SECURED  CONVERTIBLE  PREFERRED  STOCK  PURCHASE  AGREEMENT       (this
"AGREEMENT"),  dated as of April 7, 2000,  among  CeleXx  Corporation,  a Nevada
corporation  (the  "COMPANY"),  and the  investors  signatory  hereto (each such
investor  is a  "Purchaser"  and  all  such  investors  are,  collectively,  the
"PURCHASERS").

         WHEREAS,  subject  to the  terms  and  conditions  set  forth  in  this
Agreement,  the  Company  desires  to issue and sell to the  Purchasers  and the
Purchasers,  severally  and not  jointly,  desire to purchase  from the Company,
shares of the Company's 6% Series A Convertible Preferred Stock, $.001 par value
per share (the  "Preferred  Stock"),  which are  convertible  into shares of the
Company's common stock, $.001 par value per share (THE "COMMON STOCK").

         IN CONSIDERATION  of the mutual covenants  contained in this Agreement,
and for other good and valuable  consideration the receipt and adequacy of which
are hereby acknowledged, the Company and the Purchasers agree as follows:

                                    ARTICLE I
                                PURCHASE AND SALE

         1.1      THE CLOSING.
                  -----------

                  (A) THE CLOSING.  (i) Subject to the terms and  conditions set
forth in this Agreement,  the Company shall issue and sell to the Purchasers and
the Purchasers  shall,  severally and not jointly,  purchase an aggregate of 350
shares of Preferred  Stock (the  "SHARES")  for an aggregate  purchase  price of
$3,500,000.  The closing of the purchase and sale of the Shares (the  "CLOSING")
shall take place at the offices of Robinson  Silverman  Pearce Aronsohn & Berman
LLP  ("ROBINSON  SILVERMAN"),  1290 Avenue of the Americas,  New York,  New York
10104,  immediately  following  the  execution  hereof or such later date as the
parties shall agree.  The date of the Closing IS hereinafter  referred to as the
"CLOSING DATE."

                           (ii)     At the Closing, the parties shall deliver or
shall cause to be delivered the following: (A) the Company shall deliver to each
Purchaser  (1) stock  certificates,  registered  in the name of such  Purchaser,
representing  a number of Shares equal to the quotient  obtained by dividing the
purchase price  indicated below such  Purchaser's  name on the signature page to
this agreement by 10,000,  (2) a Common STock purchase  warrant,  in the form of
Exhibit D,  registered  in the name of such  Purchaser,  pursuant  to which such
Purchaser  shall have the right to acquire the number of shares of Common  Stock
indicated  below such  Purchaser's  name on the signature page to this agreement
(collectively,  the  "WARRANTS")  (3) the legal opinion of Atlas  Perlman,  P.A.
outside  counsel  to the  Company  in the form of  Exhibit  C,  (4) an  executed
Registration Rights Agreement,  dated the date hereof, among the Company and the
purchasers, in the form of Exhibit B (the "REGISTRATION RIGHTS AGREEMENT");  (5)
an executed Security Agreement, dated the date hereof, among the Company and the
purchasers, in the form of Exhibit F (the "SECURITY AGREEMENT"), (6) an executed
Intellectual  Property  Security  Agreement,  dated the date  hereof,  among the
Company  and  the  purchasers,  in the  form  of  Exhibit  G (the  "IP  SECURITY
AGREEMENT");   (7) an executed  Stock Pledge Agreement,  dated the  date hereof,



                                       -1-


<PAGE>


 among the Company and the Purchasers,  in the
form of Exhibit H (the "COMPANY  STOCK PLEDGE  AGREEMENT");  (8) a form of Stock
Pledge Agreement, dated the date hereof, between the Company, the Purchasers and
the pledgor  signatory  thereto (the  "SHAREHOLDER  STOCK PLEDGE AGREEMENT" and,
together   with  the  Company   Stock  Pledge   Agreement,   the  "STOCK  PLEDGE
AGREEMENTS"),  (9) a letter of  consent  from  Finova  Bank,  consenting  to the
transaction contemplated in the Transaction Documents (as defined below) in form
mutually  acceptable to the parties;  (10) executed Transfer Agent Instructions,
in the  form of  exhibit  E,  delivered  to and  acknowledged  by the  Company's
Transfer  Agent (the  "TRANSFER  AGENT  INSTRUCTIONS"),  and (11)  letters  from
certain agreed  shareholders of the Company,  in form mutually acceptable to the
parties,  by  which  such  shareholders  agree to lock up all  dispositions  and
transfers  of Common  Stock owned by them  through the 180th day  following  the
Effective  Date (as defined in Section  3.1(b));  and (B) each  Purchaser  shall
deliver (1) the purchase  price  indicated  below such  Purchaser's  name on the
signature  page to this  Agreement  in  United  States  dollars  in  immediately
available  funds by wire  transfer  to an account  designated  in writing by the
Company for such purpose,  and (2) executed  copies of the  Registration  Rights
Agreement,   Security   Agreement,   IP  Security  Agreement  and  Stock  Pledge
Agreements.

         1.2 TERMS OF PREFERRED STOCK. The Preferred Stock shall have the rights
preferences  and  privileges  set forth in Exhibit A, and shall be  incorporated
into a Certificate of Designation (the "CERTIFICATE OF DESIGNATION") to be filed
prior to the Closing by the Company with the  Secretary  of State of Nevada,  in
form and substance mutually agreed to by the parties.

         1.3 CERTAIN DEFINED TERMS.  For purposes of this  Agreement,  "ORIGINAL
ISSUE DATE" and  "TRADING  DAY" shall have the  meanings set forth in Exhibit A;
"BUSINESS  DAY"  shall mean any day  except  Saturday,  Sunday and any day which
shall be a federal legal holiday or a day on which banking  institutions  in the
State of New York or the State of Florida are  authorized  or required by law or
other governmental action to close; "PERSON" means an individual or corporation,
partnership,  trust, incorporated or unincorporated association,  joint venture,
limited  liability  company,  joint stock  company,  government (or an agency or
subdivision thereof) or other entity of any kind.

                                   ARTICLE II
                         REPRESENTATIONS AND WARRANTIES

         2.1      REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY. The
Company  hereby  makes the  following  representations  and  warranties  to  the
Purchasers:

                  (A)   ORGANIZATION  AND   QUALIFICATION.   The  Company  is  a
corporation duly  incorporated,  validly existing and in good standing under the
laws of the State of Nevada, with the requisite corporate power and authority to
own and use its  properties and assets and to carry on its business as currently
conducted.  The Company has no subsidiaries  other than as set forth in Schedule
2.1(A) (collectively the "SUBSIDIARIES"). Each of the Subsidiaries is an entity,
duly incorporated or otherwise organized,  validly existing and in good standing
under the laws of the  jurisdiction of its  incorporation  or  organization  (as
applicable),  with  the  requisite  power  and  authority  to own  and  use  its
properties and assets and to carry on its business as currently conducted.




                                       -2-


<PAGE>



Each of the Company and the Subsidiaries is duly qualified to do business and is
in good  standing as a foreign  corporation  in each  jurisdiction  in which the
nature  of  the  business   conducted  or  property   owned  by  it  makes  such
qualification necessary,  except where the failure to be so qualified or in good
standing, as the case may be, could not,  individually or in the aggregate,  (x)
adversely affect the legality,  validity or enforceability of the Securities (as
defined below) or any of this Agreement,  the Registration Rights Agreement, the
Warrants, the Security Agreement,  the IP Security Agreement,  the Company Stock
Pledge  Agreement  or  the  Transfer  Agent  Instructions   (collectively,   the
"TRANSACTION DOCUMENTS"), (y) have or result in a material adverse effect on the
results of operations,  assets, prospects, or condition (financial or otherwise)
of the Company and the  Subsidiaries,  taken as a whole, or (z) adversely impair
the Company's  ability to perform fully on a timely basis its obligations  under
any of the  Transaction  Documents (any of (x), (y) or (z), a "MATERIAL  ADVERSE
EFFECT").

