EXHIBIT 10.8
                                  ------------

                            LINE OF CREDIT AGREEMENT
                            ------------------------

      THIS LINE OF CREDIT AGREEMENT is dated as of the 19th day of March , 2001,
(the  "AGREEMENT")  between CORNELL CAPITAL  PARTNERS,  LP (the  "INVESTOR") and
NEXLAND,  INC., a corporation organized and existing under the laws of the State
of Delaware (the "COMPANY").

      WHEREAS, the Investor is a limited partnership and the business affairs of
the Investor are managed by Yorkville Advisors, LLC, a Delaware corporation;

      WHEREAS,  the  parties  desire  that,  upon the terms and  subject  to the
conditions  contained herein,  the Company shall issue and sell to the Investor,
from time to time as provided herein, and the Investor shall purchase up to Five
Million  Dollars  ($5,000,000)  of Debentures for a total purchase price of Five
Million Dollars ($5,000,000); and

      WHEREAS,  such investments will be made in reliance upon the provisions of
Section  4(2)  ("SECTION  4(2)") and the  Regulation D  ("REGULATION  D") of the
Securities Act of 1933, as amended, and the regulations  promulgated  thereunder
(the  "SECURITIES  ACT"), 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 in the Debentures to be made hereunder; and

      NOW, THEREFORE, the parties hereto agree as follows:

                                   ARTICLE 1.
                               CERTAIN DEFINITIONS

      Section 1.1.  "ADVANCE"  shall mean each  occasion  the Company  elects to
exercise its right to tender an Advance Notice requiring the Investor to advance
funds to the Company, subject to the terms of this Agreement.

      Section 1.2.  "ADVANCE  NOTICE  DATE"  shall  mean  each date the  Company
delivers to the  Investor an Advance  Notice  requiring  the Investor to advance
funds to the Company,  subject to the terms of this  Agreement.  No Advance Date
shall be less than twenty (20) Trading Days after the prior Advance Notice Date.

      Section 1.3. "ADVANCE DATE" shall mean the date Butler Gonzalez  LLP/First
Union  Escrow  Account is in receipt of the funds from the  Investor  and Butler
Gonzalez LLP, as the Investment  Adviser's Counsel, is in possession of executed
Debentures in the amount of an Advance from the Company and therefore an Advance
by the  Investor to the Company can be made and Butler  Gonzalez LLP can release
the executed Debentures in the amount of the Advance to the Investor.


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      Section 1.4.  "ADVANCE NOTICE" shall mean a written notice to the Investor
setting forth the Advance Amount that the Company requests from the Investor and
Compliance Certification from the Company as attached hereto as Exhibit A.

      Section 1.5.  "ADVANCE  PRICE" shall be set at eighty percent (80%) of the
Market Price.

      Section 1.6. "AVERAGE DAILY VOLUME" shall be computed using the forty (40)
trading days prior to the Advance Date.

      Section 1.7.  "BID PRICE" shall mean,  on any date,  the closing bid price
(as reported by Bloomberg L.P.) of the Common Stock on a Principal  Market or if
the Common Stock is not traded on a Principal  Market,  the highest reported bid
price  for the  Common  Stock,  as  furnished  by the  National  Association  of
Securities Dealers, Inc.

      Section 1.8.  "CLOSING"  shall mean one  of the closings of a purchase and
sale of the Debentures pursuant to Section 2.3.

      Section 1.9. "COMMITMENT AMOUNT" shall mean the $5,000,000 up to which the
Investor  has  agreed  to  provide  to the  Company  in  order to  purchase  the
Debentures pursuant to the terms and conditions of this Agreement.

      Section 1.10.  "COMMITMENT PERIOD" shall mean the period commencing on the
earlier to occur of the Effective Date, or (ii) such earlier date as the Company
and the Investor may mutually agree in writing,  and expiring on the earliest to
occur of (x) the date on which the  Investor  shall  have  purchased  Debentures
pursuant to this Agreement in the amount of at least $5,000,000 unless such date
is extended by the Investor,  (y) the date this Agreement is terminated pursuant
to Section 2.4., or (z) the date occurring two (2) years from the date hereof.

      Section 1.11.  "COMMON STOCK" shall mean the Company's  common stock,  par
value $0.0001 per share.

      Section 1.12.  "CONDITION  SATISFACTION  DATE" shall have  the meaning set
forth in Section 7.2.

      Section 1.13.  "DAMAGES" shall mean any loss,  claim,  damage,  liability,
costs and expenses (including,  without limitation,  reasonable  attorney's fees
and disbursements and costs and expenses of expert witnesses and investigation).

      Section 1.14. "DEBENTURES" shall mean the Debenture in the form of Exhibit
B attached hereto.

      Section 1.15.  "EFFECTIVE DATE" shall mean the date on which the SEC first
declares  effective  a  Registration  Statement  registering  the  resale of the
Registrable Securities as set forth in Section 7.2(a).

      Section 1.16.  "ESCROW  AGENT" shall be  First Union  National Bank or its
successors.

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<PAGE>


      Section 1.17.  "ESCROW  AGREEMENT"  shall mean the document in the form of
Exhibit C attached  hereto and  referenced in Section 7.2.  Subparagraph  (j) of
this Agreement.

      Section 1.18.  "EXCHANGE  ACT" shall mean the  Securities  Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.

      Section 1.19.  "LEGEND"  shall mean  that "legend" as set forth in Section
9.1.

      Section 1.20.  "MARKET  PRICE"  shall  mean  the  average of the three (3)
lowest closing Bid Prices of the Common Stock over the Pricing Period.

      Section 1.21.  "MATERIAL  ADVERSE  EFFECT"  shall  mean any  effect on the
business, Bid Price, operations,  properties,  prospects, or financial condition
of the Company that is material and adverse to the Company and its  subsidiaries
and  affiliates,  taken as a  whole,  and/or  any  condition,  circumstance,  or
situation that would prohibit or otherwise materially interfere with the ability
of the  Company  to enter into and  perform  any of its  obligations  under this
Agreement,  the  Debenture,  the  Registration  Rights  Agreement  or the Escrow
Agreement in any material respect.

      Section 1.22.  "MONTHLY  MAXIMUM  ADVANCE  AMOUNT"  shall be  equal to two
hundred percent (200%) of the Average Daily Volume of the Company's Common Stock
multiplied  by the Company's  average bid price as reported by  Bloomberg,  L.P.
during the Pricing Period.

      Section 1.23.  "NASD" shall mean  the National  Association  of Securities
Dealers, Inc.

      Section 1.24.  "PERSON"  shall  mean  an  individual,  a  corporation,   a
partnership, an association, a trust or other entity or organization,  including
a government or political subdivision or an agency or instrumentality thereof.

      Section 1.25. "INVESTMENT ADVISER" shall mean May Davis Group, Inc.

      Section 1.26.  "PRINCIPAL  MARKET" shall mean the Nasdaq National  Market,
the Nasdaq  SmallCap  Market,  the American Stock  Exchange,  the New York Stock
Exchange or the Over the Counter  Bulletin Board  ("OTCBB")  whichever is at the
time the principal trading exchange or market for the Common Stock.

      Section 1.27.  "PRICING  PERIOD"  shall mean  the twenty (20)  trading day
period immediately preceding the Advance Notice Date.

      Section 1.28.  "REGISTRABLE  SECURITIES"  shall mean  the shares of Common
Stock (i) in respect of which the  Registration  Statement has not been declared
effective by the SEC,  (ii) which have not been sold under  circumstances  under
which all of the  applicable  conditions  of Rule 144 (or any similar  provision
then in force) under the Securities Act ("RULE 144") are met or (iii) which have
not been  otherwise  transferred  to holder  who may trade such  shares  without
restriction  under the  Securities  Act,  and the  Company  has  delivered a new
certificate  or other  evidence of ownership for such  securities  not bearing a
restrictive legend.



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<PAGE>


      Section 1.29.  "REGISTRATION  RIGHTS  AGREEMENT"  shall mean the agreement
regarding  the  filing  of the  Registration  Statement  for the  resale  of the
Registrable Securities, entered into between the Company and the Investor on the
Subscription Date attached hereto as Exhibit C.

      Section 1.30. "REGISTRATION STATEMENT" shall mean a registration statement
on Form S-3 (if use of such form is then  available  to the Company  pursuant to
the rules of the SEC and, if not, on such other form  promulgated by the SEC for
which the Company then  qualifies  and which  counsel for the Company shall deem
appropriate, and which form shall be available for the resale of the Registrable
Securities to be registered thereunder in accordance with the provisions of this
Agreement and the  Registration  Rights  Agreement,  and in accordance  with the
intended method of distribution of such securities), for the registration of the
resale by the Investor of the Registrable Securities under the Securities Act.

      Section 1.31.  "REGULATION  D" shall  have  the  meaning  set forth in the
recitals of this Agreement.

