Exhibit 10.72







                          SECURITIES PURCHASE AGREEMENT



                                     between



                            PATIENT INFOSYSTEMS, INC.



                                       and



                                   [INVESTOR]









                          Dated as of February 24, 2004










<PAGE>


                          SECURITIES PURCHASE AGREEMENT


         THIS SECURITIES PURCHASE AGREEMENT (this "Agreement") is dated as of
February 24, 2004, between PATIENT INFOSYSTEMS, INC., a Delaware corporation
(the "Company"), and the PURCHASER named on the signature page hereto
("Purchaser").

Recitals:

1.   The Company is offering to Purchaser up to _________  shares (the "Shares")
     of common  stock of the  Company,  $0.01 par value per share  (the  "Common
     Stock").

2.   The Company and  Purchaser  agree that  Purchaser  will  purchase  from the
     Company and the Company will issue and sell to Purchaser  ________  Shares,
     for a purchase price of $2.00 per share, or an aggregate  purchase price of
     $_________, (the "Purchase Price") pursuant to the terms of this Securities
     Purchase Agreement.

3.   The Company intends to offer and sell to other parties additional shares of
     Common  Stock  in  amounts  not to  exceed  $5,000,000  in  the  aggregate,
     inclusive of the Shares to be offered and sold to Purchaser.

Agreement:

     The Company and Purchaser hereby agree as follows:

Section 1. Purchase of Company  Securities.  Subject to the terms and conditions
of this  Agreement,  the Company will issue and sell to Purchaser  and Purchaser
will  purchase  from the Company the number of Shares set forth on the signature
page for  Purchaser at the purchase  price set forth on the  signature  page for
Purchaser.

Section 2. Closing.  The closing (the "Closing") of the purchase and sale of the
Shares (the "Offering") will take place at the offices of the Company,  at 10:00
A.M.,  local time,  on February 24, 2004.  The Closing may take place at another
time,  place or earlier  date as is  mutually  agreed  upon by the  Company  and
Purchaser.  The date of the Closing is referred to as the "Closing  Date." Prior
to the  Closing,  the  Company  will  cause its  transfer  agent to issue and to
deliver to counsel to the Purchaser stock  certificates  representing the Shares
purchased by Purchaser,  such stock certificates to be held in escrow by counsel
to the Purchaser until payment of Purchaser's Purchase Price by wire transfer of
immediately  available  United  States  funds is  deposited  into the  Company's
account  pursuant to the wire transfer  instructions set forth on Exhibit A. The
Shares  will be  registered  in  Purchaser's  name or the name of the nominee of
Purchaser  pursuant to  instructions  delivered to the Company not less than two
business days prior to the Closing Date, and certificates that are not delivered
prior to Closing will be delivered to Purchaser within 3 business days after the
Closing Date.

Section 3. Conditions to the Obligations of Purchaser at Closing. The obligation
of  Purchaser  to  purchase  and pay for the Shares at Closing is subject to the
satisfaction on or prior to the Closing Date of the following  conditions,  each
of which may be waived by Purchaser:

3.1  Opinion  of Counsel  to the  Company.  Purchaser  will have  received  from
     McCarter & English,  LLP,  securities counsel for the Company,  its opinion
     dated the Closing Date in all material respects in the form of Exhibit B.

3.2  Representations  and Warranties.  The representations and warranties of the
     Company  contained  in Section 6 must be true and  correct in all  material
     respects  on and as of the  Closing  Date  except  to the  extent  that the
     representations  and warranties relate to an earlier date in which case the
     representations  and  warranties  must be true and correct in all  material
     respects on and as of such earlier date.

3.3  Performance  of Covenants.  The Company will have  performed or complied in
     all material  respects  with all covenants  and  agreements  required to be
     performed by it on or prior to the Closing pursuant to this Agreement.

3.4  No Injunctions;  etc. No court or governmental injunction,  order or decree
     prohibiting  the purchase  and sale of the Shares will be in effect.  There
     will  not  be  in  effect  any  law,  rule  or  regulation  prohibiting  or
     restricting  the sale or  requiring  any  consent or approval of any person
     that has not been obtained or otherwise  complied with which  prohibits the
     consummation of any of the transactions contemplated by this Agreement.

3.5  Closing  Documents.  The  Company  will have  delivered  to  Purchaser  the
     following:

     (a)  a certificate of the Secretary of the Company, dated as of the Closing
          Date,  certifying (i) the attached are true and complete copies of the
          Certificate of Incorporation  and Bylaws of the Company,  as in effect
          on the  date of such  certification;  (ii) the  attached  are true and
          complete  copies of the  resolutions  of the Board of Directors of the
          Company  authorizing  the execution,  delivery and performance of this
          Agreement as in effect on the date of such certification; and (iii) as
          to the  incumbency  and  specimen  signature  of each  officer  of the
          Company  executing this Agreement and any other document  delivered by
          it in connection herewith (such certificate to contain a certification
          by another  officer of the Company as to the  incumbency and signature
          of the officer signing the certificate referred to herein).

     (b)  certificate of the Secretary of State of the State of Delaware,  dated
          a recent date,  to the effect that the Company is in good  standing in
          the State of Delaware.

3.6  Waivers and  Consents.  The Company will have obtained any and all consents
     and  waivers  known to the  Company to be  necessary  for it to execute and
     deliver this  Agreement  and all related  documents and  agreements  and to
     issue and deliver the Shares,  and all such consents and waivers will be in
     full force and effect.

3.7  Satisfaction of Purchaser.  All proceedings to occur in connection with the
     Offering are to be consummated at or prior to the Closing (other than those
     contemplated  herein  to  occur  after  the  Closing),  and  all  documents
     incidental  thereto shall be reasonably  satisfactory in form and substance
     to Purchaser  and its counsel,  and  Purchaser  and its counsel  shall have
     received  copies  of all  documents  and  information  which  it  may  have
     reasonably  requested  in  connection  with  the  transaction  and  of  all
     corporate  proceedings  in  connection  therewith,  in form  and  substance
     reasonably satisfactory to Purchaser and its counsel.

Section  4.  Conditions  to the  Obligations  of the  Company  at  Closing.  The
obligation  of the Company to issue and sell the Shares to  Purchaser at Closing
is subject to the  satisfaction on or prior to the Closing Date of the following
conditions, each of which may be waived by the Company:

4.1  Representations  and  Warranties.  The  representations  and  warranties of
     Purchaser  contained  in this  Agreement  must be true and  correct  in all
     material respects as of the Closing Date.

4.2  No  Injunctions.  No  court or  governmental  injunction,  order or  decree
     prohibiting the purchase or sale of the Shares will be in effect.

4.3  Performance of Covenants.  Purchaser will have performed or complied in all
     material  respects  with  all  covenants  and  agreements  required  to  be
     performed by it on or prior to the Closing pursuant to this Agreement.

Section 5.  Representations,  Warranties  and Covenants of Purchaser.  Purchaser
represents and warrants to the Company that:

5.1  Accredited Investor;  Investment Representations;  State of Sale. Purchaser
     is an investment  company  registered  under the Investment  Company Act of
     1940 and as such qualifies as an  "accredited  investor" as defined in Rule
     501(a) of  Regulation D under the  Securities  Act of 1933, as amended (the
     "Securities Act"). Purchaser has such knowledge and experience in financial
     and business  matters that it is capable of evaluating the merits and risks
     of an investment in the Shares. Purchaser can bear the financial risk of an
     investment  in the  Shares.  Purchaser  was not formed  for the  purpose of
     making an investment  in the Shares.  Purchaser is acquiring the Shares for
     its own account and not with a present  view to, or for sale in  connection
     with,   any   distribution   thereof  in  violation  of  the   registration
     requirements of the Securities Act.  Purchaser  understands that the Shares
     have not been  registered  under the Act and,  therefore,  cannot be resold
     unless  they are  registered  under  the Act or unless  an  exemption  from
     registration  is  available.  Purchaser  understands  that a legend will be
     placed on the certificates evidencing the Shares that they have not been so
     registered  and  setting  forth  or  referring  to  the   restrictions   on
     transferability and sale of the Shares. Purchaser agrees that the offer and
     sale of the Shares to  Purchaser  occurred  in the state of New York and/or
     the state of Purchaser's address as set forth in the signature page hereof.

