EXHIBIT 4.1



                          SECURITIES PURCHASE AGREEMENT

         THIS SECURITIES  PURCHASE AGREEMENT dated as of November 18, 2005 (this
"AGREEMENT"), by and among Summus, Inc., a Delaware corporation (the "COMPANY"),
and  each of the  purchasers  set  forth  on the  signature  pages  hereto  (the
"BUYERS");

         WHEREAS:

         A. The  Company  and the  Buyers  are  executing  and  delivering  this
Agreement in reliance upon the exemption from securities  registration  afforded
by Rule 506 under  Regulation D  ("REGULATION  D") as  promulgated by the United
States  Securities and Exchange  Commission (the "SEC") under the Securities Act
of 1933, as amended (the "1933 ACT");

         B. The  Company  has  authorized  the  issuance to the Buyers of (i) 6%
senior secured  debentures of the Company in the form attached hereto as EXHIBIT
"A," in the aggregate  principal  amount of Eight Million Dollars  ($8,000,000),
which  debentures are convertible  into shares of common stock,  par value $.001
per share of the Company (the "COMMON STOCK"), upon the terms and subject to the
limitations and conditions set forth in such Debentures (collectively,  together
with any debenture(s)  issued in replacement thereof or as a dividend thereon or
otherwise  with  respect  thereto  in  accordance  with the terms  thereof,  the
"DEBENTURES"),  (ii)  warrants,  in the form attached  hereto as EXHIBIT "B," to
purchase an aggregate of 2,000,000  units,  each unit consisting of one share of
Common Stock and a warrant to purchase 4/10 of one share of Common Stock (the "A
WARRANTS"),  (iii)  warrants,  in the form  attached  hereto as EXHIBIT  "C," to
purchase an aggregate of  1,355,932  shares of Common Stock (the "B  WARRANTS"),
and (iv)  warrants,  in the form attached  hereto as EXHIBIT "D," to purchase an
aggregate  of  1,355,932  shares of Common  Stock  (the "C-1  WARRANTS")  (the A
Warrants,  the B Warrants  and the C-1  Warrants  are  referred to  collectively
herein as the "WARRANTS");

         C. The Buyers  desire to purchase and the Company  desires to issue and
sell, upon the terms and conditions set forth in this Agreement,  the Debentures
and the  Warrants  for an  aggregate  purchase  price of Eight  Million  Dollars
($8,000,000);

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

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


<PAGE>

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

                                   ARTICLE I

                  PURCHASE AND SALE OF DEBENTURES AND WARRANTS

        SECTION 1.1 PURCHASE OF DEBENTURES AND WARRANTS. The Company shall issue
and sell to each  Buyer and each Buyer  severally  agrees to  purchase  from the
Company such principal amount of Debentures and number of A Warrants, B Warrants
and C-1 Warrants for the aggregate  purchase price (the "PURCHASE  PRICE") as is
set forth immediately below such Buyer's name on the signature pages hereto. The
aggregate principal amount of Debentures to be issued at the Closing (as defined
below) is Eight Million Dollars  ($8,000,000) and the aggregate number of shares
of Common Stock issuable pursuant to A Warrants,  B Warrants and C-1 Warrants to
be issued at the Closing is 2,800,000,  1,355,932 and  1,355,932,  respectively,
for an aggregate purchase price of Eight Million Dollars ($8,000,000).

        SECTION 1.2 FORM OF PAYMENT. On the Closing Date (as defined below), (i)
each Buyer shall pay the Purchase  Price for the  Debentures and the Warrants to
be issued and sold to it at the Closing (as defined  below) by wire  transfer of
immediately  available  funds to the Company in  accordance  with the  Company's
written wiring instructions, against delivery of the Debentures in the principal
amount  equal to the  Purchase  Price and the number of Warrants as is set forth
immediately below such Buyer's name on the signature pages hereto,  and (ii) the
Company  shall deliver such  Debentures  and Warrants duly executed on behalf of
the Company, to the Buyer, against delivery of such Purchase Price.

        SECTION 1.3 CLOSING DATE. Subject to the satisfaction (or waiver) of the
conditions  thereto  set  forth in  Article  V  below,  the date and time of the
issuance and sale of the Debentures and the Warrants  pursuant to this Agreement
(the "CLOSING DATE") shall be 12:00 noon,  Eastern Standard Time on November 18,
2005, or such other mutually  agreed upon time. The closing of the  transactions
contemplated by this Agreement (the  "CLOSING")  shall occur on the Closing Date
at the offices of Ballard  Spahr Andrews & Ingersoll,  LLP, 1735 Market  Street,
Philadelphia,  PA 19103,  or at such other  location  as may be agreed to be the
parties.

                                   ARTICLE II

                     BUYER'S REPRESENTATIONS AND WARRANTIES

         Each Buyer  severally (and not jointly)  represents and warrants to the
Company solely as to such Buyer that:

        SECTION 2.1  INVESTMENT  PURPOSE.  As of the date  hereof,  the Buyer is
purchasing  the  Debentures  and  the  shares  of  Common  Stock  issuable  upon
conversion thereof (the "CONVERSION  SHARES") and the Warrants and the shares of
Common  Stock  issuable  upon  exercise   thereof  (the  "WARRANT  SHARES"  and,
collectively with the Debentures,  the Warrants and the Conversion  Shares,  the
"SECURITIES") for its own account and not with a present view towards the public
sale or distribution  thereof,  except pursuant to sales  registered or exempted
from  registration  under



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<PAGE>

the 1933 Act; provided,  however, that by making the representations herein, the
Buyer  does not agree to hold any of the  Securities  for any  minimum  or other
specific term and reserves the right to dispose of the Securities at any time in
accordance  with or pursuant to a registration  statement or an exemption  under
the 1933 Act.

        SECTION 2.2  ACCREDITED  INVESTOR  STATUS.  The Buyer is an  "accredited
investor," as that term is defined in Rule 501(a) of Regulation D.

        SECTION  2.3  RELIANCE ON  EXEMPTIONS.  The Buyer  understands  that the
Securities are being offered and sold to it in reliance upon specific exemptions
from the registration requirements of United States federal and state securities
laws and that the  Company is relying  upon the truth and  accuracy  of, and the
Buyer's   compliance   with,  the   representations,   warranties,   agreements,
acknowledgments  and understandings of the Buyer as set forth herein in order to
determine the  availability  of such exemptions and the eligibility of the Buyer
to acquire the Securities.

        SECTION 2.4 INFORMATION.  The Buyer and its advisors,  if any, have been
furnished with all materials  relating to the business,  finances and operations
of the Company and materials  relating to the offer and sale of the  Securities,
which  have  been  requested  by the  Buyer or its  advisors.  The Buyer and its
advisors,  if any,  have been afforded the  opportunity  to ask questions of the
Company and have received what the Buyer believes to be satisfactory  answers to
any  such  inquiries.  Neither  such  inquiries  nor  any  other  due  diligence
investigation conducted by Buyer or any of its advisors or representatives shall
modify,  amend or affect Buyer's right to rely on the Company's  representations
and warranties  contained in Article III below.  The Buyer  understands that its
investment in the Securities involves a significant degree of risk.

        SECTION 2.5 GOVERNMENTAL  REVIEW.  The Buyer  understands that no United
States federal or state agency or any other  government or  governmental  agency
has passed upon or made any recommendation or endorsement of the Securities.

        SECTION 2.6 TRANSFER OR RESALE. The Buyer understands that (i) except as
provided in the Registration Rights Agreement,  the Securities have not been and
are not being  registered  under the 1933 Act or any applicable state securities
laws and may not be transferred unless (a) subsequently included in an effective
registration  statement  thereunder,  (b) the Buyer shall have  delivered to the
Company an opinion of counsel (which  opinion shall be reasonably  acceptable to
the Company) to the effect that the Securities to be sold or transferred  may be
sold or transferred pursuant to an exemption from such registration, (c) sold or
transferred to an "affiliate" (as defined in Rule 144 promulgated under the 1933
Act (or a successor  rule) ("RULE  144")) or (d) sold pursuant to Rule 144; (ii)
any sale of such  Securities  made in  reliance  on Rule 144 may be made only in
accordance  with  the  terms  of said  Rule  and  further,  if said  Rule is not
applicable,  any  resale of such  Securities  under  circumstances  in which the
seller  (or the  person  through  whom the sale is made)  may be deemed to be an
underwriter  (as that term is  defined in the 1933 Act) may  require  compliance
with some other exemption under the 1933 Act or the rules and regulations of the
SEC thereunder;  and (iii) neither the Company nor any other person is under any
obligation  to  register  such  Securities  under  the  1933  Act or  any  state
securities  laws or to comply  with the terms and  conditions  of any  exemption
thereunder  (in each  case,  other  than  pursuant  to the  Registration  Rights
Agreement).  Notwithstanding  the foregoing or anything else



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<PAGE>

contained herein to the contrary, the Securities may be pledged as collateral in
connection with a bona fide margin account or other lending arrangement.