      Section 1.32. "SEC" shall mean the Securities and Exchange Commission.


      Section 1.33.  "SECTION  4(2)"  shall have the  meaning  set forth  in the
recitals of this Agreement.

      Section 1.34.  "SECURITIES  ACT" shall  have the  meaning set forth in the
recitals of this Agreement.

      Section 1.35.  "SEC  DOCUMENTS"  shall mean the Form 10-KSB,  Form 10-QSB,
Form 8-K, Form 10-SB, Form SB-2,  Registration Statements or Proxy Statements of
the  Company as  supplemented  to the date  hereof,  filed by the  Company for a
period of at twelve (12)  months  immediately  preceding  the date hereof or the
Advance  Date,  as the case may be, until such time as the Company no longer has
an obligation to maintain the  effectiveness of a Registration  Statement as set
forth in the Registration Rights Agreement.

      Section 1.36.  "SUBSCRIPTION  DATE"  shall  mean  the  date on which  this
Agreement is executed and delivered by the parties hereto.

      Section 1.37.  "TRADING DAY" shall  mean any day during which the New York
Stock Exchange shall be open for business.

                                   ARTICLE 2.
                                    ADVANCES

      Section 2.1. INVESTMENTS.

         (a) ADVANCES. Upon the terms and conditions set forth herein (including
without  limitation,  the provisions of Article 7. hereof),  on any Advance Date
the Company may request an Advance by the Investor by the delivery of an Advance
Notice.  The amount of the Debenture that the Investor shall receive pursuant to
such  Advance  shall be equal to the  amount  of the  Advance  specified  in the
Advance  Notice,  which Advance shall not exceed the Maximum  Advance  Amount on
such date.



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      Section 2.2. MECHANICS.

         (a) ADVANCE  NOTICE.  At any time  during the  Commitment  Period,  the
Company may deliver an Advance Notice to the Investor, subject to the conditions
set forth in Section  2.4.;  provided,  however,  the amount for each Advance as
designated  by the Company in the  applicable  Advance  Notice shall not be more
than the Maximum Advance Amount.  The aggregate amount of the Advances  pursuant
to this  Agreement  shall not exceed the  Commitment  Amount,  unless  otherwise
agreed by the  Investor  in the  Investor's  sole and  absolute  discretion.  No
Advance  Notice  may be  given  by  the  Company  until  there  is an  effective
Registration  Statement  registering the underlying  shares of Common Stock that
shall be issued upon conversion of the Convertible Debentures.

         (b) DATE OF  DELIVERY OF ADVANCE  NOTICE.  An Advance  Notice  shall be
deemed delivered on (i) the Trading Day it is received by facsimile or otherwise
by the Investor if such notice is received  prior to 12:00 noon Eastern Time, or
(ii) the  immediately  succeeding  Trading Day if it is received by facsimile or
otherwise after 12:00 noon Eastern Time on a Trading Day or at any time on a day
which is not a Trading Day. No Advance Notice may be deemed delivered,  on a day
that is not a Trading Day.

      Section 2.3. CLOSINGS. On each Advance Date for an Advance (i) the Company
shall deliver to Butler  Gonzalez LLP one or more  Debentures at the  Investor's
option,  representing  the amount of the  Advance by the  Investor  pursuant  to
Section  2.1.  herein,  registered  in the  name of the  Investor  and  (ii) the
Investor  shall  deliver to escrow the amount of the  Advance  specified  in the
Advance  Notice by wire transfer of  immediately  available  funds to the Escrow
Agent on or before the Advance  Date.  In  addition,  on or prior to the Advance
Date, each of the Company and the Investor shall deliver to the Escrow Agent and
Butler  Gonzalez LLP all  documents,  instruments  and  writings  required to be
delivered or reasonably  requested by either of them pursuant to this  Agreement
in order to implement and effect the transactions  contemplated herein.  Payment
of funds to the Company and delivery of the  Debentures  to the  Investor  shall
occur out of escrow in accordance  with the conditions set forth above and those
contained  in the  Escrow  Agreement  referred  to in  Section  7.2.(j)  herein;
provided,  however,  that to the  extent  the  Company  has not paid  the  fees,
expenses,  and  disbursements of the Investor's  counsel,  Escrow Agent, and the
Investment  Adviser in accordance with Section 13.4.  herein, the amount of such
fees,  expenses,  and  disbursements  must be paid by the Company in immediately
available  funds from the amount of the Advance held by the Escrow Agent, at the
direction of the Investor,  to the Investor's counsel, the Escrow Agent, and the
Investment  Adviser with no reduction in the amount of Debenture on such Advance
Date.

      Section 2.4. TERMINATION OF INVESTMENT.  The obligation of the Investor to
make an  Advance to the  Company  pursuant  to this  Agreement  shall  terminate
permanently  (including  with  respect  to an  Advance  Date  that  has  not yet
occurred)  in the event that (i) there shall occur any stop order or  suspension
of the  effectiveness of the  Registration  Statement for an aggregate of thirty
(30)  Trading  Days  during the  Commitment  Period,  for any reason  other than
deferral or suspensions in accordance with the Registration  Rights Agreement as
a result of corporate  developments  subsequent  to the  Subscription  Date that
would require such Registration Statement to be amended to reflect such event in
order to  maintain  its  compliance  with  the  disclosure  requirements  of the


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Securities  Act or (ii) the Company shall at any time fail  materially to comply
with the requirements of Section 6.3., 6.4. or 6.6.

      Section 2.5. AGREEMENT TO ADVANCE FUNDS.

         (a) The Investor agrees to advance the amount  specified in the Advance
Notice to the Company  within five (5) Trading Days after the completion of each
of the  following  conditions  and  the  other  conditions  set  forth  in  this
Agreement:

             (i) the execution and delivery by the Company, and the Investor, of
this Agreement, and all Exhibits and Attachments hereto;

             (ii) delivery to Butler Gonzalez LLP by the Company of the original
Debenture;

             (iii) the  Company's  Registration  Statement  with  respect to the
resale  of the  Registrable  Securities  in  accordance  with  the  terms of the
Registration Rights Agreement shall have been declared effective by the SEC;

             (iv) the Company shall have obtained all permits and qualifications
required by any applicable state as reasonably requested by the Investor for the
offer and sale of the Registrable Securities,  or shall have the availability of
exemptions therefrom.  The sale and issuance of the Registrable Securities shall
be  legally  permitted  by all laws and  regulations  to which  the  Company  is
subject; and

             (v) payment of fees as set forth in Section 13.4. below.

                                   ARTICLE 3.
                   REPRESENTATIONS AND WARRANTIES OF INVESTOR

      Investor represents and warrants to, and agrees with, the Company that:

      Section 3.1. ORGANIZATION AND AUTHORIZATION. Investor is duly incorporated
or organized and validly  existing in the  jurisdiction of its  incorporation or
organization  and has all requisite power and authority to purchase and hold the
securities  issuable  hereunder.  The decision to invest and the  execution  and
delivery of this Agreement by such Investor, the performance by such Investor of
its  obligations  hereunder  and  the  consummation  by  such  Investor  of  the
transactions contemplated hereby have been duly authorized and requires no other
proceedings on the part of the Investor.  The undersigned  has all right,  power
and authority to execute and deliver this  Agreement  and all other  instruments
(including, without limitation, the Registration Rights Agreement), on behalf of
the Investor.  This  Agreement  and all other  instruments  contemplated  herein
(including,  without  limitation,  the Registration  Rights Agreement) have been
duly  executed and  delivered by the Investor  and,  assuming the  execution and
delivery  hereof and  acceptance  thereof by the Company,  will  constitute  the
legal, valid and binding  obligations of the Investor,  enforceable  against the
Investor in accordance with its terms.

      Section 3.2.  EVALUATION  OF RISKS.  The Investor has such  knowledge  and
experience in financial tax and business  matters as to be capable of evaluating
the  merits  and risks of,  and  bearing  the  economic  risks  entailed  by, an


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<PAGE>


investment  in the Company and of protecting  its  interests in connection  with
this  transaction.  It recognizes that its investment in the Company  involves a
high degree of risk. The Investor  acknowledges that it has been furnished with,
and has carefully read the applicable form of Debenture and form of Registration
Rights Agreement.

      Section 3.3. INDEPENDENT  COUNSEL.  The Investor  acknowledges that it has
been advised to consult with its own attorney regarding legal matters concerning
the Company and to consult with its tax advisor  regarding the tax  consequences
of acquiring the securities issuable hereunder.

      Section 3.4. NO REGISTRATION.  The Investor understands that the Debenture
and Common Stock  underlying  the  Debenture  issuable  hereunder  have not been
registered  under the Act or any other securities laws but are being offered and
sold  to  it  in  reliance  upon  specific   exemptions  from  the  registration
requirements  of  federal  and state  securities  laws and that the  Company  is
relying  upon  the  truth  and  accuracy  of  the  representations,  warranties,
agreements,  acknowledgments and understandings of the Investor set forth herein
in order to determine the  applicability  of such exemptions and the suitability
of the Investor to acquire the securities hereunder.