5.2  Authority,  etc.  Purchaser  has the power and  authority  to  execute  and
     deliver  this  Agreement  and to perform  its  obligations  hereunder.  The
     execution and delivery by Purchaser of this Agreement and the  consummation
     of the  transactions  contemplated  hereby have been duly authorized by all
     necessary  corporate  or  other  action  on the  part  of  Purchaser.  This
     Agreement  constitutes a legal,  valid and binding obligation of Purchaser,
     enforceable against Purchaser in accordance with its terms, subject to laws
     of general application relating to bankruptcy, insolvency and the relief of
     debtors and rules of law governing specific performance,  injunctive relief
     or other equitable remedies, and to limitations of public policy.

5.3  Access to Information. Purchaser acknowledges that it has been afforded (i)
     the opportunity to ask the questions it deemed necessary of, and to receive
     answers from, representatives of the Company concerning the Company and the
     terms and conditions of the Offering;  and (ii) the  opportunity to request
     such additional information concerning the Company as the Company possesses
     or can acquire without unreasonable effort or expense.

5.4  No General Solicitation. Purchaser is not purchasing the Shares as a result
     of any advertisement, article, notice or other communication published in a
     newspaper or magazine or similar  media or  broadcast  over  television  or
     radio,  whether closed  circuit,  or generally  available,  or any seminar,
     meeting or other  conference  whose  attendees  were invited by any general
     solicitation or general advertising.

5.5  Additional  Information.  From time to time, as reasonably requested by the
     Company,  Purchaser will promptly provide the Company with such information
     as  necessary  for the Company to comply with its  obligations  pursuant to
     applicable  law in respect of the source of the funds used for the purchase
     of the Shares,  and the  ownership of the Shares,  as required  pursuant to
     applicable law.

5.6  Underwritten  Public Offering.  In the event the company undertakes to sell
     its securities in an  underwritten  public  offering,  the Purchaser  shall
     enter into and perform its obligations under an underwriting  agreement, in
     usual and customary form,  with the managing  underwriter of such offering,
     including in connection  therewith,  agreeing to be bound by any lock-up or
     similar agreement requested by the underwriter involved therewith.

Section 6. Representations and Warranties of the Company. The Company represents
and warrants to Purchaser that as of the date hereof and the Closing Date:

6.1  Organization, Good Standing and Qualification; Subsidiaries. The Company is
     a corporation  organized,  existing and in good standing  under the laws of
     the State of Delaware.  The Company has full corporate  power and authority
     to own and hold its properties and to conduct its business.  The Company is
     licensed  or  qualified  to do  business,  and in  good  standing,  in each
     jurisdiction  in which  the  nature  of its  business  requires  licensing,
     qualification or good standing, except for any failure to be so licensed or
     qualified or in good standing that would not have a material adverse effect
     on the Company or its business,  properties, results of operations, assets,
     condition  (financial  or  otherwise),  or on its  ability to  perform  its
     obligations  under  this  Agreement  (a  "Material  Adverse  Effect").  The
     Company's subsidiaries are listed on Schedule 6.1 hereto.

6.2  Capitalization.  As of the date hereof, the authorized capital stock of the
     Company consists of 80,000,000 shares of Common Stock,  $0.01 par value per
     share and 20,000,000 shares of Preferred Stock,  $0.01 par value per share.
     As of January 31, 2004,  (i)  4,960,354  shares of Common Stock were issued
     and  outstanding,  (ii) 940,118  shares of  Preferred  Stock were issued or
     outstanding,  and (iii) 3,500,000  shares of Common Stock were reserved for
     issuance upon exercise of outstanding options issued or options that may be
     issued  under the  Company's  Amended and  Restated  Stock Option Plan (the
     "Plan").  As of January 31, 2004, there were outstanding  options under the
     Plan to purchase  1,527,160  shares of Common  Stock.  All the  outstanding
     shares of Common Stock have been duly authorized and validly issued and are
     fully  paid and  nonassessable  and were not  issued  in  violation  of, or
     subject to any  preemptive,  subscription  or other  similar  rights of any
     shareholder  of  the  Company  that  are  provided  for  in  the  Company's
     Certificate of Incorporation,  its By-laws or in any agreement to which the
     Company is a party.  Except as set forth in this Section 6.2 or in Schedule
     6.2  hereto,  there  are  no  other  options,  warrants  or  other  rights,
     convertible debt, agreements,  arrangements or commitments of any character
     obligating  the Company to issue or sell any shares of capital  stock of or
     other  equity  interests in the  Company.  The Company is not  obligated to
     retire, redeem,  repurchase or otherwise reacquire any of its capital stock
     or other securities.

6.3  Corporate  Power,  Authorization;  Enforceability.  The  Company  has  full
     corporate  power and  authority  to  execute,  deliver  and enter into this
     Agreement and to  consummate  the  transactions  contemplated  hereby.  All
     corporate action on the part of the Company,  its directors or shareholders
     necessary for the  authorization,  execution,  delivery and  performance of
     this  Agreement  by the  Company,  the  authorization,  sale,  issuance and
     delivery  of the  Shares  contemplated  hereby and the  performance  of the
     Company's  obligations hereunder has been taken. The Shares to be purchased
     on the  Closing  Date  have  been  duly  authorized  and,  when  issued  in
     accordance  with this  Agreement,  will be validly  issued,  fully paid and
     nonassessable  and will be free and clear of all liens,  adverse  claims or
     encumbrances  imposed by or through the Company  (other than those  imposed
     pursuant to this Agreement) (collectively, "Liens") and will not be subject
     to any  preemptive  rights or other similar rights of  shareholders  of the
     Company, and Purchaser will acquire good and marketable title to the Shares
     that are provided for in the Company's  Certificate of  Incorporation,  its
     By-laws or in any agreement to which the Company is a party. This Agreement
     has been duly  executed  and  delivered  by the Company and  constitutes  a
     legal, valid and binding obligation of the Company, enforceable against the
     Company  in  accordance  with  its  terms,   subject  to  laws  of  general
     application  relating to  bankruptcy,  insolvency and the relief of debtors
     and rules of law governing specific performance, injunctive relief or other
     equitable  remedies,  to limitations of  indemnification  and  contribution
     obligations  pursuant to applicable  securities laws, and to limitations of
     public  policy.  No corporate  action is required by the Company  under the
     rules of the Nasdaq Over-the-Counter  Bulletin Board system with respect to
     the  transactions   contemplated  by  this  Agreement,   including  without
     limitation,  the  issuance  of the Shares  and the  inclusion  thereof  for
     trading on the Nasdaq Over-the-Counter Bulletin Board system.

6.4  Financial Statements and SEC Documents.

     (a)  Included in the  Company's  Form 10-K for the year ended  December 31,
          2002 are true and complete  copies of the audited  balance  sheet (the
          "Balance  Sheet") of the Company as of December 31, 2001 and 2002, and
          the related audited statements of operations, shareholders' equity and
          cash  flows  for the  years  ended  December  31,  2001 and 2002  (the
          "Audited Financial Statements"), accompanied by the report of Deloitte
          & Touche.  The  Company's  Quarterly  Reports  on Form  10-QSB for the
          quarters  ended  September 30, 2003,  June 30, 2003 and March 31, 2003
          are available to Purchaser on the Securities and Exchange Commission's
          (the "SEC") EDGAR System.  Included in the  Quarterly  Reports are the
          requisite  unaudited  balance  sheets of the  Company  and the related
          unaudited  statements  of income  and  statements  of cash  flows (the
          "Unaudited  Financial  Statements,"  and  together  with the  "Audited
          Financial  Statements,"  the  "Financial  Statements").  The Financial
          Statements  have been prepared in accordance  with generally  accepted
          accounting  principles (except with respect to the Unaudited Financial
          Statements,  to the  extent set forth in the notes  thereto),  applied
          consistently  with the past practices of the Company (except as may be
          indicated  in the notes  thereto)  and as of their  respective  dates,
          fairly present,  in all material  respects,  the financial position of
          the Company and the results of its  operations  as of the time and for
          the periods indicated therein.

