<PAGE>

                                                                   Exhibit 10.17

                          SECURITIES PURCHASE AGREEMENT


         SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of April 16,
2003,  by  and  among  Torbay  Holdings,  Inc.,  a  Delaware  corporation,  with
headquarters  located at 4 Mulford Place,  Suite 2G,  Hempstead,  New York 11550
(the  "Company"),  and each of the purchasers  set forth on the signature  pages
hereto (the "Buyers").

         WHEREAS:

         A. The  Company  and the  Buyers  are  executing  and  delivering  this
Agreement in reliance upon the exemption from securities  registration  afforded
by the rules and regulations as promulgated by the United States  Securities and
Exchange  Commission  (the "SEC") under the  Securities  Act of 1933, as amended
(the "1933 Act");

         B. Buyers desire to purchase and the Company desires to issue and sell,
upon the terms and conditions  set forth in this  Agreement (i) 12%  convertible
debentures of the Company,  in the form  attached  hereto as Exhibit "A", in the
aggregate  principal  amount  of  up  to  Two  Hundred  Fifty  Thousand  Dollars
($250,000) (together with any debenture(s) issued in replacement thereof or as a
dividend  thereon or otherwise with respect thereto in accordance with the terms
thereof,  the "Debentures"),  convertible into shares of common stock, par value
$.0001  per share,  of the  Company  (the  "Common  Stock"),  upon the terms and
subject to the  limitations and conditions set forth in such Debentures and (ii)
warrants,  in the form  attached  hereto as Exhibit  "B", to purchase up to Five
Hundred Thousand (500,000) shares of Common Stock (the "Warrants");

         C. Each Buyer wishes to purchase,  upon the terms and conditions stated
in this Agreement, such principal amount of Debentures and number of Warrants as
is set forth immediately below its name on the signature pages hereto; and

         D.  Contemporaneous  with the execution and delivery of this Agreement,
the parties hereto are executing and delivering a Registration Rights Agreement,
in  the  form  attached  hereto  as  Exhibit  "C"  (the   "Registration   Rights
Agreement"),  pursuant  to which  the  Company  has  agreed to  provide  certain
registration rights under the 1933 Act and the rules and regulations promulgated
thereunder, and applicable state securities laws.

         NOW  THEREFORE,  the Company and each of the Buyers  severally (and not
jointly) hereby agree as follows:

         1. PURCHASE AND SALE OF DEBENTURES AND WARRANTS.

              a.  Purchase of Debentures  and Warrants.  On the Closing Date (as
defined  below),  the Company  shall issue and sell to each Buyer and each Buyer
severally  agrees  to  purchase  from  the  Company  such  principal  amount  of
Debentures and number of Warrants as is set forth immediately below such Buyer's
name on the signature pages hereto,  for an aggregate of Fifty Thousand  Dollars
($50,000)  principal  amount of Debentures and Warrants to purchase an aggregate
of 100,000 shares of Common Stock.


<PAGE>

              b. Form of Payment.  On the Closing Date (as defined  below),  (i)
each Buyer shall pay the purchase  price for the  Debentures and the Warrants to
be issued  and sold to it at the  Closing  (as  defined  below)  (the  "Purchase
Price") by wire  transfer of  immediately  available  funds to the  Company,  in
accordance with the Company's written wiring  instructions,  against delivery of
the  Debentures  in the  principal  amount equal to the  Purchase  Price and the
number of Warrants as is set forth  immediately  below such  Buyer's name on the
signature  pages hereto,  and (ii) the Company shall deliver such Debentures and
Warrants duly executed on behalf of the Company, to such Buyer, against delivery
of such Purchase Price.

              c. Closing Date.  Subject to the  satisfaction (or written waiver)
of the conditions  thereto set forth in Section 6 and Section 7 below,  the date
and time of the issuance and sale of the Debentures and the Warrants pursuant to
this Agreement (the "Closing Date") shall be 12:00 noon,  Eastern  Standard Time
on April 16, 2003 or such other  mutually  agreed upon time.  The closing of the
transactions  contemplated by this Agreement (the "Closing")  shall occur on the
Closing Date at such location as may be agreed to by the parties.

              d. Subsequent  Closings.  On the final business day of each of the
eight (8) months  beginning  in May 2003 and ending in December  2003  (each,  a
"Funding  Date"),  the Company shall issue and sell to the Buyers and the Buyers
severally  agree to  purchase  from the  Company  an  aggregate  of  Twenty-Five
Thousand  Dollars  ($25,000)  principal  amount of  Debentures  and  Warrants to
purchase  an  aggregate  of  50,000  shares  of  Common  Stock.  Subject  to the
satisfaction (or written waiver) of the conditions  thereto set forth in Section
6 and Section 7 below,  on each  Funding  Date,  the  Company  will issue to the
Buyers such  Debentures and Warrants in the amounts  specified by the Buyers and
the Buyers  shall pay for such  Debentures  and  Warrants  by wire  transfer  of
immediately  available funds to the Company. In addition,  on each Funding Date,
an  authorized  officer  of the  Company  shall  deliver to the Buyers a closing
certificate in form and substance  satisfactory  to the Buyers.  Notwithstanding
the foregoing,  either the Company or a  majority-in-interest  of the Buyers may
terminate  their  obligations  under this  Section  1(d) upon  thirty  (30) days
written notice to the other party.

         2. BUYERS'  REPRESENTATIONS  AND WARRANTIES.  Each Buyer severally (and
not  jointly)  represents  and  warrants to the Company  solely as to such Buyer
that:

              a.  Investment  Purpose.  As of the  date  hereof,  the  Buyer  is
purchasing  the  Debentures  and  the  shares  of  Common  Stock  issuable  upon
conversion  of or  otherwise  pursuant  to the  Debentures  (including,  without
limitation,  such additional shares of Common Stock, if any, as are issuable (i)
on  account  of  interest  on the  Debentures,  (ii) as a result  of the  events
described in Sections 1.3 and 1.4(g) of the  Debentures  and Section 2(c) of the
Registration  Rights  Agreement or (iii) in payment of the  Standard  Liquidated
Damages  Amount (as defined in Section 2(f) below)  pursuant to this  Agreement,
such  shares  of  Common  Stock  being  collectively  referred  to herein as the
"Conversion  Shares") and the  Warrants and the shares of Common Stock  issuable
upon  exercise  thereof  (the  "Warrant  Shares"  and,   collectively  with  the
Debentures,  Warrants  and  Conversion  Shares,  the  "Securities")  for its own
account and not with a present  view  towards  the public  sale or  distribution
thereof, except pursuant to sales registered or exempted from registration under
the 1933 Act; provided,  however, that by making the representations herein, the
Buyer  does not agree to hold any of the  Securities  for any  minimum  or other
specific term and reserves the right to dispose of the Securities at any time in
accordance  with or pursuant to a registration  statement or an exemption  under
the 1933 Act.


                                       2
<PAGE>

              b.  Accredited  Investor  Status.  The  Buyer  is  an  "accredited
investor" as that term is defined in Rule 501(a) of Regulation D (an "Accredited
Investor").

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

              d. Information. The Buyer and its advisors, if any, have been, and
for so long as the Debentures and Warrants remain  outstanding  will continue to
be,  furnished  with  all  materials  relating  to the  business,  finances  and
operations  of the Company and  materials  relating to the offer and sale of the
Securities which have been requested by the Buyer or its advisors. The Buyer and
its advisors,  if any, have been, and for so long as the Debentures and Warrants
remain  outstanding  will  continue  to  be,  afforded  the  opportunity  to ask
questions of the Company.  Notwithstanding  the  foregoing,  the Company has not
disclosed to the Buyer any material nonpublic  information and will not disclose
such information  unless such information is disclosed to the public prior to or
promptly following such disclosure to the Buyer.  Neither such inquiries nor any
other due diligence  investigation  conducted by Buyer or any of its advisors or
representatives  shall  modify,  amend or  affect  Buyer's  right to rely on the
Company's representations and warranties contained in Section 3 below. The Buyer
understands that its investment in the Securities  involves a significant degree
of risk.

              e.  Governmental  Review.  The  Buyer  understands  that no United
States federal or state agency or any other  government or  governmental  agency
has passed upon or made any recommendation or endorsement of the Securities.

              f. Transfer or Re-sale.  The Buyer  understands that (i) except as
provided  in the  Registration  Rights  Agreement,  the sale or  re-sale  of the
Securities  has not been and is not being  registered  under the 1933 Act or any
applicable  state  securities  laws,  and the  Securities may not be transferred
unless  (a) the  Securities  are  sold  pursuant  to an  effective  registration
statement  under the 1933 Act, (b) the Buyer shall have delivered to the Company
an opinion of counsel that shall be in form,  substance and scope  customary for
opinions of counsel in comparable transactions to the effect that the Securities
to be sold or transferred  may be sold or  transferred  pursuant to an exemption
from such registration,  which opinion shall be accepted by the Company, (c) the
Securities are sold or  transferred  to an  "affiliate"  (as defined in Rule 144
promulgated  under the 1933 Act (or a successor rule) ("Rule 144")) of the Buyer
who agrees to sell or otherwise  transfer the Securities only in accordance with
this Section 2(f) and who is an Accredited Investor, (d) the Securities are sold
pursuant to Rule 144, or (e) the  Securities  are sold  pursuant to Regulation S
under the 1933 Act (or a successor rule)  ("Regulation  S"), and the Buyer shall
have  delivered  to the  Company an  opinion  of counsel  that shall be in form,
substance and scope customary for opinions of counsel in corporate transactions,
which opinion shall be accepted by the Company; (ii) any sale of such Securities
made in  reliance on Rule 144 may be