      Section 3.5. INVESTMENT PURPOSE. The securities are being purchased by the
Investor  for its own  account,  for  investment  and  without  any  view to the
distribution, assignment or resale to others or fractionalization in whole or in
part. The Investor is neither an underwriter,  nor a dealer in, the Debenture or
the Common Stock  issuable on  conversion  thereof.  The Investor  agrees not to
assign or in any way transfer the  Investor's  rights to the  securities  or any
interest  therein and  acknowledges  that the  Company  will not  recognize  any
purported  assignment or transfer.  No other person has or will have a direct or
indirect beneficial interest in the securities. The Investor agrees not to sell,
hypothecate  or  otherwise   transfer  the  Investor's   securities  unless  the
securities are registered  under federal and applicable  state securities law or
unless, in the opinion of counsel satisfactory to the Company, an exemption from
such laws is available.

      Section 3.6.  ACCREDITED  INVESTOR STATUS. Each Investor is an "accredited
investor" as that term is defined in Rule 501(a)(3) of Regulation D.

      Section  3.7.  INFORMATION.  Such  Investor  and  its  advisors  (and  its
counsel),  if any,  have  been  furnished  with all  materials  relating  to the
business,  finances  and  operations  of the Company and  information  it deemed
material to making an informed investment decision, which have been requested by
such  Investor.  Such Investor and its advisors,  if any, have been afforded the
opportunity  to ask  questions of the Company and its  management.  Neither such
inquiries nor any other due diligence  investigations conducted by such Investor
or its advisors,  if any, or its representatives  shall modify,  amend or affect
such Investor's  right to rely on the Company's  representations  and warranties
contained in Section 4. below.  Such Investor  understands  that its  investment
involves a high degree of risk. Investor is in a position regarding the Company,
which, based upon employment,  family relationship or economic bargaining power,
enabled and enables Investor to obtain  information from the Company in order to
evaluate the merits and risks of this investment.  Such Investor has sought such
accounting,  legal and tax advice,  as it has  considered  necessary  to make an
informed investment decision with respect to this transaction.



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      Section  3.8.  RECEIPT OF  DOCUMENTS.  Such  Investor  and its counsel has
received and read in their entirety: (i) this Agreement and each representation,
warranty and covenant set forth herein, the Debenture,  the Registration  Rights
Agreement and the Escrow Agreement; (ii) all due diligence and other information
necessary  to verify the  accuracy  and  completeness  of such  representations,
warranties and covenants; (iii) the Company's SEC Documents; and (iv) answers to
all questions the Investor  submitted to the Company  regarding an investment in
the Company;  and the Investor has relied on the information  contained  therein
and has not  been  furnished  or  relied  on any  other  documents,  literature,
memorandum or prospectus.

      Section  3.9.  REGISTRATION  RIGHTS.  The parties  have  entered  into the
Registration Rights Agreement.

      Section  3.10. NO  ADVERTISEMENTS.  The Investor is not entering into this
Agreement as a result of or subsequent to any advertisement,  article, notice or
other communication  published in any newspaper,  magazine,  or similar media or
broadcast over television or radio, or presented at any seminar or meeting.

      Section 3.11. NOT AN AFFILIATE.  The Investor is not an officer,  director
or "affiliate"  (as that term is defined in Rule 405 of the  Securities  Act) of
the Company.  The Investor  agrees that  following  the date of the Agreement it
will not, and will cause its Affiliates not to engage in any short sales, swaps,
purchasing of puts, or other hedging activities with respect to the Common Stock
or any  activity  that  involves  the direct or indirect  use of Common Stock to
hedge its  investment in the  Debentures  until the expiration of the conversion
period of the Debentures.

      Section 3.12. AUTHORIZATION; ENFORCEMENT. This Agreement has been duly and
validly  authorized,  executed and delivered on behalf of such Investor and is a
valid and binding agreement of such Investor  enforceable in accordance with its
terms,  except as such  enforceability  may be limited by general  principles of
equity and to applicable  bankruptcy,  insolvency,  reorganization,  moratorium,
liquidation  and other  similar laws  relating to, or affecting  generally,  the
enforcement of applicable creditors' rights and remedies.

      Section  3.13.  DUE  FORMATION OF CORPORATE  AND OTHER  INVESTORS.  If the
Investor is a  corporation,  trust,  partnership  or other entity that is not an
individual  person,  it has been  formed  and  validly  exists  and has not been
organized for the specific  purpose of this  transaction  and is not  prohibited
from doing so.

      Section 3.14. DUE AUTHORIZATION OF FIDUCIARY INVESTORS. If the Investor is
purchasing the Securities in a fiduciary  capacity for another person or entity,
including,  without limitation, a corporation,  partnership,  trust or any other
entity,  the Investor  has been duly  authorized  and  empowered to execute this
Agreement  and  such  other  person  fulfills  all  the  requirements  for  this
transaction  and  agrees  to  be  bound  by  the  obligations,  representations,
warranties,  and covenants  contained herein.  Upon request of the Company,  the
Investor  will  provide  true,  complete  and  current  copies  of all  relevant
documents  creating the  Investor,  authorizing  its  investment  in the Company
and/or evidencing the satisfaction of the foregoing.

      Section  3.15.  FURTHER  REPRESENTATIONS  BY  FOREIGN  INVESTORS.  If  the
Investor  is  not a  U.S.  Person  (as  defined  below),  such  Investor  hereby
represents that such Investor is satisfied as to the full observance of the laws


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of such  Investor's  jurisdiction in connection with any invitation to subscribe
for the  securities  or any  use of this  Agreement,  including:  (i) the  legal
requirements of such Investor's jurisdiction for the purchase of the securities,
(ii) any foreign exchange  restrictions  applicable to such purchase,  (iii) any
governmental or other consents that may need to be obtained, and (iv) the income
tax and other tax  consequences,  if any, which may be relevant to the purchase,
holding,  redemption,  sale,  or transfer  of the  securities.  Such  Investor's
subscription and payment for, and such Investor's continued beneficial ownership
of, the securities  will not violate any applicable  securities or other laws of
such Investor's  jurisdiction.  The term "U.S. PERSON" as used herein shall mean
any person who is a citizen or resident of the United  States or Canada,  or any
state,  territory  or  possession  thereof,  including,  but not limited to, any
estate  of any such  person,  or any  corporation,  partnership,  trust or other
entity created or existing under the laws thereof,  or any entity  controlled or
owned by any of the foregoing.

                                   ARTICLE 4.
                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

      Except as stated below or in the SEC  Documents,  or in any  amendments or
supplements  thereto,  the  Company  hereby  represents  and  warrants  to,  and
covenants  with, the Investors that the following are true and correct as of the
date hereof and as of the Advance Date:

      Section  4.1.   ORGANIZATION  AND  QUALIFICATION.   The  Company  and  its
subsidiaries  are  corporations  duly  organized  and  validly  existing in good
standing under the laws of the jurisdiction in which they are incorporated,  and
have the requisite corporate power to own their properties and to carry on their
business as now being  conducted.  Each of the Company and its  subsidiaries  is
duly  qualified as a foreign  corporation to do business and is in good standing
in every  jurisdiction in which the nature of the business conducted by it makes
such  qualification  necessary,  except to the extent  that the failure to be so
qualified or be in good standing would not have a material adverse effect on the
Company and its subsidiaries taken as a whole.

      Section   4.2.   AUTHORIZATION;   ENFORCEMENT;   COMPLIANCE   WITH   OTHER
INSTRUMENTS.  (i) The Company has the requisite corporate power and authority to
enter into and perform this Agreement, the Registration Rights Agreement and any
related  agreements,  and to consummate the transactions  contemplated hereby in
accordance with the terms hereof and thereof, (ii) the execution and delivery of
this Agreement,  the Registration Rights Agreement and any related agreements by
the Company and the consummation by it of the transactions  contemplated  hereby
and  thereby,  including  the  issuance  of  shares  of  Common  Stock  upon the
conversion of the Debentures (the "DEBENTURE SHARES"), have been duly authorized
by the Company's Board of Directors and no further consent or  authorization  is
required by the Company, its Board of Directors or its stockholders,  (iii) this
Agreement,  the Registration  Rights  Agreement and any related  agreements have
been duly  executed  and  delivered  by the Company,  (iv) this  Agreement,  the
Registration  Rights Agreement and any related  agreements  constitute the valid
and  binding  obligations  of the  Company  enforceable  against  the Company in
accordance  with their terms,  except as such  enforceability  may be limited by
general   principles   of   equity   or   applicable   bankruptcy,   insolvency,
reorganization,   moratorium,  liquidation  or  similar  laws  relating  to,  or
affecting generally, the enforcement of creditors' rights and remedies.