     (b)  A copy of each report, schedule,  effective registration statement and
          definitive proxy statement,  as supplemented and amended, filed by the
          Company  with the SEC since April 1, 2001  required to be filed on the
          SEC's Edgar System (as the  documents  may have been amended since the
          time of  their  filing,  the "SEC  Documents"),  has  also  been  made
          available  to Purchaser  via the access by the  Purchaser to the SEC's
          EDGAR  System.  By way of such  access,  the Company  has  provided to
          Purchaser  a true  and  complete  copy of each SEC  Document  that the
          Company has filed since April 1, 2001. As of their  respective  filing
          dates,  each SEC Document  complied in all material  respects with the
          requirements  of the Securities Act or the Securities  Exchange Act of
          1934, as amended (the "Exchange  Act"),  as applicable,  and the rules
          and regulations of the SEC thereunder  applicable to the SEC Document.
          At the  time of  filing  of each SEC  Document,  the  then  filed  SEC
          Documents, taken as a whole, did not contain any untrue statement of a
          material fact or omit to state any material fact required to be stated
          therein or necessary to make the statements  therein,  in light of the
          circumstances under which they were made, not misleading.  As of their
          respective  filing  dates,  the  financial  statements  of the Company
          included  in the SEC  Documents  complied  as to form in all  material
          respects with then  applicable  accounting  requirements  and with the
          then published rules and regulations of the SEC with respect  thereto,
          were  prepared  in  accordance  with  generally  accepted   accounting
          principles,  applied  consistently  with  the  past  practices  of the
          Company,  and as of their  respective  dates,  fairly presented in all
          material  respects  the  financial  position  of the  Company  and the
          results of its operations as of the time and for the periods indicated
          therein  (except as may be indicated  in the notes  thereto or, in the
          case of the unaudited statements,  as permitted by Form 10-QSB and, to
          the extent applicable, Regulations S-B and S-X of the SEC).

6.5  No Material Adverse Changes. Except as set forth in Schedule 6.5 hereto, or
     elsewhere in this Agreement and the Schedules  hereto,  since September 30,
     2003,  except as disclosed in the SEC  Documents  filed  subsequent to that
     date,  if any,  there  has not  been any  material  adverse  change  in the
     business, properties, assets, condition (financial or otherwise), prospects
     or operating results of the Company.

6.6  Absence of Certain Developments.  Except as described in or contemplated by
     this Agreement including on Schedule 6.6 hereto or the SEC Documents, since
     December 31, 2003, through the Closing Date, the Company has not (a) issued
     any stock, options,  bonds or other corporate  securities,  other than upon
     the  exercise  of options  outstanding  prior to  December  31,  2003;  (b)
     borrowed  any  amount  or  incurred  or  become  subject  to  any  material
     liabilities   (absolute,   accrued  or  contingent),   other  than  current
     liabilities  incurred in the ordinary  course of business  and  liabilities
     under  contracts  entered  into in the  ordinary  course of  business;  (c)
     discharged  or  satisfied  any lien or adverse  claim or paid any  material
     obligation  or  liability  (absolute,  accrued or  contingent),  other than
     current  liabilities  shown on the Balance  Sheet and  current  liabilities
     incurred  in the  ordinary  course of  business;  (d)  declared or made any
     payment or  distribution  of cash or other property to the  shareholders of
     the Company or  purchased or redeemed any  securities  of the Company;  (e)
     mortgaged,  pledged or  subjected  to any lien or adverse  claim any of its
     material  properties or assets,  except for liens for taxes not yet due and
     payable or otherwise in the ordinary course of business; (f) sold, assigned
     or transferred any of its material assets,  tangible or intangible,  except
     in the ordinary course of business;  (g) suffered any damages,  destruction
     or casualty loss, whether or not covered by insurance, affecting any of the
     properties  or assets of the Company or any other  properties  or assets of
     the Company which could,  individually or in the aggregate,  have or result
     in a Material Adverse Effect; (k) made any material change in the nature or
     operations  of  the  business  of the  Company;  or (h)  entered  into  any
     agreement or commitment to do any of the foregoing.

6.7  No Conflict; Governmental Consents.

     (a)  The  execution  and delivery by the Company of this  Agreement and the
          consummation  of the  transactions  contemplated  hereby  will not (i)
          result  in the  violation  of any  provision  of  the  Certificate  of
          Incorporation  or Bylaws of the Company,  (ii) result in any violation
          of any  law,  statute,  rule,  regulation,  order,  writ,  injunction,
          judgment  or decree of any court or  governmental  authority  to or by
          which the Company is bound,  or (iii)  conflict  with,  or result in a
          breach  or  violation  of,  any of the  terms  or  provisions  of,  or
          constitute (with due notice or lapse of time or both) a default under,
          any  lease,  loan  agreement,   mortgage,  security  agreement,  trust
          indenture  or other  agreement  to which the  Company is a party or by
          which it is  bound or to which  any of its  properties  or  assets  is
          subject, nor result in the creation or imposition of any Lien upon any
          of the properties or assets of the Company, in the case of each of the
          above  subsections,  the result of which would have a Material Adverse
          Effect.

     (b)  No consent,  approval,  license, permit, order or authorization of, or
          registration,  declaration or filing with,  any court,  administrative
          agency or commission  or other  governmental  authority  remains to be
          obtained  or is  otherwise  required  to be obtained by the Company in
          connection  with the  authorization,  execution  and  delivery of this
          Agreement or the consummation of the transactions contemplated hereby,
          including, without limitation the issue and sale of the Shares, except
          filings as may be required to be made by the Company after the Closing
          with  (i) the SEC,  (ii)  Nasdaq  and  (iii)  state  blue sky or other
          securities regulatory authorities.

6.8  Material  Misstatements.  Except for the execution and  performance of this
     Agreement and the transactions  contemplated  hereby,  the company has made
     disclosure  through its filings  under the currently  applicable  rules and
     regulations  of the SEC,  all  material  facts  (within  the meaning of the
     federal  securities  laws of the United  States of America) with respect to
     the Company  except to the extent not  required to be  disclosed  as of the
     date hereof pursuant to the applicable rules and regulations of the SEC.

6.9  No  General  Solicitation.  Neither  the  Company  nor,  to  the  Company's
     knowledge,  any person  acting on behalf of the Company has  conducted  any
     "general  solicitation,"  as described  in Rule 502(c)  under  Regulation D
     promulgated  under the Securities Act ("Regulation D"), with respect to any
     of the Shares being offered hereby.

6.10 Registration  Form.  The Company is eligible to register  the resale of the
     Shares by Purchaser in a secondary offering on a registration  statement on
     Form SB-2 under the Securities Act.

6.11 No Integration. Neither the Company, nor any of its affiliates, nor, to the
     Company's  knowledge,  any person acting on their  behalf,  has directly or
     indirectly made any offers or sales of any security or solicited any offers
     to buy any  security  under  circumstances  that would  prevent the parties
     hereto from consummating the transactions  contemplated  hereby pursuant to
     an exemption  from  registration  under the  Securities Act pursuant to the
     provisions of Regulation D. The transactions contemplated hereby are exempt
     from the  registration  requirements  of the Securities  Act,  assuming the
     accuracy  of  the   representations  and  warranties  herein  contained  of
     Purchaser to the extent  relevant for such  determination.  The issuance of
     the Shares to Purchaser  will not be integrated  with any other issuance of
     the  Company's  securities  (past or  current)  that  requires  shareholder
     approval  under the rules of Nasdaq or that would  result in a violation of
     the Securities Act by virtue of the issuance of the Shares. The issuance of
     the Shares to Purchaser does not require  shareholder  approval,  including
     any  approval  pursuant to the rules of Nasdaq that are  applicable  to the
     Company.

6.12 No Brokers. Other than as set forth on Schedule 6.12, the Company has taken
     no action  that would  give rise to any claim by any  person for  brokerage
     commissions,  finder's  fees or similar  payments by Purchaser  relating to
     this Agreement or the transactions contemplated hereby.

6.13 Taxes.  The Company has timely filed all requisite United States of America
     federal,  state and other tax returns or extension  requests for all fiscal
     periods  in which  such  filings  were  required  to be made.  There are no
     examinations  in progress or claims pending  against the Company for United
     States of America federal,  state and other taxes (including  penalties and
     interest) for any period or periods  prior to and  including  September 30,
     2003, and no notice of any claim for taxes,  whether pending or threatened,
     has been  received.  All material taxes due from the Company for any period
     ended before the date hereof,  including interest and penalties (whether or
     not shown on any tax return) have been paid.  The amounts shown as accruals
     for taxes on the Financial  Statements  included in the filed SEC Documents
     are   appropriate   under   generally   accepted   accounting   principles,
     consistently  applied.  The Company is not and has not during the last five
     years been a party to any tax sharing  agreement  or  agreement  of similar
     effect.  The  Company  is not and has not during the last five years been a
     member of any  consolidated  group.  The  Company  has not  received,  been
     denied,  or applied  for any  private  letter  ruling  during the last five
     years.