                                       3
<PAGE>

made only in accordance with the terms of said Rule and further, if said Rule is
not applicable,  any re-sale of such Securities under circumstances in which the
seller  (or the  person  through  whom the sale is made)  may be deemed to be an
underwriter  (as that term is  defined in the 1933 Act) may  require  compliance
with some other exemption under the 1933 Act or the rules and regulations of the
SEC thereunder;  and (iii) neither the Company nor any other person is under any
obligation  to  register  such  Securities  under  the  1933  Act or  any  state
securities  laws or to comply  with the terms and  conditions  of any  exemption
thereunder  (in each  case,  other  than  pursuant  to the  Registration  Rights
Agreement).  Notwithstanding  the foregoing or anything else contained herein to
the contrary,  the Securities may be pledged as collateral in connection  with a
bona fide margin  account or other  lending  arrangement.  In the event that the
Company  does not accept  the  opinion  of  counsel  provided  by the Buyer with
respect  to  the  transfer  of   Securities   pursuant  to  an  exemption   from
registration,  such as Rule 144 or  Regulation S (provided  that such opinion is
correct and complies with all applicable  rules and  regulations),  within three
(3) business  days of delivery of the opinion to the Company,  the Company shall
pay to the Buyer  liquidated  damages of three  percent (3%) of the  outstanding
amount of the  Debentures  per month plus  accrued  and unpaid  interest  on the
Debentures,  prorated for partial months, in cash or shares at the option of the
Buyer ("Standard Liquidated Damages Amount"). If the Buyer elects to be paid the
Standard  Liquidated Damages Amount in shares of Common Stock, such shares shall
be  issued  at the  Conversion  Price at the  time of  payment  of the  Standard
Liquidated Damages Amount.

              g. Legends.  The Buyer  understands  that the  Debentures  and the
Warrants and, until such time as the  Conversion  Shares and Warrant Shares have
been registered  under the 1933 Act as contemplated by the  Registration  Rights
Agreement or otherwise  may be sold pursuant to Rule 144 or Regulation S without
any  restriction as to the number of securities as of a particular date that can
then be immediately  sold,  the Conversion  Shares and Warrant Shares may bear a
restrictive  legend in  substantially  the following  form (and a  stop-transfer
order may be placed against transfer of the certificates for such Securities):

                  "The securities  represented by this certificate have not been
                  registered  under the Securities Act of 1933, as amended.  The
                  securities  may not be sold,  transferred  or  assigned in the
                  absence  of  an  effective   registration  statement  for  the
                  securities under said Act, or an opinion of counsel,  in form,
                  substance  and scope  customary  for  opinions  of  counsel in
                  comparable  transactions,  that  registration  is not required
                  under  said  Act  or  unless  sold  pursuant  to  Rule  144 or
                  Regulation S under said Act."

         The legend set forth above shall be removed and the Company shall issue
a certificate without such legend to the holder of any Security upon which it is
stamped,  if, unless otherwise required by applicable state securities laws, (a)
such Security is registered for sale under an effective  registration  statement
filed  under  the  1933 Act or  otherwise  may be sold  pursuant  to Rule 144 or
Regulation  S without any  restriction  as to the number of  securities  as of a
particular  date that can then be immediately  sold, or (b) such holder provides
the Company with an opinion of counsel,  in form,  substance and scope customary
for opinions of counsel in comparable transactions,  to the effect that a public
sale or transfer of such  Security  may be made without  registration  under the
1933 Act,  which  opinion  shall be  accepted by the Company so that the sale or
transfer is effected or (c) such holder  provides  the Company  with  reasonable
assurances  that

                                       4
<PAGE>

such Security can be sold pursuant to Rule 144 or Regulation S. The Buyer agrees
to sell all Securities,  including those  represented by a  certificate(s)  from
which the legend has been removed,  in  compliance  with  applicable  prospectus
delivery requirements, if any.

              h. Authorization; Enforcement. This Agreement and the Registration
Rights Agreement have been duly and validly authorized.  This Agreement has been
duly  executed  and  delivered  on  behalf  of the  Buyer,  and  this  Agreement
constitutes,  and upon  execution and delivery by the Buyer of the  Registration
Rights Agreement,  such agreement will constitute,  valid and binding agreements
of the Buyer enforceable in accordance with their terms.

              i.  Residency.  The Buyer is a resident  of the  jurisdiction  set
forth immediately below such Buyer's name on the signature pages hereto.

         3.   REPRESENTATIONS  AND  WARRANTIES  OF  THE  COMPANY.   The  Company
represents and warrants to each Buyer that:

              a.  Organization  and  Qualification.  The Company and each of its
Subsidiaries  (as defined  below),  if any,  is a  corporation  duly  organized,
validly  existing and in good  standing  under the laws of the  jurisdiction  in
which it is incorporated, with full power and authority (corporate and other) to
own,  lease,  use and operate its properties and to carry on its business as and
where now owned, leased, used, operated and conducted.  Schedule 3(a) sets forth
a list of all of the  Subsidiaries of the Company and the  jurisdiction in which
each is incorporated. The Company and each of its Subsidiaries is duly qualified
as a  foreign  corporation  to do  business  and is in good  standing  in  every
jurisdiction  in which its  ownership  or use of  property  or the nature of the
business  conducted by it makes such  qualification  necessary  except where the
failure to be so qualified or in good standing would not have a Material Adverse
Effect.  "Material  Adverse  Effect"  means any material  adverse  effect on the
business, operations, assets, financial condition or prospects of the Company or
its Subsidiaries,  if any, taken as a whole, or on the transactions contemplated
hereby or by the  agreements  or  instruments  to be entered into in  connection
herewith.  "Subsidiaries"  means any corporation or other organization,  whether
incorporated  or  unincorporated,   in  which  the  Company  owns,  directly  or
indirectly, any equity or other ownership interest.

              b. Authorization;  Enforcement.  (i) The Company has all requisite
corporate  power and  authority  to enter into and perform this  Agreement,  the
Registration Rights Agreement, the Debentures and the Warrants and to consummate
the transactions contemplated hereby and thereby and to issue the Securities, in
accordance with the terms hereof and thereof, (ii) the execution and delivery of
this  Agreement,  the  Registration  Rights  Agreement,  the  Debentures and the
Warrants  by  the  Company  and  the  consummation  by  it of  the  transactions
contemplated hereby and thereby (including without  limitation,  the issuance of
the Debentures and the Warrants and the issuance and reservation for issuance of
the Conversion  Shares and Warrant Shares  issuable upon  conversion or exercise
thereof) have been duly  authorized  by the Company's  Board of Directors and no
further consent or authorization of the Company, its Board of Directors,  or its
stockholders  is  required,  (iii) this  Agreement  has been duly  executed  and
delivered by the Company by its authorized  representative,  and such authorized
representative  is the true and official  representative  with authority to sign
this Agreement and the other documents executed in connection  herewith and bind
the Company accordingly, and (iv) this Agreement constitutes, and upon execution
and delivery by the Company of the Registration


                                       5
<PAGE>

Rights Agreement, the Debentures and the Warrants, each of such instruments will
constitute,  a legal,  valid and binding  obligation of the Company  enforceable
against the Company in accordance with its terms.

              c.  Capitalization.  As of the date hereof, the authorized capital
stock of the Company  consists of (i)  100,000,000  shares of Common  Stock,  of
which 29,719,607  shares are issued and outstanding,  no shares are reserved for
issuance  pursuant to the  Company's  stock option plans,  3,768,000  shares are
reserved in connection  with consulting  agreements;  45,903,635 are reserved in
connection with warrants and convertible debentures;  and 101,000,000 shares are
reserved for issuance  upon  conversion  of the  Debentures  and exercise of the
Warrants (subject to adjustment  pursuant to the Company's covenant set forth in
Section 4(h) below);  and (ii)  20,000,000  shares of preferred  stock, of which
420,000 shares are issued and  outstanding.  All of such  outstanding  shares of
capital stock are, or upon issuance will be, duly  authorized,  validly  issued,
fully paid and  nonassessable.  No shares of capital  stock of the  Company  are
subject to preemptive  rights or any other similar rights of the stockholders of
the Company or any liens or encumbrances  imposed through the actions or failure
to act of the Company. Except as disclosed in Schedule 3(c), as of the effective
date of this Agreement, (i) there are no outstanding options,  warrants,  scrip,
rights to subscribe  for,  puts,  calls,  rights of first  refusal,  agreements,
understandings,   claims  or  other  commitments  or  rights  of  any  character
whatsoever relating to, or securities or rights convertible into or exchangeable
for any shares of capital  stock of the Company or any of its  Subsidiaries,  or
arrangements  by which the Company or any of its  Subsidiaries  is or may become
bound to issue  additional  shares of capital stock of the Company or any of its
Subsidiaries,  (ii) there are no  agreements  or  arrangements  under  which the
Company or any of its  Subsidiaries  is obligated to register the sale of any of
its or their  securities  under the 1933 Act  (except  the  Registration  Rights
Agreement) and (iii) there are no anti-dilution  or price adjustment  provisions
contained in any security  issued by the Company (or in any agreement  providing
rights to  security  holders)  that will be  triggered  by the  issuance  of the
Debentures,  the Warrants,  the Conversion Shares or Warrant Shares. The Company
has furnished to the Buyer true and correct copies of the Company's  Certificate
of   Incorporation   as  in  effect  on  the  date   hereof   ("Certificate   of
Incorporation"),  the  Company's  By-laws,  as in effect on the date hereof (the
"By-laws"),  and the terms of all securities convertible into or exercisable for
Common  Stock of the Company and the material  rights of the holders  thereof in
respect  thereto.  The Company shall provide the Buyer with a written  update of
this  representation  signed by the Company's Chief Executive or Chief Financial
Officer on behalf of the Company as of the Closing Date.