                  (B) AUTHORIZATION;  ENFORCEMENT. The Company has the requisite
corporate  power and authority to enter into and to consummate the  transactions
contemplated by each of the Transaction Documents and otherwise to carry out its
obligations  thereunder.  The execution and delivery of each of the  Transaction
Documents  by  the  Company  and  the  consummation  by it of  the  transactions
contemplated  thereby have been duly  authorized by all necessary  action on the
part of the Company and no further  action is required by the  Company.  Each of
the  Transaction  Documents  has been duly  executed  by the Company  and,  when
delivered (or filed,  as the case may be) in  accordance  with the terms hereof,
will  constitute  the valid and binding  obligation  of the Company  enforceable
against the Company in  accordance  with its terms.  Neither the Company nor any
Subsidiary  is  in  violation  of  any  of  the  provisions  of  its  respective
certificate or articles of  incorporation,  by-laws or other  organizational  or
charter documents.

                  (C)  CAPITALIZATION.  The  number of  authorized,  issued  and
outstanding capital stock of the Company is set forth in Schedule 2.1(c). except
as disclosed in Schedule  2.1(C),  the Company owns all of the capital  stock of
each Subsidiary. No shares of Common Stock are entitled to preemptive or similar
rights,  nor is any holder of the Common Stock entitled to preemptive or similar
rights arising out of any agreement or understanding  with the Company by virtue
of any of the Transaction Documents. Except as a result of the purchase and sale
of the Shares and the warrants and except as disclosed in Schedule 2.1(C), there
are no outstanding  options,  warrants,  script rights to subscribe to, calls or
commitments of any character  whatsoever  relating to, or securities,  rights or
obligations convertible into or exchangeable for, or giving any Person any right
to  subscribe  for or  acquire,  any  shares  of  Common  Stock,  or  contracts,
commitments,  understandings,  or  arrangements  by  which  the  Company  or any
Subsidiary is or may become bound to issue additional shares of Common Stock, or
securities or rights convertible or exchangeable into shares of Common Stock.

                  (D)  ISSUANCE OF THE SHARES AND THE  WARRANTS.  The Shares and
the Warrants are duly  authorized  and,  when issued and paid for in  accordance
with  the  terms  hereof,  will be duly  and  validly  issued,  fully  paid  and
nonassessable,  free and clear of all  liens,  encumbrances  and rights of first
refusal of any kind (collectively,  "LIENS"). The Company has on the date hereof
and will,  at all times  while the  Shares  and the  Warrants  are  outstanding,
maintain  an  adequate  reserve  of  duly  authorized   shares  of Common Stock,



                                       -3-


<PAGE>



reserved for issuance to the holders of the Shares and the  Warrants,  to enable
it to  perform  its  conversion,  exercise  and  other  obligations  under  this
Agreement,  the  Certificate  of  Designation  and the Warrants.  Such number of
reserved  and  available  shares of Common Stock is not less than the sum of (i)
200% of the  number of  shares of Common  Stock  which  would be  issuable  upon
conversion in full of the Shares on the Closing  Date,  assuming that the Shares
remain  outstanding  for five years and that all accrued  dividends are added to
the Stated Value (as defined in the  Certificate  of  Designation)  and (ii) the
number of shares of Common Stock  issuable upon  exercise of the Warrants  (such
number of shares  of Common  Stock as  contemplated  IN  CLAUSES  (I)-(II),  the
"INITIAL  MINIMUM").  All such  authorized  shares of Common Stock shall be duly
reserved for issuance to the holders of the Shares and the Warrants.  The shares
of Common Stock issuable upon  conversion of the Shares and upon exercise of the
Warrants are  collectively  referred to herein as the  "UNDERLYING  SHARES." The
Shares,  the Warrants and the  Underlying  Shares are  collectively  referred to
herein as, the  "SECURITIES."  When issued in accordance with the Certificate of
Designation  and the Warrants,  the Underlying  Shares will be duly  authorized,
validly issued, fully paid and nonassessable, free and clear of all Liens.

                  (E) NO CONFLICTS.  The execution,  delivery and performance of
the Transaction  Documents by the Company and the consummation by the Company of
the transactions  contemplated  thereby do not and will not (i) conflict with or
violate any  provision  of the  Company's  or any  Subsidiary's  certificate  or
articles of  incorporation,  bylaws or other charter  documents (each as amended
through the date hereof),  or (ii) subject to obtaining  the Required  Approvals
(as defined  below),  conflict  with, or constitute a default (or an event which
with notice or lapse of time or both would become a default)  under,  or give to
others any rights of termination,  amendment, acceleration or cancellation (with
or without notice,  lapse of time or both) of, any agreement,  credit  facility,
debt or other instrument  (evidencing a Company or Subsidiary debt or otherwise)
or other  understanding  to which the Company or any Subsidiary is a party or by
which  any  property  or  asset of the  Company  or any  Subsidiary  is bound or
affected,  or (iii) result in a violation of any law, rule,  regulation,  order,
judgment,  injunction,  decree or other restriction of any court or governmental
authority to which the Company or a Subsidiary is subject (including federal and
state securities laws and regulations), or by which any property or asset of the
Company  or a  Subsidiary  is bound or  affected;  except in the case of each of
clauses (ii) and (iii), as could not, individually or in the aggregate,  have or
result in a Material  Adverse  Effect.  The business of the Company is not being
conducted in violation of any law,  ordinance or regulation of any  governmental
authority,  except for violations which, individually or in the aggregate, could
not have or result in a Material Adverse Effect.

                  (F) FILINGS,  CONSENTS AND APPROVALS.  Neither the Company nor
any Subsidiary is required to obtain any consent, waiver, authorization or order
of, give any notice to, or make any filing or  registration  with,  any court or
other federal,  state, local or other governmental  authority or other Person in
connection  with the execution,  delivery and  performance by the Company of the
Transaction  Documents,  other  than  (i)  the  filing  of  the  Certificate  of
Designation  with the  Secretary of State of Nevada,  (ii) the filings  required
pursuant to Section  3.10,  (iii) the filing with the  Securities  and  Exchange
Commission  (the   "COMMISSION")  of  a  registration   statement   meeting  the
requirements  set forth in the  Registration  Rights  Agreement and covering the
resale  of the  underlying  shares by the  Purchasers  (the  "UNDERLYING  SHARES
REGISTRATION STATEMENT"), and (iv)in all other cases where the failure to obtain



                                       -4-


<PAGE>



such consent,  waiver,  authorization  or order,  or to give such notice or make
such filing or registration could not have or result in,  individually or in the
aggregate, a material adverse effect (collectively, the "REQUIRED APPROVALS").

                  (G)  LITIGATION;   PROCEEDINGS.  There  is  no  action,  suit,
inquiry,  notice of violation,  proceeding or  investigation  pending or, to the
knowledge of the Company,  threatened against or affecting the Company or any of
its Subsidiaries or any of their respective  properties  before or by any court,
arbitrator,  governmental  or  administrative  agency  or  regulatory  authority
(federal, state, county, local or foreign) (collectively, an "ACTION") which (i)
adversely affects or challenges the legality,  validity or enforceability of any
of the Transaction Documents or the Securities or (ii) could, individually or in
the aggregate, have or result in a Material Adverse Effect.

                  (H) NO DEFAULT  OR  VIOLATION.  Neither  the  Company  nor any
Subsidiary (i) is in default under or in violation of (and no event has occurred
which has not been waived  which,  with  notice or lapse of time or both,  would
result in a default by the Company or any Subsidiary under), nor has the Company
or any Subsidiary received notice of a claim that it is in default under or that
it is 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, (ii) is in violation of any order of any court,  arbitrator
or  governmental  body,  or  (iii)  is in  violation  of any  statute,  rule  or
regulation of any governmental  authority,  in each case of clauses (i), (ii) or
(iii)  above,  except as could not  individually  or in the  aggregate,  have or
result in a Material Adverse Effect.