6.14 Licenses  and  Permits.  The Company  has all  Permits  (as defined  below)
     required by law or  governmental  regulations  from all applicable  courts,
     administrative agencies or commissions or other governmental authorities or
     instrumentalities,  whether in the United States of America (federal, state
     or local) or outside of the United  States of America that are necessary to
     operate such businesses as presently  conducted and all such Permits are in
     full force and effect, except where the failure to have any such Permits in
     full  force  and  effect  could  not,  individually  or in  the  aggregate,
     reasonably be expected to have a Material  Adverse  Effect.  The Company is
     not in default under, or in violation of or noncompliance with, any of such
     Permits,  except for any such default,  violation of or noncompliance which
     could not, individually or in the aggregate, reasonably be expected to have
     a  Material   Adverse  Effect.   Upon   consummation  of  the  transactions
     contemplated by this Agreement,  each such Permit will remain in full force
     and effect and will not create a right of any other  person to terminate or
     revoke,  modify  or  condition  such  Permit  based  on such  consummation.
     "Permit" means any permit, certificate,  consent, approval,  authorization,
     order, license,  variance,  franchise or other similar indicia of authority
     issued or granted  by any court,  administrative  agency or  commission  or
     other  governmental  authority  or  instrumentality,  whether in the United
     States of America (federal, state or local) or outside of the United States
     of America.

6.15 Litigation. There is no action, suit, proceeding,  inquiry or investigation
     before or by any court, public board,  governmental agency or authority, or
     self-regulatory  organization  or body  pending  or  threatened  against or
     affecting the Company or, to the Company's knowledge,  any of its directors
     or officers in their  capacities as such, the adverse result of which would
     have, individually or in the aggregate, a Material Adverse Effect.

6.16 Investment  Company.  The Company is not,  and after  giving  effect to the
     transactions  contemplated  herein,  will  not be an  "investment  company"
     within the meaning of that term under the  Investment  Company Act of 1940,
     as amended, and the rules and regulations of the SEC thereunder.

6.17 No  Default or  Violation.  The  Company is not (i) in default  under or in
     violation of any indenture, loan or credit agreement or any other agreement
     or  instrument  to  which  it is a  party  or by  which  it or  any  of its
     properties  is  bound  or (ii) in  violation  of any  order  of any  court,
     arbitrator  or  governmental  body,  the  default  or  violation  of which,
     individually or in the aggregate would have a Material Adverse Effect.

6.18 Listing  and  Maintenance  Requirements  Compliance.  The  Company  has not
     received  any notice  (written  or oral)  from the Nasdaq  Over-the-Counter
     Bulletin Board to the effect that the Company is not in compliance with the
     continuing   listing   or   maintenance    requirements   of   the   Nasdaq
     Over-the-Counter  Bulletin Board.  The Company's Common Stock is registered
     under  Section  12(g)  of the  Exchange  Act and is  listed  on the  Nasdaq
     Over-the-Counter  Bulletin  Board.  The Company is in  compliance  with all
     listing and maintenance  requirements of such market, and has not taken any
     action designed to terminate registration of its Common Stock or delist the
     Common Stock from the Nasdaq Over-the-Counter Bulletin Board.

6.19 Patents and Trademarks. The Company has, or has rights to use, all patents,
     patent applications,  trademarks,  trademark  applications,  service marks,
     trade names, copyrights,  licenses and know-how (including trade secrets or
     other   unpatented   and/or   unpatentable   proprietary  or   confidential
     information,   systems  or  procedures)  (collectively,  the  "Intellectual
     Property  Rights")  that  are  necessary  for use in  connection  with  its
     business as presently  conducted or that the failure to have would not have
     a Material  Adverse  Effect,  and, to the Company's  knowledge  there is no
     existing   infringement   by  another  person  or  entity  of  any  of  the
     Intellectual  Property Rights that are necessary for use in connection with
     the Company's business as presently conducted.  To the Company's knowledge,
     the Company is not infringing on or in conflict with any right of any other
     person with respect to any Intellectual  Property Rights,  nor is there any
     claim of infringement made, or to the Company's knowledge  threatened by, a
     third party against or involving the Company.

6.20 Environmental  Matters. The Company has obtained all permits,  licenses and
     other authorizations that are required under federal,  state and local laws
     relating to pollution or  protection  of the  environment,  including  laws
     related to  emissions,  discharges,  releases  or  threatened  releases  of
     pollutants,  contaminants  or  hazardous  or toxic  material or wastes into
     ambient air, surface water,  ground water or land, or otherwise relating to
     the  manufacture,   processing,   distribution,  use,  treatment,  storage,
     disposal, transport or handling of pollutants, contaminants or hazardous or
     toxic materials or wastes  ("Environmental  Laws"), except for any failures
     to  obtain  the  permits,   licenses  or  authorizations  that  would  not,
     individually  or in the  aggregate,  have or result in a  Material  Adverse
     Effect.  The Company is in compliance  with all terms and conditions of the
     required  permits,   licenses  and  authorizations  and  is  also  in  full
     compliance  with  all  other  limitations,   restrictions,  conditions  and
     requirements  contained in the Environmental Laws or contained in any plan,
     order,  judgment,  decree or notice,  except for any  non-compliance  which
     could not,  individually or in the aggregate,  have or result in a Material
     Adverse Effect.  The Company is not aware of, nor has the Company  received
     notice of, any events,  conditions,  circumstances,  actions or plans which
     may interfere with or prevent continued compliance or which would give rise
     to any liability  under any  Environmental  Laws,  except for any liability
     which  could not,  individually  or in the  aggregate,  have or result in a
     Material Adverse Effect.

6.21 No  Anti-dilution.  The  issuance  of the  Shares  does not  constitute  an
     anti-dilution  event for any  existing  security  holders  of the  Company,
     pursuant to which such  security  holders  would be entitled to  additional
     securities or a reduction in the  applicable  conversion  price or exercise
     price of any securities.

6.22 No Registration Rights. Other than the rights granted in this Agreement and
     to other investors  participating in the Offering described in the recitals
     to this  Agreement and as described on Schedule  6.22,  the Company has not
     granted or agreed to grant to any person any rights (including "piggy-back"
     registration  rights)  to  require  the  Company  to  file  a  registration
     statement  under the Securities Act with respect to any  securities,  or to
     include  such  securities  with  the  Shares  in  any  Shelf   Registration
     Statement, except for such as have been or will be satisfied or waived.

Section 7.  Covenants  of the  Company.  The Company  covenants  and agrees with
Purchaser,  for so long as Purchaser holds Shares, the Warrant or Warrant Shares
as follows:

7.1  Reporting  Status.  So long as the  Company  is  subject  to the  reporting
     requirements  of the Exchange Act, the Company will use its best efforts to
     file timely all reports  required to be filed with the SEC  pursuant to the
     Exchange Act.

7.2  Form D. The Company  will file a Form D within 15 days of the Closing  Date
     with  respect to the Shares with the SEC as  required  under  Regulation  D
     under the Securities Act, and will provide a copy thereof to Purchaser.

7.3  Information.  The  Company  agrees to  provide  the  following  reports  to
     Purchaser until the earlier of (i) the date on which a Purchaser transfers,
     assigns or sells all of its Shares to a non-affiliate of such Purchaser, or
     (ii) the third  anniversary  of the Closing Date:  (a) a copy of its Annual
     Report to  Shareholders  and any proxy  statements and any other reports or
     information  delivered  to  stockholders  of the Company  generally  to the
     stockholders  of the Company and (b) subject to Regulation FD and any state
     or federal  securities  laws, any information  with respect to the Company,
     its properties,  or its business or Purchaser's investment as Purchaser may
     reasonably  request;  provided,  however,  that  the  Company  will  not be
     required to provide Purchaser any material nonpublic information.

7.4  Listing and Maintenance Requirements  Compliance.  The Company will use its
     best efforts to comply in all respects  with all  requirements  to maintain
     the  quotation  of the  Company's  Common  Stock  on  the  Over-the-Counter
     Bulletin Board quotation system.

7.5  Integration.  The Company  will  insure that the  issuance of the Shares to
     Purchaser  will not be integrated  with any other issuance of the Company's
     securities in the future,  which  requires  shareholder  approval under the
     rules of Nasdaq or which would result in a violation of the Securities Act.

