or  remedy  under  this
Agreement or otherwise,  or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.

     c. This  Agreement  shall inure to the  benefit of and be binding  upon the
successors and assigns of each of the parties hereto.

     d. All pronouns and any variations thereof refer to the masculine, feminine
or neuter, singular or plural, as the context may require.

     e. A facsimile  transmission  of this signed  Agreement  shall be legal and
binding on all parties hereto.

     f. This Agreement may be signed in one or more counterparts,  each of which
shall be deemed an original.

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

     h. 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 or the validity or
enforceability of this Agreement in any other jurisdiction.

     i. This Agreement may be amended only by an instrument in writing signed by
the party to be charged with enforcement thereof.

     j. This Agreement  supersedes all prior agreements and understandings among
the parties hereto with respect to the subject matter hereof.

     10. NOTICES.  Any notice required or permitted  hereunder shall be given in
writing  (unless  otherwise  specified  herein) and shall be deemed  effectively
given on the earliest of

     (a) the date  delivered,  if  delivered  by  personal  delivery  as against
     written receipt therefor or by confirmed facsimile transmission,

     (b) the seventh business day after deposit,  postage prepaid, in the United
     States Postal Service by registered or certified mail, or

     (c) the third  business  day after  mailing by  domestic  or  international
     express courier, with delivery costs and fees prepaid,

in each case,  addressed to each of the other parties thereunto  entitled at the
following  addresses (or at such other  addresses as such party may designate by
ten (10)  days'  advance  written  notice  similarly  given to each of the other
parties hereto):

<PAGE>


COMPANY:       STOCKGROUP.COM HOLDINGS, INC.
               Suite 500
               750 West Pender Street
               Vancouver, British Columbia, CANADA V6C 2T7
               Attn: Marcus New
               Telephone No.: (604) 331-0995
               Telecopier No.: (604) 331-1194

               with a copy to:

               Sierchio & Company, LLP
               150 East 58th Street, 25th Floor
               New York, NY 10155
               Attn: Joseph Sierchio, Esq.
               Telephone No.: (212) 446-9500
               Telecopier No.: (212) 446-9504

Lender:        At the address set forth on the signature page of this Agreement.

               with a copy to:

               Krieger & Prager LLP, Esqs.
               39 Broadway
               Suite 1440
               New York, NY 10006
               Attn: Ronald Nussbaum, Esq.
               Telephone No.: (212) 363-2900
               Telecopier No. (212) 363-2999

ESCROW AGENT:  Krieger & Prager LLP
               39 Broadway
               Suite 1440
               New York, NY 10006
               Attn: Samuel Krieger, Esq.
               New York, New York 10016
               Telephone No.: (212) 363-2900
               Telecopier No. (212) 363-2999

     11.  SURVIVAL OF  REPRESENTATIONS  AND  WARRANTIES.  The  Company's and the
Lender's  representations  and warranties herein shall survive the execution and
delivery of this Agreement and the delivery of the  Certificates and the payment
of the  Purchase  Price,  and shall  inure to the  benefit of the Lender and the
Company and their respective successors and assigns.


                   [BALANCE OF PAGE INTENTIONALLY LEFT BLANK.]



<PAGE>


     IN WITNESS WHEREOF, this Agreement has been duly executed by the Lender (if
an entity, by one of its officers  thereunto duly authorized) as of the date set
forth below.

AMOUNT AND PURCHASE PRICE OF DEBENTURES:             $


                             SIGNATURES FOR ENTITIES

     IN  WITNESS  WHEREOF,   the  undersigned   represents  that  the  foregoing
statements are true and correct and that it has caused this Securities  Purchase
Agreement to be duly executed on its behalf this day of , 2000.


--------------------------------
Address                                    Printed Name of Lender
--------------------------------
                                           By:
Telecopier No. -----------------           (Signature of Authorized Person)

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

                  Printed Name and Title
Jurisdiction of Incorporation
or Organization

As of the date set forth below,  the  undersigned  hereby accepts this Agreement
and  represents  that the foregoing  statements are true and correct and that it
has caused this Securities Purchase Agreement to be duly executed on its behalf.

STOCKGROUP.COM HOLDINGS, INC.

By:

Title:
Date:              , 2000



<PAGE>


         ANNEX I           FORM OF DEBENTURE

         ANNEX II          JOINT ESCROW INSTRUCTIONS

         ANNEX III         OPINION OF COUNSEL

         ANNEX IV          REGISTRATION RIGHTS AGREEMENT

         ANNEX V           COMPANY DISCLOSURE MATERIALS

         ANNEX VI          FORM OF WARRANT


<PAGE>


                                                                         ANNEX V
                                                                              TO
                                                   SECURITIES PURCHASE AGREEMENT


                               COMPANY DISCLOSURE


Page     Section      Disclosure
-------------------------------------------------------------------------------
5, 7     3.a., 3.f.        Amro   International   S.A.  and  Deephaven   Capital
                           Management  LLC have right of first refusal  pursuant
                           to  agreement  dated March 31,  2000.  Their right of
                           first refusal expires on December 14, 2000.

6        3.c., 3.h.(iii)   12,000 shares issued to Michael Seifert are not fully
                           paid, and will be canceled before December 31, 2000

8        3.l.              Employees and Directors under 1999 Stock option plan.
                           A total of 689,000  stock options have been issued to
                           employees  and   Directors   under  this  plan  since
                           December 1, 1999, of which 501,300 remain outstanding
                           and unexercised.

8        3.l.              David Jones issued  5,000  options at $2.50 on Dec 31
                           1999 for services

8        3.l.              Wade Dawe issued  15,000  options at $1.50 on Jul 10,
                           2000 for services

8        3.l.              Continental  Capital issued 100,000 shares on Aug 24,
                           2000 for services valued at $1.6250

8        3.l.              Continental  Capital issued 100,000  options at $4.00
                           on Aug 24, 2000 for services

8        3.l.              MediaStream  issued  116,935 shares at $3.72 pursuant
                           to a private placement in April 2000

8        3.l.              Deephaven  Private  Placement  Trading  was  issued a
                           $2,000,000  Convertible  Note  March 31,  2000,  plus
                           121,212  options at $3.30 of which  $500,000 has been
                           repaid to date.

8        3.l.              Amro  International  S.A.  was  issued  a  $1,000,000
                           Convertible  Note March 31, 2000, plus 60,606 options
                           at $3.30, of which $250,000 has been repaid to date.

8        3.l.              Amro   International  was  issued  67,741  shares  at
                           $0.7755  on  November   20,   2000,   pursuant  to  a
                           conversion under their Convertible Note

8        3.l.              Jesup  &  Lamont  was  issued   90,909   options  for
                           Investment Banking services on March 31, 2000.

8        3.m.              The Company  plans to increase the  authorized  share
                           capital from 50,000,000 to 75,000,000 at the next AGM