Exhibit 10.20


                          SECURITIES PURCHASE AGREEMENT

         THIS  SECURITIES  PURCHASE  AGREEMENT (this  "Agreement"),  dated as of
April  ___,  2004,  by and  among  CYCO.NET  INC.,  a Nevada  corporation,  with
headquarters  located at 400 Gold SW - Suite 1000 Albuquerque,  New Mexico 87102
(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 up to Five Hundred Thousand
Dollars   ($500,000)  of  secured   convertible   debentures  (the  "Convertible
Debentures"),  which shall be  convertible  into shares of the Company's  common
stock,  par value $0.001 (the "Common  Stock") (as  converted,  the  "Conversion
Shares") of which Two Hundred Fifty Thousand Dollars  ($250,000) shall be funded
on the fifth (5th) business day following the date hereof (the "First Closing"),
and Two Hundred Fifty  Thousand  Dollars  ($250,000) on the fifth (5th) business
day following the date the registration statement (the "Registration Statement")
filed pursuant the Investor Registration Rights Agreement dated the date hereof,
is declared  effective by the United States  Securities and Exchange  Commission
(the  "SEC") (the  "Second  Closing")  (individually  referred to as a "Closing"
collectively referred to as the "Closings"), for a total purchase price of up to
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  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.

         WHEREAS,  contemporaneously  with the  execution  and  delivery of this
Agreement,  the parties hereto are executing and delivering Irrevocable Transfer
Agent  Instructions  substantially in the form attached hereto as Exhibit C (the
"Irrevocable Transfer Agent Instructions").


<PAGE>


         WHEREAS,  contemporaneously  with the  execution  and  delivery of this
Agreement,  the parties hereto are executing and delivering a Security Agreement
substantially   in  the  form  attached  hereto  as  Exhibit  D  (the  "Security
Agreement")  pursuant  to which the  Company  has agreed to provide  the Buyer a
security interest in Pledged Collateral (as this term is defined in the Security
Agreement  dated the date  hereof) to secure  Company's  obligations  under this
Agreement,   the  Convertible   Debenture,   the  Investor  Registration  Rights
Agreement,  the Irrevocable Transfer Agent Instructions,  the Security Agreement
or any other obligations of the Company to the Investor; and

         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:

         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  "Butler  Gonzalez  LLP,  as Escrow  Agent for  Cyco.Net
Inc./Cornell  Capital Partners,  LP", 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 First Closing of the purchase and
sale of the  Convertible  Debentures  shall  take  place at 10:00  a.m.  Eastern
Standard Time on the fifth (5th) business day following the date hereof, subject
to notification of satisfaction of the conditions to the First Closing set forth
herein and in Sections 6 and 7 below (or such later date as is  mutually  agreed
to by the Company and the Buyer(s))  (the "First  Closing  Date") and the Second
Closing of the purchase and sale of the Convertible  Debentures shall take place
at 10:00 a.m.  Eastern  Standard Time on the fifth (5th)  business day following
the date the Registration Statement is declared effective by the SEC, subject to
notification  of  satisfaction of the conditions to the Second Closing set forth
herein and in Sections 6 and 7 below (or such later date as is  mutually  agreed
to by the Company and the Buyer(s)) (the "Second  Closing  Date")  (collectively
referred to a the "Closing  Dates").  The Closing shall occur on the  respective
Closing Dates at the offices of Butler Gonzalez,  LLP, 1416 Morris Avenue, Suite
207,  Union,  NJ 07083  (or such  other  place as is  mutually  agreed to by the
Company and the Buyer(s)).