7.6  Participation  Right.  In the event that the  Company  effects  any private
     offering of its Common Stock within 12 months following the Closing,  at an
     effective  price per share of Common  Stock that is less than the  Purchase
     Price  (after  giving  effect to the  vesting  of any  rights  to  purchase
     securities  upon  the  exercise  of  the  Warrants  and  including  in  the
     calculation  of the Purchase Price the average price per share paid for the
     Shares  and the  Warrant  Shares  that are or could be  purchased  upon the
     exercise of any Warrants that are  exerciseable  immediately  following the
     sale of any such shares of Common  Stock),  Purchaser  shall be entitled to
     purchase  in that  private  offering a number of  securities  such that its
     percentage  ownership  of the  Company  represented  by the Shares (and any
     capital stock issued in respect of the Shares as a stock  dividend or stock
     split)  after the  closing of the  private  offering  is not less than that
     immediately  before the  private  offering  (taking  into  account for that
     purpose only the  dilution  caused by the  issuance of  securities  in such
     subsequent  private  offering).  This  right  shall  not  apply to  private
     offerings  which  are  pursuant  to a stock  option,  stock  bonus or stock
     purchase  plan or  grant  for  the  benefit  of  employees,  directors  and
     consultants,  or issued for the  purchase of assets or a business,  [to any
     lender, or strategic  partner,] which is approved by the Company's Board of
     Directors.  At the  request  of the  Company,  the  right of  Purchaser  to
     participate  in that  offering is  conditioned  on Purchaser  entering into
     agreements  substantially  the  same as  those  entered  into by the  other
     purchasers in that offering and Purchaser  making truthful  representations
     substantially  the same as those in Sections 5.1  thorough  5.4 hereof.  In
     connection  with the right set forth in this Section 7.6, the Company shall
     give five (5) business  days notice of the closing of the proposed  private
     offering  of Common  Stock to the  Purchaser,  following  which the Company
     shall be free to proceed with the private  placement if the  Purchaser  has
     not  notified  the Company in writing of its desire to  participate  in the
     private  placement by the end of such five days. The Purchaser must provide
     payment for its percentage  participation  in the private  placement at the
     same time and in accordance with the same terms and conditions as the other
     investors therein.

7.7  Subsequent Issuances of Equity Securities.

     (a)  If and  whenever on or after the Closing  Date and until  December 31,
          2004,  the  Company  issues or sells,  or is deemed to have  issued or
          sold,  shares of the Company's common stock,  other than shares of the
          Company's common stock issued in connection with any Excluded Issuance
          (as defined in Section 7.7(b)) for a  consideration  per share that is
          less than $2.00 (the "New Per Share Purchase Price"), then immediately
          after such issue or sale,  the Company shall issue to each  Purchaser,
          for no consideration in addition to the Purchase Price previously paid
          by such Purchaser at the Closing, a number of additional shares of the
          Company's  common  stock  equal  to the  difference  between  (x)  the
          aggregate Purchase Price paid by such Purchaser at the Closing divided
          by the New Per Share  Purchase  Price and (y) the  number of shares of
          Common Stock issued to such Purchaser in connection with the Closing.

     (b)  The term "Excluded  Issuance" means: (i) the issuance of the Company's
          common stock upon the exercise or  conversion of any warrants or other
          rights to acquire the Company's  equity  securities  outstanding as of
          the Closing  Date or  otherwise  described  in the  Schedules  to this
          Agreement;  (ii) the  issuance  of the  Company's  common  stock  upon
          exercise  of  options  issued to  employees,  officers,  directors  or
          consultants  of the  Company  pursuant  to the  Plans or (iii)  shares
          issued in connection with mergers, acquisitions,  loan arrangements or
          strategic alliances.

7.8  Acquisition.  If the Company is acquired  through a tender  offer of 50% or
     more of the Common Stock, merger or sale of substantially all of the assets
     of the Company or liquidated  prior to December 31, 2004, and the price per
     share received by the stockholders of the Company  ("Acquisition Price") is
     less than  $3.00 per share  ("Acquisition"),  the  Company  shall  issue to
     Purchaser a number of shares of the Company's common stock equal to (a) the
     difference  between  (i) the  number of shares  of Common  Stock  issued to
     Purchaser pursuant to this Agreement multiplied by $3.00 per share and (ii)
     the  value  of  such  shares  assuming  a  price  per  share  equal  to the
     Acquisition Price; divided by (b) the Acquisition Price.

7.9  Underwritten  Public  Offering.  In the  event of any  underwritten  public
     offering, the Company shall enter into and perform its obligations under an
     underwriting  agreement,  in usual and  customary  form,  with the managing
     underwriter of such offering.

7.10 Transaction  Costs.  The Company will reimburse all reasonable  costs up to
     $5,000  incurred  by  Purchaser  to  complete  the  purchase of the Shares,
     including but not limited to reasonable attorney fees.

Section 8.  Survival of  Representations  and  Warranties.  Notwithstanding  any
investigation  made by any  party to this  Agreement,  all  representations  and
warranties made by the Company and Purchaser  herein and in the certificates for
the Shares  delivered  pursuant  hereto,  shall survive for a period of one year
after the Closing Date and shall  thereupon  expire together with the associated
right to  indemnification  pursuant  to  Section  10(a)(iv),  unless a claim for
indemnification  (whether  or not  fixed as to  liability  or  liquidated  as to
amount) shall be made with respect  thereto prior to the end of such period,  in
which case such  representation or warranty with respect to which such claim has
been made, and the associated right to indemnification  shall survive until such
claim is satisfied, settled or dismissed.

Section 9. Registration of Common Stock.

9.1  Registrable  Securities.  For the purposes of this Agreement,  "Registrable
     Securities" means (a) the Shares, (b) the Warrant Shares and (c) any shares
     of Common  Stock  issued  as a  distribution  with  respect  to the  Shares
     referred  to in (a) or (b);  provided  that (i) any shares of Common  Stock
     will cease to be Registrable  Securities,  and (ii) the Company will not be
     obligated to maintain the effectiveness of the Shelf Registration Statement
     (as defined below), and the Company's obligations under this Section 9 will
     cease,  with  respect to a holder's  (a  "Holder")  Registrable  Securities
     following the earlier of (x) the third  anniversary of the Effective  Date,
     (y) the date on which the Company  delivers an opinion of its counsel  that
     (1) the Holder may sell in a single transaction all Registrable  Securities
     then held or issuable to the Holder on a registered  securities exchange or
     Nasdaq market (which may be the Nasdaq  Over-the-Counter  Bulletin Board or
     such other  market that may succeed  the Nasdaq  Over-the-Counter  Bulletin
     Board) under an applicable exemption from the registration  requirements of
     the  Securities  Act  (pursuant  to Rule 144  under the  Securities  Act or
     otherwise)  (which  opinion  may  assume  no other  sales by  Purchaser  of
     securities  of the Company or  derivative  securities  of such  securities,
     other than  Registrable  Securities) and (2) all transfer  restrictions and
     restrictive  legends with  respect to the  Registrable  Securities  will be
     removed upon the  consummation of the sale, or (z) Purchaser no longer owns
     the Shares or Warrant  Shares.  The period of time during which the Company
     is required to keep the Shelf Registration  Statement effective is referred
     to as the "Registration Period."

9.2  Registration.

     (a)  The Company will as soon as  practicable  following  the Closing Date,
          but not later than sixty (60) days after the Closing Date (the "Filing
          Deadline"),  file with the SEC a shelf registration  statement on Form
          S-B2 or successor form or another form selected by the Company that is
          available  to it under the  Securities  Act (the  "Shelf  Registration
          Statement")  with respect to the Registrable  Securities  beneficially
          owned by Purchaser  following  the  Closing.  The company will use its
          best efforts to have the registration  statement declared effective as
          soon thereafter as practicable. The Shelf Registration Statement shall
          contain the Plan of  Distribution in  substantially  the form attached
          hereto as Exhibit C.

     (b)  The Company may not suspend the use of the  prospectus  forming a part
          of the Shelf Registration Statement after it is declared effective for
          more  than 60 days in any  12-month  period  during  the  Registration
          Period, pursuant to Section 9.6(a) (excluding any period for which the
          Shelf  Registration  Statement  is not  effective  between the time an
          amendment  has been filed to the  registration  statement and the time
          the  amendment  has  been  declared  effective  by the  SEC  or  state
          securities  regulatory body and assuming the Company is acting in good
          faith to obtain the  effectiveness of that amendment),  other than due
          to any action by the Holder (or failure to act by the Holder).

