Document:

748221_2
                                                                   Exhibit 10.35

                            CONVERTIBLE NOTE PURCHASE

                                    AGREEMENT

                           DATED AS OF OCTOBER 4, 2001

                                      AMONG

                             PEN INTERCONNECT, INC.

                                       AND

                        THE PURCHASER LISTED ON EXHIBIT A

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                           TABLE OF CONTENTS (CONT'D)

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748221_2
                                TABLE OF CONTENTS

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ARTICLE  I            PURCHASE  AND  SALE  OF  NOTE                       3
     Section  1.1     Purchase  and  Sale  of  Note                       3
     Section  1.2     The  Conversion  Shares                             3
     Section  1.3     Purchase  Price  and  Closing                       3
     Section  1.4     Warrant                                             4

ARTICLE  II           REPRESENTATIONS  AND  WARRANTIES                    4
     Section  2.1     Representations  and  Warranties  of  the  Company  4
     Section  2.2     Representations and Warranties of the Purchaser    14

ARTICLE  III          COVENANTS                                          16
     Section  3.1     Securities  Compliance.                            16
     Section  3.2     Registration  and  Listing                         16
     Section  3.3     Inspection  Rights                                 16
     Section  3.4     Compliance  with  Laws                             16
     Section  3.5     Keeping  of  Records  and  Books  of  Account      17
     Section  3.6     Reporting  Requirements                            17
     Section  3.7     Amendments                                         17
     Section  3.8     Other  Agreements                                  17
     Section  3.9     Distributions.                                     17
     Section  3.10    Intentionally  Omitted.                            17
     Section  3.11    Regulation  S.                                     18
     Section  3.12    Future  Financings                                 18
     Section  3.13    Reservation  of  Shares                            18
     Section  3.14    Transfer  Agent  Instructions                      18

ARTICLE  IV           CONDITIONS                                         19
     Section  4.1     Conditions Precedent to the Obligation of the
                      Company  to  Sell  the  Note                       19

ARTICLE  V            REGISTRATION  RIGHTS                               21

ARTICLE  VI           CERTIFICATE  LEGEND                                21
     Section  6.1     Legend                                             21

ARTICLE  VII          TERMINATION                                        22
     Section  7.1     Termination  by  Mutual  Consent                   22
     Section  7.2     Other  Termination                                 22
     Section  7.3     Effect  of  Termination                            22

ARTICLE  VIII         INDEMNIFICATION                                    23
     Section  8.1     General  Indemnity                                 23
     Section  8.2     Indemnification  Procedure                         23

ARTICLE  IX           MISCELLANEOUS                                      24
     Section  9.1     Fees  and  Expenses                                24
     Section  9.2     Specific  Enforcement,  Consent  to  Jurisdiction. 24
     Section  9.3     Entire  Agreement;  Amendment                      25
     Section  9.4     Notices                                            25
     Section  9.5     Waivers                                            26
     Section  9.6     Headings                                           26
     Section  9.7     Successors  and  Assigns                           26
     Section  9.8     No  Third  Party  Beneficiaries                    26
     Section  9.9     Governing  Law                                     26
     Section  9.10     Survival                                          26
     Section  9.11     Counterparts                                      27
     Section  9.12     Publicity                                         27
     Section  9.13     Severability                                      27
     Section  9.14     Further  Assurances                               27

<PAGE>
                       CONVERTIBLE NOTE PURCHASE AGREEMENT

     This  CONVERTIBLE  NOTE PURCHASE AGREEMENT (the "Agreement") is dated as of
October  4,  2001 by and between Pen Interconnect, Inc., a Utah corporation (the
"Company"),  and the Purchaser of the Convertible Note of the Company whose name
is  set  forth  on  Exhibit  A  hereto  (the  "Purchaser").

     The  parties  hereto  agree  as  follows:

Purchase  and  Sale  of  Note

     -     Purchase  and Sale of Note.  Upon the following terms and conditions,
           --------------------------
the  Company  shall  issue  and  sell  to  the Purchaser and the Purchaser shall
purchase  from  the  Company, (i) a convertible promissory note in the aggregate
principal  amount  of $250,000 bearing interest at the rate of 8% per annum, due
October  4,  2004,  convertible  into  shares of the Company's Common Stock, par
value  $.01  per  share (the "Common Stock"), in substantially the form attached
hereto  as  Exhibit B (the "Note"), and (ii) a Warrant to purchase shares of the
Company's  Common  Stock, in substantially the form attached hereto as Exhibit C
(the  "Warrant").  The  purchase  price  for  the  Note and the Warrant shall be
$250,000  (the  "Purchase  Price").  The Company and the Purchaser are executing
and  delivering  this  Agreement  in  accordance  with  and in reliance upon the
exemption  from  securities  registration  afforded  by Rule 506 of Regulation D
("Regulation  D")  as  promulgated  by the United States Securities and Exchange
Commission  (the "Commission") under the Securities Act of 1933, as amended (the
"Securities  Act"),  Regulation  S  ("Regulation  S")  as  promulgated  by  the
Commission  under  the  Securities  Act,  or Section 4(2) of the Securities Act.

     -     The  Conversion Shares.  Immediately upon the filing of a Certificate
           ----------------------
of  Amendment  to  the  Company's  Certificate  of  Incorporation  with the Utah
Secretary  of  State  increasing its authorized capital stock, the Company shall
authorize,  reserve  and  maintain,  free of preemptive rights and other similar
contractual rights of stockholders, no less than 150% of the aggregate number of
shares  of Common Stock needed to effect the conversion of the Note at the Fixed
Conversion  Price  (as  defined  in  the  Note)  and  any  interest  accrued and
outstanding  thereon  and  exercise  of the Warrant.  Any shares of Common Stock
issuable  upon  conversion  of the Note and any interest accrued and outstanding
thereon  and  exercise  of  the Warrant (and such shares when issued) are herein
referred  to  as the "Conversion Shares" and the "Warrant Shares," respectively.
The  Note,  the  Conversion  Shares  and  the  Warrant  Shares  are  sometimes
collectively  referred  to  herein  as  the  "Shares."

     -     Purchase  Price and Closing.  The Company agrees to issue and sell to
           ---------------------------
the  Purchaser  and,  in  consideration  of  and  in  express  reliance upon the
representations,  warranties, covenants, terms and conditions of this Agreement,
the Purchaser agrees to purchase the Note set forth opposite its name on Exhibit
A  for a purchase price equal to $250,000.  The closing of the purchase and sale
of the Note and Warrant (the "Closing") to be acquired by the Purchaser from the
Company  under  this  Agreement  shall  take place at the offices of Naccarato &
Associates at 10:00 a.m. P.S.T. on the date on which the last to be fulfilled or
waived  of  the  conditions set forth in Article IV hereof and applicable to the
Closing  shall  be fulfilled or waived in accordance herewith or such other time
and  place  or on such date as the Purchaser and the Company may agree upon (the
"Closing  Date").  On  the  Closing  Date,  the  Company  shall  deliver  to the
Purchaser  the  Note and the Purchaser shall deliver to the Company the Purchase
Price.  In  addition,  each  party  shall deliver all documents, instruments and
writings required to be delivered by such party pursuant to this Agreement at or
prior  to  the  Closing.  This Agreement shall become effective upon the date of
execution  of  this Agreement by each of the parties hereto, which date shall be
no  later  than  October 15, 2001, unless otherwise agreed upon by the Purchaser
and  the  Company.

          Warrant.  The  Company  agrees  to issue to the Purchaser a Warrant to
          -------
purchase  8,055,853  shares  of  Common  Stock on the Closing Date.  The Warrant
shall  have  an  exercise  price  equal  to the Warrant Price (as defined in the
Warrant)  and shall expire on the fifth anniversary of the issuance date of such
Warrant.

Representations  and  Warranties

     -     Representations  and  Warranties  of the Company.  The Company hereby
           ------------------------------------------------
makes  the  following  representations  and  warranties  to  the  Purchaser:

     (a)     -Organization,  Good  Standing  and  Power.  The  Company  is  a
              -----------------------------------------
corporation  duly  incorporated, validly existing and in good standing under the
laws  of  the  State of Utah and has the requisite corporate power to own, lease
and  operate  its properties and assets and to conduct its business as it is now
being conducted.  The Company does not have any subsidiaries except as set forth
on  Schedule  2.1(g)  hereto.  The  Company  and  each  such  subsidiary is duly
    ----------------
qualified  as  a  foreign  corporation to do business and is in good standing in
   ----
every  jurisdiction  in  which  the nature of the business conducted or property
owned  by  it  makes such qualification necessary except for any jurisdiction(s)
(alone  or  in  the  aggregate) in which the failure to be so qualified will not
have  a  Material Adverse Effect.  For the purposes of this Agreement, "Material
Adverse  Effect"  means  any  adverse  effect  on  the  business,  operations,
properties, prospects, or financial condition of the Company or its subsidiaries
and which is material to such entity or other entities controlling or controlled
by  such  entity.

     (b)     -Authorization;  Enforcement.  The  Company  has  the  requisite
              ---------------------------
corporate  power  and  authority  to  enter into and perform this Agreement, the
Registration  Rights  Agreement  attached hereto as Exhibit D (the "Registration
Rights  Agreement"), the Transfer Agent Instructions (as defined in Section 3.14
hereof) and the Warrant (collectively, the "Transaction Documents") and to issue
and  sell  the  Shares  in  accordance with the terms hereof and the Warrant, as
applicable.  The  execution,  delivery  and  performance  of  the  Transaction
Documents  by  the  Company  and  the  consummation  by  it  of the transactions
contemplated  hereby  and  thereby  have been duly and validly authorized by all
necessary  corporate  action,  and  no  further  consent or authorization of the
Company  or  its Board of Directors or stockholders is required.  This Agreement
has  been  duly  executed and delivered by the Company.  The Registration Rights
Agreement  will have been duly executed and delivered by the Company at Closing.
Each of the Transaction Documents constitutes, or shall constitute when executed
and delivered, a 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,
liquidation,  conservatorship,  receivership  or  similar  laws  relating to, or
affecting  generally  the  enforcement  of, creditor's rights and remedies or by
other  equitable  principles  of  general  application.

     (c)     -Capitalization.  The  authorized  capital stock of the Company and
              --------------
the shares thereof currently issued and outstanding as of September 20, 2001 are
set  forth  on  Schedule  2.1(c)  hereto.  All  of the outstanding shares of the
                ----------------
Company's  Common  Stock  have  been duly and validly authorized.  Except as set
forth  in  this Agreement and the Registration Rights Agreement and as set forth
on  Schedule 2.1(c) hereto, no shares of Common Stock are entitled to preemptive
    ---------------
rights  or  registration  rights and there are no outstanding options, warrants,
scrip,  rights  to subscribe to, call or commitments of any character whatsoever
relating  to,  or  securities  or rights convertible into, any shares of capital
stock  of  the  Company.  Furthermore, except as set forth in this Agreement and
the Registration Rights Agreement and as set forth on Schedule 2.1(c), there are
                                                      ---------------
no  contracts, commitments, understandings, or arrangements by which the Company
is  or  may  become bound to issue additional shares of the capital stock of the
Company  or  options,  securities  or  rights convertible into shares of capital
stock  of  the Company.  Except for customary transfer restrictions contained in
agreements entered into by the Company in order to sell restricted securities or
as  provided  on  Schedule  2.1  (c)  hereto,  the Company is not a party to any
                  ------------------
agreement  granting  registration  or  anti-dilution  rights  to any person with
respect to any of its equity or debt securities.  The Company is not a party to,
and  it has no knowledge of, any agreement restricting the voting or transfer of
any shares of the capital stock of the Company.  Except as set forth on Schedule
                                                                        --------
2.1(c)  hereto, the offer and sale of all capital stock, convertible securities,
------
rights, warrants, or options of the Company issued prior to the Closing complied
with  all applicable Federal and state securities laws, and no stockholder has a
right  of rescission or damages with respect thereto which would have a Material
Adverse  Effect (as defined in Section 2.1(e) herein) on the Company's financial
condition  or operating results.  The Company has furnished or made available to
the  Purchaser  true  and  correct  copies  of  the  Company's  Certificate  of
Incorporation  as  in  effect  on  the  date hereof (the "Certificate"), and the
Company's  Bylaws  as  in  effect  on  the  date  hereof  (the  "Bylaws").

     (d)     -Issuance  of  Note.  The Note to be issued at the Closing has been
              ------------------
duly  authorized  by all necessary corporate action and, when paid for or issued
in  accordance  with  the  terms  hereof,  the  Note shall be validly issued and
outstanding,  fully  paid  and  nonassessable  and  free and clear of all liens,
encumbrances  and rights of refusal of any kind.  When the Conversion Shares and
the  Warrant  Shares are issued in accordance with the terms of the Note and the
Warrant,  respectively,  such  shares  will  be duly authorized by all necessary
corporate  action  and  validly  issued  and  outstanding,  fully  paid  and
nonassessable,  and  the  holders  shall be entitled to all rights accorded to a
holder  of  Common  Stock.

     (e)     -No  Conflicts.  The  execution,  delivery  and  performance of the
              -------------
Transaction  Documents by the Company and the consummation by the Company of the
transactions contemplated herein and therein do not (i) violate any provision of
the Company's Certificate or Bylaws, (ii) conflict with, or constitute a default
(or  an event which with notice or lapse of time or both would become a default)
under,  or  give to others any rights of termination, amendment, acceleration or
cancellation  of, any agreement, mortgage, deed of trust, indenture, note, bond,
license,  lease  agreement,  instrument  or obligation to which the Company is a
party,  (iii)  create or impose a lien, charge or encumbrance on any property of
the  Company  under  any  agreement  or any commitment to which the Company is a
party  or  by  which  the  Company  is  bound  or by which any of its respective
properties  or  assets  are bound, or (iv) result in a violation of any federal,
state,  local  or  foreign  statute, rule, regulation, order, judgment or decree
(including  Federal and state securities laws and regulations) applicable to the
Company  or  any  of  its  subsidiaries or by which any property or asset of the
Company  or  any of its subsidiaries are bound or affected, except, in all cases
other  than  violations  pursuant  to  clause  (i)  above,  for  such conflicts,
defaults,  terminations,  amendments, acceleration, cancellations and violations
as  would not, individually or in the aggregate, have a Material Adverse Effect.
The  business  of  the  Company  and  its subsidiaries is not being conducted in
violation  of  any  laws,  ordinances or regulations of any governmental entity,
except  for  possible violations which singularly or in the aggregate do not and
will  not  have  a  Material  Adverse Effect.  The Company is not required under
Federal,  state  or  local  law,  rule  or  regulation  to  obtain  any consent,
authorization or order of, or make any filing or registration with, any court or
governmental  agency  in  order for it to execute, deliver or perform any of its
obligations  under  the  Transaction  Documents  or issue and sell the Note, the
Conversion  Shares and the Warrant Shares in accordance with the terms hereof or
thereof  (other than any filings which may be required to be made by the Company
with the Commission or state securities administrators subsequent to the Closing
or  any  registration  statement  which  may be filed pursuant hereto); provided
that,  for  purposes of the representation made in this sentence, the Company is
assuming  and  relying  upon  the  accuracy  of the relevant representations and
agreements  of  the  Purchaser  herein.