                                       9
<PAGE>


      Section 4.3. CAPITALIZATION. As of the date hereof, the authorized capital
stock of the Company consists of 50,000,000  shares of Common Stock, of which as
of date hereof, [36,027,378] shares were issued and outstanding,  and 10,000,000
shares of  preferred  stock,  no par value,  of which no shares  were issued and
outstanding.  All of such  outstanding  shares have been validly  issued and are
fully paid and  nonassessable.  Except as  disclosed  in the SEC  Documents,  no
shares of Common  Stock are subject to  preemptive  rights or any other  similar
rights or any liens or encumbrances suffered or permitted by the Company. Except
as  disclosed  in  Schedule  4.3  attached  hereto  or as  disclosed  in the SEC
Documents,  as of the  date of this  Agreement,  (i)  there  are no  outstanding
options,  warrants,  scrip,  rights to subscribe to, calls or commitments of any
character  whatsoever relating to, or securities or rights convertible into, any
shares of capital stock of the Company or any of its subsidiaries, or contracts,
commitments,  understandings  or arrangements by which the Company or any of its
subsidiaries is or may become bound to issue additional  shares of capital stock
of the Company or any of its subsidiaries or options, warrants, scrip, rights to
subscribe to, calls or commitments of any character  whatsoever  relating to, or
securities  or rights  convertible  into,  any  shares of  capital  stock of the
Company  or  any  of its  subsidiaries,  (ii)  there  are  no  outstanding  debt
securities  and (iii) there are no  agreements or  arrangements  under which the
Company or any of its  subsidiaries  is obligated to register the sale of any of
their securities under the 1933 Act (except pursuant to the Registration  Rights
Agreements).  There are no securities or instruments  of the Company  containing
anti-dilution  or similar  provisions  that will be triggered by the issuance of
the  Debenture  or the  Debenture  Shares as described  in this  Agreement.  The
Company  has made  available  to the  Investor  true and  correct  copies of the
Company's Certificate of Incorporation,  as amended and as in effect on the date
hereof (the "CERTIFICATE OF  INCORPORATION"),  and the Company's By-laws,  as in
effect on the date  hereof  (the  "BY-LAWS"),  and the  terms of all  securities
convertible  into or exercisable for Common Stock and the material rights of the
holders thereof in respect thereto.

      Section 4.4. NO CONFLICT.  Except as disclosed in the SEC  Documents,  the
execution,  delivery and  performance  of this  Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby will not (i)
result in a violation of the  Certificate of  Incorporation,  or By-laws or (ii)
conflict with or constitute a default (or an event which with notice or lapse of
time or both  would  become a  default)  under,  or give to others any rights of
termination,   amendment,   acceleration  or  cancellation  of,  any  agreement,
indenture or  instrument  to which the Company or any of its  subsidiaries  is a
party, or result in a violation of any law, rule, regulation, order, judgment or
decree  (including  federal and state  securities  laws and  regulations and the
rules  and  regulations  of The  Nasdaq  Stock  Market  Inc.'s  Over-the-Counter
Bulletin Board on which the Common Stock is quoted) applicable to the Company or
any of its  subsidiaries or by which any property or asset of the Company or any
of its subsidiaries is bound or affected.  Except as disclosed in the Disclosure
Schedule  and/or  described  in the SEC  Documents,  neither the Company nor its
subsidiaries  is in violation of any term of or in default under its Certificate
of  Incorporation  or  By-laws  or  their  organizational  charter  or  by-laws,
respectively,  or any  material  contract,  agreement,  mortgage,  indebtedness,
indenture,  instrument,  judgment,  decree  or  order  or any  statute,  rule or
regulation  applicable to the Company or its  subsidiaries.  The business of the
Company and its subsidiaries is not being conducted,  and shall not be conducted
in violation of any material  law,  ordinance,  regulation  of any  governmental
entity.  Except as  specifically  contemplated by this Agreement and as required
under the 1933 Act and any applicable  state securities laws, the Company is not
required to obtain any consent, authorization or order of, or make any filing or


                                       10
<PAGE>


registration with, any court or governmental  agency in order for it to execute,
deliver  or  perform  any of its  obligations  under  or  contemplated  by  this
Agreement or the  Registration  Rights  Agreement in  accordance  with the terms
hereof  or  thereof.   All  consents,   authorizations,   orders,   filings  and
registrations  which the Company is required to obtain pursuant to the preceding
sentence  have been  obtained or effected  on or prior to the date  hereof.  The
Company and its  subsidiaries  are unaware of any facts or  circumstance,  which
might give rise to any of the foregoing.

      Section 4.5. NO DEFAULT.  Except as described  in the SEC  Documents,  the
Disclosure Schedule, and/or this Agreement, the Company is not in default in the
performance  or observance of any material  obligation,  agreement,  covenant or
condition contained in any indenture,  mortgage, deed of trust or other material
instrument or agreement to which it is a party or by which it is or its property
is bound and neither the  execution,  nor the delivery by the  Company,  nor the
performance by the Company of its obligations under this Agreement or any of the
Exhibits or  attachments  hereto,  including  the  conversion  provision  of the
Debentures,  will  conflict  with or result in the breach or violation of any of
the terms or provisions of, or constitute a default or result in the creation or
imposition  of any lien or charge on any  assets or  properties  of the  Company
under,  any  material  indenture,  mortgage,  deed of trust  or  other  material
agreement  applicable  to the  Company or  instrument  to which the Company is a
party or by which it is bound,  other than  anti-dilution  provisions of certain
agreements  and  instruments  with  respect to warrants  and other  Common Stock
equivalents, or any statute or the memorandum or Certificate of Incorporation of
the Company or any decree,  judgment,  order rules of regulation of any court or
governmental  agency  or  body  having  jurisdiction  over  the  Company  or its
properties,  in each  case  which  default,  lien or charge is likely to cause a
material adverse effect on the Company's business and financial condition.

      Section 4.6. ABSENCE OF EVENTS OF DEFAULT. Except for matters described in
the SEC Documents,  the Disclosure  Schedule and/or this Agreement,  no Event of
Default, as defined in the respective agreement to which the Company is a party,
and no event  which,  with the giving of notice or the  passage of time or both,
would  become  an  Event  of  Default  (as  so  defined),  has  occurred  and is
continuing,  which  would  have a  material  adverse  effect  on  the  Company's
business, properties, prospects, financial condition or results of operations.

      Section 4.7.  GOVERNMENTAL  CONSENT,  ETC. Except for matters described in
the SEC Documents,  the Disclosure Schedule and/or this Agreement and except for
any required registration or filings with applicable federal or state securities
authorities,   no  consent,   approval  or   authorization  of  or  designation,
declaration or filing with any governmental authority on the part of the Company
is  required  in  connection  with the  valid  execution  and  delivery  of this
Agreement,  or the offer, sale or issuance of the securities  hereunder,  or the
consummation of any other transaction contemplated hereby.

      Section  4.8.   INTELLECTUAL   PROPERTY   RIGHTS.   The  Company  and  its
subsidiaries  own or possess  adequate rights or licenses to use all trademarks,
trade names, service marks, service mark registrations,  service names, patents,
patent  rights,  copyrights,   inventions,  licenses,  approvals,   governmental
authorizations,  trade secrets and rights  necessary to conduct their respective
businesses  as now  conducted.  Except as set forth in the  Disclosure  Schedule
and/or described in the SEC Documents,  none of the Company's trademarks,  trade
names, service marks, service mark registrations, service names, patents, patent


                                       11
<PAGE>


rights, copyrights,  inventions, licenses, approvals, government authorizations,
trade secrets, or other intellectual property rights have expired or terminated,
or are expected to expire or  terminate in the near future.  The Company and its
subsidiaries do not have any knowledge of any infringement by the Company or its
subsidiaries  of  trademark,   trade  name  rights,   patents,   patent  rights,
copyrights,  inventions,  licenses,  service names,  service marks, service mark
registrations,  trade secret or other similar  rights of others,  or of any such
development  of similar or identical  trade secrets or technical  information by
others and,  except as set forth on the SEC Documents,  the Disclosure  Schedule
and/or this  Agreement,  to the  knowledge  of the  Company,  there is no claim,
action  or  proceeding  being  made  or  brought  against,  or to the  Company's
knowledge,  being threatened against, the Company or its subsidiaries  regarding
trademark,  trade name, patents, patent rights, invention,  copyright,  license,
service names, service marks, service mark registrations,  trade secret or other
infringement;  and the Company and its  subsidiaries are unaware of any facts or
circumstances which might give rise to any of the foregoing. The Company and its
subsidiaries  have taken  reasonable  security  measures to protect the secrecy,
confidentiality and value of all of their intellectual properties.