9.3  Registration  Procedures.  In  connection  with  the  registration  of  any
     Registrable Securities under the Securities Act as provided in this Section
     9, the Company will use its reasonable best efforts:

     (a)  To provide  Purchaser  with a copy of the SB-2  filing at least  three
          days prior to the filing of such SB-2 with the SEC;

     (b)  To cause  the Shelf  Registration  Statement  (and any  other  related
          registrations,  qualifications  or  compliances  as may be  reasonably
          requested and as would permit or facilitate the sale and  distribution
          of all  Registrable  Securities  until  the  distribution  thereof  is
          complete) to become  effective as soon as  practicable  following  the
          filing thereof;

     (c)  To prepare and file with the SEC the amendments and supplements to the
          Shelf  Registration  Statement and the  prospectus  used in connection
          therewith  and take all other  actions as may be necessary to keep the
          Shelf  Registration   Statement   continuously   effective  until  the
          disposition of all securities in accordance with the intended  methods
          of disposition by the Holder or Holders thereof set forth in the Shelf
          Registration  Statement  will be  completed,  and to  comply  with the
          provisions  of the  Securities  Act (to the extent  applicable  to the
          Company) with respect to the dispositions;

     (d)  To furnish  to each  Holder of  Registrable  Securities  a  reasonable
          number  of  copies of the  Shelf  Registration  Statement  and of each
          amendment and supplement thereto, a number of copies of the prospectus
          included  in  the  Shelf   Registration   Statement   (including  each
          preliminary  prospectus),  in conformity with the  requirements of the
          Securities Act, and the other documents  (including exhibits to any of
          the  foregoing),  as the Holder may  reasonably  request,  in order to
          facilitate the  disposition  of the  Registrable  Securities  owned by
          Holder;

     (e)  To use its  best  efforts  to  register  or  qualify  the  Registrable
          Securities covered by the Shelf Registration  Statement under blue sky
          laws of the various states as any Holder  reasonably  requests (and in
          which such  registration or qualification  shall be possible),  and do
          any and all other acts and things that may be reasonably  necessary or
          advisable to enable a Holder to consummate  the  disposition  in those
          states,  except  that the  Company  will not be  required  to  qualify
          generally to do business as a foreign  corporation in any jurisdiction
          wherein it would not, but for the  requirements of this Section 9.3(d)
          be obligated  to be  qualified,  to subject  itself to taxation in any
          jurisdiction,  or to  consent  to  general  service  of process in any
          jurisdiction;

     (f)  To  provide  a  transfer  agent  and  registrar  for  the  Registrable
          Securities covered by the Shelf Registration  Statement not later than
          the effective date of the Shelf Registration Statement;

     (g)  To notify each  Holder of  Registrable  Securities  at any time when a
          prospectus  relating  thereto is  required to be  delivered  under the
          Securities Act, of the happening of any event as a result of which the
          prospectus  included in the Shelf  Registration  Statement contains an
          untrue  statement  of a material  fact or omits any fact  necessary to
          make the statements therein, in light of the circumstances under which
          they are made, not misleading,  and, at the request of any Holder, the
          Company  will  promptly  prepare  a  supplement  or  amendment  to the
          prospectus  so that,  as  thereafter  delivered to the  purchasers  of
          Registrable  Securities,  the  prospectus  will not  contain an untrue
          statement  of a material  fact or omit to state any fact  necessary to
          make the statements therein not misleading;

     (h)  To cause all  Registrable  Securities to be listed on each  securities
          exchange,  quotation system, or Nasdaq Over-the-Counter Bulletin Board
          on which similar securities issued by the Company are then listed;

     (i)  To enter  into  customary  agreements  (including,  in the  event  the
          Holders elect to engage an  underwriter  in connection  with the Shelf
          Registration Statement, an underwriting agreement containing customary
          terms  and  conditions)  and  take all  other  actions  as  reasonably
          required  in  order to  expedite  or  facilitate  the  disposition  of
          Registrable Securities; provided, however, that, except as provided in
          Section 9.4 hereof,  the Company will not be liable for any  expenses,
          including any underwriter's fees, commissions and discounts or counsel
          fees  (other  than  its  own  counsel)  with  respect  to the  sale of
          Registrable Securities;

     (j)  With a view to making available to the Holders the benefits of certain
          rules and  regulations  of the SEC that at any time permit the sale of
          the Registrable Securities to the public without registration:

          (i)  to make and keep public information available, as those terms are
               understood and defined in Rule 144 under the Securities Act; (ii)
               to file with the SEC in a timely  manner  all  reports  and other
               documents required of the Company under the Exchange Act; and

          (iii)so long as a Holder owns any unregistered Registrable Securities,
               to furnish to the Holder  upon any  reasonable  request a written
               statement  by the  Company as to its  compliance  with the public
               information  requirements  of Rule 144 under the Securities  Act,
               and of the  Exchange  Act, a copy of the most  recent  annual and
               quarterly  report of the  Company,  and the other SEC reports and
               documents of the Company as the Holder may reasonably  request in
               availing  itself of any rule or  regulation of the SEC allowing a
               Holder to sell any Registrable  Securities  without  registration
               (excluding  any  reports or  documents  of the  Company  that the
               Company, in its sole discretion, deems confidential).

     (k)  To make every reasonable  effort to obtain the withdrawal of any order
          suspending the  effectiveness of the Shelf  Registration  Statement at
          the earliest possible time.

9.4  Registration and Selling Expenses.  All expenses incurred by the Company in
     connection  with the  Company's  performance  of or  compliance  with  this
     Section  9,  including  (i) all SEC  registration  and  filing  fees,  (ii)
     reasonable  blue sky fees and expenses,  (iii) all  necessary  printing and
     duplicating  expenses,  and (iv) all fees and  disbursements of counsel and
     accountants   retained  on  behalf  of  the  Company   (collectively,   the
     "Registration Expenses"),  will be paid by the Company. Each Holder may, at
     its election, retain its own counsel and other representatives and advisors
     as it chooses at its own expense.

9.5  No Delay.  No  Holder  will  have a right to take any  action to  restrain,
     enjoin or otherwise delay any  registration  pursuant to Section 9.2 hereof
     as a result of any dispute, controversy or other matter that may arise with
     respect to the interpretation or implementation of this Agreement.

9.6  Certain Obligations of Holders.

     (a)  The Company may  voluntarily  suspend the  effectiveness  of the Shelf
          Registration  Statement for a limited time, which in no event shall be
          longer than 30 days with  respect to any single  event or more than 60
          consecutive or  non-consecutive  days in any 12-month  period,  if the
          Company has been advised in writing by either counsel or  underwriters
          to  the  Company  that  the  offering  of the  Registrable  Securities
          pursuant  to  the  Shelf   Registration   Statement  would  materially
          adversely  affect  or  would  be  impermissible  in  the  view  of (or
          impermissible without disclosure in a prospectus), a proposed material
          financing,   acquisition,  merger,  reorganization  or  other  similar
          transaction  involving the Company or the occurrence of any event with
          respect to which the  disclosure  to the public  might be  material in
          light of the sale  pursuant to a prospectus  but with respect to which
          disclosure has not yet been made by the Company.

     (b)  As a condition to the inclusion of its  Registrable  Securities,  each
          Holder  will  furnish to the  Company the  information  regarding  the
          Holder and the intended  method of  distribution  of the securities as
          the  Company  may from time to time  request or as will be required in
          connection with any registration, qualification or compliance referred
          to in this Section 9. Each Holder promptly will furnish to the Company
          all  information  required  to be  disclosed  in  order  to  make  the
          information  previously  furnished by it to the Company not materially
          misleading.

     (c)  Each Holder  hereby  covenants  to the Company not to make any sale of
          the Registrable  Securities without effectively causing the prospectus
          delivery requirements under the Securities Act to be satisfied and, if
          Registrable  Securities  are  to be  sold  by  any  method  or in  any
          transaction other than as set forth in the Plan of Distribution in the
          prospectus included in the Shelf Registration Statement, to deliver to
          the  Company an  opinion of counsel to the Holder of such  Registrable
          Securities  to the effect that the sale may be effected in  accordance
          with the Securities Act.