     (f)     -Commission  Documents,  Financial Statements.  The Common Stock of
              --------------------------------------------
the  Company  is registered pursuant to Section 12(b) or 12(g) of the Securities
Exchange  Act  of  1934,  as  amended  (the "Exchange Act"), and the Company has
timely  filed  all  reports,  schedules,  forms,  statements and other documents
required  to  be  filed  by  it  with  the  Commission pursuant to the reporting
requirements  of  the Exchange Act, including material filed pursuant to Section
13(a)  or  15(d)  of  the  Exchange  Act (all of the foregoing including filings
incorporated  by  reference  therein being referred to herein as the "Commission
Documents").  The  Company has delivered or made available to the Purchaser true
and  complete copies of the Commission Documents filed with the Commission since
March  31,  2001.  The  Company  has  not provided to the Purchaser any material
non-public  information or other information which, according to applicable law,
rule or regulation, should have been disclosed publicly by the Company but which
has  not  been  so  disclosed,  other  than  with  respect  to  the transactions
contemplated  by  this  Agreement.  As  of  their  respective dates, the audited
financial statements as presented in the Commission Documents for the year ended
September  30, 2000 (the "Financial Statement") and the Form 10-Q for the fiscal
quarter  ended June 30, 2001 (the "Form 10-Q") complied in all material respects
with  the  requirements of the Exchange Act and the rules and regulations of the
Commission promulgated thereunder and other federal, state and local laws, rules
and regulations applicable to such documents, and, as of their respective dates,
neither  the  Financial  Statement nor the Form 10-Q referred to above 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.  The  financial statements of the Company included in the Commission
Documents  comply as to form in all material respects with applicable accounting
requirements  and the published rules and regulations of the Commission or other
applicable  rules  and  regulations  with  respect  thereto.  Such  financial
statements  have  been prepared in accordance with generally accepted accounting
principles  ("GAAP")  applied  on a consistent basis during the periods involved
(except  (i)  as  may be otherwise indicated in such financial statements or the
notes thereto or (ii) in the case of unaudited interim statements, to the extent
they  may  not include footnotes or may be condensed or summary statements), and
fairly  present  in  all material respects the financial position of the Company
and  its  subsidiaries as of the dates thereof and the results of operations and
cash  flows  for  the  periods  then  ended  (subject,  in the case of unaudited
statements,  to  normal  year-end  audit  adjustments).

     (g)     -Subsidiaries.  Schedule  2.1(g)  hereto sets forth each subsidiary
              ------------   ----------------
of  the  Company,  showing the jurisdiction of its incorporation or organization
and  showing  the percentage of each person's ownership of the outstanding stock
or  other  interests  of  such  subsidiary.  For the purposes of this Agreement,
"subsidiary"  shall  mean  any  corporation  or other entity of which at least a
majority  of  the  securities or other ownership interest having ordinary voting
power  (absolutely  or  contingently)  for  the  election  of directors or other
persons  performing  similar  functions  are  at  the  time  owned  directly  or
indirectly  by  the  Company  and/or  any of its other subsidiaries.  All of the
outstanding shares of capital stock of each subsidiary have been duly authorized
and  validly  issued,  and  are  fully  paid  and  nonassessable.  There  are no
outstanding  preemptive,  conversion  or  other  rights,  options,  warrants  or
agreements  granted or issued by or binding upon any subsidiary for the purchase
or  acquisition  of  any  shares of capital stock of any subsidiary or any other
securities  convertible  into,  exchangeable  for  or  evidencing  the rights to
subscribe  for  any  shares  of such capital stock.  Neither the Company nor any
subsidiary  is subject to any obligation (contingent or otherwise) to repurchase
or otherwise acquire or retire any shares of the capital stock of any subsidiary
or any convertible securities, rights, warrants or options of the type described
in  the preceding sentence.  Neither the Company nor any subsidiary is party to,
nor  has  any  knowledge of, any agreement restricting the voting or transfer of
any  shares  of  the  capital  stock  of  any  subsidiary.

     (h)     -No Material Adverse Change.  Since June 30, 2001, the date through
              --------------------------
which  the  most  recent  quarterly  report of the Company on Form 10-Q has been
prepared  and  filed  with  the  Commission,  a copy of which is included in the
Commission  Documents,  the Company has not experienced or suffered any Material
Adverse  Effect.

     (i)     -No  Undisclosed  Liabilities.  Neither  the Company nor any of its
              ----------------------------
subsidiaries  has  any  liabilities,  obligations,  claims  or  losses  (whether
liquidated  or unliquidated, secured or unsecured, absolute, accrued, contingent
or  otherwise) other than those incurred in the ordinary course of the Company's
or  its  subsidiaries  respective  businesses  since  March  31, 2001 and which,
individually  or  in  the aggregate, do not or would not have a Material Adverse
Effect  on  the  Company  or  its  subsidiaries.

     (j)     -No  Undisclosed Events or Circumstances.  No event or circumstance
              ---------------------------------------
has  occurred or exists with respect to the Company or its subsidiaries or their
respective businesses, properties, prospects, operations or financial condition,
which,  under  applicable law, rule or regulation, requires public disclosure or
announcement  by  the  Company  but  which has not been so publicly announced or
disclosed.

     (k)     -Indebtedness.  Schedule  2.1(k)  hereto  sets forth as of the date
              ------------   ----------------
hereof  all outstanding secured and unsecured Indebtedness of the Company or any
subsidiary, or for which the Company or any subsidiary has commitments.  For the
purposes  of  this  Agreement, "Indebtedness" shall mean (a) any liabilities for
borrowed  money  or amounts owed in excess of $75,000 (other than trade accounts
payable  incurred  in  the  ordinary  course  of  business), (b) all guaranties,
endorsements  and  other  contingent  obligations  in respect of Indebtedness of
others,  whether  or  not  the  same are or should be reflected in the Company's
balance  sheet  (or  the  notes  thereto),  except  guaranties by endorsement of
negotiable  instruments for deposit or collection or similar transactions in the
ordinary  course of business; and (c) the present value of any lease payments in
excess of $75,000 due under leases required to be capitalized in accordance with
GAAP.  Except  as  set  forth on Schedule 2.1(k) hereto, neither the Company nor
                                 ---------------
any  subsidiary  is  in  default  with  respect  to  any  Indebtedness.

     (l)     -Title  to  Assets.  Except as set forth on Schedule 2.1(k) hereto,
              -----------------                          ---------------
each of the Company and the subsidiaries has good and marketable title to all of
its  real and personal property, free of any mortgages, pledges, charges, liens,
security  interests  or  other  encumbrances,  except  for  those  such  that,
individually  or in the aggregate, do not cause a Material Adverse Effect on the
Company's  financial  condition  or  operating  results.  All said leases of the
Company  and each of its subsidiaries are valid and subsisting and in full force
and  effect.

     (m)     -Actions  Pending.  There  is no action, suit, claim, investigation
              ----------------
or  proceeding  pending  or, to the knowledge of the Company, threatened against
the  Company or any subsidiary which questions the validity of this Agreement or
the transactions contemplated hereby or any action taken or to be taken pursuant
hereto or thereto.  Except as set forth in the Commission Documents, there is no
action, suit, claim, investigation or proceeding pending or, to the knowledge of
the Company, threatened, against or involving the Company, any subsidiary or any
of  their  respective  properties  or  assets.  Except  as set forth on Schedule
                                                                        --------
2.1(m)  hereto,  there are no outstanding orders, judgments, injunctions, awards
     -
or  decrees  of any court, arbitrator or governmental or regulatory body against
the  Company  or  any  subsidiary or any officers or directors of the Company or
subsidiary  in  their  capacities  as  such  that  would, individually or in the
aggregate,  have  a  Material  Adverse  Effect.

     (n)     -Compliance  with  Law.  The  business  of  the  Company  and  the
              ---------------------
subsidiaries  has  been  and is presently being conducted in accordance with all
applicable  federal,  state  and local governmental laws, rules, regulations and
ordinances,  except  such that, individually or in the aggregate, do not cause a
Material  Adverse  Effect.  The  Company  and  each of its subsidiaries have all
franchises,  permits,  licenses,  consents  and other governmental or regulatory
authorizations  and  approvals  necessary for the conduct of its business as now
being  conducted  by  it unless the failure to possess such franchises, permits,
licenses,  consents  and  other  governmental  or  regulatory authorizations and
approvals, individually or in the aggregate, could not reasonably be expected to
have  a  Material  Adverse  Effect.

     (o)     -Taxes.  The  Company  and  each of the subsidiaries has accurately
              -----
prepared  and  filed all federal, state and other tax returns required by law to
be  filed  by it, has paid or made provisions for the payment of all taxes shown
to  be due and all additional assessments, and adequate provisions have been and
are  reflected  in  the financial statements of the Company and the subsidiaries
for  all  current taxes and other charges to which the Company or any subsidiary
is  subject  and  which  are not currently due and payable.  None of the federal
income  tax  returns  of  the Company or any subsidiary have been audited by the
Internal  Revenue  Service.  The  Company  has  no  knowledge  of any additional
assessments,  adjustments or contingent tax liability (whether federal or state)
pending  or threatened against the Company or any subsidiary for any period, nor
of  any  basis  for  any  such  assessment,  adjustment  or  contingency.

     (p)     -Certain  Fees.  Except  as set forth on Schedule 2.1(p) hereto, no
              -------------                           ---------------
brokers,  finders  or  financial advisory fees or commissions will be payable by
the  Company or any subsidiary or any Purchaser with respect to the transactions
contemplated  by  this  Agreement.

     (q)     -Disclosure.  To  the best of the Company's knowledge, neither this
              ----------
Agreement  or  the  Schedules  hereto  nor  any other documents, certificates or
instruments  furnished  to  the  Purchaser by or on behalf of the Company or any
subsidiary  in  connection  with the transactions contemplated by this Agreement
contain any untrue statement of a material fact or omit to state a material fact
necessary  in  order to make the statements made herein or therein, in the light
of  the  circumstances  under  which  they  were  made  herein  or  therein, not
misleading.

     (r)     -Operation  of  Business.  The Company and each of the subsidiaries
              -----------------------
owns  or  possesses  all  patents,  trademarks,  domain  names  (whether  or not
registered)  and  any  patentable improvements or copyrightable derivative works
thereof,  websites  and  intellectual  property rights relating thereto, service
marks,  trade names, copyrights, licenses and authorizations and all rights with
respect to the foregoing, which are necessary for the conduct of its business as
now  conducted  without  any  conflict  with  the  rights  of  others.

     (s)     -Environmental  Compliance.  The  Company  and  each  of  its
              -------------------------
subsidiaries  have obtained all material approvals, authorization, certificates,
consents,  licenses,  orders  and permits or other similar authorizations of all
governmental  authorities, or from any other person, that are required under any
Environmental Laws.  No material permits, licenses and other authorizations have
been  issued  under  any  Environmental Laws to the Company or its subsidiaries.
"Environmental  Laws"  shall mean all applicable laws relating to the protection
of the environment including, without limitation, all requirements pertaining to
reporting,  licensing,  permitting,  controlling,  investigating  or remediating
emissions,  discharges, releases or threatened releases of hazardous substances,
chemical  substances, pollutants, contaminants or toxic substances, materials or
wastes, whether solid, liquid or gaseous in nature, into the air, surface water,
groundwater  or  land, or relating to the manufacture, processing, distribution,
use,  treatment,  storage,  disposal,  transport  or  handling  of  hazardous
substances,  chemical  substances, pollutants, contaminants or toxic substances,
material or wastes, whether solid, liquid or gaseous in nature.  The Company has
all  necessary  governmental approvals required under all Environmental Laws and
used in its business or in the business of any of its subsidiaries.  The Company
and  each of its subsidiaries are also in compliance with all other limitations,
restrictions,  conditions,  standards,  requirements,  schedules  and timetables
required  or imposed under all Environmental Laws.  Except for such instances as
would not individually or in the aggregate have a Material Adverse Effect, there
are  no past or present events, conditions, circumstances, incidents, actions or
omissions  relating  to  or in any way affecting the Company or its subsidiaries
that  violate or may violate any Environmental Law after the Closing or that may
give  rise  to  any  environmental liability, or otherwise form the basis of any
claim,  action,  demand,  suit,  proceeding, hearing, study or investigation (i)
under  any  Environmental  Law,  or (ii) based on or related to the manufacture,
processing,  distribution, use, treatment, storage (including without limitation
underground  storage  tanks),  disposal, transport or handling, or the emission,
discharge,  release  or  threatened  release  of  any  hazardous  substance.
"Environmental  Liabilities"  means  all  liabilities  of a person (whether such
liabilities  are  owed by such person to governmental authorities, third parties
or  otherwise)  whether  currently in existence or arising hereafter which arise
under  or  relate  to  any  Environmental  Law.

     (t)     -Books  and  Records Internal Accounting Controls.  The records and
              ------------------------------------------------
documents of the Company and its subsidiaries accurately reflect in all material
respects  the  information  relating  to  the  business  of  the Company and the
subsidiaries, the location and collection of their assets, and the nature of all
transactions  giving  rise  to  the  obligations  or  accounts receivable of the
Company  or any subsidiary.  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 actions is taken
with  respect  to  any  differences.

     (u)     -Material  Agreements.  Except  as  set  forth  on  Schedule 2.1(u)
              --------------------                               ---------------
hereto, neither the Company nor any subsidiary is a party to any written or oral
contract,  instrument, agreement, commitment, obligation, plan or arrangement, a
copy of which would be required to be filed with the Commission as an exhibit to
a registration statement on Form S-1 or applicable form (collectively, "Material
Agreements")  if the Company or any subsidiary were registering securities under
the  Securities  Act.  The  Company  and  each  of  its  subsidiaries has in all
material respects performed all the obligations required to be performed by them
to  date under the foregoing agreements, have received no notice of default and,
to  the  best  of  the Company's knowledge are not in default under any Material
Agreement  now  in  effect,  the  result of which could cause a Material Adverse
Effect.  No  written  or  oral  contract,  instrument,  agreement,  commitment,
obligation,  plan  or  arrangement of the Company or of any subsidiary limits or
shall limit the payment of dividends on the Company's Note, its preferred stock,
if  any,  or  its  Common  Stock.

     (v)     -Transactions  with  Affiliates.  Except  as  set  forth  in  the
              ------------------------------
Commission  Documents  and  as set forth on Schedule 2.1(v) hereto, there are no
                                            ---------------
loans,  leases,  agreements, contracts, royalty agreements, management contracts
or  arrangements or other continuing transactions exceeding $100,000 between (a)
the Company, any subsidiary or any of their respective customers or suppliers on
the  one  hand,  and (b) on the other hand, any officer, employee, consultant or
director  of  the  Company, or any of its subsidiaries, or any person owning any
capital  stock  of  the Company or any subsidiary or any member of the immediate
family  of  such  officer,  employee, consultant, director or stockholder or any
corporation  or  other  entity controlled by such officer, employee, consultant,
director  or  stockholder,  or a member of the immediate family of such officer,
employee,  consultant,  director  or  stockholder.

     (w)     -Securities  Act of 1933.  The Company has complied and will comply
              -----------------------
with  all  applicable  Federal  and state securities laws in connection with the
offer,  issuance  and  sale  of the Note and the Warrant hereunder.  Neither the
Company  nor  anyone  acting  on its behalf, directly or indirectly, has or will
sell,  offer  to  sell or solicit offers to buy the Note, the Warrant or similar
securities  to,  or  solicit offers with respect thereto from, or enter into any
preliminary  conversations or negotiations relating thereto with, any person, or
has  taken  or  will take any action so as to bring the issuance and sale of the
Note and the Warrant under the registration provisions of the Securities Act and
applicable  state  securities  laws.  Neither  the  Company  nor  any  of  its
affiliates,  nor  any  person  acting on its or their behalf, has engaged in any
form  of  general  solicitation  or  general  advertising (within the meaning of
Regulation  D  under the Securities Act) in connection with the offer or sale of
the  Note  and  the  Warrant.

     (x)     -Governmental Approvals.  Except for the filing of any notice prior
              ----------------------
or  subsequent to the Closing that may be required under applicable state and/or
Federal  securities  laws (which if required, shall be filed on a timely basis),
including  the  filing of a registration statement or statements pursuant to the
Registration  Rights  Agreement,  no  authorization, consent, approval, license,
exemption  of, filing or registration with any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, is or
will  be  necessary for, or in connection with, the execution or delivery of the
Note,  or  for  the  performance  by  the  Company  of its obligations under the
Transaction  Documents.

     (y)     -Employees.  Neither  the  Company  nor  any  subsidiary  has  any
              ---------
collective  bargaining arrangements or agreements covering any of its employees.
Neither  the  Company  nor any subsidiary has any employment contract, agreement
regarding  proprietary  information, non-competition agreement, non-solicitation
agreement,  confidentiality  agreement,  or  any  other  similar  contract  or
restrictive  covenant,  relating  to  the  right  of  any  officer,  employee or
consultant  to  be employed or engaged by the Company or such subsidiary.  Since
March  31,  2001,  no  officer, consultant or key employee of the Company or any
subsidiary  whose  termination,  either  individually or in the aggregate, could
have  a  Material  Adverse  Effect,  has  terminated or, to the knowledge of the
Company,  has  any  present  intention  of  terminating his or her employment or
engagement  with  the  Company  or  any  subsidiary.