                  (c)      Escrow Arrangements;  Form of Payment. Upon execution
hereof by Buyer(s) and pending the Closings,  the aggregate proceeds of the sale
of the Convertible  Debentures to Buyer(s) pursuant hereto shall be deposited in
a non-interest  bearing escrow account with Butler Gonzalez LLP, as escrow agent
(the "Escrow Agent"),  pursuant to the terms of an escrow agreement  between the
Company,  the  Buyer(s)  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 Dates,  (i) the Escrow Agent shall
deliver to the Company in accordance with the terms of the Escrow Agreement such
aggregate proceeds for the Convertible  Debentures to be issued and sold to such


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<PAGE>


Buyer(s),  minus the fees and  expenses  of Butler  Gonzalez  LLP of which  Five
Thousand  Dollars ($5,000) shall be paid directly from the gross proceeds of the
First Closing and the  outstanding  fees of  Kirkpatrick & Lockhart LLP of which
Thirty One Thousand  Fifty-Three and 41/100 Dollars  ($31,053.41)  shall be paid
directly from the gross proceeds of the First Closing and  Twenty-Five  Thousand
Dollars  ($25,000)  shall be paid directly from the gross proceeds of the Second
Closing 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 WARRANTIES.

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

                  (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


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<PAGE>



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.

                  (f)      Transfer  or  Resale.  Each  Buyer  understands  that
except as  provided  in the  Investor  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  thereunder;  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  thereunder.  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


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<PAGE>

                  REGISTRATION  IS NOT  REQUIRED  UNDER  SAID ACT OR  APPLICABLE
                  STATE SECURITIES LAWS.

The  legend set forth  above  shall be removed  and the  Company  within two (2)
business days 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,  after such holder  provides  the Company  with an opinion of
counsel,  which  opinion  shall be in form,  substance  and scope  customary for
opinions  of counsel in  comparable  transactions,  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 Security Agreement,
the  Investor  Registration  Rights  Agreement,  the Escrow  Agreement,  and the
Irrevocable  transfer  Agent  Instructions;  (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 December 31, 2003;  (iv) the Company's Form 10-QSB for the
fiscal  quarter ended  September 30, 2003 and (v) answers to all questions  each
Buyer submitted to the Company regarding an investment in the Company;  and each
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)      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, except
as set forth in the SEC Documents (as defined herein):


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<PAGE>


                  (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 Security  Agreement,  the Investor
Registration Rights Agreement,  the Escrow Agreement,  the Irrevocable  Transfer
Agent  Instructions,  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  Security
Agreement, the Investor Registration Rights Agreement, the Escrow Agreement, the
Irrevocable  Transfer  Agent  Instructions  (as defined  herein) 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, the Security Agreement, the
Investor  Registration Rights Agreement,  the Escrow Agreement,  the Irrevocable
Transfer Agent  Instructions and any related  agreements have been duly executed
and delivered by the Company, (iv) this Agreement,  the Security Agreement,  the
Investor  Registration Rights Agreement,  the Escrow Agreement,  the Irrevocable
Transfer Agent Instructions 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 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.  The  authorized  officer of the
Company  executing  this  Agreement,   the  Security  Agreement,   the  Investor
Registration Rights Agreement,  the Escrow Agreement,  the Irrevocable  Transfer
Agent Instructions and any related agreements knows of no reason why the Company
cannot  file  the   registration   statement  as  required  under  the  Investor
Registration  Rights Agreement or perform any of the Company's other obligations
under such documents.

                  (c)      Capitalization.  The authorized  capital stock of the
Company  consists of  100,000,000  shares of Common Stock,  par value $0.001 per
share and no shares of  Preferred  Stock.  As of the date hereof the Company has
91,240,931  shares  of  Common  Stock  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)),  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


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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) and (iv) there are no
outstanding registration statements and there are no outstanding comment letters
from  the  SEC or any  other  regulatory  agency.  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  Articles  of  Incorporation,  as amended and as in effect on the date
hereof (the  "Articles 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  the  SEC
Documents,  the  execution,  delivery and  performance  of this  Agreement,  the
Security  Agreement,  the Investors  Registration  Rights Agreement,  the Escrow
Agreement and the Irrevocable Transfer Agent Instructions by the Company and the
consummation by the Company of the transactions contemplated hereby will not (i)
result in a violation  of the  Articles 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 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  National  Association  of
Securities  Dealers  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 Articles 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


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<PAGE>


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,
2002, 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
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 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 operations of the Company and its
subsidiaries taken as a whole.