     (d)  The rights to cause the  Company to  register  Registrable  Securities
          granted  to the  Holders  by the  Company  under  Section  9.2  may be
          assigned in whole or in part by a Holder prior to the  effective  date
          of the Registration Statement relating to the Registrable  Securities,
          provided,  that:  (i) the  Company  is  furnished  with an  opinion of
          counsel to the  Holder of such  Registrable  Securities  to the effect
          that the transfer may be effected in  accordance  with the  Securities
          Act; (ii) the transfer involves not less than the lesser of all of the
          Holder's  Registrable  Securities or 25,000 shares of Common Stock (as
          adjusted for stock splits,  stock dividends,  and stock combinations);
          (iii) the Holder gives prior written  notice to the Company;  and (iv)
          the transferee  agrees to comply with the terms and provisions of this
          Agreement in a written  instrument  satisfactory in form and substance
          to the Company and its counsel.

     (e)  No provision of this Section 9 may be waived by a particular  affected
          Holder  (either  generally  or  in  a  particular   instance,   either
          retroactively  or  prospectively  and either for a specified period of
          time or  indefinitely)  or amended without the written consent of that
          affected Holder.

9.7  Transfer of Shares. Purchaser may transfer all or any part of its Shares to
     any person under common  management  with  Purchaser,  and the Company will
     effect such transfer of restricted certificates and will promptly amend the
     prospectus  forming a part of the Shelf  Registration  Statement to add the
     transferee to the selling shareholders in the Shelf Registration Statement;
     provided,  however,  that the Company shall not be subject to any penalties
     by virtue of the inability of the Purchaser to sell securities  pursuant to
     the   Registration   Statement   during  any  period  of  pendancy  of  the
     effectiveness of any such amendment.

Section 10. Indemnification.

(a)  The Company will indemnify,  to the extent permitted by law, each Holder of
     Registrable Securities and each director,  officer or controlling person of
     each Holder within the meaning of Section 15 of the  Securities Act against
     all  losses,  claims,  damages,  liabilities  and  expenses,  (or action in
     respect thereof),  including any of the foregoing incurred in settlement of
     any litigation, commenced or threatened, arising out of or based on (i) any
     untrue  statement or alleged untrue  statement of a material fact contained
     in,  or  information  incorporated  by  reference  into,  any  registration
     statement or prospectus  (or any  amendment or  supplement  thereto) or any
     preliminary   prospectus  prepared  in  connection  with  the  registration
     contemplated  by Section 9, (ii) any omission or alleged  omission to state
     therein a material fact required to be stated  therein or necessary to make
     the statements  therein not misleading in light of the circumstances  under
     which any statements are made,  (iii) any failure by the Company to fulfill
     and perform any material agreement,  covenant or undertaking herein (except
     to the extent  another  remedy is  specifically  provided for herein as the
     exclusive remedy), or (iv) any failure or breach of the representations and
     warranties  of the  Company set forth in Section 6 to be accurate as of the
     date hereof and as of the Closing Date,  and will promptly  reimburse  each
     Holder and each director,  officer or controlling person of each Holder for
     reasonable  legal (no more than one legal  counsel  in the  aggregate)  and
     other expenses  incurred in connection with  investigating or defending any
     claim, loss,  damage,  liability or action relating to (i) or (ii) above as
     incurred;  provided however,  that the Company will not be ----------------
     liable in any such case to the extent  that any such loss,  claim,  damage,
     liability  or  action  arises  directly  out of or is based  upon an untrue
     statement  or  alleged  untrue  statement  or by any  omission  or  alleged
     omission made in such registration statement or prospectus made in reliance
     upon and in  conformity  with written  information  furnished by any Holder
     specifically  for use in the preparation of the  registration  statement or
     prospectus, provided further,  ------------------ however, that the Company
     will not be  liable  in any such  case to the  extent  that any such  loss,
     -------  claim,  damage,  liability or action arises  directly out of or is
     based  primarily  upon  an  untrue   statement  or  omission  made  in  any
     preliminary  prospectus  or final  prospectus  if (i) such Holder failed to
     send or deliver a copy of the final  prospectus  or  prospectus  supplement
     with or prior to the  delivery of written  confirmation  of the sale of the
     Shares,  and (ii) the final prospectus or prospectus  supplement would have
     corrected such untrue statement or omission. The indemnification obligation
     of the Company with respect to clauses  (iii) and (iv) above,  will survive
     for a period ending on the [second] anniversary of the Closing Date, unless
     a claim  for  indemnification  (whether  or not  fixed as to  liability  or
     liquidated  as to amount) is made with  respect  hereto prior to the end of
     such period,  in which case the right to  indemnification  as to such claim
     shall survive until such claim is satisfied, settled or dismissed.

(b)  In connection  with the Shelf  Registration  Statement in which a Holder of
     Registrable  Securities is  participating,  each Holder will furnish to the
     Company  in writing  the  information  as is  reasonably  requested  by the
     Company for use in the Shelf Registration  Statement or prospectus and will
     severally, but not jointly,  indemnify, to the extent permitted by law, the
     Company,  its directors and officers and each person or entity, if any, who
     controls  the Company  within the  meaning of Section 15 of the  Securities
     Act,  against  any  losses,  claims,  damages,   liabilities  and  expenses
     resulting  from any untrue  statement  or  alleged  untrue  statement  of a
     material  fact or any  omission  or alleged  omission  of a  material  fact
     required to be stated in the Shelf Registration  Statement or prospectus or
     any  amendment  thereof  or  supplement  thereto or  necessary  to make the
     statements  therein  not  misleading,  but only to the extent  the  losses,
     claims, damages,  liabilities or expenses are caused by an untrue statement
     or alleged untrue  statement or by an omission or alleged  omission made in
     reliance upon and in conformity with the written  information  specifically
     furnished  by the  Holder to the  Company  for use in  connection  with the
     preparation of the Shelf  Registration  Statement or  prospectus;  provided
     --------- however, that the indemnity will not apply to the extent that the
     loss, claim, damage, ------- liability or expense arises out of or is based
     solely upon a violation of this  Agreement by the Company.  If the offering
     pursuant to any  registration  is made  through  underwriters,  each Holder
     agrees to enter into an  underwriting  agreement in customary form with the
     underwriters  and  to  indemnify  the  underwriters,   their  officers  and
     directors,  if any, and each person or entity who controls the underwriters
     within the meaning of the  Securities Act to the same extent as hereinabove
     provided with respect to indemnification by the Holder. Notwithstanding the
     foregoing  or any other  provision  of this  Agreement,  in no event will a
     Holder of Registrable Securities be liable for any losses, claims, damages,
     liabilities  or  expenses  in excess of the net  proceeds  received by such
     Holder  upon the  disposition  of  Registrable  Securities  pursuant to the
     registration statement giving rise to such claim.

(c)  Promptly after receipt by an  indemnified  party under Section 10(a) or (b)
     of notice of any claim as to which  indemnity may be sought,  including the
     commencement of any action or proceeding,  the indemnified party will, if a
     claim in respect thereof may be made against the  indemnifying  party under
     this  Section,  promptly  notify the  indemnifying  party in writing of the
     commencement thereof; provided that the failure of the indemnified party to
     so notify the indemnifying  party will not relieve the  indemnifying  party
     from its  obligations  under this  Section  except to the  extent  that the
     indemnifying party is adversely affected by the failure. In case any action
     or proceeding is brought against any indemnified party, and it notifies the
     indemnifying party of the commencement  thereof, the indemnifying party and
     its counsel will conduct the defense of any action with counsel approved by
     the indemnified party (which approval will not be unreasonably  withheld or
     delayed)  although the  indemnified  party will be entitled to  participate
     therein at the  indemnified  party's  expense,  and after  notice  from the
     indemnifying  party to the  indemnified  party of its election to so assume
     the  defense  thereof,  the  indemnifying  party  will not be liable to the
     indemnified  party under that  Section for any legal or any other  expenses
     subsequently  incurred  by the  indemnified  party in  connection  with the
     defense  thereof  (other than  reasonable  costs of  investigation)  unless
     incurred at the written request of the indemnifying party.  Notwithstanding
     the above,  the indemnified  party will have the right to employ counsel of
     its own  choice  in any  action or  proceeding  (and be  reimbursed  by the
     indemnifying  party for the reasonable fees and expenses of the counsel and
     other reasonable costs of the defense) if representation of the indemnified
     party  by  the  counsel  retained  by  the  indemnifying   party  would  be
     inappropriate due to actual or potential  differing  interests or conflicts
     between  the  indemnified  party and any  other  party  represented  by the
     counsel in the action or proceeding or counsel to the indemnified  party is
     of the  opinion  that it would not be  desirable  for the same  counsel  to
     represent both the indemnifying party and the indemnified party because the
     representation might result in a conflict of interest;  provided,  however,
     --------  ------- that the  indemnifying  party will not in connection with
     any one action or proceeding or separate but substantially  similar actions
     or proceedings arising out of the same general  allegations,  be liable for
     the  reasonable  fees  and  expenses  of more  than  one  separate  firm of
     attorneys  at any time for all  indemnified  parties,  except to the extent
     that local counsel, in addition to regular counsel, is required in order to
     effectively defend against the action or proceeding.  An indemnifying party
     will not be liable to any indemnified  party for any settlement or entry of
     judgment  concerning any action or proceeding  effected without the consent
     of the indemnifying party.