      Section  4.9.  EMPLOYEE  RELATIONS.  Neither  the  Company  nor any of its
subsidiaries  is involved in any labor  dispute  nor,  to the  knowledge  of the
Company or any of its subsidiaries,  is any such dispute threatened. None of the
Company's or its subsidiaries'  employees is a member of a union and the Company
and its subsidiaries believe that their relations with their employees are good.

      Section 4.10. ENVIRONMENTAL LAWS. The Company and its subsidiaries are (i)
in compliance with any and all applicable foreign, federal, state and local laws
and  regulations  relating to the  protection  of human  health and safety,  the
environment  or  hazardous  or  toxic   substances  or  wastes,   pollutants  or
contaminants ("ENVIRONMENTAL LAWS"), (ii) have received all permits, licenses or
other approvals required of them under applicable  Environmental Laws to conduct
their  respective  businesses  and  (iii) are in  compliance  with all terms and
conditions of any such permit, license or approval.

      Section  4.11.  TITLE.  The  Company  and its  subsidiaries  have good and
marketable  title in fee  simple to all real  property  and good and  marketable
title to all personal  property  owned by them which is material to the business
of the Company and its  subsidiaries,  except as described in the SEC Documents,
the  Disclosure  Schedule  and/or this  Agreement,  or incurred in the  ordinary
course of business and which do not materially affect the value of such property
and do not interfere  with the use made and proposed to be made of such property
by the Company and its subsidiaries. Any real property and facilities held under
lease  by the  Company  and its  subsidiaries  are  held by  them  under  valid,
subsisting and  enforceable  leases with such exceptions as are not material and
do not interfere  with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries.

      Section  4.12.  INSURANCE.  The Company and each of its  subsidiaries  are
insured by insurers of recognized financial  responsibility  against such losses
and risks and in such  amounts  as  management  of the  Company  believes  to be
prudent  and  customary  in  the   businesses  in  which  the  Company  and  its
subsidiaries  are engaged.  Neither the Company nor any such subsidiary has been
refused any insurance coverage sought or applied for and neither the Company nor
any such  subsidiary has any reason to believe that it will not be able to renew


                                       12
<PAGE>


its existing  insurance  coverage as and when such coverage expires or to obtain
similar  coverage  from  similar  insurers as may be  necessary  to continue its
business at a cost that would not materially and adversely affect the condition,
financial or otherwise,  or the earnings,  business or operations of the Company
and its subsidiaries, taken as a whole.

      Section 4.13. REGULATORY PERMITS. The Company and its subsidiaries possess
all material certificates,  authorizations and permits issued by the appropriate
federal,  state or foreign  regulatory  authorities  necessary to conduct  their
respective  businesses,  and neither the  Company  nor any such  subsidiary  has
received any notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit.

      Section 4.14.  INTERNAL ACCOUNTING  CONTROLS.  The Company and each of its
subsidiaries  maintain a system of internal  accounting  controls  sufficient to
provide  reasonable  assurance that (i)  transactions are executed in accordance
with  management's  general or specific  authorizations,  (ii)  transactions are
recorded  as  necessary  to  permit  preparation  of  financial   statements  in
conformity with generally accepted  accounting  principles and to maintain asset
accountability,  (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 action is taken with respect to any differences.

      Section 4.15. NO MATERIALLY ADVERSE CONTRACTS, ETC. Except as set forth in
the SEC Documents,  the Disclosure  Schedule and/or this Agreement,  neither the
Company nor any of its  subsidiaries  is subject to any  charter,  corporate  or
other legal  restriction,  or any judgment,  decree,  order,  rule or regulation
which in the judgment of the Company's officers has or is expected in the future
to have a  Material  Adverse  Effect on the  business,  properties,  operations,
financial  condition,  results of  operations or prospects of the Company or its
subsidiaries.  Neither the Company nor any of its subsidiaries is a party to any
contract or agreement which in the judgment of the Company's  officers has or is
expected  to  have  a  Material  Adverse  Effect  on the  business,  properties,
operations,  financial  condition,  results of  operations  or  prospects of the
Company or its subsidiaries.

      Section 4.16.  LITIGATION.  Except as disclosed in the SEC Documents,  the
Disclosure Schedule and/or this Agreement, there is no action, suit, proceeding,
inquiry  or  investigation  before or by any  court,  public  board,  government
agency, self-regulatory organization or body pending or, to the knowledge of the
Company or any of its subsidiaries, threatened against or affecting the Company,
the Common Stock or any of the Company's  subsidiaries,  wherein an  unfavorable
decision,  ruling or  finding  would (i) have a Material  Adverse  Effect on the
transactions   contemplated   hereby  (ii)  adversely  affect  the  validity  or
enforceability  of, or the  authority  or ability of the  Company to perform its
obligations under this Agreement or any of the documents contemplated herein, or
(iii)  except as  expressly  disclosed  in the SEC  Documents,  have a  Material
Adverse Effect on the business, operations,  properties,  financial condition or
results of operation of the Company and its subsidiaries taken as a whole.

      Section 4.17. SUBSIDIARIES.  Except as disclosed in the SEC Documents, the
Disclosure Schedule and/or this Agreement, the Company does not presently own or
control,  directly  or  indirectly,  any  interest  in  any  other  corporation,
partnership, association or other business entity.


                                       13
<PAGE>


      Section 4.18. OTHER  OUTSTANDING  SECURITIES.  As of the date hereof only,
other than  warrants and options to acquire  shares of Common Stock as disclosed
in the SEC Documents,  there are no other warrants and options  registered  with
the SEC, which are available for sale as unrestricted ("FREE TRADING") stock.

      Section  4.19.  USE OF  PROCEEDS.  The  Company  represents  that  the net
proceeds  from this offering will be used for working  capital  purposes  and/or
general  corporate  purposes.  However,  in no event shall the net proceeds from
this  offering  be used by the  Company  for the  payment (or loaned to any such
person for the payment) of any  judgment,  or other  liability,  incurred by any
executive officer, officer, director, or employee of the Company.

      Section 4.20. FURTHER REPRESENTATION AND WARRANTIES OF THE COMPANY. For so
long  as  any  securities   issuable  hereunder  held  by  the  Investor  remain
outstanding, the Company acknowledges,  represents,  warrants and agrees that it
will use commercially  reasonable  efforts to maintain the listing of its Common
Stock on the NASDAQ Small Cap Stock Market and/or the Over-the-Counter  Bulletin
Board.

      Section 4.21.  SEC FILINGS;  FULL  DISCLOSURE.  Since January 1, 2001, the
Company has filed all reports,  schedules, forms, statements and other documents
required to be filed by it with the SEC under of the  Exchange  Act. The Company
has  delivered to the  Investors  or their  representatives,  or made  available
through the SEC's website at  http://www.sec.gov.,  true and complete  copies of
the SEC Documents. As of their respective dates, the financial statements of the
Company disclosed in the SEC Documents (the "FINANCIAL  STATEMENTS") complied as
to form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto.  Such Financial
Statements have been prepared in accordance with generally  accepted  accounting
principles, consistently applied, during the periods involved (except (i) as may
be otherwise  indicated in such Financial  Statements or the notes  thereto,  or
(ii) in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary  statements)  and fairly present in all
material respects the financial  position of the Company as of the dates thereof
and the  results of its  operations  and cash flows for the  periods  then ended
(subject,  in the  case  of  unaudited  statements,  to  normal  year-end  audit
adjustments).  No other  information  provided by or on behalf of the Company to
the  Investor  which is not included in the SEC  Documents,  contains any untrue
statement of a material  fact or omits to state any material  fact  necessary in
order to make the statements  therein,  in the light of the circumstances  under
which they were made, not misleading.

      Section  4.22.  FULL  DISCLOSURE.  There is no fact  known to the  Company
(other than general economic  conditions known to the public generally) that has
not been  disclosed  in writing to the  Investor  that (i) could  reasonably  be
expected to have a Material Adverse Effect on the financial  condition or in the
earnings,  business  affairs,  business  prospects,  properties or assets of the
Company, or (ii) could reasonably be expected to materially and adversely affect
the  ability  of the  Company  to  perform  its  obligations  pursuant  to  this
Agreement.

