DEBENTURE AND WARRANT PURCHASE

                                    AGREEMENT




                           DATED AS OF APRIL 19, 2002




                                      AMONG




                           APPIANT TECHNOLOGIES, INC.



                                       AND



                       THE PURCHASERS LISTED ON EXHIBIT A


<PAGE>
                                                                        PAGE
                                                                        ----

ARTICLE I   Purchase and Sale of Debentures and Warrants. . . . . . . .   3

    Section 1.1   Purchase and Sale of Debentures and Warrants. . . . .   3
    Section 1.2   Purchase Price and Closing. . . . . . . . . . . . . .   3
    Section 1.3   Escrow. . . . . . . . . . . . . . . . . . . . . . . .   4
    Section 1.4   Warrants. . . . . . . . . . . . . . . . . . . . . . .   4
    Section 1.5   Conversion Shares / Warrant Shares. . . . . . . . . .   4

ARTICLE II   Representations and Warranties . . . . . . . . . . . . . .   4

    Section 2.1   Representations and Warranties of the Company . . . .   4
    Section 2.2   Representations and Warranties of the Purchasers. . .  14

ARTICLE III   Covenants . . . . . . . . . . . . . . . . . . . . . . . .  16

    Section 3.1   Securities Compliance . . . . . . . . . . . . . . . .  16
    Section 3.2   Registration and Listing. . . . . . . . . . . . . . .  16
    Section 3.3   Inspection Rights . . . . . . . . . . . . . . . . . .  17
    Section 3.4   Compliance with Laws. . . . . . . . . . . . . . . . .  17
    Section 3.5   Keeping of Records and Books of Account . . . . . . .  17
    Section 3.6   Reporting Requirements. . . . . . . . . . . . . . . .  17
    Section 3.7   Amendments. . . . . . . . . . . . . . . . . . . . . .  18
    Section 3.8   Other Agreements. . . . . . . . . . . . . . . . . . .  18
    Section 3.9   Distributions . . . . . . . . . . . . . . . . . . . .  18
    Section 3.10  Subsequent Financings; Right of First Refusal . . . .  18
    Section 3.11  Reservation of Shares . . . . . . . . . . . . . . . .  19
    Section 3.12  Transfer Agent Instructions . . . . . . . . . . . . .  19
    Section 3.13  Disposition of Assets . . . . . . . . . . . . . . . .  20
    Section 3.14  Repayment of Other Indebtedness . . . . . . . . . . .  20
    Section 3.15  Non-public Information  . . . . . . . . . . . . . . .  20
    Section 3.16  Board Membership  . . . . . . . . . . . . . . . . . .  20
    Section 3.17  Stockholder Approval or Nasdaq Waiver . . . . . . . .  20

ARTICLE IV   Conditions . . . . . . . . . . . . . . . . . . . . . . . .  21

    Section 4.1   Conditions Precedent to the Obligation of the Company
                  to Close and to Sell the Debentures and Warrants. . .  21
    Section 4.2   Conditions Precedent to the Obligation of the
                  Purchasers to Close and toPurchase the
                  Debentures and Warrants . . . . . . . . . . . . . . .  21

ARTICLE V   Certificate Legend. . . . . . . . . . . . . . . . . . . . .  24

    Section 5.1   Legend. . . . . . . . . . . . . . . . . . . . . . . .  24


                                      -i-
<PAGE>
ARTICLE VI   Termination. . . . . . . . . . . . . . . . . . . . . . . .  25

    Section 6.1   Termination by Mutual Consent.. . . . . . . . . . . .  25
    Section 6.2   Effect of Termination . . . . . . . . . . . . . . . .  25

ARTICLE VII   Indemnification . . . . . . . . . . . . . . . . . . . . .  25

    Section 7.1   General Indemnity . . . . . . . . . . . . . . . . . .  25
    Section 7.2   Indemnification Procedure . . . . . . . . . . . . . .  25

ARTICLE VIII   Miscellaneous. . . . . . . . . . . . . . . . . . . . . .  26

    Section 8.1   Fees and Expenses . . . . . . . . . . . . . . . . . .  26
    Section 8.2   Specific Enforcement; Consent to Jurisdiction.. . . .  27
    Section 8.3   Entire Agreement; Amendment . . . . . . . . . . . . .  27
    Section 8.4   Notices . . . . . . . . . . . . . . . . . . . . . . .  28
    Section 8.5   Waivers . . . . . . . . . . . . . . . . . . . . . . .  28
    Section 8.6   Headings. . . . . . . . . . . . . . . . . . . . . . .  29
    Section 8.7   Successors and Assigns. . . . . . . . . . . . . . . .  29
    Section 8.8   No Third Party Beneficiaries. . . . . . . . . . . . .  29
    Section 8.9   Governing Law . . . . . . . . . . . . . . . . . . . .  29
    Section 8.10  Survival  . . . . . . . . . . . . . . . . . . . . . .  29
    Section 8.11  Counterparts  . . . . . . . . . . . . . . . . . . . .  29
    Section 8.12  Publicity . . . . . . . . . . . . . . . . . . . . . .  29
    Section 8.13  Severability  . . . . . . . . . . . . . . . . . . . .  29
    Section 8.14  Further Assurances  . . . . . . . . . . . . . . . . .  30


                                      -ii-
<PAGE>
                    DEBENTURE AND WARRANT PURCHASE AGREEMENT


     This DEBENTURE AND WARRANT PURCHASE AGREEMENT is dated as of April 19, 2002
(this  "Agreement")  by  and  between  Appiant  Technologies,  Inc.,  a Delaware
        ---------
corporation (the "Company"), and the entities listed on Exhibit A hereto (each a
                  -------                               ---------
"Purchaser"  and  collectively,  the  "Purchasers").
 ---------                             ----------

     The parties hereto agree as follows:


                                    ARTICLE I

                  PURCHASE AND SALE OF DEBENTURES AND WARRANTS

          Section  1.1  Purchase  and  Sale of Debentures and Warrants. Upon the
                        -----------------------------------------------
following  terms  and  conditions,  the  Company  shall  issue  and  sell to the
Purchasers,  and  the  Purchasers  shall  purchase  from  the  Company,  secured
convertible  debentures  in the aggregate principal amount of up to Four Million
Dollars  ($4,000,000.00)  bearing interest at the rate of eight percent (8%) per
annum,  convertible  into  shares of the Company's common stock, par value $0.01
per  share  (the  "Common  Stock"), in substantially the form attached hereto as
                   -------------
Exhibit  B  (the "Debentures"), and warrants to purchase shares of Common Stock,
----------        ----------
in  substantially  the  form  attached hereto as Exhibit C (the "Warrants"), set
                                                 ---------       --------
forth  with  respect  to  such  Purchaser  on  Exhibit  A hereto.  The aggregate
                                               ----------
purchase  price  may  be  funded  in  one or more tranches as agreed upon by the
Company  and  the  Purchasers.  The Company and the Purchasers are executing and
delivering  this Agreement in accordance with and in reliance upon the exemption
from securities registration afforded by Section 4(2) of the U.S. Securities Act
of  1933,  as amended, and the rules and regulations promulgated thereunder (the
"Securities  Act"),  including  Regulation  D ("Regulation D"), and/or upon such
 ---------------                                ------------
other  exemption from the registration requirements of the Securities Act as may
be available with respect to any or all of the investments to be made hereunder.

          Section  1.2  Purchase  Price and Closing. The Company agrees to issue
                        ----------------------------
and sell to the Purchasers and, in consideration of and in express reliance upon
the  representations,  warranties,  covenants,  terms  and  conditions  of  this
Agreement,  the  Purchasers agree to purchase the Debentures and Warrants for an
aggregate  purchase  price  of  up  to Four Million Dollars ($4,000,000.00) (the
"Purchase  Price").  The  closing of the purchase and sale of the Debentures and
 ---------------
Warrants  (each  a  "Closing") to be acquired by the Purchasers from the Company
                     -------
under  this  Agreement  shall  take  place at the offices of Jenkens & Gilchrist
Parker  Chapin  LLP,  The Chrysler Building, 405 Lexington Avenue, New York, New
York 10174 (the "Closing") at 10:00 a.m., New York time on (i) the date on which
                 -------
the  last  to  be  fulfilled or waived of the conditions set forth in Article IV
hereof and applicable to such Closing shall be fulfilled or waived in accordance
herewith  or (ii) at such other time and place or on such date as the Purchasers
and the Company may agree upon (each a "Closing Date").  The Closing Date of the
                                        ------------
first  tranche of Debentures and Warrants (the "Initial Closing") shall occur on
                                                ---------------
or  before  April  19,2002  or such other date as the Company and the Purchasers
shall mutually agree (the "Initial Closing Date"). The Closing Date of the final
                           --------------------
tranche  of  Debentures and Warrants to be purchased hereunder


                                        3
<PAGE>
     shall  occur  on or before April 30, 2002 or such other date as the Company
     and  the  Purchasers  may  mutually  agree  (the  "Final  Closing  Date").
                                                        --------------------

          Section  1.3 Escrow. On or before each Closing Date, the Company shall
                       ------
deliver  to  the  escrow  agent  (the  "Escrow  Agent") identified in the Escrow
                                        -------------
Agreement  attached  hereto as Exhibit H (the "Escrow Agreement") Debentures and
                                               ----------------
Warrants  in  the  amounts  set  forth  opposite each Purchaser's name under the
headings  "Amount  of  Investment"  and  "Number  of Warrants," respectively, on
Exhibit A hereto, registered in such Purchaser's name (or its nominee) and prior
to  each  Closing  Date, each Purchaser shall pay by wire transfer of funds into
escrow the Purchase Price set forth opposite each Purchaser's name on Exhibit A.
In  addition,  each  party shall deliver all documents, instruments and writings
required to be delivered by such party pursuant to this Agreement at or prior to
each  Closing.  The  Company  acknowledges  that  the  purchase  prices  of
                         and                          for their  respective  pro
------------------------     ------------------------
rata  portions  of  the  Debentures  and  Warrants  were advanced and evidenced,
respectively, by a promissory notes issued by the Company in favor of        for
                                                                     --------
the  principal  amount  of $150,000 and in favor of             in the principal
                                                    -----------
amount of $125,000 (the "Bridge Notes").
                         ------------

          Section 1.4 Warrants. At the Closing, the Company shall have issued to
                      --------
the  Purchasers  Warrants to purchase an aggregate of _________ shares of Common
Stock.  The  Warrants  shall  be exercisable for five (5) years from the date of
issuance and shall have an exercise price equal to the Warrant Price (as defined
in  the  Warrants).

          Section  1.5  Conversion  Shares  /  Warrant  Shares.  The Company has
                        --------------------------------------
authorized  and  has  reserved  and  covenants  to  continue to reserve, free of
preemptive rights and other similar contractual rights of stockholders, a number
of its authorized but unissued shares of its Common Stock equal to at least 200%
of  the  aggregate  number of shares of Common Stock to effect the conversion of
the  Debentures and any interest accrued and outstanding thereon and exercise of
the  Warrants.  Any  shares  of  Common  Stock  issuable  upon conversion of the
Debentures  and any interest accrued and outstanding thereon and exercise of the
Warrants (and such shares when issued) are herein referred to as the "Conversion
                                                                      ----------
Shares"  and  the "Warrant Shares," respectively.  The Debentures, the Warrants,
-----              --------------
the Conversion Shares and the Warrant Shares are sometimes collectively referred
to  herein  as  the  "Securities".
                      ----------

                                   ARTICLE II

                         Representations and Warranties

          Section 2.1 Representations and Warranties of the Company. In order to
                      ---------------------------------------------
induce  the  Purchasers  to  enter  into  this  Agreement  and  to  purchase the
Debentures  and  the  Warrants,  the  Company  hereby  makes  the  following
representations  and  warranties  to  the  Purchasers:

          (a)     Organization,  Good  Standing  and  Power.  The  Company  is a
                  -----------------------------------------
corporation  duly  incorporated, validly existing and in good standing under the
laws  of  the  State  of  Delaware and has the requisite corporate power to own,
lease and operate its properties and assets and to


                                        4
<PAGE>
conduct its business as it is now being conducted. The Company does not have any
Subsidiaries (as defined in Section 2.1(g)) or own securities of any kind in any
other entity except as set forth on Schedule 2.1(g) hereto. The Company and each
                                    ---------------
such Subsidiary 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  or property owned by it makes such qualification necessary except for
any  jurisdiction(s)  (alone  or in the aggregate) in which the failure to be so
qualified  will  not  have  a  Material Adverse Effect. For the purposes of this
                               -----------------------
Agreement,  "Material  Adverse Effect" means any adverse effect on the business,
operations,  properties,  prospects or financial condition of the Company or its
Subsidiaries  and which is material to such entity or other entities controlling
or  controlled  by  such  entity  or  which  is  likely to materially hinder the
performance  by  the  Company  of  its obligations hereunder and under the other
Transaction  Documents  (as  defined  in  Section  2.1(b)  hereof).