        SECTION 2.7 LEGENDS.  The Buyer  understands that the Debentures and the
Warrants,  and until such time as the Conversion  Shares and Warrant Shares have
been registered  under the 1933 Act as contemplated by the  Registration  Rights
Agreement,  the  Conversion  Shares and Warrant  Shares,  may bear a restrictive
legend in  substantially  the following form (and a  stop-transfer  order may be
placed against transfer of the certificates for such Securities):

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

         The legend set forth above shall be removed and the Company shall issue
a certificate without such legend to the holder of any Security upon which it is
stamped,  if, unless otherwise required by applicable state securities laws, (a)
such Security is registered for sale under an effective  registration  statement
filed  under the 1933 Act,  or (b) such  holder  provides  the  Company  with an
opinion of counsel in form,  substance  and scope  reasonably  acceptable to the
Company,  to the effect that a public sale or transfer of such  Security  may be
made  without  registration  under  the 1933 Act and such  sale or  transfer  is
effected,  or (c) such holder  provides the Company with  reasonable  assurances
that such  Security  can be sold  pursuant  to Rule 144 under the 1933 Act (or a
successor rule thereto)  without any  restriction as to the number of Securities
acquired as of a particular  date that can then be  immediately  sold. The Buyer
agrees to sell all Securities,  including those  represented by a certificate(s)
from which the legend has been removed, in compliance with applicable prospectus
delivery requirements, if any.

        SECTION  2.8   AUTHORIZATION;   ENFORCEMENT.   This  Agreement  and  the
Registration  Rights Agreement have been duly and validly  authorized,  executed
and delivered on behalf of the Buyer and are valid and binding agreements of the
Buyer enforceable in accordance with their terms.

        SECTION 2.9 RESIDENCY. The Buyer has provided to the Company the name of
the jurisdiction of its residence.

                                  ARTICLE III

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

         The Company represents and warrants to each Buyer that:

SECTION  3.1  ORGANIZATION  AND  QUALIFICATION.  The  Company  and  each  of its
Subsidiaries  (as defined  below),  if any,  is a  corporation  duly  organized,
validly  existing and in good  standing  under the laws of the  jurisdiction  in
which it is incorporated, with full power and



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<PAGE>

authority  (corporate and other) to own,  lease,  use and operate its properties
and to carry on its business as and where now owned,  leased, used, operated and
conducted.  SCHEDULE  3.1 sets  forth a list of all of the  Subsidiaries  of the
Company and the jurisdiction in which each is incorporated. The Company and each
of its  Subsidiaries  is duly qualified as a foreign  corporation to do business
and is in good standing in every  jurisdiction  in which its ownership or use of
property or the nature of the business  conducted by it makes such qualification
necessary  except where the failure to be so qualified or in good standing would
not have a Material  Adverse  Effect.  "MATERIAL  ADVERSE EFFECT" shall mean any
material  adverse  effect  on  (i)  the  Purchased  Shares,   (ii)  the  assets,
liabilities, business, properties, operations, financial condition or results of
operations of the Company and its Subsidiaries (as defined below), if any, taken
as a whole, (iii) the transactions  contemplated  hereby or by the agreements or
instruments  to be entered into in connection  herewith or (iv) the authority or
the  ability of the  Company to perform its  obligations  under this  Agreement.
"SUBSIDIARIES" means any corporation or other organization, whether incorporated
or unincorporated, in which the Company owns, directly or indirectly, any equity
or other ownership interest and which would be a "Significant Subsidiary" of the
Company as defined under Rule 1-02(w) of Regulation  S-X  promulgated  under the
1933 Act.

        SECTION  3.2  AUTHORIZATION;   ENFORCEMENT.  (i)  The  Company  has  all
requisite  corporate  power  and  authority  to  enter  into  and  perform  this
Agreement,  the Registration  Rights Agreement,  the Debentures and the Warrants
and to consummate the transactions  contemplated hereby and thereby and to issue
the  Securities,  in  accordance  with the terms  hereof and  thereof,  (ii) the
execution and delivery of this Agreement, the Registration Rights Agreement, the
Debentures  and the  Warrants by the Company and the  consummation  by it of the
transactions contemplated hereby and thereby (including without limitation,  the
issuance  and  reservation  for  issuance of the  Conversion  Shares and Warrant
Shares) have been duly  authorized  by the  Company's  Board of Directors and no
further consent or authorization  of the Company,  its Board of Directors or its
stockholders  is  required,   (iii)  this  Agreement,  the  Registration  Rights
Agreement, the Debentures and the Warrants have been duly executed and delivered
by the Company, and (iv) this Agreement,  the Registration Rights Agreement, the
Debentures and the Warrants  constitute a legal, valid and binding obligation of
the Company enforceable against the Company in accordance with its terms, except
as such  enforceability  may be limited by  applicable  bankruptcy,  insolvency,
reorganization,  moratorium,  fraudulent  transfer,  liquidation or similar laws
relating to, or affecting  generally,  the enforcement of creditor's  rights and
remedies or by other equitable  principles of general  application  from time to
time in effect.

        SECTION  3.3  CAPITALIZATION.  As of the  date  hereof,  the  authorized
capital stock of the Company consists of (i) 185,000,000 shares of Common Stock,
of which 13,493,106 shares of Common Stock are issued and outstanding, 3,000,000
shares of Common Stock are reserved for issuance pursuant to the Company's stock
option  plans,  3,390,103  shares of  Common  Stock are  reserved  for  issuance
pursuant to securities exercisable for, or convertible into or exchangeable for,
shares of Common Stock,  18,368 shares of Common Stock are reserved for issuance
upon conversion of Series A Convertible  Preferred Stock, and 19,023,728  shares
have been  reserved  for  issuance  pursuant to this  Agreement  (including  the
Conversion Shares and the Warrant Shares issuable upon conversion or exercise of
or otherwise pursuant to the Debentures or the Warrants), subject to increase in
the event that  additional  Debentures and Warrants are sold pursuant to Section
4.15 hereof;  (ii) 10,000 shares of preferred  stock, par value $.001 per share,


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<PAGE>

of which 2,407  shares of Series A  Convertible  Preferred  Stock are issued and
outstanding.  All of such  outstanding  shares of  capital  stock  are,  or upon
issuance   will  be,   duly   authorized,   validly   issued,   fully  paid  and
non-assessable.  No  shares of  capital  stock of the  Company  are  subject  to
preemptive rights or any other similar rights of the stockholders of the Company
or any liens or  encumbrances  imposed  through the actions or failure to act of
the Company.  Except as disclosed in SCHEDULE 3.3, as of the  effective  date of
this Agreement, (i) there are no outstanding options, warrants, scrip, rights to
subscribe for, puts, calls, rights of first refusal, agreements, understandings,
claims or other commitments or rights of any character  whatsoever  relating to,
or  securities  or rights  convertible  into or  exchangeable  for any shares of
capital  stock of the Company or any of its  Subsidiaries,  or  arrangements  by
which the  Company or any of its  Subsidiaries  is or may become  bound to issue
additional  shares of capital  stock of the Company or any of its  Subsidiaries,
(ii) there are no agreements or  arrangements  under which the Company or any of
its  Subsidiaries  is  obligated  to  register  the  sale of any of its or their
securities  under the 1933 Act and (iii)  there  are no  anti-dilution  or price
adjustment provisions contained in any security issued by the Company (or in any
agreement  providing  rights to security  holders) that will be triggered by the
issuance of the  Securities.  The Company  has  furnished  to the Buyer true and
correct copies of the Company's Certificate of Incorporation as in effect on the
date hereof (the  "CERTIFICATE OF  INCORPORATION"),  the Company's By-laws as in
effect  on the date  hereof  (the  "BYLAWS"),  and the  terms of all  securities
convertible into or exercisable for Common Stock of the Company and the material
rights of the holders thereof in respect thereto.  The Company shall provide the
Buyer with a written update of this representation signed by the Company's Chief
Executive  Officer or Chief  Financial  Officer on behalf of the  Company on the
Closing Date.

        SECTION 3.4 ISSUANCE OF SHARES. The Conversion Shares and Warrant Shares
are duly  authorized  and, upon  issuance in  accordance  with the terms of this
Agreement  (including the issuance of the Conversion  Shares upon  conversion of
the  Debentures  and  the  Warrant  Shares  upon  exercise  of the  Warrants  in
accordance with their respective  terms) will be validly issued,  fully paid and
non-assessable,  and free from all taxes,  liens and charges with respect to the
issue  thereof and shall not be subject to  preemptive  rights or other  similar
rights of  stockholders of the Company.  The term Conversion  Shares and Warrant
Shares  includes  the shares of Common Stock  issuable  upon  conversion  of the
Debentures  or exercise of the  Warrants,  including  without  limitation,  such
additional  shares,  if any, as are issuable as a result of the events described
in  Articles  II.D.3  and  II.E  of  the  Debentures  and  Section  2(c)  of the
Registration Rights Agreement.

        SECTION 3.5  ACKNOWLEDGMENT  OF DILUTION.  The Company  understands  and
acknowledges  the  potentially  dilutive  effect to the  Common  Stock  upon the
issuance of the Securities.  The Company's directors and executive officers have
studied and fully  understand the nature of the securities being sold hereunder.
The Company further  acknowledges that its obligation to issue the Securities in
accordance with this Agreement is absolute and  unconditional  regardless of the
dilutive effect that such issuance may have on the ownership  interests of other
stockholders  of the Company.  Taking the foregoing into account,  the Company's
Board of Directors has determined, in its good faith business judgment, that the
issuance of the  Conversion  Shares and the  Warrant  Shares  hereunder  and the
consummation of the transactions contemplated hereby and thereby are in the best
interest of the Company and its stockholders.