      Section 4.23.  OPINION OF COUNSEL.  The Investor  shall receive an opinion
letter from  counsel to the Company  (updated  where  applicable)  prior to each
Closing substantially to the effect that:



                                       14
<PAGE>


         (a)  the  Company  is   incorporated   and  validly   existing  in  the
jurisdiction of its incorporation.  The Company and/or its subsidiaries are duly
qualified to do business as a foreign corporation and is in good standing in all
jurisdictions  where,  to such  counsel's  knowledge,  the  Company  and/or  its
subsidiaries  owns  or  leases  properties,   maintains  employees  or  conducts
business,  except for jurisdictions in which the failure to so qualify would not
have a Material Adverse Effect on the Company,  and has all requisite  corporate
power and authority to own its properties and conduct its business;

         (b) to such counsel's  knowledge,  except for matters  disclosed in the
SEC  Documents,  there is no action,  proceeding or  investigation  pending,  or
threatened against the Company which might result, either individually or in the
aggregate, in any material adverse change in the business or financial condition
of the Company;

         (c) to such counsel's  knowledge,  except for matters  disclosed in the
SEC Documents, the Company is not a party to or subject to the provisions of any
order, writ, injunction, judgment or decree of any court or government agency or
instrumentality;

         (d) the shares of Common  Stock  issuable  upon the  conversion  of the
Debentures  have been duly  authorized  and upon issuance will be validly issued
under the laws of the Company's state of incorporation;

         (e) this Agreement,  the issuance of the Debentures hereunder,  and the
shares of Common Stock  issuable upon  conversion of the  Debentures,  have been
duly  approved  by all  required  corporate  action and that all such  shares of
Common  Stock,   upon  execution  and  delivery  shall  be  validly  issued  and
outstanding, fully paid and nonassessable;

         (f) the  issuance  of the  Debentures  and the  shares of Common  Stock
issuable  upon  conversion  thereof,  do  not  violate  the  applicable  listing
agreement between the Company and any securities exchange or market on which the
Company's securities are listed;

         (g) the authorized  capital stock of the Company consists of 50,000,000
shares of Common Stock,  $0.0001 par value per share,  and 10,000,000  shares of
preferred stock; and

         (h) the Common  Stock is  registered  pursuant to Section  12(g) of the
Exchange Act.

      Section  4.24.  OPINION  OF  COUNSEL.  The  Company  will  obtain  for the
Investor, at the Company's expense, any and all opinions of counsel which may be
reasonably  required  in  order to  convert,  exercise  or sell  the  securities
issuable hereunder.

      Section  4.25.  DILUTION.  The  Company  is aware  and  acknowledges  that
conversion of the Debentures  could cause dilution to existing  shareholders and
could significantly increase the outstanding number of shares of Common Stock.

      Section 4.26.  TAX STATUS.  The Company and each of its  subsidiaries  has
made or filed all federal and state  income and all other tax  returns,  reports
and declarations required by any jurisdiction to which it is subject (unless and
only to the extent that the Company and each of its  subsidiaries  has set aside
on its books  provisions  reasonably  adequate for the payment of all unpaid and


                                       15
<PAGE>


unreported taxes) and has paid all taxes and other governmental  assessments and
charges  that are  material  in amount,  shown or  determined  to be due on such
returns,  reports and  declarations,  except those being contested in good faith
and has set aside on its books provisions reasonably adequate for the payment of
all taxes for periods  subsequent to the periods to which such returns,  reports
or declarations  apply. There are no unpaid taxes in any material amount claimed
to be due by the taxing authority of any  jurisdiction,  and the officers of the
Company know of no basis for any such claim.

                                   ARTICLE 5.
                                 INDEMNIFICATION

      Section 5.1.  INDEMNIFICATION.  Each of the Company and the Investor agree
to indemnify  the other and to hold the other  harmless from and against any and
all losses,  damages,  liabilities,  costs and  expenses  (including  reasonable
attorney's  fees)  which the other may sustain or incur in  connection  with the
breach by the  indemnifying  party of any  representation,  warranty or covenant
made by it in this Agreement.

                                   ARTICLE 6.
                            COVENANTS OF THE COMPANY

      Section 6.1. REGISTRATION RIGHTS. The Company shall cause the Registration
Rights Agreement to remain in full force and effect and the Company shall comply
in all material respects with the terms thereof.

      Section 6.2.  RESERVATION OF COMMON STOCK. The Company shall authorize and
reserve and keep available at all times,  free of preemptive  rights,  shares of
Common  Stock as shall be  necessary  for the purpose of enabling the Company to
satisfy  any  obligation  to  issue  shares  of  Common  Stock   underlying  the
Debentures,  such  number  of shares of  Common  Stock to be  reserved  shall be
calculated  based upon the Bid Price of the Common Stock from time to time while
such Debentures are  outstanding.  The number of shares so reserved from time to
time, while such Debentures are outstanding, as theretofore increased or reduced
as hereinafter  provided,  may be limited to shares  issuable under  outstanding
Debentures at the Bid Price reduced by the number of shares  actually  delivered
pursuant  to the  Debentures  and the  number  of shares  so  reserved  shall be
increased or decreased to reflect potential increases or decreases in the Common
Stock that the Company may thereafter be so obligated to issue.

      Section 6.3. LISTING OF COMMON STOCK.  The Company further agrees,  if the
Company applies to have the Common Stock traded on any Principal  Market,  other
than the Nasdaq Small Cap Market, it will include in such application the shares
of Common Stock  issuable upon the  conversion of the  Debentures  and will take
such other action as is necessary or desirable in the opinion of the Investor to
cause the Common Stock to be listed on such other  Principal  Market as promptly
as  possible  and will use  commercially  reasonable  efforts  to  comply in all
respects with the Company's  reporting,  filing and other  obligations under the
bylaws or rules of the Principal Market.

      Section 6.4. EXCHANGE ACT REGISTRATION.  The Company will cause its Common
Stock to continue to be registered under Section 12(g) of the Exchange Act, will
use its best efforts to comply in all  respects  with its  reporting  and filing


                                       16
<PAGE>


obligations  under the  Exchange  Act,  and will not take any action or file any
document  (whether or not permitted by the Exchange Act or the rules thereunder)
to  terminate  or suspend  such  registration  or to  terminate  or suspend  its
reporting and filing obligations under said Act.

      Section 6.5. LEGENDS.  The certificates  evidencing the Common Stock to be
sold by the Investor  pursuant to Section 9.1. shall be free of legends,  except
as set forth herein.

      Section  6.6.  CORPORATE  EXISTENCE.  The  Company  will  take  all  steps
necessary to preserve and continue the corporate existence of the Company.

      Section 6.7. NOTICE OF CERTAIN EVENTS AFFECTING  REGISTRATION;  SUSPENSION
OF RIGHT TO MAKE AN ADVANCE.  The Company will  immediately  notify the Investor
upon its becoming  aware of the  occurrence  of any of the  following  events in
respect  of a  registration  statement  or  related  prospectus  relating  to an
offering of  Registrable  Securities:  (i) receipt of any request for additional
information  by the SEC or any other  federal  or state  governmental  authority
during the period of effectiveness of the Registration  Statement for amendments
or supplements to the  registration  statement or related  prospectus;  (ii) the
issuance by the SEC or any other federal or state governmental  authority of any
stop order suspending the  effectiveness  of the  Registration  Statement or the
initiation  of  any  proceedings   for  that  purpose;   (iii)  receipt  of  any
notification  with respect to the suspension of the  qualification  or exemption
from  qualification  of  any of  the  Registrable  Securities  for  sale  in any
jurisdiction  or the  initiation  or  threatening  of any  proceeding  for  such
purpose;  (iv) the happening of any event that makes any  statement  made in the
Registration  Statement or related  prospectus of any document  incorporated  or
deemed to be incorporated therein by reference untrue in any material respect or
that requires the making of any changes in the Registration  Statement,  related
prospectus or documents so that, in the case of the Registration  Statement,  it
will not contain any untrue  statement  of a material  fact or omit to state any
material fact required to be stated  therein or necessary to make the statements
therein not misleading,  and that in the case of the related prospectus, it will
not  contain  any  untrue  statement  of a  material  fact or omit to state  any
material fact required to be stated  therein or necessary to make the statements
therein,  in the light of the  circumstances  under  which they were  made,  not
misleading; and (v) the Company's reasonable determination that a post-effective
amendment to the Registration Statement would be appropriate.  The Company shall
not deliver to the Investor any Advance Notice during the continuation of any of
the foregoing  events.  The Company will promptly make available to the Investor
any such supplement or amendment to the related prospectus.

      Section 6.8. EXPECTATIONS REGARDING ADVANCE NOTICES.  Within ten (10) days
after the  commencement  of each calendar  quarter  occurring  subsequent to the
commencement of the Commitment Period, the Company must notify the Investor,  in
writing, as to its reasonable expectations as to the dollar amount it intends to
raise  during such  calendar  quarter,  if any,  through the issuance of Advance
Notices.  Such  notification  shall  constitute  only the  Company's  good faith
estimate and shall in no way  obligate the Company to raise such amount,  or any
amount,  or otherwise limit its ability to deliver Advance Notices.  The failure
by the  Company  to comply  with this  provision  can be cured by the  Company's
notifying  the  Investor,   in  writing,  at  any  time  as  to  its  reasonable
expectations with respect to the current calendar quarter.


                                       17
<PAGE>


      Section 6.9.  CONSOLIDATION;  MERGER.  The Company  shall not, at any time
after the date hereof, effect any merger or consolidation of the Company with or
into,  or a transfer  of all or  substantially  all the assets of the Company to
another  entity (a  "CONSOLIDATION  EVENT")  unless the  resulting  successor or
acquiring  entity  (if  not the  Company)  assumes  by  written  instrument  the
obligation to deliver to the investor such shares of stock and/or  securities as
the Investor is entitled to receive pursuant to this Agreement.

      Section 6.10.  ISSUANCE OF DEBENTURES.  The sale of the Debentures and the
issuance of the shares of Commons Stock  pursuant to conversion  hereof shall be
made in accordance  with the provision and  requirements  of Section 4(2) of the
Securities Act, or Regulation D and any applicable state securities law.

                                   ARTICLE 7.
                CONDITIONS FOR ADVANCE AND CONDITIONS TO CLOSING

      Section  7.1.  CONDITIONS  PRECEDENT TO THE  OBLIGATION  OF THE COMPANY TO
ISSUE AND SELL THE DEBENTURES.  The obligation hereunder of the Company to issue
and sell the  Debentures to the Investor  incident to each Closing is subject to
the satisfaction,  or waiver by the Company,  at or before each such Closing, of
each of the conditions set forth below.

         (a)  ACCURACY OF THE  INVESTOR'S  REPRESENTATION  AND  WARRANTIES.  The
representations  and warranties of the Investor shall be true and correct in all
material  respects as of the date of this  Agreement  and as of the date of each
such Closing as though made at each such time.

         (b)  PERFORMANCE BY THE INVESTOR.  The Investor  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 Investor at or prior to such Closing.

      Section 7.2.  CONDITIONS  PRECEDENT TO THE RIGHT OF THE COMPANY TO DELIVER
AN ADVANCE NOTICE AND THE OBLIGATION OF THE INVESTOR TO PURCHASE DEBENTURES. The
right of the  Company to deliver an  Advance  Notice and the  obligation  of the
Investor  hereunder to acquire and pay for the Debentures  incident to a Closing
is subject to the  satisfaction  or waiver by the  Investor,  on (i) the date of
delivery of such  Advance  Notice and (ii) the  applicable  Advance Date (each a
"Condition Satisfaction Date"), of each of the following conditions:

         (a)  REGISTRATION  OF THE COMMON STOCK WITH THE SEC. The Company  shall
have filed with the SEC a  Registration  Statement with respect to the resale of
the  Registrable  Securities  in accordance  with the terms of the  Registration
Rights  Agreement.  As set  forth  in the  Registration  Rights  Agreement,  the
Registration  Statement shall have previously  become effective and shall remain
effective on each  Condition  Satisfaction  Date and (i) neither the Company nor
the Investor  shall have  received  notice that the SEC has issued or intends to
issue a stop order with  respect to the  Registration  Statement or that the SEC
has  suspended or withdrawn the  effectiveness  of the  Registration  Statement,
either temporarily or permanently, or intends or has threatened to do so (unless
the SEC's concerns have been addressed and the Investor is reasonably  satisfied
that the SEC no longer is considering or intends to take such action),  and (ii)


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<PAGE>


no  other  suspension  of the  use or  withdrawal  of the  effectiveness  of the
Registration  Statement  or related  prospectus  shall exist.  The  Registration
Statement  must  have  been  declared  effective  by the SEC  prior to the first
Advance Date.

         (b)  AUTHORITY.  The  Company  shall  have  obtained  all  permits  and
qualifications   required  by  any  applicable  state  in  accordance  with  the
Registration  Rights  Agreement for the offer and sale of the Debentures and the
shares of Common Stock issuable upon the conversion  thereof,  or shall have the
availability  of exemptions  therefrom.  The sale and issuance of the Debentures
and the shares of Common Stock  issuable  upon the  conversion  thereof shall be
legally permitted by all laws and regulations to which the Company is subject.

         (c)  FUNDAMENTAL  CHANGES.  . There  shall not  exist  any  fundamental
changes to the information set forth in the  Registration  Statement which would
require  the  Company to file a  post-effective  amendment  to the  Registration
Statement.

         (d)  PERFORMANCE  BY THE  COMPANY.  The Company  shall have  performed,
satisfied and complied in all material  respects with all covenants,  agreements
and conditions  required by this Agreement,  the Debenture and the  Registration
Rights  Agreement to be performed,  satisfied or complied with by the Company at
or prior to each Condition Satisfaction Date.

         (e) 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 that
prohibits or directly and adversely affects any of the transactions contemplated
by this Agreement, and no proceeding shall have been commenced that may have the
effect  of   prohibiting  or  adversely   affecting  any  of  the   transactions
contemplated by this Agreement.

         (f) NO  SUSPENSION  OF TRADING IN OR  DELISTING  OF COMMON  STOCK.  The
trading of the Common Stock has not been  suspended by the SEC or the  Principal
Market (if the Common  Stock is traded on a Principal  Market).  The issuance of
shares of Common Stock with respect to the applicable Closing, if any, shall not
violate the shareholder  approval  requirements of the Principal  Market (if the
Common  Stock is traded  on a  Principal  market).  The  Company  shall not have
received any notice threatening the listing of the Common Stock on the Principal
Market (if the Common Stock is traded on a Principal Market).

         (g) MONTHLY MAXIMUM ADVANCE AMOUNT. The amount of the advance requested
by the Company does not exceed the Maximum Advance Amount. The restriction on



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<PAGE>


the Monthly  Maximum  Advance  Amount as outlined in Section  1.22 herein may be
waived only by the Investor.

         (h) NO KNOWLEDGE. The Company has no knowledge of any event more likely
than not to have  the  effect  of  causing  such  Registration  Statement  to be
suspended or otherwise ineffective (which event is more likely than not to occur
within the fifteen  (15) Trading  Days  following  the Trading Day on which such
Notice is deemed delivered).

         (i) ESCROW  AGREEMENT.  The parties  hereto shall have entered into the
Escrow Agreement in the form attached hereto.

         (j) OTHER. On each Condition Satisfaction Date, the Investor shall have
received  and  been  reasonably  satisfied  with  such  other  certificates  and
documents as shall have been  reasonably  requested by the Investor in order for
the Investor to confirm the Company's  satisfaction  of the conditions set forth
in this Section 7.2., including,  without limitation,  a certificate executed in
either  case by an  executive  officer of the Company and to the effect that all
the  conditions to such Closing shall have been satisfied as at the date of each
such certificate.

                                   ARTICLE 8.
         DUE DILIGENCE REVIEW; NON-DISCLOSURE OF NON-PUBLIC INFORMATION

      Section 8.1. DUE DILIGENCE REVIEW. Prior to the filing of the Registration
Statement the Company  shall make  available  for  inspection  and review by the
Investor,  advisors to and  representatives  of the  Investor,  any  underwriter
participating in any disposition of the Registrable  Securities on behalf of the
Investor pursuant to the Registration Statement, any such registration statement
or amendment or supplement  thereto or any blue sky,  NASD or other filing,  all
financial and other  records,  all SEC Documents and other filings with the SEC,
and all other  corporate  documents  and  properties  of the  Company  as may be
reasonably  necessary  for the purpose of such review,  and cause the  Company's
officers,  directors  and  employees to supply all such  information  reasonably
requested by the Investor or any such representative,  advisor or underwriter in
connection with such Registration Statement (including,  without limitation,  in
response to all questions and other  inquiries  reasonably  made or submitted by
any of them),  prior to and from time to time after the filing and effectiveness
of the Registration  Statement for the sole purpose of enabling the Investor and
such representatives, advisors and underwriters and their respective accountants
and attorneys to conduct  initial and ongoing due diligence  with respect to the
Company and the accuracy of the Registration Statement.

      Section 8.2. NON-DISCLOSURE OF NON-PUBLIC INFORMATION.

         (a) The  Company  shall  not  disclose  non-public  information  to the
Investor,  advisors  to or  representatives  of the  Investor  unless  prior  to
disclosure of such information the Company  identifies such information as being
non-public   information   and  provides  the   Investor,   such   advisors  and
representatives  with the  opportunity  to  accept  or  refuse  to  accept  such
non-public information for review. The Company may, as a condition to disclosing
any  non-public  information  hereunder,  require the  Investor's  advisors  and
representatives  to enter into a  confidentiality  agreement in form  reasonably
satisfactory to the Company and the Investor.


                                       20
<PAGE>


         (b) Nothing  herein  shall  require the Company to disclose  non-public
information to the Investor or its advisors or representatives,  and the Company
represents that it does not disseminate  non-public information to any investors
who purchase stock in the Company in a public offering,  to money managers or to
securities analysts,  provided, however, that notwithstanding anything herein to
the contrary, the Company will, as hereinabove provided,  immediately notify the
advisors and representatives of the Investor and, if any,  underwriters,  of any
event or the existence of any  circumstance  (without any obligation to disclose
the specific  event or  circumstance)  of which it becomes  aware,  constituting
non-public  information (whether or not requested of the Company specifically or
generally  during  the course of due  diligence  by such  persons or  entities),
which, if not disclosed in the prospectus included in the Registration Statement
would  cause such  prospectus  to include a material  misstatement  or to omit a
material  fact  required to be stated  therein in order to make the  statements,
therein,  in light of the circumstances in which they were made, not misleading.
Nothing  contained  in this  Section  8.2.  shall be construed to mean that such
persons or entities other than the Investor  (without the written consent of the
Investor  prior to disclosure  of such  information)  may not obtain  non-public
information  in the course of conducting  due  diligence in accordance  with the
terms of this  Agreement  and nothing  herein shall  prevent any such persons or
entities  from  notifying  the Company of their  opinion  that based on such due
diligence by such persons or entities,  that the Registration Statement contains
an untrue  statement of material  fact or omits a material  fact  required to be
stated  in the  Registration  Statement  or  necessary  to make  the  statements
contained  therein,  in light of the  circumstances in which they were made, not
misleading.

                                   ARTICLE 9.
                                     LEGENDS

      Section 9.1. LEGENDS.  The Debentures will bear, and the Common Stock will
also bear a similar a legend, substantially in the form below (the "LEGEND"):


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

                                  ARTICLE 10.
                           CHOICE OF LAW/JURISDICTION

      Section 10.1. CHOICE OF LAW; VENUE: JURISDICTION.  This Agreement shall be
governed by and interpreted in accordance with the laws of the State of New York
without regard to the principles of conflict of laws. The parties  further agree
that any action  between  them shall be heard in New York  City,  New York,  and
expressly consent to the jurisdiction and venue of the Supreme Court of New York


                                       21
<PAGE>


and the United States  District Court for the Southern  District of New York for
the adjudication of any civil action asserted pursuant to this Paragraph.

                                  ARTICLE 11.
                             ASSIGNMENT; TERMINATION

      Section  11.1.  ASSIGNMENT.  Neither this  Agreement nor any rights of the
Investor or the Company  hereunder  may be assigned by either party to any other
person.

      Section  11.2.  TERMINATION.  The  obligations  of the  Investor  to  make
Advances  under  Article  2.  hereof  shall  terminate  two (2) years  after the
effective date of the Registration Statement.

                                  ARTICLE 12.
                                     NOTICES

      Section 12.1. NOTICES. All notices, demands, requests, consents, approvals
and other  communications  required or permitted  hereunder  shall be in writing
and, unless otherwise  specified herein,  shall be (i) personally  served,  (ii)
deposited  in the mail,  registered  or  certified,  return  receipt  requested,
postage  prepaid,  (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other  address as such party shall have  specified
most recently by written notice.

      Any  notice or other  communication  requested  or  permitted  to be given
hereunder  shall be deemed  effective  (a) upon hand  delivery  or  delivery  by
facsimile,  with accurate confirmation  generated by the transmitting  facsimile
machine, at the address or number designed 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 upon
actual  receipt of any mailing or delivery,  whichever  shall first  occur.  The
addresses for such communications shall be:

            If to the Company, to:   Nexland, Inc.
                                     1101 Brickell Avenue
                                     North Tower, 2nd Floor
                                     Miami, Florida  33131
                                     Attention:  Gregory S. Levine
                                                 President
                                     Telephone:  (305) 358-7771
                                     Facsimile:  (305) 358-3151




                                       22
<PAGE>


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

            If to the Transfer       Jersey Transfer & Trust
            Agent, to:               201 Bloomfield Avenue
                                     P.O. Box 36
                                     Verona, NJ  07044
                                     Attention:  Jeff Manger

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

      Either  party hereto may from time to time change its address or facsimile
number for notices  under this  Section  12.1.  by giving at least ten (10) days
prior written  notice of such changed  address or facsimile  number to the other
party hereto.

                                  ARTICLE 13.
                                  MISCELLANEOUS

      Section 13.1.  COUNTERPARTS/FACSIMILE/AMENDMENTS.  This  Agreement may  be
executed  in multiple  counterparts,  each of which may be executed by less than
all of the parties and shall be deemed to be an original  instrument which shall
be enforceable  against the parties actually executing such counterparts and all
of which  together  shall  constitute  one and the same  instrument.  Except  as
otherwise  stated  herein,  in  lieu  of the  original  documents,  a  facsimile
transmission  or  copy of the  original  documents  shall  be as  effective  and
enforceable  as the  original.  This  Agreement may be amended only by a writing
executed by all parties.

      Section  13.2.   ENTIRE  AGREEMENT.   This  Agreement,   the  Exhibits  or
Attachments  hereto,  which  include but are not limited to the  Debenture,  the
Registration  Rights  Agreement  and the Escrow  Agreement  set forth the entire
agreement and understanding of the parties relating to the subject matter hereof
and  supersedes  all  prior and  contemporaneous  agreements,  negotiations  and
understanding between the parties, both oral and writing relating to the line of
credit.

      Section 13.3.  REPORTING ENTITY FOR THE COMMON STOCK. The reporting entity
relied upon for the  determination of the trading price or trading volume of the
Common Stock on any given Trading Day for the purposes of this  Agreement  shall
be Bloomberg,  L.P. or any successor thereto.  The written mutual consent of the
Investor and the Company shall be required to employ any other reporting entity.

      Section 13.4. FEES AND EXPENSES.

         (a) LEGAL FEES. Each of the parties shall pay its own fees and expenses
(including the fees of any attorneys, accountants,  appraisers or others engaged
by  such  party)  in  connection  with  this  Agreement  and  the   transactions
contemplated hereby, except that the Company will pay the sum of Twenty Thousand


                                       23
<PAGE>


Dollars ($20,000), to Butler Gonzalez LLP for legal, administrative,  and escrow
fees, upon execution of this  Agreement.  Subsequently on each Advance Date, the
Company will pay Butler Gonzalez LLP, the sum of Five Hundred ($500) Dollars for
legal, administrative and escrow fees.

         (b)  INVESTMENT  ADVISER FEES.  Upon the execution of the Agreement the
Company will issue one hundred  twenty-six  thousand  (126,000) shares of Common
Stock to the May Davis Group, Inc. (the "INVESTMENT ADVISER"). The Company shall
grant to the Investment  Adviser,  upon the terms and conditions as set forth in
that certain Investment Adviser Agreement between the Company and the Investment
Adviser,  "piggy-back" registration rights with respect to such shares of Common
Stock.  In addition,  on each advance date the Company shall pay the  Investment
Adviser or it's duly appointed designee an amount equal to eight and 2/5 percent
(8.4%) of the  advance  directly  from the gross  proceeds of the  Advance.  The
Investment  Advisor  may apply the 8.4%  directly  to the  Advance  Amount.  The
Company hereby agrees that if such payment,  as is described  above, is not made
by the Company on the Advance  Date,  such payment will be made at the direction
of the Investor as outlined and mandated by Section 2.3. of this Agreement.

      Section 13.5. BROKERAGE. Each of the parties hereto represents that it has
had no dealings in connection  with this  transaction  with any finder or broker
who will demand  payment of any fee or  commission  from the other party,  other
than the Investment Adviser.  The Company on the one hand, and the Investor,  on
the other hand, agree to indemnify the other against and hold the other harmless
from any and all  liabilities to any person  claiming  brokerage  commissions or
finder's  fees on account of services  purported to have been rendered on behalf
of the indemnifying  party in connection with this Agreement or the transactions
contemplated hereby.

      Section  13.6.  CONFIDENTIALITY.   If  for  any  reason  the  transactions
contemplated by this Agreement are not  consummated,  each of the parties hereto
shall keep  confidential  any information  obtained from any other party (except
information  publicly  available  or in such  party's  domain  prior to the date
hereof,  and except as required by court order) and shall promptly return to the
other  parties  all  schedules,  documents,  instruments,  work  papers or other
written information without retaining copies thereof, previously furnished by it
as a result of this Agreement or in connection herein.

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                                       24

<PAGE>


      IN WITNESS  WHEREOF,  the  parties  hereto have caused this Line of Credit
Agreement to be executed by the undersigned,  thereunto duly  authorized,  as of
the date first set forth above.

                                       COMPANY:

                                       NEXLAND, INC.

                                       By: /s/ Gregory S. Levine
                                          ----------------------------------
                                       Name: Gregory S. Levine
                                       Title: President

                                       INVESTOR:

                                       CORNELL CAPITAL PARTNERS, LP

                                       By: Yorkville Advisors Management LLC
                                       Its: General Partner


                                       By:/s/ Mark A. Angelo
                                          ----------------------------------
                                       Name: Mark A. Angelo
                                       Its: Fund Manager








                                       25




<PAGE>


                              SCHEDULE OF INVESTORS




Cornell Capital Partners, L.P.
C/O Yorkville Advisors Management LLC
521 Fifth Avenue - 17th Floor
New York, NY 10175
















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