                  (I)   PRIVATE   OFFERING.   Assuming   the   accuracy  of  the
representations   and  warranties  of  the  Purchasers  set  forth  in  Sections
2.2(b)-(g),  the offer, issuance and sale of the Securities to the Purchasers as
contemplated  hereby  are  exempt  from  the  registration  requirements  of the
Securities ACT OF 1933, AS AMENDED (THE "SECURITIES  ACT").  Neither the Company
nor any Person  acting on its behalf  has taken or is, to the  knowledge  of the
Company,  contemplating  taking any action  which could  subject  the  offering,
issuance  or sale of the  Securities  to the  registration  requirements  of the
Securities  Act including  soliciting any offer to buy or sell the Securities by
means of any form of general solicitation or advertising.

                  (J) SEC Documents; Financial Statements. The Company has filed
all reports  required  to be filed by it under the  Securities  Exchange  Act of
1934, as amended (the "EXCHANGE  ACT"),  including  pursuant to Section 13(a) or
15(d)  thereof,  for the two years  preceding  the date hereof (or such  shorter
period as the Company was required by law to file such  material) (the foregoing
materials  being  collectively  referred to herein as the "SEC  DOCUMENTS"  and,
together with the schedules to this agreement,  the "DISCLOSURE MATERIALS") on a
timely  basis or has  received a valid  extension of such time of filing and has
filed any such SEC Documents prior to the expiration of any such  extension.  As
of their respective  dates, the SEC Documents  complied in all material respects
with the  requirements  of the Securities Act and the Exchange Act and the rules
and regulations of the Commission  promulgated  thereunder,  and none of the SEC
Documents,  when filed,  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.  All material agreements to which the Company is
a party or to which the  property or assets of the Company are subject have been
filed as exhibits to the SEC Documents as  required.  The  financial  statements


                                       -5-


<PAGE>



of the Company  included in the SEC  Documents  comply in all material  respects
with  applicable  accounting  requirements  and the rules and regulations of the
Commission  with  respect  thereto  as in  effect  at the time of  filing.  Such
financial  statements have been prepared in accordance  with generally  accepted
accounting  principles applied on a consistent BASIS DURING THE PERIODS INVOLVED
("GAAP"),  except as may be otherwise specified in such financial  statements or
the notes  thereto,  and fairly  present in all material  respects the financial
position  of the  Company and its  consolidated  subsidiaries  as of and for the
dates thereof and the results of operations  and cash flows for the periods then
ended,  subject,  in the case of unaudited  statements,  to normal,  immaterial,
year-end  audit  adjustments.  Since December 31, 1999,  except as  specifically
disclosed  in the SEC  Documents,  (a) there has been no  event,  occurrence  or
development that has resulted or that could result in a Material Adverse Effect,
(b) the Company has not incurred any liabilities (contingent or otherwise) other
than (x) liabilities incurred in the ordinary course of business consistent with
past practice and (y)  liabilities not required to be reflected in the Company's
financial  statements  pursuant to GAAP or otherwise required to be disclosed in
filings made with the Commission,  (c) the Company has not altered its method of
accounting  or the identity of its auditors and (d) the Company has not declared
or  made  any  payment  or  distribution  of  cash  or  other  property  to  its
stockholders  or officers or directors  (other than in compliance  with existing
Company  stock option  plans) with respect to its capital  stock,  or purchased,
redeemed  (or made any  agreements  to  purchase  or  redeem)  any shares of its
capital stock.

                  (K)     INVESTMENT COMPANY.  The Company is not, and is not an
Affiliate (as defined in Rule 405 under the Securities Act)  of,  an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.

                  (L)  CERTAIN   FEES.   Except  for  certain  fees  payable  to
Wellington Capital  Corporation,  by the Company, no fees or commissions will be
payable by the Company to any broker,  financial advisor or consultant,  finder,
placement  agent,  investment  banker,  bank or other Person with respect to the
transactions  contemplated  by this  Agreement.  The  Purchasers  shall  have no
obligation  with respect to any fees or with respect to any claims made by or on
behalf of other Persons for fees of a type contemplated in this Section that may
be due in connection with the transactions  contemplated by this Agreement.  The
Company  shall  indemnify  and hold harmless the  Purchasers,  their  employees,
officers, directors, agents, and partners, and their respective Affiliates, from
and  against  all  claims,  losses,  damages,  costs  (including  the  costs  of
preparation  and attorney's  fees) and expenses  suffered in respect of any such
claimed or existing fees, as such fees and expenses are incurred.

                  (M)      SOLICITATION MATERIALS.   Neither the Company nor any
Person acting on the Company's behalf has solicited any offer to buy or sell the
Securities by means of any form of general solicitation or advertising.

                  (N)    SENIORITY. No class of equity securities of the Company
is senior  to  the  Shares  in  right  of  payment,  whether upon liquidation or
dissolution, or otherwise.

                  (O)    LISTING AND MAINTENANCE REQUIREMENTS COMPLIANCE. Except
as set  forth  in  the  SEC  Documents,  the  Company  has not, in the two years
preceding the date hereof (or such shorter  period  from which the Common  Stock




                                       -6-


<PAGE>


has been listed or quoted for trading),  received  notice (written or oral) from
any stock exchange,  market or trading  facility on which the Common Stock is or
has been listed (or on which it has been  quoted) to the effect that the Company
is not in  compliance  with the  listing  or  maintenance  requirements  of such
exchange or market.  The  Company is, and has no reason to believe  that it will
not in the  foreseeable  future  continue  to be,  in  compliance  with all such
listing and maintenance requirements.

                  (P) PATENTS AND TRADEMARKS.  The Company and its  Subsidiaries
have,  or have rights to use,  all  patents,  patent  applications,  trademarks,
trademark  applications,  service marks, trade names,  copyrights,  licenses and
rights  which  are  necessary  or  material  for use in  connection  with  their
respective  business as described in the SEC Reports and which the failure to so
have would have a  material  adverse  effect  (collectively,  the  "INTELLECTUAL
PROPERTY RIGHTS"). Neither the Company nor any Subsidiary has received a written
notice  that  the  Intellectual  Property  Rights  used  by the  Company  or its
Subsidiaries  violates or infringes  upon the rights of any Person,  to the best
knowledge of the Company. All such Intellectual  Property Rights are enforceable
and  there  is no  existing  infringement  by  another  Person  of  any  of  the
Intellectual Property Rights.

                  (Q) REGISTRATION  RIGHTS;  RIGHTS OF PARTICIPATION.  Except as
disclosed under Section 6(c) of the Registration  Rights Agreement,  the Company
has not  granted  or  agreed  to  grant  to any  Person  any  rights  (including
"piggy-back"  registration  rights)  to  have  any  securities  of  the  Company
registered  with the Commission or any other  governmental  authority which have
not been satisfied. No Person, has any right of first refusal, preemptive right,
right of participation,  or any similar right to participate in the transactions
contemplated by the Transaction Documents.

                  (R)  REGULATORY  PERMITS.  The  Company  and its  Subsidiaries
possess all certificates,  authorizations  and permits issued by the appropriate
Federal,  state or foreign  regulatory  authorities  necessary to conduct  their
respective  businesses  as  described  in the SEC  Documents,  except  where the
failure to possess such permits  could not,  individually  or in the  aggregate,
have or result in a material adverse effect  ("MATERIAL  PERMITS"),  and neither
the Company  nor any such  Subsidiary  has  received  any notice of  proceedings
relating to the revocation or modification of any Material Permit.