          (b)     Authorization;  Enforcement.  The  Company  has  the requisite
                  ---------------------------
corporate  power  and  authority  to  enter into and perform this Agreement, the
Registration  Rights  Agreement,  the  Security  Agreement,  the Debentures, the
Warrants  and the Irrevocable Transfer Agent Instructions (as defined in Section
3.12)  (collectively,  the  "Transaction  Documents")  and to issue and sell the
                             ----------------------
Securities  in  accordance  with  the  terms  hereof  and the Debentures and the
Warrants,  as  applicable.  The  execution,  delivery  and  performance  of  the
Transaction  Documents  by  the  Company  and  the  consummation  by  it  of the
transactions  contemplated  thereby have been duly and validly authorized by all
necessary  corporate  action,  and  no  further  consent or authorization of the
Company  or  its Board of Directors or stockholders is required.  This Agreement
has  been  duly  executed  and  delivered by the Company.  The other Transaction
Documents  will  have  been  duly  executed  and delivered by the Company at the
Closing.  Each  of  the  Transaction  Documents constitutes, or shall constitute
when  executed  and  delivered,  a  valid  and binding obligation of the Company
enforceable  against  the  Company  in accordance with its terms, except as such
enforceability  may  be  limited  by  applicable  bankruptcy,  insolvency,
reorganization,  moratorium,  liquidation,  conservatorship,  receivership  or
similar  laws relating to, or affecting generally the enforcement of, creditor's
rights  and  remedies  or  by other equitable principles of general application.

          (c)     Capitalization.  The  authorized  capital stock of the Company
                  --------------
and  the shares thereof currently issued and outstanding as of April 2, 2002 are
set  forth  on  Schedule  2.1(c)  hereto.  All  of the outstanding shares of the
                ----------------
Company's  Common Stock and any other security of the Company have been duly and
validly authorized.  Except as set forth in this Agreement or on Schedule 2.1(c)
                                                                 ---------------
hereto,  no  shares  of  Common  Stock  or any other security of the Company are
entitled  to  preemptive  rights  or  registration  rights  and  there  are  no
outstanding  options,  warrants,  scrip,  rights  to  subscribe  to,  call  or
commitments  of  any  character  whatsoever relating to, or securities or rights
convertible  into,  any  shares  of  capital stock of the Company.  Furthermore,
except as set forth in this Agreement or on Schedule 2.1(c) hereto, there are no
                                            ---------------
contracts,  commitments, understandings, or arrangements by which the Company is
or  may  become  bound  to  issue  additional shares of the capital stock of the
Company  or  options,  securities  or  rights convertible into shares of capital
stock  of  the Company.  Except for customary transfer restrictions contained in
agreements entered into by the Company in order to sell restricted securities or
as provided on Schedule 2.1(c) hereto, the Company is not a party to or bound by
               ---------------
any  agreement or understanding granting registration or anti-dilution rights to
any  person with respect to any of its equity or debt securities.  Except as set
forth on Schedule 2.1(c),


                                        5
<PAGE>
the  Company  is  not  a  party to, and it has no knowledge of, any agreement or
understanding  restricting  the  voting or transfer of any shares of the capital
stock  of  the Company. Except as set forth on Schedule 2.1(c) hereto, the offer
                                               ---------------
and  sale  of  all  capital  stock, convertible securities, rights, warrants, or
options  of the Company issued prior to the Closing complied with all applicable
federal  and state securities laws, and no holder of such securities has a right
of  rescission  or  claim  for  damages  with respect thereto which could have a
Material  Adverse  Effect.  The  Company  has furnished or made available to the
Purchasers  and  their counsel true and correct copies of the Company's Articles
of  Incorporation  as  in  effect  on  the date hereof (the "Articles"), and the
Company's  Bylaws  as  in  effect  on  the  date  hereof  (the  "Bylaws").

          (d)     Issuance of Securities.  The Debentures and the Warrants to be
                  ----------------------
issued  at  the  Closing  have  been  duly authorized by all necessary corporate
action  and,  when  paid  for or issued in accordance with the terms hereof, the
Debentures shall be validly issued and outstanding, free and clear of all liens,
encumbrances  and rights of refusal of any kind.  When the Conversion Shares and
Warrant  Shares  are  issued  and  paid for in accordance with the terms of this
Agreement  and  as set forth in the Debentures and Warrants, such shares will be
duly  authorized  by  all  necessary  corporate  action  and  validly issued and
outstanding,  fully  paid  and  nonassessable,  free  and  clear  of  all liens,
encumbrances and rights of refusal of any kind and the holders shall be entitled
to  all  rights  accorded  to  a  holder  of  Common  Stock.

          (e)     No  Conflicts.  The execution, delivery and performance of the
                  -------------
Transaction  Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby do not and will not (i) violate any
provision  of  the  Company's  Articles or Bylaws or any Subsidiary's comparable
charter  documents,  (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, mortgage, deed of trust, indenture, note, bond,
license,  lease  agreement, instrument or obligation to which the Company or any
of  its  Subsidiaries  is  a  party  or  by  which  the  Company  or  any of its
Subsidiaries'  respective properties or assets are bound, (iii) create or impose
a  lien, mortgage, security interest, charge or encumbrance of any nature on any
property  or asset of the Company or any of its Subsidiaries under any agreement
or  any commitment to which the Company or any of its Subsidiaries is a party or
by  which  the  Company  or  any of its Subsidiaries is bound or by which any of
their  respective  properties or assets are bound, or (iv) result in a violation
of  any  federal,  state,  local  or  foreign  statute, rule, regulation, order,
judgment or decree (including federal and state securities laws and regulations)
applicable to the Company or any of its Subsidiaries or by which any property or
asset  of  the Company or any of its Subsidiaries are bound or affected, except,
in  all  cases  other than violations pursuant to clauses (i) or (iv) above, for
such  conflicts, defaults, terminations, amendments, acceleration, cancellations
and  violations  as would not, individually or in the aggregate, have a Material
Adverse  Effect.  The  business of the Company and its Subsidiaries is not being
conducted  in  violation  of  any  laws,  ordinances  or  regulations  of  any
governmental  entity,  except for possible violations which singularly or in the
aggregate  do  not  and  will  not  have a Material Adverse Effect.  Neither the
Company nor any of its Subsidiaries is required under federal, state, foreign or
local  law, rule or regulation 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 the
Transaction  Documents  or  issue  and  sell  the  Debentures, the Warrants, the
Conversion  Shares and the Warrant Shares in


                                        6
<PAGE>
accordance with the terms hereof or thereof (other than any filings which may be
required  to  be  made  by  the Company with the Commission, The Nasdaq SmallCap
Market prior to or subsequent to the Closing, or state securities administrators
subsequent  to  the  Closing,  or  any registration statement which may be filed
pursuant  hereto).

          (f)     Commission  Documents, Financial Statements.  The Common Stock
                  -------------------------------------------
of  the  Company  is  registered  pursuant  to  Section  12(b)  or  12(g) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, except as
                                                  ------------
disclosed  on  Schedule 2.1(f) hereto, the Company has timely filed all reports,
               ---------------
schedules, forms, statements and other documents required to be filed by it with
the  Commission  pursuant  to  the  reporting  requirements of the Exchange Act,
including  material filed pursuant to Section 13(a) or 15(d) of the Exchange Act
(all  of the foregoing including filings incorporated by reference therein being
referred to herein as the "Commission Documents").  The Company has delivered or
                           --------------------
made  available  to  the  Purchasers  true and complete copies of the Commission
Documents filed with the Commission since January 14, 2002.  The Company has not
provided  to  the  Purchasers  any  material  non-public  information  or  other
information  which, according to applicable law, rule or regulation, should have
been  disclosed  publicly  by  the  Company but which has not been so disclosed,
other  than with respect to the transactions contemplated by this Agreement.  At
the  time  of each filing, the Form 10-K for the fiscal year ended September 30,
2001  (the  "Form  10-K") and the Form 10-Q for the fiscal period ended December
             ----------
31, 2001 (the "Form 10-Q"), respectively, complied in all material respects with
               ---------
the  requirements  of  the  Exchange  Act  and  the rules and regulations of the
Commission promulgated thereunder and other federal, state and local laws, rules
and  regulations  applicable  to  such documents, and the Form 10-K and the Form
10-Q  did not contain any untrue statement of a material fact or omit to state a
material  fact  required  to be stated therein or necessary in order to make the
statements  therein,  in  light of the circumstances under which they were made,
not  misleading.  As  of their respective dates, the financial statements of the
Company  included  in the Commission Documents comply as to form in all material
respects  with  applicable  accounting  requirements and the published rules and
regulations  of  the  Commission  or other applicable rules and regulations with
respect  thereto.  Such  financial  statements  have been prepared in accordance
with  generally  accepted accounting principles ("GAAP") applied on a consistent
                                                  ----
basis  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 not include footnotes or may be
condensed  or  summary  statements), and fairly present in all material respects
the  financial  position  of  the  Company  and its Subsidiaries as of the dates
thereof  and the results of operations and cash flows for the periods then ended
(subject,  in  the  case  of  unaudited  statements,  to  normal  year-end audit
adjustments).

          (g)     Subsidiaries.  Schedule  2.1(g)  hereto  set  forth  each
                  ------------   ----------------
Subsidiary  of  the  Company,  showing  the jurisdiction of its incorporation or
organization  and  showing  the  percentage  of  each  person's ownership of the
outstanding  stock  or  other interests of such Subsidiary.  For the purposes of
this Agreement, "Subsidiary" shall mean any corporation or other entity of which
                 ----------
at  least  a  majority  of  the  securities  or  other ownership interest having
ordinary voting power (absolutely or contingently) for the election of directors
or  other persons performing similar functions are at the time owned directly or
indirectly  by  the  Company  and/or  any of its other Subsidiaries.  All of the
outstanding shares of capital stock of each Subsidiary have been duly authorized
and  validly  issued,  and  are  fully  paid  and  nonassessable.  There  are no


                                        7
<PAGE>
outstanding  preemptive,  conversion  or  other  rights,  options,  warrants  or
agreements  granted or issued by or binding upon any Subsidiary for the purchase
or  acquisition  of  any  shares of capital stock of any Subsidiary or any other
securities  convertible  into,  exchangeable  for  or  evidencing  the rights to
subscribe  for  any  shares  of such capital stock.  Neither the Company nor any
Subsidiary  is subject to any obligation (contingent or otherwise) to repurchase
or otherwise acquire or retire any shares of the capital stock of any Subsidiary
or any convertible securities, rights, warrants or options of the type described
in  the  preceding  sentence  except  as  set  forth  on Schedule 2.1(g) hereto.
                                                         ---------------
Neither  the  Company  nor any Subsidiary is party to, nor has any knowledge of,
any  agreement  restricting  the voting or transfer of any shares of the capital
stock  of  any  Subsidiary.

