CONVERTIBLE NOTE AND WARRANT
                               PURCHASE AGREEMENT

                                RAPIDTRON, INC.


This Convertible Note and Warrant Purchase Agreement (the "AGREEMENT") is made
effective as of the 29th day of July, 2005 (the "EFFECTIVE DATE") by and among:

     RAPIDTRON, INC., a Nevada corporation, of 3151 Airway Ave., Bldg. Q, Costa
     Mesa, CA 92626 (the "COMPANY"); and

     CERES FINANCIAL LIMITED, a BVI company, of Walkers Chambers, P.O. Box 92,
     Mill Mall, Road Town, Tortola, British Virgin Islands (the "INVESTOR").

The Company and the Investor are collectively referred to in this Agreement as
the "PARTIES."

WHEREAS:

     A.   The Company currently does not have sufficient current assets to meet
          its working capital requirements and has on-going commitments and
          obligations to its employees, suppliers, security holders, debt
          holders and other third parties; and the Company is currently in the
          process of evaluating a restructuring of its business and finances in
          order to continue as a going concern, including a possible merger or
          acquisition transaction (the "RESTRUCTURING");

     B.   The Investor is a shareholder of the Company and the Company has
          certain obligations to the Investor under the terms of that certain
          Convertible Note and Warrant Purchase Agreement dated on or about June
          21, 2005 and a Convertible Note issued thereunder in the aggregate
          amount of US$397,566.29 (the "CONVERTIBLE NOTE"); a Registration
          Rights Agreement dated as of June 21, 2005; Security Agreement dated
          as of June 21, 2005 and various Warrant Certificates and other
          documents entered into in connection with the Investor's investments
          in the Company (the "INVESTOR'S RIGHTS");

     C.   The Company desires to issue and sell and the Investor desires to
          purchase (i) a convertible promissory note in substantially the form
          attached to this Agreement as Exhibit A (the "NOTE"), which shall be
                                        ---------
          convertible on the terms stated therein into equity securities of the
          Company, and (ii) a warrant to purchase equity securities of the
          Company on the terms stated therein in substantially the form attached
          to this Agreement as Exhibit B (the "WARRANT"). The Note, the Warrant
                               ---------
          and the equity securities issuable upon conversion or exercise thereof
          are collectively referred to herein as the "SECURITIES";

     D.   The Company is indebted to the Investor under the terms of the
          Convertible Note and desires to grant the Investor a security interest
          in accounts receivable, inventory and proceeds from any financing
          transactions (the "SECURITY INTEREST") to secure payment of the Note
          and the Convertible Note; and

     E.   The Investor (i) satisfies the criteria for "ACCREDITED INVESTORS" as
          defined under Rule 501(a) of Regulation D of the Securities Act of
          1933, as amended (the "SECURITIES ACT"),


                                      -1-
<PAGE>
          (ii) is not a "U.S. Person" as such term is defined by Rule 902 of
          Regulation S under the Securities Act and (iii) is outside the United
          States at the time of execution and delivery of this Agreement.

NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the mutual
covenants and agreements herein contained, the receipt of which is acknowledged,
the Parties covenant and agree with each other as follows:

1.   PURCHASE AND SALE OF NOTE AND WARRANT; AND GRANT OF SECURITY INTEREST

1.1  SALE AND ISSUANCE OF NOTE AND WARRANT. Subject to the terms and
     -------------------------------------
     conditions of this Agreement, the Investor agrees to purchase at the
     Closing (as defined below) and the Company agrees to sell and issue to the
     Purchaser a Note in the principal amount of Sixty Thousand Dollars
     (US$60,000), and a Warrant to purchase equity securities of the Company at
     an aggregate exercise price as set forth in the Warrant. The total purchase
     price of the Note and the Warrant together shall be Sixty Thousand Dollars
     (US$60,000).

1.2  GRANT OF SECURITY INTEREST. The Company will execute and deliver to
     --------------------------
     Investor a security agreement, in the form attached hereto as Exhibit C,
                                                                   ---------
     securing payment of its indebtedness, liabilities and obligations under the
     Note and the Convertible Note, and granting to Investor a security interest
     in all of the Company's accounts receivable, inventory and proceeds from
     any financing transactions (the "SECURITY AGREEMENT").

2.   CLOSING, CLOSING CONDITIONS AND DELIVERIES

2.1  CLOSING. There shall be no physical closings of the transactions
     -------
     contemplated by this Agreement. The purchase and sale of the Note and
     Warrant shall take place at the offices of Dorsey & Whitney LLP, legal
     counsel to the Investor, at 1420 Fifth Avenue, Suite 3400, Seattle,
     Washington 98101 at 10:00 a.m. on the effective date, or at such other time
     and place as the Company and the Investor mutually agree upon, orally or in
     writing (which time and place are designated as the "CLOSING"). At the
     Closing, the Company shall deliver to the Investor the Note and Warrant
     against payment of the purchase price therefor by check or by wire transfer
     to the Company's bank account. The Parties may arrange for executed copies
     to be held in escrow prior to such exchange, so as to facilitate the
     exchange without the need for the presence of one or more of the Parties.