                  (S) TITLE.  The  Company  and the  Subsidiaries  have good and
marketable  title in fee  simple  to all real  property  owned by them  which is
material  to the  business  of the  Company  and its  Subsidiaries  and good and
marketable title in 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,  except for Liens as do not materially  affect the value of such property
and do not interfere  with the use made and proposed to be made of such property
by the Company and its Subsidiaries. Any real property and facilities held under
lease  by the  Company  and its  Subsidiaries  are  held by  them  under  valid,
subsisting and enforceable  leases of which the Company and its Subsidiaries are
in compliance  and do not interfere with the use made and proposed to be made of
such property and buildings by the Company and its Subsidiaries.




                                       -7-


<PAGE>



                  (T) ABSENCE OF CERTAIN PROCEEDINGS. Except as described in the
SEC  Reports,  (i) neither the Company nor any  Subsidiary,  nor any director or
officer thereof,  is or has been the subject of any Action involving (A) a claim
of violation of or liability  under  federal or state  securities  laws or (B) a
claim of breach of fiduciary duty; (ii) the Company does not have pending before
the Commission  any request for  confidential  treatment of information  and the
Company has no knowledge  of any expected  such request that would be made prior
to the Effectiveness Date (as defined in the Registration Rights Agreement); and
(iii) there has not been,  and to the best of the Company's  knowledge  there is
not pending or contemplated,  any investigation by the Commission  involving the
Company or any current or former director or officer of the Company.

                  (U)  LABOR RELATIONS.  No material labor problem exists or, to
the knowledge of the Company,  is imminent with respect to any of the  employees
of the Company.

                  (V) DISCLOSURE.  The Company  confirms that neither it nor any
other  Person  acting on its behalf has provided  any of the  Purchasers  or its
agents or counsel with any  information  that  constitutes  or might  constitute
material non-public  information.  The Company understands and confirms that the
Purchasers  shall be  relying  on the  foregoing  representations  in  effecting
transactions  in  securities  of the  Company.  All  disclosure  provided to the
Purchasers regarding the Company, its business and the transactions contemplated
hereby, including the Schedules to this Agreement,  furnished by or on behalf of
the Company are true and  correct and do not contain any untrue  statement  of a
material fact or omit to state any material fact  necessary in order to make the
statements  made therein,  in light of the  circumstances  under which they were
made, not misleading.

         2.2    REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. Each Purchaser
hereby for itself  and  for  no  other  Purchaser represents and warrants to the
Company as follows:

                  (A) ORGANIZATION;  AUTHORITY. Such Purchaser is an entity duly
organized,  validly  existing  and  in  good  standing  under  the  laws  of the
jurisdiction  of its  organization  with the requisite  corporate or partnership
power  and  authority  to  enter  into  and  to  consummate   the   transactions
contemplated  by the  Transaction  Documents  and  otherwise  to  carry  out its
obligations  thereunder.  The  purchase  by  such  Purchaser  of the  Securities
hereunder has been duly  authorized by all necessary  action on the part of such
Purchaser.  Each of this  Agreement,  the  Registration  Rights  Agreement,  the
Security Agreement, the IP Security Agreement and the Stock Pledge Agreement has
been duly executed by such  Purchaser,  and when  delivered by such Purchaser in
accordance with the terms hereof,  will constitute the valid and legally binding
obligation of such  Purchaser,  enforceable  against it in  accordance  with its
terms.

                  (B)  INVESTMENT  INTENT.   Such  Purchaser  is  acquiring  the
Securities as principal for its own account for investment purposes only and not
with a view to or for  distributing  or reselling  such  Securities  or any part
thereof,  without prejudice,  however, to such Purchaser's right, subject to the
provisions of this Agreement, the Registration Rights Agreement and the Warrant,
at all times to sell or otherwise  dispose of all or any part of such Securities
pursuant to an effective  registration  statement  under the  Securities  Act or
under an exemption  from such  registration  and in compliance  with  applicable
federal and state securities laws.   Such Purchaser is acquiring  the Securities



                                       -8-


<PAGE>



hereunder in the ordinary  course of its business.  Such Purchaser does not have
any  agreement  or  understanding,  directly or  indirectly,  with any person to
distribute the Securities.

                  (C) PURCHASER  STATUS.  At the time such Purchaser was offered
the Securities,  it was, and at the date hereof it is, and at each exercise date
under its respective Warrants,  it will be, an "accredited  investor" as defined
in Rule 501(a) under the Securities Act.

                  (D) EXPERIENCE OF SUCH PURCHASER. Such Purchaser, either alone
or together with its  representatives,  has such knowledge,  sophistication  and
experience in business and  financial  matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Securities, and has so
evaluated the merits and risks of such investment.

                  (E) ABILITY OF SUCH PURCHASER TO BEAR RISK OF INVESTMENT. Such
Purchaser is able to bear the economic risk of an  investment in the  Securities
and, at the present time, is able to afford a complete loss of such investment.

                  (F) ACCESS TO INFORMATION. Such Purchaser acknowledges that it
has reviewed the Disclosure  Materials and has been afforded (i) the opportunity
to ask such  questions  as it has deemed  necessary  of, and to receive  answers
from,  representatives of the Company concerning the terms and conditions of the
offering  of the  Securities  and the  merits  and  risks  of  investing  in the
Securities;  (ii) access to  information  about the  Company  and the  Company's
financial condition, results of operations, business, properties, management and
prospects  sufficient  to enable it to evaluate  its  investment;  and (iii) the
opportunity to obtain such additional information which the Company possesses or
can acquire without  unreasonable effort or expense that is necessary to make an
informed  investment  decision with respect to the  investment and to verify the
accuracy  and  completeness  of the  information  contained  in  the  Disclosure
Materials. Neither such inquiries nor any other investigation conducted by or on
behalf of such Purchaser or its  representatives or counsel shall modify,  amend
or affect such Purchaser's right to rely on the truth, accuracy and completeness
of the  Disclosure  Materials and the Company's  representations  and warranties
contained in the Transaction Documents.

                  (G) GENERAL SOLICITATION. Such Purchaser is not purchasing the
Securities as a result of or subsequent to any advertisement, article, notice or
other  communication  regarding  the  Securities  published  in  any  newspaper,
magazine or similar media or broadcast over  television or radio or presented at
any seminar or any other general solicitation or general advertisement.

                  (H) RELIANCE. Such Purchaser understands and acknowledges that
(i) the Securities are being offered and sold to it without  registration  under
the Securities Act in a private  placement that is exempt from the  registration
provisions of the Securities Act and (ii) the  availability  of such  exemption,
depends in part on, and the Company will rely upon the accuracy and truthfulness
of, the foregoing  representations  and such Purchaser  hereby  consents to such
reliance.

          The Company  acknowledges  and agrees that no  Purchaser  makes or has
made  any  representations  or  warranties  with  respect  to  the  transactions
contemplated hereby other than those specifically set forth in this Section 2.2.




                                       -9-


<PAGE>




                                   ARTICLE III
                         OTHER AGREEMENTS OF THE PARTIES

         3.1  TRANSFER  RESTRICTIONS.  (a)  Securities  may only be  disposed of
pursuant to an effective registration statement under the Securities Act, to the
Company or pursuant  to an  available  exemption  from or in a  transaction  not
subject  to  the  registration  requirements  of  the  Securities  Act,  and  in
compliance with any applicable  federal and state securities laws. In connection
with any transfer of Securities other than pursuant to an effective registration
statement or to the Company,  except as otherwise set forth herein,  the Company
may  require  the  transferor  thereof to  provide to the  Company an opinion of
counsel  selected by the  transferor,  the form and  substance of which  opinion
shall be  reasonably  satisfactory  to the  Company,  to the  effect  that  such
transfer does not require registration of such transferred  securities under the
Securities Act.  Notwithstanding the foregoing, the Company, without requiring a
legal  opinion  as  described  in the  immediately  preceding  sentence,  hereby
consents  to and agrees to  register  on the books of the  Company  and with any
transfer agent for the securities of the Company any transfer of Securities by a
Purchaser to an  Affiliate of such  Purchaser or to one or more funds or managed
accounts under common management with such Purchaser, and any transfer among any
such  Affiliates  or one or more funds or managed  accounts,  provided  that the
transferee  certifies  to the Company  that it is an  "accredited  investor"  as
defined in Rule 501(a) under the  Securities  Act and that it is  acquiring  the
Securities  solely  for  investment  purposes  (subject  to  the  qualifications
hereof).  Any such transferee shall agree in writing to be bound by the terms of
this Agreement and shall have the rights of a Purchaser under this Agreement and
the Registration Rights Agreement.