          (h)     No  Material  Adverse  Change.  Since  December  31, 2001, the
                  -----------------------------
Company  has  not experienced or suffered any Material Adverse Effect, except as
disclosed  on  Schedule  2.1(h)  hereto.
               ----------------

          (i)     No  Undisclosed  Liabilities.  Neither  the Company nor any of
                  ----------------------------
its  Subsidiaries  has  any  liabilities, obligations, claims or losses (whether
liquidated  or unliquidated, secured or unsecured, absolute, accrued, contingent
or  otherwise) other than those incurred in the ordinary course of the Company's
or  its Subsidiaries respective businesses since December 31, 2001 and disclosed
to  the  Purchasers and which, individually or in the aggregate, do not or would
not  have  a  Material  Adverse  Effect  on  the  Company  or  its Subsidiaries.

          (j)     No  Undisclosed  Events  or Circumstances.  Since December 31,
                  -----------------------------------------
2001,  except  as  disclosed on Schedule 2.1(j) hereto, no event or circumstance
                                ---------------
has  occurred or exists with respect to the Company or its Subsidiaries or their
respective businesses, properties, prospects, operations or financial condition,
which,  under  applicable law, rule or regulation, requires public disclosure or
announcement  by  the  Company  but  which has not been so publicly announced or
disclosed.

          (k)     Indebtedness.  Schedule  2.1(k)  hereto  sets  forth as of the
                  ------------   ----------------
date hereof all outstanding secured and unsecured Indebtedness of the Company or
any Subsidiary, or for which the Company or any Subsidiary has commitments.  For
the  purposes  of  this Agreement, "Indebtedness" shall mean (a) any liabilities
                                    ------------
for  borrowed  money  or  amounts  owed  in excess of $100,000 (other than trade
accounts  payable  incurred  in  the  ordinary  course  of  business),  (b)  all
guaranties,  endorsements  and  other  contingent  obligations  in  respect  of
Indebtedness  of  others,  whether or not the same are or should be reflected in
the  Company's  balance  sheet (or the Debentures thereto), except guaranties by
endorsement  of  negotiable  instruments  for  deposit  or collection or similar
transactions  in  the  ordinary course of business; and (c) the present value of
any  lease  payments  in  excess  of  $100,000  due  under leases required to be
capitalized  in  accordance  with GAAP.  Except as disclosed on Schedule 2.1(k),
                                                                ---------------
neither  the  Company  nor  any  Subsidiary  is  in  default with respect to any
Indebtedness.

          (l)     Title to Assets.  Each of the Company and the Subsidiaries has
                  ---------------
good  and  marketable  title  to all of its real and personal property, free and
clear  of  any  mortgages,  pledges, charges, liens, security interests or other
encumbrances  of  any  nature whatsoever, except for those indicated on Schedule
                                                                        --------
2.1(l)  hereto  or  such  that,  individually or in the aggregate, do not
------


                                        8
<PAGE>
have  a  Material Adverse Effect. All said leases of the Company and each of its
Subsidiaries  are  valid  and  subsisting  and  in  full  force  and  effect.

          (m)     Actions  Pending.  There  is  no  action,  suit,  claim,
                  ----------------
investigation,  arbitration,  alternate  dispute  resolution proceeding or other
proceeding  pending  or, to the knowledge of the Company, threatened against the
Company  or any Subsidiary which questions the validity of this Agreement or any
of  the  other  Transaction  Documents  or  any of the transactions contemplated
hereby or thereby or any action taken or to be taken pursuant hereto or thereto.
Except  as set forth on Schedule 2.1(m) hereto, there is no action, suit, claim,
                        ---------------
investigation,  arbitration,  alternate  dispute resolution proceeding or  other
proceeding  pending  or, to the knowledge of the Company, threatened, against or
involving  the  Company, any Subsidiary or any of their respective properties or
assets,  which  individually  or in the aggregate, would have a Material Adverse
Effect.  There  are  no  outstanding  orders,  judgments, injunctions, awards or
decrees  of any court, arbitrator or governmental or regulatory body against the
Company  or  any  Subsidiary  or  any  officers  or  directors of the Company or
Subsidiary  in their capacities as such, which individually or in the aggregate,
would  have  a  Material  Adverse  Effect.

          (n)     Compliance  with  Law.  The  business  of  the Company and the
                  ---------------------
Subsidiaries  has  been  and is presently being conducted in accordance with all
applicable  federal,  state  and local governmental laws, rules, regulations and
ordinances,  except  as  set  forth  on  Schedule  2.1(n)  hereto  or such that,
                                         ----------------
individually  or  in the aggregate, the noncompliance therewith would not have a
Material  Adverse  Effect.  The  Company  and  each of its Subsidiaries have all
franchises,  permits,  licenses,  consents  and other governmental or regulatory
authorizations  and  approvals  necessary for the conduct of its business as now
being  conducted  by  it unless the failure to possess such franchises, permits,
licenses,  consents  and  other  governmental  or  regulatory authorizations and
approvals, individually or in the aggregate, could not reasonably be expected to
have  a  Material  Adverse  Effect.

          (o)     Taxes.  Except  as  set  forth  on Schedule 2.1(o) hereto, the
                  -----                              ---------------
Company  and  each  of  the  Subsidiaries  has accurately prepared and filed all
federal, state and other tax returns required by law to be filed by it, has paid
or  made  provisions  for  the  payment  of  all  taxes  shown to be due and all
additional  assessments,  and adequate provisions have been and are reflected in
the  financial  statements  of  the Company and the Subsidiaries for all current
taxes  and  other  charges to which the Company or any Subsidiary is subject and
which are not currently due and payable.  Except as disclosed on Schedule 2.1(o)
                                                                 ---------------
hereto,  none of the federal income tax returns of the Company or any Subsidiary
have been audited by the Internal Revenue Service.  The Company has no knowledge
of  any additional assessments, adjustments or contingent tax liability (whether
federal  or  state)  of  any  nature  whatsoever,  whether pending or threatened
against  the  Company or any Subsidiary for any period, nor of any basis for any
such  assessment,  adjustment  or  contingency.

          (p)     Certain  Fees.  Except as set forth on Schedule 2.1(p) hereto,
                  -------------                          ---------------
the  Company has not employed any broker or finder or incurred any liability for
any  brokerage  or  investment  banking  fees, commissions, finders' structuring
fees,  financial  advisory  fees  or  other  similar fees in connection with the
Transaction  Documents.


                                        9
<PAGE>
          (q)     Disclosure.  To  the  best of the Company's knowledge, neither
                  ----------
this  Agreement or the Schedules hereto nor any other documents, certificates or
instruments  furnished  to  the Purchasers by or on behalf of the Company or any
Subsidiary  in  connection  with the transactions contemplated by this Agreement
contain any untrue statement of a material fact or omit to state a material fact
necessary  in  order to make the statements made herein or therein, in the light
of  the  circumstances  under  which  they  were  made  herein  or  therein, not
misleading.

          (r)     Operation  of  Business.  The  Company  and  each  of  the
                  -----------------------
Subsidiaries owns or possesses all patents, trademarks, domain names (whether or
not  registered)  and  any  patentable  improvements or copyrightable derivative
works  thereof,  websites  and  intellectual  property  rights relating thereto,
service  marks, trade names, copyrights, licenses and authorizations, including,
but  not limited to, those listed on Schedule 2.1(r) hereto, and all rights with
                                     ---------------
respect to the foregoing, which are necessary for the conduct of its business as
now  conducted  without  any  conflict  with  the  rights  of  others.

          (s)     Environmental  Compliance.  Except  as  disclosed  on Schedule
                  -------------------------                             --------
2.1(s)  hereto,  the  Company  and  each  of  its Subsidiaries have obtained all
------
material  approvals, authorization, certificates, consents, licenses, orders and
permits or other similar authorizations of all governmental authorities, or from
any  other  person,  that  are required under any  Environmental Laws.  Schedule
                                                                        --------
2.1(s) hereto sets forth all material permits, licenses and other authorizations
------
issued  under  any  Environmental  Laws  to  the  Company  or  its Subsidiaries.
"Environmental  Laws"  shall mean all applicable laws relating to the protection
---------------------
of the environment including, without limitation, all requirements pertaining to
reporting,  licensing,  permitting,  controlling,  investigating  or remediating
emissions,  discharges, releases or threatened releases of hazardous substances,
chemical  substances, pollutants, contaminants or toxic substances, materials or
wastes, whether solid, liquid or gaseous in nature, into the air, surface water,
groundwater  or  land, or relating to the manufacture, processing, distribution,
use,  treatment,  storage,  disposal,  transport  or  handling  of  hazardous
substances,  chemical  substances, pollutants, contaminants or toxic substances,
material  or  wastes, whether solid, liquid or gaseous in nature.  Except as set
forth  on  Schedule  2.1(s)  hereto,  the Company has all necessary governmental
           ----------------
approvals  required  under all Environmental Laws and used in its business or in
the  business  of  any  of  its  Subsidiaries.  The  Company  and  each  of  its
Subsidiaries  are  also  in compliance with all other limitations, restrictions,
conditions,  standards,  requirements,  schedules  and  timetables  required  or
imposed  under  all  Environmental Laws.  Except for such instances as would not
individually  or  in  the aggregate have a Material Adverse Effect, there are no
past  or  present  events,  conditions,  circumstances,  incidents,  actions  or
omissions  relating  to  or in any way affecting the Company or its Subsidiaries
that  violate or may violate any Environmental Law after the Closing or that may
give  rise  to  any  environmental liability, or otherwise form the basis of any
claim,  action,  demand,  suit,  proceeding, hearing, study or investigation (i)
under  any  Environmental  Law,  or (ii) based on or related to the manufacture,
processing,  distribution,  use,  treatment,  storage  (including,  without
limitation,  underground storage tanks), disposal, transport or handling, or the
emission,  discharge,  release or threatened release of any hazardous substance.
"Environmental  Liabilities"  means  all  liabilities  of a person (whether such
 --------------------------
liabilities  are  owed by such person to governmental authorities, third parties
or  otherwise)  whether  currently in existence or arising hereafter which arise
under  or  relate  to  any  Environmental  Law.


                                       10
<PAGE>
          (t)     Books  and Records; Internal Accounting Controls.  The records
                  ------------------------------------------------
and  documents  of  the  Company  and its Subsidiaries accurately reflect in all
material  respects  the  information relating to the business of the Company and
the Subsidiaries, the location and collection of their assets, and the nature of
all  transactions  giving  rise to the obligations or accounts receivable of the
Company  or any Subsidiary.  The Company and each of its Subsidiaries maintain a
system  of  internal  accounting  controls  sufficient,  in  the judgment of the
Company's  board  of  directors,  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, (iii) access to
assets  is  permitted  only  in accordance with management's general or specific
authorization  and  (iv) the recorded accountability for assets is compared with
the  existing  assets  at reasonable intervals and appropriate actions are taken
with  respect  to  any  differences.

          (u)     Material Agreements.  Except for the Transaction Documents and
                  -------------------
as  set  forth on Schedule 2.1(u) hereto, neither the Company nor any Subsidiary
                  ---------------
is  a  party to any written or oral contract, instrument, agreement, commitment,
obligation,  plan  or arrangement, a copy of which would be required to be filed
with  the Commission (collectively, "Material Agreements") if the Company or any
                                     -------------------
Subsidiary  were registering securities under the Securities Act.    The Company
and  each  of  its  Subsidiaries  has in all material respects performed all the
obligations  required  to  be  performed  by  them  to  date under the foregoing
agreements, have received no notice of default and, to the best of the Company's
knowledge  are  not  in  default under any Material Agreement now in effect, the
result  of  which  could  cause  a  Material Adverse Effect.  No written or oral
contract,  instrument, agreement, commitment, obligation, plan or arrangement of
the  Company  or of any Subsidiary limits or shall limit the payment of interest
on  the  Debentures,  or  dividends  on  its  Common  Stock.