              d.  Issuance of Shares.  Subject to the  Stockholder  Approval (as
defined in Section  4(1)),  the  Conversion  Shares and Warrant  Shares are duly
authorized and reserved for issuance and, upon  conversion of the Debentures and
exercise of the Warrants in  accordance  with their  respective  terms,  will be
validly issued,  fully paid and non-assessable,  and free from all taxes, liens,
claims  and  encumbrances  with  respect to the issue  thereof  and shall not be
subject to preemptive  rights or other  similar  rights of  stockholders  of the
Company and will not impose personal liability upon the holder thereof.

              e.  Acknowledgment  of  Dilution.   The  Company  understands  and
acknowledges  the  potentially  dilutive  effect to the  Common  Stock  upon the
issuance of the  Conversion  Shares and



                                       6
<PAGE>

Warrant Shares upon conversion of the Debenture or exercise of the Warrants. The
Company further  acknowledges that its obligation to issue Conversion Shares and
Warrant Shares upon  conversion of the Debentures or exercise of the Warrants in
accordance with this Agreement,  the Debentures and the Warrants is absolute and
unconditional  regardless of the dilutive  effect that such issuance may have on
the ownership interests of other stockholders of the Company.

              f. No Conflicts.  Subject to the Stockholder  Approval (as defined
in Section 4(1)), the execution, delivery and performance of this Agreement, the
Registration  Rights  Agreement,  the Debentures and the Warrants by the Company
and the consummation by the Company of the transactions  contemplated hereby and
thereby  (including,  without  limitation,  the  issuance  and  reservation  for
issuance of the Conversion Shares and Warrant Shares) will not (i) conflict with
or result in a violation of any provision of the Certificate of Incorporation or
By-laws or (ii) violate or conflict with, or result in a breach of any provision
of, or  constitute  a default (or an event which with notice or lapse of time or
both could become a default) under, or give to others any rights of termination,
amendment,  acceleration or cancellation of, any agreement,  indenture,  patent,
patent license or instrument to which the Company or any of its  Subsidiaries is
a party,  or (iii) result in a violation of any law,  rule,  regulation,  order,
judgment or decree (including  federal and state securities laws and regulations
and regulations of any self-regulatory organizations to which the Company or its
securities are subject)  applicable to the Company or any of its Subsidiaries or
by which any  property  or asset of the  Company or any of its  Subsidiaries  is
bound  or  affected   (except  for  such  conflicts,   defaults,   terminations,
amendments,   accelerations,   cancellations   and   violations  as  would  not,
individually or in the aggregate,  have a Material Adverse Effect).  Neither the
Company  nor any of its  Subsidiaries  is in  violation  of its  Certificate  of
Incorporation, By-laws or other organizational documents and neither the Company
nor any of its  Subsidiaries is in default (and no event has occurred which with
notice or lapse of time or both could put the Company or any of its Subsidiaries
in default) under, and neither the Company nor any of its Subsidiaries has taken
any action or failed to take any action  that would give to others any rights of
termination,   amendment,   acceleration  or  cancellation  of,  any  agreement,
indenture or  instrument  to which the Company or any of its  Subsidiaries  is a
party  or by  which  any  property  or  assets  of  the  Company  or  any of its
Subsidiaries  is bound or affected,  except for possible  defaults as would not,
individually or in the aggregate, have a Material Adverse Effect. The businesses
of the Company and its Subsidiaries,  if any, are not being conducted, and shall
not be conducted so long as a Buyer owns any of the Securities,  in violation of
any  law,  ordinance  or  regulation  of  any  governmental  entity.  Except  as
specifically  contemplated  by this Agreement and as required under the 1933 Act
and any applicable  state securities laws, the Company is not required to obtain
any consent, authorization or order of, or make any filing or registration with,
any court, governmental agency, regulatory agency,  self-regulatory organization
or stock  market  or any  third  party in order for it to  execute,  deliver  or
perform any of its obligations  under this Agreement,  the  Registration  Rights
Agreement, the Debentures or the Warrants in accordance with the terms hereof or
thereof or to issue and sell the Debentures and Warrants in accordance  with the
terms  hereof  and  to  issue  the  Conversion  Shares  upon  conversion  of the
Debentures  and the Warrant  Shares upon  exercise  of the  Warrants.  Except as
disclosed in Schedule 3(f), all consents,  authorizations,  orders,  filings and
registrations  which the Company is required to obtain pursuant to the preceding
sentence  have been  obtained or effected  on or prior to the date  hereof.  The
Company is not in violation of the listing  requirements of the Over-the-Counter
Bulletin Board (the "OTCBB") and does not reasonably  anticipate that the Common
Stock will be delisted by the OTCBB in the foreseeable  future.  The Company and
its Subsidiaries are unaware of any facts or circumstances which might give rise
to any of the foregoing.



                                       7
<PAGE>

              g. SEC  Documents;  Financial  Statements.  The Company has timely
filed all reports,  schedules, forms, statements and other documents required to
be  filed by it with  the SEC  pursuant  to the  reporting  requirements  of the
Securities  Exchange  Act of 1934,  as  amended  (the  "1934  Act")  (all of the
foregoing filed prior to the date hereof and all exhibits  included  therein and
financial statements and schedules thereto and documents (other than exhibits to
such documents) incorporated by reference therein, being hereinafter referred to
herein as the "SEC Documents"). The Company has delivered to each Buyer true and
complete copies of the SEC Documents,  except for such exhibits and incorporated
documents.  As of their  respective  dates,  the SEC  Documents  complied in all
material  respects  with the  requirements  of the 1934  Act and the  rules  and
regulations of the SEC promulgated  thereunder  applicable to the SEC Documents,
and  none of the SEC  Documents,  at the  time  they  were  filed  with the SEC,
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.  None of the  statements  made in any such SEC  Documents is, or has
been,  required to be amended or updated under  applicable  law (except for such
statements as have been amended or updated in subsequent  filings prior the date
hereof).  As of their respective dates, the financial  statements of the Company
included in the SEC Documents  complied as to form in all material respects with
applicable  accounting  requirements  and the published rules and regulations of
the SEC with respect  thereto.  Such financial  statements have been prepared in
accordance  with  United  States  generally  accepted   accounting   principles,
consistently  applied,  during  the  periods  involved  (except  (i)  as  may be
otherwise  indicated in such financial  statements or the notes thereto, or (ii)
in the case of unaudited interim statements,  to the extent they may not include
footnotes or may be condensed or summary  statements)  and fairly present in all
material  respects the  consolidated  financial  position of the Company and its
consolidated  Subsidiaries as of the dates thereof and the consolidated  results
of their  operations and cash flows for the periods then ended (subject,  in the
case of unaudited statements,  to normal year-end audit adjustments).  Except as
set  forth  in the  financial  statements  of the  Company  included  in the SEC
Documents, the Company has no liabilities,  contingent or otherwise,  other than
(i)  liabilities  incurred  in the  ordinary  course of business  subsequent  to
December 31, 2001 and (ii) obligations under contracts and commitments  incurred
in the ordinary  course of business and not required  under  generally  accepted
accounting  principles  to be reflected  in such  financial  statements,  which,
individually or in the aggregate, are not material to the financial condition or
operating results of the Company.

              h. Absence of Certain Changes.  Since December 31, 2001, there has
been no material  adverse  change and no  material  adverse  development  in the
assets,  liabilities,  business,  properties,  operations,  financial condition,
results of operations or prospects of the Company or any of its Subsidiaries.

              i.  Absence  of  Litigation.  There  is no  action,  suit,  claim,
proceeding,  inquiry  or  investigation  before or by any court,  public  board,
government  agency,  self-regulatory  organization  or body  pending  or, to the
knowledge  of the  Company  or any of its  Subsidiaries,  threatened  against or
affecting the Company or any of its Subsidiaries, or their officers or directors
in their capacity as such, that could have a Material  Adverse Effect.  Schedule
3(i)  contains  a  complete  list and  summary  description  of any  pending  or
threatened   proceeding   against  or  affecting  the  Company  or  any  of  its
Subsidiaries, without regard to whether it would have a Material Adverse Effect.
The Company and its Subsidiaries are unaware of any facts or circumstances which
might give rise to any of the foregoing.



                                       8
<PAGE>

         j. Patents, Copyrights, etc.