                  (b)      The Purchasers agree to the imprinting, so long as is
required by this Section 3.1(b), of the following legend on the Securities:

                  NEITHER THESE  SECURITIES NOR THE SECURITIES  INTO WHICH THESE
         SECURITIES ARE  [CONVERTIBLE]  [EXERCISABLE]  HAVE BEEN REGISTERED WITH
         THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES  COMMISSION OF
         ANY STATE IN RELIANCE  UPON AN EXEMPTION  FROM  REGISTRATION  UNDER THE
         SECURITIES  ACT OF  1933,  AS  AMENDED  (THE  "SECURITIES  ACT"),  AND,
         ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
         REGISTRATION  STATEMENT  UNDER THE  SECURITIES  ACT OR  PURSUANT  TO AN
         AVAILABLE  EXEMPTION  FROM,  OR IN A  TRANSACTION  NOT  SUBJECT TO, THE
         REGISTRATION  REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
         APPLICABLE STATE SECURITIES LAWS.

                  Underlying Shares shall not contain the legend set forth above
nor any other legend if the conversion of Shares and exercise of the Warrants or
other  issuances  of  Underlying  Shares  as  contemplated   hereby  or  by  the
Certificate  of  Designation  or the  Warrants  occurs  at  any  time  while  an
Underlying Shares  Registration  Statement is effective under the Securities Act
or if the holder is relying on Rule 144  promulgated  under the  Securities  Act
("RULE 144") in connection with the resale of such Underlying  Shares or, in the
event there is not an effective Underlying Shares Registration Statement at such




                                      -10-


<PAGE>



time and Rule 144 is not then  available,  if, in the  opinion of counsel to the
Company,  such  legend is not  required  under  applicable  requirements  of the
Securities Act (including judicial  interpretations and pronouncements issued by
the staff of the  Commission).  The Company shall cause its counsel to issue the
legal  opinion  included in the Transfer  Agent  Instructions  to the  Company's
transfer agent on the day that the Underlying Shares  Registration  Statement is
declared  effective by the Commission (the "EFFECTIVE DATE"). The Company agrees
that, in the event any Underlying  Shares are issued with a legend in accordance
with this Section 3.1(b),  it will,  within three (3) Trading Days after request
therefor  by  a  Purchaser,   provide  such  Purchaser  with  a  certificate  or
certificates  representing such Underlying Shares, free from such legend at such
time as such legend would not have been required  under this Section  3.1(b) had
such issuance occurred on the date of such request. The Company may not make any
notation  on its  records  or give  instructions  to any  transfer  agent of the
Company which enlarge the restrictions of transfer set forth in this Section.

         3.2  ACKNOWLEDGMENT  OF  DILUTION.  The Company  acknowledges  that the
issuance  of  the  Underlying  Shares  upon  (i)  conversion  of the  Shares  in
accordance with the terms of the  Certificate of Designation,  and (ii) exercise
of the Warrants in accordance  with their terms,  will result in dilution of the
outstanding  shares of Common Stock,  which  dilution may be  substantial  under
certain market conditions.  The Company further acknowledges that its obligation
to issue Underlying  Shares upon (x) conversion of the Shares in accordance with
the terms of the Certificate of Designation, and (y) exercise of the Warrants in
accordance  with their terms,  is  unconditional  and  absolute,  subject to the
limitations  set  forth  herein,  in the  Certificate  of  Designation  and  the
Warrants, regardless of the effect of any such dilution.

         3.3  FURNISHING  OF   INFORMATION.   As  long  as  the  Purchasers  own
Securities,  the  Company  covenants  to timely  file (or obtain  extensions  in
respect  thereof  and file  within the  applicable  grace  period)  all  reports
required  to be filed by the Company  after the date hereof  pursuant to Section
13(a) or 15(d) of the Exchange Act. As long as the Purchasers own Securities, if
the Company is not required to file reports  pursuant to such sections,  it will
prepare and furnish to the Purchasers and make publicly  available in accordance
with Rule 144(c)  promulgated  under the Securities  Act such  information as is
required for the  Purchasers to sell the Securities  under Rule 144  promulgated
under the Securities Act. The Company  further  covenants that it will take such
further action as any holder of Securities may  reasonably  request,  all to the
extent  required  from time to time to  enable  such  Person to sell  Underlying
Shares  without  registration  under the Securities Act within the limitation of
the  exemptions  provided  by Rule 144  promulgated  under the  Securities  Act,
including causing its attorneys to render and deliver any legal opinion required
in  order  to  permit a  Purchaser  to  receive  Underlying  Shares  free of all
restrictive  legends and to subsequently  sell Underlying  Shares under Rule 144
upon receipt of a notice of an intention to sell or other form of notice  having
a similar effect. Upon the request of any such Person, the Company shall deliver
to such  Person a  written  certification  of a duly  authorized  officer  as to
whether it has complied with such requirements.

         3.4 INTEGRATION.  The Company shall not, and shall use its best efforts
to ensure  that,  no  Affiliate of the Company  shall,  sell,  offer for sale or
solicit  offers to buy or  otherwise  negotiate  in respect of any  security (as
defined in Section 2   of the Securities Act)  that  would  be  integrated  with




                                      -11-


<PAGE>



the  offer  or sale  of the  Securities  in a  manner  that  would  require  the
registration  under  the  Securities  Act of the sale of the  Securities  to the
Purchasers.

         3.5 INCREASE IN AUTHORIZED SHARES. If on any date the Company would be,
if a notice of  conversion or exercise (as the case may be) were to be delivered
on such date,  precluded  from (a) issuing (a) 200% of the number of  Underlying
Shares as would then be issuable  upon a conversion  in full of the Shares,  and
(b) the number of Underlying Shares as would then be issuable upon a Exercise in
full of the warrants (the "CURRENT  REQUIRED  MINIMUM"),  in either case, due to
the unavailability of a sufficient number of authorized but unissued or reserved
shares of  Common  Stock,  then the  Board of  Directors  of the  Company  shall
promptly  (and in any case,  within 30 Business Days from such date) prepare and
mail to the stockholders of the Company proxy materials requesting authorization
to amend the Company's  certificate or articles of incorporation to increase the
number of shares of Common Stock which the Company is  authorized to issue to at
least such number of shares as reasonably  requested by the  Purchasers in order
to provide for such number of authorized and unissued  shares of Common Stock to
enable  the  Company  to comply  with its  issuance,  conversion,  exercise  and
reservation  of  shares  obligations  as  set  forth  in  this  Agreement,   the
Certificate of Designation and the Warrants (the sum of (x) the number of shares
of Common Stock then  outstanding  plus all shares of Common Stock issuable upon
exercise of all outstanding options,  warrants and convertible instruments,  and
(y) the  Current  Required  Minimum,  is  deemed  for  purposes  hereof  to be a
reasonable  number). In connection  therewith,  the Board of Directors shall (a)
adopt  proper  resolutions  authorizing  such  increase,  (b)  recommend  to and
otherwise use its best efforts to promptly and duly obtain stockholder  approval
to carry out such resolutions (and hold a special meeting of the stockholders no
later  than the  earlier  to occur of the 60th day after  delivery  of the Proxy
materials relating to such meeting and the 90th day after request by a holder of
Securities to issue the number of Underlying Shares in accordance with the terms
hereof)  and (c)  within  five  Business  Days  of  obtaining  such  stockholder
authorization,  file an  appropriate  amendment to the Company's  certificate or
articles of incorporation  to evidence such increase.  Management of the Company
shall also use its best efforts,  including voting of all shares of Common Stock
held by Management in favor of all resolutions to increase the authorized  stock
of the Company hereunder.