2.2  The Closing of the transaction contemplated by this Agreement is subject to
     the fulfillment of the following conditions (the "CLOSING CONDITIONS")
     which are for the benefit of the Investor:

     (a)  all relevant documentation and approvals as may be required by
          applicable securities statutes, regulations, policy statements and
          interpretation notes, by applicable securities regulatory authorities
          and by applicable rules and guidelines of any stock exchange on which
          the Company's common shares are listed, shall have been obtained and,
          where applicable, executed by or on behalf of the Investor;

     (b)  the Company's board of directors shall have authorized and approved
          the execution and delivery of this Agreement, the issuance and
          delivery of the Note, the reservation and issuance of securities
          acquirable upon exercise or conversion of the Note (the "NOTE


                                      -2-
<PAGE>
          SECURITIES"), the allotment and issuance of the Warrant, and the
          reservation and issuance of the Company's common shares acquirable
          upon exercise of the Warrant (the "WARRANT SHARES");

     (c)  the representations and warranties of the Company set forth in this
          Agreement shall be true and correct as of the Closing;

     (d)  no action or proceeding at law or in equity shall be pending or
          threatened by any person, including any government, governmental
          authority, regulatory body or agency to enjoin, restrict or prohibit
          the purchase and issuance of the Securities or the transactions
          contemplated hereby; and

     (e)  the Company shall have delivered a copy of resolutions of the Board of
          Directors of the Company certified by the secretary of the Company
          authorizing and approving the execution, delivery and performance of
          this Agreement and the transactions contemplated herein.

2.3  The Closing Conditions may be waived in writing in whole or in part by the
     Investor before the Closing upon such terms as it may consider appropriate
     in its sole discretion.

3.   INVESTOR'S REPRESENTATIONS AND WARRANTIES

3.1  The Investor makes the following representations and warranties to the
     Company:

     (a)  The Investor represents that it is an "ACCREDITED INVESTOR" as such
          term is defined under Rule 501(a) of Regulation D of the Securities
          Act;

     (b)  The Investor represents it is not a "U.S. person" as defined in
          Regulation S under the Securities Act; and

     (c)  The Investor represents that it was not offered the Note or the
          Warrant in the United States, did not receive any materials relating
          to this Agreement or the transactions contemplated herein in the
          United States, and did not execute this Agreement or any other
          materials relating to this Agreement in the United States.

3.2  The Investor has the power and authority to sign and comply with the terms
     of this Agreement and the person signing this Agreement on its behalf has
     the necessary power to do so; the Investor's principal place of business
     and principal office are located within the jurisdiction set forth in the
     address provided by the Investor below.

4.   COMPANY'S REPRESENTATIONS, WARRANTIES, AND COVENANTS

4.1  In order to induce the Investor to purchase the Note and Warrant, the
     Company hereby represents and warrants to the Investor, except as disclosed
     in the attached Company Disclosure Schedule, that:

     (a)  Organization, Standing, etc. The Company is a corporation duly
          ---------------------------
          organized, validly existing and in good standing under the laws of the
          state of Nevada, and has the requisite corporate power and authority
          to own its properties and to carry on its business in all material
          respects as it is now being conducted. The Company has the requisite
          corporate


                                      -3-
<PAGE>
          power and authority to issue the Note and Warrant and to otherwise
          perform its obligations under this Agreement.

     (b)  Governing Instruments. The Company has filed in its reports filed
          ---------------------
          with the United States Securities and Exchange Commission (the "SEC
          REPORTS") true, accurate and correct copies of the articles of
          incorporation and bylaws of the Company and such articles of
          incorporation and bylaws are the duly and legally adopted articles of
          incorporation and bylaws of the Company in effect as of the date of
          this Agreement.

     (c)  Subsidiaries, etc. Except as otherwise described in its SEC
          -----------------
          Reports, the Company does not have any direct or indirect ownership
          interest in any corporation, partnership, joint venture, association
          or other business enterprise. If any entity is described in the
          Company's SEC Reports and the Company owns a controlling interest in
          such entity, each of the representations and warranties set forth in
          this article 4.1 are being hereby restated with respect to such entity
          (modified as appropriate to the nature of such entity).

     (d)  Qualification. The Company is duly qualified, licensed or
          -------------
          domesticated as a foreign corporation in good standing in each
          jurisdiction wherein the nature of its activities or the properties
          owned or leased by it makes such qualification, licensing or
          domestication necessary and in which failure to so qualify or be
          licensed or domesticated would have a material adverse impact upon its
          business.