              (i) The Company and each of its Subsidiaries owns or possesses the
requisite  licenses or rights to use all patents,  patent  applications,  patent
rights, inventions, know-how, trade secrets, trademarks, trademark applications,
service  marks,  service  names,  trade  names  and  copyrights   ("Intellectual
Property")  necessary to enable it to conduct its business as now operated (and,
except  as set  forth in  Schedule  3(j)  hereof,  to the best of the  Company's
knowledge,  as presently contemplated to be operated in the future); there is no
claim or action by any person  pertaining to, or proceeding  pending,  or to the
Company's knowledge threatened,  which challenges the right of the Company or of
a Subsidiary with respect to any Intellectual Property necessary to enable it to
conduct its business as now operated (and,  except as set forth in Schedule 3(j)
hereof, to the best of the Company's knowledge,  as presently contemplated to be
operated in the future); to the best of the Company's  knowledge,  the Company's
or its Subsidiaries'  current and intended  products,  services and processes do
not  infringe on any  Intellectual  Property or other rights held by any person;
and the Company is unaware of any facts or  circumstances  which might give rise
to any of the  foregoing.  The Company and each of its  Subsidiaries  have taken
reasonable  security measures to protect the secrecy,  confidentiality and value
of their Intellectual Property.

              (ii) All of the Company's computer software and computer hardware,
and other  similar or  related  items of  automated,  computerized  or  software
systems that are used or relied on by the Company in the conduct of its business
or that  were,  or  currently  are being,  sold or  licensed  by the  Company to
customers (collectively, "Information Technology"), are Year 2000 Compliant. For
purposes of this Agreement,  the term "Year 2000 Compliant"  means, with respect
to the Company's  Information  Technology,  that the  Information  Technology is
designed to be used prior to, during and after the calendar  Year 2000,  and the
Information  Technology  used  during  each such  time  period  will  accurately
receive, provide and process date and time data (including,  but not limited to,
calculating,  comparing and sequencing) from, into and between the 20th and 21st
centuries,  including the years 1999 and 2000, and leap-year  calculations,  and
will not malfunction, cease to function, or provide invalid or incorrect results
as a result of the date or time  data,  to the  extent  that  other  information
technology,  used in  combination  with  the  Information  Technology,  properly
exchanges  date and time data with it. The Company has  delivered  to the Buyers
true and correct copies of all analyses,  reports,  studies and similar  written
information,  whether  prepared  by the  Company or another  party,  relating to
whether the Information Technology is Year 2000 Compliant, if any.

         k. No Materially Adverse Contracts, Etc. Neither the Company nor any of
its   Subsidiaries  is  subject  to  any  charter,   corporate  or  other  legal
restriction,  or any judgment,  decree,  order,  rule or regulation which in the
judgment of the  Company's  officers  has or is expected in the future to have a
Material  Adverse Effect.  Neither the Company nor any of its  Subsidiaries is a
party to any  contract  or  agreement  which in the  judgment  of the  Company's
officers has or is expected to have a Material Adverse Effect.

         l. Tax Status.  Except as set forth on Schedule  3(l),  the Company and
each of its Subsidiaries has made or filed all federal, state and foreign income
and all other tax returns, reports and declarations required by any jurisdiction
to which it is subject  (unless and only to the extent that the Company and each
of its Subsidiaries has set aside on its books  provisions  reasonably  adequate
for the payment of all unpaid and  unreported  taxes) and has paid



                                       9
<PAGE>

all taxes and other  governmental  assessments  and charges that are material in
amount, shown or determined to be due on such returns, reports and declarations,
except  those  being  contested  in good  faith  and has set  aside on its books
provisions  reasonably  adequate  for  the  payment  of all  taxes  for  periods
subsequent to the periods to which such returns,  reports or declarations apply.
There are no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction,  and the officers of the Company know of no basis
for any such claim.  The Company has not  executed a waiver with  respect to the
statute of limitations  relating to the assessment or collection of any foreign,
federal,  state or local tax.  Except as set forth on Schedule 3(l), none of the
Company's tax returns is presently being audited by any taxing authority.

              m. Certain Transactions.  Except as set forth on Schedule 3(m) and
except for arm's length transactions pursuant to which the Company or any of its
Subsidiaries  makes  payments in the ordinary  course of business  upon terms no
less  favorable  than the Company or any of its  Subsidiaries  could obtain from
third  parties and other than the grant of stock  options  disclosed on Schedule
3(c), none of the officers,  directors, or employees of the Company is presently
a party to any transaction  with the Company or any of its  Subsidiaries  (other
than for services as employees, officers and directors), including any contract,
agreement or other  arrangement  providing for the  furnishing of services to or
by,  providing for rental of real or personal  property to or from, or otherwise
requiring payments to or from any officer,  director or such employee or, to the
knowledge of the Company, any corporation, partnership, trust or other entity in
which any officer,  director, or any such employee has a substantial interest or
is an officer, director, trustee or partner.

              n.  Disclosure.  All  information  relating to or  concerning  the
Company or any of its  Subsidiaries  set forth in this Agreement and provided to
the Buyers  pursuant to Section 2(d) hereof and otherwise in connection with the
transactions  contemplated  hereby is true and correct in all material  respects
and the Company has not omitted to state any material fact necessary in order to
make the statements made herein or therein,  in light of the circumstances under
which they were made, not misleading.  No event or circumstance  has occurred or
exists with  respect to the Company or any of its  Subsidiaries  or its or their
business,  properties,  prospects,  operations or financial  conditions,  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  (assuming for this purpose that the Company's reports filed under the
1934 Act are being incorporated into an effective  registration  statement filed
by the Company under the 1933 Act).

              o.  Acknowledgment  Regarding Buyers' Purchase of Securities.  The
Company  acknowledges  and  agrees  that the  Buyers  are  acting  solely in the
capacity of arm's  length  purchasers  with  respect to this  Agreement  and the
transactions contemplated hereby. The Company further acknowledges that no Buyer
is acting as a financial  advisor or fiduciary of the Company (or in any similar
capacity)  with  respect to this  Agreement  and the  transactions  contemplated
hereby  and  any  statement  made  by  any  Buyer  or any  of  their  respective
representatives or agents in connection with this Agreement and the transactions
contemplated  hereby is not advice or a recommendation  and is merely incidental
to the Buyers'  purchase of the Securities.  The Company  further  represents to
each Buyer that the  Company's  decision to enter into this  Agreement  has been
based   solely  on  the   independent   evaluation   of  the   Company  and  its
representatives.



                                       10
<PAGE>

              p. No  Integrated  Offering.  Neither the Company,  nor any of its
affiliates,  nor any  person  acting on its or their  behalf,  has  directly  or
indirectly  made any offers or sales in any security or solicited  any offers to
buy any security under  circumstances that would require  registration under the
1933 Act of the issuance of the  Securities  to the Buyers.  The issuance of the
Securities to the Buyers will not be integrated  with any other  issuance of the
Company's  securities (past,  current or future) for purposes of any stockholder
approval provisions applicable to the Company or its securities.

              q. No Brokers.  The  Company has taken no action  which would give
rise to any claim by any person for brokerage  commissions,  transaction fees or
similar  payments  relating to this Agreement or the  transactions  contemplated
hereby.

              r. Permits;  Compliance.  The Company and each of its Subsidiaries
is in possession of all franchises, grants,  authorizations,  licenses, permits,
easements, variances, exemptions,  consents, certificates,  approvals and orders
necessary to own,  lease and operate its properties and to carry on its business
as it is now being conducted (collectively, the "Company Permits"), and there is
no action  pending or, to the  knowledge  of the Company,  threatened  regarding
suspension or  cancellation of any of the Company  Permits.  Neither the Company
nor any of its  Subsidiaries is in conflict with, or in default or violation of,
any of  the  Company  Permits,  except  for  any  such  conflicts,  defaults  or
violations  which,  individually  or in the  aggregate,  would not reasonably be
expected to have a Material Adverse Effect. Since December 31, 2001, neither the
Company nor any of its Subsidiaries  has received any notification  with respect
to possible  conflicts,  defaults or violations of applicable  laws,  except for
notices relating to possible conflicts, defaults or violations, which conflicts,
defaults or violations would not have a Material Adverse Effect.

              s. Environmental Matters.

              (i)  Except as set  forth in  Schedule  3(s),  there  are,  to the
Company's  knowledge,  with respect to the Company or any of its Subsidiaries or
any predecessor of the Company,  no past or present  violations of Environmental
Laws (as defined below), releases of any material into the environment, actions,
activities,   circumstances,   conditions,  events,  incidents,  or  contractual
obligations which may give rise to any common law environmental liability or any
liability  under the  Comprehensive  Environmental  Response,  Compensation  and
Liability  Act of 1980 or similar  federal,  state,  local or  foreign  laws and
neither the Company nor any of its  Subsidiaries  has  received  any notice with
respect to any of the foregoing,  nor is any action pending or, to the Company's
knowledge,  threatened  in  connection  with  any of  the  foregoing.  The  term
"Environmental Laws" means all federal, state, local or foreign laws relating to
pollution or protection of human health or the environment  (including,  without
limitation,  ambient air, surface water, groundwater, land surface or subsurface
strata), including, without limitation, laws relating to emissions,  discharges,
releases or threatened releases of chemicals,  pollutants contaminants, or toxic
or hazardous substances or wastes (collectively, "Hazardous Materials") into the
environment, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all  authorizations,  codes,  decrees,  demands  or  demand  letters,
injunctions,  judgments,  licenses,  notices or notice letters, orders, permits,
plans or regulations issued, entered, promulgated or approved thereunder.