         3.6 RESERVATION AND LISTING OF UNDERLYING SHARES. (a) The Company shall
(i) in the time and manner required by any exchange,  market or quotation system
on which the  Common  Stock is  traded,  prepare  and file with such  securities
exchange or market or trading or quotation facility on which the Common Stock is
listed an additional shares listing  application  covering a number of shares of
Common  Stock  which is not less than the Initial  Minimum,  (ii) take all steps
necessary to cause such shares of Common Stock to be approved for listing on any
such securities  exchange or market or trading or quotation  facility as soon as
possible  thereafter,  and (iii)  provide  to the  Purchasers  evidence  of such
listing, and the Company shall maintain the listing of its Common Stock thereon.
If the number of Underlying  Shares issuable upon conversion in full of the then
outstanding Shares and upon exercise in full of the then unexercised  portion of
the Warrants exceeds 85% of the number of Underlying Shares previously listed on
account  thereof,   then  the  Company  shall  take  the  necessary  actions  to
immediately  list a number of Underlying  Shares as equals no less than the then
Current Required Minimum.




                                      -12-


<PAGE>



                  (b) The Company  shall  maintain a reserve of shares of Common
Stock for  issuance  upon the  conversion  in full of the Shares and exercise in
full of the Warrants in  accordance  with this  Agreement,  the  Certificate  of
Designation and the Warrants, respectively, in such amount as may be required to
fulfill its obligations in full under the Transaction  Documents,  which reserve
shall equal no less than the then Current Required Minimum.

         3.7   CONVERSION   AND  EXERCISE   PROCEDURES.   The   Transfer   Agent
Instructions,  Conversion  Notice (as defined in the Certificate of Designation)
and  Notice of  Exercise  under the  Warrants  set  forth  the  totality  of the
procedures  with  respect to the  conversion  of the Shares and  exercise of the
Warrants,  including  the form of legal  opinion,  if  necessary,  that shall be
rendered  to the  Company's  transfer  agent  and  such  other  information  and
instructions as may be reasonably  necessary to enable the Purchasers to convert
their Shares and exercise their Warrants as  contemplated  in the Certificate of
Designation and the Warrants (as applicable).

         3.8  CONVERSION AND EXERCISE  OBLIGATIONS  OF THE COMPANY.  The Company
shall honor  conversion  of the Shares and  exercise of the  Warrants  and shall
deliver  Underlying Shares in accordance with the respective  terms,  conditions
and time periods set forth in the Certificate of Designation and Warrants.

         3.9 RIGHT OF FIRST REFUSAL;  SUBSEQUENT REGISTRATIONS.  (a) The Company
shall not,  directly or  indirectly,  without the prior  written  consent of the
Purchasers,  offer, sell, grant any option to purchase,  or otherwise dispose of
(or  announce  any  offer,  sale,  grant  or any  option  to  purchase  or other
disposition)  any  of  its  or  its  Affiliates'  equity  or   equity-equivalent
securities  including  the issuance of any debt or other  instrument at any time
over life thereof  convertible  into or  exchangeable  for Common Stock,  or any
other transaction intended to be exempt or not subject to registration under the
Securities  Act (a  "SUBSEQUENT  PLACEMENT")  for a period of 180 days after the
Effective  Date,  provided,  that such 180 day period  shall be extended for the
number of Trading  Days during  such  period (A) in which  trading in the Common
Stock is suspended by any securities  exchange or market or quotation  system on
which the Common Stock is then listed, or (B) during which the Underlying Shares
Registration  Statement is not  effective,  or (C) during  which the  prospectus
included in the Underlying Shares Registration  Statement may not be used by the
holders thereof for the resale of Underlying Shares,  except (i) the granting of
options or warrants to employees,  officers and  directors,  and the issuance of
shares upon exercise of options granted,  under any stock option plan heretofore
or hereinafter duly adopted by the Company, (ii) shares of Common Stock issuable
upon exercise of any currently  outstanding  warrants and upon conversion of any
currently  outstanding  convertible  securities  of the  Company,  in each  case
disclosed  in  Schedule  2.1(C),  (iii)  shares of Common  Stock  issuable  upon
conversion of Shares in accordance  with the Certificate of Designation and upon
exercise of the Warrants in accordance  with their terms,  (iv) shares of Common
Stock issued in connection with a Strategic  Transaction (as defined below), and
(v) issuances of shares of Common Stock as payment of the purchase  price for an
acquisition of assets or stock of an unaffiliated Person, unless (A) the Company
delivers to each of the Purchasers a written notice (the  "SUBSEQUENT  PLACEMENT
NOTICE") of its intention to effect such Subsequent Placement,  which Subsequent
Placement Notice shall describe in reasonable  detail the proposed terms of such
Subsequent  Placement,  the amount of proceeds intended to be raised thereunder,
the Person with whom such Subsequent  Placement shall be effected,  and attached
to which shall be a



                                      -13-


<PAGE>



term sheet or similar document relating thereto and (B) such Purchaser shall not
have notified the Company by 6:30 p.m. (New York City time) on the tenth Trading
Day after its receipt of the Subsequent  Placement  Notice of its willingness to
provide (or to cause its sole  designee to provide),  subject to  completion  of
mutually  acceptable  documentation,  financing to the Company on the same terms
set forth in the Subsequent  Placement  Notice.  If the Purchasers shall fail to
notify the Company of their  intention  to enter into such  negotiations  within
such time period, the Company may effect the Subsequent Placement  substantially
upon the terms and to the Persons (or  Affiliates  Of such persons) set forth in
the Subsequent  Placement Notice;  provided,  that the Company shall provide the
Purchasers with a second Subsequent  Placement Notice,  and the Purchasers shall
again have the right of first refusal set forth above in this  paragraph (a), if
the Subsequent  Placement  subject to the initial  Subsequent  Placement  Notice
shall not have been  consummated  for any  reason on the terms set forth in such
Subsequent  Placement  Notice within  thirty  Trading Days after the date of the
initial  Subsequent  Placement  Notice with the Person (or an  Affiliate of such
Person)  identified in the Subsequent  Placement Notice. If the Purchasers shall
indicate a willingness to provide financing in excess of the amount set forth in
the  Subsequent  Placement  Notice,  then each  Purchaser  shall be  entitled to
provide financing  pursuant to such Subsequent  Placement Notice up to an amount
equal to such  Purchaser's  pro-rata  portion of the aggregate  number of Shares
purchased by such Purchaser under this  Agreement,  but the Company shall not be
required to accept  financing  from the Purchasers in an amount in excess of the
amount set forth in the Subsequent  Placement Notice. A "STRATEGIC  TRANSACTION"
shall mean a  transaction  or  relationship  in which the Company  issues Common
Stock to an entity which is,  itself or through its  subsidiaries,  an operating
company in a business  related to the  business  of the Company and in which the
Company receives  material  benefits in addition to the investment of funds, but
shall not  include a  transaction  in which the  Company is  issuing  securities
primarily for the purpose of raising capital.