(d)  If the  indemnification  provided for in Section  10(a) or (b) is held by a
     court of competent  jurisdiction to be unavailable  under applicable law to
     an  indemnified  party  in  respect  of  any  losses,  claims,  damages  or
     liabilities referred to therein,  then each applicable  indemnifying party,
     in lieu of  indemnifying  the  indemnified  party,  will  contribute to the
     amount paid or payable by the indemnified  party as a result of the losses,
     claims,  damages or  liabilities  in the  proportion as is  appropriate  to
     reflect  the  relative  fault  of the  Company  on the one  hand and of the
     indemnified  party  on the  other in  connection  with  the  statements  or
     omissions which resulted in the losses, claims, damages, or liabilities, as
     well as any other relevant equitable  considerations including the relative
     benefits to the parties.  The relative fault of the Company on the one hand
     and of the  indemnified  party on the other will be determined by reference
     to, among other things, whether the untrue or alleged untrue statement of a
     material  fact  or the  omission  to  state  a  material  fact  relates  to
     information  supplied  by the Company or by the  indemnified  party and the
     parties' relative intent, knowledge,  access to information and opportunity
     to correct or prevent the statement or omission. The amount paid or payable
     by a party as a result  of the  losses,  claims,  damages  and  liabilities
     referred to above will be deemed to include, subject to the limitations set
     forth in  Section  10(c),  any legal or other fees or  expenses  reasonably
     incurred by the party in  connection  with  investigating  or defending any
     action or claim. No person or entity guilty of fraudulent misrepresentation
     (within  the  meaning  of  Section  11(f) of the  Securities  Act)  will be
     entitled  to  contribution  from any person or entity that is not guilty of
     fraudulent misrepresentation.

Section 11. Miscellaneous.

11.1 Notices.  Any notice or other  communication given hereunder will be deemed
     sufficient if in writing and sent by registered or certified  mail,  return
     receipt  requested,  overnight delivery against written receipt therefor or
     delivered by hand against  written receipt  therefor,  or sent by confirmed
     facsimile, addressed to:

                  If to the Company:

                           Patient Infosystems, Inc.
                           46 Prince Street
                           Rochester, NY 14607
                           Attn:    Kent Tapper
                           Facsimile:  (585) 244-1367

                  With a copy to:

                           McCarter & English, LLP
                           Four Gateway Center
                           100 Mulberry Street
                           Newark, New Jersey 07102-4056
                           Attn:    Jeffrey A. Baumel
                           Facsimile:  (973) 297-3814

                  If to Purchaser:

                    To the name and address or facsimile  number of Purchaser on
                    the signature page hereto.

     Notices  will be  deemed  to have been  given or  delivered  on the date of
mailing,  except notices of change of address, which will be deemed to have been
given or delivered when received.

11.2 Successors and Assigns.  Subject to Section 9.6(d),  this Agreement will be
     binding  upon and inure to the benefit of the  parties  hereto and to their
     respective heirs, legal representatives, successors and assigns.

11.3 Entire  Agreement.  This  Agreement  (including  the Exhibits and Schedules
     hereto) sets forth the entire agreement and understanding among the parties
     as to the  subject  matter  hereof  and  merges  and  supersedes  all prior
     discussions,  agreements and  understandings  of any and every nature among
     them. Subject to Section 9.6(e), this Agreement may be amended with respect
     to Purchaser only by mutual written agreement of the Company and Purchaser.

11.4 Governing  Law.  The terms  and  provisions  hereof  will be  construed  in
     accordance  with and governed by the laws of the State of Delaware  without
     regard to that State's conflicts of law principles.

11.5 Severability.  The holding of any provision of this Agreement to be invalid
     or unenforceable by a court of competent  jurisdiction  will not affect any
     other  provision  of this  Agreement,  which will  remain in full force and
     effect.  If any  provision  of this  Agreement  is  declared  by a court of
     competent  jurisdiction  to be  invalid,  illegal  or  incapable  of  being
     enforced in whole or in part,  the provision  will be  interpreted so as to
     remain  enforceable  to the  maximum  extent  permissible  consistent  with
     applicable  law and the  remaining  conditions  and  provisions or portions
     thereof will  nevertheless  remain in full force and effect and enforceable
     to the extent they are valid, legal and enforceable, and no provisions will
     be  deemed  dependent  upon any  other  covenant  or  provision  unless  so
     expressed herein.

11.6 No Waiver.  A waiver by either  party of a breach of any  provision of this
     Agreement will not operate, or be construed,  as a waiver of any subsequent
     breach by that same party.

11.7 Further  Assurances.  The parties  agree to execute and deliver all further
     documents,  agreements  and  instruments  and take further action as may be
     necessary  or  appropriate  to carry out the  purposes  and  intent of this
     Agreement. Any documentary, stamp tax or similar issuance or transfer taxes
     due as a result of the  conveyance,  transfer  or sale of the Shares by the
     Company to any of the Purchasers (or any of their  permitted  transferees),
     pursuant to this Agreement will be borne by the Company.

11.8 Counterparts.  This Agreement may be executed in two or more  counterparts,
     each of which will be deemed an  original,  but all of which will  together
     constitute the same instrument.

11.9 No Third  Party  Beneficiaries.  Nothing in this  Agreement  creates in any
     person not a party to this Agreement any legal or equitable  right,  remedy
     or claim under this  Agreement,  and this  Agreement  is for the  exclusive
     benefit of the parties hereto.  The parties  expressly  recognize that this
     Agreement is not intended to create a  partnership,  joint venture or other
     similar  arrangement  between  any  of  the  parties  or  their  respective
     affiliates.

11.10Publicity  Restrictions.  No  press  release  or  other  public  disclosure
     relating to the  transactions  contemplated by this Agreement may be issued
     or made by or on behalf of any party  without prior  consultation  with the
     other  parties,  except as required by  applicable  law,  court  process or
     Nasdaq or other stock exchange rules,  in which case Purchaser  required to
     make the disclosure  will allow the Company  reasonable time (to the extent
     practicable) to comment thereon in advance of the issuance. The Company may
     issue an initial press release relating to the transactions contemplated by
     this  Agreement,  but shall not identify  Purchaser  in such press  release
     unless the  disclosure  of the  Purchaser's  identity  would  otherwise  be
     required in any filing with the SEC by the Company or the Purchaser  either
     at the time of the proposed press release or within 60 days thereafter. The
     parties  acknowledge  that neither  party has rendered  advice to the other
     regarding  tax  structure  or  tax  consequences  in  connection  with  the
     transactions  contemplated by this Agreement.  The parties acknowledge that
     the Company may file a copy of this Agreement with the SEC as an exhibit to
     its filings.

11.11Force  Majeure.  No party  shall be  liable  for any  delay or  failure  of
     performance due to a "Force Majeure Event".  For purposes of this Agreement
     a Force Majeure Event is an event beyond the reasonable control of a party,
     including unexpected and extreme forces of nature, a banking moratorium due
     to  governmental  order,  acts of war or terror,  or acts of a governmental
     body beyond the reasonable control of the party.





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<PAGE>


     IN WITNESS  WHEREOF,  the  undersigned  have duly executed this  Securities
Purchase Agreement as of the date first above written.

                      PATIENT INFOSYSTEMS, INC.


                      By:  __________________________________
                           Roger Chaufournier
                           Title:  President and Chief Executive Officer

                      [INVESTOR]


                      By:  __________________________________
                           Name:
                           Title:

                      Number of Shares Purchased:

                      Purchase Price:  $2.00

                      Purchaser's Address:






                      Purchaser's Tax Identification Number:



                      Shares purchased to be
                      registered as follows: