EXHIBIT 10(V)


                            CONVERTIBLE NOTE PURCHASE

                                    AGREEMENT

                         Dated as of September 21, 2001

                                      among

                        IMAGING TECHNOLOGIES CORPORATION

                                       and

                        THE PURCHASER LISTED ON EXHIBIT A

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TABLE OF CONTENTS

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<S>                                                                                                             <C>
ARTICLE I             Purchase and Sale of Note..................................................................59
         Section 1.1       Purchase and Sale of Note.............................................................59
         Section 1.2       The Conversion Shares.................................................................59
         Section 1.3       Purchase Price and Closing............................................................59
         Section 1.4       Warrant...............................................................................59

ARTICLE II            Representations and Warranties.............................................................59
         Section 2.1       Representations and Warranties of the Company.........................................59
         Section 2.2       Representations and Warranties of the Purchaser.......................................65

ARTICLE III           Covenants..................................................................................67
         Section 3.1       Securities Compliance.................................................................67
         Section 3.2       Registration and Listing..............................................................67
         Section 3.3       Inspection Rights.....................................................................67
         Section 3.4       Compliance with Laws..................................................................67
         Section 3.5       Keeping of Records and Books of Account...............................................67
         Section 3.6       Reporting Requirements................................................................67
         Section 3.7       Amendments............................................................................68
         Section 3.8       Other Agreements......................................................................68
         Section 3.9       Distributions.........................................................................68
         Section 3.10      Intentionally Omitted.................................................................68
         Section 3.11      Regulation S. ........................................................................68
         Section 3.12      Future Financings.....................................................................68
         Section 3.13      Reservation of Shares.................................................................68
         Section 3.14      Transfer Agent Instructions...........................................................68

ARTICLE IV            Conditions.................................................................................69
         Section 4.1       Conditions Precedent to the Obligation of the
                           Company to Sell the Note..............................................................69

ARTICLE V             Registration Rights........................................................................70

ARTICLE VI            Certificate Legend.........................................................................70
         Section 6.1       Legend................................................................................70

ARTICLE VII           Termination................................................................................71
         Section 7.1       Termination by Mutual Consent.........................................................71
         Section 7.2       Other Termination.....................................................................71
         Section 7.3       Effect of Termination.................................................................71

ARTICLE VIII          Indemnification............................................................................71
         Section 8.1       General Indemnity.....................................................................71
         Section 8.2       Indemnification Procedure.............................................................71

ARTICLE IX Miscellaneous.........................................................................................72
         Section 9.1       Fees and Expenses.....................................................................72
         Section 9.2       Specific Enforcement, Consent to Jurisdiction.........................................72
         Section 9.3       Entire Agreement; Amendment...........................................................72
         Section 9.4       Notices...............................................................................72
         Section 9.5       Waivers...............................................................................73
         Section 9.6       Headings..............................................................................74
         Section 9.7       Successors and Assigns................................................................74
         Section 9.8       No Third Party Beneficiaries..........................................................74
         Section 9.9       Governing Law.........................................................................74
         Section 9.10      Survival..............................................................................74
         Section 9.11      Counterparts..........................................................................74
         Section 9.12      Publicity.............................................................................74
         Section 9.13      Severability..........................................................................74
         Section 9.14      Further Assurances....................................................................74

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CONVERTIBLE NOTE PURCHASE AGREEMENT

This CONVERTIBLE NOTE PURCHASE AGREEMENT (the "Agreement") is dated as of
September 21, 2001 by and between Imaging Technologies Corporation, a Delaware
corporation (the "Company"), and the Purchaser of the Convertible Note of the
Company whose name is set forth on Exhibit A hereto (the "Purchaser").

The parties hereto agree as follows:

Purchase and Sale of Note
-------------------------

         Purchase and Sale of Note. Upon the following terms and conditions, the
Company shall issue and sell to the Purchaser and the Purchaser shall purchase
from the Company, (i) a convertible promissory note in the aggregate principal
amount of $300,000 bearing interest at the rate of 8% per annum, due September
21, 2004, convertible into shares of the Company's Common Stock, par value $.005
per share (the "Common Stock"), in substantially the form attached hereto as
Exhibit B (the "Note"), and (ii) a Warrant to purchase shares of the Company's
Common Stock, in substantially the form attached hereto as Exhibit C (the
"Warrant"). The purchase price for the Note and the Warrant shall be $300,000
(the "Purchase Price"). The Company and the Purchaser are executing and
delivering this Agreement in accordance with and in reliance upon the exemption
from securities registration afforded by Rule 506 of Regulation D ("Regulation
D") as promulgated by the United States Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Securities
Act"), Regulation S ("Regulation S") as promulgated by the Commission under the
Securities Act, or Section 4(2) of the Securities Act.

         The Conversion Shares. Immediately upon the filing of a Certificate of
Amendment to the Company's Certificate of Incorporation with the Delaware
Secretary of State increasing its authorized capital stock, the Company shall
authorize, reserve and maintain, free of preemptive rights and other similar
contractual rights of stockholders, no less than 150% of the aggregate number of
shares of Common Stock needed to effect the conversion of the Note at the Fixed
Conversion Price (as defined in the Note) and any interest accrued and
outstanding thereon and exercise of the Warrant. Any shares of Common Stock
issuable upon conversion of the Note and any interest accrued and outstanding
thereon and exercise of the Warrant (and such shares when issued) are herein
referred to as the "Conversion Shares" and the "Warrant Shares," respectively.
The Note, the Conversion Shares and the Warrant Shares are sometimes
collectively referred to herein as the "Shares."

         Purchase Price and Closing. The Company agrees to issue and sell to the
Purchaser and, in consideration of and in express reliance upon the
representations, warranties, covenants, terms and conditions of this Agreement,
the Purchaser agrees to purchase the Note set forth opposite its name on Exhibit
A for a purchase price equal to $300,000. The closing of the purchase and sale
of the Note and Warrant (the "Closing") to be acquired by the Purchaser from the
Company under this Agreement shall take place at the offices of Jenkens &
Gilchrist Parker Chapin LLP at 10:00 a.m. E.S.T. on the date on which the last
to be fulfilled or waived of the conditions set forth in Article IV hereof and
applicable to the Closing shall be fulfilled or waived in accordance herewith or
such other time and place or on such date as the Purchaser and the Company may
agree upon (the "Closing Date"). On the Closing Date, the Company shall deliver
to the Purchaser the Note and the Purchaser shall deliver to the Company the
Purchase Price. 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 the Closing. This Agreement shall become effective upon the date
of execution of this Agreement by each of the parties hereto, which date shall
be no later than October 15, 2001, unless otherwise agreed upon by the Purchaser
and the Company.

         Warrant. The Company agrees to issue to the Purchaser a Warrant to
purchase 11,278,195 shares of Common Stock on the Closing Date. The Warrant
shall have an exercise price equal to the Warrant Price (as defined in the
Warrant) and shall expire on the fifth anniversary of the issuance date of such
Warrant.

Representations and Warranties
------------------------------

          Representations and Warranties of the Company. The Company hereby
makes the following representations and warranties to the Purchaser:

              (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 conduct its business as it is
now being conducted.  The Company does not have any  subsidiaries  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

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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. (b) Authorization;  Enforcement. The Company has the requisite corporate
power and authority to enter into and perform this Agreement,  the  Registration
Rights  Agreement  attached  hereto  as  Exhibit  D  (the  "Registration  Rights
Agreement"), the Transfer Agent Instructions (as defined in Section 3.14 hereof)
and the Warrant  (collectively,  the  "Transaction  Documents") and to issue and
sell the  Shares  in  accordance  with the  terms  hereof  and the  Warrant,  as
applicable. The execution, delivery and performance of the Transaction Documents
by the  Company  and the  consummation  by it of the  transactions  contemplated
hereby  and  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  Registration  Rights Agreement will
have been duly  executed and  delivered  by the Company at 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 September 20, 2001
are set forth on Schedule 2.1(c) hereto.  All of the  outstanding  shares of the
Company's  Common  Stock have been duly and  validly  authorized.  Except as set
forth in this Agreement and the  Registration  Rights Agreement and as set forth
on Schedule 2.1(c) hereto,  no shares of Common Stock 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 and the
Registration Rights Agreement and as set forth on Schedule 2.1(c),  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 any
agreement  granting  registration  or  anti-dilution  rights to any person  with
respect to any of its equity or debt securities.  The Company is not a party to,
and it has no knowledge of, any agreement  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 stockholder has a
right of rescission or damages with respect  thereto which would have a Material
Adverse Effect (as defined in Section 2.1(e) herein) on the Company's  financial
condition or operating  results.  The Company has furnished or made available to
the  Purchaser  true  and  correct  copies  of  the  Company's   Certificate  of
Incorporation  as in  effect on the date  hereof  (the  "Certificate"),  and the
Company's Bylaws as in effect on the date hereof (the "Bylaws").

              (d)  Issuance  of Note.  The Note to be issued at the  Closing has
been duly  authorized  by all necessary  corporate  action and, when paid for or
issued in accordance with the terms hereof, the Note shall be validly issued and
outstanding,  fully  paid and  nonassessable  and free and  clear of all  liens,
encumbrances  and rights of refusal of any kind. When the Conversion  Shares and
the Warrant  Shares are issued in accordance  with the terms of the Note and the
Warrant,  respectively,  such shares will be duly  authorized  by all  necessary
corporate   action  and  validly   issued  and   outstanding,   fully  paid  and
nonassessable,  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 herein and therein do not (i) violate any provision of
the Company's Certificate or Bylaws, (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 is a
party,  (iii) create or impose a lien,  charge or encumbrance on any property of
the Company  under any  agreement  or any  commitment  to which the Company is a
party or by which  the  Company  is  bound  or by  which  any of its  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  clause  (i)  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

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will not have a Material  Adverse  Effect.  The  Company is not  required  under
Federal,  state  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 Note,  the
Conversion  Shares and the Warrant Shares in accordance with the terms hereof or
thereof  (other than any filings which may be required to be made by the Company
with the Commission or state securities administrators subsequent to the Closing
or any  registration  statement  which may be filed pursuant  hereto);  provided
that, for purposes of the representation  made in this sentence,  the Company is
assuming  and relying  upon the  accuracy of the  relevant  representations  and
agreements of the Purchaser herein.

              (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 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
Purchaser true and complete  copies of the Commission  Documents  filed with the
Commission  since March 31, 2001.  The Company has not provided to the Purchaser
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.  As of their respective dates, the
audited  financial  statements as presented in the Commission  Documents for the
year ended June 30, 2000 (the  "Financial  Statement") and the Form 10-Q for the
fiscal  quarter ended March 31, 2001 (the "Form 10-Q")  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, as of their
respective dates,  neither the Financial Statement nor the Form 10-Q referred to
above  contained  any untrue  statement of a material fact or omitted 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.  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  sets  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
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.  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 March 31, 2001,  the date
through which the most recent  quarterly  report of the Company on Form 10-Q has
been prepared and filed with the Commission,  a copy of which is included in the
Commission  Documents,  the Company has not experienced or suffered any Material
Adverse Effect.

              (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  March 31,  2001 and  which,
individually  or in the aggregate,  do not or would not have a Material  Adverse
Effect on the Company or its subsidiaries.

<PAGE>

              (j)  No  Undisclosed   Events  or   Circumstances.   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 $75,000  (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 notes  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 $75,000 due under leases required to be capitalized in accordance with
GAAP. Except as set forth on Schedule 2.1(k) hereto, neither the Company nor any
subsidiary is in default with respect to any Indebtedness.