                                       8
<PAGE>



                  (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.

                  (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.

                                       9
<PAGE>


                  (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  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.

                  (s)      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.  Except as set forth in the SEC
Documents,  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.

                                       10
<PAGE>



                  (t)      Tax Status. Except as set forth in the SEC Documents,
the  Company  and each of its  subsidiaries  has made and 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
authority of any jurisdiction,  and the officers of the Company know of no basis
for any such claim.

                  (u)      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.

                  (v)      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.

                  (w)      Increase in  Authorized  Shares.  Within  twenty (20)
calendar  days from the date hereof,  the Company  shall take all the  necessary
steps and file the appropriate  documentation  with the United States Securities
and Exchange  Commission as well as any and all  appropriate  state  agencies in
order to obtain an increase in the Company's  authorized  shares of common stock
to 300,000,000.

                  (x)      Within  forty five (45)  calendar  days from the date
hereof, the Company shall have obtained an increase in the Company's  authorized
shares of common stock to 300,000,000.

                  (y)      Vote in Favor of Increase of Authorized Shares.  Rick
Urrea shall vote all shares for which he has  beneficial  ownership  in favor of
the  increase  of the  authorized  shares  of the  Company's  common  stock,  as
described in subsection (w) above,  and to take all steps  necessary in order to
vote in favor of such  increase  of the  Company's  authorized  shares of common
stock as contemplated herein.

                                       11
<PAGE>


                  (z)      The Company acknowledges that the Buyer is relying on
the  representations  and warranties made by the Company hereunder and that such
representations and warranties are a material inducement to the Buyer purchasing
the Convertible  Debentures.  The Company further acknowledges that without such
representations  and warranties of the Company made  hereunder,  the buyer would
not enter into this Agreement.

         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  Buyer(s)  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 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  thereunder,  and the Company  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  otherwise  permit  such
termination.

                  (d)      Use of  Proceeds.  The Company  will use the proceeds
from the sale of the  Convertible  Debentures for general  corporate and working
capital 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 The National Association of
Securities  Dealers Inc.'s  Over-The-Counter  Bulletin Board  ("OTCBB") or other


                                       12
<PAGE>


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 on the OTCBB.

                  (g)      Fees  and  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, the Escrow Agreement, the Investor Registration Rights Agreement, the
Security Agreement and the Irrevocable Transfer Agent Instructions. The Buyer(s)
shall be entitled to a ten percent (10%) discount on the Purchase Price.

                  (h)      The costs and  expenses  of the  Buyer(s)  and Butler
Gonzalez LLP, of which Five  Thousand  Dollars  ($5,000)  shall be paid directly
from the proceeds of the First Closing and the outstanding fees of Kirkpatrick &
Lockhart  LLP of which  Thirty  One  Thousand  Fifty  Three and  41/100  Dollars
($31,053.41)  shall be paid for by the Company  directly from the gross proceeds
of the First Closing held in escrow and Twenty-Five  Thousand Dollars  ($25,000)
shall be paid directly from the gross proceeds of the Second Closing

                  (i)      Corporate   Existence.   So   long   as  any  of  the
Convertible  Debentures  remain  outstanding,  the Company shall not directly or
indirectly consummate any merger, reorganization,  restructuring,  reverse stock
split consolidation, sale of all or substantially all of the Company's assets or
any similar  transaction  or related  transactions  (each such  transaction,  an
"Organizational  Change") unless,  prior to the  consummation an  Organizational
Change, the Company obtains the written consent of each Buyer. 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.

                  (j)      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.


                                       13
<PAGE>


                  (k)      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 new  transfer  agent  execute and agree to be
bound by the terms of the Irrevocable  Transfer Agent  Instructions  (as defined
herein).