          (v)     Transactions with Affiliates.  Except as set forth on Schedule
                  ----------------------------                          --------
2.1(v)  hereto,  there  are  no  loans,  leases,  agreements, contracts, royalty
------
agreements,  management  contracts  or  arrangements  or  other  continuing
transactions  between (a) the Company, any Subsidiary or any of their respective
customers  or suppliers on the one hand, and (b) on the other hand, any officer,
employee,  consultant or director of the Company, or any of its Subsidiaries, or
any  person  owning  any  capital  stock of the Company or any Subsidiary or any
member  of  the immediate family of such officer, employee, consultant, director
or  stockholder  or  any corporation or other entity controlled by such officer,
employee,  consultant,  director  or  stockholder,  or a member of the immediate
family  of  such  officer,  employee,  consultant,  director  or  stockholder.

          (w)     Securities  Act  of  1933.  The  Company has complied and will
                  -------------------------
comply  with all applicable federal and state securities laws in connection with
the  offer,  issuance  and  sale of the Debentures, the Warrants, the Conversion
Shares  and the Warrant Shares hereunder.  Neither the Company nor anyone acting
on  its  behalf,  directly  or  indirectly,  has  or will sell, offer to sell or
solicit  offers  to  buy  any  of  the  Securities, or similar securities to, or
solicit  offers  with  respect  thereto  from,  or  enter  into  any preliminary
conversations or negotiations relating thereto with, any person, or has taken or
will  take  any  action  so  as  to  bring  the  issuance and sale of any of the
Securities  under  the  registration  provisions  of  the  Securities  Act  and
applicable  state  securities  laws.  Neither  the  Company  nor  any  of  its
affiliates,  nor  any  person  acting on its or their behalf,


                                       11
<PAGE>
has  engaged  in any form of general solicitation or general advertising (within
the  meaning  of  Regulation  D under the Securities Act) in connection with the
offer  or  sale  of  any  of  the  Securities.

          (x)  Governmental  Approvals.  Except  as  set  forth  on  Schedule
               -----------------------                               --------
2.1(x)  hereto,  and  except for the filing of any notice prior or subsequent to
------
the  Closing  that  may  be  required  under  applicable  state  and/or  federal
securities  laws  (which  if  required,  shall  be  filed on a timely basis), no
authorization,  consent, approval, license, exemption of, filing or registration
with  any court or governmental department, commission, board, bureau, agency or
instrumentality,  domestic  or  foreign,  is  or  will  be  necessary for, or in
connection  with,  the execution or delivery of the Debentures and the Warrants,
or  for  the performance by the Company of its obligations under the Transaction
Documents.

          (y)  Employees.  Neither  the  Company  nor  any  Subsidiary  has  any
               ---------
collective  bargaining arrangements or agreements covering any of its employees.
Except  as  set  forth  on  Schedule  2.1(y) hereto, neither the Company nor any
                            ----------------
Subsidiary  has  any  employment  contract,  agreement  regarding  proprietary
information,  non-competition  agreement,  non-solicitation  agreement,
confidentiality  agreement,  or  any  other  similar  contract  or  restrictive
covenant,  relating  to  the  right of any officer, employee or consultant to be
employed or engaged by the Company or such Subsidiary.  Since December 31, 2001,
no  officer,  consultant  or key employee of the Company or any Subsidiary whose
termination,  either  individually  or  in  the aggregate, could have a Material
Adverse  Effect,  has  terminated  or,  to the knowledge of the Company, has any
present  intention  of  terminating his or her employment or engagement with the
Company  or  any  Subsidiary.

          (z)  Absence  of  Certain  Developments.  Except  as  set  forth  on
               ----------------------------------
Schedule  2.1(z)  hereto,  since  December 31, 2001, neither the Company nor any
----------------
Subsidiary  has:


               (i)  issued any stock, bonds or other corporate securities or any
rights,  options  or  warrants  with  respect  thereto;

              (ii)  borrowed  any  amount  or  incurred or become subject to any
liabilities  (absolute or contingent) except current liabilities incurred in the
ordinary  course  of  business  which are comparable in nature and amount to the
current  liabilities  incurred  in  the  ordinary  course of business during the
comparable  portion of its prior fiscal year, as adjusted to reflect the current
nature  and  volume  of  the  Company's  or  such  Subsidiary's  business;

             (iii)  discharged or satisfied any lien or encumbrance or paid any
obligation or liability (absolute or contingent), other than current liabilities
paid  in  the  ordinary  course  of  business;

              (iv)  declared  or  made  any  payment  or distribution of cash or
other  property  to  stockholders  with  respect  to  its stock, or purchased or
redeemed,  or  made  any  agreements so to purchase or redeem, any shares of its
capital  stock;


                                       12
<PAGE>
               (v)  sold,  assigned or transferred any other tangible assets, or
canceled  any  debts  or  claims,  except  in  the  ordinary course of business;

              (vi)  sold, assigned or transferred any patent rights, trademarks,
trade  names,  copyrights,  trade  secrets  or  other  intangible  assets  or
intellectual  property  rights,  or  disclosed  any  proprietary  confidential
information  to  any  person except in the ordinary course of business or to the
Purchasers  or  its  representatives;

             (vii)  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  prospective  business;

            (viii)  made  any  changes  in  employee  compensation except in the
ordinary  course  of  business  and  consistent  with  past  practices;

              (ix)  made  capital  expenditures  or  commitments  therefor  that
aggregate  in  excess  of  $100,000;

               (x)  entered  into  any  other  transaction  other  than  in  the
ordinary  course  of  business,  or entered into any other material transaction,
whether  or  not  in  the  ordinary  course  of  business;

              (xi)  made  charitable  contributions  or  pledges  in  excess  of
$100,000;

             (xii)  suffered any material damage, destruction or casualty loss,
whether  or  not  covered  by  insurance;

            (xiii)  experienced any material problems with labor or management
in  connection  with  the  terms  and  conditions  of  their  employment;

             (xiv)  effected any two or more events of the foregoing kind which
in  the  aggregate  would  cause  a  Material  Adverse  Effect;  or

              (xv)  entered into an agreement, written or otherwise, to take any
of  the  foregoing  actions.


          (aa) Use  of  Proceeds.  The proceeds from the sale of the Debentures
               -----------------
and the Warrant Shares will be used by the Company to repay its outstanding bank
Indebtedness  and  the  remainder,  if  any,  shall  be used for working capital
purposes  subject  to  the  prior written consent of a majority of the principal
amount  of  the  Debentures  outstanding  at  the  time  consent  is  required.
Notwithstanding  the foregoing, the proceeds from the sale of the Debentures and
the  Warrant  Shares shall not be used to repay any (i) outstanding Indebtedness
or  any  loans to officer, director, affiliate or insider of the Company or (ii)
Accounts  Payable.  For purposes of this Section 2.1(aa), Accounts Payable shall
mean  short-term  amounts  owed  to  external  vendors for goods and/or services
purchased.


                                       13
<PAGE>
          (bb) Public  Utility  Holding  Company  Act and Investment Company Act
               -----------------------------------------------------------------
Status.  The Company is not a "holding company" or a "public utility company" as
------
such  terms  are  defined  in the Public Utility Holding Company Act of 1935, as
amended.  The  Company  is  not, and as a result of and immediately upon Closing
will not be, an "investment company" or a company "controlled" by an "investment
company,"  within the meaning of the Investment Company Act of 1940, as amended.

          (cc) ERISA.  No liability to the Pension Benefit Guaranty Corporation
               -----
has  been  incurred  with  respect  to  any  Plan  by  the Company or any of its
Subsidiaries  which  is  or would cause a Material Adverse Effect. The execution
and  delivery  of  this  Agreement and the issue and sale of the Debentures, the
Conversion  Shares and the Warrant Shares will not involve any transaction which
is  subject  to  the  prohibitions of Section 406 of ERISA or in connection with
which  a  tax  could be imposed pursuant to Section 4975 of the Internal Revenue
Code  of  1986,  as  amended,  provided that, if any Purchaser, or any person or
entity that owns a beneficial interest in any Purchaser, is an "employee pension
benefit  plan"  (within  the  meaning  of Section 3(2) of ERISA) with respect to
which  the Company is a "party in interest" (within the meaning of Section 3(14)
of  ERISA),  the  requirements  of  Sections  407(d)(5)  and 408(e) of ERISA, if
applicable, are met. As used in this Section 2.1(cc), the term "Plan" shall mean
an  "employee  pension benefit plan" (as defined in Section 3 of ERISA) which is
or  has  been  established  or maintained, or to which contributions are or have
been made, by the Company or any Subsidiary or by any trade or business, whether
or  not  incorporated,  which,  together  with the Company or any Subsidiary, is
under  common  control,  as  described  in  Section  414(b)  or (c) of the Code.

          (dd) Dilutive  Effect.  The  Company  understands  and  acknowledges
               ----------------
that  the number of Conversion Shares issuable upon conversion of the Debentures
and  the  Warrant Shares issuable upon exercise of the Warrants will increase in
certain  circumstances.  The Company further acknowledges that its obligation to
issue  Conversion  Shares  upon  conversion of the Debentures in accordance with
this Agreement and its obligations to issue the Warrant Shares upon the exercise
of  the Warrants in accordance with this Agreement and the Warrants, is, in each
case,  absolute  and  unconditional  regardless of the dilutive effect that such
issuance  may  have  on  the  ownership  interest  of  other stockholders of the
Company.

          (ee) Delisting  Notification.  The  Company  has  not  received  a
               -----------------------
delisting  notification  from  The  Nasdaq  SmallCap  Market.

          Section  2.2     Representations and Warranties of the Purchasers.
                           ------------------------------------------------
Each of the Purchasers hereby makes the following representations and warranties
to  the  Company with respect solely to itself and not with respect to any other
Purchaser:

          (a)  Organization  and  Standing  of  the Purchasers. If the Purchaser
               -------------------------------------------
is  an  entity,  such  Purchaser  is a corporation, limited liability company or
partnership  duly  incorporated  or  organized,  validly  existing  and  in good
standing  under  the  laws  of  the  jurisdiction  of  its  incorporation  or
organization.

          (b)  Authorization  and  Power.  Each  Purchaser  has  the  requisite
               -------------------------
power  and  authority to enter into and perform the Transaction Documents and to
purchase the Debentures and Warrants being sold to it hereunder.  The execution,
delivery  and performance of the


                                       14
<PAGE>
Transaction  Documents  by  each  Purchaser  and  the  consummation by it of the
transactions  contemplated  hereby  have  been  duly authorized by all necessary
corporate or partnership action, and no further consent or authorization of such
Purchaser  or its Board of Directors, stockholders, or partners, as the case may
be, is required. This Agreement has been duly authorized, executed and delivered
by  each  Purchaser.  The  other  Transaction  Documents  constitute,  or  shall
constitute  when executed and delivered, a valid and binding obligations of each
Purchaser  enforceable  against  such  Purchaser in accordance with their terms,
except  as  such  enforceability  may  be  limited  by  applicable  bankruptcy,
insolvency,  reorganization,  moratorium,  liquidation,  conservatorship,
receivership or similar laws relating to, or affecting generally the enforcement
of,  creditor's  rights and remedies or by other equitable principles of general
application.