                                       11
<PAGE>

              (ii) Other than those that are or were stored, used or disposed of
in compliance with  applicable  law, no Hazardous  Materials are contained on or
about any real property currently owned, leased or used by the Company or any of
its Subsidiaries,  and no Hazardous Materials were released on or about any real
property  previously  owned,  leased  or  used  by  the  Company  or  any of its
Subsidiaries  during the period the  property  was owned,  leased or used by the
Company or any of its Subsidiaries, except in the normal course of the Company's
or any of its Subsidiaries' business.

              (iii)  Except  as  set  forth  in  Schedule  3(s),  there  are  no
underground storage tanks on or under any real property owned, leased or used by
the  Company  or  any of its  Subsidiaries  that  are  not  in  compliance  with
applicable law.

         t. Title to Property.  The Company and its  Subsidiaries  have good and
marketable  title in fee  simple to all real  property  and good and  marketable
title to all personal  property  owned by them which is material to the business
of the Company and its  Subsidiaries,  in each case free and clear of all liens,
encumbrances  and defects  except such as are described in Schedule 3(t) or such
as would not have a Material  Adverse  Effect.  Any real property and facilities
held under  lease by the  Company  and its  Subsidiaries  are held by them under
valid,  subsisting and enforceable leases with such exceptions as would not have
a Material Adverse Effect.

         u. Insurance.  The Company and each of its  Subsidiaries are insured by
insurers of recognized  financial  responsibility  against such losses and risks
and in such  amounts as  management  of the  Company  believes to be prudent and
customary  in the  businesses  in which the  Company  and its  Subsidiaries  are
engaged.  Neither the Company nor any such  Subsidiary has any reason to believe
that it will not be able to renew its  existing  insurance  coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may
be  necessary  to continue its business at a cost that would not have a Material
Adverse Effect. The Company has provided to Buyer true and correct copies of all
policies  relating to directors' and officers'  liability  coverage,  errors and
omissions coverage, and commercial general liability coverage.

         v.  Internal  Accounting   Controls.   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 action
is taken with respect to any differences.

         w.  Foreign  Corrupt  Practices.  Neither the  Company,  nor any of its
Subsidiaries,  nor any director, officer, agent, employee or other person acting
on behalf of the  Company or any  Subsidiary  has,  in the course of his actions
for, or on behalf of, the  Company,  used any  corporate  funds for any unlawful
contribution,  gift,  entertainment  or  other  unlawful  expenses  relating  to
political activity;  made any direct or indirect unlawful payment to any foreign
or domestic government official or employee from corporate funds; violated or is
in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977,
as amended, or made any bribe, rebate,  payoff,  influence payment,  kickback or
other  unlawful  payment  to any  foreign or  domestic  government  official  or
employee.



                                       12
<PAGE>

              x.  Solvency.  Except as set forth on Schedule  3(x),  the Company
(after  giving effect to the  transactions  contemplated  by this  Agreement) is
solvent  (i.e.,  its  assets  have a fair  market  value in excess of the amount
required to pay its probable  liabilities  on its existing  debts as they become
absolute and matured) and  currently the Company has no  information  that would
lead it to reasonably  conclude that the Company would not,  after giving effect
to the transaction contemplated by this Agreement, have the ability to, nor does
it intend to take any action  that would  impair its  ability  to, pay its debts
from time to time  incurred in connection  therewith as such debts  mature.  The
Company did not receive a qualified  opinion from its  auditors  with respect to
its most recent  fiscal year end and,  after giving  effect to the  transactions
contemplated  by this  Agreement,  does not anticipate or know of any basis upon
which its  auditors  might issue a  qualified  opinion in respect of its current
fiscal year.

              y. No  Investment  Company.  The  Company  is not,  and  upon  the
issuance and sale of the Securities as  contemplated  by this Agreement will not
be an  "investment  company"  required  to be  registered  under the  Investment
Company Act of 1940 (an "Investment Company").  The Company is not controlled by
an Investment Company.

              z. Breach of Representations and Warranties by the Company. If the
Company  breaches any of the  representations  or  warranties  set forth in this
Section  3, and in  addition  to any  other  remedies  available  to the  Buyers
pursuant  to this  Agreement,  the Company  shall pay to the Buyer the  Standard
Liquidated  Damages Amount in cash or in shares of Common Stock at the option of
the  Buyer,  until  such  breach is cured.  If the  Buyers  elect to be paid the
Standard Liquidated Damages Amounts in shares of Common Stock, such shares shall
be issued at the Conversion Price at the time of payment.

         4. COVENANTS.

              a. Best  Efforts.  The  parties  shall use their  best  efforts to
satisfy  timely  each of the  conditions  described  in  Section 6 and 7 of this
Agreement.

              b. Form D; Blue Sky Laws. The Company agrees to file a Form D with
respect to the Securities as required  under  Regulation D and to provide a copy
thereof to each Buyer  promptly  after such  filing.  The Company  shall,  on or
before the  Closing  Date,  take such  action as the  Company  shall  reasonably
determine is necessary to qualify the  Securities  for sale to the Buyers at the
applicable  closing  pursuant to this Agreement under  applicable  securities or
"blue sky" laws of the states of the  United  States (or to obtain an  exemption
from such qualification), and shall provide evidence of any such action so taken
to each Buyer on or prior to the Closing Date.

              c.  Reporting  Status;  Eligibility  to Use Form S-3, SB-2 or Form
S-1. The Company's  Common Stock is  registered  under Section 12(g) of the 1934
Act. The Company  represents and warrants that it meets the requirements for the
use of Form S-3 (or if the Company is not eligible for the use of Form S-3 as of
the Filing Date (as defined in the Registration  Rights Agreement),  the Company
may use the form of  registration  for which it is



                                       13
<PAGE>

eligible  at  that  time)  for  registration  of the  sale by the  Buyer  of the
Registrable  Securities (as defined in the Registration  Rights  Agreement).  So
long as the Buyer  beneficially  owns any of the  Securities,  the Company shall
timely file all reports  required to be filed with the SEC  pursuant to the 1934
Act, and the Company  shall not  terminate  its status as an issuer  required to
file  reports  under  the  1934  Act  even  if the  1934  Act or the  rules  and
regulations thereunder would permit such termination. The Company further agrees
to file all reports required to be filed by the Company with the SEC in a timely
manner so as to become eligible, and thereafter to maintain its eligibility, for
the use of Form S-3.  The Company  shall issue a press  release  describing  the
materials  terms of the transaction  contemplated  hereby as soon as practicable
following  the Closing Date but in no event more than two (2)  business  days of
the Closing  Date,  which press  release shall be subject to prior review by the
Buyers.  The Company  agrees that such press release shall not disclose the name
of the Buyers unless  expressly  consented to in writing by the Buyers or unless
required by applicable  law or  regulation,  and then only to the extent of such
requirement.

              d. Use of Proceeds.  The Company  shall use the proceeds  from the
sale of the Debentures and the Warrants in the manner set forth in Schedule 4(d)
attached  hereto and made a part hereof and shall not,  directly or  indirectly,
use  such  proceeds  for any loan to or  investment  in any  other  corporation,
partnership, enterprise or other person (except in connection with its currently
existing direct or indirect Subsidiaries)

              e. Future  Offerings.  Subject to the exceptions  described below,
the   Company   will   not,   without   the   prior   written   consent   of   a
majority-in-interest  of the Buyers, not to be unreasonably withheld,  negotiate
or contract with any party to obtain additional equity financing (including debt
financing  with an equity  component)  that  involves (A) the issuance of Common
Stock at a  discount  to the  market  price of the  Common  Stock on the date of
issuance  (taking  into  account the value of any warrants or options to acquire
Common Stock issued in connection  therewith) or (B) the issuance of convertible
securities that are convertible into an indeterminate number of shares of Common
Stock or (C) the issuance of warrants  during the period (the "Lock-up  Period")
beginning on the Closing Date and ending on the later of (i) two hundred seventy
(270) days from the Closing Date and (ii) one hundred eighty (180) days from the
date  the  Registration   Statement  (as  defined  in  the  Registration  Rights
Agreement)  is declared  effective  (plus any days in which sales cannot be made
thereunder). In addition, subject to the exceptions described below, the Company
will not conduct any equity financing  (including debt with an equity component)
("Future  Offerings") during the period beginning on the Closing Date and ending
two (2) years  after the end of the  Lock-up  Period  unless it shall have first
delivered to each Buyer, at least twenty (20) business days prior to the closing
of such Future Offering, written notice describing the proposed Future Offering,
including the terms and