              (l)  Title to  Assets.  Except  as set  forth on  Schedule  2.1(k)
hereto,  each of the Company and the  subsidiaries has good and marketable title
to all of its  real  and  personal  property,  free of any  mortgages,  pledges,
charges, liens, security interests or other encumbrances,  except for those such
that,  individually or in the aggregate,  do not cause a Material Adverse Effect
on the Company's  financial  condition or operating results.  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  or  proceeding  pending  or,  to the  knowledge  of the  Company,
threatened against the Company or any subsidiary which questions the validity of
this Agreement or the transactions contemplated hereby or any action taken or to
be taken  pursuant  hereto or  thereto.  Except  as set forth in the  Commission
Documents,  there is no action, suit, claim, investigation or 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. Except
as set  forth on  Schedule  2.1(m)  hereto,  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
that would, individually or in the aggregate, 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 such that,  individually or in the aggregate, do not cause 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. 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.  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)
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,
no brokers, finders or financial advisory fees or commissions will be payable by
the Company or any subsidiary or any Purchaser with respect to the  transactions
contemplated by this Agreement.

              (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  Purchaser  by or on behalf of the Company or any
subsidiary in connection  with the  transactions  contemplated by this Agreement
contain any

<PAGE>

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  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.   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. No material permits,  licenses and other authorizations have
been 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. 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.

              (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 is taken
with respect to any differences.

              (u) Material  Agreements.  Except 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 as an exhibit to
a registration statement on Form S-1 or applicable form (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 dividends on the Company's Note, its preferred  stock, if any, or its
Common Stock.

              (v)  Transactions  with  Affiliates.  Except  as set  forth in the
Commission  Documents and 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 exceeding $100,000 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,

<PAGE>

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 Note and the Warrant 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 the Note,  the Warrant 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 the
Note and the Warrant 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, 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 the Note and the
Warrant.

              (x)  Governmental  Approvals.  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),  including the filing of a registration statement or statements pursuant
to the Registration  Rights  Agreement,  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 Note, 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.
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
March 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  March 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 material lien or encumbrance or
paid any material obligation or liability  (absolute or contingent),  other than
current liabilities paid in the ordinary course of business;

              (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;

              (v) sold,  assigned or transferred any other tangible  assets,  or
canceled  any  material  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 to customers in the ordinary course of business
or to the Purchaser 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;

<PAGE>

              (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
$25,000;

              (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 be material to the Company or its subsidiaries; 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 Note will
be used by the Company for working capital and general corporate purposes.

              (ab) 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.

              (ac)  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 be materially adverse to the Company and its
subsidiaries.  The  execution  and delivery of this  Agreement and the issue and
sale of the Note  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 the  Purchaser,  or any person or entity that owns a
beneficial  interest in the  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(ac), 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.

              (ad) Dilutive  Effect.  The Company  understands and  acknowledges
that the number of Conversion  Shares  issuable upon  conversion of the Note and
the Warrant  Shares  issuable  upon  exercise of the  Warrant  will  increase in
certain  circumstances.  The Company further acknowledges that its obligation to
issue  Conversion  Shares upon  conversion of the Note in  accordance  with this
Agreement and its  obligations  to issue the Warrant Shares upon the exercise of
the Warrant in accordance with this Agreement and the Warrant, 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.

              (ae) No "Directed  Selling  Efforts." In connection with the offer
and sale of the Note and the Warrant,  no  distributor  or any affiliates or any
person  acting on behalf of the Company or any  affiliate  of the Company or any
distributor  has  engaged in any  "directed  selling  efforts"  (as such term is
defined under Regulation S) nor conducted any general  solicitation  relating to
the offer to persons residing within the United States or to "U.S.  Persons" (as
that term is defined under Regulation S).

              (af) Filings  Under the Act and the Exchange  Act. The Company has
filed all reports and other  documents  required to be filed by it under the Act
and the Exchange Act, and no such document, at the time it was filed,  contained
any  untrue  statement  of a material  fact or omitted to state a material  fact
necessary  to  make  the  statements  contained  therein,  in the  light  of the
circumstances  under  which they were made,  not  misleading.  There has been no
material change in the Company since its last filing with the Commission  except
for changes in senior

<PAGE>

management.  The  Company  is a  "reporting  issuer"  as  defined in Rule 902 of
Regulation  S and will remain a reporting  issuer for at least one year from the
date hereof.

     Representations and Warranties of the Purchaser. The Purchaser hereby makes
the following representations and warranties to the Company:

              (a) Organization and Standing of the Purchaser. The Purchaser is a
corporation 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. The Purchaser has the requisite power
and authority to enter into and perform this  Agreement and to purchase the Note
being sold to it hereunder.  The  execution,  delivery and  performance  of this
Agreement  and the  Registration  Rights  Agreement  by such  Purchaser  and the
consummation by it of the transactions contemplated hereby and thereby have been
duly  authorized  by all  necessary  corporate  or  partnership  action  (if the
Purchaser  is an  entity),  and no  further  consent  or  authorization  of such
Purchaser or its Board of Directors,  stockholders, or partners, as the case may
be, is required.  Each of this Agreement and the  Registration  Rights Agreement
has been duly authorized, executed and delivered by such Purchaser.

              (c) No Conflicts. The execution,  delivery and performance of this
Agreement and the  Registration  Rights  Agreement and the  consummation by such
Purchaser of the transactions contemplated hereby and thereby or relating hereto
do not and  will not (i)  result  in a  violation  of such  Purchaser's  charter
documents or bylaws 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 such Purchaser
is a party,  or result in a violation of any law,  rule, or  regulation,  or any
order, judgment or decree of any court or governmental agency applicable to such
Purchaser or its properties (except for such conflicts,  defaults and violations
as would not,  individually or in the aggregate,  have a Material Adverse Effect
on such  Purchaser).  Such  Purchaser  is not  required  to obtain any  consent,
authorization or order of, or make any filing or registration with, any court or
governmental  agency in order for it to  execute,  deliver or perform any of its
obligations  under this  Agreement  or the  Registration  Rights  Agreement,  or
relating hereto or thereto, or to purchase the Note in accordance with the terms
hereof,  provided that for purposes of the representation made in this sentence,
such  Purchaser  is assuming  and  relying  upon the  accuracy  of the  relevant
representations and agreements of the Company herein.