     (z)     -Absence  of Certain Developments.  Except as set forth on Schedule
              --------------------------------                          --------
2.1(z)  hereto, since June 30, 2001, neither the Company nor any subsidiary has:
------

       (i)     issued any stock,  bonds  or  other  corporate  securities or any
rights,  options  or  warrants  with  respect  thereto;

       (ii)     borrowed any  amount or  incurred  or  become  subject  to  any
liabilities  (absolute or contingent) except current liabilities incurred in the
ordinary  course  of  business  which are comparable in nature and amount to the
current  liabilities  incurred  in  the  ordinary  course of business during the
comparable  portion of its prior fiscal year, as adjusted to reflect the current
nature  and  volume  of  the  Company's  or  such  subsidiary's  business;

       (iii)    discharged or satisfied any material lien or encumbrance or paid
any  material  obligation  or  liability  (absolute  or  contingent), other than
current  liabilities  paid  in  the  ordinary  course  of  business;

       (iv)     declared or made  any  payment  or distribution of cash or other
property to stockholders with respect to its stock, or purchased or redeemed, or
made  any  agreements so to purchase or redeem, any shares of its capital stock;

       (v)     sold, assigned or  transferred  any  other  tangible  assets,  or
canceled  any  material  debts  or  claims,  except  in  the  ordinary course of
business;

       (vi)   sold, assigned or transferred any patent rights, trademarks, trade
names,  copyrights,  trade  secrets  or  other intangible assets or intellectual
property  rights,  or  disclosed any proprietary confidential information to any
person  except  to  customers  in  the  ordinary  course  of  business or to the
Purchaser  or  its  representatives;

       (vii)    suffered any substantial losses or waived any rights of material
value,  whether  or not in the ordinary course of business, or suffered the loss
of  any  material  amount  of  prospective  business;

       (viii)   made any changes in employee compensation except in the ordinary
course  of  business  and  consistent  with  past  practices;

       (ix)     made capital expenditures or commitments therefor that aggregate
in  excess  of  $100,000;

       (x)     entered into any  other  transaction  other  than in the ordinary
course  of  business, or entered into any other material transaction, whether or
not  in  the  ordinary  course  of  business;

       (xi)     made charitable contributions  or  pledges in excess of $25,000;

      (xii)     suffered any material  damage,  destruction  or  casualty loss,
whether  or  not  covered  by  insurance;

       (xiii)     experienced any  material problems with labor or management in
connection  with  the  terms  and  conditions  of  their  employment;

       (xiv)     effected any  two or more events of the foregoing kind which in
the  aggregate  would  be  material  to  the  Company  or  its  subsidiaries; or

       (xv)     entered into an  agreement, written or otherwise, to take any of
the  foregoing  actions.

      aa)     -Use  of Proceeds.  The proceeds from the sale of the Note will be
              ----------------
used  by  the  Company  for  working  capital  and  general  corporate purposes.

     (ab)     Public  Utility  Holding  Company  Act  and Investment Company Act
              ------------------------------------------------------------------
Status.  The Company is not a "holding company" or a "public utility company" as
    --
such  terms  are  defined  in the Public Utility Holding Company Act of 1935, as
amended.  The  Company  is  not, and as a result of and immediately upon Closing
will not be, an "investment company" or a company "controlled" by an "investment
company,"  within the meaning of the Investment Company Act of 1940, as amended.

     (ac)     ERISA.  No  liability  to the Pension Benefit Guaranty Corporation
              -----
has  been  incurred  with  respect  to  any  Plan  by  the Company or any of its
subsidiaries  which  is  or  would  be materially adverse to the Company and its
subsidiaries.  The  execution  and  delivery of this Agreement and the issue and
sale  of  the  Note  will  not  involve  any transaction which is subject to the
prohibitions  of Section 406 of ERISA or in connection with which a tax could be
imposed  pursuant  to  Section  4975  of  the  Internal Revenue Code of 1986, as
amended,  provided  that,  if the Purchaser, or any person or entity that owns a
beneficial  interest  in  the  Purchaser,  is an "employee pension benefit plan"
(within  the meaning of Section 3(2) of ERISA) with respect to which the Company
is  a  "party  in  interest" (within the meaning of Section 3(14) of ERISA), the
requirements  of Sections 407(d)(5) and 408(e) of ERISA, if applicable, are met.
As used in this Section 2.1(ac), the term "Plan" shall mean an "employee pension
benefit  plan"  (as  defined  in  Section  3  of  ERISA)  which  is  or has been
established  or  maintained, or to which contributions are or have been made, by
the  Company  or  any  subsidiary  or  by  any trade or business, whether or not
incorporated,  which,  together  with  the  Company  or any subsidiary, is under
common  control,  as  described  in  Section  414(b)  or  (c)  of  the  Code.

     (ad)     Dilutive  Effect.  The  Company  understands and acknowledges that
              ----------------
the  number  of  Conversion  Shares issuable upon conversion of the Note and the
Warrant  Shares  issuable  upon exercise of the Warrant will increase in certain
circumstances.  The  Company  further  acknowledges that its obligation to issue
Conversion  Shares upon conversion of the Note in accordance with this Agreement
and its obligations to issue the Warrant Shares upon the exercise of the Warrant
in  accordance  with  this Agreement and the Warrant, is, in each case, absolute
and  unconditional regardless of the dilutive effect that such issuance may have
on  the  ownership  interest  of  other  stockholders  of  the  Company.

     (ae)   No "Directed Selling Efforts." In connection with the offer and sale
              --------------------------------
of  the  Note  and  the  Warrant, no distributor or any affiliates or any person
acting  on  behalf  of  the  Company  or  any  affiliate  of  the Company or any
distributor  has  engaged  in  any  "directed  selling efforts" (as such term is
defined  under  Regulation S) nor conducted any general solicitation relating to
the  offer to persons residing within the United States or to "U.S. Persons" (as
that  term  is  defined  under  Regulation  S).

     (af)  Filings Under the Act and the Exchange Act. The Company has filed all
          -------------------------------------------
reports  and  other  documents  required to be filed by it under the Act and the
Exchange  Act,  and  no  such  document, at the time it was filed, contained any
untrue  statement  of  a  material  fact  or  omitted  to  state a material fact
necessary  to  make  the  statements  contained  therein,  in  the  light of the
circumstances  under  which  they  were made, not misleading.  There has been no
material  change in the Company since its last filing with the Commission except
for  changes  in  senior  management.  The  Company  is  a "reporting issuer" as
defined  in  Rule  902 of Regulation S and will remain a reporting issuer for at
least  one  year  from  the  date  hereof.

Representations and Warranties of the Purchaser.  The Purchaser hereby makes the
-----------------------------------------------
following  representations  and  warranties  to  the  Company:

     (a)     Organization  and  Standing  of  the Purchaser.  The Purchaser is a
             ----------------------------------------------
corporation  or partnership duly incorporated or organized, validly existing and
in  good  standing  under  the  laws of the jurisdiction of its incorporation or
organization.

     (b)     Authorization and Power.  The Purchaser has the requisite power and
             -----------------------
authority  to  enter  into  and  perform this Agreement and to purchase the Note
being  sold  to  it  hereunder.  The execution, delivery and performance of this
Agreement  and  the  Registration  Rights  Agreement  by  such Purchaser and the
consummation by it of the transactions contemplated hereby and thereby have been
duly  authorized  by  all  necessary  corporate  or  partnership  action (if the
Purchaser  is  an  entity),  and  no  further  consent  or authorization of such
Purchaser  or its Board of Directors, stockholders, or partners, as the case may
be,  is  required.  Each of this Agreement and the Registration Rights Agreement
has  been  duly  authorized,  executed  and  delivered  by  such  Purchaser.

     (c)     -No  Conflicts.  The  execution,  delivery  and performance of this
              -------------
Agreement  and  the  Registration  Rights Agreement and the consummation by such
Purchaser of the transactions contemplated hereby and thereby or relating hereto
do  not  and  will  not  (i)  result  in a violation of such Purchaser's charter
documents  or bylaws or (ii) conflict with, or constitute a default (or an event
which  with  notice  or  lapse of time or both would become a default) under, or
give  to  others  any  rights  of  termination,  amendment,  acceleration  or
cancellation  of  any agreement, indenture or instrument to which such Purchaser
is  a  party,  or  result in a violation of any law, rule, or regulation, or any
order, judgment or decree of any court or governmental agency applicable to such
Purchaser  or its properties (except for such conflicts, defaults and violations
as  would  not, individually or in the aggregate, have a Material Adverse Effect
on  such  Purchaser).  Such  Purchaser  is  not  required to obtain any consent,
authorization or order of, or make any filing or registration with, any court or
governmental  agency  in  order for it to execute, deliver or perform any of its
obligations  under  this  Agreement  or  the  Registration  Rights Agreement, or
relating hereto or thereto, or to purchase the Note in accordance with the terms
hereof,  provided that for purposes of the representation made in this sentence,
such  Purchaser  is  assuming  and  relying  upon  the  accuracy of the relevant
representations  and  agreements  of  the  Company  herein.

     (d)     Acquisition  for  Investment.  The Purchaser is purchasing the Note
             ----------------------------
and  acquiring  the  Warrant  solely  for  its  own  account  for the purpose of
investment  and  not with a view to or for sale in connection with distribution.
The Purchaser does not have a present intention to sell the Note or the Warrant,
nor  a  present  arrangement  (whether  or  not legally binding) or intention to
effect  any  distribution of the Note or the Warrant to or through any person or
entity; provided, however, that by making the representations herein and subject
        --------  -------
to  Section  2.2(f) below, such Purchaser does not agree to hold the Note or the
Warrant for any minimum or other specific term and reserves the right to dispose
of  the  Note  or  the Warrant at any time in accordance with Federal securities
laws  applicable  to  such  disposition.  Such Purchaser acknowledges that it is
able  to  bear  the financial risks associated with an investment in the Note or
the  Warrant  and  that  it  has  been  given full access to such records of the
Company  and  the  subsidiaries  and  to  the  officers  of  the Company and the
subsidiaries  as  it  has  deemed  necessary  or  appropriate to conduct its due
diligence  investigation.

     (e)     Accredited Purchaser.  The Purchaser is an "accredited investor" as
             --------------------
defined  in  Regulation D promulgated under the Securities Act and is a resident
of  the  jurisdiction  indicated  on  Exhibit  A  hereto.

     (f)     Rule  144.  The  Purchaser understands that the Shares must be held
             ---------
indefinitely  unless  such  Shares are registered under the Securities Act or an
exemption from registration is available.  Such Purchaser acknowledges that such
person is familiar with Rule 144 of the rules and regulations of the Commission,
as  amended,  promulgated  pursuant to the Securities Act ("Rule 144"), and that
such  person  has  been advised that Rule 144 permits resales only under certain
circumstances.  Such  Purchaser  understands that to the extent that Rule 144 is
not  available,  such  person  will  be unable to sell any Shares without either
registration under the Securities Act or the existence of another exemption from
such  registration  requirement.

     (g)     General.  Such  Purchaser  understands  that  the  Shares are being
             -------
offered  and sold in reliance on a transactional exemption from the registration
requirement of Federal and state securities laws and the Company is relying upon
the  truth  and  accuracy  of  the  representations,  warranties,  agreements,
acknowledgments  and  understandings of such Purchaser set forth herein in order
to  determine  the  applicability of such exemptions and the suitability of such
Purchaser  to  acquire  the  Shares.

     (h)    Foreign  Purchaser. The Purchaser is  not a "U.S. person" as defined
           ------------------
under  Rule  902(o)  of Regulation S under the Securities Act.  The Purchaser is
not  acquiring  the  Note  and  Warrant  for  the account or benefit of any U.S.
person.

     (i) Offshore Transaction. The document effecting this purchase and sale has
         --------------------
been  executed  by the Purchaser outside the "United States" (as defined in Rule
902(p)  of Regulation S).  The Purchaser is acquiring the Note and Warrant in an
"offshore  transaction"  (as  defined in Rule 902(i) of Regulation S).  The Note
and  Warrant  were  not offered to the Purchaser in the United States and at the
time  of  execution of this Agreement and the time of any offer to the Purchaser
to purchase the Note and Warrant hereunder, the Purchaser was physically outside
of  the  United  States.

      (j)  Independent Investigation; Advertisements. The Purchaser, in offering
           -------------------------------------------
to  purchase  the  Note  and  Warrant  hereunder,  has  relied  solely  upon  an
independent  investigation  made  by  such Purchaser and its representatives, if
any, and has, prior to the date hereof, been given access to and the opportunity
to  examine all books and records of the Company, and all material contracts and
documents  of  the  Company.  In  making its investment decision to purchase the
Note  and  Warrant,  the  Purchaser  is  not  relying  on  any  oral  or written
representations  or  assurances  from  the  Company  or  any other person or any
representation  of  the  Company  or any other person other than as set forth in
this  Agreement,  or  on  any  information other than contained in the Company's
public  filings  required  under the Act and the Exchange Act.  The Purchaser is
not  subscribing  for  the  Note and Warrant as a result of or subsequent to any
advertisement,  article,  notice  or  other  communication  published  in  any
newspaper,  magazine  or  similar media or broadcast over television or radio or
presented  at  any  seminar.

COVENANTS

     The  Company  covenants  with the Purchaser as follows, which covenants are
for  the  benefit  of  the  Purchaser  and  its  permitted assignees (as defined
herein).

          -SECURITIES  COMPLIANCE.
           ----------------------

     (a)     The  Company  shall  notify the Commission in accordance with their
rules  and  regulations,  of  the  transactions  contemplated  by  any  of  the
Transaction  Documents,  and  shall take all necessary action and proceedings as
may  be  required  and permitted by applicable law, rule and regulation, for the
legal  and valid issuance of the Note and the Warrant Shares to the Purchaser or
subsequent  holders.

     (b)     The  Company  is  relying  upon  the  truth  and  accuracy  of  the
representations,  warranties,  agreements, acknowledgments and understandings of
the  Purchaser  set  forth  herein  in  order  to determine the applicability of
Federal  and  state  securities  laws  exemptions  and  the  suitability  of the
Purchaser  to  acquire  the  Note.

          -Registration and Listing.  The Company will cause its Common Stock to
           ------------------------
continue  to  be  registered  under Sections 12(b) or 12(g) of the Exchange Act,
will  comply in all respects with its reporting and filing obligations under the
Exchange  Act,  will  comply  with  all requirements related to any registration
statement filed pursuant to this Agreement or the Registration Rights Agreement,
and  will  not take any action or file any document (whether or not permitted by
the  Securities Act or the rules promulgated thereunder) to terminate or suspend
such  registration  or  to  terminate  or  suspend  its  reporting  and  filing
obligations  under  the  Exchange  Act  or  Securities  Act, except as permitted
herein.  The  Company  will take all action necessary to continue the listing or
trading of its Common Stock on the over-the-counter electronic bulletin board or
any  successor  market.

          -Inspection  Rights.  The Company shall permit, during normal business
           ------------------
hours  and  upon reasonable request and reasonable notice, each Purchaser or any
employees, agents or representatives thereof, so long as such Purchaser shall be
obligated  hereunder to purchase the Note or shall beneficially own any Note, or
shall  own  Conversion Shares which, in the aggregate, represent more than 2% of
the  total  combined  voting power of all voting securities then outstanding, to
examine and make reasonable copies of and extracts from the records and books of
account  of,  and  visit  and  inspect  the  properties,  assets, operations and
business of the Company and any subsidiary, and to discuss the affairs, finances
and  accounts  of  the  Company  and  any  subsidiary  with any of its officers,
consultants,  directors,  and  key  employees.

          -Compliance  with  Laws.  The  Company  shall  comply,  and cause each
           ----------------------
subsidiary  to  comply, with all applicable laws, rules, regulations and orders,
noncompliance  with  which  could  have  a  Material  Adverse  Effect.

          -Keeping  of Records and Books of Account.  The Company shall keep and
           ----------------------------------------
cause  each  subsidiary  to keep adequate records and books of account, in which
complete  entries  will  be  made  in accordance with GAAP consistently applied,
reflecting  all  financial transactions of the Company and its subsidiaries, and
in which, for each fiscal year, all proper reserves for depreciation, depletion,
obsolescence,  amortization,  taxes,  bad debts and other purposes in connection
with  its  business  shall  be  made.