                  (l)      Restriction on Issuance of the Capital Stock. So long
as any Convertible  Debentures are  outstanding,  the Company shall not, without
the prior written consent of the Buyer(s),  issue or sell shares of Common Stock
or Preferred Stock (i) without  consideration  or for a consideration  per share
less than the Bid Price of the Common Stock determined  immediately prior to its
issuance,  (ii) any warrant,  option, right,  contract,  call, or other security
instrument  granting  the  holder  thereof,  the right to acquire  Common  Stock
without  consideration or for a consideration  less than such Common Stock's Bid
Price value determined immediately prior to it's issuance,  (iii) enter into any
security  instrument  granting  the  holder a security  interest  in any and all
assets of the Company, or (iv) file any registration statement on Form S-8.

         5.       TRANSFER AGENT INSTRUCTIONS.

         The Company shall issue the Irrevocable  Transfer Agent Instructions to
its transfer agent  irrevocably  appointing Butler Gonzalez LLP as its agent for
purpose of having certificates issued, 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,  for  interest  owed
pursuant to the Convertible  Debenture,  and for any and all Liquidated  Damages
(as this term is defined in the Investor Registration Rights Agreement).  Butler
Gonzalez LLP shall be paid a cash fee of Fifty Dollars ($50) for every  occasion
they act pursuant to the Irrevocable  Transfer Agent  Instructions.  The Company
shall not change its transfer agent without the express  written  consent of the
Buyer(s), which may be withheld by the Buyer(s) in its sole discretion. Prior to
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(g)  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  Investor  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,  in form,  scope and  substance  customary  for  opinions of counsel in
comparable  transactions  to the  effect  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 within two (2) business days instruct its transfer  agent to issue


                                       14
<PAGE>


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  Closings  is  subject  to the
satisfaction,  at or  before  the  Closing  Dates,  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,  the
Security  Agreement,  the Escrow Agreement and the Investor  Registration Rights
Agreement and the Irrevocable Transfer Agent Instructions 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  the net proceeds 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 Dates as though made at that time (except for  representations
and warranties  that speak as of a 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 Dates.

                  (d)      The  Company  shall  have  filed a form  UCC - 1 with
regard to the  Pledged  Property  and  Pledged  Collateral  as  detailed  in the
Security  Agreement  dated the date hereof and provided  proof of such filing to
the Buyer(s).

         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,  the
Security  Agreement,  the  Convertible  Debenture,  the  Escrow  Agreement,  the
Irrevocable   Transfer   Instructions  and  the  Investor   Registration  Rights
Agreement, and delivered the same to the Buyer(s).


                                       15
<PAGE>


                  (b)      With regards to the second closing, the Company shall
have validly increased their authorized shares of common stock to at least Three
Hundred Million (300,000,000) shares.

                  (c)      The Common Stock shall be authorized for quotation on
the OTCBB,  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 the OTCBB.

                  (d)      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  Dates 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
Dates.  If requested by the Buyer,  the Buyer shall have received a certificate,
executed by the President of the Company,  dated as of the Closing Dates, 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  Dates
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)      The  Buyer(s)  shall  have  received  an  opinion  of
counsel from Kirkpatrick & Lockhart, LLP in a form satisfactory to the Buyer(s).

                  (g)      The Company  shall have  provided  to the  Buyer(s) a
certificate of good standing from the secretary of state of Nevada.

                  (h)      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 Shares then outstanding.

                  (i)      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.

                  (j)      The Company  shall have  provided to the  Investor an
acknowledgement,  to  the  satisfaction  of the  Investor,  from  Stark,  Winter
Schenkein  LLP as to its  ability to provide all  consents  required in order to
file a registration statement in connection with this transaction.