     (e)  Financial Statements. The Company's most recent financial
          --------------------
          statements contained in the Company's SEC Reports (i) are in
          accordance with the books and records of the Company, (ii) present
          fairly the financial condition of the Company at the balance sheets
          dates and the results of its operations for the periods therein
          specified, and (iii) have, in all material respects, been prepared in
          accordance with generally accepted accounting principles applied on a
          basis consistent with prior accounting periods. Without limiting the
          generality of the foregoing, the balance sheets or notes thereto
          disclose all of the debts, liabilities and obligations of any nature
          (whether absolute, accrued or contingent and whether due or to become
          due) as of the date of the Company's most recent financial statements
          contained in the Company's SEC Reports, which, individually or in the
          aggregate, are material and which in accordance with generally
          accepted accounting principles would be required to be disclosed in
          such balance sheets, and includes appropriate reserves for all taxes
          and other liabilities accrued as of such dates but not yet payable.

     (f)  Tax Returns and Audits. All required federal, state and local tax
          ----------------------
          returns or appropriate extension requests of the Company have been
          filed, and all federal, state and local taxes required to be paid with
          respect to such returns have been paid or provision for the payment
          thereof has been made. The Company is not delinquent in the payment of
          any such tax or in the payment of any assessment or governmental
          charge. The Company has not received notice of any tax deficiency
          proposed or assessed against it, and it has not executed any waiver of
          any statute of limitations on the assessment or collection of any tax.
          None of the Company's tax returns have been audited by governmental
          authorities in a manner to bring such audits to the Company's
          attention. The Company does not have any tax liabilities except those
          incurred in the ordinary course of business since January 1, 2003.


                                      -4-
<PAGE>
     (g)  Changes, Dividends, etc. Except for the transactions contemplated
          -----------------------
          by this Agreement, since the date of the Company's most recent
          financial statements contained in the Company's SEC Reports, the
          Company has not: (i) incurred any debts, obligations or liabilities,
          absolute, accrued or contingent and whether due or to become due,
          except current liabilities incurred in the ordinary course of business
          which will not materially and adversely affect the business,
          properties or prospects of the Company; (ii) paid any obligation or
          liability other than, or discharged or satisfied any liens or
          encumbrances other than those securing, current liabilities, in each
          case in the ordinary course of business; (iii) declared or made any
          payment to or distribution to its shareholders as such, or purchased
          or redeemed any of its shares of capital stock, or obligated itself to
          do so; (iv) mortgaged, pledged or subjected to lien, charge, security
          interest or other encumbrance any of its assets, tangible or
          intangible, except in the ordinary course of business; (v) sold,
          transferred or leased any of its assets except in the ordinary course
          of business; (vi) suffered any physical damage, destruction or loss
          (whether or not covered by insurance) materially and adversely
          affecting the properties, business or prospects of the Company; (vii)
          entered into any transaction other than in the ordinary course of
          business; (viii) encountered any labor difficulties or labor union
          organizing activities; (ix) issued or sold any shares of capital stock
          or other securities or granted any options, warrants, or other
          purchase rights with respect thereto other than pursuant to this
          Agreement; (x) made any acquisition or disposition of any material
          assets or become involved in any other material transaction, other
          than for fair value in the ordinary course of business; (xi) increased
          the compensation payable, or to become payable, to any of its
          directors or employees, or made any bonus payment or similar
          arrangement with any of its directors or employees or increased the
          scope or nature of any fringe benefits provided for its directors or
          employees; or (xii) agreed to do any of the foregoing other than
          pursuant hereto. There has been no material adverse change in the
          financial condition, operations, results of operations or business of
          the Company since the date of the Company's most recent financial
          statements contained in the Company's SEC Reports or most recent draft
          delivered to the Investor.

     (h)  Title to Properties and Encumbrances. The Company has good and
          ------------------------------------
          marketable title to all of its properties and assets, including
          without limitation the properties and assets reflected on Company's
          most recent financial statements contained in the Company's SEC
          Reports and the properties and assets used in the conduct of its
          business, except for property disposed of in the ordinary course of
          business since the date of the Company's most recent financial
          statements contained in the Company's SEC Reports, which properties
          and assets are not subject to any mortgage, pledge, lease, lien,
          charge, security interest, encumbrance or restriction, except (a)
          those which are shown and described on the Company Disclosure Schedule
          or the notes to the financial statements attached to the Company's
          latest SEC Reports, (b) liens for taxes and assessments or
          governmental charges or levies not at the time due or in respect of
          which the validity thereof shall currently be contested in good faith
          by appropriate proceedings, or (c) those which do not materially
          affect the value of or interfere with the use made of such properties
          and assets.

     (i)  Conditions of Properties. The plant, offices and equipment of the
          ------------------------
          Company have been kept in good condition and repair in the ordinary
          course of business.