          -Reporting  Requirements.  The  Company shall furnish the following to
           -----------------------
each  Purchaser  so  long  as  such  Purchaser  shall  be obligated hereunder to
purchase  the  Note  or shall beneficially own any Note, or shall own Conversion
Shares  which,  in  the  aggregate, represent more than 2% of the total combined
voting  power of all voting securities then outstanding, provided, however, that
                                                         --------  -------
the  Company  shall  not be obligated to furnish the following, if the following
reports  have  been  filed  by  the  Company with the Commission pursuant to the
Commission's  "electronic  data  gathering  and  retrieval"  (EDGAR)  service:

     (a)     Quarterly Reports filed with the Commission on Form 10-Q as soon as
available,  and  in  any event within 45 days after the end of each of the first
three  (3)  fiscal  quarters  of  the  Company;

     (b)     Annual  Reports  filed  with the Commission on Form 10-K as soon as
available,  and in any event within 90 days after the end of each fiscal year of
the  Company;  and

     (c)     Copies of all notices and information, including without limitation
notices  and proxy statements in connection with any meetings, that are provided
to  holders  of  shares  of Common Stock, contemporaneously with the delivery of
such  notices  or  information  to  such  holders  of  Common  Stock.

          -Amendments.  The  Company  shall  not amend or waive any provision of
           ----------
the  Certificate  or  Bylaws of the Company, or Registration Rights Agreement in
any  way  that  would  adversely  affect  the liquidation preferences, dividends
rights,  conversion rights, voting rights or redemption rights of the holders of
the  Note.

     -     Other  Agreements.  The Company shall not enter into any agreement in
           -----------------
which  the terms of such agreement would restrict or impair the right or ability
to  perform  of  the  Company  or any subsidiary under any Transaction Document.

     -     Distributions.  So  long  as any Note remain outstanding, the Company
           -------------
agrees  that  it  shall  not  (i)  declare  or  pay  any  dividends  or make any
distributions  to  any  holder(s)  of Common Stock or (ii) purchase or otherwise
acquire  for  value,  directly  or  indirectly, any Common Stock or other equity
security  of  the  Company.

          -Intentionally  Omitted.
           ----------------------

          Regulation  S.  The  Company  covenants and agrees that if the Company
          -------------
fails  to  register  the Conversion Shares within 150 days from the Closing Date
under  the  terms  and  conditions of the Registration Rights Agreement attached
hereto  as  Exhibit  D,  then  for so long as such registration statement is not
effective  and  as  any  of  the  Shares  remain  outstanding and continue to be
"restricted securities" within the meaning of Rule 144 under the Securities Act,
the  Company  shall, in order to permit resales of any of the Shares pursuant to
Regulation  S  under  the  Securities  Act,  (a)  continue  to file all material
required to be filed pursuant to Section 13(a) or 15(d) of the Exchange Act, and
(b)  not  knowingly  engage  in  directed selling efforts in connection with the
resale  of  securities  by  any  Purchaser  under  Regulation  S.

          -Future  Financings.  The Company covenants and agrees that during the
           ------------------
period  from  the  Closing  Date through the 180th day immediately following the
effective  date  of  the  Registration Statement (as such term is defined in the
Registration  Rights  Agreement),  the  Company shall not, without notice to the
Purchaser,  offer,  sell  or  issue:  (i) any shares of Common Stock or (ii) any
securities  convertible or exchangeable into Common Stock other than a Permitted
Financing.  For  purposes  of  this  Section 3.12, a "Permitted Financing" shall
mean  shares  of  Common  Stock  to  be  issued pursuant to the Convertible Note
Purchase  Agreement,  dated  October 4, 2001, by and among certain investors and
the  Company.

     -     Reservation  of Shares.  Immediately upon the filing of a Certificate
           ----------------------
of  Amendment  to  the  Company's  Certificate  of  Incorporation  with the Utah
Secretary of State increasing its authorized capital stock and so long as any of
the  Notes  or  Warrants  remain  outstanding, the Company shall take all action
necessary  to  at  all  times  have  authorized, and reserved for the purpose of
issuance,  no  less  than 150% of the aggregate number of shares of Common Stock
needed  to  provide  for  the  issuance of the Conversion Shares and the Warrant
Shares.

     -     Transfer  Agent  Instructions.  The  Company  shall issue irrevocable
           -----------------------------
instructions  to its transfer agent, and any subsequent transfer agent, to issue
certificates,  registered  in  the  name  of  each  Purchaser  or its respective
nominee(s),  for the Conversion Shares and the Warrant Shares in such amounts as
specified  from time to time by each Purchaser to the Company upon conversion of
the  Note  or  exercise  of the Warrant in the form of Exhibit E attached hereto
(the  "Irrevocable  Transfer Agent Instructions").  Prior to registration of the
Conversion  Shares  and  the  Warrant  Shares under the Securities Act, all such
certificates  shall bear the restrictive legend specified in Section 6.1 of this
Agreement.  The  Company warrants that no instruction other than the Irrevocable
Transfer  Agent  Instructions  referred to in this Section 3.14 will be given by
the  Company to its transfer agent and that the Shares 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  3.14  shall  affect  in  any way each Purchaser's obligations and
agreements  set  forth  in  Section 6.1 to comply with all applicable prospectus
delivery  requirements,  if  any,  upon  resale  of  the Shares.  If a Purchaser
provides the Company with an opinion of counsel, in a generally acceptable form,
to  the  effect  that a public sale, assignment or transfer of the Shares may be
made without registration under the Securities Act or the Purchaser provides the
Company  with reasonable assurances that the Shares can be sold pursuant to Rule
144  without  any  restriction  as  to the number of securities acquired as of a
particular  date that can then be immediately sold, the Company shall permit the
transfer,  and,  in  the  case  of the Conversion Shares and the Warrant Shares,
promptly  instruct  its transfer agent to issue one or more certificates in such
name  and  in  such denominations as specified by such Purchaser and without any
restrictive  legend.  The  Company  acknowledges  that  a  breach  by  it of its
obligations under this Section 3.14 will cause irreparable harm to the Purchaser
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 Section 3.14 will be inadequate and agrees, in the event
of  a  breach  or  threatened  breach  by  the Company of the provisions of this
Section  3.14,  that  the  Purchaser shall be entitled, in addition to all other
available  remedies,  to  an  order and/or injunction restraining any breach and
requiring  immediate  issuance  and  transfer,  without the necessity of showing
economic  loss  and  without  any  bond  or  other  security  being  required.

Conditions

     -     Conditions  Precedent  to  the  Obligation of the Company to Sell the
           ---------------------------------------------------------------------
Note.  The  obligation  hereunder  of the Company to issue and sell the Note and
   -
the  Warrant  to  the  Purchaser is subject to the satisfaction or waiver, at or
before  the  Closing  Date,  of  each  of the conditions set forth below.  These
conditions  are  for the Company's sole benefit and may be waived by the Company
at  any  time  in  its  sole  discretion.

     (a)     Accuracy  of  Each Purchaser's Representations and Warranties.  The
             -------------------------------------------------------------
representations  and  warranties  of each Purchaser 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  that  time, except for representations and warranties that are
expressly  made  as of a particular date, which shall be true and correct in all
material  respects  as  of  such  date.

     (b)     Performance  by the Purchaser.  The Purchaser 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  Purchaser  at  or  prior  to  the  Closing  Date.

     (c)     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 which
prohibits  the  consummation  of  any  of  the transactions contemplated by this
Agreement.

     Section  4.2     Conditions Precedent to the Obligation of the Purchaser to
                      ----------------------------------------------------------
Purchase the Note.  The obligation hereunder of the Purchaser to acquire and pay
-----------------
for  the  Note  and  the Warrant is subject to the satisfaction or waiver, at or
before  the  Closing  Date,  of  each  of the conditions set forth below.  These
conditions  are  for  the  Purchaser's  sole  benefit  and  may be waived by the
Purchaser  at  any  time  in  its  sole  discretion.

     (a)     Accuracy  of the Company's Representations and Warranties.  Each of
             ---------------------------------------------------------
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 that time (except for representations and warranties that speak
as  of  a  particular  date),  which  shall  be true and correct in all material
respects  as  of  such  date.

     (b)     Performance  by  the  Company.  The  Company  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  the  Company  at  or  prior  to  the  Closing  Date.

     (c)     No  Suspension,  Etc.  From  the  date  hereof to the Closing Date,
             ---------------------
trading  in  the  Company's  Common  Stock  shall not have been suspended by the
Commission  (except  for any suspension of trading of limited duration agreed to
by the Company, which suspension shall be terminated prior to the Closing Date),
and,  at  any time prior to the Closing Date, trading in securities generally as
reported  by  Bloomberg  Financial  Markets  ("Bloomberg")  shall  not have been
suspended  or  limited,  or  minimum  prices  shall not have been established on
securities  whose  trades  are  reported  by Bloomberg, or on the New York Stock
Exchange, nor shall a banking moratorium have been declared either by the United
States or New York State authorities, nor shall there have occurred any material
outbreak  or  escalation  of  hostilities  or  other  national  or international
calamity  or  crisis of such magnitude in its effect on, or any material adverse
change  in  any  financial  market  which, in each case, in the judgment of such
Purchaser,  makes  it  impracticable  or  inadvisable  to  purchase  the  Note.

     (d)     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 which
prohibits  the  consummation  of  any  of  the transactions contemplated by this
Agreement.

     (e)     No Proceedings or Litigation.  No action, suit or proceeding before
             ----------------------------
any  arbitrator  or any governmental authority shall have been commenced, and no
investigation  by any governmental authority shall have been threatened, against
the  Company  or any subsidiary, or any of the officers, directors or affiliates
of  the  Company  or  any  subsidiary seeking to restrain, prevent or change the
transactions  contemplated  by  this Agreement, or seeking damages in connection
with  such  transactions.

     (f)     Opinion  of Counsel, Etc.  At the Closing, the Purchaser shall have
             -------------------------
received an opinion of counsel to the Company, dated the date of the Closing, in
the  form  of Exhibit F hereto, and such other certificates and documents as the
Purchaser  or  its  counsel  shall  reasonably  require incident to the Closing.

     (g)     Registration  Rights  Agreement.  At the Closing, the Company shall
             -------------------------------
have executed and delivered the Registration Rights Agreement to each Purchaser.

     (h)     Certificates.  The  Company  shall  have  executed and delivered to
             ------------
each  Purchaser, the certificates (in such denominations as such Purchaser shall
request)  for  the Note and the Warrant being purchased by such Purchaser at the
Closing.

     (i)     Resolutions.  Prior  to the Closing Date, the Board of Directors of
             -----------
the  Company shall have adopted resolutions consistent with Section 2.1(b) above
in  a  form  reasonably  acceptable  to  such  Purchaser  (the  "Resolutions").

     (j)     Reservation of Shares. Immediately upon the filing of a Certificate
             ---------------------
of  Amendment  to  the  Company's  Certificate  of  Incorporation  with the Utah
Secretary  of  State  increasing its authorized capital stock, the Company shall
authorize, reserve and maintain out of its authorized and unissued Common Stock,
solely  for the purpose of effecting the conversion of the Note and the exercise
of the Warrant, a number of shares of Common Stock equal to at least 150% of the
aggregate  number  of  Conversion  Shares  issuable  upon conversion of the Note
outstanding  on  the Closing Date and the number of Warrant Shares issuable upon
exercise  of  the  Warrant assuming such Warrant was granted on the Closing Date
(after  giving  effect  to  the Note and the Warrant to be issued on the Closing
Date and assuming such Note and Warrant were fully convertible or exercisable on
such  date  regardless  of  any  limitation  on  the  timing  or  amount of such
conversions  or  exercises).

     (k)     Transfer  Agent  Instructions.  The  Irrevocable  Transfer  Agent
             -----------------------------
Instructions,  in  the  form  of  Exhibit  E  attached  hereto,  shall have been
delivered  to  and  acknowledged  in  writing  by  the Company's transfer agent.

     (l)     Secretary's  Certificate.  The Company shall have delivered to such
             ------------------------
Purchaser a secretary's certificate, dated as of the Closing Date, as to (i) the
Resolutions,  (ii)  the  Certificate, (iii) the Bylaws, each as in effect at the
Closing,  and  (iv)  the authority and incumbency of the officers of the Company
executing  the  Transaction  Documents  and  any  other documents required to be
executed  or  delivered  in  connection  therewith.

REGISTRATION  RIGHTS

     At  the  Closing,  the  Company  and  the  Purchaser  shall  enter  into  a
Registration  Rights  Agreement  in  the  form  attached  hereto  as  Exhibit D.

Certificate  Legend

Legend.  Each  certificate  representing  the  Note  and  the  Warrant  and,  if
------
appropriate,  securities  issued  upon conversion and exercise thereof, shall be
------
stamped or otherwise imprinted with a legend substantially in the following form
--
(in addition to any legend required by applicable state securities or "blue sky"
laws):

THE  SECURITIES REPRESENTED BY THIS CERTIFICATE (THE "SECURITIES") HAVE NOT BEEN
REGISTERED  UNDER  THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")
OR  ANY  STATE  SECURITIES  LAWS  AND  MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED  OF  UNLESS  REGISTERED  UNDER  THE SECURITIES ACT AND UNDER APPLICABLE
STATE SECURITIES LAWS OR PEN INTERCONNECT INC. SHALL HAVE RECEIVED AN OPINION OF
ITS  COUNSEL  THAT  REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND
UNDER  THE  PROVISIONS  OF  APPLICABLE  STATE  SECURITIES  LAWS IS NOT REQUIRED.

     The  Company  agrees  to reissue certificates representing the Note and the
Warrant, without the legend set forth above if at such time, prior to making any
transfer  of any Note, Warrant, Conversion Shares or Warrant Shares, such holder
thereof shall give written notice to the Company describing the manner and terms
of  such  transfer  and  removal  as  the  Company may reasonably request.  Such
proposed  transfer will not be effected until: (a) the Company has notified such
holder  that  either  (i) in the opinion of Company counsel, the registration of
such Note, Warrant, Conversion Shares or Warrant Shares under the Securities Act
is  not  required  in  connection  with  such  proposed  transfer;  or  (ii)  a
registration  statement  under  the  Securities  Act  covering  such  proposed
disposition  has  been  filed  by the Company with the Commission and has become
effective under the Securities Act; and (b) the Company has notified such holder
that  either:  (i)  in  the  opinion  of  Company  counsel,  the registration or
qualification  under  the  securities  or  "blue  sky"  laws of any state is not
required  in  connection with such proposed disposition, or (ii) compliance with
applicable  state  securities or "blue sky" laws has been effected.  The Company
will  use its best efforts to respond to any such notice from a holder within 10
days.  In  the  case  of any proposed transfer under this Section 6, the Company
will  use reasonable efforts to comply with any such applicable state securities
or  "blue sky" laws, but shall in no event be required, in connection therewith,
to qualify to do business in any state where it is not then qualified or to take
any  action that would subject it to tax or to the general service of process in
any  state where it is not then subject.  The restrictions on transfer contained
in  Section  6.1  shall  be in addition to, and not by way of limitation of, any
other restrictions on transfer contained in any other section of this Agreement.

Termination

          -Termination  by  Mutual Consent.  This Agreement may be terminated at
           -------------------------------
any  time prior to the Closing Date by the mutual written consent of the Company
and  the  Purchaser.

          -Other Termination.  This Agreement may be terminated by the action of
           -----------------
the  Board  of  Directors  of the Company or by the Purchaser at any time if the
Closing  shall  not  have  been  consummated by October 31, 2001, as long as the
failure  to  so  consummate  is  not  the  fault  of  the  terminating  party.

     -     Effect of Termination.  In the event of termination by the Company or
           ---------------------
the  Purchaser,  written  notice  thereof  shall forthwith be given to the other
party  and  the transactions contemplated by this Agreement and the Registration
Rights Agreement shall be terminated without further action by either party.  If
this  Agreement  is  terminated  as  provided in Section 7.1 or 7.2 herein, this
Agreement  shall  become  void  and  of  no further force and effect, except for
Sections  9.1  and  9.2,  and  Article VIII herein.  Nothing in this Section 7.3
shall  be  deemed to release the Company or any Purchaser from any liability for
any  breach  under  this  Agreement  or the Registration Rights Agreement, or to
impair  the  rights  of  the  Company  and  the  Purchaser  to  compel  specific
performance  by  the other party of its obligations under this Agreement and the
Registration  Rights  Agreement.