              (d) Acquisition  for  Investment.  The Purchaser is purchasing the
Note and  acquiring  the  Warrant  solely for its own account for the purpose of
investment and not with a view to or for sale in connection  with  distribution.
The Purchaser does not have a present intention to sell the Note or the Warrant,
nor a present  arrangement  (whether or not legally  binding)  or  intention  to
effect any  distribution  of the Note or the Warrant to or through any person or
entity; provided, however, that by making the representations herein and subject
to Section  2.2(f) below,  such Purchaser does not agree to hold the Note or the
Warrant for any minimum or other specific term and reserves the right to dispose
of the Note or the Warrant at any time in  accordance  with  Federal  securities
laws applicable to such disposition. Such Purchaser acknowledges that it is able
to bear the  financial  risks  associated  with an investment in the Note or the
Warrant  and 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.

              (e)  Accredited   Purchaser.   The  Purchaser  is  an  "accredited
investor" as defined in Regulation D promulgated under the Securities Act and is
a resident of the jurisdiction indicated on Exhibit A hereto.

              (f) Rule 144. The  Purchaser  understands  that the Shares must be
held indefinitely  unless such Shares are registered under the Securities Act or
an exemption from  registration is available.  Such 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 person has been advised  that Rule 144 permits  resales only under
certain  circumstances.  Such Purchaser understands that to the extent that Rule
144 is not  available,  such  person  will be unable to sell any Shares  without
either  registration  under  the  Securities  Act or the  existence  of  another
exemption from such registration requirement.

              (g) General.  Such Purchaser understands that the Shares are being
offered and sold in reliance on a transactional  exemption from the registration
requirement 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 Shares.

<PAGE>

              (h) Foreign  Purchaser.  The  Purchaser is not a "U.S.  person" as
defined  under  Rule  902(o) of  Regulation  S under  the  Securities  Act.  The
Purchaser  is not  acquiring  the Note and Warrant for the account or benefit of
any U.S. person.

              (i) Offshore Transaction. The document effecting this purchase and
sale has been executed by the Purchaser  outside the "United States" (as defined
in Rule 902(p) of Regulation S). The Purchaser is acquiring the Note and Warrant
in an "offshore  transaction"  (as defined in Rule 902(i) of Regulation  S). The
Note and Warrant were not offered to the  Purchaser in the United  States and at
the  time of  execution  of this  Agreement  and the  time of any  offer  to the
Purchaser  to  purchase  the Note  and  Warrant  hereunder,  the  Purchaser  was
physically outside of the United States.

              (j) Independent Investigation;  Advertisements.  The Purchaser, in
offering to purchase the Note and Warrant  hereunder,  has relied solely upon an
independent  investigation  made by such Purchaser and its  representatives,  if
any, and has, prior to the date hereof, been given access to and the opportunity
to examine all books and records of the Company,  and all material contracts and
documents of the Company. In making its investment decision to purchase the Note
and Warrant, the Purchaser is not relying on any oral or written representations
or assurances from the Company or any other person or any  representation of the
Company or any other person other than as set forth in this Agreement, or on any
information  other than contained in the Company's public filings required under
the Act and the Exchange Act. The Purchaser is not  subscribing for the Note and
Warrant 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.

Covenants
---------

     The Company  covenants with the Purchaser as follows,  which  covenants are
for the  benefit  of the  Purchaser  and its  permitted  assignees  (as  defined
herein).

     Securities Compliance.
     ---------------------

              (a) 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 necessary  action and proceedings as
may be required and permitted by applicable  law, rule and  regulation,  for the
legal and valid  issuance of the Note and the Warrant Shares to the Purchaser or
subsequent holders.

              (b) The  Company is  relying  upon the truth and  accuracy  of the
representations,  warranties, agreements,  acknowledgments and understandings of
the  Purchaser  set forth  herein in order to  determine  the  applicability  of
Federal  and  state  securities  laws  exemptions  and  the  suitability  of the
Purchaser to acquire the Note.

<PAGE>

     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 or the Registration Rights 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 will take all action necessary to continue the listing or
trading of its Common Stock on the over-the-counter electronic bulletin board or
any successor market.

     Inspection Rights. The Company shall permit, during normal business hours
and upon reasonable request and reasonable notice, each Purchaser or any
employees, agents or representatives thereof, so long as such Purchaser shall be
obligated hereunder to purchase the Note or shall beneficially own any Note, or
shall own Conversion Shares which, in the aggregate, represent more than 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 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.

     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.

     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.

     Reporting Requirements. The Company shall furnish the following to each
Purchaser so long as such Purchaser shall be obligated hereunder to purchase the
Note or shall beneficially own any Note, or shall own Conversion Shares which,
in the aggregate, represent more than 2% of the total combined voting power of
all voting securities then outstanding, provided, however, that the Company
shall not be obligated to furnish the following, if the following reports have
been filed by the Company with the Commission pursuant to the Commission's
"electronic data gathering and retrieval" (EDGAR) service:

              (a) Quarterly  Reports  filed with the  Commission on Form 10-Q as
soon as available,  and in any event within 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 90 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.

     Amendments. The Company shall not amend or waive any provision of the
Certificate or Bylaws of the Company, or Registration Rights Agreement in any
way that would adversely affect the liquidation preferences, dividends rights,
conversion rights, voting rights or redemption rights of the holders of the
Note.