                  (b) Except for (x) Underlying  Shares,  (y) other "Registrable
Securities" (as such term is defined in the Registration Rights Agreement) to be
registered,  and securities of the Company permitted pursuant to Section 6(c) of
the Registration's  Rights Agreement to be registered,  in the Underlying Shares
Registration Statement in accordance with the Registration Rights Agreement, and
(z) Common Stock  permitted to be issued  pursuant to paragraph  (a)(i) - (v) of
Section 3.9 (a), the Company shall not, for a period of not less than 90 Trading
Days  after the  Effective  Date,  without  the  prior  written  consent  of the
Purchasers  (i)  issue or sell any of its or any of its  Affiliates'  equity  or
equity-equivalent  securities  pursuant to  Regulation S  promulgated  under the
Securities  Act, or (ii) register any securities of the Company.  Any days after
the Effective  Date that a Purchaser is unable to sell  Underlying  Shares under
the Underlying Shares  Registration  Statement shall be added to such 90 Trading
Day period.

         3.10 CERTAIN SECURITIES LAWS DISCLOSURES; PUBLICITY. The Company shall:
(i) on the  Closing  Date issue a press  release  acceptable  to the  Purchasers
disclosing the transactions contemplated hereby, (ii) file with the Commission a
Report on Form 8-K disclosing the  transactions  contemplated  hereby within ten
Business Days after the Closing Date,  and (iii) timely file with the Commission
a Form D promulgated  under the Securities  Act as required  under  Regulation D
promulgated  under  the  Securities  Act  and  provide  a  copy  thereof  to the
Purchasers  promptly after the filing  thereof.  The Company shall, no less than
two Business Days prior to the filing of any disclosure required by clauses (ii)


                                      -14-


<PAGE>



and (iii)  above,  provide a copy thereof to the  Purchasers.  No such filing or
disclosure  may be made that  mentions the  Purchasers by name without the prior
consent of the  Purchasers.  The Company and the  Purchasers  shall consult with
each other in issuing any press releases or otherwise  making public  statements
or filings and other communications with the Commission or any regulatory agency
or  stock  market  or  trading   facility  with  respect  to  the   transactions
contemplated  hereby and neither  party  shall  issue any such press  release or
otherwise  make any  such  public  statement,  filings  or other  communications
without  the prior  written  consent of the other,  which  consent  shall not be
unreasonably withheld or delayed, except that no prior consent shall be required
if such  disclosure is required by law, in which such case the disclosing  party
shall provide the other party with prior notice of such public statement, filing
or other  communication.  Notwithstanding  the foregoing,  the Company shall not
publicly  disclose  the names of the  Purchasers,  or  include  the names of the
Purchasers in any filing with the Commission,  or any regulatory agency, trading
facility or stock market  without the prior written  consent of the  Purchasers,
except  to  the  extent  such  disclosure  (but  not  any  disclosure  as to the
controlling Persons thereof) is required by law, in which case the Company shall
provide the Purchasers with prior notice of such disclosure.

         3.11 USE OF PROCEEDS.  The Company  shall use the net proceeds from the
sale of the Securities  hereunder for working capital  purposes and acquisitions
and not for the  satisfaction  of any portion of the Company's  debt (other than
payment of trade payables in the ordinary  course of the Company's  business and
prior practices),  to redeem any Company equity or equity-equivalent  securities
or to settle any outstanding litigation.

         3.12 REIMBURSEMENT. If any Purchaser, other than by reason of its gross
negligence  or willful  misconduct,  becomes  involved  in any  capacity  in any
action,  proceeding or investigation brought by or against any Person, including
stockholders  of  the  Company,  in  connection  with  or  as a  result  of  the
consummation of the transactions  contemplated by the Transaction Documents, the
Company  will  reimburse  such  Purchaser  for its  reasonable  legal  and other
expenses  (including the cost of any investigation and preparation)  incurred in
connection  therewith,  as such expenses are incurred.  In addition,  other than
with respect to any matter in which a Purchaser  is a named  party,  the Company
will pay such Purchaser the charges, as reasonably determined by such Purchaser,
for the time of any officers or employees of such Purchaser devoted to appearing
and preparing to appear as  witnesses,  assisting in  preparation  for hearings,
trials or pretrial  matters,  or otherwise with respect to inquiries,  hearings,
trials, and other proceedings  relating to the subject matter of this Agreement.
The  reimbursement  obligations of the Company under this paragraph  shall be in
addition to any  liability  which the Company may otherwise  have,  shall extend
upon the same terms and  conditions to any  Affiliates of the Purchasers who are
actually  named in such  action,  proceeding  or  investigation,  and  partners,
directors,  agents,  employees and controlling persons (if any), as the case may
be, of the  Purchasers  and any such  Affiliate,  and shall be binding  upon and
inure  to  the  benefit  of  any   successors,   assigns,   heirs  and  personal
representatives  of the Company,  the  Purchasers and any such Affiliate and any
such Person.  The Company also agrees that neither the  Purchasers  nor any such
Affiliates,  partners, directors, agents, employees or controlling persons shall
have any liability to the Company or any Person asserting claims on behalf of or
in right of the Company in connection with or as a result of the consummation of
the Transaction Documents except to the extent that any losses, claims, damages,
liabilities   or  expenses  incurred  by  the  Company  result  from  the  gross




                                      -15-


<PAGE>



negligence  or  willful  misconduct  of the  applicable  Purchaser  or entity in
connection with the transactions contemplated by this Agreement.

         3.13 CERTAIN CREDIT FACILITIES.  The Company covenants that it will not
replace or amend any provisions of its proposed credit facility with Finova Bank
in a manner that results in terms less favorable with regard to subordination or
payments under the  Transaction  Documents then as exist in such facility on the
date hereof.

         3.14  SHAREHOLDERS   STOCK  PLEDGE  AGREEMENT.   The  Company  and  the
shareholder/pledgor under the Shareholders Stock Pledge Agreement will use their
best efforts to cause the Shareholders Stock Pledge Agreement to be executed and
delivered and the shares subject thereto be delivered in accordance therewith to
the Purchasers as promptly as possible following the Closing.

                                   ARTICLE IV

                                  MISCELLANEOUS

         4.1 FEES AND EXPENSES.  At the Closing, the Company shall reimburse the
Purchasers  for their legal fees and expenses  incurred in  connection  with the
preparation and  negotiation of the Transaction  Documents by paying to Robinson
Silverman  $25,000  for  the  preparation  and  negotiation  of the  Transaction
Documents.  The amount contemplated by the immediately  preceding sentence shall
be retained by the  Purchasers  and shall not be delivered to the Company at the
Closing.  Other than the amount contemplated herein, and except as otherwise set
forth in the Registration  Rights  Agreement,  Security  Agreement,  IP Security
Agreement  and  Stock  Pledge  Agreements,  each  party  shall  pay the fees and
expenses of its advisers,  counsel,  accountants and other experts,  if any, and
all  other  expenses  incurred  by  such  party  incident  to  the  negotiation,
preparation,  execution, delivery and performance of this Agreement. The Company
shall pay all stamp and other  taxes and duties  levied in  connection  with the
issuance of the Securities.

         4.2 ENTIRE AGREEMENT;  AMENDMENTS. The Transaction Documents,  together
with the Exhibits and  Schedules  thereto and the  Transfer  Agent  Instructions
contain  the entire  understanding  of the parties  with  respect to the subject
matter hereof and supersede all prior  agreements  and  understandings,  oral or
written,  with respect to such matters,  which the parties acknowledge have been
merged into such documents, exhibits and schedules.