     (j)  Litigation; Governmental Proceedings. There are no legal actions,
          ------------------------------------
          suits, arbitrations or other legal, administrative or governmental
          proceedings existing or, to the knowledge of


                                      -5-
<PAGE>
          the Company, threatened, against the Company, or its properties or
          business, and the Company is not aware of any pending investigations
          or facts which are likely to result in or form the basis for any such
          action, suit or other proceeding. The Company is not in default with
          respect to any judgment, order or decree of any court or any
          governmental agency or instrumentality. The Company has not been
          threatened with any action or proceeding under any business or zoning
          ordinance, law or regulation.

     (k)  Compliance With Applicable Laws and Other Instruments. To the best
          -----------------------------------------------------
          of the Company's knowledge, the business and operations of the Company
          have been and are being conducted in all material respects in
          accordance with all applicable laws, rules and regulations of all
          governmental authorities. Neither the execution nor delivery of, nor
          the performance of or compliance with, this Agreement nor the
          consummation of the transactions contemplated hereby will, with or
          without the giving of notice or passage of time, result in any breach
          of, or constitute a default under, or result in the imposition of any
          lien or encumbrance upon any asset or property of the Company pursuant
          to, any agreement or other instrument to which the Company is a party
          or by which it or any of its properties, assets or rights is bound or
          affected, and will not violate the articles of incorporation or bylaws
          of the Company. The Company is not in violation of its articles of
          incorporation or bylaws nor in material violation of, or in material
          default under, any lien, indenture, mortgage, lease, agreement,
          instrument, commitment or arrangement in any material respect. The
          Company is not subject to any restriction which would prohibit it from
          entering into or performing its obligations under this Agreement.

     (l)  Note and Warrant. The Note is a legal, valid and binding
          ----------------
          obligation of Company, enforceable in accordance with its terms. The
          Warrant, when issued pursuant to the terms of this Agreement, will be
          a binding obligation of the Company in accordance with its terms. The
          Note Securities and the Warrant Shares have been reserved for issuance
          and when issued upon exercise or conversion of the Note or exercise of
          the Warrant will be duly authorized, validly issued and outstanding,
          fully paid, nonassessable and free and clear of all pledges, liens,
          encumbrances and restrictions.

     (m)  Securities Laws. Based in part upon the representations of the
          ---------------
          Investor in Section 3, no consent, authorization, approval, permit or
          order of or filing with any governmental or regulatory authority is
          required under current laws and regulations in connection with the
          execution and delivery of this Agreement or the offer, issuance, sale
          or delivery of the Note or Warrant, other than the qualification
          thereof, if required, under applicable state securities laws, which
          qualification has been or will be effected as a condition of these
          sales, except applicable notices of exemption, such as a Form D.

     (n)  Patents and Other Intangible Rights. To the best of the Company's
          -----------------------------------
          knowledge, the Company (a) owns or has the exclusive right to use,
          free and clear of all material liens, claims and restrictions, all
          patents, trademarks, service marks, trade names, copyrights, licenses
          and rights with respect to the foregoing, used in the conduct of its
          business as now conducted without infringing upon or otherwise acting
          adversely to the right or claimed right of any person under or with
          respect to any of the foregoing, (b) is not obligated or under any
          liability whatsoever to make any payments of a material nature by way
          of royalties, fees or otherwise to any owner of, licensor of, or other
          claimant to, any patent, trademark, trade name, copyright or other
          intangible asset, with respect to the use thereof or in connection
          with the conduct of its business or otherwise, (c) owns or has the


                                      -6-
<PAGE>
          unrestricted right to use all trade secrets, including know-how,
          customer lists, inventions, designs, processes, computer programs and
          technical data necessary to develop operation and sale of all products
          and services sold or proposed to be sold by it, free and clear of any
          rights, liens, or claims of others, and (d) is not using any
          confidential information or trade secrets of others.

     (o)  Capital Stock. The authorized capital stock of the Company
          -------------
          consists of 100,000,000 common shares, US$0.001 par value, and
          5,000,0000 shares of preferred stock, US$0.001 par value, of which no
          shares are issued and outstanding. All of the outstanding shares of
          the Company were duly authorized and validly issued and are fully paid
          and nonassessable. There are no outstanding subscriptions, options,
          warrants, calls, contracts, demands, commitments, convertible
          securities or other agreements or arrangements of any character or
          nature whatever, other than this Agreement, under which the Company is
          obligated to issue any securities of any kind representing an
          ownership interest in the Company. Neither the offer nor the issuance
          of the Note or the Warrant constitutes an event, under any
          anti-dilution provisions of any securities issued or issuable by the
          Company or any agreements with respect to the issuance of securities
          by the Company, which will either increase the number of shares
          issuable pursuant to such provisions or decrease the consideration per
          share to be received by the Company pursuant to such provisions. No
          holder of any security of the Company is entitled to any pre-emptive
          or similar rights to purchase any securities of the Company from the
          Company; provided, however, that nothing in this section 4.1(o) shall
          affect, alter or diminish any right granted to the Investor in this
          Agreement or any previous right granted to the Investor by the
          Company.