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<PAGE>

        SECTION 3.6 NO CONFLICTS.  The  execution,  delivery and  performance of
this  Agreement,  the  Registration  Rights  Agreement,  the  Debentures and the
Warrants by the Company and the  consummation by the Company of the transactions
contemplated hereby (including, without limitation, the issuance and reservation
for issuance, as applicable, of the Debentures,  the Conversion Shares, Warrants
and Warrant  Shares) will not (i) conflict  with or result in a violation of any
provision  of the  Certificate  of  Incorporation  or Bylaws or (ii)  violate or
conflict  with,  or result  in a breach of any  provision  of, or  constitute  a
default (or an event  which with notice or lapse of time or both could  become a
default)  under,  or  give to  others  any  rights  of  termination,  amendment,
acceleration  or  cancellation  of, any  agreement,  indenture,  patent,  patent
license  or  instrument  to which the  Company or any of its  Subsidiaries  is a
party,  or (iii)  result in a violation  of any law,  rule,  regulation,  order,
judgment or decree (including  federal and state securities laws and regulations
and regulations of any self-regulatory organizations to which the Company or its
securities are subject)  applicable to the Company or any of its Subsidiaries or
by which any  property  or asset of the  Company or any of its  Subsidiaries  is
bound  or  affected   (except  for  such  conflicts,   defaults,   terminations,
amendments,   accelerations,   cancellations   and   violations  as  would  not,
individually or in the aggregate,  have a Material Adverse Effect).  Neither the
Company  nor any of its  Subsidiaries  is in  violation  of its  Certificate  of
Incorporation, By-laws or other organizational documents and neither the Company
nor any of its  Subsidiaries is in default (and no event has occurred which with
notice or lapse of time or both could put the Company or any of its Subsidiaries
in default) under, and neither the Company nor any of its Subsidiaries has taken
any action or failed to take any action  that would give to others any rights of
termination,   amendment,   acceleration  or  cancellation  of,  any  agreement,
indenture or  instrument  to which the Company or any of its  Subsidiaries  is a
party  or by  which  any  property  or  assets  of  the  Company  or  any of its
Subsidiaries  is bound or affected,  except for possible  defaults as would not,
individually or in the aggregate, have a Material Adverse Effect. The businesses
of the Company and its Subsidiaries,  if any, are not being conducted, and shall
not be conducted so long as a Buyer owns any of the Securities,  in violation of
any law,  ordinance or  regulation of any  governmental  entity the violation of
which would reasonably be expected to have a Material Adverse Effect.

        SECTION 3.7 NO CONSENTS.  Except as  specifically  contemplated  by this
Agreement and as required under the 1933 Act and any applicable state securities
laws, the Company is not required to obtain any consent,  authorization or order
of, or make any filing or  registration  with, any court,  governmental  agency,
regulatory  agency,  self  regulatory  organization or stock market or any third
party in order for it to  execute,  deliver  or perform  any of its  obligations
under this Agreement in accordance  with the terms hereof or thereof or to issue
and sell the Securities in accordance with the terms hereof. Except as disclosed
in SCHEDULE 3.7, all consents, authorizations, orders, filings and registrations
which the Company is required to obtain pursuant to the preceding  sentence have
been obtained or effected on or prior to the date hereof.  The Company is not in
violation of the listing  requirements  of the  Over-the-Counter  Bulletin Board
Market (the  "PRINCIPAL  EXCHANGE") and the Company is not aware of any event or
condition  that could  reasonably  be expected  to cause the Common  Stock to be
delisted by the Principal  Exchange in the foreseeable  future.  The Company and
its Subsidiaries are unaware of any facts or circumstances which might give rise
to any of the foregoing.

        SECTION 3.8 SEC DOCUMENTS;  FINANCIAL STATEMENTS. The Company has timely
filed all reports,  schedules, forms, statements and other documents required to
be  filed by it with



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<PAGE>

the SEC pursuant to the reporting requirements of the Securities Exchange Act of
1934, as amended (the  "EXCHANGE  ACT")(all of the foregoing  filed prior to the
date hereof and all  exhibits  included  therein and  financial  statements  and
schedules  thereto  and  documents  (other  than  exhibits  to  such  documents)
incorporated by reference  therein,  being  hereinafter  referred to as the "SEC
DOCUMENTS").  The Company has  delivered  or made  available  to the each of the
Buyers true and complete  copies of the SEC  Documents.  As of their  respective
dates, the SEC Documents complied in all material respects with the requirements
of the  Exchange  Act and  the  rules  and  regulations  of the SEC  promulgated
thereunder  applicable to the SEC Documents,  and none of the SEC Documents,  at
the time they were  filed with the SEC,  contained  any  untrue  statement  of a
material fact or omitted to state a material fact required to be stated  therein
or  necessary  in  order  to  make  the  statements  therein,  in  light  of the
circumstances under which they were made, not misleading. None of the statements
made in any such SEC  Documents  is,  or has been,  required  to be  amended  or
updated under applicable law (except for such statements as have been amended or
updated in subsequent filings prior to the date hereof).  As of their respective
dates,  the financial  statements  of the Company  included in the SEC Documents
complied  as to  form  in  all  material  respects  with  applicable  accounting
requirements  and the published  rules and  regulations  of the SEC with respect
thereto.  Such financial statements have been prepared in accordance with United
States generally accepted accounting  principles,  consistently applied,  during
the periods involved (except (i) as may be otherwise indicated in such financial
statements or the Debentures  thereto,  or (ii) in the case of unaudited interim
statements,  to the extent they may not include footnotes or may be condensed or
summary statements) and fairly present in all material respects the consolidated
financial  position of the Company and its  consolidated  Subsidiaries as of the
dates thereof and the  consolidated  results of their  operations and cash flows
for the periods then ended  (subject,  in the case of unaudited  statements,  to
normal  year-end  audit  adjustments).  Except  as set  forth  in the  financial
statements  of the  Company  included in the SEC  Documents,  the Company has no
liabilities, contingent or otherwise, other than (i) liabilities incurred in the
ordinary course of business subsequent to December 31, 2004 and (ii) obligations
under contracts and commitments  incurred in the ordinary course of business and
not required under generally accepted  accounting  principles to be reflected in
such financial  statements,  which,  individually  or in the aggregate,  are not
material to the financial condition or operating results of the Company.

        SECTION 3.9 ABSENCE OF CERTAIN  CHANGES.  Since December 31, 2004, there
has been no material adverse change and no material  adverse  development in the
assets, liabilities,  business, properties,  operations,  financial condition or
results of  operations  of the  Company or any of its  Subsidiaries  (other than
changes or  developments  which have been  disclosed in the SEC Documents  filed
since such date).

        SECTION 3.10 ABSENCE OF  LITIGATION.  There is no action,  suit,  claim,
proceeding,  inquiry  or  investigation  before or by any court,  public  board,
government  agency,  self-regulatory  organization  or body  pending  or, to the
knowledge  of the  Company  or any of its  Subsidiaries,  threatened  against or
affecting the Company or any of its Subsidiaries, or their officers or directors
in their capacity as such, that could have a Material  Adverse Effect.  SCHEDULE
3.10  contains  a  complete  list and  summary  description  of any  pending  or
threatened   proceeding   against  or  affecting  the  Company  or  any  of  its
Subsidiaries  which  could,  either  individually  or in the  aggregate,  have a
Material  Adverse Effect.  The Company and its  Subsidiaries  are unaware of any
facts or circumstances which might give rise to any of the foregoing.



                                       8
<PAGE>

        SECTION  3.11  PATENTS,  COPYRIGHTS,  ETC.  The  Company and each of its
Subsidiaries  owns or  possesses  the  requisite  licenses  or rights to use all
patents,  patent  applications,   patent  rights,  inventions,  know-how,  trade
secrets, trademarks, trademark applications, service marks, service names, trade
names and copyrights ("INTELLECTUAL PROPERTY") necessary to enable it to conduct
its business as now operated (and,  except as set forth in SCHEDULE 3.11 hereof,
to the best of the Company's knowledge, as presently contemplated to be operated
in the  future);  there is no claim or action by any  person  pertaining  to, or
proceeding pending, or to the Company's knowledge  threatened,  which challenges
the right of the Company or of a  Subsidiary  with  respect to any  Intellectual
Property  necessary to enable it to conduct its  business as now operated  (and,
except  as set  forth in  SCHEDULE  3.11  hereof,  to the best of the  Company's
knowledge,  as presently contemplated to be operated in the future); to the best
of the  Company's  knowledge,  the  Company's or its  Subsidiaries'  current and
intended  products,  services and processes do not infringe on any  Intellectual
Property or other  rights held by any person;  and the Company is unaware of any
facts or  circumstances  which  might  give  rise to any of the  foregoing.  The
Company and each of its Subsidiaries have taken reasonable  security measures to
protect the secrecy, confidentiality and value of their Intellectual Property.

        SECTION 3.12 NO MATERIALLY ADVERSE  CONTRACTS,  ETC. Neither the Company
nor any of its Subsidiaries is subject to any charter,  corporate or other legal
restriction,  or any judgment,  decree,  order,  rule or regulation which in the
judgment of the  Company's  officers  has or is expected in the future to have a
Material  Adverse Effect.  Neither the Company nor any of its  Subsidiaries is a
party to any  contract  or  agreement  which in the  judgment  of the  Company's
officers has or is expected to have a Material Adverse Effect.