Indemnification

     -     General Indemnity.  The Company agrees to indemnify and hold harmless
           -----------------
the  Purchaser  (and  its  respective  directors,  officers, affiliates, agents,
successors  and  assigns)  from  and  against  any  and all losses, liabilities,
deficiencies,  costs,  damages  and  expenses  (including,  without  limitation,
reasonable attorney's fees, charges and disbursements) incurred by the Purchaser
as a result of any inaccuracy in or breach of the representations, warranties or
covenants  made  by  the  Company herein.  The Purchaser agrees to indemnify and
hold  harmless  the  Company  and  its  directors, officers, affiliates, agents,
successors  and  assigns  from  and  against  any  and  all losses, liabilities,
deficiencies,  costs,  damages  and  expenses  (including,  without  limitation,
reasonable attorneys fees, charges and disbursements) incurred by the Company as
result  of  any  inaccuracy  in  or breach of the representations, warranties or
covenants  made  by  the  Purchaser  herein.

          -Indemnification  Procedure.  Any  party  entitled  to indemnification
           --------------------------
under this Article VIII (an "indemnified party") will give written notice to the
indemnifying  party  of  any matters giving rise to a claim for indemnification;
provided, that the failure of any party entitled to indemnification hereunder to
give  notice  as provided herein shall not relieve the indemnifying party of its
obligations  under  this Article VIII except to the extent that the indemnifying
party  is  actually  prejudiced  by  such  failure  to give notice.  In case any
action,  proceeding  or claim is brought against an indemnified party in respect
of  which  indemnification  is sought hereunder, the indemnifying party shall be
entitled  to  participate  in  and,  unless  in  the  reasonable judgment of the
indemnified  party  a conflict of interest between it and the indemnifying party
may  exist  with  respect  of  such  action,  proceeding or claim, to assume the
defense  thereof  with counsel reasonably satisfactory to the indemnified party.
In  the  event  that the indemnifying party advises an indemnified party that it
will  contest  such  a  claim for indemnification hereunder, or fails, within 30
days of receipt of any indemnification notice to notify, in writing, such person
of  its  election to defend, settle or compromise, at its sole cost and expense,
any  action,  proceeding or claim (or discontinues its defense at any time after
it  commences  such  defense),  then  the  indemnified party may, at its option,
defend,  settle  or  otherwise  compromise  or pay such action or claim.  In any
event,  unless  and until the indemnifying party elects in writing to assume and
does  so  assume  the  defense  of  any  such  claim,  proceeding or action, the
indemnified party's costs and expenses arising out of the defense, settlement or
compromise  of  any  such action, claim or proceeding shall be losses subject to
indemnification hereunder.  The indemnified party shall cooperate fully with the
indemnifying  party  in  connection  with any negotiation or defense of any such
action  or claim by the indemnifying party and shall furnish to the indemnifying
party  all  information  reasonably  available  to  the  indemnified party which
relates  to  such  action  or  claim.  The  indemnifying  party  shall  keep the
indemnified party fully apprised at all times as to the status of the defense or
any  settlement  negotiations  with  respect thereto.  If the indemnifying party
elects  to  defend any such action or claim, then the indemnified party shall be
entitled  to  participate in such defense with counsel of its choice at its sole
cost and expense.  The indemnifying party shall not be liable for any settlement
of  any  action, claim or proceeding effected without its prior written consent.
Notwithstanding  anything in this Article VIII to the contrary, the indemnifying
party  shall  not, without the indemnified party's prior written consent, settle
or  compromise  any claim or consent to entry of any judgment in respect thereof
which  imposes  any future obligation on the indemnified party or which does not
include,  as  an  unconditional  term thereof, the giving by the claimant or the
plaintiff to the indemnified party of a release from all liability in respect of
such  claim.  The indemnification required by this Article VIII shall be made by
periodic  payments  of  the amount thereof during the course of investigation or
defense, as and when bills are received or expense, loss, damage or liability is
incurred,  so  long  as  the indemnified party irrevocably agrees to refund such
moneys  if it is ultimately determined by a court of competent jurisdiction that
such  party  was  not  entitled to indemnification.  Notwithstanding anything in
this  Article  VIII  to  the  contrary, the Purchaser shall be liable under this
Article  VIII  for  only  that  amount of indemnification as does not exceed the
proceeds  to  such Purchaser as a result of the sale of the Conversion Shares by
the  Purchaser.  The  indemnity agreements contained herein shall be in addition
to  (a)  any  cause of action or similar rights of the indemnified party against
the indemnifying party or others, and (b) any liabilities the indemnifying party
may  be  subject  to  pursuant  to  the  law.

Miscellaneous

     -     Fees and Expenses.  Each party shall pay the fees and expenses of its
           -----------------
advisors,  counsel,  accountants  and  other  experts,  if  any,  and  all other
expenses,  incurred  by  such  party  incident  to the negotiation, preparation,
execution, delivery and performance of this Agreement.  In addition, the Company
shall  pay  all  reasonable  fees  and  expenses  incurred  by  the Purchaser in
connection with the filing and declaration of effectiveness by the Commission of
the  Registration  Statement  (as defined in the Registration Rights Agreement),
any  amendments,  modifications or waivers of this Agreement or any of the other
Transaction  Documents  or  incurred  in connection with the enforcement of this
Agreement  and  any  of  the  other  Transaction  Documents,  including, without
limitation,  all  reasonable  attorneys fees and expenses. The Company shall pay
all  stamp  or other similar taxes and duties levied in connection with issuance
of  the  Note  pursuant  hereto.

          -Specific  Enforcement,  Consent  to  Jurisdiction.
           -------------------------------------------------

     (a)     The  Company  and  the  Purchaser  acknowledge  and  agree  that
irreparable  damage  would occur in the event that any of the provisions of this
Agreement  or the Registration Rights Agreement were not performed in accordance
with  their specific terms or were otherwise breached.  It is accordingly agreed
that the parties shall be entitled to an injunction or injunctions to prevent or
cure  breaches  of  the  provisions of this Agreement or the Registration Rights
Agreement  and  to  enforce  specifically  the  terms  and  provisions hereof or
thereof,  this being in addition to any other remedy to which any of them may be
entitled  by  law  or  equity.

     (b)     Each  of  the  Company  and  the  Purchaser  (i) hereby irrevocably
submits  to  the  exclusive  jurisdiction  of  the  United States District Court
sitting  in  the  Southern  District  of  New York for the purposes of any suit,
action  or  proceeding  arising  out  of  or  relating  to this Agreement or the
Registration  Rights  Agreement and (ii) hereby waives, and agrees not to assert
in  any  such  suit,  action  or proceeding, any claim that it is not personally
subject  to  the jurisdiction of such court, that the suit, action or proceeding
is  brought  in  an  inconvenient forum or that the venue of the suit, action or
proceeding  is  improper.  Any  suit,  action  or  proceeding  arising out of or
relating  to  this  Agreement  or  the  Registration Rights Agreement brought by
either  the Company or the Purchaser shall be brought in the jurisdiction of the
United States District Court sitting in the Southern District of New York.  Each
of  the  Company  and the Purchaser consents to process being served in any such
suit,  action  or  proceeding  by  mailing  a  copy thereof to such party at the
address  in  effect  for notices to it under this Agreement and agrees that such
service  shall  constitute  good  and  sufficient  service of process and notice
thereof.  Nothing  in  this Section 9.2 shall affect or limit any right to serve
process  in  any  other  manner  permitted  by  law.

          -Entire  Agreement;  Amendment.  This  Agreement  contains  the entire
           -----------------------------
understanding  of  the  parties  with respect to the matters covered hereby and,
except as specifically set forth herein or in the Transaction Documents, neither
the  Company  nor the Purchaser makes any representations, warranty, covenant or
undertaking with respect to such matters.  No provision of this Agreement may be
waived  or  amended other than by a written instrument signed by the Company and
the  Purchaser, and no provision hereof may be waived other than by an a written
instrument signed by the party against whom enforcement of any such amendment or
waiver  is  sought.  No  consideration shall be offered or paid to any person to
amend  or  consent  to  a  waiver or modification of any provision of any of the
Transaction  Documents  unless  the same consideration is also offered to all of
the  parties to the Transaction Documents or holder of the Note, as the case may
be.

          -Notices.  Any  notice, demand, request, waiver or other communication
           -------
required  or  permitted  to  be given hereunder shall be in writing and shall be
effective  (a)  upon hand delivery by telex (with correct answer back received),
telecopy or facsimile at the address or number designated below (if delivered on
a  business  day  during  normal  business  hours  where  such  notice  is to be
received), or the first business day following such delivery (if delivered other
than  on  a business day during normal business hours where such notice is to be
received)  or  (b)  on  the second business day following the date of mailing by
express  courier  service,  fully  prepaid,  addressed  to such address, or upon
actual  receipt of such mailing, whichever shall first occur.  The addresses for
such  communications  shall  be:

If  to  the  Company:       Pen  Interconnect,  Inc
                            C/o  Amanda  Corporation
                            13765  Alton  Parkway  Suite  F
                            Irvine,  California  92618
                            Attention:  Chief  Executive  Officer
                            Telephone  No.:  (949)  859-6279
                             Facsimile  No.:  (949)  859-4380

If  to  any  Purchaser:     At  the  address of such Purchaser set forth on
                            Exhibit  A  to  this  Agreement.

with  copies  (which  copies
shall not constitute notice
to  the  Company)  to:      Naccarato  &  Associates
                            19600  Fairchild,  Suite  260
                            Irvine,  California  92618
                            Attention:  Owen  M.  Naccarato,  Esq.
                            Telephone  No.:  (949)  851-9261
                            Facsimile  No.:  (949)  851-9262

     Any  party  hereto  may from time to time change its address for notices by
giving  at  least  ten  (10)  days written notice of such changed address to the
other  party  hereto.

     -     Waivers.  No  waiver  by  either party of any default with respect to
           -------
any  provision, condition or requirement of this Agreement shall be deemed to be
a continuing waiver in the future or a waiver of any other provisions, condition
or  requirement hereof, nor shall any delay or omission of any party to exercise
any  right  hereunder  in  any  manner  impair  the  exercise of any  such right
accruing  to  it  thereafter.

          -Headings.  The  article,  section  and  subsection  headings  in this
           --------
Agreement  are  for  convenience  only  and  shall not constitute a part of this
Agreement  for  any other purpose and shall not be deemed to limit or affect any
of  the  provisions  hereof.

          -Successors  and  Assigns.  This  Agreement  shall be binding upon and
           ------------------------
inure to the benefit of the parties and their successors and assigns.  After the
Closing,  the  assignment  by  a party to this Agreement of any rights hereunder
shall  not  affect  the  obligations  of  such  party  under  this  Agreement.

          -No  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.

          -Governing  Law.  This Agreement shall be governed by and construed in
           --------------
accordance  with  the  internal  laws  of  the State of New York, without giving
effect  to  the  choice  of  law  provisions.

        Survival.  The  representations  and  warranties  of the Company and the
        --------
Purchaser  contained  in Sections 2.1(o) and (s) should survive indefinitely and
those  contained  in  Article II, with the exception of Sections 2.1(o) and (s),
shall  survive  the execution and delivery hereof and the Closing until the date
three  (3)  years  from  the  Closing Date, and the agreements and covenants set
forth in Article I, III, V, VII, VIII and IX of this Agreement shall survive the
execution  and  delivery  hereof  and  the Closing hereunder until the Purchaser
beneficially  owns  (determined in accordance with Rule 13d-3 under the Exchange
Act)  less  than  2% of the total combined voting power of all voting securities
then  outstanding,  provided,  that  Sections 3.1, 3.2, 3.4, 3.5, 3.7, 3.8, 3.9,
3.12,  3.13, and 3.14 shall not expire until the Registration Statement required
by  Section  2  of the Registration Rights Agreement is no longer required to be
effective  under  the  terms  and  conditions  of Registration Rights Agreement.

          -Counterparts.  This  Agreement  may  be  executed  in  any  number of
           ------------
counterparts,  all  of  which  taken  together shall constitute one and the same
instrument and shall become effective when counterparts have been signed by each
party  and  delivered  to the other parties hereto, it being understood that all
parties  need  not  sign  the  same  counterpart.  In the event any signature is
delivered  by  facsimile  transmission,  the  party using such means of delivery
shall  cause  four  (4)  additional  executed  signature  pages to be physically
delivered  to  the  other  parties  within  five  (5)  days of the execution and
delivery  hereof.

          -Publicity.  The  Company  agrees  that it will not disclose, and will
           ---------
not  include  in  any public announcement, the name of the Purchaser without the
consent  of  the Purchaser, which consent shall not be unreasonably withheld, or
unless  and  until  such disclosure is required by law or applicable regulation,
and  then  only  to  the  extent  of  such  requirement.

          -Severability.  The  provisions of this Agreement and the Registration
           ------------
Rights  Agreement  are  severable  and, in the event that any court of competent
jurisdiction  shall  determine that any one or more of the provisions or part of
the  provisions contained in this Agreement or the Registration Rights Agreement
shall,  for  any  reason, be held to be invalid, illegal or unenforceable in any
respect,  such  invalidity,  illegality or unenforceability shall not affect any
other  provision  or  part  of a provision of this Agreement or the Registration
Rights  Agreement  shall be reformed and construed as if such invalid or illegal
or  unenforceable provision, or part of such provision, had never been contained
herein,  so  that  such  provisions would be valid, legal and enforceable to the
maximum  extent  possible.

          -Further  Assurances.  From and after the date of this Agreement, upon
           -------------------
the  request  of  the  Purchaser  or  the  Company,  each of the Company and the
Purchaser  shall  execute  and  deliver  such  instruments,  documents and other
writings  as  may  be reasonably necessary or desirable to confirm and carry out
and to effectuate fully the intent and purposes of this Agreement, the Note, the
Conversion  Shares,  the Warrant, the Warrant Shares and the Registration Rights
Agreement.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

     IN  WITNESS  WHEREOF,  the  parties hereto have caused this Agreement to be
duly  executed by their respective authorized officer as of the date first above
written.

                         PEN  INTERCONNECT,  INC.

                          By:  /s/  Jose  Candia
                                    ------------
                          Name:  Jose  Candia
                          Title: Chief  Executive  Officer

                          STONESTREET  LIMITED  PARTNERSHIP

                          By:  /s/  Mr.  Michael  Finkelstein
                                    -------------------------
                          Name:  Mr.  Michael  Finkelstein
                          Title:

<PAGE>
                                    EXHIBIT A

                    Purchaser / Number of Notes and Warrants

Name  and  Residence          Number  of  Notes               Dollar  Amount
of  Purchaser             and  Warrants  Purchased           of Investment
----------------------     ------------------------          --------------

Stonestreet Limited
 Partnership                Note: $250,000.00 Note.           $250,000.00
260 Town Center Blvd.       Warrant:  to  purchase
Ste.  201                   8,055,853  shares  of
Markham,  ON  L3R  8H8      Common  Stock.
Fax  No.:  416-956-8989

<PAGE>
                                    EXHIBIT B

                       Form of Convertible Promissory Note

<PAGE>
                                    EXHIBIT C

                                 Form of Warrant

<PAGE>
                                    EXHIBIT D

                      Form of Registration Rights Agreement

<PAGE>
                                    EXHIBIT E

                       Form of Transfer Agent Instructions

<PAGE>
                                    EXHIBIT F

                                 Form of Opinion747469_3
                                                                   Exhibit 10.36

                          REGISTRATION RIGHTS AGREEMENT
                          -----------------------------

     This  Registration  Rights Agreement (this "Agreement") is made and entered
                                                 ---------
into  as  of  October  4, 2001, between Pen Interconnect Inc, a Utah corporation
(the  "Company")  and  the  purchaser  listed on Schedule I attached hereto (the
       -------
"Purchaser")
    ------

     This  Agreement  is  being  entered  into  pursuant to the Convertible Note
Purchase  Agreement,  dated  as  of  the date hereof between the Company and the
Purchaser  (the  "Purchase  Agreement").
                  -------------------

     The  Company  and  the  Purchaser  hereby  agree  as  follows:

     1.     Definitions.
            -----------

     Capitalized  terms  used  and  not  otherwise defined herein shall have the
meanings given such terms in the Purchase Agreement.  As used in this Agreement,
the  following  terms  shall  have  the  following  meanings:

     "Advice"  shall  have  meaning  set  forth  in  Section  3(o).
      ------

     "Affiliate"  means,  with  respect  to  any  Person,  any other Person that
      ---------
directly or indirectly controls or is controlled by or under common control with
such  Person.  For  the  purposes  of this definition, "control," when used with
                                                        -------
respect to any Person, means the possession, direct or indirect, of the power to
direct  or  cause  the  direction of the management and policies of such Person,
whether  through  the  ownership of voting securities, by contract or otherwise;
and  the  terms  of  "affiliated,"  "controlling" and "controlled" have meanings
                      ----------     -----------       ----------
correlative  to  the  foregoing.