          (c)  Acquisition  for  Investment.  Each  Purchaser  is purchasing the
               ----------------------------
Debentures and acquiring the Warrants solely for its own account for the purpose
of  investment  and  not  with  a  view  to  or  for  sale  in  connection  with
distribution.  Each  Purchaser  does not have a present intention to sell any of
the  Securities,  nor  a present arrangement (whether or not legally binding) or
intention  to effect any distribution of any of the Securities to or through any
person  or  entity; provided, however, that by making the representations herein
                    --------  -------
and  subject  to Section 2.2(e) below, each Purchaser does not agree to hold any
of  the Securities for any minimum or other specific term and reserves the right
to  dispose  of any of the Securities at any time in accordance with federal and
state  securities  laws  applicable  to  such  disposition.  Each  Purchaser
acknowledges  that  it  (i)  has  such knowledge and experience in financial and
business  matters  such  that  Purchaser is capable of evaluating the merits and
risks  of  Purchaser's  investment  in  the Company and is (ii) able to bear the
financial  risks  associated with an investment in the Securities and (iii) that
it  has  been  given  full  access  to  such  records  of  the  Company  and the
Subsidiaries  and  to the officers of the Company and the Subsidiaries as it has
deemed  necessary  or  appropriate  to  conduct its due diligence investigation.

          (d)  Rule  144.  Each  Purchaser  understands that the Securities must
               ---------
be  held indefinitely unless such Securities are registered under the Securities
Act or an exemption from registration is available.  Each Purchaser acknowledges
that  such  person is familiar with Rule 144 of the rules and regulations of the
Commission, as amended, promulgated pursuant to the Securities Act ("Rule 144"),
                                                                     --------
and  that  such  Purchaser  has  been advised that Rule 144 permits resales only
under certain circumstances.  Each Purchaser understands that to the extent that
Rule  144 is not available, such Purchaser will be unable to sell any Securities
without either registration under the Securities Act or the existence of another
exemption  from  such  registration  requirement.

          (e)  General.  Each  Purchaser  understands  that  the  Securities are
               -------
being  offered  and  sold  in  reliance  on  a  transactional exemption from the
registration  requirements  of federal and state securities laws and the Company
is  relying  upon  the  truth  and  accuracy of the representations, warranties,
agreements,  acknowledgments  and  understandings  of  such  Purchaser set forth
herein  in  order  to  determine  the  applicability  of such exemptions and the
suitability  of  such  Purchaser  to  acquire  the  Securities.  Each  Purchaser
understands  that  no United States federal or state agency or any government or
governmental agency has passed upon or made any recommendation or endorsement of
the  Securities.


                                       15
<PAGE>
          (f)  Opportunities  for  Additional  Information.  Each  Purchaser
               -------------------------------------------
acknowledges that such Purchaser has had the opportunity to ask questions of and
receive  answers  from,  or  obtain  additional  information from, the executive
officers  of  the  Company  concerning  the  financial  and other affairs of the
Company,  and  to  the  extent  deemed  necessary  in  light of such Purchaser's
personal  knowledge  of  the  Company's  affairs,  such Purchaser has asked such
questions  and  received answers to the full satisfaction of such Purchaser, and
such  Purchaser  desires  to  invest  in  the  Company.

          (g)  No  General  Solicitation.  Each  Purchaser acknowledges that the
               -------------------------
Securities were not offered to such Purchaser by means of any form of general or
public  solicitation  or  general  advertising,  or  publicly  disseminated
advertisements  or  sales  literature, including (i) any advertisement, article,
notice  or  other communication published in any newspaper, magazine, or similar
media,  or broadcast over television or radio, or (ii) any seminar or meeting to
which  such  Purchaser  was  invited  by  any  of  the  foregoing  means  of
communications.

          (h)  Accredited  Investor.  Each  Purchaser  is  a  sophisticated
               --------------------
investor  (as  described in Rule 506(b)(2)(ii) of Regulation D) or an accredited
investor  (as  defined in Rule 501 of Regulation D), and such Purchaser has such
experience  in  business  and financial matters that it is capable of evaluating
the  merits  and  risks  of an investment in the Securities.  Each Purchaser has
been  represented  by  sophisticated and able legal counsel or its choice.  Each
Purchaser  acknowledges  that an investment in the Securities is speculative and
involves  a  high  degree  of  risk.

          (i)  Not  an  Affiliate.  The Purchaser is not an officer, director
               ------------------
or "affiliate" (as that term is defined in Rule 405 of Regulation C, promulgated
under  the  Securities  Act)  of  the  Company.


                                  ARTICLE III

                                    COVENANTS

     The  Company  covenants with each Purchaser as follows, which covenants are
for  the  benefit  of  each  Purchaser and their respective permitted assignees.

          Section  3.1     Securities  Compliance.  The Company shall notify the
                           ----------------------
Commission  in  accordance with their rules and regulations, of the transactions
contemplated  by  any  of  the  Transaction  Documents  and shall take all other
necessary  action and proceedings as may be required and permitted by applicable
law,  rule and regulation, for the legal and valid issuance of the Securities to
the  Purchasers,  or  their  respective  subsequent  holders.

          Section  3.2     Registration and Listing.  The Company will cause its
                           ------------------------
Common  Stock  to continue to be registered under Sections 12(b) or 12(g) of the
Exchange  Act,  will  comply  in  all  respects  with  its  reporting and filing
obligations under the Exchange Act, will comply with all requirements related to
any  registration  statement filed pursuant to this Agreement, and will not take
any  action or file any document (whether or not permitted by the Securities Act
or  the  rules promulgated thereunder) to terminate or suspend such registration
or  to  terminate  or  suspend  its  reporting  and filing obligations under the
Exchange  Act  or Securities Act, except as permitted herein.  The Company shall
take all action necessary to continue the


                                       16
<PAGE>
listing  or  trading  of  its  Common Stock on The Nasdaq SmallCap Market or any
successor  market. The Company will promptly file the "Listing Application" for,
or  in  connection  with, the issuance and delivery of the Conversion Shares and
the  Warrant  Shares.

          Section  3.3     Inspection  Rights.  The Company shall permit, during
                           ------------------
normal  business  hours  and  upon  reasonable  request and reasonable notice, a
Purchaser  or  any  employees,  agents  or representatives thereof, so long as a
Purchaser  shall  be  obligated  hereunder  to  purchase the Debentures or shall
beneficially  own the Debentures, or shall own Conversion Shares, Warrant Shares
or  the  Warrants  to purchase Warrant Shares which, in the aggregate, represent
more  than  two  percent  (2%)  of the total combined voting power of all voting
securities  then  outstanding,  to  examine  and  make  reasonable copies of and
extracts from the records and books of account of, and visit and inspect, during
the  term of the Debentures and Warrants, the properties, assets, operations and
business of the Company and any Subsidiary, and to discuss the affairs, finances
and  accounts  of  the  Company  and  any  Subsidiary  with any of its officers,
consultants,  directors,  and  key  employees.

          Section  3.4     Compliance  with Laws.  The Company shall comply, and
                           ---------------------
cause  each  Subsidiary  to comply, with all applicable laws, rules, regulations
and  orders,  noncompliance  with  which  could  have a Material Adverse Effect.

          Section  3.5     Keeping of Records and Books of Account.  The Company
                           ---------------------------------------
shall  keep  and  cause  each  Subsidiary  to keep adequate records and books of
account,  in  which  complete  entries  will  be  made  in  accordance with GAAP
consistently  applied,  reflecting all financial transactions of the Company and
its  Subsidiaries,  and  in which, for each fiscal year, all proper reserves for
depreciation,  depletion, obsolescence, amortization, taxes, bad debts and other
purposes  in  connection  with  its  business  shall  be  made.

          Section  3.6     Reporting  Requirements.  The  Company  shall furnish
                           -----------------------
three  (3)  copies of the following to the Purchasers in a timely manner so long
as  the  Purchasers  shall  be obligated hereunder to purchase the Debentures or
shall  beneficially  own  the  Debentures  or  Warrants, or shall own Conversion
Shares  or  Warrant  Shares  which,  in  the  aggregate, represent more than one
percent  (1%)  of  the total combined voting power of all voting securities then
outstanding:

          (a)  Quarterly  Reports  filed  with  the  Commission  on Form 10-Q as
soon as available, and in any event within forty-five (45) days after the end of
each  of  the  first  three  (3)  fiscal  quarters  of  the  Company;

          (b)  Annual  Reports  filed  with  the Commission on Form 10-K as soon
as  available,  and in any event within one hundred six (106) days after the end
of  each  fiscal  year  of  the  Company;  and

          (c)  Copies  of  all  notices  and  information,  including  without
limitation  notices  and  proxy statements in connection with any meetings, that
are  provided  to  holders of shares of Common Stock, contemporaneously with the
delivery  of  such  notices  or  information  to  such  holders of Common Stock.


                                       17
<PAGE>
          Section  3.7     Amendments.  The Company shall not amend or waive any
                           ----------
provision  of  the  Articles  or  Bylaws  of  the  Company in any way that would
adversely  affect  the  exercise  rights,  voting  rights,  prepayment rights or
redemption  rights  of  the  holder  of  the  Debentures  or  the  Warrants.

          Section  3.8     Other  Agreements.  The  Company shall not enter into
                           -----------------
any  agreement in which the terms of such agreement would restrict or impair the
right  or  ability  to  perform  of  the  Company  or  any  Subsidiary under any
Transaction  Document.

          Section  3.9     Distributions.  So  long  as  any  Debentures  remain
                           -------------
outstanding,  the  Company  agrees  that it shall not, without the prior written
consent  of  a majority of the Purchasers pursuant to Section 8.3, which consent
may be granted or denied in the sole discretion of the Purchasers (i) declare or
pay  any  dividends  (other  than  a  stock dividend or stock split) or make any
distributions  to  any  holder(s)  of Common Stock or (ii) purchase or otherwise
acquire  for  value,  directly  or  indirectly, any Common Stock or other equity
security  of  the  Company.

          Section  3.10     Subsequent  Financings;  Right  of  First  Refusal.
                            --------------------------------------------------
During  the  period  commencing  on  the Closing Date and ending sixty (60) days
after  the Effectiveness Date (as defined in the Registration Rights Agreement),
the  Company  covenants  and  agrees that it will not, without the prior written
consent  of  the holders of a majority of the principal amount of the Debentures
outstanding  at the time consent is required, enter into any subsequent offer or
sale  to,  or exchange with (or other type of distribution to), any third party,
of  Common Stock or any securities convertible, exercisable or exchangeable into
Common  Stock,  including  convertible  and  non-convertible  debt  securities
(collectively,  the  "Financing Securities"), the primary purpose of which would
                      --------------------
be  to  obtain  financing  for the Company (a "Subsequent Financing") where such
                                               --------------------
offer  or sale of Financing Securities is for an amount in excess of Two Million
Dollars  ($2,000,000);  provided,  however,  that  if  the Company consummates a
                        --------   -------
Subsequent  Financing prior to the sixtieth (60th) day immediately following the
Effectiveness Date, the Company shall not file a registration statement with the
Commission registering the shares of Common Stock issued or issuable pursuant to
such  Subsequent  Financing before the Registration Statement (as defined in the
Registration  Rights  Agreement)  has been declared effective by the Commission.
For  purposes  of this Agreement, a Permitted Financing (as defined hereinafter)
shall  not  be considered a Subsequent Financing.  A "Permitted Financing" shall
mean  any  transaction of the Company involving (1) shares of Common Stock to be
issued  (other  than  for  cash)  in  connection  with a strategic merger and/or
acquisition,  consolidation,  sale or disposition of assets; (2) the issuance of
securities  in  exchange  for  assets;  (3) a public firm commitment offering at
market;  and  (4)  shares of Common Stock or the issuance of options to purchase
shares  of  Common  Stock  to  employees,  officers,  directors, consultants and
vendors  in  accordance  with  the  Company's  existing employee stock ownership
plans.

          (b)  For  a  period  of  twenty-four  (24)  months  following  the
Effectiveness  Date  (as  defined  in  the  Registration  Rights Agreement), the
Company covenants and agrees to promptly notify (in no event later than five (5)
days  after  making  or  receiving  an  applicable  offer) in writing (a "Rights
                                                                          ------
Notice")  Intercoastal  Financial  Services Corp. ("Intercoastal"), on behalf of
                                                    ------------
the  Purchasers,  of any proposed Subsequent Financing.  The Rights Notice shall
describe,  in  reasonable  detail,  the  terms  and  conditions  of the proposed
Subsequent  Financing,  the  proposed  closing date of the Subsequent Financing,


                                       18
<PAGE>
which  shall  be  within  twenty  (20) calendar days from the date of the Rights
Notice,  including, without limitation, all of the terms and conditions thereof.
The  Rights  Notice shall provide each Purchaser an option (the "Rights Option")
                                                                 -------------
during  the  ten  (10) trading days following delivery of the Rights Notice (the
"Option  Period")  to purchase such amount as the Company and each Purchaser may
 --------------
agree  to  up  to such Purchaser's pro rata portion of the Purchase Price of the
securities  being  offered  in  such  Subsequent Financing on the same, absolute
terms  and  conditions  as contemplated by such Subsequent Financing (the "First
                                                                           -----
Refusal  Rights").  If  any  Purchaser elects not to exercise its Rights Option,
---------------
Intercoastal  shall  have  the  right  to  place  the securities underlying such
Purchaser's  Rights  Option  with any third party. Delivery of any Rights Notice
constitutes a representation and warranty by the Company that there are no other
material  terms and conditions, arrangements, agreements or otherwise except for
those  disclosed in the Rights Notice, to provide additional compensation to any
party  participating  in  any  proposed Subsequent Financing, including, but not
limited  to,  additional  compensation based on changes in the Purchase Price or
any  type  of  reset or adjustment of a purchase or conversion price or to issue
additional  securities  at  any  time  after  the  closing  date of a Subsequent
Financing.  If  the  Company  does  not receive notice of exercise of the Rights
Option  from  any  of the Purchasers within the Option Period, the Company shall
have  the  right to close the Subsequent Financing on the scheduled closing date
with a third party; provided that all of the terms and conditions of the closing
                    --------
are  the  same as those provided to the Purchasers in the Rights Notice.  If the
closing  of  the  proposed Subsequent Financing does not occur on that date, any
closing  of  the  contemplated  Subsequent  Financing  or  any  other Subsequent
Financing  shall  be  subject  to  all  of  the provisions of this Section 3.10,
including,  without  limitation,  the  delivery  of  a  new  Rights  Notice.

          Section  3.11     Reservation of Shares.  So long as the Debentures or
                            ---------------------
Warrants  remain  outstanding, the Company shall take all action necessary to at
all times have authorized, and reserved for the purpose of issuance, 200% of the
maximum  number  of  shares  of  Common  Stock  to  effect the conversion of the
Debentures  and any interest accrued and outstanding thereon and exercise of the
Warrants.

          Section  3.12    Transfer Agent Instructions.  The Company shall issue
                           ---------------------------
irrevocable  instructions  to  its  transfer  agent, and any subsequent transfer
agent,  to issue certificates, registered in the name of the Purchasers or their
respective  nominee(s), for the Conversion Shares and the Warrant Shares in such
amounts  as  specified  from  time to time by the Purchasers to the Company upon
conversion of the Debentures or exercise of the Warrants, in the form of Exhibit
                                                                         -------
D  attached  hereto  (the  "Irrevocable Transfer Agent Instructions").  Prior to
-                           ---------------------------------------
registration  of  the  Conversion  Shares  and  the  Warrant  Shares  under  the
Securities  Act,  all  such  certificates  shall  bear  the  restrictive  legend
specified  in  Section  5.1  of  this  Agreement.  The  Company warrants that no
instruction  other  than the Irrevocable Transfer Agent Instructions referred to
in this Section 3.12 will be given by the Company to its transfer agent and that
the  Securities  shall otherwise be freely transferable on the books and records
of the Company as and to the extent provided in this Agreement.  Nothing in this
Section  3.12 shall affect in any way the Purchasers' obligations and agreements
set  forth  in  Section  5.1  to  comply with all applicable prospectus delivery
requirements,  if  any, upon the resale of the Conversion Shares and the Warrant
Shares.  If  a  Purchaser  provides  the  Company  with an acceptable opinion of
qualified  counsel,  in a generally acceptable form, substance and scope, to the
effect  that a public sale, assignment or transfer of the Securities may be made
without  registration  under  the  Securities  Act or the


                                       19
<PAGE>
Purchasers  provide  the  Company with acceptable reasonable assurances that the
Securities  can  be  sold pursuant to Rule 144 without any restriction as to the
number  of  securities  acquired  as  of  a  particular  date  that  can then be
immediately sold, the Company shall permit the transfer, and, in the case of the
Conversion  Shares  and the Warrant Shares, promptly instruct its transfer agent
to  issue  one  or  more  certificates in such name and in such denominations as
specified  by  the  Purchasers  and  without any restrictive legend. The Company
acknowledges that a breach by it of its obligations under this Section 3.12 will
cause  irreparable harm to the Purchasers 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 3.12 will
be  inadequate  and agrees, in the event of a breach or threatened breach by the
Company  of  the  provisions  of this Section 3.12, that the Purchasers shall be
entitled,  in  addition  to  all  other  available  remedies, to an order and/or
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.

          Section  3.13     Disposition  of  Assets.  So  long as the Debentures
                            -----------------------
remain  outstanding, neither the Company nor any Subsidiary shall sell, transfer
or  otherwise  dispose  of  any  of its properties, assets and rights including,
without limitation, its software and intellectual property, to any person except
for  sales  to  customers  in  the ordinary course of business or with the prior
written  consent  of  the  holders  of a majority of the principal amount of the
Debentures  then  outstanding.

          Section  3.14     Repayment  of  Other  Indebtedness.  So  long as the
                            ----------------------------------
Debentures  remain  outstanding, the Company shall not use the proceeds from the
sale  of  the  Securities  by the Company to repay any Indebtedness for borrowed
money  owed by the Company to any officer, director, affiliate or insider of the
Company.

          Section  3.15     Non-public Information.  Neither the Company nor any
                            ----------------------
of  its  officers  or  agents shall disclose any material non-public information
about  the Company to the Purchasers and neither the Purchasers nor any of their
affiliates,  officers or agents will solicit any material non-public information
from  the  Company.

          Section  3.16     Board  Membership.  So long as the Debentures remain
                            -----------------
outstanding,  Intercoastal  shall  have the right to appoint one (1) director to
serve  on  the  Company's  Board  of  Directors,  and the Company shall take all
actions  necessary  under  its  Certificate and Bylaws to permit Intercoastal to
appoint  said  director  to serve on the Company's Board of Directors as soon as
practicable,  but  in  no  event  later than twenty (20) business days after the
Closing  Date.  Further,  in  the event that a vacancy or vacancies occur on the
Board of Directors, Intercoastal shall be entitled to appoint a director to fill
one  (1)  vacant  seat  on  the  Board  of  Directors  .

          Section  3.17     Stockholder Approval or Nasdaq Waiver.  Prior to the
                            -------------------------------------
sixtieth  (60th) day following the Initial Closing Date, the Company must obtain
either  (a)  approval by the stockholders of the Maker of the proposal presented
and recommended by the Board of Directors of the Maker to approve the Purchasers
acquiring  in  excess  of  19.99% of the issued and outstanding shares of Common
Stock upon conversion of the Debentures and/or exercise of the Warrants or (b) a
waiver  by  the  Nasdaq  SmallCap  Market  (or  any  successor  entity)  of such


                                       20
<PAGE>
stockholder  approval  (a  "Nasdaq Waiver"), as required by the applicable rules
                            -------------
and  regulations  of  the  Nasdaq  SmallCap  Market  (or  any  successor entity)
applicable  to approve the issuance of share of Common Stock in excess of 19.99%
of  the  issued  and outstanding shares of Common Stock of the Maker pursuant to
the terms hereof; provided, however, that the Company must request such a Nasdaq
                  --------  -------
Waiver  no later than the fifth (5th) business day following the Initial Closing
Date.

                                   ARTICLE IV

                                   CONDITIONS

          Section  4.1     Conditions Precedent to the Obligation of the Company
                           -----------------------------------------------------
to  Close  and to Sell the Debentures and Warrants.  The obligation hereunder of
--------------------------------------------------
the  Company  to close and issue and sell the Debentures and the Warrants to the
Purchasers  at  the Closing Date is subject to the satisfaction or waiver, at or
before  the Closing of the conditions set forth below.  These conditions are for
the  Company's  sole benefit and may be waived by the Company at any time in its
sole  discretion.

          (a)     Accuracy  of  the  Purchasers' Representations and Warranties.
                  -------------------------------------------------------------
The  representations  and  warranties  of  each  the Purchaser shall be true and
correct  in all material respects as of the date when made and as of the Closing
Date as though made at that time, except for representations and warranties that
are  expressly  made as of a particular date, which shall be true and correct in
all  material  respects  as  of  such  date.

          (b)     Performance  by  the  Purchasers.  Each  Purchaser  shall have
                  --------------------------------
performed,  satisfied  and complied in all material respects with all covenants,
agreements  and conditions required by this Agreement to be performed, satisfied
or  complied  with  by  the  Purchasers  at  or  prior  to  the  Closing  Date.

          (c)     No Injunction.  No statute, rule, regulation, executive order,
                  -------------
decree,  ruling  or  injunction shall have been enacted, entered, promulgated or
endorsed  by any court or governmental authority of competent jurisdiction which
prohibits  the  consummation  of  any  of  the transactions contemplated by this
Agreement.

          (d)     Delivery  of  Purchase  Price.  The  Purchase  Price  for  the
                  -----------------------------
Debentures  and  Warrants has been delivered to the Company at the Closing Date.

          (e)     Delivery  of Transaction Documents.  The Transaction Documents
                  ----------------------------------
have  been  duly  executed  and  delivered  by  the  Purchasers  to the Company.

          Section  4.2     Conditions  Precedent  to  the  Obligation  of  the
                           ---------------------------------------------------
Purchasers to Close and to Purchase the Debentures and Warrants.  The obligation
        -------------------------------------------------------
hereunder  of  the  Purchasers  to  purchase  the  Debentures  and  Warrants and
consummate  the  transactions  contemplated  by this Agreement is subject to the
satisfaction or waiver, at or before the Closing Date, of each of the conditions
set  forth below.  These conditions are for the Purchasers' sole benefit and may
be  waived  by  the  Purchasers  at  any  time  in  their  sole  discretion.


                                       21
<PAGE>
          (a)     Accuracy  of  the  Company's  Representations  and Warranties.
                  -------------------------------------------------------------
Each of the representations and warranties of the Company in this Agreement, the
Registration  Rights  Agreement, the Security Agreement and the Debentures shall
be  true and correct in all material respects as of the Closing Date, except for
representations  and  warranties that speak as of a particular date, which shall
be  true  and  correct  in  all  material  respects  as  of  such  date.

          (b)     Performance by the Company.  The Company shall have performed,
                  --------------------------
satisfied  and  complied  in  all  respects  with  all covenants, agreements and
conditions  required  by  this  Agreement to be performed, satisfied or complied
with  by  the  Company  at  or  prior  to  the  Closing  Date.

          (c)     No  Suspension,  Etc.  Trading  in  the Company's Common Stock
                  ---------------------
shall  not  have  been suspended by the Commission (except for any suspension of
trading  of limited duration agreed to by the Company, which suspension shall be
terminated  prior  to  the Closing), and, at any time prior to the Closing Date,
trading  in  securities  generally  as  reported  by Bloomberg Financial Markets
("Bloomberg")  shall not have been suspended or limited, or minimum prices shall
  ---------
not  have been established on securities whose trades are reported by Bloomberg,
or  on  the  New  York  Stock Exchange, nor shall a banking moratorium have been
declared  either  by  the United States or New York State authorities, nor shall
there  have  occurred  any  national or international calamity or crisis of such
magnitude  in  its  effect  on  any financial market which, in each case, in the
reasonable  judgment of the Purchasers, makes it impracticable or inadvisable to
purchase  the  Debentures.

          (d)     No Injunction.  No statute, rule, regulation, executive order,
                  -------------
decree,  ruling  or  injunction shall have been enacted, entered, promulgated or
endorsed  by any court or governmental authority of competent jurisdiction which
prohibits  the  consummation  of  any  of  the transactions contemplated by this
Agreement.

          (e)     No  Proceedings  or Litigation.  No action, suit or proceeding
                  ------------------------------
before  any  arbitrator or any governmental authority shall have been commenced,
and  no  investigation by any governmental authority shall have been threatened,
against  the  Company  or  any  Subsidiary, or any of the officers, directors or
affiliates  of  the  Company  or  any Subsidiary seeking to restrain, prevent or
change  the  transactions  contemplated by this Agreement, or seeking damages in
connection  with  such  transactions.

          (f)     Opinion  of  Counsel, Etc.  The Purchasers shall have received
                  --------------------------
an  opinion  of  counsel  to the Company, dated the Closing Date, in the form of
Exhibit E  hereto and such other certificates and documents as the Purchasers or
---------
their  counsel  shall  reasonably  require  incident  to  the  Closing.

          (g)     Warrants and Debentures.  The Company shall have delivered the
                  -----------------------
originally  executed  Warrants  (in  such  denominations  as  each Purchaser may
request)  to  the  Purchasers  and  shall have delivered the originally executed
Debentures  (in  such  denominations  as  each  Purchaser  may  request)  to the
Purchasers  being  acquired  by  the  Purchasers  at  the  Closing.


                                       22
<PAGE>
          (h)     Resolutions.  The Board of Directors of the Company shall have
                  -----------
adopted  resolutions  consistent with Section 2.1(b) hereof in a form reasonably
acceptable  to  the  Purchasers  (the  "Resolutions").
                                        -----------

          (i)     Reservation  of  Shares.  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 Debentures and the exercise of
the  Warrants,  a number of shares of Common Stock equal to at least 200% of the
aggregate number of Conversion Shares issuable upon conversion of the Debentures
outstanding  on  the Closing Date and the number of Warrant Shares issuable upon
exercise  of the Warrants assuming the Warrants were granted on the Closing Date
(after  giving  effect  to  the  Debentures and the Warrants to be issued on the
Closing  Date and assuming the Debentures and Warrants were fully convertible or
exercisable on such date regardless of any limitation on the timing or amount of
such  conversions  or  exercises).

          (j)     Transfer  Agent  Instructions.  The Irrevocable Transfer Agent
                  -----------------------------
Instructions,  in  the  form  of  Exhibit  D  attached  hereto,  shall have been
                                  ----------
delivered  to  and  acknowledged  in  writing  by  the Company's transfer agent.

          (k)     Secretary's  Certificate.  The Company shall have delivered to
                  ------------------------
the  Purchasers  a  secretary's certificate, dated as of the Closing Date, as to
(i)  the  Resolutions, (ii) the Articles, (iii) the Bylaws, each as in effect at
the  Closing,  and  (iv)  the  authority  and  incumbency of the officers of the
Company  executing the Transaction Documents and any other documents required to
be  executed  or  delivered  in  connection  therewith.

          (l)     Officer's Certificate.  On the Closing Date, the Company shall
                  ---------------------
have  delivered  to  the Purchasers a certificate of an executive officer of the
Company,  dated as of the Closing Date, confirming the accuracy of the Company's
representations,  warranties and covenants as of the Closing Date and confirming
the  compliance  by  the Company with the conditions precedent set forth in this
Section  4.2  as  of  the  Closing  Date.

          (m)     Security Agreement.  As of the Closing Date, the Company shall
                  ------------------
have  executed  and  delivered  the  security agreement in the form of Exhibit F
                                                                       ---------
attached  hereto.

          (n)     UCC-1  Financing Statements.  The Company shall have filed all
                  ---------------------------
UCC-1  financing statements in form and substance satisfactory to the Purchasers
at  the appropriate offices to create a valid and perfected security interest in
the  Collateral  (as  defined  in  the  Security  Agreement).

          (o)     Judgment,  Lien  and  UCC  Search.  A  judgment,  lien and UCC
                  ---------------------------------
financing  statement  search  shall  have  been  completed  by  the  Purchasers.

          (p)     Fees  and  Expenses.  As  of  the  Closing  Date, all fees and
                  -------------------
expenses  required to be paid by the Company shall have been or authorized to be
paid  by  the  Company  as  of  the  Closing  Date.

          (q)     Registration  Rights  Agreement.  As  of the Closing Date, the
                  -------------------------------
Company  shall  have executed and delivered the Registration Rights Agreement in
the  Form  of  Exhibit  G  attached  hereto.
               ----------


                                       23
<PAGE>
          (r)     Material  Adverse  Effect.  No  Material  Adverse Effect shall
                  -------------------------
have  occurred.


                                    ARTICLE V

                               Certificate Legend

          Section 5.1     Legend.  Each certificate representing the Debentures,
                          ------
the  Conversion  Shares, the Warrants and the Warrant Shares shall be stamped or
otherwise  imprinted  with  a  legend  substantially  in  the following form (in
addition  to  any  legend  required by applicable state securities or "blue sky"
laws):

     THE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE "SECURITIES") HAVE
     NOT  BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
     "SECURITIES  ACT")  OR  ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD,
     TRANSFERRED  OR  OTHERWISE  DISPOSED  OF  UNLESS  REGISTERED UNDER THE
     SECURITIES  ACT  AND UNDER APPLICABLE STATE SECURITIES LAWS OR APPIANT
     TECHNOLOGIES,  INC. SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT
     REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE
     PROVISIONS  OF  APPLICABLE  STATE  SECURITIES  LAWS  IS  NOT REQUIRED.

     The  Company  agrees  to  reissue  certificates  representing  any  of  the
Securities,  without the legend set forth above if at such time, prior to making
any  transfer  of  any  such  Securities, such holder thereof shall give written
notice  to  the  Company  describing  the  manner and terms of such transfer and
removal  as the Company may reasonably request.  Such proposed transfer will not
be  effected  until: (a) the Company has notified such holder that either (i) in
the  opinion  of Company counsel, the registration of the Debentures, Conversion
Shares,  Warrants  or Warrant Shares under the Securities Act is not required in
connection  with  such proposed transfer; or (ii) a registration statement under
the  Securities  Act  covering  such  proposed disposition has been filed by the
Company  with  the Commission and has become effective under the Securities Act;
and  (b) the Company has notified such holder that either: (i) in the opinion of
Company counsel, the registration or qualification under the securities or "blue
sky"  laws  of  any  state  is  not  required  in  connection with such proposed
disposition,  or  (ii) compliance with applicable state securities or "blue sky"
laws has been effected.  The Company will use its best efforts to respond to any
such  notice  from  a  holder within five (5) days.  In the case of any proposed
transfer under this Section 5, the Company will use reasonable efforts to comply
with  any  such  applicable state securities or "blue sky" laws, but shall in no
event  be  required,  in  connection therewith, to qualify to do business in any
state where it is not then qualified or to take any action that would subject it
to  tax  or  to the general service of process in any state where it is not then
subject.  The  restrictions  on  transfer  contained  in Section 5.1 shall be in
addition to, and not by way of limitation of, any other restrictions on transfer
contained  in  any  other  section  of  this  Agreement.


                                       24
<PAGE>
                                   ARTICLE VI

                                  Termination

          Section  6.1     Termination  by  Mutual  Consent.  This  Agreement
                           --------------------------------
may  be  terminated  at any time prior to the Closing Date by the mutual written
consent  of  the  Company  and  the  Purchaser.

          Section 6.2     Effect of Termination.  In the event of termination by
                          ---------------------
the  Company  or the Purchasers, written notice thereof shall forthwith be given
to  the other party and the transactions contemplated by this Agreement shall be
terminated  without  further  action  by  either  party.  If  this  Agreement is
terminated  as  provided in Section 6.1 herein, this Agreement shall become void
and of no further force and effect, except for Sections 8.1 and 8.2, and Article
VII  herein.  Nothing in this Section 6.2 shall be deemed to release the Company
or  any  Purchaser from any liability for any breach under this Agreement, or to
impair  the  rights  of  the  Company  and  such  Purchaser  to  compel specific
performance  by  the  other  party  of  its  obligations  under  this Agreement.


                                  ARTICLE VII

                                Indemnification

          Section  7.1     General  Indemnity.  The  Company agrees to indemnify
                           ------------------
and  hold  harmless  each  Purchaser  (and  its  respective directors, officers,
affiliates, agents, successors and assigns) from and against any and all losses,
liabilities,  deficiencies,  costs,  damages  and  expenses  (including, without
limitation,  reasonable  attorneys' fees, charges and disbursements) incurred by
each  Purchaser regarding from a third party claim resulting from any inaccuracy
in or breach of the representations, warranties or covenants made by the Company
herein.  The  Purchasers  severally  but not jointly agree to indemnify and hold
harmless the Company and its directors, officers, affiliates, agents, successors
and  assigns  from  and  against  any and all losses, liabilities, deficiencies,
costs,  damages  and  expenses  (including,  without  limitation,  reasonable
attorneys' fees, charges and disbursements) incurred by the Company as result of
any inaccuracy in or breach of the representations, warranties or covenants made
by  the  Purchasers  herein;  provided,  however,  that  in  no  event shall the
                              --------   -------
liability of any Holder hereunder be greater in amount than the dollar amount of
the  investment  by  such  Holder  in the Securities pursuant to this Agreement.

          Section  7.2     Indemnification  Procedure.  Any  party  entitled  to
                           --------------------------
indemnification  under  this  Article  VII  (an  "indemnified  party") will give
written  notice  to the indemnifying party of any matters giving rise to a claim
for  indemnification;  provided,  that  the  failure  of  any  party entitled to
indemnification  hereunder  to  give notice as provided herein shall not relieve
the  indemnifying  party of its obligations under this Article VII except to the
extent  that  the  indemnifying  party is actually prejudiced by such failure to
give  notice.  In  case  any  action,  proceeding or claim is brought against an
indemnified party by a third party in respect of which indemnification is sought
hereunder,  the  indemnifying  party  shall  be  entitled to participate in and,
unless  in  the  reasonable  judgment  of  the  indemnified  party a conflict of
interest  between  it


                                       25
<PAGE>
and  the indemnifying party may exist with respect to such action, proceeding or
claim, to assume the defense thereof with counsel reasonably satisfactory to the
indemnified  party.  In  the  event  that  the  indemnifying  party  advises  an
indemnified  party  that  it  will  contest  such  a  claim  for indemnification
hereunder,  or  fails, within thirty (30) days of receipt of any indemnification
notice  to  notify, in writing, such person of its election to defend, settle or
compromise,  at  its  sole cost and expense, any action, proceeding or claim (or
discontinues  its defense at any time after it commences such defense), then the
indemnified  party may, at its option, defend, settle or otherwise compromise or
pay  such action or claim. In any event, unless and until the indemnifying party
elects  in  writing  to assume and does so assume the defense of any such claim,
proceeding  or action, the indemnified party's costs and expenses arising out of
the  defense,  settlement  or compromise of any such action, claim or proceeding
shall  be  losses  subject  to  indemnification hereunder. The indemnified party
shall  cooperate  fully  with  the  indemnifying  party  in  connection with any
negotiation or defense of any such action or claim by the indemnifying party and
shall  furnish to the indemnifying party all information reasonably available to
the  indemnified  party  which relates to such action or claim. The indemnifying
party  shall  keep  the  indemnified party fully apprised at all times as to the
status  of  the  defense or any settlement negotiations with respect thereto. If
the  indemnifying  party  elects  to  defend  any such action or claim, then the
indemnified  party shall be entitled to participate in such defense with counsel
of  its choice at its sole cost and expense. The indemnifying party shall not be
liable  for  any  settlement of any action, claim or proceeding effected without
its  prior  written consent. Notwithstanding anything in this Article VII to the
contrary,  the  indemnifying  party  shall  not, without the indemnified party's
prior written consent, settle or compromise any claim or consent to entry of any
judgment  in  respect  thereof  which  imposes  any  future  obligation  on  the
indemnified  party  or which does not include, as an unconditional term thereof,
the  giving  by  the  claimant  or  the  plaintiff to the indemnified party of a
release  from  all  liability  in  respect  of  such  claim. The indemnification
required  by  this  Article VII shall be made by periodic payments of the amount
thereof  during  the  course  of investigation or defense, as and when bills are
received  or  expense,  loss,  damage  or  liability is incurred, so long as the
indemnified  party  irrevocably agrees to refund such moneys if it is ultimately
determined by a court of competent jurisdiction that such party was not entitled
to  indemnification.  The  indemnity  agreements  contained  herein  shall be in
addition  to  (a) any cause of action or similar rights of the indemnified party
against  the  indemnifying  party  or  others,  and  (b)  any  liabilities  the
indemnifying  party  may  be  subject  to  pursuant  to  the  law.


                                  ARTICLE VIII

                                  Miscellaneous

          Section  8.1     Fees and Expenses.  Each party shall pay the fees and
                           -----------------
expenses  of  its  advisors, counsel, accountants and other experts, if any, and
all  other  expenses,  incurred  by  such  party  incident  to  the negotiation,
preparation,  execution,  delivery  and performance of this Agreement, provided,
                                                                       --------
however,  that  the Company shall pay on the Closing Date such fees and expenses
-------
set  forth  on  Schedule 2.1(p) hereto, including all reasonable attorneys' fees
                ---------------
and  expenses  not  to  exceed  up  to  $40,000  (plus  all  disbursements  and
out-of-pocket  expenses  incurred  by  attorneys)  incurred by the Purchasers in
connection  with  the  preparation,  negotiation, execution and delivery of this
Agreement  and the other Transaction Documents and the


                                       26
<PAGE>
transactions  contemplated  thereunder.  In  lieu  of the foregoing payment, the
Purchasers  may retain such amounts at the Closing or require the Company to pay
such amounts directly to Purchasers' counsel. In addition, the Company shall pay
all  reasonable  fees and expenses incurred by the Purchasers in connection with
any  amendments,  modifications or waivers of this Agreement or any of the other
Transaction  Documents  or  incurred  in connection with the enforcement of this
Agreement  and  any  of  the  other  Transaction  Documents,  including, without
limitation,  all  reasonable  attorneys'  fees,  disbursements  and  expenses.

          Section  8.2     Specific  Enforcement;  Consent  to  Jurisdiction.
                           -------------------------------------------------

          (a)     The  Company  and  the  Purchasers  acknowledge and agree that
irreparable  damage  would occur in the event that any of the provisions of this
Agreement  or  the  other Transaction Documents were not performed in accordance
with  their specific terms or were otherwise breached.  It is accordingly agreed
that the parties shall be entitled to an injunction or injunctions to prevent or
cure  breaches  of  the  provisions  of  this Agreement or the other Transaction
Documents  and  to  enforce  specifically  the  terms  and  provisions hereof or
thereof,  this being in addition to any other remedy to which any of them may be
entitled  by  law  or  equity.

          (b)     The  Company  and each Purchaser (i) hereby irrevocably submit
to the exclusive jurisdiction of the United States District Court sitting in the
Southern District of New York and the courts of the State of New York located in
New  York  county for the purposes of any suit, action or proceeding arising out
of  or  relating  to this Agreement or any of the other Transaction Documents or
the transactions contemplated hereby or thereby and (ii) hereby waive, and agree
not  to  assert in any such suit, action or proceeding, any claim that it is not
personally  subject  to the jurisdiction of such court, that the suit, action or
proceeding  is  brought  in an inconvenient forum or that the venue of the suit,
action  or  proceeding  is  improper.  The Company and each Purchaser consent to
process  being  served  in any such suit, action or proceeding by mailing a copy
thereof  to  such  party  at  the address in effect for notices to it under this
Agreement  and  agrees  that  such  service shall constitute good and sufficient
service of process and notice thereof.  Nothing in this Section 8.2 shall affect
or  limit  any right to serve process in any other manner permitted by law.  The
Company  and  the Purchasers hereby agree that the prevailing party in any suit,
action  or  proceeding  arising  out  of  or  relating  to  the Debentures, this
Agreement,  the Registration Rights Agreement or the Warrants, shall be entitled
to  reimbursement  for  reasonable  legal  fees  from  the non-prevailing party.

          Section  8.3     Entire  Agreement; Amendment.  This Agreement and the
                           ----------------------------
Transaction  Documents  contain  the  entire  understanding and agreement of the
parties  with  respect to the matters covered hereby and, except as specifically
set  forth herein or in the other Transaction Documents, neither the Company nor
any  Purchaser  make  any representation, warranty, covenant or undertaking with
respect  to  such  matters,  and  they  supersede  all  prior understandings and
agreements  with respect to said subject matter, all of which are merged herein.
No  provision of this Agreement may be waived or amended other than by a written
instrument  signed  by the Company and the holders of at least a majority of the
principal amount of the Debentures then outstanding, and no provision hereof may
be  waived  other  than by a written instrument signed by the party against whom
enforcement  of any such amendment or waiver is sought.  No such amendment shall
be  effective  to  the extent that it applies to less than all of the holders of
the  Debentures  then outstanding.  No consideration shall be offered or paid


                                       27
<PAGE>
to  any  person to amend or consent to a waiver or modification of any provision
of  any  of  the  Transaction  Documents  unless  the same consideration is also
offered  to  all  of  the  parties  to  the  Transaction Documents or holders of
Debentures,  as  the  case  may  be.

          Section 8.4     Notices.  Any notice, demand, request, waiver or other
                          -------
communication  required  or  permitted to be given hereunder shall be in writing
and  shall  be  effective (a) upon hand delivery by telecopy or facsimile at the
address or number designated below (if delivered on a business day during normal
business  hours  where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day during normal
business  hours  where  such  notice  is  to  be  received) or (b) on the second
business  day  following  the  date of mailing by express courier service, fully
prepaid,  addressed  to  such  address,  or upon actual receipt of such mailing,
whichever  shall  first  occur.  The addresses for such communications shall be:


If  to  the  Company:          Appiant  Technologies,  Inc.
                               6663  Owens  Drive
                               Pleasanton,  California  94588
                               Attention:  Chief  Financial  Officer
                               Telecopier:  (925)  847-3806
                               Telephone:  (925)  251-3200

with copies (which copies
shall not constitute notice
to the Company) to:            Morrison  &  Foerster  LLP
                               755  Page  Mill  Road
                               Palo  Alto,  CA  94304
                               Attention:  Stephen  J.  Schrader
                               Telecopier:  (650)  494-0792
                               Telephone:  (650)  813-5600

If  to  any  Purchaser:        At the address of such Purchaser set forth on
                               Exhibit  A  to  this  Agreement.
                               ----------

with copies to:                Christopher S. Auguste, Esq.
                               Jenkens  &  Gilchrist  Parker  Chapin  LLP
                               The  Chrysler  Building
                               405  Lexington  Ave.
                               New  York,  New  York  10174
                               Telecopier:  (212)  704-6288
                               Telephone:  (212)  704-6000

     Any  party  hereto  may from time to time change its address for notices by
giving  at  least  ten  (10)  days written notice of such changed address to the
other  party  hereto.

          Section  8.5     Waivers.  No  waiver  by  either party of any default
                           -------
with  respect to any provision, condition or requirement of this Agreement shall
be  deemed  to  be  a  continuing  waiver in the future or a waiver of any other
provision,  condition  or  requirement  hereof,  nor  shall


                                       28
<PAGE>
any delay or omission of any party to exercise any right hereunder in any manner
impair  the  exercise  of  any  such  right  accruing  to  it  thereafter.

          Section  8.6     Headings.  The  article,  section  and  subsection
                           --------
headings  in  this Agreement are for convenience only and shall not constitute a
part of this Agreement for any other purpose and shall not be deemed to limit or
affect  any  of  the  provisions  hereof.

          Section  8.7     Successors  and  Assigns.  This  Agreement  shall  be
                           ------------------------
binding  upon  and  inure to the benefit of the parties and their successors and
assigns.  After  the  Closing,  the  permitted  assignment  by  a  party to this
Agreement of any rights hereunder shall not affect the obligations of such party
under  this  Agreement.  The  Purchasers may assign the Debentures, the Warrants
and  its rights under this Agreement and the other Transaction Documents and any
other  rights  hereto  and  thereto  without  the  consent  of  the  Company.

          Section  8.8     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.

          Section  8.9     Governing  Law.  This  Agreement shall be governed by
                           --------------
and  construed  in  accordance  with the internal laws of the State of New York,
without giving effect to the choice of law provisions.  This Agreement shall not
be  interpreted or construed with any presumption against the party causing this
Agreement  to  be  drafted.

          Section  8.10     Survival.  The representations and warranties of the
                            --------
Company  and  the  Purchasers  contained  in  Sections  2.1(o) and 2.1(s) should
survive  indefinitely  and  those contained in Article II, with the exception of
Sections  2.1(o) and 2.1(s), shall survive the execution and delivery hereof and
the  Closing  until  the  date  three  (3)  years from the Closing Date, and the
agreements  and covenants set forth in Articles I, III, V, VII and VIII  of this
Agreement  shall  survive  the  execution  and  delivery  hereof and the Closing
hereunder.

          Section  8.11     Counterparts.  This Agreement may be executed in any
                            ------------
number of counterparts, all of which taken together shall constitute one and the
same instrument and shall become effective when counterparts have been signed by
each  party  and delivered to the other parties hereto, it being understood that
all  parties  need  not  sign  the  same  counterpart.

          Section  8.12     Publicity.  The  Company  agrees  that  it  will not
                            ---------
disclose,  and  will  not  include  in any public announcement, the names of the
Purchasers without the consent of the Purchasers in accordance with Section 8.3,
which consent shall not be unreasonably withheld or delayed, or unless and until
such disclosure is required by law, rule or applicable regulation, and then only
to  the  extent  of  such  requirement.

          Section  8.13     Severability.  The  provisions of this Agreement are
                            ------------
severable  and,  in  the  event  that  any court of competent jurisdiction shall
determine  that  any  one  or  more  of the provisions or part of the provisions
contained  in  this  Agreement  shall,  for  any  reason, be held to be invalid,
illegal  or  unenforceable  in  any  respect,  such  invalidity,  illegality  or
unenforceability  shall not affect any other provision or part of a provision of
this  Agreement  and  this  Agreement shall be reformed and construed as if such
invalid  or  illegal  or unenforceable provision, or part of such provision, had
never  been  contained herein, so that


                                       29
<PAGE>
such  provisions  would  be  valid,  legal and enforceable to the maximum extent
possible.

          Section  8.14     Further Assurances.  From and after the date of this
                            ------------------
Agreement,  upon  the  request of the Purchasers or the Company, the Company and
each  Purchaser  shall execute and deliver such instruments, documents and other
writings  as  may  be reasonably necessary or desirable to confirm and carry out
and  to  effectuate  fully  the  intent  and  purposes  of  this  Agreement, the
Debentures,  the  Warrants,  the  Security Agreement and the Registration Rights
Agreement.

     IN  WITNESS  WHEREOF,  the  parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the date first above
written.


                                       APPIANT TECHNOLOGIES, INC.



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


                                       [INVESTOR]



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


                                       [INVESTOR]



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



                                       [INVESTOR]



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


                                       30
<PAGE>