        SECTION  3.13 TAX  STATUS.  Except as set forth on  SCHEDULE  3.13,  the
Company and each of its  Subsidiaries  has made or filed all federal,  state and
foreign income and all other tax returns,  reports and declarations  required by
any  jurisdiction to which it is subject (unless and only to the extent that the
Company  and each of its  Subsidiaries  has set  aside on its  books  provisions
reasonably  adequate for the payment of all unpaid and unreported taxes) and has
paid all taxes and other governmental  assessments and charges that are material
in  amount,  shown  or  determined  to be  due  on  such  returns,  reports  and
declarations,  except  those being  contested in good faith and has set aside on
its  books  provisions  reasonably  adequate  for the  payment  of all taxes for
periods subsequent to the periods to which such returns, reports or declarations
apply. There are no unpaid taxes in any material amount claimed to be due by the
taxing authority of any jurisdiction, and the officers of the Company know of no
basis for any such claim.  The Company has not executed a waiver with respect to
the statute of  limitations  relating to the  assessment  or  collection  of any
foreign, federal, state or local tax. Except as set forth on SCHEDULE 3.13, none
of the Company's tax returns is presently being audited by any taxing authority.

        SECTION 3.14 CERTAIN TRANSACTIONS.  Except as set forth on SCHEDULE 3.14
and as  otherwise  disclosed  in the SEC  Documents  and except for arm's length
transactions  pursuant  to which the  Company or any of its  Subsidiaries  makes
payments in the ordinary  course of business upon terms no less  favorable  than
the Company or any of its Subsidiaries could obtain from third parties and other
than the grant of stock options disclosed on SCHEDULE 3.3, none of the officers,
directors,  or employees of the Company is presently a party to any  transaction
with  the  Company  or any of its  Subsidiaries  (other  than  for  services  as
employees,  officers and directors),  including



                                       9
<PAGE>

any contract,  agreement or other  arrangement  providing for the  furnishing of
services to or by, providing for rental of real or personal property to or from,
or  otherwise  requiring  payments  to or from  any  officer,  director  or such
employee  or, to the  knowledge of the Company,  any  corporation,  partnership,
trust or other entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or partner.

        SECTION 3.15 DISCLOSURE.  All information  relating to or concerning the
Company or any of its  Subsidiaries  set forth in this Agreement and provided to
the Buyers in connection with the transactions  contemplated hereby, is true and
correct in all  material  respects  and the Company has not omitted to state any
material fact necessary in order to make the statements  made herein or therein,
in light of the circumstances  under which they were made, not misleading (other
than any information the Buyer has refused to accept).  No event or circumstance
has occurred or exists,  nor is the Company in  possession  of any  information,
with respect to the Company or any of its Subsidiaries or its or their business,
properties,  prospects,  operations or financial conditions,  which has not been
publicly  announced or disclosed but under  applicable  law, rule or regulation,
requires public  disclosure or  announcement  by the Company  (assuming for this
purpose  that the  Company's  reports  filed  under the  Exchange  Act are being
incorporated into an effective registration statement filed by the Company under
the 1933 Act).

        SECTION 3.16  ACKNOWLEDGMENT  REGARDING  BUYER'S PURCHASE OF SECURITIES.
The Company  acknowledges  and agrees  that the Buyers are acting  solely in the
capacity of an arm's length  purchaser  with respect to this  Agreement  and the
transactions  contemplated  hereby.  The Company further  acknowledges  that the
Buyers are not acting as a financial  advisor or fiduciary of the Company (or in
any  similar  capacity)  with  respect to this  Agreement  and the  transactions
contemplated  hereby and that any  statement  made by the Buyers or any of their
representatives or agents in connection with this Agreement and the transactions
contemplated  hereby is not advice or a recommendation  and is merely incidental
to the Buyers'  purchase of the  Securities  and has not been relied upon by the
Company, its officers or directors in any way. The Company further represents to
the Buyers that the  Company's  decision to enter into this  Agreement  has been
based   solely  on  the   independent   evaluation   of  the   Company  and  its
representatives.

        SECTION 3.17 NO INTEGRATED OFFERING.  Neither the Company nor any of its
affiliates  nor any  person  acting  on its or their  behalf,  has  directly  or
indirectly  made any offers or sales in any security or solicited  any offers to
buy any security under  circumstances that would require  registration under the
1933 Act of the issuance of the  Securities  to the Buyers.  The issuance of the
Securities to the Buyers will not be integrated  with any other  issuance of the
Company's  securities (past,  current or future) for purposes of any stockholder
approval  provisions  (under the rules of the  Principal  Exchange or otherwise)
applicable to the Company or its securities.

        SECTION  3.18 NO BROKERS.  The  Company has taken no action  which would
give rise to any claim by any person for brokerage commissions, finder's fees or
similar  payments  relating to this Agreement or the  transactions  contemplated
hereby.

        SECTION  3.19  PERMITS;   COMPLIANCE.   The  Company  and  each  of  its
Subsidiaries  is  in  possession  of  all  franchises,  grants,  authorizations,
licenses, permits, easements,  variances,  exemptions,  consents,  certificates,
approvals and orders  necessary to own,  lease and operate its properties and to
carry on its business as it is now being conducted  (collectively,  the "COMPANY


                                       10
<PAGE>

PERMITS")  except in such  instances  where the failure to possess  such Company
Permits would not,  either  individually  or in the  aggregate,  have a Material
Adverse  Effect,  and there is no action  pending  or, to the  knowledge  of the
Company,  threatened  regarding suspension or cancellation of any of the Company
Permits,  the suspension or cancellation of which would not, either individually
or in the aggregate, have a Material Adverse Effect. Neither the Company nor any
of its  Subsidiaries  is in conflict with, or in default or violation of, any of
the Company  Permits,  except for any such  conflicts,  defaults  or  violations
which,  individually  or in the  aggregate,  would not reasonably be expected to
have a Material Adverse Effect. Since December 31, 2004, neither the Company nor
any of its Subsidiaries  has received any notification  with respect to possible
conflicts,  defaults  or  violations  of  applicable  laws,  except for  notices
relating  to  possible  conflicts,  defaults  or  violations,  which  conflicts,
defaults or violations would not have a Material Adverse Effect.

        SECTION 3.20 ENVIRONMENTAL MATTERS.

               (a)  Except as set forth in  SCHEDULE  3.20,  there  are,  to the
Company's  knowledge,  with respect to the Company or any of its Subsidiaries or
any predecessor of the Company,  no past or present  violations of Environmental
Laws (as defined below), releases of any material into the environment, actions,
activities,   circumstances,   conditions,  events,  incidents,  or  contractual
obligations which may give rise to any common law environmental liability or any
liability  under the  Comprehensive  Environmental  Response,  Compensation  and
Liability  Act of 1980 or similar  federal,  state,  local or  foreign  laws and
neither the Company nor any of its  Subsidiaries  has  received  any notice with
respect to any of the foregoing,  nor is any action pending or, to the Company's
knowledge,  threatened  in  connection  with  any of  the  foregoing.  The  term
"ENVIRONMENTAL LAWS" means all federal, state, local or foreign laws relating to
pollution or protection of human health or the environment  (including,  without
limitation,  ambient air, surface water, groundwater, land surface or subsurface
strata), including, without limitation, laws relating to emissions,  discharges,
releases or threatened releases of chemicals,  pollutants contaminants, or toxic
or hazardous substances or wastes (collectively, "HAZARDOUS MATERIALS") into the
environment, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all  authorizations,  codes,  decrees,  demands  or  demand  letters,
injunctions,  judgments,  licenses,  notices or notice letters, orders, permits,
plans or regulations issued, entered, promulgated or approved thereunder.

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

               (c) There are no  underground  storage tanks on or under any real
property owned,  leased or used by the Company or any of its  Subsidiaries  that
are not in compliance with applicable law.



                                       11
<PAGE>

        SECTION 3.21 TITLE TO PROPERTY.  The Company and its  Subsidiaries  have
good and  marketable  title in fee  simple  to all  real  property  and good and
marketable title to all personal property owned by them which is material to the
business of the Company and its Subsidiaries, in each case free and clear of all
liens, encumbrances and defects except such as are described in SCHEDULE 3.21 or
such as  would  not have a  Material  Adverse  Effect.  Any  real  property  and
facilities held under lease by the Company and its Subsidiaries are held by them
under valid, subsisting and enforceable leases with such exceptions as would not
have a Material Adverse Effect.

        SECTION 3.22  INSURANCE.  The Company and each of its  Subsidiaries  are
insured by insurers of recognized financial  responsibility  against such losses
and risks and in such  amounts  as  management  of the  Company  believes  to be
prudent  and  customary  in  the   businesses  in  which  the  Company  and  its
Subsidiaries  are engaged.  Neither the Company nor any such  Subsidiary has any
reason  to  believe  that it will not be able to renew  its  existing  insurance
coverage as and when such coverage  expires or to obtain  similar  coverage from
similar  insurers as may be  necessary  to continue  its business at a cost that
would not have a Material Adverse Effect.

        SECTION 3.23 INTERNAL ACCOUNTING  CONTROLS.  The Company and each of its
Subsidiaries  maintain a system of internal accounting controls  sufficient,  in
the  judgment  of the  Company's  board  of  directors,  to  provide  reasonable
assurance that (i)  transactions  are executed in accordance  with  management's
general or specific authorizations,  (ii) transactions are recorded as necessary
to permit  preparation  of financial  statements  in conformity  with  generally
accepted  accounting  principles  and to maintain  asset  accountability,  (iii)
access to assets is permitted only in accordance  with  management's  general or
specific  authorization  and (iv) the  recorded  accountability  for  assets  is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.

        SECTION 3.24 FOREIGN CORRUPT PRACTICES.  Neither the Company, nor any of
its Subsidiaries,  nor any director,  officer,  agent,  employee or other person
acting on behalf of the  Company  or any  Subsidiary  has,  in the course of his
actions  for, or on behalf of, the  Company,  used any  corporate  funds for any
unlawful contribution,  gift,  entertainment or other unlawful expenses relating
to  political  activity;  made any direct or  indirect  unlawful  payment to any
foreign or  domestic  government  official  or employee  from  corporate  funds;
violated  or is in  violation  of any  provision  of the  U.S.  Foreign  Corrupt
Practices Act of 1977; or made any bribe,  rebate,  payoff,  influence  payment,
kickback  or other  unlawful  payment  to any  foreign  or  domestic  government
official or employee.

        SECTION 3.25 SOLVENCY.  The Company (both before and after giving effect
to the transactions contemplated by this Agreement) is solvent (i.e., its assets
have a fair market  value in excess of the amount  required to pay its  probable
liabilities on its existing debts as they become absolute and matured).

        SECTION  3.26 NO  INVESTMENT  COMPANY.  The Company is not, and upon the
issuance and sale of the Securities as  contemplated  by this Agreement will not
be, an  "investment  company"  required to be  registered  under the  Investment
Company Act of 1940 (an "INVESTMENT COMPANY").  The Company is not controlled by
an Investment Company.



                                       12
<PAGE>

        SECTION 3.27  SARBANES-OXLEY  ACT. The Company is in  compliance  in all
material respects with all applicable effective provisions of the Sarbanes-Oxley
Act and is actively  taking steps to ensure that it will be in  compliance  with
other applicable  provisions of the Sarbanes-Oxley Act upon the effectiveness of
such provisions.  There has been no failure on the part of the Company or any of
the Company's directors or officers, in their capacities as such, to comply with
any provision of the  Sarbanes-Oxley  Act of 2002 and the rules and  regulations
promulgated in connection therewith, including Section 402 related to loans.

        SECTION  3.28  DISCLOSURE  CONTROLS.  The  Company has  established  and
maintains  disclosure  controls and  procedures (as such term is defined in Rule
13a-15  under the Exchange  Act) which (i) are designed to ensure that  material
information  relating  to the Company is made known to the  Company's  principal
executive  officer and its  principal  financial  officer by others within those
entities, particularly during the periods in which the periodic reports required
under  the  Exchange  Act are  being  prepared,  and (ii) are  effective  in all
material respects to perform the functions for which they were established.

        SECTION 3.29 OFF-BALANCE SHEET TRANSACTIONS.  Except as described in the
Prospectus,  there are no material off-balance sheet transactions (as defined in
Regulation  S-K  Item  303(a)(4)(ii)),   arrangements,   obligations  (including
contingent obligations), or any other relationships with unconsolidated entities
or other  persons,  that may have a  material  current  or future  effect on the
Company's  financial  condition,  changes  in  financial  condition,  results of
operations,  liquidity, capital expenditures,  capital resources, or significant
components of revenues or expenses.

        SECTION 3.30 AUDIT COMMITTEE.  Except as set forth on SCHEDULE 3.30, the
Company's  board of directors  has validly  appointed an audit  committee  whose
composition  satisfies the  requirements  of Rule 4350(d)(2) of the Rules of the
National  Association  of  Securities  Dealers,  Inc. (the "NASD RULES") and the
board of directors or the audit  committee has adopted a charter that  satisfies
the requirements of Rule 4350(d)(1) of the NASD Rules.

        SECTION 3.31 MONEY LAUNDERING AND RELATED LAWS.

               (a) The  operations of the Company and its  subsidiaries  are and
have been conducted at all times in compliance with applicable  financial record
keeping and  reporting  requirements  of the Currency  and Foreign  Transactions
Reporting  Act of  1970,  as  amended,  the  money  laundering  statutes  of all
jurisdictions,  the rules and regulations  thereunder and any related or similar
rules,  regulations  or  guidelines,  issued,  administered  or  enforced by any
governmental agency  (collectively,  the "MONEY LAUNDERING LAWS") and no action,
suit or proceeding by or before any court or governmental  agency,  authority or
body or any  arbitrator  involving  the Company or any of it  subsidiaries  with
respect to the Money Laundering Laws is pending, or to the best knowledge of the
Company, threatened.

               (b) Neither the Company nor any of its  subsidiaries  nor, to the
knowledge of the Company, any director, officer, agent, employee or affiliate of
the  Company  or  any of its  subsidiaries  is  currently  subject  to any  U.S.
sanctions  administered  by the  Office of  Foreign  Assets  Control of the U.S.
Treasury  Department  ("OFAC");  and the Company will not directly or indirectly
use the  proceeds  of the  offering,  or  lend,  contribute  or  otherwise  make
available



                                       13
<PAGE>

such  proceeds  to any  subsidiary,  joint  venture  partner or other  person or
entity,  for the purpose of financing  the  activities  of any person  currently
subject to any U.S. sanctions administered by OFAC.

                                   ARTICLE IV

                                    COVENANTS

        SECTION 4.1 BEST  EFFORTS.  The parties  shall use their best efforts to
satisfy timely each of the conditions described in Article V of this Agreement.

        SECTION 4.2 FORM D; BLUE SKY LAWS.  The Company  agrees to file a Form D
with respect to the Securities as required  under  Regulation D and to provide a
copy thereof to each Buyer promptly after such filing.  The Company shall, on or
before the  Closing  Date,  take such  action as the  Company  shall  reasonably
determine  is necessary  to qualify the  Purchased  Shares for sale to the Buyer
pursuant to this Agreement under applicable securities or "blue sky" laws of the
states of the United States (or to obtain an exemption from such qualification),
and shall provide  evidence of any such action so taken to the Buyer on or prior
to the Closing Date.

        SECTION 4.3 REPORTING STATUS; FORM S-3 ELIGIBILITY. The Company's Common
Stock is  registered  under  Section  12(g) of the Exchange  Act. So long as the
Buyer beneficially owns any of the Securities, the Company shall timely file all
reports  required to be filed with the SEC pursuant to the Exchange Act, and the
Company  shall not  terminate  its status as an issuer  required to file reports
under the Exchange  Act even if the  Exchange  Act or the rules and  regulations
thereunder would permit such termination. Upon obtaining listing or quotation of
the Common  Stock on a  national  securities  exchange  or  automated  quotation
system,  the  Company  will take all  necessary  action to meet the  "registrant
eligibility"  requirements  set forth in the  general  instructions  to Form S-3
applicable to both "primary" and "resale" registrations on Form S-3.

        SECTION 4.4 DISCLOSURE OF TRANSACTION.  As soon as practicable after the
Closing  under  this  Agreement,  but in no event  later  than 9:30 a.m.  on the
Trading Day following the Closing under this  Agreement,  the Company shall file
with the SEC a Current  Report on Form 8-K  describing the material terms of the
transactions  contemplated  hereby  (and  attaching  as  exhibits  thereto  this
Agreement),  which press  release and Form 8-K shall be subject to prior  review
and reasonable comment by the Buyers.

        SECTION 4.5 EXPENSES.  The Company shall  reimburse Rock Hill Investment
Management,  L.P.  ("ROCK  HILL") for all expenses  incurred by it in connection
with the negotiation,  preparation,  execution, delivery and performance of this
Agreement  and the other  agreements  to be  executed  in  connection  herewith,
including the Registration  Rights  Agreement,  including,  without  limitation,
attorneys' and consultants' fees and expenses and travel expenses. The Company's
obligation  to reimburse  Rock Hill's  expenses  under this Section 4.5 shall be
limited to Fifty Thousand Dollars ($50,000).

        SECTION  4.6  FINANCIAL  INFORMATION.  The  Company  agrees  to send the
following reports to the Buyer until the Buyer transfers,  assigns, or sells all
of the  Securities:  (i) within one



                                       14
<PAGE>

(1) day after release, copies of all press releases issued by the Company or any
of its  Subsidiaries;  and (ii)  contemporaneously  with the making available or
giving  to the  stockholders  of the  Company,  copies of any  notices  or other
information the Company makes available or gives to such stockholders.

        SECTION 4.7  RESERVATION  OF SHARES.  On and after the Closing Date, the
Company  shall at all times have  authorized,  and  reserved  for the purpose of
issuance (including being free of any preemptive rights), a sufficient number of
shares of Common  Stock to provide  for the full  conversion  of the  Debentures
(based on the  lesser of the  Market  Price in effect  from time to time and the
Fixed Price in effect from time to time (each as defined in the  Debenture)) and
issuance of the Conversion Shares in connection  therewith and the full exercise
of the Warrants (based on the Exercise Price (as defined in the Warrants) of the
Warrants in effect from time to time) and the issuance of the Warrant  Shares in
connection therewith. The Company shall not reduce the number of shares reserved
for  issuance  upon  conversion  or  exercise  of or  otherwise  pursuant to the
Debentures and the Warrants  without the consent of the Buyer. The Company shall
use its best  efforts  at all times to  maintain  the number of shares of Common
Stock so reserved  for issuance at no less than two (2) times the number that is
then actually  issuable upon  conversion of the  Debentures  and exercise of the
Warrants.  If at any time the number of shares of Common  Stock  authorized  and
reserved  for  issuance  is below the number of  Conversion  Shares and  Warrant
Shares to be issued upon  conversion of or otherwise  pursuant to the Debentures
and exercise of or otherwise  pursuant to Debentures  and Warrants,  the Company
will  promptly take all  corporate  action  necessary to authorize and reserve a
sufficient number of shares,  including,  without limitation,  calling a special
meeting of  stockholders  to authorize  additional  shares to meet the Company's
obligations  under this  Section 4.7, in the case of an  insufficient  number of
authorized shares, and using its best efforts to obtain stockholder  approval of
an increase in such authorized number of shares.

        SECTION 4.8 LISTING.  The Company shall  promptly  secure the listing of
the Conversion  Shares and Warrant  Shares upon the Principal  Exchange and each
other national  securities  exchange or automated quotation system, if any, upon
which  shares of Common  Stock are then listed  (subject  to official  notice of
issuance)  and, so long as any of the Buyers owns any of the  Securities,  shall
maintain,  so long as any other shares of Common Stock shall be so listed,  such
listing of all Conversion  Shares and Warrant Shares  issuable  pursuant to this
Agreement  and the  Warrants.  The Company will obtain and, so long as the Buyer
owns any of the Securities, maintain the listing and trading of its Common Stock
on a Principal  Exchange,  and will comply in all  respects  with the  Company's
reporting,  filing  and  other  obligations  under  the  bylaws or rules of such
Principal  Exchange and any other  exchanges or automated  quotation  systems on
which the Common Stock is then listed. The Company shall promptly provide to the
Buyer  copies of any notices it receives  from the  Principal  Exchange  and any
other exchanges or automated quotation systems on which the Common Stock is then
listed  regarding the continued  eligibility  of the Common Stock for listing on
such exchanges and quotation systems.

        SECTION 4.9 NO  INTEGRATION.  The  Company  shall not make any offers or
sales of any security (other than the Securities) under circumstances that would
require registration of the Securities being offered or sold hereunder under the
1933 Act or cause the offering of  Securities  to be  integrated  with any other
offering  of  securities  by the  Company  for the  purpose  of any  stockholder
approval provision applicable to the Company or its securities.



                                       15
<PAGE>

        SECTION 4.10 USE OF PROCEEDS.  The Company  shall use the proceeds  from
the sale of the  Debentures and the Warrants in the manner set forth in SCHEDULE
4.10  attached  hereto  and  made a part  hereof  and  shall  not,  directly  or
indirectly,  use  such  proceeds  for any  loan to or  investment  in any  other
corporation,  partnership, enterprise or other person (except in connection with
its currently existing direct or indirect Subsidiaries).

        SECTION 4.11 DISCLOSURE OF MATERIAL  INFORMATION.  In the event that the
Company  comes into  possession  of any  material  non-public  information,  the
Company shall make full and complete  public  disclosure in accordance  with all
applicable securities laws (including all common law formulations thereof).

        SECTION 4.12 ADDITIONAL EQUITY CAPITAL; RIGHT OF FIRST REFUSAL.  Subject
to the exceptions  described  below,  the Company will not conduct any equity or
equity-linked  financing  (including  debt financing  with an equity  component)
("FUTURE  OFFERINGS")  until no Debentures remain  outstanding,  unless it shall
have first delivered to the Buyers, at least fifteen (15) business days prior to
the closing of such Future  Offering,  written  notice  describing  the proposed
Future  Offering,  including  the  terms and  conditions  thereof  and  proposed
definitive  documentation  to be  entered  into  in  connection  therewith,  and
providing the Buyers an option during the seven (7) trading day period following
delivery of such notice to purchase  up to  twenty-five  percent  (25%) for each
Buyer in the percentage  obtained by dividing the principal amount of Debentures
held by such Buyer by the total principal  amount of all Debentures held by each
Buyer  exercising  this option,  of the  securities  being offered in the Future
Offering  on the  same  terms  as  contemplated  by such  Future  Offering  (the
limitations  referred to in this  sentence are  collectively  referred to as the
"CAPITAL RAISING LIMITATIONS");  provided that any Buyer may exchange all or any
portion  of  the  Debentures  held  by  such  Buyer  as  consideration  for  its
participation in such Future Offering.  In the event the terms and conditions of
a proposed  Future  Offering  are amended in any respect  after  delivery of the
notice to the Buyers concerning the proposed Future Offering,  the Company shall
deliver a new notice to the Buyers  describing  the amended terms and conditions
of the proposed Future Offering and the Buyers  thereafter  shall have an option
during the seven (7) trading day period following delivery of such new notice to
purchase its pro rata share of the  twenty-five  percent (25%) of the securities
being offered in the Future  Offering on the same terms as  contemplated by such
proposed  Future  Offering,  as amended.  The foregoing  sentence shall apply to
successive  amendments  to the  terms  and  conditions  of any  proposed  Future
Offering and to multiple Future Offerings. The Capital Raising Limitations shall
not apply to (i) any  transaction  involving  issuances of  securities in a firm
commitment   underwritten  public  offering  (excluding  a  continuous  offering
pursuant  to Rule 415 under the 1933 Act) or (ii)  issuances  of  securities  as
consideration  for a merger,  consolidation or sale of assets,  or in connection
with any strategic partnership or joint venture (the primary purpose of which is
not  to  raise  equity  capital),  or in  connection  with  the  disposition  or
acquisition  of a  business,  product  or license by the  Company.  The  Capital
Raising  Limitations  also shall not apply to the  issuance of  securities  upon
exercise or conversion of the Company's  options,  warrants or other convertible
securities  outstanding  as of the date  hereof  or to the  grant of  additional
options  or  warrants,  or the  issuance  of  additional  securities,  under any
existing Company stock option or restricted stock plan approved by a majority of
the Company's disinterested directors.

        SECTION 4.13 CORPORATE  EXISTENCE.  So long as a Buyer beneficially owns
any Debentures or Warrants,  the Company shall maintain its corporate  existence
and shall not sell all



                                       16
<PAGE>

or substantially all of the Company's assets, except in the event of a merger or
consolidation or sale of all or substantially all of the Company's assets, where
the surviving or successor  entity in such transaction (i) assumes the Company's
obligations  hereunder and under the agreements and instruments  entered into in
connection herewith and (ii) is a publicly traded corporation whose Common Stock
is listed for trading on the OTCBB, Nasdaq, Nasdaq SmallCap, NYSE or AMEX.

        SECTION 4.14 NO  INTEGRATION.  The Company  shall not make any offers or
sales of any security (other than the Securities) under circumstances that would
require registration of the Securities being offered or sold hereunder under the
1933 Act or cause the offering of  Securities  to be  integrated  with any other
offering  of  securities  by the  Company  for the  purpose  of any  stockholder
approval provision applicable to the Company or its securities.

        SECTION  4.15  RELATED  PARTY  TRANSACTIONS.  Except  for  arm's  length
transactions  pursuant  to which the  Company or any of its  Subsidiaries  makes
payments in the ordinary  course of business upon terms no less  favorable  than
the Company or any of its Subsidiaries could obtain from third parties,  none of
the officers,  directors, or employees of the Company will become a party to any
transaction with the Company or any of its Subsidiaries (other than for services
as employees,  officers and  directors),  including  any contract,  agreement or
other  arrangement  providing for the furnishing of services to or by, providing
for rental of real or  personal  property  to or from,  or  otherwise  requiring
payments to or from any officer,  director or such employee or, to the knowledge
of the Company, any corporation, partnership, trust or other entity in which any
officer,  director,  or any such  employee has a  substantial  interest or is an
officer, director, trustee or partner.

        SECTION  4.16 EQUAL  TREATMENT  OF  BUYERS.  No  consideration  shall be
offered or paid to any person to amend or consent to a waiver or modification of
any  provision  of this  Agreement,  the  Debentures,  the  Registration  Rights
Agreement or the Warrants unless the same  consideration  also is offered to all
the  parties to this  Agreement  or the  Registration  Rights  Agreement  or the
holders of the Debentures or the Warrants, as the case may be. The Company shall
not  purchase  or redeem,  or offer to  purchase  or redeem,  from any Buyer any
Debentures,  Warrants or shares of Common Stock issuable upon  conversion of the
Debentures or exercise of the Warrants,  without  offering to purchase or redeem
Debentures,  Warrants  or Common  Stock  from all  Buyers on the same  terms and
conditions.

                                   ARTICLE V

                              CONDITIONS TO CLOSING

        SECTION 5.1  CONDITIONS  PRECEDENT TO THE  OBLIGATION  OF THE COMPANY TO
ISSUE AND SELL  DEBENTURES  AND THE WARRANTS.  The  obligation  hereunder of the
Company to issue and sell  Debentures  and Warrants to a Buyer is subject to the
satisfaction,  at or prior to the Closing  Date, of each of the  conditions  set
forth below  provided that these  conditions  are for the Company's sole benefit
and may be waived by the Company at any time in its sole discretion:

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



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

               (c) Accuracy of the Buyer's  Representation  and Warranties.  The
representations and warranties of the applicable Buyer shall be true and correct
in all material  respects as of the date when made and as of the Closing Date as
though  made at each  such  time  (except  for  representations  and  warranties
specifically made as of a particular date which shall be true and correct in all
material respects as of the date when made).

               (d)  Performance by the Buyer.  The  applicable  Buyer shall have
performed, satisfied and complied in all respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by applicable the Buyer at or prior to the Closing Date.

        SECTION  5.2  CONDITIONS  PRECEDENT  TO THE  OBLIGATION  OF THE BUYER TO
PURCHASE  DEBENTURES  AND  WARRANTS.  The  obligation of a Buyer to purchase the
Debentures and Warrants hereunder is subject to the satisfaction,  from the date
of the execution of this Agreement to the Closing Date, of each of the following
conditions  provided that these conditions are for such Buyer's sole benefit and
may be  waived  (in  whole or in part as to any  portion  of its  obligation  to
purchase  the  Securities  hereunder)  by such  Buyer  at any  time in its  sole
discretion:

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

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

               (c) Accuracy of the Company's Representations and Warranties. The
representations  and  warranties of the Company shall be true and correct in all
material  respects as of the date when made and as of the Closing Date as though
made at such time (except for representations  and warranties  specifically made
as of a particular date which shall be true and correct in all material respects
as of the date when  made).  The Buyer  shall  have  received a  certificate  or
certificates,  executed by the chief executive officer of the Company,  dated as
of the Closing Date, to the foregoing effect and as to such other matters as may
be  reasonably  requested  by  such  Buyer,  including,   but  not  limited  to,
certificates with respect to the Company's Certificate of Incorporation, By-laws
and Board of Directors'  resolutions  relating to the transactions  contemplated
hereby.

               (d) Performance by the Company. The Company shall have performed,
satisfied and complied in all material  respects with all covenants,  agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by the Company at or prior to such date.

               (e) No Injunction. No statute, rule, regulation, executive order,
decree,  ruling or injunction shall have been enacted,  entered,  promulgated or
endorsed by any court or governmental authority of competent jurisdiction or any
self-regulatory  organization  having  authority  over the matters  contemplated
hereby that prohibits or directly and adversely  affects



                                       17
<PAGE>

any of the transactions  contemplated by this Agreement, and no proceeding shall
have  been  commenced  that may have the  effect  of  prohibiting  or  adversely
affecting any of the transactions contemplated by this Agreement.

               (f) Material  Adverse  Changes.  Since the date hereof,  no event
that had or is reasonably  likely to have a Material  Adverse  Effect shall have
occurred.

               (g) No Suspension of Trading In or Delisting of Common Stock. The
trading  of the  Common  Stock  shall not have been  suspended  by the SEC,  the
Principal Exchange or the National  Association of Securities Dealers,  Inc. and
the Common Stock shall have been  approved for listing or quotation on and shall
not have been delisted from the Principal Exchange.

               (h) Market  Downturn.  None of the principal market indexes (such
as the Dow Jones  Industrial  Average and the Nasdaq  Composite  Index) shall be
down more that 3% from their close on the date of execution of this Agreement.

               (i) No Force  Majeure.  No event that occurs by causes beyond the
reasonable  control  of any of the  parties,  including  an act of God,  acts of
public enemies,  revolts,  acts of any civil or military authority (for national
emergency  or  acts  of  a  third  party),   disorderly   conduct,   rebellions,
revolutions,   civil  insurrections,   acts  of  terrorism,   strikes  or  other
disruptions  of industry,  shortage of labor or of materials,  fires,  floods or
other  natural  phenomena,  explosions,   structural  flaws,  break  of  cables,
vandalism,  and other  events of force  majeure  recognized  by  applicable  law
(collectively, "FORCE MAJEURE") shall occur.

               (j) Default.  No Event of Default (as defined in the  Debentures)
shall have occurred under the Debentures.

               (k)  Irrevocable  Transfer Agent  Instructions.  The  Irrevocable
Transfer  Agent  Instructions  (as defined in Article VI) in form and  substance
satisfactory to a majority-in-interest  of the Buyers, shall have been delivered
to and acknowledged in writing by the Company's Transfer Agent.

               (l) OTCBB Listing. The Conversion Shares and Warrant Shares shall
have been  authorized for quotation on the OTCBB and trading in the Common Stock
on the OTCBB shall not have been suspended by the SEC or the OTCBB.

               (m) Legal  Opinion.  The Buyer shall have  received an opinion or
opinions of the Company's counsel,  dated as of the Closing Date, in form, scope
and substance reasonably satisfactory to the Buyer and in substantially the same
form as EXHIBIT "F" attached hereto.

                                   ARTICLE VI

                           TRANSFER AGENT INSTRUCTIONS

         The Company shall issue irrevocable  instructions to its transfer agent
to issue certificates  registered in the name of each Buyer or its nominee,  for
the Conversion  Shares and Warrant Shares in such amounts as specified from time
to time by each  Buyer to the  Company  upon  conversion  of



                                       18
<PAGE>

the Debentures or exercise of the Warrants in accordance  with the terms thereof
(the "IRREVOCABLE  TRANSFER AGENT  INSTRUCTIONS").  Prior to registration of the
Conversion  Shares and Warrant Shares under the 1933 Act, all such  certificates
shall bear the  restrictive  legend  specified in Section 2.7 of this Agreement.
The Company  warrants that no instruction  other than the  Irrevocable  Transfer
Agent Instructions referred to in this Article VI and stop transfer instructions
to give effect to Section 2.6 hereof (in the case of the  Conversion  Shares and
Warrant  Shares,  prior to  registration  of the  Conversion  Shares and Warrant
Shares under the 1933 Act),  will be given by the Company to its transfer  agent
and that the Securities shall otherwise be freely  transferable on the books and
records of the Company as and to the extent  provided in this  Agreement and the
Registration  Rights Agreement.  Nothing in this Section shall affect in any way
the Buyer's  obligations and agreement set forth in Section 2.7 hereof to comply
with all applicable prospectus delivery requirements, if any, upon resale of the
Securities.  If a Buyer  provides  the  Company  with  an  opinion  of  counsel,
reasonably  satisfactory  to the  Company in form,  substance  and  scope,  that
registration  of a resale by such Buyer of any of the Securities is not required
under the 1933 Act, the Company shall permit the  transfer,  and, in the case of
the Conversion  Shares and Warrant Shares,  promptly instruct its transfer agent
to issue  one or more  certificates  in such name and in such  denominations  as
specified  by such Buyer.  The Company  acknowledges  that a breach by it of its
obligations  hereunder will cause  irreparable harm to the Buyers,  by vitiating
the intent and purpose of the transaction contemplated hereby. Accordingly,  the
Company  acknowledges  that the  remedy at law for a breach  of its  obligations
under this Article VI will be inadequate and agrees, in the event of a breach or
threatened  breach by the Company of the  provisions of this  Section,  that the
Buyers shall be entitled,  in addition to all other  available  remedies,  to an
injunction restraining any breach and requiring immediate transfer,  without the
necessity of showing  economic loss and without any bond or other security being
required.

                                  ARTICLE VII

                                  MISCELLANEOUS

        SECTION  7.1  GOVERNING  LAW.  This  Agreement  shall be governed by and
construed in  accordance  with the laws of the State of Delaware  applicable  to
agreements made and to be performed in the State of Delaware  (without regard to
principles  of  conflict  of laws).  Both  parties  irrevocably  consent  to the
exclusive  jurisdiction of the United States federal courts and the state courts
located in Delaware with respect to any suit or  proceeding  based on or arising
under this Agreement,  the agreements entered into in connection herewith or the
transactions  contemplated  hereby or  thereby  and  irrevocably  agree that all
claims in respect of such suit or  proceeding  may be determined in such courts.
Both  parties  irrevocably  waive the  defense of an  inconvenient  forum to the
maintenance of such suit or proceeding.  Both parties further agree that service
of  process  upon a party  mailed by first  class  mail shall be deemed in every
respect  effective  service  of  process  upon the  party  in any  such  suit or
proceeding. Nothing herein shall affect either party's right to serve process in
any  other  manner   permitted  by  law.   Both  parties   agree  that  a  final
non-appealable  judgment in any such suit or proceeding  shall be conclusive and
may be enforced in other  jurisdictions by suit on such judgment or in any other
lawful manner.  THE PARTIES HEREBY EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY OF
ANY CLAIM, DEMAND,  ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR IN
ANY WAY  CONNECTED  WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
WITH RESPECT TO THIS AGREEMENT, OR THE



                                       19
<PAGE>

TRANSACTIONS  RELATED  HERETO,  IN EACH CASE  WHETHER NOW  EXISTING OR HEREAFTER
ARISING,  AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE;  AND THE PARTIES
HEREBY AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND,  ACTION OR CAUSE OF ACTION
SHALL BE DECIDED BY COURT TRIAL  WITHOUT A JURY,  AND THAT EITHER PARTY MAY FILE
AN ORIGINAL  COUNTERPART  OR A COPY OF THIS  PARAGRAPH WITH ANY COURT AS WRITTEN
EVIDENCE OF THE  CONSENT OF THE OTHER PARTY  HERETO TO THE WAIVER OF THEIR RIGHT
TO TRIAL BY JURY.

        SECTION 7.2 NOTICES. Any notices required or permitted to be given under
the  terms of this  Agreement  shall be sent by  certified  or  registered  mail
(return receipt  requested) or delivered  personally or by courier  (including a
recognized  overnight  delivery  service) or by facsimile and shall be effective
five days after being  placed in the mail,  if mailed by regular  United  States
mail,  or upon  receipt,  if  delivered  personally  or by courier  (including a
recognized  overnight delivery service) or by facsimile,  in each case addressed
to a party. The addresses for such communications shall be:

                If to the Company:

                       Summus, Inc.
                       434 Fayetteville Street, Suite 600
                       Raleigh, North Carolina  27601
                       Attention:    Gary E. Ban, Chief Executive Officer
                       Telephone:    919-807-5611
                       Facsimile:    919-807-5601

                With copy to:

                       Summus, Inc.
                       434 Fayetteville Street, Suite 600
                       Raleigh, North Carolina  27601
                       Attention:    Donald T. Locke, CFO and General Counsel
                       Telephone:    919-807-5623
                       Facsimile:    919-807-5601

                If to any of the Buyers:

                       At  the  name  and   address  set  forth  on
                       Schedule A hereto, with a copy to counsel to
                       such  Buyer  as  set  forth  on  Schedule  A
                       hereto.

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

        SECTION 7.3 COUNTERPARTS; SIGNATURES BY FACSIMILE. This Agreement may be
executed in one or more  counterparts,  all of which 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. This Agreement, once executed by
a party, may be delivered to the other party hereto by facsimile transmission of
a copy of this Agreement  bearing the signature of the party so delivering  this
Agreement.



                                       20
<PAGE>

        SECTION 7.4 HEADINGS. The headings of this Agreement are for convenience
of reference and shall not form part of, or affect the  interpretation  of, this
Agreement.

        SECTION 7.5  SEVERABILITY.  If any provision of this Agreement  shall be
invalid   or   unenforceable   in   any   jurisdiction,   such   invalidity   or
unenforceability  shall  not  affect  the  validity  or  enforceability  of  the
remainder of this Agreement or the validity or  enforceability of this Agreement
in any other jurisdiction.

        SECTION  7.6  ENTIRE  AGREEMENT;  AMENDMENTS.  This  Agreement  and  the
Exhibits hereto contain the entire  agreement and  understanding  of the parties
with respect to the matters  covered  herein and therein and supersede all prior
and  contemporaneous  agreements,  negotiations and  understandings  between the
parties,  both oral and written relating to the subject matter hereof. The terms
and conditions of all Exhibits to this Agreement are incorporated herein by this
reference  and shall  constitute  part of this  Agreement  as if fully set forth
herein. No provision of this Agreement may be waived or amended other than by an
instrument  in writing  signed by the holders of a majority  of the  outstanding
principal  amount  of  the  Debentures  (or if  such  Debentures  are no  longer
outstanding, the holder of a majority of the then outstanding Warrants).

        SECTION 7.7 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the  benefit  of the  parties  and their  successors  and  assigns.
Neither the Company nor the Buyer shall  assign this  Agreement or any rights or
obligations   hereunder   without  the  prior  written  consent  of  the  other.
Notwithstanding  the  foregoing,  subject to Section 3, the Buyer may assign its
rights  hereunder to any of its  "affiliates," as that term is defined under the
Exchange Act, without the consent of the Company.

        SECTION 7.8 THIRD PARTY  BENEFICIARIES.  This  Agreement is intended for
the benefit of the parties hereto and their respective  permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.

        SECTION 7.9 SURVIVAL.  The representations and warranties of the Company
and the  agreements and covenants set forth herein shall survive the Closing and
the Closing  Date  hereunder  notwithstanding  any due  diligence  investigation
conducted by or on behalf of the Buyer.

        SECTION 7.10 PUBLICITY.  The Company and the Buyers shall have the right
to review a  reasonable  period of time before  issuance of any press  releases,
filings  with the SEC,  NASD or any  stock  exchange  or  interdealer  quotation
system,  or any  other  public  statements  with  respect  to  the  transactions
contemplated  hereby;  provided,  however,  that the Company  shall be entitled,
without the prior  approval of the Buyers,  to make any press  release or public
filings with respect to such  transactions  as is required by applicable law and
regulations (although the Buyers shall be consulted by the Company in connection
with any such press  release  or public  filing  prior to its  release or public
filing and shall be provided with a copy thereof and be given an  opportunity to
comment  thereon).  In  addition,  each  party  hereto  agrees  that it will not
disclose,  and will not include in any public filing or other announcement,  the
name of any Buyer, unless expressly agreed to in writing by such Buyer or unless
and until  such  disclosure  is, in the  reasonable



                                       21
<PAGE>

opinion of counsel to the Company, required by law or applicable regulation, and
then only to the extent of such requirement.

        SECTION 7.11  FURTHER  ASSURANCES.  Each party shall do and perform,  or
cause to be done and  performed,  all such  further  acts and things,  and shall
execute and deliver all such other  agreements,  certificates,  instruments  and
documents,  as the other party may reasonably  request in order to carry out the
intent and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

        SECTION 7.12 NO STRICT CONSTRUCTION. The language used in this Agreement
will be deemed to be the language  chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party.

        SECTION 7.13 REMEDIES.  The Company  acknowledges that a breach by it of
its obligations  hereunder will cause irreparable harm to the Buyer by vitiating
the intent and purpose of the transactions contemplated hereby. Accordingly, the
Company  acknowledges  that the  remedy at law for a breach  of its  obligations
under this Agreement will be inadequate and agrees,  in the event of a breach or
threatened breach by the Company of the provisions of this Agreement  (including
the  failure to deliver  unlegended,  freely  tradable  Purchased  Shares on the
Closing  Date),  that the Buyer  shall be  entitled,  in  addition  to all other
available  remedies in law or in equity,  to an  injunction  or  injunctions  to
prevent or cure any breaches of the  provisions of this Agreement and to enforce
specifically  the terms and provisions of this Agreement,  without the necessity
of showing economic loss and without any bond or other security being required.

        SECTION 7.14 INDEPENDENT NATURE OF BUYERS.

               (a) The Company  acknowledges  that the obligations of the Buyers
under this Agreement,  the Registration  Rights Agreement,  the Warrants and any
other document entered into in connection with this Agreement,  the Warrants and
the transactions  contemplated hereby and thereby (the "TRANSACTION  DOCUMENTS")
are several and not joint,  and no Buyer shall be responsible in any way for the
performance  of the  obligations  of  any  other  Buyer  under  the  Transaction
Documents. The decision of each of the Buyers to purchase Securities pursuant to
this Agreement has been made by each Buyer  independently of any other Buyer and
independently  of any information,  materials,  statements or opinions as to the
business,  affairs,  operations,  assets,  properties,  liabilities,  results of
operations, condition (financial or otherwise) or prospects of the Company or of
the Subsidiaries which may have made or given by any other Buyer or by any agent
or employee  of any other  Buyer and, as between the Buyers,  no Buyer or any of
its agents or employees  shall have any liability to any other Buyer relating to
or arising from any such  information,  materials,  statements or opinions.  The
Company  further   acknowledges   that  nothing  contained  in  the  Transaction
Documents,  and no action taken by the Buyers pursuant hereto or thereto,  shall
be deemed to constitute the Buyers as a  partnership,  an  association,  a joint
venture or any other kind of entity, or create a presumption that the Buyers are
in any way acting in concert or as a group with respect to such  obligations  or
the transactions  contemplated  hereby.  Each of the Buyers 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 Buyer to be joined as an additional  party
in any proceeding for such purpose.



                                       22
<PAGE>

               (b) The  Buyers  have been  represented  by their own  respective
separate  legal  counsel in their  review  and  negotiation  of the  Transaction
Documents. For reasons of administrative convenience only, at the request of the
Company, the Buyers and their respective counsel have chosen to communicate with
the Company  through Ballard Spahr Andrews & Ingersoll,  LLP,  counsel to one of
the Buyers.  Such  counsel does not  represent  any of the other Buyers and each
other  Buyer  has  retained  its  own  legal  counsel  in  connection  with  the
negotiation  and  review  of the  Transaction  Documents.  Also for  reasons  of
administrative  convenience  only, the Company has elected to provide the Buyers
with the  Transaction  Documents  for the  convenience  of the  Company  and not
because  it was  required  or  requested  to do so by the  Buyers.  The  Company
acknowledges that such procedure with respect to the Transaction Documents in no
way creates a presumption that the Buyers are in any way acting in concert or as
a  group  with  respect  to  the  Transaction   Documents  or  the  transactions
contemplated hereby or thereby.














                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


<PAGE>



         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by the undersigned, thereunto duly authorized, as of the date first set
forth above.


                                                SUMMUS, INC.



                                                By:  /s/ Gary E. Ban
                                                   -----------------------------
                                                    Gary E. Ban
                                                    Chief Executive Officer




RHP MASTER FUND, LTD.
By:  Rock Hill Investment Management, L.P.
By:  RHP General Partner, LLC


By:  /s/ Keith S. Marlowe
   ------------------------------
         Keith S. Marlowe
         Director


LAP SUMMUS HOLDINGS, LLC


By:  /s/ David J. Berkman
   ------------------------------
         David J. Berkman
         Managing Partner


<PAGE>

                                                             SCHEDULE A


<TABLE>
<CAPTION>
                                                                       PRINCIPAL
     BUYER'S NAME                         COUNSEL                       AMOUNT       NUMBER OF   NUMBER OF    NUMBER OF    PURCHASE
     AND ADDRESS                         TO BUYER                     OF DEBENTURES  A WARRANTS  B WARRANTS  C-1 WARRANTS   PRICE
     -----------                         --------                     -------------  ----------  ----------  ------------   -----

<S>                                                                    <C>           <C>          <C>          <C>        <C>
RHP Master Fund, Ltd.          Ballard Spahr Andrews & Ingersoll, LLP  $4,000,000    1,000,000    677,966      677,966    $4,000,000
c/o Rock Hill Investment       1735 Market Street
Management, L.P.               51st Floor
3 Bala Plaza - East,           Philadelphia, PA  19103
Suite 585                      Attention:  Gerald J. Guarcini, Esq.
Bala Cynwyd, PA  19004         Phone:  215-864-8625
Attention:  Keith S. Marlowe   Fax:  215-864-9181
Phone:  610-949-9700
Fax:  610-949-9600

LAP Summus Holdings, LLC       Dechert LLP                             $4,000,000    1,000,000    677,966      677,966    $4,000,000
c/o Liberty Associated         Cira Centre
Partners, L.P.                 2929 Arch Street
3 Bala Plaza - East,           Philadelphia, PA  19104-2808
Suite 502                      Attention:  henry N. Nassau, Esq.
Bala Cynwyd, PA  19004         Phone:  215-994-2138
Attention:  Scott G. Bruce     Fax:  215-994-2222
Phone:  610-660-4920
Fax:  610-660-4910

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