     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.

     Distributions. So long as any Note remain outstanding, the Company agrees
that it shall not (i) declare or pay any dividends 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.

     Intentionally Omitted.
     ---------------------

     Regulation S. The Company covenants and agrees that if the Company fails to
register the Conversion Shares within 60 days from the Closing Date under the
terms and conditions of the Registration Rights Agreement attached hereto as
Exhibit D, then for so long as such registration statement is not effective and
as any of the Shares remain outstanding and continue to be "restricted
securities" within the meaning of Rule 144 under the Securities Act, the Company
shall, in order to permit resales of any of the Shares pursuant to Regulation S
under the Securities Act, (a) continue to file all material required to be filed
pursuant to Section 13(a) or 15(d) of the Exchange Act, and (b) not

<PAGE>

knowingly engage in directed selling efforts in connection with the resale of
securities by any Purchaser under Regulation S.

     Future Financings. The Company covenants and agrees that during the period
from the Closing Date through the 180th day immediately following the effective
date of the Registration Statement (as such term is defined in the Registration
Rights Agreement), the Company shall not, without the written consent of the
Purchaser, offer, sell or issue: (i) any shares of Common Stock or (ii) any
securities convertible or exchangeable into Common Stock other than a Permitted
Financing. For purposes of this Section 3.12, a "Permitted Financing" shall mean
(A) shares of Common Stock to be issued pursuant to the Convertible Note
Purchase Agreement, dated December 12, 2000, by and among certain investors and
the Company, (B) shares of Common Stock to be issued pursuant to the Convertible
Note Purchase Agreement, dated July 26, 2001, by and among certain investors and
the Company, (C) shares of Common Stock to be issued pursuant to the Agreement
and Release, dated March 1, 2001, by and among the Company, American Industries,
Inc. and various other parties thereto, and (D) shares of Common Stock to be
issued pursuant to the Second OEM Amendment, dated October 25, 2000, between the
Company and Artifex Software, Inc.

     Reservation of Shares. Immediately upon the filing of a Certificate of
Amendment to the Company's Certificate of Incorporation with the Delaware
Secretary of State increasing its authorized capital stock and so long as any of
the Notes or Warrants remain outstanding, the Company shall take all action
necessary to at all times have authorized, and reserved for the purpose of
issuance, no less than 150% of the aggregate number of shares of Common Stock
needed to provide for the issuance of the Conversion Shares and the Warrant
Shares.

     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 each Purchaser or its respective
nominee(s), for the Conversion Shares and the Warrant Shares in such amounts as
specified from time to time by each Purchaser to the Company upon conversion of
the Note or exercise of the Warrant in the form of Exhibit E 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 6.1 of this
Agreement. The Company warrants that no instruction other than the Irrevocable
Transfer Agent Instructions referred to in this Section 3.14 will be given by
the Company to its transfer agent and that the Shares shall otherwise be freely
transferable on the books and records of the Company as and to the extent
provided in this Agreement and the Registration Rights Agreement. Nothing in
this Section 3.14 shall affect in any way each Purchaser's obligations and
agreements set forth in Section 6.1 to comply with all applicable prospectus
delivery requirements, if any, upon resale of the Shares. If a Purchaser
provides the Company with an opinion of counsel, in a generally acceptable form,
to the effect that a public sale, assignment or transfer of the Shares may be
made without registration under the Securities Act or the Purchaser provides the
Company with reasonable assurances that the Shares 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 such Purchaser and without any
restrictive legend. The Company acknowledges that a breach by it of its
obligations under this Section 3.14 will cause irreparable harm to the Purchaser
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 3.14 will be inadequate and agrees, in the event
of a breach or threatened breach by the Company of the provisions of this
Section 3.14, that the Purchaser 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.

Conditions
----------

     Conditions Precedent to the Obligation of the Company to Sell the Note. The
obligation hereunder of the Company to issue and sell the Note and the Warrant
to the Purchaser 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 Company's sole benefit and may be waived by the Company at any time in
its sole discretion.

              (a) Accuracy of Each Purchaser's  Representations  and Warranties.
The  representations  and warranties of each 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  Purchaser.  The  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 Purchaser at or prior to the Closing Date.

<PAGE>

              (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.

Section 4.2 Conditions  Precedent to the Obligation of the Purchaser to Purchase
the Note. The  obligation  hereunder of the Purchaser to acquire and pay for the
Note and the Warrant 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 Purchaser's  sole benefit and may be waived by the Purchaser at any time
in its sole discretion.

              (a) Accuracy of the Company's Representations and Warranties. Each
of the  representations  and warranties of the Company shall be true and correct
in all material  respects as of the date when made and as of the Closing Date as
though made at that time (except for  representations  and warranties that speak
as of a  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. From the date hereof to the Closing Date,
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 Date),
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 material
outbreak  or  escalation  of  hostilities  or other  national  or  international
calamity or crisis of such  magnitude in its effect on, or any material  adverse
change in any  financial  market  which,  in each case,  in the judgment of such
Purchaser, makes it impracticable or inadvisable to purchase the Note.

              (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. At the Closing,  the Purchaser shall
have  received  an  opinion of  counsel  to the  Company,  dated the date of the
Closing,  in the form of  Exhibit  F hereto,  and such  other  certificates  and
documents as the Purchaser or its counsel shall  reasonably  require incident to
the Closing.

              (g) Registration  Rights  Agreement.  At the Closing,  the Company
shall have  executed and  delivered the  Registration  Rights  Agreement to each
Purchaser.

              (h) Certificates. The Company shall have executed and delivered to
each Purchaser,  the certificates (in such denominations as such Purchaser shall
request) for the Note and the Warrant being  purchased by such  Purchaser at the
Closing.