     "Board"  shall  have  meaning  set  forth  in  Section  3(n).
      -----

          "Business Day" means any day except Saturday, Sunday and any day which
           ------------
shall  be a legal holiday or a day on which banking institutions in the state of
New York generally are authorized or required by law or other government actions
to  close.

          "Closing  Date" means the date of the closing of the purchase and sale
           -------------
of  the  Notes  and  Warrant  Shares  pursuant  to  the  Purchase  Agreement.

"Commission"  means  the  Securities  and  Exchange  Commission.
 ----------

     "Common  Stock"  means  the  Company's  Common  Stock, par value $0.005 per
      -------------
share.
     "Effectiveness  Date"  means with respect to the Registration Statement the
      -------------------
150th  day  following  the  Closing  Date.

     "Effectiveness  Period"  shall  have the meaning set forth in Section 2(a).
      ---------------------

<PAGE>
     "Event"  shall  have  the  meaning  set  forth  in  Section  7(e)(i).
      -----

     "Event  Date"  shall  have  the  meaning  set  forth  in  Section  7(e)(i).
      -----------

     "Exchange  Act"  means  the  Securities  Exchange  Act of 1934, as amended.
      -------------

     "Filing  Date"  means  the  60th  day  following  the  Closing  Date.
      ------------

          "Holder" or "Holders" means the holder or holders, as the case may be,
           ------      -------
from  time  to  time  of  Registrable  Securities.

     "Indemnified  Party"  shall  have  the  meaning  set forth in Section 5(c).
      ------------------

     "Indemnifying  Party"  shall  have  the  meaning set forth in Section 5(c).
      -------------------

"Losses"  shall  have  the  meaning  set  forth  in  Section  5(a).
 ------

          "Person"  means  an  individual  or a corporation, partnership, trust,
           ------
incorporated  or  unincorporated  association,  joint venture, limited liability
company,  joint stock company, government (or an agency or political subdivision
thereof)  or  other  entity  of  any  kind.

          "Proceeding" means an action, claim, suit, investigation or proceeding
           ----------
(including,  without limitation, an investigation or partial proceeding, such as
a  deposition),  whether  commenced  or  threatened.

     "Prospectus"  means  the  prospectus included in the Registration Statement
      ----------
(including,  without  limitation,  a  prospectus  that  includes any information
previously  omitted from a prospectus filed as part of an effective registration
statement  in  reliance upon Rule 430A promulgated under the Securities Act), as
amended  or supplemented by any prospectus supplement, with respect to the terms
of  the  offering  of  any  portion of the Registrable Securities covered by the
Registration  Statement,  and  all  other  amendments  and  supplements  to  the
Prospectus,  including  post-effective amendments, and all material incorporated
by  reference  in  such  Prospectus.

     "Registrable  Securities"  means  the  shares of Common Stock issuable upon
      -----------------------
conversion  of the Note and the shares of Common Stock issuable upon exercise of
the  Warrant;  provided, however, that Registrable Securities shall include (but
               --------  -------
not be limited to) a number of shares of Common Stock equal to no less than 150%
of  the  maximum  number  of shares of Common Stock which would be issuable upon
conversion  of  the  Note  and  upon  exercise  of  the  Warrant,  assuming such
conversion  and  exercise  occurred  on  the  Closing  Date  or the Filing Date,
whichever  date  would  result  in the greater number of Registrable Securities.
Such  registered shares of Common Stock shall be allocated among the Holders pro
rata  based  on the total number of Registrable Securities issued or issuable as
of  each  date that a Registration Statement, as amended, relating to the resale
of  the  Registrable  Securities  is  declared  effective  by  the  Commission.
Notwithstanding  anything herein contained to the contrary, if the actual number
of shares of Common Stock issuable upon conversion of the Note and upon exercise
of  the  Warrant  exceeds  150% of the number of shares of Common Stock issuable
upon  conversion  of  the  Note  and  upon  exercise of the Warrant based upon a
computation  as  at  the  Closing Date or the Filing Date, the term "Registrable
Securities"  shall  be deemed to include such additional shares of Common Stock.

     "Registration  Statement"  means  the  registration  statements  and  any
      -----------------------
additional  registration  statements contemplated by Section 2(a), including (in
      --
each  case)  the  Prospectus,  amendments  and  supplements to such registration
statement  or  Prospectus,  including  pre-  and  post-effective amendments, all
exhibits  thereto,  and  all  material  incorporated  by  reference  in  such
registration  statement.

     "Rule  144"  means  Rule  144 promulgated by the Commission pursuant to the
      ---------
Securities  Act,  as  such Rule may be amended from time to time, or any similar
rule  or regulation hereafter adopted by the Commission having substantially the
same  effect  as  such  Rule.

     "Rule  158"  means  Rule  158 promulgated by the Commission pursuant to the
      ---------
Securities  Act,  as  such Rule may be amended from time to time, or any similar
rule  or regulation hereafter adopted by the Commission having substantially the
same  effect  as  such  Rule.

     "Rule  415"  means  Rule  415 promulgated by the Commission pursuant to the
      ---------
Securities  Act,  as  such Rule may be amended from time to time, or any similar
rule  or regulation hereafter adopted by the Commission having substantially the
same  effect  as  such  Rule.

     "Securities  Act"  means  the  Securities  Act  of  1933,  as  amended.
      ---------------

     "Special  Counsel"  means any special counsel to the Holders, for which the
      ----------------
Holders  will  be  reimbursed  by  the  Company  pursuant  to  Section  4.

     2.     Shelf  Registration.
            --------------------

On  or  prior  to  the  Filing  Date the Company shall prepare and file with the
Commission  a "shelf" Registration Statement covering all Registrable Securities
for  an  offering  to  be  made on a continuous basis pursuant to Rule 415.  The
Registration  Statement  shall be on Form S-2.  The Company shall (i) not permit
any  securities  other  than  the  Registrable  Securities to be included in the
Registration  Statement  without  the  consent of the Purchaser and (ii) use its
best  efforts to cause the Registration Statement to be declared effective under
the  Securities Act as promptly as possible after the filing thereof, but in any
event  prior  to the Effectiveness Date, and to keep such Registration Statement
continuously  effective  under  the  Securities  Act  until  such date as is the
earlier  of  (x)  the  date  when  all  Registrable  Securities  covered by such
Registration  Statement  have been sold or (y) the date on which the Registrable
Securities  may  be  sold  without  any  restriction  pursuant  to  Rule  144 as
determined  by  the counsel to the Company pursuant to a written opinion letter,
addressed  to  the  Company's  transfer agent to such effect (the "Effectiveness
                                                                   -------------
Period").  If  an  additional  Registration  Statement  is  required to be filed
   ---
because  the  actual  number  of shares of Common Stock into which the Notes are
   --
convertible  and  the  Warrants  are exercisable exceeds the number of shares of
Common  Stock  initially  registered in respect of the Conversion Shares and the
Warrant Shares based upon the computation on the Closing Date, the Company shall
have  forty-five  (45)  Business  Days  to  file  such  additional  Registration
Statement,  and  the Company shall use its best efforts to cause such additional
Registration  Statement  to  be  declared effective by the Commission as soon as
possible,  but  in  no  event  later  than  ninety  (90)  days  after  filing.

     3.     Registration  Procedures.
            -------------------------

     In  connection  with  the Company's registration obligations hereunder, the
Company  shall:

     (a)     Prepare  and  file  with  the  Commission on or prior to the Filing
Date,  a  Registration  Statement  on  Form S-2 in accordance with the method or
methods of distribution thereof as specified by the Holders (except if otherwise
directed  by  the  Holders),  and  cause  the  Registration  Statement to become
effective  and  remain effective as provided herein; provided, however, that not
                                                     --------  -------
less  than  five  (5)  Business  Days  prior  to  the filing of the Registration
Statement  or  any  related  Prospectus  or  any amendment or supplement thereto
(including  any  document  that would be incorporated therein by reference), the
Company  shall (i) furnish to the Holders and any Special Counsel, copies of all
such  documents  proposed  to  be  filed,  which  documents  (other  than  those
incorporated  by  reference)  will  be subject to the review of such Holders and
such  Special  Counsel,  and  (ii) cause its officers and directors, counsel and
independent  certified  public accountants to respond to such inquiries as shall
be necessary, in the reasonable opinion of counsel to such Holders, to conduct a
reasonable  investigation within the meaning of the Securities Act.  The Company
shall  not  file  the  Registration  Statement  or  any  such  Prospectus or any
amendments  or  supplements  thereto  to  which the Holders of a majority of the
Registrable Securities or any Special Counsel shall reasonably object in writing
within  three  (3)  Business  Days  of  their  receipt  thereof.

     (b)     (i) Prepare and file with the Commission such amendments, including
post-effective  amendments, to the Registration Statement as may be necessary to
keep  the  Registration  Statement  continuously  effective as to the applicable
Registrable  Securities  for  the Effectiveness Period and prepare and file with
the  Commission such additional Registration Statements in order to register for
resale  under  the  Securities Act all of the Registrable Securities; (ii) cause
the  related Prospectus to be amended or supplemented by any required Prospectus
supplement,  and  as so supplemented or amended to be filed pursuant to Rule 424
(or  any similar provisions then in force) promulgated under the Securities Act;
(iii)  respond  as  promptly  as  possible  to  any  comments  received from the
Commission  with  respect to the Registration Statement or any amendment thereto
and  as promptly as possible provide the Holders true and complete copies of all
correspondence  from  and  to  the  Commission  relating  to  the  Registration
Statement;  and  (iv) comply in all material respects with the provisions of the
Securities  Act  and  the  Exchange  Act  with respect to the disposition of all
Registrable  Securities  covered  by  the  Registration  Statement  during  the
applicable  period in accordance with the intended methods of disposition by the
Holders thereof set forth in the Registration Statement as so amended or in such
Prospectus  as  so  supplemented.

     (c)     Notify  the  Holders  of  Registrable Securities to be sold and any
Special  Counsel  as promptly as possible (and, in the case of (i)(A) below, not
less  than  five  (5)  days  prior to such filing) and (if requested by any such
Person)  confirm  such  notice  in  writing  no  later than one (1) Business Day
following  the  day  (i)(A)  when  a  Prospectus or any Prospectus supplement or
post-effective  amendment to the Registration Statement is proposed to be filed;
(B) when the Commission notifies the Company whether there will be a "review" of
such  Registration  Statement and whenever the Commission comments in writing on
such  Registration  Statement and (C) with respect to the Registration Statement
or any post-effective amendment, when the same has become effective; (ii) of any
request  by  the Commission or any other Federal or state governmental authority
for amendments or supplements to the Registration Statement or Prospectus or for
additional  information;  (iii)  of  the  issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement covering any or
all  of the Registrable Securities or the initiation of any Proceedings for that
purpose;  (iv)  if  at any time any of the representations and warranties of the
Company  contained  in  any  agreement contemplated hereby ceases to be true and
correct  in  all  material  respects;  (v)  of the receipt by the Company of any
notification  with  respect  to the suspension of the qualification or exemption
from  qualification  of  any  of  the  Registrable  Securities  for  sale in any
jurisdiction,  or  the  initiation  or  threatening  of  any Proceeding for such
purpose;  and  (vi) of the occurrence of any event that makes any statement made
in  the  Registration  Statement  or  Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that  requires  any revisions to the Registration Statement, Prospectus or other
documents  so that, in the case of the Registration Statement or the Prospectus,
as  the case may be, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make  the statements therein, in the light of the circumstances under which they
were  made,  not  misleading.

     (d)     Use  its  best  efforts  to  avoid  the issuance of, or, if issued,
obtain  the  withdrawal  of,  (i)  any order suspending the effectiveness of the
Registration Statement or (ii) any suspension of the qualification (or exemption
from  qualification)  of  any  of  the  Registrable  Securities  for sale in any
jurisdiction,  at  the  earliest  practicable  moment.

     (e)     If  requested  by  the  Holders  of  a  majority in interest of the
Registrable  Securities,  (i) promptly incorporate in a Prospectus supplement or
post-effective  amendment  to the Registration Statement such information as the
Company  reasonably agrees should be included therein and (ii) make all required
filings  of  such Prospectus supplement or such post-effective amendment as soon
as  practicable after the Company has received notification of the matters to be
incorporated  in  such  Prospectus  supplement  or  post-effective  amendment.

     (f)     Furnish  to each Holder and any Special Counsel, without charge, at
least  one  conformed  copy  of  each  Registration Statement and each amendment
thereto,  including  financial  statements  and  schedules,  all  documents
incorporated or deemed to be incorporated therein by reference, and all exhibits
to  the extent requested by such Person (including those previously furnished or
incorporated  by reference) promptly after the filing of such documents with the
Commission.

     (g)     Promptly  deliver  to  each Holder and any Special Counsel, without
charge, as many copies of the Prospectus or Prospectuses (including each form of
prospectus)  and  each  amendment  or  supplement  thereto  as  such Persons may
reasonably  request;  and  the  Company  hereby  consents  to  the  use  of such
Prospectus  and  each  amendment  or  supplement  thereto by each of the selling
Holders  in  connection with the offering and sale of the Registrable Securities
covered  by  such  Prospectus  and  any  amendment  or  supplement  thereto.

     (h)     Prior  to  any  public  offering of Registrable Securities, use its
best  efforts  to  register or qualify or cooperate with the selling Holders and
any  Special  Counsel  in  connection with the registration or qualification (or
exemption  from  such  registration  or  qualification)  of  such  Registrable
Securities  for  offer  and  sale  under the securities or Blue Sky laws of such
jurisdictions  within  the  United  States as any Holder requests in writing, to
keep  each such registration or qualification (or exemption therefrom) effective
during  the  Effectiveness  Period  and  to  do any and all other acts or things
necessary  or  advisable  to enable the disposition in such jurisdictions of the
Registrable  Securities  covered by a Registration Statement; provided, however,
                                                              --------  -------
that  the  Company  shall not be required to qualify generally to do business in
any  jurisdiction  where  it is not then so qualified or to take any action that
would subject it to general service of process in any such jurisdiction where it
is  not  then  so subject or subject the Company to any material tax in any such
jurisdiction  where  it  is  not  then  so  subject.

     (i)     Cooperate with the Holders to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold pursuant
to a Registration Statement, which certificates shall be free of all restrictive
legends,  and  to enable such Registrable Securities to be in such denominations
and registered in such names as any Holder may request at least two (2) Business
Days  prior  to  any  sale  of  Registrable  Securities.

     (j)     Upon  the occurrence of any event contemplated by Section 3(c)(vi),
as  promptly  as  possible,  prepare  a  supplement  or  amendment,  including a
post-effective  amendment,  to the Registration Statement or a supplement to the
related  Prospectus  or  any  document incorporated or deemed to be incorporated
therein  by  reference,  and  file  any  other  required  document  so  that, as
thereafter  delivered,  neither  the  Registration Statement nor such Prospectus
will  contain an untrue statement of a material fact or omit to state a material
fact  required to be stated therein or necessary to make the statements therein,
in  the  light  of the circumstances under which they were made, not misleading.

     (k)     Use  its  best efforts to cause all Registrable Securities relating
to  such  Registration  Statement  to  be  listed on the OTC Bulletin Board, The
Nasdaq  Small-Cap  Market and any other securities exchange, quotation system or
market,  if  any,  on  which  similar  securities issued by the Company are then
listed  as  and  when  required  pursuant  to  the  Purchase  Agreement.