     (p)  Securities Act Compliance. All securities issued by the Company
          -------------------------
          after May 8, 2003, have been issued in full compliance with an
          exemption or exemptions from the registration and prospectus delivery
          requirements of the Securities Act and from the registration and
          qualification requirements of all applicable state securities laws.

     (q)  Outstanding Debt. The Company does not have any material
          ----------------
          indebtedness incurred as the result of a direct borrowing of money,
          including, but not limited to, indebtedness with respect to trade
          accounts, except as set forth in the Company's most recent financial
          statements contained in the Company's SEC Reports or the notes
          thereto. The Company is not in default in the payment of the principal
          of or interest or premium on any such indebtedness, and no event has
          occurred or is continuing under the provisions of any instrument,
          document or agreement evidencing or relating to any such indebtedness
          which with the lapse of time or the giving of notice, or both, would
          constitute an event of default thereunder.

     (r)  Assets and Contracts. The Company has filed all material
          --------------------
          agreements required to be filed or submitted with its SEC Reports
          under the rules and regulations of the SEC. The Company has in all
          material respects substantially performed all obligations required to
          be performed by it to date and is not in default in any material
          respect under any of the contracts, agreements, leases, documents,
          commitments or other arrangements to which it is a party or by which
          it is otherwise bound. All instruments material to the Company's
          business or otherwise described in this section are in effect and
          enforceable according to their respective terms, and there is not
          under any of such instruments any existing material default or event
          of default or event which, with notice or lapse of time or both,


                                      -7-
<PAGE>
          would constitute an event of default thereunder. All parties having
          material contractual arrangements with the Company are in substantial
          compliance therewith and none are in material default in any respect
          thereunder.

     (s)  Corporate Acts and Proceedings. This Agreement has been duly
          ------------------------------
          authorized by all necessary corporate action on behalf of the Company,
          has been duly executed and delivered by authorized officers of the
          Company, and is a valid and binding agreement on the part of the
          Company that is enforceable against the Company in accordance with its
          terms, except as the enforceability thereof may be limited by
          bankruptcy, insolvency, moratorium, reorganization or other similar
          laws affecting the enforcement of creditors' rights generally and to
          judicial limitations on the enforcement of the remedy of specific
          performance and other equitable remedies. All corporate action
          necessary to the authorization, creation, reservation, issuance and
          delivery of the Note and Warrant and the common shares acquirable upon
          exercise of the Warrant or conversion of the Note has been taken by
          the Company, or will be taken by the Company on or prior to the
          Closing.

     (t)  Accounts Receivable. To the extent that they exceed the reserves
          -------------------
          for doubtful accounts set forth in the most recent financial
          statements contained in the Company's SEC Reports, the accounts
          receivable which are reflected in such financial statements and all
          accounts receivable of the Company which have arisen since the latest
          date of the balance sheet contained in such financial statements
          (except such accounts receivable as have been collected) are valid and
          enforceable claims, and the goods and services sold and delivered
          which gave rise to such accounts were sold and delivered in conformity
          with the applicable purchase orders, agreements and specifications. To
          the best of the Company's knowledge, such accounts receivable are
          subject to no valid defense or offsets except routine customer
          complaints or warranty demands of an immaterial nature. The reserve
          for doubtful accounts that is included in the most recent financial
          statements contained in the Company's SEC Reports is adequate.

     (u)  Inventories. The inventories of the Company which are reflected in
          -----------
          the most recent financial statements contained in the Company's SEC
          Reports and all inventory items which have been acquired since the
          latest date of the balance sheet contained in such financial
          statements consist of raw materials, supplies, work-in-process and
          finished goods of such quality and quantities as are currently usable
          or salable in the ordinary course of its business.

     (v)  Purchase Commitments and Outstanding Bids. No material purchase
          -----------------------------------------
          commitment of the Company is in excess of normal, ordinary and usual
          requirements of its business, or was made at any price in excess of
          the then current market price, or contains terms and conditions more
          onerous than those usual and customary in the industry. There is no
          outstanding material bid, sales proposal, contract or unfilled order
          of the Company which (a) will, or could if accepted, require the
          Company to supply goods or services at a cost to the Company in excess
          of the revenues to be received therefrom, or (b) quotes prices which
          do not include a mark-up over reasonably estimated costs consistent
          with past mark-ups on similar business or market conditions current at
          the time.

     (w)  Insurance Coverage. There are in full force policies of insurance
          ------------------
          issued by insurers of recognized responsibility insuring the Company
          and its properties and business against


                                      -8-
<PAGE>
          such losses and risks, and in such amounts, as in the Company's best
          judgment, after advice from its insurance broker, are acceptable for
          the nature and extent of such business and its resources.

     (x)  No Brokers or Finders. No person, firm or corporation has or will
          ---------------------
          have, as a result of any act or omission of the Company, any right,
          interest or valid claim against the Company or the Investor for any
          commission, fee or other compensation as a finder or broker in
          connection with the transactions contemplated by this Agreement. The
          Company will indemnify and hold the Investor harmless against any and
          all liability with respect to any such commission, fee or other
          compensation which may be payable or determined to be payable in
          connection with the transactions contemplated by this Agreement.

     (y)  Conflicts of Interest. No officer, director or shareholder of the
          ---------------------
          Company or any affiliate (as such term is defined in Rule 405 under
          the Securities Act) of any such person has any direct or indirect
          interest (a) in any entity which does business in excess of US$10,000
          with the Company, (b) in any property, asset or right with a value in
          excess of US$10,000 which is used by the Company in the conduct of its
          business, or (c) in any contractual relationship with the Company
          other than as an employee, the proceeds of which will exceed
          US$10,000. For the purpose of this section 4.1(y), there shall be
          disregarded any interest which arises solely from the ownership of
          less than a 5% equity interest in a corporation whose stock is
          regularly traded on any national securities exchange or in the
          over-the-counter market.

     (z)  Licenses. The Company possesses from the appropriate agency,
          --------
          commission, board and government body and authority, whether state,
          local or federal, all licenses, permits, authorizations, approvals,
          franchises and rights which are (a) necessary for it to engage in the
          business currently conducted by it, and (b) if not possessed by the
          Company would have an adverse impact on the Company's business. The
          Company has no knowledge that would lead it to believe that it will
          not be able to obtain all licenses, permits, authorizations,
          approvals, franchises and rights that may be required for any business
          the Company proposes to conduct.

     (aa) Disclosure. The Company has not knowingly withheld from the
          ----------
          Investor any material facts known to the Company and relating to the
          assets, business, operations, financial condition or prospects of the
          Company. No representation or warranty in this Agreement or in any
          certificate, schedule, statement or other document furnished or to be
          furnished to the Investor pursuant hereto or in connection with the
          transactions contemplated hereby contains or will contain any untrue
          statement of a material fact or omits or will omit to state any
          material fact required to be stated herein or therein or necessary to
          make the statements herein or therein not misleading.

     (bb) Retirement Plans. The Company does not have any retirement plan
          ----------------
          in which any employee of the Company participates that is subject to
          any provisions of the Employee Retirement Income Security Act of 1974
          and of the regulations adopted pursuant thereto ("ERISA").

     (cc) Environmental and Safety Laws. The Company has not received any
          -----------------------------
          notice that it is in violation of any applicable statute, law or
          regulation relating to the environment or occupational health and
          safety, and to the best of the Company's knowledge no material


                                      -9-
<PAGE>
          expenditures are or will be required in order to comply with any such
          existing statute, law or regulation.

     (dd) Employees. To the best of the Company's knowledge, no officer of
          ---------
          the Company or employee of the Company (whose annual compensation is
          in excess of US$20,000) has any plans to terminate his or her
          employment with the Company. Except for the accrual of salaries
          disclosed in the Company Disclosure Schedule, the Company has complied
          in all material respects with all laws relating to the employment of
          labor, including provisions relating to wages, hours, equal
          opportunity, collective bargaining and payment of Social Security and
          other taxes, and the Company has not encountered any material labor
          difficulties. The Company does not have any worker's compensation
          liabilities.

     (ee) Absence of Restrictive Agreements. To the best of the Company's
          ---------------------------------
          knowledge, no employee of the Company is subject to any secrecy or
          non-competition agreement or any agreement or restriction of any kind
          that would impede in any way the ability of such employee to carry out
          fully all activities of such employee in furtherance of the business
          of the Company. To the best of the Company's knowledge, no employer or
          former employer of any employee of the Company has any claim of any
          kind whatsoever in respect of any of such rights.

4.2  CONDUCT OF BUSINESS. In order to induce the Investor to enter into this
     -------------------
     Agreement and to purchase the Note and Warrant, the Company hereby
     covenants and agrees that during the period from the execution and delivery
     of this Agreement and continuing until the later of July 5, 2005 or until
     the Note has been exercised, converted or paid in full, except as expressly
     agreed to in writing, the Company shall not do, cause or permit any of the
     following, without the prior written consent of Investor, which consent
     shall not be unreasonably withheld, conditioned or delayed:

     (a)  Material Contracts. Enter into any material contract or
          ------------------
          commitment, or violate, amend or otherwise modify or waive any of the
          terms of any of its material contracts in any case, other than in the
          ordinary course of business;

     (b)  Issuance of Securities. Except as contemplated in this Agreement
          ----------------------
          or as set forth on the Company Disclosure Schedule, issue, deliver or
          sell or authorize or propose the issuance, delivery or sale of, or
          purchase or propose the purchase of, any shares of its capital stock
          or securities convertible into, or subscriptions, rights, or options
          to acquire, or other agreements or commitments of any character
          obligating it to issue, any such shares or other convertible
          securities, other than the issuance of shares of its common stock
          pursuant to the exercise of stock options or other rights therefor
          outstanding as of the date of this Agreement;

     (c)  Intellectual Property. Convey, license, assign or otherwise
          ---------------------
          transfer to any person or entity any rights to its intellectual
          property rights or assets other than in the ordinary course of
          business;

     (d)  Exclusive Rights. Enter into or amend any agreements pursuant to
          ----------------
          which any other party is granted exclusive marketing or other
          exclusive rights of any type or scope with respect to any of its
          products or technology;


                                      -10-
<PAGE>
     (e)  Dispositions. Sell, lease, license or otherwise dispose of or
          ------------
          encumber any of its properties or assets which are material
          individually or in the aggregate, to it and its business, taken as a
          whole, except in the ordinary course of business;

     (f)  Indebtedness. Incur any indebtedness for borrowed money or
          ------------
          guarantee any such indebtedness or issue or sell any debt securities
          or guarantee any debt securities of others;

     (g)  Leases. Enter into any operating lease in excess of US$20,000;
          ------

     (h)  Payment of Obligations. Pay, discharge or satisfy in an amount in
          ----------------------
          excess of US$10,000 in any one case or US$50,000 in the aggregate, any
          claim, liability or obligation (absolute, accrued, asserted or
          unasserted, contingent or otherwise) arising other than in the
          ordinary course of business, other than the payment, discharge or
          satisfaction of liabilities reflected or reserved against in the
          Company's financial statements for the quarter ended March 31, 2005 or
          incurred in the ordinary course of business;

     (i)  Capital Expenditures. Make any capital expenditures, capital
          --------------------
          additions or capital improvements in excess of US$25,000, except in
          the ordinary course of business;

     (j)  Insurance. Materially reduce the amount of any material insurance
          ---------
          coverage provided by existing insurance policies;

     (k)  Termination or Waiver. Terminate or waive any right of substantial
          ---------------------
          value, other than in the ordinary course of business;

     (l)  Employee Benefit Plans; New Hires; Pay Increases. Adopt or amend
          ------------------------------------------------
          any employee benefit or stock purchase or option plan obligating the
          Company to issue more than 100,000 shares of common stock in
          aggregate, pay any special bonus or special remuneration exceeding
          US$5,000 individually or US$20,000 in the aggregate to any employee or
          director (except payments made pursuant to written agreements
          outstanding on the date of this Agreement), or increase the salaries
          or wage rates of its employees except in the ordinary course of
          business;

     (m)  Severance Arrangements. Grant any severance or termination pay (i)
          ----------------------
          to any director or officer or (ii) to any other employee except (A)
          payments made pursuant to written agreements outstanding on the date
          hereof or (B) grants which are made in the ordinary course of business
          in accordance with its standard past practice;

     (n)  Lawsuits. Commence a lawsuit other than (i) for the routine
          --------
          collection of bills or (ii) in such cases where it, in good faith,
          determines that failure to commence suit would result in the material
          impairment of a valuable aspect of its business;

     (o)  Acquisitions. Acquire or agree to acquire by merging or
          ------------
          consolidating with, or by purchasing a substantial portion of the
          assets of, or by any other manner, any business or any corporation,
          partnership, association or other business organization or division
          thereof or otherwise acquire or agree to acquire any assets which are
          material individually or in the aggregate, to its business, taken as a
          whole;


                                      -11-
<PAGE>
     (p)  Taxes. Other than in the ordinary course of business, make or
          -----
          change any material election in respect of taxes, adopt or change any
          accounting method in respect of taxes, settle any material claim or
          assessment in respect of taxes; or

     (q)  Revaluation. Revalue any of its assets, including without
          -----------
          limitation writing down the value of inventory or writing off notes or
          accounts receivable other than in the ordinary course of business or
          as required by US GAAP.

5.   GENERAL

5.1  Should the Company desire to sell any newly issued securities, the Company
     shall provide written notice to the Investor in the following manner (the
     "OFFER NOTICE"). The Offer Notice must specify all of the terms and
     conditions of the proposed sale, but may omit the identity of the proposed
     purchaser(s) (collectively, the "PROPOSED PURCHASER"). The Investor shall
     have the option, but not the obligation, within five (5) business days
     after receipt of the Offer Notice to purchase all of the securities
     specified in the Offer Notice ("OFFERED SECURITIES") at the price and on
     all the terms stated in the Offer Notice, including, without limitation,
     the closing date and manner of delivery of funds. If the Investor does not
     elect to purchase the Offered Securities within said five (5) business day
     period, then the Company shall be under no obligation to sell any of the
     Offered Stock to the Investor but may instead sell any portion of the
     Offered Stock to the Proposed Purchaser at the price and on the terms and
     conditions specified in Offer Notice, within ninety (90) days of delivery
     to the Investor of the Offer Notice. The Company may not, however, without
     giving a new notice of its intention to so do pursuant to this Section 5.1,
     sell any or all of the Offered Securities beyond said ninety (90) day
     period or at any other price or on any terms and conditions other than
     those specified in the Offer Notice.

5.2  The Company agrees to pay to, or at the direction of, the Investor an
     amount equal to the attorney's fees and other expenses incurred by Investor
     in connection with the Investor's due diligence investigation, document
     preparation and other expenses for the transactions contemplated by this
     Agreement.

5.3  For the purposes of this Agreement, time is of the essence.

5.4  The parties will sign and deliver all further documents and instruments and
     do all things that may, either before or after the signing of this
     Agreement, be reasonably required to carry out the full intent and meaning
     of this Agreement.

5.5  This Agreement may not be assigned by either party hereto.

5.6  All notices, requests, consents and other communications required or
     permitted hereunder shall be in writing and shall be delivered, or mailed
     first-class postage prepaid, registered or certified mail, if to the
     Investor at its address as shown below, or at such other address as such
     holder may specify by written notice to the Company, or if to the Company
     at the address set forth above, Attention: President; or at such other
     address as the Company may specify by written notice to the Investor; and
     such notices and other communications shall for all purposes of this
     Agreement be treated as being effective or having been given if delivered
     personally, or, if sent by mail, when received.


                                      -12-
<PAGE>
5.7  All representations and warranties contained herein shall survive the
     execution and delivery of this Agreement. All statements contained in any
     certificate, instrument or other writing delivered by or on behalf of the
     Company pursuant to this Agreement or in connection with or in
     contemplation of the transactions herein contemplated shall constitute
     representations and warranties by the Company hereunder.

5.8  This Agreement and the agreements contemplated herein contain the entire
     understanding of the parties with respect to the transactions contemplated
     in this Agreement and the terms of this Agreement expressly replace and
     supersede any prior oral or written communication, understanding or
     agreement among the parties and this Agreement may be amended only by
     agreement in writing executed by the parties.

5.9  Each Party acknowledges that it has been advised by the other to seek
     independent legal and financial (including tax) advice with respect to this
     Agreement and that it has not relied on the other party for any advice,
     whether legal or otherwise, with respect to this Agreement.

5.10 This Agreement shall be interpreted neutrally and no construction against
     the drafter shall be permitted.

5.11 It is the intention of the parties hereto that this Agreement and the
     performance hereunder shall be interpreted and construed in accordance with
     and pursuant to the laws of the State of California.

5.12 This Agreement may be signed by the parties in as many counterparts as may
     be deemed necessary, each of which so signed will be deemed to be an
     original, and all counterparts together will constitute one and the same
     instrument. A signed copy of this Agreement transmitted by facsimile will
     be treated and relied on for all purposes by any person as an originally
     signed copy.

5.13 In the event any legal action is instituted by any party to this Agreement
     for the purpose of enforcing or interpreting any provision of this
     Agreement or any other agreement arising under or relating to this
     Agreement, the prevailing party in such action shall be entitled to recover
     its reasonable attorneys' and expert witness fees and costs.

                            [Signature Pages Follow]


                                      -13-
<PAGE>
                         TO BE COMPLETED BY THE INVESTOR
                         -------------------------------

A.     REGISTRATION INSTRUCTIONS   The name and address of the person in whose
name the Note and Warrant are to be registered is as follows:

          --------------------------------------------------------
          Name


          --------------------------------------------------------
          Address


          --------------------------------------------------------
          City,  State                                   Zip  Code



B.     DELIVERY  INSTRUCTIONS.  The  name  and address of the person to whom the
Note  and  Warrant  certificate  referred  to  in  paragraph  A  above are to be
delivered  is as follows (if the name and address is the same as was inserted in
paragraph  A  above,  then  insert  "N/A"):


          --------------------------------------------------------
          Name


          --------------------------------------------------------
          Address


          --------------------------------------------------------
          City,  State                                   Zip  Code

          Attn:
          --------------------------------------------------------



The  Investor  has  signed  this  Agreement  as  of  the  ____ day of May, 2005.



-----------------------------------------
Signature  of  Investor



-----------------------------------------
Title  (if  applicable)


                                      -14-
<PAGE>
ACCEPTANCE

Signed  and  Accepted  this  ____  day  of  ________,  2005.

RAPIDTRON,  INC.

By:



-----------------------------------------
Authorized  Signatory


                                      -15-
<PAGE>
                           COMPANY DISCLOSURE SCHEDULE


                                      -16-
<PAGE>
                                    EXHIBIT A



                       FORM OF CONVERTIBLE PROMISSORY NOTE


                                      -17-
<PAGE>
                                    EXHIBIT B



                    FORM OF WARRANT TO PURCHASE COMMON STOCK


                                      -18-
<PAGE>
                                    EXHIBIT C



                           FORM OF SECURITY AGREEMENT


                                      -19-
<PAGE>
                                    EXHIBIT D



                 FORM OF AGREEMENT REGARDING REGISTRATION RIGHTS


                                      -20-