         4.3 NOTICES.  Any and all notices or other communications or deliveries
required or permitted to be provided  hereunder shall be in writing and shall be
deemed given and effective on the earliest of (i) the date of  transmission,  if
such  notice or  communication  is  delivered  via  facsimile  at the  facsimile
telephone  number  specified in this Section  prior to 6:30 p.m.  (New York City
time) on a Business Day (with  confirmation of transmission),  (ii) the Business
Day after the date of transmission, if such notice or communication is delivered
via  facsimile at the facsimile  telephone  number  specified in this  Agreement
later  than 6:30 p.m.  (New York City time) on any date and  earlier  than 11:59
p.m.  (New York City time) on such date  (with  confirmation  of  transmission),
(iii) the  Business Day  following  the date of mailing,  if sent by  nationally
recognized overnight courier service, or (iv) upon actual receipt by  the  party


                                      -16-


<PAGE>



to whom such notice is required  to be given.  The address for such  notices and
communications shall be as follows:

                         CeleXx Corporation

                         7251 West Palmetto Park Road, Suite 208,
                         Boca Raton, Florida 33433
                         Facsimile No.: (561) 395-1975
                         Attn:  Chief Financial Officer

     With copies to:     Atlas Perlman, P.A.
                         350 Las Olas Boulevard, Suite 1700
                         Fort Lauderdale, Florida 33301
                         Facsimile No.: (954) 766-7800
                         Attn: James M. Schneider, Esq.

    If to a Purchaser:   To the address set forth under such Purchaser's name on
                         the signature pages hereto;

or such other  address as may be designated  in writing  hereafter,  in the same
manner, by such Person.

         4.4 AMENDMENTS;  WAIVERS.  No provision of this Agreement may be waived
or amended except in a written  instrument  signed, in the case of an amendment,
by the Company and each of the  Purchasers  or, in the case of a waiver,  by the
party against whom  enforcement  of any such waiver is sought.  No waiver of any
default  with  respect  to any  provision,  condition  or  requirement  of  this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any other  provision,  condition or requirement  hereof,  nor shall any delay or
omission of either  party to exercise any right  hereunder in any manner  impair
the exercise of any such right accruing to it thereafter.

         4.5  HEADINGS.  The headings  herein are for  convenience  only, do not
constitute a part of this  Agreement  and shall not be deemed to limit or affect
any of the provisions hereof.

         4.6  SUCCESSORS AND ASSIGNS.  This Agreement  shall be binding upon and
inure to the benefit of the parties and their successors and permitted  assigns.
The Company may not assign this Agreement or any rights or obligations hereunder
without  the prior  written  consent of the  Purchasers.  Except as set forth in
Section  3.1(a),  the  Purchasers  may not assign this  Agreement  or any of the
rights or  obligations  hereunder  without  the  consent  of the  Company.  This
provision  shall not limit  any  Purchaser's  right to  transfer  securities  or
transfer or assign rights under the Registration Rights Agreement.

         4.7 NO  THIRD-PARTY  BENEFICIARIES.  This Agreement is intended for the
benefit of the parties  hereto and their  respective  successors  and  permitted
assigns and is not for the benefit of, nor may any provision  hereof be enforced
by, any other Person.

         4.8      GOVERNING LAW. The corporate laws of the State of Nevada shall
govern  all  issues  concerning  the  relative  rights  of  the  Company and its
stockholders.   All other  questions  concerning  the  construction,   validity,



                                      -17-


<PAGE>



enforcement  and  interpretation  of this  Agreement  shall be  governed  by and
construed and enforced in accordance  with the internal laws of the State of New
York,  without regard to the principles of conflicts of law thereof.  Each party
hereby  irrevocably  submits  to the  exclusive  jurisdiction  of the  state and
federal  courts sitting in the City of New York,  borough of Manhattan,  for the
adjudication  of any dispute  hereunder  or in  connection  herewith or with any
transaction  contemplated  hereby or discussed herein (including with respect to
the enforcement of any of the  Transaction  Documents),  and hereby  irrevocably
waives,  and agrees not to assert in any suit,  action or proceeding,  any claim
that it is not personally  subject to the  jurisdiction of any such court,  that
such suit,  action or  proceeding  is improper.  Each party  hereby  irrevocably
waives  personal  service of process and consents to process being served in any
such suit,  action or  proceeding  by mailing a copy thereof via  registered  or
certified  mail or overnight  delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this  Agreement and agrees that
such service shall constitute good and sufficient  service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law.

         4.9 SURVIVAL. The representations, warranties, agreements and covenants
contained  herein shall  survive the Closing and the delivery and  conversion or
exercise (as the case may be) of the Shares and the Warrants.

         4.10  EXECUTION.  This  Agreement  may  be  executed  in  two  or  more
counterparts,  all of which when taken  together shall be considered one and the
same agreement and shall become effective when  counterparts have been signed by
each party and  delivered  to the other  party,  it being  understood  that both
parties need not sign the same  counterpart.  In the event that any signature is
delivered by facsimile  transmission,  such  signature  shall create a valid and
binding  obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.

         4.11  SEVERABILITY.  In case any one or more of the  provisions of this
Agreement  shall be invalid or  unenforceable  in any respect,  the validity and
enforceability of the remaining terms and provisions of this Agreement shall not
in any way be  affecting  or impaired  thereby and the parties  will  attempt to
agree  upon a valid  and  enforceable  provision  which  shall  be a  reasonable
substitute  therefor,  and upon so agreeing,  shall  incorporate such substitute
provision in this Agreement.

         4.12  REMEDIES.  In addition to being  entitled to exercise  all rights
provided herein or granted by law,  including  recovery of damages,  each of the
Purchasers  will be entitled to specific  performance of the  obligations of the
Company under the Transaction Documents.  The Company and each of the Purchasers
agree  that  monetary  damages  may not be  adequate  compensation  for any loss
incurred by reason of any breach of its  obligations  described in the foregoing
sentence and hereby  agrees to waive in any action for specific  performance  of
any such obligation the defense that a remedy at law would be adequate.

         4.13     INDEPENDENT NATURE OF PURCHASERS' OBLIGATIONS AND RIGHTS.  The
obligations of each Purchaser  under any Transaction Document is several and not


                                      -18-


<PAGE>


joint with the  obligations  of any other  Purchaser  and no Purchaser  shall be
responsible  in any way for the  performance  of the  obligations  of any  other
Purchaser under any Transaction  Document.  Nothing  contained  herein or in any
Transaction  Document,  and no action taken by any Purchaser  pursuant  thereto,
shall be deemed to constitute the Purchasers as a partnership, an association, a
joint  venture  or any other kind of entity,  or create a  presumption  that the
Purchasers are in any way acting in concert with respect to such  obligations or
the transactions  contemplated by the Transaction Document. Each Purchaser shall
be entitled to independently  protect and enforce its rights,  including without
limitation  the  rights  arising  out of  this  Agreement  or  out of the  other
Transaction Documents,  and it shall not be necessary for any other Purchaser to
be joined as an additional party in any proceeding for such purpose.

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                                      -19-


<PAGE>



                  IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  this
Convertible  Preferred  Stock  Purchase  Agreement to be duly  executed by their
respective authorized signatories as of the date first indicated above.

                                    CELEXX CORPORATION

                                    By:_____________________________________
                                        Name:
                                        Title:

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<PAGE>



                                BIRCH CIRCLE LLC

                                        By:_____________________________________
                                        Name:
                                        Title:

                                        Purchase Price for Shares to be

                                        acquired at Closing:          $3,500,000

                                        Number of Shares underlying Warrant:


         Address for Notice:            Birch Circle LLC
                                        c/o Citco Trustees (Cayman) Limited
                                        Commercial Centre
                                        P.O. Box 31106 SMB
                                        Grand Cayman, Cayman Islands
                                        British West Indies
                                        Facsimile No.: (345) 945-7566


         With copies to:                  Robinson Silverman Pearce Aronsohn &
                                          Berman LLP
                                          1290 Avenue of the Americas
                                          New York, NY  10104
                                          Facsimile No.:     (212) 541-4630  and
                                                             (212) 541-1432
                                          Attn:  Eric L. Cohen, Esq.


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<PAGE>









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                 CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT

                                      Among

                               CELEXX CORPORATION

                                       and

                         THE INVESTORS SIGNATORY HERETO




                            Dated as of April 7, 2000





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