              (i) Resolutions. Prior to the Closing Date, the Board of Directors
of the Company shall have adopted  resolutions  consistent  with Section  2.1(b)
above in a form reasonably acceptable to such Purchaser (the "Resolutions").

              (j)  Reservation  of  Shares.  Immediately  upon the  filing  of a
Certificate of Amendment to the Company's  Certificate of Incorporation with the
Delaware Secretary of State increasing its authorized capital stock, the Company
shall authorize,  reserve and maintain out of its authorized and unissued Common
Stock,  solely for the purpose of effecting  the  conversion of the Note and the
exercise of the Warrant, a number of shares of Common

<PAGE>

Stock  equal to at least  150% of the  aggregate  number  of  Conversion  Shares
issuable  upon  conversion of the Note  outstanding  on the Closing Date and the
number of Warrant  Shares  issuable upon  exercise of the Warrant  assuming such
Warrant was granted on the Closing Date (after giving effect to the Note and the
Warrant to be issued on the Closing Date and assuming such Note and Warrant were
fully  convertible or  exercisable on such date  regardless of any limitation on
the timing or amount of such conversions or exercises).

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

              (l) Secretary's  Certificate.  The Company shall have delivered to
such  Purchaser a secretary's  certificate,  dated as of the Closing Date, as to
(i) the Resolutions,  (ii) the Certificate,  (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.

Registration Rights
-------------------

     At  the  Closing,  the  Company  and  the  Purchaser  shall  enter  into  a
Registration Rights Agreement in the form attached hereto as Exhibit D.

Certificate Legend
------------------

     Legend.  Each  certificate  representing  the Note and the Warrant  and, if
appropriate,  securities issued upon conversion and exercise  thereof,  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 IMAGING  TECHNOLOGIES  CORPORATION  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  the Note and the
Warrant, without the legend set forth above if at such time, prior to making any
transfer of any Note, Warrant,  Conversion Shares or Warrant Shares, 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
such Note, Warrant, Conversion Shares 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 10
days.  In the case of any  proposed  transfer  under this Section 6, 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 6.1 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.

Termination
-----------

     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.

     Other Termination. This Agreement may be terminated by the action of the
Board of Directors of the Company or by the Purchaser at any time if the Closing
shall not have been consummated by October 15, 2001, as long as the failure to
so consummate is not the fault of the terminating party.

     Effect of Termination. In the event of termination by the Company or the
Purchaser, written notice thereof shall forthwith be given to the other party
and the transactions contemplated by this Agreement and the Registration Rights
Agreement shall be terminated without further action by either party. If this
Agreement is terminated as provided in Section 7.1 or 7.2 herein, this Agreement
shall become void and of no further force and effect, except for Sections 9.1
and 9.2, and Article VIII herein. Nothing in this Section 7.3 shall be deemed to
release the Company or any Purchaser from any liability for any breach under
this Agreement or the Registration Rights Agreement, or to impair the rights of
the Company and the Purchaser to compel specific performance by the other party
of its obligations under this Agreement and the Registration Rights Agreement.

Indemnification
---------------

     General Indemnity. The Company agrees to indemnify and hold harmless the
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 attorney's fees, charges and disbursements) incurred by the Purchaser
as a result of any inaccuracy in or breach of the representations, warranties or
covenants made by the Company herein. The Purchaser agrees 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 Purchaser herein.

     Indemnification Procedure. Any party entitled to indemnification under this
Article VIII (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 VIII 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 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 and the indemnifying party may exist with
respect of 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 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 VIII 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 VIII 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. Notwithstanding anything in this
Article VIII to the contrary, the Purchaser shall be liable under this Article
VIII for only that amount of indemnification as does not exceed the proceeds to
such Purchaser as a result of the sale of the Conversion Shares by the
Purchaser. The indemnity agreements contained herein shall be in addition

<PAGE>

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.

Miscellaneous
-------------

     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. In addition, the Company
shall pay all reasonable fees and expenses incurred by the Purchaser in
connection with the filing and declaration of effectiveness by the Commission of
the Registration Statement (as defined in the Registration Rights Agreement),
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 and expenses. The Company shall pay
all stamp or other similar taxes and duties levied in connection with issuance
of the Note pursuant hereto.

     Specific Enforcement, Consent to Jurisdiction.
     ---------------------------------------------

              (a) The  Company  and the  Purchaser  acknowledge  and agree  that
irreparable  damage would occur in the event that any of the  provisions of this
Agreement or the Registration  Rights Agreement 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  Registration  Rights
Agreement  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) Each of the Company and the Purchaser  (i) hereby  irrevocably
submits to the  exclusive  jurisdiction  of the  United  States  District  Court
sitting  in the  Southern  District  of New York for the  purposes  of any suit,
action  or  proceeding  arising  out of or  relating  to this  Agreement  or the
Registration  Rights Agreement and (ii) hereby waives,  and agrees 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.  Any suit,  action  or  proceeding  arising  out of or
relating to this  Agreement  or the  Registration  Rights  Agreement  brought by
either the Company or the Purchaser shall be brought in the  jurisdiction of the
United States District Court sitting in the Southern  District of New York. Each
of the Company and the  Purchaser  consents 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 9.2 shall  affect or limit any right to serve
process in any other manner permitted by law.

     Entire Agreement; Amendment. This Agreement contains the entire
understanding of the parties with respect to the matters covered hereby and,
except as specifically set forth herein or in the Transaction Documents, neither
the Company nor the Purchaser makes any representations, warranty, covenant or
undertaking with respect to such matters. No provision of this Agreement may be
waived or amended other than by a written instrument signed by the Company and
the Purchaser, and no provision hereof may be waived other than by an a written
instrument signed by the party against whom enforcement of any such amendment or
waiver is sought. No consideration shall be offered or paid 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 holder of the Note, as the case may
be.