                                       14
<PAGE>

conditions thereof and proposed  definitive  documentation to be entered into in
connection therewith, and providing each Buyer an option during the fifteen (15)
day period  following  delivery of such  notice to  purchase  its pro rata share
(based on the ratio that the aggregate principal amount of Debentures  purchased
by it hereunder bears to the aggregate principal amount of Debentures  purchased
hereunder) of the  securities  being offered in the Future  Offering on the same
terms as contemplated by such Future  Offering (the  limitations  referred to in
this sentence and the  preceding  sentence are  collectively  referred to as the
"Capital  Raising  Limitations").  In the event the  terms and  conditions  of a
proposed Future Offering are amended in any respect after delivery of the notice
to the Buyers concerning the proposed Future Offering, the Company shall deliver
a new notice to each Buyer  describing  the amended terms and  conditions of the
proposed Future Offering and each Buyer  thereafter  shall have an option during
the fifteen  (15) day period  following  delivery of such new notice to purchase
its pro  rata  share  of the  securities  being  offered  on the  same  terms as
contemplated  by such  proposed  Future  Offering,  as  amended.  The  foregoing
sentence shall apply to successive amendments to the terms and conditions of any
proposed Future Offering. The Capital Raising Limitations shall not apply to any
transaction   involving  (i)  issuances  of  securities  in  a  firm  commitment
underwritten  public offering  (excluding a continuous offering pursuant to Rule
415 under the 1933 Act) or (ii) issuances of securities as  consideration  for a
merger, consolidation or purchase of assets, or in connection with any strategic
partnership  or joint  venture  (the  primary  purpose  of which is not to raise
equity  capital),  or in connection  with the  disposition  or  acquisition of a
business,  product or license by the Company.  The Capital  Raising  Limitations
also shall not apply to the issuance of  securities  upon exercise or conversion
of the Company's options,  warrants or other convertible  securities outstanding
as of the date hereof or to the grant of additional options or warrants,  or the
issuance of additional securities,  under any Company stock option or restricted
stock plan approved by the  stockholders  of the Company.  In the event that the
Company  completes a Future Offering on terms more favorable to another investor
than the transaction  contemplated  hereby,  the terms of the Debentures and the
Warrants will be amended to reflect such more favorable  terms.

              f. Expenses.  At the Closing,  the Company shall reimburse  Buyers
for expenses  incurred by them in connection with the negotiation,  preparation,
execution,  delivery and performance of this Agreement and the other  agreements
to  be  executed  in  connection  herewith  ("Documents"),   including,  without
limitation,  attorneys' and consultants' fees and expenses, transfer agent fees,
fees  for  stock  quotation  services,   fees  relating  to  any  amendments  or
modifications  of the  Documents or any consents or waivers of provisions in the
Documents,  fees for the  preparation  of opinions of counsel,  escrow fees, and
costs of  restructuring  the  transactions  contemplated by the Documents.  When
possible,  the Company must pay these fees directly,  otherwise the Company must
make immediate payment for reimbursement to the Buyers for all fees and expenses
immediately  upon written notice by the Buyer or the submission of an invoice by
the Buyer.  If the Company  fails to reimburse the Buyer in full within five (5)
business days of the written  notice or submission of invoice by the Buyer,  the
Company  shall pay  interest on the total amount of fees to be  reimbursed  at a
rate of 15% per annum.

              g. Financial Information. The Company agrees to send the following
reports to each Buyer until such Buyer transfers,  assigns,  or sells all of the
Securities:  (i) within  ten (10) days after the filing  with the SEC, a copy of
its Annual Report on Form 10-KSB,  its Quarterly  Reports on Form 10-QSB and any
Current  Reports on Form 8-K; (ii) within one (1) day after  release,  copies of
all press releases issued by the Company or any of its  Subsidiaries;  and (iii)
contemporaneously with the making available or giving to the stockholders of the
Company,  copies of any notices or other information the Company makes available
or gives to such stockholders.

              h.  Authorization  and  Reservation  of  Shares.  Subject  to  the
Stockholder  Approval  (as defined in Section  4(1)),  the Company  shall at all
times have  authorized,  and reserved for the purpose of issuance,  a sufficient
number of shares of Common Stock to provide for the full  conversion or exercise
of the outstanding Debentures and Warrants and issuance of the Conversion Shares
and Warrant Shares in connection therewith (based on the



                                       15
<PAGE>

Conversion  Price of the  Debentures or Exercise Price of the Warrants in effect
from time to time) and as  otherwise  required  by the  Debentures.  The Company
shall not reduce the number of shares of Common Stock reserved for issuance upon
conversion  of  Debentures  and exercise of the Warrants  without the consent of
each Buyer.  The  Company  shall at all times  maintain  the number of shares of
Common Stock so reserved for issuance at an amount ("Reserved  Amount") equal to
no less than two (2) times the number that is then  actually  issuable upon full
conversion of the Debentures and Additional  Debentures and upon exercise of the
Warrants  and the  Additional  Warrants  (based on the  Conversion  Price of the
Debentures  or the Exercise  Price of the Warrants in effect from time to time).
If at any time the number of shares of Common Stock  authorized and reserved for
issuance  ("Authorized and Reserved  Shares") is below the Reserved Amount,  the
Company will  promptly  take all  corporate  action  necessary to authorize  and
reserve a sufficient number of shares, including, without limitation,  calling a
special  meeting of  stockholders  to  authorize  additional  shares to meet the
Company's  obligations  under this Section 4(h), in the case of an  insufficient
number of authorized shares,  obtain stockholder approval of an increase in such
authorized number of shares,  and voting the management shares of the Company in
favor of an increase in the authorized  shares of the Company to ensure that the
number of authorized  shares is sufficient to meet the Reserved  Amount.  If the
Company  fails to obtain  such  stockholder  approval  within  thirty  (30) days
following the date on which the number of Authorized and Reserved Shares exceeds
the  Reserved  Amount,  the  Company  shall  pay to the  Borrower  the  Standard
Liquidated Damages Amount, in cash or in shares of Common Stock at the option of
the Buyer. If the Buyer elects to be paid the Standard Liquidated Damages Amount
in shares of Common Stock,  such shares shall be issued at the Conversion  Price
at the time of payment.  In order to ensure that the  Company has  authorized  a
sufficient  amount of  shares to meet the  Reserved  Amount  at all  times,  the
Company must deliver to the Buyer at the end of every month a list detailing (1)
the current  amount of shares  authorized  by the Company and  reserved  for the
Buyer;  and (2) amount of shares  issuable upon conversion of the Debentures and
upon  exercise  of the  Warrants  and as  payment  of  interest  accrued  on the
Debentures  for one year.  If the Company fails to provide such list within five
(5) business  days of the end of each month,  the Company shall pay the Standard
Liquidated Damages Amount, in cash or in shares of Common Stock at the option of
the  Buyer,  until the list is  delivered.  If the  Buyer  elects to be paid the
Standard  Liquidated Damages Amount in shares of Common Stock, such shares shall
be issued at the Conversion Price at the time of payment.

              i. Listing. The Company shall promptly secure any required listing
of the  Conversion  Shares and  Warrant  Shares  upon each  national  securities
exchange or  automated  quotation  system,  if any,  upon which shares of Common
Stock are then listed  (subject to official  notice of issuance) and, so long as
any  Buyer  owns any of the  Securities,  shall  maintain,  so long as any other
shares of Common Stock shall be so listed, such listing of all Conversion Shares
and Warrant Shares from time to time issuable upon  conversion of the Debentures
or exercise of the  Warrants.  The Company will obtain and, so long as any Buyer
owns any of the Securities, maintain the listing and trading of its Common Stock
on the OTCBB, the Nasdaq National Market ("Nasdaq"),  the Nasdaq SmallCap Market
("Nasdaq SmallCap"), the New York Stock Exchange ("NYSE"), or the American Stock
Exchange ("AMEX") and will comply in all respects with the Company's  reporting,
filing  and  other  obligations  under  the  bylaws  or  rules  of the  National
Association of Securities  Dealers  ("NASD") and such exchanges,  as applicable.
The  Company  shall  promptly  provide  to each Buyer  copies of any  notices it
receives  from the OTCBB and any other  exchanges or quotation  systems on which
the Common  Stock is then listed  regarding  the  continued  eligibility  of the
Common Stock for listing on such exchanges and quotation systems.