     (l)     Comply  in  all  material  respects  with  all applicable rules and
regulations  of  the  Commission  and  make  generally available to its security
holders  earning  statements  satisfying  the provisions of Section 11(a) of the
Securities Act and Rule 158 not later than 45 days after the end of any 12-month
period  (or  90  days  after  the end of any 12-month period if such period is a
fiscal  year)  commencing  on  the  first day of the first fiscal quarter of the
Company  after the effective date of the Registration Statement, which statement
shall  conform  to  the  requirements  of  Rule  158.

     (m)     The  Company  may  require  each  selling  Holder to furnish to the
Company  information  regarding  such  Holder  and  the  distribution  of  such
Registrable Securities as is required by law to be disclosed in the Registration
Statement,  and  the  Company may exclude from such registration the Registrable
Securities of any such Holder who unreasonably fails to furnish such information
within  a  reasonable  time  after  receiving  such  request.

     If  the Registration Statement refers to any Holder by name or otherwise as
the  holder  of  any  securities of the Company, then such Holder shall have the
right  to  require (if such reference to such Holder by name or otherwise is not
required by the Securities Act or any similar federal statute then in force) the
deletion  of  the reference to such Holder in any amendment or supplement to the
Registration  Statement  filed  or  prepared  subsequent  to  the time that such
reference  ceases  to  be  required.

     Each  Holder covenants and agrees that (i) it will not sell any Registrable
Securities  under the Registration Statement until it has received copies of the
Prospectus  as  then amended or supplemented as contemplated in Section 3(g) and
notice  from the Company that such Registration Statement and any post-effective
amendments  thereto  have  become  effective as contemplated by Section 3(c) and
(ii)  it and its officers, directors or Affiliates, if any, will comply with the
prospectus  delivery requirements of the Securities Act as applicable to them in
connection  with  sales  of  Registrable Securities pursuant to the Registration
Statement.

     Each  Holder agrees by its acquisition of such Registrable Securities that,
upon  receipt of a notice from the Company of the occurrence of any event of the
kind  described  in  Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v) or 3(c)(vi),
such  Holder  will  forthwith  discontinue  disposition  of  such  Registrable
Securities  under  the Registration Statement until such Holder's receipt of the
copies  of  the  supplemented  Prospectus  and/or amended Registration Statement
contemplated  by  Section 3(j), or until it is advised in writing (the "Advice")
                                                                        ------
by the Company that the use of the applicable Prospectus may be resumed, and, in
either  case, has received copies of any additional or supplemental filings that
are incorporated or deemed to be incorporated by reference in such Prospectus or
Registration  Statement.

     (n)     If  (i)  there  is  material  non-public  information regarding the
Company  which  the  Company's  Board  of  Directors  (the  "Board")  reasonably
                                                             -----
determines  not  to  be in the Company's best interest to disclose and which the
Company  is  not  otherwise required to disclose, or (ii) there is a significant
business  opportunity  (including,  but  not  limited  to,  the  acquisition  or
disposition  of  assets  (other  than in the ordinary course of business) or any
merger,  consolidation,  tender offer or other similar transaction) available to
the  Company  which  the  Board reasonably determines not to be in the Company's
best  interest  to  disclose, then the Company may postpone or suspend filing or
effectiveness  of  a  registration  statement  for  a  period  not  to exceed 20
consecutive  days,  provided  that  the  Company may not postpone or suspend its
obligation under this Section 3(n) for more than 45 days in the aggregate during
any  12 month period; provided, however, that no such postponement or suspension
                      --------  -------
shall  be  permitted for consecutive 20 day periods, arising out of the same set
of  facts,  circumstances  or  transactions.

     4.     Registration  Expenses.
            ----------------------

     All  fees  and  expenses  incident to the performance of or compliance with
this  Agreement by the Company, except as and to the extent specified in Section
4(b), shall be borne by the Company whether or not the Registration Statement is
filed  or  becomes  effective  and whether or not any Registrable Securities are
sold  pursuant to the Registration Statement.  The fees and expenses referred to
in  the  foregoing  sentence  shall  include,  without  limitation,  (i)  all
registration  and  filing fees (including, without limitation, fees and expenses
(A)  with respect to filings required to be made with the OTC Bulletin Board and
each  other  securities  exchange  or market on which Registrable Securities are
required hereunder to be listed, (B) with respect to filings required to be made
with  the  National  Association  of  Securities  Dealers,  Inc.  and  the  NASD
Regulation,  Inc.  and  (C) in compliance with state securities or Blue Sky laws
(including,  without  limitation,  fees  and  disbursements  of  counsel for the
Holders in connection with Blue Sky qualifications of the Registrable Securities
and  determination  of  the  eligibility  of  the  Registrable  Securities  for
investment  under the laws of such jurisdictions as the Holders of a majority of
Registrable  Securities  may  designate)),  (ii)  printing  expenses (including,
without limitation, expenses of printing certificates for Registrable Securities
and of printing prospectuses if the printing of prospectuses is requested by the
holders of a majority of the Registrable Securities included in the Registration
Statement),  (iii)  messenger,  telephone  and  delivery expenses, (iv) fees and
disbursements of counsel for the Company and Special Counsel for the Holders, in
the  case  of the Special Counsel, to a maximum amount of $5,000, (v) Securities
Act liability insurance, if the Company so desires such insurance, and (vi) fees
and expenses of all other Persons retained by the Company in connection with the
consummation  of  the  transactions  contemplated  by this Agreement, including,
without  limitation,  he Company's independent public accountants (including the
expenses  of  any  comfort  letters  or  costs  associated  with the delivery by
independent  public  accountants  of  a  comfort letter or comfort letters).  In
addition,  the  Company  shall  be  responsible for all of its internal expenses
incurred in connection with the consummation of the transactions contemplated by
this  Agreement (including, without limitation, all salaries and expenses of its
officers  and  employees  performing legal or accounting duties), the expense of
any  annual audit, the fees and expenses incurred in connection with the listing
of  the Registrable Securities on any securities exchange as required hereunder.

     5.          Indemnification.
                 ---------------

     (a)     Indemnification by the Company.  The Company shall, notwithstanding
             ------------------------------
any  termination of this Agreement, indemnify and hold harmless each Holder, the
officers,  directors,  agents,  brokers  (including  brokers  who offer and sell
Registrable  Securities  as  principal as a result of a pledge or any failure to
perform  under a margin call of Common Stock), investment advisors and employees
of each of them, each Person who controls any such Holder (within the meaning of
Section  15  of  the  Securities  Act or Section 20 of the Exchange Act) and the
officers,  directors,  agents  and employees of each such controlling Person, to
the  fullest  extent  permitted  by applicable law, from and against any and all
losses,  claims,  damages,  liabilities,  costs  (including, without limitation,
costs of preparation and attorneys' fees) and expenses (collectively, "Losses"),
                                                                       ------
as  incurred,  arising  out  of  or  relating  to  any  untrue or alleged untrue
statement  of  a  material  fact  contained  in  the Registration Statement, any
Prospectus  or  any form of prospectus or in any amendment or supplement thereto
or  in any preliminary prospectus, or arising out of or relating to any omission
or  alleged  omission  of  a  material  fact  required  to  be stated therein or
necessary  to make the statements therein (in the case of any Prospectus or form
of  prospectus  or  supplement  thereto, in the light of the circumstances under
which  they  were  made)  not  misleading, except to the extent, but only to the
extent,  that  such  untrue  statements  or  omissions  are  based  solely  upon
information  regarding  such  Holder furnished in writing to the Company by such
Holder  expressly for use therein, which information was reasonably relied on by
the  Company  for  use therein or to the extent that such information relates to
such  Holder  or  such  Holder's  proposed method of distribution of Registrable
Securities  and  was  reviewed  and expressly approved in writing by such Holder
expressly for use in the Registration Statement, such Prospectus or such form of
Prospectus  or in any amendment or supplement thereto.  The Company shall notify
the  Holders  promptly of the institution, threat or assertion of any Proceeding
of  which  the Company is aware in connection with the transactions contemplated
by  this  Agreement.

     (b)     Indemnification  by  Holders.  Each Holder shall, severally and not
             ----------------------------
jointly,  indemnify  and  hold  harmless  the  Company, the directors, officers,
agents  and  employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors,  officers,  agents  or  employees of such controlling Persons, to the
fullest  extent  permitted  by  applicable  law, from and against all Losses, as
incurred,  arising  solely out of or based solely upon any untrue statement of a
material  fact  contained  in the Registration Statement, any Prospectus, or any
form  of  prospectus, or arising solely out of or based solely upon any omission
of  a  material  fact  required  to  be  stated therein or necessary to make the
statements  therein  (in  the  case  of  any Prospectus or form of prospectus or
supplement  thereto,  in  the  light  of the circumstances under which they were
made)  not  misleading,  to the extent, but only to the extent, that such untrue
statement or omission is contained in any information so furnished in writing by
such  Holder  to  the  Company  specifically  for  inclusion in the Registration
Statement  or  such  Prospectus  and that such information was reasonably relied
upon  by  the  Company for use in the Registration Statement, such Prospectus or
such  form  of prospectus or to the extent that such information relates to such
Holder  or  such  Holder's  proposed  method  of  distribution  of  Registrable
Securities  and  was  reviewed  and expressly approved in writing by such Holder
expressly for use in the Registration Statement, such Prospectus or such form of
Prospectus.

     (c)     Conduct  of  Indemnification  Proceedings.  If  any
                       -----------------------------------------
Proceeding shall be brought or asserted against any Person entitled to indemnity
hereunder (an "Indemnified Party"), such Indemnified Party promptly shall notify
               -----------------
the  Person  from whom indemnity is sought (the "Indemnifying Party) in writing,
                                                 ------------------
and  the  Indemnifying  Party  shall  assume  the defense thereof, including the
employment  of  counsel reasonably satisfactory to the Indemnified Party and the
payment  of  all  fees and expenses incurred in connection with defense thereof;
provided,  that  the  failure of any Indemnified Party to give such notice shall
not relieve the Indemnifying Party of its obligations or liabilities pursuant to
this  Agreement,  except  (and  only)  to  the  extent  that it shall be finally
determined  by  a  court  of  competent jurisdiction (which determination is not
subject  to  appeal  or further review) that such failure shall have proximately
and  materially  adversely  prejudiced  the  Indemnifying  Party.

     An Indemnified Party shall have the right to employ separate counsel in any
such  Proceeding  and  to  participate  in the defense thereof, but the fees and
expenses  of  such  counsel shall be at the expense of such Indemnified Party or
Parties  unless:  (1)  the  Indemnifying Party has agreed in writing to pay such
fees  and  expenses; or (2) the Indemnifying Party shall have failed promptly to
assume  the  defense  of  such  Proceeding  and  to  employ  counsel  reasonably
satisfactory  to such Indemnified Party in any such Proceeding; or (3) the named
parties  to  any  such Proceeding (including any impleaded parties) include both
such  Indemnified  Party  and the Indemnifying Party, and such Indemnified Party
shall  have  been  advised  by  counsel that a conflict of interest is likely to
exist  if  the  same  counsel  were  to represent such Indemnified Party and the
Indemnifying  Party  (in  which  case,  if  such  Indemnified Party notifies the
Indemnifying  Party  in writing that it elects to employ separate counsel at the
expense  of  the  Indemnifying  Party, the Indemnifying Party shall not have the
right  to assume the defense thereof and such counsel shall be at the expense of
the  Indemnifying  Party).  The  Indemnifying  Party shall not be liable for any
settlement  of  any  such Proceeding effected without its written consent, which
consent  shall  not  be  unreasonably  withheld.  No  Indemnifying  Party shall,
without  the  prior  written  consent  of  the  Indemnified  Party,  effect  any
settlement  of  any pending Proceeding in respect of which any Indemnified Party
is  a  party,  unless  such settlement includes an unconditional release of such
Indemnified  Party  from  all liability on claims that are the subject matter of
such  Proceeding.

          All  fees  and expenses of the Indemnified Party (including reasonable
fees  and  expenses  to  the extent incurred in connection with investigating or
preparing  to  defend  such  Proceeding  in  a manner not inconsistent with this
Section)  shall  be  paid to the Indemnified Party, as incurred, within ten (10)
Business Days of written notice thereof to the Indemnifying Party (regardless of
whether it is ultimately determined that an Indemnified Party is not entitled to
indemnification  hereunder;  provided,  that  the Indemnifying Party may require
such  Indemnified  Party to undertake to reimburse all such fees and expenses to
the  extent  it  is finally judicially determined that such Indemnified Party is
not  entitled  to  indemnification  hereunder).

     (d)     Contribution.  If  a   claim  for indemnification under Section
                  ------------
5(a)  or  5(b)  is  unavailable  to an Indemnified Party because of a failure or
refusal  of  a  governmental  authority  to  enforce  such  indemnification  in
accordance  with  its terms (by reason of public policy or otherwise), then each
Indemnifying  Party,  in  lieu  of  indemnifying  such  Indemnified Party, shall
contribute  to  the amount paid or payable by such Indemnified Party as a result
of  such  Losses,  in  such proportion as is appropriate to reflect the relative
fault  of  the  Indemnifying  Party and Indemnified Party in connection with the
actions,  statements  or  omissions  that resulted in such Losses as well as any
other  relevant  equitable  considerations.  The  relative  fault  of  such
Indemnifying  Party  and  Indemnified Party shall be determined by reference to,
among  other  things,  whether  any  action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission of a
material fact, has been taken or made by, or relates to information supplied by,
such Indemnifying, Party or Indemnified Party, and the parties' relative intent,
knowledge,  access  to  information  and  opportunity to correct or prevent such
action,  statement  or  omission.  The  amount  paid  or payable by a party as a
result  of any Losses shall be deemed to include, subject to the limitations set
forth  in  Section  5(c),  any reasonable attorneys' or other reasonable fees or
expenses  incurred by such party in connection with any Proceeding to the extent
such  party  would  have  been  indemnified  for  such  fees  or expenses if the
indemnification  provided  for  in  this  Section was available to such party in
accordance  with  its  terms.

          The  parties  hereto  agree that it would not be just and equitable if
contribution  pursuant  to  this  Section  5(d)  were  determined  by  pro  rata
allocation  or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
No  Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f)  of  the Securities Act) shall be entitled to contribution from any Person
who  was  not  guilty  of  such  fraudulent  misrepresentation.

          The  indemnity  and  contribution agreements contained in this Section
are  in  addition to any liability that the Indemnifying Parties may have to the
Indemnified  Parties

     6.     Rule  144.
            ---------

     As  long  as any Holder owns Shares, Conversion Shares, Warrants or Warrant
Shares,  the  Company  covenants to timely file (or obtain extensions in respect
thereof  and file within the applicable grace period) all reports required to be
filed by the Company after the date hereof pursuant to Section 13(a) or 15(d) of
the  Exchange  Act  and  to  promptly furnish the Holders with true and complete
copies  of  all  such  filings.  As  long  as any Holder owns Shares, Conversion
Shares,  Warrants  or  Warrant  Shares,  if  the Company is not required to file
reports  pursuant to Section 13(a) or 15(d) of the Exchange Act, it will prepare
and  furnish  to the Holders and make publicly available in accordance with Rule
144(c)  promulgated  under  the  Securities  Act  annual and quarterly financial
statements, together with a discussion and analysis of such financial statements
in  form  and  substance  substantially similar to those that would otherwise be
required  to  be  included  in reports required by Section 13(a) or 15(d) of the
Exchange  Act,  as  well  as any other information required thereby, in the time
period  that  such  filings would have been required to have been made under the
Exchange  Act.  The  Company  further  covenants  that it will take such further
action  as  any  Holder  may reasonably request, all to the extent required from
time  to time to enable such Person to sell Conversion Shares and Warrant Shares
without  registration  under  the  Securities  Act  within the limitation of the
exemptions  provided by Rule 144 promulgated under the Securities Act, including
providing  any  legal opinions relating to such sale pursuant to Rule 144.  Upon
the  request  of  any Holder, the Company shall deliver to such Holder a written
certification  of  a  duly authorized officer as to whether it has complied with
such  requirements.