     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 telex (with correct answer back received),
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:                 Imaging Technologies Corporation

                                   15175 Innovation Drive

                                   San Diego, California  92128

                                   Attention:  Chief Executive Officer

                                   Telephone No.:  (858) 613-1300

<PAGE>

                                   Facsimile No.: (858) 207-6505

with copies (which copies

shall not constitute notice

to the Company) to:                General Counsel

                                   Imaging Technologies Corporation

                                   15175 Innovation Drive

                                   San Diego, California  92128

                                   Telephone No.:  (858) 613-1300

                                   Facsimile No.: (858) 207-6505



If to any Purchaser:               At the address of such Purchaser set forth on

                                   Exhibit A to this Agreement.



with copies (which copies

shall not constitute notice

to the Company) to:                Jenkens & Gilchrist Parker Chapin LLP

                                   The Chrysler Building

                                   405 Lexington Avenue

                                   New York, New York 10174

                                   Attention: Christopher S. Auguste, Esq.

                                   Telephone No.:  (212) 704-6000

                                   Facsimile No.: (212) 704-6288


     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.

              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 provisions, condition
or requirement hereof, nor shall 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.

     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.

     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 assignment by a party to this Agreement of any rights hereunder shall not
affect the obligations of such party under this Agreement.

     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.

     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.

   Survival. The representations and warranties of the Company and the Purchaser
contained in Sections 2.1(o) and (s) should survive indefinitely and those
contained in Article II, with the exception of Sections 2.1(o) and (s), shall
survive the execution and delivery hereof and the Closing until the date three
(3) years from the Closing Date, and

<PAGE>

the agreements and covenants set forth in Article I, III, V, VII, VIII and IX of
this Agreement shall survive the execution and delivery hereof and the Closing
hereunder until the Purchaser beneficially owns (determined in accordance with
Rule 13d-3 under the Exchange Act) less than 2% of the total combined voting
power of all voting securities then outstanding, provided, that Sections 3.1,
3.2, 3.4, 3.5, 3.7, 3.8, 3.9, 3.12, 3.13, and 3.14 shall not expire until the
Registration Statement required by Section 2 of the Registration Rights
Agreement is no longer required to be effective under the terms and conditions
of Registration Rights Agreement.

     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. In the event any signature is delivered by
facsimile transmission, the party using such means of delivery shall cause four
(4) additional executed signature pages to be physically delivered to the other
parties within five (5) days of the execution and delivery hereof.

     Publicity. The Company agrees that it will not disclose, and will not
include in any public announcement, the name of the Purchaser without the
consent of the Purchaser, which consent shall not be unreasonably withheld, or
unless and until such disclosure is required by law or applicable regulation,
and then only to the extent of such requirement.

     Severability. The provisions of this Agreement and the Registration Rights
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 or the Registration Rights 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 or the Registration
Rights 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 such provisions would be valid, legal and enforceable to the
maximum extent possible.

     Further Assurances. From and after the date of this Agreement, upon the
request of the Purchaser or the Company, each of the Company and the 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 Note, the Conversion
Shares, the Warrant, the Warrant Shares and the Registration Rights Agreement.


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

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

                                        IMAGING TECHNOLOGIES CORPORATION



                                        By:
                                           ----------------------------------
                                                   Name: Brian Bonar

                                             Title: Chief Executive Officer

                                        STONESTREET LIMITED PARTNERSHIP



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

                                             Title:


                                    EXHIBIT A

                    Purchaser / Number of Notes and Warrants


Name and Residence                  Number of Notes                Dollar Amount

   of Purchaser              and Warrants Purchased             of Investment
--------------------         -----------------------            -------------


Stonestreet Limited Partnership     Note: $300,000.00 Note.          $300,000.00

260 Town Center Blvd. Ste. 201      Warrant: to purchase

Markham, ON L3R 8H8                 11,278,195 shares of

Fax No.: 416-956-8989               Common Stock.


                                    EXHIBIT B

                       Form of Convertible Promissory Note


                                    EXHIBIT C

                                 Form of Warrant


                                    EXHIBIT D

                      Form of Registration Rights Agreement


                                    EXHIBIT E

                       Form of Transfer Agent Instructions


                                    EXHIBIT F

                                 Form of Opinion

<PAGE>

                                 Schedule 2.1(c)
                                 ---------------

                                 Capitalization

<TABLE>
<CAPTION>

Classes of Capital Stock
------------------------

                                                              Authorized                Outstanding
                                                              ----------                -----------

<S>                                                  <C>                       <C>
Common Stock, $0.005 par value                       200,000,000*              170,958,065

Series A Preferred Stock, $1,000 par value                 7,500                       420

</TABLE>


Registration Rights Granted
---------------------------

Artifex Software Inc.                 1,200,000 share of Common Stock

American Industries, Inc.  $100,000 value at variable conversion rate


Outstanding Options and Warrants to Purchase Common Stock
---------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                        Shares
                                                                                        ------

<S>                                                                    <C>      <C>
Warrants associated with Series D Convertible Preferred Stock          1,100,000

Warrants associated with Series E Convertible Preferred Stock          2,625,000

Incentive warrants for retention of key employees                               1,913,000

General warrants                                                                1,769,225

Employee Stock Option Plans                                                       682,185

</TABLE>

                                 Schedule 2.1(g)
                                 ---------------

                                  Subsidiaries


1.  Laser Printer Accessories Corporation, a Delaware corporation and a
    wholly-owned subsidiary of ITEC (inactive)

2.  Co-Processors, Inc., a California corporation and a wholly-owned subsidiary
    of ITEC (Inactive)

3.  NewGen Imaging Systems, Inc., a California Corporation and a wholly-owned
    subsidiary of ITEC (inactive)

4.  NewGen Systems Acquisition Corp., a Delaware corporation and a wholly-owned
    subsidiary of ITEC (inactive)

5.  Prima, Inc., a California corporation and a wholly-owned subsidiary of ITEC
    (inactive)

6.  McMican Corporation, a California corporation and a wholly-owned subsidiary
    of ITEC (inactive)

7.  Color Solutions, Inc., a California corporation and a wholly-owned
    subsidiary of ITEC (inactive)

8.  DealSeekers.com, Inc., a Delaware corporation, 71.4% owned by ITEC

9.  EduAdvantage.com, Inc., a California corporation and a wholly-owned
    subsidiary of ITEC

* The number of authorized shares of common stock shall be increased to

  300,000,000 upon the filing of a Certificate of Amendment to our Certificate

  of Incorporation with the Delaware Secretary of State, which we will use our

  best efforts to file by October 9, 2001.