                                       16
<PAGE>

              j. Corporate  Existence.  So long as a Buyer beneficially owns any
Debentures or Warrants,  the Company shall maintain its corporate  existence and
shall not sell all or substantially all of the Company's  assets,  except in the
event of a merger or consolidation  or sale of all or  substantially  all of the
Company's  assets,  where the surviving or successor  entity in such transaction
(i) assumes the Company's  obligations  hereunder and under the  agreements  and
instruments  entered into in connection  herewith and (ii) is a publicly  traded
corporation  whose  Common  Stock is listed for  trading  on the OTCBB,  Nasdaq,
Nasdaq SmallCap, NYSE or AMEX.

              k. No Integration.  The Company shall not make any offers or sales
of any  security  (other than the  Securities)  under  circumstances  that would
require registration of the Securities being offered or sold hereunder under the
1933 Act or cause the offering of the Securities to be integrated with any other
offering  of  securities  by the  Company  for the  purpose  of any  stockholder
approval provision applicable to the Company or its securities.

              l.  Stockholder  Approval.  The Company shall file an  information
statement  with the SEC no later than April 30, 2003 and use its best efforts to
obtain, on or before June 15, 2003, such approvals of the Company's stockholders
as may be  required  to issue all of the shares of Common  Stock  issuable  upon
conversion or exercise of, or otherwise  with respect to, the Debentures and the
Warrants in accordance with Delaware law and any applicable rules or regulations
of the OTCBB and  Nasdaq,  either  through a reverse  stock  split of the Common
Stock or an increase in authorized  capital (the  "Stockholder  Approval").  The
Company shall  furnish to each Buyer and its legal  counsel  promptly (but in no
event less than two (2)  business  days)  before the same is filed with the SEC,
one copy of the  information  statement  and any  amendment  thereto,  and shall
deliver  to each  Buyer  promptly  each  letter  written  by or on behalf of the
Company to the SEC or the staff of the SEC, and each item of correspondence from
the SEC or the  staff of the SEC,  in each  case  relating  to such  information
statement  (other than any portion thereof which contains  information for which
the Company has sought confidential  treatment).  The Company will promptly (but
in no event more than three (3) business  days)  respond to any and all comments
received from the SEC (which  comments  shall promptly be made available to each
Buyer). The Company shall comply with the filing and disclosure  requirements of
Section 14 under the 1934 Act in connection with the Stockholder  Approval.  The
Company  represents  and warrants  that its Board of Directors  has approved the
proposal  contemplated  by this Section 4(l) and shall indicate such approval in
the information statement used in connection with the Stockholder Approval.

              m.  Breach  of  Covenants.  If  the  Company  breaches  any of the
covenants  set forth in this  Section 4, and in addition  to any other  remedies
available to the Buyers pursuant to this Agreement, the Company shall pay to the
Buyers the Standard  Liquidated  Damages Amount,  in cash or in shares of Common
Stock at the option of the  Buyer,  until  such  breach is cured.  If the Buyers
elect to be paid the Standard  Liquidated Damages Amount in shares,  such shares
shall be issued at the Conversion Price at the time of payment.



                                       17
<PAGE>

         5. TRANSFER  AGENT  INSTRUCTIONS.  The Company shall issue  irrevocable
instructions to its transfer agent to issue certificates, registered in the name
of each Buyer or its nominee,  for the  Conversion  Shares and Warrant Shares in
such  amounts as  specified  from time to time by each Buyer to the Company upon
conversion of the Debentures or exercise of the Warrants in accordance  with the
terms  thereof  (the  "Irrevocable  Transfer  Agent  Instructions").   Prior  to
registration  of the Conversion  Shares and Warrant Shares under the 1933 Act or
the date on which the Conversion  Shares and Warrant Shares may be sold pursuant
to Rule 144  without  any  restriction  as to the number of  Securities  as of a
particular date that can then be immediately sold, all such  certificates  shall
bear the restrictive  legend  specified in Section 2(g) of this  Agreement.  The
Company warrants that no instruction  other than the Irrevocable  Transfer Agent
Instructions  referred to in this Section 5, and stop transfer  instructions  to
give  effect to Section  2(f) hereof (in the case of the  Conversion  Shares and
Warrant  Shares,  prior to  registration  of the  Conversion  Shares and Warrant
Shares under the 1933 Act or the date on which the Conversion Shares and Warrant
Shares may be sold pursuant to Rule 144 without any restriction as to the number
of Securities as of a particular date that can then be immediately  sold),  will
be given by the  Company to its  transfer  agent and that the  Securities  shall
otherwise be freely  transferable on the books and records of the Company as and
to the extent provided in this Agreement and the Registration  Rights Agreement.
Nothing in this  Section  shall  affect in any way the Buyer's  obligations  and
agreement  set  forth in  Section  2(g)  hereof to  comply  with all  applicable
prospectus delivery requirements,  if any, upon re-sale of the Securities.  If a
Buyer provides the Company with (i) an opinion of counsel in form, substance and
scope  customary for opinions in comparable  transactions,  to the effect that a
public sale or  transfer of such  Securities  may be made  without  registration
under  the 1933 Act and such  sale or  transfer  is  effected  or (ii) the Buyer
provides reasonable  assurances that the Securities can be sold pursuant to Rule
144, the Company shall permit the transfer,  and, in the case of the  Conversion
Shares and Warrant Shares,  promptly instruct its transfer agent to issue one or
more  certificates,  free  from  restrictive  legend,  in such  name and in such
denominations as specified by such Buyer. The Company acknowledges that a breach
by it of its obligations hereunder will cause irreparable harm to the Buyers, by
vitiating  the  intent  and  purpose of the  transactions  contemplated  hereby.
Accordingly, the Company acknowledges that the remedy at law for a breach of its
obligations under this Section 5 may be inadequate and agrees, in the event of a
breach or  threatened  breach by the Company of the  provisions of this Section,
that the Buyers shall be entitled,  in addition to all other available remedies,
to an  injunction  restraining  any breach  and  requiring  immediate  transfer,
without the  necessity  of showing  economic  loss and without any bond or other
security being required.

         6.  CONDITIONS TO THE COMPANY'S  OBLIGATION TO SELL.  The obligation of
the Company  hereunder to issue and sell the  Debentures and Warrants to a Buyer
at the Closing is subject to the satisfaction,  at or before the Closing Date of
each of the following conditions thereto, provided that these conditions are for
the  Company's  sole benefit and may be waived by the Company at any time in its
sole discretion:

              a. The applicable Buyer shall have executed this Agreement and the
Registration Rights Agreement, and delivered the same to the Company.

              b. The applicable Buyer shall have delivered the Purchase Price in
accordance with Section 1(b) above.

              c. The  representations  and  warranties of the  applicable  Buyer
shall be true and correct in all material  respects as of the date when made and
as of the Closing Date as


                                       18
<PAGE>

though made at that time (except for  representations  and warranties that speak
as of a specific date), and the applicable Buyer shall have performed, satisfied
and  complied  in all  material  respects  with the  covenants,  agreements  and
conditions  required by this  Agreement to be  performed,  satisfied or complied
with by the applicable Buyer at or prior to the Closing Date.

              d. No litigation,  statute,  rule,  regulation,  executive  order,
decree,  ruling or injunction shall have been enacted,  entered,  promulgated or
endorsed by or in any court or governmental  authority of competent jurisdiction
or  any   self-regulatory   organization   having  authority  over  the  matters
contemplated  hereby which prohibits the consummation of any of the transactions
contemplated by this Agreement.

         7. CONDITIONS TO EACH BUYER'S OBLIGATION TO PURCHASE. The obligation of
each Buyer  hereunder to purchase the  Debentures and Warrants at the Closing is
subject  to the  satisfaction,  at or  before  the  Closing  Date of each of the
following  conditions,  provided that these conditions are for such Buyer's sole
benefit and may be waived by such Buyer at any time in its sole discretion:

              a.  The  Company  shall  have  executed  this  Agreement  and  the
Registration Rights Agreement, and delivered the same to the Buyer.

              b. The Company  shall have  delivered to such Buyer duly  executed
Debentures  (in such  denominations  as the Buyer shall request) and Warrants in
accordance with Section 1(b) above.

              c. The  Irrevocable  Transfer Agent  Instructions  shall have been
delivered to and acknowledged in writing by the Company's Transfer Agent.

              d. 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 such  time  (except  for  representations  and
warranties  that  speak  as of a  specific  date)  and the  Company  shall  have
performed,  satisfied and complied in all material  respects with the covenants,
agreements and conditions required by this Agreement to be performed,  satisfied
or complied with by the Company at or prior to the Closing Date. The Buyer shall
have received a certificate  or  certificates,  executed by the chief  executive
officer of the Company,  dated as of the Closing Date,  to the foregoing  effect
and as to such  other  matters  as may be  reasonably  requested  by such  Buyer
including,  but not  limited  to  certificates  with  respect  to the  Company's
Certificate  of  Incorporation,  By-laws  and  Board of  Directors'  resolutions
relating to the transactions contemplated hereby.

              e. No litigation,  statute,  rule,  regulation,  executive  order,
decree,  ruling or injunction shall have been enacted,  entered,  promulgated or
endorsed by or in any court or governmental  authority of competent jurisdiction
or  any   self-regulatory   organization   having  authority  over  the  matters
contemplated  hereby which prohibits the consummation of any of the transactions
contemplated by this Agreement.

              f. No event shall have occurred which could reasonably be expected
to have a Material Adverse Effect on the Company.



                                       19
<PAGE>

              g. The Buyer  shall have  received  an  opinion  of the  Company's
counsel,  dated as of the Closing Date, in form, scope and substance  reasonably
satisfactory  to the Buyer and in  substantially  the same form as  Exhibit  "D"
attached hereto.

              h.  The  Buyer  shall  have  received  an  officer's   certificate
described in Section 3(c) above, dated as of the Closing Date.

         8. GOVERNING LAW; MISCELLANEOUS.

              a. Governing Law. THIS  AGREEMENT  SHALL BE ENFORCED,  GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED  ENTIRELY WITHIN SUCH STATE,  WITHOUT REGARD
TO THE  PRINCIPLES OF CONFLICT OF LAWS.  THE PARTIES HERETO HEREBY SUBMIT TO THE
EXCLUSIVE  JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK,
NEW  YORK  WITH  RESPECT  TO ANY  DISPUTE  ARISING  UNDER  THIS  AGREEMENT,  THE
AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS  CONTEMPLATED
HEREBY OR THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF SUCH SUIT OR PROCEEDING.  BOTH PARTIES FURTHER AGREE
THAT  SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED
IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS IN
ANY  OTHER  MANNER   PERMITTED  BY  LAW.   BOTH  PARTIES   AGREE  THAT  A  FINAL
NON-APPEALABLE  JUDGMENT IN ANY SUCH SUIT OR PROCEEDING  SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER  JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
LAWFUL  MANNER.  THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE  ARISING  UNDER
THIS  AGREEMENT  SHALL  BE  RESPONSIBLE  FOR ALL FEES  AND  EXPENSES,  INCLUDING
ATTORNEYS'  FEES,  INCURRED  BY THE  PREVAILING  PARTY IN  CONNECTION  WITH SUCH
DISPUTE.

              b.  Counterparts;  Signatures by Facsimile.  This Agreement may be
executed in one or more counterparts,  each of which shall be deemed an original
but all of which shall  constitute  one and the same  agreement and shall become
effective when  counterparts have been signed by each party and delivered to the
other party.  This Agreement,  once executed by a party, may be delivered to the
other party hereto by facsimile transmission of a copy of this Agreement bearing
the signature of the party so delivering this Agreement.

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

              d. Severability. In the event that any provision of this Agreement
is invalid or  unenforceable  under any applicable  statute or rule of law, then
such  provision  shall be deemed  inoperative to the extent that it may conflict
therewith  and shall be deemed  modified to conform with such statute or rule of
law. Any provision hereof which may prove invalid or unenforceable under any law
shall not affect the validity or enforceability of any other provision hereof.



                                       20
<PAGE>

              e.  Entire   Agreement;   Amendments.   This   Agreement  and  the
instruments  referenced  herein contain the entire  understanding of the parties
with  respect  to  the  matters  covered  herein  and  therein  and,  except  as
specifically  set forth  herein or  therein,  neither  the Company nor the Buyer
makes any representation, warranty, covenant or undertaking with respect to such
matters.  No provision of this  Agreement may be waived or amended other than by
an instrument in writing signed by the party to be charged with enforcement.

              f.  Notices.  Any notices  required or permitted to be given under
the  terms of this  Agreement  shall be sent by  certified  or  registered  mail
(return receipt  requested) or delivered  personally or by courier  (including a
recognized  overnight  delivery  service) or by facsimile and shall be effective
five days after being  placed in the mail,  if mailed by regular  United  States
mail,  or upon  receipt,  if  delivered  personally  or by courier  (including a
recognized  overnight delivery service) or by facsimile,  in each case addressed
to a party. The addresses for such communications shall be:

                           If to the Company:

                                    Torbay Holdings, Inc.
                                    4 Mulford Place, Suite 2G
                                    Hempstead, New York  11550
                                    Attention:  William Thomas Large
                                    Facsimile:  509-472-4654


                           With copies to:

                                    Seth A. Farbman, PC
                                    301 Eastwood Road
                                    Woodmere, New York 11598
                                    Attention:  Seth A. Farbman, Esq.
                                    Facsimile:  516-569-6084

If to a Buyer: To the address set forth  immediately  below such Buyer's name on
the signature pages hereto.

                                       21
<PAGE>

                                With copy to:

                                    Ballard Spahr Andrews & Ingersoll, LLP
                                    1735 Market Street
                                    51st Floor
                                    Philadelphia, Pennsylvania  19103
                                    Attention:  Gerald J. Guarcini, Esq.
                                    Telephone:  215-864-8625
                                    Facsimile:  215-864-8999
                                    Email:  guarcini@ballardspahr.com

Each party shall provide notice to the other party of any change in address.

              g.  Successors and Assigns.  This Agreement  shall be binding upon
and inure to the  benefit  of the  parties  and their  successors  and  assigns.
Neither the Company nor any Buyer shall  assign this  Agreement or any rights or
obligations   hereunder   without  the  prior  written  consent  of  the  other.
Notwithstanding the foregoing, subject to Section 2(f), any Buyer may assign its
rights  hereunder  to  any  person  that  purchases   Securities  in  a  private
transaction from a Buyer or to any of its  "affiliates," as that term is defined
under the 1934 Act, without the consent of the Company.

              h. Third Party  Beneficiaries.  This Agreement is intended for the
benefit of the parties  hereto and their  respective  permitted  successors  and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.

              i. Survival. The representations and warranties of the Company and
the  agreements  and covenants set forth in Sections 3, 4, 5 and 8 shall survive
the closing hereunder  notwithstanding any due diligence investigation conducted
by or on behalf of the Buyers.  Each party hereto  agrees to indemnify  and hold
harmless each of the other  parties  hereto and all their  officers,  directors,
employees and agents for loss or damage arising as a result of or related to any
breach or alleged breach by such party of any of its representations, warranties
and  covenants  set forth in Sections 2, 3 and 4 hereof or any of its  covenants
and  obligations  under this  Agreement or the  Registration  Rights  Agreement,
including advancement of expenses as they are incurred.

              j.  Publicity.  The Company and each of the Buyers  shall have the
right to  review a  reasonable  period  of time  before  issuance  of any  press
releases,  SEC,  OTCBB or NASD  filings,  or any other  public  statements  with
respect to the transactions  contemplated hereby;  provided,  however,  that the
Company shall be entitled,  without the prior approval of each of the Buyers, to
make any press release or SEC,  OTCBB (or other  applicable  trading  market) or
NASD filings with respect to such  transactions as is required by applicable law
and  regulations  (although each of the Buyers shall be consulted by the Company
in  connection  with any such press  release  prior to its  release and shall be
provided with a copy thereof and be given an opportunity to comment thereon).

              k. Further  Assurances.  Each party shall do and perform, or cause
to be done and  performed,  all such further acts and things,  and shall execute
and deliver all such other agreements, certificates,  instruments and documents,
as the other party may  reasonably



                                       22
<PAGE>

request in order to carry out the intent and  accomplish  the  purposes  of this
Agreement and the consummation of the transactions contemplated hereby.

              l. No Strict  Construction.  The language  used in this  Agreement
will be deemed to be the language  chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party.

              m. Remedies.  The Company  acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the Buyers 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 Agreement will be inadequate and agrees,  in the event of a breach or
threatened  breach by the Company of the provisions of this Agreement,  that the
Buyers shall be entitled,  in addition to all other available remedies at law or
in equity, and in addition to the penalties  assessable herein, to an injunction
or  injunctions  restraining,  preventing or curing any breach of this Agreement
and to  enforce  specifically  the  terms and  provisions  hereof,  without  the
necessity of showing  economic loss and without any bond or other security being
required.



                                       23
<PAGE>




         IN WITNESS WHEREOF,  the undersigned Buyers and the Company have caused
this Agreement to be duly executed as of the date first above written.



TORBAY HOLDINGS, INC.



---------------------------------------
William Thomas Large
President and Chief Executive Officer


AJW PARTNERS, LLC
By: SMS Group, LLC


--------------------------------------
Corey S. Ribotsky
Manager


RESIDENCE:  Delaware

ADDRESS:    1044 Northern Boulevard
            Suite 302
            Roslyn, New York  11576
            Facsimile: (516) 739-7115
            Telephone: (516) 739-7110

AGGREGATE SUBSCRIPTION AMOUNT:

         Aggregate Principal Amount of Debentures:            $16,668
         Number of Warrants:                                   33,336
         Aggregate Purchase Price:                            $16,668



                                       24
<PAGE>





NEW MILLENNIUM CAPITAL PARTNERS II, LLC
By:  First Street Manager II, LLC


------------------------------------
Corey S. Ribotsky
Manager



RESIDENCE:      New York

ADDRESS:        1044 Northern Boulevard
                Suite 302
                Roslyn, New York  11576
                Facsimile: (516) 739-7115
                Telephone: (516) 739-7110


AGGREGATE SUBSCRIPTION AMOUNT:

         Aggregate Principal Amount of Debentures:              $0
         Number of Warrants:                                     0
         Aggregate Purchase Price:                              $0





                                       25
<PAGE>

AJW OFFSHORE, LTD.
By:  First Street Manager II, LLC


--------------------------------------
Corey S. Ribotsky
Manager


RESIDENCE:        New York

ADDRESS:          1044 Northern Boulevard
                  Suite 302
                  Roslyn, New York  11576
                  Facsimile: (516) 739-7115
                  Telephone: (516) 739-7110

AGGREGATE SUBSCRIPTION AMOUNT:

         Aggregate Principal Amount of Debentures:              $16,666
         Number of Warrants:                                     33,332
         Aggregate Purchase Price:                              $16,666


                                       26
<PAGE>


AJW QUALIFIED PARTNERS, LLC
By:  AJW Manager, LLC



------------------------------------
Corey S. Ribotsky
Manager


RESIDENCE:       New York

ADDRESS:         1044 Northern Boulevard
Suite 302
Roslyn, New York 11576
Facsimile:       (516) 739-7115
Telephone:       (516) 739-7110


                         AGGREGATE SUBSCRIPTION AMOUNT:

         Aggregate Principal Amount of Debentures:                       $16,666
         Number of Warrants:                                              33,332
         Aggregate Purchase Price:                                       $16,666



                                       27