                                       16
<PAGE>


                  (k)      The  Company  shall  have  filed a form  UCC - 1 with
regard to the  Pledged  Property  and  Pledged  Collateral  as  detailed  in the
Security  Agreement  dated the date hereof and provided  proof of such filing to
the Buyer(s).

         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 Investor 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  Investor  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 its  officers,  directors,  employees  and
agents  (including,  without  limitation,  those retained in connection with the
transactions  contemplated  by  this  Agreement)  (collectively,   the  "Company
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.


                                       17
<PAGE>


         9.       GOVERNING LAW: MISCELLANEOUS.

                  (a)      Governing  Law. This  Agreement  shall be governed by
and  interpreted  in  accordance  with the laws of the State of  Nevada  without
regard to the principles of conflict of laws. The parties further agree that any
action between them shall be heard in Hudson County,  New Jersey,  and expressly
consent  to the  jurisdiction  and venue of the  Superior  Court of New  Jersey,
sitting in Hudson County and the United States  District  Court for the District
of New Jersey sitting in Newark,  New Jersey 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.

                  (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:

                                       18
<PAGE>


<TABLE>
<CAPTION>
<S>                                            <C>
If to the Company, to:                         Cyco.Net Inc.
                                               400 Gold SW - Suite 1000
                                               Albuquerque, NM 87102
                                               Attention:        Rick Urrea, President and  Chief Executive Officer
                                               Telephone:        (505) 710-2190
                                               Facsimile:

With a copy to:                                Kirkpatrick & Lockhart LLP
                                               201 South Biscayne Boulevard - Suite 2000
                                               Miami, FL  33131-2399
                                               Attention:        Clayton E. Parker, Esq.
                                               Telephone:        (305) 539-3300
                                               Facsimile:        (305) 358-7095

If to the Transfer Agent, to:                  Corporate Stock Transfer
                                               3200 Cherry Creek Drive
                                               Denver, Colorado 80209
                                               Attention:  Cindy Hintger
                                               (303) 282-4800
                                               (303) 282 5800

With Copy to:                                  Butler Gonzalez LLP
                                               1416 Morris Avenue - Suite 207
                                               Union, NJ 07083
                                               Attention:        David Gonzalez, Esq.
                                               Telephone:        (908) 810-8588
                                               Facsimile:        (908) 810-0973
</TABLE>

         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 Buyer(s)
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 two (2) years  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.


                                       19
<PAGE>


                  (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.

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

                  (m)      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]

                                       20
<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.


                              COMPANY:
                              CYCO.NET INC.

                              By:
                              Name: Rick Urrea
                              Title:   President and Chief Executive Officer

                              SOLELY WITH REGARD TO THE REPRESENTATIONS AND
                              WARRANTIES CONTAINED IN SECTION 3(Y) HEREIN

                              -------------------------------------
                              Rick Urrea
                              ---------------------------------------------


<PAGE>

                                                                       EXHIBIT A


                 FORM OF INVESTOR REGISTRATION RIGHTS AGREEMENT


<PAGE>

                                                                       EXHIBIT B


                            FORM OF ESCROW AGREEMENT


<PAGE>

                                                                       EXHIBIT C


                           TRANSFER AGENT INSTRUCTIONS


<PAGE>


                                   SCHEDULE I


                               SCHEDULE OF BUYERS

<TABLE>
<CAPTION>
                                                                                 ADDRESS/FACSIMILE             AMOUNT OF
               NAME                              SIGNATURE                        NUMBER OF BUYER             SUBSCRIPTION
--------------------------------    ---------------------------------    ---------------------------------  -------------------
<S>                                 <C>                                  <C>                                     <C>
Cornell Capital Partners, LP        By:      Yorkville Advisors, LLC     101 Hudson Street - Suite 3700          $  500,000
                                    Its:     General Partner             Jersey City, NJ  07303
                                                                         Facsimile:        (201) 985-8266

                                    By:
                                    Name:    Mark A. Angelo
                                    Its:     Portfolio Manager
</TABLE>