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

<PAGE>


                                 Schedule 2.1(k)
                                 ---------------

                                  Indebtedness


     The Settlement Agreement with Imperial Bank requires that we make monthly
payments of $150,000 until the indebtedness is paid in full. See Schedule
2.1(m).


     Throughout fiscal 1999, 2000 and 2001, approximately fifty trade creditors
have made claims and/or filed actions alleging the failure of us to pay our
obligations to them in a total amount exceeding $3 million. These actions are in
various stages of litigation, with many resulting in judgments being entered
against us. Several of those who have obtained judgments have filed judgment
liens on our assets. These claims range in value from less than one thousand
dollars to just over one million dollars, with the great majority being less
than twenty thousand dollars. To date, the superior security interest held by
Imperial Bank has prevented nearly all of these trade creditors from collecting
on their judgments.


     See also our Financial Statements contained in our Form 10-Q for the period
ended March 31, 2001.


                                 Schedule 2.1(m)
                                 ---------------

Actions Pending
---------------

     On August 20, 1999, at the request of Imperial  Bank,  our primary  lender,
the Superior Court, San Diego appointed an operational receiver to us. On August
23, 1999, the  operational  receiver took control of our day-to-day  operations.
Through  further  equity  infusion,  primarily  in the form of the  exercise  of
warrants to purchase our common stock,  operations have  continued,  and on June
21,  2000,  the  Superior  Court,  San  Diego  issued  an order  dismissing  the
operational  receiver as a part of a settlement of litigation with Imperial Bank
pursuant  to the  Settlement  Agreement  effective  as of  June  20,  2000.  The
Settlement  Agreement  requires  that we make  monthly  payments  of $150,000 to
Imperial Bank until the  indebtedness is paid in full.  However,  in the future,
without  additional  funding  sufficient to satisfy  Imperial Bank and our other
creditors,  as well  as  providing  for our  working  capital,  there  can be no
assurances that an operational receiver may not be reinstated.

     Throughout fiscal 1999, 2000 and 2001, approximately fifty trade creditors
have made claims and/or filed actions alleging the failure of us to pay our
obligations to them in a total amount exceeding $3 million. These actions are in
various stages of litigation, with many resulting in judgments being entered
against us. Several of those who have obtained judgments have filed judgment
liens on our assets. These claims range in value from less than one thousand
dollars to just over one million dollars, with the great majority being less
than twenty thousand dollars. To date, the superior security interest held by
Imperial Bank has prevented nearly all of these trade creditors from collecting
on their judgments.

     On or about  October 7, 1999,  the law firms of Weiss & Yourman  and Stull,
Stull & Brody made a public  announcement  that they had filed a lawsuit against
us and certain current and past officers and/or directors, alleging violation of
federal  securities  laws during the period of April 21, 1998 through October 9,
1998.  On or about  November 17, 1999,  the lawsuit,  filed in the name of Nahid
Nazarian  Behfarin,  on her own  behalf  and others  purported  to be  similarly
situated,  was  served on us. A motion to dismiss  the  lawsuit  was  granted on
February 16, 2001 on our behalf and those  individual  defendants that have been
served.  However,  on or about March 19, 2001, an amended complaint was filed on
behalf of Nahid Nazarian  Behfarin,  Peter Cook, Stephen Domagala and Michael S.
Taylor, on behalf of themselves and others similarly situated. On or about March
20,  2001,  we once again filed a motion to dismiss the case along with  certain
other  individual  defendants.  The  motion  was  denied  and an  answer  to the
complaint  has been  filed on  behalf  of the  company  and  certain  individual
defendants.  We  believe  these  claims  are  without  merit  and we  intend  to
vigorously  defend  against them on our behalf as well as on behalf of the other
defendants.  The  defense of this  action  has been  tendered  to our  insurance
carriers.

                                 Schedule 2.1(p)
                                 ---------------

                                  Certain Fees

     BiCoastal  Consulting  is entitled to a fee of $30,000 and 30,000 shares of
our common stock to be converted at the Fixed  Conversion  Price with respect to
this transaction.

<PAGE>

                                 Schedule 2.1(u)
                                 ---------------

                               Material Agreements

     On December 11, 2000, ITEC and Quik Pix, Inc. (QPI) entered into an
agreement whereby ITEC would acquire a majority of the shares of the common
stock of QPI in consideration of ITEC's agreement to liquidate certain debts of
QPI, which was subject to the approval of the current shareholders of QPI.
Subsequently, QPI's management withdrew their recommendation that the
shareholders of QPI approve this transaction and indefinitely postponed the
shareholders' meeting that had been scheduled to consider such approval, among
other things. On September 21, 2001, ITEC and QPI signed a Settlement Agreement
and Mutual General Release which, once again provides for ITEC to acquire a
majority of the shares of the common stock of QPI.

                                 Schedule 2.1(v)
                                 ---------------

                          Transactions with Affiliates

None.

                                 Schedule 2.1(z)
                                 ---------------

                         Absence of Certain Developments

     We entered into a Convertible Note Purchase Agreement on July 26, 2001 with
an investor whereby we issued a $1,000,000 promissory note convertible into
shares of our common stock.