     7.     Miscellaneous.
            -------------

     (a)     Remedies.  In  the event of a breach by the Company or by a Holder,
             --------
of any of their obligations under this Agreement, each Holder or the Company, as
the case may be, in addition to being entitled to exercise all rights granted by
law and under this Agreement, including recovery of damages, will be entitled to
specific  performance  of its rights under this Agreement.  The Company and each
Holder  agree  that monetary damages would not provide adequate compensation for
any losses incurred by reason of a breach by it of any of the provisions of this
Agreement  and  hereby  further  agrees  that,  in  the  event of any action for
specific  performance in respect of such breach, it shall waive the defense that
a  remedy  at  law  would  be  adequate.

     (b)     No  Inconsistent  Agreements.  Neither  the  Company nor any of its
             ----------------------------
subsidiaries  has,  as  of the date hereof entered into and currently in effect,
nor  shall  the Company or any of its subsidiaries, on or after the date of this
Agreement,  enter  into  any  agreement  with  respect to its securities that is
inconsistent  with  the  rights  granted  to  the  Holders  in this Agreement or
otherwise conflicts with the provisions hereof.  Except as disclosed in Schedule
                                                                        --------
2.1(c)  of  the  Purchase  Agreement,  neither  the  Company  nor  any  of  its
------
subsidiaries  has  previously  entered  into  any  agreement currently in effect
granting  any  registration  rights with respect to any of its securities to any
Person.  Without  limiting  the generality of the foregoing, without the written
consent  of  the  Holders  of  a  majority  of  the then outstanding Registrable
Securities,  the  Company shall not grant to any Person the right to request the
Company  to  register  any  securities  of  the Company under the Securities Act
unless  the rights so granted are subject in all respects to the prior rights in
full of the Holders set forth herein, and are not otherwise in conflict with the
provisions  of  this  Agreement.

     (c)     No  Piggyback on Registrations.  Neither the Company nor any of its
             ------------------------------
security  holders (other than the Holders in such capacity pursuant hereto or as
disclosed  in  Schedule 2.1(c) of the Purchase Agreement) may include securities
               ---------------
of  the  Company  in the Registration Statement, and the Company shall not after
the  date  hereof  enter  into  any agreement providing such right to any of its
securityholders,  unless  the right so granted is subject in all respects to the
prior  rights  in  full of the Holders set forth herein, and is not otherwise in
conflict  with  the  provisions  of  this  Agreement.

     (d)     Piggy-Back  Registrations.  If  at  any  time  when there is not an
             -------------------------
effective  Registration Statement covering (i) Conversion Shares or (ii) Warrant
Shares,  the  Company  shall determine to prepare and file with the Commission a
registration  statement  relating  to  an  offering  for  its own account or the
account  of  others  under  the  Securities Act of any of its equity securities,
other  than  on  Form  S-4 or Form S-8 (each as promulgated under the Securities
Act) or their then equivalents relating to equity securities to be issued solely
in  connection  with  any  acquisition  of  any  entity  or  business  or equity
securities  issuable  in  connection with stock option or other employee benefit
plans,  the  Company shall send to each holder of Registrable Securities written
notice  of  such  determination and, if within thirty (30) days after receipt of
such  notice,  any such holder shall so request in writing, (which request shall
specify the Registrable Securities intended to be disposed of by the Purchaser),
the  Company  will  cause  the  registration  under  the  Securities  Act of all
Registrable  Securities  which  the Company has been so requested to register by
the holder, to the extent requisite to permit the disposition of the Registrable
Securities  so  to  be  registered,  provided  that  if at any time after giving
written  notice  of  its  intention  to register any securities and prior to the
effective  date  of  the  registration  statement  filed in connection with such
registration,  the  Company shall determine for any reason not to register or to
delay  registration  of  such securities, the Company may, at its election, give
written  notice  of such determination to such holder and, thereupon, (i) in the
case  of a determination not to register, shall be relieved of its obligation to
register  any  Registrable  Securities in connection with such registration (but
not  from  its  obligation to pay expenses in accordance with Section 4 hereof),
and (ii) in the case of a determination to delay registering, shall be permitted
to  delay  registering  any  Registrable Securities being registered pursuant to
this  Section  7(d)  for  the same period as the delay in registering such other
securities.  The Company shall include in such registration statement all or any
part  of  such  Registrable  Securities  such  holder requests to be registered;
provided,  however,  that  the  Company  shall  not  be required to register any
     ---   -------
Registrable  Securities pursuant to this Section 7(d) that are eligible for sale
pursuant  to  Rule 144(k) of the Securities Act.  In the case of an underwritten
public  offering,  if  the  managing  underwriter(s)  or  underwriter(s)  should
reasonably  object  to  the  inclusion  of  the  Registrable  Securities in such
registration statement, then if the Company after consultation with the managing
underwriter  should  reasonably determine that the inclusion of such Registrable
Securities,  would materially adversely affect the offering contemplated in such
registration  statement, and based on such determination recommends inclusion in
such  registration  statement  of fewer or none of the Registrable Securities of
the  Holders,  then  (x)  the  number  of  Registrable Securities of the Holders
included  in  such  registration  statement shall be reduced pro-rata among such
Holders  (based  upon  the  number  of  Registrable  Securities  requested to be
included  in  the  registration),  if  the  Company  after consultation with the
underwriter(s)  recommends the inclusion of fewer Registrable Securities, or (y)
none  of  the  Registrable  Securities  of the Holders shall be included in such
registration  statement,  if  the  Company  after  consultation  with  the
underwriter(s)  recommends the inclusion of none of such Registrable Securities;
provided, however, that if Securities are being offered for the account of other
--------  -------
persons or entities as well as the Company, such reduction shall not represent a
greater  fraction of the number of Registrable Securities intended to be offered
by  the  Holders  than  the fraction of similar reductions imposed on such other
persons  or  entities  (other  than  the  Company).

     (e)     Failure  to  File  Registration  Statement  and  Other Events.  The
             -------------------------------------------------------------
Company  and  the  Purchaser  agree  that the Holders will suffer damages if the
Registration  Statement  is  not  filed  on  or prior to the Filing Date and not
declared  effective  by the Commission on or prior to the Effectiveness Date and
maintained in the manner contemplated herein during the Effectiveness Time or if
certain  other  events occur.  The Company and the Holders further agree that it
would  not  be  feasible to ascertain the extent of such damages with precision.
Accordingly,  if  (A) the Registration Statement is not filed on or prior to the
Filing  Date,  or is not declared effective by the Commission on or prior to the
Effectiveness  Date  (or  in  the  event an additional Registration Statement is
filed  because  the actual number of shares of Common Stock into which the Notes
are convertible and the Warrants are exercisable exceeds the number of shares of
Common  Stock  initially registered is not filed and declared effective with the
time  periods  set forth in Section 2(a)), or (B) the Company fails to file with
the  Commission  a  request  for  acceleration  in  accordance  with Rule 12dl-2
promulgated  under  the  Exchange  Act within five (5) Business Days of the date
that the Company is notified (orally or in writing, whichever is earlier) by the
Commission  that a Registration Statement will not be "reviewed," or not subject
to  further review, or (C) the Registration Statement is filed with and declared
effective  by  the  Commission  but  thereafter ceases to be effective as to all
Registrable  Securities at any time prior to the expiration of the Effectiveness
Period,  without  being  succeeded  immediately  by  a  subsequent  Registration
Statement filed with and declared effective by the Commission, or (D) trading in
the  Common Stock shall be suspended or if the Common Stock is delisted from the
OTC  Bulletin  Board or The Nasdaq Small-Cap Market for any reason for more than
three  Business  Days  in  the  aggregate,  or  (E) the conversion rights of the
Holders  are suspended for any reason except as a result of Section 5(a)(iii) of
the  Certificate  of  Designation,  or  (F)  the  Company breaches in a material
respect  any covenant or other material term or condition to this Agreement, the
Certificate  of Designation, the Purchase Agreement (other than a representation
or  warranty contained therein) or any other agreement, document, certificate or
other  instrument  delivered  in  connection  with the transactions contemplated
hereby  and thereby, and such breach continues for a period of thirty days after
written  notice  thereof to the Company, or (G) the Company has breached Section
3(n)  (any  such  failure  or  breach  being  referred to as an "Event," and for
                                                                 -----
purposes  of  clauses  (A)  and  (E) the date on which such Event occurs, or for
purposes  of  clause  (B) the date on which such five day period is exceeded, or
for  purposes  of  clause  (C)  after  more  than  fifteen Business Days, or for
purposes  of  clause  (D)  the  date  on which such three Business Day period is
exceeded,  or  for  clause  (F)  the  date  on  which  such thirty day period is
exceeded,  being  referred  to  as  "Event Date"), the Company shall pay, at the
                                     ----------
option of the Holder, an amount in cash or shares of Common Stock, as liquidated
damages  to  each  Holder  equal  to  1% for the first calendar month and 2% per
calendar  month  thereafter  or  portion  thereof of the principal amount of the
Notes  held by such Holder plus the principal amount of any Notes that have been
converted to the extent any of the Conversion Shares issued upon such conversion
have  not  been  sold  from  the Event Date until the applicable Event is cured.
Payments  to  be  made pursuant to this Section 7(e)(i) shall be due and payable
immediately  upon  demand in immediately available funds.   If the Holder elects
to  be paid in shares of Common Stock, the number of such shares of Common Stock
shall  be  based  on the liquidated damage amount divided by the Conversion Rate
(as  defined  in  the  Note).

     (f)     Amendments and Waivers. The provisions of this Agreement, including
              ----------------------
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given,unless the same shall be in writing and signed by the Company and each of
the Holders.  Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a  matter that relates exclusively to the
rights  of Holders and that does not directly or indirectly affect the rights of
other  Holders may be given by Holders of at least a majority of the Registrable
Securities  to which such waiver or consent relates; provided, however, that the
                                                     --------  -------
provisions of this sentence may not be amended, modified, or supplemented except
in  accordance  with  the  provisions  of  the  immediately  preceding sentence.

     (g)     Notices.  Any and all notices or other communications or deliveries
             -------
required  or permitted to be provided hereunder shall be in writing and shall be
deemed  given  and  effective on the earlier of (i) the date of transmission, if
such  notice  or  communication  is  delivered  via  facsimile  at the facsimile
telephone number specified for notice prior to 5:00 p.m., New York City time, on
a  Business  Day,  (ii) the Business Day after the date of transmission, if such
notice  or  communication  is delivered via facsimile at the facsimile telephone
number  specified  for  notice  later than 5:00 p.m., New York City time, on any
date  and  earlier  than 11:59 p.m., New York City time, on such date, (iii) the
Business  Day  following  the  date of mailing, if sent by nationally recognized
overnight  courier  service  or  (iv)  actual  receipt by the party to whom such
notice  is required to be given.  The addresses for such communications shall be
with  respect to each Holder at its address set forth under its name on Schedule
                                                                        --------
1  attached  hereto,  or  with  respect  to  the  Company,  addressed  to:

                    Pen  Interconnect,  Inc
                    C/o  Amanda  Corporation
                    13765  Alton  Parkway,  Suite  F
                    Irvine,  California  92618
                    Attention:  Chief  Executive  Officer
                    Telephone  No.:  (949)  859-6279
                    Facsimile  No.:  (949)  859-4380

or to such other address or addresses or facsimile number or numbers as any such
party  may  most recently have designated in writing to the other parties hereto
by  such  notice.  Copies of notices to the Company shall be sent to Naccarato &
Associates,  19600  Fairchild,  Suite  260,  Irvine  CA  92612  Attention:  Owen
Naccarato,  Facsimile  No.:  (949)  851-9262.

     (h)     Successors and Assigns. This Agreement shall be binding upon and
             -----------------------
inure to the benefit of the parties and their successors and permitted assigns
and shall inure to the benefit of each Holder and its successors and assigns.The
Company  may  not  assign  this  Agreement  or  any of its rights or obligations
hereunder  without  the prior written consent of each Holder.  The Purchaser may
assign  its rights hereunder in the manner and to the Persons as permitted under
the  Purchase  Agreement.

     (i) Assignment of Registration Rights. The rights of each Holder hereunder,
             ---------------------------------
including  the  right  to  have  the  Company  register  for  resale Registrable
Securities  in  accordance  with  the  terms  of  this  Agreement,  shall  be
automatically  assignable  by each Holder to any Affiliate of such Holder or any
other  Holder  or Affiliate of any other Holder of all or a portion of the Notes
or  the  Registrable  Securities  if:  (i) the Holder agrees in writing with the
transferee  or  assignee  to assign such rights, and a copy of such agreement is
furnished  to  the  Company within a reasonable time after such assignment, (ii)
the  Company  is,  within  a  reasonable time after such transfer or assignment,
furnished  with written notice of (a) the name and address of such transferee or
assignee,  and (b) the securities with respect to which such registration rights
are  being  transferred or assigned, (iii) following such transfer or assignment
the  further  disposition  of  such securities by the transferee or assignees is
restricted  under  the Securities Act and applicable state securities laws, (iv)
at  or  before  the time the Company receives the written notice contemplated by
clause  (ii)  of this Section, the transferee or assignee agrees in writing with
the Company to be bound by all of the provisions of this Agreement, and (v) such
transfer  shall have been made in accordance with the applicable requirements of
the Purchase Agreement.  In addition, each Holder shall have the right to assign
its  rights  hereunder to any other Person with the prior written consent of the
Company,  which  consent  shall  not  be  unreasonably  withheld.  The rights to
assignment  shall  apply  to  the  Holders  (and  to  subsequent) successors and
assigns.

     (j)     Counterparts.  This  Agreement  may  be  executed  in any number of
             ------------
counterparts,  each  of which when so executed shall be deemed to be an original
and,  all  of  which taken together shall constitute one and the same Agreement.
In  the  event  that  any signature is delivered by facsimile transmission, such
signature  shall create a valid binding obligation of the party executing (or on
whose behalf such signature is executed) the same with the same force and effect
as  if  such  facsimile  signature  were  the  original  thereof.

     (k)     Governing  Law.  This  Agreement shall be governed by and construed
             --------------
in  accordance  with  the  laws  of  the  State  of  New York, without regard to
principles  of  conflicts  of  law  thereof.

     (l)     Cumulative  Remedies.  The  remedies provided herein are cumulative
             --------------------
and  not  exclusive  of  any  remedies  provided  by  law.

     (m)     Severability.  If  any  term, provision, covenant or restriction of
             ------------
this  Agreement  is  held  to  be invalid, illegal, void or unenforceable in any
respect,  the remainder of the terms, provisions, covenants and restrictions set
forth  herein  shall  remain  in  full  force  and effect and shall in no way be
affected,  impaired  or  invalidated,  and  the  parties  hereto shall use their
reasonable  efforts  to find and employ an alternative means to achieve the same
or  substantially  the same result as that contemplated by such term, provision,
covenant  or  restriction.  It  is  hereby  stipulated  and  declared  to be the
intention  of  the  parties  that  they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter  declared  invalid,  illegal,  void  or  unenforceable.

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

     (o)     Shares Held by the Company and its Affiliates. Whenever the consent
             ---------------------------------------------
or  approval  of  Holders of a specified percentage of Registrable Securities is
required hereunder, Registrable Securities held by the Company or its Affiliates
(other  than  any Holder or transferees or successors or assigns thereof if such
Holder  is  deemed  to  be an Affiliate solely by reason of its holdings of such
Registrable Securities) shall not be counted in determining whether such consent
or  approval  was  given  by  the  Holders  of  such  required  percentage.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>
IN  WITNESS  WHEREOF,  the  parties  hereto have caused this Registration Rights
Agreement  to  be duly executed by their respective authorized persons as of the
date  first  indicated  above.

                         PEN  INTERCONNECT  Inc.

                         By:  /s/  Jose  Candia
                                   ------------
                         Name:  Jose  Candia
                         Title:   Chief  Executive  Officer

                         STONESTREET  LIMITED  PARTNERSHIP

                         By:  /s/  Michael  Finkelstein
                         Name:  Michael  Finkelstein
                         Title:

<PAGE>
                                   Schedule I
                                   ----------

STONESTREET  LIMITED  PARTNERSHIP
260  Town  Center  Blvd.  Ste  201
Markham,  ON  L3R  8H8
Fax  No.:  416-956-8989

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